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STATES\nSECURITIES AND EXCHANGE COMMISSION\nWashington, D.C. 20549\nFORM\n10-K\n(Mark One)\n\u2612\n\nANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\nFor the fiscal year ended\nSeptember\u00a027\n, 2025\nor\n\u2610\n\nTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\nFor the transition period from\n\n to\n\n.\nCommission File Number:\n001-36743\nApple Inc.\n(Exact name of Registrant as specified in its charter)\nCalifornia\n94-2404110\n(State or other jurisdiction\nof incorporation or organization)\n(I.R.S. Employer Identification No.)\nOne Apple Park Way\nCupertino\n,\nCalifornia\n95014\n(Address of principal executive offices)\n(Zip Code)\n(\n408\n)\n996-1010\n(Registrant\u2019s telephone number, including area code)\nSecurities registered pursuant to Section 12(b) of the Act:\nTitle of each class\nTrading symbol(s)\nName of each exchange on which registered\nCommon Stock, $0.00001 par value per share\nAAPL\nThe Nasdaq Stock Market LLC\n0.000% Notes due 2025\n\u2014\nThe Nasdaq Stock Market LLC\n1.625% Notes due 2026\n\u2014\nThe Nasdaq Stock Market LLC\n2.000% Notes due 2027\n\u2014\nThe Nasdaq Stock Market LLC\n1.375% Notes due 2029\n\u2014\nThe Nasdaq Stock Market LLC\n3.050% Notes due 2029\n\u2014\nThe Nasdaq Stock Market LLC\n0.500% Notes due 2031\n\u2014\nThe Nasdaq Stock Market LLC\n3.600% Notes due 2042\n\u2014\nThe Nasdaq Stock Market LLC\nSecurities registered pursuant to Section 12(g) of the Act:  None\nIndicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.\nYes\n\n\u2612\n\u00a0\u00a0\u00a0\u00a0\u00a0No\n\u2610\nIndicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.\nYes\n\u2610\n\nNo\n\n\u2612\nIndicate by check mark whether the Registrant (1)\u00a0has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2)\u00a0has been subject to such filing requirements for the past 90 days.\nYes\n\n\u2612\n\u00a0\u00a0\u00a0\u00a0\u00a0No\n\u2610\nIndicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (\u00a7232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).\nYes\n\n\u2612\n\u00a0\u00a0\u00a0\u00a0\u00a0No\n\u2610\nIndicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of \u201clarge accelerated filer,\u201d \u201caccelerated filer,\u201d \u201csmaller reporting company,\u201d and \u201cemerging growth company\u201d in Rule 12b-2 of the Exchange Act.\nLarge accelerated filer\n\u2612\nAccelerated filer\n\u2610\nNon-accelerated filer\n\u2610\nSmaller reporting company\n\u2610\nEmerging growth company\n\u2610\nIf an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.\n\u2610\nIndicate by check mark whether the Registrant has filed a report on and attestation to its management\u2019s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.\n\u2612\nIf securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.\n\u2610\nIndicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant\u2019s executive officers during the relevant recovery period pursuant to \u00a7240.10D-1(b).\n\u2610\nIndicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).\nYes\n\u2610\n\u00a0\u00a0\u00a0\u00a0\u00a0No\n\u2612\nThe aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant, as of March\u00a028, 2025, the last business day of the Registrant\u2019s most recently completed second fiscal quarter, was approximately $\n3,253,431,000,000\n. Solely for purposes of this disclosure, shares of common stock held by executive officers and directors of the Registrant as of such date have been excluded because such persons may be deemed to be affiliates. This determination of executive officers and directors as affiliates is not necessarily a conclusive determination for any other purposes.\n14,776,353,000\n shares of common stock were issued and outstanding as of October\u00a017, 2025.\nDOCUMENTS INCORPORATED BY REFERENCE\nPortions of the Registrant\u2019s definitive proxy statement relating to its 2026 annual meeting of shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The Registrant\u2019s definitive proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.\nApple Inc.\nForm 10-K\nFor the Fiscal Year Ended September\u00a027, 2025\nTABLE OF CONTENTS\nPage\nPart I\nItem 1.\nBusiness\n1\nItem 1A.\nRisk Factors\n5\nItem 1B.\nUnresolved Staff Comments\n17\nItem 1C.\nCybersecurity\n17\nItem 2.\nProperties\n17\nItem 3.\nLegal Proceedings\n18\nItem 4.\nMine Safety Disclosures\n18\nPart II\nItem 5.\nMarket for Registrant\u2019s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities\n19\nItem 6.\n[Reserved]\n20\nItem 7.\nManagement\u2019s Discussion and Analysis of Financial Condition and Results of Operations\n21\nItem 7A.\nQuantitative and Qualitative Disclosures About Market Risk\n27\nItem 8.\nFinancial Statements and Supplementary Data\n28\nItem 9.\nChanges in and Disagreements with Accountants on Accounting and Financial Disclosure\n52\nItem 9A.\nControls and Procedures\n52\nItem 9B.\nOther Information\n53\nItem 9C.\nDisclosure Regarding Foreign Jurisdictions that Prevent Inspections\n53\nPart III\nItem 10.\nDirectors, Executive Officers and Corporate Governance\n53\nItem 11.\nExecutive Compensation\n53\nItem 12\n.\nSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters\n53\nItem 13\n.\nCertain Relationships and Related Transactions, and Director Independence\n53\nItem 14.\nPrincipal Accountant Fees and Services\n53\nPart IV\nItem 15.\nExhibit and Financial Statement Schedules\n54\nItem 16.\nForm 10-K Summary\n57\nThis Annual Report on Form 10-K (\u201cForm 10-K\u201d) contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Many of the forward-looking statements are located in Part I, Item 1 of this Form 10-K under the heading \u201cBusiness\u201d and Part II, Item 7 of this Form 10-K under the heading \u201cManagement\u2019s Discussion and Analysis of Financial Condition and Results of Operations.\u201d Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. For example, statements in this Form 10-K regarding the potential future impact of macroeconomic conditions and tariffs and other measures on the Company\u2019s business and results of operations are forward-looking statements. Forward-looking statements can also be identified by words such as \u201cfuture,\u201d \u201canticipates,\u201d \u201cbelieves,\u201d \u201cestimates,\u201d \u201cexpects,\u201d \u201cintends,\u201d \u201cplans,\u201d \u201cpredicts,\u201d \u201cwill,\u201d \u201cwould,\u201d \u201ccould,\u201d \u201ccan,\u201d \u201cmay,\u201d and similar terms. Forward-looking statements are not guarantees of future performance and the Company\u2019s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of this Form 10-K under the heading \u201cRisk Factors.\u201d The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.\nUnless otherwise stated, all information presented herein is based on the Company\u2019s fiscal calendar, and references to particular years, quarters, months or periods refer to the Company\u2019s fiscal years ended in September and the associated quarters, months and periods of those fiscal years. Each of the terms the \u201cCompany\u201d and \u201cApple\u201d as used herein refers collectively to Apple Inc. and its wholly owned subsidiaries, unless otherwise stated.\nPART I\nItem 1.\u00a0\u00a0\u00a0\u00a0Business\nCompany Background\nThe Company designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. The Company\u2019s fiscal year is the 52- or 53-week period that ends on the last Saturday of September.\nProducts\niPhone\niPhone\n\u00ae\n is the Company\u2019s line of smartphones based on its iOS operating system. The iPhone line includes iPhone 17 Pro, iPhone Air\u2122, iPhone 17, iPhone 16 and iPhone 16e.\nMac\nMac\n\u00ae\n is the Company\u2019s line of personal computers based on its macOS\n\u00ae\n operating system. The Mac line includes laptops MacBook Air\n\u00ae\n and MacBook Pro\n\u00ae\n, as well as desktops iMac\n\u00ae\n, Mac mini\n\u00ae\n, Mac Studio\n\u00ae\n and Mac Pro\n\u00ae\n.\niPad\niPad\n\u00ae\n is the Company\u2019s line of multipurpose tablets based on its iPadOS\n\u00ae\n operating system. The iPad line includes iPad Pro\n\u00ae\n, iPad Air\n\u00ae\n, iPad and iPad mini\n\u00ae\n.\nWearables, Home and Accessories\nWearables includes smartwatches, wireless headphones and spatial computers. The Company\u2019s line of smartwatches, based on its watchOS\n\u00ae\n operating system, includes Apple Watch\n\u00ae\n Series 11, Apple Watch SE\n\u00ae\n 3 and Apple Watch Ultra\n\u00ae\n 3. The Company\u2019s line of wireless headphones includes AirPods\n\u00ae\n, AirPods Pro\n\u00ae\n, AirPods Max\n\u00ae\n and Beats\n\u00ae\n products. Apple Vision Pro\u2122 is the Company\u2019s spatial computer based on its visionOS\n\u00ae\n operating system.\nHome includes Apple TV 4K\n\u00ae\n, the Company\u2019s media streaming and gaming device based on its tvOS\n\u00ae\n operating system, and HomePod\n\u00ae\n and HomePod mini\n\u00ae\n, high-fidelity wireless smart speakers.\nAccessories includes Apple-branded and third-party accessories.\nApple Inc. | 2025 Form 10-K | 1\nServices\nAdvertising\nThe Company\u2019s advertising services include third-party licensing arrangements and the Company\u2019s own advertising platforms.\nAppleCare\nThe Company offers a portfolio of fee-based service and support products under the AppleCare\n\u00ae\n brand. The offerings provide priority access to Apple technical support, access to the global Apple authorized service network for repair and replacement services, and in many cases additional coverage for instances of accidental damage or theft and loss, depending on the country and type of product.\nCloud Services\nThe Company\u2019s cloud services store and keep customers\u2019 content up-to-date and available across multiple Apple devices and Windows personal computers.\nDigital Content\nThe Company operates various platforms, including the App Store\n\u00ae\n,\n that allow customers to discover and download applications and digital content, such as books, music, video, games and podcasts.\nThe Company also offers digital content through subscription-based services, including Apple Arcade\n\u00ae\n, a game service; Apple Fitness+\n\u00ae\n, a personalized fitness service; Apple Music\n\u00ae\n, which offers users a curated listening experience with on-demand radio stations; Apple News+\n\u00ae\n, a news and magazine service; and Apple TV\n\u00ae\n, which offers exclusive original content and live sports.\nPayment Services\nThe Company offers payment services, including Apple Card\n\u00ae\n, a co-branded credit card, and Apple Pay\n\u00ae\n, a cashless payment service.\nSegments\nThe Company manages its business primarily on a geographic basis. The Company\u2019s reportable segments consist of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific. Americas includes both North and South America. Europe includes European countries, as well as India, the Middle East and Africa. Greater China includes China mainland, Hong Kong and Taiwan. Rest of Asia Pacific includes Australia, New Zealand and those Asian countries not included in the Company\u2019s other reportable segments. Although the reportable segments provide similar hardware and software products and similar services, each one is managed separately to better align with the location of the Company\u2019s customers and distribution partners and the unique market dynamics of each geographic region.\nMarkets and Distribution\nThe Company\u2019s customers are primarily in the consumer, small and mid-sized business, education, enterprise and government markets. The Company sells its products and resells third-party products in most of its major markets directly to customers through its retail and online stores and its direct sales force. The Company sells its services in the same markets through its various service platforms. The Company also employs a variety of indirect distribution channels, such as third-party cellular network carriers and other resellers, for the sale of its products and certain of its services. During 2025, the Company\u2019s net sales through its direct and indirect distribution channels accounted for 40% and 60%, respectively, of total net sales.\nCompetition\nThe markets for the Company\u2019s products and services are highly competitive and are characterized by aggressive price competition, downward pressure on gross margins, continual improvement in product performance, and price sensitivity on the part of consumers and businesses. The markets in which the Company competes are further defined by frequent introduction of new products and services, short product life cycles, evolving industry standards, and rapid adoption of technological advancements by competitors. Many of the Company\u2019s competitors seek to compete primarily through aggressive pricing and very low cost structures, and by imitating the Company\u2019s products and infringing on its intellectual property.\nApple Inc. | 2025 Form 10-K | 2\nThe Company\u2019s ability to compete successfully depends heavily on ensuring the continuing and timely introduction of innovative new products, services and technologies to the marketplace. The Company designs and develops nearly the entire solution for its products, including the hardware, operating system, numerous software applications and related services. Principal competitive factors important to the Company include price, product and service features (including security features), relative price and performance, product and service quality and reliability, design and technology innovation, a strong third-party software and accessories ecosystem, marketing and distribution capability, service and support, corporate reputation, and the ability to effectively protect and enforce the Company\u2019s intellectual property rights.\nThe Company is focused on expanding its market opportunities related to smartphones, personal computers, tablets, wearables and accessories, and services. The Company\u2019s products and services face substantial competition from companies that have significant technical, marketing, distribution and other resources, as well as established hardware, software, and service offerings with large customer bases. In addition, the Company faces significant competition as competitors imitate the Company\u2019s product features and applications within their products to offer more competitive solutions. The Company also expects competition to intensify as competitors imitate the Company\u2019s approach to providing components seamlessly within their offerings or work collaboratively to offer integrated solutions. Some of the Company\u2019s competitors have broad product lines, low-priced products, large installed bases of active devices, and large customer bases. Competition has been particularly intense as competitors have aggressively cut prices and lowered product margins. Certain competitors have the resources, experience or cost structures to provide products and services at little or no profit or even at a loss. The Company has a minority market share in the global smartphone, personal computer, tablet and wearables markets, and some of the markets in which the Company competes have from time to time experienced little to no growth or contracted overall.\nSupply of Components\nAlthough most components essential to the Company\u2019s business are generally available from multiple sources, certain components are currently obtained from single or limited sources. The Company also competes for various components with other participants in the markets for smartphones, personal computers, tablets, wearables and accessories. Therefore, many components used by the Company, including those that are available from multiple sources, are at times subject to industry-wide shortage and significant commodity pricing fluctuations. Restrictions on international trade can increase the cost or limit the availability of the Company\u2019s products and the components and rare earths and other raw materials that go into them.\nThe Company uses some custom components that are not commonly used by its competitors, and new products introduced by the Company often utilize custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the suppliers\u2019 yields have matured or their manufacturing capacities have increased. The Company has entered into agreements for the supply of many components; however, the Company may not be able to extend or renew agreements for the supply of components on similar terms, or at all, and may not be successful in obtaining sufficient quantities from its suppliers or in a timely manner, or in identifying and obtaining sufficient quantities from an alternative source. In addition, component suppliers may fail, be subject to consolidation within a particular industry, or decide to concentrate on the production of common components instead of components customized to meet the Company\u2019s requirements, further limiting the Company\u2019s ability to obtain sufficient quantities of components on commercially reasonable terms, or at all.\nResearch and Development\nBecause the industries in which the Company competes are characterized by rapid technological advances, the Company\u2019s ability to compete successfully depends heavily upon its ability to ensure a continual and timely flow of competitive products, services and technologies to the marketplace. The Company continues to develop new technologies to enhance existing products and services, and to expand the range of its offerings through research and development (\u201cR&D\u201d), licensing of intellectual property and acquisition of third-party businesses and technology.\nIntellectual Property\nThe Company currently holds a broad collection of intellectual property rights relating to certain aspects of its hardware, software and services. This includes patents, designs, copyrights, trademarks, trade secrets and other forms of intellectual property rights in the U.S. and various foreign countries. Although the Company believes the ownership of such intellectual property rights is an important factor in differentiating its business and that its success does depend in part on such ownership, the Company relies primarily on the innovative skills, technical competence and marketing abilities of its personnel.\nThe Company regularly files patent, design, copyright and trademark applications to protect innovations arising from its hardware, software and service research, development, design and marketing, and is currently pursuing thousands of applications around the world. Over time, the Company has accumulated a large portfolio of issued and registered intellectual property rights around the world. No single intellectual property right is solely responsible for protecting the Company\u2019s products and services. The Company believes the duration of its intellectual property rights is adequate relative to the expected lives of its products and services.\nApple Inc. | 2025 Form 10-K | 3\nIn addition to Company-owned intellectual property, many of the Company\u2019s products and services include technology or intellectual property that must be licensed from third parties. It may be necessary in the future to seek or renew licenses relating to various aspects of the Company\u2019s products, processes and services. While the Company has generally been able to obtain such licenses on commercially reasonable terms in the past, there is no guarantee that such licenses could be obtained in the future on reasonable terms or at all.\nBusiness Seasonality and Product Introductions\nThe Company has historically experienced higher net sales in its first quarter compared to other quarters in its fiscal year due in part to seasonal holiday demand. Additionally, new product and service introductions can significantly impact net sales, cost of sales and operating expenses. The timing of product introductions can also impact the Company\u2019s net sales to its indirect distribution channels as these channels are filled with new inventory following a product launch, and channel inventory of an older product often declines as the launch of a newer product approaches. Net sales can also be affected when consumers and distributors anticipate a product introduction.\nHuman Capital\nThe Company believes that its people play an important role in its success, and strives to attract, develop and retain the best talent. The Company works to create a culture of collaboration, one where people with a broad range of backgrounds and perspectives can come together to innovate and do the best work of their lives. The Company is an equal opportunity employer committed to inclusion and to providing a workplace free of harassment or discrimination. As of September\u00a027, 2025, the Company had approximately 166,000 full-time equivalent employees.\nThe Company believes that compensation should be competitive and equitable, and offers discretionary cash and equity awards to enable employees to share in the Company\u2019s success. The Company recognizes its people are most likely to thrive when they have the resources to meet their needs and the time and support to succeed in their professional and personal lives. In support of this, the Company offers a wide variety of benefits for employees around the world, including health, wellness and time away.\nThe Company invests in resources to help its people develop and achieve their career goals. The Company offers programs through Apple University on leadership, management and influence, as well as Apple culture and values. Team members can also take advantage of online classes for business, technical and personal development.\nThe Company believes that open and honest communication among team members, managers and leaders helps create an open, collaborative work environment where everyone can contribute, grow and succeed. Team members are encouraged to come to their managers with questions, feedback or concerns, and the Company conducts surveys that gauge employee sentiment in areas like career development, manager performance and inclusion.\nThe Company is committed to the safety and security of its team members everywhere it operates. The Company supports employees with general safety, security and crisis management training, and by putting specific programs in place for those working in potentially high-hazard environments.\nAvailable Information\nThe Company\u2019s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (\u201cExchange Act\u201d), are filed with the U.S. Securities and Exchange Commission (\u201cSEC\u201d). Such reports and other information filed by the Company with the SEC are available free of charge at investor.apple.com/investor-relations/sec-filings/default.aspx when such reports are available on the SEC\u2019s website. The Company periodically provides certain information for investors on its corporate website, www.apple.com, and its investor relations website, investor.apple.com. This includes press releases and other information about financial performance, information on corporate governance, and details related to the Company\u2019s annual meeting of shareholders. The information contained on the websites referenced in this Form 10-K is not incorporated by reference into this filing. Further, the Company\u2019s references to website URLs are intended to be inactive textual references only.\nApple Inc. | 2025 Form 10-K | 4\nItem 1A.\u00a0\u00a0\u00a0\u00a0Risk Factors\nThe following summarizes factors that could have a material adverse effect on the Company\u2019s business, reputation, results of operations, financial condition and stock price. The Company may not be able to accurately predict, control or mitigate these risks. Statements in this section are based on the Company\u2019s beliefs and opinions regarding matters that could materially adversely affect the Company in the future and are not representations as to whether such matters have or have not occurred previously. The risks and uncertainties described below are not exhaustive and should not be considered a complete statement of all potential risks or uncertainties that the Company faces or may face in the future.\nThis section should be read in conjunction with Part II, Item 7, \u201cManagement\u2019s Discussion and Analysis of Financial Condition and Results of Operations\u201d and the consolidated financial statements and accompanying notes in Part II, Item 8, \u201cFinancial Statements and Supplementary Data\u201d of this Form 10-K.\nMacroeconomic and Industry Risks\nThe Company\u2019s operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially adversely affect the Company\u2019s business, results of operations, financial condition and stock price.\nThe Company has international operations with sales outside the U.S. representing a majority of the Company\u2019s total net sales. In addition, the Company\u2019s global supply chain is large and complex and a majority of the Company\u2019s supplier facilities, including manufacturing and assembly sites, are located outside the U.S. As a result, the Company\u2019s operations and performance depend significantly on global and regional economic conditions.\nAdverse macroeconomic conditions, including slow growth or recession, high unemployment, inflation, tighter credit, higher interest rates, and currency fluctuations, can adversely impact consumer confidence and spending and materially adversely affect demand for the Company\u2019s products and services. In addition, consumer confidence and spending can be materially adversely affected in response to changes in fiscal and monetary policy, financial market volatility, declines in income or asset values, and other economic factors.\nUncertainty about, or a decline in, global or regional economic conditions can also have a significant impact on the Company\u2019s suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners, and developers. Potential outcomes include financial instability; inability to obtain credit to finance business operations; and insolvency.\nAdverse economic conditions can also lead to increased credit and collectibility risk on the Company\u2019s trade receivables; the failure of derivative counterparties and other financial institutions; limitations on the Company\u2019s ability to issue new debt; reduced liquidity; and declines in the fair values of the Company\u2019s financial instruments. These and other impacts can materially adversely affect the Company\u2019s business, results of operations, financial condition and stock price.\nApple Inc. | 2025 Form 10-K | 5\nThe Company\u2019s business can be impacted by political events, trade and other international disputes, geopolitical tensions, conflict, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions.\nPolitical events, trade and other international disputes, geopolitical tensions, conflict, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions can have a material adverse effect on the Company and its customers, employees, suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners.\nThe Company has a large, global business with sales outside the U.S. representing a majority of the Company\u2019s total net sales, and the Company believes that it generally benefits from growth in international trade. A significant majority of the Company\u2019s manufacturing is performed in whole or in part by outsourcing partners located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam, in addition to sourcing from partners and facilities located in the U.S. Restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely affect the Company\u2019s business and supply chain. The impact can be particularly significant if these restrictive measures apply to countries and regions where the Company derives a significant portion of its revenues and/or has significant supply chain operations. Restrictive measures can increase the cost or limit the availability of the Company\u2019s products and the components and rare earths and other raw materials that go into them. Restrictive measures can also require the Company to change suppliers, restructure business relationships and operations, refrain from offering and distributing or cease to offer and distribute affected products, services and third-party applications to its customers, and increase the prices of its products and services. Changing the Company\u2019s business and supply chain in accordance with new or changed restrictions on international trade can be expensive, time-consuming and disruptive to the Company\u2019s business and results of operations. Trade and other international disputes can also have an adverse impact on the overall macroeconomic environment and result in shifts and reductions in consumer spending and negative consumer sentiment for the Company\u2019s products and services, all of which can further adversely affect the Company\u2019s business and results of operations. Such restrictions can be announced with little or no advance notice, which can create uncertainty, and the Company may not be able to effectively mitigate any or all adverse impacts from such measures. Global supply chains can be highly concentrated, and an escalation of geopolitical tensions or conflict could result in significant disruptions. Beginning in the second quarter of 2025, new tariffs were announced on imports to the U.S. (\u201cU.S. Tariffs\u201d), including additional tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and the European Union (\u201cEU\u201d), among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications to the U.S. Tariffs have been announced and further changes could be made in the future, which may include additional sector-based tariffs or other measures. For example, the U.S. Department of Commerce has initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into, among other things, imports of semiconductors, semiconductor manufacturing equipment, and their derivative products, including downstream products that contain semiconductors. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. Tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. If disputes and conflicts further escalate, actions by governments in response could be significantly more severe and restrictive.\nMany of the Company\u2019s operations, retail stores and facilities, as well as critical business operations of the Company\u2019s suppliers and contract manufacturers, are in locations that are prone to earthquakes and other natural disasters. Global climate change is resulting in certain types of natural disasters and extreme weather occurring more frequently or with more intense effects. In addition, the Company\u2019s and its suppliers\u2019 operations, retail stores and facilities are subject to the risk of interruption by fire, power shortages, nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, ransomware and other cybersecurity attacks, labor disputes, public health issues and other events beyond the Company\u2019s control.\nSuch events can make it difficult or impossible for the Company to manufacture and deliver products to its customers, create delays and inefficiencies in the Company\u2019s supply and manufacturing chain, result in slowdowns and outages to the Company\u2019s service offerings, increase the Company\u2019s costs, and negatively impact consumer spending and demand in affected areas.\nThe Company\u2019s operations are also subject to the risks of industrial accidents at its suppliers and contract manufacturers. While the Company\u2019s suppliers are required to maintain safe working environments and operations, an industrial accident could occur and could result in serious injuries or loss of life, disruption to the Company\u2019s business, and harm to the Company\u2019s reputation. Major public health issues, including pandemics such as the COVID-19 pandemic, have adversely affected, and could in the future materially adversely affect, the Company due to their impact on the global economy and demand for consumer products; the imposition of protective public safety measures, such as stringent employee travel restrictions and limitations on freight services and the movement of products between regions; and disruptions in the Company\u2019s operations, supply chain and sales and distribution channels, resulting in interruptions to the supply of current products and offering of existing services, and delays in production ramps of new products and development of new services.\nApple Inc. | 2025 Form 10-K | 6\nFollowing any interruption to its business, the Company can require substantial recovery time, incur significant expenditures to resume operations, and lose significant sales. Because the Company relies on single or limited sources for the supply and manufacture of many critical components, a business interruption affecting such sources would exacerbate any negative consequences to the Company. While the Company maintains insurance coverage for certain types of losses, such insurance coverage may be insufficient to cover all losses that may arise. Any of the foregoing can materially adversely affect the Company\u2019s business, results of operations, financial condition and stock price.\nGlobal markets for the Company\u2019s products and services are highly competitive and subject to rapid technological change, and the Company may be unable to compete effectively in these markets.\nThe Company\u2019s products and services are offered in highly competitive global markets. These markets are characterized by aggressive price competition, downward pressure on gross margins, continual improvement in product performance, and price sensitivity on the part of consumers and businesses. These markets are further defined by frequent introduction of new products and services, short product life cycles, evolving industry standards, and rapid adoption of technological advancements.\nThe Company\u2019s ability to compete successfully depends heavily on ensuring the continuing and timely introduction of innovative new products, services and technologies to the marketplace. The Company designs and develops nearly the entire solution for its products, including the hardware, operating system, numerous software applications and related services. As a result, the Company must make significant investments in R&D. These investments may not achieve expected returns, and the Company may not be able to develop and market new products and services successfully.\nThe Company\u2019s ability to compete successfully also depends on the effective protection and enforcement of its intellectual property rights. Regulatory requirements, government investigations and litigation can force the Company to withdraw from, or modify its products and services for, certain countries and limit its ability to derive value from, or to enjoin others from using, its intellectual property rights. Additionally, they may require the Company to share its innovations with competitors. Any of these outcomes can have a negative impact on the Company\u2019s competitive advantage and materially adversely affect its business, results of operations, financial condition and stock price.\nThe Company currently holds a significant number of patents, trademarks and copyrights and has registered, and applied to register, additional patents, trademarks and copyrights. In contrast, many of the Company\u2019s competitors seek to compete primarily through aggressive pricing and very low cost structures, and by imitating the Company\u2019s products and infringing on its\u00a0intellectual property. Effective intellectual property protection is not consistently available in every country in which the Company operates. If the Company is unable to continue to develop and sell innovative new products with attractive margins or if competitors infringe on the Company\u2019s intellectual property, the Company\u2019s ability to maintain a competitive advantage could be materially adversely affected.\nThe Company\u2019s products and services face substantial competition from companies that have significant technical, marketing, distribution and other resources, as well as established hardware, software and service offerings. In addition, the Company faces significant competition as competitors imitate the Company\u2019s product features and applications within their products to offer more competitive solutions. The Company also expects competition to intensify as competitors imitate the Company\u2019s approach to providing components seamlessly within their offerings or work collaboratively to offer integrated solutions. Some of the Company\u2019s competitors have broad product lines, low-priced products, large installed bases of active devices, and large customer bases. Competition has been particularly intense as competitors have aggressively cut prices and lowered product margins. Certain competitors have the resources, experience or cost structures to provide products and services at little or no profit or even at a loss. The Company has a minority market share in the global smartphone, personal computer, tablet and wearables markets, and some of the markets in which the Company competes have from time to time experienced little to no growth or contracted overall.\nIf the Company is unable to compete successfully, its business, reputation, results of operations, financial condition and stock price can be materially adversely affected.\nApple Inc. | 2025 Form 10-K | 7\nBusiness Risks\nTo remain competitive and stimulate customer demand, the Company must successfully manage frequent introductions and transitions of products and services.\nDue to the highly volatile and competitive nature of the markets and industries in which the Company competes, the Company must continually introduce new products, services and technologies, enhance existing products and services, effectively stimulate customer demand for new and upgraded products and services, navigate global regulatory requirements and barriers to market access, and successfully manage the transition to these new and upgraded products and services. The success of new product and service introductions depends on a number of factors, including the Company\u2019s ability to recruit and retain highly skilled personnel to execute on its strategic initiatives, and the timely and successful development and market acceptance of new products, services and technologies. Success also relies on the Company\u2019s ability to manage the risks associated with new technologies and production ramp-up issues, the effective integration of third-party services and technologies into the Company\u2019s products and services, the availability, delivery and performance of application software or other third-party support for the Company\u2019s products and services, the effective management of manufacturing and other purchase commitments and the management of inventory levels in line with anticipated product demand, and the availability of products in appropriate quantities and at expected costs to meet anticipated demand. Additionally, quality issues or other defects or deficiencies can adversely affect the success of new product and service introductions and market acceptance. New products, services and technologies may replace or supersede existing offerings and may produce lower revenues and lower profit margins. The Company may not be able to successfully manage future introductions and transitions of products and services, which can materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nThe Company depends on component and product manufacturing and logistical services provided by outsourcing partners, many of which are located outside of the U.S.\nA significant majority of the Company\u2019s manufacturing is performed in whole or in part by outsourcing partners located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam, in addition to sourcing from partners and facilities located in the U.S. The Company relies on single-source partners in the U.S., Asia and Europe to supply and manufacture many components, and on partners primarily located in Asia, for final assembly of substantially all of the Company\u2019s hardware products. The Company has also outsourced much of its transportation and logistics management. While these arrangements can lower operating costs, they also reduce the Company\u2019s direct control over production and distribution. Such diminished control has from time to time had, and may in the future have, an adverse effect on the cost, quality or quantity of products manufactured or services provided, or adversely affect the Company\u2019s flexibility to respond to changing conditions. Although arrangements with these partners may contain provisions for product defect expense reimbursement, the Company generally remains responsible to the consumer for warranty and out-of-warranty service in the event of product defects and experiences unanticipated product defect liabilities from time to time. While the Company relies on its partners to adhere to its supplier code of conduct, violations of the supplier code of conduct occur from time to time and can materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nChanges or additions to the Company\u2019s supply chain require considerable time and resources and involve significant risks and uncertainties, including exposure to additional regulatory and operational risks.\nFuture operating results depend upon the Company\u2019s ability to obtain components in sufficient quantities on commercially reasonable terms.\nBecause the Company currently obtains certain components from single or limited sources, the Company is subject to significant supply and pricing risks. Many components, including those that are available from multiple sources, are at times subject to industry-wide shortages and significant commodity pricing fluctuations that can materially adversely affect the Company\u2019s business, results of operations, financial condition and stock price. For example, the global semiconductor industry has in the past experienced high demand and shortages of supply, which adversely affected the Company\u2019s ability to obtain sufficient quantities of components and products on commercially reasonable terms, or at all. Such disruptions could occur in the future.\nAdditionally, the Company\u2019s new products often utilize custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the suppliers\u2019 yields have matured or their manufacturing capacities have increased. The Company may not be able to extend or renew agreements for the supply of components on similar terms, or at all, and may not be successful in obtaining sufficient quantities from its suppliers in a timely manner, or in identifying and obtaining sufficient quantities from an alternative source. In addition, component suppliers may fail, be subject to consolidation within a particular industry, or decide to concentrate on the production of common components instead of components customized to meet the Company\u2019s requirements, further limiting the Company\u2019s ability to obtain sufficient quantities of components on commercially reasonable terms, or at all.\n\nTherefore, the Company remains subject to significant risks of supply shortages and price increases that can materially adversely affect its business, results of operations, financial condition and stock price.\nApple Inc. | 2025 Form 10-K | 8\nThe Company\u2019s products and services may be affected from time to time by design and manufacturing defects that could materially adversely affect the Company\u2019s business and result in harm to the Company\u2019s reputation.\nThe Company offers complex hardware and software products and services that can be affected by design and manufacturing defects. Sophisticated operating system software and applications, such as those offered by the Company, often have issues that can unexpectedly interfere with the intended operation of hardware or software products and services. Defects can also exist in components and products the Company purchases from third parties. Component defects could make the Company\u2019s products unsafe and create a risk of environmental or property damage and personal injury. These risks may increase as the Company\u2019s products are introduced into specialized applications, including health. In addition, the Company\u2019s service offerings can have quality issues and from time to time experience outages, service slowdowns or errors. As a result, from time to time the Company\u2019s services have not performed as anticipated and may not meet customer expectations. The introduction of new and complex technologies, such as artificial intelligence features, can increase these and other safety risks, including exposing users to harmful, inaccurate or other negative content and experiences. The Company may not be able to detect and fix all issues and defects in the hardware, software and services it offers, which can result in widespread technical and performance issues affecting the Company\u2019s products and services. Errors, bugs and vulnerabilities can be exploited by third parties, compromising the safety and security of a user\u2019s device. In addition, the Company can be exposed to product liability claims, recalls, product replacements or modifications, write-offs of inventory, property, plant and equipment or intangible assets, and significant warranty and other expenses, including litigation costs and regulatory fines. Quality problems can adversely affect the experience for users of the Company\u2019s products and services, and result in harm to the Company\u2019s reputation, loss of competitive advantage, poor market acceptance, reduced demand for products and services, delay in new product and service introductions and lost sales.\nThe Company is exposed to the risk of write-downs on the value of its inventory and other assets, in addition to purchase commitment cancellation risk.\nThe Company records a write-down for product and component inventories if cost exceeds net realizable value. The Company reviews other assets, including capital assets held at its suppliers\u2019 facilities, inventory prepayments and other long-lived assets, for impairment whenever events or circumstances indicate the assets may not be recoverable. Although the Company believes its inventory, capital assets, inventory prepayments and other assets are currently recoverable, the Company may incur write-downs, impairments and other charges given the rapid and unpredictable pace of product obsolescence in the industries in which the Company competes.\nThe Company orders components for its products and builds inventory in advance of product announcements and shipments. Manufacturing purchase obligations cover the Company\u2019s forecasted component and manufacturing requirements, typically for periods up to 150 days. Because the Company\u2019s markets are volatile, competitive and subject to rapid technology and price changes, there is a risk the Company will forecast incorrectly and order or produce excess or insufficient amounts of components or products, or not fully utilize purchase commitments. The Company accrues necessary cancellation fee reserves for orders of excess products and components.\nThe Company relies on access to third-party intellectual property, which may not be available to the Company on commercially reasonable terms, or at all.\nThe Company\u2019s products and services include technology or intellectual property that must be licensed from third parties. In addition, because of technological changes in the industries in which the Company currently competes or in the future may compete, current extensive intellectual property coverage and the rapid rate of new intellectual property rights generation, the Company\u2019s products and services may be alleged to infringe existing intellectual property rights of others. This risk may be exacerbated by the use of new and emerging technologies, including machine learning and artificial intelligence, which can involve, among other things, the acquisition and use of copyrighted materials for training as well as the potential reproduction of copyrighted materials in their outputs\n.\nFrom time to time, the Company has been notified that it may be infringing certain intellectual property rights of third parties. The Company is not always able to obtain all necessary licenses to third-party intellectual property rights on commercially reasonable terms or at all. Failure to obtain the right to use third-party intellectual property, or to use such intellectual property on commercially reasonable terms, can require the Company to modify certain products, services or features or preclude the Company from selling certain products or services and expose the Company to significant licensing costs, all of which can materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nApple Inc. | 2025 Form 10-K | 9\nThe Company\u2019s future performance depends in part on support from third-party software developers.\nThe Company believes decisions by customers to purchase its hardware products depend in part on the availability of third-party software applications and services. Third-party developers may discontinue the development and maintenance of software applications and services for the Company\u2019s products. If third-party software applications and services cease to be developed and maintained for the Company\u2019s products, customers may choose not to buy the Company\u2019s products, adversely impacting the Company\u2019s business, results of operations, financial condition and stock price.\nThe Company believes that third-party developer support depends on the perceived benefits of creating software and services for the Company\u2019s products compared to competitors\u2019 platforms, such as Android for smartphones and tablets, Windows for personal computers and tablets, and PlayStation, Nintendo and Xbox for gaming platforms. This analysis may be based on factors such as the market position of the Company and its products, the anticipated revenue that may be generated, expected future growth of product sales, and the costs of developing such applications and services.\nThe Company\u2019s minority market share in the global smartphone, personal computer, tablet and wearables markets can make developers less inclined to develop or upgrade software for the Company\u2019s products and more inclined to devote their resources to developing and upgrading software for competitors\u2019 products with larger market share. When developers focus their efforts on these competing platforms, the availability and quality of applications for the Company\u2019s devices can suffer.\nThe Company relies on the continued availability and development of compelling and innovative software applications for its products. The Company\u2019s products and operating systems are subject to rapid technological change, and when third-party developers are unable to or choose not to keep up with this pace of change, their applications can fail to take advantage of these changes to deliver improved customer experiences, can operate incorrectly, and can result in dissatisfied customers and lower customer demand for the Company\u2019s products.\nFailure to obtain or create digital content that appeals to the Company\u2019s customers, or to make such content available on commercially reasonable terms, could have a material adverse impact on the Company\u2019s business, results of operations and financial condition.\nThe Company contracts with numerous third parties to offer their digital content to customers. This includes the right to sell, or offer subscriptions to, third-party content, as well as the right to incorporate specific content into the Company\u2019s own services. The licensing or other distribution arrangements for this content can be for relatively short time periods and do not guarantee the continuation or renewal of these arrangements on commercially reasonable terms, or at all. Some third-party content providers and distributors currently or in the future may offer competing products and services, and can take actions to make it difficult or impossible for the Company to license or otherwise distribute their content. Other content owners, providers or distributors may seek to limit the Company\u2019s access to, or increase the cost of, such content. The Company may be unable to continue to offer a wide variety of content at commercially reasonable prices with acceptable usage rules.\nThe Company also produces its own digital content, which can be costly to produce due to intense and increasing competition for talent, content and subscribers, and may fail to appeal to the Company\u2019s customers.\nThe Company\u2019s success depends largely on the talents and efforts of its team members, the continued service and availability of highly skilled employees, including key personnel, and the Company\u2019s ability to nurture its distinctive and inclusive culture.\nMuch of the Company\u2019s future success depends on the talents and efforts of its team members and the continued availability and service of key personnel, including its Chief Executive Officer, executive team and other highly skilled employees. Experienced personnel in the technology industry are in high demand and competition for their talents is intense, especially in Silicon Valley, where most of the Company\u2019s key personnel are located. Periods of intense competition for talent in particular fields can lead to increased costs as the Company seeks to offer competitive compensation to recruit and retain highly skilled employees. In addition to competition for talent, workforce dynamics are constantly evolving and the Company must navigate changes effectively in order to achieve its strategic initiatives. Laws and regulations, including immigration, labor and employment laws and export controls, among others, can materially adversely affect the Company\u2019s ability to recruit and retain a highly skilled, global workforce. If the Company does not effectively manage changing workforce dynamics and regulatory requirements, it could materially adversely affect the Company\u2019s culture, operational flexibility, strategy and costs, all of which can materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nThe Company believes that its distinctive and inclusive culture is a significant driver of its success. If the Company is unable to nurture its culture, it could materially adversely affect the Company\u2019s ability to recruit and retain the highly skilled employees who are critical to its success, and could otherwise materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nApple Inc. | 2025 Form 10-K | 10\nThe Company depends on the performance of carriers and other resellers.\nThe Company distributes its products and certain of its services through cellular network carriers and other resellers, many of which distribute products and services from competitors. Resellers offer financing, installment payment plans or subsidies for users\u2019 purchases of devices, and such plans may be discontinued or modified any time.\nThe Company has invested and will continue to invest in programs to enhance reseller sales, including staffing selected resellers\u2019 stores with Company employees and contractors, improving product placement displays, and developing and making digital marketing assets available to resellers. These programs can require a substantial investment while not assuring return or incremental sales. For example, the purchasing preferences and behaviors of consumers may change, the financial condition of resellers could weaken, resellers could stop distributing the Company\u2019s products, or uncertainty regarding demand for some or all of the Company\u2019s products could cause resellers to reduce their ordering and marketing of the Company\u2019s products, all of which could materially adversely impact the Company\u2019s business, results of operations, financial condition and stock price.\nThe Company\u2019s business and reputation are impacted by information technology system failures and network disruptions.\nThe Company and its global supply chain are dependent on complex information technology systems and are exposed to information technology system failures or network disruptions caused by natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic break-ins, ransomware or other cybersecurity incidents, or other events or disruptions. System upgrades, redundancy and other continuity measures may be ineffective or inadequate, and the Company\u2019s or its vendors\u2019 business continuity and disaster recovery planning may not be sufficient for all eventualities. Such failures or disruptions can adversely impact the Company\u2019s business by, among other things, preventing access to the Company\u2019s online services, interfering with customer transactions or impeding the manufacturing and shipping of the Company\u2019s products. These events could materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nLosses or unauthorized access to or releases of confidential information, including personal information, could subject the Company to significant reputational, financial, legal and operational consequences.\nThe Company\u2019s business requires it to use and store confidential information, including personal and sensitive health and financial information with respect to the Company\u2019s customers and employees. The Company devotes significant resources to systems and data security, including through the use of encryption and other security measures intended to protect its systems and data. But these measures cannot provide absolute security, and losses or unauthorized access to or releases of confidential information occur and could materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nThe Company\u2019s business also requires it to share confidential information with suppliers and other third parties. The Company relies on global suppliers that are also exposed to ransomware and other malicious attacks that can disrupt business operations. Although the Company takes steps to secure confidential information that is provided to or accessible by third parties working on the Company\u2019s behalf, such measures are not always effective and losses or unauthorized access to, or releases of, confidential information occur. Such incidents and other malicious attacks could materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nThe Company experiences malicious attacks and other attempts to gain unauthorized access to its systems on a regular basis. These attacks target the confidentiality, integrity or availability of confidential information and may disrupt normal business operations. Attacks can impair the Company\u2019s ability to attract and retain customers for its products and services, affect its stock price, damage commercial relationships, and expose the Company to litigation or government investigations, potentially resulting in penalties, fines or judgments. Globally, attacks are expected to continue accelerating in both frequency and sophistication with increasing use by actors of tools and techniques that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence, all of which hinders the Company\u2019s ability to identify, investigate and recover from incidents. In addition, attacks against the Company and its customers can escalate during periods of geopolitical tensions or conflict.\nAlthough malicious attacks perpetrated to gain access to confidential information, including personal information, affect many companies across various industries, the Company is at a relatively greater risk of being targeted because of its high profile and the value of the confidential information it creates, owns, manages, stores and processes.\nApple Inc. | 2025 Form 10-K | 11\nAs with all companies, the security the Company has implemented may not be sufficient for all eventualities and are vulnerable to hacking, ransomware attacks, employee error, malfeasance, system error, faulty password management or other irregularities. For example, third parties can fraudulently induce the Company\u2019s or its suppliers\u2019 and other third parties\u2019 employees or customers into disclosing usernames, passwords or other sensitive information, which can, in turn, be used for unauthorized access to the Company\u2019s or such suppliers\u2019 or third parties\u2019 systems and services. To help protect customers and the Company, the Company deploys and makes available technologies like multifactor authentication, monitors its services and systems for unusual activity and may freeze accounts under suspicious circumstances, which, among other things, can result in the delay or loss of customer orders or impede customer access to the Company\u2019s products and services.\nWhile the Company maintains insurance coverage that is intended to address certain aspects of data security risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.\nInvestment in new business strategies, commercial relationships and acquisitions could disrupt the Company\u2019s ongoing business, present risks not originally contemplated, and materially adversely affect the Company\u2019s business, reputation, results of operations and financial condition.\nThe Company has invested, and in the future may invest, in new business strategies, commercial relationships and acquisitions. Such endeavors may involve significant risks and uncertainties, including distraction of management from current operations, greater-than-expected liabilities and expenses, economic, political, legal and regulatory challenges associated with operating in new businesses, regions or countries, inadequate return on capital, potential impairment of tangible and intangible assets, and significant write-offs. Some transactions, including investments and acquisitions, are exposed to additional risks, including failing to obtain required regulatory approvals on a timely basis or at all, a counterparty\u2019s failure to perform or deliver as anticipated, or the imposition of onerous conditions that could delay or prevent the Company from completing a transaction or otherwise limit the Company\u2019s ability to fully realize the anticipated benefits of a transaction. New business strategies and ventures are inherently risky and may not be successful. The Company\u2019s business strategies and investments may not be successful, which could materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nLegal and Regulatory Compliance Risks\nThe Company\u2019s business, results of operations and financial condition could be adversely impacted by unfavorable results of legal proceedings or government investigations.\nThe Company is subject to various claims, legal proceedings and government investigations that have arisen in the ordinary course of business and have not yet been fully resolved, and new matters may arise in the future. In addition, the Company enters into agreements that include indemnification provisions that can subject the Company to costs and damages in the event of a claim against an indemnified third party. The number of claims, legal proceedings and government investigations involving the Company, and the alleged magnitude of such claims, proceedings and government investigations, has generally increased over time and may continue to increase.\nThe Company has faced and continues to face a significant number of patent claims relating to its standards-enabled products, and new claims may arise in the future, including as a result of new legal or regulatory frameworks. For example, technology, data and other intellectual property asset\u2013holding companies frequently assert their intellectual property rights and seek royalties and often enter into litigation based on allegations of infringement or other violations of intellectual property rights. These risks, and the risks of novel claims being attempted, may be exacerbated as new and emerging technologies, including machine learning and artificial intelligence, are further integrated into the Company\u2019s products and services. The Company is vigorously defending infringement actions in courts in several U.S. jurisdictions, as well as internationally in various countries. The plaintiffs in these actions frequently seek broad injunctive relief and substantial damages.\nRegardless of the merit of particular claims, defending against litigation or responding to government investigations can be expensive, time-consuming and disruptive to the Company\u2019s operations. In recognition of these considerations, the Company may enter into agreements or other arrangements to settle litigation and resolve such challenges. However, such agreements may not always be available on acceptable terms, and litigation may still arise. Such agreements can also significantly reduce the Company\u2019s revenue and increase the Company\u2019s cost of sales and operating expenses, materially adversely affecting the Company\u2019s business, results of operations, financial condition and stock price. Additionally, such agreements may require the Company to change its business practices and limit the Company\u2019s ability to offer certain products and services.\nApple Inc. | 2025 Form 10-K | 12\nThe outcome of litigation or government investigations is inherently uncertain. If one or more legal matters were resolved against the Company or an indemnified third party in a reporting period for amounts above management\u2019s expectations, the Company\u2019s results of operations, financial condition and stock price for that reporting period could be materially adversely affected. Further, such an outcome can result in significant monetary damages, disgorgement of revenue or profits, remedial corporate measures or injunctive relief against the Company. Adverse resolution of legal matters has from time to time required, and can in the future require, the Company to change its business practices. It can also limit the Company\u2019s ability to enjoin others from using, or to derive value from, its intellectual property rights, and to develop, manufacture, use, import or offer for sale certain products and services, all of which could materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nWhile the Company maintains insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.\nThe Company is subject to complex and changing laws and regulations worldwide, which exposes the Company to potential liabilities, increased costs and other adverse effects on the Company\u2019s business.\nThe Company\u2019s global operations are subject to complex and changing laws and regulations worldwide on subjects including antitrust; privacy, data security and data localization; online safety; age verification; consumer protection; advertising, sales, billing and e-commerce; financial services and technology; product liability; intellectual property ownership and infringement; digital platforms; machine learning and artificial intelligence; internet, telecommunications and mobile communications; media, television, film and digital content; availability of third-party software applications and services; labor and employment; anticorruption; import, export and trade; foreign exchange controls and cash repatriation restrictions; anti\u2013money laundering; foreign ownership and investment; national security; tax; and environmental, health and safety, including electronic waste, recycling, product design and climate change.\nCompliance with these laws and regulations is onerous and expensive. New and changing laws, regulations, executive orders, directives, and enforcement priorities can adversely affect the Company\u2019s business by increasing the Company\u2019s costs, limiting the Company\u2019s ability to offer a product, service or feature to customers, imposing changes to the design of the Company\u2019s products and services, impacting customer demand for the Company\u2019s products and services, and requiring changes to the Company\u2019s business or supply chain. New and changing laws, regulations, executive orders, directives, and enforcement priorities can also create uncertainty about how such laws and regulations will be interpreted and applied. If the Company is found to have violated such laws and regulations, it could materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nRisks and costs related to new and changing laws, regulations, executive orders, directives, and enforcement priorities increase as the Company\u2019s products and services are introduced into specialized applications, including health and financial services, or as the Company expands the use of technologies, such as machine learning and artificial intelligence features, and must navigate new legal, regulatory and ethical considerations relating to such technologies.\nRegulatory changes and other actions that materially adversely affect the Company\u2019s business may be announced with little or no advance notice and the Company may not be able to effectively mitigate all adverse impacts from such measures. For example, the Company is subject to changing regulations relating to the export and import of its products. The Company\u2019s programs, policies and procedures may not be effective in preventing a violation or a claim of a violation. As a result, the Company\u2019s products could be banned, delayed or prohibited from importation, which could materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nVaried stakeholder expectations about social and other issues expose the Company to potential liabilities, increased costs, reputational harm, and other adverse effects on the Company\u2019s business.\nVarious stakeholders, including governments, regulators, investors, employees, customers and others, have differing expectations about a wide range of social and other issues related to the Company\u2019s business. The Company makes statements about its values, including the environmental and societal impact of its business, through various reports, information provided on the Company\u2019s website, and in press statements and other communications. The Company also pursues environmental and other goals and initiatives that involve risks and uncertainties, require investments, and depend in part on third-party performance or data that is outside the Company\u2019s control, and the Company may not be able to fully achieve all of its goals and initiatives. Efforts by the Company to advance its business and values, or achieve its goals and further its initiatives, or to align with stakeholders\u2019 expectations, or comply with evolving, varied and at times conflicting federal, state and international laws, executive orders, regulations and standards, or any failure or perceived failure to do so, can result in adverse reactions by consumers and other stakeholders, including the commencement of legal and regulatory proceedings against the Company, and can materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nApple Inc. | 2025 Form 10-K | 13\nThe technology industry, including, in some instances, the Company, is subject to intense media, political and regulatory scrutiny, which exposes the Company to increasing regulation, government investigations, legal actions and penalties.\nFrom time to time, the Company has made changes to its business, including actions taken in response to litigation, competition, market conditions and legal and regulatory requirements. The Company expects to make further business changes in the future. For example, in the U.S., the Company has implemented changes to how developers communicate with consumers within apps on the U.S. storefront of the iOS and iPadOS App Store regarding alternative purchasing mechanisms and is currently subject to a court order preventing it from imposing any commission or fee on certain purchases that consumers make.\nGlobally, several jurisdictions have adopted, or may in the future adopt, competition-related laws and regulations imposing wide-ranging obligations on technology companies and significant limitations on businesses, including the Company. For example, the Company has implemented changes to iOS, iPadOS, the App Store and Safari\n\u00ae\n in the EU as it seeks to comply with the Digital Markets Act (\u201cDMA\u201d), including new business terms and alternative fee structures for iOS and iPadOS apps, alternative methods of distribution for iOS and iPadOS apps, alternative payment processing for apps across the Company\u2019s operating systems, and additional tools and application programming interfaces for developers. The Company has also continued to make changes to its compliance plan in response to feedback and engagement with the Commission. Although the Company\u2019s compliance plan is intended to address the DMA\u2019s obligations, it has been challenged by the Commission and may be challenged further by private litigants. The DMA provides for significant fines and penalties for noncompliance. While the changes introduced by the Company in the EU are intended to reduce new privacy and security risks that the DMA poses to EU users, many risks will remain. Changes to the Company\u2019s business in response to the DMA or other laws and regulations could materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nThe Company is also currently subject to antitrust investigations and litigation in various jurisdictions around the world, which can result in legal proceedings and claims against the Company that could, individually or in the aggregate, have a material adverse impact on the Company\u2019s business, results of operations, financial condition and stock price. For example, the Company is subject to civil antitrust lawsuits in the U.S. alleging monopolization or attempted monopolization in the markets for \u201cperformance smartphones\u201d and \u201csmartphones\u201d generally in violation of U.S. antitrust laws. In addition, the Company is the subject of investigations in Europe and other jurisdictions relating to App Store terms and conditions. If such investigations or litigation are resolved against the Company, the Company can be exposed to significant fines and may be required to make further changes to its business practices, all of which could materially adversely affect the Company\u2019s business, reputation, results of operations, financial condition and stock price.\nFurther, the Company has commercial relationships with other companies in the technology industry that are or may become subject to investigations and litigation that, if resolved against those other companies, could materially adversely affect the Company\u2019s commercial relationships with those business partners and materially adversely affect the Company\u2019s business, results of operations, financial condition and stock price. For example, the Company earns revenue from licensing arrangements with Google LLC (\u201cGoogle\u201d) and other companies to offer their search services on the Company\u2019s platforms and applications, and certain of these arrangements are currently subject to government investigations and legal proceedings. On August 5, 2024, Google was found to have violated U.S. antitrust laws. In connection with this finding, on September 2, 2025, the U.S. District Court for the District of Columbia (\u201cD.C. District Court\u201d) ordered certain remedies. The court\u2019s order is subject to further proceedings before the D.C. District Court, which may result in changes to the interpretation or application of the remedies ordered by the court, as well as new or changed remedies being ordered. The court\u2019s order is also subject to appeal by both the U.S. Department of Justice (\u201cDOJ\u201d) and Google. A reversal of the order on appeal could result in imposition of certain remedies initially proposed by the DOJ, such as those prohibiting Google from offering the Company commercial terms for search distribution. If implemented, these remedies could materially adversely affect the Company\u2019s ability to earn revenue from such licensing arrangements.\nThe Company\u2019s business, results of operations, financial condition and stock price can be materially adversely affected, individually or in the aggregate, by the outcomes of such investigations, litigation or changes to laws and regulations in the future. Changes to the Company\u2019s business practices to comply with new laws and regulations or in connection with legal proceedings can negatively impact the reputation of the Company\u2019s products for privacy and security. Such changes in business practices can also otherwise adversely affect the experience for users of the Company\u2019s products and services, and result in harm to the Company\u2019s reputation, loss of competitive advantage, poor market acceptance, reduced demand for products and services, lost sales, and lower profit margins.\nApple Inc. | 2025 Form 10-K | 14\nThe Company\u2019s business is subject to a variety of U.S. and international laws, rules, policies and other obligations regarding the collection, use, protection and transfer of personal data.\nThe Company is subject to an increasing number of federal, state and international laws relating to the collection, use, retention, protection and transfer of various types of personal data. In many cases, these laws apply not only to third-party transactions, but also restrict transfers of personal data among the Company and its international subsidiaries. Several jurisdictions have passed laws in this area, and additional jurisdictions are considering imposing additional restrictions or have laws that are pending. These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction. Complying with emerging and changing requirements causes the Company to incur substantial costs and has required and may in the future require the Company to change its business practices. Noncompliance could result in significant penalties or legal liability.\nThe Company makes statements about its use and disclosure of personal data through its privacy policy, information provided on its website, press statements and other privacy notices provided to customers. Any failure or perceived failure by the Company to comply with these public statements or with federal, state or international privacy or data protection laws and regulations could result in inquiries, proceedings and penalties from governmental entities or others. Such a failure or perceived failure could also result in reputational impacts, ongoing audit requirements and significant legal liability. The risks of inadvertent disclosure of personal data can increase with the introduction of new and complex technologies, such as artificial intelligence features, further exacerbating such risks.\nIn addition to the risks generally relating to the collection, use, retention, protection and transfer of personal data, the Company is also subject to specific obligations relating to the collection and processing of data associated with minors, as well as information considered sensitive under applicable laws, such as health, biometric, financial and payment card data. Health, biometric, financial and payment card data are subject to additional privacy, security and breach notification requirements, and the Company is subject to audit by governmental authorities regarding the Company\u2019s compliance with these obligations. If the Company fails to adequately comply with these rules and requirements, the Company can be subject to litigation or government investigations, can be liable for associated investigatory expenses, and can incur significant fees or fines.\nThe Company is also subject to new and changing laws and regulations regarding online safety, including enhanced protections for minors and mandatory age verification requirements. These laws and regulations can increase regulatory risks by requiring complex compliance measures and significant modifications to the Company\u2019s products, services and operations, and may lead to operational disruptions, heightened privacy and data security risks, increased costs and potential liability and fines, all of which can have a material adverse impact on the Company\u2019s business, financial condition, results of operations and stock price.\nFinancial Risks\nThe Company\u2019s net sales and gross margins are subject to volatility and downward pressure due to a variety of factors.\nThe Company\u2019s gross margins vary significantly across its products, services, geographic segments and distribution channels and can change over time. The Company\u2019s net sales and gross margins are subject to volatility and downward pressure due to a variety of factors, including: continued industry-wide global product pricing pressures and product pricing actions that the Company may take in response to such pressures; increased competition; the Company\u2019s ability to effectively stimulate demand for certain of its products and services; compressed product life cycles; supply shortages; potential increases in the cost of components, outside manufacturing services, and developing, acquiring and delivering content for the Company\u2019s services; the Company\u2019s ability to manage product quality and warranty costs effectively; shifts in the mix of products and services, or in the geographic, currency or channel mix, including to the extent that regulatory changes require the Company to modify its product and service offerings; fluctuations in foreign exchange rates; inflation and other macroeconomic pressures; the imposition of new or increased tariffs and other trade restrictions, their overall magnitude and duration, and retaliatory actions in response; and the introduction of new products or services, including new products or services with lower profit margins. These and other factors could have a materially adverse impact on the Company\u2019s results of operations, financial condition and stock price. Further, the Company generates a significant portion of its net sales from a single product category and a decline in demand for that product could significantly impact net sales and gross margins.\nThe Company\u2019s financial performance is subject to risks associated with changes in the value of the U.S. dollar relative to local currencies.\nThe Company\u2019s primary exposure to movements in foreign exchange rates relates to non\u2013U.S. dollar\u2013denominated sales, cost of sales and operating expenses worldwide. Gross margins on the Company\u2019s products in foreign countries and on products that include components obtained from foreign suppliers have in the past been adversely affected and could in the future be materially adversely affected by foreign exchange rate fluctuations.\nThe weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of the Company\u2019s foreign currency\u2013denominated sales and earnings, and generally leads the Company to raise international pricing, potentially reducing demand for the Company\u2019s products. In some circumstances, for competitive or other reasons, the Company may decide not to raise international pricing to offset the U.S. dollar\u2019s strengthening, which would adversely affect the U.S. dollar value of the gross margins the Company earns on foreign currency\u2013denominated sales.\nApple Inc. | 2025 Form 10-K | 15\nConversely, a strengthening of foreign currencies relative to the U.S. dollar, while generally beneficial to the Company\u2019s foreign currency\u2013denominated sales and earnings, could cause the Company to reduce international pricing or incur losses on its foreign currency derivative instruments, thereby limiting the benefit. Additionally, strengthening of foreign currencies may increase the Company\u2019s cost of product components denominated in those currencies, thus adversely affecting gross margins.\nThe Company uses derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign exchange rates. The use of such hedging activities may not be effective to offset any, or more than a portion, of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place.\nThe Company is exposed to credit risk and fluctuations in the values of its investment portfolio.\nThe Company\u2019s investments can be negatively affected by changes in liquidity, credit deterioration, financial results, market and economic conditions, political risk, sovereign risk, interest rate fluctuations or other factors. As a result, the value and liquidity of the Company\u2019s cash, cash equivalents and marketable securities may fluctuate substantially. Although the Company has not realized significant losses on its cash, cash equivalents and marketable securities, future fluctuations in their value could result in significant losses and could have a material adverse impact on the Company\u2019s results of operations, financial condition and stock price.\nThe Company is exposed to credit risk on its trade accounts receivable, vendor non-trade receivables and prepayments related to long-term supply agreements, and this risk is heightened during periods when economic conditions worsen.\nThe Company distributes its products and certain of its services through third-party cellular network carriers and other resellers. The Company also sells its products and services directly to small and mid-sized businesses and education, enterprise and government customers. A substantial majority of the Company\u2019s outstanding trade receivables are not covered by collateral, third-party bank support or financing arrangements, or credit insurance, and a significant portion of the Company\u2019s trade receivables can be concentrated within cellular network carriers or other resellers. The Company\u2019s exposure to credit and collectibility risk on its trade receivables is higher in certain international markets. The Company also has unsecured vendor non-trade receivables resulting from purchases of components by outsourcing partners and other vendors that manufacture subassemblies or assemble final products for the Company. In addition, the Company has made prepayments associated with long-term supply agreements to secure supply of inventory components. As of September\u00a027, 2025, the Company\u2019s vendor non-trade receivables were concentrated among a few individual vendors located primarily in Asia. If the Company is unable to monitor and limit exposure to credit risk on its trade and vendor non-trade receivables, as well as long-term prepayments, the Company\u2019s results of operations, financial condition and stock price could be materially adversely affected.\nThe Company is subject to changes in tax rates, the adoption of new U.S. or international tax legislation and exposure to additional tax liabilities.\nThe Company is subject to taxes in the U.S. and numerous foreign jurisdictions, including Ireland and Singapore, where a number of the Company\u2019s subsidiaries are organized. Due to economic and political conditions, tax laws and tax rates for income taxes and other non-income taxes in various jurisdictions may be subject to significant change. For example, the Organisation for Economic Co-operation and Development continues to advance proposals for modernizing international tax rules, including the introduction of global minimum tax standards. The Company\u2019s effective tax rates are affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, the introduction of new taxes, and changes in tax laws or their interpretation. The application of tax laws may be uncertain, require significant judgment and be subject to differing interpretations.\nThe Company is also subject to the examination of its tax returns and other tax matters by the U.S. Internal Revenue Service and other tax authorities and governmental bodies. The Company regularly assesses the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of its provision for taxes. The outcome of such examinations is inherently uncertain. If the Company\u2019s effective tax rates were to increase, or if the ultimate determination of the Company\u2019s taxes owed is for an amount in excess of amounts previously accrued, the Company\u2019s business, results of operations, financial condition and stock price could be materially adversely affected.\nApple Inc. | 2025 Form 10-K | 16\nGeneral Risks\nThe price of the Company\u2019s stock is subject to volatility.\nThe Company\u2019s stock has experienced substantial price volatility in the past and may continue to do so in the future. Additionally, the Company, the technology industry and the stock market as a whole have, from time to time, experienced extreme stock price and volume fluctuations that have affected stock prices in ways that may have been unrelated to these companies\u2019 operating performance. Price volatility may cause the average price at which the Company repurchases its stock in a given period to exceed the stock\u2019s price at a given point in time. The Company believes the price of its stock should reflect expectations of future growth and profitability. The Company also believes the price of its stock should reflect expectations that its cash dividend will continue at current levels or grow, and that its current share repurchase program will be fully consummated. Future dividends are subject to declaration by the Company\u2019s Board of Directors (\u201cBoard\u201d), and the Company\u2019s share repurchase program does not obligate it to acquire any specific number of shares. If the Company fails to meet expectations related to future growth, profitability, dividends, share repurchases or other market expectations, the price of the Company\u2019s stock may decline significantly, which could have a material adverse impact on investor confidence and employee retention.\nItem 1B.\u00a0\u00a0\u00a0\u00a0Unresolved Staff Comments\nNone.\nItem 1C.\u00a0\u00a0\u00a0\u00a0Cybersecurity\nThe Company\u2019s management, led by its Head of Corporate Information Security, has overall responsibility for identifying, assessing and managing any material risks from cybersecurity threats.\n\nThe Company\u2019s Head of Corporate Information Security leads a dedicated Information Security team of highly skilled individuals with experience across industries\n that, among other things, develops and distributes information security policies, standards and procedures; engages in employee cybersecurity training; implements security controls; assesses security risk and compliance posture; monitors and responds to security events; and executes security testing and assessments.\n\nThe Company\u2019s Head of Corporate Information Security has extensive knowledge and skills gained from over 25 years of experience in the cybersecurity industry, including serving in leadership positions at other large technology companies and leading the Company\u2019s Information Security team since 2016.\nThe Company\u2019s Information Security team coordinates with teams across the Company to prevent, respond to and manage security incidents,\nand engages third parties, as appropriate, to assess, test or otherwise assist with aspects of its security processes and incident response\n.\nA dedicated Supplier Trust team manages information security risks the Company is exposed to through its supplier relationships. The Company has processes to log, track, address, and escalate for further assessment and report, as appropriate, cybersecurity incidents across the Company and its suppliers to senior management and the Audit and Finance Committee (\u201cAudit Committee\u201d) of the Board.\n\nThe Company\u2019s enterprise risk management program\n is designed to identify, asse\nss, and monitor the Company\u2019s business risks, including financial, operational, compliance and reputational risks, and reflects management\u2019s assessment of cybersecurity risks.\nThe Audit Committee assists the Board in the oversight and monitoring of cybersecurity matters.\n\nThe Audit Committee regularly reviews and discusses the Company\u2019s cybersecurity risks with management\n, including the Company\u2019s Head of Corporate Information Security, its General Counsel and the Heads of Compliance and Business Conduct, Business Assurance, and Internal Audit, and receives updates, as necessary, regarding cybersecurity incidents.\n The Chair of the Audit Committee regularly reports the substance of such reviews and discussions to the Board, as necessary, and recommends to the Board such actions as the Audit Committee deems appropriate.\nFor a discussion of the Company\u2019s cybersecurity-related risks, see Item 1A of this Form 10-K under the heading \u201cRisk Factors.\u201d\nItem 2.\u00a0\u00a0\u00a0\u00a0Properties\nThe Company\u2019s headquarters is located in Cupertino, California. As of September\u00a027, 2025, the Company owned or leased facilities and land for corporate functions, R&D, data centers, retail and other purposes at locations throughout the U.S. and in various places outside the U.S. The Company believes its existing facilities and equipment, which are used by all reportable segments, are in good operating condition and are suitable for the conduct of its business.\nApple Inc. | 2025 Form 10-K | 17\nItem 3.\u00a0\u00a0\u00a0\u00a0Legal Proceedings\nDigital Markets Act Investigations\nOn March 25, 2024, the Commission announced that it had opened a formal noncompliance investigation against the Company under Article 5(4) of the EU DMA (\u201cArticle 5(4) Investigation\u201d). The Article 5(4) Investigation relates to how developers may communicate and promote offers to end users for apps distributed through the App Store, as well as how developers may conclude contracts with those end users. On June 24, 2024, the Commission announced that it had opened an additional formal investigation against the Company regarding whether the Company\u2019s new contractual requirements for third-party app developers and app marketplaces may violate the DMA (\u201cArticle 6(4) Investigation\u201d). On April 23, 2025, the Commission fined the Company \u20ac500 million in the Article 5(4) Investigation and issued a cease and desist order requiring the Company to remove technical and commercial restrictions that prevent developers from steering users to alternative distribution channels outside the App Store. The Company has appealed the Commission\u2019s Article 5(4) decision. Also on April 23, 2025, the Commission issued preliminary findings in the Article 6(4) Investigation. If the Commission makes a final determination in the Article 6(4) Investigation that there has been a violation, it can issue a cease and desist order and may impose fines up to 10% of the Company\u2019s annual worldwide net sales. The Commission may also seek to impose additional fines if it deems that the Company has violated a cease and desist order. The Company believes that it complies with the DMA and has continued to make changes to its compliance plan in response to feedback and engagement with the Commission.\nDepartment of Justice Lawsuit\nOn March 21, 2024, the DOJ and a number of state and district attorneys general filed a civil antitrust lawsuit in the U.S. District Court for the District of New Jersey against the Company alleging monopolization or attempted monopolization in the markets for \u201cperformance smartphones\u201d and \u201csmartphones\u201d in violation of U.S. antitrust laws. The DOJ is seeking equitable relief to redress the alleged anticompetitive behavior. In addition,\nvarious civil litigation matters have been filed in state and federal courts in the U.S.\n alleging similar violations of U.S. antitrust laws and seeking monetary damages and other nonmonetary relief. The Company believes it has substantial defenses and intends to vigorously defend itself.\nEpic Games\nEpic Games, Inc. filed a lawsuit in the U.S. District Court for the Northern District of California (\u201cCalifornia District Court\u201d) against the Company alleging violations of federal and state antitrust laws and California\u2019s unfair competition law based upon the Company\u2019s operation of its App Store. The California District Court found that certain provisions of the Company\u2019s App Review Guidelines violate California\u2019s unfair competition law and issued an injunction (the \u201c2021 Injunction\u201d) enjoining the Company from prohibiting developers from including in their apps buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than the Company\u2019s in-app purchase system. The 2021 Injunction applies to apps on the U.S. storefronts of the iOS and iPadOS App Stores. On January 16, 2024, the Company implemented a plan to comply with the 2021 Injunction and filed a statement of compliance with the California District Court. On September 30, 2024, the Company filed a motion with the California District Court to narrow or vacate the 2021 Injunction. On April 30, 2025, the California District Court found the Company to be in violation of the 2021 Injunction and enjoined the Company from imposing any commission or any fee on purchases that consumers make outside an app; restricting, conditioning, limiting, or prohibiting how developers guide consumers to purchases outside an app; or otherwise interfering with a consumer\u2019s choice to proceed in or out of an app. The California District Court also denied the Company\u2019s motion to narrow or vacate the 2021 Injunction and referred the Company to the U.S. Attorney for the Northern District of California for a determination whether criminal contempt proceedings are appropriate. The Company will continue to vigorously defend its actions and employees, and has appealed the California District Court\u2019s most recent decision to the U.S. Court of Appeals for the Ninth Circuit (\u201cNinth Circuit Court\u201d). Although the Company\u2019s request to stay the decision pending appeal was denied, the Ninth Circuit Court has agreed to consider the Company\u2019s appeal on an expedited basis, with oral arguments heard in October 2025.\nOther Legal Proceedings\nThe Company is subject to other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. The Company settled certain matters during the fourth quarter of 2025 that did not individually or in the aggregate have a material impact on the Company\u2019s financial condition or operating results. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management\u2019s expectations, the Company\u2019s financial condition and operating results for that reporting period could be materially adversely affected.\nItem 4.\u00a0\u00a0\u00a0\u00a0Mine Safety Disclosures\nNot applicable.\nApple Inc. | 2025 Form 10-K | 18\nPART II\nItem 5.\u00a0\u00a0\u00a0\u00a0Market for Registrant\u2019s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities\nThe Company\u2019s common stock is traded on The Nasdaq Stock Market LLC under the symbol AAPL.\nHolders\nAs of October\u00a017, 2025, there were 22,429 shareholders of record.\nPurchases of Equity Securities by the Issuer and Affiliated Purchasers\nShare repurchase activity during the three months ended September\u00a027, 2025, was as follows (in millions, except number of shares, which are reflected in thousands, and per-share amounts):\nPeriods\nTotal Number\nof Shares Purchased\nAverage Price\nPaid Per Share\nTotal Number of Shares\nPurchased as Part of Publicly\nAnnounced Plans or Programs\nApproximate Dollar Value of\nShares That May Yet Be Purchased\nUnder the Plans or Programs\n(1)\nJune 29, 2025 to August 2, 2025:\nOpen market and privately negotiated purchases\n33,265\n$\n210.43\n33,265\nAugust 3, 2025 to August 30, 2025:\nOpen market and privately negotiated purchases\n28,986\n$\n224.25\n28,986\nAugust 31, 2025 to September 27, 2025:\nOpen market and privately negotiated purchases\n27,247\n$\n238.56\n27,247\nTotal\n89,498\n$\n99,779\n(1)\nOn May 2, 2024, the Company announced a program to repurchase up to $110 billion of the Company\u2019s common stock. During the fourth quarter of 2025, the Company utilized the final $19.8 billion under the May 2024 program. On May 1, 2025, the Company announced an additional program to repurchase up to $100 billion of the Company\u2019s common stock. As of September\u00a027, 2025, $221 million of the May 2025 program had been utilized. The programs do not obligate the Company to acquire a minimum amount of shares. Under the programs, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.\nApple Inc. | 2025 Form 10-K | 19\nCompany Stock Performance\nThe following graph shows a comparison of five-year cumulative total shareholder return, calculated on a dividend-reinvested basis, for the Company, the S&P 500 Index and the Dow Jones U.S. Technology Total Stock Market Index. The graph assumes $100 was invested in each of the Company\u2019s common stock, the S&P 500 Index and the Dow Jones U.S. Technology Total Stock Market Index as of the market close on September\u00a025, 2020. Past stock price performance is not necessarily indicative of future stock price performance.\nSeptember 2020\nSeptember 2021\nSeptember 2022\nSeptember 2023\nSeptember 2024\nSeptember 2025\nApple Inc.\n$\n100\n$\n132\n$\n136\n$\n155\n$\n208\n$\n234\nS&P 500 Index\n$\n100\n$\n137\n$\n115\n$\n136\n$\n185\n$\n217\nDow Jones U.S. Technology Total Stock Market Index\n$\n100\n$\n147\n$\n107\n$\n147\n$\n220\n$\n287\nItem 6.\u00a0\u00a0\u00a0\u00a0[Reserved]\nApple Inc. | 2025 Form 10-K | 20\nItem 7.\u00a0\u00a0\u00a0\u00a0Management\u2019s Discussion and Analysis of Financial Condition and Results of Operations\nThe following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K. This Item generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included, and can be found in \u201cManagement\u2019s Discussion and Analysis of Financial Condition and Results of Operations\u201d in Part II, Item 7 of the Company\u2019s Annual Report on Form 10-K for the fiscal year ended September\u00a028, 2024.\nProduct, Service and Software Announcements\nThe Company announces new product, service and software offerings at various times during the year. Significant announcements during fiscal year 2025 included the following:\nFirst Quarter 2025:\n\u2022\nMacBook Pro\n\u2022\nMac mini\n\u2022\niMac\n\u2022\niPad mini\nSecond Quarter 2025:\n\u2022\niPhone 16e\n\u2022\niPad Air\n\u2022\niPad\n\u2022\nMacBook Air\n\u2022\nMac Studio\nThird Quarter 2025:\n\u2022\niOS 26, macOS Tahoe 26, iPadOS 26, watchOS 26, visionOS 26 and tvOS 26\nFourth Quarter 2025:\n\u2022\niPhone 17, iPhone Air, iPhone 17 Pro and iPhone 17 Pro Max\n\u2022\nApple Watch Series 11, Apple Watch SE 3 and Apple Watch Ultra 3\n\u2022\nAirPods Pro 3\nFiscal Period\nThe Company\u2019s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company\u2019s fiscal quarters with calendar quarters, which occurred in the first quarter of 2023. The Company\u2019s fiscal years 2025 and 2024 spanned 52 weeks each, whereas fiscal year 2023 spanned 53 weeks.\nMacroeconomic Conditions\nMacroeconomic conditions, including inflation, interest rates and currency fluctuations, have directly and indirectly impacted, and could in the future materially impact, the Company\u2019s results of operations and financial condition.\nApple Inc. | 2025 Form 10-K | 21\nTariffs and Other Measures\nBeginning in the second quarter of 2025, new U.S. Tariffs were announced, including additional tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and the EU, among others. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other retaliatory measures. Various modifications to the U.S. Tariffs have been announced and further changes could be made in the future, which may include additional sector-based tariffs or other measures. For example, the U.S. Department of Commerce has initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into, among other things, imports of semiconductors, semiconductor manufacturing equipment, and their derivative products, including downstream products that contain semiconductors. Tariffs and other measures that are applied to the Company\u2019s products or their components can have a material adverse impact on the Company\u2019s business, results of operations and financial condition, including impacting the Company\u2019s supply chain, the availability of rare earths and other raw materials and components, pricing and gross margin. The ultimate impact remains uncertain and will depend on several factors, including whether additional or incremental U.S. Tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. Trade and other international disputes can have an adverse impact on the overall macroeconomic environment and result in shifts and reductions in consumer spending and negative consumer sentiment for the Company\u2019s products and services, all of which can further adversely affect the Company\u2019s business and results of operations.\nSegment Operating Performance\nThe following table shows net sales by reportable segment for 2025, 2024 and 2023 (dollars in millions):\n2025\nChange\n2024\nChange\n2023\nAmericas\n$\n178,353\n7\n%\n$\n167,045\n3\n%\n$\n162,560\nEurope\n111,032\n10\n%\n101,328\n7\n%\n94,294\nGreater China\n64,377\n(4)\n%\n66,952\n(8)\n%\n72,559\nJapan\n28,703\n15\n%\n25,052\n3\n%\n24,257\nRest of Asia Pacific\n33,696\n10\n%\n30,658\n4\n%\n29,615\nTotal net sales\n$\n416,161\n6\n%\n$\n391,035\n2\n%\n$\n383,285\nAmericas\nAmericas net sales increased during 2025 compared to 2024 primarily due to higher net sales of iPhone and Services. The weakness in foreign currencies relative to the U.S. dollar had an unfavorable year-over-year impact on Americas net sales during 2025.\nEurope\nEurope net sales increased during 2025 compared to 2024 primarily due to higher net sales of Services, iPhone and Mac.\nGreater China\nGreater China net sales decreased during 2025 compared to 2024 primarily due to lower net sales of iPhone, partially offset by higher net sales of Mac.\nJapan\nJapan net sales increased during 2025 compared to 2024 primarily due to higher net sales of iPhone, Services and iPad.\nRest of Asia Pacific\nRest of Asia Pacific net sales increased during 2025 compared to 2024 primarily due to higher net sales of iPhone, Services and Mac.\nApple Inc. | 2025 Form 10-K | 22\nProducts and Services Performance\nThe following table shows net sales by category for 2025, 2024 and 2023 (dollars in millions):\n2025\nChange\n2024\nChange\n2023\niPhone\n$\n209,586\n4\n%\n$\n201,183\n\u2014\n%\n$\n200,583\nMac\n33,708\n12\n%\n29,984\n2\n%\n29,357\niPad\n28,023\n5\n%\n26,694\n(6)\n%\n28,300\nWearables, Home and Accessories\n35,686\n(4)\n%\n37,005\n(7)\n%\n39,845\nServices\n(1)\n109,158\n14\n%\n96,169\n13\n%\n85,200\nTotal net sales\n$\n416,161\n6\n%\n$\n391,035\n2\n%\n$\n383,285\n(1)\nServices net sales include amortization of the deferred value of services bundled in the sales price of certain products.\niPhone\niPhone net sales increased during 2025 compared to 2024 due to higher net sales of Pro models.\nMac\nMac net sales increased during 2025 compared to 2024 primarily due to higher net sales of laptops and desktops.\niPad\niPad net sales increased during 2025 compared to 2024 primarily due to higher net sales of iPad Air, iPad mini and iPad, partially offset by lower net sales of iPad Pro.\nWearables, Home and Accessories\nWearables, Home and Accessories net sales decreased during 2025 compared to 2024 primarily due to lower net sales of Accessories and Wearables.\nServices\nServices net sales increased during 2025 compared to 2024 primarily due to higher net sales from advertising, the App Store and cloud services.\nApple Inc. | 2025 Form 10-K | 23\nGross Margin\nProducts and Services gross margin and gross margin percentage for 2025, 2024 and 2023 were as follows (dollars in millions):\n2025\n2024\n2023\nGross margin:\nProducts\n$\n112,887\n$\n109,633\n$\n108,803\nServices\n82,314\n71,050\n60,345\nTotal gross margin\n$\n195,201\n$\n180,683\n$\n169,148\nGross margin percentage:\nProducts\n36.8\n%\n37.2\n%\n36.5\n%\nServices\n75.4\n%\n73.9\n%\n70.8\n%\nTotal gross margin percentage\n46.9\n%\n46.2\n%\n44.1\n%\nProducts Gross Margin\nProducts gross margin increased during 2025 compared to 2024 primarily due to favorable costs and a different mix of products, partially offset by tariff costs.\nProducts gross margin percentage decreased during 2025 compared to 2024 primarily due to a different mix of products and tariff costs, partially offset by other favorable costs.\nServices Gross Margin\nServices gross margin increased during 2025 compared to 2024 primarily due to higher Services net sales and a different mix of services.\nServices gross margin percentage increased during 2025 compared to 2024 primarily due to a different mix of services, partially offset by higher costs.\nThe Company\u2019s future gross margins can be impacted by a variety of factors, as discussed in Part I, Item 1A of this Form 10-K under the heading \u201cRisk Factors.\u201d As a result, the Company believes, in general, gross margins will be subject to volatility and downward pressure.\nOperating Expenses\nOperating expenses for 2025, 2024 and 2023 were as follows (dollars in millions):\n2025\nChange\n2024\nChange\n2023\nResearch and development\n$\n34,550\n10\n%\n$\n31,370\n5\n%\n$\n29,915\nPercentage of total net sales\n8\n%\n8\n%\n8\n%\nSelling, general and administrative\n$\n27,601\n6\n%\n$\n26,097\n5\n%\n$\n24,932\nPercentage of total net sales\n7\n%\n7\n%\n7\n%\nTotal operating expenses\n$\n62,151\n8\n%\n$\n57,467\n5\n%\n$\n54,847\nPercentage of total net sales\n15\n%\n15\n%\n14\n%\nResearch and Development\nThe growth in R&D expense during 2025 compared to 2024 was primarily driven by increases in headcount-related expenses and infrastructure-related costs.\nSelling, General and Administrative\nThe growth in selling, general and administrative expense during 2025 compared to 2024 was primarily driven by increases in headcount-related expenses and variable selling expenses.\nApple Inc. | 2025 Form 10-K | 24\nProvision for Income Taxes\nProvision for income taxes, effective tax rate and statutory federal income tax rate for 2025, 2024 and 2023 were as follows (dollars in millions):\n2025\n2024\n2023\nProvision for income taxes\n$\n20,719\n$\n29,749\n$\n16,741\nEffective tax rate\n15.6\n%\n24.1\n%\n14.7\n%\nStatutory federal income tax rate\n21\n%\n21\n%\n21\n%\nThe Company\u2019s effective tax rate for 2025 was lower than the statutory federal income tax rate primarily due to a lower effective tax rate on foreign earnings, including the impact of changes in unrecognized tax benefits, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by a change in valuation allowance and state income taxes.\nThe Company\u2019s effective tax rate for 2025 was lower compared to 2024 due to a $10.7 billion year-over-year decrease in the provision for income taxes related to the State Aid Decision (refer to Note 7, \u201cIncome Taxes\u201d in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K) and the impact of changes in unrecognized tax benefits, partially offset by a change in valuation allowance and a higher effective tax rate on foreign earnings.\nLiquidity and Capital Resources\nThe Company believes its balances of cash, cash equivalents and marketable securities, which totaled $132.4\u00a0billion as of September\u00a027, 2025, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond.\nThe Company\u2019s material cash requirements include the following contractual obligations:\nDebt\nAs of September\u00a027, 2025, the Company had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $91.3 billion (collectively the \u201cNotes\u201d), with $12.4 billion payable within 12 months. Future interest payments associated with the Notes total $37.0 billion, with $2.6 billion payable within 12 months.\nThe Company also issues unsecured short-term promissory notes pursuant to a commercial paper program. As of September\u00a027, 2025, the Company had $8.0 billion of commercial paper outstanding, which was payable within 12 months.\nLeases\nThe Company has lease arrangements for certain equipment and facilities, including corporate, data center, manufacturing and retail space. As of September\u00a027, 2025, the Company had fixed lease payment obligations of $16.8 billion, with $2.6 billion payable within 12 months.\nManufacturing Purchase Obligations\nThe Company utilizes several outsourcing partners to manufacture subassemblies for the Company\u2019s products and to perform final assembly and testing of finished products. The Company also obtains individual components for its products from a wide variety of individual suppliers. As of September\u00a027, 2025, the Company had manufacturing purchase obligations of $56.2 billion, with $55.4 billion payable within 12 months.\nOther Purchase Obligations\nThe Company\u2019s other purchase obligations primarily consist of noncancelable obligations to acquire capital assets, including assets related to product manufacturing, and noncancelable obligations related to supplier arrangements, licensed intellectual property and content, and distribution rights. As of September\u00a027, 2025, the Company had other purchase obligations of $14.8 billion, with $7.0 billion payable within 12 months.\nDeemed Repatriation Tax Payable\nAs of September\u00a027, 2025, the balance of the deemed repatriation tax payable imposed by the U.S. Tax Cuts and Jobs Act of 2017 (\u201cTCJA\u201d) was $8.8\u00a0billion, which was payable within 12 months.\nApple Inc. | 2025 Form 10-K | 25\nCapital Return Program\nIn addition to its contractual cash requirements, the Company has an authorized share repurchase program. The program does not obligate the Company to acquire a minimum amount of shares. As of September\u00a027, 2025, the Company\u2019s quarterly cash dividend was $0.26 per share. The Company intends to increase its dividend on an annual basis, subject to declaration by the Board.\nIn May 2025, the Company announced a new share repurchase program of up to $100 billion and raised its quarterly dividend from $0.25 to $0.26 per share beginning in May 2025. During 2025, the Company repurchased $89.3 billion of its common stock and paid dividends and dividend equivalents of $15.4 billion.\nRecent Accounting Pronouncements\nInternal-Use Software\nIn September 2025, the Financial Accounting Standards Board (\u201cFASB\u201d) issued Accounting Standards Update (\u201cASU\u201d) No. 2025-06,\nIntangibles\u2014Goodwill and Other\u2014Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software\n (\u201cASU 2025-06\u201d), which modernizes 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 will be effective for the Company in its first quarter of 2029, and early adoption is permitted. The Company is currently evaluating the timing and method of its adoption of ASU 2025-06.\nDisaggregation of Income Statement Expenses\nIn November 2024, the FASB issued ASU No. 2024-03,\nIncome Statement\u2014Reporting Comprehensive Income\u2014Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses\n(\u201cASU 2024-03\u201d) and in January 2025, the FASB issued ASU No. 2025-01,\nIncome Statement\u2014Reporting Comprehensive Income\u2014Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date\n, which clarified the effective date of ASU 2024-03. ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the Consolidated Statements of Operations, as well as qualitatively describe remaining amounts included in those captions. ASU 2024-03 will also require the Company to disclose both the amount and the Company\u2019s definition of selling expenses. The Company will adopt ASU 2024-03 in its fourth quarter of 2028 using a prospective transition method.\nIncome Taxes\nIn December 2023, the FASB issued ASU No. 2023-09,\nIncome Taxes (Topic 740): Improvements to Income Tax Disclosures\n(\u201cASU 2023-09\u201d), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU 2023-09 in its fourth quarter of 2026 using a prospective transition method.\nCritical Accounting Estimates\nThe preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (\u201cGAAP\u201d) and the Company\u2019s discussion and analysis of its financial condition and operating results require the Company\u2019s management to make judgments, assumptions and estimates that affect the amounts reported. Note 1, \u201cSummary of Significant Accounting Policies\u201d of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K describes the significant accounting policies and methods used in the preparation of the Company\u2019s consolidated financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.\nUncertain Tax Positions\nThe Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. The evaluation of the Company\u2019s uncertain tax positions involves significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws, including the TCJA and the allocation of international taxation rights between countries. Although management believes the Company\u2019s reserves are reasonable, no assurance can be given that the final outcome of these uncertainties will not be different from that reflected in the Company\u2019s reserves. Reserves are adjusted considering changing facts and circumstances, such as the closing of a tax examination. Resolution of these uncertainties in a manner inconsistent with management\u2019s expectations could have a material impact on the Company\u2019s financial condition and operating results.\nApple Inc. | 2025 Form 10-K | 26\nLegal and Other Contingencies\nThe Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management\u2019s expectations could have a material impact on the Company\u2019s financial condition and operating results.\nItem 7A.\u00a0\u00a0\u00a0\u00a0Quantitative and Qualitative Disclosures About Market Risk\nThe Company is exposed to economic risk from interest rates and foreign exchange rates. The Company uses various strategies to manage these risks; however, they may still impact the Company\u2019s consolidated financial statements.\nInterest Rate Risk\nThe Company is primarily exposed to fluctuations in U.S. interest rates and their impact on the Company\u2019s investment portfolio and term debt. Increases in interest rates will negatively affect the fair value of the Company\u2019s investment portfolio and increase the interest expense on the Company\u2019s term debt. To protect against interest rate risk, the Company may use derivative instruments, offset interest rate\u2013sensitive assets and liabilities, or control duration of the investment and term debt portfolios.\nThe following table sets forth potential impacts on the Company\u2019s investment portfolio and term debt, including the effects of any associated derivatives, that would result from a hypothetical increase in relevant interest rates as of September\u00a027, 2025 and September\u00a028, 2024 (dollars in millions):\nInterest Rate\nSensitive Instrument\nHypothetical Interest\nRate Increase\nPotential Impact\n2025\n2024\nInvestment portfolio\n100 basis points, all tenors\nDecline in fair value\n$\n2,416\n$\n2,755\nTerm debt\n100 basis points, all tenors\nIncrease in annual interest expense\n$\n129\n$\n139\nForeign Exchange Rate Risk\nThe Company\u2019s exposure to foreign exchange rate risk relates primarily to the Company being a net receiver of currencies other than the U.S. dollar. Changes in exchange rates, and in particular a strengthening of the U.S. dollar, will negatively affect the Company\u2019s net sales and gross margins as expressed in U.S. dollars. Fluctuations in exchange rates may also affect the fair values of certain of the Company\u2019s assets and liabilities. To protect against foreign exchange rate risk, the Company may use derivative instruments, offset exposures, or adjust local currency pricing of its products and services. However, the Company may choose to not hedge certain foreign currency exposures for a variety of reasons, including accounting considerations or prohibitive cost.\nThe Company applied a value-at-risk (\u201cVAR\u201d) model to its foreign currency derivative positions to assess the potential impact of fluctuations in exchange rates. The VAR model used a Monte Carlo simulation. The VAR is the maximum expected loss in fair value, for a given confidence interval, to the Company\u2019s foreign currency derivative positions due to adverse movements in rates. Based on the results of the model, the Company estimates, with 95% confidence, a maximum one-day loss in fair value of $590 million and $538 million as of September\u00a027, 2025 and September\u00a028, 2024, respectively. Changes in the Company\u2019s underlying foreign currency exposures, which were excluded from the assessment, generally offset changes in the fair values of the Company\u2019s foreign currency derivatives.\nApple Inc. | 2025 Form 10-K | 27\nItem 8.\u00a0\u00a0\u00a0\u00a0Financial Statements and Supplementary Data\nIndex to Consolidated Financial Statements\nPage\nConsolidated Statements of Operations for the years ended September 27, 2025, September 28, 2024 and September 30, 2023\n29\nConsolidated Statements of Comprehensive Income for the years ended September 27, 2025, September 28, 2024 and September 30, 2023\n30\nConsolidated Balance Sheets as of September 27, 2025 and September 28, 2024\n31\nConsolidated Statements of Shareholders\u2019 Equity for the years ended September 27, 2025, September 28, 2024 and September 30, 2023\n32\nConsolidated Statements of Cash Flows for the years ended September 27, 2025, September 28, 2024 and September 30, 2023\n33\nNotes to Consolidated Financial Statements\n34\nReports of Independent Registered Public Accounting Firm\n49\nAll financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes.\nApple Inc. | 2025 Form 10-K | 28\nApple Inc.\nCONSOLIDATED STATEMENTS OF OPERATIONS\n(In millions, except number of shares, which are reflected in thousands, and per-share amounts)\nYears ended\nSeptember 27,\n2025\nSeptember 28,\n2024\nSeptember 30,\n2023\nNet sales:\n\u00a0\u00a0\u00a0Products\n$\n307,003\n\n$\n294,866\n\n$\n298,085\n\n\u00a0\u00a0\u00a0Services\n109,158\n\n96,169\n\n85,200\n\nTotal net sales\n416,161\n\n391,035\n\n383,285\n\nCost of sales:\n\u00a0\u00a0\u00a0Products\n194,116\n\n185,233\n\n189,282\n\n\u00a0\u00a0\u00a0Services\n26,844\n\n25,119\n\n24,855\n\nTotal cost of sales\n220,960\n\n210,352\n\n214,137\n\nGross margin\n195,201\n\n180,683\n\n169,148\n\nOperating expenses:\nResearch and development\n34,550\n\n31,370\n\n29,915\n\nSelling, general and administrative\n27,601\n\n26,097\n\n24,932\n\nTotal operating expenses\n62,151\n\n57,467\n\n54,847\n\nOperating income\n133,050\n\n123,216\n\n114,301\n\nOther income/(expense), net\n(\n321\n)\n269\n\n(\n565\n)\nIncome before provision for income taxes\n132,729\n\n123,485\n\n113,736\n\nProvision for income taxes\n20,719\n\n29,749\n\n16,741\n\nNet income\n$\n112,010\n\n$\n93,736\n\n$\n96,995\n\nEarnings per share:\nBasic\n$\n7.49\n\n$\n6.11\n\n$\n6.16\n\nDiluted\n$\n7.46\n\n$\n6.08\n\n$\n6.13\n\nShares used in computing earnings per share:\nBasic\n14,948,500\n\n15,343,783\n\n15,744,231\n\nDiluted\n15,004,697\n\n15,408,095\n\n15,812,547\n\nSee accompanying Notes to Consolidated Financial Statements.\nApple Inc. | 2025 Form 10-K | 29\nApple Inc.\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n(In millions)\nYears ended\nSeptember 27,\n2025\nSeptember 28,\n2024\nSeptember 30,\n2023\nNet income\n$\n112,010\n\n$\n93,736\n\n$\n96,995\n\nOther comprehensive income/(loss):\nChange in foreign currency translation, net of tax\n(\n267\n)\n395\n\n(\n765\n)\nChange in unrealized gains/losses on derivative instruments, net of tax:\nChange in fair value of derivative instruments\n849\n\n(\n832\n)\n323\n\nAdjustment for net (gains)/losses realized and included in net income\n(\n212\n)\n(\n1,337\n)\n(\n1,717\n)\nTotal change in unrealized gains/losses on derivative instruments\n637\n\n(\n2,169\n)\n(\n1,394\n)\nChange in unrealized gains/losses on marketable debt securities, net of tax:\nChange in fair value of marketable debt securities\n817\n\n5,850\n\n1,563\n\nAdjustment for net (gains)/losses realized and included in net income\n414\n\n204\n\n253\n\nTotal change in unrealized gains/losses on marketable debt securities\n1,231\n\n6,054\n\n1,816\n\nTotal other comprehensive income/(loss)\n1,601\n\n4,280\n\n(\n343\n)\nTotal comprehensive income\n$\n113,611\n\n$\n98,016\n\n$\n96,652\n\nSee accompanying Notes to Consolidated Financial Statements.\nApple Inc. | 2025 Form 10-K | 30\nApple Inc.\nCONSOLIDATED BALANCE SHEETS\n(In millions, except number of shares, which are reflected in thousands, and par value)\nSeptember 27,\n2025\nSeptember 28,\n2024\nASSETS:\nCurrent assets:\nCash and cash equivalents\n$\n35,934\n\n$\n29,943\n\nMarketable securities\n18,763\n\n35,228\n\nAccounts receivable, net\n39,777\n\n33,410\n\nVendor non-trade receivables\n33,180\n\n32,833\n\nInventories\n5,718\n\n7,286\n\nOther current assets\n14,585\n\n14,287\n\nTotal current assets\n147,957\n\n152,987\n\nNon-current assets:\nMarketable securities\n77,723\n\n91,479\n\nProperty, plant and equipment, net\n49,834\n\n45,680\n\nOther non-current assets\n83,727\n\n74,834\n\nTotal non-current assets\n211,284\n\n211,993\n\nTotal assets\n$\n359,241\n\n$\n364,980\n\nLIABILITIES AND SHAREHOLDERS\u2019 EQUITY:\nCurrent liabilities:\nAccounts payable\n$\n69,860\n\n$\n68,960\n\nOther current liabilities\n66,387\n\n78,304\n\nDeferred revenue\n9,055\n\n8,249\n\nCommercial paper\n7,979\n\n9,967\n\nTerm debt\n12,350\n\n10,912\n\nTotal current liabilities\n165,631\n\n176,392\n\nNon-current liabilities:\nTerm debt\n78,328\n\n85,750\n\nOther non-current liabilities\n41,549\n\n45,888\n\nTotal non-current liabilities\n119,877\n\n131,638\n\nTotal liabilities\n285,508\n\n308,030\n\nCommitments and contingencies\nShareholders\u2019 equity:\nCommon stock and additional paid-in capital, $\n0.00001\n par value:\n50,400,000\n shares authorized;\n14,773,260\n and\n15,116,786\n shares issued and outstanding, respectively\n93,568\n\n83,276\n\nAccumulated deficit\n(\n14,264\n)\n(\n19,154\n)\nAccumulated other comprehensive loss\n(\n5,571\n)\n(\n7,172\n)\nTotal shareholders\u2019 equity\n73,733\n\n56,950\n\nTotal liabilities and shareholders\u2019 equity\n$\n359,241\n\n$\n364,980\n\nSee accompanying Notes to Consolidated Financial Statements.\nApple Inc. | 2025 Form 10-K | 31\nApple Inc.\nCONSOLIDATED STATEMENTS OF SHAREHOLDERS\u2019 EQUITY\n(In millions, except per-share amounts)\nYears ended\nSeptember 27,\n2025\nSeptember 28,\n2024\nSeptember 30,\n2023\nTotal shareholders\u2019 equity, beginning balances\n$\n56,950\n\n$\n62,146\n\n$\n50,672\n\nCommon stock and additional paid-in capital:\nBeginning balances\n83,276\n\n73,812\n\n64,849\n\nCommon stock issued\n1,498\n\n1,423\n\n1,346\n\nCommon stock withheld related to net share settlement of equity awards\n(\n4,452\n)\n(\n3,993\n)\n(\n3,521\n)\nShare-based compensation\n13,246\n\n12,034\n\n11,138\n\nEnding balances\n93,568\n\n83,276\n\n73,812\n\nAccumulated deficit:\nBeginning balances\n(\n19,154\n)\n(\n214\n)\n(\n3,068\n)\nNet income\n112,010\n\n93,736\n\n96,995\n\nDividends and dividend equivalents declared\n(\n15,413\n)\n(\n15,218\n)\n(\n14,996\n)\nCommon stock withheld related to net share settlement of equity awards\n(\n1,655\n)\n(\n1,612\n)\n(\n2,099\n)\nCommon stock repurchased\n(\n90,052\n)\n(\n95,846\n)\n(\n77,046\n)\nEnding balances\n(\n14,264\n)\n(\n19,154\n)\n(\n214\n)\nAccumulated other comprehensive loss:\nBeginning balances\n(\n7,172\n)\n(\n11,452\n)\n(\n11,109\n)\nOther comprehensive income/(loss)\n1,601\n\n4,280\n\n(\n343\n)\nEnding balances\n(\n5,571\n)\n(\n7,172\n)\n(\n11,452\n)\nTotal shareholders\u2019 equity, ending balances\n$\n73,733\n\n$\n56,950\n\n$\n62,146\n\nDividends and dividend equivalents declared per share or RSU\n$\n1.02\n\n$\n0.98\n\n$\n0.94\n\nSee accompanying Notes to Consolidated Financial Statements.\nApple Inc. | 2025 Form 10-K | 32\nApple Inc.\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n(In millions)\nYears ended\nSeptember 27,\n2025\nSeptember 28,\n2024\nSeptember 30,\n2023\nCash, cash equivalents, and restricted cash and cash equivalents, beginning balances\n$\n29,943\n\n$\n30,737\n\n$\n24,977\n\nOperating activities:\nNet income\n112,010\n\n93,736\n\n96,995\n\nAdjustments to reconcile net income to cash generated by operating activities:\nDepreciation and amortization\n11,698\n\n11,445\n\n11,519\n\nShare-based compensation expense\n12,863\n\n11,688\n\n10,833\n\nOther\n(\n89\n)\n(\n2,266\n)\n(\n2,227\n)\nChanges in operating assets and liabilities:\nAccounts receivable, net\n(\n6,682\n)\n(\n3,788\n)\n(\n1,688\n)\nVendor non-trade receivables\n(\n347\n)\n(\n1,356\n)\n1,271\n\nInventories\n1,400\n\n(\n1,046\n)\n(\n1,618\n)\nOther current and non-current assets\n(\n9,197\n)\n(\n11,731\n)\n(\n5,684\n)\nAccounts payable\n902\n\n6,020\n\n(\n1,889\n)\nOther current and non-current liabilities\n(\n11,076\n)\n15,552\n\n3,031\n\nCash generated by operating activities\n111,482\n\n118,254\n\n110,543\n\nInvesting activities:\nPurchases of marketable securities\n(\n24,407\n)\n(\n48,656\n)\n(\n29,513\n)\nProceeds from maturities of marketable securities\n40,907\n\n51,211\n\n39,686\n\nProceeds from sales of marketable securities\n12,890\n\n11,135\n\n5,828\n\nPayments for acquisition of property, plant and equipment\n(\n12,715\n)\n(\n9,447\n)\n(\n10,959\n)\nOther\n(\n1,480\n)\n(\n1,308\n)\n(\n1,337\n)\nCash generated by investing activities\n15,195\n\n2,935\n\n3,705\n\nFinancing activities:\nPayments for taxes related to net share settlement of equity awards\n(\n5,960\n)\n(\n5,441\n)\n(\n5,431\n)\nPayments for dividends and dividend equivalents\n(\n15,421\n)\n(\n15,234\n)\n(\n15,025\n)\nRepurchases of common stock\n(\n90,711\n)\n(\n94,949\n)\n(\n77,550\n)\nProceeds from issuance of term debt, net\n4,481\n\n\u2014\n\n5,228\n\nRepayments of term debt\n(\n10,932\n)\n(\n9,958\n)\n(\n11,151\n)\nProceeds from/(Repayments of) commercial paper, net\n(\n2,032\n)\n3,960\n\n(\n3,978\n)\nOther\n(\n111\n)\n(\n361\n)\n(\n581\n)\nCash used in financing activities\n(\n120,686\n)\n(\n121,983\n)\n(\n108,488\n)\nIncrease/(Decrease) in cash, cash equivalents, and restricted cash and cash equivalents\n5,991\n\n(\n794\n)\n5,760\n\nCash, cash equivalents, and restricted cash and cash equivalents, ending balances\n$\n35,934\n\n$\n29,943\n\n$\n30,737\n\nSupplemental cash flow disclosure:\nCash paid for income taxes, net\n$\n43,369\n\n$\n26,102\n\n$\n18,679\n\nSee accompanying Notes to Consolidated Financial Statements.\nApple Inc. | 2025 Form 10-K | 33\nApple Inc.\nNotes to Consolidated Financial Statements\nNote 1 \u2013\nSummary of Significant Accounting Policies\nBasis of Presentation and Preparation\nThe consolidated financial statements include the accounts of Apple Inc. and its wholly owned subsidiaries. The preparation of these consolidated financial statements and accompanying notes in conformity with GAAP requires the use of management estimates. Certain prior period amounts in the notes to consolidated financial statements have been reclassified to conform to the current period\u2019s presentation.\nThe Company\u2019s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company\u2019s fiscal quarters with calendar quarters, which occurred in the first fiscal quarter of 2023. The Company\u2019s fiscal years 2025 and 2024 spanned 52 weeks each, whereas fiscal year 2023 spanned 53 weeks. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company\u2019s fiscal years ended in September and the associated quarters, months and periods of those fiscal years.\nRecently Adopted Accounting Pronouncements\nSegment Reporting\nBeginning with the 2025 annual reporting period, the Company adopted the FASB\u2019s ASU No. 2023-07,\nSegment Reporting (Topic 280): Improvements to Reportable Segment Disclosures\n(\u201cASU 2023-07\u201d), which requires the Company to disclose segment expenses that are significant and regularly provided to the Company\u2019s chief operating decision maker (\u201cCODM\u201d). In addition, ASU 2023-07 requires the Company to disclose the title and position of its CODM and how the CODM uses segment profit or loss information in assessing segment performance and deciding how to allocate resources. The Company adopted ASU 2023-07 using a retrospective transition method.\nRevenue\nThe Company records revenue net of taxes collected from customers that are remitted to governmental authorities.\nShare-Based Compensation\nThe Company recognizes share-based compensation expense on a straight-line basis for its estimate of equity awards that will ultimately vest.\nCash Equivalents\nAll highly liquid investments with maturities of three months or less at the date of purchase are treated as cash equivalents.\nTrade Receivables\nTrade receivables are stated at transaction price.\nMarketable Securities\nThe cost of securities sold is determined using the specific identification method.\nInventories\nInventories are measured using the first-in, first-out method.\nProperty, Plant and Equipment\nProperty, plant and equipment are stated at cost. Depreciation on property, plant and equipment is recognized on a straight-line basis.\nApple Inc. | 2025 Form 10-K | 34\nDerivative Instruments\nThe Company presents derivative assets and liabilities at their gross fair values in the Consolidated Balance Sheets.\nIncome Taxes\nThe Company records certain deferred tax assets and liabilities in connection with the minimum tax on certain foreign earnings created by the TCJA.\nLeases\nThe Company combines and accounts for lease and nonlease components as a single lease component for leases of corporate and retail facilities.\nNote 2 \u2013\nRevenue\nThe Company recognizes revenue at the amount to which it expects to be entitled when control of products or services is transferred to its customers. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers. For most of the Company\u2019s Products net sales, control transfers when products are shipped. For the Company\u2019s Services net sales, control transfers over time as services are delivered. Payment for Products and Services net sales is collected within a short period following transfer of control or commencement of delivery of services, as applicable.\nThe Company records reductions to Products net sales related to future product returns, price protection and other customer incentive programs based on the Company\u2019s expectations and historical experience.\nFor arrangements with multiple performance obligations, which represent promises within an arrangement that are distinct, the Company allocates revenue to all distinct performance obligations based on their relative stand-alone selling prices (\u201cSSPs\u201d). When available, the Company uses observable prices to determine SSPs. When observable prices are not available, SSPs are established that reflect the Company\u2019s best estimates of what the selling prices of the performance obligations would be if they were sold regularly on a stand-alone basis. The Company\u2019s process for estimating SSPs without observable prices considers multiple factors that may vary depending upon the unique facts and circumstances related to each performance obligation including, where applicable, prices charged by the Company for similar offerings, market trends in the pricing for similar offerings, product-specific business objectives and the estimated cost to provide the performance obligation.\nThe Company has identified the performance obligations regularly included in arrangements involving the sale of iPhone, Mac and iPad. The first material performance obligation, which represents the substantial portion of the allocated sales price, is the hardware and bundled software delivered at the time of sale. The second material performance obligation is the right to receive certain product-related bundled services, which include iCloud\n\u00ae\n, Siri\n\u00ae\n and Maps. The Company allocates revenue and any related discounts to all of its performance obligations based on their relative SSPs. Because the Company lacks observable prices for product-related bundled services, the allocation of revenue is based on the Company\u2019s estimated SSPs. Revenue allocated to the delivered hardware and bundled software is recognized when control has transferred to the customer, which generally occurs when the product is shipped. Revenue allocated to product-related bundled services is deferred and recognized on a straight-line basis over the estimated period they are expected to be provided.\nFor certain long-term service arrangements, the Company has performance obligations for services it has not yet delivered. For these arrangements, the Company does not have a right to bill for the undelivered services. The Company has determined that any unbilled consideration relates entirely to the value of the undelivered services. Accordingly, the Company has not recognized revenue, and does not disclose amounts, related to these undelivered services.\nFor the sale of third-party products where the Company obtains control of the product before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains control of third-party products, including evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product. For third-party applications sold through the App Store, the Company does not obtain control of the product before transferring it to the customer. Therefore, the Company accounts for all third-party application\u2013related sales on a net basis by recognizing in Services net sales only the commission it retains.\nApple Inc. | 2025 Form 10-K | 35\nThe following table shows disaggregated net sales, as well as the portion of total net sales that was previously deferred, for 2025, 2024 and 2023 (in millions):\n2025\n2024\n2023\niPhone\n$\n209,586\n\n$\n201,183\n\n$\n200,583\n\nMac\n33,708\n\n29,984\n\n29,357\n\niPad\n28,023\n\n26,694\n\n28,300\n\nWearables, Home and Accessories\n35,686\n\n37,005\n\n39,845\n\nServices\n(1)\n109,158\n\n96,169\n\n85,200\n\nTotal net sales\n$\n416,161\n\n$\n391,035\n\n$\n383,285\n\nPortion of total net sales that was included in deferred revenue as of the beginning of the period\n$\n8,229\n\n$\n7,728\n\n$\n8,169\n\n(1)\nServices net sales include amortization of the deferred value of services bundled in the sales price of certain products.\nThe Company\u2019s proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment in Note 13, \u201cSegment Information and Geographic Data\u201d for 2025, 2024 and 2023, except in Greater China, where iPhone revenue represented a moderately higher proportion of net sales.\nAs of September\u00a027, 2025 and September\u00a028, 2024, the Company had total deferred revenue of $\n13.7\n billion and $\n12.8\n\u00a0billion, respectively. As of September\u00a027, 2025, the Company expects\n66\n% of total deferred revenue to be realized in less than a year,\n23\n% within one-to-two years,\n9\n% within two-to-three years and\n2\n% in greater than three years.\nNote 3 \u2013\nEarnings Per Share\nThe following table shows the computation of basic and diluted earnings per share for 2025, 2024 and 2023 (net income in millions and shares in thousands):\n2025\n2024\n2023\nNumerator:\nNet income\n$\n112,010\n\n$\n93,736\n\n$\n96,995\n\nDenominator:\nWeighted-average basic shares outstanding\n14,948,500\n\n15,343,783\n\n15,744,231\n\nEffect of dilutive share-based awards\n56,197\n\n64,312\n\n68,316\n\nWeighted-average diluted shares\n15,004,697\n\n15,408,095\n\n15,812,547\n\nBasic earnings per share\n$\n7.49\n\n$\n6.11\n\n$\n6.16\n\nDiluted earnings per share\n$\n7.46\n\n$\n6.08\n\n$\n6.13\n\nApproximately\n24\n\u00a0million restricted stock units (\u201cRSUs\u201d) were excluded from the computation of diluted earnings per share for 2023 because their effect would have been antidilutive.\nApple Inc. | 2025 Form 10-K | 36\nNote 4 \u2013\nFinancial Instruments\nCash, Cash Equivalents and Marketable Securities\nThe following tables show the Company\u2019s cash, cash equivalents and marketable securities by significant investment category as of September\u00a027, 2025 and September\u00a028, 2024 (in millions):\n2025\nAdjusted\nCost\nUnrealized\nGains\nUnrealized\nLosses\nFair\nValue\nCash and\nCash\nEquivalents\nCurrent\nMarketable\nSecurities\nNon-Current\nMarketable\nSecurities\nCash\n$\n28,267\n\n$\n\u2014\n$\n\u2014\n$\n28,267\n\n$\n28,267\n\n$\n\u2014\n$\n\u2014\nLevel 1:\nMoney market funds\n5,272\n\n\u2014\n\n\u2014\n\n5,272\n\n5,272\n\n\u2014\n\n\u2014\n\nMutual funds\n679\n\n177\n\n(\n2\n)\n854\n\n\u2014\n\n854\n\n\u2014\n\nSubtotal\n5,951\n\n177\n\n(\n2\n)\n6,126\n\n5,272\n\n854\n\n\u2014\n\nLevel 2\n(1)\n:\nU.S. Treasury securities\n16,074\n\n56\n\n(\n282\n)\n15,848\n\n1,190\n\n3,712\n\n10,946\n\nU.S. agency securities\n5,269\n\n\u2014\n\n(\n149\n)\n5,120\n\n251\n\n2,456\n\n2,413\n\nNon-U.S. government securities\n6,586\n\n111\n\n(\n424\n)\n6,273\n\n\u2014\n\n855\n\n5,418\n\nCertificates of deposit and time deposits\n917\n\n\u2014\n\n\u2014\n\n917\n\n904\n\n\u2014\n\n13\n\nCommercial paper\n100\n\n\u2014\n\n\u2014\n\n100\n\n50\n\n50\n\n\u2014\n\nCorporate debt securities\n47,210\n\n266\n\n(\n916\n)\n46,560\n\n\u2014\n\n10,623\n\n35,937\n\nMunicipal securities\n207\n\n\u2014\n\n(\n2\n)\n205\n\n\u2014\n\n119\n\n86\n\nMortgage- and asset-backed securities\n24,130\n\n126\n\n(\n1,252\n)\n23,004\n\n\u2014\n\n94\n\n22,910\n\nSubtotal\n100,493\n\n559\n\n(\n3,025\n)\n98,027\n\n2,395\n\n17,909\n\n77,723\n\nTotal\n$\n134,711\n\n$\n736\n\n$\n(\n3,027\n)\n$\n132,420\n\n$\n35,934\n\n$\n18,763\n\n$\n77,723\n\n2024\nAdjusted\nCost\nUnrealized\nGains\nUnrealized\nLosses\nFair\nValue\nCash and\nCash\nEquivalents\nCurrent\nMarketable\nSecurities\nNon-Current\nMarketable\nSecurities\nCash\n$\n27,199\n\n$\n\u2014\n$\n\u2014\n$\n27,199\n\n$\n27,199\n\n$\n\u2014\n$\n\u2014\nLevel 1:\nMoney market funds\n778\n\n\u2014\n\n\u2014\n\n778\n\n778\n\n\u2014\n\n\u2014\n\nMutual funds\n515\n\n105\n\n(\n3\n)\n617\n\n\u2014\n\n617\n\n\u2014\n\nSubtotal\n1,293\n\n105\n\n(\n3\n)\n1,395\n\n778\n\n617\n\n\u2014\n\nLevel 2\n(1)\n:\nU.S. Treasury securities\n16,150\n\n45\n\n(\n516\n)\n15,679\n\n212\n\n4,087\n\n11,380\n\nU.S. agency securities\n5,431\n\n\u2014\n\n(\n272\n)\n5,159\n\n155\n\n703\n\n4,301\n\nNon-U.S. government securities\n17,959\n\n93\n\n(\n484\n)\n17,568\n\n1,158\n\n10,810\n\n5,600\n\nCertificates of deposit and time deposits\n873\n\n\u2014\n\n\u2014\n\n873\n\n387\n\n478\n\n8\n\nCommercial paper\n1,066\n\n\u2014\n\n\u2014\n\n1,066\n\n28\n\n1,038\n\n\u2014\n\nCorporate debt securities\n65,622\n\n270\n\n(\n1,953\n)\n63,939\n\n26\n\n16,027\n\n47,886\n\nMunicipal securities\n412\n\n\u2014\n\n(\n7\n)\n405\n\n\u2014\n\n190\n\n215\n\nMortgage- and asset-backed securities\n24,595\n\n175\n\n(\n1,403\n)\n23,367\n\n\u2014\n\n1,278\n\n22,089\n\nSubtotal\n132,108\n\n583\n\n(\n4,635\n)\n128,056\n\n1,966\n\n34,611\n\n91,479\n\nTotal\n(2)(3)\n$\n160,600\n\n$\n688\n\n$\n(\n4,638\n)\n$\n156,650\n\n$\n29,943\n\n$\n35,228\n\n$\n91,479\n\n(1)\nThe valuation techniques used to measure the fair values of the Company\u2019s Level 2 financial instruments, which generally have counterparties with high credit ratings, are based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data.\n(2)\nAs of September\u00a028, 2024, cash and cash equivalents included $\n2.6\n\u00a0billion held in escrow and restricted from general use. These restricted cash and cash equivalents were designated to settle the Company\u2019s obligation related to the State Aid Decision (refer to Note 7, \u201cIncome Taxes\u201d).\n(3)\nAs of September\u00a028, 2024, current marketable securities included $\n13.2\n\u00a0billion held in escrow and restricted from general use. These restricted marketable securities were designated to settle the Company\u2019s obligation related to the State Aid Decision (refer to Note 7, \u201cIncome Taxes\u201d).\nApple Inc. | 2025 Form 10-K | 37\nAs of September\u00a027, 2025,\n80\n% of the Company\u2019s non-current marketable debt securities other than mortgage- and asset-backed securities had maturities between 1 and 5 years,\n15\n% between 5 and 10 years, and\n5\n% greater than 10 years. As of September\u00a027, 2025,\n13\n% of the Company\u2019s non-current mortgage- and asset-backed securities had maturities between 1 and 5 years,\n14\n% between 5 and 10 years, and\n73\n% greater than 10 years.\nThe Company\u2019s investments in marketable debt securities have been classified and accounted for as available-for-sale. The Company classifies marketable debt securities as either current or non-current based on each instrument\u2019s underlying maturity.\nDerivative Instruments and Hedging\nThe Company may use derivative instruments to partially offset its business exposure to foreign exchange and interest rate risk. However, the Company may choose not to hedge certain exposures for a variety of reasons including accounting considerations or the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange or interest rates.\nAll derivative instruments are recorded in the Consolidated Balance Sheets at fair value. The accounting treatment for derivative gains and losses is based on intended use and hedge designation.\nGains and losses arising from amounts that are included in the assessment of cash flow hedge effectiveness are initially deferred in accumulated other comprehensive income/(loss) and subsequently reclassified into earnings when the hedged transaction affects earnings, and in the same line item in the Consolidated Statements of Operations. Gains and losses arising from amounts that are included in the assessment of fair value hedge effectiveness are recognized in the Consolidated Statements of Operations line item to which the hedge relates along with offsetting losses and gains related to the change in value of the hedged item.\nFor derivative instruments designated as cash flow and fair value hedges, amounts excluded from the assessment of hedge effectiveness are recognized on a straight-line basis over the life of the hedge in the Consolidated Statements of Operations line item to which the hedge relates. Changes in the fair value of amounts excluded from the assessment of hedge effectiveness are recognized in other comprehensive income/(loss).\nGains and losses arising from changes in the fair values of derivative instruments that are not designated as accounting hedges are recognized in the Consolidated Statements of Operations.\nThe Company classifies cash flows related to derivative instruments in the same section of the Consolidated Statements of Cash Flows as the items being hedged, which are generally classified as operating activities.\nForeign Exchange Rate Risk\nTo protect gross margins from fluctuations in foreign exchange rates, the Company may use forwards, options or other instruments, and may designate these instruments as cash flow hedges. The Company generally hedges portions of its forecasted foreign currency exposure associated with revenue and inventory purchases, typically for up to\n12\n months.\nTo protect the Company\u2019s foreign currency\u2013denominated term debt or marketable securities from fluctuations in foreign exchange rates, the Company may use forwards, cross-currency swaps or other instruments. The Company designates these instruments as either cash flow or fair value hedges. As of September\u00a027, 2025, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for term debt\u2013related foreign currency transactions is\n17\n years.\nThe Company may also use derivative instruments that are not designated as accounting hedges to protect gross margins from certain fluctuations in foreign exchange rates, as well as to offset a portion of the foreign currency gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies.\nInterest Rate Risk\nTo protect the Company\u2019s term debt or marketable securities from fluctuations in interest rates, the Company may use interest rate swaps, options or other instruments. The Company designates these instruments as either cash flow or fair value hedges.\nApple Inc. | 2025 Form 10-K | 38\nThe notional amounts of the Company\u2019s outstanding derivative instruments as of September\u00a027, 2025 and September\u00a028, 2024, were as follows (in millions):\n2025\n2024\nDerivative instruments designated as accounting hedges:\nForeign exchange contracts\n$\n62,647\n\n$\n64,069\n\nInterest rate contracts\n$\n12,875\n\n$\n14,575\n\nDerivative instruments not designated as accounting hedges:\nForeign exchange contracts\n$\n109,079\n\n$\n91,493\n\nAs of September\u00a027, 2025 and September\u00a028, 2024, the carrying amount of the Company\u2019s\ncurrent and non-current term debt\n subject to fair value hedges was $\n12.6\n billion and $\n13.5\n billion, respectively.\nAccounts Receivable\nTrade Receivables\nAs of September\u00a027, 2025, the Company had\none\n customer that represented 10% or more of total trade receivables, which accounted for\n12\n%. The Company\u2019s third-party cellular network carriers accounted for\n34\n% and\n38\n% of total trade receivables as of September\u00a027, 2025 and September\u00a028, 2024, respectively. The Company requires third-party credit support or collateral from certain customers to limit credit risk.\nVendor Non-Trade Receivables\nThe Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to these vendors who manufacture subassemblies or assemble final products for the Company. The Company purchases these components directly from suppliers. The Company does not reflect the sale of these components in products net sales. Rather, the Company recognizes any gain on these sales as a reduction of products cost of sales when the related final products are sold by the Company. As of September\u00a027, 2025, the Company had\ntwo\n vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for\n46\n% and\n23\n%. As of September\u00a028, 2024, the Company had\ntwo\n vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for\n44\n% and\n23\n%.\nNote 5 \u2013\nProperty, Plant and Equipment\nThe following table shows the Company\u2019s gross property, plant and equipment by major asset class and accumulated depreciation as of September\u00a027, 2025 and September\u00a028, 2024 (in millions):\n2025\n2024\nLand and buildings\n$\n27,337\n\n$\n24,690\n\nMachinery, equipment and internal-use software\n83,420\n\n80,205\n\nLeasehold improvements\n15,091\n\n14,233\n\nGross property, plant and equipment\n125,848\n\n119,128\n\nAccumulated depreciation\n(\n76,014\n)\n(\n73,448\n)\nTotal property, plant and equipment, net\n$\n49,834\n\n$\n45,680\n\nDepreciation expense on property, plant and equipment was $\n8.0\n billion, $\n8.2\n billion and $\n8.5\n billion during 2025, 2024 and 2023, respectively.\nApple Inc. | 2025 Form 10-K | 39\nNote 6 \u2013\nConsolidated Financial Statement Details\nThe following tables show the Company\u2019s consolidated financial statement details as of September\u00a027, 2025 and September\u00a028, 2024 (in millions):\nOther Non-Current Assets\n2025\n2024\nDeferred tax assets\n$\n20,777\n\n$\n19,499\n\nOther non-current assets\n62,950\n\n55,335\n\nTotal other non-current assets\n$\n83,727\n\n$\n74,834\n\nOther Current Liabilities\n2025\n2024\nIncome taxes payable\n$\n13,016\n\n$\n26,601\n\nAccrued distribution and marketing\n8,919\n\n7,679\n\nOther current liabilities\n44,452\n\n44,024\n\nTotal other current liabilities\n$\n66,387\n\n$\n78,304\n\nNote 7 \u2013\nIncome Taxes\nEuropean Commission State Aid Decision\nOn August 30, 2016, the Commission announced its decision that Ireland granted state aid to the Company by providing tax opinions in 1991 and 2007 concerning the tax allocation of profits of the Irish branches of\ntwo\n subsidiaries of the Company (\u201cState Aid Decision\u201d). The State Aid Decision ordered Ireland to calculate and recover additional taxes from the Company for the period June 2003 through December 2014. Irish legislative changes, effective as of January 2015, eliminated the application of the tax opinions from that date forward.\nThe Company and Ireland appealed the State Aid Decision to the General Court of the Court of Justice of the European Union (\u201cGeneral Court\u201d). On July 15, 2020, the General Court annulled the State Aid Decision. On September 25, 2020, the Commission appealed the General Court\u2019s decision to the European Court of Justice (\u201cECJ\u201d). On September 10, 2024, the ECJ announced that it had set aside the 2020 judgment of the General Court and confirmed the Commission\u2019s 2016 State Aid Decision. As a result, during the fourth quarter of 2024 the Company recorded a one-time income tax charge of $\n10.2\n\u00a0billion, net, which represented $\n15.8\n\u00a0billion payable to Ireland via release of amounts held in escrow, partially offset by a U.S. foreign tax credit of $\n4.8\n\u00a0billion and a decrease in unrecognized tax benefits of $\n823\n\u00a0million.\nProvision for Income Taxes and Effective Tax Rate\nThe provision for income taxes for 2025, 2024 and 2023, consisted of the following (in millions):\n2025\n2024\n2023\nFederal:\nCurrent\n$\n11,487\n\n$\n5,571\n\n$\n9,445\n\nDeferred\n(\n1,804\n)\n(\n3,080\n)\n(\n3,644\n)\nTotal\n9,683\n\n2,491\n\n5,801\n\nState:\nCurrent\n1,680\n\n1,726\n\n1,570\n\nDeferred\n(\n139\n)\n(\n298\n)\n(\n49\n)\nTotal\n1,541\n\n1,428\n\n1,521\n\nForeign:\nCurrent\n8,891\n\n25,483\n\n8,750\n\nDeferred\n604\n\n347\n\n669\n\nTotal\n9,495\n\n25,830\n\n9,419\n\nProvision for income taxes\n$\n20,719\n\n$\n29,749\n\n$\n16,741\n\nForeign pretax earnings were $\n82.0\n billion, $\n77.3\n billion and $\n72.9\n billion in 2025, 2024 and 2023, respectively.\nApple Inc. | 2025 Form 10-K | 40\nA reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate (\n21\n% in 2025, 2024 and 2023) to income before provision for income taxes for 2025, 2024 and 2023 is as follows (dollars in millions):\n2025\n2024\n2023\nComputed expected tax\n$\n27,873\n\n$\n25,932\n\n$\n23,885\n\nEarnings of foreign subsidiaries\n(\n8,120\n)\n(\n5,311\n)\n(\n5,744\n)\nChange in valuation allowance\n2,091\n\n\u2014\n\n\u2014\n\nResearch and development credit, net\n(\n1,049\n)\n(\n1,397\n)\n(\n1,212\n)\nImpact of the State Aid Decision\n(\n486\n)\n10,246\n\n\u2014\n\nOther\n410\n\n279\n\n(\n188\n)\nProvision for income taxes\n$\n20,719\n\n$\n29,749\n\n$\n16,741\n\nEffective tax rate\n15.6\n%\n24.1\n%\n14.7\n%\nDeferred Tax Assets and Liabilities\nAs of September\u00a027, 2025 and September\u00a028, 2024, the significant components of the Company\u2019s deferred tax assets and liabilities were as follows (in millions):\n2025\n2024\nDeferred tax assets:\nCapitalized research and development\n$\n15,041\n\n$\n10,739\n\nTax credit carryforwards\n8,643\n\n8,856\n\nAccrued liabilities and other reserves\n6,154\n\n6,114\n\nDeferred revenue\n2,953\n\n3,413\n\nLease liabilities\n2,577\n\n2,410\n\nOther\n3,049\n\n3,341\n\nTotal deferred tax assets\n38,417\n\n34,873\n\nLess: Valuation allowance\n(\n10,966\n)\n(\n8,866\n)\nTotal deferred tax assets, net\n27,451\n\n26,007\n\nDeferred tax liabilities:\nDepreciation\n3,276\n\n2,551\n\nRight-of-use assets\n2,300\n\n2,125\n\nMinimum tax on foreign earnings\n1,217\n\n1,674\n\nOther\n678\n\n455\n\nTotal deferred tax liabilities\n7,471\n\n6,805\n\nNet deferred tax assets\n$\n19,980\n\n$\n19,202\n\nAs of September\u00a027, 2025, the Company had $\n4.7\n\u00a0billion in foreign tax credit carryforwards in Ireland and $\n4.0\n\u00a0billion in California R&D credit carryforwards, both of which can be carried forward indefinitely. A valuation allowance has been recorded for the credit carryforwards and a portion of other temporary differences.\nApple Inc. | 2025 Form 10-K | 41\nUncertain Tax Positions\nAs of September\u00a027, 2025, the total amount of gross unrecognized tax benefits was $\n23.2\n billion, of which $\n10.6\n billion, if recognized, would impact the Company\u2019s effective tax rate. As of September\u00a028, 2024, the total amount of gross unrecognized tax benefits was $\n22.0\n billion, of which $\n10.8\n billion, if recognized, would have impacted the Company\u2019s effective tax rate.\nThe aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for 2025, 2024 and 2023 is as follows (in millions):\n2025\n2024\n2023\nBeginning balances\n$\n22,038\n\n$\n19,454\n\n$\n16,758\n\nIncreases related to tax positions taken during a prior year\n1,971\n\n1,727\n\n2,044\n\nDecreases related to tax positions taken during a prior year\n(\n71\n)\n(\n386\n)\n(\n1,463\n)\nIncreases related to tax positions taken during the current year\n3,795\n\n2,542\n\n2,628\n\nDecreases related to settlements with taxing authorities\n(\n2,939\n)\n(\n1,070\n)\n(\n19\n)\nDecreases related to expiration of the statute of limitations\n(\n1,552\n)\n(\n229\n)\n(\n494\n)\nEnding balances\n$\n23,242\n\n$\n22,038\n\n$\n19,454\n\nThe Company is subject to taxation and files income tax returns in the U.S. federal jurisdiction and many state and foreign jurisd\nictions. Tax years 2018 and after 2021 for the U.S. federal jurisdiction, and after 2014 in certain major foreign jurisdictions, remain subject to examination. Altho\nugh the timing of resolution or closure of examinations is not certain, the Company\nbelieves it is reasonably possible that its gross unrecognized tax benefits could decrease as much as $\n6\n\u00a0billion in the next 12 months.\nNote 8 \u2013\nLeases\nThe Company has lease arrangements for certain equipment and facilities, including corporate, data center, manufacturing and retail space. These leases typically have original terms not exceeding\n10\n years and generally contain multiyear renewal options, some of which are reasonably certain of exercise.\nPayments under the Company\u2019s lease arrangements may be fixed or variable, and variable lease payments are primarily based on purchases of output of the underlying leased assets. Lease costs associated with fixed payments on the Company\u2019s operating leases were $\n2.1\n billion for 2025 and $\n2.0\n billion for both 2024 and 2023. Lease costs associated with variable payments on the Company\u2019s leases were $\n16.1\n billion, $\n13.8\n billion and $\n13.9\n billion for 2025, 2024 and 2023, respectively.\nThe Company made fixed cash payments related to operating leases of $\n2.1\n billion in 2025 and $\n1.9\n billion in both 2024 and 2023. Noncash activities involving right-of-use (\u201cROU\u201d) assets obtained in exchange for lease liabilities were $\n2.8\n billion, $\n1.0\n billion and $\n2.1\n billion for 2025, 2024 and 2023, respectively.\nThe following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of September\u00a027, 2025 and September\u00a028, 2024 (in millions):\nLease-Related Assets and Liabilities\nFinancial Statement Line Items\n2025\n2024\nRight-of-use assets:\nOperating leases\nOther non-current assets\n$\n11,205\n\n$\n10,234\n\nFinance leases\nProperty, plant and equipment, net\n1,033\n\n1,069\n\nTotal right-of-use assets\n$\n12,238\n\n$\n11,303\n\nLease liabilities:\nOperating leases\nOther current liabilities\n$\n1,579\n\n$\n1,488\n\nOther non-current liabilities\n10,911\n\n10,046\n\nFinance leases\nOther current liabilities\n538\n\n144\n\nOther non-current liabilities\n692\n\n752\n\nTotal lease liabilities\n$\n13,720\n\n$\n12,430\n\nApple Inc. | 2025 Form 10-K | 42\nLease liability maturities as of September\u00a027, 2025, are as follows (in millions):\nOperating\nLeases\nFinance\nLeases\nTotal\n2026\n$\n1,967\n\n$\n563\n\n$\n2,530\n\n2027\n1,988\n\n73\n\n2,061\n\n2028\n1,848\n\n51\n\n1,899\n\n2029\n1,585\n\n48\n\n1,633\n\n2030\n1,381\n\n43\n\n1,424\n\nThereafter\n5,956\n\n801\n\n6,757\n\nTotal undiscounted liabilities\n14,725\n\n1,579\n\n16,304\n\nLess: Imputed interest\n(\n2,235\n)\n(\n349\n)\n(\n2,584\n)\nTotal lease liabilities\n$\n12,490\n\n$\n1,230\n\n$\n13,720\n\nThe weighted-average remaining lease term related to the Company\u2019s lease liabilities as of September\u00a027, 2025 and September\u00a028, 2024 was\n9.8\n years and\n10.3\n years, respectively. The discount rate related to the Company\u2019s lease liabilities as of September\u00a027, 2025 and September\u00a028, 2024 was\n3.4\n% and\n3.1\n%, respectively.\nThe discount rates related to the Company\u2019s lease liabilities are generally based on estimates of the Company\u2019s incremental borrowing rate, as the discount rates implicit in the Company\u2019s leases cannot be readily determined.\nAs of September\u00a027, 2025, the Company had $\n523\n million of fixed payment obligations under additional leases, primarily for corporate facilities and retail space, that had not yet commenced. These leases are expected to commence between 2026 and 2027, with lease terms ranging from\n1\n year to\n21\n years.\nNote 9 \u2013\nDebt\nCommercial Paper\nThe Company issues unsecured short-term promissory notes pursuant to a commercial paper program. The Company uses net proceeds from the commercial paper program for general corporate purposes, including dividends and share repurchases. As of September\u00a027, 2025 and September\u00a028, 2024, the Company had $\n8.0\n billion and $\n10.0\n billion of commercial paper outstanding, respectively, with maturities generally less than\nnine months\n. The weighted-average interest rate of the Company\u2019s commercial paper was\n4.19\n% and\n5.00\n% as of September\u00a027, 2025 and September\u00a028, 2024, respectively.\nThe following table provides a summary of cash flows associated with commercial paper for 2025, 2024 and 2023 (in millions):\n2025\n2024\n2023\nMaturities 90 days or less:\nProceeds from/(Repayments of) commercial paper, net\n$\n(\n5,820\n)\n$\n3,960\n\n$\n(\n1,333\n)\nMaturities greater than 90 days:\nProceeds from commercial paper\n5,836\n\n\u2014\n\n\u2014\n\nRepayments of commercial paper\n(\n2,048\n)\n\u2014\n\n(\n2,645\n)\nProceeds from/(Repayments of) commercial paper, net\n3,788\n\n\u2014\n\n(\n2,645\n)\nTotal proceeds from/(repayments of) commercial paper, net\n$\n(\n2,032\n)\n$\n3,960\n\n$\n(\n3,978\n)\nApple Inc. | 2025 Form 10-K | 43\nTerm Debt\nThe Company has outstanding Notes, which are senior unsecured obligations with interest payable in arrears.\nThe following table provides a summary of the Company\u2019s term debt as of September\u00a027, 2025 and September\u00a028, 2024:\nMaturities\n(calendar year)\n2025\n2024\nAmount\n(in millions)\nEffective\nInterest Rate\nAmount\n(in millions)\nEffective\nInterest Rate\n2013 \u2013 2023 debt issuances:\nFixed-rate\n0.000\n% \u2013\n4.850\n% notes\n2025\n \u2013\n2062\n$\n86,781\n\n0.03\n% \u2013\n5.75\n%\n$\n97,341\n\n0.03\n% \u2013\n6.65\n%\n2025 debt issuance:\nFixed-rate\n4.000\n% \u2013\n4.750\n% notes\n2028\n \u2013\n2035\n4,500\n\n4.07\n% \u2013\n4.83\n%\n\u2014\nTotal term debt principal\n91,281\n\n97,341\n\nUnamortized premium/(discount) and issuance costs, net\n(\n309\n)\n(\n321\n)\nHedge accounting fair value adjustments\n(\n294\n)\n(\n358\n)\nTotal term debt\n90,678\n\n96,662\n\nLess: Current portion of term debt\n(\n12,350\n)\n(\n10,912\n)\nTotal non-current portion of term debt\n$\n78,328\n\n$\n85,750\n\nTo manage interest rate risk on certain of its U.S. dollar\u2013denominated fixed-rate notes, the Company uses interest rate swaps to effectively convert the fixed interest rates to floating interest rates on a portion of these notes. Additionally, to manage foreign exchange rate risk on certain of its foreign currency\u2013denominated notes, the Company uses cross-currency swaps to effectively convert these notes to U.S. dollar\u2013denominated notes.\nThe effective interest rates for the Notes include the interest on the Notes, amortization of the discount or premium and, if applicable, adjustments related to hedging.\nThe future principal payments for the Company\u2019s Notes as of September\u00a027, 2025, are as follows (in millions):\n2026\n$\n12,393\n\n2027\n10,078\n\n2028\n9,300\n\n2029\n5,235\n\n2030\n4,972\n\nThereafter\n49,303\n\nTotal term debt principal\n$\n91,281\n\nAs of September\u00a027, 2025 and September\u00a028, 2024, the fair value of the Company\u2019s Notes, based on Level 2 inputs, was $\n80.4\n billion and $\n88.4\n billion, respectively.\nNote 10 \u2013\nShareholders\u2019 Equity\nShare Repurchase Program\nDuring 2025, the Company repurchased\n402\n million shares of its common stock for $\n89.3\n billion. The Company\u2019s share repurchase programs do not obligate the Company to acquire a minimum amount of shares. Under the programs, shares may be repurchased in privately negotiated or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.\nApple Inc. | 2025 Form 10-K | 44\nShares of Common Stock\nThe following table shows the changes in shares of common stock for 2025, 2024 and 2023 (in thousands):\n2025\n2024\n2023\nCommon stock outstanding, beginning balances\n15,116,786\n\n15,550,061\n\n15,943,425\n\nCommon stock repurchased\n(\n401,672\n)\n(\n499,372\n)\n(\n471,419\n)\nCommon stock issued, net of shares withheld for employee taxes\n58,146\n\n66,097\n\n78,055\n\nCommon stock outstanding, ending balances\n14,773,260\n\n15,116,786\n\n15,550,061\n\nNote 11 \u2013\nShare-Based Compensation\n2022 Employee Stock Plan\nThe Apple Inc. 2022 Employee Stock Plan (\u201c2022 Plan\u201d) is a shareholder-approved plan that provides for broad-based equity grants to employees, including executive officers, and permits the granting of RSUs, stock grants, performance-based awards, stock options and stock appreciation rights. RSUs granted under the 2022 Plan generally vest over\nfour years\n, based on continued employment, and are settled upon vesting in shares of the Company\u2019s common stock on a\none\n-for-one basis. All RSUs granted under the 2022 Plan have dividend equivalent rights, which entitle holders of RSUs to the same dividend value per share as holders of common stock. A maximum of approximately\n1.3\n billion shares were authorized for issuance pursuant to 2022 Plan awards at the time the plan was approved on March 4, 2022.\nRestricted Stock Units\nA summary of the Company\u2019s RSU activity and related information for 2025 is as follows:\nNumber of\nRSUs\n(in thousands)\nWeighted-Average\nGrant-Date Fair\nValue Per RSU\nBalance as of September 28, 2024\n163,326\n\n$\n158.73\n\nRSUs granted\n73,466\n\n$\n226.68\n\nRSUs vested\n(\n76,845\n)\n$\n159.85\n\nRSUs forfeited\n(\n8,373\n)\n$\n183.03\n\nBalance as of September 27, 2025\n151,574\n\n$\n189.75\n\nThe weighted-average grant-date fair value of RSUs granted in 2024 and 2023 was $\n173.78\n and $\n150.87\n, respectively.\nThe Company estimates the grant-date fair value of RSUs based on the closing price of the Company\u2019s common stock on the date of grant.\nThe total vesting-date fair value of RSUs was $\n17.1\n billion, $\n15.8\n billion and $\n15.9\n billion for 2025, 2024 and 2023, respectively. The majority of RSUs that vested in 2025, 2024 and 2023 were net share settled such that the Company withheld shares with a value equivalent to the employees\u2019 obligation for the applicable income and other employment taxes, and remitted cash to the appropriate taxing authorities. Total payments to taxing authorities for employees\u2019 tax obligations were $\n6.1\n billion in 2025 and $\n5.6\n billion in both 2024 and 2023.\nShare-Based Compensation\nThe following table shows share-based compensation expense and the related income tax benefit included in the Consolidated Statements of Operations for 2025, 2024 and 2023 (in millions):\n2025\n2024\n2023\nShare-based compensation expense\n$\n12,863\n\n$\n11,688\n\n$\n10,833\n\nIncome tax benefit related to share-based compensation expense\n$\n(\n3,602\n)\n$\n(\n3,350\n)\n$\n(\n3,421\n)\nAs of September\u00a027, 2025, the total unrecognized compensation cost related to outstanding RSUs was $\n21.8\n billion, which the Company expects to recognize over a weighted-average period of\n2.5\n years.\nApple Inc. | 2025 Form 10-K | 45\nNote 12 \u2013\nCommitments, Contingencies and Supply Concentrations\nUnconditional Purchase Obligations\nThe Company has entered into certain off\u2013balance sheet commitments that require the future purchase of goods or services (\u201cunconditional purchase obligations\u201d). The Company\u2019s unconditional purchase obligations primarily consist of supplier arrangements, licensed intellectual property and content, and distribution rights.\nFuture payments under unconditional purchase obligations with a remaining term in excess of one year as of September\u00a027, 2025, are as follows (in millions):\n2026\n$\n4,752\n\n2027\n3,708\n\n2028\n1,981\n\n2029\n1,306\n\n2030\n788\n\nThereafter\n773\n\nTotal\n$\n13,308\n\nContingencies\nThe Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully resolved. The outcome of litigation is inherently uncertain. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims.\nConcentrations in the Available Sources of Supply of Materials and Product\nAlthough most components essential to the Company\u2019s business are generally available from multiple sources, certain components are currently obtained from single or limited sources. The Company also competes for various components with other participants in the markets for smartphones, personal computers, tablets, wearables and accessories. Therefore, many components used by the Company, including those that are available from multiple sources, are at times subject to industry-wide shortage and significant commodity pricing fluctuations. Restrictions on international trade can increase the cost or limit the availability of the Company\u2019s products and the components and rare earths and other raw materials that go into them.\nThe Company uses some custom components that are not commonly used by its competitors, and new products introduced by the Company often utilize custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the suppliers\u2019 yields have matured or their manufacturing capacities have increased. The Company has entered into agreements for the supply of many components; however, the Company may not be able to extend or renew agreements for the supply of components on similar terms, or at all, and may not be successful in obtaining sufficient quantities from its suppliers or in a timely manner, or in identifying and obtaining sufficient quantities from an alternative source. In addition, component suppliers may fail, be subject to consolidation within a particular industry, or decide to concentrate on the production of common components instead of components customized to meet the Company\u2019s requirements, further limiting the Company\u2019s ability to obtain sufficient quantities of components on commercially reasonable terms, or at all.\nSubstantially all of the Company\u2019s hardware products are manufactured by outsourcing partners that are located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam.\nApple Inc. | 2025 Form 10-K | 46\nNote 13 \u2013\nSegment Information and Geographic Data\nThe Company manages its business primarily on a geographic basis. The Company\u2019s CEO is its CODM.\nThe Company\u2019s reportable segments consist of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific. Americas includes both North and South America. Europe includes European countries, as well as India, the Middle East and Africa. Greater China includes China mainland, Hong Kong and Taiwan. Rest of Asia Pacific includes Australia, New Zealand and those Asian countries not included in the Company\u2019s other reportable segments. Although the reportable segments provide similar hardware and software products and similar services, each one is managed separately to better align with the location of the Company\u2019s customers and distribution partners and the unique market dynamics of each geographic region.\nThe CODM uses segment net sales and operating income information to make certain decisions, such as product and service pricing, and to decide how to allocate resources related to sales activities and marketing investments. Net sales for geographic segments are generally based on the location of customers and sales through the Company\u2019s retail stores located in those geographic locations. Operating income for each segment consists of net sales to third parties, related cost of sales, and operating expenses directly attributable to the segment. The information provided to the CODM for purposes of making decisions and assessing segment performance excludes asset information.\nThe following tables show information by reportable segment for 2025, 2024 and 2023 (in millions):\n2025\nAmericas\nEurope\nGreater\nChina\nJapan\nRest of\nAsia Pacific\nCorporate\nTotal\nNet sales\n$\n178,353\n\n$\n111,032\n\n$\n64,377\n\n$\n28,703\n\n$\n33,696\n\n$\n\u2014\n$\n416,161\n\nCost of sales\n(\n95,699\n)\n(\n58,617\n)\n(\n35,141\n)\n(\n13,779\n)\n(\n17,724\n)\n\u2014\n(\n220,960\n)\nResearch and development\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(\n34,550\n)\n(\n34,550\n)\nSelling and marketing\n(\n10,174\n)\n(\n4,676\n)\n(\n2,319\n)\n(\n969\n)\n(\n1,386\n)\n\u2014\n(\n19,524\n)\nGeneral and administrative\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(\n8,077\n)\n(\n8,077\n)\nOperating income/(loss)\n$\n72,480\n\n$\n47,739\n\n$\n26,917\n\n$\n13,955\n\n$\n14,586\n\n$\n(\n42,627\n)\n$\n133,050\n\n2024\nAmericas\nEurope\nGreater\nChina\nJapan\nRest of\nAsia Pacific\nCorporate\nTotal\nNet sales\n$\n167,045\n\n$\n101,328\n\n$\n66,952\n\n$\n25,052\n\n$\n30,658\n\n$\n\u2014\n$\n391,035\n\nCost of sales\n(\n89,587\n)\n(\n55,197\n)\n(\n37,519\n)\n(\n11,744\n)\n(\n16,305\n)\n\u2014\n(\n210,352\n)\nResearch and development\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(\n31,370\n)\n(\n31,370\n)\nSelling and marketing\n(\n9,802\n)\n(\n4,341\n)\n(\n2,351\n)\n(\n854\n)\n(\n1,291\n)\n\u2014\n(\n18,639\n)\nGeneral and administrative\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(\n7,458\n)\n(\n7,458\n)\nOperating income/(loss)\n$\n67,656\n\n$\n41,790\n\n$\n27,082\n\n$\n12,454\n\n$\n13,062\n\n$\n(\n38,828\n)\n$\n123,216\n\n2023\nAmericas\nEurope\nGreater\nChina\nJapan\nRest of\nAsia Pacific\nCorporate\nTotal\nNet sales\n$\n162,560\n\n$\n94,294\n\n$\n72,559\n\n$\n24,257\n\n$\n29,615\n\n$\n\u2014\n$\n383,285\n\nCost of sales\n(\n92,394\n)\n(\n54,101\n)\n(\n39,787\n)\n(\n11,542\n)\n(\n16,313\n)\n\u2014\n(\n214,137\n)\nResearch and development\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(\n29,915\n)\n(\n29,915\n)\nSelling and marketing\n(\n9,658\n)\n(\n4,095\n)\n(\n2,444\n)\n(\n827\n)\n(\n1,236\n)\n\u2014\n(\n18,260\n)\nGeneral and administrative\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(\n6,672\n)\n(\n6,672\n)\nOperating income/(loss)\n$\n60,508\n\n$\n36,098\n\n$\n30,328\n\n$\n11,888\n\n$\n12,066\n\n$\n(\n36,587\n)\n$\n114,301\n\nApple Inc. | 2025 Form 10-K | 47\nThe following tables show net sales for 2025, 2024 and 2023 and long-lived assets as of September\u00a027, 2025 and September\u00a028, 2024 for countries that individually accounted for 10% or more of the respective totals, as well as aggregate amounts for the remaining countries (in millions):\n2025\n2024\n2023\nNet sales:\nU.S.\n$\n151,790\n\n$\n142,196\n\n$\n138,573\n\nChina\n (1)\n64,377\n\n66,952\n\n72,559\n\nOther countries\n199,994\n\n181,887\n\n172,153\n\nTotal net sales\n$\n416,161\n\n$\n391,035\n\n$\n383,285\n\n2025\n2024\nLong-lived assets:\nU.S.\n$\n40,274\n\n$\n35,664\n\nChina\n(1)\n3,617\n\n4,797\n\nOther countries\n5,943\n\n5,219\n\nTotal long-lived assets\n$\n49,834\n\n$\n45,680\n\n(1)\nChina includes Hong Kong and Taiwan.\nApple Inc. | 2025 Form 10-K | 48\nReport of Independent Registered Public Accounting Firm\nTo the Shareholders and the Board of Directors of Apple Inc.\nOpinion on the Financial Statements\nWe have audited the accompanying consolidated balance sheets of Apple Inc. (the \u201cCompany\u201d) as of September\u00a027, 2025 and September\u00a028, 2024, the related consolidated statements of operations, comprehensive income, shareholders\u2019 equity and cash flows for each of the three years in the period ended September\u00a027, 2025, and the related notes (collectively referred to as the \u201cfinancial statements\u201d). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at September\u00a027, 2025 and September\u00a028, 2024, and the results of its operations and its cash flows for each of the three years in the period ended September\u00a027, 2025, in conformity with U.S. generally accepted accounting principles (\u201cGAAP\u201d).\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (\u201cPCAOB\u201d), the Company\u2019s internal control over financial reporting as of September\u00a027, 2025, based on criteria established in\n Internal Control \u2013 Integrated Framework\n issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated October\u00a031, 2025 expressed an unqualified opinion thereon.\nBasis for Opinion\nThese financial statements are the responsibility of the Company\u2019s management. Our responsibility is to express an opinion on the Company\u2019s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\nCritical Audit Matter\nThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1)\u00a0relates to accounts or disclosures that are material to the financial statements and (2)\u00a0involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.\nUncertain Tax Positions\nDescription of the Matter\nAs discussed in Note 7 to the financial statements, the Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. As of September\u00a027, 2025, the total amount of gross unrecognized tax benefits was $23.2 billion, of which $10.6 billion, if recognized, would impact the Company\u2019s effective tax rate. In accounting for some of the uncertain tax positions, the Company uses significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws.\nAuditing management\u2019s evaluation of whether an uncertain tax position is more likely than not to be sustained and the measurement of the benefit of various tax positions can be complex, involves significant judgment, and is based on interpretations of tax laws.\nApple Inc. | 2025 Form 10-K | 49\nHow We Addressed the\nMatter in Our Audit\nWe tested controls relating to the evaluation of uncertain tax positions, including controls over management\u2019s assessment as to whether tax positions are more likely than not to be sustained, management\u2019s process to measure the benefit of its tax positions that qualify for recognition, and the related disclosures.\nWe evaluated the Company\u2019s assessment of which tax positions are more likely than not to be sustained and the related measurement of the amount of tax benefit that qualifies for recognition. Our audit procedures included, among others, reading and evaluating management\u2019s assumptions and analysis, and, as applicable, the Company\u2019s communications with taxing authorities, that detailed the basis and technical merits of the uncertain tax positions. We involved our tax subject matter resources in assessing the technical merits of certain of the Company\u2019s tax positions based on our knowledge of relevant tax laws and experience with related taxing authorities. In addition, we evaluated the Company\u2019s disclosure in relation to these matters included in Note 7 to the financial statements.\n/s/\nErnst & Young LLP\nWe have served as the Company\u2019s auditor since 2009.\nSan Jose, California\nOctober\u00a031, 2025\nApple Inc. | 2025 Form 10-K | 50\nReport of Independent Registered Public Accounting Firm\nTo the Shareholders and the Board of Directors of Apple Inc.\nOpinion on Internal Control Over Financial Reporting\nWe have audited Apple Inc.\u2019s internal control over financial reporting as of September\u00a027, 2025, based on criteria established in\nInternal Control \u2013 Integrated Framework\n issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the \u201cCOSO criteria\u201d). In our opinion, Apple Inc. (the \u201cCompany\u201d) maintained, in all material respects, effective internal control over financial reporting as of September\u00a027, 2025, based on the COSO criteria.\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (\u201cPCAOB\u201d), the consolidated balance sheets of the Company as of September\u00a027, 2025 and September\u00a028, 2024, the related consolidated statements of operations, comprehensive income, shareholders\u2019 equity and cash flows for each of the three years in the period ended September\u00a027, 2025, and the related notes and our report dated October\u00a031, 2025 expressed an unqualified opinion thereon.\nBasis for Opinion\nThe Company\u2019s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management\u2019s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company\u2019s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.\nOur audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\nDefinition and Limitations of Internal Control Over Financial Reporting\nA company\u2019s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company\u2019s internal control over financial reporting includes those policies and procedures that (1)\u00a0pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)\u00a0provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3)\u00a0provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company\u2019s assets that could have a material effect on the financial statements.\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n/s/ Ernst & Young LLP\nSan Jose, California\nOctober\u00a031, 2025\nApple Inc. | 2025 Form 10-K | 51\nItem 9.\u00a0\u00a0\u00a0\u00a0Changes in and Disagreements with Accountants on Accounting and Financial Disclosure\nNone.\nItem 9A.\u00a0\u00a0\u00a0\u00a0Controls and Procedures\nEvaluation of Disclosure Controls and Procedures\nBased on an evaluation under the supervision and with the participation of the Company\u2019s management, the Company\u2019s principal executive officer and principal financial officer have concluded that the Company\u2019s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of September\u00a027, 2025 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i)\u00a0recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii)\u00a0accumulated and communicated to the Company\u2019s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.\nInherent Limitations over Internal Controls\nThe Company\u2019s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company\u2019s internal control over financial reporting includes those policies and procedures that:\n(i)\npertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company\u2019s assets;\n(ii)\nprovide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company\u2019s receipts and expenditures are being made only in accordance with authorizations of the Company\u2019s management and directors; and\n(iii)\nprovide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company\u2019s assets that could have a material effect on the financial statements.\nManagement, including the Company\u2019s Chief Executive Officer and Chief Financial Officer, does not expect that the Company\u2019s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.\nManagement\u2019s Annual Report on Internal Control over Financial Reporting\nThe Company\u2019s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of the Company\u2019s internal control over financial reporting based on the criteria set forth in Internal Control \u2013 Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on the Company\u2019s assessment, management has concluded that its internal control over financial reporting was effective as of September\u00a027, 2025 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. The Company\u2019s independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on the Company\u2019s internal control over financial reporting, which appears in Part II, Item 8 of this Form 10-K.\nChanges in Internal Control over Financial Reporting\nThere were no changes in the Company\u2019s internal control over financial reporting during the fourth quarter of 2025, which were identified in connection with management\u2019s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company\u2019s internal control over financial reporting.\nApple Inc. | 2025 Form 10-K | 52\nItem 9B.\u00a0\u00a0\u00a0\u00a0Other Information\nOn October 31, 2025, the Company announced that Chris Kondo, Senior Director of Corporate Accounting and Principal Accounting Officer, will transition from his role on January 1, 2026. Following the transition, Mr. Kondo will continue to work on other projects. Ben Borders, the Company\u2019s Director of Technical Accounting, will become Senior Director of Corporate Accounting and assume the role of Principal Accounting Officer. Mr. Borders will report to Kevan Parekh, the Company\u2019s Chief Financial Officer.\nInsider Trading Arrangements\nNone.\nItem 9C.\u00a0\u00a0\u00a0\u00a0Disclosure Regarding Foreign Jurisdictions that Prevent Inspections\nNot applicable.\nPART III\nItem 10.\u00a0\u00a0\u00a0\u00a0Directors, Executive Officers and Corporate Governance\nThe information required by this Item will be included in the Company\u2019s definitive proxy statement to be filed with the SEC within 120 days after September\u00a027, 2025, in connection with the solicitation of proxies for the Company\u2019s 2026 annual meeting of shareholders (\u201c2026 Proxy Statement\u201d), and is incorporated herein by reference.\nItem 11.\u00a0\u00a0\u00a0\u00a0Executive Compensation\nThe information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.\nItem 12.\u00a0\u00a0\u00a0\u00a0Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters\nThe information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.\nItem 13.\u00a0\u00a0\u00a0\u00a0Certain Relationships and Related Transactions, and Director Independence\nThe information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.\nItem 14.\u00a0\u00a0\u00a0\u00a0Principal Accountant Fees and Services\nThe information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.\nApple Inc. | 2025 Form 10-K | 53\nPART IV\nItem 15.\u00a0\u00a0\u00a0\u00a0Exhibit and Financial Statement Schedules\n(a)\nDocuments filed as part of this report\n(1)\nAll financial statements\nIndex to Consolidated Financial Statements\nPage\nConsolidated Statements of Operations for the years ended September 27, 2025, September 28, 2024 and September 30, 2023\n29\nConsolidated Statements of Comprehensive Income for the years ended September 27, 2025, September 28, 2024 and September 30, 2023\n30\nConsolidated Balance Sheets as of September 27, 2025 and September 28, 2024\n31\nConsolidated Statements of Shareholders\u2019 Equity for the years ended September 27, 2025, September 28, 2024 and September 30, 2023\n32\nConsolidated Statements of Cash Flows for the years ended September 27, 2025, September 28, 2024 and September 30, 2023\n33\nNotes to Consolidated Financial Statements\n34\nReports of Independent Registered Public Accounting Firm*\n49\n*\nErnst & Young LLP, PCAOB Firm ID No. 000\n42\n.\n(2)\nFinancial Statement Schedules\nAll financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes included in this Form 10-K.\n(3)\nExhibits required by Item 601 of Regulation S-K\n(1)\nIncorporated by Reference\nExhibit Number\nExhibit Description\nForm\nExhibit\nFiling Date/\nPeriod End Date\n3.1\nRestated Articles of Incorporation of the Registrant filed on August 3, 2020.\n8-K\n3.1\n8/7/20\n3.2\nAmended and Restated Bylaws of the Registrant effective as of August 20, 2024.\n8-K\n3.2\n8/23/24\n4.1**\nDescription of Securities of the Registrant.\n4.2\nIndenture, dated as of April 29, 2013, between the Registrant and The Bank of New York Mellon Trust Company, N.A., as Trustee.\nS-3\n4.1\n4/29/13\n4.3\nOfficer\u2019s Certificate of the Registrant, dated as of May 3, 2013, including forms of global notes representing the Floating Rate Notes due 2016, Floating Rate Notes due 2018, 0.45% Notes due 2016, 1.00% Notes due 2018, 2.40% Notes due 2023 and 3.85% Notes due 2043.\n8-K\n4.1\n5/3/13\n4.4\nOfficer\u2019s Certificate of the Registrant, dated as of May 6, 2014, including forms of global notes representing the Floating Rate Notes due 2017, Floating Rate Notes due 2019, 1.05% Notes due 2017, 2.10% Notes due 2019, 2.85% Notes due 2021, 3.45% Notes due 2024 and 4.45% Notes due 2044.\n8-K\n4.1\n5/6/14\n4.5\nOfficer\u2019s Certificate of the Registrant, dated as of November 10, 2014, including forms of global notes representing the 1.000% Notes due 2022 and 1.625% Notes due 2026.\n8-K\n4.1\n11/10/14\n4.6\nOfficer\u2019s Certificate of the Registrant, dated as of February 9, 2015, including forms of global notes representing the Floating Rate Notes due 2020, 1.55% Notes due 2020, 2.15% Notes due 2022, 2.50% Notes due 2025 and 3.45% Notes due 2045.\n8-K\n4.1\n2/9/15\n4.7\nOfficer\u2019s Certificate of the Registrant, dated as of May 13, 2015, including forms of global notes representing the Floating Rate Notes due 2017, Floating Rate Notes due 2020, 0.900% Notes due 2017, 2.000% Notes due 2020, 2.700% Notes due 2022, 3.200% Notes due 2025, and 4.375% Notes due 2045.\n8-K\n4.1\n5/13/15\n4.8\nOfficer\u2019s Certificate of the Registrant, dated as of July 31, 2015, including forms of global notes representing the 3.05% Notes due 2029 and 3.60% Notes due 2042.\n8-K\n4.1\n7/31/15\nApple Inc. | 2025 Form 10-K | 54\nIncorporated by Reference\nExhibit Number\nExhibit Description\nForm\nExhibit\nFiling Date/\nPeriod End Date\n4.9\nOfficer\u2019s Certificate of the Registrant, dated as of September 17, 2015, including forms of global notes representing the 1.375% Notes due 2024 and 2.000% Notes due 2027.\n8-K\n4.1\n9/17/15\n4.10\nOfficer\u2019s Certificate of the Registrant, dated as of February 23, 2016, including forms of global notes representing the Floating Rate Notes due 2019, Floating Rate Notes due 2021, 1.300% Notes due 2018, 1.700% Notes due 2019, 2.250% Notes due 2021, 2.850% Notes due 2023, 3.250% Notes due 2026, 4.500% Notes due 2036 and 4.650% Notes due 2046.\n8-K\n4.1\n2/23/16\n4.11\nSupplement No. 1 to the Officer\u2019s Certificate of the Registrant, dated as of March 24, 2016.\n8-K\n4.1\n3/24/16\n4.12\nOfficer\u2019s Certificate of the Registrant, dated as of August 4, 2016, including forms of global notes representing the Floating Rate Notes due 2019, 1.100% Notes due 2019, 1.550% Notes due 2021, 2.450% Notes due 2026 and 3.850% Notes due 2046.\n8-K\n4.1\n8/4/16\n4.13\nOfficer\u2019s Certificate of the Registrant, dated as of February 9, 2017, including forms of global notes representing the Floating Rate Notes due 2019, Floating Rate Notes due 2020, Floating Rate Notes due 2022, 1.550% Notes due 2019, 1.900% Notes due 2020, 2.500% Notes due 2022, 3.000% Notes due 2024, 3.350% Notes due 2027 and 4.250% Notes due 2047.\n8-K\n4.1\n2/9/17\n4.14\nOfficer\u2019s Certificate of the Registrant, dated as of May 11, 2017, including forms of global notes representing the Floating Rate Notes due 2020, Floating Rate Notes due 2022, 1.800% Notes due 2020, 2.300% Notes due 2022, 2.850% Notes due 2024 and 3.200% Notes due 2027.\n8-K\n4.1\n5/11/17\n4.15\nOfficer\u2019s Certificate of the Registrant, dated as of May 24, 2017, including forms of global notes representing the 0.875% Notes due 2025 and 1.375% Notes due 2029.\n8-K\n4.1\n5/24/17\n4.16\nOfficer\u2019s Certificate of the Registrant, dated as of June 20, 2017, including form of global note representing the 3.000% Notes due 2027.\n8-K\n4.1\n6/20/17\n4.17\nOfficer\u2019s Certificate of the Registrant, dated as of September 12, 2017, including forms of global notes representing the 1.500% Notes due 2019, 2.100% Notes due 2022, 2.900% Notes due 2027 and 3.750% Notes due 2047.\n8-K\n4.1\n9/12/17\n4.18\nOfficer\u2019s Certificate of the Registrant, dated as of November 13, 2017, including forms of global notes representing the 1.800% Notes due 2019, 2.000% Notes due 2020, 2.400% Notes due 2023, 2.750% Notes due 2025, 3.000% Notes due 2027 and 3.750% Notes due 2047.\n8-K\n4.1\n11/13/17\n4.19\nIndenture, dated as of November 5, 2018, between the Registrant and The Bank of New York Mellon Trust Company, N.A., as Trustee.\nS-3\n4.1\n11/5/18\n4.20\nOfficer\u2019s Certificate of the Registrant, dated as of September 11, 2019, including forms of global notes representing the 1.700% Notes due 2022, 1.800% Notes due 2024, 2.050% Notes due 2026, 2.200% Notes due 2029 and 2.950% Notes due 2049.\n8-K\n4.1\n9/11/19\n4.21\nOfficer\u2019s Certificate of the Registrant, dated as of November 15, 2019, including forms of global notes representing the 0.000% Notes due 2025 and 0.500% Notes due 2031.\n8-K\n4.1\n11/15/19\n4.22\nOfficer\u2019s Certificate of the Registrant, dated as of May 11, 2020, including forms of global notes representing the 0.750% Notes due 2023, 1.125% Notes due 2025, 1.650% Notes due 2030 and 2.650% Notes due 2050.\n8-K\n4.1\n5/11/20\n4.23\nOfficer\u2019s Certificate of the Registrant, dated as of August 20, 2020, including forms of global notes representing the 0.550% Notes due 2025, 1.25% Notes due 2030, 2.400% Notes due 2050 and 2.550% Notes due 2060.\n8-K\n4.1\n8/20/20\n4.24\nOfficer\u2019s Certificate of the Registrant, dated as of\u00a0February 8, 2021, including forms of global notes representing the\u00a00.700% Notes due 2026, 1.200% Notes due 2028,\u00a01.650% Notes due 2031,\u00a02.375% Notes due 2041, 2.650% Notes due 2051 and 2.800% Notes due 2061.\n8-K\n4.1\n2/8/21\n4.25\nOfficer\u2019s Certificate of the Registrant, dated as of August 5, 2021, including forms of global notes representing the 1.400% Notes due 2028, 1.700% Notes due 2031, 2.700% Notes due 2051 and 2.850% Notes due 2061.\n8-K\n4.1\n8/5/21\nApple Inc. | 2025 Form 10-K | 55\nIncorporated by Reference\nExhibit Number\nExhibit Description\nForm\nExhibit\nFiling Date/\nPeriod End Date\n4.26\nIndenture, dated as of October 28, 2021, between the Registrant and The Bank of New York Mellon Trust Company, N.A., as Trustee.\nS-3\n4.1\n10/29/21\n4.27\nOfficer\u2019s Certificate of the Registrant, dated as of August 8, 2022, including forms of global notes representing the 3.250% Notes due 2029, 3.350% Notes due 2032, 3.950% Notes due 2052 and 4.100% Notes due 2062.\n8-K\n4.1\n8/8/22\n4.28\nOfficer\u2019s Certificate of the Registrant, dated as of May 10, 2023, including forms of global notes representing the 4.421% Notes due 2026, 4.000% Notes due 2028, 4.150% Notes due 2030, 4.300% Notes due 2033 and 4.850% Notes due 2053.\n8-K\n4.1\n5/10/23\n4.29\nOfficer\u2019s Certificate of the Registrant, dated as of May 12, 2025, including forms of global notes representing the 4.000% Notes due 2028, 4.200% Notes due 2030, 4.500% Notes due 2032 and 4.750% Notes due 2035.\n8-K\n4.1\n5/12/25\n4.30*\nApple Inc. Deferred Compensation Plan.\nS-8\n4.1\n8/23/18\n10.1*\nApple Inc. Employee Stock Purchase Plan, as amended\nas of\nNovem\nber 6,\n 2024\n.\n10-Q\n10.1\n12/28/24\n10.2*\nForm of Indemnification Agreement between the Registrant and each director and executive officer of the Registrant.\n10-Q\n10.2\n6/27/09\n10.3*\nApple Inc. Non-Employee Director Stock Plan, as amended November\n6\n,\n2024\n.\n10-Q\n10.2\n12/28/24\n10.4*\nApple Inc. 2014 Employee Stock Plan, as amended and restated as of October 1, 2017.\n10-K\n10.8\n9/30/17\n10.5*\nForm of Restricted Stock Unit Award Agreement under 2014 Employee Stock Plan effective as of August 18, 2020.\n10-K\n10.16\n9/26/20\n10.6*\nApple Inc. 2022 Employee Stock Plan.\n8-K\n10.1\n3/4/22\n10.7*\nForm of Restricted Stock Unit Award Agreement under 2022 Employee Stock Plan effective as of March 4, 2022.\n8-K\n10.2\n3/4/22\n10.8*\nForm of Performance Award Agreement under 2022 Employee Stock Plan effective as of March 4, 2022.\n8-K\n10.3\n3/4/22\n10.9*\nApple Inc. Executive Cash Incentive Plan.\n8-K\n10.1\n8/19/22\n10.10*\nForm of CEO Restricted Stock Unit Award Agreement under 2022 Employee Stock Plan effective as of September 25, 2022.\n10-Q\n10.1\n12/31/22\n10.11*\nForm of CEO Performance Award Agreement under 2022 Employee Stock Plan effective as of September 25, 2022.\n10-Q\n10.2\n12/31/22\n10.12*\nForm of Restricted Stock Unit Award Agreement under 2022 Employee Stock Plan effective as of September 29, 2024.\n10-K\n10.19\n9/28/24\n10.13*\nForm of Performance Award Agreement under 2022 Employee Stock Plan effective as of September 29, 2024.\n10-K\n10.20\n9/28/24\n10.14*\nForm of CEO Restricted Stock Unit Award Agreement under 2022 Employee Stock Plan effective as of September 29, 2024.\n10-K\n10.21\n9/28/24\n10.15*\nForm of CEO Performance Award Agreement under 2022 Employee Stock Plan effective as of September 29, 2024.\n10-K\n10.22\n9/28/24\n19.1\nInsider Trading Policy.\n10-K\n19.1\n9/28/24\n21.1**\nSubsidiaries of the Registrant.\n23.1**\nConsent of Independent Registered Public Accounting Firm.\n24.1**\nPower of Attorney (included on the Signatures page of this Annual Report on Form 10-K).\n31.1**\nRule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.\n31.2**\nRule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.\n32.1***\nSection 1350 Certifications of Chief Executive Officer and Chief Financial Officer.\n97.1*\nRule 10D-1 Recovery Policy\n10-K\n97.1\n9/28/24\nApple Inc. | 2025 Form 10-K | 56\nIncorporated by Reference\nExhibit Number\nExhibit Description\nForm\nExhibit\nFiling Date/\nPeriod End Date\n101**\nInline XBRL Document Set for the consolidated financial statements and accompanying notes in Part II, Item 8, \u201cFinancial Statements and Supplementary Data\u201d of this Annual Report on Form 10-K.\n104**\nInline XBRL for the cover page of this Annual Report on Form 10-K, included in the Exhibit 101 Inline XBRL Document Set.\n*\nIndicates management contract or compensatory plan or arrangement.\n**\nFiled herewith.\n***\nFurnished herewith.\n(1)\nCertain instruments defining the rights of holders of long-term debt securities of the Registrant are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. The Registrant hereby undertakes to furnish to the SEC, upon request, copies of any such instruments.\nItem 16.\u00a0\u00a0\u00a0\u00a0Form 10-K Summary\nNone.\nApple Inc. | 2025 Form 10-K | 57\nSIGNATURES\nPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.\nDate: October\u00a031, 2025\nApple Inc.\nBy:\n/s/ Kevan Parekh\nKevan Parekh\nSenior Vice President,\nChief Financial Officer\nPower of Attorney\nKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy D. Cook and Kevan Parekh, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.\nPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:\nName\nTitle\nDate\n/s/    Timothy D. Cook\nChief Executive Officer and Director\n(Principal Executive Officer)\nOctober 31, 2025\nTIMOTHY D. COOK\n/s/    Kevan Parekh\nSenior Vice President, Chief Financial Officer\n(Principal Financial Officer)\nOctober 31, 2025\nKEVAN PAREKH\n/s/    Chris Kondo\nSenior Director of Corporate Accounting\n(Principal Accounting Officer)\nOctober 31, 2025\nCHRIS KONDO\n/s/    Wanda Austin\nDirector\nOctober 31, 2025\nWANDA AUSTIN\n/s/    Alex Gorsky\nDirector\nOctober 31, 2025\nALEX GORSKY\n/s/    Andrea Jung\nDirector\nOctober 31, 2025\nANDREA JUNG\n/s/    Arthur D. Levinson\nDirector and Chair of the Board\nOctober 31, 2025\nARTHUR D. LEVINSON\n/s/    Monica Lozano\nDirector\nOctober 31, 2025\nMONICA LOZANO\n/s/    Ronald D. Sugar\nDirector\nOctober 31, 2025\nRONALD D. SUGAR\n/s/    Susan L. Wagner\nDirector\nOctober 31, 2025\nSUSAN L. WAGNER\nApple Inc. | 2025 Form 10-K | 58\n", "ground_truth": {"cover": {"company_name": "Apple Inc.", "cik": "0000320193", "ticker": "AAPL", "form_type": "10-K", "fiscal_year_end": "2025-09-27", "filing_date": "2025-10-31"}, "financials": {"currency": "USD", "fiscal_year": 2025, "revenue": 416161000000.0, "cost_of_revenue": 220960000000.0, "gross_profit": 195201000000.0, "operating_income": 133050000000.0, "net_income": 112010000000.0, "eps_basic": 7.49, "eps_diluted": 7.46, "cash_and_equivalents": 35934000000.0, "total_assets": 359241000000.0, "total_equity": 73733000000.0, "total_debt": 189335000000.0, "operating_cash_flow": 111482000000.0}, "top_risk_factors": []}}
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STATES\nSECURITIES AND EXCHANGE COMMISSION\nWASHINGTON, D.C. 20549\nFORM\n10-K\nAnnual report pursuant to Section 13 or 15(d) of\nthe Securities Exchange Act of 1934\nFor the fiscal year ended\nCommission file\nDecember 31\n, 2025\nnumber\n1-5805\nJPMorgan Chase & Co\n.\n(Exact name of registrant as specified in its charter)\nDelaware\n13-2624428\n(State or other jurisdiction of\nincorporation or organization)\n(I.R.S. employer\nidentification no.)\n270 Park Avenue,\nNew York,\nNew York\n10017\n(Address of principal executive offices)\n(Zip Code)\nRegistrant\u2019s telephone number, including area code: (\n212\n)\n270-6000\n\nSecurities registered pursuant to Section 12(b) of the Act:\nTitle of each class\nTrading Symbol(s)\nName of each exchange on which registered\nCommon stock\nJPM\nThe New York Stock Exchange\nDepositary Shares, each representing a one-four hundredth interest in a share of 5.75% Non-Cumulative Preferred Stock, Series DD\nJPM PR D\nThe New York Stock Exchange\nDepositary Shares, each representing a one-four hundredth interest in a share of 6.00% Non-Cumulative Preferred Stock, Series EE\nJPM PR C\nThe New York Stock Exchange\nDepositary Shares, each representing a one-four hundredth interest in a share of 4.75% Non-Cumulative Preferred Stock, Series GG\nJPM PR J\nThe New York Stock Exchange\nDepositary Shares, each representing a one-four hundredth interest in a share of 4.55% Non-Cumulative Preferred Stock, Series JJ\nJPM PR K\nThe New York Stock Exchange\nDepositary Shares, each representing a one-four hundredth interest in a share of 4.625% Non-Cumulative Preferred Stock, Series LL\nJPM PR L\nThe New York Stock Exchange\nDepositary Shares, each representing a one-four hundredth interest in a share of 4.20% Non-Cumulative Preferred Stock, Series MM\nJPM PR M\nThe New York Stock Exchange\nGuarantee of Callable Fixed Rate Notes due June 10, 2032 of JPMorgan Chase Financial Company LLC\nJPM/32\nThe New York Stock Exchange\nGuarantee of Alerian MLP Index ETNs due January 28, 2044 of JPMorgan Chase Financial Company LLC\nAMJB\nNYSE Arca, Inc.\nGuarantee of Inverse VIX Short-Term Futures ETNs due March 22, 2045 of JPMorgan Chase Financial Company LLC\nVYLD\nNYSE Arca, Inc.\nSecurities registered pursuant to Section 12(g) of the Act: None\nIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.\n \u2610\nYes\n \u2612\nNo\n\nIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or\n\nSection 15(d)\n\nof the Act.\n \u2610\nYes\n \u2612\nNo\n\nIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or\n\n15(d)\n\nof the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.\n \u2612\nYes\n \u2610\nNo\nIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (\u00a7 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).\n \u2612\nYes\n \u2610\nNo\nIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of \u201clarge accelerated filer,\u201d \u201caccelerated filer,\u201d \u201csmaller reporting company,\u201d and \u201cemerging growth company\u201d in Rule 12b-2 of the Exchange Act.\n\u2612\nLarge accelerated filer\n\u2610\nAccelerated filer\n\u2610\nNon-accelerated filer\n\u2610\nSmaller reporting company\n\u2610\nEmerging growth company\nIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.\n\u2610\nIndicate by check mark whether the registrant has filed a report on and attestation to its management\u2019s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.\n\u2612\n\nYes\n \u2610\nNo\nIf securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.\n\u2610\nIndicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant\u2019s executive officers during the relevant recovery period pursuant to \u00a7240.10D-1 (b).\n\u2610\nIndicate by check mark whether the registrant is a shell company (as defined in Rule\u00a012b-2 of the Exchange Act).\n\n\u2610\n\nYes\n \u2612\nNo\nThe aggregate market value of JPMorgan Chase & Co. common stock held by non-affiliates as of June\u00a030, 2025: $\n794,433,813,496\nNumber of shares of common stock outstanding as of January 31, 2026:\n2,697,032,375\nDocuments incorporated by reference:\nPortions of the registrant\u2019s Proxy Statement for the annual meeting of stockholders to be held on May\u00a019, 2026, are incorporated by reference in this Form 10-K in response to Items 10, 11, 12, 13 and 14 of Part III.\nForm\u00a010-K Index\nPart I\nPage\nItem 1.\nBusiness\n.\n1\nOverview\n1\nBusiness segments & Corporate\n1\nCompetition\n1\nSupervision and regulation\n2-6\nHuman capital\n7-8\nDistribution of assets, liabilities and stockholders\u2019 equity; interest rates and interest differentials\n315-319\nItem 1A.\nRisk Factors.\n9-31\nItem 1B.\nUnresolved Staff Comments.\n32\nItem 1\nC\n.\nC\nybersecurity.\n32\nItem 2.\nProperties.\n32\nItem 3.\nLegal Proceedings.\n32\nItem 4.\nMine Safety Disclosures.\n32\nPart II\nItem 5.\nMarket for Registrant\u2019s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.\n33\nItem 6.\nReserved\n33\nItem 7.\nManagement\u2019s Discussion and Analysis of Financial Condition and Results of Operations.\n33\nItem 7A.\nQuantitative and Qualitative Disclosures About Market Risk.\n33\nItem 8.\nFinancial Statements and Supplementary Data.\n34\nItem 9.\nChanges in and Disagreements with Accountants on Accounting and Financial Disclosure.\n34\nItem 9A.\nControls and Procedures.\n34\nItem 9B.\nOther Information.\n35\nItem 9C.\nDisclosure regarding Foreign Jurisdictions that Prevent Inspections.\n36\nPart III\nItem 10.\nDirectors, Executive Officers and Corporate Governance.\n37\nItem 11.\nExecutive Compensation.\n38\nItem 12.\nSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.\n38\nItem 13.\nCertain Relationships and Related Transactions, and Director Independence.\n38\nItem 14.\nPrincipal Accounting Fees and Services.\n38\nPart IV\nItem 15.\nExhibits, Financial Statement Schedules.\n39-42\nPart I\nItem 1. Business.\nOverview\nJPMorgan Chase & Co. (\u201cJPMorganChase\u201d or the \u201cFirm\u201d, NYSE: JPM), a financial holding company incorporated under Delaware law in 1968, is a leading financial services firm based in the United States of America (\u201cU.S.\u201d), with operations worldwide. JPMorganChase had $4.4 trillion in assets and $362.4 billion in stockholders\u2019 equity as of December\u00a031, 2025. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers, predominantly in the U.S., and many of the world\u2019s most prominent corporate, institutional and government clients globally.\nJPMorganChase\u2019s principal bank subsidiary is JPMorgan Chase Bank, National Association (\u201cJPMorgan Chase Bank, N.A.\u201d), a national banking association with U.S. branches in 48 states and Washington, D.C. JPMorganChase\u2019s principal non-bank subsidiary is J.P. Morgan Securities LLC (\u201cJ.P. Morgan Securities\u201d), a U.S. broker-dealer. The bank and non-bank subsidiaries of JPMorganChase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Firm\u2019s principal operating subsidiaries outside the U.S. are J.P. Morgan Securities plc and J.P. Morgan SE (\u201cJPMSE\u201d), which are subsidiaries of JPMorgan Chase Bank, N.A. and are based in the United Kingdom (\u201cU.K.\u201d) and Germany, respectively.\nThe Firm\u2019s website is www.jpmorganchase.com. JPMorganChase makes available on its website, free of charge, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files or furnishes such material to the U.S. Securities and Exchange Commission (the \u201cSEC\u201d) at www.sec.gov. JPMorganChase makes new and important information about the Firm available on its website at https://www.jpmorganchase.com, including on the Investor Relations section of its website at https://www.jpmorganchase.com/ir. Information on the Firm's website, including documents on the website that are referenced in this Form 10-K, is not incorporated by reference into this Annual Report on Form 10-K for the year ended December\u00a031, 2025 (\u201c2025 Form 10-K\u201d or \u201cForm 10-K\u201d) or the Firm\u2019s other filings with the SEC.\nBusiness segments & Corporate\nFor management reporting purposes, the Firm has three reportable business segments\n\u2013\nConsumer & Community Banking (\u201cCCB\u201d), Commercial & Investment Bank (\u201cCIB\u201d) and Asset & Wealth Management (\u201cAWM\u201d)\n\u2013\nwith the remaining activities in Corporate. The Firm\u2019s consumer business segment is CCB, and the Firm\u2019s wholesale business segments are CIB and AWM.\nA description of the Firm\u2019s reportable business segments and the products and services that they provide to their respective client bases, as well as a description of Corporate activities, is provided in the Management\u2019s discussion and analysis of financial condition and results of operations section of this Form 10-K (\u201cManagement\u2019s discussion and analysis\u201d or \u201cMD&A\u201d) under the heading \u201cBusiness Segment & Corporate Results,\u201d which begins on page 46, and in Note 32.\nCompetition\nJPMorganChase and its subsidiaries and affiliates operate in highly competitive environments. Competitors include other banks, brokerage firms, investment banking companies, merchant banks, hedge funds, commodity trading companies, private equity firms, insurance companies, mutual fund companies, investment managers, credit card companies, mortgage banking companies, trust companies, securities processing companies, automobile financing companies, leasing companies, e-commerce and other internet-based companies, digital asset and other financial technology companies, and other companies engaged in providing similar and new products and services. The Firm\u2019s businesses generally compete on the basis of the quality and variety of the Firm\u2019s products and services, transaction execution, innovation, reputation and price. Competition also varies based on the types of clients, customers, industries and geographies served. With respect to some of its geographies and products, JPMorganChase competes globally; with respect to others, the Firm competes on a national or regional basis. New competitors in the financial services industry continue to emerge, including firms that offer products and services solely through the internet and non-financial companies that offer products and services that disintermediate traditional banking products and services offered by financial services firms such as JPMorganChase.\n1\nPart I\nSupervision and regulation\nThe Firm is subject to extensive and comprehensive regulation under U.S. federal and state laws, as well as the applicable laws of the jurisdictions outside the U.S. in which the Firm does business. From time to time, trade organizations representing the financial services industry and others have filed or may file lawsuits challenging various laws, rules and regulations. Such regulatory challenges may affect the scope, requirements or effective dates of the regulations applicable to the Firm.\nFinancial holding company:\nConsolidated supervision\n. JPMorgan Chase & Co. is a bank holding company (\u201cBHC\u201d) and a financial holding company (\u201cFHC\u201d) under U.S. federal law, and is subject to comprehensive consolidated supervision, regulation and examination by the Board of Governors of the Federal Reserve System (the \u201cFederal Reserve\u201d). The Federal Reserve acts as the supervisor of the consolidated operations of BHCs. Certain of JPMorganChase\u2019s subsidiaries are also regulated directly by additional authorities based on the activities or licenses of those subsidiaries.\nJPMorganChase\u2019s national bank subsidiary, JPMorgan Chase Bank, N.A., is supervised and regulated by the Office of the Comptroller of the Currency (\u201cOCC\u201d) and, with respect to certain matters, by the Federal Deposit Insurance Corporation (the \u201cFDIC\u201d).\nJPMorganChase\u2019s U.S. broker-dealers are supervised and regulated by the Securities and Exchange Commission (\u201cSEC\u201d) and the Financial Industry Regulatory Authority (\u201cFINRA\u201d). Subsidiaries of the Firm that engage in certain futures-related and swaps-related activities are supervised and regulated by the Commodity Futures Trading Commission (\u201cCFTC\u201d). J.P. Morgan Securities plc holds a banking license in the U.K. and is regulated by the U.K. Prudential Regulation Authority (the \u201cPRA\u201d) and the U.K. Financial Conduct Authority (\u201cFCA\u201d).\nJPMSE is a Germany-based credit institution jointly regulated by the European Central Bank (\u201cECB\u201d), the German Financial Supervisory Authority and the German Central Bank, as well as the local regulators in each of the countries in which it operates. The Firm\u2019s other non-U.S. subsidiaries are regulated by the banking, securities, prudential, payments and conduct regulatory authorities, as applicable, in the countries in which they operate.\nPermissible business activities\n. The Bank Holding Company Act restricts BHCs from engaging in business activities other than the business of banking and certain closely-related activities. FHCs are permitted to engage in a broader range of financial activities. The Federal Reserve has the authority to limit an FHC\u2019s ability to conduct otherwise permissible activities if the FHC or any of its depository institution subsidiaries ceases to meet applicable eligibility\nrequirements. The Federal Reserve may also impose corrective capital and/or managerial requirements on the FHC, and if deficiencies are persistent, may require divestiture of the FHC\u2019s depository institutions. If any depository institution controlled by an FHC fails to maintain a satisfactory rating under the Community Reinvestment Act, the Federal Reserve must prohibit the FHC and its subsidiaries from engaging in any new activities other than those permissible for BHCs, or acquiring a company engaged in such activities.\nCapital and liquidity requirements\n. The Federal Reserve establishes capital, liquidity and leverage requirements for JPMorganChase that are generally consistent with the international Basel III capital and liquidity framework and evaluates the Firm\u2019s compliance with those requirements. The OCC establishes similar requirements for JPMorgan Chase Bank, N.A. Certain of the Firm\u2019s non-U.S. subsidiaries and branches are also subject to local capital and liquidity requirements.\nBanking supervisors globally continue to refine and enhance the Basel III capital framework for financial institutions. In July 2023, U.S. banking regulators released a proposal to amend the U.S. risk-based capital framework to incorporate certain elements of the revised international Basel III capital framework. That proposal, which has not been finalized, would have significantly revised risk-based capital requirements for banks with assets of $100 billion or more, including the Firm and other U.S. global systemically important banks (\"GSIBs\"). In September 2025, the Federal Reserve\u2019s Vice Chair for Supervision indicated that U.S. banking regulators may issue an updated proposal to amend the U.S. risk-based capital framework in early 2026, replacing the July 2023 proposal. The timing and content of that revised proposal, including any required implementation date, are uncertain. The Firm continues to monitor developments and potential impacts.\nIn the EU and U.K., regulators have finalized the rules implementing their Basel III frameworks. The new rules became effective in the EU beginning January 1, 2025, with market risk aspects expected to be delayed until January 1, 2027. In January 2025, the PRA announced that it intends to delay the implementation of the new rules in the U.K. to January 1, 2027. There are certain transitional arrangements applicable in both the EU and U.K. until 2032 and 2030, respectively.\nStress tests\n. As a large BHC, JPMorganChase is subject to supervisory stress testing administered by the Federal Reserve as part of the Federal Reserve\u2019s annual Comprehensive Capital Analysis and Review (\u201cCCAR\u201d) framework. The Firm must conduct annual company-run stress tests and must also submit an annual capital plan to the Federal Reserve, taking into account the results of separate stress tests designed by each of the Firm and the Federal Reserve. The Federal Reserve uses the results under the severely adverse scenario from its supervisory stress test to determine the Firm\u2019s\n2\nStress Capital Buffer (\u201cSCB\u201d) requirement for the coming year, which forms part of the Firm\u2019s applicable capital buffers. The Firm is required to file its annual CCAR submission on April 6, 2026. The capital plan rules indicate that, unless otherwise determined by the Federal Reserve, the Federal Reserve will notify the Firm of its indicative SCB requirement by June 30, 2026 and final SCB requirement by August 31, 2026 and the Firm\u2019s final SCB requirement will become effective on October 1, 2026. The OCC requires JPMorgan Chase Bank, N.A. to perform separate, similar stress tests annually. Each year, the Firm publishes the results of the annual stress tests for the Firm and JPMorgan Chase Bank, N.A. under the supervisory severely adverse scenarios provided by the Federal Reserve and the OCC.\nIn October 2025, the Federal Reserve issued two proposals to revise its supervisory stress testing framework. The proposals would require the Federal Reserve to publish for public comment comprehensive documentation concerning the supervisory stress test models and annual stress test scenarios, including the models and scenarios for the 2026 stress test. The proposals also introduce an enhanced disclosure process, under which material changes to stress test models and scenarios would be subject to public comment prior to implementation. Based on the Federal Reserve\u2019s analysis, the proposed changes to the stress test models and scenarios are not expected to materially change the SCB for firms, including JPMorganChase, that are subject to the supervisory stress test. In February 2026, the Federal Reserve released the final 2026 supervisory stress test scenarios, while announcing that SCB requirements for large banks, including the Firm, will remain at current levels through September 30, 2027 with new requirements to be calculated in 2027 based on revised models that incorporate public feedback.\nIn addition, in April 2025, the Federal Reserve proposed a rule that aims to reduce the volatility in capital requirements resulting from stress testing and the SCB requirement by averaging the SCB requirement over a two-year period and extending the annual effective date of the SCB by one quarter. These proposed updates to the stress testing framework and the SCB requirement, which are subject to public comment, have not been finalized. A pending legal challenge to the manner in which stress testing is currently administered has been stayed.\nRefer to Capital Risk Management on pages 89\u201399 and Liquidity Risk Management on pages 100\u2013107 for more information.\nEnhanced prudential standards\n. As part of its mandate to identify and monitor risks to the financial stability of the U.S. posed by large banking organizations, the Financial Stability Oversight Council (\u201cFSOC\u201d) recommends prudential standards and reporting requirements to the Federal Reserve for systemically\nimportant financial institutions (\u201cSIFIs\u201d), such as JPMorganChase. The Federal Reserve has adopted several rules to implement those heightened prudential standards, including rules relating to risk management and corporate governance of subject BHCs. JPMorganChase is required under these rules to comply with enhanced liquidity and overall risk management standards, including oversight by the board of directors of risk management activities.\nHolding company as a source of strength.\n JPMorgan Chase & Co. is required to serve as a source of financial strength for its depository institution subsidiaries and to commit resources to support those subsidiaries, including when directed to do so by the Federal Reserve.\nRegulation of acquisitions\n. Acquisitions by BHCs and their banks are subject to requirements, limitations and prohibitions established by law and by the Federal Reserve and the OCC. For example, FHCs and BHCs are required to obtain the approval of the Federal Reserve before they acquire more than 5% of the voting shares of an unaffiliated bank. In addition, acquisitions by financial companies are generally prohibited if, as a result of the acquisition, the total liabilities of the financial company would exceed 10% of the total liabilities of all financial companies, as determined under Federal Reserve regulations. Furthermore, for certain acquisitions, the Firm must provide written notice to the Federal Reserve prior to acquiring direct or indirect ownership or control of any voting shares of any company with over $10 billion in assets that is engaged in activities that are \u201cfinancial in nature.\u201d Moreover, while FHCs may engage in a broader range of activities (including acquisitions) than BHCs, the Federal Reserve has the authority to limit an FHC\u2019s ability to conduct otherwise permissible acquisitions if the FHC or any of its depository institution subsidiaries ceases to meet applicable eligibility requirements.\nOngoing obligations\n. The Firm remains subject to a consent order entered into in March 2024 with the OCC which relates to the Firm\u2019s processes to inventory trading venues and confirm the completeness of certain data fed to trade surveillance platforms.\nSubsidiary banks:\nThe activities of JPMorgan Chase Bank, N.A., the Firm\u2019s principal subsidiary bank, are limited to those specifically authorized under the National Bank Act and related interpretations of the OCC. The OCC has authority to bring an enforcement\u00a0action against JPMorgan Chase Bank, N.A. for unsafe or unsound banking practices, which could include limiting JPMorgan Chase Bank, N.A.\u2019s ability to conduct otherwise permissible activities, or imposing corrective capital or managerial requirements on the bank.\nFDIC deposit insurance.\n The FDIC deposit insurance fund provides insurance coverage for certain deposits and is funded through assessments on banks,\n3\nPart I\nincluding JPMorgan Chase Bank, N.A. The FDIC is required to maintain a minimum reserve ratio, which measures the balance of reserves in the deposit insurance fund against an estimate of FDIC-insured deposits, of 1.35%. In October 2022, the FDIC adopted a final rule to raise bank assessments and accelerate the time by which the reserve ratio would meet the statutory minimum. In the final rule, the FDIC adopted a restoration plan to bring the reserve ratio up to the required 1.35% by September 30, 2028, with a longer-term target of maintaining a reserve ratio of 2%. As of June 30, 2025, the reserve ratio exceeded the statutory minimum and, as of the third quarter of 2025, the FDIC was no longer operating under a restoration plan. On November 28, 2025, the FDIC announced that the designated reserve ratio, the FDIC\u2019s longer-term goal for the deposit insurance fund, would remain unchanged at 2% for 2026.\nFDIC powers upon a bank insolvency.\n Upon any insolvency of JPMorgan Chase Bank, N.A., the FDIC could be appointed as conservator or receiver under the Federal Deposit Insurance Act. The FDIC has broad powers to transfer assets and liabilities without the approval of the institution\u2019s creditors.\nPrompt corrective action.\n The Federal Deposit Insurance Corporation Improvement Act of 1991 requires the relevant federal banking regulator to take \u201cprompt corrective action\u201d with respect to a depository institution if that institution does not meet certain capital adequacy standards. The Federal Reserve is also authorized to take appropriate action against the parent BHC, such as JPMorgan Chase & Co., based on the undercapitalized status of any bank subsidiary. In certain instances, the BHC would be required to guarantee the performance of the capital restoration plan for its undercapitalized subsidiary.\nHeightened supervisory standards.\n In the U.S., the OCC has established guidelines setting forth heightened standards for large banks, including minimum standards for the design and implementation of a risk governance framework for banks. Under these standards, a bank\u2019s risk governance framework must ensure that the bank\u2019s risk profile is easily distinguished and separate from that of its parent BHC for risk management purposes. The bank\u2019s board or risk committee is responsible for approving the bank\u2019s risk governance framework, providing active oversight of the bank\u2019s risk-taking activities, and holding management accountable for adhering to the risk governance framework. In December 2025, the OCC issued a proposed rulemaking to amend its heightened standards guidelines, which would continue to apply to JPMorgan Chase Bank, N.A., by raising the asset threshold at which the guidelines apply to covered banks. In the proposed rulemaking, the OCC also invited comments on a number of questions, including whether the heightened standards guidelines should\nbe rescinded. The proposed rulemaking has not yet been finalized.\nThe Firm\u2019s banking entities in the EU and the U.K. are subject to supervisory expectations published by the ECB and the PRA, respectively, addressing bank strategy, governance and risk management in the areas of climate change, operational resilience, reliance on IT systems and third-party services, and resilience from macro-financial and geopolitical shocks.\nRestrictions on transactions with affiliates.\nJPMorgan Chase Bank, N.A. and its subsidiaries are subject to restrictions imposed by federal law on extensions of credit to, investments in stock or securities of, and derivatives, securities lending and certain other transactions with, JPMorgan Chase & Co. and certain other affiliates. These restrictions prevent JPMorgan Chase & Co. and other affiliates from borrowing from JPMorgan Chase Bank, N.A. and its subsidiaries unless the loans are secured in specified amounts and comply with certain other requirements.\nDividend restrictions.\n Federal law imposes limitations on the payment of dividends by national banks, such as JPMorgan Chase Bank, N.A. Refer to Note 26 for the amount of dividends that JPMorgan Chase Bank, N.A. could pay, at January 1, 2026, to JPMorganChase without the approval of the banking regulators. The OCC and the Federal Reserve also have authority to prohibit or limit the payment of dividends of a bank subsidiary that they supervise if, in the banking regulator\u2019s opinion, payment of a dividend would constitute an unsafe or unsound practice in light of the financial condition of the bank.\nDepositor preference.\n Under federal law, the claims of a receiver of an insured depositary institution (\u201cIDI\u201d) for administrative expense and the claims of holders of U.S. deposit liabilities (including the FDIC and deposits in non-U.S. branches that are dually payable in the U.S. and in a non-U.S. branch) have priority over the claims of other unsecured creditors of the institution, including depositors in non-U.S. branches and public noteholders.\nConsumer supervision and regulation.\n JPMorganChase and JPMorgan Chase Bank, N.A. are subject to supervision and regulation in the U.S. by the Consumer Financial Protection Bureau (\u201cCFPB\u201d) with respect to federal consumer protection laws, including laws relating to fair lending and the prohibition of unfair, deceptive or abusive acts or practices in connection with the offer, sale or provision of consumer financial products and services. The CFPB also has jurisdiction over small business lending activities with respect to fair lending and the Equal Credit Opportunity Act. As part of its regulatory oversight, the CFPB has authority to take enforcement actions against firms that offer certain products and services to consumers using practices that are deemed to be unfair, deceptive or abusive. In October 2024, the CFPB issued a final rule\n4\nthat would have required data providers, including banks such as JPMorgan Chase Bank, N.A., to make certain consumer data available to consumers and authorized third parties in electronic form. The final rule is currently subject to a preliminary injunction, and the CFPB has indicated that it intends to propose a new rule in the first quarter of 2026. The content of any new proposal, and the potential impact on the Firm, are uncertain.\nIn October 2023, the Federal Reserve proposed to lower the maximum interchange fee that large debit card issuers, including the Firm, would be permitted to receive for a debit card tran\nsaction. The proposal would also establish a process for automatically publishing an updated maximum fee amount every other year going forward. The current debit interchange fee cap is subject to ongoing litigation, and the impact of that litigation on the Federal Reserve\u2019s proposal is uncertain. The Firm\u2019s consumer activities are also subject to regulation under state statutes which are enforced by the Attorney General or empowered agency of each state. Certain states have introduced legislation related to interchange fees, which would impact the fees that financial institutions, including the Firm, would be permitted to receive for certain transactions within a state. Where interchange fee regulation has been passed at the state level, it is subject to ongoing legal challenge.\nIn the U.K., the Firm operates a retail bank through J.P. Morgan Europe Limited (\u201cJPMEL\u201d) and provides retail investment management services through J.P. Morgan Personal Investing Limited (\u201cJPM PI\u201d). JPMEL is regulated by the PRA, and both JPMEL and JPM PI are regulated by the FCA with respect to their conduct of financial services in the U.K., including obligations relating to the fair treatment of customers. JPMEL is also regulated by the U.K. Payment Systems Regulator (\u201cPSR\u201d) with respect to its operation and use of payment systems. In March 2025, the U.K. government announced that the functions of the PSR will be consolidated into the FCA. In addition, the retail businesses of JPMEL and JPM PI are subject to U.K. consumer-protection legislation.\nSecurities and broker-dealer regulation:\nThe Firm conducts securities underwriting, dealing and brokerage activities in the U.S. through J.P. Morgan Securities LLC and other non-bank broker-dealer subsidiaries, all of which are subject to regulations of the SEC, FINRA and the New York Stock Exchange, among others. The Firm conducts similar securities activities outside the U.S. subject to local regulatory requirements. In the U.K., those activities are primarily conducted by J.P. Morgan Securities plc and in the EU, those activities are primarily conducted by JPMSE. Broker-dealers are subject to laws and regulations covering all aspects of the securities business, including sales and trading practices, securities offerings, publication of research reports, use of\ncustomer funds, the financing of client purchases, capital structure, record-keeping and retention, and the conduct of their directors, officers and employees. Refer to Broker-dealer regulatory capital on page 99 for information concerning the capital of J.P. Morgan Securities LLC, J.P. Morgan Securities plc and JPMSE. In addition, the Firm's sales and trading activities, which are conducted through both bank and non-bank subsidiaries, are subject to laws and regulations relating to market conduct, including prohibitions on manipulative or anti-competitive practices.\nInvestment management regulation:\nThe Firm\u2019s asset and wealth management businesses are subject to significant regulation in jurisdictions around the world relating to, among other things, the safeguarding and management of client assets, offerings of funds and marketing activities. Certain of the Firm\u2019s subsidiaries are registered with, and subject to oversight by, the SEC as investment advisers and broker-dealers. The Firm\u2019s registered investment advisers in the U.S. are subject to the fiduciary and other obligations imposed under the Investment Advisers Act of 1940 and applicable state and federal law. The Firm\u2019s bank fiduciary activities are subject to supervision by the OCC.\nThe Firm\u2019s asset and wealth management businesses are subject to ongoing rule-making and implementation of new regulations and other guidance, including by the SEC and certain U.S. states regarding enhanced standards of conduct and conflicts of interest. In April 2024, the Department of Labor (\u201cDOL\u201d) finalized a \u201cfiduciary\u201d rule that would significantly expand who is deemed to be an investment advice fiduciary for retirement plans and individual retirement accounts under the Employee Retirement Income Security Act of 1947 and could affect fee and compensation practices at financial institutions that provide investment recommendations to retirement clients. The effective date of the rule has been stayed by two federal courts. The DOL has indicated that it intends to revise the rule, and the potential impact of the rule on the Firm is therefore uncertain.\nDerivatives regulation:\nThe Firm is subject to comprehensive regulation of its derivatives businesses. In the U.S., JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC and J.P. Morgan Securities plc are registered with the CFTC as \u201cswap dealers.\u201d In addition, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC are registered with the SEC as \u201csecurity-based swap dealers.\u201d As a result, these entities are subject to a comprehensive regulatory framework applicable to their swap or security-based swap activities, including capital requirements, rules requiring the collateralization of uncleared swaps and security-based swaps, rules regarding segregation of counterparty collateral, business conduct and documentation standards, rules requiring the central\n5\nPart I\nclearing of standardized over-the-counter (\u201cOTC\u201d) derivatives, requirements that certain standardized OTC swaps be traded on regulated trading venues, record-keeping and reporting obligations, and anti-fraud and anti-manipulation requirements. Similar requirements have also been established in the European Union (\u201cEU\u201d) under the European Market Infrastructure Regulation (\u201cEMIR\u201d) and the Markets in Financial Instruments Directive (\u201cMiFID II\u201d), as well as in the U.K. and other jurisdictions around the world.\nJ.P. Morgan Securities LLC is also registered with the CFTC as a futures commission merchant.\nData, privacy, cybersecurity and artificial intelligence regulation:\nThe Firm and its subsidiaries are subject to laws, rules and regulations globally concerning data, including data protection, consumer protection, privacy, cybersecurity, artificial intelligence and related matters. These laws, rules and regulations are constantly evolving, subject to interpretation, remain a focus of regulators globally, may be enforced by private parties or government bodies, and continue to have a significant impact on all of the Firm\u2019s businesses and operations.\nThe Bank Secrecy Act and Economic Sanctions:\nThe Bank Secrecy Act (\u201cBSA\u201d) requires all financial institutions, including banks and securities broker-dealers, to establish a risk-based system of internal controls reasonably designed to prevent money laundering and the financing of terrorism. The BSA includes a variety of record-keeping and reporting requirements, as well as due diligence/know-your-customer documentation requirements. Similar requirements exist in other jurisdictions in which the Firm operates. The Firm is also subject to the regulations and economic sanctions programs administered and enforced by the U.S. Treasury\u2019s Office of Foreign Assets Control (\u201cOFAC\u201d) and EU and U.K. authorities which target entities or individuals that are, or are located in countries that are, involved in activities including terrorism, hostilities, embezzlement or human rights violations. The Firm is also subject to economic sanctions laws, rules and regulations in other jurisdictions in which it operates, including those that conflict with or prohibit a firm such as JPMorganChase from complying with certain laws, rules and regulations to which it is otherwise subject.\nAnti-Corruption:\nThe Firm is subject to laws and regulations relating to corrupt and illegal payments to government officials and others in the jurisdictions in which it operates, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act.\nCompensation practices:\nThe Firm\u2019s compensation practices are subject to oversight by the Federal Reserve, as well as other\nagencies. The Federal Reserve has jointly issued guidance with the FDIC and the OCC that is designed to ensure that incentive compensation paid by banking organizations does not encourage imprudent risk-taking that threatens the organizations\u2019 safety and soundness. The Financial Stability Board (\u201cFSB\u201d) has also established standards covering compensation principles for banks. The Firm\u2019s compensation practices are also subject to regulation and oversight by regulators in other jurisdictions, notably the Fifth Capital Requirements Directive (\u201cCRD V\u201d), as implemented in the EU, which includes compensation-related provisions. The European Banking Authority has instituted guidelines on compensation policies including under CRD V which in certain countries (such as Germany) are implemented or supplemented by local regulations or guidelines. The U.K. regulators have also instituted regulations and guidelines on compensation policies, which diverge in certain areas from EU rules. The Firm expects that the implementation of regulatory guidelines regarding compensation in the U.S. and other countries will continue to evolve, and may affect the manner in which the Firm structures its compensation programs and practices.\nSustainability:\nPolicymakers in the U.K. and the EU continue to implement and refine sustainability-related initiatives and disclosure requirements. The Corporate Sustainability Reporting Directive (\u201cCSRD\u201d) replaced and significantly expanded the scope and content of certain EU ESG reporting requirements, with phased-in requirements that started in fiscal year 2024. The implementation of CSRD into local law has been delayed in a number of member states, including in Germany, and the Firm continues to monitor developments and potential impacts. In addition, in July 2024, the EU enacted the Corporate Sustainability Due Diligence Directive (\u201cCSDDD\u201d), which provides for phased-in requirements starting in 2029. The CSDDD sets mandatory due diligence obligations for companies to address actual and potential human rights violations and environmental adverse impacts stemming from their own operations and business relationships, including the activities of certain companies with which they have established business relationships. Both the CSRD and CSDDD will impact certain of the Firm\u2019s EU and non-EU entities.\n6\nHuman capital\nJPMorganChase believes that its long-term growth and success depend on its ability to identify, attract, develop, retain and engage talented employees and foster an inclusive work environment. The information provided below relates to JPMorganChase\u2019s full-time and part-time employees and does not include the Firm\u2019s contractors.\nGlobal workforce\nAs of December\u00a031, 2025, JPMorganChase had 318,512 employees globally. JPMorganChase\u2019s employees are located in 66 countries, with 58% of the Firm\u2019s employees located in the U.S. The following table presents the distribution of the Firm\u2019s global workforce by region and by line of business (\u201cLOB\u201d) and Corporate as of December\u00a031, 2025:\nEmployee Breakdown by Region\nEmployee Breakdown by LOB and Corporate\nRegion\nEmployees\nLOB\nEmployees\nNorth America\n185,208\nCCB\n144,196\nAsia-Pacific\n96,499\nCIB\n94,563\nEurope/Middle East/Africa\n31,030\nAWM\n29,722\nLatin America/Caribbean\n5,775\nCorporate\n50,031\nTotal Firm\n318,512\nTotal Firm\n318,512\nWorkforce composition\nThe following table presents information based on voluntary self-identifications by the Firm\u2019s employees, including members of the Firm\u2019s Operating Committee and other senior level employees, as well as members of the Board of Directors, as of December\u00a031, 2025. Information on race/ethnicity of employees is categorized based on Equal Employment Opportunity classifications and is presented for U.S. employees who self-identified, and information on gender is presented for global employees who self-identified. Information on race/ethnicity and gender for members of the Operating Committee and the Board of Directors reflects all such members. Information on LGBTQ+ and veteran statuses is based on all U.S. employees, and all members of the Operating Committee and the Board of Directors. Information on disability status is based on all U.S. employees and all members of the Operating Committee.\nDecember 31, 2025\nTotal\nemployees\nSenior level employees\n(e)\nOperating Committee\nBoard of Directors\n(f)\nRace/Ethnicity:\n(a)\nWhite\n42\n%\n74\n%\n100\n%\n82\n%\nHispanic\n22\n%\n6\n%\n\u2014\n%\n\u2014\n%\nAsian\n20\n%\n14\n%\n\u2014\n%\n\u2014\n%\nBlack\n13\n%\n5\n%\n\u2014\n%\n18\n%\nOther\n(b)\n3\n%\n1\n%\n\u2014\n%\n\u2014\n%\nGender:\n(c)\nMen\n52\n%\n71\n%\n46\n%\n45\n%\nWomen\n48\n%\n29\n%\n54\n%\n55\n%\nLGBTQ+\n(d)\n4\n%\n2\n%\n8\n%\n\u2014\n%\nMilitary veterans\n(d)\n3\n%\n2\n%\n\u2014\n%\n9\n%\nPeople with disabilities\n(d)\n5\n%\n3\n%\n\u2014\n%\n\u2014\n%\n(g)\n(a)\nPresented as a percentage of the respective populations who self-identified race/ethnicity, which was 97% and 95% of the Firm\u2019s total U.S.-based employees and U.S.-based senior level employees, respectively, and all members of the Operating Committee and the Board of Directors.\n(b)\nOther includes American Indian or Alaska Native, Native Hawaiian or Other Pacific Islander, and Two or More Races.\n(c)\nPresented as a percentage of the respective populations who self-identified gender, which was 99% of each of the Firm\u2019s total global employees and senior level employees, and all members of the Operating Committee and the Board of Directors.\n(d)\nPresented as a percentage of total U.S.-based employees, total U.S.-based senior level employees, all members of the Operating Committee, and all members of the Board of Directors, respectively.\n(e)\nSenior level employees represents employees with the titles of Managing Director and above.\n(f)\nExcludes Todd A. Combs, who resigned from the Firm\u2019s Board of Directors, effective December 7, 2025. Refer to Recent Events on page 50 for additional information.\n(g)\nThe Firm has not asked members of the Board of Directors to self-identify disability status.\n7\nPart I\nAttracting and retaining employees\nThe goal of JPMorganChase\u2019s recruitment efforts, which leverage a variety of channels to source from a broad pool of candidates, is to attract and hire highly qualified talent in all roles and at all career levels. The Firm\u2019s hiring practices focus on the skills and qualifications of a candidate relative to the job requirements.\nThe Firm strives to provide both external candidates and internal employees who are seeking a different role with rewarding career opportunities. These opportunities range from internship training programs for students to entry-level, management and executive careers.\nDeveloping employees\nJPMorganChase supports the professional development and career growth of its employees. The Firm offers voluntary training programs and educational resources to all employees covering a broad variety of topics such as leadership and management, artificial intelligence, data literacy and operational and professional skills. Leadership Edge, the Firm\u2019s global leadership and management development center of excellence, is focused on creating one Firmwide leadership culture. In addition, the Firm requires that its employees, including new hires, complete a training curriculum that covers, among other topics, information concerning Firm policies and standards.\nRewarding and supporting employees\nThe Firm provides market-competitive compensation and benefits programs. JPMorganChase\u2019s compensation philosophy includes guiding principles that drive compensation-related decisions across the Firm, including pay-for-performance practices that are designed to attract and retain top talent, to be responsive to and aligned with shareholder interests, and to reinforce the Firm\u2019s culture and Business Principles that guide how the Firm does business. The Firm follows a disciplined and balanced compensation framework, including the integration of risk, controls and conduct considerations. The Firm\u2019s compensation approach is designed to pay the Firm\u2019s employees fairly and competitively for the work they do.\nJPMorganChase offers extensive benefits and wellness packages to support employees and their families, which vary depending on location and include healthcare coverage, retirement benefits, life and disability insurance, access to on-site health and wellness centers, counseling and resources related to mental health, time away policies, child care access and support, tuition assistance, and financial education.\n8\nItem 1A. Risk Factors.\nThe following discussion sets forth the material risk factors that could affect JPMorganChase\u2019s financial condition and operations. Readers should not consider any descriptions of these factors to be a complete set of all potential risks that could affect the Firm. Any of the risk factors discussed below could by itself, or combined with other factors, materially and adversely affect JPMorganChase\u2019s business, results of operations, financial condition, capital position, liquidity, competitive position or reputation, including by materially increasing expenses or decreasing revenues, which could result in material losses or a decrease in earnings.\nSummary\nThe principal risk factors include:\n\u2022\nLegal and Regulatory\nrisks, including the impact of extensive supervision and regulation, as well as changes to or in the application, interpretation or enforcement of applicable law or executive branch actions, on JPMorganChase\u2019s business and operations; the ways in which differences in regulatory implementation in different jurisdictions or with respect to certain competitors could negatively impact JPMorganChase\u2019s business; the ways in which governmental policies that discourage or penalize business relationships with certain industries, or require specific business practices, could negatively affect JPMorganChase's businesses; the penalties and other repercussions that JPMorganChase could face when resolving litigation or investigations by governmental authorities; the ways in which less predictable legal and regulatory frameworks in certain jurisdictions could negatively impact JPMorganChase\u2019s operations and financial results; and the losses that security holders and other unsecured creditors will absorb if JPMorganChase were to enter into a resolution.\n\u2022\nPolitical\nrisks, including the potential negative effects on JPMorganChase\u2019s businesses due to economic uncertainty resulting from political developments.\n\u2022\nMarket\n risks, including the effects that unfavorable economic and market events and conditions, political developments, changes in interest rates and credit spreads, and market fluctuations could have on JPMorganChase\u2019s businesses, investments and market-making positions, as well as on its earnings and liquidity and capital levels.\n\u2022\nCredit\nrisks, including the effects from adverse changes in the financial condition of clients, customers, counterparties, central counterparties and other market participants; the potential for losses due to declines in the value of collateral; and potential negative impacts from concentrations of\ncredit risk with respect to clients, customers, counterparties and other market participants.\n\u2022\nLiquidity\n risks, including the risk that JPMorganChase\u2019s ability to operate could be impaired by constrained liquidity; the dependence of JPMorgan Chase & Co. on its subsidiaries for funding; and the potential adverse effects that any downgrades of JPMorganChase\u2019s credit ratings could have on its liquidity and cost of funding.\n\u2022\nCapital\n risks, including the risk that JPMorganChase\u2019s ability to distribute capital to shareholders or to support its business activities could be limited if it does not satisfy applicable regulatory capital requirements.\n\u2022\nOperational\n risks, including risks associated with JPMorganChase\u2019s dependence on its operational systems and its employees, as well as the systems and employees of acquired businesses and external parties; the harm that could be caused by a successful cyber attack affecting JPMorganChase or by other extraordinary events; the adverse effects of failing to identify and address operational risks associated with the introduction of or changes to products, services and delivery platforms or technologies, as well as risks related to data management processes; risks related to safeguarding personal information; potential adverse effects of failing to comply with applicable standards for the oversight of vendors and other service providers; and risks associated with JPMorganChase\u2019s risk management framework and control environment, its models and estimations and associated judgments used in its stress testing and financial statements, and controls over disclosure and financial reporting.\n\u2022\nStrategic\n risks, including the damage to JPMorganChase\u2019s competitive standing that could result from ineffective business strategies; risks associated with the significant competition that JPMorganChase faces; and the potential adverse impacts of climate change on JPMorganChase\u2019s business and operations and those of its clients and customers.\n\u2022\nConduct\n risks, including the negative impact that could result from misconduct of JPMorganChase\u2019s employees.\n\u2022\nReputation\n risks, including the potential negative commercial impacts that can arise from JPMorganChase\u2019s decisions related to clients and business activities; and the failure to effectively manage conflicts of interest or to satisfy fiduciary obligations, or other factors that could damage JPMorganChase\u2019s reputation.\n\u2022\nCountry\n risks, including potential impacts on JPMorganChase\u2019s businesses from an outbreak or escalation of hostilities between countries or within a country or region; and the potential adverse effects\n9\nPart I\nof local economic, political, regulatory and social factors on JPMorganChase\u2019s business in certain countries in which it operates.\n\u2022\nPeople\n risks, including the criticality of attracting and retaining qualified employees.\nThe above summary is subject in its entirety to the discussion of the risk factors set forth below.\nThe following terms which are used in the risk factors set forth below have these meanings:\n\u201capplicable law\u201d means the laws, rules and regulations that apply to JPMorganChase\u2019s businesses in the jurisdictions in which it operates.\n\u201cextraordinary events\u201d include any of the events or circumstances mentioned in the risk factor entitled \u201cJPMorganChase\u2019s operations, results and reputation could be harmed by occurrences of extraordinary events beyond its control.\u201d\n\u201cgovernmental authorities\u201d means governmental and regulatory agencies, legislative and judicial bodies and other governmental entities and authorities in the countries, states, municipalities, territories, regions and other jurisdictions in which JPMorganChase does business.\n\u201cpenalties\u201d means fines, penalties or other sanctions imposed by governmental authorities.\nLegal and Regulatory\nJPMorganChase\u2019s businesses are highly regulated and are significantly affected by applicable law and supervisory expectations.\nJPMorganChase must comply with applicable law in all of the jurisdictions around the world where it does business. Like other financial services firms, JPMorganChase is subject to extensive supervision and regulation that significantly affects the way that it conducts its business and structures its operations. The supervisory and regulatory framework also imposes requirements for JPMorganChase to implement and maintain compliance programs, and the complexity of these programs can increase its risks of non-compliance. In addition, entering into or acquiring a new business or expanding current business could increase the scope of applicable law or supervision and regulation to which JPMorganChase is subject.\nJPMorganChase has in the past and could in the future be required to modify its business and operations in response to changes in applicable law, regulatory decisions or supervisory expectations, such as:\n\u2022\nlimiting the products and services that it offers\n\u2022\nincreasing the prices that it charges for products and services, which could reduce the demand for them\n\u2022\nreducing the liquidity that it provides through market-making activities\n\u2022\npaying higher taxes or other governmental charges\n\u2022\nabsorbing losses arising from fraudulent transactions perpetrated against its clients and customers\n\u2022\ndisposing of certain assets, and doing so at disadvantageous times or prices\n\u2022\nforgoing business opportunities that it might otherwise pursue, or\n\u2022\notherwise restricting its business activities.\nThese types of changes could increase JPMorganChase\u2019s costs or reduce its revenues. In addition, any failure by JPMorganChase to comply with applicable law or meet supervisory expectations could result in:\n\u2022\nincreased regulatory scrutiny\n\u2022\nenforcement actions by governmental authorities\n\u2022\nthe imposition of penalties\n\u2022\nincreased exposure to litigation, or\n\u2022\nreputational harm.\nFurthermore, regulators or governmental authorities could adopt new interpretations of applicable law or supervisory expectations, and in certain circumstances, JPMorganChase could be required to demonstrate that prior conduct complies with these new interpretations. This situation could increase the risks associated with non-compliance and result in the imposition of penalties or enforcement actions. In addition, the business or operations of financial services firms such as JPMorganChase may be negatively affected by executive orders or other executive branch actions that seek to regulate those businesses or operations.\nDifferences in the supervision and regulation of financial services firms could require JPMorganChase to modify its operations and incur higher operational and compliance costs.\nVarious factors could influence the scope of applicable law and supervision for a firm that provides financial services, such as the size of the firm, the businesses in which it engages and its jurisdiction of organization. For example:\n\u2022\nlarger firms such as JPMorganChase often face more stringent supervision and regulation\n\u2022\ncertain competitors, such as financial technology companies, may not be subject to banking regulation, or may be subject to less stringent oversight, or\n\u2022\nthe regulatory and supervisory framework in a particular jurisdiction may favor locally-based firms.\nA highly-regulated financial services firm such as JPMorganChase can be vulnerable to competition from firms that are less regulated or unregulated. In addition, differences in regulatory implementation between the U.S. and other countries could adversely affect JPMorganChase\u2019s businesses. For example, a national financial services regulator may impose requirements\n10\nthat are stricter than a global standard, which could create competitive disadvantages for those firms, such as JPMorganChase, that are subject to the enhanced regulations. Furthermore, certain authorities outside the U.S. have adopted applicable law that could conflict with or prohibit JPMorganChase from complying with applicable law in other jurisdictions, which could create conflict of law issues and could increase risks associated with non-compliance.\nRegulatory initiatives outside the U.S. have required and could in the future require JPMorganChase to significantly modify its operations or legal entity structure in the places in which those initiatives are implemented, such as requirements for:\n\u2022\nestablishing locally-based intermediate holding companies or operating subsidiaries\n\u2022\nmaintaining minimum amounts of capital or liquidity in locally-based subsidiaries\n\u2022\nimplementing processes within locally-based subsidiaries for complying with applicable law\n\u2022\nseparating (or \u201cring fencing\u201d) core banking products and services from markets activities\n\u2022\nthe orderly resolution of financial institutions\n\u2022\nexecuting or settling transactions on exchanges or through central counterparties (\u201cCCPs\u201d), or depositing funds with other financial institutions or clearing and settlement systems, and\n\u2022\ngovernance, control, conduct of business and compensation standards.\nDifferences, inconsistencies and conflicts in applicable law related to financial services have required and could in the future require JPMorganChase to:\n\u2022\ndivest assets or restructure its operations\n\u2022\nmaintain higher levels of capital and liquidity\n\u2022\nincur higher operational, compliance, capital and liquidity costs\n\u2022\nbecome subject to penalties\n\u2022\nlimit the products and services that it offers, or change the prices that it charges for those products and services, or\n\u2022\nforgo business opportunities, including acquisitions or principal investments, that it otherwise would have pursued.\nJPMorganChase faces significant legal risks from civil and governmental proceedings, including litigation, investigations and enforcement actions.\nJPMorganChase is named as a defendant or is otherwise involved in many civil and governmental legal proceedings, including class actions, derivative actions and other litigation or disputes with third parties, as well as investigations and enforcement actions by U.S. and non-U.S. governmental authorities, including criminal proceedings. Actions currently\npending against JPMorganChase could result in judgments, settlements or penalties adverse to JPMorganChase, and any such resolution of legal proceedings could materially and adversely affect JPMorganChase\u2019s business, financial condition or results of operations, or cause serious reputational harm. In addition, the extent of JPMorganChase\u2019s exposure to legal matters is unpredictable and could, in some cases, exceed the amount of reserves that JPMorganChase has established for those matters.\nResolving an investigation by a governmental authority could subject JPMorganChase to significant penalties and other repercussions.\nGovernmental authorities conduct both routine and targeted examinations of JPMorganChase and its subsidiaries, and JPMorganChase\u2019s businesses and operations are subject to heightened regulatory oversight. This scrutiny, or the results of such an examination, could lead to legal proceedings, including investigations or enforcement actions by governmental authorities. Furthermore, a single event involving a potential violation of applicable law could give rise to numerous and overlapping proceedings, including by multiple governmental authorities in the U.S. as well as non-U.S. authorities. In addition, if another financial institution violates applicable law relating to a particular business activity or practice, this will often give rise to legal proceedings related to the same or similar activity or practice by JPMorganChase.\nJPMorganChase has in the past incurred significant penalties and experienced collateral consequences and other repercussions in connection with resolving investigations and enforcement actions by governmental authorities, and it could face similar investigations, actions and resolutions in the future. JPMorganChase typically incurs higher operational and compliance costs when addressing the requirements of such resolutions, including devoting substantial resources to remediation.\nIn connection with resolving specific investigations or enforcement actions, certain governmental authorities have required JPMorganChase and other financial institutions to admit wrongdoing with respect to the activities that gave rise to the resolution. These types of admissions could lead to negative consequences such as:\n\u2022\ndisqualification from doing business with certain clients or customers, or in specific jurisdictions\n\u2022\ngreater exposure in litigation, and\n\u2022\nreputational harm.\nFurthermore, government officials globally have increasingly brought criminal actions against financial institutions and required those institutions to plead guilty to criminal offenses in connection with resolving investigations or enforcement actions by governmental authorities. These resolutions could have significant\n11\nPart I\ncollateral consequences for the subject financial institution, including:\n\u2022\nloss of clients, customers and business\n\u2022\nrestrictions on offering certain products or services, and\n\u2022\nloss of permission to operate certain businesses, either temporarily or permanently.\nJPMorganChase expects that the following trends will continue:\n\u2022\nit will be subject to heightened regulatory scrutiny and pervasive investigations and enforcement actions by governmental authorities, as well as criticism or litigation from clients or customers who claim that they have been harmed by actions taken by JPMorganChase in order to comply with applicable law\n\u2022\ngovernmental authorities will forgo opportunities to resolve investigations with informal supervisory actions, and will pursue formal and punitive enforcement actions with respect to actual or deemed violations of law\n\u2022\nresolutions of investigations and enforcement actions will result in the imposition of significant penalties, and\n\u2022\ngovernmental authorities will be more likely to bring formal enforcement actions against JPMorganChase if it has previously been subject to other investigations or enforcement actions by governmental authorities.\nWhen resolving an investigation or enforcement action by a governmental authority, the subject financial institution typically must satisfy new or enhanced regulatory requirements or restrictions. If JPMorganChase fails to meet the requirements of any such resolution, or to maintain risk and control processes that meet the heightened expectations of its regulators, it could be required to, among other things:\n\u2022\nenter into further resolutions\n\u2022\nincur additional penalties or judgments, or\n\u2022\naccept material restrictions on, or changes in the management of, its businesses.\nIn these circumstances, JPMorganChase could also become subject to prosecution or civil litigation with respect to the matters that gave rise to an investigation or enforcement action. In addition, JPMorganChase could incur higher costs when resolving investigations and enforcement actions involving newly-acquired businesses, companies in which JPMorganChase has made principal investments, parties to joint ventures with JPMorganChase, and vendors with which JPMorganChase does business.\nAs a participant in the financial services industry, it is likely that JPMorganChase will continue to experience a high level of litigation and investigations by\ngovernmental authorities related to its businesses and operations. In addition, JPMorganChase could become subject to a significant investigation by governmental authorities and be unable to disclose specific information concerning that investigation to the public if such a disclosure would violate JPMorganChase\u2019s obligations under applicable law to maintain confidentiality, even if the resolution of that investigation could have a material adverse effect on JPMorganChase\u2019s business, operations, results or financial condition.\nJPMorganChase\u2019s compliance risk and operating costs could be higher in jurisdictions with less predictable legal, regulatory and judicial frameworks.\nJPMorganChase conducts business in certain jurisdictions in which the application of the rule of law is inconsistent, extralegal or less predictable, including with respect to:\n\u2022\nthe absence of a statutory, regulatory or interpretative basis for engaging in specific types of business or transactions\n\u2022\napplicable law or judicial orders that are ambiguous, conflicting, or inconsistently applied or interpreted\n\u2022\nactions by or at the direction of governmental authorities or officials\n\u2022\nuncertainty concerning the enforceability of intellectual property rights or contractual or other obligations\n\u2022\nchallenges associated with competing in economies in which the government controls or protects all or a portion of the local economy or specific businesses, or where graft or corruption may be pervasive\n\u2022\nthe threat of investigations by governmental authorities, civil litigations or criminal prosecutions that are arbitrary or otherwise contrary to established legal principles in other parts of the world, and\n\u2022\nthe termination of licenses or other permissions required to operate in the relevant jurisdiction, or the suspension of business relationships with governmental entities, leading to lost revenue.\nIf the legal, regulatory or judicial framework in a particular jurisdiction is susceptible to producing outcomes that are inconsistent, unexpected or contrary to established legal principles, this could create a more difficult business environment for JPMorganChase and could negatively affect its operations and reduce its earnings with respect to that jurisdiction. In addition, conducting business in a jurisdiction with a less predictable legal, regulatory or judicial framework could require JPMorganChase to devote significant additional resources to understanding, and operating its businesses in compliance with, applicable law and judicial precedents in that jurisdiction, and there can be no assurance that JPMorganChase will always be successful in doing so.\n12\nJPMorganChase's business and operations could be negatively affected by governmental policies that discourage or penalize doing business with certain industries or that require specific business practices.\nJPMorganChase\u2019s businesses and results of operations could be adversely affected by actions or initiatives by governmental authorities or officials that:\n\u2022\nseek to discourage financial institutions from doing business with companies engaged in certain industries, or conversely, to penalize financial institutions that elect not to do business with such companies, or\n\u2022\nmandate specific business practices for companies operating in the relevant jurisdiction.\nGovernmental policies may differ or conflict across jurisdictions, which could lead to negative consequences for JPMorganChase regardless of the course of action that it takes or elects not to take, including:\n\u2022\nprohibitions or restrictions on doing business within a particular jurisdiction, or with governmental entities in a jurisdiction\n\u2022\nthe threat of enforcement actions, including under antitrust or other anti-competition laws, and\n\u2022\nreputational harm.\nChanges in the requirements for the regulatory evaluation of JPMorganChase\u2019s resolution plan could increase its funding or operational costs or require restructuring or curtailment of its businesses.\nJPMorganChase must periodically submit a detailed resolution plan to the Federal Reserve and the FDIC for its rapid and orderly resolution in bankruptcy, without extraordinary government support, in the event of material financial distress or failure. The regulatory requirements concerning resolution plans and the evaluation of JPMorganChase\u2019s resolution plan by the banking regulators could change over time.\nAny such changes could result in JPMorganChase making changes to its legal entity structure or to certain of its internal or external activities, which could increase its funding or operational costs, or hamper its ability to serve clients and customers.\nIf the Federal Reserve and the FDIC were both to determine that a resolution plan submitted by JPMorganChase has deficiencies, they could jointly impose more stringent capital, leverage or liquidity requirements, or restrictions on JPMorganChase\u2019s growth, activities or operations. The banking regulators could also require that JPMorganChase restructure, reorganize or divest assets or businesses in ways that could materially and adversely affect JPMorganChase\u2019s operations and strategy.\nHolders of JPMorgan Chase & Co.\u2019s debt and equity securities will absorb losses if it were to enter into a resolution.\nFederal Reserve rules require JPMorgan Chase & Co. (the \u201cParent Company\u201d) to maintain minimum levels of unsecured external long-term debt and other loss-absorbing capacity with specific terms (\u201celigible LTD\u201d) to recapitalize JPMorganChase\u2019s operating subsidiaries if the Parent Company were to enter into a resolution either in a bankruptcy proceeding under Chapter 11 of the U.S. Bankruptcy Code, or in a receivership administered by the FDIC under Title II of the Dodd-Frank Act (\u201cTitle II\u201d). If the Parent Company were to enter into a resolution, holders of eligible LTD, other unsecured creditors and holders of equity securities of the Parent Company will absorb the losses of the Parent Company and its subsidiaries.\nThe preferred \u201csingle point of entry\u201d strategy under JPMorganChase\u2019s resolution plan contemplates that the Parent Company would enter bankruptcy proceedings and JPMorganChase\u2019s material subsidiaries would be recapitalized, as needed, so that they could continue normal operations or subsequently be divested or wound down in an orderly manner. As a result, the Parent Company\u2019s losses and any losses incurred by its subsidiaries would be imposed first on holders of the Parent Company\u2019s equity securities and thereafter on its unsecured creditors, including holders of eligible LTD. Claims of the Parent Company\u2019s shareholders and unsecured creditors would have a junior position to the claims of creditors of JPMorganChase\u2019s subsidiaries and to the claims of priority (as determined by statute) and secured creditors of the Parent Company.\nAccordingly, in a resolution of the Parent Company in bankruptcy, unsecured creditors of the Parent Company, including holders of eligible LTD of the Parent Company, would realize value only to the extent available to the Parent Company as a shareholder of JPMorgan Chase Bank, N.A. and its other subsidiaries, and only after any claims of priority and secured creditors of the Parent Company have been fully repaid.\nThe FDIC has similarly indicated that a single point of entry recapitalization model would be its expected strategy to resolve a systemically important financial institution, such as the Parent Company, under Title II. However, the FDIC has not formally adopted or committed to any specific resolution strategy.\nIf the Parent Company were to approach, or enter into, a resolution, none of the Parent Company, the Federal Reserve or the FDIC is obligated to follow JPMorganChase\u2019s preferred resolution strategy, and losses to unsecured creditors of the Parent Company, including holders of eligible LTD, and to holders of equity securities of the Parent Company, under whatever strategy is ultimately followed, could be\n13\nPart I\ngreater than they might have been under JPMorganChase\u2019s preferred strategy.\nPolitical\nJPMorganChase\u2019s businesses could be negatively affected by economic uncertainty resulting from political and geopolitical developments.\nPolitical developments in the U.S. and other countries could cause uncertainty in the economic environment and market conditions in which JPMorganChase operates. Certain governmental policies or actions could significantly affect U.S. and global economic growth and cause higher volatility in the financial markets, including:\n\u2022\nmonetary policies and actions taken by central banks, including any sustained large-scale asset purchases, any suspension or reversal of those actions, and changes in interest rate levels\n\u2022\nfiscal policies, including with respect to taxation and spending\n\u2022\nforeign policies that emphasize national interests\n\u2022\neconomic or financial sanctions\n\u2022\nthe implementation of tariffs and other trade policies\n\u2022\nrequirements to relocate business activities or operations\n\u2022\ndeployment of the military\n\u2022\nchanges to immigration policies, or\n\u2022\nactions or inactions by a government related to emergencies.\nThese types of political developments, as well as heightened geopolitical tensions, could:\n\u2022\nerode investor or consumer confidence in the U.S. economy and financial markets, which could potentially undermine the status of the U.S. dollar as a safe haven currency\n\u2022\nprovoke retaliatory countermeasures by other countries or otherwise heighten tensions in trade or diplomatic relations\n\u2022\nincrease the risk of targeted cyber attacks\n\u2022\nincrease concerns about whether the U.S. government will be funded and will be able to service its outstanding debt\n\u2022\nresult in periodic shutdowns of the U.S. government\n\u2022\ninfluence investor perceptions concerning government support of certain sectors of the economy or the economy as a whole\n\u2022\ninfluence monetary policy actions of the Federal Reserve to moderate the economic impact of political developments, including decisions on interest rate levels and asset purchases and sales\n\u2022\nadversely affect the financial condition or credit ratings of clients and counterparties with which JPMorganChase does business, or\n\u2022\ncause JPMorganChase to forgo business opportunities that it might otherwise pursue.\nThese factors could lead to:\n\u2022\nslower growth rates, rising inflation or recession\n\u2022\ndisruptions in labor markets\n\u2022\ngreater market volatility\n\u2022\na contraction of available credit and the widening of credit spreads\n\u2022\nU.S. dollar currency fluctuations\n\u2022\nlower investments in a particular country or sector of the economy\n\u2022\nlarge-scale sales of government debt and other debt and equity securities\n\u2022\nreduced commercial activity among trading partners or disruptions to supply chains, or\n\u2022\nthe formation of or changes in political or economic alliances or treaties.\nThese risks could become highly correlated or combine in unexpected ways under certain circumstances, including geopolitically challenging situations in regions such as Russia, the Middle East and China.\nAny of the foregoing potential outcomes could cause JPMorganChase to:\n\u2022\nsuffer losses on its market-making positions or in its investment portfolio\n\u2022\nreduce its liquidity and capital levels\n\u2022\nincrease the allowance for credit losses or recognize higher net charge-offs\n\u2022\nhamper its ability to deliver products and services to its clients and customers\n\u2022\nweaken its results of operations and financial condition or credit ratings, or\n\u2022\nbecome subject to prolonged litigation.\nMarket\nAdverse economic and market events and conditions could negatively affect JPMorganChase\u2019s results of operations and investment and market-making positions.\nJPMorganChase\u2019s results of operations could be negatively affected by the occurrence or persistence of adverse changes in any of the following:\n\u2022\nthe U.S. and global economies\n\u2022\ninvestor, consumer and business sentiment, or confidence in the financial markets\n\u2022\ninflation, deflation, recession or employment\n\u2022\nthe availability and cost of capital, liquidity and credit\n\u2022\nlevels and volatility of interest rates, credit spreads or market prices of currencies, securities and\n14\ncommodities, and the duration of any such changes, and\n\u2022\neconomic and geopolitical effects of extraordinary events beyond JPMorganChase\u2019s control.\nThe above factors could be affected by global economic, market and political events and conditions, including the regulatory environment, monetary policies, trade policies, and actions taken by central banks or governmental authorities.\nIn addition, JPMorganChase\u2019s investment portfolio and market-making businesses could suffer losses due to unanticipated market events and conditions, including:\n\u2022\nsevere declines in asset values\n\u2022\nunexpected credit events, credit rating downgrades and large counterparty losses\n\u2022\ndisruption of trade routes and supply chains globally\n\u2022\nevents or conditions that cause previously uncorrelated market factors to become correlated (and vice versa)\n\u2022\nthe inability to effectively hedge risks related to market-making and investment portfolio positions, or\n\u2022\nother market risks that may not have been adequately considered when developing, structuring or pricing a financial instrument.\nAny significant losses in JPMorganChase\u2019s investment portfolio or from market-making activities could reduce its profitability and its liquidity and capital levels, and thereby constrain the growth of its businesses.\nJPMorganChase\u2019s consumer businesses could be negatively affected by adverse economic conditions and adverse impacts of governmental policies.\nJPMorganChase\u2019s consumer businesses are particularly affected by U.S. and global economic conditions, including:\n\u2022\nthe distribution of personal and household income\n\u2022\nunemployment or underemployment\n\u2022\nchanges in housing prices\n\u2022\nthe level of inflation and its effect on prices for goods and services\n\u2022\nconsumer and small business confidence levels\n\u2022\nprolonged periods of exceptionally high or low interest rates, or significant changes to interest rates\n\u2022\nchanges in the value of collateral such as residential real estate and vehicles, and\n\u2022\nchanges in consumer spending or in the level of consumer debt.\nHigh unemployment levels could reduce personal and household income, which could degrade consumer credit performance if consumers struggle to service their debts. Adverse economic conditions could also lead to an increase in delinquencies, an increase in the allowance for credit losses or higher net charge-offs,\nwhich could reduce JPMorganChase\u2019s earnings. These consequences could be significantly worse if high levels of consumer debt, such as outstanding student loans, impair the ability of customers to pay their other consumer loan obligations, or in certain geographies where declining industrial or manufacturing activity has resulted in or could result in higher levels of unemployment. In addition, JPMorganChase\u2019s earnings from its consumer businesses could be adversely affected if customer demand for the products and services offered by its consumer businesses is diminished by sustained low growth, low or negative interest rates, inflationary pressures, or recessionary conditions. Furthermore, governmental policies and actions, including those relating to pricing of products, taxation, medical insurance, education, immigration, and housing, or those that impact employment status, could reduce consumer disposable income and decrease JPMorganChase's earnings from its consumer businesses.\nUnfavorable market and economic conditions could adversely affect JPMorganChase\u2019s wholesale businesses.\nMarket and economic factors can affect the volume of transactions and advisory engagements for which JPMorganChase is engaged and the related revenue from those activities. These factors could also influence the willingness of other financial institutions and investors to participate in capital markets transactions that JPMorganChase manages.\nFurthermore, any significant and sustained deterioration in market conditions could reduce fee revenue due to lower transaction volumes, including when clients are unwilling or unable to refinance their outstanding debt obligations. Additionally, the profitability of JPMorganChase\u2019s capital markets activities could be impacted if it needs to dispose of portions of credit commitments at a loss or hold larger residual positions in credit commitments that cannot be sold at favorable prices.\nThe fees that JPMorganChase earns from managing client assets or holding assets under custody for clients could be diminished by declining asset values or other adverse macroeconomic conditions. For example, higher interest rates or a market downturn could affect the valuation of client assets that JPMorganChase manages or holds under custody, resulting in lower revenue from fees that are based on the amount of assets under management or custody. Similarly, adverse macroeconomic or market conditions could prompt outflows from JPMorganChase funds or accounts, or cause clients to invest in products that generate lower revenue. Substantial and unexpected withdrawals from a JPMorganChase fund could also hamper the investment performance of the fund, particularly if the outflows create the need for the fund to dispose of fund assets at disadvantageous times or\n15\nPart I\nprices, and could lead to further withdrawals based on the weaker investment performance.\nAn adverse change in market conditions in particular segments of the economy, or sustained changes in consumer behavior that affect specific economic sectors, could have a material adverse effect on clients of JPMorganChase whose operations or financial condition are significantly impacted by the health or stability of those segments or economic sectors, as well as clients that are engaged in related businesses. JPMorganChase could incur credit losses on its loans and other commitments to clients that operate in, or are significantly impacted by, any sector of the economy under stress.\nAn economic downturn or sustained changes in consumer behavior that result in shifts in consumer and business spending could also have a negative impact on certain of JPMorganChase\u2019s wholesale clients, and thereby diminish JPMorganChase\u2019s earnings from its wholesale operations. For example, clients that rely on rental income from commercial real estate properties could be negatively affected by sustained adverse economic conditions or circumstances (such as hybrid work models) that reduce tenancies. These types of developments could depress property values, impair the ability of clients to service or refinance their loans and lead to an increase in foreclosures. These consequences could result in JPMorganChase experiencing an increase in the allowance for credit losses, higher delinquencies, defaults and charge-offs within its commercial real estate loan portfolio and incurring higher costs for servicing a larger volume of delinquent loans in that portfolio. An increase in foreclosures could also result in higher operational risk associated with JPMorganChase owning and managing real property, and any inadequacy in governance or control over the foreclosed properties could result in regulatory scrutiny and reputational harm.\nChanges in interest rates and credit spreads could adversely affect JPMorganChase\u2019s earnings or its liquidity and capital levels.\nJPMorganChase may generally be expected to earn higher net interest income when interest rates are high or increasing. However, higher interest rates could also result in:\n\u2022\nfewer originations of commercial and residential real estate loans\n\u2022\nlosses on underwriting exposures or increases in client-specific downgrades\n\u2022\nincreased financing costs for clients, which could lead to an increase in the allowance for credit losses and higher net charge-offs\n\u2022\nthe loss of deposits, including where customers transition to higher-yielding products\n\u2022\nlosses on available-for-sale (\u201cAFS\u201d) securities held in the investment securities portfolio\n\u2022\nless liquidity in the financial markets, and\n\u2022\nhigher funding costs.\nAll of these outcomes could adversely affect JPMorganChase\u2019s earnings or its liquidity and capital levels, with more severe impacts in a prolonged period of high interest rates.\nHigher interest rates could also negatively affect the payment performance on loans within JPMorganChase\u2019s consumer and wholesale loan portfolios that are linked to variable interest rates. If borrowers of variable rate loans reduce or stop making payments at higher interest rates, JPMorganChase could incur losses as well as increased operational costs related to servicing a higher volume of delinquent loans. On the other hand, a low or negative interest rate environment could cause:\n\u2022\ncompressed net interest margins, which could result in lower earnings on JPMorganChase\u2019s investment securities portfolio\n\u2022\nadverse or unanticipated changes in depositor behavior, which could negatively affect JPMorganChase\u2019s broader asset and liability management strategies, and\n\u2022\na reduction in the value of JPMorganChase\u2019s mortgage servicing rights (\u201cMSRs\u201d) asset, resulting in decreased revenues.\nWhen credit spreads widen, it becomes more expensive for JPMorganChase to borrow.\nJPMorganChase\u2019s credit spreads could widen or narrow not only due to events and circumstances that are specific to JPMorganChase but also as a result of general economic and geopolitical events and conditions. Changes in JPMorganChase\u2019s credit spreads could negatively affect its earnings on certain liabilities, such as derivatives, that are recorded at fair value.\nJPMorganChase\u2019s results could be materially affected by market fluctuations and significant changes in the valuation of financial instruments.\nThe value of securities, derivatives and other financial instruments that JPMorganChase owns or in which it makes markets could be materially affected by market fluctuations. Market volatility, illiquid market conditions and other fluctuations in the financial markets could make it extremely difficult to value certain financial instruments. Subsequent valuations of financial instruments in future periods, in light of factors then prevailing, could result in significant changes in the value of these instruments. In addition, when JPMorganChase disposes of a financial instrument, the price that it realizes will depend on demand and liquidity in the market at the time of disposition, and that price could be materially lower than the current fair\n16\nvalue of the instrument. Any of these factors could cause a decline in the value of financial instruments that JPMorganChase owns or in which it makes markets, which could have an adverse effect on its results of operations. Furthermore, JPMorganChase\u2019s hedging and other risk management strategies may not always be effective, and it could incur significant losses, if extreme market events were to occur.\nCredit\nJPMorganChase could be negatively affected by adverse changes in the financial condition of clients, counterparties, CCPs and other market participants.\nJPMorganChase routinely executes transactions with clients and counterparties such as corporations, financial institutions, asset managers, hedge funds, securities exchanges and government entities globally. Many of these transactions expose JPMorganChase to the credit risk of its clients and counterparties, and JPMorganChase could incur losses and become involved in disputes and litigation in connection with a default by a client or counterparty. JPMorganChase could also face losses or liability if a financial institution providing custodial services for client assets becomes insolvent.\nIf a CCP through which JPMorganChase executes contracts suffers a financial or operational failure or otherwise defaults, JPMorganChase would be required to replace the relevant contracts, which would increase its operational costs and potentially result in losses. In addition, if a member of a CCP in which JPMorganChase is also a member defaults on its obligations to the CCP, JPMorganChase could incur losses due to requirements that each member of the CCP absorb a portion of those losses. Furthermore, JPMorganChase could be subject to bearing its share of non-default losses incurred by a CCP, including losses from custodial, settlement or investment activities or due to cyber or other security breaches.\nAs part of its clearing services activities, JPMorganChase is exposed to the risk of nonperformance by its clients, which it seeks to mitigate by requiring clients to provide adequate collateral. JPMorganChase is also exposed to intra-day credit risk of its clients in connection with providing cash management, clearing, custodial and other transaction services. If such a client becomes bankrupt or insolvent, JPMorganChase could:\n\u2022\nincur losses\n\u2022\nbecome involved in disputes and litigation with CCPs, the client\u2019s bankruptcy estate and other creditors, or\n\u2022\nbe subject to investigations by governmental authorities.\nIn addition, JPMorganChase has in the past, and could in the future, experience instances in which borrowers or other counterparties engage in fraudulent activity related to the accounting, reporting or representation\nof collateral. Such practices have resulted and could in the future result in losses for JPMorganChase potentially undermining the effectiveness of collateral requirements and negatively affecting JPMorganChase's financial condition and results of operations.\nAll of the foregoing events could increase JPMorganChase\u2019s operational and litigation costs, and JPMorganChase could suffer losses to the extent that the realized value of any collateral that it has received is insufficient to cover those losses.\nTransactions with governmental entities can expose JPMorganChase to enhanced sovereign, credit, operational, legal and reputation risks. Governmental entities may claim that actions taken by government officials were beyond the legal authority of those officials or repudiate transactions authorized by a previous incumbent government. These types of actions have in the past caused, and could in the future cause, JPMorganChase to suffer losses or hamper its ability to conduct business in the relevant jurisdiction. In addition, JPMorganChase could incur losses if applicable law limits its ability to resolve disputes and litigation when a client in that jurisdiction defaults or otherwise fails to make agreed-upon payments.\nDisputes could arise with counterparties to derivatives contracts concerning the terms, the settlement procedures or the value of underlying collateral. The resolution of those disputes could cause JPMorganChase to incur losses, including unexpected transaction, operational and legal costs. These consequences could also impair JPMorganChase\u2019s ability to effectively manage its credit risk exposure from its market activities, or cause reputational harm.\nThe financial or operational failure of a significant market participant, such as a major financial institution or a CCP, or concerns about the creditworthiness or operational sustainability of one or more market participants, could cause substantial and cascading disruption within the financial markets, including in circumstances where coordinated action by multiple other market participants is required to address the problem. JPMorganChase\u2019s businesses could be significantly disrupted by such an event, especially if it has significant interrelationships with, and credit exposure to, the faltering market participant, or if the event causes other market participants to default, incur significant losses or experience liquidity issues.\nJPMorganChase could suffer losses if the value of collateral declines.\nDuring periods of market stress or illiquidity, JPMorganChase\u2019s credit risk could increase when:\n\u2022\nJPMorganChase fails to realize the estimated value of the collateral it holds\n\u2022\ncollateral is liquidated at prices that are insufficient to recover the full amount owed to it, or\n17\nPart I\n\u2022\ncounterparties are unable to post collateral for operational or other reasons.\nFurthermore, borrowers may under-maintain or misrepresent the condition or existence of collateral, or at liquidation, collateral could be subject to competing claims, limiting JPMorganChase's ability to recover amounts owed, or disputes with counterparties concerning the valuation of collateral could increase during significant market stress, volatility or illiquidity. JPMorganChase could suffer losses in these situations if it is unable to realize the fair value of collateral or to manage declines in the value of collateral.\nJPMorganChase could incur significant losses arising from concentrations of credit and market risk.\nJPMorganChase could be exposed to greater credit and market risk if groupings of its clients or counterparties, or obligors on securities and other financial instruments:\n\u2022\nengage in similar or related businesses or in related industries\n\u2022\noperate in the same geographic region, or\n\u2022\nhave business profiles that could cause their ability to meet their obligations to be similarly affected by changes in economic conditions.\nFor example, a significant deterioration in the credit quality of a counterparty, borrower or other obligor could lead to concerns about the creditworthiness of other parties in similar, related or dependent industries. This type of interrelationship could exacerbate JPMorganChase\u2019s credit, liquidity and market risk exposure, potentially causing losses. In addition, JPMorganChase could be required to increase the allowance for credit losses or establish other reserves with respect to certain clients, industries or country exposures in order to align with regulatory directives or expectations.\nSimilarly, challenging economic conditions that affect a particular industry or geographic area could lead to concerns about the credit quality of counterparties, borrowers or other obligors not only in that industry or geography but also in related or dependent industries, wherever located. These conditions could also heighten concerns about the ability of customers of JPMorganChase\u2019s consumer businesses who live in those areas or work in those industries to meet their obligations.\nJPMorganChase\u2019s consumer businesses could also be harmed by an excessive expansion of consumer credit by competitors. Heightened competition for certain types of consumer loans could lead to significant price reductions for those loans or providing loans to less-creditworthy borrowers. If large numbers of consumers subsequently default on their loans, this could impair their ability to repay obligations owed to JPMorganChase and result in an increase in the allowance for credit losses and higher charge-offs.\nMore broadly, widespread defaults on consumer debt could lead to recessionary conditions in the U.S. economy, and JPMorganChase\u2019s consumer businesses could earn lower revenues in such an environment.\nFurthermore, the interconnectivity across credit markets increases the risk that the significant expansion of private credit could worsen losses among non-bank lenders and their borrowers, particularly if stress or defaults spread to broader funding and credit markets. Such developments could impair asset valuations, reduce market-wide liquidity, disrupt borrowers\u2019 ability to refinance, and increase default rates, especially if non-bank lenders have weaker underwriting standards, loans are less liquid, or transparency is limited. These outcomes could adversely affect JPMorganChase\u2019s results of operations and lead to losses on market-making positions in its wholesale businesses.\nIf JPMorganChase is unable to reduce positions effectively during a market dislocation, this could increase both the market and credit risks associated with those positions and the level of risk-weighted-assets (\u201cRWA\u201d) that JPMorganChase holds on its balance sheet. These factors could adversely affect JPMorganChase\u2019s capital position, funding costs and the profitability of its businesses.\nLiquidity\nJPMorganChase\u2019s ability to operate its businesses could be impaired if its liquidity is constrained.\nJPMorganChase\u2019s liquidity could be impacted by factors such as:\n\u2022\nmarket-wide illiquidity or disruption\n\u2022\nactions by governmental authorities, including changes in regulatory requirements relating to liquidity or capital\n\u2022\nactions taken by the Federal Reserve to reduce its balance sheet, which could reduce deposits held by JPMorganChase and other financial institutions\n\u2022\ninability to sell assets, or to sell at favorable times or prices\n\u2022\ndefault by a CCP or other significant market participant\n\u2022\nunanticipated outflows of cash or collateral\n\u2022\nunexpected loss of deposits, including due to deposit pricing or migration to other investment products\n\u2022\nhigher than anticipated draws on lending-related commitments, and\n\u2022\nlack of market or customer confidence in JPMorganChase or financial institutions in general.\nA reduction in JPMorganChase\u2019s liquidity could be caused by events beyond its control. For example, JPMorganChase\u2019s funding costs could increase and its access to traditional sources of liquidity could be\n18\nlimited during periods of market stress, low investor confidence or significant market illiquidity.\nJPMorganChase may need to raise funding from alternative sources if its access to stable and lower-cost funding, such as deposits and borrowings from Federal Home Loan Banks, is reduced. Alternative funding could be more expensive or limited. JPMorganChase\u2019s funding costs could also be negatively affected by actions that it may take in order to satisfy regulatory requirements, including those relating to:\n\u2022\nliquidity and funding\n\u2022\nits resolution plan, or\n\u2022\nthe pre-positioning of liquidity in certain subsidiaries outside the U.S.\nMore generally, if JPMorganChase fails to effectively manage its liquidity, this could constrain its ability to fund or invest in its businesses and subsidiaries, and thereby adversely affect its results of operations.\nJPMorgan Chase & Co. is a holding company and depends on its subsidiaries for funding to make payments on its outstanding securities.\nThe Parent Company, JPMorgan Chase & Co., is a holding company that holds the stock of JPMorgan Chase Bank, N.A. and an intermediate holding company, JPMorgan Chase Holdings LLC (the \u201cIHC\u201d). In addition to holding the stock of other JPMorganChase subsidiaries, the IHC owns other assets and provides intercompany lending to the Parent Company. The Parent Company must contribute to the IHC substantially all the net proceeds that it receives from securities issuances.\nThe ability of JPMorgan Chase Bank, N.A. and the IHC to make payments to the Parent Company is limited. JPMorgan Chase Bank, N.A. is subject to regulatory restrictions and requirements relating to the dividends that it can pay to the Parent Company, and the IHC is prohibited from paying dividends or extending credit to the Parent Company if certain capital or liquidity thresholds are breached, or if limits are otherwise imposed by the Parent Company\u2019s management or Board of Directors.\nAs a result of these arrangements, the Parent Company is generally dependent on receiving dividends from JPMorgan Chase Bank, N.A. and dividends and borrowings from the IHC in order to:\n\u2022\npay interest on its debt securities\n\u2022\npay dividends on its equity securities\n\u2022\nredeem or repurchase outstanding securities, and\n\u2022\nfulfill its other payment obligations.\nThe capital and liquidity thresholds to which JPMorgan Chase Bank, N.A. and the IHC are subject could result in the Parent Company seeking protection under bankruptcy laws or otherwise entering into resolution\nproceedings sooner than if such limitations did not exist.\nJPMorganChase\u2019s liquidity and cost of funding could be adversely affected by downgrades in its credit ratings.\nJPMorgan Chase & Co. and certain of its principal subsidiaries are rated by credit rating agencies, which evaluate general, firm-specific and industry-specific factors when determining credit ratings, including:\n\u2022\nexpected future profitability\n\u2022\nrisk management practices\n\u2022\nlegal expenses\n\u2022\nregulatory developments\n\u2022\nratings differentials between bank holding companies and their bank and non-bank subsidiaries\n\u2022\nassumptions about government support, and\n\u2022\neconomic and geopolitical developments.\nJPMorganChase has experienced credit ratings downgrades in the past, and there is no assurance that JPMorganChase\u2019s credit ratings will not be downgraded in the future. Furthermore, any such downgrade could occur at a time of broader market instability, limiting JPMorganChase\u2019s options for responding.\nA downgrade in JPMorganChase\u2019s credit ratings could curtail its business activities and its profitability, including by:\n\u2022\nreducing its access to capital markets\n\u2022\nmaterially increasing its cost of issuing and servicing securities\n\u2022\ntriggering additional collateral or funding requirements, and\n\u2022\ndecreasing the number of investors and counterparties that are willing or permitted to do business with or lend to JPMorganChase.\nAny rating downgrade could also increase the credit spreads charged by market participants for taking credit risk on JPMorgan Chase & Co. and its subsidiaries. This could, in turn, adversely affect the value of debt and other obligations of JPMorgan Chase & Co. and its subsidiaries.\nCapital\nJPMorganChase\u2019s ability to distribute capital to shareholders, and to support its business activities could be limited if it does not satisfy applicable regulatory capital requirements.\nJPMorganChase is subject to various regulatory capital requirements, and the amount of capital that it is required to hold under those requirements could increase at any given time due to factors such as:\n19\nPart I\n\u2022\nactions by banking regulators, as well as changes in applicable law or how applicable law is implemented by banking regulators\n\u2022\nchanges in the composition of JPMorganChase\u2019s balance sheet or developments that could increase RWA, such as increased market risk, customer delinquencies, client credit rating downgrades or other factors, and\n\u2022\nincreases in estimated stress losses as determined by the Federal Reserve under CCAR, which could increase JPMorganChase\u2019s SCB.\nAlthough more likely in times of stress, JPMorganChase may use its regulatory capital buffers allowing capital ratios to decline below regulatory requirements, subjecting it to restrictions on capital distributions and discretionary bonus payments to its executive officers.\nAny failure by or inability of JPMorganChase to maintain the required level and composition of capital, any decision by JPMorgan Chase to use its regulatory buffers allowing capital ratios to decline below regulatory requirements or unfavorable changes in applicable capital requirements, could have an adverse impact on JPMorganChase\u2019s shareholders by:\n\u2022\nreducing the amount of common stock that JPMorganChase is permitted to repurchase\n\u2022\nrequiring the issuance of, or prohibiting the redemption of, capital instruments in a manner inconsistent with JPMorganChase\u2019s capital management strategy\n\u2022\nconstraining the amount of dividends that can be paid on common stock, or\n\u2022\ncurtailing JPMorganChase\u2019s business activities or operations.\nOperational\nJPMorganChase\u2019s businesses could be adversely affected by the failure or disruption of operational systems on which they depend.\nIf the operational systems on which JPMorganChase\u2019s businesses depend, including those of acquired businesses and external parties, are unable to meet JPMorganChase\u2019s operational requirements or bank regulatory standards, or if they fail or have other significant shortcomings, JPMorganChase could be materially and adversely affected. JPMorganChase\u2019s businesses rely on its operational systems to process, record, monitor and report large amounts of information continuously, accurately, securely, and in a timely manner. These operational systems include financial, accounting, transaction execution, reporting and settlement, data processing and other systems, as well as supporting devices. The effective functioning of these operational systems depends on a variety of factors, including JPMorganChase\u2019s ability to:\n\u2022\nproperly design, install, maintain, and train its employees on the use of its systems\n\u2022\npopulate its systems with accurate, complete, up-to-date and uncorrupted information\n\u2022\nupgrade its systems on a regular and timely basis in line with technological advancements and evolving security requirements\n\u2022\nmaintain the security and operational continuity of its systems, including by carefully managing any changes introduced to its systems\n\u2022\nprevent unauthorized access and the misuse of access to its systems, and\n\u2022\nadhere to applicable law relating to its systems, particularly in regions where JPMorganChase may face a heightened risk of malicious activity.\nJPMorganChase has experienced and expects that it will continue to experience failures and disruptions in the stability of its operational systems, including:\n\u2022\ndegraded performance of data processing systems\n\u2022\ndata quality issues\n\u2022\ndisruptions of network connectivity\n\u2022\nmalfunctioning software\n\u2022\ndisruptions in its ability to access and use the operational systems of third parties, and\n\u2022\ninterruptions in service from third-party service providers.\nThese incidents have resulted in various negative effects for customers, including:\n\u2022\nthe inability to access account information or transact through ATM, internet or mobile channels\n\u2022\nthe exfiltration of customer personal data\n\u2022\nthe recording of duplicative transactions, and\n\u2022\nextended delays for call center services.\nThere can be no assurance that these and other types of operational failures or disruptions will not occur in the future.\nJPMorganChase\u2019s ability to effectively manage the stability of its operational systems and infrastructure could be hindered by many factors, any of which could have a negative impact on JPMorganChase and its clients, customers and counterparties, including:\n\u2022\nchallenges in maintaining and upgrading systems and infrastructure as the speed, frequency, volume, interconnectivity and complexity of transactions and other information flows continue to increase\n\u2022\nattempts by third parties to defraud JPMorganChase and its clients and customers, which continue to increase, evolve and become more complex, as well as increased volumes of these attempts during periods of market disruption or economic uncertainty\n20\n\u2022\nerrors made by JPMorganChase or another market participant, whether inadvertent or malicious, which could cause widespread system disruption\n\u2022\nweaknesses or shortcomings in operational systems that may not be detected in a timely manner\n\u2022\nisolated or seemingly insignificant errors in operational systems that could compound, or migrate to other systems, becoming larger issues\n\u2022\nfailures in synchronization or encryption software, or degraded performance of microprocessors, which could cause disruptions in operational systems or in the ability of systems to communicate with each other, and\n\u2022\nthird parties that may try to block the use of key technology solutions by claiming that the use infringes on their intellectual property rights.\nJPMorganChase also depends on its ability to access and use the operational systems of third parties, including:\n\u2022\ncustodians\n\u2022\nvendors, including providers of security, technology and data and cloud computing services, and\n\u2022\nother market participants, such as clearing and payment systems, CCPs and securities exchanges.\nThe inaccessibility, failure or other disruption of an internal or external operational system upon which JPMorganChase\u2019s businesses depend could adversely affect JPMorganChase and its clients and customers, and result in unfavorable ripple effects in the financial markets, including:\n\u2022\ndelays or other disruptions in providing services, including the provision of liquidity or information to clients and customers\n\u2022\nimpairment of JPMorganChase\u2019s ability to execute transactions, including delays or failures in the confirmation or settlement of transactions or in obtaining access to funds or other assets required for settlement\n\u2022\nthe erroneous execution of funds transfers, capital markets trades or other transactions\n\u2022\nfinancial losses, including due to loss-sharing requirements of CCPs, payment systems or other market infrastructures, or as possible restitution to clients and customers\n\u2022\nhigher operational costs associated with replacing services provided by a system that has experienced a failure or other disruption\n\u2022\nlimitations on JPMorganChase\u2019s ability to collect data needed for its business and operations\n\u2022\nloss of confidence in the ability of JPMorganChase, or financial institutions generally, to protect against and withstand operational disruptions\n\u2022\nsignificant exposure to litigation and penalties, and\n\u2022\nreputational harm.\nJPMorganChase\u2019s interconnectedness with clients, customers and other external parties could be a source of significant operational risk.\nJPMorganChase could be exposed to operational risk if it is unable to access and use external operational systems, including during failures or cyber attacks related to those systems or other third-party systems. Similarly, retailers, payment systems and processors, data aggregators, and other external parties with which JPMorganChase\u2019s customers do business could increase JPMorganChase\u2019s operational risk. This is particularly the case where activities of customers or other parties are beyond JPMorganChase\u2019s security and control systems, including through the use of the internet, cloud computing services, and mobile devices or services.\nJPMorganChase\u2019s interconnectivity with clients, customers and other external parties continues to expand, which increases the risk of failure or cyber attacks with respect to the systems of those parties. Any systems failure, security breach, or human error or misconduct that affects clients, customers or external parties could require JPMorganChase to take steps to protect the integrity of its own operational systems or to safeguard confidential information, including restricting the access of its customers to their accounts. These actions could increase JPMorganChase\u2019s operational costs and potentially diminish customer satisfaction and confidence in JPMorganChase.\nFurthermore, the widespread interconnectivity among financial institutions, clearing banks, CCPs, payments processors, financial technology companies, securities exchanges, clearing houses, financial messaging networks and other financial market infrastructures increases the risk that the disruption of an operational system involving one entity could cause industry-wide operational disruptions that could materially affect JPMorganChase\u2019s ability to conduct business. In addition, the risks associated with the disruption of an operational system of a third-party could be exacerbated if the services provided by that system are widely used by market participants.\nA successful cyber attack could cause significant harm to JPMorganChase and its clients and customers.\nJPMorganChase experiences numerous cyber attacks on its computer systems, software, networks and other technology assets. Cyber attacks could take many forms, and may be designed to:\n\u2022\nintroduce computer viruses or malicious code (i.e., \u201cmalware\u201d) into JPMorganChase\u2019s systems.\n\u2022\nobtain unauthorized access to JPMorganChase\u2019s systems or to confidential information belonging to\n21\nPart I\nJPMorganChase or its clients, customers, counterparties or employees\n\u2022\nmanipulate or destroy data\n\u2022\ndisrupt, sabotage or degrade service on JPMorganChase\u2019s systems and websites, including those that provide online banking and other services\n\u2022\nsteal money, or\n\u2022\nextort money through the use of so-called \u201cransomware.\u201d\nThreat actors that perpetrate cyber attacks include individuals or groups that are:\n\u2022\nsponsored by, or acting on behalf of, hostile countries or terrorist organizations\n\u2022\ncyber-criminals, or\n\u2022\nengaged in using technology to promote a political or social agenda (i.e., \u201chacktivists\u201d).\nJPMorganChase has experienced security breaches due to cyber attacks in the past, and future breaches are inevitable. Any such breach could result in serious and harmful consequences for JPMorganChase or its clients and customers.\nJPMorganChase cannot guarantee that it will always detect cybersecurity threats to its systems or implement effective preventive measures against those threats. The reasons for this include:\n\u2022\nthe techniques used in cyber attacks evolve frequently and increase in sophistication, and therefore a cyber attack may not be recognized until launched or may go undetected for extended periods\n\u2022\nit is possible that a third-party, after establishing a foothold on an internal network without being detected, may gain access to other networks and systems\n\u2022\ncyber attacks can originate from a wide variety of sources, including certain threat actors that are well-resourced and can sustain malicious activities for extended periods, and\n\u2022\nJPMorganChase does not have control over the cybersecurity of the systems of the numerous clients, customers, counterparties and third-party service providers with which it does business.\nThe cybersecurity risks that JPMorganChase faces could be intensified by factors such as:\n\u2022\nincreased volume and complexity of cyber attacks during periods of heightened geopolitical tensions\n\u2022\ntechnological advances such as artificial intelligence (\u201cAI\u201d) and quantum computing that may enable malicious actors to develop more advanced social engineering attacks, including targeted phishing attacks, and\n\u2022\ntechnological advances which may counteract or nullify existing information security protections,\nincluding cryptographic protections, potentially exposing data.\nIn addition, JPMorganChase could be required to make significant investments in technology in order to transition effectively to more robust security protections, including quantum-resistant encryption. Any such transition may not be completed before relevant threats become operational, and JPMorganChase\u2019s interconnectedness with third parties who may be slower to adopt such protections could further increase its vulnerability to data compromise.\nFurthermore, a third-party could misappropriate confidential information obtained by intercepting signals or communications from mobile devices used by JPMorganChase\u2019s employees.\nJPMorganChase could become increasingly vulnerable to cyber attacks if it does not, in a timely manner, identify and address emerging threats, known vulnerabilities or shortcomings in its cybersecurity controls, or if it fails to prioritize or complete enhancements to address them particularly in jurisdictions that could pose a heightened risk to its operations, including enhancements relating to:\n\u2022\npreventing unauthorized access and protecting against the misuse of access, including the maintenance and enhancement of controls related to secure software development practices and identity and access management, including controls relating to the management of administrative access to systems\n\u2022\ndetecting, escalating and effectively addressing in a timely manner any vulnerabilities that may be present either in internally-developed software or externally-provided software or services, including vulnerabilities that could allow the attackers to exploit unknown security flaws in software and hardware (i.e., \u201czero-day vulnerabilities\u201d)\n\u2022\nappropriate oversight of third-party vendors in support of the secure development and maintenance of internal software and systems\n\u2022\ncontrols related to technology asset management and inventory systems to prevent undetected vulnerabilities that could undermine JPMorganChase\u2019s ability to operate an effective control process\n\u2022\nupgrading systems and controls to protect JPMorganChase and its clients and customers from the impact of distributed denial-of-service attacks, or to recover from outages that could be caused by a malware or ransomware attack\n\u2022\nthe continuing migration of technology systems of customer and client-facing services, including digital banking and other internet-based products, to the cloud, and modernization of those services\n22\n\u2022\nstrengthening network security and managing outbound connections to reduce the risk of data loss\n\u2022\nidentifying, assessing and mitigating insider threat activities that could lead to the misuse of JPMorganChase\u2019s systems or client and customer information, and\n\u2022\nintegrating acquired businesses, including where system integration may be complex or may require extensive and lengthy remediation or enhancement of controls.\nAny of the above cybersecurity risks to which JPMorganChase may be exposed could also affect JPMorganChase\u2019s vendors or other third parties with which it does business or is interconnected, including governmental entities and other market participants. A successful circumvention of JPMorganChase\u2019s systems of any of those third parties could cause serious negative consequences, including:\n\u2022\nsignificant disruption of or loss of access to JPMorganChase\u2019s operational systems and those of its clients, customers and counterparties\n\u2022\nmisappropriation of confidential information of JPMorganChase or that of its clients, customers, counterparties, employees, regulators or other parties\n\u2022\ndisruption of or damage to JPMorganChase\u2019s systems and those of its clients, customers and counterparties\n\u2022\nthe inability, or extended delays in the ability, to fully recover and restore affected data, or the inability to prevent systems from processing fraudulent transactions\n\u2022\ndemands that JPMorganChase pay a ransom to a malicious actor that has perpetrated a cybersecurity breach\n\u2022\nunintended violations by JPMorganChase of applicable privacy and other laws\n\u2022\nfinancial loss to JPMorganChase outside of cyber insurance policy coverage, or losses to its clients, customers, counterparties or employees\n\u2022\nloss of confidence in JPMorganChase\u2019s cybersecurity and business resiliency measures\n\u2022\nsignificant exposure to litigation, investigations by governmental authorities and penalties, and\n\u2022\nreputational harm.\nThe extent of a particular cyber attack, the methods used by threat actors, and the steps that JPMorganChase may need to take to investigate the attack may not be immediately clear, and it could take a significant amount of time before such an investigation can be completed. While such an investigation is ongoing, JPMorganChase may not know the full extent of the harm caused by the cyber attack, and that damage could continue to spread. These factors could\ninhibit JPMorganChase\u2019s ability to provide rapid, full and reliable information about the cyber attack to its clients, customers, counterparties and regulators, as well as the public. Furthermore, it may not be clear how best to contain and remediate the harm caused by the cyber attack, and certain errors or actions could be repeated or compounded before they are discovered and remediated. Any or all of these factors could further increase the costs and consequences of a cyber attack.\nJPMorganChase\u2019s businesses could be adversely affected if it fails to identify and address operational risks associated with the introduction of or changes to products, services, delivery platforms or technologies.\nJPMorganChase may not always identify or recognize the full extent of operational risks that could arise from:\n\u2022\nthe introduction of a new product or service, including platforms for the delivery or distribution of products or services\n\u2022\nthe acquisition or integration of, or investment in, a new business, product or portfolio, including the development of any related technological capabilities\n\u2022\nthe adoption of a new technology, or\n\u2022\nchanges to existing products, services, delivery platforms, businesses and technologies.\nAny significant failure by JPMorganChase to identify the operational risks associated with these types of changes, or to implement adequate controls to mitigate those risks, has resulted and could in the future result in:\n\u2022\nhindering JPMorganChase\u2019s ability to operate its businesses\n\u2022\npotential liability to clients, counterparties and customers\n\u2022\nimpairment of JPMorganChase\u2019s liquidity\n\u2022\nweaker competitive standing\n\u2022\nhigher compliance, operational or integration costs\n\u2022\nregulatory intervention\n\u2022\nlosses from fraudulent transactions\n\u2022\nhigher litigation costs and penalties, or\n\u2022\nreputational harm.\nAny of the foregoing consequences could materially and adversely affect JPMorganChase\u2019s businesses and results of operations.\nJPMorganChase\u2019s business and operations rely on appropriate staffing and on the competence, trustworthiness, health and safety of employees.\nJPMorganChase\u2019s ability to operate its businesses efficiently and profitably, to offer products and services that meet the expectations of its clients and customers,\n23\nPart I\nand to maintain an effective risk management framework is highly dependent on its ability to staff its operations appropriately and on the competence, trustworthiness, health and safety of its employees. JPMorganChase\u2019s businesses and operations similarly rely on the workforces of third parties, including employees of vendors, custodians and financial markets infrastructures, and of businesses that it may seek to acquire.\nJPMorganChase\u2019s businesses could be materially and adversely affected by:\n\u2022\nstaffing shortages, particularly in tight labor markets\n\u2022\nany failure by employees to adhere to controls designed to mitigate operational risks\n\u2022\nthe possibility that significant portions of JPMorganChase\u2019s workforce are unable to work effectively, including due to health emergencies or other extraordinary events beyond JPMorganChase\u2019s control\n\u2022\ntheft, fraud or other unlawful conduct by employees, or\n\u2022\nother negative outcomes caused by human error or misconduct\nJPMorganChase\u2019s operations could also be impaired if the measures that it takes to protect the health and safety of employees, or actions taken by governmental authorities or other external parties on which it relies are ineffective.\nJPMorganChase faces substantial legal and operational risks related to the processing and safeguarding of personal information.\nJPMorganChase\u2019s businesses and operations are subject to applicable law globally related to the collection, use, sharing, storage and protection of personal information of individuals. Complying with these applicable laws could:\n\u2022\nhinder development, curtail offerings or affect pricing and delivery methods of products and services\n\u2022\nrestrict JPMorganChase from transferring information across national borders or sharing information among affiliates or with third parties such as vendors, thereby increasing compliance costs and operational risk\n\u2022\npresent situations where the applicable law of one country conflicts with that of another, and\n\u2022\nrequire JPMorganChase to structure its businesses, operations and systems in less efficient or more costly ways, including with respect to the local storage and processing of data.\nJPMorganChase could face legal proceedings, including governmental investigations or enforcement actions, if personal information is mishandled, including if unauthorized parties receive, intercept, or compromise it, if JPMorganChase fails or is perceived\nto have failed to comply with applicable law, or if JPMorganChase or its third-party vendors fail to protect personal information appropriately. These actions could require JPMorganChase to modify or cease operations or could result in other penalties. Furthermore, concerns regarding the effectiveness of JPMorganChase\u2019s measures to safeguard personal information, or the perception that those measures are inadequate, could cause JPMorganChase to lose clients, customers or employees, and thereby reduce JPMorganChase\u2019s revenues. Any of these factors could cause reputational harm and otherwise adversely affect JPMorganChase\u2019s businesses.\nThe growing sophistication of technology poses a heightened risk of identity fraud, as malicious actors may exploit technology to create convincing false identities or manipulate verification processes. Failure to manage these risks or to implement effective countermeasures could lead to unauthorized transactions, financial losses, increased regulatory scrutiny and reputational harm. In addition, greater government scrutiny of practices related to the handling of personal information has in some cases resulted in, and could in the future lead to, the adoption of applicable law in the U.S. and elsewhere that is stricter and could result in JPMorganChase incurring higher compliance costs or constraining its ability to offer certain products and services to customers.\nJPMorganChase\u2019s operations, results and reputation could be harmed by occurrences of extraordinary events beyond its control.\nJPMorganChase\u2019s business and operations could be seriously disrupted, and its reputation could be harmed, by events or contributing factors that are wholly or partially beyond its control, including material instances of:\n\u2022\ncyber attacks\n\u2022\nsecurity breaches of its physical premises, including threats to health and safety\n\u2022\nutility or telecommunications failures, internet outages or shutdowns of mass transit\n\u2022\nfailure of, or loss of access to, technology or operational systems, including any resulting loss of critical data\n\u2022\ninterruption of service from third-party service providers, including financial market infrastructures\n\u2022\ndamage to or loss of property or assets of JPMorganChase or third parties, and any consequent injuries, including in connection with any construction projects undertaken by JPMorganChase\n\u2022\nfailure or perceived failure by clients, customers or counterparties of JPMorganChase, or by other parties, including newly-acquired businesses, companies in which JPMorganChase has made principal investments, parties to joint ventures with JPMorganChase and vendors with which\n24\nJPMorganChase does business, to comply with applicable law\n\u2022\nnatural disasters, severe weather conditions or the effects of climate change\n\u2022\naccidents such as explosions or structural failures\n\u2022\nhealth emergencies, or\n\u2022\nevents arising from any outbreak or escalation of civil unrest, hostilities, terrorist acts or other violence or criminal activity.\nThere can be no assurance that JPMorganChase\u2019s Firmwide resiliency framework will mitigate all potential resiliency risks to JPMorganChase, its clients and customers, and the third parties, including service providers with which it does business, or that the resiliency framework will be able to anticipate or defend against every form of disruption or adequately address the effects of simultaneous or prolonged disruptions. In addition, JPMorganChase\u2019s ability to respond effectively to a disruption event could be hampered to the extent that the members of its workforce, physical assets, systems and other support infrastructure, or those of its third-party service providers, that are needed to address the event are geographically dispersed, or conversely, if such an event were to occur in an area in which they are concentrated. Further, should extraordinary events or the factors that cause or contribute to those events become more chronic, the disruptive effects of those events on JPMorganChase\u2019s business and operations, and on its clients, customers, counterparties and employees, could become more significant and persistent.\nAny significant failure or disruption of JPMorganChase\u2019s business and operations, or the occurrence of extraordinary events that are beyond its control, could:\n\u2022\nhinder JPMorganChase\u2019s ability to provide services to its clients and customers or to transact with its counterparties\n\u2022\nrequire it to expend significant resources to correct the failure or disruption or to address the event\n\u2022\ncause it to incur losses or liabilities, including from loss of revenue, property damage, or injuries\n\u2022\ndisrupt market infrastructure systems on which JPMorganChase\u2019s businesses rely\n\u2022\nexpose it to litigation or penalties, and\n\u2022\ncause reputational harm.\nThe occurrence of extraordinary events could also negatively impact the financial condition or creditworthiness of JPMorganChase\u2019s clients and customers, and could lead to an increase in the allowance for credit losses and higher net charge-offs, which could reduce JPMorganChase\u2019s earnings.\nAny failure to maintain adequate data management processes could adversely affect JPMorganChase\u2019s ability to effectively manage its businesses, comply with applicable law or make informed business decisions.\nJPMorganChase relies on accurate, timely and complete data to effectively operate its systems and processes, including:\n\u2022\nassessing risk exposures and limits\n\u2022\nmonitoring and detecting fraudulent transactions and cyber threats\n\u2022\ndeveloping or maintaining models and other analytical and judgment-based estimations\n\u2022\nimplementing and maintaining compliance programs, and\n\u2022\npreparing financial statements, disclosures and regulatory reports, as well as internal reporting\nAny deficiencies in JPMorganChase\u2019s data management processes, including with respect to the accuracy or completeness of data, the timeliness of data collection, the analysis or validation of data, or the safeguarding of data could undermine the reliability and effectiveness of JPMorganChase\u2019s operations, such as:\n\u2022\nrisk management practices, including inaccurate or untimely risk reporting\n\u2022\ncompletion of regulatory reporting or internal or external financial reporting\n\u2022\ncompliance practices, such as those relating to transaction monitoring, customer screening, recordkeeping or reporting\n\u2022\nbusiness activities, including managing JPMorganChase\u2019s market-making positions and liquidity and capital levels\n\u2022\nproviding services to clients and customers, including transaction processing, lending services, account management and customer support, and\n\u2022\nfraud detection and prevention processes.\nAny of these deficiencies could impair JPMorganChase\u2019s ability to make sound business decisions, cause it to incur higher operational and compliance costs, result in operational breakdowns or failure to meet regulatory requirements, negatively affect clients and customers, or cause reputational harm.\nIn addition, if a third-party, whether authorized or unauthorized, obtains and misappropriates data from JPMorganChase\u2019s systems, JPMorganChase and its clients and customers could experience negative outcomes, including a heightened risk of fraudulent transactions using JPMorganChase\u2019s systems, losses from fraudulent transactions and reputational harm from perceived system insecurity.\n25\nPart I\nEnhanced regulatory and other standards for the oversight of JPMorganChase\u2019s vendors and other service providers could result in higher costs and other potential exposures.\nJPMorganChase must comply with enhanced regulatory and other standards when doing business with vendors and other service providers, including those relating to the outsourcing of functions as well as the performance of significant banking and other functions by subsidiaries. JPMorganChase\u2019s failure to appropriately assess and manage these relationships, especially those involving significant banking functions, shared services or other critical activities, could materially and adversely affect JPMorganChase. Specifically, any such failure could result in:\n\u2022\npotential harm to clients and customers, and any liability associated with that harm\n\u2022\nlower revenues, and the opportunity cost from lost revenues\n\u2022\nincreased operational costs\n\u2022\nthe imposition of penalties, or\n\u2022\nreputational harm.\nJPMorganChase could incur losses arising from any significant inadequacy or lapse in its risk management framework and control environment.\nJPMorganChase\u2019s financial condition or results of operations could be materially and adversely affected by any significant inadequacy or lapse in its risk management framework, governance structure, practices, models, reporting systems or controls. Any such inadequacy or lapse could:\n\u2022\nlead to inaccurate or delayed identification of risks\n\u2022\nhinder the timely escalation of material risk issues to JPMorganChase\u2019s senior management and Board of Directors\n\u2022\nlead to business decisions that have negative outcomes\n\u2022\nharm customers or clients, and cause JPMorganChase to incur associated liabilities\n\u2022\nrequire significant resources and time to remediate\n\u2022\nlead to non-compliance with applicable law, or attract heightened regulatory scrutiny\n\u2022\nexpose JPMorganChase to litigation, investigations by governmental authorities or penalties, or\n\u2022\ncause reputational harm.\nJPMorganChase could recognize unexpected losses, its capital levels could be reduced and it could face greater regulatory scrutiny if its models, estimations or judgments, including those used in its financial statements, are inadequate or incorrect.\nJPMorganChase uses various models and other analytical and judgment-based estimations to measure, monitor and implement controls related to its\nmarket, credit, capital, liquidity, operational and other risks, as well as to prepare its financial statements under U.S. generally accepted accounting principles (\u201cU.S. GAAP\u201d). These models and estimations are based on historical trends and other assumptions that are periodically reviewed and modified. The models and estimations that JPMorganChase uses may not be effective in all cases to identify, observe and mitigate risk because of factors such as:\n\u2022\ntheir reliance on historical trends that may not persist, including assumptions underlying the models and estimations such as correlations among certain market indicators or asset prices\n\u2022\ninherent limitations associated with forecasting uncertain economic and financial outcomes\n\u2022\nhistorical trend information may be incomplete, or may not be indicative of severely negative market conditions such as extreme volatility, dislocation or lack of liquidity\n\u2022\nsudden illiquidity in markets or declines in prices of certain loans and securities could make it more difficult to value certain financial instruments\n\u2022\ntechnology that is introduced to run models or estimations may not perform as expected, or may not be well understood by the personnel using the technology\n\u2022\nmodels and estimations may contain erroneous data, valuations, formulas or algorithms\n\u2022\nreview processes may fail to detect flaws in models and estimations, and\n\u2022\nmodels may inadvertently incorporate biases present in data used in the models.\nJPMorganChase could incur unexpected losses if models and estimations used in connection with its risk management activities or the preparation of its financial statements are inadequate or incorrect. For example, where quoted market prices are not available for certain financial instruments that require a determination of their fair value, JPMorganChase may make fair value determinations based on internally developed models or other means which ultimately rely to some degree on management estimates and judgment. In addition, the reliability of JPMorganChase\u2019s models and estimations could become more uncertain if assets differ from those used to develop those models and estimations, which could also result in unexpected losses.\nSimilarly, JPMorganChase establishes an allowance for expected losses related to its credit exposures which requires significant judgments, including forecasts of how macroeconomic conditions might impair the ability of JPMorganChase\u2019s clients and customers to repay their loans or other obligations. These types of estimates and judgments may be inaccurate due to a variety of factors, including if the current and forecasted environments are significantly different\n26\nfrom the historical environments upon which the models were developed. Any heightened uncertainty associated with these estimates may necessitate a greater degree of judgment and analytics to inform any adjustments that JPMorganChase may make to model outputs.\nSome models and estimations used by JPMorganChase for managing risks require regulatory review and approval before JPMorganChase may use the models and estimations for calculating market risk RWA, credit risk RWA and operational risk RWA under Basel III. If JPMorganChase\u2019s models and estimations are not approved by its regulators, it could be subject to higher capital charges, which could adversely affect its financial results or limit its ability to expand its businesses.\nA significant inadequacy in disclosure or financial reporting controls could negatively affect JPMorganChase\u2019s business, operations and reputation.\nJPMorganChase is subject to complex global financial reporting obligations that require continuous enhancements to disclosures in its financial statements and regulatory reports. JPMorganChase\u2019s disclosure and financial reporting controls may not always be effective, and a material weakness or significant deficiency in internal control over financial reporting could occur. Any such significant lapse, weakness or deficiency could result in inaccurate financial reporting which, in turn, could:\n\u2022\nmaterially and adversely affect JPMorganChase\u2019s business and results of operations or financial condition\n\u2022\nrestrict its ability to access the capital markets\n\u2022\nrequire it to expend significant resources to correct the lapse, weakness or deficiency\n\u2022\nexpose it to litigation and penalties, and\n\u2022\ncause reputational harm.\nStrategic\nJPMorganChase\u2019s results or competitive standing could suffer if its management fails to develop and execute effective business strategies and to anticipate changes affecting those strategies.\nThe ability of JPMorganChase\u2019s management to develop and execute effective business strategies, and the ability to anticipate and respond to shifts in the competitive environment, are critical to JPMorganChase\u2019s competitive standing and to achieving its strategic objectives. These strategies relate to:\n\u2022\nthe products and services that JPMorganChase offers\n\u2022\nthe geographies in which it operates\n\u2022\nthe types of clients and customers that it serves\n\u2022\nthe businesses that it acquires or in which it invests\n\u2022\nthe counterparties with which it does business\n\u2022\nthe technologies that it adopts or in which it invests, and\n\u2022\nthe methods, distribution channels and third-party service providers by or through which it offers products and services.\nThe values and growth prospects of JPMorganChase\u2019s businesses could suffer and its earnings could decline if management makes strategic choices that prove to be incorrect, are based on incomplete, inaccurate or fraudulent information, do not accurately assess the competitive landscape and industry trends, or fail to address changing regulatory and market environments or the expectations of clients, customers, investors, employees and other stakeholders.\nJPMorganChase\u2019s growth prospects also depend on management\u2019s ability to develop and execute effective business plans to address these strategic priorities, both over near term and longer time horizons. Management\u2019s effectiveness in this regard will affect JPMorganChase\u2019s ability to develop its resources, control expenses and return capital to shareholders. Each of these objectives could be adversely affected by any failure by management to:\n\u2022\ndevise effective business plans and strategies\n\u2022\noffer products and services that meet expectations of clients and customers\n\u2022\nallocate capital in a manner that promotes long-term stability to enable JPMorganChase to build and invest in market-leading businesses\n\u2022\nappropriately assess and monitor principal investments\n\u2022\nconduct appropriate due diligence on prospective business acquisitions or investments, or effectively integrate newly-acquired businesses\n\u2022\nappropriately address concerns of clients, customers, investors, employees, regulators and other stakeholders\n\u2022\nmaintain an effective risk management framework\n\u2022\nreact quickly to changes in market conditions or structures\n\u2022\nappropriately balance workforce planning and training as new technologies, such as AI, are adopted and integrated, or\n\u2022\ndevelop the operational, technology, risk, financial and managerial capabilities necessary to grow and manage JPMorganChase\u2019s businesses.\nFurthermore, any expenses that JPMorganChase may incur in connection with disposing of assets, including excess properties, or exiting businesses or products could be material to its results of operations.\n27\nPart I\nCompetition in the financial services industry could lead to negative effects on JPMorganChase\u2019s results of operations.\nJPMorganChase operates in a highly competitive environment in which it must constantly adapt to changes in financial regulation, technological advances and economic conditions. JPMorganChase expects that competition in the financial services industry will remain intense, with new competitors in the financial services industry continuing to emerge. For example, technological advances and the growth of e-commerce have made it possible for non-depository institutions to offer products and services that traditionally were banking products. These advances have also allowed financial institutions and other companies to provide electronic and internet-based financial solutions, including:\n\u2022\nlending and other extensions of credit to consumers\n\u2022\npayments processing\n\u2022\ncryptocurrency, including stablecoins\n\u2022\ntokenized securities, and\n\u2022\nonline automated algorithmic-based investment advice.\nFurthermore, both financial institutions and their non-banking competitors face the risk of disruption to payments processing and other products and services from the use of new technologies that may not require intermediation, such as tokenized securities or other products that leverage distributed ledger technology. New technologies have required and could require JPMorganChase to increase expenditures to modify its products to attract and retain clients and customers or to match products and services offered by its competitors, including technology companies. If JPMorganChase does not keep pace with rapidly changing technological advances, including the adoption of generative AI, it risks losing clients and market share to competitors, which could negatively impact revenues, operating costs and its competitive position. Competition could be intensified as the feasibility, capability and scalability of new technologies improves. In addition, new technologies (including generative AI) could be used by customers or bad actors in unexpected or disruptive ways, or could be breached or infiltrated by third parties, which could increase JPMorganChase\u2019s compliance expenses and reduce its income related to the offering of products and services through those technologies.\nActions by competitors could put pressure on the pricing for JPMorganChase\u2019s products and services or could cause it to lose market share, particularly with respect to investment products and traditional banking products. In addition, advocacy by non-banking competitors for exemptions from regulatory requirements could significantly disadvantage traditional financial institutions.\nThe failure of any of JPMorganChase\u2019s businesses to meet the expectations of clients and customers, whether due to general market conditions, under-performance, a decision not to offer a particular product or service, changes in client and customer expectations or other factors, could affect JPMorganChase\u2019s ability to attract or retain clients and customers. Any of these impacts could, in turn, reduce JPMorganChase\u2019s revenues. Increased competition also could require JPMorganChase to make additional capital investments in its businesses, or to extend more of its capital on behalf of its clients to remain competitive. Furthermore, regulatory uncertainty regarding new technologies, including inconsistent regulatory approaches within and across jurisdictions, could require JPMorganChase to modify or restrict its product and service offerings, incur higher operational or compliance costs or forgo business opportunities.\nJPMorganChase\u2019s operations, results, and competitive standing could be adversely affected by the development of advanced technologies such as AI.\nThe rapid development and deployment of advanced technologies, including generative and agentic AI systems, present a range of risks to JPMorganChase\u2019s businesses and operations, including:\n\u2022\nAI system failures, inappropriate use of AI systems, lack of transparency in AI systems, or inaccurate or biased output from AI systems resulting from rapid deployment, insufficient testing, erroneous data, ineffective model design or insufficient controls, which could disrupt operations, cause erroneous transactions, compromise data privacy, infringe on intellectual property, harm clients and customers, or impair JPMorganChase\u2019s ability to make sound business decisions\n\u2022\nincreased exposure to cyber attacks, system manipulation, or data loss if AI systems, particularly agentic systems, are not designed and implemented with appropriate safeguards to prevent systems from accessing sensitive data sources or system resources and taking actions\n\u2022\nintensified AI-enabled cyber threats, which may allow malicious actors to exploit vulnerabilities, reverse-engineer security patches, and conduct sophisticated social engineering attacks, potentially resulting in unauthorized access to sensitive information and data breaches, especially if JPMorganChase fails to adequately maintain, secure and upgrade its technological infrastructure in response to rapidly evolving technological advances\n\u2022\nregulatory and compliance challenges arising from rapidly evolving applicable law, including differences, inconsistencies and conflicts in international standards, which could increase costs, lead to fines and sanctions, and restrict JPMorganChase\u2019s use of AI technologies\n28\n\u2022\ncompetitive disadvantage if competitors are able to deploy AI more quickly or effectively, potentially gaining advantages in cost efficiency, client and customer experience, or product innovation, which could result in a loss of market share to competitors, or\n\u2022\nreplacement or disintermediation of direct customer relationships if AI agents autonomously manage or intermediate financial decisions and product selection or other services for customers.\nIt is also possible that JPMorganChase could miscalibrate its workforce planning and employee training efforts either because of over-reliance on AI or the failure to appropriately adopt AI. Over-reliance on AI could cause JPMorganChase to experience shortages in qualified staff due to reduced hiring or retention of employees, or could hinder the development or enhancement of important skills among its employees, including critical thinking, problem-solving, judgment, creativity and adaptability. On the other hand, any efficiencies or competitive advantages that AI may offer could be squandered if JPMorganChase fails to adopt AI in a timely and judicious manner and to make related adjustments to its workforce.\nAny of these factors could materially and adversely affect JPMorganChase\u2019s business and operations, results of operations, competitive position or reputation.\nThe effects of climate change could adversely affect JPMorganChase\u2019s business and operations, both directly and as a result of impacts on its clients and customers.\nBoth physical risks and transition risks associated with climate change could negatively impact JPMorganChase and its clients and customers. Physical risks include the increased frequency or severity of acute weather events and shifting climate patterns, which may lead to lower asset values, increased insurance costs, and business and supply chain disruptions. Transition risks, including evolving regulatory requirements, carbon taxes and the adoption of new technologies to support lower-carbon operations, may increase compliance and operational costs, contribute to commodity price volatility and impact the profitability of clients and customers that are adapting to a low-carbon economy. Any of these impacts could have a negative effect on the financial condition of JPMorganChase, the financial condition or creditworthiness of JPMorganChase\u2019s clients and customers, JPMorganChase\u2019s exposure to affected companies and markets, or the effectiveness of JPMorganChase\u2019s existing business strategy.\nConduct\nConduct failure by JPMorganChase employees could trigger litigation and regulatory actions and harm JPMorganChase\u2019s reputation.\nJPMorganChase expects its employees to conduct themselves ethically and in compliance with JPMorganChase\u2019s Code of Conduct, as well as with internal policies and applicable laws and regulations. Notwithstanding these expectations, employees of JPMorganChase have in the past engaged and could in the future engage in improper or illegal conduct. These instances of misconduct have resulted and could in the future result in litigation and resolutions of investigations or enforcement actions by governmental authorities involving consent orders, deferred prosecution agreements, non-prosecution agreements and other civil or criminal sanctions and penalties. In addition, employee misconduct could lead to higher operational and compliance costs, harm JPMorganChase\u2019s reputation and result in collateral consequences for its business and operations. The foregoing risks could be heightened with respect to newly-acquired businesses if JPMorganChase fails to successfully integrate employees of those businesses or any of those employees engage in misconduct.\nReputation\nDamage to JPMorganChase\u2019s reputation could negatively affect its business, results and prospects.\nMaintaining the trust, affinity and goodwill of clients, customers, employees and investors is critical to JPMorganChase\u2019s ability to operate its business successfully. JPMorganChase\u2019s reputation could be harmed by its decisions to engage or not engage with a client or in a business activity that lead to negative commercial impacts, and could also be compromised by:\n\u2022\ninaccurate or misleading information about JPMorganChase or its clients, including results generated by AI, that is rapidly and broadly disseminated through any form of media, including social networking sites, and\n\u2022\nconcerns that JPMorganChase has treated certain clients or customers unfairly\nEvents or circumstances that damage JPMorganChase\u2019s reputation could also negatively affect its business, results of operations and prospects, and could result in:\n\u2022\ngreater scrutiny from governmental authorities or criticism from politicians, including in the form of investigations by governmental authorities or litigation\n\u2022\nunfavorable media coverage or commentary, including through social media campaigns\n29\nPart I\n\u2022\ncertain clients and customers ceasing to do business with JPMorganChase, and encouraging others to do so\n\u2022\nimpairment of JPMorganChase\u2019s ability to attract new clients and customers, to expand its relationships with existing clients and customers, or to hire or retain employees, or\n\u2022\ncertain investors opting to divest from investments in securities of JPMorganChase.\nFailure to effectively manage potential conflicts of interest or to satisfy fiduciary obligations could result in litigation and enforcement actions and cause reputational harm.\nManaging potential conflicts of interest is highly complex for JPMorganChase due to its broad range of business activities which encompass a variety of transactions, obligations and interests with and among clients and customers. JPMorganChase could face litigation, enforcement actions and heightened regulatory scrutiny, and its reputation could be damaged, by the failure or perceived failure to:\n\u2022\nadequately address or appropriately disclose actual or potential conflicts of interest, including those that may arise in connection with providing multiple products and services in, or having investments related to, the same transaction\n\u2022\nidentify and address any conflict of interest that a third-party with which it is does business may have with respect to a transaction involving JPMorganChase\n\u2022\ndeliver appropriate standards of service and quality, and to treat clients and customers fairly and with the appropriate standard of care\n\u2022\nprovide fiduciary products or services in accordance with applicable law, or\n\u2022\nhandle or use confidential information of customers or clients appropriately and in compliance with applicable law.\nA failure or perceived failure to appropriately address conflicts of interest or fiduciary obligations could result in customer dissatisfaction, litigation and penalties, as well as heightened regulatory scrutiny and enforcement actions, all of which could lead to lost revenue, higher operating costs and reputational harm.\nCountry\nAn outbreak or escalation of hostilities between countries or within a country or region could have a material adverse effect on the global economy and on JPMorganChase\u2019s businesses within the affected region or globally.\nConflicts and hostilities between countries or other antagonists could expand in unpredictable ways, including:\n\u2022\nintensified cyber attacks\n\u2022\ndrawing in other adversaries\n\u2022\narmed conflict, or\n\u2022\nescalation into full-scale war, which could have catastrophic consequences.\nDepending on the scope of the conflict, the hostilities could result in:\n\u2022\nworldwide economic disruption\n\u2022\nheightened volatility in financial markets\n\u2022\nsevere declines in asset values, accompanied by widespread sell-offs of investments\n\u2022\nsudden increases in prices in the energy and commodity markets or for certain safe haven currencies\n\u2022\nsubstantial depreciation of local currencies, potentially leading to defaults by borrowers and counterparties in the affected region\n\u2022\nsustained disruption to or destruction of infrastructure, including energy and power facilities and undersea cables\n\u2022\ndisruption of global trade, including retaliatory countermeasures\n\u2022\nchanges in economic alliances or treaties, including the potential fragmentation of trade and economic activity that may result from the formation or hardening of national or regional alliances\n\u2022\ndiminished consumer, business and investor confidence\n\u2022\nrefugee and humanitarian crises, and\n\u2022\neconomic sanctions or other regulatory requirements.\nAny of the above consequences could have significant negative effects on JPMorganChase\u2019s operations and earnings, both in the countries or regions directly affected by the hostilities or globally. Further, if the U.S. were to become directly involved in such a conflict, this could lead to a curtailment of any operations that JPMorganChase may have in the affected countries or region, as well as in any nation that is aligned against the U.S. in the hostilities. JPMorganChase could also experience more numerous and aggressive cyber attacks launched by or under the sponsorship of one or more of the adversaries in such a conflict.\nJPMorganChase\u2019s business and operations in certain countries could be adversely affected by local economic, political, regulatory and social factors.\nSome of the countries where JPMorganChase conducts business have economies or markets that are less developed and more volatile or have political, legal and regulatory regimes that are unpredictable or less established. In addition, in some places where JPMorganChase conducts business, the local economy and business activities are subject to substantial government influence or control. Some of these\n30\ncountries have in the past experienced economic disruptions, including:\n\u2022\nextreme currency fluctuations\n\u2022\nhigh inflation\n\u2022\nlow or negative growth\n\u2022\ndefaults or reduced ability to service sovereign debt, and\n\u2022\nincreased fraud or other misrepresentation of value.\nThe governments in these countries have sometimes reacted to these developments by imposing restrictive policies that adversely affect the local business environment, such as:\n\u2022\nprice, capital or exchange controls\n\u2022\nconfiscation, expropriation, nationalization or blocking access to property, including client assets and intellectual property, and\n\u2022\nchanges in applicable law.\nThe impact of these actions could be accentuated in trading markets that are smaller, less liquid and more volatile than more-developed markets. These types of government actions can negatively affect JPMorganChase\u2019s operations in the relevant country, either directly or by suppressing the local business activities of clients.\nIn addition, emerging markets countries, as well as more developed countries, have been susceptible to unfavorable social developments arising from poor economic conditions or governmental actions, including:\n\u2022\nwidespread demonstrations, civil unrest or general strikes\n\u2022\ncrime and corruption\n\u2022\nsecurity and personal safety issues\n\u2022\noutbreaks or escalations of hostilities, or other geopolitical instabilities\n\u2022\noverthrow of incumbent governments\n\u2022\nterrorist attacks, and\n\u2022\nother forms of internal discord.\nThese types of developments have in the past resulted in, and in the future could lead to, conditions that could adversely affect JPMorganChase\u2019s operations in the affected countries and impair the revenues, growth and profitability of those operations. In addition, any of these events or circumstances in one country could affect JPMorganChase\u2019s operations and investments in another country, including in the U.S.\nPeople\nVarious factors could impact JPMorganChase\u2019s workforce.\nJPMorganChase\u2019s efforts to hire and retain talented employees could be hindered by factors such as:\n\u2022\nthe emerging need for more-skilled workers in an evolving workplace environment, and\n\u2022\ntargeted recruitment of JPMorganChase employees by competitors.\nJPMorganChase\u2019s performance and competitive position could be materially and adversely affected if it is unable to attract or retain qualified employees or to effectively manage succession planning for key leadership roles, such as the Chief Executive Officer, members of the Operating Committee and other senior leaders. In addition, restrictive immigration or travel policies in the U.S. and other countries could inhibit JPMorganChase\u2019s ability to attract and retain qualified employees, or necessitate adjustments to operating models that could reduce operational efficiency or increase costs.\nAdvances in technology, such as automation, AI and data science, could lead to workforce displacement. This could require JPMorganChase to invest in additional employee training, manage impacts on morale and retention, and compete for employment candidates who possess more advanced technological skills, all of which could have a negative impact on JPMorganChase\u2019s business and operations.\n31\nParts I and II\nItem 1B. Unresolved Staff Comments.\nNone.\nItem 1C. Cybersecurity.\nRefer to the Operational Risk Management section of Management\u2019s discussion and analysis on pages 146\u2013149 for a discussion of cybersecurity risk.\nItem 2. Properties.\nJPMorganChase\u2019s headquarters is located in New York City at 270 Park Avenue, a 60-story office building owned by the Firm. As of December 31, 2025, the building was fully occupied, including by senior management.\nThe Firm owned or leased facilities in the following locations at December\u00a031, 2025.\nDecember 31, 2025\n(in millions)\nApproximate square footage\nUnited States\n(a)\nNew York City, New York\n270 Park Avenue, New York, New York\n2.0\nAll other New York City locations\n(b)\n7.1\nTotal New York City, New York\n9.1\n\nOther U.S. locations\nColumbus/Westerville, Ohio\n3.3\nChicago, Illinois\n2.8\nDallas/Plano/Fort Worth, Texas\n2.5\nWilmington/Newark, Delaware\n2.1\nHouston, Texas\n1.5\nJersey City, New Jersey\n1.5\nPhoenix/Tempe, Arizona\n1.3\nAll other U.S. locations\n33.4\nTotal United States\n57.5\n\nEurope, the Middle East and Africa (\u201cEMEA\u201d)\n25 Bank Street, London, U.K.\n1.4\nAll other U.K. locations\n2.1\nAll other EMEA locations\n1.6\nTotal EMEA\n5.1\n\nAsia-Pacific, Latin America and Canada\nIndia\n6.6\nPhilippines\n1.7\nAll other locations\n3.3\nTotal Asia-Pacific, Latin America and Canada\n11.6\n\nTotal\n74.2\n\n(a)\nAt December\u00a031, 2025, the Firm owned or leased 5,083 branches in 48 states and Washington D.C.\n(b)\nIncludes a 1.1 million square foot office building owned by the Firm that is vacant and undergoing a significant remodeling.\nThe premises and facilities occupied by JPMorganChase are collectively used across all of the Firm\u2019s business segments and for corporate purposes. JPMorganChase continues to evaluate its current and projected space requirements and may determine from time to time that certain of its properties (including the premises and facilities noted above) are no longer necessary for its operations. There is no assurance that the Firm will be able to dispose of any such excess properties, premises or facilities, or that it will not incur costs in connection with such dispositions. Such disposition costs may be material to the Firm\u2019s results of operations in a given period. Refer to the Consolidated Results of Operations on pages 51\u201354 for information on occupancy expense.\nItem 3. Legal Proceedings.\nRefer to Note 30 for a description of the Firm\u2019s material legal proceedings.\nItem 4. Mine Safety Disclosures.\nNot applicable.\n32\nItem 5. Market for Registrant\u2019s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.\nMarket for registrant\u2019s common equity\nJPMorganChase\u2019s common stock is listed and traded on the New York Stock Exchange. Refer to \u201cFive-year stock performance,\u201d on page 45 for a comparison of the cumulative total return for JPMorganChase common stock with the comparable total return of the S&P 500 Index, the KBW Bank Index and the S&P Financials Index over the five-year period ended December\u00a031, 2025.\nRefer to Capital actions in the Capital Risk Management section of Management\u2019s discussion and analysis on page 97 for information on the common dividend payout ratio. Refer to Note 21 and Note 26 for discussions of restrictions on dividend payments. On January 31, 2026, there were 202,288 holders of record of JPMorganChase common stock. Refer to Part III, Item 12 on page 38 for information regarding securities authorized for issuance under the Firm\u2019s employee share-based incentive plans.\nRepurchases under the common share repurchase program\nRefer to Capital actions in the Capital Risk Management section of Management\u2019s discussion and analysis on page 97 for information regarding repurchases under the Firm\u2019s common share repurchase program.\nOn July 1, 2025, the Firm announced that its Board of Directors had authorized a new $50\u00a0billion common share repurchase program, effective July 1, 2025. Through June 30, 2025, the Firm was authorized to purchase up to $30\u00a0billion of common shares under its previously-approved common share repurchase program that was announced on June 28, 2024.\nShares repurchased pursuant to the common share repurchase programs during 2025 were as follows:\nYear ended December 31, 2025\nTotal number of shares of common stock repurchased\nAverage price paid per share of common stock\n(a)\nAggregate purchase price of common stock repurchases\n(in millions)\n(a)\nDollar value\nof remaining\nauthorized\nrepurchase\n(in millions)\n(a)\nFirst quarter\n29,953,620\n$\n252.50\n$\n7,563\n$\n11,763\nSecond quarter\n29,800,960\n251.67\n7,500\n4,263\n(b)\nThird quarter\n27,987,016\n297.10\n8,315\n41,685\nOctober\n9,814,682\n304.63\n2,990\n38,695\nNovember\n7,923,457\n307.82\n2,439\n36,256\nDecember\n8,928,561\n317.28\n2,833\n33,423\n(c)\nFourth quarter\n26,666,700\n309.81\n8,262\n33,423\n(c)\nFull year\n114,408,296\n$\n276.55\n$\n31,640\n$\n33,423\n(c)\n(a)\nExcludes excise tax and commissions.\n(b)\nThe $4.3 billion remaining under the prior Board authorization was canceled when the $50 billion repurchase program was authorized by the Board of Directors effective July 1, 2025.\n(c)\nRepresents the amount remaining under the $50 billion repurchase program.\nItem 6. Reserved\nItem 7. Management\u2019s Discussion and Analysis of Financial Condition and Results of Operations.\nManagement\u2019s discussion and analysis of financial condition and results of operations, entitled \u201cManagement\u2019s discussion and analysis,\u201d appears on pages 46\u2013160. Such information should be read in conjunction with the Consolidated Financial Statements and Notes thereto, which appear on pages 165\u2013314.\nItem 7A. Quantitative and Qualitative Disclosures About Market Risk.\nRefer to the Market Risk Management section of Management\u2019s discussion and analysis on pages 133-142 for a discussion of quantitative and qualitative disclosures about market risk.\n33\nParts II and III\nItem 8. Financial Statements and Supplementary Data.\nThe Consolidated Financial Statements, together with the Notes thereto and the report thereon dated February\u00a013, 2026, of PricewaterhouseCoopers LLP, the Firm\u2019s independent registered public accounting firm (PCAOB ID\n238\n), appear on pages 162\u2013314.\nThe \u201cGlossary of Terms and Acronyms\u2019\u2019 is included on pages 320\u2013327.\nItem 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.\nNone.\nItem 9A. Controls and Procedures.\nThe internal control framework promulgated by the Committee of Sponsoring Organizations of the Treadway Commission (\u201cCOSO\u201d), \u201cInternal Control \u2014 Integrated Framework\u201d (\u201cCOSO 2013\u201d), provides guidance for designing, implementing and conducting internal control and assessing its effectiveness. The Firm used the COSO 2013 framework to assess the effectiveness of the Firm\u2019s internal control over financial reporting as of December\u00a031, 2025. Refer to \u201cManagement\u2019s report on internal control over financial reporting\u201d on page 161.\nAs of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of the Firm\u2019s management, including its Chairman and Chief Executive Officer and its Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, the Chairman and Chief Executive Officer and the Chief Financial Officer concluded that these disclosure controls and procedures were effective. Refer to Exhibits 31.1 and 31.2 for the Certifications furnished by the Chairman and Chief Executive Officer and Chief Financial Officer, respectively.\nThe Firm is committed to maintaining high standards of internal control over financial reporting. Nevertheless, because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Deficiencies or lapses in internal controls may occur from time to time, and there can be no assurance that any such deficiencies will not result in significant deficiencies or material weaknesses in internal control in the future and collateral consequences therefrom. Refer to \u201cManagement\u2019s report on internal control over financial reporting\u201d on page 161 for further information. There was no change in the Firm\u2019s internal control over financial reporting (as defined in Rule 13a-15(f) under\nthe Securities Exchange Act of 1934) that occurred during the three months ended December\u00a031, 2025, that has materially affected, or is reasonably likely to materially affect, the Firm\u2019s internal control over financial reporting.\n34\nItem 9B. Other Information.\nTrading arrangements\nThe following table provides information concerning Rule 10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934) adopted in the fourth quarter of 2025 by any director or officer who is subject to the filing requirements of Section 16 of the Securities Exchange Act of 1934 (each a \u201cSection 16 Director or Officer\u201d). These trading arrangements are intended to satisfy the affirmative defense of Rule 10b5-1(c). Certain of the Firm's Section 16 Directors or Officers may participate in employee stock purchase plans, 401(k) plans or dividend reinvestment plans of the Firm that have been designed to comply with Rule 10b5-1(c). No non-Rule 10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934) were\nadopted\n by any Section 16 Director or Officer during the fourth quarter of 2025. Additionally, no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were\nterminated\n by any Section 16 Director or Officer in the fourth quarter of 2025.\nName\nTitle\nAdoption date\nDuration\n(c)\nAggregate number of shares to be sold\n(d)\nAshley Bacon\nChief Risk Officer\nNovember 12, 2025\nNovember 12, 2025 \u2013 June 30, 2026\n50% of the net issued shares received as a result of Performance Share Units (\"PSUs\") vesting on March 25, 2026\nJeremy Barnum\nChief Financial Officer\nNovember 14, 2025\nNovember 14, 2025 \u2013 June 30, 2026\n50% of the net issued shares received as a result of PSUs vesting on March 25, 2026\nLori Beer\nChief Information Officer\nNovember 13, 2025\nNovember 13, 2025 \u2013 June 30, 2026\n50% of the net issued shares received as a result of PSUs vesting on March 25, 2026\nJames Dimon\n(a)\nChairman and CEO\nNovember 10, 2025\nNovember 10, 2025 \u2013 August 7, 2026\n200,000\nMary Erdoes\nCEO, AWM\nNovember 12, 2025\nNovember 12, 2025 \u2013 June 30, 2026\n50% of the net issued shares received as a result of PSUs vesting on March 25, 2026\nMarianne Lake\n(b)\nCEO, CCB\nNovember 12, 2025\nNovember 12, 2025 \u2013 June 30, 2026\n50% of the net issued shares received as a result of PSUs vesting on March 25, 2026\nRobin Leopold\nHead of Human Resources\nNovember 14, 2025\nNovember 14, 2025 \u2013 June 30, 2026\n865\nDouglas Petno\nCo-CEO, CIB\nNovember 14, 2025\nNovember 14, 2025 \u2013 June 30, 2026\n50% of the net issued shares received as a result of PSUs vesting on March 25, 2026\nJennifer Piepszak\nChief Operating Officer\nNovember 13, 2025\nNovember 13, 2025 \u2013 June 30, 2026\n50% of the net issued shares received as a result of PSUs vesting on March 25, 2026\nTroy Rohrbaugh\nCo-CEO, CIB\nNovember 13, 2025\nNovember 13, 2025 \u2013 June 30, 2026\n50,000\n(a)\nTransaction by trusts of which Mr. Dimon has either a direct or indirect pecuniary interest.\n(b)\nTransaction by trust of which Ms. Lake has either a direct or indirect pecuniary interest.\n(c)\nSales under the trading arrangement will not commence until completion of the required cooling off period under Rule 10b5-1. Subject to compliance with Rule 10b5-1, duration could cease earlier than the final date shown above to the extent that the aggregate number of shares to be sold under the trading arrangement have been sold.\n(d)\nUnless otherwise stated, the aggregate number of shares to be sold pursuant to each trading arrangement is dependent on the terms and conditions of, and taxes on, the applicable PSUs, and therefore, is indeterminable at this time.\n35\nParts II and III\nIran threat reduction disclosure\nPursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) to the Securities Exchange Act of 1934, an issuer is required to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with individuals or entities designated pursuant to certain Executive Orders. Disclosure may be required even where the activities, transactions or dealings were conducted in compliance with applicable law. Except as set forth below, as of the date of this report, the Firm is not aware of any other activity, transaction or dealing by any of its affiliates during the calendar year 2025 that requires disclosure under Section 219.\nAs previously disclosed, during the second quarter of 2025, a non-U.S. subsidiary of the Firm processed three payments, each valued at the equivalent of approximately USD 130, for its client, a non-U.S. person, where the Iranian Embassy in London, U.K. was the beneficiary. The Firm did not charge a fee for these transactions. The payments were for the renewal of travel documentation for the client\u2019s three minor children and were therefore exempt transactions pursuant to 31 C.F.R. 560.219(d).\nAs previously disclosed, during the third quarter of 2025, the Firm determined that an existing account holder at a non-U.S. subsidiary of the Firm had previously become employed by a subsidiary of an entity which is owned or controlled by the Government of Iran. The account was valued at the equivalent of approximately USD 119,000. The Firm\u2019s non-U.S. subsidiary charged fees of the equivalent of approximately USD 850 from the time the account holder became employed by the applicable entity through the third quarter of 2025. The Firm has closed the account.\nThe Firm does not intend to engage in such transactions in the future.\nItem 9C. Disclosure regarding Foreign Jurisdictions that Prevent Inspections.\nNot applicable.\n36\nItem 10. Directors, Executive Officers and Corporate Governance.\nExecutive officers of the registrant\nAge\nName\n(at December 31, 2025)\nPositions and offices\nJames Dimon\n69\nChairman of the Board since December 2006 and Chief Executive Officer since December 2005.\nAshley Bacon\n56\nChief Risk Officer since June 2013.\nJeremy Barnum\n53\nChief Financial Officer since May 2021, prior to which he was Head of Global Research for the former Corporate & Investment Bank since February 2021. He previously served as Chief Financial Officer of the former Corporate & Investment Bank from July 2013 until February 2021.\nLori A. Beer\n58\nChief Information Officer since September 2017.\nMary Callahan Erdoes\n58\nChief Executive Officer of Asset & Wealth Management since September 2009.\nStacey Friedman\n57\nGeneral Counsel since January 2016.\nMarianne Lake\n56\nChief Executive Officer of Consumer & Community Banking since January 2024, having previously served as its Co-Chief Executive Officer since May 2021. She was Chief Executive Officer of Consumer Lending from May 2019 until May 2021.\nRobin Leopold\n61\nHead of Human Resources since January 2018.\nDouglas B. Petno\n60\nCo-Chief Executive Officer of the Commercial & Investment Bank since January 2025, having previously served as Co-Head of Global Banking since January 2024, prior to which he had been Chief Executive Officer of the former Commercial Banking since January 2012.\nJennifer A. Piepszak\n55\nChief Operating Officer since January 2025, having previously served as Co-Chief Executive Officer of the Commercial & Investment Bank since January 2024, prior to which she had been Co-Chief Executive Officer of Consumer & Community Banking since May 2021. She was Chief Financial Officer from May 2019 until May 2021.\nTroy Rohrbaugh\n55\nCo-Chief Executive Officer of the Commercial & Investment Bank since January 2024, prior to which he had been the Co-Head of Markets & Securities Services since June 2023. He was Head of Global Markets from January 2019 until June 2023.\nUnless otherwise noted, during the five fiscal years ended December\u00a031, 2025, all of JPMorganChase\u2019s above-named executive officers have continuously held senior-level positions with JPMorganChase. There are no family relationships among the foregoing executive officers. Information to be provided in Items 10, 11, 12, 13 and 14 of this 2025 Form 10-K and not otherwise included herein is incorporated by reference to the Firm\u2019s Definitive Proxy Statement for its 2026 Annual Meeting of Stockholders to be held on May\u00a019, 2026, which will be filed with the SEC within 120 days of the end of the Firm\u2019s fiscal year ended December\u00a031, 2025.\nCode of Conduct and Code of Ethics\nJPMorganChase has adopted, and posted on its website at https://www.jpmorganchase.com, a Code of Conduct for all employees of the Firm and a Code of Ethics for its Chairman and Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and all other professionals of the Firm worldwide serving in a finance, accounting, treasury, tax or investor relations role. The Code of Ethics is also available in print upon request to the Firm\u2019s Investor Relations team. Within the time period required by the SEC, JPMorganChase will post on its website any amendment to the Code of Ethics and any waiver applicable to a director or executive officer.\nInsider Trading Policy\nJPMorganChase has\nadopted\n an insider trading policy applicable to its directors, officers and employees, as well as to JPMorganChase itself, governing the purchase, sale and other dispositions of the Firm\u2019s securities (the \u201cInsider Trading Policy\u201d). The Firm believes that the Insider Trading Policy is reasonably designed to promote compliance with applicable U.S. federal securities laws and the listing standards of the New York Stock Exchange relating to insider trading. The Insider Trading Policy is filed as Exhibit 19 to this 2025 Form 10-K.\n37\nParts III and IV\nItem 11. Executive Compensation.\nRefer to Item 10.\nItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.\nRefer to Item 10 for security ownership of certain beneficial owners and management.\nThe following table sets forth the total number of shares available for issuance under JPMorganChase\u2019s employee share-based incentive plans (including shares available for issuance to non-employee directors). The Firm is not authorized to grant share-based incentive awards to non-employees, other than to non-employee directors.\nDecember 31, 2025\nNumber of shares to be issued upon exercise of outstanding stock appreciation rights\nWeighted-average\nexercise price of\noutstanding\nstock appreciation rights\nNumber of shares remaining available for future issuance under stock incentive plans\nPlan category\nEmployee share-based incentive plans approved by shareholders\n2,250,000\n(a)\n$\n152.19\n77,131,051\n(b)\nTotal\n2,250,000\n$\n152.19\n77,131,051\n(a)\nDoes not include restricted stock units or performance stock units granted under the shareholder-approved Long-Term Incentive Plan (\u201cLTIP\u201d). Refer to Note 9 for further information.\n(b)\nRepresents shares available for future issuance under the shareholder-approved LTIP.\nAll shares available for future issuance will be issued under the shareholder-approved LTIP. Refer to Note 9 for further discussion.\nItem 13. Certain Relationships and Related Transactions, and Director Independence.\nRefer to Item 10.\nItem 14. Principal Accounting Fees and Services.\nRefer to Item 10.\n38\nItem 15. Exhibits, Financial Statement Schedules.\n1\nFinancial statements\nThe Consolidated Financial Statements, the Notes thereto and the report of the Independent Registered Public Accounting Firm thereon listed in Item 8 are set forth commencing on page 162.\n2\nFinancial statement schedules\n3\nExhibits\n3.1\nRestated Certificate of Incorporation of JPMorgan Chase & Co., effective\nSeptember 1\n6, 202\n5\n (incorporated by reference to Exhibit\u00a03.1 to the\nQuarterly Report on Form 10-Q\n of JPMorgan Chase & Co. (File No. 1-5805)\nfor the quarter ended September 3\n0\n, 2025\n).\n3.2\nCertificate of Designations for Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series CC (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed October 20, 2017).\n3.3\nCertificate of Designations for 5.75% Non-Cumulative Preferred Stock, Series DD (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed September 21, 2018).\n3.4\nCertificate of Designations for 6.00% Non-Cumulative Preferred Stock, Series EE (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed January 24, 2019).\n3.5\nCertificate of Designations for 4.75% Non-Cumulative Preferred Stock, Series GG (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed November 7, 2019).\n3.6\nCertificate of Designations for Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series II (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed February 24, 2020).\n3.7\nCertificate of Designations for 4.55% Non-Cumulative Preferred Stock, Series JJ (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed March 17, 2021).\n3.8\nCertificate of Designations for 3.65% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series KK (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed May 12, 2021).\n3.9\nCertificate of Designations for 4.625% Non-Cumulative Preferred Stock, Series LL (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed May 20, 2021).\n3.10\nCertificate of Designations for 4.20% Non-Cumulative Preferred Stock, Series MM (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed July 29, 2021).\n3.11\nCertificate of Designations for 6.875% Non-Cumulative Preferred Stock, Series NN (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File 1-5805) filed March 12, 2024).\n3.12\nCertificate of Designations for 6.500% Non-Cumulative Preferred Stock, Series OO (incorporated by reference to Exhibit 3.1 to the Current Report on From 8-K of JPMorgan Chase & Co. (File 1-5808) filed February 4, 2025).\n3.13\nBy-laws of JPMorgan Chase & Co., as amended, effective September 1\n2\n, 202\n5\n (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed September\n1\n2, 202\n5\n).\n4.1(a)\nIndenture, dated as of October 21, 2010, between JPMorgan Chase & Co. and Deutsche Bank Trust Company Americas, as Trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No.1-5805) filed October\u00a021, 2010).\n4.1(b)\nFirst Supplemental Indenture, dated as of January 13, 2017, between JPMorgan Chase & Co. and Deutsche Bank Trust Company Americas, as Trustee, to the Indenture, dated as of October 21, 2010 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed January 13, 2017).\n39\nPart IV\n4.2(a)\nSubordinated Indenture, dated as of March 14, 2014, between JPMorgan Chase & Co. and U.S. Bank Trust National Association, as Trustee (incorporated by reference to Exhibit\u00a04.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No.1-5805) filed March 14, 2014).\n4.2(b)\nFirst Supplemental Indenture, dated as of January 13, 2017, between JPMorgan Chase & Co. and U.S. Bank Trust National Association, as Trustee, to the Subordinated Indenture, dated as of March 14, 2014 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed January 13, 2017).\n4.3(a)\nIndenture, dated as of May 25, 2001, between JPMorgan Chase & Co. and Bankers Trust Company (succeeded by Deutsche Bank Trust Company Americas), as Trustee (incorporated by reference to Exhibit\u00a04(a)(1) to the Registration Statement on Form\u00a0S-3 of JPMorgan Chase & Co. (File No. 333-52826) filed June 13, 2001).\n4.3(b)\nSixth Supplemental Indenture, dated as of January 13, 2017, between JPMorgan Chase & Co. and Bankers Trust Company (succeeded by Deutsche Bank Trust Company Americas), as Trustee, to the Indenture, dated as of May 25, 2001 (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed January 13, 2017).\n4.4\nIndenture, dated as of February 19, 2016, among JPMorgan Chase Financial Company LLC, JPMorgan Chase & Co. and Deutsche Bank Trust Company Americas, as Trustee (incorporated by reference to Exhibit 4(a)(7) to the Registration Statement on Form S-3 of JPMorgan Chase & Co. and JPMorgan Chase Financial Company LLC (File No. 333-209682) filed February 24, 2016).\n4.5\nForm of Deposit Agreement (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-3 of JPMorgan Chase & Co. (File No. 333-191692) filed October 11, 2013).\n4.6\nDescription of Securities of JPMorgan Chase & Co. registered pursuant to Section 12 of the Securities Exchange Act of 1934.\n(b)\nOther instruments defining the rights of holders of long-term debt securities of JPMorgan Chase & Co. and its subsidiaries are omitted pursuant to Section (b)(4)(iii)(A) of Item\u00a0601 of Regulation S-K. JPMorgan Chase & Co. agrees to furnish copies of these instruments to the SEC upon request.\n10.1\nDeferred Compensation Plan for Non-Employee Directors of JPMorgan Chase & Co., as amended and restated July\u00a02001 and as of December 31, 2004 (incorporated by reference to Exhibit 10.1 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No.\u00a01-5805) for the year ended December 31, 2007).\n(a)\n10.2\n2005 Deferred Compensation Plan for Non-Employee Directors of JPMorgan Chase & Co.,\na\ns amended and restated effective January 1, 2025\n(a)(b)\n10.3\n2005 Deferred Compensation Program of JPMorgan Chase & Co., restated effective as of December 31, 2008 (incorporated by reference to Exhibit 10.4 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December\u00a031, 2008).\n(a)\n10.4\nJPMorgan Chase & Co. Amended and Restated Long-Term Incentive Plan, effective May 21, 2024 (incorporated by reference to the Appendix of the Schedule 14A of JPMorgan Chase & Co. (File No. 1-5805) filed April 8, 2024).\n(a)\n10.5\nKey Executive Performance Plan of JPMorgan Chase & Co., as amended and restated effective January 1, 2014 (incorporated by reference to Appendix G of the Schedule 14A of JPMorgan Chase & Co. (File No.\u00a01-5805) filed April 10, 2013).\n(a)\n10.6\nExcess Retirement Plan of JPMorgan Chase & Co., restated and amended as of December\u00a031, 2008, as amended (incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No.\u00a01-5805) for the year ended December 31, 2009).\n(a)\n10.7\nExecutive Retirement Plan of JPMorgan Chase & Co., as amended and restated December 31, 2008 (incorporated by reference to Exhibit 10.9 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2008).\n(a)\n10.8\nBank One Corporation Supplemental Savings and Investment Plan, as amended and restated effective December 31, 2008 (incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No.\u00a01-5805) for the year ended December 31, 2008).\n(a)\n40\n10.9\nForms of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for restricted stock units and performance share unit awards for Operating Committee members (U.S. and U.K.), dated as of January 21, 2020 (incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2019)\n.\n(a)\n10.10\nForms of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for restricted stock units and performance share unit awards for Operating Committee members (U.S. and U.K.), dated as of January 19, 2021(incorporated by reference to Exhibit 10.17 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2020).\n(a)\n10.11\nForm of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for stock appreciation rights for Chairman/Chief Executive Officer, dated July 20, 2021 (incorporated by reference to Exhibit 99 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed July 20, 2021).\n(a)\n10.12\nForm of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for stock appreciation rights for President and Chief Operating Officer, dated December 14, 2021 (incorporated by reference to Exhibit 99 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed December 15, 2021).\n(a)\n10.13\nForms of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for restricted stock units and performance share unit awards for Operating Committee members (U.S. and U.K.), dated as of January 18, 2022 (incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5808) for the year ended December 31, 2021).\n(a)\n10.14\nForms of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for restricted stock units and performance share unit awards for Operating Committee members (U.S. and U.K.), dated as of January 17, 2023 (incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5808) for the year ended December 31, 2022).\n(a)\n10.15\nForms of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for restricted stock units and performance share unit awards for Operating Committee members (U.S. and U.K.), dated as of January 16, 2024 (incorporated by reference to Exhibit 10.19 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5808) for the year ended December 31, 2023).\n(a)\n10.16\nForms of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for restricted stock units and performance share unit awards for Operating Committee members (U.S. and U.K.), dated as of January 21, 2025\n (inco\nrporated by reference to Exhibit 10.\n19\nto\n the A\nnnual Report on Form 10-K of JPMorgan Chase &\n Co. (File No. 1\n-5808) for the year ended December 31, 202\n4\n.\n(a)\n10.17\nForms of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for restricted stock units and performance share unit awards for Operating Committee members\n, dated as of\nJanuary\n20\n, 202\n6\n.\n(a)\n(\nb)\n10.18\nEmployee Stock Purchase Plan of JPMorgan Chase & Co., as amended and restated effective as of January 1, 2019 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of JPMorgan Chase & Co. (File No. 1-5805) for the quarter ended September 30, 2019).\n10.19\nForm of JPMorgan Chase & Co. Performance-Based Incentive Compensation Plan, effective as of January 1, 2021, as amended (incorporated by reference to Exhibit 10.23 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5808) for the year ended December 31, 2021).\n(a)\n19\nInsider Trading Policy - Firmwide\n, effective\nF\nebruary\n12\n, 202\n6\n.\n(b)\n21\nList of subsidiaries of JPMorgan Chase & Co.\n(b\n)\n22.1\nAnnual Report on Form 11-K of The JPMorgan Chase 401(k) Savings Plan for the year ended December 31, 2024 (to be filed pursuant to Rule\u00a015d-21 under the Securities Exchange Act of 1934).\n22.2\nSubsidiary Guarantors and Issuers of Guaranteed Securities.\n(b)\n23\nConsent of independent registered public accounting firm.\n(b)\n31.1\nCertification.\n(b)\n41\nPart IV\n31.2\nCertification.\n(b)\n32\nCertification pursuant to Section\u00a0906 of the Sarbanes-Oxley Act of 2002.\n(c)\n97\nRecovery of Erroneou\nsly Awarded Incentive-Based Compe\nnsation Policy - Firmwide,\neffective\nOctober 10, 2025\n.\n(b)\n101.INS\nThe instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.\n(d)\n101.SCH\nXBRL Taxonomy Extension Schema\nDocument.\n(b)\n101.CAL\nXBRL Taxonomy Extension Calculation Linkbase Document.\n(b)\n101.DEF\nXBRL Taxonomy Extension Definition Linkbase Document.\n(b)\n101.LAB\nXBRL Taxonomy Extension Label Linkbase Document.\n(b)\n101.PRE\nXBRL Taxonomy Extension Presentation Linkbase Document.\n(b)\n104\nCover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).\n(a)\u00a0\u00a0\u00a0\u00a0This exhibit is a management contract or compensatory plan or arrangement.\n(b)\u00a0\u00a0\u00a0\u00a0Filed herewith.\n(c)\u00a0\u00a0\u00a0\u00a0Furnished herewith. This exhibit shall not be deemed \u201cfiled\u201d for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.\n(d)\u00a0\u00a0\u00a0\u00a0Pursuant to Rule 405 of Regulation S-T, includes the following financial information included in the Firm\u2019s Form 10-K for the year ended December\u00a031, 2025, formatted in XBRL (eXtensible Business Reporting Language) interactive data files: (i) the Consolidated statements of income for the years ended December\u00a031, 2025, 2024 and 2023, (ii) the Consolidated statements of comprehensive income for the years ended December\u00a031, 2025, 2024 and 2023, (iii) the Consolidated balance sheets as of December\u00a031, 2025 and 2024, (iv) the Consolidated statements of changes in stockholders\u2019 equity for the years ended December\u00a031, 2025, 2024 and 2023, (v) the Consolidated statements of cash flows for the years ended December\u00a031, 2025, 2024 and 2023, and (vi) the Notes to Consolidated Financial Statements.\n42\nTable of contents\nFinancial:\nPage\nThree-Year Summary of Consolidated Financial Highlights\n44\nFive-Year Stock Performance\n45\nManagement\u2019s discussion and analysis:\nIntroduction\n46\nExecutive Overview\n47\nConsolidated Results of Operations\n51\nConsolidated Balance Sheets and Cash Flows Analysis\n55\nExplanation and Reconciliation of the Firm\u2019s Use of Non-GAAP Financial Measures\n59\nBusiness Segment\n & Corpo\nra\nte Results\n62\nFirmwide Risk Management\n83\nStrategic Risk Management\n88\nCapital Risk Management\n89\nLiquidity Risk Management\n100\nReputation Risk Management\n108\nCredit and Investment Risk Management\n109\nCredit Portfolio\n111\nConsumer Credit Portfolio\n112\nWholesale Credit Portfolio\n118\nAllowance for Credit Losses\n129\nInvestment Portfolio Risk Management\n132\nMarket Risk Management\n133\nCountry Risk Management\n143\nC\nli\nmate\nRisk Manag\nement\n145\nOperational Risk Management\n146\nCritical\nAccounting\nEstimates Used by the Firm\n154\nAccounting and Reporting Developments\n158\nForward-Looking Statements\n160\nAudited financial statements:\nManagement\u2019s Report on Internal Control Over Financial Reporting\n161\nReport of Independent Registered Public Accounting Firm\n162\nConsolidated Financial Statements\n165\nNotes to consolidated financial statements:\nPage\nNote 1 - Basis of presentation\n170\nNote 2 - Fair value measurement\n174\nNote 3 - Fair value option\n196\nNote 4 - Credit risk concentrations\n200\nNote 5 - Derivative instruments\n202\nNote 6 - Noninterest revenue and noninterest expense\n218\nNote 7 - Interest income and interest expense\n222\nNote 8 - Pension and other postretirement employee benefit\n plans\n223\nNote 9 - Employee share-based incentives\n226\nNote 10 - Investment securities\n228\nNote 11 - Securities financing activities\n233\nNote 12 - Loans\n236\nNote 13 - Allowance for credit losses\n258\nNote 14 - Variable interest entities\n263\nNote 15 - Goodwill, mortgage servicing rights, and other intangible\n assets\n272\nNote 16 - Premises and equipment\n277\nNote 17 - Deposits\n277\nNote 18 - Leases\n278\nNote 19 - Accounts payable and other liabilities\n280\nNote 20 - Long-term debt\n281\nNote 21 - Preferred stock\n283\nNote 22 - Common stock\n285\nNote 23 - Earnings per share\n286\nNote 24 - Accumulated other comprehensive income\n/(loss)\n287\nNote 25 - Income taxes\n288\nNote 26 - Restrict\ned\n cash\n,\n ot\nher r\nestri\ncted assets and\nintercompany funds transfers\n292\nNote 27 - Regulatory capital\n293\nNote 28 - Off-balance sheet lending-related financial instruments\n, g\nu\narantees, and other commitment\ns\n295\nNote 29 - Pledged assets and collateral\n301\nNote 30 - Litigation\n302\nNote 31 \u2013 International operations\n305\nNote 32 \u2013 Business segments & Corporate\n306\nNote 33 \u2013 Parent\nC\nompany\n310\nNote 34 \u2013 Business combinations\n312\nSupplementary Information:\nDistribution of assets, liabilities and stockholders\u2019 equity; interest rates and interest differentials\n315\nGlossary of Terms and Acronyms\n320\nJPMorgan Chase & Co./2025 Form 10-K\n43\nFinancial\n THREE-YEAR SUMMARY OF CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)\nAs of or for the year ended December 31,\n(in millions, except per share, ratio, employee data and where otherwise noted)\n2025\n2024\n2023\nSelected income statement data\nTotal net revenue\n$\n182,447\n\n$\n177,556\n(g)\n$\n158,104\nTotal noninterest expense\n95,640\n\n91,797\n(g)\n87,172\nPre-provision profit\n(a)\n86,807\n\n85,759\n70,932\nProvision for credit losses\n14,212\n\n(e)\n10,678\n9,320\nIncome before income tax expense\n72,595\n\n75,081\n61,612\nIncome tax expense\n15,547\n\n16,610\n12,060\nNet income\n$\n57,048\n\n$\n58,471\n$\n49,552\nEarnings per share data\nNet income:              Basic\n$\n20.05\n\n$\n19.79\n$\n16.25\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Diluted\n20.02\n\n19.75\n16.23\nAverage shares:     Basic\n2,776.5\n\n2,873.9\n2,938.6\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Diluted\n2,781.5\n\n2,879.0\n2,943.1\nMarket and per common share data\nMarket capitalization\n868,793\n\n670,618\n489,320\nCommon shares at period-end\n2,696.2\n\n2,797.6\n2,876.6\nBook value per share\n126.99\n\n116.07\n104.45\nTangible book value per share (\u201cTBVPS\u201d)\n(a)\n107.56\n\n97.30\n86.08\nCash dividends declared per share\n5.80\n\n4.80\n4.10\nSelected ratios and metrics\nReturn on common equity (\u201cROE\u201d)\n17\n\n%\n18\n%\n17\n%\nReturn on tangible common equity (\u201cROTCE\u201d)\n(a)\n20\n\n22\n21\nReturn on assets (\u201cROA\u201d)\n1.29\n\n1.43\n1.30\nOverhead ratio\n52\n\n52\n55\nLoans-to-deposits ratio\n58\n\n56\n55\nFirm Liquidity coverage ratio (\u201cLCR\u201d) (average)\n(b)\n111\n\n113\n113\nJPMorgan Chase Bank, N.A. LCR (average)\n(b)\n115\n\n124\n129\nCommon equity Tier 1 (\u201cCET1\u201d) capital ratio \u2013 Standardized\n(c)(d)\n14.6\n\n(f)\n15.7\n15.0\nTier 1 capital ratio \u2013 Standardized\n(c)(d)\n15.5\n\n(f)\n16.8\n16.6\nTotal capital ratio \u2013 Standardized\n(c)(d)\n17.4\n\n(f)\n18.5\n18.5\nTier 1 leverage ratio\n(b)(c)\n6.9\n\n7.2\n7.2\nSupplementary leverage ratio (\u201cSLR\u201d)\n(b)(c)\n5.8\n\n6.1\n6.1\nSelected balance sheet data (period-end)\nTrading assets\n$\n802,873\n\n$\n637,784\n$\n540,607\nInvestment securities, net of allowance for credit losses\n777,332\n\n681,320\n571,552\nLoans\n1,493,429\n\n1,347,988\n1,323,706\nTotal assets\n4,424,900\n\n4,002,814\n3,875,393\nDeposits\n2,559,320\n\n2,406,032\n2,400,688\nLong-term debt\n435,206\n\n401,418\n391,825\nCommon stockholders\u2019 equity\n342,393\n\n324,708\n300,474\nTotal stockholders\u2019 equity\n362,438\n\n344,758\n327,878\nEmployees\n318,512\n\n317,233\n309,926\nCredit quality metrics\nAllowances for credit losses\n$\n31,230\n\n$\n26,866\n$\n24,765\nAllowance for loan losses to total retained loans\n1.83\n\n%\n1.87\n%\n1.75\n%\nNonperforming assets\n$\n10,359\n\n$\n9,300\n$\n7,597\nNet charge-offs\n9,849\n\n8,638\n6,209\nNet charge-off rate\n0.74\n\n%\n0.68\n%\n0.52\n%\n(a)\nPre-provision profit, TBVPS and ROTCE are each non-GAAP financial measures. Tangible common equity (\u201cTCE\u201d) is also a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm\u2019s Use of Non-GAAP Financial Measures on pages 59\u201361 for a discussion of these measures.\n(b)\nFor the years ended December\u00a031, 2025, 2024 and 2023, the percentage represents average ratios for the three months ended December\u00a031, 2025, 2024 and 2023.\n(c)\nAs of January 1, 2025, the benefit from the Current Expected Credit Losses (\u201cCECL\u201d) capital transition provision had been fully phased out. For the years ended December 31, 2024 and 2023, the ratios reflected the CECL capital transition provisions. Refer to Note 27 for additional information.\n(d)\nAs of December\u00a031, 2025, the Advanced risk-based ratios became more binding on the Firm than the Standardized risk-based ratios. Refer to Capital Risk Management on pages 89\u201399 for additional information.\n(e)\nIncludes a provision for lending-related commitments of $2.2 billion related to the Apple Card transaction. Refer to Executive Overview on page 47 for additional information.\n(f)\nIncludes a decrease of approximately 25 basis points under the Standardized approach related to the Apple Card transaction. Refer to Capital Risk Management on pages 89\u201399 for additional information.\n(g)\nTotal net revenue included a $7.9 billion net gain related to Visa shares, and total noninterest expense included a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation, both recorded in the second quarter of 2024. Refer to Note 6 for additional information.\n44\nJPMorgan Chase & Co./2025 Form 10-K\nFIVE-YEAR STOCK PERFORMANCE\nThe following table and graph compare the five-year cumulative total return for JPMorgan Chase & Co. (\u201cJPMorganChase\u201d or the \u201cFirm\u201d) common stock with the cumulative return of the S&P 500 Index, the KBW Bank Index and the S&P Financials Index. The S&P 500 Index is a commonly referenced equity benchmark in the United States of America (\u201cU.S.\u201d), consisting of leading companies from different economic sectors. The KBW Bank Index seeks to reflect the performance of banks and thrifts that are publicly traded in the U.S. and is composed of leading national money center and regional banks and thrifts. The S&P Financials Index is an index of financial companies, all of which are components of the S&P 500. The Firm is a component of all three industry indices.\nThe following table and graph assume simultaneous investments of $100 on December 31, 2020, in JPMorganChase common stock and in each of the above indices. The comparison assumes that all dividends were reinvested.\nDecember 31,\n(in dollars)\n2020\n2021\n2022\n2023\n2024\n2025\nJPMorganChase\n$\n100.00\n$\n127.73\n$\n111.64\n$\n145.96\n$\n210.58\n$\n289.18\n\nKBW Bank Index\n100.00\n138.34\n108.74\n107.77\n147.86\n196.02\n\nS&P Financials Index\n100.00\n134.87\n120.66\n135.32\n176.67\n203.21\n\nS&P 500 Index\n100.00\n128.68\n105.37\n133.07\n166.37\n196.12\n\nDecember 31,\n(in dollars)\nJPMorgan Chase & Co./2025 Form 10-K\n45\nManagement\u2019s discussion and analysis\nThe following is Management\u2019s discussion and analysis of the financial condition and results of operations (\u201cMD&A\u201d) of JPMorganChase for the year ended December\u00a031, 2025. The MD&A is included in both JPMorganChase\u2019s Annual Report for the year ended December\u00a031, 2025 (\u201cAnnual Report\u201d) and its Annual Report on Form 10-K for the year ended December\u00a031, 2025 (\u201c2025 Form 10-K\u201d or \u201cForm 10-K\u201d) filed with the Securities and Exchange Commission (\u201cSEC\u201d). Refer to the Glossary of terms and acronyms on pages 320\u2013327 for definitions of terms and acronyms used throughout the Annual Report and the 2025 Form 10-K.\nThis Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current beliefs and expectations of JPMorganChase\u2019s management, speak only as of the date of this Form 10-K and are subject to significant risks and uncertainties. Refer to Forward-looking Statements on page 160 and Part 1, Item 1A: Risk Factors in this Form 10-K on pages 9\u201331 for a discussion of certain of those risks and uncertainties and the factors that could cause JPMorganChase\u2019s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results will be in line with any outlook information set forth herein, and the Firm does not undertake to update any forward-looking statements.\nINTRODUCTION\nJPMorgan Chase & Co. (NYSE: JPM), a financial holding company incorporated under Delaware law in 1968, is a leading financial services firm based in the United States of America (\u201cU.S.\u201d), with operations worldwide. JPMorganChase had $4.4 trillion in assets and $362.4 billion in stockholders\u2019 equity as of December\u00a031, 2025. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers, predominantly in the U.S., and many of the world\u2019s most prominent corporate, institutional and government clients globally.\nJPMorganChase\u2019s principal bank subsidiary is JPMorgan Chase Bank, National Association (\u201cJPMorgan Chase Bank, N.A.\u201d), a national banking association with U.S. branches in 48 states and Washington, D.C. JPMorganChase\u2019s principal non-bank subsidiary is J.P. Morgan Securities LLC (\u201cJ.P. Morgan Securities\u201d), a U.S. broker-dealer. The bank and non-bank subsidiaries of JPMorganChase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Firm\u2019s principal operating subsidiaries outside the U.S. are J.P. Morgan Securities plc and J.P. Morgan SE (\u201cJPMSE\u201d), which are subsidiaries of JPMorgan Chase Bank, N.A. and are based in the United Kingdom (\u201cU.K.\u201d) and Germany, respectively.\nFor management reporting purposes, the Firm has three reportable business segments \u2013 Consumer & Community Banking (\u201cCCB\u201d), Commercial & Investment Bank (\u201cCIB\u201d) and Asset & Wealth Management (\u201cAWM\u201d) \u2013 with the remaining activities in Corporate. The Firm's consumer business segment is CCB, and the Firm's wholesale business segments are CIB and AWM. Refer to Business Segment & Corporate Results on pages 62\u201382 and Note 32 for a description of the Firm\u2019s reportable business segments and the products and services that they provide to their respective client bases, as well as a description of Corporate activities.\nThe Firm\u2019s website is www.jpmorganchase.com. JPMorganChase makes available on its website, free of charge, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files or furnishes such material to the U.S. Securities and Exchange Commission (the \u201cSEC\u201d) at www.sec.gov. JPMorganChase makes new and important information about the Firm available on its website at https://www.jpmorganchase.com, including on the Investor Relations section of its website at https://www.jpmorganchase.com/ir. Information on the Firm's website, including documents on the website that are referenced in this Form 10-K, is not incorporated by reference into this 2025 Form 10-K or the Firm\u2019s other filings with the SEC.\n46\nJPMorgan Chase & Co./2025 Form 10-K\nEXECUTIVE OVERVIEW\nThis executive overview of the MD&A highlights selected information and does not contain all of the information that is important to readers of the Firm\u2019s 2025 Form 10-K. For a complete description of the trends and uncertainties, as well as the risks and critical accounting estimates affecting the Firm, the 2025 Form 10-K should be read in its entirety.\nFinancial performance of JPMorganChase\nYear ended December 31,\n(in millions, except per share data and ratios)\n2025\n2024\nChange\nSelected income statement data\nNoninterest revenue\n$\n87,004\n\n$\n84,973\n2%\nNet interest income\n95,443\n\n92,583\n3\nTotal net revenue\n182,447\n\n177,556\n3\nTotal noninterest expense\n95,640\n\n91,797\n4\nPre-provision profit\n86,807\n\n85,759\n1\nProvision for credit losses\n14,212\n\n10,678\n33\nNet income\n57,048\n\n58,471\n(2)\nDiluted earnings per share\n20.02\n\n19.75\n1\nSelected ratios and metrics\nReturn on common equity\n17\n\n%\n18\n%\nReturn on tangible common equity\n20\n\n22\nBook value per share\n$\n126.99\n\n$\n116.07\n9\nTangible book value per share\n107.56\n\n97.3\n11\nCapital ratios - Standardized\n(a)(b)\nCET1 capital\n14.6\n\n%\n15.7\n%\nTier 1 capital\n15.5\n\n16.8\nTotal capital\n17.4\n\n18.5\nMemo:\nNII excluding Markets\n(c)\n$\n92,591\n\n$\n92,419\n\u2014\nNIR excluding Markets\n(c)\n57,208\n\n58,167\n(2)\nMarkets\n(d)\n35,782\n\n30,007\n19\nTotal net revenue - managed basis\n$\n185,581\n\n$\n180,593\n3%\n(a)\u00a0\u00a0\u00a0\u00a0As of January 1, 2025, the benefit from the CECL capital transition provision had been fully phased out. For the year ended December 31, 2024, the ratios reflected the CECL capital transition provisions. Refer to Note 27 for additional information.\n(b)\u00a0\u00a0\u00a0\u00a0As of December\u00a031, 2025, the Advanced risk-based ratios became more binding on the Firm than the Standardized risk-based ratios. Refer to Capital Risk Management on pages 89\u201399 for additional information.\n(c)\u00a0\u00a0\u00a0\u00a0NII and NIR refer to net interest income and noninterest revenue, respectively.\n(d)\u00a0\u00a0\u00a0\u00a0Markets consists of CIB's Fixed Income Markets and Equity Markets businesses.The Firm assesses the performance of its Markets business on a total net revenue basis, as revenues in NII generally have offsets across other revenue lines, primarily Principal transactions revenue.\nApple Card transaction:\nOn January 7, 2026, JPMorganChase announced that Chase will become the new issuer of Apple Card. The Firm entered into a forward purchase commitment on December 30, 2025 to acquire the Apple credit card portfolio, with an expected closing in approximately 24 months (the \u201cApple Card transaction\u201d).\nRefer to CCB segment results on pages 65\u201368, Capital Risk Management on pages 89\u201399 and Notes 4, 13, 27 and 28 for additional information.\nComparisons noted in the sections below are for the full year of 2025 versus the full year of 2024, unless otherwise specified.\nFirmwide overview\nJPMorganChase reported net income of $57.0 billion for 2025, down 2%, earnings per share of $20.02, ROE of 17% and ROTCE of 20%.\n\u2022\nTotal net revenue\n was $182.4 billion, up 3%, reflecting:\n\u2013\nNet interest income\n (\u201cNII\u201d) of $95.4 billion, up 3%, driven by higher Markets net interest income, higher revolving balances in Card Services, higher wholesale deposit balances, and the impact of investment securities activity. These factors were largely offset by deposit margin compression and the impact of lower rates. NII excluding Markets was $92.6 billion, flat when compared with the prior year.\n\u2013\nNoninterest revenue\n (\u201cNIR\u201d) was $87.0 billion, up 2%, reflecting higher Markets noninterest revenue, higher asset management fees in AWM and CCB, higher auto operating lease income, lower net investment securities losses in Treasury and CIO, higher Payments fees, higher investment banking fees, and a $588 million First Republic-related gain recorded in the first quarter of 2025. These increases were predominantly offset by the absence of the $7.9 billion net gain related to Visa shares recorded in the second quarter of 2024, as well as lower card income in the current year.\n\u2022\nNoninterest expense\n was $95.6 billion, up 4%, driven by higher compensation expense, including higher revenue-related compensation and growth in the number of employees. The increase in expense was also driven by higher brokerage expense and distribution fees, higher auto lease depreciation, and continued investments in technology and marketing, as well as higher occupancy expense. These factors were partially offset by FDIC special assessment accrual releases of $763 million compared with an increase of $725 million in the prior year, as well as the absence of a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024.\nJPMorgan Chase & Co./2025 Form 10-K\n47\n\u2022\nThe\nprovision for credit losses\n\nwas $14.2 billion. Net charge-offs were $9.8 billion, up $1.2 billion, predominantly driven by Wholesale and Card Services. The net addition to the allowance for credit losses was $4.4 billion and consisted of $3.3 billion in\nconsumer\n, which included $2.2 billion related to the Apple Card transaction, and $1.1 billion in\nwholesale\n.\nIn the prior year, the provision was $10.7 billion, net charge-offs were $8.6 billion and the net addition to the allowance for credit losses was $2.0 billion.\n\u2022\nThe total\nallowance for credit losses\n was $31.2 billion at December\u00a031, 2025. The Firm had an allowance for loan losses to retained loans coverage ratio of 1.83%, compared with 1.87% in the prior year.\nRefer to Consolidated Results of Operations and Consolidated Balance Sheets Analysis on pages 51\u201354 and pages 55\u201357, respectively, for a further discussion of the Firm's results, including the provision for credit losses.\nPre-provision profit, ROTCE, TCE, TBVPS, NII and NIR excluding Markets, and total net revenue on a managed basis, are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm\u2019s Use of Non-GAAP Financial Measures on pages 59\u201361 for a further discussion of each of these measures.\n\u2022\nThe Firm\u2019s\nnonperforming assets\n totaled $10.4 billion at December\u00a031, 2025, up 11%, driven by:\n\u2013\nhigher consumer nonaccrual loans, predominantly due to the impact of the wildfires in California in January 2025, as well as higher loans at fair value in CIB, and\n\u2013\nhigher wholesale nonaccrual loans, reflecting downgrades to exposures in certain industries, predominantly offset by net portfolio activity and upgrades.\nRefer to Wholesale Credit Portfolio and Consumer Credit Portfolio on pages 118\u2013128 and pages 112\u2013117, respectively, for additional information.\n\u2022\nFirmwide\naverage loans\nof $1.4 trillion were up 6%, predominantly driven by higher loans in CIB and AWM.\n\u2022\nFirmwide\naverage deposits\n of $2.5 trillion were up 5%, reflecting:\n\u2013\nnet inflows related to client-driven activities in Payments and Securities Services, and\n\u2013\ngrowth in both new accounts and balances in existing accounts in AWM,\npartially offset by\n\u2013\na decrease in CCB primarily driven by increased customer spending.\nRefer to Liquidity Risk Management on pages 100\u2013107 for additional information.\nSelected capital and other metrics\n\u2022\nCET1 capital\nwas $288.5 billion, and the Standardized and Advanced CET1 ratios were 14.6% and 14.1%, respectively.\n\u2022\nSLR\n was 5.8%.\n\u2022\nTBVPS\ngrew 10.5%, ending 2025 at $107.56.\n\u2022\nAs of December\u00a031, 2025, the Firm had eligible end-of-period\nHigh Quality Liquid Assets\n (\u201cHQLA\u201d) of approximately $915 billion and\n unencumbered\n\nmarketable securities\n with a fair value of approximately $548 billion, resulting in approximately $1.5 trillion of liquidity sources.\nRefer to Capital Risk Management and Liquidity Risk Management on pages 89\u201399 and pages 100\u2013107, respectively, for additional information.\n48\nJPMorgan Chase & Co./2025 Form 10-K\nBusiness segment highlights\nSelected business metrics for each of the Firm\u2019s lines of business (\u201cLOB\u201d) are presented below for the full year of 2025.\nCCB\nROE 32%\n\u2022\nAverage deposits down 1%; client investment assets up 17%\n\u2022\nAverage loans up 1%; Card Services net charge-off rate of 3.31%\n\u2022\nDebit and credit card sales volume\n(a)\n up 7%\n\u2022\nActive mobile customers\n(b)\n up 7%\nCIB\nROE 18%\n\u2022\nInvestment Banking fees up 7%;  #1 ranking for Global Investment Banking fees with 8.4% wallet share for the year\n\u2022\nMarkets revenue up 19%, with Fixed Income Markets up 12% and Equity Markets up 33%\n\u2022\nAverage Banking & Payments loans\n(c)\n flat; average client deposits\n(d)\n up 14%\nAWM\nROE 40%\n\u2022\nAssets under management (\"AUM\") of $4.8 trillion, up 18%\n\u2022\nAverage loans up 8%; average deposits up 4%\n(a)\nExcludes Commercial Card.\n(b)\nUsers of all mobile platforms who have logged in within the past 90 days.\n(c)\nOn January 1, 2025, $5.6 billion of loans were realigned from Global Corporate Banking to Fixed Income Markets.\n(d)\nRepresents client deposits and other third-party liabilities pertaining to the Payments and Securities Services businesses.\nRefer to the Business Segment & Corporate Results on pages 62\u201382 for a detailed discussion of results by business segment.\nCredit provided and capital raised\nJPMorganChase continues to support consumers, businesses and communities around the globe. The Firm provided new and renewed credit and raised capital for wholesale and consumer clients during 2025, consisting of approximately:\n$3.3 trillion\nTotal credit provided and capital raised (including loans and commitments)\n$280\nbillion\nCredit for consumers\n$33\nbillion\nCredit for U.S. small businesses\n$2.9 trillion\nCredit and capital for corporations and non-U.S. government entities\n(a)\n$76\n\u00a0billion\nCredit and capital for nonprofit and U.S. government entities\n(b)\n(a)\nIncludes Individuals and Individual Entities primarily consisting of Global Private Bank clients within AWM.\n(b)\nIncludes states, municipalities, hospitals and universities.\nJPMorgan Chase & Co./2025 Form 10-K\n49\nRecent events\n\u2022\nOn December 8, 2025, JPMorganChase announced that Todd A. Combs had resigned from the Firm\u2019s Board of Directors and would join the Firm as the head of the Strategic Investment Group within the Firm\u2019s Security and Resiliency Initiative.\nOutlook\nThe statements set forth below are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the beliefs and expectations of JPMorganChase\u2019s management, speak only as of the date on which they were made, and are subject to significant risks and uncertainties. Refer to Forward-Looking Statements on page 160 and Part I, Item 1A: Risk Factors on pages 9\u201331 of this Form 10-K for a further discussion of certain of those risks and uncertainties and the other factors that could cause JPMorganChase\u2019s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results in 2026 will be in line with the outlook information set forth below, and the Firm does not undertake to update any forward-looking statements.\nJPMorganChase\u2019s outlook for full-year 2026 should be viewed against the backdrop of the global and U.S. economies, financial markets activity, the geopolitical environment, the competitive environment, client and customer activity levels, and regulatory and legislative developments in the U.S. and other countries where the Firm does business. Each of these factors will affect the performance of the Firm. The Firm will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the business, economic, regulatory and legal environments in which it operates.\nThe Firm provided the following outlook information on January 13, 2026 in connection with announcing its results for the year and quarter ended December 31, 2025:\nFull-year 2026\n\u2022\nManagement expects net interest income to be approximately $103 billion and net interest income excluding Markets to be approximately $95 billion, market dependent.\n\u2022\nManagement expects adjusted expense to be approximately $105 billion, market dependent.\n\u2022\nManagement expects the net charge-off rate in Card Services to be approximately 3.4%.\nNet interest income excluding Markets and adjusted expense are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm\u2019s Use of Non-GAAP Financial Measures on pages 59\u201361.\n50\nJPMorgan Chase & Co./2025 Form 10-K\nCONSOLIDATED RESULTS OF OPERATIONS\nThis section provides a comparative discussion of JPMorganChase\u2019s Consolidated Results of Operations on a reported basis for the two-year period ended December\u00a031, 2025, unless otherwise specified. Refer to Consolidated Results of Operations on pages 59-62 of the Firm\u2019s Annual Report on Form 10-K for the year ended December\u00a031, 2024 (the \u201c2024 Form 10-K\u201d) for a discussion of the 2024 versus 2023 results. Factors that relate primarily to a single business segment or Corporate are discussed in more detail in the results of that segment or Corporate. Refer to pages 154\u2013157 for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations.\nRevenue\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nInvestment banking fees\n$\n9,615\n\n$\n8,910\n$\n6,519\nPrincipal transactions\n27,212\n\n24,787\n24,460\nLending- and deposit-related fees\n9,093\n\n7,606\n7,413\nAsset management fees\n20,327\n\n17,801\n15,220\nCommissions and other fees\n8,539\n\n7,530\n6,836\nInvestment securities losses\n(57)\n(1,021)\n(3,180)\nMortgage fees and related income\n1,381\n\n1,401\n1,176\nCard income\n4,720\n\n5,497\n4,784\nOther income\n(a)\n6,174\n\n12,462\n(b) (c)\n5,609\n(d)\nNoninterest revenue\n87,004\n\n84,973\n68,837\nNet interest income\n95,443\n\n92,583\n89,267\nTotal net revenue\n$\n182,447\n\n$\n177,556\n$\n158,104\n(a)\nIncluded operating lease income of $3.8 billion, $2.8 billion and $2.8 billion for the years ended December\u00a031, 2025, 2024 and 2023, respectively. Refer to Note 6 for additional information.\n(b)\nEffective January 1, 2024, as a result of adopting updates to the Accounting for Investments in Tax Credit Structures guidance, the amortization of certain of the Firm\u2019s alternative energy tax-oriented investments that was previously recognized in other income is now recognized in income tax expense. Refer to Notes 1, 6, 14 and 25 for additional information.\n(c)\nIncluded the net gain related to Visa shares of $7.9 billion recorded in the second quarter of 2024. Refer to Note 6 for additional information.\n(d)\nIncluded the estimated bargain purchase gain of $2.8 billion for the year ended December\u00a031, 2023 associated with the First Republic acquisition. Refer to Notes 6 and 34 for additional information.\n2025 compared with 2024\nInvestment banking fees\n increased, reflecting in CIB\n:\n\u2022\nhigher debt underwriting fees predominantly driven by non-investment grade loans and investment grade bonds,\n\u2022\nhigher advisory fees benefiting from higher fees from deals in the Financial Institutions and Technology sectors, partially offset by lower fees from deals in the Media & Telecommunications sector, and\n\u2022\nhigher equity underwriting fees primarily driven by higher revenue from IPOs.\nRefer to CIB segment results on pages 69\u201375 and Note 6 for additional information.\nPrincipal transactions revenue\n increased, reflecting in CIB:\n\u2022\nhigher Fixed Income Markets revenue primarily driven by higher revenue in Rates and Commodities, largely offset by lower revenue in Securitized Products, Fixed Income Financing and Currencies & Emerging Markets, and\n\u2022\nhigher Equity Markets revenue, particularly in Equity Derivatives.\nThe increase in CIB was partially offset by lower revenue in Treasury and CIO.\nPrincipal transactions revenue in CIB generally has offsets across other revenue lines, including net interest income. The Firm assesses the performance of its Markets business on a total net revenue basis.\nRefer to CIB segment and Corporate results on pages 69\u201375 and pages 80\u201382, respectively, and Note 6 for additional information.\nLending- and deposit-related fees\n increased, reflecting:\n\u2022\nin CIB, a reduction in client credits applied to deposit-related fees, as well as higher cash management fees in Payments as a result of higher volume, and\n\u2022\nin CCB, higher deposit-related fees as a result of higher transaction volume and new accounts.\nRefer to CCB and CIB segment results on pages 65\u201368 and pages 69\u201375, respectively, and Note 6 for additional information.\nAsset management fees\n increased driven by higher average market levels in AWM and CCB, as well as net inflows in AWM and, to a lesser extent, in CCB. Refer to CCB and AWM segment results on pages 65\u201368 and pages 76\u201379, respectively, and Note 6 for additional information.\nCommissions and other fees\n increased in CIB and AWM, predominantly due to higher brokerage commissions on higher volume and, to a lesser extent, higher custody fees as a result of higher client activity and market levels. Refer to CIB and AWM segment results on pages 69\u201375 and pages 76\u201379, respectively, and Note 6 for additional information.\nJPMorgan Chase & Co./2025 Form 10-K\n51\nInvestment securities losses\n\ndecreased, reflecting lower losses on sales of securities associated with repositioning the investment securities portfolio in Treasury and CIO. The prior year net loss was primarily related to sales of U.S. GSE and government agency MBS and U.S. Treasuries. Refer to Corporate results on pages 80\u201382 and Note 10 for additional information.\nMortgage fees and related income\n: refer to Notes 6 and 15 for additional information.\nCard income\n decreased driven by the net impact of:\n\u2022\nlower income in CCB, reflecting lower net interchange income, as well as an increase in amortization related to new account origination costs, partially offset by higher annual fees. Net interchange income decreased as the impact of increased debit and credit card sales volume was more than offset by higher rewards costs and partner payments, and\n\u2022\nhigher card revenue in CIB Payments as a result of higher volume.\nRefer to CCB and CIB segment results on pages 65\u201368 and pages 69\u201375, respectively, and Note 6 for additional information.\nOther income\n decreased, reflecting:\n\u2022\nthe absence in Corporate of the $7.9 billion net gain related to Visa shares recorded in the second quarter of 2024,\npartially offset by\n\u2022\nhigher auto operating lease income in CCB due to growth in volume,\n\u2022\nthe $588 million First Republic-related gain recorded in the first quarter of 2025 in Corporate, and\n\u2022\nlower losses related to certain equity investments in CIB.\nRefer to CCB and CIB segment and Corporate results on pages 65\u201368, pages 69\u201375 and pages 80\u201382, respectively, for additional information; Note 6 for additional information on Visa shares; and Notes 6 and 34 for additional information on the First Republic acquisition.\nNet interest income\n increased driven by higher Markets net interest income, higher revolving balances in Card Services, higher wholesale deposit balances, and the impact of investment securities activity. These factors were largely offset by deposit margin compression and the impact of lower rates.\nThe Firm\u2019s average interest-earning assets were $3.8 trillion, up $297 billion, and the yield was 5.05%, down 45 bps. The net yield on these assets, on an FTE basis, was 2.50%, a decrease of 13 bps. The net yield excluding Markets was 3.75%, a decrease of 9 bps, when compared to the prior year.\nRefer to the Consolidated average balance sheets, interest and rates schedule on pages 315\u2013319 for additional information. Net yield excluding Markets is a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm\u2019s Use of Non-GAAP Financial Measures on pages 59\u201361 for an additional discussion of net yield excluding Markets.\n52\nJPMorgan Chase & Co./2025 Form 10-K\nProvision for credit losses\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nConsumer, excluding credit card\n$\n693\n\n$\n631\n$\n935\nCredit card\n10,829\n\n9,292\n6,048\nTotal consumer\n11,522\n\n9,923\n6,983\nWholesale\n2,718\n\n731\n2,299\nInvestment securities\n(28)\n24\n38\nTotal provision for credit losses\n$\n14,212\n\n$\n10,678\n$\n9,320\n2025 compared with 2024\n\nThe\n\nprovision for credit losses\n was $14.2 billion. Net charge-offs were $9.8 billion and the net addition to the allowance for credit losses was $4.4 billion.\nThe provision for credit losses included:\n\u2022\n$11.5 billion in\nconsumer\n, consisting of net charge-offs of $8.3 billion, predominantly driven by Card Services, reflecting loan growth, and a net addition to the allowance for credit losses of $3.3 billion which was driven by $2.2 billion related to the Apple Card transaction, loan growth in Card Services and the impact of changes in the Firm's weighted-average macroeconomic outlook, partially offset by reduced borrower uncertainty, and\n\u2022\n$2.7 billion in\nwholesale\n, driven by net increases in the loan and lending-related commitment portfolios, net changes in credit quality of client-specific exposures, an update to loss assumptions on certain leveraged loans, and estimated losses related to borrower fraud in certain secured lending facilities, partially offset by the impact of changes in the Firm's weighted-average macroeconomic outlook. Net charge-offs were $1.6 billion and the net addition to the allowance for credit losses was $1.1 billion.\nIn the prior year, the provision was $10.7 billion, net charge-offs were $8.6 billion and the net addition to the allowance for credit losses was $2.0 billion.\nRefer to CCB, CIB and AWM segment and Corporate results on pages 65\u201368, pages 69\u201375, pages 76\u201379, and pages 80\u201382, respectively; Allowance for Credit Losses on pages 129\u2013131; Critical Accounting Estimates Used by the Firm on pages 154\u2013157; and Notes 12 and 13 for additional information on the credit portfolio and the allowance for credit losses.\nJPMorgan Chase & Co./2025 Form 10-K\n53\nNoninterest expense\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nCompensation expense\n$\n54,487\n\n$\n51,357\n$\n46,465\nNoncompensation expense:\nOccupancy\n5,461\n\n5,026\n4,590\nTechnology, communications and equipment\n(a)\n11,029\n\n9,831\n9,246\nProfessional and outside services\n12,356\n\n11,057\n10,235\nMarketing\n5,531\n\n4,974\n4,591\nOther expense\n6,776\n\n9,552\n(c)\n12,045\nTotal noncompensation expense\n41,153\n\n40,440\n40,707\nTotal noninterest expense\n$\n95,640\n\n$\n91,797\n$\n87,172\nCertain components of other expense\n(b)\nLegal expense\n$\n361\n\n$\n740\n$\n1,436\nFDIC-related expense\n531\n\n1,893\n4,203\nOperating losses\n1,292\n\n1,417\n1,228\n(a)\nIncludes depreciation expense associated with auto operating lease assets. Refer to Note 18 for additional information.\n(b)\nRefer to Note 6 for additional information.\n(c)\nIncluded a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024. Refer to Note 6 for additional information.\n2025 compared with 2024\nCompensation expense\n increased driven by:\n\u2022\ngrowth in the number of employees, primarily front office employees, and\n\u2022\nhigher revenue-related compensation, predominantly in CIB and AWM.\nNoncompensation expense\n increased, primarily reflecting:\n\u2022\nhigher brokerage expense in CIB and higher distribution fees in AWM,\n\u2022\nhigher depreciation expense on higher auto operating lease assets in CCB,\n\u2022\nhigher investments in technology across the LOBs and Corporate and in marketing in CCB, and\n\u2022\nhigher occupancy expense, reflecting net additions and improvements to the Firm\u2019s properties, including its new headquarters, bank branches and other corporate offices,\npartially offset by\n\u2022\nlower FDIC-related expense driven by releases of FDIC special assessment accruals of $763 million in Corporate, compared with an accrual increase of $725 million in the first quarter of the prior year, and\n\u2022\nthe absence in Corporate of the following items recorded in the prior year\n\u2013\na $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation, and\n\u2013\nrestructuring and integration costs associated with First Republic.\nRefer to Note 6 for additional information on FDIC-related expense and Visa shares, and Note 34 for additional information on the First Republic acquisition.\nIncome tax expense\nYear ended December 31,\n(in millions, except rate)\n2025\n2024\n2023\nIncome before income tax expense\n$\n72,595\n$\n75,081\n$\n61,612\nIncome tax expense\n15,547\n16,610\n(a)\n12,060\nEffective tax rate\n21.4\n\n%\n22.1\n%\n19.6\n%\n(a)\nEffective January 1, 2024, as a result of adopting updates to the Accounting for Investments in Tax Credit Structures guidance, the amortization of certain of the Firm\u2019s alternative energy tax-oriented investments is now recognized in income tax expense. Refer to Notes 1, 6, 14 and 25 for additional information.\n2025 compared with 2024\nThe\neffective tax rate\n\ndecreased driven by:\n\u2022\na $774 million income tax benefit in Corporate recorded in the second quarter of 2025, driven by the resolution of certain tax audits and the impact of tax regulations related to foreign currency translation gains and losses finalized in 2024 and effective for 2025, and\n\u2022\nhigher tax benefits related to the vesting of employee share-based awards,\npartially offset by\n\u2022\nother changes in the level and mix of income and expenses subject to U.S. federal, state and local taxes, and\n\u2022\nlower benefits associated with other tax audits.\nRefer to Note 25 for additional information.\n54\nJPMorgan Chase & Co./2025 Form 10-K\nCONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS\nConsolidated balance sheets analysis\nThe following is a discussion of the significant changes between December\u00a031, 2025 and 2024. Refer to pages 154\u2013157 for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Balance Sheets.\nSelected Consolidated balance sheets data\nDecember 31, (in millions)\n2025\n2024\nChange\nAssets\nCash and due from banks\n$\n21,742\n\n$\n23,372\n(7)\n%\nDeposits with banks\n321,596\n\n445,945\n(28)\nFederal funds sold and securities purchased under resale agreements\n336,426\n\n295,001\n14\nSecurities borrowed\n286,191\n\n219,546\n30\nTrading assets\n802,873\n\n637,784\n26\nAvailable-for-sale securities\n507,198\n\n406,852\n25\nHeld-to-maturity securities\n270,134\n\n274,468\n(2)\nInvestment securities, net of allowance for credit losses\n777,332\n\n681,320\n14\nLoans\n1,493,429\n\n1,347,988\n11\nAllowance for loan losses\n(25,765)\n(24,345)\n6\nLoans, net of allowance for loan losses\n1,467,664\n\n1,323,643\n11\nAccrued interest and accounts receivable\n111,599\n\n101,223\n10\nPremises and equipment\n36,244\n\n32,223\n12\nGoodwill, MSRs and other intangible assets\n64,458\n\n64,560\n\u2014\nOther assets\n198,775\n\n178,197\n12\nTotal assets\n$\n4,424,900\n\n$\n4,002,814\n11\n%\nCash and due from banks and deposits with banks\ndecreased driven by Markets activities in CIB, higher investment securities, higher loans and cash deployment in Treasury and CIO, largely offset by the impact of higher deposits and higher long-term debt.\nFederal funds sold and securities purchased under resale agreements\n\nincreased driven by Markets, reflecting the impact of lower levels of netting, higher collateral requirements and higher demand for securities to cover short positions.\nSecurities borrowed\n increased driven by Markets, reflecting higher client-driven activities and higher demand for securities to cover short positions.\nRefer to Note 11 for additional information on securities purchased under resale agreements and securities borrowed.\nTrading assets\nincreased predominantly driven by Markets, due to higher levels of debt instruments, partially offset by lower levels of equity instruments, both related to client-driven market-making activities. Refer to Notes 2 and 5 for additional information.\nInvestment securities\n increased. Excluding a non-cash transfer in the third quarter of 2025 of $44.1 billion of securities from available-for-sale (\"AFS\") to held-to-maturity (\u201cHTM\u201d) for asset-liability management purposes,\n\u2022\nAFS securities increased driven by net purchases, predominantly U.S. Treasuries and non-U.S. government debt securities, partially offset by maturities and paydowns; and\n\u2022\nHTM securities decreased driven by maturities and paydowns.\nRefer to Corporate results on pages 80\u201382, Investment Portfolio Risk Management on page 132, and Notes 2 and 10 for additional information.\nLoans\n\nincreased, reflecting:\n\u2022\nhigher wholesale loans, predominantly in Markets associated with higher client demand,\n\u2022\nhigher securities-based lending in AWM due to higher client demand, and\n\u2022\nhigher outstanding balances in Card Services driven by growth in new accounts and higher revolving balances,\npartially offset by\n\u2022\na decline in Home Lending as loan sales and paydowns outpaced originations.\nThe\nallowance for loan losses\n\nincreased, reflecting a net addition to the allowance for loan losses of $1.4 billion, and consisted of:\nJPMorgan Chase & Co./2025 Form 10-K\n55\n\u2022\n$1.1 billion in\nconsumer\n, driven by loan growth in Card Services and the impact of changes in the Firm's weighted-average macroeconomic outlook, partially offset by reduced borrower uncertainty, and\n\u2022\n$350 million in\nwholesale\n, driven by a net increase in the loan portfolio, an update to loss assumptions on certain leveraged loans, and net changes in credit quality of client-specific exposures, partially offset by a reduction due to the impact of charge-offs and changes in the Firm's weighted-average macroeconomic outlook.\nThere was also a $3.0 billion net addition to the allowance for lending-related commitments recognized in other liabilities on the Consolidated balance sheets. The net addition was predominantly driven by $2.2 billion related to the Apple Card transaction and the impact of new lending-related commitments.\nRefer to Consolidated Results of Operations and Credit and Investment Risk Management on pages 51\u201354 and pages 109\u2013132, respectively, Critical Accounting Estimates Used by the Firm on pages 154\u2013157, and Notes 2, 3, 12 and 13 for additional information on loans and the total allowance for credit losses.\nAccrued interest and accounts receivable\n\nincreased predominantly due to higher client-driven activities in Markets.\nPremises and equipment\n\nincreased, reflecting the impact of net additions and improvements to the Firm\u2019s properties, including its new headquarters, bank branches and other corporate offices. Refer to Notes 16 and 18 for additional information.\nGoodwill, MSRs and other intangibles\n:\n\nRefer to Note 15 for additional information.\nOther assets\n increased predominantly due to higher cash collateral placed with counterparties in Markets, and higher auto operating lease assets in CCB.\nSelected Consolidated balance sheets data (continued)\nDecember 31, (in millions)\n2025\n2024\nChange\nLiabilities\nDeposits\n$\n2,559,320\n\n$\n2,406,032\n6\n%\nFederal funds purchased and securities loaned or sold under repurchase agreements\n442,396\n\n296,835\n49\nShort-term borrowings\n64,776\n\n52,893\n22\nTrading liabilities\n216,019\n\n192,883\n12\nAccounts payable and other liabilities\n316,794\n\n280,672\n13\nBeneficial interests issued by consolidated variable interest entities (\u201cVIEs\u201d)\n27,951\n\n27,323\n2\nLong-term debt\n435,206\n\n401,418\n8\nTotal liabilities\n4,062,462\n\n3,658,056\n11\nStockholders\u2019 equity\n362,438\n\n344,758\n5\nTotal liabilities and stockholders\u2019 equity\n$\n4,424,900\n\n$\n4,002,814\n11\n%\nDeposits\n\nincreased, reflecting:\n\u2022\nan increase in CIB due to net inflows related to client-driven activities in Payments and Securities Services,\n\u2022\nan increase in CCB primarily driven by new accounts, predominantly offset by increased customer spending, and\n\u2022\nan increase in AWM primarily driven by growth in both new accounts and balances in existing accounts, including the impact of higher-yielding product offerings, largely offset by migration into other investment products.\nFederal funds purchased and securities loaned or sold under repurchase agreements\n increased driven by Markets, primarily reflecting higher secured financing of trading assets.\nShort-term borrowings\n\nincreased driven by higher financing requirements in Markets.\nRefer to Liquidity Risk Management on pages 100\u2013107 for additional information on deposits, federal funds purchased and securities loaned or sold under repurchase agreements, and short-term borrowings; Notes 2 and 17 for deposits; and Note 11 for federal funds purchased and securities loaned or sold under repurchase agreements.\nTrading liabilities\n\nincreased due to client-driven\n\nmarket-making activities, which resulted in higher levels of short positions, as well as higher derivative payables, primarily as a result of market movements. Refer to Notes 2 and 5 for additional information.\nAccounts payable and other liabilities\n increased\n\npredominantly\n\ndue to higher brokerage payables related to client-driven activities in Markets. Refer to Note 19 for additional information on accounts payable.\n56\nJPMorgan Chase & Co./2025 Form 10-K\nBeneficial interests issued by consolidated VIEs\n: Refer to Liquidity Risk Management on pages 100\u2013107; and Notes 14 and 28 for additional information related to Firm-sponsored VIEs and loan securitization trusts.\nLong-term debt\n\nincreased driven by net issuances of structured notes in Markets due to client demand and an increase in the fair value of such instruments, as well as net issuances of long-term debt in Treasury and CIO, partially offset by a net reduction in Federal Home Loan Bank (\"FHLB\") advances\n.\nRefer to Liquidity Risk Management on pages 100\u2013107 for additional information.\nStockholders\u2019 equity\n increased, reflecting:\n\u2022\nnet income, and\n\u2022\nnet unrealized gains in AOCI in Treasury and CIO, driven by the impact of lower interest rates on AFS securities and cash flow hedges, and spreads tightening on AFS securities,\nlargely offset by\n\u2022\nthe impact of capital actions, including net repurchases of common shares and dividend payments on common and preferred stock.\nRefer to Consolidated Statements of changes in stockholders\u2019 equity\n\non page 168, Capital Actions on page 97, and Note 24 for additional information.\nJPMorgan Chase & Co./2025 Form 10-K\n57\nConsolidated cash flows analysis\nThe following is a discussion of cash flow activities during the years ended December\u00a031, 2025 and 2024. Refer to Consolidated cash flows analysis on page 66 of the Firm\u2019s 2024 Form 10-K for a discussion of the 2023 activities.\n(in millions)\nYear ended December 31,\n2025\n2024\n2023\nNet cash provided by/\n(used in)\nOperating activities\n$\n(147,782)\n$\n(42,012)\n$\n12,974\nInvesting activities\n(265,565)\n(163,403)\n67,643\nFinancing activities\n269,533\n\n63,447\n(25,571)\nEffect of exchange rate changes on cash\n17,835\n\n(12,866)\n1,871\nNet increase/(decrease) in cash and due from banks and deposits with banks\n$\n(125,979)\n$\n(154,834)\n$\n56,917\nOperating activities\nJPMorganChase\u2019s operating assets and liabilities primarily support the Firm\u2019s lending and capital markets activities. These assets and liabilities can vary significantly in the normal course of business due to the amount and timing of cash flows, which are affected by client-driven and risk management activities and market conditions. The Firm believes that cash flows from operations, available cash and other liquidity sources, and its capacity to generate cash through secured and unsecured sources, are sufficient to meet its operating liquidity needs.\n\u2022\nIn 2025, cash used resulted from higher trading assets, higher securities borrowed, net originations and purchases of loans held-for-sale, higher other assets and higher accrued interest and accounts receivable, partially offset by net income excluding non-cash adjustments, and higher trading liabilities.\n\u2022\nIn 2024, cash used resulted from higher trading assets and higher securities borrowed, largely offset by net income excluding non-cash adjustments.\nInvesting activities\nThe Firm\u2019s investing activities predominantly include originating held-for-investment loans, and investing in the investment securities portfolio and other short-term instruments.\n\u2022\nIn 2025, cash used resulted from net loan originations, net purchases of investment securities and higher securities purchased under resale agreements.\n\u2022\nIn 2024, cash used resulted from net purchases of investment securities, net loan originations and higher securities purchased under resale agreements, partially offset by proceeds from sales and securitizations of loans held-for-investment.\nFinancing activities\nThe Firm\u2019s financing activities include acquiring customer deposits and issuing long-term debt and preferred stock.\n\u2022\nIn 2025, cash provided primarily reflected higher deposits, higher securities loaned or sold under repurchase agreements and net proceeds from long- and short-term borrowings,\n\u2022\nIn 2024, cash provided primarily reflected higher securities loaned or sold under repurchase agreements and net proceeds from long- and short-term borrowings, partially offset by net redemption of preferred stock.\n\u2022\nFor both periods, cash was used for repurchases of common stock and cash dividends on common and preferred stock.\n*     *     *\nRefer to Consolidated Balance Sheets Analysis on pages 55\u201357, Capital Risk Management on pages 89\u201399, and Liquidity Risk Management on pages 100\u2013107, and the Consolidated Statements of Cash Flows on page 169 for a further discussion of the activities affecting the Firm\u2019s cash flows.\n58\nJPMorgan Chase & Co./2025 Form 10-K\nEXPLANATION AND RECONCILIATION OF THE FIRM\u2019S USE OF NON-GAAP FINANCIAL MEASURES\nNon-GAAP financial measures\nThe Firm prepares its Consolidated Financial Statements in accordance with U.S. GAAP; these financial statements appear on pages 165\u2013169. That presentation, which is referred to as \u201creported\u201d basis, provides the reader with an understanding of the Firm\u2019s results that can be tracked consistently from year-to-year and enables a comparison of the Firm\u2019s performance with the U.S. GAAP financial statements of other companies.\nIn addition to analyzing the Firm\u2019s results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a \u201cmanaged\u201d basis; these Firmwide managed basis results are non-GAAP financial measures. The Firm also reviews the results of the lines of business on a managed basis. The Firm\u2019s definition of managed basis starts, in each case, with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm as a whole, and for each of the reportable business segments and Corporate, on an FTE basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. These financial measures\nallow management to assess the comparability of revenue from year-to-year arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by each of the lines of business and Corporate.\nManagement also uses certain non-GAAP financial measures at the Firm and business-segment levels because these other non-GAAP financial measures provide information to investors about the underlying operational performance and trends of the Firm or of the particular business segment, as the case may be, and therefore facilitate a comparison of the Firm or the business segment with the performance of its relevant competitors. Refer to Business Segment & Corporate Results on pages 62\u201382 for additional information on these non-GAAP measures. Non-GAAP financial measures used by the Firm may not be comparable to similarly named non-GAAP financial measures used by other companies.\nThe following summary table provides a reconciliation from the Firm\u2019s reported U.S. GAAP results to managed basis.\n2025\n2024\n2023\nYear ended\nDecember 31,\n(in millions, except ratios)\nReported\nFully taxable-equivalent adjustments\n(a)\nManaged\nbasis\nReported\nFully taxable-equivalent adjustments\n(a)\nManaged\nbasis\nReported\nFully taxable-equivalent adjustments\n(a)\nManaged\nbasis\nOther income\n$\n6,174\n\n$\n2,709\n\n$\n8,883\n\n$\n12,462\n(b)\n$\n2,560\n(b)\n$\n15,022\n$\n5,609\n$\n3,782\n$\n9,391\nTotal noninterest revenue\n87,004\n\n2,709\n\n89,713\n\n84,973\n2,560\n87,533\n68,837\n3,782\n72,619\nNet interest income\n95,443\n\n425\n\n95,868\n\n92,583\n477\n93,060\n89,267\n480\n89,747\nTotal net revenue\n182,447\n\n3,134\n\n185,581\n\n177,556\n3,037\n180,593\n158,104\n4,262\n162,366\nTotal noninterest expense\n95,640\n\nNA\n95,640\n\n91,797\nNA\n91,797\n87,172\nNA\n87,172\nPre-provision profit\n86,807\n\n3,134\n\n89,941\n\n85,759\n3,037\n88,796\n70,932\n4,262\n75,194\nProvision for credit losses\n14,212\n\nNA\n14,212\n\n10,678\nNA\n10,678\n9,320\nNA\n9,320\nIncome before income tax expense\n72,595\n\n3,134\n\n75,729\n\n75,081\n3,037\n78,118\n61,612\n4,262\n65,874\nIncome tax expense\n15,547\n\n3,134\n\n18,681\n\n16,610\n(b)\n3,037\n(b)\n19,647\n12,060\n4,262\n16,322\nNet income\n$\n57,048\n\nNA\n$\n57,048\n\n$\n58,471\nNA\n$\n58,471\n$\n49,552\nNA\n$\n49,552\nOverhead ratio\n52\n\n%\nNM\n52\n\n%\n52\n%\nNM\n51\n%\n55\n%\nNM\n54\n%\n(a)\nFor other income, recognized in CIB, and for net interest income, predominantly recognized in CIB and Corporate.\n(b)\nEffective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures guidance, under the modified retrospective method. Refer to Notes 1, 6, 14 and 25 for additional information.\nJPMorgan Chase & Co./2025 Form 10-K\n59\nNet interest income, net yield, and noninterest revenue excluding Markets\nIn addition to reviewing net interest income, net yield, and noninterest revenue on a managed basis, management also reviews these metrics excluding Markets, as shown below. Markets consists of CIB\u2019s Fixed Income Markets and Equity Markets. These metrics, which exclude Markets, are non-GAAP financial measures. Management reviews these metrics to assess the performance of the Firm\u2019s lending, investing (including asset-liability management) and deposit-raising activities, apart from any volatility associated with Markets activities. In addition, management also assesses Markets business performance on a total revenue basis as offsets may occur across revenue lines. Management believes that these measures provide investors and analysts with alternative measures to analyze the revenue trends of the Firm.\nYear ended December 31,\n(in millions, except rates)\n2025\n2024\n2023\nNet interest income \u2013 reported\n(a)\n$\n95,443\n\n$\n92,583\n$\n89,267\nFully taxable-equivalent adjustments\n425\n\n477\n480\nNet interest income \u2013 managed basis\n$\n95,868\n\n$\n93,060\n$\n89,747\nLess: Markets net interest income\n(b)\n3,277\n\n641\n(294)\nNet interest income excluding Markets\n$\n92,591\n\n$\n92,419\n$\n90,041\nAverage interest-earning assets\n(a)\n$\n3,834,359\n\n$\n3,537,567\n$\n3,325,708\nLess: Average Markets interest-earning assets\n(b)\n1,363,174\n\n1,128,153\n985,777\nAverage interest-earning assets excluding Markets\n$\n2,471,185\n\n$\n2,409,414\n$\n2,339,931\nNet yield on average interest-earning assets \u2013 managed basis\n2.50\n\n%\n2.63\n%\n2.70\n%\nNet yield on average Markets interest-earning assets\n(b)\n0.24\n\n0.06\n(0.03)\nNet yield on average interest-earning assets excluding Markets\n3.75\n\n%\n3.84\n%\n3.85\n%\nNoninterest revenue \u2013  reported\n$\n87,004\n\n$\n84,973\n(c)\n$\n68,837\nFully taxable-equivalent adjustments\n2,709\n\n2,560\n(c)\n3,782\nNoninterest revenue \u2013  managed basis\n$\n89,713\n\n$\n87,533\n$\n72,619\nLess: Markets noninterest revenue\n(b)\n32,505\n\n29,366\n28,258\nNoninterest revenue excluding Markets\n$\n57,208\n\n$\n58,167\n$\n44,361\nMemo: Total Markets net revenue\n(b)\n$\n35,782\n\n$\n30,007\n$\n27,964\n(a)\nIncludes the effect of derivatives that qualify for hedge accounting. Taxable-equivalent amounts are used where applicable. Refer to\u00a0Note 5 for additional information on hedge accounting.\n(b)\nRefer to pages 73-74 for further information on Markets.\n(c)\nEffective January 1, 2024, the Firm adopted updates to the Accounting for Investment in Tax Credit Stricture guidance, under the modified retrospective method. Refer to Notes 1, 6, 14 and 25 for additional information.\nCalculation of certain U.S. GAAP and non-GAAP financial measures\nCertain U.S. GAAP and non-GAAP financial measures are calculated as follows:\nBook value per share (\u201cBVPS\u201d)\nCommon stockholders\u2019 equity at period-end /\nCommon shares at period-end\nOverhead ratio\nTotal noninterest expense / Total net revenue\nROA\nReported net income / Total average assets\nROE\nNet income* / Average common stockholders\u2019 equity\nROTCE\nNet income* / Average tangible common equity\nTBVPS\nTangible common equity at period-end / Common shares at period-end\n* Represents net income applicable to common equity\nIn addition, the Firm reviews other non-GAAP measures such as:\n\u2022\nAdjusted expense, which represents noninterest expense excluding Firmwide legal expense, and\n\u2022\nPre-provision profit, which represents total net revenue less total noninterest expense.\nManagement believes that these measures help investors to understand the effect of these items on reported results and provide an alternative presentation of the Firm\u2019s performance.\n60\nJPMorgan Chase & Co./2025 Form 10-K\nTCE, ROTCE and TBVPS\nTCE, ROTCE and TBVPS are each non-GAAP financial measures. TCE represents the Firm\u2019s common stockholders\u2019 equity (i.e., total stockholders\u2019 equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. ROTCE measures the Firm\u2019s net income applicable to common equity as a percentage of average TCE. TBVPS represents the Firm\u2019s TCE at period-end divided by common shares at period-end. TCE, ROTCE and TBVPS are utilized by the Firm, as well as investors and analysts, in assessing the Firm\u2019s use of equity.\nThe following summary table provides a reconciliation from the Firm\u2019s common stockholders\u2019 equity to TCE.\nPeriod-end\nAverage\nDec 31,\n2025\nDec 31,\n2024\nYear ended December 31,\n(in millions, except per share and ratio data)\n2025\n2024\n2023\nCommon stockholders\u2019 equity\n$\n342,393\n\n$\n324,708\n$\n332,754\n\n$\n312,370\n$\n282,056\nLess: Goodwill\n52,731\n\n52,565\n52,677\n\n52,627\n52,258\nLess: Other intangible assets\n2,560\n\n2,874\n2,706\n\n3,042\n2,572\nAdd: Certain deferred tax liabilities\n(a)\n2,916\n\n2,943\n2,921\n\n2,970\n2,883\nTangible common equity\n$\n290,018\n\n$\n272,212\n$\n280,292\n\n$\n259,671\n$\n230,109\nReturn on tangible common equity\nNA\nNA\n20\n\n%\n22\n%\n21\n%\nTangible book value per share\n$\n107.56\n\n$\n97.30\nNA\nNA\nNA\n(a)\nRepresents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating TCE.\nJPMorgan Chase & Co./2025 Form 10-K\n61\nBUSINESS SEGMENT & CORPORATE RESULTS\nThe Firm is managed on an LOB basis. The Firm has three reportable business segments \u2013 Consumer & Community Banking, Commercial & Investment Bank, and Asset & Wealth Management \u2013 with the remaining activities in Corporate.\nThe business segments are determined based on the products and services provided, or the type of customers and clients served, and they reflect the manner in which financial information is evaluated by the Firm\u2019s Operating Committee, whose members act collectively as the Firm\u2019s chief operating decision maker. Segment results are presented on a managed basis. Refer to Explanation and Reconciliation of the Firm\u2019s Use of Non-GAAP Financial Measures, on pages 59\u201361 for a definition of managed basis.\nThe following table depicts the Firm\u2019s reportable business segments.\nDescription of business segment reporting methodology\nResults of the reportable business segments are intended to present each segment as if it were a stand-alone business. The management reporting process that derives business segment results includes the allocation of certain income and expense items. The Firm periodically assesses the assumptions, methodologies and reporting classifications used for segment reporting, and therefore further refinements may be implemented in future periods. The Firm also assesses the level of capital required for each LOB on at least an annual basis. The Firm\u2019s LOBs also provide various business metrics which are utilized by the Firm and its investors and analysts in assessing performance.\nRevenue sharing\nWhen business segments or businesses within each segment join efforts to sell products and services to the Firm\u2019s clients and customers, the participating businesses may agree to share revenue from those transactions. Revenue is generally recognized in the segment responsible for the related product or service, with allocations to the other segments or businesses involved in the transaction. The segment and business results reflect these revenue-sharing agreements.\nExpense allocation\nWhere business segments use services provided by Corporate support units, or another business segment, the costs of those services are allocated to the respective business segments. The expense is generally allocated\u00a0based on the actual cost and use of services provided. In contrast, certain costs and investments related to Corporate that are not currently utilized by any LOB are not allocated to the business segments and are retained in Corporate. Expense retained in Corporate generally includes costs that would not be incurred if the segments were stand-alone businesses, and other items not solely aligned with a particular reportable business segment.\n62\nJPMorgan Chase & Co./2025 Form 10-K\nFunds transfer pricing\nFunds transfer pricing (\u201cFTP\u201d) is the process by which the Firm allocates interest income and expense to the LOBs and Other Corporate and transfers the primary interest rate risk and liquidity risk to Treasury and CIO.\nThe funds transfer pricing process considers the interest rate and liquidity risk characteristics of assets and liabilities and off-balance sheet products. Periodically, the methodology and assumptions utilized in the FTP process are adjusted to reflect economic conditions and other factors, which may impact the allocation of net interest income to the segments. Effective in the fourth quarter of 2024, the Firm updated its FTP with respect to consumer deposits, which resulted in an increase in the funding benefit reflected within CCB\u2019s net interest income that is fully offset in Corporate, with no effect on the Firm\u2019s net interest income.\nAs a result of lower average interest rates in the current year, the cost of funding for assets and the funding benefit earned for liabilities generally decreased compared with the prior year. During the period ended December 31, 2025, this resulted in a lower cost of funds for loans and Markets activities. In addition, the FTP benefit for deposits generally decreased more than the decrease in rates paid to deposit holders during the year, resulting in an overall deposit margin compression.\nForeign exchange risk\nForeign exchange risk is transferred from the LOBs and Other Corporate to Treasury and CIO for certain revenues and expenses. Treasury and CIO manages these risks centrally and reports the impact of foreign exchange rate movements related to the transferred risk in its results. Refer to Market Risk Management on page 142 for additional information.\nDebt expense and preferred stock dividend allocation\nAs part of the FTP process, almost all of the cost of the credit spread component of outstanding unsecured long-term debt and preferred stock dividends is allocated to the reportable business segments, while the balance of the cost is retained in Corporate. The methodology to allocate the cost of unsecured long-term debt and preferred stock dividends to the business segments is aligned with the relevant regulatory capital requirements and funding needs of the LOBs, as applicable. The allocated cost of unsecured long-term debt is included in a business segment\u2019s net interest income, and net income is reduced by preferred stock dividends, to arrive at a business segment\u2019s net income applicable to common equity. Refer to Capital Risk Management on pages 89\u201399 for additional information.\nCapital allocation\nThe amount of capital assigned to each LOB and Corporate is referred to as equity. The Firm\u2019s current equity allocation methodology incorporates Basel III Standardized risk-weighted assets (\u201cRWA\u201d) and the global systemically important banks (\u201cGSIB\u201d) surcharge, both under rules currently in effect, as well as a simulation of capital depletion in a severe stress environment. At least annually, the assumptions, judgments and methodologies used to allocate capital are reassessed and, as a result, the capital allocated to the LOBs and Corporate may change. Refer to Line of business and Corporate equity on page 96 for additional information on capital allocation.\n\nJPMorgan Chase & Co./2025 Form 10-K\n63\nSegment & Corporate Results \u2013 Managed Basis\nThe following tables summarize the Firm\u2019s results by business segments and Corporate for the periods indicated.\nYear ended December 31,\nConsumer & Community Banking\nCommercial & Investment Bank\nAsset & Wealth Management\n(in millions, except ratios)\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\nTotal net revenue\n$\n76,029\n$\n71,507\n$\n70,148\n$\n78,454\n\n$\n70,114\n$\n64,353\n$\n24,073\n\n$\n21,578\n$\n19,827\nTotal noninterest expense\n40,267\n38,036\n34,819\n38,216\n\n35,353\n33,972\n15,332\n\n14,414\n12,780\nPre-provision profit\n35,762\n33,471\n35,329\n40,238\n\n34,761\n30,381\n8,741\n\n7,164\n7,047\nProvision for credit losses\n11,493\n(a)\n9,974\n6,899\n2,615\n\n762\n2,091\n97\n\n(68)\n159\nNet income\n18,245\n17,603\n21,232\n27,761\n\n24,846\n20,272\n6,522\n\n5,421\n5,227\nReturn on equity (\u201cROE\u201d)\n32\n\n%\n32\n%\n38\n%\n18\n\n%\n18\n%\n14\n%\n40\n\n%\n34\n%\n31\n%\nYear ended December 31,\nCorporate\nTotal\n(in millions, except ratios)\n2025\n2024\n2023\n2025\n2024\n2023\nTotal net revenue\n$\n7,025\n$\n17,394\n(b)\n$\n8,038\n$\n185,581\n$\n180,593\n(b)\n$\n162,366\nTotal noninterest expense\n1,825\n3,994\n(c)\n5,601\n95,640\n91,797\n(c)\n87,172\nPre-provision profit\n5,200\n13,400\n2,437\n89,941\n88,796\n75,194\nProvision for credit losses\n7\n10\n171\n14,212\n10,678\n9,320\nNet income\n4,520\n10,601\n2,821\n57,048\n58,471\n49,552\nReturn on equity (\u201cROE\u201d)\n\u00a0NM\n\u00a0NM\nNM\n17\n\n%\n18\n%\n17\n%\n(a)\nIncludes a provision for lending-related commitments of $2.2 billion related to the Apple Card transaction.\n(b)\nIncluded the net gain related to Visa shares of $7.9 billion recorded in the second quarter of 2024. Refer to Note 6 for additional information.\n(c)\nIncluded a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024. Refer to Note 6 for additional information.\nRefer to Note 32 for further details on total net revenue and total noninterest expense.\nThe following sections provide a comparative discussion of the Firm\u2019s results by business segments and Corporate as of or for the years ended December\u00a031, 2025 and 2024, unless otherwise specified.\n64\nJPMorgan Chase & Co./2025 Form 10-K\nCONSUMER & COMMUNITY BANKING\nConsumer & Community Banking offers products and services to consumers and small businesses through bank branches, ATMs, digital (including mobile and online) and telephone banking. CCB is organized into Banking & Wealth Management (including Consumer Banking, Business Banking and J.P. Morgan Wealth Management), Home Lending (including Home Lending Production, Home Lending Servicing and Real Estate Portfolios) and Card Services & Auto. Banking & Wealth Management offers deposit, investment and lending products, cash management, payments and services. Home Lending includes mortgage origination and servicing activities, as well as portfolios consisting of residential mortgages and home equity loans. Card Services issues credit cards and offers payment solutions, travel services, merchant offers and lifestyle benefits. Auto originates and services auto loans and leases.\nSelected income statement data\nYear ended December 31, (in millions, except ratios)\n2025\n2024\n2023\nRevenue\nLending- and deposit-related fees\n$\n3,669\n\n$\n3,387\n$\n3,356\nAsset management fees\n4,669\n\n4,014\n3,282\nMortgage fees and related income\n1,326\n\n1,378\n1,175\nCard income\n2,230\n\n3,139\n2,532\nAll other income\n(a)\n5,901\n\n4,731\n4,773\nNoninterest revenue\n17,795\n\n16,649\n15,118\nNet interest income\n58,234\n\n54,858\n55,030\nTotal net revenue\n76,029\n\n71,507\n70,148\nProvision for credit losses\n11,493\n\n(d)\n9,974\n6,899\nNoninterest expense\nCompensation expense\n17,669\n\n17,045\n15,171\nNoncompensation expense\n(b)\n22,598\n\n20,991\n19,648\nTotal noninterest expense\n40,267\n\n38,036\n34,819\nIncome before income tax expense\n24,269\n\n23,497\n28,430\nIncome tax expense\n6,024\n\n5,894\n7,198\nNet income\n$\n18,245\n\n$\n17,603\n$\n21,232\nRevenue by business\nBanking & Wealth Management\n$\n42,862\n\n$\n40,943\n$\n43,199\nHome Lending\n4,966\n\n5,097\n4,140\nCard Services & Auto\n28,201\n\n25,467\n22,809\nMortgage fees and related income details:\nProduction revenue\n622\n\n627\n421\nNet mortgage servicing\n\u00a0\u00a0revenue\n(c)\n704\n\n751\n754\nMortgage fees and related income\n$\n1,326\n\n$\n1,378\n$\n1,175\nFinancial ratios\nReturn on equity\n32\n\n%\n32\n%\n38\n%\nOverhead ratio\n53\n\n53\n50\n(a)\nPrimarily includes operating lease income and commissions and other fees. Operating lease income was $3.8 billion, $2.8 billion and $2.8 billion for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n(b)\nIncluded depreciation expense on leased assets of $2.4 billion, $1.7 billion and $1.7 billion for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n(c)\nIncluded MSR risk management results of $118 million, $159 million and $131 million for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n(d)\nIncludes a provision for lending-related commitments of $2.2 billion related to the Apple Card transaction.\n\nJPMorgan Chase & Co./2025 Form 10-K\n65\n2025 compared with 2024\nNet income was $18.2 billion, up 4%.\nNet revenue was $76.0 billion, up 6%.\nNet interest income was $58.2 billion, up 6%, reflecting:\n\u2022\nhigher NII in Card Services, predominantly driven by higher revolving balances, and\n\u2022\nhigher NII in Banking & Wealth Management (\u201cBWM\u201d), driven by higher deposit margin, reflecting the impact of changes in FTP, partially offset by lower average deposit balances.\nRefer to Business Segment & Corporate Results on page 63 for additional information on FTP.\nNoninterest revenue was $17.8 billion, up 7%, driven by:\n\u2022\nhigher auto operating lease income as a result of growth in volume, and\n\u2022\nin BWM, higher asset management fees, reflecting higher average market levels and net inflows, as well as higher deposit-related fees as a result of higher transaction volume and new accounts,\npartially offset by\n\u2022\nlower card income, reflecting lower net interchange, as well as an increase in amortization related to new account origination costs, partially offset by higher annual fees. Net interchange decreased as the impact of increased debit and credit card sales volume was more than offset by higher rewards costs and partner payments.\nRefer to Note 6 for additional information on card income, asset management fees, and deposit-related fees; and Critical Accounting Estimates on pages 154\u2013157 for additional information on the credit card rewards liability.\nNoninterest expense was $40.3 billion, up 6%, reflecting:\n\u2022\nhigher noncompensation expense, predominantly driven by higher auto lease depreciation on higher auto operating lease assets, and continued investments in marketing and technology, as well as\n\u2022\nhigher compensation expense, predominantly for bankers and advisors, and employees in technology.\nThe provision for credit losses was $11.5 billion. Net charge-offs were $8.2 billion, up $319 million, primarily driven by Card Services, reflecting loan growth. The net addition to the allowance for credit losses of $3.2 billion which was driven by $2.2 billion related to the Apple Card transaction, loan growth in Card Services and the impact of changes in the Firm's weighted-average macroeconomic outlook, partially offset by reduced borrower uncertainty.\nIn the prior year, the provision was $10.0 billion, net charge-offs were $7.9 billion and the net addition to the allowance for credit losses was $2.0 billion.\nRefer to Credit and Investment Risk Management on pages 109\u2013132 and Allowance for Credit Losses on pages 129\u2013131 for a further discussion of the credit portfolios and the allowance for credit losses.\n66\nJPMorgan Chase & Co./2025 Form 10-K\nSelected metrics\nAs of or for the year ended\nDecember 31,\n(in millions, except employees)\n2025\n2024\n2023\nSelected balance sheet data (period-end)\nTotal assets\n$\n664,669\n\n$\n650,268\n$\n642,951\nLoans:\nBanking & Wealth Management\n33,005\n\n33,221\n31,142\nHome Lending\n(a)\n240,724\n\n246,498\n259,181\nCard Services\n247,753\n\n233,016\n211,175\nAuto\n70,585\n\n73,619\n77,705\nTotal loans\n592,067\n\n586,354\n579,203\nDeposits\n(b)\n1,072,792\n\n1,056,652\n1,094,738\nEquity\n56,000\n\n54,500\n55,500\nSelected balance sheet data (average)\nTotal assets\n$\n646,820\n\n$\n631,648\n$\n584,367\nLoans:\nBanking & Wealth Management\n33,241\n\n31,544\n30,142\nHome Lending\n(b)\n242,595\n\n252,542\n232,115\nCard Services\n231,720\n\n214,139\n191,424\nAuto\n71,359\n\n75,009\n72,674\nTotal loans\n578,915\n\n573,234\n526,355\nDeposits\n1,057,232\n\n1,064,215\n1,126,552\nEquity\n56,000\n\n54,500\n54,349\nEmployees\n144,196\n\n(c)\n144,989\n141,640\n(a)\nAt December\u00a031, 2025, 2024 and 2023, Home Lending loans held-for-sale and loans at fair value were $11.0 billion, $8.1 billion and $3.4 billion, respectively.\n(b)\nAverage Home Lending loans held-for-sale and loans at fair value were $9.5 billion, $7.1 billion and $4.8 billion for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n(c)\nIn the first quarter of 2025, 419 employees were transferred to Corporate as a result of the centralization of certain functions.\nSelected metrics\nAs of or for the year ended\nDecember 31,\n(in millions, except ratio data)\n2025\n2024\n2023\nCredit data and quality statistics\nNonaccrual loans\n(a)\n$\n3,484\n\n$\n3,366\n$\n3,740\nNet charge-offs/(recoveries)\nBanking & Wealth Management\n356\n\n442\n340\nHome Lending\n(122)\n(106)\n(56)\nCard Services\n7,678\n\n7,148\n4,699\nAuto\n335\n\n444\n357\nTotal net charge-offs/(recoveries)\n$\n8,247\n\n$\n7,928\n$\n5,340\nNet charge-off/(recovery) rate\nBanking & Wealth Management\n1.07\n\n%\n1.40\n%\n1.13\n%\nHome Lending\n(0.05)\n(0.04)\n(0.02)\nCard Services\n3.31\n\n3.34\n2.45\nAuto\n0.47\n\n0.59\n0.49\nTotal net charge-off/(recovery) rate\n1.45\n\n%\n1.40\n%\n1.02\n%\n30+ day delinquency rate\nHome Lending\n(b)\n0.86\n\n%\n0.78\n%\n0.66\n%\nCard Services\n2.16\n\n2.17\n2.14\nAuto\n1.33\n\n1.43\n1.19\n90+ day delinquency rate -\n Card Services\n1.10\n\n%\n1.14\n%\n1.05\n%\nAllowance for credit losses:\nAllowance for loan losses\nBanking & Wealth Management\n$\n765\n\n$\n764\n$\n685\nHome Lending\n647\n\n447\n578\nCard Services\n15,558\n\n14,608\n12,453\nAuto\n587\n\n692\n742\nTotal allowance for loan losses\n$\n17,557\n\n$\n16,511\n$\n14,458\nAllowance for lending-related commitments\n$\n2,290\n\n(c)\n$\n91\n$\n97\nTotal allowance for credit losses\n$\n19,847\n\n$\n16,602\n$\n14,555\n(a)\nExcludes mortgage loans past due and insured by U.S. government agencies, which are primarily 90 or more days past due. These loans have been excluded based upon the government guarantee. At December\u00a031, 2025, 2024 and 2023, mortgage loans 90 or more days past due and insured by U.S. government agencies were $70 million, $84 million and $123 million, respectively. In addition, the Firm\u2019s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.\n(b)\nAt December\u00a031, 2025, 2024 and 2023, excluded mortgage loans insured by U.S. government agencies of $102 million, $122 million and $176 million, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.\n(c)\nIncludes $2.2 billion related to the Apple Card transaction.\nJPMorgan Chase & Co./2025 Form 10-K\n67\nSelected metrics\nAs of or for the year ended December 31,\n(in billions, except ratios and where otherwise noted)\n2025\n2024\n2023\nBusiness Metrics\nCCB Consumer customers  (in millions)\n86.6\n\n84.4\n82.1\nCCB Small business customers (in millions)\n7.4\n\n7.0\n6.4\nNumber of branches\n5,083\n\n4,966\n4,897\nActive digital customers\n\u00a0\u00a0(in thousands)\n(a)\n74,646\n\n70,813\n66,983\nActive mobile customers\n(in thousands)\n(b)\n61,736\n\n57,821\n53,828\nDebit and credit card\n\u00a0\u00a0\u00a0sales volume\n$\n1,940.7\n\n$\n1,805.4\n$\n1,678.6\nTotal payments transaction volume (in trillions)\n(c)\n7.0\n\n6.4\n5.9\nBanking & Wealth Management\nAverage deposits\n$\n1,040.8\n\n$\n1,049.3\n$\n1,111.7\nDeposit margin\n2.74\n\n%\n2.66\n%\n2.84\n%\nBusiness Banking\n\u00a0\u00a0\u00a0average loans\n$\n19.1\n\n$\n19.5\n$\n19.6\nBusiness Banking\n\u00a0\u00a0\u00a0origination volume\n3.2\n\n4.5\n4.8\nClient investment\n\u00a0\u00a0\u00a0assets\n(d)\n1,269.9\n\n1,087.6\n951.1\nNumber of client advisors\n6,049\n\n5,755\n5,456\nHome Lending\nMortgage origination volume by channel\nRetail\n$\n33.0\n\n$\n25.5\n$\n22.4\nCorrespondent\n19.8\n\n15.3\n12.7\nTotal mortgage origination volume\n(e)\n$\n52.8\n\n$\n40.8\n$\n35.1\nThird-party mortgage loans serviced (period-end)\n$\n661.9\n\n$\n648.0\n$\n631.2\nMSR carrying value\n\u00a0\u00a0\u00a0(period-end)\n9.1\n\n9.1\n8.5\nCard Services\nSales volume, excluding commercial card\n$\n1,354.7\n\n$\n1,259.3\n$\n1,163.6\nNet revenue rate\n10.08\n\n%\n10.03\n%\n9.72\n%\nNet yield on average\n\u00a0\u00a0\u00a0loans\n10.26\n\n9.73\n9.61\nNew credit card accounts\n\u00a0\u00a0\u00a0opened (in millions)\n10.4\n\n10.0\n10.0\nCards in force\n\u00a0\u00a0\u00a0(in millions)\n(f)\n116.5\n\n111.7\n106.8\nAuto\nLoan and lease\n\u00a0\u00a0\u00a0origination volume\n$\n44.8\n\n$\n40.3\n$\n41.3\nAverage auto\n\u00a0\u00a0\u00a0operating lease assets\n16.2\n\n11.1\n10.9\n(a)\nUsers of all web and/or mobile platforms who have logged in within the past 90 days.\n(b)\nUsers of all mobile platforms who have logged in within the past 90 days.\n(c)\nTotal payments transaction volume includes debit and credit card sales volume and gross outflows of ACH, ATM, teller, wires, BillPay, PayChase, Zelle, person-to-person and checks.\n(d)\nIncludes assets invested in managed accounts and J.P. Morgan mutual funds where AWM is the investment manager. Refer to AWM segment results on pages 76\u201379 for additional information.\n(e)\nFirmwide mortgage origination volume was $63.4 billion, $47.4 billion and $41.4 billion for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n(f)\nRepresents the total number of open credit cards, inclusive of primary cardholders and authorized users.\n68\nJPMorgan Chase & Co./2025 Form 10-K\nCOMMERCIAL & INVESTMENT BANK\nThe Commercial & Investment Bank is comprised of the Banking & Payments and Markets & Securities Services businesses. These businesses offer investment banking, lending, payments, market-making, financing, custody and securities products and services to a global base of corporate and institutional clients. Banking & Payments offers products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity and debt markets, and loan origination and syndication. Banking & Payments also provides services that enable clients to manage payments globally across liquidity and account solutions, commerce solutions, clearing, trade, and working capital. Markets & Securities Services includes Markets, which is a global market-maker across products, including cash and derivative instruments, and also offers sophisticated risk management solutions, lending, prime brokerage, clearing and research. Markets & Securities Services also includes Securities Services, a leading global custodian that provides custody, fund services, liquidity and trading services, and data solutions products.\nSelected income statement data\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nRevenue\nInvestment banking fees\n$\n9,735\n\n$\n9,116\n$\n6,631\nPrincipal transactions\n27,226\n\n24,382\n23,794\nLending- and deposit-related fees\n5,177\n\n3,914\n3,423\nCommissions and other fees\n5,985\n\n5,278\n4,879\nCard income\n2,436\n\n2,310\n2,213\nAll other income\n3,207\n\n3,253\n2,869\nNoninterest revenue\n53,766\n\n48,253\n43,809\nNet interest income\n24,688\n\n21,861\n20,544\nTotal net revenue\n(a)\n78,454\n\n70,114\n64,353\nProvision for credit losses\n2,615\n\n762\n2,091\nNoninterest expense\nCompensation expense\n19,345\n\n18,191\n17,105\nNoncompensation expense\n18,871\n\n17,162\n16,867\nTotal noninterest expense\n38,216\n\n35,353\n33,972\nIncome before income tax expense\n37,623\n\n33,999\n28,290\nIncome tax expense\n9,862\n\n9,153\n8,018\nNet income\n$\n27,761\n\n$\n24,846\n$\n20,272\n(a)\nIncluded taxable-equivalent adjustments primarily from income tax credits from investments in alternative energy, affordable housing and new markets, income from tax-exempt securities and loans, and the related amortization and other tax benefits of the investments in alternative energy and affordable housing of $2.9 billion, $2.8 billion and $4.0 billion for the years ended December 31, 2025, 2024 and 2023, respectively. Effective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method guidance, under the modified retrospective method. Refer to Notes 1, 6, 14 and 25 for additional information.\nSelected income statement data\nYear ended December 31,\n(in millions, except ratios)\n2025\n2024\n2023\nFinancial ratios\nReturn on equity\n18\n\n%\n18\n%\n14\n%\nOverhead ratio\n49\n\n50\n53\nCompensation expense as\npercentage of total net\nrevenue\n25\n\n26\n27\nRevenue by business\nInvestment Banking\n$\n10,198\n$\n9,636\n$\n7,076\nPayments\n19,331\n18,085\n17,818\nLending\n7,601\n7,470\n6,896\nOther\n6\n76\n107\nTotal Banking & Payments\n37,136\n35,267\n31,897\nFixed Income Markets\n22,532\n20,066\n19,180\nEquity Markets\n13,250\n9,941\n8,784\nSecurities Services\n5,599\n5,084\n4,772\nCredit Adjustments & Other\n(a)\n(63)\n(244)\n(280)\nTotal Markets & Securities\nServices\n41,318\n34,847\n32,456\nTotal net revenue\n$\n78,454\n\n$\n70,114\n$\n64,353\n(a)\nConsists primarily of centrally-managed credit valuation adjustments (\u201cCVA\u201d), funding valuation adjustments (\u201cFVA\u201d) on derivatives, other valuation adjustments, and certain components of fair value option elected liabilities, which are primarily reported in principal transactions revenue. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets. Refer to Notes 2, 3 and 24 for additional information.\nJPMorgan Chase & Co./2025 Form 10-K\n69\nBanking & Payments Revenue by Client Coverage Segment:\n(a)\nGlobal Corporate Banking & Global Investment Banking\nprovides banking products and services generally to large corporations, financial institutions and merchants.\nCommercial Banking\n provides banking products and services to clients, including start-ups, small and mid-sized companies, local governments, municipalities, and nonprofits, as well as commercial real estate clients.\n(a)\nGlobal Banking is a client coverage view within the Banking & Payments business and is comprised of the Global Corporate Banking, Global Investment Banking and Commercial Banking client coverage segments.\nSelected income statement data\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nBanking & Payments revenue by client coverage segment\nGlobal Corporate Banking & Global Investment Banking\n(a)\n$\n25,285\n\n$\n23,780\n$\n20,847\nCommercial Banking\n11,851\n\n11,487\n11,050\nCommercial & Specialized Industries\n(b)\n8,306\n\n7,759\n7,740\nCommercial Real Estate Banking\n3,545\n\n3,728\n3,310\nTotal Banking & Payments revenue\n$\n37,136\n\n$\n35,267\n$\n31,897\n(a)\nIn the second quarter of 2025, amounts were reclassified from Other to Global Corporate Banking & Global Investment Banking reflecting the subsequent alignment of certain business activities after the Firm\u2019s business segment reorganization in the second quarter of 2024. Prior-period amounts have been revised to conform with the current presentation.\n(b)\nIn the second quarter of 2025, the Middle Market Banking client coverage segment was renamed Commercial & Specialized Industries.\n70\nJPMorgan Chase & Co./2025 Form 10-K\n2025 compared with 2024\nNet income was $27.8 billion, up 12%.\nNet revenue was $78.5 billion, up 12%.\nBanking & Payments\n revenue was $37.1 billion, up 5%.\n\u2022\nInvestment Banking revenue was $10.2 billion, up 6%.\n Investment Banking fees were up 7%, driven by higher fees across products. The Firm ranked #1 for Global Investment Banking fees, according to\nDealogic.\n\u2013\nDebt underwriting fees were $4.5 billion, up 9%, predominantly driven by non-investment grade loans and investment grade bonds.\n\u2013\nAdvisory fees were $3.5 billion, up 6%, driven by higher fees from deals in the Financial Institutions and Technology sectors, partially offset by lower fees from deals in the Media & Telecommunications sector.\n\u2013\nEquity underwriting fees were $1.7 billion, up 2%, primarily driven by higher revenue from IPOs.\n\u2022\nPayments revenue was $19.3 billion, up 7%. Excluding the net impact of equity investments, revenue was up 5%, driven by higher average deposits and fee growth, largely offset by deposit margin compression.\n\u2022\nLending revenue was $7.6 billion, up 2%, driven by higher lending-related fees and lower fair value losses on credit protection purchased against certain retained loans and lending-related commitments.\nMarkets & Securities Services revenue was $41.3 billion, up 19%. Markets revenue was $35.8 billion, up 19%.\n\u2022\nEquity Markets revenue was $13.3 billion, up 33%, driven by higher revenue across products, particularly in Equity Derivatives.\n\u2022\nFixed Income Markets revenue was $22.5 billion, up 12%, predominantly driven by higher revenue in Rates, Currencies & Emerging Markets, Commodities and Securitized Products, partially offset by lower revenue in Credit.\n\u2022\nSecurities Services revenue was $5.6 billion, up 10%, driven by higher average deposits as well as fee growth related to higher client activity and market levels, partially offset by deposit margin compression.\n\u2022\nCredit Adjustments & Other was a loss of $63 million, compared with a loss of $244 million in the prior year.\nNoninterest expense was $38.2 billion, up 8%, predominantly driven by higher compensation, including higher revenue-related compensation, as well as higher brokerage, technology and regulatory expense.\nThe provision for credit losses was $2.6 billion, driven by net increases in the loan and lending-related commitment portfolios, net changes in credit quality of client-specific exposures, an update to loss assumptions on certain leveraged loans, and estimated losses related to borrower fraud in certain secured lending facilities, partially offset by the impact of changes in the Firm's weighted-average macroeconomic outlook. Net charge-offs were $1.5 billion and the net addition to the allowance for credit losses was $1.1 billion.\nIn the prior year, the provision was $762 million, net charge-offs were $617 million and the net addition to the allowance for credit losses was $145 million.\nJPMorgan Chase & Co./2025 Form 10-K\n71\nSelected metrics\nAs of or for the year ended\nDecember 31, (in millions, except employees)\n2025\n2024\n2023\nSelected balance sheet data (period-end)\nTotal assets\n$\n2,142,534\n\n$\n1,773,194\n$\n1,638,493\nLoans:\nLoans retained\n558,528\n\n483,043\n475,186\nLoans held-for-sale and loans at fair value\n(a)\n73,508\n\n40,324\n39,464\nTotal loans\n632,036\n\n523,367\n514,650\nEquity\n149,500\n\n132,000\n138,000\nBanking & Payments loans by client coverage segment (period-end)\n(b)\nGlobal Corporate Banking & Global Investment Banking\n(c)\n$\n146,079\n\n(e)\n$\n125,270\n$\n128,623\nCommercial Banking\n222,139\n\n217,674\n221,550\nCommercial & Specialized Industries\n(d)\n75,865\n\n72,814\n78,043\nCommercial Real Estate Banking\n146,274\n\n144,860\n143,507\nTotal Banking & Payments loans\n368,218\n\n342,944\n350,173\nSelected balance sheet data (average)\nTotal assets\n$\n2,195,248\n\n$\n1,912,466\n$\n1,716,755\nTrading assets-debt and equity instruments\n764,098\n\n624,032\n508,792\nTrading assets-derivative receivables\n58,384\n\n57,028\n63,862\nLoans:\nLoans retained\n$\n517,260\n\n$\n475,426\n$\n457,886\nLoans held-for-sale and loans at fair value\n(a)\n54,725\n\n43,621\n40,891\nTotal loans\n$\n571,985\n\n$\n519,047\n$\n498,777\nDeposits\n1,174,581\n\n1,061,488\n996,295\nEquity\n149,500\n\n132,000\n137,507\nBanking & Payments loans by client coverage segment (average)\n(b)\nGlobal Corporate Banking & Global Investment Banking\n(c)\n$\n129,437\n\n(e)\n$\n128,496\n$\n131,561\nCommercial Banking\n220,562\n\n220,285\n209,244\nCommercial & Specialized Industries\n(d)\n74,733\n\n75,605\n77,130\nCommercial Real Estate Banking\n145,829\n\n144,680\n132,114\nTotal Banking & Payments loans\n$\n349,999\n\n$\n348,781\n$\n340,805\nEmployees\n94,563\n\n(f)\n93,231\n92,271\n(a)\nLoans held-for-sale and loans at fair value primarily reflect lending-related positions originated and purchased in Markets, including loans held for securitization.\n(b)\nRefer to page 70 for a description of each of the client coverage segments.\n(c)\nIn the second quarter of 2025, amounts were reclassified from Other to Global Corporate Banking & Global Investment Banking reflecting the subsequent alignment of certain business activities after the Firm\u2019s business segment reorganization in the second quarter of 2024. Prior-period amounts have been revised to conform with the current presentation.\n(d)\nIn the second quarter of 2025, the Middle Market Banking client coverage segment was renamed Commercial & Specialized Industries.\n(e)\nOn January 1, 2025, $5.6 billion of loans were realigned from Global Corporate Banking to Fixed Income Markets.\n(f)\nIn the first quarter of 2025, 219 employees were transferred to Corporate as a result of the centralization of certain functions.\nSelected metrics\nAs of or for the year ended\nDecember 31, (in millions, except ratios)\n2025\n2024\n2023\nCredit data and quality statistics\nNet charge-offs/(recoveries)\n$\n1,509\n\n$\n689\n(d)\n$\n588\nNonperforming assets:\nNonaccrual loans:\nNonaccrual loans retained\n(a)\n$\n3,641\n\n$\n3,258\n$\n1,675\nNonaccrual loans\n\nheld-for-sale and loans at fair value\n(b)\n1,518\n\n1,502\n828\nTotal nonaccrual loans\n5,159\n\n4,760\n2,503\nDerivative receivables\n204\n\n145\n364\nAssets acquired in loan satisfactions\n192\n\n213\n169\nTotal nonperforming assets\n$\n5,555\n\n$\n5,118\n$\n3,036\nAllowance for credit losses:\nAllowance for loan losses\n$\n7,632\n\n$\n7,294\n$\n7,326\nAllowance for lending-related commitments\n2,738\n\n1,976\n1,849\nTotal allowance for credit losses\n$\n10,370\n\n$\n9,270\n$\n9,175\nNet charge-off/(recovery) rate\n(c)\n0.29\n\n%\n0.14\n%\n0.13\n%\nAllowance for loan losses to period-end loans\nretained\n1.37\n\n1.51\n1.54\nAllowance for loan losses to nonaccrual loans\nretained\n(a)\n210\n\n224\n437\nNonaccrual loans to total period-end loans\n0.82\n\n0.91\n0.49\n(a)\nAllowance for loan losses of $597 million, $435 million and $251 million were held against these nonaccrual loans at December 31, 2025, 2024 and 2023, respectively.\n(b)\nExcludes mortgage loans past due and insured by U.S. government agencies, which are primarily 90 or more days past due. These loans have been excluded based upon the government guarantee. At December 31, 2025, 2024 and 2023, mortgage loans 90 or more days past due and insured by U.S. government agencies were $128 million, $37 million and $59 million, respectively.\n(c)\nLoans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.\n(d)\nIncludes $72 million related to a purchased credit deteriorated (\u201cPCD\u201d) loan that was charged off in the fourth quarter of 2024.\n72\nJPMorgan Chase & Co./2025 Form 10-K\nInvestment banking fees\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nAdvisory\n$\n3,497\n\n$\n3,290\n$\n2,814\nEquity underwriting\n1,732\n\n1,692\n1,151\nDebt underwriting\n(a)\n4,506\n\n4,134\n2,666\nTotal investment banking fees\n$\n9,735\n\n$\n9,116\n$\n6,631\n(a)\nRepresents long-term debt and loan syndications.\nLeague table results \u2013 wallet share\n2025\n2024\n2023\nYear ended December 31,\nRank\nShare\nRank\nShare\nRank\nShare\nBased on fees\n(a)\nM&A\n(b)\nGlobal\n#\n2\n\n8.3\n\n%\n#\n1\n9.2\n%\n#\n2\n8.9\n%\nU.S.\n2\n\n8.9\n\n2\n11.1\n2\n10.8\nEquity and equity-related\n(c)\nGlobal\n1\n\n9.3\n\n1\n10.9\n1\n7.7\nU.S.\n1\n\n12.6\n\n1\n14.6\n1\n14.4\nLong-term debt\n(d)\nGlobal\n1\n\n7.1\n\n1\n7.5\n1\n7.0\nU.S.\n1\n\n10.2\n\n1\n11.4\n1\n10.8\nLoan syndications\nGlobal\n2\n\n10.1\n\n1\n10.2\n1\n12.0\nU.S.\n2\n\n11.3\n\n1\n11.7\n1\n15.1\nGlobal investment banking fees\n(e)\n#\n1\n\n8.4\n\n%\n#\n1\n9.1\n%\n#\n1\n8.6\n%\n(a)\nSource: Dealogic as of January 2, 2026. Reflects the ranking of revenue wallet and market share.\n(b)\nGlobal M&A excludes any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S.\n(c)\nGlobal equity and equity-related ranking includes rights offerings and Chinese A-Shares.\n(d)\nLong-term debt rankings include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities (\"ABS\") and mortgage-backed securities (\"MBS\"); and exclude money market, short-term debt and U.S. municipal securities.\n(e)\nGlobal investment banking fees exclude money market, short-term debt and shelf securities.\nMarkets revenue\nThe following table summarizes selected income statement data for the Markets businesses. Markets includes both Fixed Income Markets and Equity Markets. Markets revenue consists of principal transactions, fees, commissions and other income, as well as net interest income. The Firm assesses its Markets business performance on a total revenue basis, as offsets generally occur across revenue line items. For example, securities that generate net interest income may be risk-managed by derivatives that are reflected at fair value in principal transactions revenue. Refer to Notes 6 and 7 for a description of the composition of these income statement line items.\nPrincipal transactions reflects revenue on financial instruments and commodities transactions that arise from client-driven market-making activity.\u00a0Principal transactions revenue includes amounts recognized upon executing new transactions with market participants, as well as \u201cinventory-related revenue,\u201d which is\u00a0revenue recognized from gains and losses on derivatives and other instruments that the Firm has been holding in anticipation of, or in response to, client demand,\u00a0and changes in the fair value of instruments\nused by the Firm to actively manage the risk exposure arising from such inventory. Principal transactions revenue recognized upon executing new transactions with market participants is affected by many factors including the level of client activity, the bid-offer spread (which is the difference between the price at which a market participant is willing and able to sell an instrument to the Firm\u00a0and the price at which another market participant is willing and able to buy it from the Firm, and vice versa), market liquidity and volatility.\u00a0These factors are interrelated and\u00a0sensitive to the same factors that drive inventory-related revenue, which include general market conditions, such as interest rates, foreign exchange rates, credit spreads, and equity and commodity prices,\u00a0as well as other macroeconomic conditions.\nJPMorgan Chase & Co./2025 Form 10-K\n73\nFor the periods presented below, the primary source of principal transactions revenue was the amount recognized upon executing new transactions.\n2025\n2024\n2023\nYear ended December 31,\n(in millions, except where otherwise noted)\nFixed Income Markets\nEquity Markets\nTotal Markets\nFixed Income Markets\nEquity Markets\nTotal Markets\nFixed Income Markets\nEquity Markets\nTotal Markets\nPrincipal transactions\n$\n12,327\n\n$\n14,771\n\n$\n27,098\n\n$\n10,603\n$\n13,526\n$\n24,129\n$\n13,198\n$\n10,380\n$\n23,578\nLending- and deposit-related fees\n451\n\n182\n\n633\n\n391\n100\n491\n307\n40\n347\nCommissions and other fees\n626\n\n2,488\n\n3,114\n\n605\n2,086\n2,691\n596\n1,908\n2,504\nAll other income\n1,775\n\n(115)\n1,660\n\n2,120\n(65)\n2,055\n1,908\n(79)\n1,829\nNoninterest revenue\n15,179\n\n17,326\n\n32,505\n\n13,719\n15,647\n29,366\n16,009\n12,249\n28,258\nNet interest income\n7,353\n\n(4,076)\n3,277\n\n6,347\n(5,706)\n641\n3,171\n(3,465)\n(294)\nTotal net revenue\n$\n22,532\n\n$\n13,250\n\n$\n35,782\n\n$\n20,066\n$\n9,941\n$\n30,007\n$\n19,180\n$\n8,784\n$\n27,964\nLoss days\n(a)\n2\n1\n2\n(a)\nMarkets consists of Fixed Income Markets and Equity Markets. The year ended December\u00a031, 2025 had two loss days, including one loss day on December 25, 2025 from limited activity primarily in one location. Loss days represent the number of days for which Markets recorded losses in total net revenue, which includes revenue related to both trading and non-trading positions. The loss days determined under this measure differ from the measure used to determine backtesting gains and losses. Daily backtesting gains and losses include positions in the Firm\u2019s Risk Management value-at-risk (\"VaR\") measure and exclude certain components of total net revenue, which may more than offset backtesting gains or losses on a particular day. For more information on daily backtesting gains and losses, refer to the VaR discussion on pages 135\u2013138.\nSelected metrics\nAs of or for the year ended December 31,\n(in millions, except where otherwise noted)\n2025\n2024\n2023\nAssets under custody (\"AUC\") by asset class (period-end) (in billions):\nFixed Income\n$\n18,322\n\n$\n16,409\n$\n15,543\nEquity\n17,954\n\n14,848\n12,927\nOther\n(a)\n4,896\n\n4,023\n3,922\nTotal AUC\n$\n41,172\n\n$\n35,280\n$\n32,392\nClient deposits and other third-party liabilities (average)\n(b)\n$\n1,097,581\n\n$\n961,646\n$\n912,859\n(a)\nConsists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts.\n(b)\nClient deposits and other third-party liabilities pertain to the Payments and Securities Services businesses.\n74\nJPMorgan Chase & Co./2025 Form 10-K\nInternational metrics\nAs of or for the year ended December 31,\n(in millions, except where otherwise noted)\n2025\n2024\n2023\nTotal net revenue\n(a)\nEurope/Middle East/Africa\n$\n17,189\n\n$\n15,191\n$\n14,418\nAsia-Pacific\n10,699\n\n8,867\n7,891\nLatin America/Caribbean\n2,636\n\n2,427\n2,161\nTotal international net revenue\n30,524\n\n26,485\n24,470\nNorth America\n47,930\n\n43,629\n39,883\nTotal net revenue\n$\n78,454\n\n$\n70,114\n$\n64,353\nLoans retained (period-end)\n(a)\nEurope/Middle East/Africa\n$\n60,299\n\n$\n44,374\n$\n44,793\nAsia-Pacific\n20,390\n\n16,107\n15,506\nLatin America/Caribbean\n11,993\n\n10,331\n8,610\nTotal international loans\n92,682\n\n70,812\n68,909\nNorth America\n465,846\n\n412,231\n406,277\nTotal loans retained\n$\n558,528\n\n$\n483,043\n$\n475,186\nClient deposits and other third-party liabilities (average)\n(b)\nEurope/Middle East/Africa\n$\n297,959\n\n$\n264,227\n$\n247,804\nAsia-Pacific\n155,950\n\n141,042\n135,388\nLatin America/Caribbean\n47,064\n\n42,716\n39,861\nTotal international\n$\n500,973\n\n$\n447,985\n$\n423,053\nNorth America\n596,608\n\n513,661\n489,806\nTotal client deposits and other third-party liabilities\n$\n1,097,581\n\n$\n961,646\n$\n912,859\nAUC (period-end)\n(b)\n(in billions)\nNorth America\n$\n27,763\n\n$\n23,845\n$\n21,792\nAll other regions\n13,409\n\n11,435\n10,600\nTotal AUC\n$\n41,172\n\n$\n35,280\n$\n32,392\n(a)\nTotal net revenue and loans retained (excluding loans held-for-sale and loans at fair value) are based on the location of the trading desk, booking location, or domicile of the client, as applicable.\n(b)\nClient deposits and other third-party liabilities pertaining to the Payments and Securities Services businesses, and AUC, are based on the domicile of the client or booking location, as applicable.\nJPMorgan Chase & Co./2025 Form 10-K\n75\nASSET & WEALTH MANAGEMENT\nAsset & Wealth Management, with client assets of $7.1 trillion, is a global leader in investment and wealth management.\nAsset Management\nOffers multi-asset investment management solutions across equities, fixed income, alternatives and money market funds to institutional and retail investors providing for a broad range of clients\u2019 investment needs.\nGlobal Private Bank\nProvides retirement products and services, brokerage, custody, estate planning, lending, deposits and investment management to high net worth clients.\nThe majority of AWM\u2019s client assets are in actively managed portfolios.\nSelected income statement data\nYear ended December 31,\n(in millions, except ratios)\n2025\n2024\n2023\nRevenue\nAsset management fees\n$\n15,494\n\n$\n13,693\n$\n11,826\nCommissions and other fees\n1,184\n\n874\n697\nAll other income\n(a)\n563\n\n456\n1,037\n(b)\nNoninterest revenue\n17,241\n\n15,023\n13,560\nNet interest income\n6,832\n\n6,555\n6,267\nTotal net revenue\n24,073\n\n21,578\n19,827\nProvision for credit losses\n97\n\n(68)\n159\nNoninterest expense\nCompensation expense\n8,645\n\n7,984\n7,115\nNoncompensation expense\n6,687\n\n6,430\n5,665\nTotal noninterest expense\n15,332\n\n14,414\n12,780\nIncome before income tax expense\n8,644\n\n7,232\n6,888\nIncome tax expense\n2,122\n\n1,811\n1,661\nNet income\n$\n6,522\n\n$\n5,421\n$\n5,227\nRevenue by line of business\nAsset Management\n$\n11,700\n\n$\n10,175\n$\n9,129\nGlobal Private Bank\n12,373\n\n11,403\n10,698\nTotal net revenue\n$\n24,073\n\n$\n21,578\n$\n19,827\nFinancial ratios\nReturn on equity\n40\n\n%\n34\n%\n31\n%\nOverhead ratio\n64\n\n67\n64\nPre-tax margin ratio:\nAsset Management\n35\n\n31\n31\nGlobal Private Bank\n37\n\n35\n38\nAsset & Wealth Management\n36\n\n34\n35\n(a)\nIncludes the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic. The discount, which is deferred in other liabilities and recognized on a straight-line basis over the commitment period, continues to decline as commitments expire.\n(b)\nIncludes the gain on the original minority interest in China International Fund Management (\u201cCIFM\u201d) upon the Firm\u2019s acquisition of the remaining 51% interest in the entity.\n2025 compared with 2024\nNet income was $6.5 billion, up 20%.\nNet revenue was $24.1 billion, up 12%. Net interest income was $6.8 billion, up 4%. Noninterest revenue was $17.2 billion, up 15%.\nRevenue from Asset Management was $11.7 billion, up 15%, predominantly driven by:\n\u2022\nhigher asset management fees, reflecting strong net inflows and higher average market levels,\n\u2022\nhigher investment valuation gains, and\n\u2022\nperformance fees.\nRevenue from Global Private Bank was $12.4 billion, up 9%, driven by:\n\u2022\nhigher noninterest revenue, reflecting:\n\u2013\nhigher management fees due to strong net inflows and higher average market levels, as well as higher brokerage commissions,\npartially offset by\n\u2013\na decline in the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic that have expired, and\n\u2022\nhigher net interest income, driven by higher average loans and deposits, largely offset by narrower spreads on loans.\nNoninterest expense was $15.3 billion, up 6%, driven by:\n\u2022\nhigher compensation, primarily higher revenue-related compensation and continued growth in private banking advisor teams, as well as higher distribution fees,\npartially offset by\n\u2022\n lower legal expense.\nThe provision for credit losses was $97 million, largely driven by the impact of a charge-off related to a client-specific exposure in the third quarter of 2025. Net charge-offs were $92 million and the net addition to the allowance for credit losses was $5 million.\nIn the prior year, the provision was a net benefit of $68 million.\n76\nJPMorgan Chase & Co./2025 Form 10-K\nAsset Management has two high-level measures of its overall fund performance.\n\u2022\nPercentage of active mutual fund and active ETF assets under management in funds rated 4- or 5-star:\n Mutual fund rating services rank funds based on their risk adjusted performance over various periods. A 5-star rating is the best rating and represents the top 10% of industry-wide ranked funds. A 4-star rating represents the next 22.5% of industry-wide ranked funds. A 3-star rating represents the next 35% of industry-wide ranked funds. A 2-star rating represents the next 22.5% of industry-wide ranked funds. A 1-star rating is the worst rating and represents the bottom 10% of industry-wide ranked funds. An overall Morningstar rating is derived from a weighted average of the performance associated with a fund\u2019s three-, five and ten- year (if applicable) Morningstar Rating metrics. For U.S.-domiciled funds, separate star ratings are provided at the individual share class level. The Nomura \u201cstar rating\u201d is based on three-year risk-adjusted performance only. Funds with fewer than three years of history are not rated and hence excluded from these rankings. All ratings, the assigned peer categories and the asset values used to derive these rankings are sourced from the applicable fund rating provider. Where applicable, the fund rating providers redenominate asset values into U.S. dollars. The percentage of AUM is based on star ratings at the share class level for U.S.-domiciled funds, and at a \u201cprimary share class\u201d level to represent the star rating of all other funds, except for Japan, for which Nomura provides ratings at the fund level. The performance data may have been different if all share classes had been included. Past performance is not indicative of future results.\n\u2022\nPercentage of active mutual fund and active ETF assets under management in funds ranked in the 1st or 2nd quartile (one, three and five years)\n: All quartile rankings, the assigned peer categories and the asset values used to derive these rankings are sourced from the fund rating providers. Quartile rankings are based on the net-of-fee absolute return of each fund. Where applicable, the fund rating providers redenominate asset values into U.S. dollars. The percentage of AUM is based on fund performance and associated peer rankings at the share class level for U.S.-domiciled funds, at a \u201cprimary share class\u201d level to represent the quartile ranking for U.K., Luxembourg and Hong Kong SAR funds and at the fund level for all other funds. The performance data may have been different if all share classes had been included. Past performance is not indicative of future results.\n\u201c\nPrimary share class\n\u201d means the C share class for European funds and Acc share class for Hong Kong SAR and Taiwan funds. If these share classes are not available, the oldest share class is used as the primary share class.\nSelected metrics\nAs of or for the year ended December 31,\n(in millions, except ranking data, ratios and employees)\n2025\n2024\n2023\n% of JPM mutual fund assets and ETFs rated as 4- or 5-star\n(a)\n60\n\n%\n69\n%\n69\n%\n% of JPM mutual fund assets and ETFs ranked in 1\nst\n or 2\nnd\n\nquartile:\n(b)\n1 year\n44\n\n73\n40\n3 years\n54\n\n75\n67\n5 years\n73\n\n77\n71\nSelected balance sheet data (period-end)\n(c)\nTotal assets\n$\n288,065\n\n$\n255,385\n$\n245,512\nLoans\n266,385\n\n236,303\n227,929\nDeposits\n257,316\n\n248,287\n233,232\nEquity\n16,000\n\n15,500\n17,000\nSelected balance sheet data (average)\n(c)\nTotal assets\n$\n267,986\n\n$\n246,254\n$\n240,222\nLoans\n246,596\n\n227,676\n220,487\nDeposits\n245,248\n\n235,146\n216,178\nEquity\n16,000\n\n15,500\n16,671\nEmployees\n29,722\n(d)\n29,403\n28,485\nNumber of Global Private Bank client advisors\n4,101\n3,775\n3,515\nCredit data and quality statistics\n(c)\nNet charge-offs/(recoveries)\n$\n92\n\n$\n21\n$\n13\nNonaccrual loans\n1,199\n\n700\n650\nAllowance for credit losses:\nAllowance for loan losses\n$\n536\n\n$\n539\n$\n633\nAllowance for lending-related commitments\n43\n\n35\n28\nTotal allowance for credit losses\n$\n579\n\n$\n574\n$\n661\nNet charge-off/(recovery) rate\n0.04\n\n%\n0.01\n%\n0.01\n%\nAllowance for loan losses to period-end loans\n0.20\n\n0.23\n0.28\nAllowance for loan losses to nonaccrual loans\n45\n\n77\n97\nNonaccrual loans to period-end loans\n0.45\n\n0.30\n0.29\n(a)\nRepresents the Morningstar Rating for all domiciled funds except for Japan domiciled funds which use Nomura. Includes only Asset Management retail active open-ended mutual funds and active ETFs that have a rating. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds.\nJPMorgan Chase & Co./2025 Form 10-K\n77\n(b)\nQuartile ranking sourced from Morningstar, Lipper and Nomura based on country of domicile. Includes only Asset Management retail active open-ended mutual funds and active ETFs that are ranked by the aforementioned sources. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds.\n(c)\nLoans, deposits and related credit data and quality statistics relate to the Global Private Bank business.\n(d)\nIn\n the first quarter of 2025, 130 employees were transferred to Corporate as a result of the centralization of certain functions.\nClient assets\n2025 compared with 2024\nAssets under management were $4.8 trillion, up 18%, and client assets were $7.1 trillion, up 20%. These increases were driven by higher market levels and continued net inflows.\nClient assets\nDecember 31,\n(in billions)\n2025\n2024\n2023\nAssets by asset class\nLiquidity\n$\n1,279\n\n$\n1,083\n$\n926\nFixed income\n998\n\n851\n751\nEquity\n1,400\n\n1,128\n868\nMulti-asset\n884\n\n764\n680\nAlternatives\n230\n\n219\n197\nTotal assets under management\n4,791\n\n4,045\n3,422\nCustody/brokerage/\nadministration/deposits\n2,327\n\n1,887\n1,590\nTotal client assets\n(a)\n$\n7,118\n\n$\n5,932\n$\n5,012\nAssets by client segment\nPrivate Banking\n(b)\n$\n1,414\n\n$\n1,162\n$\n924\nGlobal Institutional\n1,953\n\n1,692\n1,488\nGlobal Funds\n(b)\n1,424\n\n1,191\n1,010\nTotal assets under management\n$\n4,791\n\n$\n4,045\n$\n3,422\nPrivate Banking\n(b)\n$\n3,549\n\n$\n2,902\n$\n2,402\nGlobal Institutional\n2,121\n\n1,820\n1,594\nGlobal Funds\n(b)\n1,448\n\n1,210\n1,016\nTotal client assets\n(a)\n$\n7,118\n\n$\n5,932\n$\n5,012\n(a)\nIncludes CCB client investment assets invested in managed accounts and J.P. Morgan mutual funds where AWM is the investment manager.\n(b)\nIn the first quarter of 2025, the Firm realigned certain client assets from Private Banking to Global Funds to reflect them in the client segment where the assets are invested. Prior period amounts have been revised to conform with the current presentation.\nClient assets (continued)\nYear ended December 31,\n(in billions)\n2025\n2024\n2023\nAssets under management rollforward\nBeginning balance\n$\n4,045\n\n$\n3,422\n$\n2,766\nNet asset flows:\nLiquidity\n183\n\n140\n242\nFixed income\n94\n\n91\n70\nEquity\n95\n\n114\n70\nMulti-asset\n16\n\n19\n1\nAlternatives\n4\n\n10\n(1)\nMarket/performance/other impacts\n354\n\n249\n274\nEnding balance, December 31\n$\n4,791\n\n$\n4,045\n$\n3,422\nClient assets rollforward\nBeginning balance\n$\n5,932\n\n$\n5,012\n$\n4,048\nNet asset flows\n553\n\n486\n490\nMarket/performance/other impacts\n633\n\n434\n474\nEnding balance, December 31\n$\n7,118\n\n$\n5,932\n$\n5,012\nSelected Metrics\nAs of December 31,\n2025\n2024\nChange\nFirmwide Wealth Management\nClient assets (in billions)\n(a)\n$\n4,521\n\n$\n3,756\n20\n%\nNumber of client advisors\n10,150\n\n9,530\n7\nStock Plan Administration\nNumber of stock plan participants (in thousands)\n1,794\n\n1,327\n35\nClient assets (in billions)\n$\n372\n\n$\n270\n38\n%\n(a)\nConsists of Global Private Bank in AWM and client investment assets in J.P. Morgan Wealth Management in CCB.\n78\nJPMorgan Chase & Co./2025 Form 10-K\nInternational metrics\nYear ended December 31,\n(in billions, except where otherwise noted)\n2025\n2024\n2023\nTotal net revenue (in millions)\n(a)\nEurope/Middle East/Africa\n$\n4,049\n\n$\n3,563\n$\n3,377\nAsia-Pacific\n2,432\n\n2,023\n1,876\nLatin America/Caribbean\n1,228\n\n1,065\n985\nTotal international net revenue\n7,709\n\n6,651\n6,238\nNorth America\n16,364\n\n14,927\n13,589\nTotal net revenue\n(a)\n$\n24,073\n\n$\n21,578\n$\n19,827\nAssets under management\nEurope/Middle East/Africa\n$\n709\n\n$\n604\n$\n539\nAsia-Pacific\n374\n\n302\n263\nLatin America/Caribbean\n126\n\n106\n86\nTotal international assets under management\n1,209\n\n1,012\n888\nNorth America\n3,582\n\n3,033\n2,534\nTotal assets under management\n$\n4,791\n\n$\n4,045\n$\n3,422\nClient assets\nEurope/Middle East/Africa\n$\n1,035\n\n$\n841\n$\n740\nAsia-Pacific\n620\n\n482\n406\nLatin America/Caribbean\n310\n\n254\n232\nTotal international client assets\n1,965\n\n1,577\n1,378\nNorth America\n5,153\n\n4,355\n3,634\nTotal client assets\n$\n7,118\n\n$\n5,932\n$\n5,012\n(a)\nRegional revenue is based on the domicile of the client.\nJPMorgan Chase & Co./2025 Form 10-K\n79\nCORPORATE\nCorporate consists of Treasury and Chief Investment Office (\u201cCIO\u201d) and Other Corporate. Treasury and CIO is predominantly responsible for measuring, monitoring, reporting and managing the Firm\u2019s liquidity, funding, capital, structural interest rate and foreign exchange risks.\nOther Corporate includes staff functions and expense that is centrally managed as well as certain Firm initiatives and activities not solely aligned to a specific LOB. The major Other Corporate functions include Real Estate, Technology, Legal, Corporate Finance, Human Resources, Internal Audit, Risk Management, Compliance, Control Management, Corporate Responsibility and various Other Corporate groups.\nSelected income statement and balance sheet data\nAs of or for the year ended December 31,\n(in millions, except employees)\n2025\n2024\n2023\nRevenue\nPrincipal transactions\n$\n(339)\n$\n152\n$\n302\nInvestment securities losses\n(58)\n(1,020)\n(3,180)\nAll other income\n1,308\n\n8,476\n(f)\n3,010\n(h)\nNoninterest revenue\n911\n\n7,608\n132\nNet interest income\n6,114\n\n9,786\n7,906\nTotal net revenue\n(a)\n7,025\n\n17,394\n8,038\nProvision for credit losses\n7\n\n10\n171\nNoninterest expense\n(b)\n1,825\n\n3,994\n(g)\n5,601\nIncome before income tax expense\n5,193\n\n13,390\n2,266\nIncome tax expense/(benefit)\n673\n\n(d)\n2,789\n(555)\n(i)\nNet income\n$\n4,520\n\n$\n10,601\n$\n2,821\nTotal net revenue\nTreasury and CIO\n6,501\n\n9,638\n6,072\nOther Corporate\n524\n\n7,756\n1,966\nTotal net revenue\n$\n7,025\n\n$\n17,394\n$\n8,038\nNet income/(loss)\nTreasury and CIO\n4,565\n\n7,013\n4,206\nOther Corporate\n(b)\n(45)\n3,588\n(1,385)\nTotal net income\n$\n4,520\n\n$\n10,601\n$\n2,821\nTotal assets (period-end)\n$\n1,329,632\n\n$\n1,323,967\n$\n1,348,437\nLoans (period-end)\n2,941\n\n1,964\n1,924\nDeposits\n(c)\n35,874\n\n27,581\n21,826\nEmployees\n50,031\n\n(e)\n49,610\n47,530\n(a)\nIncluded taxable-equivalent adjustments, predominantly driven by tax-exempt income from municipal bonds, of $154 million,\n$182 million and $211 million for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n(b)\nIncluded FDIC special assessment accrual releases of $763\u00a0million and an accrual increase of $725\u00a0million for the years ended December\u00a031, 2025 and 2024, respectively, which are adjustments to the initial $2.9\u00a0billion estimate recorded in the fourth quarter of 2023.\n(c)\nPredominantly relates to the Firm's international consumer initiatives.\n(d)\nIncluded a $774 million income tax benefit recorded in the second quarter of 2025, driven by the resolution of certain tax audits and the impact of tax regulations related to foreign currency translation gains and losses finalized in 2024 and effective for 2025.\n(e)\nIn the first quarter of 2025, 768 employees were transferred from the LOBs to Corporate as a result of the centralization of certain functions.\n(f)\nIncluded the net gain related to Visa shares of $7.9 billion recorded in the second quarter of 2024. Refer to Note 6 for additional information.\n(g)\nIncluded a $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024. Refer to Note 6 for additional information.\n(h)\nIncluded the estimated bargain purchase gain of $2.8 billion for the year ended December\u00a031, 2023 associated with the First Republic acquisition. Refer to Notes 6 and 34 for additional information.\n(i)\nIncome taxes associated with the First Republic acquisition were reflected in the estimated bargain purchase gain.\n80\nJPMorgan Chase & Co./2025 Form 10-K\n2025 compared with 2024\nNet income was $4.5 billion, compared with $10.6 billion in the prior year.\nNet revenue was $7.0 billion, compared with $17.4 billion in the prior year.\nNet interest income was $6.1 billion, down $3.7 billion, driven by the impact of lower rates and changes in FTP for consumer deposits, partially offset by the impact of investment securities activity.\nRefer to Business Segment & Corporate Results on page 63 for additional information on FTP.\nNoninterest revenue was $911 million, compared with $7.6 billion in the prior year, driven by:\n\u2022\nthe absence of the $7.9 billion net gain related to Visa shares recorded in the second quarter of 2024,\npartially offset by\n\u2022\nlower net investment securities losses associated with repositioning the investment securities portfolio in Treasury and CIO. The prior year net loss was primarily related to sales of U.S. GSE and government agency MBS and U.S. Treasuries, and\n\u2022\nthe $588 million First Republic-related gain recorded in the first quarter of 2025.\nNoninterest expense was $1.8 billion, down 54%, primarily driven by:\n\u2022\nlower FDIC-related expense driven by releases of FDIC special assessment accruals of $763 million, compared with an accrual increase of $725 million in the first quarter of the prior year, and\n\u2022\nthe absence of the following items recorded in the prior year\n\u2013\na $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation, and\n\u2013\nrestructuring and integration costs associated with First Republic.\nRefer to Note 6 for additional information on Visa shares and FDIC-related expense, Note 10 and Note 13 for additional information on the investment securities portfolio and the allowance for credit losses, and Note 6 and Note 34 for additional information on the First Republic acquisition.\nThe current period income tax expense was driven by:\n\u2022\nchanges in the level and mix of income and expenses subject to U.S. federal, state and local taxes,\npartially offset by\n\u2022\na $774 million income tax benefit recorded in the second quarter of 2025, driven by the resolution of certain tax audits and the impact of tax regulations related to foreign currency translation gains and losses finalized in 2024 and effective for 2025.\nOther Corporate includes the Strategic Investment Group within the Firm\u2019s Security and Resiliency Initiative, as well as the Firm's international consumer initiatives, which primarily consist of Chase U.K., J.P. Morgan Personal Investing (formerly Nutmeg) and an ownership stake in C6 Bank.\nThe deposits within Corporate relate to the Firm\u2019s international consumer initiatives and have increased as a result of growth in customer accounts.\nJPMorgan Chase & Co./2025 Form 10-K\n81\nTreasury and\n CIO\n overview\nTreasury and CIO\n is\npredominantly responsible for measuring, monitoring, reporting and managing the Firm\u2019s liquidity, funding, capital, structural interest rate and foreign exchange risks. The risks managed by Treasury and CIO arise from the activities undertaken by the Firm\u2019s three reportable business segments to serve their respective customer and client bases, which generate both on- and off-balance sheet assets and liabilities.\nTreasury and CIO seeks to achieve the Firm\u2019s asset-liability management objectives generally by investing in high quality securities that are managed for the longer-term as part of the Firm\u2019s investment securities portfolio. Treasury and CIO also uses derivatives to meet the Firm\n\u2019\ns asset-liability management objectives. Refer to Note 5 for further information on derivatives. In addition, Treasury and CIO manages the Firm\u2019s cash position primarily through deposits at central banks and investments in short-term instruments. Refer to Liq\nuidity Risk Management on pages 100\u2013107\n for further information on liquidity and funding risk\n. R\nefer to\n Market Risk Management on pages 133-142 for informatio\nn on interest rate and foreign exchange risks.\nThe investment securities portfolio predominantly consists of U.S. and non-U.S. government securities, U.S. GSE and government agency and nonagency mortgage-backed securities, collateralized loan obligations, obligations of U.S. states and municipalities and other ABS. At December\u00a031, 2025, the Treasury and CIO investment securities portfolio, net of the allowance for credit losses, was $774.0 billion, and the average credit rating of the securities comprising the portfolio was AA+ (based upon external ratings where available and, where not available, based primarily upon internal risk ratings). Refer to Note 10 for further information on the Firm\u2019s investment securities portfolio and internal risk ratings.\nSelected income statement and balance sheet data\nAs of or for the year ended December 31, (in millions)\n2025\n2024\n2023\nInvestment securities losses\n$\n(58)\n$\n(1,020)\n$\n(3,180)\nAvailable-for-sale securities (average)\n$\n463,541\n\n(b)\n$\n287,260\n$\n200,708\n(c)\nHeld-to-maturity securities (average)\n271,309\n\n(b)\n321,384\n402,010\n(c)\nInvestment securities portfolio (average)\n$\n734,850\n\n$\n608,644\n$\n602,718\nAvailable-for-sale securities (period-end)\n$\n503,896\n\n(b)\n$\n403,796\n$\n199,354\n(c)\nHeld-to-maturity securities (period\u2013end)\n270,134\n\n(b)\n274,468\n369,848\n(c)\nInvestment securities portfolio, net of allowance for credit losses (period\u2013end)\n(a)\n$\n774,030\n\n$\n678,264\n$\n569,202\n(a)\nAs of December\u00a031, 2025, 2024 and 2023, the allowance for credit losses on investment securities was $73 million, $105\u00a0million and $94 million, respectively.\n(b)\nDuring the third quarter of 2025, the Firm transferred $44.1 billion of investment securities from AFS to HTM for asset-liability management purposes.\n(c)\nEffective January 1, 2023, the Firm adopted the portfolio layer method hedge accounting guidance. As permitted by the guidance, the Firm elected to transfer $7.1\u00a0billion of investment securities from HTM to AFS. Refer to Note 1 and Note 10 for additional information.\n82\nJPMorgan Chase & Co./2025 Form 10-K\nFIRMWIDE RISK MANAGEMENT\nRisk is an inherent part of JPMorganChase\u2019s business activities. When the Firm extends a consumer or wholesale loan, advises customers and clients on their investment decisions, makes markets in securities, or offers other products or services, the Firm takes on some degree of risk. The Firm\u2019s overall objective is to manage its business, and the associated risks, in a manner that balances serving the interests of its clients, customers and investors, and protecting the safety and soundness of the Firm.\nThe Firm believes that effective risk management requires, among other things:\n\u2022\nAcceptance of responsibility, including identification and escalation of risks by all individuals within the Firm;\n\u2022\nOwnership of risk identification, assessment, data and management within each of the LOBs and Corporate; and\n\u2022\nA Firmwide risk governance and oversight structure.\nThe Firm follows a disciplined and balanced compensation framework with strong internal governance and independent oversight by the Board of Directors (the \u201cBoard\u201d).\u00a0The impact of risk and control issues is carefully considered in the Firm\u2019s performance evaluation and incentive compensation processes.\nRisk governance framework\nThe Firm\u2019s risk governance framework involves understanding drivers of risks, types of risks and impacts of risks.\nDrivers of risks\n are factors that cause a risk to exist. Drivers of risks include the economic environment, regulatory or government policy, competitor or market evolution, business decisions, process or judgment error, deliberate wrongdoing, dysfunctional markets and natural disasters.\nTypes of risks\nare categories by which risks manifest themselves. The Firm\u2019s risks are generally categorized in the following four risk types:\n\u2022\nStrategic risk is the risk to earnings, capital, liquidity or reputation associated with poorly-designed or failed business plans or an inadequate response to changes in the operating environment.\n\u2022\nCredit and investment risk is the risk associated with the default or change in credit profile of a client, counterparty or customer; or loss of principal or a reduction in expected returns on investments, including consumer credit risk, wholesale credit risk and investment portfolio risk.\n\u2022\nMarket risk is the risk associated with the effect of changes in market factors, such as interest and foreign exchange rates, equity and commodity prices, credit spreads or implied volatilities, on the value of assets and liabilities held for both the short and long term.\n\u2022\nOperational risk is the risk of an adverse outcome resulting from inadequate or failed internal processes or systems; human factors; or external events impacting the Firm\u2019s processes or systems. Operational risk includes cybersecurity, compliance, conduct, legal, and estimations and model risk.\nImpacts of risks\n are consequences of risks, both quantitative and qualitative. There may be many consequences when risks manifest themselves, including quantitative impacts such as a reduction in earnings and capital, liquidity outflows, and fines or penalties, or qualitative impacts such as damage to the Firm\u2019s reputation, loss of clients and customers, and regulatory and enforcement actions.\nThe Firm\u2019s risk governance framework is managed on a Firmwide basis. The Firm has an Independent Risk Management (\u201cIRM\u201d) function, which is comprised of Risk Management and Compliance. The Firm\u2019s Chief Executive Officer (\u201cCEO\u201d) appoints, subject to approval by the Risk Committee of the Board of Directors (the \u201cBoard Risk Committee\u201d), the Firm\u2019s Chief Risk Officer (\u201cCRO\u201d) to lead the IRM function and maintain the risk governance framework of the Firm. The framework is subject to approval by the Board Risk Committee through its review and approval of the Risk Governance and Oversight Policy.\nThe Firm\u2019s CRO oversees and delegates authority to the Firmwide Risk Executives (\u201cFREs\u201d), the Chief Risk Officers of the LOBs and Corporate (\u201cLOB CROs\u201d), and the Firm\u2019s Chief Compliance Officer (\u201cCCO\u201d), who, in turn, establish Risk Management and Compliance organizations, develop the Firm\u2019s risk governance policies and standards, and define and oversee the implementation of the Firm\u2019s risk governance framework. The LOB CROs oversee risks that arise in their LOBs and Corporate, while FREs oversee risks that span across the LOBs and Corporate, as well as functions and regions. Each area of the Firm that gives rise to risk is expected to operate within the parameters identified by the IRM function, and within the risk and control standards established by its own management.\nJPMorgan Chase & Co./2025 Form 10-K\n83\nManagement\u2019s discussion and analysis\nThree lines of defense\nThe Firm\u2019s \u201cthree lines of defense\u201d are as follows:\nThe\n\nfirst line of defense consists of each LOB, Treasury and CIO, and certain Other Corporate initiatives, including their aligned Operations, Technology and Control Management. The first line of defense owns the risks, and identification of risks, associated with their respective activities and the design and execution of controls to manage those risks. Responsibilities also include adherence to applicable laws, rules and regulations and implementation of the risk governance framework established by IRM, which may include policies, standards, limits, thresholds and controls.\nThe second line of defense is the IRM function, which is separate from the first line of defense and is responsible for independently measuring risk, as well as assessing and challenging the risk management activities of the first line of defense. IRM is also responsible for the identification of risks within its organization, its own adherence to applicable laws, rules and regulations and for the development and implementation of policies and standards with respect to its own processes.\nThe third line of defense is Internal Audit, an independent function that provides objective assessment of the adequacy and effectiveness of Firmwide processes, controls, governance and risk management. The Internal Audit function is led by the General Auditor, who reports to the Audit Committee and administratively to the CEO.\nIn addition, there are other functions that contribute to the Firmwide control environment but are not considered part of a particular line of defense, including Corporate Finance, Human Resources and Legal. These other functions are responsible for the identification of risks within their respective organizations, adherence to applicable laws, rules and regulations and implementation of the risk governance framework established by IRM.\nRisk identification and ownership\nThe LOBs and Corporate are responsible for the identification of risks within their respective organizations, as well as the design and execution of controls, including IRM-specified controls, to manage those risks. The IRM function reviews and challenges the material risks identified by each LOB and Corporate, and maintains a risk identification framework and a central risk inventory.\nRisk appetite\nThe Firm\u2019s overall appetite for risk is governed by Risk Appetite frameworks for quantitative and qualitative risks. The Firm\u2019s risk appetite is periodically set and approved by senior management (including the CEO and CRO) and approved by the Board Risk Committee. Quantitative and qualitative risks are assessed to monitor and measure the Firm\u2019s capacity to take risk consistent with its stated risk appetite. Risk appetite results are reported to the Board Risk Committee.\n84\nJPMorgan Chase & Co./2025 Form 10-K\nRisk governance and oversight structure\nThe independent status of the IRM function is supported by a risk governance and oversight structure that provides channels for the escalation of risks and issues to senior management, the FRC and the Board of Directors, as appropriate.\nThe chart below illustrates the principal standing committees of the Board of Directors and key senior management-level committees in the Firm\u2019s risk governance and oversight structure. In addition, there are other committees, forums and channels of escalation that support the oversight of risk that are not shown in the chart below or described in this Form 10-K.\n(a)\nThe Firm\u2019s CEO is also the Chairman of the Board of Directors.\n(b)\nThe Firm\u2019s CRO reports to the Firm\u2019s CEO and the Board Risk Committee. The Firm\u2019s CRO may escalate directly to the Board of Directors (including its committees), as appropriate.\n(c)\nThe Firm\u2019s General Auditor reports to the Audit Committee and administratively to the Firm\u2019s CEO.\n(d)\nThe Firmwide Risk Committee escalates to the Board Risk Committee, as appropriate.\n(e)\nThe Asset and Liability Committee escalates to the Firm\u2019s CEO or the Board of Directors (including its committees), as appropriate.\nThe Firm\u2019s Operating Committee, which consists of the Firm\u2019s CEO, CRO, Chief Financial Officer (\u201cCFO\u201d), General Counsel, CEOs of the LOBs and other senior executives, is accountable to and may refer matters to the Firm\u2019s Board of Directors. The Operating Committee and certain other members of senior management are responsible for escalating to the Board the information necessary to facilitate the Board\u2019s exercise of its duties.\nBoard oversight\nThe Firm\u2019s Board of Directors actively oversees the business and affairs of the Firm. This includes monitoring the Firm\u2019s financial performance and condition and reviewing the strategic objectives and plans of the Firm. The Board carries out a significant portion of its oversight responsibilities through its principal standing committees, each of which consists solely of independent members of the Board.\nThe JPMorgan Chase Bank, N.A. Board of Directors is responsible for the oversight of management of the bank, which it discharges both acting directly and through the principal standing committees of the Firm\u2019s Board of Directors. Risk and control oversight on behalf of JPMorgan Chase Bank N.A. is primarily the responsibility of the Board Risk Committee and the\nAudit Committee, respectively, and, with respect to compensation and other management-related matters, the Compensation & Management Development Committee.\nThe Board Risk Committee\nassists the Board in its oversight of management\u2019s responsibility to implement a global risk management framework reasonably designed to identify, assess and manage the Firm\u2019s risks. The Board Risk Committee\u2019s responsibilities include approval of applicable primary risk policies and review of certain associated frameworks, analysis and reporting established by management.\u00a0Breaches in risk appetite and parameters, issues that may have a material adverse impact on the Firm, including capital and liquidity issues, and other significant risk-related matters are escalated to the Board Risk Committee, as appropriate.\nThe Audit Committee\nassists the Board in its oversight of management\u2019s responsibilities to ensure that there is an effective system of controls reasonably designed to safeguard the Firm\u2019s assets and income, ensure the integrity of the Firm\u2019s financial statements, and maintain compliance with the Firm\u2019s ethical standards, policies, plans and procedures, and with laws and\nJPMorgan Chase & Co./2025 Form 10-K\n85\nManagement\u2019s discussion and analysis\nregulations.\u00a0It also assists the Board in its oversight of the qualifications, independence and performance of the Firm\u2019s independent registered public accounting firm, and of the performance of the Firm\u2019s Internal Audit function.\nThe Compensation & Management Development Committee\n\n(\u201cCMDC\u201d)\nassists the Board in its oversight of the Firm\u2019s compensation principles and practices. The CMDC reviews and approves the Firm\u2019s compensation and qualified benefits programs. The Committee reviews the performance of Operating Committee members against their goals, and approves their compensation awards. In addition, the CEO\u2019s compensation award is subject to ratification by the independent directors of the Board. The CMDC also reviews the development of and succession for key executives. As part of the Board\u2019s role of reinforcing, demonstrating and communicating the \u201ctone at the top,\u201d the CMDC oversees the Firm\u2019s culture, including reviewing updates from management regarding significant conduct issues and any related actions with respect to employees, including compensation actions.\nThe Public Responsibility Committee\n oversees and reviews the Firm's positions and practices on public responsibility matters such as community investment, fair lending, sustainability, consumer practices and other public policy issues that reflect the Firm's values and character and could impact the Firm's reputation among its stakeholders. The Committee also provides guidance on these matters to management and the Board, as appropriate.\nThe Corporate Governance & Nominating Committee\n exercises general oversight with respect to the governance of the Board of Directors. It reviews the qualifications of and recommends to the Board proposed nominees for election to the Board. The Committee evaluates and recommends to the Board corporate governance practices applicable to the Firm. It also reviews the framework for assessing the Board\u2019s performance and self-evaluation.\nManagement oversight\nThe Firm\u2019s senior management-level committees that are primarily responsible for key risk-related functions include:\nThe Firmwide Risk Committee (\u201cFRC\u201d)\n is the Firm\u2019s highest management-level risk committee. It oversees the risks inherent in the Firm\u2019s business and provides a forum for discussion of risk-related and other topics and issues that are raised or escalated by its members and other committees.\nThe Firmwide Control Committee (\u201cFCC\u201d)\nis an escalation committee for senior management to review and discuss the Firmwide compliance and operational risk environment, including identified issues, compliance and operational risk metrics and significant events that have been escalated.\nLine of Business and Regional Risk Committees\nare responsible for overseeing the governance, limits and controls that have been established within the scope of their respective activities. These committees\n\nreview the ways in which the particular LOB or the businesses operating in a particular region could be exposed to adverse outcomes, with a focus on identifying, accepting, escalating and/or requiring remediation of matters brought to these committees.\nThe Control Committees for the LOBs and certain of the Corporate functions\nover\nsee the risk and control environment of their respective business or function, inclusive of Operational Risk, Compliance and Conduct Risks. As part of that mandate, they are responsible for reviewing indicators of elevated or emerging risks and other data that may impact the level of compliance and operational risk in a business or function, addressing key compliance and operational risk issues\n, with an emphasis on processes with control concerns, and overseeing control remediation.\nThe\nAsset and Liability Committee (\u201cALCO\u201d)\nis responsible for overseeing the Firm\u2019s asset and liability management (\u201cALM\u201d), including the activities and frameworks supporting management of the balance sheet, liquidity risk, interest rate risk and capital risk.\nThe Firmwide Valuation Governance Forum (\u201cVGF\u201d)\nis composed of senior finance and risk executives and is responsible for overseeing the management of risks arising from valuation activities conducted across the Firm.\n86\nJPMorgan Chase & Co./2025 Form 10-K\nRisk governance and oversight functions\nThe Firm monitors and measures its risk through risk governance and oversight functions. The scope of a particular function or business activity may include one or more drivers, types and/or impacts of risk. For example, Country Risk Management oversees country risk which may be a driver of risk or an aggregation of exposures that could give rise to multiple risk types such as credit or market risk.\nThe following sections discuss the risk governance and oversight functions that have been established to oversee the risks inherent in the Firm\u2019s business activities.\nRisk governance and oversight functions\nPage\nStrategic Risk\n88\nCapital Risk\n89-99\nLiquidity Risk\n100-107\nReputation Risk\n108\nConsumer Credit Risk\n112\u2013117\nWholesale Credit Risk\n118-128\nInvestment Portfolio Risk\n132\nMarket Risk\n133-142\nCountry Risk\n143-144\nClimate Risk\n145\nOperational Risk\n146-149\nCompliance Risk\n150\nConduct Risk\n151\nLegal Risk\n152\nEstimations and Model Risk\n153\nJPMorgan Chase & Co./2025 Form 10-K\n87\nManagement\u2019s discussion and analysis\nSTRATEGIC RISK MANAGEMENT\nStrategic risk is the risk to earnings, capital, liquidity or reputation associated with poorly-designed or failed business plans or an inadequate response to changes in the operating environment.\nManagement and oversight\nThe Operating Committee, together with the senior leadership of each LOB and Corporate, are responsible for managing strategic risk. IRM engages regularly in strategic business discussions and decision-making, including participation in relevant business reviews and senior management meetings, risk and control committees and other relevant governance forums, and review of acquisitions and new business initiatives. The Board of Directors oversees management\u2019s strategic decisions, and the Board Risk Committee oversees IRM and the Firm\u2019s risk governance framework.\nIn addition, IRM conducts a qualitative assessment of the LOB and Corporate strategic initiatives to assess their impact on the risk profile of the Firm.\nThe Firm\u2019s strategic planning process, which includes the development of the Firm\u2019s strategic plan and other strategic initiatives, is one component of managing the Firm\u2019s strategic risk. The strategic plan outlines the Firm\u2019s strategic framework and initiatives, and includes components such as budget, risk appetite, capital, earnings and asset-liability management objectives. Guided by the Firm\u2019s Business Principles, the Operating Committee and senior management teams in each LOB and Corporate review and update the strategic plan periodically, including evaluating the strategic framework and performance of strategic initiatives, assessing the operating environment, refining existing strategies and developing new strategies.\nThe Firm\u2019s strategic plan, together with IRM\u2019s assessment, are provided to the Board as part of its review and approval of the Firm\u2019s strategic plan, and the plan is also reflected in the Firm's budget.\nThe Firm\u2019s balance sheet strategy, which focuses on risk-adjusted returns, strong capital and robust liquidity, is also a component in the management of strategic risk. Refer to Capital Risk Management on pages 89\u201399 for further information on capital risk. Refer to Liquidity Risk Management on pages 100\u2013107 for further information on liquidity risk. Refer to Reputation Risk Management on page 108 for further information on reputation risk.\n88\nJPMorgan Chase & Co./2025 Form 10-K\nCAPITAL RISK MANAGEMENT\nCapital risk is the risk that the Firm has an insufficient level or composition of capital to support the Firm\u2019s business activities and associated risks during normal economic environments and under stressed conditions.\nA strong capital position is essential to the Firm\u2019s business strategy and competitive position. Maintaining a strong balance sheet to manage through economic volatility is a strategic imperative of the Firm\u2019s Board of Directors, CEO and Operating Committee. The Firm\u2019s \u201cfortress balance sheet\u201d philosophy focuses on risk-adjusted returns, strong capital and robust liquidity. The Firm\u2019s capital risk management strategy focuses on maintaining long-term stability to enable the Firm to build and invest in market-leading businesses, including in highly stressed environments. Senior management considers the implications on the Firm\u2019s capital prior to making significant decisions that could impact future business activities. In addition to considering the Firm\u2019s earnings outlook, senior management evaluates all sources and uses of capital with a view to ensuring the Firm\u2019s capital strength.\nCapital risk management\nThe Firm has a Capital Risk Management function whose primary objective is to provide independent oversight of capital risk across the Firm.\nCapital Risk Management\u2019s responsibilities include:\n\u2022\nDefining, monitoring and reporting capital risk metrics;\n\u2022\nEstablishing, calibrating and monitoring capital risk limits and indicators, including capital risk appetite;\n\u2022\nDeveloping processes to classify, monitor and report capital limit breaches;\n\u2022\nPerforming assessments of the Firm\u2019s capital management activities, including changes made to the Contingency Capital Plan described below; and\n\u2022\nConducting independent review of the Firm's interpretation of and compliance with the applicable regulatory capital rules and guidance relating to the calculation of regulatory capital.\nCapital management\nTreasury and CIO is responsible for capital management.\nThe primary objectives of the Firm\u2019s capital management are to:\n\u2022\nMaintain sufficient capital in order to continue to build and invest in the Firm\u2019s businesses through normal economic cycles and in stressed environments;\n\u2022\nRetain flexibility to take advantage of future investment opportunities;\n\u2022\nPromote the Parent Company\u2019s ability to serve as a source of strength to its subsidiaries;\n\u2022\nEnsure the Firm operates above the minimum regulatory capital ratios as well as maintain \u201cwell-capitalized\u201d status for the Firm and its principal insured depository institution (\u201cIDI\u201d) subsidiary, JPMorgan Chase Bank, N.A., at all times under applicable regulatory capital requirements;\n\u2022\nMeet capital distribution objectives; and\n\u2022\nMaintain sufficient capital resources to operate throughout a resolution period in accordance with the Firm\u2019s preferred resolution strategy.\nThe Firm addresses these objectives through:\n\u2022\nEstablishing internal minimum capital requirements and maintaining a strong capital governance framework. The internal minimum capital levels consider the Firm\u2019s regulatory capital requirements as well as an internal assessment of capital adequacy, in normal economic cycles and in stress events;\n\u2022\nRetaining flexibility in order to react to a range of potential events; and\n\u2022\nRegularly monitoring the Firm\u2019s capital position and following prescribed escalation protocols, both at the Firm and material legal entity levels.\nGovernance\nCommittees responsible for overseeing the Firm\u2019s capital management include the Capital Governance Committee, the Firmwide ALCO as well as regional ALCOs, and the CIO, Treasury and Corporate (\u201cCTC\u201d) Risk Committee. In addition, the Board Risk Committee periodically reviews the Firm\u2019s capital risk tolerance. Refer to Firmwide Risk Management on pages 83\u201387 for additional discussion of the Firmwide ALCO and other risk-related committees.\nCapital planning and stress testing\nComprehensive Capital Analysis and Review\nThe Federal Reserve requires the Firm, as a large Bank Holding Company (\u201cBHC\u201d), to submit at least annually a capital plan that has been reviewed and approved by the Board of Directors. The Federal Reserve uses Comprehensive Capital Analysis and Review (\u201cCCAR\u201d) and other stress testing processes to assess whether large BHCs, such as the Firm, have sufficient capital during periods of economic and financial stress, and have robust, forward-looking capital assessment and planning processes in place that address each BHC\u2019s unique risks to enable it to absorb losses under certain stress scenarios. Through CCAR, the Federal Reserve evaluates each BHC\u2019s capital adequacy and internal capital adequacy assessment processes (\u201cICAAP\u201d), as well as its plans to make capital distributions, such as dividend payments or stock repurchases. The Federal\nJPMorgan Chase & Co./2025 Form 10-K\n89\nManagement\u2019s discussion and analysis\nReserve uses results under the severely adverse scenario from its supervisory stress test to determine each firm\u2019s Stress Capital Buffer (\u201cSCB\u201d) requirement for the coming year.\nThe Firm's current SCB requirement is 2.5% and will remain in effect through September 30, 2027, based on the current rules. The Firm\u2019s Standardized CET1 capital ratio requirement, including regulatory buffers, was 11.5% as of December\u00a031, 2025. Refer to Key Regulatory Developments on page 91 for information related to proposed changes to the SCB requirement and stress testing framework.\nRefer to Capital actions on page 97 for information on actions taken by the Firm\u2019s Board of Directors.\nInternal Capital Adequacy Assessment Process\nAnnually, the Firm prepares the ICAAP, which informs the Board of Directors of the ongoing assessment of the Firm\u2019s processes for managing the sources and uses of capital as well as compliance with supervisory expectations for capital planning and capital adequacy. The Firm\u2019s ICAAP integrates stress testing protocols with capital planning. The Firm\u2019s Audit Committee is responsible for reviewing and approving the capital planning framework.\nStress testing assesses the potential impact of alternative economic and business scenarios on the Firm\u2019s earnings and capital. Economic scenarios, and the parameters underlying those scenarios, are defined centrally and applied uniformly across the businesses. These scenarios are articulated in terms of macroeconomic factors, which are key drivers of business results; global market shocks, which generate short-term but severe trading losses; and idiosyncratic operational risk events. The scenarios are intended to capture and stress key vulnerabilities and idiosyncratic risks facing the Firm. In addition to CCAR and other periodic stress testing, management also considers tailored stress scenarios and sensitivity analyses, as necessary.\nContingency Capital Plan\nThe Firm\u2019s Contingency Capital Plan establishes the capital management framework for the Firm and specifies the principles underlying the Firm\u2019s approach towards capital management in normal economic conditions and in stressed environments. The Contingency Capital Plan defines how the Firm calibrates its targeted capital levels and meets minimum capital requirements, monitors the ongoing appropriateness of planned capital distributions, and sets out the capital contingency actions that are expected to be taken or considered at various levels of capital depletion during a period of stress.\nRegulatory capital\nThe Federal Reserve establishes capital requirements, including well-capitalized standards, for the Firm as a consolidated financial holding company. The Office of the Comptroller of the Currency (\"OCC\") establishes similar minimum capital requirements and standards for the Firm\u2019s principal IDI subsidiary, JPMorgan Chase Bank, N.A. The U.S. capital requirements generally follow the Capital Accord of the Basel Committee, as amended from time to time.\nBasel III Overview\nThe capital rules under Basel III establish minimum capital ratios and overall capital adequacy standards for large and internationally active U.S. BHCs and banks, including the Firm and JPMorgan Chase Bank, N.A. The minimum amount of regulatory capital that must be held by BHCs and banks is determined by calculating RWA, which are on-balance sheet assets and off-balance sheet exposures, weighted according to risk. Under the rules currently in effect, two comprehensive approaches are prescribed for calculating Basel III RWA: a standardized approach (\u201cStandardized\u201d), and an advanced approach (\u201cAdvanced\u201d).\nFor each of these risk-based capital ratios, the capital adequacy of the Firm is evaluated against the lower of the Standardized or Advanced approaches compared to their respective regulatory capital ratio requirements.\nThe current Basel III rules establish capital requirements for calculating credit risk RWA and market risk RWA, and in the case of Advanced, operational risk RWA. Key differences in the calculation of credit risk RWA between the Standardized and Advanced approaches are that for Advanced, credit risk RWA is based on risk-sensitive approaches which largely rely on the use of internal credit models and parameters, whereas for Standardized, credit risk RWA is generally based on supervisory risk-weightings which vary primarily by counterparty type and asset class. The models used in Advanced are subject to periodic review and calibration, which can impact RWA results. Market risk RWA is generally calculated consistently between Standardized and Advanced. In addition to the RWA calculated under these approaches, the Firm may supplement such amounts to incorporate management judgment and feedback from its regulators.\nAs of December 31, 2025, the Advanced risk-based ratios became more binding on the Firm than the Standardized risk-based ratios, primarily reflecting the increase in Advanced RWA related to the Apple Card transaction and a reduction in the Firm\u2019s SCB requirement which only applies to the Standardized risk-based ratios.\n90\nJPMorgan Chase & Co./2025 Form 10-K\nAdditionally, Basel III requires that Advanced Approaches banking organizations, including the Firm, calculate their SLRs. Refer to page 96 for additional information on SLR.\nKey Regulatory Developments\nEnhanced SLR Final Rule\nIn November 2025, the Federal Reserve, the OCC and the FDIC issued the final rule amending the enhanced Supplementary Leverage Ratio (\u201ceSLR\u201d) requirements for Global Systemically Important Banks (\u201cGSIB\u201d) BHCs and their IDI subsidiaries by revising the current static leverage buffers at the BHC and IDI levels to 50% of the BHC\u2019s U.S. Method 1 GSIB Surcharge, which is referred to as the \u201ceSLR buffer.\u201d For IDI subsidiaries, the eSLR buffer is capped at 1%. In addition, the rule made corresponding adjustments to the leverage-based total loss-absorbing capacity (\u201cTLAC\u201d) and eligible long-term debt (\u201celigible LTD\u201d) requirements by replacing the former TLAC leverage buffer with the eSLR buffer and replacing the former static leverage-based eligible LTD requirement with a requirement of 2.5% plus the eSLR buffer. Further, the rule removes the eSLR threshold for an IDI subsidiary of a U.S. GSIB to be considered \u201cwell capitalized\u201d under the prompt corrective action framework and instead applies the eSLR as a capital buffer requirement. The final rule, with an effective date of April 1, 2026, allows for early adoption, which the Firm has elected, effective January 1, 2026.\nRefer to page 92 for information on the U.S. Method 1 GSIB Surcharge.\nEnhanced Transparency and Public Accountability of the Supervisory Stress Test\nIn October 2025, the Federal Reserve issued proposals to enhance the transparency and public accountability of its annual stress test. The proposals would require the Federal Reserve to publish for public comment comprehensive documentation concerning the supervisory stress test models and annual stress test scenarios, including the scenarios for the upcoming 2026 stress test. The proposals also introduce an enhanced disclosure process under which material changes to stress test models and scenarios would be subject to public comment prior to implementation. Based on the Federal Reserve\u2019s analysis, the proposed changes to the stress test models and scenarios are not expected to change materially the SCB for firms, such as JPMorganChase, that are subject to the supervisory stress test. In February 2026, the Federal Reserve released the final 2026 supervisory stress test scenarios, while announcing that SCB requirements for large banks, including the Firm, will remain at current levels through September 30, 2027 with new requirements to be calculated in 2027 based on revised models that incorporate public feedback.\nSCB Volatility Reduction\nIn April 2025, the Federal Reserve proposed changes to the calculation of the SCB for large BHCs, including the Firm. The proposal aims to reduce SCB volatility by using the average of supervisory stress results from the previous two annual stress tests to calculate the SCB. The proposal would also modify the annual effective date of the SCB from October 1 to January 1 and make targeted changes to reporting requirements in order to streamline data collection.\nU.S. Basel III Finalization\nIn July 2023, the Federal Reserve, the OCC and the FDIC released a proposal to amend the risk-based capital framework, entitled \"Regulatory capital rule: Amendments applicable to large banking organizations and to banking organizations with significant trading activity\", which is referred to in this Form 10-K as the \"U.S. Basel III proposal.\" Under this proposal, changes to the framework would include replacement of the Advanced approach with an expanded risk-based approach for the calculation of RWA. In addition, the stress capital buffer requirement would be applicable to both the expanded risk-based approach and the Standardized approach.\nGSIB Surcharge and TLAC and Eligible LTD Requirements\nIn July 2023, the Federal Reserve released a proposal to amend the calculation of the GSIB surcharge. Under the proposal, the annual GSIB surcharge would be based on an average of the quarterly surcharge calculations throughout the calendar year, with daily averaging required for certain measures. The proposal would also reduce surcharge increments from 50 bps to 10 bps and includes other technical amendments to the \u201cMethod 2\u201d calculation. The proposed changes would revise risk-based capital requirements for the Firm and other U.S. GSIBs. Refer to Risk-based Capital Regulatory Requirements on page 92 for further information on the GSIB surcharge.\nAdditionally, in August 2023, the Federal Reserve, the FDIC and the OCC released a proposal to expand the eligible long-term debt (\"eligible LTD\") and clean holding company requirements under the existing total loss-absorbing capacity (\"TLAC\") rule to apply to non-GSIB banks with $100 billion or more in total consolidated assets. The proposal would also reduce the amount of LTD with remaining maturities of less than two years that count towards a U.S. GSIB's TLAC requirement and expand the existing capital deduction framework for LTD issued by GSIBs to include LTD issued by non-GSIB banks subject to the LTD requirements.\nFinalization of the above proposals, including the required implementation dates, is uncertain. The Firm continues to monitor developments and potential impacts.\nJPMorgan Chase & Co./2025 Form 10-K\n91\nManagement\u2019s discussion and analysis\nRisk-based Capital Regulatory Requirements\nThe following chart presents the CET1 capital regulatory ratio requirements for the Firm under the Basel III rules currently in effect.\nAll banking institutions are currently required to have a minimum CET1 capital ratio of 4.5% of risk-weighted assets.\nCertain banking organizations, including the Firm, are required to hold additional levels of capital to serve as a \u201ccapital conservation buffer.\u201d The capital conservation buffer incorporates a GSIB surcharge, a discretionary countercyclical capital buffer and a fixed capital conservation buffer of 2.5% for Advanced regulatory capital requirements, as well as a variable SCB requirement, floored at 2.5%, for Standardized regulatory capital requirements.\nUnder the Federal Reserve\u2019s GSIB rule, the Firm is required to assess its GSIB surcharge on an annual basis under two separately prescribed methods based on data for the previous fiscal year-end, and is subject to the higher of the two. \u201cMethod 1\u201d reflects the GSIB surcharge as prescribed by the Basel Committee\u2019s assessment methodology, and is calculated across five criteria: size, cross-jurisdictional activity, interconnectedness, complexity and substitutability. \u201cMethod 2\u201d modifies the Method 1 requirements to include a measure of short-term wholesale funding in place of substitutability, and introduces a GSIB score \u201cmultiplication factor.\u201d\nThe following table presents the Firm\u2019s effective GSIB surcharge for the years ended December\u00a031, 2025 and 2024. For 2026, the Firm\u2019s effective regulatory minimum GSIB surcharge calculated under both Method 1 and Method 2 remains unchanged at 2.5% and 4.5%, respectively.\n2025\n2024\nMethod 1\n2.5\n\n%\n2.5\n%\nMethod 2\n4.5\n\n%\n4.5\n%\nThe U.S. federal regulatory capital standards include a framework for setting a discretionary countercyclical capital buffer taking into account the macro financial environment in which large, internationally active banks function. As of December 31, 2025, the U.S. countercyclical capital buffer remained at 0%. The Federal Reserve will continue to review the buffer at least annually. The buffer can be increased if the Federal Reserve, the FDIC and the OCC determine that systemic risks are meaningfully above normal and can be calibrated up to an additional 2.5% of RWA subject to a 12-month implementation period.\nFailure to maintain regulatory capital equal to or in excess of the risk-based regulatory capital minimum plus the capital conservation buffer (inclusive of the GSIB surcharge) and any countercyclical buffer will result in limitations to the amount of capital that the Firm may distribute, such as through dividends and common share repurchases, as well as on discretionary bonus payments for certain executive officers.\n92\nJPMorgan Chase & Co./2025 Form 10-K\nTotal Loss-Absorbing Capacity\nThe Federal Reserve\u2019s TLAC rule requires the U.S. GSIB top-tier holding companies, including the Firm, to maintain minimum levels of external TLAC and eligible LTD. These requirements were updated in the eSLR final rule which the Firm has elected to early adopt effective January 1, 2026. Refer to Key Regulatory Developments on page 91 for additional information related to the eSLR final rule.\nRefer to page 98 for additional information related to TLAC.\nLeverage-based Capital Regulatory Requirements\nSupplementary leverage ratio\nBanking organizations subject to the Advanced approach are currently required to have a minimum SLR of 3.0%. Certain banking organizations, including the Firm, are also required to hold an additional 2.0% leverage buffer. The SLR is defined as Tier 1 capital under Basel III divided by the Firm\u2019s total leverage exposure. Total leverage exposure is calculated by taking the Firm\u2019s total average on-balance sheet assets, less amounts permitted to be deducted for Tier 1 capital, and adding certain off-balance sheet exposures, as defined in regulatory capital rules. These requirements were updated in the eSLR final rule which the Firm has elected to early adopt effective January 1, 2026. Refer to Key Regulatory Developments on page 91 for additional information related to the eSLR final rule.\nRefer to page 96 for additional information related to SLR.\nFailure to maintain an SLR equal to or greater than the regulatory requirement will result in limitations on the amount of capital that the Firm may distribute such as through dividends and common share repurchases, as well as on discretionary bonus payments for certain executive officers.\nOther regulatory capital\nIn addition to meeting the capital ratio requirements of Basel III, the Firm and its principal IDI subsidiary, JPMorgan Chase Bank, N.A., must also maintain minimum capital and leverage ratios in order to be \u201cwell-capitalized\u201d under the regulations issued by the Federal Reserve and the Prompt Corrective Action requirements of the FDIC Improvement Act, respectively. Refer to Note 27 for additional information.\nAdditional information regarding the Firm\u2019s capital ratios, as well as the U.S. federal regulatory capital standards to which the Firm is subject, is presented in Note 27. Refer to the Firm\u2019s Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm\u2019s website, for further information on the Firm\u2019s current capital measures.\nJPMorgan Chase & Co./2025 Form 10-K\n93\nManagement\u2019s discussion and analysis\nSelected capital and RWA data\nThe following tables present the Firm\u2019s risk-based capital metrics under both the Standardized and Advanced approaches and leverage-based capital metrics. Refer to Note 27 for JPMorgan Chase Bank, N.A.\u2019s risk-based and leverage-based capital metrics. First Republic Bank was not subject to Advanced approach regulatory capital requirements. As a result, for certain exposures associated with the First Republic acquisition, Advanced RWA and any impact on Advanced Total capital is calculated under the Standardized approach as permitted by the transition provisions in the U.S. capital rules. Refer to Note 34 for additional information on the First Republic acquisition.\nStandardized\nAdvanced\n(in millions, except ratios)\nDecember\u00a031, 2025\nDecember\u00a031, 2024\nCapital ratio requirements\n(d)\nDecember\u00a031, 2025\nDecember\u00a031, 2024\nCapital ratio requirements\n(d)\nRisk-based capital metrics:\n(a)\nCET1 capital\n$\n288,469\n\n$\n275,513\n$\n288,469\n\n$\n275,513\nTier 1 capital\n307,630\n\n294,881\n307,630\n\n294,881\nTotal capital\n343,843\n\n325,589\n328,962\n\n(e)\n311,898\n(e)\nRisk-weighted assets\n1,981,692\n\n(b)\n1,757,460\n2,045,249\n\n(b)(e)\n1,740,429\n(e)\nCET1 capital ratio\n14.6\n\n%\n(c)\n15.7\n%\n11.5\n\n%\n14.1\n\n%\n(c)\n15.8\n%\n11.5\n\n%\nTier 1 capital ratio\n15.5\n\n(c)\n16.8\n13.0\n\n15.0\n\n(c)\n16.9\n13.0\n\nTotal capital ratio\n17.4\n\n(c)\n18.5\n15.0\n\n16.1\n\n(c)\n17.9\n15.0\n\n(a)\nAs of January 1, 2025, the benefit from the CECL capital transition provision had been fully phased out. For the year ended December\u00a031, 2024, CET1 capital reflected a $720 million benefit. Refer to Note 27 for additional information.\n(b)\nIncludes approximately $23 billion under the Standardized approach and approximately $110 billion under the Advanced approach related to the Apple Card transaction. Advanced RWA is expected to reduce to approximately $30 billion once the necessary modeling steps are completed, which is expected in the near term.\n(c)\nIncludes decreases of approximately 25 basis points under the Standardized approach and approximately 90 basis points under the Advanced approach related to the Apple Card transaction. The impact under the Advanced approach is expected to reduce to approximately 30 basis points once the necessary modeling steps are completed, which is expected in the near term.\n(d)\nRepresents minimum requirements and regulatory buffers applicable to the Firm for the year ended December\u00a031, 2025. For the year ended December\u00a031, 2024, the Standardized CET1, Tier 1, and Total capital ratio requirements applicable to the Firm were 12.3%, 13.8%, and 15.8%, respectively; the Advanced CET1, Tier 1, and Total capital ratio requirements applicable to the Firm were 11.5%, 13.0%, and 15.0%, respectively. Refer to Note 27 for additional information.\n(e)\nIncludes the impacts of certain assets associated with First Republic to which the Standardized approach has been applied as permitted by the transition provisions in the U.S. capital rules.\nThree months ended\n(in millions, except ratios)\nDecember\u00a031, 2025\nDecember\u00a031, 2024\nCapital ratio requirements\n(c)\nLeverage-based capital metrics:\n(a)\nAdjusted average assets\n(b)\n$\n4,472,394\n\n$\n4,070,499\nTier 1 leverage ratio\n6.9\n\n%\n7.2\n%\n4.0\n\n%\nTotal leverage exposure\n$\n5,302,001\n\n$\n4,837,568\nSLR\n5.8\n\n%\n6.1\n%\n5.0\n\n%\n(a)\nAs of January 1, 2025, the benefit from the CECL capital transition provision had been fully phased out. The capital metrics for the year ended December\u00a031, 2024 reflected the CECL capital transition provisions. Refer to Note 27 for additional information.\n(b)\nAdjusted average assets, for purposes of calculating the leverage ratios, includes quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill (inclusive of estimated equity method goodwill) and other intangible assets.\n(c)\nRepresents minimum requirements and regulatory buffers applicable to the Firm. Refer to Note 27 for additional information.\n94\nJPMorgan Chase & Co./2025 Form 10-K\nCapital components\nThe following table presents reconciliations of total stockholders\u2019 equity to CET1 capital, Tier 1 capital and Total capital as of December\u00a031, 2025 and 2024.\n(in millions)\nDecember 31,\n2025\nDecember 31,\n2024\nTotal stockholders\u2019 equity\n$\n362,438\n\n$\n344,758\nLess: Preferred stock\n20,045\n20,050\nCommon stockholders\u2019 equity\n342,393\n\n324,708\nAdd:\nCertain deferred tax liabilities\n(a)\n2,916\n2,943\nOther CET1 capital adjustments\n(b)\n(198)\n4,499\nLess:\nGoodwill\n(c)\n54,082\n53,763\nOther intangible assets\n2,560\n2,874\nStandardized/Advanced CET1 capital\n288,469\n\n275,513\nAdd: Preferred stock\n20,045\n20,050\nLess: Other Tier 1 adjustments\n884\n682\nStandardized/Advanced Tier 1 capital\n$\n307,630\n\n$\n294,881\nLong-term debt and other instruments qualifying as Tier 2 capital\n$\n13,539\n$\n10,312\nQualifying allowance for credit losses\n(d)\n23,733\n20,992\nOther\n(1,059)\n(596)\nStandardized Tier 2 capital\n$\n36,213\n\n$\n30,708\nStandardized Total capital\n$\n343,843\n\n$\n325,589\nAdjustment in qualifying allowance for credit losses for Advanced Tier 2 capital\n(e)(f)\n(14,881)\n(13,691)\nAdvanced Tier 2 capital\n$\n21,332\n\n$\n17,017\nAdvanced Total capital\n$\n328,962\n\n$\n311,898\n(a)\nRepresents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating CET1 capital.\n(b)\nAs of December\u00a031, 2025 and 2024, included a net reduction for certain deferred tax assets related to tax attribute carryforwards of $1.8 billion and $125 million, respectively, and a net benefit associated with cash flow hedges and debit valuation adjustments (\"DVA\") related to structured notes recorded in AOCI of $2.6 billion and $5.2 billion, respectively. As of January 1, 2025, the benefit from the CECL capital transition provision had been fully phased out. The year ended December\u00a031, 2024 included benefit from the CECL capital transitions of $720 million.\n(c)\nGoodwill deducted from capital includes goodwill associated with equity method investments in nonconsolidated financial institutions based on regulatory requirements. Refer to page 132 for additional information on principal investment risk.\n(d)\nRepresents the allowance for credit losses eligible for inclusion in Tier 2 capital up to 1.25% of credit risk RWA. As of January 1, 2025, the benefit from the CECL capital transition provision had been fully phased out. The year ended December\u00a031, 2024 included the impact of the CECL capital transition provision with any excess deducted from RWA. Refer to Note 27 for additional information on the CECL capital transition.\n(e)\nRepresents an adjustment to qualifying allowance for credit losses for the excess of eligible credit reserves over expected credit losses up to 0.6% of credit risk RWA. As of January 1, 2025, the benefit from the CECL capital transition provision had been fully phased out. The year ended December\u00a031, 2024 included the impact of the CECL capital transition provision with any excess deducted from RWA.\n(f)\nAs of December\u00a031, 2025 and 2024, included an incremental $468 million and $541 million allowance for credit losses, respectively, on certain assets associated with First Republic to which the Standardized approach has been applied, as permitted by the transition provisions in the U.S. capital rules.\nCapital rollforward\nThe following table presents the changes in CET1 capital, Tier 1 capital and Tier 2 capital for the year ended December\u00a031, 2025.\nYear ended December 31, (in millions)\n2025\nStandardized/Advanced CET1 capital at December\u00a031, 2024\n$\n275,513\nNet income applicable to common equity\n55,949\nDividends declared on common stock\n(16,060)\nNet purchase of treasury stock\n(30,573)\nChanges in additional paid-in capital\n203\nChanges related to AOCI applicable to capital:\nUnrealized gains/(losses) on investment securities\n3,569\nTranslation adjustments, net of hedges\n(a)\n1,339\nFair value hedges\n64\nDefined benefit pension and other postretirement employee benefit (\u201cOPEB\u201d) plans\n579\nChanges related to other CET1 capital adjustments\n(b)\n(2,114)\nChange in Standardized/Advanced CET1 capital\n12,956\nStandardized/Advanced CET1 capital at December\u00a031, 2025\n$\n288,469\n\nStandardized/Advanced Tier 1 capital at December\u00a031, 2024\n$\n294,881\nChange in CET1 capital\n(b)\n12,956\nNet redemptions of noncumulative perpetual preferred stock\n(5)\nOther\n(202)\nChange in Standardized/Advanced Tier 1 capital\n12,749\nStandardized/Advanced Tier 1 capital at December\u00a031, 2025\n$\n307,630\n\nStandardized Tier 2 capital at December\u00a031, 2024\n$\n30,708\nChange in long-term debt and other instruments qualifying as Tier 2\n(c)\n3,227\nChange in qualifying allowance for credit losses\n(b)\n2,741\nOther\n(463)\nChange in Standardized Tier 2 capital\n5,505\nStandardized Tier 2 capital at December\u00a031, 2025\n$\n36,213\n\nStandardized Total capital at December\u00a031, 2025\n$\n343,843\n\nAdvanced Tier 2 capital at December\u00a031, 2024\n$\n17,017\nChange in long-term debt and other instruments qualifying as Tier 2\n(c)\n3,227\nChange in qualifying allowance for credit losses\n(b)(d)\n1,551\nOther\n(463)\nChange in Advanced Tier 2 capital\n4,315\nAdvanced Tier 2 capital at December\u00a031, 2025\n$\n21,332\n\nAdvanced Total capital at December\u00a031, 2025\n$\n328,962\n\n(a)\nIncludes foreign currency translation adjustments and the impact of related derivatives.\n(b)\nReflects the final phase out of the CECL benefit as well as deductions for certain deferred tax assets related to tax attribute carryforwards. Refer to Note 27 for additional information on the CECL capital transition.\n(c)\nIncludes issuance of $4.0 billion of subordinated notes due 2036. Refer to Long-term funding on page 106 and Note 20 for additional information on the Firm\u2019s subordinated debt.\n(d)\nAs of December 31, 2025 and 2024, included an incremental $468 million and $541 million allowance for credit losses, respectively, on certain assets associated with First Republic to which the Standardized approach has been applied, as permitted by the transition provisions in the U.S. capital rules.\n\nJPMorgan Chase & Co./2025 Form 10-K\n95\nManagement\u2019s discussion and analysis\nRWA rollforward\nThe following table presents changes in the components of RWA under Standardized and Advanced approaches for the year ended December\u00a031, 2025. The amounts in the rollforward categories are estimates, based on the predominant driver of the change.\nStandardized\nAdvanced\nYear ended December 31, 2025\n(in millions)\nCredit risk RWA\n(c)\nMarket risk RWA\nTotal RWA\nCredit risk RWA\n(c)(d)\nMarket risk RWA\nOperational risk\nRWA\nTotal RWA\nDecember 31, 2024\n$\n1,672,763\n$\n84,697\n$\n1,757,460\n\n$\n1,218,005\n$\n85,132\n$\n437,292\n$\n1,740,429\n\nModel & data changes\n(a)\n(3,505)\n(4,128)\n(7,633)\n(2,862)\n(4,128)\n\u2014\n(6,990)\nMovement in portfolio levels\n(b)\n220,151\n11,714\n231,865\n\n278,662\n11,994\n21,154\n311,810\n\nChanges in RWA\n216,646\n7,586\n224,232\n\n275,800\n7,866\n21,154\n304,820\n\nDecember 31, 2025\n$\n1,889,409\n\n$\n92,283\n\n$\n1,981,692\n\n$\n1,493,805\n\n$\n92,998\n\n$\n458,446\n\n$\n2,045,249\n\n(a)\nModel & data changes refer to material movements in levels of RWA as a result of revised methodologies and/or treatment per regulatory guidance (exclusive of rule changes).\n(b)\nMovement in portfolio levels (inclusive of rule changes) refers to: for Credit risk RWA, changes in book size, including the impact of the Apple Card transaction, changes in composition and credit quality, market movements, and deductions for excess eligible allowances for credit losses not eligible for inclusion in Tier 2 capital; for Market risk RWA, changes in position and market movements; and for Operational risk RWA, updates to cumulative losses, macroeconomic model inputs, and other model parameters.\n(c)\nAs of December 31, 2025 and 2024, the Standardized Credit risk RWA included wholesale and retail off balance-sheet RWA of $268.5 billion and $208.0 billion, respectively; and the Advanced Credit risk RWA included wholesale and retail off balance-sheet RWA of $223.0 billion and $192.1 billion, respectively.\n(d)\nAs of December\u00a031, 2025 and 2024, Credit risk RWA reflected approximately $37.4 billion and $43.3 billion, respectively, of RWA calculated under the Standardized approach for certain assets associated with First Republic as permitted by the transition provisions in the U.S. capital rules.\nRefer to the Firm\u2019s Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm\u2019s website, for further information on Credit risk RWA, Market risk RWA and Operational risk RWA.\nSupplementary leverage ratio\nThe following table presents the components of the Firm\u2019s SLR.\nThree months ended\n(in millions, except ratio)\nDecember 31,\n2025\nDecember 31,\n2024\nTier 1 capital\n$\n307,630\n\n$\n294,881\nTotal average assets\n4,529,418\n4,125,167\nLess: Regulatory capital adjustments\n(a)\n57,024\n54,668\nTotal adjusted average assets\n(b)\n4,472,394\n4,070,499\nAdd: Off-balance sheet exposures\n(c)\n829,607\n767,069\nTotal leverage exposure\n$\n5,302,001\n\n$\n4,837,568\nSLR\n5.8\n\n%\n6.1\n%\n(a)\nFor purposes of calculating the SLR, includes quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill (inclusive of estimated equity method goodwill) and other intangible assets. As of January 1, 2025, the benefit from the CECL capital transition provision had been fully phased out. The year ended December\u00a031, 2024 included adjustments for the CECL capital transition provisions. Refer to Note 27 for additional information on the CECL capital transition.\n(b)\nAdjusted average assets used for the calculation of Tier 1 leverage ratio.\n(c)\nOff-balance sheet exposures are calculated as the average of the three month-end spot balances on applicable regulatory exposures during the reporting quarter. Refer to the Firm\u2019s Pillar 3 Regulatory Capital Disclosures reports for additional information.\nLine of business and Corporate equity\nEach LOB and Corporate is allocated capital by taking into consideration a variety of factors including capital levels of similarly rated peers and applicable regulatory capital requirements. ROE is measured and\ninternal targets for expected returns are established as key measures of an LOB\u2019s performance.\nThe Firm\u2019s current equity allocation methodology incorporates Standardized RWA and the GSIB surcharge, both under rules currently in effect, as well as a simulation of capital depletion in a severe stress environment. At least annually, the assumptions, judgments and methodologies used to allocate capital are reassessed and, as a result, the capital allocated to the LOBs and Corporate may change.\u00a0As of January 1, 2026, changes to the Firm\u2019s capital allocations are primarily a result of updates to the Firm\u2019s current capital requirements and changes in RWA for each LOB under rules currently in effect. Any capital that the Firm has accumulated in excess of these current requirements, including the capital required to meet the potential increased requirements of the U.S. Basel III proposal, has been retained in Corporate in addition to its allocated balance.\nThe following table presents the capital allocated to each LOB and Corporate.\nDecember 31,\n(in billions)\nJanuary 1,\n\u00a02026\n2025\n2024\nConsumer & Community Banking\n$\n61.5\n\n$\n56.0\n$\n54.5\nCommercial & Investment Bank\n166.5\n\n149.5\n132.0\nAsset & Wealth Management\n16.0\n\n16.0\n15.5\nCorporate\n98.4\n\n120.9\n122.7\nTotal common stockholders\u2019 equity\n$\n342.4\n\n$\n342.4\n$\n324.7\n96\nJPMorgan Chase & Co./2025 Form 10-K\nCapital actions\nCommon stock dividends\nThe Firm\u2019s common stock dividends are planned as part of the Capital Management governance framework in line with the Firm\u2019s capital management objectives.\nOn December 9, 2025, the Firm announced that its Board of Directors had declared a quarterly common stock dividend of $1.50 per share, payable on January 31, 2026. The Firm\u2019s dividends are subject to approval by the Board of Directors on a quarterly basis.\nRefer to Note 21 and Note 26 for information regarding dividend restrictions.\nThe following table shows the common dividend payout ratio based on net income applicable to common equity.\nYear ended December 31,\n2025\n2024\n2023\nCommon dividend payout ratio\n29\n\n%\n24\n%\n25\n%\nCommon stock repurchases\nOn July 1, 2025, the Firm announced that its Board of Directors had authorized a new $50\u00a0billion common share repurchase program, effective July 1, 2025. Through June 30, 2025, the Firm was authorized to purchase up to $30\u00a0billion of common shares under its previously-approved common share repurchase program that was announced on June 28, 2024.\nThe following table sets forth the Firm\u2019s repurchases of common stock for the years ended December\u00a031, 2025, 2024 and 2023.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nTotal number of shares of common stock repurchased\n114.4\n\n91.7\n69.5\nAggregate purchase price of common stock repurchases\n(a)\n$\n31,640\n\n$\n18,841\n$\n9,898\n(a)\nExcludes excise tax and commissions.\nThe Board of Directors\u2019 authorization to repurchase common shares is utilized at management\u2019s discretion. The common share repurchase program approved by the Board of Directors does not establish specific price targets or timetables. Management determines the amount and timing of common share repurchases based on various factors, including market conditions; legal and regulatory considerations affecting the amount and timing of repurchase activity; the Firm\u2019s capital position (taking into account goodwill and intangibles); organic capital generation; current and proposed future capital requirements; and other investment opportunities. The amount of common shares that the Firm repurchases in any period may be substantially more or less than the amounts estimated or actually repurchased in prior periods, reflecting the dynamic nature of the decision-making process. The Firm\u2019s common share repurchases may be suspended by management at any time; and may be executed through open market purchases or privately negotiated transactions, or utilizing Rule 10b5-1 plans, which are written trading plans that the Firm may enter into from time to time under Rule 10b5-1 of the Securities Exchange Act of 1934 and which allow the Firm to repurchase its common shares during periods when it may otherwise not be repurchasing common shares \u2014 for example, during internal trading blackout periods.\nRefer to Capital planning and stress testing on pages 89\u201390 for additional information.\nRefer to Part II, Item 5: Market for Registrant\u2019s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities on page 33\nof this\n2025\n Form 10-K\nfor additional information regarding repurchases of the Firm\u2019s equity securities.\nPreferred stock\n\nPreferred stock dividends were $1.1 billion, $1.3 billion, and $1.5 billion for the years ended December\u00a031, 2025, 2024, and 2023, respectively.\nDuring the year ended December\u00a031, 2025, the Firm issued and redeemed certain series of non-cumulative preferred stock. Refer to Note 21 for additional information on the Firm\u2019s preferred stock, including the issuance and redemption of preferred stock.\nJPMorgan Chase & Co./2025 Form 10-K\n97\nManagement\u2019s discussion and analysis\nOther capital requirements\nTotal Loss-Absorbing Capacity\nThe Federal Reserve\u2019s TLAC rule requires the U.S. GSIB top-tier holding companies, including the Firm, to maintain minimum levels of external TLAC and eligible long-term debt.\nThe external TLAC requirements and the minimum level of eligible long-term debt requirements for the year ended December 31, 2025 are shown below:\n(a)\nRWA is the greater of Standardized and Advanced compared to their respective regulatory capital ratio requirements.\nFailure to maintain TLAC equal to or in excess of the regulatory minimum plus applicable buffers will result in limitations on the amount of capital that the Firm may distribute, such as through dividends and common share repurchases, as well as on discretionary bonus payments for certain executive officers.\nThe following table presents the eligible external TLAC and eligible LTD amounts, as well as a representation of these amounts as a percentage of the Firm\u2019s total RWA and total leverage exposure. As of January 1, 2025, the benefit from the CECL capital transition provision had been fully phased out. The year ended December 31, 2024 included the impact of the CECL capital transition provisions.\nDecember 31, 2025\nDecember\u00a031, 2024\n(in billions, except ratio)\nExternal TLAC\nLTD\nExternal TLAC\nLTD\nTotal eligible amount\n$\n563.7\n\n$\n246.0\n\n$\n546.6\n$\n236.8\n% of RWA\n27.6\n\n%\n12.0\n\n%\n31.1\n%\n13.5\n%\nRegulatory requirements\n23.0\n\n10.5\n\n23.0\n10.5\nSurplus/(shortfall)\n$\n93.3\n\n$\n31.2\n\n$\n142.3\n$\n52.3\n% of total leverage exposure\n10.6\n\n%\n4.6\n\n%\n11.3\n%\n4.9\n%\nRegulatory requirements\n9.5\n\n4.5\n\n9.5\n4.5\nSurplus/(shortfall)\n$\n60.1\n\n$\n7.4\n\n$\n87.0\n$\n19.2\nRefer to Liquidity Risk Management on pages 100\u2013107 for further information on long-term debt issued by the Parent Company.\nRefer to Part I, Item 1A: Risk Factors on pages 9\u201331\nof this\n2025\n Form 10-K\nfor information on the financial consequences to holders of the Firm\u2019s debt and equity securities in a resolution scenario.\n98\nJPMorgan Chase & Co./2025 Form 10-K\nU.S. broker-dealer regulatory capital\nJ.P. Morgan Securities\nJPMorganChase\u2019s principal U.S. broker-dealer subsidiary is J.P. Morgan Securities. J.P. Morgan Securities is subject to the regulatory capital requirements of Rule 15c3-1 under the Securities Exchange Act of 1934 (the \u201cNet Capital Rule\u201d). J.P. Morgan Securities is also registered as a futures commission merchant and is subject to regulatory capital requirements, including those imposed by the SEC, the Commodity Futures Trading Commission (\u201cCFTC\u201d), the Financial Industry Regulatory Authority (\u201cFINRA\u201d) and the National Futures Association (\u201cNFA\u201d).\nJ.P. Morgan Securities has elected to compute its minimum net capital requirements in accordance with the \u201cAlternative Net Capital Requirements\u201d of the Net Capital Rule.\nThe following table presents J.P. Morgan\u00a0Securities\u2019 net capital.\nDecember 31, 2025\n(in millions)\nActual\nMinimum\nNet capital\n$\n27,196\n\n$\n6,559\n\nJ.P. Morgan Securities is registered with the SEC as a security-based swap dealer and with the CFTC as a swap dealer. As a result of additional SEC and CFTC capital and financial reporting requirements for security-based swap dealers and swap dealers, J.P. Morgan Securities is subject to alternative minimum net capital requirements and required to hold \u201ctentative net capital\u201d in excess of $5.0 billion. J.P. Morgan Securities is also required to notify the SEC and CFTC in the event that its tentative net capital is less than $6.0\u00a0billion. Tentative net capital is net capital before deducting market and credit risk charges as defined by the Net Capital Rule. As of December\u00a031, 2025, J.P. Morgan Securities maintained tentative net capital in excess of the minimum and notification requirements.\nNon-U.S. subsidiary regulatory capital\nJ.P. Morgan Securities plc\nJ.P. Morgan Securities plc is a wholly-owned subsidiary of JPMorgan Chase Bank, N.A.\u00a0and has authority to engage in banking,\u00a0investment banking and broker-dealer activities. J.P.\u00a0Morgan\u00a0Securities\u00a0plc is jointly regulated in the U.K. by the Prudential Regulation Authority (\u201cPRA\u201d) and the Financial Conduct Authority (\u201cFCA\u201d). J.P. Morgan Securities plc is subject to the Capital Requirements Regulation (\u201cCRR\u201d), as adopted and amended in the U.K., and the capital rules in the PRA Rulebook. These requirements collectively represent the U.K.\u2019s implementation of the Basel III standards. The PRA has announced that it intends to delay the U.K.\u2019s implementation of the final Basel III\nstandards until January 1, 2027, with a three-year transitional period for certain aspects.\nThe Bank of England requires that U.K. banks, including U.K. regulated subsidiaries of overseas groups, maintain minimum requirements for own funds and eligible liabilities (\u201cMREL\u201d). As of December\u00a031, 2025, J.P. Morgan Securities plc was compliant with its MREL requirements.\nThe following table presents J.P. Morgan\u00a0Securities plc\u2019s risk-based and leverage-based capital metrics.\nDecember 31, 2025\nRegulatory Minimum ratios\n(a)\n(in millions, except ratios)\nActual\nTotal capital\n$\n53,554\n\nCET1 capital ratio\n15.4\n\n%\n4.5\n\n%\nTier 1 capital ratio\n19.8\n\n6.0\n\nTotal capital ratio\n23.6\n\n8.0\n\nTier 1 leverage ratio\n5.9\n\n3.3\n\n(b)\n(a)\nRepresents minimum Pillar 1 requirements specified by the PRA. J.P. Morgan Securities plc's capital ratios as of December\u00a031, 2025 exceeded the minimum requirements, including the additional capital requirements specified by the PRA.\n(b)\nAt least 75% of the Tier 1 leverage ratio minimum must be met with CET1 capital.\nJ.P. Morgan SE\nJPMSE is a wholly-owned subsidiary of JPMorgan Chase Bank, N.A. and has authority to engage in banking, investment banking and markets activities. JPMSE is regulated by the European Central Bank (\u201cECB\u201d), the German Financial Supervisory Authority and the German Central Bank, as well as the local regulators in each of the countries in which it operates, and it is subject to EU capital requirements under Basel III. JPMSE is subject to the EU implementation of the final Basel III standards. Those standards became effective beginning on January 1, 2025, with the exception of market risk aspects for which the effective date is January 1, 2027.\nJPMSE is required by the EU Single Resolution Board to maintain MREL. As of December\u00a031, 2025, JPMSE was compliant with its MREL requirements.\nThe following table presents JPMSE\u2019s risk-based and leverage-based capital metrics.\nDecember 31, 2025\nRegulatory Minimum ratios\n(a)\n(in millions, except ratios)\nActual\nTotal capital\n$\n54,301\n\nCET1 capital ratio\n20.9\n\n%\n4.5\n\n%\nTier 1 capital ratio\n20.9\n\n6.0\n\nTotal capital ratio\n37.7\n\n8.0\n\nTier 1 leverage ratio\n6.4\n\n3.0\n\n(a)\nRepresents minimum Pillar 1 requirements specified by the EU CRR. J.P. Morgan SE\u2019s capital and leverage ratios as of December\u00a031, 2025 exceeded the minimum requirements, including the additional capital requirements specified by EU regulators.\nJPMorgan Chase & Co./2025 Form 10-K\n99\nManagement\u2019s discussion and analysis\nLIQUIDITY RISK MANAGEMENT\nLiquidity risk is the risk that the Firm will be unable to meet its cash and collateral needs as they arise or that it does not have the appropriate amount, composition and tenor of funding and liquidity to support its assets and liabilities.\nLiquidity risk management\nThe Firm has a Liquidity Risk Management (\u201cLRM\u201d) function whose primary objective is to provide independent oversight of liquidity risk across the Firm. Liquidity Risk Management\u2019s responsibilities include:\n\u2022\nDefining, monitoring and reporting liquidity risk metrics;\n\u2022\nIndependently establishing and monitoring limits and indicators, including liquidity risk appetite;\n\u2022\nDeveloping a process to classify, monitor and report limit breaches;\n\u2022\nPerforming an independent review of liquidity risk management processes to evaluate their adequacy and effectiveness;\n\u2022\nMonitoring and reporting internal Firmwide and legal entity liquidity stress tests, regulatory defined metrics, as well as liquidity positions, balance sheet variances and funding activities; and\n\u2022\nApproving or escalating for review new or updated liquidity stress assumptions.\nLiquidity management\nTreasury and CIO is responsible for liquidity management.\nThe primary objectives of the Firm\u2019s liquidity management are to:\n\u2022\nEnsure that the Firm\u2019s core businesses and material legal entities are able to operate in support of client needs and meet contractual and contingent financial obligations through normal economic cycles as well as during stress events, and\n\u2022\nManage an optimal funding mix and availability of liquidity sources.\nThe Firm addresses these objectives through:\n\u2022\nAnalyzing and understanding the liquidity characteristics of the assets and liabilities of the Firm, LOBs, legal entities, as well as currencies, taking into account legal, regulatory, and operational restrictions;\n\u2022\nDeveloping and maintaining internal liquidity stress testing assumptions;\n\u2022\nDefining and monitoring Firmwide and legal entity-specific liquidity strategies, policies, reporting and contingency funding plans;\n\u2022\nManaging liquidity within the Firm\u2019s approved limits and indicators, including liquidity risk appetite tolerances;\n\u2022\nManaging compliance with regulatory requirements related to funding and liquidity risk; and\n\u2022\nSetting FTP in accordance with underlying liquidity characteristics of balance sheet assets and liabilities as well as certain off-balance sheet items.\nAs part of the Firm\u2019s overall liquidity management strategy, the Firm manages liquidity and funding using a centralized, global approach designed to:\n\u2022\nOptimize liquidity sources and uses;\n\u2022\nMonitor exposures;\n\u2022\nIdentify constraints on the transfer of liquidity between the Firm\u2019s legal entities; and\n\u2022\nMaintain the appropriate amount of surplus liquidity at a Firmwide and legal entity level, where relevant.\nGovernance\nCommittees responsible for liquidity governance include the Firmwide ALCO, as well as regional ALCOs, the Treasurer Committee, and the CTC Risk Committee. In addition, the Board Risk Committee reviews and recommends to the Board of Directors, for approval, the Firm\u2019s liquidity risk tolerances, liquidity strategy, and liquidity policy. Refer to Firmwide Risk Management on pages 83\u201387 for further discussion of ALCO and other risk-related committees.\nInternal stress testing\nThe Firm conducts internal liquidity stress testing to identify liquidity risks and monitor liquidity positions at the Firm and its material legal entities under a variety of adverse scenarios, including scenarios analyzed as part of the Firm\u2019s resolution and recovery planning. Internal stress tests are produced on a daily basis, and other stress tests are performed in response to specific market events or concerns. Liquidity stress tests assume all of the Firm\u2019s contractual financial obligations are met and take into consideration:\n\u2022\nVarying levels of access to unsecured and secured funding markets;\n\u2022\nEstimated non-contractual and contingent cash outflows;\n\u2022\nCredit rating downgrades;\n\u2022\nCollateral haircuts; and\n\u2022\nPotential impediments to the availability and transferability of liquidity between jurisdictions and material legal entities such as regulatory, legal or other restrictions.\nLiquidity outflows are modeled across a range of time horizons and currency dimensions and contemplate both market and idiosyncratic stresses.\nResults of stress tests are considered in the formulation of the Firm\u2019s funding plan and assessment of its liquidity position. The Parent Company acts as a source of funding for the Firm through equity and\n100\nJPMorgan Chase & Co./2025 Form 10-K\nlong-term debt issuances, and its intermediate holding company, JPMorgan Chase Holdings LLC (the \u201cIHC\u201d), provides funding to support the ongoing operations of the Parent Company and its subsidiaries. The Firm manages liquidity at the Parent Company, the IHC, and operating subsidiaries at levels sufficient to comply with liquidity risk tolerances and minimum liquidity requirements, and to manage through periods of stress when access to normal funding sources may be disrupted.\nContingency funding plan\nThe Firm\u2019s Contingency Funding Plan (\u201cCFP\u201d) sets out the strategies for addressing and managing liquidity resource needs during a liquidity stress event and incorporates liquidity risk limits, indicators and risk appetite tolerances. The CFP also identifies the alternative contingent funding and liquidity resources available to the Firm and its legal entities in a period of stress.\nLCR and HQLA\nThe LCR rule requires that the Firm and JPMorgan Chase Bank, N.A. maintain an amount of eligible HQLA that is sufficient to meet their respective estimated total net cash outflows over a prospective 30 calendar-day period of significant stress. Eligible HQLA, for purposes of calculating the LCR, is the amount of unencumbered HQLA that satisfy certain operational considerations as defined in the LCR rule. HQLA primarily consist of cash and certain high-quality liquid securities as defined in the LCR rule.\nUnder the LCR rule, the amount of eligible HQLA held by JPMorgan Chase Bank, N.A. that is in excess of its stand-alone 100% minimum LCR requirement, and that is not transferable to non-bank affiliates, must be excluded from the Firm\u2019s reported eligible HQLA.\nEstimated net cash outflows are based on standardized stress outflow and inflow rates prescribed in the LCR rule, which are applied to the balances of the Firm\u2019s assets, sources of funds, and obligations. The LCR for both the Firm and JPMorgan Chase Bank, N.A. is required to be a minimum of 100%.\nThe following table summarizes the Firm and JPMorgan Chase Bank, N.A.\u2019s average LCR for the three months ended December\u00a031, 2025, September 30, 2025 and December\u00a031, 2024 based on the Firm\u2019s interpretation of the LCR framework.\nThree months ended\nAverage amount\n(in millions)\nDecember 31, 2025\nSeptember 30, 2025\nDecember 31, 2024\nJPMorgan Chase & Co.:\nHQLA\nEligible cash\n(a)\n$\n281,117\n\n$\n308,298\n$\n396,123\nEligible securities\n(b)(c)\n680,862\n\n638,020\n464,877\nTotal HQLA\n(d)\n$\n961,979\n\n$\n946,318\n$\n861,000\nNet cash outflows\n$\n868,500\n\n$\n858,157\n$\n763,648\nLCR\n111\n\n%\n110\n%\n113\n%\nNet excess eligible HQLA\n(d)\n$\n93,479\n\n$\n88,161\n$\n97,352\nJPMorgan Chase Bank, N.A.:\nLCR\n115\n\n%\n117\n%\n124\n%\nNet excess eligible HQLA\n$\n138,052\n\n$\n152,886\n$\n193,682\n(a)\nRepresents cash on deposit at central banks, including the Federal Reserve Banks.\n\n(b)\nEligible HQLA securities may be reported in securities borrowed or purchased under resale agreements, trading assets, or investment securities on the Firm\u2019s Consolidated balance sheets. For purposes of calculating the LCR, HQLA securities are included at fair value, which may differ from the accounting treatment under U.S. GAAP.\n(c)\nPredominantly U.S. Treasuries, U.S. GSE and government agency MBS, and sovereign bonds net of regulatory haircuts under the LCR rule.\n(d)\nExcludes average excess eligible HQLA at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates.\nThe Firm\u2019s average LCR for the three months ended December\u00a031, 2025 decreased, compared with the three months ended December\u00a031, 2024, primarily driven by repurchases of and dividends on common stock, predominantly offset by dividend payments from JPMorgan Chase Bank, N.A. to the Parent Company and activities in CIB Markets.\nJPMorgan Chase Bank, N.A.\u2019s average LCR for the three months ended December\u00a031, 2025 decreased, compared with the three months ended September 30, 2025, primarily due to higher lending levels, largely offset by higher deposits, higher market values of HQLA-eligible investment securities and long-term debt issuance.\nJPMorgan Chase Bank, N.A.\u2019s average LCR for the three months ended December\u00a031, 2025 decreased, compared with the three months ended December\u00a031, 2024, driven by higher lending levels and dividend payments to the Parent Company, largely offset by higher deposits and higher market values of HQLA-eligible investment securities.\nJPMorgan Chase & Co./2025 Form 10-K\n101\nManagement\u2019s discussion and analysis\nEach of the Firm and JPMorgan Chase Bank, N.A.'s average LCR may fluctuate from period to period due to changes in their respective eligible HQLA and estimated net cash outflows as a result of ongoing business activity and from the impacts of Federal Reserve actions as well as other factors. For a further discussion of the Firm\u2019s liquidity risk management, refer to the Firm\u2019s U.S. LCR Disclosure reports, which are available on the Firm\u2019s website.\nLiquidity sources\nIn addition to the assets reported in the Firm\u2019s eligible HQLA discussed above, the Firm had unencumbered marketable securities, such as equity and debt securities, that the Firm believes would be available to raise liquidity. This includes excess eligible HQLA securities at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates. The fair value of these securities was approximately $548 billion and $594 billion as of December\u00a031, 2025 and 2024, respectively, although the amount of liquidity that could be raised at any particular time would be dependent on prevailing market conditions. The decrease compared to December\u00a031, 2024 was driven by a decrease in excess eligible HQLA securities at JPMorgan Chase Bank, N.A., and reductions in unencumbered investment securities in Treasury and CIO.\nThe Firm had approximately $1.5 trillion and $1.4 trillion of available cash and securities as of December\u00a031, 2025 and 2024, respectively. For each respective period, the amount was comprised of eligible end-of-period HQLA, excluding the impact of regulatory haircuts, of approximately $915\u00a0billion and $834 billion, and unencumbered marketable securities with a fair value of approximately $548 billion and $594 billion.\nThe Firm also had available borrowing capacity at the Federal Home Loan Banks (\u201cFHLBs\u201d) and the discount window at the Federal Reserve Banks as a result of collateral pledged by the Firm to such banks of approximately $449 billion and $413 billion as of December\u00a031, 2025 and 2024, respectively. This borrowing capacity excludes the benefit of cash and securities reported in the Firm\u2019s eligible HQLA or other unencumbered securities that are currently pledged at the Federal Reserve Banks discount window and other central banks. Available borrowing capacity increased, compared to December\u00a031, 2024, due to a higher amount of commercial loans, credit card receivables, and mortgages pledged at Federal Reserve Banks and the FHLBs. Although available, the Firm does not view this borrowing capacity at the Federal Reserve Banks discount window and the other central banks as a primary source of liquidity.\nNSFR\nThe net stable funding ratio (\u201cNSFR\u201d) is a liquidity requirement for large banking organizations that is intended to measure the adequacy of \u201cavailable\u201d stable funding that is sufficient to meet their \u201crequired\u201d amounts of stable funding over a one-year horizon.\nFor the three months ended December\u00a031, 2025, both the Firm and JPMorgan Chase Bank, N.A. were compliant with the 100% minimum NSFR requirement, based on the Firm\u2019s interpretation of the final NSFR rule. Refer to the Firm's U.S. NSFR Disclosure report on the Firm\u2019s website for additional information.\n102\nJPMorgan Chase & Co./2025 Form 10-K\nFunding\nSources of funds\nManagement believes that the Firm\u2019s unsecured and secured funding capacity is sufficient to meet its on- and off-balance sheet obligations, which includes both short- and long-term cash requirements.\nThe Firm funds its global balance sheet through diverse sources of funding including deposits, secured and unsecured funding in the capital markets and stockholders\u2019 equity. Deposits are the primary funding source for JPMorgan Chase Bank, N.A. Additionally, JPMorgan Chase Bank, N.A. may access funding through short- or long-term secured borrowings, the issuance of unsecured long-term debt, or from\nborrowings from the IHC. The Firm\u2019s non-bank subsidiaries are primarily funded from long-term unsecured borrowings and short-term secured borrowings which are primarily securities loaned or sold under repurchase agreements. Excess funding is invested by Treasury and CIO in the Firm\u2019s investment securities portfolio or deployed in cash or other short-term liquid investments based on their interest rate and liquidity risk characteristics.\nRefer to Note 28 for additional information on off\u2013balance sheet obligations.\nDeposits\nThe table below summarizes, by LOB and Corporate, the period-end and average deposit balances as of and for the years ended December\u00a031, 2025 and 2024.\nAs of or for the year ended December 31,\nAverage\n(in millions)\n2025\n2024\n2025\n2024\nConsumer & Community Banking\n$\n1,072,792\n\n$\n1,056,652\n$\n1,057,232\n\n$\n1,064,215\nCommercial & Investment Bank\n1,193,338\n\n1,073,512\n1,174,581\n\n1,061,488\nAsset & Wealth Management\n257,316\n\n248,287\n245,248\n\n235,146\nCorporate\n35,874\n\n27,581\n29,504\n\n25,793\nTotal Firm\n$\n2,559,320\n\n$\n2,406,032\n$\n2,506,565\n\n$\n2,386,642\nThe Firm believes that deposits provide a stable source of funding and reduce the Firm\u2019s reliance on the wholesale funding markets. A significant portion of the Firm\u2019s deposits are consumer deposits and wholesale operating deposits, which are both considered to be stable sources of liquidity. Wholesale operating deposits are generally considered to be stable sources of liquidity because they are generated from clients that maintain operating service relationships with the Firm.\nThe Firm believes that average deposit balances are generally more representative of deposit trends than period-end deposit balances. However, during periods of market disruption, average deposit trends may be impacted.\nAverage deposits\n increased\n\nfor the year ended December\u00a031, 2025 compared to the year ended December\u00a031, 2024, reflecting the net impact of:\n\u2022\nan increase in CIB due to net inflows related to client-driven activities in Payments\n\nand Securities Services, partially offset by net maturities of structured notes in Markets,\n\u2022\nan increase in AWM primarily driven by growth in both new accounts and balances in existing accounts, including the impact of higher-yielding product offerings, and\n\u2022\na decrease in CCB primarily driven by increased customer spending, predominantly offset by new accounts.\nPeriod-end deposits\n increased from December 31, 2024, reflecting:\n\u2022\nan increase in CIB due to net inflows related to client-driven activities in Payments and Securities Services,\n\u2022\nan increase in CCB primarily driven by new accounts, predominantly offset by increased customer spending, and\n\u2022\nan increase in AWM primarily driven by growth in both new accounts and balances in existing accounts, including the impact of higher-yielding product offerings, largely offset by migration into other investment products.\nRefer to the Firm\u2019s Consolidated Balance Sheets Analysis and the Business Segment & Corporate Results on pages 55\u201357 and pages 62\u201382, respectively, for further information on deposit and liability balance trends. Refer to Note 3 for further information on structured notes.\nCertain deposits are covered by insurance protection that provides additional funding stability and results in a benefit to the LCR. Deposit insurance protection may be available to depositors in the countries in which the deposits are placed. For example, the FDIC provides deposit insurance protection for deposits placed in a U.S. depository institution. At December\u00a031, 2025 and 2024, Firmwide estimated uninsured deposits were $1,558.6 billion and $1,414.0 billion, respectively, primarily reflecting wholesale operating deposits.\nJPMorgan Chase & Co./2025 Form 10-K\n103\nManagement\u2019s discussion and analysis\nTotal uninsured deposits include time deposits. The table below presents an estimate of uninsured U.S. and non-U.S. time deposits, and their remaining maturities. The Firm\u2019s estimates of its uninsured U.S. time deposits are based on data that the Firm calculates periodically under applicable FDIC regulations. For purposes of this presentation, all non-U.S. time deposits are deemed to be uninsured.\n(in millions)\nDecember 31,\n2025\nDecember 31,\n2024\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nThree months or less\n$\n123,236\n\n$\n71,477\n\n$\n119,333\n$\n77,253\nOver three months but within 6 months\n14,381\n\n14,184\n\n11,040\n12,229\nOver six months but within 12 months\n4,004\n\n1,256\n\n7,056\n1,542\nOver 12 months\n664\n\n2,382\n\n823\n1,924\nTotal\n$\n142,285\n\n$\n89,299\n\n$\n138,252\n$\n92,948\nThe table below shows the deposit and loan balances, deposits as a percentage of total liabilities, and the loans-to-deposits ratios, as of December\u00a031, 2025 and 2024.\nAs of December 31,\n(in billions except ratios)\n2025\n2024\nDeposits\n$\n2,559.3\n\n$\n2,406.0\nDeposits as a % of total liabilities\n63\n\n%\n66\n%\nLoans\n$\n1,493.4\n\n$\n1,348.0\nLoans-to-deposits ratio\n58\n\n%\n56\n%\nThe following table provides a summary of the average balances and average interest rates of JPMorganChase\u2019s deposits for the years ended December\u00a031, 2025, 2024, and 2023.\nYear ended December 31,\nAverage balances\nAverage interest rates\n(in millions, except interest rates)\n2025\n2024\n2023\n2025\n2024\n2023\nU.S. offices\nNoninterest-bearing\n$\n572,014\n\n$\n611,734\n$\n635,791\nNA\nNA\nNA\nInterest-bearing\nDemand\n(a)\n321,145\n\n282,533\n279,725\n3.26\n\n%\n3.90\n%\n3.50\n%\nSavings\n(b)\n875,519\n\n800,964\n864,558\n1.41\n\n1.39\n1.10\nTime\n222,983\n\n223,503\n145,827\n3.96\n\n4.93\n4.74\nTotal interest-bearing deposits\n1,419,647\n\n1,307,000\n1,290,110\n2.23\n\n2.54\n2.03\nTotal deposits in U.S. offices\n1,991,661\n\n1,918,734\n1,925,901\n1.59\n\n1.73\n1.36\nNon-U.S. offices\nNoninterest-bearing\n32,169\n\n26,858\n24,747\nNA\nNA\nNA\nInterest-bearing\nDemand\n391,123\n\n346,179\n321,976\n2.34\n\n3.13\n2.71\nTime\n91,612\n\n94,871\n86,443\n4.73\n\n5.86\n5.82\nTotal interest-bearing deposits\n482,735\n\n441,050\n408,419\n2.79\n\n3.72\n3.37\nTotal deposits in non-U.S. offices\n514,904\n\n467,908\n433,166\n2.62\n\n3.50\n3.18\nTotal deposits\n$\n2,506,565\n\n$\n2,386,642\n$\n2,359,067\n1.80\n\n%\n2.08\n%\n1.70\n%\n(a)\nIncludes Negotiable Order of Withdrawal accounts, and certain trust accounts.\n(b)\nIncludes Money Market Deposit Accounts.\nRefer to Note 17 for additional information on deposits.\n104\nJPMorgan Chase & Co./2025 Form 10-K\nThe following table summarizes short-term and long-term funding, excluding deposits, as of December\u00a031, 2025 and 2024, and average balances for the years ended December\u00a031, 2025 and 2024. Refer to the Consolidated Balance Sheets Analysis on pages 55\u201357 and Note 11 for additional information.\nSources of funds (excluding deposits)\nAs of or for the year ended December 31,\nAverage\n(in millions)\n2025\n2024\n2025\n2024\nCommercial paper\n$\n12,111\n\n$\n14,932\n$\n12,274\n\n$\n11,398\nOther borrowed funds\n15,031\n\n13,018\n14,981\n\n12,040\nFederal funds purchased\n199\n\n567\n1,413\n\n1,547\nTotal short-term unsecured funding\n$\n27,341\n\n$\n28,517\n$\n28,668\n\n$\n24,985\nSecurities sold under agreements to repurchase\n(a)\n$\n433,161\n\n$\n291,500\n$\n516,262\n\n$\n357,144\nSecurities loaned\n(a)\n9,036\n\n4,768\n9,834\n\n5,129\nOther borrowed funds\n37,634\n\n24,943\n38,638\n\n25,504\nObligations of Firm-administered multi-seller conduits\n(b)\n18,174\n\n18,228\n17,764\n\n18,620\nTotal short-term secured funding\n$\n498,005\n\n$\n339,439\n$\n582,498\n\n$\n406,397\nSenior notes\n$\n210,571\n\n$\n203,639\n$\n209,346\n\n$\n199,908\nSubordinated debt\n20,101\n\n16,060\n17,943\n\n18,614\nStructured notes\n(c)\n130,621\n\n98,792\n113,362\n\n93,483\nTotal long-term unsecured funding\n$\n361,293\n\n$\n318,491\n$\n340,651\n\n$\n312,005\nCredit card securitization\n(b)\n$\n5,884\n\n$\n5,312\n$\n5,723\n\n$\n5,138\nFHLB advances\n18,159\n\n29,257\n22,929\n\n35,040\nPurchase Money Note\n(d)\n49,435\n\n49,207\n49,312\n\n49,090\nOther long-term secured funding\n(e)\n6,319\n\n4,463\n5,756\n\n4,676\nTotal long-term secured funding\n$\n79,797\n\n$\n88,239\n$\n83,720\n\n$\n93,944\nPreferred stock\n(f)\n$\n20,045\n\n$\n20,050\n$\n20,037\n\n$\n24,054\nCommon stockholders\u2019 equity\n(f)\n$\n342,393\n\n$\n324,708\n$\n332,754\n\n$\n312,370\n(a)\nPrimarily consists of short-term securities loaned or sold under agreements to repurchase.\n(b)\nIncluded in beneficial interests issued by consolidated variable interest entities on the Firm\u2019s Consolidated balance sheets.\n(c)\nIncludes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.\n(d)\nReflects the Purchase Money Note associated with the First Republic acquisition. Refer to Note 34 for additional information.\n(e)\nIncludes long-term structured notes that are secured.\n(f)\nRefer to Capital Risk Management on pages 89\u201399, Consolidated statements of changes in stockholders\u2019 equity on page 168, Note 21 and Note 22 for additional information on preferred stock and common stockholders\u2019 equity.\nShort-term funding\nThe Firm\u2019s primary source of short-term secured funding is securities sold under agreements to repurchase. These instruments are secured predominantly by high-quality securities collateral, including government-issued debt and U.S. GSE and government agency MBS. Securities sold under agreements to repurchase increased at December\u00a031, 2025, compared with December\u00a031, 2024, driven by Markets, primarily reflecting higher secured financing of trading assets.\nThe increases in secured other borrowed funds at December\u00a031, 2025 from December\u00a031, 2024, and for the average year ended December\u00a031, 2025, compared to the prior year, were primarily due to higher financing requirements in Markets.\nThe balances associated with securities loaned or sold under agreements to repurchase fluctuate over time due to investment and financing activities of clients, the Firm\u2019s demand for financing, the ongoing management of the mix of the Firm\u2019s liabilities, including with respect to liquidity and capital considerations, as well as other market and portfolio factors.\nThe Firm\u2019s primary sources of short-term unsecured funding consist of issuances of wholesale commercial paper and other borrowed funds.\nThe decrease in commercial paper for the year ended December\u00a031, 2025, compared to the prior year, was primarily driven by strategic short-term liquidity management.\nThe increase in unsecured other borrowed funds for the average year ended December\u00a031, 2025, compared to the prior year, was primarily due to net issuances of structured notes in Markets due to client demand and an increase in the fair value of such instruments.\nJPMorgan Chase & Co./2025 Form 10-K\n105\nManagement\u2019s discussion and analysis\nLong-term funding\nLong-term funding provides an additional source of stable funding and liquidity for the Firm. The Firm\u2019s long-term funding plan is driven primarily by expected client activity, liquidity considerations and regulatory requirements. Long-term funding objectives include maintaining diversification, maximizing market access and optimizing funding costs through various funding markets, tenors and currencies.\nUnsecured funding and issuance\nThe significant majority of the Firm\u2019s total outstanding long-term debt has been issued by the Parent Company to provide flexibility in support of the funding needs of both bank and non-bank subsidiaries. The Parent Company advances substantially all net funding proceeds to its subsidiary, the IHC. The IHC does not issue debt to external counterparties. The increase in structured notes at December\u00a031, 2025 from December\u00a031, 2024, and for the average year ended December\u00a031, 2025, compared to the prior year, was primarily driven by net issuances of structured notes in Markets due to client demand and an increase in the fair value of such instruments.\nThe following table summarizes long-term unsecured issuance and maturities or redemptions for the years ended December\u00a031, 2025 and 2024. Refer to Note 20 for additional information on the IHC and long-term debt.\nLong-term unsecured funding\nYear ended December 31,\n2025\n2024\n2025\n2024\n(Notional in millions)\nParent Company\nSubsidiaries\nIssuance\nSenior notes issued in the U.S. market\n$\n19,000\n\n$\n37,000\n$\n\u2014\n\n$\n\u2014\nSenior notes issued in non-U.S. markets\n2,084\n\n4,079\n\u2014\n\n\u2014\nTotal senior notes\n21,084\n\n41,079\n\u2014\n\n\u2014\nSubordinated debt\n4,000\n\n\u2014\n\u2014\n\n\u2014\nStructured notes\n(a)\n4,975\n\n3,944\n74,346\n\n54,993\nTotal long-term unsecured funding \u2013 issuance\n$\n30,059\n\n$\n45,023\n$\n74,346\n\n$\n54,993\nMaturities/redemptions\nSenior notes\n$\n22,457\n\n$\n25,765\n$\n65\n\n$\n65\nSubordinated debt\n317\n\n3,097\n\u2014\n\n250\nStructured notes\n2,929\n\n892\n56,047\n\n47,425\nTotal long-term unsecured funding \u2013 maturities/redemptions\n$\n25,703\n\n$\n29,754\n$\n56,112\n\n$\n47,740\n(a)\nIncludes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.\nSecured funding and issuance\nThe Firm can also raise secured long-term funding through securitization of consumer credit card loans and FHLB advances. The following table summarizes the credit card securitization and FHLB advances, as well as other long-term secured funding sources, with their respective maturities or redemptions, as applicable, for the years ended December\u00a031, 2025 and 2024, respectively.\nLong-term secured funding\nYear ended December 31,\nIssuance\nMaturities/Redemptions\n(in millions)\n2025\n2024\n2025\n2024\nCredit card securitization\n$\n1,498\n\n$\n2,348\n$\n1,000\n\n$\n\u2014\nFHLB advances\n12,500\n\n6,000\n23,644\n\n18,050\nOther long-term secured funding\n(a)\n2,376\n\n1,578\n1,632\n\n1,049\nTotal long-term secured funding\n$\n16,374\n\n$\n9,926\n$\n26,276\n\n$\n19,099\n(a)\nIncludes long-term structured notes that are secured.\nThe Firm\u2019s wholesale businesses also securitize loans for client-driven transactions which are not considered to be a source of funding for the Firm and are not included in the table above. Refer to Note 14 for a further description of client-driven loan securitizations.\n106\nJPMorgan Chase & Co./2025 Form 10-K\nCredit ratings\nThe cost and availability of financing are influenced by credit ratings. Reductions in these ratings could have an adverse effect on the Firm\u2019s access to liquidity sources, increase the cost of funds, trigger additional collateral or funding requirements and decrease the number of investors and counterparties willing to lend to the Firm. The nature and magnitude of the impact of ratings downgrades depends on numerous contractual and behavioral factors, which the Firm\nbelieves are incorporated in its liquidity risk and stress testing metrics. The Firm believes that it maintains sufficient liquidity to withstand a potential decrease in funding capacity due to ratings downgrades.\nAdditionally, the Firm\u2019s funding requirements for VIEs and other third-party commitments may be adversely affected by a decline in credit ratings. Refer to Notes 5 and 14 for additional information.\nThe credit ratings of the Parent Company and certain of its principal subsidiaries as of December\u00a031, 2025 were as follows:\nJPMorgan Chase & Co.\nJPMorgan Chase Bank, N.A.\n\u00a0J.P. Morgan SE\nJ.P. Morgan Securities LLC\n\u00a0J.P. Morgan Securities plc\nDecember 31, 2025\nLong-term issuer\nShort-term issuer\nOutlook\nLong-term issuer\nShort-term issuer\nOutlook\nLong-term issuer\nShort-term issuer\nOutlook\nLong-term issuer\nShort-term issuer\nOutlook\nMoody\u2019s Investors Service\n(a)\nA1\nP-1\nStable\nAa2\nP-1\nStable\n(b)\nAa2\nP-1\nStable\nAa3\nP-1\nStable\nStandard & Poor\u2019s\nA\nA-1\nStable\nAA-\nA-1+\nStable\nAA-\nA-1+\nStable\nAA-\nA-1+\nStable\nFitch Ratings\nAA-\nF1+\nStable\nAA\nF1+\nStable\nAA\nF1+\nStable\nAA\nF1+\nStable\n(a)\nOn November 3, 2025, Moody\u2019s revised the outlook for the Parent Company, J.P. Morgan Securities LLC, J.P. Morgan Securities plc and J.P. Morgan SE to stable from positive, and revised J.P. Morgan SE\u2019s long-term issuer rating to Aa2 from Aa3.\n(b)\nOn May 19, 2025, Moody\u2019s revised JPMorgan Chase Bank, N.A.\u2019s outlook to stable from developing, and this change was related to Moody\u2019s one-notch downgrade of the long-term issuer rating of the U.S. Government announced on May 16, 2025. Moody\u2019s also affirmed JPMorgan Chase Bank, N.A.\u2019s long-term issuer rating.\nJPMorganChase\u2019s unsecured debt does not contain requirements that would call for an acceleration of payments, maturities or changes in the structure of the existing debt, provide any limitations on future borrowings or require additional collateral, based on unfavorable changes in the Firm\u2019s credit ratings, financial ratios, earnings, or stock price.\nCritical factors in maintaining high credit ratings include a stable and diverse earnings stream, strong capital and liquidity ratios, strong credit quality and risk management controls, and diverse funding sources. Rating agencies continue to evaluate economic and geopolitical trends, regulatory developments, future profitability, risk management practices, and litigation matters, as well as their broader ratings methodologies. Changes in any of these factors could lead to changes in the Firm\u2019s credit ratings.\nJPMorgan Chase & Co./2025 Form 10-K\n107\nREPUTATION RISK MANAGEMENT\nReputation risk is the risk of damage to the trust, affinity or goodwill for the Firm held by clients, employees and investors that can result from the Firm\u2019s decisions to engage or not engage with a client or in a business activity and which may lead to negative commercial impacts. The Firm\u2019s decisions related to clients and business activities are made based on a range of commercial considerations, including operational capabilities and expertise, servicing costs, risk relative to opportunity, the prioritization of finite resources and, when relevant, reputation risk considerations. The Firm manages reputation risk through established policies, standards and procedures that are integrated across the LOBs and Corporate functions. Potential reputation risk matters may be escalated to governance forums, as appropriate, including LOB Reputation Risk Committees. The Board Risk Committee also regularly receives information on reputation risk matters, as appropriate.\n108\nJPMorgan Chase & Co./2025 Form 10-K\nCREDIT AND INVESTMENT RISK MANAGEMENT\nCredit and investment risk is the risk associated with the default or change in credit profile of a client, counterparty or customer; or loss of principal or a reduction in expected returns on investments, including consumer credit risk, wholesale credit risk, and investment portfolio risk.\nCredit risk management\nCredit risk is the risk associated with the default or change in credit profile of a client, counterparty or customer. The Firm provides credit to a variety of clients and customers, ranging from large corporate and institutional clients to individual consumers and small businesses. In its consumer businesses, the Firm is exposed to credit risk primarily through its home lending, credit card, auto, and business banking businesses. In its wholesale businesses, the Firm is exposed to credit risk through its underwriting, lending, market-making, and hedging activities with and for clients and counterparties, as well as through its operating services activities (such as cash management and clearing activities), and securities financing activities. The Firm is also exposed to credit risk through its investment securities portfolio and cash placed with banks.\nCredit Risk Management monitors and measures credit risk throughout the Firm, and defines credit risk policies, procedures and limits. The Firm\u2019s credit risk management governance includes the following activities:\n\u2022\nMaintaining a credit risk policy framework\n\u2022\nMonitoring and measuring credit risk across all portfolio segments, including transaction and exposure approval\n\u2022\nSetting industry and geographic concentration limits, as appropriate, and setting guidelines for credit review and analysis\n\u2022\nAssigning and maintaining credit approval authorities in connection with the approval of credit exposure\n\u2022\nMonitoring and independent assessment of criticized exposures and delinquent loans, and\n\u2022\nEstimating credit losses, including periodic review and refinement of underlying assumptions, and supporting appropriate credit risk-based capital management\nRisk identification and measurement\nTo measure credit risk, the Firm employs several methodologies for estimating the likelihood of obligor or counterparty default. Methodologies for measuring credit risk vary depending on several factors, including type of asset (e.g., consumer versus wholesale), risk measurement parameters (e.g., delinquency status and borrower\u2019s credit score versus wholesale risk-rating) and risk management and collection processes (e.g., retail collection center versus centrally managed workout groups). Credit risk measurement is based on the probability of default of an obligor or counterparty, the loss severity given a default event and the exposure at default.\nBased on these factors and the methodology and estimates described in Note 13 and Note 10, the Firm estimates credit losses for its exposures.\u00a0The allowance for loan losses reflects estimated credit losses related to the consumer and wholesale held-for-investment loan portfolios, the allowance for lending-related commitments reflects estimated credit losses related to the Firm\u2019s lending-related commitments and the allowance for investment securities reflects estimated credit losses related to the investment securities portfolio.\u00a0Refer to Note 13, Note 10 and Critical Accounting Estimates used by the Firm on pages 154\u2013157 for further information.\nIn addition, potential and unexpected credit losses are reflected in the allocation of credit risk capital and represent the potential volatility of actual losses relative to the established allowances for loan losses and lending-related commitments. The analyses for these losses include stress testing that considers alternative economic scenarios as described below.\nStress testing\nStress testing is important in assessing, measuring and monitoring credit risk in the Firm\u2019s credit portfolio. The stress testing process assesses the potential impact of alternative economic and business scenarios on estimated credit losses for the Firm. Economic scenarios and the underlying parameters are defined centrally, articulated in terms of macroeconomic factors and applied across the businesses. The stress test results may indicate credit migration, changes in delinquency trends and potential losses in the credit portfolio. In addition to the periodic stress testing processes, management also considers additional stresses outside these scenarios, including industry and country- specific stress scenarios, as appropriate. The Firm uses stress testing to inform decisions on setting risk appetite both at a Firm and LOB level, as well as to assess the impact of stress on individual counterparties.\nJPMorgan Chase & Co./2025 Form 10-K\n109\nManagement\u2019s discussion and analysis\nRisk monitoring and management\nThe Firm has developed policies and practices that are designed to preserve the independence and integrity of the approval and decision-making process for extending credit so that credit risks are assessed accurately, approved properly, and monitored regularly at both the transaction and portfolio levels. The policy framework establishes credit approval authorities, concentration limits, risk-rating methodologies, portfolio review parameters and guidelines for management of distressed exposures. In addition, certain models, assumptions and inputs used in evaluating and monitoring credit risk are independently validated by groups that are separate from the LOBs.\nConsumer credit risk is monitored for delinquency and other trends, including any concentrations at the portfolio level, as certain of these trends can be addressed through changes in underwriting policies and portfolio guidelines. Consumer Risk Management evaluates delinquency and other trends against business expectations, current and forecasted economic conditions, and industry benchmarks. Historical and forecasted economic performance and trends are incorporated into the modeling of estimated consumer credit losses and are part of the monitoring of the credit risk profile of the portfolio.\nWholesale credit risk is monitored regularly at an aggregate portfolio, industry, and individual client and counterparty level with established concentration limits that are reviewed and revised periodically as deemed appropriate by management. Industry and counterparty limits, as measured in terms of exposure and risk appetite, are subject to stress-based loss constraints.\nManagement of the Firm\u2019s wholesale credit risk exposure is accomplished through a number of means, including:\n\u2022\nLoan underwriting and credit approval processes\n\u2022\nLoan syndications and participations\n\u2022\nLoan sales and securitizations\n\u2022\nCredit derivatives\n\u2022\nMaster netting agreements, and\n\u2022\nCollateral and other risk-reduction techniques\nIn addition to Credit Risk Management, an independent Credit Review function is responsible for:\n\u2022\nI\nndependently assessing risk ratings assigned to exposures in the Firm\u2019s wholesale credit portfolio and the timeliness of risk rating changes initiated by responsible business units; and\n\u2022\nEvaluating the effectiveness of the credit management processes of the LOBs and Corporate, including the adequacy of credit analyses and risk rating/loss given default (\u201cLGD\u201d) rationales, proper monitoring and management of credit exposures, and compliance with applicable grading policies and underwriting guidelines.\nRefer to Note 12 for further discussion of consumer and wholesale loans.\nRisk reporting\nTo enable monitoring of credit risk and effective decision-making, aggregate credit exposure, credit quality forecasts, concentration levels and risk profile changes are reported regularly to senior members of Credit Risk Management. Detailed portfolio reporting of industry, clients, counterparties and customers, product and geography are prepared, and the appropriateness of the allowance for credit losses is reviewed by senior management at least on a quarterly basis. Through the risk reporting and governance structure, credit risk trends and limit exceptions are provided regularly to, and discussed with, risk committees, senior management and the Board of Directors.\n110\nJPMorgan Chase & Co./2025 Form 10-K\nCREDIT PORTFOLIO\nCredit risk is the risk associated with the default or change in credit profile of a client, counterparty or customer.\nIn the following tables, total loans include loans retained (i.e., held-for-investment); loans held-for-sale; and certain loans accounted for at fair value. The following tables do not include loans which the Firm accounts for at fair value and classifies as trading assets; refer to Notes 2 and 3 for further information regarding these loans. Refer to Notes 12, 28, and 5 for additional information on the Firm\u2019s loans, lending-related commitments and derivative receivables, including the Firm\u2019s related accounting policies.\nRefer to Note 10 for information regarding the credit risk inherent in the Firm\u2019s investment securities portfolio; and refer to Note 11 for information regarding credit risk inherent in the securities financing portfolio. Refer to Consumer Credit Portfolio on pages 112\u2013117 and Note 12 for further discussions of the consumer credit environment, consumer loans and nonperforming exposure. Refer to Wholesale Credit Portfolio on pages 118\u2013128 and Note 12 for further discussions of the wholesale credit environment, wholesale loans and nonperforming exposure.\nTotal credit portfolio\nDecember 31,\n(in millions)\nCredit exposure\nNonperforming\n(d)\n2025\n2024\n2025\n2024\nLoans retained\n$\n1,408,905\n\n$\n1,299,590\n$\n8,273\n\n$\n7,175\nLoans held-for-sale\n13,840\n\n7,048\n67\n\n160\nLoans at fair value\n70,684\n\n41,350\n1,517\n\n1,502\nTotal loans\n1,493,429\n\n1,347,988\n9,857\n\n8,837\nDerivative receivables\n57,777\n\n60,967\n204\n\n145\nReceivables from customers\n(a)\n47,336\n\n51,929\n\u2014\n\n\u2014\nTotal credit-related assets\n1,598,542\n\n1,460,884\n10,061\n\n8,982\nAssets acquired in loan satisfactions\nReal estate owned\nNA\nNA\n267\n\n284\nOther\nNA\nNA\n31\n\n34\nTotal\n\nassets acquired in loan satisfactions\nNA\nNA\n298\n\n318\nLending-related commitments\n1,817,307\n\n(c)\n1,577,622\n925\n\n737\nTotal credit portfolio\n$\n3,415,849\n\n$\n3,038,506\n$\n11,284\n\n$\n10,037\nCredit derivatives and credit-related notes used in credit portfolio management activities\n(b)\n$\n(24,383)\n$\n(41,367)\n$\n\u2014\n\n$\n\u2014\n\u00a0Liquid securities and other cash collateral held against derivatives\n(28,891)\n(28,160)\nNA\nNA\n(a)\nReceivables from customers reflect held-for-investment margin loans to brokerage clients in CIB, CCB and AWM; these are reported within accrued interest and accounts receivable on the Consolidated balance sheets.\n(b)\nRepresents the net notional amount of protection purchased and sold through credit derivatives and credit-related notes used to manage credit exposures.\n(c)\nIncludes estimated total credit exposure related to the Apple Card transaction at the time that the transaction is expected to close of approximately $104 billion, including approximately $23 billion of estimated drawn loans.\n(d)\nExcludes mortgage loans past due and insured by U.S. government agencies, which are primarily 90 or more days past due. These loans have been excluded based upon the government guarantee. At December\u00a031, 2025 and 2024, mortgage loans 90 or more days past due and insured by U.S. government agencies were $198 million and $121 million, respectively. In addition, the Firm\u2019s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.\nThe following table provides information on Firmwide nonaccrual loans to total loans.\nDecember 31,\n(in millions, except ratios)\n2025\n2024\nTotal nonaccrual loans\n$\n9,857\n\n$\n8,837\nTotal loans\n1,493,429\n\n1,347,988\nFirmwide nonaccrual loans to total loans outstanding\n0.66\n\n%\n0.66\n%\nThe following table provides information about the Firm\u2019s net charge-offs.\nDecember 31,\n(in millions, except ratios)\n2025\n2024\nNet charge-offs\n$\n9,849\n\n$\n8,638\nAverage retained loans\n1,335,675\n\n1,271,344\nNet charge-off rate\n0.74\n\n%\n0.68\n%\nJPMorgan Chase & Co./2025 Form 10-K\n111\nManagement\u2019s discussion and analysis\nCONSUMER CREDIT PORTFOLIO\nThe Firm\u2019s retained consumer portfolio consists primarily of loans and lending-related commitments for residential real estate, credit card, scored auto and business banking. The consumer credit portfolio also includes loans at fair value, predominantly in residential real estate. The Firm\u2019s focus is on serving primarily the prime segment of the consumer credit market. Originated mortgage loans are retained in the residential real estate portfolio, securitized or sold to U.S. government agencies and U.S. government-sponsored enterprises; other types of consumer loans are typically retained on the balance sheet. Refer to Note 12 for further information on the consumer loan portfolio. Refer to Note 28 for further information on lending-related commitments.\n112\nJPMorgan Chase & Co./2025 Form 10-K\nThe following tables present consumer credit-related information with respect to the scored credit portfolio held in CCB, AWM, CIB and Corpora\nte.\nConsumer credit portfolio\nDecember 31,\n(in millions)\nCredit exposure\nNonaccrual loans\n(j)\n2025\n2024\n2025\n2024\nConsumer, excluding credit card\nResidential real estate\n(a)\n$\n303,531\n\n$\n309,513\n$\n3,632\n\n$\n2,984\nAuto and other\n(b)(c)\n65,210\n\n66,821\n243\n\n249\nTotal loans - retained\n368,741\n\n376,334\n3,875\n\n3,233\nLoans held-for-sale\n334\n\n945\n59\n\n155\nLoans at fair value\n(d)\n33,183\n\n15,531\n739\n\n538\nTotal consumer, excluding credit card loans\n402,258\n\n392,810\n4,673\n\n3,926\nLending-related commitments\n(e)\n43,587\n\n44,844\nTotal consumer exposure, excluding credit card\n445,845\n\n437,654\nCredit card\nLoans retained\n(f)\n247,797\n\n232,860\nNA\nNA\nTotal credit card loans\n247,797\n\n232,860\nNA\nNA\nLending-related commitments\n(e)(g)\n1,177,766\n\n(i)\n1,001,311\nTotal credit card exposure\n1,425,563\n\n1,234,171\nTotal consumer credit portfolio\n$\n1,871,408\n\n$\n1,671,825\n$\n4,673\n\n$\n3,926\nCredit-related notes used in credit portfolio management activities\n(h)\n$\n(485)\n$\n(479)\nYear ended December 31,\n(in millions, except ratios)\nNet charge-offs/(recoveries)\nAverage loans - retained\nNet charge-off/(recovery) rate\n(k)\n2025\n2024\n2025\n2024\n2025\n2024\nConsumer, excluding credit card\nResidential real estate\n$\n(115)\n$\n(101)\n$\n305,362\n\n$\n316,042\n(0.04)\n%\n(0.03)\n%\nAuto and other\n694\n\n775\n65,876\n\n67,959\n1.05\n\n1.14\nTotal consumer, excluding credit card - retained\n579\n\n674\n371,238\n\n384,001\n0.16\n\n0.18\nCredit card - retained\n7,672\n\n7,142\n231,644\n\n214,033\n3.31\n\n3.34\nTotal consumer - retained\n$\n8,251\n\n$\n7,816\n$\n602,882\n\n$\n598,034\n1.37\n\n%\n1.31\n%\n(a)\nIncludes scored mortgage and home equity loans held in CCB and AWM.\n(b)\nAt December\u00a031, 2025 and 2024, excluded operating lease assets of $20.0 billion and $12.8 billion, respectively. These operating lease assets are included in other assets on the Firm\u2019s Consolidated balance sheets. Refer to Note 18 for further information.\n(c)\nIncludes scored auto and business banking loans, and overdrafts.\n(d)\nIncludes scored mortgage loans held in CCB and CIB, and other consumer unsecured loans in CIB.\n(e)\nCredit card, home equity and certain business banking lending-related commitments represent the total available lines of credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit would be used at the same time. Refer to Note 28 for further information.\n(f)\nIncludes billed interest and fees.\n(g)\nAlso includes commercial card lending-related commitments primarily in CIB.\n(h)\nRepresents the notional amount of protection obtained through the issuance of credit-related notes that reference certain pools of residential real estate and auto loans in the retained consumer portfolio.\n(i)\nIncludes estimated total credit exposure related to the Apple Card transaction at the time that the transaction is expected to close of approximately $104 billion, including approximately $23 billion of estimated drawn loans.\n(j)\nExcludes mortgage loans past due and insured by U.S. government agencies, which are primarily 90 or more days past due. These loans have been excluded based upon the government guarantee. At December\u00a031, 2025 and 2024, mortgage loans 90 or more days past due and insured by U.S. government agencies were $198 million and $121 million, respectively. In addition, the Firm\u2019s policy is generally to exempt credit card loans from being placed on nonaccrual status, as permitted by regulatory guidance.\n(k)\nAverage consumer loans held-for-sale and loans at fair value were $23.7 billion and $17.2 billion for the years ended December\u00a031, 2025 and 2024, respectively. These amounts were excluded when calculating net charge-off/(recovery) rates.\nJPMorgan Chase & Co./2025 Form 10-K\n113\nManagement\u2019s discussion and analysis\nMaturities and sensitivity to changes in interest rates\nThe table below sets forth loan maturities by scheduled repayments, by class of loan and the distribution between fixed and floating interest rates based on the stated terms of the loan agreements. The Firm estimated the principal repayment amounts for both the residential real estate and auto and other loan classes by calculating the weighted-average loan balance and interest rates for loan pools based on remaining loan term. Refer to Note 12 for further information on loan classes.\nDecember 31, 2025\n(in millions)\nWithin\n1 year\n(a)\n\n1-5\nyears\n5-15\nyears\nAfter 15 years\nTotal\nConsumer, excluding credit card\nResidential real estate\n$\n35,842\n\n$\n26,960\n\n$\n110,981\n\n$\n159,365\n\n$\n333,148\n\nAuto and other\n21,009\n\n(b)\n42,518\n\n5,579\n\n4\n\n69,110\n\nTotal consumer, excluding credit card loans\n$\n56,851\n\n$\n69,478\n\n$\n116,560\n\n$\n159,369\n\n$\n402,258\n\nTotal credit card loans\n$\n245,850\n\n$\n1,932\n\n$\n15\n\n$\n\u2014\n\n$\n247,797\n\nTotal consumer loans\n$\n302,701\n\n$\n71,410\n\n$\n116,575\n\n$\n159,369\n\n$\n650,055\n\nLoans due after one year at fixed interest rates\nResidential real estate\n$\n19,270\n\n$\n56,134\n\n$\n69,232\n\nAuto and other\n42,358\n\n3,121\n\n4\n\nCredit card\n1,932\n\n15\n\n\u2014\n\nLoans due after one year at variable interest rates\nResidential real estate\n$\n7,690\n\n$\n54,847\n\n$\n90,133\n\nAuto and other\n160\n\n2,458\n\n\u2014\n\nTotal consumer loans\n$\n71,410\n\n$\n116,575\n\n$\n159,369\n\n(a)\nIncludes loans held-for-sale and loans at fair value.\n(b)\nIncludes overdrafts.\n114\nJPMorgan Chase & Co./2025 Form 10-K\nConsumer, excluding credit card\nPortfolio analysis\nLoans increased compared to December\u00a031, 2024, primarily driven by higher residential real estate loans at fair value.\nThe following discussions provide information concerning individual loan products. Refer to Note 12 for further information about this portfolio, including information about delinquencies, loan modifications and other credit quality indicators.\nResidential real estate:\n\nThe residential real estate portfolio, including loans held-for-sale and loans at fair value, predominantly consists of prime mortgage loans and home equity lines of credit.\nRetained loans decreased compared to December\u00a031, 2024, driven by paydowns, predominantly offset by originations. Retained nonaccrual loans increased compared to December\u00a031, 2024, primarily driven by forbearances granted to certain borrowers impacted by the wildfires in Los Angeles County, California in January 2025. Net recoveries were higher for the year ended December\u00a031, 2025 compared to the prior year, driven by loan sales.\nLoans held-for-sale and nonaccrual loans held-for-sale decreased compared to December\u00a031, 2024, reflecting loan sales.\nLoans at fair value increased compared to December\u00a031, 2024, as purchases outpaced sales in CIB and originations outpaced warehouse loan sales in Home Lending. Nonaccrual loans at fair value increased compared to December\u00a031, 2024, driven by CIB.\nAt December\u00a031, 2025 and 2024, the carrying values of retained interest-only residential mortgage loans were $88.8 billion and $88.9 billion, respectively. These loans have an interest-only payment period generally followed by an adjustable-rate or fixed-rate fully amortizing payment period to maturity and are typically originated as higher-balance loans to higher-income borrowers. The credit performance of this portfolio is comparable to the performance of the broader prime mortgage portfolio.\nThe carrying value of retained home equity lines of credit outstanding was $13.2 billion at December\u00a031, 2025, including $3.3 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modified, and $3.2 billion of interest-only balloon HELOCs, which primarily mature after 2030. The Firm manages the risk of HELOCs during their revolving period by reducing or canceling the undrawn line in accordance with the contract or to the extent otherwise permitted by law, including when there has been a demonstrable decline in the creditworthiness of the borrower or significant decrease in the value of the underlying property.\nThe following table provides a summary of the Firm\u2019s\nresidential mortgage portfolio insured and/or guaranteed by U.S. government agencies, predominantly loans held-for-sale and loans at fair value. The Firm monitors its exposure to certain potential unrecoverable claim payments related to government-insured loans and considers this exposure in estimating the allowance for loan losses.\n(in millions)\nDecember 31, 2025\nDecember 31, 2024\nCurrent\n$\n840\n\n$\n462\n30-89 days past due\n121\n\n72\n90 or more days past due\n198\n\n121\nTotal government guaranteed loans\n$\n1,159\n\n$\n655\nGeographic composition and current estimated loan-to-value ratio of residential real estate loans\nAt December\u00a031, 2025, $213.1 billion, or 70%, of the total retained residential real estate loan portfolio, was concentrated in California, New York, Florida, Texas and Massachusetts, compared to $217.7 billion, or 70%, at December\u00a031, 2024.\nAverage current estimated loan-to-value (\u201cLTV\u201d) ratios were relatively flat compared to December\u00a031, 2024.\nRefer to Note 12 for information on the geographic composition and current estimated LTVs of the Firm\u2019s residential real estate loans.\nJPMorgan Chase & Co./2025 Form 10-K\n115\nManagement\u2019s discussion and analysis\nAuto and other\n:\n The auto and other loan portfolio, including loans at fair value, generally consists of prime-quality scored auto and business banking loans, other consumer unsecured loans, and overdrafts. The portfolio increased compared to December\u00a031, 2024, primarily driven by an increase in loans at fair value due to net purchases of other consumer unsecured loans in CIB. Net charge-offs decreased compared to the prior year, primarily due to lower scored auto net charge-offs, reflecting improved used vehicle valuations. Refer to Note 14 for further information on securitization activity.\nNonperforming assets\nThe following table presents information as of December\u00a031, 2025 and 2024, about consumer, excluding credit card, nonperforming assets.\nNonperforming assets\n(a)\nDecember 31,\n(in millions)\n2025\n2024\nNonaccrual loans\nResidential real estate\n$\n4,381\n\n$\n3,665\nAuto and other\n292\n\n261\nTotal nonaccrual loans\n4,673\n\n3,926\nAssets acquired in loan satisfactions\nReal estate owned\n103\n\n78\nOther\n31\n\n34\nTotal assets acquired in loan satisfactions\n134\n\n112\nTotal nonperforming assets\n$\n4,807\n\n$\n4,038\n(a)\nExcludes mortgage loans past due and insured by U.S. government agencies, which are primarily 90 or more days past due. These loans have been excluded based upon the government guarantee. At December\u00a031, 2025 and 2024, mortgage loans 90 or more days past due and insured by U.S. government agencies were $198 million and $121 million, respectively.\nNonaccrual loans\nThe following table presents changes in consumer, excluding credit card, nonaccrual loans for the years ended December\u00a031, 2025 and 2024.\nNonaccrual loan activity\nYear ended December 31,\n(in millions)\n2025\n2024\nBeginning balance\n$\n3,926\n\n$\n4,203\nAdditions:\n4,506\n\n3,225\nReductions:\nPrincipal payments and other\n962\n\n894\nSales\n760\n\n803\nCharge-offs\n643\n\n665\nReturned to performing status\n1,200\n\n963\nForeclosures and other liquidations\n194\n\n177\nTotal reductions\n3,759\n\n3,502\nNet changes\n747\n\n(277)\nEnding balance\n$\n4,673\n\n$\n3,926\nRefer to Note 12 for further information about the consumer credit portfolio, including information about delinquencies, other credit quality indicators and loans that were in the process of active or suspended foreclosure.\n116\nJPMorgan Chase & Co./2025 Form 10-K\nCredit card\nTotal credit card loans increased compared to December\u00a031, 2024, reflecting growth from new accounts and revolving balances. The December\u00a031, 2025 30+ and 90+ day delinquency rates of 2.16% and 1.10%, respectively, decreased compared to the December\u00a031, 2024 30+ and 90+ day delinquency rates of 2.17% and 1.14%, respectively, in line with the Firm\u2019s expectations. Net charge-offs increased for the year ended December\u00a031, 2025 compared to the prior year, reflecting loan growth.\nConsistent with the Firm\u2019s policy, all credit card loans typically remain on accrual status until charged off. However, the Firm\u2019s allowance for loan losses includes the estimated uncollectible portion of accrued and billed interest and fee income.\nGeographic and FICO composition of credit card loans\nAt December\u00a031, 2025, $116.3 billion, or 47% of the total retained credit card loan portfolio, was concentrated in California, Texas, New York, Florida and Illinois, compared to $109.0 billion, or 47%, at December\u00a031, 2024.\nRefer to Note 12 for further information about this portfolio, including information about delinquencies, geographic and FICO composition.\nJPMorgan Chase & Co./2025 Form 10-K\n117\nManagement\u2019s discussion and analysis\nWHOLESALE CREDIT PORTFOLIO\nIn its wholesale businesses, the Firm is exposed to credit risk primarily through its underwriting, lending, market-making, and hedging activities with and for clients and counterparties, as well as through various operating services (such as cash management and clearing activities), securities financing activities and cash placed with banks. A portion of the loans originated or acquired by the Firm\u2019s wholesale businesses is generally retained on the balance sheet. The Firm distributes a significant percentage of the loans that it originates into the market as part of its syndicated loan business and to manage portfolio concentrations and credit risk. The wholesale portfolio is actively managed, in part by conducting ongoing, in-depth reviews of client credit quality and transaction structure, inclusive of collateral where applicable, and of industry, product and client concentrations. Refer to the industry discussion on pages 120\u2013123 for further information.\nThe Firm\u2019s wholesale credit portfolio includes exposure held in CIB, AWM and Corporate, and risk-rated exposure held in CCB, for which the wholesale methodology is applied when determining the allowance for loan losses.\nAs of December\u00a031, 2025, loans increased by $121.1\u00a0billion, predominantly driven by higher loans in CIB, primarily in Markets, and higher securities-based lending in AWM, both associated with higher client demand. Lending-related commitments increased by $64.5\u00a0billion, predominantly driven by higher commitments in CIB, including held-for-sale commitments.\nAs of December\u00a031, 2025, nonperforming exposure increased by $478 million, driven by certain exposures in Technology, Media & Telecommunications, Oil & Gas and Utilities, in each case primarily resulting from downgrades, largely offset by certain exposures in Healthcare and Consumer & Retail, primarily due to charge-off activity, upgrades, and loan sales.\nWholesale credit portfolio\nDecember 31,\n(in millions)\nCredit exposure\nNonperforming\n2025\n2024\n2025\n2024\nLoans retained\n$\n792,367\n\n$\n690,396\n$\n4,398\n\n$\n3,942\nLoans held-for-sale\n13,506\n\n6,103\n8\n\n5\nLoans at fair value\n37,501\n\n25,819\n778\n\n964\nLoans\n843,374\n\n722,318\n5,184\n\n4,911\nDerivative receivables\n57,777\n\n60,967\n204\n\n145\nReceivables from customers\n(a)\n47,336\n\n51,929\n\u2014\n\n\u2014\nTotal wholesale credit-related assets\n948,487\n\n835,214\n5,388\n\n5,056\nAssets acquired in loan satisfactions\nReal estate owned\nNA\nNA\n164\n\n206\nTotal\n\nassets acquired in loan satisfactions\nNA\nNA\n164\n\n206\nLending-related commitments\n595,954\n\n531,467\n925\n\n737\nTotal wholesale credit portfolio\n$\n1,544,441\n\n$\n1,366,681\n$\n6,477\n\n$\n5,999\nCredit derivatives and credit-related notes used in credit portfolio management activities\n(b)\n$\n(23,898)\n$\n(40,888)\n$\n\u2014\n\n$\n\u2014\nLiquid securities and other cash collateral held against derivatives\n(28,891)\n(28,160)\nNA\nNA\n(a)\nReceivables from customers reflect held-for-investment margin loans to brokerage clients in CIB, CCB and AWM; these are reported within accrued interest and accounts receivable on the Consolidated balance sheets.\n(b)\nRepresents the net notional amount of protection purchased and sold through credit derivatives and credit-related notes used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. Refer to Credit derivatives on page 128 and Note 5 for additional information.\n118\nJPMorgan Chase & Co./2025 Form 10-K\nWholesale credit exposure \u2013 maturity and ratings profile\nThe following tables present the maturity and internal risk ratings profiles of the wholesale credit portfolio as of December\u00a031, 2025 and 2024. The Firm generally considers internal ratings with qualitative characteristics equivalent to BBB-/Baa3 or higher as investment grade, and takes into consideration collateral and structural support when determining the internal risk rating for each credit facility. Refer to Note 12 for further information on internal risk ratings.\nMaturity profile\n(d)\nRatings profile\nDecember 31, 2025\n(in millions, except ratios)\n1 year or less\nAfter 1 year through\n5 years\nAfter 5 years\nTotal\nInvestment-grade\nNoninvestment-grade\nTotal\nTotal %\nof IG\nLoans retained\n$\n271,648\n\n$\n330,900\n\n$\n189,819\n\n$\n792,367\n\n$\n541,364\n\n$\n251,003\n\n$\n792,367\n\n68\n\n%\nDerivative receivables\n57,777\n\n57,777\n\nLess: Liquid securities and other cash collateral held against derivatives\n(28,891)\n(28,891)\nTotal derivative receivables, net of collateral\n7,941\n\n6,836\n\n14,109\n\n28,886\n\n19,721\n\n9,165\n\n28,886\n\n68\n\nLending-related commitments\n155,797\n\n412,594\n\n27,563\n\n595,954\n\n383,106\n\n212,848\n\n595,954\n\n64\n\nSubtotal\n435,386\n\n750,330\n\n231,491\n\n1,417,207\n\n944,191\n\n473,016\n\n1,417,207\n\n67\n\nLoans held-for-sale and loans at fair value\n(a)\n51,007\n\n51,007\n\nReceivables from customers\n47,336\n\n47,336\n\nTotal exposure \u2013 net of liquid securities and other cash collateral held against derivatives\n$\n1,515,550\n\n$\n1,515,550\n\nCredit derivatives and credit-related notes used in credit portfolio management activities\n(b)(c)\n$\n(5,356)\n$\n(17,424)\n$\n(1,118)\n$\n(23,898)\n$\n(17,831)\n$\n(6,067)\n$\n(23,898)\n75\n\n%\nMaturity profile\n(d)\nRatings profile\nDecember 31, 2024\n(in millions, except ratios)\n1 year or less\nAfter 1 year through\n5 years\nAfter 5 years\nTotal\nInvestment-grade\nNoninvestment-grade\nTotal\nTotal %\nof IG\nLoans retained\n$\n225,982\n$\n289,199\n$\n175,215\n$\n690,396\n$\n471,670\n$\n218,726\n$\n690,396\n68\n%\nDerivative receivables\n60,967\n60,967\nLess: Liquid securities and other cash collateral held against derivatives\n(28,160)\n(28,160)\nTotal derivative receivables, net of collateral\n11,515\n7,418\n13,874\n32,807\n24,707\n8,100\n32,807\n75\nLending-related commitments\n121,283\n384,529\n25,655\n531,467\n352,082\n179,385\n531,467\n66\nSubtotal\n358,780\n681,146\n214,744\n1,254,670\n848,459\n406,211\n1,254,670\n68\nLoans held-for-sale and loans at fair value\n(a)\n31,922\n31,922\nReceivables from customers\n51,929\n51,929\nTotal exposure \u2013 net of liquid securities and other cash collateral held against derivatives\n$\n1,338,521\n$\n1,338,521\nCredit derivatives and credit-related notes used in credit portfolio management activities\n(b)(c)\n$\n(5,442)\n$\n(33,751)\n$\n(1,695)\n$\n(40,888)\n$\n(31,691)\n$\n(9,197)\n$\n(40,888)\n78\n%\n(a)\nLoans held-for-sale are primarily related to syndicated loans and loans transferred from the retained portfolio.\n(b)\nThese derivatives do not qualify for hedge accounting under U.S. GAAP.\n(c)\nThe notional amounts are presented on a net basis by underlying reference entity and the ratings profile shown is based on the ratings of the reference entity on which protection has been purchased. Predominantly all of the credit derivatives entered into by the Firm where it has purchased protection used in credit portfolio management activities are executed with investment-grade counterparties. In addition, the Firm obtains credit protection against certain loans in the retained loan portfolio through the issuance of credit-related notes.\n(d)\nThe maturity profile of retained loans, lending-related commitments and derivative receivables is generally based on remaining contractual maturity.\u00a0Derivative contracts that are in a receivable position at December\u00a031, 2025, may become payable prior to maturity based on their cash flow profile or changes in market conditions.\nJPMorgan Chase & Co./2025 Form 10-K\n119\nManagement\u2019s discussion and analysis\nWholesale credit exposure \u2013 industry exposures\nThe Firm focuses on the management and diversification of its industry exposures, and pays particular attention to industries with actual or potential credit concerns.\nExposures that are deemed to be criticized align with the U.S. banking regulators\u2019 definition of criticized exposures, which consist of the special mention, substandard and doubtful categories. Total criticized exposure, excluding loans held-for-sale and loans at fair value, was $48.5 billion and $44.7 billion as of December\u00a031, 2025 and 2024, representing approximately 3.4% and 3.5% of total wholesale credit exposure, respectively; of the $48.5 billion, $42.9 billion was performing. The increase in criticized exposure was driven by SPEs, Consumer & Retail, Banks & Finance Companies, Healthcare, and Chemicals & Plastics, primarily resulting from downgrades and new lending-related commitments, partially offset by Real Estate and Industrials, primarily resulting from net portfolio activity and upgrades.\nThe table below summarizes by industry the Firm\u2019s exposures as of December\u00a031, 2025 and 2024. The industry of risk category is generally based on the client or counterparty\u2019s primary business activity. Refer to Note 4 for additional information on industry concentrations.\nWholesale credit exposure \u2013 industries\n(a)\nSelected metrics\nNoninvestment-grade\n30 days or more past due and accruing\nloans\nNet\ncharge-offs/\n(recoveries)\nCredit derivative and credit-related notes\n(h)\nLiquid securities and other cash collateral held against derivative\nreceivables\nAs of or for the year ended December\u00a031, 2025\n(in millions)\nCredit\nexposure\n(f)(g)\nInvestment-\ngrade\nNoncriticized\nCriticized performing\nCriticized\nnonperforming\nReal Estate\n$\n224,858\n\n$\n155,712\n\n$\n57,478\n\n$\n9,967\n\n$\n1,701\n\n$\n959\n\n$\n380\n\n$\n(99)\n$\n\u2014\n\nIndividuals and Individual Entities\n(b)\n167,700\n\n138,142\n\n28,677\n\n460\n\n421\n\n1,012\n\n(15)\n\u2014\n\n\u2014\n\nAsset Managers\n152,848\n\n117,426\n\n35,113\n\n304\n\n5\n\n105\n\n1\n\n(5)\n(10,626)\nConsumer & Retail\n133,945\n\n63,523\n\n62,382\n\n7,425\n\n615\n\n115\n\n234\n\n(311)\n\u2014\n\nTechnology, Media & Telecommunications\n97,816\n\n44,373\n\n42,507\n\n10,135\n\n801\n\n37\n\n281\n\n(1,078)\n\u2014\n\nIndustrials\n80,606\n\n44,078\n\n33,166\n\n3,101\n\n261\n\n470\n\n18\n\n(68)\n\u2014\n\nBanks & Finance Companies\n75,653\n\n41,904\n\n32,826\n\n903\n\n20\n\n16\n\n8\n\n(574)\n(657)\nHealthcare\n72,218\n\n48,888\n\n19,713\n\n3,059\n\n558\n\n12\n\n191\n\n(67)\n\u2014\n\nUtilities\n39,005\n\n24,840\n\n12,519\n\n1,254\n\n392\n\n1\n\n63\n\n(203)\n\u2014\n\nOil & Gas\n36,497\n\n21,825\n\n14,076\n\n347\n\n249\n\n52\n\n48\n\n(51)\n\u2014\n\nAutomotive\n35,984\n\n19,602\n\n15,397\n\n958\n\n27\n\n109\n\n3\n\n(277)\n\u2014\n\nState & Municipal Govt\n(c)\n32,484\n\n31,372\n\n1,100\n\n3\n\n9\n\n30\n\n\u2014\n\n(3)\n\u2014\n\nInsurance\n25,031\n\n17,511\n\n7,352\n\n168\n\n\u2014\n\n6\n\n\u2014\n\n(20)\n(8,310)\nChemicals & Plastics\n23,790\n\n11,251\n\n10,355\n\n2,091\n\n93\n\n2\n\n82\n\n(239)\n\u2014\n\nTransportation\n20,861\n\n11,450\n\n9,097\n\n285\n\n29\n\n11\n\n(3)\n(135)\n\u2014\n\nMetals & Mining\n17,767\n\n7,459\n\n9,883\n\n406\n\n19\n\n22\n\n4\n\n(39)\n(67)\nCentral Govt\n15,164\n\n14,666\n\n245\n\n44\n\n209\n\n8\n\n\u2014\n\n(1,258)\n(1,273)\nSecurities Firms\n7,966\n\n4,372\n\n3,593\n\n\u2014\n\n1\n\n1\n\n\u2014\n\n(13)\n(2,458)\nFinancial Markets Infrastructure\n5,734\n\n5,306\n\n358\n\n70\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nAll other\n(d)\n180,171\n\n148,214\n\n29,887\n\n1,953\n\n117\n\n3\n\n303\n\n(19,458)\n(5,500)\nSubtotal\n$\n1,446,098\n\n$\n971,914\n\n$\n425,724\n\n$\n42,933\n\n$\n5,527\n\n$\n2,971\n\n$\n1,598\n\n$\n(23,898)\n$\n(28,891)\nLoans held-for-sale and loans at fair value\n51,007\n\nReceivables from customers\n47,336\n\nTotal\n(e)\n$\n1,544,441\n\n120\nJPMorgan Chase & Co./2025 Form 10-K\n(continued from previous page)\nSelected metrics\nNoninvestment-grade\n30 days or more past due and accruing\nloans\nNet\ncharge-offs/\n(recoveries)\nCredit derivative and credit-related notes\n(h)\nLiquid securities and other cash collateral held against derivative\nreceivables\nAs of or for the year ended\nDecember 31, 2024\n(in millions)\nCredit\nexposure\n(f)(g)\nInvestment-\ngrade\nNoncriticized\nCriticized performing\nCriticized\nnonperforming\nReal Estate\n$\n207,050\n$\n143,803\n$\n50,865\n$\n10,858\n$\n1,524\n$\n913\n$\n345\n$\n(584)\n$\n\u2014\nIndividuals and Individual Entities\n(b)\n144,145\n118,650\n24,831\n217\n447\n831\n122\n\u2014\n\u2014\nAsset Managers\n135,541\n101,150\n34,148\n206\n37\n375\n2\n\u2014\n(9,194)\nConsumer & Retail\n129,815\n62,800\n60,141\n6,055\n819\n252\n123\n(4,320)\n\u2014\nTechnology, Media & Telecommunications\n84,716\n45,021\n28,629\n10,592\n474\n79\n94\n(4,800)\n\u2014\nIndustrials\n72,530\n37,572\n30,912\n3,807\n239\n185\n91\n(2,312)\n\u2014\nBanks & Finance Companies\n61,287\n36,884\n24,119\n257\n27\n36\n\u2014\n(702)\n(729)\nHealthcare\n64,224\n44,135\n17,062\n2,219\n808\n245\n56\n(3,286)\n(34)\nUtilities\n35,871\n24,205\n10,256\n1,273\n137\n1\n\u2014\n(2,700)\n\u2014\nOil & Gas\n31,724\n19,053\n12,479\n188\n4\n9\n(3)\n(1,711)\n(2)\nAutomotive\n34,336\n22,015\n11,353\n931\n37\n121\n1\n(997)\n\u2014\nState & Municipal Govt\n(c)\n35,039\n33,303\n1,711\n9\n16\n90\n\u2014\n(2)\n(1)\nInsurance\n24,267\n17,847\n6,198\n222\n\u2014\n2\n\u2014\n(1,077)\n(9,184)\nChemicals & Plastics\n20,782\n11,013\n8,152\n1,521\n96\n31\n14\n(1,164)\n\u2014\nTransportation\n17,019\n9,462\n7,135\n391\n31\n17\n(20)\n(658)\n\u2014\nMetals & Mining\n15,860\n7,373\n7,860\n590\n37\n9\n\u2014\n(246)\n(2)\nCentral Govt\n13,862\n13,580\n157\n125\n\u2014\n4\n\u2014\n(1,490)\n(2,051)\nSecurities Firms\n9,443\n5,424\n4,014\n5\n\u2014\n\u2014\n\u2014\n(13)\n(2,635)\nFinancial Markets Infrastructure\n4,446\n4,201\n245\n\u2014\n\u2014\n\u2014\n\u2014\n(1)\n\u2014\nAll other\n(d)\n140,873\n117,986\n22,398\n398\n91\n10\n(3)\n(14,825)\n(4,328)\nSubtotal\n$\n1,282,830\n$\n875,477\n$\n362,665\n$\n39,864\n$\n4,824\n$\n3,210\n$\n822\n$\n(40,888)\n$\n(28,160)\nLoans held-for-sale and loans at fair value\n31,922\nReceivables from customers\n51,929\nTotal\n(e)\n$\n1,366,681\n(a)\nT\nhe industry rankings presented in the table as of December\u00a031, 2024, are based on the industry rankings of the corresponding exposures as of December\u00a031, 2025, not actual rankings of such exposures as of December\u00a031, 2024.\n(b)\nIndividuals and Individual Entities predominantly consists of Global Private Bank clients within AWM and J.P. Morgan Wealth Management within CCB, and includes exposure to personal investment companies and personal and testamentary trusts.\n(c)\nIn addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at December\u00a031, 2025 and 2024, noted above, the Firm held: $6.1\u00a0billion of trading assets at both periods; $20.2 billion and $17.9 billion, respectively, of AFS securities; and $8.6 billion and $9.3 billion, respectively, of HTM securities, issued by U.S. state and municipal governments. Refer to Notes 2 and 10 for further information.\n(d)\nAll other includes: SPEs and Private\n education and civic organizations, representing approximatel\ny 95% and 5%, respectively, at December\u00a031, 2025, and 94% and 6%, respectively, at December 31,\n2024. Refer to Note 14 for more information on exposures to SPEs.\n(e)\nExcludes cash placed with banks of $333.8 billion and $459.2 billion, at December\u00a031, 2025 and 2024, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.\n(f)\nCredit exposure is net of risk participations and excludes the benefit of credit derivatives and credit-related notes used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables.\n(g)\nCredit exposure includes held-for-sale and fair value option elected lending-related commitments.\n(h)\nRepresents the net notional amounts of protection purchased and sold through credit derivatives and credit-related notes used to manage the credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. The All other category includes purchased credit protection on certain credit indices.\nJPMorgan Chase & Co./2025 Form 10-K\n121\nManagement\u2019s discussion and analysis\nPresented below is additional detail on certain of the Firm\u2019s industry exposures.\nReal Estate\nReal Estate exposure was $224.9 billion as of December\u00a031, 2025. Criticized exposure decreased by $714 million from $12.4\u00a0billion at December\u00a031, 2024 to $11.7\u00a0billion at December\u00a031, 2025, driven by net portfolio activity, predominantly offset by net downgrades.\nDecember\u00a031, 2025\n(in millions, except ratios)\nLoans and lending-related commitments\nDerivative receivables\nCredit exposure\n% Investment-grade\n% Drawn\n(d)\nMultifamily\n(a)\n$\n128,864\n\n$\n25\n\n$\n128,889\n\n78\n\n%\n91\n\n%\nOther Income Producing Properties\n(b)\n23,390\n\n229\n\n23,619\n\n46\n\n53\n\nServices and Non Income Producing\n20,325\n\n130\n\n20,455\n\n63\n\n35\n\nIndustrial\n19,541\n\n13\n\n19,554\n\n67\n\n69\n\nOffice\n15,016\n\n39\n\n15,055\n\n47\n\n80\n\nRetail\n12,879\n\n33\n\n12,912\n\n79\n\n74\n\nLodging\n4,366\n\n8\n\n4,374\n\n26\n\n48\n\nTotal Real Estate Exposure\n(c)\n$\n224,381\n\n$\n477\n\n$\n224,858\n\n69\n\n%\n77\n\n%\nDecember\u00a031, 2024\n(in millions, except ratios)\nLoans and lending-related commitments\nDerivative receivables\nCredit exposure\n% Investment-grade\n% Drawn\n(d)\nMultifamily\n(a)\n$\n124,074\n$\n7\n$\n124,081\n77\n%\n92\n%\nOther Income Producing Properties\n(b)\n16,411\n158\n16,569\n50\n63\nServices and Non Income Producing\n14,047\n57\n14,104\n62\n46\nIndustrial\n19,092\n17\n19,109\n65\n72\nOffice\n16,331\n29\n16,360\n47\n81\nRetail\n12,230\n23\n12,253\n77\n75\nLodging\n4,555\n19\n4,574\n31\n53\nTotal Real Estate Exposure\n$\n206,740\n$\n310\n$\n207,050\n69\n%\n82\n%\n(a)\nTotal Multifamily exposure is approximately 99% performing. Multifamily exposure is largely in California.\n(b)\nOther Income Producing Properties consists of clients with diversified property types or other property types, including data centers, outside of categories listed in the table above.\n(c)\nReal Estate exposure is approximately 83% secured; unsecured exposure is largely investment-grade primarily to Real Estate Investment Trusts (\u201cREITs\u201d) and Real Estate Operating Companies (\u201cREOCs\u201d) whose underlying assets are generally diversified.\n(d)\nRepresents drawn exposure as a percentage of credit exposure.\n122\nJPMorgan Chase & Co./2025 Form 10-K\nConsumer & Retail\nConsumer & Retail exposure was $133.9\u00a0billion as of December\u00a031, 2025. Criticized exposure increased by $1.2\u00a0billion from $6.9\u00a0billion at December\u00a031, 2024 to $8.0\u00a0billion at December\u00a031, 2025, driven by net downgrades and new lending-related commitments, largely offset by net portfolio activity.\nDecember\u00a031, 2025\n(in millions, except ratios)\nLoans and lending-related commitments\nDerivative receivables\nCredit exposure\n% Investment-grade\n% Drawn\n(d)\nBusiness and Consumer Services\n$\n38,160\n\n$\n501\n\n$\n38,661\n\n41\n\n%\n43\n\n%\nRetail\n(a)\n36,492\n\n434\n\n36,926\n\n55\n\n29\n\nFood and Beverage\n31,513\n\n855\n\n32,368\n\n53\n\n36\n\nConsumer Hard Goods\n14,824\n\n309\n\n15,133\n\n43\n\n33\n\nLeisure\n(b)\n10,721\n\n136\n\n10,857\n\n33\n\n45\n\nTotal Consumer & Retail\n(c)\n$\n131,710\n\n$\n2,235\n\n$\n133,945\n\n47\n\n%\n37\n\n%\nDecember\u00a031, 2024\n(in millions, except ratios)\nLoans and lending-related commitments\nDerivative receivables\nCredit exposure\n% Investment-grade\n% Drawn\n(d)\nBusiness and Consumer Services\n$\n34,534\n$\n412\n$\n34,946\n42\n%\n41\n%\nRetail\n(a)\n34,917\n261\n35,178\n51\n31\nFood and Beverage\n34,774\n683\n35,457\n61\n34\nConsumer Hard Goods\n13,796\n208\n14,004\n43\n35\nLeisure\n(b)\n10,186\n44\n10,230\n26\n43\nTotal Consumer & Retail\n$\n128,207\n$\n1,608\n$\n129,815\n48\n%\n36\n%\n(a)\nRetail consists of Home Improvement & Specialty Retailers, Discount & Drug Stores, Restaurants, Specialty Apparel, Supermarkets, and Department Stores.\n(b)\nLeisure consists of Arts & Culture, Travel Services, Gaming, and Sports & Recreation. As of December\u00a031, 2025, approximately 88% of the noninvestment-grade Leisure portfolio is secured.\n(c)\nConsumer & Retail exposure is approximately 57% secured; unsecured exposure is approximately 77% investment-grade.\n(d)\nRepresents drawn exposure as a percentage of credit exposure.\nJPMorgan Chase & Co./2025 Form 10-K\n123\nManagement\u2019s discussion and analysis\nLoans\nIn its wholesale businesses, the Firm provides loans to a variety of clients, ranging from large corporate and institutional clients to high-net-worth individuals. Refer to Note 12 for a further discussion on loans, including information about delinquencies, loan modifications and other credit quality indicators.\nThe following table presents the change in the nonaccrual loan portfolio for the years ended December\u00a031, 2025 and 2024. Since December\u00a031, 2024, nonaccrual loan exposure increased by $273 million, driven by certain exposures in Technology, Media & Telecommunications, Utilities, Central Government, and Oil & Gas, in each case primarily resulting from downgrades, largely offset by certain exposures in Healthcare and Consumer & Retail, in each case primarily resulting from charge-off activity, upgrades, and loan sales.\nWholesale nonaccrual loan activity\nYear ended December 31,\n(in millions)\n2025\n2024\nBeginning balance\n$\n4,911\n\n$\n2,714\nAdditions\n5,343\n\n5,841\nReductions:\nPaydowns and other\n1,890\n\n2,387\nGross charge-offs\n1,481\n\n780\nReturned to performing status\n1,538\n\n392\nSales\n161\n\n85\nTotal reductions\n5,070\n\n3,644\nNet changes\n273\n\n2,197\nEnding balance\n$\n5,184\n\n$\n4,911\nThe following table presents net charge-offs/recoveries, which are defined as gross charge-offs less recoveries, for the years ended December\u00a031, 2025 and 2024. The amounts in the table below do not include gains or losses from sales of nonaccrual loans recognized in noninterest revenue.\nWholesale net charge-offs increased for the year ended December\u00a031, 2025 compared to the prior year, primarily due to increases in Commercial and industrial, including in Technology, Media & Telecommunications and Healthcare, as well as estimated losses related to borrower fraud in certain secured lending facilities.\nWholesale net charge-offs/(recoveries)\nYear ended December 31,\n(in millions, except ratios)\n2025\n2024\nLoans\nAverage loans retained\n$\n732,793\n\n$\n673,310\nGross charge-offs\n1,787\n\n1,022\nGross recoveries collected\n(189)\n(200)\nNet charge-offs/(recoveries)\n1,598\n\n822\nNet charge-off/(recovery) rate\n0.22\n\n%\n0.12\n%\n124\nJPMorgan Chase & Co./2025 Form 10-K\nMaturities and sensitivity to changes in interest rates\nThe table below sets forth wholesale loan maturities and the distribution between fixed and floating interest rates based on the stated terms of the loan agreements by loan class. Refer to Note 12 for further information on loan classes.\nDecember\u00a031, 2025\n(in millions)\n\u00a01 year or less\n(b)\nAfter 1 year through 5 years\nAfter 5 years through 15 years\nAfter 15 years\nTotal\nWholesale loans:\nSecured by real estate\n$\n13,998\n\n$\n66,811\n\n$\n60,499\n\n$\n38,638\n\n$\n179,946\n\nCommercial and industrial\n52,480\n\n118,190\n\n18,486\n\n156\n\n189,312\n\nOther\n217,587\n\n203,197\n\n45,169\n\n8,163\n\n474,116\n\nTotal wholesale loans\n$\n284,065\n\n$\n388,198\n\n$\n124,154\n\n$\n46,957\n\n$\n843,374\n\nLoans due after one year at fixed interest rates\nSecured by real estate\n$\n14,737\n\n$\n14,356\n\n$\n915\n\nCommercial and industrial\n5,728\n\n2,109\n\n7\n\nOther\n28,116\n\n15,459\n\n4,797\n\nLoans due after one year at variable interest rates\n(a)\nSecured by real estate\n$\n52,074\n\n$\n46,143\n\n$\n37,722\n\nCommercial and industrial\n112,463\n\n16,377\n\n148\n\nOther\n175,080\n\n29,710\n\n3,368\n\nTotal wholesale loans\n$\n388,198\n\n$\n124,154\n\n$\n46,957\n\n(a)\nIncludes loans that have an initial fixed interest rate that resets to a variable rate as the variable rate will be the prevailing rate over the life of the loan.\n(b)\nIncludes loans held-for-sale, demand loans and overdrafts.\nThe following table presents net charge-offs/recoveries, average retained loans and net charge-off/recovery rate by loan class for the years ended December\u00a031, 2025 and 2024.\nYear ended December 31,\n(in millions, except ratios)\nSecured by real estate\nCommercial and industrial\nOther\nTotal\n2025\n2024\n2025\n2024\n2025\n2024\n2025\n2024\nNet charge-offs/(recoveries)\n$\n390\n\n$\n313\n$\n882\n\n$\n381\n$\n326\n\n$\n128\n$\n1,598\n\n$\n822\nAverage retained loans\n162,567\n\n162,653\n169,149\n\n169,363\n401,077\n\n341,294\n732,793\n\n673,310\nNet charge-off/(recovery) rate\n0.24\n\n%\n0.19\n%\n0.52\n\n%\n0.22\n%\n0.08\n\n%\n0.04\n%\n0.22\n\n%\n0.12\n%\nJPMorgan Chase & Co./2025 Form 10-K\n125\nManagement\u2019s discussion and analysis\nLending-related commitments\nThe Firm uses lending-related financial instruments, such as commitments (including revolving credit facilities) and guarantees, to address the financing needs of its clients. The contractual amounts of these financial instruments represent the maximum possible credit risk should the clients draw down on these commitments or when the Firm fulfills its obligations under these guarantees, and the clients subsequently fail to perform according to the terms of these contracts. Most of these commitments and guarantees have historically been refinanced, extended, cancelled, or expired without being drawn upon or a default occurring. As a result, the Firm does not believe that the total contractual amount of these wholesale lending-related commitments is representative of the Firm\u2019s expected future credit exposure or funding requirements. Refer to Note 28 for further information on wholesale lending-related commitments.\nReceivables from customers\nReceivables from customers reflect held-for-investment margin loans to brokerage clients in CIB, CCB and AWM that are collateralized by assets maintained in the clients\u2019 brokerage accounts (including cash on deposit, and primarily liquid and readily marketable debt or equity securities). To manage its credit risk, the Firm establishes margin requirements and monitors the required margin levels on an ongoing basis, and requires clients to deposit additional cash or other collateral, or to reduce positions, when appropriate. Credit risk arising from lending activities subject to collateral maintenance requirements is generally mitigated by factors such as the short-term nature of the activity, the fair value of collateral held and the Firm\u2019s right to call for, and the borrower\u2019s obligation to provide, additional margin when the fair value of the collateral declines. Because of these mitigating factors, these receivables generally do not require an allowance for credit losses. However, if in management\u2019s judgment, an allowance for credit losses is required, the Firm estimates expected credit losses based on the value of the collateral and probability of borrower default. These receivables are reported within accrued interest and accounts receivable on the Firm\u2019s Consolidated balance sheets.\nRefer to Note 13 for further information on the Firm\u2019s accounting policies for the allowance for credit losses.\nDerivative contracts\nDerivatives enable clients and counterparties to manage risk, including credit risk and risks arising from fluctuations in interest rates, foreign exchange and equities and commodities prices. The Firm makes markets in derivatives in order to meet these needs and uses derivatives to manage certain risks associated with net open risk positions from its market-making activities, including the counterparty credit risk arising from derivative receivables. The Firm also uses derivative instruments to manage its own credit risk and other market risk exposure. The nature of the counterparty and the settlement mechanism of the\nderivative affect the credit risk to which the Firm is exposed. For over-the-counter (\u201cOTC\u201d) derivatives, the Firm is exposed to the credit risk of the derivative counterparty. For exchange-traded derivatives (\u201cETD\u201d), such as futures and options, and cleared over-the-counter (\u201cOTC-cleared\u201d) derivatives, the Firm can also be exposed to the credit risk of the relevant CCP. Where possible, the Firm seeks to mitigate its credit risk exposures arising from derivative contracts through the use of legally enforceable master netting arrangements and collateral agreements. The percentage of the Firm\u2019s OTC derivative transactions subject to collateral agreements \u2014 excluding foreign exchange spot trades, which are not typically covered by collateral agreements due to their short maturity and centrally cleared trades that are settled daily \u2014 was approximately 86% at both December\u00a031, 2025 and 2024. Refer to Note 5 for additional information on the Firm\u2019s use of collateral agreements and for a further discussion of derivative contracts, counterparties and settlement types.\nThe fair value of derivative receivables reported on the Consolidated balance sheets was $57.8 billion and $61.0 billion at December\u00a031, 2025 and 2024, respectively. The decrease was primarily as a result of market movements. Derivative receivables represent the fair value of the derivative contracts after giving effect to legally enforceable master netting agreements and the related cash collateral held by the Firm.\nIn addition, the Firm holds liquid securities and other cash collateral that may be used as security when the fair value of the client\u2019s exposure is in the Firm\u2019s favor. For these purposes, the definition of liquid securities is consistent with the definition of high quality liquid assets as defined in the LCR rule.\nIn management\u2019s view, the appropriate measure of current credit risk should also take into consideration other collateral, which generally represents securities that do not qualify as high quality liquid assets under the LCR rule. The benefits of these additional collateral amounts for each counterparty are subject to a legally enforceable master netting agreement and limited to the net amount of the derivative receivables for each counterparty.\nThe Firm also holds additional collateral (primarily cash, G7 government securities, other liquid government agency and guaranteed securities, and corporate debt and equity securities) delivered by clients at the initiation of transactions, as well as collateral related to contracts that have a non-daily call frequency and collateral that the Firm has agreed to return but has not yet settled as of the reporting date. Although this collateral does not reduce the receivables balances and is not included in the tables below, it is available as security against potential exposure that could arise should the fair value of the client\u2019s derivative contracts move in the Firm\u2019s favor. Refer to Note 5 for additional information on the Firm\u2019s use of collateral agreements for derivative transactions.\n126\nJPMorgan Chase & Co./2025 Form 10-K\nThe following tables summarize the net derivative receivables and the internal ratings profile for the periods presented.\nDerivative receivables\nDecember 31,\n(in millions)\n2025\n2024\nTotal, net of cash collateral\n$\n57,777\n\n$\n60,967\nLiquid securities and other cash collateral held against derivative receivables\n(28,891)\n(28,160)\nTotal, net of liquid securities and other cash collateral\n$\n28,886\n\n$\n32,807\nOther collateral held against derivative receivables\n(949)\n(1,021)\nTotal, net of collateral\n$\n27,937\n\n$\n31,786\nRatings profile of derivative receivables\n2025\n2024\nDecember 31,\n(in millions, except ratios)\nExposure net of collateral\n% of exposure net of collateral\nExposure net of collateral\n% of exposure net of collateral\nInvestment-grade\n$\n18,877\n\n68\n\n%\n$\n23,783\n75\n%\nNoninvestment-grade\n9,060\n\n32\n\n8,003\n25\nTotal\n$\n27,937\n\n100\n\n%\n$\n31,786\n100\n%\nWhile useful as a current view of credit exposure, the net fair value of the derivative receivables does not capture the potential future variability of that credit exposure. To capture this variability, the Firm calculates, on a client-by-client basis, three measures of potential derivatives-related credit loss: Peak, Derivative Risk Equivalent (\u201cDRE\u201d), and Average exposure (\u201cAVG\u201d). These measures all incorporate netting and collateral benefits, where applicable.\nPeak represents a conservative measure of potential derivative exposure, including the benefit of collateral, to a counterparty calculated in a manner that is broadly equivalent to a 97.5% confidence level over the life of the transaction. Peak is the primary measure used by the Firm for setting credit limits for derivative contracts, senior management reporting and derivatives exposure management.\nDRE exposure is a measure that expresses the risk of derivative exposure, including the benefit of collateral, on a basis intended to be equivalent to the risk of loan exposures. DRE is a less extreme measure of potential credit loss than Peak.\nFinally, AVG is a measure of the expected fair value of the Firm\u2019s derivative exposures, including the benefit of collateral, at future time periods. AVG over the total life of the derivative contract is used as the primary metric for pricing purposes and is used to calculate credit risk capital and CVA, as further described below.\nThe fair value of the Firm\u2019s derivative receivables incorporates CVA to reflect the credit quality of counterparties. CVA is based on the Firm\u2019s AVG to a counterparty and the counterparty\u2019s credit spread in the credit derivatives market. The Firm believes that active risk management is essential to controlling the dynamic credit risk in the derivatives portfolio. In addition, the Firm\u2019s risk management process for derivatives exposures takes into consideration the\npotential impact of wrong-way risk, which is broadly defined as the risk that exposure to a counterparty is positively correlated with the impact of a default by the same counterparty, which could cause exposure to increase at the same time as the counterparty\u2019s capacity to meet its obligations is decreasing. Many factors may influence the nature and magnitude of these correlations over time. To the extent that these correlations are identified, the Firm may adjust the CVA associated with a particular counterparty\u2019s AVG. The Firm risk manages exposure to changes in CVA by entering into credit derivative contracts, as well as interest rate, foreign exchange, equity and commodity derivative contracts.\nThe below graph shows exposure profiles to the Firm\u2019s current derivatives portfolio over the next 10\u00a0years as calculated by the Peak, DRE and AVG metrics. The three measures generally show that exposure will decline after the first year, if no new trades are added to the portfolio.\nExposure profile of derivatives measures\nDecember\u00a031, 2025\n(in billions)\nJPMorgan Chase & Co./2025 Form 10-K\n127\nManagement\u2019s discussion and analysis\nCredit derivatives\nThe Firm uses credit derivatives for two primary purposes: first, in its capacity as a market-maker, and second, as an end-user to manage the Firm\u2019s own credit risk associated with various exposures.\nCredit portfolio management activities\nIncluded in the Firm\u2019s end-user activities are credit derivatives used to mitigate the credit risk associated with traditional lending activities (loans and lending-related commitments) and derivatives counterparty exposure in the Firm\u2019s wholesale businesses (collectively, \u201ccredit portfolio management activities\u201d). Information on credit portfolio management activities is provided in the table below.\nThe Firm also uses credit derivatives as an end-user to manage other exposures, including credit risk arising from certain securities held in the Firm\u2019s market-making businesses. These credit derivatives are not included in credit portfolio management activities.\nCredit derivatives and credit-related notes used in credit portfolio management activities\nDecember 31,\n(in millions)\nNotional amount of protection purchased and sold\n(a)\n2025\n2024\nCredit derivatives and credit-related notes used to manage:\nLoans and lending-related commitments\n$\n9,899\n\n$\n25,216\nDerivative receivables\n13,999\n\n15,672\nCredit derivatives and credit-related notes used in credit portfolio management activities\n$\n23,898\n\n$\n40,888\n(a)\nAmounts are presented net, considering the Firm\u2019s net protection purchased or sold with respect to each underlying reference entity or index.\nThe credit derivatives used in credit portfolio management activities do not qualify for hedge accounting under U.S. GAAP; these derivatives are reported at fair value, with gains and losses recognized in principal transactions revenue. In contrast, the loans and lending-related commitments being risk-managed are accounted for on an accrual basis. This asymmetry in accounting treatment, between loans and lending-related commitments and the credit derivatives used in credit portfolio management activities, causes earnings volatility that is not representative, in the Firm\u2019s view, of the true changes in value of the Firm\u2019s overall credit exposure.\nThe effectiveness of credit default swaps (\u201cCDS\u201d) as a hedge against the Firm\u2019s exposures may vary depending on a number of factors, including the named reference entity (i.e., the Firm may experience losses on specific exposures that are different than the named reference entities in the purchased CDS); the contractual terms of the CDS (which may have a defined credit event that does not align with an actual loss realized by the Firm); and the maturity of the Firm\u2019s CDS protection (which in some cases may be shorter than the Firm\u2019s exposures). However, the Firm generally seeks to purchase credit protection with a maturity date that is the same or similar to the maturity date of the exposure for which the protection was purchased, and remaining differences in maturity are actively monitored and managed by the Firm. Refer to Credit derivatives in Note 5 for further information on credit derivatives and derivatives used in credit portfolio management activities.\n128\nJPMorgan Chase & Co./2025 Form 10-K\nALLOWANCE FOR CREDIT LOSSES\nThe Firm\u2019s allowance for credit losses represents management's estimate of expected credit losses over the remaining expected life of the Firm's financial assets measured at amortized cost and certain off-balance sheet lending-related commitments. The Firm's allowance for credit losses generally consists of:\n\u2022\nthe allowance for loan losses, which covers the Firm\u2019s retained loan portfolios (scored and risk-rated) and is presented separately on the Consolidated balance sheets,\n\u2022\nthe allowance for lending-related commitments, which is reflected in accounts payable and other liabilities on the Consolidated balance sheets, and\n\u2022\nthe allowance for credit losses on investment securities, which is reflected in investment securities on the Consolidated balance sheets.\nDiscussion of changes in the allowance\nThe allowance for credit losses as of December\u00a031, 2025 was $31.2 billion, reflecting a net addition of $4.4 billion from December\u00a031, 2024.\nThe net addition to the allowance for credit losses included:\n\u2022\n$3.3 billion in\nconsumer\n, driven by $2.2 billion related to the Apple Card transaction, loan growth in Card Services and the impact of changes in the Firm's weighted-average macroeconomic outlook, partially offset by reduced borrower uncertainty, and\n\u2022\n$1.1\u00a0billion in\nwholesale\n, driven by net increases in the loan and lending-related commitment portfolios, an update to loss assumptions on certain leveraged loans, and net changes in credit quality of client-specific exposures, partially offset by the impact of changes in the Firm's weighted-average macroeconomic outlook and a reduction due to the impact of charge-offs.\nThe Firm's qualitative adjustments and its weighted-average macroeconomic outlook continued to include additional weight placed on the adverse scenarios to reflect ongoing uncertainties and downside risks related to the geopolitical and macroeconomic environment. During 2025, the Firm further increased the weight placed on the adverse scenarios.\nThe Firm's allowance for credit losses is estimated using a weighted average of five internally developed macroeconomic scenarios. The adverse scenarios incorporate more punitive macroeconomic factors than the central case assumptions provided in the following table, resulting in:\n\u2022\na weighted average U.S. unemployment rate peaking at 5.8% in the fourth quarter of 2026, and\n\u2022\na weighted average U.S. real GDP level that is 2.1% lower than the central case at the end of the second quarter of 2027.\nThe following table presents the Firm\u2019s central case assumptions for the periods presented:\nCentral case assumptions\nat December\u00a031, 2025\n2Q26\n4Q26\n2Q27\nU.S. unemployment rate\n(a)\n4.6\n\n%\n4.4\n\n%\n4.2\n\n%\nYoY growth in U.S. real GDP\n(b)\n2.0\n\n%\n1.8\n\n%\n1.9\n\n%\nCentral case assumptions\nat December 31, 2024\n2Q25\n4Q25\n2Q26\nU.S. unemployment rate\n(a)\n4.5\n%\n4.3\n%\n4.3\n%\nYoY growth in U.S. real GDP\n(b)\n2.0\n%\n1.9\n%\n1.8\n%\n(a)\nReflects quarterly average of forecasted U.S. unemployment rate.\n(b)\nThe year over year growth in U.S. real GDP in the forecast horizon of the central scenario is calculated as the percentage change in U.S. real GDP levels from the prior year.\nSubsequent changes to this forecast and related estimates will be reflected in the provision for credit losses in future periods.\n\nRefer to Consumer Credit Portfolio on pages 112\u2013117, Wholesale Credit Portfolio on pages 118\u2013128 and Note 12 for additional information on the consumer and wholesale credit portfolios.\nRefer to Critical Accounting Estimates Used by the Firm on pages 154\u2013157 for further information on the allowance for credit losses and related management judgments.\nJPMorgan Chase & Co./2025 Form 10-K\n129\nManagement\u2019s discussion and analysis\nAllowance for credit losses and related information\n2025\n2024\nYear ended December 31,\nConsumer, excluding\ncredit card\nCredit card\nWholesale\nTotal\nConsumer, excluding\ncredit card\nCredit card\nWholesale\nTotal\n(in millions, except ratios)\nAllowance for loan losses\nBeginning balance at January 1,\n$\n1,807\n\n$\n14,600\n\n$\n7,938\n\n$\n24,345\n\n$\n1,856\n$\n12,450\n$\n8,114\n$\n22,420\nGross charge-offs\n1,089\n\n9,164\n\n1,787\n\n12,040\n\n1,299\n8,198\n1,022\n10,519\nGross recoveries collected\n(510)\n(1,492)\n(189)\n(2,191)\n(625)\n(1,056)\n(200)\n(1,881)\nNet charge-offs\n579\n\n7,672\n\n1,598\n\n9,849\n\n674\n7,142\n822\n8,638\nProvision for loan losses\n692\n\n8,629\n\n1,943\n\n11,264\n\n624\n9,292\n578\n10,494\nOther\n\u2014\n\n\u2014\n\n5\n\n5\n\n1\n\u2014\n68\n69\nEnding balance at December 31,\n$\n1,920\n\n$\n15,557\n\n$\n8,288\n\n$\n25,765\n\n$\n1,807\n$\n14,600\n$\n7,938\n$\n24,345\nAllowance for lending-related commitments\nBeginning balance at January 1,\n$\n82\n\n$\n\u2014\n\n$\n2,019\n\n$\n2,101\n\n$\n75\n$\n\u2014\n$\n1,899\n$\n1,974\nProvision for lending-related commitments\n1\n\n2,200\n\n(d)\n768\n\n2,969\n\n7\n\u2014\n121\n128\nOther\n\u2014\n\n\u2014\n\n1\n\n1\n\n\u2014\n\u2014\n(1)\n(1)\nEnding balance at December 31,\n$\n83\n\n$\n2,200\n\n$\n2,788\n\n$\n5,071\n\n$\n82\n$\n\u2014\n$\n2,019\n$\n2,101\nImpairment methodology\nAsset-specific\n(a)\n$\n(647)\n$\n\u2014\n\n$\n707\n\n$\n60\n\n$\n(728)\n$\n\u2014\n$\n526\n$\n(202)\nPortfolio-based\n2,567\n\n15,557\n\n7,581\n\n25,705\n\n2,535\n14,600\n7,412\n24,547\nTotal allowance for loan losses\n$\n1,920\n\n$\n15,557\n\n$\n8,288\n\n$\n25,765\n\n$\n1,807\n$\n14,600\n$\n7,938\n$\n24,345\nImpairment methodology\nAsset-specific\n$\n\u2014\n\n$\n\u2014\n\n$\n119\n\n$\n119\n\n$\n\u2014\n$\n\u2014\n$\n109\n$\n109\nPortfolio-based\n83\n\n2,200\n\n(d)\n2,669\n\n4,952\n\n82\n\u2014\n1,910\n1,992\nTotal allowance for lending-related commitments\n$\n83\n\n$\n2,200\n\n$\n2,788\n\n$\n5,071\n\n$\n82\n$\n\u2014\n$\n2,019\n$\n2,101\nTotal allowance for investment securities\nNA\nNA\nNA\n$\n106\n\nNA\nNA\nNA\n$\n152\nTotal allowance for credit losses\n(b)\n$\n2,003\n\n$\n17,757\n\n$\n11,076\n\n$\n30,942\n\n$\n1,889\n$\n14,600\n$\n9,957\n$\n26,598\nMemo:\nRetained loans, end of period\n$\n368,741\n\n$\n247,797\n\n$\n792,367\n\n$\n1,408,905\n\n$\n376,334\n$\n232,860\n$\n690,396\n$\n1,299,590\nRetained loans, average\n371,238\n\n231,644\n\n732,793\n\n1,335,675\n\n384,001\n214,033\n673,310\n1,271,344\nCredit ratios\nAllowance for loan losses to retained loans\n0.52\n\n%\n6.28\n\n%\n1.05\n\n%\n1.83\n\n%\n0.48\n%\n6.27\n%\n1.15\n%\n1.87\n%\nAllowance for loan losses to retained nonaccrual loans\n(c)\n50\n\nNA\n188\n\n311\n\n56\nNA\n201\n339\nAllowance for loan losses to retained nonaccrual loans excluding credit card\n50\n\nNA\n188\n\n123\n\n56\nNA\n201\n136\nNet charge-off rates\n0.16\n\n3.31\n\n0.22\n\n0.74\n\n0.18\n3.34\n0.12\n0.68\n(a)\nIncludes collateral-dependent loans, including those for which foreclosure is deemed probable, and nonaccrual risk-rated loans.\n(b)\nAt December\u00a031, 2025 and 2024, in addition to the allowance for credit losses in the table above, the Firm also had an allowance for credit losses of $288\u00a0million and $268\u00a0million, respectively, associated with certain accounts receivable in CIB.\n(c)\nThe Firm\u2019s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.\n(d)\nRepresents the impact of the Apple Card transaction.\n130\nJPMorgan Chase & Co./2025 Form 10-K\nAllocation of allowance for loan losses\nThe table below presents a breakdown of the allowance for loan losses by loan class. Refer to Note 12 for further information on loan classes.\n2025\n2024\nDecember 31,\n(in millions, except ratios)\nAllowance for loan losses\n% of retained loans to total retained loans\nAllowance for loan losses\n% of retained loans to total retained loans\nResidential real estate\n$\n869\n\n21\n\n%\n$\n666\n24\n%\nAuto and other\n1,051\n\n5\n\n1,141\n5\nConsumer, excluding credit card\n1,920\n\n26\n\n1,807\n29\nCredit card\n15,557\n\n18\n\n14,600\n18\nTotal consumer\n17,477\n\n44\n\n16,407\n47\nSecured by real estate\n2,226\n\n12\n\n2,978\n12\nCommercial and industrial\n4,240\n\n12\n\n3,350\n13\nOther\n1,822\n\n32\n\n1,610\n28\nTotal wholesale\n8,288\n\n56\n\n7,938\n53\nTotal\n$\n25,765\n\n100\n\n%\n$\n24,345\n100\n%\nJPMorgan Chase & Co./2025 Form 10-K\n131\nManagement\u2019s discussion and analysis\nINVESTMENT PORTFOLIO RISK MANAGEMENT\nInvestment portfolio risk is the risk associated with the loss of principal or a reduction in expected returns on investments arising from the investment securities portfolio or from principal investments. The investment securities portfolio is predominantly held by Treasury and CIO in connection with the Firm's balance sheet and asset-liability management objectives. Principal investments are predominantly privately-held financial instruments and are managed in the LOBs and Corporate. Investments are typically intended to be held over extended periods and, accordingly, the Firm has no expectation for short-term realized gains with respect to these investments.\nInvestment securities risk\nInvestment securities risk includes the exposure associated with a default in the payment of principal and interest. This risk is mitigated given that the investment securities portfolio held by Treasury and CIO predominantly consists of high-quality securities. At December\u00a031, 2025, the size of the Treasury and CIO investment securities portfolio, net of the allowance for credit losses, was $774.0 billion, and the average credit rating of the securities comprising the portfolio was AA+ (based upon external ratings where available, and where not available, based primarily upon internal risk ratings). Refer to Corporate results on pages 80\u201382 and Note 10 for further information on the investment securities portfolio and internal risk ratings. Refer to Liquidity Risk Management on pages 100\u2013107 for further information on related liquidity risk. Refer to Market Risk Management on pages 133-142 for further information on the market risk inherent in the portfolio.\nGovernance and oversight\nInvestment securities risks are governed by the Firm\u2019s Risk Appetite framework, and reviewed at the CTC Risk Committee with regular updates provided to the Board Risk Committee.\nThe Firm\u2019s independent control functions are responsible for reviewing the appropriateness of the carrying value of investment securities in accordance with relevant policies. Approved levels for investment securities are established for each risk category, including capital and credit risks.\nPrincipal investment risk\nPrincipal investments are typically privately-held financial instruments representing ownership interests or other forms of junior capital. In general,\n principal investments include tax-oriented investments and investments made to enhance or accelerate the Firm\u2019s business strategies and exclude those that are consolidated on the Firm's balance sheets.\nThese investments are made by dedicated investing businesses or as part of a broader business strategy. The Firm\u2019s principal investments are managed by the LOBs and Corporate and are reflected within their respective financial results. The Firm\u2019s investments will continue to evolve based on market circumstances and in line with its strategic initiatives.\nThe table below presents the aggregate carrying values of the principal investment portfolios as of December 31, 2025 and 2024.\n(in billions)\nDecember 31, 2025\nDecember 31, 2024\nTax-oriented investments, primarily in alternative energy and affordable housing\n$\n35.7\n\n$\n33.3\nPrivate equity, various debt and equity instruments, and real assets\n11.3\n\n9.1\nTotal carrying value\n$\n47.0\n\n$\n42.4\nGovernance and oversight\nThe Firm\u2019s approach to managing principal investment risk is consistent with the Firm\u2019s risk governance structure. The Firm has established a Firmwide risk policy framework for all principal investing activities that includes approval by executives who are independent from the investing businesses, as appropriate.\nThe Firm\u2019s independent control functions\n\nare responsible for reviewing the appropriateness of the carrying value of investments in accordance with relevant policies. As part of the risk governance structure, approved levels for investments are established and monitored for each relevant business or segment in order to manage the overall size of the portfolios. The Firm also conducts stress testing on these portfolios using specific scenarios that estimate losses based on significant market moves and/or other risk events.\n132\nJPMorgan Chase & Co./2025 Form 10-K\nMARKET RISK MANAGEMENT\nMarket risk is the risk associated with the effect of changes in market factors such as interest and foreign exchange rates, equity and commodity prices, credit spreads or implied volatilities, on the value of assets and liabilities held for both the short and long term.\nMarket Risk Management\nMarket Risk Management monitors market risks throughout the Firm and defines market risk policies and procedures.\nMarket Risk Management seeks to measure risk, facilitate efficient risk/return decisions, reduce volatility in operating performance and provide transparency into the Firm\u2019s market risk profile for senior management, the Board of Directors and regulators. Market Risk Management is responsible for the following functions:\n\u2022\nMaintaining a market risk policy framework\n\u2022\nIndependently measuring and monitoring LOB, Corporate, and Firmwide market risk\n\u2022\nDefining, approving and monitoring limits\n\u2022\nPerforming stress testing and qualitative risk assessments\nRisk measurement\nMeasures used to capture market risk\nThere is no single measure to capture market risk and therefore Market Risk Management uses various metrics, both statistical and nonstatistical, to assess risk including:\n\u2022\nValue-at-risk\n\u2022\nStress testing\n\u2022\nProfit and loss drawdowns\n\u2022\nEarnings-at-risk\n\u2022\nEconomic value sensitivity\n\u2022\nOther sensitivity-based measures\nRisk monitoring and control\nMarket risk exposure is managed primarily through a series of limits set in the context of the market environment and business strategy. In setting limits, Market Risk Management takes into consideration factors such as market volatility, product liquidity, accommodation of client business, and management judgment. Market Risk Management maintains different levels of limits. Firm level limits include VaR and stress limits. Similarly, LOB and Corporate limits include VaR and stress limits and may be supplemented by certain nonstatistical risk measures such as profit and loss drawdowns. Limits may also be set within the LOBs and Corporate, as well as at the legal entity level.\nMarket Risk Management sets limits and regularly reviews and updates them as appropriate. Senior management is responsible for reviewing and approving certain of these risk limits on an ongoing basis. Limits that have not been reviewed within specified time periods by Market Risk Management are reported to senior management. The LOBs and Corporate are responsible for adhering to established limits against which exposures are monitored and reported.\nLimit breaches are required to be reported in a timely manner to limit approvers, which include Market Risk Management and senior management. In the event of a breach, Market Risk Management consults with senior members of appropriate groups within the Firm to determine the suitable course of action required to return the applicable positions to compliance, which may include a reduction in risk in order to remedy the breach or granting a temporary increase in limits to accommodate an expected increase in client activity and/or market volatility. Firm, Corporate or LOB-level limit breaches are escalated as appropriate.\nModels used to measure market risk are inherently imprecise and are limited in their ability to measure certain risks or to predict losses. This imprecision may be heightened when sudden or severe shifts in market conditions occur. For additional discussion on model uncertainty refer to Estimations and Model Risk Management on page 153.\nMarket Risk Management periodically reviews the Firm\u2019s existing market risk measures to identify opportunities for enhancement, and to the extent appropriate, will calibrate those measures accordingly over time.\nJPMorgan Chase & Co./2025 Form 10-K\n133\nManagement\u2019s discussion and analysis\nThe following table summarizes the predominant business activities and related market risks, as well as positions which give rise to market risk and certain measures used to capture those risks, for each LOB and Corporate.\nIn addition to the predominant business activities, each LOB and Corporate may engage in principal investing activities. To the extent principal investments are deemed market risk sensitive, they are reflected in relevant risk measures and captured in the table below. Refer to Investment Portfolio Risk Management on page 132 for additional discussion on principal investments.\nLOBs and Corporate\nPredominant business activities\nRelated market risks\nPositions included in Risk Management VaR\nPositions included in earnings-at-risk\nPositions included in other sensitivity-based measures\nCCB\n\u2022\nOriginates and services mortgage loans\n\u2022\nOriginates loans and takes deposits\n\u2022\nRisk from changes in the probability of newly originated mortgage commitments closing\n\u2022\nInterest rate risk and prepayment risk\n\u2022\nMortgage commitments, classified as derivatives\n\u2022\nWarehouse loans that are fair value option elected, classified as loans \u2013 debt instruments\n\u2022\nMSRs\n\u2022\nHedges of mortgage commitments, warehouse loans and MSRs, classified as derivatives\n\u2022\nInterest-only and mortgage-backed securities, classified as trading assets-debt instruments, and related hedges, classified as derivatives\n\u2022\nFair value option elected liabilities\n(a)\n\u2022\nRetained and held-for-sale loan portfolios\n\u2022\nDeposits\n\u2022\nFair value option elected liabilities DVA\n(a)\nCIB\n\u2022\nMakes markets and services clients across fixed income, foreign exchange, equities and commodities\n\u2022\nOriginates loans and takes deposits\n\u2022\nRisk of loss from adverse movements in market prices and implied volatilities across interest rate, foreign exchange, credit, commodity and equity instruments\n\u2022\nBasis and correlation risk from changes in the way asset values move relative to one another\n\u2022\nInterest rate risk and prepayment risk\n\u2022\nTrading assets/liabilities-debt and marketable equity instruments, and derivatives, including hedges of the retained loan portfolio\n\u2022\nCertain securities purchased, loaned or sold under resale agreements and securities borrowed\n\u2022\nFair value option elected liabilities\n(a)\n\u2022\nCertain fair value option elected loans\n\u2022\nDerivative CVA and associated hedges\n\u2022\nMarketable equity investments\n\u2022\nRetained and held-for-sale loan portfolios\n\u2022\nDeposits\n\u2022\nPrivately held equity and other investments measured at fair value; and certain real estate-related fair value option elected loans\n\u2022\nDerivatives FVA and fair value option elected liabilities DVA\n(a)\nAWM\n\u2022\nProvides initial capital investments in products such as mutual funds and capital invested alongside third-party investors\n\u2022\nOriginates loans and takes deposits\n\u2022\nRisk from adverse movements in market factors (e.g., market prices, rates and credit spreads)\n\u2022\nInterest rate risk and prepayment risk\n\u2022\nDebt securities held in advance of distribution to clients, classified as trading assets-debt instruments\n\u2022\nTrading assets/liabilities-derivatives that hedge the retained loan portfolio\n\u2022\nRetained and held-for-sale loan portfolios\n\u2022\nDeposits\n\u2022\nInitial seed capital investments and related hedges, classified as derivatives\n\u2022\nCertain deferred compensation and related hedges, classified as derivatives\n\u2022\nCapital invested alongside third-party investors, typically in privately distributed collective vehicles managed by AWM (i.e., co-investments), as well as in third-party funds\nCorporate\n\u2022\nManages the Firm\u2019s liquidity, funding, capital, structural interest rate and foreign exchange risks\n\u2022\nStructural interest rate risk from the Firm\u2019s traditional banking activities\n\u2022\nStructural non-USD  foreign exchange risks\n\u2022\nDerivative positions measured through noninterest revenue in earnings\n\u2022\nMarketable equity investments\n\u2022\nDeposits with banks and financing activities\n\u2022\nInvestment securities portfolio and related interest rate hedges\n\u2022\nCash flow hedges on retained loan portfolios in the LOBs\n\u2022\nLong-term and short-term funding and related interest rate hedges\n\u2022\nDeposits\n\u2022\nForeign exchange hedges of non-U.S. dollar capital investments\n\u2022\nPrivately held equity and other investments measured at fair value\n\u2022\nForeign exchange exposure related to Firm-issued non-USD long-term debt (\u201cLTD\u201d) and related hedges\n(a)\nReflects structured notes in Risk Management VaR and the DVA on structured notes in other sensitivity-based measures.\n134\nJPMorgan Chase & Co./2025 Form 10-K\nValue-at-risk\nJPMorganChase utilizes value-at-risk (\u201cVaR\u201d), a statistical risk measure, to estimate the potential loss from adverse market moves in the current market environment. The Firm has a single VaR framework used as a basis for calculating Risk Management VaR and Regulatory VaR.\nThe framework is employed across the Firm using historical simulation based on data for the previous 12 months. The framework\u2019s approach assumes that historical changes in market values are representative of the distribution of potential outcomes in the immediate future. The Firm believes the use of Risk Management VaR provides a daily measure of risk that is closely aligned to risk management decisions made by the LOBs and Corporate and, along with other market risk measures, provides the appropriate information needed to respond to risk events.\nThe Firm\u2019s Risk Management VaR is calculated assuming a one-day holding period and an expected tail-loss methodology which approximates a 95% confidence level. Risk Management VaR provides a consistent framework to measure risk profiles and levels of diversification across product types and is used for aggregating risks and monitoring limits across businesses. VaR results are reported as appropriate to various groups including senior management, the Board Risk Committee and regulators.\nUnderlying the overall VaR model framework are individual VaR models that simulate historical market returns for individual risk factors and/or product types. To capture material market risks as part of the Firm\u2019s risk management framework, comprehensive VaR model calculations are performed daily for businesses whose activities give rise to market risk. These VaR models are granular and incorporate numerous risk factors and inputs to simulate daily changes in market values over the historical period; inputs are selected based on the risk profile of each portfolio, as sensitivities and historical time series used to generate daily market values may be different across product types or risk management systems. The VaR model results across all portfolios are aggregated at the Firm level.\nAs VaR is based on historical data, it is an imperfect measure of market risk exposure and potential future losses. In addition, based on their reliance on available historical data, limited time horizons, and other factors, VaR measures are inherently limited in their ability to measure certain risks and to predict losses, particularly those associated with market illiquidity and sudden or severe shifts in market conditions.\nFor certain products, specific risk parameters are not captured in VaR due to the lack of liquidity and availability of appropriate historical data. The Firm uses proxies to estimate the VaR for these and other products when daily time series are not available. It is likely that using an actual price-based time series for these products, if available, would affect the VaR results presented. The Firm therefore considers other nonstatistical measures such as stress testing, in addition to VaR, to capture and manage its market risk positions.\nAs VaR model calculations require daily data and a consistent source for valuation, the daily market data used may be different than the independent third-party data collected for VCG price testing in its monthly valuation process. For example, in cases where market prices are not observable, or where proxies are used in VaR historical time series, the data sources may differ. Refer to Valuation process in Note 2 for further information on the Firm\u2019s valuation process.\nThe Firm\u2019s VaR model calculations are periodically evaluated and enhanced in response to changes in the composition of the Firm\u2019s portfolios, changes in market conditions, improvements in the Firm\u2019s modeling techniques and measurements, and other factors. Such changes may affect historical comparisons of VaR results. Refer to Estimations and Model Risk Management on page 153 for information regarding model reviews and approvals.\nThe Firm calculates separately a daily aggregated VaR in accordance with regulatory rules (\u201cRegulatory VaR\u201d), which is used to derive the Firm\u2019s regulatory VaR-based capital requirements under Basel III capital rules. This Regulatory VaR model framework currently assumes a ten business-day holding period and an expected tail-loss methodology which approximates a 99% confidence level. Regulatory VaR is applied to \u201ccovered\u201d positions as defined by Basel III capital rules, which may be different than the positions included in the Firm\u2019s Risk Management VaR. For example, credit derivative hedges of accrual loans are included in the Firm\u2019s Risk Management VaR, while Regulatory VaR excludes these credit derivative hedges. In addition, in contrast to the Firm\u2019s Risk Management VaR, Regulatory VaR currently excludes the diversification benefit for certain VaR models.\nRefer to JPMorganChase\u2019s Basel III Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm\u2019s website, for additional information on Regulatory VaR and the other components of market risk regulatory capital for the Firm (e.g., VaR-based measure, stressed VaR-based measure and the respective backtesting).\nJPMorgan Chase & Co./2025 Form 10-K\n135\nManagement\u2019s discussion and analysis\nThe table below shows the results of the Firm\u2019s Risk Management VaR measure using a 95% confidence level. VaR can vary significantly as positions change, market volatility fluctuates, and diversification benefits change.\nTotal VaR\nAs of or for the year ended December 31,\n2025\n2024\n(in millions)\n\u00a0Avg.\nMin\nMax\n\u00a0Avg.\nMin\nMax\nCIB trading VaR by risk type\nFixed income\n$\n35\n\n$\n27\n\n$\n51\n\n$\n34\n$\n26\n$\n53\nForeign exchange\n9\n\n6\n\n15\n\n15\n7\n23\nEquities\n17\n\n7\n\n138\n\n(e)\n8\n4\n15\nCommodities and other\n24\n\n10\n\n48\n\n8\n6\n13\nDiversification benefit to CIB trading VaR\n(a)\n(51)\nNM\nNM\n(32)\nNM\nNM\nCIB trading VaR\n34\n\n21\n\n142\n\n33\n27\n42\nCredit Portfolio VaR\n(b)\n21\n\n16\n\n27\n\n22\n18\n28\nDiversification benefit to CIB VaR\n(a)\n(18)\nNM\nNM\n(16)\nNM\nNM\nCIB VaR\n37\n\n23\n\n133\n\n39\n27\n52\nCCB VaR\n4\n\n2\n\n7\n\n3\n1\n6\nAWM VaR\n(c)\n9\n\n8\n\n12\n\n9\n5\n10\nCorporate VaR\n(d)\n10\n\n9\n\n12\n\n23\n7\n102\nDiversification benefit to other VaR\n(a)\n(11)\nNM\nNM\n(10)\nNM\nNM\nOther VaR\n12\n\n10\n\n14\n\n25\n10\n101\nDiversification benefit to CIB and other VaR\n(a)\n(9)\nNM\nNM\n(17)\nNM\nNM\nTotal VaR\n$\n40\n\n$\n25\n\n$\n136\n\n$\n47\n$\n30\n$\n91\n(a)\nDiversification benefit represents the difference between the portfolio VaR and the sum of its individual components. This reflects the non-additive nature of VaR due to imperfect correlation across LOBs, Corporate, and risk types. For maximum and minimum VaR, diversification benefit is not meaningful as the maximum and minimum VaR for each portfolio may have occurred on different trading days than the components.\n(b)\nIncludes the derivative CVA, hedges of the CVA and credit protection purchased against certain retained loans and lending-related commitments, which are reported in principal transactions revenue. This VaR does not include the retained loan portfolio, which is not reported at fair value.\n(c)\nIncludes credit protection purchased against certain retained loans and lending-related commitments. This VaR does not include the retained loan portfolio, which is not reported at fair value.\n(d)\nIncludes Visa Class C common shares which the Firm disposed of in the second and third quarters of 2024 that resulted in elevated average and maximum Corporate VaR, Other VaR and Total VaR.\n(e)\nThe elevated maximum VaR was due to a client-driven equity position that has since matured.\nEffective April 1, 2025, the Firm refined the historical proxy time series inputs to one of its VaR models to more appropriately reflect the risk exposure from certain securitization warehousing loan positions. If this refined time series was effective at the beginning of each year presented, the average Total VaR and each of the components would have been lower by the amounts reported in the following table:\n(In millions)\nAmounts by which reported average VaR would have been lower for the years ended:\nDecember 31, 2025\nDecember 31, 2024\nCIB trading VaR by risk type: Fixed income\n$\n(1)\n$\n(3)\nCIB trading VaR\n(2)\n(3)\nCIB VaR\n(1)\n(3)\nTotal VaR\n(1)\n(2)\n2025 compared with 2024\nAverage Total VaR decreased by $7 million for the year ended December\u00a031, 2025 when compared with the prior year driven by decreased exposure to Visa Class C common shares in Corporate VaR and market volatility rolling out of the one-year historical look-back period in the foreign exchange and fixed income risk types. This decrease was predominantly offset by increased risk exposure in the commodities and equities risk types.\n136\nJPMorgan Chase & Co./2025 Form 10-K\nThe following graph presents daily Risk Management VaR for the four trailing quarters. The movements in the first quarter of 2025 were due to a client-driven equity position that has since matured.\nDaily Risk Management VaR\nFirst Quarter\n2025\nSecond Quarter\n2025\nThird Quarter\n2025\nFourth Quarter\n2025\nJPMorgan Chase & Co./2025 Form 10-K\n137\nManagement\u2019s discussion and analysis\nVaR backtesting\nThe Firm performs daily VaR model backtesting, which compares the daily Risk Management VaR results with the daily gains and losses that are utilized for VaR backtesting purposes. The gains and losses depicted in the chart below do not reflect the Firm\u2019s reported revenue as they exclude certain components of total net revenue, such as those associated with the execution of new transactions (i.e., intraday client-driven trading and intraday risk management activities), fees, commissions, other valuation adjustments and net interest income. These excluded components of total net revenue may more than offset the backtesting gain or loss on a particular day. The definition of backtesting gains and losses above is consistent with the requirements for backtesting under Basel III capital rules.\nA backtesting exception occurs when the daily backtesting loss exceeds the daily Risk Management VaR for the prior day. Under the Firm\u2019s Risk Management VaR methodology, assuming current changes in market values are consistent with the historical changes used in the simulation, the Firm would expect to incur VaR backtesting exceptions five times every 100 trading days on average. The number of VaR backtesting exceptions observed can differ from the statistically expected number of backtesting exceptions if the current level of market volatility is materially different from the level of market volatility during the 12 months of historical data used in the VaR calculation.\nFor the 12 months ended December\u00a031, 2025, the Firm posted backtesting gains on 174 of the 259 days, and observed 12 VaR backtesting exceptions, of which four were in the three months ended December 31, 2025. Firmwide backtesting loss days can differ from the loss days for which Fixed Income Markets and Equity Markets posted losses, as disclosed in CIB Markets revenue, as the population of positions which comprise each metric are different and due to the exclusion of certain components of total net revenue in backtesting gains and losses as described above.\nThe following chart presents the distribution of Firmwide daily backtesting gains and losses for the trailing 12 months and three months ended December\u00a031, 2025. The daily backtesting losses are displayed as a percentage of the corresponding daily Risk Management VaR. The count of days with backtesting losses are shown in aggregate, in fifty percentage point intervals. Backtesting exceptions are displayed within the intervals that are greater than one hundred percent. The results in the chart below differ from the results of backtesting disclosed in the Market Risk section of the Firm\u2019\ns B\nasel III Pillar 3 Regulatory Capital Disclosures reports, which are based on Regulatory VaR applied to the Firm\u2019s covered positions.\nDistribution of Daily Backtesting Gains and Losses\n138\nJPMorgan Chase & Co./2025 Form 10-K\nOther risk measures\nStress testing\nAlong with VaR, stress testing is an important tool used to assess risk. While VaR reflects the risk of loss due to adverse changes in markets using recent historical market behavior, stress testing reflects the risk of loss from hypothetical changes in the value of market risk sensitive positions applied simultaneously. Stress testing measures the Firm\u2019s vulnerability to losses under a range of stressed but possible economic and market scenarios. The results are used to understand the exposures responsible for those potential losses and are measured against limits.\nThe Firm\u2019s stress framework covers market risk sensitive positions in the LOBs and Corporate. The framework is used to calculate multiple magnitudes of potential stress for both market rallies and market sell-offs, assuming significant changes in market factors such as credit spreads, equity prices, interest rates, currency rates and commodity prices, and combines them in multiple ways to capture an array of hypothetical economic and market scenarios.\nThe Firm generates a number of scenarios that focus on tail events in specific asset classes and geographies, including how the event may impact multiple market factors simultaneously. Scenarios also incorporate specific idiosyncratic risks and stress basis risk between different products. The flexibility in the stress framework allows the Firm to construct new scenarios that can test the outcomes against possible future stress events. Stress testing results are reported periodically to senior management of the Firm, as appropriate.\nStress methodologies are governed by the overall stress framework, under the oversight of Market Risk Management. The Firmwide Market Risk Stress Methodology Committee reviews and approves changes to stress testing methodology and scenarios across the Firm. Significant changes to the framework are escalated to senior management, as appropriate. In addition, stress methodology and the models to calculate the stress results are subject to the Firm\u2019s Estimations and Model Risk Management Policy\nThe Firm\u2019s stress testing framework is utilized in calculating the Firm\u2019s CCAR and other stress test results, which are reported periodically to the Board of Directors. In addition, stress testing results are incorporated into the Firm\u2019s Risk Appetite framework, and are reported periodically to the Board Risk Committee.\nProfit and loss drawdowns\nProfit and loss drawdowns are used to highlight trading losses above certain levels of risk tolerance. A profit and loss drawdown is a decline in revenue from its year-to-date peak level.\nStructural interest rate risk management\nThe effect of interest rate exposure on the Firm\u2019s reported net income is important as interest rate risk represents one of the Firm\u2019s significant market risks. Interest rate risk arises not only from trading activities which are included in VaR, but also from the Firm\u2019s traditional banking activities, which include extension of loans and credit facilities, taking deposits, issuing debt, as well as the investment securities portfolio, and associated derivative instruments. Refer to the table on page 134 for a summary by LOB and Corporate identifying positions included in earnings-at-risk.\nGovernance\nThe CTC Risk Committee establishes the Firm\u2019s interest rate risk management policy and related limits, which are subject to approval by the Board Risk Committee. Treasury and CIO, working in partnership with the LOBs, calculates the Firm\u2019s structural interest rate risk profile and reviews it with senior management, including the CTC Risk Committee. In addition, oversight of structural interest rate risk is managed through a dedicated risk function reporting to the CTC CRO. This risk function is responsible for providing independent oversight and governance around assumptions and establishing and monitoring limits for structural interest rate risk, including limits related to earnings-at-risk and economic value sensitivity. The Firm manages structural interest rate risk generally through its investment securities portfolio and interest rate derivatives.\nKey risk drivers and risk management process\nStructural interest rate risk can arise due to a variety of factors, including:\n\u2022\nDifferences in timing among the maturity or repricing of assets, liabilities and off-balance sheet instruments\n\u2022\nDifferences in the amounts of assets, liabilities and off-balance sheet instruments that are maturing or repricing at the same time\n\u2022\nDifferences in the amounts by which short-term and long-term market interest rates change (for example, changes in the slope of the yield curve)\n\u2022\nThe impact of changes in the maturity of various assets, liabilities or off-balance sheet instruments as interest rates change\nThe Firm manages interest rate exposure related to its assets and liabilities on a consolidated, Firmwide basis. Business units transfer their interest rate risk to Treasury and CIO through funds transfer pricing, which takes into account the elements of interest rate exposure that can be risk-managed in financial markets. These elements include asset and liability balances and contractual rates of interest, contractual principal payment schedules, expected prepayment\nJPMorgan Chase & Co./2025 Form 10-K\n139\nManagement\u2019s discussion and analysis\nexperience, interest rate reset dates and maturities, rate indices used for repricing, and any interest rate ceilings or floors for adjustable rate products.\nEarnings-at-risk\nOne way that the Firm evaluates its structural interest rate risk is through earnings-at-risk. Earnings-at-risk estimates the Firm\u2019s interest rate exposure for a given interest rate scenario. It is presented as a sensitivity to a baseline, which includes net interest income and certain interest rate sensitive fees. The baseline uses market interest rates and, in the case of deposits, pricing assumptions. The Firm conducts simulations of changes to this baseline for interest rate-sensitive assets and liabilities denominated in U.S. dollars and other currencies (\u201cnon-U.S. dollar\u201d currencies). These simulations primarily include retained and held-for-sale loans, deposits, deposits with banks and financing activities, investment securities, long-term debt, related interest rate hedges, and funds transfer pricing of other positions in risk management VaR and other sensitivity-based measures as described on page 134. These simulations also include hedges of non-U.S. dollar foreign exchange exposures arising from capital investments. Refer to non-U.S. dollar foreign exchange risk on page 142 for more informa\ntion.\nEarnings-at-risk scenarios estimate the potential change to a baseline over the following 12 months utilizing multiple assumptions. These scenarios include a parallel shift involving changes to both short-term and long-term rates by an equal amount; a steeper yield curve involving holding short-term rates constant and increasing long-term rates; and a flatter yield curve involving increasing short-term rates and holding long-term rates constant or holding short-term rates constant and decreasing long-term rates. These scenarios consider many different factors, including:\n\u2022\nThe impact on exposures as a result of instantaneous changes in interest rates from baseline rates.\n\u2022\nForecasted balance sheet, as well as modeled prepayment and reinvestment behavior, but excluding assumptions about actions that could be taken by the Firm or its clients and customers in response to instantaneous rate changes. Mortgage prepayment assumptions are based on the interest rates used in the scenarios compared with underlying contractual rates, the time since origination, and other factors which are updated periodically based on historical experience. Deposit forecasts are a key assumption in the Firm\u2019s earnings-at-risk. The baseline reflects certain assumptions relating to the Federal Reserve\u2019s balance sheet policy (e.g., quantitative tightening and usage at the Reverse Repurchase Facility) that require management judgment. The amount of\ndeposits that the Firm holds at any given time may be influenced by Federal Reserve actions, as well as broader monetary conditions and competition for deposits.\n\u2022\nThe pricing sensitivity of deposits, known as deposit betas, represent the amount by which deposit rates paid could change upon a given change in market interest rates. Actual deposit rates paid may differ from the modeled assumptions, primarily due to customer behavior and competition for deposits.\nThe Firm performs sensitivity analyses of the assumptions used in earnings-at-risk scenarios, including with respect to deposit betas and forecasts of deposit balances, both of which are especially significant in the case of consumer deposits. The results of these sensitivity analyses are reported to the CTC Risk Committee and the Board Risk Committee.\nThe Firm\u2019s earnings-at-risk scenarios are periodically evaluated and enhanced in response to changes in the composition of the Firm\u2019s balance sheet, changes in market conditions, improvements in the Firm\u2019s simulation and other factors.\nThe Firm\u2019s earnings-at-risk sensitivities are measures of the Firm\u2019s interest rate exposure. The Firm\u2019s actual net interest income for the rate changes presented may differ as the earnings-at-risk scenarios are modelled as instantaneous changes and exclude any actions that could be taken by the Firm or its clients or customers in response to rate changes. Other significant assumptions in the earnings-at-risk scenarios, including mortgage prepayments and deposit rates paid, may also differ from actual results. The Firm\u2019s forecast for net interest income is included in the Firm\u2019s outlook on page 50.\n140\nJPMorgan Chase & Co./2025 Form 10-K\nThe Firm\u2019s sensitivities are presented in the table below.\nDecember 31,\n(in billions)\n2025\n(a)\n2024\n(a)\nParallel shift:\n+100 bps shift in rates\n$\n2.1\n\n$\n2.3\n-100 bps shift in rates\n(2.4)\n(2.5)\n+200 bps shift in rates\n3.7\n\n4.6\n-200 bps shift in rates\n(6.0)\n(4.9)\nSteeper yield curve:\n+100 bps shift in long-term rates\n1.4\n\n1.0\n-100 bps shift in short-term rates\n(1.0)\n(1.4)\nFlatter yield curve:\n+100 bps shift in short-term rates\n0.7\n\n1.2\n-100 bps shift in long-term rates\n(1.4)\n(1.1)\n(a)\nReflects the simultaneous shift of U.S. dollar and non-U.S. dollar rates, including hedges of non-U.S. dollar capital investments. Non-U.S. dollar sensitivities were insignificant.\nThe change in the Firm\u2019s sensitivities as of December 31, 2025 compared to December 31, 2024, was primarily driven by the net impact of Treasury and CIO actual and forecasted actions, including an increase in cash flow hedges of floating rate loans and in investment securities, both of which add duration. The net impact of these actions was largely offset, and more than offset for the -200 bps parallel shift in rates, by the effects from changes in Firmwide deposits.\nEconomic value sensitivity\nIn addition to earnings-at-risk, which is measured as a sensitivity to a baseline of earnings over the next 12 months, the Firm also measures economic value sensitivity (\u201cEVS\u201d). EVS stress tests the longer-term economic value of equity by measuring the sensitivity of the Firm\u2019s current balance sheet, primarily retained loans, deposits, debt and investment securities as well as related hedges, under various interest rate scenarios. The Firm's pricing and cash flow assumptions associated with deposits, as well as prepayment assumptions for loans and securities, are significant factors in the EVS measure. In accordance with the CTC interest rate risk management policy, the Firm has established limits on EVS as a percentage of TCE.\nCertain assumptions used in the EVS measure may differ from those required in the fair value measurement note to the Consolidated Financial Statements. For example, certain assets and liabilities with no stated maturity, such as credit card receivables and deposits, have longer assumed durations in the EVS measure. Additional information on long-term debt and held to maturity investment securities is disclosed on page 194 in Note 2.\nJPMorgan Chase & Co./2025 Form 10-K\n141\nManagement\u2019s discussion and analysis\nNon-U.S. dollar foreign exchange risk\nNon-U.S. dollar FX risk is the risk that changes in foreign exchange rates affect the value of the Firm\u2019s assets or liabilities or future results. The Firm has structural non-U.S. dollar FX exposures arising from capital investments, forecasted expense and revenue, the investment securities portfolio and non-U.S. dollar-denominated debt issuance. Treasury and CIO, working in partnership with the LOBs, primarily manage these risks on behalf of the Firm.\u00a0Treasury and CIO may hedge certain of these risks using derivatives. Refer to Business Segment & Corporate Results on page 63 for additional information.\nOther sensitivity-based measures\nThe Firm quantifies the market risk of certain debt and equity and funding-related exposures by assessing the potential impact on net revenue, other comprehensive income (\u201cOCI\u201d) and noninterest expense due to changes in relevant market variables. Refer to the predominant business activities that give rise to market risk on page 134 for additional information on the positions captured in other sensitivity-based measures.\nThe table below represents the potential impact to net revenue, OCI or noninterest expense for market risk sensitive instruments that are not included in VaR or earnings-at-risk. Where appropriate, instruments used for hedging purposes are reported net of the positions being hedged. The sensitivities disclosed in the table below may not be representative of the actual gain or loss that would have been realized at December 31, 2025 and 2024, as the movement in market parameters across maturities may vary and are not intended to imply management\u2019s expectation of future changes in these sensitivities.\nGain/(loss) (in millions)\nActivity\nDescription\nSensitivity measure\nDecember 31, 2025\nDecember 31, 2024\nDebt and equity\n(a)\nAsset Management activities\nConsists of seed capital and related hedges; fund co-investments\n(b)\n; and certain deferred compensation and related hedges\n(c)\n10% decline in market value\n$\n(60)\n$\n(53)\nOther debt and equity\nConsists of certain real estate-related fair value option elected loans, privately held equity and other investments held at fair value\n(b)\n10% decline in market value\n(1,549)\n(1,030)\nFunding-related exposures\nNon-USD LTD cross-currency basis\nRepresents the basis risk on derivatives used to hedge the foreign exchange risk on the non-USD LTD\n(d)\n1 basis point parallel tightening of cross currency basis\n(11)\n(10)\nNon-USD LTD hedges foreign currency (\u201cFX\u201d) exposure\nPrimarily represents the foreign exchange revaluation on the fair value of the derivative hedges\n(d)\n10% depreciation of currency\n19\n\n28\nDerivatives \u2013 funding spread risk\nImpact of changes in the spread related to derivatives FVA\n(b)\n1 basis point parallel increase in spread\n(2)\n(2)\nFair value option elected liabilities - funding spread risk\nImpact of changes in the spread related to fair value option elected liabilities DVA\n(d)\n1 basis point parallel increase in spread\n55\n\n47\n(a)\nExcludes equity securities without readily determinable fair values that are measured under the measurement alternative. Refer to Note 2 for additional information.\n(b)\nImpact recognized through net revenue.\n(c)\nImpact recognized through noninterest expense.\n(d)\nImpact recognized through OCI.\n142\nJPMorgan Chase & Co./2025 Form 10-K\nCOUNTRY RISK MANAGEMENT\nThe Firm, through its LOBs and Corporate, may be exposed to country risk resulting from financial, economic, political or other significant developments which adversely affect the value of the Firm\u2019s exposures related to a particular country or set of countries. The Country Risk Management group actively monitors the various portfolios which may be impacted by these developments and measures the extent to which\n\nthe Firm\u2019s exposures are diversified given the Firm\u2019s strategy and risk tolerance relative to a country.\nOrganization and management\nCountry Risk Management is an independent risk management function that assesses, measures and monitors exposure to country risk across the Firm.\nThe Firm\u2019s country risk management function includes the following activities:\n\u2022\nMaintaining policies, procedures and standards consistent with a comprehensive country risk framework\n\u2022\nAssigning sovereign ratings, assessing country risks and establishing risk tolerance relative to a country\n\u2022\nMeasuring and monitoring country risk exposure and stress across the Firm\n\u2022\nManaging and approving country limits and reporting trends and limit breaches to senior management\n\u2022\nDeveloping surveillance tools, such as signaling models and ratings indicators, for early identification of potential country risk concerns\n\u2022\nProviding country risk scenario analysis\nSources and measurement\nThe Firm is exposed to country risk through its lending and deposits, investing, and market-making activities, whether cross-border or locally funded. Country exposure includes activity with both government and private-sector entities in a country.\nUnder the Firm\u2019s internal country risk management approach, attribution of exposure to an individual country is based on the country where the largest proportion of the assets of the\n\ncounterparty, issuer, obligor or guarantor are located or where the largest proportion of its revenue is derived, which may be different than the domicile (i.e. legal residence) or country of incorporation.\nIndividual country exposures reflect an aggregation of the Firm\u2019s risk to an immediate default, with zero recovery, of the counterparties, issuers, obligors or guarantors attributed to that country. Activities which result in contingent or indirect exposure to a country are not included in the country exposure measure (for exa\nmple, providing clearing services or secondary exposure to collateral on securities financing receivables).\nAssumptions are sometimes required in determining the measurement and allocation of country exposure, particularly in the case of certain non-linear or index products, or where the nature of the counterparty, issuer, obligor or guarantor is not suitable for attribution to an individual country. The use of different measurement approaches or assumptions could affect the amount of reported country exposure.\nUnder the Firm\u2019s internal country risk measurement framework:\n\u2022\nDeposits with banks are measured as the cash balances placed with central banks, commercial banks, and other financial institutions\n\u2022\nLending exposures are measured at the total committed amount (funded and unfunded), net of the allowance for credit losses and eligible cash and marketable securities collateral received\n\u2022\nSecurities financing exposures are measured at their receivable balance, net of eligible collateral received\n\u2022\nDebt and equity securities are measured at the fair value of all positions, including both long and short positions\n\u2022\nCounterparty exposure on derivative receivables is measured at the derivative\u2019s fair value, net of the fair value of the eligible collateral received\n\u2022\nCredit derivatives exposure is measured at the net notional amount of protection purchased or sold for the same underlying reference entity, inclusive of the fair value of the derivative receivable or payable, reflecting the manner in which the Firm manages these exposures\nThe Firm\u2019s internal country risk reporting differs from the reporting provided under the FFIEC bank regulatory requirements.\nJPMorgan Chase & Co./2025 Form 10-K\n143\nManagement\u2019s discussion and analysis\nStress testing\nStress testing is an important component of the Firm\u2019s country risk management framework, which aims to estimate and limit losses arising from a country crisis by measuring the impact of adverse asset price movements to a country based on market shocks combined with counterparty specific assumptions. Country Risk Management periodically designs and runs tailored stress scenarios to test vulnerabilities to individual countries or sets\n\nof countries in response to specific or potential market events, sector performance concerns, sovereign actions and geopolitical risks. These tailored stress results are used to inform potential risk reduction across the Firm, as necessary.\nRisk reporting\nCountry exposure and stress are measured and reported regularly, and used by Country Risk Management to identify trends and monitor high usages and breaches against limits.\nFor country risk management purposes, the Firm may report exposure to jurisdictions that are not fully autonomous, including dependent territories and Special Administrative Regions (\u201cSAR\u201d) such as Hong Kong SAR, separately from the independent sovereign states with which they are associated.\nThe following table presents the Firm\u2019s top 20 exposures by country (excluding the U.S.) as of December\u00a031, 2025, and their comparative exposures as of December\u00a031, 2024. The top 20 country exposures represent the Firm\u2019s largest total exposures by individual country. Country exposures may fluct\nuate from period to period due to a variety of factors, including client activity, market flows and liquidity management activities undertaken by the Firm.\nThe increase in exposure to the United Kingdom when compared to\nDecember\u00a031, 2024\n was predominantly driven by higher holdings of government debt securities due to increased investment and market-making securities activities, as well as an increase in wholesale lending exposures.\nThe Firm continues to monitor its exposure to Russia, which corresponds to cash placed with the central bank, but which excludes deposits placed on behalf of clients at the Deposit Insurance Agency of Russia. The Firm currently believes that its remaining exposure to Russia is not material. Refer to Note 30 on page 303 for information concerning Russian litigation.\nTop 20 country\n\nexposures (excluding the U.S.)\n(a)\nDecember 31,  (in billions)\n2025\n2024\n(f)\nDeposits with banks\n(b)\nLending\n(c)\nTrading and investing\n(d)\nOther\n(e)\nTotal exposure\nTotal exposure\nGermany\n$\n83.9\n\n$\n15.7\n\n$\n\u2014\n\n$\n0.7\n\n$\n100.3\n\n$\n103.9\nUnited Kingdom\n26.1\n\n27.0\n\n36.9\n\n3.2\n\n93.2\n\n76.1\nJapan\n64.4\n\n4.2\n\n8.4\n\n0.3\n\n77.3\n\n63.1\nFrance\n0.7\n\n14.6\n\n8.3\n\n1.3\n\n24.9\n\n18.0\nBrazil\n10.0\n\n5.0\n\n5.9\n\n\u2014\n\n20.9\n\n14.7\nAustralia\n5.6\n\n9.1\n\n2.8\n\n0.1\n\n17.6\n\n14.3\nCanada\n2.0\n\n11.9\n\n2.1\n\n0.2\n\n16.2\n\n15.1\nSwitzerland\n4.5\n\n5.2\n\n2.3\n\n3.0\n\n15.0\n\n13.6\nMexico\n1.7\n\n8.9\n\n3.0\n\n\u2014\n\n13.6\n\n7.2\nSouth Korea\n1.1\n\n3.3\n\n8.5\n\n0.5\n\n13.4\n\n10.3\nMainland China\n2.7\n\n6.6\n\n3.9\n\n\u2014\n\n13.2\n\n13.4\nIndia\n1.2\n\n6.7\n\n4.7\n\n0.4\n\n13.0\n\n11.3\nSaudi Arabia\n0.9\n\n8.9\n\n2.6\n\n\u2014\n\n12.4\n\n9.4\nItaly\n0.1\n\n8.5\n\n2.7\n\n0.3\n\n11.6\n\n10.4\nSingapore\n2.0\n\n2.5\n\n4.4\n\n0.4\n\n9.3\n\n7.4\nBelgium\n4.5\n\n1.6\n\n0.5\n\n\u2014\n\n6.6\n\n5.4\nNetherlands\n0.2\n\n6.1\n\n0.1\n\n0.1\n\n6.5\n\n5.9\nUnited Arab Emirates\n0.1\n\n4.7\n\n0.9\n\n\u2014\n\n5.7\n\n2.6\nChile\n3.0\n\n1.6\n\n0.5\n\n\u2014\n\n5.1\n\n1.7\nSpain\n0.1\n\n4.4\n\n0.1\n\n\u2014\n\n4.6\n\n6.1\n(a)\nCountry exposures presented in the table reflect 87% and 88% of total F\nirmwide non-U.S. exposure,\n\nwhere exposure is attributed to an individual country based on the Firm\u2019s internal country risk management approach, at\nDecember\u00a031, 2025\n and 2024, respectively.\n(b)\nPredominantly represents cash placed with central banks.\n(c)\nIncludes loans and accrued interest receivable, lending-related commitments (net of eligible collateral and the allowance for credit losses). Excludes intra-day and operating exposures, such as those from settlement and clearing activities.\n(d)\nIncludes market-making positions and hedging, investment securities, and counterparty exposure on derivative and securities financings net of eligible collateral. Market-making positions and hedging includes exposure from single reference entity (\u201csingle-name\u201d), index and other multiple reference entity transactions for which one or more of the underlying reference entities is in a country listed in the above table.\n(e)\nIncludes physical commodities inventory and clearing house guarantee funds.\n(f)\nThe country rankings presented in the table as of December\u00a031, 2024, are based on the country rankings of the corresponding exposures at\nDecember\u00a031, 2025\n, not actual rankings of such exposures at December\u00a031, 2024.\n144\nJPMorgan Chase & Co./2025 Form 10-K\nCLIMATE RISK MANAGEMENT\nClimate risk refers to the potential threats posed by climate change to the Firm and its clients, customers, operations and business strategy. Climate change is viewed as a driver of risk that may impact existing types of risks managed by the Firm. Climate risk is categorized into physical risk and transition risk.\nPhysical risk involves economic costs and financial losses due to a changing climate. Acute physical risk drivers include the increased frequency or severity of climate and weather events, such as floods, wildfires and tropical cyclones. Chronic physical risk drivers include more gradua\nl shifts in the climate, such as sea level rise, persistent changes in precipitation levels and increases in average ambient temperatures. Indirect physical risk drivers include the second-order effects of these acute and chronic risks, such as supply chain disruptions or changes to property valuations.\nTransition risk involves the financial and economic consequences of society\u2019s shift toward a lower-carbon economy. Transition risk drivers include possible changes in public\npolicy, adoption of new technologies and shifts in consumer preferences. Transition risks may also be influenced by changes in the physical climate.\nOrganization and management\nThe Firm\u2019s Climate, Nature and Social Risk Management function is responsible for establishing and maintaining the Firmwide framework and strategy for managing climate risk.\nOther responsibilities of that function include:\n\u2022\nEstablishing and maintaining policies, standards, procedures and processes to support identification, escalation, monitoring and management of climate risk across the Firm\n\u2022\nDeveloping metrics, scenarios and stress testing mechanisms designed to assess the range of potential climate-related financial and economic impacts to the Firm\n\u2022\nEstablishing a Firmwide climate risk data strategy and the supporting climate risk technology infrastructure\nThe LOBs and Corporate are responsible for the identification, assessment and management of climate risks present in their business activities and for the adherence to applicable climate-related laws, rules and regulations.\nGovernance and oversight\nThe Firm\u2019s framework and strategy for identifying,\nmonitoring and managing climate risk is integrated into the Firm\u2019s risk governance framework. This framework allows for the escalation of significant climate risk-related issues to LOB Risk Committees. The Board Risk Committee also receives information on significant climate risks and climate-related initiatives, as appropriate.\nJPMorgan Chase & Co./2025 Form 10-K\n145\nManagement\u2019s discussion and analysis\nOPERATIONAL RISK MANAGEMENT\nOperational risk is the risk of an adverse outcome resulting from inadequate or failed internal processes or systems; human factors; or external events impacting the Firm\u2019s processes or systems. Operational risk includes compliance, conduct, legal, and estimations and model risk. Operational risk is inherent in the Firm\u2019s activities and can manifest\nitself in various ways, including fraudulent acts, business disruptions (including those caused by extraordinary events beyond the Firm's control), cyber attacks, inappropriate employee behavior, failure to comply with applicable laws, rules and regulations or failure of vendors or other third party providers to perform in accordance with their agreements. Operational Risk Management attempts to manage operational risk at appropriate levels in light of the Firm\u2019s financial position, the characteristics of its businesses, and the markets and regulatory environments in which it operates.\n\nOperational Risk Management Framework\nThe Firm\u2019s Compliance, Conduct, and Operational Risk (\u201cCCOR\u201d) Management Framework is designed to enable the Firm to govern, identify, measure, monitor and test, manage and report on the Firm\u2019s operational risk.\nOperational Risk Governance\nThe LOBs and Corporate are responsible for the management of operational risk. The Control Management Organization, which consists of control managers within each LOB and Corporate, is responsible for the day-to-day execution of the CCOR Management Framework.\nThe Firm\u2019s Global Chief Compliance Officer (\u201cCCO\u201d) and FRE for Operational Risk and Qualitative Risk Appetite is responsible for defining the CCOR Management Framework and establishing the minimum standards for its execution. The LOB and Corporate aligned officers of the CCOR organization oversee activity performed by their aligned LOB and Corporate. These officers report to the Global CCO and FRE for Operational Risk and Qualitative Risk Appetite and are independent of the respective businesses or functions that they oversee. The CCOR Management Framework is included in the Risk Governance and Oversight Policy that is reviewed and approved by the Board Risk Committee periodically.\nOperational Risk Identification\nThe Firm utilizes a structured risk and control self-assessment process that is executed by the LOBs and Corporate. As part of this process, the LOBs and Corporate evaluate the effectiveness of their respective control environment to assess circumstances in which controls have failed, and to determine where remediation efforts may be required. The Firm\u2019s Operational Risk and Compliance organization\n(\u201cOperational Risk and Compliance\u201d) provides oversight of and challenge to these evaluations and may also perform independent assessments of significant operational risk events and areas of concentrated or emerging risk.\nOperational Risk Measurement\nThe CCOR organization is responsible for providing independent, risk-based review and oversight of assessments conducted by the LOBs and Corporate with respect to compliance, conduct and operational risks. This includes oversight of the LOBs\u2019 and Corporate\u2019s assessments of the design, execution, and evaluation of associated controls, against standards established by the CCOR organization.\nIn addition, Operational Risk and Compliance assesses operational risks through quantitative means, including operational risk-based capital and estimation of operational risk losses under both baseline and stressed conditions.\nThe primary component of the operational risk-based capital estimate is the Loss Distribution Approach (\u201cLDA\u201d) statistical model, which simulates the projected frequency and severity of operational risk losses based on historical data. The LDA model is used to estimate an aggregate operational risk loss over a one-year time horizon, at a 99.9% confidence level. The LDA model incorporates actual internal operational risk losses in the quarter following the period in which those losses were realized, and the calculation generally continues to reflect such losses even after the issues or business activities giving rise to the losses have been remediated or reduced.\nAs required under the Basel III capital framework, the Firm\u2019s operational risk capital methodology, which uses the Advanced Measurement Approach (\u201cAMA\u201d), incorporates internal and external losses as well as management\u2019s view of tail risk captured through operational risk scenario analysis, and evaluation of key business environment and internal control metrics. The Firm does not reflect the impact of insurance in its AMA estimate of operational risk capital.\nThe Firm considers the impact of stressed economic conditions on operational risk losses and develops a forward looking view of material operational risk events that may occur in a stressed environment. The Firm\u2019s operational risk stress testing framework is utilized in calculating results for the Firm\u2019s CCAR and other stress testing processes.\nRefer to Capital Risk Management on pages 89\u201399 for information related to operational risk RWA, and CCAR.\nOperational Risk Monitoring and Testing\nIndependent testing and monitoring of controls are integral components of the CCOR Management Framework. These testing and monitoring activities are\n146\nJPMorgan Chase & Co./2025 Form 10-K\nconducted under the CCOR organization\u2019s Monitoring and Testing Program (\u201cM&T Program\u201d) and:\n\u2022\nare based upon the Firm\u2019s compliance, conduct and operational risk assessments;\n\u2022\nare designed to identify control gaps or deficiencies, including potential non-compliance with applicable laws, rules and regulations; and\n\u2022\nassess whether the procedures, processes and controls used by the Firm to mitigate compliance, conduct and operational risk are well-designed and functioning as intended.\nThe Testing Center of Excellence (\u201cTCoE\u201d), reporting to the Control Management Organization, is responsible for executing testing activities outlined under the M&T Program, and the CCOR organization Testing Program Governance and Oversight team provides independent governance and oversight of both the M&T Program and the TCoE testing activities through defined processes and responsibilities.\nThe results of risk assessments performed by Operational Risk and Compliance are used in connection with their independent monitoring and testing compliance of the LOBs and Corporate with laws, rules and regulations. Through monitoring and testing, Operational Risk and Compliance independently identify areas of heightened operational risk and tests the effectiveness of controls within the LOBs and Corporate.\nManagement of Operational Risk\nThe operational risk areas or issues identified through monitoring and testing are escalated to the LOBs and Corporate to be remediated through action plans, as needed, to mitigate operational risk. Operational Risk and Compliance may advise the LOBs and Corporate in the development and implementation of action plans.\nOperational Risk Reporting\nAll employees of the Firm are expected to escalate risks appropriately. Risks identified by Operational Risk and Compliance are escalated to the appropriate LOB and Corporate Control Committees, as needed. Operational Risk and Compliance has established standards designed to ensure that consistent operational risk reporting and operational risk reports are produced on a Firmwide basis as well as by the LOBs and Corporate.\u00a0Reporting includes the evaluation of key risk and performance indicators against established thresholds as well as the assessment of different types of operational risk against stated risk appetite. The standards establish escalation protocols to senior management and to the Board of Directors.\nInsurance\nOne of the ways in which operational risk may be mitigated is through insurance maintained by the Firm. The Firm purchases insurance from commercial insurers and maintains a wholly-owned captive insurer, Park Assurance Company. Insurance may also be\nrequired by third parties with whom the Firm does business.\nSubcategories and examples of operational risks\nOperational risk can manifest itself in various ways. Operational risk subcategories include Compliance risk, Conduct risk, Legal risk, and Estimations and Model risk. Refer to pages 150, 151, 152 and 153, respectively for more information on Compliance, Conduct, Legal, and Estimations and Model risk. Details on other select examples of operational risks such as firmwide resiliency, payment fraud and third-party outsourcing, as well as cybersecurity, are provided below.\nFirmwide resiliency risk\nDisruptions of the Firm\u2019s business and operations can occur due to forces beyond the Firm\u2019s control such as health emergencies, severe weather, natural disasters, the effects of climate change, utility or telecommunications failures, interruption of service from third-party service providers, cyberattacks, civil unrest or terrorism. The Firm\u2019s resiliency framework is intended to enable the Firm to prepare for and adapt to changing conditions and withstand and recover from, and address adverse effects on its operations caused by, disruptions that may impact critical business functions and supporting assets, including its staff, technology, data and facilities, as well as those of third-party service providers. The framework includes governance, awareness training, planning and testing of recovery strategies, as well as strategic and tactical initiatives to identify, assess, and manage resiliency risks. The framework operates in accordance with the Firm\u2019s overall approach to Operational Risk Management, including alignment with technology, cybersecurity, data, physical security, crisis management, real estate and outsourcing programs.\nPayment fraud risk\nPayment fraud risk is the risk of external and internal parties unlawfully obtaining personal monetary benefit through misdirected or otherwise improper payment. The Firm employs various controls for managing payment fraud risk as well as providing employee and client education and awareness trainings.\nThird-party outsourcing risk\nThe Firm\u2018s Third-Party Oversight (\u201cTPO\u201d) and Inter-affiliates Oversight (\u201cIAO\u201d) frameworks assist the LOBs and Corporate in selecting, documenting, onboarding, monitoring and managing their supplier relationships including services provided by affiliates. The objectives of the TPO framework are to hold suppliers and other third parties to an appropriate standard of operational performance and to mitigate key risks, including data loss and business disruptions.\u00a0The Corporate Third-Party Oversight group is\u00a0responsible for Firmwide training, monitoring, reporting and standards with respect to third-party outsourcing risks.\nJPMorgan Chase & Co./2025 Form 10-K\n147\nManagement\u2019s discussion and analysis\nCybersecurity risk\nCybersecurity risk is the risk of harm or loss resulting from misuse or abuse of technology or the unauthorized disclosure of data.\nOverview\nCybersecurity risk is an important and continuously evolving focus for the Firm. Significant resources are devoted to protecting and enhancing the security of computer systems, software, networks, storage devices, and other technology. The Firm\u2019s security efforts are designed to protect against, among other things, cybersecurity attacks that can result in unauthorized access to confidential information, the destruction of data, disruptions to or degradations of service, the sabotaging of systems or other damage.\nThe Firm has experienced, and expects that it will continue to experience, a higher volume and complexity of cyber attacks against the backdrop of heightened geopolitical tensions and emerging technologies that can be leveraged by attackers, including artificial intelligence. The Firm has implemented measures and controls reasonably designed to address this evolving environment, including enhanced threat monitoring. In addition, the Firm continues to review and enhance its capabilities to address associated risks, such as those relating to the management of administrative access to systems.\nThird parties with which the Firm does business, that facilitate the Firm\u2019s business activities (e.g., vendors, supply chain, exchanges, clearing houses, central depositories, and financial intermediaries) or that the Firm has acquired are also sources of cybersecurity risk to the Firm. Third party incidents such as system breakdowns or failures, misconduct by the employees of such parties, or cyber attacks, including ransomware and supply-chain compromises, could have a material adverse effect on the Firm, including in circumstances in which an affected third party is unable to deliver a product or service to the Firm or where the incident delivers compromised software to the Firm or results in lost or compromised information of the Firm or its clients or customers.\nClients and customers are also sources of cybersecurity risk to the Firm and its information assets, particularly when their activities and systems are beyond the Firm\u2019s own security and control systems. The Firm engages in periodic discussions with its clients, customers and other external parties concerning cybersecurity risks including opportunities to improve cybersecurity.\nRisks from cybersecurity threats, including any previous cybersecurity events, have not materially affected the Firm or its business strategy, results of operations or financial condition.\n Notwithstanding the comprehensive approach that the Firm takes to address cybersecurity risk, the Firm may not be\nsuccessful in preventing or mitigating a future cybersecurity incident that could have a material adverse effect on the Firm or its business strategy, results of operations or financial condition.\nOrganization and management\nThe\nGlobal Chief Information Security Officer (\u201cCISO\u201d)\n reports to the Global Chief Information Officer, and is a member of key cybersecurity governance forums. The CISO leads the Global Cybersecurity and Technology Controls organization, which is responsible for identifying technology and cybersecurity risks and for implementing and maintaining controls to manage cybersecurity threats.\n\nThe CISO and the members of senior management within Global Technology and the Cybersecurity and Technology Controls organizations all have relevant expertise and experience in cybersecurity and information technology risk management, including relevant experience at the Firm, at other financial services companies or in other highly-regulated industries.\nThe CISO is responsible for the Firm\u2019s Information Security Program, which is designed to prevent, detect and respond to cyber attacks in order to help safeguard the confidentiality, integrity and availability of the Firm's infrastructure, resources and information. The program includes managing the Firm\u2019s global cybersecurity operations centers, providing training, conducting cybersecurity event simulation exercises, implementing the Firm\u2019s policies and standards relating to technology risk and cybersecurity management, and enhancing, as needed, the Firm\u2019s cybersecurity capabilities.\n\nThe Firm\u2019s Information Security Program includes the following functions:\nCyber Operations\n, which is responsible for implementing and maintaining controls designed to detect and defend the Firm against cyber attacks, and includes a dedicated function for incident response and ongoing monitoring for cybersecurity threats and vulnerabilities, including those among the Firm\u2019s third-party suppliers.\nTechnology Governance, Risk & Controls\n, which is responsible for operationalizing technology risk and control frameworks, analyzing regulatory developments that may impact the Firm, and developing control catalogs and assessments of controls, as well as overseeing governance and reporting of technology and cybersecurity risk.\nSecurity Awareness\n, which provides awareness and training that reinforces information risk and security management practices and compliance with the Firm's policies, standards and practices. The training is mandatory for all employees globally on a periodic basis, and it is supplemented by Firmwide testing initiatives, including periodic phishing tests. The Firm\n148\nJPMorgan Chase & Co./2025 Form 10-K\nalso provides specialized security training to employees in specific roles, such as application developers. The Firm\u2019s Global Privacy Program requires all employees to take periodic training on data privacy that focuses on confidentiality and security, as well as responding to unauthorized access to or use of information.\nTechnology Resiliency\n, which establishes control requirements for planning and testing the prioritized recovery of technology services in the event of degradation or outage, including incident response planning, data backup and retention, and recovery readiness in support of the Firmwide Business Resiliency Program and operational risk management practices.\nThe Firm has a cybersecurity incident response plan designed to enable the Firm to respond to attempted cybersecurity incidents, coordinate as appropriate with law enforcement and other government agencies, notify clients and customers, as applicable, and recover from such incidents. In addition, the Firm actively partners with appropriate government and law enforcement agencies and peer industry forums, participating in discussions and simulations to assist in understanding the full spectrum of cybersecurity risks and in enhancing defenses and improving resiliency in the Firm\u2019s operating environment.\nGovernance and oversight\nThe governance structure for the Global Cybersecurity and Technology Controls organization is designed to appropriately identify, escalate and mitigate cybersecurity risks.\nCybersecurity risk management and its governance and oversight are integrated into the Firm\u2019s operational risk management framework, including through the escalation of key risk and control issues to management and the development of risk mitigation plans for heightened risk and control issues.\n IRM independently assesses and challenges the activities and risk management practices of the Global Cybersecurity and Technology Controls organization related to the identification, assessment, measurement and mitigation of cybersecurity risk.\n\nAs needed, the Firm engages third-party assessors or auditing firms with industry-recognized expertise on cybersecurity matters to review specific aspects of the Firm\u2019s cybersecurity risk management framework, processes and controls.\nThe governance and oversight for cybersecurity risk management includes governance forums that inform management of key areas of concern regarding the prevention, detection, mitigation and remediation of cybersecurity risks.\nThe Cybersecurity and Technology Controls Operating Committee (\u201cCTOC\u201d) is the principal management committee that oversees the Firm\u2019s assessment and management of cybersecurity risk, including oversight of the implementation and maintenance of appropriate controls in support of the Firm\u2019s Information Security Program.\n The membership of the CTOC includes senior representatives from the Global Cybersecurity and Technology Controls organization and relevant corporate functions, including IRM and Internal Audit.\nThe CTOC escalates key operational risk and control issues, as appropriate, to the Global Technology Operating Committee (\u201cGTOC\u201d) or its business control committee or to the appropriate LOB and Corporate Control Committees. The GTOC is responsible for the governance of the Firmwide Global Technology organization, including oversight of Firmwide technology strategies, the delivery of technology and technology operations, the effective use of information technology resources, and monitoring and resolving key operational risk and control matters arising in the Global Technology organization.\nAs part of its oversight of management\u2019s implementation and maintenance of the Firm\u2019s risk management framework, the Firm\u2019s Board of Directors receives periodic updates from the CIO, the CISO and senior members of the CTOC concerning cybersecurity matters.\n These updates generally include information regarding cybersecurity and technology developments, the Firm\u2019s Information Security Program and recommended changes to that program, cybersecurity policies and practices, and ongoing initiatives to improve information security, as well as any significant cybersecurity incidents and the Firm's efforts to address those incidents.\n The Audit Committee and the Risk Committee assist the Board in this oversight.\nJPMorgan Chase & Co./2025 Form 10-K\n149\nManagement\u2019s discussion and analysis\nCOMPLIANCE RISK MANAGEMENT\nCompliance risk, a subcategory of operational risk, is the risk of failing to comply with laws, rules, regulations or codes of conduct and standards of self-regulatory organizations.\nOverview\nEach of the LOBs and Corporate hold primary ownership of and accountability for managing their compliance risk. The Firm\u2019s Operational Risk and Compliance Organization (\u201cOperational Risk and Compliance\u201d), which is independent of the LOBs and Corporate, provides independent review, monitoring and oversight of business operations with a focus on compliance with the laws, rules, and regulations applicable to the delivery of the Firm\u2019s products and services to clients and customers.\nThese compliance risks relate to a wide variety of laws, rules and regulations across the LOBs and Corporate, and jurisdictions, and include risks related to financial products and services, relationships and interactions with clients and customers, and employee activities. For example, compliance risks include those associated with anti-money laundering compliance, trading activities, market conduct, and complying with the laws, rules, and regulations related to the offering of products and services across jurisdictional borders. Compliance risk is also inherent in the Firm\u2019s fiduciary activities, including the failure to exercise the applicable standard of care to act in the best interest of fiduciary clients and customers or to treat fiduciary clients and customers fairly.\nOther functions provide oversight of significant regulatory obligations that are specific to their respective areas of responsibility.\nOperational Risk and Compliance implements policies and standards designed to govern, identify, measure, monitor and test, manage, and report on compliance risk.\nGovernance and oversight\nOperational Risk and Compliance is led by the Firm\u2019s Global CCO and FRE for Operational Risk and Qualitative Risk Appetite.\nThe Firm maintains oversight and coordination of its compliance risk through the CCOR Management Framework. The Firm\u2019s Global CCO and FRE for Operational Risk and Qualitative Risk Appetite also provides regular updates to the Board Risk Committee and the Audit Committee on significant compliance risk issues, as appropriate.\nCode of Conduct\nThe Firm has a Code of Conduct (the \u201cCode\u201d) that sets forth the Firm\u2019s expectation that employees will conduct themselves with integrity, at all times. The Code provides the principles that help govern employee conduct with clients, customers, suppliers, vendors, shareholders, regulators, other employees, as well as with the markets and communities in which the Firm operates. The Code requires employees to promptly report any potential or actual violation of the Code, Firm policies, or laws, rules or regulations applicable to the Firm\u2019s business. It also requires employees to report any illegal or unethical conduct, or conduct that violates the underlying principles of the Code, by any of the Firm\u2019s employees, consultants, clients, customers, suppliers, contract or temporary workers, or business partners or agents. Conduct training is assigned to newly-hired employees after joining the Firm, and to current employees periodically thereafter. Employees are required to affirm their compliance with the Code annually.\nEmployees can report any potential or actual violations of the Code through the Firm\u2019s Conduct Hotline (the \u201cHotline\u201d) by phone, mobile device or the internet. The Hotline is anonymous, where permitted by law, is available at all times globally, has translation services, and is administered by an outside service provider. The Code prohibits retaliation against anyone who raises an issue or concern in good faith or assists with an inquiry or investigation. Periodically, the Audit Committee receives reports on the Code of Conduct program.\n150\nJPMorgan Chase & Co./2025 Form 10-K\nCONDUCT RISK MANAGEMENT\nConduct risk, a subcategory of operational risk, is the risk that any action or misconduct by an employee could lead to unfair client or customer outcomes, impact the integrity of the markets in which the Firm operates, harm employees or the Firm, or compromise the Firm\u2019s reputation.\nOverview\nEach LOB and Corporate is accountable for identifying and managing its conduct risk to provide appropriate engagement, ownership and sustainability of a culture consistent with the Firm\u2019s Business Principles. The Business Principles serve as a guide for how employees are expected to conduct themselves. With the Business Principles serving as a guide, the Firm\u2019s Code sets out the Firm\u2019s expectations for each employee and provides information and resources to help e\nmployees conduct business ethically and in compliance with applicable laws, rules and regulations everywhere the Firm operates. Refer to Compliance Risk Management on page 150 for further discussion of the Code.\nGovernance and oversight\nThe Firm\u2019s oversight and coordination of conduct risk is managed in the same manner as Compliance risk. Refer to Compliance Risk Management on\npage 150\n for further information.\nConduct risk management encompasses various aspects of people management practices throughout the employee life cycle, including recruiting, onboarding, training and development, performance management, promotion and compensation processes.\u00a0Each LOB, Treasury and CIO, and each designated corporate function completes an assessment of conduct risk periodically, reviews metrics and issues which may involve conduct risk, and provides conduct education as appropriate.\nJPMorgan Chase & Co./2025 Form 10-K\n151\nManagement\u2019s discussion and analysis\nLEGAL RISK MANAGEMENT\nLegal risk, a subcategory of operational risk, is the risk of loss primarily caused by the actual or alleged failure to meet legal obligations that arise from the rule of law in jurisdictions in which the Firm operates, agreements with clients and customers, and products and services offered by the Firm.\nOverview\nThe global Legal function (\u201cLegal\u201d) provides legal services and advice to the Firm.\u00a0Legal is responsible for managing the Firm\u2019s exposure to legal risk by:\n\u2022\nmanaging actual and potential litigation and enforcement matters, including internal reviews and investigations related to such matters\n\u2022\nadvising on products and services, including contract negotiation and documentation\n\u2022\nadvising on offering and marketing documents and new business initiatives\n\u2022\nmanaging dispute resolution\n\u2022\ninterpreting existing laws, rules and regulations, and advising on changes to them\n\u2022\nadvising on advocacy in connection with contemplated and proposed laws, rules and regulations, and\n\u2022\nproviding legal advice to the LOBs, Corporate and the Board.\nLegal selects, engages and manages outside counsel for the Firm on all matters in which outside counsel is engaged.\u00a0In addition, Legal advises the Firm\u2019s Conflicts Office which reviews the Firm\u2019s wholesale transactions that may have the potential to create conflicts of interest for the Firm.\nGovernance and oversight\nThe Firm\u2019s General Counsel reports to the CEO and is a member of the Operating Committee, the Firmwide Risk Committee and the Firmwide Control Committee. The Firm\u2019s General Counsel and other members of Legal report on significant legal matters to the Firm\u2019s Board of Directors and to the Audit Committee.\nLegal serves on and advises various committees and advises the Firm\u2019s LOBs and Corporate on potential reputation risk issues.\n152\nJPMorgan Chase & Co./2025 Form 10-K\nESTIMATIONS AND MODEL RISK MANAGEMENT\nEstimations and Model risk, a subcategory of operational risk, is the potential for adverse consequences from decisions based on incorrect or misused estimation outputs.\nThe Firm uses models and other analytical and judgment-based estimations, including those based upon machine learning or artificial intelligence techniques,\n\nacross various businesses and functions. The estimation methods are of varying levels of sophistication and are used for many purposes, such as the valuation of positions and measurement of risk, assessing regulatory capital requirements, conducting stress testing, evaluating the allowance for credit losses and making business decisions. A dedicated independent function, Model Risk Governance and Review (\u201cMRGR\u201d), defines and governs the Firm\u2019s policies relating to the management of model risk and risks associated with certain analytical and judgment-based estimations, such as those used in risk management, budget forecasting and capital planning and analysis.\nModel risks are owned by the users of the models within the LOBs and Corporate based on the specific purposes of such models. Users and developers of models are responsible for developing, implementing and testing their models, as well as referring models to MRGR for review and approval. Once models have been approved, model users and developers are responsible for maintaining a robust operating environment, and must monitor and evaluate the performance of the models on an ongoing basis. Model users and developers may seek to enhance models in response to changes in the relevant portfolios and in product and market developments, as well as to capture improvements in available modeling techniques and systems capabilities.\nModels are tiered based on an internal standard according to their complexity, the exposure associated with the model and the Firm\u2019s reliance on the model. This tiering is subject to the approval of MRGR. In its review of a model, MRGR considers whether the model is suitable for the specific purposes for which it will be used. When reviewing a model, MRGR analyzes and challenges the model methodology and the reasonableness of model assumptions, and may perform or require additional testing, including back-testing of model outcomes. Model reviews are approved by the appropriate level of management within MRGR based on the relevant model tier.\nUnder the Firm\u2019s Estimations and Model Risk Management Policy, MRGR reviews and approves new models, as well as material changes to existing models, prior to their use. In certain circumstances, exceptions may be granted to the Firm\u2019s policy to allow a model to be used prior to review or approval. MRGR may also require the user to take appropriate actions to mitigate the model risk if it is to be used in the interim. These actions will depend on the model and may include, for example, limitation of trading activity.\nWhile models are inherently imprecise, the degree of imprecision or uncertainty can be heightened by the market or economic environment. This is particularly true when the current and forecasted environments are significantly different from the historical environments upon which the models were developed. This increased uncertainty may necessitate a greater degree of judgment and analytics to inform any adjustments that the Firm may make to model outputs than would otherwise be the case. In addition, the Firm may experience increased uncertainty in its estimates if assets acquired differ from those used to develop the models.\nRefer to Critical Accounting Estimates Used by the Firm on pages 154\u2013157 and Note 2 for a summary of model-based valuations and other valuation techniques.\nJPMorgan Chase & Co./2025 Form 10-K\n153\nManagement\u2019s discussion and analysis\nCRITICAL ACCOUNTING ESTIMATES USED BY THE FIRM\nJPMorganChase\u2019s accounting policies and use of estimates are integral to understanding its reported results. The Firm\u2019s most complex accounting estimates require management\u2019s judgment to ascertain the appropriate carrying value of assets and liabilities. The Firm has established policies and control procedures intended to ensure that estimation methods, including any judgments made as part of such methods, are well-controlled, independently reviewed and applied consistently from period to period. The methods used and judgments made reflect, among other factors, the nature of the assets or liabilities and the related business and risk management strategies, which may vary across the Firm\u2019s businesses and portfolios. In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner. The Firm believes its estimates for determining the carrying value of its assets and liabilities are appropriate. The following is a brief description of the Firm\u2019s critical accounting estimates involving significant judgments.\nAllowance for credit losses\nThe Firm\u2019s allowance for credit losses represents management\u2019s estimate of expected credit losses over the remaining expected life of the Firm\u2019s financial assets measured at amortized cost and certain off-balance sheet lending-related commitments. The allowance for credit losses generally comprises:\n\u2022\nThe allowance for loan losses, which covers the Firm\u2019s retained loan portfolios (scored and risk-rated),\n\u2022\nThe allowance for lending-related commitments, and\n\u2022\nThe allowance for credit losses on investment securities.\nThe allowance for credit losses involves significant judgment on a number of matters including development and weighting of macroeconomic forecasts, incorporation of historical loss experience, assessment of risk characteristics, assignment of risk ratings, valuation of collateral, and the determination of remaining expected life. Refer to Notes 10 and 13 for further information on these judgments as well as the Firm\u2019s policies and methodologies used to determine the Firm\u2019s allowance for credit losses.\nOne of the most significant judgments involved in estimating the Firm\u2019s allowance for credit losses relates to the macroeconomic forecasts used to estimate credit losses over the eight-quarter forecast period within the Firm\u2019s methodology. The eight-quarter forecast incorporates hundreds of macroeconomic variables (\u201cMEVs\u201d) that are relevant for exposures across the Firm, with modeled credit\nlosses being driven primarily by a subset of less than twenty variables. The specific variables that have the greatest effect on the modeled losses vary by portfolio and geography.\n\u2022\nKey MEVs for the consumer portfolio include regional U.S. unemployment rates and U.S. HPI.\n\u2022\nKey MEVs for the wholesale portfolio include U.S. unemployment, U.S. real GDP growth rate, U.S. equity prices, U.S. interest rates, U.S. corporate credit spreads, oil prices, U.S. commercial real estate prices and U.S. HPI.\nChanges in the Firm\u2019s assumptions and forecasts of economic conditions could significantly affect its estimate of expected credit losses in the portfolio at the balance sheet date or lead to significant changes in the estimate from one reporting period to the next.\nIt is difficult to estimate how potential changes in any one factor or input might affect the overall allowance for credit losses because management considers a wide variety of factors and inputs in estimating the allowance for credit losses. Changes in the factors and inputs considered may not occur at the same rate and may not be consistent across all geographies or product types, and changes in factors and inputs may be directionally inconsistent, such that improvement in one factor or input may offset deterioration in others.\nTo consider the impact of a hypothetical alternate macroeconomic forecast, the Firm compared the modeled credit losses determined using its central and relative adverse macroeconomic scenarios, which are two of the five scenarios considered in estimating the allowances for loan losses and lending-related commitments. The central and relative adverse scenarios each included a full suite of MEVs, but differed in the levels, paths and peaks/troughs of those variables over the eight-quarter forecast period.\nFor example, compared to the Firm\u2019s central scenario shown on page 129 and in Note 13, the Firm\u2019s relative adverse scenario assumes an elevated U.S. unemployment rate, averaging approximately 2.0% higher over the eight-quarter forecast, with a peak difference of approximately 2.8% in the fourth quarter of 2026.\nThis analysis is not intended to estimate expected future changes in the allowance for credit losses, for a number of reasons, including:\n\u2022\nThe allowance as of December\u00a031, 2025, reflects credit losses beyond those estimated under the central scenario due to the weight placed on the adverse scenarios.\n\u2022\nThe impacts of changes in many MEVs are both interrelated and nonlinear, so the results of this\n154\nJPMorgan Chase & Co./2025 Form 10-K\nanalysis cannot be simply extrapolated for more severe changes in macroeconomic variables.\n\u2022\nExpectations of future changes in portfolio composition and borrower behavior can significantly affect the allowance for credit losses.\nTo demonstrate the sensitivity of credit loss estimates to macroeconomic forecasts as of December\u00a031, 2025, the Firm compared the modeled estimates under its relative adverse scenario to its central scenario. Without considering offsetting or correlated effects in other qualitative components of the Firm\u2019s allowance for credit losses, the comparison between these two scenarios for the exposures below reflect the following differences:\n\u2022\nAn increase of approximately $1.2 billion for residential real estate loans and lending-related commitments\n\u2022\nAn increase of approximately $4.4 billion for credit card loans\n\u2022\nAn increase of approximately $5.1 billion for wholesale loans and lending-related commitments\nThis analysis relates only to the modeled credit loss estimates and is not intended to estimate changes in the overall allowance for credit losses as it does not reflect any potential changes in other adjustments to the quantitative calculation, which would also be influenced by the judgment management applies to the modeled lifetime loss estimates to reflect the uncertainty and imprecision of these modeled lifetime loss estimates based on then-current circumstances and conditions.\nIn the fourth quarter of 2025, the Firm recorded an allowance related to the Apple Card transaction, estimated based on certain forward-looking assumptions of the portfolio\u2019s risk characteristics and expected credit losses at the time of closing. The forecasted Apple credit card portfolio is excluded from the modeled estimates sensitivity analysis above while the Firm integrates the Apple Card transaction into its allowance model.\nRecognizing that forecasts of macroeconomic conditions are inherently uncertain, the Firm believes that its process to consider the available information and associated risks and uncertainties is appropriately governed and that its estimates of expected credit losses were reasonable and appropriate for the year ended\nDecember\u00a031, 2025\n.\nFair value\nJPMorganChase carries a portion of its assets and liabilities at fair value. The majority of such assets and liabilities are measured at fair value on a recurring basis, including trading assets and liabilities, AFS securities, structured note products and certain securities financing agreements. Certain assets and liabilities are measured at fair value on a nonrecurring basis, including certain mortgage, home equity and other loans, where the carrying value is based on the fair value of the underlying collateral.\nAssets measured at fair value\nThe following table includes the Firm\u2019s assets measured at fair value and the portion of such assets that are classified within level 3 of the fair value hierarchy. Refer to Note 2 for further information.\nDecember 31, 2025\n(in millions, except ratios)\nTotal assets at fair value\nTotal level 3 assets\nFederal funds sold and securities purchased under resale agreements\n$\n327,018\n$\n\u2014\nSecurities borrowed\n98,111\n\u2014\nTrading assets:\n\u00a0\u00a0\u00a0\u00a0Trading-debt and equity instruments\n745,096\n2,794\n\u00a0\u00a0\u00a0\u00a0Derivative receivables\n(a)\n57,777\n8,926\nTotal trading assets\n802,873\n11,720\nAFS securities\n507,198\n111\nLoans\n70,684\n3,062\nMSRs\n9,167\n9,167\nOther\n14,801\n1,047\nTotal assets measured\n\nat fair value on a recurring basis\n1,829,852\n25,107\nTotal assets measured at fair value on a nonrecurring basis\n2,018\n1,392\nTotal assets measured\n\nat fair value\n$\n1,831,870\n$\n26,499\nTotal Firm assets\n$\n4,424,900\nLevel 3 assets at fair value as a percentage of total Firm assets\n(a)\n1\n%\nLevel 3 assets at fair value as a percentage of total Firm assets at fair value\n(a)\n1\n%\n(a)\nFor purposes of the table above, the derivative receivables total reflects the impact of netting adjustments; however, the $8.9 billion of derivative receivables classified as level 3 does not reflect the netting adjustment\u00a0as such netting is not relevant to a presentation based on the transparency of inputs to the valuation of an asset. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.\nJPMorgan Chase & Co./2025 Form 10-K\n155\nManagement\u2019s discussion and analysis\nValuation\nDetails of the Firm\u2019s processes for determining fair value are set out in Note 2. Estimating fair value requires the application of judgment. The type and level of judgment required is largely dependent on the amount of observable market information available to the Firm. For instruments valued using internally developed valuation models and other valuation techniques that use significant unobservable inputs and are therefore classified within level 3 of the fair value hierarchy, judgments used to estimate fair value are more significant than those required when estimating the fair value of instruments classified within levels 1 and 2.\nIn arriving at an estimate of fair value for an instrument within level 3, management must first determine the appropriate valuation model or other valuation technique to use. Second, the lack of observability of certain significant inputs requires management to assess relevant empirical data in deriving valuation inputs including, for example, transaction details, yield curves, interest rates, prepayment speeds, default rates, volatilities, correlations, prices (such as commodity, equity or debt prices), valuations of comparable instruments, foreign exchange rates and credit curves. Refer to Note 2 for a further discussion of the valuation of level 3 instruments, including unobservable inputs used.\nFor instruments classified in levels 2 and 3, management judgment must be applied to assess the appropriate level of valuation adjustments to reflect counterparty credit quality, the Firm\u2019s creditworthiness, market funding rates, liquidity considerations, unobservable parameters, and for portfolios that meet specified criteria, the size of the net open risk position. The judgments made are typically affected by the type of product and its specific contractual terms, and the level of liquidity for the product or within the market as a whole. In periods of heightened market volatility and uncertainty judgments are further affected by the wider variation of reasonable valuation estimates, particularly for positions that are less liquid. Refer to Note 2 for a further discussion of valuation adjustments applied by the Firm.\nImprecision in estimating unobservable market inputs or other factors can affect the amount of gain or loss recorded for a particular position. Furthermore, while the Firm believes its valuation methods are appropriate and consistent with those of other market participants, the methods and assumptions used reflect management judgment and may vary across the Firm\u2019s businesses and portfolios.\nThe Firm uses various methodologies and assumptions in the determination of fair value. The use of methodologies or assumptions different than those used by the Firm could result in a different estimate of fair value at the reporting date. Refer to Note 2 for a detailed discussion of the Firm\u2019s valuation process and\nhierarchy, and its determination of fair value for individual financial instruments.\nGoodwill impairment\nUnder U.S. GAAP, goodwill must be allocated to reporting units and tested for impairment at least annually. The Firm\u2019s process and methodology used to conduct goodwill impairment testing is described in Note 15.\nManagement applies significant judgment when testing goodwill for impairment. The goodwill associated with each business combination is allocated to the related reporting units for goodwill impairment testing.\nFor the year ended December\u00a031, 2025, the Firm reviewed current economic conditions, estimated market cost of equity, as well as actual business results and projections of business performance. Based on such reviews, the Firm has concluded that goodwill was not impaired as of December\u00a031, 2025. For each of the reporting units, fair value exceeded carrying value by at least 20% and there was no indication of a significant risk of goodwill impairment based on current projections and valuations.\nThe projections for the Firm\u2019s reporting units are consistent with management\u2019s current business outlook assumptions in the short term, and the Firm\u2019s best estimates of long-term growth and return on equity in the longer term. Where possible, the Firm uses third-party and peer data to benchmark its assumptions and estimates.\nRefer to Note 15 for additional information on goodwill, including the goodwill impairment assessment as of December\u00a031, 2025.\nCredit card rewards liability\nJPMorganChase offers credit cards with various rewards programs which allow cardholders to earn rewards points based on their account activity and the terms and conditions of the rewards program. Generally, there are no limits on the points that an eligible cardholder can earn, nor do the points expire, and the points can be redeemed for a variety of rewards, including cash (predominantly in the form of account credits), gift cards and travel. The Firm maintains a rewards liability which represents the estimated cost of rewards points earned and expected to be redeemed by cardholders. The liability is accrued as the cardholder earns the benefit and is reduced when the cardholder redeems points. This liability was $16.0 billion and $14.4 billion at December\u00a031, 2025 and 2024, respectively, and is recorded in accounts payable and other liabilities on the Consolidated balance sheets. The increase in the liability was driven by continued growth in rewards points earned on higher spend and promotional offers that has outpaced redemptions throughout 2025.\nThe rewards liability is sensitive to redemption rate (\u201cRR\u201d) and cost per point (\u201cCPP\u201d) assumptions. The RR\n156\nJPMorgan Chase & Co./2025 Form 10-K\nassumption is used to estimate the number of points earned by customers that will be redeemed over the life of the account. The CPP assumption is used to estimate the cost of future point redemptions. These assumptions are evaluated periodically considering historical actuals, cardholder redemption behavior and management judgment. Updates to these assumptions will impact the rewards liability. As of December\u00a031, 2025, a combined increase of 25 basis points in RR and 1 basis point in CPP would increase the rewards liability by approximately $512 million.\nIncome taxes\nJPMorganChase is subject to the income tax laws of the various jurisdictions in which it operates, including U.S. federal, state and local, and non-U.S. jurisdictions. These laws are often complex and may be subject to different interpretations. To determine the financial statement impact of accounting for income taxes, including the provision for income tax expense and unrecognized tax benefits, JPMorganChase must make assumptions and judgments about how to interpret and apply these complex tax laws to numerous transactions and business events, as well as make judgments regarding the timing of when certain items may affect taxable income in the U.S. and non-U.S. tax jurisdictions.\nJPMorganChase\u2019s interpretations of tax laws around the world are subject to review and examination by the various taxing authorities in the jurisdictions where the Firm operates, and disputes may occur regarding its view on a tax position. These disputes over interpretations with the various taxing authorities may be settled by audit, administrative appeals or adjudication in the court systems of the tax jurisdictions in which the Firm operates. JPMorganChase regularly reviews whether it may be assessed additional income taxes as a result of the resolution of these matters, and the Firm records additional unrecognized tax benefits, as appropriate. In addition, the Firm may revise its estimate of income taxes due to changes in income tax laws, legal interpretations, and business strategies. It is possible that revisions in the Firm\u2019s estimate of income taxes may materially affect the Firm\u2019s results of operations in any reporting period.\nDeferred taxes arise from differences between assets and liabilities measured for financial reporting versus income tax return purposes. Deferred tax assets are recognized if, in management\u2019s judgment, their realizability is determined to be more likely than not. Deferred taxes are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized within the provision for income taxes in the period enacted.\nThe Firm has also recognized deferred tax assets in connection with certain tax attributes, including net operating loss (\u201cNOL\u201d) carryforwards, foreign tax credit (\u201cFTC\u201d) carryforwards, and general business tax credit\n(\u201cGBC\u201d) carryforwards. The Firm performs regular reviews to ascertain whether its deferred tax assets are realizable. These reviews include management\u2019s estimates and assumptions regarding future taxable income, including foreign source income, and may incorporate various tax planning strategies, including strategies that may be available to utilize NOLs and FTCs before they expire. In connection with these reviews, if it is determined that a deferred tax asset is not realizable, a valuation allowance is established. The valuation allowance may be reversed in a subsequent reporting period if the Firm determines that, based on revised estimates of future taxable income or changes in tax planning strategies, it is more likely than not that all or part of the deferred tax asset will become realizable. As of December\u00a031, 2025, management has determined it is more likely than not that the Firm will realize its deferred tax assets, net of the existing valuation allowance.\nThe Firm adjusts its unrecognized tax benefits as necessary when new information becomes available, including changes in tax law and regulations, and interactions with taxing authorities. Uncertain tax positions that meet the more-likely-than-not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit that management believes is more likely than not to be realized upon settlement. It is possible that the reassessment of JPMorganChase\u2019s unrecognized tax benefits may have a material impact on its effective income tax rate in the period in which the reassessment occurs. Although the Firm believes that its estimates are reasonable, the final tax amount could be different from the amounts reflected in the Firm\u2019s income tax provisions and accruals. To the extent that the final outcome of these amounts is different than the amounts recorded, such differences will generally impact the Firm\u2019s provision for income taxes in the period in which such a determination is made.\nThe Firm\u2019s provision for income taxes is composed of current and deferred taxes. The current and deferred tax provisions are calculated based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed during the subsequent year. Adjustments based on filed returns are generally recorded in the period when the tax returns are filed and the global tax implications are known, which could impact the Firm\u2019s effective tax rate.\nRefer to Note 25 for additional information on income taxes.\nLitigation reserves\nRefer to Note 30 for a description of the significant estimates and judgments associated with establishing litigation reserves.\nJPMorgan Chase & Co./2025 Form 10-K\n157\nManagement\u2019s discussion and analysis\nACCOUNTING AND REPORTING DEVELOPMENTS\nFinancial Accounting Standards Board (\u201cFASB\u201d) Standards Adopted since January 1, 2025\nStandard\nSummary of guidance\nEffects on financial statements\nIncome Taxes: Improvements to Income Tax Disclosures\nIssued December 2023\n\u2022\nRequires disclosure of income taxes paid disaggregated by 1) federal, state, and foreign taxes and 2) individual jurisdiction on the basis of a quantitative threshold of equal to or greater than 5 percent of total income taxes paid (net of refunds received).\n\u2022\nRequires disclosure of the effective tax rate reconciliation by specific categories, at a minimum, with accompanying qualitative disclosures, and separate disclosure of reconciling items based on quantitative thresholds.\n\u2022\nRequires categories within the effective tax rate reconciliation to be further disaggregated if quantitative thresholds are met.\n\u2022\nAdopted retrospectively for the Firm\u2019s annual Consolidated Financial Statements for the year ended December 31, 2025.\n\u2022\nThe adoption of this guidance resulted in expanded income tax disclosures, including more detailed information about the Firm\u2019s effective tax rate and income tax expense reconciliation by specific categories, as well as disclosure of income taxes paid, disaggregated by jurisdiction. Refer to Note 25 for further information.\n158\nJPMorgan Chase & Co./2025 Form 10-K\nFASB Standards Issued but not yet Adopted as of December 31, 2025\nStandard\nSummary of guidance\nEffects on financial statements\nIncome Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses\nIssued November 2024\n\u2022\nRequires additional disaggregation of specific types of expenses within the Notes to the Consolidated Financial Statements on an annual and interim basis.\n\n\u2022\nRequired effective date: Annual financial statements for the year ending December 31, 2027.\n(a)\n\u2022\nThe guidance may be applied on a prospective or retrospective basis.\n\u2022\nThe Firm is evaluating the potential impact on the Consolidated Financial Statements disclosures, as well as the Firm\u2019s planned date of adoption.\nDerivatives and Hedging and Revenue from Contracts with Customers: Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract\nIssued September 2025\n\u2022\nNo longer requires derivative accounting treatment for certain contracts where the underlying variable is solely based on the specific operations or activities of one of the contracting parties. The new guidance also clarifies the applicability of derivative accounting treatment to contracts with both in scope and out of scope terms.\n\u2022\nClarifies the accounting for share-based payments from a customer in exchange for goods or services.\n\u2022\nRequired effective date: January 1, 2027.\n(a)\n\u2022\nThe guidance may be applied on a prospective or modified retrospective basis.\n\u2022\nThe Firm is evaluating the potential impact on the Consolidated Financial Statements, as well as the Firm's planned date of adoption.\nIntangibles - Goodwill and Other - Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software\nIssued September 2025\n\u2022\nAmends the cost capitalization guidance by removing all references to software development project stages to better align with current software development methods.\n\u2022\nRequires software cost capitalization to begin when 1) management has authorized and committed to funding the software project, and 2) it is probable that the software will be completed and used to perform its intended function.\n\u2022\nRequired effective date: January 1, 2028.\n(a)\n\u2022\nThe guidance may be applied on a prospective, modified, or retrospective transition basis.\n\u2022\nThe Firm is evaluating the potential impact on the Consolidated Financial Statements, as well as the Firm\u2019s planned date of adoption.\nFinancial Instruments - Credit Losses: Purchased Loans\nIssued November 2025\n\u2022\nEstablishes an additional allowance framework for purchased, seasoned held-for-investment loans, excluding credit cards.\n\u2022\nRequires that management\u2019s initial estimate of expected credit losses be recognized as an increase to the allowance for credit losses with a corresponding increase to the loan\u2019s amortized cost.\n\u2022\nRequired effective date: January 1, 2027.\n(a)\n\u2022\nThe guidance is required to be applied on a prospective basis.\n\u2022\nThe Firm is evaluating the potential impact on the Consolidated Financial Statements, as well as the Firm\u2019s planned date of adoption.\nDerivatives and Hedging: Hedge Accounting Improvements\nIssued November 2025\n\u2022\nAmends the hedge accounting guidance to allow different risks to be pooled in the same portfolio for cash flow hedging, if the hedging instrument is highly effective against each hedged risk in the portfolio.\n\u2022\nProvides greater flexibility and expands eligibility for hedge accounting, including hedges of nonfinancial transactions, variable rate borrowings, net investment hedges, and hedges involving the use of written options.\n\u2022\nRequired effective date: January 1, 2027.\n(a)\n\u2022\nThe guidance is required to be applied on a prospective basis.\n\u2022\nThe Firm is evaluating the potential impact on the Consolidated Financial Statements, as well as the Firm\u2019s planned date of adoption.\n(a)\nEarly adoption is permitted.\nJPMorgan Chase & Co./2025 Form 10-K\n159\nManagement\u2019s discussion and analysis\nFORWARD-LOOKING STATEMENTS\nFrom time to time, the Firm has made and will make forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as \u201canticipate,\u201d \u201ctarget,\u201d \u201cexpect,\u201d \u201cestimate,\u201d \u201cintend,\u201d \u201cplan,\u201d \u201cgoal,\u201d \u201cbelieve,\u201d or other words of similar meaning. Forward-looking statements provide JPMorganChase\u2019s current expectations or forecasts of future events, circumstances, results or aspirations. JPMorganChase\u2019s disclosures in this 2025 Form 10-K contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Firm also may make forward-looking statements in its other documents filed or furnished with the SEC. In addition, the Firm\u2019s senior management may make forward-looking statements orally to investors, analysts, representatives of the media and others.\nAll forward-looking statements are, by their nature, subject to risks and uncertainties, many of which are beyond the Firm\u2019s control. JPMorganChase\u2019s actual future results may differ materially from those set forth in its forward-looking statements. While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ from those in the forward-looking statements:\n\u2022\nLocal, regional and global business, economic and political conditions and geopolitical events, including geopolitical tensions and hostilities;\n\u2022\nChanges in laws, rules and regulatory requirements, including capital and liquidity requirements affecting the Firm\u2019s businesses, and the ability of the Firm to address those requirements;\n\u2022\nHeightened regulatory and governmental oversight and scrutiny of JPMorganChase\u2019s business practices, including dealings with retail customers;\n\u2022\nChanges in trade, monetary and fiscal policies and laws;\n\u2022\nChanges in the level of inflation;\n\u2022\nChanges in income tax laws, rules, and regulations;\n\u2022\nSecurities and capital markets behavior, including changes in market liquidity and volatility;\n\u2022\nChanges in investor sentiment or consumer spending or savings behavior;\n\u2022\nAbility of the Firm to manage effectively its capital and liquidity;\n\u2022\nChanges in credit ratings assigned to the Firm or its subsidiaries;\n\u2022\nDamage to the Firm\u2019s reputation;\n\u2022\nAbility of the Firm to appropriately address public criticism of its business activities;\n\u2022\nAbility of the Firm to deal effectively with an economic slowdown or other economic or market disruption, including in the interest rate environment;\n\u2022\nTechnology changes instituted by the Firm, its counterparties or competitors, including AI;\n\u2022\nThe effectiveness of the Firm\u2019s control agenda;\n\u2022\nAbility of the Firm to develop or discontinue products and services, and the extent to which products or services previously sold by the Firm require the Firm to incur liabilities or absorb losses not contemplated at their initiation or origination;\n\u2022\nAcceptance of the Firm\u2019s new and existing products and services by the marketplace and the ability of the Firm to innovate and to increase market share;\n\u2022\nAbility of the Firm to attract and retain qualified employees;\n\u2022\nAbility of the Firm to control expenses;\n\u2022\nCompetitive pressures;\n\u2022\nChanges in the credit quality of the Firm\u2019s clients, customers and counterparties;\n\u2022\nAdequacy of the Firm\u2019s risk management framework, disclosure controls and procedures and internal control over financial reporting;\n\u2022\nAdverse judicial or regulatory proceedings;\n\u2022\nAbility of the Firm to determine accurate values of certain assets and liabilities;\n\u2022\nOccurrence of natural or man-made disasters or calamities, including health emergencies, an outbreak or escalation of hostilities or other geopolitical instabilities, the effects of climate change or extraordinary events beyond the Firm\u2019s control, and the Firm\u2019s ability to deal effectively with disruptions caused by the foregoing;\n\u2022\nAbility of the Firm to maintain the security of its financial, accounting, technology, data processing and other operational systems and facilities;\n\u2022\nAbility of the Firm to withstand disruptions that may be caused by any failure of its operational systems or those of third parties;\n\u2022\nAbility of the Firm to effectively defend itself against cyber attacks and other attempts by unauthorized parties to access information of the Firm or its customers and clients or to disrupt the Firm\u2019s systems; and\n\u2022\nThe other risks and uncertainties detailed in Part I, Item 1A: Risk Factors in JPMorganChase\u2019s 2025 Form 10-K.\nAny forward-looking statements made by or on behalf of the Firm speak only as of the date they are made, and JPMorganChase does not undertake to update any forward-looking statements. The reader should, however, consult any further disclosures of a forward-looking nature the Firm may make in any subsequent Annual Reports on Form 10-Ks, Quarterly Reports on Form 10-Qs, or Current Reports on Form 8-K.\n160\nJPMorgan Chase & Co./2025 Form 10-K\nManagement\u2019s report on internal control over financial reporting\nManagement of JPMorgan Chase & Co. (\u201cJPMorganChase\u201d or the \u201cFirm\u201d) is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Firm\u2019s principal executive and principal financial officers, or persons performing similar functions, and effected by JPMorganChase\u2019s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (\u201cU.S. GAAP\u201d).\nJPMorganChase\u2019s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Firm\u2019s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Firm are being made only in accordance with authorizations of JPMorganChase\u2019s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Firm\u2019s assets that could have a material effect on the financial statements.\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management has completed an assessment of the effectiveness of the Firm\u2019s internal control over financial reporting as of December\u00a031, 2025. In making the assessment, management used the \u201cInternal Control \u2014 Integrated Framework\u201d (\u201cCOSO 2013\u201d) promulgated by the Committee of Sponsoring Organizations of the Treadway Commission (\u201cCOSO\u201d).\nBased upon the assessment performed, management concluded that as of December\u00a031, 2025, JPMorganChase\u2019s internal control over financial reporting was effective based upon the COSO 2013 framework. Additionally, based upon management\u2019s assessment, the Firm determined that there were no material weaknesses in its internal control over financial reporting as of December\u00a031, 2025.\nThe effectiveness of the Firm\u2019s internal control over financial reporting as of December\u00a031, 2025, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.\nJames Dimon\nChairman and Chief Executive Officer\nJeremy Barnum\nExecutive Vice President and Chief Financial Officer\nFebruary\u00a013, 2026\nJPMorgan Chase & Co./2025 Form 10-K\n161\nReport of Independent Registered Public Accounting Firm\nTo the Board of Directors and Shareholders of JPMorgan Chase & Co.:\nOpinions on the Financial Statements and Internal Control over Financial Reporting\nWe have audited the accompanying consolidated balance sheets of JPMorgan Chase & Co. and its subsidiaries (the \u201cFirm\u201d) as of December\u00a031, 2025 and 2024, and the related consolidated statements of income, comprehensive income, changes in stockholders\u2019 equity and cash flows for each of the three years in the period ended December\u00a031, 2025, including the related notes (collectively referred to as the \u201cconsolidated financial statements\u201d). We also have audited the Firm\u2019s internal control over financial reporting as of December\u00a031, 2025, based on criteria established in\nInternal Control - Integrated Framework\n (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).\nIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Firm as of\n\nDecember\u00a031, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December\u00a031, 2025\n\nin conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Firm maintained, in all material respects, effective internal control over financial reporting as of December\u00a031, 2025, based on criteria established in\nInternal Control \u2013 Integrated Framework\n(2013) issued by the COSO.\nBasis for Opinions\nThe Firm\u2019s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management\u2019s report on internal control over financial reporting. Our responsibility is to express opinions on the Firm\u2019s consolidated financial statements and on the Firm\u2019s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Firm in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial\nstatements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.\nOur audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.\nDefinition and Limitations of Internal Control over Financial Reporting\nA company\u2019s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company\u2019s internal control over financial reporting includes those policies and procedures that (i)\u00a0pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii)\u00a0provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii)\u00a0provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company\u2019s assets that could have a material effect on the financial statements.\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\nPricewaterhouseCoopers LLP\n  \u2022  300 Madison Avenue  \u2022\nNew York, NY 10017\n162\nJPMorgan Chase & Co./2025 Form 10-K\nReport of Independent Registered Public Accounting Firm\nCritical Audit Matters\nThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.\nAllowance for Loan Losses \u2013 Portfolio-Based Component of the Wholesale and Credit Card Retained Loan Portfolios\nAs described in Note 13 to the consolidated financial statements, as of\nDecember\u00a031, 2025,\nthe allowance for loan losses for the portfolio-based component of the wholesale and credit card retained loan portfolios was $7.6 billion and $15.6 billion, respectively, on total portfolio-based wholesale and credit card retained loans of $788.0 billion and $247.8 billion, respectively. The Firm\u2019s allowance for loan losses represents management\u2019s estimate of expected credit losses over the remaining expected life of the Firm's retained loan portfolios. The portfolio-based component begins with a quantitative calculation that covers expected credit losses over a loan\u2019s expected life. The expected credit losses are derived using a weighted average of five internally developed macroeconomic scenarios over an eight-quarter forecast period. As disclosed by management, one of the most significant judgments involved in estimating the allowance for loan losses relates to the forecasted macroeconomic variables used to estimate credit losses over the eight-quarter forecast period within management\u2019s methodology. The significant forecasted macroeconomic variables for the consumer portfolio include regional U.S. unemployment rates and U.S. HPI. The significant forecasted macroeconomic variables for the wholesale portfolio include U.S. unemployment, U.S. real GDP growth rate, U.S. equity prices, U.S. interest rates, U.S. corporate credit spreads, oil prices, U.S. commercial real estate prices and U.S. HPI.\nThe principal considerations for our determination that performing procedures relating to the allowance for loan losses for the portfolio-based component of the wholesale and credit card retained loan portfolios is a critical audit matter are (i) the significant judgment by management when developing the allowance for loan losses related to the portfolio-based component of the wholesale and credit card retained loan portfolios; (ii) a high degree of auditor judgment, subjectivity, and\neffort in performing procedures and evaluating management\u2019s significant assumptions related to the U.S. unemployment and the U.S. real GDP growth rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the allowance for loan losses related to the portfolio-based component of the wholesale and credit card retained loan portfolios, including controls over the development of the forecasted macroeconomic variables. These procedures also included, among others, (i) testing management\u2019s process for developing the allowance for loan losses related to the portfolio-based component of the wholesale and credit card retained loan portfolios (ii) testing the completeness and accuracy of certain data used in developing the forecasted macroeconomic variables and (iii) the involvement of professionals with specialized skill and knowledge to assist in evaluating (a) the appropriateness of the methodology used by management in developing the forecasted macroeconomic variables and (b) the reasonableness of the U.S. unemployment and the U.S. real GDP growth rate assumptions.\nFair Value of Certain Level 3 Financial Instruments\nAs described in Note 2 to the consolidated financial statements, as of\nDecember\u00a031, 2025, the Firm had certain financial instruments which included $2.4 billion of deposits, $5.6 billion of short-term borrowings and $46.7 billion of long-term debt, which are\nmeasured at fair value on a recurring basis and are classified as level 3. Financial instruments valued using internally developed valuation models and other valuation techniques that use significant unobservable inputs are classified within level 3 of the fair value hierarchy. The principal valuation techniques and unobservable inputs used by management to measure the fair value of certain level 3 financial instruments include the following internally developed valuation models: (i) option pricing, which uses unobservable inputs related to interest rate volatility, Bermudan switch value, interest rate correlation, interest rate-to-foreign exchange correlation, equity volatility, equity correlation, equity-to-foreign exchange correlation and equity-to-interest rate correlation and (ii) discounted cash flows, which uses unobservable inputs related to credit correlation, credit spread, recovery rate, yield and loss severity.\nThe principal considerations for our determination that performing procedures relating to the fair value of certain level 3 financial instruments is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of certain level\nJPMorgan Chase & Co./2025 Form 10-K\n163\nReport of Independent Registered Public Accounting Firm\n3 financial instruments; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the aforementioned unobservable inputs; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the fair value estimate of certain level 3 financial instruments, including controls over the aforementioned unobservable inputs. These procedures also included, among others, (i) testing the completeness and accuracy of certain data provided by management and (ii) the involvement of professionals with specialized skill and knowledge to assist in evaluating the reasonableness of management\u2019s estimate by (a) developing an independent estimate of the fair value for a sample of certain level 3 financial instruments using independently developed unobservable inputs and (b) comparing the independent estimate of the fair value to management\u2019s estimate.\nNew York, New York\nFebruary\u00a013, 2026\nWe have served as the Firm\u2019s auditor since 1965.\n\n164\nJPMorgan Chase & Co./2025 Form 10-K\nJPMorgan Chase & Co.\nConsolidated statements of income\nYear ended December 31, (in millions, except per share data)\n2025\n2024\n2023\nRevenue\nInvestment banking fees\n$\n9,615\n\n$\n8,910\n\n$\n6,519\n\nPrincipal transactions\n27,212\n\n24,787\n\n24,460\n\nLending- and deposit-related fees\n9,093\n\n7,606\n\n7,413\n\nAsset management fees\n20,327\n\n17,801\n\n15,220\n\nCommissions and other fees\n8,539\n\n7,530\n\n6,836\n\nInvestment securities losses\n(\n57\n)\n(\n1,021\n)\n(\n3,180\n)\nMortgage fees and related income\n1,381\n\n1,401\n\n1,176\n\nCard income\n4,720\n\n5,497\n\n4,784\n\nOther income\n6,174\n\n12,462\n\n5,609\n\nNoninterest revenue\n87,004\n\n84,973\n\n68,837\n\nInterest income\n193,341\n\n193,933\n\n170,588\n\nInterest expense\n97,898\n\n101,350\n\n81,321\n\nNet interest income\n95,443\n\n92,583\n\n89,267\n\nTotal net revenue\n182,447\n\n177,556\n\n158,104\n\nProvision for credit losses\n14,212\n\n10,678\n\n9,320\n\nNoninterest expense\nCompensation expense\n54,487\n\n51,357\n\n46,465\n\nOccupancy expense\n5,461\n\n5,026\n\n4,590\n\nTechnology, communications and equipment expense\n11,029\n\n9,831\n\n9,246\n\nProfessional and outside services\n12,356\n\n11,057\n\n10,235\n\nMarketing\n5,531\n\n4,974\n\n4,591\n\nOther expense\n6,776\n\n9,552\n\n12,045\n\nTotal noninterest expense\n95,640\n\n91,797\n\n87,172\n\nIncome before income tax expense\n72,595\n\n75,081\n\n61,612\n\nIncome tax expense\n15,547\n\n16,610\n\n12,060\n\nNet income\n$\n57,048\n\n$\n58,471\n\n$\n49,552\n\nNet income applicable to common stockholders\n$\n55,681\n\n$\n56,868\n\n$\n47,760\n\nNet income per common share data\nBasic earnings per share\n$\n20.05\n\n$\n19.79\n\n$\n16.25\n\nDiluted earnings per share\n20.02\n\n19.75\n\n16.23\n\nWeighted-average basic shares\n2,776.5\n\n2,873.9\n\n2,938.6\n\nWeighted-average diluted shares\n2,781.5\n\n2,879.0\n\n2,943.1\n\nThe Notes to Consolidated Financial Statements are an integral part of these statements.\nJPMorgan Chase & Co./2025 Form 10-K\n165\nJPMorgan Chase & Co.\nConsolidated statements of comprehensive income\nYear ended December 31, (in millions)\n2025\n2024\n2023\nNet income\n$\n57,048\n\n$\n58,471\n\n$\n49,552\n\nOther comprehensive income/(loss), after\u2013tax\nUnrealized gains/(losses) on investment securities\n3,569\n\n(\n87\n)\n5,381\n\nTranslation adjustments, net of hedges\n1,339\n\n(\n858\n)\n329\n\nFair value hedges\n64\n\n(\n87\n)\n(\n101\n)\nCash flow hedges\n3,388\n\n(\n882\n)\n1,724\n\nDefined benefit pension and OPEB plans\n579\n\n(\n63\n)\n373\n\nDVA on fair value option elected liabilities\n(\n773\n)\n(\n36\n)\n(\n808\n)\nTotal other comprehensive income/(loss), after\u2013tax\n8,166\n\n(\n2,013\n)\n6,898\n\nComprehensive income\n$\n65,214\n\n$\n56,458\n\n$\n56,450\n\nThe Notes to Consolidated Financial Statements are an integral part of these statements.\n166\nJPMorgan Chase & Co./2025 Form 10-K\nJPMorgan Chase & Co.\nConsolidated balance sheets\nDecember 31, (in millions, except share data)\n2025\n2024\nAssets\nCash and due from banks\n$\n21,742\n\n$\n23,372\n\nDeposits with banks\n321,596\n\n445,945\n\nFederal funds sold and securities purchased under resale agreements (included\n$\n327,018\n and $\n286,771\n at fair value)\n336,426\n\n295,001\n\nSecurities borrowed (included\n$\n98,111\n and $\n83,962\n at fair value)\n286,191\n\n219,546\n\nTrading assets (included assets pledged of\n$\n165,927\n and $\n136,070\n)\n802,873\n\n637,784\n\nAvailable-for-sale securities (amortized cost of\n$\n507,226\n and $\n411,045\n; included assets pledged of\n$\n7,735\n and $\n10,162\n)\n507,198\n\n406,852\n\nHeld-to-maturity securities\n270,134\n\n274,468\n\nInvestment securities, net of allowance for credit losses\n777,332\n\n681,320\n\nLoans (included\n$\n70,684\n and $\n41,350\n at fair value)\n1,493,429\n\n1,347,988\n\nAllowance for loan losses\n(\n25,765\n)\n(\n24,345\n)\nLoans, net of allowance for loan losses\n1,467,664\n\n1,323,643\n\nAccrued interest and accounts receivable\n111,599\n\n101,223\n\nPremises and equipment\n36,244\n\n32,223\n\nGoodwill, MSRs and other intangible assets\n64,458\n\n64,560\n\nOther assets (included\n$\n15,849\n and $\n15,122\n at fair value and assets pledged of\n$\n11,984\n and $\n6,288\n)\n198,775\n\n178,197\n\nTotal assets\n(a)\n$\n4,424,900\n\n$\n4,002,814\n\nLiabilities\nDeposits (included\n$\n20,930\n and $\n33,768\n at fair value)\n$\n2,559,320\n\n$\n2,406,032\n\nFederal funds purchased and securities loaned or sold under repurchase agreements (included\n$\n360,194\n and $\n226,329\n at fair value)\n442,396\n\n296,835\n\nShort-term borrowings (included\n$\n32,460\n and $\n26,521\n at fair value)\n64,776\n\n52,893\n\nTrading liabilities\n216,019\n\n192,883\n\nAccounts payable and other liabilities (included\n$\n6,660\n and $\n5,893\n at fair value)\n316,794\n\n280,672\n\nBeneficial interests issued by consolidated VIEs (included\n $\n5\n and $\n1\n at fair value)\n27,951\n\n27,323\n\nLong-term debt (included\n$\n134,559\n and $\n100,780\n at fair value)\n435,206\n\n401,418\n\nTotal liabilities\n(a)\n4,062,462\n\n3,658,056\n\nCommitments and contingencies (refer to Notes 28, 29 and 30)\nStockholders\u2019 equity\nPreferred stock ($\n1\n par value; authorized\n200,000,000\n shares: issued\n2,005,375\n and\n2,005,375\n shares)\n20,045\n\n20,050\n\nCommon stock ($\n1\n par value; authorized\n9,000,000,000\n shares; issued\n4,104,933,895\n shares)\n4,105\n\n4,105\n\nAdditional paid-in capital\n91,114\n\n90,911\n\nRetained earnings\n416,055\n\n376,166\n\nAccumulated other comprehensive losses\n(\n4,290\n)\n(\n12,456\n)\nTreasury stock, at cost (\n1,408,661,319\n and\n1,307,313,494\n shares)\n(\n164,591\n)\n(\n134,018\n)\nTotal stockholders\u2019 equity\n362,438\n\n344,758\n\nTotal liabilities and stockholders\u2019 equity\n$\n4,424,900\n\n$\n4,002,814\n\n(a)\nThe following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at December\u00a031, 2025 and 2024. The assets of the consolidated VIEs are used to settle the liabilities of those entities. The holders of the beneficial interests generally do not have recourse to the general credit of JPMorganChase. The assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. Refer to Note 14 for a further discussion.\nDecember 31, (in millions)\n2025\n2024\nAssets\nTrading assets\n$\n4,835\n\n$\n3,885\n\nLoans\n37,777\n\n36,510\n\nAll other assets\n683\n\n681\n\nTotal assets\n$\n43,295\n\n$\n41,076\n\nLiabilities\nBeneficial interests issued by consolidated VIEs\n$\n27,951\n\n$\n27,323\n\nAll other liabilities\n691\n\n454\n\nTotal liabilities\n$\n28,642\n\n$\n27,777\n\nThe Notes to Consolidated Financial Statements are an integral part of these statements.\nJPMorgan Chase & Co./2025 Form 10-K\n167\nJPMorgan Chase & Co.\nConsolidated statements of changes in stockholders\u2019 equity\nYear ended December 31, (in millions, except per share data)\n2025\n2024\n2023\nPreferred stock\nBalance at January 1\n$\n20,050\n\n$\n27,404\n\n$\n27,404\n\nIssuance\n2,995\n\n2,496\n\n\u2014\n\nRedemption\n(\n3,000\n)\n(\n9,850\n)\n\u2014\n\nBalance at December 31\n20,045\n\n20,050\n\n27,404\n\nCommon stock\nBalance at January 1 and December 31\n4,105\n\n4,105\n\n4,105\n\nAdditional paid-in capital\nBalance at January 1\n90,911\n\n90,128\n\n89,044\n\nShares issued and commitments to issue common stock for employee share-based compensation awards, and related tax effects\n220\n\n768\n\n1,084\n\nOther\n(\n17\n)\n15\n\n\u2014\n\nBalance at December 31\n91,114\n\n90,911\n\n90,128\n\nRetained earnings\nBalance at January 1\n376,166\n\n332,901\n\n296,456\n\nCumulative effect of change in accounting principles\n\u2014\n\n(\n161\n)\n449\n\nNet income\n57,048\n\n58,471\n\n49,552\n\nPreferred stock dividends\n(\n1,099\n)\n(\n1,259\n)\n(\n1,501\n)\nCommon stock dividends (\n$\n5.80\n, $\n4.80\n and $\n4.10\n per share for 2025, 2024 and 2023, respectively)\n(\n16,060\n)\n(\n13,786\n)\n(\n12,055\n)\nBalance at December 31\n416,055\n\n376,166\n\n332,901\n\nAccumulated other comprehensive income/(loss)\nBalance at January 1\n(\n12,456\n)\n(\n10,443\n)\n(\n17,341\n)\nOther comprehensive income/(loss), after-tax\n8,166\n\n(\n2,013\n)\n6,898\n\nBalance at December 31\n(\n4,290\n)\n(\n12,456\n)\n(\n10,443\n)\nTreasury stock, at cost\nBalance at January 1\n(\n134,018\n)\n(\n116,217\n)\n(\n107,336\n)\nRepurchase\n(\n31,924\n)\n(\n19,007\n)\n(\n9,980\n)\nReissuance\n1,351\n\n1,206\n\n1,099\n\nBalance at December 31\n(\n164,591\n)\n(\n134,018\n)\n(\n116,217\n)\nTotal stockholders\u2019 equity\n$\n362,438\n\n$\n344,758\n\n$\n327,878\n\nEffective January 1, 2024, the Firm adopted the Equity Method and Joint Ventures: Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method accounting guidance. Effective January 1, 2023, the Firm adopted the Financial Instruments \u2013 Credit Losses: Troubled Debt Restructurings, and Derivatives and Hedging: Fair Value Hedging \u2013 Portfolio Layer Method accounting guidance. Refer to Note 1 for further information.\nThe Notes to Consolidated Financial Statements are an integral part of these statements.\n168\nJPMorgan Chase & Co./2025 Form 10-K\nJPMorgan Chase & Co.\nConsolidated statements of cash flows\nYear ended December 31, (in millions)\n2025\n2024\n2023\nOperating activities\nNet income\n$\n57,048\n\n$\n58,471\n\n$\n49,552\n\nAdjustments to reconcile net income to net cash provided by operating activities:\nProvision for credit losses\n14,212\n\n10,678\n\n9,320\n\nDepreciation and amortization\n8,821\n\n7,938\n\n7,512\n\nDeferred tax (benefit)/expense\n5,611\n\n2,004\n\n(\n4,534\n)\nEstimated bargain purchase gain associated with the First Republic acquisition\n\u2014\n\n(\n103\n)\n(\n2,775\n)\nInitial gain on the Visa share exchange\n\u2014\n\n(\n7,990\n)\n\u2014\n\nOther\n1,309\n\n1,985\n\n4,301\n\nOriginations and purchases of loans held-for-sale\n(\n260,772\n)\n(\n212,238\n)\n(\n115,245\n)\nProceeds from sales, securitizations and paydowns of loans held-for-sale\n235,232\n\n205,303\n\n116,430\n\nNet change in:\nTrading assets\n(\n156,461\n)\n(\n95,729\n)\n(\n74,091\n)\nSecurities borrowed\n(\n66,648\n)\n(\n18,762\n)\n(\n14,902\n)\nAccrued interest and accounts receivable\n(\n11,514\n)\n5,735\n\n19,928\n\nOther assets\n(\n12,582\n)\n(\n7,650\n)\n32,970\n\nTrading liabilities\n23,134\n\n2,276\n\n5,315\n\nAccounts payable and other liabilities\n5,270\n\n(\n90\n)\n(\n25,388\n)\nOther operating adjustments\n9,558\n\n6,160\n\n4,581\n\nNet cash (used in)/provided by operating activities\n(\n147,782\n)\n(\n42,012\n)\n12,974\n\nInvesting activities\nNet change in:\nFederal funds sold and securities purchased under resale agreements\n(\n41,264\n)\n(\n18,706\n)\n39,740\n\nHeld-to-maturity securities:\nProceeds from paydowns and maturities\n54,791\n\n99,363\n\n53,056\n\nPurchases\n(\n5,432\n)\n(\n4,709\n)\n(\n4,141\n)\nAvailable-for-sale securities:\nProceeds from paydowns and maturities\n37,414\n\n38,499\n\n53,744\n\nProceeds from sales\n141,295\n\n104,625\n\n108,434\n\nPurchases\n(\n308,772\n)\n(\n352,712\n)\n(\n115,499\n)\nProceeds from sales and securitizations of loans held-for-investment\n57,565\n\n57,921\n\n47,312\n\nOther changes in loans, net\n(\n188,497\n)\n(\n83,176\n)\n(\n88,343\n)\nNet cash used in First Republic Acquisition\n\u2014\n\n(\n2,362\n)\n(\n9,920\n)\nAll other investing activities, net\n(\n12,665\n)\n(\n2,146\n)\n(\n16,740\n)\nNet cash (used in)/provided by investing activities\n(\n265,565\n)\n(\n163,403\n)\n67,643\n\nFinancing activities\nNet change in:\nDeposits\n153,168\n\n3,299\n\n(\n32,196\n)\nFederal funds purchased and securities loaned or sold under repurchase agreements\n145,535\n\n80,288\n\n13,801\n\nShort-term borrowings\n9,422\n\n7,439\n\n(\n1,934\n)\nBeneficial interests issued by consolidated VIEs\n(\n622\n)\n1,543\n\n9,029\n\nProceeds from long-term borrowings\n120,761\n\n109,915\n\n75,417\n\nPayments of long-term borrowings\n(\n108,100\n)\n(\n96,605\n)\n(\n64,880\n)\nProceeds from issuance of preferred stock\n3,000\n\n2,500\n\n\u2014\n\nRedemption of preferred stock\n(\n3,000\n)\n(\n9,850\n)\n\u2014\n\nTreasury stock repurchased\n(\n31,591\n)\n(\n18,830\n)\n(\n9,824\n)\nDividends paid\n(\n16,625\n)\n(\n14,783\n)\n(\n13,463\n)\nAll other financing activities, net\n(\n2,415\n)\n(\n1,469\n)\n(\n1,521\n)\nNet cash provided by/(used in) financing activities\n269,533\n\n63,447\n\n(\n25,571\n)\nEffect of exchange rate changes on cash and due from banks and deposits with banks\n17,835\n\n(\n12,866\n)\n1,871\n\nNet increase/(decrease) in cash and due from banks and deposits with banks\n(\n125,979\n)\n(\n154,834\n)\n56,917\n\nCash and due from banks and deposits with banks at the beginning of the period\n469,317\n\n624,151\n\n567,234\n\nCash and due from banks and deposits with banks at the end of the period\n$\n343,338\n\n$\n469,317\n\n$\n624,151\n\nCash interest paid\n$\n96,436\n\n$\n99,642\n\n$\n77,114\n\nCash income taxes paid, net\n5,309\n\n11,715\n\n9,908\n\nThe Notes to Consolidated Financial Statements are an integral part of these statements.\nJPMorgan Chase & Co./2025 Form 10-K\n169\nNotes to consolidated financial statements\nNote 1 \u2013\nBasis of presentation\nJPMorgan Chase & Co. (\u201cJPMorganChase\u201d or the \u201cFirm\u201d), a financial holding company incorporated under Delaware law in 1968, is a leading financial services firm based in the U.S., with operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Refer to Note 32 for further discussion of the Firm's reportable business segments.\nThe accounting and financial reporting policies of JPMorganChase and its subsidiaries conform to U.S. GAAP. Additionally, where applicable, the policies conform to the accounting and reporting guidelines prescribed by regulatory authorities.\nConsolidation\nThe Consolidated Financial Statements include the accounts of JPMorganChase and other entities in which the Firm has a controlling financial interest. All material intercompany balances and transactions have been eliminated.\nAssets held for clients in an agency or fiduciary capacity by the Firm are not assets of JPMorganChase and are not included on the Consolidated balance sheets.\nThe Firm determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity.\nVoting interest entities\nVoting interest entities are entities that have sufficient equity and provide the equity investors voting rights that enable them to make significant decisions relating to the entity\u2019s operations. For these types of entities, the Firm\u2019s determination of whether it has a controlling interest is primarily based on the amount of voting equity interests held. Entities in which the Firm has a controlling financial interest, through ownership of the majority of the entities\u2019 voting equity interests, or through other contractual rights that give the Firm control, are consolidated by the Firm.\nInvestments in companies in which the Firm has significant influence over operating and financing decisions (but does not own a majority of the voting equity interests) are accounted for (i)\u00a0in accordance with the equity method of accounting, or (ii)\u00a0at fair value if the fair value option was elected. These investments are generally included in other assets, with income or loss included in noninterest revenue.\nCertain Firm-sponsored asset management funds are structured as limited partnerships or limited liability companies. For many of these entities, the Firm is the general partner or managing member, but the non-\naffiliated partners or members have the ability to remove the Firm as the general partner or managing member without cause (i.e., kick-out rights), based on a simple majority vote, or the non-affiliated partners or members have rights to participate in important decisions. Accordingly, the Firm does not consolidate these voting interest entities. However, in the limited cases where the non-managing partners or members do not have substantive kick-out or participating rights, the Firm evaluates the funds as VIEs and consolidates the funds if the Firm is the general partner or managing member and has both power and a potentially significant interest.\nThe Firm\u2019s investment companies and asset management funds have investments in both publicly-held and privately-held entities, including investments in buyouts, growth equity and venture opportunities. These investments are accounted for under investment company guidelines and, accordingly, irrespective of the percentage of equity ownership interests held, are carried on the Consolidated balance sheets at fair value, and are recorded in other assets, with income or loss included in noninterest revenue. If consolidated, the Firm retains the accounting under such specialized investment company guidelines.\nVariable interest entities\nVIEs are entities that, by design, either (1)\u00a0lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) have equity investors that do not have the ability to make significant decisions relating to the entity\u2019s operations through voting rights, or do not have the obligation to absorb the expected losses, or do not have the right to receive the residual returns of the entity.\nThe most common type of VIE is an SPE. SPEs are commonly used in securitization transactions in order to isolate certain assets and distribute the cash flows from those assets to investors. The basic SPE structure involves a company selling assets to the SPE; the SPE funds the purchase of those assets by issuing securities to investors. The legal documents that govern the transaction specify how the cash earned on the assets must be allocated to the SPE\u2019s investors and other parties that have rights to those cash flows. SPEs are generally structured to insulate investors from claims on the SPE\u2019s assets by creditors of other entities, including the creditors of the seller of the assets.\nThe primary beneficiary of a VIE (i.e., the party that has a controlling financial interest) is required to consolidate the assets and liabilities of the VIE. The primary beneficiary is the party that has both (1) the power to direct the activities of the VIE that most\n170\nJPMorgan Chase & Co./2025 Form 10-K\nsignificantly impact the VIE\u2019s economic performance; and (2) through its interests in the VIE, the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.\nTo assess whether the Firm has the power to direct the activities of a VIE that most significantly impact the VIE\u2019s economic performance, the Firm considers all the facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes, first, identifying the activities that most significantly impact the VIE\u2019s economic performance; and second, identifying which party, if any, has power over those activities. In general, the parties that make the most significant decisions affecting the VIE (such as asset managers, collateral managers, servicers, or owners of call options or liquidation rights over the VIE\u2019s assets) or have the right to unilaterally remove those decision-makers are deemed to have the power to direct the activities of a VIE.\nTo assess whether the Firm has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Firm considers all of its economic interests, including debt and equity investments, servicing fees, and derivatives or other arrangements deemed to be variable interests in the VIE. This assessment requires that the Firm apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. Factors considered in assessing significance include: the design of the VIE, including its capitalization structure; subordination of interests; payment priority; relative share of interests held across various classes within the VIE\u2019s capital structure; and the reasons why the interests are held by the Firm.\nThe Firm performs on-going reassessments of: (1) whether entities previously evaluated under the majority voting-interest framework have become VIEs, based on certain events, and are therefore subject to the VIE consolidation framework; and (2)\u00a0whether changes in the facts and circumstances regarding the Firm\u2019s involvement with a VIE cause the Firm\u2019s consolidation conclusion to change.\nRefer to Note 14 for further discussion of Firm-sponsored VIEs.\nRevenue recognition\nInterest income\nThe Firm recognizes interest income on loans, debt securities, and other debt instruments, generally on a level-yield basis, based on the underlying contractual rate. Refer to Note 7 for further information.\nRevenue from contracts with customers\nJPMorganChase recognizes noninterest revenue from certain contracts with customers\n,\n in investment banking fees, deposit-related fees, asset management\nfees, commissions and other fees, and components of card income, when the Firm\u2019s related performance obligations are satisfied. Refer to Note 6 for further discussion of the Firm\u2019s revenue from contracts with customers.\nPrincipal transactions revenue\nJPMorganChase carries a portion of its assets and liabilities at fair value. Changes in fair value are reported primarily in principal transactions revenue. Refer to Notes 2 and 3 for further discussion of fair value measurement. Refer to Note 6 for further discussion of principal transactions revenue.\n\nUse of estimates in the preparation of consolidated financial statements\nThe preparation of the Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expense, and disclosures of contingent assets and liabilities. Actual results could be different from these estimates.\nForeign currency translation\nJPMorganChase revalues assets, liabilities, revenue and expense denominated in non-U.S. currencies into U.S. dollars using applicable exchange rates.\nGains and losses relating to translating functional currency financial statements for U.S. reporting are included in the Consolidated statements of comprehensive income. Gains and losses relating to nonfunctional currency transactions, including non-U.S. operations where the functional currency is the U.S. dollar, are reported in the Consolidated statements of income.\nOffsetting assets and liabilities\nU.S. GAAP permits entities to present derivative receivables and derivative payables with the same counterparty and the related cash collateral receivables and payables on a net basis on the Consolidated balance sheets when a legally enforceable master netting agreement exists. U.S. GAAP also permits securities sold and purchased under repurchase agreements and securities borrowed or loaned under securities loan agreements to be presented net when specified conditions are met, including the existence of a legally enforceable master netting agreement. The Firm has elected to net such balances where it has determined that the specified conditions are met.\nThe Firm uses master netting agreements to mitigate counterparty credit risk in certain transactions, including derivative contracts, resale, repurchase, securities borrowed and securities loaned agreements. A master netting agreement is a single agreement with a counterparty that permits multiple transactions governed by that agreement to be terminated or accelerated and settled through a single\nJPMorgan Chase & Co./2025 Form 10-K\n171\nNotes to consolidated financial statements\npayment in a single currency in the event of a default (e.g., bankruptcy, failure to make a required payment or securities transfer or deliver collateral or margin when due). Upon the exercise of derivatives termination rights by the non-defaulting party (i) all transactions are terminated, (ii) all transactions are valued and the positive values of \u201cin the money\u201d transactions are netted against the negative values of \u201cout of the money\u201d transactions and (iii) the only remaining payment obligation is of one of the parties to pay the netted termination amount. Upon exercise of default rights under repurchase agreements and securities loan agreements in general (i) all transactions are terminated and accelerated, (ii) all values of securities or cash held or to be delivered are calculated, and all such sums are netted against each other and (iii) the only remaining payment obligation is of one of the parties to pay the netted termination amount.\nTypical master netting agreements for these types of transactions also often contain a collateral/margin agreement that provides for a security interest in, or title transfer of, securities or cash collateral/margin to the party that has the right to demand margin (the \u201cdemanding party\u201d). The collateral/margin agreement typically requires a party to transfer collateral/margin to the demanding party with a value equal to the amount of the margin deficit on a net basis across all transactions governed by the master netting agreement, less any threshold. The collateral/margin agreement grants to the demanding party, upon default by the counterparty, the right to set-off any amounts payable by the counterparty against any posted collateral or the cash equivalent of any posted collateral/margin. It also grants to the demanding party the right to liquidate collateral/margin and to apply the proceeds to an amount payable by the counterparty.\nRefer to Note 5 for further discussion of the Firm\u2019s derivative instruments. Refer to Note 11 for further discussion of the Firm\u2019s securities financing agreements.\nStatements of cash flows\nFor JPMorganChase\u2019s Consolidated statements of cash flows, cash is defined as those amounts included in cash and due from banks and deposits with banks on the Consolidated balance sheets.\nAccounting standard adopted January 1, 2024\nEquity Method and Joint Ventures: Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method\nThe guidance expanded the types of tax-oriented investments, beyond affordable housing tax credit investments, that the Firm can elect on a program by program basis, to be accounted for using the proportional amortization method.\nThe adoption of this guidance under the modified retrospective method on January 1, 2024 resulted in a change to the classification and timing of the amortization associated with certain of the Firm's alternative energy tax-oriented investments. As a result of the adoption, the amortization of these investments that was previously recognized in other income became recognized in income tax expense. The change in accounting resulted in a decrease to retained earnings of $\n161\n million and increased the Firm\u2019s income tax expense and the effective tax rate by approximately $\n450\n million and\ntwo\n percentage points, respectively, in the first quarter of 2024, with no material impact to net income.\nRefer to Notes 6, 14 and 25 for additional information.\nAccounting standards adopted January 1, 2023\nDerivatives and Hedging: Fair Value Hedging \u2013 Portfolio Layer Method\nThe adoption of this guidance expanded the ability to hedge a portfolio of fixed-rate assets in a qualifying hedge accounting relationship. As permitted by the guidance, the Firm elected to transfer HTM securities to AFS and designated those securities in a portfolio layer method hedge upon adoption. The adoption impact of the transfer on retained earnings was not material.\nFinancial Instruments \u2013 Credit Losses: Troubled Debt Restructurings (\u201cTDRs\u201d)\nThe adoption of this guidance eliminated the requirement to measure the allowance for TDRs using a discounted cash flow (\u201cDCF\u201d) methodology and allowed the option of a non-DCF portfolio-based approach for modified loans to troubled borrowers. The Firm elected this option for all portfolios of modified loans to troubled borrowers except collateral-dependent loans and nonaccrual risk-rated loans, for which the Firm elected to continue applying a DCF methodology. The adoption of this guidance under the modified retrospective method on January 1, 2023, resulted in a $\n446\n\u00a0million increase to retained earnings.\n172\nJPMorgan Chase & Co./2025 Form 10-K\nSignificant accounting policies\nThe following table identifies JPMorganChase\u2019s other significant accounting policies and the Note and page where a detailed description of each policy can be found.\nFair value measurement\nNote 2\npage 174\nFair value option\nNote 3\npage 196\nDerivative instruments\nNote 5\npage 202\nNoninterest revenue and noninterest expense\nNote 6\npage 218\nInterest income and interest expense\nNote 7\npage 222\nPension and other postretirement employee benefit plans\nNote 8\npage 223\nEmployee share-based incentives\nNote 9\npage 226\nInvestment securities\nNote 10\npage 228\nSecurities financing activities\nNote 11\npage 233\nLoans\nNote 12\npage 236\nAllowance for credit losses\nNote 13\npage 258\nVariable interest entities\nNote 14\npage 263\nGoodwill, mortgage servicing rights, and other intangible assets\nNote 15\npage 272\nPremises and equipment\nNote 16\npage 277\nLeases\nNote 18\npage 278\nAccounts payable and other liabilities\nNote 19\npage 280\nLong-term debt\nNote 20\npage 281\nEarnings per share\nNote 23\npage 286\nIncome taxes\nNote 25\npage 288\nOff\u2013balance sheet lending-related financial instruments, guarantees, and other commitments\nNote 28\npage 295\nLitigation\nNote 30\npage 302\nJPMorgan Chase & Co./2025 Form 10-K\n173\nNotes to consolidated financial statements\nNote 2 \u2013\nFair value measurement\nJPMorganChase carries a portion of its assets and liabilities at fair value. These assets and liabilities are predominantly carried at fair value on a recurring basis (i.e., assets and liabilities that are measured and reported at fair value on the Firm\u2019s Consolidated balance sheets). Certain assets, liabilities and unfunded lending-related commitments are measured at fair value on a nonrecurring basis; that is, they are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment).\nFair value is defined 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. Fair value is based on quoted market prices or inputs, where available. If prices or quotes are not available, fair value is based on valuation models and other valuation techniques that consider relevant transaction characteristics (such as maturity) and use, as inputs, observable or unobservable market parameters, including yield curves, interest rates, volatilities, prices (such as commodity, equity or debt prices), correlations, foreign exchange rates and credit curves. Fair value may also incorporate valuation adjustments.\nThe level of precision in estimating unobservable market inputs or other factors can affect the amount of gain or loss recorded for a particular position. Furthermore, while the Firm believes its valuation methods are appropriate and consistent with those of other market participants, the methods and assumptions used reflect management judgment and may vary across the Firm\u2019s businesses and portfolios.\nThe Firm uses various methodologies and assumptions in the determination of fair value. The use of different methodologies or assumptions by other market participants compared with those used by the Firm could result in the Firm deriving a different estimate of fair value at the reporting date.\nValuation process\nRisk-taking functions are responsible for providing fair value estimates for assets and liabilities carried on the Consolidated balance sheets at fair value. The Firm\u2019s Valuation Control Group (\u201cVCG\u201d), which is part of the Firm\u2019s Finance function and independent of the risk-taking functions, is responsible for verifying these estimates and determining any fair value adjustments that may be required to ensure that the Firm\u2019s positions are recorded at fair value. In addition, the Firm\u2019s Valuation Governance Forum (\u201cVGF\u201d), which is composed of senior finance and risk executives, is responsible for overseeing the management of risks arising from valuation activities conducted across the Firm. The Firmwide VGF is chaired by the Firmwide\nhead of the VCG (under the direction of the Firm\u2019s Controller), and includes sub-forums covering the CIB, CCB, AWM and certain corporate functions including Treasury and CIO.\nPrice verification process\nThe VCG verifies fair value estimates provided by the risk-taking functions by leveraging independently derived prices, valuation inputs and other market data, where available. Where independent prices or inputs are not available, the VCG performs additional review to ensure the reasonableness of the estimates. The additional review may include evaluating the limited market activity including client unwinds, benchmarking valuation inputs to those used for similar instruments, decomposing the valuation of structured instruments into individual components, comparing expected to actual cash flows, reviewing profit and loss trends, and reviewing trends in collateral valuation. There are also additional levels of management review for more significant or complex positions.\nThe VCG determines any valuation adjustments that may be required to the estimates provided by the risk-taking functions. No adjustments to quoted prices are applied for instruments classified within level 1 of the fair value hierarchy (refer to the discussion of the fair value hierarchy on\npage 175\n for further information). For other positions, judgment is required to assess the need for valuation adjustments to appropriately reflect liquidity considerations, unobservable parameters, and, for certain portfolios that meet specified criteria, the size of the net open risk position. The determination of such adjustments follows a consistent framework across the Firm:\n\u2022\nLiquidity valuation adjustments are considered where an observable external price or valuation parameter exists but is of lower reliability, potentially due to lower market activity. Liquidity valuation adjustments are made based on current market conditions. Factors that may be considered in determining the liquidity adjustment include analysis of: (1) the estimated bid-offer spread for the instrument being traded; (2) alternative pricing points for similar instruments in active markets; and (3) the range of reasonable values that the price or parameter could take.\n\u2022\nThe Firm manages certain portfolios of financial instruments on the basis of net open risk exposure and, as permitted by U.S. GAAP, has elected to estimate the fair value of such portfolios on the basis of a transfer of the entire net open risk position in an orderly transaction. Where this is the case, valuation adjustments may be necessary to reflect the cost of exiting a larger-than-normal market-size net open risk position. Where applied, such adjustments are based on factors that a relevant market participant\n174\nJPMorgan Chase & Co./2025 Form 10-K\nwould consider in the transfer of the net open risk position, including the size of the adverse market move that is likely to occur during the period required to sufficiently reduce the net open risk position.\n\u2022\nUncertainty adjustments related to unobservable parameters may be made when positions are valued using prices or input parameters to valuation models that are unobservable due to a lack of market activity or because they cannot be implied from observable market data. Such prices or parameters must be estimated and are, therefore, subject to management judgment. Adjustments are made to reflect the uncertainty inherent in the resulting valuation estimate.\n\u2022\nWhere appropriate, the Firm also applies adjustments to its estimates of fair value in order to appropriately reflect counterparty credit quality (CVA), the Firm\u2019s own creditworthiness (DVA) and the impact of funding (FVA), using a consistent framework across the Firm. Refer to Credit and funding adjustments on page 191 of this Note for more information on such adjustments.\nValuation model review and approval\nIf prices or quotes are not available for an instrument or a similar instrument, fair value is generally determined using valuation models that consider relevant transaction terms such as maturity and use as inputs market-based or independently sourced parameters. Where this is the case the price verification process described above is applied to the inputs in those models.\nUnder the Firm\u2019s Estimations and Model Risk Management Policy, MRGR reviews and approves new models, as well as material changes to existing models, prior to implementation in the operating environment. In certain circumstances exceptions may be granted to the Firm\u2019s policy to allow a model to be used prior to review or approval. MRGR may also require the user to take appropriate actions to mitigate the model risk if it is to be used in the interim. These actions will depend on the model and may include, for example, limitation of trading activity.\nFair value hierarchy\nA three-level fair value hierarchy has been established under U.S. GAAP for disclosure of fair value measurements. The fair value hierarchy is based on the observability of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows.\n\u2022\nLevel 1 \u2013 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.\n\u2022\nLevel 2 \u2013 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.\n\u2022\nLevel 3 \u2013 one or more inputs to the valuation methodology are unobservable and significant to the fair value measurement.\nA financial instrument\u2019s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.\nJPMorgan Chase & Co./2025 Form 10-K\n175\nNotes to consolidated financial statements\nThe following table describes the valuation methodologies generally used by the Firm to measure its significant products/instruments at fair value, including the general classification of such instruments pursuant to the fair value hierarchy.\nProduct/instrument\nValuation methodology\nClassifications in the fair value  hierarchy\nSecurities financing agreements\nValuations are based on discounted cash flows, which consider:\nPredominantly level 2\n\u2022  Derivative features: refer to the discussion of derivatives below for further information\n\u2022  Market rates for the respective maturity\n\u2022  Collateral characteristics\nLoans and lending-related commitments \u2014 wholesale\nLoans carried at fair value\n(trading loans and non-trading loans) and associated\nlending-related commitments\nWhere observable market data is available, valuations are based on:\nLevel 2 or 3\n\u2022  Observed market prices (circumstances are infrequent)\n\u2022  Relevant broker quotes\n\u2022  Observed market prices for similar instruments\nWhere observable market data is unavailable or limited, valuations are based on discounted cash flows, which consider the following:\n\u2022  Credit spreads derived from the cost of CDS; or benchmark credit curves developed by the Firm, by industry and credit rating\n\u2022  Prepayment speed\n\u2022  Collateral characteristics\nLoans \u2014 consumer\nFair value is based on observable market prices for mortgage-backed securities with similar collateral and incorporates adjustments to these prices to account for differences between the securities and the value of the underlying loans, which include credit characteristics, portfolio composition, and liquidity.\nPredominantly level 2\nLoans carried at fair value \u2014 residential mortgage loans expected to be sold\nInvestment and trading securities\nQuoted market prices\nLevel 1\nIn the absence of quoted market prices, securities are valued based on:\nLevel 2 or 3\n\u2022  Observable market prices for similar securities\n\u2022  Relevant broker quotes\n\u2022  Discounted cash flows\nIn addition, the following inputs to discounted cash flows are used for the following products:\nMortgage- and asset-backed securities specific inputs:\n\u2022  Collateral characteristics\n\u2022  Deal-specific payment and loss allocations\n\u2022  Current market assumptions related to yield, prepayment speed, conditional default rates and loss severity\nCollateralized loan obligations (\u201cCLOs\u201d) specific inputs:\n\u2022  Collateral characteristics\n\u2022  Deal-specific payment and loss allocations\n\u2022  Expected prepayment speed, conditional default rates, loss severity\n\u2022  Credit spreads\n\u2022  Credit rating data\nPhysical commodities\nValued using observable market prices or data.\nPredominantly Level 1 or 2\n176\nJPMorgan Chase & Co./2025 Form 10-K\nProduct/instrument\nValuation methodology\nClassifications in the fair value hierarchy\nDerivatives\nActively traded derivatives, e.g., exchange-traded derivatives, that are valued using quoted prices.\nLevel 1\nDerivatives that are valued using models such as the Black-Scholes option pricing model, simulation models, or a combination of models that may use observable or unobservable valuation inputs as well as considering the contractual terms.\nThe key valuation inputs used will depend on the type of derivative and the nature of the underlying instruments and may include equity prices, commodity prices, foreign exchange rates, volatilities, correlations, CDS spreads, recovery rates and prepayment speed.\nLevel 2 or 3\nIn addition, specific inputs used for derivatives that are valued based on models with significant unobservable inputs are as follows:\nInterest rate (IR) and FX exotic derivatives specific inputs include:\n\u2022  Interest rate curve\n\u2022  Interest rate volatility\n\u2022  Interest rate spread volatility\n\u2022  Bermudan switch value\n\u2022  Interest rate correlation\n\u2022  Interest rate-FX correlation\n\u2022  Foreign exchange correlation\nCredit derivatives specific inputs include:\n\u2022  Credit correlation between the underlying debt instruments\nEquity derivatives specific inputs include:\n\u2022  Forward equity price\n\u2022  Equity volatility\n\u2022  Equity correlation\n\u2022  Equity-FX correlation\n\u2022  Equity-IR correlation\nCommodity derivatives specific inputs include:\n\u2022  Forward commodity price\n\u2022  Commodity volatility\n\u2022  Commodity correlation\nAdditionally, adjustments are made to reflect counterparty credit quality (CVA) and the impact of funding (FVA). Refer to page 191 of this Note.\nMortgage servicing rights\nRefer to Mortgage servicing rights in Note 15.\nLevel 3\nPrivate equity direct investments\nFair value is estimated using all available information; the range of potential inputs include:\nLevel 2 or 3\n\u2022  Transaction prices\n\u2022  Trading multiples of comparable public companies\n\u2022  Operating performance of the underlying portfolio company\n\u2022  Adjustments as required, since comparable public companies are not identical to the company being valued, and for company-specific issues including lack of liquidity\n\u2022  Additional available inputs relevant to the investment\nJPMorgan Chase & Co./2025 Form 10-K\n177\nNotes to consolidated financial statements\nProduct/instrument\nValuation methodology\nClassification in the fair value hierarchy\nFund investments (e.g., mutual/collective investment funds, private equity funds, hedge funds, and real estate funds)\nNet asset value\n\u2022  NAV is supported by the ability to redeem and purchase at the NAV level\nLevel 1\n\u2022  Adjustments to the NAV as required, for restrictions on redemption (e.g., lock-up periods or withdrawal limitations) or where observable activity is limited\nLevel 2 or 3\n(a)\nBeneficial interests issued by consolidated VIEs\nValued using observable market information, where available.\nLevel 2 or 3\nIn the absence of observable market information, valuations are based on the fair value of the underlying assets held by the VIE.\nStructured notes (included in deposits, short-term borrowings and long-term debt)\nValuations are based on discounted cash flow analyses that consider the embedded derivative and the terms and payment structure of the note.\nThe embedded derivative features are considered using models such as the Black-Scholes option pricing model, simulation models, or a combination of models that may use observable or unobservable valuation inputs, depending on the embedded derivative. The specific inputs used vary according to the nature of the embedded derivative features, as described in the discussion above regarding derivatives valuation. Adjustments are then made to this base valuation to reflect the Firm\u2019s own credit risk (DVA). Refer to page 191 of this Note.\nLevel 2 or 3\n(a)\nExcludes certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient.\n178\nJPMorgan Chase & Co./2025 Form 10-K\nThe following table presents the assets and liabilities reported at fair value as of December\u00a031, 2025 and 2024, by major product category and fair value hierarchy.\nAssets and liabilities measured at fair value on a recurring basis\nFair value hierarchy\nDecember 31, 2025 (in millions)\nLevel 1\nLevel 2\nLevel 3\nDerivative netting adjustments\n(f)\nTotal fair value\nFederal funds sold and securities purchased under resale agreements\n$\n\u2014\n\n$\n327,018\n\n$\n\u2014\n\n$\n\u2014\n\n$\n327,018\n\nSecurities borrowed\n\u2014\n\n98,111\n\n\u2014\n\n\u2014\n\n98,111\n\nTrading assets:\nDebt instruments:\nMortgage-backed securities:\nU.S. GSEs and government agencies\n(a)\n\u2014\n\n157,834\n\n307\n\n\u2014\n\n158,141\n\nResidential \u2013 nonagency\n\u2014\n\n2,002\n\n5\n\n\u2014\n\n2,007\n\nCommercial \u2013 nonagency\n\u2014\n\n1,937\n\n\u2014\n\n\u2014\n\n1,937\n\nTotal mortgage-backed securities\n\u2014\n\n161,773\n\n312\n\n\u2014\n\n162,085\n\nU.S. Treasury, GSEs and government agencies\n(a)\n225,255\n\n18,629\n\n\u2014\n\n\u2014\n\n243,884\n\nObligations of U.S. states and municipalities\n\u2014\n\n6,129\n\n1\n\n\u2014\n\n6,130\n\nCertificates of deposit, bankers\u2019 acceptances and commercial paper\n\u2014\n\n1,345\n\n\u2014\n\n\u2014\n\n1,345\n\nNon-U.S. government debt securities\n(b)\n77,385\n\n47,054\n\n245\n\n\u2014\n\n124,684\n\nCorporate debt securities\n\u2014\n\n45,053\n\n454\n\n\u2014\n\n45,507\n\nLoans\n\u2014\n\n11,782\n\n1,143\n\n\u2014\n\n12,925\n\nAsset-backed securities\n\u2014\n\n3,986\n\n27\n\n\u2014\n\n4,013\n\nTotal debt instruments\n302,640\n\n295,751\n\n2,182\n\n\u2014\n\n600,573\n\nEquity securities\n107,585\n\n2,153\n\n138\n\n\u2014\n\n109,876\n\nPhysical commodities\n(c)\n20,880\n\n947\n\n30\n\n\u2014\n\n21,857\n\nOther\n\u2014\n\n12,346\n\n444\n\n\u2014\n\n12,790\n\nTotal debt and equity instruments\n(d)\n431,105\n\n311,197\n\n2,794\n\n\u2014\n\n745,096\n\nDerivative receivables:\nInterest rate\n1,579\n\n276,565\n\n3,740\n\n(\n256,483\n)\n25,401\n\nCredit\n\u2014\n\n12,018\n\n1,006\n\n(\n12,545\n)\n479\n\nForeign exchange\n111\n\n181,318\n\n1,807\n\n(\n163,881\n)\n19,355\n\nEquity\n(b)\n806\n\n95,098\n\n1,819\n\n(\n91,856\n)\n5,867\n\nCommodity\n\u2014\n\n29,961\n\n554\n\n(\n23,840\n)\n6,675\n\nTotal derivative receivables\n2,496\n\n594,960\n\n8,926\n\n(\n548,605\n)\n57,777\n\nTotal trading assets\n(e)\n433,601\n\n906,157\n\n11,720\n\n(\n548,605\n)\n802,873\n\nAvailable-for-sale securities:\nMortgage-backed securities:\nU.S. GSEs and government agencies\n(a)\n1\n\n90,971\n\n\u2014\n\n\u2014\n\n90,972\n\nResidential \u2013 nonagency\n\u2014\n\n5,991\n\n\u2014\n\n\u2014\n\n5,991\n\nCommercial \u2013 nonagency\n\u2014\n\n4,481\n\n3\n\n\u2014\n\n4,484\n\nTotal mortgage-backed securities\n1\n\n101,443\n\n3\n\n\u2014\n\n101,447\n\nU.S. Treasury and government agencies\n315,361\n\n461\n\n\u2014\n\n\u2014\n\n315,822\n\nObligations of U.S. states and municipalities\n\u2014\n\n20,240\n\n\u2014\n\n\u2014\n\n20,240\n\nNon-U.S. government debt securities\n(b)\n34,308\n\n11,347\n\n\u2014\n\n\u2014\n\n45,655\n\nCorporate debt securities\n\u2014\n\n20\n\n108\n\n\u2014\n\n128\n\nAsset-backed securities:\nCollateralized loan obligations\n\u2014\n\n21,947\n\n\u2014\n\n\u2014\n\n21,947\n\nOther\n(a)\n\u2014\n\n1,959\n\n\u2014\n\n\u2014\n\n1,959\n\nTotal available-for-sale securities\n349,670\n\n157,417\n\n111\n\n\u2014\n\n507,198\n\nLoans\n\u2014\n\n67,622\n\n3,062\n\n\u2014\n\n70,684\n\nMortgage servicing rights\n\u2014\n\n\u2014\n\n9,167\n\n\u2014\n\n9,167\n\nOther assets\n(e)\n6,864\n\n6,890\n\n1,047\n\n\u2014\n\n14,801\n\nTotal assets measured at fair value on a recurring basis\n$\n790,135\n\n$\n1,563,215\n\n$\n25,107\n\n$\n(\n548,605\n)\n$\n1,829,852\n\nDeposits\n$\n\u2014\n\n$\n18,574\n\n$\n2,356\n\n$\n\u2014\n\n$\n20,930\n\nFederal funds purchased and securities loaned or sold under repurchase agreements\n\u2014\n\n360,194\n\n\u2014\n\n\u2014\n\n360,194\n\nShort-term borrowings\n\u2014\n\n26,902\n\n5,558\n\n\u2014\n\n32,460\n\nTrading liabilities:\nDebt and equity instruments\n(d)\n135,366\n\n33,998\n\n326\n\n\u2014\n\n169,690\n\nDerivative payables:\nInterest rate\n2,071\n\n253,078\n\n2,434\n\n(\n250,122\n)\n7,461\n\nCredit\n\u2014\n\n15,487\n\n2,141\n\n(\n15,612\n)\n2,016\n\nForeign exchange\n118\n\n176,521\n\n1,502\n\n(\n163,308\n)\n14,833\n\nEquity\n(b)\n1,210\n\n110,451\n\n5,356\n\n(\n102,211\n)\n14,806\n\nCommodity\n\u2014\n\n25,799\n\n570\n\n(\n19,156\n)\n7,213\n\nTotal derivative payables\n3,399\n\n581,336\n\n12,003\n\n(\n550,409\n)\n46,329\n\nTotal trading liabilities\n138,765\n\n615,334\n\n12,329\n\n(\n550,409\n)\n216,019\n\nAccounts payable and other liabilities\n3,967\n\n2,655\n\n38\n\n\u2014\n\n6,660\n\nBeneficial interests issued by consolidated VIEs\n\u2014\n\n5\n\n\u2014\n\n\u2014\n\n5\n\nLong-term debt\n\u2014\n\n87,886\n\n46,673\n\n\u2014\n\n134,559\n\nTotal liabilities measured at fair value on a recurring basis\n$\n142,732\n\n$\n1,111,550\n\n$\n66,954\n\n$\n(\n550,409\n)\n$\n770,827\n\nJPMorgan Chase & Co./2025 Form 10-K\n179\nNotes to consolidated financial statements\nFair value hierarchy\nDecember 31, 2024 (in millions)\nLevel 1\nLevel 2\nLevel 3\nDerivative netting adjustments\n(f)\nTotal fair value\nFederal funds sold and securities purchased under resale agreements\n$\n\u2014\n\n$\n286,771\n\n$\n\u2014\n\n$\n\u2014\n$\n286,771\n\nSecurities borrowed\n\u2014\n\n83,962\n\n\u2014\n\n\u2014\n83,962\n\nTrading assets:\nDebt instruments:\nMortgage-backed securities:\nU.S. GSEs and government agencies\n(a)\n\u2014\n\n104,312\n\n488\n\n\u2014\n104,800\n\nResidential \u2013 nonagency\n\u2014\n\n2,282\n\n5\n\n\u2014\n2,287\n\nCommercial \u2013 nonagency\n\u2014\n\n1,283\n\n10\n\n\u2014\n1,293\n\nTotal mortgage-backed securities\n\u2014\n\n107,877\n\n503\n\n\u2014\n108,380\n\nU.S. Treasury, GSEs and government agencies\n(a)\n150,580\n\n11,702\n\n\u2014\n\n\u2014\n162,282\n\nObligations of U.S. states and municipalities\n\u2014\n\n6,100\n\n1\n\n\u2014\n6,101\n\nCertificates of deposit, bankers\u2019 acceptances and commercial paper\n\u2014\n\n3,950\n\n\u2014\n\n\u2014\n3,950\n\nNon-U.S. government debt securities\n34,108\n\n54,335\n\n152\n\n\u2014\n88,595\n\nCorporate debt securities\n\u2014\n\n33,591\n\n390\n\n\u2014\n33,981\n\nLoans\n\u2014\n\n10,228\n\n1,088\n\n\u2014\n11,316\n\nAsset-backed securities\n\u2014\n\n2,813\n\n10\n\n\u2014\n2,823\n\nTotal debt instruments\n184,688\n\n230,596\n\n2,144\n\n\u2014\n417,428\n\nEquity securities\n130,307\n\n1,359\n\n62\n\n\u2014\n131,728\n\nPhysical commodities\n(c)\n5,957\n\n1,533\n\n26\n\n\u2014\n7,516\n\nOther\n\u2014\n\n19,935\n\n210\n\n\u2014\n20,145\n\nTotal debt and equity instruments\n(d)\n320,952\n\n253,423\n\n2,442\n\n\u2014\n576,817\n\nDerivative receivables:\nInterest rate\n4,934\n\n282,019\n\n3,781\n\n(\n265,789\n)\n24,945\n\nCredit\n\u2014\n\n10,379\n\n708\n\n(\n10,273\n)\n814\n\nForeign exchange\n196\n\n261,520\n\n1,204\n\n(\n237,608\n)\n25,312\n\nEquity\n\u2014\n\n82,855\n\n2,365\n\n(\n79,935\n)\n5,285\n\nCommodity\n\u2014\n\n15,232\n\n394\n\n(\n11,015\n)\n4,611\n\nTotal derivative receivables\n5,130\n\n652,005\n\n8,452\n\n(\n604,620\n)\n60,967\n\nTotal trading assets\n(e)\n326,082\n\n905,428\n\n10,894\n\n(\n604,620\n)\n637,784\n\nAvailable-for-sale securities:\nMortgage-backed securities:\nU.S. GSEs and government agencies\n(a)\n\u2014\n\n91,893\n\n\u2014\n\n\u2014\n91,893\n\nResidential \u2013 nonagency\n\u2014\n\n4,811\n\n\u2014\n\n\u2014\n4,811\n\nCommercial \u2013 nonagency\n\u2014\n\n4,057\n\n8\n\n\u2014\n4,065\n\nTotal mortgage-backed securities\n\u2014\n\n100,761\n\n8\n\n\u2014\n100,769\n\nU.S. Treasury and government agencies\n234,491\n\n288\n\n\u2014\n\n\u2014\n234,779\n\nObligations of U.S. states and municipalities\n\u2014\n\n17,913\n\n\u2014\n\n\u2014\n17,913\n\nNon-U.S. government debt securities\n23,973\n\n12,272\n\n\u2014\n\n\u2014\n36,245\n\nCorporate debt securities\n\u2014\n\n70\n\n\u2014\n\n\u2014\n70\n\nAsset-backed securities:\nCollateralized loan obligations\n\u2014\n\n14,943\n\n\u2014\n\n\u2014\n14,943\n\nOther\n(a)\n\u2014\n\n2,133\n\n\u2014\n\n\u2014\n2,133\n\nTotal available-for-sale securities\n258,464\n\n148,380\n\n8\n\n\u2014\n406,852\n\nLoans\n\u2014\n\n38,934\n\n2,416\n\n\u2014\n41,350\n\nMortgage servicing rights\n\u2014\n\n\u2014\n\n9,121\n\n\u2014\n9,121\n\nOther assets\n(e)\n5,732\n\n6,997\n\n1,344\n\n\u2014\n14,073\n\nTotal assets measured at fair value on a recurring basis\n$\n590,278\n\n$\n1,470,472\n\n$\n23,783\n\n$\n(\n604,620\n)\n$\n1,479,913\n\nDeposits\n$\n\u2014\n\n$\n31,583\n\n$\n2,185\n\n$\n\u2014\n$\n33,768\n\nFederal funds purchased and securities loaned or sold under repurchase agreements\n\u2014\n\n226,329\n\n\u2014\n\n\u2014\n226,329\n\nShort-term borrowings\n\u2014\n\n23,045\n\n3,476\n\n\u2014\n26,521\n\nTrading liabilities:\nDebt and equity instruments\n(d)\n120,719\n\n32,457\n\n46\n\n\u2014\n153,222\n\nDerivative payables:\nInterest rate\n3,981\n\n266,767\n\n3,480\n\n(\n264,989\n)\n9,239\n\nCredit\n\u2014\n\n12,725\n\n1,071\n\n(\n11,898\n)\n1,898\n\nForeign exchange\n187\n\n253,196\n\n1,184\n\n(\n238,970\n)\n15,597\n\nEquity\n\u2014\n\n90,908\n\n5,231\n\n(\n87,491\n)\n8,648\n\nCommodity\n\u2014\n\n14,021\n\n467\n\n(\n10,209\n)\n4,279\n\nTotal derivative payables\n4,168\n\n637,617\n\n11,433\n\n(\n613,557\n)\n39,661\n\nTotal trading liabilities\n124,887\n\n670,074\n\n11,479\n\n(\n613,557\n)\n192,883\n\nAccounts payable and other liabilities\n3,100\n\n2,717\n\n76\n\n\u2014\n5,893\n\nBeneficial interests issued by consolidated VIEs\n\u2014\n\n1\n\n\u2014\n\n\u2014\n1\n\nLong-term debt\n\u2014\n\n66,216\n\n34,564\n\n\u2014\n100,780\n\nTotal liabilities measured at fair value on a recurring basis\n$\n127,987\n\n$\n1,019,965\n\n$\n51,780\n\n$\n(\n613,557\n)\n$\n586,175\n\n(a)\nAt December\u00a031, 2025 and 2024, included total U.S. GSE obligations of $\n158.4\n billion and $\n120.1\n billion, respectively, which were mortgage-related.\n(b)\nIn the fourth quarter of 2025, the Firm refined the active market assessment of certain products and updated the leveling classification accordingly.\n(c)\nPhysical commodities inventories are generally accounted for at the lower of cost or net realizable value. \u201cNet realizable value\u201d is a term defined in U.S. GAAP as not exceeding fair value less costs to sell (\u201ctransaction costs\u201d). Transaction costs for the Firm\u2019s physical commodities inventories are either not applicable or immaterial to the value of the inventory. Therefore, net realizable value approximates fair value for the Firm\u2019s physical commodities inventories. When fair value hedging has been applied (or when net realizable value is below cost), the carrying value of physical commodities approximates fair value, because under fair value hedge accounting, the cost basis is adjusted for changes in fair\n180\nJPMorgan Chase & Co./2025 Form 10-K\nvalue. Refer to Note 5 for a further discussion of the Firm\u2019s hedge accounting relationships. To provide consistent fair value disclosure information, all physical commodities inventories have been included in each period presented.\n(d)\nBalances reflect the reduction of securities owned (long positions) by the amount of identical securities sold but not yet purchased (short positions).\n(e)\nCertain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not required to be classified in the fair value hierarchy. At both December\u00a031, 2025 and 2024, the fair values of these investments, which include certain hedge funds, private equity funds, real estate and other funds, were $\n1.0\n billion, primarily reported in other assets.\n(f)\nAs permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral received and paid when a legally enforceable master netting agreement exists. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.\n181\nJPMorgan Chase & Co./2025 Form 10-K\nNotes to consolidated financial statements\nLevel 3 valuations\nThe Firm has established well-structured processes for determining fair value, including for instruments where fair value is estimated using significant unobservable inputs (level 3). Refer to pages 174\u2013178 of this Note for further information on the Firm\u2019s valuation process and a detailed discussion of the determination of fair value for individual financial instruments.\nEstimating fair value requires the application of judgment. The type and level of judgment required is largely dependent on the amount of observable market information available to the Firm. For instruments valued using internally developed valuation models and other valuation techniques that use significant unobservable inputs and are therefore classified within level 3 of the fair value hierarchy, judgments used to estimate fair value are more significant than those required when estimating the fair value of instruments classified within levels 1 and 2.\nIn arriving at an estimate of fair value for an instrument within level 3, management must first determine the appropriate valuation model or other valuation technique to use. Second, due to the lack of observability of significant inputs, management must assess relevant empirical data in deriving valuation inputs including transaction details, yield curves, interest rates, prepayment speeds, default rates, volatilities, correlations, prices (such as commodity, equity or debt prices), valuations of comparable instruments, foreign exchange rates and credit curves.\nThe following table presents the Firm\u2019s primary level 3 financial instruments, the valuation techniques used to measure the fair value of those financial instruments, the significant unobservable inputs, the range of values for those inputs and the weighted or arithmetic averages of such inputs. While the determination to classify an instrument within level 3 is based on the significance of the unobservable inputs to the overall fair value measurement, level 3 financial instruments typically include observable components (that is, components that are actively quoted and can be validated to external sources) in addition to the unobservable components. The level 1 and/or level 2 inputs are not included in the table. In addition, the Firm manages the risk of the observable components of level 3 financial instruments using securities and derivative positions that are classified within levels 1 or 2 of the fair value hierarchy.\nThe range of values presented in the table is representative of the highest and lowest level input used to value the significant groups of instruments within a product/instrument classification. Where provided, the weighted averages of the input values presented in the table are calculated based on the fair value of the instruments that the input is being used to value.\nIn the Firm\u2019s view, the input range, weighted and arithmetic average values do not reflect the degree of input uncertainty or an assessment of the reasonableness of the Firm\u2019s estimates and assumptions. Rather, they reflect the characteristics of the various instruments held by the Firm and the relative distribution of instruments within the range of characteristics. For example, two option contracts may have similar levels of market risk exposure and valuation uncertainty, but may have significantly different implied volatility levels because the option contracts have different underlyings, tenors, or strike prices. The input range and weighted and arithmetic average values will therefore vary from period-to-period and parameter-to-parameter based on the characteristics of the instruments held by the Firm at each balance sheet date.\n182\nJPMorgan Chase & Co./2025 Form 10-K\nLevel 3 inputs\n(a)\nDecember 31, 2025\nProduct/Instrument\nFair value\n(in millions)\nPrincipal valuation technique\nUnobservable inputs\n(g)\nRange of input values\nAverage\n(i)\nResidential mortgage-backed securities and loans\n(b)\n$\n889\n\nDiscounted cash flows\nYield\n0\n%\n70\n%\n7\n%\nPrepayment speed\n7\n%\n14\n%\n9\n%\nConditional default rate\n0\n%\n2\n%\n0\n%\nLoss severity\n0\n%\n100\n%\n7\n%\nCommercial mortgage-backed securities and loans\n(c)\n1,246\n\nMarket comparables\nPrice\n$\n0\n$\n93\n$\n82\nCorporate debt securities\n562\n\nMarket comparables\nPrice\n$\n0\n$\n177\n$\n105\nLoans\n(d)\n2,385\n\nMarket comparables\nPrice\n$\n0\n$\n102\n$\n80\nNon-U.S. government debt securities\n245\n\nMarket comparables\nPrice\n$\n2\n$\n124\n$\n99\nNet interest rate derivatives\n1,301\n\nOption pricing\nInterest rate volatility\n24\nbps\n490\nbps\n85\nbps\nInterest rate spread volatility\n44\nbps\n59\nbps\n49\nbps\nBermudan switch value\n0\n%\n48\n%\n17\n%\nInterest rate correlation\n(\n64\n)%\n97\n%\n58\n%\nIR-FX correlation\n(\n35\n)%\n60\n%\n5\n%\nInflation volatility\n11\nbps\n174\nbps\n65\nbps\n5\n\nDiscounted cash flows\nPrepayment speed\n0\n%\n21\n%\n7\n%\nInterest rate curve\n2\n%\n16\n%\n4\n%\nNet credit derivatives\n(\n1,174\n)\nDiscounted cash flows\nCredit correlation\n30\n%\n79\n%\n52\n%\nCredit spread\n0\nbps\n6,942\nbps\n367\nbps\nRecovery rate\n10\n%\n90\n%\n53\n%\n39\n\nMarket comparables\nPrice\n$\n0\n$\n115\n$\n77\nNet foreign exchange derivatives\n357\n\nOption pricing\nIR-FX correlation\n(\n50\n)%\n60\n%\n17\n%\n(\n52\n)\nDiscounted cash flows\nPrepayment speed\n11\n%\n11\n%\nInterest rate curve\n3\n%\n20\n%\n12\n%\nNet equity derivatives\n(\n3,537\n)\nOption pricing\nForward equity price\n(h)\n87\n%\n142\n%\n101\n%\nEquity volatility\n4\n%\n130\n%\n32\n%\nEquity correlation\n0\n%\n100\n%\n54\n%\nEquity-FX correlation\n(\n75\n)%\n65\n%\n(\n32\n)%\nEquity-IR correlation\n5\n%\n10\n%\n8\n%\nNet commodity derivatives\n(\n16\n)\nOption pricing\nOil commodity forward\n$\n40\n / BBL\n$\n680\n / BBL\n$\n202\n / BBL\nNatural gas commodity forward\n$(\n1\n) / MMBTU\n$\n8\n / MMBTU\n$\n4\n / MMBTU\nCommodity volatility\n2\n%\n36\n%\n6\n%\nCommodity correlation\n(\n30\n)%\n99\n%\n1\n%\nMSRs\n9,167\n\nDiscounted cash flows\nRefer to Note 15\nLong-term debt, short-term borrowings, and deposits\n(e)\n52,953\n\nOption pricing\nInterest rate volatility\n24\nbps\n490\nbps\n85\nbps\nBermudan switch value\n0\n%\n48\n%\n17\n%\nInterest rate correlation\n(\n64\n)%\n97\n%\n58\n%\nIR-FX correlation\n(\n35\n)%\n60\n%\n5\n%\nEquity volatility\n2\n%\n111\n%\n30\n%\nEquity correlation\n0\n%\n100\n%\n54\n%\nEquity-FX correlation\n(\n75\n)%\n65\n%\n(\n32\n)%\nEquity-IR correlation\n5\n%\n10\n%\n8\n%\n1,634\n\nDiscounted cash flows\nCredit correlation\n29\n%\n72\n%\n51\n%\nCredit spread\n1\nbps\n261\nbps\n92\nbps\nRecovery rate\n20\n%\n60\n%\n41\n%\nYield\n5\n%\n20\n%\n10\n%\nLoss severity\n0\n%\n100\n%\n50\n%\nOther level 3 assets and liabilities, net\n(f)\n1,323\n\n(a)\nThe categories presented in the table have been aggregated based upon the product type, which may differ from their classification on the Consolidated balance sheets. Furthermore, the inputs presented for each valuation technique in the table are, in some cases, not applicable to every instrument valued using the technique as the characteristics of the instruments can differ.\n(b)\nComprises U.S. GSE and government agency securities of $\n307\n million, nonagency securities of $\n5\n million and non-trading loans of $\n577\n million.\n(c)\nComprises nonagency securities of $\n3\n million, trading loans of $\n94\n million and non-trading loans of $\n1.1\n billion.\n(d)\nComprises trading loans of $\n1.0\n billion and non-trading loans of $\n1.3\n billion.\n(e)\nLong-term debt, short-term borrowings and deposits include structured notes issued by the Firm that are financial instruments that typically contain embedded derivatives. The estimation of the fair value of structured notes includes the derivative features embedded within the instrument. The significant unobservable inputs are broadly consistent with those presented for derivative receivables.\n(f)\nIncludes equity securities of $\n889\n million, including $\n751\n million in Other assets, for which quoted prices are not readily available and the fair value is generally based on internal valuation techniques such as EBITDA multiples and comparable analysis. All other level 3 assets and liabilities are insignificant both individually and in aggregate.\n(g)\nPrice is a significant unobservable input for certain instruments. When quoted market prices are not readily available, reliance is generally placed on price-based internal valuation techniques. The price input is expressed assuming a par value of $\n100\n.\n(h)\nForward equity price is expressed as a percentage of the current equity price.\n(i)\nAmounts represent weighted averages except for derivative related inputs where arithmetic averages are used.\nJPMorgan Chase & Co./2025 Form 10-K\n183\nNotes to consolidated financial statements\nChanges in and ranges of unobservable inputs\n\nThe following discussion provides a description of the impact on a fair value measurement of a change in each unobservable input in isolation, and the interrelationship between unobservable inputs, where relevant and significant. The impact of changes in inputs may not be independent, as a change in one unobservable input may give rise to a change in another unobservable input. Where relationships do exist between two unobservable inputs, those relationships are discussed below. Relationships may also exist between observable and unobservable inputs (for example, as observable interest rates rise, unobservable prepayment rates decline); such relationships have not been included in the discussion below. In addition, for each of the individual relationships described below, the inverse relationship would also generally apply.\nThe following discussion also provides a description of attributes of the underlying instruments and external market factors that affect the range of inputs used in the valuation of the Firm\u2019s positions.\nYield \u2013 The yield of an asset is the interest rate used to discount future cash flows in a discounted cash flow calculation. An increase in the yield, in isolation, would result in a decrease in a fair value measurement.\nCredit spread \u2013 The credit spread is the amount of additional annualized return over the market interest rate that a market participant would demand for taking exposure to the credit risk of an instrument. The credit spread for an instrument forms part of the discount rate used in a discounted cash flow calculation. Generally, an increase in the credit spread would result in a decrease in a fair value measurement.\nThe yield and the credit spread of a particular mortgage-backed security primarily reflect the risk inherent in the instrument. The yield is also impacted by the absolute level of the coupon paid by the instrument (which may not correspond directly to the level of inherent risk). Therefore, the range of yield and credit spreads reflects the range of risk inherent in various instruments owned by the Firm. The risk inherent in mortgage-backed securities is driven by the subordination of the security being valued and the characteristics of the underlying mortgages within the collateralized pool, including borrower FICO scores, LTV ratios for residential mortgages and the nature of the property and/or any tenants for commercial mortgages. For corporate debt securities, obligations of U.S. states and municipalities and other similar instruments, credit spreads reflect the credit quality of the obligor and the tenor of the obligation.\nPrepayment speed \u2013 The prepayment speed is a measure of the voluntary unscheduled principal repayments of a prepayable obligation in a collateralized pool. Prepayment speeds generally decline as borrower delinquencies rise. An increase in prepayment speeds, in isolation, would result in a decrease in a fair value measurement of assets valued at a premium to par and an increase in a fair value measurement of assets valued at a discount to par.\nPrepayment speeds may vary from collateral pool to collateral pool, and are driven by the type and location of the underlying borrower, and the remaining tenor of the obligation as well as the level and type (e.g., fixed or floating) of interest rate being paid by the borrower. Typically collateral pools with higher borrower credit quality have a higher prepayment rate than those with lower borrower credit quality, all other factors being equal.\nConditional default rate \u2013 The conditional default rate is a measure of the reduction in the outstanding collateral balance underlying a collateralized obligation as a result of defaults. While there is typically no direct relationship between conditional default rates and prepayment speeds, collateralized obligations for which the underlying collateral has high prepayment speeds will tend to have lower conditional default rates. An increase in conditional default rates would generally be accompanied by an increase in loss severity and an increase in credit spreads. An increase in the conditional default rate, in isolation, would result in a decrease in a fair value measurement. Conditional default rates reflect the quality of the collateral underlying a securitization and the structure of the securitization itself. Based on the types of securities owned in the Firm\u2019s market-making portfolios, conditional default rates are most typically at the lower end of the range presented.\nLoss severity \u2013 The loss severity (the inverse concept is the recovery rate) is the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding loan balance. An increase in loss severity is generally accompanied by an increase in conditional default rates. An increase in the loss severity, in isolation, would result in a decrease in a fair value measurement.\nThe loss severity applied in valuing a mortgage-backed security depends on factors relating to the underlying mortgages, including the LTV ratio, the nature of the lender\u2019s lien on the property and other instrument-specific factors.\n184\nJPMorgan Chase & Co./2025 Form 10-K\nCorrelation \u2013 Correlation is a measure of the relationship between the movements of two variables. Correlation is a pricing input for a derivative product where the payoff is driven by one or more underlying risks. Correlation inputs are related to the type of derivative (e.g., interest rate, credit, equity, foreign exchange and commodity) due to the nature of the underlying risks. When parameters are positively correlated, an increase in one parameter will result in an increase in the other parameter. When parameters are negatively correlated, an increase in one parameter will result in a decrease in the other parameter. An increase in correlation can result in an increase or a decrease in a fair value measurement. Given a short correlation position, an increase in correlation, in isolation, would generally result in a decrease in a fair value measurement.\nThe level of correlation used in the valuation of derivatives with multiple underlying risks depends on a number of factors including the nature of those risks. For example, the correlation between two credit risk exposures would be different than that between two interest rate risk exposures. Similarly, the tenor of the transaction may also impact the correlation input, as the relationship between the underlying risks may be different over different time periods. Furthermore, correlation levels are dependent on market conditions and could have a relatively wide range of levels within or across asset classes over time, particularly in volatile market conditions.\nVolatility \u2013 Volatility is a measure of the variability in possible returns for an instrument, parameter or market index given how much the particular instrument, parameter or index changes in value over time. Volatility is a pricing input for options, including equity options, commodity options, and interest rate options. Given a long position in an option, an increase in volatility, in isolation, would generally result in an increase in a fair value measurement.\nThe level of volatility used in the valuation of a particular option-based derivative depends on a number of factors, including the nature of the risk underlying the option (e.g., the volatility of a particular equity security may be significantly different from that of a particular commodity index), the tenor of the derivative as well as the strike price of the option.\nBermudan switch value \u2013 The switch value is the difference between the overall value of a Bermudan swaption, which can be exercised at multiple points in time, and its most expensive European swaption and reflects the additional value that the multiple exercise dates provide the holder. Switch values are dependent on market conditions and can vary greatly depending on a number of factors, such as the tenor of the underlying swap as well as the strike price of the option. An increase in switch value, in isolation, would generally result in an increase in a fair value measurement.\nInterest rate curve \u2013 The interest rate curve represents the relationship of interest rates over differing tenors. The interest rate curve is used to set interest rate and foreign exchange derivative cash flows and is also a pricing input used in the discounting of any derivative cash flow.\nForward price \u2013 The forward price is the price at which the buyer agrees to purchase the asset underlying a forward contract on the predetermined future delivery date, and is such that the value of the contract is zero at inception.\nThe forward price is used as an input in the valuation of certain derivatives and depends on a number of factors including interest rates, the current price of the underlying asset, and the expected income to be received and costs to be incurred by the seller as a result of holding that asset until the delivery date. An increase in the forward can result in an increase or a decrease in a fair value measurement.\nChanges in level 3 recurring fair value measurements\nThe following tables include a rollforward of the Consolidated balance sheets amounts (including changes in fair value) for financial instruments classified by the Firm within level 3 of the fair value hierarchy for the years ended December\u00a031, 2025, 2024 and 2023. When a determination is made to classify a financial instrument within level 3, the determination is based on the significance of the unobservable inputs to the overall fair value measurement. However, level 3 financial instruments typically include, in addition to the unobservable or level 3 components, observable components (that is, components that are actively quoted and can be validated to external sources); accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology. The Firm risk-manages the observable components of level 3 financial instruments using securities and derivative positions that are classified within level 1 or 2 of the fair value hierarchy; as these level 1 and level 2 risk management instruments are not included below, the gains or losses in the following tables do not reflect the effect of the Firm\u2019s risk management activities related to such level 3 instruments.\nJPMorgan Chase & Co./2025 Form 10-K\n185\nNotes to consolidated financial statements\nFair value measurements using significant unobservable inputs\nYear ended\nDecember 31, 2025\n(in millions)\nFair value at Jan. 1, 2025\nTotal realized/unrealized gains/(losses)\nTransfers into\n\u00a0\u00a0level 3\nTransfers (out of) level 3\nFair value at Dec. 31, 2025\nChange in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2025\nPurchases\n(g)\nSales\nSettlements\n(h)\nAssets:\n(a)\nTrading assets:\nDebt instruments:\nMortgage-backed securities:\n\nU.S. GSEs and government agencies\n$\n488\n\n$\n16\n\n$\n34\n\n$\n(\n175\n)\n\n$\n(\n56\n)\n$\n\u2014\n\n$\n\u2014\n\n$\n307\n\n$\n4\n\nResidential \u2013 nonagency\n5\n\n6\n\n\u2014\n\n(\n6\n)\n\n\u2014\n\n\u2014\n\n\u2014\n\n5\n\n\u2014\n\nCommercial \u2013 nonagency\n10\n\n(\n6\n)\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n(\n4\n)\n\u2014\n\n\u2014\n\nTotal mortgage-backed securities\n503\n\n16\n\n34\n\n(\n181\n)\n(\n56\n)\n\u2014\n\n(\n4\n)\n312\n\n4\n\nObligations of U.S. states and municipalities\n1\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n1\n\n\u2014\n\nNon-U.S. government debt securities\n152\n\n30\n\n346\n\n(\n308\n)\n\n\u2014\n\n59\n\n(\n34\n)\n245\n\n19\n\nCorporate debt securities\n390\n\n28\n\n270\n\n(\n212\n)\n\n(\n10\n)\n22\n\n(\n34\n)\n454\n\n23\n\nLoans\n1,088\n\n(\n58\n)\n1,413\n\n(\n930\n)\n\n(\n146\n)\n876\n\n(\n1,100\n)\n1,143\n\n(\n63\n)\nAsset-backed securities\n10\n\n\u2014\n\n28\n\n(\n11\n)\n\n\u2014\n\n\u2014\n\n\u2014\n\n27\n\n\u2014\n\nTotal debt instruments\n2,144\n\n16\n\n2,091\n\n(\n1,642\n)\n(\n212\n)\n957\n\n(\n1,172\n)\n2,182\n\n(\n17\n)\nEquity securities\n62\n\n(\n34\n)\n264\n\n(\n229\n)\n\n\u2014\n\n165\n\n(\n90\n)\n138\n\n\u2014\n\nPhysical commodities\n26\n\n3\n\n\u2014\n\n\u2014\n\n1\n\n\u2014\n\n\u2014\n\n30\n\n16\n\nOther\n210\n\n2\n\n311\n\n\u2014\n\n(\n99\n)\n59\n\n(\n39\n)\n444\n\n192\n\nTotal trading assets \u2013 debt and equity instruments\n2,442\n\n(\n13\n)\n(c)\n2,666\n\n(\n1,871\n)\n(\n310\n)\n1,181\n\n(\n1,301\n)\n2,794\n\n191\n\n(c)\nNet derivative receivables:\n(b)\n\nInterest rate\n301\n\n1,329\n\n188\n\n(\n338\n)\n\n108\n\n(\n168\n)\n(\n114\n)\n1,306\n\n790\n\nCredit\n(\n363\n)\n(\n637\n)\n94\n\n(\n10\n)\n\n10\n\n(\n273\n)\n44\n\n(\n1,135\n)\n(\n569\n)\nForeign exchange\n20\n\n644\n\n196\n\n(\n448\n)\n\n(\n34\n)\n273\n\n(\n346\n)\n305\n\n221\n\nEquity\n(\n2,866\n)\n2,941\n\n1,016\n\n(\n2,630\n)\n\n(\n2,690\n)\n83\n\n609\n\n(\n3,537\n)\n1,476\n\nCommodity\n(\n73\n)\n54\n\n70\n\n(\n248\n)\n\n170\n\n15\n\n(\n4\n)\n(\n16\n)\n108\n\nTotal net derivative receivables\n(\n2,981\n)\n4,331\n\n(c)\n1,564\n\n(\n3,674\n)\n(\n2,436\n)\n(\n70\n)\n189\n\n(\n3,077\n)\n2,026\n\n(c)\nAvailable-for-sale securities:\nMortgage-backed securities:\nCommercial \u2013 nonagency\n8\n\n(\n5\n)\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n3\n\n(\n5\n)\nCorporate debt securities\n\u2014\n\n2\n\n194\n\n(\n94\n)\n\u2014\n\n6\n\n\u2014\n\n108\n\n4\n\nTotal available-for-sale securities\n8\n\n(\n3\n)\n(d)\n194\n\n(\n94\n)\n\u2014\n\n6\n\n\u2014\n\n111\n\n(\n1\n)\n(d)\nLoans\n2,416\n\n206\n\n(c)\n1,091\n\n(\n226\n)\n\n(\n968\n)\n1,266\n\n(\n723\n)\n3,062\n\n165\n\n(c)\nMortgage servicing rights\n9,121\n\n48\n\n(e)\n1,057\n\n9\n\n(\n1,068\n)\n\u2014\n\n\u2014\n\n9,167\n\n48\n\n(e)\nOther assets\n1,344\n\n(\n15\n)\n(c)\n358\n\n(\n66\n)\n(\n84\n)\n98\n\n(\n588\n)\n1,047\n\n61\n\n(c)\nFair value measurements using significant unobservable inputs\nYear ended\nDecember 31, 2025\n(in millions)\nFair value at Jan. 1, 2025\nTotal realized/unrealized (gains)/losses\nTransfers (out of) level 3\nFair value at Dec. 31, 2025\nChange in unrealized (gains)/losses related to financial instruments held at Dec. 31, 2025\nPurchases\nSales\nIssuances\nSettlements\n(h)\nTransfers into\nlevel 3\nLiabilities:\n(a)\nDeposits\n$\n2,185\n\n$\n161\n\n(c)(f)\n$\n\u2014\n\n$\n\u2014\n\n$\n1,951\n\n$\n(\n1,811\n)\n$\n\u2014\n\n$\n(\n130\n)\n$\n2,356\n\n$\n128\n\n(c)(f)\nShort-term borrowings\n3,476\n\n536\n\n(c)(f)\n\u2014\n\n\u2014\n\n10,307\n\n(\n8,672\n)\n36\n\n(\n125\n)\n5,558\n\n392\n\n(c)(f)\nTrading liabilities \u2013 debt and equity instruments\n46\n\n(\n14\n)\n(c)\n(\n86\n)\n109\n\n\u2014\n\n\u2014\n\n326\n\n(\n55\n)\n326\n\n302\n\n(c)\nAccounts payable and other liabilities\n76\n\n(\n6\n)\n(c)\n(\n1\n)\n1\n\n\u2014\n\n\u2014\n\n2\n\n(\n34\n)\n38\n\n(\n6\n)\n(c)\nLong-term debt\n34,564\n\n5,039\n\n(c)(f)\n\u2014\n\n\u2014\n\n31,966\n\n(\n22,573\n)\n593\n\n(\n2,916\n)\n46,673\n\n3,898\n\n(c)(f)\n186\nJPMorgan Chase & Co./2025 Form 10-K\nFair value measurements using significant unobservable inputs\nYear ended\nDecember 31, 2024\n(in millions)\nFair value at Jan. 1, 2024\nTotal realized/unrealized gains/(losses)\nTransfers (out of) level 3\nFair value at Dec. 31, 2024\nChange in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2024\nPurchases\n(g)\nSales\nSettlements\n(h)\nTransfers into\nlevel 3\nAssets:\n(a)\nTrading assets:\nDebt instruments:\nMortgage-backed securities:\nU.S. GSEs and government agencies\n$\n758\n\n$\n18\n\n$\n46\n\n$\n(\n260\n)\n$\n(\n81\n)\n$\n7\n\n$\n\u2014\n\n$\n488\n\n$\n(\n3\n)\nResidential \u2013 nonagency\n5\n\n7\n\n\u2014\n\n(\n5\n)\n(\n2\n)\n4\n\n(\n4\n)\n5\n\n\u2014\n\nCommercial \u2013 nonagency\n12\n\n(\n2\n)\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n10\n\n(\n1\n)\nTotal mortgage-backed securities\n775\n\n23\n\n46\n\n(\n265\n)\n(\n83\n)\n11\n\n(\n4\n)\n503\n\n(\n4\n)\nObligations of U.S. states and municipalities\n10\n\n\u2014\n\n\u2014\n\n\u2014\n\n(\n3\n)\n\u2014\n\n(\n6\n)\n1\n\n\u2014\n\nNon-U.S. government debt securities\n179\n\n(\n6\n)\n175\n\n(\n183\n)\n\u2014\n\n17\n\n(\n30\n)\n152\n\n(\n10\n)\nCorporate debt securities\n484\n\n36\n\n459\n\n(\n354\n)\n(\n181\n)\n13\n\n(\n67\n)\n390\n\n45\n\nLoans\n684\n\n63\n\n800\n\n(\n642\n)\n(\n74\n)\n839\n\n(\n582\n)\n1,088\n\n29\n\nAsset-backed securities\n6\n\n\u2014\n\n9\n\n(\n5\n)\n(\n8\n)\n8\n\n\u2014\n\n10\n\n\u2014\n\nTotal debt instruments\n2,138\n\n116\n\n1,489\n\n(\n1,449\n)\n(\n349\n)\n888\n\n(\n689\n)\n2,144\n\n60\n\nEquity securities\n127\n\n(\n21\n)\n138\n\n(\n123\n)\n(\n1\n)\n85\n\n(\n143\n)\n62\n\n(\n308\n)\nPhysical commodities\n7\n\n17\n\n3\n\n\u2014\n\n(\n1\n)\n\u2014\n\n\u2014\n\n26\n\n16\n\nOther\n101\n\n144\n\n53\n\n\u2014\n\n(\n68\n)\n28\n\n(\n48\n)\n210\n\n108\n\nTotal trading assets \u2013 debt and equity instruments\n2,373\n\n256\n\n(c)\n1,683\n\n(\n1,572\n)\n(\n419\n)\n1,001\n\n(\n880\n)\n2,442\n\n(\n124\n)\n(c)\nNet derivative receivables:\n(b)\nInterest rate\n502\n\n745\n\n387\n\n(\n197\n)\n(\n608\n)\n(\n172\n)\n(\n356\n)\n301\n\n(\n362\n)\nCredit\n265\n\n(\n208\n)\n(\n2\n)\n(\n17\n)\n(\n333\n)\n(\n61\n)\n(\n7\n)\n(\n363\n)\n(\n265\n)\nForeign exchange\n62\n\n248\n\n178\n\n(\n538\n)\n(\n30\n)\n128\n\n(\n28\n)\n20\n\n353\n\nEquity\n(\n2,402\n)\n(\n321\n)\n904\n\n(\n2,488\n)\n953\n\n(\n91\n)\n579\n\n(\n2,866\n)\n783\n\nCommodity\n(\n279\n)\n64\n\n32\n\n(\n215\n)\n310\n\n15\n\n\u2014\n\n(\n73\n)\n102\n\nTotal net derivative receivables\n(\n1,852\n)\n528\n\n(c)\n1,499\n\n(\n3,455\n)\n292\n\n(\n181\n)\n188\n\n(\n2,981\n)\n611\n\n(c)\nAvailable-for-sale securities:\nMortgage-backed securities:\nCommercial \u2013 nonagency\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n8\n\n\u2014\n\n8\n\n\u2014\n\nCorporate debt securities\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nTotal available-for-sale securities\n\u2014\n\n\u2014\n\n(d)\n\u2014\n\n\u2014\n\n\u2014\n\n8\n\n\u2014\n\n8\n\n\u2014\n\n(d)\nLoans\n3,079\n\n266\n\n(c)\n431\n\n(\n756\n)\n(\n993\n)\n816\n\n(\n427\n)\n2,416\n\n251\n\n(c)\nMortgage servicing rights\n8,522\n\n762\n\n(e)\n926\n\n(\n21\n)\n(\n1,068\n)\n\u2014\n\n\u2014\n\n9,121\n\n762\n\n(e)\nOther assets\n758\n\n105\n\n(c)\n623\n\n(\n62\n)\n(\n58\n)\n5\n\n(\n27\n)\n1,344\n\n88\n\n(c)\nFair value measurements using significant unobservable inputs\nYear ended\nDecember 31, 2024\n(in millions)\nFair value at Jan. 1, 2024\nTotal realized/unrealized (gains)/losses\n\nTransfers (out of) level 3\nFair value at Dec. 31, 2024\nChange in unrealized (gains)/losses related to financial instruments held at Dec. 31, 2024\nPurchases\nSales\nIssuances\nSettlements\n(h)\nTransfers into\nlevel 3\nLiabilities:\n(a)\nDeposits\n$\n1,833\n\n$\n(\n14\n)\n(c)(f)\n$\n\u2014\n\n$\n\u2014\n\n$\n2,006\n\n$\n(\n1,522\n)\n$\n34\n\n$\n(\n152\n)\n$\n2,185\n\n$\n(\n44\n)\n(c)(f)\nShort-term borrowings\n1,758\n\n180\n\n(c)(f)\n\u2014\n\n\u2014\n\n7,752\n\n(\n6,230\n)\n23\n\n(\n7\n)\n3,476\n\n58\n\n(c)(f)\nTrading liabilities \u2013 debt and equity instruments\n37\n\n(\n47\n)\n(c)\n(\n45\n)\n70\n\n\u2014\n\n\u2014\n\n48\n\n(\n17\n)\n46\n\n18\n\n(c)\nAccounts payable and other liabilities\n52\n\n(\n6\n)\n(c)\n(\n35\n)\n63\n\n\u2014\n\n\u2014\n\n5\n\n(\n3\n)\n76\n\n(\n6\n)\n(c)\nLong-term debt\n27,726\n\n1,475\n\n(c)(f)\n\u2014\n\n\u2014\n\n23,920\n\n(\n18,432\n)\n738\n\n(\n863\n)\n34,564\n\n1,212\n\n(c)(f)\nJPMorgan Chase & Co./2025 Form 10-K\n187\nNotes to consolidated financial statements\nFair value measurements using significant unobservable inputs\nYear ended\nDecember 31, 2023\n(in millions)\nFair value at Jan.  1, 2023\nTotal realized/unrealized gains/(losses)\nTransfers (out of) level 3\nFair value at\nDec. 31, 2023\nChange in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2023\nPurchases\n(g)\nSales\nSettlements\n(h)\nTransfers into\nlevel 3\nAssets:\n(a)\nTrading assets:\nDebt instruments:\nMortgage-backed securities:\nU.S. GSEs and government agencies\n$\n759\n\n$\n4\n\n$\n249\n\n$\n(\n133\n)\n$\n(\n107\n)\n$\n\u2014\n\n$\n(\n14\n)\n$\n758\n\n$\n1\n\nResidential \u2013 nonagency\n5\n\n6\n\n\u2014\n\n(\n6\n)\n(\n1\n)\n1\n\n\u2014\n\n5\n\n1\n\nCommercial \u2013 nonagency\n7\n\n6\n\n\u2014\n\n\u2014\n\n(\n1\n)\n8\n\n(\n8\n)\n12\n\n7\n\nTotal mortgage-backed securities\n771\n\n16\n\n249\n\n(\n139\n)\n(\n109\n)\n9\n\n(\n22\n)\n775\n\n9\n\nObligations of U.S. states and municipalities\n7\n\n\u2014\n\n1\n\n\u2014\n\n(\n1\n)\n3\n\n\u2014\n\n10\n\n\u2014\n\nNon-U.S. government debt securities\n155\n\n74\n\n217\n\n(\n254\n)\n\u2014\n\n22\n\n(\n35\n)\n179\n\n74\n\nCorporate debt securities\n463\n\n36\n\n322\n\n(\n172\n)\n(\n41\n)\n114\n\n(\n238\n)\n484\n\n35\n\nLoans\n759\n\n(\n15\n)\n1,027\n\n(\n499\n)\n(\n441\n)\n382\n\n(\n529\n)\n684\n\n30\n\nAsset-backed securities\n23\n\n\u2014\n\n7\n\n(\n12\n)\n(\n1\n)\n5\n\n(\n16\n)\n6\n\n\u2014\n\nTotal debt instruments\n2,178\n\n111\n\n1,823\n\n(\n1,076\n)\n(\n593\n)\n535\n\n(\n840\n)\n2,138\n\n148\n\nEquity securities\n665\n\n(\n53\n)\n164\n\n(\n239\n)\n(\n384\n)\n192\n\n(\n218\n)\n127\n\n(\n422\n)\nPhysical commodities\n2\n\n\u2014\n\n7\n\n\u2014\n\n(\n2\n)\n\u2014\n\n\u2014\n\n7\n\n\u2014\n\nOther\n64\n\n(\n58\n)\n141\n\n\u2014\n\n(\n5\n)\n1\n\n(\n42\n)\n101\n\n(\n28\n)\nTotal trading assets \u2013 debt and equity instruments\n2,909\n\n\u2014\n\n2,135\n\n(\n1,315\n)\n(\n984\n)\n728\n\n(\n1,100\n)\n2,373\n\n(\n302\n)\n(c)\nNet derivative receivables:\n(b)\nInterest rate\n701\n\n556\n\n251\n\n(\n255\n)\n654\n\n(\n1,117\n)\n(\n288\n)\n502\n\n419\n\nCredit\n13\n\n304\n\n(\n60\n)\n(\n25\n)\n47\n\n15\n\n(\n29\n)\n265\n\n230\n\nForeign exchange\n489\n\n31\n\n151\n\n(\n144\n)\n(\n187\n)\n144\n\n(\n422\n)\n62\n\n(\n80\n)\nEquity\n(\n384\n)\n191\n\n928\n\n(\n1,931\n)\n(\n1,306\n)\n700\n\n(\n600\n)\n(\n2,402\n)\n(\n646\n)\nCommodity\n(\n146\n)\n(\n59\n)\n59\n\n(\n290\n)\n(\n51\n)\n(\n11\n)\n219\n\n(\n279\n)\n(\n144\n)\nTotal net derivative receivables\n673\n\n1,023\n\n(c)\n1,329\n\n(\n2,645\n)\n(\n843\n)\n(\n269\n)\n(\n1,120\n)\n(\n1,852\n)\n(\n221\n)\n(c)\nAvailable-for-sale securities:\nMortgage-backed securities:\nCommercial \u2013 nonagency\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nCorporate debt securities\n239\n\n24\n\n\u2014\n\n(\n225\n)\n\u2014\n\n\u2014\n\n(\n38\n)\n\u2014\n\n\u2014\n\nTotal available-for-sale securities\n239\n\n24\n\n(d)\n\u2014\n\n(\n225\n)\n\u2014\n\n\u2014\n\n(\n38\n)\n\u2014\n\n\u2014\n\n(d)\nLoans\n1,418\n\n289\n\n(c)\n2,398\n\n(\n120\n)\n(\n1,147\n)\n1,306\n\n(\n1,065\n)\n3,079\n\n293\n\n(c)\nMortgage servicing rights\n7,973\n\n467\n\n(e)\n1,281\n\n(\n188\n)\n(\n1,011\n)\n\u2014\n\n\u2014\n\n8,522\n\n467\n\n(e)\nOther assets\n405\n\n(\n36\n)\n(c)\n525\n\n(\n20\n)\n(\n147\n)\n45\n\n(\n14\n)\n758\n\n(\n82\n)\n(c)\nFair value measurements using significant unobservable inputs\nYear ended\nDecember 31, 2023\n(in millions)\nFair value at Jan.  1, 2023\nTotal realized/unrealized (gains)/losses\nTransfers into\nlevel 3\nTransfers (out of) level 3\nFair value at\nDec. 31, 2023\nChange in unrealized (gains)/losses related to financial instruments held at Dec. 31, 2023\nPurchases\nSales\nIssuances\nSettlements\n(h)\nLiabilities:\n(a)\nDeposits\n$\n2,162\n\n$\n95\n\n(c)(f)\n$\n\u2014\n\n$\n\u2014\n\n$\n940\n\n$\n(\n1,043\n)\n$\n\u2014\n\n$\n(\n321\n)\n$\n1,833\n\n$\n73\n\n(c)(f)\nShort-term borrowings\n1,401\n\n201\n\n(c)(f)\n\u2014\n\n\u2014\n\n4,522\n\n(\n4,345\n)\n3\n\n(\n24\n)\n1,758\n\n14\n\n(c)(f)\nTrading liabilities \u2013 debt and equity instruments\n84\n\n(\n21\n)\n(c)\n(\n32\n)\n9\n\n\u2014\n\n(\n2\n)\n19\n\n(\n20\n)\n37\n\n\u2014\n\nAccounts payable and other liabilities\n53\n\n(\n4\n)\n(c)\n(\n16\n)\n24\n\n\u2014\n\n\u2014\n\n8\n\n(\n13\n)\n52\n\n(\n4\n)\n(c)\nLong-term debt\n24,092\n\n3,010\n\n(c)(f)\n\u2014\n\n\u2014\n\n12,679\n\n(\n11,555\n)\n229\n\n(\n729\n)\n27,726\n\n2,870\n\n(c)(f)\n188\nJPMorgan Chase & Co./2025 Form 10-K\n(a)\nLevel 3 assets at fair value as a percentage of total Firm assets at fair value (including assets measured at fair value on a nonrecurring basis) were\n1\n% at December\u00a031, 2025 and\n2\n% at both December\u00a031, 2024 and 2023. Level 3 liabilities at fair value as a percentage of total Firm liabilities at fair value (including liabilities measured at fair value on a nonrecurring basis) were\n9\n% at both December\u00a031, 2025 and 2024 and\n8\n% at December\u00a031, 2023.\n(b)\nAll level 3 derivatives are presented on a net basis, irrespective of the underlying counterparty.\n(c)\nPrimarily reported in principal transactions revenue, except for changes in fair value for CCB mortgage loans and lending-related commitments originated with the intent to sell, and mortgage loan purchase commitments, which are reported in mortgage fees and related income.\n(d)\nRealized gains/(losses) on AFS securities are reported in investment securities gains/(losses). Unrealized gains/(losses) are reported in OCI. Realized and unrealized gains/(losses) recorded on level 3 AFS securities were not material for the years ended December\u00a031, 2025, 2024 and 2023.\n(e)\nChanges in fair value for MSRs are reported in mortgage fees and related income.\n(f)\nRealized (gains)/losses due to DVA for fair value option elected liabilities are reported in principal transactions revenue, and were not material for the years ended December\u00a031, 2025, 2024 and 2023. Unrealized (gains)/losses are reported in OCI, and were $\n235\n million, $(\n50\n) million and $(\n158\n) million for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n(g)\nLoan originations are included in purchases.\n(h)\nIncludes financial assets and liabilities that have matured, been partially or fully repaid,\u00a0impacts of modifications, deconsolidations associated with beneficial interests in VIEs and other items.\nLevel 3 analysis\nConsolidated balance sheets changes\nThe following describes significant changes to level 3 assets since December\u00a031, 2024, for those items measured at fair value on a recurring basis. Refer to Assets and liabilities measured at fair value on a nonrecurring basis on page 192 for further information on changes impacting items measured at fair value on a nonrecurring basis.\nFor the year ended December\u00a031, 2025\nLevel 3 assets were $\n25.1\n billion at December\u00a031, 2025, reflecting an increase of $\n1.3\n billion from December 31, 2024.\nThe increase for the year ended December\u00a031, 2025 was predominantly driven by:\n\u2022\nGross derivative receivables of $\n474\n\u00a0million due to gains and purchases predominantly offset by settlements and net transfers.\n\u2022\nNon-trading loans of $\n646\n\u00a0million due to purchases and net transfers largely offset by settlements.\nRefer to the sections below for additional information.\nTransfers between levels for instruments carried at\nfair value on a recurring basis\nDuring the year ended December\u00a031, 2025, significant transfers from level 2 into level 3 included the following:\n\u2022\n$\n1.2\n\u00a0billion of total debt and equity instruments, predominantly trading loans and equity securities, driven by a decrease in observability.\n\u2022\n$\n904\n\u00a0million of gross interest rate derivative payables as a result of a decrease in observability and an increase in the significance of unobservable inputs.\n\u2022\n$\n1.6\n\u00a0billion of both gross equity derivative receivables and payables as a result of a decrease in observability and an increase in the significance of unobservable inputs.\n\u2022\n$\n1.3\n\u00a0billion of non-trading loans driven by a decrease in observability.\nDuring the year ended December\u00a031, 2025, significant transfers from level 3 into level 2 included the following:\n\u2022\n$\n1.3\n\u00a0billion of total debt and equity instruments, predominantly trading loans, driven by an increase in observability.\n\u2022\n$\n1.3\n\u00a0billion of gross interest rate derivative receivables and $\n1.2\n\u00a0billion of gross interest rate derivative payables as a result of an increase in observability and a decrease in the significance of unobservable inputs.\n\u2022\n$\n2.1\n\u00a0billion of gross equity derivative receivables and $\n2.7\n\u00a0billion of gross equity derivative payables as a result of an increase in observability and a decrease in the significance of unobservable inputs.\n\u2022\n$\n2.9\n\u00a0billion of long-term debt as a result of an increase in observability and a decrease in the significance of unobservable inputs.\nDuring the year ended December\u00a031, 2024, significant transfers from level 2 into level 3 included the following:\n\u2022\n$\n1.0\n\u00a0billion of total debt and equity instruments, predominantly trading loans, driven by a decrease in observability.\n\u2022\n$\n959\n\u00a0million of gross interest rate derivative receivables and $\n1.1\n\u00a0billion of gross interest rate derivative payables as a result of a decrease in observability and an increase in the significance of unobservable inputs.\n\u2022\n$\n1.6\n\u00a0billion of gross equity derivative receivables and $\n1.7\n\u00a0billion of gross equity derivative payables as a result of a decrease in observability and an increase in the significance of unobservable inputs.\n\u2022\n$\n816\n\u00a0million of non-trading loans driven by a decrease in observability.\nJPMorgan Chase & Co./2025 Form 10-K\n189\nNotes to consolidated financial statements\nDuring the year ended December\u00a031, 2024, significant transfers from level 3 into level 2 included the following:\n\u2022\n$\n880\n\u00a0million of total debt and equity instruments,\npredominantly trading loans and equity securities, driven by an increase in observability\n.\n\u2022\n$\n1.4\n\u00a0billion of gross equity derivative receivables and $\n2.0\n\u00a0billion of gross equity derivative payables as a result of an increase in observability and a decrease in the significance of unobservable inputs.\n\u2022\n$\n863\n\u00a0million of\nlong-term debt as a result of an increase in observability and a decrease in the significance of unobservable inputs.\nDuring the year ended December\u00a031, 2023, significant transfers from level 2 into level 3 included the following:\n\u2022\n$\n951\n\u00a0million of gross interest rate derivative receivables\nas a result of a decrease in observability and an increase in the significance of unobservable inputs\nand $\n2.1\n\u00a0billion of gross interest rate derivative payables as a result\n of transition to term SOFR for certain interest rate options.\n\u2022\n$\n1.5\n\u00a0billion of gross equity derivative receivables and $\n829\n\u00a0million of gross equity derivative payables as a result of a decrease in observability and an increase in the significance of unobservable inputs.\n\u2022\n$\n1.3\n\u00a0billion of non-trading loans driven by a decrease in observability.\nDuring the year ended December\u00a031, 2023, significant transfers from level 3 into level 2 included the following:\n\u2022\n$\n1.1\n billion of total debt and equity instruments, partially due to trading loans, driven by an increase in observability.\n\u2022\n$\n921\n\u00a0million of gross interest rate derivative receivables as a result of an increase in observability and a decrease in the significance of unobservable inputs.\n\u2022\n$\n2.3\n\u00a0billion of gross equity derivative receivables and $\n1.7\n\u00a0billion of gross equity derivative payables as a result of an increase in observability and a decrease in the significance of unobservable inputs.\n\u2022\n$\n1.1\n\u00a0billion of non-trading loans as a result of an increase in observability and a decrease in the significance of unobservable inputs.\nAll transfers are based on changes in the observability and/or significance of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur.\nGains and losses\nThe following describes significant components of total realized/unrealized gains/(losses) for instruments measured at fair value on a recurring basis for the years ended December\u00a031, 2025, 2024 and 2023. These amounts exclude any effects of the Firm\u2019s risk management activities where the financial instruments are classified as level 1 and 2 of the fair value hierarchy. Refer to Changes in level 3 recurring fair value measurements rollforward tables on pages 185\u2013189 for further information on these instruments.\n2025\n\u2022\n$\n4.6\n billion of net gains on assets, predominantly driven by gains in net interest rate derivative receivables and net equity derivative receivables due to market movements.\n\u2022\n$\n5.7\n billion of net losses on liabilities, predominantly driven by losses in long-term debt due to market movements.\n2024\n\u2022\n$\n1.9\n billion of net gains on assets, predominantly driven by gains in net interest rate derivative receivables due to market movements and gains in MSRs reflecting lower prepayment speeds on higher rates.\n\u2022\n$\n1.6\n billion of net losses on liabilities, predominantly driven by losses in long-term debt due to market movements.\n2023\n\u2022\n$\n1.8\n billion of net gains on assets, largely driven by gains in net interest rate derivative receivables due to market movements and gains in MSRs reflecting lower prepayment speeds on higher rates.\n\u2022\n$\n3.3\n billion of net losses on liabilities, predominantly driven by losses in long-term debt due to market movements.\nRefer to Note 15 for information on MSRs.\n190\nJPMorgan Chase & Co./2025 Form 10-K\nCredit and funding adjustments \u2013 derivatives\nDerivatives are generally valued using models that use as their basis observable market parameters. These market parameters generally do not consider factors such as counterparty nonperformance risk, the Firm\u2019s own credit quality, and funding costs. Therefore, it is generally necessary to make adjustments to the base estimate of fair value to reflect these factors.\nCVA represents the adjustment, relative to the relevant benchmark interest rate, necessary to reflect counterparty nonperformance risk. The Firm estimates CVA using a scenario analysis to estimate the expected positive credit exposure across all of the Firm\u2019s existing positions with each counterparty, and then estimates losses based on the probability of default and estimated recovery rate as a result of a counterparty credit event considering contractual factors designed to mitigate the Firm\u2019s credit exposure, such as collateral and legal rights of offset. The key inputs to this methodology are (i) the probability of a default event occurring for each counterparty, as derived from observed or estimated CDS spreads; and (ii) estimated recovery rates implied by CDS spreads, adjusted to consider the differences in recovery rates as a derivative creditor relative to those reflected in CDS spreads, which generally reflect senior unsecured creditor risk.\nFVA represents the adjustment to reflect the impact of funding and is recognized where there is evidence that a market participant in the principal market would incorporate it in a transfer of the instrument. The Firm\u2019s FVA framework, applied to uncollateralized (including partially collateralized) over-the-counter (\u201cOTC\u201d) derivatives incorporates key inputs such as: (i) the expected funding requirements arising from the Firm\u2019s positions with each counterparty and collateral arrangements; and (ii) the estimated market funding cost in the principal market which, for derivative liabilities, considers the Firm\u2019s credit risk (DVA). For collateralized derivatives, the fair value is estimated by discounting expected future cash flows at the relevant overnight indexed swap rate given the underlying collateral agreement with the counterparty, and therefore a separate FVA is not necessary.\nThe following table provides the gains/(losses) resulting from credit and funding adjustments on principal transactions revenue in the respective periods, excluding the effect of any associated hedging activities. The FVA presented below includes the impact of the Firm\u2019s own credit quality on the inception value of liabilities as well as the impact of changes in the Firm\u2019s own credit quality over time.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nCredit and funding adjustments:\nDerivatives CVA\n$\n(\n36\n)\n$\n29\n\n$\n221\n\nDerivatives FVA\n(\n18\n)\n99\n\n114\n\nValuation adjustments on fair value option elected liabilities\nThe valuation of the Firm\u2019s liabilities for which the fair value option has been elected requires consideration of the Firm\u2019s own credit risk. DVA on fair value option elected liabilities reflects changes (subsequent to the issuance of the liability) in the Firm\u2019s probability of default and LGD, which are estimated based on changes in the Firm\u2019s credit spread observed in the bond market. Realized (gains)/losses due to DVA for fair value option elected liabilities are reported in principal transactions revenue. Unrealized (gains)/losses are reported in OCI. Refer to page 189 in this Note and Note 24 for further information.\n\nJPMorgan Chase & Co./2025 Form 10-K\n191\nNotes to consolidated financial statements\nAssets and liabilities measured at fair value on a nonrecurring basis\nThe following tables present the assets and liabilities held as of December\u00a031, 2025 and 2024, for which nonrecurring fair value adjustments were recorded during the years ended December\u00a031, 2025 and 2024, by major product category and fair value hierarchy.\nDecember 31, 2025\n(in millions)\nFair value hierarchy\nTotal fair value\nLevel 1\nLevel 2\nLevel 3\nLoans\n$\n\u2014\n\n$\n618\n\n$\n529\n\n$\n1,147\n\nOther assets\n(a)\n\u2014\n\n8\n\n863\n\n871\n\nTotal assets measured at fair value on a nonrecurring basis\n$\n\u2014\n\n$\n626\n\n$\n1,392\n\n$\n2,018\n\nAccounts payable and other liabilities\n\u2014\n\n\u2014\n\n5\n\n5\n\nTotal liabilities measured at fair value on a nonrecurring basis\n$\n\u2014\n\n$\n\u2014\n\n$\n5\n\n$\n5\n\nDecember 31, 2024\n(in millions)\nFair value hierarchy\nTotal fair value\nLevel 1\nLevel 2\nLevel 3\nLoans\n$\n\u2014\n\n$\n738\n\n$\n694\n\n$\n1,432\n\nOther assets\n\u2014\n\n9\n\n1,048\n\n1,057\n\nTotal assets measured at fair value on a nonrecurring basis\n$\n\u2014\n\n$\n747\n\n$\n1,742\n\n$\n2,489\n\nAccounts payable and other liabilities\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nTotal liabilities measured at fair value on a nonrecurring basis\n$\n\u2014\n\n$\n\u2014\n\n$\n\u2014\n\n$\n\u2014\n\n(a)  Included equity securities without readily determinable fair values that were adjusted based on observable price changes in orderly transactions from an identical or similar investment of the same issuer (measurement alternative). Of the $\n863\n million in level 3 assets measured at fair value on a nonrecurring basis as of December\u00a031, 2025, $\n721\n million related to equity securities adjusted based on the measurement alternative. These equity securities are classified as level 3 due to the infrequency of the observable prices and/or the restrictions on the shares. Also, included impairments on certain equity method investments.\nNonrecurring fair value changes\nThe following table presents the total change in value of assets and liabilities for which fair value adjustments have been recognized for the years ended December\u00a031, 2025, 2024 and 2023, related to assets and liabilities held at those dates.\nDecember 31, (in millions)\n2025\n2024\n2023\nLoans\n$\n(\n151\n)\n\n$\n(\n302\n)\n$\n(\n276\n)\nOther assets\n(a)\n101\n\n(\n610\n)\n(\n789\n)\nAccounts payable and other liabilities\n(\n5\n)\n\n\u2014\n\n\u2014\n\nTotal nonrecurring fair value gains/(losses)\n$\n(\n55\n)\n$\n(\n912\n)\n$\n(\n1,065\n)\n(a)\nIncluded $\n122\n million, $(\n197\n) million and $(\n232\n) million for the years ended December\u00a031, 2025, 2024 and 2023, respectively, of net gains/(losses) as a result of the measurement alternative. Also included impairments on certain equity method investments for the years ended December\u00a031, 2025 and 2024.\n192\nJPMorgan Chase & Co./2025 Form 10-K\nEquity securities without readily determinable fair values\nThe Firm measures certain equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of the same issuer (i.e., measurement alternative), with such changes recognized in other income.\nIn its determination of the new carrying values upon observable price changes, the Firm may adjust the prices if deemed necessary to arrive at the Firm\u2019s estimated fair values. Such adjustments may include adjustments to reflect the different rights and obligations of similar securities, and other adjustments that are consistent with the Firm\u2019s valuation techniques for private equity direct investments.\nThe following table presents the carrying value of equity securities without readily determinable fair values held as of December\u00a031, 2025 and 2024, that are measured under the measurement alternative and the related adjustments recorded during the periods presented for those securities with observable price changes. These securities are included in the nonrecurring fair value tables when applicable price changes are observable.\nAs of or for the year ended December 31,\n(in millions)\n2025\n2024\nOther assets\nCarrying value\n(a)\n$\n4,873\n\n$\n3,737\n\nUpward carrying value changes\n(b)\n224\n\n89\n\nDownward carrying value changes/impairment\n(c)\n(\n102\n)\n(\n286\n)\n(a)\nThe period-end carrying values reflect cumulative purchases and sales in addition to upward and downward carrying value changes.\n(b)\nThe cumulative upward carrying value changes between January 1, 2018 and December\u00a031, 2025 were $\n1.3\n billion.\n(c)\nThe cumulative downward carrying value changes/impairment between January 1, 2018 and December\u00a031, 2025 were $(\n1.5\n) billion\n.\n\nIncluded in other assets above is the Firm\u2019s interest in approximately\n18.6\n\u00a0million Visa Class B-2 common shares (\"Visa B-2 shares\") reflected in the Firm's principal investment portfolio at both December\u00a031, 2025 and 2024.\nThe Visa B-2 shares are subject to certain transfer restrictions and are convertible into Visa Class A common shares (\u201cVisa A shares\u201d) at a specified conversion rate upon final resolution of certain litigation matters involving Visa. The conversion rate of Visa B-2 shares to Visa A shares was\n1.5108\n at December\u00a031, 2025 and may be adjusted by Visa depending on developments related to the litigation matters. The outcome of those litigation matters, and the effect that the resolution of those matters may have on the conversion rate, is unknown. Accordingly, as of December\u00a031, 2025, there is significant uncertainty regarding when the transfer restrictions on Visa B-2 shares may be terminated and what the final conversion rate for the Visa B-2 shares will be. As a result of these considerations, as well as differences in voting rights, Visa B-2 shares are not considered to be similar to Visa A shares, and are held at their nominal carryover basis.\nOn February 13, 2026, Visa Inc. (\u201cVisa\u201d) announced that its Board of Directors has authorized Visa to proceed with a successive exchange offer in respect of Visa\u2019s outstanding Class B common stock with timing, terms, and conditions as discussed in Visa\u2019s disclosure. The timing and likelihood of any future exchange offer is dependent upon actions taken by Visa and other factors that are outside of the Firm\u2019s control.\nSeparately, in connection with sales of Visa B shares prior to 2024, the Firm has entered into derivative instruments with the purchasers of the shares under which the Firm retains the risk associated with changes in the conversion rate. Under the terms of the derivative instruments, the Firm will (a) make or receive payments based on subsequent changes in the conversion rate and (b) make periodic interest payments to the purchasers of the Visa B shares. The payments under the derivative instruments will continue as long as the Visa B-2 shares associated with the previously sold Visa B shares remain subject to transfer restrictions. The derivative instruments are accounted for at fair value using a discounted cash flow methodology based upon the Firm\u2019s estimate of the timing and magnitude of final resolution of the litigation matters. The derivative instruments are recorded in trading liabilities, and changes in fair value are recognized in other income. The notional amount of shares associated with those derivative instruments has been adjusted as a result of the 2024 Visa exchange offer. As of December\u00a031, 2025, the Firm held derivative instruments associated with\n11.6\n million Visa B-2 shares related to Visa B share sales prior to 2024, which are all subject to similar terms and conditions.\nJPMorgan Chase & Co./2025 Form 10-K\n193\nNotes to consolidated financial statements\nAdditional disclosures about the fair value of financial instruments that are not carried on the Consolidated balance sheets at fair value\nU.S. GAAP requires disclosure of the estimated fair value of certain financial instruments, which are included in the following table. However, this table does not include other items, such as nonfinancial assets, intangible assets, certain financial instruments, and customer relationships. In the opinion of management, these items, in the aggregate, add significant value to JPMorganChase.\nFinancial instruments for which carrying value approximates fair value\nCertain financial instruments that are not carried at fair value on the Consolidated balance sheets are carried\nat amounts that approximate fair value, due to their short-term nature and generally negligible credit risk. These instruments include cash and due from banks, deposits with banks, federal funds sold, securities purchased under resale agreements and securities borrowed, short-term receivables and accrued interest receivable, short-term borrowings, federal funds purchased, securities loaned and sold under repurchase agreements, accounts payable, and accrued liabilities. In addition, U.S. GAAP requires that the fair value of deposit liabilities with no stated maturity (i.e., demand, savings and certain money market deposits) be equal to their carrying value; recognition of the inherent funding value of these instruments is not permitted.\nThe following table presents, by fair value hierarchy classification, the carrying values and estimated fair values at December\u00a031, 2025 and 2024, of financial assets and liabilities, excluding financial instruments that are carried at fair value on a recurring basis, and their classification within the fair value hierarchy.\nDecember 31, 2025\nDecember 31, 2024\nEstimated fair value hierarchy\nEstimated fair value hierarchy\n(in billions)\nCarrying\nvalue\nLevel 1\nLevel 2\nLevel 3\nTotal estimated\nfair value\nCarrying\nvalue\nLevel 1\nLevel 2\nLevel 3\nTotal estimated\nfair value\nFinancial assets\nCash and due from banks\n$\n21.7\n\n$\n21.7\n\n$\n\u2014\n\n$\n\u2014\n\n$\n21.7\n\n$\n23.4\n\n$\n23.4\n\n$\n\u2014\n\n$\n\u2014\n\n$\n23.4\n\nDeposits with banks\n321.6\n\n321.6\n\n\u2014\n\n\u2014\n\n321.6\n\n445.9\n\n445.8\n\n0.1\n\n\u2014\n\n445.9\n\nAccrued interest and accounts receivable\n111.1\n\n\u2014\n\n111.0\n\n0.1\n\n111.1\n\n101.1\n\n\u2014\n\n101.0\n\n0.1\n\n101.1\n\nFederal funds sold and securities purchased under resale agreements\n9.4\n\n\u2014\n\n9.4\n\n\u2014\n\n9.4\n\n8.2\n\n\u2014\n\n8.2\n\n\u2014\n\n8.2\n\nSecurities borrowed\n188.1\n\n\u2014\n\n188.1\n\n\u2014\n\n188.1\n\n135.6\n\n\u2014\n\n135.6\n\n\u2014\n\n135.6\n\nInvestment securities, held-to-maturity\n270.1\n\n126.4\n\n126.9\n\n\u2014\n\n253.3\n\n274.5\n\n97.4\n\n150.5\n\n\u2014\n\n247.9\n\nLoans, net of allowance for loan losses\n(a)\n1,397.0\n\n\u2014\n\n314.6\n\n1,089.2\n\n1,403.8\n\n1,282.3\n\n\u2014\n\n268.7\n\n1,007.8\n\n1,276.5\n\nOther\n93.0\n\n\u2014\n\n91.7\n\n1.5\n\n93.2\n\n82.7\n\n\u2014\n\n81.3\n\n1.6\n\n82.9\n\nFinancial liabilities\nDeposits\n$\n2,538.4\n\n$\n\u2014\n\n$\n2,538.8\n\n$\n\u2014\n\n$\n2,538.8\n\n$\n2,372.3\n\n$\n\u2014\n\n$\n2,372.5\n\n$\n\u2014\n\n$\n2,372.5\n\nFederal funds purchased and securities loaned or sold under repurchase agreements\n82.2\n\n\u2014\n\n82.2\n\n\u2014\n\n82.2\n\n70.5\n\n\u2014\n\n70.5\n\n\u2014\n\n70.5\n\nShort-term borrowings\n32.3\n\n\u2014\n\n32.3\n\n\u2014\n\n32.3\n\n26.4\n\n\u2014\n\n26.3\n\n\u2014\n\n26.3\n\nAccounts payable and other liabilities\n(b)\n262.6\n\n\u2014\n\n248.7\n\n13.0\n\n261.7\n\n232.8\n\n\u2014\n\n219.6\n\n12.6\n\n232.2\n\nBeneficial interests issued by consolidated VIEs\n27.9\n\n\u2014\n\n28.0\n\n\u2014\n\n28.0\n\n27.3\n\n\u2014\n\n27.4\n\n\u2014\n\n27.4\n\nLong-term debt\n300.6\n\n\u2014\n\n253.0\n\n52.1\n\n305.1\n\n300.6\n\n\u2014\n\n251.2\n\n50.7\n\n301.9\n\n(a)\nFair value is typically estimated using a discounted cash flow model that incorporates the characteristics of the underlying loans (including principal, contractual interest rate and contractual fees) and other key inputs, including expected lifetime credit losses, interest rates, prepayment rates, and primary origination or secondary market spreads. For certain loans, the fair value is measured based on the value of the underlying collateral. Carrying value of the loan takes into account the loan\u2019s allowance for loan losses, which represents the loan\u2019s expected credit losses over its remaining expected life. The difference between the estimated fair value and carrying value of a loan is generally attributable to changes in market interest rates, including credit spreads, market liquidity premiums and other factors that affect the fair value of a loan but do not affect its carrying value.\n(b)\nExcludes lending-related commitments disclosed in the table below.\n\n194\nJPMorgan Chase & Co./2025 Form 10-K\nThe majority of the Firm\u2019s lending-related commitments are not carried at fair value on a recurring basis on the Consolidated balance sheets.\nThe carrying value and the estimated fair value of these wholesale lending-related commitments were as follows for the periods indicated.\nDecember 31, 2025\nDecember 31, 2024\nEstimated fair value hierarchy\nEstimated fair value hierarchy\n(in billions)\nCarrying value\n(a)(b)\nLevel 1\nLevel 2\nLevel 3\nTotal estimated fair value\nCarrying value\n(a)(b)\nLevel 1\nLevel 2\nLevel 3\nTotal estimated fair value\nWholesale lending-related commitments\n$\n3.2\n\n$\n\u2014\n\n$\n\u2014\n\n$\n4.5\n\n$\n4.5\n\n$\n2.7\n\n$\n\u2014\n\n$\n\u2014\n\n$\n4.4\n\n$\n4.4\n\n(a)\nExcludes the current carrying values of the guarantee liability and the offsetting asset, each of which is recognized at fair value at the inception of the guarantees.\n(b)\nIncludes the wholesale allowance for lending-related commitments.\nThe Firm does not estimate the fair value of consumer off-balance sheet lending-related commitments. In many cases, the Firm can reduce or cancel these commitments with or without notice to the borrower, as permitted by law, or in accordance with the contract. Refer to page 176 of this Note for a further discussion of the valuation of lending-related commitments.\n\nJPMorgan Chase & Co./2025 Form 10-K\n195\nNotes to consolidated financial statements\nNote 3 \u2013\nFair value option\nThe fair value option provides an option to elect fair value for selected financial assets, financial liabilities, unrecognized firm commitments, and written loan commitments.\nThe Firm has elected to measure certain instruments at fair value for several reasons including to mitigate income statement volatility caused by the differences between the measurement basis of elected instruments (e.g., certain instruments that otherwise would be accounted for on an accrual basis) and the associated risk management arrangements that are accounted for on a fair value basis, as well as to better reflect those instruments that are managed on a fair value basis.\nThe Firm\u2019s election of fair value includes the following instruments:\n\u2022\nLoans purchased or originated as part of securitization warehousing activity, subject to bifurcation accounting, or managed on a fair value basis, including lending-related commitments\n\u2022\nCertain securities financing agreements\n\u2022\nOwned beneficial interests in securitized financial assets that contain embedded credit derivatives, which would otherwise be required to be separately accounted for as a derivative instrument\n\u2022\nStructured notes and other hybrid instruments, which are predominantly financial instruments that contain embedded derivatives, that are issued or transacted as part of client-driven activities\n\u2022\nCertain long-term beneficial interests issued by CIB\u2019s consolidated securitization trusts where the underlying assets are carried at fair value\n\n196\nJPMorgan Chase & Co./2025 Form 10-K\nChanges in fair value under the fair value option election\nThe following table presents the changes in fair value included in the Consolidated statements of income for the years ended December\u00a031, 2025, 2024 and 2023, for items for which the fair value option was elected. The profit and loss information presented below only includes the financial instruments that were elected to be measured at fair value; related risk management instruments, which are required to be measured at fair value, are not included in the table.\n2025\n2024\n2023\nDecember 31,\n(in millions)\nPrincipal transactions\nAll other income\nTotal changes in fair value recorded\n(e)\nPrincipal transactions\nAll other income\nTotal changes in fair value recorded\n(e)\nPrincipal transactions\nAll other income\nTotal changes in fair value recorded\n(e)\nFederal funds sold and securities purchased under resale agreements\n$\n161\n\n$\n\u2014\n\n$\n161\n\n$\n144\n\n$\n\u2014\n\n$\n144\n\n$\n300\n\n$\n\u2014\n\n$\n300\n\nSecurities borrowed\n(\n3\n)\n\u2014\n\n(\n3\n)\n347\n\n\u2014\n\n347\n\n164\n\n\u2014\n\n164\n\nTrading assets:\nDebt and equity instruments, excluding loans\n3,020\n\n\u2014\n\n3,020\n\n7,205\n\n\u2014\n\n7,205\n\n3,656\n\n\u2014\n\n3,656\n\nLoans reported as trading assets:\nChanges in instrument-specific credit risk\n(\n9\n)\n\u2014\n\n(\n9\n)\n346\n\n\u2014\n\n346\n\n248\n\n\u2014\n\n248\n\nOther changes in fair value\n14\n\n20\n\n(c)\n34\n\n9\n\n10\n\n(c)\n19\n\n3\n\n5\n\n(c)\n8\n\nLoans:\nChanges in instrument-specific credit risk\n541\n\n\u2014\n\n541\n\n517\n\n(\n6\n)\n(c)\n511\n\n322\n\n(\n4\n)\n(c)\n318\n\nOther changes in fair value\n463\n\n782\n\n(c)\n1,245\n\n75\n\n371\n\n(c)\n446\n\n427\n\n216\n\n(c)\n643\n\nOther assets\n47\n\n(\n3\n)\n(d)\n44\n\n63\n\n\u2014\n\n63\n\n282\n\n(\n4\n)\n(d)\n278\n\nDeposits\n(a)\n(\n1,839\n)\n\u2014\n\n(\n1,839\n)\n(\n3,398\n)\n\u2014\n\n(\n3,398\n)\n(\n2,582\n)\n\u2014\n\n(\n2,582\n)\nFederal funds purchased and securities loaned or sold under repurchase agreements\n(\n26\n)\n\u2014\n\n(\n26\n)\n(\n12\n)\n\u2014\n\n(\n12\n)\n(\n121\n)\n\u2014\n\n(\n121\n)\nShort-term borrowings\n(a)\n\n(\n1,405\n)\n\u2014\n\n(\n1,405\n)\n(\n922\n)\n\u2014\n\n(\n922\n)\n(\n567\n)\n\u2014\n\n(\n567\n)\nTrading liabilities\n(\n31\n)\n\u2014\n\n(\n31\n)\n(\n1\n)\n\u2014\n\n(\n1\n)\n(\n24\n)\n\u2014\n\n(\n24\n)\nOther liabilities\n(\n5\n)\n\u2014\n\n(\n5\n)\n(\n11\n)\n\u2014\n\n(\n11\n)\n(\n16\n)\n\u2014\n\n(\n16\n)\nLong-term debt\n(a)(b)\n(\n7,112\n)\n(\n4\n)\n(c)(d)\n(\n7,116\n)\n(\n2,711\n)\n(\n6\n)\n(c)(d)\n(\n2,717\n)\n(\n5,875\n)\n(\n78\n)\n(c)(d)\n(\n5,953\n)\n(a)\nUnrealized gains/(losses) due to instrument-specific credit risk (DVA) for liabilities for which the fair value option has been elected are recorded in OCI, while realized gains/(losses) are recorded in principal transactions revenue. Realized gains/(losses) due to instrument-specific credit risk recorded in principal transactions revenue were not material for the years ended December\u00a031, 2025, 2024 and 2023.\n(b)\nLong-term debt measured at fair value predominantly relates to structured notes. Although the risk associated with the structured notes is actively managed, the gains/(losses) reported in this table do not include the income statement impact of the risk management instruments used to manage such risk.\n(c)\nReported in mortgage fees and related income.\n(d)\nReported in other income.\n(e)\nChanges in fair value exclude contractual interest, which is included in interest income and interest expense for all instruments other than certain hybrid financial instruments in CIB. Refer to Note 7 for further information regarding interest income and interest expense.\nJPMorgan Chase & Co./2025 Form 10-K\n197\nNotes to consolidated financial statements\nDetermination of instrument-specific credit risk for items for which the fair value option was elected\nThe following describes how the gains and losses that are attributable to changes in instrument-specific credit risk, were determined.\n\u2022\nLoans and lending-related commitments: For floating-rate instruments, all changes in value are attributed to instrument-specific credit risk. For fixed-rate instruments, an allocation of the changes in value for the period is made between those changes in value that are interest rate-related and changes in value that are credit-related. Allocations are generally based on an analysis of borrower-specific credit spread and recovery information,\nwhere available, or benchmarking to similar entities or industries.\n\u2022\nLong-term debt: Changes in value attributable to instrument-specific credit risk were derived principally from observable changes in the Firm\u2019s credit spread as observed in the bond market.\n\u2022\nSecurities financing agreements: Generally, for these types of agreements, there is a requirement that collateral be maintained with a market value equal to or in excess of the principal amount loaned; as a result, there would be no adjustment or an immaterial adjustment for instrument-specific credit risk related to these agreements.\nDifference between aggregate fair value and aggregate remaining contractual principal balance outstanding\nThe following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding as of December\u00a031, 2025 and 2024, for loans, long-term debt and long-term beneficial interests for which the fair value option has been elected.\n2025\n2024\nDecember 31, (in millions)\nContractual principal outstanding\nFair value\nFair value over/(under) contractual principal outstanding\nContractual principal outstanding\nFair value\nFair value over/(under) contractual principal outstanding\nLoans\nNonaccrual loans\nLoans reported as trading assets\n$\n3,443\n\n$\n545\n\n$\n(\n2,898\n)\n$\n3,429\n\n$\n464\n\n$\n(\n2,965\n)\nLoans\n1,994\n\n1,518\n\n(\n476\n)\n1,711\n\n1,492\n\n(\n219\n)\nSubtotal\n5,437\n\n2,063\n\n(\n3,374\n)\n5,140\n\n1,956\n\n(\n3,184\n)\n90 or more days past due and government guaranteed\nLoans\n(a)\n152\n\n144\n\n(\n8\n)\n50\n\n45\n\n(\n5\n)\nAll other performing loans\n(b)\nLoans reported as trading assets\n14,852\n\n12,380\n\n(\n2,472\n)\n12,171\n\n10,852\n\n(\n1,319\n)\nLoans\n(c)\n68,802\n\n69,022\n\n220\n\n40,342\n\n39,813\n\n(\n529\n)\nSubtotal\n83,654\n\n81,402\n\n(\n2,252\n)\n52,513\n\n50,665\n\n(\n1,848\n)\nTotal loans\n$\n89,243\n\n$\n83,609\n\n$\n(\n5,634\n)\n$\n57,703\n\n$\n52,666\n\n$\n(\n5,037\n)\nLong-term debt\nPrincipal-protected debt\n$\n73,984\n\n(e)\n$\n63,770\n\n$\n(\n10,214\n)\n$\n57,414\n\n(e)\n$\n47,780\n\n$\n(\n9,634\n)\nNonprincipal-protected debt\n(d)\nNA\n70,789\n\nNA\nNA\n53,000\n\nNA\nTotal long-term debt\nNA\n$\n134,559\n\nNA\nNA\n$\n100,780\n\nNA\nLong-term beneficial interests\nNonprincipal-protected debt\n(d)\nNA\n$\n5\n\nNA\nNA\n$\n1\n\nNA\nTotal long-term beneficial interests\nNA\n$\n5\n\nNA\nNA\n$\n1\n\nNA\n(a)\nThese balances are excluded from nonaccrual loans as the loans are insured and/or guaranteed by U.S. government agencies.\n(b)\nThere were\nno\n performing loans that were ninety days or more past due as of December\u00a031, 2025 and 2024.\n(c)\nIncludes loans insured and/or guaranteed by U.S. government agencies less than 90 days past due.\n(d)\nRemaining contractual principal is not applicable to nonprincipal-protected structured notes and long-term beneficial interests. Unlike principal-protected structured notes and long-term beneficial interests, for which the Firm is obligated to return a stated amount of principal at maturity, nonprincipal-protected structured notes and long-term beneficial interests do not obligate the Firm to return a stated amount of principal at maturity, but for structured notes to return an amount based on the performance of an underlying variable or derivative feature embedded in the note. However, investors are exposed to the credit risk of the Firm as issuer for both nonprincipal-protected and principal-protected notes.\n(e)\nWhere the Firm issues principal-protected zero-coupon or discount notes, the balance reflects the contractual principal payment at maturity or, if applicable, the contractual principal payment at the Firm\u2019s next call date.\nAt December\u00a031, 2025 and 2024, the contractual amount of lending-related commitments for which the fair value option was elected was $\n18.9\n billion and $\n12.2\n billion, respectively, with a corresponding fair value of $\n42\n million and $\n50\n million, respectively. Refer to Note 28 for further information regarding off-balance sheet lending-related financial instruments.\n198\nJPMorgan Chase & Co./2025 Form 10-K\nStructured note products by balance sheet classification and risk component\nThe following table presents the fair value of structured notes, by balance sheet classification and the primary risk type.\nDecember 31, 2025\nDecember 31, 2024\n(in millions)\nLong-term debt\nShort-term  borrowings\nDeposits\nTotal\nLong-term debt\nShort-term  borrowings\nDeposits\nTotal\nRisk exposure\nInterest rate\n$\n61,398\n\n$\n3,273\n\n$\n17,184\n\n$\n81,855\n\n$\n46,220\n\n$\n1,065\n\n$\n28,871\n\n$\n76,156\n\nCredit\n8,677\n\n817\n\n\u2014\n\n9,494\n\n6,213\n\n1,242\n\n\u2014\n\n7,455\n\nForeign exchange\n2,617\n\n606\n\n448\n\n3,671\n\n2,309\n\n1,058\n\n416\n\n3,783\n\nEquity\n55,890\n\n9,978\n\n3,095\n\n68,963\n\n44,149\n\n7,881\n\n2,986\n\n55,016\n\nCommodity\n828\n\n154\n\n\u2014\n\n(a)\n982\n\n1,331\n\n62\n\n1\n\n(a)\n1,394\n\nTotal structured notes\n$\n129,410\n\n$\n14,828\n\n$\n20,727\n\n$\n164,965\n\n$\n100,222\n\n$\n11,308\n\n$\n32,274\n\n$\n143,804\n\n(a)\nExcludes deposits linked to precious metals for which the fair value option has not been elected of $\n2.8\n billion and $\n869\n million for the years ended December 31, 2025 and 2024, respectively.\nJPMorgan Chase & Co./2025 Form 10-K\n199\nNotes to consolidated financial statements\nNote 4 \u2013\nCredit risk concentrations\nConcentrations of credit risk arise when a number of clients, counterparties or customers are engaged in similar business activities or activities in the same geographic region, or when they have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions.\nJPMorganChase regularly monitors various segments of its credit portfolios to assess potential credit risk concentrations and to obtain additional collateral when deemed necessary and permitted under the Firm\u2019s agreements. Senior management is significantly involved in the credit approval and review process, and risk levels are adjusted as needed to reflect the Firm\u2019s risk appetite.\nIn the Firm\u2019s consumer portfolio, concentrations are managed primarily by product and by U.S. geographic region, with a key focus on trends and concentrations at the portfolio level, where potential credit risk concentrations can be remedied through changes in underwriting policies and portfolio guidelines.\n Refer to Note\n12\n\nfor additional information on the geographic composition of the Firm\u2019s consumer loan portfolios. In the wholesale portfolio, credit risk concentrations are evaluated primarily by industry and monitored regularly on both an aggregate portfolio level and on an individual client or counterparty basis.\nThe Firm\u2019s wholesale exposure is managed through loan syndications and participations, loan sales, securitizations, credit derivatives, master netting agreements, collateral and other risk-reduction techniques. Refer to Note 12 for additional information on loans.\nThe Firm does not believe that its exposure to any particular loan product or industry segment results in a significant concentration of credit risk.\nTerms of loan products and collateral coverage are included in the Firm\u2019s assessment when extending credit and establishing its allowance for credit losses. Refer to Note 13 for additional information on the allowance for credit losses.\n200\nJPMorgan Chase & Co./2025 Form 10-K\nThe table below presents both on\u2013balance sheet and off\u2013balance sheet consumer and wholesale credit exposure by the Firm\u2019s\nthree\n credit portfolio segments as of December\u00a031, 2025 and 2024. The wholesale industry of risk category is generally based on the client or counterparty\u2019s primary business activity.\n2025\n2024\nDecember 31,\n(in millions)\nCredit exposure\n(h)\nOn-balance sheet\nOff-balance sheet\n(i)\nCredit exposure\n(h)\nOn-balance sheet\nOff-balance sheet\n(i)\nLoans\nDerivatives\nLoans\nDerivatives\nConsumer, excluding credit card\n$\n445,845\n\n$\n402,258\n\n$\n\u2014\n\n$\n43,587\n\n$\n437,654\n\n$\n392,810\n\n$\n\u2014\n$\n44,844\n\nCredit card\n(a)\n1,425,563\n\n247,797\n\n\u2014\n\n1,177,766\n\n(j)\n1,234,171\n\n232,860\n\n\u2014\n1,001,311\n\nTotal consumer\n(a)\n1,871,408\n\n650,055\n\n\u2014\n\n1,221,353\n\n1,671,825\n\n625,670\n\n\u2014\n1,046,155\n\nWholesale\n(b)\nReal Estate\n224,858\n\n174,177\n\n477\n\n50,204\n\n207,050\n\n169,506\n\n310\n\n37,234\n\nIndividuals and Individual Entities\n(c)\n167,700\n\n154,674\n\n1,079\n\n11,947\n\n144,145\n\n130,317\n\n1,259\n\n12,569\n\nAsset Managers\n152,848\n\n73,660\n\n14,715\n\n64,473\n\n135,541\n\n58,720\n\n15,695\n\n61,126\n\nConsumer & Retail\n133,945\n\n49,113\n\n2,235\n\n82,597\n\n129,815\n\n46,509\n\n1,608\n\n81,698\n\nTechnology, Media & Telecommunications\n97,816\n\n26,005\n\n1,986\n\n69,825\n\n84,716\n\n21,449\n\n2,448\n\n60,819\n\nIndustrials\n80,606\n\n26,128\n\n1,146\n\n53,332\n\n72,530\n\n24,011\n\n2,035\n\n46,484\n\nBanks & Finance Companies\n75,653\n\n54,841\n\n2,697\n\n18,115\n\n61,287\n\n40,239\n\n3,890\n\n17,158\n\nHealthcare\n72,218\n\n21,849\n\n807\n\n49,562\n\n64,224\n\n23,243\n\n616\n\n40,365\n\nUtilities\n39,005\n\n6,565\n\n2,585\n\n29,855\n\n35,871\n\n6,172\n\n2,631\n\n27,068\n\nOil & Gas\n36,497\n\n8,668\n\n524\n\n27,305\n\n31,724\n\n7,226\n\n1,153\n\n23,345\n\nAutomotive\n35,984\n\n17,303\n\n192\n\n18,489\n\n34,336\n\n17,696\n\n794\n\n15,846\n\nState & Municipal Govt\n(d)\n32,484\n\n16,931\n\n523\n\n15,030\n\n35,039\n\n19,279\n\n372\n\n15,388\n\nInsurance\n25,031\n\n3,202\n\n8,532\n\n13,297\n\n24,267\n\n2,533\n\n9,703\n\n12,031\n\nChemicals & Plastics\n23,790\n\n6,479\n\n350\n\n16,961\n\n20,782\n\n6,176\n\n267\n\n14,339\n\nTransportation\n20,861\n\n5,693\n\n1,027\n\n14,141\n\n17,019\n\n5,380\n\n769\n\n10,870\n\nMetals & Mining\n17,767\n\n4,828\n\n1,587\n\n11,352\n\n15,860\n\n4,425\n\n564\n\n10,871\n\nCentral Govt\n15,164\n\n6,474\n\n4,514\n\n4,176\n\n13,862\n\n4,715\n\n6,285\n\n2,862\n\nSecurities Firms\n7,966\n\n1,115\n\n3,051\n\n3,800\n\n9,443\n\n1,878\n\n3,197\n\n4,368\n\nFinancial Markets Infrastructure\n5,734\n\n66\n\n3,543\n\n2,125\n\n4,446\n\n16\n\n2,410\n\n2,020\n\nAll other\n(e)\n180,171\n\n134,596\n\n6,207\n\n39,368\n\n140,873\n\n100,906\n\n4,961\n\n35,006\n\nSubtotal\n1,446,098\n\n792,367\n\n57,777\n\n595,954\n\n1,282,830\n\n690,396\n\n60,967\n\n531,467\n\nLoans held-for-sale and loans at fair value\n51,007\n\n51,007\n\n\u2014\n\n\u2014\n\n31,922\n\n31,922\n\n\u2014\n\u2014\nReceivables from customers\n(f)\n47,336\n\n\u2014\n\n\u2014\n\n\u2014\n\n51,929\n\n\u2014\n\u2014\n\u2014\nTotal wholesale\n1,544,441\n\n843,374\n\n57,777\n\n595,954\n\n1,366,681\n\n722,318\n\n60,967\n\n531,467\n\nTotal exposure\n(g)\n$\n3,415,849\n\n$\n1,493,429\n\n$\n57,777\n\n$\n1,817,307\n\n$\n3,038,506\n\n$\n1,347,988\n\n$\n60,967\n\n$\n1,577,622\n\n(a)\nAlso includes commercial card lending-related commitments primarily in CIB.\n(b)\nThe industry rankings presented in the table as of December\u00a031, 2024, are based on the industry rankings of the corresponding exposures as of December\u00a031, 2025, not actual rankings of such exposures as of December\u00a031, 2024.\n(c)\nIndividuals and Individual Entities predominantly consists of Global Private Bank clients within AWM and J.P. Morgan Wealth Management within CCB, and includes exposure to personal investment companies and personal and testamentary trusts.\n(d)\nIn addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at December\u00a031, 2025 and 2024, noted above, the Firm held: $\n6.1\n billion of trading assets at both periods; $\n20.2\n billion and $\n17.9\n billion, respectively, of AFS securities; and\n$\n8.6\n billion\n and\n$\n9.3\n billion\n, respectively, of HTM securities, issued by U.S. state and municipal governments. Refer to Note 2 and Note 10 for further information.\n(e)\nAll other includes: SPEs and Private\n education and civic organizations, representing approximatel\ny\n95\n% and\n5\n%, respectively, at December\u00a031, 2025, and\n94\n% and\n6\n%, respectively, at December 31,\n2024. Refer to Note 14 for more information on exposures to SPEs.\n(f)\nReceivables from customers reflect held-for-investment margin loans to brokerage clients in CIB, CCB and AWM that are collateralized by assets maintained in the clients\u2019 brokerage accounts (including cash on deposit, and primarily liquid and readily marketable debt or equity securities).\n(g)\nExcludes cash placed with banks of $\n333.8\n billion and $\n459.2\n billion, at December\u00a031, 2025 and 2024, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.\n(h)\nCredit exposure is net of risk participations and excludes the benefit of credit derivatives and credit-related notes used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables.\n(i)\nRepresents lending-related financial instruments.\n(j)\nOn January 7, 2026, JPMorganChase announced that Chase will become the new issuer of Apple Card. The Firm entered into a forward purchase commitment on December 30, 2025 to acquire the Apple credit card portfolio, with an expected closing in approximately\n24\n months (the \u201cApple Card transaction\u201d). At December 31, 2025, includes estimated total credit exposure related to the Apple Card transaction at the time that the transaction is expected to close of approximately $\n104\n billion, including approximately $\n23\n billion of estimated drawn loans.\nJPMorgan Chase & Co./2025 Form 10-K\n201\nNotes to consolidated financial statements\nNote 5 \u2013\nDerivative instruments\nDerivative contracts derive their value from underlying asset prices, indices, reference rates, other inputs or a combination of these factors and may expose counterparties to risks and rewards of an underlying asset or liability without having to initially invest in, own or exchange the asset or liability. JPMorganChase makes markets in derivatives for clients and also uses derivatives to hedge or manage its own risk exposures. Predominantly all of the Firm\u2019s derivatives are entered into for market-making or risk management purposes.\nMarket-making derivatives\nThe majority of the Firm\u2019s derivatives are entered into for market-making purposes. Clients use derivatives to mitigate or modify interest rate, credit, foreign exchange, equity and commodity risks. The Firm actively manages the risks from its exposure to these derivatives by entering into other derivative contracts or by purchasing or selling other financial instruments that partially or fully offset the exposure from client derivatives.\nRisk management derivatives\nThe Firm manages certain market and credit risk exposures using derivative instruments, including derivatives in hedge accounting relationships and other derivatives that are used to manage risks associated with specified assets and liabilities.\nThe Firm generally uses interest rate derivatives to manage the risk associated with changes in interest rates. Fixed-rate assets and liabilities appreciate or depreciate in market value as interest rates change. Similarly, interest income and expense increase or decrease as a result of variable-rate assets and liabilities resetting to current market rates, and as a result of the repayment and subsequent origination or issuance of fixed-rate assets and liabilities at current market rates. Gains and losses on the derivative instruments related to these assets and liabilities are expected to substantially offset this variability.\nForeign currency derivatives are used to manage the foreign exchange risk associated with certain foreign currency\u2013denominated (i.e., non-U.S. dollar) assets and liabilities and forecasted transactions, as well as the Firm\u2019s net investments in certain non-U.S. subsidiaries or branches whose functional currencies are not the U.S. dollar. As a result of fluctuations in foreign currencies, the U.S. dollar\u2013equivalent values of the foreign currency\u2013denominated assets and liabilities or the forecasted revenues or expenses increase or decrease. Gains or losses on the derivative instruments related to these foreign currency\u2013denominated assets or liabilities, or forecasted transactions, are expected to substantially offset this variability.\nCommodities derivatives are used to manage the price risk of certain commodities inventories. Gains or losses on these derivative instruments are expected to\nsubstantially offset the depreciation or appreciation of the related inventory.\nCredit derivatives are used to manage the counterparty credit risk associated with loans and lending-related commitments. Credit derivatives compensate the purchaser when the entity referenced in the contract experiences a credit event, such as bankruptcy or a failure to pay an obligation when due. Credit derivatives primarily consist of CDS. Refer to the Credit derivatives section on pages 215\u2013217 of this Note for a further discussion of credit derivatives.\nRefer to the risk management derivatives gains and losses table on page 214 and the hedge accounting gains and losses tables on pages 211\u2013214 of this Note for more information about risk management derivatives.\nDerivative counterparties and settlement types\nThe Firm enters into OTC derivatives, which are negotiated and settled bilaterally with the derivative counterparty. The Firm also enters into, as principal, certain ETD such as futures and options, and OTC-cleared derivative contracts with CCPs. ETD contracts are generally standardized contracts traded on an exchange and cleared by the CCP, which is the Firm\u2019s counterparty from the inception of the transactions. OTC-cleared derivatives are traded on a bilateral basis and then novated to the CCP for clearing.\nDerivative clearing services\nThe Firm provides clearing services for clients in which the Firm acts as a clearing member at certain exchanges and clearing houses. The Firm does not reflect the clients\u2019 derivative contracts in its Consolidated Financial Statements. Refer to Note 28 for further information on the Firm\u2019s clearing services.\nAccounting for derivatives\nAll free-standing derivatives that the Firm executes for its own account are required to be recorded on the Consolidated balance sheets at fair value.\nAs permitted under U.S. GAAP, the Firm nets derivative assets and liabilities, and the related cash collateral receivables and payables, when a legally enforceable master netting agreement exists between the Firm and the derivative counterparty. Refer to Note 1 for further discussion of the offsetting of assets and liabilities. The accounting for changes in value of a derivative depends on whether or not the transaction has been designated and qualifies for hedge accounting. Derivatives that are not designated as hedges are reported and measured at fair value through earnings. The tabular disclosures on pages 206\u2013214 of this Note provide additional information on the amount of, and reporting for, derivative assets, liabilities, gains and losses. Refer to Notes 2 and 3 for a further discussion of derivatives embedded in structured notes.\n202\nJPMorgan Chase & Co./2025 Form 10-K\nDerivatives designated as hedges\nThe Firm applies hedge accounting to certain derivatives executed for risk management purposes \u2013 generally interest rate, foreign exchange and commodity derivatives. However, JPMorganChase does not seek to apply hedge accounting to all of the derivatives associated with the Firm\u2019s risk management activities. For example, the Firm does not apply hedge accounting to purchased CDS used to manage the credit risk of loans and lending-related commitments, because of the difficulties in qualifying such contracts as hedges. For the same reason, the Firm does not apply hedge accounting to certain interest rate, foreign exchange, and commodity derivatives used for risk management purposes.\nTo qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, for a derivative to be designated as a hedge, the risk management objective and strategy must be documented. Hedge documentation must identify the derivative hedging instrument, the asset or liability or forecasted transaction and type of risk to be hedged, and how the effectiveness of the derivative is assessed prospectively and retrospectively. To assess effectiveness, the Firm uses statistical methods such as regression analysis, nonstatistical methods such as dollar-value comparisons of the change in the fair value of the derivative to the change in the fair value or cash flows of the hedged item, and qualitative comparisons of critical terms and the evaluation of any changes in those terms. The extent to which a derivative has been, and is expected to continue to be, highly effective at offsetting changes in the fair value or cash flows of the hedged item must be assessed and documented at least quarterly. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued.\nThere are three types of hedge accounting designations: fair value hedges, cash flow hedges and net investment hedges. JPMorganChase uses fair value hedges primarily to hedge fixed-rate long-term debt, AFS securities and certain commodities inventories. For qualifying fair value hedges, the changes in the fair value of the derivative, and in the value of the hedged item for the risk being hedged, are recognized in earnings. Certain amounts excluded from the assessment of effectiveness are recorded in OCI and recognized in earnings over the life of the derivative. If the hedge relationship is terminated, then the adjustment to the hedged item continues to be reported as part of the basis of the hedged item and, for interest-bearing financial instruments, is amortized to earnings as a yield adjustment. Derivative amounts affecting earnings are recognized consistent with the classification of the hedged item \u2013 primarily net interest income and principal transactions revenue.\nThe Firm employs the portfolio layer method to manage the interest rate risk of portfolios of fixed-rate assets. Throughout the life of the open hedge, basis adjustments are maintained at the portfolio level and are only allocated to individual assets under certain circumstances. These include instances where the portfolio amount falls below the hedged layer amounts, or in cases of voluntary de-designation.\nJPMorganChase uses cash flow hedges primarily to hedge the exposure to variability in forecasted cash flows from floating-rate assets and liabilities and foreign currency\u2013denominated revenue and expense. For qualifying cash flow hedges, changes in the fair value of the derivative are recorded in OCI and recognized in earnings as the hedged item affects earnings. Derivative amounts affecting earnings are recognized consistent with the classification of the hedged item \u2013 primarily noninterest revenue, net interest income and compensation expense. If the hedge relationship is terminated, then the change in value of the derivative recorded in AOCI is recognized in earnings when the cash flows that were hedged affect earnings. For hedge relationships that are discontinued because a forecasted transaction is expected to not occur according to the original hedge forecast, any related derivative values recorded in AOCI are immediately recognized in earnings.\nJPMorganChase uses net investment hedges to protect the value of the Firm\u2019s net investments in certain non-U.S. subsidiaries or branches whose functional currencies are not the U.S. dollar. For qualifying net investment hedges, changes in the fair value of the derivatives due to changes in spot foreign exchange rates are recorded in OCI as translation adjustments. Amounts excluded from the assessment of effectiveness are recorded directly in earnings.\n\nJPMorgan Chase & Co./2025 Form 10-K\n203\nNotes to consolidated financial statements\nThe following table outlines the Firm\u2019s primary uses of derivatives and the related hedge accounting designation or disclosure category.\nType of Derivative\nUse of Derivative\nDesignation and disclosure\nAffected segment or unit\nPage reference\nManage specifically identified risk exposures in qualifying hedge accounting relationships:\n\u2022\nInterest rate\nHedge fixed rate assets and liabilities\nFair value hedge\nCorporate\n211-212\n\u2022\nInterest rate\nHedge floating-rate assets and liabilities\nCash flow hedge\nCorporate\n213\n\u2022\nForeign exchange\nHedge foreign currency-denominated assets and liabilities\nFair value hedge\nCorporate\n211-212\n\u2022\nForeign exchange\nHedge foreign currency-denominated forecasted revenue and expense\nCash flow hedge\nCorporate\n213\n\u2022\nForeign exchange\nHedge the value of the Firm\u2019s investments in non-U.S. dollar functional currency entities\nNet investment hedge\nCorporate\n214\n\u2022\nCommodity\nHedge commodity inventory\nFair value hedge\nCIB, AWM\n211-212\nManage specifically identified risk exposures not designated in qualifying hedge accounting relationships:\n\u2022\nInterest rate\nManage the risk associated with mortgage commitments, warehouse loans and MSRs\nSpecified risk management\nCCB\n214\n\u2022\nCredit\nManage the credit risk associated with wholesale lending exposures\nSpecified risk management\nCIB, AWM\n214\n\u2022\nInterest rate and foreign exchange\nManage the risk associated with certain other specified assets and liabilities\nSpecified risk management\nCorporate, CIB\n214\nMarket-making derivatives and other activities:\n\u2022\nVarious\nMarket-making and related risk management\nMarket-making and other\nCIB\n214\n\u2022\nVarious\nOther derivatives\nMarket-making and other\nCIB, AWM, Corporate\n214\n204\nJPMorgan Chase & Co./2025 Form 10-K\nNotional amount of derivative contracts\nThe following table summarizes the notional amount of free-standing derivative contracts outstanding as of December\u00a031, 2025 and 2024.\nNotional amounts\n(b)\nDecember 31, (in billions)\n2025\n2024\nInterest rate contracts\nSwaps\n$\n19,056\n\n$\n20,437\n\nFutures and forwards\n3,305\n\n3,067\n\nWritten options\n3,775\n\n3,067\n\nPurchased options\n3,400\n\n3,089\n\nTotal interest rate contracts\n29,536\n\n29,660\n\nCredit derivatives\n(a)\n1,381\n\n1,191\n\nForeign exchange contracts\nCross-currency swaps\n5,476\n\n4,509\n\nSpot, futures and forwards\n8,187\n\n7,005\n\nWritten options\n979\n\n1,015\n\nPurchased options\n953\n\n984\n\nTotal foreign exchange contracts\n15,595\n\n13,513\n\nEquity contracts\nSwaps\n1,147\n\n850\n\nFutures and forwards\n196\n\n206\n\nWritten options\n1,118\n\n914\n\nPurchased options\n971\n\n788\n\nTotal equity contracts\n3,432\n\n2,758\n\nCommodity contracts\nSwaps\n189\n\n148\n\nSpot, futures and forwards\n270\n\n191\n\nWritten options\n119\n\n137\n\nPurchased options\n120\n\n125\n\nTotal commodity contracts\n698\n\n601\n\nTotal derivative notional amounts\n$\n50,642\n\n$\n47,723\n\n(a)\nRefer to the Credit derivatives discussion on pages 215\u2013217 for more information on volumes and types of credit derivative contracts.\n(b)\nRepresents the sum of gross long and gross short third-party notional derivative contracts.\nWhile the notional amounts disclosed above give an indication of the volume of the Firm\u2019s derivatives activity, the notional amounts significantly exceed, in the Firm\u2019s view, the possible losses that could arise from such transactions. For most derivative contracts, the notional amount is not exchanged; it is simply a reference amount used to calculate payments.\n\nJPMorgan Chase & Co./2025 Form 10-K\n205\nNotes to consolidated financial statements\nImpact of derivatives on the Consolidated balance sheets\nThe following table summarizes information on derivative receivables and payables (before and after netting adjustments) that are reflected on the Firm\u2019s Consolidated balance sheets as of December\u00a031, 2025 and 2024, by accounting designation (e.g., whether the derivatives were designated in qualifying hedge accounting relationships or not) and contract type.\nFree-standing derivative receivables and payables\n(a)\nGross derivative receivables\nGross derivative payables\nDecember 31, 2025\n(in millions)\nNot designated as hedges\nDesignated as hedges\nTotal derivative receivables\nNet derivative receivables\n(b)\nNot designated as hedges\nDesignated as hedges\nTotal derivative payables\nNet derivative payables\n(b)\nTrading assets and liabilities\nInterest rate\n$\n281,884\n\n$\n\u2014\n\n$\n281,884\n\n$\n25,401\n\n$\n257,582\n\n$\n1\n\n$\n257,583\n\n$\n7,461\n\nCredit\n13,024\n\n\u2014\n\n13,024\n\n479\n\n17,628\n\n\u2014\n\n17,628\n\n2,016\n\nForeign exchange\n182,887\n\n349\n\n183,236\n\n19,355\n\n177,158\n\n983\n\n178,141\n\n14,833\n\nEquity\n97,723\n\n\u2014\n\n97,723\n\n5,867\n\n117,017\n\n\u2014\n\n117,017\n\n14,806\n\nCommodity\n29,932\n\n583\n\n30,515\n\n6,675\n\n24,744\n\n1,625\n\n26,369\n\n7,213\n\nTotal fair value of trading assets and liabilities\n$\n605,450\n\n$\n932\n\n$\n606,382\n\n$\n57,777\n\n$\n594,129\n\n$\n2,609\n\n$\n596,738\n\n$\n46,329\n\nGross derivative receivables\nGross derivative payables\nDecember 31, 2024\n(in millions)\nNot designated as hedges\nDesignated as hedges\nTotal derivative receivables\nNet derivative receivables\n(b)\nNot designated as hedges\nDesignated as hedges\nTotal derivative payables\nNet\nderivative payables\n(b)\nTrading assets and liabilities\nInterest rate\n$\n290,734\n\n$\n\u2014\n\n$\n290,734\n\n$\n24,945\n\n$\n274,226\n\n$\n2\n\n$\n274,228\n\n$\n9,239\n\nCredit\n11,087\n\n\u2014\n\n11,087\n\n814\n\n13,796\n\n\u2014\n\n13,796\n\n1,898\n\nForeign exchange\n261,035\n\n1,885\n\n262,920\n\n25,312\n\n253,289\n\n1,278\n\n254,567\n\n15,597\n\nEquity\n85,220\n\n\u2014\n\n85,220\n\n5,285\n\n96,139\n\n\u2014\n\n96,139\n\n8,648\n\nCommodity\n15,490\n\n136\n\n15,626\n\n4,611\n\n14,415\n\n73\n\n14,488\n\n4,279\n\nTotal fair value of trading assets and liabilities\n$\n663,566\n\n$\n2,021\n\n$\n665,587\n\n$\n60,967\n\n$\n651,865\n\n$\n1,353\n\n$\n653,218\n\n$\n39,661\n\n(a)\nBalances exclude structured notes for which the fair value option has been elected. Refer to Note 3 for further information.\n(b)\nAs permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral receivables and payables when a legally enforceable master netting agreement exists.\n206\nJPMorgan Chase & Co./2025 Form 10-K\nDerivatives netting\nThe following tables present, as of December\u00a031, 2025 and 2024, gross and net derivative receivables and payables by contract and settlement type. Derivative receivables and payables, as well as the related cash collateral from the same counterparty, have been netted on the Consolidated balance sheets where the Firm has obtained an appropriate legal opinion with respect to the master netting agreement. Where such a legal opinion has not been either sought or obtained, amounts are not eligible for netting on the Consolidated balance sheets, and those derivative receivables and payables are shown separately in the tables.\nIn addition to the cash collateral received and transferred that is presented on a net basis with derivative receivables and payables, the Firm receives and transfers additional collateral (financial instruments and cash). These amounts mitigate counterparty credit risk associated with the Firm\u2019s derivative instruments, but are not eligible for net presentation:\n\u2022\ncollateral that consists of liquid securities and other cash collateral held at third-party custodians, which\u00a0are shown separately as \"Collateral not nettable on the Consolidated balance sheets\" in the tables, up to the fair value exposure amount. For the purpose of this disclosure, the definition of liquid securities is consistent with the definition of high quality liquid assets as defined in the LCR rule;\n\u2022\nthe amount of collateral held or transferred that exceeds the fair value exposure at the individual counterparty level, as of the date presented, which is excluded from the tables; and\n\u2022\ncollateral held or transferred that relates to derivative receivables or payables where an appropriate legal opinion has not been either sought or obtained with respect to the master netting agreement, which is excluded from the tables.\nJPMorgan Chase & Co./2025 Form 10-K\n207\nNotes to consolidated financial statements\n2025\n2024\nDecember 31, (in millions)\nGross derivative receivables\nAmounts netted on the Consolidated balance sheets\nNet derivative receivables\nGross derivative receivables\nAmounts netted on the Consolidated balance sheets\nNet\nderivative receivables\nU.S. GAAP nettable derivative receivables\nInterest rate contracts:\nOver-the-counter (\u201cOTC\u201d)\n$\n162,300\n\n$\n(\n138,107\n)\n$\n24,193\n\n$\n158,202\n\n$\n(\n134,791\n)\n$\n23,411\n\nOTC\u2013cleared\n118,377\n\n(\n118,303\n)\n74\n\n130,989\n\n(\n130,810\n)\n179\n\nExchange-traded\n(a)\n128\n\n(\n73\n)\n55\n\n190\n\n(\n188\n)\n2\n\nTotal interest rate contracts\n280,805\n\n(\n256,483\n)\n24,322\n\n289,381\n\n(\n265,789\n)\n23,592\n\nCredit contracts:\nOTC\n9,723\n\n(\n9,433\n)\n290\n\n8,680\n\n(\n8,030\n)\n650\n\nOTC\u2013cleared\n3,233\n\n(\n3,112\n)\n121\n\n2,267\n\n(\n2,243\n)\n24\n\nTotal credit contracts\n12,956\n\n(\n12,545\n)\n411\n\n10,947\n\n(\n10,273\n)\n674\n\nForeign exchange contracts:\nOTC\n180,120\n\n(\n163,029\n)\n17,091\n\n259,608\n\n(\n236,931\n)\n22,677\n\nOTC\u2013cleared\n904\n\n(\n849\n)\n55\n\n685\n\n(\n677\n)\n8\n\nExchange-traded\n(a)\n21\n\n(\n3\n)\n18\n\n34\n\n\u2014\n\n34\n\nTotal foreign exchange contracts\n181,045\n\n(\n163,881\n)\n17,164\n\n260,327\n\n(\n237,608\n)\n22,719\n\nEquity contracts:\nOTC\n33,418\n\n(\n31,170\n)\n2,248\n\n33,269\n\n(\n30,742\n)\n2,527\n\nExchange-traded\n(a)\n63,168\n\n(\n60,686\n)\n2,482\n\n51,040\n\n(\n49,193\n)\n1,847\n\nTotal equity contracts\n96,586\n\n(\n91,856\n)\n4,730\n\n84,309\n\n(\n79,935\n)\n4,374\n\nCommodity contracts:\nOTC\n18,244\n\n(\n14,469\n)\n3,775\n\n8,340\n\n(\n5,848\n)\n2,492\n\nOTC\u2013cleared\n109\n\n(\n79\n)\n30\n\n126\n\n(\n84\n)\n42\n\nExchange-traded\n(a)\n9,565\n\n(\n9,292\n)\n273\n\n5,179\n\n(\n5,083\n)\n96\n\nTotal commodity contracts\n27,918\n\n(\n23,840\n)\n4,078\n\n13,645\n\n(\n11,015\n)\n2,630\n\nDerivative receivables with appropriate legal opinion\n599,310\n\n(\n548,605\n)\n50,705\n\n(d)\n658,609\n\n(\n604,620\n)\n53,989\n\n(d)\nDerivative receivables where an appropriate legal opinion has not been either sought or obtained\n7,072\n\n7,072\n\n6,978\n\n6,978\n\nTotal derivative receivables recognized on the Consolidated balance sheets\n$\n606,382\n\n$\n57,777\n\n$\n665,587\n\n$\n60,967\n\nCollateral not nettable on the Consolidated balance sheets\n(b)(c)\n(\n28,891\n)\n(\n28,160\n)\nNet amounts\n$\n28,886\n\n$\n32,807\n\n208\nJPMorgan Chase & Co./2025 Form 10-K\n2025\n2024\nDecember 31, (in millions)\nGross derivative payables\nAmounts netted on the Consolidated balance sheets\nNet derivative payables\nGross derivative payables\nAmounts netted on the Consolidated balance sheets\nNet\nderivative payables\nU.S. GAAP nettable derivative payables\nInterest rate contracts:\nOTC\n$\n135,045\n\n$\n(\n128,464\n)\n$\n6,581\n\n$\n138,215\n\n$\n(\n130,375\n)\n$\n7,840\n\nOTC\u2013cleared\n121,702\n\n(\n121,557\n)\n145\n\n134,555\n\n(\n134,262\n)\n293\n\nExchange-traded\n(a)\n104\n\n(\n101\n)\n3\n\n363\n\n(\n352\n)\n11\n\nTotal interest rate contracts\n256,851\n\n(\n250,122\n)\n6,729\n\n273,133\n\n(\n264,989\n)\n8,144\n\nCredit contracts:\nOTC\n14,848\n\n(\n13,196\n)\n1,652\n\n11,381\n\n(\n10,133\n)\n1,248\n\nOTC\u2013cleared\n2,446\n\n(\n2,416\n)\n30\n\n1,779\n\n(\n1,765\n)\n14\n\nTotal credit contracts\n17,294\n\n(\n15,612\n)\n1,682\n\n13,160\n\n(\n11,898\n)\n1,262\n\nForeign exchange contracts:\nOTC\n175,485\n\n(\n162,455\n)\n13,030\n\n251,860\n\n(\n238,292\n)\n13,568\n\nOTC\u2013cleared\n897\n\n(\n850\n)\n47\n\n772\n\n(\n678\n)\n94\n\nExchange-traded\n(a)\n9\n\n(\n3\n)\n6\n\n14\n\n\u2014\n\n14\n\nTotal foreign exchange contracts\n176,391\n\n(\n163,308\n)\n13,083\n\n252,646\n\n(\n238,970\n)\n13,676\n\nEquity contracts:\nOTC\n53,530\n\n(\n41,552\n)\n11,978\n\n44,394\n\n(\n38,298\n)\n6,096\n\nExchange-traded\n(a)\n61,363\n\n(\n60,659\n)\n704\n\n49,578\n\n(\n49,193\n)\n385\n\nTotal equity contracts\n114,893\n\n(\n102,211\n)\n12,682\n\n93,972\n\n(\n87,491\n)\n6,481\n\nCommodity contracts:\nOTC\n14,176\n\n(\n9,786\n)\n4,390\n\n6,918\n\n(\n5,206\n)\n1,712\n\nOTC\u2013cleared\n79\n\n(\n79\n)\n\u2014\n\n84\n\n(\n84\n)\n\u2014\n\nExchange-traded\n(a)\n9,334\n\n(\n9,291\n)\n43\n\n5,182\n\n(\n4,919\n)\n263\n\nTotal commodity contracts\n23,589\n\n(\n19,156\n)\n4,433\n\n12,184\n\n(\n10,209\n)\n1,975\n\nDerivative payables with appropriate legal opinion\n589,018\n\n(\n550,409\n)\n38,609\n\n(d)\n645,095\n\n(\n613,557\n)\n31,538\n\n(d)\nDerivative payables where an appropriate legal opinion has not been either sought or obtained\n7,720\n\n7,720\n\n8,123\n\n8,123\n\nTotal derivative payables recognized on the Consolidated balance sheets\n$\n596,738\n\n$\n46,329\n\n$\n653,218\n\n$\n39,661\n\nCollateral not nettable on the Consolidated balance sheets\n(b)(c)\n(\n18,478\n)\n(\n10,163\n)\nNet amounts\n$\n27,851\n\n$\n29,498\n\n(a)\nExchange-traded derivative balances that relate to futures contracts are settled daily.\n(b)\nIncludes liquid securities and other cash collateral held at third-party custodians related to derivative instruments where an appropriate legal opinion has been obtained. For some counterparties, the collateral amounts of financial instruments may exceed the derivative receivables and derivative payables balances. Where this is the case, the total amount reported is limited to the net derivative receivables and net derivative payables balances with that counterparty.\n(c)\nDerivative collateral relates only to OTC and OTC-cleared derivative instruments.\n(d)\nNet derivatives receivable included cash collateral netted of $\n54.7\n billion and $\n51.9\n billion at December\u00a031, 2025 and 2024, respectively. Net derivatives payable included cash collateral netted of $\n56.5\n billion and $\n60.8\n billion at December\u00a031, 2025 and 2024, respectively. Derivative cash collateral relates to OTC and OTC-cleared derivative instruments.\nJPMorgan Chase & Co./2025 Form 10-K\n209\nNotes to consolidated financial statements\nLiquidity risk and credit-related contingent features\nIn addition to the specific market risks introduced by each derivative contract type, derivatives expose JPMorganChase to credit risk \u2014 the risk that derivative counterparties may fail to meet their payment obligations under the derivative contracts and the collateral, if any, held by the Firm proves to be of insufficient value to cover the payment obligation. It is the policy of JPMorganChase to actively pursue, where possible, the use of legally enforceable master netting arrangements and collateral agreements to mitigate derivative counterparty credit risk inherent in derivative receivables.\nWhile derivative receivables expose the Firm to credit risk, derivative payables expose the Firm to liquidity risk, as the derivative contracts typically require the Firm to post cash or securities collateral with counterparties as the fair value of the contracts moves in the counterparties\u2019 favor or upon specified downgrades in the Firm\u2019s and its subsidiaries\u2019 respective credit ratings. Certain derivative contracts also provide for termination of the contract, generally upon a downgrade of either the Firm or the counterparty, at the fair value of the derivative contracts.\nThe following table shows the aggregate fair value of net derivative payables related to OTC and OTC-cleared derivatives that contain contingent collateral or termination features that may be triggered upon a ratings downgrade, and the associated collateral the Firm has posted in the normal course of business, at December\u00a031, 2025 and 2024.\nOTC and OTC-cleared derivative payables containing downgrade triggers\n(in millions)\nDecember 31, 2025\nDecember 31, 2024\nAggregate fair value of net derivative payables\n$\n19,986\n\n$\n15,371\n\nCollateral posted\n20,555\n\n15,204\n\nThe following table shows the impact of a single-notch and two-notch downgrade of the long-term issuer ratings of JPMorgan Chase & Co. and its subsidiaries, predominantly JPMorgan Chase Bank, N.A., at December\u00a031, 2025 and 2024, related to OTC and OTC-cleared derivative contracts with contingent collateral or termination features that may be triggered upon a ratings downgrade. Derivatives contracts generally require additional collateral to be posted or terminations to be triggered when the predefined rating threshold is breached. A downgrade by a single rating agency that does not result in a rating lower than a preexisting corresponding rating provided by another major rating agency will generally not result in additional collateral (except in certain instances in which additional initial margin may be required upon a ratings downgrade), nor in termination payment requirements. The liquidity impact in the table is calculated based upon a downgrade below the lowest current rating of the rating agencies referred to in the derivative contract.\nLiquidity impact of downgrade triggers on OTC and OTC-cleared derivatives\nDecember 31, 2025\nDecember 31, 2024\n(in millions)\nSingle-notch downgrade\nTwo-notch downgrade\nSingle-notch downgrade\nTwo-notch downgrade\nAmount of additional collateral to be posted upon downgrade\n(a)\n$\n28\n\n$\n124\n\n$\n119\n\n$\n1,205\n\nAmount required to settle contracts with termination triggers upon downgrade\n(b)\n15\n\n96\n\n78\n\n458\n\n(a)\nIncludes the additional collateral to be posted for initial margin.\n(b)\nAmounts represent fair values of derivative payables, and do not reflect collateral posted.\n210\nJPMorgan Chase & Co./2025 Form 10-K\nImpact of derivatives on the Consolidated statements of income\nThe following tables provide information related to gains and losses recorded on derivatives based on their hedge accounting designation or purpose.\nFair value hedge gains and losses\nThe following tables present derivative instruments, by contract type, used in fair value hedge accounting relationships, as well as pre-tax gains/(losses) recorded on such derivatives and the related hedged items for the years ended December\u00a031, 2025, 2024 and 2023, respectively. The Firm includes gains/(losses) on the hedging derivative in the same line item in the Consolidated statements of income as the related hedged item.\nGains/(losses) recorded in income\nIncome statement impact of\nexcluded components\n(e)\nOCI impact\nYear ended December 31, 2025\n(in millions)\nDerivatives\nHedged items\nIncome statement impact\nAmortization approach\nChanges in fair value\nDerivatives - Gains/(losses) recorded in OCI\n(f)\nContract type\nInterest rate\n(a)(b)\n$\n(\n88\n)\n$\n1,360\n\n$\n1,272\n\n$\n\u2014\n\n$\n1,250\n\n$\n\u2014\n\nForeign exchange\n(c)\n1,077\n\n(\n743\n)\n334\n\n(\n696\n)\n334\n\n84\n\nCommodity\n(d)\n(\n3,852\n)\n4,127\n\n275\n\n\u2014\n\n224\n\n\u2014\n\nTotal\n$\n(\n2,863\n)\n$\n4,744\n\n$\n1,881\n\n$\n(\n696\n)\n$\n1,808\n\n$\n84\n\nGains/(losses) recorded in income\nIncome statement impact of excluded components\n(e)\nOCI impact\nYear ended December 31, 2024\n(in millions)\nDerivatives\nHedged items\nIncome statement impact\nAmortization approach\nChanges in fair value\nDerivatives - Gains/(losses) recorded in OCI\n(f)\nContract type\nInterest rate\n(a)(b)\n$\n711\n\n$\n(\n65\n)\n$\n646\n\n$\n\u2014\n\n$\n699\n\n$\n\u2014\n\nForeign exchange\n(c)\n(\n177\n)\n402\n\n225\n\n(\n532\n)\n225\n\n(\n115\n)\nCommodity\n(d)\n293\n\n(\n160\n)\n133\n\n\u2014\n\n122\n\n\u2014\n\nTotal\n$\n827\n\n$\n177\n\n$\n1,004\n\n$\n(\n532\n)\n$\n1,046\n\n$\n(\n115\n)\nGains/(losses) recorded in income\nIncome statement impact of excluded components\n(e)\nOCI impact\nYear ended December 31, 2023\n(in millions)\nDerivatives\nHedged items\nIncome statement impact\nAmortization approach\nChanges in fair value\nDerivatives - Gains/(losses) recorded in OCI\n(f)\nContract type\nInterest rate\n(a)(b)\n$\n1,554\n\n$\n(\n1,248\n)\n$\n306\n\n$\n\u2014\n\n$\n157\n\n$\n\u2014\n\nForeign exchange\n(c)\n722\n\n(\n483\n)\n239\n\n(\n601\n)\n239\n\n(\n134\n)\nCommodity\n(d)\n1,227\n\n(\n706\n)\n521\n\n\u2014\n\n525\n\n\u2014\n\nTotal\n$\n3,503\n\n$\n(\n2,437\n)\n$\n1,066\n\n$\n(\n601\n)\n$\n921\n\n$\n(\n134\n)\n(a)\nPrimarily consists of hedges of the benchmark (e.g., Secured Overnight Financing Rate (\u201cSOFR\u201d)) interest rate risk of fixed-rate long-term debt and AFS securities. Gains and losses were recorded in net interest income.\n(b)\nIncludes the amortization of income/expense associated with the inception hedge accounting adjustment applied to the hedged item. Excludes the accrual of interest on interest rate swaps and the related hedged items.\n(c)\nPrimarily consists of hedges of the foreign currency risk of long-term debt and AFS securities for changes in spot foreign currency rates. Gains and losses related to the derivatives and the hedged items due to changes in foreign currency rates and the income statement impact of excluded components were recorded primarily in principal transactions revenue and net interest income.\n(d)\nConsists of overall fair value hedges of physical commodities inventories that are generally carried at the lower of cost or net realizable value (net realizable value approximates fair value). Gains and losses were recorded in principal transactions revenue.\n(e)\nThe assessment of hedge effectiveness excludes certain components of the changes in fair values of the derivatives and hedged items such as forward points on foreign exchange forward contracts, time values and cross-currency basis spreads. Excluded components may impact earnings either through amortization of the initial amount over the life of the derivative or through fair value changes recognized in the current period.\n(f)\nRepresents the change in value of amounts excluded from the assessment of effectiveness under the amortization approach, predominantly cross-currency basis spreads. The amount excluded at inception of the hedge is recognized in earnings over the life of the derivative.\nJPMorgan Chase & Co./2025 Form 10-K\n211\nNotes to consolidated financial statements\nAs of December\u00a031, 2025 and 2024, the following amounts were recorded on the Consolidated balance sheets related to certain cumulative fair value hedge basis adjustments that are expected to reverse through the income statement in future periods as an adjustment to yield.\nCarrying amount of the hedged items\n(a)(b)\nCumulative amount of fair value hedging adjustments included in the carrying amount of hedged items:\n(d)\nDecember 31, 2025\n(in millions)\nActive hedging relationships\nDiscontinued hedging relationships\n(e)\nTotal\nAssets\nInvestment securities - AFS\n$\n255,109\n\n(c)\n$\n3,693\n\n$\n(\n1,374\n)\n$\n2,319\n\nLiabilities\nLong-term debt\n$\n222,611\n\n$\n232\n\n$\n(\n8,689\n)\n$\n(\n8,457\n)\nBeneficial interests issued by consolidated VIEs\n$\n5,884\n\n$\n37\n\n$\n\u2014\n\n$\n37\n\nCarrying amount of the hedged items\n(a)(b)\nCumulative amount of fair value hedging adjustments included in the carrying amount of hedged items:\n(d)\nDecember 31, 2024\n(in millions)\nActive hedging relationships\nDiscontinued hedging relationships\n(e)\nTotal\nAssets\nInvestment securities - AFS\n$\n203,141\n\n(c)\n$\n(\n1,675\n)\n$\n(\n1,959\n)\n$\n(\n3,634\n)\nLiabilities\nLong-term debt\n$\n211,288\n\n$\n(\n3,711\n)\n$\n(\n9,332\n)\n$\n(\n13,043\n)\nBeneficial interests issued by consolidated VIEs\n$\n5,312\n\n$\n(\n30\n)\n$\n(\n5\n)\n$\n(\n35\n)\n(a)\nExcludes physical commodities with a carrying value of $\n22.9\n\u00a0billion and $\n6.2\n\u00a0billion at December 31, 2025 and 2024, respectively, to which the Firm applies fair value hedge accounting. As a result of the application of hedge accounting, these inventories are carried at fair value, thus recognizing unrealized gains and losses in current periods. Since the Firm exits these positions at fair value, there is no incremental impact to net income in future periods.\n(b)\nExcludes hedged items where only foreign currency risk is the designated hedged risk, as basis adjustments related to foreign currency hedges will not reverse through the income statement in future periods. At December 31, 2025 and 2024, the carrying amount excluded for AFS securities was $\n33.6\n\u00a0billion and $\n28.7\n\u00a0billion, respectively. At December 31, 2025 and 2024, the carrying amount excluded for long-term debt was $\n587\n million and $\n518\n million, respectively.\n(c)\nCarrying amount represents the amortized cost, net of allowance if applicable. At December 31, 2025 and 2024, the amortized cost of the portfolio layer method closed portfolios was $\n91.9\n billion and $\n72.8\n billion, of which $\n68.9\n billion and $\n41.2\n billion was designated as hedged, respectively. The amount designated as hedged is the sum of the notional amounts of all outstanding layers in each portfolio, which includes both spot starting and forward starting layers. At December 31, 2025 and 2024, the cumulative amount of basis adjustments was $(\n32\n) million and $(\n1.7\n) billion, which is comprised of $\n641\n million and $(\n1.2\n) billion for active hedging relationships, and $(\n673\n) million and $(\n566\n) million for discontinued hedging relationships, respectively. Refer to Note\n\n10 for additional information.\n(d)\nPositive (negative) amounts related to assets represent cumulative fair value hedge basis adjustments that will reduce (increase) net interest income in future periods. Positive (negative) amounts related to liabilities represent cumulative fair value hedge basis adjustments that will increase (reduce) net interest income in future periods.\n(e)\nRepresents basis adjustments existing on the balance sheet date associated with hedged items that have been de-designated from qualifying fair value hedging relationships.\n212\nJPMorgan Chase & Co./2025 Form 10-K\nCash flow hedge gains and losses\nThe following tables present derivative instruments, by contract type, used in cash flow hedge accounting relationships, and the pre-tax gains/(losses) recorded on such derivatives, for the years ended December\u00a031, 2025, 2024 and 2023, respectively. The Firm includes the gains/(losses) on the hedging derivative in the same line item in the Consolidated statements of income as the change in cash flows on the related hedged item.\nDerivatives gains/(losses) recorded in income and other comprehensive income/(loss)\nYear ended December 31, 2025\n(in millions)\nAmounts reclassified\nfrom AOCI to income\nAmounts recorded\nin OCI\nTotal change\nin OCI for period\nContract type\nInterest rate\n(a)\n$\n(\n2,456\n)\n$\n1,860\n\n$\n4,316\n\nForeign exchange\n(b)\n50\n\n197\n\n147\n\nTotal\n$\n(\n2,406\n)\n$\n2,057\n\n$\n4,463\n\nDerivatives gains/(losses) recorded in income and other comprehensive income/(loss)\nYear ended December 31, 2024\n(in millions)\nAmounts reclassified\nfrom AOCI to income\nAmounts recorded\nin OCI\nTotal change\nin OCI for period\nContract type\nInterest rate\n(a)\n$\n(\n2,668\n)\n$\n(\n3,603\n)\n$\n(\n935\n)\nForeign exchange\n(b)\n89\n\n(\n139\n)\n(\n228\n)\nTotal\n$\n(\n2,579\n)\n$\n(\n3,742\n)\n$\n(\n1,163\n)\nDerivatives gains/(losses) recorded in income and other comprehensive income/(loss)\nYear ended December 31, 2023\n(in millions)\nAmounts reclassified\nfrom AOCI to income\nAmounts recorded\nin OCI\nTotal change\nin OCI for period\nContract type\nInterest rate\n(a)\n$\n(\n1,839\n)\n$\n274\n\n$\n2,113\n\nForeign exchange\n(b)\n64\n\n209\n\n145\n\nTotal\n$\n(\n1,775\n)\n$\n483\n\n$\n2,258\n\n(a)\nPrimarily consists of hedges of SOFR-indexed and Prime-indexed floating-rate assets. Gains and losses were recorded in net interest income.\n(b)\nPrimarily consists of hedges of the foreign currency risk of non-U.S. dollar-denominated revenue and expense. The income statement classification of gains and losses follows the hedged item \u2013 primarily noninterest revenue and compensation expense.\nThe Firm did not experience any forecasted transactions that failed to occur for the years ended 2025, 2024 and 2023.\nOver the next 12 months, the Firm expects that approximately $(\n926\n) million (after-tax) of net losses recorded in AOCI at December\u00a031, 2025, related to cash flow hedges will be recognized in income. For cash flow hedges that have been terminated, the maximum\u00a0length of time over which the derivative results recorded in AOCI will be recognized in earnings is approximately\nten years\n, corresponding to the timing of the originally hedged forecasted cash flows. For open cash flow hedges, the maximum length of time over which forecasted transactions are hedged is approximately\nten years\n. The Firm\u2019s longer-dated forecasted transactions relate to core lending and borrowing activities.\nJPMorgan Chase & Co./2025 Form 10-K\n213\nNotes to consolidated financial statements\nNet investment hedge gains and losses\nThe following table presents hedging instruments, by contract type, that were used in net investment hedge accounting relationships, and the pre-tax gains/(losses) recorded on such instruments for the years ended December\u00a031, 2025, 2024 and 2023.\nGains/(losses) recorded in income\n(a)\n and other comprehensive income/(loss)\n2025\n2024\n2023\nYear ended December 31,\n(in millions)\nAmounts recorded in income\n(b)\nAmounts recorded in\nOCI\nAmounts recorded in income\n(b)\nAmounts recorded in\nOCI\nAmounts recorded in income\n(b)\nAmounts recorded in\nOCI\nForeign exchange derivatives\n$\n431\n$(\n6,028\n)\n$\n467\n$\n4,411\n$\n384\n$(\n1,732\n)\n(a)\nCertain components of hedging derivatives are permitted to be excluded from the assessment of hedge effectiveness, such as forward points on foreign exchange forward contracts. The changes in fair value of these amounts are recorded in net interest income.\n(b)\nExcludes amounts reclassified from AOCI to income on the sale or liquidation of hedged entities. During the years ended December 31, 2025 and 2024, the Firm reclassified net pre-tax gains of $\n14\n\u00a0million and $\n89\n million, respectively, to other income/expense. During the year ended December\u00a031, 2023, the Firm reclassified a net pre-tax loss of $(\n35\n) million to other revenue including the impact of the acquisition of CIFM. Refer to Note 24 for further information.\nGains and losses on derivatives used for specified risk management purposes\nThe following table presents pre-tax gains/(losses) recorded on a limited number of derivatives, not designated in hedge accounting relationships, that are used to manage risks associated with certain specified assets and liabilities, including certain risks arising from mortgage commitments, warehouse loans, MSRs, wholesale lending exposures, and foreign currency denominated assets and liabilities.\nDerivatives gains/(losses)\nrecorded in income\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nContract type\nInterest rate\n(a)\n$\n(\n34\n)\n$\n(\n425\n)\n$\n(\n135\n)\nCredit\n(b)\n(\n616\n)\n(\n604\n)\n(\n441\n)\nForeign exchange\n(c)\n82\n\n(\n10\n)\n(\n2\n)\nEquity\n(d)\n(\n21\n)\n\u2014\n\n\u2014\n\nTotal\n$\n(\n589\n)\n$\n(\n1,039\n)\n$\n(\n578\n)\n(a)\nPrimarily represents interest rate derivatives used to hedge the interest rate risk inherent in mortgage commitments, warehouse loans and MSRs, as well as written commitments to originate warehouse loans. Gains and losses were recorded predominantly in mortgage fees and related income.\n(b)\nRelates to credit derivatives used to mitigate credit risk associated with lending exposures in the Firm\u2019s wholesale businesses. These derivatives do not include credit derivatives used to mitigate counterparty credit risk arising from derivative receivables, which is included in gains and losses on derivatives related to market-making activities and other derivatives. Gains and losses were recorded in principal transactions revenue.\n(c)\nPrimarily relates to derivatives used to mitigate foreign exchange risk of specified foreign currency-denominated assets and liabilities. Gains and losses were recorded in principal transactions revenue.\n(d)\nGains and losses were recorded in principal transactions revenue.\nGains and losses on derivatives related to market-making activities and other derivatives\nThe Firm makes markets in derivatives in order to meet the needs of clients and uses derivatives to manage certain risks associated with net open risk positions from its market-making activities, including the counterparty credit risk arising from derivative receivables. All derivatives not included in the hedge accounting or specified risk management categories above are included in this category. Gains and losses on these derivatives are primarily recorded in principal transactions revenue. Refer to Note 6 for information on principal transactions revenue.\n214\nJPMorgan Chase & Co./2025 Form 10-K\nCredit derivatives\nCredit derivatives are financial instruments whose value is derived from the credit risk associated with the debt of a third-party issuer (the reference entity) and which allow one party (the protection purchaser) to transfer that risk to another party (the protection seller). Credit derivatives expose the protection purchaser to the creditworthiness of the protection seller, as the protection seller is required to make payments under the contract when the reference entity experiences a credit event, such as a bankruptcy, a failure to pay its obligation or a restructuring. The seller of credit protection receives a premium for providing protection but has the risk that the underlying instrument referenced in the contract will be subject to a credit event.\nThe Firm is both a purchaser and seller of protection in the credit derivatives market and uses these derivatives for two primary purposes. First, in its capacity as a market-maker, the Firm actively manages a portfolio of credit derivatives by purchasing and selling credit protection, predominantly on corporate debt obligations, to meet the needs of clients. Second, as an end-user, the Firm uses credit derivatives to manage credit risk associated with lending exposures (loans and unfunded commitments) in its wholesale and consumer businesses and derivatives counterparty exposures in its wholesale businesses, and to manage the credit risk arising from certain financial instruments in the Firm\u2019s market-making businesses. Following is a summary of various types of credit derivatives.\nCredit default swaps\nCredit derivatives may reference the credit of either a single reference entity (\u201csingle-name\u201d), broad-based index or portfolio. The Firm purchases and sells protection on both single- name and index-reference obligations. Single-name CDS and index CDS contracts are either OTC or OTC-cleared derivative contracts. Single-name CDS are used to manage the default risk of a single reference entity, while index CDS contracts are used to manage the credit risk associated with the broader credit markets or credit market segments. Like the S&P 500 and other market indices, a CDS index consists of a portfolio of CDS across many reference entities. New series of CDS indices are periodically established with a new underlying portfolio of reference entities to reflect changes in the credit markets. If one of the reference entities in the index experiences a credit event, then the reference entity that defaulted is removed from the index. CDS can also be referenced against specific portfolios of reference names or against customized exposure levels: for example, to provide protection against the first $\n1\n million of realized credit losses in a\n$\n10\n million portfolio of exposure. Such structures are commonly known as tranche CDS.\nFor both single-name CDS contracts and index CDS contracts, upon the occurrence of a credit event, under the terms of a CDS contract neither party to the CDS contract has recourse to the reference entity. The protection purchaser has recourse to the protection seller for the difference between the face value of the CDS contract and the fair value of the reference obligation at settlement of the credit derivative contract, also known as the recovery value. The protection purchaser does not need to hold the debt instrument of the underlying reference entity in order to receive amounts due under the CDS contract when a credit event occurs.\nCredit-related notes\nA credit-related note is a funded derivative with a credit risk component where the issuer of the credit-related note purchases from the note investor credit protection on a reference entity or an index. Under the contract, the investor pays the issuer the par value of the note at the inception of the transaction, and in return, the issuer makes periodic payments to the investor, based on the credit risk of the referenced entity. The issuer also repays the investor the par value of the note at maturity unless the reference entity (or one of the entities that makes up a reference index) experiences a specified credit event. If a credit event occurs, the issuer is not obligated to repay the par value of the note, but rather, the issuer pays the investor the difference between the par value of the note and the fair value of the defaulted reference obligation at the time of settlement. Neither party to the credit-related note has recourse to the defaulting reference entity.\nThe following tables present a summary of the notional amounts of credit derivatives and credit-related notes the Firm sold and purchased as of December\u00a031, 2025 and 2024. Upon a credit event, the Firm as a seller of protection would typically pay out a percentage of the full notional amount of net protection sold, as the amount actually required to be paid on the contracts takes into account the recovery value of the reference obligation at the time of settlement. The Firm manages the credit risk on contracts to sell protection by purchasing protection with identical or similar underlying reference entities. Other purchased protection referenced in the following tables includes credit derivatives bought on related, but not identical, reference positions (including indices, portfolio coverage and other reference points) as well as protection purchased by CIB through credit-related notes. Other purchased protection also includes credit protection against certain loans in the retained lending portfolio through the issuance of credit derivatives and credit-related notes.\nJPMorgan Chase & Co./2025 Form 10-K\n215\nNotes to consolidated financial statements\nThe Firm does not use notional amounts of credit derivatives as the primary measure of risk management for such derivatives, because the notional amount does not take into account the probability of the occurrence of a credit event, the recovery value of the reference obligation, or related cash instruments and economic hedges, each of which reduces, in the Firm\u2019s view, the risks associated with such derivatives.\nTotal credit derivatives and credit-related notes\nMaximum payout/Notional amount\nDecember 31, 2025\n(in millions)\nProtection sold\nProtection purchased with identical underlyings\n(c)\nNet protection (sold)/purchased\n(d)\nOther protection purchased\n(e)\nCredit derivatives\nCredit default swaps\n$\n(\n503,480\n)\n$\n549,440\n\n$\n45,960\n\n$\n6,840\n\nOther credit derivatives\n(a)\n(\n124,650\n)\n187,090\n\n62,440\n\n9,495\n\nTotal credit derivatives\n(\n628,130\n)\n736,530\n\n108,400\n\n16,335\n\nCredit-related notes\n(b)\n\u2014\n\n\u2014\n\n\u2014\n\n13,162\n\nTotal\n$\n(\n628,130\n)\n$\n736,530\n\n$\n108,400\n\n$\n29,497\n\nMaximum payout/Notional amount\nDecember 31, 2024\n(in millions)\nProtection sold\nProtection purchased with identical underlyings\n(c)\nNet protection (sold)/purchased\n(d)\nOther protection purchased\n(e)\nCredit derivatives\nCredit default swaps\n$\n(\n450,184\n)\n$\n474,554\n\n$\n24,370\n\n$\n6,858\n\nOther credit derivatives\n(a)\n(\n110,913\n)\n137,927\n\n27,014\n\n10,169\n\nTotal credit derivatives\n(\n561,097\n)\n612,481\n\n51,384\n\n17,027\n\nCredit-related notes\n(b)\n\u2014\n\n\u2014\n\n\u2014\n\n10,471\n\nTotal\n$\n(\n561,097\n)\n$\n612,481\n\n$\n51,384\n\n$\n27,498\n\n(a)\nOther credit derivatives predominantly consist of credit swap options and total return swaps.\n(b)\nPredominantly represents Other protection purchased by CIB.\n(c)\nRepresents the total notional amount of protection purchased where the underlying reference instrument is identical to the reference instrument on protection sold; the notional amount of protection purchased for each individual identical underlying reference instrument may be greater or lower than the notional amount of protection sold.\n(d)\nDoes not take into account the fair value of the reference obligation at the time of settlement, which would generally reduce the amount the seller of protection pays to the buyer of protection in determining settlement value.\n(e)\nRepresents protection purchased by the Firm on referenced instruments (single-name, portfolio or index) where the Firm has not sold any protection on the identical reference instrument. Also includes credit protection against certain loans and lending-related commitments in the retained lending portfolio through the issuance of credit derivatives and credit-related notes.\n216\nJPMorgan Chase & Co./2025 Form 10-K\nThe following tables summarize the notional amounts by the ratings, maturity profile, and total fair value, of credit derivatives as of December\u00a031, 2025 and 2024, where JPMorganChase is the seller of protection. The maturity profile is based on the remaining contractual maturity of the credit derivative contracts. The ratings profile is based on the rating of the reference entity on which the credit derivative contract is based. The ratings and maturity profile of credit derivatives where JPMorganChase is the purchaser of protection are comparable to the profile reflected below.\nProtection sold \u2013 credit derivatives ratings\n(a)\n/maturity profile\nDecember 31, 2025\n(in millions)\n<1 year\n1\u20135 years\n>5 years\nTotal notional amount\nFair value of receivables\n(b)\nFair value of payables\n(b)\nNet fair value\nRisk rating of reference entity\nInvestment-grade\n$\n(\n146,799\n)\n$\n(\n314,100\n)\n$\n(\n28,117\n)\n$\n(\n489,016\n)\n$\n4,969\n\n$\n(\n908\n)\n$\n4,061\n\nNoninvestment-grade\n(\n43,863\n)\n(\n91,220\n)\n(\n4,031\n)\n(\n139,114\n)\n3,439\n\n(\n2,085\n)\n1,354\n\nTotal\n$\n(\n190,662\n)\n$\n(\n405,320\n)\n$\n(\n32,148\n)\n$\n(\n628,130\n)\n$\n8,408\n\n$\n(\n2,993\n)\n$\n5,415\n\nDecember 31, 2024\n(in millions)\n<1 year\n1\u20135 years\n>5 years\nTotal notional amount\nFair value of receivables\n(b)\nFair value of payables\n(b)\nNet fair value\nRisk rating of reference entity\nInvestment-grade\n$\n(\n135,950\n)\n$\n(\n277,052\n)\n$\n(\n33,379\n)\n$\n(\n446,381\n)\n$\n4,593\n\n$\n(\n904\n)\n$\n3,689\n\nNoninvestment-grade\n(\n42,149\n)\n(\n70,525\n)\n(\n2,042\n)\n(\n114,716\n)\n1,889\n\n(\n1,738\n)\n151\n\nTotal\n$\n(\n178,099\n)\n$\n(\n347,577\n)\n$\n(\n35,421\n)\n$\n(\n561,097\n)\n$\n6,482\n\n$\n(\n2,642\n)\n$\n3,840\n\n(a)\nThe ratings scale is primarily based on external credit ratings defined by S&P and Moody\u2019s.\n(b)\nAmounts are shown on a gross basis, before the benefit of legally enforceable master netting agreements including cash collateral netting.\nJPMorgan Chase & Co./2025 Form 10-K\n217\nNotes to consolidated financial statements\nNote 6 \u2013\nNoninterest revenue and noninterest expense\nNoninterest revenue\nThe Firm records noninterest revenue from certain contracts with customers in investment banking fees, deposit-related fees, asset management fees, commissions and other fees, and components of card income. The related contracts are often terminable on demand and the Firm has no remaining obligation to deliver future services. For arrangements with a fixed term, the Firm may commit to deliver services in the future. Revenue associated with these remaining performance obligations typically depends on the occurrence of future events or underlying asset values, and is not recognized until the outcome of those events or values are known.\nInvestment banking fees\nThis revenue category includes debt and equity underwriting and advisory fees. As an underwriter, the Firm helps clients raise capital via public offering and private placement of various types of debt and equity instruments. Underwriting fees are primarily based on the issuance price and quantity of the underlying instruments, and are recognized as revenue typically upon execution of the client\u2019s transaction. The Firm also manages and syndicates loan arrangements. Credit arrangement and syndication fees, included within debt underwriting fees, are recorded as revenue after satisfying certain retention, timing and yield criteria.\nThe Firm also provides advisory services by assisting its clients with mergers and acquisitions, divestitures, restructuring and other complex transactions. Advisory fees are recognized as revenue typically upon execution of the client\u2019s transaction.\nThe following table presents the components of investment banking fees.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nUnderwriting\nEquity\n$\n1,734\n\n$\n1,687\n\n$\n1,149\n\nDebt\n4,378\n\n3,945\n\n2,610\n\nTotal underwriting\n6,112\n\n5,632\n\n3,759\n\nAdvisory\n3,503\n\n3,278\n\n2,760\n\nTotal investment banking fees\n$\n9,615\n\n$\n8,910\n\n$\n6,519\n\nInvestment banking fees are earned primarily by CIB.\nPrincipal transactions\nPrincipal transactions revenue is driven by many factors, including:\n\u2022\nthe bid-offer spread, which is the difference between the price at which a market participant is willing and able to sell an instrument to the Firm\u00a0and the price at which another market participant is willing and able to buy it from the Firm, and vice versa; and\n\u2022\nrealized and unrealized gains and losses on financial instruments and commodities transactions, including those accounted for under the fair value option, primarily used in client-driven market-making activities.\n\u2013\nRealized gains and losses result from the sale of instruments, closing out or termination of transactions, or interim cash payments.\n\u2013\nUnrealized gains and losses result from changes in valuation.\nIn connection with its client-driven market-making activities, the Firm transacts in debt and equity instruments, derivatives and commodities, including physical commodities inventories and financial instruments that reference commodities.\nPrincipal transactions revenue also includes realized and unrealized gains and losses related to:\n\u2022\nderivatives designated in qualifying hedge accounting relationships, primarily fair value hedges of commodity and foreign exchange risk;\n\u2022\nderivatives used for specific risk management purposes, primarily to mitigate credit, foreign exchange and interest rate risks.\nRefer to Note 5 for further information on the income statement classification of gains and losses from derivatives activities.\nIn the financial commodity markets, the Firm transacts in OTC derivatives (e.g., swaps, forwards, options) and ETD that reference a wide range of underlying commodities. In the physical commodity markets, the Firm primarily purchases and sells precious and base metals, natural gas, and may hold other commodities inventories under financing and other arrangements with clients.\nThe following table presents all realized and unrealized gains and losses recorded in principal transactions revenue by instrument type. This table excludes interest income and interest expense on interest-earning assets and interest-bearing liabilities recorded within net interest income.\u00a0Refer to Note 7 for further information on interest income and interest expense.\n218\nJPMorgan Chase & Co./2025 Form 10-K\nThe Firm\u2019s businesses and other activities generally utilize a variety of instrument types in connection with their transactions; accordingly, the principal transactions revenue presented in the table below is not representative of the total revenue of any individual business or activity.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nPrincipal transactions revenue by instrument type\nInterest rate\n(a)\n$\n4,240\n\n$\n3,631\n\n$\n5,607\n\nCredit\n(b)\n558\n\n1,545\n\n1,434\n\nForeign exchange\n5,644\n\n4,874\n\n5,082\n\nEquity\n14,844\n\n13,476\n\n10,229\n\nCommodity\n1,989\n\n1,194\n\n2,202\n\nTotal revenue by instrument type\n27,275\n\n24,720\n\n24,554\n\nPrivate equity gains/(losses)\n(\n63\n)\n67\n\n(\n94\n)\nPrincipal transactions\n$\n27,212\n\n$\n24,787\n\n$\n24,460\n\n(a)\nIncludes the impact of changes in funding valuation adjustments on derivatives.\n(b)\nIncludes the impact of changes in credit valuation adjustments on derivatives, net of the associated hedging activities.\nPrincipal transactions revenue is earned primarily by CIB.\nLending- and deposit-related fees\nLending-related fees include fees earned from loan commitments, standby letters of credit, financial guarantees and other loan-servicing activities. Deposit-related fees include fees earned from performing cash management activities, and providing overdraft and other deposit account services. Deposit-related fees also include the impact of credits earned by clients that reduce such fees. Lending- and deposit-related fees are recognized over the period in which the related service is provided.\nRefer to Note 28 for further information on lending-related commitments.\nThe following table presents the components of lending- and deposit-related fees.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nLending-related fees\n(a)\n$\n2,217\n\n$\n2,192\n\n$\n2,365\n\nDeposit-related fees\n6,876\n\n5,414\n\n5,048\n\nTotal lending- and deposit-related fees\n$\n9,093\n\n$\n7,606\n\n$\n7,413\n\n(a)\u00a0\u00a0\u00a0\u00a0Includes the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic, predominantly in AWM and CIB. The discount, which is deferred in other liabilities and recognized on a straight-line basis over the commitment period, continues to decline as commitments expire. Refer to Note 34 for additional information.\nLending- and deposit-related fees are earned by CIB, CCB and AWM.\nAsset management fees\nInvestment management fees include fees associated with assets the Firm manages on behalf of its clients, including investors in Firm-sponsored funds and owners of separately managed investment accounts. Management fees are typically based on the value of assets under management and are collected and recognized at the end of each period over which the management services are provided and the value of the managed assets is known. The Firm also receives performance-based management fees, which are earned based on exceeding certain benchmarks or other performance targets and are accrued and recognized when the probability of reversal is remote, typically at the end of the related billing period.\nAll other asset management fees include commissions earned on the sales or distribution of mutual funds to clients. These fees are recorded as revenue at the time the service is rendered or, in the case of certain distribution fees, based on the underlying fund\u2019s asset value or investor redemption activity.\nThe following table presents the components of asset management fees.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nAsset management fees\nInvestment management fees\n$\n19,921\n\n$\n17,425\n\n$\n14,908\n\nAll other asset management fees\n406\n\n376\n\n312\n\nTotal asset management fees\n$\n20,327\n\n$\n17,801\n\n$\n15,220\n\nAsset management fees are earned primarily by AWM and CCB.\nCommissions and other fees\nThis revenue category includes commissions and fees from brokerage and custody services, and other products.\nBrokerage commissions represents commissions earned when the Firm acts as a broker, by facilitating its clients\u2019 purchases and sales of securities and other financial instruments. Brokerage commissions are collected and recognized as revenue upon occurrence of the client transaction. The Firm reports certain costs paid to third-party clearing houses and exchanges net against commission revenue.\nAdministration fees predominantly include fees for custody, funds services, securities lending and securities clearance. These fees are recorded as revenue over the period in which the related service is provided.\nJPMorgan Chase & Co./2025 Form 10-K\n219\nNotes to consolidated financial statements\nThe following table presents the components of commissions and other fees.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nCommissions and other fees\nBrokerage commissions\n$\n3,726\n\n$\n3,119\n\n$\n2,820\n\nAdministration fees\n2,764\n\n2,526\n\n2,310\n\nAll other commissions and fees\n(a)\n2,049\n\n1,885\n\n1,706\n\nTotal commissions and other fees\n$\n8,539\n\n$\n7,530\n\n$\n6,836\n\n(a)\nIncludes depositary receipt-related service fees, annuity and travel-related sales commissions, as well as other service fees, which are recognized as revenue when the services are rendered.\n\nCommissions and other fees are earned primarily by CIB, CCB and AWM.\nMortgage fees and related income\nThis revenue category reflects CCB\u2019s Home Lending production and net mortgage servicing revenue.\nProduction revenue includes fees and income recognized as earned on mortgage loans originated with the intent to sell, and the impact of risk management activities associated with the mortgage pipeline and warehouse loans. Production revenue also includes gains and losses on sales and lower of cost or fair value adjustments on mortgage loans held-for-sale (excluding certain repurchased loans insured by U.S. government agencies), and changes in the fair value of financial instruments measured under the fair value option. Net mortgage servicing revenue includes operating revenue earned from servicing third-party mortgage loans, which is recognized over the period in which the service is provided; changes in the fair value of MSRs; the impact of risk management activities associated with MSRs; and gains and losses on securitization of excess mortgage servicing. Net mortgage servicing revenue also includes gains and losses on sales and lower of cost or fair value adjustments of certain repurchased loans insured by U.S. government agencies.\nRefer to Note 15 for further information on risk management activities and MSRs.\nNet interest income from mortgage loans is recorded in interest income.\nCard income\nThis revenue category includes interchange and other income from credit and debit card transactions; and fees earned from processing card transactions for merchants, both of which are recognized when purchases are made by a cardholder and presented net of certain transaction-related costs. Card income also includes account origination costs and annual fees, which are deferred and recognized on a straight-line basis over a\n12\n-month period.\nCertain credit card products offer the cardholder the ability to earn points based on account activity, which the cardholder can choose to redeem for cash and non-cash rewards. The cost to the Firm related to these proprietary rewards programs varies based on multiple factors including the terms and conditions of the rewards programs, cardholder activity, cardholder reward redemption rates and cardholder reward selections. The Firm maintains a liability for its obligations under its rewards programs and reports the current-period cost as a reduction of card income.\nCredit card revenue sharing agreements\nThe Firm has contractual agreements with numerous co-brand partners that grant the Firm exclusive rights to issue co-branded credit card products and market them to the customers of such partners. These partners endorse the co-brand credit card programs and provide their customer or member lists to the Firm. The partners may also conduct marketing activities and provide rewards redeemable under their own loyalty programs that the Firm will grant to co-brand credit cardholders based on account activity.\n\nThe terms of these agreements generally range from\nfive\n to\nten years\n.\nThe Firm typically makes payments to the co-brand credit card partners based on the cost of partners\u2019 marketing activities and loyalty program rewards provided to credit cardholders, new account originations and sales volumes. Payments to partners based on marketing efforts undertaken by the partners are expensed by the Firm as incurred and reported as marketing expense. Payments for partner loyalty program rewards are reported as a reduction of card income when incurred. Payments to partners based on new credit card account originations are accounted for as direct loan origination costs and are deferred and recognized as a reduction of card income on a straight-line basis over a\n12\n-month period. Payments to partners based on sales volumes are reported as a reduction of card income when the related interchange income is earned.\n\nThe following table presents the components of card income:\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nInterchange and merchant processing income\n$\n36,222\n\n$\n33,847\n\n$\n31,021\n\nReward costs and partner payments\n(\n29,720\n)\n(\n26,784\n)\n(\n24,601\n)\nAll other\n(a)\n(\n1,782\n)\n(\n1,566\n)\n(\n1,636\n)\nTotal card income\n$\n4,720\n\n$\n5,497\n\n$\n4,784\n\n(a)\nPredominantly represents the amortization of account origination costs and annual fees, which are deferred and recognized on a straight-line basis over a\n12\n-month period.\n\nCard income is earned primarily by CCB and CIB.\n220\nJPMorgan Chase & Co./2025 Form 10-K\nOther income\nThis revenue category includes operating lease income, as well as losses associated with certain of the Firm\u2019s tax-oriented investments, predominantly alternative energy equity-method investments in CIB. The losses associated with these tax-oriented investments are more than offset by lower income tax expense from the associated tax credits.\nThe following table presents certain components of\nother income:\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nOperating lease income\n$\n3,803\n\n$\n2,795\n\n$\n2,843\n\nLosses on tax-oriented investments\n(\n173\n)\n(\n97\n)\n(\n1,538\n)\nGain on Visa shares\n\u2014\n\n7,990\n\n(b)\n\u2014\n\nFirst Republic-related gains\n(a)\n628\n\n103\n\n2,775\n\nGain related to the acquisition of CIFM\n\n\u2014\n\n\u2014\n\n339\n\n(c)\n(a)  Relates to the settlement of outstanding items with the FDIC in 2025, and adjustments to the estimated bargain purchase gain associated with the acquisition in 2024 and 2023.\n(b)  Relates to the initial gain recognized on May 6, 2024 on the Visa C shares.\n(c)\u00a0\u00a0\u00a0\u00a0Gain on the original minority interest in CIFM upon the Firm's acquisition of the remaining\n51\n% of the entity.\nRefer to Note 18 for additional information on operating leases.\nFirst Republic-related gain\n: On January 17, 2025, the Firm reached an agreement with the FDIC with respect to certain outstanding items related to the First Republic acquisition. As a result of the agreement, the Firm made a payment of $\n609\n million to the FDIC on January 31, 2025 and reduced its additional payable to the FDIC, which resulted in a gain of $\n588\n million recorded in other income in the first quarter of 2025. In addition, as of June 30, 2025, all outstanding matters between the Firm and the FDIC related to the final settlement of the purchase price for the First Republic acquisition had been resolved. Refer to Note 34 for additional information.\nProportional Amortization Method:\n Effective January 1, 2024, as a result of adopting updates to the Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method guidance, the amortization of certain of the Firm's alternative energy tax-oriented investments that was previously recognized in other income is now recognized in income tax expense, which aligns with the associated tax credits and other tax benefits. Refer to Notes 1, 14 and 25 for additional information.\nNoninterest expense\nOther expense\n\nOther expense on the Firm\u2019s Consolidated statements of income included:\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nLegal expense\n$\n361\n\n$\n740\n\n$\n1,436\n\nFDIC-related expense\n(a)\n531\n\n1,893\n\n4,203\n\nOperating losses\n1,292\n\n1,417\n\n1,228\n\nContribution of Visa shares\n\u2014\n\n1,000\n\n(b)\n\u2014\n\n(a)  Included FDIC special assessment accrual releases of $\n763\n\u00a0million and an accrual increase of $\n725\n\u00a0million for the years ended December\u00a031, 2025 and 2024, respectively, which are adjustments to the initial $\n2.9\n\u00a0billion estimate recorded in the fourth quarter of 2023.\n(b)  Represents the contribution of a portion of Visa C shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024.\n\nRefer to Note 32 for additional information on noninterest revenue and expense by segment.\nJPMorgan Chase & Co./2025 Form 10-K\n221\nNotes to consolidated financial statements\nNote 7 \u2013\nInterest income and interest expense\nInterest income and interest expense are recorded in the Consolidated statements of income and classified based on the nature of the underlying asset or liability.\nInterest income and interest expense includes the current-period interest accruals for financial instruments measured at fair value, except for derivatives and certain financial instruments containing embedded derivatives; for those instruments, all changes in fair value including any interest elements, are primarily reported in principal transactions revenue. For financial instruments that are not measured at fair value, the related interest is included within interest income or interest expense, as applicable. Interest income and interest expense also includes the effect of derivatives that qualify for hedge accounting where applicable.\nInterest income on loans and securities include the amortization and accretion of purchase premiums and discounts, as well as net deferred fees and costs on loans. These amounts are deferred in loans and investment securities, respectively, and recognized on a level-yield basis.\nRefer to Notes 5, 10, 11, 12, and 20 for further information on accounting for interest income and interest expense related to hedge accounting, investment securities, securities financing activities (i.e., securities purchased or sold under resale or repurchase agreements; securities borrowed; and securities loaned), loans and long-term debt, respectively.\nThe following table presents the components of interest income and interest expense:\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nInterest income\nLoans\n(a)\n$\n93,843\n\n$\n92,353\n\n$\n83,384\n\n\u00a0Taxable securities\n26,903\n\n21,947\n\n17,390\n\n\u00a0Non-taxable securities\n(b)\n1,129\n\n1,197\n\n1,336\n\nTotal investment securities\n(a)\n28,032\n\n23,144\n\n18,726\n\nTrading assets - debt instruments\n24,895\n\n20,327\n\n15,950\n\nFederal funds sold and securities purchased under resale agreements\n16,706\n\n18,299\n\n15,079\n\nSecurities borrowed\n9,027\n\n9,208\n\n7,983\n\nDeposits with banks\n13,099\n\n22,297\n\n21,797\n\nAll other interest-earning assets\n(c)\n7,739\n\n8,305\n\n7,669\n\nTotal interest income\n$\n193,341\n\n$\n193,933\n\n$\n170,588\n\nInterest expense\nInterest bearing deposits\n$\n45,112\n\n$\n49,559\n\n$\n40,016\n\nFederal funds purchased and securities loaned or sold under repurchase agreements\n22,411\n\n19,149\n\n13,259\n\nShort-term borrowings\n2,298\n\n2,101\n\n1,894\n\nTrading liabilities - debt and all other interest-bearing liabilities\n(d)\n8,965\n\n10,238\n\n9,396\n\nLong-term debt\n17,894\n\n18,920\n\n15,803\n\nBeneficial interest issued by consolidated VIEs\n1,218\n\n1,383\n\n953\n\nTotal interest expense\n$\n97,898\n\n$\n101,350\n\n$\n81,321\n\nNet interest income\n$\n95,443\n\n$\n92,583\n\n$\n89,267\n\nProvision for credit losses\n14,212\n\n10,678\n\n9,320\n\nNet interest income after provision for credit losses\n$\n81,231\n\n$\n81,905\n\n$\n79,947\n\n(a)\nIncludes the accretion of the purchase discount on certain acquired loans and investment securities associated with First Republic. Refer to Note 34 for additional information.\n(b)\nRepresents securities that are tax-exempt for U.S. federal income tax purposes.\n(c)\nIncludes interest earned on brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets, which are classified in other assets on the Consolidated balance sheets.\n(d)\nAll other interest-bearing liabilities includes interest expense on brokerage-related customer payables.\n222\nJPMorgan Chase & Co./2025 Form 10-K\nNote 8 \u2013\nPension and other postretirement\nemployee benefit plans\nThe Firm has various defined benefit pension plans and OPEB plans that provide benefits to its employees in the U.S. and certain non-U.S. locations. Substantially all the defined benefit pension plans are closed to new participants. The principal defined benefit pension plan in the U.S., which covered substantially all U.S. employees, was closed to new participants and frozen for existing participants on January 1, 2020, (and January 1, 2019 for new hires on or after December 2, 2017). Interest credits continue to accrue to participants\u2019 accounts based on their accumulated balances.\nThe Firm maintains funded and unfunded postretirement benefit plans that provide medical and life insurance for certain eligible employees and\nretirees as well as their dependents covered under these programs. None of these plans have a material impact on the Firm\u2019s Consolidated Financial Statements.\nThe Firm also provides a qualified defined contribution plan in the U.S. and maintains other similar arrangements in certain non-U.S. locations. The most significant of these plans is the JPMorgan Chase 401(k) Savings Plan (\u201cthe 401(k) Savings Plan\u201d), which covers substantially all U.S. employees. Employees can contribute to the 401(k) Savings Plan on a pretax and/or after-tax basis. The Firm makes annual matching and pay credit contributions to the 401(k) Savings Plan on behalf of eligible participants.\n\nThe following table presents the pretax benefit obligations, plan assets, the net funded status, and the amounts recorded in AOCI on the Consolidated balance sheets for the Firm\u2019s significant defined benefit pension and OPEB plans.\nAs of or for the year ended December 31,\n(in millions)\n2025\n2024\nProjected benefit obligations\n$\n(\n14,724\n)\n$\n(\n14,459\n)\nFair value of plan assets\n23,603\n\n22,201\n\nNet funded status\n8,879\n\n7,742\n\nAccumulated other comprehensive income/(loss)\n(\n965\n)\n(\n1,649\n)\nThe weighted-average discount rate used to value the benefit obligations as of December\u00a031, 2025 and 2024, was\n5.39\n% and\n5.49\n%, respectively.\nGains and losses\nGains or losses resulting from changes in the benefit obligation and the fair value of plan assets are recorded in OCI. Amortization of net gains or losses are recognized as part of the net periodic benefit cost over subsequent periods, if, as of the beginning of the year, the net gain or loss exceeds\n10\n% of the greater of the projected benefit obligation or the fair value of the plan assets. Amortization is generally over the average expected remaining lifetime of plan participants, given the frozen status of most plans. For the year ended\nDecember 31, 2025, the net gain was attributable to higher than expected returns on plan assets, partially offset by projected benefit obligation net losses primarily related to changes in the discount rate. For the year ended December 31, 2024, the net loss was attributable to lower than expected returns on plan assets, partially offset by projected benefit obligation net gains primarily related to changes in the discount rate.\nThe following table presents the net periodic benefit costs reported in the Consolidated statements of income for the Firm\u2019s defined benefit pension, defined contribution and OPEB plans, and in other comprehensive income for the defined benefit pension and OPEB plans.\nYear ended December 31, (in millions)\n2025\n2024\n2023\nTotal net periodic defined benefit plan credit\n(a)\n$\n(\n184\n)\n(b)\n$\n(\n462\n)\n$\n(\n393\n)\nTotal defined contribution plans\n1,925\n\n1,733\n\n1,609\n\nTotal pension and OPEB cost included in noninterest expense\n$\n1,741\n\n$\n1,271\n\n$\n1,216\n\nTotal recognized in other comprehensive (income)/loss\n$\n(\n691\n)\n$\n131\n\n$\n(\n421\n)\n(a)\nThe service cost component of net periodic defined benefit cost is reported in compensation expense; all other components of net periodic defined benefit costs are reported in other expense in the Consolidated statements of income.\n(b)\nIncludes pension settlement losses of $\n78\n million for the year ended December\u00a031, 2025.\n\nJPMorgan Chase & Co./2025 Form 10-K\n223\nNotes to consolidated financial statements\nThe following table presents the weighted-average actuarial assumptions used to determine the net periodic benefit costs for the defined benefit pension and OPEB plans.\nYear ended December 31,\n2025\n2024\n2023\nDiscount rate\n5.49\n\n%\n5.16\n\n%\n5.14\n\n%\nExpected long-term rate of return on plan assets\n5.44\n\n%\n6.15\n\n%\n5.74\n\n%\nPlan assumptions\nThe Firm\u2019s expected long-term rate of return is a blended weighted average, by asset allocation of the projected long-term returns for the various asset classes, taking into consideration local market conditions and the specific allocation of plan assets. Returns on asset classes are developed using a forward-looking approach and are not strictly based on historical returns, with consideration given to current market conditions and the portfolio mix of each plan.\nThe discount rates used in determining the benefit obligations are generally provided by the Firm\u2019s actuaries, with the Firm\u2019s principal defined benefit pension plan using a rate that was selected by reference to the yields on portfolios of bonds with maturity dates and coupons that closely match the plan\u2019s projected annual cash flows.\nInvestment strategy and asset allocation\nThe assets of the Firm\u2019s defined benefit pension plans are held in various trusts and are invested in well-diversified portfolios of equity and fixed income securities, cash and cash equivalents, and alternative investments. The Firm regularly reviews the asset allocations and asset managers, as well as other factors that could impact the portfolios, which are rebalanced when deemed necessary. As of December 31, 2025, the approved asset allocation ranges by asset class for the Firm\u2019s principal defined benefit plan are\n41\n-\n100\n% debt securities,\n0\n-\n40\n% equity securities, and\n0\n-\n14\n% alternatives.\nAssets held by the Firm\u2019s defined benefit pension and OPEB plans do not include securities issued by JPMorganChase or its affiliates, except through indirect exposures through investments in exchange traded funds, mutual funds and collective investment funds managed by third-parties. The defined benefit pension and OPEB plans hold investments that are sponsored or managed by affiliates of JPMorganChase in the amount of $\n2.1\n billion and $\n1.8\n billion as of December\u00a031, 2025 and 2024, respectively.\nFair value measurement of the plans\u2019 assets and liabilities\nRefer to Note 2 for information on fair value measurements, including descriptions of level 1, 2, and 3 of the fair value hierarchy and the valuation methods employed by the Firm.\nDefined benefit pension and OPEB plans assets and liabilities measured at fair value\n2025\n2024\nDecember 31,\n(in millions)\nLevel 1\n(a)\nLevel 2\n(b)\nLevel 3\n(c)\nTotal fair value\nLevel 1\n(a)\nLevel 2\n(b)\nLevel 3\n(c)\nTotal fair value\nAssets measured at fair value classified in the fair value hierarchy\n$\n7,834\n\n$\n9,809\n\n$\n4,160\n\n$\n21,803\n\n$\n6,910\n\n$\n9,693\n\n$\n3,956\n\n$\n20,559\n\nAssets measured at fair value using NAV as a practical expedient\n2,388\n\n2,101\n\nNet defined benefit pension plan payables\n(\n588\n)\n(\n459\n)\nTotal fair value of plan assets\n$\n23,603\n\n$\n22,201\n\n(a)\nConsists predominantly of equity securities, fund investments, U.S. federal and non-U.S. government debt securities, and cash equivalents.\n(b)\nConsists of corporate debt securities, mortgage-backed securities, fund investments, and U.S. state, local and non-U.S. government debt securities.\n(c)\nConsists predominantly of corporate-owned life insurance policies.\n224\nJPMorgan Chase & Co./2025 Form 10-K\nChanges in level 3 fair value measurements using significant unobservable inputs\nInvestments classified in level 3 of the fair value hierarchy increased in 2025 to $\n4.2\n\u00a0billion, due to $\n361\n\u00a0million in unrealized gains, partially offset by $\n58\n\u00a0million in sales, $\n52\n\u00a0million of transfers out, and $\n46\n\u00a0million in settlements. The net increase in 2024 was due to $\n536\n\u00a0million of transfers in and $\n415\n\u00a0million in unrealized gains, partially offset by $\n123\n\u00a0million in settlements.\nEstimated future benefit payments\nThe following table presents benefit payments expected to be paid for the defined benefit pension and OPEB plans for the years indicated.\nYear ended December 31,\n(in millions)\n2026\n$\n2,253\n\n2027\n1,074\n\n2028\n1,061\n\n2029\n1,031\n\n2030\n1,017\n\nYears 2031\u20132035\n4,834\n\nJPMorgan Chase & Co./2025 Form 10-K\n225\nNotes to consolidated financial statements\nNote 9 \u2013\nEmployee share-based incentives\nEmployee share-based awards\nIn 2025, 2024 and 2023, JPMorganChase granted long-term share-based awards to certain employees under its LTIP. As of December\u00a031, 2025,\n77\n million shares of common stock were available under the LTIP for issuance through May\u00a02028. The LTIP is the only active plan under which the Firm is currently granting share-based incentive awards.\nRSUs are awarded at no cost to the recipient upon their grant. Generally, RSUs are granted annually and vest at a rate of\n50\n% after\ntwo years\n and\n50\n% after\nthree years\n and are converted into shares of common stock as of the vesting date. In addition, RSUs typically include full-career eligibility provisions, which allow employees to continue to vest upon voluntary termination based on age and/or service-related requirements, subject to post-employment and other restrictions. All RSU awards are subject to forfeiture until vested and contain clawback provisions that may result in cancellation under certain specified circumstances. Predominantly all RSUs entitle the recipient to receive cash payments equivalent to any dividends paid on the underlying common stock during the period the RSUs are outstanding.\nGenerally, performance share units (\u201cPSUs\u201d) are granted annually, and approved by the Firm\u2019s Board of Directors, to members of the Firm\u2019s Operating Committee under the variable compensation program. PSUs are subject to the Firm\u2019s achievement of specified performance criteria over a\nthree-year\n period. The number of PSUs that vest can range from\nzero\n to\n150\n% of the grant amount. In addition, dividends that accrue during the vesting period are reinvested in dividend equivalent share units. PSUs and the related dividend equivalent share units are converted into shares of common stock after vesting.\nOnce the PSUs and dividend equivalent share units have vested, the shares of common stock that are delivered, after applicable tax withholding, must be retained for an additional holding period, for a total combined vesting and holding period of approximately\nfive\n to\neight years\n from the grant date depending on regulations in certain countries.\nUnder the LTIP, stock appreciation rights (\u201cSARs\u201d) were granted with an exercise price equal to the fair value of JPMorganChase\u2019s common stock on the grant date. SARs expire\nten years\n after the grant date. There were\nno\n grants of SARs in 2025, 2024 or 2023.\nThe Firm separately recognizes compensation expense for each tranche of each award, net of estimated forfeitures, as if it were a separate award with its own vesting date. Generally, for each tranche granted, compensation expense is recognized on a straight-line basis from the grant date until the vesting date of the respective tranche, provided that the employees will not become full-career eligible during the vesting period. For awards with full-career eligibility provisions and awards granted with no future substantive service requirement, the Firm accrues the estimated value of awards expected to be awarded to employees as of the grant date without giving consideration to the impact of post-employment restrictions. For each tranche granted to employees who will become full-career eligible during the vesting period, compensation expense is recognized on a straight-line basis from the grant date until the earlier of the employee\u2019s full-career eligibility date or the vesting date of the respective tranche.\nThe Firm\u2019s policy for issuing shares upon settlement of employee share-based incentive awards is to issue either new shares of common stock or treasury shares. During 2025, 2024 and 2023, the Firm settled all of its employee share-based awards by issuing treasury shares.\n\nRefer to Note 23 for further information on the classification of share-based awards for purposes of calculating earnings per share.\n226\nJPMorgan Chase & Co./2025 Form 10-K\nRSUs, PSUs and SARs activity\n\nGenerally, compensation expense for RSUs and PSUs is measured based on the number of units granted multiplied by the stock price at the grant date, and for SARs, is measured at the grant date using the Black-Scholes valuation model. Compensation expense for these awards is recognized in net income as described previously.\nThe following table summarizes JPMorganChase\u2019s RSUs, PSUs and SARs activity for 2025.\nRSUs/PSUs\nSARs\nYear ended December 31, 2025\nNumber of\nunits\nWeighted-average grant\ndate fair value\nNumber of awards\nWeighted-average exercise price\nWeighted-average remaining contractual life\n(in years)\nAggregate intrinsic value\n(in thousands, except weighted-average data, and where otherwise stated)\nOutstanding, January 1\n50,609\n\n$\n150.41\n\n2,250\n\n$\n152.19\n\nGranted\n14,602\n\n261.24\n\n\u2014\n\n\u2014\n\nExercised or vested\n(\n20,469\n)\n148.74\n\n\u2014\n\n\u2014\n\nForfeited\n(\n2,182\n)\n176.47\n\n\u2014\n\n\u2014\n\nCanceled\nNA\nNA\n\u2014\n\n\u2014\n\nOutstanding, December 31\n42,560\n\n$\n187.64\n\n2,250\n\n$\n152.19\n\n5.7\n$\n385,369\n\nExercisable, December 31\nNA\nNA\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nThe total fair value of RSUs and PSUs that vested during the years ended December\u00a031, 2025, 2024 and 2023, was $\n5.0\n billion, $\n3.5\n billion and $\n2.5\n billion, respectively. There were\nno\n SARs exercised in 2025 and 2024. The total intrinsic value of SARs exercised during the year ended December 31, 2023 was $\n24\n million.\nCompensation expense\nThe Firm recognized the following noncash compensation expense related to its various employee share-based incentive plans in its Consolidated statements of income.\nYear ended December 31, (in millions)\n2025\n2024\n2023\nCost of prior grants of RSUs, PSUs and SARs that are amortized over their applicable vesting periods\n$\n1,541\n\n$\n1,622\n\n$\n1,510\n\nAccrual of estimated costs of share-based awards to be granted in future periods, predominantly those to full-career eligible employees\n2,073\n\n1,882\n\n1,607\n\nTotal noncash compensation expense related to employee share-based incentive plans\n$\n3,614\n\n$\n3,504\n\n$\n3,117\n\nAt December\u00a031, 2025, approximately $\n1.0\n billion (pretax)\u00a0of compensation expense related to unvested awards had not yet been charged to net income. That cost is expected to be amortized into compensation expense over a weighted-average period of\n1.6\n years. The Firm does not capitalize any compensation expense related to share-based compensation awards to employees.\n\nTax benefits\nIncome tax benefits (including tax benefits from dividends or d\nividend equivalents)\n related to share-based incentive arrangements recognized in the Firm\u2019s Consolidated statements of income for the years ended December\u00a031, 2025, 2024 and 2023, were $\n1.4\n billion, $\n1.0\n\u00a0billion and $\n836\n\u00a0million, respectively.\nJPMorgan Chase & Co./2025 Form 10-K\n227\nNotes to consolidated financial statements\nNote 10 \u2013\nInvestment securities\nInvestment securities consist of debt securities that are classified as AFS or HTM. Debt securities classified as trading assets are discussed in Note 2. Predominantly all of the Firm\u2019s AFS and HTM securities are held by Treasury and CIO in connection with its asset-liability management activities.\nAFS securities are carried at fair value on the Consolidated balance sheets. Unrealized gains and losses, after any applicable hedge accounting adjustments or allowance for credit losses, are reported in AOCI. The specific identification method is used to determine realized gains and losses on AFS securities, which are included in investment securities gains/(losses) on the Consolidated statements of income. HTM securities, which the Firm has the intent and ability to hold until maturity, are carried at amortized cost, net of allowance for credit losses, on the Consolidated balance sheets.\nFor both AFS and HTM securities, purchase discounts or premiums are generally amortized into interest income on a level-yield basis over the contractual life of the security. However, premiums on certain callable debt securities are amortized to the earliest call date.\nDuring the third quarter of 2025, the Firm transferred $\n44.1\n\u00a0billion of investment securities from AFS to HTM for asset-liability management purposes. AOCI included pretax unrealized gains of $\n575\n\u00a0million on the securities at the date of transfer.\nUnrealized gains or losses at the date of transfer of these securities continue to be reported in AOCI and are amortized into interest income on a level-yield basis over the remaining life of the securities. This amortization will offset the effect on interest income of the amortization of the premium or discount resulting from the transfer recorded at fair value.\nEffective January 1, 2023, the Firm adopted the portfolio layer method hedge accounting guidance which permitted a transfer of HTM securities to AFS upon adoption. The Firm transferred obligations of U.S. states and municipalities with a carrying value of $\n7.1\n\u00a0billion resulting in the recognition of $\n38\n\u00a0million net pre-tax unrealized losses in AOCI. Refer to Note 24 for additional information.\nTransfers of securities between AFS and HTM are non-cash transactions.\n228\nJPMorgan Chase & Co./2025 Form 10-K\nThe amortized costs and estimated fair values of the investment securities portfolio were as follows for the dates indicated.\n2025\n2024\nDecember 31, (in millions)\nAmortized cost\n(c)(d)\nGross unrealized gains\nGross unrealized losses\nFair\nvalue\nAmortized cost\n(c)(d)\nGross unrealized gains\nGross unrealized losses\nFair\nvalue\nAvailable-for-sale securities\nMortgage-backed securities:\nU.S. GSEs and government agencies\n$\n92,112\n\n$\n1,075\n\n$\n2,215\n\n$\n90,972\n\n$\n95,671\n\n$\n251\n\n$\n4,029\n\n$\n91,893\n\nResidential:\nU.S.\n5,564\n\n38\n\n17\n\n5,585\n\n4,242\n\n16\n\n50\n\n4,208\n\nNon-U.S.\n405\n\n1\n\n\u2014\n\n406\n\n600\n\n3\n\n\u2014\n\n603\n\nCommercial\n4,466\n\n48\n\n30\n\n4,484\n\n4,115\n\n20\n\n70\n\n4,065\n\nTotal mortgage-backed securities\n102,547\n\n1,162\n\n2,262\n\n101,447\n\n104,628\n\n290\n\n4,149\n\n100,769\n\nU.S. Treasury and government agencies\n313,470\n\n2,384\n\n32\n\n315,822\n\n235,495\n\n545\n\n1,261\n\n234,779\n\nObligations of U.S. states and municipalities\n20,915\n\n118\n\n793\n\n20,240\n\n18,337\n\n110\n\n534\n\n17,913\n\nNon-U.S. government debt securities\n45,676\n\n215\n\n236\n\n45,655\n\n36,655\n\n94\n\n504\n\n36,245\n\nCorporate debt securities\n139\n\n\u2014\n\n11\n\n128\n\n71\n\n\u2014\n\n1\n\n70\n\nAsset-backed securities:\nCollateralized loan obligations\n21,897\n\n51\n\n1\n\n21,947\n\n14,887\n\n59\n\n3\n\n14,943\n\nOther\n1,941\n\n25\n\n7\n\n1,959\n\n2,125\n\n17\n\n9\n\n2,133\n\nUnallocated portfolio layer fair value basis adjustments\n(a)\n641\n\n(\n641\n)\n\u2014\n\nNA\n(\n1,153\n)\n\u2014\n\n(\n1,153\n)\nNA\nTotal available-for-sale securities\n507,226\n\n3,314\n\n3,342\n\n507,198\n\n411,045\n\n1,115\n\n5,308\n\n406,852\n\nHeld-to-maturity securities\n(b)\nMortgage-backed securities:\nU.S. GSEs and government agencies\n89,073\n\n57\n\n9,200\n\n79,930\n\n97,177\n\n6\n\n13,531\n\n83,652\n\nU.S. Residential\n7,542\n\n6\n\n570\n\n6,978\n\n8,605\n\n4\n\n904\n\n7,705\n\nCommercial\n6,493\n\n19\n\n234\n\n6,278\n\n8,817\n\n24\n\n389\n\n8,452\n\nTotal mortgage-backed securities\n103,108\n\n82\n\n10,004\n\n93,186\n\n114,599\n\n34\n\n14,824\n\n99,809\n\nU.S. Treasury and government agencies\n132,727\n\n134\n\n6,414\n\n126,447\n\n108,632\n\n\u2014\n\n11,212\n\n97,420\n\nObligations of U.S. states and municipalities\n8,600\n\n17\n\n609\n\n8,008\n\n9,310\n\n32\n\n631\n\n8,711\n\nAsset-backed securities:\nCollateralized loan obligations\n24,695\n\n29\n\n6\n\n24,718\n\n40,573\n\n84\n\n14\n\n40,643\n\nOther\n1,004\n\n1\n\n20\n\n985\n\n1,354\n\n2\n\n39\n\n1,317\n\nTotal held-to-maturity securities\n270,134\n\n263\n\n17,053\n\n253,344\n\n274,468\n\n152\n\n26,720\n\n247,900\n\nTotal investment securities, net of allowance for credit losses\n$\n777,360\n\n$\n3,577\n\n$\n20,395\n\n$\n760,542\n\n$\n685,513\n\n$\n1,267\n\n$\n32,028\n\n$\n654,752\n\n(a)\nRepresents the amount of portfolio layer method basis adjustments related to AFS securities hedged in a closed portfolio. Under U.S. GAAP portfolio layer method basis adjustments are not allocated to individual securities, however, the amounts impact the unrealized gains or losses in the table for the types of securities being hedged. Refer to Note 1 and Note 5 for additional information.\n(b)\nThe Firm purchased $\n5.4\n billion, $\n4.7\n billion and $\n4.1\n billion of HTM securities for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n(c)\nThe amortized cost of investment securities is reported net of allowance for credit losses of $\n106\n\u00a0million, $\n152\n\u00a0million and $\n128\n\u00a0million at December\u00a031, 2025, 2024 and 2023, respectively.\n(d)\nExcludes $\n4.6\n\u00a0billion and $\n3.7\n\u00a0billion of accrued interest receivable at December\u00a031, 2025 and 2024, respectively, included in accrued interest and accounts receivable on the Consolidated balance sheets. The Firm generally does not recognize an allowance for credit losses on accrued interest receivable, consistent with its policy to write them off no later than 90 days past due by reversing interest income. The Firm did\nno\nt reverse through interest income any accrued interest receivable for the years ended December\u00a031, 2025 and 2024.\nJPMorgan Chase & Co./2025 Form 10-K\n229\nNotes to consolidated financial statements\nAt\n\nDecember\u00a031, 2025\n, the investment securities portfolio consisted of debt securities with an average credit rating of AA+ (based upon external ratings where available, and where not available, based primarily upon internal risk ratings).\nRisk ratings are used to identify the credit quality of securities and differentiate risk within the portfolio.\n The Firm\u2019s internal risk ratings generally align with the qualitative characteristics (e.g., borrower capacity to meet financial commitments and vulnerability to changes in the economic environment) defined by S&P and\nMoody\u2019s, however, the quantitative characteristics (e.g., probability of default (\u201cPD\u201d) and loss given default (\u201cLGD\u201d)) may differ as they reflect internal historical experiences and assumptions.\n\nRisk ratings are assigned at acquisition, reviewed on a regular and ongoing basis by Credit Risk Management and adjusted as necessary over the life of the investment for updated information affecting the issuer\u2019s ability to fulfill its obligations.\nAFS securities impairment\nThe following tables present the fair value and gross unrealized losses by aging category for AFS securities at December\u00a031, 2025 and 2024. The tables exclude U.S. Treasury and government agency securities and U.S. GSE and government agency MBS with unrealized losses of $\n2.2\n billion and $\n5.3\n billion, at December\u00a031, 2025 and 2024, respectively; changes in the value of these securities are generally driven by changes in interest rates rather than changes in their credit profile given the explicit or implicit guarantees provided by the U.S. government.\nAvailable-for-sale securities with gross unrealized losses\nLess than 12 months\n12 months or more\nYear ended December 31, 2025\n(in millions)\nFair value\nGross\nunrealized losses\nFair value\nGross\nunrealized losses\nTotal fair value\nTotal gross unrealized losses\nAvailable-for-sale securities\nMortgage-backed securities:\nResidential:\nU.S.\n$\n36\n\n$\n\u2014\n\n$\n609\n\n$\n17\n\n$\n645\n\n$\n17\n\nNon-U.S.\n3\n\n\u2014\n\n20\n\n\u2014\n\n23\n\n\u2014\n\nCommercial\n142\n\n1\n\n576\n\n29\n\n718\n\n30\n\nTotal mortgage-backed securities\n181\n\n1\n\n1,205\n\n46\n\n1,386\n\n47\n\nObligations of U.S. states and municipalities\n5,519\n\n131\n\n9,597\n\n662\n\n15,116\n\n793\n\nNon-U.S. government debt securities\n9,324\n\n76\n\n4,954\n\n160\n\n14,278\n\n236\n\nCorporate debt securities\n114\n\n11\n\n\u2014\n\n\u2014\n\n114\n\n11\n\nAsset-backed securities:\nCollateralized loan obligations\n814\n\n\u2014\n\n143\n\n1\n\n957\n\n1\n\nOther\n63\n\n\u2014\n\n131\n\n7\n\n194\n\n7\n\nTotal available-for-sale securities with gross unrealized losses\n$\n16,015\n\n$\n219\n\n$\n16,030\n\n$\n876\n\n$\n32,045\n\n$\n1,095\n\nAvailable-for-sale securities with gross unrealized losses\nLess than 12 months\n12 months or more\nYear ended December 31, 2024\n(in millions)\nFair value\nGross\nunrealized losses\nFair value\nGross\nunrealized losses\nTotal fair value\nTotal gross unrealized losses\nAvailable-for-sale securities\nMortgage-backed securities:\nResidential:\nU.S.\n$\n1,505\n\n$\n6\n\n$\n925\n\n$\n44\n\n$\n2,430\n\n$\n50\n\nNon-U.S.\n\u2014\n\n\u2014\n\n30\n\n\u2014\n\n30\n\n\u2014\n\nCommercial\n763\n\n8\n\n1,184\n\n62\n\n1,947\n\n70\n\nTotal mortgage-backed securities\n2,268\n\n14\n\n2,139\n\n106\n\n4,407\n\n120\n\nObligations of U.S. states and municipalities\n10,037\n\n233\n\n2,412\n\n301\n\n12,449\n\n534\n\nNon-U.S. government debt securities\n14,234\n\n234\n\n4,184\n\n270\n\n18,418\n\n504\n\nCorporate debt securities\n9\n\n\u2014\n\n30\n\n1\n\n39\n\n1\n\nAsset-backed securities:\nCollateralized loan obligations\n2\n\n\u2014\n\n375\n\n3\n\n377\n\n3\n\nOther\n214\n\n1\n\n200\n\n8\n\n414\n\n9\n\nTotal available-for-sale securities with gross unrealized losses\n$\n26,764\n\n$\n482\n\n$\n9,340\n\n$\n689\n\n$\n36,104\n\n$\n1,171\n\n230\nJPMorgan Chase & Co./2025 Form 10-K\nAFS securities are considered impaired if the fair value is less than the amortized cost.\nThe Firm recognizes impairment losses in earnings if the Firm has the intent to sell the debt security, or if it is more likely than not that the Firm will be required to sell the debt security before recovery of its amortized cost. In these circumstances the impairment loss is recognized in investment securities gains/(losses) in the Consolidated Statements of Income and is equal to the full difference between the amortized cost (net of allowance if applicable) and the fair value of the security.\nFor impaired debt securities that the Firm has the intent and ability to hold, the securities are evaluated to determine if a credit loss exists. If it is determined that a credit loss exists, that loss is recognized as an allowance for credit losses through the provision for credit losses in the Consolidated Statements of Income, limited by the amount of impairment. Any impairment on debt securities that the Firm has the intent and ability to hold not due to credit losses is recorded in OCI.\nFactors considered in evaluating credit losses include adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a security; and payment structure of the security.\nWhen assessing securities issued in a securitization for credit losses, the Firm estimates cash flows considering relevant market and economic data, underlying loan-level data, and structural features of the securitization, such as subordination, excess spread, overcollateralization or other forms of credit enhancement, and compares the losses projected for the underlying collateral (\u201cpool losses\u201d) against the level of credit enhancement in the securitization structure to determine whether these features are sufficient to absorb the pool losses, or whether a credit loss exists.\nFor beneficial interests in securitizations that are rated below \u201cAA\u201d at their acquisition, or that can be contractually prepaid or otherwise settled in such a way that the Firm would not recover substantially all of its recorded investment, the Firm evaluates impairment for credit losses when there is an adverse change in expected cash flows.\nHTM securities \u2013 credit risk\nAllowance for credit losses\nThe allowance for credit losses on HTM securities represents expected credit losses over the remaining expected life of the securities.\nThe allowance for credit losses on HTM obligations of U.S. states and municipalities and commercial mortgage-backed securities is calculated by applying statistical credit loss factors (estimated PD and LGD)\nto the amortized cost. The credit loss factors are derived using a weighted average of five internally developed eight-quarter macroeconomic scenarios, followed by a single year straight-line interpolation to revert to long run historical information for periods beyond the forecast period. Refer to Note 13 for further information on the eight-quarter macroeconomic forecast.\nThe allowance for credit losses on HTM collateralized loan obligations and U.S. residential mortgage-backed securities is calculated as the difference between the amortized cost and the present value of the cash flows expected to be collected, discounted at the security\u2019s effective interest rate. These cash flow estimates are developed based on expectations of underlying collateral performance derived using the eight-quarter macroeconomic forecast and the single year straight-line interpolation, as well as considering the structural features of the security.\nThe application of different inputs and assumptions into the calculation of the allowance for credit losses is subject to significant management judgment, and emphasizing one input or assumption over another, or considering other inputs or assumptions, could affect the estimate of the allowance for credit losses on HTM securities.\nCredit quality indicator\nThe primary credit quality indicator for HTM securities is the risk rating assigned to each security.\nAt both December\u00a031, 2025 and 2024, all HTM securities were rated investment grade and were current and accruing, with approximately\n99\n% rated at least AA+ (based upon external ratings where available, and where not available, based primarily upon internal risk ratings).\nAllowance for credit losses on investment securities\nThe allowance for credit losses on investment securities as of December\u00a031, 2025 was $\n106\n\u00a0million, which included the impact of a $\n17\n\u00a0million reduction in allowance related to a sale of a corporate debt security. As of December\u00a031, 2024 and 2023, the allowance for credit losses in investment securities was $\n152\n\u00a0million and $\n128\n\u00a0million, respectively, which included a cumulative-effect adjustment to retained earnings related to the transfer of HTM securities to AFS for the year ended December\u00a031, 2023.\nSelected impacts of investment securities on the Consolidated statements of income\nYear ended December 31, (in millions)\n2025\n2024\n2023\nRealized gains\n$\n674\n\n$\n593\n\n$\n622\n\nRealized losses\n(\n731\n)\n(\n1,614\n)\n(\n3,802\n)\nInvestment securities losses\n$\n(\n57\n)\n$\n(\n1,021\n)\n$\n(\n3,180\n)\nProvision for credit losses\n$\n(\n28\n)\n$\n24\n\n$\n38\n\nJPMorgan Chase & Co./2025 Form 10-K\n231\nNotes to consolidated financial statements\nContractual maturities and yields\nThe following table presents the amortized cost and estimated fair value at December\u00a031, 2025, of JPMorganChase\u2019s investment securities portfolio by contractual maturity.\nBy remaining maturity\nDecember 31, 2025 (in millions)\nDue in one\nyear or less\nDue after one year through five years\nDue after five years through 10 years\nDue after\n10 years\n(c)\nTotal\nAvailable-for-sale securities\nMortgage-backed securities\nAmortized cost\n$\n986\n\n$\n12,032\n\n$\n5,186\n\n$\n84,351\n\n$\n102,555\n\nFair value\n978\n\n12,215\n\n5,258\n\n82,996\n\n101,447\n\nAverage yield\n(a)\n2.79\n\n%\n4.58\n\n%\n4.62\n\n%\n4.56\n\n%\n4.55\n\n%\nU.S. Treasury and government agencies\nAmortized cost\n$\n37,727\n\n$\n224,284\n\n$\n45,128\n\n$\n6,331\n\n$\n313,470\n\nFair value\n37,869\n\n225,962\n\n45,529\n\n6,462\n\n315,822\n\nAverage yield\n(a)\n4.17\n\n%\n4.04\n\n%\n4.20\n\n%\n4.58\n\n%\n4.09\n\n%\nObligations of U.S. states and municipalities\nAmortized cost\n$\n\u2014\n\n$\n21\n\n$\n138\n\n$\n20,756\n\n$\n20,915\n\nFair value\n\u2014\n\n21\n\n133\n\n20,086\n\n20,240\n\nAverage yield\n(a)\n\u2014\n\n%\n3.95\n\n%\n3.89\n\n%\n5.11\n\n%\n5.10\n\n%\nNon-U.S. government debt securities\nAmortized cost\n$\n10,838\n\n$\n21,233\n\n$\n11,769\n\n$\n1,836\n\n$\n45,676\n\nFair value\n10,848\n\n21,305\n\n11,719\n\n1,783\n\n45,655\n\nAverage yield\n(a)\n3.51\n\n%\n4.03\n\n%\n3.53\n\n%\n3.21\n\n%\n3.75\n\n%\nCorporate debt securities\nAmortized cost\n$\n49\n\n$\n123\n\n$\n\u2014\n\n$\n\u2014\n\n$\n172\n\nFair value\n13\n\n115\n\n\u2014\n\n\u2014\n\n128\n\nAverage yield\n(a)\n17.50\n\n%\n15.66\n\n%\n\u2014\n\n%\n\u2014\n\n%\n16.18\n\n%\nAsset-backed securities\nAmortized cost\n$\n3\n\n$\n327\n\n$\n1,291\n\n$\n22,217\n\n$\n23,838\n\nFair value\n3\n\n329\n\n1,296\n\n22,278\n\n23,906\n\nAverage yield\n(a)\n5.30\n\n%\n5.62\n\n%\n5.71\n\n%\n5.04\n\n%\n5.08\n\n%\nTotal available-for-sale securities\nAmortized cost\n(b)\n$\n49,603\n\n$\n258,020\n\n$\n63,512\n\n$\n135,491\n\n$\n506,626\n\nFair value\n49,711\n\n259,947\n\n63,935\n\n133,605\n\n507,198\n\nAverage yield\n(a)\n4.01\n\n%\n4.07\n\n%\n4.14\n\n%\n4.71\n\n%\n4.24\n\n%\nHeld-to-maturity securities\nMortgage-backed securities\nAmortized cost\n$\n1,161\n\n$\n8,780\n\n$\n5,314\n\n$\n87,891\n\n$\n103,146\n\nFair value\n1,147\n\n8,319\n\n4,908\n\n78,812\n\n93,186\n\nAverage yield\n(a)\n1.90\n\n%\n2.47\n\n%\n3.21\n\n%\n2.90\n\n%\n2.87\n\n%\nU.S. Treasury and government agencies\nAmortized cost\n$\n17,328\n\n$\n91,142\n\n$\n24,257\n\n$\n\u2014\n\n$\n132,727\n\nFair value\n17,155\n\n87,552\n\n21,740\n\n\u2014\n\n126,447\n\nAverage yield\n(a)\n1.23\n\n%\n2.69\n\n%\n1.48\n\n%\n\u2014\n\n%\n2.28\n\n%\nObligations of U.S. states and municipalities\nAmortized cost\n$\n\u2014\n\n$\n53\n\n$\n286\n\n$\n8,288\n\n$\n8,627\n\nFair value\n\u2014\n\n50\n\n265\n\n7,693\n\n8,008\n\nAverage yield\n(a)\n\u2014\n\n%\n4.72\n\n%\n3.14\n\n%\n3.91\n\n%\n3.89\n\n%\nAsset-backed securities\nAmortized cost\n$\n\u2014\n\n$\n399\n\n$\n12,811\n\n$\n12,489\n\n$\n25,699\n\nFair value\n\u2014\n\n398\n\n12,815\n\n12,490\n\n25,703\n\nAverage yield\n(a)\n\u2014\n\n%\n2.94\n\n%\n4.47\n\n%\n4.62\n\n%\n4.52\n\n%\nTotal held-to-maturity securities\nAmortized cost\n(b)\n$\n18,489\n\n$\n100,374\n\n$\n42,668\n\n$\n108,668\n\n$\n270,199\n\nFair value\n18,302\n\n96,319\n\n39,728\n\n98,995\n\n253,344\n\nAverage yield\n(a)\n1.27\n\n%\n2.67\n\n%\n2.60\n\n%\n3.17\n\n%\n2.77\n\n%\n(a)\nAverage yield is computed using the effective yield of each security owned at the end of the period, weighted based on the amortized cost of each security. The effective yield considers the contractual coupon, amortization of premiums and accretion of discounts, and the effect of related hedging derivatives, including closed portfolio hedges. Taxable-equivalent amounts are used where applicable. The effective yield excludes unscheduled principal prepayments; and accordingly, actual maturities of securities may differ from their contractual or expected maturities as certain securities may be prepaid. However, for certain callable debt securities, the average yield is calculated to the earliest call date.\n(b)\nFor purposes of this table, the amortized cost of available-for-sale securities excludes the allowance for credit losses of $\n41\n million and the portfolio layer fair value hedge basis adjustments of $\n641\n million at December\u00a031, 2025. The amortized cost of held-to-maturity securities also excludes the allowance for credit losses of $\n65\n million at December\u00a031, 2025.\n(c)\nSubstantially all of the Firm\u2019s U.S. residential MBS and collateralized mortgage obligations are due in\n10\n years or more, based on contractual maturity. The estimated weighted-average life, which reflects anticipated future prepayments, is approximately\nseven years\n for agency residential MBS,\nsix years\n for agency residential collateralized mortgage obligations, and\nfour years\n for nonagency residential collateralized mortgage obligations.\n232\nJPMorgan Chase & Co./2025 Form 10-K\nNote 11 \u2013\nSecurities financing activities\nJPMorganChase enters into resale, repurchase, securities borrowed and securities loaned agreements (collectively, \u201csecurities financing agreements\u201d) primarily to finance the Firm\u2019s inventory positions, acquire securities to cover short sales, accommodate clients\u2019 financing needs, settle other securities obligations and to deploy the Firm\u2019s excess cash.\nSecurities financing agreements are treated as collateralized financings on the Firm\u2019s Consolidated balance sheets. Where appropriate under applicable accounting guidance, securities financing agreements with the same counterparty are reported on a net basis. Refer to Note 1 for further discussion of the offsetting of assets and liabilities. Fees received and paid in connection with securities financing agreements are recorded over the life of the agreement in interest income and interest expense on the Consolidated statements of income.\nThe Firm has elected the fair value option for certain securities financing agreements. Refer to Note 3 for further information regarding the fair value option. The securities financing agreements for which the fair value option has been elected are reported within securities purchased under resale agreements, securities loaned or sold under repurchase agreements, and securities borrowed on the Consolidated balance sheets. Generally, for agreements carried at fair value, current-period interest accruals are recorded within interest income and interest expense, with changes in fair value reported in principal transactions revenue. However, for financial instruments containing embedded derivatives that would be separately accounted for in accordance with accounting guidance for hybrid instruments, all changes in fair value, including any interest elements, are reported in principal transactions revenue.\nSecurities financing agreements not elected under the fair value option are measured at amortized cost. As a result of the Firm\u2019s credit risk mitigation practices described below, the Firm did not hold any allowance for credit losses with respect to resale and securities borrowed arrangements as of December 31, 2025 and 2024.\nCredit risk mitigation practices\nSecurities financing agreements expose the Firm primarily to credit and liquidity risk. To manage these risks, the Firm monitors the value of the underlying securities (predominantly high-quality securities collateral, including government-issued debt and U.S. GSEs and government agencies MBS) that it has received from or provided to its counterparties compared to the value of cash proceeds and exchanged collateral, and either requests additional collateral or returns securities or collateral when appropriate. Margin levels are initially established based upon the counterparty, the type of underlying securities, and the permissible collateral, and are monitored on an ongoing basis.\nIn resale and securities borrowed agreements, the Firm is exposed to credit risk to the extent that the value of the securities received is less than initial cash principal advanced and any collateral amounts exchanged. In repurchase and securities loaned agreements, credit risk exposure arises to the extent that the value of underlying securities advanced exceeds the value of the initial cash principal received, and any collateral amounts exchanged.\nAdditionally, the Firm typically enters into master netting agreements and other similar arrangements with its counterparties, which provide for the right to liquidate the underlying securities and any collateral amounts exchanged in the event of a counterparty default. It is also the Firm\u2019s policy to take possession, where possible, of the securities underlying resale and securities borrowed agreements. Refer to Note 29 for further information regarding assets pledged and collateral received in securities financing agreements.\nJPMorgan Chase & Co./2025 Form 10-K\n233\nNotes to consolidated financial statements\nThe table below summarizes the gross and net amounts of the Firm\u2019s securities financing agreements, as of December\u00a031, 2025 and 2024.\nWhen the Firm has obtained an appropriate legal opinion with respect to a master netting agreement with a counterparty and where other relevant netting criteria under U.S. GAAP are met, the Firm nets, on the Consolidated balance sheets, the balances outstanding under its securities financing agreements with the same counterparty. In addition, the Firm exchanges securities and/or cash collateral with its counterparty to reduce the economic exposure with the counterparty, but such collateral is not eligible for net Consolidated balance sheet presentation. Where the Firm has obtained an appropriate legal opinion with respect to the counterparty master netting agreement, such\ncollateral, along with securities financing balances that do not meet all these relevant netting criteria under U.S. GAAP, is presented in the table below as \u201cAmounts not nettable on the Consolidated balance sheets,\u201d and reduces the \u201cNet amounts\u201d presented. Where a legal opinion has not been either sought or obtained, the securities financing balances are presented gross in the \u201cNet amounts\u201d below. In transactions where the Firm is acting as the lender in a securities-for-securities lending agreement and receives securities that can be pledged or sold as collateral, the Firm recognizes the securities received at fair value within other assets and the obligation to return those securities within accounts payable and other liabilities on the Consolidated balance sheets.\nDecember 31, 2025\n(in millions)\nGross amounts\nAmounts netted on the Consolidated balance sheets\nAmounts presented on the Consolidated balance sheets\nAmounts not\nnettable on the Consolidated\nbalance sheets\n(b)\nNet amounts\n(c)\nAssets\nSecurities purchased under resale agreements\n$\n618,516\n\n$\n(\n282,090\n)\n$\n336,426\n\n$\n(\n324,217\n)\n$\n12,209\n\nSecurities borrowed\n357,361\n\n(\n71,170\n)\n286,191\n\n(\n234,466\n)\n51,725\n\nLiabilities\nSecurities sold under repurchase agreements\n$\n715,251\n\n$\n(\n282,090\n)\n$\n433,161\n\n$\n(\n397,550\n)\n$\n35,611\n\nSecurities loaned and other\n(a)\n86,829\n\n(\n71,170\n)\n15,659\n\n(\n15,534\n)\n125\n\nDecember 31, 2024\n(in millions)\nGross amounts\nAmounts netted on the Consolidated balance sheets\nAmounts presented on the Consolidated balance sheets\nAmounts not\nnettable on the Consolidated\nbalance sheets\n(b)\nNet amounts\n(c)\nAssets\nSecurities purchased under resale agreements\n$\n607,154\n\n$\n(\n312,183\n)\n$\n294,971\n\n$\n(\n282,220\n)\n$\n12,751\n\nSecurities borrowed\n267,917\n\n(\n48,371\n)\n219,546\n\n(\n170,702\n)\n48,844\n\nLiabilities\nSecurities sold under repurchase agreements\n$\n603,683\n\n$\n(\n312,183\n)\n$\n291,500\n\n$\n(\n249,763\n)\n$\n41,737\n\nSecurities loaned and other\n(a)\n58,989\n\n(\n48,371\n)\n10,618\n\n(\n10,557\n)\n61\n\n(a)\nIncludes securities-for-securities lending agreements of $\n6.6\n billion and $\n5.9\n billion at December\u00a031, 2025 and 2024, respectively, accounted for at fair value, where the Firm is acting as lender.\n(b)\nIn some cases, collateral exchanged with a counterparty exceeds the net asset or liability balance with that counterparty. In such cases, the amounts reported in this column are limited to the related net asset or liability with that counterparty.\n(c)\nIncludes securities financing agreements that provide collateral rights, but where an appropriate legal opinion with respect to the master netting agreement has not been either sought or obtained. At December\u00a031, 2025 and 2024, included $\n9.4\n billion and $\n8.7\n billion, respectively, of securities purchased under resale agreements; $\n44.0\n billion and $\n42.9\n billion, respectively, of securities borrowed; $\n34.9\n billion and $\n40.9\n billion, respectively, of securities sold under repurchase agreements; and securities loaned and other which were not material.\n234\nJPMorgan Chase & Co./2025 Form 10-K\nThe tables below present as of December\u00a031, 2025 and 2024 the types of financial assets pledged in securities financing agreements and the remaining contractual maturity of the securities financing agreements.\nGross liability balance\n2025\n2024\nDecember 31, (in millions)\nSecurities sold under repurchase agreements\nSecurities loaned and other\nSecurities sold under repurchase agreements\nSecurities loaned and other\nMortgage-backed securities:\nU.S. GSEs and government agencies\n$\n124,776\n\n$\n\u2014\n\n$\n82,645\n\n$\n\u2014\n\nResidential - nonagency\n1,685\n\n\u2014\n\n2,610\n\n\u2014\n\nCommercial - nonagency\n2,285\n\n\u2014\n\n2,344\n\n\u2014\n\nU.S. Treasury, GSEs and government agencies\n346,938\n\n703\n\n300,022\n\n759\n\nObligations of U.S. states and municipalities\n1,624\n\n\u2014\n\n1,872\n\n\u2014\n\nNon-U.S. government debt\n122,346\n\n1,415\n\n117,614\n\n1,852\n\nCorporate debt securities\n66,100\n\n3,433\n\n44,495\n\n4,033\n\nAsset-backed securities\n6,545\n\n\u2014\n\n4,619\n\n\u2014\n\nEquity securities\n42,952\n\n81,278\n\n47,462\n\n52,345\n\nTotal\n$\n715,251\n\n$\n86,829\n\n$\n603,683\n\n$\n58,989\n\nRemaining contractual maturity of the agreements\nDecember 31, 2025\n(in millions)\nOvernight and continuous\nUp to 30 days\n30 \u2013 90 days\nGreater than\n90 days\nTotal\nTotal securities sold under repurchase agreements\n$\n406,605\n\n$\n168,256\n\n$\n18,169\n\n$\n122,221\n\n$\n715,251\n\nTotal securities loaned and other\n78,233\n\n1,316\n\n976\n\n6,304\n\n86,829\n\nRemaining contractual maturity of the agreements\nDecember 31, 2024\n(in millions)\nOvernight and continuous\nUp to 30 days\n30 \u2013 90 days\nGreater than\n90 days\nTotal\nTotal securities sold under repurchase agreements\n$\n308,392\n\n$\n171,346\n\n$\n19,932\n\n$\n104,013\n\n$\n603,683\n\nTotal securities loaned and other\n54,066\n\n1,463\n\n1\n\n3,459\n\n58,989\n\nTransfers not qualifying for sale accounting\nAt December\u00a031, 2025 and 2024, the Firm held $\n787\n million and $\n805\n million, respectively, of financial assets for which the rights have been transferred to third parties; however, the transfers did not qualify as a sale in accordance with U.S. GAAP. These transfers have been recognized as collateralized financing transactions. The transferred assets are recorded in trading assets and loans, and the corresponding liabilities are recorded primarily in short-term borrowings and long-term debt on the Consolidated balance sheets.\n\nJPMorgan Chase & Co./2025 Form 10-K\n235\nNotes to consolidated financial statements\nNote 12 \u2013\nLoans\nLoan accounting framework\nThe accounting for a loan depends on management\u2019s strategy for the loan. The Firm accounts for loans based on the following categories:\n\u2022\nOriginated or purchased loans held-for-investment (i.e., \u201cretained\u201d)\n\u2022\nLoans held-for-sale\n\u2022\nLoans at fair value\nThe following provides a detailed accounting discussion of the Firm\u2019s loans by category:\nLoans held-for-investment\nOriginated or purchased loans held-for-investment, including PCD, are recorded at amortized cost, reflecting the principal amount outstanding, net of the following: unamortized deferred loan fees, costs, premiums or discounts; charge-offs; collection of cash; and foreign exchange. Credit card loans also include billed finance charges and fees.\nInterest income\nInterest income on performing loans held-for-investment is accrued and recognized as interest income at the contractual rate of interest. Purchase price discounts or premiums, as well as net deferred loan fees or costs, are recognized in interest income over the contractual life of the loan as an adjustment of yield.\nThe Firm classifies accrued interest on loans, including accrued but unbilled interest on credit card loans, in accrued interest and accounts receivable on the Consolidated balance sheets. For credit card loans, accrued interest once billed is then recognized in the loan balances, with the related allowance recorded in the allowance for credit losses. Changes in the allowance for credit losses on accrued interest on credit card loans are recognized in the provision for credit losses and charge-offs are recognized by reversing interest income. For other loans, the Firm generally does not recognize an allowance for credit losses on accrued interest receivables, consistent with its policy to write them off no later than\n90\n days past due by reversing interest income.\nNonaccrual loans\nNonaccrual loans are those on which the accrual of interest has been suspended. Loans (other than credit card loans and certain consumer loans insured by U.S. government agencies) are placed on nonaccrual status and considered nonperforming when full payment of principal and interest is not expected, regardless of delinquency status, or when principal and interest has been in default for a period of\n90\n days or more, unless the loan is both well-secured and in the process of collection. A loan is determined to be past due when the minimum payment is not received from\nthe borrower by the contractually specified due date or for certain loans (e.g., residential real estate loans), when a monthly payment is due and unpaid for\n30\n days or more. Wholesale loans may be placed on nonaccrual status prior to becoming\n90\n days past due, as delinquency is generally a lagging indicator of credit quality. The Firm carefully monitors wholesale borrower liquidity, cash flows, enterprise/asset values, access to capital, and other relevant factors to make judgments about the borrower\u2019s ability to make all contractual payments. Finally, collateral-dependent loans are typically maintained on nonaccrual status.\nOn the date a loan is placed on nonaccrual status, all interest accrued but not collected is reversed against interest income. In addition, the amortization of deferred amounts is suspended. Interest income on nonaccrual loans may be recognized as cash interest payments are received (i.e., on a cash basis) if the recorded loan balance is deemed fully collectible; however, if there is doubt regarding the ultimate collectibility of the recorded loan balance, all interest cash receipts are applied to reduce the carrying value of the loan (the cost recovery method). For consumer loans, application of this policy typically results in the Firm recognizing interest income on nonaccrual consumer loans on a cash basis.\nA loan may be returned to accrual status when repayment is reasonably assured and there has been demonstrated performance under the terms of the loan or, if applicable, the terms of the restructured loan.\nAs permitted by regulatory guidance, credit card loans are generally exempt from being placed on nonaccrual status; accordingly, interest and fees related to credit card loans continue to accrue until the loan is charged off or paid in full.\nAllowance for loan losses\nThe allowance for loan losses represents the estimated expected credit losses in the held-for-investment loan portfolio at the balance sheet date and is recognized on the balance sheet as a contra asset, which brings the amortized cost to the net carrying value. Changes in the allowance for loan losses resulting from lending-related activity, macroeconomic variables, changes in credit and other inputs are recorded in the provision for credit losses on the Firm\u2019s Consolidated statements of income. Refer to Note 13 for further information on the Firm\u2019s accounting policies for the allowance for loan losses.\nCharge-offs\nConsumer loans are generally charged off or charged down to the lower of the amortized cost or the net realizable value of the underlying collateral (i.e., fair value less estimated costs to sell), with an offset to the allowance for loan losses, upon reaching specified\n236\nJPMorgan Chase & Co./2025 Form 10-K\nstages of delinquency in accordance with standards established by the FFIEC. Residential real estate loans, unmodified credit card loans and scored business banking loans are generally charged off no later than\n180\n days past due. Scored auto and closed-end consumer loans, including modified credit card accounts placed on a fixed payment plan, are charged off no later than\n120\n days past due.\nCertain consumer loans are charged off or charged down to their net realizable value earlier than the FFIEC charge-off standards in the following circumstances:\n\u2022\nLoans modified to borrowers experiencing financial difficulty that are determined to be collateral-dependent.\n\u2022\nLoans to borrowers who have experienced an event that suggests a loss is either known or highly certain are subject to accelerated charge-off standards (e.g., residential real estate and auto loans are charged off or charged down within\n60\n days of receiving notification of a bankruptcy filing).\n\u2022\nAuto loans upon repossession of the automobile.\nOther than in certain limited circumstances, the Firm typically does not recognize charge-offs on the government-guaranteed portion of loans.\nWholesale loans are charged off when they are deemed to be uncollectible. For loans that are not collateral-dependent, the determination of whether to recognize a charge-off as well as amount includes many factors, including the Firm\u2019s confidence and visibility of the loan\u2019s impairment, after considering the prioritization of the Firm\u2019s claim in bankruptcy, expectations of the workout/restructuring of the loan and valuation of the borrower\u2019s equity or the loan collateral.\nCollateral-dependent loans are charged down to the lower of its amortized cost or the estimated net realizable value of the underlying collateral, the determination of the fair value of the collateral depends on the type of collateral (e.g., securities, real estate). In cases where the collateral is in the form of liquid securities, the fair value is based on quoted market prices or broker quotes. For illiquid securities or other financial assets, the fair value of the collateral is generally estimated using a discounted cash flow model.\nFor residential real estate loans, collateral values are based upon external valuation sources. When it becomes likely that a borrower is either unable or unwilling to pay, the Firm utilizes a broker\u2019s price opinion, appraisal and/or an automated valuation model of the home based on an exterior-only valuation (\u201cexterior opinions\u201d), which is then updated at least every\n12\n months, or more frequently depending on various market factors. As soon as practicable after\nthe Firm receives the property in satisfaction of a debt (e.g., by taking legal title or physical possession), the Firm generally obtains an appraisal based on an inspection that includes the interior of the home (\u201cinterior appraisals\u201d). Exterior opinions and interior appraisals are discounted based upon the Firm\u2019s experience with actual liquidation values as compared with the estimated values provided by exterior opinions and interior appraisals, considering state-specific factors.\nFor commercial real estate loans, collateral values are generally based on appraisals from internal and external valuation sources. Collateral values are typically updated every\nsix\n to\ntwelve months\n, either by obtaining a new appraisal or by performing an internal analysis, in accordance with the Firm\u2019s policies. The Firm also considers both borrower- and market-specific factors, which may result in obtaining appraisal updates or broker price opinions at more frequent intervals.\nLoans held-for-sale\nLoans held-for-sale are measured at the lower of cost or fair value, with valuation changes recorded in noninterest revenue. For consumer loans, the valuation is performed on a portfolio basis. For wholesale loans, the valuation is performed on an individual loan basis.\nInterest income on loans held-for-sale is accrued and recognized based on the contractual rate of interest.\nLoan origination fees or costs and purchase price discounts or premiums are deferred in a contra loan account until the related loan is sold. The deferred fees or costs and discounts or premiums are an adjustment to the basis of the loan and therefore are included in the periodic determination of the lower of cost or fair value adjustments and/or the gain or loss recognized at the time of sale.\nBecause these loans are recognized at the lower of cost or fair value, the Firm\u2019s allowance for loan losses and charge-off policies do not apply to these loans. However, loans held-for-sale are subject to the Firm\u2019s nonaccrual policies.\nLoans at fair value\nLoans for which the fair value option has been elected are measured at fair value, with changes in fair value recorded in noninterest revenue.\nInterest income on these loans is accrued and recognized based on the contractual rate of interest. Loan origination fees are recognized upfront in noninterest revenue. Loan origination costs are recognized in the associated expense category as incurred.\nBecause these loans are recognized at fair value, the Firm\u2019s allowance for loan losses and charge-off\nJPMorgan Chase & Co./2025 Form 10-K\n237\nNotes to consolidated financial statements\npolicies do not apply to these loans. However, loans at fair value are subject to the Firm\u2019s nonaccrual policies.\nRefer to Note 3 for further information on the Firm\u2019s elections of fair value accounting under the fair value option. Refer to Note 2 and Note 3 for further information on loans carried at fair value and classified as trading assets.\nLoan classification changes\nLoans in the held-for-investment portfolio that management decides to sell are transferred to the held-for-sale portfolio at the lower of cost or fair value on the date of transfer. Credit-related losses are charged against the allowance for loan losses; non-credit related losses such as those due to changes in interest rates or foreign currency exchange rates are recognized in noninterest revenue.\nIn the event that management decides to retain a loan in the held-for-sale portfolio, the loan is transferred to the held-for-investment portfolio at amortized cost on the date of transfer. These loans are subsequently assessed for impairment based on the Firm\u2019s allowance methodology. Refer to Note 13 for a further discussion of the methodologies used in establishing the Firm\u2019s allowance for loan losses.\nLoan modifications\nThe Firm seeks to modify certain loans in conjunction with its loss mitigation activities. Through the modification, JPMorganChase grants one or more concessions to a borrower who is experiencing financial difficulty in order to minimize the Firm\u2019s economic loss and avoid foreclosure or repossession of the collateral, and to ultimately maximize payments received by the Firm from the borrower. The concessions granted vary by program and by borrower-specific characteristics, and may include interest rate reductions, term extensions, other-than-insignificant payment delays or principal forgiveness.\nLoans, except for credit card loans, reported as FDMs are generally placed on nonaccrual status, although in many cases such loans were already on nonaccrual status prior to modification. These loans may be returned to performing status (the accrual of interest is resumed) if the following criteria are met: (i) the borrower has performed under the modified terms for a minimum of\nsix months\n and/or\nsix\n payments, and (ii) the Firm has an expectation that repayment of the modified loan is reasonably assured based on, for example, the borrower\u2019s debt capacity and level of future earnings, collateral values, LTV ratios, and other current market considerations. In certain limited and well-defined circumstances in which the loan is current at the modification date, such loans are not placed on nonaccrual status at the time of modification.\nThe allowance for credit losses associated with FDMs is measured using the Firm\u2019s established allowance\nmethodology, which considers the expected default rates for the modified loans. Refer to Note 13 for further discussion.\nForeclosed\n\nproperty\n\nThe Firm acquires property from borrowers through loan restructurings, workouts, and foreclosures. Property acquired may include real property (e.g., residential real estate, land, and buildings) and other commercial and personal property (e.g., automobiles, aircraft, railcars, and ships).\nThe Firm recognizes foreclosed property upon receiving assets in satisfaction of a loan (e.g., by taking legal title or physical possession). For loans collateralized by real property, the Firm generally recognizes the asset received at foreclosure sale or upon the execution of a deed in lieu of foreclosure transaction with the borrower. Foreclosed assets are reported in other assets on the Consolidated balance sheets and initially recognized at fair value less estimated costs to sell. Each quarter the fair value of the acquired property is reviewed and adjusted, if necessary, to the lower of cost or fair value. Subsequent adjustments to fair value are charged/credited to noninterest revenue. Operating expense, such as real estate taxes and maintenance, are charged to other expense.\n\n238\nJPMorgan Chase & Co./2025 Form 10-K\nLoan portfolio\nThe Firm\u2019s loan portfolio is divided into\nthree\n portfolio segments, which are the same segments used by the Firm to determine the allowance for loan losses: Consumer, excluding credit card; Credit card; and Wholesale. Within each portfolio segment the Firm monitors and assesses the credit risk in the following classes of loans, based on the risk characteristics of each loan class.\nConsumer, excluding\ncredit card\nCredit card\nWholesale\n(c)(d)\n\u2022 Residential real estate\n(a)\n\u2022 Auto and other\n(b)\n\u2022 Credit card loans\n\u2022 Secured by real estate\n\u2022 Commercial and industrial\n\u2022 Other\n(e)\n(a)\nIncludes scored mortgage and home equity loans held in CCB and AWM, and scored mortgage loans held in CIB.\n(b)\nIncludes scored auto, business banking and consumer unsecured loans as well as overdrafts, primarily in CCB.\n(c)\nIncludes loans held in CIB, AWM, Corporate, and risk-rated exposure held in CCB, for which the wholesale methodology is applied when determining the allowance for loan losses.\n(d)\nThe wholesale portfolio segment's classes align with loan classifications as defined by the Federal Reserve Board (\u201cFRB\u201d) in effect at each period presented, based on the loan's collateral, purpose, and type of borrower.\n(e)\nIncludes loans to financial institutions, personal investment companies and trusts, individuals and individual entities (predominantly Global Private Bank clients within AWM and J.P. Morgan Wealth Management within CCB), states and political subdivisions, nonprofits, as well as loans to SPEs. Refer to Note 14 for more information on SPEs.\nThe following tables summarize the Firm\u2019s loan balances by portfolio segment.\nDecember\u00a031, 2025\n(in millions)\nConsumer, excluding credit card\nCredit card\nWholesale\nTotal\n(a)(b)\nRetained\n$\n368,741\n\n$\n247,797\n\n$\n792,367\n\n$\n1,408,905\n\nHeld-for-sale\n334\n\n\u2014\n\n13,506\n\n13,840\n\nAt fair value\n33,183\n\n\u2014\n\n37,501\n\n70,684\n\nTotal\n$\n402,258\n\n$\n247,797\n\n$\n843,374\n\n$\n1,493,429\n\nDecember\u00a031, 2024\n(in millions)\nConsumer, excluding credit card\nCredit card\nWholesale\nTotal\n(a)(b)\nRetained\n$\n376,334\n\n$\n232,860\n\n$\n690,396\n\n$\n1,299,590\n\nHeld-for-sale\n945\n\n\u2014\n\n6,103\n\n7,048\n\nAt fair value\n15,531\n\n\u2014\n\n25,819\n\n41,350\n\nTotal\n$\n392,810\n\n$\n232,860\n\n$\n722,318\n\n$\n1,347,988\n\n(a)\nExcludes $\n7.0\n billion and $\n6.6\n billion of accrued interest receivable at December\u00a031, 2025 and 2024, respectively. The Firm wrote off accrued interest receivable of $\n109\n million and $\n84\n million for the years ended December\u00a031, 2025 and 2024, respectively.\n(b)\nLoans (other than those for which the fair value option has been elected) are presented net of unamortized discounts and premiums and net deferred loan fees or costs, which were not material as of December\u00a031, 2025 and 2024. For the discount associated with First Republic loans, refer to Note 34 on pages 312\u2013314.\nThe following tables provide information about the amounts paid or received for retained loans purchased and sold during the periods indicated. Retained loans reclassified to held-for-sale during the periods indicated are reported at the lower of cost or market value on the date of transfer. Loans that were reclassified to held-for-sale and sold in a subsequent period are excluded from the sales line of these tables.\nYear ended December 31, 2025\n(in millions)\nConsumer, excluding\ncredit card\nCredit card\nWholesale\nTotal\nPurchases\n$\n756\n\n(b)(c)\n$\n\u2014\n\n$\n1,696\n\n$\n2,452\n\nSales\n3,006\n\n\u2014\n\n52,577\n\n55,583\n\nRetained loans reclassified to held-for-sale\n(a)\n332\n\n\u2014\n\n1,220\n\n1,552\n\nYear ended December 31, 2024\n(in millions)\nConsumer, excluding\ncredit card\nCredit card\nWholesale\nTotal\nPurchases\n$\n647\n\n(b)(c)\n$\n\u2014\n\n$\n1,432\n\n$\n2,079\n\nSales\n10,440\n\n\u2014\n\n45,147\n\n55,587\n\nRetained loans reclassified to held-for-sale\n(a)\n1,656\n\n\u2014\n\n749\n\n2,405\n\nJPMorgan Chase & Co./2025 Form 10-K\n239\nNotes to consolidated financial statements\nYear ended December 31, 2023\n(in millions)\nConsumer, excluding\ncredit card\nCredit card\nWholesale\nTotal\nPurchases\n$\n92,205\n\n(b)(c)(d)\n$\n\u2014\n\n$\n60,300\n\n(d)\n$\n152,505\n\nSales\n2,202\n\n\u2014\n\n43,949\n\n46,151\n\nRetained loans reclassified to held-for-sale\n(a)\n274\n\n\u2014\n\n1,486\n\n1,760\n\n(a)\nReclassifications of loans to held-for-sale are non-cash transactions.\n(b)\nIncludes purchases of residential real estate loans, including the Firm\u2019s voluntary repurchases of certain delinquent loans from loan pools as permitted by Government National Mortgage Association (\u201cGinnie Mae\u201d) guidelines for the years ended December\u00a031, 2025, 2024 and 2023. The Firm typically elects to repurchase these delinquent loans as it continues to service them and/or manage the foreclosure process in accordance with applicable requirements of Ginnie Mae, FHA, RHS, and/or VA.\n(c)\nExcludes purchases of retained loans of $\n3.7\n billion, $\n902\n million and $\n5.1\n billion for the years ended December\u00a031, 2025, 2024 and 2023, respectively, which are predominantly sourced through the correspondent origination channel and underwritten in accordance with the Firm\u2019s standards.\n(d)\nIncludes loans acquired in the First Republic acquisition consisting of $\n91.9\n billion in Consumer, excluding credit card and $\n59.2\n billion in Wholesale. Refer to Note 34 for additional information.\nGains and losses on sales of loans\nThe following table provides information on the net gains/(losses) on sales of loans and lending-related commitments (including adjustments to record loans and lending-related commitments held-for-sale at the lower of cost or fair value), which were recognized in noninterest revenue. In addition, the sale of loans may also result in write downs, recoveries or changes in the allowance recognized in the provision for credit losses.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nNet gains/(losses) on sales of loans and lending-related commitments\n(a)\n$\n208\n\n$\n154\n\n$\n56\n\n(a)\nIncludes $\n148\n\u00a0million, $\n113\n\u00a0million and $\n62\n\u00a0million related to loans for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n240\nJPMorgan Chase & Co./2025 Form 10-K\nConsumer, excluding credit card loan portfolio\nConsumer loans, excluding credit card loans, consist primarily of scored residential mortgages, home equity loans and lines of credit, auto and business banking loans, with a focus on serving the prime consumer credit market. These loans include home equity loans secured by junior liens and prime mortgage loans with an interest-only payment period.\nThe following table provides information about retained consumer loans, excluding credit card, by class.\nDecember 31,\n(in millions)\n2025\n2024\nResidential real estate\n$\n303,531\n\n$\n309,513\n\nAuto and other\n65,210\n\n66,821\n\nTotal retained loans\n$\n368,741\n\n$\n376,334\n\nDelinquency rates are the primary credit quality indicator for consumer loans. Loans that are more than\n30\n days past due provide an early warning of borrowers who may be experiencing financial difficulties and/or who may be unable or unwilling to repay the loan. As the loan continues to age, it becomes more clear whether the borrower is likely to be unable or unwilling to pay. In the case of residential real estate loans, late-stage delinquencies (greater than\n150\n days past due) are a strong indicator of loans that will ultimately result in a foreclosure or similar liquidation transaction. In addition to delinquency rates, other credit quality indicators for consumer loans vary based on the class of loan, as follows:\n\u2022\nFor residential real estate loans, the current estimated LTV ratio, or the combined LTV ratio in the case of junior lien loans, is an indicator of the potential loss severity in the event of default. Additionally, LTV or combined LTV ratios can provide insight into a borrower\u2019s continued willingness to pay, as the delinquency rate of high-LTV loans tends to be greater than that for loans where the borrower has equity in the collateral. The geographic distribution of the loan collateral also provides insight as to the credit quality of the portfolio, as factors such as the regional economy, home price changes and specific events such as natural disasters, will affect credit quality. The borrower\u2019s current or \u201crefreshed\u201d FICO score is a secondary credit quality indicator for certain loans, as FICO scores are an indication of the borrower\u2019s credit payment history. Thus, a loan to a borrower with a low FICO score (less than 660) is considered to be of higher risk than a loan to a borrower with a higher FICO score. Further, a loan to a borrower with a high LTV ratio and a low FICO score is at greater risk of default than a loan to a borrower that has both a high LTV ratio and a high FICO score.\n\u2022\nFor scored auto and business banking loans, geographic distribution is an indicator of the credit performance of the portfolio. Similar to residential real estate loans, geographic distribution provides insights into the portfolio performance based on regional economic activity and events.\nJPMorgan Chase & Co./2025 Form 10-K\n241\nNotes to consolidated financial statements\nResidential real estate\nDelinquency is the primary credit quality indicator for retained residential real estate loans.\nThe following tables provide information on delinquency and gross charge-offs.\nAs of or for the year ended December\u00a031, 2025\n(in millions, except ratios)\nTerm loans by origination year\n(c)\nRevolving loans\nTotal\n2025\n2024\n2023\n2022\n2021\nPrior to 2021\nWithin the revolving period\nConverted to term loans\nLoan delinquency\n(a)\nCurrent\n$\n21,179\n\n$\n9,894\n\n$\n14,334\n\n$\n57,258\n\n$\n74,916\n\n$\n110,489\n\n$\n6,644\n\n$\n6,246\n\n$\n300,960\n\n30\u2013149 days past due\n4\n\n16\n\n36\n\n98\n\n99\n\n770\n\n27\n\n184\n\n1,234\n\n150 or more days past due\n\u2014\n\n12\n\n68\n\n242\n\n231\n\n653\n\n12\n\n119\n\n1,337\n\nTotal retained loans\n$\n21,183\n\n$\n9,922\n\n$\n14,438\n\n$\n57,598\n\n$\n75,246\n\n$\n111,912\n\n$\n6,683\n\n$\n6,549\n\n$\n303,531\n\n% of 30+ days past due to total retained loans\n(b)\n0.02\n\n%\n0.28\n\n%\n0.72\n\n%\n0.59\n\n%\n0.44\n\n%\n1.26\n\n%\n0.58\n\n%\n4.63\n\n%\n0.84\n\n%\nGross charge-offs\n$\n\u2014\n\n$\n2\n\n$\n4\n\n$\n7\n\n$\n10\n\n$\n9\n\n$\n22\n\n$\n4\n\n$\n58\n\nAs of or for the year ended December\u00a031, 2024\n(in millions, except ratios)\nTerm loans by origination year\n(c)\nRevolving loans\nTotal\n2024\n2023\n2022\n2021\n2020\nPrior to 2020\nWithin the revolving period\nConverted to term loans\nLoan delinquency\n(a)\nCurrent\n$\n12,301\n\n$\n17,280\n\n$\n61,337\n\n$\n79,760\n\n$\n52,289\n\n$\n70,270\n\n$\n6,974\n\n$\n7,088\n\n$\n307,299\n\n30\u2013149 days past due\n13\n\n54\n\n139\n\n110\n\n59\n\n747\n\n53\n\n204\n\n1,379\n\n150 or more days past due\n\u2014\n\n11\n\n71\n\n68\n\n49\n\n501\n\n8\n\n127\n\n835\n\nTotal retained loans\n$\n12,314\n\n$\n17,345\n\n$\n61,547\n\n$\n79,938\n\n$\n52,397\n\n$\n71,518\n\n$\n7,035\n\n$\n7,419\n\n$\n309,513\n\n% of 30+ days past due to total retained loans\n(b)\n0.11\n\n%\n0.37\n\n%\n0.34\n\n%\n0.22\n\n%\n0.21\n\n%\n1.72\n\n%\n0.87\n\n%\n4.46\n\n%\n0.71\n\n%\nGross charge-offs\n$\n\u2014\n\n$\n\u2014\n\n$\n1\n\n$\n1\n\n$\n\u2014\n\n$\n176\n\n$\n21\n\n$\n7\n\n$\n206\n\n(a)\nIndividual delinquency classifications include mortgage loans insured by U.S. government agencies which were not material at December\u00a031, 2025 and 2024.\n(b)\nExcludes mortgage loans that are 30 or more days past due insured by U.S. government agencies which were not material at December\u00a031, 2025 and 2024. These amounts have been excluded based upon the government guarantee.\n(c)\nPurchased loans are included in the year in which they were originated.\nApproximately\n37\n% of the total revolving loans are senior lien loans; the remaining balance are junior lien loans. The lien position the Firm holds is considered in the Firm\u2019s allowance for credit losses. Revolving loans that have been converted to term loans have higher delinquency rates than those that are still within the revolving period. That is primarily because the fully-amortizing payment that is generally required for those products is higher than the minimum payment options available for revolving loans within the revolving period.\n242\nJPMorgan Chase & Co./2025 Form 10-K\nNonaccrual loans and other credit quality indicators\nThe following table provides information on nonaccrual and other credit quality indicators for retained residential real estate loans.\n(in millions, except weighted-average data)\nDecember 31, 2025\nDecember 31, 2024\nNonaccrual loans\n(a)(b)(c)(d)\n$\n3,632\n\n$\n2,984\n\nCurrent estimated LTV ratios\n(e)(f)(g)\nGreater than 125% and refreshed FICO scores:\nEqual to or greater than 660\n$\n71\n\n$\n72\n\nLess than 660\n4\n\n3\n\nGreater than 100% but less than or equal to 125% and refreshed FICO scores:\nEqual to or greater than 660\n282\n\n161\n\nLess than 660\n5\n\n5\n\nGreater than 80% but less than or equal to 100% and refreshed FICO scores:\nEqual to or greater than 660\n5,990\n\n4,962\n\nLess than 660\n131\n\n73\n\nLess than or equal to 80% and refreshed FICO scores:\nEqual to or greater than 660\n287,923\n\n294,797\n\nLess than 660\n8,435\n\n8,534\n\nNo FICO/LTV available\n(h)\n690\n\n906\n\nTotal retained loans\n$\n303,531\n\n$\n309,513\n\nWeighted-average LTV ratio\n(e)(i)\n48\n\n%\n47\n\n%\nWeighted-average FICO\n(f)(i)\n775\n\n774\n\nGeographic region\n(h)(j)\nCalifornia\n$\n117,500\n\n$\n120,944\n\nNew York\n46,378\n\n46,854\n\nFlorida\n21,864\n\n21,820\n\nTexas\n14,398\n\n14,531\n\nMassachusetts\n12,985\n\n13,511\n\nColorado\n10,316\n\n10,465\n\nWashington\n9,408\n\n9,372\n\nIllinois\n9,152\n\n9,835\n\nNew Jersey\n7,486\n\n7,554\n\nConnecticut\n6,823\n\n6,854\n\nAll other\n47,221\n\n47,773\n\nTotal retained loans\n$\n303,531\n\n$\n309,513\n\n(a)\nIncludes collateral-dependent residential real estate loans that are charged down to the fair value of the underlying collateral less costs to sell. The Firm reports, in accordance with regulatory guidance, residential real estate loans that have been discharged under Chapter 7 bankruptcy and not reaffirmed by the borrower (\u201cChapter 7 loans\u201d) as collateral-dependent nonaccrual loans, regardless of their delinquency status. At December\u00a031, 2025, approximately\n9\n% of Chapter 7 residential real estate loans were 30 days or more past due.\n(b)\nMortgage loans insured by U.S. government agencies excluded from nonaccrual loans were not material at December\u00a031, 2025 and 2024.\n(c)\nGenerally, all consumer nonaccrual loans have an allowance. In accordance with regulatory guidance, certain nonaccrual loans that are considered collateral-dependent have been charged down to the lower of amortized cost or the fair value of their underlying collateral less costs to sell. If the value of the underlying collateral improves subsequent to charge down, the related allowance may be negative.\n(d)\nInterest income on nonaccrual loans recognized on a cash basis was $\n147\n million and $\n160\n million for the years ended December\u00a031, 2025 and 2024, respectively.\n(e)\nRepresents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. Current estimated combined LTV for junior lien home equity loans considers all available lien positions, as well as unused lines, related to the property.\n(f)\nRefreshed FICO scores represent each borrower\u2019s most recent credit score, which is obtained by the Firm on at least a quarterly basis.\n(g)\nIncludes residential real estate loans, primarily held in LLCs in AWM that did not have a refreshed FICO score. These loans have been included in a FICO band based on management\u2019s estimation of the borrower\u2019s credit quality.\n(h)\nIncluded U.S. government-guaranteed loans as of December\u00a031, 2025 and 2024.\n(i)\nExcludes loans with no FICO and/or LTV data available.\n(j)\nThe geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at December\u00a031, 2025.\nJPMorgan Chase & Co./2025 Form 10-K\n243\nNotes to consolidated financial statements\nLoan modifications\nThe Firm grants certain modifications of residential real estate loans to borrowers experiencing financial difficulty. The Firm's proprietary modification programs as well as government programs, including U.S. GSE programs, that generally provide various modifications to borrowers experiencing financial difficulty including, but not limited to, interest rate reductions, term extensions, other-than-insignificant payment deferral and principal forgiveness that would otherwise have been required under the terms of the original agreement, are considered FDMs.\nIn addition, the Firm offers trial modifications of residential real estate loans, which generally include a\nthree-month\n trial payment period during which the borrower makes monthly payments under the proposed modified loan terms. Loans in a trial payment period continue to age and accrue interest in accordance with the original contractual terms. At the completion of a trial period, the loan modification is considered permanent.\nFinancial effects of FDMs\nFor the year ended December\u00a031, 2025, retained residential real estate FDMs were $\n1.0\n billion, which included $\n882\n million of FDMs in the form of other-than-insignificant payment deferrals. These other-than-insignificant payment deferrals were driven by forbearances granted to certain borrowers impacted by the wildfires in Los Angeles County, California in January 2025 who were granted a second 90-day forbearance arrangement. The financial effects of the remaining FDMs, which were largely in the form of term extensions and interest rate reductions, included extending the weighted-average life of the loans by\n19\n years, and reducing the weighted-average contractual interest rate from\n6.94\n% to\n6.08\n% for the year ended December\u00a031, 2025.\nFor the year ended December\u00a031, 2024, retained residential real estate FDMs were $\n206\n million. The financial effects of the FDMs, which were predominantly in the form of term extensions and interest rate reductions, included extending the weighted-average life of the loans by\n15\n years, and reducing the weighted-average contractual interest rate from\n7.53\n% to\n5.44\n% for the year ended December\u00a031, 2024.\nFor the year ended December\u00a031, 2023, retained residential real estate FDMs were $\n136\n million. The financial effects of the FDMs, which were predominantly in the form of term extensions and interest rate reductions, included extending the weighted-average life of the loans by\n20\n years, and reducing the weighted-average contractual interest rate from\n7.21\n% to\n4.44\n% for the year ended December\u00a031, 2023.\nAs of December\u00a031, 2025, additional unfunded commitments to lend to borrowers experiencing financial difficulty whose loans have been modified as FDMs were\nno\nt material, while there were\nno\n additional unfunded commitments as of December\u00a031, 2024.\nFor the years ended December\u00a031, 2025, 2024 and 2023, loans subject to a trial modification, where the terms of the loans have not been permanently modified, and Chapter 7 loans were not material.\nPayment status of FDMs\nThe following table provides information on the payment status of retained residential real estate FDMs during the years ended December\u00a031, 2025, 2024 and 2023.\nYear ended December 31,\n(in millions)\nAmortized cost basis\n2025\n2024\n2023\nCurrent\n$\n408\n\n$\n139\n\n$\n107\n\n30-149 days past due\n45\n\n47\n\n13\n\n150 or more days past due\n571\n\n20\n\n16\n\nTotal\n$\n1,024\n\n$\n206\n\n$\n136\n\nDefaults of FDMs\nDuring the years ended December\u00a031, 2025, 2024 and 2023, defaults of retained residential real estate FDMs that had been modified within twelve months were $\n83\n million, $\n93\n million and\nno\nt material, respectively.\nActive and suspended foreclosure\nAt December\u00a031, 2025 and 2024, the Firm had retained residential real estate loans, excluding those insured by U.S. government agencies, with a carrying value of $\n575\n million and $\n576\n million, respectively, that were not included in REO, but were in the process of active or suspended foreclosure.\n244\nJPMorgan Chase & Co./2025 Form 10-K\nAuto and other\nDelinquency is the primary credit quality indicator for retained auto and other loans.\nThe following tables provide information on delinquency and gross charge-offs.\nAs of or for the year ended December\u00a031, 2025\n(in millions, except ratios)\nTerm loans by origination year\nRevolving loans\n2025\n2024\n2023\n2022\n2021\nPrior to 2021\nWithin the revolving period\nConverted to term loans\nTotal\nLoan delinquency\nCurrent\n$\n26,490\n\n$\n15,586\n\n$\n9,443\n\n$\n4,899\n\n$\n2,961\n\n$\n846\n\n$\n3,817\n\n$\n177\n\n$\n64,219\n\n30\u2013119 days past due\n170\n\n180\n\n225\n\n170\n\n99\n\n25\n\n33\n\n48\n\n950\n\n120 or more days past due\n\u2014\n\n2\n\n2\n\n\u2014\n\n1\n\n\u2014\n\n2\n\n34\n\n41\n\nTotal retained loans\n$\n26,660\n\n$\n15,768\n\n$\n9,670\n\n$\n5,069\n\n$\n3,061\n\n$\n871\n\n$\n3,852\n\n$\n259\n\n$\n65,210\n\n% of 30+ days past due to total retained loans\n0.64\n\n%\n1.15\n\n%\n2.35\n\n%\n3.35\n\n%\n3.23\n\n%\n2.87\n\n%\n0.91\n\n%\n31.66\n\n%\n1.52\n\n%\nGross charge-offs\n$\n242\n\n$\n228\n\n$\n244\n\n$\n157\n\n$\n69\n\n$\n83\n\n$\n\u2014\n\n$\n8\n\n$\n1,031\n\nAs of or for the year ended December\u00a031, 2024\n(in millions, except ratios)\nTerm loans by origination year\nRevolving loans\n2024\n2023\n2022\n2021\n2020\nPrior to 2020\nWithin the revolving period\nConverted to term loans\nTotal\nLoan delinquency\nCurrent\n$\n26,165\n\n$\n15,953\n\n$\n9,201\n\n$\n7,014\n\n$\n2,895\n\n$\n624\n\n$\n3,714\n\n$\n148\n\n$\n65,714\n\n30\u2013119 days past due\n190\n\n283\n\n259\n\n179\n\n53\n\n23\n\n40\n\n34\n\n1,061\n\n120 or more days past due\n1\n\n1\n\n\u2014\n\n5\n\n6\n\n\u2014\n\n3\n\n30\n\n46\n\nTotal retained loans\n$\n26,356\n\n$\n16,237\n\n$\n9,460\n\n$\n7,198\n\n$\n2,954\n\n$\n647\n\n$\n3,757\n\n$\n212\n\n$\n66,821\n\n% of 30+ days past due to total retained loans\n0.72\n\n%\n1.75\n\n%\n2.74\n\n%\n2.50\n\n%\n1.76\n\n%\n3.55\n\n%\n1.14\n\n%\n30.19\n\n%\n1.64\n\n%\nGross charge-offs\n$\n269\n\n$\n348\n\n$\n224\n\n$\n126\n\n$\n37\n\n$\n82\n\n$\n1\n\n$\n6\n\n$\n1,093\n\nJPMorgan Chase & Co./2025 Form 10-K\n245\nNotes to consolidated financial statements\nNonaccrual loans and other credit quality indicators\nThe following table provides information on nonaccrual and geographic region as a credit quality indicator for retained auto and other consumer loans.\n(in millions)\nDecember 31, 2025\nDecember 31, 2024\nNonaccrual loans\n(a)(b)\n$\n243\n\n$\n249\n\nGeographic region\n(c)\nCalifornia\n$\n9,926\n\n$\n10,321\n\nTexas\n7,940\n\n7,772\n\nFlorida\n5,382\n\n5,428\n\nNew York\n4,771\n\n4,905\n\nIllinois\n2,804\n\n2,890\n\nNew Jersey\n2,347\n\n2,468\n\nPennsylvania\n2,066\n\n2,012\n\nGeorgia\n1,682\n\n1,716\n\nArizona\n1,583\n\n1,643\n\nNorth Carolina\n1,578\n\n1,597\n\nAll other\n25,131\n\n26,069\n\nTotal retained loans\n$\n65,210\n\n$\n66,821\n\n(a)\nGenerally, all consumer nonaccrual loans have an allowance. In accordance with regulatory guidance, certain nonaccrual loans that are considered collateral-dependent have been charged down to the lower of amortized cost or the fair value of their underlying collateral less costs to sell. If the value of the underlying collateral improves subsequent to charge down, the related allowance may be negative.\n(b)\nInterest income on nonaccrual loans recognized on a cash basis was not material for the years ended December\u00a031, 2025 and 2024.\n(c)\nThe geographic regions presented in this table are ordered based on the magnitude of the corresponding loan balances at December\u00a031, 2025.\nLoan modifications\nThe Firm grants certain modifications of auto and other loans to borrowers experiencing financial difficulty.\nFor the years ended December\u00a031, 2025, 2024 and 2023 retained auto and other FDMs were not material.\nAs of December\u00a031, 2025 and 2024, there were\nno\n additional unfunded commitments to lend to borrowers experiencing financial difficulty whose loans have been modified as FDMs.\n246\nJPMorgan Chase & Co./2025 Form 10-K\nCredit card loan portfolio\nThe credit card portfolio segment includes credit card loans originated and purchased by the Firm. Delinquency rates are the primary credit quality indicator for credit card loans as they provide an early warning that borrowers may be experiencing difficulties (\n30\n days past due); information on those borrowers that have been delinquent for a longer period of time (\n90\n days past due) is also considered. In addition to delinquency rates, the geographic distribution of the loans provides insight as to the credit quality of the portfolio based on the regional economy.\nWhile the borrower\u2019s credit score is another general indicator of credit quality, the Firm does not view credit scores as a primary indicator of credit quality because the borrower\u2019s credit score tends to be a\nlagging indicator. The distribution of such scores provides a general indicator of credit quality trends within the portfolio; however, the score does not capture all factors that would be predictive of future credit performance. Refreshed FICO score information, which is obtained at least quarterly, for a statistically significant random sample of the credit card portfolio is indicated in other credit quality indicators. FICO is considered to be the industry benchmark for credit scores.\nThe Firm generally originates new credit card accounts to prime consumer borrowers. However, certain cardholders\u2019 FICO scores may decrease over time, depending on the performance of the cardholder and changes in the credit score calculation.\nThe following tables provide information on delinquency and gross charge-offs.\nAs of or for the year ended December\u00a031, 2025\n(in millions, except ratios)\nWithin the revolving period\nConverted to term loans\nTotal\nLoan delinquency\nCurrent and less than 30 days past due and still accruing\n$\n240,147\n\n$\n2,289\n\n$\n242,436\n\n30\u201389 days past due and still accruing\n2,422\n\n207\n\n2,629\n\n90 or more days past due and still accruing\n2,619\n\n113\n\n2,732\n\nTotal retained loans\n$\n245,188\n\n$\n2,609\n\n$\n247,797\n\nLoan delinquency ratios\n% of 30+ days past due to total retained loans\n2.06\n\n%\n12.27\n\n%\n2.16\n\n%\n% of 90+ days past due to total retained loans\n1.07\n\n4.33\n\n1.10\n\nGross charge-offs\n$\n8,812\n\n$\n352\n\n$\n9,164\n\nAs of or for the year ended December\u00a031, 2024\n(in millions, except ratios)\nWithin the revolving period\nConverted to term loans\nTotal\nLoan delinquency\nCurrent and less than 30 days past due and still accruing\n$\n226,532\n\n$\n1,284\n\n$\n227,816\n\n30\u201389 days past due and still accruing\n2,291\n\n109\n\n2,400\n\n90 or more days past due and still accruing\n2,591\n\n53\n\n2,644\n\nTotal retained loans\n$\n231,414\n\n$\n1,446\n\n$\n232,860\n\nLoan delinquency ratios\n% of 30+ days past due to total retained loans\n2.11\n\n%\n11.20\n\n%\n2.17\n\n%\n% of 90+ days past due to total retained loans\n1.12\n\n3.67\n\n1.14\n\nGross charge-offs\n$\n7,951\n\n$\n247\n\n$\n8,198\n\nJPMorgan Chase & Co./2025 Form 10-K\n247\nNotes to consolidated financial statements\nOther credit quality indicators\nThe following table provides information on other credit quality indicators for retained credit card loans.\n(in millions, except ratios)\nDecember 31, 2025\nDecember 31, 2024\nGeographic region\n(a)\nCalifornia\n$\n38,702\n\n$\n36,385\n\nTexas\n26,313\n\n24,423\n\nNew York\n19,488\n\n18,525\n\nFlorida\n18,622\n\n17,236\n\nIllinois\n13,160\n\n12,442\n\nNew Jersey\n10,282\n\n9,644\n\nColorado\n7,384\n\n6,962\n\nOhio\n7,326\n\n6,976\n\nPennsylvania\n6,921\n\n6,558\n\nArizona\n6,295\n\n5,796\n\nAll other\n93,304\n\n87,913\n\nTotal retained loans\n$\n247,797\n\n$\n232,860\n\nPercentage of portfolio based on carrying value with estimated refreshed FICO scores\nEqual to or greater than 660\n84.6\n\n%\n85.5\n\n%\nLess than 660\n15.2\n\n14.3\n\nNo FICO available\n0.2\n\n0.2\n\n(a)\nThe geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at December\u00a031, 2025.\nLoan modifications\nThe Firm grants certain modifications of credit card loans to borrowers experiencing financial difficulty. These modifications may involve placing the customer\u2019s credit card account on a fixed payment plan, generally for\n60\n months, which typically includes reducing the interest rate on the credit card account. If the borrower does not make the contractual payments when due under the modified payment terms, the credit card loan continues to age and will be charged-off in accordance with the Firm's standard charge-off policy. In most cases, the Firm does not reinstate the borrower's line of credit.\nFinancial effects of FDMs\nThe following tables provide information on retained credit card FDMs.\nLoan modifications\nYear ended December 31, 2025\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained\ncredit card loans\nFinancial effect of loan modifications\nTerm extension and interest rate reduction\n(a)(b)\n$\n1,800\n\n0.73\n\n%\nTerm extension with a reduction in the weighted average contractual interest rate from\n22.88\n% to\n3.48\n%\nOther\n(b)(c)\n284\n\n0.11\n\nReduced weighted-average contractual interest rate from\n22.75\n% to\n8.09\n%\nTotal\n$\n2,084\n\nLoan modifications\nYear ended December 31, 2024\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained\ncredit card loans\nFinancial effect of loan modifications\nTerm extension and interest rate reduction\n(a)(b)\n$\n926\n\n0.40\n\n%\nTerm extension with a reduction in the weighted average contractual interest rate from\n23.64\n% to\n3.20\n%\nTotal\n$\n926\n\n248\nJPMorgan Chase & Co./2025 Form 10-K\nLoan modifications\nYear ended December 31, 2023\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained\ncredit card loans\nFinancial effect of loan modifications\nTerm extension and interest rate reduction\n(a)(b)\n$\n648\n\n0.31\n\n%\nTerm extension with a reduction in the weighted average contractual interest rate from\n23.19\n% to\n3.64\n%\nTotal\n$\n648\n\n(a)\nTerm extension includes credit card loans whose terms have been modified under long-term programs by placing the customer\u2019s credit card account on a fixed payment plan.\n(b)\nThe interest rates represent weighted average at the time of modification.\n(c)\nPrimarily interest rate reduction.\nPayment status of FDMs\nThe following table provides information on the payment status of retained credit card FDMs during the years ended December\u00a031, 2025, 2024 and 2023.\nAmortized cost basis\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nCurrent and less than 30 days past due and still accruing\n$\n1,801\n\n$\n811\n\n$\n558\n\n30-89 days past due and still accruing\n179\n\n74\n\n59\n\n90 or more days past due and still accruing\n104\n\n41\n\n31\n\nTotal\n$\n2,084\n\n$\n926\n\n$\n648\n\nDefaults of FDMs\nDuring the year ended December\u00a031, 2025, defaults of retained credit card FDMs that had been modified within twelve months were $\n111\n million. During the years ended December\u00a031, 2024 and 2023, defaults of retained credit card FDMs that had been modified within twelve months were\nno\nt material.\nFor credit card loans modified as FDMs, payment default is deemed to have occurred when the borrower misses\ntwo\n consecutive contractual payments. Defaulted modified credit card loans remain in the modification program and continue to be charged off in accordance with the Firm\u2019s standard charge-off policy.\nJPMorgan Chase & Co./2025 Form 10-K\n249\nNotes to consolidated financial statements\nWholesale loan portfolio\nWholesale loans include loans made to a variety of clients, ranging from large corporate and institutional clients to small businesses and high-net-worth individuals.\nThe primary credit quality indicator for wholesale loans is the internal risk rating assigned to each loan. Risk ratings are used to identify the credit quality of loans and differentiate risk within the portfolio. Risk ratings on loans consider the PD and the LGD. The PD is the likelihood that a loan will default. The LGD is the estimated loss on the loan that would be realized upon the default of the borrower and takes into consideration collateral and structural support for each credit facility.\nManagement considers several factors to determine an appropriate internal risk rating, including the obligor\u2019s debt capacity and financial flexibility, the level of the obligor\u2019s earnings, the amount and sources for repayment, the level and nature of contingencies, management strength, and the industry and geography in which the obligor operates. The Firm\u2019s internal risk ratings generally align with the qualitative characteristics (e.g., borrower capacity to meet financial commitments and vulnerability to changes in the economic environment) defined by S&P and Moody\u2019s, however the quantitative characteristics (e.g., PD and LGD) may differ as they reflect internal historical experiences and assumptions. The Firm generally considers internal ratings with qualitative characteristics equivalent to BBB-/Baa3 or higher as investment grade, and these ratings have a lower PD and/or lower LGD than non-investment grade ratings.\nNoninvestment-grade ratings are further classified as noncriticized and criticized, and the criticized portion is further subdivided into performing and nonaccrual loans, representing management\u2019s assessment of the collectibility of principal and interest. Criticized loans have a higher PD than noncriticized loans. The Firm\u2019s definition of criticized aligns with the U.S. banking regulatory definition of criticized exposures, which consist of special mention, substandard and doubtful categories.\nRisk ratings are reviewed on a regular and ongoing basis by Credit Risk Management and are adjusted as necessary for updated information affecting the obligor\u2019s ability to fulfill its obligations.\nAs noted above, the risk rating of a loan considers the industry in which the obligor conducts its operations. As part of the overall credit risk management framework, the Firm focuses on the management and diversification of its industry and client exposures, with particular attention paid to industries with an actual or potential credit concern. Refer to Note 4 for further detail on industry concentrations.\n250\nJPMorgan Chase & Co./2025 Form 10-K\nInternal risk rating is the primary credit quality indicator for retained wholesale loans.\nThe following tables provide information on internal risk rating and gross charge-offs.\nDecember 31,\n(in millions, except ratios)\nSecured by real estate\nCommercial and industrial\nOther\n(a)\nTotal retained loans\n2025\n2024\n2025\n2024\n2025\n2024\n2025\n2024\nLoans by risk ratings\nInvestment-grade\n$\n118,875\n\n$\n114,280\n\n$\n66,942\n\n$\n70,862\n\n$\n355,547\n\n$\n286,528\n\n$\n541,364\n\n$\n471,670\n\nNoninvestment-grade:\nNoncriticized\n36,120\n\n37,422\n\n92,856\n\n83,191\n\n93,273\n\n72,743\n\n222,249\n\n193,356\n\nCriticized performing\n8,872\n\n9,291\n\n12,651\n\n10,977\n\n2,833\n\n1,160\n\n24,356\n\n21,428\n\nCriticized nonaccrual\n1,678\n\n1,439\n\n1,954\n\n1,760\n\n766\n\n743\n\n4,398\n\n3,942\n\nTotal noninvestment-grade\n46,670\n\n48,152\n\n107,461\n\n95,928\n\n96,872\n\n74,646\n\n251,003\n\n218,726\n\nTotal retained loans\n$\n165,545\n\n$\n162,432\n\n$\n174,403\n\n$\n166,790\n\n$\n452,419\n\n$\n361,174\n\n$\n792,367\n\n$\n690,396\n\n% of investment-grade to total retained loans\n71.81\n\n%\n70.36\n\n%\n38.38\n\n%\n42.49\n\n%\n78.59\n\n%\n79.33\n\n%\n68.32\n\n%\n68.32\n\n%\n% of total criticized to total retained loans\n6.37\n\n6.61\n\n8.37\n\n7.64\n\n0.80\n\n0.53\n\n3.63\n\n3.67\n\n% of criticized nonaccrual to total retained loans\n1.01\n\n0.89\n\n1.12\n\n1.06\n\n0.17\n\n0.21\n\n0.56\n\n0.57\n\n(a)\nIncludes loans to financial institutions, personal investment companies and trusts, individuals and individual entities (predominantly Global Private Bank clients within AWM and J.P. Morgan Wealth Management within CCB), states and political subdivisions, nonprofits, as well as loans to SPEs. As of December\u00a031, 2025, predominantly consisted of $\n245.1\n\u00a0billion to financial institutions, which includes loans to certain SPEs, primarily asset securitizations, as redefined by the FRB, $\n141.1\n\u00a0billion to individuals and individual entities, and $\n7.4\n\u00a0billion to other SPEs. As of December\u00a031, 2024, predominantly consisted of $\n114.8\n\u00a0billion to individuals and individual entities, $\n94.0\n\u00a0billion to financial institutions, and $\n92.5\n\u00a0billion to SPEs. Refer to Note 14 for more information on SPEs.\nSecured by real estate\nAs of or for the year ended December\u00a031, 2025\n(in millions)\nTerm loans by origination year\nRevolving loans\n2025\n2024\n2023\n2022\n2021\nPrior to 2021\nWithin the\nrevolving period\nConverted to term loans\nTotal\nLoans by risk ratings\nInvestment-grade\n$\n17,242\n\n$\n9,440\n\n$\n9,187\n\n$\n22,472\n\n$\n22,019\n\n$\n37,392\n\n$\n1,123\n\n$\n\u2014\n\n$\n118,875\n\nNoninvestment-grade\n6,930\n\n3,032\n\n4,392\n\n12,444\n\n6,625\n\n10,978\n\n2,176\n\n93\n\n46,670\n\nTotal retained loans\n$\n24,172\n\n$\n12,472\n\n$\n13,579\n\n$\n34,916\n\n$\n28,644\n\n$\n48,370\n\n$\n3,299\n\n$\n93\n\n$\n165,545\n\nGross charge-offs\n$\n\u2014\n\n$\n54\n\n$\n13\n\n$\n92\n\n$\n119\n\n$\n141\n\n$\n1\n\n$\n\u2014\n\n$\n420\n\nSecured by real estate\nAs of or for the year ended December\u00a031, 2024\n(in millions)\nTerm loans by origination year\nRevolving loans\n2024\n2023\n2022\n2021\n2020\nPrior to 2020\nWithin the\nrevolving period\nConverted to term loans\nTotal\nLoans by risk ratings\nInvestment-grade\n$\n10,002\n\n$\n9,834\n\n$\n25,284\n\n$\n22,796\n\n$\n15,548\n\n$\n29,488\n\n$\n1,328\n\n$\n\u2014\n\n$\n114,280\n\nNoninvestment-grade\n4,238\n\n5,366\n\n14,717\n\n8,567\n\n3,462\n\n10,392\n\n1,317\n\n93\n\n48,152\n\nTotal retained loans\n$\n14,240\n\n$\n15,200\n\n$\n40,001\n\n$\n31,363\n\n$\n19,010\n\n$\n39,880\n\n$\n2,645\n\n$\n93\n\n$\n162,432\n\nGross charge-offs\n$\n72\n\n$\n18\n\n$\n43\n\n$\n2\n\n$\n109\n\n$\n80\n\n$\n\u2014\n\n$\n\u2014\n\n$\n324\n\nJPMorgan Chase & Co./2025 Form 10-K\n251\nNotes to consolidated financial statements\nCommercial and industrial\nAs of or for the year ended December\u00a031, 2025\n(in millions)\nTerm loans by origination year\nRevolving loans\n2025\n2024\n2023\n2022\n2021\nPrior to 2021\nWithin the revolving period\nConverted to term loans\nTotal\nLoans by risk ratings\nInvestment-grade\n$\n16,186\n\n$\n5,418\n\n$\n3,040\n\n$\n4,352\n\n$\n1,836\n\n$\n1,225\n\n$\n34,884\n\n$\n1\n\n$\n66,942\n\nNoninvestment-grade\n32,906\n\n13,376\n\n5,927\n\n5,600\n\n2,006\n\n825\n\n46,721\n\n100\n\n107,461\n\nTotal retained loans\n$\n49,092\n\n$\n18,794\n\n$\n8,967\n\n$\n9,952\n\n$\n3,842\n\n$\n2,050\n\n$\n81,605\n\n$\n101\n\n$\n174,403\n\nGross charge-offs\n$\n43\n\n$\n64\n\n$\n11\n\n$\n151\n\n$\n129\n\n$\n26\n\n$\n461\n\n$\n8\n\n$\n893\n\nCommercial and industrial\nAs of or for the year ended December\u00a031, 2024\n(in millions)\nTerm loans by origination year\nRevolving loans\n2024\n2023\n2022\n2021\n2020\nPrior to 2020\nWithin the revolving period\nConverted to term loans\nTotal\nLoans by risk ratings\nInvestment-grade\n$\n11,564\n\n$\n6,285\n\n$\n6,588\n\n$\n3,119\n\n$\n1,067\n\n$\n1,139\n\n$\n41,099\n\n$\n1\n\n$\n70,862\n\nNoninvestment-grade\n21,251\n\n11,350\n\n10,942\n\n5,322\n\n783\n\n975\n\n45,181\n\n124\n\n95,928\n\nTotal retained loans\n$\n32,815\n\n$\n17,635\n\n$\n17,530\n\n$\n8,441\n\n$\n1,850\n\n$\n2,114\n\n$\n86,280\n\n$\n125\n\n$\n166,790\n\nGross charge-offs\n$\n25\n\n$\n22\n\n$\n128\n\n$\n24\n\n$\n1\n\n$\n50\n\n$\n270\n\n$\n5\n\n$\n525\n\nOther\n(a)\nAs of or for the year ended December\u00a031, 2025\n(in millions)\nTerm loans by origination year\nRevolving loans\n2025\n2024\n2023\n2022\n2021\nPrior to 2021\nWithin the revolving period\nConverted to term loans\nTotal\nLoans by risk ratings\nInvestment-grade\n$\n43,073\n\n$\n13,123\n\n$\n7,939\n\n$\n10,838\n\n$\n5,574\n\n$\n11,757\n\n$\n263,150\n\n$\n93\n\n$\n355,547\n\nNoninvestment-grade\n16,162\n\n6,456\n\n4,425\n\n4,079\n\n2,013\n\n2,563\n\n61,095\n\n79\n\n96,872\n\nTotal retained loans\n$\n59,235\n\n$\n19,579\n\n$\n12,364\n\n$\n14,917\n\n$\n7,587\n\n$\n14,320\n\n$\n324,245\n\n$\n172\n\n$\n452,419\n\nGross charge-offs\n$\n46\n\n$\n195\n\n$\n32\n\n$\n2\n\n$\n9\n\n$\n58\n\n$\n26\n\n$\n106\n\n$\n474\n\nOther\n(a)\nAs of or for the year ended December\u00a031, 2024\n(in millions)\nTerm loans by origination year\nRevolving loans\n2024\n2023\n2022\n2021\n2020\nPrior to 2020\nWithin the revolving period\nConverted to term loans\nTotal\nLoans by risk ratings\nInvestment-grade\n$\n30,484\n\n$\n17,039\n\n$\n13,272\n\n$\n6,288\n\n$\n8,632\n\n$\n7,382\n\n$\n201,949\n\n$\n1,482\n\n$\n286,528\n\nNoninvestment-grade\n11,784\n\n7,248\n\n5,918\n\n3,296\n\n1,366\n\n1,886\n\n42,954\n\n194\n\n74,646\n\nTotal retained loans\n$\n42,268\n\n$\n24,287\n\n$\n19,190\n\n$\n9,584\n\n$\n9,998\n\n$\n9,268\n\n$\n244,903\n\n$\n1,676\n\n$\n361,174\n\nGross charge-offs\n$\n\u2014\n\n$\n38\n\n$\n3\n\n$\n36\n\n$\n40\n\n$\n50\n\n$\n6\n\n$\n\u2014\n\n$\n173\n\n(a)\nIncludes loans to financial institutions, personal investment companies and trusts, individuals and individual entities (predominantly Global Private Bank clients within AWM and J.P. Morgan Wealth Management within CCB), states and political subdivisions, nonprofits, as well as loans to SPEs. Refer to Note 14 for more information on SPEs.\n252\nJPMorgan Chase & Co./2025 Form 10-K\nThe following table presents additional information on retained loans secured by real estate, which consists of loans secured wholly or substantially by a lien or liens on real property at origination. Multifamily lending includes financing for acquisition, leasing and construction of apartment buildings. Other commercial lending largely includes financing for acquisition, leasing and construction, largely for office, retail and industrial real estate. Included in secured by real estate loans were $\n12.4\n billion and $\n12.2\n billion as of December\u00a031, 2025 and 2024, respectively, of construction and development loans made to finance land development and on-site construction of commercial, industrial, residential, or farm buildings\n.\nDecember 31,\n(in millions, except ratios)\nMultifamily\nOther Commercial\nTotal retained Secured by real estate loans\n2025\n2024\n2025\n2024\n2025\n2024\nRetained loans secured by real estate\n$\n105,130\n\n$\n101,114\n\n$\n60,415\n\n$\n61,318\n\n$\n165,545\n\n$\n162,432\n\nCriticized\n4,661\n\n4,700\n\n5,889\n\n6,030\n\n10,550\n\n10,730\n\n% of criticized to total retained loans secured by real estate\n4.43\n\n%\n4.65\n\n%\n9.75\n\n%\n9.83\n\n%\n6.37\n\n%\n6.61\n\n%\nCriticized nonaccrual\n$\n422\n\n$\n337\n\n$\n1,256\n\n$\n1,102\n\n$\n1,678\n\n$\n1,439\n\n% of criticized nonaccrual loans to total retained loans secured by real estate\n0.40\n\n%\n0.33\n\n%\n2.08\n\n%\n1.80\n\n%\n1.01\n\n%\n0.89\n\n%\nGeographic distribution and delinquency\nThe following table provides information on the geographic distribution and delinquency for retained wholesale loans.\nDecember 31,\n(in millions)\nSecured by real estate\nCommercial and industrial\nOther\nTotal retained loans\n2025\n2024\n2025\n2024\n2025\n2024\n2025\n2024\nLoans by geographic distribution\n(a)\nTotal U.S.\n$\n162,378\n\n$\n159,209\n\n$\n131,945\n\n$\n127,626\n\n$\n331,737\n\n$\n278,077\n\n$\n626,060\n\n$\n564,912\n\nTotal non-U.S.\n3,167\n\n3,223\n\n42,458\n\n39,164\n\n120,682\n\n83,097\n\n166,307\n\n125,484\n\nTotal retained loans\n$\n165,545\n\n$\n162,432\n\n$\n174,403\n\n$\n166,790\n\n$\n452,419\n\n$\n361,174\n\n$\n792,367\n\n$\n690,396\n\nLoan delinquency\nCurrent and less than 30 days past due and still accruing\n$\n163,189\n\n$\n159,949\n\n$\n171,227\n\n$\n164,104\n\n$\n450,582\n\n$\n359,191\n\n$\n784,998\n\n$\n683,244\n\n30\u201389 days past due and still accruing\n636\n\n918\n\n1,220\n\n868\n\n1,057\n\n1,152\n\n2,913\n\n2,938\n\n90 or more days past due and still accruing\n(b)\n42\n\n126\n\n2\n\n58\n\n14\n\n88\n\n58\n\n272\n\nCriticized nonaccrual\n1,678\n\n1,439\n\n1,954\n\n1,760\n\n766\n\n743\n\n4,398\n\n3,942\n\nTotal retained loans\n$\n165,545\n\n$\n162,432\n\n$\n174,403\n\n$\n166,790\n\n$\n452,419\n\n$\n361,174\n\n$\n792,367\n\n$\n690,396\n\n(a)\nThe U.S. and non-U.S. distribution is determined based predominantly on the domicile of the borrower.\n(b)\nRepresents loans that are considered well-collateralized and therefore still accruing interest.\nNonaccrual loans\nThe following table provides information on retained wholesale nonaccrual loans.\nDecember 31,\n(in millions)\nSecured by real estate\nCommercial and industrial\nOther\nTotal retained loans\n2025\n2024\n2025\n2024\n2025\n2024\n2025\n2024\nNonaccrual loans\nWith an allowance\n$\n365\n\n$\n366\n\n$\n1,562\n\n$\n1,362\n\n$\n468\n\n$\n555\n\n$\n2,395\n\n$\n2,283\n\nWithout an allowance\n(a)\n1,313\n\n1,073\n\n392\n\n398\n\n298\n\n188\n\n2,003\n\n1,659\n\nTotal nonaccrual loans\n(b)\n$\n1,678\n\n$\n1,439\n\n$\n1,954\n\n$\n1,760\n\n$\n766\n\n$\n743\n\n$\n4,398\n\n$\n3,942\n\n(a)\nWhen the discounted cash flows or collateral value equals or exceeds the amortized cost of the loan, the loan does not require an allowance. This typically occurs when the loans have been partially charged off and/or there have been interest payments received and applied to the loan balance.\n(b)\nInterest income on nonaccrual loans recognized on a cash basis was\nno\nt material and $\n51\n million for the years ended December\u00a031, 2025 and 2024, respectively.\nJPMorgan Chase & Co./2025 Form 10-K\n253\nNotes to consolidated financial statements\nLoan modifications\nThe Firm grants certain modifications of wholesale loans to borrowers experiencing financial difficulty, which generally align with loans graded substandard or worse consistent with the U.S. banking regulators\u2019 definition of criticized exposures.\nFinancial effects of FDMs\nThe following tables provide information on retained wholesale loan modifications considered FDMs during the years ended December\u00a031, 2025, 2024 and 2023.\nSecured by real estate\nYear ended December 31, 2025\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained Secured by real estate loans\nFinancial effect of loan modifications\nSingle modifications\nTerm extension\n$\n736\n\n0.44\n\n%\nExtended loans by a weighted-average of\n14\n months\nOther-than-insignificant payment deferral\n23\n\n0.01\n\nProvided payment deferrals with delayed amounts primarily recaptured at maturity\nMultiple modifications\nOther-than-insignificant payment deferral and term extension\n54\n\n0.03\n\nProvided payment deferrals with delayed amounts recaptured at maturity and extended loans by a weighted-average of\n28\n months\nOther\n(a)\n2\n\n\u2014\n\nNM\nTotal\n$\n815\n\n(a) Includes loans with single and multiple modifications.\nSecured by real estate\nYear ended December 31, 2024\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained Secured by real estate loans\nFinancial effect of loan modifications\nSingle modifications\nTerm extension\n$\n271\n\n0.17\n\n%\nExtended loans by a weighted-average of\n21\n months\nOther-than-insignificant payment deferral\n37\n\n0.02\n\nProvided payment deferrals with delayed amounts re-amortized over the remaining tenor\nMultiple modifications\nOther-than-insignificant payment deferral and interest rate reduction\n46\n\n0.03\n\nProvided payment deferrals with delayed amounts recaptured at maturity and reduced weighted-average contractual interest by\n162\n bps\nTotal\n$\n354\n\nSecured by real estate\nYear ended December 31, 2023\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained Secured by real estate loans\nFinancial effect of loan modifications\nSingle modifications\nTerm extension\n$\n149\n\n0.09\n\n%\nExtended loans by a weighted-average of\n14\n months\nOther-than-insignificant payment deferral\n3\n\n\u2014\n\nNM\nMultiple modifications\nOther-than-insignificant payment deferral and interest rate reduction\n5\n\n\u2014\n\nProvided payment deferrals with delayed amounts primarily recaptured at maturity and reduced weighted-average contractual interest\n184\n bps\nOther\n(a)\n3\n\n\u2014\n\nNM\nTotal\n$\n160\n\n(a) Includes a loan with multiple modifications.\n254\nJPMorgan Chase & Co./2025 Form 10-K\nCommercial and industrial\nYear ended December 31, 2025\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained Commercial and industrial loans\nFinancial effect of loan modifications\nSingle modifications\nTerm extension\n$\n1,308\n\n0.75\n\n%\nExtended loans by a weighted-average of\n19\n months\nOther-than-insignificant payment deferral\n689\n\n0.40\n\nProvided payment deferrals with delayed amounts primarily recaptured at the end of the deferral period\nMultiple modifications\nOther-than-insignificant payment deferral and term extension\n247\n\n0.14\n\nProvided payment deferrals with delayed amounts primarily recaptured at maturity and extended loans by a weighted-average of\n20\n months\nOther-than-insignificant payment deferral, interest rate reduction, and term extension\n86\n\n0.05\n\nProvided payment deferrals with delayed amounts recaptured at maturity, reduced weighted-average contractual interest by\n1060\n bps and extended loans by a weighted-average of\n16\n months\nInterest rate reduction and term extension\n67\n\n0.04\n\nReduced weighted-average contractual interest by\n672\n bps and extended loans by a weighted-average of\n15\n months\nOther-than-insignificant payment deferral, principal forgiveness, and term extension\n19\n\n0.01\n\nProvided payment deferrals with delayed amounts recaptured at maturity, reduced amortized cost basis of the loan by $\n37\n million and extended the loan by a weighted-average of\n42\n months\nOther\n(a)\n45\n\n0.03\n\nReduced the net amortized cost basis by $\n273\n million due to modified loans that include principal forgiveness\nTotal\n$\n2,461\n\n(a) Includes loans with single and multiple modifications.\nCommercial and industrial\nYear ended December 31, 2024\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained Commercial and industrial loans\nFinancial effect of loan modifications\nSingle modifications\nTerm extension\n$\n1,180\n\n0.71\n\n%\nExtended loans by a weighted-average of\n20\n months\nOther-than-insignificant payment deferral\n464\n0.28\n\nProvided payment deferrals with delayed amounts primarily re-amortized over the remaining tenor\nMultiple modifications\nOther-than-insignificant payment deferral and term extension\n175\n0.10\n\nProvided payment deferrals with delayed amounts primarily recaptured at maturity and extended loans by a weighted-average of\n18\n months\nInterest rate reduction and term extension\n51\n0.03\n\nReduced weighted-average contractual interest by\n434\n bps and extended loans by a weighted-average of\n36\n months\nOther\n(a)\n30\n\n0.02\n\nNM\nTotal\n$\n1,900\n\n(a) Includes loans with single and multiple modifications.\nCommercial and industrial\nYear ended December 31, 2023\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained Commercial and industrial loans\nFinancial effect of loan modifications\nSingle modifications\nTerm extension\n$\n916\n\n0.55\n\n%\nExtended loans by a weighted-average of\n17\n months\nOther-than-insignificant payment deferral\n402\n0.24\n\nProvided payment deferrals with delayed amounts primarily recaptured at the end of the deferral period\nMultiple modifications\nOther-than-insignificant payment deferral and term extension\n35\n0.02\n\nProvided payment deferrals with delayed amounts primarily re-amortized over the remaining life of the loan and extended loans by a weighted-average of\n7\n months\nInterest rate reduction and term extension\n1\n\u2014\n\nNM\nOther\n(a)\n9\n\n\u2014\n\nNM\nTotal\n$\n1,363\n\n(a) Include loans with multiple modifications.\nJPMorgan Chase & Co./2025 Form 10-K\n255\nNotes to consolidated financial statements\nOther\nYear ended December 31, 2025\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained Other loans\nFinancial effect of loan modification\nSingle modifications\nTerm extension\n$\n123\n\n0.03\n\n%\nExtended loans by a weighted-average of\n14\n months\nMultiple modifications\nOther-than-insignificant payment deferral and term extension\n3\n\n\u2014\n\nNM\nOther\n(a)\n1\n\n\u2014\n\nNM\nTotal\n$\n127\n\n(a) Includes a loan with a single modification.\nOther\nYear ended December 31, 2024\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained Other loans\nFinancial effect of loan modifications\nSingle modifications\nTerm extension\n$\n268\n\n0.07\n\n%\nExtended loans by a weighted-average of\n28\n months\nMultiple modifications\nOther-than-insignificant payment deferral and term extension\n2\n\u2014\n\nNM\nOther\n(a)\n5\n\n\u2014\n\nNM\nTotal\n$\n275\n\n(a) Includes loans with a single modification.\nOther\nYear ended December 31, 2023\n(in millions, except ratios)\nAmortized cost basis\n% of loan modifications to total retained Other loans\nFinancial effect of loan modifications\nSingle modifications\nTerm extension\n$\n355\n\n0.10\n\n%\n\u00a0Extended loans by a weighted-average of\n23\n months\nMultiple modifications\nOther-than-insignificant payment deferral and term extension\n245\n0.07\n\nProvided payment deferrals with delayed amounts primarily recaptured at the end of the deferral period and extended loans by a weighted-average of\n137\n months\nOther\n(a)\n9\n\n\u2014\n\nNM\nTotal\n$\n609\n\n(a) Includes a loan with a single modification.\n256\nJPMorgan Chase & Co./2025 Form 10-K\nPayment status of FDMs\nThe following table provides information on the payment status of retained wholesale FDMs during the years ended December\u00a031, 2025, 2024 and 2023.\nYear ended December 31,\n(in millions)\nAmortized cost basis\nSecured by real estate\nCommercial and industrial\nOther\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\nCurrent and less than 30 days past due and still accruing\n$\n377\n\n$\n264\n\n$\n118\n\n$\n1,669\n\n$\n1,215\n\n$\n947\n\n$\n115\n\n$\n240\n\n$\n400\n\n30-89 days past due and still accruing\n\u2014\n\n3\n\n2\n\n7\n\n13\n\n42\n\n\u2014\n\n9\n\n\u2014\n\nCriticized nonaccrual\n438\n\n87\n\n40\n\n786\n\n672\n\n374\n\n12\n\n26\n\n209\n\nTotal\n$\n815\n\n$\n354\n\n$\n160\n\n$\n2,462\n\n$\n1,900\n\n$\n1,363\n\n$\n127\n\n$\n275\n\n$\n609\n\nDefaults of FDMs\nThe following table provides information on defaults of retained wholesale FDMs that had been modified within twelve months during the years ended December\u00a031, 2025, 2024 and 2023.\nYear ended December 31,\n(in millions)\nAmortized cost basis\nSecured by real estate\nCommercial and industrial\nOther\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\nTerm extension\n$\n173\n\n$\n3\n\n$\n1\n\n$\n57\n\n$\n92\n\n$\n49\n\n$\n3\n\n$\n22\n\n$\n31\n\nOther-than-insignificant payment deferral\n\u2014\n\n\u2014\n\n2\n\n5\n\n118\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nInterest rate reduction and term extension\n\u2014\n\n\u2014\n\n3\n\n3\n\n\u2014\n\n1\n\n\u2014\n\n\u2014\n\n\u2014\n\nTotal\n(a)\n$\n173\n\n$\n3\n\n$\n6\n\n$\n65\n\n$\n210\n\n$\n50\n\n$\n3\n\n$\n22\n\n$\n31\n\n(a)\nRepresents FDMs that were 30 days or more past due.\nAs of December\u00a031, 2025 and 2024, additional unfunded commitments on modified loans to borrowers experiencing financial difficulty were $\n2.8\n billion and $\n1.8\n billion, respectively, in Commercial and industrial, and $\n73\n\u00a0million and $\n69\n\u00a0million, respectively, in Other. Additional unfunded commitments on modified loans to borrowers experiencing financial difficulty whose loans have been modified as FDMs in Secured by real estate were\nno\nt material at both periods.\nJPMorgan Chase & Co./2025 Form 10-K\n257\nNotes to consolidated financial statements\nNote 13 \u2013\nAllowance for credit losses\nThe Firm\u2019s allowance for credit losses represents management's estimate of expected credit losses over the remaining expected life of the Firm's financial assets measured at amortized cost and certain off-balance sheet lending-related commitments. The allowance for credit losses generally comprises:\n\u2022\nthe allowance for loan losses, which covers the Firm\u2019s retained loan portfolios (scored and risk-rated),\n\u2022\nthe allowance for lending-related commitments, which is presented on the Consolidated balance sheets in accounts payable and other liabilities, and\n\u2022\nthe allowance for credit losses on investment securities, which is reflected in investment securities on the Consolidated balance sheets.\nThe income statement effect of all changes in the allowance for credit losses is recognized in the provision for credit losses. Determining the appropriateness of the allowance for credit losses is complex and requires significant judgment by management about the effect of matters that are inherently uncertain. At least quarterly, the allowance for credit losses is reviewed by the CRO, the CFO and the Controller of the Firm. Subsequent evaluations of credit exposures, considering the macroeconomic conditions, forecasts and other factors then prevailing, may result in significant changes in the allowance for credit losses in future periods.\nThe Firm\u2019s policies used to determine its allowance for loan losses and its allowance for lending-related commitments are described in the following paragraphs. Refer to Note 10 for a description of the policies used to determine the allowance for credit losses on investment securities.\nMethodology for allowances for loan losses and lending-related commitments\nThe allowance for loan losses and allowance for lending-related commitments represent expected credit losses over the remaining expected life of retained loans and lending-related commitments that are not unconditionally cancellable. The Firm does not record an allowance for future draws on unconditionally cancellable lending-related commitments (e.g., credit cards). Expected losses related to accrued interest on credit card loans are considered in the Firm\u2019s allowance for loan losses. However, the Firm does not record an allowance on other accrued interest receivables, due to its policy to write these receivables off no later than\n90\n days past due by reversing interest income.\nThe expected life of each instrument is determined by considering its contractual term, expected prepayments, cancellation features, and certain extension and call options. The expected life of funded credit card loans is generally estimated by considering expected future payments on the credit card account, and determining how much of those amounts should be\nallocated to repayments of the funded loan balance (as of the balance sheet date) versus other account activity. This allocation is made using an approach that incorporates the payment application requirements of the Credit Card Accountability Responsibility and Disclosure Act of 2009, generally paying down the highest interest rate balances first.\nThe estimate of expected credit losses includes expected recoveries of amounts previously charged off or expected to be charged off, even if such recoveries result in a negative allowance.\nCollective and Individual Assessments\nWhen calculating the allowance for loan losses and the allowance for lending-related commitments, the Firm assesses whether exposures share similar risk characteristics. If similar risk characteristics exist, the Firm estimates expected credit losses collectively, considering the risk associated with a particular pool and the probability that the exposures within the pool will deteriorate or default. The assessment of risk characteristics is subject to significant management judgment. Emphasizing one characteristic over another or considering additional characteristics could affect the allowance.\n\u2022\nRelevant risk characteristics for the consumer portfolio include product type, delinquency status, current FICO scores, geographic distribution, and, for collateralized loans, current LTV ratios.\n\u2022\nRelevant risk characteristics for the wholesale portfolio include risk rating, delinquency status, tenor, level and type of collateral, LOB, geography, industry, credit enhancement, product type, facility purpose, and payment terms.\nThe majority of the Firm\u2019s credit exposures share risk characteristics with other similar exposures, and as a result are collectively assessed for impairment (\u201cportfolio-based component\u201d). The portfolio-based component covers consumer loans, performing risk-rated loans and certain lending-related commitments.\nIf an exposure does not share risk characteristics with other exposures, the Firm generally estimates expected credit losses on an individual basis, considering expected repayment and conditions impacting that individual exposure (\u201casset-specific component\u201d). The asset-specific component covers collateral-dependent loans and risk-rated loans that have been placed on nonaccrual status.\nPortfolio-based component\nThe portfolio-based component begins with a quantitative calculation that considers the likelihood of the borrower changing delinquency status or moving from one risk rating to another. The quantitative calculation covers expected credit losses over an instrument\u2019s expected life and is estimated by applying credit loss factors to the Firm\u2019s estimated exposure at\n258\nJPMorgan Chase & Co./2025 Form 10-K\ndefault. The credit loss factors incorporate the probability of borrower default as well as loss severity in the event of default. Expected credit losses are derived using a weighted average of five internally developed macroeconomic scenarios over an eight-quarter forecast period, followed by a single year straight-line interpolation to revert to long run historical information for periods beyond the eight-quarter forecast period. The five macroeconomic scenarios consist of a central, relative adverse, extreme adverse, relative upside and extreme upside scenario, and are updated by the Firm\u2019s central forecasting team. The scenarios take into consideration the Firm\u2019s macroeconomic outlook, internal perspectives from subject matter experts across the Firm, and market consensus and involve a governed process that incorporates feedback from senior management across LOBs, Corporate Finance and Risk Management.\nThe quantitative calculation is adjusted to take into consideration additional qualitative factors, including model imprecision, emerging risk assessments, trends, changes to the weights of the Firm\u2019s macroeconomic scenarios and other subjective factors that are not yet reflected in the calculation. These adjustments are accomplished in part by analyzing the historical loss experience, including during stressed periods, for each major product or model. In addition, management takes into account uncertainties associated with the economic and political conditions, quality of underwriting standards, borrower behavior, credit concentrations or deterioration within an industry, product or portfolio, as well as other relevant internal and external factors affecting the credit quality of the portfolio. In certain instances, the interrelationships between these factors create further uncertainties.\nThe application of different inputs into the quantitative calculation, and the assumptions used by management to adjust the quantitative calculation, are subject to significant management judgment, and emphasizing one input or assumption over another, or considering other inputs or assumptions, could affect the estimate of the allowance for loan losses and the allowance for lending-related commitments.\nAsset-specific component\nTo determine the asset-specific component of the allowance, collateral-dependent loans (including those loans for which foreclosure is probable) and nonaccrual risk-rated loans in the wholesale portfolio segment are generally evaluated individually.\nFor collateral-dependent loans, the fair value of collateral less estimated costs to sell, as applicable, is used to determine the charge-off amount for declines in value (to reduce the amortized cost of the loan to the fair value of collateral) or the amount of negative allowance that should be recognized (for recoveries of prior charge-offs associated with improvements in the fair value of the collateral).\nFor non-collateral dependent loans, the Firm generally measures the asset-specific allowance as the difference between the amortized cost of the loan and the present value of the cash flows expected to be collected, discounted at the loan\u2019s effective interest rate. Subsequent changes in impairment are generally recognized as an adjustment to the allowance for loan losses. The asset-specific component of the allowance for non-collateral dependent loans incorporates the effect of the modification on the loan\u2019s expected cash flows including changes in interest rates, principal forgiveness, and other concessions, as well as management\u2019s expectation of the borrower\u2019s ability to repay under the modified terms.\nEstimating the timing and amounts of future cash flows is highly judgmental as these cash flow projections rely upon estimates such as loss severities, asset valuations, the amounts and timing of interest or principal payments (including any expected prepayments) or other factors that are reflective of current and expected market conditions. These estimates are, in turn, dependent on factors such as the duration of current overall economic conditions, industry, portfolio, or borrower-specific factors, the expected outcome of insolvency proceedings as well as, in certain circumstances, other economic factors. All of these estimates and assumptions require significant management judgment and certain assumptions are highly subjective.\nOther financial assets\nIn addition to loans and investment securities, the Firm holds other financial assets that are measured at amortized cost on the Consolidated balance sheets, including credit exposures arising from lending activities subject to collateral maintenance requirements. Management estimates the allowance for other financial assets using various techniques considering historical losses and current economic conditions.\nCredit risk arising from lending activities subject to collateral maintenance requirements is generally mitigated by factors such as the short-term nature of the activity, the fair value of collateral held and the Firm\u2019s right to call for, and the borrower\u2019s obligation to provide additional margin when the fair value of the collateral declines. Because of these mitigating factors, these exposures generally do not require an allowance for credit losses. However, management may also consider other factors such as the borrower\u2019s ongoing ability to provide collateral to satisfy margin requirements, or whether collateral is significantly concentrated in an individual issuer or in securities with similar risk characteristics. If in management\u2019s judgment, an allowance for credit losses for these exposures is required, the Firm estimates expected credit losses based on the value of the collateral and probability of borrower default.\nJPMorgan Chase & Co./2025 Form 10-K\n259\nNotes to consolidated financial statements\nAllowance for credit losses and related information\n\nThe table below summarizes information about the allowances for credit losses and includes a breakdown of loans and lending-related commitments by impairment methodology. Refer to Note 10 for further information on the allowance for credit losses on investment securities.\n(Table continued on next page)\n2025\nYear ended December 31,\n(in millions)\nConsumer,\nexcluding\ncredit card\nCredit card\nWholesale\nTotal\nAllowance for loan losses\nBeginning balance at January 1,\n$\n1,807\n\n$\n14,600\n\n$\n7,938\n\n$\n24,345\n\nCumulative effect of a change in accounting principle\n(a)\nNA\nNA\nNA\nNA\nGross charge-offs\n1,089\n\n9,164\n\n1,787\n\n12,040\n\nGross recoveries collected\n(\n510\n)\n(\n1,492\n)\n(\n189\n)\n(\n2,191\n)\nNet charge-offs\n579\n\n7,672\n\n1,598\n\n9,849\n\nProvision for loan losses\n692\n\n8,629\n\n1,943\n\n11,264\n\nOther\n\u2014\n\n\u2014\n\n5\n\n5\n\nEnding balance at December 31,\n$\n1,920\n\n$\n15,557\n\n$\n8,288\n\n$\n25,765\n\nAllowance for lending-related commitments\nBeginning balance at January 1,\n$\n82\n\n$\n\u2014\n\n$\n2,019\n\n$\n2,101\n\nProvision for lending-related commitments\n1\n\n2,200\n\n(f)\n768\n\n2,969\n\nOther\n\u2014\n\n\u2014\n\n1\n\n1\n\nEnding balance at December 31,\n$\n83\n\n$\n2,200\n\n$\n2,788\n\n$\n5,071\n\nTotal allowance for investment securities\nNA\nNA\nNA\n$\n106\n\nTotal allowance for credit losses\n(b)\n$\n2,003\n\n$\n17,757\n\n$\n11,076\n\n$\n30,942\n\nAllowance for loan losses by impairment methodology\nAsset-specific\n(c)\n$\n(\n647\n)\n$\n\u2014\n\n$\n707\n\n$\n60\n\nPortfolio-based\n2,567\n\n15,557\n\n7,581\n\n25,705\n\nTotal allowance for loan losses\n$\n1,920\n\n$\n15,557\n\n$\n8,288\n\n$\n25,765\n\nLoans by impairment methodology\nAsset-specific\n(c)\n$\n3,457\n\n$\n\u2014\n\n$\n4,391\n\n$\n7,848\n\nPortfolio-based\n365,284\n\n247,797\n\n787,976\n\n1,401,057\n\nTotal retained loans\n$\n368,741\n\n$\n247,797\n\n$\n792,367\n\n$\n1,408,905\n\nCollateral-dependent loans\nNet charge-offs\n$\n7\n\n$\n\u2014\n\n$\n542\n\n$\n549\n\nLoans measured at fair value of collateral less cost to sell\n3,412\n\n\u2014\n\n1,852\n\n5,264\n\nAllowance for lending-related commitments by impairment methodology\nAsset-specific\n$\n\u2014\n\n$\n\u2014\n\n$\n119\n\n$\n119\n\nPortfolio-based\n83\n\n2,200\n\n(f)\n2,669\n\n4,952\n\nTotal allowance for lending-related commitments\n(d)\n$\n83\n\n$\n2,200\n\n$\n2,788\n\n$\n5,071\n\nLending-related commitments by impairment methodology\nAsset-specific\n$\n\u2014\n\n$\n\u2014\n\n$\n925\n\n$\n925\n\nPortfolio-based\n(e)\n24,358\n\n23,617\n\n(g)\n555,047\n\n603,022\n\nTotal lending-related commitments\n$\n24,358\n\n$\n23,617\n\n$\n555,972\n\n$\n603,947\n\n(a)\nRepresents the impact to the allowance for loan losses upon the adoption of the Financial Instruments - Credit Losses: Troubled Debt Restructurings accounting guidance. Refer to Note 1 for further information.\n(b)\nAt December\u00a031, 2025, 2024 and 2023, in addition to the allowance for credit losses in the table above, the Firm also had an allowance for credit losses of $\n288\n\u00a0million, $\n268\n\u00a0million and $\n243\n\u00a0million, respectively, associated with certain accounts receivable in CIB.\n(c)\nIncludes collateral-dependent loans, including those for which foreclosure is deemed probable, and nonaccrual risk-rated loans.\n(d)\nThe allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets.\n(e)\nAt December\u00a031, 2025, 2024 and 2023, lending-related commitments excluded $\n19.2\n\u00a0billion, $\n19.2\n\u00a0billion and $\n17.2\n\u00a0billion, respectively, for the consumer, excluding credit card portfolio segment; $\n1.2\n\u00a0trillion, $\n1.0\n\u00a0trillion and $\n915.7\n\u00a0billion, respectively, for the credit card portfolio segment; and $\n40.0\n\u00a0billion, $\n20.5\n\u00a0billion and $\n19.7\n\u00a0billion, respectively, for the wholesale portfolio segment, which were not subject to the allowance for lending-related commitments.\n(f)\nRepresents the impact of the Apple Card transaction.\n(g)\nIncludes estimated drawn loans related to the Apple Card transaction at the time that the transaction is expected to close of approximately $\n23\n billion.\n260\nJPMorgan Chase & Co./2025 Form 10-K\n(table continued from previous page)\n2024\n2023\nConsumer,\nexcluding\ncredit card\nCredit card\nWholesale\nTotal\nConsumer,\nexcluding\ncredit card\nCredit card\nWholesale\nTotal\n$\n1,856\n\n$\n12,450\n\n$\n8,114\n\n$\n22,420\n\n$\n2,040\n\n$\n11,200\n\n$\n6,486\n\n$\n19,726\n\nNA\nNA\nNA\nNA\n(\n489\n)\n(\n100\n)\n2\n\n(\n587\n)\n1,299\n\n8,198\n\n1,022\n\n10,519\n\n1,151\n\n5,491\n\n1,011\n\n7,653\n\n(\n625\n)\n(\n1,056\n)\n(\n200\n)\n(\n1,881\n)\n(\n519\n)\n(\n793\n)\n(\n132\n)\n(\n1,444\n)\n674\n\n7,142\n\n822\n\n8,638\n\n632\n\n4,698\n\n879\n\n6,209\n\n624\n\n9,292\n\n578\n\n10,494\n\n936\n\n6,048\n\n2,484\n\n9,468\n\n1\n\n\u2014\n\n68\n\n69\n\n1\n\n\u2014\n\n21\n\n22\n\n$\n1,807\n\n$\n14,600\n\n$\n7,938\n\n$\n24,345\n\n$\n1,856\n\n$\n12,450\n\n$\n8,114\n\n$\n22,420\n\n$\n75\n\n$\n\u2014\n\n$\n1,899\n\n$\n1,974\n\n$\n76\n\n$\n\u2014\n\n$\n2,306\n\n$\n2,382\n\n7\n\n\u2014\n\n121\n\n128\n\n(\n1\n)\n\u2014\n\n(\n407\n)\n(\n408\n)\n\u2014\n\n\u2014\n\n(\n1\n)\n(\n1\n)\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n$\n82\n\n$\n\u2014\n\n$\n2,019\n\n$\n2,101\n\n$\n75\n\n$\n\u2014\n\n$\n1,899\n\n$\n1,974\n\nNA\nNA\nNA\n$\n152\nNA\nNA\nNA\n$\n128\n\n$\n1,889\n\n$\n14,600\n\n$\n9,957\n\n$\n26,598\n\n$\n1,931\n\n$\n12,450\n\n$\n10,013\n\n$\n24,522\n\n$\n(\n728\n)\n$\n\u2014\n\n$\n526\n\n$\n(\n202\n)\n$\n(\n876\n)\n$\n\u2014\n\n$\n392\n\n$\n(\n484\n)\n2,535\n\n14,600\n\n7,412\n\n24,547\n\n2,732\n\n12,450\n\n7,722\n\n22,904\n\n$\n1,807\n\n$\n14,600\n\n$\n7,938\n\n$\n24,345\n\n$\n1,856\n\n$\n12,450\n\n$\n8,114\n\n$\n22,420\n\n$\n2,805\n\n$\n\u2014\n\n$\n3,912\n\n$\n6,717\n\n$\n3,287\n\n$\n\u2014\n\n$\n2,338\n\n$\n5,625\n\n373,529\n\n232,860\n\n686,484\n\n1,292,873\n\n393,988\n\n211,123\n\n670,134\n\n1,275,245\n\n$\n376,334\n\n$\n232,860\n\n$\n690,396\n\n$\n1,299,590\n\n$\n397,275\n\n$\n211,123\n\n$\n672,472\n\n$\n1,280,870\n\n$\n1\n\n$\n\u2014\n\n$\n324\n\n$\n325\n\n$\n6\n\n$\n\u2014\n\n$\n180\n\n$\n186\n\n2,696\n\n\u2014\n\n1,834\n\n4,530\n\n3,216\n\n\u2014\n\n1,012\n\n4,228\n\n$\n\u2014\n\n$\n\u2014\n\n$\n109\n\n$\n109\n\n$\n\u2014\n\n$\n\u2014\n\n$\n89\n\n$\n89\n\n82\n\n\u2014\n\n1,910\n\n1,992\n\n75\n\n\u2014\n\n1,810\n\n1,885\n\n$\n82\n\n$\n\u2014\n\n$\n2,019\n\n$\n2,101\n\n$\n75\n\n$\n\u2014\n\n$\n1,899\n\n$\n1,974\n\n$\n\u2014\n\n$\n\u2014\n\n$\n737\n\n$\n737\n\n$\n\u2014\n\n$\n\u2014\n\n$\n464\n\n$\n464\n\n25,608\n\n19\n\n510,254\n\n535,881\n\n28,248\n\n\u2014\n\n516,577\n\n544,825\n\n$\n25,608\n\n$\n19\n\n$\n510,991\n\n$\n536,618\n\n$\n28,248\n\n$\n\u2014\n\n$\n517,041\n\n$\n545,289\n\nJPMorgan Chase & Co./2025 Form 10-K\n261\nNotes to consolidated financial statements\nDiscussion of changes in the allowance\nThe allowance for credit losses as of December\u00a031, 2025 was $\n31.2\n billion, reflecting a net addition of $\n4.4\n billion from December\u00a031, 2024.\nThe net addition to the allowance for credit losses included:\n\u2022\n$\n3.3\n billion in\nconsumer\n, driven by $\n2.2\n billion related to the Apple Card transaction, loan growth in Card Services and the impact of changes in the Firm's weighted-average macroeconomic outlook, partially offset by reduced borrower uncertainty, and\n\u2022\n$\n1.1\n\u00a0billion in\nwholesale\n, driven by net increases in the loan and lending-related commitment portfolios, an update to loss assumptions on certain leveraged loans, and net changes in credit quality of client-specific exposures, partially offset by the impact of changes in the Firm's weighted-average macroeconomic outlook and a reduction due to the impact of charge-offs.\nThe Firm's qualitative adjustments and its weighted-average macroeconomic outlook continued to include additional weight placed on the adverse scenarios to reflect ongoing uncertainties and downside risks related to the geopolitical and macroeconomic environment. During 2025, the Firm further increased the weight placed on the adverse scenarios.\nThe Firm's allowance for credit losses is estimated using a weighted average of five internally developed macroeconomic scenarios. The adverse scenarios incorporate more punitive macroeconomic factors than the central case assumptions provided in the following table, resulting in:\n\u2022\na weighted average U.S. unemployment rate peaking at 5.8% in the fourth quarter of 2026, and\n\u2022\na weighted average U.S. real GDP level that is 2.1% lower than the central case at the end of the second quarter of 2027.\nThe following table presents the Firm\u2019s central case assumptions for the periods presented:\nCentral case assumptions\nat December\u00a031, 2025\n2Q26\n4Q26\n2Q27\nU.S. unemployment rate\n(a)\n4.6\n\n%\n4.4\n\n%\n4.2\n\n%\nYoY growth in U.S. real GDP\n(b)\n2.0\n\n%\n1.8\n\n%\n1.9\n\n%\nCentral case assumptions\nat December 31, 2024\n2Q25\n4Q25\n2Q26\nU.S. unemployment rate\n(a)\n4.5\n%\n4.3\n%\n4.3\n%\nYoY growth in U.S. real GDP\n(b)\n2.0\n%\n1.9\n%\n1.8\n%\n(a)\nReflects quarterly average of forecasted U.S. unemployment rate.\n(b)\nThe year over year growth in U.S. real GDP in the forecast horizon of the central scenario is calculated as the percentage change in U.S. real GDP levels from the prior year.\nSubsequent changes to this forecast and related estimates will be reflected in the provision for credit losses in future periods.\nRefer to Note 12 for additional information on the consumer and wholesale credit portfolios.\n262\nJPMorgan Chase & Co./2025 Form 10-K\nNote 14 \u2013\nVariable interest entities\nRefer to Note 1 on page 170 for a further description of the Firm\u2019s accounting policies regarding consolidation of and involvement with VIEs.\nThe following table summarizes the most significant types of Firm-sponsored VIEs by business segment. The Firm considers a \u201cFirm-sponsored\u201d VIE to include any entity where: (1) JPMorganChase is the primary beneficiary of the structure; (2)\u00a0the VIE is used by JPMorganChase to securitize Firm assets; (3)\u00a0the VIE issues financial instruments with the JPMorganChase name; or (4) the entity is a JPMorganChase\u2013administered asset-backed commercial paper conduit.\nLine of Business\nTransaction Type\nActivity\n2025 Form 10-K\npage references\nCCB\nCredit card securitization trusts\nSecuritization of originated credit card receivables\npages 263\u2013264\nMortgage securitization trusts\nServicing and securitization of both originated and purchased residential mortgages\npages 264\u2013266\nCIB\nMortgage and other securitization trusts\nSecuritization of both originated and purchased residential and commercial mortgages, and other consumer loans\npages 264\u2013266\nMulti-seller conduits\nAssisting clients in accessing the financial markets in a cost-efficient manner and structuring transactions to meet investor needs\npage 266\nMunicipal bond vehicles\nFinancing of municipal bond investments\npages 266\u2013267\nThe Firm\u2019s other business segments and Corporate are also involved with VIEs (both third-party and Firm-sponsored), but to a lesser extent, as follows:\n\u2022\nAsset & Wealth Management: AWM sponsors and manages certain funds that are deemed VIEs. As asset manager of the funds, AWM earns a fee based on assets managed; the fee varies with each fund\u2019s investment objective and is competitively priced. For fund entities that qualify as VIEs, AWM\u2019s interests are, in certain cases, considered to be significant variable interests that result in consolidation of the financial results of these entities.\n\u2022\nCorporate\n:\n Corporate is involved with entities that may meet the definition of VIEs; however these entities are generally subject to specialized investment company accounting, which does not require the consolidation of investments, including VIEs. In addition, Treasury and CIO invest in securities generally issued by third parties which may meet the definition of VIEs (e.g., issuers of asset-backed securities). In general, the Firm does not have the power to direct the significant activities of these entities and therefore does not consolidate these entities. Refer to Note 10 for further information on the Firm\u2019s investment securities portfolio.\nIn addition, CIB also invests in and provides financing, lending-related services and other services to VIEs sponsored by third parties. Refer to page 268 of this Note for more information on the VIEs sponsored by third parties.\nSignificant Firm-sponsored VIEs\nCredit card securitizations\nCCB\u2019s Card Services business may securitize originated credit card loans, primarily through the Chase Issuance Trust (the \u201cTrust\u201d). The Firm\u2019s continuing involvement in credit card securitizations includes servicing the receivables, retaining an undivided seller\u2019s interest in the receivables, retaining certain senior and subordinated securities and maintaining escrow accounts.\nThe Firm consolidates the assets and liabilities of its sponsored credit card trusts as it is considered to be the primary beneficiary of these securitization trusts based on the Firm\u2019s ability to direct the activities of these VIEs through its servicing responsibilities and other duties, including making decisions as to the receivables that are transferred into those trusts and as to any related modifications and workouts. Additionally, the nature and extent of the Firm\u2019s other\ncontinuing involvement with the trusts, as indicated above, obligates the Firm to absorb losses and gives the Firm the right to receive certain benefits from these VIEs that could potentially be significant.\nThe underlying securitized credit card receivables and other assets of the securitization trusts are available only for payment of the beneficial interests issued by the securitization trusts; they are not available to pay the Firm\u2019s other obligations or the claims of the Firm\u2019s creditors.\nThe agreements with the credit card securitization trusts require the Firm to maintain a minimum undivided interest in the credit card trusts (generally\n5\n%). As of December\u00a031, 2025 and 2024, the Firm held undivided interests in Firm-sponsored credit card securitization trusts of $\n5.4\n billion and $\n6.6\n billion, respectively. The Firm maintained an average undivided interest in principal receivables owned by\nJPMorgan Chase & Co./2025 Form 10-K\n263\nNotes to consolidated financial statements\nthose trusts of approximately\n40\n% and\n45\n% for the years ended December\u00a031, 2025 and 2024, respectively. The Firm did\nno\nt retain any senior securities and retained $\n1.5\n billion of subordinated securities in certain of its credit card securitization trusts at both December\u00a031, 2025 and 2024. The Firm\u2019s undivided interests in the credit card trusts and securities retained are eliminated in consolidation.\nFirm-sponsored mortgage and other securitization trusts\nThe Firm securitizes (or has securitized) originated and purchased residential mortgages, commercial mortgages and other consumer loans primarily in its CCB and CIB businesses. Depending on the particular transaction, as well as the respective business involved, the Firm may act as the servicer of the loans and/or retain certain beneficial interests in the securitization trusts.\nThe following tables present the total unpaid principal amount of assets held in Firm-sponsored private-label securitization entities, including those in which the Firm has continuing involvement, and those that are consolidated by the Firm. Continuing involvement includes servicing the loans, holding senior interests or subordinated interests (including amounts required to be held pursuant to credit risk retention rules), recourse or guarantee arrangements, and derivative contracts. In certain instances, the Firm\u2019s only continuing involvement is servicing the loans. The Firm\u2019s maximum loss exposure from retained and purchased interests is the carrying value of these interests. Refer to page 271 of this Note for information on the securitization-related loan delinquencies and liquidation losses.\nPrincipal amount outstanding\nJPMorganChase interest in securitized assets in nonconsolidated VIEs\n(c)(d)(e)\nDecember 31, 2025\n(in millions)\nTotal assets held by securitization VIEs\nAssets\nheld in consolidated securitization VIEs\nAssets held in nonconsolidated securitization VIEs with continuing involvement\nTrading assets\n\u00a0Investment securities\nOther financial assets\nTotal interests held by JPMorganChase\nSecuritization-related\n(a)\nResidential mortgage:\nPrime/Alt-A and option ARMs\n$\n83,442\n\n$\n548\n\n$\n58,525\n\n$\n707\n\n$\n1,799\n\n$\n1,526\n\n$\n4,032\n\nSubprime\n10,690\n\n\u2014\n\n2,766\n\n100\n\n12\n\n\u2014\n\n112\n\nCommercial and other\n(b)\n212,555\n\n170\n\n138,986\n\n1,222\n\n5,285\n\n823\n\n7,330\n\nTotal\n$\n306,687\n\n$\n718\n\n$\n200,277\n\n$\n2,029\n\n$\n7,096\n\n$\n2,349\n\n$\n11,474\n\nPrincipal amount outstanding\nJPMorganChase interest in securitized assets in nonconsolidated VIEs\n(c)(d)(e)\nDecember 31, 2024\n(in millions)\nTotal assets held by securitization VIEs\nAssets\nheld in consolidated securitization VIEs\nAssets held in nonconsolidated securitization VIEs with continuing involvement\nTrading assets\n\u00a0Investment securities\nOther financial assets\nTotal interests held by JPMorganChase\nSecuritization-related\n(a)\nResidential mortgage:\nPrime/Alt-A and option ARMs\n$\n71,085\n\n$\n615\n\n$\n50,846\n\n$\n613\n\n$\n1,850\n\n$\n614\n\n$\n3,077\n\nSubprime\n8,824\n\n\u2014\n\n1,847\n\n44\n\n19\n\n\u2014\n\n63\n\nCommercial and other\n(b)\n186,293\n\n243\n\n125,510\n\n530\n\n5,768\n\n1,074\n\n7,372\n\nTotal\n$\n266,202\n\n$\n858\n\n$\n178,203\n\n$\n1,187\n\n$\n7,637\n\n$\n1,688\n\n$\n10,512\n\n(a)\nExcludes U.S. GSEs and government agency securitizations and re-securitizations, which are not Firm-sponsored.\n(b)\nConsists of securities backed by commercial real estate loans and non-mortgage-related consumer receivables.\n(c)\nExcludes the following: retained servicing; securities retained from loan sales and securitization activity related to U.S. GSEs and government agencies; interest rate and foreign exchange derivatives primarily used to manage interest rate and foreign exchange risks of securitization entities; senior securities of $\n188\n million and $\n256\n million at December\u00a031, 2025 and 2024, respectively, and subordinated securities of $\n56\n million and $\n49\n million at December\u00a031, 2025 and 2024, respectively, which the Firm purchased in connection with CIB\u2019s secondary market-making activities.\n(d)\nIncludes interests held in re-securitization transactions.\n(e)\nAt December\u00a031, 2025 and 2024,\n74\n% and\n77\n%, respectively, of the Firm\u2019s retained securitization interests, which are predominantly carried at fair value and include amounts required to be held pursuant to credit risk retention rules, were risk-rated \u201cA\u201d or better, on an S&P-equivalent basis. The retained interests in prime residential mortgages consisted of $\n3.5\n billion and $\n2.9\n billion of investment-grade retained interests at December\u00a031, 2025 and 2024, respectively, and $\n525\n million and $\n216\n million of noninvestment-grade retained interests at December\u00a031, 2025 and 2024, respectively. The retained interests in commercial and other securitization trusts consisted of $\n6.2\n billion and $\n6.0\n billion of investment-grade retained interests, and $\n1.1\n billion and $\n1.4\n billion of noninvestment-grade retained interests at December\u00a031, 2025 and 2024, respectively.\n264\nJPMorgan Chase & Co./2025 Form 10-K\nResidential mortgage\nThe Firm securitizes residential mortgage loans originated by CCB, as well as residential mortgage loans purchased from third parties by either CCB or CIB. CCB generally retains servicing for all residential mortgage loans it originated or purchased, and for certain mortgage loans purchased by CIB. For securitizations of loans serviced by CCB, the Firm has the power to direct the significant activities of the VIE because it is responsible for decisions related to loan modifications and workouts. CCB may also retain an interest upon securitization.\nIn addition, CIB engages in underwriting and trading activities involving securities issued by Firm-sponsored securitization trusts. As a result, CIB at times retains senior and/or subordinated interests (including residual interests and amounts required to be held pursuant to credit risk retention rules) in residential mortgage securitizations at the time of securitization, and/or reacquires positions in the secondary market in the normal course of business. In certain instances, as a result of the positions retained or reacquired by CIB or held by Treasury and CIO or CCB, when considered together with the servicing arrangements entered into by CCB, the Firm is deemed to be the primary beneficiary of certain securitization trusts.\nThe Firm does not consolidate residential mortgage securitizations (Firm-sponsored or third-party-sponsored) when it is not the servicer (and therefore does not have the power to direct the most significant activities of the trust) or does not hold a beneficial interest in the trust that could potentially be significant to the trust.\nCommercial mortgages and other consumer securitizations\nCIB originates and securitizes commercial mortgage loans, and engages in underwriting and trading activities involving the securities issued by securitization trusts. CIB may retain unsold senior and/or subordinated interests (including amounts required to be held pursuant to credit risk retention rules) in commercial mortgage securitizations at the time of securitization but, generally, the Firm does not service commercial loan securitizations. Treasury and CIO may choose to invest in these securitizations as well. For commercial mortgage securitizations the power to direct the significant activities of the VIE generally is held by the servicer or investors in a specified class of securities (\u201ccontrolling class\u201d). The Firm generally does not retain an interest in the controlling class in its sponsored commercial mortgage securitization transactions.\nRe-securitizations\nThe Firm engages in certain re-securitization transactions in which debt securities are transferred to a VIE in exchange for new beneficial interests. These transfers occur in connection with both U.S. GSEs and government agency sponsored VIEs, which are backed by residential mortgages. The Firm\u2019s consolidation analysis is largely dependent on the Firm\u2019s role and interest in the re-securitization trusts.\nThe following table presents the principal amount of securities transferred to re-securitization VIEs.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nTransfers of securities to VIEs\nU.S. GSEs and government agencies\n$\n24,350\n\n$\n44,456\n\n$\n18,864\n\nMost re-securitizations with which the Firm is involved are client-driven transactions in which a specific client or group of clients is seeking a specific return or risk profile. For these transactions, the Firm has concluded that the decision-making power of the entity is shared between the Firm and its clients, considering the joint effort and decisions in establishing the re-securitization trust and its assets, as well as the significant economic interest the client holds in the re-securitization trust; therefore the Firm does not consolidate the re-securitization VIE.\nThe Firm did\nno\nt transfer any private label securities to re-securitization VIEs during 2025, 2024 and 2023, and retained interests in any such Firm-sponsored VIEs as of December 31, 2025 and 2024 were not material.\nAdditionally, the Firm may invest in beneficial interests of third-party-sponsored re-securitizations and generally purchases these interests in the secondary market. In these circumstances, the Firm does not have the unilateral ability to direct the most significant activities of the re-securitization trust, either because it was not involved in the initial design of the trust, or the Firm was involved with an independent third-party sponsor and demonstrated shared power over the creation of the trust; therefore, the Firm does not consolidate the re-securitization VIE.\nJPMorgan Chase & Co./2025 Form 10-K\n265\nNotes to consolidated financial statements\nThe following table presents information on the Firm's interests in nonconsolidated re-securitization VIEs.\nDecember 31,\n(in millions)\nNonconsolidated\nre-securitization VIEs\n2025\n2024\nU.S. GSEs and government agencies\nInterest in VIEs\n$\n2,558\n\n$\n3,219\n\nAs of December\u00a031, 2025 and 2024, the Firm did not consolidate any U.S. GSE and government agency re-securitization VIEs. As of December\u00a031, 2025, the Firm consolidated an insignificant amount of assets and liabilities of Firm-sponsored private-label re-securitization VIEs. As of December\u00a031, 2024, the Firm did not consolidate any Firm-sponsored private-label re-securitization VIEs.\nMulti-seller conduits\nMulti-seller conduit entities are separate bankruptcy remote entities that provide secured financing, collateralized by pools of receivables and other financial assets, to customers of the Firm. The conduits fund their financing facilities through the issuance of highly rated commercial paper. The primary source of repayment of the commercial paper is the cash flows from the pools of assets. In most instances, the assets are structured with deal-specific credit enhancements provided to the conduits by the customers (i.e., sellers) or other third parties. Deal-specific credit enhancements are generally structured to cover a multiple of historical losses expected on the pool of assets, and are typically in the form of overcollateralization provided by the seller. The deal-specific credit enhancements mitigate the Firm\u2019s potential losses on its agreements with the conduits.\nTo ensure timely repayment of the commercial paper, and to provide the conduits with funding to provide financing to customers in the event that the conduits do not obtain funding in the commercial paper market, each asset pool financed by the conduits has a minimum 100% deal-specific liquidity facility associated with it provided by JPMorgan Chase Bank, N.A. JPMorgan Chase Bank, N.A. also provides the multi-seller conduit vehicles with uncommitted program-wide liquidity facilities and program-wide credit enhancement in the form of standby letters of credit. The amount of program-wide credit enhancement required is based upon commercial paper issuance and approximates\n10\n% of the outstanding balance of commercial paper.\nThe Firm consolidates its Firm-administered multi-seller conduits, as the Firm has both the power to direct the significant activities of the conduits and a potentially significant economic interest in the conduits. As administrative agent and in its role in structuring transactions, the Firm makes decisions regarding asset types and credit quality, and manages the commercial paper funding needs of the conduits.\nThe Firm\u2019s interests that could potentially be significant to the VIEs include the fees received as administrative agent and liquidity and program-wide credit enhancement provider, as well as the potential exposure created by the liquidity and credit enhancement facilities provided to the conduits.\nIn the normal course of business, JPMorganChase makes markets in and invests in commercial paper issued by the Firm-administered multi-seller conduits. The Firm held $\n2.2\n billion and $\n2.9\n billion of the commercial paper issued by the Firm-administered multi-seller conduits at December\u00a031, 2025 and 2024, respectively, which have been eliminated in consolidation. The Firm\u2019s investments reflect the Firm\u2019s funding needs and capacity and were not driven by market illiquidity. Other than the amounts required to be held pursuant to credit risk retention rules, the Firm is not obligated under any agreement to purchase the commercial paper issued by the Firm-administered multi-seller conduits.\nDeal-specific liquidity facilities, program-wide liquidity and credit enhancement provided by the Firm have been eliminated in consolidation. The Firm or the Firm-administered multi-seller conduits provide lending-related commitments to certain clients of the Firm-administered multi-seller conduits. The unfunded commitments were $\n9.9\n billion and $\n10.3\n billion at December\u00a031, 2025 and 2024, respectively, and are reported as off-balance sheet lending-related commitments in other unfunded commitments to extend credit. Refer to Note 28 for more information on off-balance sheet lending-related commitments.\nMunicipal bond vehicles\nMunicipal bond vehicles or tender option bond (\u201cTOB\u201d) trusts allow institutions to finance their municipal bond investments at short-term rates. In a typical TOB transaction, the trust purchases highly rated municipal bond(s) of a single issuer and funds the purchase by issuing two types of securities: (1) puttable floating-rate certificates (\u201cfloaters\u201d) and (2) inverse floating-rate residual interests (\u201cresiduals\u201d). The floaters are typically purchased by money market funds or other short-term investors and may be tendered, with requisite notice, to the TOB trust. The residuals are retained by the investor seeking to finance its municipal bond investment. TOB transactions where the residual is held by a third-party investor are typically known as customer TOB trusts, and non-customer TOB trusts are transactions where the Residual is retained by the Firm. Customer TOB trusts are sponsored by a third party. The Firm serves as sponsor for all non-customer TOB transactions. The Firm may provide various services to a TOB trust, including remarketing agent, liquidity or tender option provider, and/or sponsor.\n266\nJPMorgan Chase & Co./2025 Form 10-K\nJ.P. Morgan Securities LLC may serve as a remarketing agent on the floaters for TOB trusts. The remarketing agent is responsible for establishing the periodic variable rate on the floaters, conducting the initial placement and remarketing tendered floaters. The remarketing agent may, but is not obligated to, make markets in floaters. Floaters held by the Firm were not material during 2025 and 2024.\nJPMorgan Chase Bank, N.A. or J.P. Morgan Securities LLC often serves as the sole liquidity or tender option provider for the TOB trusts. The liquidity provider\u2019s obligation to perform is conditional and is limited by certain events (\u201cTermination Events\u201d), which include bankruptcy or failure to pay by the municipal bond issuer or credit enhancement provider, an event of taxability on the municipal bonds or the immediate downgrade of the municipal bond to below investment grade. In addition, the liquidity provider\u2019s exposure is typically further limited by the high credit quality of the\nunderlying municipal bonds, the excess collateralization in the vehicle, or, in certain transactions, the reimbursement agreements with the Residual holders.\nHolders of the floaters may \u201cput,\u201d or tender, their floaters to the TOB trust. If the remarketing agent cannot successfully remarket the floaters to another investor, the liquidity provider either provides a loan to the TOB trust for the TOB trust\u2019s purchase of the floaters, or it directly purchases the tendered floaters.\nTOB trusts are considered to be variable interest entities. The Firm consolidates non-customer TOB trusts because as the Residual holder, the Firm has the right to make decisions that significantly impact the economic performance of the municipal bond vehicle, and it has the right to receive benefits and bear losses that could potentially be significant to the municipal bond vehicle.\nConsolidated VIE assets and liabilities\nThe following table presents information on assets and liabilities related to VIEs consolidated by the Firm as of December\u00a031, 2025 and 2024.\nAssets\nLiabilities\nDecember 31, 2025\n(in millions)\nTrading assets\nLoans\nOther\n(c)\n\u00a0Total\nassets\n(d)\nBeneficial interests in\nVIE assets\n(e)\nOther\n(f)\nTotal\nliabilities\nVIE program type\nFirm-sponsored credit card trusts\n$\n\u2014\n\n$\n12,872\n\n$\n170\n\n$\n13,042\n\n$\n5,884\n\n$\n11\n\n$\n5,895\n\nFirm-administered multi-seller conduits\n\u2014\n\n20,140\n\n115\n\n20,255\n\n18,174\n\n24\n\n18,198\n\nMunicipal bond vehicles\n3,367\n\n\u2014\n\n29\n\n3,396\n\n3,760\n\n17\n\n3,777\n\nMortgage securitization entities\n(a)\n2\n\n566\n\n9\n\n577\n\n105\n\n40\n\n145\n\nOther\n1,466\n\n4,199\n\n(b)\n360\n\n6,025\n\n28\n\n599\n\n627\n\nTotal\n$\n4,835\n\n$\n37,777\n\n$\n683\n\n$\n43,295\n\n$\n27,951\n\n$\n691\n\n$\n28,642\n\nAssets\nLiabilities\nDecember 31, 2024\n(in millions)\nTrading assets\nLoans\nOther\n(c)\n\u00a0Total\nassets\n(d)\nBeneficial interests in\nVIE assets\n(e)\nOther\n(f)\nTotal\nliabilities\nVIE program type\nFirm-sponsored credit card trusts\n$\n\u2014\n\n$\n13,531\n\n$\n168\n\n$\n13,699\n\n$\n5,312\n\n$\n10\n\n$\n5,322\n\nFirm-administered multi-seller conduits\n1\n\n20,383\n\n133\n\n20,517\n\n18,228\n\n26\n\n18,254\n\nMunicipal bond vehicles\n3,388\n\n\u2014\n\n22\n\n3,410\n\n3,617\n\n15\n\n3,632\n\nMortgage securitization entities\n(a)\n\u2014\n\n630\n\n8\n\n638\n\n115\n\n48\n\n163\n\nOther\n496\n\n1,966\n\n350\n\n2,812\n\n51\n\n355\n\n406\n\nTotal\n$\n3,885\n\n$\n36,510\n\n$\n681\n\n$\n41,076\n\n$\n27,323\n\n$\n454\n\n$\n27,777\n\n(a)\nIncludes residential mortgage securitizations.\n(b)\nPrimarily includes consumer loans in CIB.\n(c)\nIncludes assets classified as cash and other asset line items on the Consolidated balance sheets.\n(d)\nThe assets of the consolidated VIEs included in the program types above are used to settle the liabilities of those entities. The assets and liabilities include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation.\n(e)\nThe interest-bearing beneficial interest liabilities issued by consolidated VIEs are classified on the Consolidated balance sheets as \u201cBeneficial interests issued by consolidated VIEs.\u201d The holders of these beneficial interests generally do not have recourse to the general credit of JPMorganChase. Included in beneficial interests in VIE assets are long-term beneficial interests of $\n6.0\n billion and $\n5.5\n billion at December\u00a031, 2025 and 2024, respectively.\n(f)\nIncludes liabilities classified as accounts payable and other liabilities on the Consolidated balance sheets.\nJPMorgan Chase & Co./2025 Form 10-K\n267\nNotes to consolidated financial statements\nVIEs sponsored by third parties\n\nThe Firm enters into transactions with VIEs structured by other parties. These include, for example, acting as a derivative counterparty, liquidity provider, investor, underwriter, placement agent, remarketing agent, trustee or custodian. These transactions are conducted at arm\u2019s-length, and individual credit decisions are based on the analysis of the specific VIE, taking into consideration the quality of the underlying assets. Where the Firm does not have the power to direct the activities of the VIE that most significantly impact the VIE\u2019s economic performance, or a variable interest that could potentially be significant, the Firm generally does not consolidate the VIE, but it records and reports these positions on its Consolidated balance sheets in the same manner it would record and report positions in respect of any other third-party transaction.\nTax credit vehicles\n\nThe Firm holds investments in unconsolidated tax credit vehicles, which are limited partnerships and similar entities that own and operate affordable housing, alternative energy, and other projects. These entities are primarily considered VIEs. A third party is typically the general partner or managing member and has control over the significant activities of the tax credit vehicles, and accordingly the Firm does not consolidate tax credit vehicles. The Firm generally invests in these partnerships as a limited partner and earns a return primarily through the receipt of tax credits allocated to the projects. At December\u00a031, 2025 and 2024, the maximum loss exposure, represented by equity investments and funding commitments, was $\n38.1\n billion and $\n35.2\n billion, of which $\n16.4\n billion and $\n15.0\n billion was unfunded, respectively. The Firm assesses each project and to reduce the risk of loss, may withhold varying amounts of its capital investment until the project qualifies for tax credits. Refer to Note 28 for more information on off-balance sheet lending-related commitments.\nThe Firm elected the proportional amortization method for certain tax-oriented investments on a program-by-program basis. The proportional amortization method requires the cost of eligible investments, within an elected program, be amortized in proportion to the tax benefits received with the resulting amortization reported directly in income tax expense, which aligns with the associated tax credits and other tax benefits. Investments must meet certain criteria to be eligible, including that substantially all of the return is from income tax credits and other income tax benefits.\nIn addition, under this method deferred taxes are generally not recorded as the investment is now amortized in proportion to the income tax credits and other income tax benefits received. Delayed equity contributions that are unconditional and legally\nbinding or conditional and probable of occurring are recorded in other liabilities with a corresponding increase in the carrying value of the investment. The guidance also requires a reevaluation of eligible investments when significant modifications or events occur that result in a change in the nature of the investment or a change in the Firm's relationship with the underlying project. During the period, there were no significant modifications or events that resulted in a change in the nature of an eligible investment or a change in the Firm's relationship with the underlying project.\nThe following table provides information on tax-oriented investments for which the Firm elected to apply the proportional amortization method.\nYear ended December 31,\n(in millions)\nAlternative energy and affordable housing programs\n(d)\n2025\n2024\n2023\nPrograms for which the Firm elected proportional amortization:\nCarrying value\n(a)\n$\n33,858\n\n$\n31,978\n\n$\n14,644\n\nTax credits and other tax benefits\n(b)\n6,097\n\n6,379\n\n2,044\n\nInvestments that qualify to be accounted for using proportional amortization:\nAmortization losses recognized as a component of income tax expense\n(\n4,553\n)\n(\n5,018\n)\n(\n1,561\n)\nNon-income-tax-related gains/(losses) and other returns received that are recognized outside of income tax expense\n(c)\n169\n\n142\n\n(\n1\n)\n(a)\nRecorded in\nOther assets\n on the Consolidated balance sheets. Excludes programs to which the Firm does not apply the proportional amortization method, such as historic tax credit and new market tax credit programs.\n(b)\nReflected in\nIncome tax expense\n on the Consolidated statements of income and\nOperating activities\n on the Consolidated statements of cash flows. Additionally, the Firm recognized $\n1.1\n billion, $\n1.0\n billion and\nzero\n of income tax credits along with $(\n1.4\n) billion, $(\n1.2\n) billion and\nzero\n of amortization losses from investments in programs for which the Firm elected proportional amortization but the investments did not meet certain eligibility criteria for the years ended December 31, 2025, 2024 and 2023, respectively. Those amounts were recorded on a net basis in Other income on the Consolidated statements of income and in Operating activities on the Consolidated statements of cash flows.\n(c)\nRecorded in\nOther income\n on the Consolidated statements of income and\nOperating activities\n on the Consolidated statements of cash flows. Refer to Note 6 for further information.\n(d)\nAs of December 31, 2023 represents eligible affordable housing investments.\n268\nJPMorgan Chase & Co./2025 Form 10-K\nCustomer municipal bond vehicles (TOB trusts)\nThe Firm may provide various services to customer TOB trusts, including remarketing agent and liquidity or tender option provider. In certain customer TOB transactions, the Firm, as liquidity provider, has entered into a reimbursement agreement with the Residual holder. In those transactions, upon the termination of the vehicle, the Firm has recourse to the third-party Residual holders for any shortfall. The Firm does not have any intent to protect Residual holders from potential losses on any of the underlying municipal bonds. The Firm does not consolidate customer TOB trusts, since the Firm does not have the power to make decisions that significantly impact the economic performance of the municipal bond vehicle.\nThe Firm\u2019s maximum exposure as a liquidity provider to customer TOB trusts at December\u00a031, 2025 and 2024, was $\n7.7\n billion and $\n5.8\n billion, respectively. The fair value of assets held by such VIEs at December\u00a031, 2025 and 2024 was $\n10.5\n billion and $\n8.1\n billion, respectively.\nLoan securitizations\nThe Firm has securitized and sold a variety of loans, including residential mortgages, credit card receivables, commercial mortgages and other consumer loans. The purposes of these securitization transactions were to satisfy investor demand and to generate liquidity for the Firm.\nFor loan securitizations in which the Firm is not required to consolidate the trust, the Firm records the transfer of the loan receivable to the trust as a sale when all of the following accounting criteria for a sale are met: (1) the transferred financial assets are legally isolated from the Firm\u2019s creditors; (2) the transferee or beneficial interest holder can pledge or exchange the transferred financial assets; and (3) the Firm does not maintain effective control over the transferred financial assets (e.g., the Firm cannot repurchase the transferred assets before their maturity and it does not have the ability to unilaterally cause the holder to return the transferred assets).\nFor loan securitizations accounted for as a sale, the Firm recognizes a gain or loss based on the difference between the value of proceeds received (including cash, beneficial interests, or servicing assets received) and the carrying value of the assets sold. Gains and losses on securitizations are reported in noninterest revenue.\nJPMorgan Chase & Co./2025 Form 10-K\n269\nNotes to consolidated financial statements\nSecuritization activity\nThe following table provides information related to the Firm\u2019s securitization activities for the years ended December\u00a031, 2025, 2024 and 2023, related to assets held in Firm-sponsored securitization entities that were not consolidated by the Firm, and where sale accounting was achieved at the time of the securitization.\n2025\n2024\n2023\nYear ended December 31,\n(in millions)\nResidential mortgage\n(d)\nCommercial and other\n(e)\nResidential mortgage\n(d)\nCommercial and other\n(e)\nResidential mortgage\n(d)\nCommercial and other\n(e)\nPrincipal securitized\n$\n26,361\n\n$\n16,059\n\n$\n19,988\n\n$\n17,683\n\n$\n7,678\n\n$\n3,901\n\nAll cash flows during the period:\n(a)\nProceeds received from loan sales as financial instruments\n(b)(c)\n$\n27,136\n\n$\n15,780\n\n$\n19,870\n\n$\n17,346\n\n$\n7,251\n\n$\n3,896\n\nServicing fees collected\n34\n\n41\n\n35\n\n35\n\n24\n\n5\n\nCash flows received on interests\n834\n\n1,376\n\n405\n\n1,303\n\n325\n\n425\n\n(a)\nExcludes re-securitization transactions.\n(b)\nPrimarily includes Level 2 assets.\n(c)\nThe carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale.\n(d)\nRepresents prime mortgages. Excludes loan securitization activity related to U.S. GSEs and government agencies.\n(e)\nIncludes commercial mortgages and auto loans.\nKey assumptions used to value retained interests originated during the year are shown in the table below.\nYear ended December 31,\n2025\n2024\n2023\nResidential mortgage retained interest:\nWeighted-average life (in years)\n3.1\n4.3\n9.6\nWeighted-average discount rate\n5.4\n\n%\n7.1\n\n%\n4.8\n\n%\nCommercial and other retained interest:\nWeighted-average life (in years)\n5.3\n4.5\n3.0\nWeighted-average discount rate\n4.9\n\n%\n6.2\n\n%\n4.6\n\n%\nLoans and excess MSRs sold to U.S. government-sponsored enterprises and loans in securitization transactions pursuant to Ginnie Mae guidelines\nIn addition to the amounts reported in the securitization activity tables above, the Firm, in the normal course of business, sells originated and purchased mortgage loans and certain originated excess MSRs on a nonrecourse basis, predominantly to U.S. GSEs. These loans and excess MSRs are sold primarily for the purpose of securitization by the U.S. GSEs, who provide certain guarantee provisions (e.g., credit enhancement of the loans). The Firm also sells loans into securitization transactions pursuant to Ginnie Mae guidelines; these loans are typically insured or guaranteed by another U.S. government agency. The Firm does not consolidate the securitization vehicles underlying these transactions as it is not the primary beneficiary. For a limited number of loan sales, the Firm is obligated to share a portion of the credit risk associated with the sold loans with the purchaser. Refer to Note 28 for additional information about the Firm\u2019s loan sales- and securitization-related indemnifications and Note 15 for additional information about the impact of the Firm\u2019s sale of certain excess MSRs.\nThe following table summarizes the activities related to loans sold to the U.S. GSEs, and loans in securitization transactions pursuant to Ginnie Mae guidelines.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nCarrying value of loans sold\n$\n30,496\n\n$\n25,765\n\n$\n19,906\n\nProceeds received from loan sales as cash\n$\n1,905\n\n$\n2,380\n\n$\n300\n\nProceeds from loan sales as securities\n(a)(b)\n28,449\n\n23,178\n\n19,389\n\nTotal proceeds received from loan sales\n(c)\n$\n30,354\n\n$\n25,558\n\n$\n19,689\n\nGains/(losses) on loan sales\n(d)(e)\n$\n\u2014\n\n$\n\u2014\n\n$\n\u2014\n\n(a)\nIncludes securities from U.S. GSEs and Ginnie Mae that are generally sold shortly after receipt or retained as part of the Firm\u2019s investment securities portfolio.\n(b)\nIncluded in level 2 assets.\n(c)\nExcludes the value of MSRs retained upon the sale of loans.\n(d)\nGains/(losses) on loan sales include the value of MSRs.\n(e)\nThe carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale.\n270\nJPMorgan Chase & Co./2025 Form 10-K\nOptions to repurchase delinquent loans\nIn addition to the Firm\u2019s obligation to repurchase certain loans due to material breaches of representations and warranties as discussed in Note 28, the Firm also has the option to repurchase delinquent loans that it services for Ginnie Mae loan pools, as well as for other U.S. government agencies under certain arrangements. The Firm typically elects to repurchase delinquent loans from Ginnie Mae loan pools as it continues to service them and/or manage the foreclosure process in accordance with the applicable requirements, and such loans continue to be insured or guaranteed. When the Firm\u2019s repurchase option becomes exercisable, such loans must be reported on the Consolidated balance sheets as a loan with a corresponding liability. Refer to Note 12 for additional information.\nThe following table presents loans the Firm repurchased or had an option to repurchase, real estate owned, and foreclosed government-guaranteed residential mortgage loans recognized on the Firm\u2019s Consolidated balance sheets as of December\u00a031, 2025 and 2024. Substantially all of these loans and real estate are insured or guaranteed by U.S. government agencies.\nDecember 31,\n(in millions)\n2025\n2024\nLoans repurchased or option to repurchase\n(a)\n$\n856\n\n$\n577\n\nReal estate owned\n2\n\n6\n\nForeclosed government-guaranteed residential mortgage loans\n(b)\n9\n\n10\n\n(a)\nPrimarily all of these amounts relate to loans that have been repurchased from Ginnie Mae loan pools.\n(b)\nRelates to voluntary repurchases of loans, which are included in accrued interest and accounts receivable.\nLoan delinquencies and liquidation losses\nThe table below includes information about components of and delinquencies related to nonconsolidated securitized financial assets held in Firm-sponsored private-label securitization entities, in which the Firm has continuing involvement as of December\u00a031, 2025 and 2024. For loans sold or securitized where servicing is the Firm\u2019s only form of continuing involvement, the Firm generally experiences a loss only if the Firm was required to repurchase a delinquent loan or foreclosed asset due to a breach in representations and warranties associated with its loan sale or servicing contracts.\nAs of or for the year ended December 31,\n(in millions)\nSecuritized assets\n90 days past due\nNet liquidation losses / (recoveries)\n2025\n2024\n2025\n2024\n2025\n2024\nSecuritized loans\nResidential mortgage:\nPrime/ Alt-A & option ARMs\n$\n58,525\n\n$\n50,846\n\n$\n654\n\n$\n501\n\n$\n9\n\n$\n10\n\nSubprime\n2,766\n\n1,847\n\n92\n\n113\n\n\u2014\n\n2\n\nCommercial and other\n138,986\n\n125,510\n\n4,487\n\n1,715\n\n292\n\n77\n\nTotal loans securitized\n$\n200,277\n\n$\n178,203\n\n$\n5,233\n\n$\n2,329\n\n$\n301\n\n$\n89\n\nJPMorgan Chase & Co./2025 Form 10-K\n271\nNotes to consolidated financial statements\nNote 15 \u2013\nGoodwill, mortgage servicing rights, and other intangible assets\nGoodwill\nGoodwill is recorded upon completion of a business combination as the difference between the purchase price and the fair value of the net assets acquired, and can be adjusted up to one year from the acquisition date as additional information pertaining to facts and circumstances that existed as of the acquisition date is obtained about the fair value of assets acquired and liabilities assumed. Subsequent to initial recognition, goodwill is not amortized but is tested for impairment during the fourth quarter of each fiscal year, or more often if events or circumstances, such as adverse changes in the business climate, indicate that there may be an impairment.\nThe goodwill associated with each business combination is allocated to the related reporting units, which are generally determined based on how the Firm\u2019s businesses are managed and how they are reviewed.\n\nThe following table presents goodwill attributed to the reportable business segments and Corporate.\nDecember 31,\n(in millions)\n2025\n2024\n2023\nConsumer & Community Banking\n$\n32,116\n\n$\n32,116\n\n$\n32,116\n\nCommercial & Investment Bank\n11,259\n\n11,236\n\n11,251\n\nAsset & Wealth Management\n8,634\n\n8,521\n\n8,582\n\nCorporate\n722\n\n692\n\n685\n\nTotal goodwill\n$\n52,731\n\n$\n52,565\n\n$\n52,634\n\nThe following table presents changes in the carrying amount of goodwill.\n(in millions)\n2025\n2024\n2023\nBalance at beginning of period\n$\n52,565\n\n$\n52,634\n\n$\n51,662\n\nChanges during the period from:\nBusiness combinations\n(a)\n\u2014\n\n29\n\n917\n\nOther\n(b)\n166\n\n(\n98\n)\n55\n\nBalance at December 31,\n$\n52,731\n\n$\n52,565\n\n$\n52,634\n\n(a)\nFor 2024, includes estimated goodwill associated with the acquisition of LayerOne Financial in CIB. For 2023, predominantly represents estimated goodwill associated with the acquisition of the remaining\n51\n% interest in CIFM in AWM and the acquisition of Aumni Inc., predominantly in CIB.\n(b)\nPrimarily foreign currency adjustments and an immaterial amount of goodwill written off due to impairment during the third quarter of 2025.\nGoodwill impairment testing\nThe Firm\u2019s goodwill was not impaired as of December 31, 2025, 2024 and 2023.\nThe goodwill impairment test is performed by comparing the current fair value of each reporting unit with its carrying value. If the fair value is in excess of the carrying value, then the reporting unit\u2019s goodwill is considered not to be impaired. If the fair value is less than the carrying value, then an impairment is recognized for the amount by which the reporting unit\u2019s carrying value exceeds its fair value, up to the amount of goodwill allocated to that reporting unit.\nThe Firm uses the reporting units\u2019 allocated capital plus goodwill and other intangible assets as a proxy for the carrying values of equity for the reporting units in the goodwill impairment testing. Reporting unit equity is determined on a similar basis as the allocation of capital to the LOBs which takes into consideration a variety of factors including capital levels of similarly rated peers and applicable regulatory capital requirements. LOB\u2019s allocated capital levels are incorporated into the Firm\u2019s annual budget process, which is reviewed by the Firm\u2019s Board of Directors and Operating Committee.\nThe primary method the Firm uses to estimate the fair value of its reporting units is the income approach. This approach projects cash flows for the forecast period and uses the perpetuity growth method to calculate terminal values. These cash flows and terminal values, which are based on the reporting units\u2019 annual budgets and forecasts are then discounted using an appropriate discount rate. The discount rate used for each reporting unit represents an estimate of the cost of equity for that reporting unit and is determined considering the Firm\u2019s overall estimated cost of equity (estimated using the Capital Asset Pricing Model), as adjusted for the risk characteristics specific to each reporting unit (for example, for higher levels of risk or uncertainty associated with the business or management\u2019s forecasts and assumptions). To assess the reasonableness of the discount rates used for each reporting unit, management compares the discount rate to the estimated cost of equity for publicly traded institutions with similar businesses and risk characteristics. In addition, the weighted average cost of equity (aggregating the various reporting units) is compared with the Firm\u2019s overall estimated cost of equity for reasonableness. The valuations derived from the discounted cash flow analyses are then compared with market-based trading and transaction multiples for relevant competitors. Trading and transaction comparables are used as general indicators to assess the overall reasonableness of the estimated fair values, although precise conclusions\n272\nJPMorgan Chase & Co./2025 Form 10-K\ngenerally cannot be drawn due to the differences that naturally exist between the Firm\u2019s businesses and competitor institutions.\nThe Firm also takes into consideration a comparison between the aggregate fair values of the Firm\u2019s reporting units and JPMorganChase\u2019s market capitalization. In evaluating this comparison, the Firm considers several factors, including (i) a control premium that would exist in a market transaction, (ii) factors related to the level of execution risk that would exist at the Firmwide level that do not exist at the reporting unit level and (iii) short-term market volatility and other factors that do not directly affect the value of individual reporting units.\nUnanticipated declines in business performance, increases in credit losses, increases in capital requirements, as well as deterioration in economic or market conditions, adverse regulatory or legislative changes or increases in the estimated market cost of equity, could cause the estimated fair values of the Firm\u2019s reporting units to decline in the future, which could result in a material impairment charge to earnings in a future period related to some portion of the associated goodwill.\nMortgage servicing rights\nMSRs represent the fair value of expected future cash flows for performing servicing activities for others. The fair value considers estimated future servicing fees and ancillary revenue, offset by estimated costs to service the loans, and generally declines over time as net servicing cash flows are received, effectively amortizing the MSR asset against contractual servicing and ancillary fee income. MSRs are either purchased from third parties or recognized upon sale or securitization of mortgage loans if servicing is retained.\nAs permitted by U.S. GAAP, the Firm has elected to account for its MSRs at fair value. The Firm treats its MSRs as a single class of servicing assets based on the availability of market inputs used to measure the fair value of its MSR asset and its treatment of MSRs as one aggregate pool for risk management purposes. The Firm estimates the fair value of MSRs using an option-adjusted spread (\u201cOAS\u201d) model, which projects MSR cash flows over multiple interest rate scenarios in conjunction with the Firm\u2019s prepayment model, and then discounts these cash flows at risk-adjusted rates. The model considers portfolio characteristics, contractually specified servicing fees, prepayment assumptions, delinquency rates, costs to service, late charges and other ancillary revenue, and other economic factors. The Firm compares fair value estimates and assumptions to observable market data where available, and also considers recent market activity and actual portfolio experience.\n\nJPMorgan Chase & Co./2025 Form 10-K\n273\nNotes to consolidated financial statements\nThe fair value of MSRs is sensitive to changes in interest rates, including their effect on prepayment speeds. MSRs typically decrease in value when interest rates decline because declining interest rates tend to increase prepayments and therefore reduce the expected life of the net servicing cash flows that comprise the MSR asset. Conversely, securities (e.g., mortgage-backed securities), and certain derivatives\n(e.g., those for which the Firm receives fixed-rate interest payments) increase in value when interest rates decline. JPMorganChase uses combinations of derivatives and securities to manage the risk of changes in the fair value of MSRs. The intent is to offset any interest-rate related changes in the fair value of MSRs with changes in the fair value of the related risk management instruments.\nThe following table summarizes MSR activity for the years ended December\u00a031, 2025, 2024 and 2023.\nAs of or for the year ended December 31, (in millions, except where otherwise noted)\n2025\n2024\n2023\nFair value at beginning of period\n$\n9,121\n\n$\n8,522\n\n$\n7,973\n\nMSR activity:\nOriginations of MSRs\n433\n\n325\n\n253\n\nPurchase of MSRs\n(a)\n624\n\n601\n\n1,028\n\nDisposition of MSRs\n9\n\n(\n21\n)\n(e)\n(\n188\n)\n(e)\nNet additions/(dispositions)\n1,066\n\n905\n\n1,093\n\nChanges due to collection/realization of expected cash flows\n(\n1,068\n)\n(\n1,068\n)\n(\n1,011\n)\nChanges in valuation due to inputs and assumptions:\nChanges due to market interest rates and other\n(b)\n48\n\n670\n\n424\n\nChanges in valuation due to other inputs and assumptions:\nProjected cash flows (e.g., cost to service)\n(\n36\n)\n102\n\n(\n22\n)\nDiscount rates\n(\n1\n)\n14\n\n14\n\nPrepayment model changes and other\n(c)\n37\n\n(\n24\n)\n51\n\nTotal changes in valuation due to other inputs and assumptions\n\u2014\n\n92\n\n43\n\nTotal changes in valuation due to inputs and assumptions\n48\n\n762\n\n467\n\nFair value at December 31,\n$\n9,167\n\n$\n9,121\n\n$\n8,522\n\nChange in unrealized gains/(losses) included in income related to MSRs held at December 31,\n$\n48\n\n$\n762\n\n$\n467\n\nContractual service fees, late fees and other ancillary fees included in income\n1,635\n\n1,606\n\n1,590\n\nThird-party mortgage loans serviced at December 31, (in billions)\n668\n\n652\n\n632\n\nServicer advances, net of an allowance for uncollectible amounts, at December 31\n(d)\n493\n\n577\n\n659\n\n(a)\nIncludes purchase price adjustments associated with purchased MSRs, primarily due to loans that prepaid within 90 days of settlement or did not meet certain criteria and were removed from the purchase prior to the transfer date, allowing the Firm to recover the purchase price.\n(b)\nRepresents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments.\n(c)\nRepresents changes in prepayments other than those attributable to changes in market interest rates.\n(d)\nRepresents amounts the Firm pays as the servicer (e.g., scheduled principal and interest, taxes and insurance), which will generally be reimbursed within a short period of time after the advance from future cash flows from the trust or the underlying loans. The Firm\u2019s credit risk associated with these servicer advances is minimal because reimbursement of the advances is typically senior to all cash payments to investors. In addition, the Firm maintains the right to stop payment to investors if the collateral is insufficient to cover the advance. However, certain of these servicer advances may not be recoverable if they were not made in accordance with applicable rules and agreements.\n(e)\nIncludes excess MSRs transferred to agency-sponsored trusts in exchange for stripped mortgage-backed securities (\u201cSMBS\u201d). In each transaction, a portion of the SMBS was acquired by third parties at the transaction date; the Firm acquired the remaining balance of those SMBS as trading securities.\n274\nJPMorgan Chase & Co./2025 Form 10-K\nThe following table presents the components of mortgage fees and related income (including the impact of MSR risk management activities) for the years ended December\u00a031, 2025, 2024 and 2023.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nCCB mortgage fees and related income\nProduction revenue\n$\n622\n\n$\n627\n\n$\n421\n\nNet mortgage servicing revenue:\n\nOperating revenue:\n\nLoan servicing revenue\n1,651\n\n1,659\n\n1,634\n\nChanges in MSR asset fair value due to collection/realization of expected cash flows\n(\n1,065\n)\n(\n1,067\n)\n(\n1,011\n)\nTotal operating revenue\n586\n\n592\n\n623\n\nRisk management:\n\nChanges in MSR asset fair value due to market interest rates and other\n(a)\n48\n\n670\n\n424\n\nOther changes in MSR asset fair value due to other inputs and assumptions in model\n(b)\n\u2014\n\n92\n\n43\n\nChange in derivative fair value and other\n70\n\n(\n603\n)\n(\n336\n)\nTotal risk management\n118\n\n159\n\n131\n\nTotal net mortgage servicing revenue\n704\n\n751\n\n754\n\nTotal CCB mortgage fees and related income\n1,326\n\n1,378\n\n1,175\n\nAll other\n55\n\n23\n\n1\n\nMortgage fees and related income\n$\n1,381\n\n$\n1,401\n\n$\n1,176\n\n(a)\nRepresents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments.\n(b)\nRepresents the aggregate impact of changes in model inputs and assumptions such as projected cash flows (e.g., cost to service), discount rates and changes in prepayments other than those attributable to changes in market interest rates (e.g., changes in prepayments due to changes in home prices).\nChanges in fair value based on variations in assumptions generally cannot be easily extrapolated, because the relationship of the change in the assumptions to the change in fair value are often highly interrelated and may not be linear. In the following table, the effect that a change in a particular assumption may have on the fair value is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another, which would either magnify or counteract the impact of the initial change.\nThe table below outlines the key economic assumptions used to determine the fair value of the Firm\u2019s MSRs at December\u00a031, 2025 and 2024, and outlines the sensitivities of those fair values to immediate adverse changes in those assumptions, as defined below.\nDecember 31,\n(in millions, except rates)\n2025\n2024\nWeighted-average prepayment speed assumption (constant prepayment rate)\n6.77\n\n%\n6.19\n\n%\nImpact on fair value of 10% adverse change\n$\n(\n181\n)\n$\n(\n209\n)\nImpact on fair value of 20% adverse change\n(\n353\n)\n(\n406\n)\nWeighted-average option adjusted spread\n(a)\n6.14\n\n%\n5.97\n\n%\nImpact on fair value of 100 basis points adverse change\n$\n(\n394\n)\n$\n(\n391\n)\nImpact on fair value of 200 basis points adverse change\n(\n757\n)\n(\n751\n)\n(a)\nIncludes the impact of operational risk and regulatory capital.\nJPMorgan Chase & Co./2025 Form 10-K\n275\nNotes to consolidated financial statements\nOther intangible assets\nThe Firm\u2019s finite-lived and indefinite-lived other intangible assets are initially recorded at their fair value primarily upon completion of a business combination. Finite-lived intangible assets, including core deposit intangibles, customer relationship intangibles, and certain other intangible assets, are amortized over their useful lives, estimated based on the expected future economic benefits. The Firm\u2019s intangible assets with indefinite lives, such as asset management contracts, are not subject to amortization and are assessed periodically for impairment.\nAs of December\u00a031, 2025 and 2024, the gross carrying values of other intangible assets were $\n3.5\n billion and $\n3.8\n billion, respectively, and the accumulated amortization was $\n962\n million and $\n879\n million, respectively.\nAs of December\u00a031, 2025 and 2024, the net carrying values consist of finite-lived intangible assets of $\n1.3\n billion and $\n1.7\n billion, respectively, as well as indefinite-lived intangible assets, which are not subject to amortization, of $\n1.3\n billion and $\n1.2\n billion, respectively.\nAs of December\u00a031, 2025, other intangible assets reflected core deposit and certain wealth management customer relationship intangibles related to the First Republic acquisition, and asset management contracts related to the Firm\u2019s acquisition of the remaining\n51\n% interest in CIFM. Refer to Note 34 for additional information on the First Republic acquisition.\nFor the years ended December\u00a031, 2025 and 2024, amortization expense was $\n292\n million and $\n339\n million, respectively.\nThe following table presents estimated future amortization expense.\nDecember 31,\n(in millions)\nFinite-lived intangible assets\n2026\n$\n266\n\n2027\n264\n\n2028\n264\n\n2029\n252\n\n2030\n100\n\nImpairment testing\nThe Firm\u2019s finite-lived and indefinite-lived other intangible assets are assessed for impairment annually or more often if events or changes in circumstances indicate that the asset might be impaired. Once the Firm determines that an impairment exists for an intangible asset, the impairment is recognized in other expense.\n276\nJPMorgan Chase & Co./2025 Form 10-K\nNote 16 \u2013\nPremises and equipment\nPremises and equipment includes land carried at cost, as well as buildings, leasehold improvements, internal-use software and furniture and equipment carried at cost less accumulated depreciation and amortization. The Firm\u2019s operating lease right-of-use assets are also included in Premises and equipment.\n Refer to Note 18 for a further discussion of the Firm\u2019s right-of-use assets.\nThe following table presents certain components of Premises and equipment.\nDecember 31, (in millions)\n2025\n2024\nLand, buildings and leasehold improvements\n$\n19,041\n\n$\n16,874\n\nRight-of-use assets\n(a)\n8,424\n\n7,930\n\nOther premises and equipment\n(b)\n8,779\n\n7,419\n\nTotal premises and equipment\n$\n36,244\n\n$\n32,223\n\n(a)\nExcluded $\n477\n\u00a0million and $\n564\n\u00a0million of right-of-use assets that were recorded in Other assets at December\u00a031, 2025 and 2024, respectively.\n(b)\nOther premises and equipment is comprised of internal-use software and furniture and equipment.\nJPMorganChase computes depreciation using the straight-line method over the estimated useful life for buildings and furniture and equipment. The Firm depreciates leasehold improvements over the lesser of the remainder of the lease term or the estimated useful life.\nThe Firm also capitalizes certain costs associated with the acquisition or development of internal-use software. Once the software is ready for its intended use, these costs are amortized on a straight-line basis over the software\u2019s expected useful life.\n\nThe estimated useful lives range from\n10\n to\n50\n years for buildings and leasehold improvements, and\n3\n to\n10\n years for internal-use software and furniture and equipment.\nImpairment is assessed when events or changes in circumstances indicate that the carrying value of an asset may not be fully recoverable.\nNote 17 \u2013\nDeposits\nAs of December\u00a031, 2025 and 2024, noninterest-bearing and interest-bearing deposits were as follows:\nDecember 31, (in millions)\n2025\n2024\nU.S. offices\nNoninterest-bearing (included\n $\n16,610\n\nand $\n28,904\n at fair value)\n(a)\n$\n583,342\n\n$\n592,500\n\nInterest-bearing (included\n $\n1,085\n\nand $\n1,101\n at fair value)\n(a)\n1,452,729\n\n1,345,914\n\nTotal deposits in U.S. offices\n2,036,071\n\n1,938,414\n\nNon-U.S. offices\nNoninterest-bearing (included\n $\n3,099\n\nand $\n2,255\n at fair value)\n(a)\n37,057\n\n26,806\n\nInterest-bearing (included\n $\n136\n and $\n1,508\n at fair value)\n(a)\n486,192\n\n440,812\n\nTotal deposits in non-U.S. offices\n523,249\n\n467,618\n\nTotal deposits\n$\n2,559,320\n\n$\n2,406,032\n\n(a)\nIncludes structured notes classified as deposits for which the fair value option has been elected. Refer to Note 3 for further discussion.\nAs of December\u00a031, 2025 and 2024, time deposits in denominations that met or exceeded the insured limit were as follows:\nDecember 31, (in millions)\n2025\n2024\nU.S. offices\n$\n155,114\n\n$\n149,239\n\nNon-U.S. offices\n(a)\n89,085\n\n92,639\n\nTotal\n$\n244,199\n\n$\n241,878\n\n(a)\nRepresents all time deposits in non-U.S. offices as these deposits typically exceed the insured limit.\n\nAs of December\u00a031, 2025, the remaining maturities of interest-bearing time deposits were as follows:\nDecember 31,\n(in millions)\n\nU.S.\nNon-U.S.\nTotal\n2026\n$\n223,575\n\n$\n85,868\n\n$\n309,443\n\n2027\n746\n\n\u2014\n\n746\n\n2028\n195\n\n\u2014\n\n195\n\n2029\n612\n\n\u2014\n\n612\n\n2030\n156\n\n\u2014\n\n156\n\nAfter 5\u00a0years\n130\n\n118\n\n248\n\nTotal\n$\n225,414\n\n$\n85,986\n\n$\n311,400\n\nJPMorgan Chase & Co./2025 Form 10-K\n277\nNotes to consolidated financial statements\nNote 18 -\nLeases\nFirm as lessee\nAt December 31, 2025 JPMorganChase and its subsidiaries were obligated under a number of noncancellable leases, predominantly operating leases for premises and equipment used primarily for business purposes. These leases generally have terms of\n20\n years or less, determined based on the contractual maturity of the lease, and include periods covered by options to extend or terminate the lease when the Firm is reasonably certain that it will exercise those options. All leases with lease terms greater than twelve months are reported as a lease liability with a corresponding right-of-use (\u201cROU\u201d) asset. None of these lease agreements impose restrictions on the Firm\u2019s ability to pay dividends, engage in debt or equity financing transactions or enter into further lease agreements. Certain of these leases contain escalation clauses that will increase rental payments based on maintenance, utility and tax increases, which are non-lease components. The Firm elected not to separate lease and non-lease components of a contract for its real estate leases. As such, real estate lease payments represent payments on both lease and non-lease components.\nOperating lease liabilities and ROU assets are recognized at the lease commencement date based on the present value of the future minimum lease payments over the lease term. The future lease payments are discounted at a rate that estimates the Firm\u2019s collateralized borrowing rate for financing instruments of a similar term and are included in accounts payable and other liabilities. The operating lease ROU assets, predominantly included in premises and equipment, also include any lease prepayments made, plus initial direct costs incurred, less any lease incentives received. Rental expense associated with operating leases is recognized on a straight-line basis over the lease term, and generally included in occupancy expense in the Consolidated statements of income.\n\nThe carrying values of the Firm\u2019s operating leases were as follows:\nDecember 31,\n(in millions, except where otherwise noted)\n2025\n2024\nRight-of-use assets\n$\n8,901\n$\n8,494\nLease liabilities\n9,337\n8,900\nWeighted average remaining lease term (in years)\n8.2\n8.3\nWeighted average discount rate\n4.43\n\n%\n4.24\n\n%\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nSupplemental cash flow information\nCash paid for amounts included in the measurement of lease liabilities - operating cash flows\n$\n1,759\n$\n1,734\n$\n1,662\nSupplemental non-cash information\nRight-of-use assets obtained in exchange for operating lease obligations\n$\n1,834\n$\n1,565\n$\n2,094\n\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nRental expense\nGross rental expense\n$\n2,388\n\n$\n2,231\n\n$\n2,079\n\nSublease rental income\n(\n28\n)\n(\n41\n)\n(\n72\n)\nNet rental expense\n$\n2,360\n\n$\n2,190\n\n$\n2,007\n\nThe following table presents future payments under operating leases as of December\u00a031, 2025.\nYear ended December 31,\n(in millions)\n2026\n$\n1,767\n\n2027\n1,699\n\n2028\n1,539\n\n2029\n1,322\n\n2030\n1,094\n\nAfter 2030\n3,834\n\nTotal future minimum lease payments\n11,255\n\nLess: Imputed interest\n(\n1,918\n)\nTotal\n$\n9,337\n\nIn addition to the table above, as of December\u00a031, 2025, the Firm had additional future operating lease commitments of $\n1.9\n billion that were signed but had not yet commenced. These operating leases will commence between 2026 and 2029 with lease terms up to\n21\n years.\n278\nJPMorgan Chase & Co./2025 Form 10-K\nFirm as lessor\nThe Firm provides auto and equipment lease financing to its customers through lease arrangements with lease terms that may contain renewal, termination and/or purchase options. The Firm\u2019s lease financings are predominantly auto operating leases. These assets subject to operating leases are recognized in other assets on the Firm\u2019s Consolidated balance sheets and are depreciated on a straight-line basis over the lease term to reduce the asset to its estimated residual value. Depreciation expense is included in technology, communications and equipment expense in the Consolidated statements of income. The Firm\u2019s lease income is generally recognized on a straight-line basis over the lease term and is included in other income in the Consolidated statements of income.\nOn a periodic basis, the Firm assesses leased assets for impairment, and if the carrying amount of the leased asset exceeds the undiscounted cash flows from the lease payments and the estimated residual value upon disposition of the leased asset, an impairment is recognized.\nThe risk of loss on auto and equipment leased assets relating to the residual value of the leased assets is monitored through projections of the asset residual values at lease origination and periodic review of residual values, and is mitigated through arrangements with certain manufacturers or lessees.\n\nThe following table presents the carrying value of assets subject to leases reported on the Consolidated balance sheets.\nDecember 31,\n(in millions)\n2025\n2024\nCarrying value of assets subject to operating leases, net of accumulated depreciation\n$\n20,130\n\n$\n12,988\n\nAccumulated depreciation\n3,177\n\n2,509\n\nThe following table presents the Firm\u2019s operating lease income and the related depreciation expense on the Consolidated statements of income.\nYear ended December 31, (in millions)\n2025\n2024\n2023\nOperating lease income\n$\n3,803\n\n$\n2,795\n\n$\n2,843\n\nDepreciation expense\n2,418\n\n1,685\n\n1,778\n\nThe following table presents future receipts under operating leases as of December\u00a031, 2025.\nYear ended December 31,\n(in millions)\n2026\n$\n3,637\n\n2027\n2,645\n\n2028\n1,023\n\n2029\n44\n\n2030\n4\n\nAfter 2030\n\u2014\n\nTotal future minimum lease receipts\n$\n7,353\n\nJPMorgan Chase & Co./2025 Form 10-K\n279\nNotes to consolidated financial statements\nNote 19 \u2013\nAccounts payable and other liabilities\nAccounts payable and other liabilities consist of brokerage payables, which include payables to customers and payables related to security purchases that did not settle; other accrued expenses, such as compensation accruals, credit card rewards liability, accrued interest payables, merchant servicing payables and income tax payables; and all other liabilities, including operating lease liabilities, obligations to return securities received as collateral which are measured at fair value, allowance for lending-related commitments, and litigation reserves.\nThe following table presents the components of accounts payable and other liabilities.\nDecember 31, (in millions)\n2025\n2024\nBrokerage payables\n$\n186,658\n\n$\n153,153\n\nOther payables and liabilities\n(a)\n130,136\n\n127,519\n\nTotal accounts payable and other liabilities\n$\n316,794\n\n$\n280,672\n\n(a)\u00a0\u00a0\u00a0\u00a0Includes credit card rewards liability of $\n16.0\n billion and $\n14.4\n billion at December\u00a031, 2025 and 2024, respectively.\nThe credit card rewards liability represents the estimated cost of rewards points earned and expected to be redeemed by cardholders. The liability is accrued as the cardholder earns the benefit and is reduced when the cardholder redeems points. The redemption rate and cost per point assumptions are key assumptions to estimate the liability and the current period impact is recognized in Card Income.\nRefer to Notes 7, 13, 18, 25 and 30 for additional information on accrued interest, allowance for credit losses on lending-related commitments, operating lease liabilities, income taxes and litigation reserves, respectively.\n280\nJPMorgan Chase & Co./2025 Form 10-K\nNote 20 \u2013\nLong-term debt\nJPMorganChase issues long-term debt denominated in various currencies, predominantly U.S. dollars, with both fixed and variable interest rates. Included in senior and subordinated debt below are various equity-linked or other indexed instruments, which the Firm has elected to measure at fair value. Changes in fair value are recorded in principal transactions revenue in the Consolidated statements of income, except for unrealized gains/(losses) due to DVA which are recorded in OCI.\n\nThe following table is a summary of long-term debt carrying values (including unamortized premiums and discounts, issuance costs, valuation adjustments and fair value adjustments, where applicable) by remaining contractual maturity as of December\u00a031, 2025.\nBy remaining maturity at\nDecember 31,\n(in millions, except rates)\n2025\n2024\nUnder 1 year\n1-5 years\nAfter 5 years\nTotal\nTotal\nParent company\nSenior debt:\nFixed rate\n$\n11,761\n\n$\n91,867\n\n$\n122,443\n\n$\n226,071\n\n$\n214,911\n\nVariable rate\n48\n\n6,795\n\n1,618\n\n8,461\n\n8,655\n\nInterest rates\n(f)\n2.84\n\n%\n3.74\n\n%\n4.14\n\n%\n3.90\n\n%\n3.71\n\n%\nSubordinated debt:\nFixed rate\n$\n2,489\n\n$\n3,099\n\n$\n12,919\n\n$\n18,507\n\n$\n14,457\n\nVariable rate\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nInterest rates\n(f)\n4.83\n\n%\n4.63\n\n%\n4.96\n\n%\n4.89\n\n%\n4.76\n\n%\nSubtotal\n$\n14,298\n\n$\n101,761\n\n$\n136,980\n\n$\n253,039\n\n$\n238,023\n\nSubsidiaries\nFederal Home Loan Banks advances:\nFixed rate\n$\n1,236\n\n$\n405\n\n$\n18\n\n$\n1,659\n\n$\n9,257\n\nVariable rate\n\u2014\n\n16,500\n\n\u2014\n\n16,500\n\n20,000\n\nInterest rates\n(f)\n3.33\n\n%\n4.05\n\n%\n5.65\n\n%\n4.01\n\n%\n4.67\n\n%\nPurchase Money Note:\n(a)\nFixed rate\n$\n\u2014\n\n$\n49,435\n\n$\n\u2014\n\n$\n49,435\n\n$\n49,208\n\nInterest rates\n(f)\n\u2014\n\n%\n3.40\n\n%\n\u2014\n\n%\n3.40\n\n%\n3.40\n\n%\nSenior debt:\nFixed rate\n$\n5,896\n\n$\n19,908\n\n$\n11,973\n\n$\n37,777\n\n$\n26,545\n\nVariable rate\n21,159\n\n43,393\n\n10,650\n\n75,202\n\n56,782\n\nInterest rates\n(f)\n5.02\n\n%\n3.88\n%\n1.35\n\n%\n3.66\n\n%\n3.81\n\n%\nSubtotal\n$\n28,291\n\n$\n129,641\n\n$\n22,641\n\n$\n180,573\n\n$\n161,792\n\nJunior subordinated debt:\nFixed rate\n$\n\u2014\n\n$\n495\n\n$\n\u2014\n\n$\n495\n\n$\n488\n\nVariable rate\n\u2014\n\n421\n\n678\n\n1,099\n\n1,115\n\nInterest rates\n(f)\n\u2014\n\n%\n6.87\n\n%\n5.06\n\n%\n6.10\n\n%\n6.58\n\n%\nSubtotal\n$\n\u2014\n\n$\n916\n\n$\n678\n\n$\n1,594\n\n$\n1,603\n\nTotal long-term debt\n(b)(c)(d)\n$\n42,589\n\n$\n232,318\n\n$\n160,299\n\n$\n435,206\n\n(g)(h)\n$\n401,418\n\nLong-term beneficial interests:\nFixed rate\n$\n1,156\n\n$\n4,728\n\n$\n\u2014\n\n$\n5,884\n\n$\n5,312\n\nVariable rate\n\u2014\n\n13\n\n120\n\n133\n\n166\n\nInterest rates\n(f)\n5.16\n\n%\n4.54\n\n%\n3.14\n\n%\n4.63\n\n%\n4.62\n\n%\nTotal long-term beneficial interests\n(e)\n$\n1,156\n\n$\n4,741\n\n$\n120\n\n$\n6,017\n\n$\n5,478\n\n(a)\nReflects the Purchase Money Note associated with First Republic. Refer to Note 34 for additional information.\n(b)\nIncluded long-term debt of $\n70.0\n billion and $\n80.9\n billion secured by assets totaling $\n191.0\n billion and $\n185.5\n billion at December\u00a031, 2025 and 2024, respectively. The amount of long-term debt secured by assets does not include amounts related to hybrid instruments.\n(c)\nIncluded $\n134.6\n billion and $\n100.8\n billion of long-term debt accounted for at fair value at December\u00a031, 2025 and 2024, respectively.\n(d)\nIncluded $\n18.1\n billion and $\n13.5\n billion of outstanding zero-coupon notes at December\u00a031, 2025 and 2024, respectively. The aggregate principal amount of these notes at their respective maturities is $\n57.6\n billion and $\n50.2\n billion, respectively. The aggregate principal amount reflects the contractual principal payment at maturity, which may exceed the contractual principal payment at the Firm\u2019s next call date, if applicable.\n(e)\nIncluded on the Consolidated balance sheets in beneficial interests issued by consolidated VIEs. Also included amounts accounted for at fair value which were not material as of December\u00a031, 2025 and 2024. Excluded short-term commercial paper and other short-term beneficial interests of $\n21.9\n billion and $\n21.8\n billion at December\u00a031, 2025 and 2024, respectively.\n(f)\nThe interest rates shown are the weighted average of contractual rates in effect at December\u00a031, 2025 and 2024, respectively, including non-U.S. dollar fixed- and variable-rate issuances, which excludes the effects of the associated derivative instruments used in hedge accounting relationships, if applicable. The interest rates shown exclude structured notes accounted for at fair value.\n(g)\nAs of December\u00a031, 2025, long-term debt in the aggregate of $\n320.4\n billion was redeemable at the option of JPMorganChase, in whole or in part, prior to maturity, based on the terms specified in the respective instruments.\n(h)\nThe aggregate carrying values of debt that matures in each of the five years subsequent to 2025 is $\n42.6\n billion in 2026, $\n55.8\n billion in 2027, $\n105.4\n billion in 2028, $\n31.4\n billion in 2029 and $\n39.8\n billion in 2030.\nJPMorgan Chase & Co./2025 Form 10-K\n281\nNotes to consolidated financial statements\nThe weighted-average contractual interest rates for total long-term debt excluding structured notes accounted for at fair value were\n3.89\n% and\n3.82\n% as of December\u00a031, 2025 and 2024, respectively. In order to modify exposure to interest rate and currency exchange rate movements, JPMorganChase utilizes derivative instruments, primarily interest rate and cross-currency interest rate swaps, in conjunction with some of its debt issuances. The use of these instruments modifies the Firm\u2019s interest expense on the associated debt. The modified weighted-average interest rates for total long-term debt, including the effects of related derivative instruments, were\n4.75\n% and\n5.15\n% as of December\u00a031, 2025 and 2024, respectively.\nJPMorgan Chase & Co. has guaranteed certain long-term debt of its subsidiaries, including structured notes. These guarantees rank pari passu with the Firm\u2019s other unsecured and unsubordinated indebtedness. The amount of such guaranteed long-term debt and structured notes was $\n47.6\n billion and $\n41.2\n billion at December\u00a031, 2025 and 2024, respectively.\nThe Firm\u2019s unsecured debt does not contain requirements that would call for an acceleration of payments, maturities or changes in the structure of the existing debt, provide any limitations on future borrowings or require additional collateral, based on unfavorable changes in the Firm\u2019s credit ratings, financial ratios, earnings or stock price.\n282\nJPMorgan Chase & Co./2025 Form 10-K\nNote 21 \u2013\nPreferred stock\nAt December\u00a031, 2025 and 2024, JPMorganChase was authorized to issue\n200\n million shares of preferred stock, in one or more series, with a par value of $\n1\n per share. In the event of a liquidation or dissolution of the Firm, JPMorganChase\u2019s preferred stock then outstanding takes precedence over the Firm\u2019s common stock with respect to the payment of dividends and the distribution of assets.\nThe following is a summary of JPMorganChase\u2019s non-cumulative preferred stock outstanding as of December\u00a031, 2025 and 2024, and the quarterly dividend declarations for the years ended December\u00a031, 2025, 2024 and 2023.\nShares\n(a)\nCarrying value\n\u00a0(in millions)\nIssue date\nContractual rate\nin effect at\nDecember 31, 2025\nEarliest redemption date\n(b)\nFloating annualized\nrate\n(c)\nDividend declared per share\n(d)\nDecember 31,\nDecember 31,\nYear ended December 31,\n2025\n2024\n2025\n2024\n2025\n2024\n2023\nFixed-rate:\nSeries DD\n169,625\n\n169,625\n\n$\n1,696\n\n$\n1,696\n\n9/21/2018\n5.750\n\n%\n12/1/2023\nNA\n$\n575.00\n\n$\n575.00\n\n$\n575.00\n\nSeries EE\n185,000\n\n185,000\n\n1,850\n\n1,850\n\n1/24/2019\n6.000\n\n3/1/2024\nNA\n600.00\n\n600.00\n\n600.00\n\nSeries GG\n90,000\n\n90,000\n\n900\n\n900\n\n11/7/2019\n4.750\n\n12/1/2024\nNA\n475.00\n\n475.00\n\n475.00\n\nSeries JJ\n150,000\n\n150,000\n\n1,500\n\n1,500\n\n3/17/2021\n4.550\n\n6/1/2026\nNA\n455.00\n\n455.00\n\n455.00\n\nSeries LL\n185,000\n\n185,000\n\n1,850\n\n1,850\n\n5/20/2021\n4.625\n\n6/1/2026\nNA\n462.52\n\n462.52\n\n462.52\n\nSeries MM\n200,000\n\n200,000\n\n2,000\n\n2,000\n\n7/29/2021\n4.200\n\n9/1/2026\nNA\n420.00\n\n420.00\n\n420.00\n\nFixed-to-floating rate:\nSeries Q\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n4/23/2013\n\u2014\n\n5/1/2023\nSOFR +\n3.25\n%\n\u2014\n\n220.45\n\n801.41\n\n(h)\nSeries R\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n7/29/2013\n\u2014\n\n8/1/2023\nSOFR +\n3.30\n\u2014\n\n221.70\n\n756.73\n\n(i)\nSeries S\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n1/22/2014\n\u2014\n\n2/1/2024\nSOFR +\n3.78\n\u2014\n\n233.70\n\n(g)\n675.00\n\nSeries U\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n3/10/2014\n\u2014\n\n4/30/2024\nSOFR +\n3.33\n\u2014\n\n153.13\n\n612.50\n\nSeries X\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n9/23/2014\n\u2014\n\n10/1/2024\nSOFR +\n3.33\n\u2014\n\n457.50\n\n610.00\n\nSeries CC\n125,750\n\n125,750\n\n1,258\n\n1,258\n\n10/20/2017\nSOFR +\n2.58\n11/1/2022\nSOFR +\n2.58\n709.88\n\n812.73\n\n804.08\n\nSeries FF\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n7/31/2019\n\u2014\n\n8/1/2024\nSOFR +\n3.38\n\u2014\n\n250.00\n\n500.00\n\nSeries HH\n\u2014\n\n300,000\n\n\u2014\n\n3,000\n\n1/23/2020\n\u2014\n\n2/1/2025\nSOFR +\n3.125\n\u2014\n\n460.00\n\n460.00\n\nSeries II\n150,000\n\n150,000\n\n1,500\n\n1,500\n\n2/24/2020\nSOFR +\n2.745\n\n4/1/2025\nSOFR +\n2.745\n631.68\n\n(e)\n400.00\n\n400.00\n\nSeries KK\n200,000\n\n200,000\n\n2,000\n\n2,000\n\n5/12/2021\n3.650\n\n6/1/2026\nCMT +\n2.85\n365.00\n\n365.00\n\n365.00\n\nSeries NN\n250,000\n\n250,000\n\n2,496\n\n2,496\n\n3/12/2024\n6.875\n\n6/1/2029\nCMT +\n2.737\n687.52\n\n494.63\n\n(f)\nNA\nSeries OO\n300,000\n\nNA\n2,995\n\nNA\n2/4/2025\n6.500\n\n4/1/2030\nCMT +\n2.152\n590.42\n\n(f)\nNA\nNA\nTotal preferred stock\n2,005,375\n\n2,005,375\n\n$\n20,045\n\n$\n20,050\n\n(a)\nRepresented by depositary shares.\n(b)\nEach series of fixed-to-floating rate preferred stock converts to a floating rate at the earliest redemption date.\n(c)\nReferences in the table to \u201cSOFR\u201d mean a floating annualized rate equal to three-month term SOFR (plus, in the case of the Series CC preferred stock, a spread adjustment of 0.26% per annum) plus the spreads noted. References to \u201cCMT\u201d mean a floating annualized rate equal to the five-year Constant Maturity Treasury (\u201cCMT\u201d) rate plus the spreads noted.\n(d)\nDividends on preferred stock are discretionary and non-cumulative. When declared, dividends are declared quarterly. Dividends are payable quarterly on fixed-rate preferred stock. Dividends are payable semiannually on fixed-to-floating rate preferred stock while at a fixed rate, and payable quarterly after converting to a floating rate.\n(e)\nThe dividend rate for Series II preferred stock became floating and payable quarterly starting on April 1, 2025; prior to which the dividend rate was fixed at\n4.00\n% or $\n200.00\n per share payable semiannually. The dividend rate for each quarterly dividend period commencing on April 1, 2025 was three-month term SOFR plus the spread of\n2.745\n%.\n(f)\nThe initial dividend declared was prorated based on the number of days outstanding for the period. Dividends were declared quarterly thereafter at the contractual rate.\n(g)\nThe dividend rate for Series S preferred stock became floating and payable quarterly starting on February 1, 2024; prior to which the dividend rate was fixed at\n6.75\n% or $\n337.50\n per share payable semiannually. The dividend rate for each quarterly dividend period commencing on February 1, 2024 was three-month term SOFR (plus a spread adjustment of 0.26% per annum) plus the spread of\n3.78\n%.\n(h)\nThe dividend rate for Series Q preferred stock became floating and payable quarterly starting on May 1, 2023; prior to which the dividend rate was fixed at\n5.15\n% or $\n257.50\n per share payable semiannually. The dividend rate for each quarterly dividend period commencing on August 1, 2023 was three-month term SOFR (plus a spread adjustment of 0.26% per annum) plus the spread of\n3.25\n%.\n(i)\nThe dividend rate for Series R preferred stock became floating and payable quarterly starting on August 1, 2023; prior to which the dividend rate was fixed at\n6.00\n% or $\n300.00\n per share payable semiannually. The dividend rate for each quarterly dividend period commencing on August 1, 2023 was three-month term SOFR (plus a spread adjustment of 0.26% per annum) plus the spread of\n3.30\n%.\nJPMorgan Chase & Co./2025 Form 10-K\n283\nNotes to consolidated financial statements\nEach series of preferred stock has a liquidation value and redemption price per share of $\n10,000\n, plus accrued but unpaid dividends. The aggregate liquidation value was $\n20.1\n\u00a0billion at December\u00a031, 2025.\nIssuances\nOn February 4, 2025, the Firm issued $\n3.0\n\u00a0billion of fixed-rate reset non-cumulative preferred stock, Series OO.\nOn March 12, 2024, the Firm issued $\n2.5\n\u00a0billion of fixed-rate reset non-cumulative preferred stock, Series NN.\nRedemptions\nOn February 1, 2025, the Firm redeemed all $\n3.0\n\u00a0billion of its fixed-to-floating rate non-cumulative preferred stock, Series HH.\nOn October 1, 2024, the Firm redeemed all $\n1.6\n\u00a0billion of its fixed-to-floating rate non-cumulative preferred stock, Series X.\nOn August 1, 2024, the Firm redeemed all $\n2.3\n\u00a0billion of its fixed-to-floating rate non-cumulative preferred stock, Series FF.\nOn May 1, 2024, the Firm redeemed all $\n5.0\n\u00a0billion of its fixed-to-floating rate non-cumulative preferred stock, Series Q, Series R and Series S.\nOn April 30, 2024, the Firm redeemed all $\n1.0\n\u00a0billion of its fixed-to-floating rate non-cumulative preferred stock, Series U.\nRedemption rights\nEach series of the Firm\u2019s preferred stock may be redeemed on any dividend payment date on or after the earliest redemption date for that series. All outstanding preferred stock series may also be redeemed following a \u201ccapital treatment event,\u201d as described in the terms of each series. Any redemption of the Firm\u2019s preferred stock is subject to non-objection from the Board of Governors of the Federal Reserve System (the \u201cFederal Reserve\u201d).\n284\nJPMorgan Chase & Co./2025 Form 10-K\nNote 22 \u2013\nCommon stock\nAt December\u00a031, 2025 and 2024, JPMorganChase was authorized to issue\n9.0\n billion shares of common stock with a par value of $\n1\n per share.\nCommon shares issued which were reissued from treasury by the Firm during the years ended December\u00a031, 2025, 2024 and 2023 were as follows.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nTotal issued \u2013 balance at January 1\n4,104.9\n\n4,104.9\n\n4,104.9\n\nTreasury \u2013 balance at January 1\n(\n1,307.3\n)\n(\n1,228.3\n)\n(\n1,170.7\n)\nRepurchase\n(\n114.4\n)\n(\n91.7\n)\n(\n69.5\n)\nReissuance:\nEmployee benefits and compensation plans\n12.3\n\n11.9\n\n10.9\n\nEmployee stock purchase plans\n0.7\n\n0.8\n\n1.0\n\nTotal reissuance\n13.0\n\n12.7\n\n11.9\n\nTotal treasury \u2013 balance at December 31\n(\n1,408.7\n)\n(\n1,307.3\n)\n(\n1,228.3\n)\nOutstanding at December 31\n2,696.2\n\n2,797.6\n\n2,876.6\n\nOn July 1, 2025, the Firm announced that its Board of Directors had authorized a new $\n50\n\u00a0billion common share repurchase program, effective July 1, 2025. Through June 30, 2025, the Firm was authorized to purchase up to $\n30\n\u00a0billion of common shares under its previously-approved common share repurchase program that was announced on June 28, 2024.\nThe following table sets forth the Firm\u2019s repurchases of common stock for the years ended December\u00a031, 2025, 2024 and 2023.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nTotal number of shares of common stock repurchased\n114.4\n\n91.7\n\n69.5\n\nAggregate purchase price of common stock repurchases\n(a)\n$\n31,640\n\n$\n18,841\n\n$\n9,898\n\n(a)\nExcludes excise tax and commissions.\nThe Board of Directors\u2019 authorization to repurchase common shares is utilized at management\u2019s discretion. The common share repurchase program approved by the Board of Directors does not establish specific price targets or timetables. Management determines the amount and timing of common share repurchases based on various factors, including market conditions; legal and regulatory considerations affecting the amount and timing of repurchase activity; the Firm\u2019s capital position (taking into account goodwill and intangibles); organic capital generation; current and proposed future capital requirements; and other investment opportunities. The amount of common shares that the Firm repurchases in any period may be substantially more or less than the amounts estimated or actually repurchased in prior periods, reflecting the dynamic nature of the decision-making process. The Firm\u2019s common share repurchases may be suspended by management at any time; and may be executed through open market purchases or privately negotiated transactions, or utilizing Rule 10b5-1 plans, which are written trading plans that the Firm may enter into from time to time under Rule 10b5-1 of the Securities Exchange Act of 1934 and which allow the Firm to repurchase its common shares during periods when it may otherwise not be repurchasing common shares \u2014 for example, during internal trading blackout periods.\nAs of December\u00a031, 2025, approximately\n50.0\n million shares of common stock were reserved for issuance under various employee incentive, compensation, option and stock purchase plans, and directors\u2019 compensation plans.\nJPMorgan Chase & Co./2025 Form 10-K\n285\nNotes to consolidated financial statements\nNote 23 \u2013\nEarnings per share\nBasic earnings per share (\u201cEPS\u201d) is calculated using the two-class method. Under the two-class method, all earnings (distributed and undistributed) are allocated to common stock and participating securities. JPMorganChase grants RSUs under its share-based compensation programs, predominantly all of which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to dividends paid to holders of the Firm\u2019s common stock. These unvested RSUs meet the definition of participating securities based on their respective rights to receive nonforfeitable dividends, and they are treated as a separate class of securities in computing basic EPS. Participating securities are not included as incremental shares in computing diluted EPS; refer to Note 9 for additional information.\nDiluted EPS incorporates the potential impact of contingently issuable shares, including awards which require future service as a condition of delivery of the underlying common stock. Diluted EPS is calculated under both the two-class and treasury stock methods, and the more dilutive amount is reported. For each of the periods presented in the table below, diluted EPS calculated under the two-class method was more dilutive.\nThe following table presents the calculation of net income applicable to common stockholders and basic and diluted EPS for the years ended December\u00a031, 2025, 2024 and 2023.\nYear ended December 31,\n(in millions,\nexcept per share amounts)\n2025\n2024\n2023\nBasic earnings per share\nNet income\n$\n57,048\n\n$\n58,471\n\n$\n49,552\n\nLess: Preferred stock dividends\n1,099\n\n1,259\n\n1,501\n\nNet income applicable to common equity\n55,949\n\n57,212\n\n48,051\n\nLess: Dividends and undistributed earnings allocated to participating securities\n268\n\n344\n\n291\n\nNet income applicable to common stockholders\n$\n55,681\n\n$\n56,868\n\n$\n47,760\n\nTotal weighted-average basic shares outstanding\n2,776.5\n\n2,873.9\n\n2,938.6\n\nNet income per share\n$\n20.05\n\n$\n19.79\n\n$\n16.25\n\nDiluted earnings per share\nNet income applicable to common stockholders\n$\n55,681\n\n$\n56,868\n\n$\n47,760\n\nTotal weighted-average basic shares outstanding\n2,776.5\n\n2,873.9\n\n2,938.6\n\nAdd: Dilutive impact of unvested PSUs, nondividend-earning RSUs and SARs\n5.0\n\n5.1\n\n4.5\n\nTotal weighted-average diluted shares outstanding\n2,781.5\n\n2,879.0\n\n2,943.1\n\nNet income per share\n$\n20.02\n\n$\n19.75\n\n$\n16.23\n\n286\nJPMorgan Chase & Co./2025 Form 10-K\nNote 24 \u2013\nAccumulated other comprehensive income/(loss)\nAOCI includes the after-tax change in unrealized gains and losses on investment securities, foreign currency translation adjustments (including the impact of related derivatives), fair value changes of excluded components on fair value hedges, cash flow hedging activities, net gain/(loss) related to the Firm\u2019s defined benefit pension and OPEB plans, and fair value option-elected liabilities arising from changes in the Firm\u2019s own credit risk (DVA).\nYear ended December 31,\n(in millions)\nUnrealized\ngains/(losses)\non investment securities\nTranslation adjustments, net of hedges\nFair value\nhedges\nCash flow hedges\nDefined benefit pension and OPEB plans\nDVA on fair value option elected liabilities\nAccumulated other comprehensive income/(loss)\nBalance at December\u00a031, 2022\n$\n(\n9,124\n)\n$\n(\n1,545\n)\n$\n(\n33\n)\n$\n(\n5,656\n)\n$\n(\n1,451\n)\n$\n468\n\n$\n(\n17,341\n)\nNet change\n5,381\n\n329\n\n(\n101\n)\n1,724\n\n373\n\n(\n808\n)\n6,898\n\nBalance at December\u00a031, 2023\n$\n(\n3,743\n)\n(a)\n$\n(\n1,216\n)\n$\n(\n134\n)\n$\n(\n3,932\n)\n$\n(\n1,078\n)\n$\n(\n340\n)\n$\n(\n10,443\n)\nNet change\n(\n87\n)\n(\n858\n)\n(\n87\n)\n(\n882\n)\n(\n63\n)\n(\n36\n)\n(\n2,013\n)\nBalance at December 31, 2024\n$\n(\n3,830\n)\n(a)\n$\n(\n2,074\n)\n$\n(\n221\n)\n$\n(\n4,814\n)\n$\n(\n1,141\n)\n$\n(\n376\n)\n$\n(\n12,456\n)\nNet change\n3,569\n\n1,339\n\n64\n\n3,388\n\n579\n\n(\n773\n)\n8,166\n\nBalance at December 31, 2025\n$\n(\n261\n)\n(a)\n$\n(\n735\n)\n$\n(\n157\n)\n$\n(\n1,426\n)\n$\n(\n562\n)\n$\n(\n1,149\n)\n$\n(\n4,290\n)\n(a)\nIncluded after-tax net unamortized unrealized losses of $(\n240\n) million, $(\n651\n) million, and $(\n895\n) million for the years ended 2025, 2024 and 2023, respectively, related to AFS securities that have been transferred to HTM. As of December 31, 2023, included after-tax net unamortized unrealized losses of $(\n29\n) million related to HTM securities that have been transferred to AFS as permitted by the new hedge accounting guidance adopted on January 1, 2023. Refer to Note 10 for further information.\nThe following table presents the pre-tax and after-tax changes in the components of OCI.\n2025\n2024\n2023\nYear ended December 31, (in millions)\nPre-tax\nTax effect\nAfter-tax\nPre-tax\nTax effect\nAfter-tax\nPre-tax\nTax effect\nAfter-tax\nUnrealized gains/(losses) on investment securities:\nNet unrealized gains/(losses) arising during the period\n$\n4,646\n\n$\n(\n1,120\n)\n$\n3,526\n\n$\n(\n1,135\n)\n$\n274\n\n$\n(\n861\n)\n$\n3,891\n\n$\n(\n922\n)\n$\n2,969\n\nReclassification adjustment for realized (gains)/losses included in net income\n(a)\n57\n\n(\n14\n)\n43\n\n1,021\n\n(\n247\n)\n774\n\n3,180\n\n(\n768\n)\n2,412\n\nNet change\n4,703\n\n(\n1,134\n)\n3,569\n\n(\n114\n)\n27\n\n(\n87\n)\n7,071\n\n(\n1,690\n)\n5,381\n\nTranslation adjustments:\n(b)\nTranslation\n6,123\n\n(\n218\n)\n5,905\n\n(\n4,385\n)\n250\n\n(\n4,135\n)\n1,714\n\n(\n95\n)\n1,619\n\nHedges\n(\n6,042\n)\n1,476\n\n(\n4,566\n)\n4,322\n\n(\n1,045\n)\n3,277\n\n(\n1,697\n)\n407\n\n(\n1,290\n)\nNet change\n81\n\n1,258\n\n1,339\n\n(\n63\n)\n(\n795\n)\n(\n858\n)\n17\n\n312\n\n329\n\nFair value hedges, net change\n(c)\n84\n\n(\n20\n)\n64\n\n(\n115\n)\n28\n\n(\n87\n)\n(\n134\n)\n33\n\n(\n101\n)\nCash flow hedges:\nNet unrealized gains/(losses) arising during the period\n2,057\n\n(\n500\n)\n1,557\n\n(\n3,742\n)\n904\n\n(\n2,838\n)\n483\n\n(\n114\n)\n369\n\nReclassification adjustment for realized (gains)/losses included in net income\n(d)\n2,406\n\n(\n575\n)\n1,831\n\n2,579\n\n(\n623\n)\n1,956\n\n1,775\n\n(\n420\n)\n1,355\n\nNet change\n4,463\n\n(\n1,075\n)\n3,388\n\n(\n1,163\n)\n281\n\n(\n882\n)\n2,258\n\n(\n534\n)\n1,724\n\nDefined benefit pension and OPEB plans, net change\n691\n\n(\n112\n)\n579\n\n(\n131\n)\n68\n\n(\n63\n)\n421\n\n(\n48\n)\n373\n\nDVA on fair value option elected liabilities, net change\n(\n1,025\n)\n252\n\n(\n773\n)\n(\n45\n)\n9\n\n(\n36\n)\n(\n1,066\n)\n258\n\n(\n808\n)\nTotal other comprehensive income/(loss)\n$\n8,997\n\n$\n(\n831\n)\n$\n8,166\n\n$\n(\n1,631\n)\n$\n(\n382\n)\n$\n(\n2,013\n)\n$\n8,567\n\n$\n(\n1,669\n)\n$\n6,898\n\n(a)\nThe pre-tax amount is reported in Investment securities gains/(losses) in the Consolidated statements of income.\n(b)\nReclassifications of pre-tax realized gains/(losses) on translation adjustments and related hedges are reported in other income/expense in the Consolidated statements of income. During the year ended December\u00a031, 2025, the Firm reclassified a net pre-tax gain of $\n7\n million to other income/expense, of which $\n14\n\u00a0million gain related to net investment hedges and $(\n7\n)\u00a0million loss related to cumulative translation adjustments. During the year ended December\u00a031, 2024, the Firm reclassified a net pre-tax gain of $\n7\n million. During the year ended December\u00a031, 2023, the Firm reclassified a net pre-tax loss of $(\n3\n) million.\n(c)\nRepresents changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads, which are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income. The initial cost of cross-currency basis spreads is recognized in earnings as part of the accrual of interest on the cross-currency swaps.\n(d)\nThe pre-tax amounts are primarily recorded in noninterest revenue, net interest income and compensation expense in the Consolidated statements of income.\nJPMorgan Chase & Co./2025 Form 10-K\n287\nNotes to consolidated financial statements\nNote 25 \u2013\nIncome taxes\nJPMorganChase and its eligible subsidiaries file a consolidated U.S. federal income tax return. JPMorganChase uses the asset and liability method to provide for income taxes on all transactions recorded in the Consolidated Financial Statements. This method requires that income taxes reflect the expected future tax consequences of temporary differences between the carrying amounts of assets or liabilities for book and tax purposes. Accordingly, a deferred tax asset or liability for each temporary difference is determined based on the tax rates that the Firm expects to be in effect when the underlying items of income and expense are realized. JPMorganChase\u2019s expense for income taxes includes the current and deferred portions of that expense. A valuation allowance is established to reduce deferred tax assets to the amount the Firm expects to realize.\n\nDue to the inherent complexities arising from the nature of the Firm\u2019s businesses, and from conducting business and being taxed in a substantial number of\njurisdictions, significant judgments and estimates are required to be made. Agreement of tax liabilities between JPMorganChase and the many tax jurisdictions in which the Firm files tax returns may not be finalized for several years. Thus, the Firm\u2019s final tax-related assets and liabilities may ultimately be different from those currently reported.\nFor the year ended December 31, 2025, the Firm adopted the Income Taxes: Improvement to Income Tax Disclosures accounting standard, under the retrospective method. The adoption of this guidance resulted in expanded disclosures in certain tables below.\nEffective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method guidance, under the modified retrospective method. Refer to Notes 1, 6 and 14 for additional information.\nEffective tax rate and expense\nThe following table presents a reconciliation of the applicable statutory U.S. federal income tax rate to the effective tax rate.\n2025\n2024\n2023\nYear ended December 31,\n(in millions, except rates)\nIncome tax expense\n% of income before income tax expense\nIncome tax expense\n% of income before income tax expense\nIncome tax expense\n% of income before income tax expense\nStatutory U.S. federal tax rate\n$\n15,245\n\n21.0\n\n%\n$\n15,767\n\n21.0\n\n%\n$\n12,938\n\n21.0\n\n%\nIncrease/(decrease) in tax rate resulting from:\nU.S. state and local income taxes, net of U.S. federal income tax benefit\n(a)\n2,688\n\n3.7\n\n2,373\n\n3.2\n\n1,729\n\n2.8\n\nForeign tax effects\n1,386\n\n1.9\n\n1,670\n\n2.2\n\n1,411\n\n2.3\n\nEffect of changes in tax laws or rates enacted in the current period\n(\n134\n)\n(\n0.2\n)\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nEffect of cross border tax laws, net\n(\n342\n)\n(\n0.5\n)\n(\n509\n)\n(\n0.7\n)\n(\n325\n)\n(\n0.5\n)\nTax credits, net\n(\n2,144\n)\n(\n3.0\n)\n(\n1,985\n)\n(\n2.6\n)\n(\n2,802\n)\n(\n4.5\n)\nAlternative energy credits\n(\n1,135\n)\n(\n1.6\n)\n(\n1,125\n)\n(\n1.5\n)\n(\n2,170\n)\n(\n3.5\n)\nAll other\n(\n1,009\n)\n(\n1.4\n)\n(\n860\n)\n(\n1.1\n)\n(\n632\n)\n(\n1.0\n)\nChange in valuation allowances\n248\n\n0.3\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nNontaxable or nondeductible items\n(\n246\n)\n(\n0.3\n)\n(\n369\n)\n(\n0.5\n)\n29\n\n\u2014\n\nChanges in unrecognized tax benefits\n(\n387\n)\n(\n0.5\n)\n(\n3\n)\n\u2014\n\n56\n\n0.1\n\nOther, net\n(\n767\n)\n(\n1.0\n)\n(\n334\n)\n(\n0.5\n)\n(\n976\n)\n(\n1.6\n)\nTotal income tax expense and effective tax rate\n$\n15,547\n\n21.4\n\n%\n$\n16,610\n\n22.1\n\n%\n$\n12,060\n\n(b)\n19.6\n\n%\n(b)\n(a)\nFor the years ended December 31, 2025 and 2024, California, New York City, and New York State made up greater than 50% of the effect of the U.S. state and local income taxes category. For the year ended December 31, 2023, New York City and California made up greater than 50% of the effect of the U.S. state and local income taxes category.\n(b)\nIncome tax expense associated with the First Republic acquisition was reflected in the estimated bargain purchase gain, which resulted in a reduction in the Firm\u2019s effective tax rate.\n288\nJPMorgan Chase & Co./2025 Form 10-K\nThe following table reflects the components of income tax expense/(benefit) included in the Consolidated statements of income.\nIncome tax expense/(benefit)\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nCurrent income tax expense/(benefit)\nU.S. federal\n$\n3,109\n\n$\n7,091\n\n$\n8,973\n\nU.S. state and local\n2,559\n\n2,762\n\n3,266\n\nNon-U.S.\n4,268\n\n4,753\n\n4,355\n\nTotal current income tax expense\n9,936\n\n14,606\n\n16,594\n\nDeferred income tax expense/(benefit)\nU.S. federal\n4,447\n\n1,771\n\n(\n3,475\n)\nU.S. state and local\n906\n\n161\n\n(\n1,094\n)\nNon-U.S.\n258\n\n72\n\n35\n\nTotal deferred income tax expense/(benefit)\n5,611\n\n2,004\n\n(\n4,534\n)\nTotal income tax expense\n$\n15,547\n\n$\n16,610\n\n$\n12,060\n\nTotal income tax expense includes $\n629\n million, $\n314\n million and $\n68\n million of tax benefits for the years ended December 31, 2025, 2024 and 2023, respectively, resulting from the resolution of tax audits.\nTax effect of items recorded in stockholders\u2019 equity\nThe preceding table does not reflect the tax effect of certain items that are recorded each period directly in stockholders\u2019 equity, which are predominantly reflected in OCI as disclosed in Note 24. For the year ended December 31, 2024, stockholders\u2019 equity reflected the tax effect associated with the Firm\u2019s adoption of the Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method guidance. For the year ended December 31, 2023, stockholders\u2019 equity reflected the tax effect associated with the Firm\u2019s adoption of the TDR accounting guidance. Both of the respective adoptions were recognized in retained earnings. Refer to Note 1, 6 and 14 for further information.\nResults from U.S. and non-U.S. earnings\nThe following table presents the U.S. and non-U.S. components of income before income tax expense.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nU.S.\n$\n56,184\n\n$\n59,472\n\n$\n46,868\n\nNon-U.S.\n(a)\n16,411\n\n15,609\n\n14,744\n\nIncome before income tax expense\n$\n72,595\n\n$\n75,081\n\n$\n61,612\n\n(a)\nFor purposes of this table, non-U.S. income is defined as income generated from operations located outside the U.S.\nThe Firm will recognize any U.S. income tax expense it may incur on global intangible low tax income as income tax expense in the period in which the tax is incurred.\nIncome taxes paid\nCash paid for income taxes, net of refunds, was $\n5.3\n billion, $\n11.7\n billion, and $\n9.9\n billion for the years ended December 31, 2025, 2024 and 2023, respectively.\nThe following table presents income taxes paid by respective jurisdiction in excess of 5% of total income taxes paid, net of refunds received.\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nU.S. federal\n$\n(\n1,099\n)\n$\n3,465\n\n$\n2,797\n\nU.S. state and local\nNew York State\n538\n\nNM\n590\n\nCalifornia\n465\n\n810\n\n721\n\nNew York City\n270\n\nNM\nNM\nAll other\n459\n\n2,065\n\n1,432\n\nTotal U.S. state and local\n1,732\n\n2,875\n\n2,743\n\nNon-U.S.\nUnited Kingdom\n987\n\n1,254\n\n1,254\n\nIndia\n582\n\n599\n\nNM\nFrance\n459\n\nNM\nNM\nLuxembourg\n272\n\nNM\nNM\nGermany\nNM\n647\n\nNM\nAll other\n2,376\n\n2,875\n\n3,114\n\nTotal Non-U.S.\n4,676\n\n5,375\n\n4,368\n\nTotal cash income taxes paid, net\n$\n5,309\n\n$\n11,715\n\n$\n9,908\n\nNM refers to not meaningful, which reflects the amount of income taxes paid during the year that does not meet the 5% disaggregation threshold.\nJPMorgan Chase & Co./2025 Form 10-K\n289\nNotes to consolidated financial statements\nDeferred taxes\n\nDeferred income tax expense/(benefit) reflects the differences between assets and liabilities measured for financial reporting purposes versus income tax return purposes. Deferred tax assets are recognized if, in management\u2019s judgment, their realizability is determined to be more likely than not. If a deferred tax asset is determined to be unrealizable, a valuation allowance is established.\nThe significant components of deferred tax assets and liabilities are reflected in the following table, the net deferred tax assets are reflected in other assets on the Firm\u2019s Consolidated balance sheets.\nDecember 31,\n(in millions)\n2025\n2024\nDeferred tax assets\nAllowance for loan losses\n$\n7,402\n\n$\n6,117\n\nEmployee benefits\n1,079\n\n1,165\n\nAccrued expenses and other\n5,907\n\n8,881\n\nDepreciation and amortization\n\u2014\n\n386\n\nNon-U.S. operations\n1,027\n\n948\n\nTax attribute carryforwards\n2,252\n\n352\n\nGross deferred tax assets\n17,667\n\n17,849\n\nValuation allowance\n(\n476\n)\n(\n249\n)\nDeferred tax assets, net of valuation allowance\n$\n17,191\n\n$\n17,600\n\nDeferred tax liabilities\nDepreciation and amortization\n$\n2,343\n\n$\n\u2014\n\nMortgage servicing rights, net of hedges\n1,950\n\n1,912\n\nLeasing transactions\n4,291\n\n2,249\n\nOther, net\n1,659\n\n1,264\n\nGross deferred tax liabilities\n10,243\n\n5,425\n\nNet deferred tax assets\n$\n6,948\n\n$\n12,175\n\nJPMorganChase has recorded deferred tax assets of $\n2.3\n billion at December\u00a031, 2025 in connection with tax attribute carryforwards. GBC and FTC carryforwards were $\n1.7\n billion and $\n257\n\u00a0million, respectively. State and local capital loss carryforwards were $\n1.2\n billion, non-U.S. NOL carryforwards were $\n1.0\n billion, U.S. federal NOL carryforwards were $\n193\n\u00a0million, and other U.S. federal tax attributes were $\n61\n\u00a0million. If not utilized, a portion of the U.S. federal NOL carryforwards and other U.S. federal tax attributes will expire between 2026 and 2036 whereas others have an unlimited carryforward period. Similarly, certain non-U.S. NOL carryforwards will expire between 2028 and 2042 whereas others have an unlimited carryforward period. The state and local capital loss carryforwards will expire between 2026 and 2029. GBC carryforwards will expire in 2045 and FTC carryforwards will expire between 2030 and 2035.\nThe valuation allowance at December\u00a031, 2025 was predominantly driven by deferred tax assets associated with FTCs and non-U.S. NOLs.\n290\nJPMorgan Chase & Co./2025 Form 10-K\nUnrecognized tax benefits\nAt December\u00a031, 2025, 2024 and 2023, JPMorganChase\u2019s unrecognized tax benefits, excluding related interest expense and penalties, were $\n5.6\n billion, $\n6.2\n billion and $\n5.4\n billion, respectively, of which $\n4.6\n billion, $\n4.4\n billion and $\n3.9\n billion, respectively, if recognized, would reduce the annual effective tax rate. Included in the amount of unrecognized tax benefits are certain items that would not affect the effective tax rate if they were recognized in the Consolidated statements of income. These unrecognized items include the tax effect of certain temporary differences, the portion of gross state and local unrecognized tax benefits that would be offset by the benefit from associated U.S. federal income tax deductions, and the portion of gross non-U.S. unrecognized tax benefits that would have offsets in other jurisdictions. JPMorganChase evaluates the need for changes in unrecognized tax benefits based on its anticipated tax return filing positions as part of its U.S. federal, state and local, and non-U.S. tax returns. In addition, the Firm is presently under audit by a number of taxing authorities, most notably by the Internal Revenue Service, as summarized in the Tax examination status table below. The change in the unrecognized tax benefit would result in a payment or income statement recognition.\nThe following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits.\n(in millions)\n2025\n2024\n2023\nBalance at January\u00a01,\n$\n6,159\n\n$\n5,401\n\n$\n5,043\n\nIncreases based on tax positions related to the current period\n609\n\n1,721\n\n1,440\n\nIncreases based on tax positions related to prior periods\n128\n\n92\n\n37\n\nDecreases based on tax positions related to prior periods\n(\n1,268\n)\n(\n907\n)\n(\n1,110\n)\nDecreases related to cash settlements with taxing authorities\n(\n4\n)\n(\n148\n)\n(\n9\n)\nBalance at December 31,\n$\n5,624\n\n$\n6,159\n\n$\n5,401\n\nAfter-tax interest expense/(benefit) and penalties related to income tax liabilities recognized in income tax expense were $\n241\n million, $\n288\n million and $\n229\n million for the years ended December 31, 2025, 2024 and 2023, respectively.\nAt December\u00a031, 2025 and 2024, in addition to the liability for unrecognized tax benefits, the Firm had accrued $\n1.9\n billion and $\n1.7\n billion, respectively, for income tax-related interest and penaltie\ns.\n\nTax examination status\nJPMorganChase is continually under examination by the Internal Revenue Service, by taxing authorities throughout the world, and by many state and local jurisdictions throughout the U.S.\nThe following table summarizes the status of tax years that remain subject to income tax examination of JPMorganChase and its consolidated subsidiaries by significant jurisdictions as of December\u00a031, 2025.\nPeriods under examination\nStatus\nJPMorganChase \u2013 U.S.\n2011 \u2013 2013\nField examination of amended returns; certain matters at Appellate level\nJPMorganChase \u2013 U.S.\n2014 - 2020\nField examination of original and amended returns; certain matters at Appellate level\nJPMorganChase \u2013 New York City\n2015 - 2018\nField examination\nJPMorganChase \u2013 New York State\n2015 - 2018\nField examination\nJPMorganChase \u2013 U.K.\n2017 \u2013 2023\nField examination of certain select entities\nJPMorgan Chase & Co./2025 Form 10-K\n291\nNotes to consolidated financial statements\nNote 26 \u2013\nRestricted cash, other restricted assets and intercompany funds transfers\nRestricted cash and other restricted assets\nCertain of the Firm\u2019s cash and other assets are restricted as to withdrawal or usage. These restrictions are imposed by various regulatory authorities based on the particular activities of the Firm\u2019s subsidiaries.\nThe business of JPMorgan Chase Bank, N.A. is subject to examination and regulation by the OCC. The Bank is a member of the U.S. Federal Reserve System, and its deposits in the U.S. are insured by the FDIC, subject to applicable limits.\nThe Firm is required to maintain cash reserves at certain non-US central banks.\nThe Firm is also subject to rules and regulations established by other U.S. and non-U.S. regulators. As part of its compliance with the respective regulatory requirements, the Firm\u2019s broker-dealer activities are subject to certain restrictions on cash and other assets.\nThe following table presents the components of the Firm\u2019s restricted cash:\nDecember 31, (in billions)\n2025\n2024\nSegregated for the benefit of securities and cleared derivative customers\n$\n19.4\n\n$\n18.7\n\nCash reserves at non-U.S. central banks and held for other general purposes\n9.6\n\n8.8\n\nTotal restricted cash\n(a)\n$\n29.0\n\n$\n27.5\n\n(a)\nComprises $\n27.8\n billion and $\n26.1\n billion in deposits with banks, and $\n1.2\n billion and $\n1.4\n billion in cash and due from banks on the Consolidated balance sheets as of December 31, 2025 and 2024, respectively.\nAlso, as of December\u00a031, 2025 and 2024, the Firm had the following other restricted assets:\n\u2022\nCash and securities pledged with clearing organizations for the benefit of customers of $\n44.9\n billion and $\n40.7\n billion, respectively.\n\u2022\nSecurities with a fair value of $\n40.8\n billion and $\n26.8\n billion, respectively, in relation to customer activity.\nIntercompany funds transfers\nRestrictions imposed by U.S. federal law prohibit JPMorgan Chase Bank, N.A., and its subsidiaries, from lending to JPMorgan Chase & Co. (\u201cParent Company\u201d) and certain of its affiliates unless the loans are secured in specified amounts. Such secured loans provided by any banking subsidiary to the Parent Company or to any particular affiliate, together with certain other transactions with such affiliate (collectively referred to as \u201ccovered transactions\u201d), must be made on terms and conditions that are consistent with safe and sound banking practices. In addition, unless collateralized with cash or US Government debt obligations, covered transactions are generally limited to\n10\n% of the banking subsidiary\u2019s total capital, as determined by the risk-based capital guidelines; the aggregate amount of covered transactions between any banking subsidiary and all of its affiliates is limited to\n20\n% of the banking subsidiary\u2019s total capital.\nThe Parent Company\u2019s\ntwo\n principal subsidiaries are JPMorgan Chase Bank, N.A. and JPMorgan Chase Holdings LLC, an intermediate holding company (the \u201cIHC\u201d). The IHC generally holds the stock of JPMorganChase\u2019s subsidiaries other than JPMorgan Chase Bank, N.A. and its subsidiaries. The IHC also owns other assets and provides intercompany loans to the Parent Company. The Parent Company is obligated to contribute to the IHC substantially all the net proceeds received from securities issuances (including issuances of senior and subordinated debt securities and of preferred and common stock).\nThe principal sources of income and funding for the Parent Company are dividends from JPMorgan Chase Bank, N.A. and dividends and extensions of credit from the IHC. In addition to dividend restrictions set forth in statutes and regulations, the Federal Reserve, the OCC and the FDIC have authority under the Financial Institutions Supervisory Act to prohibit or to limit the payment of dividends by the banking organizations they supervise, including the Parent Company and its subsidiaries that are banks or bank holding companies, if, in the banking regulator\u2019s opinion, payment of a dividend would constitute an unsafe or unsound practice in light of the financial condition of the banking organization. The IHC is prohibited from paying dividends or extending credit to the Parent Company if certain capital or liquidity \u201cthresholds\u201d are breached or if limits are otherwise imposed by the Parent Company\u2019s management or Board of Directors.\nAt January\u00a01, 2026, the Parent Company\u2019s principal banking subsidiary, JPMorgan Chase Bank, N.A., could pay approximately $\n30.1\n billion in dividends to the Parent Company without the prior approval of its relevant banking regulators. The capacity to pay dividends in 2026 will be supplemented by JPMorgan Chase Bank, N.A.\u2019s earnings during the year.\n292\nJPMorgan Chase & Co./2025 Form 10-K\nNote 27 \u2013\nRegulatory capital\nThe Federal Reserve establishes capital requirements, including well-capitalized standards, for the Firm as a consolidated financial holding company. The OCC establishes similar minimum capital requirements and standards for the Firm\u2019s principal IDI subsidiary, JPMorgan Chase Bank, N.A.\nThe capital rules under Basel III establish minimum capital ratios and overall capital adequacy standards for large and internationally active U.S. bank holding companies and banks, including the Firm and JPMorgan Chase Bank, N.A. Under the rules currently in effect, two comprehensive approaches are prescribed for calculating Basel III RWA: a Standardized approach, and an Advanced approach. For each of these risk-based capital ratios, the capital adequacy of the Firm and JPMorgan Chase Bank, N.A. is evaluated against the lower of the Standardized or Advanced approaches compared to their respective regulatory capital ratio requirements.\nThe three components of regulatory capital under the Basel III rules and their primary drivers are as illustrated below:\nUnder the risk-based capital and leverage-based guidelines of the Federal Reserve, JPMorgan Chase & Co. is required to maintain minimum ratios for CET1 capital, Tier 1 capital, Total capital, Tier 1 leverage and the SLR. Failure to meet these minimum requirements could cause the Federal Reserve to take action. JPMorgan Chase Bank, N.A. is also subject to these capital requirements established by its primary regulators\n.\nThe following table presents the risk-based regulatory capital ratio requirements and well-capitalized ratios to which the Firm and JPMorgan Chase Bank, N.A. were subject as of December\u00a031, 2025 and 2024.\nStandardized capital ratio requirements\nAdvanced\ncapital ratio requirements\nWell-capitalized ratios\nBHC\n(a)(b)\nIDI\n(c)\nBHC\n(a)(b)\nIDI\n(c)\nBHC\n(d)\nIDI\n(e)\nRisk-based capital ratios\n\nCET1 capital\n11.5\n\n%\n7.0\n\n%\n11.5\n\n%\n7.0\n\n%\nNA\n6.5\n\n%\nTier 1 capital\n13.0\n\n8.5\n\n13.0\n\n8.5\n\n6.0\n\n%\n8.0\n\nTotal capital\n15.0\n\n10.5\n\n15.0\n\n10.5\n\n10.0\n\n10.0\n\nNote: The table above is as defined by the regulations issued by the Federal Reserve, OCC and FDIC and to which the Firm and JPMorgan Chase Bank, N.A. are subject.\n(a)\nRepresents the regulatory capital ratio requirements applicable to the Firm. The CET1, Tier 1 and Total capital ratio requirements each include a respective minimum requirement plus a GSIB surcharge of\n4.5\n% as calculated under Method 2; plus a\n2.5\n% SCB for Standardized ratios and a fixed\n2.5\n% capital conservation buffer for Advanced ratios. The countercyclical buffer is currently set to\n0\n% by the federal banking agencies.\n(b)\nFor the year ended December\u00a031, 2024, the CET1, Tier 1, and Total capital ratio requirements under Standardized applicable to the Firm were\n12.3\n%,\n13.8\n%, and\n15.8\n%, respectively; the Advanced CET1, Tier 1, and Total capital ratio requirements applicable to the Firm were\n11.5\n%,\n13.0\n%, and\n15.0\n%, respectively.\n(c)\nRepresents requirements for JPMorgan Chase Bank, N.A. The CET1, Tier 1 and Total capital ratio requirements include a fixed capital conservation buffer requirement of\n2.5\n% that is applicable to JPMorgan Chase Bank, N.A. JPMorgan Chase Bank, N.A. is not subject to the GSIB surcharge.\n(d)\nRepresents requirements for bank holding companies pursuant to regulations issued by the Federal Reserve.\n(e)\nRepresents requirements for JPMorgan Chase Bank, N.A. pursuant to regulations issued under the FDIC Improvement Act.\nThe following table presents the leverage-based regulatory capital ratio requirements and well-capitalized ratios to which the Firm and JPMorgan Chase Bank, N.A. were subject as of December\u00a031, 2025 and 2024.\nCapital ratio requirements\n(a)\nWell-capitalized ratios\nBHC\nIDI\nBHC\n(b)\nIDI\nLeverage-based capital ratios\nTier 1 leverage\n4.0\n\n%\n4.0\n\n%\nNA\n5.0\n\n%\nSLR\n5.0\n\n6.0\n\nNA\n6.0\n\nNote: The table above is as defined by the regulations issued by the Federal Reserve, OCC and FDIC and to which the Firm and JPMorgan Chase Bank, N.A. are subject.\n(a)\nRepresents minimum SLR requirement of\n3.0\n%, as well as supplementary leverage buffer requirements of\n2.0\n% and\n3.0\n% for BHC and JPMorgan Chase Bank, N.A., respectively.\n(b)\nThe Federal Reserve's regulations do not establish well-capitalized thresholds for these measures for BHCs.\nJPMorgan Chase & Co./2025 Form 10-K\n293\nNotes to consolidated financial statements\nCECL Regulatory Capital Transition\nBeginning January 1, 2022, the $\n2.9\n\u00a0billion CECL capital benefit, provided by the Federal Reserve in response to the COVID-19 pandemic, was phased out at 25% per year over a three-year period and fully phased out as of January 1, 2025. As of December\u00a031, 2024, the Firm\u2019s CET1 capital reflected the remaining benefit of $\n720\n\u00a0million associated with the CECL capital transition provisions.\nSimilarly, as of January 1, 2025, the Firm has phased out the other CECL capital transition provisions which impacted Tier 2 capital, adjusted average assets, total leverage exposure and RWA, as applicable.\nThe following tables present risk-based capital metrics under both the Standardized and Advanced approaches and leverage-based capital metrics for JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A. As of December\u00a031, 2025 and 2024, JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A. were well-capitalized and met all capital requirements to which each was subject.\nDecember 31, 2025\n(in millions, except ratios)\nStandardized\nAdvanced\nJPMorgan\nChase & Co.\nJPMorgan\nChase Bank, N.A.\nJPMorgan\nChase & Co.\nJPMorgan\nChase Bank, N.A.\nRisk-based capital metrics:\n(a)\nCET1 capital\n$\n288,469\n\n$\n294,804\n\n$\n288,469\n\n$\n294,804\n\nTier 1 capital\n307,630\n\n294,807\n\n307,630\n\n294,807\n\nTotal capital\n343,843\n\n317,684\n\n328,962\n\n(d)\n302,732\n\n(d)\nRisk-weighted assets\n(b)\n1,981,692\n\n1,928,039\n\n2,045,249\n\n(d)\n1,864,923\n\n(d)\nCET1 capital ratio\n(c)\n14.6\n\n%\n15.3\n\n%\n14.1\n\n%\n15.8\n\n%\nTier 1 capital ratio\n(c)\n15.5\n\n15.3\n\n15.0\n\n15.8\n\nTotal capital ratio\n(c)\n17.4\n\n16.5\n\n16.1\n\n16.2\n\nDecember 31, 2024\n(in millions, except ratios)\nStandardized\nAdvanced\nJPMorgan\nChase & Co.\nJPMorgan\nChase Bank, N.A.\nJPMorgan\nChase & Co.\nJPMorgan\nChase Bank, N.A.\nRisk-based capital metrics:\n(a)\nCET1 capital\n$\n275,513\n\n$\n275,732\n\n$\n275,513\n\n$\n275,732\n\nTier 1 capital\n294,881\n\n275,737\n\n294,881\n\n275,737\n\nTotal capital\n325,589\n\n296,041\n\n311,898\n\n(d)\n282,328\n\n(d)\nRisk-weighted assets\n1,757,460\n\n1,718,777\n\n1,740,429\n\n(d)\n1,594,072\n\n(b)\nCET1 capital ratio\n15.7\n\n%\n16.0\n\n%\n15.8\n\n%\n17.3\n\n%\nTier 1 capital ratio\n16.8\n\n16.0\n\n16.9\n\n17.3\n\nTotal capital ratio\n18.5\n\n17.2\n\n17.9\n\n17.7\n\n(a)\nAs of January 1, 2025, the benefit from the CECL capital transition provision had been fully phased out. The capital metrics for the year ended December\u00a031, 2024 reflected the CECL capital transition provisions.\n(b)\nIncludes approximately $\n23\n billion under the Standardized approach and approximately $\n110\n billion under the Advanced approach for both the Firm and Bank related to the Apple Card transaction.\n(c)\nIncludes decreases of approximately\n25\n basis points under the Standardized approach for both the Firm and Bank and approximately\n90\n basis points and\n110\n basis points under the Advanced approach for the Firm and Bank, respectively, related to the Apple Card transaction.\n(d)\nIncludes the impacts of certain assets associated with First Republic to which the Standardized approach has been applied as permitted by the transition provisions in the U.S. capital rules.\nThree months ended\n(in millions, except ratios)\nDecember 31, 2025\nDecember 31, 2024\nJPMorgan\nChase & Co.\nJPMorgan\nChase Bank, N.A.\nJPMorgan\nChase & Co.\nJPMorgan\nChase Bank, N.A.\nLeverage-based capital metrics:\n(a)\nAdjusted average assets\n(b)\n$\n4,472,394\n\n$\n3,766,709\n\n$\n4,070,499\n\n$\n3,491,283\n\nTier 1 leverage ratio\n6.9\n\n%\n7.8\n\n%\n7.2\n\n%\n7.9\n\n%\nTotal leverage exposure\n$\n5,302,001\n\n$\n4,571,728\n\n$\n4,837,568\n\n$\n4,246,516\n\nSLR\n5.8\n\n%\n6.4\n\n%\n6.1\n\n%\n6.5\n\n%\n(a)\nAs of January 1, 2025, the benefit from the CECL capital transition provision had been fully phased out. The capital metrics for the year ended December\u00a031, 2024 reflected the CECL capital transition provisions.\n(b)\nAdjusted average assets, for purposes of calculating the leverage ratios, includes quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill (inclusive of estimated equity method goodwill) and other intangible assets.\n294\nJPMorgan Chase & Co./2025 Form 10-K\nNote 28 \u2013\nOff\u2013balance sheet lending-related\nfinancial instruments, guarantees, and\nother commitments\nGenerally, JPMorganChase provides lending-related financial instruments (e.g., commitments and guarantees) to address the financing needs of its customers and clients. The contractual amount of these financial instruments represents the maximum possible credit risk to the Firm should the customer or client draw upon the commitment or the Firm be required to fulfill its obligation under the guarantee, and should the customer or client subsequently fail to perform according to the terms of the contract. Most of these commitments and guarantees have historically been refinanced, extended, cancelled, or expired without being fully drawn or a default occurring. As a result, the total contractual amount of these instruments is not, in the Firm\u2019s view, representative of its expected future credit exposure or funding requirements.\nTo provide for expected credit losses in wholesale and certain consumer lending-related commitments, an allowance for credit losses on lending-related commitments is maintained. Refer to Note 13 for further information regarding the allowance for credit losses on lending-related commitments.\nThe following table summarizes the contractual amounts and carrying values of off-balance sheet lending-related financial instruments, guarantees and other commitments at December\u00a031, 2025 and 2024. The amounts in the table below for credit card, home equity and certain scored business banking lending-related commitments represent the total available credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit for these commitments will be utilized at the same time. The Firm can generally reduce or cancel these commitments, in accordance with the contract, or to the extent otherwise permitted by law, including when there has been a demonstrable decline in the creditworthiness of the borrower or significant decrease in the value of underlying property.\nJPMorgan Chase & Co./2025 Form 10-K\n295\nNotes to consolidated financial statements\nOff\u2013balance sheet lending-related financial instruments, guarantees and other commitments\nContractual amount\nCarrying value\n(i)(j)\n2025\n2024\n2025\n2024\nBy remaining maturity\nas of December 31,\n(in millions)\nExpires in 1 year or less\nExpires after\n1 year through\n3 years\nExpires after\n3 years through\n5 years\nExpires after 5 years\nTotal\nTotal\nLending-related\nConsumer, excluding credit card:\nResidential Real Estate\n(a)\n$\n13,496\n\n$\n5,665\n\n$\n3,454\n\n$\n6,383\n\n$\n28,998\n\n$\n30,349\n\n$\n327\n\n$\n534\n\nAuto and other\n10,784\n\n1\n\n4\n\n3,800\n\n14,589\n\n14,495\n\n10\n\n37\n\nTotal consumer, excluding credit card\n24,280\n\n5,666\n\n3,458\n\n10,183\n\n43,587\n\n44,844\n\n337\n\n571\n\nCredit card\n(b)\n1,073,537\n\n104,229\n\n(h)\n\u2014\n\n\u2014\n\n1,177,766\n\n1,001,311\n\n2,200\n\n(k)\n\u2014\n\nTotal consumer\n(c)\n1,097,817\n\n109,895\n\n3,458\n\n10,183\n\n1,221,353\n\n1,046,155\n\n2,537\n\n571\n\nWholesale:\nOther unfunded commitments to extend credit\n(d)\n135,171\n\n179,512\n\n219,910\n\n26,913\n\n561,506\n\n498,437\n\n3,112\n\n2,608\n\nStandby letters of credit and other financial guarantees\n(d)\n16,443\n\n8,135\n\n4,905\n\n436\n\n29,919\n\n28,676\n\n616\n\n473\n\nOther letters of credit\n(d)\n4,183\n\n126\n\n6\n\n214\n\n4,529\n\n4,354\n\n13\n\n37\n\nTotal wholesale\n(c)\n155,797\n\n187,773\n\n224,821\n\n27,563\n\n595,954\n\n531,467\n\n3,741\n\n3,118\n\nTotal lending-related\n$\n1,253,614\n\n$\n297,668\n\n$\n228,279\n\n$\n37,746\n\n$\n1,817,307\n\n$\n1,577,622\n\n$\n6,278\n\n$\n3,689\n\nOther guarantees and commitments\nSecurities lending indemnification agreements and guarantees\n(e)\n$\n405,910\n\n$\n\u2014\n\n$\n\u2014\n\n$\n\u2014\n\n$\n405,910\n\n$\n310,046\n\n$\n\u2014\n\n$\n\u2014\n\nDerivatives qualifying as guarantees\n1,168\n\n633\n\n9,572\n\n37,658\n\n49,031\n\n49,628\n\n(\n12\n)\n113\n\nUnsettled resale and securities borrowed agreements\n136,841\n\n231\n\n\u2014\n\n\u2014\n\n137,072\n\n115,939\n\n\u2014\n\n2\n\nUnsettled repurchase and securities loaned agreements\n52,308\n\n587\n\n\u2014\n\n\u2014\n\n52,895\n\n66,986\n\n\u2014\n\n(\n2\n)\nLoan sale and securitization-related indemnifications:\nMortgage repurchase liability\nNA\nNA\nNA\nNA\nNA\nNA\n37\n\n45\n\nLoans sold with recourse\nNA\nNA\nNA\nNA\n2,015\n\n1,189\n\n19\n\n23\n\nExchange & clearing house guarantees and commitments\n(f)\n433,537\n\nNA\nNA\nNA\n433,537\n\n401,486\n\n\u2014\n\n\u2014\n\nOther guarantees and commitments\n (g)\n9,866\n\n2,075\n\n391\n\n906\n\n13,238\n\n12,396\n\n15\n\n28\n\n(a)\nIncludes certain commitments to purchase loans from correspondents.\n(b)\nAlso includes commercial card lending-related commitments primarily in CIB.\n(c)\nPredominantly all consumer and wholesale lending-related commitments are in the U.S.\n(d)\nAs of December\u00a031, 2025 and 2024, reflected the contractual amount net of risk participations totaling $\n181\n million and $\n85\n million, respectively, for other unfunded commitments to extend credit; $\n9.2\n\u00a0billion and $\n9.5\n\u00a0billion, respectively, for standby letters of credit and other financial guarantees; and $\n514\n million and $\n556\n million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.\n(e)\nAs of December\u00a031, 2025 and 2024, collateral held by the Firm in support of securities lending indemnification agreements was $\n431.9\n\u00a0billion and $\n328.7\n\u00a0billion, respectively. Securities lending collateral primarily consists of cash, G7 government securities, and securities issued by U.S. GSEs and government agencies.\n(f)\nAs of December\u00a031, 2025 and 2024, includes guarantees to the Fixed Income Clearing Corporation under the sponsored member repo program and commitments and guarantees associated with the Firm\u2019s membership in certain clearing houses.\n(g)\nAs of December\u00a031, 2025 and 2024, primarily includes equity investment commitments, unfunded commitments to purchase secondary market loans, unfunded commitments related to certain tax-oriented equity investments, and commitments to purchase leased assets.\n(h)\nIncludes estimated total credit exposure related to the Apple Card transaction at the time that the transaction is expected to close of approximately $\n104\n billion, including approximately $\n23\n billion of estimated drawn loans.\n(i)\nFor lending-related products, the carrying value includes the allowance for lending-related commitments and the guarantee liability; for derivative-related products, and lending-related commitments for which the fair value option was elected, the carrying value represents the fair value.\n(j)\nFor lending-related commitments, the carrying value also includes fees and any purchase discounts or premiums that are deferred and recognized in accounts payable and other liabilities on the Consolidated balance sheets. Deferred amounts for revolving commitments and commitments not expected to fund, are amortized to lending- and deposit-related fees on a straight line basis over the commitment period. For all other commitments the deferred amounts remain deferred until the commitment funds or is sold.\n(k)\nRepresents the allowance for lending-related commitments related to the Apple Card transaction.\n296\nJPMorgan Chase & Co./2025 Form 10-K\nOther unfunded commitments to extend credit\nOther unfunded commitments to extend credit generally consist of commitments for working capital and general corporate purposes, extensions of credit to support commercial paper facilities and bond financings in the event that those obligations cannot be remarketed to new investors, as well as committed liquidity facilities to clearing organizations. The Firm also issues commitments under multipurpose facilities which could be drawn upon in several forms, including the issuance of a standby letter of credit.\nGuarantees\nU.S. GAAP requires that a guarantor recognize, at the inception of a guarantee, a liability in an amount equal to the fair value of the obligation undertaken in issuing the guarantee. U.S. GAAP defines a guarantee as a contract that contingently requires the guarantor to pay the guaranteed party based upon: (a) changes in an underlying asset, liability or equity security of the guaranteed party; or (b) a third party\u2019s failure to perform under a specified agreement. The Firm considers the following off\u2013balance sheet arrangements to be guarantees under U.S. GAAP: standby letters of credit and other financial guarantees, securities lending indemnifications, certain indemnification agreements included within third-party contractual arrangements, certain derivative contracts and the guarantees under the sponsored member repo program.\nAs required by U.S. GAAP, the Firm initially records guarantees at the inception date fair value of the non-contingent obligation assumed (e.g., the amount of consideration received or the net present value of the premium receivable). For these obligations, the Firm records this fair value amount in other liabilities with an offsetting entry recorded in cash (for premiums received), or other assets (for premiums receivable). Any premium receivable recorded in other assets is\nreduced as cash is received under the contract, and the fair value of the liability recorded at inception is amortized into income as lending and deposit-related fees over the life of the guarantee contract. The lending-related contingent obligation is recognized based on expected credit losses in addition to, and separate from, any non-contingent obligation.\nNon-lending-related contingent obligations are recognized when the liability becomes probable and reasonably estimable. These obligations are not recognized if the estimated amount is less than the carrying amount of any non-contingent liability recognized at inception (adjusted for any amortization). Examples of non-lending-related contingent obligations include indemnifications provided in sales agreements, where a portion of the sale proceeds is allocated to the guarantee, which adjusts the gain or loss that would otherwise result from the transaction. For these indemnifications, the initial liability is amortized to income as the Firm\u2019s risk is reduced (i.e., over time or when the indemnification expires).\nThe contractual amount and carrying value of guarantees and indemnifications are included in the table on page 296.\nFor additional information on the guarantees, see below.\nStandby letters of credit and other financial guarantees\n\nStandby letters of credit and other financial guarantees are conditional lending commitments issued by the Firm to guarantee the performance of a client or customer to a third party under certain arrangements, such as commercial paper facilities, bond financings, acquisition financings, trade financings and similar transactions.\nThe following table summarizes the contractual amount and carrying value of standby letters of credit and other financial guarantees and other letters of credit arrangements as of December\u00a031, 2025 and 2024.\nStandby letters of credit, other financial guarantees and other letters of credit\n2025\n2024\nDecember 31,\n(in millions)\nStandby letters of credit and\nother financial guarantees\nOther letters\nof credit\nStandby letters of credit and\nother financial guarantees\nOther letters\nof credit\nInvestment-grade\n(a)\n$\n20,535\n\n$\n3,187\n\n$\n20,443\n\n$\n3,380\n\nNoninvestment-grade\n(a)\n9,384\n\n1,342\n\n8,233\n\n974\n\nTotal contractual amount\n$\n29,919\n\n$\n4,529\n\n$\n28,676\n\n$\n4,354\n\nAllowance for lending-related commitments\n$\n175\n\n$\n13\n\n$\n94\n\n$\n37\n\nGuarantee liability\n441\n\n\u2014\n\n379\n\n\u2014\n\nTotal carrying value\n$\n616\n\n$\n13\n\n$\n473\n\n$\n37\n\nCommitments with collateral\n$\n16,969\n\n$\n540\n\n$\n16,805\n\n$\n357\n\n(a)\nThe ratings scale is based on the Firm\u2019s internal risk ratings. Refer to Note 12 for further information on internal risk ratings.\nJPMorgan Chase & Co./2025 Form 10-K\n297\nNotes to consolidated financial statements\nSecurities lending indemnifications\nThrough the Firm\u2019s securities lending program, counterparties\u2019 securities, via custodial and non-custodial arrangements, may be lent to third parties. As part of this program, the Firm provides an indemnification in the lending agreements which protects the lender against the failure of the borrower to return the lent securities. To minimize its liability under these indemnification agreements, the Firm obtains cash or other highly liquid collateral with a market value exceeding\n100\n% of the value of the securities on loan from the borrower. Collateral is marked to market daily to help assure that collateralization is adequate. Additional collateral is called from the borrower if a shortfall exists, or collateral may be released to the borrower in the event of overcollateralization. If a borrower defaults, the Firm would use the collateral held to purchase replacement securities in the market or to credit the lending client or counterparty with the cash equivalent thereof.\nThe cash collateral held by the Firm may be invested on behalf of the client in indemnified resale agreements, whereby the Firm indemnifies the client against the loss of principal invested. To minimize its liability under these agreements, the Firm obtains collateral with a market value exceeding\n100\n% of the principal invested.\nDerivatives qualifying as guarantees\n\nThe Firm transacts in certain derivative contracts that have the characteristics of a guarantee under U.S. GAAP. These contracts include written put options that require the Firm to purchase assets upon exercise by the option holder at a specified price by a specified date in the future. The Firm may enter into written put option contracts in order to meet client needs, or for other trading purposes. The terms of written put options are typically\nfive years\n or less.\nDerivatives deemed to be guarantees also includes stable value contracts, commonly referred to as \u201cstable value products\u201d, that require the Firm to make a payment of the difference between the market value and the book value of a counterparty\u2019s reference portfolio of assets in the event that market value is less than book value and certain other conditions have been met. Stable value products are transacted in order to allow investors to realize investment returns with less volatility than an unprotected portfolio. These contracts are typically longer-term or may have no stated maturity, but allow the Firm to elect to terminate the contract under certain conditions.\nThe notional value of derivative guarantees generally represents the Firm\u2019s maximum exposure. However, exposure to certain stable value products is contractually limited to a substantially lower percentage of the notional amount.\nThe fair value of derivative guarantees reflects the probability, in the Firm\u2019s view, of whether the Firm will be required to perform under the contract. The Firm reduces exposures to these contracts by entering into offsetting transactions, or by entering into contracts that hedge the market risk related to the derivative guarantees.\nThe following table summarizes the derivatives qualifying as guarantees as of December\u00a031, 2025 and 2024.\n(in millions)\nDecember 31, 2025\nDecember 31, 2024\nNotional amounts\nDerivative guarantees\n$\n49,031\n\n$\n49,628\n\nStable value contracts with contractually limited exposure\n35,462\n\n32,939\n\nMaximum exposure of stable value contracts with contractually limited exposure\n1,312\n\n1,740\n\nFair value\nDerivative guarantees\n(\n12\n)\n113\n\nIn addition to derivative contracts that meet the characteristics of a guarantee, the Firm is both a purchaser and seller of credit protection in the credit derivatives market. Refer to Note 5 for a further discussion of credit derivatives.\nUnsettled securities financing agreements\nIn the normal course of business, the Firm enters into resale and securities borrowed agreements. At settlement, these commitments result in the Firm advancing cash to and receiving securities collateral from the counterparty. The Firm also enters into repurchase and securities loaned agreements. At settlement, these commitments result in the Firm receiving cash from and providing securities collateral to the counterparty. Such agreements settle at a future date. These agreements generally do not meet the definition of a derivative, and therefore, are not recorded on the Consolidated balance sheets until settlement date. These agreements predominantly have regular-way settlement terms. Refer to Note 11 for a further discussion of securities financing agreements.\nLoan sales- and securitization-related indemnifications\nMortgage repurchase liability\nIn connection with the Firm\u2019s mortgage loan sale and securitization activities with U.S. GSEs the Firm has made representations and warranties that the loans sold meet certain requirements, and that may require the Firm to repurchase mortgage loans and/or indemnify the loan purchaser if such representations and warranties are breached by the Firm.\n298\nJPMorgan Chase & Co./2025 Form 10-K\nPrivate label securitizations\nThe liability related to repurchase demands associated with private label securitizations is separately evaluated by the Firm in establishing its litigation reserves.\nRefer to Note 30 for additional information regarding litigation.\nLoans sold with recourse\nThe Firm provides servicing for mortgages and certain commercial lending products on both a recourse and nonrecourse basis. In nonrecourse servicing, the principal credit risk to the Firm is the cost of temporary servicing advances of funds (i.e., normal servicing advances). In recourse servicing, the servicer agrees to share credit risk with the owner of the mortgage loans, such as Fannie Mae or Freddie Mac or a private investor, insurer or guarantor. Losses on recourse servicing predominantly occur when foreclosure sales proceeds of the property underlying a defaulted loan are less than the sum of the outstanding principal balance, plus accrued interest on the loan and the cost of holding and disposing of the underlying property. The Firm\u2019s securitizations are predominantly nonrecourse, thereby effectively transferring the risk of future credit losses to the purchaser of the mortgage-backed securities issued by the trust. The unpaid principal balance of loans sold with recourse as well as the carrying value of the related liability that the Firm has recorded in accounts payable and other liabilities on the Consolidated balance sheets, which is representative of the Firm\u2019s view of the likelihood it will have to perform under its recourse obligations, are disclosed in the table on page 296.\nOther off-balance sheet arrangements\nIndemnification agreements \u2013 general\nIn connection with issuing securities to investors outside the U.S., the Firm may agree to pay additional amounts to the holders of the securities in the event that, due to a change in tax law, certain types of withholding taxes are imposed on payments on the securities. The terms of the securities may also give the Firm the right to redeem the securities if such additional amounts are payable. The Firm may also enter into indemnification clauses such as in connection with the licensing of software to clients (\u201csoftware licensees\u201d) or when it sells a business or assets to a third party (\u201cthird-party purchasers\u201d), pursuant to which it indemnifies software licensees for claims of liability or damages that may occur subsequent to the licensing of the software, or third-party purchasers for losses they may incur due to actions taken by the Firm prior to the sale of the business or assets. It is difficult to estimate the Firm\u2019s maximum exposure under these indemnification arrangements, since this would require an assessment of future changes in tax law and future claims that may be made against the Firm that have not yet occurred.\nHowever, based on historical experience, management expects the risk of loss to be remote.\nMerchant charge-backs\n\nUnder the rules of payment networks, in its role as a merchant acquirer, the Firm\u2019s Merchant Services business in CIB Payments, retains a contingent liability for disputed processed credit and debit card transactions that result in a charge-back to the merchant. If a dispute is resolved in the cardholder\u2019s favor, the Firm will (through the cardholder\u2019s issuing bank) credit or refund the amount to the cardholder and will charge back the transaction to the merchant. If the Firm is unable to collect the amount from the merchant, the Firm will bear the loss for the amount credited or refunded to the cardholder. The Firm mitigates this risk by withholding future settlements, retaining cash reserve accounts or obtaining other collateral. In addition, the Firm recognizes a valuation allowance that covers the payment or performance risk related to charge-backs.\nClearing Services \u2013 Client Credit Risk\nThe Firm provides clearing services for clients by entering into securities purchases and sales and derivative contracts with CCPs, including ETDs such as futures and options, as well as OTC-cleared derivative contracts. As a clearing member, the Firm stands behind the performance of its clients, collects cash and securities collateral (margin) as well as any settlement amounts due from or to clients, and remits them to the relevant CCP or client in whole or part. There are two types of margin: variation margin is posted on a daily basis based on the value of clients\u2019 derivative contracts and initial margin is posted at inception of a derivative contract, generally on the basis of the potential changes in the variation margin requirement for the contract.\nAs a clearing member, the Firm is exposed to the risk of nonperformance by its clients, but is not liable to clients for the performance of the CCPs. Where possible, the Firm seeks to mitigate its risk to the client through the collection of appropriate amounts of margin at inception and throughout the life of the transactions. The Firm can also cease providing clearing services if clients do not adhere to their obligations under the clearing agreement. In the event of nonperformance by a client, the Firm would close out the client\u2019s positions and access available margin. The CCP would utilize any margin it holds to make itself whole, with any remaining shortfalls required to be paid by the Firm as a clearing member.\nJPMorgan Chase & Co./2025 Form 10-K\n299\nNotes to consolidated financial statements\nThe Firm reflects its exposure to nonperformance risk of the client through the recognition of margin receivables from clients and margin payables to CCPs; the clients\u2019 underlying securities or derivative contracts are not reflected in the Firm\u2019s Consolidated Financial Statements.\nIt is difficult to estimate the Firm\u2019s maximum possible exposure through its role as a clearing member, as this would require an assessment of transactions that clients may execute in the future. However, based upon historical experience, and the credit risk mitigants available to the Firm, management believes it is unlikely that the Firm will have to make any material payments under these arrangements and the risk of loss is expected to be remote.\nRefer to Note 5 for information on the derivatives that the Firm executes for its own account and records in its Consolidated Financial Statements.\nExchange & Clearing House Memberships\nThe Firm is a member of several securities and derivative exchanges and clearing houses, both in the U.S. and other countries, and it provides clearing services to its clients. Membership in some of these organizations requires the Firm to pay a pro rata share of the losses incurred by the organization as a result of the default of another member. Such obligations vary with different organizations. These obligations may be limited to the amount (or a multiple of the amount) of the Firm\u2019s contribution to the guarantee fund maintained by a clearing house or exchange as part of the resources available to cover any losses in the event of a member default. Alternatively, these obligations may also include a pro rata share of the residual losses after applying the guarantee fund. Additionally, certain clearing houses require the Firm as a member to pay a pro rata share of losses that may result from the clearing house\u2019s investment of guarantee fund contributions and initial margin, unrelated to and independent of the default of another member.\u00a0Generally a payment would only be required should such losses exceed the resources of the clearing house or exchange that are contractually required to absorb the losses in the first instance. In certain cases, it is difficult to estimate the Firm\u2019s maximum possible exposure under these membership agreements, since this would require an assessment of future claims that may be made against the Firm that have not yet occurred. However, based on historical experience, management expects the risk of loss to the Firm to be remote. Where the Firm\u2019s maximum possible exposure can be estimated, the amount is disclosed in the table on page 296, in the Exchange & clearing house guarantees and commitments line.\nSponsored member repo program\nThe Firm acts as a sponsoring member to clear eligible overnight and term resale and repurchase agreements through the Government Securities Division of the Fixed Income Clearing Corporation (\u201cFICC\u201d) on behalf of clients that become sponsored members under the FICC\u2019s rules. The Firm also guarantees to the FICC the prompt and full payment and performance of its sponsored member clients\u2019 respective obligations under the FICC\u2019s rules. The Firm minimizes its liability under these guarantees by obtaining a security interest in the cash or high-quality securities collateral that the clients place with the clearing house; therefore, the Firm expects the risk of loss to be remote. The Firm\u2019s maximum possible exposure, without taking into consideration the associated collateral, is included in the Exchange & clearing house guarantees and commitments line on page 296. Refer to Note 11 for additional information on credit risk mitigation practices on resale agreements and the types of collateral pledged under repurchase agreements.\nGuarantees of subsidiaries\nIn the normal course of business, the Parent Company may provide counterparties with guarantees of certain of the trading and other obligations of its subsidiaries on a contract-by-contract basis, as negotiated with the Firm\u2019s counterparties. The obligations of the subsidiaries are included on the Firm\u2019s Consolidated balance sheets or are reflected as off-balance sheet commitments; therefore, the Parent Company has not recognized a separate liability for these guarantees. The Firm believes that the occurrence of any event that would trigger payments by the Parent Company under these guarantees is remote.\nThe Parent Company has guaranteed certain long-term debt and structured notes of its subsidiaries, including JPMorgan Chase Financial Company LLC (\u201cJPMFC\u201d), a\n100\n%-owned finance subsidiary. All securities issued by JPMFC are fully and unconditionally guaranteed by the Parent Company and no other subsidiary of the Parent Company guarantees these securities. These guarantees, which rank pari passu with the Firm\u2019s unsecured and unsubordinated indebtedness, are not included in the table on page 296 of this Note. Refer to Note 20 for additional information.\n300\nJPMorgan Chase & Co./2025 Form 10-K\nNote 29 \u2013\nPledged assets and collateral\nPledged assets\nThe Firm pledges financial assets that it owns to maintain potential borrowing capacity at discount windows with Federal Reserve banks, various other central banks and FHLBs. Additionally, the Firm pledges assets for other purposes, including to collateralize repurchase and other securities financing agreements, to cover short sales and to collateralize derivative contracts and deposits. Certain of these pledged assets may be sold or repledged or otherwise used by the secured parties and are parenthetically identified on the Consolidated balance sheets as assets pledged.\nThe following table presents the carrying value of the Firm\u2019s pledged assets.\nDecember 31, (in billions)\n2025\n2024\nAssets that may be sold or repledged or otherwise used by secured parties\n$\n185.6\n\n$\n152.5\n\nAssets that may not be sold or repledged or otherwise used by secured parties\n410.9\n\n297.9\n\nAssets pledged at Federal Reserve banks and FHLBs\n737.1\n\n724.0\n\nTotal pledged assets\n$\n1,333.6\n\n$\n1,174.4\n\nTotal pledged assets do not include assets of consolidated VIEs; these assets are used to settle the liabilities of those entities. Refer to Note 14 for additional information on assets and liabilities of consolidated VIEs. Refer to Note 11 for additional information on the Firm\u2019s securities financing activities. Refer to Note 20 for additional information on the Firm\u2019s long-term debt.\nThe significant components of the Firm\u2019s pledged assets were as follows.\nDecember 31, (in billions)\n2025\n2024\nInvestment securities\n$\n82.7\n\n$\n89.6\n\nLoans\n763.8\n\n740.9\n\nTrading assets and other\n487.1\n\n343.9\n\nTotal pledged assets\n$\n1,333.6\n\n$\n1,174.4\n\nCollateral\nThe Firm accepts financial assets as collateral that it is permitted to sell or repledge, deliver or otherwise use. This collateral is generally obtained under resale and other securities financing agreements, prime brokerage-related held-for-investment customer receivables and derivative contracts. Collateral is generally used under repurchase and other securities financing agreements, to cover short sales, and to collateralize derivative contracts and deposits.\nThe following table presents the fair value of collateral accepted.\n\nDecember 31, (in billions)\n2025\n2024\nCollateral permitted to be sold or repledged, delivered, or otherwise used\n$\n1,771.0\n\n$\n1,544.0\n\nCollateral sold, repledged, delivered or otherwise used\n1,426.4\n\n1,210.7\n\nJPMorgan Chase & Co./2025 Form 10-K\n301\nNotes to consolidated financial statements\nNote 30 \u2013\nLitigation\nContingencies\nAs of December 31, 2025, the Firm and its subsidiaries and affiliates are defendants or respondents in numerous evolving legal proceedings, including private proceedings, public proceedings, government investigations, regulatory enforcement matters, and the matters described below. These range from individual actions involving a single plaintiff to class action lawsuits with potentially millions of class members. Investigations and regulatory enforcement matters involve both formal and informal proceedings, by both governmental agencies and self-regulatory organizations. These legal proceedings are at varying stages of adjudication, arbitration or investigation, and involve each of the Firm\u2019s lines of business in several geographies and varied claims (including common law tort and contract claims and statutory antitrust, securities and consumer protection claims), some of which present novel legal theories.\nThe Firm estimates the aggregate range of reasonably possible losses, in excess of reserves established, for its legal proceedings is from $\n0\n to approximately $\n1.2\n\u00a0billion at December 31, 2025. This estimated aggregate range of reasonably possible losses was based upon information available as of that date for those proceedings in which the Firm believes that an estimate of reasonably possible loss can be made. For certain matters, the Firm does not believe that such an estimate can be made, as of that date. The Firm\u2019s estimate of the aggregate range of reasonably possible losses involves significant judgment, given:\n\u2022\nthe number, variety and varying stages of the proceedings, including the fact that many are in preliminary stages,\n\u2022\nthe existence in many such proceedings of multiple defendants, including the Firm, whose share of liability (if any) has yet to be determined,\n\u2022\nthe numerous yet-unresolved issues in many of the proceedings, including issues regarding class certification and the scope of many of the claims, and\n\u2022\nthe uncertainty of the various potential outcomes of such proceedings, including where the Firm has made assumptions concerning future rulings by the court or other adjudicator, or about the behavior or incentives of adverse parties or regulatory authorities, and those assumptions later prove to be incorrect.\nIn addition, the outcome of a particular proceeding may be a result that the Firm did not take into account in its estimate because the Firm had deemed the likelihood of that outcome to be remote. Accordingly, the Firm\u2019s estimate of the aggregate range of\nreasonably possible losses will change from time to time, and actual losses may vary significantly.\nSet forth below are descriptions of the Firm\u2019s material legal proceedings.\nAmrapali\n. India\u2019s Enforcement Directorate (\u201cED\u201d) is investigating J.P. Morgan India Private Limited in connection with investments made in 2010 and 2012 by\ntwo\n offshore funds formerly managed by JPMorganChase entities into residential housing projects developed by the Amrapali Group (\u201cAmrapali\u201d) relating to delays in delivering or failure to deliver residential units. In July 2019, the Supreme Court of India issued an order making preliminary findings that Amrapali and other parties, including unspecified JPMorganChase entities, violated certain criminal currency control and money laundering provisions, and ordered the ED to conduct a further inquiry. The Firm is cooperating with the inquiry. In addition, in August 2021, the ED issued an order fining J.P. Morgan India Private Limited approximately $\n31.5\n\u00a0million, which the Firm is appealing.\nFair Access to Banking\n. In August 2025, the President of the United States issued an Executive Order entitled \u201cGuaranteeing Fair Banking for All Americans\u201d that addressed access to financial services and directed several actions by certain federal agencies, including a review and revision of their internal policies and manuals. JPMorganChase is responding to requests from government authorities and other external parties regarding, among other things, the Firm\u2019s policies and processes and the provision of services to customers and potential customers. Certain of these matters are at various stages, including reviews, investigations, and legal proceedings, including a civil lawsuit filed in January 2026 in Florida state court by President Donald J. Trump, in his personal capacity, and several affiliated corporate entities, against JPMorgan Chase Bank, N.A. and its CEO.\nForeign Exchange Investigations and Litigation.\n The Firm previously reported settlements with certain government authorities relating to its foreign exchange (\u201cFX\u201d) sales and trading activities and controls related to those activities. Among those resolutions, in May 2015, the Firm pleaded guilty to a single violation of federal antitrust law. The Department of Labor (\"DOL\") granted the Firm exemptions that permit the Firm and its affiliates to continue to rely on the Qualified Professional Asset Manager exemption under the Employee Retirement Income Security Act (\u201cERISA\u201d) through the\nten-year\n disqualification period, which began in January 2017. The only remaining FX-related governmental inquiry is a South Africa Competition Commission matter which\n302\nJPMorgan Chase & Co./2025 Form 10-K\nis currently pending before the South Africa Competition Tribunal.\nWith respect to civil litigation matters, some FX-related individual and putative class actions filed outside the U.S., including in the U.K., Israel, the Netherlands and Brazil remain. In December 2025, the U.K. Supreme Court confirmed the initial decision of the Competition Appeal Tribunal, which denied a request for class certification on an opt-out basis. In Israel, a settlement in principle has been reached on the putative class action, which remains subject to court approval.\nInterchange Litigation.\nGroups of merchants and retail associations filed a series of class action complaints alleging that Visa and Mastercard, as well as certain banks, conspired to set the price of credit and debit card interchange fees and enacted related rules in violation of antitrust laws.\nIn September 2018, the parties settled the class action seeking monetary relief. A separate class action seeking injunctive relief continues. In June 2024, the District Court for the Eastern District of New York denied preliminary approval of a settlement of the injunctive class action in which Visa and Mastercard agreed to certain changes to their respective network rules and system-wide reductions in interchange rates for U.S.-based merchants. In November 2025, the parties to that settlement reached a superseding and amended class settlement and submitted the agreement to the District Court for its approval.\nOf the merchants who opted out of the damages class settlement, certain merchants filed individual actions raising similar allegations against Visa and Mastercard, as well as against the Firm and other banks. The defendants have reached settlements with the merchants who opted out representing over\n90\n% of the combined Mastercard-branded and Visa-branded payment card sales volume. The remaining opt out actions are pending. A number of these actions are pending in the United States District Court for the Southern District of New York, and that court has scheduled a trial of the claims brought by several merchants to begin in April 2026.\nLIBOR and Other Benchmark Rate Investigations and Litigation\n. JPMorganChase has responded to inquiries from various governmental agencies and entities around the world relating primarily to the British Bankers Association\u2019s (\u201cBBA\u201d) London Interbank Offered Rate (\u201cLIBOR\u201d) for various currencies and the European Banking Federation\u2019s Euro Interbank Offered Rate (\u201cEURIBOR\u201d). The Firm appealed a December 2016 decision by the European Commission against the Firm and other banks finding an infringement of European antitrust rules relating to EURIBOR. In December 2023, the European General Court annulled the fine imposed by the European\nCommission, but exercised its discretion to re-impose a fine in an identical amount. In March 2024, the Firm filed an appeal of this decision with the Court of Justice of the European Union, which held a hearing in January 2026 and reserved judgment.\nIn addition, the Firm was named as a defendant along with other banks in various individual and putative class actions related to benchmark rates, including U.S. dollar LIBOR. In September 2025, the United States District Court for the Southern District of New York granted summary judgment in favor of the defendants on all remaining claims related to U.S. dollar LIBOR, decertified the class, and dismissed all claims in their entirety with prejudice to refiling. Plaintiffs have filed an appeal.\nRussian Litigation\n. The Firm is obligated to comply with international sanctions laws, which mandate the blocking of certain assets. These laws apply when assets associated with individuals, companies, products or services are within the scope of the sanctions. The Firm has faced actual and threatened litigation in Russia seeking payments that the Firm cannot make under, and is contractually excused from paying as a result of, relevant sanctions laws. In claims involving the Firm and claims filed against other financial institutions, Russian courts have disregarded the parties\u2019 contractual agreements concerning forum selection and did not recognize foreign sanctions laws as a basis for not making payment. Russian courts have entered judgment against the Firm in a number of claims. This includes one claim for $\n439\n\u00a0million, for which the courts have stayed the enforcement of the judgment against the Firm's unprotected assets in Russia pending the outcome of an appeal, and a judgment for another claim has been executed against assets held onshore by the Firm in Russia. The total amount of the judgments exceeds the total amount of available assets that the Firm holds in Russia. Russian courts have allowed plaintiffs to withhold dividends due to the Firm\u2019s clients for the purpose of satisfying judgments, which the Firm is opposing as unlawful. The Firm continues to appeal the Russian courts' decisions, but certain judgments are now enforceable against Firm assets in Russia. Russian courts have also ordered interim freezes of Firm assets in Russia (including, among other things, funds in bank accounts, securities, shares in authorized capital, and certain trademarks, of the named defendants) pending a determination of certain underlying claims against the Firm. The Firm has challenged claims being pursued in the Russian courts and related freeze orders in other jurisdictions provided for by the parties\u2019 contractual forum selections. If further claims are enforced despite the actions taken by the Firm to challenge the claims and orders and to seek the proper application of law, the Firm\u2019s assets in Russia could be seized in full, and certain client assets could\nJPMorgan Chase & Co./2025 Form 10-K\n303\nNotes to consolidated financial statements\nalso be seized, or the Firm could be prevented from complying with its obligations.\nShareholder Litigation\n. A shareholder derivative action purporting to act on behalf of the Firm is pending in the United States District Court for the Eastern District of New York against the Firm, its Board of Directors and certain of its current and former officers relating to historical trading practices by former employees in the precious metals and U.S. treasuries markets and related conduct which were the subject of the Firm\u2019s resolutions with the DOJ, CFTC and SEC in September 2020. Defendants have moved to dismiss the complaint.\n*     *     *\nIn addition to the various legal proceedings discussed above, JPMorganChase and its subsidiaries are named as defendants or are otherwise involved in a substantial number of other legal proceedings. The Firm believes it has meritorious defenses to the claims asserted against it in its currently outstanding legal proceedings and it intends to defend itself vigorously. Additional legal proceedings may be initiated from time to time in the future.\nThe Firm has established reserves for several hundred of its currently outstanding legal proceedings. Under U.S. GAAP for contingencies, the Firm accrues for a litigation-related liability when it is probable that such a liability has been incurred and the amount of the loss can be reasonably estimated. The Firm evaluates its outstanding legal proceedings each quarter to assess its litigation reserves, and makes adjustments in such reserves, upward or downward, as appropriate, based on management\u2019s best judgment after consultation with counsel. The Firm\u2019s legal expense was $\n361\n million, $\n740\n million and $\n1.4\n billion for the years ended December 31, 2025, 2024 and 2023, respectively. There is no assurance that the Firm\u2019s litigation reserves will not need to be adjusted in the future.\nIn view of the inherent difficulty of predicting the outcome of legal proceedings, particularly where the claimants seek very large or indeterminate damages, or where the matters present novel legal theories, involve a large number of parties or are in early stages of discovery, the Firm cannot state with confidence what will be the eventual outcomes of the currently pending matters, the timing of their ultimate resolution or the eventual losses, fines, penalties or consequences related to those matters. JPMorganChase believes, based upon its current knowledge and after consultation with counsel, consideration of the material legal proceedings described above and after taking into account its current litigation reserves and its estimated aggregate range of possible losses, that the other legal proceedings currently pending against it should not\nhave a material adverse effect on the Firm\u2019s consolidated financial condition. The Firm notes, however, that in light of the uncertainties involved in such proceedings, there is no assurance that the ultimate resolution of these matters will not significantly exceed the reserves it has currently accrued or that a matter will not have material reputational consequences. As a result, the outcome of a particular matter may be material to JPMorganChase\u2019s operating results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of JPMorganChase\u2019s income for that period.\n304\nJPMorgan Chase & Co./2025 Form 10-K\nNote 31 \u2013\nInternational operations\nThe following table presents income statement and balance sheet-related information for JPMorganChase by major international geographic area. The Firm defines international activities for purposes of this footnote presentation as business transactions that involve clients residing outside of the U.S., and the information presented below is based predominantly on the domicile of the client, the location from which the client relationship is managed, booking location or the location of the trading desk. However, many of the Firm\u2019s U.S. operations serve international businesses.\nAs the Firm\u2019s operations are highly integrated, estimates and subjective assumptions have been made to apportion revenue and expense between U.S. and international operations. These estimates and assumptions are consistent with the allocations used for the Firm\u2019s segment reporting as set forth in Note 32.\nThe Firm\u2019s long-lived assets for the periods presented are not considered by management to be significant in relation to total assets. The majority of the Firm\u2019s long-lived assets are located in the U.S.\nAs of or for the year ended December 31,\n(in millions)\nRevenue\n(b)\nExpense\n(c)\nIncome before\nincome tax expense\nNet income\nTotal assets\n2025\nEurope/Middle East/Africa\n$\n24,478\n\n$\n14,825\n\n$\n9,653\n\n$\n6,813\n\n$\n641,190\n\n(d)\nAsia-Pacific\n14,065\n\n8,271\n\n5,794\n\n4,101\n\n343,520\n\nLatin America/Caribbean\n4,215\n\n2,180\n\n2,035\n\n1,561\n\n96,759\n\nTotal international\n42,758\n\n25,276\n\n17,482\n\n12,475\n\n1,081,469\n\nNorth America\n(a)\n139,689\n\n84,576\n\n55,113\n\n44,573\n\n3,343,431\n\nTotal\n$\n182,447\n\n$\n109,852\n\n$\n72,595\n\n$\n57,048\n\n$\n4,424,900\n\n2024\nEurope/Middle East/Africa\n$\n22,353\n\n$\n12,843\n\n$\n9,510\n\n$\n6,713\n\n$\n552,407\n\n(d)\nAsia-Pacific\n11,995\n\n6,922\n\n5,073\n\n3,615\n\n296,430\n\nLatin America/Caribbean\n3,885\n\n1,895\n\n1,990\n\n1,512\n\n73,631\n\nTotal international\n38,233\n\n21,660\n\n16,573\n\n11,840\n\n922,468\n\nNorth America\n(a)\n139,323\n\n80,815\n\n58,508\n\n46,631\n\n3,080,346\n\nTotal\n$\n177,556\n\n$\n102,475\n\n$\n75,081\n\n$\n58,471\n\n$\n4,002,814\n\n2023\nEurope/Middle East/Africa\n$\n20,974\n\n$\n11,947\n\n$\n9,027\n\n$\n6,402\n\n$\n529,335\n\n(d)\nAsia-Pacific\n10,605\n\n6,550\n\n4,055\n\n2,709\n\n251,588\n\nLatin America/Caribbean\n3,294\n\n1,971\n\n1,323\n\n994\n\n83,003\n\nTotal international\n34,873\n\n20,468\n\n14,405\n\n10,105\n\n863,926\n\nNorth America\n(a)\n123,231\n\n76,024\n\n47,207\n\n39,447\n\n3,011,467\n\nTotal\n$\n158,104\n\n$\n96,492\n\n$\n61,612\n\n$\n49,552\n\n$\n3,875,393\n\n(a)\nSubstantially reflects the U.S.\n(b)\nRevenue is composed of net interest income and noninterest revenue.\n(c)\nExpense is composed of noninterest expense and the provision for credit losses.\n(d)\nTotal assets for the U.K. were approximately $\n449\n\u00a0billion, $\n369\n\u00a0billion and $\n352\n\u00a0billion at December\u00a031, 2025, 2024 and 2023, respectively.\nJPMorgan Chase & Co./2025 Form 10-K\n305\nNotes to consolidated financial statements\nNote 32 \u2013\nBusiness segments & Corporate\nThe Firm is managed on an LOB basis. The Firm has\nthree\n reportable business segments \u2013 Consumer & Community Banking, Commercial & Investment Bank, and Asset & Wealth Management \u2013 with the remaining activities in Corporate.\nThe business segments are determined based on the products and services provided, or the type of customers and clients served, and they reflect the manner in which financial information is evaluated by the Firm\u2019s Operating Committee, whose members act collectively as the Firm\u2019s chief operating decision maker. Segment results are presented on a managed basis.\nThe following is a description of each of the Firm\u2019s reportable business segments, and the products and services that they provide to their respective client bases, as well as a description of Corporate activities.\nConsumer & Community Banking\nConsumer & Community Banking offers products and services to consumers and small businesses through bank branches, ATMs, digital (including mobile and online) and telephone banking. CCB is organized into Banking & Wealth Management (including Consumer Banking, Business Banking and J.P. Morgan Wealth Management), Home Lending (including Home Lending Production, Home Lending Servicing and Real Estate Portfolios) and Card Services & Auto. Banking & Wealth Management offers deposit, investment and lending products, cash management, payments and services. Home Lending includes mortgage origination and servicing activities, as well as portfolios consisting of residential mortgages and home equity loans. Card Services issues credit cards and offers payment solutions, travel services, merchant offers and lifestyle benefits. Auto originates and services auto loans and leases.\nCommercial & Investment Bank\nThe Commercial & Investment Bank is comprised of the Banking & Payments and Markets & Securities Services businesses. These businesses offer investment banking, lending, payments, market-making, financing, custody and securities products and services to a global base of corporate and institutional clients. Banking & Payments offers products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity and debt markets, and loan origination and syndication. Banking & Payments also provides services that enable clients to manage payments globally across liquidity and account solutions, commerce solutions, clearing, trade, and working capital. Markets & Securities Services includes Markets, which is a global market-maker across products, including cash and derivative instruments, and also offers sophisticated risk\nmanagement solutions, lending, prime brokerage, clearing and research. Markets & Securities Services also includes Securities Services, a leading global custodian that provides custody, fund services, liquidity and trading services, and data solutions products.\nAsset & Wealth Management\nAsset & Wealth Management, with client assets of $\n7.1\n trillion, is a global leader in investment and wealth management.\nAsset Management\nOffers multi-asset investment management solutions across equities, fixed income, alternatives and money market funds to institutional and retail investors providing for a broad range of clients\u2019 investment needs.\nGlobal Private Bank\nProvides retirement products and services, brokerage, custody, estate planning, lending, deposits and investment management to high net worth clients.\nThe majority of AWM\u2019s client assets are in actively managed portfolios.\nCorporate\nCorporate consists of Treasury and Chief Investment Office (\u201cCIO\u201d) and Other Corporate. Treasury and CIO is predominantly responsible for measuring, monitoring, reporting and managing the Firm\u2019s liquidity, funding, capital, structural interest rate and foreign exchange risks.\nOther Corporate includes staff functions and expense that is centrally managed as well as certain Firm initiatives and activities not solely aligned to a specific LOB. The major Other Corporate functions include Real Estate, Technology, Legal, Corporate Finance, Human Resources, Internal Audit, Risk Management, Compliance, Control Management, Corporate Responsibility and various Other Corporate groups.\n306\nJPMorgan Chase & Co./2025 Form 10-K\nDescription of business segment reporting methodology\nResults of the reportable business segments are intended to present each segment as if it were a stand-alone business. The management reporting process that derives business segment results includes the allocation of certain income and expense items. The Firm periodically assesses the assumptions, methodologies and reporting classifications used for segment reporting, and therefore further refinements may be implemented in future periods. The Firm also assesses the level of capital required for each LOB on at least an annual basis. The Firm\u2019s LOBs also provide various business metrics which are utilized by the Firm and its investors and analysts in assessing performance.\nRevenue sharing\nWhen business segments or businesses within each segment join efforts to sell products and services to the Firm\u2019s clients and customers, the participating businesses may agree to share revenue from those transactions. Revenue is generally recognized in the segment responsible for the related product or service, with allocations to the other segments or businesses involved in the transaction. The segment and business results reflect these revenue-sharing agreements.\nExpense allocation\nWhere business segments use services provided by Corporate support units, or another business segment, the costs of those services are allocated to the respective business segments. The expense is generally allocated\u00a0based on the actual cost and use of services provided. In contrast, certain costs and investments related to Corporate that are not currently utilized by any LOB are not allocated to the business segments and are retained in Corporate. Expense retained in Corporate generally includes costs that would not be incurred if the segments were stand-alone businesses, and other items not solely aligned with a particular reportable business segment.\nFunds transfer pricing\nFunds transfer pricing (\u201cFTP\u201d) is the process by which the Firm allocates interest income and expense to the LOBs and Other Corporate and transfers the primary interest rate risk and liquidity risk to Treasury and CIO.\nThe funds transfer pricing process considers the interest rate and liquidity risk characteristics of assets and liabilities and off-balance sheet products. Periodically, the methodology and assumptions utilized in the FTP process are adjusted to reflect economic conditions and other factors, which may impact the allocation of net interest income to the segments. Effective in the fourth quarter of 2024, the Firm updated its FTP with respect to consumer deposits, which resulted in an increase in the funding\nbenefit reflected within CCB\u2019s net interest income that is fully offset in Corporate, with no effect on the Firm\u2019s net interest income.\nAs a result of lower average interest rates in the current year, the cost of funding for assets and the funding benefit earned for liabilities generally decreased compared with the prior year. During the period ended December 31, 2025, this resulted in a lower cost of funds for loans and Markets activities. In addition, the FTP benefit for deposits generally decreased more than the decrease in rates paid to deposit holders during the year, resulting in an overall deposit margin compression.\nForeign exchange risk\nForeign exchange risk is transferred from the LOBs and Other Corporate to Treasury and CIO for certain revenues and expenses. Treasury and CIO manages these risks centrally and reports the impact of foreign exchange rate movements related to the transferred risk in its results.\nDebt expense and preferred stock dividend allocation\nAs part of the FTP process, almost all of the cost of the credit spread component of outstanding unsecured long-term debt and preferred stock dividends is allocated to the reportable business segments, while the balance of the cost is retained in Corporate. The methodology to allocate the cost of unsecured long-term debt and preferred stock dividends to the business segments is aligned with the relevant regulatory capital requirements and funding needs of the LOBs, as applicable. The allocated cost of unsecured long-term debt is included in a business segment\u2019s net interest income, and net income is reduced by preferred stock dividends, to arrive at a business segment\u2019s net income applicable to common equity.\nCapital allocation\nEach LOB and Corporate is allocated capital by taking into consideration a variety of factors including capital levels of similarly rated peers and applicable regulatory capital requirements. ROE is measured and internal targets for expected returns are established as key measures of an LOB\u2019s performance.\nThe Firm\u2019s current equity allocation methodology incorporates Basel III Standardized RWA and the GSIB surcharge, both under rules currently in effect, as well as a simulation of capital depletion in a severe stress environment. At least annually, the assumptions, judgments and methodologies used to allocate capital are reassessed and, as a result, the capital allocated to the LOBs and Corporate may change.\nJPMorgan Chase & Co./2025 Form 10-K\n307\nNotes to consolidated financial statements\nSegment & Corporate results\nThe following table provides a summary of results for the Firm\u2019s reportable business segments and Corporate activities as of or for the years ended December 31, 2025, 2024 and 2023, on a managed basis. The Firm\u2019s definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm as a whole (and for each of the reportable business segments and Corporate) on an FTE basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. This allows management to assess the comparability of revenue from year-to-year arising from both taxable and tax-exempt\nsources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense/(benefit). These adjustments have no impact on net income as reported by the Firm as a whole or by the each of the LOBs and Corporate.\nThe Operating Committee reviews segment results including net interest income, noninterest revenue, noninterest expense, provision for credit losses and net income on a managed basis. The Operating Committee uses these measures to evaluate segment performance and to make key operating decisions, including resource and capital allocations.\nSegment & Corporate results and reconciliation\n(a)\n(Table continued on next page)\nAs of or for the year ended\nDecember 31,\n(in millions, except ratios)\nConsumer & Community Banking\nCommercial & Investment Bank\nAsset & Wealth Management\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\nNoninterest revenue\n$\n17,795\n\n$\n16,649\n$\n15,118\n$\n53,766\n\n$\n48,253\n$\n43,809\n\n$\n17,241\n\n$\n15,023\n\n$\n13,560\n\nNet interest income\n58,234\n\n54,858\n55,030\n24,688\n\n21,861\n20,544\n6,832\n\n6,555\n\n6,267\n\nTotal net revenue\n76,029\n\n71,507\n70,148\n78,454\n\n70,114\n64,353\n24,073\n\n21,578\n\n19,827\n\nProvision for credit losses\n11,493\n\n(e)\n9,974\n6,899\n2,615\n\n762\n2,091\n97\n\n(\n68\n)\n159\n\nCompensation expense\n(b)\n17,669\n\n17,045\n15,171\n19,345\n\n18,191\n17,105\n8,645\n\n7,984\n\n7,115\n\nNoncompensation expense\n(c)(d)\n22,598\n\n20,991\n19,648\n18,871\n\n17,162\n16,867\n6,687\n\n6,430\n\n5,665\n\nTotal noninterest expense\n40,267\n\n38,036\n34,819\n38,216\n\n35,353\n33,972\n15,332\n\n14,414\n\n12,780\n\nIncome/(loss) before income tax expense/(benefit)\n24,269\n\n23,497\n28,430\n37,623\n\n33,999\n28,290\n8,644\n\n7,232\n\n6,888\n\nIncome tax expense/(benefit)\n6,024\n\n5,894\n7,198\n9,862\n\n9,153\n8,018\n2,122\n\n1,811\n\n1,661\n\nNet income\n$\n18,245\n\n$\n17,603\n$\n21,232\n$\n27,761\n\n$\n24,846\n$\n20,272\n$\n6,522\n\n$\n5,421\n\n$\n5,227\n\nAverage equity\n$\n56,000\n\n$\n54,500\n$\n54,349\n$\n149,500\n\n$\n132,000\n$\n137,507\n$\n16,000\n\n$\n15,500\n\n$\n16,671\n\nTotal assets\n664,669\n\n650,268\n642,951\n2,142,534\n\n1,773,194\n1,638,493\n288,065\n\n255,385\n\n245,512\n\nReturn on equity\n32\n\n%\n32\n\n%\n38\n\n%\n18\n\n%\n18\n\n%\n14\n\n%\n40\n\n%\n34\n\n%\n31\n\n%\nOverhead ratio\n53\n\n53\n\n50\n\n49\n\n50\n\n53\n\n64\n\n67\n\n64\n\n308\nJPMorgan Chase & Co./2025 Form 10-K\n(Table continued from previous page)\nAs of or for the year ended\nDecember 31,\n(in millions, except ratios)\nCorporate\nReconciling Items\n(a)\nTotal\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\nNoninterest revenue\n$\n911\n\n$\n7,608\n\n(g)\n$\n132\n\n$\n(\n2,709\n)\n$\n(\n2,560\n)\n$\n(\n3,782\n)\n$\n87,004\n\n$\n84,973\n\n(g)\n$\n68,837\n\nNet interest income\n6,114\n\n9,786\n\n7,906\n\n(\n425\n)\n(\n477\n)\n(\n480\n)\n95,443\n\n92,583\n\n89,267\n\nTotal net revenue\n7,025\n\n17,394\n\n8,038\n\n(\n3,134\n)\n(\n3,037\n)\n(\n4,262\n)\n182,447\n\n177,556\n\n158,104\n\nProvision for credit losses\n7\n\n10\n\n171\n\n\u2014\n\n\u2014\n\n\u2014\n\n14,212\n\n10,678\n\n9,320\n\nTotal noninterest expense\n(d)\n1,825\n\n3,994\n\n(h)\n5,601\n\n\u2014\n\n\u2014\n\n\u2014\n\n95,640\n\n91,797\n\n(h)\n87,172\n\nIncome/(loss) before income\ntax expense/(benefit)\n5,193\n\n13,390\n\n2,266\n\n(\n3,134\n)\n(\n3,037\n)\n(\n4,262\n)\n72,595\n\n75,081\n\n61,612\n\nIncome tax expense/(benefit)\n673\n\n(f)\n2,789\n\n(\n555\n)\n(\n3,134\n)\n(\n3,037\n)\n(\n4,262\n)\n15,547\n\n16,610\n\n12,060\n\nNet income\n$\n4,520\n\n$\n10,601\n\n$\n2,821\n\n$\n\u2014\n\n$\n\u2014\n\n$\n\u2014\n\n$\n57,048\n\n$\n58,471\n\n$\n49,552\n\nAverage equity\n$\n111,254\n\n$\n110,370\n\n$\n73,529\n\nNA\nNA\nNA\n$\n332,754\n\n$\n312,370\n\n$\n282,056\n\nTotal assets\n1,329,632\n\n1,323,967\n\n1,348,437\n\nNA\nNA\nNA\n4,424,900\n\n4,002,814\n\n3,875,393\n\nReturn on equity\nNM\nNM\nNM\nNM\nNM\nNM\n17\n\n%\n18\n\n%\n17\n\n%\nOverhead ratio\nNM\nNM\nNM\nNM\nNM\nNM\n52\n\n52\n\n55\n\n(a)\nSegment results on a managed basis reflect revenue on a FTE basis with the corresponding income tax impact recorded within income tax expense/(benefit). These adjustments are eliminated in reconciling items to arrive at the Firm\u2019s reported U.S. GAAP results. In addition, effective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures guidance, under the modified retrospective method. Refer to Notes 1, 6, 14 and 25 for additional information.\n(b)\nExcludes expense related to services provided by Corporate support units, which is allocated from Corporate to each respective reportable business segment, as applicable, through noncompensation expense.\n(c)\nReflects occupancy; technology, communications and equipment; professional and outside services; marketing; and other expense. Refer to Note 6 for additional information on other expense.\n(d)\nCertain services are provided by Corporate and used by each of the reportable business segments. The costs of these services, including compensation-related costs, are allocated from Corporate to the respective reportable business segments, with the allocations recorded in noncompensation expense.\n(e)\nIncludes a provision for lending-related commitments of $\n2.2\n billion related to the Apple Card transaction.\n(f)\nIncluded a $\n774\n\u00a0million income tax benefit recorded in the second quarter of 2025, driven by the resolution of certain tax audits and the impact of tax regulations related to foreign currency translation gains and losses finalized in 2024 and effective for 2025.\n(g)\nIncluded the net gain related to Visa shares of $\n7.9\n\u00a0billion recorded in the second quarter of 2024. Refer to Note 6 for additional information.\n(h)\nIncluded a $\n1.0\n billion contribution of Visa shares to the JPMorgan Chase Foundation recorded in the second quarter of 2024. Refer to Note 6 for additional information.\nJPMorgan Chase & Co./2025 Form 10-K\n309\nNotes to consolidated financial statements\nNote 33 \u2013\nParent Company\nThe following tables present Parent Company-only financial statements.\nStatements of income and comprehensive income\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nIncome\nDividends from subsidiaries and affiliates:\nBank and bank holding company\n$\n50,000\n\n$\n37,000\n\n$\n61,000\n\nNon-bank\n\u2014\n\n\u2014\n\n\u2014\n\nInterest income from subsidiaries\n999\n\n1,228\n\n1,166\n\nOther income/(expense) from subsidiaries:\nBank and bank holding company\n1,846\n\n555\n\n1,801\n\nNon-bank\n(\n506\n)\n172\n\n250\n\nOther income/(expense)\n697\n\n1,252\n\n(\n654\n)\nTotal income\n53,036\n\n40,207\n\n63,563\n\nExpense\nInterest expense to subsidiaries and affiliates\n(a)\n(\n16\n)\n7,433\n\n2,258\n\nOther interest expense\n(a)\n15,106\n\n8,068\n\n11,714\n\nNoninterest expense\n3,883\n\n3,280\n\n3,431\n\nTotal expense\n18,973\n\n18,781\n\n17,403\n\nIncome before income tax benefit and undistributed net income of subsidiaries\n34,063\n\n21,426\n\n46,160\n\nIncome tax benefit\n1,822\n\n1,264\n\n1,525\n\nEquity in undistributed net income of subsidiaries\n21,163\n\n35,781\n\n1,867\n\nNet income\n$\n57,048\n\n$\n58,471\n\n$\n49,552\n\nOther comprehensive income/(loss), net\n8,166\n\n(\n2,013\n)\n6,898\n\nComprehensive income\n$\n65,214\n\n$\n56,458\n\n$\n56,450\n\nBalance sheets\nDecember 31, (in millions)\n2025\n2024\nAssets\nCash and due from banks\n$\n39\n\n$\n38\n\nDeposits with banking subsidiaries\n(b)\n9,751\n\n9,762\n\nTrading assets - intercompany\n14,885\n\n43,214\n\nAdvances to, and receivables from, subsidiaries:\nBank and bank holding company\n136\n\n142\n\nNon-bank\n24\n\n79\n\nInvestments (at equity) in subsidiaries and affiliates:\nBank and bank holding company\n669,449\n\n603,044\n\nNon-bank\n1,223\n\n1,238\n\nOther assets\n14,537\n\n12,097\n\nTotal assets\n$\n710,044\n\n$\n669,614\n\nLiabilities and stockholders\u2019 equity\nBorrowings from, and payables to, subsidiaries and affiliates\n$\n79,317\n\n$\n72,881\n\nShort-term borrowings\n\u2014\n\n\u2014\n\nOther liabilities\n13,656\n\n12,349\n\nLong-term debt\n(c)(d)\n254,633\n\n239,626\n\nTotal liabilities\n(d)\n347,606\n\n324,856\n\nTotal stockholders\u2019 equity\n362,438\n\n344,758\n\nTotal liabilities and stockholders\u2019 equity\n$\n710,044\n\n$\n669,614\n\n310\nJPMorgan Chase & Co./2025 Form 10-K\nStatements of cash flows\nYear ended December 31,\n(in millions)\n2025\n2024\n2023\nOperating activities\nNet income\n$\n57,048\n\n$\n58,471\n\n$\n49,552\n\nLess: Net income of subsidiaries and affiliates\n71,163\n\n72,781\n\n62,868\n\nParent company net loss\n(\n14,115\n)\n(\n14,310\n)\n(\n13,316\n)\nCash dividends from subsidiaries and affiliates\n50,000\n\n37,000\n\n61,000\n\nOther operating adjustments\n8,583\n\n(\n44,671\n)\n9,412\n\nNet cash provided by/(used in) operating activities\n44,468\n\n(\n21,981\n)\n57,096\n\nInvesting activities\nNet change in:\nAdvances to and investments in subsidiaries and affiliates, net\n\u2014\n\n\u2014\n\n(\n25,000\n)\nAll other investing activities, net\n34\n\n21\n\n25\n\nNet cash provided by/(used in) investing activities\n34\n\n21\n\n(\n24,975\n)\nFinancing activities\nNet change in:\nBorrowings from subsidiaries and affiliates\n1,246\n\n49,902\n\n(\n2,249\n)\nShort-term borrowings\n\u2014\n\n(\n999\n)\n\u2014\n\nProceeds from long-term borrowings\n30,042\n\n44,997\n\n19,398\n\nPayments of long-term borrowings\n(\n25,702\n)\n(\n29,753\n)\n(\n25,105\n)\nProceeds from issuance of preferred stock\n3,000\n\n2,500\n\n\u2014\n\nRedemption of preferred stock\n(\n3,000\n)\n(\n9,850\n)\n\u2014\n\nTreasury stock repurchased\n(\n31,591\n)\n(\n18,830\n)\n(\n9,824\n)\nDividends paid\n(\n16,625\n)\n(\n14,783\n)\n(\n13,463\n)\nAll other financing activities, net\n(\n1,882\n)\n(\n1,270\n)\n(\n879\n)\nNet cash provided by/(used in) financing activities\n(\n44,512\n)\n21,914\n\n(\n32,122\n)\nNet increase/(decrease) in cash and due from banks and deposits with banking subsidiaries\n(\n10\n)\n(\n46\n)\n(\n1\n)\nCash and due from banks and deposits with banking subsidiaries at the beginning of the year\n9,800\n\n9,846\n\n9,847\n\nCash and due from banks and deposits with banking subsidiaries at the end of the year\n(b)\n$\n9,790\n\n$\n9,800\n\n$\n9,846\n\nCash interest paid\n$\n12,399\n\n$\n14,851\n\n$\n13,742\n\nCash income taxes paid, net\n(e)\n276\n\n6,252\n\n10,291\n\n(a)\nIncludes interest expense for intercompany derivative hedges on the Firm\u2019s LTD and related fair value adjustments, which is offset by related amounts in Other interest expense/(income).\n(b)\nConsistent with bank regulatory reporting guidance, includes intercompany time deposits of $\n8.0\n billion as of\u202fDecember 31, 2025, 2024 and 2023.\n(c)\nAt December\u00a031, 2025, long-term debt that contractually matures in 2026 through 2030 totaled $\n14.3\n billion, $\n20.3\n billion, $\n36.4\n billion, $\n22.4\n billion, and $\n23.6\n billion, respectively.\n(d)\nRefer to Notes 20 and 28 for information regarding the Parent Company\u2019s guarantees of its subsidiaries\u2019 obligations.\n(e)\nRepresents payments, net of refunds, made by the Parent Company to various taxing authorities and includes taxes paid on behalf of certain of its subsidiaries that are subsequently reimbursed. The reimbursements were $\n713\n million, $\n5.0\n billion, and $\n13.2\n billion for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\nJPMorgan Chase & Co./2025 Form 10-K\n311\nNotes to consolidated financial statements\nNote 34 \u2013\nBusiness combinations\nOn May\u00a01, 2023, JPMorganChase acquired certain assets and assumed certain liabilities of First Republic Bank (the \"First Republic acquisition\") from the Federal Deposit Insurance Corporation (\u201cFDIC\u201d), as receiver. The acquisition resulted in a bargain purchase gain, which represents the excess of the estimated fair value of the net assets acquired above the purchase price.\nThe Firm has determined that this acquisition constitutes a business combination under U.S. GAAP. Accordingly, the initial recognition of the assets acquired and liabilities assumed were generally measured at their estimated fair values as of May\u00a01, 2023. The determination of those fair values required management to make certain market-based assumptions about expected future cash flows, discount rates and other valuation inputs at the time of the acquisition. The Firm believes that the fair value estimates of the assets acquired and liabilities assumed provide a reasonable basis for determining the estimated bargain purchase gain.\nThe First Republic acquisition resulted in a preliminary estimated bargain purchase gain of $\n2.7\n billion. The final bargain purchase gain of $\n2.9\n billion reflects adjustments of $\n103\n\u00a0million and $\n63\n\u00a0million for the years ended December 31, 2024 and 2023, respectively, made during the one-year measurement period, as permitted by U.S. GAAP, to finalize management's fair value estimates for the assets acquired and liabilities assumed.\nThe measurement period ended on April 30, 2024.\nOn January 17, 2025, the Firm reached an agreement with the FDIC with respect to certain outstanding items. As a result of the agreement, the Firm made a payment of $\n609\n\u00a0million to the FDIC on January 31, 2025 and reduced its additional payable to the FDIC, which resulted in a gain of $\n588\n\u00a0million recorded in other income in the first quarter of 2025. In addition, as of June 30, 2025, all outstanding matters between the Firm and the FDIC related to the final settlement of the purchase price for the First Republic acquisition had been resolved.\nIn connection with the First Republic acquisition, the Firm and the FDIC entered into\ntwo\n shared-loss agreements with respect to certain loans and lending-related commitments (the \"shared-loss assets\"): the Commercial Shared-Loss Agreement (\"CSLA\") and the Single-Family Shared-Loss Agreement (\u201cSFSLA\u201d). The CSLA covers\n80\n% of credit losses, on a pari passu basis, over\n5\n years with a subsequent\n3-year\n recovery period for certain acquired commercial loans and other real estate exposure. The SFSLA covers\n80\n% of credit losses, on a pari passu basis, for\n7\n years for certain acquired loans secured by mortgages on real property or shares in cooperative property constituting a primary residence. The indemnification assets, which represent the fair value of the CSLA and SFSLA on the acquisition date, are reflected in the total assets acquired.\nAs part of the consideration paid, JPMorganChase issued a\nfive-year\n, $\n50\n\u00a0billion secured note to the FDIC (the \"Purchase Money Note\"). The Purchase Money Note bears interest at a fixed rate of\n3.4\n% and is secured by certain of the acquired loans. The Purchase Money Note is prepayable upon notice to the holder.\nThe Firm had placed a $\n5\n\u00a0billion deposit with First Republic Bank on March 16, 2023, as part of $\n30\n\u00a0billion of deposits provided by a consortium of large U.S. banks. The Firm's $\n5\n\u00a0billion deposit was effectively settled as part of the acquisition and the associated allowance for credit losses was released upon closing. The Firm subsequently repaid the remaining $\n25\n\u00a0billion of deposits to the consortium of banks, including accrued interest through the payment date on May 9, 2023.\n\n312\nJPMorgan Chase & Co./2025 Form 10-K\nThe computation of the purchase price, the fair values of the assets acquired and liabilities assumed as part of the First Republic acquisition and the related bargain purchase gain are presented below, which reflects adjustments made during the measurement period to the acquisition-date fair value of the net assets acquired. The measurement period ended on April 30, 2024.\nFair value purchase\nprice allocation as of\nMay 1, 2023\n(in millions)\nPurchase price consideration\nAmounts paid/due to the FDIC, net of cash acquired\n(a)\n$\n13,555\n\nPurchase Money Note (at fair value)\n(b)\n48,848\n\nSettlement of First Republic deposit and other related party transactions\n(c)\n5,447\n\nContingent consideration - Shared-loss agreements\n15\n\nPurchase price consideration\n$\n67,865\n\nAssets\nSecurities\n$\n30,285\n\nLoans\n153,242\n\nCore deposit and customer relationship intangibles\n1,455\n\nIndemnification assets - Shared-loss agreements\n675\n\nAccounts receivable and other assets\n(d)\n6,740\n\nTotal assets acquired\n$\n192,397\n\nLiabilities\nDeposits\n$\n87,572\n\nFHLB advances\n27,919\n\nLending-related commitments\n2,614\n\nAccounts payable and other liabilities\n(d)\n2,792\n\nDeferred tax liabilities\n757\n\nTotal liabilities assumed\n$\n121,654\n\nFair value of net assets acquired\n$\n70,743\n\nGain on acquisition, after income taxes\n$\n2,878\n\n(a)\nNet of cash acquired of $\n680\n\u00a0million, and including disputed amounts with the FDIC as of April 30, 2024.\n(b)\nAs part of the consideration paid, JPMorganChase issued a\nfive-year\n, $\n50\n\u00a0billion secured note to the FDIC (the \"Purchase Money Note\").\n(c)\nIncludes $\n447\n\u00a0million of securities financing transactions with First Republic Bank that were effectively settled on the acquisition date.\n(d)\nOther assets include $\n1.2\n\u00a0billion in tax-oriented investments and $\n683\n million of lease right-of-use assets. Other liabilities include the related tax-oriented investment liabilities of $\n669\n\u00a0million and lease liabilities of $\n748\n million.\nThe following describes the accounting policies and fair value methodologies generally used by the Firm for the following assets acquired and liabilities assumed: core deposit and customer relationship intangibles, shared-loss agreements and the related indemnification assets, Purchase Money Note, and FHLB advances.\nFor further discussion of the Firm\u2019s accounting policies and valuation methodologies, refer to Notes 2 and 3 for fair value measurement, Note 10 for investment securities, Note 12 for loans, Note 17 for deposits, and Note 28 for lending-related commitments.\nCore deposit and customer relationship intangibles\nCore deposit and certain wealth management customer relationship intangibles were acquired as part of the First Republic acquisition. The core deposit intangible of $\n1.3\n\u00a0billion was valued by discounting estimated after-tax cost savings over the remaining useful life of the deposits using the favorable source of funds method. The after-tax cost savings were estimated based on the difference between the cost of maintaining the core deposit base relative to the cost of next best alternative funding sources available to market participants. The customer relationship intangibles of $\n180\n\u00a0million were valued by discounting estimated after-tax earnings over their remaining useful lives using the multi-period excess earnings\nmethod. Both intangible asset valuations utilized assumptions that the Firm believes a market participant would use to estimate fair values, such as growth and attrition rates, projected fee income as well as related costs to service the relationships, and discount rates. The core deposit and customer relationship intangibles are amortized over a projected period of future cash flows of approximately\n7\n years. Refer to Note 15 for further discussion on other intangible assets.\nJPMorgan Chase & Co./2025 Form 10-K\n313\nNotes to consolidated financial statements\nIndemnification assets - Shared-loss agreements\nThe indemnification assets represent forecasted recoveries from the FDIC associated with the shared-loss assets over the respective shared-loss recovery periods. The indemnification assets were recorded at fair value in other assets on the Consolidated balance sheets on the acquisition date. The fair values of the indemnification assets were estimated based on the timing of the forecasted losses underlying the related allowance for credit losses. The subsequent quarterly remeasurement of the indemnification assets is based on changes in the amount and timing of forecasted losses in the allowance for credit losses associated with the shared-loss assets and is recorded in other income. Under certain circumstances, the Firm may be required to make a payment to the FDIC upon termination of the shared-loss agreements based on the level of actual losses and recoveries on the shared-loss assets. The estimated potential future payment is reflected as contingent consideration as part of the purchase price consideration.\nPurchase Money Note and FHLB advances\nThe Purchase Money Note is recorded in long-term debt on the Consolidated balance sheets. The fair value of the Purchase Money Note was estimated based on a discounted cash flow methodology and incorporated estimated market discount rates.\n\nThe FHLB advances assumed in the acquisition were recorded in short-term borrowings and in long-term debt. The fair values of the FHLB advances were based on a discounted cash flow methodology and considered the observed FHLB advance issuance rates.\nLoans\nThe following table presents the unpaid principal balance (\"UPB\") and fair values of the loans acquired as of May 1, 2023, and reflects adjustments\nmade during the measurement period to the acquisition-date fair value of the loans acquired\n.\nMay 1, 2023\n(in millions)\nUPB\nFair value\nResidential real estate\n$\n106,240\n\n$\n92,053\n\nAuto and other\n3,093\n\n2,030\n\nTotal consumer\n109,333\n\n94,083\n\nSecured by real estate\n37,117\n\n33,602\n\nCommercial & industrial\n4,332\n\n3,932\n\nOther\n23,499\n\n21,625\n\nTotal wholesale\n64,948\n\n59,159\n\nTotal loans\n$\n174,281\n\n$\n153,242\n\nUnaudited pro forma condensed combined financial information\nThe following table presents certain unaudited pro forma financial information for the year ended\nDecember\u00a031, 2023\nas if the First Republic acquisition had occurred on January 1, 2022, including recognition of the estimated bargain purchase gain of\n$\n2.8\n billion\n and the provision for credit losses of\n$\n1.2\n billion\n. Additional adjustments include the interest on the Purchase Money Note and the impact of amortizing and accreting certain estimated fair value adjustments related to intangible assets, loans and lending-related commitments.\nThe Firm expects to achieve operating cost savings and other business synergies resulting from the acquisition that are not reflected in the pro forma amounts. The pro forma information is not necessarily indicative of the historical results of operations had the acquisition occurred on January 1, 2022, nor is it indicative of the results of operations in future periods.\nYear ended December 31,\n(in millions)\n2023\nNoninterest revenue\n$\n65,816\n\nNet interest income\n90,856\n\nNet income\n48,665\n\n314\nJPMorgan Chase & Co./2025 Form 10-K\nSupplementary Information: Distribution of assets, liabilities and stockholders\u2019 equity; interest rates and interest differentials\nConsolidated average balance sheets, interest and rates\nProvided below is a summary of JPMorganChase\u2019s consolidated average balances, interest and rates on a taxable-equivalent basis for the years ended December\u00a031, 2025, 2024 and 2023. Income computed on a taxable-equivalent basis is the income reported in the Consolidated statements of income,\nadjusted to present interest income and rates earned on assets exempt from income taxes (i.e., federal taxes) on a basis comparable with other taxable investments. The incremental tax rate used for calculating the taxable-equivalent adjustment was approximately 24% in 2025, 2024 and 2023\n.\n\n(Table continued on next page)\n(Unaudited)\n2025\nYear ended December 31,\n(Taxable-equivalent interest and rates; in millions, except rates)\nAverage\nbalance\n(f)\nInterest\n(f)\nRate\nAssets\nDeposits with banks\n$\n386,384\n\n$\n13,099\n\n3.39\n\n%\nFederal funds sold and securities purchased under resale agreements\n391,398\n\n16,706\n\n4.27\n\nSecurities borrowed\n242,788\n\n9,027\n\n3.72\n\nTrading assets \u2013 debt instruments\n565,277\n\n24,941\n\n4.41\n\n\u00a0\u00a0Taxable securities\n710,514\n\n26,903\n\n3.79\n\n\u00a0\u00a0Non-taxable securities\n(a)\n27,446\n\n1,295\n\n4.72\n\nTotal investment securities\n737,960\n\n28,198\n\n3.82\n\n(i)\nLoans\n1,400,048\n\n94,056\n\n(h)\n6.72\n\nAll other interest-earning assets\n(b)(c)\n110,504\n\n7,739\n\n7.00\n\nTotal interest-earning assets\n3,834,359\n\n193,766\n\n5.05\n\nAllowance for loan losses\n(25,000)\nCash and due from banks\n22,466\n\nTrading assets \u2013 equity and other instruments\n242,977\n\nTrading assets \u2013 derivative receivables\n59,025\n\nGoodwill, MSRs and other intangible assets\n64,422\n\nAll other noninterest-earning assets\n233,375\n\nTotal assets\n$\n4,431,624\n\nLiabilities\nInterest-bearing deposits\n$\n1,902,382\n\n$\n45,112\n\n2.37\n\n%\nFederal funds purchased and securities loaned or sold under repurchase agreements\n527,509\n\n22,411\n\n4.25\n\nShort-term borrowings\n53,612\n\n2,298\n\n4.29\n\nTrading liabilities \u2013 debt and all other interest-bearing liabilities\n(d)(e)\n302,440\n\n8,965\n\n2.96\n\nBeneficial interests issued by consolidated VIEs\n27,052\n\n1,218\n\n4.50\n\nLong-term debt\n350,938\n\n17,894\n\n5.10\n\nTotal interest-bearing liabilities\n3,163,933\n\n97,898\n\n3.09\n\nNoninterest-bearing deposits\n604,183\n\nTrading liabilities \u2013 equity and other instruments\n(e)\n45,677\n\nTrading liabilities \u2013 derivative payables\n44,395\n\nAll other liabilities, including the allowance for lending-related commitments\n220,645\n\nTotal liabilities\n4,078,833\n\nStockholders\u2019 equity\nPreferred stock\n20,037\n\nCommon stockholders\u2019 equity\n332,754\n\nTotal stockholders\u2019 equity\n352,791\n\n(g)\nTotal liabilities and stockholders\u2019 equity\n$\n4,431,624\n\nInterest rate spread\n1.96\n\n%\nNet interest income and net yield on interest-earning assets\n$\n95,868\n\n2.50\n\n(a)\nRepresents securities that are tax-exempt for U.S. federal income tax purposes.\n(b)\nIncludes brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets, which are classified in other assets on the Consolidated Balance Sheets.\n(c)\nThe rates reflect the impact of interest earned on cash collateral where the cash collateral has been netted against certain derivative payables.\n(d)\nAll other interest-bearing liabilities include brokerage-related customer payables.\n(e)\nThe combined balance of trading liabilities \u2013 debt and equity instruments was $172.9 billion, $185.4 billion and $153.3 billion for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n(f)\nIncludes the effect of derivatives that qualify for hedge accounting. Taxable-equivalent amounts are used where applicable. Refer to\u00a0Note 5 for additional information on hedge accounting.\nJPMorgan Chase & Co./2025 Form 10-K\n315\n(Table continued from previous page)\n2024\n2023\nAverage\nbalance\n(f)\nInterest\n(f)\nRate\nAverage\nbalance\n(f)\nInterest\n(f)\nRate\n$\n490,205\n$\n22,297\n4.55\n%\n$\n499,396\n$\n21,797\n4.36\n%\n359,197\n18,299\n5.09\n317,159\n15,079\n4.75\n209,744\n9,208\n4.39\n193,228\n7,983\n4.13\n456,029\n20,373\n4.47\n376,928\n16,001\n4.25\n583,329\n21,947\n3.76\n573,914\n17,390\n3.03\n27,912\n1,393\n4.99\n30,886\n1,560\n5.05\n611,241\n23,340\n3.82\n(i)\n604,800\n18,950\n3.13\n(i)\n1,322,425\n92,588\n(h)\n7.00\n1,248,076\n83,589\n(h)\n6.70\n88,726\n8,305\n9.36\n86,121\n7,669\n8.90\n3,537,567\n194,410\n5.50\n3,325,708\n171,068\n5.14\n(22,877)\n(20,762)\n22,591\n24,853\n208,534\n160,087\n57,005\n64,227\n64,393\n63,212\n218,709\n204,899\n$\n4,085,922\n$\n3,822,224\n$\n1,748,050\n$\n49,559\n2.84\n%\n$\n1,698,529\n$\n40,016\n2.36\n%\n363,820\n19,149\n5.26\n256,086\n13,259\n5.18\n39,593\n2,101\n5.31\n37,468\n1,894\n5.05\n314,054\n10,238\n3.26\n286,605\n9,396\n3.28\n26,515\n1,383\n5.22\n18,648\n953\n5.11\n344,346\n18,920\n5.49\n296,433\n15,803\n5.33\n2,836,378\n101,350\n3.57\n2,593,769\n81,321\n3.14\n638,592\n660,538\n32,025\n30,501\n39,497\n46,355\n203,006\n181,601\n3,749,498\n3,512,764\n24,054\n27,404\n312,370\n282,056\n336,424\n(g)\n309,460\n(g)\n$\n4,085,922\n$\n3,822,224\n1.93\n%\n2.00\n%\n$\n93,060\n2.63\n$\n89,747\n2.70\n(g)\nThe ratio of average stockholders\u2019 equity to average assets was 8.0%, 8.2% and 8.1% for the years ended December\u00a031, 2025, 2024 and 2023, respectively. The return on average stockholders\u2019 equity, based on net income, was 16.2%, 17.4% and 16.0% for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n(h)\nIncluded fees and commissions on loans of $3.7 billion, $3.6 billion and $2.2 billion for the years ended December\u00a031, 2025, 2024 and 2023, respectively.\n(i)\nThe annualized rate for securities based on amortized cost was 3.80%, 3.79% and 3.09% for the years ended December\u00a031, 2025, 2024 and 2023, respectively, and does not give effect to changes in fair value that are reflected in AOCI.\nWithin the Consolidated average balance sheets, interest and rates summary, the principal amounts of nonaccrual loans have been included in the average loan balances used to determine the average interest rate earned on loans. Refer to Note 12 for additional information on nonaccrual loans, including interest accrued.\n316\nJPMorgan Chase & Co./2025 Form 10-K\nInterest rates and interest differential analysis of net interest income \u2013 U.S. and non-U.S.\nPresented below is a summary of interest and rates segregated between U.S. and non-U.S. operations for the years 2023 through 2025. The segregation of U.S. and non-U.S. components is based on the location of the office recording the transaction.\n(Table continued on next page)\n2025\n(Unaudited)\nYear ended December 31,\n(Taxable-equivalent interest and rates; in millions, except rates)\nAverage balance\nInterest\nRate\nInterest-earning assets\nDeposits with banks:\nU.S.\n$\n160,453\n\n$\n6,960\n\n4.34\n\n%\nNon-U.S.\n225,931\n\n6,139\n\n2.72\n\nFederal funds sold and securities purchased under resale agreements:\nU.S.\n218,450\n\n10,004\n\n4.58\n\nNon-U.S.\n172,948\n\n6,702\n\n3.88\n\nSecurities borrowed:\nU.S.\n185,559\n\n7,265\n\n3.92\n\nNon-U.S.\n57,229\n\n1,762\n\n3.08\n\nTrading assets \u2013 debt instruments:\nU.S.\n369,664\n\n16,255\n\n4.40\n\nNon-U.S.\n195,613\n\n8,686\n\n4.44\n\nInvestment securities:\nU.S.\n684,466\n\n26,173\n\n3.82\n\nNon-U.S.\n53,494\n\n2,025\n\n3.79\n\nLoans:\nU.S.\n1,271,393\n\n87,196\n\n6.86\n\nNon-U.S.\n128,655\n\n6,860\n\n5.33\n\nAll other interest-earning assets, largely U.S.\n(a)\n110,504\n\n7,739\n\n7.00\n\nTotal interest-earning assets\n3,834,359\n\n193,766\n\n5.05\n\nInterest-bearing liabilities\nInterest-bearing deposits:\nU.S.\n1,419,647\n\n31,625\n\n2.23\n\nNon-U.S.\n482,735\n\n13,487\n\n2.79\n\nFederal funds purchased and securities loaned or sold under repurchase agreements:\nU.S.\n412,269\n\n18,247\n\n4.43\n\nNon-U.S.\n115,240\n\n4,164\n\n3.61\n\nTrading liabilities \u2013 debt, short-term and all other interest-bearing liabilities:\nU.S.\n215,043\n\n7,113\n\n3.31\n\nNon-U.S.\n141,009\n\n4,150\n\n2.94\n\nBeneficial interests issued by consolidated VIEs, predominantly U.S.\n27,052\n\n1,218\n\n4.50\n\nLong-term debt:\nU.S.\n341,531\n\n17,612\n\n5.16\n\nNon-U.S.\n9,407\n\n282\n\n3.00\n\nTotal interest-bearing liabilities\n3,163,933\n\n97,898\n\n3.09\n\nNoninterest-bearing liabilities\n(b)\n670,426\n\nTotal investable funds\n$\n3,834,359\n\n$\n97,898\n\n2.55\n\n%\nNet interest income and net yield:\n$\n95,868\n\n2.50\n\n%\nU.S.\n82,547\n\n2.80\n\nNon-U.S.\n13,321\n\n1.51\n\nPercentage of total assets and liabilities attributable to non-U.S. operations:\nAssets\n25.3\n\nLiabilities\n22.0\n\n(a)\nThe rates reflect the impact of interest earned on cash collateral where that cash collateral has been netted against certain derivative payables.\n(b)\nRepresents the amount of noninterest-bearing liabilities funding interest-earning assets.\nRefer to the \u201cNet interest income\u201d discussion in Consolidated Results of Operations on pages 51\u201354 for further information.\nJPMorgan Chase & Co./2025 Form 10-K\n317\n(Table continued from previous page)\n2024\n2023\nAverage balance\nInterest\nRate\nAverage balance\nInterest\nRate\n$\n284,913\n$\n15,157\n5.32\n%\n$\n296,784\n$\n15,348\n5.17\n%\n205,292\n7,140\n3.48\n202,612\n6,449\n3.18\n193,210\n10,686\n5.53\n155,304\n8,330\n5.36\n165,987\n7,613\n4.59\n161,855\n6,749\n4.17\n150,251\n7,330\n4.88\n133,805\n6,239\n4.66\n59,493\n1,878\n3.16\n59,423\n1,744\n2.93\n\n309,568\n13,579\n4.39\n248,541\n10,721\n4.31\n146,461\n6,794\n4.64\n128,387\n5,280\n4.11\n567,784\n21,458\n3.78\n568,505\n17,469\n3.07\n43,457\n1,882\n4.33\n36,295\n1,481\n4.08\n1,211,978\n85,621\n7.06\n1,137,162\n76,884\n6.76\n110,447\n6,967\n6.31\n110,914\n6,705\n6.05\n88,726\n8,305\n9.36\n86,121\n7,669\n8.90\n3,537,567\n194,410\n5.50\n3,325,708\n171,068\n5.14\n\n1,307,000\n33,173\n2.54\n1,290,110\n26,253\n2.03\n441,050\n16,386\n3.72\n408,419\n13,763\n3.37\n294,476\n15,949\n5.42\n197,049\n10,639\n5.40\n69,344\n3,200\n4.61\n59,037\n2,620\n4.44\n\n222,710\n8,289\n3.72\n205,388\n7,774\n3.79\n130,937\n4,050\n3.09\n118,685\n3,516\n2.96\n26,515\n1,383\n5.22\n18,648\n953\n5.11\n338,166\n18,760\n5.55\n293,218\n15,749\n5.37\n6,180\n160\n2.59\n3,215\n54\n1.68\n2,836,378\n101,350\n3.57\n2,593,769\n81,321\n3.14\n701,189\n731,939\n$\n3,537,567\n$\n101,350\n2.86\n%\n$\n3,325,708\n$\n81,321\n2.45\n%\n$\n93,060\n2.63\n%\n$\n89,747\n2.70\n%\n80,913\n2.92\n77,923\n3.01\n12,147\n1.58\n11,824\n1.61\n24.3\n24.7\n20.5\n20.2\n318\nJPMorgan Chase & Co./2025 Form 10-K\nChanges in net interest income, volume and rate analysis\nThe table below presents an attribution of net interest income between volume and rate. The attribution between volume and rate is calculated using annual average balances for each category of assets and liabilities shown in the table and the corresponding annual rates (refer to pages 315\u2013318 for more information on average balances and rates). In this analysis, when the change cannot be isolated to either volume or rate, it has been allocated to volume. The annual rates include the impact of changes in market rates, as well as the impact of any change in composition of the various products within each category of asset or liability. This analysis is calculated separately for each category without consideration of the relationship between categories (for example, the net spread between the rates earned on assets and the rates paid on liabilities that fund those assets). As a result, changes in the granularity or groupings considered in this analysis would produce a different attribution result, and due to the complexities involved, precise allocation of changes in interest rates between volume and rates is inherently complex and judgmental.\n2025 versus 2024\n2024 versus 2023\n(Unaudited)\nIncrease/(decrease) due to change in:\nIncrease/(decrease) due to change in:\nYear ended December 31,\n(On a taxable-equivalent basis; in millions)\nVolume\nRate\nNet\nchange\nVolume\nRate\nNet\nchange\nInterest-earning assets\nDeposits with banks:\nU.S.\n$\n(5,405)\n$\n(2,792)\n$\n(8,197)\n$\n(636)\n$\n445\n$\n(191)\nNon-U.S.\n559\n\n(1,560)\n(1,001)\n83\n608\n691\nFederal funds sold and securities purchased under resale agreements:\nU.S.\n1,153\n\n(1,835)\n(682)\n2,092\n264\n2,356\nNon-U.S.\n268\n\n(1,179)\n(911)\n184\n680\n864\nSecurities borrowed:\nU.S.\n1,377\n\n(1,442)\n(65)\n797\n294\n1,091\nNon-U.S.\n(68)\n(48)\n(116)\n(3)\n137\n134\nTrading assets \u2013 debt instruments:\nU.S.\n2,645\n\n31\n\n2,676\n\n2,659\n199\n2,858\nNon-U.S.\n2,185\n\n(293)\n1,892\n\n834\n680\n1,514\nInvestment securities:\nU.S.\n4,488\n\n227\n\n4,715\n\n(47)\n4,036\n3,989\nNon-U.S.\n378\n\n(235)\n143\n\n310\n91\n401\nLoans:\n\nU.S.\n3,999\n\n(2,424)\n1,575\n\n5,326\n3,411\n8,737\nNon-U.S.\n975\n\n(1,082)\n(107)\n(26)\n288\n262\nAll other interest-earning assets, largely U.S.\n1,528\n\n(2,094)\n(566)\n240\n396\n636\nChange in interest income\n14,082\n\n(14,726)\n(644)\n11,813\n11,529\n23,342\nInterest-bearing liabilities\nInterest-bearing deposits:\nU.S.\n2,504\n\n(4,052)\n(1,548)\n340\n6,580\n6,920\nNon-U.S.\n1,203\n\n(4,102)\n(2,899)\n1,194\n1,429\n2,623\nFederal funds purchased and securities loaned or sold under repurchase agreements:\nU.S.\n5,213\n\n(2,915)\n2,298\n\n5,271\n39\n5,310\nNon-U.S.\n1,657\n\n(693)\n964\n\n480\n100\n580\nTrading liabilities \u2013 debt, short-term and all other interest-bearing liabilities:\nU.S.\n(263)\n(913)\n(1,176)\n659\n(144)\n515\nNon-U.S.\n296\n\n(196)\n100\n\n380\n154\n534\nBeneficial interests issued by consolidated VIEs, predominantly U.S.\n26\n\n(191)\n(165)\n409\n21\n430\nLong-term debt:\nU.S.\n171\n\n(1,319)\n(1,148)\n2,483\n528\n3,011\nNon-U.S.\n97\n\n25\n\n122\n\n77\n29\n106\nChange in interest expense\n10,904\n\n(14,356)\n(3,452)\n11,293\n8,736\n20,029\nChange in net interest income\n$\n3,178\n\n$\n(370)\n$\n2,808\n\n$\n520\n$\n2,793\n$\n3,313\n\nJPMorgan Chase & Co./2025 Form 10-K\n319\nGlossary of Terms and Acronyms\n2025 Form 10-K:\nAnnual report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission.\n\nABS:\nAsset-backed securities\nActive foreclosures:\nLoans referred to foreclosure where formal foreclosure proceedings are ongoing. Includes both judicial and non-judicial states.\nAFS:\nAvailable-for-sale\nALCO:\nAsset Liability Committee\nAllowance for loan losses to total retained loans:\nRepresents period-end allowance for loan losses divided by retained loans.\nAlternative assets \u201cAlternatives\u201d:\n The following types of assets constitute alternative investments - hedge funds, currency, real estate, private equity and other investment funds designed to focus on nontraditional strategies.\nAmortized cost:\nAmount at which a financing receivable or investment is originated or acquired, adjusted for accretion or amortization of premium, discount, and net deferred fees or costs, collection of cash, charge-offs, foreign exchange, and fair value hedge accounting adjustments. For AFS securities, amortized cost is also reduced by any impairment losses recognized in earnings. Amortized cost is not reduced by the allowance for credit losses, except where explicitly presented net.\nAOCI:\nAccumulated other comprehensive income/(loss)\nARM(s):\nAdjustable rate mortgage(s)\nAUC \u201cAssets under custody\u201d:\nRepresents assets held directly or indirectly on behalf of clients under safekeeping, custody and servicing arrangements.\nAUM \u201cAssets under management\u201d:\n Represent assets managed by AWM on behalf of its Private Banking, Institutional and Retail clients. Includes \u201cCommitted capital not Called.\u201d\nAuto loan and lease origination volume:\nDollar amount of auto loans and leases originated.\nAWM:\nAsset & Wealth Management\nBeneficial interests issued by consolidated VIEs:\nRepresents the interest of third-party holders of debt, equity securities, or other obligations, issued by VIEs that JPMorganChase consolidates.\nBenefit obligation:\nRefers to the projected benefit obligation for pension plans and the accumulated postretirement benefit obligation for OPEB plans.\nBHC:\nBank holding company\nBWM:\n Banking & Wealth Management\nBridge Financing Portfolio:\n A portfolio of held-for-sale unfunded loan commitments and funded loans.\u00a0The unfunded commitments include both short-term\nbridge loan commitments that will ultimately be replaced by longer term financing as well as term loan commitments.\u00a0The funded loans include term loans and funded revolver facilities.\nCB:\nCommercial Banking\nCCAR:\nComprehensive Capital Analysis and Review\nCCB:\nConsumer & Community Banking\nCCB Consumer customer:\n A unique individual that has financial ownership or decision-making power with respect to accounts; excludes customers under the age of 18. Where a customer uses the same identifier as both a Consumer and a Small business, the customer is included in both metrics.\nCCB Small business customer:\nA unique business or legal entity that has financial ownership or decision-making power with respect to accounts. Where a customer uses the same identifier as both a Consumer and a Small business, the customer is included in both metrics.\nCCO:\n Chief Compliance Officer\nCCP \u201cCentral counterparty\u201d\n is a clearing house that interposes itself between counterparties to contracts traded in one or more financial markets, becoming the buyer to every seller and the seller to every buyer and thereby ensuring the future performance of open contracts. A CCP becomes a counterparty to trades with market participants through novation, an open offer system, or another legally binding arrangement.\nCDS:\nCredit default swaps\nCECL:\nCurrent Expected Credit Losses\nCEO:\nChief Executive Officer\nCET1 Capital:\nCommon equity Tier 1 capital\nCFO:\nChief Financial Officer\nCFP:\n Contingency funding plan\nCFTC:\n Commodity Futures Trading Commission\nCIB:\nCommercial & Investment Bank\nCIO:\nChief Investment Office\nClient assets:\n Represent assets under management as well as custody, brokerage, administration and deposit accounts.\nClient deposits and other third-party liabilities:\n Deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements) as part of client cash management programs.\nClient investment assets:\n Represent assets under management as well as custody, brokerage and annuity accounts, and deposits held in investment accounts.\nCLO:\n Collateralized loan obligations\n320\nJPMorgan Chase & Co./2025 Form 10-K\nGlossary of Terms and Acronyms\nCLTV:\nCombined loan-to-value\nCMT:\n Constant Maturity Treasury\nCollateral-dependent:\nA loan is considered to be collateral-dependent when repayment of the loan is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty, including when foreclosure is deemed probable based on borrower delinquency.\nCommercial Card:\nProvides a wide range of payment services to corporate and public sector clients worldwide through the commercial card products. Services include procurement, corporate travel and entertainment, expense management services, and business-to-business payment solutions.\nCredit derivatives:\n Financial instruments whose value is derived from the credit risk associated with the debt of a third-party issuer (the reference entity) which allow one party (the protection purchaser) to transfer that risk to another party (the protection seller). Upon the occurrence of a credit event by the reference entity, which may include, among other events, the bankruptcy or failure to pay its obligations, or certain restructurings of the debt of the reference entity, neither party has recourse to the reference entity. The protection purchaser has recourse to the protection seller for the difference between the face value of the CDS contract and the fair value at the time of settling the credit derivative contract. The determination as to whether a credit event has occurred is generally made by the relevant International Swaps and Derivatives Association (\u201cISDA\u201d) Determinations Committee.\nCriticized:\nCriticized loans, lending-related commitments and derivative receivables that are classified as special mention, substandard and doubtful categories for regulatory purposes and are generally consistent with a rating of CCC+/Caa1 and below, as defined by S&P and Moody\u2019s.\nCRO:\nChief Risk Officer\nCRR:\n Capital Requirements Regulation\nCTC:\nCIO, Treasury and Corporate\nCustom lending:\n Loans to AWM\u2019s Global Private Bank clients, including loans to private investment funds and loans that are collateralized by nontraditional asset types, such as art work, aircraft, etc.\nCVA:\nCredit valuation adjustment\nDebit and credit card sales volume:\n Dollar amount of card member purchases, net of returns.\nDeposit margin:\nRepresents net interest income expressed as a percentage of average deposits.\nDistributed denial-of-service attack:\n The use of a large number of remote computer systems to electronically send a high volume of traffic to a target\nwebsite to create a service outage at the target. This is a form of cyberattack.\nDodd-Frank Act:\n Wall Street Reform and Consumer Protection Act\nDVA:\nDebit valuation adjustment\nEC:\nEuropean Commission\nEligible HQLA:\nEligible high-quality liquid assets (\"HQLA\"), for purposes of calculating the liquidity coverage ratio (\"LCR\"), is the amount of unencumbered HQLA that satisfy certain operational considerations as defined in the LCR rule. Eligible HQLA securities may be reported in securities borrowed or purchased under resale agreements, trading assets, or investment securities on the Firm\u2019s Consolidated balance sheets. For purposes of calculating the LCR, HQLA securities are included at fair value, which may differ from the accounting treatment under U.S. GAAP.\nEligible LTD:\nLong-term debt satisfying certain eligibility criteria.\nEmbedded derivatives:\nImplicit or explicit terms or features of a financial instrument that affect some or all of the cash flows or the value of the instrument in a manner similar to a derivative. An instrument containing such terms or features is referred to as a \u201chybrid.\u201d The component of the hybrid that is the non-derivative instrument is referred to as the \u201chost.\u201d For example, callable debt is a hybrid instrument that contains a plain vanilla debt instrument (i.e., the host) and an embedded option that allows the issuer to redeem the debt issue at a specified date for a specified amount (i.e., the embedded derivative). However, a floating rate instrument is not a hybrid composed of a fixed-rate instrument and an interest rate swap.\nEPS:\n Earnings per share\nERISA:\n Employee Retirement Income Security Act of 1974\nESG:\n Environmental, Social and Governance\nETD \u201cExchange-traded derivatives\u201d:\nDerivative contracts that are executed on an exchange and settled via a central clearing house.\nEU:\nEuropean Union\nExpense categories:\n\u2022\nVolume- and/or revenue-related expenses generally correlate with changes in the related business/transaction volume or revenue. Examples include commissions and incentive compensation within the LOBs, depreciation expense related to operating lease assets, and brokerage expense related to trading transaction volume.\n\u2022\nInvestments in the business include expenses associated with supporting medium- to longer-term\nJPMorgan Chase & Co./2025 Form 10-K\n321\nGlossary of Terms and Acronyms\nstrategic plans of the Firm. Examples include front office growth, market expansion, initiatives in technology (including related compensation), marketing, and acquisitions.\n\u2022\nStructural expenses are those associated with the day-to-day cost of running the Firm and are expenses not included in the above two categories. Examples include employee salaries and benefits, certain other incentive compensation, and costs related to real estate.\nFannie Mae:\n Federal National Mortgage Association\nFASB:\nFinancial Accounting Standards Board\nFCA:\n Financial Conduct Authority\nFCC:\n Firmwide Control Committee\nFDIC:\nFederal Deposit Insurance Corporation\nFDM \"Financial difficulty modification\"\napplies to loan modifications effective January 1, 2023, and\n\nis deemed to occur when the Firm modifies specific terms of the original loan agreement. The following types of modifications are considered FDMs: principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension or a combination of these modifications.\nFederal Reserve:\n The Board of the Governors of the Federal Reserve System\nFFIEC:\n Federal Financial Institutions Examination Council\nFHA:\nFederal Housing Administration\nFHLB:\nFederal Home Loan Bank\nFICC:\nThe\n\nFixed Income Clearing Corporation\nFICO score:\nA measure of consumer credit risk based on information in consumer credit reports produced by Fair Isaac Corporation. Because certain aged data is excluded from credit reports based on rules in the Fair Credit Reporting Act, FICO scores may not reflect all historical information about a consumer.\nFINRA:\n Financial Industry Regulatory Authority\nFirm:\n JPMorgan Chase & Co.\nFirst Republic:\nOn May 1, 2023, JPMorganChase acquired certain assets and assumed certain liabilities of First Republic Bank (the \u201cFirst Republic acquisition\u201d) from the FDIC. \"First Republic-related,\" \"associated with First Republic\" or similar expressions refer to the relevant effects of the First Republic acquisition, as well as subsequent related business and activities, as applicable. Refer to Note 34 of the Firm's 2024 Form 10-K for additional information.\nForward points:\nRepresents the interest rate differential between two currencies, which is either added to or subtracted from the current exchange rate (i.e., \u201cspot rate\u201d) to determine the forward exchange rate.\nFRC:\nFirmwide Risk Committee\nFreddie Mac:\n Federal Home Loan Mortgage Corporation\nFree standing derivatives:\nA derivative contract entered into either separate and apart from any of the Firm\u2019s other financial instruments or equity transactions. Or, in conjunction with some other transaction and is legally detachable and separately exercisable.\nFSB:\nFinancial Stability Board\nFTE:\nFully taxable equivalent\nFVA:\nFunding valuation adjustment\nFX:\nForeign exchange\nG7 Group of Seven nations:\nCountries in the G7 are Canada, France, Germany, Italy, Japan, the U.K. and the U.S.\nG7 government securities:\n Securities issued by the government of one of the G7 nations.\nGinnie Mae:\n Government National Mortgage Association\nGSIB:\nGlobal systemically important banks\nHELOC:\nHome equity line of credit\nHome equity \u2013 senior lien:\nRepresents loans and commitments where JPMorganChase holds the first security interest on the property.\nHome equity \u2013 junior lien:\nRepresents loans and commitments where JPMorganChase holds a security interest that is subordinate in rank to other liens.\nHQLA:\nHigh-quality liquid assets. Also refer to Eligible HQLA.\nHTM:\nHeld-to-maturity\nIBOR:\nInterbank Offered Rate\nICAAP:\n Internal capital adequacy assessment process\nIDI:\nInsured depository institutions\nIHC:\n JPMorgan Chase Holdings LLC, an intermediate holding company\nIndirect tax expense:\n Refers to taxes that are imposed on goods and services rather than on income. Examples of indirect taxes include value-added tax (\u201cVAT\u201d) and sales tax, among others.\nInvestment-grade:\nAn indication of credit quality based on JPMorganChase\u2019s internal risk assessment. The Firm considers ratings of BBB-/Baa3 or higher as investment-grade.\nIPO:\nInitial public offering\nIR:\nInterest rate\nISDA:\nInternational Swaps and Derivatives Association\nJPMorganChase:\n JPMorgan Chase & Co.\n322\nJPMorgan Chase & Co./2025 Form 10-K\nGlossary of Terms and Acronyms\nJPMorgan Chase Bank, N.A.:\n JPMorgan Chase Bank, National Association\nJPMorgan Chase Foundation or the Firm\u2019s Foundation:\n A not-for-profit organization that makes contributions for charitable and educational purposes.\nJ.P. Morgan Securities:\n J.P. Morgan Securities LLC\nJPMSE:\n J.P. Morgan SE\nLCR:\nLiquidity coverage ratio\nLDA:\n Loss Distribution Approach\nLGD:\nLoss given default\nLIBOR:\n London Interbank Offered Rate\nLLC:\nLimited Liability Company\nLOB:\nLine of business\nLOB CROs:\n Line of Business and CTC Chief Risk Officers\nLTIP:\nLong-term incentive plan\nLTV \u201cLoan-to-value\u201d:\nFor residential real estate loans, the relationship, expressed as a percentage, between the principal amount of a loan and the appraised value of the collateral (i.e., residential real estate) securing the loan.\nOrigination date LTV ratio:\n\nThe LTV ratio at the origination date of the loan. Origination date LTV ratios are calculated based on the actual appraised values of collateral (i.e., loan-level data) at the origination date.\nCurrent estimated LTV ratio:\nAn estimate of the LTV as of a certain date. The current estimated LTV ratios are calculated using estimated collateral values derived from a nationally recognized home price index measured at the metropolitan statistical area (\u201cMSA\u201d) level. These MSA-level home price indices consist of actual data to the extent available and forecasted data where actual data is not available. As a result, the estimated collateral values used to calculate these ratios do not represent actual appraised loan-level collateral values; as such, the resulting LTV ratios are necessarily imprecise and should therefore be viewed as estimates.\nCombined LTV ratio:\nThe LTV ratio considering all available lien positions, as well as unused lines, related to the property. Combined LTV ratios are used for junior lien home equity products.\nMacro businesses:\n The macro businesses include Rates, Currencies and Emerging Markets, Fixed Income Financing and Commodities in CIB's Fixed Income Markets.\nManaged basis:\nA non-GAAP presentation of Firmwide financial results that includes reclassifications to present revenue on a fully taxable-equivalent basis. Management also uses this financial measure at the segment level, because it believes this provides information to enable investors to\nunderstand the underlying operational performance and trends of the particular business segment and facilitates a comparison of the business segment with the performance of competitors.\nMarkets:\n Consists of CIB\u2019s Fixed Income Markets and Equity Markets businesses.\nMaster netting agreement:\nA single agreement with a counterparty that permits multiple transactions governed by that agreement to be terminated or accelerated and settled through a single payment in a single currency in the event of a default (e.g., bankruptcy, failure to make a required payment or securities transfer or deliver collateral or margin when due).\nMBS:\nMortgage-backed securities\nMD&A:\nManagement\u2019s discussion and analysis\nMeasurement alternative:\nMeasures equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of the same issuer.\nMerchant Services:\n Offers merchants payment processing capabilities, fraud and risk management, data and analytics, and other payments services. Through Merchant Services, merchants of all sizes can accept payments via credit and debit cards and payments in multiple currencies.\nMEVs \"Macroeconomic variables\":\n Refer to quantitative measures of current and forecasted macroeconomic conditions - such as the unemployment rates, gross domestic product growth rate and interest rates - used by the Firm in its models to estimate credit losses.\nMoody\u2019s:\nMoody\u2019s Investor Services\nMortgage origination channels:\nRetail \u2013 Borrowers who buy or refinance a home through direct contact with a mortgage banker employed by the Firm using a branch office, the Internet or by phone. Borrowers are frequently referred to a mortgage banker by a banker in a Chase branch, real estate brokers, home builders or other third parties.\nCorrespondent \u2013 Banks, thrifts, other mortgage banks and other financial institutions that sell closed loans to the Firm.\nMortgage product types:\nAlt-A\nAlt-A loans are generally higher in credit quality than subprime loans but have characteristics that would disqualify the borrower from a traditional prime loan. Alt-A lending characteristics may include one or more of the following: (i) limited documentation; (ii) a high CLTV ratio; (iii) loans secured by non-owner occupied properties; or (iv) a debt-to-income ratio above normal\nJPMorgan Chase & Co./2025 Form 10-K\n323\nGlossary of Terms and Acronyms\nlimits. A substantial proportion of the Firm\u2019s Alt-A loans are those where a borrower does not provide complete documentation of his or her assets or the amount or source of his or her income.\nOption ARMs\nThe option ARM real estate loan product is an adjustable-rate mortgage loan that provides the borrower with the option each month to make a fully amortizing, interest-only or minimum payment. The minimum payment on an option ARM loan is based on the interest rate charged during the introductory period. This introductory rate is usually significantly below the fully indexed rate. The fully indexed rate is calculated using an index rate plus a margin. Once the introductory period ends, the contractual interest rate charged on the loan increases to the fully indexed rate and adjusts monthly to reflect movements in the index. The minimum payment is typically insufficient to cover interest accrued in the prior month, and any unpaid interest is deferred and added to the principal balance of the loan. Option ARM loans are subject to payment recast, which converts the loan to a variable-rate fully amortizing loan upon meeting specified loan balance and anniversary date triggers.\nPrime\nPrime mortgage loans are made to borrowers with good credit records who meet specific underwriting requirements, including prescriptive requirements related to income and overall debt levels. New prime mortgage borrowers provide full documentation and generally have reliable payment histories.\nSubprime\nSubprime loans are loans that, prior to mid-2008, were offered to certain customers with one or more high risk characteristics, including but not limited to: (i) unreliable or poor payment histories; (ii) a high LTV ratio of greater than 80% (without borrower-paid mortgage insurance); (iii) a high debt-to-income ratio; (iv) an occupancy type for the loan is other than the borrower\u2019s primary residence; or (v) a history of delinquencies or late payments on the loan.\nMREL:\nMinimum requirements for own funds and eligible liabilities\nMSR:\nMortgage servicing rights\nMulti-asset:\nAny fund or account that allocates assets under management to more than one asset class.\nNA:\n Data is not applicable or available for the period presented.\nNAV:\n Net Asset Value\nNet Capital Rule:\nRule 15c3-1 under the Securities Exchange Act of 1934.\nNet charge-off/(recovery) rate:\nRepresents net charge-offs/(recoveries) (annualized) divided by average retained loans for the reporting period.\nNet interchange income\nincludes the following components:\n\u2022\nInterchange income:\n Fees earned by credit and debit card issuers on sales transactions.\n\u2022\nRewards costs:\n The cost to the Firm for points earned by cardholders enrolled in credit card rewards programs generally tied to sales transactions.\n\u2022\nPartner payments:\n Payments to co-brand credit card partners based on the cost of loyalty program rewards earned by cardholders on credit card transactions.\nNet mortgage servicing revenue:\nIncludes operating revenue earned from servicing third-party mortgage loans, which is recognized over the period in which the service is provided; changes in the fair value of MSRs; the impact of risk management activities associated with MSRs; and gains and losses on securitization of excess mortgage servicing. Net mortgage servicing revenue also includes gains and losses on sales and lower of cost or fair value adjustments of certain repurchased loans insured by U.S. government agencies.\nNet revenue rate:\nRepresents Card Services net revenue (annualized) expressed as a percentage of average loans for the period.\nNet yield on interest-earning assets:\nThe average rate for interest-earning assets less the average rate paid for all sources of funds.\nNFA:\n National Futures Association\nNM:\n Not meaningful\nNOL:\n Net operating loss\nNonaccrual loans:\n Loans for which interest income is not recognized on an accrual basis. Loans (other than credit card loans and certain consumer loans insured by U.S. government agencies) are placed on nonaccrual status when full payment of principal and interest is not expected, regardless of delinquency status, or when principal and interest have been in default for a period of 90 days or more unless the loan is both well-secured and in the process of collection. Collateral-dependent loans are typically maintained on nonaccrual status.\nNonperforming assets:\nNonperforming assets include nonaccrual loans, nonperforming derivatives and certain assets acquired in loan satisfactions, predominantly real estate owned and other commercial and personal property.\nNSFR:\n Net Stable Funding Ratio\nOAS:\nOption-adjusted spread\nOCC:\nOffice of the Comptroller of the Currency\nOCI:\nOther comprehensive income/(loss)\nOPEB:\nOther postretirement employee benefit\n324\nJPMorgan Chase & Co./2025 Form 10-K\nGlossary of Terms and Acronyms\nOperating losses:\n Primarily refer to fraud losses associated with customer deposit accounts, credit and debit cards; exclude legal expense.\nOver-the-counter (\u201cOTC\u201d) derivatives:\nDerivative contracts that are negotiated, executed and settled bilaterally between two derivative counterparties, where one or both counterparties is a derivatives dealer.\nOver-the-counter cleared (\u201cOTC-cleared\u201d) derivatives:\nDerivative contracts that are negotiated and executed bilaterally, but subsequently settled via a central clearing house, such that each derivative counterparty is only exposed to the default of that clearing house.\nOverhead ratio:\nNoninterest expense as a percentage of total net revenue.\nParent Company:\n JPMorgan Chase & Co.\nParticipating securities:\nRepresents unvested share-based compensation awards containing nonforfeitable rights to dividends or dividend equivalents (collectively, \u201cdividends\u201d), which are included in the earnings per share calculation using the two-class method. JPMorganChase grants RSUs to certain employees under its share-based compensation programs, which entitle the recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities. Under the two-class method, all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities, based on their respective rights to receive dividends.\nPCAOB:\n Public Company Accounting Oversight Board\nPCD\n\n\u201cPurchased credit deteriorated\u201d\n assets represent acquired financial assets that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by the Firm.\nPD:\nProbability of default\nPillar 1:\nThe Basel framework consists of a three \u201cPillar\u201d approach. Pillar 1 establishes minimum capital requirements, defines eligible capital instruments, and prescribes rules for calculating RWA.\nPillar 3:\n The Basel framework consists of a three \u201cPillar\u201d approach. Pillar 3 encourages market discipline through disclosure requirements which allow market participants to assess the risk and capital profiles of banks.\nPRA:\nPrudential Regulation Authority\nPreferred stock dividends:\n Reflects dividends declared and deemed dividends upon redemption of preferred stock\nPre-provision profit/(loss):\nRepresents total net revenue less noninterest expense. The Firm believes that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses.\nPre-tax margin:\nRepresents income before income tax expense divided by total net revenue, which is, in management\u2019s view, a comprehensive measure of pretax performance derived by measuring earnings after all costs are taken into consideration. It is one basis upon which management evaluates the performance of AWM against the performance of their respective competitors.\nPrincipal transactions revenue:\nPrincipal transactions revenue is driven by many factors, including:\n\u2022\nthe bid-offer spread, which is the difference between the price at which a market participant is willing and able to sell an instrument to the Firm\u00a0and the price at which another market participant is willing and able to buy it from the Firm, and vice versa; and\n\u2022\nrealized and unrealized gains and losses on financial instruments and commodities transactions, including those accounted for under the fair value option, primarily used in client-driven market-making activities.\n\u2013\nRealized gains and losses result from the sale of instruments, closing out or termination of transactions, or interim cash payments.\n\u2013\nUnrealized gains and losses result from changes in valuation.\nIn connection with its client-driven market-making activities, the Firm transacts in debt and equity instruments, derivatives and commodities, including physical commodities inventories and financial instruments that reference commodities.\nPrincipal transactions revenue also includes realized and unrealized gains and losses related to:\n\u2022\nderivatives designated in qualifying hedge accounting relationships, primarily fair value hedges of commodity and foreign exchange risk;\n\u2022\nderivatives used for specific risk management purposes, primarily to mitigate credit, foreign exchange and interest rate risks.\nProduction revenue:\n Includes fees and income recognized as earned on mortgage loans originated with the intent to sell, and the impact of risk management activities associated with the mortgage pipeline and warehouse loans. Production revenue also includes gains and losses on sales and lower of cost or fair value adjustments on mortgage loans held-for-sale (excluding certain repurchased loans insured by U.S. government agencies), and changes in the fair value of financial instruments measured under the fair value option.\nJPMorgan Chase & Co./2025 Form 10-K\n325\nGlossary of Terms and Acronyms\nPSU(s):\n Performance share units\nRegulatory VaR:\n Daily aggregated VaR calculated in accordance with regulatory rules.\nREO:\nReal estate owned\nReported basis:\nFinancial statements prepared under U.S. GAAP, which excludes the impact of taxable-equivalent adjustments.\nRetained loans:\nLoans that are held-for-investment (i.e., excludes loans held-for-sale and loans at fair value).\nRevenue wallet:\n Proportion of fee revenue based on estimates of investment banking fees generated across the industry (i.e., the revenue wallet) from investment banking transactions in M&A, equity and debt underwriting, and loan syndications. Source: Dealogic, a third-party provider of investment banking competitive analysis and volume-based league tables for the above noted industry products.\nRHS:\n Rural Housing Service of the U.S. Department of Agriculture\nROA:\n Return on assets\nROE:\nReturn on equity\nROTCE:\nReturn on tangible common equity\nROU assets:\n Right-of-use assets\nRSU(s):\nRestricted stock units\nRWA \u201cRisk-weighted assets\u201d:\n Basel III establishes two comprehensive approaches for calculating RWA (a Standardized approach and an Advanced approach) which include capital requirements for credit risk, market risk, and in the case of Advanced, also operational risk. Key differences in the calculation of credit risk RWA between the Standardized and Advanced approaches are that for Advanced, credit risk RWA is based on risk-sensitive approaches which largely rely on the use of internal credit models and parameters, whereas for Standardized, credit risk RWA is generally based on supervisory risk-weightings which vary primarily by counterparty type and asset class. Market risk RWA is calculated on a generally consistent basis between Standardized and Advanced.\nS&P:\n Standard and Poor\u2019s\nSAR as it pertains to Hong Kong:\n Special Administrative Region\nSAR(s) as it pertains to employee stock awards:\n Stock appreciation rights\nSCB:\n Stress capital buffer\nScored portfolios:\n Consumer loan portfolios that predominantly include residential real estate loans, credit card loans, auto loans to individuals and certain small business loans.\nSEC:\n U.S. Securities and Exchange Commission\nSecurities financing agreements:\nInclude resale, repurchase, securities borrowed and securities loaned agreements.\nSecuritized Products Group:\nComprised of Securitized Products and tax-oriented investments.\nSeed capital:\nInitial JPMorgan capital invested in products, such as mutual funds, with the intention of ensuring the fund is of sufficient size to represent a viable offering to clients, enabling pricing of its shares, and allowing the manager to develop a track record. After these goals are achieved, the intent is to remove the Firm\u2019s capital from the investment.\nShelf securities:\nSecurities registered with the SEC under a shelf registration statement that have not been issued, offered or sold. These securities are not included in league tables until they have actually been issued.\nSingle-name:\nSingle reference-entities\nSLR:\nSupplementary leverage ratio\nSMBS:\n Stripped mortgage-backed securities\nSOFR:\n Secured Overnight Financing Rate\nSPEs:\nSpecial purpose entities\nStock Plan Administration:\n Relates to an equity plan administration business which was acquired in 2022 with the Firm\u2019s purchase of Global Shares.\nStructural interest rate risk:\n Represents interest rate risk of the non-trading assets and liabilities of the Firm.\nStructured notes:\n Structured notes are financial instruments whose cash flows are linked to the movement in one or more indexes, interest rates, foreign exchange rates, commodities prices, prepayment rates, underlying reference pool of loans or other market variables. The notes typically contain embedded (but not separable or detachable) derivatives. Contractual cash flows for principal, interest, or both can vary in amount and timing throughout the life of the note based on non-traditional indexes or non-traditional uses of traditional interest rates or indexes.\nSuspended foreclosures:\nLoans referred to foreclosure where formal foreclosure proceedings have started but are currently on hold, which could be due to bankruptcy or loss mitigation. Includes both judicial and non-judicial states.\nTaxable-equivalent basis:\nIn presenting results on a managed basis, the total net revenue for each of the reportable business segments and Corporate, and the Firm as a whole, is presented on a tax-equivalent basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in managed basis results on a level comparable to taxable investments and securities; the corresponding income tax impact related to tax-exempt items is recorded within income tax expense.\n326\nJPMorgan Chase & Co./2025 Form 10-K\nGlossary of Terms and Acronyms\nTBVPS:\nTangible book value per share\nTCE:\nTangible common equity\nTLAC:\nTotal Loss Absorbing Capacity\nU.K.:\n United Kingdom\nUnaudited:\n Financial statements and/or information that have not been subject to auditing procedures by an independent registered public accounting firm.\nU.S.:\n United States of America\nU.S. GAAP:\nAccounting principles generally accepted in the U.S.\nU.S. government agencies:\nU.S. government agencies include, but are not limited to, agencies such as Ginnie Mae and FHA, and do not include Fannie Mae and Freddie Mac which are U.S. government-sponsored enterprises (\u201cU.S. GSEs\u201d). In general, obligations of U.S. government agencies are fully and explicitly guaranteed as to the timely payment of principal and interest by the full faith and credit of the U.S. government in the event of a default.\nU.S. GSE(s):\n \u201cU.S. government-sponsored enterprises\u201d are quasi-governmental, privately-held entities established or chartered by the U.S. government to serve public purposes as specified by the U.S. Congress to improve the flow of credit to specific sectors of the economy and provide certain essential services to the public. U.S. GSEs include Fannie Mae and Freddie Mac, but do not include Ginnie Mae or FHA. U.S. GSE obligations are not explicitly guaranteed as to the timely payment of principal and interest by the full faith and credit of the U.S. government.\nU.S. Treasury:\nU.S. Department of the Treasury\nVA:\nU.S. Department of Veterans Affairs\nVaR \u201cValue-at-risk\u201d\nis a measure of the dollar amount of potential loss from adverse market moves in an ordinary market environment.\nVCG:\n Valuation Control Group\nVGF:\nValuation Governance Forum\nVIEs:\nVariable interest entities\nWarehouse loans:\nConsist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as loans.\nWeighted-average macroeconomic outlook:\n Refers to the forecast of macroeconomic conditions used by the Firm in its models to estimate credit losses which reflects the weighted average results of the five internally-developed macroeconomic scenarios over an eight-quarter forecast period and incorporates macroeconomic variables and any qualitative adjustments (such as changes in the weight placed on an upside or adverse scenario).\nJPMorgan Chase & Co./2025 Form 10-K\n327\nSignatures\nPursuant to the requirements of Section\u00a013 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf of the undersigned, thereunto duly authorized.\n\nJPMorgan Chase & Co.\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0(Registrant)\n\nBy: /s/ JAMES DIMON\n\n(James Dimon\nChairman and\u00a0Chief Executive Officer)\nFebruary 13, 2026\nPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacity and on the date indicated. JPMorgan Chase & Co. does not exercise the power of attorney to sign on behalf of any Director.\n\nCapacity\nDate\n/s/ JAMES DIMON\nDirector, Chairman and Chief Executive Officer\n(Principal Executive Officer)\n\n(James Dimon)\n\n/s/ LINDA B. BAMMANN\nDirector\n(Linda B. Bammann)\n/s/ MICHELE G. BUCK\nDirector\n(Michele G. Buck)\n/s/ STEPHEN B. BURKE\nDirector\n(Stephen B. Burke)\n/s/ ALICIA BOLER DAVIS\nDirector\n(Alicia Boler Davis)\n/s/ ALEX GORSKY\nDirector\nFebruary 13, 2026\n(Alex Gorsky)\n/s/ MELLODY HOBSON\nDirector\n(Mellody Hobson)\n\n/s/ PHEBE N. NOVAKOVIC\nDirector\n(Phebe N. Novakovic)\n/s/ VIRGINIA M. ROMETTY\nDirector\n(Virginia M. Rometty)\n/s/ BRAD D. SMITH\nDirector\n(Brad D. Smith)\n/s/ MARK A. WEINBERGER\nDirector\n(Mark A. Weinberger)\n/s/ JEREMY BARNUM\nExecutive Vice President and Chief Financial Officer\n(Jeremy Barnum)\n(Principal Financial Officer)\n/s/ ELENA KORABLINA\nManaging Director and Firmwide Controller\n(Elena Korablina)\n(Principal Accounting Officer)\n328\nJPMorgan Chase & Co./2025 Form 10-K\n", "ground_truth": {"cover": {"company_name": "JPMORGAN CHASE & CO", "cik": "0000019617", "ticker": "JPM", "form_type": "10-K", "fiscal_year_end": "2025-12-31", "filing_date": "2026-02-13"}, "financials": {"currency": "USD", "fiscal_year": 2025, "revenue": 182447000000.0, "net_income": 57048000000.0, "eps_basic": 20.05, "eps_diluted": 20.02, "cash_and_equivalents": 343338000000.0, "total_assets": 4424900000000.0, "total_equity": 362438000000.0, "total_debt": 2624096000000.0, "operating_cash_flow": -147782000000.0}, "top_risk_factors": []}}
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STATES SECURITIES AND EXCHANGE COMMISSION\nWashington, D.C. 20549\nFORM\n10-K\n\n(Mark One)\n\u2612\nANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE\u00a0ACT OF 1934\nFor the fiscal year ended\nDecember\u00a031\n, 2025\n\n\u2610\nTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\nFor the transition period from\n\nto\nCommission file number\n1-3619\n\nPFIZER INC\n.\n(Exact name of registrant as specified in its charter)\nDelaware\n13-5315170\n(State or other jurisdiction of incorporation or organization)\n(I.R.S. Employer Identification Number)\n66 Hudson Boulevard East\n,\nNew York\n,\nNew York\n\n10001-2192\n\n(Address of principal executive offices)  (zip code)\n(\n212\n)\n733-2323\n\n(Registrant\u2019s telephone number, including area code)\nSecurities registered pursuant to Section\u00a012(b) of the Act:\nTitle of each class\nTrading Symbol(s)\nName\u00a0of\u00a0each\u00a0exchange on which registered\nCommon Stock, $0.05 par value\nPFE\nNew York Stock Exchange\n1.000% Notes due 2027\nPFE/27\nNew York Stock Exchange\n2.875% Notes due 2029\nPFE/29\nNew York Stock Exchange\n3.250% Notes due 2032\nPFE/32\nNew York Stock Exchange\n3.875% Notes due 2037\nPFE/37A\nNew York Stock Exchange\n4.250% Notes due 2045\nPFE/45\nNew York Stock Exchange\nSecurities registered pursuant to Section\u00a012(g) of the Act:\nNone\nIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.\nYes\n\n\u2612\n\u00a0\u00a0\u00a0\u00a0No\n\u2610\nIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.\u00a0\u00a0\u00a0Yes\n\u2610\n\nNo\n\n\u2612\nIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.\nYes\n\n\u2612\n\nNo\n\u2610\nIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (\u00a7232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)\nYes\n\n\u2612\n\u00a0\u00a0\u00a0No\n\u2610\nIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of \u201clarge accelerated filer,\u201d \u201caccelerated filer\u201d, \u201csmaller reporting company\u201d and \u201cemerging growth company\u201d in Rule 12b-2 of the Exchange Act.\nLarge Accelerated filer\n\n\u2612\n\n\u00a0Accelerated filer\n\n\u2610\n\nNon-accelerated filer\n\n\u2610\n\nSmaller reporting company\n\n\u2610\n\nEmerging growth company\n\u2610\n\nIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.\u00a0   \u2610\nIndicate by check mark whether the registrant has filed a report on and attestation to its management\u2019s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.\n\n\u2612\nIf securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.\n\u2610\nIndicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant\u2019s executive officers during the relevant recovery period pursuant to \u00a7240.10D-1(b).     \u2610\nIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).\u00a0\u00a0\u00a0\u00a0Yes\u00a0\u00a0\u2610\u00a0\u00a0\u00a0\u00a0No\n\u2612\nThe aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the closing price as of the last business day of the registrant\u2019s most recently completed second fiscal quarter was approximately $\n138\n billion. This excludes shares of common stock held by directors and executive officers. Exclusion of shares held by any person should not be construed to indicate that such person possesses the power, directly or indirectly, to direct or cause the direction of the management or policies of the registrant, or that such person is controlled by or under common control with the registrant. The registrant has no non-voting common stock.\nThe number of shares outstanding of the registrant\u2019s common stock as of February\u00a019, 2026 was\n5,686,267,431\n shares of common stock, all of one class.\nDOCUMENTS INCORPORATED BY REFERENCE\nPortions of the Proxy Statement for the 2026 Annual Meeting of Shareholders\nPart III\nTABLE OF CONTENTS\n\nPage\nDefined Terms\ni\nAvailable Information\niii\nForward-Looking Information and Factors that May Affect Future Results\n1\nPART I\n3\nITEM\u00a01. BUSINESS\n3\nAbout Pfizer\n3\nCommercial Operations\n4\nResearch and Development\n5\nCollaboration and Co-Promotion Agreements\n6\nInternational Operations\n7\nSales and Marketing\n7\nPatents and Other Intellectual Property Rights\n7\nCompetition\n9\nPricing Pressures and Managed Care Organizations\n10\nRaw Materials\n11\nGovernment Regulation and Price Constraints\n11\nEnvironmental Matters\n14\nOur People\n15\nITEM\u00a01A. RISK FACTORS\n16\nITEM\u00a01B. UNRESOLVED STAFF COMMENTS\nN/A\nITEM 1C. CYBERSECURITY\n26\nITEM\u00a02. PROPERTIES\n27\nITEM\u00a03. LEGAL PROCEEDINGS\n27\nITEM\u00a04. MINE SAFETY DISCLOSURES\nN/A\nINFORMATION ABOUT OUR EXECUTIVE OFFICERS\n27\nPART II\n29\nITEM\u00a0 5. MARKET FOR THE COMPANY\u2019S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES\n29\nITEM\u00a06. [RESERVED]\n29\nITEM 7. MANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\n30\nITEM\u00a07A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK\n49\nITEM\u00a08. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\n50\nITEM\u00a09. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE\n103\nITEM\u00a09A. CONTROLS AND PROCEDURES\n104\nITEM\u00a09B. OTHER INFORMATION\n107\nITEM\u00a09C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS\nN/A\nPART III\n107\nITEM\u00a010. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE\n107\nITEM\u00a011. EXECUTIVE COMPENSATION\n107\nITEM\u00a012. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS\n107\nITEM\u00a013. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE\n107\nITEM\u00a014. PRINCIPAL ACCOUNTING FEES AND SERVICES\n107\nPART IV\n107\nITEM\u00a015. EXHIBITS, FINANCIAL STATEMENT SCHEDULES\n107\n15(a)(1) Financial Statements\n107\n15(a)(2) Financial Statement Schedules\n108\n15(a)(3) Exhibits\n108\nITEM 16. FORM 10-K SUMMARY\n111\nSIGNATURES\n111\nN/A = Not Applicable\nDEFINED TERMS\nUnless the context requires otherwise, references to \u201cPfizer,\u201d \u201cthe Company,\u201d \u201cwe,\u201d \u201cus\u201d or \u201cour\u201d in this Form 10-K (defined below) refer to Pfizer Inc. and its subsidiaries. For each year presented, Pfizer\u2019s fiscal year-end for subsidiaries operating outside the U.S. is as of and for the year ended November\u00a030 and for U.S. subsidiaries is as of and for the year ended December 31. References to \u201cNotes\u201d in this Form 10-K are to the Notes to the consolidated financial statements in\nItem 8. Financial Statements and Supplementary Data\n in this Form 10-K. We also have used several other terms in this Form 10-K, most of which are explained or defined below:\n*\nIndicates calculation not meaningful or results are greater than 100%\nForm 10-K\nThis Annual Report on Form 10-K for the fiscal year ended December 31, 2025\n2024 Form 10-K\nOur Annual Report on Form 10-K for the fiscal year ended December 31, 2024\n340B Program\n340B Drug Pricing Program\n3SBio\n3SBio, Inc. and its subsidiaries Shenyang Sunshine Pharmaceutical Co., Ltd. and 3S Guojian Pharmaceutical (Shanghai) Co., Ltd.\nProxy Statement\nProxy Statement for the 2026 Annual Meeting of Shareholders, which will be filed no later than 120 days after December 31, 2025\nAbbVie\nAbbVie Inc.\nAbingworth\nAbingworth LLP\nABO\nAccumulated benefit obligation; represents the present value of the benefit obligation earned through the end of the year but does not factor in future compensation increases\nACIP\nAdvisory Committee on Immunization Practices\nADC\nAntibody-Drug Conjugate\nAI\nartificial intelligence\nAlexion\nAlexion Pharma International Operations Limited, a subsidiary of AstraZeneca PLC\nALK\nanaplastic lymphoma kinase\nAlliance revenues\nRevenues from alliance agreements under which we co-promote products discovered or developed by other companies or us\nArvinas\nArvinas, Inc.\nAstellas\nAstellas Pharma Inc., Astellas US LLC and Astellas Pharma US, Inc.\nATTR-CM\ntransthyretin amyloid cardiomyopathy\nBioNTech\nBioNTech SE\nBiopharma\nGlobal Biopharmaceuticals Business\nBlackstone\nBlackstone Life Sciences\nBLA\nBiologics License Application\nBMS\nBristol-Myers Squibb Company\nBOD\nBoard of Directors\nCDC\nU.S. Centers for Disease Control and Prevention\ncGMP\ncurrent Good Manufacturing Practices\nCMMI\nCenter for Medicare and Medicaid Innovation\nCMS\nCenters for Medicare & Medicaid Services\nCODM\nChief Operating Decision Maker\nComirnaty\nUnless otherwise noted, refers to, as applicable, the current formulation of Comirnaty (COVID-19 Vaccine, mRNA) 2025-2026 Formula as well as all prior authorized or approved formulations of the vaccine, which was first authorized in the U.S. during December 2020 pursuant to an EUA\nCOVID-19\nnovel coronavirus disease of 2019\nDEA\nU.S. Drug Enforcement Agency\nDeveloped Markets\nIncludes, but is not limited to, the following markets: Western Europe, Japan, Central Europe, Canada, Scandinavian countries, Australia, certain Eastern European countries, South Korea, Finland and New Zealand\nDMD\nDuchenne muscular dystrophy\nEC\nEuropean Commission\nEMA\nEuropean Medicines Agency\nEmerging Markets\nIncludes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, Eastern Europe (excluding the Balkans and certain other countries), Africa, the Middle East and Turkey\nEPS\nearnings per share\nEU\nEuropean Union\nEUA\nemergency use authorization\nExchange Act\nSecurities Exchange Act of 1934, as amended\nFASB\nFinancial Accounting Standards Board\nFCPA\nU.S. Foreign Corrupt Practices Act\nFDA\nU.S. Food and Drug Administration\nFFDCA\nU.S. Federal Food, Drug and Cosmetic Act\nGAAP\nU.S. Generally Accepted Accounting Principles\nGDFV\ngrant-date fair value\nPfizer Inc.\n2025 Form 10-K\ni\nGenmab\nGenmab A/S\nGILTI (NCTI)\nGlobal Intangible Low-Taxed Income (renamed Net Controlled Foreign Corporation (CFC) Tested Income (NCTI) for taxable years starting after December 31, 2025)\nGSK\nGSK plc\nHaleon\nHaleon plc\nHHS\nU.S. Department of Health and Human Services\nHIPAA\nHealth Insurance Portability and Accountability Act of 1996\nHospira\nHospira, Inc.\nHRR\nhomologous recombination repair\nIPR&D\nin-process research and development\nIRA\nInflation Reduction Act of 2022\nIRC\nInternal Revenue Code\nIRS\nU.S. Internal Revenue Service\nIT\ninformation technology\nJV\njoint venture\nKing\nKing Pharmaceuticals LLC (formerly King Pharmaceuticals, Inc.)\nmCC\nmetastatic cervical cancer\nMCO\nmanaged care organization\nmCRC\nmetastatic colorectal cancer\nmCRPC\nmetastatic castration-resistant prostate cancer\nmCSPC\nmetastatic castration-sensitive prostate cancer\nMD&A\nManagement\u2019s Discussion and Analysis of Financial Condition and Results of Operations\nMDL\nMulti-District Litigation\nMDPNP\nMedicare Drug Price Negotiation Program\nMDRP\nMedicaid Drug Rebate Program\nMedicare Part B\na medical insurance plan that helps cover medically necessary services, outpatient care, and preventative services for people with Medicare\nMedicare Part D\na prescription drug coverage program for people with Medicare\nMeridian\nMeridian Medical Technologies, Inc.\nMetsera\nMetsera, Inc.\nMoody\u2019s\nMoody\u2019s Ratings (formerly Moody\u2019s Investors Service)\nmRNA\nmessenger ribonucleic acid\nMSA\nManufacturing Supply Agreement\nMylan\nMylan N.V.\nNAV\nnet asset value\nNDA\nNew Drug Application\nNimbus\nNimbus Therapeutics, LLC\nnmCRPC\nnon-metastatic castration-resistant prostate cancer\nnmCSPC\nnon-metastatic castration-sensitive prostate cancer\nNSCLC\nnon-small cell lung cancer\nNYSE\nNew York Stock Exchange\nOBBBA\nOne Big Beautiful Bill Act\nODT\noral disintegrating tablet\nOno\nOno Pharmaceutical Co., Ltd.\nOTC\nover-the-counter\nPaxlovid\n(a)\nan oral COVID-19 treatment (nirmatrelvir tablets and ritonavir tablets)\nPBM\npharmacy benefit manager\nPBO\nProjected benefit obligation; represents the present value of the benefit obligation earned through the end of the year and factors in future compensation increases\nPC1\nPfizer CentreOne\nPGS\nPfizer Global Supply\nPharmacia\nPharmacia LLC (formerly Pharmacia Corporation)\nPIE\nPfizer Investment Enterprises Pte. Ltd. (a wholly-owned finance subsidiary of Pfizer)\nPP&E\nProperty, plant and equipment\nPierre Fabre\nPierre Fabre Medicament SAS\nPNIF\nPfizer Netherlands International Finance B.V. (a wholly-owned finance subsidiary of Pfizer)\nPRAC\nPharmacovigilance Risk Assessment Committee\nPrevnar family\nIncludes Prevnar 20/Prevenar 20 (pediatric and adult) and Prevnar 13/Prevenar 13 (pediatric and adult)\nPsA\npsoriatic arthritis\nPfizer Inc.\n2025 Form 10-K\nii\nQCE\nquality consistency evaluation\nRA\nrheumatoid arthritis\nR&D\nresearch and development\nROU\nright of use\nRSV\nrespiratory syncytial virus\nS&P\nS&P Global (formerly Standard & Poor\u2019s)\nSCD\nsickle cell disease\nSeagen\nSeagen Inc. and its subsidiaries\nSEC\nU.S. Securities and Exchange Commission\nSI&A\nSelling, informational and administrative expenses\nSNS\nStrategic National Stockpile\nSMPS\nSumitomo Pharma Switzerland GMBH\nTakeda\nTakeda Pharmaceutical Company Limited\nTax Cuts and Jobs Act or TCJA\nLegislation commonly referred to as the U.S. Tax Cuts and Jobs Act of 2017\nTSAs\ntransition service arrangements\nUC\nulcerative colitis\nU.K.\nUnited Kingdom\nUpjohn Business\nPfizer\u2019s former global, primarily off-patent branded and generics business, which included a portfolio of 20 globally recognized solid oral dose brands, including Lipitor, Lyrica, Norvasc, Celebrex and Viagra, as well as a U.S.-based generics platform, Greenstone, that was spun-off on November 16, 2020 and combined with Mylan to create Viatris\nU.S.\nUnited States\nVBP\nvolume-based procurement\nViatris\nViatris Inc.\nViiV\nViiV Healthcare Limited\nVyndaqel family\nIncludes Vyndaqel, Vyndamax and Vynmac\nWHO\nWorld Health Organization\nWTO\nWorld Trade Organization\nWyeth\nWyeth LLC (formerly Wyeth)\nYaoPharma\nYaoPharma Co., Ltd.\n(a)\nPaxlovid has not been approved, but has been authorized for emergency use by the FDA under an EUA for the treatment of mild-to-moderate COVID-19 in pediatric patients (12 years of age and older weighing at least 40 kg) who are at high risk for progression to severe COVID-19, including hospitalization or death. The emergency use of Paxlovid is only authorized for the duration of the declaration that circumstances exist justifying the authorization of emergency use of the medical product during the COVID-19 pandemic under Section 564(b)(1) of the U.S. Federal Food, Drug and Cosmetics Act, 21 U.S.C. \u00a7 360bbb-3(b)(1) unless the declaration is terminated or authorization revoked sooner. Please see the EUA Fact Sheet at\nwww.covid19oralrx.com\n.\nThis Form 10-K includes discussion of certain clinical studies relating to various in-line products and/or product candidates. These studies typically are part of a larger body of clinical data relating to such products or product candidates, and the discussion herein should be considered in the context of the larger body of data. In addition, clinical trial data are subject to differing interpretations, and, even when we view data as sufficient to support the safety and/or efficacy of a product candidate or a new indication for an in-line product, regulatory authorities may not share our views and may require additional data or may deny approval altogether.\nSome amounts in this Form 10-K may not add due to rounding. All percentages have been calculated using unrounded amounts. All trademarks mentioned are the property of their owners.\nAVAILABLE INFORMATION\nOur website is\nwww.pfizer.com\n. This Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and our proxy statements, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are, or will be, available (free of charge) on our website, in text format and, where applicable, in interactive data file format\n,\n as soon as reasonably practicable after we electronically file this material with, or furnish it to, the SEC.\nThroughout this Form 10-K, we \u201cincorporate by reference\u201d certain information from other documents filed or to be filed with the SEC, including our Proxy Statement. Please refer to this information. This Form 10-K will be available on our website on or about February 26, 2026. Our Proxy Statement will be available on our website on or about March 12, 2026.\nOur annual Impact Report, which provides disclosures regarding our responsible business practices, is made available on our website. Information in our Impact Report is not incorporated by reference into this Form 10-K.\nWe may use our website as a means of disclosing material information and for complying with our disclosure obligations under Regulation Fair Disclosure promulgated by the SEC. These disclosures are included on our website in the \u201cAbout\u2014Investors\u201d or \u201cNewsroom\u201d sections. Accordingly, investors should monitor these portions of our website, in addition to following our press releases, SEC filings, public conference calls and webcasts, as well as our social media channels (our Facebook page, Instagram account (@Pfizerinc), YouTube page, LinkedIn page, and X (formerly known as Twitter) accounts (@Pfizer and @Pfizer_News)). The information contained on our website, our Facebook, Instagram, YouTube and LinkedIn pages or our X (formerly known as Twitter) accounts, or any third-party website, is not incorporated by reference into this Form 10-K.\nInformation relating to corporate governance at Pfizer, including our Corporate Governance Principles; Director Qualification Standards; Pfizer Policies on Business Conduct (for all of our employees, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting\nPfizer Inc.\n2025 Form 10-K\niii\nOfficer); Code of Business Conduct and Ethics for Members of the Board of Directors; information concerning our Directors; ways to communicate by e-mail with our Directors; information concerning our Board Committees; Committee Charters; Charter of the Lead Independent Director; and transactions in Pfizer securities by Directors and Officers are available on our website. We will provide any of the foregoing information without charge upon written request to our Corporate Secretary, Pfizer Inc., 66 Hudson Boulevard East, New York, NY 10001-2192. We will disclose any future amendments to, or waivers from, provisions of the Pfizer Policies on Business Conduct affecting our Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and executive officers on our website as promptly as practicable, as may be required under applicable SEC and NYSE rules. Information relating to shareholder services, including the Computershare Investment Program, book-entry share ownership and direct deposit of dividends, is also available on our website.\nPfizer Inc.\n2025 Form 10-K\niv\nFORWARD-LOOKING INFORMATION AND FACTORS THAT MAY AFFECT FUTURE RESULTS\nThis Form 10-K contains forward-looking statements. We also provide forward-looking statements in other materials we release to the public, as well as public oral statements. Given their forward-looking nature, these statements involve substantial risks, uncertainties and potentially inaccurate assumptions.\nThese statements may be identified by using words such as \u201cwill,\u201d \u201cmay,\u201d \u201ccould,\u201d \u201clikely,\u201d \u201congoing,\u201d \u201canticipate,\u201d \u201cestimate,\u201d \u201cexpect,\u201d \u201cproject,\u201d \u201cintend,\u201d \u201cplan,\u201d \u201cbelieve,\u201d \u201cassume,\u201d \u201ctarget,\u201d \u201cforecast,\u201d \u201cguidance,\u201d \u201cgoal,\u201d \u201cobjective,\u201d \u201caim,\u201d \u201cseek,\u201d \u201cpotential,\u201d \u201chope\u201d and other words and terms of similar meaning or by using future dates.\nWe include forward-looking information in our discussion of the following, among other topics:\n\u2022\nour anticipated operating and financial performance, including financial guidance and projections;\n\u2022\nreorganizations, business plans, strategy, goals and prospects;\n\u2022\nexpectations for our product pipeline (including products from completed or anticipated acquisitions), in-line products and product candidates, including anticipated regulatory submissions, data read-outs, study starts, approvals, launches, discontinuations, clinical trial results and other developing data; revenue contribution and projections; pricing and reimbursement; market dynamics, including demand, market size and utilization rates; and growth, performance, timing and duration of exclusivity and potential benefits;\n\u2022\nstrategic reviews, leverage and capital allocation objectives, dividends and share repurchases;\n\u2022\nplans for and prospects of our acquisitions, dispositions and other business development activities, and our ability to successfully capitalize on growth opportunities and prospects;\n\u2022\nsales, expenses, interest rates, foreign exchange rates and the outcome of contingencies, such as legal proceedings;\n\u2022\nexpectations regarding the impact of or changes to existing or new government regulations, laws or policies;\n\u2022\nour ability to anticipate and respond to and our expectations regarding the impact of macroeconomic, geopolitical, health and industry trends, pandemics, acts of war and other large-scale crises; and\n\u2022\nmanufacturing and product supply.\nIn particular, forward-looking information in this Form 10-K includes statements relating to specific future actions, performance and effects, including, among others, the expected benefits of the organizational changes to our operations; our anticipated operating and financial performance, as well as our key priorities; our expectations regarding the impact of COVID-19 on our business, operations and financial results; the expected revenue, seasonality of demand and phasing for certain of our products; expected patent terms; the expected impact of patent expiries and generic and biosimilar competition; the expected pricing pressures on our products and the anticipated impact to our business; the expected impact of the IRA Medicare Part D Redesign; the benefits expected from our business development transactions, including, among others, our acquisitions of Metsera and Seagen and our in-licensing agreements with 3SBio and YaoPharma; the availability of raw materials; our efforts to develop plans to help mitigate the impact, and potential impact, of tariffs and pricing dynamics on our business and operations; our anticipated cash flows and liquidity position; the anticipated costs, savings and potential benefits from certain of our initiatives, including our enterprise-wide Realigning Our Cost Base Program and our Manufacturing Optimization Program to reduce our cost of goods sold; our voluntary agreement with the U.S. Government designed to lower drug costs for U.S. patients and to include certain Pfizer products on the TrumpRx.gov platform, Pfizer\u2019s plans to further invest in U.S. manufacturing and potential tariff impacts; our expectations regarding product supply; our greenhouse gas reduction goals and our expectations regarding environmental costs and expenditures; our planned capital spending; our capital allocation framework; expectations regarding our pension plans; and expectations regarding legal proceedings and compliance with existing and anticipated laws and regulations.\nGiven their nature, we cannot assure that any potential outcome expressed in these forward-looking statements will be realized in whole or in part. Actual outcomes may vary materially from past results and those anticipated, estimated, implied or projected. These forward-looking statements may be affected by underlying assumptions that may prove inaccurate or incomplete, or by known or unknown risks and uncertainties, including those described in this section, in the\nItem 1A. Risk Factors\n section or in MD&A.\nTherefore, you are cautioned not to unduly rely on forward-looking statements, which speak only as of the date of this Form 10-K. We undertake no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. You are advised, however, to consult any further disclosures we make on related subjects.\nSome of the factors that could cause actual results to differ are identified below, as well as those discussed in the\nItem 1A. Risk\n Factors\n section and within MD&A. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. The occurrence of any of the risks identified below, in the\nItem 1A. Risk Factors\n section, or within MD&A, or other risks currently unknown, could have a material adverse effect on our business, financial condition or results of operations, or we may be required to increase our accruals for contingencies. It is not possible to predict or identify all such factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties:\nRisks Related to Our Business, Industry and Operations, and Business Development:\n\u2022\nthe outcome of R&D activities, including the ability to meet anticipated pre-clinical or clinical endpoints, commencement and/or completion dates for our pre-clinical or clinical trials, regulatory submission dates, and/or regulatory approval and/or launch dates; the possibility of unfavorable pre-clinical and clinical trial results, including the possibility of unfavorable new pre-clinical or clinical data and further analyses of existing pre-clinical or clinical data; risks associated with preliminary, early stage or interim data; the risk that pre-clinical and clinical trial data are subject to differing interpretations and assessments, including during the peer review/publication process, in the scientific community generally, and by regulatory authorities; whether and when additional data from our pipeline programs will be published in scientific journal publications, and if so, when and with what modifications and interpretations; and uncertainties regarding the future development of our product candidates, including whether or when our product candidates will advance to future studies or phases of development or whether or when regulatory applications may be filed for any of our product candidates, including as a result of clinical trial data or regulatory decisions or feedback that could impact the future development of our product candidates, including our vaccine candidates such as our next generation pneumococcal conjugate vaccine candidate;\n\u2022\nour ability to successfully address comments received from regulatory authorities such as the FDA or the EMA, or obtain approval for new products and indications from regulators on a timely basis or at all;\nPfizer Inc.\n2025 Form 10-K\n1\n\u2022\nregulatory decisions impacting labeling, approval or authorization, including the scope of indicated patient populations, product dosage, manufacturing processes, safety and/or other matters, including decisions relating to developments regarding potential product impurities; uncertainties regarding the ability to obtain or maintain, and the scope of, recommendations by technical or advisory committees, and the timing of, and ability to obtain, pricing/reimbursement, approvals and product launches, all of which could impact the availability or commercial potential of our products and product candidates;\n\u2022\nclaims and concerns that may arise regarding the safety or efficacy of in-line products and product candidates, including claims and concerns that may arise from the conduct or outcome of post-approval clinical trials, pharmacovigilance or Risk Evaluation and Mitigation Strategies,\n\nwhich could impact marketing approval, product labeling, and/or availability or commercial potential;\n\u2022\nthe success and impact of external business development activities, such as the November 2025 acquisition of Metsera, as well as risks and uncertainties related to the ability to identify and execute on potential business development opportunities; the ability to satisfy the conditions to closing of announced transactions in the anticipated time frame or at all, including the possibility that such transactions do not close; the ability to realize the anticipated benefits of any such transactions in the anticipated time frame or at all; the potential need for and impact of additional equity or debt financing to pursue these opportunities, which has in the past and could in the future result in increased leverage and/or a downgrade of our credit ratings and could limit our ability to obtain future financing; challenges integrating the businesses and operations; disruption to business or operations relationships; risks related to achieving or growing revenues for certain acquired or partnered products; significant transaction costs; and unknown liabilities;\n\u2022\ncompetition, including from new product entrants, in-line branded products, generic products, private label products, biosimilars and product candidates that treat or prevent diseases and conditions similar to those treated or intended to be prevented by our in-line products and product candidates;\n\u2022\nthe ability to successfully market both new and existing products, including biosimilars;\n\u2022\ndifficulties or delays in manufacturing, sales or marketing; supply disruptions, shortages or stock-outs at our facilities or third-party facilities that we rely on; and legal or regulatory actions;\n\u2022\nthe impact of public health outbreaks, epidemics or pandemics on our business, operations and financial condition and results, including impacts on our employees, manufacturing, supply chain, sales and marketing, R&D and clinical trials;\n\u2022\nrisks and uncertainties related to Comirnaty and Paxlovid or any potential future COVID-19 vaccines, treatments or combinations, including, among others, the risk that as the market for COVID-19 products remains endemic and seasonal and/or COVID-19 infection rates do not follow prior patterns, demand for our COVID-19 products has and may continue to be reduced or not meet expectations, which has in the past and may continue to lead to reduced revenues, excess inventory or other unanticipated charges; risks related to our ability to develop, receive regulatory approval for, and commercialize variant adapted vaccines, combinations and/or treatments; uncertainties related to recommendations and coverage for, and the public\u2019s adherence to, vaccines, boosters, treatments or combinations, including uncertainties related to the potential impact of narrowing recommended patient populations; whether or when our EUAs or biologics licenses will expire, terminate or be revoked; risks related to our ability to accurately predict or achieve our revenue forecasts for Comirnaty and Paxlovid or any potential future COVID-19 vaccines or treatments; and potential third-party royalties or other claims related to Comirnaty and Paxlovid;\n\u2022\ntrends toward managed care and healthcare cost containment, and our ability to obtain or maintain timely or adequate pricing or favorable formulary placement for our products;\n\u2022\ninterest rate and foreign currency exchange rate fluctuations, including the impact of global trade tensions, as well as currency devaluations and monetary policy actions in countries experiencing high inflation or deflation rates;\n\u2022\nany significant issues involving our largest wholesale distributors or government customers, which account for a substantial portion of our revenues;\n\u2022\nthe impact of the increased presence of counterfeit medicines, vaccines or other products in the pharmaceutical supply chain;\n\u2022\nany significant issues related to the outsourcing of certain operational and staff functions to third parties;\n\u2022\nany significant issues related to our JVs and other third-party business arrangements, including modifications or disputes related to supply agreements or other contracts with customers including governments or other payors;\n\u2022\nuncertainties related to general economic, political, business, industry, regulatory and market conditions including, without limitation, uncertainties related to the impact on us, our customers, suppliers and lenders and counterparties to our foreign-exchange and interest-rate agreements of challenging global economic conditions, such as inflation or interest rate fluctuations, and changes in global financial markets;\n\u2022\nthe exposure of our operations globally to possible capital and exchange controls, economic conditions, expropriation, sanctions, tariffs and/or other restrictive government actions, changes in intellectual property legal protections and remedies, unstable governments and legal systems and inter-governmental disputes;\n\u2022\nrisks and uncertainties related to issued or future executive orders or other new, or changes in, laws, regulations or policy regarding tariffs or other trade or foreign policy and/or the impact of any potential U.S. Governmental shutdowns, including impacts on governmental agencies due to a shutdown;\n\u2022\nthe risk and impact of tariffs on our business, which is subject to a number of factors including, but not limited to, restrictions on trade, the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs or other retaliatory actions imposed by other countries;\n\u2022\nthe impact of disruptions related to climate change and natural disasters;\n\u2022\nany changes in business, political and economic conditions due to actual or threatened terrorist activity, geopolitical instability, political or civil unrest or military action and the resulting economic or other consequences;\n\u2022\nthe impact of product recalls, withdrawals and other unusual items, including uncertainties related to regulator-directed risk evaluations and assessments, such as our ongoing evaluation of our product portfolio for the potential presence or formation of nitrosamines\n,\nand our voluntary withdrawal of all lots of Oxbryta in all markets where it is approved and any regulatory or other impact on Oxbryta and other sickle cell disease assets;\n\u2022\ntrade buying patterns;\n\u2022\nthe risk of an impairment charge related to our intangible assets, goodwill or equity-method investments;\nPfizer Inc.\n2025 Form 10-K\n2\n\u2022\nthe impact of, and risks and uncertainties related to, restructurings and internal reorganizations, as well as any other corporate strategic initiatives and growth strategies, and cost-reduction and productivity initiatives, including any potential future phases, each of which requires upfront costs but may fail to yield anticipated benefits and may result in unexpected costs, organizational disruption, adverse effects on employee morale, retention issues or other unintended consequences;\n\u2022\nthe ability to successfully achieve our climate-related goals and progress our environmental and other sustainability priorities;\nRisks Related to Government Regulation and Legal Proceedings\n:\n\u2022\nthe impact of any U.S. healthcare reform or legislation, including executive orders or other change in laws, regulations or policy, or any significant spending reduction or cost control efforts affecting Medicare, Medicaid, the 340B Program or other publicly funded or subsidized health programs, including the IRA and the IRA Medicare Part D Redesign, government cuts to Affordable Care Act (ACA) subsidies, or changes in the tax treatment of employer-sponsored health insurance that may be implemented;\n\u2022\nrisks and uncertainties related to the impact of Pfizer\u2019s voluntary agreement with the U.S. Government designed to lower drug costs for U.S. patients and to include certain Pfizer products on the TrumpRx.gov platform, Pfizer\u2019s plans to further invest in U.S. manufacturing and potential tariff impacts, including risks relating to entering into binding final agreements with the U.S. Government;\n\u2022\nU.S. federal or state legislation or regulatory action and/or policy efforts affecting, among other things, pharmaceutical product pricing, including international reference pricing (including Most-Favored-Nation drug pricing), intellectual property, product approval processes and pathways, reimbursement or access to or recommendations for our medicines and vaccines, tax changes or other restrictions on U.S. direct-to-consumer advertising; limitations on interactions with healthcare professionals and other industry stakeholders; as well as pricing pressures for our products as a result of highly competitive biopharmaceutical markets;\n\u2022\nrisks and uncertainties related to changes to vaccine or other healthcare policy in the U.S., including: (i) risks and uncertainties relating to the evolving vaccine landscape; and (ii) the FDA's recently adopted policy of disclosing Complete Response Letters for unapproved drug candidates and the attendant risk of disclosure of trade secrets or confidential commercial information;\n\u2022\nlegislation or regulatory action and/or policy efforts in markets outside of the U.S., such as China or Europe, including, without limitation, laws related to pharmaceutical product pricing, intellectual property, medical regulation, environmental protections, data protection and cybersecurity, reimbursement or access, including, in particular, continued government-mandated reductions in prices and access restrictions for certain products to control costs in those markets;\n\u2022\nlegal defense costs, insurance expenses, settlement costs and contingencies, including without limitation, those related to legal proceedings and actual or alleged environmental contamination;\n\u2022\nthe risk and impact of an adverse decision or settlement and risk related to the adequacy of reserves related to legal proceedings;\n\u2022\nthe risk and impact of tax related litigation and investigations;\n\u2022\ngovernmental laws, regulations and policies affecting our operations, including, without limitation, the IRA, as well as changes in such laws, regulations or policies, or their interpretation, including, among others, new or changes in tariffs, tax laws and regulations internationally and in the U.S., including the OBBBA, which was enacted on July 4, 2025, and is still subject to further guidance; the adoption of global minimum taxation requirements outside the U.S. generally effective in most jurisdictions since January 1, 2024, government cost-cutting measures and related impacts on, among other matters, government staffing, resources and ability to timely review and process regulatory or other submissions; restrictions related to certain data transfers, including data security, data localization and cross border data transfer regulations, and transactions involving certain countries; and potential changes to existing tax laws, tariffs, or changes to other laws, regulations or policies in the U.S., including by the U.S. Presidential administration and Congress, as well as in other countries;\nRisks Related to Intellectual Property, Technology and Cybersecurity:\n\u2022\nthe risk that our currently pending or future patent applications may not be granted on a timely basis or at all, or any patent-term extensions that we seek may not be granted on a timely basis, if at all;\n\u2022\nrisks to our products, patents and other intellectual property, such as: (i) claims of invalidity that could result in loss of patent coverage; (ii) claims of patent infringement, including asserted and/or unasserted intellectual property claims; (iii) claims we may assert against intellectual property rights held by third parties; (iv) challenges faced by our collaboration or licensing partners to the validity of their patent rights; or (v) any pressure from, or legal or regulatory action by, various stakeholders or governments that could potentially result in us not seeking intellectual property protection or agreeing not to enforce or being restricted from enforcing intellectual property rights related to our products;\n\u2022\nany significant breakdown or interruption of our IT systems and infrastructure (including cloud services);\n\u2022\nany business disruption, theft of confidential or proprietary information, security threats on facilities or infrastructure, extortion or integrity compromise resulting from a cyber-attack, which may include those using adversarial AI techniques, or other malfeasance by, but not limited to, nation states, employees, business partners or others; and\n\u2022\nrisks and challenges related to the use of software, systems and services that include AI-based functionality and other emerging technologies.\nPART I\nITEM\u00a01.\nBUSINESS\nABOUT PFIZER\nPfizer Inc. is a research-based, global biopharmaceutical company. We apply science and our global resources to bring therapies to people that extend and significantly improve their lives through the discovery, development, manufacture, marketing, sale and distribution of\nPfizer Inc.\n2025 Form 10-K\n3\nbiopharmaceutical products worldwide. We work across developed and emerging markets to advance wellness, prevention, treatments and cures that challenge the most feared diseases of our time. We collaborate with healthcare providers, governments and local communities to support and expand access to reliable, affordable healthcare around the world. The Company was incorporated under the laws of the State of Delaware on June 2, 1942.\nMost of our revenues come from the manufacture and sale of biopharmaceutical products. We believe that our medicines and vaccines provide significant value for healthcare providers and patients through improved treatment of diseases and improvements in health, wellness and productivity as well as by reducing other healthcare costs, such as emergency room visits or hospitalizations. We seek to enhance the value of our medicines and vaccines and actively engage in dialogues about how we can best work with patients, physicians and payors to prevent and treat disease and improve outcomes. We seek to maximize patient access and evaluate our pricing arrangements and contracting methods with payors to minimize adverse impact on our revenues within the current legal and pricing structures.\nWe are committed to fulfilling our purpose:\nBreakthroughs that change patients\u2019 lives\n. Our purpose fuels everything we do and reflects both our passion for science and our commitment to patients. As a science-driven global biopharmaceutical company, we remain focused on advancing our product pipeline, supporting our marketed brands and deploying capital responsibly, with a focus on initiatives that can help contribute to our long-term revenue and future growth.\nOur 2026 key priorities are:\n1.\nMaximize value of key transactions\n2.\nDeliver on critical R&D milestones\n3.\nInvest to maximize post-2028 growth\n4.\nScale AI across our business.\nWe are committed to strategically capitalizing on growth opportunities, primarily by advancing our own product pipeline and maximizing the value of our existing products, but also through various business development activities. We view our business development activity as an enabler of our strategies and seek to generate growth by pursuing opportunities and transactions that have the potential to strengthen our business and our capabilities. We assess our business, assets and scientific capabilities/portfolio as part of our regular, ongoing portfolio review process and also continue to consider business development activities that will help advance our business strategy.\nFor a discussion of our strategy and our business development initiatives, including our acquisitions of Metsera in November 2025 and Seagen in December 2023 and our in-licensing agreements with YaoPharma and 3SBio entered into in 2025 in the obesity and cardiometabolic diseases and oncology therapeutic areas, see the\nOverview of Our Performance, Operating Environment, Strategy and Outlook\n\nsection within MD&A and\nNote 2\n. In addition, we are scaling AI across R&D, manufacturing, commercial and patient engagement to improve productivity and accelerate innovation.\nCOMMERCIAL OPERATIONS\nWe manage our commercial operations through a global structure consisting of three operating segments, each led by a single manager: Biopharma, PC1 and Pfizer Ignite. Biopharma, our innovative science-based biopharmaceutical business, is engaged in the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide. PC1 is our contract development and manufacturing organization and a leading supplier of specialty active pharmaceutical ingredients. Pfizer Ignite is an offering that provides strategic guidance and end-to-end R&D services to select innovative biotech companies that align with our R&D focus areas. In 2025, Pfizer made the decision to discontinue Pfizer Ignite and we are winding down this business while collaborating closely with our Ignite partners to ensure continuity and the successful transition of work. Biopharma is the only reportable segment.\nWithin our Biopharma reportable segment, our commercial divisions market, sell and distribute our products, and global operating functions are responsible for the research, development, manufacturing and supply of our products.\nThe commercial structure within our Biopharma reportable segment in 2025 was composed of the Pfizer U.S. Commercial Division,\nwhich focused on the commercialization of Pfizer\u2019s entire product portfolio in the U.S.,\nand the Pfizer International Commercial Division,\nwhich focused on the commercialization of Pfizer\u2019s entire product portfolio in all international markets.\nAs part of our continued focus on commercial execution, at the beginning of 2026, we made changes in our commercial structure, which included the transition of certain off-patent branded and generic sterile injectables and biosimilars from the Specialty Care and Oncology product portfolios to a new Global Hospital and Biosimilars organization within our Biopharma reportable segment. Effective January 1, 2026, the commercial structure within our Biopharma reportable segment is as follows:\nDivision\nDescription\nPfizer U.S. Commercial\nIncludes the U.S. commercial organization covering Pfizer\u2019s entire product portfolio except for the Global Hospital and Biosimilars organization, as well as the Global Access & Value, Global Chief Marketing Office and Primary Care and Specialty Care U.S. Medical Affairs organizations.\nPfizer International Commercial\nIncludes the ex-U.S. commercial and medical affairs organizations covering Pfizer\u2019s entire product portfolio in all international markets except for the Global Hospital and Biosimilars organization in certain international markets.\nGlobal Hospital and Biosimilars\nIncludes the commercial organization covering Pfizer\u2019s product portfolio of off-patent branded and generic sterile injectables and biosimilars except in China, Hong Kong and certain other international markets.\nCustomer groups and select products within the Biopharma product portfolio in 2026 include:\n\u2022\nPrimary Care:\n\u25e6\nInternal medicine product portfolio including in cardiovascular metabolic diseases \u2013 select products include: Eliquis, as well as other brands that have experienced patent-based expirations or loss of regulatory exclusivity.\n\u25e6\nMigraine product portfolio: Nurtec ODT/Vydura and Zavzpret.\n\u25e6\nVaccines\n\nproduct portfolio across all ages \u2013 select products include: the Prevnar family, Comirnaty, Abrysvo, FSME/IMMUN-TicoVac, Nimenrix and Trumenba.\n\u25e6\nTreatment for COVID-19: Paxlovid.\nPfizer Inc.\n2025 Form 10-K\n4\n\u2022\nSpecialty Care:\n\u25e6\nInflammation & immunology product portfolio \u2013 select products include: Xeljanz, Enbrel (outside the U.S. and Canada), Cibinqo, Litfulo, Eucrisa and Velsipity.\n\u25e6\nRare disease product portfolio for a number of therapeutic areas with rare diseases, including amyloidosis, hemophilia and endocrine diseases \u2013 select products include: the Vyndaqel family, Genotropin, BeneFIX, Xyntha, Somavert, Ngenla and Hympavzi.\n\u25e6\nCertain anti-infective and immunoglobulin medicines \u2013 select products include: Zavicefta (outside the U.S. and Canada), Octagam and Panzyga.\n\u2022\nOncology:\n\u25e6\nInnovative oncology product portfolio of ADCs, small molecules, bispecifics and other immunotherapies that treat a wide range of cancers including certain types of breast cancer, genitourinary cancer and hematologic malignancies, as well as certain types of melanoma, gastrointestinal, gynecological and lung cancer \u2013 select products include:\n\nIbrance, Xtandi, Padcev, Adcetris, Inlyta, Lorbrena, Bosulif, Tukysa, Braftovi, Mektovi, Orgovyx, Elrexfio, Tivdak and Talzenna.\n\u2022\nHospital and Biosimilars:\n\n\u25e6\nProduct portfolio of off-patent branded and generic sterile injectables, oncology biosimilars and biosimilars for chronic immune and inflammatory diseases \u2013 select products include\n:\nBiosimilars \u2013 Inflectra, Oncology biosimilars such as Retacrit, Ruxience, Zirabev, Trazimera and Nivestym, and other biosimilars; and Sterile Injectables \u2013 Sulperazon (outside the U.S. and Canada), Atgam, Fragmin, Solu Medrol, Solu Cortef and Bicillin.\nFor additional information on our operating segments and products, including product revenues, see\nNote 17\n,\nand for additional information on the key operational revenue drivers of our business, see the\nAnalysis of the Consolidated Statements of Operations\n section within MD&A. For a discussion of the risks associated with our dependence on certain of our major products, see the\nItem 1A. Risk Factors\u2014Concentration\n section.\nRESEARCH AND DEVELOPMENT\nR&D is at the heart of fulfilling our purpose to deliver breakthroughs that change patients\u2019 lives as we work to translate advanced science and technologies into the medicines and vaccines that may be the most impactful for patients. In addition to discovering and developing new products, our R&D efforts seek to add value to our existing products by improving their safety, efficacy and ease of dosing and by discovering potential new indications.\nOur R&D Priorities and Strategy.\nOur R&D priorities include:\n\u2022\ndelivering a pipeline of highly differentiated medicines and vaccines where we have a unique opportunity to bring the most important new therapies to patients in need;\n\u2022\nadvancing our capabilities that can position us for long-term R&D leadership; and\n\u2022\nadvancing new models for partnerships with creativity, flexibility and urgency to deliver innovation to patients as quickly as possible.\nTo that end, our R&D primarily focuses on our main therapeutic areas, which are oncology, internal medicine (including cardiometabolic, weight management and migraine), vaccines (with a pipeline focus on infectious diseases with significant unmet medical need) and inflammation and immunology.\nWhile a significant portion of our R&D is internal, we also seek promising chemical and biological lead molecules and innovative technologies developed by others to incorporate into our discovery and development processes or projects, as well as our portfolio. We do so by entering into collaboration, alliance and license agreements with universities, biotechnology companies and other firms as well as through acquisitions and investments,\nincluding co-funding agreements with third-parties\n. These arrangements allow us to share knowledge, risk and cost. They also enable us to access external scientific and technological expertise, as well as provide us the opportunity to advance our own products and in-licensed or acquired products. For information on certain of these collaborations, alliances and license arrangements and investments, see\nNote 2\n.\nOur R&D Operations.\n In 2025, we continued to enhance our global R&D operations and pursued strategies to improve R&D productivity and advance a sustainable and value-creating pipeline. We manage our R&D operations for all therapeutic areas in a single R&D organization led by the Chief Scientific Officer and President, Research and Development. This organization is responsible for overseeing all R&D activities with end-to-end responsibilities that span from discovery to late-phase clinical development and post-approval activities, including facilitating regulatory submissions, engaging with health authorities and global medical strategies, as well as U.S. Oncology medical affairs. We continue to evaluate how our simplified structure and sharpened focus might lead to improvements in productivity and potential efficiencies. For example, approximately $500 million of R&D savings achieved from our ongoing realigning our cost base program in 2025 is expected to be reinvested in R&D programs in 2026. See the\nCosts and Expenses\u2013\u2013Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives\n\nsection within MD&A for more information\n.\nWe manage R&D operations on a total-company basis through the organization described above. The Portfolio Management Team (PMT), chaired by our Chief Strategy and Innovation Officer, Executive Vice President, is accountable for aligning resources across R&D, and for helping to ensure optimal capital allocation across the R&D portfolio. We believe that this approach also serves to maximize accountability and flexibility.\nWe do not disaggregate total R&D expense by development phase or by therapeutic area since, as described above, we manage our R&D strategy and operations collectively under the governance of the PMT and do not manage our R&D operational spend independently by development phase or by therapeutic area. Further, as we are able to adjust a significant portion of our spending quickly, we believe that any prior-period information about R&D expense by development phase or by therapeutic area would not necessarily be representative of future spending.\nFor additional information on our R&D operations, including R&D related costs and expenses, see the\nCosts and Expenses\n\u2014\nResearch and Development Expenses\n section within MD&A and\nNote 17\n.\nPfizer Inc.\n2025 Form 10-K\n5\nOur R&D Pipeline.\nThe process of drug, vaccine and biological product discovery from initiation through development and to potential regulatory approval is lengthy and can take more than ten years. As of February\u00a03, 2026, we had the following number of projects in various stages of R&D:\nDevelopment of a single compound is often pursued as part of multiple programs. While our product candidates may or may not receive regulatory approval, new candidates entering clinical development phases are the foundation for future products. Information concerning several of our drug, vaccine and biological candidates in development, as well as supplemental filings for existing products, is set forth in the\nProduct Developments\n section within MD&A. The discovery and development of drugs, vaccines and biological products are time consuming, costly and unpredictable. For information on the risks associated with R&D, see the\nItem 1A. Risk Factors\u2014Research and Development\n section.\nCOLLABORATION AND CO-PROMOTION AGREEMENTS\nWe use collaboration and/or co-promotion arrangements to enhance our R&D, sales and distribution of certain biopharmaceutical products, which include, among others, the following:\n\u2022\nComirnaty\n is an mRNA-based coronavirus vaccine to help prevent COVID-19, which is jointly developed and commercialized with BioNTech. Pfizer and BioNTech equally share the costs of development for the Comirnaty program. We also share gross profits equally from commercialization of Comirnaty (excluding mainland China, Hong Kong, Macau and Taiwan, where we do not have rights), subject to regulatory authorizations or approvals market by market. For discussion on Comirnaty, see the\nOverview of Our Performance, Operating Environment, Strategy and Outlook\u2014COVID-19\n\nsection within MD&A.\n\u2022\nEliquis\n(apixaban) is part of the novel oral anticoagulant market and was jointly developed and is commercialized with BMS as an alternative treatment option to warfarin in appropriate patients. We fund between 50% and 60% of all development costs depending on the study, and profits and losses are shared equally except in certain countries where we commercialize Eliquis and pay a percentage of net sales to BMS. In certain smaller markets we have full commercialization rights and BMS supplies the product to us at cost plus a percentage of the net sales to end-customers.\n\u2022\nXtandi\n(enzalutamide) is an androgen receptor inhibitor that blocks multiple steps in the androgen receptor signaling pathway within tumor cells that is being developed and commercialized in collaboration with Astellas, which has exclusive commercialization rights for Xtandi outside the U.S. We share equally in the gross profits and losses related to U.S. net sales and also share equally all Xtandi commercialization costs attributable to the U.S. market, subject to certain exceptions. In addition, we share certain development and other collaboration expenses. For international net sales we receive royalties based on a tiered percentage.\n\u2022\nOrgovyx\n(relugolix) is an oral gonadotropin-releasing hormone (GnRH) receptor antagonist for the treatment of adult patients with advanced prostate cancer that is being developed and commercialized with SMPS. The companies equally share profits and allowable expenses in the U.S. for Orgovyx. Pfizer does not have rights outside of this market. Separately, in December 2024, the companies terminated their collaboration with respect to the relugolix combination tablet.\n\u2022\nPadcev\n(enfortumab vedotin-ejfv) is a first-in-class ADC that is directed to Nectin-4, a protein located on the surface of cells and highly expressed in bladder cancer, that is being co-developed and jointly commercialized with Astellas. In the U.S., Padcev has been approved for use with pembrolizumab for adult patients with locally advanced or metastatic urothelial cancer and for adult patients with muscle-invasive bladder cancer (MIBC) who are ineligible for cisplatin-containing chemotherapy. Other approvals and indications for Padcev vary by market. In the U.S., Pfizer and Astellas jointly promote, and we record net sales and are responsible for all U.S. distribution activities for Padcev. The companies each bear the costs of their own sales organizations in the U.S., and equally share certain other costs associated with commercializing and any profits realized for Padcev in the U.S. Outside the U.S., we have commercialization rights in all countries in North and South America, and Astellas has commercialization rights in the rest of the world. The agreement between us and Astellas provides that the companies will effectively equally share in profits realized in markets outside of the U.S. through: (i) a costs-incurred and profit-sharing mechanism based on product sales and costs of commercialization in certain markets and (ii) a royalty-payment mechanism intended to approximate an equal profit share for both parties in the remaining markets.\n\u2022\nAdcetris\n (bren\ntuximab vedotin) is being developed and commercialized in collaboration with Takeda. Pfizer has commercialization rights for Adcetris in the U.S. and its territories and in Canada. Takeda has commercialization rights in the rest of the world and pays Pfizer a royalty based on a percentage of Takeda\u2019s net sales of Adcetris in its licensed territories, based on annual net sales tiers.\n\u2022\nTivdak\n\n(tisotumab vedotin-tftv) is commercialized in collaboration with Genmab. Pfizer has co-promotion rights in the U.S. Outside the U.S., Genmab has the sole right to promote Tivdak for second-line plus mCC and has co-promotion rights for other indications in all territories except certain territories where Zai Lab Limited (Zai Lab) has commercialization rights (mainland China, Hong Kong, Macau, and Taiwan). Our profit sharing rights, royalty rights and expense obligations relating to Tivdak vary by jurisdiction.\nIn addition, we have collaboration and/or co-promotion arrangements with respect to certain other biopharmaceutical products.\nRevenues associated with thes\ne arrangements are included in\nAlliance revenues\n (except in certain markets where we have direct sales and except for the majority of revenues for Comirnaty and Padcev, which are included in\nProduct revenues\n). In addition, we have collaboration arrangements for the development and commercialization of certain pipeline products that are in development stage, including, among others certain of those described in the\nProduct Developments\n section within MD&A. For further discussion of collaboration and co-promotion agreements, see the\nItem 1. Business\u2014Patents and Other Intellectual Property Rights\n section\n,\nthe\n\nItem 1A. Risk Factors\u2014Collaborations and Other Relationships with Third Parties\n\nsection and\nNotes 2\n and\n17\n.\nPfizer Inc.\n2025 Form 10-K\n6\nINTERNATIONAL OPERATIONS\nOur operations are conducted globally, and we supply our medicines and vaccines to approximately 200 countries and territories. Emerging markets are an important component of our strategy for global leadership, and our commercial structure recognizes that the demographics and rising economic power of the fastest-growing emerging markets are becoming more closely aligned with the profile found within developed markets. Urbanization and the rise of the middle class in emerging markets provide potential growth opportunities for our products.\nRevenues from operations outside the U.S. of $25.5 billion, $24.9 billion and $31.4 billion accounted for 41%, 39% and 53% of\nTotal revenues\n in 2025, 2024 and 2023, respectively. Revenues exceeded $500 million in each of 12, 11 and 14 countries outside the U.S. in 2025, 2024 and 2023, respectively. As a percentage of\nTotal revenues\n, China was our largest market outside the U.S. in 2025 and 2024 (representing 5% and 4% of total revenues, respectively), and Japan was our largest market in 2023 (representing 6% of total revenues). For a geographic breakdown of\nTotal revenues\n, see the\nTotal Revenues by Geography\n section within MD&A and\nNote 17B\n.\nOur international operations are subject to risks inherent in carrying on business in other countries. See the\nItem 1A. Risk Factors\n\u2014\nGlobal Operations\n\nand\nItem 1. Business\n\u2014\nGovernment Regulation and Price Constraints\n sections.\nSALES AND MARKETING\nOur prescription biopharmaceutical products are sold principally to wholesalers, but we also sell directly to retailers, hospitals, clinics, government agencies and pharmacies. Our vaccines in the U.S. are primarily sold directly to the federal government (including the CDC), wholesalers, individual provider offices, retail pharmacies and integrated delivery systems. Our vaccines outside the U.S. are primarily sold to government and non-government institutions. Certain of these government contracts may be renegotiated or terminated at the discretion of a government entity. For more information, see\nNote 1G\n\nand\n\nNot\ne\n17\nC\n.\nWe also seek to gain access for our products on formularies, which are lists of approved medicines available to members of healthcare programs or PBMs in the U.S. Insurers and PBMs who design and negotiate formularies on their behalf use various benefit designs, such as tiered co-pays for formulary products, to drive utilization of products in preferred formulary positions, typically in exchange for a discount off the price of the medicine in the form of a rebate agreement. We may also work with payors on disease management programs that help to develop tools and materials to educate patients and physicians on key disease areas. For information on our significant customers, see\nNote 17C\n.\nWe promote our products to healthcare providers and patients consistent with applicable laws, regulations and policies. Through our marketing organizations, we explain the approved uses, benefits and risks of our products to healthcare providers and patients and, in the U.S., to MCOs that provide insurance coverage, such as hospitals, integrated delivery systems, PBMs and health plans; and employers and government agencies who hire MCOs to provide health benefits to their employees. In the U.S. and select international markets, we market directly to consumers through direct-to-consumer advertising that seeks to communicate the approved uses, benefits and risks of our products while motivating people to have meaningful conversations with their doctors. In addition, we sponsor general advertising to educate the public on disease awareness, prevention and wellness, important public health issues and our patient assistance programs. Further, pursuant to our voluntary agreement with the U.S. government, we are participating on the TrumpRx.gov platform, which allows U.S. patients to purchase certain medicines at significant discounts to current retail prices.\nAs part of our commitment to engaging our customers in a manner they prefer, we take an omnichannel approach, including both virtual and in person interactions, and see generally positive customer response to both approaches.\nPATENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS\nPatents\n. We own or have co-promotion and/or license rights related to a number of patents covering pharmaceutical and other products, their uses, formulations, and product manufacturing processes.\nPatents for individual products extend for varying periods according to the date of patent filing or grant and the legal term of patents in the various countries where patent protection is obtained. The scope of protection afforded by a patent can vary from country to country and depends on the patent type, the scope of its patent claims and the availability of legal remedies. Patent term extensions (PTE) may be available in some countries to compensate for a loss of patent term due to delay in a product\u2019s approval due to the regulatory requirements, while patent term adjustment may be available in some countries to compensate for administrative delays during prosecution of patents. One of the primary considerations in limiting our operations in some countries outside the U.S. is the lack of effective intellectual property protection for our products, although international and U.S. free trade agreements have included some global protection of intellectual property rights. See the\nItem 1. Business\n\u2014\nGovernment Regulation and Price Constraints\n\nsection.\nIn various markets, a period of regulatory exclusivity may be provided for drugs or vaccines upon approval. The scope and term of such exclusivity will vary but, in general, the period will run concurrently with the term of any existing patent rights associated with the drug at the time of approval.\nBased on current sales and other factors, and considering the competition with products sold by our competitors, the patent rights we consider most significant in relation to our business as a whole, together with the year in which the basic product patent expires, are as follows:\nProduct\nU.S. Basic Product Patent Expiration Year\n(1)\n\nMajor Europe Basic Product Patent Expiration Year\n(1)\nJapan Basic Product Patent Expiration Year\n(1)\nXeljanz\n2026\n2028\n(2)\n2025\nPrevnar 13/Prevenar 13\n2026\n(3)\n2029\nAdcetris\n(4)\n2026\n(4)\n(4)\nEliquis\n\n2027\n(5)\n2026\n(6)\n2026\nIbrance\n2027\n2028\n2028\nXtandi\n(7)\n2027\n(7)\n(7)\nVyndaqel/Vyndamax/Vynmac\n2026\n(2028 pending PTE)\n(8)\n2026\n2026/2029\n(9)\nXalkori\n2029\n2027\n(10)\n2028\nPfizer Inc.\n2025 Form 10-K\n7\nProduct\nU.S. Basic Product Patent Expiration Year\n(1)\n\nMajor Europe Basic Product Patent Expiration Year\n(1)\nJapan Basic Product Patent Expiration Year\n(1)\nBraftovi\n(11)\n2030\n(2031 pending PTE)\n(11)\n(11)\nMektovi\n(11)\n2026\n(2027 pending PTE)\n(12)\n(11)\n(11)\nTalzenna\n2029\n(2032 pending PTE)\n2034\n2034\nLorbrena\n2033\n2034\n2036\nPadcev\n(13)\n2033\n(13)\n(13)\nTukysa\n2031\n(2034 pending PTE)\n2031\n2034\n(2)\nZavzpret\n2031\n(2034 pending PTE)\n2031\n(14)\n2031\n(14)\nVelsipity\n2030\n(2035 pending PTE)\n2034\n2035\n(2)\nPrevnar 20/Prevenar 20\n2035\n2037\n2038\nNurtec ODT/Vydura\n2034\n2035\n2035\n(2)\nNgenla\n(15)\n2035\n(2)\n2032\n(2)\n2030\n(2)\nCibinqo\n2036\n2036\n2038\nTivdak\n(16)\n2035\n(16)\n(16)\nLitfulo\n2034\n(2037 pending PTE)\n2038\n2039\nAbrysvo\n2036\n(2037 pending PTE)\n2036\n2036\n(2039 pending PTE)\nElrexfio\n2036\n(2037 pending PTE)\n2036\n(2038 pending SPC)\n2036\n(2038 pending PTE)\nHympavzi\n2036\n(2038 pending PTE)\n(17)\n2036\n(2041 pending PTE)\nComirnaty\n(18)\n2041\n(17)(19)\n2041\nPaxlovid\n2041\n2041\n2041\n(1)\nUnless otherwise indicated, the years pertain to the basic product patent expiration, including granted PTEs, supplementary protection certificates (SPC) or pediatric exclusivity periods. SPCs are included when granted in three out of five major European markets (France, Germany, Italy, Spain and the U.K.). Noted in parentheses is the projected year of expiry of the earliest pending patent term extension in the U.S. or Japan and/or SPC application in Europe, the term of which, if granted, may be shorter than originally requested due to a number of factors. In some instances, there are later-expiring patents relating to our products which may or may not protect our product from generic or biosimilar competition after the expiration of the basic patent.\n(2)\nExpiry is provided by regulatory exclusivity in this market.\n(3)\nThe Europe patent that covers the combination of the 13 serotype conjugates of Prevenar\n\n13 was revoked following an opposition and has now been withdrawn. There are other Europe patents and pending applications covering the formulation, various aspects of the manufacturing process, and the combination of serotype conjugates of Prevenar\n\n13 that remain in force.\n(4)\nAdcetris is commercialized in collaboration with Takeda. Pfizer has commercialization rights for Adcetris in the U.S. and its territories and in Canada. Takeda has commercialization rights in the rest of the world.\n(5)\nEliquis was jointly developed and is commercialized in collaboration with BMS. In the U.S., we and BMS previously settled certain patent litigations with a number of generic companies permitting their launch of a generic version of Eliquis on April 1, 2028 (the settled generic companies). We continued to litigate against three remaining generic companies and following the resolution of the litigation in our favor, the three generic companies are not permitted to launch their products until the 2031 expiration date of the formulation patent.\u202fBoth the composition of matter patent expiring in November 2026 and the formulation patent expiring in 2031 may be subject to future challenges.\u202fWhile we cannot predict the outcome of any potential future litigation, there are certain potential alternatives that might occur which could potentially permit generic launch prior to April 1, 2028: (i) if the formulation patent is held invalid or not infringed in future litigation, through appeal, the settled generic companies and any successful future litigant would be permitted to launch on November 21, 2026; or (ii) if both patents are held invalid or not infringed in future litigation, through appeal, the settled generic companies and any successful future litigant could launch products immediately upon such an adverse decision. See also\nNote 16A1\n.\n(6)\nThe apixaban basic product patent and associated SPC were invalidated in the U.K. Additional challenges are pending in other jurisdictions.\n(7)\nXtandi is being developed and commercialized in collaboration with Astellas, which has exclusive commercialization rights for Xtandi outside the U.S.\n(8)\nInterim patent term extension requests have been granted extending the expiry from December 2025 to December 2026, and Pfizer has pending applications for patent term extension to 2028.\n(9)\nVyndaqel (tafamidis meglumine) basic patent expiry in Japan is August 2026 for treatment of polyneuropathy. Vynmac (tafamidis) was approved in Japan for treatment of cardiomyopathy with regulatory exclusivity expiring in March 2029.\n(10)\nPediatric extension applications have been filed on SPCs for Xalkori in Europe. In France, Germany, and Italy the pediatric extension has been granted, extending the SPC to 2028.\n(11)\nPfizer has exclusive rights to Braftovi and Mektovi in the U.S., Canada, Latin America, the Middle East and Africa. Ono has exclusive rights to commercialize the product in Japan and South Korea, Medison Pharma Ltd. has exclusive rights to commercialize the product in Israel and Pierre Fabre has exclusive rights to commercialize the product in all other countries, including Europe and Asia (excluding Japan and South Korea). Pfizer receives royalties from Pierre Fabre and Ono on sales of Braftovi and Mektovi.\nPfizer Inc.\n2025 Form 10-K\n8\n(12)\nMektovi U.S. expiry is provided by a composition of matter patent. Interim patent term extension requests have been filed to extend the expiry from March 2026 to March 2027, and Pfizer has filed an application for patent term extension to August 2027.\n(13)\nPadcev is being commercialized in collaboration with Astellas. Pfizer has co-promotion rights in the U.S. Outside the U.S., Pfizer has commercialization rights in all countries in North and South America, and Astellas has commercialization rights in the rest of the world, including Europe, Asia, Australia and Africa.\n(14)\nProduct not yet approved or authorized in this market.\n(15)\nNgenla is licensed from OPKO Health, Inc., and is developed and commercialized by Pfizer, including in the U.S., Latin America, Europe, Africa, and Asia.\n(16)\nTivdak is commercialized in collaboration with Genmab. Pfizer has co-promotion rights in the U.S. Outside the U.S., Genmab has the sole right to promote Tivdak for second-line plus mCC and has co-promotion rights for other indications in all territories except certain territories where Zai Lab has commercialization rights (mainland China, Hong Kong, Macau, and Taiwan).\n(17)\nThe basic product patent application has been filed in this market. If granted, a full term is expected in this market.\n(18)\nProduct is being commercialized in collaboration with BioNTech. The Comirnaty trademark covers marketed variants.\n(19)\nPfizer does not have co-promotion rights for this product in Germany.\nFor information regarding past reported, including recently expired, patent expiration dates, please see the Patents and Intellectual Property Rights sections of our prior Annual Reports on Form 10-K. For information regarding commercialization rights, profit sharing and royalty arrangements for certain of these products, see\nItem 1. Business\u2014Collaboration and Co-Promotion Agreements\n.\nLoss of Intellectual Property Rights.\nThe loss, expiration or invalidation of intellectual property rights, patent litigation settlements and judgments and the expiration of co-promotion and licensing rights can have a material adverse effect on our revenues. Once patent protection has expired or has been lost prior to the expiration date as a result of a legal challenge, we typically lose market exclusivity on these products, and generic and biosimilar pharmaceutical manufacturers generally produce identical or highly similar products and sell them for a lower price. The date at which generic or biosimilar competition commences may be different from the date that the patent or regulatory exclusivity expires. However, when generic or biosimilar competition does commence, the resulting price competition can substantially decrease our revenues for the impacted products, often in a very short period of time. Also, if one of our product-related patents is found to be invalid by judicial, court, regulatory or administrative proceedings, generic or biosimilar products could be introduced, resulting in the erosion of sales of our existing products. Additionally, we could be subject to claims that our intellectual property rights infringe third party patents.\nCertain of our products have experienced patent-based expirations or loss of regulatory exclusivity in certain markets in the last few years, and we expect certain products to face new or increased generic competition over the next few years. We anticipate a significant reduction of revenue from patent-based or regulatory exclusivity expiries in 2026 through 2030 as several of our in-line products experience these expirations, with the rate of the reduction of revenues from patent-based or regulatory exclusivity expiries expected to significantly accelerate over the next few years. There is no assurance that a particular product will maintain market exclusivity for the full time period that appears in the estimates included in this Form 10-K or that we assume when we provide our financial guidance. For additional information on the impact of loss of patent-based exclusivity or regulatory exclusivity on our revenues, see the\nOverview of Our Performance, Operating Environment, Strategy and Outlook\n\u2014Our 202\n5\n Performanc\ne\n\nand\n\u2014\nIntellectual Property Rights and Collaboration/Licensing Rights\n sections within MD&A.\nWe continue to vigorously defend our patent rights against infringement, and we will continue to support efforts that strengthen worldwide recognition of patent rights while taking necessary steps to help ensure appropriate patient access. See the\nItem 1A. Risk Factors\n\u2014\nCompetitive Products,\n\u2014\nIntellectual Property Protection\n\nand\n\n\u2014\nThird-Party Intellectual Property Claims\n\nsections and\nNote 16A1\n.\nTrademarks\n. Our products are sold under brand-name and logo trademarks and trade dress. Registrations generally are for fixed, but renewable, terms and protection is provided in some countries for as long as the mark is used while in others, for as long as it is registered. Protecting our trademarks is of material importance to us.\nCOMPETITION\nOur business is conducted in intensely competitive and highly regulated markets. Many of our products face competition in the form of branded or generic drugs or biosimilars that treat similar diseases or indications. The principal forms of competition include efficacy, safety, tolerability, ease of use and cost. Though the means of competition vary among our products, demonstrating the value of our products is a critical factor for success.\nWe compete with other companies that manufacture and sell products that treat or prevent diseases or indications similar to those treated or prevented by our major products. These competitors include other worldwide research-based biopharmaceutical companies, smaller research companies with more limited therapeutic focus and generic drug and biosimilar manufacturers. Our competitors also may devote substantial funds and resources to R&D and their successful R&D could result in erosion of the sales of our existing products and potential sales of our products in development, as well as product obsolescence. In addition, several of our competitors operate without large R&D expenses and make a regular practice of challenging our product patents before their expiration.\nTo help address competitive trends we continually emphasize innovation, which is underscored by our multi-billion-dollar investment in R&D, as well as our business development transactions, both designed to result in a strong and differentiated product pipeline. Our investment in research continues even after drug or vaccine approval as we seek to further demonstrate the value of our products for the conditions they treat or prevent, as well as investigating potential new applications. We educate patients, physicians, payors and global health authorities on the benefits and risks of our medicines and vaccines, and seek to continually enhance the organizational effectiveness of our biopharmaceutical functions, including our efforts to effectively launch and market our products to our customers.\nOperating conditions have also shifted as a result of increased global competitive pressures, industry regulation and cost containment. We continue to evaluate, adapt and improve our organization and business practices in an effort to better meet customer and public needs. We also continue to support programs to help address patient affordability and access barriers, as we strive to advance fundamental health system change through our support for better healthcare solutions. For example, our\nAccord for a Healthier World\nprogram aims to provide our full portfolio of patented and off-patent medicines and vaccines for which Pfizer holds global rights on a not-for-profit basis to 1.2 billion people living in 45 lower-income countries around the world.\nOur vaccines have and may continue to face competition, including from the introduction of alternative vaccines or \u201cnext-generation\u201d vaccines prior to or after the expiration of their patents, which may adversely affect our future results.\nOur biosimilars, which include biosimilars of certain inflammation & immunology and oncology biologic medicines, compete with branded products from competitors, as well as other generics and biosimilars manufacturers. We seek to maximize the opportunity to establish a \u201cfirst-to-\nPfizer Inc.\n2025 Form 10-K\n9\nmarket\u201d or early market position for our biosimilars to provide customers a lower-cost alternative as soon as practicable and also to potentially provide us with higher levels of sales and profitability until other competitors enter the market.\nGeneric Products\n.\nGeneric pharmaceutical manufacturers pose one of the biggest competitive challenges to our branded small molecule products because they can market a competing version of our product after the expiration or loss of our patent protection, or exclusivity, and often charge much less. Several competitors regularly challenge our product patents before their expiration. Generic competitors often operate without large R&D expenses, as well as without costs of conveying medical information about products to the medical community. In addition, the approval process in the U.S. and in the EU exempts most generics from costly and time-consuming clinical trials to demonstrate their safety and efficacy, allowing generic manufacturers to rely on the safety and efficacy data of the innovator product. In China, for example, given the expansion of the QCE process and continuation of the VBP program, we expect to continue to face intensified competition by certain generic manufacturers in 2026 and beyond, which has and may continue to result in price cuts and volume loss of some of our products. In addition, generic versions of competitors\u2019 branded products have and may continue to compete with our products.\nCommercial and government payors typically encourage the use of generics as alternatives to brand-name drugs in their healthcare programs, including Medicaid in the U.S., and U.S. laws generally allow, and in some cases require, pharmacists to substitute generic drugs for brand-name drugs. In a small subset of states, prescribing physicians are able to expressly prevent such substitution. Similar rules also apply in several EU member states, where national authorities typically encourage and incentivize the use of generic products.\nBiosimilars.\nCertain of our biologic products, including Enbrel (we market Enbrel outside the U.S. and Canada), already face, or may face in the\nfuture, competition from biosimilars (also referred to as follow-on biologics). Biosimilars are versions of biologic medicines that have been developed and proven to be highly similar to the original biologic in terms of safety and efficacy and that have no clinically meaningful differences in safety, purity or potency. Biosimilars have the potential to offer high-quality, lower-cost alternatives to innovative biologic medicines. In the U.S., biosimilars referencing innovative biologic products are approved by the FDA under the U.S. Public Health Service Act, whereas in the EU the EMA is responsible for evaluating the majority of applications for biosimilars through the centralized procedure.\nPRICING PRESSURES AND MANAGED CARE ORGANIZATIONS\nCommercial Pricing Pressures.\nPricing and access pressures in the commercial sector continue to be significant. Overall, increasing pressure exists on U.S. providers to deliver healthcare at a lower cost and to ensure that those expenditures deliver demonstrated value in terms of health outcomes. Many employers have adopted or make available high deductible health plans, which can increase out-of-pocket costs for medicines, or are using utilization management tools or limiting access on formularies. This trend is likely to continue. Private third-party payors, such as health plans, increasingly challenge pharmaceutical product pricing, which could result in lower prices, lower reimbursement rates for payors and a reduction in demand for our products, including denial of coverage of our products, if lower cost alternatives are available. Payors often require significant discounts, or rebates, from our prices in exchange for more favorable formulary placement. Pricing pressures also may occur as a result of highly competitive biopharmaceutical markets and increasing concentration of insurers and PBMs. Healthcare provider purchasers, directly or through group purchasing organizations, are seeking enhanced discounts or implementing more rigorous bidding or purchasing review processes.\nWe believe medicines and vaccines are the most efficient and effective use of healthcare dollars based on the value they deliver to the overall healthcare system. We work with law makers and advocate for solutions that effectively improve patient health outcomes, lower costs to the healthcare system, and help ensure access to medicines and vaccines within an efficient and affordable healthcare system. This includes assessing our go-to market model to help address patient affordability challenges. We have engaged with major payors and the U.S. government to explore opportunities to improve access and reimbursement in an effort to drive pro-patient policies. In addition, in response to the evolving U.S. and global healthcare spending landscape, we work with health authorities, health technology assessment and quality measurement bodies and major U.S. payors throughout the product-development process to better understand how these entities value our compounds and products. Further, we are developing stronger support designed to demonstrate the value of the medicines and vaccines that we discover or develop, register and manufacture.\nFor information on government pricing pressures, see the\nItem 1. Business\n\u2014\nGovernment Regulation and Price Constraints\n and\nItem 1A. Risk Factors\n\u2014\nPricing and Reimbursement\n\nsections.\nManaged Care Organizations.\nThe evolution of managed care in the U.S. has been a major factor in the competitiveness of the healthcare marketplace. Approximately 314 million people in the U.S. now have some form of health insurance coverage, and the marketing of prescription drugs and vaccines to both consumers and the entities that manage coverage in the U.S. continues to grow in importance. In particular, the influence of MCOs has increased in recent years due to the growing number of patients receiving coverage through MCOs. At the same time, consolidation in the MCO industry has resulted in fewer, even larger MCOs, which enhances those MCOs\u2019 ability to negotiate lower pricing and further increases their importance to our business. Since MCOs purport to seek to contain and reduce healthcare expenditures, their growing influence has increased downward pressure on drug prices, as well as negatively impacted revenues.\nMCOs and their PBMs typically negotiate prices with pharmaceutical providers by using formularies (which are lists of approved medicines available to MCO members), clinical protocols (which require prior authorization for a branded product if a generic product is available or require the patient to first fail on one or more generic products before permitting access to a branded medicine), long-term contracts and their ability to influence volume and market share of prescription drugs. In addition, by placing branded medicines on higher-tier or non-preferred status in their formularies, MCOs transfer to the patient higher patient out-of-pocket expenses. This financial disincentive is a tool for MCOs to manage drug costs and channel patients to medicines preferred by the MCOs. We expect payment reforms for MCOs will continue to evolve with increased emphasis on expanded participation and on removing barriers to equitable healthcare.\nThe breadth of the products covered by formularies can vary considerably from one MCO to another, and many formularies include alternative and competitive products for treatment of particular medical problems. MCOs emphasize primary and preventive care, out-patient treatment and procedures performed at doctors\u2019 offices and clinics as ways to manage costs. Hospitalization and surgery, typically the most expensive forms of treatment, are carefully managed, and drugs that can help in chronic care management and reduce the need for hospitalization, professional therapy or surgery may become favored first-line treatments for certain diseases. At the same time, MCOs may seek to exclude high-cost drugs from formularies in their efforts to manage and lower their costs.\nExclusion of a product from a formulary or other restrictions can significantly impact drug usage in the MCO or PBM managed patient population and beyond. Consequently, pharmaceutical companies compete to gain access to formularies for their products, typically on the basis of unique product features, such as greater efficacy, better patient ease of use, or fewer side effects, as well as the overall cost of the therapy. We continue\nPfizer Inc.\n2025 Form 10-K\n10\nto seek to ensure that our major products are included on MCO formularies. However, our branded products are increasingly being placed on the higher tiers or in a non-preferred status. Continuing efforts by managed care entities to contain or reduce costs of healthcare and/or impose price controls may adversely affect demand for our products and our financial performance. See the\nItem 1A. Risk Factors\n\u2014\nManaged Care Trends\n section.\nOver the last year, PBM practices have come under scrutiny from Federal and State policymakers. These legislations, enforcements, settlements and related guidance and rules could have implications to our business, including how we engage with these entities as well as the formulary status of our products.\nAgreement with the U.S. Government.\nIn September 2025, we announced an agreement with the Trump Administration in which we voluntarily agreed to implement measures designed to make certain drug prices for U.S. patients more comparable to those in other developed countries. We are also participating in the TrumpRx.gov platform, which allows U.S. patients to purchase certain medicines at significant discounts to current retail prices, where the large majority of the Company\u2019s primary care treatments and some select specialty brands will be offered at savings that will range as high as 85% and on average 50%. The September 2025 agreement also provides a three-year grace period during which time our products will not face Section 232 tariffs, provided the Company further invests in manufacturing in the U.S. Pfizer is now in the process of entering into binding final agreements to implement these arrangements. See the\nItem 1. Business\n\u2014\nGovernment Regulation and Price Constraints\n and\nItem 1A. Risk Factors\n\u2014\nPricing and Reimbursement\n\nsections.\nRAW MATERIALS\nWe procure raw materials essential to our business from numerous suppliers worldwide. In general, these materials have been available in sufficient quantities to support our demand and in many cases are available from multiple suppliers. We do not anticipate the availability of raw materials to have a significant impact on our operations in 2026, but are monitoring potential supply chain disruptions as a result of ongoing geopolitical and trade negotiations, which could, among other things, impact costs. We are continuing to monitor and implement mitigation strategies to reduce any potential risk or impact including active supplier management, qualification of additional suppliers and advanced purchasing to the extent possible.\nGOVERNMENT REGULATION AND PRICE CONSTRAINTS\nWe are subject to extensive regulation by government authorities in the countries in which we do business. This includes laws and regulations governing the operations of biopharmaceutical companies, such as the research and development, testing, approval, manufacturing and marketing of products, pricing (including discounts and rebates) and price reporting, interactions with healthcare professionals, institutions, and referral sources, reporting of remuneration provided to healthcare providers and academic medical centers, financial assistance provided to patients, clinical research, data privacy and information security, among others. These laws and regulations may require administrative guidance for implementation, and a failure to comply could subject us to legal and/or administrative actions. Enforcement measures may include substantial fines and/or penalties, orders to stop non-compliant activities, criminal charges, warning letters, product recalls or seizures, delays in product approvals, exclusion from participation in government programs or contracts as well as limitations on conducting business in applicable jurisdictions, and could result in harm to our reputation and business. See\nNote 16A\n.\nCompliance with these laws and regulations is costly, and requires significant technical expertise and capital investment to ensure compliance.\nIn the U.S.\nDrug and Biologic Regulation\n.\nThe FDA, pursuant to the FFDCA, the Public Health Service Act and other federal statutes and regulations, extensively regulates pre- and post-marketing activities related to our biopharmaceutical products and devices. The statutes and regulations govern areas such as safety and efficacy, clinical trials, advertising and promotion, quality control, manufacturing, labeling, distribution, post-marketing safety surveillance and reporting, and record keeping. Other U.S. federal agencies, including the DEA, may also regulate certain of our products and activities.\nFor a biopharmaceutical company to market a drug or a biologic product, including vaccines, the FDA must approve a product\u2019s NDA or BLA (or supplemental NDA or supplemental BLA). Prior to such approval, the FDA will evaluate whether the product is safe and effective for its intended use.\nA drug or biologic may be subject to post marketing commitments, which are studies or clinical trials that the product sponsor agrees to conduct, or post marketing requirements, which are studies or clinical trials that are required as a condition of approval. In addition, we are also required to report adverse events and comply with cGMPs (the FDA regulations that govern all aspects of manufacturing quality for pharmaceuticals) and the Drug Supply Chain Security Act (the law that, among other things, sets forth requirements related to product tracing, product identifiers and verification for manufacturers, wholesale distributors, third-party logistics providers, re-packagers and dispensers to facilitate the tracing of product through the pharmaceutical distribution supply chain), as well as advertising and promotion regulations. See the\nItem 1A. Risk Factors\n\u2014\nDevelopment, Regulatory Approval and Marketing of Products\n\nand\n\n\u2014\nPost-Authorization/Approval Data\n\nsections. We are also responsible for monitoring, reviewing, and the periodic reporting of adverse drug experience, or pharmacovigilance, including information received from any source, such as commercial marketing experience, postmarketing clinical investigations, postmarketing epidemiological or surveillance studies, clinical trials conducted by other parties within and outside the U.S., reports in the scientific literature, and unpublished scientific papers.\nIn the context of public health emergencies, like the COVID-19 pandemic, we may apply to the FDA for an EUA which, if granted, allows for the distribution and use of our products during the declared emergency, in accordance with the conditions set forth in the EUA, unless the EUA is terminated by the government. Although the criteria for an EUA differ from the criteria for approval of an NDA or BLA, EUAs nevertheless require the development and submission of data to satisfy the relevant FDA standards, and a number of ongoing obligations. The FDA generally expects EUA holders to work toward submission of full applications, such as a BLA or an NDA, as soon as possible.\nBiosimilar Regulation.\n The FDA regulates biosimilars which are follow-on products that reference an innovative biological product. A product is biosimilar if the products are highly similar and there are no clinically meaningful differences between them. A biosimilar is interchangeable if switching the products does not decrease safety or efficacy. In many states, interchangeable biosimilars may be substituted for the reference product at the pharmacy. A biosimilar application may not be filed until four years, and not approved until 12 years, after reference product licensure. No other interchangeable may be approved until one year after approval of the first interchangeable.\nSales and Marketing Regulations\n.\n Our marketing and promotional practices are subject to federal and state laws, such as the Anti-Kickback Statute (AKS), Civil Monetary Penalties Law, False Claims Act and state laws governing kickbacks and false claims, intended to prevent fraud and abuse in the healthcare industry. These laws can apply to both our direct-to-consumer marketing practices as well as our marketing to\nPfizer Inc.\n2025 Form 10-K\n11\nclinicians and healthcare facilities. The AKS prohibits, among other things, soliciting, offering, receiving, or paying anything of value to generate business that may be paid for, in whole or in part, by a federal healthcare program. The Civil Monetary Penalties Law covers a variety of conduct, often violations under other laws, and includes penalties for AKS violations as well as causing the submission of false claims. The False Claims Act generally prohibits anyone from knowingly and willingly presenting, or causing to be presented, any claims for payment for goods or services, including to government payors, such as Medicare and Medicaid, that are false or fraudulent including false certifications of compliance with applicable law. The federal government and states also regulate sales and marketing activities and financial interactions between manufacturers and healthcare providers and academic medical centers, requiring disclosure to government authorities and the public of such interactions, and the adoption of compliance standards or programs. State attorneys general have also taken action to regulate the marketing of prescription drugs under state consumer protection and false advertising laws.\nPricing, Reimbursement and Access Regulations.\n Pricing and reimbursement for our products depend in part on government regulation. Any significant efforts at the federal or state levels to reform the healthcare system by changing the way healthcare is provided or funded or to expand controls on drug pricing, implement international reference pricing, including Most-Favored-Nation (MFN) drug pricing, or impact government reimbursement and access to medicines and vaccines on public and private insurance plans or consumer purchasing platforms could have a material impact on us.\nIn May 2025, the Trump Administration issued an Executive Order titled \u201cDelivering Most-Favored Nation Prescription Drug Pricing to American Patients\u201d, outlining a plan to reduce prescription drug costs in the U.S., which was followed by formal letters to major pharmaceutical companies (including Pfizer) in July 2025 outlining steps they should take to lower prescription drug costs to U.S. patients and taxpayers (collectively, the MFN Initiatives). In September 2025, Pfizer announced an agreement with the Trump Administration in which we voluntarily agreed to implement measures designed to make certain drug prices for U.S. patients more comparable to those in other developed countries. We are also participating in the TrumpRx.gov platform, which allows U.S. patients to purchase certain medicines at significant discounts to current retail prices. The September 2025 agreement also provides a three-year grace period during which time our products will not face Section 232 tariffs, provided the Company further invests in manufacturing in the U.S. Pfizer is now in the process of entering into binding final agreements to implement these arrangements.\nIn addition, we must offer discounts or rebates on purchases of pharmaceutical products, and often voluntarily agree to supplemental rebates, under various government programs including Medicare, Medicaid, the Veterans Administration and the 340B Program. We also must report specific prices to state and federal government agencies. The calculations necessary to determine the prices reported are complex and the failure to do so accurately may expose us to enforcement measures. See the discussion regarding rebates in the\n\nProduct Revenue Deductions\n\nsection within MD&A and\nNote 1G\n.\nThe drug pricing provisions of the IRA have been and continue to be implemented. The IRA includes several provisions intended to lower prescription drug costs for Medicare patients and to reduce drug spending by the federal government. The IRA also made significant changes to the Medicare Part D benefit design (IRA Medicare Part D Redesign), which took effect beginning in 2025 and negatively impacted our 2025 revenues by approximately $1 billion. We do not expect a material, incremental impact from the IRA Medicare Part D Redesign in 2026 versus the baseline set in 2025. Among other things, the IRA enhanced the Medicare Part D benefit by eliminating the coverage gap (\u201cdonut hole\u201d) beginning in 2025, added a maximum out-of-pocket cap for Medicare beneficiaries (set at $2,100 for 2026), and created a new program, the Medicare Prescription Payment Plan, that allows patients to pay their cost-sharing over time. These changes also include a new Medicare Part D Manufacturer Discount Program, which changed our discounting obligations for Medicare Part D utilization of our drugs. Specifically, this program requires manufacturers to provide a 10% discount on branded prescriptions in the initial coverage phase and a 20% discount in the catastrophic phase. The IRA also imposes rebates under Medicare Part B and Medicare Part D on drug price increases that outpace inflation, and directs HHS to set the prices of certain high-expenditure, single-source drugs and biologics covered under Medicare, known as the MDPNP. In August 2023, CMS published the first ten medicines subject to the MDPNP, which included Eliquis. In August 2024, the government released the new Medicare price for Eliquis, which, effective January 1, 2026, is required to be offered to all Medicare beneficiaries at the price established by the government (known as the Maximum Fair Price). The Maximum Fair Price also must be offered to covered entities participating in the 340B Program that dispense Eliquis to a Medicare beneficiary when the Maximum Fair Price is lower than the statutorily-mandated price such entities are offered under the 340B Program. In January 2025, CMS announced the selection of another 15 drugs from Medicare Part D for the Maximum Fair Price, with prices to be set and effective on January 1, 2027. Ibrance and Xtandi were included in the list of 15 drugs selected. Another 15 drugs from Medicare Part B or Medicare Part D were selected on January 27, 2026, for the Maximum Fair Price to be set and effective on January 1, 2028. Xeljanz was included in the list of 15 drugs selected. It is possible that more of our products could be selected in future years, which could, among other things, lead to lower revenues. The MDPNP is currently subject to legal challenges and therefore, the outcome of the MDPNP remains uncertain. We continue to evaluate the impact of the IRA on our business, operations and financial condition and results as the full effect of the IRA on our business and the pharmaceutical industry remains uncertain. See the discussion regarding the IRA in the\nOverview of Our Performance, Operating Environment, Strategy and Outlook\u2014Our Operating Environment\n\nsection within MD&A.\nChanges to the MDRP or the 340B Program also could have a material impact on our business. For example, certain changes finalized by CMS in a December 2020 final rule, including which products qualify as \u201cline extension\u201d drugs subject to increased rebate liability, may have a material adverse impact on our business. Additionally, in September 2024, CMS finalized a new rule that, among other items, expands the scope of medications considered to be \u201ccovered outpatient drugs\u201d that could be subject to rebates under the MDRP and imposes penalties on covered outpatient drugs that CMS determines to be \u201cmisclassified.\u201d Changes to the way we calculate Average Sales Price under the Medicare Part B program, including new rules regarding the treatment of bundled sales and bona fide service fees that were finalized in a November 2025 final rule, also may impact the reimbursement amount available to providers for our Part B products administered to Medicare beneficiaries. These changes could impact our revenues for such products if Part B reimbursement amounts are negatively impacted. Many pharmaceutical manufacturers believe the 340B Program continues to expand beyond the original intent of serving low-income/uninsured patients. However, there has been limited government oversight to control this significant growth. Accordingly, several manufacturers, including Pfizer, have implemented initiatives and policies seeking to improve 340B Program integrity and transparency, such as establishing certain conditions related to use of contract pharmacies, requesting or requiring limited data submissions by covered entities, and pursuing use of rebate models.\nSome of these efforts have been the subject of legal challenges and other advocacy efforts by covered entities, states, and/or the HHS Health Resources and Services Administration (HRSA), the agency that administers the 340B Program. In 2022, we implemented a policy to help improve contract pharmacy integrity. In 2021 and 2022, HRSA sent letters to numerous manufacturers (not including Pfizer) that implemented contract pharmacy policies and integrity initiatives; the letters expressed HRSA\u2019s view that those manufacturers\u2019 policies were in violation of the 340B Program statute. Several manufacturers challenged HRSA\u2019s enforcement letters in federal court. We believe that our policy is consistent with the statute and supported by the federal court decisions issued to date.\nPfizer Inc.\n2025 Form 10-K\n12\nIn addition, some states have enacted laws seeking to address various aspects of manufacturer policies related to contract pharmacy transactions in their states. Several stakeholders have challenged such laws and litigation is ongoing in several jurisdictions. Certain courts have decided these challenges in favor of manufacturers and other courts have ruled in favor of relevant states. Additionally, other states have considered and could enact similar laws going forward, although any such laws also may be subject to legal challenges.\nAdditional legal or legislative developments at the federal or state level with respect to the 340B Program may have an adverse impact on our integrity initiative, and we may face enforcement action or penalties, depending upon such developments. The 340B Program continues to be a subject of congressional scrutiny and inquiries, litigation, and other developments, any or all of which could affect the scope of the 340B Program and Pfizer\u2019s obligation to offer the 340B price to 340B Program-covered entities under the 340B Program. See the\nItem 1A. Risk Factors\n\u2014\nPricing and Reimbursement\n section.\nStates seek to control healthcare costs related to Medicaid and other state regulated healthcare programs. A majority of states use preferred drug lists to manage access to pharmaceutical products under Medicaid, including some of our products. States may seek to negotiate supplemental rebate agreements that are larger than the minimum federal requirement for preferred formulary access. Preferred access to our products under the Medicaid managed care programs are often determined by the managed care health plans contracted by the state to administer benefits, which may also require supplemental rebates for preferred formulary access. We expect states will continue to seek cost cutting, which may focus on managed care capitation payments, upper pricing limits, supplemental rebates, and/or formulary management.\nCoverage and cost sharing for certain insurance programs including Medicare, Medicaid and Children\u2019s Health Immunization Program (CHIP) can depend on recommendations from advisory committees, including the U.S. Preventive Services Taskforce (USPSTF) and the ACIP. Changes in the recommendations or structure of those committees may affect the use of our medicines and vaccines.\nIn the U.S., there is considerable public and government scrutiny of pharmaceutical pricing and intellectual property and we expect to see continued focus by federal and state governments on regulating pricing and access to medicine, in addition to actions already taken, which could result in legislative and regulatory changes.\nFurther efforts by states and the federal government to regulate prices or payment for pharmaceutical products, including proposed actions to facilitate drug importation, implement international reference pricing, including MFN drug pricing, or establish upper pricing limits that cap reimbursement to lower reference prices, require deep discounts, impose financial penalties related to pricing practices, and require manufacturers to report and make public price increases and sometimes a written justification for the increase, could adversely affect our business if implemented.\nFurther, commercial payors often follow Medicare coverage and reimbursement policies when setting their own payment rates. Any reduction in cost or other containment measures may similarly be adopted by commercial plans. Payors may continue to promote generic drugs and biosimilars more aggressively to generate savings and attempt to stimulate additional price competition. In addition, we expect that consolidation and integration among pharmacy chains, wholesalers and PBMs will increase pricing pressures in the industry. See the\nItem 1A. Risk Factors\n\u2014\nManaged Care Trends\n section.\nAnti-Corruption.\nThe FCPA prohibits U.S. corporations and their representatives from offering, promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate to obtain or retain business abroad. The scope of the FCPA includes interactions with certain healthcare professionals in many countries. Other countries have enacted similar anti-corruption laws and/or regulations.\nData Privacy.\nThe number of privacy and data security laws and regulations in the U.S. to which we are subject on the federal and state level continues to increase. We routinely collect and use sensitive personal data relating to health. The legislative, regulatory and litigation landscape for privacy and data protection requirements is rapidly evolving and changing, and may limit our ability to use data globally or across borders. Data protection requirements are not universal and can conflict between jurisdictions. Compliance with those laws and regulations is made more complex by the lack of consistent standards, common definitions, or clear regulatory expectations. We also anticipate continued and new uses of data as we explore the use of AI tools both internally and externally. Enforcement of these data privacy and security laws and regulations is increasing and litigation is becoming more common, and we expect such trends will continue. Any failure or perceived failure by us to comply with applicable privacy and data protection laws and regulations, including cybersecurity breaches or incidents, could subject us to significant fines and penalties, and/or litigation, as well as negatively impact our reputation.\nOutside the U.S.\nNew Drug Approvals\n. In the EU, the EMA conducts the scientific evaluation, supervision and safety monitoring of our innovative medicinal products that are eligible for the centralized marketing authorization procedure. Through the centralized procedure, pharmaceutical companies may submit to the EMA a single application for a marketing authorization valid in all the EU and the European Economic Area (EEA) countries. The EC grants marketing authorization by issuing a legally binding decision based on the EMA's recommendation. The centralized procedure is mandatory for certain new products (such as biotechnology and orphan medicine), optional for others (including new active substances and products with significant therapeutic, scientific, or technical innovation), and not available for all remaining products. In the U.K., the Medicines and Healthcare products Regulatory Agency (MHRA) is the sole regulatory authority, and companies must obtain an MHRA marketing authorization to market medicines in the U.K. In Japan, the Pharmaceuticals and Medical Device Agency is involved in a wide range of regulatory activities, including clinical studies, approvals, post-marketing reviews and pharmaceutical safety. In China, the National Medical Product Administration is the primary regulatory authority for approving and supervising medicines. Health authorities in many middle- and lower-income countries might require marketing approval or scientific opinions by a recognized regulatory authority (e.g., the FDA or EMA/EC) before they begin reviewing or approving applications. By way of example, the EMA, in cooperation with the WHO, can provide scientific opinions on high priority human medicines, including vaccines, for markets outside the EU.\nIn the EU, the European Council and the European Parliament reached an agreement in December 2025 on the most significant reform of the EU\u2019s Pharmaceutical Legislation in 20 years (the EU Pharma Package). The reform still requires formal approval by both institutions and will enter into force upon publication in the EU\u2019s Official Journal, expected in 2026. The reform encompasses a broad range of measures, including changes to regulatory exclusivity, incentives to combat microbial resistance, intellectual property exemptions for generic medicines, and marketing authorization procedures. Most provisions are expected to apply from 2028, following a two-year transition period. This landmark reform is expected to significantly influence the way innovative medicines are developed, authorized, monitored, and accessed across the EU. Once implemented, certain provisions of the reform could potentially have an adverse impact on our business.\nIn the EU, several other recently adopted or proposed legislative initiatives may affect our business, including the EU HTA-R, new rules on\nPfizer Inc.\n2025 Form 10-K\n13\nsubstances of human origin (SoHO Regulation), the ongoing reform of the rules governing SPCs, the EU Critical Medicines Act, and the EU Biotech Act. In addition, a number of EU regulations that are not primarily focused on medicinal products may nevertheless have a material impact on pharmaceutical companies. These include the EU AI Act, EU Data Act, and the EU Health Data Space Regulation, among others. Moreover, the EU is currently discussing the Digital Omnibus Package, which comprises a series of technical amendments to a wide body of EU digital legislation.\nPharmacovigilance.\n\nIn the EU, the EMA\u2019s PRAC is responsible for reviewing and making recommendations on product safety issues. Specifically, the PRAC focuses on detecting, assessing and communicating the risks associated with adverse reactions of medicinal products, while considering their therapeutic effects. It also evaluates post-authorization safety studies and conducts pharmacovigilance audits. Outside developed markets, pharmacovigilance requirements vary and are generally not as extensive, but there is a trend toward increasing regulation.\nPricing and Reimbursement\n.\nCertain governments, including in the different EU member states, the U.K., Japan, China, Canada and Australia provide healthcare at low-to-zero direct cost to consumers at the point of care and have significant power to regulate pharmaceutical prices or patient reimbursement levels to control costs for the government-sponsored healthcare system, particularly under global financing pressures. Governments globally may use a variety of measures to control costs, including, among others, legislative or regulatory pricing reforms, cross country collaboration and procurement, price cuts, mandatory rebates, health technology assessments, forced localization as a condition of market access, international reference pricing (i.e., the practice of a country linking its regulated medicine prices to those of other countries), QCE processes and VBP. In addition, the international patchwork of price regulation, differing economic conditions and incomplete value assessments across countries has led to varying access to quality medicines in many markets and some third-party trade in our products between countries.\nIn China, pricing pressures have increased in recent years because of an overall focus on healthcare cost containment with the central government emphasizing improved health outcomes and decreased drug prices as key indicators of progress towards its healthcare reform. State owned hospitals and the state insurance program account for the vast majority of all drug purchases, despite recent government efforts to promote use of commercial insurance for some innovative products. For patented innovative products, drug prices have decreased dramatically as a result of adding innovative drugs (including oncology medicines, pediatric medicines, orphan drugs and medicines for chronic diseases) to the National Reimbursement Drug List via access-price negotiation. Certain patented innovative drug products are also listed for enrollment into the Catalogue of Innovative Drugs for Commercial Insurance and subject to a similar price negotiation process with selected commercial insurance stakeholders. A centralized VBP program with a tendering process implemented at both the national level and the provincial level aims to contain healthcare costs by driving utilization of generics that have passed QCE. This has resulted in further lowering the price of medicines, especially off-patent medicines; this trend is expected to continue. China is continuing its use of Health Technology Assessment, a tool used to evaluate clinical effectiveness and economic value to manage public health budgets, and is controlling mark-ups within the country using a two-invoice limited system, aiming to regulate the pricing of pharmaceutical products and certain types of medical devices. Pfizer, along with most off-patent originators, has mostly not been successful in the VBP bidding process. The government has indicated that additional drugs which are past patent-based exclusivity expiry (including biological products) could be subjected to VBP qualification in future rounds. Pfizer did not participate in the eleventh national VBP round in 2025 because it did not include any relevant Pfizer products. While certain details of future QCE expansion have been made available, we are unable to determine the impact on our business of the various pricing measures underway.\nHealthcare Provider Transparency and Disclosures.\n\nSeveral countries have implemented laws requiring (or industry trade associations have recommended) disclosure of transfers of value made by pharmaceutical companies to healthcare providers and/or healthcare organizations, such as academic teaching hospitals.\nIntellectual Property\n.\n Reliable patent protection and enforcement around the world are among the key factors we consider for continued business and R&D investment. The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (WTO-TRIPS) requires participant countries to provide patent and other intellectual property-related protection for pharmaceutical products by law, with a time-limited exemption provided for least-developed countries. While some countries have made improvements, we still face patent grant, enforcement and other intellectual property challenges in many countries.\nWhile the global intellectual property policy environment has generally improved following implementation of WTO-TRIPS and bilateral/multilateral trade agreements, our growth and ability to bring new product innovation to patients depends on maintaining those standards and further progress in intellectual property protection. In certain developed international markets, governments maintain relatively effective intellectual property policies. However, in the EU, the review of the pharmaceutical legislation is reducing or modifying the overall period of regulatory data and market protection. In several emerging market countries and multilateral institutions, governments continue to address the role of intellectual property in the context of, for example, access to medicines.\nConsiderable political and economic pressure has weakened current intellectual property protection in some countries and has led to policies such as more restrictive standards for obtaining patents and more difficult procedures for patenting biopharmaceutical inventions, restrictions on patenting certain types of inventions, revocation of patents, laws or regulations that promote or provide broad discretion to issue a compulsory license, weak intellectual property enforcement and failure to implement effective regulatory data protection. Our industry advocacy efforts focus on seeking a fair and transparent business environment for foreign manufacturers, underscoring the importance of strong intellectual property systems for all innovative industries (both domestic and foreign) and helping improve patients\u2019 access to innovative medicines and vaccines.\nData Privacy.\nWe are subject to extensive privacy and data protection laws and regulations around the world concerning the collection, use and sharing of personal data. We routinely collect and use sensitive personal data relating to health. The legislative, regulatory and litigation landscape for privacy and data protection requirements is rapidly evolving and changing, and may limit our ability to use data globally or across borders. Data protection requirements are not universal and can conflict between jurisdictions. Compliance with those laws and regulations is made more complex by the lack of consistent standards, common definitions, or clear regulatory expectations. We also anticipate continued and new uses of data as we explore the use of AI tools both internally and externally. Enforcement of these data privacy and security laws and regulations is increasing and litigation is becoming more common, and we expect such trends will continue. Any failure or perceived failure by us to comply with applicable privacy and data protection laws and regulations, including cybersecurity breaches or incidents, could subject us to significant fines and penalties, and/or litigation, as well as negatively impact our reputation.\nENVIRONMENTAL MATTERS\nOur operations are affected by national, state and/or local environmental laws. We have made, and intend to continue to make, the expenditures necessary for compliance with applicable laws. We also are cleaning up environmental contamination from past industrial activity at certain sites. We incurred capital and operational expenditures in 2025 for environmental compliance purposes and for the clean-up of certain past industrial\nPfizer Inc.\n2025 Form 10-K\n14\nactivity as follows: approximately $125 million in environment-related capital expenditures and approximately $188 million in other environment-related expenses.\nWhile capital expenditures or operating costs for environmental compliance cannot be predicted with certainty, we do not currently anticipate they will have a material effect on our capital expenditures or financial position. See also\nNote 16A3\n.\nAs a science guided organization, we take a proactive approach to our environmental sustainability initiatives. In 2022, we announced a goal to further reduce greenhouse gas (GHG) emissions and achieve the Science Based Target Initiative\u2019s voluntary Net-Zero Standard by 2040. As part of this goal, Pfizer aims to decrease its GHG emissions by 95% and its value chain emissions by 90% from 2019 levels by 2040. To support our goal, we are developing and implementing our emission reduction plans, including strategies to achieve reductions throughout our value chain and setting expectations for our suppliers to establish science-aligned GHG emission reduction goals. Our emission reduction plan-related expenses and capital spending incurred for 2025 were not material to our consolidated financial statements. While we expect to incur incremental capital and operational expenditures to meet our goal, we do not currently anticipate they will have a material effect on our financial position in the near term. Longer term uncertainties such as the likelihood of commercially available technologies make it difficult to predict the financial impact of meeting the goal. We continue to assess and monitor the financial impact of our GHG emission reduction plans.\nFor a discussion of the risks associated with climate change, see the\nItem 1A. Risk Factors\u2014\nResponsible\n Business P\nractices\n section.\nOUR PEOPLE\nOur purpose is:\nBreakthroughs that change patients\u2019 lives\n. These breakthroughs are delivered through the collaboration of our talented workforce. As of December 31, 2025, we employed approximately 75,000 people worldwide. Our ability to successfully deliver on our purpose is dependent on our people. Creating a purpose-driven workplace that attracts, nurtures, and retains top talent is a priority. We strive to build a vibrant and supportive work culture that is designed to empower colleagues to innovate, collaborate, and contribute meaningfully to improving global health. We invest in comprehensive development programs, provide merit-based opportunities for advancement, and encourage work-life integration through flexible work arrangements. We work to create an environment that prioritizes colleagues\u2019 health and wellness. Our people-centric approach touches every aspect of the employee experience \u2014 including recruiting, benefits, compensation and development. Our Pfizer values \u2014 courage, excellence, equity and joy \u2014 remain core to all that we do.\nCulture.\n We cultivate community in our workplace to deliver on our purpose. As we work to bring together people with different perspectives and experiences we strive to foster a collaborative environment. We continue to execute a merit-based talent approach, focusing on identifying candidates with the right qualifications and ensuring they are considered for the opportunities based on their skills, abilities, and performance. We aim to provide everyone with an opportunity to demonstrate their merit. Our leaders set the tone for the company, embracing accountability and transparency, while promoting a vibrant culture in which colleagues are free to speak up and are encouraged to share views and raise concerns without fear of retaliation.\nColleague Engagement\n. We are committed to helping our colleagues reach their full potential by recognizing their performance and leadership capabilities, while providing meaningful opportunities for growth and development. Open communication and feedback are foundational to performance, colleague engagement, and teamwork. Pfizer managers regularly engage in discussions on colleague performance and leadership behaviors to encourage breakthrough goals and strengthen leadership capabilities. Equally important is our commitment to listening and responding to colleague feedback, fostering a healthy work environment that attracts and retains talent.\nWe are passionate about creating safe spaces at work, so our colleagues feel able and encouraged to provide feedback and raise concerns and questions. The Office of the Ombuds provides information and guidance to help colleagues address and resolve work-related issues. We also host company-wide safe space calls and provide various other public, private, and anonymous channels for colleagues to speak up without fear of retaliation.\nWe gather colleague feedback through multiple channels to help ensure a comprehensive understanding of colleague experiences and needs, including an annual engagement survey that helps us track priority areas and equip leaders with actionable insights. Additionally, we conduct focus groups, check-in surveys, and colleague forums at various points in the employee lifecycle. These additional listening mechanisms are designed to capture real-time feedback, adapt to evolving needs, and continuously improve our ways of working.\nColleague recognition drives engagement, a sense of belonging, motivation, and productivity. Our global rewards and recognition program, Bravo, lets colleagues celebrate and acknowledge each other for demonstrating Pfizer values in a way that makes an impact on the company, a colleague, a team or a patient.\nPerformance and Leadership\n.\nPfizer prioritizes a leadership mindset which complements our Pfizer values and behaviors and is designed to foster a workplace that is more dynamic, innovative, and compassionate, empowering all team members to contribute to our ambitious business goals. Our \u201cProject-Based Ways of Working\u201d allows colleagues to take on leadership roles and decision responsibilities through training, coaching, and a robust support network. Our performance management approach provides our colleagues and their managers with opportunities to set goals, receive feedback and engage in discussions on performance aimed at helping colleagues grow and develop.\nGrowth and Development\n. Colleague growth is at the heart of building a future-ready workforce that thrives amid change and drives innovation, while also empowering each colleague to achieve their personal aspirations and success. As we navigate an evolving healthcare landscape, staying agile and competitive is essential to delivering breakthroughs for patients. That is why we prioritize opportunities for learning, skill-building, and growth. Such opportunities are designed to equip colleagues with the skills to tackle new challenges and seize emerging opportunities, including related to AI and technology innovation. Investing in career development not only reaffirms our commitment to colleagues\u2019 potential, but also drives engagement, productivity, and overall job satisfaction.\nHealth, Safety and Well-Being\n. At Pfizer, protecting the health, safety, and well-being of colleagues and contingent workers, all of whom are essential to driving our business forward, is an integral part of how we operate. Pfizer's Global Environment, Health & Safety (EHS) Policy and supporting standards outline our approach to assessment, evaluation, elimination, and mitigation of EHS risks across our operations globally. Our leadership is accountable for EHS compliance and risk management. Colleagues and contingent workers receive EHS training relevant to their job roles, including measures to prevent workplace incidents and injuries. In addition, we conduct workplace assessments, inspections, and audits to evaluate and continuously improve our EHS arrangements. We are committed to supporting and encouraging our colleagues\u2019 well-being. We use results from our annual colleague engagement survey and other colleague feedback forums to inform the wellness services we offer.\nPfizer Inc.\n2025 Form 10-K\n15\nPay Equity\n.\n Our commitment to pay equity for all colleagues is based on our values and our intention to continue to build a highly motivated workforce.\n\nWe are committed to equitable pay practices at Pfizer for colleagues based on role, education, experience, performance, and location and we conduct a global pay equity analysis on an annual basis.\nITEM\u00a01A.\nRISK FACTORS\nThis section describes the material risks to our business, which should be considered carefully in addition to the other information in this report and our other filings with the SEC. Investors should be aware that it is not possible to predict or identify all such factors and that the following is not meant to be a complete discussion of all potential risks or uncertainties. Additionally, our business is subject to general risks applicable to any company, such as economic conditions, geopolitical events, extreme weather and natural disasters. If known or unknown risks or uncertainties materialize, our business operations, financial condition, operating results (including components of our financial results), cash flows, prospects, reputation or credit ratings could be materially adversely affected now and in the future. The following discussion of risk factors contains forward-looking statements, as discussed in the\nForward-Looking Information and Factors that May Affect Future Results\n section.\nRISKS RELATED TO OUR BUSINESS, INDUSTRY AND OPERATIONS:\nMANAGED CARE TRENDS\nPrivate payors, such as health plans, and other managed care entities, such as PBMs, continue to take action to manage the utilization and costs of drugs in the U.S., the single largest market for biopharmaceutical products. The negotiating power of MCOs, PBMs and other private third-party payors has increased due to consolidation, and they, along with state and federal governments, increasingly employ tools to control costs and encourage utilization of certain drugs, including through the use of deductibles, utilization management tools, cost sharing or formulary placement. They may demand rebates and/or fees from biopharmaceutical manufacturers for preferred formulary placement, or for unrestricted access on a drug formulary. The growing availability and use of higher-cost innovative specialty pharmaceutical medicines that treat rare life-threatening conditions has also increased payor interest in the deployment of cost-containment strategies. We may fail to obtain or maintain timely or adequate pricing or formulary placement of our products, or fail to obtain such formulary placement at pricing that reflects the value of the treatment.\nSome payers are directing beneficiaries to third-party patient assistance programs, rather than covering certain treatments. In other instances, insurers disallow manufacturers\u2019 co-pay assistance from counting toward reaching the deductible or out-of-pocket maximum. Both approaches can delay access to treatment or result in treatment abandonment. Further, consumers are facing responsibility for a larger portion of their prescription costs, or administrative hurdles to access, and may favor lower-cost, or generic alternatives, or seek direct-to-consumer medications outside of insurance plans.\nThird-party payors also use additional measures such as new-to-market blocks, exclusion lists, carve-outs or indication-based pricing and value-based pricing/contracting to improve their cost containment efforts and cost efficiency. Such payors are also increasingly imposing utilization management tools requiring prior authorization for a branded product or requiring the patient to first fail on one or more other products before permitting access to a particular branded medicine. As the U.S. third-party payor market consolidates further, and as the IRA prices become publicly available, we may face greater pricing pressure from third-party payors, including insurers and PBMs, as they continue to drive more of their patients to use lower cost alternatives or seek even larger rebates to control costs or offset losses from the IRA and other market pressures. For additional information on the IRA see the\nItem 1. Business\n\u2013\u2013\nPricing Pressures and Managed Care Organizations\n\nand\n\u2013\u2013Government Regulation and Price Constraints\n and\nItem 1A. Risk Factors\n\u2013\u2013\nPricing and Reimbursement\n\nsections.\nAlso, business arrangements in this area are subject to a high degree of government scrutiny, and available exceptions and safe harbors under applicable federal and state fraud and abuse laws are subject to change through legislative and regulatory action, as well as evolving judicial interpretations. Our approach to these arrangements may also be informed by such government and industry guidance.\nCOMPETITIVE PRODUCTS\nCompetitive product launches have and may erode future sales of our products, including our existing products and those currently under development, or result in product obsolescence. Such launches continue to occur, and potentially competitive products are in various stages of development. We cannot predict with accuracy the timing or impact of the introduction of competitive products that treat or prevent diseases and conditions like those treated or prevented by our in-line products and product candidates. In addition to the impact of competitive product launches, we are facing an increasing number of potential competitors worldwide, including from China, that have expanded R&D capabilities.\nSome of our competitors may have competitive, technical or other advantages over us for the development of technologies and processes or greater experience in particular therapeutic areas, and technological innovation and/or consolidation among certain pharmaceutical and biotechnology companies can enhance such advantages. These advantages may make it difficult for us to compete with them successfully to discover, develop and market new products and for our current products to compete with new products or indications they may bring to market. Our products and product candidates compete, and may compete in the future, against products or product candidates that offer higher rebates or discounts, exclusionary contracting, lower prices, equivalent or superior efficacy and/or coverage, better safety or tolerability profiles, easier administration, earlier market availability or other competitive features, including greater brand recognition or potential preference to prescribe existing competitor treatments over our novel therapies. For example, with the growing competition in the vaccine space, we are subject to increasing discounts to meet competitive dynamics and to help ensure our vaccines are available in retail pharmacies. If we are unable to compete effectively, this could reduce actual or anticipated future sales, which could negatively impact our results of operations.\nSeveral manufacturers, including Pfizer, have signed voluntary agreements with the Trump Administration designed to ensure U.S. patients pay lower prices for their prescription medicines. This may impact the competitive environment, including pricing dynamics for any of our current or potential future products, as well as contracting with payers.\nIn addition, competition from manufacturers of generic drugs, including from generic versions of competitors\u2019 branded products that lose their market exclusivity, is a major challenge for our branded products. Certain of our products have experienced significant generic competition over the last few years. We anticipate a significant reduction of revenue from patent-based or regulatory exclusivity expiries in 2026 through 2030 as several of our in-line products experience these expirations, with the rate of the reduction of revenues from patent-based or regulatory exclusivity expiries expected to significantly accelerate over the next few years. See the\nItem 1. Business\u2014Patents and Other Intellectual Property Rights\n\nPfizer Inc.\n2025 Form 10-K\n16\nsection. In China, we expect to continue to face intense competition by certain generic manufacturers, which has resulted, and may result in the future, in price cuts and volume loss of some of our products.\nIn addition, our patented products may face generic or biosimilar competition before patent-based and/or regulatory exclusivity expires, including from \u201cat-risk\u201d launch (despite pending patent infringement litigation against the generic or biosimilar product) by a manufacturer of a generic or biosimilar version of one of our patented products. Generic and biosimilar manufacturers have filed or could file applications with the FDA seeking approval of product candidates that they claim do not infringe our or our collaboration and licensing partners\u2019 patents or claim that our or our collaboration and licensing partners\u2019 patents are not valid. We and our licensing and collaboration partners also face challenges in various jurisdictions by generic drug manufacturers to patents covering products for which we have patent rights, licenses or co-promotion rights. See\nNote 16A1\n.\nWe may become subject to competition from biosimilars referencing our biologic products if competitors are able to obtain marketing approval for such biosimilars.\nWe also commercialize biosimilar products that compete with products of others, including other biosimilar products. The number of current and forthcoming competing biosimilars, coupled with Medicare\u2019s average sales price-based provider reimbursement methodology, is expected to increase pricing pressures on our biosimilar products. Uptake of our biosimilars may be lower due to various factors, such as access challenges where our product may not receive appropriate coverage/reimbursement access or remains in a disadvantaged position relative to an innovator product.\nFor additional information on competition our products face, see the\n\nItem 1. Business\n\u2014\nCompetition\n\nsection.\nCONCENTRATION\nWe recorded revenues of more than $1 billion for each of 12 products that collectively accounted for 65% of\nTotal revenues\n in 2025. For example, Eliquis accounted for 13% of\nTotal\n\nrevenues\n in 2025. See\nN\notes 1\n and\n17\n. If these products or any of our other major products were to, or continue to (if applicable), experience loss of patent protection (if applicable), changes in prescription or vaccination purchasing or growth rates, reduced product demand, material product liability litigation, unexpected side effects or safety concerns, regulatory proceedings or investigations, lower governmental and/or regulatory confidence, negative publicity affecting doctor or patient confidence, pressure from competitive products, changes in recommendations and coverage, changes in labeling, pricing and access pressures, including those related to the IRA and MFN,  or supply shortages or if a new, more effective product should be introduced, the adverse impact on our revenues could be significant and our revenue forecasts and expectations could prove to be inaccurate and we may fail to meet these expectations. In particular, certain of our products have experienced patent-based expirations or loss of regulatory exclusivity in certain markets in the last few years, and we expect certain products to face new or increased generic competition over the next few years. We anticipate a significant reduction of revenue from patent-based or regulatory exclusivity expiries in 2026 through 2030 as several of our in-line products experience these expirations. In addition, patents covering a number of our best-selling products are, or have been, the subject of pending legal challenges. For additional information on our patents, see the\nItem 1. Business\n\u2014\nPatents and Other Intellectual Property Rights\n section. Furthermore, our recent business development initiatives have been concentrated in certain therapeutic areas \u2014 for example, our acquisitions of Metsera and Seagen represent significant investments in obesity and oncology, respectively, which are extremely competitive therapeutic areas. In addition, revenues from Comirnaty and Paxlovid have decreased substantially over time and could continue to decrease. For Paxlovid, utilization is expected to follow infection trends, and revenues may fluctuate based on the timing, duration and severity of COVID-19 infections. For information on risks associated with Comirnaty and Paxlovid, see the\nCOVID-19\nsection below.\nIn addition, certain of our customers account for a significant portion of our revenues. If one of our significant customers should encounter financial or other difficulties, it might decrease the amount of business such customer does with us and/or we might be unable to timely collect all the amounts that such customer owes us or at all, which could negatively impact our results of operations. In addition, we expect that consolidation and integration of pharmacy chains and wholesalers will increase competitive and pricing pressures on pharmaceutical manufacturers, including us. See\nNote 17C\n\nfor a discussion of our significant customers.\nRESEARCH AND DEVELOPMENT\nThe discovery and development of new products, as well as the development of additional uses for existing products, are necessary for the continued strength of our business. Our product lines must be replenished over time to offset revenue losses when products lose exclusivity or market share or to respond to healthcare and innovation trends, as well\nas to provide for earnings growth, primarily through internal R&D or through collaborations, acquisitions, JVs, licensing or other arrangements, including co-funding agreements with third-parties\n. Growth depends in large part on our ability to identify and develop new products or new indications for existing products that address unmet medical needs and receive reimbursement from payors. However, balancing current growth, investment for future growth and the delivery of shareholder return remains a major challenge. The costs of product development continue to be high and are growing, as are regulatory requirements in many therapeutic areas, which may affect the complexity of drug trials, and the number of candidates we are able to fund as well as the sustainability of the R&D portfolio. Decisions made early in the development process of a drug or vaccine candidate can have a substantial impact on the marketing strategy and payor reimbursement possibilities if the candidate receives regulatory approval. We try to plan clinical trials prudently and to reasonably anticipate and address challenges, but there is no assurance that an optimal balance between trial conduct, speed and desired outcome will be achieved. In addition, potential quality issues may be identified in the course of a clinical trial that cannot be remediated to the satisfaction of a regulatory authority that may take actions within the scope of its enforcement authority, including excluding data and placing restrictions on future clinical trials.\nAdditionally, our product candidates can fail at any stage of the R&D process, and may not receive regulatory approval even after many years of R&D. We may fail to correctly identify compounds or indications for which our science is promising or allocate R&D investment resources efficiently, and failure to invest in the right technology platforms, therapeutic areas, product classes, geographic markets and/or licensing opportunities could adversely impact the productivity of our pipeline. Further, even if we identify areas with the greatest commercial potential, the scientific approach may not succeed despite the significant investment required for R&D, and the product may not be as competitive as expected because of, among other things, the highly dynamic regulatory and market environments, the competitive landscape and the hurdles in terms of access, coverage and reimbursement. In addition, changes in the commercial landscape may impact our decisions around future product development.\nPfizer Inc.\n2025 Form 10-K\n17\nGLOBAL OPERATIONS\nWe operate on a global scale and could be affected by currency and interest rate fluctuations; global trade tensions; capital and exchange controls; local and global economic conditions including inflation, recession, volatility and/or lack of liquidity in capital markets; expropriation and other restrictive government actions; changes in intellectual property; legal protections and remedies; trade regulations; tariffs; tax laws and regulations; and procedures and actions affecting approval, production, pricing, and marketing of, reimbursement for and access to our products, as well as impacts of political or civil unrest or military action, including, without limitation, the conflicts between Russia and Ukraine and in the Middle East and their economic consequences, geopolitical instability, terrorist activity, unstable governments and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change.\nSome emerging market countries may be particularly vulnerable to periods of financial, economic or political instability or significant currency fluctuations or may have limited resources for healthcare spending. As a result of these and other factors, our strategy to grow in emerging markets may not be successful, and any growth rates in these markets may not be sustainable. Additionally, local economic conditions may adversely affect the ability of payors, as well as our distributors, customers, suppliers and service providers, to pay for our products, or otherwise to buy necessary inventory or raw materials, and to perform their obligations under agreements with us.\nGovernment financing and economic pressures can lead to negative pricing pressure in various markets where governments take an active role in setting prices, access criteria (e.g., through health technology assessments) or other means of cost control. For additional information on government pricing pressures, see the\nItem 1. Business\u2014Government Regulation and Price Constraints\n section.\nWe continue to monitor the global trade environment and potential trade conflicts, sanctions and impediments that could impact our business. If trade restrictions or tariffs reduce global economic activity, potential impacts could include declining sales; increased costs; volatility in foreign exchange rates; a decline in the value of our financial assets and pension plan investments; required increases of our pension funding obligations; increased government cost control efforts; delays or failures in the performance of customers, suppliers and other third parties on whom we may depend for the performance of our business; and the risk that our allowance for doubtful accounts may not be adequate. In addition, issued or future executive orders, or other new or changes in laws, regulations or policy regarding tariffs or other trade or foreign policy, could have a material adverse effect on our business, earnings, cash flow, liquidity and financial guidance. As discussed above, in September 2025, Pfizer entered into a voluntary agreement with the Trump Administration and will receive a three-year grace period during which time Pfizer products will not face Section 232 tariffs, provided we further invest in manufacturing in the U.S. We face risks and uncertainties associated with the agreement and negotiating the binding final agreement, including the possibility of, among other things, unfavorable terms and increased costs related to tariffs and investment requirements and our ability to meet those investment requirements, as well as the possibility of tariffs that could be outside the scope of the agreement. The actual impact of any new tariffs on our business would be subject to a number of factors including, but not limited to, restrictions on trade, the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs or other retaliatory actions imposed by other countries.\nWe operate in many countries and transact in many different currencies. Changes in the value of those currencies relative to the U.S. dollar, or high inflation or deflation in those countries, can impact our revenues, costs and expenses and our financial guidance. Significant portions of our revenues, costs and expenses, as well as our substantial international net assets, are exposed to exchange rate changes. In 2025, 41% of our total revenues were derived from international operations, including 21% from Europe and 12% from China, Japan and the rest of the Asia Pacific region. Future changes in exchange rates or economic conditions and the impact they may have on our results of operations, financial condition or business are difficult to predict. For additional information about our exposure to foreign currency risk, see the\nAnalysis of Financial Condition, Liquidity, Capital Resources and Market Risk\n section within MD&A.\nIn addition, our borrowing, pension benefit and postretirement benefit obligations and interest-bearing investments are subject to risk from changes in interest and exchange rates. The risks related to interest-bearing investments and borrowings and the measures we have taken to help contain them are discussed in the\nAnalysis of Financial Condition, Liquidity, Capital Resources and Market Risk\n section within MD&A and\nNote 7E\n. For additional details on critical accounting estimates and assumptions for our benefit plans, see the\nSignificant Accounting Policies and Application of Critical Accounting Estimates and Assumptions\u2014Benefit Plans\n section within MD&A and\n\nNote 11\n.\nPRODUCT MANUFACTURING, SALES AND MARKETING RISKS\nWe could encounter difficulties, delays or inefficiencies in our supply chain, product manufacturing and distribution networks, as well as sales or marketing, due to regulatory actions, shut-downs, work stoppages or strikes, approval delays, withdrawals, recalls, penalties, supply disruptions, shortages or stock-outs at our facilities or third-party facilities that we rely on, reputational harm, the impact to our facilities due to health pandemics or natural or man-made disasters, including as a result of climate change, product liability or unanticipated costs. Examples of such difficulties or delays include the inability to increase or maintain production capacity commensurate with demand; challenges related to component materials to maintain supply and/or appropriate quality standards throughout our supply network and/or comply with applicable regulations; inability to supply certain products due to voluntary product recalls or withdrawals, including, for example, our voluntary withdrawal of all lots of Oxbryta in all markets where it is approved; and supply chain disruptions at our facilities or at a supplier or vendor. In addition, we engage contract manufacturers, and, from time to time, our contract manufacturers may face difficulties or are unable to manufacture our products at the necessary quantity or quality levels.\nRegulatory agencies periodically inspect our manufacturing facilities, as well as third-party facilities that we rely on, to evaluate compliance with cGMP or other applicable requirements. Failure to comply with these requirements may subject us to possible legal or regulatory actions, such as warning letters, suspension of manufacturing, seizure of product, injunctions, debarment, product recalls, delays or denials of product approvals, import bans or denials of import certifications.\nIn response to requests from various regulatory authorities, manufacturers across the pharmaceutical industry, including Pfizer, are evaluating their product portfolios for the potential presence or formation of nitrosamines and we are actively engaging with regulatory authorities on this topic.\nIf nitrosamines are detected in products, this may lead to submission of comprehensive data packages to regulatory authorities to support discussions on the relevant intake limit for the product and potential impact on patient supply, and, in some instances, may lead to market action for such products.\nFor example, i\nn 2021, Pfizer recalled Chantix due to the presence of a nitrosamine, N-nitroso-varenicline, at or above acceptable intake limits communicated by various regulatory authorities. Following issuance of updated guidance on acceptable intake limits for N-nitroso-varenicline by regulatory authorities, in 2025, Chantix returned to market in the U.S. and in certain international markets.\nSee the\nOverview of Our Performance, Operating Environment, Strategy and Outlook\n\u2014\nOur Operating Environment\nsection within MD&A.\nPfizer Inc.\n2025 Form 10-K\n18\nCOLLABORATIONS AND OTHER RELATIONSHIPS WITH THIRD PARTIES\nWe depend on third-party collaborators, service providers, and others in the research, development, manufacturing and commercialization of our products and product candidates and also enter into JVs and other business development transactions. To achieve expected longer-term benefits, we may make substantial upfront payments as part of these transactions, which may negatively impact our earnings or cash flows. We rely heavily on these parties for multiple aspects of our drug development, manufacturing and commercialization activities, but we do not control many aspects of those activities. We also outsource certain services, including activities related to transaction processing, accounting, IT, manufacturing, clinical trial recruitment and execution, clinical lab services, non-clinical research, safety services, integrated facilities management and other areas. In conducting clinical trials, we may depend on contract research organizations to handle regulatory filings, monitor site performance and raise potential quality matters relating to clinical trials. Failure by one or more of the third-party collaborators, service providers and others to complete activities on schedule or in accordance with our expectations or to meet their contractual or other obligations to us; failure of one or more of these parties to comply with applicable laws or regulations; disruptions in one or more of these parties\u2019 businesses, including unexpected demand for or shortage of raw materials or components, cyber-attacks on supplier systems, labor disputes or shortage and inclement weather, as well as natural or man-made disasters or pandemics; or any disruption in the relationships between us and these parties have or could delay or prevent the development, approval, manufacturing or commercialization of our products and product candidates, expose us to suboptimal quality of service delivery or deliverables, result in repercussions such as missed deadlines or other timeliness issues, erroneous data and supply disruptions, and could also result in non-compliance with legal or regulatory requirements or industry standards, including Good Clinical Practice (GCP) and other requirements, or subject us to reputational harm, all with potential negative implications for our product pipeline and business. Further, our revenues will be adversely affected by the termination or expiration of collaboration and co-promotion agreements that we have entered into and that we may enter into from time to time.\nCOUNTERFEIT PRODUCTS\nOur reputation, in-line and pipeline portfolios render our medicines and vaccines prime targets for counterfeiters. Counterfeits pose a significant risk to patient health and safety because of the conditions under which they are manufactured\u2014often in unregulated, unlicensed, uninspected, and unsanitary sites\u2014as well as the lack of regulation of their contents. Failure to mitigate this threat could adversely impact consumers who use our products, potentially causing them harm. This situation, in turn, may result in the loss of patient confidence in the Pfizer name and in the integrity of our medicines and vaccines, and potentially impact our business through lost sales, product recalls, and possible litigation. The prevalence of counterfeit medicines is an industry-wide issue due to a variety of factors, including the adoption of e-commerce and the proliferation of heavily marketed compounded medicines. As consumers increasingly turn to the internet as a source for many products including medicines, they are at the same time increasingly exposed to fake medicines via the internet as criminals increasingly distribute counterfeit and substandard medicines through \u201crogue\u201d online pharmacies. The internet exposes patients to greater risk as it is a preferred vehicle for dangerous counterfeit offers and scams that target unsuspecting consumers. Traffic to these generally deceptive pharmacy sites is largely driven by misplaced trust in sophisticated internet retailers and social media offers coupled with the convenience e-commerce affords consumers. Counterfeiters generally target any medicine or vaccine boasting strong demand and we have observed heightened counterfeit and fraud attempts to our internal medicine portfolio, our oncology portfolio, as well as products utilized in the treatment of COVID-19 and competitor products in therapeutic areas where we are conducting R&D.\nWe consistently invest in an enterprise-wide strategy to aggressively combat counterfeit threats by educating patients and healthcare providers about the risks, investing in innovative technologies to detect and disrupt sophisticated internet offers and scams, proactively monitoring and interdicting supply with the help of law enforcement, and advising legislators and regulators. However, our efforts and those of others may not be entirely successful, and the presence of counterfeit medicines may continue to increase.\nRISKS RELATED TO GOVERNMENT REGULATION AND LEGAL PROCEEDINGS:\nPRICING AND REIMBURSEMENT\nOur future results could be adversely affected by new or changes in U.S. and international governmental regulations that mandate price controls, use international reference pricing, including MFN, increase required rebates, establish mandatory CMMI pilots (which are models designed to test certain payment and delivery systems to determine whether they result in cost savings), create coverage criteria, or limit patient access to our products. For instance, government cuts to Affordable Care Act (ACA) subsidies and state Medicaid funding could have a material impact on the pricing and demand for our products. In addition to the expansion of price controls in the U.S. in the IRA, or through a CMMI demonstration program affecting Medicare or Medicaid, the adoption of more restrictive coverage policies and price controls in new and existing jurisdictions, or the failure to obtain or maintain coverage and pricing could also adversely impact revenue. We expect pricing pressures and other cost containment measures for drugs and vaccines will continue.\nIn the U.S., pharmaceutical product pricing is subject to government and public scrutiny and calls for reform, and, as a result, many of our products are subject to increasing pricing pressures. We expect to see continued focus by the U.S. government on regulating pricing and access to medicine. For example, in May and July 2025, the Trump Administration issued the MFN Initiatives and, in September 2025, we announced an agreement with the Trump Administration in which we voluntarily agreed to implement measures designed to make certain drug prices for U.S. patients more comparable to those in other developed countries (the MFN Agreement). We are also participating in the TrumpRx.gov platform, which allows U.S. patients to purchase certain medicines at significant discounts to current retail prices.\n These discounts may adversely affect revenue generated from participating drugs. Further, we face risks and uncertainties associated with the MFN Agreement,\nincluding the possibility of, among other things, unfavorable impacts to pricing and access.\n The MFN Agreement and broader U.S. policy efforts to implement measures designed to make certain drug prices for U.S. patients more comparable to those in other developed countries is subject to risks and uncertainties and could, among other things, negatively impact our pricing strategies, product demand or access, or competitive positioning across global markets, and may adversely affect revenues in certain markets.\nAdditionally, the drug pricing provisions of the IRA are being implemented over the next several years. The IRA directs HHS to set the prices of certain high-expenditure, single-source drugs and biologics covered under Medicare. The IRA also imposes rebates under Medicare Part B and Medicare Part D which require manufacturers to pay rebates if price increases outpace inflation relative to a benchmark period, and replaces the Medicare Part D coverage gap discount program with a new discounting program. The drug pricing provisions of the IRA began to be implemented in 2022 and implementation efforts will continue in the coming years. In August 2023, CMS published the first ten medicines subject to the MDPNP, which included Eliquis. In August 2024, the government released the new Medicare price for Eliquis, which became effective January 1, 2026. In January 2025, CMS announced the selection of another 15 drugs from Medicare Part D for the Maximum Fair Price, with prices to be set and effective on January 1, 2027. Ibrance and Xtandi were included in the list of 15 drugs selected. Another 15 drugs from\nPfizer Inc.\n2025 Form 10-K\n19\nMedicare Part B or Medicare Part D were selected on January 27, 2026, for the Maximum Fair Price to be set and effective on January 1, 2028. Xeljanz was included in the list of 15 drugs selected. It is possible that more of our products could be selected in future years, which could, among other things, lead to lower revenues. Health plans may also require rebates in addition to the Maximum Fair Price for preferred placement on a Medicare plan formulary. The MDPNP is currently subject to legal challenges and therefore, the outcome remains uncertain. We continue to evaluate the impact of the IRA on our business, operations and financial condition and results as the full effect of the IRA on our business and the pharmaceutical industry remains uncertain. For additional information, see the\nItem 1. Business\n\u2014\nGovernment Regulation and Price Constraints\n\nsection.\nPayors may give preference to generic drugs and biosimilars more aggressively to generate savings and attempt to stimulate additional price competition. In addition, we expect that consolidation and integration among pharmacy chains, wholesalers and PBMs will increase pricing pressures in the industry. Some states have implemented, and others are considering, patient access constraints or cost cutting under state regulated programs including the Medicaid program. States have continued to focus on addressing drug costs, generally by increasing price transparency or attempting to limit drug price increases for state-regulated insurance. Measures to regulate prices or payment for pharmaceutical products, including legislation on drug importation, international reference pricing and prescription drug affordability boards (PDABs) that seek to impose reimbursement limits for certain drugs, could adversely affect our business. For additional information on U.S. pricing and reimbursement, see the\nItem 1. Business\n\u2014\nGovernment Regulation and Price Constraints\n\nsection.\nWe encounter similar regulatory and legislative issues in most other countries in which we operate. In certain markets, such as in EU member states, the U.K., Japan, China, Canada and Australia, governments have significant power as large single payors to regulate prices, access criteria, or impose other means of cost control, particularly as a result of global financing pressures. For example, the QCE and VBP tender process in China has resulted in significant price cuts for off-patent medicines. Additionally, in the EU, the European Parliament and the European Council reached an agreement in December 2025 on the EU Pharma Package \u2013 the largest reform of the EU\u2019s Pharmaceutical Legislation in 20 years. The reform still requires formal approval by both institutions and will enter into force upon publication in the EU\u2019s Official Journal, expected in 2026. Most provisions are expected to apply from 2028, following a two-year transition period. This landmark reform is expected to significantly influence the way innovative medicines are developed, authorized, monitored, and accessed across the EU.\nIn addition, the European Regulation on Health Technology Assessment (EU HTA-R) took effect in January 2025, introducing a single EU-level submission file for joint clinical assessments for oncology medicines and advanced therapy medicinal products. The EU HTA-R will be extended to orphan medicines in January 2028 and, as of 2030, will cover all medicinal products authorized in the EU through the centralized marketing authorization procedure. For additional information regarding these government initiatives, see the\nItem 1. Business\n\u2014\nGovernment Regulation and Price Constraints\n section. We anticipate that these and similar initiatives will continue to increase pricing and access pressures globally. In addition, in many countries, with respect to our vaccines, we participate in a tender process for selection in national immunization programs. Failure to win national immunization tenders or to obtain acceptable pricing, as well as recent entry of additional competitors, could adversely affect our business.\nU.S. HEALTHCARE REGULATION\nThe U.S. healthcare industry is highly regulated and subject to frequent and substantial changes. Major U.S. healthcare reform occurred with the passage of the OBBBA on July 4, 2025, a budget reconciliation bill that includes significant funding cuts to Medicaid, the Health Insurance Marketplaces, and the Medicare Physician Fee Schedule. The Congressional Budget Office (CBO) estimates the OBBBA will reduce federal healthcare spending and lead to a 10 million increase in the U.S. uninsured population, all of which could lead to increased pricing controls and lower demand for our products. Any additional efforts at the U.S. federal or state levels to reform the healthcare system by changing the way healthcare is provided or funded could have a material impact on us. For additional information on U.S. healthcare regulation, see the\nItem 1. Business\u2013\u2013Government Regulation and Price Constraints\n section. Other U.S. federal or state legislative or regulatory action and/or policy efforts could adversely affect our business, including, among others, general budget control actions, changes in patent laws, the importation of prescription drugs to the U.S. at prices that are regulated by foreign governments, revisions to reimbursement of biopharmaceuticals under government programs that could reference international prices or require new discounts, including through a CMMI demonstration, the FDA's recently adopted policy of disclosing Complete Response Letters for unapproved drug candidates and the attendant risk of disclosure of trade secrets or confidential commercial information, limitations on interactions with healthcare professionals and other industry stakeholders, restrictions on pharmaceutical advertising, or the use of comparative effectiveness methodologies that could be implemented in a manner that focuses primarily on cost differences and minimizes the therapeutic differences among pharmaceutical products and restricts access to innovative medicines. In addition, we may face increased risks to, among other things, our business, revenue, earnings, reputation or financial guidance, as a result of recent or potential changes to vaccine or other healthcare policy in the U.S. Further, the evolving vaccine landscape is becoming more challenging and increases risks to Pfizer. Among other things, risks include changing regulatory requirements, including for potential development or approval of our vaccine candidates, government investigations, changes in legislation, policy, liability landscape or other administrative actions, changes, delays or failure to receive recommendations, reimbursement, regulatory approvals and coverage for our vaccines, restrictions on pharmaceutical advertising and changes to government agencies and advisory boards. For example, in January 2026, the CDC unilaterally reduced the number of immunizations routinely recommended for all children in the U.S.\nAny additional reduction of U.S. federal spending on entitlement programs beyond the IRA, including Medicare, Medicaid, or any other publicly funded or subsidized health programs, and the 340B Program, may affect payment for our products or services provided using our products. Any other significant spending reductions or cost controls affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented could have an adverse impact on our results of operations. The IRA is being implemented largely through government guidance and as its effect on Medicare and commercial markets evolve, we will continue to evaluate the potential impacts to our business.\nWe expect additional drug cost containment efforts at both the federal and state levels, as evidenced by the MFN Initiatives and the December 2025 issue by HHS of proposed rules for mandatory CMMI pilots which could require additional price concessions. Further, commercial payors often follow Medicare coverage policy and payment limitations when setting their own payment rates. Any reduction in cost or other containment measures may similarly be adopted by commercial plans. Coverage policies and reimbursement rates for commercial plans may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products, less favorable coverage policies and reimbursement rates may be implemented in the future.\nDEVELOPMENT, REGULATORY APPROVAL AND MARKETING OF PRODUCTS\nThe discovery and development of drugs, vaccines and biological products are time consuming, costly and unpredictable. The outcome is inherently uncertain and involves a high degree of risk due to the following factors, among others:\nPfizer Inc.\n2025 Form 10-K\n20\n\u2022\nThe process from early discovery to design and adequate implementation of clinical trials to regulatory approval can take many years and have high costs.\n\u2022\nWe may have difficulties recruiting and enrolling patients for clinical trials on a consistent basis.\n\u2022\nProduct candidates can and do fail at any stage of the process, including as the result of unfavorable pre-clinical and clinical trial results, or unfavorable new pre-clinical or clinical data and further analyses of existing pre-clinical or clinical data, including results that may not support further clinical development of the product candidate or indication.\n\u2022\nRegulatory decisions or feedback could impact the future development of our product candidates, including our vaccine candidates such as our next generation pneumococcal conjugate vaccine candidate.\n\u2022\nWe may need to amend our clinical trial protocols or conduct additional clinical trials under certain circumstances, for example, to further assess appropriate dosage or collect additional safety data.\n\u2022\nWe may not be able to meet anticipated pre-clinical or clinical endpoints, commencement and/or completion dates for our pre-clinical or clinical trials, regulatory submission dates, regulatory approval dates and/or launch dates.\n\u2022\nWe may not be able to successfully address all the comments received from regulatory authorities such as the FDA and the EMA, or be able to obtain approval for new products and indications from regulators.\n\u2022\nWe may experience increasing inconsistencies and unexpected changes in the evaluations and determinations made by the FDA during the process of applying for marketing approvals of our products due to reductions in workforce, personnel movements, and policy changes.\nRegulatory approvals of our products depend on a myriad of factors, including regulatory determinations as to the product\u2019s safety and efficacy. In the context of public health emergencies like the COVID-19 pandemic, regulators evaluate various factors and criteria to potentially allow for marketing authorization on an emergency or conditional basis. Additionally, clinical trial and other product data are subject to differing interpretations and assessments by regulatory authorities. As a result of regulatory interpretations and assessments or other developments that may occur during the review process, or even after a product is authorized or approved for marketing, a product\u2019s commercial potential could be adversely affected by potential emerging concerns or regulatory decisions regarding or impacting the scope of indicated patient populations, labeling or marketing, manufacturing processes, safety issues and/or other matters, including decisions relating to developments regarding potential product impurities. Also, certain of our products have received and may in the future receive approvals under accelerated approval pathways, or other determinations of regulatory flexibility by the FDA, where continued approval may be contingent upon confirmatory studies demonstrating the anticipated clinical benefit and/or safety profile.\nWe may not be able to receive or maintain favorable recommendations by technical or advisory committees, such as the ACIP or an FDA Advisory Committee, which may impact the availability or commercial potential, or insurance coverage of our products and product candidates. In addition, administrative decisions relating to our products or product candidates may not follow the expected process. For example, as discussed above, in January 2026 the CDC unilaterally reduced the number of immunizations routinely recommended for all children in the U.S. Further, claims and concerns that may arise regarding the safety and/or efficacy of in-line products and product candidates can negatively impact current or future product sales, as applicable, and potentially lead to regulator-directed risk evaluations and assessments, asset impairments, and/or consumer fraud, product liability and other litigation and claims, as well as product recalls or withdrawals, including our voluntary withdrawal of all lots of Oxbryta in all markets where it is approved, and any regulatory or other impact on Oxbryta or other sickle cell disease assets. Regulatory requirements may also result in a more challenging, expensive and lengthy regulatory approval process than anticipated due to requests for, among other things, additional or more extensive clinical trials prior to granting approval, or increased post-approval requirements. For these and other reasons discussed in this\nRisk Factors\n section, we may not obtain the approvals we expect within the timeframe we anticipate, or at all.\nPOST-AUTHORIZATION/APPROVAL DATA\nAs a condition to granting marketing authorization or approval of a product, the FDA may require, or the sponsor may voluntarily agree to undertake, post-marketing commitments such as additional clinical trials or other studies. The results generated in these trials have in the past impacted certain of our products and could impact our products in the future, such as by resulting in the loss of marketing approval, changes in labeling, and/or new or increased concerns about safety and/or efficacy, including newly discovered adverse events. Regulatory agencies in countries outside the U.S. often have similar regulations and may impose comparable requirements, although there are differences between the U.S., the EU and other international regulatory requirements, which may contribute to inconsistency or uncertainty in the marketability of our products across different jurisdictions. Post-marketing studies and clinical trials, whether conducted by us or by others, whether mandated by regulatory agencies or conducted voluntarily, and other emerging data about products, such as adverse event reports, may also adversely affect the availability or commercial potential of our products. Further, if safety or efficacy concerns are raised about a product in the same class as one of our products, those concerns could implicate the entire class; and this, in turn, could have an adverse impact on the availability or commercial viability of our product(s) or product candidates as well as other products in the class. The potential regulatory, commercial or other implications of post-marketing study results typically cannot immediately be determined. In September 2024, we made the decision to voluntarily withdraw Oxbryta in all markets where it was approved based on the totality of clinical data that indicated at that time the overall benefit of Oxbryta no longer outweighed the risk in the approved sickle cell patient population. Following a comprehensive process, in October 2025, the EMA adopted a negative opinion on benefit-risk for Oxbryta for the treatment of hemolytic anemia due to SCD, recommending that the marketing authorization for the product remain suspended. In the U.S., Pfizer\u2019s engagement with the FDA is ongoing. For more information, see the\nProduct Developments\n section within MD&A.\nLEGAL MATTERS\nWe are and may be involved in various legal proceedings, including patent litigation, product liability and other product-related litigation, including personal injury, consumer fraud, off-label promotion, securities, antitrust and breach of contract claims, commercial and other asserted and unasserted matters, environmental legal proceedings, government and tax investigations, employment litigation, tax litigation and other legal proceedings that arise from time to time in the ordinary course of our business. Litigation is inherently unpredictable, and excessive verdicts do occur. Although we believe that our claims and defenses in matters in which we are a defendant are substantial, we have in the past and could in the future incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations.\nClaims against our patents include challenges to the coverage and/or validity of our patents on various products or processes. There can be no assurance as to the outcome of these matters, and a loss in any of these cases could result in a loss of patent protection for the product at issue, which could lead to a significant loss of sales of that product and could materially affect future results of operations.\nPfizer Inc.\n2025 Form 10-K\n21\nWe are also involved in government investigations that arise in the ordinary course of our business. There continues to be a significant volume of government investigations and litigation against companies operating in our industry, both in the U.S. and around the world. Government investigations and actions have and could result in substantial criminal and civil fines and/or criminal charges, limitations on our ability to conduct business in applicable jurisdictions, corporate integrity or deferred prosecution agreements and other disciplinary actions, as well as reputational harm, including as a result of increased public interest in the matter. In addition, in a\n qui tam\n lawsuit in which the government declines to intervene, the relator may still pursue a suit for the recovery of civil damages and penalties on behalf of the government.\nOur sales and marketing activities, the pricing of our products and other aspects of our business are subject to extensive regulation under the FFDCA, the MDRP, the FCPA and other federal and state statutes, including those discussed elsewhere in this Form 10-K, as well as the AKS, anti-bribery laws, the False Claims Act, consumer protection statutes and similar laws in international jurisdictions. In addition to the potential for changes to relevant laws, the compliance and enforcement landscape is informed by government litigation, settlement precedent, advisory opinions, and special fraud alerts. Our approach to certain practices may evolve over time in light of these types of developments.\nRequirements or industry standards in the U.S. and certain jurisdictions abroad require pharmaceutical manufacturers to track and disclose financial interactions with healthcare professionals and healthcare providers and can increase government and public scrutiny of such financial interactions. If an interaction is found to be improper, government enforcement actions and penalties could result. Like many companies in our industry, we have from time to time received, and may receive in the future, inquiries and subpoenas and other types of information demands from government authorities. In addition, we have been and may in the future be subject to claims and other actions related to our business activities, brought by governmental authorities, as well as consumers and private payors. In some instances, we have incurred significant expense, civil payments, fines and other adverse consequences as a result of these claims, actions and inquiries. Such claims, actions and inquiries may relate to alleged non-compliance with laws and regulations associated with the dissemination of product (approved and unapproved) information, potentially resulting in government enforcement action and reputational damage. These risks may be heightened by the use of AI in our operations as well as in our digital marketing, including social media, mobile applications and blogger outreach, as well as direct-to-consumer marketing and digital platform offerings.\nWe and certain of our subsidiaries are also subject to numerous contingencies arising in the ordinary course of business relating to legal claims and proceedings, including environmental contingencies. Amounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. While we have accrued for worldwide legal liabilities which we have assessed as probable and reasonably estimable, no guarantee exists that additional costs will not be incurred or additional payments will not be required beyond the amounts accrued.\nFor additional information, including information regarding certain legal proceedings in which we are involved in, see\nNote 16A\n.\nRISKS RELATED TO INTELLECTUAL PROPERTY, TECHNOLOGY AND SECURITY:\nINTELLECTUAL PROPERTY PROTECTION\nOur success largely depends on our ability to market technologically competitive products. We rely and expect to continue to rely on a combination of intellectual property, including patent, trademark, trade dress, copyright, trade secret and domain name protection laws, as well as confidentiality and license agreements, to protect our intellectual property and proprietary rights. If we fail to obtain and maintain adequate intellectual property protection, we may not be able to prevent third parties from launching generic or biosimilar versions of our branded products, from using our proprietary technologies or from marketing products that are very similar or identical to ours. Our currently pending or future patent applications may not result in issued patents or be granted on a timely basis. Similarly, any term extensions that we seek may not be granted on a timely basis, if at all, and any term adjustments related to patent office delays in obtaining a patent may be reduced or eliminated entirely due to risks associated with changes in law relating to patent terms. In addition, our issued patents may not contain claims sufficiently broad to protect us against claims regarding validity, enforceability, scope and effective term made by parties with similar technologies or products or provide us with any competitive advantage, including patent-based exclusivity in a particular technology or product area.\nFurther, legal or regulatory action by various stakeholders or governments could potentially result in us not seeking intellectual property protection for or agreeing not to enforce or being restricted from enforcing intellectual property related to our products.\nThe scope of our patent claims also may vary between countries, as individual countries have distinct patent laws, and our ability to enforce our patents depends on the laws of each country, its enforcement practices, and the extent to which certain countries engage in policies or practices that weaken a country\u2019s intellectual property framework (e.g., laws or regulations that promote or provide broad discretion to issue a compulsory license). In countries that provide some form of regulatory exclusivity, mechanisms exist permitting some form of challenge to our patents by competitors or generic drug marketers prior to or immediately following the expiration of such regulatory exclusivity, and generic companies are employing aggressive strategies, such as \u201cat-risk\u201d launches that challenge our patent rights. Most of the suits involve claims by generic drug manufacturers that patents covering our products, uses, processes or dosage forms are invalid and/or do not cover the product of the generic or biosimilar drug manufacturer. Independent actions have been filed alleging that our assertions of, or attempts to enforce, patent rights with respect to certain products constitute unfair competition and/or violations of antitrust laws. Such claims may also be brought as counterclaims to actions we bring to enforce our patents. We are also party to other patent damages suits in various jurisdictions pursuant to which generic drug manufacturers, payors, governments or other parties are seeking damages from us for alleged delay of generic entry. We also are often involved in other proceedings, such as\ninter partes\n review, post-grant review, re-examination or opposition proceedings, before the U.S. Patent and Trademark Office, the European Patent Office, or other foreign counterparts relating to our intellectual property or the intellectual property rights of others. Also, if one of our patents or a competitors\u2019 patents is found to be invalid in such proceedings, generic or biosimilar products could be introduced into the market resulting in the erosion of sales of our existing products. For additional information, including information regarding certain legal proceedings in which we are involved, see\nNote 16A1\n. Further, if we are unable to maintain our existing license agreements or other agreements pursuant to which third parties grant us rights to intellectual property, our operating results and financial condition could be adversely affected.\nWe currently hold trademark registrations and have trademark applications pending in many jurisdictions, any of which may be the subject of a governmental or third-party objection, which could prevent the maintenance or issuance of the trademark. As our products mature, our reliance on our trademarks and trade dress to differentiate us from our competitors increases and, as a result, our business could be adversely affected if we are unable to prevent third parties from adopting, registering or using trademarks and trade dress that infringe, dilute or otherwise violate our rights. We seek to protect our proprietary information, including our trade secrets and proprietary know-how, by requiring our employees, consultants, other advisors and other third parties to execute proprietary information and confidentiality agreements upon the commencement of\nPfizer Inc.\n2025 Form 10-K\n22\ntheir relationship with us. Despite these efforts and precautions, we may be unable to prevent a third-party from copying or otherwise obtaining and using our trade secrets or our other intellectual property without authorization, and legal remedies may not adequately compensate us for the damages caused by such unauthorized use. Further, others may independently and lawfully develop substantially similar or identical products that circumvent our intellectual property by means of alternative designs or processes or otherwise.\nTHIRD-PARTY INTELLECTUAL PROPERTY CLAIMS\nA properly functioning intellectual property regime is essential to our business model. We are committed to respecting the valid intellectual property rights of other companies, but the patent granting process is imperfect. Accordingly, the pursuit of valid business opportunities may require us to challenge intellectual property rights held by others that we believe were improperly granted, including challenges through negotiation and litigation, and such challenges may not always be successful.\nPart of our business depends upon identifying biosimilar opportunities and launching products to take advantage of those opportunities, which may involve litigation, associated costs and time delays, and may ultimately not be successful. These opportunities may arise in situations where patent protection of equivalent branded products has expired or been declared invalid, or where products do not infringe the patents of others. In some circumstances we may take action, such as litigation, asserting that our products do not infringe patents of existing products or that those patents are invalid or unenforceable in order to achieve a \u201cfirst-to-market\u201d or early market position for our products.\nThird parties may claim that our products infringe one or more patents owned or controlled by them. Claims of intellectual property infringement can be costly and time-consuming to resolve, may delay or prevent product launches, and may result in significant royalty payments or damages or potential licensing agreements. For example, our R&D in a therapeutic area may not be first and another company or entity may have obtained relevant patents before us. We are involved in patent-related disputes with third parties over our attempts to market pharmaceutical products. Once we have final regulatory approval of the related products, we may decide to commercially market these products even though associated legal proceedings (including any appeals) have not been resolved (i.e., \u201cat-risk\u201d launch). If one of our marketed products (or a product of our collaboration/licensing partners to which we have licenses or co-promotion rights) is found to infringe valid patent rights of a third party, such third party may be awarded significant damages or royalty payments, or we may be prevented from further sales of that product. Such damages may be enhanced as much as three-fold if we or one of our subsidiaries is found to have willfully infringed valid patent rights of a third party. Potential expansion of our mRNA portfolio could result in an increase in patent-related disputes as well. For additional information, including information regarding certain legal proceedings in which we are involved, see\nNote 16A1\n.\nINFORMATION TECHNOLOGY AND CYBERSECURITY\nSignificant disruptions of IT systems or breaches of information security could adversely affect our business. We extensively rely upon sophisticated IT systems (including cloud services) to operate our business. We produce, collect, process, store and transmit large amounts of confidential information (including personal information and intellectual property), and we deploy and operate an array of technical and procedural controls to maintain the confidentiality, integrity and availability of such confidential information. We develop and operate digital systems to engage patients, healthcare providers, governments, payors and supply chain partners to conduct business and deliver medicines, digital diagnostics, clinical trials and digital therapies. Such systems include mobile applications, wearable devices, internet websites and other digital technologies that may be targets of attack. We have outsourced significant elements of our operations, including significant elements of our IT infrastructure and, as a result, we manage relationships with many third-party providers who may or could have access to our confidential information. We rely on technology developed, supplied and/or maintained by third-parties that may make us vulnerable to \u201csupply chain\u201d style cyber-attacks. Further, technology and security vulnerabilities of acquisitions, business partners or third-party providers may not be identified during due diligence or soon enough to mitigate potential risks. The size and complexity of our IT and information security systems, and those of our third-party providers (and the large amounts of confidential information present on them), make such systems potentially vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by, but not limited to, our employees, contingent workers, service providers, business partners, customers or malicious attackers. As a global pharmaceutical company, our systems and assets are the target of frequent cyber-attacks. Such cyber-attacks are of ever-increasing levels of sophistication, including the use of adversarial AI techniques (for example, AI may be used to automate phishing attacks and other forms of social engineering, and accelerate vulnerability exploitation), and are made by groups and individuals with a wide range of motives (including, but not limited to, industrial espionage, extortion, property destruction and personal information theft) and expertise, including, but not limited to, organized criminal groups, \u201chacktivists,\u201d nation states, employees, business partners and others. Due to the sophistication of some of these attacks, there is a risk that they may remain undetected for a period of time. While we have invested in the protection of data and IT and develop and maintain systems and controls, our efforts, like those of other similar companies, have not always prevented and may not in the future prevent service interruptions, extortion, theft of confidential, personal or proprietary information, compromise of data integrity or unauthorized information disclosure. Any technology service interruption or breach of our systems could adversely affect our business operations and/or result in potential legal liability, the loss of personal data, confidential information or intellectual property. Such incidents could require disclosure to government authorities and/or regulators and could require notification to affected individuals and any incident could result in financial, legal, business and reputational harm to us. We maintain cyber liability insurance; however, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of our systems.\nAI, including machine learning and generative AI, is increasingly being used in the biopharmaceutical and global healthcare industries. We have begun deploying AI in various parts of our internal and external operations, including in R&D, and continue to explore further use cases for AI, and our investments in AI may not yield anticipated benefits. As with many developing technologies, AI presents risks and challenges. For example, existing regulatory frameworks governing the use, development, and deployment of AI, including regulatory guidance on the use of AI in medical products, remain uncertain and subject to significant change. New regulatory requirements could impose significant compliance costs, limit our ability to deploy AI, require changes to our practices (including documentation, risk management, testing, or transparency measures), or increase litigation and enforcement risk. In addition, AI may be used by payors to limit access to care or to deny prior authorization requests, which could impact Pfizer\u2019s business results. Further, AI technology itself can give rise to risks. Generative AI output is probabilistic in nature and may not be reproducible or generate consistent results over time. AI can generate outputs that are false, misleading, incomplete, or inconsistent, and may be difficult to monitor, explain, or reproduce. AI performance may also degrade over time due to changes in inputs, data drift, updates by vendors, or adversarial manipulation. AI design or training may be flawed, including as a result of external vendors or others training AI models on content without the necessary intellectual property rights or other legal rights or permissions or using data sets that may not be appropriate for the intended use, of poor quality, contain biased information, or that become corrupted during a cyber-attack; and flawed or inappropriate data practices by data scientists, engineers, and end-users could impair results. If the output that AI produces or assists in producing is deficient or inaccurate, we could be subjected to competitive harm, regulatory scrutiny, potential legal liability and brand or reputational harm. The use of AI\nPfizer Inc.\n2025 Form 10-K\n23\nmay also lead to the unauthorized release of confidential or proprietary information which may impact our ability to realize the benefits of our data, including intellectual property. Further, reliance on third-party AI tools or services that incorporate AI may expose our organization to compliance gaps that are outside of our control. In addition, we could face risks related to our reliance on a small number of AI models or service providers.\nGENERAL RISKS\nBUSINESS DEVELOPMENT ACTIVITIES AND STRATEGIC GOALS\nWe have established financial and strategic goals, which we plan to achieve, in part, by not only advancing our own product pipelines and maximizing the value of our existing products, but also through various forms of business development activities, which can include alliances, licenses, JVs, collaborations, equity- or debt-based investments, dispositions, divestments, mergers and acquisitions, including our recent acquisition of Metsera. We view our business development activity as an enabler of our strategies and seek to generate growth by pursuing opportunities and transactions that have the potential to strengthen our business and our capabilities. The success of our business development activities is dependent on the availability and accurate evaluation of appropriate opportunities, competition from others seeking similar opportunities and our ability to successfully identify, structure and execute transactions, including the ability to satisfy closing conditions in the anticipated timeframes or at all, and our ability to successfully integrate acquired businesses and develop and commercialize acquired products. Pursuing, executing and consummating these transactions may require substantial investment, which may require us to obtain additional equity or debt financing, which has in the past and could in the future result in increased leverage and/or a downgrade of our credit ratings and could limit our ability to obtain future financing. We incurred substantial indebtedness to fund certain of our acquisitions. For example, we financed a portion of the acquisitions of Seagen and Metsera with the proceeds from the issuance of long-term debt, plus additional short-term indebtedness issued prior to such acquisitions. Such short-term indebtedness was subsequently repaid. The amount of debt that we have incurred could have significant consequences including, among other things, reducing our operating or financial flexibility, requiring a portion of our cash flow from operations to make interest payments and reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business. To the extent we incur additional indebtedness or interest rates increase, these risks could increase further.\nThe success of our business development transactions depends on our ability to realize the anticipated benefits of these transactions and is subject to numerous risks and uncertainties, many of which are outside of our control. Unsuccessful clinical trials, regulatory hurdles, new information, changes in competitive dynamics and commercialization challenges, among other factors, may adversely impact revenue and income contribution from business development transactions, including from acquired products and businesses, and may lead to impairment of acquired assets. We may fail to generate expected revenue growth for our existing products, product pipeline and contribution from these transactions or from acquired products or businesses or we may fail to achieve anticipated cost savings, within expected time frames or at all, which may impact our ability to meet our growth objectives.\nIn certain transactions, we may agree to provide certain transition services for an extended period of time, which may divert our focus and resources that would otherwise be invested into maintaining or growing our business.\nSimilarly, the accretive impact anticipated from certain transactions may not be realized or may be delayed. Integration of acquired products or businesses may result in the loss of key employees, the disruption of ongoing business, including third-party relationships, or inconsistencies in standards, controls, procedures and policies. Further, while we seek to mitigate risks and liabilities through, among other things, due diligence, we may be exposed to risks and liabilities as a result of business development transactions. There is no assurance that we will be able to acquire attractive businesses or enter into strategic business relationships on favorable terms ahead of our competitors, or that such acquisitions or strategic business development relationships will be accretive to earnings or improve our competitive position.\nWhere we invest in or otherwise obtain debt or equity securities of third parties in connection with business development transactions, we may be unable to direct or influence the management, operational decisions and policies of such companies and the value of the acquired securities will fluctuate and may lose value. Any future distribution or sale of such securities will be subject to prevailing market conditions and other factors, including the size of our ownership stake, at the time of such distribution or sale and there is no assurance as to the price that such securities will ultimately be sold or that such securities will be sold at all.\nPANDEMICS\nPandemics, such as the COVID-19 pandemic, have impacted and may in the future impact our business, operations and financial condition and results. Related risks and challenges for our business include, among others: uncertainty regarding the severity and duration of a pandemic; impacts to business operations; decreased demand for certain of our products; increased costs of doing business; manufacturing disruptions and delays; supply chain disruptions and shortages, including challenges related to reliance on third-party suppliers resulting in reduced availability of materials or components used in the development, manufacturing, distribution or administration of our products; evolving macroeconomic factors and conditions, including general economic uncertainty, unemployment rates and recessionary pressures; changes in labor markets, including challenges related to our human capital and talent development; unknown consequences on our business performance and initiatives stemming from the substantial investment of time and other resources to any potential pandemic response; increased difficulty and uncertainty regarding predicting or estimating future performance; pace of post-pandemic recovery, disruption and volatility within the financial or credit markets; and our financial performance in general.\nCOVID-19\nWe face risks and uncertainties related to our COVID-19 products, including Comirnaty and Paxlovid or any potential future COVID-19 vaccines, treatments or combinations, including, among others, the risk that as the market for COVID-19 products remains endemic and seasonal and/or COVID-19 infection rates do not follow prior patterns, demand for our COVID-19 products has and may continue to be reduced or not meet expectations, which has and may continue to lead to reduced revenues, excess inventory or other unanticipated charges; risks related to our ability to develop, receive regulatory approval for, and commercialize variant adapted vaccines, combinations and/or treatments; uncertainties related to recommendations and coverage for, and the public\u2019s adherence to, vaccines, boosters, treatments or combinations, including uncertainties related to the potential impact of narrowing recommended patient populations; risks related to our ability to accurately predict revenue for Comirnaty and Paxlovid or any potential future COVID-19 vaccines or treatments; whether and when EUA or biologics license or drug applications or amendments to any such applications may be filed in particular jurisdictions for Paxlovid or Comirnaty or any other potential vaccine or vaccine candidates or product candidates, including those related to potential future annual boosters, re-vaccinations, or vaccines in additional populations, and if obtained, whether or when such EUA or licenses, or existing EUAs, will expire, terminate or be revoked; whether and when additional supply or purchase agreements will be reached or existing agreements will be modified; potential third-party royalties or other claims related to Comirnaty or Paxlovid; and the other risks and uncertainties discussed throughout this Item 1A. Risk Factors.\nPfizer Inc.\n2025 Form 10-K\n24\nRESPONSIBLE BUSINESS PRACTICES\nPfizer is subject to transitional and physical risks related to climate change. Transitional risks include, for example, a disorderly global transition away from fossil fuels that may result in increased energy prices; customer preference for low or no-carbon products; stakeholder pressure to decarbonize assets; or new legal or regulatory requirements that result in new or expanded carbon pricing, taxes, restrictions on GHG emissions, and increased GHG disclosure and transparency. These risks could increase operating costs, including the cost of our electricity and energy use, or otherwise increase compliance costs. Physical risks to our operations include water stress and drought; flooding and storm surge; wildfires; extreme temperatures and storms, which could impact pharmaceutical production, increase costs, or disrupt supply chains of medicines for patients. Our supply chain is subject to these same transitional and physical risks and would likely pass along any increased costs to us.\nIn June 2022, Pfizer established our fourth consecutive GHG reduction goal with new near- and long-term targets to achieve the Science Based Target Initiative\u2019s voluntary Net-Zero Standard by 2040. While we are working to implement emission reduction plans to achieve our voluntary climate goals, various factors, including the long time horizons and commercial availability of new technologies to enable emission reductions, in the time and scale needed, may present inherent risk in our ability to meet these goals. Additionally, success may depend on the actions of governments and third parties and may require, among other things, significant capital investment; R&D; and government policies and incentives to foster innovation and reduce costs of technologies that may not currently exist or be available at scale.\nCertain governmental authorities, non-governmental organizations, customers, investors, employees, and other stakeholders have differing views on matters perceived to be related to responsible business practices, such as equitable access to medicines and vaccines, product quality and safety, human capital, diversity, equity and inclusion, environmental stewardship, support for local communities, value chain environmental and human rights due diligence, and corporate governance and transparency. In addition, certain governments and the public expect companies like us to report on our business practices with respect to human rights, responsible sourcing and environmental impact, as well as the actions of our third-party contractors and suppliers around the world. This focus may lead to new expectations or requirements that could result in increased costs associated with research, development, manufacture, or distribution of our products. Our ability to compete could also be affected by changing customer preferences and requirements, such as demand for companies to establish Net Zero targets or offer more sustainable products. While we are committed to responsible business practices, if we do not meet, or are perceived not to meet, our goals or other stakeholder expectations in these key areas, we risk negative stakeholder reaction, as well as damage to our brand and reputation, reduced demand for our products or other negative impacts on our business and operations.\nMARKET FLUCTUATIONS IN OUR EQUITY AND OTHER INVESTMENTS\nChanges in the fair value of certain equity investments that are recognized in net income may result in increased volatility of our income. See\nNote 4\n\nand the\nAnalysis of Financial Condition, Liquidity, Capital Resources and Market Risk\n\nsection within MD&A.\nOur pension and postretirement plans are subject to volatility from changes in the fair value of equity investments and other investment risk in the assets funding these plans, as well as changes in the appropriate discount rates used to measure the plans\u2019 obligations. See the\nSignificant Accounting Policies and Application of Critical Accounting Estimates and Assumptions\n\u2014\nBenefit Plans\n\nsection within MD&A and\nNote 11\n.\nCOST AND EXPENSE CONTROL AND UNUSUAL EVENTS\nGrowth in costs and expenses, changes in product and geographic mix and the impact of acquisitions, divestitures, restructurings, internal reorganizations, product withdrawals, recalls and other unusual events that could result from evolving business strategies, evaluation of asset realization and organizational restructuring could adversely affect future results. Such risks and uncertainties include, in particular, our ability to realize the projected benefits of our cost-reduction and productivity initiatives, including our enterprise-wide cost realignment program and manufacturing optimization program, other corporate strategic initiatives and any acquisitions, divestitures or other initiatives, as well as potential disruption of ongoing business, such as potential impacts on our ability to deliver on our pipeline as planned. Additionally, as a result of these initiatives, we may experience a loss of continuity, loss of accumulated knowledge or intellectual property and/or inefficiency, adverse effects on employee morale, loss of key employees and/or other retention issues during transitional periods. Reorganizations and restructurings can require a significant amount of time and focus, which may divert attention from operating and growing our business. If we fail to achieve some or all of the expected benefits of restructuring or other initiatives, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows.\nINTANGIBLE ASSETS, GOODWILL AND EQUITY-METHOD INVESTMENTS\nOur consolidated balance sheet contains significant amounts of intangible assets, including IPR&D and goodwill. For IPR&D assets, the risk of failure is significant, and there can be no certainty that these assets ultimately will yield successful products. Our ability to realize value on these significant investments is often contingent upon, among other things, regulatory approvals and market acceptance. As such, IPR&D assets have and may become impaired and/or be written off in the future if the associated R&D effort is abandoned or is curtailed. For goodwill, all reporting units can confront events and circumstances that can lead to a goodwill impairment charge such as, among other things, unanticipated competition, an adverse action or assessment by a regulator, a significant adverse change in legal matters or in the business climate and/or a failure to replace the contributions of products that lose market exclusivity. Our other intangible assets, including developed technology rights, brands and licensing agreements, face similar risks for impairment. Our equity-method investments may also be subject to impairment charges that may result from the occurrence of unexpected adverse events or management decisions that impact our estimates of expected cash flows to be generated from these investments. We may recognize impairment charges as a result of a weak economic environment, challenging market conditions, decisions by management, or events related to particular customers or asset types, such as the development of competing assets by us or others, regulatory actions or product recalls or withdrawals. Any such impairment charge of our intangible assets, goodwill and equity-method investments may be significant. See\nNote 4\n\nfor a discussion of recent impairments of intangible assets. For additional details, see the\nS\nignificant Accounting Policies and Application of Critical Accounting Estimates and Assumptions\n\u2014\nAsset Impairments\n section within MD&A.\nCHANGES IN LAWS AND ACCOUNTING STANDARDS\nOur future results could be adversely affected by changes in laws, regulations or policies, or their interpretation, including, among others, new or changes in accounting standards, tariffs, tax laws and regulations internationally and in the U.S., including, without limitation, the IRA, and the OBBBA, which is still subject to further guidance; the adoption of global minimum taxation requirements outside the U.S. generally effective in most jurisdictions since January 1, 2024; government cost-cutting measures and related impacts on, among other matters, government staffing, resources and ability to timely review and process regulatory or other submissions; restrictions related to certain data transfers, including data security, data localization and cross border data transfer regulations, and transactions involving certain countries; and potential changes to\nPfizer Inc.\n2025 Form 10-K\n25\nexisting tax laws, tariffs, competition laws, privacy laws and environmental laws or changes to other laws, regulations or policies in the U.S., including by the U.S. Presidential administration and Congress, as well as in other countries. For example, issued or future executive orders or other new or changes in laws, regulations or policy regarding tariffs or other trade or foreign policy, could have a material adverse effect on our business, earnings, cash flow, liquidity and financial guidance. The actual impact of any new tariffs on our business would be subject to a number of factors including, but not limited to, restrictions on trade, the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs or other retaliatory actions imposed by other countries. In the EU, several recently adopted or proposed legislative initiatives may affect our business, including the EU Pharma Package, the EU HTA -R, the EU Critical Medicines Act, and the EU Biotech Act, as well as legislation such as the EU AI Act, EU Data Act, and the EU Health Data Space Regulation, among others. See the\nItem 1. Business\n\u2014\nG\novernment Regulation and Price Constraints\n section for additional information regarding privacy and other laws. For additional information on changes in tax laws or rates or accounting standards, see the\nProvision/(Benefit) for Taxes on Income\n\nand\n\nNew Accounting Standards\n sections within MD&A and\n\nNote 1B\n.\nITEM\u00a01C.\nCYBERSECURITY\nManaging cybersecurity risk is a crucial part of our overall strategy for safely operating our business. We\nincorporate\n cybersecurity practices into our Enterprise Risk Management (ERM) program. Management is responsible for assessing and managing risk, including through the ERM program, subject to oversight by our BOD. Our cybersecurity policies and practices are aligned with NIST (National Institute of Standards and Technology) industry standards.\nConsistent with our overall ERM program and practices, our cybersecurity program includes:\n\u2022\nVigilance\n: We maintain a global cybersecurity operation that endeavors to detect, prevent, contain, and respond to cybersecurity threats and incidents in a prompt and effective manner with the goal of minimizing business disruptions.\n\u2022\nExternal Collaboration\n: We collaborate with public and private entities, including intelligence and law enforcement agencies, industry groups and third-party service providers to identify, assess and mitigate cybersecurity risks.\n\u2022\nSystems Safeguards\n: We deploy technical safeguards that are designed to protect our information systems, products, operations and sensitive information from cybersecurity threats. These include firewalls, intrusion prevention and detection systems, disaster recovery capabilities, malware and ransomware prevention, access controls and data protection. We continuously conduct vulnerability assessments to identify new risks and periodically test the efficacy of our safeguards through both internal and external penetration tests.\n\u2022\nEducation\n: We provide periodic training for all personnel regarding cybersecurity threats, with such training appropriate to the roles, responsibilities and access of the relevant Company personnel. Our policies require all workers to report any real or suspected cybersecurity events.\n\u2022\nSupplier Ecosystem Management\n: We extend our cybersecurity management control expectations to our supply chain ecosystem, as appropriate. This includes identifying cybersecurity risks presented by third parties.\n\u2022\nIncident Response Planning\n: We have established, and maintain and periodically test, incident response plans that direct our response to cybersecurity events and incidents. Such plans include the protocol by which certain significant or potentially material incidents would be communicated to executive management, our BOD, external regulators and shareholders, as appropriate.\n\u2022\nEnterprise-Wide Coordination\n: We engage relevant stakeholders from across the Company to identify emerging risks and respond to cybersecurity threats. This cross-functional approach includes personnel from our R&D, manufacturing, commercial, technology, legal, compliance, internal audit and other business functions.\n\u2022\nGovernance\n: Our BOD\u2019s oversight of cybersecurity risk management is led by the Audit Committee, which oversees our ERM program. Cybersecurity threats, risks and mitigation are periodically reviewed by the Audit Committee and such reviews include both internal and independent assessment of risks, controls and effectiveness.\nOur risk assessment efforts have indicated that we are a target for theft of intellectual property, financial resources, personal information, and trade secrets from a wide range of actors including nation states, organized crime, malicious insiders and activists. The impacts of attacks, abuse and misuse of Pfizer\u2019s systems and information could include, without limitation, loss of assets, operational disruption and damage to Pfizer\u2019s reputation.\nA key element of managing cybersecurity risk is the ongoing assessment and testing of our processes and practices through auditing, assessments, drills and other exercises focused on evaluating the sufficiency and effectiveness of our risk mitigation. We regularly engage\nthird parties\n to perform assessments of our cybersecurity measures, including information security maturity assessments and independent reviews of our information security control environment and operating effectiveness. Certain results of such assessments and reviews are reported by the Chief Information Security Officer (CISO) to certain senior leaders, the Audit Committee and the BOD, as appropriate, and we make adjustments to our cybersecurity processes and practices as necessary based on the information provided by the\nthird-party assessments and reviews\n.\nThe Audit Committee oversees cybersecurity risk management, including the policies, processes and practices that management implements to prevent, detect and address risks from cybersecurity threats.\n\nThe\nAudit Committee\n receives periodic briefings on, and discusses with our CISO, cybersecurity risks and risk management practices, including, for example, recent developments in the external cybersecurity threat landscape, evolving standards, vulnerability assessments, third-party and independent reviews, technological trends and considerations arising from our supplier ecosystem. The Audit Committee may also promptly receive information regarding certain significant or potentially material cybersecurity incidents that may occur, including any ongoing updates regarding the same.\n\nOur\nCISO\n is a member of our management team who is principally responsible for overseeing our cybersecurity risk management program, in partnership with other business leaders across the Company.\n\nWe believe our CISO and the information security organization have the appropriate expertise, background and depth of experience relating to monitoring the prevention, mitigation, detection and remediation of cybersecurity incidents to manage risks arising from cybersecurity threats.\n\nThe CISO works in coordination with other members of the management team, including, among others, the Chief Digital Officer, the Chief Financial Officer and the Chief Legal Officer and their designees.\nOur CISO, along with leaders from our privacy and corporate compliance functions, collaborate to implement a program designed to manage our exposure to cybersecurity risks and to promptly respond to cybersecurity incidents. Prompt response to incidents is delivered by multi-disciplinary teams in accordance with our incident response plan. Through ongoing communications with these teams during incidents, the CISO monitors the triage, mitigation and remediation of cybersecurity incidents, and reports such incidents to executive management, the Audit Committee and other Pfizer colleagues in accordance with our cybersecurity policies and procedures, as is appropriate.\nPfizer Inc.\n2025 Form 10-K\n26\nFor the fiscal year ended December 31, 2025\n, we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition.\n For further discussion of the risks associated with cybersecurity incidents, see the\nItem 1A. Risk Factors\u2014Information Techn\nology and\nCyber\ns\necurity\n\nsection in this\nForm 10-K.\nITEM\u00a02.\nPROPERTIES\nOur global headquarters are located in New York City. We own and lease space globally for sales and marketing, customer service, regulatory compliance, R&D, manufacturing and distribution and corporate enabling functions. In many locations, our business and operations are co-located to achieve synergy and operational efficiencies. We continue to advance our global workplace strategy to provide workplaces that enable collaboration and foster innovation. As of December 31, 2025, we had 245 owned and leased properties worldwide, amounting to approximately 36 million square feet.\nAs of December 31, 2025, Pfizer Global Supply (PGS) had responsibility for 36 manufacturing plants around the world, which manufacture products for our commercial divisions, including in Belgium, Germany, India, Ireland, Italy, Japan, Singapore and the U.S. The leadership team for PGS is primarily located in New York City. PGS also operates multiple distribution facilities around the world. PGS continuously evaluates its network and capacity to meet Pfizer's ever-changing needs and help inform future decisions.\nIn the U.S., our R&D facilities contain an aggregate of approximately 7 million square feet, with the majority of that area owned by Pfizer. Outside of the U.S., we lease R&D labs in the U.K., India and Belgium.\nIn general, we believe that our properties, including the principal properties described above, are well-maintained, adequate and suitable for their current requirements and for our operations in the foreseeable future. See\nNote 9\n\nfor amounts invested in land, buildings and equipment.\nITEM\u00a03.\nLEGAL PROCEEDINGS\nCertain legal proceedings in which we are involved are discussed in\nNote 16A\n.\nINFORMATION ABOUT OUR EXECUTIVE OFFICERS\nThe executive officers of the Company are set forth in this table. Each holds the office or offices indicated until his or her successor is chosen and qualified at the regular meeting of the BOD to be held on the date of the 2026 Annual Meeting of Shareholders, or until his or her earlier death, resignation or removal. Each of the executive officers is a member of the Pfizer Executive Leadership Team.\nName\nAge\nPosition\nAlbert Bourla, DVM, Ph.D.\n64\nChairman of the Board since January 2020 and Chief Executive Officer since January 2019. Chief Operating Officer from January 2018 until December 2018. Group President, Pfizer Innovative Health from June 2016 until December 2017. Group President, Global Innovative Pharma Business (responsible for Vaccines, Oncology and Consumer Healthcare since 2014) from February 2016 until June 2016. President and General Manager of Established Products Business Unit from December 2010 until December 2013. Our Director since February 2018.\nAndrew Baum, MA, BM ChB\n55\nChief Strategy and Innovation Officer and Executive Vice President since 2024. Prior to joining Pfizer, he was Head of Global Healthcare - Managing Director Equity Research at Citigroup from 2011 until 2024.\nChris Boshoff, MD, FRCP, FMedSci, Ph.D.\n62\nChief Scientific Officer and President, Research & Development, since January 2025; Chief Oncology Officer, Executive Vice President from December 2023 until December 2024; Chief Oncology Research and Development Officer and Executive Vice President from July 2023 until December 2023; Senior Vice President, Oncology, from 2017 until 2023.\nDavid M. Denton\n60\nChief Financial Officer, Executive Vice President since May 2022. Executive Vice President, Chief Financial Officer, Lowe\u2019s Companies, Inc., from November 2018 until April 2022; Executive Vice President and Chief Financial Officer, CVS Health Corporation (a diversified health solutions company), from January 2010 until November 2018. Served as Director of Haleon plc from March 2023 to December 2024.\nAlexandre de Germay\n58\nChief International Commercial Officer, Executive Vice President since December 2023. Chief Executive Officer, Laboratoires Majorelle (a specialty pharma company based in France dedicated to women\u2019s health and urology) from 2021 until January 2024 (assisting with transition matters after December 15, 2023). From 2020 until 2021 was Senior Vice President; Global Franchise Head of Cardiology, Transplant and Established Products, and from 2016 until 2020 was Head of Mature Markets General Medicines of Sanofi. Regional President of Asia-Pacific of Pfizer Inc. from 2013 until 2016.\nLidia Fonseca\n57\nChief Digital and Technology Officer, Executive Vice President since January 2019. Chief Information Officer and Senior Vice President of Quest Diagnostics Incorporated from 2014 to 2018. Senior Vice President of Laboratory Corporation of America Holdings from 2008 until March 2013. Director of Medtronic plc.\nDouglas M. Lankler\n60\nChief Legal Officer, Executive Vice President since January 2025. General Counsel, Executive Vice President from December 2013 until December 2024. Corporate Secretary from January 2014 until February 2014. Executive Vice President, Chief Compliance and Risk Officer from February 2011 until December 2013.\nAamir Malik\n50\nChief U.S. Commercial Officer, Executive Vice President since December 2023. Chief Business Innovation Officer, Executive Vice President from August 2021 until December 2023. Various U.S. geographic leadership roles with McKinsey & Company from 2019 to 2021; previously co-led McKinsey & Company\u2019s Global Pharmaceuticals & Medical Products practice from 2015 to 2018.\nPfizer Inc.\n2025 Form 10-K\n27\nName\nAge\nPosition\nMichael McDermott\n60\nChief Global Supply and Quality Officer, Executive Vice President since January 2025. Chief Global Supply Officer, Executive Vice President from 2022 until December 2024. President of Pfizer Global Supply from 2018 until 2021. Vice President of Pfizer Global Supply from 2014 until 2018. Vice President of the Biotechnology Unit from 2012 until 2014.\nPayal Sahni\n51\nChief People Experience Officer, Executive Vice President since January 2022. Chief Human Resources Officer, Executive Vice President from June 2020 to December 2021. From May 2016 until June 2020 served as Senior Vice President of Human Resources for multiple operating units. Vice President of Human Resources, Vaccines, Oncology & Consumer from 2015 until 2016. Ms. Sahni has served in a number of positions in the Human Resources organization with increasing responsibility since joining Pfizer in 1997.\nPfizer Inc.\n2025 Form 10-K\n28\nPART II\nITEM\u00a05.\nMARKET FOR THE COMPANY\u2019S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES\nThe principal market for our common stock is the NYSE. Our common stock currently trades on the NYSE under the symbol \u201cPFE\u201d. As of February\u00a019, 2026, there were 106,369 holders of record of our common stock.\nThe following summarizes purchases of our common stock during the fourth quarter of 2025:\nPeriod\nTotal\u00a0Number\nof Shares\nPurchased\n(a)\nAverage Price\nPaid\u00a0per\n\u00a0\u00a0\u00a0\u00a0Share\n(a)\nTotal\u00a0Number\u00a0of\nShares\u00a0Purchased\u00a0as\nPart of Publicly\n\u00a0\u00a0\u00a0\u00a0Announced\u00a0Plan\nApproximate Value of Shares\nthat May Yet Be Purchased\n\u00a0\u00a0\u00a0\u00a0Under\u00a0the\u00a0Plan\n(b)\nSeptember 29 through October 26, 2025\n24,113\n$\n25.52\n\n\u2014\n\n$\n3,292,882,444\n\nOctober 27 through November 30, 2025\n30,706\n$\n24.71\n\n\u2014\n\n$\n3,292,882,444\n\nDecember 1 through December 31, 2025\n77,912\n$\n25.42\n\n\u2014\n\n$\n3,292,882,444\n\nTotal\n132,731\n\n$\n25.27\n\n\u2014\n\n(a)\nRepresents (i) 129,716 shares of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of awards under our long-term incentive programs and (ii) the open market purchase by the trustee of 3,015 shares of common stock in connection with the reinvestment of dividends paid on common stock held in trust for employees who deferred receipt of performance share awards.\n(b)\nSee\nNote 12\n.\nPEER GROUP PERFORMANCE GRAPH\nThe following graph assumes a $100 investment on December 31, 2020, and reinvestment of all dividends, in each of the Company\u2019s Common Stock, a composite peer group of the major U.S. and European-based pharmaceutical companies, which are: AbbVie Inc., Amgen Inc., AstraZeneca PLC, Bristol-Myers Squibb Company, Eli Lilly and Company, GSK plc, Johnson & Johnson, Merck & Co., Inc., Novartis AG, Novo Nordisk, Roche Holding AG and Sanofi, the S&P 500 Index and the NYSE Arca Pharmaceutical Index (DRG index).\nFive Year Performance\n2020\n2021\n2022\n2023\n2024\n2025\nPFIZER\n$100.0\n$166.7\n$149.4\n$87.8\n$85.8\n$86.4\nPEER GROUP\n$100.0\n$119.3\n$141.3\n$162.1\n$169.8\n$211.0\nS&P\u00a0500\n$100.0\n$128.7\n$105.4\n$133.0\n$166.3\n$196.0\nDRG Index\n$100.0\n$123.4\n$133.0\n$143.3\n$150.8\n$186.7\nITEM\u00a06.\n[RESERVED]\nPfizer Inc.\n2025 Form 10-K\n29\nITEM\u00a07.\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nGENERAL\nThe following MD&A is intended to assist the reader in understanding our financial condition and results of operations, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources, and is provided as a supplement to and should be read in conjunction with the consolidated financial statements and related notes in\nItem 8. Financial Statements and Supplementary Data\n in this Form 10-K. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found within MD&A in our 2024 Form 10-K.\nReferences to operational variances pertain to period-over-period changes that exclude the impact of foreign exchange rates. Although foreign exchange rate changes are part of our business, they are not within our control and because they can mask positive or negative trends in the business, we believe presenting operational variances excluding these foreign exchange changes provides useful information to evaluate our results.\nOVERVIEW OF OUR PERFORMANCE, OPERATING ENVIRONMENT, STRATEGY AND OUTLOOK\nFinancial Highlights\n\u2013\u2013\nThe following is a summary of certain financial performance metrics (in billions, except per share data):\n2025 Total Revenues\u2013\u2013$62.6 billion\n2025 Net Cash Flow from Operations\u2013\u2013$11.7 billion\nA decrease of 2% compared to 2024\nA decrease of 8% compared to 2024\n2025 Reported Diluted EPS\u2013\u2013$1.36\n2025 Adjusted Diluted EPS (Non-GAAP)\u2013\u2013$3.22**\nA decrease of 3% compared to 2024\nAn increase of 4% compared to 2024\n**  For additional information regarding Adjusted diluted EPS (which is a non-GAAP financial measure), including reconciliations of certain GAAP Reported to non- GAAP Adjusted information, see the\nNon-GAAP Financial Measure: Adjusted Income\n section within MD&A.\nOur Business and Strategy\n\u2013\u2013\nPfizer Inc. is a research-based, global biopharmaceutical company. We apply science and our global resources to bring therapies to people that extend and significantly improve their lives. See the\nItem 1. Business\n\u2013\u2013About Pfizer\n\nsection. As a science-driven global biopharmaceutical company, we remain focused on advancing our product pipeline, supporting our marketed brands and deploying capital responsibly, with a focus on initiatives that can help contribute to our long-term revenue and future growth. Most of our revenues come from the manufacture and sale of biopharmaceutical products. We believe that our medicines and vaccines provide significant value for healthcare providers and patients, and we continuously evaluate how we can best collaborate with patients, physicians and payors to support and expand patient access to reliable, affordable healthcare around the world. In addition, we continually seek to expand and broaden our product portfolio offerings through prioritized development of our pipeline and business development opportunities targeted at critical unmet patient needs. As a result, our commercial organizational structure and R&D operations are critical to the successful execution of our business strategy. Our ability to fulfill our purpose,\nBreakthroughs that change patients\u2019 lives\n, remains a core focus and underscores our commitment to addressing the needs of society to help sustain long-term value creation for all stakeholders.\nOur 2026 key priorities are:\n1.\nMaximize value of key transactions\n2.\nDeliver on critical R&D milestones\n3.\nInvest to maximize post-2028 growth\n4.\nScale AI across our business.\nOne way we believe we will be more efficient, effective and able to execute on these strategic priorities is through digital enablement. This includes expanding automation, data\u2011driven decision making, and enterprise AI solutions that strengthen productivity and accelerate innovation.\nPfizer Inc.\n2025 Form 10-K\n30\nIn 2025, we managed our commercial operations through a global structure consisting of three operating segments: Biopharma, PC1 and Pfizer Ignite. Biopharma was the only reportable segment. See\nNote 17A\n\nand the\nItem 1. Business\u2013\u2013Commercial Operations\n\nsection. As part of our continued focus on commercial execution, at the beginning of 2026, we made changes in our commercial structure, which included the transition of certain off-patent branded and generic sterile injectables and biosimilars from the Specialty Care and Oncology product portfolios to a new Global Hospital and Biosimilars organization within our Biopharma reportable segment that went into effect on January 1, 2026. See the\nItem 1. Business\u2013\u2013Commercial Operations\n\nsection.\nRealigning Our Cost Base Program\n\u2022\nIn the fourth quarter of 2023, we announced that we launched a multi-year, enterprise-wide cost realignment program that aims to realign our costs with our longer-term revenue expectations. In the second quarter of 2025, we identified additional productivity opportunities to further reduce costs primarily in SI&A, driven in large part by enhanced digital enablement, including automation and AI, and simplification of business processes.\n\u2022\nIn connection with our efforts to simplify the structure and sharpen the focus of our R&D organization, in the first quarter of 2025, we expanded this program after having identified additional opportunities to drive improvements in productivity and operational efficiencies through enhanced digital enablement, including automation and AI, and simplification of business processes.\nManufacturing Optimization Program\n\u2013\u2013In the second quarter of 2024, we announced that we launched a multi-year, multi-phased program to reduce our costs of goods sold, which includes operational efficiencies, network structure changes, and product portfolio enhancements.\nSee\nNote 3\n\nfor the anticipated and actual costs of these programs. For a description of anticipated savings related to these programs, see the\nCosts and Expenses\u2013\u2013Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives\n\nsection within MD&A\n.\nR&D:\n We believe we have a strong pipeline and are well-positioned for future growth. R&D is at the heart of fulfilling our purpose to deliver breakthroughs that change patients\u2019 lives as we work to translate advanced science and technologies into the medicines and vaccines that may be the most impactful for patients. Innovation, drug discovery and development are critical to our success. In addition to discovering and developing new products, our R&D efforts seek to add value to our existing products by improving their effectiveness, safety profile and ease of dosing and by discovering potential new indications. See the\nItem 1. Business\n\u2014\nResearch and Development\n\nsection for our R&D priorities and strategy.\nWe seek to leverage a strong pipeline, organize around expected operational growth drivers and capitalize on trends creating long-term growth opportunities, including:\n\u2022\nan aging global population that is generating increased demand for innovative medicines and vaccines that address patients\u2019 unmet needs; and\n\u2022\nadvances in both biological science and platform technologies that are enhancing the delivery of potential breakthrough new medicines and vaccines.\nOur Business Development Initiatives and Other Recent Developments\n\u2013\u2013\nWe are committed to strategically capitalizing on growth opportunities, primarily by advancing our own product pipeline and maximizing the value of our existing products, but also through various business development activities. We view our business development activity as an enabler of our strategies and seek to generate growth by pursuing opportunities and transactions that have the potential to strengthen our business and our capabilities. We assess our business, assets and scientific capabilities/portfolio as part of our regular, ongoing portfolio review process and also continue to consider business development activities that will help advance our business strategy. See\nNote 2\n for a discussion of our recent business development initiatives, including the acquisitions of Seagen and Metsera, and the following\n\nfor significant recent activities.\nAgreement with the U.S. Government\n\u2013\u2013\nIn September 2025, we announced an agreement with the Trump Administration in which we voluntarily agreed to implement measures designed to make certain drug prices for U.S. patients more comparable to those in other developed countries\n\nand also allow U.S. patients to purchase certain medicines at significant discounts to current retail prices. The September 2025 agreement also provides a three-year grace period during which time our products will not face Section 232 tariffs, provided the Company further invests in manufacturing in the U.S. Pfizer is now in the process of entering into binding final agreements to implement these arrangements. See the\nItem 1. Business\n\u2013\u2013\nPricing Pressures and Managed Care Organizations\n\nand\n\u2013\u2013\nG\novernment Regulation an\nd Price Cons\ntraints\n sections for additional information.\nOur 2025 Performance\nTotal Revenues\n\u2013\u2013Total revenues\n decreased $1.0 billion, or 2%, to $62.6 billion in 2025 from $63.6 billion in 2024, reflecting an operational decrease of $1.3 billion, or 2%, partially offset by a favorable impact of foreign exchange of $247 million. The operational decrease was primarily driven by declines in COVID-19 product revenues, partially offset by increases from the Vyndaqel family, Eliquis, Padcev, Lorbrena, Abrysvo and Oncology biosimilars. Excluding contributions from Comirnaty and Paxlovid,\nTotal revenues\n increased 6% operationally.\nPfizer Inc.\n2025 Form 10-K\n31\nThe following chart outlines the components of the net change in\nTotal revenues\n:\nSee the\nTotal Revenues by Geography\n\nand\nTotal Revenues\u2013\u2013Selected Product Discussion\n sections within MD&A for more information, including a discussion of key drivers of our revenue performance. Certain of our vaccines, including Comirnaty, are subject to seasonality of demand, with a greater portion of revenues anticipated in the fall and winter seasons. Revenues may also vary due to changes in public health recommendations for vaccination. In addition, Paxlovid revenues trend with COVID-19 infection rates. See also\nThe Global Economic Environment\u2013\u2013COVID-19\n section below for information about our COVID-19 products. For information regarding the primary indications or class of certain products, see\nNote 17C\n.\nIncome from Continuing Operations Before Provision/(Benefit) for Taxes on Income\n\u2013\u2013\nThe decrease in\nIncome from continuing operations before provision/(benefit) for taxes on income\n of $503 million, to $7.5 billion in 2025 from $8.0 billion in 2024, was primarily due to (i) higher intangible asset impairment charges in 2025, (ii) an increase in\nAcquired in-process research and development expenses,\n (iii) net losses on equity securities in 2025 versus net gains on equity securities in 2024 and (iv) lower revenues, partially offset by (v) decreases in\nCost of Sales,\nSI&A, and\n Restructuring charges and certain acquisition-related costs\n, and\n\n(vi)\n\nnet periodic benefit credits associated with pension and other postretirement plans incurred in 2025 versus net periodic benefit costs in 2024.\nSee\n\nthe\n\nAnalysis of the Consolidated Statements of Operations\n section within MD&A and\nNotes 3\n and\n4\n. For information on our tax provision and effective tax rate, see the\nProvision/(Benefit) for Taxes on Income\n section within MD&A and\nNote 5\n.\nOur Operating Environment\n\u2013\u2013We, like other businesses in our industry, are subject to certain industry-specific challenges. These include, among others, the topics listed below. See also the\nItem 1. Business\u2013\u2013Government Regulation and Price Constraints\n and\nItem 1A. Risk Factors\n\nsections.\n\nRegulatory Environment\u2013\u2013Pipeline Productivity\n\u2013\u2013\nOur product lines must be replenished over time to offset revenue losses when products lose exclusivity or market share or to respond to healthcare and innovation trends, as well as to provide for earnings growth, primarily through internal R&D or through collaborations, acquisitions, JVs, licensing or other arrangements. As a result, we devote considerable resources to our R&D activities which, while essential to our growth, incorporate a high degree of risk and cost, including whether a particular product candidate or new indication for an in-line product will achieve the desired clinical endpoint or safety profile, will be approved by regulators or will be successful commercially. Clinical trials are conducted to determine, among other things, whether an investigational drug, vaccine or device is safe and effective for a particular patient population. After a product has been approved or authorized and launched, we continue to monitor its safety as long as it is available to patients, including conducting postmarketing trials, voluntarily or pursuant to a regulatory request. For the entire life of the product, we collect safety data and report safety information to the FDA and other regulators. Regulatory authorities evaluate potential safety concerns and take any regulatory action deemed necessary and appropriate. Such action(s) may include: updating a product\u2019s labeling, restricting its use, communicating new safety information or, in rare cases, seeking to suspend or remove a product from the market.\nIntellectual Property Rights and Collaboration/Licensing Rights\n\u2013\u2013\nThe loss, expiration or invalidation of intellectual property rights, patent litigation settlements and judgments, and the expiration of co-promotion and licensing rights can have a material adverse effect on our revenues. Certain of our products have experienced patent-based expirations or loss of regulatory exclusivity in certain markets in the last few years, and we expect certain products to face new or increased generic competition over the next few years. We anticipate a significant reduction of revenue from patent-based or regulatory exclusivity expiries in 2026 through 2030 as several of our in-line products experience these expirations, with the rate of the reduction of revenues from patent-based or regulatory exclusivity expiries expected to significantly accelerate over the next few years. In 2026, the impact from patent-based or regulatory exclusivity expiries is expected to be $1.5 billion. We continue to vigorously defend our patent rights against infringement, and we will continue to support efforts that strengthen worldwide recognition of patent rights while taking necessary steps to help ensure appropriate patient access.\nFor additional information on patent rights we consider most significant to our business as a whole, including U.S., major Europe and Japan basic product patent expiration years, see the\nItem 1. Business\u2013\u2013Patents and Other Intellectual Property Rights\n section. For a discussion of recent developments with respect to patent litigation involving certain of our products, see\nNote 16A1\n.\nRegulatory Environment/Pricing and Access\u2013\u2013Government and Other Payor Group Pressures\n\u2013\u2013\nThe pricing of medicines and vaccines by pharmaceutical manufacturers and the cost of healthcare, which includes medicines, vaccines, medical services and hospital services, continues to be important to payors, governments, patients, and other stakeholders. Federal and state governments and private third-party payors in the U.S. continue to take action to manage the utilization and cost of drugs, including increasingly employing formularies to control costs and encourage utilization of certain drugs, including through the use of deductibles, utilization management tools, cost sharing or formulary placement. We consider a number of factors impacting the pricing of our medicines and vaccines. Within the U.S., we often engage with and receive feedback from patients, doctors and healthcare plans. We also often provide significant discounts from the list price to insurers, including PBMs and MCOs. The price that patients pay in the U.S. for prescribed medicines and vaccines is ultimately set by healthcare providers and insurers, including government healthcare programs. Governments globally, as well as private third-party payors in the U.S., may use a variety of measures to control costs, including, among others, legislative or regulatory pricing reforms, drug formularies (including tiering and utilization management tools), cross country collaboration and procurement, price cuts, mandatory rebates, health technology assessments, forced\nPfizer Inc.\n2025 Form 10-K\n32\nlocalization as a condition of market access, \u201cinternational reference pricing\u201d (i.e., the practice of a country linking its regulated medicine prices to those of other countries), quality consistency evaluation processes, clawbacks and volume-based procurement. We anticipate that these and similar initiatives will continue to increase pricing and access pressures globally. In the U.S., we expect to see continued focus by the U.S. government and states on regulating drug pricing and access to medicine, including but not limited to, international reference pricing, including Most-Favored-Nation (MFN) drug pricing. The drug pricing provisions of the IRA have been and continue to be implemented over the next several years. In August 2023, CMS selected Eliquis for the MDPNP, and its government-set Maximum Fair Price became effective January 1, 2026. CMS has since selected Ibrance and Xtandi for the MDPNP with Maximum Fair Price effective in 2027 and Xeljanz for Maximum Fair Price effective in 2028, and additional future selections could lead to lower revenues. We continue to evaluate the impact of the IRA on our business, operations and financial condition and results as the full effect of the IRA on our business and the pharmaceutical industry remains uncertain. The IRA also made significant changes to the Medicare Part D benefit design (IRA Medicare Part D Redesign), which took effect beginning in 2025 and negatively impacted our 2025 revenues by approximately $1 billion. We do not expect a material, incremental impact from the IRA Medicare Part D Redesign in 2026 versus the baseline set in 2025. These changes more acutely impacted our higher-priced medicines as they reached catastrophic coverage earlier in the year. In addition, changes to the Medicaid Drug Rebate Program or the 340B Program, including legal or legislative developments at the federal or state level with respect to the 340B Program, could have a material impact on our business. See the\nItem 1. Business\n\u2013\u2013\nPricing Pressures and Managed Care Organizations\n\nand\n\u2013\u2013Government Regulation and Price Constraints\n and the\nItem 1A. Risk Factors\n\u2013\u2013\nPricing and Reimbursement\n\nsections.\nPolicy/Regulatory Environment\n\u2013\u2013\nNew and potential policy, regulatory or other changes from the U.S. Presidential administration, Congress and states, including, among others, increased or new regulatory requirements, including heightened requirements for licensure, changes, delays or failure to receive recommendations, reimbursement and regulatory approvals and coverage for our vaccines and medicines could have a material adverse effect on our business, earnings, cash flows, liquidity and financial guidance.\nImpact of the July 2023 Tornado in Rocky Mount, North Carolina (NC)\n\u2013\u2013\nOur manufacturing facility in Rocky Mount, NC was damaged by a tornado in July 2023. The facility is a key producer of sterile injectables and is responsible for manufacturing nearly 25 percent of all our sterile injectables\u2014including anesthesia, analgesia, and micronutrients. Supply of medicines has recovered from the impact of the tornado. We incurred losses in 2023 and 2024 that were partially offset by insurance recoveries received.\nProduct Supply\n\u2013\u2013\nWe periodically encounter supply delays, disruptions and shortages, including due to voluntary product recalls and natural or man-made disasters. In response to requests from various regulatory authorities, manufacturers across the pharmaceutical industry, including Pfizer, are evaluating their product portfolios for the potential presence or formation of nitrosamines and we are actively engaging with regulatory authorities on this topic. If nitrosamines are detected in products, this may lead to submission of comprehensive data packages to regulatory authorities to support discussions on the relevant intake limit for the product and potential impact on patient supply, and, in some instances, may lead to market action for such products.\nWe have not seen a significant disruption of our supply chain in 2025 and through the date of filing of this Form 10-K, and all of our manufacturing sites globally have continued to operate at or near normal levels. We do not anticipate the availability of raw materials to have a significant impact on our operations in 2026, but are monitoring potential supply chain disruptions as a result of ongoing geopolitical and trade negotiations, which could, among other things, impact costs. We are continuing to monitor and implement mitigation strategies to reduce any potential risk or impact including active supplier management, qualification of additional suppliers and advanced purchasing to the extent possible. For information on risks related to product manufacturing, see the\nItem 1A. Risk Factors\u2013\u2013Product Manufacturing, Sales and Marketing Risks\n section.\nWithdrawal of Oxbryta\n\u2013\u2013\nSee the\nProduct Developments\n section within MD&A.\nThe Global Economic Environment\n\u2013\u2013In addition to the industry-specific factors discussed above, we, like other businesses of our size and global extent of activities, are exposed to economic cycles. Certain factors in the global economic environment that may impact our global operations include, among other things, currency and interest rate fluctuations, global trade tensions, capital and exchange controls, local and global economic conditions including inflation, recession, volatility and/or lack of liquidity in capital markets, expropriation and other restrictive government actions, changes in intellectual property, legal protections and remedies, trade regulations, tariffs, tax laws and regulations and procedures and actions affecting approval, production, pricing, and marketing of, reimbursement for and access to our products, as well as impacts of political or civil unrest or military action and their economic consequences, geopolitical instability, terrorist activity, unstable governments and legal systems, inter-governmental disputes, public health outbreaks, epidemics, pandemics, natural disasters or disruptions related to climate change. Government pressures can lead to negative pricing pressure in various markets where governments take an active role in setting prices, access criteria or other means of cost control. In addition, issued or future executive orders or other new or changes in laws, regulations or policy regarding tariffs or other trade or foreign policy, could have a material adverse effect on our business, earnings, cash flow, liquidity and financial guidance. The actual impact of any new tariffs on our business would be subject to a number of factors including, but not limited to, restrictions on trade, the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs or other retaliatory actions imposed by other countries. We are currently evaluating the impact of the U.S. Supreme Court\u2019s February 2026 decision relating to executive authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). Although we do not believe this decision will have a material impact on our consolidated financial statements, we continue to monitor developments and any potential impacts on our future financial results and business. This decision does not impact the Section 232 investigation of pharmaceuticals, nor executive authority to impose tariffs under other laws, including Section 232. Strategies intended to help mitigate the potential impacts on our business in the short-term have been implemented as well as those outlined in our voluntary agreement with the Trump Administration as discussed above. We are continuing to evaluate opportunities and developing plans which are intended to help mitigate the potential long-term impact of tariffs on our business and operations. For additional information on risks related to our global operations and changes in laws, see the\n\nItem 1A. Risk Factors\u2014Global Operations\n\nand \u2013\u2013\nChanges in Laws and Accounting Standards\n\nsections.\nCOVID-19\n\u2013\u2013In response to COVID-19, we developed Paxlovid and collaborated with BioNTech to jointly develop Comirnaty. As part of our strategy for COVID-19, we are continuing to make significant investments in breakthrough science. This includes evaluating Comirnaty and Paxlovid, investigating new variants of concern, and developing variant adapted vaccine candidates. In addition, we are exploring combination respiratory vaccines and next generation anti-infectives. See the\nProduct Developments\n section within MD&A.\nIn 2023, we principally sold Comirnaty globally under government contracts. In September 2023, Comirnaty transitioned to traditional commercial market sales in the U.S., triggered by the expiration of contracts. Internationally, sales of Comirnaty are under a combination of private channels and government contracts, as we started transitioning to commercial markets in 2024. In 2025, due to seasonality of demand for COVID-19 vaccinations, the majority of our global revenues for Comirnaty were recorded in the fourth quarter. In 2026, we expect market share in commercial markets and revenue phasing similar to 2025, primarily concentrated in the second-half of the year. However, we could see\nPfizer Inc.\n2025 Form 10-K\n33\ncontinuous decline in vaccination rates due to additional changes in vaccination recommendations, and the expected impact has been incorporated in our 2026 financial guidance. See\nItem 1A. Risk Factors\u2014U.S. Healthcare Regulati\non\n for a description of certain risks and uncertainties that could impact revenue from our portfolio of vaccines.\nIn 2023, we principally sold Paxlovid globally to government agencies. On October 13, 2023, we announced an amended agreement with the U.S. government, which facilitated the transition of Paxlovid to traditional commercial markets in the U.S. Internationally, most revenue was generated through commercial channels in 2025. We expect a higher proportion of revenues to be delivered in the second-half of the year and revenues to fluctuate based on the timing, duration and severity of COVID-19 cases. The expected impact of lower demand has been incorporated in our 2026 financial guidance.\nFor information on risks associated with our COVID-19 products, as well as COVID-19 intellectual property disputes, see the\nForward-Looking Information and Factors that May Affect Future Results\n,\nItem 1A. Risk Factors\n\u2014\nCOVID-19\n,\n\u2014\nIntellectual Property Protection\n\nand\n\u2013\u2013\nThird-Party Intellectual Property Claims\n sections as well as\nNotes 16A1\n and\n17C\n. For additional information on revenues, see the\nTotal Revenues by Geograph\ny\nand\nTotal Revenues\n\u2014\nSelected Product Discussion\n sections within MD&A.\nSIGNIFICANT ACCOUNTING POLICIES AND APPLICATION OF CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS\nFollowing is a discussion about the critical accounting estimates and assumptions impacting our consolidated financial statements. Also, see\nNote 1C\n.\nFor a description of our significant accounting policies, see\nNote 1\n. Of these policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of the most subjective and the most complex judgments: Acquisitions\n(\nNote 1D\n); Fair Value (\nNote 1E\n); Revenues (\nNote 1G\n);\u00a0Asset Impairments (\nNote 1M\n);\u00a0Income Taxes (\nNote 1Q\n);\u00a0Pension and Postretirement Benefit Plans (\nNote 1R\n); and Legal and Environmental Contingencies (\nNote 1S\n).\nFor a discussion of recently adopted accounting standards, see\nNote 1B\n.\nAcquisitions\nWe account for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair value as of the acquisition date. To estimate fair value, we utilize an exit price approach from the perspective of a market participant. For further detail on acquisition accounting, see\nNote 1D\n. For further detail on the techniques and methodologies that we use to estimate fair value, see\nNote 1E\n.\n Historically, intangible assets have been the most significant fair values within our business combinations. We utilize an income approach to estimate the acquisition date fair value of each identifiable intangible asset. Some of the more significant estimates and assumptions inherent in this approach include the amount and timing of projected net cash flows, the discount rate, the tax rate, and, for IPR&D assets, the probability of technical and regulatory success (PTRS). All of these judgments and estimates can materially impact our results of operations. For further information on our process to estimate the fair value of intangible assets, see\nAsset Impairments\n below.\nWe estimate the fair value of acquired inventory, including finished goods and work in process, by determining the estimated selling price when completed, less an estimate of costs to be incurred to complete and sell the inventory, and an estimate of a reasonable profit allowance for those manufacturing and selling efforts. The fair value of inventory is recognized in our results of operations as the inventory is sold. Some of the more significant estimates and assumptions inherent in the estimate of the fair value of inventory include stage of completion, costs to complete, costs to dispose and selling price.\nWe estimate the fair value of acquired PP&E using a combination of the cost and market approaches. Some of the more significant estimates and assumptions inherent in these approaches are the values of asset replacement costs, comparable assets and estimated remaining economic lives of the assets. We estimate the fair value of contingent consideration utilizing an income approach, specifically a discounted cash flow method. Some of the more significant estimates and assumptions inherent in this approach include the PTRS, discount rate and amount and timing of milestone events and projected sales.\nFor the provisional amounts recognized for the Metsera assets acquired and liabilities assumed as of the acquisition date, see\nNote 2A\n. The estimated values are not yet finalized and are subject to change, which could be significant. We will finalize the amounts recognized as we obtain the information necessary to complete the analyses. We expect to finalize the amounts of assets acquired and liabilities assumed as soon as possible but no later than one year from the acquisition date.\nRevenues\nOur gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. Such variable consideration represents chargebacks, rebates, sales allowances and sales returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these revenue deductions on gross sales for a reporting period. Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business and generally have been less than 1% of revenues. Product-specific rebates, however, can have a significant impact on year-over-year individual product revenue growth trends. If any of our ratios, factors, assessments, experiences or judgments are not indicative or accurate estimates of our future experience, our results could be materially affected. The potential of our estimates to vary (sensitivity) differs by program, product, type of customer and geographic location. However, estimates associated with U.S. Medicare, Medicaid and performance-based contract rebates are most at risk for material adjustment because of the extensive time delay between the recording of the accrual and its ultimate settlement, an interval that can generally range up to one year. Because of this lag, our recording of adjustments to reflect actual amounts can incorporate revisions of several prior quarters. Rebate accruals are product specific and, therefore for any period, are impacted by the mix of products sold as well as the forecasted channel mix for each individual product. For further information, see the\nProduct Revenue Deductions\n section within MD&A and\nNote 1G\n.\nAsset Impairments\nWe review all of our long-lived assets for impairment indicators throughout the year. We perform impairment testing for indefinite-lived intangible assets and goodwill at least annually and for all other long-lived assets whenever impairment indicators are present. When necessary, we record\nPfizer Inc.\n2025 Form 10-K\n34\ncharges for impairments of long-lived assets for the amount by which the fair value is less than the carrying value of these assets. Our impairment review processes are described in\nNote 1M\n.\nExamples of events or circumstances that may be indicative of impairment include:\n\u2022\nA significant adverse change in legal factors or in the business climate that could affect the value of the asset. For example, a successful challenge of our patent rights would likely result in generic competition earlier than expected.\n\u2022\nA significant adverse change in the extent or manner in which an asset is used such as a restriction imposed by the FDA or other regulatory authorities, withdrawals or other unusual items that could affect our ability to manufacture or sell a product.\n\u2022\nAn expectation of losses or reduced profits associated with an asset. This could result, for example, from a change in development plans or a change in a government reimbursement program that results in an inability to sustain projected product revenues and profitability. This also could result from the introduction of a competitor\u2019s product that impacts projected revenue growth, as well as the lack of acceptance of a product by patients, physicians and payors. For IPR&D projects, this could result from, among other things, a change in outlook based on clinical trial data, a delay in the projected launch date or additional expenditures to commercialize the product.\n\u2022\nChanges in development plans and/or de-prioritization of certain assets.\nIdentifiable Intangible Assets\n\u2013\u2013We use an income approach, specifically the discounted cash flow method to determine the fair value of intangible assets, other than goodwill. We start with a forecast of all the expected net cash flows associated with the asset, which incorporates the consideration of a terminal value for indefinite-lived assets, and then we apply an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions that impact our fair value estimates include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the projections and the impact of technological advancements and risk associated with IPR&D assets, as well as the selection of a long-term growth rate; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the jurisdictional mix of the projected cash flows.\nWhile all intangible assets other than goodwill can face events and circumstances that can lead to impairment, those that are most at risk of impairment include IPR&D assets (approximately $21.8 billion as of December 31, 2025) and newly acquired or recently impaired indefinite-lived brand assets. IPR&D assets are high-risk assets, given the uncertain nature of R&D. Newly acquired and recently impaired indefinite-lived assets are more vulnerable to impairment as the assets are recorded at fair value and are then subsequently measured at the lower of fair value or carrying value at the end of each reporting period. As such, immediately after acquisition or impairment, even small declines in the outlook for these assets can negatively impact our ability to recover the carrying value and can result in an impairment charge.\nGoodwill\n\u2013\u2013Our goodwill impairment review work as of December 31, 2025 concluded that none of our goodwill was impaired and we do not believe the risk of impairment is significant at this time.\nIn our review, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Qualitative factors that we consider include, for example, macroeconomic and industry conditions, overall financial performance and other relevant entity-specific events. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then perform a quantitative fair value test.\nWhen we are required to determine the fair value of a reporting unit, we typically use the income approach. The income approach is a forward-looking approach to estimating fair value and relies primarily on internal forecasts. Within the income approach, we use the discounted cash flow method. We start with a forecast of all the expected net cash flows for the reporting unit, which includes the application of a terminal value, and then we apply a reporting unit-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of technological risk and competitive, legal and/or regulatory forces on the projections, as well as the selection of a long-term growth rate; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.\nFor all of our reporting units, there are a number of future events and factors that may impact future results and that could potentially have an impact on the outcome of subsequent goodwill impairment testing. For a list of these factors, see the\nForward-Looking Information and Factors That May Affect Future Result\ns\n and the\nItem 1A. Risk Factors\n sections.\nBenefit Plans\nFor a description of our different benefit plans, see\n\nNote 11\n.\nOur assumptions reflect our historical experiences and our judgment regarding future expectations that have been deemed reasonable by management. The judgments made in determining the costs of our benefit plans can materially impact our results of operations.\nThe following provides (i) at the end of each year, the expected annual rate of return on plan assets for the following year, (ii) the actual annual rate of return on plan assets achieved in each year, and (iii) the weighted-average discount rate used to measure the benefit obligations at the end of each year for our U.S. pension plans and our international pension plans\n(a)\n:\n2025\n2024\n2023\nU.S. Pension Plans\nExpected annual rate of return on plan assets\n7.8\n\n%\n7.7\n%\n8.0\n%\nActual annual rate of return on plan assets\n9.8\n\n1.3\n10.4\nDiscount rate used to measure the plan obligations\n5.6\n\n5.7\n5.4\nInternational Pension Plans\nExpected annual rate of return on plan assets\n5.1\n\n4.9\n5.1\nActual annual rate of return on plan assets\n0.8\n\n6.4\n(4.6)\nDiscount rate used to measure the plan obligations\n4.7\n\n4.1\n4.4\n(a)\nFor detailed assumptions associated with our benefit plans, see\nNote 11B\n.\nPfizer Inc.\n2025 Form 10-K\n35\nExpected Annual Rate of Return on Plan Assets\n\u2013\u2013The assumptions for the expected annual rate of return on all of our plan assets reflect our actual historical return experience and our long-term assessment of forward-looking return expectations by asset classes, which is used to develop a weighted-average expected return based on the implementation of our targeted asset allocation in our respective plans.\nThe expected annual rate of return on plan assets for our U.S. plans and international plans is applied to the fair value of plan assets at each year-end and the resulting amount is reflected in our net periodic benefit costs in the following year. Differences between the actual rate of return on plan assets and the expected annual rate of return on plan assets are immediately recognized through earnings upon remeasurement.\nThe following illustrates the sensitivity of net periodic benefit costs to a 50 basis point decline in our assumption for the expected annual rate of return on plan assets, holding all other assumptions constant (in millions, pre-tax):\nAssumption\nChange\nIncrease in 2026\nNet Periodic\nBenefit Costs\nExpected annual rate of return on plan assets\n(a)\n50 basis point decline\n$87\n(a)\nThe estimate excludes any potential mark-to-market adjustments.\nThe actual return on plan assets was $1.1 billion during 2025\n.\nDiscount Rate Used to Measure Plan Obligations\n\u2013\u2013The weighted-average discount rate used to measure the plan obligations for our U.S. defined benefit plans is determined at least annually and evaluated and modified, as required, to reflect the prevailing market rate of a portfolio of high-quality fixed income investments, rated AA/Aa or better, that reflect the rates at which the pension benefits could be effectively settled. The discount rate used to measure the plan obligations for our significant international plans is determined at least annually by reference to investment grade corporate bonds, rated AA/Aa or better, including, when there is sufficient data, a yield-curve approach. These discount rate determinations are made in consideration of local requirements. The measurement of plan obligations at the end of the year will affect (i) the actuarial (gains)/losses recognized in our net periodic benefit cost for that year and (ii) the amount of service cost and interest cost reflected in our net periodic benefit costs in the following year.\nThe following illustrates the sensitivity of net periodic benefit costs and benefit obligations to a 10 basis point decline in our assumption for the discount rate, holding all other assumptions constant (in millions, pre-tax):\nAssumption\nChange\nDecrease in 2026 Net Periodic Benefit Costs\nIncrease to 2025 Benefit Obligations\nDiscount rate\n10 basis point decline\n$5\n$201\nThe change in the discount rates used in measuring our plan obligations as of December 31, 2025 resulted in a decrease in the measurement of our aggregate plan obligations by approximately $446 million.\nIncome Tax Assets and Liabilities\nIncome tax assets and liabilities include income tax valuation allowances and accruals for uncertain tax positions. See\nNotes 1Q\n\nand\n5\n,\nas well as the\nAnalysis of Financial Condition, Liquidity, Capital Resources and Market Risk\n section within MD&A\n.\nContingencies\nWe and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business, including tax and legal contingencies, guarantees and indemnifications. See\nNotes 1Q\n,\n\n1S\n,\n\n5D\n and\n16\n.\nANALYSIS OF THE CONSOLIDATED STATEMENTS OF OPERATIONS\nTotal Revenues by Geography\nThe following presents worldwide\nTotal revenues\n by geography:\n\nYear Ended December 31,\n% Change\n\nWorldwide\nU.S.\nInternational\nWorldwide\nU.S.\nInternational\n(MILLIONS)\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\n25/24\n24/23\n25/24\n24/23\n25/24\n24/23\nOperating segments:\nBiopharma\n$\n61,199\n\n$\n62,400\n$\n58,237\n$\n36,708\n\n$\n38,332\n$\n27,749\n$\n24,491\n\n$\n24,068\n$\n30,488\n(2)\n7\n(4)\n38\n2\n\n(21)\nPfizer CentreOne\n1,338\n\n1,146\n1,272\n329\n\n278\n352\n1,010\n\n868\n920\n17\n\n(10)\n18\n\n(21)\n16\n\n(6)\nPfizer Ignite\n41\n\n82\n44\n41\n\n82\n44\n\u2014\n\n\u2014\n\u2014\n(50)\n85\n(50)\n85\n\u2014\n\u2014\nTotal revenues\n$\n62,579\n\n$\n63,627\n$\n59,553\n$\n37,078\n\n$\n38,691\n$\n28,145\n$\n25,501\n\n$\n24,936\n$\n31,408\n(2)\n7\n(4)\n37\n2\n\n(21)\nPfizer Inc.\n2025 Form 10-K\n36\n2025 v. 2024\nThe following provides an analysis of the worldwide change in\nTotal revenues\n by geographic areas from 2024 to 2025:\n(MILLIONS)\nWorldwide\nU.S.\nInternational\nOperational growth/(decline):\nWorldwide declines from Paxlovid\n$\n(3,346)\n$\n(2,725)\n$\n(622)\nWorldwide declines from Comirnaty\n(1,051)\n(341)\n(710)\nWorldwide growth from the Vyndaqel family, Eliquis, Padcev, Lorbrena, Abrysvo, Nurtec ODT/Vydura, Xtandi and the Prevnar family, partially offset by worldwide declines from Ibrance, Adcetris and Xeljanz\n2,154\n\n854\n\n1,299\n\nGrowth in oncology biosimilars, largely due to favorable net price in the U.S.\n266\n\n286\n\n(20)\nOther operational factors, net\n682\n\n312\n\n371\n\nOperational growth/(decline), net\n(1,295)\n(1,613)\n318\n\nFavorable impact of foreign exchange\n247\n\n\u2014\n\n247\n\nTotal revenues\n increase/(decrease)\n$\n(1,048)\n$\n(1,613)\n$\n565\n\nSee the\nTotal Revenues\u2013\u2013Selected Product Discussion\n section within MD&A for additional analysis and\nNote 17C\n.\nProduct Revenue Deductions\n\u2013\u2013\nOur gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. These deductions represent estimates of the related obligations and, as such, knowledge and judgment are required when estimating the impact of these product revenue deductions on gross sales for a reporting period. Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business and generally have been less than 1% of revenues. Product-specific rebates, however, can have a significant impact on year-over-year individual product revenue growth trends.\nThe following presents information about product revenue deductions:\n\nYear\u00a0Ended\u00a0December\u00a031,\n(MILLIONS)\n2025\n2024\n2023\nMedicare rebates\n$\n4,511\n\n$\n4,145\n$\n997\nMedicaid and related state program rebates\n1,803\n\n2,252\n1,655\nPerformance-based contract rebates\n7,034\n\n6,497\n5,159\nChargebacks\n13,973\n\n12,698\n9,828\nSales allowances\n7,288\n\n6,444\n6,790\nSales returns and cash discounts\n1,766\n\n1,852\n5,619\nTotal\n$\n36,374\n\n$\n33,888\n$\n30,048\nProduct revenue deductions are primarily a function of product sales volume, mix of products sold, contractual or legislative discounts and rebates.\nFor information on our accruals for product revenue deductions, including the balance sheet classification of these accruals, see\nNote 1G\n.\nPfizer Inc.\n2025 Form 10-K\n37\nTotal Revenues\u2014Selected Product Discussion\nBiopharma\nRevenue\n(MILLIONS)\nYear Ended Dec. 31,\n% Change\nProduct\nGlobal\nRevenues\nRegion\n2025\n2024\nTotal\nOper.\nOperational Results Commentary\nEliquis\n$7,961\nUp 7%\n(operationally)\nU.S.\n$\n5,148\n\n$\n4,803\n7\n\nGrowth driven by higher demand globally, partially offset by lower net price in the U.S., as well as generic entry and price erosion in certain international markets.\nInt\u2019l.\n2,813\n\n2,563\n10\n\n7\n\nWorldwide\n$\n7,961\n\n$\n7,366\n8\n\n7\n\nPrevnar family\n$6,494\nUp 1%\n(operationally)\nU.S.\n$\n4,151\n\n$\n4,233\n(2)\nGrowth primarily driven by strong uptake of the adult indication in certain international markets, new launches of the pediatric indication in certain emerging markets, as well as strong uptake of the adult indication in the U.S. as a result of strong demand following the CDC\u2019s recommendation for ages 50-64, partially offset by worldwide lower pediatric indication sales mostly due to timing of CDC shipments in the U.S., as well as lower shipments and competitive pressure in certain international markets.\nInt\u2019l.\n2,342\n\n2,178\n8\n\n7\n\nWorldwide\n$\n6,494\n\n$\n6,411\n1\n\n1\n\nVyndaqel family\n$6,380\nUp 16%\n(operationally)\nU.S.\n$\n3,834\n\n$\n3,547\n8\n\nGrowth primarily driven by strong demand with continuing uptake in patient diagnosis primarily in the U.S. and certain international developed markets, as well as improved patient affordability in the U.S., partially offset by lower net price in the U.S. mostly due to the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign as well as new payer contracts with reduced pricing.\nInt\u2019l.\n2,546\n\n1,904\n34\n\n30\n\nWorldwide\n$\n6,380\n\n$\n5,451\n17\n\n16\n\nComirnaty\n$4,367\nDown 20%\n(operationally)\nU.S.\n$\n1,663\n\n$\n2,004\n(17)\nDeclines primarily driven by lower contractual deliveries and lower vaccination rates in certain international markets, as well as lower utilization in the U.S. resulting from narrower recommendation for vaccination, partially offset by lower returns and higher market share in the U.S.\nInt\u2019l.\n2,705\n\n3,349\n(19)\n(21)\nWorldwide\n$\n4,367\n\n$\n5,353\n(18)\n(20)\nIbrance\n$4,122\nDown 6%\n\n(operationally)\nU.S.\n$\n2,710\n\n$\n2,849\n(5)\nDeclines primarily driven by lower net price in the U.S. largely due to the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign, as well as generic entry in certain international markets, partially offset by improved patient affordability and improved market share supported by new clinical data, both in the U.S., as well as a favorable adjustment of rebate accruals for international markets related to prior periods recorded in 2025.\nInt\u2019l.\n1,412\n\n1,518\n(7)\n(9)\nWorldwide\n$\n4,122\n\n$\n4,367\n(6)\n(6)\nPaxlovid\n$2,362\nDown 59%\n(operationally)\nU.S.\n$\n1,891\n\n$\n4,616\n(59)\nDeclines primarily driven by:\n\u2022 lower COVID-19 infections across U.S. and international markets and lower international government purchases;\n\u2022 the non-recurrence of a $771 million favorable final adjustment recorded in the first quarter of 2024 to the estimated non-cash revenue reversal of $3.5 billion recorded in the fourth quarter of 2023; and\n\u2022 the non-recurrence of a $442 million favorable U.S. government stockpile purchase in the third quarter of 2024,\npartially offset by:\n\u2022 favorable adjustments of rebate accruals related to prior periods, as well as higher net price in the U.S. following transition from the U.S. government agreement.\nInt\u2019l.\n470\n\n1,100\n(57)\n(57)\nWorldwide\n$\n2,362\n\n$\n5,716\n(59)\n(59)\nXtandi\n$2,194\nUp 8%\n(operationally)\nU.S.\n$\n2,194\n\n$\n2,039\n8\n\nGrowth mainly driven by strong demand, in part due to improved patient affordability in the U.S., partially offset by unfavorable buying patterns and lower net price partly due to the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign.\nInt\u2019l.\n\u2014\n\n\u2014\n\u2014\n\u2014\nWorldwide\n$\n2,194\n\n$\n2,039\n8\n\n8\n\nPadcev\n$1,940\nUp 22%\n(operationally)\nU.S.\n$\n1,902\n\n$\n1,561\n22\n\nGrowth primarily driven by increased market share in first line locally advanced or metastatic urothelial cancer (la/mUC), as well as by a one-time favorable impact associated with transition to a wholesaler distribution model in the U.S.\nInt\u2019l.\n38\n\n27\n42\n\n43\n\nWorldwide\n$\n1,940\n\n$\n1,588\n22\n\n22\n\nNurtec ODT/Vydura\n$1,424\nUp 13%\n(operationally)\nU.S.\n$\n1,322\n\n$\n1,193\n11\n\nGrowth primarily driven by strong demand in the U.S. and recent launches in certain international markets, partially offset by lower net price in the U.S. mainly due to unfavorable changes in channel mix.\nInt\u2019l.\n102\n\n69\n46\n\n44\n\nWorldwide\n$\n1,424\n\n$\n1,263\n13\n\n13\n\nPfizer Inc.\n2025 Form 10-K\n38\nRevenue\n(MILLIONS)\nYear Ended Dec. 31,\n% Change\nProduct\nGlobal\nRevenues\nRegion\n2025\n2024\nTotal\nOper.\nOperational Results Commentary\nXeljanz\n$1,087\nDown 7%\n(operationally)\nU.S.\n$\n625\n\n$\n680\n(8)\nDeclines primarily driven by lower net price in the U.S. due to unfavorable changes in channel mix and the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign, as well as lower demand and price erosion across international developed markets.\nInt\u2019l.\n462\n\n488\n(5)\n(6)\nWorldwide\n$\n1,087\n\n$\n1,168\n(7)\n(7)\nAbrysvo\n$1,033\nUp 36%\n(operationally)\nU.S.\n$\n542\n\n$\n594\n(9)\nGrowth primarily driven by launch uptake for both the adult and maternal indications in certain international markets, as well as increased market share in the adult indication and higher demand in the maternal indication\u2014both in the U.S., partially offset by lower vaccination rates for the older adult indication following an updated ACIP recommendation in the U.S.\nInt\u2019l.\n491\n\n160\n*\n*\nWorldwide\n$\n1,033\n\n$\n755\n37\n\n36\n\nLorbrena\n$1,023\nUp 40%\n(operationally)\nU.S.\n$\n407\n\n$\n306\n33\n\nGrowth primarily driven by increased patient share in the first-line ALK+ metastatic NSCLC treatment setting in the U.S., China and certain other international markets, partially offset by lower net price in the U.S. mainly due to the impact of higher manufacturer discounts resulting from the IRA Medicare Part D Redesign.\nInt\u2019l.\n616\n\n424\n45\n\n44\n\nWorldwide\n$\n1,023\n\n$\n731\n40\n\n40\n\nAdcetris\n$907\nDown 17%\n(operationally)\nU.S.\n$\n885\n\n$\n1,059\n(16)\nDeclines primarily driven by lower volume due to competitive pressures in the U.S. as a result of changes of guidelines in 2024, partially offset by a one-time favorable impact associated with transition to a wholesaler distribution model in the U.S.\nInt\u2019l.\n23\n\n30\n(25)\n(23)\nWorldwide\n$\n907\n\n$\n1,089\n(17)\n(17)\nPfizer CentreOne\nRevenue\n(MILLIONS)\nYear Ended Dec. 31,\n% Change\nOperating Segment\nGlobal\nRevenues\nRegion\n2025\n2024\nTotal\nOper.\nOperational Results Commentary\nPC1\n$1,338\nUp 15%\n(operationally)\nU.S.\n$\n329\n\n$\n278\n18\n\nGrowth driven by higher manufacturing of third-party products under manufacturing and supply agreements, higher manufacturing-related services and higher active pharmaceutical ingredient sales.\nInt\u2019l.\n1,010\n\n868\n16\n\n15\n\nWorldwide\n$\n1,338\n\n$\n1,146\n17\n\n15\n\nSee the\nItem 1. Business\n\u2014\nPatents and Other Intellectual Property Rights\n section for information regarding the expiration of various patent rights,\nNote 16\n\nfor a discussion of recent developments concerning patent and product litigation relating to certain of the products discussed above and\nNote 17C\n\nfor the primary indications or class of the selected products discussed above.\nCosts and Expenses\nCosts and expenses follow:\nYear\u00a0Ended\u00a0December\u00a031,\n% Change\n(MILLIONS)\n2025\n2024\n2023\n25/24\n24/23\nCost of sales\n$\n16,067\n\n$\n17,851\n$\n24,954\n(10)\n(28)\nPercentage of\nTotal revenues\n25.7\n\n%\n28.1\n%\n41.9\n%\nSelling, informational and administrative expenses\n13,794\n\n14,730\n14,771\n(6)\n\u2014\nResearch and development expenses\n10,437\n\n10,822\n10,679\n(4)\n1\nAcquired in-process research and development expenses\n1,613\n\n108\n194\n*\n(44)\nAmortization of intangible assets\n4,874\n\n5,286\n4,733\n(8)\n12\nRestructuring charges and certain acquisition-related\ncosts\n1,550\n\n2,419\n2,943\n(36)\n(18)\nOther (income)/deductions\u2014net\n6,724\n\n4,388\n222\n53\n\n*\n2025 v. 2024\nCost of Sales\nCost of sales\n decreased $1.8\u00a0billion, primarily due to:\n\u2022\na favorable change in sales mix of $1.4\u00a0billion driven by lower sales of Comirnaty and Paxlovid, including the non-recurrence of charges recorded in 2024 that were included in the 50% gross profit split with BioNTech and applicable royalty expenses;\nPfizer Inc.\n2025 Form 10-K\n39\n\u2022\na decrease of $633 million due to lower amortization from the step-up of acquired inventory; and\n\u2022\nnet favorable revisions to our estimate of accrued royalties,\npartially offset by:\n\u2022\na $288 million unfavorable impact of foreign exchange.\nThe decrease in\nCost of sales\n as a percentage of revenues was primarily due to the factors mentioned above, and also partially offset by the non-recurrence of the Paxlovid favorable final adjustment of $771\u00a0million recorded in the first quarter of 2024 to the estimated non-cash Paxlovid revenue reversal recorded in the fourth quarter of 2023.\nCertain of our vaccines, including Comirnaty, are subject to seasonality of demand, with a greater portion of revenues and related cost of sales anticipated in the fall and winter seasons.\nSee also the\nOverview of Our Performance, Operating Environment, Strategy and Outlook\n\u2014The Global Economic Environment\u2013\u2013COVID-19\n section for information about our COVID-19 products.\nSelling, Informational and Administrative Expenses\nSelling, informational and administrative expenses\ndecreased $936\u00a0million, primarily reflecting focused investments and ongoing productivity improvements as part of our cost realignment program that drove:\n\u2022\na decrease of $930 million in marketing and promotional spend on various products; and\n\u2022\nlower spending of $395 million in corporate enabling functions,\npartially offset by:\n\u2022\nan increase of $230 million due to a favorable adjustment of U.S. healthcare reform fees recorded in 2024 primarily related to Paxlovid and Comirnaty.\nResearch and Development Expenses\nResearch and development expenses\n decreased $385 million, primarily driven by a net decrease in spending of $490\u00a0million due to pipeline focus and optimization initiatives including the expansion of our digital capabilities, as well as lower compensation-related expenses.\nAcquired In-Process Research and Development Expenses\nAcquired in-process research and development expenses\n increased $1.5 billion, primarily driven by a $1.35 billion charge related to an in-licensing agreement with 3SBio and a $150\u00a0million charge related to an in-licensing agreement with YaoPharma.\nAmortization of Intangible Assets\nAmortization of intangible assets\n decreased $413 million, primarily due to lower amortization related to Prevnar, fully amortized assets and asset impairments.\nRestructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives\nRealigning Our Cost Base Program\n\u2013\u2013\nThis program is expected to deliver total net cost savings of approximately $5.7 billion through 2026. The total net cost savings are composed of net cost savings of $5.1 billion achieved through 2025, and the remaining anticipated savings of $600 million, primarily in SI&A, expected to be achieved by the end of 2026. In addition, we achieved cost savings of approximately $500 million from our pipeline focus and optimization initiatives including the expansion of our digital capabilities, with the savings expected to be reinvested in R&D programs by the end of 2026.\nManufacturing Optimization Program\n\u2013\u2013\nThe first phase of this multi-phased program is on track to deliver approximately $1.5\u00a0billion in net cost savings by the end of 2027, with approximately $600 million of net cost savings realized by year-end 2025.\nCertain qualifying costs for these programs in all periods since inception were recorded and reflected as Certain Significant Items and excluded from our non-GAAP measure of Adjusted Income. See the\nNon-GAAP Financial Measure: Adjusted Income\n section within MD&A.\nFor a description of our programs, as well as the anticipated and actual costs, see\nNote 3A\n.\nThe program savings discussed above may be rounded and represent approximations. In addition to these programs, we continuously monitor our operations for cost reduction and/or productivity opportunities, especially in light of patent-based and regulatory exclusivity expiries as well as the expiration of collaborative arrangements for various products. Long-term improvement in gross margin will remain a key focus for the Company over the next few years.\nSeagen acquisition\n\u2013\u2013\nIn connection with our acquisition of Seagen, we are focusing our efforts on achieving an appropriate cost structure for the combined company. We expect to generate approximately $1 billion of annual cost synergies, to be achieved by the end of 2026, with approximately $800 million of annual cost synergies achieved by year-end 2025. The one-time costs to generate these synergies are expected to be approximately $1.7\u00a0billion, the majority of which has been incurred through 2025.\nMetsera acquisition\n\u2013\u2013\nIn connection with our acquisition of Metsera, we are focusing our efforts on achieving an appropriate cost structure for the combined company. We expect to generate approximately $600 million of annual cost synergies, to be achieved by the end of 2026. The one-time costs to generate these synergies are expected to be approximately $700 million, incurred primarily from 2025 through 2027.\nOther (Income)/Deductions\u2013\u2013Net\nThe unfavorable period-over-period change of $2.3 billion was primarily driven by (i) higher intangible asset impairments of $1.6 billion, (ii) an unfavorable impact of $1.1 billion due to net losses on equity securities in 2025 versus net gains on equity securities in 2024, (iii) the non-recurrence of realized gains of $945 million on the partial sale of our previous investment in Haleon in 2024, and (iv) higher charges for certain legal matters of $490 million, partially offset by (v) a favorable impact of $832 million due to net periodic benefit credits associated with pension and postretirement plans in 2025 versus net periodic benefit costs in 2024, (vi) lower net interest expense of $478 million primarily driven by a reduction in commercial paper outstanding, compared to 2024, and (vii) the non-recurrence of a charge of $420 million in 2024 related to the expected sale of one of our facilities resulting from the discontinuation of our DMD program. See\nNote 4\n.\nPfizer Inc.\n2025 Form 10-K\n40\nProvision/(Benefit) for Taxes on Income\n\nYear\u00a0Ended\u00a0December\u00a031,\n% Change\n(MILLIONS)\n2025\n2024\n2023\n25/24\n24/23\nProvision/(benefit) for taxes on income\n$\n(266)\n$\n(28)\n$\n(1,115)\n*\n(97)\nEffective tax rate on continuing operations\n(3.5)\n%\n(0.4)\n%\n*\nFor information about our effective tax rate and the events and circumstances contributing to the changes between periods, as well as details about discrete elements that impacted our tax provisions, and income taxes paid (net of refunds received), see\nNote 5\n.\nChanges in Tax Laws\u2013\u2013\nMany countries outside the U.S. have enacted legislation for global minimum taxation resulting from the Organization for Economic Co-operation and Development\u2019s (OECD) Base Erosion and Profit Shifting \u201cPillar 2\u201d project. The EU approved a directive requiring member states to incorporate the OECD provisions into their respective domestic laws, and countries outside the EU have also been enacting the provisions into their domestic law. The provisions are generally effective for Pfizer since 2024, though significant details and guidance around the provisions are still pending. Income tax expense could be impacted as Pillar 2 legislation becomes effective or is amended in countries in which we do business, and such impact could be material to our results of operations. We continue to monitor pending OECD guidance and legislation enactment and implementation by individual countries.\nOn July 4, 2025, the OBBBA was enacted into law in the U.S. The OBBBA includes significant tax provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and modifications to the U.S. international tax framework. Among the favorable business provisions are the permanent expensing for domestic R&D costs, permanent bonus depreciation and full expensing of qualified production property. The legislation includes various effective dates, with certain provisions effective in 2025.\n\nWe expect further guidance may be issued by the U.S. government with respect to certain OBBBA tax provisions.\nThe OBBBA also renamed the provision for taxes on foreign earnings from GILTI to NCTI and established a 12.6% tax rate on such foreign earnings effective in the fiscal year 2026 (down from 13.125% in 2026 before the enactment of the OBBBA). We have elected to recognize deferred taxes for temporary differences expected to reverse as GILTI, now NCTI, in future years. As a result of the enactment of the OBBBA, in the third quarter of 2025, we remeasured our deferred tax balances related to NCTI for the changes in the tax rate and recorded a one-time tax benefit that was not material to our results of operations. See\nN\note 5B\n.\nPRODUCT DEVELOPMENTS\nA comprehensive update of Pfizer\u2019s development pipeline was published as of February 3, 2026 and is available at\nwww.pfizer.com/science/drug-product-pipeline\n. It includes an overview of our research and a list of compounds in development with targeted indication and phase of development, as well as mechanism of action for some candidates in Phase 1 and all candidates from Phase 2 through registration.\nThis section provides information as of the date of this filing about significant marketing application-related regulatory actions by, and filings pending with, the FDA and regulatory authorities in the EU and Japan.\nThe table below generally includes filing and approval milestones for products that have occurred in the last twelve months and does not include approvals that may have occurred prior to that time. The table includes filings with regulatory decisions pending (even if the filing occurred outside of the last twelve-month period).\nPfizer Inc.\n2025 Form 10-K\n41\nPRODUCT\nINDICATION OR PROPOSED INDICATION\nAPPROVED/FILED^\nU.S.\nEU\nJAPAN\nNurtec ODT/Vydura\n(rimegepant)\nAcute treatment of migraine with or without aura in adults\nApproved\nFebruary\n2020\nApproved\n\nApril\n2022\nApproved\nSeptember 2025\nPrevention of episodic migraine in adults\nApproved\nMay\n2021\nApproved\n\nApril\n2022\nApproved\n September 2025\nAbrysvo\n(Vaccine)\nActive immunization for the prevention of lower respiratory tract disease caused by RSV in individuals 18-59 years of age who are at increased risk of lower respiratory tract disease caused by RSV\nApproved\nOctober\n2024\nApproved\nMarch\n2025\nVelsipity (etrasimod)\nModerately to severely active UC in adults\nApproved\nOctober\n2023\nApproved\nFebruary\n2024\nApproved\n\nJune\n2025\nBraftovi (encorafenib),\nErbitux\n\u00ae\n (cetuximab)\n\nand mFOLFOX6\n(a)\nFirst-line BRAF\nV600E\n-mutant mCRC\nApproved\nDecember 2024\nFiled\nNovember\n2025\nApproved\nNovember\n2025\nHympavzi\n(marstacimab-hncq)\nAdults and pediatric patients 12 years of age and older with hemophilia A with FVIII inhibitors or hemophilia B with FIX inhibitors\nFiled\nFebruary\n2026\nFiled\nOctober\n2025\nFiled\nDecember\n2025\nPediatric patients \u22656 to <12 years of age with hemophilia A with or without FVIII inhibitors, or hemophilia B with or without FIX inhibitors\nFiled\nFebruary\n2026\nEmblaveo\n(aztreonam-avibactam)\n(b)\nTreatment of infections in adult patients caused by Gram-negative bacteria with limited or no treatment options\nApproved\n February 2025\nApproved\nApril\n2024\nTivdak\n(tisotumab vedotin-tftv)\n(c)\nRecurrent or mCC with disease progression on or after chemotherapy\nApproved\nApril\n2024\nApproved\nMarch\n2025\nApproved\nMarch\n2025\nComirnaty (COVID-19 Vaccine, mRNA) 2025-2026 Formula, LP.8.1\n(d)\nActive immunization to prevent COVID-19 caused by SARS-CoV-2 for individuals 65 years of age and older\nApproved\nAugust\n2025\nActive immunization to prevent COVID-19 caused by SARS-CoV-2 for individuals 5 years through 64 years of age with at least one underlying condition that puts them at high risk for severe outcomes from COVID-19\nApproved\nAugust\n2025\nActive immunization to prevent COVID-19 caused by SARS-CoV-2 for individuals 6 months of age and older\nApproved\nJuly\n2025\nApproved\nAugust\n2025\nAdcetris\n(brentuximab vedotin)\n(e)\nRelapsed/refractory diffuse large B-cell lymphoma\nApproved\nFebruary\n2025\nHodgkin\u2019s lymphoma\nApproved\n March\n2018\nApproved\n June\n2025\nPaxlovid (nirmatrelvir; ritonavir)\n(f)\nCOVID-19 infection in high-risk children\nApproved\nNovember\n2025\nFiled\nApril\n2025\nvepdegestrant (PF-07850327)\n(g)\nBreast cancer metastatic - 2nd line ER+/HER2- ESR1mu\nFiled\nAugust\n2025\nTukysa (tucatinib)\nTreatment of adult patients with advanced or metastatic HER2+ breast cancer\nApproved\nApril\n2020\nApproved\nApril\n2020\nApproved\nFebruary\n2026\nIbrance (palbociclib)\n(h)\nER+/HER2+ metastatic breast cancer\nFiled\nNovember 2025\nFiled\nDecember\n2025\nFiled\nNovember\n2025\nPadcev\n(enfortumab vedotin-ejfv)\n(i)\nCombination with pembrolizumab as perioperative treatment of adult patients with cisplatin ineligible muscle invasive bladder cancer (MIBC)\nApproved\n November 2025\nFiled\nNovember\n2025\nFiled\nJanuary\n2026\n^\u00a0\u00a0\u00a0\u00a0 For the U.S., the filing date is the date on which the FDA accepted our submission. For the EU, the filing date is the date on which the EMA validated our submission.\n(a)\nErbitux\n\u00ae\n is a registered trademark of ImClone LLC. We have exclusive rights to Braftovi in the U.S., Canada and certain emerging markets. Pierre Fabre has exclusive rights to commercialize Braftovi in Europe and Ono has exclusive rights to commercialize Braftovi in Japan. The December 2024 U.S. approval date reflects accelerated approval. The U.S. accelerated approval was converted to a regular approval for Braftovi in combination with cetuximab and fluorouracil-based chemotherapy in February 2026.\n(b)\nEmblaveo is being developed in collaboration with AbbVie. AbbVie has the exclusive commercialization rights in the U.S. and Canada; Pfizer leads the joint development program and has commercialization rights in all other countries.\n(c)\nTivdak is commercialized in collaboration with Genmab A/S.\n(d)\nComirnaty is being developed and commercialized with BioNTech. On August 27, 2025, the FDA approved the 2025-2026 formulation (i) for individuals 65 years of age and older and (ii) for individuals aged 5 to 64 years of age with at least one underlying condition that puts them at high risk for severe COVID-19. Effective as of the same date, outstanding EUAs for the COVID-19 vaccine were revoked, including those for individuals 6 months through 4 years of age.\n(e)\nAdcetris is being developed and commercialized in collaboration with Takeda. Pfizer has commercialization rights for Adcetris in the U.S. and its territories and in Canada. Takeda has commercialization rights in the rest of the world.\n(f)\nPfizer withdrew the U.S. filing for the Paxlovid pediatric supplement in January 2026.\n(g)\nVepdegestrant is being developed in collaboration with Arvinas. In September 2025, Arvinas and Pfizer jointly agreed to out-license the commercialization rights to vepdegestrant to a third party. Together, the companies have begun seeking a partner with the capabilities and expertise to maximize the commercial potential of\nPfizer Inc.\n2025 Form 10-K\n42\nvepdegestrant, if approved, for patients with ESR1-mutant, ER+/HER2- advanced or metastatic breast cancer and potentially develop vepdegestrant in new settings.\n(h)\nIbrance for ER+/HER2+ metastatic breast cancer is being developed in collaboration with Alliance Foundation Trials, LLC.\n(i)\nPadcev is being jointly developed and commercialized with Astellas in the U.S. Outside the U.S., we have commercialization rights in all countries in North and South America, and Astellas has commercialization rights in the rest of the world.\nThe following provides information about additional indications and new drug candidates in late-stage development:\nPRODUCT/CANDIDATE\nPROPOSED DISEASE AREA\nLATE-STAGE CLINICAL PROGRAMS FOR ADDITIONAL USES AND DOSAGE FORMS\nFOR IN-LINE AND IN-REGISTRATION PRODUCTS\nTalzenna (talazoparib)\nCombination with Xtandi (enzalutamide) for DNA Damage Repair-deficient mCSPC\nLitfulo (ritlecitinib)\nVitiligo\nElrexfio (elranatamab)\nMultiple myeloma double-class exposed\nNewly diagnosed multiple myeloma post-transplant maintenance\nNewly diagnosed multiple myeloma transplant-ineligible\n2nd line+ relapsed refractory multiple myeloma\nPadcev (enfortumab vedotin-ejfv)\n(a)\nCisplatin-eligible muscle-invasive bladder cancer\nTukysa (tucatinib)\n(b)\nHER2+ adjuvant breast cancer\n1st line HER2+ maintenance metastatic breast cancer\n1st line HER2+ metastatic colorectal cancer\nNurtec (rimegepant)\nMenstrually-related migraine\nNEW DRUG CANDIDATES IN LATE-STAGE DEVELOPMENT\nVLA15 (PF-07307405) vaccine\n(c)\nImmunization to prevent Lyme disease\ndazukibart (PF-06823859)\nDermatomyositis, polymyositis\ndisitamab vedotin\n(d)\n1st line HER2 (\u2265IHC1+) metastatic urothelial cancer\nsigvotatug vedotin (PF-08046047)\n2nd line+ metastatic NSCLC\n1st line metastatic NSCLC (tumor proportion score high)\nosivelotor (PF-07940367)\nSCD\nibuzatrelvir (PF-07817883)\nCOVID-19 infection\nmevrometostat (PF-06821497) + enzalutamide\n1st line/2nd line metastatic castration resistant prostate cancer post-Abiraterone\n1st line metastatic castration resistant prostate cancer neoadjuvant hormonal therapy na\u00efve\n1st line metastatic castration sensitive prostate cancer neoadjuvant hormonal therapy na\u00efve\natirmociclib (PF-07220060)\n1st line HR+/HER2- metastatic breast cancer\nPF-08046054\n2nd line+ NSCLC\nprifetrastat (PF-07248144)\n2nd line/3rd line HR+/HER2- metastatic breast cancer\nMET-097i (PF-08653944)\nChronic weight management\nPF-08634404\n1st line metastatic colorectal cancer\n1st line NSCLC (squamous)\n1st line NSCLC (non-squamous)\nPF-07831694 vaccine\nImmunization to prevent\n Clostridioides difficile\n (\nC. difficile\n) - updated formulation\nPF-06760805 vaccine\nImmunization to prevent invasive group B streptococcus infection (maternal)\nsasanlimab (PF-06801591)\n(e)\nCombination with Bacillus Calmette-Guerin for high-risk non-muscle invasive bladder cancer\n(a)\nPadcev is being jointly developed and commercialized with Astellas in the U.S. Outside the U.S., we have commercialization rights in all countries in North and South America, and Astellas has commercialization rights in the rest of the world.\n(b)\nTukysa for 2nd line/3rd line HER2+ metastatic breast cancer row has been removed from the table above.\n(c)\nVLA15 is being developed in collaboration with Valneva SE.\n(d)\nDisitamab vedotin is being developed in collaboration with RemeGen Co., Ltd.\n(e)\nPfizer withdrew the sasanlimab filing for patients with high-risk non-muscle invasive bladder cancer in the U.S. in December 2025 and in the EU in February 2026 to allow more time for additional data collection and analyses.\nIn September 2024, Pfizer announced a voluntary withdrawal of all lots of Oxbryta (voxelotor) for the treatment of SCD in all markets where it was approved. Pfizer also discontinued all active voxelotor clinical trials and expanded access programs worldwide. Pfizer\u2019s decision was based on the totality of clinical data available at that time that indicated the overall benefit of Oxbryta no longer outweighed the risk in the approved sickle cell patient population. The data suggested an imbalance in vaso-occlusive crises and fatal events, which required further assessment. Pfizer notified regulatory authorities about these findings and its decision to voluntarily withdraw Oxbryta from the market and discontinue distribution and clinical studies while further reviewing the available data and investigating the findings. In July 2024, the EMA initiated a referral procedure under Article 20 of EC Regulation No 726/2004 for Oxbryta to review the product\u2019s benefits and risks. In October 2024, the EC suspended the Oxbryta marketing authorization while the EMA\u2019s review of data was ongoing. In addition, the FDA initiated an evaluation of newly identified safety signals. The FDA also placed the Oxbryta investigational new drug application on clinical hold following Pfizer\u2019s market withdrawal.\nFollowing comprehensive review and analysis of the final data, Pfizer submitted updated data and risk management proposals to the EMA, FDA and other regulators. In the EU, the EMA\u2019s referral procedure concluded in October 2025, with the EMA adopting a negative opinion on benefit-risk for Oxbryta for the treatment of hemolytic anemia due to SCD, recommending that the marketing authorization for the product remain suspended. In the U.S., Pfizer\u2019s engagement with the FDA is ongoing.\nIn December 2024, the FDA issued a partial clinical hold for osivelotor, which prohibited Pfizer from enrolling new participants into osivelotor clinical studies. In 2025, the FDA concluded that initiation of osivelotor studies and enrollment may proceed outside of sub-Saharan Africa and for participants who have not relocated from sub-Saharan Africa. Enrollment of new participants is expected to begin in the first quarter of 2026.\nPfizer Inc.\n2025 Form 10-K\n43\nFor additional information about our R&D organization, see\nNote 17\n and the\nItem 1. Business\n\u2014\nResearch and Development\n section. For additional information regarding certain collaboration arrangements, see the\nItem 1. Business\n\u2014\nCollaboration and Co-Promotion Agreements\n\nsection.\nNON-GAAP FINANCIAL MEASURE: ADJUSTED INCOME\nAdjusted income is an alternative measure of performance used by management to evaluate our overall performance as a supplement to our GAAP Reported performance measures. As such, we believe that investors\u2019 understanding of our performance is enhanced by disclosing this measure. We use Adjusted income, certain components of Adjusted income and Adjusted diluted EPS to present the results of our major operations\u2013\u2013the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide\u2013\u2013prior to considering certain income statement elements as follows:\nMeasure\nDefinition\nRelevance of Metrics to Our Business Performance\nAdjusted income\nNet income attributable to Pfizer Inc. common shareholders\n(a)\nbefore the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items\n\u2022\nProvides investors useful information to:\n\u25e6\nevaluate the normal recurring operational activities, and their components, on a comparable year-over-year basis\n\u25e6\nassist in modeling expected future performance on a normalized basis\n\u2022\nProvides investors insight into the way we manage our budgeting and forecasting, how we evaluate and manage our recurring operations and how we reward and compensate our senior management\n(b)\nAdjusted cost of sales, Adjusted selling, informational and administrative expenses, Adjusted research and development expenses and Adjusted other (income)/deductions\n\u2013\u2013\nnet\nCost of sales, Selling, informational and administrative expenses, Research and development expenses\n and\n Other (income)/deductions\u2013\u2013net\n (a)\n, each before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items, which are components of the Adjusted income measure\nAdjusted diluted EPS\nEPS attributable to Pfizer Inc. common shareholders\u2013\u2013diluted\n(a)\n before the impact of amortization of intangible assets, certain acquisition-related items, discontinued operations and certain significant items\n(a)\nMost directly comparable GAAP measure.\n(b)\nThe short-term incentive plans for substantially all non-sales-force employees worldwide are funded from a pool based on our performance, measured in significant part versus three budgeted financial metrics, as well as performance against certain of our non-financial pipeline metrics, and may be further modified by our Compensation Committee\u2019s assessment of other factors. One of the three financial metrics, beginning with the 2025\n\nperformance year, is Adjusted income (as defined for annual incentive compensation purposes), which accounts for 40% of the bonus pool funding tied to financial performance. Any expenses for acquired IPR&D are included in our non-GAAP Adjusted results but we exclude certain of these expenses for our financial results for annual incentive compensation purposes. Additionally, beginning with the 2025 performance year, the payout for performance share awards is determined in part by Adjusted diluted EPS, which is derived from Adjusted income.\nAdjusted income and its components and Adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by GAAP and, therefore, are limited in their usefulness to investors. Because of their non-standardized definitions, they may not be comparable to the calculation of similar measures of other companies and are presented to permit investors to more fully understand how management assesses performance. A limitation of these measures is that they provide a view of our operations without including all events during a period, and do not provide a comparable view of our performance to peers. These measures are not, and should not be viewed as, substitutes for their most directly comparable GAAP measures of\n Net income attributable to Pfizer Inc. common shareholders\n, components of\nNet income attributable to Pfizer Inc. common shareholders\n and\nEPS attributable to Pfizer Inc. common shareholders\u2014diluted\n, respectively.\nWe also recognize that, as internal measures of performance, these measures have limitations, and we do not restrict our performance-management process solely to these measures. We also use other tools designed to achieve the highest levels of performance. For example, our R&D organization has productivity targets, upon which its effectiveness is measured. In addition, total shareholder return, both on an absolute basis and relative to a publicly traded pharmaceutical index, plays a significant role in determining payouts under certain of our incentive compensation plans.\nAdjusted Income and Adjusted Diluted EPS\nAmortization of Intangible Assets\n\u2014Adjusted income excludes all amortization of intangible assets.\nAcquisition-Related Items\n\u2013\u2013\nAdjusted income excludes certain acquisition-related items, which are composed of transaction, integration, restructuring charges and additional depreciation costs for business combinations because these costs are unique to each transaction and represent costs that were incurred to restructure and integrate businesses as a result of an acquisition. We have made no adjustments for resulting synergies.\nThe significant costs incurred in connection with a business combination result primarily from the need to eliminate duplicate assets, activities or employees\u2013\u2013a natural result of acquiring a fully integrated set of activities. For this reason, we believe that such costs incurred can be viewed differently in the context of an acquisition from those costs incurred in other, more normal, business contexts. The integration and restructuring costs for a business combination may occur over several years, with the more significant impacts typically ending within three years of the relevant transaction. Because of the need for certain external approvals for some actions, the span of time needed to achieve certain restructuring and integration activities can be lengthy.\nAcquisition-related items may include purchase accounting impacts such as the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value, depreciation related to the increase/decrease in fair value of acquired fixed assets, amortization related to the increase in fair value of acquired debt, and the fair value changes for contingent consideration.\nPfizer Inc.\n2025 Form 10-K\n44\nDiscontinued Operations\n\u2013\u2013\nAdjusted income excludes the results of discontinued operations, as well as any related gains or losses on the disposal of such operations. We believe that this presentation is meaningful to investors because, while we review our product portfolio for strategic fit with our operations, we do not build or run our business with the intent to discontinue parts of our business. Restatements due to discontinued operations do not impact compensation or change the Adjusted income measure for the compensation in respect of the restated periods, but are presented for consistency across all periods.\nCertain Significant Items\n\u2013\u2013\nAdjusted income excludes certain significant items representing substantive and/or unusual items that are evaluated individually on a quantitative and qualitative basis. Certain significant items may be highly variable and difficult to predict. Furthermore, in some cases it is reasonably possible that they could reoccur in future periods. For example, although major non-acquisition-related cost-reduction programs are specific to an event or goal with a defined term, we may have subsequent programs based on reorganizations of the business, cost productivity or in response to generic or biosimilar entry or economic conditions. Legal charges to resolve litigation are also related to specific cases, which are facts and circumstances specific and, in some cases, may also be the result of litigation matters at acquired companies that were inestimable, not probable or unresolved at the date of acquisition, or legal matters generally related to divested products or businesses. Gains and losses on equity securities and pension and postretirement actuarial remeasurement gains and losses have a very high degree of inherent market volatility, which we do not control and cannot predict with any level of certainty, and we do not believe including these gains and losses assists investors in understanding our business or is reflective of our core operations and business. Unusual items represent items that are not part of our ongoing business; items that, either as a result of their nature or size, we would not expect to occur as part of our normal business on a regular basis; items that would be non-recurring; or items that relate to products we no longer sell. See the\nReconciliations of GAAP Reported to Non-GAAP Adjusted Information\u2013\u2013Certain Line Items\nbelow for a non-inclusive list of certain significant items.\nReconciliations of GAAP Reported to Non-GAAP Adjusted Information\u2013\u2013Certain Line Items\nYear Ended December 31, 2025\nData presented will not (in all cases) aggregate to totals.\nMILLIONS, EXCEPT PER SHARE DATA\nCost of sales\n(a)\nSelling, informational and administrative expenses\n(a)\nOther (income)/deductions\u2013\u2013net\n(a)\nNet income attributable to Pfizer Inc. common shareholders\n(a), (b), (c)\nEarnings per common share attributable to Pfizer Inc. common shareholders\u2013\u2013diluted\nGAAP Reported\n$\n16,067\n\n$\n13,794\n\n$\n6,724\n\n$\n7,771\n\n$\n1.36\n\nAmortization of intangible assets\n\u2014\n\u2014\n\u2014\n4,874\nAcquisition-related items\n(708)\n(4)\n(61)\n1,285\nDiscontinued operations\n\u2014\n\u2014\n\u2014\n(25)\nCertain significant items:\nRestructuring charges/(credits), inventory write-offs, implementation costs and additional depreciation\u2014asset restructuring\n(d)\n(187)\n(116)\n\u2014\n1,554\nCertain asset impairments\n(e)\n\u2014\n\u2014\n(4,940)\n4,940\n(Gains)/losses on equity securities\n\u2014\n\u2014\n(67)\n67\nActuarial valuation and other pension and postretirement plan (gains)/losses\n\u2014\n\u2014\n320\n(320)\nOther\n(32)\n(32)\n(1,150)\n(f)\n1,223\nIncome tax provision\u2014non-GAAP items\n(2,962)\nNon-GAAP Adjusted\n$\n15,141\n$\n13,642\n$\n827\n$\n18,406\n$\n3.22\nPfizer Inc.\n2025 Form 10-K\n45\nYear Ended December 31, 2024\nData presented will not (in all cases) aggregate to totals.\nMILLIONS, EXCEPT PER SHARE DATA\nCost of sales\n(a)\nSelling, informational and administrative expenses\n(a)\nOther (income)/deductions\u2013\u2013net\n(a)\nNet income attributable to Pfizer Inc. common shareholders\n(a), (b), (c)\nEarnings per common share attributable to Pfizer Inc. common shareholders\u2013\u2013diluted\nGAAP Reported\n$\n17,851\n\n$\n14,730\n\n$\n4,388\n\n$\n8,031\n\n$\n1.41\n\nAmortization of intangible assets\n\u2014\n\u2014\n\u2014\n5,286\nAcquisition-related items\n(1,341)\n(10)\n(45)\n1,938\nDiscontinued operations\n\u2014\n\u2014\n\u2014\n(14)\nCertain significant items:\nRestructuring charges/(credits) and implementation costs and additional depreciation\u2014asset restructuring\n(d)\n(134)\n(90)\n\u2014\n2,213\nCertain asset impairments\n(e)\n\u2014\n\u2014\n(3,295)\n3,295\n(Gains)/losses on equity securities\n(e)\n\u2014\n\u2014\n1,008\n(1,008)\nActuarial valuation and other pension and postretirement plan (gains)/losses\n\u2014\n\u2014\n(579)\n579\nOther\n44\n(13)\n(445)\n(f)\n430\nIncome tax provision\u2014non-GAAP items\n(3,035)\nNon-GAAP Adjusted\n$\n16,420\n$\n14,617\n$\n1,031\n$\n17,716\n$\n3.11\nYear Ended December 31, 2023\nData presented will not (in all cases) aggregate to totals.\nMILLIONS, EXCEPT PER SHARE DATA\nCost of sales\n(a)\nSelling, informational and administrative expenses\n(a)\nOther (income)/deductions\u2013\u2013net\n(a)\nNet income attributable to Pfizer Inc. common shareholders\n(a), (b), (c)\nEarnings per common share attributable to Pfizer Inc. common shareholders\u2013\u2013diluted\nGAAP Reported\n$\n24,954\n\n$\n14,771\n\n$\n222\n\n$\n2,119\n\n$\n0.37\n\nAmortization of intangible assets\n\u2014\n\u2014\n\u2014\n4,733\nAcquisition-related items\n(629)\n(11)\n(28)\n1,874\nDiscontinued operations\n\u2014\n\u2014\n\u2014\n(11)\nCertain significant items:\nRestructuring charges/(credits) and implementation costs and additional depreciation\u2014asset restructuring\n(d)\n(98)\n(290)\n\u2014\n2,227\nCertain asset impairments\n(e)\n\u2014\n\u2014\n(3,024)\n3,024\n(Gains)/losses on equity securities\n(e)\n\u2014\n\u2014\n1,588\n(1,588)\nActuarial valuation and other pension and postretirement plan (gains)/losses\n\u2014\n\u2014\n265\n(265)\nOther\n(238)\n(g)\n(24)\n(246)\n(f)\n518\nIncome tax provision\u2014non-GAAP items\n(2,131)\nNon-GAAP Adjusted\n$\n23,988\n$\n14,446\n$\n(1,224)\n$\n10,501\n$\n1.84\n(a)\nItems that reconcile GAAP Reported to non-GAAP Adjusted balances are shown pre-tax. Our effective tax rates for GAAP Reported income from continuing operations were: (3.5)% in 2025, (0.4)% in 2024 and (105.4)% in 2023. See\nNote 5\n. Our effective tax rates for non-GAAP Adjusted income were: 12.7% in 2025, 14.5% in 2024 and 9.0% in 2023.\n(b)\nIncludes reconciling amounts for\nResearch and development expenses\n that are not material to our non-GAAP consolidated results of operations.\n(c)\nFor 2025, the total acquisition-related items of $1.3\u00a0billion include reconciling amounts for\nRestructuring charges and certain acquisition-related costs\nof $488\u00a0million, mainly composed of $340\u00a0million of integration costs and other charges. For 2024, the total acquisition-related items of $1.9\u00a0billion included reconciling amounts for\nRestructuring charges and certain acquisition-related costs\nof $514\u00a0million\n,\n mainly composed of $427\u00a0million of integration costs and other charges. For 2023, the total acquisition-related items of $1.9\u00a0billion included reconciling amounts for\nRestructuring charges and certain acquisition-related costs\nof $1.2\u00a0billion\n,\n mainly composed of $785\u00a0million of integration costs and other charges, $190\u00a0million of transaction costs and $125\u00a0million of employee termination-related charges. See\nNote 3\n.\n(d)\nIncludes employee termination costs, asset impairments and other exit costs related to our cost-reduction and productivity initiatives not associated with acquisitions. See\nNote 3\n.\n(e)\nSee\nNote 4\n.\n(f)\nFor 2025, the total adjustment of $1.1\u00a0billion primarily includes charges of $1.1\u00a0billion for certain legal matters, primarily representing certain product liability and other legal expenses related to products discontinued and/or divested by Pfizer. For 2024, the total adjustment of $445\u00a0million included (i) net gains of $825\u00a0million on the partial sales of our previous investment in Haleon in March and October 2024, which are comprised of (a) total gains on the sales of $945\u00a0million less (b) $120\u00a0million recognized in our adjusted income in the fourth quarter representing our pro-rata share of Haleon\u2019s third quarter 2024 adjusted income recorded on a one quarter lag and implicitly included in the gain on the sale of those shares, (ii) charges of $567 million for certain legal matters, primarily representing certain product liability expenses related to products discontinued and/or divested by Pfizer, (iii) a charge of $420 million related to the expected sale of one of our facilities resulting from the discontinuation of our DMD program and (iv) charges of $312 million mostly related to (a) our equity-method accounting pro-rata share of intangible asset amortization, impairments and restructuring costs recorded by Haleon, as well as (b) adjustments to our equity-method basis differences and (c)\nPfizer Inc.\n2025 Form 10-K\n46\nPfizer\u2019s share of investee capital transactions recognized by Haleon. For 2023, the total adjustments of $246 million included charges of (i) $474\u00a0million for certain legal matters, primarily representing certain product liability and other legal expenses related to products discontinued and/or divested by Pfizer, and to a lesser extent, legal obligations related to pre-acquisition matters and (ii) $127\u00a0million mostly related to our equity-method accounting pro-rata share of intangible asset amortization and impairments, costs of separating from GSK and restructuring costs recorded by Haleon, partially offset by: (i) a $222\u00a0million gain on the divestiture of our early-stage rare disease gene therapy portfolio to Alexion and (ii) dividend income of $211\u00a0million from our investment in Nimbus resulting from Takeda\u2019s acquisition of Nimbus\u2019s oral, selective allosteric tyrosine kinase 2 (TYK2) inhibitor program subsidiary.\n(g)\nFor 2023, the total adjustment of $238\u00a0million mainly included $286\u00a0million in inventory losses, overhead costs related to the period in which the facility could not operate, and incremental costs resulting from tornado damage to our manufacturing facility in Rocky Mount, NC, partially offset by insurance recoveries.\nANALYSIS OF THE CONSOLIDATED STATEMENTS OF CASH FLOWS\n\nYear Ended December\u00a031,\n(MILLIONS)\n2025\n2024\n2023\nDrivers of change 2025 v. 2024\nCash provided by/(used in):\nOperating activities\n$\n11,704\n\n$\n12,744\n$\n8,700\nThe change was driven mainly by the timing of receipts and payments in the ordinary course of business, partially offset by a decrease in net income, which includes a $1.35 billion cash outflow in connection with the in-license arrangement with 3SBio, adjusted for non-cash items.\nInvesting activities\n$\n(1,351)\n$\n2,652\n$\n(32,278)\nThe change was driven mainly by $6.9 billion cash paid for the acquisition of Metsera, net of cash acquired, and $0.7 billion lower proceeds from the remaining sale of our investment in Haleon in 2025 compared with the portion sold in 2024, partially offset by a $3.8 billion increase in net proceeds from short-term investments.\nFinancing activities\n$\n(10,304)\n$\n(17,140)\n$\n26,066\nThe change was driven mainly by $9.7 billion proceeds received from the issuance of long-term debt and a $1.9 billion decrease in net repayments of short term borrowings, partially offset by a $4.5 billion increase in repayments of long-term debt.\nANALYSIS OF FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES AND MARKET RISK\nWe believe that with our ongoing operating cash flows, together with our financial assets, access to capital markets, revolving credit agreement, and available lines of credit, we have and will maintain the ability to meet our liquidity needs to support ongoing operations, our capital allocation objectives, and our contractual and other obligations for the foreseeable future.\nWe focus efforts to optimize operating cash flows through achieving working capital efficiencies that target accounts receivable, inventories, accounts payable, and other working capital. Excess cash from operating cash flows is invested in money market funds and available-for-sale debt securities which consist of primarily high-quality, highly liquid, well-diversified debt securities. We have taken, and will continue to take, a conservative approach to our financial investments and monitoring of our liquidity position in response to market changes. We typically maintain cash and cash equivalent balances and short-term investments which, together with our available revolving credit facilities, are in excess of our commercial paper and other short-term borrowings.\nAdditionally, we may obtain funding through short-term or long-term sources from our access to the capital markets, banking relationships and relationships with other financial intermediaries to meet our liquidity needs.\nDiverse sources of funds:\nRelated disclosure presented in this Form 10-K\nInternal sources:\n\u2022\nOperating cash flows\nConsolidated Statements of Cash Flows \u2013 Operating Activities\n\nand\n\nthe\n\nAnalysis of the Consolidated Statements of Cash Flows\n\nsection\n\nwithin MD&A\n\u2022\nCash and cash equivalents\nConsolidated Balance Sheets\n\u2022\nMoney market funds\nNote 7A\n\u2022\nAvailable-for-sale debt securities\nNote 7A\n,\n7B\n\u2022\nEquity investments\nNote 7A\n,\n7B\nExternal sources:\nShort-term funding:\n\u2022\nCommercial paper\nNote 7C\n\u2022\nRevolving credit facilities\nNote 7C\n\u2022\nLines of credit\nNote 7C\nLong-term funding:\n\u2022\nLong-term debt\nNote 7D\n\u2022\nEquity\nConsolidated Statements of Equity\n\nand\n\nNote 12\nFor additional information about the sources and uses of our funds and capital resources, see the\nAnalysis of the Consolidated Statements of Cash Flows\n section within MD&A.\nCredit Ratings\n\u2013\u2013The cost and availability of financing are influenced by credit ratings, and an increase or decrease in our credit rating could have a beneficial or adverse effect on financing. Our long-term debt is rated high-quality by both S&P and Moody\u2019s.\nPfizer Inc.\n2025 Form 10-K\n47\nAs of the date of the filing of this Form 10-K, the following ratings have been assigned to our commercial paper and senior unsecured long-term debt:\nNAME OF RATING AGENCY\nPfizer Short-Term Rating\nPfizer Long-Term Rating\nOutlook/Watch\nMoody\u2019s\nP-1\nA2\nStable Outlook\nS&P\nA-1\nA\nStable Outlook\nThese ratings are not recommendations to buy, sell or hold securities and the ratings are subject to revision or withdrawal at any time by the rating organizations. Each rating should be evaluated independently of any other rating.\nCapital Allocation Framework\n\u2013\u2013Our capital allocation framework is designed to enhance long-term shareholder value and is based on three core pillars: maintaining and, over the long term, growing our dividend, reinvesting in the business and the potential to make share repurchases after de-levering our balance sheet. Over time, we expect to continue to de-lever in a prudent manner in order to maintain a balanced capital allocation strategy. See the\nOverview of Our Performance, Operating Environment, Strategy and Outlook\n\u2014\nO\nur Business and Strategy\n section within MD&A.\nDividends\n\u2014Our current and projected dividends provide a return to shareholders while maintaining sufficient capital to invest in growing our business. Our dividends are not restricted by debt covenants. While the dividend level remains a decision of Pfizer\u2019s BOD and will continue to be evaluated in the context of future business performance, we currently believe that we can maintain and, over the long term, grow our dividend, barring significant unforeseen events. On December\u00a012, 2025, our BOD declared a first-quarter dividend of $0.43 per share, payable on March\u00a06, 2026, to shareholders of record at the close of business on January\u00a023, 2026. The first-quarter 2026 cash dividend will be our 349th consecutive quarterly dividend.\nCommon Stock Purchases\n\u2014As of December 31, 2025, our remaining share-purchase authorization was $3.3 billion with no repurchases in 2025. See\nNote 12\n.\nSales of Investments\n\u2014After our sales of a portion of our Haleon shares in March and October 2024, we owned approximately 15% of the outstanding voting shares of Haleon as of December 31, 2024. See\nNote 2C\n.\nWith the reduction in our Haleon ownership percentage and board representation after the October 2024 sale, we discontinued the application of the equity method to our Haleon investment, and in the fourth quarter of 2024 began to account for the investment as an equity security with a readily determinable fair value, which was carried at fair value at December 31, 2024, with changes in fair value reported in\nOther (income)/deductions\u2013\u2013net.\nIn the first quarter of 2025, we sold the remaining portion of our investment in Haleon for $6.3 billion. In January 2026, we announced an agreement to sell our investment in ViiV for $1.9 billion,  subject to certain regulatory clearances in relevant markets. The proceeds from both of these sales are being used, and will be used respectively, to support capital allocation priorities.\nOff-Balance Sheet Arrangements, Contractual, and Other Obligations\n\u2013\u2013In the ordinary course of business, (i) we enter into off-balance sheet arrangements that may result in contractual and other obligations and (ii) in connection with the sale of assets and businesses and other transactions, we often indemnify our counterparties against certain liabilities that may arise in connection with the transaction or that are related to events and activities. For more information on guarantees and indemnifications, see\nNote 16B\n.\nAdditionally, certain of our co-promotion or license agreements give our licensors or partners the rights to negotiate for, or in some cases to obtain under certain financial conditions, co-promotion or other rights in specified countries with respect to certain of our products. Furthermore, collaboration, licensing or other R&D arrangements may give rise to potential milestone payments. In addition, we may be required to make contingent consideration payments for certain prior business combinations that are contingent on future events or outcomes (see\nNote 16D\n). Payments under these agreements generally become due and payable only upon the achievement of certain development, regulatory and/or commercialization milestones, which may span several years and which may never occur.\nOur significant contractual and other obligations as of December 31, 2025 consisted of:\n\u2022\nLong-term debt, including current portion (see\nNote 7D\n) and related interest payments;\n\u2022\nEstimated cash payment\ns\n related to the TCJA repatriation estimated tax liability (see\nNote 5\n). The eighth and final estimated future payment related to the TCJA repatriation tax liability totaling $2.6 billion is due April 15, 2026 and is reported in current\nIncome taxes payable\n as of December 31, 2025. Our obligations may vary due to the availability of attributes such as foreign tax and other credit carryforwards or carrybacks;\n\u2022\nCertain commitments totaling $5.0 billion, of which an estimated $1.6 billion is to be paid in the next twelve months, and $3.4 billion in periods thereafter (see\n\nNote 16C\n);\n\u2022\nPurchases of PP&E (see\n\nNote 9\n). In 2026, we expect to spend approximately $2.5 billion on PP&E; and\n\u2022\nFuture minimum rental commitments under non-cancelable operating leases (see\nNote 15\n).\nGlobal Economic Conditions\n\u2013\u2013We have operations in countries that have hyperinflationary economies. The impact to Pfizer is not considered material. See the\nItem 1A. Risk Factors\u2013\u2013Global Operations\n section.\nMarket Risk\n\u2013\u2013We are subject to foreign exchange risk, interest rate risk, and equity price risk. The objective of our financial risk management program is to minimize the impact of foreign exchange rate and interest rate movements on our earnings. We address such exposures through a combination of operational means and financial instruments. For more information on how we manage our foreign exchange and interest rate risks, see\nNotes 1F\n and\n7E\n, as well as the\nItem 1A. Risk Factors\u2014Global Operations\n\nsection for key currencies in which we operate. Our sensitivity analyses of such risks are discussed below.\nForeign Exchange Risk\n\u2014The fair values of our financial instrument holdings are analyzed at year-end to determine their sensitivity to foreign exchange rate changes. In this analysis, holding all other assumptions constant and assuming that a change in one currency\u2019s rate relative to the U.S. dollar would not have any effect on another currency\u2019s rates relative to the U.S. dollar, if the dollar were to move against all other currencies by 10%, as of December 31, 2025, the expected impact on our net income would not be significant.\nInterest Rate Risk\n\u2014The fair values of our financial instrument holdings are analyzed at year-end to determine their sensitivity to interest rate changes. In this analysis, holding all other assumptions constant and assuming a parallel shift in the interest rate curve for all maturities and for\nPfizer Inc.\n2025 Form 10-K\n48\nall instruments, if there were a one hundred basis point change in interest rates as of December 31, 2025, the expected impact on our net income would not be significant.\nEquity Price Risk\n\u2013\u2013We hold long-term investments in equity securities with readily determinable fair values in life science companies as a result of certain business development transactions. While we are holding such securities, we are subject to equity price risk, and this may increase the volatility of our income in future periods due to changes in the fair value of equity investments. From time to time, we will sell such equity securities based on our business considerations, which may include limiting our price risk. Our equity securities with readily determinable fair values are analyzed at year-end to determine their sensitivity to equity price rate changes. In this sensitivity analysis, the expected impact on our net income would not be significant.\nNEW ACCOUNTING STANDARDS\nRecently Adopted Accounting Standards\nSee\nNote 1B\n.\nRecently Issued Accounting Standards, Not Adopted as of December 31, 2025\nStandard/Description\nEffective Date\nEffect on the Financial Statements\nIn November 2024, the FASB issued final guidance which requires disaggregated disclosures of certain categories of expenses that are included in expense line items on the face of the income statement. The disclosures are required on an annual and interim basis. The guidance also requires the total amount of selling expenses to be disclosed and, on an annual basis, the definition of selling expenses. The guidance may be applied on a prospective or a retrospective basis.\n2027 for annual reports and 2028 for interim reports. Early adoption is permitted.\nThis new guidance will result in increased disclosures in the notes to our financial statements.\nIn September 2025, the FASB issued final guidance to modernize the accounting for internal use software costs. The guidance requires entities to start capitalizing eligible costs when (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function intended. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis.\nJanuary 1, 2028, with early adoption permitted.\nWe are assessing the impact but currently do not expect this new guidance to have a material impact on our consolidated financial statements.\nITEM\u00a07A.\nQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK\nThe information required by this Item is incorporated by reference to the discussion in the\nAnalysis of Financial Condition, Liquidity, Capital Resources and Market Risk\n\nsection within MD&A.\nPfizer Inc.\n2025 Form 10-K\n49\nITEM\u00a08.\nFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\nReport of Independent Registered Public Accounting Firm\nTo the Board of Directors and Shareholders\nPfizer Inc.:\nOpinion on the Consolidated Financial Statements\nWe have audited the accompanying consolidated balance sheets of Pfizer Inc. and Subsidiary Companies (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company\u2019s internal control over financial reporting as of December 31, 2025, based on criteria established in\nInternal Control\n-\nIntegrated Framework (2013)\nissued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February\u00a026, 2026 expressed an unqualified opinion on the effectiveness of the Company\u2019s internal control over financial reporting.\nBasis for Opinion\nThese consolidated financial statements are the responsibility of the Company\u2019s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.\nCritical Audit Matters\nThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.\nEvaluation of the U.S. Medicare, Medicaid, and performance-based contract rebates accrual\nAs discussed in\nNote 1G\n to the consolidated financial statements, the Company records estimated deductions for Medicare, Medicaid, and performance-based contract rebates (collectively, U.S. rebates) as a reduction to gross product revenues. The accrual for U.S. rebates is recorded in the same period that the corresponding revenues are recognized. The length of time between when a sale is made and when the U.S. rebate is paid by the Company can be as long as one year, which increases the need for significant management judgment and knowledge of market conditions and practices in estimating the accrual.\nWe identified the evaluation of the U.S. rebates accrual as a critical audit matter because the evaluation of the product-specific experience ratio assumption involved especially challenging auditor judgment. The product-specific experience ratio assumption relates to estimating which of the Company\u2019s revenue transactions will ultimately be subject to a related rebate.\nThe following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company\u2019s U.S. rebates accrual process related to the development of the product-specific experience ratio assumptions. We estimated the U.S. rebates accrual using internal information and historical data and compared the result to the Company\u2019s estimated U.S. rebates accrual. We evaluated the Company\u2019s ability to accurately estimate the accrual for U.S. rebates by comparing historically recorded accruals to the actual amount that was ultimately paid by the Company.\nEvaluation of gross unrecognized tax benefits\nAs discussed in\nNote\ns\n 5D\n and\n1Q\n, the Company\u2019s tax positions are subject to audit by local taxing authorities in each respective tax jurisdiction, and the resolution of such audits may span multiple years. Since tax law is complex and often subject to varied interpretations and judgments, it is uncertain whether some of the Company\u2019s tax positions will be sustained upon audit. As of December 31, 2025, the Company has recorded gross unrecognized tax benefits, excluding associated interest, of $4.7 billion.\nWe identified the evaluation of certain of the Company\u2019s gross unrecognized tax benefits as a critical audit matter because a high degree of audit effort, including specialized skills and knowledge, and complex auditor judgment was required in evaluating the Company\u2019s interpretation of tax law and its estimate of the ultimate resolution of its tax positions.\nThe following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of an internal control over the Company\u2019s liability for unrecognized tax position process related to (1) interpretation of tax law, (2) evaluation of which of the Company\u2019s tax positions may not be sustained upon audit, and (3) estimation and recording of the gross\nPfizer Inc.\n2025 Form 10-K\n50\nReport of Independent Registered Public Accounting Firm\nunrecognized tax benefits. We involved tax and valuation professionals with specialized skills and knowledge who assisted in evaluating the Company\u2019s interpretation of tax laws, including the assessment of transfer pricing practices in accordance with applicable tax laws and regulations. We inspected settlements with applicable taxing authorities, including assessing the expiration of statutes of limitations. We tested the calculation of the liability for uncertain tax positions, including an evaluation of the Company\u2019s assessment of the technical merits of tax positions and estimates of the amount of tax benefits expected to be sustained.\nEvaluation of product liability and other product-related litigation\nAs discussed in\nNotes 1S\n and\n16\n to the consolidated financial statements, the Company is involved in product liability and other product-related litigation, which can include personal injury, consumer fraud, off-label promotion, securities, antitrust and breach of contract claims, among others. Certain of these pending product and other product-related legal proceedings could result in losses that could be substantial. The accrued liability and/or disclosure for the pending product liability and other product-related legal proceedings requires a complex series of judgments by the Company about future events, which involves a number of uncertainties.\nWe identified the evaluation of product liability and other product-related litigation as a critical audit matter. Challenging auditor judgment was required to evaluate the Company\u2019s judgments about future events and uncertainties.\nThe following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company\u2019s product liability and other product-related litigation processes, including controls related to (1) the evaluation of information from external and internal legal counsel, (2) forward-looking expectations, and (3) new legal proceedings, or other legal proceedings not currently reserved or disclosed. We read letters received directly from the Company\u2019s external and internal legal counsel that described the Company\u2019s probable or reasonably possible legal contingency to pending product liability and other product-related legal proceedings. We inspected the Company\u2019s minutes from meetings of the Audit Committee, which included the status of key litigation matters. We evaluated the Company\u2019s ability to estimate its monetary exposure to pending product and other product-related legal proceedings by comparing historically recorded liabilities to actual monetary amounts incurred upon resolution of prior legal matters. We analyzed relevant publicly available information about the Company, its competitors, and the industry.\n\nWe have not been able to determine the specific year that we or our predecessor firms began serving as the Company\u2019s auditor, however, we are aware that we or our predecessor firms have served as the Company\u2019s auditor since at least 1942.\nNew York, New York\nFebruary 26, 2026\nPfizer Inc.\n2025 Form 10-K\n51\nConsolidated Statements of Operations\nPfizer Inc. and Subsidiary Companies\n\nYear Ended December 31,\n(MILLIONS, EXCEPT PER SHARE DATA)\n2025\n2024\n2023\nRevenues:\nProduct revenues\n$\n51,663\n\n$\n53,816\n\n$\n50,914\n\nAlliance revenues\n9,266\n\n8,388\n\n7,582\n\nRoyalty revenues\n1,650\n\n1,423\n\n1,058\n\nTotal revenues\n62,579\n\n63,627\n\n59,553\n\nCosts and expenses:\n\nCost of sales\n(a), (b)\n16,067\n\n17,851\n\n24,954\n\nSelling, informational and administrative expenses\n(a)\n13,794\n\n14,730\n\n14,771\n\nResearch and development expenses\n(a)\n10,437\n\n10,822\n\n10,679\n\nAcquired in-process research and development expenses\n1,613\n\n108\n\n194\n\nAmortization of intangible assets\n4,874\n\n5,286\n\n4,733\n\nRestructuring charges and certain acquisition-related costs\n1,550\n\n2,419\n\n2,943\n\nOther (income)/deductions\u2013\u2013net\n6,724\n\n4,388\n\n222\n\nIncome from continuing operations before provision/(benefit) for taxes on income\n7,520\n\n8,023\n\n1,058\n\nProvision/(benefit) for taxes on income\n(\n266\n)\n(\n28\n)\n(\n1,115\n)\nIncome from continuing operations\n7,787\n\n8,051\n\n2,172\n\nDiscontinued operations\u2013\u2013net of tax\n25\n\n11\n\n(\n15\n)\nNet income before allocation to noncontrolling interests\n7,812\n\n8,062\n\n2,158\n\nLess: Net income attributable to noncontrolling interests\n41\n\n31\n\n39\n\nNet income attributable to Pfizer Inc. common shareholders\n$\n7,771\n\n$\n8,031\n\n$\n2,119\n\nEarnings per common share\u2013\u2013basic\n:\n\nIncome from continuing operations attributable to Pfizer Inc. common shareholders\n$\n1.37\n\n$\n1.42\n\n$\n0.38\n\nDiscontinued operations\u2013\u2013net of tax\n\u2014\n\n\u2014\n\n\u2014\n\nNet income attributable to Pfizer Inc. common shareholders\n$\n1.37\n\n$\n1.42\n\n$\n0.38\n\nEarnings per common share\u2013\u2013diluted\n:\n\nIncome from continuing operations attributable to Pfizer Inc. common shareholders\n$\n1.36\n\n$\n1.41\n\n$\n0.37\n\nDiscontinued operations\u2013\u2013net of tax\n\u2014\n\n\u2014\n\n\u2014\n\nNet income attributable to Pfizer Inc. common shareholders\n$\n1.36\n\n$\n1.41\n\n$\n0.37\n\nWeighted-average shares\u2013\u2013basic\n5,683\n\n5,664\n\n5,643\n\nWeighted-average shares\u2013\u2013diluted\n5,713\n\n5,700\n\n5,709\n\n(a)\nExclusive of amortization of intangible assets.\n(b)\nSee\nNote\n\n17A\n.\nSee Accompanying Notes.\nPfizer Inc.\n2025 Form 10-K\n52\nConsolidated Statements of Comprehensive Income\nPfizer Inc. and Subsidiary Companies\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nNet income before allocation to noncontrolling interests\n$\n7,812\n\n$\n8,062\n\n$\n2,158\n\nForeign currency translation adjustments, net\n(\n181\n)\n32\n\n452\n\nUnrealized holding gains/(losses) on derivative financial instruments, net\n(\n212\n)\n499\n\n626\n\nReclassification adjustments for (gains)/losses included in net income\n(a)\n(\n269\n)\n(\n159\n)\n(\n413\n)\n\n(\n481\n)\n341\n\n213\n\nUnrealized holding gains/(losses) on available-for-sale securities, net\n97\n\n(\n152\n)\n(\n121\n)\nReclassification adjustments for (gains)/losses included in net income\n(b)\n(\n7\n)\n42\n\n(\n141\n)\n89\n\n(\n111\n)\n(\n261\n)\nBenefit plans: prior service (costs)/credits and other, net\n(\n16\n)\n193\n\n(\n25\n)\nReclassification adjustments related to amortization of prior service costs and other, net\n(\n84\n)\n(\n109\n)\n(\n117\n)\nReclassification adjustments related to curtailments of prior service costs and other, net\n(\n52\n)\n\u2014\n\n(\n15\n)\n\n(\n152\n)\n84\n\n(\n157\n)\nOther comprehensive income/(loss), before tax\n(\n725\n)\n347\n\n246\n\nTax provision/(benefit) on other comprehensive income/(loss)\n(\n486\n)\n231\n\n(\n85\n)\nOther comprehensive income/(loss) before allocation to noncontrolling interests\n$\n(\n239\n)\n$\n116\n\n$\n331\n\nComprehensive income/(loss) before allocation to noncontrolling interests\n$\n7,573\n\n$\n8,178\n\n$\n2,488\n\nLess: Comprehensive income/(loss) attributable to noncontrolling interests\n29\n\n28\n\n26\n\nComprehensive income/(loss) attributable to Pfizer Inc.\n$\n7,544\n\n$\n8,149\n\n$\n2,462\n\n(a)\nReclassified into\nOther (income)/deductions\u2014net\nand\nCost of sales\n. See\nNote 7E\n.\n(b)\nReclassified into\nOther (income)/deductions\u2014net\n.\nSee Accompanying Notes.\nPfizer Inc.\n2025 Form 10-K\n53\nConsolidated Balance Sheets\nPfizer Inc. and Subsidiary Companies\nAs of December 31,\n(MILLIONS, EXCEPT PER SHARE DATA)\n2025\n2024\nAssets\nCash and cash equivalents\n$\n1,142\n\n$\n1,043\n\nShort-term investments\n12,454\n\n19,434\n\nTrade accounts receivable, net of allowance for doubtful accounts: 2025\u2014$\n427\n; 2024\u2014$\n438\n11,874\n\n11,463\n\nInventories\n10,654\n\n10,851\n\nCurrent tax assets\n3,967\n\n3,314\n\nOther current assets\n2,808\n\n4,253\n\nTotal current assets\n42,898\n\n50,358\n\nLong-term investments\n1,621\n\n2,228\n\nProperty, plant and equipment, net\n19,317\n\n18,393\n\nIdentifiable intangible assets, net\n53,731\n\n55,411\n\nGoodwill\n71,264\n\n68,527\n\nNoncurrent deferred tax assets and other noncurrent tax assets\n9,699\n\n8,662\n\nOther noncurrent assets\n9,631\n\n9,817\n\nTotal assets\n$\n208,160\n\n$\n213,396\n\nLiabilities and Equity\n\nShort-term borrowings, including current portion of long-term debt: 2025\u2014$\n2,997\n; 2024\u2014$\n3,747\n$\n3,154\n\n$\n6,946\n\nTrade accounts payable\n5,240\n\n5,633\n\nDividends payable\n2,445\n\n2,437\n\nIncome taxes payable\n3,103\n\n2,910\n\nAccrued compensation and related items\n3,610\n\n3,838\n\nDeferred revenues\n784\n\n1,511\n\nOther current liabilities\n18,648\n\n19,720\n\nTotal current liabilities\n36,984\n\n42,995\n\nLong-term debt\n61,641\n\n57,405\n\nPension and postretirement benefit obligations\n2,041\n\n2,115\n\nNoncurrent deferred tax liabilities\n2,401\n\n2,122\n\nOther taxes payable\n3,591\n\n6,112\n\nOther noncurrent liabilities\n14,725\n\n14,150\n\nTotal liabilities\n121,385\n\n124,899\n\nCommitments and Contingencies\nCommon stock, $\n0.05\n par value;\n12,000\n shares authorized; issued: 2025\u2014\n9,621\n; 2024\u2014\n9,593\n481\n\n480\n\nAdditional paid-in capital\n94,469\n\n93,603\n\nTreasury stock, shares at cost: 2025\u2014\n3,935\n; 2024\u2014\n3,926\n(\n115,015\n)\n(\n114,763\n)\nRetained earnings\n114,610\n\n116,725\n\nAccumulated other comprehensive loss\n(\n8,069\n)\n(\n7,842\n)\nTotal Pfizer Inc. shareholders\u2019 equity\n86,476\n\n88,203\n\nEquity attributable to noncontrolling interests\n299\n\n294\n\nTotal equity\n86,775\n\n88,497\n\nTotal liabilities and equity\n$\n208,160\n\n$\n213,396\n\nSee Accompanying Notes.\nPfizer Inc.\n2025 Form 10-K\n54\nConsolidated Statements of Equity\nPfizer Inc. and Subsidiary Companies\n\nPFIZER INC. SHAREHOLDERS\n\nCommon Stock\n\nTreasury Stock\n\n(MILLIONS,\u00a0EXCEPT PER SHARE DATA)\nShares\nPar Value\nAdd\u2019l\nPaid-In\nCapital\nShares\nCost\nRetained Earnings\nAccum.\nOther\nComp. Loss\nShare -\nholders\u2019\nEquity\nNon-controlling Interests\nTotal\nEquity\nBalance, January\u00a01, 2023\n9,519\n\n$\n476\n\n$\n91,802\n\n(\n3,903\n)\n$\n(\n113,969\n)\n$\n125,656\n\n$\n(\n8,304\n)\n$\n95,661\n\n$\n256\n\n$\n95,916\n\nNet income\n2,119\n\n2,119\n\n39\n\n2,158\n\nOther\u00a0comprehensive income/(loss), net of tax\n343\n\n343\n\n(\n12\n)\n331\n\nCash dividends declared, per share: $\n1.65\nCommon stock\n(\n9,316\n)\n(\n9,316\n)\n(\n9,316\n)\nNoncontrolling interests\n\u2014\n(\n8\n)\n(\n8\n)\nShare-based payment transactions\n43\n\n2\n\n829\n\n(\n12\n)\n(\n518\n)\n(\n106\n)\n208\n\n208\n\nOther\n\u2014\n\u2014\n\u2014\n\n\u2014\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nBalance, December 31, 2023\n9,562\n\n478\n\n92,631\n\n(\n3,916\n)\n(\n114,487\n)\n118,353\n\n(\n7,961\n)\n89,014\n\n274\n\n89,288\n\nNet income\n8,031\n\n8,031\n\n31\n\n8,062\n\nOther\u00a0comprehensive income/(loss), net of tax\n118\n\n118\n\n(\n3\n)\n116\n\nCash dividends declared, per share: $\n1.69\nCommon stock\n(\n9,577\n)\n(\n9,577\n)\n(\n9,577\n)\nNoncontrolling interests\n\u2014\n(\n7\n)\n(\n7\n)\nShare-based payment transactions\n31\n\n2\n\n972\n\n(\n10\n)\n(\n276\n)\n(\n107\n)\n591\n\n591\n\nOther\n\u2014\n\u2014\n\u2014\n\n\u2014\n\u2014\n25\n\n25\n\n(\n1\n)\n23\n\nBalance, December 31, 2024\n9,593\n\n480\n\n93,603\n\n(\n3,926\n)\n(\n114,763\n)\n116,725\n\n(\n7,842\n)\n88,203\n\n294\n\n88,497\n\nNet income\n7,771\n\n7,771\n\n41\n\n7,812\n\nOther\u00a0comprehensive income/(loss), net of tax\n(\n227\n)\n(\n227\n)\n(\n12\n)\n(\n239\n)\nCash dividends declared, per share: $\n1.72\nCommon stock\n(\n9,779\n)\n(\n9,779\n)\n(\n9,779\n)\nNoncontrolling interests\n\u2014\n\n(\n30\n)\n(\n30\n)\nShare-based payment transactions\n28\n\n1\n\n866\n\n(\n10\n)\n(\n251\n)\n(\n107\n)\n509\n\n509\n\nOther\n\u2014\n\n\u2014\n\n\u2014\n\n(\n1\n)\n(\n1\n)\n6\n\n6\n\nBalance, December 31, 2025\n9,621\n\n$\n481\n\n$\n94,469\n\n(\n3,935\n)\n$\n(\n115,015\n)\n$\n114,610\n\n$\n(\n8,069\n)\n$\n86,476\n\n$\n299\n\n$\n86,775\n\nSee Accompanying Notes.\nPfizer Inc.\n2025 Form 10-K\n55\nConsolidated Statements of Cash Flows\nPfizer Inc. and Subsidiary Companies\n\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nOperating Activities\n\nNet income before allocation to noncontrolling interests\n$\n7,812\n\n$\n8,062\n\n$\n2,158\n\nDiscontinued operations\u2014net of tax\n25\n\n11\n\n(\n15\n)\nNet income from continuing operations before allocation to noncontrolling interests\n7,787\n\n8,051\n\n2,172\n\nAdjustments to reconcile net income from continuing operations before allocation to noncontrolling interests to net cash provided by/(used in) operating activities:\n\nDepreciation and amortization\n6,592\n\n7,013\n\n6,290\n\nAsset write-offs and impairments\n5,270\n\n4,242\n\n3,408\n\nDeferred taxes\n(\n2,133\n)\n(\n2,102\n)\n(\n3,442\n)\nShare-based compensation expense\n799\n\n877\n\n525\n\nBenefit plan contributions in excess of expense/income\n(\n786\n)\n(\n12\n)\n(\n787\n)\nInventory write-offs and related charges associated with COVID-19 products\n(a)\n\u2014\n\n\u2014\n\n6,199\n\nOther adjustments, net\n(\n470\n)\n(\n2,260\n)\n(\n3,492\n)\nOther changes in assets and liabilities, net of acquisitions and divestitures:\nTrade accounts receivable\n(\n263\n)\n(\n109\n)\n347\n\nInventories\n(a)\n561\n\n(\n854\n)\n(\n1,169\n)\nOther assets\n1,289\n\n3,380\n\n(\n663\n)\nTrade accounts payable\n(\n469\n)\n(\n1,023\n)\n(\n300\n)\nOther liabilities\n(b)\n(\n3,667\n)\n(\n3,115\n)\n595\n\nOther tax accounts, net\n(\n2,805\n)\n(\n1,345\n)\n(\n982\n)\nNet cash provided by/(used in) operating activities\n11,704\n\n12,744\n\n8,700\n\nInvesting Activities\n\nPurchases of property, plant and equipment\n(\n2,629\n)\n(\n2,909\n)\n(\n3,907\n)\nPurchases of short-term investments\n(\n14,356\n)\n(\n10,133\n)\n(\n30,974\n)\nProceeds from redemptions/sales of short-term investments\n17,959\n\n4,128\n\n39,264\n\nNet (purchases of)/proceeds from redemptions/sales of short-term investments with original maturities of three months or less\n(\n2,675\n)\n3,136\n\n5,174\n\nPurchases of long-term investments\n(\n294\n)\n(\n180\n)\n(\n204\n)\nProceeds from redemptions/sales of long-term investments\n1,095\n\n1,570\n\n1,979\n\nProceeds from partial sales of investment in Haleon\n(c)\n6,311\n\n7,040\n\n\u2014\n\nAcquisitions of businesses, net of cash acquired\n(\n6,927\n)\n\u2014\n\n(\n43,430\n)\nOther investing activities, net\n165\n\n2\n\n(\n179\n)\nNet cash provided by/(used in) investing activities\n(\n1,351\n)\n2,652\n\n(\n32,278\n)\nFinancing Activities\n\nProceeds from short-term borrowings\n\u2014\n\n8,907\n\n4,525\n\nPayments on short-term borrowings\n(\n2,199\n)\n(\n11,226\n)\n(\n3\n)\nNet (payments on)/proceeds from short-term borrowings with original maturities of three months or less\n(\n796\n)\n(\n2,590\n)\n3,161\n\nProceeds from issuance of long-term debt\n9,678\n\n\u2014\n\n30,831\n\nPayments on long-term debt\n(\n6,757\n)\n(\n2,250\n)\n(\n2,569\n)\nCash dividends paid\n(\n9,771\n)\n(\n9,512\n)\n(\n9,247\n)\nOther financing activities, net\n(\n458\n)\n(\n469\n)\n(\n631\n)\nNet cash provided by/(used in) financing activities\n(\n10,304\n)\n(\n17,140\n)\n26,066\n\nEffect of exchange-rate changes on cash and cash equivalents and restricted cash and cash equivalents\n41\n\n(\n66\n)\n(\n40\n)\nNet increase/(decrease) in cash and cash equivalents and restricted cash and cash equivalents\n91\n\n(\n1,810\n)\n2,448\n\nCash and cash equivalents and restricted cash and cash equivalents, at beginning of period\n1,107\n\n2,917\n\n468\n\nCash and cash equivalents and restricted cash and cash equivalents, at end of period\n$\n1,197\n\n$\n1,107\n\n$\n2,917\n\n- Continued -\nPfizer Inc.\n2025 Form 10-K\n56\nConsolidated Statements of Cash Flows\nPfizer Inc. and Subsidiary Companies\nYear Ended December 31,\n2025\n2024\n2023\nSupplemental Cash Flow Information\n\nCash paid/(received) during the period for:\nIncome taxes\n$\n4,688\n\n$\n3,605\n\n$\n3,147\n\nInterest paid\n2,739\n\n3,227\n\n2,215\n\nInterest rate hedges\n140\n\n178\n\n134\n\nNon-cash transaction:\nRight-of-use assets obtained in exchange for lease liabilities\n$\n288\n\n$\n283\n\n$\n614\n\n(a)\nSee\nNote\n\n17A\n.\n(b)\nSee\nNote 17C\n.\n(c)\nSee\nNote 2C\n.\nSee Accompanying Notes.\nPfizer Inc.\n2025 Form 10-K\n57\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nNote 1.\nBasis of Presentation and Significant Accounting Policies\nA. Basis of Presentation\nThe consolidated financial statements include the accounts of our parent company and all subsidiaries and are prepared in accordance with U.S. GAAP.\n\nThe decision of whether or not to consolidate an entity for financial reporting purposes requires consideration of majority voting interests, as well as effective economic or other control over the entity. Typically, we do not seek control by means other than voting interests. For subsidiaries operating outside the U.S., the financial information is included as of and for the year ended November 30 for each year presented. Pfizer's fiscal year-end for U.S. subsidiaries is as of and for the year ended December 31 for each year presented. All significant transactions among our subsidiaries have been eliminated.\nWe manage our commercial operations through\nthree\n operating segments, each led by a single manager: Biopharma, PC1 and Pfizer Ignite. Biopharma is the only reportable segment.\n See\nNote 17A\n.\nOn December 14, 2023, we completed the acquisition of Seagen. In addition, other acquisitions and business development activities completed in 2025, 2024 and 2023 impacted financial results in the periods presented. See\nNote 2\n.\nWe have made certain reclassification adjustments to conform prior-period amounts to the current presentation, including in the third quarter of 2025, when we reclassified certain costs for corporate affairs previously reported in Other business activities to Biopharma (see\n\nNote 17A\n).\nCertain amounts in the consolidated financial statements and associated notes may not add due to rounding. All percentages have been calculated using unrounded amounts.\nB\n.\nNew Accounting Standards Adopted in 2025\nIn the fourth quarter of 2025, we\n\nadopted a new accounting standard which requires enhanced disclosures primarily related to existing rate reconciliation and income taxes paid information. The standard was applied prospectively. As this accounting standard only impacts disclosures, the adoption did not impact our consolidated financial statements. See\nNote 5\n.\nIn the third quarter of 2025, we early adopted a new accounting standard, which adds a scope exception to exclude from derivative accounting non-exchange-traded contracts with variables (referred to as \u201cunderlyings\u201d) that are based on operations or activities specific to one of the parties to the contract. This new scope exception may apply to certain R&D funding arrangements. When adopted early in an interim reporting period, application of the standard is required as of the beginning of the current annual reporting period. We had no contracts or embedded features that were accounted for as derivatives but are no longer accounted for as derivatives as a result of applying the new standard. The adoption of this new accounting standard had no impact to our consolidated financial statements.\nC.\nEstimates and Assumptions\nIn preparing these financial statements, we use certain estimates and assumptions that affect reported amounts and disclosures. These estimates and assumptions can impact all elements of our financial statements. For example, in the consolidated statements of operations, estimates are used when accounting for deductions from revenues, determining the cost of inventory that is sold, allocating cost in the form of depreciation and amortization, and estimating restructuring charges and the impact of contingencies, as well as determining provisions for taxes on income. On the consolidated balance sheets, estimates are used in determining the valuation and recoverability of assets, and in determining the reported amounts of liabilities, all of which also impact the consolidated statements of operations. Certain estimates of fair value and amounts recorded in connection with acquisitions, revenue deductions, impairment reviews, restructuring-associated charges, investments and financial instruments, valuation allowances, pension and postretirement benefit plans, contingencies, share-based compensation, and other calculations can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions.\nOur estimates are often based on complex judgments and assumptions that we believe to be reasonable, but that can be inherently uncertain and unpredictable. If our estimates and assumptions are not representative of actual outcomes, our results could be materially impacted. As future events and their effects cannot be determined with precision, our estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. We are subject to risks and uncertainties that may cause actual results to differ from estimated amounts, such as changes in the healthcare environment, competition, litigation, legislation, development of competing assets by us or others, regulatory actions, or product recalls or withdrawals. We regularly evaluate our estimates and assumptions using historical experience and expectations about the future. We adjust our estimates and assumptions when facts and circumstances indicate the need for change.\nD.\nAcquisitions\nOur consolidated financial statements include the operations of acquired businesses after the completion of the acquisitions. We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of acquired IPR&D be recorded on the balance sheet. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. When we acquire net assets that do not constitute a business, as defined in U.S. GAAP, no goodwill is recognized and acquired IPR&D is expensed in\nAcquired in-process research and development expenses\n.\nContingent consideration in a business combination is included as part of the acquisition cost and is recognized at fair value as of the acquisition date. Fair value is generally estimated by using a probability-weighted discounted cash flow approach. See\nNote 16D\n. Any liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. These changes in fair value are recognized in earnings in\nOther (income)/deductions\u2013\u2013net\n.\nPfizer Inc.\n2025 Form 10-K\n58\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nE.\nFair Value\nWe measure certain assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. We estimate fair value using an exit price approach, which requires, among other things, that we determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of non-financial assets and, for liabilities, assuming that the risk of non-performance will be the same before and after the transfer.\nWhen estimating fair value, depending on the nature and complexity of the asset or liability, we may use one or all of the following techniques:\n\u2022\nIncome approach, which is based on the present value of a future stream of net cash flows.\n\u2022\nMarket approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities.\n\u2022\nCost approach, which is based on the cost to acquire or construct comparable assets, less an allowance for functional and/or economic obsolescence.\nOur fair value methodologies depend on the following types of inputs:\n\u2022\nQuoted prices for identical assets or liabilities in active markets (Level 1 inputs).\n\u2022\nQuoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (Level 2 inputs).\n\u2022\nUnobservable inputs that reflect estimates and assumptions (Level 3 inputs).\nThe following inputs and valuation techniques are used to estimate the fair value of our financial assets and liabilities:\n\u2022\nAvailable-for-sale debt securities\u2014third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data and credit-adjusted yield curves.\n\u2022\nEquity securities with readily determinable fair values\u2014quoted market prices and observable NAV prices.\n\u2022\nDerivative assets and liabilities\u2014third-party matrix-pricing model that uses inputs derived from or corroborated by observable market data. Where applicable, these models use market-based observable inputs, including interest rate yield curves to discount future cash flow amounts, and forward and spot prices for currencies. The credit risk impact to our derivative financial instruments was not significant.\n\u2022\nMoney market funds\u2014observable NAV prices.\n\u2022\nContingent consideration liabilities\u2014probability-weighted discounted cash flow model and unobservable inputs, which requires the use of significant judgment or estimates, including projections representative of a market participant\u2019s view of the expected cash payments associated with the agreed upon development and regulatory milestones primarily based on probabilities of technical success, timing of the potential milestone events for the compounds, and estimated discount rates.\nWe periodically review the methodologies, inputs and outputs of third-party pricing services for reasonableness. Our procedures can include, for example, referencing other third-party pricing models, monitoring key observable inputs (like benchmark interest rates) and selectively performing test-comparisons of values with actual sales of financial instruments.\nF.\nForeign Currency Translation\nFor most of our international operations, local currencies have been determined to be the functional currencies. We translate functional currency assets and liabilities to their U.S. dollar equivalents at exchange rates in effect as of the balance sheet date and income and expense amounts at average exchange rates for the period. The U.S. dollar effects that arise from changing translation rates are recorded in\nOther comprehensive income/(loss)\n. The effects of converting non-functional currency monetary assets and liabilities into the functional currency are recorded in\nOther (income)/deductions\u2013\u2013net\n. For operations in highly inflationary economies, we translate monetary items at rates in effect as of the balance sheet date, with translation adjustments recorded in\nOther (income)/deductions\u2013\u2013net\n, and we translate non-monetary items at historical rates.\nG. Revenues and Trade Accounts Receivable\nRevenue Recognition\n\u2013\u2013We record revenues from product sales when there is a transfer of control of the product from us to the customer. We typically determine transfer of control based on when the product is shipped or delivered and title passes to the customer. For certain contracts, the finished product may temporarily be stored at our or our third-party subcontractors\u2019 locations under a bill-and-hold arrangement. Revenue is recognized on bill-and-hold arrangements at the point in time when the customer obtains control of the product and all of the following criteria have been met: the arrangement is substantive; the product is identified separately as belonging to the customer; the product is ready for physical transfer to the customer; and we do not have the ability to use the product or direct it to another customer. In bill-and-hold arrangements which are part of the U.S. SNS, we recognize revenue for the product sale when the product is initially placed into the U.S. SNS and we provide a rotation service to maintain an agreed upon level of shelf life for product in the stockpile. In determining when the customer obtains control of the product, we consider certain indicators, including whether we have a present right to payment from the customer, whether title and/or significant risks and rewards of ownership have transferred to the customer and whether customer acceptance has been received.\nOur Sales Contracts\n\u2013\u2013Sales on credit are typically under short-term contracts. Collections are based on market payment cycles common in various markets, with shorter cycles in the U.S. Sales\n\nare adjusted for sales allowances, chargebacks, rebates and sales returns and cash discounts. Sales returns may occur due to patent-based expirations or loss of regulatory exclusivity, product recalls or a changing competitive environment.\nPfizer Inc.\n2025 Form 10-K\n59\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nDeductions from Revenues\n\u2013\u2013Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. Such variable consideration represents chargebacks, rebates, sales allowances and sales returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment is required when estimating the impact of these product revenue deductions on gross sales for a reporting period.\nProvisions for pharmaceutical sales returns\u2013\u2013\nProvisions are based on a calculation for each market that incorporates the following, as appropriate: local returns policies and practices; historical returns as a percentage of sales; an understanding of the reasons for past returns; estimated shelf life by product; an estimate of the amount of time between shipment and return or lag time; and any other factors that could impact the estimate of future returns, such as patent-based expirations or loss of regulatory exclusivity, product recalls or a changing competitive environment. Generally, returned products are destroyed, and customers are refunded the sales price in the form of a credit.\nWe record sales incentives as a reduction of revenues at the time the related revenues are recorded or when the incentive is offered, whichever is later. We estimate the cost of our sales incentives based on our historical experience with similar incentives programs to predict customer behavior.\nThe following outlines our common sales arrangements:\n\u2022\nCustomers\n\u2013\u2013Our prescription biopharmaceutical products, with the exception of Paxlovid in 2023, are sold principally to wholesalers, but we also sell directly to retailers, hospitals, clinics, government agencies and pharmacies. In 2023, we principally sold Paxlovid globally to government agencies. Our vaccines in the U.S. are primarily sold directly to the federal government (including the CDC), wholesalers, individual provider offices, retail pharmacies and integrated delivery systems. Our vaccines outside the U.S. are primarily sold to government and non-government institutions. Certain products in our portfolio are subject to seasonality of demand and Paxlovid revenues trend with infection rates. Prescription pharmaceutical products that ultimately are used by patients are generally covered under governmental programs, managed care programs and insurance programs, including those managed through PBMs in the U.S; and are subject to sales allowances and/or rebates payable directly to those programs. Those sales allowances and rebates are generally negotiated, but government programs may have legislated amounts by type of product (e.g., patented or unpatented).\nSpecifically:\n\u2022\nIn the U.S., we sell our products principally to distributors and hospitals. We also have contracts with managed care programs or PBMs and legislatively mandated contracts with the federal and state governments under which we provide rebates based on medicines utilized by the lives they cover. We record provisions for Medicare, Medicaid, and performance-based contract pharmaceutical rebates based upon our experience ratio of rebates paid and actual prescriptions written during prior periods. We apply the experience ratio to the respective period\u2019s sales to determine the rebate accrual and related expense. This experience ratio is evaluated regularly to ensure that the historical trends are as current as practicable. We estimate discounts on branded prescription drug sales in prior periods to Medicare Part D participants in the Medicare \u201ccoverage gap,\u201d also known as the \u201cdoughnut hole,\u201d (applicable through 2024) and discounts in the initial coverage and catastrophic phases under the Manufacturer Discount Program (effective January 1, 2025) based on historical beneficiary prescription experience and expected utilization resulting from the applicable discount, whether in the coverage gap or under the Manufacturer Discount Program, respectively. For performance-based contract rebates, we also consider current contract terms, such as changes in formulary status and rebate rates.\n\u2022\nOutside the U.S., the majority of our pharmaceutical sales allowances are contractual or legislatively mandated and our estimates are based on actual invoiced sales within each period, which reduces the risk of variations in the estimation process. In certain European countries, rebates are calculated on the government\u2019s total unbudgeted pharmaceutical spending or on specific product sales thresholds and we apply an estimated allocation factor against our actual invoiced sales to project the expected level of reimbursement. We obtain third-party information that helps us to monitor the adequacy of these accruals.\n\u2022\nProvisions for pharmaceutical chargebacks (primarily reimbursements to U.S. wholesalers for honoring contracted prices and legislated discounts to third parties) closely approximate actual amounts incurred, as we settle these deductions generally within two to five weeks of incurring the liability.\nWe recorded revenues of more than $\n1\n billion for each of 12 products in 2025, for each of 11 products in 2024 and for each of nine products in 2023, and these revenues represented\n65\n%,\n66\n% and\n64\n% of our\nTotal revenues\n in 2025, 2024 and 2023, respectively. See\nNote 17C\n. The loss or expiration of intellectual property rights can have a significant adverse effect on our revenues as our contracts with customers will generally be at lower selling prices and lower volumes due to added generic competition. We generally provide for higher sales returns during the period in which individual markets begin to near the loss or expiration of intellectual property rights.\nOur accruals for Medicare, Medicaid and related state program and performance-based contract rebates, chargebacks, sales allowances and sales returns and cash discounts are as follows:\n\nAs of December 31,\n(MILLIONS)\n2025\n2024\nReserve against\nTrade accounts receivable, less allowance for doubtful accounts\n$\n1,803\n\n$\n1,627\n\nOther current liabilities\n:\nAccrued rebates\n7,909\n\n7,195\n\nOther accruals\n750\n\n972\n\nOther noncurrent liabilities\n1,204\n\n1,029\n\nTotal accrued rebates and other sales-related accruals\n$\n11,666\n\n$\n10,822\n\nTaxes collected from customers relating to product sales and remitted to governmental authorities are excluded from\nProduct revenues\n.\nTrade Accounts Receivable\n\u2014Trade accounts receivable are stated at their net realizable value. The allowance for credit losses reflects our best estimate of expected credit losses of the receivables portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions. In developing the estimate for expected credit losses, trade accounts receivables are segmented into\nPfizer Inc.\n2025 Form 10-K\n60\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\npools of assets depending on market, delinquency status, and customer type (high risk versus low risk and government versus non-government), and reserve percentages are established for each pool of trade accounts receivables.\nIn determining the reserve percentages for each pool of trade accounts receivables, we considered our historical experience with certain customers and customer types, regulatory and legal environments, country and political risk, and other relevant current and future forecasted macroeconomic factors. These credit risk indicators are monitored on a quarterly basis to determine whether there have been any changes in the economic environment that would indicate the established reserve percentages should be adjusted, and are considered on a regional basis to reflect more geographic-specific metrics. Additionally, write-offs and recoveries of customer receivables are tracked against collections on a quarterly basis to determine whether the reserve percentages remain appropriate. When management becomes aware of certain customer-specific factors that impact credit risk, specific allowances for these known troubled accounts are recorded. Trade accounts receivable are written off after all reasonable means to collect the full amount (including litigation, where appropriate) have been exhausted.\nDuring 2025 and 2024, additions to the allowance for credit losses, write-offs and recoveries of customer receivables were not material to our consolidated financial statements.\nH.\nCollaborative Arrangements\nPayments to and from our collaboration partners are presented in our consolidated statements of operations based on the nature of the arrangement (including its contractual terms), the nature of the payments and applicable accounting guidance. Under co-commercialization agreements, we record the amounts received for our share of gross profits from our collaboration partners as\nAlliance revenues,\n when our collaboration partners are the principal in the transaction and we receive a share of their net sales or profits.\nAlliance revenues\n are recorded as we perform co-promotion activities for the collaboration and the collaboration partners sell the products to their customers. The related expenses for selling and marketing these products including reimbursements to or from our collaboration partners for these costs are included in\nSelling, informational and administrative expenses.\n In collaborative arrangements where we manufacture a product for our collaboration partners, we record revenues when we transfer control of the product to our collaboration partners. In collaboration arrangements where we are the principal in the transaction, we record amounts paid to collaboration partners for their share of net sales or profits earned, and all royalty payments to collaboration partners as\nCost of sales\n. Royalty payments received from collaboration partners are included in\nRoyalty revenues.\nReimbursements to or from our collaboration partners for development costs are typically recorded in\nResearch and development expenses\n. Upfront payments and pre-approval milestone payments due from us to our collaboration partners in development stage collaborations are recorded as\nAcquired\n\nin-process\n r\nesearch and development expenses\n. Milestone payments due from us to our collaboration partners after regulatory approval has been attained for a medicine are recorded in\nIdentifiable intangible assets, net\n\u2014developed technology rights. Upfront and pre-approval milestone payments earned from our collaboration partners by us are recognized in\nOther (income)/deductions\u2014net\nover the development period for the products, when our performance obligations include providing R&D services to our collaboration partners. Upfront, pre-approval and post-approval milestone payments earned by us may be recognized in\nOther (income)/deductions\u2014net\n immediately when earned or over other periods depending upon the nature of our performance obligations in the applicable collaboration. Where the milestone event is regulatory approval for a medicine, we generally recognize milestone payments due to us in the transaction price when regulatory approval in the applicable jurisdiction has been attained. We may recognize milestone payments due to us in the transaction price earlier than the milestone event in certain circumstances when recognition of the income would not be probable of a significant reversal.\nI.\nCost of Sales and Inventories\nInventories are recorded at the lower of cost or net realizable value. The cost of finished goods, work in process and raw materials is determined using average actual cost. We regularly review our inventories for impairment and reserves are established when necessary. Inventories that are not expected to be sold within 12 months are classified as\nOther noncurrent assets\n. See\nNote 8A\n.\nJ.\nSelling, Informational and Administrative Expenses\nSelling, informational and administrative costs are expensed as incurred. Among other things, these expenses include the internal and external costs of marketing, advertising, shipping and handling, digital and legal defense.\n Advertising expenses totaled approximately $\n2.7\n billion in 2025, $\n3.3\n billion in 2024 and $\n3.7\n billion in 2023. Production costs are expensed as incurred and the costs of TV, radio, and other electronic media and publications are expensed when the related advertising occurs.\nK.\nResearch and Development Expenses\nR&D costs are expensed as incurred. These expenses include the costs of our proprietary R&D efforts, as well as R&D activities performed in connection with certain licensing arrangements.\nL.\nAcquired In-Process Research and Development Expenses\nBefore a compound receives regulatory approval, we record upfront and milestone payments we make to third parties under licensing and collaboration arrangements as expense. Upfront payments are recorded when incurred, and milestone payments are recorded when the specific milestone has been achieved. Once a compound receives regulatory approval, we record any milestone payments in\nIdentifiable intangible assets, net\n and, unless the asset is determined to have an indefinite life, we typically amortize the payments on a straight-line basis over the remaining agreement term or the expected product life cycle, whichever is shorter.\nAcquired in-process research and development expenses\n includes costs incurred in connection with (a) all upfront and milestone payments on collaboration and in-license agreements, including premiums on equity securities and (b) asset acquisitions of acquired IPR&D.\nPfizer Inc.\n2025 Form 10-K\n61\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nM. Long-Lived Assets\nLong-lived assets include:\n\u2022\nProperty, plant and equipment, net\n\u2014These assets are recorded at cost, including any significant improvements after purchase, less accumulated depreciation. Property, plant and equipment assets, other than land and construction in progress, are depreciated on a straight-line basis over the estimated useful life of the individual assets. Depreciation begins when the asset is ready for its intended use. For tax purposes, accelerated depreciation methods are used as allowed by tax laws.\n\u2022\nIdentifiable intangible assets, net\n\u2014These assets are recorded at fair value at acquisition. Intangible assets with finite lives\n\nare amortized on a straight-line basis over their estimated useful lives. Intangible assets with indefinite lives are not amortized until a useful life can be determined.\n\u2022\nGoodwill\n\u2014Goodwill represents the excess of the consideration transferred for an acquired business over the assigned values of its net assets. Goodwill is not amortized.\nAmortization of finite-lived acquired intangible assets is included in\nAmortization of intangible assets.\nWe review our long-lived assets for impairment indicators throughout the year. We perform impairment testing for indefinite-lived intangible assets and goodwill at least annually and for all other long-lived assets whenever impairment indicators are present. When necessary, we record impairments of long-lived assets for the amount by which the fair value is less than the carrying value of these assets.\nSpecifically:\n\u2022\nFor finite-lived intangible assets, such as developed technology rights, and for other long-lived assets, such as property, plant and equipment, whenever impairment indicators are present, we calculate the undiscounted value of the projected cash flows for the asset, or asset group, and compare this estimated amount to the carrying amount. If the carrying amount is greater, we record an impairment loss for the excess of book value over fair value. In addition, we reevaluate the remaining useful lives of the assets and modify them, as appropriate.\n\u2022\nFor indefinite-lived intangible assets, such as brands and IPR&D assets, when necessary, we determine the fair value of the asset and record an impairment loss, if any, for the excess of book value over fair value. In addition, in all cases of an impairment review other than for IPR&D assets, we re-evaluate whether continuing to characterize the asset as indefinite-lived is appropriate.\n\u2022\nFor goodwill, when necessary, we determine the fair value of each reporting unit and record an impairment loss, if any, for the excess of the book value of the reporting unit over the implied fair value.\nN.\nRestructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives\nWe incur restructuring charges in connection with acquisitions when we implement plans to restructure and integrate the acquired operations or in connection with our cost-reduction and productivity initiatives.\n\u2022\nIn connection with acquisition activity, we typically incur costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and\n\u2022\nIn connection with our cost-reduction/productivity initiatives, we typically incur costs and charges for site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems, and digital enablement.\nIncluded in\nRestructuring charges and certain acquisition-related costs\n are all restructuring charges, as well as certain other costs associated with acquiring and integrating an acquired company. If the restructuring action results in a change in the estimated useful life of an asset, that incremental impact is classified in\nCost of sales, Selling, informational and administrative expenses\n and/or\nResearch and development expenses\n, as appropriate. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, pension and postretirement benefits, many of which may be paid out during periods after termination.\n\nTransaction costs, such as banking, legal, accounting and other similar costs incurred in connection with a business acquisition are expensed as incurred\n.\nOur business may be impacted by these actions, including sales and marketing, manufacturing and R&D, as well as our corporate enabling functions.\nO. Cash Equivalents and Statement of Cash Flows\nCash equivalents include items almost as liquid as cash, such as certificates of deposit and time deposits with maturity periods of three months or less when purchased. If items meeting this definition are part of a larger investment pool, we classify them as\nShort-term investments\n.\nCash flows for financial instruments designated as fair value or cash flow hedges may be included in operating, investing or financing activities, depending on the classification of the items being hedged. Cash flows for financial instruments designated as net investment hedges are classified according to the nature of the hedging instrument. Cash flows for financial instruments that do not qualify for hedge accounting treatment are classified according to their purpose and accounting nature.\nP.\nInvestments and Derivative Financial Instruments\nThe classification of an investment depends on the nature of the investment, our intent and ability to hold the investment, and the degree to which we may exercise influence. Our investments are primarily comprised of the following:\n\u2022\nPublic equity securities with readily determinable fair values, which are carried at fair value, with changes in fair value reported in\nOther (income)/deductions\u2014net.\nPfizer Inc.\n2025 Form 10-K\n62\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\n\u2022\nAvailable-for-sale debt securities, which are carried at fair value, with changes in fair value reported in\nOther comprehensive income/(loss)\nuntil realized.\n\u2022\nHeld-to-maturity debt securities, which are carried at amortized cost.\n\u2022\nPrivate equity securities without readily determinable fair values and where we have no significant influence are measured at cost minus any impairment and plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.\n\u2022\nFor equity investments in common stock or in-substance common stock where we have significant influence over the financial and operating policies of the investee, we use the equity-method of accounting. Under the equity-method, we record our share of the investee\u2019s income and expenses in\nOther (income)/deductions\u2014net\n. The excess of the cost of the investment over our share of the underlying equity in the net assets of the investee as of the acquisition date is allocated to the identifiable assets and liabilities of the investee, with any remaining excess amount allocated to goodwill. Such investments are initially recorded at cost, which is the fair value of consideration paid and typically does not include contingent consideration.\nRealized gains or losses on sales of investments are determined by using the specific identification cost method.\nWe regularly evaluate all of our financial assets for impairment. For investments in debt and equity, if and when a decline in fair value is determined, an impairment charge is recorded and a new cost basis in the investment is established. For equity-method investments, an impairment charge is recorded only if and when a decline in fair value is determined to be other-than-temporary.\nDerivative financial instruments are carried at fair value in certain balance sheet categories (see\nNote 7A\n), with changes in fair value reported in net income or, for certain qualifying hedging relationships, in\nOther comprehensive income/(loss)\n\n(see\nN\no\nt\ne\n\n7\nE\n).\nQ.\nIncome Taxes\nIncome taxes are accounted for under the asset and liability method. Provisions for federal, state and foreign income taxes are calculated on reported pre-tax earnings based on tax laws currently in effect. Deferred taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting based on enacted tax laws and rates and are adjusted for changes in tax laws and rates when such changes are enacted. Deferred taxes related to GILTI (NCTI) for taxable years starting after December 31, 2025 are also recognized for the future tax effects of temporary differences.\nWe provide a valuation allowance when we believe that our deferred tax assets are not recoverable based on an assessment of estimated future taxable income that incorporates ongoing, prudent and feasible tax-planning strategies, that would be implemented, if necessary, to realize the deferred tax assets. Amounts recorded for valuation allowances require judgments about future income which can depend heavily on estimates and assumptions. All deferred tax assets and liabilities within the same tax jurisdiction are presented as a net amount in the noncurrent deferred tax assets or noncurrent deferred tax liabilities sections of our consolidated balance sheet.\nWe recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position, based on its technical merits, will be sustained upon examination by the taxing authority. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate resolution. We regularly monitor our position and subsequently recognize the unrecognized tax benefit: (i) if there are changes in tax law, analogous case law or there is new information that sufficiently raise the likelihood of prevailing on the technical merits of the position to \u201cmore likely than not\u201d; (ii) if the statute of limitations expires; or (iii) if there is a completion of an audit resulting in a favorable settlement of that tax year with the appropriate agency.\nOur assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in the period of settlement or when the statutes of limitations expire, as we treat these events as discrete items in the period of resolution.\nSee\nNote 5\n for further information regarding income taxes.\nR.\nPension and Postretirement Benefit Plans\nThe majority of our employees worldwide are covered by defined benefit pension plans, defined contribution plans or both. In the U.S., we have both IRC-qualified and supplemental (non-qualified) defined benefit plans and defined contribution plans, as well as other postretirement benefit plans consisting primarily of medical insurance for retirees and their eligible dependents. Net periodic pension and postretirement benefit costs other than the service costs are recognized in\nOther (income)/deductions\u2014net\n. We immediately recognize actuarial gains and losses arising from the remeasurement of our pension and postretirement plans (mark-to-market accounting). Each time a pension or postretirement plan is remeasured, the actuarial gain or loss is recognized immediately and classified as\nOther (income)/deductions\u2013\u2013net\n. We recognize the overfunded or underfunded status of each of our defined benefit plans as an asset or liability. The obligations are generally measured at the actuarial present value of all benefits attributable to employee service rendered, as provided by the applicable benefit formula. Our pension and other postretirement obligations may be determined using certain assumptions.\n See\nN\not\ne 11B\n.\nS.\nLegal and Environmental Contingencies\nWe and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business, such as patent litigation, product liability and other product-related litigation, commercial and other asserted or unasserted matters, environmental claims and proceedings, government investigations and guarantees and indemnifications. In assessing contingencies related to legal and environmental proceedings that are pending against the Company, or unasserted claims that are probable of being asserted, we record accruals for these contingencies to the extent that we conclude that a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, we accrue that amount. Alternatively, when no amount within a range of loss appears to be a better estimate than any other amount, we accrue the lowest amount in the range. We record anticipated recoveries under existing insurance contracts when recovery is assured.\nPfizer Inc.\n2025 Form 10-K\n63\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nT.\nShare-Based Payments\nOur compensation programs include share-based payments. Generally, grants under share-based payment programs are accounted for at fair value and these fair values are generally amortized on a straight-line basis or on an accelerated attribution approach over the vesting terms with the related costs recorded in\nCost of sales, Selling, informational and administrative expenses\n and/or\nResearch and development expenses\n, as appropriate.\nNote 2.\nAcquisitions, Divestitures, Equity-Method Investments, Collaborative Arrangements, Research and Development Arrangements and In-Licensing Arrangements\nA. Acquisitions\nMetsera\u2013\u2013\nOn November 13, 2025, we acquired Metsera, a clinical-stage biopharmaceutical company accelerating the next generation of medicines for obesity and cardiometabolic diseases, for $\n65.60\n per share in cash plus a contingent value right (CVR) of up to $\n20.65\n per share in potential additional payments (up to $\n2.3\n billion) tied to the achievement of\nthree\n specified milestones: $\n4.60\n per share following the Phase 3 clinical trial start of Metsera\u2019s injectable GLP-1 receptor antagonist MET-097i+amylin analog MET-233i combination, $\n6.40\n per share following FDA approval of Metsera\u2019s monthly MET-097i monotherapy and $\n9.65\n per share following FDA approval of Metsera\u2019s monthly MET-097i+MET-233i combination. The total fair value of the consideration transferred was $\n8.0\n billion ($\n7.8\n billion net of cash acquired), which includes the fair value of $\n632\n million for the noncash CVRs and $\n475\n million for employee stock awards related to pre-acquisition service. In addition, $\n129\n million in post-closing compensation expense for Metsera employee incentive awards was recorded in\nRestructuring charges and certain acquisition-related costs\n.\nIn connection with this business combination, we provisionally recorded: (i) $\n8.0\n billion of\nidentifiable intangible assets, net,\nconsisting of IPR&D, (ii) $\n2.2\n billion of Goodwill, (iii) $\n1.7\n billion of net deferred tax liabilities, and (iv) $\n635\n million of contingent consideration liability assumed from Metsera. Goodwill resulted primarily from the recognition of deferred tax liabilities, is related to our Biopharma segment (see\nNote 10\n) and is not deductible for tax purposes. The contingent consideration liability was recorded at fair value and relates to Metsera\u2019s 2023 acquisition of Zihipp Ltd (Zihipp). As a part of that transaction, the former Zihipp shareholders are entitled to future potential development, regulatory and commercialization milestones, along with low-single digit royalties on net product sales on the MET-097i and MET-233i product candidates. The allocation of the consideration transferred to the assets acquired and liabilities assumed has not yet been finalized.\nPro forma information has not been presented because this acquisition is not material to our consolidated financial statements.\nSeagen\u2013\u2013\nOn December 14, 2023 (the acquisition date), we acquired Seagen, a global biotechnology company that discovers, develops and commercializes transformative cancer medicines, for $\n229\n per share in cash. The total fair value of the consideration transferred was $\n44.2\n\u00a0billion ($\n43.4\n\u00a0billion, net of cash acquired). In addition, in connection with the acquisition, $\n476\n\u00a0million in post-closing compensation expense for Seagen employee incentive awards was recorded in\nRestructuring charges and certain acquisition-related costs\n (see\nNote 3\n).\nSeagen\u2019s principal business was the development, manufacture, marketing and distribution of targeted cancer therapeutics, primarily using ADC technology. Seagen\u2019s portfolio includes\nfour\n approved medicines as well as a pipeline of product candidates. We believe our acquisition of Seagen will strengthen our oncology capabilities by allowing us to combine Seagen\u2019s ADC technology with the resources and scale of the Pfizer enterprise and to advance more potential breakthroughs to patients with cancer.\nThe final allocation of the consideration transferred to the assets acquired and the liabilities assumed has been completed and is summarized in the following table:\n(MILLIONS)\nFinal Amounts Recognized as of Acquisition Date\nWorking capital, excluding inventories\n(a)\n$\n621\n\nInventories\n(b)\n3,273\n\nProperty, plant and equipment\n280\n\nIdentifiable intangible assets, excluding in-process research and development\n(c)\n7,920\n\nIn-process research and development\n19,900\n\nOther noncurrent assets\n59\n\nNet income tax accounts\n(d)\n(\n4,779\n)\nOther noncurrent liabilities\n(\n187\n)\nTotal identifiable net assets\n27,086\n\nGoodwill\n17,148\n\nNet assets acquired/total consideration transferred\n$\n44,234\n\n(a)\nIncludes cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued compensation and other current liabilities.\n(b)\nComprised of $\n1.1\n\u00a0billion current inventories and $\n2.1\n\u00a0billion noncurrent inventories.\n(c)\nComprised mainly of $\n7.5\n\u00a0billion of finite-lived developed technology rights with an estimated weighted-average life of approximately\n18\n years.\n(d)\nIncluded primarily in\nNoncurrent deferred tax liabilities.\n\nAs of the acquisition date, the fair value of accounts receivable approximated the book value acquired. The gross contractual amount receivable was $\n597\n\u00a0million.\nIn the ordinary course of business, Seagen may incur liabilities for environmental, legal and tax matters, as well as guarantees and indemnifications. These matters may include contingencies. Except as specifically excluded by the relevant accounting standard, contingencies are required to be measured at fair value as of the acquisition date if the acquisition-date fair value of the asset or liability arising\nPfizer Inc.\n2025 Form 10-K\n64\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nfrom a contingency can be determined. If the acquisition-date fair value of the asset or liability cannot be determined, the asset or liability would be recognized at the acquisition date if both of the following criteria are met: (i) it is probable that an asset existed or that a liability had been incurred at the acquisition date, and (ii) the amount of the asset or liability can be reasonably estimated.\n\u2022\nEnvironmental Matters\n\u2014In the ordinary course of business, Seagen may incur liabilities for environmental matters such as remediation work, asset retirement obligations and environmental guarantees and indemnifications.\n\u2022\nLegal Matters\n\u2014Seagen is involved in various legal proceedings, including patent, intellectual property, and product liability matters of a nature considered normal to its business. The contingencies arising from legal matters are not significant to our consolidated financial statements.\n\u2022\nTax Matters\n\u2014In the ordinary course of business, Seagen incurs liabilities for income taxes. Income taxes are exceptions to both the recognition and fair value measurement principles associated with the accounting for business combinations. Reserves for income tax contingencies continue to be measured under the benefit recognition model. Net liabilities for income taxes as of the acquisition date were $\n4.8\n billion, including $\n48\n\u00a0million for uncertain tax positions. The net tax liability includes $\n6.3\n billion for the tax impact of fair value adjustments, partially offset by $\n1.5\n billion for deferred tax assets on which Seagen had recognized a valuation allowance.\nGoodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill recorded as part of the acquisition of Seagen includes the following:\n\u2022\nthe expected specific synergies and other benefits that we believe will result from combining the operations of Seagen with the operations of Pfizer;\n\u2022\nany intangible assets that do not qualify for separate recognition, as well as future, as yet unidentified projects and products; and\n\u2022\nthe value of the going-concern element of Seagen\u2019s existing businesses (the higher rate of return on the assembled collection of net assets versus if Pfizer had acquired all of the net assets separately).\nGoodwill is not amortized and is not deductible for tax purposes. All of the goodwill related to the acquisition of Seagen is related to our Biopharma segment (see\nNote 10\n).\nActual and Pro Forma Impact of Acquisition\n\u2014\nThe following table presents information for Seagen\u2019s operations that are included in Pfizer\u2019s consolidated statements of operations beginning from the acquisition date, December 14, 2023, through Pfizer\u2019s year-end in 2023:\n(MILLIONS)\nDecember 31, 2023\nRevenues\n$\n132\n\nNet loss attributable to Pfizer Inc. common shareholders\n(a)\n(\n746\n)\n(a)\nIncludes restructuring, integration and acquisition-related costs ($\n614\n\u00a0million pre-tax) and purchase accounting charges related to (i) the fair value adjustment for acquisition-date inventory estimated to have been sold ($\n109\n\u00a0million pre-tax); (ii) amortization expense related to the fair value of identifiable intangible assets acquired from Seagen ($\n25\n\u00a0million pre-tax); as well as (iii) depreciation expense related to the fair value adjustment of fixed assets acquired from Seagen ($\n2\n\u00a0million pre-tax).\nThe following table provides unaudited U.S. GAAP supplemental pro forma information as if the acquisition of Seagen had occurred on January 1, 2022:\nUnaudited Supplemental Pro Forma Consolidated Results\n(MILLIONS, EXCEPT PER SHARE DATA)\nYear Ended December 31, 2023\nRevenues\n$\n61,893\n\nNet income/(loss) attributable to Pfizer Inc. common shareholders\n(\n1,481\n)\nDiluted earnings/(loss) per share attributable to Pfizer Inc. common shareholders\n(\n0.26\n)\nThe unaudited supplemental pro forma consolidated results do not purport to reflect what the combined company\u2019s results of operations would have been had the acquisition occurred on January 1, 2022, nor do they project the future results of operations of the combined company or reflect the expected realization of any cost savings associated with the acquisition. The actual results of operations of the combined company may differ significantly from the pro forma information reflected here due to many factors.\nThe unaudited supplemental pro forma financial information includes various assumptions, including those related to the purchase price allocation of the assets acquired and the liabilities assumed from Seagen. The historical U.S. GAAP financial information of Pfizer and Seagen was adjusted, primarily for the following pre-tax adjustments for the year ended December 31, 2023:\n\u2022\nAdditional amortization expense of approximately $\n553\n\u00a0million related to the fair value of identifiable intangible assets acquired.\n\u2022\nAdditional expense related to the fair value adjustment to acquisition-date inventory estimated to have been sold of approximately $\n755\n\u00a0million.\n\u2022\nAdditional estimated interest expense of approximately $\n984\n\u00a0million related to the debt issued by Pfizer and the commercial paper borrowings to partially finance the acquisition.\n\u2022\nElimination of interest income of approximately $\n1.2\n billion related to the debt issuance proceeds that were invested prior to the acquisition date and associated with money market funds under the assumption that a portion of these funds would have been liquidated to partially finance the acquisition.\nThe above adjustments were then adjusted for the applicable tax impact using an estimated weighted-average statutory tax rate applied to the applicable pro forma adjustments.\nThe acquisition of Seagen had no impact on Pfizer\u2019s weighted-average shares as\nno\n shares were issued.\nPfizer Inc.\n2025 Form 10-K\n65\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nB.\nDivestitures\nDivestiture of Early-Stage Rare Disease Gene Therapy Portfolio\u2013\n\u2013On September 19, 2023, we completed an agreement with Alexion, under which Alexion purchased and licensed the assets of our early-stage rare disease gene therapy portfolio. Under the terms of the agreement, Alexion will pay us total consideration of up to $\n1\n billion, consisting of an upfront payment of $\n300\n million which was paid at closing and future contingent milestone payments, plus tiered royalties based on annual net sales of the assets. In connection with the closing of the transaction, Pfizer recognized a $\n222\n million pre-tax gain in\nOther (income)/deductions\u2013\u2013net\n (see\nNote 4\n).\nUpjohn Separation and Combination with Mylan\u2013\u2013\nIn connection with the 2020 spin-off and the combination of the Upjohn Business with Mylan to form Viatris, Pfizer and Viatris entered into various agreements, including a separation and distribution agreement, interim operating models, including agency arrangements, MSAs, TSAs, a tax matters agreement, and an employee matters agreement, among others. The interim agency operating model arrangements primarily include billings, collections and remittance of rebates that we are performing on a transitional basis on behalf of Viatris. Under the MSAs, Pfizer or Viatris, as the case may be, manufactures, labels and packages products for the other party. The terms of the MSAs range in initial duration from\nfour\n to\nseven years\n post-separation. Services under the TSAs were largely completed as of December 31, 2023. Amounts recorded under the above agreements in 2025, 2024 and 2023 were not material to our operations. Net amounts due to Viatris under the above agreements were $\n179\n million as of December 31, 2025 and $\n105\n million as of December 31, 2024. The cash flows associated with the above agreements are included in\nNet cash provided by/(used in) operating activities.\nC.\nEquity-Method Investments\nHaleon\u2013\u2013\nHaleon, is an independent, publicly traded company listed on the London Stock Exchange that holds the joint historical consumer healthcare business of GSK and Pfizer. We owned\n32\n% of Haleon as of December 31, 2023. In March 2024, we sold approximately\n30\n% of our investment in Haleon through the sale of\n791\n\u00a0million ordinary shares in a global public offering, and the sale of\n102\n\u00a0million ordinary shares directly to Haleon, for $\n3.5\n billion. In October 2024, we sold approximately\n34\n% of our remaining investment in Haleon through the sale of\n640\n million ordinary shares in a global public offering, and the sale of\n61\n million ordinary shares directly to Haleon, for $\n3.5\n billion. We recognized total gains on these sales of our Haleon shares of $\n945\n million during 2024 in\nOther (income)/deductions\u2013\u2013net\n (see\nNote 4\n). After the October 2024 share sale, we owned approximately\n15\n% of the outstanding voting shares of Haleon as of December 31, 2024. We sold the remaining portion of our investment in Haleon for $\n6.3\n billion and recognized a net loss on the sale of $\n144\n million in the first quarter of 2025 in\nOther (income)/deductions\u2013\u2013net.\nThrough the third quarter of 2024, we accounted for our Haleon investment under the equity method and recorded our share of earnings from Haleon on a quarterly basis on a one-quarter lag in\nOther (income)/deductions\u2013\u2013net\n. As Haleon was a foreign investee whose reporting currency is the U.K. pound, we translated its financial statements into U.S. dollars and recognized the impact of foreign currency translation adjustments in the carrying value of our investment and in other comprehensive income. With the reduction in our Haleon ownership percentage and board representation after the October 2024 sale, we no longer had the ability to exercise significant influence over the operating and financial policies of Haleon. As a result, we discontinued the application of the equity method to our Haleon investment, and began to account for the investment as an equity security with a readily determinable fair value, which was carried at fair value, with changes in fair value reported in\nOther (income)/deductions\u2013\u2013net\n,\n\nuntil its disposition in the first quarter of 2025. See\nNote 4\n.\nThe following table summarizes the change in the carrying value of our investment in Haleon while subject to the equity method during 2024:\n(MILLIONS)\n2024\nBeginning carrying value reported in\nEquity-method investments\n$\n11,451\n\nCarrying value of shares sold\n(\n6,113\n)\nDividends\n(\n212\n)\nCurrency translation adjustments and other\n(a)\n341\n\nBasis difference adjustments and amortization\n(b), (c)\n(\n91\n)\nPfizer share of Haleon investee capital transaction\n(b), (d)\n(\n44\n)\nPfizer share of Haleon earnings\n(b)\n224\n\nReclassification of accumulated other comprehensive income balances in\nEquity-method investments\n(e)\n(\n143\n)\nTransfer of carrying value to\nShort-term investments\n(f)\n(\n5,411\n)\nEnding carrying value\n$\n\u2014\n\n(a)\nSee\nNote 6\n.\n(b)\nIncluded in\nOther (income)/deductions\n\u2013\u2013\nnet\n.\n(c)\nAdjustments include (i) the impact of Haleon\u2019s brand divestitures and impairments of intangible assets and (ii) changes in Haleon\u2019s tax rates on intangible asset-related deferred tax liabilities.\n(d)\nIncludes (i) a decrease of $\n91\n million recorded in the second quarter of 2024 for Pfizer\u2019s share of an investee capital transaction recognized by Haleon for treasury stock Haleon purchased in the first quarter of 2024 and (ii) an increase of $\n46\n million recorded in the third quarter of 2024 for the impact of the reduction in Pfizer\u2019s ownership from approximately\n32\n% to approximately\n23\n% as applied to dividends with a record date in the first quarter of 2024, which were recognized in Haleon\u2019s second quarter 2024 financial statements.\n(e)\nActivity primarily represents foreign currency translation balances in accumulated other comprehensive income related to the equity-method investment in Haleon that were reclassified into equity-method investments upon our loss of significant influence over Haleon and our discontinuance of the equity method for the Haleon investment.\n(f)\nThe final carrying value of our equity-method investment in Haleon was reclassified to\n Short-term investments\n and was accounted for as an equity investment with a readily determinable fair value, until its disposition in the first quarter of 2025.\nInvestment in ViiV\u2013\u2013\nIn 2009, we and GSK created ViiV, which is focused on research, development and commercialization of human immunodeficiency virus (HIV) medicines. We own approximately\n11.7\n% of ViiV, and prior to 2016 we accounted for our investment under the equity method due to the significant influence that we have over the operations of ViiV through our board representation and minority veto rights. We suspended application of the equity method to our investment in ViiV in 2016 when the carrying value of our investment was\nPfizer Inc.\n2025 Form 10-K\n66\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nreduced to\nzero\n due to the recognition of cumulative equity-method losses and dividends, and therefore we no longer record our proportionate share of ViiV\u2019s net income (loss) in our results of operations. Since 2016, we have recognized dividends from ViiV as income in\nOther (income)/deductions\u2013\u2013net\n when earned, including dividends of $\n265\n million in 2025, $\n272\n million in 2024 and $\n265\n million in 2023 (see\nNote 4\n).\nSummarized financial information for our equity-method investee, ViiV, as of December 31, 2025 and 2024 and for the years ending December 31, 2025, 2024, and 2023 is as follows:\nAs of December 31,\n(MILLIONS)\n2025\n2024\nCurrent assets\n$\n4,991\n\n$\n4,338\n\nNoncurrent assets\n3,297\n\n3,223\n\nTotal assets\n$\n8,288\n\n$\n7,561\n\nCurrent liabilities\n$\n4,714\n\n$\n4,280\n\nNoncurrent liabilities\n5,735\n\n6,205\n\nTotal liabilities\n$\n10,449\n\n$\n10,485\n\nTotal net equity/(deficit) attributable to shareholders\n$\n(\n2,161\n)\n$\n(\n2,924\n)\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nNet sales\n$\n9,824\n\n$\n8,971\n\n$\n7,845\n\nCost of sales\n(\n1,637\n)\n(\n1,360\n)\n(\n1,060\n)\nGross profit\n$\n8,187\n\n$\n7,611\n\n$\n6,785\n\nIncome from continuing operations\n4,277\n\n3,062\n\n3,090\n\nNet income\n4,277\n\n3,062\n\n3,090\n\nIncome attributable to shareholders\n4,277\n\n3,062\n\n3,090\n\nD.\nCollaborative Arrangements\nWe enter into collaborative arrangements with respect to in-line medicines, as well as medicines in development that require completion of research and regulatory approval. Collaborative arrangements are contractual agreements with third parties that involve a joint operating activity, typically a research and/or commercialization effort, where both we and our partner are active participants in the activity and are exposed to the significant risks and rewards of the activity. Our rights and obligations under our collaborative arrangements vary. For example, we have agreements to co-promote pharmaceutical products discovered by us or other companies, and we have agreements where we partner to co-develop and/or participate together in commercializing, marketing, promoting, manufacturing and/or distributing a drug product or vaccine.\nSummarized Financial Information for Collaborative Arrangements\nThe following provides the amounts and classification of payments (income/(expense)) between us and our collaboration partners:\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nProduct revenues\n(a)\n$\n150\n\n$\n175\n\n$\n212\n\nAlliance revenues\n(b)\n9,266\n\n8,388\n\n7,582\n\nRoyalty revenues\n(c)\n1,130\n\n923\n\n605\n\nTotal revenues from collaborative arrangements\n$\n10,546\n\n$\n9,486\n\n$\n8,400\n\nCost of sales\n(d)\n$\n(\n2,181\n)\n$\n(\n2,901\n)\n$\n(\n4,277\n)\nSelling, informational and administrative expenses\n(e)\n(\n324\n)\n(\n335\n)\n(\n267\n)\nResearch and development expenses\n(f)\n145\n\n282\n\n219\n\n(a)\nRepresents sales to our partners of products manufactured by us.\n(b)\nSubstantially all relates to amounts earned from our partners under co-promotion agreements.\n(c)\nPrimarily relates to royalties from our collaboration partners.\n(d)\nPrimarily relates to amounts paid to collaboration partners for their share of net sales or profits earned in collaboration arrangements where we are the principal in the transaction, and cost of sales for inventory purchased from our partners.\n(e)\nRepresents net reimbursements to our partners for SI&A expenses incurred.\n(f)\nRepresents net reimbursements from our partners for R&D expenses incurred.\nThe amounts outlined in the above table do not include transactions with third parties other than our collaboration partners, or other costs for the products under the collaborative arrangements.\nE.\nResearch and Development Arrangements\nResearch and Development Funding Arrangement with Abingworth\n\u2013\u2013In September 2025, we entered into an arrangement with Abingworth under which we will receive up to a total of $\n200\n million in 2025 through 2027 to co-fund our quarterly development costs for specified\nPfizer Inc.\n2025 Form 10-K\n67\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\ntreatments. As there is substantive transfer of risk to the financial partner, the development funding is recognized by us as an obligation to perform contractual services. We are recognizing the funding as a reduction of\nResearch and development expenses\n using an attribution model over the period of the related expenses. The reduction to\nResearch and development expenses\n in 2025 was $\n54\n million. If successful, upon regulatory approval in the U.S. for the indication based on the applicable clinical trial, Abingworth will be eligible to receive an approval-based fixed milestone payment of up to $\n120\n million payable to Abingworth over a period of approximately\neighteen\n months. Following potential regulatory approval, Abingworth will be eligible to receive a combination of fixed milestone payments of up to $\n280\n million in total based on achievement of certain levels of cumulative applicable net sales and payable to Abingworth over a period of approximately\none year\n, as well as royalties based on mid-single digit percentage of the applicable net sales.\nResearch and Development Funding Arrangement with Blackstone\n\u2013\u2013In March 2025, we entered into an arrangement with Blackstone under which we will receive up to a total of $\n326\n million in 2025 through 2028 to co-fund our quarterly development costs for specified treatments. As there is substantive transfer of risk to the financial partner, the development funding is recognized by us as an obligation to perform contractual services. We are recognizing the funding as a reduction of\nResearch and development expenses\n using an attribution model over the period of the related expenses. The reduction to\nResearch and development expenses\n in 2025 was $\n102\n million. If successful, upon regulatory approval in the U.S. or certain major markets in the EU for the indications based on the applicable clinical trials, Blackstone will be eligible to receive approval-based fixed milestone payments of up to $\n277\n million payable to Blackstone over a period of\none\n to\nthree years\n. Following potential regulatory approval, Blackstone will be eligible to receive a combination of fixed milestone payments of up to $\n897\n million in total based on achievement of certain levels of cumulative applicable net sales and payable to Blackstone over a period of\nfive\n to\nseven years\n.\nFor both of the above arrangements, the net present value of the approval-based milestone payments and sales-based milestone payments will be recorded as intangible assets and amortized to\nAmortization of intangible assets\n over the shorter of the term of the agreement or estimated commercial life of the product. Accretion of interest on the liabilities will be recognized as interest expense in\nOther\n(\nincome\n)\n/deductions\u2013\u2013net\n.\nResearch and Development Funding Arrangement with Blackstone\u2013\u2013\nIn April 2023, we entered into an arrangement with Blackstone under which we will receive up to a total of $\n550\n million in 2023 through 2026 to co-fund our quarterly development costs for specified treatments. As there is substantive transfer of risk to the financial partner, the development funding is recognized by us as an obligation to perform contractual services. We are recognizing the funding as a reduction of\nResearch and development expenses\nusing an attribution model over the period of the related expenses. The reduction to\nResearch and development expenses\n in 2025, 2024 and 2023 was $\n57\n million, $\n135\n\u00a0million and $\n175\n million, respectively. If successful, upon regulatory approval in the U.S. or certain major markets in the EU for the indications based on the applicable clinical trials, Blackstone will be eligible to receive approval-based fixed milestone payments of up to $\n468\n million contingent upon the successful results of the clinical trials. Fixed milestone payments due upon approval will be recorded as intangible assets and amortized to\nAmortization of intangible assets\n over the shorter of the term of the agreement or estimated commercial life of the product. Following potential regulatory approval, Blackstone will be eligible to receive a combination of fixed milestone payments of up to $\n550\n million in total based on achievement of certain levels of cumulative applicable net sales, as well as royalties based on a mid-to-high single digit percentage of the applicable net sales. Fixed sales-based milestone payments will be recorded as intangible assets and amortized to\nAmortization of intangible assets\n over the shorter of the term of the agreement or estimated commercial life of the product, and royalties on net sales will be recorded as\nCost of sales\n when incurred.\nF.\nIn-Licensing Arrangements\nIn-Licensing Arrangement with YaoPharma\u2013\u2013\nIn December 2025, we entered into an exclusive global collaboration and in-license agreement with YaoPharma, a leading innovation-driven global healthcare company, for the development, manufacturing and commercialization of YP05002, a small molecule glucagon-like peptide 1 (GLP-1) receptor agonist currently in Phase 1 development for chronic weight management. Under the terms of the agreement, YaoPharma will complete an ongoing YP05002 Phase 1 clinical trial and grants Pfizer an exclusive license to further develop, manufacture and commercialize YP05002 worldwide. YaoPharma received an upfront payment of $\n150\n million and is eligible to receive milestone payments associated with certain development, regulatory and commercial milestones up to $\n1.935\n billion, as well as tiered royalties on sales, if approved.\nIn-Licensing Arrangement with 3SBio\u2013\u2013\nIn July 2025, we completed an exclusive global, ex-China, in-licensing agreement with 3SBio, a leading Chinese biopharmaceutical company, for the development, manufacturing and commercialization of SSGJ-707/PF-08634404, a bispecific antibody targeting PD-1 and vascular endothelial growth factor, currently undergoing several clinical trials in China. Under the terms of the agreement, 3SBio received an upfront payment of $\n1.25\n billion and is eligible to receive milestone payments associated with certain development, regulatory and commercial milestones up to $\n4.8\n billion as well as tiered double-digit royalties on sales of SSGJ-707/PF-08634404, if approved. Additionally, the agreement provides Pfizer the option to extend the license to include exclusive development and commercialization rights to SSGJ-707/PF-08634404 in China. In exchange for the option to the exclusive rights in China, we made an upfront payment to 3SBio of $\n100\n million and, in the event the option is exercised, we would pay an option exercise fee of up to $\n50\n million depending on future events. In connection with this transaction, we recorded a $\n1.35\n billion charge in the third quarter of 2025 in\nAcquired in-process research and development expenses\n and presented it as a cash outflow from operating activities. We also made a $\n100\n million equity investment in 3SBio.\nNote 3.\n\nRestructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives\nA. Realigning Our Cost Base Program\nIn the fourth quarter of 2023, we announced that we launched a multi-year, enterprise-wide cost realignment program that aims to realign our costs with our longer-term revenue expectations. In the second quarter of 2025, we identified additional productivity opportunities to further reduce costs primarily in SI&A, driven in large part by enhanced digital enablement, including automation and AI, and simplification of business processes.\nPfizer Inc.\n2025 Form 10-K\n68\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nWe expect costs associated with these components of the program to be incurred through 2027 and to total approximately $\n4.7\n\u00a0billion, representing primarily cash expenditures for severance, implementation, exit, and digital enablement costs, as well as non-cash asset write downs of which $\n3.1\n\u00a0billion is associated with our Biopharma segment.\nAdditionally, in connection with our efforts to simplify the structure and sharpen the focus of our R&D organization, in the first quarter of 2025, we expanded this program after having identified additional opportunities to drive improvements in productivity and operational efficiencies through enhanced digital enablement, including automation and AI, and simplification of business processes. We expect costs to implement these initiatives to be incurred through 2026 and to total approximately $\n600\n\u00a0million, primarily representing cash expenditures for severance, digital enablement and implementation, all of which is associated with our Biopharma segment. The majority of these costs were recorded in 2025, with cash outlays expected primarily in 2025 and 2026.\nWe expect costs associated with all the components of this program to total approximately $\n5.3\n\u00a0billion of which $\n3.7\n\u00a0billion is associated with the Biopharma segment.\nFrom the start of this program through December 31, 2025, we incurred total costs of $\n4.2\n\u00a0billion, of which $\n3.2\n billion is associated with our Biopharma segment (including $\n2.9\n billion of restructuring charges).\nB. Manufacturing Optimization Program\nIn the second quarter of 2024, we announced that we launched a multi-year, multi-phased program to reduce our costs of goods sold, which includes operational efficiencies, network structure changes, and product portfolio enhancements. The first phase of this program is primarily focused on operational efficiencies, and we expect costs for this first phase to total approximately $\n1.4\n\u00a0billion, primarily representing cash expenditures for severance and implementation costs, all of which is associated with our Biopharma segment. From the start of this program through December 31, 2025, we incurred costs of $\n1.1\n\u00a0billion (including $\n875\n\u00a0million of restructuring charges). These costs were recorded primarily through 2025, with cash outlays expected primarily through 2026.\nC. Key Activities\nThe following summarizes costs and credits for acquisitions and cost-reduction/productivity initiatives:\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nRestructuring charges/(credits):\nEmployee terminations\n$\n684\n\n$\n1,152\n\n$\n1,622\n\nAsset impairments\n349\n\n432\n\n227\n\nExit costs\n59\n\n403\n\n119\n\nRestructuring charges/(credits)\n(a)\n1,092\n\n1,987\n\n1,968\n\nTransaction costs\n(b)\n118\n\n5\n\n190\n\nIntegration costs and other\n(c)\n340\n\n427\n\n785\n\nRestructuring charges and certain acquisition-related costs\n1,550\n\n2,419\n\n2,943\n\nNet periodic benefit costs/(credits) recorded in\nOther (income)/deductions\u2013\u2013net\n(\n78\n)\n7\n\n(\n7\n)\nInventory write-offs\u2013\u2013recorded in\nCost of sales\n33\n\n\u2014\n\n\u2014\n\nAdditional depreciation\u2013\u2013asset restructuring\n\nrecorded in our consolidated statements of operations as follows\n(d)\n:\nCost of sales\n38\n\n14\n\n31\n\nSelling, informational and administrative expenses\n\u2014\n\n5\n\n1\n\nResearch and development expenses\n1\n\n\u2014\n\n\u2014\n\nTotal additional depreciation\u2013\u2013asset restructuring\n38\n\n19\n\n32\n\nImplementation costs recorded in our consolidated statements of operations as follows\n(e)\n:\nCost of sales\n116\n\n120\n\n67\n\nSelling, informational and administrative expenses\n116\n\n90\n\n289\n\nResearch and development expenses\n189\n\n84\n\n101\n\nTotal implementation costs\n421\n\n294\n\n457\n\nTotal costs associated with acquisitions and cost-reduction/productivity initiatives\n$\n1,965\n\n$\n2,738\n\n$\n3,426\n\n(a)\nPrimarily represents cost-reduction initiatives. Amounts associated with our Biopharma segment: (i) charges of $\n691\n\u00a0million for 2025 (including charges of $\n920\n\u00a0million for our Realigning our Cost Base Program and credits of $\n288\n\u00a0million for our Manufacturing Optimization Program), (ii) charges of $\n1.8\n\u00a0billion for 2024 (including charges of $\n1.2\n\u00a0billion our Manufacturing Optimization Program and charges of $\n571\n\u00a0million for our Realigning our Cost Base Program) and (iii) charges of $\n1.5\n\u00a0billion for 2023 (including charges of $\n1.4\n\u00a0billion for our Realigning our Cost Base Program and charges of $\n3\n\u00a0million for our Transforming to a More Focused Company program, that we have substantially completed). For 2025 and 2024,\nEmployee terminations\ninclude revisions of estimates of previously recorded accruals for severance benefits, driven in large part by higher-than-expected voluntary attrition.\n(b)\nRepresents external costs for banking, legal, accounting and other similar services.\n(c)\nRepresents external, incremental costs directly related to integrating acquired businesses, such as expenditures for consulting and the integration of systems and processes, and certain other qualifying costs. 2023 costs mostly relate to our acquisition of Seagen, including $\n476\n million that was recognized as a post-closing compensation expense for payments to Seagen employees in the fourth quarter of 2023 for the fair value of long-term incentive awards that vested upon closing and the expense for employee incentive awards issued in contemplation of the merger. See\nNote 2A\n.\n(d)\nRepresents the impact of changes in the estimated useful lives of assets involved in restructuring actions.\n(e)\nRepresents incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.\nPfizer Inc.\n2025 Form 10-K\n69\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe following summarizes the components and changes in restructuring accruals:\n(MILLIONS)\nEmployee\nTermination\nCosts\nAsset\nImpairment\nCharges\nExit Costs\nAccrual\nBalance, January 1, 2024\n$\n1,978\n\n$\n\u2014\n\n$\n11\n\n$\n1,988\n\nProvision\n1,152\n\n432\n\n403\n\n1,987\n\nUtilization and other\n(a)\n(\n1,083\n)\n(\n432\n)\n(\n341\n)\n(\n1,856\n)\nBalance, December 31, 2024\n(b)\n2,046\n\n\u2014\n\n74\n\n2,120\n\nProvision\n684\n\n349\n\n59\n\n1,092\n\nUtilization and other\n(a)\n(\n947\n)\n(\n349\n)\n(\n6\n)\n(\n1,302\n)\nBalance, December 31, 2025\n(c)\n$\n1,783\n\n$\n\u2014\n\n$\n127\n\n$\n1,910\n\n(a)\nOther activity includes adjustments for foreign currency translation that are not material to our consolidated financial statements.\n(b)\nIncluded in\nOther current liabilities\n ($\n1.7\n billion) and\nOther noncurrent liabilities\n ($\n437\n million).\n(c)\nIncluded in\nOther current liabilities\n($\n1.4\n\u00a0billion) and\nOther noncurrent liabilities\n($\n466\n million).\nNote 4.\nOther (Income)/Deductions\u2014Net\nComponents of\nOther (income)/deductions\u2013\u2013net\ninclude:\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nInterest income\n$\n(\n603\n)\n$\n(\n545\n)\n$\n(\n1,624\n)\nInterest expense\n(a)\n2,671\n\n3,091\n\n2,209\n\nNet interest expense\n2,068\n\n2,546\n\n585\n\nNet (gains)/losses recognized during the period on equity securities\n(b)\n67\n\n(\n1,008\n)\n(\n1,590\n)\nIncome from collaborations, out-licensing arrangements and sales of compound/product rights\n(\n192\n)\n(\n42\n)\n(\n154\n)\nNet periodic benefit costs/(credits) other than service costs\n(\n678\n)\n154\n\n(\n610\n)\nCertain legal matters, net\n(c)\n1,057\n\n567\n\n474\n\nCertain asset impairments\n(d)\n4,940\n\n3,295\n\n3,024\n\nHaleon equity method (income)/loss\n(e)\n\u2014\n\n(\n102\n)\n(\n505\n)\nOther, net\n(f)\n(\n538\n)\n(\n1,022\n)\n(\n1,002\n)\nOther (income)/deductions\u2013\u2013net\n$\n6,724\n\n$\n4,388\n\n$\n222\n\n(a)\nCapitalized interest totaled $\n166\n million in 2025, $\n182\n million in 2024 and $\n160\n million in 2023.\n(b)\n2024 net gains primarily included, among other things, an unrealized gain of $\n1.0\n\u00a0billion related to our previous investment in Haleon, which was carried at fair value at December 31, 2024 (see\nNote 2C\n). 2023 net gains primarily included, among other things, a realized gain of $\n1.7\n\u00a0billion related to our investment in Telavant Holdings, Inc. and unrealized gains of $\n297\n million related to our investment in Cerevel Therapeutics Holdings, Inc., partially offset by unrealized losses of $\n292\n million related to our investment in BioNTech.\n(c)\n2025 primarily includes certain product liability and other legal expenses related to products discontinued and/or divested by Pfizer. 2024 primarily included certain product liability expenses related to products discontinued and/or divested by Pfizer. 2023 primarily included certain product liability and other legal expenses related to products discontinued and/or divested by Pfizer and legal obligations related to pre-acquisition matters.\n(d)\nThe amount for 2025 represents intangible asset impairment charges, associated with our Biopharma segment, primarily due to changes in development plans and updated long-range commercial forecasts, composed of: (i) $\n3.9\n\u00a0billion in impairments of IPR&D assets primarily including $\n1.6\n\u00a0billion for disitamab vedotin, $\n820\n\u00a0million for Tukysa (tucatinib) and $\n820\n\u00a0million for osivelotor, and (ii) $\n1.0\n\u00a0billion in impairments primarily for certain U.S. sterile injectable and hospital products. The amount for 2024 primarily represented intangible asset impairment charges, and included $\n2.9\n billion associated with our Biopharma segment, due to changes in development plans and updated long-range commercial forecasts, primarily composed of: (i) $\n1.0\n billion for B7H4V (felmetatug vedotin), a Phase 1 IPR&D asset, (ii) $\n475\n\u00a0million for Medrol, a finite-lived brand, (iii) $\n435\n\u00a0million for Zavzpret nasal spray developed technology rights, (iv) $\n400\n\u00a0million and $\n200\n\u00a0million for Tukysa and disitamab vedotin, respectively, IPR&D assets reflecting emerging competition, as well as (v) other developed technology rights, IPR&D impairments and a finite-lived licensing agreement totaling $\n436\n\u00a0million which also included de-prioritization of certain assets. The amount for 2023 primarily represented intangible asset impairment charges of $\n3.0\n billion, of which $\n2.9\n billion was associated with our Biopharma segment, including: (i) $\n1.4\n billion for etrasimod (Velsipity) IPR&D, based on a change in development plans for additional indications and overall revenue expectations, (ii) $\n964\n million for Prevnar 13 developed technology rights due to updated commercial forecasts mainly reflecting a transition to vaccines with higher serotype coverage, as well as (iii) $\n486\n million for various other IPR&D assets and developed technology rights, due to updated commercial forecasts mainly reflecting competitive pressures and/or prioritization decisions.\n(e)\nSee\nNote 2C\n.\n(f)\nThe amount for 2025 includes, among other things, dividend income of $\n265\n million from our investment in ViiV. The amount for 2024 primarily included, among other things, (i) gains of $\n945\n million on the partial sales of our previous investment in Haleon in March and October 2024, (ii) dividend income of $\n272\n million from our investment in ViiV and (iii) a charge of $\n420\n million recorded in the third quarter related to the expected sale of one of our facilities resulting from the discontinuation of our DMD program. 2023 included, among other things, (i) dividend income of $\n265\n million from our investment in ViiV and $\n211\n\u00a0million from our investment in Nimbus resulting from Takeda\u2019s acquisition of Nimbus\u2019s oral, selective allosteric tyrosine kinase 2 (TYK2) inhibitor program subsidiary and (ii) a $\n222\n\u00a0million gain on the divestiture of our early-stage rare disease gene therapy portfolio to Alexion.\nPfizer Inc.\n2025 Form 10-K\n70\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nAdditional information about the intangible assets that were impaired during 2025 follows:\nYear Ended\nFair Value\n(a)\nDecember 31, 2025\n(MILLIONS)\nAmount\nLevel 1\nLevel 2\nLevel 3\nImpairment\nIPR&D\n(b)\n$\n4,400\n\n$\n\u2014\n\n$\n\u2014\n\n$\n4,400\n\n$\n3,903\n\nDeveloped technology rights\n(b)\n185\n\n\u2014\n\n\u2014\n\n185\n\n560\n\nFinite-lived brand\n(b)\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n240\n\nIndefinite-lived licensing agreement\n(b)\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n210\n\nFinite-lived licensing agreement\n(b)\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n27\n\nTotal\n$\n4,585\n\n$\n\u2014\n\n$\n\u2014\n\n$\n4,585\n\n$\n4,940\n\n(a)\nThe fair value amounts reflect the remaining fair value for the assets that have been impaired as of the date of impairment, as these assets are not measured at fair value on a recurring basis. See also\nNote\n1E\n.\n(b)\nReflects intangible assets written down to fair value in 2025. Fair value was determined using the income approach, specifically the multi-period excess earnings method, also known as the discounted cash flow method. We started with a forecast of all the expected net cash flows for the asset and then applied an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the product; and assumptions about the probability of technical and regulatory success (PTRS) of ongoing clinical trials, the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.\nFor additional information on identifiable intangible assets, see\nNote\n10\n.\nNote 5.\nTax Matters\nAs a result of the prospective adoption of\nASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09)\n, certain tables are presented in a different format not comparable to prior year disclosures, and certain data contained within the tables may be presented differently than in prior years.\nA. Taxes on Income from Continuing Operations\nComponents of\nIncome from continuing operations before provision/(benefit) for taxes on income\ninclude:\n\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nUnited States\n$\n776\n\n$\n(\n637\n)\n$\n(\n4,411\n)\nInternational\n6,744\n\n8,660\n\n5,469\n\nIncome from continuing operations before provision/(benefit) for taxes on income\n(\na), (b)\n$\n7,520\n\n$\n8,023\n\n$\n1,058\n\n(a)\n2025 v. 2024\n\u2013\u2013\nThe domestic income in 2025 versus the domestic loss in 2024 is primarily attributable to a reduction in operating expenses and restructuring charges, partially offset by higher asset impairment and legal charges. The decrease in the international income in 2025 versus international income in 2024 is primarily attributable to higher asset impairment charges. For 2025, the data in this table conforms to the updated income tax disclosure guidance in accordance with ASU 2023-09.\n(b)\n2024 v. 2023\n\u2013\u2013\nThe reduction in the domestic loss in 2024 versus the domestic loss in 2023 is primarily attributable to increased revenues offset by higher restructuring charges and asset impairment charges. The increase in the international income is primarily attributable to lower:\nCost of Sales\n,\nRestructuring charges and certain acquisition-related costs\nand asset impairment charges.\nComponents of\nProvision/(benefit) for taxes on income\n based on the location of the taxing authorities include:\n\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nCurrent tax expense (benefit):\nU.S. Federal\n$\n384\n\n$\n453\n\n$\n1,321\n\nU.S. State and local\n172\n\n32\n\n(\n135\n)\nForeign\n1,310\n\n1,588\n\n1,142\n\nTotal current tax expense (benefit)\n$\n1,866\n\n$\n2,074\n\n$\n2,328\n\nDeferred tax expense (benefit):\nU.S. Federal\n$\n(\n1,826\n)\n$\n(\n1,909\n)\n$\n(\n2,606\n)\nU.S. State and local\n(\n61\n)\n(\n293\n)\n(\n184\n)\nForeign\n(\n246\n)\n100\n\n(\n652\n)\nTotal deferred tax expense (benefit)\n$\n(\n2,133\n)\n$\n(\n2,102\n)\n$\n(\n3,442\n)\nTotal income tax expense (benefit)\nU.S. Federal\n$\n(\n1,442\n)\n$\n(\n1,456\n)\n$\n(\n1,285\n)\nU.S. State and local\n112\n\n(\n261\n)\n(\n319\n)\n\u00a0Foreign\n1,064\n\n1,689\n\n490\n\nProvision/(benefit) for taxes on income\n$\n(\n266\n)\n$\n(\n28\n)\n$\n(\n1,115\n)\nPfizer Inc.\n2025 Form 10-K\n71\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe changes in\nProvision/(benefit) for taxes on income\n impacting the effective tax rate year-over-year are summarized below:\n2025 v. 2024\nThe tax benefit of $\n266\n\u00a0million for 2025 compared to the tax benefit of $\n28\n\u00a0million for 2024 was primarily due to a favorable change in the jurisdictional mix of earnings, tax benefits related to global income tax resolutions in multiple tax jurisdictions spanning multiple tax years, and the remeasurement of deferred tax liabilities due to the enactment of the OBBBA on July 4, 2025.\n2024 v. 2023\nThe tax benefit of $\n28\n\u00a0million for 2024 compared to the tax benefit of $\n1.1\n billion for 2023 was primarily a result of changes in the jurisdictional mix of earnings partially offset by a tax benefit related to the Transition Tax liability under the TCJA.\nIn all years, federal, state and international net tax liabilities assumed or established as part of a business acquisition are not included in\nProvision/(benefit) for taxes on income\n (see\nNote 2A\n).\nWe elected, with the filing of our 2018 U.S. Federal Consolidated Income Tax Return, to pay our initial estimated $\n15\n billion repatriation tax liability on accumulated post-1986 foreign earnings (Transition Tax liability) over eight years through 2026. The seventh annual installment was paid by its April 15, 2025 due date. The eighth and final annual installment is due April 15, 2026 and is reported in current\nIncome taxes payable\nas of December 31, 2025. Our obligations may vary due to the availability of attributes such as foreign tax and other credit carryforwards or carrybacks.\nConsistent with the disclosure requirements of ASU 2023-09, the table below summarizes income taxes paid (net of refunds received):\nYear Ended December 31,\n(MILLIONS)\n2025\nU.S. Federal taxes\n$\n2,729\n\nU.S. State and local taxes\n101\n\nForeign taxes\nIreland\n1,016\n\nOther foreign jurisdictions\n842\n\nTotal income taxes paid\n$\n4,688\n\nConsistent with our previous cash tax disclosures, the table below summarizes, cash taxes paid, net of refunds:\nYear Ended December 31,\n(MILLIONS)\n2024\n2023\nUnited States\n$\n2,593\n\n$\n1,923\n\nInternational\n1,012\n\n1,224\n\nTotal\n$\n3,605\n\n$\n3,147\n\nPfizer Inc.\n2025 Form 10-K\n72\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nB. Tax Rate Reconciliation\nThe reconciliation of the U.S. statutory income tax rate to our effective tax rate for\nIncome from continuing operations\n\nreflecting the requirements of ASU 2023-09, as adopted prospectively, follows:\n2025\nMillions\nPercentage\nU.S. federal statutory income tax\n$\n1,579\n\n21.0\n\n%\nDomestic federal\nChanges in tax laws or rates enacted in the current period\n(\n153\n)\n(\n2.0\n)\nCross border tax laws\nBranches\n(\n432\n)\n(\n5.7\n)\nForeign-derived deduction-eligible income (FDDEI)\n(\n172\n)\n(\n2.3\n)\nGILTI (NCTI)\n187\n\n2.5\n\nOther\n(a)\n(\n71\n)\n(\n0.9\n)\nNon-taxable or non-deductible items\nCharitable contributions\n(\n99\n)\n(\n1.3\n)\nCompensation\n109\n\n1.4\n\nOther\n(a)\n79\n\n1.1\n\nTax credits\nGILTI (NCTI)\n(\n868\n)\n(\n11.5\n)\nSubpart-F income\n(\n369\n)\n(\n4.9\n)\nR&D\n(\n109\n)\n(\n1.5\n)\nOther\n(a)\n(\n16\n)\n(\n0.2\n)\nOther reconciling items\nIntercompany license agreement(s)\n(\n221\n)\n(\n2.9\n)\nOther\n(a)\n(\n10\n)\n(\n0.1\n)\nState income taxes, net of federal effects\n(b)\n(\n4\n)\n(\n0.1\n)\nForeign\n\nIndia\nChange in valuation allowance\n(\n91\n)\n(\n1.2\n)\nOther\n(a)\n(\n3\n)\n\u2014\n\nIreland\nStatutory income tax rate differential\n(\n268\n)\n(\n3.6\n)\nIntercompany license agreement(s)\n118\n\n1.6\n\nOther\n(a)\n57\n\n0.8\n\nPuerto Rico\n(c)\n(\n81\n)\n(\n1.1\n)\nSingapore\n(d)\nVaried income tax rates\n(\n315\n)\n(\n4.2\n)\nNon-deductible interest expense\n345\n\n4.6\n\nOther\n(a)\n89\n\n1.2\n\nOther foreign jurisdictions\n276\n\n3.7\n\nWorldwide changes in unrecognized tax benefits\n177\n\n2.4\n\nTotal\n$\n(\n266\n)\n(\n3.5\n)\n%\n(a)\nPrimarily comprises items which, individually, do not require separate disclosure pursuant to guidance provided in ASU 2023-09.\n(b)\nState taxes in California, Kentucky and Tennessee make up the majority of the tax effect in this category.\n(c)\nWe have tax incentives pursuant to a grant that expires during 2053. Under such grant, we are partially exempt from income, property and municipal taxes.\n(d)\nWe have grants and incentive tax rates effective through 2048 on income from manufacturing and other operations.\nPfizer Inc.\n2025 Form 10-K\n73\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe reconciliation of the U.S. statutory income tax rate to our effective tax rate for\nIncome from continuing operations,\nprior to the adoption of ASU 2023-09 and as previously disclosed, follows:\n2024\n2023\n^\nU.S. statutory income tax rate\n21.0\n\n%\n21.0\n\n%\nTaxation of non-U.S. operations\n(a), (b)\n(\n7.9\n)\n(\n21.1\n)\nTransition tax liability\n(c)\n(\n6.0\n)\n\u2014\n\nTax settlements and resolution of certain tax positions\n(c)\n(\n2.4\n)\n(\n40.3\n)\nForeign-derived intangible income deduction\n(\n1.2\n)\n(\n33.1\n)\nState & local taxes\n(d)\n(\n2.5\n)\n(\n22.4\n)\nCharitable contributions\n(\n1.7\n)\n(\n7.3\n)\nU.S. R&D tax credit\n(\n1.8\n)\n(\n15.8\n)\nInterest\n(e)\n2.2\n\n13.5\n\nAll other, net\n(f)\n0.1\n\n0.2\n\nEffective tax rate for income from continuing operations\n(\n0.4\n)\n%\n(\n105.4\n)\n%\n^\n\nThe higher rate percentages for the 2023 reconciling items are significantly impacted by the lower domestic and international\nIncome from continuing operations before provision/(benefit) for taxes on income\n (see\nNote 5A\n).\n(a)\nFor taxation of non-U.S. operations, this rate impact reflects the income tax rates and relative earnings in the locations where we do business outside the U.S., together with the U.S. tax cost on our international operations, changes in uncertain tax positions not included in the reconciling item called \u201cTax settlements and resolution of certain tax positions,\u201d as well as changes in valuation allowances. Specifically: (i) the jurisdictional location of earnings is a significant component of our effective tax rate each year, and the rate impact of this component is influenced by the specific location of non-U.S. earnings and the level of such earnings as compared to our total earnings; (ii) the U.S. tax implications of our foreign operations is a significant component of our effective tax rate each year and generally offsets some of the reduction to our effective tax rate each year resulting from the jurisdictional location of earnings; (iii) the impact of certain tax initiatives; and (iv) the impact of changes in uncertain tax positions not included in the reconciling item called \u201cTax settlements and resolution of certain tax positions\u201d is a component of our effective tax rate each year that can result in either an increase or decrease to our effective tax rate. The jurisdictional mix of earnings, which includes the impact of the location of earnings as well as the U.S. tax cost on our international operations, can vary as a result of operating fluctuations in the normal course of business and as a result of the extent and location of other income and expense items, such as restructuring charges, asset impairments and gains and losses on strategic business decisions. See also\nNote 5A\n\nfor the components of pre-tax income and\nProvision/(benefit) for taxes on income,\nwhich is based on the location of the taxing authorities, and for information about settlements and other items impacting\nProvision/(benefit) for taxes on income\n.\n(b)\nIn both years, the reduction in our effective tax rate is a result of the jurisdictional location of earnings and is largely due to lower tax rates in certain jurisdictions, as well as manufacturing and other incentives for our subsidiaries in Singapore and, to a lesser extent, in Puerto Rico. We have Puerto Rican tax incentives pursuant to a grant that expires during 2053. Under such grant, we are partially exempt from income, property and municipal taxes. In Singapore, we have incentive tax rates effective through 2048 on income from manufacturing and other operations.\n(c)\nSee\nNote 5A\n.\n(d)\nIncludes the impact of U.S. state and local taxes and changes in the state valuation allowances including those related to the acquisition of Seagen.\n(e)\nIncludes changes in interest related to our uncertain tax positions not included in the reconciling item called \u201cTax settlements and resolution of certain tax positions\u201d.\n(f)\nAll other, net is primarily due to routine business operations.\nC. Deferred Taxes\nComponents of our deferred tax assets and liabilities, shown before jurisdictional netting, follows:\n2025 Deferred Tax^\n2024 Deferred Tax^\n(MILLIONS)\nAssets\n(Liabilities)\nAssets\n(Liabilities)\nPrepaid/deferred items\n$\n3,516\n\n$\n(\n635\n)\n$\n3,288\n\n$\n(\n847\n)\nAccrued/deferred royalties\n1,051\n\n\u2014\n\n1,306\n\n\u2014\nInventories\n864\n\n(\n372\n)\n992\n\n(\n702\n)\nIntangible assets\n(a)\n1,821\n\n(\n8,810\n)\n1,435\n\n(\n9,066\n)\nProperty, plant and equipment\n249\n\n(\n1,771\n)\n265\n\n(\n1,751\n)\nEmployee benefits\n842\n\n(\n255\n)\n1,002\n\n(\n274\n)\nRestructurings and other charges\n388\n\n\u2014\n\n462\n\n\u2014\nLegal and product liability reserves\n428\n\n\u2014\n\n378\n\n\u2014\nResearch and development\n7,235\n\n\u2014\n\n7,635\n\n\u2014\nNet operating loss/tax credit carryforwards\n(b)\n1,763\n\n\u2014\n\n2,028\n\n\u2014\nUnremitted earnings\n\u2014\n\n(\n76\n)\n\u2014\n(\n69\n)\nState and local tax adjustments\n134\n\n\u2014\n\n161\n\n\u2014\nInvestments\n(c)\n234\n\n(\n36\n)\n73\n\n(\n248\n)\nAll other\n23\n\n(\n12\n)\n87\n\n(\n66\n)\n18,547\n\n(\n11,968\n)\n19,112\n\n(\n13,023\n)\nValuation allowances\n(\n1,546\n)\n\u2014\n\n(\n1,638\n)\n\u2014\nTotal deferred taxes\n$\n17,001\n\n$\n(\n11,968\n)\n$\n17,474\n\n$\n(\n13,023\n)\nNet deferred tax asset/(liability)\n(d), (e)\n$\n5,033\n\n$\n4,451\n\n^\n\nThe deferred tax assets and liabilities associated with GILTI (NCTI) are included in the relevant categories. See\nNote 1Q\n.\nPfizer Inc.\n2025 Form 10-K\n74\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\n(a)\nThe decrease in net deferred tax liabilities in 2025 is primarily due to the amortization of intangible assets and certain impairment charges, partially offset by the acquisition of intangible assets related to Metsera. See\nNote 2A\n.\n(b)\nThe amounts in 2025 and 2024 are reduced for unrecognized tax benefits of $\n636\n\u00a0million and $\n575\n million, respectively, where we have net operating loss carryforwards, similar tax losses, and/or tax credit carryforwards that are available, under the tax law of the applicable jurisdiction, to settle any additional income taxes that would result from the disallowance of a tax position.\n(c)\nThe increase in net deferred tax assets in 2025 is primarily due to the sale of our remaining investment in Haleon. See\nNo\nt\ne 2C\n.\n(d)\nIn 2025,\nNoncurrent deferred tax assets and other noncurrent tax assets\n ($\n7.4\n billion), and\nNoncurrent deferred tax liabilitie\ns ($\n2.4\n billion). In 2024,\nNoncurrent deferred tax assets and other noncurrent tax assets\n ($\n6.6\n billion), and\nNoncurrent deferred tax liabilities\n ($\n2.1\n billion).\n(e)\nExcludes indefinite- and definite-lived deferred tax assets for certain non-U.S. tax losses and interest carryforwards and U.S. state general business credits,  totaling $\n9.9\n\u00a0billion and $\n11.3\n\u00a0billion for 2025 and 2024 respectively, given that management has determined based on applicable accounting rules that it is remote that these tax attributes will be utilized. In 2025, the elimination of certain legal entities resulted in the loss of attributes.\nWe have carryforwards, primarily related to net operating and capital losses, general business credits, foreign tax credits and charitable contributions, which are available to reduce future U.S. federal and/or state, as well as international, income taxes payable with either an indefinite life or expiring at various times from 2026 to 2045. Certain of our U.S. net operating losses and general business credits are subject to limitations under IRC Section\u00a0382.\nAs of December 31, 2025, we have not made a U.S. tax provision on $\n58.8\n billion\n of unremitted earnings of our international subsidiaries. As these earnings are intended to be indefinitely reinvested overseas, the determination of a hypothetical unrecognized deferred tax liability as of December 31, 2025 is not practicable. The amount of indefinitely reinvested earnings is based on estimates and assumptions and subject to management evaluation, and is subject to change in the normal course of business based on operational cash flow, completion of local statutory financial statements and the finalization of tax returns and audits, among other things. Accordingly, we regularly update our earnings and profits analysis for such events.\nD. Tax Contingencies\nFor a description of our accounting policies associated with accounting for income tax contingencies, see\nNote 1Q\n.\nUncertain Tax Positions\nAs tax law is complex and often subject to varied interpretations, it is uncertain whether some of our tax positions will be sustained upon audit. As of December 31, 2025, we had\n\n$\n2.2\n billion and as of December 31, 2024, we had $\n2.0\n billion in net unrecognized tax benefits, excluding associated interest.\n\u2022\nTax assets for uncertain tax positions represent our estimate of the potential tax benefits in one tax jurisdiction that could result from the payment of income taxes in another tax jurisdiction. These potential benefits generally result from cooperative efforts among taxing authorities, as required by tax treaties to minimize double taxation, commonly referred to as the competent authority process. The recoverability of these assets, which we believe to be more likely than not, is dependent upon the actual payment of taxes in one tax jurisdiction and, in some cases, the successful petition for recovery in another tax jurisdiction. In 2025 and in 2024, tax assets for uncertain tax positions also include the filing of an amended income tax return relating to the Transition Tax liability under the TCJA. As of December 31, 2025, and 2024, we had $\n2.5\n billion in assets associated with uncertain tax positions mainly included in\nNoncurrent deferred tax assets and other noncurrent tax assets\n.\n\u2022\nThe majority of these unrecognized tax benefits, if recognized, would impact our effective income tax rate.\nThe reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:\n(MILLIONS)\n2025\n2024\n2023\nBalance, beginning\n$\n(\n4,530\n)\n$\n(\n4,802\n)\n$\n(\n4,494\n)\nAcquisitions\n(\n4\n)\n8\n\n(\n46\n)\nIncreases based on tax positions taken during a prior period\n(a), (b)\n(\n298\n)\n(\n934\n)\n(\n158\n)\nDecreases based on tax positions taken during a prior period\n(a), (c)\n197\n\n599\n\n310\n\nDecreases based on settlements for a prior period\n(c), (d)\n112\n\n911\n\n85\n\nIncreases based on tax positions taken during the current period\n(a)\n(\n375\n)\n(\n433\n)\n(\n515\n)\nImpact of foreign exchange\n(\n54\n)\n52\n\n(\n44\n)\nOther, net\n(a), (e)\n206\n\n70\n\n58\n\nBalance, ending\n(f)\n$\n(\n4,746\n)\n$\n(\n4,530\n)\n$\n(\n4,802\n)\n(a)\nPrimarily included in\nProvision/(benefit) for taxes on income.\n(b)\nIn 2024, the amount includes a gross unrecognized tax benefit associated with the filing of an amended income tax return related to the Transition Tax liability under the TCJA.\n(c)\nIn 2024, the amount primarily related to effectively settling certain issues with the U.S. and foreign tax authorities. See\nNot\ne 5A\n.\n(d)\nPrimarily related to cash payments and reductions of tax attributes.\n(e)\nPrimarily related to decreases as a result of a lapse of applicable statutes of limitations.\n(f)\nIn 2025, included in\nIncome taxes payable\n ($\n5\n million),\n Other current assets\n ($\n5\n\u00a0million),\nNoncurrent deferred tax assets and other noncurrent tax assets\n ($\n1.6\n billion),\nNoncurrent deferred tax liabilities\n ($\n58\n million) and\nOther taxes payable\n ($\n3.0\n billion). In 2024, included in\nIncome taxes payable\n ($\n103\n million),\n Other current assets\n ($\n0.4\n million),\nNoncurrent deferred tax assets and other noncurrent tax assets\n ($\n1.5\n billion),\nNoncurrent deferred tax liabilities\n ($\n3\n million) and\nOther taxes payable\n ($\n2.9\n billion).\n\u2022\nInterest and penalties related to our unrecognized tax benefits are recorded in accordance with the laws of each jurisdiction and are recorded primarily in\nProvision/(benefit) for taxes on income\n. In 2025, we recorded a net increase in interest of $\n40\n million. In 2024, we recorded a net increase in interest of $\n91\n million. In 2023, we recorded a net increase in interest of $\n64\n million. Gross accrued interest totaled $\n681\n million as of December 31, 2025 (reflecting a decrease of $\n1\n million as a result of cash payments) and gross accrued interest\nPfizer Inc.\n2025 Form 10-K\n75\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\ntotaled $\n636\n million as of December 31, 2024 (reflecting a decrease of $\n56\n million as a result of cash payments). In 2025 and 2024, these amounts were substantially all included in\nOther taxes payable.\nAccrued penalties are not significant. See also\nNote 5A\n.\nStatus of Tax Matters\nThe U.S. is one of our major tax jurisdictions, and we are regularly audited by the IRS.\nTax years 2019-2022 are under audit.\nTax years 2023-2025 are open but not under audit.\nAll other tax years are closed. In addition to the open audit years in the U.S., we have open audit years and certain related audits, appeals and investigations in certain major international tax jurisdictions such as\nCanada (2017-2025), Europe (2016-2025, primarily in Ireland, the U.K., France, Italy, Spain and Germany), Asia Pacific (2015-2025, primarily in Australia, China and Singapore) and Latin America (1998-2025, primarily in Brazil).\nE. Tax Provision/(Benefit) on Other Comprehensive Income/(Loss)\nComponents of the\nTax provision/(benefit) on other comprehensive income/(loss)\ninclude:\n\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nForeign currency translation adjustments, net\n(a)\n$\n(\n357\n)\n$\n156\n\n$\n(\n33\n)\nUnrealized holding gains/(losses) on derivative financial instruments, net\n(\n46\n)\n96\n\n111\n\nReclassification adjustments for (gains)/losses included in net income\n(\n58\n)\n(\n29\n)\n(\n93\n)\n\n(\n104\n)\n67\n\n18\n\nUnrealized holding gains/(losses) on available-for-sale securities, net\n12\n\n(\n19\n)\n(\n15\n)\nReclassification adjustments for (gains)/losses included in net income\n(\n1\n)\n5\n\n(\n18\n)\n\n11\n\n(\n14\n)\n(\n33\n)\nBenefit plans: prior service (costs)/credits and other, net\n(\n4\n)\n45\n\n(\n5\n)\nReclassification adjustments related to amortization of prior service costs and other, net\n(\n20\n)\n(\n26\n)\n(\n28\n)\nReclassification adjustments related to curtailments of prior service costs and other, net\n(\n12\n)\n2\n\n(\n4\n)\n\n(\n36\n)\n22\n\n(\n37\n)\nTax provision/(benefit) on other comprehensive income/(loss)\n$\n(\n486\n)\n$\n231\n\n$\n(\n85\n)\n(a)\nTaxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that are expected to be held indefinitely.\nNote 6.\nAccumulated Other Comprehensive Loss, Excluding Noncontrolling Interests\nThe following summarizes the changes, net of tax, in\nAccumulated other comprehensive loss\n:\nNet Unrealized Gains/(Losses)\nBenefit Plans\n(MILLIONS)\nForeign Currency Translation Adjustments\n(a)\nDerivative Financial Instruments\nAvailable-For-Sale Securities\nPrior Service (Costs)/Credits and Other\nAccumulated Other Comprehensive Income/(Loss)\nBalance, January 1, 2023\n$\n(\n8,360\n)\n$\n(\n412\n)\n$\n220\n\n$\n248\n\n$\n(\n8,304\n)\nOther comprehensive income/(loss)\n(b)\n497\n\n195\n\n(\n229\n)\n(\n120\n)\n343\n\nBalance, December 31, 2023\n(\n7,863\n)\n(\n217\n)\n(\n9\n)\n128\n\n(\n7,961\n)\nOther comprehensive income/(loss)\n(b)\n(\n121\n)\n274\n\n(\n97\n)\n63\n\n118\n\nBalance, December 31, 2024\n(\n7,984\n)\n57\n\n(\n106\n)\n191\n\n(\n7,842\n)\nOther comprehensive income/(loss)\n(b)\n188\n\n(\n378\n)\n78\n\n(\n116\n)\n(\n227\n)\nBalance, December 31, 2025\n$\n(\n7,796\n)\n$\n(\n321\n)\n$\n(\n28\n)\n$\n75\n\n$\n(\n8,069\n)\n(a)\nAmounts do not include foreign currency translation adjustments attributable to noncontrolling interests.\n(b)\nForeign currency translation adjustments include net gains/(losses) related to the impact of our net investment hedging program and gains/(losses) related to our previous investment in Haleon through third quarter of 2024, at which time we discontinued the application of the equity method to the Haleon investment (see\nNote 2C\n)\n.\nPfizer Inc.\n2025 Form 10-K\n76\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nNote 7.\nFinancial Instruments\nA. Fair Value Measurements\nFinancial Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy:\nAs of December 31, 2025\nAs of December 31, 2024\n(MILLIONS)\nTotal\nLevel 1\nLevel 2\nLevel 3\nTotal\nLevel 1\nLevel 2\nLevel 3\nFinancial assets:\nShort-term investments\nEquity securities with readily determinable fair value\n(a)\n$\n2,596\n\n$\n\u2014\n\n$\n2,596\n\n$\n\u2014\n\n$\n7,848\n\n$\n6,456\n\n$\n1,392\n\n$\n\u2014\n\nAvailable-for-sale debt securities:\nGovernment and agency\u2014non-U.S.\n4,859\n\n\u2014\n\n4,859\n\n\u2014\n\n6,855\n\n\u2014\n\n6,855\n\n\u2014\n\nGovernment and agency\u2014U.S.\n3,030\n\n\u2014\n\n3,030\n\n\u2014\n\n2,853\n\n\u2014\n\n2,853\n\n\u2014\n\nCorporate and other\n1,294\n\n\u2014\n\n1,294\n\n\u2014\n\n1,173\n\n\u2014\n\n1,173\n\n\u2014\n\n9,183\n\n\u2014\n\n9,183\n\n\u2014\n\n10,881\n\n\u2014\n\n10,881\n\n\u2014\n\nTotal short-term investments\n11,779\n\n\u2014\n\n11,779\n\n\u2014\n\n18,729\n\n6,456\n\n12,273\n\n\u2014\n\nOther current assets\nDerivative assets:\nInterest rate contracts\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nForeign exchange contracts\n416\n\n\u2014\n\n416\n\n\u2014\n\n1,056\n\n\u2014\n\n1,056\n\n\u2014\n\nTotal other current assets\n416\n\n\u2014\n\n416\n\n\u2014\n\n1,056\n\n\u2014\n\n1,056\n\n\u2014\n\nLong-term investments\nEquity securities with readily determinable fair values\n(b)\n642\n\n642\n\n\u2014\n\n\u2014\n\n1,246\n\n1,246\n\n\u2014\n\n\u2014\n\nAvailable-for-sale debt securities:\nGovernment and agency\u2014non-U.S.\n1\n\n\u2014\n\n1\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nCorporate and other\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n1\n\n\u2014\n\n1\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nTotal long-term investments\n642\n\n642\n\n1\n\n\u2014\n\n1,246\n\n1,246\n\n\u2014\n\n\u2014\n\nOther noncurrent assets\nDerivative assets:\nInterest rate contracts\n52\n\n\u2014\n\n52\n\n\u2014\n\n13\n\n\u2014\n\n13\n\n\u2014\n\nForeign exchange contracts\n64\n\n\u2014\n\n64\n\n\u2014\n\n447\n\n\u2014\n\n447\n\n\u2014\n\nTotal derivative assets\n116\n\n\u2014\n\n116\n\n\u2014\n\n460\n\n\u2014\n\n460\n\n\u2014\n\nInsurance contracts\n(c)\n999\n\n\u2014\n\n999\n\n\u2014\n\n875\n\n\u2014\n\n875\n\n\u2014\n\nTotal other noncurrent assets\n1,115\n\n\u2014\n\n1,115\n\n\u2014\n\n1,335\n\n\u2014\n\n1,335\n\n\u2014\n\nTotal assets\n$\n13,953\n\n$\n642\n\n$\n13,311\n\n$\n\u2014\n\n$\n22,366\n\n$\n7,701\n\n$\n14,665\n\n$\n\u2014\n\nFinancial liabilities:\nOther current liabilities\nDerivative liabilities:\nInterest rate contracts\n$\n16\n\n$\n\u2014\n\n$\n16\n\n$\n\u2014\n\n$\n28\n\n$\n\u2014\n\n$\n28\n\n$\n\u2014\n\nForeign exchange contracts\n412\n\n\u2014\n\n412\n\n\u2014\n\n217\n\n\u2014\n\n217\n\n\u2014\n\nContingent consideration liabilities\n(d)\n95\n\n\u2014\n\n\u2014\n\n95\n\n39\n\n\u2014\n\n\u2014\n\n39\n\nTotal other current liabilities\n523\n\n\u2014\n\n428\n\n95\n\n284\n\n\u2014\n\n245\n\n39\n\nOther noncurrent liabilities\nDerivative liabilities:\nInterest rate contracts\n215\n\n\u2014\n\n215\n\n\u2014\n\n397\n\n\u2014\n\n397\n\n\u2014\n\nForeign exchange contracts\n815\n\n\u2014\n\n815\n\n\u2014\n\n723\n\n\u2014\n\n723\n\n\u2014\n\nContingent consideration liabilities\n(d)\n1,695\n\n\u2014\n\n\u2014\n\n1,695\n\n477\n\n\u2014\n\n\u2014\n\n477\n\nTotal other noncurrent liabilities\n2,725\n\n\u2014\n\n1,030\n\n1,695\n\n1,598\n\n\u2014\n\n1,121\n\n477\n\nTotal liabilities\n$\n3,248\n\n$\n\u2014\n\n$\n1,458\n\n$\n1,790\n\n$\n1,882\n\n$\n\u2014\n\n$\n1,366\n\n$\n517\n\n(a)\nIncludes money market funds primarily invested in U.S. Treasury and government debt. As of December 31, 2024, short-term equity securities included our previous investment in Haleon of $\n6.5\n billion. In the first quarter of 2025, we sold the remaining portion of our investment in Haleon for $\n6.3\n billion. See\nNote 2C\n.\n(b)\nLong-term equity securities of $\n146\n million as of December 31, 2025 and $\n133\n million as of December 31, 2024 were held in restricted trusts for U.S. non-qualified employee benefit plans.\n(c)\nIncludes life insurance policies held in restricted trusts for U.S. non-qualified employee benefit plans. The underlying invested assets in these contracts are marketable securities, which are carried at fair value, with changes in fair value recognized in\nOther (income)/deductions\u2014net\n (see\nNote 4\n).\n(d)\nIncludes the fair value of contingent consideration associated with the acquisition of Metsera and certain prior business combinations. Fair value is estimated by using a probability-weighted discounted cash flow approach (see\nN\not\ne 16\nD\n).\n\nPfizer Inc.\n2025 Form 10-K\n77\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe following provides the changes in our contingent consideration liabilities valued using significant unobservable inputs:\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\nFair value, beginning\n$\n517\n\n$\n692\n\nChanges in estimated fair value\n(a)\n67\n\n(\n52\n)\nAdditions\n1,266\n\n\u2014\n\nPayments\n(\n59\n)\n(\n123\n)\nTransfer into/(out\u00a0of) Level 3\n\u2014\n\n\u2014\n\nFair value, ending\n$\n1,790\n\n$\n517\n\n(a)\nReported in\nOther (income)/deductions\n\u2013\u2013\nnet\n. See\nNote 4\n.\nFinancial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis\u2013\u2013\nThe carrying value of Long-term debt, excluding the current portion, was $\n62\n\u00a0billion as of December 31, 2025 and $\n57\n\u00a0billion as of December 31, 2024. The estimated fair value of such debt, using a market approach and Level 2 inputs, was $\n60\n\u00a0billion as of December 31, 2025 and $\n54\n\u00a0billion as of December 31, 2024.\nThe differences between the estimated fair values and carrying values of held-to-maturity debt securities, private equity securities, long-term receivables and short-term borrowings not measured at fair value on a recurring basis were not significant as of December 31, 2025 and 2024. The fair value measurements of our held-to-maturity debt securities and short-term borrowings are based on Level 2 inputs. The fair value measurements of our long-term receivables and private equity securities are based on Level 3 inputs.\nB. Investments\nTotal Short-Term and Long-Term Investments\nThe following summarizes our investments by classification type:\nAs of December 31,\n(MILLIONS)\n2025\n2024\nShort-term investments\nEquity securities with readily determinable fair values\n$\n2,596\n\n$\n7,848\n\nAvailable-for-sale debt securities\n9,183\n\n10,881\n\nHeld-to-maturity debt securities\n675\n\n705\n\nTotal Short-term investments\n$\n12,454\n\n$\n19,434\n\nLong-term investments\nEquity securities with readily determinable fair values\n(a)\n$\n642\n\n$\n1,246\n\nAvailable-for-sale debt securities\n1\n\n\u2014\n\nHeld-to-maturity debt securities\n48\n\n45\n\nPrivate equity securities at cost\n(a)\n696\n\n719\n\nEquity-method investments\n235\n\n217\n\nTotal Long-term investments\n$\n1,621\n\n$\n2,228\n\n(a)\nRepresent investments in the life sciences sector.\nDebt Securities\nOur investment portfolio consists of investment-grade debt securities issued across diverse governments, corporate and financial institutions:\nAs of December 31, 2025\nAs of December 31, 2024\nGross Unrealized\nMaturities (in Years)\nGross Unrealized\n(MILLIONS)\nAmortized Cost\nGains\nLosses\nFair Value\nWithin 1\nOver 1\nto 5\nOver 5\nAmortized Cost\nGains\nLosses\nFair Value\nAvailable-for-sale debt securities\nGovernment and agency\n\u2013\u2013\nnon-U.S.\n$\n4,890\n\n$\n3\n\n$\n(\n34\n)\n$\n4,859\n\n$\n4,859\n\n$\n1\n\n$\n\u2014\n\n$\n6,970\n\n$\n8\n\n$\n(\n123\n)\n$\n6,855\n\nGovernment and agency\n\u2013\u2013\nU.S.\n3,030\n\n\u2014\n\n\u2014\n\n3,030\n\n3,030\n\n\u2014\n\n\u2014\n\n2,853\n\n\u2014\n\n\u2014\n\n2,853\n\nCorporate and other\n1,295\n\n\u2014\n\n(\n1\n)\n1,294\n\n1,294\n\n\u2014\n\n\u2014\n\n1,179\n\n\u2014\n\n(\n6\n)\n1,173\n\nHeld-to-maturity debt securities\nTime deposits and other\n487\n\n\u2014\n\n\u2014\n\n487\n\n444\n\n7\n\n36\n\n697\n\n\u2014\n\n\u2014\n\n697\n\nGovernment and agency\n\u2013\u2013\nnon-U.S.\n236\n\n\u2014\n\n\u2014\n\n236\n\n231\n\n4\n\n1\n\n237\n\n\u2014\n\n\u2014\n\n237\n\nTotal debt securities\n$\n9,938\n\n$\n3\n\n$\n(\n35\n)\n$\n9,906\n\n$\n9,858\n\n$\n12\n\n$\n37\n\n$\n11,935\n\n$\n8\n\n$\n(\n129\n)\n$\n11,814\n\nAny expected credit losses to these portfolios would be immaterial to our financial statements.\nPfizer Inc.\n2025 Form 10-K\n78\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nEquity Securities\nThe following presents the calculation of the portion of unrealized (gains)/losses that relates to equity securities, excluding equity-method investments, held at the reporting date:\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nNet (gains)/losses recognized during the period on equity securities\n(a)\n$\n67\n\n$\n(\n1,008\n)\n$\n(\n1,590\n)\nLess: Net (gains)/losses recognized during the period on equity securities sold during the period\n35\n\n(\n1,122\n)\n(\n1,754\n)\nNet unrealized (gains)/losses during the reporting period on equity securities still held at the reporting date\n$\n32\n\n$\n114\n\n$\n165\n\n(a)\nReported in\nOther (income)/deductions\n\u2013\u2013\nnet\n. See\nNote 4\n.\nIncluded in net unrealized (gains)/losses are observable price changes on equity securities without readily determinable fair values. As of December 31, 2025, there were cumulative impairments and downward adjustments of $\n433\n million and upward adjustments of $\n225\n million. Impairments, downward and upward adjustments were not material to our operations in 2025, 2024 and 2023.\nC. Short-Term Borrowings\nShort-term borrowings include:\nAs of December 31,\n(MILLIONS)\n2025\n2024\nCommercial paper, principal amount\n(a)\n$\n\u2014\n\n$\n2,453\n\nCurrent portion of long-term debt, principal amount\n3,000\n\n3,750\n\nOther short-term borrowings, principal amount\n(b)\n157\n\n755\n\nTotal short-term borrowings, principal amount\n3,157\n\n6,957\n\nNet unamortized discounts, premiums and debt issuance costs\n(\n3\n)\n(\n12\n)\nTotal\nShort-term borrowings, including current portion of long-term debt\n, carried at historical proceeds, as adjusted\n$\n3,154\n\n$\n6,946\n\n(a)\nThe weighted-average effective interest rate on commercial paper outstanding was approximately\n4.94\n% as of December 31, 2024.\n(b)\nPrimarily includes cash collateral. See\nNote 7F\n.\nAs of December 31, 2025, we had access to a $\n7.0\n billion committed U.S. revolving credit facility maturing in October 2030, which may be used for general corporate purposes including to support our global commercial paper borrowings. In addition to the U.S. revolving credit facilities, our lenders have provided us an additional $\n237\n million in lines of credit, essentially all expiring within one year. Essentially all lines of credit were unused as of December 31, 2025.\n\nD. Long-Term Debt\nThe following outlines our senior unsecured long-term debt\n(a)\n and the weighted-average stated interest rate by maturity:\nAs of December 31,\n(MILLIONS)\n2025\n2024\nNotes due 2026 (\n3.7\n% for 2024)\n(b)\n$\n\u2014\n\n$\n6,000\n\nNotes due 2027 (\n2.9\n% for 2025 and\n2.2\n% for 2024)\n2,081\n\n980\n\nNotes due 2027 (Secured Overnight Financing Rate \u201cSOFR\u201d +\n0.500\n%)\n500\n\n\u2014\n\nNotes due 2028 (\n4.6\n% for 2025 and 2024)\n5,660\n\n5,660\n\nNotes due 2029 (\n3.3\n% for 2025 and\n3.5\n% for 2024)\n2,631\n\n1,750\n\nNotes due 2030 (\n3.7\n% for 2025 and\n3.6\n% for 2024)\n6,250\n\n5,250\n\nNotes due 2031-2035 (\n4.4\n% for 2025 and\n4.5\n% for 2024)\n10,424\n\n6,750\n\nNotes due 2036-2040 (\n5.3\n% for 2025 and\n5.4\n% for 2024)\n10,458\n\n9,534\n\nNotes due 2041-2045 (\n4.3\n% for 2025 and 2024)\n7,540\n\n6,474\n\nNotes due 2046-2050 (\n3.7\n% for 2025 and 2024)\n4,750\n\n4,750\n\nNotes due 2051-2065 (\n5.3\n% for 2025 and 2024)\n11,000\n\n10,000\n\nTotal long-term debt, principal amount\n61,293\n\n57,147\n\nNet fair value adjustments related to hedging and purchase accounting\n834\n\n701\n\nNet unamortized discounts, premiums and debt issuance costs\n(\n486\n)\n(\n444\n)\nTotal long-term debt, carried at historical proceeds, as adjusted\n$\n61,641\n\n$\n57,405\n\nCurrent portion of long-term debt, carried at historical proceeds, as adjusted (not included above (\n3.9\n% for 2025 and 2024))\n$\n2,997\n\n$\n3,747\n\n(a)\nOur long-term debt is generally redeemable by us at any time at varying redemption prices plus accrued and unpaid interest.\n(b)\nReclassified to the current portion of long-term debt.\nPfizer Inc.\n2025 Form 10-K\n79\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nIssuances\nIn 2025, we issued the following senior unsecured notes\n(a)\n:\n(MILLIONS)\nPrincipal\nCoupon Rate\nMaturity Date\nIssue Currency\nAs of December 31, 2025\nSOFR +\n0.500\n%\nNovember 15, 2027\nU.S. dollar\n$\n500\n\n3.875\n%\nNovember 15, 2027\nU.S. dollar\n1,000\n\n4.200\n%\nNovember 15, 2030\nU.S. dollar\n1,000\n\n4.500\n%\nNovember 15, 2032\nU.S. dollar\n1,250\n\n4.875\n%\nNovember 15, 2035\nU.S. dollar\n1,250\n\n5.600\n%\nNovember 15, 2055\nU.S. dollar\n500\n\n5.700\n%\nNovember 15, 2065\nU.S. dollar\n500\n\n$\n6,000\n\n(b)\n2.875\n%\nMay 19, 2029\nEuro\n\u20ac\n750\n\n3.250\n%\nMay 19, 2032\nEuro\n1,000\n\n3.875\n%\nMay 19, 2037\nEuro\n750\n\n4.250\n%\nMay 19, 2045\nEuro\n800\n\n\u20ac\n3,300\n\n(c)\n(a)\nThe fixed rate notes may be redeemed by us at any time, in whole, or in part, at a make-whole redemption price plus accrued and unpaid interest.\n(b)\nThe net proceeds from the sale of the notes were used for general corporate purposes, including the acquisition of Metsera and the refinancing of existing indebtedness. The weighted average effective interest rate for the notes at issuance was\n4.583\n%.\n(c)\nIssued through our wholly-owned finance subsidiary, PNIF, for general corporate purposes. The notes are fully and unconditionally guaranteed on a senior unsecured basis by Pfizer Inc. PNIF has no assets or operations and will have no assets or operations, other than as related to the issuance, administration and repayment of the notes and any other debt securities that it may issue in the future. The weighted average effective interest rate for the notes at issuance was\n3.605\n%.\nIn May 2023, we issued, through our wholly-owned finance subsidiary, PIE, $\n31\n billion principal amount of senior unsecured notes at an effective interest rate of\n4.93\n% as part of the financing for our acquisition of Seagen. The notes are fully and unconditionally guaranteed on a senior unsecured basis by Pfizer Inc. PIE was formed to finance a portion of the consideration for the acquisition of Seagen and has no assets or operations, and will have no assets or operations, other than as related to the issuance, administration and repayment of the notes and any other debt securities that it may issue in the future. In December 2025, we redeemed $\n3\n billion of the\n4.45\n% PIE senior unsecured notes due in May 2026.\nE. Derivative Financial Instruments and Hedging Activities\nForeign Exchange Risk\u2013\u2013\nA significant portion of our revenues, earnings and net investments in foreign affiliates is exposed to changes in foreign exchange rates. Where foreign exchange risk is not offset by other exposures, we manage our foreign exchange risk principally through the use of derivative financial instruments and foreign currency debt. These financial instruments serve to mitigate the impact on net income as a result of remeasurement into another currency, or against the impact of translation into U.S. dollars of certain foreign exchange-denominated transactions.\nThe derivative financial instruments primarily hedge or offset exposures in the euro, U.K. pound, Chinese renminbi, Japanese yen, Canadian dollar, and Swedish krona, and include a portion of our forecasted foreign exchange-denominated intercompany inventory sales hedged up to\ntwo years\n. We may also seek to protect against possible declines in the net investments of our foreign business entities.\nChanges in fair value are reported in earnings or in\nOther comprehensive income/(loss)\n, depending on the nature and purpose of the financial instrument (hedge or offset relationship). For certain foreign exchange contracts, we exclude an amount from the assessment of hedge effectiveness and recognize the excluded amount through an amortization approach in earnings. The hedge relationships are as follows:\n\u2022\nGenerally, we recognize the gains and losses on foreign exchange contracts that are designated as fair value hedges in earnings upon the recognition of the change in fair value of the hedged item. We also recognize the offsetting foreign exchange impact attributable to the hedged item in earnings.\n\u2022\nGenerally, we record in\nOther comprehensive income/(loss)\n gains or losses on foreign exchange contracts that are designated as cash flow hedges and reclassify those amounts into earnings in the same period or periods during which the hedged transaction affects earnings.\n\u2022\nWe record in\nOther comprehensive income/(loss)\u2013\u2013Foreign currency translation adjustments, net\nthe foreign exchange gains and losses related to foreign exchange-denominated debt and foreign exchange contracts designated as a hedge of our net investments in foreign subsidiaries and reclassify those amounts into earnings upon the sale or substantial liquidation of our net investments.\n\u2022\nFor foreign exchange contracts not designated as hedging instruments, we recognize the gains and losses immediately into earnings along with the earnings impact of the items they generally offset. These contracts take the opposite currency position of that reflected on the balance sheet to counterbalance the effect of any currency movement.\nInterest Rate Risk\u2013\u2013\nOur interest-bearing investments and borrowings are subject to interest rate risk. Depending on market conditions, we may change the profile of our outstanding debt or investments by entering into derivative financial instruments like interest rate swaps, either to hedge or offset the exposure to changes in the fair value of hedged items with fixed interest rates, or to convert variable rate debt or investments to fixed rates. The derivative financial instruments primarily hedge U.S. dollar fixed-rate debt.\nWe recognize the change in fair value on interest rate contracts that are designated as fair value hedges in earnings, as well as the offsetting earnings impact of the hedged risk attributable to the hedged item.\nPfizer Inc.\n2025 Form 10-K\n80\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe following summarizes the fair value of the derivative financial instruments and notional amounts:\n(MILLIONS)\nAs of December 31, 2025\nAs of December 31, 2024\nFair Value\nFair Value\nNotional\nAsset\nLiability\nNotional\nAsset\nLiability\nDerivatives designated as hedging instruments:\nForeign exchange contracts\n(a)\n$\n22,984\n\n$\n325\n\n$\n1,066\n\n$\n23,991\n\n$\n1,250\n\n$\n719\n\nInterest rate contracts\n6,750\n\n52\n\n230\n\n6,750\n\n13\n\n425\n\n377\n\n1,296\n\n1,263\n\n1,144\n\nDerivatives not designated as hedging instruments:\nForeign exchange contracts\n$\n22,777\n\n155\n\n162\n\n$\n26,335\n\n253\n\n221\n\nTotal\n$\n532\n\n$\n1,458\n\n$\n1,516\n\n$\n1,366\n\n(a)\nThe notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $\n5.0\n\u00a0billion as of December 31, 2025 and $\n5.0\n\u00a0billion as of December 31, 2024.\nThe following summarizes information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk exposures:\n\nGains/(Losses)\nRecognized in OID\n(a)\nGains/(Losses)\nRecognized in OCI\n(a)\nGains/(Losses)\nReclassified from\nOCI into OID and COS\n(a)\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2025\n2024\n2025\n2024\nDerivative Financial Instruments in Cash Flow Hedge Relationships:\n\nInterest rate contracts\n$\n\u2014\n\n$\n\u2014\n$\n\u2014\n\n$\n\u2014\n\n$\n\u2014\n\n$\n\u2014\n\nForeign exchange contracts\n(b)\n\u2014\n\n\u2014\n(\n270\n)\n466\n\n211\n\n124\n\nAmount excluded from effectiveness testing and amortized into earnings\n(c)\n\u2014\n\n\u2014\n58\n\n34\n\n57\n\n34\n\nDerivative Financial Instruments in Fair Value Hedge Relationships:\nInterest rate contracts\n221\n\n(\n253\n)\n\u2014\n\n\u2014\n\u2014\n\n\u2014\nHedged item\n(\n221\n)\n253\n\n\u2014\n\n\u2014\n\u2014\n\n\u2014\nDerivative Financial Instruments in Net Investment Hedge Relationships:\nForeign exchange contracts\n\u2014\n\n\u2014\n(\n1,361\n)\n498\n\n\u2014\n\n\u2014\n\nAmount excluded from effectiveness testing and amortized into earnings\n(c)\n\u2014\n\n\u2014\n321\n\n119\n\n207\n\n154\n\nNon-Derivative Financial Instruments in Net Investment Hedge Relationships\n(d)\n:\nForeign currency long-term debt\n\u2014\n\n\u2014\n(\n101\n)\n49\n\n\u2014\n\n\u2014\n\nDerivative Financial Instruments Not Designated as Hedges:\nForeign exchange contracts\n98\n\n50\n\n\u2014\n\n\u2014\n\u2014\n\n\u2014\n$\n98\n\n$\n50\n\n$\n(\n1,353\n)\n$\n1,166\n\n$\n476\n\n$\n313\n\n(a)\nOID = Other (income)/deductions\u2014net,\n\nincluded in\nOther (income)/deductions\u2014net\n in the consolidated statements of operations\n.\n COS = Cost of Sales, included in\nCost of sales\n in the consolidated statements of operations. OCI = Other comprehensive income/(loss), included in the consolidated statements of comprehensive income/(loss)\n.\n(b)\nThe amounts reclassified from OCI into COS were a net gain of $\n49\n million in 2025 and a net gain of $\n119\n million in 2024. The remaining amounts were reclassified from OCI into OID. Based on year-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax loss of $\n16\n million within the next 12 months into income\n.\nThe maximum length of time over which we are hedging our exposure to the variability in future foreign exchange cash flows is approximately\n17\n years and relates to foreign currency debt.\n(c)\nThe amounts reclassified from OCI were reclassified into OID.\n(d)\nLong-term debt includes foreign currency borrowings which are used in net investment hedges; the related carrying values as of December 31, 2025 and December 31, 2024 were $\n879\n million and $\n777\n million, respectively.\nPfizer Inc.\n2025 Form 10-K\n81\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe following summarizes cumulative basis adjustments to our long-term debt in fair value hedges:\nAs of December 31, 2025\nAs of December 31, 2024\nCumulative Amount of Fair\nValue Hedging Adjustment\nIncrease/(Decrease) to\nCarrying Amount\nCumulative Amount of Fair\nValue Hedging Adjustment Increase/(Decrease) to\nCarrying Amount\n(MILLIONS)\nCarrying Amount of Hedged Assets/Liabilities\n(a)\nActive\nHedging\nRelationships\nDiscontinued Hedging Relationships\nCarrying Amount of Hedged Assets/Liabilities\n(a)\nActive Hedging Relationships\nDiscontinued Hedging Relationships\nLong-term debt\n$\n7,110\n\n$\n(\n163\n)\n$\n821\n\n$\n7,154\n\n$\n(\n384\n)\n$\n891\n\n(a)\nCarrying amounts exclude the cumulative amount of fair value hedging adjustments.\nF. Credit Risk\nOn an ongoing basis, we monitor and review the credit risk of our customers, financial institutions and exposures in our investment portfolio.\nWith respect to our trade accounts receivable, we monitor the creditworthiness of our customers to which we grant credit in the normal course of business. In general, there is no requirement for collateral from customers. For additional information on our trade accounts receivable and allowance for credit losses, see\nNote 1\nG\n. A significant portion of our trade accounts receivable balances are due from wholesalers and governments. For additional information on our trade accounts receivables with significant customers, see\nNote 17C\n.\nWith respect to our investments, we monitor concentrations of credit risk associated with government, government agency, and corporate issuers of securities. Investments are placed in instruments that are investment grade and are primarily short in duration. Exposure limits are established to limit a concentration with any single credit counterparty. As of December 31, 2025, the largest investment exposures in our portfolio consisted primarily of U.S. government money market funds, as well as sovereign debt instruments issued by the U.S., Japan, Canada, the U.K., and Germany.\nWith respect to our derivative financial instrument agreements with financial institutions, we do not expect to incur a significant loss from failure of any counterparty. Derivative financial instruments are executed under International Swaps and Derivatives Association master agreements with credit-support annexes that contain zero threshold provisions requiring collateral to be exchanged daily depending on levels of exposure. As a result, there are no significant concentrations of credit risk with any individual financial institution. As of December 31, 2025, the aggregate fair value of these derivative financial instruments that are in a net payable position was $\n938\n\u00a0million, for which we have posted collateral of $\n944\n million with a corresponding amount reported in\n Short-term investments\n. As of December 31, 2025, the aggregate fair value of our derivative financial instruments that are in a net receivable position was $\n128\n\u00a0million, for which we have received collateral of $\n154\n\u00a0million with a corresponding amount reported in\n Short-term borrowings, including current portion of long-term debt.\nNote 8.\nOther Financial Information\nA. Inventories\nThe following summarizes the components of\nInventories\n:\nAs of December 31,\n(MILLIONS)\n2025\n2024\nFinished goods\n$\n4,113\n\n$\n3,775\n\nWork-in-process\n5,634\n\n6,101\n\nRaw materials and supplies\n907\n\n976\n\nInventories\n$\n10,654\n\n$\n10,851\n\nNoncurrent inventories not included above\n(a)\n$\n2,370\n\n$\n2,663\n\n(a)\nIncluded in\nOther noncurrent assets\n. Based on our current estimates and assumptions, there are no recoverability issues for these amounts.\nB. Other Current Liabilities\nOther current liabilities\n include, among other things, amounts payable to BioNTech for the gross profit split for Comirnaty, which totaled $\n911\n\u00a0million as of December 31, 2025 and $\n1.3\n\u00a0billion as of December 31, 2024.\nC. Supplier Finance Program Obligation\nWe maintain voluntary supply chain finance agreements with several participating financial institutions. Under these agreements, participating suppliers may voluntarily elect to sell their accounts receivable with Pfizer to these financial institutions. Our suppliers negotiate their financing agreements directly with the respective financial institutions and we are not a party to these agreements. We have no economic interest in our suppliers\u2019 decision to participate and we pay the financial institutions the stated amount of confirmed invoices on the original maturity dates, which is generally within\n90\n to\n120\n days of the invoice date. The agreements with the financial institutions do not require Pfizer to provide assets pledged as security or other forms of guarantees for the supplier finance program. All outstanding amounts related to suppliers participating in such financing arrangements are recorded within\ntrade payables\n in our consolidated balance sheet.\nPfizer Inc.\n2025 Form 10-K\n82\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe following summarizes the changes in outstanding trade payables to suppliers who participate in these financing arrangements:\n(MILLIONS)\n2025\n2024\nConfirmed obligations outstanding, beginning\n$\n688\n\n$\n791\n\nInvoices confirmed during the year\n2,115\n\n2,638\n\nConfirmed invoices paid during the year\n(\n2,229\n)\n(\n2,740\n)\nConfirmed obligations outstanding, ending\n$\n574\n\n$\n688\n\nNote 9.\nProperty, Plant and Equipment, Net\nThe following summarizes the components of\nProperty, plant and equipment, net\n:\n\nUseful Lives\nAs of December 31,\n(MILLIONS)\n(Years)\n2025\n2024\nLand\n-\n$\n299\n\n$\n291\n\nBuildings\n33\n-\n50\n9,744\n\n9,036\n\nMachinery and equipment\n8\n-\n20\n16,140\n\n15,095\n\nFurniture, fixtures and other\n3\n-\n12.5\n5,714\n\n5,516\n\nConstruction in progress\n-\n4,805\n\n4,937\n\n36,702\n\n34,876\n\nLess: Accumulated depreciation\n17,386\n\n16,483\n\nProperty, plant and equipment, net\n$\n19,317\n\n$\n18,393\n\nThe following provides\nProperty, plant and equipment, net\n by geographic area:\n\nAs of December 31,\n(MILLIONS)\n2025\n2024\nUnited States\n$\n9,680\n\n$\n9,748\n\nInternational:\nDeveloped Markets\n8,180\n\n7,187\n\nEmerging Markets\n1,457\n\n1,458\n\nProperty, plant and equipment, net\n$\n19,317\n\n$\n18,393\n\nNote 10.\nIdentifiable Intangible Assets, Net and Goodwill\nA. Identifiable Intangible Assets\nThe following summarizes the components of\nIdentifiable intangible assets\n:\n\nAs of December 31, 2025\nAs of December 31, 2024\n(MILLIONS)\nGross\nCarrying\nAmount\nAccumulated\nAmortization\nIdentifiable\nIntangible\nAssets, Net\nGross\nCarrying\nAmount\nAccumulated\nAmortization\nIdentifiable\nIntangible\nAssets, Net\nFinite-lived intangible assets\nDeveloped technology rights\n(a)\n$\n100,630\n\n$\n(\n70,172\n)\n$\n30,458\n\n$\n99,397\n\n$\n(\n65,044\n)\n$\n34,353\n\nBrands\n(b)\n1,035\n\n(\n1,035\n)\n\u2014\n\n1,277\n\n(\n992\n)\n285\n\nLicensing agreements and other\n2,341\n\n(\n1,289\n)\n1,052\n\n2,724\n\n(\n1,513\n)\n1,210\n\n104,006\n\n(\n72,496\n)\n31,510\n\n103,397\n\n(\n67,549\n)\n35,848\n\nIndefinite-lived intangible assets\nIPR&D\n(c)\n21,760\n\n21,760\n\n18,893\n\n18,893\n\nLicensing agreements and other\n(d)\n460\n\n460\n\n670\n\n670\n\n22,221\n\n22,221\n\n19,563\n\n19,563\n\nIdentifiable intangible assets\n$\n126,227\n\n$\n(\n72,496\n)\n$\n53,731\n\n$\n122,961\n\n$\n(\n67,549\n)\n$\n55,411\n\n(a)\nThe increase in the gross carrying amount primarily reflect the transfer of $\n600\n million and $\n590\n million from IPR&D to developed technology rights for Padcev and talazoparib (Talzenna), respectively, as well as the impact of foreign exchange, partially offset by impairments of $\n560\n million (see\nNote 4\n).\n(b)\nThe decrease in the gross carrying amount reflects an impairment of $\n240\n million (see\nNote 4\n).\n(c)\nThe increase in the gross carrying amount primarily reflects $\n8.0\n billion for the acquisition of Metsera (see\nNote 2A\n), partially offset by impairments of $\n3.9\n billion (see\nNote 4\n) and the transfers to developed technology rights noted above.\n(d)\nThe decrease in the gross carrying amount reflects an impairment of $\n210\n million (see\nNote 4\n).\n\nDeveloped Technology Rights\u2013\u2013\nDeveloped technology rights represent the cost for developed technology acquired from third parties and can include the right to develop, use, market, sell and/or offer for sale the product, compounds and intellectual property that we have acquired with respect to products, compounds and/or processes that have been completed. We possess a well-diversified portfolio of hundreds of developed technology rights across therapeutic categories, representing our commercialized products. The significant components of developed\nPfizer Inc.\n2025 Form 10-K\n83\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\ntechnology rights are the following: Nurtec ODT/Vydura, Padcev, Adcetris, Velsipity, Xtandi, Braftovi/Mektovi and Talzenna. Also included in this category are the post-approval milestone payments made under our alliance agreements for certain prescription pharmaceutical products.\nIPR&D\u2013\u2013\nIPR&D assets represent the acquisition date fair value (less impairments) of R&D assets acquired through business combinations that have not yet received regulatory approval in a major market\nwhich could include both new investigational products and additional indications for in-line products.\n The significant components of IPR&D are sigvotatug vedotin, MET-097i+MET-233i combination, MET-097i monotherapy, disitamab vedotin and osivelotor. IPR&D assets are required to be classified as indefinite-lived assets until the successful completion or the abandonment of the associated R&D effort. Accordingly, during the development period after the date of acquisition, these assets are not amortized until approval is obtained in a major market, typically either the U.S. or the EU, or in a series of other countries, subject to certain specified conditions and management judgment. At that time, we will determine the useful life of the asset, reclassify it out of IPR&D and begin amortization. If the associated R&D effort is abandoned, the related IPR&D assets will be written-off, and we will record an impairment charge. IPR&D assets are high-risk assets, given the uncertain nature of R&D. Accordingly, IPR&D assets may become impaired and/or be written-off in the future.\nLicensing Agreements\u2013\u2013\nLicensing agreements for developed technology and for technology in development primarily relate to out-licensing arrangements acquired from third parties, including from acquisitions. These assets represent the cost for the license, where we acquired the right to future royalties and/or milestones upon development or commercialization by the licensing partners. Accordingly, during the development period after the date of acquisition, each of these assets is classified as indefinite-lived intangible assets and will not be amortized until approval is obtained in a major market. At that time we will determine the useful life of the asset, reclassify the respective licensing arrangement asset to finite-lived intangible asset and begin amortization. If the development effort is abandoned, the related licensing asset will be written-off, and we will record an impairment charge.\nAmortization\u2013\u2013\nThe weighted-average life for our total finite-lived intangible assets and for the largest component, developed technology rights, is approximately\n10\n years.\nThe following provides the expected annual amortization expense:\n(MILLIONS)\n2026\n2027\n2028\n2029\n2030\nAmortization expense\n$\n4,677\n\n$\n4,087\n\n$\n3,723\n\n$\n2,775\n\n$\n2,732\n\nB. Goodwill\nThe following summarizes the changes in the carrying amount of\nGoodwill\n(a):\n(MILLIONS)\n2025\n2024\nBalance, beginning\n$\n68,527\n\n$\n67,783\n\nAdditions\n(b)\n2,163\n\n1,022\n\nImpact of foreign exchange and other\n574\n\n(\n278\n)\nBalance, ending\n$\n71,264\n\n$\n68,527\n\n(a)\nAs a result of the organizational changes to the commercial structure within the Biopharma operating segment effective in the first quarter of 2025 (see\nNote 17A\n), our goodwill was reallocated among impacted reporting units. We completed the re-allocation during the first quarter of 2025 and concluded that none of our goodwill was impaired\n.\nAll goodwill continues to be assigned within the Biopharma reportable segment.\n(b)\nAdditions in 2025 primarily represent our acquisition of Metsera and in 2024 primarily represent measurement period adjustments related to our acquisition of Seagen (see\nNote 2A\n).\n\nNote 11.\nPension and Postretirement Benefit Plans and Defined Contribution Plans\nThe majority of our employees worldwide are eligible for retirement benefits provided through defined benefit pension plans, defined contribution plans or both. In the U.S., we sponsor both IRC-qualified and supplemental (non-qualified) defined benefit plans and defined contribution plans. A qualified plan meets the requirements of certain sections of the IRC, and, generally, contributions to qualified plans are tax deductible. A qualified plan typically provides benefits to a broad group of employees with restrictions on discriminating in favor of highly compensated employees with regard to coverage, benefits and contributions. A supplemental (non-qualified) plan provides additional benefits to certain employees. In addition, we provide medical insurance benefits to certain retirees and their eligible dependents through our postretirement plans.\nPfizer Inc.\n2025 Form 10-K\n84\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nA. Components of Net Periodic Benefit Cost/(Credit) and Changes in Other Comprehensive Income/(Loss)\nPension Plans\nPostretirement Plans\nU.S.\nInternational\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\nService cost\n$\n\u2014\n\n$\n\u2014\n\n$\n\u2014\n\n$\n104\n\n$\n87\n\n$\n85\n\n$\n17\n\n$\n14\n\n$\n12\n\nInterest cost\n529\n\n553\n\n589\n\n293\n\n312\n\n287\n\n25\n\n23\n\n21\n\nExpected return on plan assets\n(\n735\n)\n(\n832\n)\n(\n778\n)\n(\n329\n)\n(\n322\n)\n(\n304\n)\n(\n57\n)\n(\n51\n)\n(\n44\n)\nAmortization of prior service cost/(credit)\n\u2014\n\n1\n\n2\n\n4\n\n4\n\n\u2014\n\n(\n88\n)\n(\n113\n)\n(\n119\n)\nActuarial (gains)/losses\n(a)\n(\n59\n)\n396\n\n(\n410\n)\n(\n201\n)\n33\n\n102\n\n18\n\n144\n\n51\n\nCurtailments\n\u2014\n\n\u2014\n\n\u2014\n\n(\n10\n)\n(\n4\n)\n(\n2\n)\n(\n70\n)\n\u2014\n\n(\n12\n)\nSpecial termination benefits\n\u2014\n\n\u2014\n\n6\n\n2\n\n10\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\nNet periodic benefit cost/(credit) reported in income\n(\n265\n)\n117\n\n(\n592\n)\n(\n137\n)\n120\n\n169\n\n(\n155\n)\n18\n\n(\n90\n)\nCost/(credit) reported in\nOther comprehensive income/(loss)\n\u2014\n\n(\n1\n)\n(\n2\n)\n12\n\n(\n4\n)\n31\n\n140\n\n(\n80\n)\n128\n\nCost/(credit) recognized in\nComprehensive income\n$\n(\n265\n)\n$\n116\n\n$\n(\n594\n)\n$\n(\n126\n)\n$\n117\n\n$\n199\n\n$\n(\n15\n)\n$\n(\n62\n)\n$\n38\n\n(a)\nReflects: (i) actuarial remeasurement net gains in 2025 primarily due to favorable asset performance for the U.S. pension plans and increases in discount rates for the international pension plans, partially offset by unfavorable asset performance for the international pension plans and decreases in discount rates for the U.S. and postretirement plans, (ii) actuarial remeasurement net losses in 2024, primarily due to unfavorable asset performance for the U.S. pension plans and decreases in discount rates for the international pension plans, partially offset by increases in discount rates for the U.S. pension plans and favorable asset performance for the international pension plans and postretirement plans, and (iii) actuarial remeasurement net gains in 2023, primarily due to favorable asset performance in the U.S. and increases in discount rates for the international plans, partially offset by unfavorable asset performance for certain international plans.\nThe components of net periodic benefit cost/(credit) other than the service cost component are included in\nOther (income)/deductions\u2013\u2013net\n(see\nNote 4\n).\nB. Actuarial Assumptions\nPension Plans\nPostretirement Plans\nU.S.\nInternational\nYear Ended December 31,\n(PERCENTAGES)\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\nWeighted-average assumptions used to determine net periodic benefit cost:\nDiscount rate:\nPension plans/postretirement plans\n5.7\n\n%\n5.4\n\n%\n5.4\n\n%\n5.5\n\n%\n5.4\n\n%\n5.5\n\n%\nInterest cost\n3.9\n\n%\n4.4\n\n%\n3.8\n\n%\nService cost\n3.6\n\n%\n3.9\n\n%\n3.6\n\n%\nExpected return on plan assets\n7.7\n\n%\n8.0\n\n%\n7.5\n\n%\n4.9\n\n%\n5.1\n\n%\n4.5\n\n%\n7.8\n\n%\n8.0\n\n%\n7.5\n\n%\nRate of compensation increase\n(a)\n3.1\n\n%\n3.2\n\n%\n3.0\n\n%\nWeighted-average assumptions used to determine benefit obligations at fiscal year-end:\nDiscount rate\n5.6\n\n%\n5.7\n\n%\n5.4\n\n%\n4.7\n\n%\n4.1\n\n%\n4.4\n\n%\n5.2\n\n%\n5.5\n\n%\n5.4\n\n%\nRate of compensation increase\n(a)\n\n3.1\n\n%\n3.1\n\n%\n3.2\n\n%\n(a)\nThe rate of compensation increase is not used to determine the net periodic benefit cost and benefit obligation for the U.S. pension plans as these plans are frozen.\nThe assumptions are reviewed at least annually. We revise these assumptions based on an annual evaluation of long-term trends as well as market conditions that may have an impact on the cost of providing retirement benefits.\nThe weighted-average discount rate for our U.S. defined benefit plans is set with reference to the prevailing market rate of a portfolio of high-quality fixed income investments, rated AA/Aa or better that reflect the rates at which the pension benefits could be effectively settled. For our international plans, the discount rates are set by benchmarking against investment grade corporate bonds rated AA/Aa or better, including, when there is sufficient data, a yield curve approach. These rate determinations are made consistent with local requirements. Overall, the yield curves used to measure the benefit obligations at year-end 2025 resulted in lower discount rates for the U.S. pension plans and higher discount rates for the international pension plans as compared to the prior year.\nPfizer Inc.\n2025 Form 10-K\n85\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe following provides the healthcare cost trend rate assumptions for our U.S. postretirement benefit plans:\nAs of December 31,\n2025\n2024\nHealthcare cost trend rate assumed for next year\n8.0\n\n%\n7.5\n\n%\nRate to which the cost trend rate is assumed to decline\n4.0\n\n%\n4.0\n\n%\nYear that the rate reaches the ultimate trend rate\n2050\n\n2047\nC. Obligations and Funded Status\nThe following provides: (i) an analysis of the changes in our benefit obligations, plan assets and funded status of our benefit plans, (ii) the funded status recognized in our consolidated balance sheets and (iii) the pre-tax components of cumulative amounts recognized in\nAccumulated other comprehensive loss\n:\n\nPension Plans\n\u00a0Postretirement Plans\n\nU.S.\nInternational\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2025\n2024\n2025\n2024\nChange in benefit obligation\n(a)\nBenefit obligation, beginning\n$\n9,781\n\n$\n10,756\n\n$\n7,363\n\n$\n7,292\n\n$\n486\n\n$\n450\n\nService cost\n\u2014\n\n\u2014\n\n104\n\n87\n\n17\n\n14\n\nInterest cost\n529\n\n553\n\n293\n\n312\n\n25\n\n23\n\nEmployee contributions\n\u2014\n\n\u2014\n\n17\n\n16\n\n75\n\n61\n\nPlan amendments\n\u2014\n\n\u2014\n\n16\n\n\u2014\n\n\u2014\n\n(\n193\n)\nChanges in actuarial assumptions and other\n(b)\n146\n\n(\n299\n)\n(\n480\n)\n119\n\n64\n\n199\n\nForeign exchange impact\n1\n\n(\n1\n)\n409\n\n(\n106\n)\n1\n\n(\n2\n)\nAcquisitions/divestitures and other, net\n\u2014\n\n\u2014\n\n95\n\n77\n\n\u2014\n\n\u2014\nCurtailments and special termination benefits\n\u2014\n\n\u2014\n\n(\n12\n)\n7\n\n(\n18\n)\n\u2014\n\nSettlements\n(\n40\n)\n(\n756\n)\n(\n283\n)\n(\n69\n)\n\u2014\n\n\u2014\n\nBenefits paid\n(\n828\n)\n(\n473\n)\n(\n403\n)\n(\n371\n)\n(\n89\n)\n(\n67\n)\nBenefit obligation, ending\n(a)\n9,589\n\n9,781\n\n7,118\n\n7,363\n\n561\n\n486\n\nChange in plan assets\nFair value of plan assets, beginning\n9,948\n\n10,935\n\n6,696\n\n6,552\n\n736\n\n636\n\nActual return on plan assets\n941\n\n138\n\n51\n\n408\n\n103\n\n105\n\nCompany contributions\n104\n\n103\n\n137\n\n164\n\n(\n12\n)\n\u2014\n\nEmployee contributions\n\u2014\n\n\u2014\n\n17\n\n16\n\n75\n\n61\n\nForeign exchange impact\n\u2014\n\n\u2014\n\n298\n\n(\n65\n)\n\u2014\n\n\u2014\n\nAcquisitions/divestitures and other, net\n\u2014\n\n\u2014\n95\n\n62\n\n\u2014\n\n\u2014\n\nSettlements\n(\n40\n)\n(\n756\n)\n(\n283\n)\n(\n69\n)\n\u2014\n\n\u2014\n\nBenefits paid\n(\n828\n)\n(\n473\n)\n(\n403\n)\n(\n371\n)\n(\n89\n)\n(\n67\n)\nFair value of plan assets, ending\n10,124\n\n9,948\n\n6,606\n\n6,696\n\n814\n\n736\n\nFunded status\n$\n535\n\n$\n167\n\n$\n(\n512\n)\n$\n(\n667\n)\n$\n253\n\n$\n251\n\nAmounts recorded in our consolidated balance sheet:\nNoncurrent assets\n$\n1,254\n\n$\n934\n\n$\n856\n\n$\n728\n\n$\n334\n\n$\n330\n\nCurrent liabilities\n(\n87\n)\n(\n90\n)\n(\n34\n)\n(\n31\n)\n(\n6\n)\n(\n5\n)\nNoncurrent liabilities\n(\n632\n)\n(\n678\n)\n(\n1,334\n)\n(\n1,364\n)\n(\n75\n)\n(\n74\n)\nFunded status\n$\n535\n\n$\n167\n\n$\n(\n512\n)\n$\n(\n667\n)\n$\n253\n\n$\n251\n\nPre-tax components of cumulative amounts recognized in\nAccumulated other comprehensive loss\n:\nPrior service (costs)/credits\n$\n(\n2\n)\n$\n(\n2\n)\n$\n(\n73\n)\n$\n(\n61\n)\n$\n225\n\n$\n365\n\nInformation related to the funded status of pension plans with an ABO in excess of plan assets\n(c)\n:\nFair value of plan assets\n$\n1\n\n$\n\u2014\n$\n459\n\n$\n456\n\nABO\n720\n\n768\n\n1,746\n\n1,752\n\nInformation related to the funded status of pension plans with a PBO in excess of plan assets\n(c)\n:\nFair value of plan assets\n$\n1\n\n$\n\u2014\n$\n821\n\n$\n690\n\nPBO\n720\n\n768\n\n2,189\n\n2,084\n\n(a)\nFor the U.S. pension plans, the benefit obligation is both the PBO and ABO as these plans are frozen and future benefit accruals no longer increase with future compensation increases. For the international pension plans, the benefit obligation is the PBO. The ABO for our international pension plans was $\n6.8\n billion in 2025 and $\n7.1\n billion in 2024. For the postretirement plans, the benefit obligation is the ABO.\nPfizer Inc.\n2025 Form 10-K\n86\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\n(b)\nFor 2025, primarily includes actuarial gains resulting from increases in discount rates for the international pension plans, partially offset by actuarial losses resulting from decreases in discount rates for the U.S. pension and postretirement plans. For 2024, primarily includes actuarial losses resulting from decreases in discount rates for the international pension plans, and other assumption changes for the postretirement plans, largely offset by actuarial gains resulting from increases in discount rates for the U.S. pension plans.\n(c)\nOur U.S. qualified plans, U.S. postretirement plan and many of our larger funded international plans were overfunded as of December 31, 2025.\nD. Plan Assets\nThe following provides the components of plan assets:\nAs of December 31, 2025\nAs of December 31, 2024\n\nFair Value\nFair Value\n(MILLIONS EXCEPT TARGET ALLOCATION PERCENTAGE)\nTarget Allocation Percentage\nTotal\nLevel 1\nLevel\n2\nLevel 3\nAssets Measured at NAV\n(a)\nTotal\nLevel 1\nLevel\n\u00a02\nLevel 3\nAssets Measured at NAV\n(a)\nU.S. pension plans\nCash and cash equivalents\n0-12%\n$\n682\n\n$\n66\n\n$\n615\n\n$\n\u2014\n\n$\n\u2014\n\n$\n533\n\n$\n56\n\n$\n477\n\n$\n\u2014\n\n$\n\u2014\n\nEquity securities:\n10-40%\nGlobal equity securities\n1,396\n\n1,396\n\n\u2014\n\n\u2014\n\n\u2014\n\n1,341\n\n1,341\n\n\u2014\n\u2014\n\n\u2014\n\nEquity commingled funds\n216\n\n\u2014\n\n216\n\n\u2014\n\n\u2014\n\n97\n\n\u2014\n\n97\n\n\u2014\n\n\u2014\n\nFixed income securities:\n45-75%\nCorporate debt securities\n2,660\n\n4\n\n2,656\n\n\u2014\n\n\u2014\n\n2,878\n\n4\n\n2,874\n\n\u2014\n\u2014\nGovernment and agency obligations\n(b)\n2,090\n\n\u2014\n\n2,090\n\n\u2014\n\n\u2014\n\n2,059\n\n\u2014\n\n2,059\n\n\u2014\n\n\u2014\n\nFixed income commingled funds\n43\n\n\u2014\n\n13\n\n\u2014\n\n30\n\n42\n\n\u2014\n\n12\n\n\u2014\n\n30\n\nOther investments:\n10-40%\nPartnership investments\n(c)\n2,735\n\n\u2014\n\n\u2014\n\n\u2014\n\n2,735\n\n2,665\n\n\u2014\n\n\u2014\n\n\u2014\n\n2,665\n\nInsurance contracts\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\n\u2014\n\u2014\n\n\u2014\n\nOther commingled funds\n(d)\n302\n\n\u2014\n\n\u2014\n\n\u2014\n\n302\n\n333\n\n\u2014\n\n\u2014\n\u2014\n\n333\n\nTotal\n100\n\n%\n$\n10,124\n\n$\n1,466\n\n$\n5,591\n\n$\n\u2014\n\n$\n3,066\n\n$\n9,948\n\n$\n1,401\n\n$\n5,518\n\n$\n\u2014\n\n$\n3,028\n\nInternational pension plans\nCash and cash equivalents\n0-10%\n$\n346\n\n$\n108\n\n$\n237\n\n$\n\u2014\n\n$\n\u2014\n\n$\n310\n\n$\n138\n\n$\n172\n\n$\n\u2014\n\n$\n\u2014\n\nEquity securities:\n10-20%\nEquity commingled funds\n714\n\n\u2014\n\n686\n\n\u2014\n\n28\n\n704\n\n\u2014\n\n619\n\n\u2014\n\n86\n\nFixed income securities:\n40-65%\nCorporate debt securities\n347\n\n\u2014\n\n342\n\n5\n\n\u2014\n\n638\n\n\u2014\n\n633\n\n5\n\n\u2014\n\nGovernment and agency obligations\n(b)\n1,041\n\n\u2014\n\n1,041\n\n\u2014\n\n\u2014\n\n960\n\n1\n\n960\n\n\u2014\n\n\u2014\n\nFixed income commingled funds\n1,773\n\n\u2014\n\n1,225\n\n\u2014\n\n548\n\n1,750\n\n\u2014\n\n1,064\n\n\u2014\n\n686\n\nOther investments:\n20-40%\nPartnership investments\n(c)\n148\n\n\u2014\n\n2\n\n\u2014\n\n146\n\n147\n\n\u2014\n\n2\n\n\u2014\n\n145\n\nInsurance contracts\n1,033\n\n\u2014\n\n46\n\n988\n\n\u2014\n\n1,221\n\n\u2014\n\n45\n\n1,176\n\n\u2014\n\nOther\n(d)\n1,204\n\n14\n\n185\n\n263\n\n741\n\n965\n\n35\n\n147\n\n252\n\n531\n\nTotal\n100\n\n%\n$\n6,606\n\n$\n123\n\n$\n3,763\n\n$\n1,256\n\n$\n1,464\n\n$\n6,696\n\n$\n174\n\n$\n3,642\n\n$\n1,433\n\n$\n1,447\n\nU.S. postretirement plans\n(e)\nCash and cash equivalents\n0-5%\n$\n10\n\n$\n\u2014\n\n$\n10\n\n$\n\u2014\n\n$\n\u2014\n\n$\n12\n\n$\n\u2014\n$\n12\n\n$\n\u2014\n\n$\n\u2014\n\nInsurance contracts\n95-100%\n804\n\n\u2014\n\n804\n\n\u2014\n\n\u2014\n\n724\n\n\u2014\n724\n\n\u2014\n\n\u2014\n\nTotal\n100\n\n%\n$\n814\n\n$\n\u2014\n\n$\n814\n\n$\n\u2014\n\n$\n\u2014\n\n$\n736\n\n$\n\u2014\n$\n736\n\n$\n\u2014\n\n$\n\u2014\n\n(a)\nCertain investments that are measured at NAV per share (or its equivalent) have not been classified in the fair value hierarchy. The NAV amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension benefits plan assets.\n(b)\nGovernment and agency obligations are inclusive of repurchase agreements.\n(c)\nMainly includes investments in private equity, private debt and real estate.\n(d)\nMostly includes investments in hedge funds, real estate and infrastructure.\n(e)\nReflects postretirement plan assets, which support our U.S. retiree medical plans.\nPfizer Inc.\n2025 Form 10-K\n87\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe following provides an analysis of the changes in our investments valued using significant unobservable inputs:\nInternational Pension Plans\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\nFair value, beginning\n$\n1,433\n\n$\n1,340\n\nActual return on plan assets:\nAssets held, ending\n(\n21\n)\n8\n\nAssets sold during the period\n4\n\n\u2014\n\nPurchases, sales, and settlements, net\n(\n219\n)\n(\n79\n)\nTransfer into/(out\u00a0of) Level 3\n(\n1\n)\n168\n\nExchange rate changes\n59\n\n(\n5\n)\nFair value, ending\n$\n1,256\n\n$\n1,433\n\nThe following methods and assumptions were used to estimate the fair value of our pension and postretirement plans\u2019 assets:\n\u2022\nCash and cash equivalents: Level 1 investments may include cash, cash equivalents and foreign currency valued using exchange rates. Level 2 investments may include short-term investment funds which are commingled funds priced at a stable NAV by the administrator of the funds.\n\u2022\nEquity securities: Level 1 investments may include individual securities that are valued at the closing price or last trade reported on the major market on which they are traded. Level 1 and Level 2 investments may include commingled funds that have a readily determinable fair value based on quoted prices on an exchange or a published NAV derived from the quoted prices in active markets of the underlying securities. Level 3 investments may include individual securities that are unlisted, delisted, suspended, or illiquid and are typically valued using their last available price.\n\u2022\nFixed income securities: Level 1 investments may include individual securities that are valued at the closing price or last trade reported on the major market on which they are traded. Level 2 investments may include commingled funds that have a readily determinable fair value based on observable prices of the underlying securities. Level 2 investments may include corporate bonds, government and government agency obligations and other fixed income securities valued using bid evaluation pricing models or quoted prices of securities with similar characteristics. Level 3 investments may include securities that are valued using alternative pricing sources, such as investment managers or brokers, which use proprietary pricing models that incorporate unobservable inputs.\n\u2022\nOther investments: Level 1 investments may include individual securities that are valued at the closing price or last trade reported on the major market on which they are traded. Level 2 investments may include insurance contracts which invest in interest bearing cash, U.S. government securities and corporate debt instruments. Level 3 investments may include securities or insurance contracts that are valued using alternative pricing sources, such as investment managers or brokers, which use proprietary pricing models that incorporate unobservable inputs.\nEquity securities, Fixed income securities and Other investments may each be combined into commingled funds. Most commingled funds are valued to reflect the interest in the fund based on the reported year-end NAV. Partnership and Other investments are valued based on year-end reported NAV (or its equivalent), with adjustments as appropriate for lagged reporting of up to three months.\nCertain investments are authorized to include derivatives, such as equity or bond futures, swaps, options and currency futures or forwards for managing risks and exposures.\nGlobal plan assets are managed with the objective of generating returns that will enable the plans to meet their future obligations, while seeking to manage net periodic benefit costs and cash contributions over the long-term. We utilize long-term asset allocation ranges in the management of our plans\u2019 invested assets. Our long-term return expectations are developed based on a diversified, global investment strategy that takes into account historical experience, as well as the impact of portfolio diversification, active portfolio management, and our view of current and future economic and financial market conditions. As market conditions and other factors change, we may adjust our targets accordingly and our asset allocations may vary from the target allocations.\nE. Cash Flows\nIt is our practice to fund amounts for our qualified pension plans that are at least sufficient to meet the minimum requirements set forth in applicable employee benefit laws and local tax laws.\nPfizer Inc.\n2025 Form 10-K\n88\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe following provides the expected future cash flow information related to our benefit plans:\n\nPension Plans\nPostretirement Plans\n(MILLIONS)\nU.S.\nInternational\nExpected employer contributions:\n2026\n$\n88\n\n$\n168\n\n$\n46\n\nExpected benefit payments:\n2026\n$\n849\n\n$\n410\n\n$\n49\n\n2027\n844\n\n413\n\n55\n\n2028\n817\n\n412\n\n58\n\n2029\n807\n\n427\n\n59\n\n2030\n782\n\n440\n\n60\n\n2031\u20132035\n3,513\n\n2,324\n\n284\n\nThe above table reflects the total U.S. and international plan benefits projected to be paid from the plans or from our general assets under the current actuarial assumptions used for the calculation of the benefit obligation.\nF. Defined Contribution Plans\nWe have defined contribution plans in the U.S. and other countries. For the majority of the U.S. defined contribution plans, employees may contribute a portion of their salaries and bonuses to the plans, and we match, in cash, a portion of the employee contributions. We also offer a Retirement Savings Contribution which is an annual employer contribution in the U.S. and Puerto Rico. We recorded charges related to the employer contributions to global defined contribution plans of $\n854\n million in 2025, $\n800\n million in 2024 and $\n843\n million in 2023.\nNote 12.\nEquity\nA. Common Stock Purchases\nWe have authorization to purchase our common stock through privately negotiated transactions or in the open market as circumstances and prices warrant. Purchased shares under a share-purchase plan, which is authorized by our BOD, are available for general corporate purposes. In December 2018, the BOD authorized a $\n10\n billion share repurchase program to be utilized over time and share repurchases commenced thereunder in the first quarter of 2019.\nWe did\nnot\n purchase shares of our common stock under our publicly announced share-purchase plan in any of the periods presented. Our remaining share-purchase authorization was\u00a0$\n3.3\n\u00a0billion as of December 31, 2025.\nB. Preferred Stock\nWe have\n27\n million authorized shares of preferred stock without par value;\nno\n shares of preferred stock were issued or outstanding as of December 31, 2025 and 2024.\nNote 13.\nShare-Based Payments\nOur compensation programs can include share-based payment awards with their value determined by reference to the fair value of our shares and can consist of the grant of shares or options to acquire shares or similar arrangements. The level of our share-based awards are based on competitive survey data and/or industry peer groups used for compensation purposes, and is allocated between different long-term incentive award vehicles, generally in the form of Total Shareholder Return Units (TSRUs), Restricted Stock Units (RSUs), Portfolio Performance Shares (PPSs), Performance Share Awards (PSAs) and stock options, as determined by the Compensation Committee of our BOD.\nThe Amended and Restated 2019 Stock Plan (2019 Plan) replaced and superseded the original 2019 Stock Plan (Original Plan). The 2019 Plan provides for\n320\n million shares to be authorized for grants plus any shares remaining available for grant under the Original Plan as of April 25, 2024 (the carryforward shares). Awards granted under the 2019 Plan reduce the shares available for future grants as follows: RSUs count as\nthree\n shares, and PPSs and PSAs count as\nsix\n shares (three shares times 2 (the maximum potential payout)), while TSRUs and stock options count as\none\n share. As of December 31, 2025,\n313\n million shares were available for future award. Although not required to do so, we have used authorized and unissued shares and, to a lesser extent, treasury stock to satisfy our obligations under these programs.\nPfizer Inc.\n2025 Form 10-K\n89\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nA summary of the awards and valuation details:\nAwarded to\nTerms\nValuation\nRecognition and Presentation\nTotal Shareholder Return Units (TSRUs)\nSenior and other key management and select  employees\n\u2022\nEntitle the holder to receive shares of our common stock with a value equal to the difference between the defined settlement price and the grant price, plus the dividend equivalents accumulated during the\nfive\n or\nseven\n-year term, if and to the extent the total value is positive.\n\u2022\nSettlement price is the average closing price of our common stock during the\n20\n trading days ending on the fifth or seventh anniversary of the grant, as applicable; the grant price is the closing price of our common stock on the date of the grant.\n\u2022\nAutomatically settle on the fifth or seventh anniversary of the grant but vest on the third anniversary of the grant. Certain 2022 and 2023 five-year grants were modified during 2024 (for active colleagues) to vest on the fifth anniversary and settle on the seventh anniversary of the grant.\n\u2022\nEligible holders can convert their TSRUs, when vested, into Profit Units (PTUs) with a conversion ratio based on a calculation used to determine the shares at TSRU settlement. The PTUs are entitled to earn Dividend Equivalent Units (DEUs), and the PTUs and DEUs will be settled in our common stock on the TSRUs\u2019 original settlement date and will be subject to the terms and conditions of the original grant including forfeiture provisions.\nAs of the grant date using a Monte Carlo simulation model\nAmortized on a straight-line basis over the vesting term into\nCost of sales\n,\nSelling, informational and administrative expenses\n, and/or\nResearch and development expenses\n, as appropriate.\nRestricted Stock Units (RSUs)\nSelect employees\n\u2022\nEntitle the holder to receive a specified number of shares of our common stock upon vesting. Dividend equivalents earned over the vesting period are reinvested into additional RSUs.\n\u2022\nRSUs generally vest and distribute one-third per year for\nthree\n years on each of the three annual anniversaries from the date of grant assuming continuous service from the grant date.\nAs of the grant date using the closing price of our common stock\nAmortized on an accelerated attribution method over the vesting term into\nCost of sales\n,\nSelling, informational and administrative expenses\n, and/or\nResearch and development expenses\n, as appropriate.\nPortfolio Performance Shares (PPSs)\nSelect employees\n\u2022\nEntitle the holder to receive, at the end of the performance period, shares of our common stock based on performance during the performance period. Dividend equivalents earned during the performance period are accumulated and applied to the shares earned and are delivered in shares with the underlying award.\n\u2022\nFor PPSs granted, the awards vest on the third anniversary of the grant assuming continuous service from the grant date and the number of shares paid, if any, depends on the achievement of predetermined goals related to Pfizer\u2019s long-term product portfolio during a\nthree\n-year performance period from the year of the grant date, as applicable.\n\u2022\nThe number of shares that may be earned, excluding those from dividend equivalents, ranges from\n0\n% to\n200\n% of the initial award depending on goal achievement over the performance period. Irrespective of performance, the payout is capped at target if the Total Shareholder Return (TSR) for the performance period is negative.\nAs of the grant date using the intrinsic value method using the closing price of our common stock\nAmortized on a straight-line basis over the vesting term into\nCost of sales\n,\nSelling, informational and administrative expenses\n and/or\nResearch and development expenses\n, as appropriate, and adjusted each reporting period, as necessary, to reflect changes in the price of our common stock, the number of shares that are probable of being earned, and management\u2019s assessment of the probability that the specified performance criteria will be achieved.\nPerformance Share Awards (PSAs)\nSenior and other key management\n\u2022\nEntitle the holder to receive, at the end of the\nthree\n-year performance period, shares of our common stock (retirees and former colleagues) earned, if any, or an equal value in cash (active colleagues), including dividend equivalents on shares earned, dependent upon the achievement of predetermined goals related to\ntwo\n measures:\na.\nAdjusted diluted EPS goals, set annually;\nb.\nModified by relative TSR as compared to the NYSE ARCA Pharmaceutical Index (DRG Index or DRG) over a\nthree\n-year period.\n\u2022\nPSAs vest on the third anniversary of the grant assuming continuous service from the grant date. PSA awards granted in 2022 and 2023 were modified during 2024 (for active colleagues) to vest on the fifth anniversary of the grant and to have a\nthree\n-year performance period ending on December 31 prior to vesting.\n\u2022\nThe range of payout is\n0\n% to\n200\n% of target shares, excluding those earned from dividend equivalents, based on financial performance and modified by relative TSR. The payout is capped at target if the TSR for the performance period is negative.\nAs of the grant date using the intrinsic value method using the closing price of our common stock\nAmortized on a straight-line basis over the vesting term into\nCost of sales\n,\nSelling, informational and administrative expenses\n, and/or\nResearch and development expenses\n, as appropriate, and adjusted each reporting period, as necessary, to reflect changes in the price of our common stock, the number of shares that are probable of being earned and management\u2019s assessment of the probability that the specified performance criteria will be achieved.\nPfizer Inc.\n2025 Form 10-K\n90\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nAwarded to\nTerms\nValuation\nRecognition and Presentation\nStock Options\nSelect employees\n\u2022\nEntitle the holder to purchase a specified number of shares of our common stock at a price per share equal to the closing market price of our common stock on the date of grant, for a period of time after vesting.\n\u2022\nSince 2016, only a limited set of non-U.S. employees received stock option grants.\nNo\n stock options were awarded to senior and other key management in any period presented.\n\u2022\nStock options vest on the third anniversary of the grant assuming continuous service from the grant date and have a contractual term of\n10\n years.\nAs of the grant date using the Black-Scholes-Merton option-pricing model\nAmortized on a straight-line basis over the vesting term into\nCost of sales\n,\nSelling, informational and administrative expenses\n, and/or\nResearch and development expenses\n, as appropriate.\nThe following provides data related to all TSRU, RSU, PPS, PSA and stock option activity:\n(MILLIONS, EXCEPT FAIR VALUE OF SHARES VESTED PER TSRU AND STOCK OPTION AND YEARS)\nTSRUs\nRSUs\nPPSs\nPSAs\nStock Options\nYear Ended December 31,\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\nTotal fair value of shares vested\n(a)\n$\n6.05\n$\n7.05\n$\n10.71\n$\n313\n$\n469\n$\n505\n$\n118\n$\n176\n$\n116\n$\n\u2014\n\n$\n\u2014\n\n$\n58\n$\n2.86\n$\n4.08\n$\n7.88\nTotal intrinsic value of options exercised or share units converted\n$\n93\n$\n29\n$\n755\n$\n349\n$\n123\n$\n250\n$\n\u2014\n\n$\n\u2014\n\n$\n102\nCash received upon exercise\n$\n\u2014\n\n$\n\u2014\n\n$\n181\nTax benefits realized from exercise\n$\n\u2014\n\n$\n\u2014\n\n$\n20\nCompensation cost recognized/(reduced), pre-tax\n$\n234\n$\n246\n$\n244\n$\n393\n$\n394\n$\n437\n$\n131\n$\n252\n$(\n138\n)\n$\n32\n$(\n21\n)\n$(\n5\n)\n$\n5\n$\n4\n$\n4\nTotal compensation cost related to nonvested awards not yet recognized, pre-tax\n$\n245\n$\n270\n$\n192\n$\n224\n$\n214\n$\n212\n$\n119\n$\n107\n$\n81\n$\n34\n$\n40\n$\n22\n$\n4\n$\n4\n$\n4\nWeighted-average period over which cost is expected to be recognized (years)\n1.7\n2.1\n1.7\n1.8\n1.8\n1.8\n1.8\n1.9\n1.8\n1.9\n1.7\n1.8\n1.7\n1.7\n1.7\n(a)\nWeighted-average GDFV per TSRUs and stock options.\nTotal share-based payment expense was $\n799\n million, $\n877\n million and $\n525\n million in 2025, 2024 and 2023, respectively. Tax benefit for\nshare-based compensation expense was $\n140\n million, $\n165\n million and $\n93\n million in 2025, 2024 and 2023, respectively.\nThe table above excludes total expense due to the modification for share-based awards in connection with our cost reduction/productivity initiatives, which was\nzero\n for 2025 and not significant for prior years presented and is recorded in\nRestructuring charges and certain acquisition-related costs\n (see\nNote 3\n). Amounts capitalized as part of inventory cost were not significant for any period presented.\nSummary of the weighted-average assumptions used in the valuation of TSRUs and stock options:\nTSRUs\nStock Options\nYear Ended December 31,\n2025\n2024\n2023\n2025\n2024\n2023\nExpected dividend yield\n(based on a constant dividend yield during the expected term)\n6.47\n\n%\n6.06\n\n%\n3.80\n\n%\n6.47\n\n%\n6.06\n\n%\n3.80\n\n%\nRisk-free interest rate\n (based on interpolated yield on U.S. Treasury zero-coupon issues)\n4.06\n\n%\n4.31\n\n%\n4.08\n\n%\n4.12\n\n%\n4.32\n\n%\n4.03\n\n%\nExpected stock price volatility\n (based on implied volatility, after consideration of historical volatility)\n22.39\n\n%\n26.56\n\n%\n23.23\n\n%\n22.38\n\n%\n26.56\n\n%\n23.23\n\n%\nTSRUs contractual/stock options expected term, years\n (based on historical exercise and post-vesting termination patterns for stock options)\n5.00\n5.15\n5.15\n6.25\n6.50\n6.50\nSummary of all TSRU, RSU, PPS and PSA activity during 2025 (with the shares granted representing the maximum award that could be achieved for PPSs and PSAs):\nTSRUs\nRSUs\nPPSs\nPSAs\nTSRUs\nPer TSRU, Weighted Average\nShares\n\u00a0Weighted Avg. GDFV per share\nShares\nWeighted Avg. Intrinsic Value per share\nShares\nWeighted Avg. Intrinsic Value per share\n(Thousands)\nGDFV\nGrant Price\n(Thousands)\n(Thousands)\n(Thousands)\nNonvested, December 31, 2024\n84,902\n$\n9.63\n\n$\n35.87\n\n25,561\n$\n32.67\n\n26,156\n$\n26.53\n\n5,521\n$\n26.53\n\nGranted\n51,148\n6.05\n\n25.74\n\n18,295\n25.68\n\n14,538\n25.73\n\n2,749\n25.75\n\nVested\n(\n6,818\n)\n11.89\n\n45.82\n\n(\n11,930\n)\n34.95\n\n(\n4,479\n)\n26.41\n\n\u2014\n\n\u2014\n\nReinvested dividend equivalents\n2,132\n\n24.23\n\nForfeited\n(\n8,227\n)\n7.33\n\n29.05\n\n(\n2,496\n)\n27.26\n\n(\n4,322\n)\n25.31\n\n(\n429\n)\n25.66\n\nNonvested, December 31, 2025\n121,004\n$\n8.14\n\n$\n31.46\n\n31,562\n$\n27.61\n\n31,893\n$\n24.90\n\n7,840\n$\n24.90\n\nPfizer Inc.\n2025 Form 10-K\n91\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nSummary of TSRU and PTU information as of December 31, 2025\n(a), (b)\n:\nTSRUs\n(Thousands)\nPTUs\n(Thousands)\nWeighted-Average\nGrant\u00a0Price\nPer TSRU\nWeighted-Average\nRemaining Contractual Term\n(Years)\nAggregate Intrinsic Value\n(Millions)\n(c)\nTSRUs Outstanding\n164,736\n\n$\n32.62\n\n2.5\n$\n80\n\nTSRUs Vested\n43,732\n\n35.84\n\n0.6\n6\n\nTSRUs Expected to vest\n(d)\n115,666\n\n$\n31.53\n\n3.2\n71\n\nOutstanding PTUs converted from TSRUs exercised\n42\n\n0.2\n$\n1\n\n(a)\nIn 2025, we settled\n46,110,528\n TSRUs with a weighted-average grant price of $\n31.29\n per unit.\n(b)\nIn 2025,\n20,968\n TSRUs with a weighted-average grant price of $\n31.31\n per unit were converted into\n1,620\n PTUs.\n(c)\nMarket price of our underlying common stock less grant price plus dividend equivalents to date.\n(d)\nThe number of TSRUs expected to vest takes into account an estimate of expected forfeitures\n.\nSummary of all stock option activity during 2025:\nShares\n(Thousands)\nWeighted-Average\nExercise Price\nPer Share\nWeighted-Average\nRemaining Contractual Term\n(Years)\nAggregate\nIntrinsic Value\n(a)\n(Millions)\nOutstanding, December 31, 2024\n19,621\n\n$\n33.24\n\nGranted\n2,038\n\n25.75\n\nExercised\nForfeited\n(\n178\n)\n26.75\n\nExpired\n(\n13,666\n)\n32.87\n\nOutstanding, December 31, 2025\n7,815\n\n32.09\n\n5.9\n$\n\u2014\n\nVested and expected to vest, December 31, 2025\n(b)\n7,624\n\n32.24\n\n5.8\n\u2014\n\nExercisable, December 31, 2025\n4,196\n\n$\n35.05\n\n3.6\n$\n\u2014\n\n(a)\nMarket price of our underlying common stock less exercise price.\n(b)\nThe number of options expected to vest takes into account an estimate of expected forfeitures.\nNote 14.\nEarnings Per Common Share Attributable to Pfizer Inc. Common Shareholders\nThe following presents the detailed calculation of EPS:\n\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nEPS Numerator\n\nIncome from continuing operations attributable to Pfizer Inc. common shareholders\n$\n7,745\n\n$\n8,020\n\n$\n2,134\n\nDiscontinued operations\u2013\u2013net of tax\n25\n\n11\n\n(\n15\n)\nNet income attributable to Pfizer Inc. common shareholders\n$\n7,771\n\n$\n8,031\n\n$\n2,119\n\nEPS Denominator\n\nWeighted-average common shares outstanding\u2013\u2013Basic\n5,683\n\n5,664\n\n5,643\n\nCommon-share equivalents\n31\n\n36\n\n66\n\nWeighted-average common shares outstanding\u2013\u2013Diluted\n5,713\n\n5,700\n\n5,709\n\nAnti-dilutive common stock equivalents\n(a)\n11\n\n24\n\n9\n\n(a)\nThese common stock equivalents were outstanding for the periods presented, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.\nNote 15.\nLeases\nWe lease real estate, fleet, and equipment for use in our operations. Our leases generally have lease terms of\n1\n to\n30\n years, some of which include options to terminate or extend leases for up to\n5\n to\n10\n years or on a month-to-month basis. We include options that are reasonably certain to be exercised as part of the determination of lease terms. We may negotiate termination clauses in anticipation of any changes in market conditions, but generally these termination options have not been exercised. Residual value guarantees are generally not included within our operating leases with the exception of some fleet leases. In addition to base rent payments, the leases may require us to pay directly for taxes and other non-lease components, such as insurance, maintenance and other operating expenses, which may be dependent on usage or vary month-to-month. Variable lease payments amounted to $\n453\n million in 2025, $\n517\n million in 2024 and $\n444\n million in 2023. We elected the practical expedient to not separate non-lease components from lease components in calculating the amounts of ROU assets and lease liabilities for all underlying asset classes.\nWe determine if an arrangement is a lease at inception of the contract and we perform the lease classification test as of the lease commencement date. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date\nPfizer Inc.\n2025 Form 10-K\n92\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nbased on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.\nFor operating leases, the ROU assets and liabilities in our consolidated balance sheets follows:\nAs of December 31,\n(MILLIONS)\nBalance Sheet Classification\n2025\n2024\nROU assets\nOther noncurrent assets\n$\n2,213\n\n$\n2,289\n\nLease liabilities (short-term)\nOther current liabilities\n330\n\n356\n\nLease liabilities (long-term)\nOther noncurrent liabilities\n2,291\n\n2,286\n\nComponents of total lease cost includes:\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nOperating lease cost\n$\n498\n\n$\n683\n\n$\n863\n\nVariable lease cost\n453\n\n517\n\n444\n\nSublease income\n(\n26\n)\n(\n23\n)\n(\n24\n)\nTotal lease cost\n$\n924\n\n$\n1,177\n\n$\n1,283\n\nOther supplemental information follows:\nAs of December 31,\n(MILLIONS)\n2025\n2024\nOperating leases\nWeighted-Average Remaining Contractual Lease Term (Years)\n10.5\n10.2\nWeighted-Average Discount Rate\n3.8\n\n%\n3.7\n\n%\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nCash paid for amounts included in the measurement of lease liabilities:\nOperating cash flows from operating leases\n$\n471\n\n$\n601\n\n$\n744\n\n(Gains)/losses on sale and leaseback transactions, net\n(\n53\n)\n29\n\n(\n49\n)\nThe following reconciles the undiscounted cash flows for the first five years and total of the remaining years to the operating lease liabilities recorded in the consolidated balance sheet as of December 31, 2025:\n(MILLIONS)\nPeriod\nOperating Lease Liabilities\nNext one year\n(a)\n$\n417\n\n1-2 years\n408\n\n2-3 years\n334\n\n3-4 years\n282\n\n4-5 years\n234\n\nThereafter\n1,524\n\nTotal undiscounted lease payments\n3,199\n\nLess: Imputed interest\n579\n\nPresent value of minimum lease payments\n2,620\n\nLess: Current portion\n330\n\nNoncurrent portion\n$\n2,291\n\n(a)\nReflects lease payments due within 12 months subsequent to the balance sheet date.\n\nNote 16.\nContingencies and Certain Commitments\nWe and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business, including tax and legal contingencies, guarantees and indemnifications. The following outlines our legal contingencies, guarantees and indemnifications. For a discussion of our tax contingencies, see\nNote 5D\n.\nA. Legal Proceedings\nOur legal contingencies include, but are not limited to, the following:\n\u2022\nPatent litigation, which typically involves challenges to the coverage and/or validity of patents on various products, processes or dosage forms. An adverse outcome could result in loss of patent protection for a product, a significant loss of revenues from a product or impairment of the value of associated assets. We are the plaintiff in the majority of these actions.\n\u2022\nProduct liability and other product-related litigation related to current or former products, which can include personal injury, consumer fraud, off-label promotion, securities, antitrust and breach of contract claims, among others, and often involves highly complex issues relating to\nPfizer Inc.\n2025 Form 10-K\n93\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nmedical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual, provable injury and other matters.\n\u2022\nCommercial and other asserted or unasserted matters, which can include acquisition-, licensing-, intellectual property-, collaboration- or co-promotion-related and product-pricing claims and environmental claims and proceedings, and can involve complexities that will vary from matter to matter.\n\u2022\nGovernment investigations, which often are related to the extensive regulation of pharmaceutical companies by national, state and local government agencies in the U.S. and in other jurisdictions.\nCertain of these contingencies could result in increased expenses and/or losses, including damages, royalty payments, fines and/or civil penalties, which could be substantial, and/or criminal charges.\nWe believe that our claims and defenses in matters in which we are a defendant are substantial, but litigation is inherently unpredictable and excessive verdicts do occur. We do not believe that any of these matters will have a material adverse effect on our financial position. However, we could incur judgments, enter into settlements or revise our expectations regarding the outcome of matters, which could have a material adverse effect on our results of operations and/or our cash flows in the period in which the amounts are accrued or paid.\nWe have accrued for losses that are both probable and reasonably estimable. Substantially all of our contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex. Consequently, we are unable to estimate the range of reasonably possible loss in excess of amounts accrued. Our assessments, which result from a complex series of judgments about future events and uncertainties, are based on estimates and assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.\nAmounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. For proceedings under environmental laws to which a governmental authority is a party, we have adopted a disclosure threshold of $\n1\n million in potential or actual governmental monetary sanctions.\nThe principal pending matters to which we are a party are discussed below. In determining whether a pending matter is a principal matter, we consider both quantitative and qualitative factors to assess materiality, such as, among others, the amount of damages and the nature of other relief sought, if specified; our view of the merits of the claims and of the strength of our defenses; whether the action purports to be, or is, a class action and, if not certified, our view of the likelihood that a class will be certified by the court; the jurisdiction in which the proceeding is pending; whether related actions have been transferred to multidistrict litigation; any experience that we or, to our knowledge, other companies have had in similar proceedings; whether disclosure of the action would be important to a reader of our financial statements, including whether disclosure might change a reader\u2019s judgment about our financial statements in light of all of the information that is available to the reader; the potential impact of the proceeding on our reputation; and the extent of public interest in the matter. In addition, with respect to patent matters in which we are the plaintiff, we consider, among other things, the financial significance of the product protected by the patent(s) at issue. Some of the matters discussed below include those which management believes that the likelihood of possible loss in excess of amounts accrued is remote.\nA1. Legal Proceedings\u2013\u2013Patent Litigation\nWe are involved in suits relating to our patents (or those of our collaboration/licensing partners to which we have licenses or co-promotion rights), including but not limited to, those discussed below. We face claims by generic drug manufacturers that patents covering our products (or those of our collaboration/licensing partners to which we have licenses or co-promotion rights and to which we may or may not be a party), processes or dosage forms are invalid and/or do not cover the product of the generic drug manufacturer. Also, counterclaims, as well as various independent actions, have been filed alleging that our assertions of, or attempts to enforce, patent rights with respect to certain products constitute unfair competition and/or violations of antitrust laws. In addition to the challenges to the U.S. patents that are discussed below, patent rights to certain of our products or those of our collaboration/licensing partners are being challenged in various other jurisdictions. Some of our collaboration or licensing partners face challenges to the validity of their patent rights in non-U.S. jurisdictions. For example, in April 2022, the U.K. High Court issued a judgment finding invalid a BMS patent related to Eliquis due to expire in 2026, and this judgment is now final. Additional challenges are pending in other jurisdictions. Also, in July 2022, CureVac AG (CureVac) brought a patent infringement action against BioNTech and certain of its subsidiaries in the German Regional Court alleging that Comirnaty infringes certain German utility model patents and certain expired and unexpired European patents. In December 2025, this action was settled on terms not material to Pfizer. Additional challenges involving Comirnaty patents may be filed against us and/or BioNTech in other jurisdictions in the future. Adverse decisions in these matters could have a material adverse effect on our results of operations.\n\nWe are also party to patent damages suits in various jurisdictions pursuant to which generic drug manufacturers, payors, governments or other parties are seeking damages from us for allegedly causing delay of generic entry.\nWe also are often involved in other proceedings, such as\n inter partes\nreview, post-grant review, re-examination or opposition proceedings, before the U.S. Patent and Trademark Office, the European Patent Office, or other foreign counterparts, as well as court proceedings relating to our intellectual property or the intellectual property rights of others, including challenges to such rights initiated by us. Also, if one of our patents (or one of our collaboration/licensing partner\u2019s patents) is found to be invalid by such proceedings, generic or competitive products could be introduced into the market resulting in the erosion of sales of our existing products. For example, several of the patents in our pneumococcal vaccine portfolio have been challenged in\ninter partes\n review and post-grant review proceedings in the U.S. Patent and Trademark Office, as well as outside the U.S.\n\nThe invalidation of any of the patents in our pneumococcal portfolio could potentially allow additional competitor vaccines, if approved, to enter the marketplace earlier than anticipated. In the event that any of the patents are found valid and infringed, a competitor\u2019s vaccine, if approved, might be prohibited from entering the market or a competitor might be required to pay us a royalty.\nWe are also subject to patent litigation pursuant to which one or more third parties seek damages and/or injunctive relief to compensate for alleged infringement of its patents by our commercial or other activities. If one of our marketed products (or a product of our collaboration/licensing partners to which we have licenses or co-promotion rights) is found to infringe valid patent rights of a third party, such third party may\nPfizer Inc.\n2025 Form 10-K\n94\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nbe awarded significant damages or royalty payments, or we may be prevented from further sales of that product. Such damages may be enhanced as much as three-fold if we or one of our subsidiaries is found to have willfully infringed valid patent rights of a third party.\nActions In Which We Are The Plaintiff\nVyndaqel-Vyndamax (tafamidis/tafamidis meglumine)\nBeginning in June 2023, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of tafamidis capsules (61 mg) or tafamidis meglumine capsules (20 mg), challenging some or all of the patents listed in the FDA\u2019s Orange Book for Vyndamax (tafamidis) and Vyndaqel (tafamidis meglumine). Scripps Research Institute (Scripps) owns the composition of matter patent and the method of treatment patents covering the products, and Pfizer is the exclusive licensee. Pfizer separately owns the crystalline form patent. Beginning in August 2023, we and Scripps brought patent infringement actions against the generic filers in the U.S. District Court for the District of Delaware, asserting the validity and infringement of the patents in suit. Pfizer is the sole plaintiff in actions that assert only the infringement and validity of the crystalline form patent.\nOxbryta (voxelotor)\nIn January 2024, Zydus Pharmaceuticals (USA) Inc., Zydus Lifesciences Limited, and Zydus Worldwide DMCC (collectively, Zydus) and MSN Pharmaceuticals Inc. and MSN Laboratories Private Ltd. (collectively, MSN) separately notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of voxelotor tablets, challenging some of the patents listed in the FDA\u2019s Orange Book for Oxbryta (voxelotor tablets in 300 mg and 500 mg strengths and/or for oral suspension) on non-infringement grounds. In March 2024, we filed patent infringement actions against both generic filers in the U.S. District Court for the District of Delaware, asserting the validity and infringement of the challenged patents. Zydus and MSN have not challenged our composition of matter patents or method of treatment patents for Oxbryta.\nNurtec (rimegepant)\nIn April 2024, Rubicon Research Private Limited, Teva Pharmaceuticals, Inc., Changzhou Pharmaceutical Factory, Natco Pharma Limited and Natco Pharma, Inc., MSN, Aurobindo Pharma Limited, Apitoria Pharma Private Limited and Aurobindo Pharma U.S.A. Inc. (collectively, Aurobindo) and Apotex Inc. and Apotex Corp. (collectively, Apotex) notified us that they had filed ANDAs with the FDA seeking approval to market generic versions of rimegepant orally disintegrating tablets, claiming noninfringement and/or challenging the validity of some or all of the patents listed in the FDA\u2019s Orange Book for Nurtec (rimegepant orally disintegrating tablets Eq 75 mg base). In May 2024, we filed patent infringement actions against all the generic filers in the U.S. District Court for the District of Delaware.\nXtandi (enzalutamide)\nBeginning in August 2024, several generic companies notified us and Astellas that they had filed ANDAs with the FDA seeking approval to market generic versions of Xtandi, challenging some or all of the patents listed in the FDA\u2019s Orange Book for Xtandi. Beginning in August 2024, we and Astellas brought patent infringement actions against the generic filers in the U.S. District Court for the District of New Jersey, asserting the validity and infringement of the patents in suit.\nActions in Which We are the Defendant\nComirnaty (tozinameran)\nIn August 2022, ModernaTX, Inc. (ModernaTX) and Moderna US, Inc. (Moderna) sued Pfizer, BioNTech, BioNTech Manufacturing GmbH and BioNTech US Inc. in the U.S. District Court for the District of Massachusetts, alleging that Comirnaty infringes\nthree\n U.S. patents. In its complaint, Moderna stated that it is seeking damages for alleged infringement occurring after March 7, 2022. In March 2024, the U.S. Patent Office Patent Trial & Appeal Board instituted a review of\ntwo\n of the\nthree\n patents in suit. In March 2025, the U.S. Patent Office issued a decision holding that the\ntwo\n Moderna patents were invalid.\nIn August 2022, ModernaTX filed a patent infringement action in Germany against Pfizer and certain subsidiary companies, as well as BioNTech and certain subsidiary companies, alleging that Comirnaty infringes\ntwo\n European patents. In March 2025, a German court found the asserted patents infringed; no decision on invalidity was rendered. In September 2022, ModernaTX filed patent infringement actions in the U.K. and in the Netherlands against Pfizer and certain subsidiary companies, as well as BioNTech and certain subsidiary companies, on the same\ntwo\n European patents. In its complaints, ModernaTX stated that it is seeking damages for alleged infringement occurring after March 7, 2022. In November 2023,\none\n of the European patents was revoked by the European Patent Office and, in January 2026, that decision became final. In December 2023, the other European patent was declared invalid by a court in the Netherlands (the invalidity decision is limited to the Netherlands). In July 2024, the U.K. court revoked\none\n patent, ruling that it was invalid, and held that the other patent was valid and infringed. In July 2025, the U.K. Court of Appeal affirmed the lower court ruling that the other patent is valid and infringed. ModernaTX has also filed additional patent infringement actions against Pfizer and BioNTech in certain other ex-U.S. jurisdictions.\nIn April 2023, Arbutus Biopharma Corporation (Arbutus) and Genevant Sciences GmbH (Genevant) filed a complaint in the U.S. District Court for the District of New Jersey against Pfizer and BioNTech alleging that Comirnaty and its manufacture infringe\nfive\n U.S. patents, and seeking unspecified monetary damages.\nIn April 2024, GlaxoSmithKline Biologicals SA and GlaxoSmithKline LLC (collectively, GSK Group) sued Pfizer and Pharmacia & Upjohn Company LLC, BioNTech, BioNTech Manufacturing GmbH and BioNTech US Inc. in the U.S. District Court for the District of Delaware, alleging that Comirnaty infringes\nfive\n U.S. patents and seeking unspecified money damages. In August 2024, GSK Group filed an amended complaint alleging that Comirnaty infringes\nthree\n additional U.S. patents. In July 2025, GSK Group sued several Pfizer and BioNTech entities in Ireland, alleging that Comirnaty infringes\nthree\n European patents. Also in July 2025, GSK Group sued several Pfizer and BioNTech entities in the Unified Patent Court, alleging that Comirnaty infringes\ntwo\n European patents, both of which are at issue in the Irish lawsuit. Additional patent infringement actions between GSK Group and Pfizer/BioNTech are ongoing in certain other ex-U.S. jurisdictions.\nIn January 2025, Promosome LLC filed a complaint in the Unified Patent Court, Local Division Munich, against Pfizer and BioNTech and certain of their subsidiaries alleging that Comirnaty infringes a European patent that is in force only in France, Germany and Sweden, and seeking unspecified monetary damages in connection with the manufacture and sale of Comirnaty in France, Germany and Sweden.\nIn January 2026, Bayer Cropscience LLC, Monsanto Company and Monsanto Technology, LLC filed a complaint in the U.S. District Court for the District of Delaware against Pfizer and BioNTech, BioNTech Manufacturing GmbH and BioNTech US Inc, alleging that Comirnaty infringes a U.S. patent issued in 2010 and seeking unspecified money damages.\nPfizer Inc.\n2025 Form 10-K\n95\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nPaxlovid\nIn June 2022, Enanta Pharmaceuticals, Inc. (Enanta) filed a complaint in the U.S. District Court for the District of Massachusetts against Pfizer alleging that the active ingredient in Paxlovid, nirmatrelvir, infringes a U.S.\n patent issued in June 2022, and seeking unspecified monetary damages. In December\n\n2024, the District Court issued an order granting Pfizer\u2019s motion for summary judgment, finding Enanta\u2019s patent invalid.\nIn August 2025, Enanta filed a patent infringement complaint in the Unified Patent Court, Local Division Munich, against Pfizer alleging that the active ingredient in Paxlovid, nirmatrelvir, infringes a European\npatent issued in August 2025, and seeking unspecified monetary damages.\nMatters Involving Pfizer and its Collaboration/Licensing Partners\nComirnaty (tozinameran)\nIn July 2022, Pfizer, BioNTech and BioNTech Manufacturing GmbH filed a declaratory judgment complaint against CureVac in the U.S. District Court for the District of Massachusetts seeking a judgment of non-infringement for\nthree\n U.S. patents relating to Comirnaty. In May 2023, the case was transferred to the U.S. District Court for the Eastern District of Virginia. Also in May 2023, CureVac asserted that Comirnaty infringes the\nthree\n patents that were the subject of our declaratory judgment complaint, and in May and July 2023, CureVac asserted that Comirnaty infringes a number of additional U.S. patents. In August 2025, the parties signed a settlement agreement and license agreement, and the case was dismissed with prejudice.\nOrgovyx (relugolix)\nBeginning in January 2025, several generic companies notified us that they had filed ANDAs with the FDA seeking approval to sell a generic form of relugolix (Orgovyx), and challenging one or more patents listed in the FDA\u2019s Orange Book for Orgovyx which are licensed to Pfizer. In March 2025, we, along with Sumitomo Pharma Switzerland GBBH, Sumitomo Pharma America, Inc., Takeda and Takeda Pharmaceuticals International AG jointly filed separate patent infringement actions in the U.S. District Court for the District of Delaware against the generic companies, asserting the infringement and validity of the patents in suit.\nEliquis (apixaban)\nIn December 2025, Bristol Myers Squibb Co. and Pfizer filed a patent infringement action in the U.S. District Court for the District of Delaware against Azurity Pharmaceuticals, Inc. (Azurity), alleging that Azurity\u2019s proposed generic apixaban product would infringe a formulation patent expiring in 2031.\nA2. Legal Proceedings\u2013\u2013Product Litigation\nWe are defendants in numerous cases, including but not limited to those discussed below, related to our pharmaceutical and other products. Plaintiffs in these cases seek damages and other relief on various grounds for alleged personal injury and economic loss.\nAsbestos\nNumerous lawsuits against Pfizer and certain of its previously owned subsidiaries are pending in various federal and state courts seeking damages for alleged personal injury from exposure to products allegedly containing asbestos and other allegedly hazardous materials sold by Pfizer and certain of its previously owned subsidiaries.\n\nIn addition, between 1967 and 1982, Warner-Lambert owned American Optical Corporation (American Optical), which manufactured and sold respiratory protective devices and asbestos safety clothing. In connection with the sale of American Optical in 1982, Warner-Lambert agreed to indemnify the purchaser for certain liabilities, including certain asbestos-related and other claims. Warner-Lambert was acquired by Pfizer in 2000 and is a wholly owned subsidiary of Pfizer. Warner-Lambert is actively engaged in the defense of, and will continue to explore various means of resolving, these claims.\nThere also\u00a0are a small number of lawsuits pending in various federal and state courts seeking damages for alleged exposure to asbestos in facilities owned or formerly owned by Pfizer or its subsidiaries.\nDocetaxel\nA number of lawsuits have been filed against Hospira and Pfizer in various federal and state courts alleging that plaintiffs who were treated with Docetaxel developed permanent hair loss. Hospira is a wholly-owned subsidiary that we acquired in September 2015. The significant majority of the cases also name other defendants, including the manufacturer of the branded product, Taxotere. Plaintiffs seek compensatory and punitive damages. Additional lawsuits have been filed in which plaintiffs allege they developed blocked tear ducts following their treatment with Docetaxel.\nIn 2016, the federal cases were transferred for coordinated pre-trial proceedings to an MDL in the U.S. District Court for the Eastern District of Louisiana. All of the hair loss cases filed against Hospira and Pfizer have been dismissed with prejudice. In 2022, the eye injury cases were transferred for coordinated pre-trial proceedings to an MDL in the U.S. District Court for the Eastern District of Louisiana.\nZantac\nA number of lawsuits have been filed against Pfizer in various federal and state courts alleging that plaintiffs developed various types of cancer, or face an increased risk of developing cancer, purportedly as a result of the ingestion of Zantac. The significant majority of these cases also name other defendants that have historically manufactured and/or sold Zantac. Pfizer has not sold Zantac since 2006, and only sold an OTC version of the product. In 2006, Pfizer sold the consumer business that included its Zantac OTC rights to Johnson & Johnson and transferred the assets and liabilities related to Zantac OTC to Johnson & Johnson in connection with the sale. Plaintiffs in these cases seek compensatory and punitive damages.\nIn February 2020, the federal actions were transferred for coordinated pre-trial proceedings to an MDL in the U.S. District Court for the Southern District of Florida (the Federal MDL Court). Plaintiffs in the MDL filed against Pfizer and many other defendants a master personal injury complaint, a consolidated consumer class action complaint alleging, among other things, claims under consumer protection statutes of all 50 states, and a medical monitoring complaint seeking to certify medical monitoring classes under the laws of 13 states. In December 2022, the Federal MDL Court granted defendants\u2019 Daubert motions to exclude plaintiffs\u2019 expert testimony and motion for summary judgment on general causation, which has resulted in the dismissal of all complaints in the litigation. Plaintiffs have appealed the Federal MDL Court\u2019s rulings.\nPfizer Inc.\n2025 Form 10-K\n96\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nIn addition, (i) Pfizer has received service of Canadian class action complaints naming Pfizer and other defendants, and seeking compensatory and punitive damages for personal injury and economic loss, allegedly arising from the defendants\u2019 sale of Zantac in Canada; and (ii) the State of New Mexico and the Mayor and City Council of Baltimore separately filed civil actions against Pfizer and many other defendants in state courts, alleging various state statutory and common law claims in connection with the defendants\u2019 alleged sale of Zantac in those jurisdictions. In April 2021, a Judicial Council Coordinated Proceeding was created in the Superior Court of California in Alameda County to coordinate personal injury actions against Pfizer and other defendants filed in California state court. Coordinated proceedings have also been created in other state courts. The large majority of the state court cases have been filed in the Superior Court of Delaware in New Castle County.\nMany of these Zantac-related cases have been outstanding for a number of years. From time to time, Pfizer has explored and will continue to explore opportunistic settlements of these matters. As of February 2026, Pfizer had settled, or entered into definitive agreements or agreements-in-principle to settle, subject to certain conditions, a substantial majority of the cases filed in state courts in which the plaintiff alleges use of a Pfizer product. The remaining unresolved state court cases continue in various state courts.\nChantix\nBeginning in August 2021, a number of putative class actions have been filed against Pfizer in various U.S. federal courts following Pfizer\u2019s voluntary recall of Chantix due to the presence of a nitrosamine, N-nitroso-varenicline. Plaintiffs assert that they suffered economic harm purportedly as a result of purchasing Chantix or generic varenicline medicines sold by Pfizer. Plaintiffs seek to represent nationwide and state-specific classes and seek various remedies, including damages and medical monitoring. In December 2022, the federal actions were transferred for coordinated pre-trial proceedings to an MDL in the U.S. District Court for the Southern District of New York.\nDepo-Provera\nA number of lawsuits have been filed against Pfizer and certain subsidiaries in various federal and state courts alleging that plaintiffs who used the injectable version of Depo-Provera (active ingredient medroxyprogesterone acetate, or MPA) for contraception developed meningioma. Some cases also name other defendants, including the manufacturers of generic versions of injectable MPA for contraception. Plaintiffs assert claims against Pfizer relating to both Depo-Provera and generic MPA products, and seek compensatory and punitive damages. In February 2025, the federal cases were transferred for coordinated pre-trial proceedings to an MDL in the U.S. District Court for the Northern District of Florida. Also, in 2025, coordinated proceedings were established in several U.S. state jurisdictions, including California, Connecticut, Delaware, and New York.\nA3. Legal Proceedings\u2013\u2013Commercial and Other Matters\nMonsanto-Related Matters\nIn 1997, Monsanto Company (Former Monsanto) contributed certain chemical manufacturing operations and facilities to a newly formed corporation, Solutia Inc. (Solutia), and spun off the shares of Solutia. In 2000, Former Monsanto merged with Pharmacia & Upjohn Company to form Pharmacia. Pharmacia then transferred its agricultural operations to a newly created subsidiary, named Monsanto Company (New Monsanto), which it spun off in a two-stage process that was completed in 2002. Pharmacia was acquired by Pfizer in 2003 and is a wholly owned subsidiary of Pfizer.\nIn connection with its spin-off that was completed in 2002, New Monsanto assumed, and agreed to indemnify Pharmacia for, any liabilities related to Pharmacia\u2019s former agricultural business. New Monsanto has defended and/or is defending Pharmacia in connection with various claims and litigation arising out of, or related to, the agricultural business, and has been indemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.\nIn connection with its spin-off in 1997, Solutia assumed, and agreed to indemnify Pharmacia for, liabilities related to Former Monsanto\u2019s chemical businesses. As the result of its reorganization under Chapter 11 of the U.S. Bankruptcy Code, Solutia\u2019s indemnification obligations relating to Former Monsanto\u2019s chemical businesses are primarily limited to sites that Solutia has owned or operated. In addition, in connection with its spin-off that was completed in 2002, New Monsanto assumed, and agreed to indemnify Pharmacia for, any liabilities primarily related to Former Monsanto\u2019s chemical businesses, including, but not limited to, any such liabilities that Solutia assumed. Solutia\u2019s and New Monsanto\u2019s assumption of, and agreement to indemnify Pharmacia for, these liabilities apply to pending actions and any future actions related to Former Monsanto\u2019s chemical businesses in which Pharmacia is named as a defendant, including, without limitation, actions asserting environmental claims, including alleged exposure to polychlorinated biphenyls. Solutia and/or New Monsanto are defending Pharmacia in connection with various claims and litigation arising out of, or related to, Former Monsanto\u2019s chemical businesses, and have been indemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation. In 2018, Bayer AG acquired Monsanto Company (New Monsanto), which is now a subsidiary of Bayer AG. Since the acquisition, New Monsanto has continued to defend and indemnify Pharmacia for these liabilities.\nEnvironmental Matters\nIn 2009, as part of our acquisition of Wyeth, we assumed responsibility for environmental remediation at the Wyeth Holdings LLC (formerly known as Wyeth Holdings Corporation and American Cyanamid Company) discontinued industrial chemical facility in Bound Brook, New Jersey. Since that time, we have executed or have become a party to a number of administrative settlement agreements, orders on consent, and/or judicial consent decrees, with the U.S. Environmental Protection Agency, the New Jersey Department of Environmental Protection and/or federal and state natural resource trustees to perform remedial design, removal and remedial actions, and related environmental remediation activities, and to resolve alleged damages to natural resources, at the Bound Brook facility. We have accrued for the currently estimated costs of these activities.\nWe are also party to a number of other proceedings brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and other state, local or foreign laws in which the primary relief sought is the cost of past and/or future remediation.\nContracts with Iraqi Ministry of Health\nIn 2017, a number of U.S. service members, civilians, and their families brought a complaint in the U.S. District Court for the District of Columbia against a number of pharmaceutical and medical devices companies, including Pfizer and certain of its subsidiaries, alleging that the defendants violated the U.S. Anti-Terrorism Act. The complaint alleges that the defendants provided funding for terrorist organizations through their sales practices pursuant to pharmaceutical and medical device contracts with the Iraqi Ministry of Health and seeks monetary relief. In\nPfizer Inc.\n2025 Form 10-K\n97\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nJuly 2020, the District Court granted defendants\u2019 motions to dismiss and dismissed all of plaintiffs\u2019 claims. In January 2022, the Court of Appeals reversed the District Court\u2019s decision. In June 2024, the U.S. Supreme Court issued an order granting certiorari, vacating the Court of Appeals\u2019 decision, and remanding the case to the Court of Appeals.\nAllergan Complaint for Indemnity\nIn 2019, Pfizer was named as a defendant in a complaint, along with King, filed by Allergan Finance LLC (Allergan) in the Supreme Court of the State of New York, asserting claims for indemnity related to Kadian, which was owned for a short period by King in 2008, prior to Pfizer\u2019s acquisition of King in 2010. This suit was voluntarily discontinued without prejudice in January 2021.\nBreach of Contract \u2013 Comirnaty\nIn 2023, Pfizer and BioNTech Manufacturing GmbH initiated separate formal proceedings against the Republic of Poland, the Republic of Romania and Hungary in Belgium\u2019s Court of First Instance of Brussels. Pfizer and BioNTech are seeking an order from the Court holding those countries to their commitments for COVID-19 vaccine orders, which were placed as part of their contracts signed in 2021.\nA4. Legal Proceedings\u2013\u2013Government Investigations\nLike other multi-national pharmaceutical companies, we are subject to extensive regulation by government agencies in the U.S., other developed markets and multiple emerging markets in which we operate. Criminal charges, substantial fines and/or civil penalties, limitations on our ability to conduct business in applicable jurisdictions, corporate integrity or deferred prosecution agreements, as well as reputational harm and increased public interest in the matter could result from government investigations in the U.S. and other jurisdictions in which we do business. These matters often involve government requests for information on a voluntary basis or through subpoenas after which the government may seek additional information through follow-up requests or additional subpoenas. In addition, in a\nqui tam\n lawsuit in which the government declines to intervene, the relator may still pursue a suit for the recovery of civil damages and penalties on behalf of the government. Among the investigations by government agencies are the matters discussed below.\nGreenstone Antitrust Litigation\nIn 2019 and 2020, Attorneys General of more than 50 states and territories filed\ntwo\n complaints in the U.S. District Court for the District of Connecticut against a number of pharmaceutical companies, including Pfizer and Greenstone\u2014a former Pfizer subsidiary that sold generic drugs. As to Greenstone and Pfizer, the complaints allege anticompetitive conduct in violation of federal and state antitrust laws and state consumer protection laws. The State Attorney General complaints were initially transferred to an MDL in the U.S. District Court for the Eastern District of Pennsylvania for coordinated pre-trial proceedings but were transferred back to the District of Connecticut in April 2024. The Greenstone antitrust litigation also includes civil complaints filed in federal and state court by private and governmental plaintiffs against Pfizer, Greenstone, and a number of other defendants. These related civil lawsuits assert allegations that generally overlap with those asserted by the State Attorneys General. All of the related federal lawsuits are part of the MDL pending in Pennsylvania.\nSubpoena relating to Tris Pharma/Quillivant XR\nIn October 2018, we received a subpoena from the U.S. Attorney\u2019s Office for the Southern District of New York (SDNY) seeking records relating to our relationship with another drug manufacturer and its production and manufacturing of drugs including, but not limited to, Quillivant XR.\nWe have produced records in response to this request and, in June 2025, the SDNY and numerous related states on whose behalf the SDNY had been investigating, declined to intervene in a\n qui tam\naction that had been filed by a relator. The relator is pursuing the action in his individual capacity on behalf of the government.\nGovernment Inquiries relating to Meridian Medical Technologies\nIn February 2019, we received a Civil Investigative Demand (CID) from the U.S. Attorney\u2019s Office for the SDNY. The CID seeks records and information related to alleged quality issues involving the manufacture of auto-injectors at Pfizer\u2019s former Meridian site. In August 2019, we received a HIPAA subpoena issued by the U.S. Attorney\u2019s Office for the Eastern District of Missouri, in coordination with the Department of Justice\u2019s Consumer Protection Branch, seeking similar records and information. We have produced records in response to these and subsequent requests.\nU.S. Department of Justice Inquiries relating to India Operations\nIn March 2020, we received an informal request from the U.S. Department of Justice\u2019s Consumer Protection Branch seeking documents relating to our manufacturing operations in India, including at our former facility located at Irrungattukottai in India. In April 2020, we received a similar request from the U.S. Attorney\u2019s Office for the SDNY regarding a civil investigation concerning operations at our facilities in India. We have produced records pursuant to these requests.\nZantac\n\u2013\u2013\nState of New Mexico and Mayor and City Council of Baltimore Civil Actions\nSee\nLegal Proceedings\u2013\u2013Product Litigation\u2013\u2013Zantac\n above for information regarding civil actions separately filed by the State of New Mexico and the Mayor and City Council of Baltimore alleging various state statutory and common law claims in connection with the defendants\u2019 alleged sale of Zantac in those jurisdictions.\nGovernment Inquiries relating to Xeljanz\nIn April 2023, we received a HIPAA subpoena issued by the U.S. Attorney\u2019s Office for the Western District of Virginia, in coordination with the Department of Justice\u2019s Commercial Litigation Branch, seeking records and information related to programs Pfizer sponsored in retail pharmacies relating to Xeljanz. We have produced records pursuant to this request.\nB. Guarantees and Indemnifications\nIn the ordinary course of business and in connection with the sale of assets and businesses and other transactions, we often indemnify our counterparties against certain liabilities that may arise in connection with the transaction or that are related to events and activities prior to or following a transaction. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we may be required to reimburse the loss. These indemnifications are generally subject to various restrictions and limitations. Historically, we have not paid significant amounts under these provisions and, as of December 31, 2025, the estimated fair value of these indemnification obligations is not material to Pfizer.\nIn addition, in connection with our entry into certain agreements and other transactions, our counterparties may be obligated to indemnify us. For example, our global agreement with BioNTech to co-develop a mRNA-based coronavirus vaccine program aimed at preventing COVID-19\nPfizer Inc.\n2025 Form 10-K\n98\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\ninfection includes certain indemnity provisions pursuant to which each of BioNTech and Pfizer has agreed to indemnify the other for certain liabilities that may arise in connection with certain third-party claims relating to Comirnaty.\nSee\nNote 7D\n\nfor information on Pfizer Inc.\u2019s guarantee of the debt issued by PNIF in May 2025 and the debt issued by PIE in May 2023. We have also guaranteed the long-term debt of certain subsidiaries of Pfizer and certain companies that we acquired and that now are subsidiaries of Pfizer.\nC. Certain Commitments\nAs of December 31, 2025, we had commitments totaling $\n5.0\n billion that are legally binding and enforceable. These commitments include purchase obligations for goods and services and payments relating to potential milestone payments deemed reasonably likely to occur.\nSee\nNote 5A\n for information on the TCJA repatriation tax liability.\nD. Contingent Consideration for Acquisitions\nWe may be required to make contingent consideration payments to sellers for certain prior Pfizer business combinations that are contingent on future events or outcomes. We also have assumed certain contingent consideration liabilities that were previously promised to sellers by a company subsequently acquired by Pfizer. See\nNote 1D\n. The estimated fair value of contingent consideration as of December 31, 2025 is $\n1.8\n billion, of which $\n95\n\u00a0million is recorded in\nOther current liabilities\n and $\n1.7\n billion in\nOther noncurrent liabilities,\nand as of December 31, 2024 was $\n517\n\u00a0million, of which $\n39\n\u00a0million was recorded in\nOther current liabilities\n and $\n477\n\u00a0million in\nOther noncurrent liabilities\n. The increase in the contingent consideration balance from December 31, 2024 is primarily due to a CVR and another assumed contingent consideration liability in connection with our acquisition of Metsera. See\nNote 2A\n.\nE. Insurance\nOur insurance coverage reflects market conditions (including cost and availability) existing at the time it is written, and our decision to obtain insurance coverage or to self-insure varies accordingly. Depending upon the cost and availability of insurance and the nature of the risk involved, the amount of self-insurance may be significant. The cost and availability of coverage have resulted in self-insuring certain exposures, including product liability.\n\nIf we incur substantial liabilities that are not covered by insurance or substantially exceed insurance coverage and that are in excess of existing accruals, there could be a material adverse effect on our cash flows or results of operations in the period in which the amounts are paid and/or accrued.\nNote 17.\n\nSegment, Geographic and Other Revenue Information\nA. Segment Information\nWe manage our commercial operations through\nthree\n operating segments, each led by a single manager: Biopharma, PC1 and Pfizer Ignite. Biopharma is engaged in the discovery, development, manufacture, marketing, sale and distribution of biopharmaceutical products worldwide. PC1 is our contract development and manufacturing organization and a leading supplier of specialty active pharmaceutical ingredients. Pfizer Ignite is an offering that provides strategic guidance and end-to-end R&D services to select innovative biotech companies that align with Pfizer\u2019s R&D focus areas. Biopharma is the only reportable segment. Pfizer\u2019s CODM is the Chairman and Chief Executive Officer. Our CODM uses the revenues and earnings of the operating segments, among other factors, for performance evaluation and resource allocation. The CODM uses segment revenues and earnings in the annual budgeting process when setting strategic goals for the company and considers periodic budget-to-actual variances in segment revenues and earnings when assessing performance of the segments and making decisions about allocating resources to the operating segments. By analyzing segment financial results, the CODM can discern trends, which can inform decisions that align with the company\u2019s goals and objectives, and\nhelp ensure r\nisks are managed appropriately.\nWe regularly review our operating segments and the approach used by management to evaluate performance and allocate resources.\nWithin our Biopharma reportable segment, our commercial divisions market, sell and distribute our products, and global operating functions are responsible for the research, development, manufacturing and supply of our products. Each operating segment is supported by our global corporate enabling functions and other corporate functions. At the beginning of 2025, we made the following changes within our Biopharma reportable segment that went into effect on January 1, 2025 to support our continued focus on commercial execution and to further strengthen Pfizer\u2019s capabilities and leadership in discovering and developing breakthrough medicines and vaccines:\n\u2022\nTransitioned all activities within the former Pfizer Oncology Division to other parts of Biopharma. Specifically, within our Biopharma reportable segment the U.S. Oncology commercial organization and the global Oncology marketing organization, which were part of the former Pfizer Oncology Division, became part of the Pfizer U.S. Commercial Division. As of January 1, 2025, the commercial structure within our Biopharma reportable segment was composed of the Pfizer U.S. Commercial Division, which focused on the commercialization of Pfizer\u2019s entire product portfolio in the U.S. and is led by the Chief U.S. Commercial Officer, Executive Vice President, and the Pfizer International Commercial Division, which focused on the commercialization of Pfizer\u2019s entire product portfolio in all international markets and is led by the Chief International Commercial Officer, Executive Vice President.\n\u2022\nStrategically combined our former global Oncology Research and Development and Pfizer Research and Development divisions to form a single Pfizer R&D organization led by the Chief Scientific Officer and President, Research and Development. This organization is responsible for overseeing all R&D activities with end-to-end responsibilities that span from discovery to late-phase clinical development and post-approval activities, including facilitating regulatory submissions, engaging with health authorities and global medical strategies. This organization also includes science-based disciplines, providing comprehensive technical expertise for the development of Pfizer\u2019s medicines and vaccines. A newly formed Chief Medical Office is part of this structure, advancing medical and scientific knowledge by generating evidence-based insights to drive informed regulatory and healthcare decisions. It ensures all stakeholders \u2013 including patients, healthcare providers, pharmacists, payors, and health authorities \u2013 have complete and up-to-date information on the benefits and risks associated with our products. R&D spending may encompass upfront and pre-approval milestone payments for intellectual property rights related to its programs, which would be recorded as\nAcquired in-process research and development expenses\n.\nPfizer Inc.\n2025 Form 10-K\n99\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nOther Business Activities\u2013\u2013\nOther business activities include the operating results of PC1 and Pfizer Ignite as well as certain pre-tax costs not allocated to our operating segment results, such as costs associated with:\n\u2022\ncorporate enabling functions (such as digital, global real estate operations, legal, finance, human resources, compliance and worldwide procurement, among others) and other corporate costs, including, but not limited to, all strategy, business development and portfolio management capabilities and certain compensation, as well as interest income and expense, and gains and losses on investments; and\n\u2022\nour share of equity-method income from Haleon in 2024 and 2023 (see\nNote 2C\n).\nIn 2025, Pfizer made the decision to discontinue Pfizer Ignite and we are winding down this business while collaborating closely with our Ignite partners to ensure continuity and the successful transition of work.\nReconciling Items\u2013\u2013\nReconciling items include the following items, transactions and events that are not allocated to our operating segments: (i) all amortization of intangible assets; (ii) acquisition-related items, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company, and which may also include purchase accounting impacts, such as the incremental charge to cost of sales from the sale of acquired inventory that was written up to fair value, depreciation related to the increase/decrease in fair value of acquired fixed assets, amortization related to the increase in fair value of acquired debt, and the fair value changes for contingent consideration; and (iii) certain significant items, representing substantive and/or unusual, and in some cases recurring, items that are evaluated on an individual basis by management and that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such certain significant items can include, but are not limited to, pension and postretirement actuarial remeasurement gains and losses, non-acquisition-related restructuring costs, net gains and losses on investments in equity securities, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.\nSegment Assets\u2013\u2013\nWe manage our assets on a total company basis, not by operating segment, as our operating assets are shared or commingled. Therefore, our CODM does not regularly review any asset information by operating segment and, accordingly, we do not report asset information by operating segment. Total assets were $\n208\n billion as of December 31, 2025 and $\n213\n billion as of December 31, 2024.\nSelected Statement of Operations Information\nThe following table provides selected information by reportable segment:\n\nTotal Revenues\nEarnings\n(a)\nDepreciation and Amortization\n(b)\nYear Ended December 31,\nYear Ended December 31,\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\nReportable Segment:\nBiopharma\n(c)\n$\n61,199\n\n$\n62,400\n\n$\n58,237\n\n$\n29,342\n\n$\n27,969\n\n$\n15,767\n\n$\n1,379\n\n$\n1,360\n\n$\n1,213\n\nOther business activities\n(d)\n1,380\n\n1,228\n\n1,316\n\n(\n8,199\n)\n(\n7,213\n)\n(\n4,185\n)\n305\n\n340\n\n323\n\nReconciling Items:\nAmortization of intangible assets\n(\n4,874\n)\n(\n5,286\n)\n(\n4,733\n)\n4,874\n\n5,286\n\n4,733\n\nAcquisition-related items\n(\n1,285\n)\n(\n1,938\n)\n(\n1,874\n)\n(\n4\n)\n12\n\n(\n11\n)\nCertain significant items\n(e)\n(\n7,464\n)\n(\n5,510\n)\n(\n3,917\n)\n38\n\n14\n\n32\n\n$\n62,579\n\n$\n63,627\n\n$\n59,553\n\n$\n7,520\n\n$\n8,023\n\n$\n1,058\n\n$\n6,592\n\n$\n7,013\n\n$\n6,290\n\n(a)\nIncome from continuing operations before provision/(benefit) for taxes on income.\nBiopharma\u2019s earnings include costs related to manufacturing and supply, sales and marketing activities, R&D, and medical and safety activities that are associated with products in our Biopharma segment. Effective in the third quarter of 2025, certain\n\nexpenses for corporate affairs, such as for U.S. policy and government relations, which were previously reported in the operating results of corporate enabling functions, are reported in the operating results of our Biopharma reportable segment. In connection with this reporting change, we reclassified\n Selling, informational and administrative expenses\n of approximately $\n170\n million and $\n156\n million in 2024 and 2023, respectively, from Other business activities to Biopharma to conform to the current period presentation.\n(b)\nCertain production facilities are shared. Depreciation is allocated based on estimates of physical production.\n(c)\nBiopharma\u2019s earnings in 2025 reflects credits to\nCost of Sales\nrepresenting favorable revisions of our estimate of accrued royalties. Biopharma\u2019s revenues and earnings in 2024 reflected a non-cash favorable product return adjustment of $\n771\n million recorded in the first quarter of 2024 and in 2023 reflected a non-cash revenue reversal of $\n3.5\n billion (see\nNote 1\n7C\n). In 2023, Biopharma earnings included approximately $\n6.2\n billion of inventory write-offs and related charges to\nCost of sales\n mainly due to lower-than-expected demand for our COVID-19 products. Biopharma\u2019s earnings also include dividend income from our investment in ViiV of $\n265\n million in 2025, $\n272\n million in 2024 and $\n265\n million in 2023.\n(d)\nOther business activities include revenues and costs associated with PC1 and Pfizer Ignite as well as costs that we do not allocate to our operating segments, per above. Earnings in 2025 reflects a charge for $\n1.35\n billion recorded in\nAcquired in-process research and development expenses\n related to an in-licensing agreement with 3SBio. See\nNote\n2F\n.\n(e)\nCertain significant items are substantive and/or unusual, and in some cases recurring, items (as noted above). Earnings in 2025 includes, among other items: (i) certain asset impairments of $\n4.9\n billion recorded in\nOther\n(\nincome\n)\n/deductions\u2013\u2013net,\n(ii) restructuring charges/(credits), inventory write-offs, implementation costs and additional depreciation\u2014asset restructuring of $\n1.6\n\u00a0billion (primarily\n\nrecorded in\nRestructuring charges and certain acquisition-related costs\n) and (iii) charges for certain legal matters of $\n1.1\n billion recorded in\nOther\n(\nincome\n)\n/deductions\u2013\u2013net\n,\n\npartially offset by\n\n(iv) actuarial valuation, pension and other postretirement plan gains of $\n320\n million recorded in\nOther (income)/deductions\u2013\u2013net\n. Earnings in 2024 included, among other items: (i) intangible asset impairment charges of $\n3.3\n billion recorded in\nOther (income)/deductions\u2013\u2013net,\n (ii) restructuring charges/(credits) and implementation costs and additional depreciation\u2014asset restructuring of $\n2.2\n billion (primarily\n\nrecorded in\nRestructuring charges and certain acquisition-related co\nsts), (iii) actuarial valuation, pension and other postretirement plan losses of $\n579\n million recorded in\nOther (income)/deductions\u2013\u2013net\n, (iv) charges for certain legal matters of $\n567\n million recorded in\nOther (income)/deductions\u2013\u2013net,\n and (v) a charge in\nOther (income)/deductions\u2013\u2013net\nof $\n420\n million related to the expected sale of\none\n of our facilities resulting from the discontinuation of our DMD program, partially offset by (vi) net gains on equity securities of $\n1.0\n\u00a0billion and (vii) net gains of $\n825\n million on the partial sales of our previous investment in Haleon in March and October 2024, which were comprised of (a) total gains on the sales of $\n945\n\u00a0million less (b) $\n120\n\u00a0million in the fourth quarter (included in Other business activities) representing our pro-rata share of Haleon\u2019s third quarter 2024 adjusted income recorded on a one quarter lag and implicitly included in the gain on the sale of those shares. Earnings in 2023 included, among other items: (i) intangible asset impairment charges of $\n3.0\n billion recorded in\nOther (income)/deductions\u2013\u2013net\nand (ii) restructuring charges/(credits) and implementation costs and additional depreciation\u2014asset restructuring of $\n2.2\n billion ($\n290\n million recorded in\nSelling, informational and administrative expenses\nand the remaining amount primarily recorded in\nRestructuring charges and certain acquisition-related costs\n), partially offset by (iii) net gains on equity securities of $\n1.6\n billion recorded in\nOther (income)/deductions\u2013\u2013net\n. See\nNotes 3\n and\n4\n.\nPfizer Inc.\n2025 Form 10-K\n100\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe following provides Biopharma reportable segment information regularly provided to the CODM:\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nBiopharma reportable segment:\nBiopharma total revenues\n$\n61,199\n\n$\n62,400\n\n$\n58,237\n\nLess:\nCost of sales\n13,505\n\n14,997\n\n22,666\n\nSelling, informational and administrative expenses\n(a)\n9,637\n\n10,210\n\n10,391\n\nResearch and development expenses\n9,183\n\n9,532\n\n9,763\n\nAcquired in-process research and development expenses\n113\n\n108\n\n194\n\nOther (income)/deductions\n\u2013\u2013\nnet\n(\n581\n)\n(\n416\n)\n(\n543\n)\nBiopharma earnings\n(a)\n$\n29,342\n\n$\n27,969\n\n$\n15,767\n\nRevenues - Comirnaty\n$\n4,367\n\n$\n5,353\n\n$\n11,220\n\nRevenues - Paxlovid\n$\n2,362\n\n$\n5,716\n\n$\n1,279\n\nRevenues - excluding Comirnaty and Paxlovid\n$\n54,470\n\n$\n51,331\n\n$\n45,738\n\n(a)\nAs described above, certain\nSelling, informational and administrative expenses\n for corporate affairs, which were previously reported in the operating results of corporate enabling functions, are reported in the operating results of our Biopharma reportable segment. Prior year amounts have been recast to conform to the current period presentation.\nB.\nGeographic Information\nThe following summarizes revenues by geographic area:\n\nYear Ended December 31,\n(MILLIONS)\n2025\n2024\n2023\nUnited States\n$\n37,078\n\n$\n38,691\n\n$\n28,145\n\nInternational:\nDeveloped Markets\n16,188\n\n16,057\n\n20,910\n\nEmerging Markets\n9,313\n\n8,879\n\n10,498\n\nTotal revenues\n(a)\n$\n62,579\n\n$\n63,627\n\n$\n59,553\n\n(a)\nRevenues are primarily attributed to countries based on the location of the customer.\nRevenues exceeded $500 million in each of\n12\n,\n11\n and\n14\n countries outside the U.S. in 2025, 2024 and 2023, respectively. The U.S. is the only country to contribute more than\n10\n% of total revenue in 2025, 2024 and 2023. As a percentage of\nTotal revenues\n, China was our largest market outside the U.S. (representing\n5\n% and\n4\n% of total revenues) in 2025 and 2024, respectively. Japan was our largest market outside the U.S. in 2023 (representing\n6\n% of total revenues).\nC.\nOther Revenue Information\nSignificant Customers\nWe and our collaboration partner, BioNTech, have entered into agreements to supply pre-specified doses of Comirnaty with multiple developed and emerging nations around the world and are continuing to deliver doses of Comirnaty under such agreements. This includes supply agreements entered into in November 2020 and February and May 2021 with the EC for Comirnaty on behalf of the different EU member states and certain other countries. Each EU member state submits its own Comirnaty vaccine order to us and is responsible for payment pursuant to terms of the supply agreements negotiated by the EC. In May 2023, we and BioNTech amended our contract with the EC to deliver COVID-19 vaccines to the EU. The amended agreement includes rephasing of delivery of doses annually through 2026 and an aggregate volume reduction, providing additional flexibility for those EU member states who agreed to the amended agreement. The EC will maintain access to future adapted COVID-19 vaccines and the ability to donate doses, in alignment with the original agreement.\nIn 2022 and 2023, we had entered into agreements to supply pre-specified treatment courses of Paxlovid with government and government sponsored customers in multiple developed and emerging nations around the world, which represented most Paxlovid revenues in 2022 and 2023, while commercialization began in some markets in 2023. Internationally, most Paxlovid revenue was generated through commercial channels in 2025. In October 2023, we announced an amended agreement with the U.S. government, which facilitated the transition of Paxlovid to traditional commercial markets in the U.S. starting in November 2023, with prices negotiated with commercial payors and a copay assistance program for eligible privately insured patients, as the U.S. government began to discontinue the distribution of EUA-labeled Paxlovid. We ensured commercial readiness by providing NDA-labeled commercial supply by the end of 2023. However, EUA-labeled Paxlovid remained available free-of-charge to all eligible patients until the end of 2023, and therefore, there was only minimal uptake of NDA-labeled commercial product before January 1, 2024. In connection with this agreement, we recorded a non-cash revenue reversal of $\n3.5\n billion in the fourth quarter of 2023, of which a portion was associated with sales recorded in 2022, related to the expected return of an estimated\n6.5\n million treatment courses of EUA-labeled U.S. government inventory. In the first quarter of 2024, we recorded a non-cash favorable final adjustment of $\n771\n million to reflect\n5.1\n million EUA-labeled treatment courses returned through February 29, 2024, which were converted to a volume-based credit that supports continued access to Paxlovid through a U.S. government patient assistance program operated by Pfizer. In the third quarter of 2024, in connection with this amended agreement, we also supplied at no cost to the U.S. government or taxpayers a U.S. SNS of\n1.0\n million treatment courses to enable future pandemic preparedness through 2028, and recorded revenue of $\n442\n million. While we are recognizing revenue as these treatment courses are delivered, there is no cash consideration for these treatment courses.\nPfizer Inc.\n2025 Form 10-K\n101\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\nThe following summarizes revenue, as a percentage of\nTotal revenues\n, from our three largest U.S. wholesaler customers, which was concentrated in our Biopharma operating segment:\n\nYear Ended December 31,\n2025\n2024\n2023\nMcKesson, Inc.\n25\n\n%\n23\n\n%\n16\n\n%\nCencora, Inc.\n16\n\n%\n17\n\n%\n12\n\n%\nCardinal Health, Inc.\n13\n\n%\n14\n\n%\n10\n\n%\nCollectively, our three largest U.S. wholesaler customers represented\n40\n% and\n34\n% of total trade accounts receivable as of December 31, 2025 and December 31, 2024, respectively.\nSignificant Revenues by Product\nThe following provides detailed revenue information for several of our major products:\n(MILLIONS)\nYear Ended December 31,\nPRODUCT\nPRIMARY INDICATION OR CLASS\n2025\n2024\n2023\nTOTAL REVENUES\n$\n62,579\n\n$\n63,627\n\n$\n59,553\n\nGLOBAL BIOPHARMACEUTICALS BUSINESS (BIOPHARMA)\n$\n61,199\n\n$\n62,400\n\n$\n58,237\n\nPrimary Care\n$\n26,820\n\n$\n30,135\n\n$\n30,799\n\nEliquis\n(a)\nNonvalvular atrial fibrillation, deep vein thrombosis, pulmonary embolism\n7,961\n\n7,366\n\n6,747\n\nPrevnar family\nActive immunization to prevent pneumonia, invasive disease and otitis media caused by\nStreptococcus pneumoniae\n6,494\n\n6,411\n\n6,501\n\nComirnaty\nActive immunization to prevent COVID-19\n4,367\n\n5,353\n\n11,220\n\nPaxlovid\n(b)\nCOVID-19 in certain\nhigh-risk patients\n2,362\n\n5,716\n\n1,279\n\nNurtec ODT/Vydura\nAcute treatment of migraine and prevention of episodic migraine\n1,424\n\n1,263\n\n928\n\nAbrysvo\nActive immunization to prevent RSV infection\n1,033\n\n755\n\n890\n\nFSME-IMMUN/TicoVac\nActive immunization to prevent tick-borne encephalitis disease\n319\n\n280\n\n268\n\nAll other Primary Care\nVarious\n2,860\n\n2,991\n\n2,968\n\nSpecialty Care\n$\n17,546\n\n$\n16,652\n\n$\n14,988\n\nVyndaqel family\nATTR-CM and polyneuropathy\n6,380\n\n5,451\n\n3,321\n\nXeljanz\nRA, PsA, UC, active polyarticular course juvenile idiopathic arthritis, ankylosing spondylitis\n1,087\n\n1,168\n\n1,703\n\nSulperazon (Outside the U.S. and Canada)\nBacterial infections\n653\n\n637\n\n757\n\nInflectra\nCrohn\u2019s disease, pediatric Crohn\u2019s disease, UC, pediatric UC, RA in combination with methotrexate, ankylosing spondylitis, PsA and plaque psoriasis\n646\n\n509\n\n490\n\nZavicefta (Outside the U.S. and Canada)\nBacterial infections\n638\n\n586\n\n511\n\nEnbrel (Outside the U.S. and Canada)\nRA, juvenile idiopathic arthritis, PsA, plaque psoriasis, pediatric plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis\n627\n\n690\n\n830\n\nGenotropin\nReplacement of human growth hormone\n446\n\n470\n\n539\n\nOctagam\nPrimary humoral immunodeficiency, chronic immune thrombocytopenic purpura in adults, and dermatomyositis in adults\n418\n\n509\n\n245\n\nZithromax\nBacterial infections\n399\n\n480\n\n406\n\nCresemba\nInvasive aspergillosis and mucormycosis\n349\n\n281\n\n195\n\nCibinqo\nAtopic dermatitis\n284\n\n215\n\n128\n\nAll other Hospital\nVarious\n4,030\n\n4,167\n\n4,514\n\nAll other Specialty Care\nVarious\n1,588\n\n1,489\n\n1,350\n\nOncology\n$\n16,834\n\n$\n15,612\n\n$\n12,450\n\nIbrance\nHR-positive/HER2-negative metastatic breast cancer\n4,122\n\n4,367\n\n4,753\n\nXtandi\n(c)\nmCRPC, nmCRPC, mCSPC, nmCSPC\n2,194\n\n2,039\n\n1,659\n\nPadcev\nLocally advanced or metastatic urothelial cancer and cisplatin-ineligible/decline muscle invasive bladder cancer (MIBC)\n1,940\n\n1,588\n\n53\n\nOncology biosimilars\n(d)\nVarious\n1,301\n\n1,037\n\n1,407\n\nLorbrena\nALK-positive metastatic NSCLC\n1,023\n\n731\n\n539\n\nInlyta\nAdvanced renal cell carcinoma\n923\n\n978\n\n1,036\n\nAdcetris\n(e)\nCertain lymphomas including classical Hodgkin lymphoma, T-cell lymphoma and relapsed/refractory diffuse large B-cell lymphoma\n907\n\n1,089\n\n56\n\nBraftovi/Mektovi\nMetastatic melanoma in patients with a BRAF\nV600E/K\n mutation and for metastatic NSCLC in patients with a BRAF\nV600E\nmutation; and, for Braftovi for the treatment of BRAF\nV600E\n-\nmutant mCRC, in combination with Erbitux\n\u00ae\n (cetuximab)\n(f)\n (after prior therapy) or cetuximab and mFOLFOX6\n716\n\n607\n\n477\n\nBosulif\nPhiladelphia\u00a0chromosome-positive\u00a0chronic myelogenous leukemia\n611\n\n645\n\n645\n\nPfizer Inc.\n2025 Form 10-K\n102\nNotes to Consolidated Financial Statements\nPfizer Inc. and Subsidiary Companies\n(MILLIONS)\nYear Ended December 31,\nPRODUCT\nPRIMARY INDICATION OR CLASS\n2025\n2024\n2023\nTukysa\nUnresectable or metastatic HER2-positive breast cancer; RAS wild-type, HER2-positive unresectable or metastatic colorectal cancer\n463\n\n480\n\n18\n\nAromasin\nPost-menopausal early and advanced breast cancer\n450\n\n347\n\n301\n\nOrgovyx\n(g)\nAdvanced prostate cancer\n421\n\n201\n\n120\n\nElrexfio\nRelapsed or refractory multiple myeloma\n304\n\n133\n\n10\n\nTalzenna\nTreatment of BRCA gene-mutated, HER2-negative, inoperable or recurrent breast cancer; and, in combination with Xtandi (enzalutamide), of adult patients with HRR gene-mutated mCRPC\n182\n\n117\n\n64\n\nTivdak\nRecurrent or mCC with disease progression on or after chemotherapy\n147\n\n131\n\n4\n\nAll other Oncology\nVarious\n1,127\n\n1,122\n\n1,308\n\nPFIZER CENTREONE\n(h)\n$\n1,338\n\n$\n1,146\n\n$\n1,272\n\nPFIZER IGNITE\n$\n41\n\n$\n82\n\n$\n44\n\nBIOPHARMA\n$\n61,199\n\n$\n62,400\n\n$\n58,237\n\nPFIZER U.S. COMMERCIAL DIVISION\n(i)\n36,708\n\n38,332\n\n27,749\n\nPFIZER INTERNATIONAL COMMERCIAL DIVISION\n24,491\n\n24,068\n\n30,488\n\nTotal Alliance revenues included above\n$\n9,266\n\n$\n8,388\n\n$\n7,582\n\nTotal Royalty revenues included above\n$\n1,650\n\n$\n1,423\n\n$\n1,058\n\n(a)\nReflects alliance revenues and product revenues.\n(b)\n2024 included (i) a $\n771\n million favorable final adjustment recorded in the first quarter to the estimated non-cash revenue reversal of $\n3.5\n billion recorded in the fourth quarter of 2023, reflecting\n5.1\n million EUA-labeled treatment courses returned by the U.S. government through February 29, 2024 versus the estimated\n6.5\n million treatment courses that were expected to be returned as of December 31, 2023, and (ii) $\n442\n million of revenue recorded in the third quarter in connection with the creation of the U.S. SNS. 2023 included a non-cash revenue reversal of $\n3.5\n billion recorded in the fourth quarter, of which a portion was associated with sales recorded in 2022, related to the expected return of an estimated\n6.5\n million treatment courses of EUA-labeled U.S. government inventory.\n(c)\nPrimarily reflects alliance revenues and royalty revenues.\n(d)\nBiosimilars are highly similar versions of approved and authorized biological medicines. Oncology biosimilars primarily include Ruxience, Retacrit, Zirabev, Trazimera and Nivestym.\n(e)\nReflects product revenues and royalty revenues.\n(f)\nErbitux\n\u00ae\n is a registered trademark of ImClone LLC.\n(g)\nReflects alliance revenues.\n(h)\nPC1 includes revenues from our contract manufacturing and our active pharmaceutical ingredient sales operation, as well as revenues related to our manufacturing and supply agreements with legacy Pfizer businesses/partnerships.\n(i)\nRefer to\nN\note 17A\n above\n.\nRemaining Performance Obligations\u2013\u2013\nContracted revenue expected to be recognized from remaining performance obligations for firm orders in long-term contracts to supply Comirnaty and Paxlovid to our customers totaled approximately $\n2.1\n billion and $\n1.0\n billion, respectively, as of December 31, 2025, which includes amounts received in advance and deferred, as well as amounts that will be invoiced as we deliver these products to our customers in future periods. Of these amounts, current contract terms provide for expected delivery of product with contracted revenue primarily from 2026 through 2028, the timing of which may be renegotiated. Remaining performance obligations are based on foreign exchange rates as of the end of our fiscal fourth quarter of 2025 and exclude arrangements with an original expected contract duration of less than one year. Remaining performance obligations associated with contracts for other products and services were not significant as of December 31, 2025 or December 31, 2024.\nDeferred Revenues\u2013\u2013\nOur deferred revenues primarily relate to advance payments received or receivable from various government or government sponsored customers for supply of Paxlovid and Comirnaty. The deferred revenues related to Paxlovid and Comirnaty totaled $\n1.5\n billion as of December 31, 2025, with $\n689\n million and $\n826\n million recorded in current liabilities and noncurrent liabilities, respectively. The deferred revenues related to Paxlovid and Comirnaty totaled $\n2.2\n billion as of December 31, 2024, with $\n1.4\n billion and $\n785\n million recorded in current liabilities and noncurrent liabilities, respectively. The decrease in Paxlovid and Comirnaty deferred revenues during 2025 was primarily driven by amounts recognized in\nProduct revenues\n as we delivered the products to our customers. During 2025, we recognized revenue of approximately $\n771\n million that was included in the balance of Paxlovid and Comirnaty deferred revenues as of December 31, 2024. The Paxlovid and Comirnaty deferred revenues as of December 31, 2025 will be recognized in\nProduct revenues\n proportionately as we transfer control of the products to our customers and satisfy our performance obligations under the contracts, with the amounts included in current liabilities expected to be recognized in\nProduct revenues\n within the next 12 months, and the amounts included in noncurrent liabilities expected to be recognized in\nProduct revenues\nprimarily\n\nfrom December 2026 (which falls in our international first quarter of 2027) through 2028. Deferred revenues associated with contracts for other products were not significant as of December 31, 2025 or December 31, 2024.\nITEM\u00a09.\nCHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE\nNone.\nPfizer Inc.\n2025 Form 10-K\n103\nITEM\u00a09A.\nCONTROLS AND PROCEDURES\nDisclosure Controls and Procedures\nAs of the end of the period covered by this Form 10-K, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be disclosed in our periodic reports filed with the SEC.\nChanges in Internal Controls\nDuring our most recent fiscal quarter, there has not been any change in the Company\u2019s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company\u2019s internal control over financial reporting.\nPfizer Inc.\n2025 Form 10-K\n104\nReport of Independent Registered Public Accounting Firm\nTo the Board of Directors and Shareholders\nPfizer Inc.:\nOpinion on Internal Control Over Financial Reporting\nWe have audited Pfizer Inc. and Subsidiary Companies\u2019 (the Company) internal control over financial reporting as of December\u00a031, 2025, based on criteria established in\nInternal Control\n\u2014\nIntegrated Framework\n(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.\nWe 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, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February\u00a026, 2026 expressed an unqualified opinion on those consolidated financial statements.\nBasis for Opinion\nThe Company\u2019s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying\nManagement\u2019s Report on Internal Control Over Financial Reporting\n. Our responsibility is to express an opinion on the Company\u2019s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\nDefinition and Limitations of Internal Control Over Financial Reporting\nA company\u2019s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company\u2019s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company\u2019s assets that could have a material effect on the financial statements.\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\nNew York, New York\nFebruary 26, 2026\nPfizer Inc.\n2025 Form 10-K\n105\nManagement\u2019s Report on Internal Control Over Financial Reporting\nManagement\u2019s Report\nWe prepared and are responsible for the financial statements that appear in this Form 10-K. These financial statements are in conformity with accounting principles generally accepted in the United States of America and, therefore, include amounts based on informed judgments and estimates. We also accept responsibility for the preparation of other financial information included in this document.\nReport on Internal Control Over Financial Reporting\nThe management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company\u2019s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. The Company\u2019s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company\u2019s assets that could have a material effect on the financial statements.\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of the Company\u2019s internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in\nInternal Control\u2014Integrated Framework\n\n(2013)\n. Based on our assessment and those criteria, management believes that the Company maintained effective internal control over financial reporting as of December\u00a031, 2025.\nThe Company\u2019s independent auditors have issued their auditors\u2019 report on the Company\u2019s internal control over financial reporting. That report appears above in this Form 10-K\n.\nAlbert Bourla\n\nChairman and Chief Executive Officer\n\nDavid M. Denton\nJennifer B. Damico\nPrincipal Financial Officer\nPrincipal Accounting Officer\nFebruary\u00a026, 2026\nPfizer Inc.\n2025 Form 10-K\n106\nITEM\u00a09B.\nOTHER INFORMATION\nDuring the three months ended December 31, 2025, none of our directors or officers\nadopted\n or\nterminated\n a \u201cRule 10b5-1 trading arrangement\u201d or \u201cnon-Rule 10b5-1 trading arrangement,\u201d as each term is defined in Item 408 of Regulation S-K.\nPART III\nITEM\u00a010.\nDIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE\nInformation about our Directors is incorporated by reference from the discussion under the heading\nItem 1\n\u2014\nElection of Directors\n in our Proxy Statement. Information about the Pfizer Policies on Business Conduct governing our employees, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer, the Code of Business Conduct and Ethics for Members of the Board of Directors and our other governance practices and policies, including our\nInsider Trading Policy\n, is incorporated by reference from the discussions under the headings\nGovernance\n\u2014\nPfizer Policies on Business Conduct,\n \u2014\nCode of Conduct for Directors\nand \u2014\nOther Governance Practices and Policies\n in our Proxy Statement. Information regarding the procedures by which our shareholders may recommend nominees to our Board of Directors is incorporated by reference from the discussion under the headings\nItem 1\n\u2014\nElection of Directors\n\u2014\nCriteria for Board Membership\n and\nAnnual Meeting Information\u2014Submitting Proxy Proposals and Director Nominations for the 2027 Annual Meeting\nin our Proxy Statement. Information about our Audit Committee, including the members of the Committee, and our Audit Committee financial experts, is incorporated by reference from the discussion under the heading\nGovernance Overview\n\u2014\nBoard and Committee Information\n\u2014\nBoard Committees\u2014The Audit Committee\n in our Proxy Statement. The balance of the information required by this item is contained in the discussion entitled\nInformation about Our Executive Officers\n in this Form 10-K.\nITEM\u00a011.\nEXECUTIVE COMPENSATION\nInformation about Director and executive compensation is incorporated by reference from the discussion under the headings\nNon-Employee Director Compensation\n;\n Executive Compensation\n; and\nGovernance Overview\u2014Board and Committee Information\u2014Board Committees\n\u2014\nThe Compensation Committee\n\u2014\nCompensation Committee Interlocks and Insider Participation\n in our Proxy Statement.\nITEM\u00a012.\nSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS\nInformation required by this item is incorporated by reference from the discussion under the headings\nExecutive Compensation\n\u2014\nCompensation Tables\u2014Equity Compensation Plan Information\n and\nSecurities Ownership\n in our Proxy Statement.\nITEM\u00a013.\nCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE\nInformation about certain relationships and transactions with related parties is incorporated by reference from the discussion under the headings\n Governance Overview\n\u2014\nOther Governance Practices and Policies\u2014Related Person Transactions and Indemnification\nand\n\n\u2014\nTransactions with Related Persons\n in our Proxy Statement. Information about director independence is incorporated by reference from the discussion under the heading\nItem 1\n\u2014\nElection of Directors\n\u2014\nDirector Independence\n in our Proxy Statement.\nITEM\u00a014.\nPRINCIPAL ACCOUNTING FEES AND SERVICES\nOur independent registered public accounting firm is\nKPMG LLP\n,\nNew York, NY\n, Auditor Firm ID:\n185\n. Information about the fees for professional services rendered by our independent registered public accounting firm in 2025 and 2024 is incorporated by reference from the discussion under the heading\nItem 2\n\u2014\nRatification of Selection of Independent Registered Public Accounting Firm\n\u2014\nAudit and Non-Audit Fees\n in our Proxy Statement. Our Audit Committee\u2019s policy on pre-approval of audit and permissible non-audit services of our independent registered public accounting firm is incorporated by reference from the discussion under the heading\nItem 2\n\u2014\nRatification of Selection of Independent Registered Public Accounting Firm\n\u2014\nPolicy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services\nin our Proxy Statement.\nPART IV\nITEM\u00a015.\nEXHIBITS, FINANCIAL STATEMENT SCHEDULES\n15(a)(1) Financial Statements.\n The following consolidated financial statements, related notes and report of independent registered public accounting firm are set forth in\nItem 8. Financial Statements and Supplementary Data\n in this Form 10-K:\n\u2022\nReport of Independent Registered Public Accounting Firm on the Consolidated Financial Statements\n\u2022\nConsolidated Statements of Operations\n\u2022\nConsolidated Statements of Comprehensive Income\n\u2022\nConsolidated Balance Sheets\n\u2022\nConsolidated Statements of Equity\n\u2022\nConsolidated Statements of Cash Flows\n\u2022\nNotes to Consolidated Financial Statements\nPfizer Inc.\n2025 Form 10-K\n107\n15(a)(2) Financial Statement Schedules.\n Schedules are omitted because they are not required or because the information is provided elsewhere in the financial statements. The financial statements of unconsolidated subsidiaries are omitted because, considered in the aggregate, they would not constitute a significant subsidiary.\n15(a)(3) Exhibits.\n These exhibits are available upon request. Requests should be directed to our Corporate Secretary, Pfizer Inc., 66 Hudson Boulevard East, New York, New York 10001-2192. The exhibit numbers preceded by an asterisk (*) indicate exhibits filed with this Form 10-K. All other exhibit numbers indicate exhibits filed by incorporation by reference. Exhibit numbers 10.1 through 10.42 are management contracts or compensatory plans or arrangements.\n2.1\nAgreement and Plan of Merger, by and among Pfizer Inc., Aris Merger Sub, Inc. and Seagen Inc., dated as of March 12, 2023 is incorporated by reference from our Current Report on Form 8-K filed on March 13, 2023.\n3.1\nOur Restated Certificate of Incorporation dated December 14, 2020, is incorporated by reference from our Current Report on Form 8-K filed on December 14, 2020.\n3.2\nOur By-laws, as amended on December 9, 2022, are incorporated by reference from our Current Report on Form 8-K filed on\nDecember 13, 2022.\n4.1\nIndenture, dated as of January 30, 2001, between us and The Chase Manhattan Bank, is incorporated by reference from our Current Report on Form 8-K filed on January 30, 2001.\n4.2\nFirst Supplemental Indenture, dated as of March 24, 2009, between us and The Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank)), as trustee, to Indenture dated as of January 30, 2001, is incorporated by reference from our Quarterly Report on Form 10-Q for the period ended June 28, 2009.\n4.3\nSecond Supplemental Indenture, dated as of June 2, 2009, between us and The Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank)), as trustee, to Indenture dated as of January 30, 2001, is incorporated by reference from our Current Report on Form 8-K filed on June 3, 2009.\n4.4\nThird Supplemental Indenture, dated as of June 3, 2013, between us and The Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank)), as trustee, to Indenture dated as of January 30, 2001, is incorporated by reference from our Current Report on Form 8-K filed on June 3, 2013.\n4.5\nFourth Supplemental Indenture, dated as of May 15, 2014, between us and The Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank)), as trustee, to Indenture dated as of January 30, 2001, is incorporated by reference from our Current Report on Form 8-K filed on May 15, 2014.\n4.6\nFifth Supplemental Indenture, dated as of October 5, 2015, between us and The Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank)), as trustee, to Indenture dated as of January 30, 2001, is incorporated by reference from our Current Report on Form 8-K filed on October 6, 2015.\n4.7\nSixth Supplemental Indenture, dated as of June 3, 2016, between us and The Bank of New York Mellon (formerly The Bank of New York (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank (National Association)))), as trustee, to Indenture dated as of January 30, 2001, is incorporated by reference from our Current Report on Form 8-K filed on June 3, 2016.\n4.8\nSeventh Supplemental Indenture, dated as of November 21, 2016, between us and The Bank of New York Mellon (formerly The Bank of New York (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank (National Association)))), as trustee, to Indenture dated as of January 30, 2001, is incorporated by reference from our Current Report on Form 8-K filed on November 21, 2016.\n4.9\nEighth Supplemental Indenture, dated as of March 17, 2017, among us, The Bank of New York Mellon (formerly The Bank of New York (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank (successor to the Chase Manhattan Bank (National Association)))), as trustee, and The Bank of New York Mellon, London Branch, as paying agent, to Indenture dated as of January 30, 2001, is incorporated by reference from our Current Report on Form 8-K filed on March 17, 2017.\n4.10\nNinth Supplemental Indenture, dated as of March 6, 2017, among us, The Bank of New York Mellon (formerly The Bank of New York (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank (National Association)))), as trustee, and The Bank of New York Mellon, London Branch, as paying agent and calculation agent, to Indenture dated as of January 30, 2001, is incorporated by reference from our Current Report on Form 8-K filed on March 6, 2017.\n4.11\nTenth Supplemental Indenture, dated as of December 19, 2017, among us, The Bank of New York Mellon (formerly The Bank of New York (successor to JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, formerly The Chase Manhattan Bank (National Association)))), as trustee, and The Bank of New York Mellon, London Branch, as paying agent, to Indenture dated as of January 30, 2001, is incorporated by reference from our Current Report on Form 8-K filed on December 19, 2017.\n4.12\nIndenture, dated as of April 10, 1992, between Wyeth (formerly American Home Products Corporation) and The Bank of New York Mellon (as successor to JPMorgan Chase Bank, N.A.), as trustee, is incorporated by reference from Wyeth\u2019s Registration Statement on Form\u00a0S-3, filed on January 18, 1995.\n4.13\nFifth Supplemental Indenture, dated as of December 16, 2003, between Wyeth and The Bank of New York Mellon (as successor to JPMorgan Chase Bank, N.A.), as trustee, is incorporated by reference from Wyeth\u2019s 2003 Annual Report on Form 10-K.\n4.14\nSixth Supplemental Indenture, dated as of November 14, 2005, between Wyeth and The Bank of New York Mellon (as successor to JPMorgan Chase Bank, N.A.), as trustee, is incorporated by reference from Wyeth\u2019s Current Report on Form 8-K filed on November 15, 2005.\n4.15\nSeventh Supplemental Indenture, dated as of March 27, 2007, between Wyeth and The Bank of New York Mellon (as successor to JPMorgan Chase Bank, N.A.), as trustee, is incorporated by reference from Wyeth\u2019s Current Report on Form 8-K filed on March 28, 2007.\nPfizer Inc.\n2025 Form 10-K\n108\n4.16\nEighth Supplemental Indenture, dated as of October 30, 2009, between Wyeth, us and The Bank of New York Mellon (as successor to JPMorgan Chase Bank, formerly The Chase Manhattan Bank), as trustee, to Indenture dated as of April 10, 1992 (as amended on October 13, 1992), is incorporated by reference from our Current Report on Form 8-K filed on November 3, 2009.\n4.17\nIndenture, dated as of September 7, 2018, between us and The Bank of New York Mellon, as trustee, is incorporated by reference from our Current Report on Form 8-K filed on September 7, 2018.\n4.18\nFirst Supplemental Indenture, dated as of September 7, 2018, between us and The Bank of New York Mellon, as trustee, is incorporated by reference from our Current Report on Form 8-K filed on September 7, 2018.\n4.19\nSecond Supplemental Indenture, dated as of March 11, 2019, between us and The Bank of New York Mellon, as trustee, is incorporated by reference from our Current Report on Form 8-K filed on March 11, 2019.\n4.20\nThird Supplemental Indenture, dated as of March 27, 2020, between us and The Bank of New York Mellon, as trustee, is incorporated by reference from our Current Report on Form 8-K filed on March 27, 2020.\n4.21\nFourth Supplemental Indenture, dated as of May 28, 2020, between us and The Bank of New York Mellon, as trustee, is incorporated by reference from our Current Report on Form 8-K filed on May 28, 2020.\n4.22\nFifth Supplemental Indenture, dated as of August 18, 2021 between us and The Bank of New York Mellon, as trustee, is incorporated by reference from our Current Report on Form 8-K filed on August 18, 2021.\n4.23\nSixth Supplemental Indenture, dated as of November 21, 2025, between us and The Bank of New York Mellon, as trustee, is incorporated by reference from our Current Report on Form 8-K filed on November 21, 2025.\n4.24\nIndenture, dated as of May 19, 2023, among Pfizer Investment Enterprises Pte. Ltd., us and The Bank of New York Mellon, as trustee, is incorporated by reference from our Current Report on Form 8-K filed on May 19, 2023.\n4.25\nFirst Supplemental Indenture, dated as of May 19, 2023, among Pfizer Investment Enterprises Pte. Ltd., us and The Bank of New York Mellon, as trustee, is incorporated by reference from our Current Report on Form 8-K filed on May 19, 2023.\n4.26\nIndenture, dated as of May 19, 2025, among Pfizer Netherlands International Finance B.V., us and The Bank of New York Mellon, as trustee, is incorporated by reference from our Current Report on Form 8-K filed on May 19, 2025.\n4.27\nFirst Supplemental Indenture, dated as of May 19, 2025, among Pfizer Netherlands International Finance B.V., us and The Bank of New York Mellon, as trustee, is incorporated by reference from our Current Report on Form 8-K filed on May 19, 2025.\n*\n4.28\nDescription of Pfizer\u2019s Securities.\n4.29\nExcept as set forth in Exhibits 4.1-4.28 above, the instruments defining the rights of holders of long-term debt securities of the Company and its subsidiaries have been omitted.\n\nWe agree to furnish to the SEC, upon request, a copy of each instrument with respect to issuances of long-term debt of the Company and its subsidiaries.\n10.1\nPfizer Inc. 2004 Stock Plan, as Amended and Restated is incorporated by reference from our 2011 Annual Report on Form 10-K.\n10.2\nAmendment No. 1 to Pfizer 2004 Stock Plan is incorporated by reference from our 2020 Annual Report on Form 10-K.\n10.3\nPfizer Inc. 2014 Stock Plan is incorporated by reference from our Proxy Statement for the 2014 Annual Meeting of Shareholders.\n10.4\nAmendment No. 1 to Pfizer Inc. 2014 Stock Plan is incorporated by reference from our 2020 Annual Report on Form 10-K.\n10.5\nForm of Acknowledgment and Consent and Summary of Key Terms for Grants of RSUs, TSRUs, PPSs and PSAs is incorporated by reference from our Quarterly Report on Form 10-Q for the period ended April 2, 2023.\n10.6\nForm of Executive Grant Letter is incorporated by reference from our 2015 Annual Report on Form 10-K.\n1\n0.7\nForm of Acknowledgment and Consent and Summary of Key Terms for Grants of RSUs, TSRUs, PPSs and PSAs is incorporated by reference from our Quarterly Report on Form 10-Q for the period ended March 30, 2025.\n10.8\nForm of Executive Grant Letter is incorporated by reference from our Quarterly Report on Form 10-Q for the period ended March 30, 2025.\n10.9\nPfizer Consolidated Supplemental Pension Plan for United States and Puerto Rico Employees is incorporated by reference from our 2017 Annual Report on Form 10-K.\n10.10\nAmendment No. 1 to the Pfizer Consolidated Supplemental Pension Plan for United States and Puerto Rico Employees is incorporated by reference from our 2018 Annual Report on Form 10-K.\n10.11\nAmendment No. 2 to the Pfizer Consolidated Supplemental Pension Plan for United States and Puerto Rico Employees is incorporated by reference from our 2020 Annual Report on Form 10-K.\n10.12\nAmendment No. 3 to the Pfizer Consolidated Supplemental Pension Plan for United States and Puerto Rico Employees is incorporated by reference from our 2022 Annual Report on Form 10-K.\n10.13\nAmendment No. 4 to the Pfizer Consolidated Supplemental Pension Plan for United States and Puerto Rico Employees is incorporated by reference from our 2023 Annual Report on Form 10-K.\n10.14\nPfizer Supplemental Savings Plan is incorporated by reference from our Quarterly Report on Form 10-Q for the period ended April 3, 2016.\n10.15\nAmendment No. 1 to the Pfizer Supplemental Savings Plan (Amended and Restated as of January 1, 2016), is incorporated by reference from our Quarterly Report on Form 10-Q for the period ended October 1, 2017.\n10.16\nAmendment No. 2 to the Pfizer Supplemental Savings Plan is incorporated by reference from our 2017 Annual Report on Form 10-K.\nPfizer Inc.\n2025 Form 10-K\n109\n10.17\nAmendment No. 3 to the Pfizer Supplemental Savings Plan is incorporated by reference from our Quarterly Report on Form 10-Q for the period ended September 30, 2018.\n10.18\nAmendment No. 4 to the Pfizer Supplemental Savings Plan is incorporated by reference from our 2018 Annual Report on Form 10-K.\n10.19\nAmendment No. 5 to the Pfizer Supplemental Savings Plan is incorporated by reference from our 2018 Annual Report on Form 10-K.\n10.20\nAmendment No. 6 to the Pfizer Supplemental Savings Plan is incorporated by reference from our Quarterly Report on Form 10-Q for the period ended June 30, 2019.\n10.21\nAmendment No. 7 to the Pfizer Supplemental Savings Plan is incorporated by reference from our 2019 Annual Report on Form 10-K.\n10.22\nAmendment No. 8 to the Pfizer Supplemental Savings Plan is incorporated by reference from our 2020 Annual Report on Form 10-K.\n10.23\nAmendment No. 9 to the Pfizer Supplemental Savings Plan is incorporated by reference from our 2020 Annual Report on Form 10-K.\n10.24\nAmendment No. 10 to the Pfizer Supplemental Savings Plan is incorporated by reference from our 2022 Annual Report on Form 10-K.\n*\n10.25\nAmended and Restated Pfizer Inc. Global Performance Plan.\n10.26\nAmended and Restated Deferred Compensation Plan (adopted in 2024) is incorporated by reference from our 2023 Annual Report on Form 10-K.\n10.27\nWyeth 2005 (409A) Deferred Compensation Plan (frozen as of January 2012), together with certain Amendments, is incorporated by reference from our 2013 Annual Report on Form 10-K.\n10.28\nAmendment No. 2 to Wyeth 2005 (409A) Deferred Compensation Plan is incorporated by reference from our 2020 Annual Report on Form 10-K.\n10.29\nAmended and Restated Wyeth Supplemental Employee Savings Plan (effective as of January 1, 2005 and frozen as of January 2012), together with all material Amendments is incorporated by reference from our 2011 Annual Report on Form 10-K.\n10.30\nAmendment to Amended and Restated Wyeth Supplemental Employee Savings Plan, dated June 20, 2013, is incorporated by reference from our 2013 Annual Report on Form 10-K.\n10.31\nThe form of Indemnification Agreement with each of our non-employee Directors is incorporated by reference from our 1996 Annual Report on Form 10-K.\n10.32\nThe form of Indemnification Agreement with each of the Named Executive Officers identified in our Proxy Statement for the 2025 Annual Meeting of Shareholders is incorporated by reference from our 1997 Annual Report on Form 10-K.\n10.33\nPfizer Inc. Executive Severance Plan is incorporated by referenced from our Current Report on Form 8-K filed on February 20, 2009.\n10.34\nAmendment No. 1 to the Pfizer Inc. Executive Severance Plan is incorporated by reference from our 2018 Annual Report on Form 10-K.\n10.35\nAmendment No. 2 to the Pfizer Inc. Executive Severance Plan is incorporated by reference from our 2019 Annual Report on Form 10-K.\n10.36\nAmendment No. 3 to the Pfizer Inc. Executive Severance Plan is incorporated by reference from our 2020 Annual Report on Form 10-K.\n10.37\nAmendment No. 4 to the Pfizer Inc. Executive Severance Plan is incorporated by reference from our 2022 Annual Report on Form 10-K.\n*\n10.38\nNonfunded Deferred Compensation and Unit Award Plan for Non-Employee Directors, as amended.\n10.39\nPfizer Inc. 2019 Stock Plan is incorporated by reference from our Proxy Statement for the 2019 Annual Meeting of Shareholders.\n10.40\nPfizer Inc. Amended and Restated 2019 Stock Plan is incorporated by reference from our Proxy Statement for the 2024 Annual Meeting of Shareholders.\n10.41\nTime Sharing Agreement, dated July 9, 2020, between Pfizer Inc. and Albert Bourla is incorporated by reference from our Quarterly Report on Form 10-Q for the period ended June 28, 2020.\n10.42\nPfizer Inc. Executive Officer Cash Severance Policy is incorporated by reference from our Quarterly Report on Form 10-Q for the period ended July 2, 2023.\n19\nCorporate Policy 604A: Prohibition on Insider Trading is incorporated by reference from our 2024 Annual Report on Form 10-K.\n*\n21\nSubsidiaries of the Company.\n*\n22\nSubsidiary Issuers of Guaranteed Securities.\n*\n23\nConsent of Independent Registered Public Accounting Firm.\n*\n24\nPower of Attorney (included as part of signature page).\n*\n31.1\nCertification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n*\n31.2\nCertification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\n*\n32.1\nCertification by the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n*\n32.2\nCertification by the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n97\nPfizer Inc. Recoupment Policy is incorporated by reference from our 2024 Annual Report on Form 10-K.\nExhibit 101:\nPfizer Inc.\n2025 Form 10-K\n110\n*101.INS\nXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\n*101.SCH\nInline XBRL Taxonomy Extension Schema\n*101.CAL\nInline XBRL Taxonomy Extension Calculation Linkbase\n*101.LAB\nInline XBRL Taxonomy Extension Label Linkbase\n*101.PRE\nInline XBRL Taxonomy Extension Presentation Linkbase\n*101.DEF\nInline XBRL Taxonomy Extension Definition Document\n104\nCover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\nITEM\u00a016.\nFORM 10-K SUMMARY\nNone.\nSIGNATURES\nUnder the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report was signed on behalf of the Registrant by the authorized person named below.\nPfizer Inc.\nDated: February\u00a026, 2026\nBy:\n/S/\u00a0\u00a0\u00a0\u00a0MARGARET M. MADDEN\nMargaret M. Madden\nSenior Vice\u00a0President\u00a0and\u00a0Corporate\u00a0Secretary\nChief Governance Counsel\nWe, the undersigned directors and officers of Pfizer Inc., hereby severally constitute Douglas M. Lankler and Margaret M. Madden, and each of them singly, our true and lawful attorneys with full power to them and each of them to sign for us, in our names in the capacities indicated below, any and all amendments to this Annual Report on Form 10-K filed with the Securities and Exchange Commission.\nUnder the requirements of the Securities Exchange Act of 1934, this report was signed by the following persons on behalf of the Registrant and in the capacities and on the date indicated\n.\nPfizer Inc.\n2025 Form 10-K\n111\nSignature\nTitle\nDate\n/S/\u00a0\u00a0\u00a0\u00a0ALBERT BOURLA\nAlbert Bourla\nChairman, Chief Executive Officer and Director\n(Principal Executive Officer)\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0DAVID M. DENTON\nDavid M. Denton\nChief Financial Officer, Executive Vice President\n(Principal Financial Officer)\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0JENNIFER B. DAMICO\nJennifer B. Damico\nSenior Vice President and Controller\n(Principal Accounting Officer)\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0RONALD E. BLAYLOCK\nRonald E. Blaylock\nDirector\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0MORTIMER J. BUCKLEY\nMortimer J. Buckley\nDirector\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0SUSAN DESMOND-HELLMANN\nSusan Desmond-Hellmann\nDirector\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0JOSEPH J. ECHEVARRIA\nJoseph J. Echevarria\nDirector\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0SCOTT GOTTLIEB\nScott Gottlieb\nDirector\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0SUSAN HOCKFIELD\nSusan Hockfield\nDirector\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0DAN R. LITTMAN\nDan R. Littman\nDirector\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0SHANTANU NARAYEN\nShantanu Narayen\nDirector\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0SUZANNE NORA JOHNSON\nSuzanne Nora Johnson\nDirector\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0JAMES QUINCEY\nJames Quincey\nDirector\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0JAMES C. SMITH\nJames C. Smith\nDirector\nFebruary 26, 2026\n/S/\u00a0\u00a0\u00a0\u00a0CYRUS TARAPOREVALA\nCyrus Taraporevala\nDirector\nFebruary 26, 2026\nPfizer Inc.\n2025 Form 10-K\n112\n", "ground_truth": {"cover": {"company_name": "PFIZER INC", "cik": "0000078003", "ticker": "PFE", "form_type": "10-K", "fiscal_year_end": "2025-12-31", "filing_date": "2026-02-26"}, "financials": {"currency": "USD", "fiscal_year": 2025, "revenue": 62579000000.0, "cost_of_revenue": 16067000000.0, "net_income": 7771000000.0, "eps_basic": 1.37, "eps_diluted": 1.36, "cash_and_equivalents": 1142000000.0, "total_assets": 208160000000.0, "total_equity": 86775000000.0, "total_debt": 67792000000.0, "operating_cash_flow": 11704000000.0}, "top_risk_factors": []}}
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STATES\nSECURITIES AND EXCHANGE COMMISSION\nWashington, D.C. 20549\n___________________________________________\nFORM\n10-K\n___________________________________________\n\n\u2612\nAnnual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934\nFor the fiscal year ended\nJanuary 31\n, 2026\n, or\n\u2610\nTransition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934\nCommission file number\n001-06991\n.\n\n___________________________________________\n\nWalmart Inc.\n(Exact name of registrant as specified in its charter)\n___________________________________________\n\nDelaware\n71-0415188\n(State or other jurisdiction of\nincorporation or organization)\n(IRS Employer Identification No.)\n1 Customer Drive\n72716\nBentonville,\nAR\n(Address of principal executive offices)\n(Zip Code)\nRegistrant's telephone number, including area code: (\n479\n)\n273-4000\n\nSecurities registered pursuant to Section\u00a012(b) of the Act:\nTitle of each 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the registrant is not required to file reports pursuant to Section\u00a013 or Section\u00a015(d) of the Exchange\u00a0Act.\n      Yes\n\u00a8\n\nNo\n\n\u00fd\nIndicate by check mark whether the registrant (1)\u00a0has filed all reports required to be filed by Section\u00a013 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)\u00a0has been subject to such filing requirements for at least the past 90 days.\n\nYes\n\n\u00fd\n\u00a0\u00a0\u00a0\u00a0No\n\u00a8\nIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (\u00a7232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).\n\nYes\n\n\u00fd\n\u00a0\u00a0\u00a0\u00a0No\n\u00a8\nIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of \"large accelerated filer,\" \"accelerated filer,\" \"smaller reporting company\" and \"emerging growth company\" in Rule 12b-2 of the Exchange Act.\nLarge Accelerated Filer\n\n\u2612\n\nAccelerated\u00a0Filer\n\n\u2610\nNon-Accelerated Filer\n\n\u2610\n\nSmaller\u00a0Reporting\u00a0Company\n\n\u2610\nEmerging Growth Company\n\u2610\nIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.\n\u2610\n\nIndicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.\n\u2612\nIf securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.\n\u00a8\nIndicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to \u00a7240.10D-1(b).\n\u00a8\nIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).\n      Yes\n\u2610\n\u00a0\u00a0\u00a0\u00a0No\n\u2612\nAs of July\u00a031, 2025, the aggregate market value of the voting common stock of the registrant held by non-affiliates of the registrant, based on the closing sale price of those shares on the New York Stock Exchange reported on July\u00a031, 2025, was $\n391,703,475,732\n. For the purposes of this disclosure only, the registrant has assumed that its directors, executive officers (as defined in Rule 3b-7 under the Exchange Act) and the beneficial owners of 5% or more of the registrant's outstanding common stock are the affiliates of the registrant.\nThe registrant had\n7,972,402,501\n shares of common stock outstanding as of March\u00a011, 2026.\nDOCUMENTS INCORPORATED BY REFERENCE\nDocument\n\nParts\u00a0Into\u00a0Which Incorporated\nPortions of the registrant's Proxy Statement for the Annual Meeting of Shareholders to be held June 4, 2026 (the \"Proxy Statement\")\n\nPart III\nWalmart Inc.\nForm 10-K\nFor the Fiscal Year Ended January\u00a031, 2026\nTable of Contents\nPage\nPart I\nItem 1\nBusiness\n6\nItem 1A\nRisk Factors\n13\nItem 1B\nUnresolved Staff Comments\n27\nItem 1C\nCybersecurity\n27\nItem 2\nProperties\n29\nItem 3\nLegal Proceedings\n30\nItem 4\nMine Safety Disclosures\n30\nPart II\nItem 5\nMarket for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities\n31\nItem 6\nReserved\n32\nItem 7\nManagement's Discussion and Analysis of Financial Condition and Results of Operations\n33\nItem 7A\nQuantitative and Qualitative Disclosures About Market Risk\n46\nItem 8\nFinancial Statements and Supplementary Data\n48\nItem 9\nChanges in and Disagreements with Accountants on Accounting and Financial Disclosure\n80\nItem 9A\nControls and Procedures\n80\nItem 9B\nOther Information\n81\nItem 9C\nDisclosure Regarding Foreign Jurisdictions that Prevent Inspections\n81\nPart III\nItem 10\nDirectors, Executive Officers and Corporate Governance\n82\nItem 11\nExecutive Compensation\n82\nItem 12\nSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters\n82\nItem 13\nCertain Relationships and Related Transactions, and Director Independence\n82\nItem 14\nPrincipal Accounting Fees and Services\n82\nPart IV\nItem 15\nExhibits, Financial Statement Schedules\n83\nItem 16\nForm 10-K Summary\n85\nSignatures\n86\nWALMART INC.\nANNUAL REPORT ON FORM 10-K\nFOR THE FISCAL YEAR ENDED JANUARY 31, 2026\nAll references in this Annual Report on Form 10-K, the information incorporated into this Annual Report on Form 10-K by reference to information in the Proxy Statement of Walmart Inc. for its Annual Shareholders' Meeting to be held on June 4, 2026 and in the exhibits to this Annual Report on Form 10-K to \"Walmart Inc.,\" \"Walmart,\" \"the Company,\" \"our Company,\" \"we,\" \"us\" and \"our\" are to the Delaware corporation named \"Walmart Inc.\" and, except where expressly noted otherwise or the context otherwise requires, that corporation's consolidated subsidiaries.\nPART I\nCautionary Statement Regarding Forward-Looking Statements\nThis Annual Report on Form 10-K and other reports, statements and information that Walmart Inc. (which individually or together with its subsidiaries, as the context otherwise requires, is referred to as \"we,\" \"Walmart\" or the \"Company\") has filed with or furnished to the Securities and Exchange Commission (\"SEC\") or may file with or furnish to the SEC in the future, and prior or future public announcements and presentations that we or our management have made or may make, include or may include, or incorporate or may incorporate by reference, statements that may be deemed to be \"forward-looking statements\" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the \"Exchange Act\"), that are intended to enjoy the protection of the safe harbor for forward-looking statements provided by the Exchange Act as well as protections afforded by other federal securities laws.\nNature of Forward-Looking Statements\nSuch forward-looking statements are not statements of historical facts, but instead express our estimates or expectations for our consolidated, or one of our segment's, economic performance or results of operations for future periods or as of future dates or events or developments that may occur in the future or discuss our plans, objectives or goals. These forward-looking statements may relate to:\n\u2022\nmacroeconomic, geopolitical, and business conditions, trends and events around the world and in the markets in which we operate, including inflation or deflation, generally, and in certain product categories, the impact of supply chain challenges, tariffs and recessionary pressures;\n\u2022\nchanges or modifications in tariff rates, exemptions therefrom or the imposition of new tariffs or new taxes on imports, and changes or modifications in trade restrictions or the imposition of new trade restrictions;\n\u2022\nthe growth of our business or change in our competitive position in the future, or in or over particular periods, both generally, and with respect to particular markets, segments or lines of business, including, but not limited to, advertising, fulfillment, healthcare and financial services;\n\u2022\nthe amount, number, growth, increase, reduction or decrease in or over certain periods, of or in certain financial items or measures or operating measures, including our earnings per share, net sales, growth rates, comparable store and club sales, our eCommerce sales, liabilities, expenses of certain categories, including share-based compensation, expense leverage, operating income, returns, capital and operating investments or expenditures of particular types and new store and club openings, inventory levels and associated costs, product mix and demand for certain merchandise, consumer confidence, disposable income, credit availability, spending levels, shopping patterns and debt levels;\n\u2022\nour increasing investments in eCommerce, technology (including the use of artificial intelligence \"AI\"), automation, supply chain, new stores and clubs as well as remodels and other omnichannel customer initiatives, such as same day pickup and delivery;\n\u2022\ninvestments and capital expenditures we will make and how certain of those investments and capital expenditures are expected to be financed;\n\u2022\nour workforce strategy, including the availability of necessary personnel to staff our stores, clubs and other facilities and the potential impact of changes to the costs of labor;\n\u2022\nvolatility in currency exchange rates affecting our consolidated, or one or more of our segments' results of operations;\n\u2022\nthe Company continuing to provide returns to shareholders through share repurchases and dividends, the use of share repurchase authorization over a certain period or the source of funding of a certain portion of our share repurchases;\n\u2022\nour sources of liquidity, including our cash, continuing to be adequate or sufficient to fund our operations, finance our global investment and expansion activities, pay dividends and fund share repurchases;\n\u2022\ncash flows from operations, our current cash position and access to capital markets or credit will continue to be sufficient to meet our anticipated operating cash needs;\n\u2022\nour effective tax rate for certain periods and the realization of certain net deferred tax assets and the effects of resolutions of tax-related matters;\n4\n\u2022\nthe adoption or creation of new, and modification of existing, governmental policies, programs, initiatives and actions in the markets in which we operate and elsewhere and actions with respect to such policies, programs and initiatives (including, but not limited to, changes in the enforcement priorities of regulatory authorities);\n\u2022\nthe effect of adverse decisions in, or settlement of, litigation or other proceedings or investigations to which we are subject, and the liabilities, obligations and expenses, if any, that we may incur in connection therewith, including expenses pertaining to general liability claims, for which we self-insure;\n\u2022\nthe effect on our results of operations or financial position of our adoption of certain new, or amendments to existing, accounting standards; or\n\u2022\nour commitments, intentions, plans or goals related to our shared value priorities, including, but not limited to, the sustainability of our environment and supply chains, the promotion of economic opportunity or other societal initiatives.\nOur forward-looking statements may also include statements of our strategies, plans and objectives for our operations, including areas of future focus in our operations, and the assumptions underlying any of the forward-looking statements we make. The forward-looking statements we make can typically be identified by the use therein of words and phrases such as \"aim,\" \"anticipate,\" \"believe,\" \"continue,\" \"could be,\" \"could increase,\" \"could occur,\" \"could result,\" \"estimate,\" \"expansion,\" \"expect,\" \"expectation,\" \"expected to be,\" \"focus,\" \"forecast,\" \"goal,\" \"grow,\" \"guidance,\" \"intend,\" \"invest,\" \"is expected,\" \"may continue,\" \"may fluctuate,\" \"may grow,\" \"may impact,\" \"may result,\" \"objective,\" \"plan,\" \"priority,\" \"project,\" \"should,\" \"strategy,\" \"to be,\" \"we'll,\" \"we will,\" \"will add,\" \"will allow,\" \"will be,\" \"will benefit,\" \"will change,\" \"will come in at,\" \"will continue,\" \"will decrease,\" \"will grow,\" \"will have,\" \"will impact,\" \"will include,\" \"will increase,\" \"will open,\" \"will remain,\" \"will result,\" \"will stay,\" \"will strengthen,\" \"would be,\" \"would decrease\" and \"would increase,\" variations of such words or phrases, other phrases commencing with the word \"will\" or similar words and phrases denoting anticipated or expected occurrences or results.\nThe forward-looking statements that we make or that are made by others on our behalf are based on our knowledge of our business and our operating environment and assumptions that we believe to be or will believe to be reasonable when such forward-looking statements were or are made. As a consequence of the factors described above, the other risks, uncertainties and factors we disclose below and in the other reports as mentioned above, other risks not known to us at this time, changes in facts, assumptions not being realized or other circumstances, our actual results may differ materially from those discussed in or implied or contemplated by our forward-looking statements. Consequently, this cautionary statement qualifies all forward-looking statements we make or that are made on our behalf, including those made herein and incorporated by reference herein. We cannot assure you that the results or developments expected or anticipated by us will be realized or, even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business, our operations or our operating results in the manner or to the extent we expect. We caution readers not to place undue reliance on such forward-looking statements, which speak only as of their dates. We undertake no obligation to revise or update any of the forward-looking statements to reflect subsequent events or circumstances except to the extent required by applicable law.\n5\nITEM\u00a01.\nBUSINESS\nGeneral\nWalmart Inc. (\"Walmart,\" the \"Company\" or \"we\") is a people-led, technology-powered omnichannel retailer dedicated to helping people around the world save money and live better by providing the opportunity to shop in both retail stores and through eCommerce, and to access our other service offerings. Through innovation, we strive to continuously improve a customer-centric experience that seamlessly integrates our eCommerce and retail stores in an omnichannel offering that saves time for our customers. Each week, we serve approximately 280 million customers who visit more than 10,900 stores in 19 countries and through our numerous eCommerce websites and mobile applications.\nOur strategy is to make every day easier for busy families, operate with discipline, sharpen our culture and become more digital, and make trust a competitive advantage. Making life easier for busy families includes our commitment to price leadership, which has been and will remain a cornerstone of our business, as well as increasing convenience to save our customers time. By leading on price, we earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices (\"EDLP\"). EDLP is our pricing philosophy under which we price items at a low price every day so our customers trust that our prices will not change under frequent promotional activity. Everyday low cost (\"EDLC\") is our commitment to control expenses so our cost savings can be passed along to our customers.\nOur operations comprise three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. Our fiscal year ends on January 31 for our United States (\"U.S.\") and Canadian operations. We consolidate all other operations generally using a one-month lag and on a calendar year basis. Our discussion is as of, and for the fiscal years ended, January\u00a031, 2026 (\"fiscal 2026\"), January\u00a031, 2025 (\"fiscal 2025\") and January\u00a031, 2024 (\"fiscal 2024\"). During fiscal 2026, we generated total revenues of $713.2 billion, which primarily comprised net sales of $706.4 billion.\nWe maintain our principal offices in Bentonville, Arkansas. Our common stock trades on the Nasdaq Global Select Market under the symbol \"WMT.\"\nThe Development of Our Company\nThe businesses conducted by our founders began in 1945 when Sam M. Walton opened a franchise Ben Franklin variety store in Newport, Arkansas. In 1946, his brother, James L. Walton, opened a similar store in Versailles, Missouri. Until 1962, our founders' business was devoted entirely to the operation of variety stores, at which time we began to open discount stores. We completed our initial public offering in 1970. In 1983, we opened our first Sam's Club, and in 1988, we opened our first supercenter. In 1998, we opened our first Walmart Neighborhood Market. In 1991, we began our first international initiative when we entered into a joint venture in Mexico and, as of January\u00a031, 2026, our Walmart International segment conducted business in 18 countries.\nIn 1996, we began our first eCommerce initiative by creating both walmart.com and samsclub.com. Since then, our eCommerce presence has continued to grow. In 2007, leveraging our physical stores, walmart.com launched its Site-to-Store service, enabling customers to make a purchase online and pick up merchandise in stores. Today, customers can access pickup or delivery services at over 8,400 locations globally, reflecting our ability to leverage our store and club footprint to expand customer access. In 2018, we expanded our eCommerce and digital presence through acquisitions with our majority stakes in Flipkart and PhonePe in India. We continue to heavily invest in omnichannel and eCommerce innovation, as well as supply chain capabilities, which enables us to leverage technology, talent and expertise, and expand our assortment and service offerings, including through the integration of advanced technologies such as AI.\nWe are enhancing our omnichannel capabilities through a combination of stores, eCommerce websites, mobile applications and service offerings, as well as our supply chain, combined with approximately 2.1 million associates as of January\u00a031, 2026, to better serve our customers. Our strategies increasingly include the use of AI-powered tools to support customer and member-facing experiences, associate productivity and operational efficiency across our ecosystem. Together, these elements produce a global retail ecosystem that we believe allows customers to view Walmart as their primary retail destination. As we execute on our strategy globally, our business continues to expand through offerings such as membership, advertising, marketplace and fulfillment services, and financial services. These offerings represent mutually reinforcing pieces of our omnichannel model centered on our customers around the world who are increasingly seeking convenience.\nInformation About Our Segments\nWe are engaged in global operations of retail, wholesale and other units, as well as eCommerce, located throughout the U.S., Africa, Canada, Central America, Chile, China, India and Mexico. Our operations are conducted in three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S., which are further described below. Each segment contributes to the Company's operating results differently. However, each has generally maintained a consistent contribution rate to the Company's net sales in recent years other than minor changes to the contribution rate for the Walmart International segment due to fluctuations in currency exchange rates. Additional information on our operating segments and geographic information is contained in\nNote\n1\n1\n to our Consolidated Financial Statements.\n6\nWalmart U.S. Segment\nWalmart U.S. is our largest segment and operates 4,611 stores in the U.S., including in all 50 states, Washington D.C. and Puerto Rico. Walmart U.S. is a mass merchandiser of consumer products, operating under the \"Walmart\" and \"Walmart Neighborhood Market\" brands, as well as walmart.com and the Walmart mobile application. Walmart U.S. had net sales of $483.0 billion for fiscal 2026, representing 68% of our fiscal 2026 consolidated net sales, and had net sales of $462.4 billion and $441.8 billion for fiscal 2025 and 2024, respectively.\nOmnichannel.\n Walmart U.S. provides a convenient and seamless omnichannel experience to customers, integrating retail stores and eCommerce. Substantially all our stores provide same-day pickup and delivery, offering expedited delivery options that enable us to reach customers faster and in the ways they prefer, including in-home delivery and digital pharmacy fulfillment. Our Walmart+ membership offering provides enhanced omnichannel shopping benefits including unlimited free shipping on eligible items with no order minimum, unlimited delivery from store, fuel discounts, mobile Scan & Go and access to additional member benefits.\nMerchandise and Other Offerings.\n Walmart U.S. does business primarily in three strategic merchandise units, listed below:\n\u2022\nGrocery consists of a full line of grocery items, including dry grocery, snacks, dairy, meat, produce, deli and bakery, frozen foods, alcoholic and nonalcoholic beverages, as well as consumables such as health and beauty aids, pet supplies, household chemicals, paper goods and baby products;\n\u2022\nGeneral merchandise includes:\n\u25e6\nEntertainment (e.g., electronics, toys, seasonal merchandise, wireless, video games, movies, music and books);\n\u25e6\nHardlines (e.g., automotive, hardware and paint, sporting goods, outdoor living and stationery);\n\u25e6\nFashion (e.g., apparel for adults and children, as well as shoes, jewelry and accessories); and\n\u25e6\nHome (e.g., housewares and small appliances, bed and bath, furniture and home organization, home furnishings, home decor, fabrics and crafts).\n\u2022\nHealth and wellness includes pharmacy, over-the-counter drugs and other medical products, and optical services.\nPeriodically, revisions are made to the categorization of the components comprising our strategic merchandise units. When revisions are made, the previous periods' presentation is adjusted to maintain comparability.\nBrand name merchandise represents a significant portion of the merchandise sold in Walmart U.S. We also market lines of merchandise under our private brands, including brands such as: \"Athletic Works,\" \"bettergoods,\" \"Equate,\" \"Free Assembly,\" \"Freshness Guaranteed,\" \"George,\" \"Great Value,\" \"Holiday Time,\" \"Hyper Tough,\" \"Joyspun,\" \"Kid Connection,\" \"Mainstays,\" \"Marketside,\" \"No Boundaries,\" \"onn.,\" \"Ozark Trail,\" \"Parent's Choice,\" \"Sam's Choice,\" \"Scoop,\" \"Spring Valley,\" \"Time and Tru,\" \"Way to Celebrate\" and \"Wonder Nation.\" The Company also markets lines of merchandise under licensed brands, some of which include: \"Avia,\" \"Better Homes\u00a0& Gardens,\" \"Sofia Jeans by Sofia Vergara\" and \"The Pioneer Woman.\"\nOther offerings in the Walmart U.S. business include advertising solutions for brands and online marketplace sellers, supply chain and fulfillment capabilities to online marketplace sellers, and data analytics and insights for suppliers and brands. Additional offerings include fuel, financial services and related products such as money orders, prepaid access, money transfers, check cashing, bill payment and certain types of installment lending.\nWalmart International Segment\nWalmart International is our second largest segment and operates 5,743 stores across 18 countries outside of the U.S. Walmart International operates through our wholly-owned subsidiaries in Canada, Chile, China, and Africa (which includes Botswana, Eswatini, Lesotho, Malawi, Mozambique, Namibia, South Africa and Zambia), and our majority-owned subsidiaries in India, as well as Mexico and Central America (which includes Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua).\nWalmart International includes numerous formats divided into two major categories: retail and wholesale. These categories consist of many formats, including: supercenters, supermarkets, warehouse clubs (including our membership-only Sam's Club format) and cash and carry, as well as eCommerce through websites and mobile applications, including walmart.com.mx, walmart.ca, flipkart.com, PhonePe, samclub.cn and other sites. Walmart International had net sales of $130.4 billion for fiscal 2026, representing 19% of our fiscal 2026 consolidated net sales, and had net sales of $121.9 billion and $114.6 billion for fiscal 2025 and 2024, respectively.\nWalmart International's purpose is to help millions of customers and members save money and live better every day by leveraging our global ecosystem and deep local expertise to provide access to affordable products and services. In addition, we share what we learn in our markets to help the enterprise innovate and grow even faster. We are deliberate about where and how we choose to operate to best enable long-term, sustainable and profitable growth.\n7\nOmnichannel.\n Walmart International provides a convenient and seamless omnichannel experience to customers, integrating retail stores and eCommerce, such as through our pickup and delivery services from approximately 3,300 locations across all of our markets, including same-day and expedited delivery options across our markets. We continue to expand our marketplace offerings, which further enhances our fulfillment and advertising services.\nMerchandise and Other Offerings.\n The merchandising strategy for Walmart International is similar to that of our operations in the U.S. in terms of the breadth and scope of merchandise offered for sale. While brand name merchandise accounts for a majority of our sales, we have both leveraged U.S. private brands and developed market specific private brands to serve our customers with high quality, low priced items. Along with the private brands we market globally, such as \"Equate,\" \"George,\" \"Great Value,\" \"Holiday Time,\" \"Mainstays,\" \"Marketside,\" \"Member's Mark\" and \"Parent's Choice,\" our international markets have developed market specific brands including \"Aurrera\" and \"Lider.\" In addition, we have developed and continue to grow our relationships with regional and local suppliers in each market to ensure reliable sources of quality merchandise that is equal to national brands at low prices. Consistent with its strategy, Walmart International continues to build mutually reinforcing businesses in areas such as advertising, marketplace and fulfillment services, financial services and healthcare.\nSam's Club U.S. Segment\nSam's Club U.S. is a membership-only warehouse club that operates 601 clubs in 44 states in the U.S. and Puerto Rico and also operates samsclub.com and the Sam's Club mobile application. Sam's Club U.S. had net sales of $93.0 billion for fiscal 2026, representing 13% of our consolidated fiscal 2026 net sales, and had net sales of $90.2 billion and $86.2 billion for fiscal 2025 and 2024, respectively. As a membership-only club, membership income is a significant component of the segment's operating income.\nMembership.\n The following two membership tiers are available: Club membership for a $50 annual fee and Plus membership for a $110 annual fee. All memberships include a spouse/household card at no additional cost, and members may purchase add-on memberships for $45 each, subject to tier-based limits. Club members are eligible for free curbside pickup, and Plus members receive additional benefits including free delivery-from-club and free shipping on orders of $50 or greater, exclusive discounts and convenience offers, and the ability to shop before regular shopping hours. Members may also earn Sam's Cash rewards on qualifying purchases that can be redeemed for cash, used for purchases, or used to pay membership fees.\nOmnichannel.\n Sam's Club U.S. provides a fast and seamless omnichannel experience to members, integrating physical clubs and eCommerce. Club-fulfilled curbside pickup and delivery provides fast and convenient ways to shop for members; Scan & Go mobile checkout and payment solution allows members to bypass the checkout line; and Just Go provides members with a friction-free exit experience.\nMerchandise and Other Offerings.\n Sam's Club U.S. offers merchandise in the following four merchandise categories:\n\u2022\nGrocery consists of dairy, meat, bakery, deli, produce, dry, chilled or frozen packaged foods, alcoholic and nonalcoholic beverages, floral, snack foods, candy, other grocery items, as well as consumables such as health and beauty aids, protein and nutrition, paper goods, laundry and home care, baby care, pet supplies and other consumable items;\n\u2022\nGeneral merchandise includes:\n\u25e6\nHome, hardlines and seasonal items (such as home improvement, outdoor living, gardening, furniture, apparel, jewelry, tools and power equipment, housewares, toys and mattresses); and\n\u25e6\nTechnology and entertainment items (such as consumer electronics and accessories, software, video games, office supplies, appliances and third-party gift cards).\n\u2022\nHealth and wellness includes pharmacy, optical and hearing services, and over-the-counter drugs; and\n\u2022\nFuel and other categories.\nPeriodically, revisions are made to the categorization of the components comprising our strategic merchandise units. When revisions are made, the previous periods' presentation is adjusted to maintain comparability.\nWithin the categories above, the Sam's Club Member's Mark private label brand offers premium-quality, \"Made Without\" products across a wide range of categories at competitive, value-driven prices, designed to meet the needs of members. We continue to expand its assortment to reinforce Sam's Club value proposition to our members.\nOther offerings in the Sam's Club U.S. business include advertising solutions for brands as well as operational insights and analytics for suppliers. Additional offerings include tire and battery installation services, photo and tech assistance, home and auto solutions, and certain financial services and related products.\n8\nAdditional Information About Our Business\nCompetition.\n\nWe compete with brick and mortar, eCommerce and omnichannel retailers operating discount, department, retail and wholesale grocery, drug, dollar, variety and specialty stores, supermarkets, supercenter-type stores, membership-only warehouse clubs, gasoline stations and social commerce platforms, as well as companies that offer services in digital advertising, fulfillment and delivery services, health and wellness and financial services. Our ability to develop and effectively operate different formats at the right locations and to deliver a customer-centric omnichannel experience largely determines our competitive position in the retail industry within the markets where we operate. Each of these landscapes is highly competitive and rapidly evolving, and new business models and the entry of new, well-funded competitors continue to intensify this competition. Some of our competitors have longer histories in these lines of business, more customers and greater brand recognition. They may be able to obtain more favorable terms from suppliers and business partners and to devote greater resources to the development of these businesses. In addition, for eCommerce and other internet-based businesses, newer or smaller businesses may be better able to innovate and compete with us.\nWe compete in a variety of ways, including the prices at which we sell our merchandise, merchandise and selection availability, services offered to customers, the quality of the products and services we offer, location, store and club hours, on-site amenities, the shopping convenience and overall shopping experience we offer, the attractiveness and ease of use of our digital platforms, cost and speed of and options for delivery to customers of merchandise purchased through our digital platforms or through our omnichannel integration of our physical and digital operations. We employ many strategies and programs designed to meet competitive pressures within our industry, which increasingly incorporate the use of AI-powered tools. These strategies include the following:\n\u2022\nEDLP: our pricing philosophy under which we price items at everyday low prices so our customers trust that our prices will not change under frequent promotional activity;\n\u2022\nEDLC: everyday low cost is our commitment to control expenses so our cost savings can be passed along to our customers;\n\u2022\nOmnichannel offerings such as pickup and delivery, all of which enhance convenience and seek to serve customers in the ways they want to be served;\n\u2022\nExpanding our ecosystem and the products and services we offer in areas such as digital advertising, marketplace and fulfillment services, health and wellness, and financial services to provide our customers a broader set of offerings to meet expanding needs;\n\u2022\nOpening new stores and clubs, as well as remodeling existing locations, to enhance the customer experience, support omnichannel capabilities, and strengthen our physical footprint in existing and new markets; and\n\u2022\nInvesting in technology, automation, and our associates to deliver growth, expand operating margins and improve returns.\nSeasonal Aspects of Operations.\n\nOur business is seasonal to a certain extent and varies by country due to different national and religious holidays, festivals and customs, as well as different weather patterns. Historically, our highest sales volume for each segment has occurred in the fourth quarter of our fiscal year.\nSuppliers, Supply Chain and Distribution.\n\nAs a retailer and warehouse club operator, we utilize a global supply chain that includes both U.S. and international suppliers from whom we purchase the merchandise that we sell in our stores, clubs and online. In many instances, we purchase merchandise from producers located near the stores and clubs in which such merchandise will be sold, particularly perishable items. Consistent with applicable laws, we offer our suppliers the opportunity to efficiently sell significant quantities of their products to us. These relationships enable us to obtain pricing that reflects the volume, certainty and cost-effectiveness these arrangements provide to such suppliers, which in turn enables us to provide low prices to our customers. Our suppliers are subject to standards of conduct, including requirements that they comply with local labor laws, local worker safety laws and other applicable laws. Our ability to acquire from our suppliers the assortment and volume of products we wish to offer to our customers, to receive those products within the required time through our supply chain and to distribute those products to our stores and clubs, determines, along with other supply chain logistics matters (such as containers or port access for example), in part, our in-stock levels in our stores and clubs and the attractiveness of our merchandise assortment we offer to our customers and members.\nWe continue to invest in supply chain automation and our fulfillment and delivery capabilities to better serve our customers. In the U.S., we utilize a network of 192 distribution facilities located strategically throughout the country using a combination of our private truck fleet as well as contracting with common carriers. During fiscal 2026, we began combining the Sam's Club U.S. supply chain function with Walmart U.S. to streamline operations and leverage our enterprise systems and infrastructure over time. Outside the U.S., we utilize a total of 179 distribution facilities strategically located in Africa, Canada, Central America, Chile, China, India and Mexico, which process and distribute both imported and domestic products to where our customers live. For fiscal 2026, the majority of our purchases of store and club merchandise were shipped through these facilities, while most of the remaining merchandise we purchased was shipped directly from suppliers to our stores and clubs. As an omnichannel retailer, we ship merchandise purchased by customers on our eCommerce platforms by a number of methods from multiple locations, including leveraging our network of stores and clubs to fulfill and deliver customer orders, as well as shipping directly from eCommerce fulfillment centers and other distribution facilities.\n9\nIntellectual Property.\n\nWe regard our trademarks, service marks, copyrights, patents, domain names, trade dress, trade secrets, proprietary technologies and similar intellectual property as important to our success, and with respect to our associates, customers and others, we rely on trademark, copyright, and patent laws, trade-secret protection, and confidentiality and/or license agreements to protect our proprietary rights. We have registered, or applied for the registration of, a number of U.S. and international domain names, trademarks, service marks and copyrights. Additionally, we have filed U.S. and international patent applications covering certain of our proprietary technology. We have licensed in the past, and expect that we may license in the future, certain of our proprietary rights to third parties.\nGovernment Regulation.\n\nAs a company with global operations, we are subject to the laws of the United States and multiple foreign jurisdictions in which we operate and the rules and regulations of various governing bodies, which may differ among jurisdictions. For additional information, see the risk factors herein in \"\nItem 1A. Risk Factors\n\" under the sub-caption \"Legal, Tax, Regulatory, Compliance, Reputational and Other Risks.\"\nOur Shared Value Priorities\nAs part of our purpose to help people save money and live better, we seek to operate our business in a way that creates shared value. We believe we maximize long-term value and competitive advantage by delivering for stakeholders, customers, associates, shareholders, suppliers, partners and communities. Addressing their needs strengthens our business by building trust, creating opportunity, managing cost and risk, developing future capabilities and reinforcing the systems on which we rely.\nWe prioritize stakeholder issues with the greatest potential to create long-term shared value \u2013 those most relevant to our business, important to stakeholder trust and where Walmart can make a meaningful impact.\n\u2022\nOpportunity\n. Expanding economic opportunity for associates, suppliers and communities helps us attract and retain talent, meet customer needs and strengthen resilience. As described further below, our workforce strategy focuses on preparing our workforce for the future by aligning skills with evolving business needs and investing in career pathways and learning. We also support supplier growth through development programs and sourcing from a diverse mix of local and global suppliers.\n\u2022\nSustainability\n. Walmart's sustainability efforts focus on enhancing the resilience of our operations and product value chai\nns to enhance surety of supply, catalyze innovation and growth, maintain everyday low cost and build stakeholder trust. Our priorities include reducing greenhouse gas emissions, regenerating natural resources, reducing product and packaging waste and supporting people who work in supply chains through responsible sourcing and the creation of economic opportunity.\n\u2022\nCommunity\n.\nWe serve customers globally through our omnichannel model and contribute to community vitality by providing quality jobs and training, investing in local suppliers, supporting causes important to customers and associates and assisting communities during crises and natural disasters.\n\u2022\nEthics and Integrity\n. We foster\n trust by promoting ethics and compliance, maintaining strong governance and oversight, engaging responsibly in public policy, using data and technology responsibly and respecting human rights.\n\nWe report periodically on these priorities through\nenvironmental, social and governance\n disclosures on our corporate website, which are not incorporated by reference into this Annual Report on Form 10-K or incorporated by reference into any of our other filings with the SEC.\nHuman Capital Management\nAs Walmart grows, the way we attract, develop and reward talent \u2013 and design how work gets done \u2013 evolves alongside our business. Our business is focused on serving people and this is delivered by our approximately 2.1 million associates around the world with approximately 1.6 million associates in the U.S. and approximately 0.5 million associates internationally. In the U.S., approximately 92% of our associates are hourly and approximately 68% of our associates are full-time. Our workforce strategy reflects our commitment to creating a future-ready workforce, supporting associate growth, and fostering a culture where associates can thrive.\nWorkforce Strategy and Enablement.\n Our workforce strategy focuses on aligning our organizational structure, talent capabilities and technology investments with the evolving needs of the business, including development of a digitally skilled, AI-enabled workforce. This includes preparing associates for new roles, technologies and ways of working, as well as deploying digital tools that support associate effectiveness, engagement and performance. As part of this effort, we are making everyday work simpler and more meaningful by reshaping roles to emphasize uniquely human strengths such as creativity and leadership and identifying areas where AI can automate repetitive tasks.\nWe are committed to maintaining fair and competitive workforce practices as we evolve how work gets done. We regularly review our workforce practices to support consistency, accountability and long-term sustainability, and we maintain a performance-based culture where associates are rewarded based on meaningful factors such as qualifications, experience, performance and the work they do.\n10\nAssociate Growth and Development.\n Investment in associate growth and development supports skill-building, leadership development and overall business performance. Development programs are designed to meet both individual and business needs, offering multiple career pathways and learning opportunities across roles, levels and geographies. Our development approach focuses on building leadership, technical and professional capabilities and equipping associates with the skills required for a changing environment. This includes company\u2011wide AI learning pathways and certifications designed to meet associates where they are.\nInternal career mobility is an important component of our talent model. Approximately 75% of U.S. salaried store, club and supply chain management associates began their careers in hourly positions, reflecting long\u2011term advancement opportunities within the Company.\nDevelopment is further supported through targeted programs such as Walmart Academy, which provides training in retail skills, leadership and well\u2011being, along with Live Better U, which offers eligible associates access to high school diplomas, certificates, skills credentials and college degrees that are aligned to business needs and in-demand roles.\nBy investing in development, career mobility and skills, we strengthen our associate value proposition and support a workforce capable of adapting as our business evolves.\nAssociate Experience and Engagement.\n Our efforts focus on supporting associate well-being, listening and a culture of belonging. We prioritize the financial, physical and mental well-being of our associates by offering competitive wages and a broad range of benefits designed to meet the diverse needs of our global workforce and their eligible dependents. In the U.S., these benefits include a 401(k) match, Associate Stock Purchase Plan match, associate discounts, predictable scheduling practices, paid time off, life insurance, medical coverage (for most plans, this includes no-cost virtual care and no-cost centers of excellence program for certain complex conditions), behavioral health services, family building benefits, maternity leave and paid parental leave for full-time associates.\nWe focus on creating a workplace where associates feel seen, supported and connected, and where they can perform at their best. Associate perspectives help shape the workplace through listening channels such as in-person dialogue, leadership visits and listening sessions, associate engagement surveys, pulse surveys and always-on confidential reporting mechanisms, including Open Door and ethics processes.\nWalmart's culture is grounded in our core value of \"Respect the Individual,\" and we believe in fostering a culture where everyone belongs\u2014for associates and for driving business success. When associates feel valued for who they are, engagement deepens and associates are empowered to better serve our customers and members while delivering innovative solutions for our business. As part of our commitment to accountability and transparency, we publish workforce representation data and provide recurring updates to senior leadership, including our President and CEO, and to members of our Board of Directors.\nAdditional information about our associates and our investments in them can be found on our corporate website,\nwhich are not incorporated by reference into this Annual Report on Form 10-K or incorporated by reference into any of our other filings with the SEC\n. Certain information relating to retirement-related benefits we provide to our associates is included in\nNote 10\n to our Consolidated Financial Statements.\nOur Website and Availability of SEC Reports and Other Information\nOur corporate website is located at www.stock.walmart.com. We file with, or furnish to, the SEC Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, amendments to those reports, proxy statements and annual reports to shareholders, and, from time to time, other documents. The reports and other documents filed with, or furnished to, the SEC are available to investors on or through our corporate website free of charge as soon as reasonably practicable after we electronically file them with or furnish them to the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers, such as the Company, that file electronically with the SEC. The address of that website is www.sec.gov. Our SEC filings, our Reporting Protocols for Senior Financial Officers and our Code of Conduct can be found on our website at www.stock.walmart.com. These documents are available in print to any shareholder who requests a copy by writing or calling our Investor Relations Department, which is located at our principal offices.\nA description of any substantive amendment or waiver of Walmart's Reporting Protocols for Senior Financial Officers or our Code of Conduct for our chief executive officer, our chief financial officer and our controller, who is our principal accounting officer, will be disclosed on our website at www.stock.walmart.com under the Corporate Governance section. Any such description will be located on our website for a period of 12 months following the amendment or waiver.\n11\nInformation About Our Executive Officers\nThe following chart names the executive officers of the Company as of the date of the filing of this Annual Report on Form 10-K with the SEC, each of whom is elected by, and serves at the pleasure of, the Board of Directors. The business experience shown for each officer has been his or her principal occupation for at least the past five years, unless otherwise noted.\nName\nBusiness Experience\nCurrent\nPosition\nHeld\u00a0Since\nAge\nDaniel J. Bartlett\nExecutive Vice President, Corporate Affairs, effective June 2013. From November 2007 to June 2013, he served as Chief Executive Officer and President of U.S. Operations at Hill & Knowlton, Inc., a public relations company.\n2013\n54\nSeth Dallaire\nExecutive Vice President and Chief Growth Officer, effective February 2026. From October 2024 to February 2026, he served as Executive Vice President and Chief Growth Officer, Walmart U.S. From November 2021 to October 2024, he served as Executive Vice President and Chief Revenue Officer, Walmart U.S. From November 2019 to November 2021 he served as Chief Revenue Officer at Instacart.\n2026\n55\nDaniel Danker\nExecutive Vice President, AI Acceleration, Product and Design, effective August 2025. From March 2021 to August 2025, he worked at Instacart in various roles, including most recently, Chief Product Officer and Head of Online Grocery. From July 2018 to March 2021, he worked at Uber in various roles, including most recently Head of Product, Uber Eats.\n2025\n45\nJohn Furner\nPresident and Chief Executive Officer, effective February 2026. From November 2019 to February 2026, he served as Executive Vice President, President and Chief Executive Officer, Walmart U.S.\n2026\n51\nDavid Guggina\nExecutive Vice President, President and Chief Executive Officer, Walmart U.S., effective February 2026. From January 2025 to February 2026, he served as Executive Vice President and Chief eCommerce Officer, Walmart U.S. From November 2022 to January 2025, he served as Executive Vice President, Supply Chain, Walmart U.S. From April 2021 to November 2022, he served as Senior Vice President, Innovation and Automation, Walmart U.S. From December 2019 to April 2021, he served as Senior Vice President, Product and Engineering, Walmart U.S.\n2026\n40\nSuresh Kumar\nExecutive Vice President, Global Chief Technology Officer and Chief Development Officer, effective July 2019. From February 2018 until June 2019, Mr. Kumar was Vice President and General Manager at Google LLC.\n2019\n61\nDwayne Milum\nSenior Vice President and Controller, effective February 2026. From April 2022 to February 2026, he served as Senior Vice President and Chief Audit Executive. From October 2016 to April 2022, he served as Vice President and Controller for Walmart International.\n2026\n50\nDonna Morris\nExecutive Vice President, Global People, and Chief People Officer, effective February 2020.\u00a0From April 2002 to January 2020, she worked at Adobe Inc. in various roles, including most recently, Chief Human Resources Officer and Executive Vice President, Employee Experience.\n2020\n58\nChristopher Nicholas\nExecutive Vice President, President and Chief Executive Officer, Walmart International, effective February 2026. From September 2023 to February 2026 he served as Executive Vice President, President and Chief Executive Officer, Sam's Club U.S.\nFrom October 2021 to September 2023, he served as Executive Vice President, Chief Operating Officer, Walmart U.S. From February 2021 to October 2021, he served as Executive Vice President, Chief Financial Officer Walmart U.S. From January 2020 to February 2021, he served as Executive Vice President, Chief Financial Officer Walmart International.\n2026\n49\nJohn David Rainey\nExecutive Vice President and Chief Financial Officer, effective June 2022. From September 2015 to June 2022, he served as Chief Financial Officer and Executive Vice President, Global Customer Operations for PayPal Holdings, Inc.\n2022\n55\nLatriece Watkins\nExecutive Vice President, President and Chief Executive Officer, Sam's Club U.S., effective February 2026. From May 2023 to February 2026, she served as Executive Vice President and Chief Merchandising Officer, Walmart U.S. From December 2020 to May 2023, she served as Executive Vice President, Consumables, Walmart U.S.\n2026\n51\n12\nITEM\u00a01A.\nRISK FACTORS\nThe risks described below could, in ways we may or may not be able to accurately predict, materially and adversely affect our business, results of operations, financial position and liquidity. Our business operations could also be affected by additional factors that apply to all companies operating in the U.S. and globally. The following risk factors do not identify all risks that we may face. The disclosures below reflect our beliefs and opinions as to risk factors that could materially and adversely affect our business operations and our securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such risk factors have occurred in the past or their likelihood of occurring in the future.\nStrategic Risks\nFailure to successfully execute our omnichannel strategy and the cost of our investments in eCommerce and technology may materially adversely affect our market position, net sales and financial performance.\nThe retail business continues to rapidly evolve with consumers embracing the digital shopping experience and expecting a robust online marketplace of goods available for purchase and delivery. As a result, the portion of total consumer expenditures with retailers and wholesale clubs occurring through digital platforms is increasing and the pace of this increase could continue to accelerate.\nOur strategy, which includes investments in eCommerce, technology, AI, talent, supply chain automation and enhancements, advertising, acquisitions, joint ventures, new store and club openings and remodels and other customer initiatives, may not adequately or effectively allow us to continue to grow our omnichannel business offerings, increase comparable sales or maintain or grow our overall market position. The success of this strategy will depend in large measure on our ability to continue building and delivering a seamless omnichannel shopping experience and interconnected ecosystem for our customers that deepens and maintains our relationships with our customers across our various businesses and partnerships. Customers are using digital means, including websites, captive and third-party digital applications, social media, and emerging agentic platforms to shop with us and our competitors and to do comparison shopping, and we use these digital means along with digital advertising, text messages and email to interact with our customers and enhance their shopping experience.\nThe success of this strategy is further subject to the related risks discussed in this\nItem 1A\n. With the interconnected components of this enterprise strategy and an increasing allocation of capital expenditures focused on these initiatives, changes in customer or member perceptions about our reputation in general, or our failure to successfully execute on individual components of this strategy may adversely affect our market position, net sales and financial performance, which could also result in impairment charges to intangible assets or other long-lived assets. In addition, a greater concentration of eCommerce sales, including increasing online grocery sales and the increasing role of AI-enabled platforms in product search, discovery, advertising and purchasing, could result in a reduction in the amount of traffic in our stores and clubs, which would, in turn, reduce the opportunities for cross-store or cross-club sales of merchandise that such traffic creates and could reduce our sales within our stores and clubs and materially adversely affect our financial performance.\nFurthermore, the cost of certain investments in eCommerce, technology, talent and automation, including any operating losses incurred for those initiatives, will adversely impact our financial performance in the short-term and failure to realize the benefits of these investments may adversely impact our financial performance over the longer term.\nIf we do not timely identify or effectively respond to consumer trends or preferences, it could negatively affect our reputation, relationship with our customers, demand for the products and services we sell, our market share and the growth of our business.\nIt is difficult to predict consistently and successfully the products and services our customers will demand and changes in their shopping patterns, tastes and preferences. The success of our business depends in part on how accurately we predict consumer demand, availability of merchandise, the related impact on the demand for existing products and services and the competitive environment. Our business is dependent on our ability to make critical decisions and predictions with respect to merchandise categories that quickly respond to changing consumer spending patterns, tastes and preferences, and any incorrect calculations by us may result in lower sales, spoilage and inventory markdowns, which could adversely impact our results of operations. Our ability to predict and adapt to changing tastes and preferences depends on many factors, including obtaining accurate and relevant data on customer preferences, emphasizing relevant merchandise categories, effectively managing our inventory levels, implementing competitive and effective pricing and promotion strategies. Price transparency, assortment of products, customer experience, convenience, ease and the speed and cost of shipping are of primary importance to customers and continue to increase in importance, particularly as a result of digital tools, social media, and emerging agentic tools available to consumers and the choices available to consumers for purchasing products. In addition, to remain competitive, we must continue to develop, integrate and scale digital tools, including AI-powered search and discovery platforms and capabilities, useful interfaces and other marketing tools such as third-party recommendation engines, paid search and mobile applications. We must continue to preserve our reputation, which is impacted by public perceptions and customer experiences. It may be difficult to address negative publicity across media channels, regardless of whether it is accurate. Negative incidents, including the loss of merchandise as a result of shrink or theft, ineffective use or misuse of AI technologies, inaccurate, biased or otherwise flawed\n13\nAI search and discovery results, or a data breach as a result of a cyberattack could quickly erode trust and confidence in our business and could result in customer dissatisfaction, consumer boycotts, workforce unrest and government investigations. These incidents may involve us, our vendors that handle our data or personal information, our workforce or others with whom we do business, including third-party service providers and independent contractors. Societal expectations, preferences, trends and political expression are ever-changing and we try to adapt, evolve and maintain a balance that meets the acceptance of our customers, members, associates, shareholders, suppliers and other stakeholders, but we may not always move as quickly or in the direction that various competing interests desire or demand, which could impact our reputation. For instance, strong opinions continue to be publicly expressed both for and against various social and environmental initiatives and positions taken by many corporations, including Walmart, are tracked, monitored and subject to heightened scrutiny from consumers, investors, advocacy groups and public figures, potentially leading to consumer boycotts, negative publicity campaigns, litigation and reputational harm. Negative reputational incidents or negative perceptions of us could adversely impact our business and results of operations, including through lower sales, the termination of business relationships and negative impacts to associate retention and recruiting efforts. Moreover, failure to adequately predict customer demand and consumer spending patterns or otherwise optimize and operate our distribution and fulfillment centers could result in excess or insufficient inventory, service interruptions and increased costs, any of which could significantly harm our business. As we continue to add new fulfillment centers, our fulfillment and technology networks become increasingly complex and operating them in a way that effectively meets consumer demands continues to be challenging. There can be no assurance that we will be able to operate our networks effectively.\nWe face strong competition from other retailers, wholesale club operators, omnichannel retailers and other businesses which could materially adversely affect our financial performance.\nEach of our segments competes for customers, employees, digital prominence, products and services and in other important aspects of its business with many other local, regional, national and global physical, eCommerce and omnichannel retailers, social commerce platforms, wholesale club operators and retail intermediaries, and emerging agentic shopping tools and platforms, as well as companies that offer services in digital advertising, data analytics/insights, fulfillment and delivery services, health and wellness and financial services. The omnichannel retail landscape is highly competitive and rapidly evolving, and the entry of new, well-funded competitors, or more rapid development of AI capabilities and agentic tools by these competitors to enhance productivity and the shopping experience, may increase competitive pressures. In addition, for eCommerce and other internet-based businesses, newer or smaller businesses may be better able to innovate and compete with us.\nWe compete in a variety of ways, including the prices at which we sell our merchandise, merchandise selection and availability, services offered to customers, location, store hours, in-store amenities, the shopping convenience and overall shopping experience we offer, the attractiveness and ease of use of our digital platforms, quality and accessibility of data for customers, suppliers, and associates, and cost, speed of and options for accurate delivery to customers of merchandise purchased through our digital platforms or through our omnichannel integration of our physical and digital operations.\nA failure to respond effectively to these competitive pressures and changes in the retail and other markets in which we operate, omnichannel innovations and omnichannel ecosystems developed by our competitors or delays or failure in execution of our strategy could materially adversely affect our financial performance. See \"\nItem 1. Business\n\" above for additional discussion of the competitive landscape of our business.\nFurther, the protection of our proprietary rights, including our trademarks, copyrights, domain names, patents and trade secrets, is important to our business. Effective protection of our proprietary rights may not be available in every jurisdiction in which we offer our products and services, and we may not be able to prevent or deter third parties from infringing or misappropriating our intellectual property, or ensure that third parties will not independently develop equivalent or superior intellectual property rights, which could affect our ability to maintain a competitive advantage and adversely impact our business.\nCertain segments of the retail industry are undergoing consolidation or substantially reducing operations, whether due to bankruptcy, economics or other factors. Such consolidation, or other business combinations or alliances, competitive omnichannel ecosystems or reductions in operations may result in competitors with improved financial resources, improved access to merchandise, greater market penetration and other improvements in their competitive positions. Such business combinations or alliances could allow these companies to provide a wider variety of products and services at competitive prices, which could adversely affect our financial performance.\nGeneral or macro-economic factors, both domestically and internationally, may materially adversely affect our financial performance.\nGeneral economic conditions and other economic factors, globally or in one or more of the markets we serve, may adversely affect our financial performance. Higher interest rates, higher prices of petroleum products, including crude oil, natural gas, gasoline and diesel fuel, increased costs for electricity and other energy, weakness in the housing market, inflation, deflation, increased costs of essential services, such as medical care and utilities, higher levels of unemployment, decreases in GDP and consumer purchasing power (including from reductions resulting from changes to government programs), unavailability of\n14\nconsumer credit, higher consumer debt levels, changes in consumer spending and shopping patterns, fluctuations in currency exchange rates, higher tax rates, imposition of new taxes or other changes in tax laws, changes in healthcare laws, other regulatory changes, the imposition of export and import restrictions, tariffs, trade barriers or other measures that create barriers to or increase the costs associated with international trade, overall economic slowdown or recession and other economic factors in the U.S., or in any of the other markets in which we operate, could adversely affect consumer demand for the products and services we sell in the U.S. or such other markets, change the mix of products we sell to any one or more markets with a lower average gross margin, cause a slowdown in discretionary purchases of goods, adversely affect our net sales, growth rates, operating income and result in slower inventory turnover and greater markdowns of inventory, or otherwise materially adversely affect our operations and operating results and could result in impairment charges to intangible assets, goodwill or other long-lived assets.\nIn addition, the economic factors listed above, any other economic factors or circumstances resulting in higher transportation, labor, insurance or healthcare costs or commodity prices, including energy prices, and other economic factors in the U.S. and other countries in which we operate can increase our cost of sales and operating, selling, general and administrative expenses and otherwise materially adversely affect our operations and operating results.\nThe economic factors that affect our operations may also adversely affect the operations of our suppliers, which can result in an increase in the cost to us of the goods we sell to our customers or, in more extreme cases, in certain suppliers not producing goods in the volume typically available to us for sale, or adversely impact product margins due to higher labor and material costs of our suppliers that we are unable, or choose not, to pass on to our customers.\nThe performance of strategic alliances and other business relationships to support the expansion of our business could materially adversely affect our financial performance.\nWe may enter into strategic alliances and other business relationships in the countries in which we have existing operations or in other markets to expand our business. These arrangements may not generate the level of sales or profitability we anticipate when entering into the arrangement or may otherwise adversely impact our business and competitive position relative to the results we could have achieved in the absence of such alliance. In addition, any investment we make in connection with a strategic alliance, business relationship or in certain of our divested markets, could materially adversely affect our financial performance.\nOperational Risks\nGlobal or regional health pandemics or epidemics could negatively impact our business, financial position and results of operations.\nThe emergence, severity, magnitude and duration of global or regional pandemics, epidemics or other health crises are uncertain and difficult to predict. A pandemic, epidemic or contagious disease outbreak that affects humans or the food supply, such as the avian flu impact on poultry and egg production could impact our business operations, demand for our products and services, in-stock positions, costs of doing business, access to inventory, supply chain operations, ability to predict future performance, exposure to litigation and financial performance, among other things. In the event of any global or regional health crisis, customer demand for certain products may fluctuate, customer behaviors may change and consumer disposable income could be negatively impacted, which may challenge our ability to anticipate and/or adjust inventory levels to meet that demand. These risks and their impacts are difficult to predict and could otherwise disrupt and adversely affect our operations and our financial performance.\nTo the extent that a future pandemic, epidemic or contagious disease outbreak occurs, such events may also heighten other risks described in this Item 1A, including but not limited to those related to consumer behavior and expectations, competition, our reputation, implementation of strategic initiatives, cybersecurity threats, payment-related risks, technology systems disruption, supply chain disruptions, labor availability and cost, and litigation and regulatory requirements.\nNatural disasters, climate change, geopolitical events, catastrophic and other events could materially adversely affect our financial performance.\nNatural disasters and weather conditions, which may include hurricanes, tropical storms, typhoons, floods, wildfires, cyclones, tornadoes, winter storms, droughts, extreme temperatures, could have a material adverse effect on our operations and financial performance, and a changing climate could exacerbate certain of these events and conditions. Moreover, geopolitical tensions or events such as war; civil unrest (including theft, looting or vandalism); terrorist attacks; acts of violence, including active shooter situations (such as those that have occurred in our U.S. stores); or similar disruptions in countries or regions in which our suppliers operate or through which goods are transported could materially adversely affect our operations and financial performance. Protecting the safety of our associates, including our senior leaders, is critical to preventing business disruption and executing on our business strategies and objectives.\nThe occurrence of these events could result in immediate and longer-term impacts on our operations, including physical damage or loss of properties, the closure of stores, clubs and distribution or fulfillment centers, limited operating hours, workforce shortages and challenges in labor availability, the inability of customers and associates to reach or have transportation to our\n15\nstores and clubs affected by such events, the evacuation of the populace from areas in which our stores, clubs and distribution and fulfillment centers are located, the unavailability of our digital platforms to our customers, and changes in the purchasing patterns of consumers (including the frequency of visits by consumers to physical retail locations, whether as a result of limitations on large gatherings, travel and movement limitations or otherwise). These events could also lead to temporary or long-term disruption in our supply chains, including by disrupting or delaying the delivery of goods to our distribution and fulfillment centers, stores and customers, negatively impacting consumers' disposable income; reducing the availability of products in our stores; increasing the costs of procuring products; increasing transportation costs (whether due to fuel prices, fuel supply or otherwise); disrupting critical infrastructure systems, banking systems, utility services or energy availability to our stores, clubs and our facilities; and disrupting communications with our stores, clubs and our other facilities.\nWe bear the majority of the costs associated with adaptation and the risk of losses incurred as a result of physical damage to, or destruction of, any stores, clubs, distribution or fulfillment centers and transportation vehicles and equipment; theft, loss or spoilage of inventory; and business interruption caused by such events. These events and their impacts could otherwise disrupt and adversely affect our operations and could materially adversely affect our financial performance. Moreover, our operations in the U.S. comprise a significant portion of our financial and operational performance. Therefore, any of the above matters that uniquely impact or are specifically concentrated in the U.S. could materially adversely affect our financial condition, results of operations or cash flows.\nRisks associated with our suppliers could materially adversely affect our financial performance.\nThe products we sell are sourced from a wide variety of domestic and international suppliers. Global sourcing of many of the products we sell is an important factor in our financial performance. We expect our suppliers to comply with applicable laws, including labor, safety, anti-corruption and environmental laws, and to otherwise meet our required supplier standards of conduct. Our ability to find qualified suppliers who uphold our standards and to access products in a timely and efficient manner and in the large volumes we may demand, are significant challenges, especially with respect to suppliers located and goods sourced outside the U.S.\nWe are exposed to a number of risks in our relationships with our suppliers, many of which are beyond our control, and which could adversely impact our operations and financial performance. These risks include political and economic instability, as well as other impactful events and circumstances in the countries and regions in which our suppliers are located, goods are manufactured and located, and through which goods are transported; the financial instability of suppliers; suppliers not having the financial ability or capacity to fulfill their indemnification obligations to us if called upon, thereby exposing us to the full cost of risks and claims; suppliers' failure to meet our terms and conditions or our supplier standards (including our responsible sourcing standards); labor problems experienced by our suppliers and their manufacturers; the availability of raw materials to suppliers; extreme weather events impacting the growing, manufacturing, mining and harvesting of commodities and products; merchandise safety and quality issues; disruption or delay in the transportation of merchandise from the suppliers and manufacturers to our stores, clubs and other facilities, including as a result of extreme weather or labor slowdowns; currency exchange rates; transport availability and cost; transport security; and inflation.\nIn addition, U.S. and international trade policies, tariffs, trade barriers and other restrictions on the exportation and importation of goods, trade sanctions imposed between certain countries and entities, the limitation on the exportation or importation of certain types of goods or of goods containing certain materials from other countries and other factors relating to foreign trade are beyond our control. These and other factors affecting our suppliers, our access to products and our access to service providers (such as transportation and logistics providers) could adversely affect our operations and financial performance.\nIf the quality or safety of products we sell in stores or online fails to meet our customers' expectations or regulatory standards, we could lose customers, incur liability for any injuries caused by a product we sell or otherwise experience a material impact to our brand, reputation and financial performance.\nOur customers count on us to provide them with quality products at an affordable price. Occasionally, the quality of products that we source from our suppliers fails to meet customer expectations. In many cases, these products are subject to regulatory action or recall. For general merchandise, this could be because the product fails to meet safety standards. For food products, it could be because the product is a source of foodborne illness. For health and wellness products, it could be because the product does not produce the expected result for the customer or harms the customer. Any of these factors could cause customers to avoid purchasing certain products from us or to choose to buy products from a different retailer, even if the quality issue is outside of our control. Any lost confidence on the part of our customers would be difficult and costly to reestablish. When a product we sell does not meet quality or safety standards, there is an increased risk of liability for harm the product may cause our customers. While we rely on our suppliers to meet our safety and quality expectations, and to indemnify us if their products do not, certain suppliers may not have the financial capacity or ability to fulfill their indemnification obligations. In that case, we may be exposed to the full cost of liability claims. Any issue regarding the quality or safety of products we sell, regardless of the cause, could adversely affect our brand, reputation and financial performance.\n16\nIf the quality or safety of products offered for sale on our third-party marketplace fails to meet our customers' expectations or regulatory standards, we could be held directly liable, lose customers, become subject to regulatory enforcement or otherwise experience reputational harm.\nSome of the products customers buy from our website are sold by third parties, which we refer to as marketplace transactions. While that transaction ultimately occurs between the third-party seller and the customer, some regulators and courts have taken a view that the retailer is responsible for marketplace transactions that occur on a retailer's digital platform. Unsettled law on whether a retailer is responsible for intellectual property or product liability claims related to marketplace transactions creates additional risk. Any unfavorable changes or legal interpretations could further expose us to liability. Our arrangements with our third-party marketplace sellers are complex and we may not be able to implement, maintain and develop the components of these commercial relationships, which may include fulfillment, inventory management, tax collection, payment processing, content and engaging other third parties to perform services.\nIn addition, poor quality or safety of third-party products offered for sale on our platforms could erode customer trust, leading to loss of sales, reduction in transactions and deterioration of our competitive position. In addition, we may face reputational, financial and other risks, including liability for third-party products offered for sale on our platform that are controversial, counterfeit, pirated or stolen or that infringe the intellectual property rights of others. We may not be able to collect sufficient damages for these types of breaches from third-party sellers. Furthermore, even if we are successful in negotiating a contractual shift in risk of loss to third parties, a regulator may view us as having responsibility for regulatory compliance of the third-party products offered for sale on our platform. Although we have marketplace compliance controls in place and impose contractual terms on sellers to prohibit sales of non-compliant products, we may not be able prevent sellers from offering prohibited items for sale, enforce such terms or fully protect against regulatory risk. Any of these events could have a material adverse impact on our business and results of operations and impede the execution of our eCommerce growth and enterprise strategy.\nWe rely extensively on information and financial systems to process transactions, summarize results and manage our business. Disruptions in our systems could harm our ability to conduct our operations.\nGiven the number of individual transactions we have each year, it is crucial that we maintain uninterrupted operation of our business-critical information systems. Our information systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, ransomware, worms, other malicious computer programs, denial-of-service attacks, security incidents and breaches from a variety of threat actors, including both cybercriminals and nation state-sponsored actors and catastrophic events noted above in this\nItem 1A\n. The availability of our information systems and the integrity of data are essential to our business operations, including the processing of transactions, management of our associates, facilities, logistics, inventories, physical stores and clubs and our online operations. Our information systems are not fully redundant and our disaster recovery planning cannot account for all eventualities. If our systems are damaged, breached, attacked, interrupted or otherwise cease to function properly, we may have to make a significant investment to repair or replace them, and may experience loss or corruption of data as well as suffer interruptions in our business operations in the interim. Any interruption to the availability of our information systems or corruption of our data may have a material adverse effect on our business or results of operations. In addition, the cost of securing our systems against failure or attack is considerable, and increases in these costs, particularly in the wake of a breach or failure, could be significant.\nIn addition, we frequently update our information technology hardware, software, processes and systems. The risk of system disruption is increased when significant system changes are undertaken. If we fail to timely or successfully integrate and update our information systems and processes, system disruptions may occur and we may fail to realize the cost savings or operational benefits anticipated to be derived from these initiatives and our business, results of operations, financial condition and cash flows could be negatively impacted.\nIf the technology-based systems that give our customers the ability to shop with us online and enable us to deliver products and services do not function effectively, or keep pace with similar offerings of our competitors, our operating results, as well as our ability to grow our omnichannel business globally, could be materially adversely affected.\nAs noted above, customers are using digital means, including websites, captive and third-party digital applications, social media, and emerging agentic platforms to shop with us and our competitors and to do comparison shopping, and we use these digital means along with digital advertising, text messages and email to interact with our customers and enhance their shopping experience. As a part of our omnichannel sales strategy, we offer various pickup, delivery and shipping programs including options where many products available for purchase online can be picked up by the customer or member at a local Walmart store or Sam's Club, which provides additional customer traffic at such stores and clubs. Omnichannel retailing is a rapidly evolving part of the retail industry and of our operations around the world, and we continue to make investments in supply chain automation and enhancements to support our omnichannel strategy. We must anticipate and meet our customers' changing expectations while adjusting for technology investments and developments in our competitors' operations through focusing on the building and delivery of a seamless shopping experience across all channels by each operating segment, and structuring these offerings in a manner that allows us to maintain a direct relationship with our customers. We continue to invest in AI to enhance our customers' shopping experience and our associate work experience and to improve efficiencies of our supply chain, operations, management functions and talent recruitment and development; however, these are evolving technologies, there are\n17\ninherent operational and legal complexities associated with implementation of these technologies within our business, and there can be no assurance that these investments will deliver the anticipated benefits, or that we will be able to adopt and leverage these technologies as quickly or effectively as our competitors. When integrating and introducing AI technologies into our platforms, processes and systems, we may be exposed to new or expanded liabilities and risks due to elevated governmental scrutiny and monitoring, litigation, data privacy risks and compliance issues in a disparate and at times conflicting regulatory environment, all of which could negatively affect our financial performance and business reputation.\nSome of the various technology systems and services on which we rely are provided and managed by an increasing number of third-party service providers. To the extent either our or such other third-party systems and services do not perform or function as anticipated, whether because of an inherent flaw in the technology, faulty implementation or a cybersecurity incident, such failure can significantly interfere with our ability to meet our customers' changing expectations. Any disruption or failure on our part to provide attractive, user-friendly and secure digital platforms that offer a wide assortment of merchandise and services at competitive prices and with low cost and rapid delivery options and that continually meet the changing expectations of online shoppers and developments in online, digital, and agentic merchandising and related technology in a cost-efficient manner could place us at a competitive disadvantage, result in the loss of eCommerce and other sales, harm our reputation with customers, have a material adverse impact on the growth of our eCommerce business globally and have a material adverse impact on our business and results of operations.\nAny failure to maintain the privacy or security of the information relating to our company, customers, members, associates, business partners and vendors, whether as a result of cyberattacks on our information systems or otherwise, could damage our reputation, result in litigation or other legal actions against us, result in fines, penalties, and liability, cause us to incur substantial additional costs and materially adversely affect our business and operating results.\nLike most retailers, we process in our information systems personal information and/or payment information about our customers and members, and we also process information concerning our associates and vendors. In addition, our health and wellness business operations and third-party service providers who handle information on our behalf store and maintain protected health information. We also collect certain consumer data, which is stored digitally and used to conduct and facilitate our businesses. We utilize third-party service providers for a variety of reasons, including, without limitation, for digital storage technology, compute capacity, medical record documentation, content delivery to customers and members, back-office support and other functions. Such providers may have access to information we hold about our customers, members, associates, business partners or vendors. In addition, our eCommerce operations depend upon the secure transmission of confidential information over public networks, including information permitting cashless payments.\nCyber threats are rapidly evolving and those threats and the means for disrupting or obtaining access to information systems or information stored in digital and other storage media are becoming increasingly sophisticated and frequent, and in some cases, they may lead to successful attacks. Unauthorized activities directed against information systems and devices, whether our own or those of our third-party service providers and vendors, have resulted in cybersecurity incidents, including malware, ransomware, denial of service attacks or phishing incidents. We expect that our information systems and those of our third-party service providers, vendors and suppliers will continue to experience such attacks in the future, which could include disruptions to our supply chain system. Cyberattacks and threat actors can be sponsored by particular nation-states, or be the work of sophisticated criminal organizations, insiders (including our associates or contractors) or third parties, each with a wide range of motives and expertise. We and the businesses with which we interact have experienced and continue to experience incidents and threats to data and information systems. These incidents and threats have included and are likely to continue to include both random and targeted cyberattacks, computer viruses, phishing incidents, worms, bot attacks, ransomware or other destructive or disruptive software and attempts to misappropriate customer information, including credit card and payment information, and cause system failures and disruptions. The use of remote work infrastructure in recent years has also increased the possible attack surfaces to be exploited. Our logging capabilities, or the logging capabilities of third parties, are also not always complete or sufficiently detailed, affecting our ability to fully investigate and understand the scope of security events. Continued advancements and increased use of AI have intensified existing cybersecurity risks by enabling faster and more automated attack techniques, lowering the barrier to creating sophisticated threats, and further compressing the time in which we must detect and respond to potential threats. Advances in AI are also creating novel categories of cyber threats in which attackers use AI systems to autonomously conduct reconnaissance, generate and tailor exploit code, harvest credentials, craft highly convincing social\u2011engineering content, and execute large\u2011scale intrusion or extortion campaigns with minimal human involvement. As noted above, some of our information systems and those of our third-party service providers have experienced cybersecurity incidents or breaches, including during fiscal 2026, and, although to date they have not had a material adverse effect on our operating results or business, there can be no assurance of a similar result in the future.\nOur digital platforms, which are increasingly important to our business and continue to grow in complexity and scope, and the systems on which they run, including those applications and systems used in legacy operations and acquired eCommerce, technology or other businesses, are regularly subject to cyberattacks. Those attacks involve attempts to impede the operations of our system or gain unauthorized access to our eCommerce websites (including marketplace platforms) or mobile commerce applications to obtain and misuse customers' or members' information including personal information and/or payment information, and related risks discussed in this\nItem 1A\n. Such attacks, if successful, may result in potential data and personal\n18\ninformation misuse and/or loss and may create denials of service or otherwise disable, degrade or sabotage the information systems that enable or support one or more of our digital platforms or otherwise significantly disrupt our customers' and members' shopping experience, our supply chain integrity and continuity and our ability to efficiently operate our business. If we are unable to maintain the security of the information systems that enable or support our digital platforms and keep them operating within acceptable parameters, we could be subject to regulatory fines, suffer loss of sales, reductions in transactions, reputational damage and deterioration of our competitive position and incur liability for any damage to customers, members or others whose personal or confidential information is unlawfully obtained and misused, any of which events could have a material adverse impact on our business and results of operations and impede the execution of our strategy for the growth of our business.\nAssociate error or malfeasance, faulty password and identity management, social engineering or other vulnerabilities and irregularities may also result in a defeat of our security measures or those of our third-party service providers and a compromise or breach of our or their information systems. Moreover, the hardware, software or applications that comprise our information system and networked environment may have vulnerabilities or defects of design, coding, manufacture or operations that could be intentionally exploited or inadvertently used in a manner that could compromise information security. Given the age, size and complexity of these information systems and our networked environment, patches for certain vulnerabilities may not exist and, even where patches or other risk-mitigating activities are available, the deployment of patches or execution of risk-mitigating actions may not occur before an underlying vulnerability is exploited by threat actors or inadvertently results in the compromise of our information systems or data.\nAny compromise of our information systems or of those of businesses with which we interact, which results in regulated data or confidential information being accessed, obtained, damaged, disclosed, destroyed, modified, lost or used by unauthorized persons could harm our reputation and expose us to regulatory actions (including, with respect to health information, liability under the Health Insurance Portability and Accountability Act of 1996, as amended by the American Recovery and Reinvestment Act of 2009, collectively known as \"HIPAA\" and with respect to personal information, liability under international and state data breach notification laws), customer attrition, remediation expenses and claims from customers, members, associates, vendors, financial institutions, payment card networks and other persons, any of which could materially and adversely affect our business operations, reputation, financial position and results of operations.\nBecause the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems or data change frequently and may not immediately produce signs of a compromise, we may be unable to anticipate these techniques or implement adequate preventative measures, or detect the activities of a threat actor. Moreover, the increasing sophistication of AI technologies poses a greater risk of identity fraud, as malicious actors may exploit AI to create convincing false identities or manipulate verification processes. Even if we detect a fraudulent or cybersecurity incident, the nature and extent of that incident may not be immediately clear. Based on the sophistication of the threat actors and the size and complexity of our information systems and networked environment, among other factors, an investigation into a cybersecurity incident could take a significant amount of time to complete. We may not understand or appreciate that what is detected and treated as multiple individual cybersecurity incidents or events may be associated with the coordinated actions of a single threat actor or group. In addition, while our investigation of a cybersecurity incident is ongoing, we may not know the full extent of the harm caused by a threat actor, and such harm may spread both internally and to certain customers, vendors or other third parties. These factors may inhibit our ability to provide rapid, complete and reliable information about the cybersecurity incident to customers, counterparties and regulators, as well as the public. It may also not be clear how best to contain and remediate any harm caused by the cybersecurity incident, and certain errors or actions could be repeated or compounded before they are discovered and remediated. Any or all of these factors could further increase the costs and consequences of a cybersecurity incident on our business operations, financial position and results of operations.\nTo the extent that any cyberattack, ransomware or incursion in our or one of our third-party service provider's information systems results in the loss, damage, misappropriation or other compromise of information, we may be materially adversely affected by claims from customers, members, financial institutions, regulatory authorities, payment card networks and others.\nOur compliance programs, information technology and enterprise risk management efforts cannot eliminate all systemic risk. Disruptions in our systems caused by associate error or malfeasance, security incidents, breaches or cyberattacks \u2013 including attacks on those parties we do business with (such as strategic partners, suppliers, banks or utility companies) \u2013 could harm our ability to conduct our operations, which may have a material effect on us, may result in losses that could have a material adverse effect on our financial position or results of operations, or may have a cascading effect that adversely impacts our partners, third-party service providers, customers, members, financial services firms and other third parties that we interact with on a regular basis.\nOur reputation with our customers and members is important to the success of our enterprise strategy, which combines traditional retail, membership models, marketplaces, financial services, health and wellness and other customer and business services into a series of interconnected assets to make it seamless for customers to interact with us. Security-related events could be widely publicized and could materially adversely affect our reputation with our customers, members, associates, vendors and shareholders, could harm our competitive position particularly with respect to our eCommerce operations, and\n19\ncould result in a material reduction in our net sales in our eCommerce operations, as well as in our stores, thereby materially adversely affecting our operations, net sales, growth rates, operating income, results of operations, financial position, cash flows and liquidity. Such events could also result in the release to the public of confidential information about our operations and financial position and performance and could result in litigation or other legal actions against us or the imposition of penalties, fines, fees or liabilities, which may not be covered by our insurance policies. Moreover, a security compromise or operationally impactful malware event, such as ransomware, could require us to devote significant management resources to address the problems created by the issue and to expend significant additional resources to upgrade further the security measures we employ to guard personal and confidential information against cyberattacks and other attempts to access or otherwise compromise such information and could result in a disruption of our operations, particularly our digital operations.\nWe accept payments using a variety of methods, including cash, checks, credit and debit cards, electronic benefits transfer (EBT) cards, mobile payments and our private label credit cards and gift cards, and we may offer new payment options over time, which may have information security risk implications. As a retailer accepting debit and credit cards for payment, we are subject to various industry data protection standards and protocols, such as payment network security operating guidelines and the Payment Card Industry Data Security Standard. We cannot be certain that the security measures we or our third-party suppliers maintain are able to detect, prevent or contain cyberattacks, cyberterrorism, security incidents, breaches or other compromises from malware, ransomware or other threats that are known or may be developed in the future. In certain circumstances, our contracts with payment card processors and payment card networks (such as Visa, Mastercard, American Express and Discover) generally require us to adhere to payment card network rules which could make us liable to payment card issuers and others if information in connection with payment cards and payment card transactions that we process is compromised, which liabilities could be substantial.\nWe also have compliance obligations associated with privacy laws enacted to protect and regulate the collection, use, retention, disclosure and transfer of personal information, which include liability for security and privacy breaches. A growing patchwork of AI laws and targeted privacy and consumer protection statutes may also create varying obligations around notice, customer rights and appeals, data minimization, restrictions on sensitive data, targeted advertising and certain forms of profiling, and these requirements continue to evolve. Among other obligations, breaches may trigger obligations under U.S. federal and state laws and laws in certain other countries to notify affected individuals, government agencies and the media. Consequently, cybersecurity incidents that result in a data breach or our failure to comply with such laws could subject us to fines, sanctions and other legal liability and harm our reputation.\nChanges in third-party reimbursements and contracts, type, or scope of offerings of our health and wellness business could adversely affect our overall results of operations, cash flows and liquidity.\nWe have retail pharmacy operations in our Walmart U.S. and Sam's Club U.S. segments across the U.S. and in various of our international markets such as Canada and Mexico.\nA large majority of our retail pharmacy net sales are generated by filling prescriptions for which we receive payment through established contractual relationships with third-party payers and payment administrators, such as private insurers, governmental agencies and pharmacy benefit managers (\"PBMs\"). Our retail pharmacy operations are subject to numerous risks, including: reductions in the third-party reimbursement rates for drugs; changes in our payer mix (i.e., shifts in the relative distribution of our pharmacy customers across drug insurance plans and programs toward plans and programs with less favorable reimbursement terms); changes in third-party payer drug formularies (i.e., the schedule of prescription drugs approved for reimbursement or which otherwise receive preferential coverage treatment); growth in, and our participation in or exclusion from, pharmacy payer network arrangements, including exclusive and preferred pharmacy network arrangements operated by PBMs and/or any insurance plan or program; increases in the prices we pay for brand name and generic prescription drugs we sell; increases in the administrative burdens associated with seeking third-party reimbursement; changes in the frequency with which new brand name pharmaceuticals become available to consumers; introduction of lower cost generic drugs as substitutes for existing brand name drugs for which there was no prior generic drug competition; changes in drug mix (i.e., the relative distribution of drugs customers purchase at our pharmacies between brands and generics); changes in the health insurance market generally; increased governmental focus on reducing drug prices including most favored nation pricing policies, maximum fair price negotiations, and direct-to-consumer pharmacy delivery models; changes in the scope of or the elimination of Medicare Part D or Medicaid drug programs; increased competition from other retail pharmacy operations including competitors offering online retail pharmacy options and/or home delivery options; further consolidation and strategic alliances among third-party payers, PBMs or purchasers of drugs; overall economic conditions and the ability of our pharmacy customers to pay for drugs prescribed for them to the extent the costs are not reimbursed by a third-party; failure to meet any performance or incentive thresholds to which our level of third-party reimbursement may be subject; changes in laws or regulations or the practices of third-party payers and PBMs related to the use of third-party financial assistance to assist our pharmacy customers with paying for drugs prescribed for them; and any additional\n\nchanges in the state or federal regulatory environment for the retail pharmacy industry and the pharmaceutical industry, including as a result of health reform efforts and other changes to or novel interpretations of existing state or federal laws, rules and regulations that affect our retail pharmacy business.\n20\nIf the supply of certain pharmaceuticals provided by one or more of our vendors were to be disrupted for any reason, our pharmacy operations could be severely affected until at least such time as we could obtain a new supplier for such pharmaceuticals. Any such disruption could cause reputational damage and result in a significant number of our pharmacy customers transferring their prescriptions to other pharmacies.\nOne or a combination of the factors above may adversely affect the volumes of brand name and generic pharmaceuticals we sell, our cost of sales associated with our retail pharmacy operations, the net sales and gross margin of those operations or result in the loss of cross-store or cross-club selling opportunities. In addition, these and other factors may adversely affect the type, volume and mix of services we provide and the reimbursement we receive for health and wellness services rendered. Any of these developments could, in turn, adversely affect our overall net sales, other results of operations, cash flows and liquidity.\nOur failure to attract and retain qualified associates, increases in wage and benefit costs, changes in laws and other labor issues could materially adversely affect our financial performance.\nOur ability to continue to conduct and expand our operations depends on our ability to attract and retain a large and growing number of qualified associates globally. Our ability to meet our labor needs, including our ability to find qualified personnel to fill positions that become vacant at our existing stores, clubs, distribution and fulfillment centers and corporate offices, while controlling our associate wage and related labor costs, is generally subject to numerous external factors, including the availability of a sufficient number of qualified persons in the work force of the markets in which we operate, unemployment levels within those markets, prevailing wage rates, changing demographics, health and other insurance costs and adoption of new or revised employment and labor laws and regulations. Additionally, our ability to successfully execute organizational changes, including our enterprise strategy and management transitions within our senior leadership, and to effectively motivate and retain associates are critical to our business success. We compete for talent with other retail and non-retail businesses, including, for example, technology, health and wellness and fintech businesses, and invest significant resources in training and motivating our associates. Increased competition among potential employers at all levels, including senior management and executive levels, could result in increased associate costs or make it more difficult to recruit and retain associates. If we are unable to locate, attract or retain qualified personnel, or manage leadership transition successfully, the quality of service we provide to our customers may decrease and our financial performance may be adversely affected.\nIn addition, if our costs of labor or related costs increase for other reasons or if new, revised or novel interpretations of existing labor laws, rules or regulations or healthcare laws, including those related to worker classification, are adopted or implemented that further increase our labor costs, our financial performance could be materially adversely affected.\nIllegal or inappropriate activity of our independent contractors or third-party service providers could expose us to liability and adversely affect our business, reputation and financial performance.\nWe are subject to risks related to our engagement of independent contractors or other third-party service providers. The qualification processes and background checks we utilize when engaging independent contractors may not reveal all potentially relevant information, including accurate worker authorization information and criminal history. If these independent contractors engage in misconduct, consumers may not consider our goods and services safe, and we may receive negative press coverage. Further, we have in the past incurred, and may in the future incur, losses from various types of fraud with respect to unauthorized uses of another person's identity and use of fraudulent identification documents. Any physical injury, loss of life, fraud, property and/or financial damage caused by our independent contractors or third-party service providers could adversely affect our business reputation, which could negatively affect demand for our goods and services, lead to increased regulatory or litigation exposure and adversely affect our financial performance.\nFinancial Risks\nFailure to meet market expectations for our financial performance could adversely affect the market price and volatility of our stock.\nWe believe that the price of our stock generally reflects high market expectations for our future operating results. Any failure to meet or delay in meeting these expectations, including our consolidated net sales, consolidated operating income, growth rates, eCommerce growth rates, advertising and other higher-margin initiatives (which are expected to help drive our operating income growth at a rate faster than net sales over the long term), capital expenditures, comparable store and club sales growth rates or earnings and adjusted earnings per share could cause the market price of our stock to decline, as could changes in our dividend or stock repurchase programs or policies, changes in our effective tax rates, changes in our financial estimates and recommendations by securities analysts or, failure of our performance to compare favorably to that of other retailers may have a negative effect on the price of our stock.\nFluctuations in foreign exchange rates may materially adversely affect our financial performance and our reported results of operations.\nOur operations in countries other than the U.S. are conducted primarily in the local currencies of those countries. Our Consolidated Financial Statements are denominated in U.S. dollars, and to prepare those financial statements we must translate the amounts of the assets, liabilities, net sales, other revenues and expenses of our operations outside of the U.S. from local\n21\ncurrencies into U.S. dollars using exchange rates for the current period. In recent years, fluctuations in currency exchange rates that were unfavorable have had adverse effects on our reported results of operations.\nAs a result of such translations, fluctuations in currency exchange rates from period-to-period that are unfavorable to us may also result in our Consolidated Financial Statements reflecting significant adverse period-over-period changes in our financial performance or reflecting a period-over-period improvement in our financial performance that is not as robust as it would be without such fluctuations in the currency exchange rates. Such unfavorable currency exchange rate fluctuations will adversely affect the reported performance of our Walmart International operating segment and have a corresponding adverse effect on our reported consolidated results of operations.\nWe may pay for products we purchase for sale in our stores, clubs and eCommerce platforms around the world with a currency other than the local currency of the country in which the goods will be sold. When we must acquire the currency to pay for such products and the exchange rates for the payment currency fluctuate in a manner unfavorable to us, our cost of sales may increase and we may be unable or unwilling to change the prices at which we sell those goods to address that increase in our costs, with a corresponding adverse effect on our gross profit. Consequently, unfavorable fluctuations in currency exchange rates have adversely affected, and may continue to adversely affect, our results of operations.\nLegal, Tax, Regulatory, Compliance, Reputational and Other Risks\nOur international operations subject us to legislative, judicial, accounting, legal, regulatory, tax, political and economic risks and conditions specific to the countries or regions in which we operate, which could materially adversely affect our business or financial performance.\nIn addition to our U.S. operations, we operate retail and eCommerce businesses in Africa, Canada, Central America, Chile, China, India and Mexico.\nDuring fiscal 2026, our Walmart International operations generated approximately 19% of our consolidated net sales. Walmart International's operations in various countries also source goods and services from other countries. Our future operating results in these countries could be negatively affected by a variety of factors, most of which are beyond our control. These factors include political conditions, including political instability, local and global economic conditions; legal and regulatory constraints, such as regulation of product and service offerings including regulatory restrictions (such as foreign ownership restrictions) on eCommerce and retail operations in international markets, such as in India; restrictive governmental actions, such as trade protection measures or nationalization; antitrust and competition law regulatory matters, such as those underway in Canada, Mexico and India (relating to our Flipkart subsidiary); local product safety and environmental laws; tax regulations; local labor laws; anti-money laundering laws and regulations; trade policies; foreign exchange or currency regulations; laws and regulations regarding consumer and data protection; and other matters in any of the countries or regions in which we operate, now or in the future.\nChanging our operations in accordance with new or changed restrictions on international trade or newly imposed sanctions can be expensive, time-consuming and disruptive to our operations. Such restrictions can be announced with little or no advance notice and we may not be able to effectively mitigate all adverse impacts from such measures. In addition, tensions between nation-state governments and conflicts of laws may lead to challenges for our operations. If disputes and conflicts further escalate in the future, actions by governments in response, or consumer boycotts in certain regions, could be significantly more severe and restrictive and could adversely affect our business or financial performance and our reputation. Political uncertainty surrounding trade and other international disputes could also have a negative effect on consumer confidence and spending, which could also adversely affect our business or financial performance and our reputation. The economies of some of the countries in which we have operations have in the past suffered from high rates of inflation and currency devaluations, which, if they recur, could adversely affect our financial performance. Other factors which may impact our international operations include foreign trade, monetary and fiscal policies of the U.S. and other countries, laws, regulations and other activities of foreign governments, agencies and similar organizations, and risks associated with having numerous facilities located in countries that have historically been less stable than the U.S. Additional risks inherent in our international operations generally include, among others, the costs and difficulties of managing international operations, adverse tax consequences and greater difficulty in enforcing intellectual property rights in countries other than the U.S. The various risks inherent in doing business in the U.S. generally also exist when doing business outside of the U.S., and may be exaggerated by the difficulty of doing business in numerous sovereign jurisdictions due to differences in culture, geopolitical tensions or events, laws and regulations.\nIn foreign countries in which we have operations, a risk exists that our associates, contractors or agents could, in contravention of our policies, engage in business practices prohibited by U.S. laws and regulations applicable to us, such as the Foreign Corrupt Practices Act or U.S. sanctions laws and regulations or the laws and regulations of other countries. Our global policies designed to regulate such business practices and our global compliance programs designed to ensure compliance with these laws and regulations may not be adequate to prevent the risk that one or more of our associates, contractors or agents, including those based in or from countries where practices that violate such U.S. laws and regulations or the laws and regulations of other countries may be customary, will engage in business practices that are appropriately regulated by our policies, circumvent our compliance programs and, by doing so, violate such laws and regulations. Any such violations, even if prohibited by our\n22\ninternal policies, could subject us to fines and penalties and adversely affect our business or financial performance and our reputation.\nChanges in tax and trade laws, regulations and interpretations could materially adversely affect our financial performance.\nIn fiscal 2026, our Walmart U.S. and Sam's Club U.S. operating segments generated approximately 82% of our consolidated net sales. A significant portion of the general merchandise we sell in our U.S. stores and clubs is manufactured in other countries. Significant changes in tax and trade policies, including tariffs, trade barriers, other restrictions on the exportation and importation of goods and government regulations affecting trade between the U.S. and other countries where we source many of the products we sell can impact, and have impacted, our business and profit margins, including through increases in the costs at which we purchase merchandise and the prices at which we sell such merchandise to our customers, and the costs we incur in pursuing our strategic initiatives, including those set forth under the headings Strategic Risks and Operational Risks above in this Item 1A. If we are unable to successfully manage the various impacts that changes in these tax and trade policies have on our business, our results of operations and financial performance could be impacted. We experienced the impacts noted above during fiscal 2026 as a result of incremental import tariffs. We expect the dynamic tariff environment to continue, including in fiscal 2027, and cannot predict with certainty the future impact that this environment will have on our results of operations or financial performance, which could be material.\nWe are subject to income taxes, other taxes and tax collection and reporting obligations in both the U.S. and the foreign jurisdictions in which we currently operate or have historically operated. The determination of our worldwide provision for income taxes and current and deferred tax assets and liabilities requires judgment and estimation. Our taxes could be materially adversely affected by earnings being lower than anticipated in jurisdictions that have lower statutory tax rates and higher than anticipated in jurisdictions that have higher statutory tax rates, by changes in the valuation of our deferred tax assets and liabilities, or by changes in worldwide tax laws, tax rates, regulations or accounting principles and the interpretations of those rules. In addition, we also may not have sufficient notice to enable us to build systems and adopt processes to properly comply with new reporting or collection obligations by the effective date of those obligations.\nWe are also exposed to future tax legislation, as well as the issuance of future regulations and changes in administrative interpretations of existing tax laws, and changes in transfer pricing arrangements with our subsidiaries, any of which can impact our or our subsidiaries' current and future years' tax provision. The effect of such changes in tax law, changes in administrative interpretations of existing tax laws or changes in transfer pricing arrangements could also have a material effect on our business, financial position and results of operations. In the U.S., the Tax Cuts and Jobs Act of 2017 (the \"Tax Act\") significantly changed federal income tax laws that affect U.S. corporations. As further guidance is issued by the U.S. Treasury Department, the Internal Revenue Service and other standard-setting bodies, any resulting changes in our estimates will be treated in accordance with the relevant accounting guidance. Compliance with the Tax Act and any other new tax rules, regulations, guidance and interpretations, including collecting information not regularly produced by us or unexpected changes in our estimates, may require us to incur additional costs and could affect our results of operations.\nIn addition, legislatures and taxing authorities in many jurisdictions in which we operate may enact changes to, or seek to enforce novel interpretations of, existing tax laws, including both temporary and permanent measures. For example, the Organization for Economic Cooperation and Development (the \"OECD\") and other countries (including countries in which we operate) have committed to enacting substantial changes to numerous long-standing tax principles impacting taxation of large multinational enterprises. In particular, the OECD's Global Minimum Tax (Pillar Two) has become effective in many jurisdictions where we operate and continues to evolve through ongoing legislative and administrative guidance. These rules are complex, and may require significant data, systems and process changes to comply. The impact of these developments, as well as other changes in domestic and international tax laws and regulations could have a material effect on our cash taxes, affect our effective tax rate and increase our compliance, audit and controversy costs, any of which could materially adversely affect our financial performance.\nFurthermore, we are subject to regular review and audit by both domestic and foreign tax authorities as well as subject to the prospective and retrospective effects of changing tax regulations, legislation and interpretations. Although we believe our tax estimates are reasonable, the ultimate tax outcome may materially differ from the tax amounts recorded in our Consolidated Financial Statements and may materially affect our income tax provision, net income or cash flows in the period or periods for which such determination and settlement is made.\nChanges in and/or failure to comply with other laws, regulations and interpretations of such laws and regulations specific to the businesses and jurisdictions in which we operate\n\ncould materially adversely affect our reputation, market position or our business and financial performance.\nWe operate in complex regulated environments in the U.S. and other countries in which we operate and could be materially adversely affected by changes to existing legal requirements, including the related interpretations and enforcement practices, new legal requirements and/or any failure to comply with applicable regulations. In addition, the degree of regulatory, political, and media scrutiny we face increases the likelihood that our efforts to adhere to our practices and procedures to comply with\n23\nthese laws and legal requirements may be subject to frequent or increasing challenges. If we fail to prevent independent contractors or third-party service providers from violating our policies or applicable laws or committing any fraudulent acts against us or our customers, it could harm our business or damage our reputation, and we could face liability for unlawful activities by such third parties.\nOur health and wellness operations in the U.S. are subject to numerous federal, state and local laws and regulations including, but not limited to, those related to: licensing; reimbursement arrangements and other requirements and restrictions; registration and regulation of pharmacies; dispensing and sale of controlled substances and products containing pseudoephedrine; governmental (including Medicare and Medicaid) and commercial reimbursement; data privacy and security and the sharing and interoperability of data, including obligations and restrictions related to health information (such as those imposed under HIPAA); protection of consumer health data; billing and coding for healthcare services and properly handling overpayments; debt collection; necessity and adequacy of healthcare services; relationships with referral sources and referral recipients and other fraud and abuse issues, such as those addressed by anti-kickback and false claims laws and patient inducement regulations; qualification of healthcare practitioners; quality and standards of medical services and equipment; and the practice of the professions of pharmacy and optometry.\nHealth-related legislation at the federal and state level may have an adverse effect on our business or require us to modify certain aspects of our operations. For example, in the U.S., the Drug Enforcement Administration (\"DEA\") and various other regulatory authorities regulate the purchase, distribution, maintenance and dispensing of pharmaceuticals and controlled substances. We are required to hold valid DEA and state-level licenses, meet various security and operating standards and comply with the federal and various state-controlled substance acts and related regulations governing the sale, dispensing, disposal and holding of controlled substances. The DEA, the U.S. Food and Drug Administration and state regulatory authorities have broad enforcement powers, including the ability to seize or recall products and impose significant criminal, civil and administrative sanctions for violations of these laws and regulations. In addition, there has been recent heightened governmental and public scrutiny of pharmaceutical product pricing, which has resulted in federal and state legislation and regulations, executive orders and other initiatives and proposals designed to increase transparency in pharmaceutical product pricing and reform government program reimbursement methodologies (for example, the Inflation Reduction Act, which includes, among other matters, policies designed to impact drug prices and reduce drug spending by the federal government). Other health reform efforts at the federal and state levels may also impact our business or require us to modify certain aspects of our operations. States may enact conflicting laws, mandating changes in operations that negatively impact our ability to execute uniformly and achieve economies of scale across states. We may not be able to predict the nature or success of reform initiatives, and the resulting uncertainties may have an adverse effect on our business.\nAdditionally, through various financial service partners and our OnePay fintech venture, we offer various services such as money transfers, digital payment platforms, bill payment, money orders, check cashing, prepaid access, co-branded credit cards, limited access to cryptocurrency and equity investment products, installment lending and earned wage access. These products and services require us to comply with legal and regulatory requirements, including those intended to help detect and prevent fraud and other illicit activity, the sale and custody of equity and cryptocurrency products, privacy, information security, anti-money laundering and sanctions regimes and consumer protection under U.S. state and federal laws and regulations, as well as those of certain other countries. Failure to comply with these laws and regulations could result in fines, sanctions, penalties and harm to our reputation. Increased U.S. regulation of non-bank financial institutions may also result in additional requirements and scrutiny of certain financial services we offer.\nWe are also governed by foreign, national and state laws and regulations of general applicability, including laws and regulations related to competition and antitrust matters; protection of the environment and health and safety matters, including exposure to, and the management and disposal of, hazardous substances; food and drug safety, including drug supply chain security requirements; consumer protection, and safety, including the availability, sale, price label accuracy, membership subscription and cancellation; advertisement and promotion of products we sell and the financial services we offer (including through our digital channels, stores and clubs, as well as our OnePay fintech venture); anti-money laundering prohibitions; consumer financial protection laws; economic, trade and other sanctions matters; licensure, including supply chain logistics licensure, certification and enrollment with government programs; cross border data transfer; data privacy, cybersecurity, sharing and interoperability of data and use of AI technology; working conditions, workplace health and safety, equal employment opportunity, worker classification, employee benefit and other labor and employment matters; and health and wellness related regulations for our pharmacy and optometry operations. Failure to meet these requirements could affect the profitability of our business activities; limit our ability to pursue business opportunities or conduct business in certain jurisdictions; require changes to business practices or governance or alter our relationships with our customers, partners and other third parties, including our ability to continue certain relationships in Mexico, India or other international jurisdictions; result in increased costs related to regulatory oversight and compliance, litigation-related settlements, judgments or expenses, restitution to customers or the imposition of fines or monetary penalties.\nGovernmental and societal attention to social and environmental matters, including expanding mandatory and voluntary reporting diligence, and disclosure topics such as climate change, sustainability (including with respect to our supply chain),\n24\nnatural resources, waste reduction, energy, human capital and risk oversight could change the nature, scope and complexity of matters that we are required to control, assess and report.\nData privacy and protection laws or customer expectations relating to the collection, use, retention, disclosure, transfer and processing of personal information continue to undergo a rapid transformation in the U.S. and non-U.S. jurisdictions. State laws, such as the California Consumer Privacy Act (\"CCPA\"), in a number of states that have become effective, or will soon be effective, have created a substantially more complex regulatory regime associated with data-handling practices. Moreover, other laws and regulations related to data-handling and privacy that apply to our business, such as the Illinois Biometric Information Privacy Act, the European Union's General Data Protection Regulation (\"GDPR\"), the United Kingdom's General Data Protection Regulation (which implements the GDPR into U.K. law), China's Personal Information Protection Act (\"PIPL\"), and similar legislation in Quebec, Canada further increase the compliance obligations of our business. Certain of these laws have required us to modify our data processing practices and policies and to incur substantial costs and expenses to comply, which we anticipate will continue in the future. These and other privacy and cybersecurity laws may carry significant potential damages and civil penalties for noncompliance. These administrative fines are discretionary and based, in each case, on a multi-factored approach. Further, PIPL raises the requirements for processing personal information and requires our China business to undergo a cybersecurity assessment and obtain approval from the Cyberspace Administration of China (\"CAC\") as well as consent from the personal information owner before personal information collected in China may be transferred to, or accessed from, outside of China. We obtained CAC approval in September 2023 and are required to reapply by August 2026. We have made changes, and we may in the future make additional adjustments to our business practices, to comply with the personal information protection laws and regulations in China as they evolve. Residents in jurisdictions with comprehensive privacy laws generally have rights to access, correct and require deletion of their personal information, opt out of certain personal information sharing and selling, receive detailed information about how their personal information is used and may have a private right of action for data breaches. Furthermore, our marketing and customer engagement activities are subject to communications privacy laws such as the Telephone Consumer Protection Act. We may be subject to penalties and other consequences for noncompliance, including being required to change some portions of our business. Even an unsuccessful challenge by customer or regulatory authorities of our activities could result in adverse publicity, impact our reputation and could require a costly response from and defense by us.\nThe impact of new laws, regulations and policies and the related interpretations, as well as changes in enforcement practices or regulatory scrutiny as to existing laws and regulations (including, but not limited to, in the U.S., shifting enforcement priorities for existing antitrust, competition and pricing laws (including new or expanded laws relating to dynamic and algorithmic pricing), use and disposal of plastics, recycled plastics or other packaging materials, social and environmental initiatives, consumer protection and AI technology, as well as proposed new rules and regulations) generally cannot be predicted, and changes in applicable laws, regulations and policies and the related interpretations and enforcement practices of existing laws and regulations may require extensive system and operational changes, be difficult to implement, increase our operating costs, require significant capital expenditures, adversely impact the cost or attractiveness of the products or services we offer, or result in adverse publicity and harm our reputation. If we fail to predict or respond adequately to changes, including by implementing strategic and operational initiatives, or do not respond as effectively as our competitors, our business, operations and financial performance may be adversely affected.\nVIZIO Holding Corp. and its subsidiaries (collectively \"VIZIO\") are subject to a stipulated order with the Federal Trade Commission and the New Jersey Attorney General until 2037 that requires VIZIO to comply with specified obligations related to VIZIO's collection and use of certain consumer data and information collected from a VIZIO internet-connected device. These requirements apply to certain VIZIO entities and all other persons in active concert or participation with them. If we fail to comply with the terms of the order, we may face additional regulatory action, penalties or monetary fines, any of which could have a substantial negative impact on our business, operations and financial performance.\nIn addition, we may face audits or investigations by one or more government agencies relating to our compliance with applicable laws and regulations. The regulatory, political and media scrutiny we face, which may continue, amplifies these risks. To the extent a regulator or court disagrees with our interpretation of these laws and determines that our practices are not in compliance with applicable laws and regulations, we could be subject to civil and criminal penalties that could adversely affect the continued operation of our businesses, including: suspension of payments from government programs; loss of required licenses and certifications; loss of authorizations to participate in or exclusion from government programs, including the Medicare and Medicaid programs in the U.S.; termination from contractual relationships, including those with our drug suppliers and third-party payers; and significant fines or monetary damages. Failure to comply with applicable legal or regulatory requirements in the U.S. or in any of the countries in which we operate could result in significant legal and financial exposure, damage to our reputation and have a material adverse effect on our business operations, financial position and results of operations.\n25\nWe are subject to risks related to litigation claims, and other legal proceedings that may materially adversely affect our results of operations, financial position and liquidity.\nWe operate globally in a highly regulated and litigious environment. We are or may be involved in legal proceedings, including litigation, arbitration and other claims, investigations, inspections, audits, claims, inquiries and similar actions by pharmacy, healthcare, tax, consumer protection, employment, environmental and other governmental authorities as well as private individuals. We may also be involved in legal proceedings brought by regulatory authorities, organizations and individuals relating to products, product claims or product packaging, including that such products or packaging are made of plastic, do not meet required safety standards, contain PFAS or other chemicals, are not appropriately disposed, contain incorrect weight or measurement, or contain misrepresentations about country of origin or assembly, recyclability, compostability, biodegradability or reusability. We may also have indemnification obligations for legal commitments of certain business customers we contract with and businesses we have divested. Legal proceedings, in general, and securities, derivative actions, class and representative actions and multi-district litigation, in particular, can be expensive and disruptive. Some of these suits may purport or may be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years. For example, we are increasingly named as a defendant in cases that allege novel theories of personal injury or economic loss from consumer products, including multidistrict litigation relating to acetaminophen and baby food. We are a defendant in a number of cases containing class, representative or collective action allegations in which the plaintiffs have brought claims under federal, state and local wage and hour and employment laws, as well as a number of cases containing class-action allegations in which the plaintiffs have brought claims under federal and state competition and consumer protection laws. We cannot provide any assurance as to the scope and outcome of these matters and no assurance that our business, financial position, results of operations or cash flows will not be materially adversely affected.\nWe are increasingly named as a defendant in cases that involve allegations relating to the retail prices charged to customers and costs we negotiate with suppliers. These cases include purported class actions under federal and state antitrust and competition, consumer protection and related laws brought by customers, retailers and others, including cases related to our wholesale purchase and retail sale of batteries and soft drinks. We cannot provide any assurance as to the scope and outcome of these matters and no assurance that our business, financial position, results of operations or cash flows will not be materially adversely affected.\nClaims for insurance-related liabilities, such as workers' compensation, general liability, auto liability, product liability and certain employee-related healthcare benefits, are funded predominantly through self-insurance. Insurance coverage is maintained for certain risks to limit exposures arising from significant losses. The types and amounts of insurance may vary from time to time based on our risk-management strategy, risk tolerance, regulatory requirements, market conditions and other factors. Significant claims or events, regulatory changes, a substantial rise in costs of health care or costs to maintain our insurance or the failure to maintain adequate insurance coverage could have an adverse impact on our financial condition and results of operations. Although we maintain specific coverages for catastrophic property losses, we still bear a significant portion of the risk of losses incurred as a result of any physical damage to, or the destruction of, any stores, warehouses, depots, manufacturing or home office facilities, loss or spoilage of inventory, and business interruption. Such losses could materially impact our cash flows and results of operations.\nFor specific details and information on certain claims and litigation matters to which we are party and that could impact our business, financial position, results of operations or cash flows, see the disclosures set forth below under the caption \"\nItem 3. Legal Proceedings\n\" and in\nNote 9\n in the \"Notes to our Consolidated Financial Statements,\" which are part of this Annual Report on Form 10-K.\nOur amended and restated bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could increase the costs for our shareholders to bring claims, discourage our shareholders from bringing claims, or\n\nlimit our shareholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, associates or shareholders in such capacity.\nOur amended and restated bylaws designate the Delaware Court of Chancery as the exclusive forum for certain shareholder claims, including derivative claims alleging a violation of duty by a current or former director, officer, associate or shareholder, unless we agree otherwise in writing. This exclusive forum provision may increase the cost for shareholders to bring claims or limit their ability to choose a favorable forum, potentially discouraging lawsuits. Alternatively, if a court finds this provision unenforceable, we may face higher costs resolving such matters in other jurisdictions, which could negatively impact our business and financial results. However, this provision does not affect the exclusive or concurrent jurisdiction of federal courts over actions brought under the federal securities laws, including the Exchange Act, as amended, the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.\n26\nNot satisfying stakeholder expectations with respect to our social and environmental efforts could adversely affect our reputation or subject us to regulatory or litigation risk.\nWe strive to deliver shared value through our business, although stakeholder expectations continue to evolve and are not uniform, and our diverse stakeholders expect us to make significant progress in certain areas. We have established, and may continue to establish, various goals and initiatives on certain matters, including with respect to climate change, waste, packaging, plastic usage and other topics. We periodically publish information about our shared value priorities, strategies, progress and challenges through our online social and environmental reporting, which is not incorporated by reference into and does not form any part of this Annual Report on Form 10-K. Achievement of these aspirations and goals is subject to risks and uncertainties, many of which are outside of our control, and we cannot guarantee that we will achieve our goals or that our initiatives will achieve their desired results. Consequently, it is possible that we may fail, or be perceived to have failed, in the achievement of our social and environmental goals and certain customers, associates, shareholders, investors, suppliers, business partners, government agencies and non-governmental organizations might not be satisfied with our progress. Furthermore, federal, state and local regulatory authorities, private organizations and individuals may challenge our approach to social and environmental issues, including allegations that we failed in our efforts, should not have undertaken such efforts or that we improperly engaged with other entities in our approach to social and environmental issues. These challenges could involve administrative proceedings or litigation, including as class or mass actions. A failure or perceived failure to meet our goals or to otherwise meet evolving and diverse stakeholder expectations could adversely affect public perception of our business, associate morale or customer or shareholder support.\nITEM\u00a01B.\nUNRESOLVED STAFF COMMENTS\nNone.\nITEM\u00a01C.\nCYBERSECURITY\nWalmart seeks to build and maintain the trust of customers, associates, shareholders and other stakeholders with respect to our use of technology and data. Our digital trust commitments, in line with our Company's values of service, excellence, integrity and respect for the individual, provide a foundation for our approach to cybersecurity.\nThe Board of Directors, committees of the Board of Directors and management coordinate risk oversight and management responsibilities, and cybersecurity represents an important component of our overall approach to enterprise risk management.\nIn general, we seek to address cybersecurity risks through a cross-functional approach\n focused on protecting business operations and preserving the confidentiality, integrity and availability of information by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.\nBoard of Directors' oversight of risks from cybersecurity threats\nOur Board of Directors, which has primary responsibility for overseeing risk management,\n has delegated risk management oversight responsibility for information systems, information security, data privacy and cybersecurity to the Audit Committee.\n Several of our Board members, including certain members of our Audit Committee, have backgrounds or professional experience in risk management, digital platforms, information technology or cybersecurity.\nThe Audit Committee receives periodic updates from our Chief Information Security Officer (\"CISO\"), Chief Technology Officer (\"CTO\") and other members of management on risks related to information systems, information security, data privacy and cybersecurity. Specific topics may include updates to our company's approach to cybersecurity risk management; recent developments; key initiatives; the threat landscape; trends; and the results of certain assessments and testing. The\nBoard\n of Directors receives regular reports from the Audit Committee chair on these and other risk-related matters as deemed necessary. Our CISO or other members of management provide information to the Audit Committee pursuant to risk-based escalation protocols for cybersecurity incidents that exceed established reporting thresholds.\n\nManagement's role in assessing and managing material risks from cybersecurity threats\nOur\nCISO\n leads Walmart's Information Security organization and has responsibility for overseeing our Company's cybersecurity program.\n To operationalize our program, we deploy multidisciplinary teams, including cybersecurity personnel and professionals, to address cybersecurity threats and respond to cybersecurity incidents, including for those recently acquired and non-wholly owned subsidiaries whose systems have not been fully integrated into Walmart's networks.\nThrough ongoing engagement with these teams and certain third-party service providers, our CISO monitors the prevention, detection, mitigation and remediation of cybersecurity threats and incidents. Cybersecurity incidents that reach established thresholds are reported to senior management and the Audit Committee and are analyzed for external reporting requirements.\nOur CISO has been a Walmart associate for over 30 years, has served in various roles in information technology and information security at Walmart for more than 20 years, and has received industry-recognized information security certifications. Our CTO, to whom the CISO reports, has served as Walmart's CTO since 2019 and prior to that had experience managing technology and other risks at several other large public companies.\n27\nRisk Management and Strategy\nOur cybersecurity program is informed by various industry frameworks including the National Institute of Standards and Technology Cybersecurity Framework (NIST-CSF), which are reflected in our related policies, standards, processes and practices. We may implement changes to our cybersecurity program when deemed appropriate based on updates to laws or industry standards among other things. We have multiple layers of security designed to detect and prevent cybersecurity events, as well as dedicated teams of cybersecurity personnel and professionals, which assist our CISO in helping to assess, identify, monitor, detect and manage cybersecurity risks, threats, vulnerabilities and incidents. We collaborate with public and private entities and industry groups and engage third-party service providers to expand the capabilities and capacity of our cybersecurity program when deemed appropriate. Certain key components of our cybersecurity program include the following:\nProtecting our technology and information systems:\n When we implement significant changes to our technologies or information systems, we conduct risk-based security and privacy impact assessments and deploy technical safeguards that are designed to reasonably protect our technology and information systems from cybersecurity threats. We actively monitor and proactively research potential cybersecurity threats to our technologies and information systems. We use what we learn to evolve our security controls over time to mitigate risks posed by such threats.\nIncident response and recovery planning:\n We maintain incident response and recovery plans that address our response to cybersecurity incidents, including incidents that we become aware of at third parties that support our operations. These plans guide how we evaluate and assign incident severity levels and reporting thresholds; escalate and engage incident response teams; and manage and mitigate the related risks.\nThird-party risk management:\n We maintain a risk-based approach to identifying and managing cybersecurity threats presented to Walmart by third-party systems that support our operations, as well as third-party users of our data and systems, including vendors, service providers and subcontractors.\nTraining and awareness:\n We provide recurring information security training (which includes cybersecurity training) to our associates and certain third parties based on access, risk, roles, policies, standards and behaviors.\nAssessments and testing:\n We engage in periodic assessment and testing of our policies, standards, processes and practices that are designed to address cybersecurity threats. These efforts include tabletop exercises, threat modeling, vulnerability testing and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.\nWe regularly engage assessors, consultants, auditors or other third parties to assist with our assessments and testing.\n Where appropriate we adjust our cybersecurity policies, standards, processes and practices accordingly based on internal and external assessment and testing results.\nCertain of Walmart's systems and those of our third-party service providers have experienced cybersecurity incidents and threats.\nBased on the information available as of the date of this Annual Report on Form 10-K, we are not aware of any risks from cybersecurity threats, including as a result of any cybersecurity incidents, which have materially affected us or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.\n Despite our security measures, however, there can be no assurance that we, or the third parties with which we interact, will not experience a cybersecurity incident in the future that will materially affect us. Additional information about cybersecurity risks we face is discussed in \"\nItem 1A. Risk Factors\n,\" which should be read in conjunction with the information above.\n28\nITEM\u00a02.\nPROPERTIES\nAs of January\u00a031, 2026\n(1)\n, information on our retail units for Walmart U.S., Sam's Club U.S. and Walmart International is summarized as follows:\nTotal Retail\nUnit Count\nSquare Feet\nTotal\n(2)\nMinimum\nMaximum\nAverage\nWalmart U.S.\nSupercenters\n3,566\n633,724\n69,000\n260,000\n178,000\nDiscount Stores\n351\n36,609\n30,000\n206,000\n104,000\nNeighborhood Markets and other small formats\n(3)\n694\n28,375\n28,000\n65,000\n42,000\nWalmart U.S. Total\n4,611\n698,708\nSam's Club U.S.\n601\n80,502\n94,000\n168,000\n134,000\nU.S. Total\n5,212\n779,210\nWalmart International\n(4)\nRetail\n5,398\n236,214\n1,400\n186,000\n29,000\nWholesale\n345\n41,405\n25,000\n202,000\n86,000\nWalmart International Total\n5,743\n277,619\nTotal Company\n10,955\n1,056,829\n(1)\nWalmart International unit counts, with the exception of Canada, are as of December\u00a031, 2025, to correspond with the balance sheet date of the related geographic market. Canada unit counts are as of January\u00a031, 2026.\n(2)\nTotal square feet reported in thousands.\n(3)\nSquare feet for other small formats is excluded from the presentation of the minimum, maximum and average for Walmart U.S.\n(4)\nTotal square feet represents gross square feet, while the minimum, maximum and average square feet amounts represent retail unit selling area.\nOwned and Leased Properties\nThe following table provides further details of our retail units and distribution facilities, including eCommerce fulfillment centers and return facilities, as of January\u00a031, 2026\n(1)\n:\nOwned\nLeased\n(2)\nTotal\nRetail Units\n\u00a0\u00a0\u00a0\u00a0Walmart U.S. retail units\n3,728\n883\n4,611\n\u00a0\u00a0\u00a0\u00a0Sam's Club U.S. retail units\n464\n137\n601\nWalmart International retail units\n1,486\n4,257\n5,743\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total retail units\n5,678\n5,277\n10,955\nDistribution Facilities\nU.S. distribution facilities\n(3)\n125\n67\n192\nInternational distribution facilities\n24\n155\n179\nTotal distribution facilities\n149\n222\n371\n(1)\nWalmart International properties, with the exception of Canada, are as of December\u00a031, 2025, to correspond with the balance sheet date of the related geographic market. Canada unit counts are as of January\u00a031, 2026.\n(2)\nIncludes distribution facilities which are third-party owned and operated.\n(3)\nU.S. distribution facilities are utilized by both the Walmart U.S. and Sam's Club U.S. segments.\nWe own office facilities in Bentonville, Arkansas, that serve as our principal office and own and lease office facilities throughout the U.S. and internationally for operations as well as for field and market management. The land on which our stores are located is either owned or leased by the Company. Owned retail units on leased land are reflected as leased locations in the table above. We use independent contractors to construct our buildings. All store leases provide for annual rentals, some of which escalate during the original lease or provide for additional rent based on sales volume. Substantially all of the Company's store and club leases have renewal options, some of which include rent escalation clauses. For further information on our distribution network, see the caption \"Distribution\" under \"\nItem 1. Business\n.\"\n29\nITEM\u00a03.\nLEGAL PROCEEDINGS\nI. SUPPLEMENTAL INFORMATION:\n\nThe Company is involved in legal proceedings arising in the normal course of its business, including litigation, arbitration and other claims, and investigations, inspections, subpoenas, audits, claims, inquiries and similar actions by governmental authorities.\nWe discuss certain legal proceedings in\nNote 9\n to our Consolidated Financial Statements included in \"\nItem 8. Financial Statements and Supplementary Data\n,\" which is captioned \"Contingencies,\" under the sub-caption \"Legal Proceedings.\" We refer you to that discussion for important information concerning those legal proceedings, including the basis for such actions and, where known, the relief sought. We provide the following additional information concerning those legal proceedings, including the name of the lawsuit, the court in which the lawsuit is pending, and the date on which the petition commencing the lawsuit or appeal was filed, in addition to disclosure of certain other legal matters.\nOpioid-Related Litigation:\n\nIn re National Prescription Opiate Litigation (MDL No. 2804)\n(the \"MDL\") is pending in the U.S. District Court for the Northern District of Ohio and includes approximately 230 cases with claims against the Company as of March 6, 2026. In addition, the following 13 other opioid-related cases against the Company and its subsidiaries were pending in U.S. state and federal courts and Canadian courts as of March 6, 2026: Baby Doe 1, et al. v. Allergan Finances, LLC, et al., U.S. Dist. Ct., E.D. Tenn., 4/29/25; Marshall Cty. Bd. of Educ., et al. v. Cephalon, Inc., et al., U.S. Dist. Ct., N.D. W. Va., 10/28/24; Reiner v. CVS Pharm., Inc., et al., Nev. 5th Jud. Dist. Ct., Nye Cty., 2/26/24; Chaney v. CVS Pharm., Inc., et al., Ky. Cir. Ct., Perry Cty., 12/11/23; City of Grande Prairie, et al. v. Apotex Inc., et al., Alta. King's Bench Ct., Calgary Jud. Ctr., 4/27/23; Lac La Ronge Indian Band, et al. v. Apotex Inc., et al., Sask. King's Bench Ct., Prince Albert Jud. Ctr., 3/17/23; Commonwealth of Pennsylvania ex rel. Allegheny Cty. Dist. Att'y Stephen A. Zappala, Jr. v. CVS Ind., LLC, et al., Pa. Ct. Com. Pl., Delaware Cty., 8/8/22; Baby Doe, et al., ex rel. Their Guardian Ad Litem v. Endo Health Sols., Inc., et al., U.S. Dist. Ct., M.D. Tenn., 8/3/22; Paynter ex rel. Minor Child(ren) Z.N.B. v. McKesson Corp., et al., W. Va. Cir. Ct., Kanawha Cty., 3/28/22; Blankenship ex rel. Minor Child Z.D.B. v. McKesson Corp., et al., W. Va. Cir. Ct., Kanawha Cty., 1/14/22; Miss. Baptist Med. Ctr. Inc., et al. v. Amneal Pharm., LLC, et al., Miss. 1st Jud. Dist., Hinds Cty. Cir. Ct., 5/15/20; Dallas Cty. Hosp. Dist. d/b/a Parkland Health & Hosp. Sys., et al., v. Amneal Pharm., LLC, et al., Tex. Dist. Ct., 152nd Jud. Dist., Harris Cty., 11/20/19; Fla. Health Scis. Ctr., Inc., et al. v. Sackler, et al., Fla. Cir. Ct., 17th Jud. Cir., Broward Cty., 9/16/19.\nDOJ Opioid Civil Litigation:\n\nUnited States of America v. Walmart Inc., et al.,\n USDC, Dist. of DE, 12/22/20.\nSettlement of Certain Opioid-Related Matters:\nAs described in more detail in\nNote 9\n to our Consolidated Financial Statements, the Company accrued a liability of approximately $3.3 billion in fiscal year 2023 for certain opioid-related settlements. As of January 31, 2025, all of the accrued liability has been paid.\nFalse Claims Act Litigation:\nUnited States of America\nex rel.\nJames Marcilla and Isela Chavez\n, USDC, Dist. of N.M., 8/23/19, transferred to USDC Dist. of DE 7/25/24.\nASDA Equal Value Claims:\n\nMs S Brierley & Others v. ASDA Stores Ltd\n (2406372/2008 &\n Others\n \u2013 Manchester Employment Tribunal);\nAbbas & Others v Asda Stores limited\n(KB-2022-003243); and\nAbusubih & Others v Asda Stores limited\n (KB-2022-003240).\nFederal Trade Commission and State Attorneys General Driver Platform Litigation:\n\nFederal Trade Commission, et al. v. Walmart Inc.\n, USDC, N.D. Cal., 2/26/26\n.\nMexico Antitrust Matter:\n Comisi\u00f3n Federal de Competencia Econ\u00f3mica of M\u00e9xico, Investigative Authority v. Nueva Wal-Mart de M\u00e9xico, S.de R.L. de C.V. (Docket IO-002-2020, consolidated with Docket DE-026-2020), Mexico, 10/6/23.\nIndia Antitrust Matter:\nCompetition Commission of India, Case No. 40 of 2019, order initiating investigation 1/13/20.\nII. ENVIRONMENTAL MATTERS:\n Item\u00a0103 of SEC Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Company reasonably believes will exceed $1 million.\nIn October 2023, the Company received a Finding of Violation from the U.S. Environmental Protection Agency (the \"EPA\") alleging violations of the Clean Air Act in connection with the Company's refrigeration leak detection and repair program at certain of its facilities. The Company is cooperating with the EPA in its investigation. The EPA may seek to impose monetary and non-monetary penalties for the alleged violations of the Clean Air Act. The Company is unable to predict the final outcome of this matter, but the EPA could seek penalties in excess of $1 million. Although the Company does not believe this matter will have a material adverse effect on its business, financial position, results of operations, or cash flows, the Company can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.\nITEM\u00a04.\nMINE SAFETY DISCLOSURES\nNot applicable.\n30\nPART II\nITEM\u00a05.\nMARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES\nMarket for Common Stock\nEffective December 9, 2025, the principal market on which Walmart's common stock is listed has been the Nasdaq Global Select Market. Prior to December 9, 2025, Walmart's common stock was listed on the New York Stock Exchange. The common stock trades under the symbol \"WMT.\"\nHolders of Record of Common Stock\nAs of March\u00a011, 2026, there were 185,190 holders of record of Walmart's common stock, although there is a much larger number of beneficial owners.\nStock Performance Chart\nThis graph compares the cumulative total shareholder return on Walmart's common stock during the five fiscal years ended through fiscal 2026 to the cumulative total returns on the S&P 500 Consumer Discretionary Distribution & Retailing Index and the S&P 500 Index. The comparison assumes $100 was invested on February\u00a01, 2021 in shares of our common stock and in each of the indices shown and assumes all dividends were reinvested.\nFiscal Years Ended January 31,\n2021\n2022\n2023\n2024\n2025\n2026\nWalmart Inc.\n$\n100.00\n$\n101.10\n$\n105.67\n$\n123.22\n$\n222.20\n$\n272.28\nS&P 500 Index\n100.00\n123.29\n113.16\n136.72\n172.78\n201.03\nS&P 500 Consumer Discretionary Distribution & Retailing Index\n100.00\n108.64\n88.85\n114.73\n161.20\n164.12\nIssuer Repurchases of Equity Securities\nFrom time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors. Any repurchased shares are constructively retired and returned to an unissued status. All repurchases during fiscal 2026 were made under the $20.0 billion share repurchase program approved in November 2022, of which authorization for $4.0 billion of share repurchases remained as of January\u00a031, 2026. In February 2026, the Board of Directors approved a new $30.0 billion share repurchase authorization, which has no expiration date or other restrictions limiting the period over which the Company can make repurchases, and beginning February 23, 2026, replaced the remaining capacity under the prior authorization.\n31\nShare repurchase activity under our share repurchase programs, on a trade date basis, for each month in the quarter ended January\u00a031, 2026, was as follows:\nFiscal Period\nTotal Number\u00a0of\nShares Repurchased\nAverage Price\u00a0Paid\nper\u00a0Share\n(in dollars)\nTotal Number\u00a0of\nShares Repurchased\nas\u00a0Part\u00a0of Publicly\nAnnounced Plans\u00a0or\nPrograms\nApproximate Dollar\u00a0Value\u00a0of\nShares\u00a0that May\u00a0Yet Be\nRepurchased Under\u00a0the\nPlans\u00a0or Programs\n(1)\n(in billions)\nNovember 1-30, 2025\n3,187,083\n$\n104.48\n3,187,083\n$\n4.7\nDecember 1-31, 2025\n3,472,099\n113.61\n3,472,099\n4.3\nJanuary 1-31, 2026\n3,073,037\n116.69\n3,073,037\n4.0\nTotal\n9,732,219\n9,732,219\n(1)\nRepresents the approximate dollar value of shares that could have been repurchased under the current plan at the end of the month.\nITEM\u00a06.\nRESERVED\n32\nITEM\u00a07.\nMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nOverview\nThis discussion, which presents our results for the fiscal years ended January\u00a031, 2026 (\"fiscal 2026\"), January\u00a031, 2025 (\"fiscal 2025\") and January\u00a031, 2024 (\"fiscal 2024\"), should be read in conjunction with our Consolidated Financial Statements and the accompanying notes. We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period and the primary factors that accounted for those changes. We also discuss certain performance metrics that management uses to assess the Company's performance. Additionally, the discussion provides information about the financial results of each of the three segments of our business to provide a better understanding of how each of those segments and its results of operations affect the financial condition and results of operations of the Company as a whole.\nThroughout this Item 7, we discuss segment operating income, comparable store and club sales and other measures. Management measures the results of the Company's segments using each segment's operating income, including certain corporate overhead allocations, as well as other measures. From time to time, we revise the measurement of each segment's operating income and other measures as determined by the information regularly reviewed by our chief operating decision maker.\nIn discussing our operating results, the term currency exchange rates refers to the currency exchange rates we use to convert the operating results for countries where the functional currency is not the U.S. dollar into U.S. dollars. We calculate the effect of changes in currency exchange rates as the difference between current period activity translated using the current period's currency exchange rates and the comparable prior year period's currency exchange rates. Additionally, no currency exchange rate fluctuations are calculated for non-USD acquisitions until owned for 12 months. Throughout our discussion, we refer to the results of this calculation as the impact of currency exchange rate fluctuations.\nRecent Developments, Macroeconomic Conditions and Potential Impacts\nWe expect continued uncertainty in our business and the global economy due to the following factors: tariffs and trade restrictions; inflationary trends; fluctuations in global currencies; swings in macroeconomic conditions and their effect on consumer confidence; changes in employment trends; volatility in fuel prices; and supply chain pressures, any of which may impact our results. While we operate in a highly dynamic tariff environment, less than one third of what we sell in the U.S. is imported, with most of our imports coming from China, Mexico, Vietnam, India and Canada. Information on certain risks, factors, and uncertainties that can affect our operating results and an investment in our securities can be found herein under \"\nItem 1A. Risk Factors\n.\"\nOur net sales and gross profit margin are influenced in part by our pricing and merchandising strategies in response to cost increases. Those pricing strategies include, but are not limited to: absorbing cost increases instead of passing those cost increases on to our customers and members; reducing prices in certain merchandise categories; focusing on opening price points for certain food categories; and when necessary, passing cost increases on to our customers and members. Merchandising strategies include, but are not limited to: working with our suppliers to reduce product costs and share in absorbing cost increases; focusing on private label brands and smaller pack sizes; earlier-than-usual purchasing and in greater volumes or moderating purchasing in certain categories; and securing ocean carrier and container capacity. These strategies have and may continue to impact gross profit as a percentage of net sales.\nIn July 2025, the One Big Beautiful Bill Act (the \"OBBB Act\") was enacted, introducing a series of corporate tax changes in the U.S., including 100% bonus depreciation on qualified property and full expensing for research and development expenditures. The impacts of the OBBB Act were not material to our income tax expense or effective tax rate. Certain provisions decreased cash taxes paid in fiscal 2026 and may change the timing of cash tax payments in future periods.\nFor a detailed discussion on results of operations by reportable segment, refer to \"\nResults of Operations\n\" below.\nCompany Performance Metrics\nWe are committed to helping customers save money and live better through everyday low prices, supported by everyday low costs.\u00a0At times, we adjust our business strategies to maintain and strengthen our competitive positions in the countries in which we operate.\u00a0We define our financial priorities as follows:\n\u2022\nGrowth - serve customers through a seamless omnichannel experience;\n\u2022\nMargin - improve our operating income margin through productivity initiatives as well as category and business mix; and\n\u2022\nReturns - improve our Return on Investment through margin improvement and disciplined capital spend.\n33\nGrowth\nOur objective of prioritizing growth means we will focus on serving customers and members however they want to shop through our omnichannel business model. This includes increasing comparable store and club sales through increasing membership at Sam's Club U.S. and through Walmart+, accelerating eCommerce sales growth and expansion of omnichannel initiatives that complement our strategy.\nComparable sales is a metric that indicates the performance of our existing stores and clubs by measuring the change in sales for such stores and clubs, including eCommerce sales, for a particular period over the corresponding period in the previous year. Walmart's definition of comparable sales includes sales from stores and clubs open for the previous 12 months, including remodels, relocations, expansions and conversions, as well as eCommerce sales. We measure the eCommerce sales impact by including all sales initiated digitally, including omnichannel transactions which are fulfilled through our stores and clubs as well as certain other business offerings that are part of our ecosystem, such as our advertising net sales. Comparable sales are also referred to as \"same-store\" sales by others within the retail industry. The method of calculating comparable sales varies across the retail industry. As a result, our calculation of comparable sales is not necessarily comparable to similarly titled measures reported by other companies.\nOur discussion of our comparable sales below refers to our calendar comparable sales calculated using our fiscal calendar, which may result in differences when compared to comparable sales using the retail calendar (also known as the 4-5-4 calendar) as provided in our quarterly earnings releases. We report on comparable sales in the U.S. as we believe it is a meaningful metric within the context of the U.S. retail market where there is a single currency, one inflationary market and generally consistent store and club formats from year to year.\nCalendar comparable sales, as well as the impact of fuel, for fiscal 2026 and 2025, were as follows:\n\nFiscal Years Ended January 31,\n\n2026\n2025\n2026\n2025\n\nWith Fuel\nFuel Impact\nWalmart U.S.\n4.3%\n4.8%\n0.0%\n(0.1)%\nSam's Club U.S.\n2.9%\n4.7%\n(1.9)%\n(1.5)%\nWalmart U.S. comparable sales increased 4.3% and 4.8% in fiscal 2026 and 2025, respectively. Comparable sales in fiscal 2026 were driven by growth in average ticket and transactions, and also reflected growth in unit volumes and strength in all merchandise categories. Comparable sales in fiscal 2025 were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Walmart U.S. eCommerce sales positively contributed approximately 4.3% and 2.9% to comparable sales for fiscal 2026 and 2025, respectively. This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, and was primarily driven by store-fulfilled pickup and delivery.\nSam's Club U.S. comparable sales increased 2.9% and 4.7% in fiscal 2026 and 2025, respectively. For fiscal 2026, comparable sales were driven by growth in unit volumes and transactions, reflecting strong sales in grocery, health and wellness and general merchandise. For fiscal 2025, comparable sales were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Additionally, fiscal 2026 and 2025 growth was partially offset by lower fuel sales, negatively impacting comparable sales by 1.9% and 1.5%, respectively, primarily due to lower fuel prices. Sam's Club U.S. eCommerce sales positively contributed approximately 3.3% and 2.3% to comparable sales for fiscal 2026 and 2025, respectively, which reflects continued strength in member engagement with omnichannel offerings.\n34\nMargin\nOur objective of prioritizing margin focuses on growth with a focus on incremental margin accretion through a combination of productivity improvements as well as category and business mix. We invest in technology and process improvements to increase productivity, manage inventory and reduce costs and we operate with discipline by managing expenses and optimizing the efficiency of how we work. We measure operating discipline through expense leverage, which we define as net sales growing at a faster rate than operating, selling, general and administrative (\"operating\") expenses. Additionally, we focus on our mix of businesses, including expanding our ecosystem in higher margin areas, such as digital advertising. Our objective is to achieve operating income leverage, which we define as growing operating income at a faster rate than net sales.\nFiscal Years Ended January 31,\n(Amounts in millions, except unit counts)\n2026\n2025\nNet sales\n$\n706,413\n$\n674,538\nPercentage change from comparable period\n4.7\n%\n5.0\n%\nGross profit\n(1)\n as a percentage of net sales\n24.2\n%\n24.1\n%\nOperating expenses as a percentage of net sales\n20.9\n%\n20.7\n%\nOperating income\n$\n29,825\n$\n29,348\nOperating income as a percentage of net sales\n4.2\n%\n4.4\n%\n(1)\nGross profit defined as net sales less cost of sales.\nGross profit as a percentage of net sales (\"gross profit rate\") increased 8 and 40 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase in fiscal 2026 was primarily driven by the Walmart U.S. segment, due to disciplined inventory management, as well as growth in higher margin businesses globally. The increase in fiscal 2025 was primarily driven by the Walmart U.S. segment, due to managing prices aligned to our competitive historic price gaps, as well as growth in higher margin businesses globally. In both years, the increases were partially offset by mix shifts into lower margin merchandise categories across segments, as well as ongoing channel and format mix shifts in the Walmart International segment.\nOperating expenses as a percentage of net sales increased 20 and 36 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase for fiscal 2026 was primarily due to higher self-insured general liability claims expense in the U.S. of approximately $0.9 billion, influenced by rising costs to resolve claims across retail and related industries, a charge of $0.7 billion related to modification of certain share-based compensation arrangements for our PhonePe subsidiary and increased depreciation related to our capital investments. The increase for fiscal 2025 was primarily due to higher variable pay as a result of exceeding planned performance, increased marketing and higher depreciation expenses.\nOperating income as a percentage of net sales decreased 13 basis points for fiscal 2026 and increased 15 basis points for fiscal 2025, respectively, primarily due to the factors described above and strong growth in membership income globally.\nReturns\nAs we execute our financial framework, we believe our return on capital will improve over time. We measure return on capital with our return on investment and free cash flow metrics. In addition, we provide returns in the form of share repurchases and dividends, which are discussed in the\nLiquidity and Capital Resources\n section.\nReturn on Assets and Return on Investment\nWe include Return on Assets (\"ROA\") and Return on Investment (\"ROI\") as metrics to assess our return on capital. ROA is the most directly comparable measure based on our financial statements presented in accordance with generally accepted accounting principles in the U.S. (\"GAAP\") while ROI is considered a non-GAAP financial measure. Management believes ROI is a meaningful metric to share with investors because it helps investors assess how effectively Walmart is deploying its assets. Trends in ROI can fluctuate over time as management balances long-term strategic initiatives with possible short-term impacts.\nOur calculation of ROI is considered a non-GAAP financial measure because it uses financial measures that differ from those used in ROA, the most directly comparable GAAP financial measure. ROA is consolidated net income for the period divided by average total assets for the period. We define ROI as operating income plus interest income, depreciation and amortization, and rent expense for the trailing 12 months divided by average invested capital during the period. We consider average invested capital to be the average of our beginning and ending total assets, plus average accumulated depreciation and amortization, less average accounts payable and average accrued liabilities for that period. Although ROI is a standard financial measure, numerous methods exist for calculating a company's ROI. As a result, the method used by management to calculate our ROI may differ from the methods used by other companies to calculate their ROI.\n35\nThe calculation of ROA and ROI, along with a reconciliation of ROI to the calculation of ROA, the most comparable GAAP financial measure, is as follows:\n\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\nCALCULATION OF RETURN ON ASSETS\nNumerator\nConsolidated net income\n$\n22,270\n$\n20,157\nDenominator\nAverage total assets\n(1)\n$\n272,746\n$\n256,611\nReturn on assets (ROA)\n8.2\n%\n7.9\n%\nCALCULATION OF RETURN ON INVESTMENT\nNumerator\nOperating income\n$\n29,825\n$\n29,348\n+ Interest income\n368\n483\n+ Depreciation and amortization\n14,203\n12,973\n+ Rent\n2,434\n2,347\n= ROI operating income\n$\n46,830\n$\n45,151\nDenominator\nAverage total assets\n(1)\n$\n272,746\n$\n256,611\n\u00a0\u00a0+ Average accumulated depreciation and amortization\n(1)\n129,117\n121,624\n- Average accounts payable\n(1)\n60,864\n57,739\n- Average accrued liabilities\n(1)\n30,266\n29,052\n= Average invested capital\n$\n310,733\n$\n291,444\nReturn on investment (ROI)\n15.1\n%\n15.5\n%\n(1)\nThe average is calculated using the account balance at the end of the current and prior comparative periods.\n\nAs of January 31,\n\n2026\n2025\n2024\nCertain Balance Sheet Data\nTotal assets\n$\n284,668\n$\n260,823\n$\n252,399\nAccumulated depreciation and amortization\n134,587\n123,646\n119,602\nAccounts payable\n63,061\n58,666\n56,812\nAccrued liabilities\n31,187\n29,345\n28,759\nROA was 8.2% and 7.9% for fiscal 2026 and 2025, respectively. The increase in ROA was primarily due to an increase in net income as a result of net increases in the fair value of our equity and other investments combined with higher operating income, offset by an increase in average total assets due to higher purchases of property and equipment.\n\nROI was 15.1% and 15.5% for fiscal 2026 and 2025, respectively. The decrease in ROI was primarily due to an increase in average invested capital due to higher purchases of property and equipment. ROI benefited from increased operating income due to improved business performance, which was partially offset by the incremental non-cash share-based compensation charge at PhonePe as well as certain legal matters and other business restructuring charges.\nCapital Allocation\nOur strategy includes allocating the majority of our capital to higher-return areas focused on automation such as eCommerce, supply chain and store and club investments. The following table provides additional detail regarding our capital expenditures:\n(Amounts in millions)\nFiscal Years Ended January 31,\nAllocation of Capital Expenditures\n2026\n2025\nSupply chain, customer-facing initiatives, technology and other\n$\n16,468\n$\n14,603\nStore and club remodels\n5,571\n5,552\nNew stores and clubs, including expansions and relocations\n1,406\n450\nTotal U.S.\n$\n23,445\n$\n20,605\nWalmart International\n3,197\n3,178\nTotal Capital Expenditures\n$\n26,642\n$\n23,783\n36\nFree Cash Flow\nFree cash flow is considered a non-GAAP financial measure. Management believes, however, that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. See\nLiquidity and Capital Resources\n for discussions of GAAP metrics including net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities.\nWe define free cash flow as net cash provided by operating activities in a period minus payments for property and equipment made in that period. Walmart's definition of free cash flow is limited in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our\nConsolidated Statements of Cash Flows\n.\nAlthough other companies report their free cash flow, numerous methods may exist for calculating a company's free cash flow. As a result, the method used by management to calculate our free cash flow may differ from the methods used by other companies to calculate their free cash flow.\nThe following table sets forth a reconciliation of free cash flow, a non-GAAP financial measure, to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to free cash flow, as well as information regarding net cash used in investing activities and net cash used in financing activities.\n\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nNet cash provided by operating activities\n$\n41,565\n$\n36,443\n$\n35,726\nPayments for property and equipment\n(26,642)\n(23,783)\n(20,606)\nFree cash flow\n$\n14,923\n$\n12,660\n$\n15,120\nNet cash used in investing activities\n(1)\n$\n(26,350)\n$\n(21,379)\n$\n(21,287)\nNet cash used in financing activities\n(13,553)\n(14,822)\n(13,414)\n(1)\n\"Net cash used in investing activities\" includes payments for property and equipment, which is also included in our computation of free cash flow.\nThe increase in net cash provided by operating activities in fiscal 2026 is primarily due to an increase in cash provided by operating income, lower cash tax payments and the timing of certain payments. Free cash flow for fiscal 2026 increased when compared to fiscal 2025 due to an increase in cash provided by operating income, lower cash tax payments and timing of certain payments, partially offset by an increase of $2.9 billion in capital expenditures to support our omnichannel growth strategy. Net cash provided by operating activities for fiscal 2025 increased when compared to fiscal 2024 primarily due to an increase in cash provided by operating income and lapping the payment of accrued opioid legal charges in the prior year, partially offset by increased inventory purchases. Free cash flow for fiscal 2025 decreased when compared to fiscal 2024 due to an increase of $3.2 billion in capital expenditures to support our omnichannel growth strategy, partially offset by the increase in net cash provided by operating activities described above.\n37\nResults of Operations\nConsolidated Results of Operations\nFiscal Years Ended January 31,\n(Dollar amounts and retail square feet in millions)\n2026\n2025\n2024\nNet sales\n$\n706,413\n$\n674,538\n$\n642,637\nPercentage change from comparable period\n4.7\n%\n5.0\n%\n6.1\n%\nMembership and other income\n(1)\n6,750\n6,447\n5,488\nTotal revenues\n713,163\n680,985\n648,125\nPercentage change from comparable period\n4.7\n%\n5.1\n%\n6.0\n%\nGross profit\n(2)\n171,018\n162,785\n152,495\nOperating expenses\n(2)\n147,943\n139,884\n130,971\nOperating income\n29,825\n29,348\n27,012\nOther (gains) and losses\n(2,075)\n794\n3,027\nConsolidated net income\n$\n22,270\n$\n20,157\n$\n16,270\nPercentage of net sales\nGross profit\n24.2\n%\n24.1\n%\n23.7\n%\nOperating expenses\n20.9\n%\n20.7\n%\n20.4\n%\nOperating income\n4.2\n%\n4.4\n%\n4.2\n%\nRetail unit counts at period end\n10,955\n10,771\n10,616\nRetail square feet at period end\n1,057\n1,053\n1,053\n(1)\nMembership and other income includes membership fees and other items such as rental and tenant income, recycling income, gift card breakage income, as well as other income from corporate campus facilities.\n(2)\nGross profit is defined as net sales less cost of sales. Operating expenses refers to operating, selling, general and administrative expenses.\nOur total revenues increased $32.2 billion or 4.7% and $32.9 billion or 5.1% for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. These increases in revenues were primarily due to increases in net sales, which increased $31.9 billion or 4.7% and $31.9 billion or 5.0% for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increases were primarily due to strong positive comparable sales across our U.S. segments and international markets. In fiscal 2026, growth was primarily driven by increases in average ticket and transactions, and also reflected growth in unit volumes, while fiscal 2025 growth was primarily driven by higher transactions and unit volumes. Both years include strength in eCommerce as well as strong sales in grocery and health and wellness, with fiscal 2026 also benefiting from improved sales in general merchandise. Net sales were negatively impacted by $2.8 billion and $3.2 billion of fluctuations in currency exchange rates during fiscal 2026 and 2025, respectively.\nMembership and other income increased $0.3 billion and $1.0 billion for fiscal 2026 and 2025, respectively, primarily driven by growth in membership fee revenue globally, partially offset by decreases in certain other income items, including a reduction in recycling income in fiscal 2026.\nOur gross profit rate increased 8 and 40 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase in fiscal 2026 was primarily driven by the Walmart U.S. segment, due to disciplined inventory management, as well as growth in higher margin businesses globally. The increase in fiscal 2025 was primarily driven by the Walmart U.S. segment, due to managing prices aligned to our competitive historic price gaps, as well as growth in higher margin businesses globally. In both years, the increases were partially offset by mix shifts into lower margin merchandise categories across segments, as well as ongoing channel and format mix shifts in the Walmart International segment.\nOur operating expenses as a percentage of net sales increased 20 and 36 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase for fiscal 2026 was primarily due to higher self-insured general liability claims expense in the U.S. of approximately $0.9 billion, influenced by rising costs to resolve claims across retail and related industries, a charge of $0.7 billion related to modification of certain share-based compensation arrangements for our PhonePe subsidiary and increased depreciation related to our capital investments. The increase for fiscal 2025 was primarily due to higher variable pay as a result of exceeding planned performance, increased marketing and higher depreciation expenses.\nOther gains and losses consist of certain non-operating items, such as changes in the fair value of our investments, which by their nature can fluctuate from period to period. Other gains and losses resulted in a net gain of $2.1 billion and a net loss of $0.8 billion in fiscal 2026 and 2025, respectively, primarily driven by changes in the fair value of our equity and other investments due to fluctuations in their underlying stock prices.\n38\nOur effective income tax rate was 24.4%, 23.4%, and 25.5% for fiscal 2026, 2025 and 2024, respectively. The increase in effective income tax rate in fiscal 2026 compared to fiscal 2025 is primarily due to the share-based compensation charge recorded at the Company's PhonePe subsidiary, which provided no tax benefit. The decrease in effective tax rate in fiscal 2025 compared to fiscal 2024 is primarily due to the tax impact on changes in fair value of our investments. Our effective income tax rate may also fluctuate as a result of various factors, including changes in our assessment of unrecognized tax benefits, valuation allowances, business operations, acquisitions, investments, entry into new businesses and geographies, intercompany transactions, changes in tax law, changes in the administrative practices, principles, and interpretations related to tax, and the mix and size of earnings among our U.S. operations and international operations, which are subject to statutory rates that are generally higher than the U.S. statutory rate. The reconciliation from the U.S. statutory rate to the effective income tax rates for fiscal 2026, 2025 and 2024 is provided in\nNote 8\n.\nAs a result of the factors discussed above, we reported $22.3 billion and $20.2 billion of consolidated net income for fiscal 2026 and 2025, respectively, which represent increases of $2.1 billion and $3.9 billion for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. Diluted net income per common share attributable to Walmart (\"EPS\") was $2.73, $2.41 and $1.91 for fiscal 2026, 2025 and 2024, respectively.\nWalmart U.S. Segment\n\nFiscal Years Ended January 31,\n(Dollar amounts and retail square feet in millions)\n2026\n2025\n2024\nNet sales\n$\n482,975\n$\n462,415\n$\n441,817\nNet sales percentage change from comparable period\n4.4\n%\n4.7\n%\n5.1\n%\nCalendar comparable sales increase\n4.3\n%\n4.8\n%\n5.5\n%\nMembership and other income\n2,624\n2,594\n1,985\nGross profit\n132,615\n125,964\n118,254\nOperating expenses\n110,081\n104,676\n98,085\nOperating income\n$\n25,158\n$\n23,882\n$\n22,154\nPercentage of net sales\nGross profit\n27.5\n%\n27.2\n%\n26.8\n%\nOperating expenses\n22.8\n%\n22.6\n%\n22.2\n%\nOperating income\n5.2\n%\n5.2\n%\n5.0\n%\nRetail unit counts at period end\n4,611\n4,605\n4,615\nRetail square feet at period end\n699\n698\n699\nNet sales for the Walmart U.S. segment increased $20.6 billion or 4.4% and $20.6 billion or 4.7% for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increases in net sales were primarily due to increases in comparable sales of 4.3% and 4.8% for fiscal 2026 and 2025, respectively. Comparable sales in fiscal 2026 were driven by growth in average ticket and transactions, and also reflected growth in unit volumes and strength in all merchandise categories. Comparable sales in fiscal 2025 were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Walmart U.S. eCommerce sales positively contributed approximately 4.3% and 2.9% to comparable sales for fiscal 2026 and 2025, respectively. This growth reflects continued strength in customer and Walmart+ member engagement with omnichannel offerings, and was primarily driven by store-fulfilled pickup and delivery.\nMembership and other income increased slightly for fiscal 2026 and increased $0.6 billion for fiscal 2025. In both years, the increases were primarily driven by double-digit growth in membership fee revenue from Walmart+. For fiscal 2026, the increase was partially offset by decreases in certain other income items, including a reduction in recycling income. Fiscal 2025 also benefited from higher recycling income compared to the previous fiscal year.\nGross profit rate increased 22 and 47 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase for fiscal 2026 was primarily driven by disciplined inventory management and growth in higher margin businesses, partially offset by mix shifts into lower margin merchandise categories. The increase for fiscal 2025 was primarily due to managing prices aligned to our competitive historic price gaps and growth in higher margin businesses, partially offset by product mix shifts into lower margin categories.\nOperating expenses as a percentage of segment net sales increased 15 and 44 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase for fiscal 2026 was primarily due to higher self-insured general liability claims expense and increased depreciation related to our capital investments. For fiscal 2025, the increase was primarily due to increased marketing expenses, higher variable pay as a result of exceeding planned performance and increased depreciation expenses.\nAs a result of the factors discussed above, segment operating income increased $1.3 billion and $1.7 billion for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year.\n39\nWalmart International Segment\n\nFiscal Years Ended January 31,\n(Dollar amounts and retail square feet in millions)\n2026\n2025\n2024\nNet sales\n$\n130,423\n$\n121,885\n$\n114,641\nPercentage change from comparable period\n7.0\n%\n6.3\n%\n13.5\n%\nMembership and other income\n1,565\n1,478\n1,408\nGross profit\n27,847\n26,618\n24,810\nOperating expenses\n24,309\n22,595\n21,309\nOperating income\n$\n5,103\n$\n5,501\n$\n4,909\nPercentage of net sales\nGross profit\n21.4\n%\n21.8\n%\n21.6\n%\nOperating expenses\n18.6\n%\n18.5\n%\n18.6\n%\nOperating income\n3.9\n%\n4.5\n%\n4.3\n%\nRetail unit counts at period end\n5,743\n5,566\n5,402\nRetail square feet at period end\n278\n274\n274\nNet sales for the Walmart International segment increased $8.5 billion or 7.0% and $7.2 billion or 6.3% for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. Net sales growth was primarily due to positive comparable sales growth across our international markets, which includes strong eCommerce growth of $6.3 billion and $4.7 billion for fiscal 2026 and 2025, respectively. The increases were partially offset by negative fluctuations in currency exchange rates of $2.8 billion and $3.2 billion for fiscal 2026 and 2025, respectively.\nGross profit rate decreased 49 basis points for fiscal 2026 and increased 20 basis points for fiscal 2025, when compared to the previous fiscal year. For fiscal 2026, the decrease was primarily due to ongoing channel and format mix shifts, as well as strategic growth investments in price and delivery capabilities, partially offset by growth in higher margin businesses. The increase in fiscal 2025 was primarily due to improved eCommerce margin and business mix changes, partially offset by ongoing channel and format mix changes.\nOperating expenses as a percentage of segment net sales increased 10 basis points for fiscal 2026 and decreased 5 basis points for fiscal 2025, when compared to the previous fiscal year. The increase for fiscal 2026 was primarily due to a charge of $0.7 billion related to PhonePe's modification of certain share-based payment arrangements in contemplation of a potential public offering (refer to\nNote 3\n), partially offset by strong sales as well as format mix shifts. The decrease for fiscal 2025 was primarily due to increased sales driving expense leverage, partially offset by planned investments in associate wages and strategic priorities in Mexico and Central America.\nAs a result of the factors discussed above, segment operating income decreased $0.4 billion and increased $0.6 billion for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year.\n40\nSam's Club U.S. Segment\n\nFiscal Years Ended January 31,\n(Dollar amounts and retail square feet in millions)\n2026\n2025\n2024\nIncluding Fuel\nNet sales\n$\n93,015\n$\n90,238\n$\n86,179\nPercentage change from comparable period\n3.1\n%\n4.7\n%\n2.2\n%\nCalendar comparable sales increase\n2.9\n%\n4.7\n%\n2.3\n%\nMembership and other income\n2,525\n2,323\n2,051\nGross profit\n10,556\n10,203\n9,431\nOperating expenses\n10,639\n10,122\n9,290\nOperating income\n$\n2,442\n$\n2,404\n$\n2,192\nPercentage of net sales\nGross profit\n11.3\n%\n11.3\n%\n10.9\n%\nOperating expenses\n11.4\n%\n11.2\n%\n10.8\n%\nOperating income\n2.6\n%\n2.7\n%\n2.5\n%\nRetail unit counts at period end\n601\n600\n599\nRetail square feet at period end\n81\n80\n80\nExcluding Fuel\n(1)\nNet sales\n$\n83,744\n$\n79,777\n$\n75,057\nPercentage change from comparable period\n5.0\n%\n6.3\n%\n4.7\n%\nOperating income\n$\n1,822\n$\n1,785\n$\n1,659\nOperating income as a percentage of net sales\n2.2\n%\n2.2\n%\n2.2\n%\n(1)\nWe believe the \"Excluding Fuel\" information is useful to investors because it permits investors to understand the effect of the Sam's Club U.S. segment's fuel sales on its results of operations, which are impacted by the volatility of fuel prices. Volatility in fuel prices may continue to impact the operating results of the Sam's Club U.S. segment in the future.\nNet sales for the Sam's Club U.S. segment increased $2.8 billion or 3.1% and $4.1 billion or 4.7% for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increases in net sales were primarily due to increases in comparable sales, including fuel, of 2.9% and 4.7% for fiscal 2026 and 2025, respectively. Comparable sales in fiscal 2026 were driven by growth in unit volumes and transactions, reflecting strong sales in grocery, health and wellness and general merchandise. Comparable sales in fiscal 2025 were driven by growth in transactions and unit volumes, with strong sales in grocery and health and wellness. Additionally, fiscal 2026 and 2025 growth was partially offset by lower fuel sales, negatively impacting comparable sales by 1.9% and 1.5%, respectively, primarily due to lower fuel prices. Sam's Club U.S. eCommerce sales positively contributed approximately\n\n3.3%\n and\n2.3% to comparable sales for fiscal 2026 and 2025, respectively, which reflects continued strength in member engagement with omnichannel offerings.\nMembership and other income increased 8.7% and 13.3% for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. For fiscal 2026 and 2025, the increases were primarily due to growth in the membership base and Plus penetration. Fiscal 2026 was also positively impacted by additional breakage income related to unredeemed Sam's Cash rewards, while fiscal 2025 was positively impacted by the expiration of a promotional offering offsetting membership fee increases during the fourth quarter of fiscal 2024.\nGross profit rate increased 4 and 37 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase for fiscal 2026 was primarily due to operational efficiencies and higher margins in fuel, partially offset by higher eCommerce fulfillment costs and the impact of reorganization charges related to strategic supply chain decisions. The increase for fiscal\n2025\n was primarily due to improved operational efficiencies related to merchandise flow and increased margins in fuel, partially offset by higher eCommerce fulfillment costs and product mix shifts into lower margin categories.\nOperating expenses as a percentage of segment net sales increased 22 and 44 basis points for fiscal 2026 and 2025, respectively, when compared to the previous fiscal year. The increase for fiscal 2026 was primarily due to lower fuel sales and higher self-insured general liability claims expense. The increase for fiscal 2025 was primarily due to increased compensation related expenses, including associate wage investments and higher variable pay as a result of exceeding our planned performance, as well as elevated technology spend.\nAs a result of the factors discussed above, segment operating income increased slightly for fiscal 2026 and increased $0.2 billion for fiscal 2025, when compared to the previous fiscal year.\n41\nLiquidity and Capital Resources\nLiquidity\nThe strength and stability of our operations have historically supplied us with a significant source of liquidity. Our cash flows provided by operating activities, supplemented with our long-term debt and short-term borrowings, have been sufficient to fund our operations while allowing us to invest in activities that support the long-term growth of our operations. Generally, some or all of the remaining available cash flow has been used to fund dividends on our common stock and share repurchases. We believe our sources of liquidity will continue to be sufficient to fund operations, finance our investment activities, pay dividends and fund our share repurchases for at least the next 12 months and for the foreseeable future.\nNet Cash Provided by Operating Activities\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nNet cash provided by operating activities\n$\n41,565\n$\n36,443\n$\n35,726\nNet cash provided by operating activities increased $5.1 billion for fiscal 2026 when compared to the previous fiscal year. The increase is primarily due to an increase in cash provided by operating income, lower cash tax payments and timing of certain payments. The increase in net cash provided by operating activities for fiscal 2025, when compared to the previous fiscal year, was primarily due to an increase in cash provided by operating income and lapping the payment of accrued opioid legal charges in the prior year, partially offset by increased inventory purchases.\nCash Equivalents and Working Capital Deficit\nCash and cash equivalents were $10.7 billion and $9.0 billion as of January\u00a031, 2026 and 2025, respectively. Our working capital deficit, defined as total current assets less total current liabilities, was $22.6 billion and $17.1 billion as of January\u00a031, 2026 and 2025, respectively. The increase in our working capital deficit was primarily driven by timing of certain payments combined with an increase in short-term borrowings for general corporate purposes, partially offset by increased inventories and receivables related to higher sales growth as well as higher cash balances. We generally operate with a working capital deficit due to our efficient use of cash in funding operations, consistent access to the capital markets and returns provided to our shareholders in the form of payments of cash dividends and share repurchases.\nWe use intercompany financing arrangements in an effort to ensure cash can be made available in the country in which it is needed with the minimum cost possible. Additionally, from time-to-time, we repatriate earnings and related cash from jurisdictions outside of the U.S.\u00a0Under current law, repatriations of foreign earnings will generally be free of U.S. federal tax, but may incur other taxes such as withholding or state taxes. We do not expect current local laws, or other existing limitations on anticipated future repatriations of cash amounts held outside the U.S. to have a material effect on our overall liquidity, financial position or results of operations.\nAs of January\u00a031, 2026 and 2025, cash and cash equivalents of $3.9 billion and $3.3 billion, respectively, may not be freely transferable to the U.S. due to local laws or other restrictions or are subject to the approval of the noncontrolling interest shareholders.\nNet Cash Used in Investing Activities\n\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nNet cash used in investing activities\n$\n(26,350)\n$\n(21,379)\n$\n(21,287)\nNet cash used in investing activities generally consisted of capital expenditures. Net cash used in investing activities increased $5.0 billion for fiscal 2026 when compared to the previous fiscal year. The increase is primarily due to the change in net proceeds received from the sale of certain strategic investments as well as increased payments for property and equipment, partially offset by the acquisition of VIZIO for net consideration of $1.9 billion in the prior year. Net cash used in investing activities increased $0.1 billion for fiscal 2025, when compared to the previous fiscal year, primarily due to increased payments for property and equipment as well as the acquisition of VIZIO for net consideration of $1.9 billion, partially offset by net proceeds received from sales of certain strategic investments, including $3.6 billion related to the sale of our JD.com investment.\nCapital expenditures\nRefer to the \"\nCapital Allocation\n\" section in our\nCompany Performance Metrics\n for capital expenditure detail for fiscal 2026 and 2025. For the fiscal year ending January 31, 2027 (\"fiscal 2027\"), we project capital expenditures will be approximately $25 billion to $27 billion, with a focus on technology, supply chain and customer-facing initiatives.\n42\nNet Cash Used in Financing Activities\n\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nNet cash used in financing activities\n$\n(13,553)\n$\n(14,822)\n$\n(13,414)\nNet cash used in financing activities generally consisted of debt transactions, dividends paid, repurchases of Company stock and transactions with noncontrolling interest shareholders. Fiscal 2026 net cash used in financing activities decreased $1.3 billion when compared to the previous fiscal year. The decrease is primarily due to proceeds from new long-term debt issued, higher short-term borrowings in the current fiscal year and lower debt repayments, partially offset by increased share repurchases and higher dividends paid. Fiscal 2025 net cash used in financing activities increased $1.4 billion when compared to the previous fiscal year. The increase was primarily due to lapping debt issuances in the prior fiscal year and increased share repurchases, partially offset by the purchase of certain noncontrolling interests in the prior fiscal year and higher short-term borrowings.\nPurchase and Sale of Subsidiary Stoc\nk\nDuring fiscal 2024, we paid $3.5 billion to acquire shares from certain Flipkart noncontrolling interest holders and settle a $0.9 billion liability to former noncontrolling interest holders of PhonePe in connection with the separation from Flipkart in fiscal 2023. Additionally, we received $0.7 billion related to new rounds of equity funding for the Company's majority owned PhonePe subsidiary.\nShort-term Borrowings\nWe generally utilize the liquidity provided by short-term borrowings to provide funding for our operations, dividend payments, share repurchases, capital expenditures and other cash requirements. The following table includes additional information related to our short-term borrowings for fiscal 2026, 2025 and 2024:\n\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nMaximum amount outstanding at any month-end\n$\n10,241\n$\n7,232\n$\n9,942\nAverage daily short-term borrowings\n7,031\n4,157\n4,295\nAnnual weighted-average interest rate\n4.5\n%\n5.1\n%\n5.1\n%\nShort-term borrowings as of January\u00a031, 2026 and 2025 were $6.6 billion and $3.1 billion, respectively, with weighted-average interest rates of 4.0% and 5.3%, respectively. We also have $15.0 billion of various undrawn committed lines of credit in the U.S. as of January\u00a031, 2026 that provide additional liquidity, if needed. Additionally, we maintain access to various credit facilities outside of the U.S. to further support our Walmart International segment operations, as needed.\nAs of January\u00a031, 2026, we have $2.0 billion of syndicated and fronted letters of credit available, of which $1.7 billion was issued and represents an unrecorded current obligation.\nLong-term Debt\nThe following table provides the changes in our long-term debt for fiscal 2026:\n(Amounts in millions)\nLong-term debt due within one year\nLong-term debt\nTotal\nBalances as of February 1, 2025\n$\n2,598\n$\n33,401\n$\n35,999\nProceeds from issuance of long-term debt\n\u2014\n3,983\n3,983\nRepayments of long-term debt\n(2,625)\n\u2014\n(2,625)\nReclassifications of long-term debt\n3,569\n(3,569)\n\u2014\nCurrency and other adjustments\n\u2014\n809\n809\nBalances as of January 31, 2026\n$\n3,542\n$\n34,624\n$\n38,166\nOur total outstanding long-term debt increased $2.2\u00a0billion during fiscal 2026, primarily due to issuances of long-term debt. Refer to\nNote 5\n to our Consolidated Financial Statements for details on the issuances of long-term debt.\nEstimated contractual interest payments associated with our long-term debt amount to $17.3 billion, with approximately $1.7 billion expected to be paid in fiscal 2027. Estimated interest payments are based on our principal amounts and expected maturities of all debt outstanding as of January\u00a031, 2026, and assumes interest rates remain at current levels for our variable rate instruments.\n43\nDividends\nOur total dividend payments were $7.5 billion, $6.7 billion and $6.1 billion for fiscal 2026, 2025 and 2024, respectively. Effective February\u00a019, 2026, the Company approved the fiscal 2027 annual dividend of $0.99 per share, an increase over the fiscal 2026 annual dividend of $0.94 per share. For fiscal 2027, the annual dividend will be paid in four quarterly installments of $0.2475 per share, according to the following record and payable dates:\nRecord Date\nPayable Date\nMarch 20, 2026\nApril 6, 2026\nMay 8, 2026\nMay 26, 2026\nAugust 21, 2026\nSeptember 8, 2026\nDecember 11, 2026\nJanuary 4, 2027\nCompany Share Repurchase Program\nFrom time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors. Any repurchased shares are constructively retired and returned to an unissued status. All repurchases during fiscal 2026 were made under the $20.0 billion share repurchase program approved in November 2022, of which authorization for $4.0 billion of share repurchases remained as of January\u00a031, 2026. In February 2026, the Board of Directors approved a new $30.0 billion share repurchase authorization, which has no expiration date or other restrictions limiting the period over which the Company can make repurchases, and beginning February 23, 2026, replaced the remaining capacity under the prior authorization.\nWe regularly review share repurchase activity and consider several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings, our results of operations and the market price of our common stock. We anticipate that a majority of the ongoing share repurchase program will be funded through the Company's free cash flow.\nThe following table provides, on a settlement date basis, the number of shares repurchased, average price paid per share and total amount paid for share repurchases for fiscal 2026, 2025 and 2024:\nFiscal Years Ended January 31,\n(Amounts in millions, except per share data)\n2026\n2025\n2024\nTotal number of shares repurchased\n85.0\n61.9\n54.6\nAverage price paid per share\n$\n95.13\n$\n72.72\n$\n50.87\nTotal amount paid for share repurchases\n$\n8,088\n$\n4,494\n$\n2,779\nDuring fiscal 2026, the Company repurchased $8.1\u00a0billion in shares of its common stock, an increase of $3.6\u00a0billion as compared to the same period in the previous fiscal year. The increase was primarily driven by opportunistic prices during the first quarter of fiscal 2026 as part of the Company's long-term strategy.\nMaterial Cash Requirements\nMaterial cash requirements from operating activities primarily consist of inventory purchases, employee related costs, taxes, interest and other general operating expenses, which we expect to be primarily satisfied by our cash from operations. Other material cash requirements from known contractual and other obligations include short-term borrowings, long-term debt and related interest payments, leases and purchase obligations. See\nNote 4\n,\nNote 5\n and\nNote 6\n to our Consolidated Financial Statements for information regarding accrued liabilities, outstanding short-term borrowings and long-term debt, and leases, respectively.\nAs of January\u00a031, 2026, the Company has $41.4 billion of unrecorded purchase obligations outstanding, of which $18.3 billion is due within one year. Purchase obligations include legally binding contracts, such as firm commitments for inventory and utility purchases, as well as commitments to make capital expenditures, software acquisition and license commitments and legally binding service contracts. Contractual obligations for the purchase of goods or services are defined as agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Contracts that specify the Company will purchase all or a portion of its requirements of a specific product or service from a supplier, but do not include a fixed or minimum quantity, are excluded from the obligations quantified above. Accordingly, purchase orders for inventory are also excluded as purchase orders represent authorizations to purchase rather than binding agreements. Our purchase orders are based on our current inventory needs and are fulfilled by our suppliers within short time periods. We also enter into contracts for outsourced services; however, the obligations under these contracts are not significant and the contracts generally contain clauses allowing for cancellation without significant penalty. Timing of payments and actual amounts paid may be different depending on the timing of receipt of goods or services or changes to agreed-upon amounts for some obligations.\n44\nCapital Resources\nWe believe our cash flows from operations, current cash position, short-term borrowings and access to capital markets will continue to be sufficient to meet our anticipated cash requirements and contractual obligations, which includes funding seasonal buildups in merchandise inventories and funding our capital expenditures, acquisitions, dividend payments and share repurchases.\nWe have strong commercial paper and long-term debt ratings that have enabled and should continue to enable us to refinance our debt as it becomes due at favorable rates in capital markets. As of January\u00a031, 2026, the ratings assigned to our commercial paper and rated series of our outstanding long-term debt were as follows:\nRating agency\n\nCommercial\u00a0paper\n\nLong-term\u00a0debt\nStandard & Poor's\n\nA-1+\n\nAA\nMoody's Investors Service\n\nP-1\n\nAa2\nFitch Ratings\n\nF1+\n\nAA\nCredit rating agencies review their ratings periodically, and therefore, the credit ratings assigned to us by each agency may be subject to revision at any time. Accordingly, we are not able to predict whether our current credit ratings will remain consistent over time. Factors that could affect our credit ratings include changes in our operating performance, the general economic environment, conditions in the retail industry, our financial position, including our total debt and capitalization, and changes in our business strategy. Any downgrade of our credit ratings by a credit rating agency could increase our future borrowing costs or impair our ability to access capital and credit markets on terms commercially acceptable to us. In addition, any downgrade of our current short-term credit ratings could impair our ability to access the commercial paper markets with the same flexibility that we have experienced historically, potentially requiring us to rely more heavily on more expensive types of debt financing. The credit rating agency ratings are not recommendations to buy, sell or hold our commercial paper or debt securities. Each rating may be subject to revision or withdrawal at any time by the assigning rating organization and should be evaluated independently of any other rating. Moreover, each credit rating is specific to the security to which it applies.\nOther Matters\nIn\nNote 9\n to our Consolidated Financial Statements, which is captioned \"Contingencies\" and appears in\nPart II\n of this Annual Report on Form 10-K under the caption \"\nItem 8. Financial Statements and Supplementary Data\n,\" we discuss, under the sub-captions \"\nSettlement of Certain Opioid-Related Matters,\n\"\nand\n\"\nOngoing Opioid-Related Litigation,\n\" certain opioid-related matters, as well as the Prescription Opiate Litigation, and other matters, including certain risks arising therefrom. In that\nNote 9\n, we discuss \"\nAsda Equal Value Claims\n\"\n\nthe Company's indemnification obligation for the Asda Equal Value Claims matter, \"\nMoney Transfer Agent Services Matter,\"\n a government investigation by the U.S. Attorney's Office for the Middle District of Pennsylvania into the Company's consumer fraud prevention and anti-money laundering compliance related to the Company's money transfer agent services, as well as matters related to independent contractor drivers on the driver platform under \"\nDriver Platform Matters.\n\" In\nNote 9\n, under \"\nMexico Antitrust Matter\n,\" we also discuss a quasi-judicial administrative process initiated by COFECE against Walmex and Walmex's related constitutional challenge. In\nNote 9\n, we also discuss a show cause notice and requests issued by the Directorate of Enforcement to Flipkart regarding Foreign Direct Investment rules and regulations in India and an India Antitrust Matter. We reference various legal proceedings related to the Prescription Opiate Litigation, the DOJ Opioid Civil Litigation, Opioids-Related Securities Class Actions and False Claims Act Litigation; Asda Equal Value Claims; Money Transfer Agent Services Matter; Federal Trade Commission and State Attorneys General Driver Platform Litigation; Mexico Antitrust Matter and an India Antitrust Matter in\nPart I\n of this Annual Report on Form 10-K under the caption \"\nItem 3. Legal Proceedings\n,\" under the sub-caption \"\nI. Supplemental Information\n.\" We also discuss an environmental matter with the U.S. Environmental Protection Agency in Part I of this Annual Report on Form 10-K under the caption \"\nItem 3. Legal Proce\nedings\n,\" under the sub caption \"\nII\n.\n E\nnvi\nron\nmental Matters\n.\" The foregoing matters and other matters described elsewhere in this Annual Report on Form 10-K represent contingent liabilities of the Company that may or may not result in the incurrence of a material liability by the Company upon their final resolution.\n45\nSummary of Critical Accounting Estimates\nManagement strives to report our financial results in a clear and understandable manner, although in some cases accounting and disclosure rules are complex and require us to use technical terminology. In preparing the Company's Consolidated Financial Statements, we follow accounting principles generally accepted in the U.S. These principles require us to make certain estimates and apply judgments that affect our financial position and results of operations as reflected in our financial statements. These judgments and estimates are based on past events and expectations of future outcomes. Actual results may differ from our estimates.\nManagement continually reviews our accounting policies including how they are applied and how they are reported and disclosed in our financial statements. Following is a summary of our critical accounting estimates and how they are applied in the preparation of the financial statements.\nContingencies\nWe are involved in a number of legal proceedings and certain regulatory matters. We record a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. We also perform an assessment of the materiality of loss contingencies where a loss is either reasonably possible or it is reasonably possible that a loss could be incurred in excess of amounts accrued. If a loss or an additional loss has at least a reasonable possibility of occurring and the impact on the financial statements would be material, we provide disclosure of the loss contingency in the footnotes to our financial statements. We review all contingencies at least quarterly to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or the range of the loss can be made. Although we are not able to predict the outcome or reasonably estimate a range of possible losses in certain matters described in\nNote\n9\n to our Consolidated Financial Statements and have not recorded an associated accrual related to these matters, an adverse judgment or negotiated resolution in any of these matters could have a material adverse effect on our business, reputation, financial position, results of operations or cash flows.\nUncertain Tax Positions\nWe are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our tax returns are routinely audited and settlements of issues raised in these audits sometimes affect our tax provisions. The benefits of uncertain tax positions are recorded in our financial statements only after determining a more likely than not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, we reassess these probabilities and record any changes in the financial statements as appropriate. We account for uncertain tax positions by determining the minimum recognition threshold that a tax position is required to meet before being recognized in the financial statements. Accordingly, the determination of our uncertain tax positions requires judgment, the use of estimates in certain cases and the interpretation and application of complex tax laws.\nITEM\u00a07A.\nQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK\nMarket Risk\nIn addition to the risks inherent in our operations, we are exposed to certain market risks, including changes in interest rates, currency exchange rates and the fair values of certain equity and equity method investments measured on a recurring basis.\nThe analysis presented below for each of our market risk sensitive instruments is based on a hypothetical scenario used to calibrate potential risk and does not represent our view of future market changes. The effect of a change in a particular assumption is calculated without adjusting any other assumption. In reality, however, a change in one factor could cause a change in another, which may magnify or negate other sensitivities.\nInterest Rate Risk\nWe are exposed to changes in interest rates as a result of our short-term borrowings and long-term debt. We hedge a portion of our interest rate risk by managing the mix of fixed and variable rate debt and by entering into interest rate swaps. For fiscal 2026, the net fair value of our interest rate swaps increased\u00a0$0.2 billion primarily due to fluctuations in market interest rates.\n46\nThe table below provides information about our financial instruments that are sensitive to changes in interest rates. For long-term debt, the table represents the principal cash flows and related weighted-average interest rates by expected maturity dates. For interest rate swaps, the table represents the contractual cash flows and weighted-average interest rates by the contractual maturity date, unless otherwise noted. The notional amounts are used to calculate contractual cash flows to be exchanged under the contracts. The weighted-average variable rates are based upon prevailing market rates as of January\u00a031, 2026.\nExpected Maturity Date\n(Amounts in millions)\nFiscal 2027\nFiscal 2028\nFiscal 2029\nFiscal 2030\nFiscal 2031\nThereafter\nTotal\nLiabilities\nShort-term borrowings:\nVariable rate\n$\n6,596\n$\n\u2014\n$\n\u2014\n$\n\u2014\n$\n\u2014\n$\n\u2014\n$\n6,596\nWeighted-average interest rate\n4.0\n%\n\u2014\n%\n\u2014\n%\n\u2014\n%\n\u2014\n%\n\u2014\n%\n4.0\n%\nLong-term debt\n(1)\n:\nFixed rate\n$\n3,542\n$\n2,487\n$\n3,389\n$\n2,143\n$\n2,600\n$\n23,255\n$\n37,416\nWeighted-average interest rate\n2.5\n%\n3.8\n%\n3.0\n%\n4.2\n%\n5.3\n%\n4.4\n%\n4.1\n%\nVariable rate\n$\n\u2014\n$\n750\n$\n\u2014\n$\n\u2014\n$\n\u2014\n$\n\u2014\n$\n750\nWeighted-average interest rate\n\u2014\n%\n4.1\n%\n\u2014\n%\n\u2014\n%\n\u2014\n%\n\u2014\n%\n4.1\n%\nInterest rate derivatives\nInterest rate swaps:\nFixed to variable\n$\n\u2014\n$\n\u2014\n$\n1,250\n$\n1,052\n$\n469\n$\n2,000\n$\n4,771\nWeighted-average pay rate\n\u2014\n%\n\u2014\n%\n4.0\n%\n5.4\n%\n9.8\n%\n4.1\n%\n4.9\n%\nWeighted-average receive rate\n\u2014\n%\n\u2014\n%\n1.5\n%\n3.0\n%\n7.6\n%\n1.8\n%\n2.5\n%\n(1)\nIncludes deferred loan costs, discounts, fair value hedges, foreign-held debt and secured debt.\nAs of January\u00a031, 2026, our variable rate borrowings, including the effect of our commercial paper and interest rate swaps, represented 27% of our total short-term and long-term debt. Based on January\u00a031, 2026 debt levels, a 100 basis point change in prevailing market rates would cause our annual interest costs to change by approximately $0.1 billion.\nForeign Currency Risk\nWe are exposed to fluctuations in currency exchange rates as a result of our investments and operations in countries other than the U.S., as well as our foreign-currency-denominated long-term debt. For fiscal 2026, movements in currency exchange rates and the related impact on the translation of the balance sheets resulted in the\u00a0$0.8 billion net gain in the currency translation and other category of accumulated other comprehensive loss.\nWe hedge a portion of our foreign currency risk by entering into currency swaps. The aggregate fair value of these swaps was in a liability position of $0.9 billion and $1.4 billion as of January\u00a031, 2026 and January\u00a031, 2025, respectively. The change in the fair value of these swaps was due to fluctuations in currency exchange rates, primarily due to the strengthening of certain currencies relative to the U.S. dollar in fiscal 2026. The hypothetical result of a uniform 10% weakening in the value of the U.S. dollar relative to other currencies underlying these swaps would have resulted in a change in the value of the swaps of $0.7 billion. A hypothetical 10% change in interest rates underlying these swaps from the market rates in effect as of January\u00a031, 2026 would have resulted in a change in the value of the swaps of $0.1 billion.\nIn certain countries, we also enter into immaterial foreign currency forward contracts to hedge the purchase and payment of purchase commitments denominated in non-functional currencies.\nInvestment Risk\nWe are exposed to investment risk primarily related to changes in the fair value of certain equity investments, including certain immaterial equity method investments where we have elected the fair value option, measured on a recurring basis. As of January\u00a031, 2026, the fair value of these investments was $4.5 billion. Refer to\nNote 7\n for details. As of January\u00a031, 2026, a hypothetical 10% change in the stock price of such investments would have changed the fair value of such investments by approximately $0.4 billion.\n47\nITEM\u00a08.\nFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\nConsolidated Financial Statements of Walmart Inc.\nFor the Fiscal Year Ended January\u00a031, 2026\nTable of Contents\nPage\nReports of Independent Registered Public Accounting Firm\n (PCAOB ID:\n42\n)\n49\nConsolidated Statements of Income\n52\nConsolidated Statements of Comprehensive Income\n53\nConsolidated Balance Sheets\n54\nConsolidated Statements of Shareholders' Equity\n55\nConsolidated Statements of Cash Flows\n56\nNotes to Consolidated Financial Statements\n57\n48\nReport of Independent Registered Public Accounting Firm\nTo the Shareholders and the Board of Directors of Walmart Inc.\nOpinion on the Financial Statements\nWe have audited the accompanying consolidated balance sheets of Walmart Inc. (the Company) as of January\u00a031, 2026 and 2025, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended January\u00a031, 2026, 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 January\u00a031, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended January\u00a031, 2026, in conformity with U.S. generally accepted accounting principles.\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January\u00a031, 2026, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March\u00a013, 2026 expressed an unqualified opinion thereon.\nBasis for Opinion\nThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\nCritical Audit Matter\nThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the Consolidated Financial Statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.\nContingencies\nDescription of the Matter\nAs described in Note 9 to the Consolidated Financial Statements, at January\u00a031, 2026, the Company is involved in a number of legal proceedings and certain regulatory matters. The Company records a liability for those legal proceedings and regulatory matters when management determines it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred. In assessing the probability of occurrence and whether an estimate of loss can be reasonably estimated for a particular legal proceeding, management exercises judgment on matters relevant to each proceeding. Auditing management's accounting for, and disclosure of, loss contingencies was complex and highly judgmental as it involved our assessment of the significant judgments made by management when assessing the probability of loss for contingencies or when determining whether an estimate of the loss or range of loss could be made.\n49\nHow We Addressed the Matter in Our Audit\nWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the identification and evaluation of contingencies. For example, we tested controls over the Company's assessment of the likelihood of loss and the Company's determinations regarding the measurement of loss.\nTo test the Company's assessment of the probability of loss or determination of an estimate of loss, or range of loss, among other procedures, we read the minutes of the meetings of the board of directors and committees of the board of directors, reviewed documents provided to the Company by certain outside legal counsel, read letters received directly by us from internal and outside legal counsel, evaluated the current status of contingencies based on discussions with internal legal counsel, and obtained representations from management. We also assessed the adequacy of the related disclosures.\n/s/\nErnst & Young LLP\n\nWe have served as the Company's auditor since 1969.\nRogers, Arkansas\nMarch\u00a013, 2026\n50\nReport of Independent Registered Public Accounting Firm\nTo the Shareholders and the Board of Directors of Walmart Inc.\nOpinion on Internal Control Over Financial Reporting\nWe have audited Walmart Inc.'s internal control over financial reporting as of January\u00a031, 2026, based on criteria established in Internal Control\u2014Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Walmart Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of January\u00a031, 2026, based on the COSO criteria.\nWe 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 January\u00a031, 2026 and 2025, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended January\u00a031, 2026, and the related notes and our report dated March\u00a013, 2026 expressed an unqualified opinion thereon.\nBasis for Opinion\nThe Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.\nOur audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\nDefinition and Limitations of Internal Control Over Financial Reporting\nA company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n/s/ Ernst & Young LLP\n\nRogers, Arkansas\nMarch\u00a013, 2026\n51\nWalmart Inc.\nConsolidated Statements of Income\nFiscal Years Ended January 31,\n(Amounts in millions, except per share data)\n2026\n2025\n2024\nRevenues:\nNet sales\n$\n706,413\n\n$\n674,538\n\n$\n642,637\n\nMembership and other income\n6,750\n\n6,447\n\n5,488\n\nTotal revenues\n713,163\n\n680,985\n\n648,125\n\nCosts and expenses:\nCost of sales\n535,395\n\n511,753\n\n490,142\n\nOperating, selling, general and administrative expenses\n147,943\n\n139,884\n\n130,971\n\nOperating income\n29,825\n\n29,348\n\n27,012\n\nInterest:\nDebt\n2,318\n\n2,249\n\n2,259\n\nFinance lease\n481\n\n479\n\n424\n\nInterest income\n(\n368\n)\n(\n483\n)\n(\n546\n)\nInterest, net\n2,431\n\n2,245\n\n2,137\n\nOther (gains) and losses\n(\n2,075\n)\n794\n\n3,027\n\nIncome before income taxes\n29,469\n\n26,309\n\n21,848\n\nProvision for income taxes\n7,199\n\n6,152\n\n5,578\n\nConsolidated net income\n22,270\n\n20,157\n\n16,270\n\nConsolidated net income attributable to noncontrolling interest\n(\n377\n)\n(\n721\n)\n(\n759\n)\nConsolidated net income attributable to Walmart\n$\n21,893\n\n$\n19,436\n\n$\n15,511\n\nNet income per common share:\nBasic net income per common share attributable to Walmart\n$\n2.74\n\n$\n2.42\n\n$\n1.92\n\nDiluted net income per common share attributable to Walmart\n2.73\n\n2.41\n\n1.91\n\nWeighted-average common shares outstanding:\nBasic\n7,983\n\n8,041\n\n8,077\n\nDiluted\n8,022\n\n8,081\n\n8,108\n\nDividends declared per common share\n$\n0.94\n\n$\n0.83\n\n$\n0.76\n\nSee accompanying notes.\n52\nWalmart Inc.\nConsolidated Statements of Comprehensive Income\n\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nConsolidated net income\n$\n22,270\n\n$\n20,157\n\n$\n16,270\n\nConsolidated net income attributable to noncontrolling interest\n(\n377\n)\n(\n721\n)\n(\n759\n)\nConsolidated net income attributable to Walmart\n21,893\n\n19,436\n\n15,511\n\nOther comprehensive income (loss), net of income taxes\n1,009\n\n(\n2,859\n)\n944\n\nOther comprehensive (income) loss attributable to noncontrolling interest\n(\n174\n)\n556\n\n(\n566\n)\nOther comprehensive income (loss) attributable to Walmart\n835\n\n(\n2,303\n)\n378\n\nComprehensive income, net of income taxes\n23,279\n\n17,298\n\n17,214\n\nComprehensive income attributable to noncontrolling interest\n(\n551\n)\n(\n165\n)\n(\n1,325\n)\nComprehensive income attributable to Walmart\n$\n22,728\n\n$\n17,133\n\n$\n15,889\n\n See accompanying notes.\n53\nWalmart Inc.\nConsolidated Balance Sheets\nAs of January 31,\n(Amounts in millions)\n2026\n2025\nASSETS\nCurrent assets:\nCash and cash equivalents\n$\n10,727\n\n$\n9,037\n\nReceivables, net\n11,172\n\n9,975\n\nInventories\n58,851\n\n56,435\n\nPrepaid expenses and other\n4,124\n\n4,011\n\nTotal current assets\n84,874\n\n79,458\n\nProperty and equipment, net\n136,083\n\n119,993\n\nOperating lease right-of-use assets\n14,750\n\n13,599\n\nFinance lease right-of-use assets, net\n6,123\n\n6,112\n\nGoodwill\n28,735\n\n28,792\n\nOther long-term assets\n14,103\n\n12,869\n\nTotal assets\n$\n284,668\n\n$\n260,823\n\nLIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND SHAREHOLDERS' EQUITY\nCurrent liabilities:\nShort-term borrowings\n$\n6,596\n\n$\n3,068\n\nAccounts payable\n63,061\n\n58,666\n\nAccrued liabilities\n31,187\n\n29,345\n\nAccrued income taxes\n596\n\n608\n\nLong-term debt due within one year\n3,542\n\n2,598\n\nOperating lease obligations due within one year\n1,631\n\n1,499\n\nFinance lease obligations due within one year\n856\n\n800\n\nTotal current liabilities\n107,469\n\n96,584\n\nLong-term debt\n34,624\n\n33,401\n\nLong-term operating lease obligations\n13,941\n\n12,825\n\nLong-term finance lease obligations\n5,905\n\n5,923\n\nDeferred income taxes and other\n16,549\n\n14,398\n\nCommitments and contingencies\nRedeemable noncontrolling interest\n293\n\n271\n\nShareholders' equity:\nCommon stock\n797\n\n802\n\nCapital in excess of par value\n6,816\n\n5,503\n\nRetained earnings\n104,774\n\n98,313\n\nAccumulated other comprehensive loss\n(\n12,770\n)\n(\n13,605\n)\nTotal Walmart shareholders' equity\n99,617\n\n91,013\n\nNonredeemable noncontrolling interest\n6,270\n\n6,408\n\nTotal shareholders' equity\n105,887\n\n97,421\n\nTotal liabilities, redeemable noncontrolling interest, and shareholders' equity\n$\n284,668\n\n$\n260,823\n\n See accompanying notes.\n54\nWalmart Inc.\nConsolidated Statements of Shareholders' Equity\nAccumulated\nTotal\nCapital in\nOther\nWalmart\nNonredeemable\nTotal\n(Amounts in millions)\nCommon Stock\nExcess of\nRetained\nComprehensive\nShareholders'\nNoncontrolling\nShareholders'\nShares\nAmount\nPar\u00a0Value\nEarnings\nLoss\nEquity\nInterest\nEquity\nBalances as of February 1, 2023\n8,080\n\n$\n808\n\n$\n4,430\n\n$\n83,135\n\n$\n(\n11,680\n)\n$\n76,693\n\n$\n7,061\n\n$\n83,754\n\nConsolidated net income\n\u2014\n\u2014\n\u2014\n15,511\n\n\u2014\n15,511\n\n774\n\n16,285\n\nOther comprehensive income, net of immaterial income taxes\nCurrency translation and other before reclassifications, net\n\u2014\n\u2014\n\u2014\n\u2014\n314\n\n314\n\n566\n\n880\n\nReclassifications to income, net\n\u2014\n\u2014\n\u2014\n\u2014\n64\n\n64\n\n\u2014\n64\n\nCash dividends declared ($\n0.76\n per share)\n\u2014\n\u2014\n\u2014\n(\n6,140\n)\n\u2014\n(\n6,140\n)\n\u2014\n(\n6,140\n)\nPurchase of Company stock\n(\n55\n)\n(\n6\n)\n(\n150\n)\n(\n2,635\n)\n\u2014\n(\n2,791\n)\n\u2014\n(\n2,791\n)\nCash dividend declared to noncontrolling interest\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(\n776\n)\n(\n776\n)\nPurchase of noncontrolling interest\n\u2014\n\u2014\n(\n1,076\n)\n\u2014\n\u2014\n(\n1,076\n)\n(\n1,367\n)\n(\n2,443\n)\nSale of subsidiary stock\n\u2014\n\u2014\n562\n\n\u2014\n\u2014\n562\n\n154\n\n716\n\nOther\n29\n\n3\n\n778\n\n(\n57\n)\n\u2014\n724\n\n76\n\n800\n\nBalances as of January 31, 2024\n8,054\n\n805\n\n4,544\n\n89,814\n\n(\n11,302\n)\n83,861\n\n6,488\n\n90,349\n\nConsolidated net income\n\u2014\n\u2014\n\u2014\n19,436\n\n\u2014\n19,436\n\n766\n\n20,202\n\nOther comprehensive loss, net of immaterial income taxes\nCurrency translation and other before reclassifications, net\n\u2014\n\u2014\n\u2014\n\u2014\n(\n2,359\n)\n(\n2,359\n)\n(\n556\n)\n(\n2,915\n)\nReclassifications to income, net\n\u2014\n\u2014\n\u2014\n\u2014\n56\n\n56\n\n\u2014\n56\n\nCash dividends declared ($\n0.83\n per share)\n\u2014\n\u2014\n\u2014\n(\n6,688\n)\n\u2014\n(\n6,688\n)\n\u2014\n(\n6,688\n)\nPurchase of Company stock\n(\n61\n)\n(\n6\n)\n(\n230\n)\n(\n4,241\n)\n\u2014\n(\n4,477\n)\n\u2014\n(\n4,477\n)\nCash dividend declared to noncontrolling interest\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(\n648\n)\n(\n648\n)\nSale of subsidiary stock\n\u2014\n\u2014\n169\n\n\u2014\n\u2014\n169\n\n193\n\n362\n\nOther\n31\n\n3\n\n1,020\n\n(\n8\n)\n\u2014\n1,015\n\n165\n\n1,180\n\nBalances as of January 31, 2025\n8,024\n\n802\n\n5,503\n\n98,313\n\n(\n13,605\n)\n91,013\n\n6,408\n\n97,421\n\nConsolidated net income\n\u2014\n\u2014\n\u2014\n21,893\n\n\u2014\n21,893\n\n426\n\n22,319\n\nOther comprehensive income, net of immaterial income taxes\nCurrency translation and other before reclassifications, net\n\u2014\n\u2014\n\u2014\n\u2014\n978\n\n978\n\n174\n\n1,152\n\nReclassifications to income, net\n\u2014\n\u2014\n\u2014\n\u2014\n(\n143\n)\n(\n143\n)\n\u2014\n(\n143\n)\nCash dividends declared ($\n0.94\n per share)\n\u2014\n\u2014\n\u2014\n(\n7,507\n)\n\u2014\n(\n7,507\n)\n\u2014\n(\n7,507\n)\nPurchase of Company stock\n(\n85\n)\n(\n8\n)\n(\n453\n)\n(\n7,619\n)\n\u2014\n(\n8,080\n)\n\u2014\n(\n8,080\n)\nCash dividend declared to noncontrolling interest\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(\n418\n)\n(\n418\n)\nSale of subsidiary stock\n\u2014\n\u2014\n58\n\n\u2014\n\u2014\n58\n\n11\n\n69\n\nOther\n30\n\n3\n\n1,708\n\n(\n306\n)\n\u2014\n1,405\n\n(\n331\n)\n1,074\n\nBalances as of January 31, 2026\n7,969\n\n797\n\n6,816\n\n104,774\n\n(\n12,770\n)\n99,617\n\n6,270\n\n105,887\n\n See accompanying notes.\n55\nWalmart Inc.\nConsolidated Statements of Cash Flows\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nCash flows from operating activities:\nConsolidated net income\n$\n22,270\n\n$\n20,157\n\n$\n16,270\n\nAdjustments to reconcile consolidated net income to net cash provided by operating activities:\nDepreciation and amortization\n14,203\n\n12,973\n\n11,853\n\nInvestment (gains) and losses, net\n(\n2,016\n)\n878\n\n3,193\n\nDeferred income taxes\n2,277\n\n(\n635\n)\n(\n175\n)\nOther operating activities\n4,079\n\n2,889\n\n2,642\n\nChanges in certain assets and liabilities, net of effects of acquisitions and dispositions:\nReceivables, net\n(\n1,136\n)\n(\n1,106\n)\n(\n797\n)\nInventories\n(\n1,443\n)\n(\n2,755\n)\n2,017\n\nAccounts payable\n1,611\n\n3,228\n\n2,515\n\nAccrued liabilities\n1,607\n\n379\n\n(\n1,324\n)\nAccrued income taxes\n113\n\n435\n\n(\n468\n)\nNet cash provided by operating activities\n41,565\n\n36,443\n\n35,726\n\nCash flows from investing activities:\nPayments for property and equipment\n(\n26,642\n)\n(\n23,783\n)\n(\n20,606\n)\nProceeds from the disposal of property and equipment\n106\n\n432\n\n250\n\nProceeds from disposal of certain strategic investments\n927\n\n4,080\n\n\u2014\n\nPayments for business acquisitions, net of cash acquired\n(\n53\n)\n(\n1,896\n)\n(\n9\n)\nOther investing activities\n(\n688\n)\n(\n212\n)\n(\n922\n)\nNet cash used in investing activities\n(\n26,350\n)\n(\n21,379\n)\n(\n21,287\n)\nCash flows from financing activities:\nNet change in short-term borrowings\n3,523\n\n2,212\n\n512\n\nProceeds from issuance of long-term debt\n3,983\n\n\u2014\n\n4,967\n\nRepayments of long-term debt\n(\n2,625\n)\n(\n3,468\n)\n(\n4,217\n)\nDividends paid\n(\n7,507\n)\n(\n6,688\n)\n(\n6,140\n)\nPurchase of Company stock\n(\n8,088\n)\n(\n4,494\n)\n(\n2,779\n)\nDividends paid to noncontrolling interest\n(\n439\n)\n(\n576\n)\n(\n763\n)\nPurchase of noncontrolling interest\n\u2014\n\n\u2014\n\n(\n3,462\n)\nSale of subsidiary stock\n111\n\n362\n\n716\n\nOther financing activities\n(\n2,511\n)\n(\n2,170\n)\n(\n2,248\n)\nNet cash used in financing activities\n(\n13,553\n)\n(\n14,822\n)\n(\n13,414\n)\nEffect of exchange rates on cash, cash equivalents and restricted cash\n123\n\n(\n641\n)\n69\n\nNet increase (decrease) in cash, cash equivalents and restricted cash\n1,785\n\n(\n399\n)\n1,094\n\nCash, cash equivalents and restricted cash at beginning of year\n9,536\n\n9,935\n\n8,841\n\nCash, cash equivalents and restricted cash at end of year\n$\n11,321\n\n$\n9,536\n\n$\n9,935\n\nSupplemental disclosure of cash flow information:\nIncome taxes paid\n$\n5,364\n\n$\n5,884\n\n$\n5,879\n\nInterest paid\n2,793\n\n2,739\n\n2,519\n\n See accompanying notes.\n56\nWalmart Inc.\nNotes to Consolidated Financial Statements\nNote 1.\nSummary of Significant Accounting Policies\nGeneral\nWalmart Inc. (\"Walmart\" or the \"Company\") is a people-led, technology-powered omnichannel retailer dedicated to helping people around the world save money and live better by providing the opportunity to shop in both retail stores and through eCommerce. Through innovation, the Company is striving to continuously improve a customer-centric experience that seamlessly integrates eCommerce and retail stores in an omnichannel offering that saves time for its customers.\nThe Company's operations comprise\nthree\n reportable segments: Walmart U.S., Walmart International and Sam's Club U.S.\nPrinciples of Consolidation\nThe Consolidated Financial Statements include the accounts of Walmart and its subsidiaries as of and for the fiscal years ended January\u00a031, 2026 (\"fiscal 2026\"), January\u00a031, 2025 (\"fiscal 2025\") and January\u00a031, 2024 (\"fiscal 2024\"). Intercompany accounts and transactions have been eliminated in consolidation. The Company consolidates variable interest entities where it has been determined that the Company is the primary beneficiary of those entities' operations. Investments in common stock or in-substance common stock for which the Company exercises significant influence but does not have control are accounted for under the equity method. These variable interest entities and equity method investments are immaterial to the Company's Consolidated Financial Statements.\nThe Company's Consolidated Financial Statements are based on a fiscal year ending on January 31 for the United States (\"U.S.\") and Canadian operations. The Company consolidates all other operations generally using a one-month lag and based on a calendar year. There were no significant intervening events during the month of January 2026 related to the operations consolidated using a lag that materially affected the Consolidated Financial Statements.\nUse of Estimates\nThe Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles (\"GAAP\"). Those principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Management's estimates and assumptions also affect the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.\nCurrency Translation\nThe functional currency of the Company's foreign subsidiaries is generally the local currency in which the subsidiary operates. The assets and liabilities of all international subsidiaries are translated from the respective local currency to the U.S. dollar using exchange rates at the balance sheet date. Related translation adjustments are recorded as a component of accumulated other comprehensive loss. The Company's Consolidated Statements of Income of all international subsidiaries are translated from the respective local currencies to the U.S. dollar using average exchange rates for the period covered by the income statements.\nCash and Cash Equivalents\nThe Company considers investments with a maturity when purchased of three months or less to be cash equivalents. All credit card, debit card and electronic transfer transactions that process in less than seven days are classified as cash and cash equivalents. The amounts due from banks for these transactions classified as cash and cash equivalents totaled $\n4.4\n billion and $\n2.3\n billion as of January\u00a031, 2026 and 2025, respectively.\nThe Company's cash balances are held in various locations around the world. Of the Company's $\n10.7\n billion and $\n9.0\n billion in cash and cash equivalents as of January\u00a031, 2026 and January\u00a031, 2025, approximately\n56\n% and\n62\n% were held outside of the U.S., respectively. Cash and cash equivalents held outside of the U.S. are generally utilized to support liquidity needs in the Company's non-U.S. operations.\nThe Company uses intercompany financing arrangements in an effort to ensure cash can be made available in the country in which it is needed with the minimum cost possible.\nAs of January\u00a031, 2026 and 2025, cash and cash equivalents of approximately $\n3.9\n billion and $\n3.3\n billion, respectively, may not be freely transferable to the U.S. due to local laws, other restrictions or are subject to the approval of the noncontrolling interest shareholders.\n57\nReceivables\nReceivables are stated at their carrying values, net of a reserve for credit losses, and are primarily due from the following: customers, which includes pharmacy insurance companies, advertisers, and banks for customer credit, debit cards and electronic transfer transactions that take in excess of seven days to process; suppliers for marketing or incentive programs; governments for income taxes; and real estate transactions.\n Net receivables from transactions with customers were $\n4.9\n billion and $\n4.4\n billion as of January\u00a031, 2026 and January\u00a031, 2025, respectively.\nInventories\nThe Company utilizes various inventory methods to account for and value its inventories depending upon the nature of the store formats and businesses in each of its segments, resulting in inventories that are recorded at the lower of cost or market or net realizable value, as appropriate.\n\u2022\nWalmart U.S. Segment - Inventories are primarily accounted for under the retail inventory method of accounting (\"RIM\") to determine inventory cost, using the last-in, first-out (\"LIFO\") valuation method. RIM generally results in inventory being valued at the lower of cost or market as permanent markdowns are immediately recorded as a reduction of the retail value of inventory.\n\u2022\nWalmart International Segment \u2013 Depending on the store format in each market, inventories are generally accounted for using either the RIM or weighted-average cost method, using the first-in, first-out valuation method.\n\u2022\nSam's Club U.S. Segment - The majority of this segment's inventory is accounted for and valued using the weighted-average cost LIFO method.\nFor those segments that utilize the LIFO method, the Company records an adjustment each quarter, if necessary, for the projected annual effect of inflation or deflation. These estimates are adjusted to actual results determined at year end for inflation or deflation and inventory levels.\n\nProperty and Equipment\nProperty and equipment are initially recorded at cost. Gains or losses on disposition are recognized as earned or incurred. Costs of major improvements are capitalized, while costs of normal repairs and maintenance are expensed as incurred\n.\nThe following table summarizes the Company's property and equipment balances and includes the estimated useful lives that are generally used to depreciate the assets on a straight-line basis:\nEstimated Useful Lives\nAs of January 31,\n(Dollars in millions)\n(in Years)\n2026\n2025\nLand\nN/A\n$\n20,754\n\n$\n19,342\n\nBuildings and improvements\n3\n -\n40\n128,472\n\n117,973\n\nFixtures and equipment\n2\n -\n30\n85,539\n\n76,226\n\nTransportation equipment\n3\n -\n15\n2,928\n\n2,673\n\nConstruction in progress\nN/A\n18,728\n\n15,403\n\nProperty and equipment\n256,421\n\n231,617\n\nAccumulated depreciation\n(\n120,338\n)\n(\n111,624\n)\nProperty and equipment, net\n$\n136,083\n\n$\n119,993\n\nLeasehold improvements are depreciated or amortized over the shorter of the estimated useful life of the asset or the remaining expected lease term.\n Total depreciation and amortization expense for property and equipment, property under finance leases and intangible assets was $\n14.2\n billion, $\n13.0\n billion and $\n11.9\n billion for fiscal 2026, 2025 and 2024, respectively.\nLeases\nThe Company determines whether an arrangement is or contains a lease at the inception of the contract. The Company records right-of-use (\"ROU\") assets and lease obligations for its finance and operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease. If the rate implicit in the Company's leases is not readily determinable, the Company's applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments.\nLease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less.\nFor a majority of all classes of underlying assets, the Company has elected to not separate lease from non-lease components. For leases in which the lease and non-lease components have been combined, the variable lease expense includes expenses such as common area maintenance, utilities and repairs and maintenance.\n58\nImpairment of Long-Lived Assets\nManagement reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows, which is at the individual store or club level. Undiscounted cash flows expected to be generated by the related assets are estimated over the assets' useful lives based on updated projections. If the evaluation indicates that the carrying amount of the assets may not be recoverable, any potential impairment is measured based upon the fair value of the related asset or asset group as determined by an appropriate market appraisal or other valuation technique.\n\nGoodwill and Other Acquired Intangible Assets\nGoodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations and is allocated to the appropriate reporting unit when acquired. Other acquired intangible assets are stated at the fair value acquired as determined by a valuation technique commensurate with the intended use of the related asset. Goodwill and indefinite-lived intangible assets are not amortized; rather, they are evaluated for impairment annually and whenever events or changes in circumstances indicate that the value of the asset may be impaired. Definite-lived intangible assets are considered long-lived assets and are amortized on a straight-line basis over the periods that expected economic benefits will be provided.\nGoodwill is typically assigned to the reporting unit which consolidates the acquisition. Components within the same reportable segment are aggregated and deemed a single reporting unit if the components have similar economic characteristics. Goodwill and other indefinite-lived acquired intangible assets are evaluated for impairment using either a qualitative or quantitative approach for each of the Company's reporting units. Generally, a qualitative assessment is first performed to determine whether a quantitative goodwill impairment test is necessary. If management determines, after performing an assessment based on the qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, or that a fair value of the reporting unit substantially in excess of the carrying amount cannot be assured, then a quantitative goodwill impairment test would be required. The quantitative test for goodwill impairment is performed by determining the fair value of the related reporting units. Fair value is measured based on the discounted cash flow method and relative market-based approaches. Management has performed its evaluation and determined the fair value of each reporting unit is significantly greater than the carrying amount and, accordingly, the Company has not recorded any impairment charges related to goodwill during fiscal 2026, fiscal 2025 or fiscal 2024.\nThe following table reflects goodwill activity, by reportable segment, for fiscal 2026 and 2025:\n(Amounts in millions)\nWalmart\u00a0U.S.\nWalmart\nInternational\nSam's\u00a0Club U.S.\nTotal\nBalances as of February 1, 2024\n$\n3,364\n\n$\n24,428\n\n$\n321\n\n$\n28,113\n\nChanges in currency translation and other\n\u2014\n\n(\n696\n)\n\u2014\n\n(\n696\n)\nAcquisitions\n(1)\n1,375\n\n\u2014\n\n\u2014\n\n1,375\n\nBalances as of January 31, 2025\n4,739\n\n23,732\n\n321\n\n28,792\n\nChanges in currency translation and other\n53\n\n(\n119\n)\n\u2014\n\n(\n66\n)\nAcquisitions\n\u2014\n\n9\n\n\u2014\n\n9\n\nBalances as of January 31, 2026\n$\n4,792\n\n$\n23,622\n\n$\n321\n\n$\n28,735\n\n(1)\nGoodwill recorded in fiscal 2025 relates to the acquisition of VIZIO Holding Corp. in December 2024 within the Walmart U.S. segment.\nIntangible assets are recorded in other long-term assets in the Company's Consolidated Balance Sheets\n. As of January 31, 2026 and 2025, the Company had $\n4.3\n billion and $\n4.5\n billion, respectively, in indefinite-lived intangible assets which primarily consists of acquired trade names. There were no significant impairment charges related to intangible assets for fiscal 2026, 2025 or 2024.\nFair Value Measurement\nThe Company records and discloses certain financial and non-financial assets and liabilities at fair value. The fair value of an asset is the price at which the asset could be sold in an orderly transaction between unrelated, knowledgeable and willing parties able to engage in the transaction. The fair value of a liability is the amount that would be paid to transfer the liability to a new obligor in a transaction between such parties, not the amount that would be paid to settle the liability with the creditor.\n Refer to\nNote 7\n for more information.\nInvestments\nInvestments in equity securities are recorded in other long-term assets in the Consolidated Balance Sheets. Changes in the fair value of certain equity securities, as well as certain immaterial equity method investments where the Company has elected the fair value option, are measured on a recurring basis (generally using Level 1 and Level 2 inputs in the fair value hierarchy) and recognized within other gains and losses in the Consolidated Statements of Income. Measurement of equity investments using Level 2 inputs is primarily based on quoted prices for similar securities in active markets. Equity investments without readily\n59\ndeterminable fair values are carried at cost and adjusted for any observable price changes or impairments within other gains and losses in the Consolidated Statements of Income. Investments in debt securities classified as trading are reported at fair value and included in other long-term assets in the Consolidated Balance Sheets, and adjustments in fair value are recorded within other gains and losses in the Consolidated Statements of Income. The Company's debt investments are immaterial and primarily relate to its retained investment in Asda, the Company's former retail operations in the U.K., the majority of which is mandatorily redeemable in fiscal 2029. The fair value is measured using Level 3 inputs and is primarily estimated by discounting the future cash flows over the remaining period until the mandatory redemption date at an appropriate discount rate reflecting Asda\u2019s credit risk. Refer to\nNote 7\n for details.\n\nIndemnification Liabilities\nThe Company has provided certain indemnifications in connection with previous divestitures and has recorded indemnification liabilities equal to the estimated fair value of the obligations.\n As of January\u00a031, 2026 and January\u00a031, 2025, the Company had $\n0.7\n billion and $\n0.6\n billion, respectively, of certain legal indemnification liabilities recorded within deferred income taxes and other in the Consolidated Balance Sheets. Maximum potential future payments under these indemnities was $\n3.4\n billion, based on exchange rates as of January\u00a031, 2026.\nSupplier Financing Program Obligations\nThe Company has supplier financing programs with financial institutions, in which the Company agrees to pay the financial institution the stated amount of confirmed invoices on the invoice due date for participating suppliers. Participation in these programs is optional and solely up to the supplier, who negotiates the terms of the arrangement directly with the financial institution and may allow early payment. Supplier participation in these programs has no bearing on the Company's amounts due. The payment terms that the Company has with participating suppliers under these programs generally range between\n30\n and\n90\n days. The Company does not have an economic interest in a supplier's participation in the program or a direct financial relationship with the financial institution funding the program. The Company is responsible for ensuring that participating financial institutions are paid according to the terms negotiated with the supplier, regardless of whether the supplier elects to receive early payment from the financial institution\n.\nThe rollforward of the Company's outstanding payment obligations to financial institutions under these programs is as follows:\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\nConfirmed obligations outstanding at the beginning of the year\n$\n5,725\n\n$\n5,271\n\nInvoices confirmed during the year\n40,342\n\n41,335\n\nConfirmed invoices paid during the year\n(\n40,062\n)\n(\n40,810\n)\nTranslation and other\n(\n16\n)\n(\n71\n)\nConfirmed obligations outstanding at the end of the year\n$\n5,989\n\n$\n5,725\n\nThese obligations are generally classified as\naccounts payable\n within the Consolidated Balance Sheets. The activity related to these programs is classified as an operating activity within the Consolidated Statements of Cash Flows.\nSelf-Insurance Reserves\nThe Company self-insures a number of risks, including, but not limited to, general liability, workers' compensation, auto liability, product liability and certain employee-related healthcare benefits. Standard actuarial procedures and data analysis are used to estimate the liabilities associated with these risks on an undiscounted basis. The recorded liabilities reflect the ultimate cost for claims incurred but not paid and any estimable administrative run-out expenses related to the processing of these outstanding claim payments. On a regular basis, the liabilities are evaluated for appropriateness with claims reserve valuations. To limit exposure to some risks, the Company maintains insurance coverage with varying limits and retentions, including stop-loss insurance coverage for general liability, workers' compensation and auto liability. Refer to\nNote 4\n for the self-insurance reserves which are recorded in accrued liabilities in the Company's Consolidated Balance Sheets.\n60\nDerivatives\nThe Company uses derivatives for hedging purposes to manage its exposure to changes in interest and currency exchange rates, as well as to maintain an appropriate mix of fixed- and variable-rate debt. Use of derivatives in hedging programs subjects the Company to certain risks, such as market and credit risks. The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Credit risk is monitored through established approval procedures, including setting concentration limits by counterparty, reviewing credit ratings and requiring collateral from the counterparty. The Company enters into derivatives with counterparties rated generally \"A-\" or better by nationally recognized credit rating agencies. The Company is subject to master netting arrangements which provides set-off and close-out netting of exposures with counterparties, but the Company does not offset derivative assets and liabilities in its Consolidated Balance Sheets. The Company's collateral arrangements require the counterparty in a net liability position in excess of pre-determined thresholds, after considering the effects of netting arrangements, to pledge cash collateral. Cash collateral received from counterparties and cash collateral provided to counterparties under these arrangements was not significant as of January\u00a031, 2026 and 2025.\nIn order to qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge. If a derivative is recorded using hedge accounting, depending on the nature of the hedge, derivative gains and losses are recorded through the same financial statement line item in earnings or are recognized in accumulated other comprehensive loss until the hedged item is recognized in earnings. Derivatives that do not meet the criteria for hedge accounting, or contracts for which the Company has not elected hedge accounting, are recorded at fair value with unrealized gains or losses reported in earnings. Derivatives with an unrealized gain are recorded in the Company's Consolidated Balance Sheets as either current or non-current assets, based on maturity date, and derivatives with an unrealized loss are recorded as either current or non-current liabilities, based on maturity date. Refer to\nNote 7\n for the presentation of the Company's derivative assets and liabilities.\nFair Value Hedges\nThe Company is a party to receive fixed-rate, pay variable-rate interest rate swaps that the Company uses to hedge the fair value of fixed-rate debt. All interest rate swaps designated as fair value hedges of the related long-term debt meet the shortcut method requirements under GAAP. Accordingly, changes in the fair values of these interest rate swaps are considered to exactly offset changes in the fair value of the underlying long-term debt. These derivatives will mature on dates ranging from September 2028 to September 2031.\nCash Flow Hedges\nThe Company is a party to receive fixed-rate, pay fixed-rate cross currency interest rate swaps used to hedge the currency exposure associated with the forecasted payments of principal and interest of certain non-U.S. denominated debt. The Company records changes in the fair value of these swaps in accumulated other comprehensive loss which is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. These derivatives will mature on dates ranging from April 2026 to January 2039.\nIncome Taxes\nIncome taxes are accounted for under the balance sheet method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases (\"temporary differences\"). Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date.\nDeferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent that a portion is not more likely than not to be realized. Many factors are considered when assessing whether it is more likely than not that the deferred tax assets will be realized, including recent cumulative earnings, expectations of future taxable income, carryforward periods, and other relevant quantitative and qualitative factors. The recoverability of the deferred tax assets is evaluated by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income rely on estimates.\nIn determining the provision for income taxes, an annual effective income tax rate is used based on annual income, permanent differences between book and tax income, and statutory income tax rates. Discrete events such as audit settlements or changes in tax laws are recognized in the period in which they occur.\nThe Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company records interest and penalties related to unrecognized tax benefits in interest expense and operating, selling, general and administrative expenses, respectively, in the Company's Consolidated Statements of Income. Refer to\nNote\n8\n for additional income tax disclosures.\n61\nRedeemable Noncontrolling Interest\nThe Company has a redeemable noncontrolling interest in a subsidiary within the Walmart U.S. segment. The minority interest owner holds a put option which, if exercised, would require the Company to purchase the underlying shares at fair value beginning in December 2027, with annual options thereafter. Redeemable noncontrolling interests are initially recorded at fair value and adjusted each reporting period for income, loss and any distributions made, and are then generally remeasured to the greater of the redemption value or the carrying value of the noncontrolling interest. Remeasurements to the redemption value of the redeemable noncontrolling interest are recognized in capital in excess of par.\n\nRevenue Recognition\n\nNet Sales\nThe Company recognizes sales revenue, net of sales taxes and estimated sales returns, at the time it sells merchandise or provides services to the customer. eCommerce sales include shipping revenue and are recorded upon delivery to the customer. Estimated sales returns are calculated based on expected returns.\nFinancial, Advertising and Other Services\nThe Company recognizes revenue from service transactions at the time the service is performed. Generally, revenue from services is classified as a component of net sales in the Company's Consolidated Statements of Income.\nMembership and Other Income\nMembership and other income primarily includes membership fee revenue associated with the Company's various membership offerings for customers and members across each reportable segment. Membership fee revenue is recognized over the term of the membership, which are generally one year, although certain offerings are month-to month. Membership fee revenue was $\n4.4\n billion, $\n3.8\n billion and $\n3.1\n billion for fiscal 2026, 2025 and 2024, respectively. Deferred membership fee revenue is included in accrued liabilities in the Company's Consolidated Balance Sheets. Additionally, membership and other income includes items such as rental and tenant income, recycling income, and gift card breakage income.\nGift Cards\nCustomer purchases of gift cards are not recognized as sales until the card is redeemed and the customer purchases merchandise using the gift card, thus a liability for deferred gift card revenue is recorded within accrued liabilities in the Consolidated Balance Sheets. Refer to\nNote 4\n. Gift cards in the U.S. and some countries do not carry an expiration date; therefore, customers and members can redeem their gift cards for merchandise and services indefinitely. Gift cards in some countries where the Company does business have expiration dates. While gift cards are generally redeemed within 12 months, a certain number of gift cards, both with and without expiration dates, will not be fully redeemed. Management estimates unredeemed balances and recognizes gift card breakage income for these amounts in membership and other income in the Company's Consolidated Statements of Income over the expected redemption period.\nCost of Sales\nCost of sales includes costs of merchandise sold and services performed; costs of transporting merchandise to the Company's distribution facilities, stores, clubs, and customers; and also includes warehousing costs for the Sam's Club U.S. segment and import distribution centers. Cost of sales is reduced by supplier payments, except in certain situations as described below.\nPayments from Suppliers\nThe Company receives consideration from suppliers for various programs, primarily volume incentives, warehouse allowances and reimbursements for specific programs such as markdowns, margin protection, certain advertising arrangements and supplier-specific fixtures. Payments from suppliers are accounted for as a reduction of cost of sales and recognized in the Company's Consolidated Statements of Income when the related inventory is sold, except in situations when the payment is in exchange for a distinct good or service or a reimbursement of specific, incremental and identifiable costs.\nOperating, Selling, General and Administrative Expenses\nOperating, selling, general and administrative expenses include all operating costs of the Company (except cost of sales, as described above), which comprise substantially all labor-related, depreciation and amortization, maintenance and repairs, utilities, and other general operating costs incurred in stores, clubs and other facilities. The majority of the cost of warehousing and occupancy for the Walmart U.S. and Walmart International segments' distribution facilities is included in operating, selling, general and administrative expenses. Because the Company only includes a portion of the cost of its Walmart U.S. and Walmart International segments' distribution facilities in cost of sales, its gross profit and gross profit as a percentage of net sales may not be comparable to those of other retailers that may include all costs related to their distribution facilities in cost of sales and in the calculation of gross profit.\n62\nAs a result, the Company\u2019s cost of sales and operating, selling, general and administrative expenses for each of its reportable segments may not be comparable to those of other retailers.\n\nAdvertising Costs\nAdvertising costs are expensed as incurred, and consist primarily of digital, television and print advertisements that are recorded in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income.\n Advertising costs were $\n5.4\n billion, $\n5.1\n billion and $\n4.4\n billion for fiscal 2026, 2025 and 2024, respectively.\nOther Comprehensive Income\nOther comprehensive income or loss is recorded in accumulated other comprehensive loss as a component of shareholders' equity and primarily consists of foreign currency translation adjustments from foreign subsidiaries where the functional currency is not the U.S. dollar, as well as unrealized gains and losses on cash flow hedges which are not significant. Amounts reclassified from accumulated other comprehensive loss into earnings primarily relate to cross-currency swaps to hedge the changes in cash flows of certain foreign currency denominated debt and are recorded against the hedged item in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income. Certain amounts are also reclassified from accumulated other comprehensive loss into earnings and are recorded against the hedged item in interest, net in the Company's Consolidated Statements of Income.\nRecent Accounting Pronouncements\nIn December 2023, the FASB issued ASU 2023-09,\nIncome Taxes (Topic 740): Improvements to Income Tax Disclosures\n, which expands the requirements for income tax disclosures in order to provide greater transparency. The amendments are effective for fiscal years beginning after December 15, 2024. The amendments should be applied prospectively, although optional retrospective application is permitted. Management has adopted the amendments prospectively for the fiscal year ending January 31, 2026. See\nNote\n8\n for the expanded disclosures.\nIn November 2024, the FASB issued ASU 2024-03,\n Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses\n, which requires incremental disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the amendments may be applied either prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company's disclosures. The amendments only impact disclosures and are not expected to have an impact on the Company's financial condition and results of operations.\nNote 2.\nNet Income Per Common Share\nBasic net income per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period. Diluted net income per common share attributable to Walmart is based on the weighted-average common shares outstanding during the relevant period adjusted for the dilutive effect of share-based awards as determined under the treasury stock method. The Company did not have significant share-based awards outstanding that were antidilutive and not included in the calculation of diluted net income per common share attributable to Walmart for fiscal 2026, 2025 and 2024.\nThe following table provides a reconciliation of the numerators and denominators used to determine basic and diluted net income per common share attributable to Walmart:\nFiscal Years Ended January 31,\n(Amounts in millions, except per share data)\n2026\n2025\n2024\nNumerator\nConsolidated net income\n$\n22,270\n\n$\n20,157\n\n$\n16,270\n\nConsolidated net income attributable to noncontrolling interest\n(\n377\n)\n(\n721\n)\n(\n759\n)\nConsolidated net income attributable to Walmart\n$\n21,893\n\n$\n19,436\n\n$\n15,511\n\nDenominator\nWeighted-average common shares outstanding, basic\n7,983\n\n8,041\n\n8,077\n\nDilutive impact of share-based awards\n39\n\n40\n\n31\n\nWeighted-average common shares outstanding, diluted\n8,022\n\n8,081\n\n8,108\n\nNet income per common share attributable to Walmart\nBasic\n$\n2.74\n\n$\n2.42\n\n$\n1.92\n\nDiluted\n2.73\n\n2.41\n\n1.91\n\n63\nNote 3.\nShareholders' Equity\nThe total authorized shares of $\n0.10\n par value common stock is\n33.0\n\u00a0billion, of which\n8.0\n billion were issued and outstanding as of January\u00a031, 2026 and 2025. The total authorized shares of $\n0.10\n par value preferred stock is\n0.1\n billion;\nnone\n of which were issued or outstanding for any period presented.\nNoncontrolling Interest\nDuring fiscal 2026, the Company's PhonePe subsidiary modified certain of its share-based payment arrangements in contemplation of a potential initial public offering. Upon modification, the Company recorded a non-cash charge of $\n0.7\n\u00a0billion (a portion of which was based on grant-date fair value) in operating, selling, general and administrative expenses within the Walmart International segment, primarily related to previously unrecognized share-based compensation expense under these arrangements. Following the modification, certain PhonePe employee-held options were vested and exercised (including certain previously vested awards), which decreased the Company's ownership in PhonePe from approximately\n84\n% as of January 31, 2025 to approximately\n73\n% as of January 31, 2026.\nDuring fiscal 2024, the Company paid $\n3.5\n\u00a0billion to acquire shares from certain Flipkart noncontrolling interest holders and settle a $\n0.9\n\u00a0billion liability to former noncontrolling interest holders of PhonePe in connection with the separation from Flipkart in fiscal 2023. The Company's ownership of Flipkart increased from approximately\n75\n% as of January 31, 2023 to approximately\n85\n% as of January 31, 2024.\nAlso during fiscal 2024, the Company received $\n0.7\n\u00a0billion related to new rounds of equity funding for the Company's majority owned PhonePe subsidiary, which decreased the Company's ownership from approximately\n89\n% as of January 31, 2023 to approximately\n84\n% as of January 31, 2024.\nShare-Based Compensation\nThe Company has awarded share-based compensation to associates and nonemployee directors of the Company. The compensation expense recognized for all stock incentive plans, including expense associated with plans of the Company's consolidated subsidiaries granted in the subsidiaries' respective stock, was $\n3.6\n\u00a0billion, $\n2.8\n billion and $\n2.1\n billion for fiscal 2026, 2025 and 2024, respectively. Share-based compensation expense is generally included in operating, selling, general and administrative expenses in the Company's Consolidated Statements of Income. The total income tax benefit recognized for share-based compensation was $\n0.9\n billion, $\n0.7\n billion and $\n0.5\n billion for fiscal 2026, 2025 and 2024, respectively.\nThe following table summarizes the Company's share-based compensation expense by award type for all plans:\n\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nRestricted stock units\n$\n2,028\n\n$\n1,909\n\n$\n1,258\n\nRestricted stock and performance-based restricted stock units\n587\n\n632\n\n609\n\nOther\n988\n\n228\n\n226\n\nShare-based compensation expense\n$\n3,603\n\n$\n2,769\n\n$\n2,093\n\nThe Walmart Inc. Stock Incentive Plan of 2025 (the \"Plan\") was approved by the Company's shareholders in June 2025, which amended and restated the Company's Stock Incentive Plan of 2015. The Plan provides for the issuance of stock options, restricted (non-vested) stock, restricted stock units, performance share units and other equity compensation awards for which\n215\n million shares of Walmart common stock issued or to be issued under the Plan have been registered under the Securities Act of 1933. The Company believes that such awards serve to align the interests of its associates with those of its shareholders.\nThe Plan's award types are summarized as follows:\n\u2022\nRestricted Stock Units.\nRestricted stock units provide rights to Company stock after a specified service period. Beginning in fiscal 2023, restricted stock units generally vest at a rate of approximately\n8\n% each quarter over a\nthree year\n period from the date of grant. For grants made from fiscal 2020 through fiscal 2022, restricted stock units generally vest at a rate of\n25\n% each year over a\nfour year\n period from the date of the grant. The fair value of each restricted stock unit is determined on the date of grant using the stock price discounted for the expected dividend yield through the vesting period and is recognized ratably over the vesting period. The expected dividend yield is based on the anticipated dividends over the vesting period. The weighted-average discount for the dividend yield used to determine the fair value of restricted stock units granted in fiscal 2026, 2025 and 2024 was\n1.5\n%,\n2.0\n% and\n2.2\n%, respectively.\n64\n\u2022\nRestricted Stock and Performance-based Restricted Stock Units.\nRestricted stock awards are for shares that vest based on the passage of time and include restrictions related to employment. Performance-based restricted stock units generally vest based on a\none-year\n performance period followed by a\ntwo-year\n vesting period based on the passage of time. Vesting conditions during the performance period are based on achieving pre-established financial goals for metrics related to growth and returns and generally range from\n0\n% to\n150\n% of the original award amount. Vesting periods for restricted stock are generally between\none month\n and\nthree years\n. Vesting periods for performance-based restricted stock units are generally between\none\n and\nthree years\n. Restricted stock and performance-based restricted stock units may be settled or, in certain circumstances, deferred and are accounted for as equity in the Company's Consolidated Balance Sheets. The fair value of restricted stock awards is determined on the date of grant and is expensed ratably over the vesting period. The fair value of performance-based restricted stock units is determined on the date of grant using the Company's stock price discounted for the expected dividend yield through the vesting period and is recognized over the vesting period if it is probable that performance conditions will be achieved. The weighted-average discount for the dividend yield used to determine the fair value of performance-based restricted stock units in fiscal 2026, 2025 and 2024 was\n2.4\n%,\n3.2\n% and\n3.3\n%, respectively.\nIn addition to the Plan, certain of the Company's subsidiaries have share-based compensation plans for associates under which options to acquire their own common shares are issued. Share-based compensation expense associated with these plans is reflected in the Other line in the table above, which also includes the $\n0.7\n\u00a0billion impact related to the modification of certain PhonePe share-based payment arrangements described above.\nThe following table shows the activity for restricted stock units and restricted stock and performance-based restricted stock units during fiscal 2026:\nRestricted Stock Units\nRestricted Stock and\nPerformance-based Restricted Stock Units\n(Shares in thousands)\nShares\nWeighted-Average Grant-Date Fair Value Per Share\nShares\nWeighted-Average Grant-Date Fair Value Per Share\nOutstanding as of February 1, 2025\n51,758\n\n$\n55.72\n\n20,960\n\n$\n54.88\n\nGranted\n27,741\n\n87.95\n\n7,271\n\n94.84\n\nAdjustment for performance achievement\n(1)\n\u2014\n\n\u2014\n\n2,580\n\n60.54\n\nVested/exercised\n(\n35,426\n)\n59.93\n\n(\n12,165\n)\n53.56\n\nForfeited\n(\n6,917\n)\n65.46\n\n(\n2,556\n)\n57.05\n\nOutstanding as of January 31, 2026\n37,156\n\n$\n73.96\n\n16,090\n\n$\n74.50\n\n(1)\nRepresents the adjustment to previously granted performance share units for performance achievement.\n\nThe following table includes additional information related to restricted stock units and restricted stock and performance-based restricted stock units:\n\nFiscal Years Ended January 31,\n(Amounts in millions, except years)\n2026\n2025\n2024\nFair value of restricted stock units vested\n$\n2,111\n\n$\n1,848\n\n$\n1,345\n\nFair value of restricted stock and performance-based restricted stock units vested\n652\n\n602\n\n477\n\nUnrecognized compensation cost for restricted stock units\n2,239\n\n2,243\n\n1,686\n\nUnrecognized compensation cost for restricted stock and performance-based restricted stock units\n670\n\n669\n\n656\n\nWeighted average remaining period to expense for restricted stock units (years)\n0.8\n0.9\n0.9\nWeighted average remaining period to expense for restricted stock and performance-based restricted stock units (years)\n1.3\n1.3\n1.3\nAs of January\u00a031, 2026, the Company also has approximately $\n3\n billion in unrecognized compensation cost (based on grant-date fair value) primarily associated with share-based compensation plans of certain subsidiaries which contain performance or other conditions including vesting upon an initial public offering. If such conditions are ultimately satisfied, unrecognized compensation cost would be recognized in the applicable reporting period.\nShare Repurchase Program\nFrom time to time, the Company repurchases shares of its common stock under share repurchase programs authorized by the Company's Board of Directors. All repurchases during fiscal 2026 were made under the current $\n20.0\n\u00a0billion share repurchase program approved in November 2022, which had no expiration date or other restrictions limiting the period over which the Company can make repurchases. As of January\u00a031, 2026 authorization for $\n4.0\n billion of share repurchases remained under the share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status. In February 2026, the Board of Directors approved a new $\n30.0\n\u00a0billion share repurchase authorization, which has no expiration date or other restrictions limiting the period over which the Company can make repurchases, and beginning February 23, 2026, replaced the remaining capacity under the prior authorization.\n65\nThe Company regularly reviews share repurchase activity and considers several factors in determining when to execute share repurchases, including, among other things, current cash needs, capacity for leverage, cost of borrowings, results of operations and the market price of the Company's common stock.\nThe following table provides, on a settlement date basis, the number of shares repurchased, average price paid per share and total amount paid for share repurchases for fiscal 2026, 2025 and 2024:\nFiscal Years Ended January 31,\n(Amounts in millions, except per share data)\n2026\n2025\n2024\nTotal number of shares repurchased\n85.0\n\n61.9\n\n54.6\n\nAverage price paid per share\n$\n95.13\n\n$\n72.72\n\n$\n50.87\n\nTotal cash paid for share repurchases\n$\n8,088\n\n$\n4,494\n\n$\n2,779\n\nNote 4.\nAccrued Liabilities\nThe Company's accrued liabilities consist of the following as of January\u00a031, 2026 and 2025:\n\nJanuary 31,\n(Amounts in millions)\n2026\n2025\nAccrued wages and benefits\n(1)\n$\n7,878\n\n$\n7,897\n\nSelf-insurance\n(2)\n5,525\n\n4,976\n\nAccrued non-income taxes\n(3)\n4,110\n\n3,503\n\nDeferred gift card revenue\n2,941\n\n2,755\n\nOther\n(4)\n10,733\n\n10,214\n\nTotal accrued liabilities\n$\n31,187\n\n$\n29,345\n\n(1)\nAccrued wages and benefits include accrued wages, salaries, vacation, bonuses and other incentive plans.\n(2)\nSelf-insurance consists of insurance-related liabilities, such as general liability, workers' compensation, auto liability, product liability and certain employee-related healthcare benefits.\n(3)\nAccrued non-income taxes include accrued payroll, property, value-added, sales and miscellaneous other taxes.\n(4)\nOther accrued liabilities includes items such as deferred membership revenue, interest, supply chain, advertising, and maintenance and utilities.\nNote 5.\nShort-term Borrowings and Long-term Debt\nShort-term borrowings consist of commercial paper and lines of credit. Short-term borrowings as of January\u00a031, 2026 and 2025 were $\n6.6\n billion and $\n3.1\n billion, respectively, with weighted-average interest rates of\n4.0\n% and\n5.3\n%, respectively.\nThe Company has various committed lines of credit in the U.S. to support its commercial paper program which are summarized in the following table:\nJanuary 31, 2026\nJanuary 31, 2025\n(Amounts in millions)\nAvailable\nDrawn\nUndrawn\nAvailable\nDrawn\nUndrawn\nFive\n-year credit facility\n(1)\n$\n5,000\n\n$\n\u2014\n\n$\n5,000\n\n$\n5,000\n\n$\n\u2014\n\n$\n5,000\n\n364\n-day revolving credit facility\n(1)\n10,000\n\n\u2014\n\n10,000\n\n10,000\n\n\u2014\n\n10,000\n\nTotal\n$\n15,000\n\n$\n\u2014\n\n$\n15,000\n\n$\n15,000\n\n$\n\u2014\n\n$\n15,000\n\n(1)\nIn April 2025, the Company renewed and extended its existing\n364\n-day revolving credit facility as well as its\nfive year\n credit facility.\n\nThe committed lines of credit in the table above mature in April 2026 and April 2030, carry interest rates of the Secured Overnight Financing Rate plus\n45\n basis points, and incur commitment fees ranging between\n1.5\n and\n4.0\n basis points. In conjunction with the committed lines of credit listed in the table above, the Company has agreed to observe certain covenants, the most restrictive of which relates to the maximum amount of secured debt. Additionally, the Company has syndicated and fronted letters of credit available which totaled $\n2.0\n billion and $\n2.1\n billion as of January\u00a031, 2026 and 2025, respectively, of which $\n1.7\n billion and $\n1.5\n billion was issued as of January\u00a031, 2026 and 2025, respectively.\n66\nThe Company's long-term debt, which includes the fair value instruments further discussed in\nNote\n7\n, consists of the following as of January\u00a031, 2026 and 2025:\n\nJanuary 31, 2026\nJanuary 31, 2025\n(Amounts in millions)\nMaturity\u00a0Dates\nBy Fiscal Year\nAmount\nAverage Rate\n(1)\nAmount\nAverage Rate\n(1)\nUnsecured debt\nFixed\n2027 - 2054\n$\n32,032\n\n3.9\n%\n$\n31,406\n\n3.8\n%\nVariable\n2028\n750\n\n4.1\n%\n\u2014\n\n\u2014\n%\nTotal U.S. dollar denominated\n32,782\n\n31,406\n\nEuro denominated\n2027 - 2030\n1,955\n\n4.0\n%\n1,715\n\n4.0\n%\nSterling denominated\n2031 - 2039\n3,677\n\n5.4\n%\n3,336\n\n5.4\n%\nYen denominated\n2028\n388\n\n0.5\n%\n389\n\n0.5\n%\nTotal unsecured debt\n38,802\n\n36,846\n\nTotal other\n(2)\n(\n636\n)\n(\n847\n)\nTotal debt\n38,166\n\n35,999\n\nLess amounts due within one year\n(\n3,542\n)\n(\n2,598\n)\nLong-term debt\n$\n34,624\n\n$\n33,401\n\n(1)\nThe average rate represents the weighted-average stated rate for each corresponding debt category, based on year-end balances and year-end interest rates.\n(2)\nIncludes deferred loan costs, discounts, fair value hedges, foreign-held debt and secured debt.\n\nAnnual maturities of long-term debt during the next five years and thereafter are as follows:\n(Amounts in millions)\nAnnual\nFiscal Year\nMaturities\n2027\n$\n3,542\n\n2028\n3,237\n\n2029\n3,389\n\n2030\n2,143\n\n2031\n2,600\n\nThereafter\n23,255\n\nTotal\n$\n38,166\n\nDebt Issuances\nInformation on significant issuances of long-term debt during fiscal 2026, for general corporate purposes, is as follows:\n(Amounts in millions)\nIssue Date\nPrincipal Amount\nMaturity Date\nInterest Rate\nNet Proceeds\nApril 28, 2025\n$\n750\nApril 28, 2027\nFloating\n$\n749\n\nApril 28, 2025\n$\n750\nApril 28, 2027\n4.100\n%\n748\n\nApril 28, 2025\n$\n1,000\nApril 28, 2030\n4.350\n%\n993\n\nApril 28, 2025\n$\n1,500\nApril 28, 2035\n4.900\n%\n1,493\n\nTotal\n$\n3,983\n\nThese issuances are senior, unsecured notes which rank equally with all other senior, unsecured debt obligations of the Company, and are not convertible or exchangeable. These issuances do not contain any financial covenants which restrict the Company's ability to pay dividends or repurchase Company stock.\nMaturities\nThe following tables provide details of significant long-term debt maturities during fiscal 2026 and 2025, respectively:\n(Amounts in millions)\nMaturity Date\nPrincipal Amount\nInterest Rate\nRepayment\nJune 26, 2025\n$\n875\n3.550\n%\n$\n875\n\nSeptember 9, 2025\n$\n1,750\n3.900\n%\n1,750\n\nTotal\n$\n2,625\n\n67\n(Amounts in millions)\nMaturity Date\nPrincipal Amount\nInterest Rate\nRepayment\nApril 22, 2024\n$\n1,500\n3.300\n%\n$\n1,500\n\nJuly 8, 2024\n$\n990\n2.850\n%\n990\n\nJuly 18, 2024\n\u00a5\n40,000\n0.298\n%\n253\n\nDecember 15, 2024\n$\n630\n2.650\n%\n630\n\nTotal\n$\n3,373\n\nNote 6.\nLeases\nThe Company leases certain retail locations, distribution and fulfillment centers, warehouses, office spaces, land and equipment throughout the U.S. and internationally.\nThe Company's lease costs recognized in the Consolidated Statements of Income consist of the following:\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nOperating lease cost\n$\n2,434\n\n$\n2,347\n$\n2,277\nFinance lease cost:\n\u00a0\u00a0\u00a0Amortization of right-of-use assets\n888\n\n891\n755\n\u00a0\u00a0\u00a0Interest on lease obligations\n383\n\n381\n326\nVariable lease cost\n1,180\n\n1,145\n1,082\nOther lease information is as follows:\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nCash paid for amounts included in measurement of lease obligations:\nOperating cash flows from operating leases\n$\n2,315\n\n$\n2,390\n\n$\n2,273\n\nOperating cash flows from finance leases\n377\n\n375\n\n315\n\nFinancing cash flows from finance leases\n891\n\n908\n\n1,055\n\nAssets obtained in exchange for operating lease obligations\n2,303\n\n1,974\n\n1,514\n\nAssets obtained in exchange for finance lease obligations\n703\n\n1,455\n\n1,572\n\nAs of January 31,\n2026\n2025\nWeighted-average remaining lease term - operating leases\n11.3\n years\n11.3\n years\nWeighted-average remaining lease term - finance leases\n11.5\n years\n11.7\n years\nWeighted-average discount rate - operating leases\n6.7\n%\n6.5\n%\nWeighted-average discount rate - finance leases\n7.0\n%\n6.7\n%\nThe aggregate annual lease obligations at January\u00a031, 2026, are as follows:\n(Amounts in millions)\nFiscal Year\nOperating Leases\nFinance Leases\n2027\n$\n2,453\n\n$\n1,228\n\n2028\n2,361\n\n1,132\n\n2029\n2,214\n\n955\n\n2030\n2,008\n\n805\n\n2031\n1,796\n\n692\n\nThereafter\n11,792\n\n6,003\n\nTotal undiscounted lease obligations\n22,624\n\n10,815\n\nLess imputed interest\n(\n7,052\n)\n(\n4,054\n)\nNet lease obligations\n$\n15,572\n\n$\n6,761\n\n68\nNote 7.\nFair Value Measurements\nAssets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:\n\u2022\nLevel 1: observable inputs such as quoted prices in active markets;\n\u2022\nLevel 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and\n\u2022\nLevel 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.\nAs described in\nNote 1\n, the Company measures the fair value of certain equity investments, including certain immaterial equity method investments where the Company has elected the fair value option, as well as debt investments classified as trading on a recurring basis primarily within other long-term assets in the accompanying Consolidated Balance Sheets. The associated gains and losses from fair value changes for these investments are recognized within other gains and losses in the Consolidated Statements of Income. Other gains and losses included a gain of $\n2.1\n billion and losses of $\n0.8\n billion and $\n3.0\n billion for fiscal 2026, 2025, and 2024, respectively, driven primarily by fair value changes on these investments, as well as other immaterial activity.\nThe fair value of these investments is as follows:\n(Amounts in millions)\nFair Value as of January\u00a031, 2026\nFair Value as of January\u00a031, 2025\nEquity investments measured using Level 1 inputs\n$\n1,037\n\n$\n959\n\nEquity investments measured using Level 2 inputs\n3,462\n\n2,082\n\nDebt investments measured using Level 3 inputs\n1,176\n\n1,181\n\nTotal\n$\n5,675\n\n$\n4,222\n\nThe fair value of these investments increased $\n1.5\n billion during fiscal 2026, primarily due to gains and losses resulting from net changes in the underlying stock prices of the equity investments and certain other immaterial investment activity, partially offset by the sale of certain investments. The fair value of investments decreased $\n4.2\n billion during fiscal 2025 primarily due to the sale of the Company's investment in JD.com, as well as gains and losses resulting from net changes in the underlying stock prices of the equity investments, along with certain other immaterial investment activity.\nSale of Investment\nIn August 2024, the Company sold its investment in JD.com for net proceeds of approximately $\n3.6\n\u00a0billion and recorded a realized loss of $\n0.3\n\u00a0billion within other gains and losses.\nDerivatives\nThe Company also has derivatives recorded at fair value. Derivative fair values are the estimated amounts the Company would receive or pay upon termination of the related derivative agreements as of the reporting dates. The fair values have been measured using the income approach and Level 2 inputs, which include the relevant interest rate and foreign currency forward curves.\nAs of January\u00a031, 2026 and January\u00a031, 2025, the notional amounts and fair values of these derivatives were as follows:\n\nJanuary 31, 2026\nJanuary 31, 2025\n(Amounts in millions)\nNotional Amount\nFair Value\nNotional Amount\nFair Value\nReceive fixed-rate, pay variable-rate interest rate swaps designated as fair value hedges\n$\n4,771\n\n$\n(\n411\n)\n(1)\n$\n4,771\n\n$\n(\n611\n)\n(1)\nReceive fixed-rate, pay fixed-rate cross-currency swaps designated as cash flow hedges\n6,020\n\n(\n920\n)\n(1)\n5,452\n\n(\n1,388\n)\n(1)\nTotal\n$\n10,791\n\n$\n(\n1,331\n)\n$\n10,223\n\n$\n(\n1,999\n)\n(1)\nPrimarily classified in deferred income taxes and other within the Company's Consolidated Balance Sheets.\nNonrecurring Fair Value Measurements\nIn addition to assets and liabilities recorded at fair value on a recurring basis, the Company's assets and liabilities are also subject to nonrecurring fair value measurements. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges.\nThe Company did not have any material assets or liabilities resulting in nonrecurring fair value measurements as of January\u00a031, 2026 and January\u00a031, 2025.\nOther Fair Value Disclosures\nThe Company records cash and cash equivalents, restricted cash and short-term borrowings at cost. The carrying values of these instruments approximate their fair value due to their short-term maturities.\n69\nThe Company's long-term debt is also recorded at cost. The fair value is estimated using Level 2 inputs based on observable prices of identical instruments in less active markets.\nThe carrying value and fair value of the Company's long-term debt as of January\u00a031, 2026 and 2025, are as follows:\n\nJanuary 31, 2026\nJanuary 31, 2025\n(Amounts in millions)\nCarrying\u00a0Value\nFair\u00a0Value\nCarrying\u00a0Value\nFair\u00a0Value\nLong-term debt, including amounts due within one year\n$\n38,166\n\n$\n36,777\n\n$\n35,999\n\n$\n33,790\n\nNote 8.\nTaxes\nThe components of income before income taxes are as follows:\n\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nU.S.\n$\n23,272\n\n$\n18,571\n\n$\n20,092\n\nNon-U.S.\n6,197\n\n7,738\n\n1,756\n\nTotal income before income taxes\n$\n29,469\n\n$\n26,309\n\n$\n21,848\n\nA summary of the provision for income taxes is as follows:\n\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nCurrent:\nU.S. federal\n$\n2,128\n\n$\n3,478\n\n$\n3,215\n\nU.S. state and local\n678\n\n886\n\n762\n\nNon-U.S.\n2,116\n\n2,451\n\n1,772\n\nTotal current tax provision\n4,922\n\n6,815\n\n5,749\n\nDeferred:\nU.S. federal\n2,010\n\n(\n214\n)\n(\n438\n)\nU.S. state and local\n294\n\n30\n\n141\n\nNon-U.S.\n(\n27\n)\n(\n479\n)\n126\n\nTotal deferred tax expense (benefit)\n2,277\n\n(\n663\n)\n(\n171\n)\nTotal provision for income taxes\n$\n7,199\n\n$\n6,152\n\n$\n5,578\n\nA summary of the cash paid for income taxes is as follows:\nFiscal Year Ended January 31,\n(Amounts in millions)\n2026\nCash taxes paid in total\n$\n5,364\n\nU.S. federal\n1,743\n\nU.S. state and local\n895\n\nNon-U.S.\n2,726\n\nCash taxes paid by jurisdiction\nU.S. federal\n1,743\n\nMexico\n1,285\n\nChina\n382\n\n70\nEffective Income Tax Rate Reconciliation\nA reconciliation of the significant differences between the U.S. statutory tax rate and the effective income tax rate on pre-tax income from continuing operations for fiscal year 2026 is as follows:\nFiscal Year Ended\nJanuary 31, 2026\nAmount\nPercent\nU.S. federal statutory tax rate\n$\n6,188\n\n21.0\n\n%\nState and local income tax, net of federal (national) income tax effect\n760\n\n2.6\n\n%\nForeign tax effects\nIndia\nChanges in valuation allowances\n461\n\n1.6\n\n%\nOther\n(\n93\n)\n(\n0.3\n)\n%\nLuxembourg\nChanges in valuation allowances\n(\n1,811\n)\n(\n6.1\n)\n%\nInternal reorganization\n1,814\n\n6.2\n\n%\nOther\n83\n\n0.3\n\n%\nOther foreign jurisdictions\n498\n\n1.7\n\n%\nEffect of cross-border tax laws\n400\n\n1.4\n\n%\nTax credits\nForeign tax credits\n(\n586\n)\n(\n2.0\n)\n%\nResearch and development tax credits\n(\n323\n)\n(\n1.1\n)\n%\nOther\n(\n167\n)\n(\n0.6\n)\n%\nChanges in valuation allowances\n374\n\n1.3\n\n%\nNontaxable or nondeductible items\nShare based compensation\n(\n373\n)\n(\n1.3\n)\n%\nInternal reorganization\n(\n349\n)\n(\n1.2\n)\n%\nOther\n132\n\n0.4\n\n%\nChanges in unrecognized tax benefits\n301\n\n1.0\n\n%\nOther adjustments\n(\n110\n)\n(\n0.5\n)\n%\nEffective income tax rate\n$\n7,199\n\n24.4\n\n%\nA reconciliation of the significant differences between the U.S. statutory tax rate and the effective income tax rate on pre-tax income from continuing operations for fiscal years 2025 and 2024 is as follows:\n\nFiscal Years Ended January 31,\n\n2025\n2024\nU.S. statutory tax rate\n21.0\n\n%\n21.0\n\n%\nU.S. state income taxes, net of federal income tax benefit\n2.8\n\n%\n3.0\n\n%\nIncome taxed outside the U.S.\n1.3\n\n%\n0.1\n\n%\nValuation allowance\n0.4\n\n%\n1.2\n\n%\nNet impact of repatriated international earnings\n(\n0.6\n)\n%\n(\n0.4\n)\n%\nFederal tax credits\n(\n1.4\n)\n%\n(\n1.5\n)\n%\nChange in unrecognized tax benefits\n0.3\n\n%\n0.6\n\n%\nOther, net\n(\n0.4\n)\n%\n1.5\n\n%\nEffective income tax rate\n23.4\n\n%\n25.5\n\n%\n71\nDeferred Taxes\nThe significant components of the Company's deferred tax account balances are as follows:\n\nJanuary 31,\n(Amounts in millions)\n2026\n2025\nDeferred tax assets:\nLoss and tax credit carryforwards\n$\n4,615\n\n$\n7,539\n\nAccrued liabilities\n3,504\n\n3,009\n\nLease obligations\n5,181\n\n4,611\n\nOther\n1,239\n\n1,339\n\nTotal deferred tax assets\n14,539\n\n16,498\n\nValuation allowances\n(\n4,421\n)\n(\n7,405\n)\nDeferred tax assets, net of valuation allowances\n10,118\n\n9,093\n\nDeferred tax liabilities:\nProperty and equipment\n6,122\n\n4,303\n\nAcquired intangibles\n1,066\n\n1,096\n\nInventory\n3,570\n\n3,336\n\nLease right of use assets\n5,345\n\n4,816\n\nOther\n1,373\n\n813\n\nTotal deferred tax liabilities\n17,476\n\n14,364\n\nNet deferred tax liabilities\n$\n7,358\n\n$\n5,271\n\nThe deferred taxes noted above are classified as follows in the Company's Consolidated Balance Sheets:\nJanuary 31,\n(Amounts in millions)\n2026\n2025\nBalance Sheet classification\nAssets:\nOther long-term assets\n$\n1,891\n\n$\n1,748\n\nLiabilities:\nDeferred income taxes and other\n9,249\n\n7,019\n\nNet deferred tax liabilities\n$\n7,358\n\n$\n5,271\n\nNet Operating Losses, Tax Credit Carryforwards and Valuation Allowances\nAs of January\u00a031, 2026, the Company's net operating loss and capital loss carryforwards totaled approximately $\n19.6\n billion. Of these carryforwards, approximately $\n13.1\n billion will expire, if not utilized, in various years through 2046. The remaining carryforwards have no expiration.\nThe realizability of these future tax deductions and credits is evaluated by assessing the adequacy of future expected taxable income from all sources, including taxable income in prior carryback years, reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. To the extent the Company does not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is generally established. To the extent that a valuation allowance was established and it is subsequently determined that it is more likely than not that the deferred tax assets will be recovered, the change in the valuation allowance is recognized in the Consolidated Statements of Income.\nThe Company had valuation allowances of approximately $\n4.4\n billion and $\n7.4\n billion as of January\u00a031, 2026 and 2025, respectively, on deferred tax assets associated primarily with the net operating loss carryforwards.\nUncertain Tax Positions\nThe benefits of uncertain tax positions are recorded in the Company's Consolidated Financial Statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities.\nAs of January\u00a031, 2026 and 2025, the amount of gross unrecognized tax benefits related to continuing operations was $\n2.4\n billion and $\n3.8\n billion, respectively. The amount of unrecognized tax benefits that would affect the Company's effective income tax rate was $\n2.0\n billion as of January\u00a031, 2026 and 2025.\n72\nA reconciliation of gross unrecognized tax benefits from continuing operations is as follows:\n\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nGross unrecognized tax benefits, beginning of year\n$\n3,757\n\n$\n3,540\n\n$\n3,307\n\nIncreases related to prior year tax positions\n342\n\n445\n\n336\n\nDecreases related to prior year tax positions\n(\n1,360\n)\n(\n228\n)\n(\n74\n)\nIncreases related to current year tax positions\n94\n\n93\n\n102\n\nSettlements during the period\n(\n328\n)\n(\n77\n)\n(\n102\n)\nLapse in statutes of limitations\n(\n65\n)\n(\n16\n)\n(\n29\n)\nGross unrecognized tax benefits, end of year\n$\n2,440\n\n$\n3,757\n\n$\n3,540\n\nThe Company classifies interest and penalties related to uncertain tax benefits as interest expense and as operating, selling, general and administrative expenses, respectively. Interest expense and penalties related to these positions were immaterial for fiscal 2026, 2025 and 2024.\nThe Company remains subject to income tax examinations for its U.S. federal income taxes generally for fiscal 2018 through 2025. The Company also remains subject to income tax examinations for international income taxes for fiscal 2015 through 2025, and for U.S. state and local income taxes generally for the fiscal years ended 2018 through 2025. With few exceptions, the Company is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before fiscal 2015.\nOther Taxes\nThe Company is subject to tax examinations for value added, sales-based, payroll and other non-income taxes. A number of these examinations are ongoing in various jurisdictions. In certain cases, the Company has received assessments and judgments from the respective taxing authorities in connection with these examinations. Unless otherwise indicated, the possible losses or range of possible losses associated with these matters are individually immaterial, but a group of related matters, if decided adversely to the Company, could result in a liability material to the Company's Consolidated Financial Statements.\nNote 9.\nContingencies\nLegal Proceedings\nThe Company is involved in a number of legal proceedings and certain regulatory matters. The Company records a liability for those legal proceedings and regulatory matters when it determines it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses when it is reasonably possible that a material loss may be incurred. From time to time, the Company may enter into discussions regarding settlement of these matters, and may enter into settlement agreements, if it believes settlement is in the best interest of the Company and its shareholders.\nUnless stated otherwise, the matters discussed below, if decided adversely to or settled by the Company, individually or in the aggregate, may result in a liability material to the Company's financial position, results of operations or cash flows. The Company can provide no assurance as to the scope and outcome of these matters and cannot reasonably estimate any loss or range of loss, beyond the amounts accrued, if any, that may arise from these matters.\nSettlement of Certain Opioid-Related Matters\nThe Company entered into settlement agreements with all\n50\n states, the District of Columbia, Puerto Rico,\nthree\n U.S. territories, and the vast majority of eligible political subdivisions and federally recognized Native American tribes to resolve opioid-related claims against the Company. In fiscal year 2023, the Company accrued\u202fa liability of approximately $\n3.3\n\u00a0billion for these settlements, which included amounts for remediation of alleged harms, attorneys' fees, and costs. As of January 31, 2025, all of the accrued liability had been paid.\nOngoing Opioid-Related Litigation\nThe Company will continue to vigorously defend against any opioid-related matters not settled or otherwise resolved, including, but not limited to, each of the matters described below; any other actions filed by healthcare providers, individuals, and third-party payers; and any action filed by a political subdivision or Native American tribe that elected not to join the settlement described above. Accordingly, the Company has not accrued a liability for these opioid-related matters nor can the Company reasonably estimate any loss or range of loss that may arise from these matters. The Company can provide no assurance as to the scope and outcome of any of the opioid-related matters and no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.\n73\nOpioid Multidistrict Litigation; Other Opioid-Related Matters in the U.S. and Canada\n. In December 2017, the United States Judicial Panel on Multidistrict Litigation consolidated numerous lawsuits filed against a wide array of defendants by various plaintiffs, including counties, cities, healthcare providers, Native American tribes, individuals and third-party payers, asserting claims generally concerning the impacts of widespread opioid abuse. The consolidated multidistrict litigation is entitled\nIn re National Prescription Opiate Litigation\n(MDL No. 2804) (the \"MDL\") and is pending in the U.S. District Court for the Northern District of Ohio (the \"MDL Court\"). The Company is named as a defendant in some cases included in the MDL.\nSeveral opioid-related cases against the Company remain pending in the MDL and in state and federal courts. The plaintiffs include healthcare providers, third-party payers, individuals and others and seek compensatory and punitive damages and injunctive relief, including abatement.\nFour\n cases brought by third-party payers and\none\n case brought by a hospital system have been selected as bellwether cases to proceed through discovery in the MDL, and the MDL Court may designate additional bellwether cases in the future. The\nFlorida Health Sciences Center\ncase pending in state court in Florida asserts claims on behalf of several hospital systems against the Company and other defendants. A jury trial in this matter commenced on September 18, 2025 and ended on December 8, 2025, at which time the Court declared a mistrial. The Court has scheduled retrial to commence on August 27, 2026.\nThe Company has been responding to subpoenas, information requests, and investigations from governmental entities related to nationwide controlled substance dispensing and distribution practices involving opioids.\nWal-Mart Canada Corp. and certain other subsidiaries of the Company have been named as defendants in\ntwo\n putative class action complaints filed in Canada related to distribution practices involving opioids. These matters remain pending.\nDepartment of Justice Opioid Civil Litigation.\nOn December 22, 2020, the U.S. Department of Justice (the \"DOJ\") filed a civil complaint in the U.S. District Court for the District of Delaware alleging that the Company unlawfully dispensed controlled substances from its pharmacies and unlawfully distributed controlled substances to those pharmacies. The complaint alleges that this conduct resulted in violations of the Controlled Substances Act. The DOJ is seeking civil penalties and injunctive relief. On March 11, 2024, the Court granted in-part Walmart's motion to dismiss by dismissing the entirety of the DOJ's claims related to distribution and dismissing the DOJ's claims arising under one of the DOJ's two dispensing liability theories. The DOJ's claims arising under its other dispensing liability theory remain pending. Trial is scheduled for November 2027.\nFalse Claims Act Litigation.\n\nOn August 23, 2019, a qui tam action was filed in the U.S. District Court for the District of New Mexico. The action was partially unsealed on April 30, 2024 after the federal government declined to intervene. The DOJ informed the Company of its decision not to intervene on June 20, 2024. On July 25, 2024, the Court transferred the litigation to the U.S. District Court for the District of Delaware. On January 9, 2025, the plaintiffs filed a third amended complaint on behalf of\ntwo\n former pharmacists of the Company as relators that alleges the Company violated the Controlled Substances Act and state pharmacy regulations and that such conduct constitutes violations of the federal False Claims Act. The Company has filed a renewed motion to dismiss that is currently pending with the Court.\nOther Legal Proceedings\nAsda Equal Value Claims.\nAsda, formerly a subsidiary of the Company, is a defendant in certain equal value claims that began in 2008 and are proceeding in the United Kingdom before an Employment Tribunal in Manchester and before the High Court. Claims have been brought by approximately\n73,000\n current and former Asda store employees who allege their work is of equal value to the work done by employees in Asda's distribution centers and that the difference in pay and conditions between the different jobs is not objectively justified. Additional employees may assert claims in the future. The High Court claims are stayed pending the determination of a cohort of claims brought in the Employment Tribunal. The legal proceedings to consider these equal value claims are in\nthree\n phases, and the first\ntwo\n phases are complete. On January 31, 2025 and February 25, 2026, the Employment Tribunal issued rulings that certain of the claims are permitted to advance to the third phase. The hearing on the third phase is scheduled to begin on November 23, 2026. There are factual and legal defenses to the equal value claims, and the Company intends to vigorously defend them. Subsequent to the divestiture of Asda in February 2021, the Company continues to oversee the conduct of the defense of these claims. While potential liability for these claims remains with Asda, the Company has agreed to provide indemnification with respect to certain of these claims up to a contractually determined amount. The Company cannot predict the number of such claims that may ultimately be filed and cannot reasonably estimate any loss or range of loss that may arise related to these proceedings. Accordingly, the Company can provide no assurance as to the scope and outcome of these matters.\nMoney Transfer Agent Services Matter.\nThe Company has responded to grand jury subpoenas issued by the United States Attorney's Office for the Middle District of Pennsylvania on behalf of the DOJ seeking documents regarding the Company's consumer fraud prevention program and anti-money laundering compliance related to the Company's money transfer services, where Walmart is an agent. The most recent subpoena was issued in August 2020. Walmart's responses to DOJ's subpoenas have been complete since 2021. While it has cooperated with the DOJ's review, the Company intends to vigorously defend this matter should the DOJ decide to pursue it further. The Company can provide no assurance as to the scope and outcome of this matter and cannot reasonably estimate any loss or range of loss that may arise. Accordingly, the Company can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.\n74\nDriver Platform Matters.\nThe Company, the Federal Trade Commission (\"FTC\") and certain states have reached a settlement regarding investigations into payment and operational practices of its Spark Driver platform pursuant to a stipulated order entered on March 3, 2026. Pursuant to the settlement and without admitting liability, the Company agreed to entry of a judgment of $\n100\n\u00a0million and to maintain certain programmatic practices and reporting obligations for a period of\n10\n years. Approximately $\n63\n\u00a0million of the judgment was suspended, pursuant to the terms of the stipulated order (reflecting amounts that have already been paid to drivers and other considerations reflected in the settlement), and the Company accrued the remainder of approximately $\n37\n\u00a0million as of January 31, 2026. The Company continues discussions regarding these matters with certain other state representatives.\nThe Company has also been responding to subpoenas, information requests and investigations from governmental entities with respect to the payment of drivers, independent contractor classification of drivers and certain operational issues regarding its Spark Driver platform. The Company is defending putative representative action civil litigation relating to driver classification and defending other civil litigation and arbitration claims in connection with the platform. The Company intends to vigorously defend itself in these matters. However, the Company can provide no assurance as to the scope and outcome of these matters and cannot reasonably estimate any loss or range of loss that may arise. Accordingly, the Company can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.\nMexico Antitrust Matter.\nOn October 6, 2023, the Comisi\u00f3n Federal de Competencia Econ\u00f3mica of M\u00e9xico (\"COFECE\") notified the main Mexican operating subsidiary of Wal-Mart de M\u00e9xico, S.A.B. de C.V. (\"Walmex\"), a majority owned subsidiary of the Company, that COFECE's Investigatory Authority (\"IA\") had recommended the initiation of a quasi-judicial administrative process against Walmex's subsidiary for alleged relative monopolistic practices in connection with the supply and wholesale distribution of certain consumer goods, retail marketing practices of such consumer goods and related services. On December 12, 2024, after Walmex provided defenses, produced expert evidence and participated in a hearing, COFECE issued a split decision that Walmex's subsidiary had engaged in a single relative monopolistic practice in relation to the negotiation of\ntwo\n types of contributions with its suppliers. The resolution imposed a monetary penalty on Walmex's subsidiary in the amount of $\n93.4\n million pesos (approximately $\n5\n\u00a0million U.S. dollars) and certain non-structural conduct measures relating to the\ntwo\n prohibited types of supplier contributions (while recognizing that other supplier contributions can continue). On January 6, 2025, Walmex's subsidiary challenged COFECE's resolution through an appeal in the specialized federal courts. Until the appeal is resolved, Walmex's subsidiary will operate in compliance with COFECE's ruling. Payment of the monetary penalty is stayed until the lawsuit is resolved.\nForeign Direct Investment Matters.\n\nIn July 2021, the Directorate of Enforcement in India issued a show cause notice to Flipkart Private Limited and one of its subsidiaries (\"Flipkart\"), and to unrelated companies and individuals, including certain current and former shareholders and directors of Flipkart. The notice requests the recipients to show cause as to why further proceedings under India's Foreign Direct Investment rules and regulations (the \"Rules\") should not be initiated against them based on alleged violations during the period from 2009 to 2015, prior to the Company's acquisition of a majority stake in Flipkart in 2018 (the \"Notice\"). In addition, there have been more recent requests for information from the Directorate of Enforcement to Flipkart for periods prior and subsequent to April 2016 regarding the Rules, including the most recent request in April 2025 (the \"Requests\"), to which Flipkart has been responding. The Notice is an initial stage of proceedings under the Rules which could, depending upon the conclusions at the end of the initial stage, lead to a hearing to consider the merits of the allegations described in the Notice. If a hearing on the merits is initiated, whether with respect to the Notice or pursuant to any further proceedings related to the Requests, and if it is determined that violations of the Rules occurred, then the regulatory authority has the authority to impose monetary and/or non-monetary relief, such as share ownership restrictions. Flipkart has been responding to the Notice and, if the matter progresses to a consideration of the merits of the allegations described in the Notice, Flipkart intends to defend against the allegations vigorously. Due to the fact that the process regarding the Notice is in the early stages, the Company is unable to predict whether the Notice will lead to a hearing on the merits or, if it does, the final outcome of the resulting proceedings, as well as whether any further proceedings will arise with respect to the Requests. The Company cannot reasonably estimate any loss or range of loss that may arise from these matters and can provide no assurance as to the scope or outcome of any proceeding that might result from the Notice or the Requests, or the amount of the proceeds the Company may receive in indemnification from individuals and entities that sold shares to the Company under the 2018 agreement for the period prior to the date the Company acquired its majority stake in Flipkart, and further can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.\nIndia Antitrust Matter.\nOn January 13, 2020, the Competition Commission of India (\"CCI\") ordered its Director General (the \"DG\") to investigate certain matters alleging competition law violations by certain subsidiaries of Flipkart in India and other parties. On September 13, 2024, those subsidiaries received a non-confidential version of the DG's Investigation Report (the \"Report\"), alleging certain competition law violations. CCI is not bound by the Report, and will conduct its independent analysis of the allegations, including hearing objections from the subsidiaries and other parties before issuing its final order in the matter, which could include monetary and non-monetary relief. CCI's final order would also be subject to appropriate appellate proceedings. The Company can provide no assurance as to the scope and outcome of this matter, cannot reasonably estimate any loss or range of loss that may arise, and can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.\n75\nNote 10.\nRetirement-Related Benefits\nThe Company offers a 401(k) plan for associates in the U.S. under which eligible associates can begin contributing to the plan immediately upon hire. The Company also offers a 401(k) type plan for associates in Puerto Rico under which associates can begin to contribute generally after\none year\n of employment. Under these plans, after\none year\n of employment, the Company matches\n100\n% of participant contributions up to\n6\n% of annual eligible earnings. The matching contributions immediately vest at\n100\n% for each associate. Participants can contribute up to\n50\n% of their pre-tax earnings, but not more than the statutory limits.\nAssociates in international countries who are not U.S. citizens are covered by various defined contribution post-employment benefit arrangements. These plans are administered based upon the legislative and tax requirements in the countries in which they are established.\nThe following table summarizes the contribution expense related to the Company's defined contribution plans for fiscal 2026, 2025 and 2024:\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nDefined contribution plans:\nU.S.\n$\n1,810\n\n$\n1,751\n\n$\n1,528\n\nInternational\n86\n\n78\n\n85\n\nTotal contribution expense for defined contribution plans\n$\n1,896\n\n$\n1,829\n\n$\n1,613\n\nNote 11.\nSegments and Disaggregated Revenue\nSegments\nThe Company is engaged in the operation of retail and wholesale stores and clubs, as well as eCommerce websites and mobile applications, located throughout the U.S., Africa, Canada, Central America, Chile, China, India and Mexico. The Company's operations are conducted in\nthree\n reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. The Company defines its segments as those operations whose results the chief operating decision maker (\"CODM\"), the Company's Chief Executive Officer, regularly reviews to analyze performance and allocate resources. The Company sells similar individual products and services in each of its segments. It is impractical to segregate and identify revenues for each of these individual products and services.\nThe Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce, which includes omnichannel initiatives and certain other business offerings such as advertising services. The Walmart International segment consists of the Company's operations outside of the U.S., as well as eCommerce and omnichannel initiatives. The Sam's Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omnichannel initiatives. Corporate and support consists of corporate overhead and other items not allocated to any of the Company's segments. The operating results of each reportable segment, including the mix of cost of sales and operating, selling, general and administrative expenses, are not directly comparable due to differences in business model, format and channel mix. Additionally, the operating results of each reportable segment may not be comparable to those of other retailers, as discussed in\nNote 1\n.\n76\nThe Company measures the profit or loss of its segments using operating income. The CODM uses operating income to allocate resources across the reportable segments as part of the Company's long-range and annual planning processes, and to evaluate planned versus actual results when assessing segment operating performance. From time to time, the Company may revise the measurement of each segment's operating income, including any corporate overhead allocations, and presentation of significant segment expenses, as determined by the information regularly reviewed by its CODM.\nInformation for the Company's segments, as well as for Corporate and support, including the reconciliation to income before income taxes, is provided as follows:\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nWalmart U.S.\nNet sales\n$\n482,975\n\n$\n462,415\n\n$\n441,817\n\nMembership and other income\n2,624\n\n2,594\n\n1,985\n\nTotal revenues\n485,599\n\n465,009\n\n443,802\n\nCost of sales\n350,360\n\n336,451\n\n323,563\n\nOperating, selling, general and administrative expenses\n110,081\n\n104,676\n\n98,085\n\nOperating income\n$\n25,158\n\n$\n23,882\n\n$\n22,154\n\nWalmart International\nNet sales\n$\n130,423\n\n$\n121,885\n\n$\n114,641\n\nMembership and other income\n1,565\n\n1,478\n\n1,408\n\nTotal revenues\n131,988\n\n123,363\n\n116,049\n\nCost of sales\n102,576\n\n95,267\n\n89,831\n\nOperating, selling, general and administrative expenses\n24,309\n\n22,595\n\n21,309\n\nOperating income\n$\n5,103\n\n$\n5,501\n\n$\n4,909\n\nSam's Club U.S.\n(1)\nNet sales\n$\n93,015\n\n$\n90,238\n\n$\n86,179\n\nMembership and other income\n2,525\n\n2,323\n\n2,051\n\nTotal revenues\n95,540\n\n92,561\n\n88,230\n\nCost of sales\n82,459\n\n80,035\n\n76,748\n\nOperating, selling, general and administrative expenses\n10,639\n\n10,122\n\n9,290\n\nOperating income\n$\n2,442\n\n$\n2,404\n\n$\n2,192\n\nCorporate and support\nMembership and other income\n(2)\n$\n36\n\n$\n52\n\n$\n44\n\nOperating, selling, general and administrative expenses\n2,914\n\n2,491\n\n2,287\n\nOperating loss\n$\n(\n2,878\n)\n$\n(\n2,439\n)\n$\n(\n2,243\n)\nConsolidated\nNet sales\n$\n706,413\n\n$\n674,538\n\n$\n642,637\n\nMembership and other income\n6,750\n\n6,447\n\n5,488\n\nTotal revenues\n713,163\n\n680,985\n\n648,125\n\nCost of sales\n535,395\n\n511,753\n\n490,142\n\nOperating, selling, general and administrative expenses\n147,943\n\n139,884\n\n130,971\n\nOperating income\n29,825\n\n29,348\n\n27,012\n\nInterest, net\n2,431\n\n2,245\n\n2,137\n\nOther (gains) and losses\n(\n2,075\n)\n794\n\n3,027\n\nIncome before income taxes\n$\n29,469\n\n$\n26,309\n\n$\n21,848\n\n(1)\nTotal fuel-related expenses for Sam's Club U.S. were $\n8.7\n billion, $\n9.9\n billion, and $\n10.6\n billion in fiscal 2026, fiscal 2025, and fiscal 2024, respectively.\n(2)\nIncludes other income from corporate campus facilities.\n77\nTotal assets, depreciation and amortization, and capital expenditures for the Company's segments, as well as for Corporate and support, are as follows:\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nWalmart U.S.\nTotal assets\n$\n165,627\n\n$\n150,006\n\n$\n137,782\n\nDepreciation and amortization\n9,390\n\n8,549\n\n7,671\n\nCapital expenditures\n20,157\n\n16,466\n\n13,877\n\nWalmart International\nTotal assets\n$\n86,093\n\n$\n80,016\n\n$\n86,136\n\nDepreciation and amortization\n2,304\n\n2,260\n\n2,159\n\nCapital expenditures\n3,197\n\n3,178\n\n2,911\n\nSam's Club U.S.\nTotal assets\n$\n17,186\n\n$\n16,862\n\n$\n15,682\n\nDepreciation and amortization\n782\n\n706\n\n642\n\nCapital expenditures\n914\n\n1,212\n\n1,041\n\nCorporate and support\nTotal assets\n$\n15,762\n\n$\n13,939\n\n$\n12,799\n\nDepreciation and amortization\n1,727\n\n1,458\n\n1,381\n\nCapital expenditures\n2,374\n\n2,927\n\n2,777\n\nConsolidated\nTotal assets\n$\n284,668\n\n$\n260,823\n\n$\n252,399\n\nDepreciation and amortization\n14,203\n\n12,973\n\n11,853\n\nCapital expenditures\n26,642\n\n23,783\n\n20,606\n\nTotal revenues and long-lived assets, consisting primarily of net property and equipment and lease right-of-use assets, aggregated by the Company's U.S. and non-U.S. operations, are as follows:\nFiscal Years Ended January 31,\n(Amounts in millions)\n2026\n2025\n2024\nRevenues\nU.S. operations\n$\n581,175\n\n$\n557,622\n\n$\n532,076\n\nNon-U.S. operations\n131,988\n\n123,363\n\n116,049\n\nTotal revenues\n$\n713,163\n\n$\n680,985\n\n$\n648,125\n\nLong-lived assets\nU.S. operations\n$\n128,366\n\n$\n115,250\n\n$\n104,480\n\nNon-U.S. operations\n28,590\n\n24,455\n\n25,858\n\nTotal long-lived assets\n$\n156,956\n\n$\n139,705\n\n$\n130,338\n\nNo individual country outside of the U.S. had total revenues or long-lived assets that were material to the consolidated totals. Additionally, the Company did not generate material revenues from any single customer.\nDisaggregated Revenues\nIn the following tables, segment net sales are disaggregated by either merchandise category or market. In addition, net sales related to eCommerce are provided for each segment. Net sales related to eCommerce include omnichannel sales where a customer initiates an order digitally and the order is fulfilled through a store or club, as well as net sales from other business offerings that are part of the Company's ecosystem such as certain advertising arrangements, fulfillment services, and data insights. From time to time, the Company revises the assignment of net sales of a particular item to a merchandise category. When the assignment changes, previous period amounts are reclassified to be comparable to the current period's presentation.\n(Amounts in millions)\nFiscal Years Ended January 31,\nWalmart U.S. net sales by merchandise category\n2026\n2025\n2024\nGrocery\n$\n285,482\n\n$\n276,003\n\n$\n264,210\n\nGeneral merchandise\n115,060\n\n113,921\n\n113,985\n\nHealth and wellness\n69,547\n\n62,092\n\n54,898\n\nOther\n12,886\n\n10,399\n\n8,724\n\nTotal\n$\n482,975\n\n$\n462,415\n\n$\n441,817\n\nOf Walmart U.S.'s total net sales, approximately $\n99.6\n billion, $\n79.3\n billion and $\n65.4\n billion related to eCommerce for fiscal 2026, 2025 and 2024, respectively.\n78\n(Amounts in millions)\nFiscal Years Ended January 31,\nWalmart International net sales by market\n2026\n2025\n2024\nMexico and Central America\n$\n52,492\n\n$\n51,970\n\n$\n49,726\n\nChina\n24,623\n\n19,975\n\n17,011\n\nCanada\n23,724\n\n23,035\n\n22,639\n\nOther\n29,584\n\n26,905\n\n25,265\n\nTotal\n$\n130,423\n\n$\n121,885\n\n$\n114,641\n\nOf Walmart International's total net sales, approximately $\n35.8\n billion, $\n29.5\n billion and $\n24.8\n billion related to eCommerce for fiscal 2026, 2025 and 2024, respectively.\n(Amounts in millions)\nFiscal Years Ended January 31,\nSam's Club U.S. net sales by merchandise category\n2026\n2025\n2024\nGrocery\n$\n64,706\n\n$\n61,253\n\n$\n57,565\n\nFuel and other\n11,570\n\n12,960\n\n13,707\n\nGeneral merchandise\n11,549\n\n11,215\n\n10,947\n\nHealth and wellness\n5,190\n\n4,810\n\n3,960\n\nTotal\n$\n93,015\n\n$\n90,238\n\n$\n86,179\n\nOf Sam's Club U.S.'s total net sales, approximately $\n15.0\n billion, $\n12.1\n billion and $\n9.9\n billion related to eCommerce for fiscal 2026, 2025 and 2024, respectively.\n\nNote 12.\nSubsequent Event\nDividends Declared\nThe Company approved, effective February\u00a019, 2026, the fiscal 2027 annual dividend of $\n0.99\n per share, an increase over the fiscal 2026 dividend of $\n0.94\n per share.\nFor fiscal 2027, the annual dividend will be paid in four quarterly installments of $\n0.2475\n per share, according to the following record and payable dates:\nRecord Date\n\nPayable Date\nMarch 20, 2026\n\nApril 6, 2026\nMay 8, 2026\n\nMay 26, 2026\nAugust 21, 2026\n\nSeptember 8, 2026\nDecember 11, 2026\n\nJanuary 4, 2027\n79\nITEM\u00a09.\nCHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE\nNone.\nITEM\u00a09A.\nCONTROLS AND PROCEDURES\nEvaluation of Disclosure Controls and Procedures\nWe maintain disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be timely disclosed, is accumulated and communicated to management in a timely fashion. In designing and evaluating such controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management is necessarily required to use judgment in evaluating controls and procedures. Also, we have investments in unconsolidated entities. Since we do not control or manage those entities, our controls and procedures with respect to those entities are substantially more limited than those we maintain with respect to our consolidated subsidiaries.\nIn the ordinary course of business, we review our internal control over financial reporting and make changes to our systems and processes to improve such controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, updating existing systems, automating manual processes, standardizing controls globally, migrating certain processes to our shared services organizations and increasing monitoring controls.\nWe are continuing to upgrade our financial systems globally, and modernize functions across the business which\n will impact our internal control over financial reporting.\nAn evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of January\u00a031, 2026 was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms.\nReport on Internal Control Over Financial Reporting\nManagement has responsibility for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Management has assessed the effectiveness of the Company's internal control over financial reporting as of January\u00a031, 2026. In making its assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations (\"COSO\") of the Treadway Commission in Internal Control-Integrated Framework (2013). Management concluded that based on its assessment, Walmart's internal control over financial reporting was effective as of January\u00a031, 2026. The Company's internal control over financial reporting as of January\u00a031, 2026, has been audited by Ernst\u00a0& Young LLP as stated in their report which appears herein.\nChanges in Internal Control Over Financial Reporting\nThere have been no changes in the Company's internal control over financial reporting as of January\u00a031, 2026, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.\n80\nITEM\u00a09B.\nOTHER INFORMATION\nSecurity Trading Plans\n of Directors and Executive Officers\nOn\nDecember 24, 2025\n,\nChris Nicholas\n,\nExecutive Vice President, President and Chief Executive Officer\n, Walmart International,\nentered into a stock trading plan\n designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934. Under the terms of the plan, Mr. Nicholas will sell an aggregate\n34,800\n shares of common stock in trades scheduled from April 2026 through March 2027. The plan will terminate in\nMarch 2027\n.\nDisclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934\nSection 13(r) of the Exchange Act, requires an issuer to disclose certain information in its periodic reports if it or any of its affiliates knowingly engaged in certain activities, transactions or dealings with individuals or entities subject to specific U.S. economic sanctions during the reporting period.\nThe information provided pursuant to Section 13(r) of the Exchange Act in Part II, Item 5 Other Information of the Company's Quarterly Reports on Form 10-Q for the quarters ended\nJuly 31, 2025\n and\nOctober 31, 2025\n, is incorporated herein by reference.\nITEM\u00a09C.\nDISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS\nNot applicable.\n81\nPART III\nITEM\u00a010.\nDIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE\nPlease see the information concerning our executive officers contained in \"\nItem 1. Business\n\" herein under the caption \"Information About Our Executive Officers,\" which is included in accordance with the Instruction to Item\u00a0401 of the SEC's Regulation S-K.\nInformation required by this Item 10 with respect to the Company's directors and certain family relationships is incorporated by reference to such information under the caption \"Proposal No. 1 \u2013 Election of Directors\"\u00a0included in our Proxy Statement relating to our 2026 Annual Meeting of Shareholders (our \"Proxy Statement\").\nNo material changes have been made to the procedures by which shareholders of the Company may recommend nominees to our Board of Directors since those procedures were disclosed in our proxy statement relating to our 2025 Annual Shareholders' Meeting as previously filed with the SEC.\nThe information regarding our Audit Committee, including our audit committee financial experts, our Reporting Protocols for Senior Financial Officers and our Code of Conduct applicable to all of our associates, including our Chief Executive Officer, Chief Financial Officer and our Controller, who is our principal accounting officer, required by this Item 10 is incorporated herein by reference to the information under the captions \"Corporate Governance\" and \"Proposal No. 2: Ratification of Independent Accountants\"\u00a0included in our Proxy Statement. \"\nItem 1. Business\n\" above contains information relating to the availability of a copy of our Reporting Protocols for Senior Financial Officers and our Code of Conduct and the posting of amendments to and any waivers of the Reporting Protocols for Senior Financial Officers and our Code of Conduct on our website.\nThe Company has an\ninsider trading policy\n (\"Insider Trading Policy\") that governs the purchase, sale and other dispositions of Walmart securities by its directors, officers, associates and the Company itself. The Insider Trading Policy states, among other things, that our directors, officers and associates are prohibited from trading in such securities while in possession of material, nonpublic information. The Company is also prohibited from trading in Walmart securities while in possession of material, nonpublic information related to the Company unless such trading activity complies with all applicable securities laws. The Company believes the Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and any applicable Nasdaq listing standards. The foregoing summary of our Insider Trading Policy does not purport to be complete and is qualified by reference to the Insider Trading Policy filed as Exhibit 19 to this Annual Report on Form 10-K.\nITEM\u00a011.\nEXECUTIVE COMPENSATION\nThe information required by this Item 11 is incorporated herein by reference to the information under the captions \"Corporate Governance \u2013 Director Compensation\" and \"Executive Compensation\" included in our Proxy Statement.\nITEM\u00a012.\nSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS\nThe information required by this Item 12 is incorporated herein by reference to the information that appears under the caption \"Stock Ownership\" included in our Proxy Statement.\nITEM\u00a013.\nCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE\nThe information required by this Item 13 is incorporated herein by reference to\u00a0the information under the caption \"Corporate Governance \u2013 Board Processes and Practices\"\u00a0included in our Proxy Statement.\nITEM\u00a014.\nPRINCIPAL ACCOUNTING FEES AND SERVICES\nThe information required by this Item 14 is incorporated herein by reference to the information under the caption \"Proposal No. 2 \u2013 Ratification of Independent Accountants\" included in our Proxy Statement.\n82\nPART IV\nITEM\u00a015.\nEXHIBITS, FINANCIAL STATEMENT SCHEDULES\n(a) \u00a0\u00a0\u00a0\u00a0Documents filed as part of this report are as follows:\n1.\nFinancial Statements: See the Financial Statements in \"\nItem 8. Financial Statements and Supplementary Data\n.\"\n2.\nFinancial Statement Schedules:\nCertain schedules have been omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the Consolidated Financial Statements, including the notes thereto.\n3.\nExhibits:\nSee exhibits listed under part (b) below.\n(b)\u00a0\u00a0\u00a0\u00a0The required exhibits are filed as part of this Form 10-K or are incorporated by reference herein.\n(1)\n\n3.1(a)\nRestated Certificate of Incorporation of the Company dated February 1, 2018 is incorporated herein by reference to Exhibit 3.1 to the Report on Form 8-K filed by the Company on February 1, 2018\n3.1(b)\nCertificate of Amendment to the Restated Certificate of Incorporation of the Company, effective February 23, 2024 is incorporated herein by reference to Exhibit 3.1 to the Report on Form 8-K filed by the Company on February 23, 2024\n3.2\nAmended and Restated Bylaws of the Company dated November 10, 2022 are incorporated herein by reference to Exhibit 3.1 to the Report on Form 8-K filed by the Company on November 16, 2022\n4.1\nIndenture dated as of April 1, 1991, between the Company and J.P. Morgan Trust Company, National Association, as successor trustee to Bank One Trust Company, NA, as successor trustee to The First National Bank of Chicago, Trustee, is incorporated herein by reference to Exhibit 4(a) to Registration Statement on Form S-3 (File Number 33-51344)\n(P)\n4.2\nFirst Supplemental Indenture dated as of September 9, 1992, to the Indenture dated as of April 1, 1991, between the Company and J.P. Morgan Trust Company, National Association, as successor trustee to Bank One Trust Company, NA, as successor trustee to The First National Bank of Chicago, Trustee, is incorporated herein by reference to Exhibit 4(b) to Registration Statement on Form S-3 (File Number 33-51344)\n(P)\n4.3\nIndenture dated as of December 11, 2002, between the Company and J.P. Morgan Trust Company, National Association, as successor trustee to Bank One Trust Company, NA, is incorporated by reference to Exhibit 4.5 to Registration Statement on Form S-3 (File Number 333-101847)\n4.4\nIndenture dated as of July\u00a019, 2005, between the Company and J.P. Morgan Trust Company, National Association is incorporated by reference to Exhibit 4.5 to Registration Statement on Form S-3 (File Number 333-126512)\n4.5\nFirst Supplemental Indenture, dated December 1, 2006, between the Company and The Bank of New York Trust Company, N.A., as successor-in-interest to J.P. Morgan Trust Company, National Association, as Trustee, under the Indenture, dated as of July 19, 2005, between the Company and J.P. Morgan Trust Company, National Association, as Trustee, is incorporated herein by reference to Exhibit 4.6 to Post-Effective Amendment No. 1 to Registration Statement on Form S-3 (File Number 333-130569)\n4.6\nSecond Supplemental Indenture, dated December 19, 2014, between the Company and The Bank of New York Trust Company, N.A., as successor-in-interest to J.P. Morgan Trust Company, National Association, as Trustee, under the Indenture, dated as of July 19, 2005, between the Company and J.P. Morgan Trust Company, National Association, as Trustee, is incorporated herein by reference to Exhibit 4.3 to Registration Statement on Form S-3 (File Number 333-201074)\n4.7\nThird Supplemental Indenture, dated June 26, 2018, between the Company and The Bank of New York Trust Company, N.A., as successor-in-interest to J.P. Morgan Trust Company, National Association, as Trustee, under the Indenture, dated as of July 19, 2005, between the Company and J.P. Morgan Trust Company, National Association, as Trustee, is incorporated herein by reference to Exhibit 4(S) to Current Report on Form 8-K filed on June 26, 2018\n4.8*\nDescription of Registrant's Securities\n83\n10.1\nWalmart Inc. Deferred Compensation Matching Plan, as amended and restated effective November 8, 2023 is incorporated by reference to Exhibit 10.1 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2024 filed on March 15, 2024\n\n(C)\n10.2\nWalmart Inc. Management Incentive Plan, as amended effective February 1, 2018 is incorporated by reference to Exhibit 10(b) to the Annual Report on Form 10-K of the Company for the fiscal year ended January 31, 2018, filed on March 30, 2018\n (C)\n10.3*\nWalmart Inc. 2016 Associate Stock Purchase Plan, as amended effective February\n4\n,\n202\n6\n\n(C)\n10.4\nWalmart Inc. Stock Incentive Plan of 2015, as amended effective February 1, 2018 is incorporated by reference to Exhibit 10(d) to the Annual Report on Form 10-K of the Company for the fiscal year ended January 31, 2018, filed on March 30, 2018\n (C)\n10.5\nWalmart Inc. Supplemental Executive Retirement Plan, as amended and restated effective February 1, 2023 is incorporated by reference to Exhibit 10.5 to the Annual Report on Form 10-K of the Company for the fiscal year ended January 31, 2023 filed on March 17, 2023\n\n(C)\n10.6\nWalmart Inc. Stock Incentive Plan of\n202\n5\n is incorpo\nrated by reference to Exhibit 4.1 to the Registration Statement on Form S-8 filed Decem\nber 18,\n2025\n\n(C)\n10.7*\nWalmart Inc. Director Compensation Deferral Plan, as amended effective February 1, 2018\n\n(C)\n10.8\nForm of Post-Termination Agreement and Covenant Not to Compete with attached Schedule of Executive Officers who have executed a Post-Termination Agreement and Covenant Not to Compete is incorporated by reference to Exhibit 10(p) to the Annual Report on Form 10-K of the Company for the fiscal year ended January 31, 2011, filed on March 30, 2011\n\n(C)\n10.8(a)*\nAmended Schedule of Executive Officers who have executed a Post-Termination Agreement and Covenant Not to Compete in the form filed as Exhibit 10(p) to the Annual Report on Form 10-K of the Company for the fiscal year ended January 31, 2011\n\n(C)\n10.9\nForm of Walmart Inc. Stock Incentive Plan of 2015 Restricted Stock Notification of Award and Terms and Conditions of Award is incorporated by reference to Exhibit 10.8 to the Annual Report on Form 10-K of the Company for the fiscal year ended January 31, 2022, filed March 18, 2022\n\n(C)\n10.10\nForm of Walmart Inc. Stock Incentive Plan of 2015 Global Share-Settled Performance-Based Restricted Stock Unit Notification and Terms and Conditions is incorporated by reference to Exhibit 10.9 to the Annual Report on Form 10-K of the Company for the fiscal year ended January 31, 2022, filed on March 18, 2022\n\n(C)\n10.11\nForm of Walmart Inc. Stock Incentive Plan of 2025 Global Restricted Stock Notification of Award and Terms and Conditions of Award\nis\nincorporated by reference to Exhibit 10.2 of the\n Quarterly Report on Form 10-Q\n of the Company for the quarter ended October 31, 2025\n, filed on December 3, 2025\n\n(C)\n10.12\nForm of Walmart Inc. Stock Incentive Plan of 2025 Global Share-Settled Performance Based Restricted Stock Unit Notification and Terms and Conditions\nis\nincorporated by reference to Exhibit 10.3 of the\n Quarterly Report on Form 10-Q\n of the Company for the quarter end October\n31, 2025\n, filed on December 3, 2025\n(C)\n10.13\nWalmart Inc. Officer Deferred Compensation Plan, as amended and restated effective February 1, 2023 is incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K of the Company for the fiscal year ended January 31, 2023 filed on March 17, 2023\n (C)\n10.14\nPost Termination Agreement and Covenant Not to Compete\nby and\nbetween the Company and Suresh Kumar dated June 6, 2019 is incorporated herein by reference to Exhibit 10.16 to the Annual Report on Form 10-K for the fiscal year ended January 31, 2020 filed on March 20, 2020\n\n(C)\n10.15\nShare Issuance and Acquisition Agreement by and\nb\netween Flipkart Private Limited and Walmart Inc. dated as of May 9, 2018 is incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended July 31, 2018 filed on September 6, 2018 (portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.)\n10.16\nCounterpart Form of Share Purchase Agreement by and\na\nmong Wal-Mart International Holdings, Inc., the shareholders of Flipkart Private Limited identified on Schedule I thereto, Fortis Advisors LLC and Walmart Inc. dated as of May 9, 2018 is incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended July 31, 2018 filed on September 6, 2018 (portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.)\n84\n10.17\nRetirement Agreement\nby and\nbetween the Company and Judith McKenna dated August 16, 2023 is incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended July 31, 2023 filed on September 1, 2023\n\n(C)\n10.18\nRetirement Agreement\nby and\nbetween the Company and\nDoug McMillon\n dated\nNovember 13\n, 202\n5\n is incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended\nOc\ntober\n 31, 202\n5\n filed on\nDecember 3\n, 202\n5\n\n(C)\n10.19*\nSeparation Agreement between the Company and Kathryn McLay dated January 28, 2026\n\n(C)\n19*\nInsider Trading Policy\n21*\nList of the Company's Significant Subsidiaries\n23*\nConsent of Independent Registered Public Accounting Firm\n31.1*\nChief Executive Officer Section 302 Certification\n31.2*\nChief Financial Officer Section 302 Certification\n32.1**\nChief Executive Officer Section 906 Certification\n32.2**\nChief Financial Officer Section 906 Certification\n97.1*\nWalmart Executive Compensation Recoupment Policy\n101.INS*\nInline XBRL Instance Document\n101.SCH*\nInline XBRL Taxonomy Extension Schema Document\n101.CAL*\nInline XBRL Taxonomy Extension Calculation Linkbase Document\n101.DEF*\nInline XBRL Taxonomy Extension Definition Linkbase Document\n101.LAB*\nInline XBRL Taxonomy Extension Label Linkbase Document\n101.PRE*\nInline XBRL Taxonomy Extension Presentation Linkbase Document\n104\nCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)\n*\nFiled herewith as an Exhibit.\n**\nFurnished herewith as an Exhibit.\n(C)\nThis Exhibit is a management contract or compensatory plan or arrangement\n(P)\nThis Exhibit was originally\u00a0filed in paper\u00a0format. Accordingly, a hyperlink has not been provided.\n(1)\nCertain instruments defining the rights of holders of long-term debt securities of the Registrant are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. The Company hereby undertakes to furnish to the SEC, upon request, copies of any such instruments.\n(c)\u00a0\u00a0\u00a0\u00a0Financial Statement Schedules: None.\nITEM\u00a016.\nFORM 10-K SUMMARY\nNone.\n85\nSIGNATURES\nPursuant to the requirements of Section\u00a013 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.\n\nWalmart Inc.\nDate:  March 13, 2026\n\nBy\n\n/s/ John R. Furner\n\nJohn R. Furner\n\nPresident and Chief Executive Officer\nPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:\nDate:  March 13, 2026\n\nBy\n\n/s/ John R. Furner\n\nJohn R. Furner\n\nPresident and Chief Executive Officer and Director\n\n(Principal Executive Officer)\nDate:  March 13, 2026\n\nBy\n\n/s/ Gregory B. Penner\n\nGregory B. Penner\n\nChairman of the Board and Director\nDate:  March 13, 2026\n\nBy\n\n/s/ John David Rainey\n\nJohn David Rainey\n\nExecutive Vice President and Chief Financial Officer\n(Principal Financial Officer)\nDate:  March 13, 2026\n\nBy\n\n/s/ Dwayne M. Milum\n\nDwayne M. Milum\n\nSenior Vice President and Controller\n(Principal Accounting Officer)\nSignature Page to Walmart Inc.\nForm 10-K for the Fiscal Year Ended January\u00a031, 2026\n86\nDate:  March 13, 2026\n\nBy\n\n/s/ Cesar Conde\n\nCesar Conde\n\nDirector\nDate:  March 13, 2026\nBy\n/s/ Timothy P. Flynn\nTimothy P. Flynn\nDirector\nDate:  March 13, 2026\nBy\n/s/ Sarah Friar\nSarah Friar\nDirector\nDate:  March 13, 2026\nBy\n/s/ Carla A. Harris\nCarla A. Harris\nDirector\nDate:  March 13, 2026\nBy\n/s/ Thomas W. Horton\nThomas W. Horton\nDirector\nDate:  March 13, 2026\nBy\n/s/ Marissa A. Mayer\nMarissa A. Mayer\nDirector\nDate:  March 13, 2026\nBy\n/s/ C. Douglas McMillon\nC. Douglas McMillon\nDirector\nDate:  March 13, 2026\nBy\n/s/ Shishir Mehrotra\nShishir Mehrotra\nDirector\nDate:  March 13, 2026\nBy\n/s/ Robert E. Moritz, Jr.\nRobert E. Moritz, Jr.\nDirector\nDate:  March 13, 2026\nBy\n/s/ Brian Niccol\nBrian Niccol\nDirector\nDate:  March 13, 2026\nBy\n/s/ Randall L. Stephenson\nRandall L. Stephenson\nDirector\nDate:  March 13, 2026\n\nBy\n\n/s/ Steuart L. Walton\n\nSteuart L. Walton\n\nDirector\nSignature Page to Walmart Inc.\nForm 10-K for the Fiscal Year Ended January\u00a031, 2026\n87\n", "ground_truth": {"cover": {"company_name": "Walmart Inc.", "cik": "0000104169", "ticker": "WMT", "form_type": "10-K", "fiscal_year_end": "2026-01-31", "filing_date": "2026-03-13"}, "financials": {"currency": "USD", "fiscal_year": 2026, "revenue": 713163000000.0, "cost_of_revenue": 535395000000.0, "operating_income": 29825000000.0, "net_income": 21893000000.0, "eps_basic": 2.74, "eps_diluted": 2.73, "cash_and_equivalents": 10727000000.0, "total_assets": 284668000000.0, "total_equity": 105887000000.0, "total_debt": 82928000000.0, "operating_cash_flow": 41565000000.0}, "top_risk_factors": []}}
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STATES\nSECURITIES AND EXCHANGE COMMISSION\nWASHINGTON, D.C. 20549\nFORM\n\n10-K\n\n\u2611\n\nANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF\nTHE SECURITIES EXCHANGE ACT OF 1934\nFor the fiscal year ended\nDecember 31\n, 2025\n\nor\n\u2610\n\nTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF\nTHE SECURITIES EXCHANGE ACT OF 1934\nFor the transition period from\n\n to\n\nCommission File Number\n1-2256\n\nExxon Mobil Corporation\n\n(Exact name of registrant as specified in its charter)\nNew Jersey\n13-5409005\n(State or other jurisdiction of\nincorporation or organization)\n(I.R.S. Employer\nIdentification Number)\n22777 Springwoods Village Parkway\n,\n\nSpring\n,\n\nTexas\n\n77389-1425\n\n(Address of principal executive offices) (Zip Code)\n(\n972\n)\n\n940-6000\n\n(Registrant\u2019s telephone number, including area code)\nSecurities registered pursuant to Section 12(b) of the Act:\nTitle of Each Class\n\nTrading Symbol\n\nName of Each Exchange on Which Registered\nCommon Stock, without par value\n\nXOM\n\nNew York Stock Exchange\n0.524% Notes due 2028\nXOM28\nNew York Stock Exchange\n0.835% Notes due 2032\nXOM32\nNew York Stock Exchange\n1.408% Notes due 2039\nXOM39A\nNew York Stock Exchange\nIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.\nYes\n \u2611 No \u2610\nIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes \u2610\nNo\n \u2611\nIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.\nYes\n \u2611 No \u2610\nIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (\u00a7 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).\nYes\n\u00a0\u2611 No \u2610\nIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of \u201clarge accelerated filer,\u201d \u201caccelerated filer,\u201d \u201csmaller reporting company,\u201d and \u201cemerging growth company\u201d in Rule 12b-2 of the Exchange Act.\nLarge accelerated filer\n\u2611\nAccelerated filer\n\u2610\nNon-accelerated filer\n\u2610\nSmaller reporting company\n\u2610\nEmerging growth company\n\u2610\nIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. \u2610\nIndicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.\n\u2611\nIf securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.\n\u2610\nIndicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant\u2019s executive officers during the relevant recovery period pursuant to \u00a7240.10D-1(b). \u2610\nIndicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes\n\u2610\n No \u2611\nThe aggregate market value of the voting stock held by non-affiliates of the registrant on June 30, 2025, the last business day of the registrant\u2019s most recently completed second fiscal quarter, based on the closing price on that date of $107.80 on the New York Stock Exchange composite tape, was in excess of $\n460\n billion.\nClass\n\nOutstanding as of January\u00a031, 2026\nCommon stock, without par value\n\n4,166,763,453\nDocuments Incorporated by Reference:\n\nProxy Statement for the 2026 Annual Meeting of Shareholders (Part III)\n\nEXXON MOBIL CORPORATION\nFORM 10-K\nFOR THE FISCAL YEAR ENDED DECEMBER 31, 2025\n\nTABLE OF CONTENTS\n\nPART I\n\nItem 1.\nBusiness\n1\nItem 1A.\nRisk Factors\n2\nItem 1B.\nUnresolved Staff Comments\n8\nItem 1C.\nCybersecurity\n8\nItem 2.\nProperties\n9\nItem 3.\nLegal Proceedings\n22\nItem 4.\nMine Safety Disclosures\n22\nInformation about our Executive Officers\n23\nPART II\nItem 5.\nMarket for Registrant\u2019s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities\n24\nItem 7.\nManagement\u2019s Discussion and Analysis of Financial Condition and Results of Operations\n24\nItem 7A.\nQuantitative and Qualitative Disclosures About Market Risk\n24\nItem 8.\nFinancial Statements and Supplementary Data\n25\nItem 9.\nChanges in and Disagreements With Accountants on Accounting and Financial Disclosure\n25\nItem 9A.\nControls and Procedures\n25\nItem 9B.\nOther Information\n26\nItem 9C.\nDisclosure Regarding Foreign Jurisdictions that Prevent Inspections\n26\n\nPART III\nItem 10.\nDirectors, Executive Officers and Corporate Governance\n26\nItem 11.\nExecutive Compensation\n26\nItem 12.\nSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters\n27\nItem 13.\nCertain Relationships and Related Transactions, and Director Independence\n27\nItem 14.\nPrincipal Account\nant\n Fees and Services\n27\nPART IV\nItem 15.\nExhibit and Financial Statement Schedules\n27\nItem 16.\nForm 10-K Summary\n27\nFinancial Section\n28\nIndex to Exhibits\n128\nSignatures\n129\nTable of Contents\nFinancial Table of Contents\n\nPART I\nITEM 1. BUSINESS\nExxon Mobil Corporation was incorporated in the State of New Jersey in 1882. Divisions and affiliated companies of ExxonMobil operate or market products in the United States and most other countries of the world. Our principal business involves exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals, and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen and ammonia, lower-emission fuels, Proxxima\nTM\n resin systems, carbon materials, low-carbon data centers, and lithium. Affiliates of ExxonMobil conduct extensive research programs in support of these businesses.\nExxon Mobil Corporation's divisions and affiliates have many names, including\nExxonMobil\n,\nExxon\n,\nEsso, Mobil\n or\nXTO\n. For convenience and simplicity, in this report the terms\nExxonMobil, Exxon, Esso, Mobil, and XTO\n, as well as terms like\nCorporation\n,\nCompany\n,\nour\n,\nwe,\n and\nits\n, are sometimes used as abbreviated references to specific affiliates or groups of affiliates. The precise meaning depends on the context in question.\nThe energy and petrochemical industries are highly competitive, both within the industries and also with other industries in supplying the energy, fuel, and chemical needs of industrial and individual consumers. Certain industry participants, including ExxonMobil, are expanding the scope of investments in lower-emission energy and emission-reduction services and technologies. The Corporation competes with other firms in the sale or purchase of needed goods and services in many national and international markets and employs all methods of competition which are lawful and appropriate for such purposes.\nOperating data and industry segment information for the Corporation are contained in the Financial Section of this report under the following: \u201cManagement's Discussion and Analysis of Financial Condition and Results of Operations:\nBusiness Results\n\u201d and\nNote 3\n. Information on oil and gas reserves is contained in the\n\u201cOil and Gas Reserves\u201d\n part of the \u201cSupplemental Information on Oil and Gas Exploration and Production Activities\u201d portion of the Financial Section of this report.\nExxonMobil has a long-standing commitment to the development of proprietary technology. We have a wide array of research programs designed to meet the needs identified in each of our businesses. ExxonMobil held over 8\u00a0thousand active patents worldwide at the end of 2025. Although technology is an important contributor to the overall operations and results of our Company, the profitability of each business segment is not dependent on any individual patent, trade secret, trademark, license, franchise, or concession.\nExxonMobil operates in a highly complex, competitive, and changing global energy business environment where decisions and risks play out over time horizons that are often decades in length. This long-term orientation underpins the Corporation's philosophy on talent development.\nTalent development begins with recruiting exceptional candidates and continues with individually planned experiences and training designed to facilitate broad development and a deep understanding of our business across the business cycle. Our career-oriented approach to talent development results in strong retention and an average length of service of about 30 years for our career employees. Compensation, benefits, and workplace programs support the Corporation's talent management approach, and are designed to attract and retain employees for a career through compensation that is market competitive, long-term oriented, and highly differentiated by individual performance.\nWith over 59 percent of our global employees from outside the U.S. and more than 160 nationalities represented across the Company, we encourage and respect diversity of thought, ideas, and perspective from our workforce. We are focused on building an engaged, global workforce; grounded in meritocracy, we strive to have every employee reach their potential over a long-term career by providing unrivaled opportunities for personal and professional growth through impactful work meeting society's essential needs.\nThe number of regular employees was 58 thousand, 61 thousand, and 62 thousand at years ended 2025, 2024, and 2023, respectively. Regular employees are defined as active executive, management, professional, technical, administrative, and wage employees who work full time or part time for the Corporation and are covered by the Corporation\u2019s benefit plans and programs.\nAs discussed in\nItem 1\nA\n in this report, compliance with existing and potential future government regulations, including taxes, environmental regulations, and other government regulations and policies that directly or indirectly affect the production and sale of our products, may have material effects on the capital expenditures, earnings, and competitive position of ExxonMobil. For additional information on the Corporation's worldwide environmental expenditures, see \"Management's Discussion and Analysis of Financial Condition and Results of Operations:\nEnvironmental Matters\n\" in the Financial Section of this report.\nInformation concerning the source and availability of raw materials used in the Corporation\u2019s business, the extent of seasonality in the business, the possibility of renegotiation of profits or termination of contracts at the election of governments, and risks attendant to foreign operations may be found in\nItem 1A\n and\nItem 2\n in this report.\n1\nTable of Contents\nFinancial Table of Contents\n\nExxonMobil maintains a website at exxonmobil.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 are made available through our website as soon as reasonably practical after we electronically file or furnish the reports to the Securities and Exchange Commission (SEC). Also available on the Corporation\u2019s website are the Company\u2019s Corporate Governance Guidelines, Code of Ethics and Business Conduct, and additional policies as well as the charters of the audit, compensation, and other committees of the Board of Directors. Information on our website is not incorporated into this report.\nThe SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.\nITEM 1A. RISK FACTORS\nExxonMobil\u2019s financial and operating results are subject to a variety of risks inherent in the global oil, gas, and petrochemical businesses and the pursuit of lower-emission and other new business opportunities. Many of these risk factors are not within the Company\u2019s control and could adversely affect our business, our financial and operating results, or our financial condition. These risk factors include:\nSupply and Demand\nThe oil, gas, and petrochemical businesses are fundamentally commodity businesses. This means ExxonMobil\u2019s operations and earnings may be significantly affected by changes in oil, gas, and petrochemical prices and by changes in margins on refined products. Oil, gas, petrochemical, and product prices and margins in turn depend on local, regional, and global events or conditions that affect supply and demand for the relevant commodity or product. Any material decline in oil or natural gas prices could have a material adverse effect on the Company\u2019s operations, results, financial condition, and proved reserves, especially in the Upstream segment. On the other hand, a material increase in oil or natural gas prices could have a material adverse effect on the Company\u2019s operations and results, especially in the Energy Products, Chemical Products, and Specialty Products segments. Our pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen and ammonia, lower-emission fuels, Proxxima\nTM\n resin systems, carbon materials, low-carbon data centers, and lithium also depends on the growth and development of markets for those products and services, including implementation of supportive and stable government policies and developments in existing and new technology to enable those products and services to be provided on a cost-effective basis at commercial scale. See \u201cClimate Change and Energy Transition\u201d in this Item 1A.\nEconomic conditions.\n The demand for energy and petrochemicals is generally linked closely with broad-based economic activities and levels of prosperity. The occurrence of economic downturns, recessions or other periods of low or negative economic growth will typically have a direct adverse impact on our results. Other factors that affect general economic conditions in the world or in a major region, such as changes in population growth rates or living standards, periods of civil unrest or armed hostilities, escalating geopolitical volatility, government regulation or austerity programs, national or regional trade tariffs, trade sanctions or trade controls, international monetary and currency exchange rate fluctuations, decoupling of economies, disruption, realignment, or breaking of current or historical trade or military alliances or global trade or supply chain networks, changes in international trade patterns or shipping routes, or a broader breakdown in global trade, security or public health, can also impact the supply and demand for energy and petrochemicals. Sovereign debt downgrades, defaults, extended government shutdowns, inability to access debt markets due to rating, banking, or legal constraints, liquidity crises, market bubbles and corrections, the breakup or restructuring of fiscal, monetary, or political systems such as the European Union, de-dollarization in global trade or the growth or use of alternative common currencies, and other events or conditions that impair the functioning of financial markets and institutions also pose risks to ExxonMobil, including risks to the safety of our financial assets and to the ability of our partners, suppliers, and customers to fulfill their commitments to ExxonMobil. Our future business, including earnings, cash flows, and financing needs, may also be affected by the occurrence, severity, pace, and rate of recovery of future public health epidemics or pandemics or other natural or human events beyond our control; the responsive actions taken by governments and others; and the resulting effects on regional and global markets and economies.\nOther demand-related factors.\n Other factors that may affect the demand for oil, gas, petrochemicals or our other products, and therefore our results, include technological improvements in energy efficiency; seasonal weather patterns; increased competitiveness of, or government policy support for, alternative energy sources or potential substitutes for our products; changes in technology that alter fuel choices, such as technological advances in energy storage or other critical areas that make wind, solar, nuclear, or other alternatives more competitive for power generation; government actions to increase strategic reserves to enhance energy security; increased demand for artificial intelligence (AI), including the construction and expansion of AI data centers; changes in customer or consumer preferences for our products, including consumer demand for alternative-fueled or electric transportation or alternatives to plastic products; and broad-based changes in personal income levels. See also \u201cClimate Change and Energy Transition\u201d below.\n2\nTable of Contents\nFinancial Table of Contents\n\nOther supply-related factors.\n Commodity prices and margins also vary depending on a number of factors affecting supply. For example, increased supply from the development of new or previously inaccessible oil and gas supply sources and technologies to enhance recovery from existing sources tends to reduce commodity prices to the extent such supply increases are not offset by commensurate growth in demand. Similarly, increases in industry refining or petrochemical manufacturing capacity relative to demand tend to reduce margins on the affected products. World oil, gas, and petrochemical supply levels can also be affected by factors that reduce available supplies, such as the level of, and adherence by, participating countries to production quotas established by OPEC or OPEC+ and other agreements among sovereigns; government policies, including actions intended to reduce greenhouse gas emissions, that restrict oil and gas production or increase associated production, reporting or compliance costs; collective actions by non-governmental organizations and financial institutions to withhold funding or support from oil and gas producers; the occurrence of wars or hostile actions, including disruption of land or sea transportation routes; natural disasters; disruptions in competitors\u2019 operations; and logistics constraints or unexpected unavailability of distribution channels that may disrupt supplies. There also may be new or emerging factors that could increase global oil, gas, and petrochemical supply levels in the short or long term, such as government policies and actions intended to boost or expand development of domestic or foreign oil and gas reserves or accelerate the pace of production reaching markets, including access to previously unavailable, sanctioned, or protected oil and gas resources or the availability or opening of new shipping routes. Dynamic and unpredictable world events may lead to new oil and gas opportunities becoming available or current opportunities becoming less available or unavailable, and such events may adversely affect our business and results. Technological change can also alter the relative costs for competitors to find, produce and refine oil and gas, and to manufacture petrochemicals.\nOther market factors.\n ExxonMobil\u2019s business results are also exposed to potential negative impacts due to changes in interest rates, inflation, currency exchange rates, changes in usage of the U.S. dollar in global trade, and other local or regional market conditions. In addition to direct potential impacts on our costs and revenues, market factors such as rates of inflation may indirectly impact our results to the extent such factors reduce general rates of economic growth and therefore energy demand, as discussed under \u201cEconomic conditions.\u201d Market factors may also result in losses from commodity derivatives and other instruments we use to hedge price exposures or for commodity and treasury trading activities. Additional information regarding the potential future impact of market factors on our businesses is included or incorporated by reference under\nItem 7A\n in this report.\nGovernment and Political Factors\nExxonMobil\u2019s results can be adversely affected by political or regulatory developments affecting our businesses or operations.\nAccess limitations.\n A number of countries limit access to their oil and gas resources, including by restricting leasing, licensing, or permitting activities directly or indirectly through the influence on these processes by well-funded local or international groups opposing the development of these resources. They also may place resources off-limits from development altogether. Restrictions on production of oil and gas could increase to the extent governments view such measures as a viable approach for pursuing national and global energy, security, and climate policies. Restrictions on foreign investment in the oil and gas sector tend to increase in times of high commodity prices or when national governments may have less need for outside sources of private capital. Many countries also restrict the import or export of certain products based on point of origin, and such restrictions may increase during periods of escalating geopolitical or trade tensions.\nRestrictions on doing business.\n ExxonMobil is subject to laws and sanctions imposed by the United States and by other jurisdictions where we do business that may prohibit ExxonMobil or its affiliates from doing business in certain countries or with certain counterparties or restrict or impede the kind of business that may be conducted, including acquiring and divesting certain assets or importing or exporting certain materials or products. Such restrictions may provide a competitive advantage to competitors who may not be subject to comparable restrictions.\nLack of legal certainty.\n Some countries in which we do, or seek to do, business lack well-developed legal systems, lack political or governmental stability, may be subject to regime changes, have not yet adopted clear legal frameworks, may be unable to maintain clear regulatory frameworks in the face of pressure on their systems from well-funded local or international groups opposing development of their resources, or may have evolving and unharmonized standards that vary or conflict across jurisdictions. Lack of legal certainty exposes us to increased risk of adverse or unpredictable actions by government officials, may reduce our ability to comply timely or cost-effectively with evolving standards or requirements, and also makes it more difficult for us to enforce our contracts. In some cases, these risks can be partially offset by agreements to arbitrate disputes in an international forum, but the adequacy of this remedy may still depend on the local legal system to enforce an award.\nRegulatory and litigation risks.\n Even in countries with well-developed legal systems where ExxonMobil does business, we remain exposed to changes in law or interpretation or enforcement of settled law, including changes that result from concerted efforts to increase our legal exposure by groups opposed to the products we provide or international treaties and accords or changes by local jurisdictions encroaching on national regulatory frameworks or global issues or changes resulting from imposition of extraterritorial laws and regulations, and changes in government policy or priorities that could adversely affect our results, such as:\n\u2022\nincreases or changes in taxes, duties, or government royalty rates, including retroactive claims, punitive taxes on oil, gas and petrochemical operations, windfall profit taxes, or global minimum taxes;\n\u2022\nprice controls;\n3\nTable of Contents\nFinancial Table of Contents\n\n\u2022\nchanges in environmental, advertising, insurance or other regulations or laws that penalize us for past or current production of legal and/or permitted products and operations, increase our cost of operation or compliance or reduce or delay available business opportunities, including changes in laws or regulations affecting offshore drilling operations, standards to complete decommissioning, standards for water use or availability, production of our products, emissions, hydraulic fracturing, or production or use of new or recycled plastics, as well as laws and regulations affecting trading, carbon capture and storage, hydrogen and ammonia, lower-emission fuels, Proxxima\nTM\n resin systems, carbon materials, low-carbon data centers, or lithium;\n\u2022\nactions by governments, policy-makers, regulators, or other actors to delay or deny necessary licenses and permits, restrict the availability of oil and gas leases, investment opportunities, or the transportation or export of our products, pause, reduce, or retract government incentives for emissions reductions, disrupt or impact reliability as a result of policy decisions on types and pricing of energy available, or otherwise require changes in the Company's business or strategy that could result in reduced returns;\n\u2022\nregulatory interpretations that exclude or disfavor our products under government policies or programs intended to support new or developing markets or technologies, or that otherwise are not technology-neutral;\n\u2022\nadoption of regulations mandating efficiency standards, emission standards, procurement standards, the use of alternative fuels, or uncompetitive fuel components;\n\u2022\nuse of regulatory or legal standards by any nation or supranational body as a foreign policy tool;\n\u2022\nunstable policies or shifting regulations impacting new or emerging markets;\n\u2022\nadoption of disclosure regulations that could create competitive disadvantages, require us to incur disproportionate costs, increase legal risk due to a need to rely on uncertain estimates or extrapolations (such as emissions of third parties) and lack of uniform standards across jurisdictions, require us to make statements we disagree with, or require us to disclose competitively sensitive commercial information or to violate the non-disclosure laws of other countries; and\n\u2022\ngovernment actions to cancel contracts, redenominate the official currency, renounce or default on obligations, impose unwarranted penalties, renegotiate terms unilaterally, expropriate assets, or compel a change in production plans.\nLegal remedies available to compensate us for expropriation or other takings may be inadequate.\nWe also may be adversely affected by the outcome of litigation, including class actions or arbitrations, especially in countries such as the United States that permit large and unpredictable punitive and non-economic damage awards. Other jurisdictions adopting similar models to impose liability schemes on our products or operations may present similar risks. We also may be adversely affected by government investigations or enforcement proceedings alleging non-compliance with applicable laws or regulations, or by state and local government actors as well as private plaintiffs acting in parallel that attempt to use the legal system to promote public policy agendas (including seeking to reduce the production and sale of hydrocarbon products through litigation targeting the Company or other industry participants), gain political notoriety, or obtain monetary awards from the Company. The continued adoption of similar legal practices in the European Union or elsewhere would broaden this risk.\nSecurity concerns.\n Successful operation of particular facilities or projects may be disrupted by civil unrest, military conflict, acts of sabotage, piracy, terrorism, cybersecurity attacks, the application of national security laws or policies that result in restricting our ability to do business in a particular jurisdiction or region, strikes or protests, and other local, national, regional, or global security concerns. Such concerns may be directed specifically at our Company, our industry, or as part of broader movements and may require us to incur greater costs for security or to shut down operations for a period of time.\n4\nTable of Contents\nFinancial Table of Contents\n\nClimate Change and Energy Transition\nNet-zero scenarios.\n Driven by concern over the risks of climate change, a number of countries have adopted, or are considering the adoption of, broad-reaching regulatory frameworks seeking to report on or reduce greenhouse gas emissions, including emissions from the production and use of oil and gas and their products, as well as increase the use of, or support for, different emission-reduction technologies. These actions are being taken both independently by national and regional governments and within the framework of United Nations Conference of the Parties summits under which many countries of the world have endorsed objectives to reduce the atmospheric concentration of carbon dioxide (CO2) over the coming decades, with an ambition ultimately to achieve \u201cnet zero.\u201d Net zero means that emissions of greenhouse gases from human activities would be balanced by actions that remove such gases from the atmosphere. Expectations for transition of the world\u2019s energy system to lower-emission sources, and ultimately net-zero, derive from hypothetical scenarios that reflect many assumptions about the future, including supportive policy and technology advancements, and reflect substantial uncertainties. The Company seeks opportunities to play a leading role in the energy transition, including the Company\u2019s announced ambition ultimately to achieve net zero with respect to Scope 1 and 2 emissions from our operated assets with continued technology development and government policy support, which carries risks that the transition, including underlying technologies, government policies, and markets as discussed in more detail below, will not be available or develop at the pace or in the manner expected by current net-zero scenarios. Without supportive policies and the innovations they drive, net zero will remain out of reach \u2013 for society and for ExxonMobil. Society\u2019s progress continues to lag in these areas. The success of our strategy in a lower-emissions future will also depend on our ability to recognize key signposts of changes in the global energy system on a timely basis, and our corresponding ability to direct investment to the technologies and businesses, at the appropriate stage of development, to best capitalize on our competitive strengths.\nGreenhouse gas restrictions.\n Government actions intended to reduce greenhouse gas emissions include adoption of cap and trade regimes, carbon taxes, carbon accounting, carbon-based import duties or other trade tariffs, minimum renewable usage requirements, restrictive permitting, increased mileage and other efficiency standards, mandates for sales of electric vehicles, restrictions on sales of gasoline-only vehicles, mandates for disclosure of plans to reduce emissions or reduce the use or production of certain products, mandates for use of specific fuels or technologies, and other incentives or mandates designed to support certain technologies for transitioning to lower-emission energy sources. Political actors, non-governmental organizations, and their agents also increasingly seek to collectively advance climate change objectives indirectly, such as by seeking to reduce the availability or increase the cost of financing and investment in the oil and gas sector. These actions include delaying or blocking needed infrastructure, utilizing shareholder governance mechanisms against companies or their shareholders or financial institutions in an effort to deter investment in oil and gas activities, and taking other actions intended to promote changes in business strategy for oil and gas companies. Depending on how policies are formulated and applied, such policies could negatively affect our investment returns, make our hydrocarbon-based products more expensive or less competitive, lengthen project implementation times, and reduce demand for hydrocarbons, as well as shift hydrocarbon demand toward relatively lower-carbon alternatives. Current, pending, and potential greenhouse gas regulations or policies may also increase our compliance costs, such as for monitoring or sequestering emissions and complying with increased or mandatory disclosure or due diligence requirements and government-mandated energy transition plans.\nTechnology and lower-emission solutions.\n Achieving societal ambitions to reduce greenhouse gas emissions and ultimately achieve net zero will require new technologies and added infrastructure to reduce the cost and increase the scalability of solutions to reduce emissions, as well as technologies such as carbon capture and storage (CCS). CCS technologies, focused initially on capturing and sequestering CO2 emissions from high-carbon intensity industrial activities, can assist in meeting society\u2019s objective to mitigate atmospheric greenhouse gas levels while also helping to ensure the availability of the reliable and affordable energy the world requires. ExxonMobil has established a Low Carbon Solutions (LCS) business unit and is continuing efforts in our existing businesses to advance the development and deployment of these technologies and projects, including CCS, hydrogen and ammonia, lower-emission fuels, Proxxima\nTM\n resin systems, advanced energy-saving materials, low-carbon data centers, lithium, and other technologies. The Company\u2019s efforts include both in-house research and development as well as collaborative efforts with leading universities and with commercial partners involved in new energy technologies. Our future results and ability to grow our business, help others meet their emission-reduction goals, and succeed in a lower-emissions future will depend in part on the success of these research and collaboration efforts and on our ability to adapt and apply the strengths of our current business model to providing the energy products of the future in a cost-competitive manner.\n5\nTable of Contents\nFinancial Table of Contents\n\nPolicy and market development.\n The scale of the world\u2019s energy system means that, in addition to developments in technology as discussed above, meeting society's needs for energy and reducing emissions will require appropriate support from governments and private participants throughout the global economy. Our ability to develop and deploy CCS and other new energy technologies at commercial scale, and the growth and future returns of LCS and other emerging businesses in which we invest, will depend in part on the development of stable and supportive government policies and markets. Failure or delay of these policies or markets to materialize or be maintained could adversely impact or delay these investments. Policy and other actions that result in restricting the availability of hydrocarbon products without a commensurate reduction in demand may have unpredictable adverse effects, including increased commodity price volatility; periods of significantly higher commodity prices and resulting inflationary pressures; and local or regional energy shortages. Such effects in turn may depress economic growth or lead to rapid or conflicting shifts in policy by different actors, with resulting adverse effects on our businesses. In addition, the existence of supportive policies in any jurisdiction is not a guarantee that those policies will continue in the future. See also the discussion of \u201cSupply and Demand,\u201d \u201cGovernment and Political Factors,\u201d and \u201cOperational and Other Factors\u201d in this Item 1A.\nOperational and Other Factors\nIn addition to external economic and political factors, our future business results also depend on our ability to successfully manage those factors that are, at least in part, within our control, including our investment into existing and new businesses. The extent to which we manage these factors will impact our performance relative to competition. For projects in which we are not the operator, we depend on the management effectiveness of one or more co-venturers whom we do not control.\nExploration and development program.\n Our ability to maintain and grow our oil and gas production depends on the success of our exploration and development efforts. Among other factors, we must continuously improve our ability to identify the most promising resource prospects and apply our project management expertise to bring discovered resources online as scheduled and within budget.\nProject and portfolio management.\n The long-term success of ExxonMobil\u2019s Upstream and Product Solutions businesses, as well as the future success of LCS and other emerging investments, depends on complex, long-term, capital-intensive projects. These projects in turn require a high degree of project management expertise to maximize efficiency. Specific factors that can affect the performance of major projects include our ability to: negotiate successfully with joint venturers, partners, governments, suppliers, customers, or others; protect and enforce our contractual and legal rights, including with our joint venture partners, host governments, and others; model and optimize reservoir performance and production reliability; develop markets for project outputs, whether through long-term contracts or the development of effective spot markets; qualify for certain incentives available under supportive government policies for emerging markets and technologies; manage changes in operating conditions and costs, including costs of third-party equipment or services such as drilling rigs and shipping, supply chain disruptions, and inflationary cost pressures; prevent, to the extent possible, and respond effectively to unforeseen technical difficulties that could delay project start-up, incur or escalate costs, or cause unscheduled project downtime; and influence the performance of project operators where ExxonMobil does not perform that role. In addition to the effective management of individual projects, ExxonMobil\u2019s success, including our ability to mitigate risk and provide attractive returns to shareholders, depends on our ability to successfully manage our overall portfolio, including diversification among types and locations of our projects, products produced, and strategies to acquire or divest assets. We may not be able to acquire or divest assets at a price or on the timeline we contemplate in our strategies. Additionally, we may retain certain liabilities following a divestment and could be held liable for past use or for different liabilities than anticipated, including reversion of decommissioning or other liabilities upon bankruptcy or other default of successors in title.\nThe term \u201cproject\u201d as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.\nOperational efficiency.\n An important component of ExxonMobil\u2019s competitive performance, especially given the commodity-based nature of many of our businesses, is our ability to operate efficiently, including our ability to manage expenses, improve production yields on an ongoing basis, and successfully integrate and achieve the anticipated synergies of acquisitions. This requires continuous management focus, including technology integration and improvements, cost control, productivity enhancements, harmonizing functions, policies, procedures and processes, regular reappraisal of our asset portfolio, and the recruitment, development, and retention of high caliber employees.\nResearch and development and technological change.\n To maintain our competitive position, especially in light of the technological nature of our businesses, the dynamic and rapidly evolving technological landscape, and the need for continuous efficiency improvement, ExxonMobil\u2019s technology, research, and development organizations must be successful and able to adapt to a changing market, regulatory, and policy environment, both nationally and internationally, including continuous improvement in the efficiency of hydraulic fracturing technology and developing technologies to help reduce greenhouse gas emissions. To remain competitive, we must also continuously adapt and capture the benefits of new and emerging technologies, such as AI, including successfully applying advances in the ability to process and integrate large amounts of data to our businesses and decision-making processes.\n6\nTable of Contents\nFinancial Table of Contents\n\nSafety, business controls, and risk management.\n Our results depend on management\u2019s ability to minimize the inherent risks of oil, gas, and petrochemical operations, as well as potential risks related to new energy and other technologies, to effectively control our business activities, including trading, and to minimize the potential for human error. We apply rigorous management systems and continuous focus on workplace safety, spills avoidance, and other adverse environmental events. For example, we work to minimize spills through a combined program of effective operations integrity management, ongoing upgrades, key equipment replacements, and comprehensive inspection and surveillance. Similarly, we are implementing cost-effective new technologies and adopting new operating practices to reduce emissions, not only in response to government requirements but also to address community priorities. We employ a robust and actively evolving enterprise risk management system to identify and manage risk across our businesses. We also maintain a disciplined framework of internal controls and apply a controls management system for monitoring compliance with this framework. Substantial liabilities and other adverse impacts could result if we do not timely identify and mitigate applicable risks, or if our management systems and controls do not function as intended.\nCybersecurity.\n ExxonMobil is regularly subject to attempted cybersecurity disruptions from a variety of sources including state-sponsored actors. See\nItem 1C\n in this report for information on ExxonMobil\u2019s program for managing cybersecurity risks. If the measures we are taking to protect against cybersecurity disruptions prove to be insufficient or if our proprietary data is otherwise not protected, ExxonMobil, as well as our customers, employees, or third parties, could be adversely affected. We have limited ability to influence third parties, including our partners, suppliers, and service providers (including providers of cloud-hosting services for our data or applications), to implement strong cybersecurity controls and are exposed to potential harm from cybersecurity events that may affect their operations. Cybersecurity disruptions could cause physical harm to people or the environment; damage or destroy assets; compromise business systems; result in proprietary information being altered, lost, or stolen; result in employee, customer, or third-party information being compromised; or otherwise disrupt our business operations. We could incur significant costs to remedy the effects of a major cybersecurity disruption in addition to costs in connection with resulting regulatory actions, litigation, or reputational harm.\nPreparedness.\n Our operations may be disrupted by severe weather events, natural disasters, human error, and similar events. For example, hurricanes may damage our offshore production facilities or coastal refining and petrochemical plants in vulnerable areas. Our facilities are designed, engineered, constructed, and operated to withstand a variety of extreme climatic and other conditions, with safety factors built in to cover a number of uncertainties, including those associated with wave, wind, and current intensity, marine ice flow patterns, permafrost stability, storm surge magnitude, temperature extremes, extreme rainfall events, and earthquakes. Our consideration of changing weather conditions and inclusion of safety factors in design cover the engineering uncertainties that climate change and other events may potentially introduce. Our ability to mitigate the adverse impacts of these events depends in part upon the effectiveness of our robust facility engineering, our rigorous disaster preparedness and response, and business continuity planning.\nInsurance limitations.\n The ability of the Corporation to insure against many of the risks it faces as described in this Item 1A is limited by the availability and cost of coverage, which may not be economic, as well as the capacity of the applicable insurance markets, which may not be sufficient.\nCompetition.\n As noted in\nItem 1\n above, the energy and petrochemical industries are highly competitive. We face competition not only from other private firms, but also from state-owned companies that are increasingly competing for opportunities outside of their home countries and as partners with other private firms. In some cases, these state-owned companies may pursue opportunities in furtherance of strategic, national, or supranational objectives of their government owners, with less focus on financial returns than companies owned by private shareholders, such as ExxonMobil. Technology and expertise provided by industry service companies or AI may also enhance the competitiveness of firms that may not have the internal resources and capabilities of ExxonMobil or reduce the need for resource-owning countries to partner with private-sector oil and gas companies in order to monetize national resources. As described in more detail above, our hydrocarbon-based energy products are also subject to growing and, in many cases, government-supported competition from alternative energy sources. In addition, as we enter new markets in pursuit of lower-emission and other new business opportunities, we will need to compete effectively with established competitors in these markets, as well as with new market entrants seeking to capitalize on these opportunities, while successfully navigating changing market conditions or technologies.\nReputation.\n Our reputation is an important corporate asset. Factors that could have a negative impact on our reputation include an operating incident or significant cybersecurity disruption; changes in consumer views concerning our products; changes in consumer media preferences from traditional mainstream media to decentralized and personalized media; a perception by investors or others that the Corporation is making insufficient progress with respect to our ambition to play a leading role in the energy transition, or that pursuit of this ambition may result in allocation of capital to investments with reduced returns; divergent and evolving societal views and investor pressures regarding a future energy transition; and other adverse events such as those described in this Item 1A. Negative impacts on our reputation could in turn make it more difficult for us to compete successfully for new opportunities, obtain necessary regulatory approvals, obtain financing, and attract talent, or they could reduce customer or consumer demand for our branded products. ExxonMobil\u2019s reputation may also be harmed by events which negatively affect the image of our industry as a whole.\n7\nTable of Contents\nFinancial Table of Contents\n\nProjections, estimates, and descriptions of ExxonMobil\u2019s plans and objectives included or incorporated in Items 1, 1A, 1C, 2, 5, 7, and 7A of this report are forward-looking statements. Actual future results, including project completion dates, production rates, capital expenditures, costs, and business plans could differ materially due to, among other things, the factors discussed above and elsewhere in this report.\nITEM 1B. UNRESOLVED STAFF COMMENTS\nNone.\nITEM 1C. CYBERSECURITY\nThe Corporation recognizes the importance of cybersecurity in achieving its business objectives, safeguarding its assets, and managing its daily operations.\nAccordingly, the Corporation integrates cybersecurity risks into its overall enterprise risk management system.\n\nThe Audit Committee oversees the Corporation\u2019s risk management approach and structure, which includes an annual review of the Corporation\u2019s cybersecurity program.\n\nThe Corporation\u2019s cybersecurity program is managed by\nthe Corporation\u2019s Vice President of Information Technology (IT), with support from cross-functional teams led by ExxonMobil IT and operational technology (OT) cybersecurity operations managers (collectively, Cybersecurity Operations Managers)\n. The Cybersecurity Operations Managers are responsible for the day-to-day management and effective functioning of the cybersecurity program, including the prevention, detection, investigation, and response to cybersecurity threats and incidents.\nThe Cybersecurity Operations Managers collectively have many years of experience in cybersecurity operations.\n\nIT management provides regular reports to the Corporation\u2019s senior management throughout the year, and to the Audit Committee or the Board of Directors, as appropriate, in its annual cybersecurity review.\n\nSuch reports typically address, among other things, the Corporation\u2019s cybersecurity strategy, initiatives, key security metrics, penetration testing and benchmarking learnings, and business response plans as well as the evolving cybersecurity threat landscape.\n\nThe Corporation\u2019s cybersecurity program includes multi-layered technological capabilities designed to prevent and detect cybersecurity disruptions and leverages industry standard frameworks, including the National Institute of Standards and Technology Cybersecurity Framework. The cybersecurity program incorporates an incident response plan to engage cross-functionally across the Corporation and report cybersecurity incidents to appropriate levels of management, including senior management, and the Audit Committee or Board of Directors, based on potential impact. The Corporation conducts annual cybersecurity awareness training and routinely tests cybersecurity awareness and business preparedness for response and recovery, which are developed based on real-world threats.\nIn addition, the Corporation exchanges threat information with governmental and industry groups and proactively engages independent, third-party cybersecurity experts to test, evaluate, and recommend improvements on the effectiveness and resiliency of its cybersecurity program through penetration testing, breach assessments, regular cybersecurity incident drill testing, threat information sharing, and industry benchmarking.\n The Corporation takes a risk-based approach with respect to its third-party service providers, tailoring processes according to the nature and sensitivity of the data or systems accessed by such third-party service providers, and performing additional risk screenings and procedures, as appropriate.\nAs of the date of this report, we have not identified any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect the Corporation, including our business strategy, results of operations, or financial condition.\nWhile the Corporation believes its cybersecurity program to be appropriate for managing constantly evolving cybersecurity risks, no program can fully protect against all possible adverse events. For additional information on these risks and potential consequences if the measures we are taking prove to be insufficient or if our proprietary data is otherwise not protected, see \u201c\nItem 1A\n. Risk Factors: Operational and Other Factors -- Cybersecurity\u201d in this report.\n\n8\nTable of Contents\nFinancial Table of Contents\n\nITEM 2. PROPERTIES\nInformation with regard to oil and gas producing activities follows:\n1. Disclosure of Reserves\nA. Summary of Oil and Gas Reserves at Year-End 2025\nThe table below summarizes the oil-equivalent proved reserves in each geographic area and by product type for consolidated subsidiaries and equity companies. Natural gas is converted to an oil-equivalent basis at six billion cubic feet per one million barrels. The Corporation has reported proved reserves on the basis of the average of the first-day-of-the-month price for each month during the last 12-month period. No major discovery or other favorable or adverse event has occurred since December 31, 2025, that would cause a significant change in the estimated proved reserves as of that date.\nProved Reserves\nCrude\nOil\nNatural Gas\nLiquids\nBitumen\nSynthetic\nOil\n\u00a0Natural\nGas\nOil-Equivalent\nTotal\nAll Products\n\n(million bbls)\n(million bbls)\n(million bbls)\n(million bbls)\n(billion cubic ft)\n(million bbls)\nDeveloped\n\nConsolidated Subsidiaries\n\nUnited States\n1,552\n1,075\n\u2014\n\u2014\n11,206\n4,495\nCanada/Other Americas\n(1)\n586\n1\n2,230\n288\n356\n3,164\nEurope\n3\n\u2014\n\u2014\n\u2014\n338\n60\nAfrica\n185\n\u2014\n\u2014\n\u2014\n111\n204\nAsia\n1,871\n44\n\u2014\n\u2014\n2,010\n2,251\nAustralia/Oceania\n32\n6\n\u2014\n\u2014\n3,057\n548\nTotal Consolidated\n4,229\n1,126\n2,230\n288\n17,078\n10,722\nEquity Companies\n\nUnited States\n5\n3\n\u2014\n\u2014\n48\n16\nEurope\n2\n\u2014\n\u2014\n\u2014\n207\n36\nAfrica\n7\n\u2014\n\u2014\n\u2014\n775\n136\nAsia\n462\n134\n\u2014\n\u2014\n4,782\n1,394\nTotal Equity Company\n476\n137\n\u2014\n\u2014\n5,812\n1,582\nTotal Developed\n4,705\n\n1,263\n\n2,230\n\n288\n\n22,890\n\n12,304\n\nUndeveloped\n\nConsolidated Subsidiaries\n\nUnited States\n1,558\n988\n\u2014\n\u2014\n5,581\n3,476\nCanada/Other Americas\n(1)\n609\n\u2014\n100\n\u2014\n171\n737\nEurope\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nAfrica\n32\n\u2014\n\u2014\n\u2014\n2\n32\nAsia\n1,089\n23\n\u2014\n\u2014\n189\n1,143\nAustralia/Oceania\n28\n2\n\u2014\n\u2014\n2,653\n472\nTotal Consolidated\n3,316\n1,013\n100\n\u2014\n8,596\n5,860\nEquity Companies\n\nUnited States\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nEurope\n3\n\u2014\n\u2014\n\u2014\n56\n12\nAfrica\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nAsia\n163\n161\n\u2014\n\u2014\n4,866\n1,135\nTotal Equity Company\n166\n161\n\u2014\n\u2014\n4,922\n1,147\nTotal Undeveloped\n3,482\n\n1,174\n\n100\n\n\u2014\n\n13,518\n\n7,007\n\nTotal Proved Reserves\n8,187\n\n2,437\n\n2,330\n\n288\n\n36,408\n\n19,311\n\n(1)\n Other Americas includes proved developed reserves of 486 million barrels of crude oil and 228 billion cubic feet of natural gas, as well as proved undeveloped reserves of 587 million barrels of crude oil and 162 billion cubic feet of natural gas.\n9\nTable of Contents\nFinancial Table of Contents\n\nIn the preceding reserves information, consolidated subsidiary and equity company reserves are reported separately. However, the Corporation operates its business with the same view of equity company reserves as it has for reserves from consolidated subsidiaries.\nThe Corporation anticipates several projects will come online over the next few years providing additional production capacity. However, actual volumes will vary from year to year due to the timing of individual project start-ups, operational outages, reservoir performance, regulatory changes, the impact of fiscal and commercial terms, asset sales, weather events, price effects on production sharing contracts, changes in the amount and timing of capital investments that may vary depending on the oil and gas price environment, international trade patterns and relations, and other factors described in\nItem 1A\n.\nThe estimation of proved reserves, which is based on the requirement of reasonable certainty, is an ongoing process based on rigorous technical evaluations, commercial and market assessments, and detailed analysis of reservoir and well performance. Furthermore, the Corporation only records proved reserves for projects which have received significant funding commitments by management toward the development of the reserves. Although the Corporation is reasonably certain that proved reserves will be produced, the timing and amount recovered can be affected by a number of factors including completion of development projects, reservoir performance, regulatory approvals, government policies, consumer preferences, and significant changes in crude oil and natural gas price levels. In addition, proved reserves could be affected by an extended period of low prices which could reduce the level of the Corporation\u2019s capital spending and also impact our partners\u2019 capacity to fund their share of joint projects.\nB. Technologies Used in Establishing Proved Reserves Additions in 2025\nAdditions to ExxonMobil\u2019s proved reserves in 2025 were based on estimates generated through the integration of available and appropriate geological, engineering and production data, utilizing well-established technologies that have been demonstrated in the field to yield repeatable and consistent results.\nData used in these integrated assessments included information obtained directly from the subsurface via wellbores, such as well logs, reservoir core samples, fluid samples, static and dynamic pressure information, production test data, and surveillance and performance information. The data utilized also included subsurface information obtained through indirect measurements, including high-quality 3\u2011D and 4\u2011D seismic data, calibrated with available well control information. The tools used to interpret the data included seismic processing software, reservoir modeling and simulation software, and data analysis packages.\nIn some circumstances, where appropriate analog reservoirs were available, reservoir parameters from these analogs were used to increase the quality of, and confidence in, the reserves estimates.\nC. Qualifications of Reserves Technical Oversight Group and Internal Controls over Proved Reserves\nExxonMobil has a dedicated Global Reserves and Resources group that provides technical oversight and is separate from the operating organization. Primary responsibilities of this group include oversight of the reserves estimation process for compliance with Securities and Exchange Commission (SEC) rules and regulations, review of annual changes in reserves estimates, and the reporting of ExxonMobil\u2019s proved reserves. This group also maintains the official company reserves estimates for ExxonMobil\u2019s proved reserves of crude oil, natural gas liquids, bitumen, synthetic oil, and natural gas. In addition, the group provides training to personnel involved in the reserves estimation and reporting process within ExxonMobil and its affiliates. The current Global Reserves and Resources Manager has more than 30 years of experience in reservoir engineering and reserves assessment, has a degree in Engineering, and serves on the Oil and Gas Reserves Committee of the Society of Petroleum Engineers. The group is staffed with individuals that have an average of more than 15 years of technical experience in the petroleum industry, including expertise in the classification and categorization of reserves under SEC guidelines. This group includes individuals who hold degrees in either Engineering or Geology.\nThe Global Reserves and Resources group maintains a central database containing the official company reserves estimates. Appropriate controls, including limitations on database access and update capabilities, are in place to ensure data integrity within this central database. An annual review of the system\u2019s controls is performed by internal audit. Key components of the reserves estimation process include technical evaluations, commercial and market assessments, analysis of well and field performance, and long-standing approval guidelines. No changes may be made to the reserves estimates in the central database, including additions of any new initial reserves estimates or subsequent revisions, unless these changes have been thoroughly reviewed and evaluated by duly authorized geoscience and engineering professionals within the operating organization. In addition, changes to reserves estimates that exceed certain thresholds require further review and approval by the appropriate level of management within the operating organization before the changes may be made in the central database. Endorsement by the Global Reserves and Resources group for all proved reserves changes is a mandatory component of this review process. After all changes are made, reviews are held with senior management for final endorsement.\n10\nTable of Contents\nFinancial Table of Contents\n\n2. Proved Undeveloped Reserves\nAt year-end 2025, approximately 7.0 billion oil-equivalent barrels (GOEB) of ExxonMobil\u2019s proved reserves were classified as proved undeveloped. This represents 36 percent of the 19.3 GOEB reported in proved reserves. This compares to 7.4 GOEB of proved undeveloped reserves reported at the end of 2024. During the year, ExxonMobil conducted development activities that resulted in the transfer of approximately 1.4 GOEB from proved undeveloped to proved developed reserves by year-end. The largest transfers were related to development activities in the United States, Guyana, Kazakhstan, the United Arab Emirates, Qatar, and Canada. In 2025, extensions and discoveries, primarily in the United States and Guyana, resulted in the addition of approximately 2.0 GOEB of proved undeveloped reserves. Also, the Corporation reclassified approximately 1.0 GOEB of proved undeveloped reserves which no longer met the SEC definition of proved reserves, primarily in the United States.\nOverall, investments of $19.0 billion were made by the Corporation during 2025 to progress the development of reported proved undeveloped reserves, including $18.8 billion for oil and gas producing activities, along with additional investments for other non-oil and gas producing activities such as the construction of support infrastructure and other related facilities.\nOne of ExxonMobil\u2019s requirements for reporting proved reserves is that management has made significant funding commitments toward the development of the reserves. ExxonMobil has a disciplined investment strategy and many major fields require long lead-time in order to be developed. Development projects typically take several years from the time of recording proved undeveloped reserves to the start of production and can exceed five years for large and complex projects. Proved undeveloped reserves in Australia and the United Arab Emirates have remained undeveloped for five years or more primarily due to constraints on the capacity of infrastructure, as well as the time required to complete development for very large projects. The Corporation is reasonably certain that these proved reserves will be produced; however, the timing and amount recovered can be affected by a number of factors including completion of development projects, reservoir performance, regulatory approvals, government policies, consumer preferences, the pace of co-venturer/government funding, changes in the amount and timing of capital investments, and significant changes in crude oil and natural gas price levels. Of the proved undeveloped reserves that have been reported for five or more years, over 80 percent are contained in the aforementioned countries. In Australia, proved undeveloped reserves are associated with future compression for the Gorgon Jansz LNG project. In the United Arab Emirates, proved undeveloped reserves are associated with an approved development plan and continued drilling investment for the producing Upper Zakum field.\n11\nTable of Contents\nFinancial Table of Contents\n\n3. Oil and Gas Production, Production Prices and Production Costs\nA. Oil and Gas Production\nThe table below summarizes production by final product sold and by geographic area for the last three years.\n(thousands of barrels daily)\n2025\n2024\n2023\nCrude Oil\nNGL\nCrude Oil\nNGL\nCrude Oil\nNGL\nCrude oil and natural gas liquids production\nConsolidated Subsidiaries\n\nUnited States\n1,005\n514\n862\n383\n556\n238\nCanada/Other Americas\n\n(1)\n381\n1\n346\n2\n240\n2\nEurope\n2\n\u2014\n2\n\u2014\n2\n\u2014\nAfrica\n141\n\u2014\n206\n2\n216\n4\nAsia\n445\n28\n422\n26\n417\n28\nAustralia/Oceania\n18\n7\n20\n10\n24\n12\nTotal Consolidated Subsidiaries\n1,992\n550\n1,858\n423\n1,455\n284\nEquity Companies\n\nUnited States\n2\n1\n2\n1\n8\n1\nEurope\n1\n\u2014\n1\n\u2014\n2\n\u2014\nAfrica\n1\n\u2014\n1\n\u2014\n1\n\u2014\nAsia\n266\n61\n206\n59\n216\n60\nTotal Equity Companies\n270\n62\n210\n60\n227\n61\nTotal crude oil and natural gas liquids production\n2,262\n\n612\n\n2,068\n\n483\n\n1,682\n\n345\n\nBitumen production\n\nConsolidated Subsidiaries\n\nCanada/Other Americas\n385\n374\n355\n\nSynthetic oil production\n\nConsolidated Subsidiaries\n\nCanada/Other Americas\n68\n62\n67\n\nTotal liquids production\n3,329\n\n2,987\n\n2,449\n\n(millions of cubic feet daily)\nNatural gas production available for sale\n\nConsolidated Subsidiaries\n\nUnited States\n3,346\n2,869\n2,292\n\nCanada/Other Americas\n(1)\n27\n101\n96\n\nEurope\n228\n252\n266\n\nAfrica\n2\n45\n35\n\nAsia\n968\n907\n915\n\nAustralia/Oceania\n1,283\n1,264\n1,298\n\nTotal Consolidated Subsidiaries\n5,854\n5,438\n4,902\n\nEquity Companies\n\nUnited States\n18\n18\n19\n\nEurope\n71\n100\n148\n\nAfrica\n112\n107\n90\nAsia\n2,386\n2,415\n2,575\n\nTotal Equity Companies\n2,587\n2,640\n2,832\n\nTotal natural gas production available for sale\n8,442\n\n8,078\n\n7,734\n\n(thousands of oil-equivalent barrels daily)\nOil-equivalent production\n4,736\n\n4,333\n\n3,738\n\n(1)\nOther Americas includes crude oil production for 2025, 2024, and 2023 of 320 thousand, 285 thousand, and 178 thousand barrels daily, respectively; and natural gas production available for sale for 2025, 2024, and 2023 of 4 million, 76 million, and 67 million cubic feet daily, respectively.\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\n12\nTable of Contents\nFinancial Table of Contents\n\nB. Production Prices and Production Costs\nThe table below summarizes average production prices and average production costs by geographic area and by product type for the last three years.\n(dollars per unit)\nUnited\nStates\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\n2025\nConsolidated Subsidiaries\n\nAverage production prices\n\nCrude oil, per barrel\n63.19\n67.75\n63.24\n69.20\n68.26\n66.21\n65.64\nNGL, per barrel\n20.87\n28.98\n47.44\n\u2014\n30.83\n47.75\n21.71\nNatural gas, per thousand cubic feet\n1.07\n1.21\n11.91\n1.90\n2.27\n7.72\n3.15\nBitumen, per barrel\n\u2014\n46.13\n\u2014\n\u2014\n\u2014\n\u2014\n46.13\nSynthetic oil, per barrel\n\u2014\n63.61\n\u2014\n\u2014\n\u2014\n\u2014\n63.61\nAverage production costs, per oil-equivalent barrel - total\n11.07\n15.63\n30.70\n20.38\n5.15\n5.60\n11.29\nAverage production costs, per barrel - bitumen\n\u2014\n19.95\n\u2014\n\u2014\n\u2014\n\u2014\n19.95\nAverage production costs, per barrel - synthetic oil\n\u2014\n40.41\n\u2014\n\u2014\n\u2014\n\u2014\n40.41\nEquity Companies\nAverage production prices\nCrude oil, per barrel\n62.71\n\u2014\n63.64\n66.94\n61.75\n\u2014\n61.79\nNGL, per barrel\n20.77\n\u2014\n\u2014\n\u2014\n40.91\n\u2014\n40.62\nNatural gas, per thousand cubic feet\n2.71\n\u2014\n11.75\n5.51\n6.79\n\u2014\n6.84\nAverage production costs, per oil-equivalent barrel - total\n30.49\n\u2014\n102.43\n4.48\n2.53\n\u2014\n4.49\nTotal\nAverage production prices\nCrude oil, per barrel\n63.19\n67.75\n63.39\n69.19\n65.84\n66.21\n65.18\nNGL, per barrel\n20.87\n28.98\n47.44\n\u2014\n37.75\n47.75\n23.64\nNatural gas, per thousand cubic feet\n1.08\n1.21\n11.88\n5.46\n5.48\n7.72\n4.28\nBitumen, per barrel\n\u2014\n46.13\n\u2014\n\u2014\n\u2014\n\u2014\n46.13\nSynthetic oil, per barrel\n\u2014\n63.61\n\u2014\n\u2014\n\u2014\n\u2014\n63.61\nAverage production costs, per oil-equivalent barrel - total\n11.13\n15.63\n48.26\n18.43\n3.75\n5.60\n10.20\nAverage production costs, per barrel - bitumen\n\u2014\n19.95\n\u2014\n\u2014\n\u2014\n\u2014\n19.95\nAverage production costs, per barrel - synthetic oil\n\u2014\n40.41\n\u2014\n\u2014\n\u2014\n\u2014\n40.41\n2024\nConsolidated Subsidiaries\nAverage production prices\nCrude oil, per barrel\n73.36\n79.47\n74.07\n81.29\n78.40\n79.83\n76.57\nNGL, per barrel\n23.08\n30.43\n63.29\n50.51\n32.34\n38.74\n24.32\nNatural gas, per thousand cubic feet\n0.37\n1.72\n10.56\n2.25\n2.55\n8.47\n3.13\nBitumen, per barrel\n\u2014\n54.02\n\u2014\n\u2014\n\u2014\n\u2014\n54.02\nSynthetic oil, per barrel\n\u2014\n74.16\n\u2014\n\u2014\n\u2014\n\u2014\n74.16\nAverage production costs, per oil-equivalent barrel - total\n10.89\n16.20\n25.18\n21.85\n5.31\n6.92\n11.70\nAverage production costs, per barrel - bitumen\n\u2014\n21.16\n\u2014\n\u2014\n\u2014\n\u2014\n21.16\nAverage production costs, per barrel - synthetic oil\n\u2014\n44.44\n\u2014\n\u2014\n\u2014\n\u2014\n44.44\nEquity Companies\nAverage production prices\nCrude oil, per barrel\n73.91\n\u2014\n76.34\n73.99\n73.17\n\u2014\n73.21\nNGL, per barrel\n19.94\n\u2014\n\u2014\n\u2014\n47.63\n\u2014\n47.19\nNatural gas, per thousand cubic feet\n1.59\n\u2014\n9.19\n4.10\n7.52\n\u2014\n7.41\nAverage production costs, per oil-equivalent barrel - total\n26.41\n\u2014\n63.76\n7.27\n2.70\n\u2014\n4.57\nTotal\nAverage production prices\nCrude oil, per barrel\n73.36\n79.47\n75.06\n81.25\n76.69\n79.83\n76.23\nNGL, per barrel\n23.07\n30.43\n63.29\n50.51\n43.01\n38.74\n27.16\nNatural gas, per thousand cubic feet\n0.37\n1.72\n10.17\n3.55\n6.17\n8.47\n4.53\nBitumen, per barrel\n\u2014\n54.02\n\u2014\n\u2014\n\u2014\n\u2014\n54.02\nSynthetic oil, per barrel\n\u2014\n74.16\n\u2014\n\u2014\n\u2014\n\u2014\n74.16\nAverage production costs, per oil-equivalent barrel - total\n10.94\n16.20\n36.41\n20.68\n3.93\n6.92\n10.53\nAverage production costs, per barrel - bitumen\n\u2014\n21.16\n\u2014\n\u2014\n\u2014\n\u2014\n21.16\nAverage production costs, per barrel - synthetic oil\n\u2014\n44.44\n\u2014\n\u2014\n\u2014\n\u2014\n44.44\n13\nTable of Contents\nFinancial Table of Contents\n\n(dollars per unit)\nUnited\nStates\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\n2023\nConsolidated Subsidiaries\n\nAverage production prices\n\nCrude oil, per barrel\n75.45\n80.51\n71.99\n82.70\n79.50\n70.26\n78.43\nNGL, per barrel\n23.88\n24.44\n64.10\n44.72\n29.81\n34.35\n25.12\nNatural gas, per thousand cubic feet\n1.16\n2.57\n13.64\n2.04\n2.40\n9.31\n4.26\nBitumen, per barrel\n\u2014\n49.64\n\u2014\n\u2014\n\u2014\n\u2014\n49.64\nSynthetic oil, per barrel\n\u2014\n77.56\n\u2014\n\u2014\n\u2014\n\u2014\n77.56\nAverage production costs, per oil-equivalent barrel - total\n9.70\n19.94\n36.37\n20.70\n5.26\n5.55\n12.05\nAverage production costs, per barrel - bitumen\n\u2014\n23.80\n\u2014\n\u2014\n\u2014\n\u2014\n23.80\nAverage production costs, per barrel - synthetic oil\n\u2014\n45.91\n\u2014\n\u2014\n\u2014\n\u2014\n45.91\nEquity Companies\nAverage production prices\nCrude oil, per barrel\n75.48\n\u2014\n77.82\n71.92\n74.59\n\u2014\n74.63\nNGL, per barrel\n19.13\n\u2014\n\u2014\n\u2014\n45.64\n\u2014\n45.19\nNatural gas, per thousand cubic feet\n5.25\n\u2014\n22.22\n5.89\n8.54\n\u2014\n9.15\nAverage production costs, per oil-equivalent barrel - total\n53.49\n\u2014\n43.99\n6.74\n2.77\n\u2014\n5.09\nTotal\nAverage production prices\nCrude oil, per barrel\n75.45\n80.51\n74.13\n82.66\n77.83\n70.26\n77.92\nNGL, per barrel\n23.86\n24.44\n64.10\n44.72\n40.59\n34.35\n28.66\nNatural gas, per thousand cubic feet\n1.19\n2.57\n16.71\n4.81\n6.93\n9.31\n6.05\nBitumen, per barrel\n\u2014\n49.64\n\u2014\n\u2014\n\u2014\n\u2014\n49.64\nSynthetic oil, per barrel\n\u2014\n77.56\n\u2014\n\u2014\n\u2014\n\u2014\n77.56\nAverage production costs, per oil-equivalent barrel - total\n10.15\n19.94\n39.09\n19.79\n3.91\n5.55\n10.63\nAverage production costs, per barrel - bitumen\n\u2014\n23.80\n\u2014\n\u2014\n\u2014\n\u2014\n23.80\nAverage production costs, per barrel - synthetic oil\n\u2014\n45.91\n\u2014\n\u2014\n\u2014\n\u2014\n45.91\nNatural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels.\nAverage production prices have been calculated by using sales quantities from the Corporation\u2019s own production as the divisor. Average production costs have been computed by using net production quantities for the divisor. The volumes of crude oil and natural gas liquids (NGL) production used for this computation are shown in the oil and gas production table in section 3.A. The volumes of natural gas used in the calculation are the production volumes of natural gas available for sale and are also shown in section 3.A. The natural gas available for sale volumes are different from those shown in the reserves table in the \u201cOil and Gas Reserves\u201d part of the \u201cSupplemental Information on Oil and Gas Exploration and Production Activities\u201d portion of the Financial Section of this report due to volumes consumed or flared.\n14\nTable of Contents\nFinancial Table of Contents\n\n4. Drilling and Other Exploratory and Development Activities\nA. Number of Net Productive and Dry Wells Drilled\n\n2025\n2024\n2023\nNet Productive Exploratory Wells Drilled\n\nConsolidated Subsidiaries\n\nUnited States\n2\n2\n\u2014\nCanada/Other Americas\n1\n3\n1\nEurope\n1\n\u2014\n1\nAfrica\n\u2014\n\u2014\n\u2014\nAsia\n\u2014\n\u2014\n\u2014\nAustralia/Oceania\n\u2014\n\u2014\n\u2014\nTotal Consolidated Subsidiaries\n4\n5\n2\nEquity Companies\nUnited States\n\u2014\n\u2014\n\u2014\nEurope\n\u2014\n\u2014\n\u2014\nAfrica\n\u2014\n\u2014\n\u2014\nAsia\n\u2014\n\u2014\n\u2014\nTotal Equity Companies\n\u2014\n\u2014\n\u2014\nTotal productive exploratory wells drilled\n4\n\n5\n\n2\n\nNet Dry Exploratory Wells Drilled\nConsolidated Subsidiaries\nUnited States\n\u2014\n\u2014\n1\nCanada/Other Americas\n1\n3\n3\nEurope\n1\n\u2014\n\u2014\nAfrica\n1\n\u2014\n\u2014\nAsia\n\u2014\n\u2014\n\u2014\nAustralia/Oceania\n\u2014\n\u2014\n\u2014\nTotal Consolidated Subsidiaries\n3\n3\n4\nEquity Companies\nUnited States\n\u2014\n\u2014\n\u2014\nEurope\n\u2014\n\u2014\n\u2014\nAfrica\n\u2014\n\u2014\n\u2014\nAsia\n\u2014\n\u2014\n\u2014\nTotal Equity Companies\n\u2014\n\u2014\n\u2014\nTotal dry exploratory wells drilled\n3\n\n3\n\n4\n\n15\nTable of Contents\nFinancial Table of Contents\n\n2025\n2024\n2023\nNet Productive Development Wells Drilled\n\nConsolidated Subsidiaries\n\nUnited States\n698\n533\n446\nCanada/Other Americas\n14\n22\n47\nEurope\n1\n1\n1\nAfrica\n1\n4\n4\nAsia\n5\n6\n5\nAustralia/Oceania\n1\n1\n\u2014\nTotal Consolidated Subsidiaries\n720\n567\n503\nEquity Companies\nUnited States\n1\n1\n2\nEurope\n1\n\u2014\n\u2014\nAfrica\n\u2014\n\u2014\n\u2014\nAsia\n3\n3\n6\nTotal Equity Companies\n5\n4\n8\nTotal productive development wells drilled\n725\n\n571\n\n511\n\nNet Dry Development Wells Drilled\nConsolidated Subsidiaries\nUnited States\n\u2014\n10\n\u2014\nCanada/Other Americas\n\u2014\n\u2014\n\u2014\nEurope\n\u2014\n\u2014\n\u2014\nAfrica\n\u2014\n1\n\u2014\nAsia\n1\n\u2014\n\u2014\nAustralia/Oceania\n\u2014\n\u2014\n\u2014\nTotal Consolidated Subsidiaries\n1\n11\n\u2014\nEquity Companies\nUnited States\n\u2014\n\u2014\n\u2014\nEurope\n\u2014\n\u2014\n\u2014\nAfrica\n\u2014\n\u2014\n\u2014\nAsia\n\u2014\n\u2014\n\u2014\nTotal Equity Companies\n\u2014\n\u2014\n\u2014\nTotal dry development wells drilled\n1\n\n11\n\n\u2014\n\nTotal number of net wells drilled\n733\n\n590\n\n517\n\n16\nTable of Contents\nFinancial Table of Contents\n\nB. Exploratory and Development Activities Regarding Oil and Gas Resources Extracted by Mining Technologies\nSyncrude Operations.\n Syncrude is a joint venture established to recover shallow deposits of oil sands using open-pit mining methods to extract the crude bitumen, and then upgrade it to produce a high-quality, light (32 degrees API), sweet, synthetic crude oil. Imperial Oil Limited is the owner of a 25 percent interest in the joint venture. Exxon Mobil Corporation has a 69.6 percent interest in Imperial Oil Limited. In 2025, the Company\u2019s share of net production of synthetic crude oil was about 68 thousand barrels per day and share of net acreage was about 55 thousand acres in the Athabasca oil sands deposit.\nKearl Operations.\n Kearl is a joint venture established to recover shallow deposits of oil sands using open-pit mining methods to extract the crude bitumen. Imperial Oil Limited holds a 70.96 percent interest in the joint venture and ExxonMobil Canada Properties holds the other 29.04 percent. Exxon Mobil Corporation has a 69.6 percent interest in Imperial Oil Limited and a 100 percent interest in ExxonMobil Canada Properties. Kearl is comprised of six oil sands leases covering about 49 thousand acres in the Athabasca oil sands deposit.\nKearl is located approximately 40 miles north of Fort McMurray, Alberta, Canada. Bitumen is extracted from oil sands and processed through bitumen extraction and froth treatment trains. The product, a blend of bitumen and diluent, is shipped to our refineries and to other third parties. Diluent is natural gas condensate or other light hydrocarbons added to the crude bitumen to facilitate transportation. During 2025, average net production at Kearl was about 264 thousand barrels per day.\n\n5. Present Activities\nA. Wells Drilling\nWells Drilling\nYear-End 2025\nYear-End 2024\nGross\nNet\nGross\nNet\n\nConsolidated Subsidiaries\n\nUnited States\n638\n492\n809\n648\nCanada/Other Americas\n33\n20\n19\n9\nEurope\n\u2014\n\u2014\n1\n1\nAfrica\n2\n\u2014\n5\n1\nAsia\n9\n2\n13\n5\nAustralia/Oceania\n1\n\u2014\n1\n\u2014\nTotal Consolidated Subsidiaries\n683\n514\n848\n664\nEquity Companies\nUnited States\n38\n\u2014\n15\n\u2014\nEurope\n\u2014\n\u2014\n\u2014\n\u2014\nAfrica\n\u2014\n\u2014\n\u2014\n\u2014\nAsia\n23\n4\n43\n4\nTotal Equity Companies\n61\n4\n58\n4\nTotal gross and net wells drilling\n744\n\n518\n\n906\n\n668\n\nB. Review of Principal Ongoing Activities\nUnited States\nDuring 2025, ExxonMobil was active in areas onshore and offshore in the lower 48 states and in Alaska. During the year, development activities focused on liquids-rich opportunities in the onshore U.S., primarily in the Permian Basin of West Texas and New Mexico, bringing total U.S. net production to 2.1 million oil-equivalent barrels per day. Development activities also continued on the Golden Pass LNG export project, including mechanical completion of Train 1 in late 2025.\nOil and gas exploration and production rights are acquired from mineral interest owners through a lease. Mineral interest owners include the Federal and State governments, as well as private mineral interest owners. Leases typically have a primary term ranging from one to 10 years, and a production period beyond the primary term that normally remains in effect until production ceases. Under certain circumstances, a lease may be held beyond its primary term even if production has not commenced. In some instances a \u201cfee interest\u201d is acquired in private property where the underlying mineral interests and rights are purchased and owned outright.\n17\nTable of Contents\nFinancial Table of Contents\n\nCanada / Other Americas\nProduction operations for the region are mainly in Canada, Guyana, and Brazil. Total operations in Canada provided 519 thousand oil-equivalent barrels per day in net production, where oil and gas operations are active onshore in Alberta and offshore in Newfoundland and Labrador. In Situ Bitumen operations also continue in Alberta. Canadian onshore licenses or leases are acquired for varying periods of time, with renewals or extensions possible. These licenses or leases generally define a specified scope of work and are held by production. Canadian offshore production licenses are valid for 25 years, with rights of extension for continued production. Significant discovery licenses in the offshore relating to currently undeveloped discoveries do not have a definite term.\nIn Guyana, the Yellowtail development commenced operations with the ONE GUYANA floating production, storage and offloading vessel, and development activities continued on the Uaru and Whiptail projects. The Hammerhead project was funded in 2025. The Petroleum Activities Act 2023 authorizes the Government of Guyana to license and enter petroleum agreements for petroleum exploration, development, production, and storage operations. The Act enables petroleum agreements to provide for an exploration period to be established by subsidiary legislation by the Minister (typically up to 10 years) and provide for a production period of 20 years for an oil field and 30 years for a gas field, each with a renewal period of up to 10 years.\nBrazil commenced operations in the Bacalhau Phase 1 development with the start-up of the floating production, storage and offloading vessel.\nEurope\nThe Pegasus-1 exploratory well was drilled offshore Cyprus and encountered a gas-bearing reservoir. Evaluations are ongoing to develop potential commercialization options.\nAfrica\nExxonMobil continued to participate in the Coral South Floating LNG in Mozambique, while operations continued in three producing deepwater blocks in Angola and three producing deepwater blocks in Nigeria. In Angola, a total of 1.6 net acres were relinquished and Block 15 amended its Production Sharing Agreement to extend the production license to 2037.\nAsia\nIn 2025, ExxonMobil exited Thailand operations, while production activities continued throughout the region. Kazakhstan operations take place onshore and offshore through our partnerships in Tengiz and Kashagan. During the year, the Tengiz Expansion Project was completed and production ramped up to name-plate capacity. In Qatar, ExxonMobil participated in 45.7 million tonnes per year of gross liquefied natural gas capacity and 3.4 billion cubic feet per day of flowing gas capacity. Development activities continued on the North Field East and North Field Production Sustainment projects. Ongoing activities in the United Arab Emirates continued on the phased development of the Upper Zakum field.\nAustralia / Oceania\nIn Australia, development activities progressed on the Jansz-Io Compression Project and the Gorgon Stage 3 project was fully funded. Australia and Papua New Guinea account for 22.5 million metric tons of LNG per year.\nWorldwide Exploration\nExploration activities were under way in several countries in which ExxonMobil has no established production operations and thus are not included above. Net acreage totaled 15.8 million acres at year-end 2025.\n6. Delivery Commitments\nExxonMobil sells crude oil and natural gas from its producing operations under a variety of contractual obligations, some of which may specify the delivery of a fixed and determinable quantity for periods longer than one year. ExxonMobil also enters into natural gas sales contracts where the source of the natural gas used to fulfill the contract can be a combination of our own production and the spot market. Worldwide, we are contractually committed to deliver approximately 73 million barrels of oil and 2.9 trillion cubic feet of natural gas for the period from 2026 through 2028. We expect to fulfill the majority of these delivery commitments with production from our proved developed reserves. Any remaining commitments will be fulfilled with production from our proved undeveloped reserves and purchases on the open market as necessary.\n18\nTable of Contents\nFinancial Table of Contents\n\n7. Oil and Gas Properties, Wells, Operations and Acreage\nA. Gross and Net Productive Wells\n\u00a0Gross and Net Productive Wells\nYear-End 2025\nYear-End 2024\nOil\nGas\nOil\nGas\nGross\nNet\nGross\nNet\nGross\nNet\nGross\nNet\nConsolidated Subsidiaries\n\nUnited States\n25,816\n15,760\n3,270\n1,833\n30,333\n17,078\n7,579\n4,340\nCanada/Other Americas\n4,143\n4,067\n2,815\n983\n4,092\n4,025\n2,865\n1,017\nEurope\n363\n106\n352\n192\n371\n113\n359\n192\nAfrica\n352\n94\n\u2014\n\u2014\n359\n94\n\u2014\n\u2014\nAsia\n797\n244\n140\n83\n789\n243\n151\n87\nAustralia/Oceania\n46\n8\n103\n38\n326\n48\n104\n40\nTotal Consolidated Subsidiaries\n31,517\n20,279\n6,680\n3,129\n36,270\n21,601\n11,058\n5,676\nEquity Companies\nUnited States\n2,551\n322\n3,291\n323\n2,573\n329\n3,303\n326\nEurope\n57\n20\n174\n64\n57\n20\n332\n102\nAfrica\n\u2014\n\u2014\n6\n2\n\u2014\n\u2014\n6\n2\nAsia\n239\n60\n142\n36\n233\n58\n150\n31\nTotal Equity Companies\n2,847\n402\n3,613\n425\n2,863\n407\n3,791\n461\nTotal gross and net productive wells\n34,364\n\n20,681\n\n10,293\n\n3,554\n\n39,133\n\n22,008\n\n14,849\n\n6,137\n\nThere were 22,778 gross and 20,151 net operated wells at year-end 2025 and 25,610 gross and 22,837 net operated wells at year-end 2024. The number of wells with multiple completions was 418 gross in 2025 and 434 gross in 2024.\nB. Gross and Net Developed Acreage\nGross and Net Developed Acreage\n\n(thousands of acres)\nYear-End 2025\nYear-End 2024\nGross\nNet\nGross\nNet\n\nConsolidated Subsidiaries\n\nUnited States\n7,715\n5,083\n10,668\n7,021\nCanada/Other Americas\n (1)\n1,849\n1,300\n1,903\n1,342\nEurope\n918\n546\n954\n555\nAfrica\n1,455\n428\n1,455\n428\nAsia\n1,424\n422\n1,473\n427\nAustralia/Oceania\n3,142\n1,043\n3,142\n1,043\nTotal Consolidated Subsidiaries\n16,503\n8,822\n19,595\n10,816\nEquity Companies\nUnited States\n581\n113\n581\n113\nEurope\n2,612\n921\n3,590\n1,109\nAfrica\n178\n44\n178\n44\nAsia\n630\n148\n665\n152\nTotal Equity Companies\n4,001\n1,226\n5,014\n1,418\nTotal gross and net developed acreage\n20,504\n\n10,048\n\n24,609\n\n12,234\n\n(1)\n Includes developed acreage in Other Americas of 348 gross and 151 net thousands of acres for 2025 and 379 gross and 190 net thousands of acres for 2024.\nSeparate acreage data for oil and gas are not maintained because, in many instances, both are produced from the same acreage.\n19\nTable of Contents\nFinancial Table of Contents\n\nC. Gross and Net Undeveloped Acreage\nGross and Net Undeveloped Acreage\n(thousands of acres)\nYear-End 2025\nYear-End 2024\nGross\nNet\nGross\nNet\n\nConsolidated Subsidiaries\n\nUnited States\n5,189\n2,086\n6,707\n2,632\nCanada/Other Americas\n(1)\n21,599\n10,760\n21,457\n9,842\nEurope\n11,908\n7,752\n11,988\n7,770\nAfrica\n12,712\n8,060\n17,476\n11,301\nAsia\n745\n215\n766\n227\nAustralia/Oceania\n3,346\n1,661\n3,554\n1,805\nTotal Consolidated Subsidiaries\n55,499\n30,534\n61,948\n33,577\nEquity Companies\nUnited States\n\u2014\n\u2014\n\u2014\n\u2014\nEurope\n\u2014\n\u2014\n381\n110\nAfrica\n418\n104\n418\n104\nAsia\n298\n19\n298\n19\nTotal Equity Companies\n716\n123\n1,097\n233\nTotal gross and net undeveloped acreage\n56,215\n\n30,657\n\n63,045\n\n33,810\n\n(1)\n Includes undeveloped acreage in Other Americas of 15,407 gross and 7,527 net thousands of acres for 2025 and 14,914 gross and 6,381 net thousands of acres for 2024.\nExxonMobil\u2019s investment in developed and undeveloped acreage is comprised of numerous concessions, blocks, and leases. The terms and conditions under which the Corporation maintains exploration and/or production rights to the acreage are property-specific, contractually defined, and vary significantly from property to property. Work programs are designed to ensure that the exploration potential of any property is fully evaluated before expiration. In some instances, the Corporation may elect to relinquish acreage in advance of the contractual expiration date if the evaluation process is complete and there is not a business basis for extension. In cases where additional time may be required to fully evaluate acreage, the Corporation has generally been successful in obtaining extensions. The scheduled expiration of leases and concessions for undeveloped acreage over the next three years is not expected to have a material adverse impact on the Corporation.\n20\nTable of Contents\nFinancial Table of Contents\n\nInformation with regard to refining and chemical capacity:\nExxonMobil manufactures, trades, and sells petroleum and petrochemical products. Our refining and chemical operations are highly integrated and encompass a global network of manufacturing plants, transportation systems, and distribution centers that provide a range of fuels, specialty products, feedstocks, olefins, polyolefins, and a wide variety of other products to our customers around the world.\nCapacity At Year-End 2025\n\n(1)\n\nExxonMobil\nInterest %\nExxonMobil\u2019s Share of Refining Capacity\n(2)\nEthylene\nPolyethylene\nPolypropylene\n(thousands of barrels daily)\n(millions of metric tons per year)\nUnited States\n\nJoliet\nIllinois\n\u25a0\n100\n267\n\u2014\n\u2014\n\u2014\nBaton Rouge\nLouisiana\n\u25a0\n\u25b2\n\u25cf\n100\n523\n1.1\n1.3\n1.0\nBaytown\nTexas\n\u25a0\n\u25b2\n\u25cf\n100\n565\n4.0\n\u2014\n0.8\nBeaumont\nTexas\n\u25a0\n\u25b2\n\u25cf\n100\n612\n0.9\n1.7\n\u2014\nCorpus Christi\nTexas\n\u25cf\n50\n\u2014\n0.9\n0.7\n\u2014\nMont Belvieu\nTexas\n\u25cf\n100\n\u2014\n\u2014\n2.3\n\u2014\nTotal United States\n\n1,967\n6.9\n6.0\n1.8\nCanada\n\nStrathcona\nAlberta\n\u25a0\n69.6\n197\n\u2014\n\u2014\n\u2014\nNanticoke\nOntario\n\u25a0\n69.6\n113\n\u2014\n\u2014\n\u2014\nSarnia\nOntario\n\u25a0\n\u25cf\n69.6\n124\n0.3\n0.5\n\u2014\nTotal Canada\n\n434\n0.3\n0.5\n\u2014\nEurope\n\nAntwerp\nBelgium\n\u25a0\n\u25cf\n100\n318\n\u2014\n0.4\n\u2014\nMeerhout\nBelgium\n\u25cf\n100\n\u2014\n\u2014\n0.5\n\u2014\nKarlsruhe\nGermany\n\u25a0\n25\n78\n\u2014\n\u2014\n\u2014\nRotterdam\nNetherlands\n\u25a0\n\u25b2\n\u25cf\n100\n192\n\u2014\n\u2014\n\u2014\nFawley\nUnited Kingdom\n\u25a0\n\u25b2\n\u25cf\n100\n265\n\u2014\n\u2014\n\u2014\nFife\n(3)\nUnited Kingdom\n\u25cf\n50\n\u2014\n0.4\n\u2014\n\u2014\nTotal Europe\n\n853\n0.4\n0.9\n\u2014\nAsia Pacific\n\nFujian\nChina\n\u25a0\n\u25cf\n25\n67\n0.3\n0.2\n0.2\nHuizhou\nChina\n\u25cf\n100\n\u2014\n1.6\n1.7\n0.9\nSingapore\nSingapore\n\u25a0\n\u25b2\n\u25cf\n100\n592\n1.9\n1.9\n1.0\nTotal Asia Pacific\n\n659\n3.8\n3.8\n2.1\nMiddle East\n\nAl Jubail\nSaudi Arabia\n\u25b2\n\u25cf\n50\n\u2014\n0.7\n0.7\n\u2014\nYanbu\nSaudi Arabia\n\u25a0\n\u25cf\n50\n200\n1.0\n0.7\n0.2\nTotal Middle East\n200\n1.7\n1.4\n0.2\nTotal Worldwide\n\n4,113\n\n13.1\n\n12.5\n\n4.1\n\n\u25a0\n Energy Products\n\u25b2\n Specialty Products\n\u25cf\n Chemical Products\n(1)\n ExxonMobil share reflects 100 percent for operations of ExxonMobil and majority-owned subsidiaries. For companies owned 50 percent or less, ExxonMobil share is the greater of ExxonMobil\u2019s interest or that portion of distillation capacity normally available to ExxonMobil.\n(2)\n Refining capacity data is based on 100 percent of rated refinery process unit stream-day capacities to process inputs to atmospheric distillation units under normal operating conditions, less the impact of shutdowns for regular repair and maintenance activities, averaged over an extended period of time. The listing excludes refining capacity for a minor interest held through equity securities in the Laffan Refinery in Qatar for which results are reported in the Upstream segment.\n(3)\n The Corporation announced the planned closure of the Fife Ethylene Plant, with shutdown activities expected to be completed in 2026.\nDue to rounding, numbers presented above may not add up precisely to the totals indicated.\n21\nTable of Contents\nFinancial Table of Contents\n\nInformation with regard to retail fuel sites:\nWithin the Energy Products segment, retail fuels sites sell products and services throughout the world through our\nExxon\n,\nEsso,\n and\nMobil\n brands.\nNumber of Retail Fuel Sites At Year-End 2025\nOwned/leased\nDistributors/resellers\nTotal\nUnited States\n\u2014\n10,206\n10,206\nCanada\n\u2014\n2,561\n2,561\nEurope\n169\n3,430\n3,599\nAsia Pacific\n188\n932\n1,120\nLatin America\n\u2014\n579\n579\nMiddle East/Africa\n168\n300\n468\nWorldwide\n525\n\n18,008\n\n18,533\n\nITEM 3. LEGAL PROCEEDINGS\nExxonMobil has elected to use a $1 million threshold for disclosing environmental proceedings.\nRefer to the relevant portions of\nNote 7\n of the Financial Section of this report for additional information on legal proceedings.\nITEM 4. MINE SAFETY DISCLOSURES\nNot applicable.\n\n22\nTable of Contents\nFinancial Table of Contents\n\nInformation about our Executive Officers\n(positions and ages as of February\u00a018, 2026)\nName\nAge\nCurrent and Prior Positions (up to five years)\nDarren W. Woods\n61\nChairman of the Board\n\nand Chief Executive Officer\n (since January 1, 2017)\nDirector and President\n (since January 1, 2016)\nNeil A. Chapman\n63\nSenior Vice President\n (since January 1, 2018)\nNeil A. Hansen\n51\nSenior Vice President and Chief Financial Officer\n (since February 1, 2026)\nPresident, Global Business Solutions (May 1, 2025 - January 31, 2026)\nSenior Vice President, Energy Products, ExxonMobil Product Solutions Company\n\u00a0\u00a0\u00a0(April 1, 2022 - April 30, 2025)\nVice President, Europe, Africa & Middle East Fuels, ExxonMobil Fuels & Lubricants Company\n\u00a0\u00a0\u00a0(March 15, 2020 - March 31, 2022)\nJack P. Williams, Jr.\n62\nSenior Vice President\n(since June 1, 2014)\nDaniel L. Ammann\n53\nVice President\n (since May 1, 2022)\nPresident, ExxonMobil Upstream Company (since February 1, 2025)\nPresident, Low Carbon Solutions (May 1, 2022 - December 31, 2024)\nChief Executive Officer, Cruise LLC (January 2019 - December 2021)\nJames R. Chapman\n56\nVice President, Treasurer and Investor Relations\n(since May 1, 2024)\nVice President, Tax and Treasurer (November 28, 2022 - April 30, 2024)\nDominion Energy, Inc. (prior to November 28, 2022):\nExecutive Vice President, Chief Financial Officer and Treasurer (January 2019 - November 2022)\nMatt R. Crocker\n52\nVice President\n(since May 1, 2025)\nPresident, Global Business Solutions (November 1, 2023 - April 30, 2025)\nSenior Vice President, Strategy, Product and New Assets, Low Carbon Solutions\n\u00a0\u00a0\u00a0(May 1, 2022 - October 31, 2023)\nSenior Vice President, Fuels and Lubricants, ExxonMobil Fuels & Lubricants Company\n\u00a0\u00a0\u00a0(September 1, 2020 - April 30, 2022)\nLen M. Fox\n62\nVice President, Controller and Tax\n(since May 1, 2024)\nVice President and Controller (March 1, 2021 - April 30, 2024)\nJon M. Gibbs\n54\nSenior President, ExxonMobil Global Operations\n (since January 1, 2026)\nPresident, ExxonMobil Global Projects Company (April 1, 2021 - December 31, 2025)\nSenior Vice President, Global Project Delivery, ExxonMobil Global Projects Company\n\u00a0\u00a0\u00a0(July 1, 2020 - March 31, 2021)\nStaale Gjervik\n52\nPresident, ExxonMobil Global Projects Company\n\n(since January 1, 2026)\nPresident, ExxonMobil Supply Chain (May 1, 2023 - December 31, 2025)\nPresident, ExxonMobil Global Services Company (July 1, 2020 - April 30, 2023)\nDarrin L. Talley\n61\nVice President, Corporate Strategic Planning\n (since April 1, 2022)\nPresident, ExxonMobil Research and Engineering Company (April 1, 2020 - March 31, 2022)\nJeffrey A. Taylor\n61\nVice President, General Counsel and Corporate Secretary\n (since July 1, 2024)\nDeputy General Counsel (May 9, 2024 - June 30, 2024)\nExecutive Vice President and General Counsel, Fox Corporation (March 1, 2021 - May 8, 2024)\nExecutive Vice President and Chief Litigation Counsel, Fox Corporation\n\u00a0\u00a0(March 1, 2019 - February 28, 2021)\nOfficers are generally elected by the Board of Directors at its meeting on the day of each annual election of directors, with each such officer serving until a successor has been elected and qualified. The above-named officers are required to file reports under Section 16 of the Securities Exchange Act of 1934.\n23\nTable of Contents\nFinancial Table of Contents\n\nPART II\nITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES\nThe principal exchange where ExxonMobil common stock (XOM) is traded is the New York Stock Exchange, although the stock is traded on other exchanges in and outside the United States.\nThere were 276,536 registered shareholders of ExxonMobil common stock at December 31, 2025. At January 31, 2026, the registered shareholders of ExxonMobil common stock numbered 273,961.\nOn January 29, 2026, the Corporation declared a $1.03 dividend per common share, payable March 10, 2026.\nReference is made to\nItem 12\n in Part III of this report.\n\nIssuer Purchases of Equity Securities for Quarter Ended December 31, 2025\nTotal Number of Shares Purchased\n\n(1)\nAverage Price Paid per Share\n\n(2)\nTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs\n\n(3)\nApproximate Dollar Value of Shares that May Yet Be Purchased Under the Program\n(Billions of dollars)\n(4)\nOctober 2025\n16,203,130\n$113.58\n16,203,068\n$23.3\nNovember 2025\n13,456,104\n$116.69\n13,025,924\n$21.8\nDecember 2025\n16,753,598\n$117.81\n14,908,290\n$20.0\nTotal\n46,412,832\n$116.01\n44,137,282\n(1)\n Includes shares withheld from participants in the Company's incentive program for personal income taxes.\n(2)\n Excludes 1% U.S. excise tax on stock repurchases.\n(3)\n Purchases were made under terms intended to qualify for exemption under Rules 10b-18 and 10b5-1.\n(4)\n The Corporation completed share repurchases of $20 billion in 2025.\n\nIn its 2025 Corporate Plan Update released December 9, 2025, the Corporation stated that it expects share repurchases of $20 billion in 2026, assuming reasonable market conditions.\n\u00a0During the fourth quarter, the Corporation did not issue or sell any unregistered equity securities.\nITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nReference is made to the section entitled \u201c\nManagement\u2019s Discussion and Analysis of Financial Condition and Results of Operations\n\u201d in the Financial Section of this report.\nITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK\nReference is made to the section entitled \u201c\nMarket Risks\n\u201d in the Financial Section of this report. All statements, other than historical information incorporated in this Item 7A, are forward-looking statements. The actual impact of future market changes could differ materially due to, among other things, factors discussed in this report.\n24\nTable of Contents\nFinancial Table of Contents\n\nITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\nReference is made to the following in the Financial Section of this report:\n\u2022\n\nConsolidated financial statements\n, together with the report thereon of PricewaterhouseCoopers LLP (PCAOB ID\n238\n) dated February\u00a018, 2026, beginning with the section entitled \u201c\nReport of Independent Registered Public Accounting Firm\n\u201d and continuing through\nNote\n\n20\n;\n\u2022\n\u201c\nSupplemental Information on Oil and Gas Exploration and Production Activities\n\u201d (unaudited); and\n\u2022\n\u201c\nFrequently Used Terms\n\u201d (unaudited).\nFinancial Statement Schedules have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.\nITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE\nNone.\nITEM 9A. CONTROLS AND PROCEDURES\nManagement\u2019s Evaluation of Disclosure Controls and Procedures\nAs indicated in the certifications in Exhibit 31 of this report, the Corporation\u2019s Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer have evaluated the Corporation\u2019s disclosure controls and procedures as of December\u00a031,\u00a02025. Based on that evaluation, these officers have concluded that the Corporation\u2019s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission\u2019s rules and forms.\nManagement\u2019s Report on Internal Control over Financial Reporting\nManagement, including the Corporation\u2019s Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer, is responsible for establishing and maintaining adequate internal control over the Corporation\u2019s financial reporting. Management conducted an evaluation of the effectiveness of internal control over financial reporting based on criteria established in\nInternal Control - Integrated Framework (2013)\n issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that Exxon Mobil Corporation\u2019s internal control over financial reporting was effective as of December\u00a031, 2025.\nPricewaterhouseCoopers LLP, an independent registered public accounting firm, audited the effectiveness of the Corporation\u2019s internal control over financial reporting as of December 31, 2025, as stated in their report included in the Financial Section of this report.\nChanges in Internal Control over Financial Reporting\nThere were no changes during the Corporation\u2019s last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Corporation\u2019s internal control over financial reporting.\n25\nTable of Contents\nFinancial Table of Contents\n\nITEM 9B. OTHER INFORMATION\nDuring the three months ended December\u00a031, 2025,\nnone of the Company\u2019s directors or officers adopted or terminated a \u201cRule 10b5-1 trading arrangement\u201d or \u201cnon-Rule 10b5-1 trading arrangement,\u201d as each term is defined in Item 408(a) of Regulation S-K.\nITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS\nNot applicable.\nPART III\nITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE\nReference is made to the section of this report titled \u201c\nInformation about our Executive Officers\n.\u201d\nIncorporated by reference to the following from the registrant\u2019s definitive proxy statement for the 2026 annual meeting of shareholders (the \u201c2026 Proxy Statement\u201d):\n\u2022\nThe section entitled \u201cElection of Directors;\u201d\n\u2022\nThe portion entitled \"Delinquent Section 16(a) Reports\" of the section entitled \"Director and Executive Officer Stock Ownership;\"\n\u2022\nThe portions entitled \u201cDirector Qualifications,\u201d \u201cDirector Nomination Process and Board Succession,\u201d and \u201cCode of Ethics and Business Conduct\u201d of the section entitled \u201cCorporate Governance;\u201d and\n\u2022\nThe \u201cDirector Independence\u201d portion, \u201cBoard Meetings and Annual Meeting Attendance\u201d portion, the membership table of the portion entitled \u201cBoard Committees,\u201d the \"Nominating and Governance Committee\" portion and the \"Audit Committee\" portion of the section entitled \u201cCorporate Governance.\u201d\nThe Corporation has adopted an Insider Trading Policy governing the purchase, sale, and/or other dispositions of its securities by its directors, officers, and employees, and the Corporation itself, that the Corporation believes is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to the Corporation. A copy of the Corporation\u2019s Insider Trading Policy is filed as Exhibit 19 to this report.\nITEM 11. EXECUTIVE COMPENSATION\nIncorporated by reference to the sections entitled \u201cDirector Compensation,\u201d \u201cCompensation Committee Report,\u201d \u201cCompensation Discussion and Analysis,\u201d \u201cExecutive Compensation Tables,\u201d \u201cPay Ratio,\u201d and \"Pay Versus Performance\" of the registrant\u2019s 2026 Proxy Statement.\n26\nTable of Contents\nFinancial Table of Contents\n\nITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS\nThe information required under Item 403 of Regulation S-K is incorporated by reference to the sections entitled \u201cCertain Beneficial Owners\u201d and \u201cDirector and Executive Officer Stock Ownership\u201d of the registrant\u2019s 2026 Proxy Statement.\nEquity Compensation Plan Information\n\n(a)\n(b)\n(c)\nPlan Category\nNumber of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights\nWeighted-Average Exercise Price of Outstanding Options, Warrants and Rights\nNumber of Securities\nRemaining Available for Future Issuance Under Equity Compensation Plans [Excluding Securities Reflected in Column (a)]\nEquity compensation plans approved by security holders\n45,870,110\n(1)\n\u2014\n50,547,885\n(2)(3)\nEquity compensation plans not approved by security holders\n\u2014\n\n\u2014\n\u2014\n\nTotal\n45,870,110\n\n\u2014\n50,547,885\n\n(1)\n The number of restricted stock units to be settled in shares.\n(2)\nAvailable shares can be granted in the form of restricted stock or other stock-based awards. Includes 40,903,325 shares available for award under the 2003 Incentive Program, 218,700 shares available for award under the 2004 Non-Employee Director Restricted Stock Plan, and 9,425,860 shares available for award under the Pioneer Natural Resources Company Amended and Restated 2006 Long Term Incentive Plan.\n(3)\nUnder the 2004 Non-Employee Director Restricted Stock Plan approved by shareholders in May 2004, and the related standing resolution adopted by the Board, each non-employee director automatically receives 8,000 shares of restricted stock when first elected to the Board and, if the director remains in office, an additional 2,500 restricted shares each following year. While on the Board, each non-employee director receives the same cash dividends on restricted shares as a holder of regular common stock, but the director is not allowed to sell the shares. The restricted shares may be forfeited if the director leaves the Board early.\nITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE\nIncorporated by reference to the portion entitled \u201cDirector Independence\u201d of the section entitled \u201cCorporate Governance\u201d and the portion entitled \u201cRelated Person Transactions and Procedures\u201d of the section entitled \u201cDirector and Executive Officer Stock Ownership\u201d of the registrant\u2019s 2026 Proxy Statement.\nITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES\nIncorporated by reference to the portion entitled \u201cAudit Committee\u201d of the section entitled \u201cCorporate Governance\u201d and the section entitled \u201cRatification of Independent Auditors\u201d of the registrant\u2019s 2026 Proxy Statement.\nPART IV\nITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES\n(a)\n(1) and (2) Financial Statements:\nSee\nTable of Contents\n of the Financial Section of this report.\n(b)\n(3) Exhibits:\nSee\nIndex to Exhibits\n of this report.\nITEM 16. FORM 10-K SUMMARY\nNone.\n27\nFINANCIAL SECTION\nTABLE OF CONTENTS\nBusiness Profile\n29\nFinancial Information\n30\nFrequently Used Terms\n31\nManagement\u2019s Discussion and Analysis of Financial Condition and Results of Operations\n\nForward-Looking Statements\n36\nOverview\n37\nBusiness Environment\n38\nBusiness Results\n44\nLiquidity and Capital Resources\n58\nTaxes\n61\nEnvironmental Matters\n62\nMarket Risks\n62\nCritical Accounting Estimates\n63\nManagement\u2019s Report on Internal Control over Financial Reporting\n68\nReport of Independent Registered Public Accounting Firm\n69\nConsolidated Financial Statements\n\nStatement of Income\n71\nStatement of Comprehensive Income\n72\nBalance Sheet\n73\nStatement of Cash Flows\n74\nStatement of Changes in Equity\n75\nNotes to Consolidated Financial Statements\n\n1. Summary of Accounting Policies\n76\n2. Earnings Per Share\n80\n3. Disclosures about Segments and Related Information\n80\n4. Pension and Other Postretirement Benefits\n85\n5. Other Comprehensive Income Information\n92\n6. Financial Instruments and Derivatives\n93\n7. Litigation and Other Contingencies\n94\n8. Equity Company Information\n95\n9. Property, Plant\n,\n and Equipment and Asset Retirement Obligations\n97\n10. Additional Working Capital Information\n99\n11. Investments, Advances\n,\n and Long-Term Receivables\n99\n12. Long-Term Debt\n100\n13. Leases\n102\n14. Miscellaneous Financial Information\n103\n15. Income and Other Taxes\n104\n16. Accounting for Suspended Exploratory Well Costs\n109\n17. Cash Flow Information\n110\n18. Incentive Program\n110\n19. Divestment Activities\n112\n20. Mergers and Acquisitions\n112\nSupplemental Information on Oil and Gas Exploration and Production Activities\n114\n28\nTable of Contents\nFinancial Table of Contents\n\nBUSINESS PROFILE\n\nEarnings (Loss) After\nIncome Taxes\nAverage Capital\nEmployed\n(Non-GAAP)\nReturn on\nAverage Capital\nEmployed\n(Non-GAAP)\nCash Capital\nExpenditures\n(\nNon-GAAP)\nFinancial\n2025\n2024\n2025\n2024\n2025\n2024\n2025\n2024\n\n(millions of dollars)\n(millions of dollars)\n(percent)\n(millions of dollars)\nUpstream\n\nUnited States\n5,063\n6,426\n118,142\n85,285\n4.3\n7.5\n15,907\n11,276\nNon-U.S.\n16,291\n18,964\n91,792\n93,390\n17.7\n20.3\n8,752\n8,985\nTotal\n21,354\n25,390\n209,934\n178,675\n10.2\n14.2\n24,659\n20,261\nEnergy Products\nUnited States\n2,992\n2,099\n13,495\n13,190\n22.2\n15.9\n752\n705\nNon-U.S.\n4,431\n1,934\n24,188\n21,135\n18.3\n9.2\n955\n1,513\nTotal\n7,423\n4,033\n37,683\n34,325\n19.7\n11.7\n1,707\n2,218\nChemical Products\nUnited States\n903\n1,627\n14,207\n14,277\n6.4\n11.4\n843\n671\nNon-U.S.\n(103)\n950\n15,303\n14,760\n(0.7)\n6.4\n552\n1,212\nTotal\n800\n2,577\n29,510\n29,037\n2.7\n8.9\n1,395\n1,883\nSpecialty Products\nUnited States\n1,200\n1,576\n2,025\n2,035\n59.3\n77.4\n381\n145\nNon-U.S.\n1,657\n1,476\n6,048\n6,183\n27.4\n23.9\n242\n263\nTotal\n2,857\n3,052\n8,073\n8,218\n35.4\n37.1\n623\n408\nCorporate and Financing\n(3,590)\n(1,372)\n20,575\n27,847\n\u2014\n\u2014\n613\n877\nCorporate total\n28,844\n\n33,680\n\n305,775\n\n278,102\n\n9.3\n\n12.7\n\n28,997\n\n25,647\n\nSee\nFrequently Used Terms\nfor a definition and calculation of capital employed, return on average capital employed, and cash capital expenditures.\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\nOperating\n2025\n2024\n\n2025\n2024\nNet liquids production\n(thousands of barrels daily)\n\nRefinery throughput\n(thousands of barrels daily)\n\nUnited States\n1,522\n1,248\nUnited States\n1,927\n1,865\nNon-U.S.\n1,805\n1,739\nNon-U.S.\n2,052\n2,035\nTotal\n3,329\n2,987\nTotal\n3,979\n3,900\nNatural gas production available for sale\n(millions of cubic feet daily)\n\nEnergy Products sales\n(2)\n(thousands of barrels daily)\n\nUnited States\n3,364\n2,887\nUnited States\n2,852\n2,722\nNon-U.S.\n5,077\n5,191\nNon-U.S.\n2,740\n2,696\nTotal\n8,442\n8,078\nTotal\n5,593\n5,418\nOil-equivalent production\n\n(1)\n(thousands of oil-equivalent barrels daily)\n4,736\n4,333\nChemical Products sales\n(2)\n(thousands of metric tons)\nUnited States\n6,977\n7,038\n\nNon-U.S.\n14,326\n12,354\nTotal\n21,303\n19,392\nSpecialty Products sales\n(2)\n(thousands of metric tons)\nUnited States\n1,894\n1,922\nNon-U.S.\n5,897\n5,745\n\nTotal\n7,791\n7,666\n(1)\nNatural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels.\n(2)\nData reported net of purchases/sales contracts with the same counterparty.\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\n29\nTable of Contents\nFinancial Table of Contents\n\nFINANCIAL INFORMATION\n(millions of dollars, except where stated otherwise)\n2025\n2024\n2023\nSales and other operating revenue\n323,905\n339,247\n334,697\nNet income (loss) attributable to ExxonMobil\n28,844\n33,680\n36,010\nEarnings (loss) per common share (dollars)\n6.70\n7.84\n8.89\nEarnings (loss) per common share \u2013 assuming dilution (dollars)\n6.70\n7.84\n8.89\nEarnings (loss) to average ExxonMobil share of equity (percent)\n11.0\n14.4\n18.0\nWorking capital\n11,052\n21,683\n31,293\nRatio of current assets to current liabilities (times)\n1.15\n1.31\n1.48\nAdditions to property, plant, and equipment\n(1)\n31,476\n109,332\n29,038\nProperty, plant, and equipment, less allowances\n299,373\n294,318\n214,940\nTotal assets\n448,980\n453,475\n376,317\nExploration expenses, including dry holes\n1,007\n826\n751\nResearch and development costs\n1,228\n987\n879\nLong-term debt\n34,241\n36,755\n37,483\nTotal debt\n43,537\n41,710\n41,573\nDebt to capital (percent)\n14.0\n13.4\n16.4\nNet debt to capital (percent)\n(2)\n11.0\n6.5\n4.5\nExxonMobil share of equity at year-end\n259,386\n263,705\n204,802\nExxonMobil share of equity per common share (dollars)\n62.07\n60.58\n51.57\nWeighted-average number of common shares outstanding (millions)\n4,305\n4,298\n4,052\nNumber of regular employees at year-end (thousands)\n(3)\n57.9\n60.9\n61.5\n(1)\n Includes non-cash additions. See\nNote 20\n for additions resulting from the Pioneer acquisition in 2024.\n(2)\n Net debt is total debt less cash and cash equivalents excluding restricted cash. Net debt to capital ratio is net debt divided by net debt plus total equity. Total debt is the sum of notes and loans payable and long-term debt, as reported in the Consolidated Balance Sheet.\n(3)\nRegular employees are defined as active executive, management, professional, technical, administrative, and wage employees who work full time or part time for the Corporation and are covered by the Corporation\u2019s benefit plans and programs.\n\n30\nTable of Contents\nFinancial Table of Contents\n\nFREQUENTLY USED TERMS\nListed below are definitions of several of ExxonMobil\u2019s key business and financial performance measures. These definitions are provided to facilitate understanding of the terms and their calculations.\nCash Flow from Operations and Asset Sales\n(Non-GAAP)\nCash flow from operations and asset sales is the sum of the net cash provided by operating activities and proceeds from asset sales and returns of investments from the Consolidated Statement of Cash Flows. This cash flow reflects the total sources of cash both from operating the Corporation\u2019s assets and from the divesting of assets. The Corporation employs a long-standing and regular, disciplined review process to ensure that assets are contributing to the Corporation\u2019s strategic objectives. Assets are divested when they are no longer meeting these objectives or are worth considerably more to others. Because of the regular nature of this activity, the Company believes it is useful for investors to consider proceeds associated with the sales of subsidiaries; property, plant, and equipment; and sales and returns of investments together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities, including shareholder distributions.\nCash Flow From Operations and Asset Sales\n(millions of dollars)\n2025\n2024\n2023\nNet cash provided by operating activities\n51,970\n55,022\n55,369\nProceeds associated with sales of subsidiaries, property, plant, and equipment, and sales and returns of investments\n3,158\n4,987\n4,078\nCash flow from operations and asset sales\n\n(Non-GAAP)\n55,128\n\n60,009\n\n59,447\n\nCapital Employed\n(Non-GAAP)\nCapital employed is a measure of net investment. When viewed from the perspective of how the capital is used by the businesses, it includes ExxonMobil\u2019s net share of property, plant, and equipment, and other assets less liabilities, excluding both short-term and long-term debt. When viewed from the perspective of the sources of capital employed in total for the Corporation, it includes ExxonMobil\u2019s share of total debt and equity. Both of these views include ExxonMobil\u2019s share of amounts applicable to equity companies, which the Corporation believes should be included to provide a more comprehensive measure of capital employed.\nCapital Employed\n(millions of dollars)\n2025\n2024\n2023\nBusiness uses: asset and liability perspective\n\nTotal assets\n448,980\n453,475\n376,317\nLess liabilities and noncontrolling interests share of assets and liabilities\nTotal current liabilities excluding notes and loans payable\n(63,034)\n(65,352)\n(61,226)\nTotal long-term liabilities excluding long-term debt\n(75,783)\n(75,807)\n(60,980)\nNoncontrolling interests share of assets and liabilities\n(8,895)\n(8,069)\n(8,878)\nAdd ExxonMobil share of debt-financed equity company net assets\n2,793\n3,242\n3,481\nTotal capital employed\n (Non-GAAP)\n304,061\n\n307,489\n\n248,714\n\nTotal corporate sources: debt and equity perspective\nNotes and loans payable\n9,296\n4,955\n4,090\nLong-term debt\n34,241\n36,755\n37,483\nExxonMobil share of equity\n259,386\n263,705\n204,802\nLess noncontrolling interests share of total debt\n(1,655)\n(1,168)\n(1,142)\nAdd ExxonMobil share of equity company debt\n2,793\n3,242\n3,481\nTotal capital employed\n(Non-GAAP)\n304,061\n\n307,489\n\n248,714\n\n31\nTable of Contents\nFinancial Table of Contents\n\nFREQUENTLY USED TERMS\nReturn on Average Capital Employed\n(Non-GAAP)\nReturn on average capital employed (ROCE) is a performance measure ratio. From the perspective of the business segments, ROCE is annual business segment earnings divided by average business segment capital employed (average of beginning and end-of-year amounts). These segment earnings include ExxonMobil\u2019s share of segment earnings of equity companies, consistent with our capital employed definition, and exclude the cost of financing. The Corporation\u2019s total ROCE is net income attributable to ExxonMobil excluding the after-tax cost of financing, divided by total corporate average capital employed. The Corporation has consistently applied its ROCE definition for many years and views it as one of the best measures of historical capital productivity in our capital-intensive, long-term industry. Additional measures, which are more cash flow based, are used to make investment decisions.\nReturn on Average Capital Employed\n(millions of dollars)\n2025\n2024\n2023\nNet income (loss) attributable to ExxonMobil\n28,844\n33,680\n36,010\nFinancing costs (after-tax)\nGross third-party debt\n(1,360)\n(1,106)\n(1,175)\nExxonMobil share of equity companies\n(165)\n(196)\n(307)\nAll other financing costs \u2013 net\n2,072\n(252)\n931\nTotal financing costs\n547\n(1,554)\n(551)\nEarnings (loss) excluding financing costs\n (Non-GAAP)\n28,297\n\n35,234\n\n36,561\n\nAverage capital employed (Non-GAAP)\n305,775\n278,102\n243,440\nReturn on average capital employed \u2013 Corporate total\n(Non-GAAP)\n9.3%\n12.7%\n15.0%\nSelected Earnings Driver Definitions\nThe updated earnings drivers introduced in the first quarter of 2024 provide additional visibility into our business results. The Company evaluates these drivers periodically to determine if any enhancements may provide helpful insights to the market. Listed below are descriptions of the earnings drivers:\nAdvantaged Volume Growth.\n Represents earnings impacts from change in volume/mix from advantaged assets, advantaged projects, and high-value products.\n\u2022\nAdvantaged Assets (Advantaged growth projects)\n. Includes Permian, Guyana, and LNG.\n\u2022\nAdvantaged Projects.\n Includes capital projects and programs of work that contribute to Energy, Chemical, and/or Specialty Products segments that drive integration of segments/businesses, increase yield of higher value products, or deliver higher than average returns.\n\u2022\nHigh-Value Products.\n Includes performance products and lower-emission fuels. Performance products (performance chemicals, performance lubricants) refers to products that provide differentiated performance for multiple applications through enhanced properties versus commodity alternatives and bring significant additional value to customers and end-users.\nLower-emission fuels refers to fuels with lower life cycle emissions than conventional transportation fuels for gasoline, diesel, and jet transport.\nBase Volume.\nRepresents all volume/mix drivers not included in Advantaged Volume Growth defined above.\nStructural Cost Savings.\nRepresents after-tax earnings effects of Structural Cost Savings as defined on the next page, including cash operating expenses related to divestments.\nExpenses.\n Represents all expenses otherwise not included in other earnings drivers.\nTiming Effects.\n Represents timing effects that are primarily related to unsettled derivatives (mark-to-market) and other earnings impacts driven by timing differences between the settlement of derivatives and their offsetting physical commodity realizations (due to LIFO inventory accounting).\n32\nTable of Contents\nFinancial Table of Contents\n\nFREQUENTLY USED TERMS\nStructural Cost Savings\n(Non-GAAP)\nStructural Cost Savings describes decreases in cash opex excluding energy and production taxes as a result of operational efficiencies, workforce reductions, divestment-related reductions, and other cost-savings measures that are expected to be sustainable compared to 2019 levels. Relative to 2019, estimated cumulative structural cost savings totaled $15.1\u00a0billion, which included an additional $3.0 billion in 2025. The total change between periods in expenses below will reflect both Structural Cost Savings and other changes in spend, including market drivers, such as inflation and foreign exchange impacts, as well as changes in activity levels and costs associated with new operations, mergers and acquisitions, new business venture developments, and early-stage projects. Structural Cost Savings from new operations, mergers and acquisitions, and new business venture developments are included in the cumulative Structural Cost Savings. Estimates of cumulative annual Structural Cost Savings may be revised depending on whether cost reductions realized in prior periods are determined to be sustainable compared to 2019 levels. Structural Cost Savings are stewarded internally to support management\u2019s oversight of spending over time. This measure is useful for investors to understand the Corporation\u2019s efforts to optimize spending through disciplined expense management.\nCalculation of Structural Cost Savings\n(billions of dollars)\n2019\n2025\nComponents of Operating Costs\nFrom ExxonMobil\u2019s Consolidated Statement of Income\n(U.S. GAAP)\nProduction and manufacturing expenses\n36.8\n42.4\nSelling, general and administrative expenses\n11.4\n11.1\nDepreciation and depletion (includes impairments)\n19.0\n26.0\nExploration expenses, including dry holes\n1.3\n1.0\nNon-service pension and postretirement benefit expense\n1.2\n0.4\nSubtotal\n69.7\n\n81.0\n\nExxonMobil\u2019s share of equity company expenses (Non-GAAP)\n9.1\n10.6\nTotal Adjusted Operating Costs (Non-GAAP)\n78.8\n\n91.6\n\nTotal Adjusted Operating Costs\n (Non-GAAP)\n78.8\n\n91.6\n\nLess:\nDepreciation and depletion (includes impairments)\n19.0\n26.0\nNon-service pension and postretirement benefit expense\n1.2\n0.4\nOther adjustments (includes equity company depreciation\nand depletion)\n3.6\n6.2\nTotal Cash Operating Expenses (Cash Opex) (Non-GAAP)\n55.0\n\n59.0\n\nEnergy and production taxes (Non-GAAP)\n11.0\n14.9\nMarket\nActivity/ Other\nStructural Cost Savings\nTotal Cash Operating Expenses (Cash Opex) excluding Energy and Production Taxes\n (Non-GAAP)\n44.0\n\n+4.9\n+10.3\n-15.1\n44.1\n\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\n33\nTable of Contents\nFinancial Table of Contents\n\nFREQUENTLY USED TERMS\nEarnings (loss) excluding Identified Items\n(Non-GAAP)\nEarnings (loss) excluding Identified Items are earnings (loss) excluding individually significant non-operational events with, typically, an absolute Corporate total earnings impact of at least $250 million in a given quarter. The earnings (loss) impact of an identified item for an individual segment in a given quarter may be less than $250 million when the item impacts several periods or several segments. Earnings/(loss) excluding Identified Items does include non-operational earnings events or impacts that are generally below the $250 million threshold utilized for identified items. Management uses these figures to improve comparability of the underlying business across multiple periods by isolating and removing significant non-operational events from business results. The Corporation believes this view provides investors increased transparency into business results and trends and provides investors with a view of the business as seen through the eyes of management. Earnings (loss) excluding Identified Items is not meant to be viewed in isolation or as a substitute for net income (loss) attributable to ExxonMobil as prepared in accordance with U.S. GAAP.\nUpstream\n2025\n2024\n2023\n(millions of dollars)\nU.S.\nNon-U.S.\nTotal\nU.S.\nNon-U.S.\nTotal\nU.S.\nNon-U.S.\nTotal\nEarnings (loss) (U.S. GAAP)\n5,063\n16,291\n21,354\n6,426\n18,964\n25,390\n4,202\n17,106\n21,308\nImpairments\n(662)\n(422)\n(1,084)\n(360)\n(48)\n(408)\n(1,978)\n(686)\n(2,664)\nGain/(loss) on sale of assets\n\u2014\n\u2014\n\u2014\n\u2014\n385\n385\n305\n\u2014\n305\nTax-related items\n192\n\u2014\n192\n\u2014\n238\n238\n184\n(126)\n58\nIdentified Items\n(471)\n(422)\n(893)\n(360)\n575\n215\n(1,489)\n(812)\n(2,301)\nEarnings (loss) excluding Identified Items\n (Non-GAAP)\n5,534\n\n16,713\n\n22,247\n\n6,786\n\n18,389\n\n25,175\n\n5,691\n\n17,918\n\n23,609\n\nEnergy Products\n2025\n2024\n2023\n(millions of dollars)\nU.S.\nNon-U.S.\nTotal\nU.S.\nNon-U.S.\nTotal\nU.S.\nNon-U.S.\nTotal\nEarnings (loss) (U.S. GAAP)\n2,992\n4,431\n7,423\n2,099\n1,934\n4,033\n6,123\n6,019\n12,142\nImpairments\n(153)\n(113)\n(266)\n(34)\n(59)\n(93)\n\u2014\n\u2014\n\u2014\nGain/(loss) on sale of assets\n\u2014\n720\n720\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nTax-related items\n34\n(6)\n28\n\u2014\n172\n172\n192\n(48)\n144\nIdentified Items\n(118)\n601\n483\n(34)\n113\n79\n192\n(48)\n144\nEarnings (loss) excluding Identified Items\n (Non-GAAP)\n3,110\n\n3,830\n\n6,940\n\n2,133\n\n1,821\n\n3,954\n\n5,931\n\n6,067\n\n11,998\n\nChemical Products\n2025\n2024\n2023\n(millions of dollars)\nU.S.\nNon-U.S.\nTotal\nU.S.\nNon-U.S.\nTotal\nU.S.\nNon-U.S.\nTotal\nEarnings (loss) (U.S. GAAP)\n903\n(103)\n800\n1,627\n950\n2,577\n1,626\n11\n1,637\nImpairments\n(130)\n(190)\n(320)\n(43)\n(52)\n(95)\n(21)\n(273)\n(294)\nTax-related items\n50\n\u2014\n50\n\u2014\n\u2014\n\u2014\n53\n\u2014\n53\nOther\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(147)\n(147)\nIdentified Items\n(80)\n(190)\n(270)\n(43)\n(52)\n(95)\n32\n(420)\n(388)\nEarnings (loss) excluding Identified Items\n (Non-GAAP)\n983\n\n87\n\n1,070\n\n1,670\n\n1,002\n\n2,672\n\n1,594\n\n431\n\n2,025\n\nSpecialty Products\n2025\n2024\n2023\n(millions of dollars)\nU.S.\nNon-U.S.\nTotal\nU.S.\nNon-U.S.\nTotal\nU.S.\nNon-U.S.\nTotal\nEarnings (loss) (U.S. GAAP)\n1,200\n1,657\n2,857\n1,576\n1,476\n3,052\n1,536\n1,178\n2,714\nImpairments\n(18)\n(12)\n(30)\n(4)\n(8)\n(12)\n\u2014\n(82)\n(82)\nTax-related items\n30\n\u2014\n30\n\u2014\n(1)\n(1)\n12\n5\n17\nOther\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(28)\n(28)\nIdentified Items\n12\n(12)\n\u2014\n(4)\n(9)\n(13)\n12\n(105)\n(93)\nEarnings (loss) excluding Identified Items\n(Non-GAAP)\n\n1,188\n\n1,669\n\n2,857\n\n1,580\n\n1,485\n\n3,065\n\n1,524\n\n1,283\n\n2,807\n\n34\nTable of Contents\nFinancial Table of Contents\n\nFREQUENTLY USED TERMS\nCorporate and Financing\n(millions of dollars)\n2025\n2024\n2023\nEarnings (loss) (U.S. GAAP)\n(3,590)\n(1,372)\n(1,791)\nImpairments\n(155)\n\u2014\n\u2014\nGain/(loss) on sale of assets\n\u2014\n30\n\u2014\nTax-related items\n(11)\n\u2014\n76\nRestructuring charges\n(419)\n\u2014\n\u2014\nIdentified Items\n(585)\n30\n76\nEarnings (loss) excluding Identified Items\n(Non-GAAP)\n(3,005)\n(1,402)\n(1,867)\nCorporate Total\n(millions of dollars)\n2025\n2024\n2023\nNet income (loss) attributable to ExxonMobil (U.S. GAAP)\n28,844\n33,680\n36,010\nImpairments\n(1,855)\n(608)\n(3,040)\nGain/(loss) on sale of assets\n720\n415\n305\nTax-related items\n288\n409\n348\nRestructuring charges\n(419)\n\u2014\n\u2014\nOther\n\u2014\n\u2014\n(175)\nIdentified Items\n(1,265)\n216\n(2,562)\nEarnings (loss) excluding Identified Items\n(Non-GAAP)\n30,109\n\n33,464\n\n38,572\n\nReferences in this discussion to Corporate earnings (loss) mean net income (loss) attributable to ExxonMobil (U.S. GAAP) from the Consolidated Statement of Income. Unless otherwise indicated, references to earnings (loss), Upstream, Energy Products, Chemical Products, Specialty Products, and Corporate and Financing earnings (loss), and earnings (loss) per share are ExxonMobil's share after excluding amounts attributable to noncontrolling interests.\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\nCash Capital Expenditures\n(Non-GAAP)\nCash capital expenditures (Cash Capex) are the\n sum of additions to property, plant, and equipment; additional investments and advances; and other investing activities including collection of advances; reduced by inflows from noncontrolling interests for major projects, each from the Consolidated Statement of Cash Flows. The Company believes it is a useful measure for investors to understand the cash impact of investments in the business, which is in line with industry practice.\n(millions of dollars)\n2025\n2024\nAdditions to property, plant, and equipment\n28,358\n24,306\nAdditional investments and advances\n4,133\n3,299\nOther investing activities including collection of advances\n(3,406)\n(1,926)\nInflows from noncontrolling interests for major projects\n(88)\n(32)\nTotal Cash Capex\n (Non-GAAP)\n28,997\n\n25,647\n\n35\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\n\nFORWARD-LOOKING STATEMENTS\nStatements related to future events; projections; descriptions of strategic, operating, and financial plans and objectives; statements of future ambitions and plans; future earnings power; potential addressable markets; and other statements of future events or conditions are forward-looking statements. Similarly, discussion of roadmaps or future plans related to carbon capture, transportation and storage, hydrogen and ammonia, lower-emission fuels, direct air capture, Proxxima\nTM\n resin systems, carbon materials, low-carbon data centers, lithium, and other future plans to reduce emissions and emissions intensity of ExxonMobil, its affiliates, and third parties are dependent on future market factors, such as continued technological progress, stable policy support, and timely rule-making and permitting, and represent forward-looking statements.\nActual future results, including financial and operating performance; potential earnings, cash flow, dividends or shareholder returns, including the timing and amounts of share repurchases; total capital expenditures and mix, including allocations of capital to low-carbon and other new investments; realization and maintenance of structural cost reductions and efficiency gains, including the ability to offset inflationary pressure; plans to reduce future emissions and emissions intensity, including ambitions to reach Scope 1 and Scope 2 net zero from operated assets by 2050, to reach Scope 1 and 2 net zero in integrated Upstream Permian Basin unconventional operated assets by 2035, to eliminate routine flaring in-line with World Bank Zero Routine Flaring, to reach near-zero methane emissions from operated assets and other methane initiatives, and to meet ExxonMobil\u2019s emission reduction plans and goals, divestment and start-up plans, and associated project plans as well as technology advances, including the timing and outcome of projects to capture, transport and store CO2, produce hydrogen and ammonia, produce lower-emission fuels, produce Proxxima\nTM\n resin systems, produce carbon materials, produce lithium, and use plastic waste as feedstock for advanced recycling; future debt levels and credit ratings; business and project plans, timing, costs, capacities and profitability; resource recoveries and production rates; and planned Denbury and Pioneer integrated benefits, could differ materially due to a number of factors.\nThese include global or regional changes or imbalances in the supply and demand for oil, natural gas, petrochemicals, and feedstocks and other market factors; economic conditions and seasonal fluctuations that impact prices, differentials, and volume/mix for our products; developments or changes in local, national, or international laws, regulations, taxes, trade sanctions, trade tariffs, or policies affecting our business, such as government policies supporting lower-carbon and new market investment opportunities, the punitive European taxes on the oil and gas sector and unequal support for different technological methods of emissions reduction or evolving, ambiguous, and unharmonized voluntary and mandatory standards or extraterritorial laws and regulations imposed by various jurisdictions related to sustainability and greenhouse gas reporting; timely granting of governmental permits, licenses, and certifications; uncertain impacts of deregulation on the legal and regulatory environment; changes in interest and exchange rates; variable impacts of trading activities on our margins and results each quarter; actions of co-venturers or partners, competitors, and commercial counterparties, including suppliers and customers; government actions in pursuit of national energy and security policies and priorities affecting our business; the outcome of commercial negotiations, including final agreed terms and conditions; the outcome of competitive bidding and project awards; the ability to access debt markets on favorable terms or at all; the occurrence, pace, rate of recovery and effects of public health crises; adoption of regulatory incentives consistent with law; reservoir performance and optimization, including variability and timing factors applicable to unconventional resources, the success of new unconventional technologies, and the ability of new technologies to improve recovery relative to competitors; the level, outcome, and timing of exploration and development projects and decisions to invest in future reserves and resources; timely completion of construction projects and commencement of start-up operations, including reliance on third-party suppliers and service providers; final management approval of future projects and any changes in the scope, terms, costs, or assumptions of such projects as approved; the actions of governments, non-governmental organizations, or other actors against our core business activities and acquisitions, divestitures or financing opportunities; war, civil unrest, armed hostilities, attacks against the Company or industry, and other geopolitical or security disturbances, including disruption of land or sea transportation routes or distribution or shipping channels; decoupling of economies, disruption, realignment, or breaking of current or historical trade or military alliances or global trade or supply chain networks; escalating geopolitical volatility, including regime changes; expropriations, seizures, or capacity, insurance, shipping, import or export limitations imposed directly or indirectly by governments or laws; opportunities for potential acquisitions, investments or divestments and satisfaction of applicable conditions to closing, including timely regulatory approvals; the capture of efficiencies within and between business lines and the ability to maintain near-term cost reductions as ongoing efficiencies without impairing our competitive positioning; unforeseen technical or operating disruptions or difficulties and unplanned maintenance; the development and competitiveness of alternative energy and emission reduction technologies; consumer preferences including willingness and ability to pay for reduced emission products; the results of research programs and the ability to bring new technologies to commercial scale on a cost-competitive basis; and other factors discussed under\nItem 1A\n.\nForward-looking and other statements regarding environmental and other sustainability efforts and aspirations are not an indication that these statements are material to investors or require disclosure in our filing with the SEC or any other regulatory authority. In addition, historical, current, and forward-looking environmental and other sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future, including future rule-making.\n36\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nEnergy demand models are forward-looking by nature and aim to replicate system dynamics of the global energy system, requiring simplifications. The reference to any scenario in this report, including any potential net-zero scenarios, does not imply ExxonMobil views any particular scenario as likely to occur. In addition, energy demand scenarios require assumptions on a variety of parameters. As such, the outcome of any given scenario using an energy demand model comes with a high degree of uncertainty. Third-party scenarios discussed in this report reflect the modeling assumptions and outputs of their respective authors, not ExxonMobil, and their use by ExxonMobil is not an endorsement by ExxonMobil of their underlying assumptions, likelihood, or probability. Investment decisions are made on the basis of ExxonMobil\u2019s separate planning process. Any use of the modeling of a third-party organization within this report does not constitute or imply an endorsement by ExxonMobil of any or all of the positions or activities of such organization.\nActions needed to advance ExxonMobil\u2019s 2030 greenhouse gas emission-reductions plans are incorporated into its medium-term business plans, which are updated annually. The reference case for planning beyond 2030 is based on ExxonMobil\u2019s Global Outlook (Outlook) research and publication. The Outlook is reflective of the existing global policy environment and an assumption of increasing policy stringency and technology improvement to 2050. Current trends for policy stringency and development of lower-emission solutions are not yet on a pathway to achieve net-zero by 2050. As such, the Outlook does not project the degree of required future policy and technology advancement and deployment for the world, or ExxonMobil, to meet net zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the Outlook, and ExxonMobil\u2019s business plans will be updated accordingly. References to projects or opportunities may not reflect investment decisions made by ExxonMobil or its affiliates. Individual projects or opportunities may advance based on a number of factors, including availability of stable and supportive policy, permitting, technological advancement for cost-effective abatement, insights from the Corporate planning process, and alignment with our partners and other stakeholders. Capital investment guidance in lower-emission investments is based on our Corporate Plan; however, actual investment levels will be subject to the availability of the opportunity set, public policy support, and focused on returns.\nThe term \u201cproject\u201d as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.\nOVERVIEW\nThe following discussion and analysis of ExxonMobil\u2019s financial results, as well as the accompanying financial statements and related notes to consolidated financial statements to which they refer, are the responsibility of the management of Exxon Mobil Corporation. The Corporation\u2019s accounting and financial reporting fairly reflect its integrated business model involving exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals, and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen and ammonia, lower-emission fuels, Proxxima\nTM\n resin systems, carbon materials, low-carbon data centers, and lithium. ExxonMobil's reportable segments are Upstream, Energy Products, Chemical Products, and Specialty Products. Where applicable, ExxonMobil voluntarily discloses additional U.S., non-U.S., and regional splits to help investors better understand the Company's operations.\nThe Company is organized along three businesses \u2013 Upstream, Product Solutions, and Low Carbon Solutions, aligning along market-focused value chains. Product Solutions consists of Energy Products, Chemical Products, and Specialty Products. Low Carbon Solutions is included in Corporate and Financing as the business continues to mature through commercialization and deployment of technology. The businesses are supported by centralized service-delivery groups, including Global Projects, Technology and Engineering, Global Operations, Sustainability, Global Trading, Supply Chain, and Global Business Solutions.\nExxonMobil, with its resource base, financial strength, disciplined investment approach, and technology portfolio, is well-positioned to participate in substantial investments to develop new supplies of reliable and affordable lower-emission energy and other critical products. The Company\u2019s integrated business model, with significant investments in the Upstream, Energy Products, Chemical Products, and Specialty Products segments and Low Carbon Solutions businesses, generally reduces the Corporation\u2019s risk from changes in commodity prices. While commodity prices depend on supply and demand and may be volatile on a short-term basis, ExxonMobil\u2019s investment decisions are grounded on fundamentals reflected in our long-term business outlook, and use a disciplined approach in selecting and pursuing the most attractive investment opportunities which target a low cost of supply to ensure long-term competitiveness. The annual Corporate Plan process establishes the economic assumptions used for evaluating investments and sets operating and capital objectives. The Global Outlook (Outlook), developed annually, is the foundation for the Corporate Plan assumptions. Price ranges for crude oil and natural gas, including price differentials, refinery and chemical margins, volumes, development and operating costs, including greenhouse gas emissions pricing, and foreign currency exchange rates are part of the Corporate Plan assumptions developed annually. Corporate Plan volume projections are based on individual field production profiles, which are also updated at least annually. Major investment opportunities are evaluated over a range of potential market conditions. All major investments are reappraised to ensure we learn from our decisions, and the development and execution of the project. Lessons learned are incorporated in future projects.\n37\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nBUSINESS ENVIRONMENT\nLong-Term Business Outlook\nExxonMobil\u2019s business planning is underpinned by a deep understanding of long-term market fundamentals. These fundamentals include supply and demand trends; the scale and variety of energy needs worldwide; capability, practicality, and affordability of energy alternatives, including lower-carbon solutions; greenhouse gas emission-reduction technologies; and relevant government policies. The Outlook considers these fundamentals to form the basis for the Company\u2019s long-term business planning, investment decisions, and research programs. The Outlook reflects the Company\u2019s view of global energy demand and supply through 2050. It is a projection based on current trends in technology, government policies, consumer preferences, geopolitics, and economic development.\nIn addition, ExxonMobil considers a range of scenarios, including remote scenarios, to help inform perspective of the future and enhance strategic thinking over time. Included in the range of these scenarios are the Intergovernmental Panel on Climate Change (IPCC) Likely Below 2\u00b0C scenarios and three scenarios from the International Energy Agency (IEA): IEA Stated Policies Scenario (STEPS; 2025 World Energy Outlook (WEO)), which reflects a sector-by-sector assessment of current policy in place and those announced by governments; IEA Announced Pledges Scenario (APS; 2024 WEO), which reflects aspirational government targets met on time and in full; and IEA Net Zero Emissions by 2050 Scenario (NZE; 2025 WEO), which the IEA describes as highly ambitious and challenging, acknowledging that society is not currently on the IEA NZE pathway. No single transition pathway can be reasonably predicted, given the wide range of uncertainties. Key unknowns include yet-to-be-developed or changes in developed government policies, market conditions, and advances in technology that may influence the cost, pace, and potential availability of certain pathways. Scenarios that employ a full complement of technology options are likely to provide the most economically efficient pathways.\nUsing our own experts and third-party sources, we monitor a variety of signposts that may indicate a potential shift in the energy transition. For example, the regional pace of the transition could be influenced by the cost of new technologies compared to existing or alternative energy sources. To effectively evaluate the pace of change, ExxonMobil uses many scenarios to help identify signposts that provide leading indicators of future developments and allow for timely adjustments to future versions of the Outlook.\nDeveloping countries projected to drive energy demand growth\nPrimary energy - Quadrillion Btu\nSource: ExxonMobil 2025 Global Outlook\nBy 2050, the world\u2019s population is projected to be around 9.7 billion people, or nearly 2 billion more than in 2024. Coincident with this population increase, the Outlook projects worldwide economic growth to average approximately 2.5 percent per year, with economic output nearly doubling by 2050 compared to 2024. As economies and populations grow, and as living standards improve for billions of people, the need for energy is expected to continue to rise. Even with significant efficiency gains, global energy demand is projected to rise by over 10 percent from 2024 to 2050. This increase in energy demand is expected to be driven by developing countries (i.e., those that are not member nations of the Organization for Economic Co-operation and Development (OECD)). By contrast, energy use in developed nations is expected to decline by more than 10 percent as efficiency improves.\nAs expanding prosperity drives global energy demand higher, increasing use of energy-efficient technologies and practices as well as lower-emission products will continue to help significantly reduce energy consumption and CO2 emissions per unit of economic output over time. Substantial efficiency gains are likely in all key aspects of the world\u2019s economy through 2050, affecting energy requirements for power generation, transportation, industrial applications, and residential and commercial needs.\nUnder our Outlook, global electricity demand is expected to increase more than 70 percent from 2024 to 2050, with developing countries likely to account for approximately 80 percent of the increase. Consistent with this projection, power generation is expected to remain the largest and fastest growing major segment of global primary energy demand, supported by a wide variety of energy sources. The share of coal-fired generation is expected to decline substantially to approximately 15 percent of the world\u2019s electricity in 2050, versus approximately 35 percent in 2024, in part due to policies to improve air quality as well as reduce greenhouse gas emissions to address risks related to climate change. From 2024 to 2050, the amount of electricity supplied using natural gas, nuclear power, and renewables is expected to more than double, accounting for the entire growth in electricity supplies and offsetting the reduction of coal. Electricity from wind and solar is expected to increase nearly 400 percent, helping total renewables (including other sources, e.g., hydropower) to account for approximately 90 percent of the increase in electricity supplies through 2050. Total renewables are expected to reach over 50 percent of global electricity supplies by 2050. Natural gas and nuclear are expected to be about 20 percent and 10 percent, respectively, of global electricity supplies by 2050. Supplies of electricity by energy type will reflect significant differences across regions reflecting a wide range of factors, including the cost and availability of various energy supplies and policy developments.\n38\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nEnergy for transportation - including cars, trucks, ships, trains, and airplanes - is expected to increase by nearly 25 percent from 2024 to 2050. Transportation energy demand is expected to account for over 50 percent of the growth in liquid fuels demand worldwide over this period. Light-duty vehicle demand for liquid fuels is projected to have peaked this decade, and then decline to levels seen in the early-2010s by 2050, as the impact of better fuel economy and significant growth in electric cars, led by China, Europe, and the United States, work to offset growth in the worldwide car fleet of about 60 percent. By 2050, light-duty vehicles are expected to account for around 20 percent of global liquid fuels demand. During the same time period, nearly all the world\u2019s commercial transportation fleets are expected to continue to run on liquid fuels, including biofuels, which are expected to be widely available and offer practical advantages in providing a large quantity of energy in small volumes.\nAlmost half of the world\u2019s energy use is dedicated to industrial activity. As the global middle class continues to grow, demand for durable products, appliances, and consumable goods will increase. Industry uses energy products both as a fuel and as a feedstock for chemicals, asphalt, lubricants, waxes, and other specialty products. The Outlook anticipates technology advances, as well as the increasing shift toward cleaner forms of energy, such as electricity and natural gas, with coal declining. Demand for oil will continue to grow as a feedstock for industry.\nAs populations grow and prosperity rises, more energy will be needed to power homes, offices, schools, shopping centers, hospitals, et cetera Combined residential and commercial energy demand is projected to rise by around 15 percent through 2050. Led by the growing economies of developing nations, average worldwide household electricity use is expected to rise more than 60 percent between 2024 and 2050.\nLiquid fuels provide the largest share of global energy supplies today reflecting broad-based availability, affordability, ease of transportation, and fitness as a practical solution to meet a wide variety of needs. By 2050, global demand for liquid fuels is projected to grow to nearly 115 million oil-equivalent barrels per day, an increase of about 10 percent from 2024. The non-OECD share of global liquid fuels demand is expected to increase to about 70 percent by 2050, as liquid fuels demand in the OECD is expected to decline by more than 25 percent. Much of the global liquid fuels demand today is met by crude production from conventional sources; these supplies will remain important, and significant development activity is expected to offset much of the natural declines from these fields. At the same time, a variety of supply sources - including tight oil, deepwater, oil sands, natural gas liquids, and biofuels - are expected to grow to help meet rising demand. Timely investments will remain critical to meeting global needs with reliable and affordable supplies.\nNatural gas is a lower-emission, versatile, and practical fuel for a wide variety of applications. Global natural gas demand is expected to rise nearly 20 percent from 2024 to 2050, with approximately 70 percent of that increase coming from the Asia Pacific region. Significant growth in supplies of unconventional gas - the natural gas found in shale and other tight rock formations - will help meet these needs. In total, over 40 percent of the growth in natural gas supplies is expected to come from unconventional sources. At the same time, conventionally-produced natural gas is likely to remain the cornerstone of global supply, meeting around two-thirds of worldwide demand in 2050. LNG trade will expand significantly, meeting about 75 percent of the increase in global demand growth, with much of this supply expected to help meet rising demand in the Asia Pacific region.\n39\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nOil and natural gas projected to play a critical role in the global energy mix\n\u00a0\u00a0\u00a0\u00a0\u00a0Primary energy - Quadrillion Btu\nPercent of primary energy\nSource: ExxonMobil 2025 Global Outlook\n\u00a0\u00a0\u00a0\u00a0Source: ExxonMobil 2025 Global Outlook\n* Electricity and hydrogen are secondary energies derived from the primary energies shown.\n**Includes biomass, biofuels, hydropower, and geothermal.\nThe world\u2019s energy mix is highly diverse and will remain so through 2050. Oil is expected to continue as the largest source of energy with its share remaining close to 30 percent in 2050. Coal and natural gas are the next largest sources of energy today, with the share of natural gas growing to more than 25 percent by 2050, while the share of coal falls to about half that of natural gas. Nuclear power is projected to grow, as many nations are likely to expand nuclear capacity to address rising electricity needs as well as energy security and environmental issues. Total renewable energy is expected to exceed 20 percent of global energy by 2050, with other renewables (e.g., biomass, hydropower, geothermal) contributing a combined share of more than 10 percent. Total energy supplied from wind and solar is expected to increase rapidly, growing nearly 350 percent from 2024 to 2050, when they are projected to be greater than 10 percent of the world energy mix.\nDecarbonization of industrial activities will require a suite of lower-carbon technologies supported by stable policies. Lower-emission fuels, hydrogen-based fuels, and carbon capture and storage are three key lower-carbon solutions needed to support a lower-emission future, in addition to wind and solar. Along with electrification, lower-emission fuels are expected to play an important role in decarbonization of the transportation sector, particularly in hard-to-decarbonize areas, such as aviation. Hydrogen will be a key enabler replacing traditional furnace fuel to decarbonize the industrial sector. Hydrogen and hydrogen-based fuels like ammonia are also expected to make inroads into commercial transportation as technology improves to lower its cost and policy develops to support the needed infrastructure development. Carbon capture and storage on its own, or in combination with hydrogen production, is among the few proven technologies that could enable CO2 emission reductions from high-emitting and hard-to-decarbonize sectors such as power generation and heavy industries, including manufacturing, refining, and petrochemicals.\n40\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nSignificant oil and natural gas investment needed to meet projected global demand\nProjected global oil supply and demand\nProjected global natural gas supply and demand\nMillion barrels per day\nBillion cubic feet per day\nExcludes biofuels; IEA STEPS and IEA NZE Source: IEA WEO 2025; IEA APS Source: IEA WEO 2024; Global Outlook Source: ExxonMobil 2025 Global Outlook; IPCC Likely Below 2\u00b0C Average Source: IPCC AR6 Scenarios Database hosted by IIASA release 1.0 average IPCC C3:311 \"Likely below 2\u00b0C\" scenarios used; decline rates based on 10-yr Compound Annual Grown Rate (CAGR)\nExcludes flaring; IEA STEPS and IEA NZE Source: IEA WEO 2025; IEA APS Source: IEA WEO 2024; Global Outlook Source: ExxonMobil 2025 Global Outlook; IPCC Likely Below 2\u00b0C Average Source: IPCC AR6 Scenarios Database hosted by IIASA release 1.0 average IPCC C3: 311 \"Likely below 2\u00b0C\" scenarios used; decline rates based on 10-yr CAGR\nOur Outlook projects that oil demand will remain above 100 million barrels per day to 2050. Even under the average of IPCC Likely Below 2\u00b0C scenarios, oil demand still comes to 65 million barrels per day in 2050 \u2013 about two thirds of current consumption.\nOur Outlook shows oil production declines at a rate of about 15 percent per year. At that rate, in the absence of continued investment, by 2030 oil supplies would fall from 100 million barrels per day to less than 30 million barrels, more than 70 million barrels per day short of what is needed to meet demand. Limiting investment to only existing fields would slow the decline to about 4 percent; however, this would still be well below the oil demand in the average of IPCC Likely Below 2\u00b0C scenarios.\nTo meet projected demand, the Corporation anticipates that the world\u2019s available oil and gas resource base will grow, not only from new discoveries, but also from increases in previously discovered fields. Technology will underpin these increases. The investments to develop and supply resources to meet global demand through 2050 will be significant and would be needed to meet even rapidly declining demand for oil and gas envisioned in aggressive decarbonization scenarios.\nInternational accords and underlying regional and national regulations covering greenhouse gas emissions continue to evolve with uncertain timing and outcome, making it difficult to predict their business impact. For many years, the Corporation has taken into account policies established to reduce energy-related greenhouse gas emissions in its long-term Outlook. The climate accord reached at the 2015 Conference of the Parties (COP 21) in Paris set many new goals, and many related policies are still emerging. Our Outlook reflects an environment with increasingly stringent climate policies and seeks to identify potential impacts of these climate-related government policies, which often target specific sectors. For purposes of the Outlook, a proxy cost on energy-related CO2 emissions is assumed, based on regional considerations and relative levels of economic development, and by 2050, reaches up to $150 per metric ton for OECD nations and up to $100 per metric ton for non-OECD nations. As people and nations look for ways to reduce risks of global climate change, they will continue to need practical solutions that do not jeopardize the affordability or reliability of the energy they need. The Corporation continues to monitor the updates to the Nationally Determined Contributions (NDCs) that are submitted by nations that are signatories to the Paris Agreement, as well as other policy developments in light of net-zero ambitions formulated by some nations.\nThe information provided in the Outlook includes ExxonMobil\u2019s internal estimates and projections based upon internal data and analyses as well as publicly available information from external sources including the International Energy Agency.\n41\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nProgress Reducing Emissions\nThe Corporation\u2019s strategy seeks to maximize the advantages of our scale, business integration, leading technology, execution excellence, and our people to build globally competitive businesses that lead industry in earnings and cash flow growth across a range of future scenarios. We strive to play a leading role, regardless of how an energy transition unfolds. Across our portfolio of opportunities, we retain investment flexibility to maximize shareholder value. In 2022, we announced our ambition to achieve net-zero Scope 1 and 2 greenhouse gas emissions in our operated assets by 2050, with advancements in technology and clear, consistent, stable, and effective government policies. Society's progress continues to lag in these areas. Without supportive policies and the innovations they drive, net zero 2050 will remain out of reach \u2014 for society and ExxonMobil. Our net-zero ambition is backed by a comprehensive approach centered on detailed emission-reduction roadmaps for our major operated assets that were completed in 2022. The roadmaps build on the Company\u2019s 2030 emission-intensity reduction plans. We continue to update the roadmaps, including to account for portfolio changes, to reflect technology and policy, and to account for the many potential pathways and pace of an energy transition. Our plans include reaching net-zero Scope 1 and 2 emissions in our integrated Permian Basin operated assets by 2035, including Pioneer assets acquired in 2024. By 2030, we plan to reduce emissions in our combined Permian operations by more than the equivalent of achieving net-zero Scope 1 and 2 emissions in our operated heritage ExxonMobil assets.\nCompared to 2016 levels, our 2030 plans are expected to drive the following reductions:\n\u2022\n20-30 percent reduction in corporate-wide greenhouse gas intensity;\n\u2022\n70-80 percent reduction in corporate-wide methane intensity;\n\u2022\n40-50 percent reduction in upstream greenhouse gas intensity; and\n\u2022\n60-70 percent reduction in corporate-wide flaring intensity.\nAs of year-end 2025, we are exceeding our 2030 plans across the portfolio, having already achieved our plans for reducing Corporate greenhouse gas and flaring intensity. We expect to reach the plan for methane intensity reductions later this year.\nOur emission-reduction plans and 2050 net-zero ambition cover Scope 1 and 2 emissions from assets we operate.\nThe Corporation plans to continue to pursue advantaged growth opportunities and lower-emission investments. These investments are targeted at reducing emissions in the Company\u2019s operations as well as reducing the emissions of other companies. At this early stage, stable and supportive policy remains critical to enable emissions reductions, advance technology, and drive scale to improve costs.\nExxonMobil\u2019s Low Carbon Solutions business is working with the Product Solutions and Upstream businesses to grow a pipeline of emission-reduction opportunities in carbon capture and storage, hydrogen and ammonia, lower-emission fuels, Proxxima\nTM\n resin systems, carbon materials, and low-carbon data centers, as well as lithium to supply the global battery and electric vehicle markets. Our customers, many governments, and strategic partners recognize our combination of experience, skills, and capabilities that have the potential to help reduce emissions for ourselves and others. For example, on the U.S. Gulf Coast, we see an opportunity to grow a carbon capture and storage business that will enable industrial customers to reduce their emissions. Stable policy support, along with technology advancements and the development of market-driven mechanisms, will continue to be important to the development and deployment of lower-emission solutions.\n42\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nRecent Business Environment\nDuring 2025, the price of crude oil remained near the middle of the pre-COVID 10-year range (2010-2019) as global markets remained broadly balanced. Record crude demand was met by increasing industry supply, resulting in modestly lower prices. Natural gas prices rose to the top end of the 10-year range due to robust demand. Industry refining margins improved in 2025, supported by record full-year demand and an increase in supply disruptions driving higher margins. Despite record demand, global oversupply resulted in Chemical margins remaining at bottom-of-cycle.\nDuring 2025, the U.S. announced a variety of trade-related actions, including the imposition of tariffs on imports from several countries. In response, many countries announced their own retaliatory tariffs. Despite the current uncertainty as to what effects these actions will ultimately have on the Corporation, our suppliers and our customers, as well as on the overall macroeconomic environment, we do not anticipate any material near-term financial impacts.\nThe Corporation closely monitors market trends and works to mitigate both operating and capital cost impacts in all price environments. Strategic changes implemented over the past several years enabled the Corporation to capture $15.1 billion of structural cost savings\n(1)\nversus 2019, including $3 billion of savings during 2025, through increased operational efficiencies, workforce reductions, divestment-related reductions, and other cost-saving measures. The Company sees additional opportunities in areas such as centralization of activities, system implementations, continued improvement of maintenance and turnarounds, and simplified business processes. These savings are key drivers to reduce our structural costs by $20 billion between 2019 and 2030, thereby improving the earnings power of the Corporation.\n(1)\n Refer to\nFrequently Used Terms\n for definition of structural cost savings.\nTransportation of Kazakhstan Production\nThe Corporation holds a 25 percent interest in Tengizchevroil, LLP (TCO), which operates the Tengiz and Korolev oil fields in Kazakhstan, and a 16.8 percent working interest in the Kashagan field in Kazakhstan. Oil production from those operations is exported primarily through the Caspian Pipeline Consortium (CPC), in which the Corporation holds a 7.5 percent interest. CPC traverses parts of Kazakhstan and Russia to tanker-loading facilities on the Russian coast of the Black Sea. In the event geopolitical issues escalate in the region, including ongoing military conflict, it is possible that the transportation of Kazakhstan oil through the CPC pipeline could be disrupted, curtailed, temporarily suspended, or otherwise restricted. In such a case, the Corporation could experience a loss of cash flows of uncertain duration from its operations in Kazakhstan. For reference, after-tax earnings related to the Corporation\u2019s interests in Kazakhstan in 2025 were approximately $1.1 billion, and its share of combined oil and gas production was approximately 320 thousand oil-equivalent barrels per day.\n43\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nBUSINESS RESULTS\nUpstream\nExxonMobil has a diverse growth portfolio of exploration and development opportunities, which allows the Corporation to be selective in our investments, maximizing shareholder value, and mitigating political and technical risks. ExxonMobil\u2019s competitive strengths enable the Upstream\u2019s business strategy, which is focused on developing an industry-leading portfolio underpinned by advantaged growth projects, applying ExxonMobil\u2019s technology to enhance value and improve development efficiency, and leveraging the unique capabilities of the Company's Global Projects organization to deliver projects on time and in line with budgets.\nThe Upstream capital program is focused on low cost-of-supply opportunities. ExxonMobil has a strong pipeline of development projects, including continued growth in Guyana and the Permian Basin, as well as LNG expansion opportunities in Qatar, Mozambique, Papua New Guinea, and the United States. In 2025, Upstream production averaged 4.7 million oil-equivalent barrels per day (Moebd), our highest production in over 40 years. As future development projects and drilling activities bring new production online, the Corporation expects a shift in the geographic mix and in the type of opportunities from which volumes are produced. Based on the current investment plans, the proportion of oil-equivalent production from the Americas is generally expected to increase over the next several years. Currently about two thirds of the Corporation's global production comes from Permian, Guyana, and LNG resources. This proportion is generally expected to grow.\nThe Corporation anticipates several projects will come online over the next few years providing additional production capacity. However, actual volumes typically vary from year to year due to the timing of individual project start-ups, operational outages, reservoir performance, regulatory changes, the impact of fiscal and commercial terms, asset sales, weather events, price effects on production sharing contracts, changes in the amount and timing of capital investments that may vary depending on the oil and gas price environment, international trade patterns and relations, and other factors described in\nItem 1A\n.\nIn 2025, crude prices remained within the 10-year historical range (2010-2019), while robust demand helped to move natural gas price above the top of the 10-year range. ExxonMobil believes prices over the long term will continue to be driven by market supply and demand, with the demand side largely being a function of general economic activities, levels of prosperity, technology advances, consumer preference, and government policies. On the supply side, prices may be significantly impacted by political events, the actions of OPEC or OPEC+ and other large government resource owners, alternative energy sources, and other factors.\nKey Recent Events\nGuyana:\n Liza Destiny, Liza Unity and Prosperity floating production, storage and offloading (FPSO) vessels continued to produce above investment basis capacity in 2025. Yellowtail entered service in August and progressed to ramp up throughout the fourth quarter achieving an average gross production of 240 kbd. The combined gross production from the four operating vessels exceeded 870 kbd in the fourth quarter of 2025. With start-up of a fourth vessel, Guyana achieved record annual production in 2025 of 715 kbd. Uaru, and Whiptail, the fifth and sixth developments on the Stabroek Block, respectively, are progressing on schedule and each has an investment basis capacity of approximately 250 kbd. In September 2025, ExxonMobil made a final investment decision for the Hammerhead development, after receiving the required regulatory approvals from the government of Guyana; Hammerhead is anticipated to come online in 2029. We anticipate eight FPSO vessels will be in operation on the Stabroek Block by year-end 2030.\nPermian:\n ExxonMobil delivered strong and efficient growth in Permian production volumes in 2025. Total production volumes averaged a record 1.6 Moebd in 2025, approximately 0.4 Moebd higher than the previous year. ExxonMobil operations continue to deliver industry-leading capital efficiency and cost performance by leveraging scale, integration, and technology. Examples include deploying ExxonMobil cube design and proprietary lightweight proppant as well as leading capabilities and technology in drilling and completions. ExxonMobil expects to increase production in the Permian Basin to approximately 2.5 Moebd by 2030. ExxonMobil remains on track to achieve Scope 1 and 2 net zero greenhouse gas emissions in the integrated Permian Basin operated assets by 2035.\nLNG:\n ExxonMobil continued work on LNG growth projects in 2025. In Papua New Guinea (PNG), the Papua LNG project has been optimizing the development plan and enhancing project cost competitiveness. Force majeure was lifted in Mozambique, as the Rovuma LNG project continues with the front-end engineering and design stage, in support of a final investment decision in 2026 to develop the Area 4 offshore gas resources. Mechanical completion was achieved for the Golden Pass LNG project, with expected first LNG production in the first quarter of 2026.\n\n44\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nUpstream Financial Results\n(millions of dollars)\n2025\n2024\n2023\nEarnings (loss) (U.S. GAAP)\n\nUnited States\n5,063\n6,426\n4,202\nNon-U.S.\n16,291\n18,964\n17,106\nTotal\n21,354\n\n25,390\n\n21,308\n\nIdentified Items\n\n(1)\nUnited States\n(471)\n(360)\n(1,489)\nNon-U.S.\n(422)\n575\n(812)\nTotal\n(893)\n215\n\n(2,301)\nEarnings (loss) excluding Identified Items\n(1)\n(Non-GAAP)\nUnited States\n5,534\n6,786\n5,691\nNon-U.S.\n16,713\n18,389\n17,918\nTotal\n22,247\n\n25,175\n\n23,609\n\n2025 Upstream Earnings Driver Analysis\n(1)\n(millions of dollars)\nPrice\n\n\u2013 Lower realizations decreased earnings by $6.1 billion, primarily driven by lower crude prices as record demand was more than offset by increased industry supply.\nAdvantaged Volume Growth \u2013 Increased earnings by $1.9 billion, mainly driven by record production in Permian and Guyana.\nBase Volume \u2013 Decreased earnings by $0.7 billion as a result of non-strategic asset divestments.\nStructural Cost Savings\n(1)\n\u2013 Increased earnings by $1.4 billion.\nExpenses \u2013 Decreased earnings by $0.6 billion, primarily higher depreciation from the Tengiz expansion.\nOther \u2013 Increased earnings by $0.6 billion, mainly driven by favorable tax and foreign exchange impacts.\nTiming Effects \u2013 Favorable timing effects from derivatives mark-to-market impacts increased earnings by $0.6 billion.\nIdentified Items\n(1)\n \u2013 2024 $0.2 billion gain mainly due to Argentina divestment, partly offset by Nigeria divestment and U.S. impairment; 2025 $(0.9) billion loss mainly due to asset impairments.\n(1)\n Refer to\nFrequently Used Terms\n for definition of Structural Cost Savings, Identified Items, and Earnings (loss) excluding Identified Items.\n45\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\n2024 Upstream Earnings Driver Analysis\n(1)\n(millions of dollars)\nPrice\n\n\u2013 Price impacts decreased earnings by $1.3 billion, driven by lower gas realizations.\nAdvantaged Volume Growth \u2013 Higher volumes from advantaged assets increased earnings by $3.8 billion, as a result of record production in Permian, driven by the Pioneer acquisition and growth in the heritage Permian\n\n(2)\n, and record production in Guyana driven by the Prosperity FPSO start-up.\nBase Volume \u2013 Divestments of non-strategic assets and entitlements decreased earnings by $0.8 billion.\nStructural Cost Savings\n(1)\n \u2013 Increased earnings by $0.8 billion.\nExpenses \u2013 Higher expenses decreased earnings by $1.4 billion, primarily from higher depreciation (non-cash).\nOther \u2013 All other items increased earnings by $0.1 billion, mainly driven by favorable impacts from divestments, partially offset by unfavorable tax and foreign exchange impacts.\nTiming Effects \u2013 Less unfavorable timing effects from derivatives mark-to-market impacts increased earnings by $0.3 billion.\nIdentified Items\n(1)\n \u2013 2023\n\n$(2.3) billion loss primarily due to the impairment of the idled Santa Ynez Unit assets and associated facilities in California; 2024 $0.2 billion gain mainly due to Argentina divestment, partly offset by Nigeria divestment and U.S. impairment.\n(1)\n Refer to\nFrequently Used Terms\n for definition of Structural Cost Savings, Identified Items, and Earnings (loss) excluding Identified Items.\n(2)\nH\neritage Permian Basin assets exclude assets acquired as part of the acquisition of Pioneer that closed May 3, 2024.\n46\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nUpstream Operational Results\n\n2025\n2024\n2023\nNet production of crude oil, natural gas liquids, bitumen and synthetic oil\n(thousands of barrels daily)\n\nUnited States\n1,522\n1,248\n803\nCanada/Other Americas\n835\n784\n664\nEurope\n3\n3\n4\nAfrica\n142\n209\n221\nAsia\n800\n713\n721\nAustralia/Oceania\n25\n30\n36\nWorldwide\n3,329\n2,987\n2,449\nNet natural gas production available for sale\n(millions of cubic feet daily)\n\nUnited States\n3,364\n2,887\n2,311\nCanada/Other Americas\n27\n101\n96\nEurope\n299\n352\n414\nAfrica\n114\n152\n125\nAsia\n3,354\n3,322\n3,490\nAustralia/Oceania\n1,283\n1,264\n1,298\nWorldwide\n8,442\n8,078\n7,734\nOil-equivalent production\n(1)\n(thousands of oil-equivalent barrels daily)\n4,736\n4,333\n3,738\n(1)\n Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels.\nUpstream Additional Information\n\n(thousands of barrels daily)\n2025\n2024\nVolumes Reconciliation (Oil-equivalent production)\n(1)\n\nPrior Year\n4,333\n3,738\nEntitlements - Net Interest\n(33)\n(13)\nEntitlements - Price / Spend / Other\n45\n(23)\nGovernment Mandates\n(1)\n9\nDivestments\n(133)\n(63)\nGrowth / Other\n525\n685\nCurrent Year\n4,736\n\n4,333\n\n(1)\n Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels.\n2025 versus 2024\n2025 production of 4.7 million oil-equivalent barrels per day increased 403 thousand barrels per day from 2024. Permian reached 1.6 million net oil-equivalent barrels per day and Guyana production exceeded 700 thousand gross oil-equivalent barrels per day, more than offsetting impacts from divestments and entitlements. Excluding the impacts from entitlements, divestments, and government-mandated curtailments, net production grew by 525 thousand oil-equivalent barrels per day.\n2024 versus 2023\n2024 production of 4.3 million oil-equivalent barrels per day increased 595 thousand barrels per day from 2023. Permian and Guyana production grew by 680 thousand oil-equivalent barrels per day, more than offsetting impacts from divestments and entitlements. Excluding the impacts from entitlements, divestments, and government-mandated curtailments, net production grew by 685 thousand oil-equivalent barrels per day.\n47\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nListed below are descriptions of ExxonMobil\u2019s volumes reconciliation drivers, which are provided to facilitate understanding of the terms.\nEntitlements - Net Interest\n are changes to ExxonMobil\u2019s share of production volumes caused by non-operational changes to volume-determining drivers. These drivers consist of net interest changes specified in Production Sharing Contracts (PSCs), which typically occur when cumulative investment returns or production volumes achieve defined thresholds, changes in equity upon achieving pay-out in partner investment carry situations, equity redeterminations as specified in venture agreements, or as a result of the termination or expiry of a concession. Once a net interest change has occurred, it typically will not be reversed by subsequent events, such as lower crude oil prices.\nEntitlements - Price, Spend and Other\n are changes to ExxonMobil\u2019s share of production volumes resulting from temporary changes to non-operational volume-determining drivers. These drivers include changes in oil and gas prices or spending levels from one period to another. According to the terms of contractual arrangements or government royalty regimes, price or spending variability can increase or decrease royalty burdens and/or volumes attributable to ExxonMobil. For example, at higher prices, fewer barrels are required for ExxonMobil to recover its costs. These effects generally vary from period to period with field spending patterns or market prices for oil and natural gas. Such drivers can also include other temporary changes in net interest as dictated by specific provisions in production agreements.\nGovernment Mandates\n are changes to ExxonMobil's sustainable production levels as a result of production limits or sanctions imposed by governments.\nDivestments\n are reductions in ExxonMobil\u2019s production arising from commercial arrangements to fully or partially reduce equity in a field or asset in exchange for financial or other economic consideration.\nGrowth and Other\n drivers comprise all other operational and non-operational drivers not covered by the above definitions that may affect volumes attributable to ExxonMobil. Such drivers include, but are not limited to, production enhancements from project and work program activities, acquisitions including additions from asset exchanges, downtime, market demand, natural field decline, and any fiscal or commercial terms that do not affect entitlements.\nEnergy Products\nExxonMobil's Energy Products is one of the largest, most integrated businesses of its kind among international oil companies, with significant representation across the entire fuels value chain, including refining, logistics, trading, and marketing. This segment includes the fuels, aromatics, and NGL value chains, as well as catalysts and licensing.\nWith the largest refining footprint among international oil companies, ExxonMobil\u2019s Energy Products earnings are closely tied to industry refining margins. Refining margins are largely driven by differences in commodity prices and are a function of the difference between what a refinery pays for its raw materials and the market prices for the products produced. Crude oil and many products are widely traded with published prices, including those quoted on multiple exchanges around the world (e.g., New York Mercantile Exchange and Intercontinental Exchange). Prices for these commodities are determined by the global marketplace and are influenced by many factors, including global and regional supply/demand balances, inventory levels, industry refinery operations, import/export balances, currency fluctuations, seasonal demand, weather, and geopolitical considerations. While industry refining margins significantly impact Energy Products earnings, strong operational performance, product mix optimization, and disciplined cost control are also critical to strong financial performance.\nIn 2025, refining margins increased from the prior year on record demand, but remained within the 10-year historical range (2010-2019). Refining margins are expected to remain volatile with changes in global factors, including geopolitical developments; demand growth; recession fears; inventory levels; and refining capacity utilization, additions, and rationalizations.\n\nKey Recent Events\nStrathcona Renewable Diesel project:\nStarted up the project at the Strathcona refinery, which is designed to use low-carbon hydrogen, locally-sourced and grown feedstocks, and our proprietary catalyst to produce renewable diesel.\nFawley Hydrofiner project\n: Started up the project at the Fawley site to increase production of ultra-low sulfur diesel and reduce production of other products, including high-sulfur distillates.\nFrance divestment:\n In November 2025, ExxonMobil completed the divestments of Esso Soci\u00e9t\u00e9 Anonyme Fran\u00e7aise SA and ExxonMobil Chemical France SAS, including the refinery and related assets.\n48\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nEnergy Products Financial Results\n(millions of dollars)\n2025\n2024\n2023\nEarnings (loss) (U.S. GAAP)\n\nUnited States\n2,992\n2,099\n6,123\nNon-U.S.\n4,431\n1,934\n6,019\nTotal\n7,423\n\n4,033\n\n12,142\n\nIdentified Items\n\n(1)\nUnited States\n(118)\n(34)\n192\nNon-U.S.\n601\n113\n(48)\nTotal\n483\n\n79\n\n144\n\nEarnings (loss) excluding Identified Items\n\n(1)\n\n(Non-GAAP)\nUnited States\n3,110\n2,133\n5,931\nNon-U.S.\n3,830\n1,821\n6,067\nTotal\n6,940\n\n3,954\n\n11,998\n\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\n2025 Energy Products Earnings Driver Analysis\n(1)\n(millions of dollars)\nMargin\n\n\u2013 Increased earnings by $1.8 billion, mainly driven by robust demand and supply disruptions.\nAdvantaged Volume Growth \u2013 Higher volumes from advantaged projects growth increased earnings by $0.2 billion.\nBase Volume \u2013 Higher volumes driven by lower scheduled maintenance increased earnings by $0.4 billion.\nStructural Cost Savings\n(1)\n\n\u2013 Increased earnings by $0.6 billion.\nExpenses\n\n\u2013 Decreased earnings by $0.5 billion, mainly driven by growth projects.\nOther \u2013 Increased earnings by $0.2 billion mainly from favorable year-end inventory effects.\nTiming Effects \u2013 Favorable timing effects from derivatives mark-to-market impacts increased earnings by $0.4 billion.\nIdentified Items\n(1)\n \u2013 2024 $0.1 billion gain; 2025 $0.5 billion gain mainly driven by asset sales.\n(1)\n Refer to\nFrequently Used Terms\n for definition of Structural Cost Savings, Identified Items, and Earnings (loss) excluding Identified Items.\n49\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\n2024 Energy Products Earnings Driver Analysis\n(1)\n(millions of dollars)\nMargin\n\n\u2013 Significantly weaker industry refining margins decreased earnings by $6.3 billion. Margins declined from historically high levels as increased supply from industry capacity additions outpaced record global demand.\nAdvantaged Volume Growth \u2013 Higher volumes from advantaged projects, increased earnings by $0.1 billion.\nBase Volume \u2013 Lower base volumes decreased earnings by $1.2 billion driven by scheduled maintenance and divestments.\nStructural Cost Savings\n(1)\n\u2013 Increased earnings by $0.6 billion.\nExpenses\n\n\u2013 Higher expenses related to scheduled turnarounds and maintenance, and advantaged project spend decreased earnings by $1.0 billion.\nOther \u2013 All other items, mainly unfavorable tax and forex impacts, decreased earnings by $0.3 billion.\nTiming Effects \u2013 Decreased earnings by $10 million.\nIdentified Items\n(1)\n \u2013 2023 $0.1 billion gain driven by favorable tax effects partially offset by additional European taxes on the energy sector; 2024 $0.1 billion gain.\n(1)\nRefer to\nFrequently Used Terms\n for definition of Structural Cost Savings, Identified Items, and Earnings (loss) excluding Identified Items.\n50\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nEnergy Products Operational Results\n(thousands of barrels daily)\n2025\n2024\n2023\nRefinery throughput\nUnited States\n1,927\n1,865\n1,848\nCanada\n402\n399\n407\nEurope\n1,002\n1,039\n1,166\nAsia Pacific\n460\n432\n498\nOther\n188\n165\n149\nWorldwide\n3,979\n3,900\n4,068\nEnergy Products sales\n(1)\nUnited States\n2,852\n2,722\n2,633\nNon-U.S.\n2,740\n2,696\n2,828\nWorldwide\n5,593\n5,418\n5,461\nGasoline, naphthas\n2,290\n2,251\n2,288\nHeating oils, kerosene, diesel\n1,791\n1,769\n1,795\nAviation fuels\n383\n355\n336\nHeavy fuels\n220\n200\n214\nOther energy products\n910\n844\n829\nWorldwide\n5,593\n5,418\n5,461\n(1)\nData reported net of purchases/sales contracts with the same counterparty.\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\nChemical Products\nExxonMobil is a leading global manufacturer and marketer of petrochemicals that support modern living. Chemical Products help meet society\u2019s essential needs by providing a wide range of innovative products efficiently and responsibly. The Company is uniquely positioned with a combination of industry-leading scale, integration, and proprietary technology, which are fundamental to producing affordable products that are more sustainable, use less material, save energy, and reduce waste. These competitive advantages are underpinned by operational excellence, advantaged investments, and cost discipline. This segment includes olefins, polyolefins, and intermediates.\nOver the long term, worldwide demand for chemicals is expected to grow faster than the overall economy, driven by global population growth, an expanding middle class, and improving living standards. Chemical Products integration with refineries, performance product mix, and project execution capability improves returns on investments across a range of market environments.\nIn 2025, chemical industry margins remained deeply bottom-of-cycle, below the 10-year historical range (2010-2019), as capacity additions have far exceeded demand growth. The Company optimized production across our global footprint to profitably meet customer demand. Our earnings benefited from solid reliability, record high-value products sales, and a large North American footprint where low ethane prices continue to provide a feed advantage.\nKey Recent Events\nChina Chemical Complex:\n Started up a petrochemical complex in the Dayawan Petrochemical Industrial Park in Huizhou, Guangdong Province, which is a significant step in growing our global manufacturing footprint and is the first 100 percent foreign-owned petrochemical complex built in China. The facility, which focuses on producing our unique high-performance polyethylene and polypropylene products, is equipped with three polyethylene and two polypropylene production lines for a combined capacity of over 2.5 million metric tons per year. This capacity will more efficiently serve China\u2019s large and evolving domestic demand, which is currently being met with imports.\nAdvanced Recycling:\n ExxonMobil is combining proprietary technology and advantaged integrated sites to process hard-to-recycle plastic waste back into raw materials to produce valuable new products. In 2025, the Company added two new advanced recycling units to the Baytown facility, tripling capacity at the site, and representing one of the largest advanced recycling facilities in North America. Additional units are being assessed as the Company aims to reach a global recycling capacity of 1 billion pounds per year to help reduce plastic waste.\n51\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nChemical Products Financial Results\n(millions of dollars)\n2025\n2024\n2023\nEarnings (loss) (U.S. GAAP)\n\nUnited States\n903\n1,627\n1,626\nNon-U.S.\n(103)\n950\n11\nTotal\n800\n\n2,577\n\n1,637\n\nIdentified Items\n(1)\nUnited States\n(80)\n(43)\n32\nNon-U.S.\n(190)\n(52)\n(420)\nTotal\n(270)\n(95)\n(388)\nEarnings (loss) excluding Identified Items\n(1)\n(Non-GAAP)\nUnited States\n983\n1,670\n1,594\nNon-U.S.\n87\n1,002\n431\nTotal\n1,070\n\n2,672\n\n2,025\n\n2025 Chemical Products Earnings Driver Analysis\n(1)\n(millions of dollars)\nMargin\n\n\u2013 Decreased earnings by $1.8 billion, as oversupply resulted in margins at bottom-of-cycle market conditions.\nAdvantaged Volume Growth \u2013 New projects increased earnings by $0.2 billion driven by high-value product sales.\nBase Volume \u2013 Increased earnings by $0.1 billion.\nStructural Cost Savings\n(1)\n\u2013 Increased earnings by $0.2 billion.\nExpenses\n\n\u2013 Higher advantaged project spend, including China Chemical Complex ramp-up, decreased earnings by $0.5 billion.\nOther \u2013 Increased earnings by $0.2 billion.\nIdentified Items\n(1)\n\u2013 2024 $(0.1) billion loss driven by impairments; 2025 $(0.3) billion loss driven by impairments.\n(1)\nRefer to\nFrequently Used Terms\n for definition of Structural Cost Savings, Identified Items, and Earnings (loss) excluding Identified Items.\n52\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\n2024 Chemical Products Earnings Driver Analysis\n(1)\n(millions of dollars)\nMargin\n\n\u2013 Improved company margins on North American ethane feed advantage and improved product realizations increased earnings by $0.9 billion, despite continued bottom-of-cycle market conditions.\nAdvantaged Volume Growth \u2013 Record high-value product sales increased earnings by $0.4 billion.\nBase Volume \u2013 Portfolio optimization and product sales mix decreased earnings by $0.3 billion.\nStructural Cost Savings\n(1)\n\n\u2013 Increased earnings by $0.2 billion.\nExpenses\n\n\u2013 Higher advantaged projects spend and inflation effects decreased earnings by $0.5 billion.\nOther \u2013 All other items decreased earnings by $0.1 billion.\nIdentified Items\n(1)\n \u2013 2023 $(0.4) billion loss was primarily driven by impairments; 2024 $(0.1) billion loss driven by impairments.\n(1)\nRefer to\nFrequently Used Terms\n for definition of Structural Cost Savings, Identified Items, and Earnings (loss) excluding Identified Items.\nChemical Products Operational Results\n(thousands of metric tons)\n2025\n2024\n2023\nChemical Products sales\n(2)\nUnited States\n6,977\n7,038\n6,779\nNon-U.S.\n14,326\n12,354\n12,603\nWorldwide\n21,303\n\n19,392\n\n19,382\n\n(2)\nData reported net of purchases/sales contracts with the same counterparty.\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\n53\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nSpecialty Products\nExxonMobil Specialty Products is a combination of business units that manufacture and market a range of performance products, including high-quality lubricants, basestocks, waxes, synthetics, elastomers, and resins. Leveraging ExxonMobil\u2019s proprietary technologies, Specialty Products focuses on providing performance products that help customers improve efficiency in the transportation and industrial sectors.\nSpecialty Products is well-positioned to help meet the demand for premium lubricant products through advantaged projects that leverage ExxonMobil's integration, technology, and world-class brands, such as Mobil 1\nTM\n.\nIn 2025, Specialty Products continued to deliver strong earnings from our portfolio of high-value products and brand market position.\nKey Recent Events\nSingapore Resid Upgrade project:\n This project started up in 2025, leveraging two proprietary technologies to upgrade fuel oil to Group II lubricant basestock and diesel. It further strengthens ExxonMobil\u2019s position as the largest basestock producer in the world and introduces a first-of-its-kind basestock, EHC 340 MAX\nTM\n, with superior performance attributes, to the market.\nProxxima\nTM\n Resin Systems:\n ExxonMobil's advanced polyolefin thermoset resin uses components of gasoline and catalyst technology to create a material that is lighter, stronger, and more durable than conventional products, providing alternatives for the construction, coatings, and transportation industries. These systems are designed to drive product substitutions in existing markets and enable expansion into new applications like structural composites and steel substitutes. In 2025, ExxonMobil more than tripled Proxxima\nTM\n resin blending capacity with plans to grow production to 200,000 tons per year by 2030.\nCarbon Materials venture:\n ExxonMobil is growing its carbon materials venture by applying proprietary process technology to capture attractive opportunities in the battery anode market. The Company has developed an advanced coke product by converting low-value, bottom-of-the-barrel molecules that can deliver a higher performance differentiated graphite. These carbon materials enable batteries that can provide up to 30 percent higher available capacity, 30 percent faster charging time, and extended battery life. In 2025, ExxonMobil acquired key technology and assets from Superior Graphite. This acquisition, which complements ExxonMobil's process technology and expertise, enables a faster scale-up and a swifter entry into the battery anode market with our differentiated graphite product.\nSpecialty Products Financial Results\n(millions of dollars)\n2025\n2024\n2023\nEarnings (loss) (U.S. GAAP)\n\nUnited States\n1,200\n1,576\n1,536\nNon-U.S.\n1,657\n1,476\n1,178\nTotal\n2,857\n\n3,052\n\n2,714\n\nIdentified Items\n(1)\nUnited States\n12\n(4)\n12\nNon-U.S.\n(12)\n(9)\n(105)\nTotal\n\u2014\n\n(13)\n(93)\nEarnings (loss) excluding Identified Items\n\n(1)\n(Non-GAAP)\nUnited States\n1,188\n1,580\n1,524\nNon-U.S.\n1,669\n1,485\n1,283\nTotal\n2,857\n\n3,065\n\n2,807\n\n(1)\n Refer to\nFrequently Used Terms\n for definition of Identified Items and Earnings (loss) excluding Identified Items.\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\n\n54\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\n2025 Specialty Products Earnings Driver Analysis\n(1)\n(millions of dollars)\nMargin\n\n\u2013 Increased earnings by $40 million.\nAdvantaged Volume Growth \u2013 Increased earnings by $0.1 billion.\nBase Volume \u2013 Decreased earnings by $20 million.\nStructural Cost Savings\n(1)\n\n\u2013 Increased earnings by $0.1 billion.\nExpenses\n\n\u2013 Higher expenses to develop markets for carbon materials and Proxxima\nTM\n resins decreased earnings by $0.2 billion.\nOther \u2013 Decreased earnings by $0.2 billion, mainly from unfavorable foreign exchange effects.\nIdentified Items\n(1)\n \u2013 2024 $(13) million loss.\n(1)\nRefer to\nFrequently Used Terms\n for definition of Structural Cost Savings, Identified Items, and Earnings (loss) excluding Identified Items.\n55\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\n2024 Specialty Products Earnings Driver Analysis\n(1)\n(millions of dollars)\nMargin\n\n\u2013 Stronger basestocks and finished lubes margins increased earnings by $0.6 billion.\nAdvantaged Volume Growth \u2013 High-value product volume growth increased earnings by $0.1 billion.\nBase Volume \u2013 Decreased earnings by $10 million.\nStructural Cost Savings\n\n(1)\n\u2013 Increased earnings by $0.1 billion.\nExpenses\n\n\u2013 Higher expenses including new product development costs, decreased earnings by $0.3 billion.\nOther \u2013 All other items decreased earnings by $0.2 billion, mainly unfavorable foreign exchange effects and absence of prior year favorable year-end inventory effects.\nIdentified Items\n\n(1)\n \u2013 2023 $(93) million loss from impairments; 2024 $(13) million loss.\n(1)\n Refer to\nFrequently Used Terms\n\nfor definition of Structural Cost Savings, Identified Items, and Earnings (loss) excluding Identified Items.\nSpecialty Products Operational Results\n(thousands of metric tons)\n2025\n2024\n2023\nSpecialty Products sales\n(2)\nUnited States\n1,894\n1,922\n1,962\nNon-U.S.\n5,897\n5,745\n5,635\nWorldwide\n7,791\n\n7,666\n\n7,597\n\n(2)\n Data reported net of purchases/sales contracts with the same counterparty.\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\n56\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nCorporate and Financing\nCorporate and Financing is comprised of corporate activities that support ExxonMobil's operating segments and Low Carbon Solutions business. Corporate activities include general administrative support functions, financing, and insurance activities. Low Carbon Solutions activities will be included in Corporate and Financing until the business is established with a material level of assets and revenue.\nCorporate and Financing Financial Results\n\u00a0(millions of dollars)\n2025\n2024\n2023\nEarnings (loss) (U.S. GAAP)\n(3,590)\n(1,372)\n(1,791)\nIdentified Items\n(1)\n(585)\n30\n76\nEarnings (loss) excluding Identified Items\n(1)\n(Non-GAAP)\n(3,005)\n(1,402)\n(1,867)\n(1)\nRefer to\nFrequently Used Terms\n for definition of Identified Items and Earnings (loss) excluding Identified Items.\n2025\nCorporate and Financing expenses were $3.6 billion in 2025 compared to $1.4 billion in 2024, with the increase mainly due to higher financing costs.\n2024\nCorporate and Financing expenses were $1.4 billion in 2024 compared to $1.8 billion in 2023, with the decrease mainly due to lower financing costs.\n57\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nLIQUIDITY AND CAPITAL RESOURCES\nSources and Uses of Cash\n\n\u00a0(millions of dollars)\n2025\n2024\n2023\nNet cash provided by/(used in)\n\nOperating activities\n51,970\n55,022\n55,369\nInvesting activities\n(25,927)\n(19,938)\n(19,274)\nFinancing activities\n(39,081)\n(42,789)\n(34,297)\nEffect of exchange rate changes\n532\n(676)\n105\nIncrease/(decrease) in cash and cash equivalents\n(12,506)\n(8,381)\n1,903\n\nTotal cash and cash equivalents (December 31)\n10,681\n\n23,187\n\n31,568\n\nTotal cash and cash equivalents were $10.7 billion at the end of 2025, down $12.5\u00a0billion from the prior year. The major sources of funds in 2025 were net income including noncontrolling interests of $29.8 billion, the adjustment for the noncash provision of $26.0 billion for depreciation and depletion, proceeds from asset sales of $3.2 billion, and other investing activities of $3.4\u00a0billion. The major uses of funds included spending for additions to property, plant, and equipment of $28.4 billion; dividends to shareholders of $17.2 billion; the purchase of ExxonMobil stock of $20.3 billion\n;\nadditional investments and advances of $4.1 billion; and a change in working capital of $7.7 billion.\nTotal cash and cash equivalents were $23.2 billion at the end of 2024, down $8.4\u00a0billion from the prior year. The major sources of funds in 2024 were net income including noncontrolling interests of $35.1\u00a0billion, the adjustment for the noncash provision of $23.4 billion for depreciation and depletion, proceeds from asset sales of $5.0 billion, and other investing activities of $1.9 billion, and cash acquired from mergers and acquisitions of $0.8 billion. The major uses of funds included spending for additions to property, plant, and equipment of $24.3 billion; dividends to shareholders of $16.7\u00a0billion; the purchase of ExxonMobil stock of $19.6 billion;\ndebt repayment of $5.9 billion;\nadditional investments and advances of $3.3 billion; and a change in working capital of $1.8 billion.\nThe Corporation has access to significant capacity of long-term and short-term liquidity. Internally generated funds are expected to cover the majority of financial requirements, supplemented by long-term and short-term debt. Commercial paper is used to balance short-term liquidity requirements and is reflected in \"Notes and loans payable\" on the Consolidated Balance Sheet, with changes in outstanding commercial paper between periods included in the Consolidated Statement of Cash Flows. On December 31, 2025, the Corporation had undrawn short-term committed lines of credit of $7.3 billion and undrawn long-term lines of credit of $1.0 billion. In the fourth quarter of 2025, the Corporation established a 364-day revolving credit facility of $7.0\u00a0billion to provide short-term borrowing capacity for general corporate purposes.\nTo support cash flows in future periods, the Corporation will need to continually find or acquire and develop new fields, and continue to develop and apply new technologies and recovery processes to existing fields, in order to maintain or increase production. After a period of production at plateau rates, it is the nature of oil and gas fields to eventually produce at declining rates for the remainder of their economic life. Decline rates can vary widely by individual field due to a number of factors, including, but not limited to, the type of reservoir, fluid properties, recovery mechanisms, work activity, and age of the field. In particular, the Corporation\u2019s key tight-oil plays have higher initial decline rates which tend to moderate over time. Furthermore, the Corporation\u2019s net interest in production for individual fields can vary with price and the impact of fiscal and commercial terms.\nThe Corporation has long been successful at mitigating the effects of natural field decline through disciplined investments in quality opportunities and project execution. The Corporation anticipates several projects will come online over the next few years providing additional production capacity. However, actual volumes will vary from year to year due to the timing of individual project start-ups, operational outages, reservoir performance, regulatory changes, the impact of fiscal and commercial terms, asset sales, weather events, price effects on production sharing contracts, changes in the amount and timing of investments that may vary depending on the oil and gas price environment, and international trade patterns and relations. The Corporation\u2019s cash flows are also highly dependent on crude oil and natural gas prices. Please refer to\nItem 1A\n for a more complete discussion of risks.\nThe Corporation\u2019s financial strength enables it to make large, long-term capital expenditures. Cash Capex in 2025 was $29.0 billion, including $2.6 billion of acquisitions, reflecting the Corporation\u2019s continued active investment program.\nUpstream spending of $24.7 billion in 2025 was up $4.4 billion from 2024, reflecting higher spend in the U.S. Permian Basin which included the full-year impact from the Pioneer acquisition. Development projects typically take several years from the time of recording proved undeveloped reserves to the start of production and can exceed five years for large and complex projects. The percentage of proved developed reserves was 64 percent of total proved reserves at year-end 2025 and has been over 60 percent for the last ten years.\n58\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nCapital investments in the three Product Solutions businesses totaled $3.7 billion\n\nin 2025, a decrease of $0.8 billion from 2024, reflecting lower global project spending. Other spend of $0.6 billion primarily reflects investments in the Low Carbon Solutions business.\nThe Corporation plans to invest in the range of $27 billion to $29 billion in 2026. The investment range for 2026 excludes advances and collections not related to capital expenditures or equity investments, for example, supply and marketing related advances and associated collections. Included in the 2026 capital spend range is $8.5 billion of firm capital commitments. An additional $8.0 billion of firm capital commitments have been made for years 2027 and beyond. Actual spending could vary depending on the progress of individual projects and property acquisitions. The Corporation has a large and diverse portfolio of development projects and exploration opportunities, which helps mitigate the overall political and technical risks of the Corporation\u2019s Upstream segment and associated cash flow. Further, due to its financial strength and diverse portfolio of opportunities, the risk associated with failure or delay of any single project would not have a significant impact on the Corporation\u2019s liquidity or ability to generate sufficient cash flows for operations and its fixed commitments.\nThe Corporation, as part of its ongoing asset management program, continues to evaluate its mix of assets for potential upgrade. Because of the ongoing nature of this program, dispositions will continue to be made from time to time which will result in either gains or losses. Additionally, the Corporation continues to evaluate opportunities to enhance its business portfolio through acquisitions of assets or companies and enters into such transactions from time to time. Key criteria for evaluating acquisitions include strategic fit, cost and other synergies, potential for future growth, low cost of supply, and attractive valuations. Acquisitions may be made with cash, shares of the Corporation\u2019s common stock, or both.\nCash Flow from Operating Activities\n2025\nCash provided by operating activities totaled $52.0 billion in 2025, $3.1\u00a0billion lower than 2024. The major source of funds was net income including noncontrolling interests of $29.8 billion, a decrease of $5.3\u00a0billion. The noncash provision for depreciation and depletion was $26.0 billion, up $2.6\u00a0billion from the prior year. The adjustment for the net gain on asset sales was $1.1 billion, a decrease of $0.1\u00a0billion. The adjustment for dividends received less than equity in current earnings of equity companies was an increase of $3.0 billion, compared to an increase of $0.2 billion in 2024. Changes in operational working capital, excluding cash and debt, decreased cash in 2025 by $7.7\u00a0billion.\n2024\nCash provided by operating activities totaled $55.0 billion in 2024, $0.3\u00a0billion lower than 2023. The major source of funds was net income including noncontrolling interests of $35.1 billion, a decrease of $2.3\u00a0billion. The noncash provision for depreciation and depletion was $23.4 billion, up $2.8\u00a0billion from the prior year. The adjustment for the net gain on asset sales was $1.2\u00a0billion, an increase of $0.7\u00a0billion. The adjustment for dividends received less than equity in current earnings of equity companies was an increase of $0.2 billion, compared to an increase of $0.5 billion in 2023. Changes in operational working capital, excluding cash and debt, decreased cash in 2024 by $1.8\u00a0billion.\n\nCash Flow from Investing Activities\n2025\nCash used in investing activities netted to $25.9 billion in 2025, $6.0\u00a0billion higher than 2024. Spending for property, plant, and equipment of $28.4 billion increased $4.1\u00a0billion from 2024. Proceeds from asset sales and returns of investments of $3.2 billion compared to $5.0 billion in 2024. Additional investments and advances were $0.8\u00a0billion higher in 2025, while proceeds from other investing activities including collection of advances increased by $1.5\u00a0billion.\n2024\nCash used in investing activities netted to $19.9 billion in 2024, $0.7\u00a0billion higher than 2023. Spending for property, plant, and equipment of $24.3 billion increased $2.4\u00a0billion from 2023. Proceeds from asset sales and returns of investments of $5.0 billion compared to $4.1 billion in 2023. Additional investments and advances were $0.3\u00a0billion higher in 2024, while proceeds from other investing activities including collection of advances increased by $0.4\u00a0billion.\n59\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nCash Flow from Financing Activities\n2025\nCash used in financing activities was $39.1 billion in 2025, $3.7\u00a0billion lower than 2024. Dividend payments on common shares increased to $4.00 per share from $3.84 per share and totaled $17.2 billion.\nDuring 2025, the Corporation continued its share repurchase program, including the purchase of 180.1 million shares at a book value of $20 billion in 2025. In its 2025 Corporate Plan Update released December 9, 2025, the Corporation stated that it is expected to continue its share repurchase program with a $20 billion repurchase pace per year through 2026, assuming reasonable market conditions. The stock repurchase program does not obligate the Company to acquire any p\narticular amount of common stock, and it may be discontinued or resumed at any time. The timing and amount of shares actually purchased in the future will depend on market, business, and other factors.\n2024\nCash used in financing activities was $42.8 billion in 2024, $8.5\u00a0billion higher than 2023. Dividend payments on common shares increased to $3.84 per share from $3.68 per share and totaled $16.7 billion.\nDuring 2024, the Corporation utilized cash to repay debt of $5.9 billion.\nDuring 2024, the Corporation continued its share repurchase program, including the purchase of 167 million shares at a book value of $19.1 billion in 2024.\nContractual Obligations\nThe Corporation has contractual obligations involving commitments to third parties that impact its liquidity and capital resource needs. These contractual obligations are primarily for leases, debt, asset retirement obligations, pension and other postretirement benefits, take-or-pay and unconditional purchase obligations, and firm capital commitments. See Notes\n4\n,\n9\n,\n12\n, and\n13\n for information related to pensions, asset retirement obligations, long-term debt, and leases, respectively.\nIn addition, the Corporation also enters into commodity purchase obligations (volumetric commitments with no fixed or minimum price) which are resold shortly after purchase, either in an active, highly liquid market, or under long-term, unconditional sales contracts with similar pricing terms. Examples include long-term, noncancelable LNG and natural gas purchase commitments and commitments to purchase refinery products at market prices. These commitments are not meaningful in assessing liquidity and cash flow because the purchases will be offset in the same periods by cash received from the related sales transactions.\nTake-or-pay obligations are noncancelable, long-term commitments for goods and services. Unconditional purchase obligations are those long-term commitments that are noncancelable or cancelable only under certain conditions, and that third parties have used to secure financing for the facilities that will provide the contracted goods or services. These obligations mainly pertain to pipeline, manufacturing supply, and terminal agreements. The total obligation at year-end 2025 for take-or-pay and unconditional purchase obligations was $54.1\u00a0billion. Cash payments expected in 2026 and 2027 are $6.3 billion and $6.2 billion, respectively.\nGuarantees\nThe Corporation and certain of its consolidated subsidiaries were contingently liable at December 31, 2025, for guarantees relating to notes, loans, and performance under contracts (\nNote 7\n). Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management\u2019s estimate of the maximum potential exposure. Where it is not possible to make a reasonable estimation of the maximum potential amount of future payments, future performance is expected to be either immaterial or have only a remote chance of occurrence. Guarantees are not reasonably likely to have a material effect on the Corporation\u2019s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.\n60\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nFinancial Strength\nOn December 31, 2025, the Corporation had total unused short-term committed lines of credit of $7.3 billion (\nNote 10\n) and total unused long-term committed lines of credit of $1.0 billion (\nNote 12\n). The table below shows the Corporation\u2019s consolidated debt to capital ratios.\n\u00a0(percent)\n2025\n2024\n2023\nDebt to capital\n14.0\n13.4\n16.4\nNet debt to capital\n(1)\n11.0\n6.5\n4.5\n(1)\n Net debt is total debt less cash and cash equivalents excluding restricted cash. Net debt to capital ratio is net debt divided by net debt plus total equity. Total debt is the sum of notes and loans payable and long-term debt, as reported in the Consolidated Balance Sheet.\nManagement views the Corporation\u2019s financial strength to be a competitive advantage of strategic importance. The Corporation\u2019s financial position gives it the opportunity to access the world\u2019s capital markets across a range of market conditions and enables the Corporation to take on large, long-term capital commitments in the pursuit of maximizing shareholder value.\nThe Corporation's total debt level remained relatively flat in 2025, ending the year at $43.5 billion.\nLitigation and Other Contingencies\nAs discussed in\nNote 7\n, a variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Based on a consideration of all relevant facts and circumstances, the Corporation does not believe the ultimate outcome of any currently pending lawsuit against ExxonMobil will have a material adverse effect upon the Corporation\u2019s operations, financial condition, or financial statements taken as a whole. There are no events or uncertainties beyond those already included in reported financial information that would indicate a material change in future operating results or financial condition. Refer to\nNote 7\n for additional information on legal proceedings and other contingencies.\nTAXES\n(millions of dollars)\n2025\n2024\n2023\nIncome taxes\n11,504\n13,810\n15,429\nEffective income tax rate\n31%\n33%\n33%\nTotal other taxes and duties\n28,930\n29,894\n32,191\nTotal\n40,434\n\n43,704\n\n47,620\n\n2025\nTotal taxes on the Corporation\u2019s income statement were $40.4 billion in 2025, a decrease of $3.3 billion from 2024. Income tax expense, both current and deferred, was $11.5 billion compared to $13.8 billion in 2024. The effective tax rate, which is calculated based on consolidated company income taxes and ExxonMobil\u2019s share of equity company income taxes, was 31 percent. This is down two percentage points compared to 2024 due primarily to favorable one-time items. Total other taxes and duties of $28.9 billion in 2025 decreased $1.0 billion.\n2024\nTotal taxes on the Corporation\u2019s income statement were $43.7 billion in 2024, a decrease of $3.9\u00a0billion from 2023. Income tax expense, both current and deferred, was $13.8 billion compared to $15.4 billion in 2023. The effective tax rate, which is calculated based on consolidated company income taxes and ExxonMobil\u2019s share of equity company income taxes, was 33 percent. This is flat compared to 2023. Total other taxes and duties of $29.9 billion in 2024 decreased $2.3\u00a0billion from 2023.\n61\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nENVIRONMENTAL MATTERS\nEnvironmental Expenditures\n(millions of dollars)\n2025\n2024\nCapital expenditures\n3,053\n3,607\nOther expenditures\n4,580\n5,348\nTotal\n7,633\n\n8,955\n\nThroughout ExxonMobil\u2019s businesses, new and ongoing measures are taken to prevent and minimize the impact of our operations on air, water, and ground. These include significant investments in refining infrastructure and technology to manufacture clean fuels; projects to monitor and reduce air, water, and waste emissions, both from the Company\u2019s operations and from other companies; and expenditures for asset retirement obligations. Using definitions and guidelines established by the American Petroleum Institute, ExxonMobil\u2019s 2025 worldwide environmental expenditures for all such preventative and remediation steps were $7.6 billion, of which $4.6 billion were included in expenses with the remainder in capital expenditures. As the Corporation progresses its emission-reduction plans, worldwide environmental expenditures are expected to increase to approximately $9 billion annually in 2026 and 2027, with capital expenditures expected to account for approximately 44 percent of the total expenditures.\nEnvironmental Liabilities\nThe Corporation accrues environmental liabilities when it is probable that obligations have been incurred and the amounts can be reasonably estimated. This policy applies to assets or businesses currently owned or previously disposed. ExxonMobil has accrued liabilities for probable environmental remediation obligations at various sites, including multiparty sites where the U.S. Environmental Protection Agency has identified ExxonMobil as one of the potentially responsible parties. The involvement of other financially responsible companies at these multiparty sites could mitigate ExxonMobil\u2019s actual joint and several liability exposure. At present, no individual site is expected to have losses material to ExxonMobil\u2019s operations or financial condition. Consolidated company provisions made in 2025 for environmental liabilities were $0.4\u00a0billion ($0.3\u00a0billion in 2024), and the balance sheet reflects liabilities of $0.9\u00a0billion as of December 31, 2025, and $0.7\u00a0billion as of December 31, 2024.\nMARKET RISKS\nWorldwide Average Realizations\n (1)\n2025\n2024\n2023\nBrent ($ per barrel)\n69.06\n80.76\n82.62\nHenry Hub ($ per metric million British thermal unit)\n3.43\n2.27\n2.74\nTTF ($ per metric million British thermal unit)\n12.39\n10.77\n15.15\n(1)\nConsolidated subsidiaries.\nCrude oil, natural gas, petroleum product, and chemical prices have fluctuated in response to changing market forces. The impacts of these price fluctuations on earnings have varied across the Corporation's operating segments. For the year 2026, a $1\u00a0per\u00a0barrel change in the Brent price would have an approximately $700 million annual after-tax effect on Upstream consolidated plus equity company earnings, excluding the impact of derivatives. This Brent sensitivity includes oil-linked LNG sales which make up approximately 10 percent of the sensitivity. A $0.10 per million metric British thermal unit change in the Henry Hub price would have an approximately $90 million annual after-tax effect on Upstream consolidated plus equity company earnings, excluding the impact of derivatives. Similarly, a $0.10 per million metric British thermal unit change in the Title Transfer Facility (TTF) price would have an approximately $20 million annual after-tax effect on Upstream consolidated plus equity company earnings, excluding the impact of derivatives. This TTF sensitivity primarily represents LNG sales. These price markers have a direct impact on our realized prices. For any given period, the extent of actual benefit or detriment will be dependent on the price movements of individual types of crude oil, results of trading activities, taxes and other government take impacts, price adjustment lags in long-term gas contracts, and crude and gas production volumes. Accordingly, changes in benchmark prices for crude oil and natural gas only provide broad indicators of changes in the earnings experienced in any particular period.\nIn the very competitive petroleum and petrochemical environment, earnings are primarily determined by margin capture rather than absolute price levels of products sold. Refining margins are a function of the difference between what a refiner pays for its raw materials (primarily crude oil) and the market prices for the range of products produced. These prices in turn depend on global and regional supply/demand balances, inventory levels, refinery operations, import/export balances and weather.\n62\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nThe global energy markets can give rise to extended periods in which market conditions are adverse to one or more of the Corporation\u2019s businesses. Such conditions, along with the capital-intensive nature of the industry and very long lead times associated with many of our projects, underscore the importance of maintaining a strong financial position. Management views the Corporation\u2019s financial strength as a competitive advantage.\nIn general, segment results are not dependent on the ability to sell and/or purchase products to/from other segments. Instead, where such sales take place, they are the result of efficiencies and competitive advantages of integrated refinery and chemical complexes. Additionally, intersegment sales are at market-based prices. The products bought and sold between segments can also be acquired in worldwide markets that have substantial liquidity, capacity, and transportation capabilities. Refer to\nNote\n3\n for additional information on intersegment revenue.\nAlthough price levels of crude oil and natural gas may rise or fall significantly over the short to medium term due to global economic conditions, political events, decisions by OPEC or OPEC+ and other major government resource owners and other factors, industry economics over the long term will continue to be driven by market supply and demand. The Corporation evaluates investments over a range of prices, including estimated greenhouse gas emission costs even in jurisdictions without a current greenhouse gas pricing policy.\nThe Corporation has an active asset management program in which nonstrategic assets are considered for divestment. The asset management program includes a disciplined, regular review to ensure assets are contributing to the Corporation\u2019s strategic objectives.\nRisk Management\nThe Corporation\u2019s size, strong capital structure, geographic diversity, and the complementary nature of its business segments reduce the Corporation\u2019s enterprise-wide risk from changes in commodity prices, currency rates, and interest rates. In addition, the Corporation uses commodity-based contracts, including derivatives, to manage commodity price risk and to generate returns from trading. The Corporation\u2019s commodity derivatives are not accounted for under hedge accounting. At times, the Corporation also enters into currency and interest rate derivatives, none of which are material to the Corporation\u2019s financial position as of December 31, 2025 and 2024, or results of operations for the years ended 2025, 2024, and 2023. Credit risk associated with the Corporation\u2019s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. No material market or credit risks to the Corporation\u2019s financial position, results of operations, or liquidity exist as a result of the derivatives described in\nNote 6\n. The Corporation maintains a system of controls that includes the authorization, reporting, and monitoring of derivative activity.\nThe Corporation is exposed to changes in interest rates, primarily on its short-term debt and the portion of long-term debt that carries floating interest rates. The impact of a 100-basis-point change in interest rates affecting the Corporation\u2019s debt would not be material to earnings or cash flow. The Corporation has access to significant capacity of long-term and short-term liquidity. Internally generated funds are generally expected to cover financial requirements, supplemented by long-term and short-term debt as required. Commercial paper is used to balance short-term liquidity requirements. Some joint-venture partners are dependent on the credit markets, and their funding ability may impact the development pace of joint-venture projects.\nThe Corporation conducts business in many foreign currencies and is subject to exchange rate risk on cash flows related to sales, expenses, financing, and investment transactions. Fluctuations in exchange rates are often offsetting and the impacts on ExxonMobil\u2019s geographically and functionally diverse operations are varied. The Corporation makes limited use of currency exchange contracts to mitigate the impact of changes in currency values, and exposures related to the Corporation\u2019s use of these contracts are not material.\nCRITICAL ACCOUNTING ESTIMATES\nThe Corporation\u2019s accounting and financial reporting fairly reflect its integrated business model involving exploration for, and production of, crude oil and natural gas; manufacture, trade, transport, and sale of crude oil, natural gas, petroleum products, petrochemicals, and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities including carbon capture and storage, hydrogen and ammonia, lower-emission fuels, Proxxima\nTM\n resin systems, carbon materials, low-carbon data centers, and lithium. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities. The Corporation\u2019s accounting policies are summarized in\nNote\n1\n.\n63\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nOil and Natural Gas Reserves\nThe estimation of proved oil and natural gas reserve volumes is an ongoing process based on rigorous technical evaluations, commercial and market assessments, and detailed analysis of reservoir and well performance, development and production costs, and other factors. The estimation of proved reserves is controlled by the Corporation through long-standing approval guidelines. Reserve changes are made within a well-established, disciplined process driven by senior level geoscience and engineering professionals, assisted by the Global Reserves and Resources Group which has significant technical experience, culminating in reviews with, and approval by, senior management. Notably, the Corporation does not use specific quantitative reserve targets to determine compensation. Key features of the reserve estimation process are covered in Disclosure of Reserves in\nItem 2\n.\nOil and natural gas reserves include both proved and unproved reserves.\n\u2022\nProved oil and natural gas reserves are determined in accordance with Securities and Exchange Commission (SEC) requirements. Proved reserves are those quantities of oil and natural gas which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible under existing economic and operating conditions and government regulations. Proved reserves are determined using the average of first-of-month oil and natural gas prices during the reporting year.\nProved reserves can be further subdivided into developed and undeveloped reserves. Proved developed reserves include amounts which are expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped reserves include amounts expected to be recovered from new wells on undrilled proved acreage or from existing wells where a relatively major expenditure is required for completion. Proved undeveloped reserves are recognized only if a development plan has been adopted indicating that the reserves are scheduled to be drilled within five years, unless specific circumstances support a longer period of time.\nThe Corporation is reasonably certain that proved reserves will be produced. However, the timing and amount recovered can be affected by a number of factors including completion of development projects, reservoir performance, regulatory approvals, government policy, consumer preferences, and significant changes in oil and natural gas price levels.\n\u2022\nUnproved reserves are quantities of oil and natural gas with less than reasonable certainty of recoverability and include probable reserves. Probable reserves are reserves that, together with proved reserves, are as likely as not to be recovered.\nRevisions in previously estimated volumes of proved reserves for existing fields can occur due to the evaluation or re-evaluation of (1) already available geologic, reservoir, or production data, (2) new geologic, reservoir, or production data, or (3) changes in the average of first-of-month oil and natural gas prices and/or costs that are used in the estimation of reserves. Revisions can also result from significant changes in development strategy or production equipment and facility capacity.\nUnit-of-Production Depreciation\nOil and natural gas reserve volumes are used as the basis to calculate unit-of-production depreciation rates for most upstream assets. Acquisition costs of proved properties are depreciated using a ratio of asset cost to total proved reserves while capitalized drilling and developments costs are depreciated using a ratio of actual production volumes to proved developed reserves. The volumes produced and asset cost are known, while proved reserves are based on estimates that are subject to some variability.\nIn the event that the unit-of-production method does not result in an equitable allocation of cost over the economic life of an upstream asset, an alternative method is used. The straight-line method is used in limited situations where the expected life of the asset does not reasonably correlate with that of the underlying reserves. For example, certain assets used in the production of oil and natural gas have a shorter life than the reserves, and as such, the Corporation uses straight-line depreciation to ensure the asset is fully depreciated by the end of its useful life.\nTo the extent that proved reserves for a property are substantially de-booked and that property continues to produce such that the resulting depreciation charge does not result in an equitable allocation of cost over the expected life, assets will be depreciated using a unit-of-production method based on reserves determined at the most recent SEC price which results in a more meaningful quantity of proved reserves, appropriately adjusted for production and technical changes.\nFair Value Used in Business Combinations\nIn accounting for business combinations, the purchase price paid to acquire a business is allocated to its assets and liabilities based on their respective estimated fair values as of the date of acquisition. If applicable, any excess of the purchase price over the fair value is recorded as goodwill. The assessment of fair value is based upon the views of a likely market participant group.\nOn May 3, 2024, the Corporation acquired Pioneer Natural Resources Company (Pioneer), an independent oil and gas exploration and production company. To effect the acquisition, we issued 545 million shares of ExxonMobil common stock having a fair value of $63\u00a0billion on the acquisition date and assumed debt with a fair value of $5 billion.\n64\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nIn respect of the Pioneer acquisition, the most significant amount of judgment involved the estimated fair values of property, plant, and equipment related to crude oil and natural gas properties, for which we used discounted cash flow models. Inputs and assumptions used in discounted cash flow models include estimates of future production volumes, commodity prices consistent with the average of third-party industry experts, drilling and development costs, and risk-adjusted discount rates.\nThe assumptions and inputs incorporated within the fair value estimates are subject to considerable management judgment and are based on industry, market, and economic conditions prevalent at the time of the acquisition. Actual results may differ from the projected results used to determine fair value.\nSee\nNote 20\n for further information regarding the Pioneer acquisition during 2024.\nImpairment\nThe Corporation tests assets or groups of assets for recoverability on an ongoing basis whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Corporation has a robust process to monitor for indicators of potential impairment across its asset groups throughout the year. This process is aligned with the requirements of ASC 360 and ASC 932, and relies, in part, on the Corporation\u2019s planning and budgeting cycle.\nBecause the lifespans of the vast majority of the Corporation\u2019s major assets are measured in decades, the future cash flows of these assets are predominantly based on long-term oil and natural gas commodity prices and industry margins, development costs, and production costs. Significant reductions in the Corporation\u2019s view of oil or natural gas commodity prices or margin ranges, especially the longer-term prices and margins, and changes in the development plans, including decisions to defer, reduce, or eliminate planned capital spending, can be an indicator of potential impairment. Other events or changes in circumstances, including indicators outlined in ASC 360, can be indicators of potential impairment as well.\nIn general, the Corporation does not view temporarily low prices or margins as an indication of impairment. Management believes that prices over the long term must be sufficient to generate investments in energy supply to meet global demand. Although prices will occasionally drop significantly, industry prices over the long term will continue to be driven by market supply and demand fundamentals. On the supply side, industry production from mature fields is declining. This is being offset by investments to generate production from new discoveries, field developments, and technology and efficiency advancements. OPEC+ investment activities and production policies also have an impact on world oil supplies. The demand side is largely a function of general economic activities, alternative energy sources, and levels of prosperity. During the lifespan of its major assets, the Corporation expects that oil and gas prices and industry margins will experience significant volatility. Consequently, these assets will experience periods of higher earnings and periods of lower earnings, or even losses. In assessing whether events or changes in circumstances indicate the carrying value of an asset may not be recoverable, the Corporation considers recent periods of operating losses in the context of its longer-term view of prices and margins.\nGlobal Outlook and Cash Flow Assessment.\nThe annual planning and budgeting process, known as the Corporate Plan, is the mechanism by which resources (capital, operating expenses, and people) are allocated across the Corporation. The foundation for the assumptions supporting the Corporate Plan is the Global Outlook (Outlook), which contains the Corporation\u2019s demand and supply projections based on its assessment of current trends in technology, government policies, consumer preferences, geopolitics, economic development, and other factors. Reflective of the existing global policy environment, the Outlook does not attempt to project the degree of necessary future policy and technology advancement and deployment for the world, or the Corporation, to meet net zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the Outlook, and the Corporation\u2019s business plans will be updated accordingly.\nIf events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, the Corporation estimates the future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. In performing this assessment, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. Cash flows used in recoverability assessments are based on the assumptions developed in the Corporate Plan, which is reviewed and approved by the Board of Directors, and are consistent with the criteria management uses to evaluate investment opportunities. These evaluations make use of the Corporation\u2019s assumptions of future capital allocations, crude oil and natural gas commodity prices including price differentials, refining and chemical margins, volumes, development and operating costs including greenhouse gas emission prices, and foreign currency exchange rates. Notably, when assessing future cash flows, the Corporation includes the estimated costs in support of reaching its greenhouse gas emission-reduction plans, including its goal of net-zero Scope 1 and 2 greenhouse gas emissions from its Permian Basin operated assets by 2035. Volumes are based on projected field and facility production profiles, throughput, or sales. Management\u2019s estimate of upstream production volumes used for projected cash flows makes use of proved reserve quantities and may include risk-adjusted unproved reserve quantities. ExxonMobil considers a range of scenarios - including remote scenarios - to help inform perspective of the future and enhance strategic thinking over time. While third-party scenarios may be used for these purposes, they are not used as a basis for developing future cash flows for impairment assessments. As part of the Corporate Plan, the Company considers estimated greenhouse gas emission costs, even for jurisdictions without a current greenhouse gas pricing policy.\n65\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nFair Value of Impaired Assets.\nAn asset group is impaired if its estimated undiscounted cash flows are less than the asset group\u2019s carrying value. Impairments are measured by the excess of the carrying value over fair value. The assessment of fair value is based upon the views of a likely market participant. The principal parameters used to establish fair value include estimates of acreage values and flowing production metrics from comparable market transactions, market-based estimates of historical cash flow multiples, and discounted cash flows. Inputs and assumptions used in discounted cash flow models include estimates of future production volumes, throughput and product sales volumes, commodity prices (which are consistent with the average of third-party industry experts and government agencies), refining and chemical margins, drilling and development costs, operating costs, and discount rates which are reflective of the characteristics of the asset group.\nOther Impairment Estimates.\nUnproved properties are assessed periodically to determine whether they have been impaired. Significant unproved properties are assessed for impairment individually, and valuation allowances against the capitalized costs are recorded based on the Corporation's future development plans, the estimated economic chance of success, and the length of time that the Corporation expects to hold the properties. Properties that are not individually significant are aggregated by groups and amortized based on development risk and average holding period.\nLong-lived assets that are held for sale are evaluated for possible impairment by comparing the carrying value of the asset with its fair value less the cost to sell. If the net book value exceeds the fair value less cost to sell, the assets are considered impaired and adjusted to the lower value. Judgment is required to determine if assets are held for sale and to determine the fair value less cost to sell.\nInvestments accounted for by the equity method are assessed for possible impairment when events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. Examples of key indicators include a history of operating losses, negative earnings and cash flow outlook, significant downward revisions to oil and gas reserves, and the financial condition and prospects for the investee\u2019s business segment or geographic region. If the decline in value of the investment is other than temporary, the carrying value of the investment is written down to fair value. In the absence of market prices for the investment, discounted cash flows are used to assess fair value, which requires significant judgment.\nRecent Impairments.\n Impairments in 2025 totaled $2.0 billion after-tax, including a write-down to fair value of Upstream oil and gas assets held for sale and charges associated with the optimization of materials and supply inventory.\nImpairments in 2024 were immaterial.\nIn 2023, the Corporation recognized after-tax charges of $3.4 billion, primarily related to the idled Upstream Santa Ynez Unit assets and associated facilities in California, which reflected the continuing challenges in the state regulatory environment that impeded progress towards restoring operations. Other impairments in the year included a $0.6 billion charge related to an Upstream equity investment.\nFactors which could put further assets at risk of impairment in the future include reductions in the Corporation\u2019s price or margin outlooks, changes in the allocation of capital or development plans, reduced long-term demand for the Corporation's products, and operating cost increases which exceed the pace of efficiencies or the pace of oil and natural gas price or margin increases. However, due to the inherent difficulty in predicting future commodity prices or margins, and the relationship between industry prices and costs, it is not practicable to reasonably estimate the existence or range of any potential future impairment charges related to the Corporation\u2019s long-lived assets.\nFor further information regarding impairments in property, plant, and equipment and suspended wells, refer to Notes\n9\n and\n16\n, respectively.\nAsset Retirement Obligations\nThe Corporation is subject to retirement obligations for certain assets. The fair values of these obligations are recorded as liabilities on a discounted basis, which is typically at the time the assets are installed. In the estimation of fair value, the Corporation uses assumptions and judgments regarding such factors as the existence of a legal obligation for an asset retirement obligation, technical assessments of the assets, estimated amounts and timing of settlements, discount rates, and inflation rates. See\nNote\n9\n for further information regarding asset retirement obligations.\n66\nTable of Contents\nFinancial Table of Contents\n\nMANAGEMENT\u2019S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\nPension Benefits\nThe Corporation and its affiliates sponsor about 70 defined benefit (pension) plans in nearly 40 countries.\nNote 4\n provides details on pension obligations, fund assets, and pension expense.\nSome of these plans (primarily non-U.S.) provide pension benefits that are paid directly by their sponsoring affiliates out of corporate cash flow rather than a separate pension fund because applicable tax rules and regulatory practices do not encourage advance funding. Book reserves are established for these plans. The portion of the pension cost attributable to employee service is expensed as services are rendered. The portion attributable to the increase in pension obligations due to the passage of time is expensed over the term of the obligations, which ends when all benefits are paid. The primary difference in pension expense for unfunded versus funded plans is that pension expense for funded plans also includes a credit for the expected long-term return on fund assets.\nFor funded plans, including those in the U.S., pension obligations are financed in advance through segregated assets or insurance arrangements. These plans are managed in compliance with the requirements of governmental authorities and meet or exceed required funding levels as measured by relevant actuarial and government standards at the mandated measurement dates. In determining liabilities and required contributions, these standards often require approaches and assumptions that differ from those used for accounting purposes.\nThe Corporation will continue to make contributions to these funded plans as necessary. All defined-benefit pension obligations, regardless of the funding status of the underlying plans, are fully supported by the financial strength of the Corporation or the respective sponsoring affiliate.\nPension accounting requires explicit assumptions regarding, among others, the long-term expected earnings rate on fund assets, the discount rate for the benefit obligations, and the long-term rate for future salary increases. Pension assumptions are reviewed annually by outside actuaries and senior management. These assumptions are adjusted as appropriate to reflect changes in market rates and outlook. The long-term expected earnings rate on U.S. pension plan assets in 2025 was 6.0 percent. The 10-year and 20-year actual returns on U.S. pension plan assets were 5\n\npercent over both periods. The Corporation establishes the long-term expected rate of return by developing a forward-looking, long-term return assumption for each pension fund asset class, taking into account factors such as the expected real return for the specific asset class and inflation. A single, long-term rate of return is then calculated as the weighted-average of the target asset allocation percentages and the long-term return assumption for each asset class. A worldwide reduction of 0.5 percent in the long-term rate of return on assets would increase annual pension expense by approximately $150 million before tax.\nDifferences between actual returns on fund assets and the long-term expected return are not recognized in pension expense in the year that the difference occurs. Such differences are deferred, along with other actuarial gains and losses, and are amortized into pension expense over the expected remaining service life of employees.\nLitigation and Tax Contingencies\nA variety of claims have been made against the Corporation and certain of its consolidated subsidiaries in a number of pending lawsuits. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. For contingencies where an unfavorable outcome is reasonably possible and significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. As described in\nNote 7\n, for purposes of our contingency disclosures, \u201csignificant\u201d includes material matters, as well as other matters, which management believes should be disclosed. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies.\nManagement judgment is required related to contingent liabilities and the outcome of litigation because both are difficult to predict. However, the Corporation has been successful in defending litigation in the past. Payments have not had a material adverse effect on our operations or financial condition. In the Corporation\u2019s experience, large claims often do not result in large awards. Large awards are often reversed or substantially reduced as a result of appeal or settlement.\nThe Corporation is subject to income taxation in many jurisdictions around the world. The benefits of uncertain tax positions that the Corporation has taken or expects to take in its income tax returns are recognized in the financial statements if management concludes that it is more likely than not that the position will be sustained with the tax authorities. For a position that is likely to be sustained, the benefit recognized in the financial statements is measured at the largest amount that is greater than 50 percent likely of being realized. Significant management judgment is required in the accounting for income tax contingencies and tax disputes because the outcomes are often difficult to predict. The Corporation\u2019s unrecognized tax benefits and a description of open tax years are summarized in\nNote\n15\n.\n67\nTable of Contents\nFinancial Table of Contents\nMANAGEMENT\u2019S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING\nManagement, including the Corporation\u2019s Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer, is responsible for establishing and maintaining adequate internal control over the Corporation\u2019s financial reporting. Management conducted an evaluation of the effectiveness of internal control over financial reporting based on criteria established in\nInternal Control \u2013 Integrated Framework (2013)\n issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that Exxon Mobil Corporation\u2019s internal control over financial reporting was effective as of December 31, 2025.\nPricewaterhouseCoopers LLP, an independent registered public accounting firm, audited the effectiveness of the Corporation\u2019s internal control over financial reporting as of December 31, 2025, as stated in their report included in the Financial Section of this report.\n\nDarren W. Woods\nChief Executive Officer\nNeil A. Hansen\nSenior Vice President and\nChief Financial Officer\nLen M. Fox\nVice President, Controller and Tax\n(Principal Accounting Officer)\n68\nTable of Contents\nFinancial Table of Contents\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\nTo the Board of Directors and Shareholders of Exxon Mobil Corporation\nOpinions on the Financial Statements and Internal Control over Financial Reporting\nWe have audited the accompanying consolidated balance sheet of Exxon Mobil Corporation and its subsidiaries (the \u201cCorporation\u201d) as of December 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the \u201cconsolidated financial statements\u201d). We also have audited the Corporation's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).\nIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Corporation as of 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 accounting principles generally accepted in the United States of America. Also in our opinion, the Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.\nBasis for Opinions\nThe Corporation's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management\u2019s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Corporation\u2019s consolidated financial statements and on the Corporation's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.\nOur audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.\nDefinition and Limitations of Internal Control over Financial Reporting\nA company\u2019s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company\u2019s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company\u2019s assets that could have a material effect on the financial statements.\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n69\nTable of Contents\nFinancial Table of Contents\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\nCritical Audit Matters\nThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\nThe Impact of Proved Developed Oil and Natural Gas Reserves on Upstream Property, Plant, and Equipment, Net\nAs described in Notes\n1\n,\n3\n, and\n9\n to the consolidated financial statements, the Corporation's consolidated upstream property, plant, and equipment (PP&E), net balance was $228.2 billion as of December 31, 2025, and the related depreciation and depletion expense was $21.4 billion for the year ended December 31, 2025. Management uses the successful efforts method to account for its exploration and production activities. Costs incurred to purchase, lease, or otherwise acquire a property (whether unproved or proved) are capitalized when incurred. As disclosed by management, oil and natural gas reserve volumes are used as the basis to calculate unit-of-production depreciation rates for most upstream assets. Acquisition costs of proved properties are depreciated using a ratio of asset cost to total proved reserves while capitalized drilling and development costs are depreciated using a ratio of actual production volumes to proved developed reserves. The estimation of proved oil and natural gas reserve volumes is an ongoing process based on technical evaluations, commercial and market assessments, and detailed analysis of reservoir and well performance, development and production costs, and other factors. As further disclosed by management, reserve changes are made within a well-established, disciplined process driven by senior level geoscience and engineering professionals, assisted by the Global Reserves and Resources Group (together \"management's specialists\").\nThe principal considerations for our determination that performing procedures relating to the impact of proved developed oil and natural gas reserves on upstream PP&E, net is a critical audit matter are (i) the significant judgment by management, including the use of management's specialists, when developing the estimates of proved developed oil and natural gas reserves, which are derived using historical production volumes, and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the data, specifically historical production volumes, methods, and assumptions used by management and its specialists in developing the estimates of proved developed oil and natural gas reserves.\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's estimates of proved developed oil and natural gas reserves. The work of management's specialists was used in performing the procedures to evaluate the reasonableness of the proved developed oil and natural gas reserves. As a basis for using this work, the specialists' qualifications were understood and the Corporation\u2019s relationship with the specialists was assessed. The procedures performed also included (i) evaluating the methods and assumptions used by the specialists; (ii) testing the completeness and accuracy of the data used by the specialists related to historical production volumes; and (iii) evaluating the specialists' findings related to future production volumes by comparing the future production volumes to relevant historical and current period production volumes, as applicable.\n/s/\nPricewaterhouseCoopers LLP\nHouston, Texas\nFebruary\u00a018, 2026\nWe have served as the Corporation\u2019s auditor since 1934.\n\n70\nTable of Contents\nFinancial Table of Contents\nThe information in the Notes to Consolidated Financial Statements is an integral part of these statements.\nCONSOLIDATED STATEMENT OF INCOME\n\n(millions of dollars)\nNote\nReference\nNumber\n2025\n2024\n2023\nRevenues and other income\n\nSales and other operating revenue\n3\n323,905\n\n339,247\n\n334,697\n\nIncome from equity affiliates\n8\n5,064\n\n6,194\n\n6,385\n\nOther income\n\n3,269\n\n4,144\n\n3,500\n\nTotal revenues and other income\n\n332,238\n\n349,585\n\n344,582\n\nCosts and other deductions\n\nCrude oil and product purchases\n\n184,248\n\n199,454\n\n193,029\n\nProduction and manufacturing expenses\n\n42,424\n\n39,609\n\n36,885\n\nSelling, general and administrative expenses\n11,128\n\n9,976\n\n9,919\n\nDepreciation and depletion (includes impairments)\n9\n25,993\n\n23,442\n\n20,641\n\nExploration expenses, including dry holes\n\n1,007\n\n826\n\n751\n\nNon-service pension and postretirement benefit expense\n4\n400\n\n121\n\n714\n\nInterest expense\n\n603\n\n996\n\n849\n\nOther taxes and duties\n15\n25,167\n\n26,288\n\n29,011\n\nTotal costs and other deductions\n\n290,970\n\n300,712\n\n291,799\n\nIncome (loss) before income taxes\n\n41,268\n\n48,873\n\n52,783\n\nIncome tax expense (benefit)\n15\n11,504\n\n13,810\n\n15,429\n\nNet income (loss) including noncontrolling interests\n\n29,764\n\n35,063\n\n37,354\n\nNet income (loss) attributable to noncontrolling interests\n\n920\n\n1,383\n\n1,344\n\nNet income (loss) attributable to ExxonMobil\n\n28,844\n\n33,680\n\n36,010\n\nEarnings (loss) per common share\n(dollars)\n2\n6.70\n\n7.84\n\n8.89\n\nEarnings (loss) per common share - assuming dilution\n(dollars)\n2\n6.70\n\n7.84\n\n8.89\n\n71\nTable of Contents\nFinancial Table of Contents\nThe information in the Notes to Consolidated Financial Statements is an integral part of these statements.\nCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME\n\n(millions of dollars)\n2025\n2024\n2023\nNet income (loss) including noncontrolling interests\n29,764\n\n35,063\n\n37,354\n\nOther comprehensive income (loss) (net of income taxes)\nForeign exchange translation adjustment\n2,631\n\n(\n3,550\n)\n1,241\n\nAdjustment for foreign exchange translation (gain)/loss included in net income\n391\n\n\u2014\n\n609\n\nPostretirement benefits reserves adjustment (excluding amortization)\n1,009\n\n557\n\n(\n369\n)\nAmortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs\n38\n\n43\n\n61\n\nTotal other comprehensive income (loss)\n4,069\n\n(\n2,950\n)\n1,542\n\nComprehensive income (loss) including noncontrolling interests\n33,833\n\n32,113\n\n38,896\n\nComprehensive income (loss) attributable to noncontrolling interests\n1,233\n\n1,063\n\n1,605\n\nComprehensive income (loss) attributable to ExxonMobil\n32,600\n\n31,050\n\n37,291\n\n72\nTable of Contents\nFinancial Table of Contents\nThe information in the Notes to Consolidated Financial Statements is an integral part of these statements.\nCONSOLIDATED BALANCE SHEET\n(millions of dollars)\nNote\nReference\nNumber\nDecember 31, 2025\nDecember 31, 2024\nASSETS\n\nCurrent assets\n\nCash and cash equivalents\n\n10,681\n\n23,029\n\nCash and cash equivalents \u2013 restricted\n\u2014\n\n158\n\nNotes and accounts receivable \u2013 net\n10\n44,562\n\n43,681\n\nInventories\n\nCrude oil, products and merchandise\n14\n22,979\n\n19,444\n\nMaterials and supplies\n\n3,323\n\n4,080\n\nOther current assets\n\n1,837\n\n1,598\n\nTotal current assets\n\n83,382\n\n91,990\n\nInvestments, advances, and long-term receivables\n11\n45,317\n\n47,200\n\nProperty, plant, and equipment, at cost, less accumulated depreciation and depletion\n9\n299,373\n\n294,318\n\nOther assets, including intangibles \u2013 net\n\n20,908\n\n19,967\n\nTotal Assets\n\n448,980\n\n453,475\n\nLIABILITIES\n\nCurrent liabilities\n\nNotes and loans payable\n10\n9,296\n\n4,955\n\nAccounts payable and accrued liabilities\n10\n60,911\n\n61,297\n\nIncome taxes payable\n\n2,123\n\n4,055\n\nTotal current liabilities\n\n72,330\n\n70,307\n\nLong-term debt\n12\n34,241\n\n36,755\n\nPostretirement benefits reserves\n4\n8,847\n\n9,700\n\nDeferred income tax liabilities\n15\n40,216\n\n39,042\n\nLong-term obligations to equity companies\n\n542\n\n1,346\n\nOther long-term obligations\n\n26,178\n\n25,719\n\nTotal Liabilities\n\n182,354\n\n182,869\n\nCommitments and contingencies\n7\nEQUITY\nCommon stock without par value\n(\n9,000\n million shares authorized,\n8,019\n million shares issued)\n\n46,150\n\n46,238\n\nEarnings reinvested\n\n482,494\n\n470,903\n\nAccumulated other comprehensive income\n5\n(\n10,863\n)\n(\n14,619\n)\nCommon stock held in treasury\n(\n3,840\n million shares in 2025 and\n3,666\n million shares in 2024)\n\n(\n258,395\n)\n(\n238,817\n)\nExxonMobil share of equity\n\n259,386\n\n263,705\n\nNoncontrolling interests\n\n7,240\n\n6,901\n\nTotal Equity\n\n266,626\n\n270,606\n\nTotal Liabilities and Equity\n448,980\n\n453,475\n\n73\nTable of Contents\nFinancial Table of Contents\nThe information in the Notes to Consolidated Financial Statements is an integral part of these statements.\nCONSOLIDATED STATEMENT OF CASH FLOWS\n(millions of dollars)\nNote Reference Number\n2025\n2024\n2023\n\nCASH FLOWS FROM OPERATING ACTIVITIES\n\nNet income (loss) including noncontrolling interests\n\n29,764\n\n35,063\n\n37,354\n\nAdjustments for noncash transactions\n\nDepreciation and depletion (includes impairments)\n9\n25,993\n\n23,442\n\n20,641\n\nDeferred income tax charges/(credits)\n15\n765\n\n(\n865\n)\n634\n\nPostretirement benefits expense in excess of/(less than) net payments\n\n(\n64\n)\n(\n358\n)\n90\n\nOther long-term obligation provisions in excess of/(less than) payments\n\n(\n1,430\n)\n(\n1,712\n)\n(\n1,501\n)\nDividends received greater than/(less than) equity in current earnings of equity companies\n\n3,006\n\n191\n\n509\n\nChanges in operational working capital, excluding cash and debt\nNotes and accounts receivable\n reduction/(increase)\n(\n3,042\n)\n(\n6,030\n)\n4,370\n\nInventories\nreduction/(increase)\n\n(\n4,300\n)\n(\n1,812\n)\n(\n3,472\n)\nOther current assets\nreduction/(increase)\n\n(\n164\n)\n389\n\n(\n426\n)\nAccounts and other payables\n increase/(reduction)\n\n(\n222\n)\n5,627\n\n(\n4,727\n)\nNet (gain)/loss on asset sales\n17\n(\n1,113\n)\n(\n1,223\n)\n(\n513\n)\nAll other items - net\n\n2,777\n\n2,310\n\n2,410\n\nNet cash provided by operating activities\n\n51,970\n\n55,022\n\n55,369\n\nCASH FLOWS FROM INVESTING ACTIVITIES\n\nAdditions to property, plant, and equipment\n\n(\n28,358\n)\n(\n24,306\n)\n(\n21,919\n)\nProceeds from asset sales and returns of investments\n\n3,158\n\n4,987\n\n4,078\n\nAdditional investments and advances\n\n(\n4,133\n)\n(\n3,299\n)\n(\n2,995\n)\nOther investing activities including collection of advances\n\n3,406\n\n1,926\n\n1,562\n\nCash acquired from mergers and acquisitions\n\u2014\n\n754\n\n\u2014\n\nNet cash used in investing activities\n\n(\n25,927\n)\n(\n19,938\n)\n(\n19,274\n)\nCASH FLOWS FROM FINANCING ACTIVITIES\n\nAdditions to long-term debt\n(1)\n\n2,311\n\n899\n\n939\n\nReductions in long-term debt\n\n(\n1,108\n)\n(\n1,150\n)\n(\n15\n)\nAdditions to short-term debt\n(2) (3)\n\n2,359\n\n\u2014\n\n\u2014\n\nReductions in short-term debt\n (3)\n\n(\n5,404\n)\n(\n4,743\n)\n(\n879\n)\nAdditions/(reductions) in commercial paper, and debt with three months or less maturity\n1,895\n\n(\n18\n)\n(\n284\n)\nContingent consideration payments\n(\n79\n)\n(\n27\n)\n(\n68\n)\nCash dividends to ExxonMobil shareholders\n\n(\n17,231\n)\n(\n16,704\n)\n(\n14,941\n)\nCash dividends to noncontrolling interests\n\n(\n935\n)\n(\n658\n)\n(\n531\n)\nChanges in noncontrolling interests\n\n(\n704\n)\n(\n791\n)\n(\n894\n)\nInflows from noncontrolling interests for major projects\n88\n\n32\n\n124\n\nCommon stock acquired\n\n(\n20,273\n)\n(\n19,629\n)\n(\n17,748\n)\nNet cash provided by (used in) financing activities\n\n(\n39,081\n)\n(\n42,789\n)\n(\n34,297\n)\nEffects of exchange rate changes on cash\n\n532\n\n(\n676\n)\n105\n\nIncrease/(decrease) in cash and cash equivalents (including restricted)\n\n(\n12,506\n)\n(\n8,381\n)\n1,903\n\nCash and cash equivalents at beginning of year (including restricted)\n\n23,187\n\n31,568\n\n29,665\n\nCash and cash equivalents at end of year (including restricted)\n\n10,681\n\n23,187\n\n31,568\n\n(1)\nIncludes $\n568\n million issued to facilitate the sale of an entity where the buyer assumed the debt upon closing; no longer on the Consolidated Balance Sheet at the end of 2023.\n(2)\nIncludes $\n659\n million of proceeds related to a financing arrangement to facilitate the sale of an entity where the buyer assumed the obligation at closing; no longer on the Consolidated Balance Sheet at the end of 2025.\n(3)\nIncludes commercial paper with a maturity greater than three months.\nNon-Cash Transaction:\n The Corporation acquired Pioneer Natural Resources Company in an all-stock transaction on May 3, 2024, having issued\n545\n million shares of ExxonMobil common stock having a fair value of $\n63\n billion and assumed debt with a fair value of $\n5\n billion. See\nNote 20\n\nfor additional information.\n74\nTable of Contents\nFinancial Table of Contents\nThe information in the Notes to Consolidated Financial Statements is an integral part of these statements.\nCONSOLIDATED STATEMENT OF CHANGES IN EQUITY\n\nExxonMobil Share of Equity\n\n(millions of dollars)\nCommon\nStock\nEarnings\nReinvested\nAccumulated Other Comprehensive Income\nCommon\nStock Held in\nTreasury\nExxonMobil\n\u00a0Share of\nEquity\nNon-controlling Interests\nTotal\nEquity\n\nBalance as of December 31, 2022\n15,752\n\n432,860\n\n(\n13,270\n)\n(\n240,293\n)\n195,049\n\n7,424\n\n202,473\n\nAmortization of stock-based awards\n565\n\n\u2014\n\u2014\n\u2014\n565\n\n\u2014\n565\n\nOther\n(\n514\n)\n(\n2\n)\n\u2014\n\u2014\n(\n516\n)\n89\n\n(\n427\n)\nNet income (loss) for the year\n\u2014\n36,010\n\n\u2014\n\u2014\n36,010\n\n1,344\n\n37,354\n\nDividends - common shares\n\u2014\n(\n14,941\n)\n\u2014\n\u2014\n(\n14,941\n)\n(\n531\n)\n(\n15,472\n)\nOther comprehensive income\n\u2014\n\u2014\n1,281\n\n\u2014\n1,281\n\n261\n\n1,542\n\nShare repurchases, at cost\n\u2014\n\u2014\n\u2014\n(\n17,993\n)\n(\n17,993\n)\n(\n851\n)\n(\n18,844\n)\nIssued for acquisitions\n1,978\n\n\u2014\n\u2014\n2,866\n\n4,844\n\n\u2014\n4,844\n\nDispositions\n\u2014\n\u2014\n\u2014\n503\n\n503\n\n\u2014\n503\n\nBalance as of December 31, 2023\n17,781\n\n453,927\n\n(\n11,989\n)\n(\n254,917\n)\n204,802\n\n7,736\n\n212,538\n\nAmortization of stock-based awards\n735\n\n\u2014\n\u2014\n\u2014\n735\n\n\u2014\n735\n\nOther\n(\n1,027\n)\n\u2014\n\u2014\n\u2014\n(\n1,027\n)\n(\n624\n)\n(\n1,651\n)\nNet income (loss) for the year\n\u2014\n33,680\n\n\u2014\n\u2014\n33,680\n\n1,383\n\n35,063\n\nDividends - common shares\n\u2014\n(\n16,704\n)\n\u2014\n\u2014\n(\n16,704\n)\n(\n658\n)\n(\n17,362\n)\nOther comprehensive income\n\u2014\n\u2014\n(\n2,630\n)\n\u2014\n(\n2,630\n)\n(\n320\n)\n(\n2,950\n)\nShare repurchases, at cost\n\u2014\n\u2014\n\u2014\n(\n19,451\n)\n(\n19,451\n)\n(\n616\n)\n(\n20,067\n)\nIssued for acquisitions\n28,749\n\n\u2014\n\u2014\n34,603\n\n63,352\n\n\u2014\n63,352\n\nDispositions\n\u2014\n\u2014\n\u2014\n948\n\n948\n\n\u2014\n948\n\nBalance as of December 31, 2024\n46,238\n\n470,903\n\n(\n14,619\n)\n(\n238,817\n)\n263,705\n\n6,901\n\n270,606\n\nAmortization of stock-based awards\n812\n\n\u2014\n\u2014\n\u2014\n812\n\n\u2014\n812\n\nOther\n(\n900\n)\n(\n22\n)\n\u2014\n\u2014\n(\n922\n)\n762\n\n(\n160\n)\nNet income (loss) for the year\n\u2014\n28,844\n\n\u2014\n\u2014\n28,844\n\n920\n\n29,764\n\nDividends - common shares\n\u2014\n(\n17,231\n)\n\u2014\n\u2014\n(\n17,231\n)\n(\n947\n)\n(\n18,178\n)\nOther comprehensive income\n\u2014\n\u2014\n3,756\n\n\u2014\n3,756\n\n313\n\n4,069\n\nShare repurchases, at cost\n\u2014\n\u2014\n\u2014\n(\n20,467\n)\n(\n20,467\n)\n(\n709\n)\n(\n21,176\n)\nDispositions\n\u2014\n\u2014\n\u2014\n889\n\n889\n\n\u2014\n889\n\nBalance as of December 31, 2025\n46,150\n\n482,494\n\n(\n10,863\n)\n(\n258,395\n)\n259,386\n\n7,240\n\n266,626\n\nCommon Stock Share Activity\n(millions of shares)\nIssued\nHeld in\nTreasury\nOutstanding\nBalance as of December 31, 2022\n8,019\n\n(\n3,937\n)\n4,082\n\nShare repurchases, at cost\n\u2014\n(\n165\n)\n(\n165\n)\nIssued for acquisitions\n\u2014\n46\n\n46\n\nDispositions\n\u2014\n8\n\n8\n\nBalance as of December 31, 2023\n8,019\n\n(\n4,048\n)\n3,971\n\nShare repurchases, at cost\n\u2014\n(\n170\n)\n(\n170\n)\nIssued for acquisitions\n\u2014\n545\n\n545\n\nDispositions\n\u2014\n7\n\n7\n\nBalance as of December 31, 2024\n8,019\n\n(\n3,666\n)\n4,353\n\nShare repurchases, at cost\n\u2014\n(\n182\n)\n(\n182\n)\nIssued for acquisitions\n\u2014\n\u2014\n\n\u2014\n\nDispositions\n\u2014\n8\n\n8\n\nBalance as of December 31, 2025\n8,019\n\n(\n3,840\n)\n4,179\n\n75\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nThe accompanying consolidated financial statements and the supporting and supplemental material are the responsibility of the management of Exxon Mobil Corporation.\nThe Corporation\u2019s principal business involves exploration for, and production of, crude oil and natural gas; manufacture, trade, transport, and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities including carbon capture and storage, hydrogen and ammonia, lower-emission fuels, Proxxima\nTM\n resin systems, carbon materials, low-carbon data centers, and lithium.\nThe preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make estimates that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates.\nNote 1. Summary of Accounting Policies\nPrinciples of Consolidation and Accounting for Investments\nThe Consolidated Financial Statements include the accounts of subsidiaries the Corporation controls and any variable interest entities where it is deemed the primary beneficiary. They also include the Corporation\u2019s share of the undivided interest in certain upstream assets, liabilities, revenues, and expenses. Amounts representing the Corporation\u2019s interest in entities that it does not control, but over which it exercises significant influence, are included in \u201cInvestments, advances, and long-term receivables.\u201d Under the equity method of accounting, the Corporation recognizes its share of the net income of these companies in \u201cIncome from equity affiliates.\u201d\nMajority ownership is normally the indicator of control that is the basis on which subsidiaries are consolidated. However, certain factors may indicate that a majority-owned investment is not controlled and, therefore, should be accounted for using the equity method of accounting. These factors occur where the minority shareholders are granted, by law or by contract, substantive participating rights. These include the right to approve operating policies, expense budgets, financing and investment plans, and management compensation and succession plans.\nInvestments accounted for by the equity method are assessed for possible impairment when events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. Examples of key indicators include a history of operating losses, negative earnings and cash flow outlook, significant downward revisions to oil and gas reserves, and the financial condition and prospects for the investee\u2019s business segment or geographic region. If the decline in value of the investment is other than temporary, the carrying value of the investment is written down to fair value. In the absence of market prices for the investment, discounted cash flows are used to assess fair value. The Corporation\u2019s share of the cumulative foreign exchange translation adjustment for equity method investments is reported in \u201cAccumulated other comprehensive income.\u201d\nInvestments in equity securities, other than consolidated subsidiaries and equity method investments, are measured at fair value with changes in fair value recognized in net income. The Corporation uses the modified approach for equity securities that do not have a readily determinable fair value. This modified approach measures investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions in a similar investment of the same issuer.\nRevenue Recognition\nThe Corporation generally sells crude oil, natural gas, and petroleum and chemical products under short-term agreements at prevailing market prices. In some cases (e.g., natural gas), products may be sold under long-term agreements, with periodic price adjustments to reflect market conditions. Revenue is recognized at the amount the Corporation expects to receive when the customer has taken control, which is typically when title transfers and the customer has assumed the risks and rewards of ownership. The prices of certain sales are based on price indices that are sometimes not available until the next period. In such cases, estimated realizations are accrued when the sale is recognized, and are finalized when the price is available. Such adjustments to revenue from performance obligations satisfied in previous periods are not significant. Payment for revenue transactions is typically due within 30 days. Future volume delivery obligations that are unsatisfied at the end of the period are expected to be fulfilled through ordinary production or purchases. These performance obligations are based on market prices at the time of the transaction and are fully constrained due to market price volatility.\nPurchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are combined and recorded as exchanges measured at the book value of the item sold.\n\u201cSales and other operating revenue\u201d and \u201cNotes and accounts receivable\u201d include revenue and receivables both within the scope of ASC 606 \"Revenue from Contracts with Customers\u201d and those outside the scope of ASC 606. Long-term receivables are primarily from receivables outside the scope of ASC 606. Contract assets are mainly from marketing assistance programs and are not significant. Contract liabilities are mainly customer prepayments and accruals of expected volume discounts and are not significant.\n76\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nIncome and Other Taxes\nThe Corporation excludes from the Consolidated Statement of Income certain sales and value-added taxes imposed on and concurrent with revenue-producing transactions with customers and collected on behalf of governmental authorities. Similar taxes, for which the Corporation is not considered to be an agent for the government, are reported on a gross basis (included in both \u201cSales and other operating revenue\u201d and \u201cOther taxes and duties\u201d).\nThe Corporation accounts for U.S. tax on global intangible low-taxed income as an income tax expense in the period in which it is incurred.\nDerivative Instruments\nThe Corporation may use derivative instruments for trading purposes and to offset exposures associated with commodity prices, foreign currency exchange rates, and interest rates that arise from existing assets, liabilities, firm commitments, and forecasted transactions. All derivative instruments, except those designated as normal purchase and normal sale, are recorded at fair value. Derivative assets and liabilities with the same counterparty are netted if the right of offset exists and certain other criteria are met. Collateral payables or receivables are netted against derivative assets and derivative liabilities, respectively.\nRecognition and classification of the gain or loss that results from adjusting a derivative to fair value depends on the purpose for the derivative. All gains and losses from derivative instruments for which the Corporation does not apply hedge accounting are immediately recognized in earnings. The Corporation may designate derivatives as fair value or cash flow hedges. For fair value hedges, the gain or loss from derivative instruments and the offsetting gain or loss from the hedged item are recognized in earnings. For cash flow hedges, the gain or loss from the derivative instrument is initially reported as a component of other comprehensive income and subsequently reclassified into earnings in the period that the forecasted transaction affects earnings.\nFair Value\nFair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Hierarchy levels 1, 2, and 3 are terms for the priority of inputs to valuation techniques used to measure fair value. Hierarchy level 1 inputs are quoted prices in active markets for identical assets or liabilities. Hierarchy level 2 inputs are inputs other than quoted prices included within level 1 that are directly or indirectly observable for the asset or liability. Hierarchy level 3 inputs are inputs that are not observable in the market.\nInventories\nCrude oil, products, and merchandise inventories are carried at the lower of current market value or cost (generally determined under the last-in, first-out method \u2013 LIFO). Inventory costs include expenditures and other charges (including depreciation) directly and indirectly incurred in bringing the inventory to its existing condition and location. Selling expenses and general and administrative expenses are reported as period costs and excluded from inventory cost. Inventories of materials and supplies are valued at cost or less.\n\nProperty, Plant, and Equipment\nCost Basis.\n The Corporation uses the \u201csuccessful efforts\u201d method to account for its exploration and production activities. Under this method, costs are accumulated on a field-by-field basis. Costs incurred to purchase, lease, or otherwise acquire a property (whether unproved or proved) are capitalized when incurred. Exploratory well costs are carried as an asset when the well has found a sufficient quantity of reserves to justify its completion as a producing well and where the Corporation is making sufficient progress assessing the reserves and the economic and operating viability of the project. Exploratory well costs not meeting these criteria are charged to expense. Other exploratory expenditures, including geophysical costs and annual lease rentals, are expensed as incurred. Development costs, including costs of productive wells and development dry holes, are capitalized.\nInterest costs incurred to finance expenditures during the construction phase of multiyear projects are capitalized as part of the historical cost of acquiring the constructed assets. The project construction phase commences with the development of the detailed engineering design and ends when the constructed assets are ready for their intended use. Capitalized interest costs are included in property, plant, and equipment and are depreciated over the service life of the related assets.\nDepreciation, Depletion, and Amortization.\n Depreciation, depletion, and amortization are primarily determined under either the unit-of-production method or the straight-line method, which is based on estimated asset service life, taking obsolescence into consideration.\nAcquisition costs of proved properties are amortized using a unit-of-production method, computed on the basis of total proved oil and natural gas reserve volumes. Capitalized exploratory drilling and development costs associated with productive depletable extractive properties are amortized using the unit-of-production rates based on the amount of proved developed reserves of oil and gas that are estimated to be recoverable from existing facilities using current operating methods. Under the unit-of-production method, oil and natural gas volumes are considered produced once they have been measured through meters at custody transfer or sales transaction points at the outlet valve on the lease or field storage tank.\n77\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nIn the event that the unit-of-production method does not result in an equitable allocation of cost over the economic life of an upstream asset, an alternative method is used. The straight-line method is used in limited situations where the expected life of the asset does not reasonably correlate with that of the underlying reserves. For example, certain assets used in the production of oil and natural gas have a shorter life than the reserves, and as such, the Corporation uses straight-line depreciation to ensure the asset is fully depreciated by the end of its useful life.\nTo the extent that proved reserves for a property are substantially de-booked and that property continues to produce such that the resulting depreciation charge does not result in an equitable allocation of cost over the expected life, assets will be depreciated using a unit-of-production method based on reserves determined at the most recent SEC price which results in a more meaningful quantity of proved reserves, appropriately adjusted for production and technical changes.\nInvestments in refinery, chemical process, and lubes basestock manufacturing equipment are generally depreciated on a straight-line basis over a\n25-year\n life. Service station buildings and fixed improvements are generally depreciated over a\n20-year\n life. Maintenance and repairs, including planned major maintenance, are expensed as incurred. Major renewals and improvements are capitalized, and the assets replaced are retired.\nImpairment Assessment.\nThe Corporation tests assets or groups of assets for recoverability on an ongoing basis whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Among the events or changes in circumstances which could indicate that the carrying value of an asset or asset group may not be recoverable are the following:\n\u2022\na significant decrease in the market price of a long-lived asset;\n\u2022\na significant adverse change in the extent or manner in which an asset is being used or in its physical condition, including a significant decrease in current and projected reserve volumes;\n\u2022\na significant adverse change in legal factors or in the business climate that could affect the value, including an adverse action or assessment by a regulator;\n\u2022\nan accumulation of project costs significantly in excess of the amount originally expected;\n\u2022\na current-period operating loss combined with a history and forecast of operating or cash flow losses; and\n\u2022\na current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.\nThe Corporation has a robust process to monitor for indicators of potential impairment across its asset groups throughout the year. This process is aligned with the requirements of ASC 360 and ASC 932, and relies, in part, on the Corporation\u2019s planning and budgeting cycle. Asset valuation analysis, profitability reviews, and other periodic control processes assist the Corporation in assessing whether events or changes in circumstances indicate the carrying amounts of any of its assets may not be recoverable.\nBecause the lifespans of the vast majority of the Corporation\u2019s major assets are measured in decades, the future cash flows of these assets are predominantly based on long-term oil and natural gas commodity prices and industry margins, development costs, and production costs. Significant reductions in the Corporation\u2019s view of oil or natural gas commodity prices or margin ranges, especially the longer-term prices and margins, and changes in the development plans, including decisions to defer, reduce, or eliminate planned capital spending, can be an indicator of potential impairment. Other events or changes in circumstances can be indicators of potential impairment as well.\nIn general, the Corporation does not view temporarily low prices or margins as an indication of impairment. Management believes that prices over the long term must be sufficient to generate investments in energy supply to meet global demand. Although prices will occasionally drop significantly, industry prices over the long term will continue to be driven by market supply and demand fundamentals. On the supply side, industry production from mature fields is declining. This is being offset by investments to generate production from new discoveries, field developments, and technology and efficiency advancements. OPEC+ investment activities and production policies also have an impact on world oil supplies. The demand side is largely a function of general economic activities, alternative energy sources, and levels of prosperity. During the lifespan of its major assets, the Corporation expects that oil and gas prices and industry margins will experience significant volatility. Consequently, these assets will experience periods of higher earnings and periods of lower earnings, or even losses. In assessing whether events or changes in circumstances indicate the carrying value of an asset may not be recoverable, the Corporation considers recent periods of operating losses in the context of its longer-term view of prices and margins.\nIn the Upstream, the standardized measure of discounted cash flows included in the Supplemental Information on Oil and Gas Exploration and Production Activities is required to use prices based on the average of first-of-month prices in the year. These prices represent discrete points in time and could be higher or lower than the Corporation\u2019s price assumptions which are used for impairment assessments. The Corporation believes the standardized measure does not provide a reliable estimate of the expected future cash flows to be obtained from the development and production of its oil and gas properties or of the value of its oil and gas reserves, and therefore, does not consider it relevant in determining whether events or changes in circumstances indicate the need for an impairment assessment.\n78\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nGlobal Outlook and Cash Flow Assessment.\n\nThe annual planning and budgeting process, known as the Corporate Plan, is the mechanism by which resources (capital, operating expenses, and people) are allocated across the Corporation. The foundation for the assumptions supporting the Corporate Plan is the Global Outlook (Outlook), which contains the Corporation\u2019s demand and supply projections based on its assessment of current trends in technology, government policies, consumer preferences, geopolitics, economic development, and other factors. Reflective of the existing global policy environment, the Outlook does not attempt to project the degree of necessary future policy and technology advancement and deployment for the world, or the Corporation, to meet net zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the Outlook, and the Corporation\u2019s business plans will be updated accordingly.\nIf events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, the Corporation estimates the future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. In performing this assessment, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. Cash flows used in recoverability assessments are based on the assumptions developed in the Corporate Plan, which is reviewed and approved by the Board of Directors, and are consistent with the criteria management uses to evaluate investment opportunities. These evaluations make use of the Corporation\u2019s assumptions of future capital allocations, crude oil and natural gas commodity prices, including price differentials, refining and chemical margins, volumes, development and operating costs including greenhouse gas emission prices, and foreign currency exchange rates. Notably, when assessing future cash flows, the Corporation includes the estimated costs in support of reaching its greenhouse gas emission-reduction plans, including its goal of net-zero Scope 1 and 2 greenhouse gas emissions from its operated assets in the Permian Basin by 2035. Volumes are based on projected field and facility production profiles, throughput, or sales. Management\u2019s estimate of upstream production volumes used for projected cash flows makes use of proved reserve quantities and may include risk-adjusted unproved reserve quantities. Cash flow estimates for impairment testing exclude the effects of derivative instruments. As part of the Corporate Plan, the Company considers estimated greenhouse gas emission costs, even for jurisdictions without a current greenhouse gas pricing policy.\nFair Value of Impaired Assets.\n\nAn asset group is impaired if its estimated undiscounted cash flows are less than the asset group's carrying value. Impairments are measured by the excess of the carrying value over fair value. The assessment of fair value is based upon the views of a likely market participant. The principal parameters used to establish fair value include estimates of acreage values and flowing production metrics from comparable market transactions, market-based estimates of historical cash flow multiples, and discounted cash flows. Inputs and assumptions used in discounted cash flow models include estimates of future production volumes, throughput and product sales volumes, commodity prices (which are consistent with the average of third-party industry experts and government agencies), refining and chemical margins, drilling and development costs, operating costs, and discount rates which are reflective of the characteristics of the asset group.\nOther Impairments Related to Property, Plant, and Equipment.\n\nUnproved properties are assessed periodically to determine whether they have been impaired. Significant unproved properties are assessed for impairment individually, and valuation allowances against the capitalized costs are recorded based on the Corporation's future development plans, the estimated economic chance of success, and the length of time that the Corporation expects to hold the properties. Properties that are not individually significant are aggregated by groups and amortized based on development risk and average holding period.\nLong-lived assets that are held for sale are evaluated for possible impairment by comparing the carrying value of the asset with its fair value less the cost to sell. If the net book value exceeds the fair value less cost to sell, the assets are considered impaired and adjusted to the lower value. Gains on sales of proved and unproved properties are only recognized when there is neither uncertainty about the recovery of costs applicable to any interest retained nor any substantial obligation for future performance by the Corporation.\n\nEnvironmental Liabilities\nLiabilities for environmental costs are recorded when it is probable that obligations have been incurred and the amounts can be reasonably estimated. These liabilities are not reduced by possible recoveries from third parties, and projected cash expenditures are not discounted.\nForeign Currency Translation\nThe Corporation selects the functional reporting currency for its international subsidiaries based on the currency of the primary economic environment in which each subsidiary operates. Operations in the Product Solutions businesses use the local currency. However, the U.S. dollar is used in countries with a history of high inflation (primarily in Latin America) and in Singapore, which predominantly sells into the U.S. dollar export market. Upstream operations which are relatively self-contained and integrated within a particular country, such as in Canada and Europe, use the local currency. Some Upstream operations, primarily in Asia and Africa, use the U.S. dollar because they predominantly sell crude and natural gas production into U.S. dollar-denominated markets.\nFor all operations, gains or losses from remeasuring foreign currency transactions into the functional currency are included in income.\n79\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 2. Earnings Per Share\nEarnings per common share\n2025\n2024\n2023\nNet income (loss) attributable to ExxonMobil\n(millions of dollars)\n28,844\n\n33,680\n\n36,010\n\nWeighted-average number of common shares outstanding\n(millions of shares)\n(1)\n4,305\n\n4,298\n\n4,052\n\nEarnings (loss) per common share\n(dollars)\n\n(2)\n6.70\n\n7.84\n\n8.89\n\nDividends paid per common share\n(dollars)\n4.00\n\n3.84\n\n3.68\n\n(1)\n Includes restricted shares not vested as well as\n545\n million shares issued for the Pioneer acquisition on May 3, 2024.\n(2)\n The earnings (loss) per common share and earnings (loss) per common share - assuming dilution are the same in each period shown.\nNote 3. Disclosures about Segments and Related Information\nOur\nfour\n reportable segments are Upstream, Energy Products, Chemical Products, and Specialty Products. The factors used to identify these reportable segments are based on the nature of the operations that are undertaken by each segment and reflect the nature of internal reviews by our Management Committee (MC). The MC is considered collectively, and not in their individual capacity, to be our Chief Operating Decision Maker (CODM), and includes our CEO, CFO, and two Senior Vice Presidents serving as contact executives overseeing the Upstream and Product Solutions businesses.\nThe Upstream segment is organized to explore for and produce crude oil and natural gas. Product Solutions consists of the Energy Products, Chemical Products, and Specialty Products segments, which are organized to manufacture and sell petroleum products and petrochemicals.\n\u2022\nEnergy Products: Fuels, aromatics, and catalysts and licensing\n\u2022\nChemical Products: Olefins, polyolefins, and intermediates\n\u2022\nSpecialty Products: Finished lubricants, basestocks and waxes, synthetics, and elastomers and resins\nThe CODM generally allocates resources through an annual planning process. They also allocate capital based on detailed project economics and long-term strategic objectives across reportable segments. The CODM primarily uses changes in Net income (loss) attributable to ExxonMobil to assess segment financial performance.\nNet income (loss) attributable to ExxonMobil includes transfers at estimated market prices. In Corporate and Financing, interest revenue relates to interest earned on cash deposits and marketable securities. Interest expense includes non-debt-related interest expense of $\n0.3\n billion in 2025, $\n0.4\n billion in 2024, and $\n0.2\n billion in 2023.\n80\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n(millions of dollars)\nUpstream\nEnergy Products\nChemical Products\nSpecialty Products\nSegment Total\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nYear ended December 31, 2025\nRevenues and other income\nSales and other operating revenue\n25,396\n\n13,993\n\n99,073\n\n145,378\n\n7,594\n\n14,615\n\n5,502\n\n12,269\n\n323,820\n\nIncome from equity affiliates\n19\n\n4,340\n\n139\n\n198\n\n135\n\n544\n\n7\n\n(\n52\n)\n5,330\n\nIntersegment revenue\n25,637\n\n36,769\n\n19,172\n\n26,694\n\n6,777\n\n3,324\n\n2,133\n\n499\n\n121,005\n\nOther income\n437\n\n560\n\n113\n\n849\n\n3\n\n(\n10\n)\n13\n\n89\n\n2,054\n\nSegment revenues and other income\n51,489\n\n55,662\n\n118,497\n\n173,119\n\n14,509\n\n18,473\n\n7,655\n\n12,805\n\n452,209\n\nCosts and other items\nCrude oil and product purchases\n19,765\n\n10,035\n\n102,027\n\n138,024\n\n8,237\n\n13,069\n\n3,931\n\n8,108\n\n303,196\n\nOperating expenses, excl. depreciation and depletion\n(1)\n11,344\n\n10,515\n\n8,387\n\n9,162\n\n4,620\n\n4,693\n\n2,079\n\n2,297\n\n53,097\n\nDepreciation and depletion (includes impairments)\n13,906\n\n7,451\n\n828\n\n749\n\n595\n\n760\n\n107\n\n163\n\n24,559\n\nInterest expense\n128\n\n40\n\n5\n\n37\n\n\u2014\n\n(\n2\n)\n\u2014\n\n13\n\n221\n\nOther taxes and duties\n179\n\n2,097\n\n3,240\n\n19,205\n\n79\n\n174\n\n9\n\n184\n\n25,167\n\nTotal costs and other deductions\n45,322\n\n30,138\n\n114,487\n\n167,177\n\n13,531\n\n18,694\n\n6,126\n\n10,765\n\n406,240\n\nSegment income (loss) before income taxes\n6,167\n\n25,524\n\n4,010\n\n5,942\n\n978\n\n(\n221\n)\n1,529\n\n2,040\n\n45,969\n\nIncome tax expense (benefit)\n1,104\n\n8,753\n\n792\n\n1,097\n\n75\n\n(\n144\n)\n327\n\n362\n\n12,366\n\nSegment net income (loss) incl. noncontrolling interests\n5,063\n\n16,771\n\n3,218\n\n4,845\n\n903\n\n(\n77\n)\n1,202\n\n1,678\n\n33,603\n\nNet income (loss) attributable to noncontrolling interests\n\u2014\n\n480\n\n226\n\n414\n\n\u2014\n\n26\n\n2\n\n21\n\n1,169\n\nSegment income (loss)\n5,063\n\n16,291\n\n2,992\n\n4,431\n\n903\n\n(\n103\n)\n1,200\n\n1,657\n\n32,434\n\nReconciliation of consolidated revenues\nSegment revenues and other income\n452,209\n\nOther revenues\n(2)\n1,034\n\nElimination of intersegment revenues\n(\n121,005\n)\nTotal consolidated revenues and other income\n332,238\n\nReconciliation of income (loss) attributable to ExxonMobil\nTotal segment income (loss)\n32,434\n\nCorporate and Financing income (loss)\n(\n3,590\n)\nNet income (loss) attributable to ExxonMobil\n28,844\n\n(millions of dollars)\nUpstream\nEnergy Products\nChemical Products\nSpecialty Products\nSegment Total\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nAs of December 31, 2025\nAdditions to property, plant, and equipment\n(3)\n15,872\n\n9,490\n\n703\n\n1,251\n\n800\n\n522\n\n368\n\n227\n\n29,233\n\nInvestments in equity companies\n5,491\n\n19,429\n\n460\n\n1,048\n\n2,946\n\n2,616\n\n\u2014\n\n775\n\n32,765\n\nTotal assets\n153,042\n\n134,529\n\n32,652\n\n47,265\n\n17,365\n\n17,991\n\n2,961\n\n8,020\n\n413,825\n\nReconciliation to Corporate Total\nSegment Total\nCorporate and Financing\nCorporate Total\nAdditions to property, plant, and equipment\n(3)\n29,233\n\n2,243\n\n31,476\n\nInvestments in equity companies\n32,765\n\n(\n112\n)\n32,653\n\nTotal assets\n413,825\n\n35,155\n\n448,980\n\n(1)\n Operating expenses, excl. depreciation and depletion includes the following GAAP line items, as reflected on the Income Statement: Production and manufacturing expenses; Selling, general and administrative expenses; Exploration expenses, including dry holes; and Non-service pension and postretirement benefit expense.\n(2)\n Primarily Corporate and Financing Interest revenue of $\n1,212\n million.\n(3)\nIncludes non-cash additions.\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\n81\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n(millions of dollars)\nUpstream\nEnergy Products\nChemical Products\nSpecialty Products\nSegment Total\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nYear ended December 31, 2024\nRevenues and other income\nSales and other operating revenue\n22,929\n\n14,202\n\n101,325\n\n159,531\n\n8,558\n\n14,338\n\n5,790\n\n12,463\n\n339,136\n\nIncome from equity affiliates\n(\n36\n)\n5,649\n\n140\n\n(\n109\n)\n166\n\n615\n\n\u2014\n\n(\n26\n)\n6,399\n\nIntersegment revenue\n24,633\n\n41,809\n\n23,626\n\n26,034\n\n7,329\n\n3,893\n\n2,462\n\n573\n\n130,359\n\nOther income\n890\n\n670\n\n295\n\n192\n\n5\n\n7\n\n22\n\n116\n\n2,197\n\nSegment revenues and other income\n48,416\n\n62,330\n\n125,386\n\n185,648\n\n16,058\n\n18,853\n\n8,274\n\n13,126\n\n478,091\n\nCosts and other items\nCrude oil and product purchases\n18,325\n\n10,388\n\n110,205\n\n153,811\n\n8,510\n\n12,621\n\n4,160\n\n8,753\n\n326,773\n\nOperating expenses, excl. depreciation and depletion\n(1)\n9,822\n\n10,695\n\n8,034\n\n8,924\n\n4,781\n\n4,419\n\n1,931\n\n2,316\n\n50,922\n\nDepreciation and depletion (includes impairments)\n11,510\n\n8,014\n\n799\n\n734\n\n611\n\n485\n\n104\n\n133\n\n22,390\n\nInterest expense\n185\n\n82\n\n9\n\n10\n\n1\n\n1\n\n\u2014\n\n3\n\n291\n\nOther taxes and duties\n334\n\n2,750\n\n3,421\n\n19,699\n\n68\n\n78\n\n7\n\n185\n\n26,542\n\nTotal costs and other deductions\n40,176\n\n31,929\n\n122,468\n\n183,178\n\n13,971\n\n17,604\n\n6,202\n\n11,390\n\n426,918\n\nSegment income (loss) before income taxes\n8,240\n\n30,401\n\n2,918\n\n2,470\n\n2,087\n\n1,249\n\n2,072\n\n1,736\n\n51,173\n\nIncome tax expense (benefit)\n1,814\n\n10,622\n\n631\n\n164\n\n460\n\n262\n\n494\n\n243\n\n14,690\n\nSegment net income (loss) incl. noncontrolling interests\n6,426\n\n19,779\n\n2,287\n\n2,306\n\n1,627\n\n987\n\n1,578\n\n1,493\n\n36,483\n\nNet income (loss) attributable to noncontrolling interests\n\u2014\n\n815\n\n188\n\n372\n\n\u2014\n\n37\n\n2\n\n17\n\n1,431\n\nSegment income (loss)\n6,426\n\n18,964\n\n2,099\n\n1,934\n\n1,627\n\n950\n\n1,576\n\n1,476\n\n35,052\n\nReconciliation of consolidated revenues\nSegment revenues and other income\n478,091\n\nOther revenues\n(2)\n1,853\n\nElimination of intersegment revenues\n(\n130,359\n)\nTotal consolidated revenues and other income\n349,585\n\nReconciliation of income (loss) attributable to ExxonMobil\nTotal segment income (loss)\n35,052\n\nCorporate and Financing income (loss)\n(\n1,372\n)\nNet income (loss) attributable to ExxonMobil\n33,680\n\n(millions of dollars)\nUpstream\nEnergy Products\nChemical Products\nSpecialty Products\nSegment Total\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nAs of December 31, 2024\nAdditions to property, plant, and equipment\n(3)\n94,649\n\n8,371\n\n589\n\n1,450\n\n474\n\n1,161\n\n230\n\n227\n\n107,151\n\nInvestments in equity companies\n4,884\n\n21,396\n\n444\n\n915\n\n3,016\n\n2,649\n\n\u2014\n\n814\n\n34,118\n\nTotal assets\n154,914\n\n134,609\n\n32,143\n\n43,399\n\n17,445\n\n17,692\n\n2,882\n\n8,040\n\n411,124\n\nReconciliation to Corporate Total\nSegment Total\nCorporate and Financing\nCorporate Total\nAdditions to property, plant, and equipment\n(3)\n107,151\n\n2,181\n\n109,332\n\nInvestments in equity companies\n34,118\n\n(\n108\n)\n34,010\n\nTotal assets\n411,124\n\n42,351\n\n453,475\n\n(1)\nOperating expenses, excl. depreciation and depletion includes the following GAAP line items, as reflected on the Income Statement: Production and manufacturing expenses; Selling, general and administrative expenses; Exploration expenses, including dry holes; and Non-service pension and postretirement benefit expense.\n(2)\n Primarily Corporate and Financing Interest revenue of $\n1,600\n million.\n(3)\nIncludes non-cash additions. See\nNote 20\n for additions resulting from the Pioneer acquisition in 2024.\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\n82\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n(millions of dollars)\nUpstream\nEnergy Products\nChemical Products\nSpecialty Products\nSegment Total\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nU.S.\nNon-U.S.\nYear ended December 31, 2023\nRevenues and other income\nSales and other operating revenue\n9,500\n\n16,074\n\n103,868\n\n164,515\n\n7,951\n\n14,314\n\n6,044\n\n12,363\n\n334,629\n\nIncome from equity affiliates\n63\n\n5,550\n\n140\n\n131\n\n126\n\n761\n\n\u2014\n\n(\n25\n)\n6,746\n\nIntersegment revenue\n20,971\n\n38,982\n\n23,481\n\n28,258\n\n7,991\n\n3,643\n\n2,570\n\n555\n\n126,451\n\nOther income\n631\n\n466\n\n183\n\n87\n\n6\n\n12\n\n19\n\n139\n\n1,543\n\nSegment revenues and other income\n31,165\n\n61,072\n\n127,672\n\n192,991\n\n16,074\n\n18,730\n\n8,633\n\n13,032\n\n469,369\n\nCosts and other items\nCrude oil and product purchases\n9,945\n\n11,279\n\n107,796\n\n152,487\n\n8,824\n\n13,096\n\n4,718\n\n8,955\n\n317,100\n\nOperating expenses, excl. depreciation and depletion\n(1)\n6,696\n\n10,960\n\n7,851\n\n9,434\n\n4,560\n\n4,643\n\n1,822\n\n2,238\n\n48,204\n\nDepreciation and depletion (includes impairments)\n8,863\n\n7,737\n\n765\n\n797\n\n605\n\n706\n\n93\n\n222\n\n19,788\n\nInterest expense\n82\n\n74\n\n4\n\n7\n\n2\n\n2\n\n\u2014\n\n2\n\n173\n\nOther taxes and duties\n361\n\n2,684\n\n3,421\n\n22,226\n\n61\n\n78\n\n6\n\n174\n\n29,011\n\nTotal costs and other deductions\n25,947\n\n32,734\n\n119,837\n\n184,951\n\n14,052\n\n18,525\n\n6,639\n\n11,591\n\n414,276\n\nSegment income (loss) before income taxes\n5,218\n\n28,338\n\n7,835\n\n8,040\n\n2,022\n\n205\n\n1,994\n\n1,441\n\n55,093\n\nIncome tax expense (benefit)\n1,016\n\n10,593\n\n1,543\n\n1,492\n\n396\n\n158\n\n458\n\n235\n\n15,891\n\nSegment net income (loss) incl. noncontrolling interests\n4,202\n\n17,745\n\n6,292\n\n6,548\n\n1,626\n\n47\n\n1,536\n\n1,206\n\n39,202\n\nNet income (loss) attributable to noncontrolling interests\n\u2014\n\n639\n\n169\n\n529\n\n\u2014\n\n36\n\n\u2014\n\n28\n\n1,401\n\nSegment income (loss)\n4,202\n\n17,106\n\n6,123\n\n6,019\n\n1,626\n\n11\n\n1,536\n\n1,178\n\n37,801\n\nReconciliation of consolidated revenues\nSegment revenues and other income\n469,369\n\nOther revenues\n(2)\n1,664\n\nElimination of intersegment revenues\n(\n126,451\n)\nTotal consolidated revenues and other income\n344,582\n\nReconciliation of income (loss) attributable to ExxonMobil\nTotal segment income (loss)\n37,801\n\nCorporate and Financing income (loss)\n(\n1,791\n)\nNet income (loss) attributable to ExxonMobil\n36,010\n\n(1)\n Operating expenses, excl. depreciation and depletion includes the following GAAP line items, as reflected on the Income Statement: Production and manufacturing expenses; Selling, general and administrative expenses; Exploration expenses, including dry holes; and Non-service pension and postretirement benefit expense.\n(2)\n Primarily Corporate and Financing Interest revenue of $\n1,628\n million.\nDue to rounding, numbers presented may not add up precisely to the totals indicated.\n83\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nRevenue from Contracts with Customers\nSales and other operating revenue include both revenue within the scope of ASC 606 and outside the scope of ASC 606. Revenue outside the scope of ASC 606 primarily relates to physically settled commodity contracts accounted for as derivatives. Contractual terms, credit quality, and type of customer are generally similar between contracts within the scope of ASC 606 and those outside it.\nSales and other operating revenue\n(millions of dollars)\n2025\n2024\n2023\n\nRevenue from contracts with customers\n226,909\n\n245,143\n\n256,455\n\nRevenue outside the scope of ASC 606\n96,996\n\n94,104\n\n78,242\n\nTotal\n323,905\n\n339,247\n\n334,697\n\nGeographic\nSales and other operating revenue\n(millions of dollars)\n2025\n2024\n2023\n\nUnited States\n137,639\n\n138,657\n\n127,374\n\nNon-U.S.\n186,266\n\n200,590\n\n207,323\n\nTotal\n323,905\n\n339,247\n\n334,697\n\nSignificant non-U.S. revenue sources include:\n(1)\nCanada\n27,363\n\n29,746\n\n28,994\n\n(1)\n Revenue is determined by primary country of operations. Excludes certain sales and other operating revenues in Non-U.S. operations where attribution to a specific country is not practicable.\nLong-lived assets\n(millions of dollars)\nDecember 31,\n2025\n2024\n2023\n\nUnited States\n183,619\n\n178,633\n\n95,792\n\nNon-U.S.\n115,754\n\n115,685\n\n119,148\n\nTotal\n299,373\n\n294,318\n\n214,940\n\nSignificant non-U.S. long-lived assets include:\nCanada\n29,973\n\n28,761\n\n31,682\n\n84\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 4. Pension and Other Postretirement Benefits\nThe benefit obligations and plan assets associated with the Corporation\u2019s principal benefit plans are measured on December 31.\n\nPension Benefits\nOther Postretirement Benefits\n(millions of dollars, except where stated otherwise)\nU.S.\nNon-U.S.\n2025\n2024\n2025\n2024\n2025\n2024\n\nWeighted-average assumptions used to determine benefit obligations at December 31\n\nDiscount rate\n(percent)\n5.50\n\n5.70\n\n5.00\n\n4.60\n\n5.50\n\n5.80\n\nLong-term rate of compensation increase\n(percent)\n4.00\n\n4.00\n\n4.30\n\n4.20\n\n4.00\n\n4.00\n\nChange in benefit obligation\nBenefit obligation at January 1\n12,999\n\n13,143\n\n19,198\n\n21,327\n\n4,791\n\n5,014\n\nService cost\n517\n\n499\n\n324\n\n338\n\n75\n\n81\n\nInterest cost\n677\n\n671\n\n842\n\n823\n\n262\n\n250\n\nActuarial loss/(gain)\n(1)\n218\n\n(\n441\n)\n(\n1,231\n)\n(\n658\n)\n55\n\n(\n81\n)\nBenefits paid\n(2)(3)\n(\n1,104\n)\n(\n874\n)\n(\n1,273\n)\n(\n1,240\n)\n(\n449\n)\n(\n534\n)\nForeign exchange rate changes\n\u2014\n\u2014\n1,648\n\n(\n1,274\n)\n20\n\n(\n40\n)\nAmendments, divestments and other\n(5)(6)\n(\n795\n)\n1\n\n(\n990\n)\n(\n118\n)\n138\n\n101\n\nBenefit obligation at December 31\n12,512\n\n12,999\n\n18,518\n\n19,198\n\n4,892\n\n4,791\n\nAccumulated benefit obligation at December 31\n10,838\n\n11,227\n\n17,210\n\n17,818\n\n\u2014\n\u2014\n\nFor selection of the discount rate for U.S. plans, several sources of information are considered, including interest rate market indicators and the effective discount rate determined by use of a yield curve based on high-quality bonds applied to the estimated cash outflows for benefit payments. For major non-U.S. plans, the discount rate is determined by using a spot yield curve of high-quality, local-currency-denominated bonds at an average maturity approximating that of the liabilities.\nThe measurement of the accumulated postretirement benefit obligation assumes a health care cost trend rate of\n4.0\n percent in\n2027\n and subsequent years.\n\nPension Benefits\nOther Postretirement Benefits\n\u00a0(millions of dollars)\nU.S.\nNon-U.S.\n2025\n2024\n2025\n2024\n2025\n2024\nChange in plan assets\n\nFair value at January 1\n11,244\n\n11,367\n\n17,378\n\n18,431\n\n364\n\n371\n\nActual return on plan assets\n1,189\n\n286\n\n680\n\n862\n\n40\n\n20\n\nForeign exchange rate changes\n\u2014\n\u2014\n1,364\n\n(\n1,051\n)\n\u2014\n\u2014\nCompany contribution\n250\n\n300\n\n307\n\n288\n\n29\n\n24\n\nBenefits paid\n(4)\n(\n878\n)\n(\n709\n)\n(\n940\n)\n(\n931\n)\n(\n49\n)\n(\n51\n)\nOther\n(5)(6)\n(\n767\n)\n\u2014\n\n(\n641\n)\n(\n221\n)\n\u2014\n\u2014\nFair value at December 31\n11,038\n\n11,244\n\n18,148\n\n17,378\n\n384\n\n364\n\n(1)\n Actuarial loss/(gain) primarily reflects a lower discount rate in the U.S. and generally higher discount rates outside of the U.S.\n(2)\n Benefit payments for funded and unfunded plans.\n(3)\n For 2024, other postretirement benefits paid are net of $\n10\n million of Medicare subsidy receipts.\n(4)\nBenefit payments for funded plans.\n(5)\n The U.S. ExxonMobil Pension Plan purchased a group annuity contract from an insurer in 2025 for $\n767\n million to transfer obligations to pay future benefits. The transaction did not change the amount of pension benefits payable to transferred participants and did not require additional funding from the plan.\n(6)\n Non-U.S. includes benefit obligation and plan asset reductions in 2025 of $\n1,059\n million and $\n642\n million, respectively, resulting from the divestment of Product Solutions affiliates in France.\n85\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nThe funding levels of all qualified pension plans are in compliance with standards set by applicable law or regulation. As shown in the table below, certain smaller U.S. pension plans and a number of non-U.S. pension plans are not funded because local applicable tax rules and regulatory practices do not encourage funding of these plans. All defined benefit pension obligations, regardless of the funding status of the underlying plans, are fully supported by the financial strength of the Corporation or the respective sponsoring affiliate.\n\nPension Benefits\n(millions of dollars)\nU.S.\nNon-U.S.\n2025\n2024\n2025\n2024\nAssets in excess of/(less than) benefit obligation\n\nBalance at December 31\n\nFunded plans\n(\n81\n)\n(\n267\n)\n2,879\n\n1,679\n\nUnfunded plans\n(\n1,393\n)\n(\n1,488\n)\n(\n3,249\n)\n(\n3,499\n)\nTotal\n(\n1,474\n)\n(\n1,755\n)\n(\n370\n)\n(\n1,820\n)\n\nThe authoritative guidance for defined benefit pension and other postretirement plans requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its Consolidated Balance Sheet and to recognize changes in that funded status in the year in which the changes occur through other comprehensive income.\n\nPension Benefits\nOther Postretirement Benefits\n(millions of dollars)\nU.S.\nNon-U.S.\n2025\n2024\n2025\n2024\n2025\n2024\nAssets in excess of/(less than) benefit obligation\n\nBalance at December 31\n(1)\n(\n1,474\n)\n(\n1,755\n)\n(\n370\n)\n(\n1,820\n)\n(\n4,508\n)\n(\n4,427\n)\nAmounts recorded in the Consolidated Balance Sheet consist of:\nOther assets\n3\n\n2\n\n3,175\n\n2,399\n\n\u2014\n\u2014\nCurrent liabilities\n(\n199\n)\n(\n213\n)\n(\n208\n)\n(\n207\n)\n(\n276\n)\n(\n283\n)\nPostretirement benefits reserves\n(\n1,278\n)\n(\n1,544\n)\n(\n3,337\n)\n(\n4,012\n)\n(\n4,232\n)\n(\n4,144\n)\nTotal recorded\n(\n1,474\n)\n(\n1,755\n)\n(\n370\n)\n(\n1,820\n)\n(\n4,508\n)\n(\n4,427\n)\nAmounts recorded in accumulated other comprehensive income consist of:\nNet actuarial loss/(gain)\n79\n\n631\n\n(\n532\n)\n557\n\n(\n1,291\n)\n(\n1,421\n)\nPrior service cost\n(\n222\n)\n(\n252\n)\n447\n\n420\n\n(\n345\n)\n(\n405\n)\nTotal recorded in accumulated other comprehensive income\n(\n143\n)\n379\n\n(\n85\n)\n977\n\n(\n1,636\n)\n(\n1,826\n)\n(1)\nFair value of assets less benefit obligation shown on the preceding page.\n86\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nThe long-term expected rate of return on funded assets shown below is established for each benefit plan by developing a forward-looking, long-term return assumption for each asset class, taking into account factors such as the expected real return for the specific asset class and inflation. A single, long-term rate of return is then calculated as the weighted-average of the target asset allocation percentages and the long-term return assumption for each asset class.\n\nPension Benefits\nOther Postretirement\nBenefits\n(millions of dollars, except where stated otherwise)\nU.S.\nNon-U.S.\n2025\n2024\n2023\n2025\n2024\n2023\n2025\n2024\n2023\nWeighted-average assumptions used to determine net periodic benefit cost for years ended December 31\nDiscount rate\n(percent)\n5.70\n\n5.30\n\n5.60\n\n4.60\n\n4.30\n\n4.90\n\n5.80\n\n5.30\n\n5.60\n\nLong-term rate of return on funded assets\n(percent)\n6.00\n\n6.80\n\n5.20\n\n4.70\n\n5.50\n\n4.20\n\n5.30\n\n6.00\n\n4.70\n\nLong-term rate of compensation increase\n(percent)\n4.00\n\n4.50\n\n4.50\n\n4.20\n\n4.50\n\n5.20\n\n4.00\n\n4.50\n\n4.50\n\nComponents of net periodic benefit cost\nService cost\n517\n\n499\n\n466\n\n324\n\n338\n\n323\n\n75\n\n81\n\n78\n\nInterest cost\n677\n\n671\n\n664\n\n842\n\n823\n\n922\n\n262\n\n250\n\n276\n\nExpected return on plan assets\n(\n596\n)\n(\n724\n)\n(\n532\n)\n(\n838\n)\n(\n955\n)\n(\n688\n)\n(\n16\n)\n(\n20\n)\n(\n14\n)\nAmortization of actuarial loss/(gain)\n73\n\n83\n\n85\n\n37\n\n97\n\n108\n\n(\n103\n)\n(\n103\n)\n(\n122\n)\nAmortization of prior service cost\n(\n31\n)\n(\n31\n)\n(\n29\n)\n59\n\n50\n\n52\n\n(\n62\n)\n(\n63\n)\n(\n42\n)\nNet pension enhancement and curtailment/settlement cost\n75\n\n27\n\n29\n\n22\n\n16\n\n5\n\n(\n1\n)\n\u2014\n\n\u2014\n\nNet periodic benefit cost\n715\n\n525\n\n683\n\n446\n\n369\n\n722\n\n155\n\n145\n\n176\n\nChanges in amounts recorded in accumulated other comprehensive income:\nNet actuarial loss/(gain)\n(\n406\n)\n(\n3\n)\n(\n39\n)\n(\n1,073\n)\n(\n611\n)\n602\n\n32\n\n(\n81\n)\n154\n\nAmortization of actuarial (loss)/gain\n(\n147\n)\n(\n110\n)\n(\n114\n)\n(\n38\n)\n(\n112\n)\n(\n108\n)\n103\n\n103\n\n122\n\nPrior service cost/(credit)\n\u2014\n\n\u2014\n\n(\n17\n)\n19\n\n81\n\n153\n\n\u2014\n\n(\n8\n)\n(\n312\n)\nAmortization of prior service (cost)/credit\n31\n\n31\n\n29\n\n(\n59\n)\n(\n44\n)\n(\n52\n)\n63\n\n63\n\n42\n\nForeign exchange rate changes\n\u2014\n\u2014\n\u2014\n89\n\n(\n102\n)\n46\n\n(\n8\n)\n9\n\n(\n2\n)\nTotal recorded in other comprehensive income\n(\n522\n)\n(\n82\n)\n(\n141\n)\n(\n1,062\n)\n(\n788\n)\n641\n\n190\n\n86\n\n4\n\nTotal recorded in net periodic benefit cost and other comprehensive income, before tax\n193\n\n443\n\n542\n\n(\n616\n)\n(\n419\n)\n1,363\n\n345\n\n231\n\n180\n\nCosts for defined contribution plans were $\n0.4\n billion, $\n0.4\n billion, and $\n0.4\n billion in 2025, 2024, and 2023, respectively.\n87\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nA summary of the change in accumulated other comprehensive income is shown in the table below:\nTotal Pension and Other Postretirement Benefits\n\n(millions of dollars)\n2025\n2024\n2023\n\n(Charge)/credit to other comprehensive income, before tax\n\nU.S. pension\n522\n\n82\n\n141\n\nNon-U.S. pension\n1,062\n\n788\n\n(\n641\n)\nOther postretirement benefits\n(\n190\n)\n(\n86\n)\n(\n4\n)\nTotal (charge)/credit to other comprehensive income, before tax\n1,394\n\n784\n\n(\n504\n)\n(Charge)/credit to income tax (see\nNote\n5\n)\n(\n376\n)\n(\n208\n)\n180\n\n(Charge)/credit to investment in equity companies\n29\n\n24\n\n16\n\n(Charge)/credit to other comprehensive income including noncontrolling interests, after tax\n1,047\n\n600\n\n(\n308\n)\nCharge/(credit) to equity of noncontrolling interests\n(\n59\n)\n(\n120\n)\n54\n\n(Charge)/credit to other comprehensive income attributable to ExxonMobil\n988\n\n480\n\n(\n254\n)\n\nThe Corporation\u2019s investment strategy for benefit plan assets reflects a long-term view, a careful assessment of the risks inherent in plan assets and liabilities, and broad diversification to reduce the risk of the portfolio. The benefit plan assets are primarily invested in passive global equity and local currency fixed income index funds to diversify risk while minimizing costs. The equity funds hold ExxonMobil stock only to the extent necessary to replicate the relevant equity index. The fixed income funds are largely invested in investment-grade corporate and government debt securities with interest rate sensitivity designed to approximate the interest rate sensitivity of plan liabilities.\nTarget asset allocations for benefit plans are reviewed periodically and set based on considerations such as risk, diversification, liquidity, and funding level. The target asset allocations for the major benefit plans range from\n5\n to\n40\n percent in equity securities and the remainder in fixed income securities. The equity allocation for the U.S. plan includes a target allocation of\n10\n percent to limited partnerships that focus on the venture capital, growth and buyout sectors of the private equity market. Certain non-U.S. plans include small allocations to private equity partnerships that primarily focus on early-stage venture capital.\nThe fair value measurement levels are accounting terms that refer to different methods of valuing assets. The terms do not represent the relative risk or credit quality of an investment.\n88\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nThe 2025 fair value of the benefit plan assets, including the level within the fair value hierarchy, is shown in the tables below:\n\nU.S. Pension\nNon-U.S. Pension\n(millions of dollars)\nFair Value Measurement at\nDecember 31, 2025, Using:\nFair Value Measurement at\nDecember 31, 2025, Using:\nLevel 1\nLevel 2\n\nLevel 3\nNet Asset Value\nTotal\nLevel 1\n\nLevel 2\n\nLevel 3\nNet Asset Value\nTotal\n\nAsset category:\n\nEquity securities\n\nU.S.\n\u2014\n\u2014\n\n\u2014\n2,018\n\n2,018\n\n\u2014\n\n\u2014\n\n\u2014\n1,659\n\n1,659\n\nNon-U.S.\n\u2014\n\u2014\n\n\u2014\n1,216\n\n1,216\n\n54\n\n(1)\n\u2014\n\n\u2014\n993\n\n1,047\n\nPrivate equity\n\u2014\n\u2014\n\n\u2014\n728\n\n728\n\n\u2014\n\n\u2014\n\n\u2014\n337\n\n337\n\nDebt securities\n\nCorporate\n\u2014\n985\n\n(2)\n\u2014\n4,238\n\n5,223\n\n\u2014\n\n54\n\n(2)\n\u2014\n3,980\n\n4,034\n\nGovernment\n\u2014\n696\n\n(2)\n\u2014\n990\n\n1,686\n\n99\n\n(3)\n169\n\n(2)\n\u2014\n9,033\n\n9,301\n\nAsset-backed\n\u2014\n\u2014\n\n\u2014\n1\n\n1\n\n\u2014\n\n18\n\n(2)\n\u2014\n149\n\n167\n\nOther\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n33\n\n33\n\nReal Estate\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n151\n\n151\n\nCash\n\u2014\n\u2014\n\n\u2014\n141\n\n141\n\n11\n\n9\n\n(4)\n\u2014\n1,383\n\n1,403\n\nOther\n\u2014\n23\n\n\u2014\n\u2014\n23\n\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nTotal at fair value\n\u2014\n\n1,704\n\n\u2014\n\n9,332\n\n11,036\n\n164\n\n250\n\n\u2014\n\n17,718\n\n18,132\n\nInsurance contracts at contract value\n\n2\n\n16\n\nTotal plan assets\n\n11,038\n\n18,148\n\n(1)\n For non-U.S. equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges.\n(2)\n For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market transactions.\n(3)\n For government debt securities that are traded on active exchanges, fair value is based on observable quoted prices.\n(4)\n For cash balances that are subject to withdrawal penalties or other adjustments, the fair value is treated as a level 2 input.\n\nOther Postretirement\n(millions of dollars)\nFair Value Measurement at December 31, 2025, Using:\n\nLevel 1\nLevel 2\nLevel 3\nNet Asset Value\nTotal\n\nAsset category:\n\nEquity securities\n\nU.S.\n95\n\n(5)\n\u2014\n\u2014\n\u2014\n95\n\nNon-U.S.\n41\n\n(5)\n\u2014\n\u2014\n\u2014\n41\n\nDebt securities\nCorporate\n\u2014\n58\n\n(6)\n\u2014\n\u2014\n58\n\nGovernment\n\u2014\n185\n\n(6)\n\u2014\n\u2014\n185\n\nAsset-backed\n\u2014\n3\n\n(6)\n\u2014\n\u2014\n3\n\nCash\n\u2014\n2\n\n\u2014\n\u2014\n2\n\nTotal at fair value\n136\n\n248\n\n\u2014\n\n\u2014\n\n384\n\n(5)\n For equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges.\n(6)\nFor corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market transactions.\n89\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nThe 2024 fair value of the benefit plan assets, including the level within the fair value hierarchy, is shown in the tables below:\n\nU.S. Pension\nNon-U.S. Pension\n\u00a0(millions of dollars)\nFair Value Measurement at\nDecember\u00a031,\u00a02024, Using:\nFair Value Measurement at\nDecember\u00a031,\u00a02024, Using:\nLevel 1\nLevel 2\n\nLevel 3\nNet Asset Value\nTotal\nLevel 1\n\nLevel 2\n\nLevel 3\nNet Asset Value\nTotal\n\nAsset category:\n\nEquity securities\n\nU.S.\n\u2014\n\u2014\n\n\u2014\n2,263\n\n2,263\n\n\u2014\n\n\u2014\n\n\u2014\n2,865\n\n2,865\n\nNon-U.S.\n\u2014\n\u2014\n\n\u2014\n1,225\n\n1,225\n\n43\n\n(1)\n\u2014\n\n\u2014\n1,560\n\n1,603\n\nPrivate equity\n\u2014\n\u2014\n\n\u2014\n439\n\n439\n\n\u2014\n\n\u2014\n\n\u2014\n291\n\n291\n\nDebt securities\n\nCorporate\n\u2014\n971\n\n(2)\n\u2014\n4,498\n\n5,469\n\n\u2014\n\n49\n\n(2)\n\u2014\n3,650\n\n3,699\n\nGovernment\n\u2014\n592\n\n(2)\n\u2014\n1,126\n\n1,718\n\n77\n\n(3)\n141\n\n(2)\n\u2014\n8,222\n\n8,440\n\nAsset-backed\n\u2014\n\u2014\n\n\u2014\n1\n\n1\n\n\u2014\n\n12\n\n(2)\n\u2014\n180\n\n192\n\nOther\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n13\n\n13\n\nReal Estate\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n107\n\n107\n\nCash\n\u2014\n\u2014\n\n\u2014\n113\n\n113\n\n78\n\n6\n\n(4)\n\u2014\n69\n\n153\n\nOther\n\u2014\n14\n\n\u2014\n\u2014\n14\n\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nTotal at fair value\n\u2014\n\n1,577\n\n\u2014\n\n9,665\n\n11,242\n\n198\n\n208\n\n\u2014\n\n16,957\n\n17,363\n\nInsurance contracts at contract value\n\n2\n\n15\n\nTotal plan assets\n\n11,244\n\n17,378\n\n(1)\n For non-U.S. equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges.\n(2)\n For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market transactions.\n(3)\n For government debt securities that are traded on active exchanges, fair value is based on observable quoted prices.\n(4)\n For cash balances that are subject to withdrawal penalties or other adjustments, the fair value is treated as a level 2 input.\n\nOther Postretirement\n(millions of dollars)\nFair Value Measurement at December 31, 2024, Using:\n\nLevel 1\nLevel 2\nLevel 3\nNet Asset Value\nTotal\n\nAsset category:\n\nEquity securities\n\nU.S.\n92\n\n(5)\n\u2014\n\u2014\n\u2014\n92\n\nNon-U.S.\n36\n\n(5)\n\u2014\n\u2014\n\u2014\n36\n\nDebt securities\nCorporate\n\u2014\n57\n\n(6)\n\u2014\n\u2014\n57\n\nGovernment\n\u2014\n174\n\n(6)\n\u2014\n\u2014\n174\n\nAsset-backed\n\u2014\n3\n\n(6)\n\u2014\n\u2014\n3\n\nCash\n\u2014\n2\n\n\u2014\n\u2014\n2\n\nTotal at fair value\n128\n\n236\n\n\u2014\n\n\u2014\n\n364\n\n(5)\n For equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges.\n(6)\nFor corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market transactions.\n90\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nA summary of pension plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets is shown in the table below:\n\nPension Benefits\n(millions of dollars)\nU.S.\nNon-U.S.\n2025\n2024\n2025\n2024\n\nFor\nfunded\n pension plans with an accumulated benefit obligation in excess of plan assets:\n\nAccumulated benefit obligation\n\u2014\n\n\u2014\n\n127\n\n1,025\n\nFair value of plan assets\n\u2014\n\n\u2014\n\n66\n\n574\n\nFor\nfunded\n pension plans with a projected benefit obligation in\nexcess of plan assets:\nProjected benefit obligation\n11,107\n\n11,501\n\n1,137\n\n1,982\n\nFair value of plan assets\n11,025\n\n11,232\n\n840\n\n1,261\n\nFor\nunfunded\n pension plans:\nProjected benefit obligation\n1,393\n\n1,488\n\n3,249\n\n3,499\n\nAccumulated benefit obligation\n1,184\n\n1,229\n\n3,057\n\n3,224\n\nAll other postretirement benefit plans are unfunded or underfunded.\n\nPension Benefits\nOther Postretirement Benefits\n(millions of dollars)\nU.S.\nNon-U.S.\nGross\nMedicare Subsidy Receipt\n\nContributions expected in 2026\n\u2014\n\n306\n\n\u2014\n\u2014\nBenefit payments expected in:\n2026\n1,024\n\n1,107\n\n350\n\n1\n\n2027\n1,017\n\n1,121\n\n347\n\n1\n\n2028\n1,049\n\n1,135\n\n346\n\n1\n\n2029\n1,053\n\n1,149\n\n346\n\n1\n\n2030\n1,060\n\n1,149\n\n348\n\n1\n\n2031 - 2035\n5,701\n\n5,759\n\n1,775\n\n3\n\n91\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 5. Other Comprehensive Income Information\nExxonMobil Share of Accumulated Other\nComprehensive Income\n(millions of dollars)\nCumulative Foreign Exchange Translation Adjustment\nPostretirement Benefits Reserves Adjustment\nTotal\n\nBalance as of December 31, 2022\n(\n14,591\n)\n1,321\n\n(\n13,270\n)\nCurrent period change excluding amounts reclassified from accumulated other comprehensive income\n\n(1)\n1,108\n\n(\n305\n)\n803\n\nAmounts reclassified from accumulated other comprehensive income\n427\n\n51\n\n478\n\nTotal change in accumulated other comprehensive income\n1,535\n\n(\n254\n)\n1,281\n\nBalance as of December 31, 2023\n(\n13,056\n)\n1,067\n\n(\n11,989\n)\nCurrent period change excluding amounts reclassified from accumulated other comprehensive income\n\n(1)\n(\n3,110\n)\n449\n\n(\n2,661\n)\nAmounts reclassified from accumulated other comprehensive income\n\u2014\n\n31\n\n31\n\nTotal change in accumulated other comprehensive income\n(\n3,110\n)\n480\n\n(\n2,630\n)\nBalance as of December 31, 2024\n(\n16,166\n)\n1,547\n\n(\n14,619\n)\nCurrent period change excluding amounts reclassified from accumulated other comprehensive income\n\n(1)\n2,360\n\n952\n\n3,312\n\nAmounts reclassified from accumulated other comprehensive income\n408\n\n36\n\n444\n\nTotal change in accumulated other comprehensive income\n2,768\n\n988\n\n3,756\n\nBalance as of December 31, 2025\n(\n13,398\n)\n2,535\n\n(\n10,863\n)\n(1)\n Cumulative Foreign Exchange Translation Adjustment includes net investment hedge gain/(loss) net of taxes of $(\n294\n)\u00a0million, $\n196\n\u00a0million, and $(\n135\n)\u00a0million in 2025, 2024, and 2023, respectively.\nAmounts Reclassified Out of Accumulated Other\nComprehensive Income - Before-tax Income/(Expense)\n(millions of dollars)\n2025\n2024\n2023\n\nForeign exchange translation gain/(loss) included in net income\n(Statement of Income line: Other income)\n(\n391\n)\n\u2014\n\n(\n609\n)\nAmortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs (Statement of Income line: Non-service pension and postretirement benefit expense)\n(\n46\n)\n(\n70\n)\n(\n81\n)\nIncome Tax (Expense)/Credit For\nComponents of Other Comprehensive Income\n(millions of dollars)\n2025\n2024\n2023\n\nForeign exchange translation adjustment\n145\n\n14\n\n341\n\nPostretirement benefits reserves adjustment (excluding amortization)\n(\n368\n)\n(\n181\n)\n200\n\nAmortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs\n(\n8\n)\n(\n27\n)\n(\n20\n)\nTotal\n(\n231\n)\n(\n194\n)\n521\n\n92\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 6. Financial Instruments and Derivatives\nThe estimated fair value of financial instruments and derivatives at December\u00a031, 2025, and December\u00a031, 2024, and the related hierarchy level for the fair value measurement was as follows:\n\nDecember 31, 2025\n\nFair Value\n\n(millions of dollars)\nLevel 1\nLevel 2\nLevel 3\nTotal Gross Assets & Liabilities\nEffect of Counterparty Netting\nEffect of Collateral Netting\nDifference in Carrying Value and Fair Value\nNet Carrying Value\nAssets\n\nDerivative assets\n(1)\n5,197\n\n2,259\n\n\u2014\n7,456\n\n(\n6,261\n)\n(\n341\n)\n\u2014\n854\n\nAdvances to/receivables from equity\ncompanies\n(2)(6)\n\u2014\n1,935\n\n3,938\n\n5,873\n\n\u2014\n\u2014\n256\n\n6,129\n\nOther long-term financial assets\n(3)\n1,536\n\n\u2014\n1,800\n\n3,336\n\n\u2014\n\u2014\n216\n\n3,552\n\nLiabilities\nDerivative liabilities\n(4)\n4,994\n\n2,043\n\n\u2014\n7,037\n\n(\n6,261\n)\n(\n141\n)\n\u2014\n635\n\nLong-term debt\n(5)\n24,678\n\n3,909\n\n\u2014\n28,587\n\n\u2014\n\u2014\n3,248\n\n31,835\n\nLong-term obligations to equity companies\n(6)\n\u2014\n\u2014\n542\n\n542\n\n\u2014\n\u2014\n\u2014\n542\n\nOther long-term financial liabilities\n(7)\n\u2014\n\u2014\n348\n\n348\n\n\u2014\n\u2014\n16\n\n364\n\nDecember 31, 2024\n\nFair Value\n\n(millions of dollars)\nLevel 1\nLevel 2\nLevel 3\nTotal Gross Assets & Liabilities\nEffect of Counterparty Netting\nEffect of Collateral Netting\nDifference in Carrying Value and Fair Value\nNet Carrying Value\nAssets\n\nDerivative assets\n(1)\n3,223\n\n1,206\n\n\u2014\n4,429\n\n(\n3,913\n)\n(\n3\n)\n\u2014\n513\n\nAdvances to/receivables from equity\ncompanies\n(2)(6)\n\u2014\n2,466\n\n4,167\n\n6,633\n\n\u2014\n\u2014\n451\n\n7,084\n\nOther long-term financial assets\n (3)\n1,468\n\n\u2014\n1,504\n\n2,972\n\n\u2014\n\u2014\n247\n\n3,219\n\nLiabilities\nDerivative liabilities\n(4)\n3,561\n\n1,416\n\n\u2014\n4,977\n\n(\n3,913\n)\n(\n341\n)\n\u2014\n723\n\nLong-term debt\n\n(5)\n28,884\n\n1,813\n\n\u2014\n30,697\n\n\u2014\n\u2014\n3,935\n\n34,632\n\nLong-term obligations to equity companies\n\n(6)\n\u2014\n\u2014\n1,393\n\n1,393\n\n\u2014\n\u2014\n(\n47\n)\n1,346\n\nOther long-term financial liabilities\n\n(7)\n\u2014\n\u2014\n583\n\n583\n\n\u2014\n\u2014\n57\n\n640\n\n(1)\n Included in the Balance Sheet lines: Notes and accounts receivable - net and Other assets, including intangibles - net.\n(2)\nIncluded in the Balance Sheet line: Investments, advances, and long-term receivables.\n(3)\n Included in the Balance Sheet lines: Investments, advances, and long-term receivables and Other assets, including intangibles - net.\n(4)\n Included in the Balance Sheet lines: Accounts payable and accrued liabilities and Other long-term obligations.\n(5)\n Excluding finance lease obligations.\n(6)\n Advances to/receivables from equity companies and long-term obligations to equity companies are mainly designated as hierarchy level 3 inputs. The fair value is calculated by discounting the remaining obligations by a rate consistent with the credit quality and industry of the equity company.\n(7)\n Included in the Balance Sheet line: Other long-term obligations. Includes contingent consideration related to a prior year acquisition where fair value is based on expected drilling activities and discount rates.\nAt December\u00a031, 2025, and December\u00a031, 2024, respectively, the Corporation had $\n0.5\n\u00a0billion and $\n0.5\n\u00a0billion of collateral under master netting arrangements not offset against the derivatives on the Consolidated Balance Sheet, primarily related to initial margin requirements.\n93\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nDerivative Instruments.\n The Corporation\u2019s size, strong capital structure, geographic diversity, and the complementary nature of its business segments reduce the Corporation\u2019s enterprise-wide risk from changes in commodity prices, currency rates, and interest rates. In addition, the Corporation uses commodity-based contracts, including derivatives, to manage commodity price risk and to generate returns from trading. Commodity contracts held for trading purposes are presented in the Consolidated Statement of Income on a net basis in the line \u201cSales and other operating revenue\u201d and in the Consolidated Statement of Cash Flows in \u201cCash Flows from Operating Activities\u201d and included before-tax realized and unrealized\n\ngains of $\n1.1\n\u00a0billion, losses of $\n0.7\n\u00a0billion, and gains of $\n1.0\n\u00a0billion in 2025, 2024, and 2023, respectively. The Corporation\u2019s commodity derivatives are not accounted for under hedge accounting. At times, the Corporation also enters into currency and interest rate derivatives, none of which are material to the Corporation\u2019s financial position as of\u00a0December\u00a031, 2025 and 2024, or results of operations for 2025, 2024, and 2023.\nThe Corporation operates a program to hedge certain of its fixed-rate debt instruments against changes in fair value due to changes in the designated benchmark interest rate. This program utilizes fair value hedge accounting. The derivative (hedging) instruments are fixed-for-floating interest rate swaps, with settlement dates that correspond to the interest payments associated with the fixed-rate debt (hedged item). Changes in the fair values of the hedging instruments are perfectly offset by changes in the fair values of the hedged items; the effects of these changes in fair values are recorded in \"Interest expense\" in the Consolidated Statement of Income. This program was not material to the Consolidated Financial Statements.\n\nCredit risk associated with the Corporation\u2019s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. The Corporation maintains a system of controls that includes the authorization, reporting, and monitoring of derivative activity.\nThe net notional long/(short) position of derivative instruments at December 31, 2025, and December 31, 2024, was as follows:\n(millions)\nDecember 31,\nDecember 31,\n2025\n2024\nCrude oil (barrels)\n6\n\n13\n\nPetroleum products (barrels)\n(\n27\n)\n(\n32\n)\nNatural gas (MMBTUs)\n(\n449\n)\n(\n675\n)\nNote 7. Litigation and Other Contingencies\nLitigation.\n A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies.\nThe Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. For purposes of our contingency disclosures, \u201csignificant\u201d includes material matters, as well as other matters, which management believes should be disclosed.\n\nState and local governments and other entities in various jurisdictions across the United States and its territories have filed a number of legal proceedings against several oil and gas companies, including ExxonMobil, requesting unprecedented legal and equitable relief for various alleged injuries purportedly connected to climate change. These lawsuits assert a variety of novel, untested claims under statutory and common law. Additional such lawsuits may be filed. We believe the legal and factual theories set forth in these proceedings are meritless and represent an inappropriate attempt to use the court system to usurp the proper role of policymakers in addressing the societal challenges of climate change.\nLocal governments in Louisiana have filed unprecedented legal proceedings against a number of oil and gas companies, including ExxonMobil, requesting compensation for the restoration of coastal marsh erosion in the state. We believe the factual and legal theories set forth in these proceedings are meritless.\nWhile the outcome of any litigation can be unpredictable, we believe the likelihood is remote that the ultimate outcomes of these lawsuits will have a material adverse effect on the Corporation\u2019s operations, financial condition, or financial statements taken as a whole. We will continue to defend vigorously against these claims.\n94\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nOther Contingencies.\n The Corporation and certain of its consolidated subsidiaries were contingently liable at December\u00a031, 2025, for guarantees relating to notes, loans and performance under contracts. Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management\u2019s estimate of the maximum potential exposure. Where it is not possible to make a reasonable estimation of the maximum potential amount of future payments, future performance is expected to be either immaterial or have only a remote chance of occurrence.\nDecember 31, 2025\n(millions of dollars)\nEquity Company Obligations\n (1)\nOther Third-Party Obligations\nTotal\n\nGuarantees\n\nNon-debt-related\n667\n\n6,185\n\n6,852\n\nTotal\n667\n\n6,185\n\n6,852\n\n(1)\n ExxonMobil share.\nAdditionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation\u2019s operations or financial condition.\nNote 8. Equity Company Information\nThe summarized financial information below includes amounts related to certain less-than-majority-owned companies and majority-owned subsidiaries where minority shareholders possess the right to participate in significant management decisions (see\nNote\n1\n). These companies are primarily engaged in oil and gas exploration and production, natural gas marketing, transportation of crude oil, and petrochemical manufacturing in North America; natural gas production and distribution in Europe; LNG operations in Africa; and exploration, production, LNG operations, and the manufacture and sale of petroleum and petrochemical products in Asia and the Middle East. Also included are several refining and marketing ventures.\nThe share of total equity company revenues from sales to ExxonMobil consolidated companies was\n10\n percent,\n9\n percent, and\n9\n\u00a0percent in 2025, 2024, and 2023, respectively.\nThe Corporation\u2019s ownership in these ventures is in the form of shares in corporate joint ventures as well as interests in partnerships. Differences between the Company\u2019s carrying value of an equity investment and its underlying equity in the net assets of the affiliate are assigned, to the extent practicable, to specific assets and liabilities based on the Company\u2019s analysis of the factors giving rise to the difference. The amortization of this difference, as appropriate, is included in \u201cIncome from equity affiliates\u201d on the Consolidated Statement of Income.\nEquity Company\nFinancial Summary\n(millions of dollars)\n2025\n2024\n2023\nTotal\nExxonMobil\nShare\nTotal\nExxonMobil Share\nTotal\nExxonMobil\nShare\n\nTotal revenues\n111,193\n\n34,309\n\n117,036\n\n35,532\n\n132,783\n\n40,682\n\nIncome before income taxes\n26,493\n\n7,106\n\n33,357\n\n9,304\n\n35,999\n\n10,078\n\nIncome taxes\n8,174\n\n2,054\n\n11,434\n\n3,209\n\n11,404\n\n3,085\n\nIncome from equity affiliates\n18,319\n\n5,052\n\n21,923\n\n6,095\n\n24,595\n\n6,993\n\nCurrent assets\n46,577\n\n16,738\n\n50,779\n\n18,286\n\n53,081\n\n18,713\n\nLong-term assets\n138,809\n\n37,398\n\n145,671\n\n39,092\n\n150,198\n\n40,986\n\nTotal assets\n185,386\n\n54,136\n\n196,450\n\n57,378\n\n203,279\n\n59,699\n\nCurrent liabilities\n28,135\n\n8,947\n\n26,786\n\n8,699\n\n30,721\n\n9,652\n\nLong-term liabilities\n47,301\n\n14,361\n\n55,218\n\n16,484\n\n57,237\n\n17,059\n\nNet assets\n109,950\n\n30,828\n\n114,446\n\n32,195\n\n115,321\n\n32,988\n\n95\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nA list of significant equity companies as of December\u00a031, 2025, together with the Corporation\u2019s percentage ownership interest, is detailed below:\n\nPercentage Ownership Interest\nUpstream\n\nBarzan Gas Company Limited\n7\nBEB Erdgas und Erdoel GmbH & Co. KG\n50\nCaspian Pipeline Consortium\n8\nCoral FLNG S.A.\n25\nCross Timbers Energy LLC\n50\nGasTerra B.V.\n25\nGolden Pass LNG Terminal LLC\n30\nGolden Pass Pipeline LLC\n30\nMarine Well Containment Company LLC\n13\nMozambique Rovuma Venture S.p.A.\n36\nNederlandse Aardolie Maatschappij B.V.\n50\nPapua New Guinea Liquefied Natural Gas Global Company LDC\n33\nPermian Highway Pipeline LLC\n17\nQatarEnergy LNG N (2)\n24\nQatarEnergy LNG NFE (3)\n25\nQatarEnergy LNG S (2)\n31\nQatarEnergy LNG S (3)\n30\nSouth Hook LNG Terminal Company Limited\n24\nTengizchevroil LLP\n25\nEnergy Products, Chemical Products, and/or Specialty Products\nAl-Jubail Petrochemical Company\n50\nAlberta Products Pipe Line Ltd.\n45\nFujian Refining & Petrochemical Co. Ltd.\n25\nGulf Coast Growth Ventures LLC\n50\nInfineum USA L.P.\n50\nPermian Express Partners LLC\n12\nSaudi Aramco Mobil Refinery Company Ltd.\n50\nSaudi Yanbu Petrochemical Co.\n50\n96\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 9. Property, Plant, and Equipment and Asset Retirement Obligations\nProperty, Plant, and Equipment\n(millions of dollars)\nDecember 31, 2025\nDecember 31, 2024\nCost\nNet\nCost\nNet\n\nUpstream\n436,018\n\n228,235\n\n423,038\n\n226,021\n\nEnergy Products\n60,261\n\n29,547\n\n58,259\n\n28,349\n\nChemical Products\n39,594\n\n20,053\n\n39,224\n\n19,973\n\nSpecialty Products\n8,820\n\n4,333\n\n9,559\n\n4,229\n\nOther\n25,366\n\n17,205\n\n23,823\n\n15,746\n\nTotal\n570,059\n\n299,373\n\n553,903\n\n294,318\n\nIn 2025, the Corporation identified situations where events or changes in circumstances indicated that the carrying value of certain long-lived assets may not be recoverable and conducted impairment assessments. The Corporation recognized before-tax impairment charges of $\n1.6\n billion in Upstream, $\n0.1\n billion in Chemical Products, and $\n0.3\n billion in Other.\nIn 2024, before-tax impairment charges recognized are immaterial.\nIn 2023, the Corporation recognized before-tax impairment charges of $\n3.3\n billion, in large part due to impairing the idled Upstream Santa Ynez Unit assets and associated facilities in California, reflecting the continuing challenges in the state regulatory environment that impeded progress in restoring operations. Other before-tax impairment charges recognized during 2023 included $\n0.3\n billion in Upstream, $\n0.3\n billion in Chemical Products, and $\n0.1\n billion in Specialty Products.\nImpairment charges are primarily recognized in the lines \u201c\nDepreciation and depletion\u201d and \u201cExploration expenses, including dry holes\n\u201d on the Consolidated Statement of Income. Accumulated depreciation and depletion totaled $\n270,686\n million at the end of 2025 and $\n259,585\n million at the end of 2024.\n97\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nAsset Retirement Obligations\nThe Corporation incurs retirement obligations for certain assets. The fair values of these obligations are recorded as liabilities on a discounted basis, which is typically at the time the assets are installed. In the estimation of fair value, the Corporation uses assumptions and judgments regarding such factors as the existence of a legal obligation for an asset retirement obligation, technical assessments of the assets, estimated amounts and timing of settlements, discount rates, and inflation rates. Asset retirement obligations incurred in the current period were level 3 fair value measurements. The costs associated with these liabilities are capitalized as part of the related assets and depreciated as the reserves are produced. Over time, the liabilities are accreted for the change in their present value.\nAsset retirement obligations for facilities in the Product Solutions business generally become firm at the time a decision is made to permanently shut down and dismantle the facilities. These obligations may include the costs of asset disposal and additional soil remediation. However, these sites generally have indeterminate lives based on plans for continued operations and as such, the fair value of the conditional legal obligations cannot be measured, since it is impossible to estimate the future settlement dates of such obligations.\nThe following table summarizes the activity in the liability for asset retirement obligations:\n(millions of dollars)\n2025\n2024\n2023\n\nBalance at January 1\n12,032\n\n12,989\n\n10,491\n\nAccretion expense and other provisions\n623\n\n709\n\n734\n\nReduction due to property sales\n(\n927\n)\n(\n1,445\n)\n(\n288\n)\nPayments made\n(\n1,289\n)\n(\n1,191\n)\n(\n693\n)\nLiabilities incurred\n539\n\n728\n\n985\n\nForeign currency translation\n386\n\n(\n447\n)\n124\n\nRevisions\n1,154\n\n689\n\n1,636\n\nBalance at December 31\n12,518\n\n12,032\n\n12,989\n\nThe long-term Asset Retirement Obligations were $\n11.3\n billion and $\n10.9\n billion at December\u00a031, 2025 and 2024, respectively, and are included in \u201cOther long-term obligations\u201d on the Consolidated Balance Sheet.\n\nEstimated cash payments in 2026 and 2027 are $\n1.3\n billion and $\n1.5\n billion, respectively.\n\n98\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 10. Additional Working Capital Information\n(millions of dollars)\nDec 31, 2025\nDec 31, 2024\n\nNotes and accounts receivable\n\nTrade, less reserves of $\n270\n million and $\n162\n million\n35,744\n\n35,282\n\nOther, less reserves of $\n170\n million and $\n314\n million\n8,818\n\n8,399\n\nTotal\n44,562\n\n43,681\n\nNotes and loans payable\nBank loans\n3\n\n63\n\nCommercial paper\n3,059\n\n\u2014\n\nLong-term debt due within one year\n6,234\n\n4,892\n\nTotal\n9,296\n\n4,955\n\nAccounts payable and accrued liabilities\nTrade payables\n36,049\n\n36,145\n\nPayables to equity companies\n8,694\n\n10,378\n\nAccrued taxes other than income taxes\n3,549\n\n3,577\n\nOther\n12,619\n\n11,197\n\nTotal\n60,911\n\n61,297\n\nTrade notes and accounts receivables include both receivables within the scope of ASC 606 and outside the scope of ASC 606. Receivables outside the scope of ASC 606 primarily relate to physically settled commodity contracts accounted for as derivatives. Credit quality and type of customer are generally similar between receivables within the scope of ASC 606 and those outside it.\nThe Corporation has short-term committed lines of credit of $\n7.3\n billion which were unused as of December\u00a031, 2025. These lines of credit are available for general corporate purposes.\nThe weighted-average interest rate on short-term borrowings outstanding was\n3.8\n percent at December 31, 2025.\nNote 11. Investments, Advances, and Long-Term Receivables\n(millions of dollars)\nDec 31, 2025\nDec 31, 2024\nEquity method company investments and advances\n\nInvestments\n32,653\n\n34,010\n\nAdvances, net of allowances of $\n33\n\u00a0million and $\n40\n\u00a0million\n6,130\n\n7,084\n\nTotal equity method company investments and advances\n38,783\n\n41,094\n\nEquity securities carried at fair value and other investments at adjusted cost basis\n271\n\n343\n\nLong-term receivables and miscellaneous, net of reserves of $\n2,500\n million and $\n2,433\n million\n6,263\n\n5,763\n\nTotal\n45,317\n\n47,200\n\n99\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 12. Long-Term Debt\nAt December\u00a031, 2025, long-term debt consisted of $\n26.4\n billion due in U.S. dollars and $\n7.8\n billion representing the U.S. dollar equivalent at year-end exchange rates of amounts payable in foreign currencies. These amounts exclude that portion of long-term debt, totaling $\n6.2\n billion, which matures within one year and is included in current liabilities.\nThe amounts of long-term debt, excluding finance lease obligations, maturing in each of the four years after December 31, 2026, are: 2027 \u2013 $\n2.5\n billion; 2028 \u2013 $\n1.7\n billion; 2029 \u2013\u00a0$\n1.7\n billion; and 2030 \u2013 $\n5.3\n billion. At December\u00a031, 2025, the Corporation's unused long-term lines of credit were $\n1.0\n billion.\nThe Corporation may use non-derivative financial instruments, such as its foreign currency-denominated debt, as hedges of its net investments in certain foreign subsidiaries. Under this method, the change in the carrying value of the financial instruments due to foreign exchange fluctuations is reported in accumulated other comprehensive income.\n As of December\u00a031, 2025, the Corporation has designated its $\n3.5\n\u00a0billion of Euro-denominated debt and related accrued interest as a net investment hedge of its European business. The net investment hedge is deemed to be perfectly effective.\n100\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nSummarized long-term debt at year-end 2025 and 2024 are shown in the table below:\n(millions of dollars, except where stated otherwise)\nAverage\nRate\n\n(1)\nDec 31, 2025\nDec 31, 2024\n\nExxon Mobil Corporation\n(2)(3)\n\n3.043\n% notes due 2026\n\u2014\n\n2,500\n\n2.275\n% notes due 2026\n\u2014\n\n1,000\n\n3.294\n% notes due 2027\n1,000\n\n1,000\n\n2.440\n% notes due 2029\n1,250\n\n1,250\n\n3.482\n% notes due 2030\n2,032\n\n1,992\n\n2.610\n% notes due 2030\n2,016\n\n2,000\n\n2.995\n% notes due 2039\n750\n\n750\n\n4.227\n% notes due 2040\n2,043\n\n2,076\n\n3.567\n% notes due 2045\n986\n\n1,000\n\n4.114\n% notes due 2046\n2,497\n\n2,500\n\n3.095\n% notes due 2049\n1,500\n\n1,500\n\n4.327\n% notes due 2050\n2,750\n\n2,750\n\n3.452\n% notes due 2051\n2,750\n\n2,750\n\nExxon Mobil Corporation - Euro-denominated\n0.524\n% notes due 2028\n1,175\n\n1,039\n\n0.835\n% notes due 2032\n1,175\n\n1,039\n\n1.408\n% notes due 2039\n1,175\n\n1,039\n\nXTO Energy Inc.\n(4)\n6.100\n% senior notes due 2036\n186\n\n187\n\n6.750\n% senior notes due 2037\n282\n\n284\n\n6.375\n% senior notes due 2038\n219\n\n221\n\nPioneer Natural Resources Company\n\n(5)\n1.125\n% senior notes due 2026\n\u2014\n\n718\n\n5.100\n% senior notes due 2026\n\u2014\n\n1,097\n\n7.200\n% senior notes due 2028\n247\n\n250\n\n1.900\n% senior notes due 2030\n958\n\n931\n\n2.150\n% senior notes due 2031\n869\n\n846\n\nParsley Energy LLC\n(6)\n4.125\n% senior notes due 2028\n133\n\n131\n\nIndustrial revenue bonds due 2026-2051\n2.540\n%\n2,005\n\n2,032\n\nFinance leases & other obligations\n4.668\n%\n6,313\n\n3,951\n\nDebt issuance costs\n(\n70\n)\n(\n78\n)\nTotal long-term debt\n34,241\n\n36,755\n\n(1)\n Average effective or imputed interest rates at December\u00a031, 2025.\n(2)\n Includes impacts of hedge accounting of interest rate swaps.\n(3)\n Includes premiums of $\n72\n million in 2025 and $\n76\n million in 2024.\n(4)\n\nIncludes premiums of $\n60\n million in 2025and $\n66\n million in 2024.\n(5)\nIncludes net discounts of $\n267\n million in 2025 and $\n348\n million in 2024.\n(6)\nIncludes discounts of $\n5\n million in 2025 and $\n7\n million in 2024.\n101\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 13. Leases\nThe Corporation and its consolidated affiliates generally purchase the property, plant, and equipment used in operations, but there are situations where assets are leased, primarily for drilling equipment, tankers, office buildings, railcars, and other moveable equipment.\nRight of use assets and lease liabilities are established on the balance sheet for leases with an expected term greater than one year by discounting the amounts fixed in the lease agreement for the duration of the lease which is reasonably certain, considering the probability of exercising any early termination and extension options. The portion of the fixed payment related to service costs for drilling equipment, tankers, and finance leases is excluded from the calculation of right of use assets and lease liabilities.\n Generally, assets are leased only for a portion of their useful lives and are accounted for as operating leases. In limited situations, assets are leased for nearly all of their useful lives and are accounted for as finance leases.\nVariable payments under these lease agreements are not significant. Residual value guarantees, restrictions, covenants related to leases, and transactions with related parties are also not significant.\nIn general, leases are capitalized using the incremental borrowing rate of the leasing affiliate.\n The Corporation\u2019s activities as a lessor are not significant.\nLease Cost\n(millions of dollars)\nOperating Leases\nFinance Leases\n2025\n2024\n2023\n2025\n2024\n2023\n\nOperating lease cost\n2,450\n\n2,296\n\n1,976\n\nShort-term and other (net of sublease rental income)\n1,490\n\n2,047\n\n1,563\n\nAmortization of right of use assets\n161\n\n140\n\n107\n\nInterest on lease liabilities\n167\n\n149\n\n140\n\nTotal\n\n(1)\n3,940\n\n4,343\n\n3,539\n\n328\n\n289\n\n247\n\n(1)\n Includes $\n984\n million, $\n1,195\n million, and $\n999\n million for drilling rigs and related equipment operating leases in 2025, 2024, and 2023, respectively.\nBalance Sheet\n(millions of dollars)\nOperating Leases\nFinance Leases\nDecember 31, 2025\nDecember 31, 2024\nDecember 31, 2025\nDecember 31, 2024\nRight of use assets\n\nIncluded in Other assets, including intangibles - net\n7,224\n\n7,123\n\nIncluded in Property, plant, and equipment - net\n3,284\n\n2,888\n\nTotal right of use assets\n7,224\n\n7,123\n\n3,284\n\n2,888\n\nLease liability due within one year\nIncluded in Accounts payable and accrued liabilities\n1,942\n\n1,852\n\n7\n\n6\n\nIncluded in Notes and loans payable\n137\n\n117\n\nLong-term lease liability\nIncluded in Other long-term obligations\n4,892\n\n4,626\n\nIncluded in Long-term debt\n2,406\n\n2,123\n\nIncluded in Long-term obligations to equity companies\n109\n\n115\n\nTotal lease liability\n\n(2)\n6,834\n\n6,478\n\n2,659\n\n2,361\n\nWeighted-average remaining lease term (years)\n8\n7\n17\n18\nWeighted-average discount rate (percent)\n4.7\n\n%\n4.9\n\n%\n8.1\n\n%\n6.4\n\n%\n(2)\n Includes $\n1,691\n million and $\n2,198\n million for drilling rigs and related equipment operating leases in 2025 and 2024, respectively.\n\n102\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nMaturity Analysis of Lease Liabilities\n(millions of dollars)\nOperating Leases\nFinance Leases\nDecember 31, 2025\n2026\n2,189\n\n362\n\n2027\n1,609\n\n351\n\n2028\n1,042\n\n348\n\n2029\n502\n\n341\n\n2030\n402\n\n335\n\n2031 and beyond\n2,237\n\n3,128\n\nTotal lease payments\n7,981\n\n4,865\n\nDiscount to present value\n(\n1,147\n)\n(\n2,206\n)\nTotal lease liability\n6,834\n\n2,659\n\nIn addition to the lease liabilities in the table immediately above, at December\u00a031, 2025, undiscounted commitments for leases not yet commenced totaled $\n3.0\n billion for operating leases and $\n0.8\n billion for finance leases. Estimated cash payments for operating and finance leases not yet commenced are $\n0.2\n billion and $\n0.3\n billion for 2026 and 2027 respectively. Operating leases not yet commenced primarily relate to LNG transportation vessels.\nOther Information\n(millions of dollars)\nOperating Leases\nFinance Leases\n2025\n2024\n2023\n2025\n2024\n2023\nCash paid for amounts included in the measurement of lease liabilities\nCash flows from operating activities\n1,522\n\n1,301\n\n1,135\n\n20\n\n20\n\n20\n\nCash flows from investing activities\n868\n\n837\n\n758\n\nCash flows from financing activities\n140\n\n121\n\n86\n\nNoncash right of use assets recorded for lease liabilities\nIn exchange for lease liabilities during the period\n2,310\n\n2,074\n\n2,161\n\n403\n\n109\n\n529\n\nNote 14. Miscellaneous Financial Information\nResearch and development expenses totaled $\n1.2\n billion in 2025, $\n1.0\n billion in 2024, and $\n0.9\n billion in 2023.\nNet income included before-tax aggregate foreign exchange transaction gains/(losses) of $\n0.2\n billion, $(\n0.5\n) billion, and $(\n0.1\n) billion in 2025, 2024, and 2023, respectively.\nLIFO Inventory.\n In 2025, 2024, and 2023, net income included gains of $\n0.3\n billion, $\n0.2\n billion, and $\n0.4\n billion, respectively, attributable to the combined effects of LIFO inventory accumulations and drawdowns. The aggregate replacement cost of inventories was estimated to exceed their LIFO carrying values by approximately $\n7\n billion and $\n10\n billion at December\u00a031, 2025 and 2024, respectively.\nCrude oil, products, and merchandise as of year-end 2025 and 2024 consist of the following:\n(millions of dollars)\nDec 31, 2025\nDec 31, 2024\nCrude oil\n7,976\n\n6,483\n\nPetroleum products\n6,889\n\n6,017\n\nChemical products\n(1)\n4,261\n\n4,142\n\nGas/other\n3,853\n\n2,802\n\nTotal\n22,979\n\n19,444\n\n(1)\nChemical products includes basic chemicals (olefins and aromatics), polymers (such as polyolefins, adhesions, specialty elastomers, & butyl), intermediates (e.g., hydrocarbon fluids, plasticizers), and synthetics.\n103\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nGovernment Assistance.\nASC 832 \"Government Assistance\" requires disclosure of certain types of government assistance not otherwise covered by authoritative accounting guidance. During 2023 to 2025, certain governments provided payments which, individually and in aggregate, were immaterial to the Corporation's consolidated financial statements. The terms and conditions of these programs, including their duration, vary by country. In connection with cap and trade programs in certain countries outside the United States, companies receive allowances from governments covering a specified level of emissions from facilities they operate. The Corporation records these allowances at a nominal amount, generally in \"Inventories - Crude oil, products and merchandise\" on the Consolidated Balance Sheet.\nNote 15. Income and Other Taxes\n(millions of dollars)\n2025\n2024\n2023\nU.S.\nNon-U.S.\nTotal\nU.S.\nNon-U.S.\nTotal\nU.S.\nNon-U.S.\nTotal\n\nIncome tax expense (benefit)\nFederal and non-U.S.\n\nCurrent\n143\n\n10,271\n\n10,414\n\n2,061\n\n11,940\n\n14,001\n\n1,987\n\n12,111\n\n14,098\n\nDeferred - net\n372\n\n596\n\n968\n\n(\n318\n)\n(\n512\n)\n(\n830\n)\n463\n\n481\n\n944\n\nU.S. tax on non-U.S. operations\n175\n\n\u2014\n175\n\n241\n\n\u2014\n241\n\n315\n\n\u2014\n315\n\nTotal federal and non-U.S.\n690\n\n10,867\n\n11,557\n\n1,984\n\n11,428\n\n13,412\n\n2,765\n\n12,592\n\n15,357\n\nState\n(\n53\n)\n\u2014\n(\n53\n)\n398\n\n\u2014\n398\n\n72\n\n\u2014\n72\n\nTotal income tax expense (benefit)\n637\n\n10,867\n\n11,504\n\n2,382\n\n11,428\n\n13,810\n\n2,837\n\n12,592\n\n15,429\n\nAll other taxes and duties\nOther taxes and duties\n3,521\n\n21,646\n\n25,167\n\n3,849\n\n22,439\n\n26,288\n\n3,871\n\n25,140\n\n29,011\n\nIncluded in production and manufacturing expenses\n2,707\n\n628\n\n3,335\n\n2,510\n\n652\n\n3,162\n\n1,961\n\n726\n\n2,687\n\nIncluded in SG&A expenses\n155\n\n273\n\n428\n\n179\n\n265\n\n444\n\n183\n\n310\n\n493\n\nTotal other taxes and duties\n6,383\n\n22,547\n\n28,930\n\n6,538\n\n23,356\n\n29,894\n\n6,015\n\n26,176\n\n32,191\n\nTotal\n7,020\n\n33,414\n\n40,434\n\n8,920\n\n34,784\n\n43,704\n\n8,852\n\n38,768\n\n47,620\n\nThe above provisions for deferred income taxes include net expenses of $\n64\n million in 2025, net benefits of $\n28\n million in 2024, and net expenses of $\n24\n million in 2023, related to changes in tax laws and rates\n.\n104\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nThe Company adopted the Financial Accounting Standards Board\u2019s ASU No. 2023\u201109, Improvements to Income Tax Disclosures, on a prospective basis for its 2025 annual reporting, in accordance with the transition provisions.\nThe reconciliation between income tax expense (credit) and a theoretical U.S. tax computed by applying a rate of\n21\n percent for 2025 is as follows:\n(millions of dollars)\n2025\nIncome (loss) before income taxes\n\nUnited States\n11,000\n\nNon-U.S.\n30,268\n\nTotal\n41,268\n\nU.S. federal statutory theoretical tax\n8,666\n\n21\n\n%\nNon-U.S. taxes in excess of/(less than) theoretical U.S. tax\n4,212\n\n10\n\n%\n\u00a0\u00a0\u00a0\u00a0United Arab Emirates rate differential\n3,405\n\n8\n\n%\n\u00a0\u00a0\u00a0\u00a0Qatar\n(\n552\n)\n(\n1\n)\n%\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Effect of equity method of accounting\n(\n620\n)\n(\n2\n)\n%\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Other\n68\n\n0\n\n%\n\u00a0\u00a0\u00a0\u00a0All other countries\n1,359\n\n3\n\n%\nState taxes, net of federal tax benefit\n(\n76\n)\n0\n\n%\nOther\n(\n1,298\n)\n(\n3\n)\n%\nTotal income tax expense (credit)\n11,504\n\n28\n\n%\nIncome tax expense (credit)\n11,504\n\nExxonMobil share of equity company income taxes\n2,046\n\nTotal income tax expense (credit)\n13,550\n\nNet income (loss) including noncontrolling interests\n29,764\n\nTotal income (loss) before taxes\n43,314\n\nEffective income tax rate\n31\n%\n105\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nThe reconciliation between income tax expense (credit) and a theoretical U.S. tax computed by applying a rate of\n21\n percent for 2024, and 2023 is as follows:\n(millions of dollars)\n2024\n2023\n\nIncome (loss) before income taxes\n\nUnited States\n12,258\n\n14,786\n\nNon-U.S.\n36,615\n\n37,997\n\nTotal\n48,873\n\n52,783\n\nTheoretical tax\n10,263\n\n11,084\n\nEffect of equity method of accounting\n(\n1,301\n)\n(\n1,341\n)\nNon-U.S. taxes in excess of/(less than) theoretical U.S. tax\n4,986\n\n5,888\n\nState taxes, net of federal tax benefit\n314\n\n57\n\nOther\n(\n452\n)\n(\n259\n)\nTotal income tax expense (credit)\n13,810\n\n15,429\n\nIncome tax expense (credit)\n13,810\n\n15,429\n\nExxonMobil share of equity company income taxes\n3,197\n\n3,058\n\nTotal income tax expense (credit)\n17,007\n\n18,487\n\nNet income (loss) including noncontrolling interests\n35,063\n\n37,354\n\nTotal income (loss) before taxes\n52,070\n\n55,841\n\nEffective income tax rate\n33\n%\n33\n%\nIncome taxes paid for 2025 U.S. and non-U.S. are shown in the table below:\n(millions of dollars)\n2025\n\nIncome taxes paid\nU.S. Federal\n944\n\nU.S. State\n170\n\nU.S.\n1,114\n\nCanada\n1,207\n\nGuyana\n1,100\n\nUnited Arab Emirates\n5,000\n\nAll Other Countries\n3,142\n\nNon-U.S.\n10,449\n\nTotal income taxes paid\n11,563\n\nCash income taxes paid for 2024 and 2023 were $\n13,293\n million and $\n15,473\n million respectively.\n106\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nDeferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes.\nDeferred tax liabilities/(assets) are comprised of the following at December 31:\nTax effects of temporary differences for:\n(millions of dollars)\n2025\n2024\n\nProperty, plant, and equipment\n41,427\n\n40,881\n\nOther liabilities\n8,358\n\n8,113\n\nTotal deferred tax liabilities\n49,785\n\n48,994\n\nPension and other postretirement benefits\n(\n972\n)\n(\n1,365\n)\nAsset retirement obligations\n(\n3,249\n)\n(\n3,156\n)\nTax loss carryforwards\n(\n4,740\n)\n(\n4,575\n)\nOther assets\n(\n7,016\n)\n(\n7,308\n)\nTotal deferred tax assets\n(\n15,977\n)\n(\n16,404\n)\nAsset valuation allowances\n2,649\n\n2,516\n\nNet deferred tax liabilities\n36,457\n\n35,106\n\nIn 2025, asset valuation allowances of $\n2,649\n million increased by $\n133\n million and included net provisions of $\n39\n million and foreign currency and other effects of $\n172\n million.\nBalance sheet classification\n(millions of dollars)\n2025\n2024\n\nOther assets, including intangibles, net\n(\n3,759\n)\n(\n3,936\n)\nDeferred income tax liabilities\n40,216\n\n39,042\n\nNet deferred tax liabilities\n36,457\n\n35,106\n\nThe Corporation\u2019s undistributed earnings from subsidiary companies outside the United States include amounts that have been retained to fund prior and future capital project expenditures. Deferred income taxes have not been recorded for potential future tax obligations, such as foreign withholding tax and state tax, as these undistributed earnings are expected to be indefinitely reinvested for the foreseeable future. As of December\u00a031, 2025, it is not practicable to estimate the unrecognized deferred tax liability. However, unrecognized deferred taxes on remittance of these funds are not expected to be material.\n107\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nUnrecognized Tax Benefits.\n The Corporation is subject to income taxation in many jurisdictions around the world.\nThe benefits of uncertain tax positions that the Corporation has taken or expects to take in its income tax returns are recognized in the financial statements if management concludes that it is more likely than not that the position will be sustained with the tax authorities. For a position that is likely to be sustained, the benefit recognized in the financial statements is measured at the largest amount that is greater than 50 percent likely of being realized. Unrecognized tax benefits reflect the difference between positions taken or expected to be taken on income tax returns and the amounts recognized in the financial statements.\n\nThe following table summarizes the movement in unrecognized tax benefits:\nGross unrecognized tax benefits\n(millions of dollars)\n2025\n2024\n2023\n\nBalance at January 1\n4,035\n\n3,935\n\n3,398\n\nAdditions based on current year's tax positions\n206\n\n376\n\n350\n\nAdditions for prior years' tax positions\n454\n\n103\n\n400\n\nReductions for prior years' tax positions\n(\n377\n)\n(\n293\n)\n(\n38\n)\nReductions due to lapse of the statute of limitations\n(\n4\n)\n(\n17\n)\n(\n25\n)\nSettlements with tax authorities\n(\n150\n)\n(\n13\n)\n(\n153\n)\nForeign exchange effects/other\n(\n33\n)\n(\n56\n)\n3\n\nBalance at December 31\n4,131\n\n4,035\n\n3,935\n\nThe gross unrecognized tax benefit balances shown above predominantly relate to tax positions that would reduce the Corporation\u2019s effective tax rate if the positions are favorably resolved. Unfavorable resolution of these tax positions generally would not increase the effective tax rate. The 2025, 2024, and 2023 changes in unrecognized tax benefits did not have a material effect on the Corporation\u2019s net income.\nResolution of these tax positions through negotiations with the relevant tax authorities or through litigation may take many years to complete. It is difficult to predict the timing of resolution for these tax positions since the timing is not entirely within the control of the Corporation. The Corporation has various U.S. federal income tax positions at issue with the Internal Revenue Service for tax years beginning with 2010. Unfavorable resolution of these issues would not have a materially adverse effect on the Corporation\u2019s net income or liquidity.\nThe following table summarizes the tax years that remain subject to examination by major tax jurisdiction:\nCountry of Operation\nOpen Tax Years\nCanada\n2001\n\u2014\n2025\nKazakhstan\n2020\n\u2014\n2025\nPapua New Guinea\n2008\n\u2014\n2025\nQatar\n2020\n\u2014\n2025\nUnited Arab Emirates\n2024\n\u2014\n2025\nUnited States\n2010\n\u2014\n2025\nThe Corporation classifies interest on income tax-related balances as\ninterest expense\n or interest income and classifies tax-related penalties as operating expense.\nFor 2025, 2024, and 2023 the Corporation's net interest expense on income tax reserves was $\n99\n million, $\n142\n million, and $\n60\n million, respectively. The related interest payable balances were $\n365\n million and $\n275\n\u00a0million at December\u00a031, 2025 and 2024, respectively.\n108\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 16. Accounting for Suspended Exploratory Well Costs\nThe Corporation continues capitalization of exploratory well costs when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the Corporation\u00a0is making sufficient progress assessing the reserves and the economic and operating viability of the project.\n The term \u201cproject\u201d as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.\nThe following two tables provide details of the changes in the balance of suspended exploratory well costs, including an aging summary of those costs.\nChange in capitalized suspended exploratory well costs\n(millions of dollars)\n2025\n2024\n2023\n\nBalance beginning at January 1\n3,600\n\n3,559\n\n3,512\n\nAdditions pending the determination of proved reserves\n250\n\n453\n\n200\n\nCharged to expense\n(\n432\n)\n(\n69\n)\n(\n95\n)\nReclassifications to wells, facilities and equipment based on the determination of proved reserves\n(\n141\n)\n(\n292\n)\n(\n142\n)\nDivestments/Other\n9\n\n(\n51\n)\n84\n\nEnding balance at December 31\n3,286\n\n3,600\n\n3,559\n\nEnding balance attributed to equity companies included above\n225\n\n225\n\n306\n\nPeriod-end capitalized suspended exploratory well costs\n(millions of dollars)\n2025\n2024\n2023\n\nCapitalized for a period of one year or less\n250\n\n453\n\n200\n\nCapitalized for a period of between one and five years\n933\n\n583\n\n1,030\n\nCapitalized for a period of between five and ten years\n1,144\n\n1,544\n\n1,411\n\nCapitalized for a period of greater than ten years\n959\n\n1,020\n\n918\n\nCapitalized for a period greater than one year - subtotal\n3,036\n\n3,147\n\n3,359\n\nTotal\n3,286\n\n3,600\n\n3,559\n\nExploration activity often involves drilling multiple wells, over a number of years, to fully evaluate a project. The table below provides a breakdown of the number of projects with only exploratory well costs capitalized for a period of one year or less and those that have had exploratory well costs capitalized for a period greater than one year.\n\n2025\n2024\n2023\nNumber of projects that only have exploratory well costs capitalized for a period of one year or less\n1\n\n5\n\n\u2014\n\nNumber of projects that have exploratory well costs capitalized for a period greater than one year\n25\n\n24\n\n31\n\nTotal\n26\n\n29\n\n31\n\nOf the\n25\n projects that have exploratory well costs capitalized for a period greater than one year as of December\u00a031, 2025,\n10\n\u00a0projects have drilling in the preceding year or exploratory activity planned in the next two years, while the remaining\n15\n projects are those with completed exploratory activity. These projects are currently being progressed toward development, including evaluation to tie into existing infrastructure, awaiting capacity, and aligning with the respective governments for development plans.\n109\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 17. Cash Flow Information\nThe Consolidated Statement of Cash Flows provides information about changes in cash and cash equivalents. Highly liquid investments with maturities of three months or less when acquired are classified as cash equivalents.\nIn 2025, the Corporation completed the sale of the Product Solutions affiliates in France. The sale included cash proceeds as well as cash from a financing arrangement which was assumed by the buyer upon closing.\nIn 2024, the Corporation completed the acquisition of Pioneer Natural Resources Company (Pioneer) through the issuance of\n545\n\u00a0million shares of ExxonMobil common stock having a fair value of $\n63\n billion on the acquisition date and assumed debt with a fair value of $\n5\n billion. Additional information is provided in\nNote 20\n.\nIn 2023, the Corporation completed the acquisition of Denbury Inc. (Denbury) through the issuance of\n46\n\u00a0million shares of ExxonMobil Corporation common stock having a fair value of $\n4.8\n\u00a0billion on the acquisition date. Additional information is provided in\nNote 20\n.\nIn 2023, the Corporation completed the sale of Esso Thailand. The sale included cash proceeds as well as cash from debt that was issued to facilitate the sale, which was assumed by the buyer upon closing.\nFor 2025, the \u201cNet (gain)/loss on asset sales\u201d on the Consolidated Statement of Cash Flows includes before-tax amounts mainly from the sale of upstream assets in the United States and Argentina and retail fuels assets in Singapore. For 2024, the number includes before-tax amounts mainly from the sale of upstream assets in the United States, Argentina, and Nigeria\n.\n For 2023, the number includes before-tax amounts from the sale of upstream assets in the United States. These net (gain)/loss amounts are reported in \"Other income\" on the Consolidated Statement of Income.\n(millions of dollars)\n2025\n2024\n2023\n\nCash interest paid\nIncluded in cash flows from operating activities\n218\n\n624\n\n584\n\nCapitalized, included in cash flows from investing activities\n1,534\n\n1,276\n\n1,152\n\nTotal cash interest paid\n1,752\n\n1,900\n\n1,736\n\nNote 18. Incentive Program\nThe 2003 Incentive Program provides for grants of stock options, stock appreciation rights (SARs), restricted stock, and other forms of awards. Awards may be granted to eligible employees of the Company and those affiliates at least\n50\n percent owned by the Corporation. Outstanding awards are subject to certain forfeiture provisions contained in the program or award instrument. Options and SARs may be granted at prices not less than\n100\n percent of market value on the date of grant and have a maximum life of\n10\n years. The maximum number of shares of stock that may be issued under the 2003 Incentive Program is\n220\n million. Awards that are forfeited, expire, or are settled in cash, do not count against this maximum limit. The 2003 Incentive Program does not have a specified term. New awards may be made until the available shares are depleted, unless the ExxonMobil Board of Directors terminates the plan early. At the end of 2025, remaining shares available for award under the 2003 Incentive Program were\n41\n million.\nRestricted Stock and Restricted Stock Units.\n Awards of restricted (nonvested) common stock units granted under the 2003 Incentive Program totaled\n9,852\n thousand,\n10,393\n thousand, and\n9,701\n thousand in 2025, 2024, and 2023, respectively.\nCompensation expense for these awards is based on the price of the stock at the date of grant and is recognized in income over the requisite service period. Shares for these awards are issued to employees from treasury stock. The units that are settled in cash are recorded as liabilities, and their changes in fair value are recognized over the vesting period.\n During the applicable restricted periods, the shares and units may not be sold or transferred and are subject to forfeiture. The majority of the awards have graded vesting periods, with\n50\n percent of the shares and units in each award vesting after\nthree years\n, and the remaining\n50\n percent vesting after\nseven years\n.\n\nSome management, professional, and technical participants will receive awards that vest in full after\nthree years\n. Awards granted to a small number of senior executives have vesting periods of\nfive years\n for\n50\n percent of the award and of\n10\n years for the remaining\n50\n percent of the award, except that for awards granted prior to 2020 the vesting of the\n10\n-year portion of the award is delayed until retirement if later than\n10\n years.\n110\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nIn accordance with the terms of the merger agreement for the Pioneer acquisition, which closed on May 3, 2024, awards of Pioneer restricted stock units granted under the Pioneer Amended and Restated 2006 Long Term Incentive Plan (Pioneer LTIP) that did not vest as of immediately prior to the closing were cancelled and converted into awards of ExxonMobil restricted stock units based on the merger exchange ratio. The grant date for the converted Pioneer awards is considered to be the effective date of the acquisition for the purpose of calculating fair value. Compensation costs for the converted Pioneer awards is recognized in income over a period commensurate with the vesting schedule. Pioneer awards vest in\nthree\n installments over a period of\nthree years\n with approximately one third of the awards vesting each year. Shares for these awards are issued to employees from treasury stock. The units that are settled in cash are recorded as liabilities and their changes in fair value are recognized over the vesting period. The maximum term of the Pioneer awards is\nthree years\n. As of the Pioneer acquisition closing on May 3, 2024, the maximum number of shares of stock that can be issued under the Pioneer LTIP was\n9,458\n thousand. At the end of 2025, remaining shares available for awards under the Pioneer LTIP were\n9,426\n thousand. The program is set to expire in May 2026.\nThe following tables summarize information about restricted stock and restricted stock units for the year ended December\u00a031, 2025.\nRestricted stock and units outstanding\n2025\nShares\n(thousands)\nWeighted-Average\nGrant-Date\nFair Value per Share\n(dollars)\nIssued and outstanding at January 1\n39,595\n\n85.29\n\nAwards issued in 2025\n10,327\n\n118.72\n\nVested\n(\n8,716\n)\n90.54\n\nForfeited\n(\n552\n)\n100.77\n\nIssued and outstanding at December 31\n40,654\n\n92.45\n\nImpacts of Pioneer awards incorporated in the totals above include\n49\n\u00a0thousand awards issued in 2025, (\n189\n)\u00a0thousand vested and (\n65\n)\u00a0thousand forfeited.\nValue of restricted stock units\n2025\n2024\n2023\nGrant price\n(dollars)\n115.02\n\n118.57\n\n103.16\n\nValue at date of grant:\n(millions of dollars)\nUnits settled in stock\n1,031\n\n1,193\n\n900\n\nUnits settled in cash\n108\n\n129\n\n101\n\nTotal value\n1,139\n\n1,322\n\n1,001\n\nAs of December\u00a031, 2025, there was $\n2.7\n billion of unrecognized compensation cost related to the nonvested restricted awards. This cost is expected to be recognized over a weighted-average period of\n4.6\n years. The compensation cost charged against income for the restricted stock and restricted stock units was $\n1.0\n billion, $\n0.8\n billion, and $\n0.6\n billion for 2025, 2024, and 2023, respectively. The income tax benefit recognized in income related to this compensation expense was $\n0.1\n billion, $\n0.1\n billion, and $\n0.1\n billion for the same periods, respectively. The fair value of shares and units vested in 2025, 2024, and 2023 was $\n1.0\n billion, $\n1.0\n billion, and $\n0.9\n billion, respectively. Cash payments of $\n0.1\n billion, $\n0.1\n billion, and $\n0.1\n billion for vested restricted stock units settled in cash were made in 2025, 2024, and 2023, respectively.\n\n111\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 19. Divestment Activities\nIn 2025, the Corporation realized proceeds of approximately $\n3.2\n\u00a0billion and recognized net after-tax earnings of approximately $\n1.1\n\u00a0billion from its divestment activities. This included the sale of the Singapore retail fuels business, Mobil Argentina S.A., Product Solutions affiliates in France,\ncertain\nconventional and unconventional assets\n in the United States,\nand other smaller divestments.\nIn 2024, the Corporation realized proceeds of approximately $\n5.0\n\u00a0billion and recognized net after-tax earnings of approximately $\n1.0\n\u00a0billion from its divestment activities. This included the sale of the Santa Ynez Unit and associated facilities in California, Mobil Producing Nigeria Unlimited, ExxonMobil Exploration Argentina, the Fos-sur-Mer Refinery (France), the Adriatic LNG terminal (Italy), and certain conventional and unconventional assets in the United States, as well as other smaller divestments.\nIn 2023, the Corporation realized proceeds of approximately $\n4.1\n\u00a0billion and recognized net after-tax earnings of approximately $\n0.6\n\u00a0billion from its divestment activities. This included the sale of the Aera Energy joint venture, Esso Thailand Ltd., the Billings Refinery, certain unconventional assets in the United States, as well as other smaller divestments.\nNote 20. Mergers and Acquisitions\nPioneer Natural Resources Company\nOn May 3, 2024, the Corporation acquired Pioneer Natural Resources Company (Pioneer), an independent oil and gas exploration and production company. In connection with the acquisition, we issued\n545\n\u00a0million shares of ExxonMobil common stock having a fair value of $\n63\n\u00a0billion on the acquisition date and assumed debt with a fair value of $\n5\n\u00a0billion.\nThe transaction was accounted for as a business combination in accordance with ASC 805, which requires that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date.\nThe following table summarizes the fair values of the assets acquired and liabilities assumed.\n(billions of dollars)\nPioneer\nCurrent assets\n(1)\n3\n\nOther non-current assets\n1\n\nProperty, plant, & equipment\n(2)\n84\n\nTotal identifiable assets acquired\n88\n\nCurrent liabilities\n(1)\n3\n\nLong-term debt\n(3)\n5\n\nDeferred income tax liabilities\n(4)\n16\n\nOther non-current liabilities\n2\n\nTotal liabilities assumed\n26\n\nNet identifiable assets acquired\n62\n\nGoodwill\n(5)\n1\n\nNet assets\n63\n\n(1)\n Current assets and current liabilities consist primarily of accounts receivable and payable, with their respective fair values approximating historical values given their short-term duration, expectation of insignificant bad debt expense, and our credit rating.\n(2)\n Property, plant, and equipment, of which a significant portion relates to crude oil and natural gas properties, was preliminarily valued using the income approach. Significant inputs and assumptions used in the income approach included estimates for commodity prices, future oil and gas production volumes, drilling and development costs, and risk-adjusted discount rates. Collectively, these inputs are level 3 inputs.\n(3)\n Long-term debt was valued using market prices as of the acquisition date, which reflects the use of level 1 inputs.\n(4)\n Deferred income taxes represent the tax effects of differences in the tax basis and acquisition date fair values of assets acquired and liabilities assumed.\n(5)\nGoodwill was allocated to the Upstream segment.\n112\nTable of Contents\nFinancial Table of Contents\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nDebt Assumed in the Merger\nThe following table presents long-term debt assumed at closing:\n(millions of dollars)\nPar Value\nFair Value\nas of May 2, 2024\n0.250\n% Convertible Senior Notes due May 2025\n(1)\n450\n\n1,327\n\n1.125\n% Senior Notes due January 2026\n750\n\n699\n\n5.100\n% Senior Notes due March 2026\n1,100\n\n1,096\n\n7.200\n% Senior Notes due January 2028\n241\n\n252\n\n4.125\n% Senior Notes due February 2028\n138\n\n130\n\n1.900\n% Senior Notes due August 2030\n1,100\n\n914\n\n2.150\n% Senior Notes due January 2031\n1,000\n\n832\n\n(1)\n In June 2024, the Corporation redeemed in full all of the Convertible Senior Notes assumed from Pioneer for an amount consistent with the acquisition date fair value.\nActual and Pro Forma Impact of Merger\nThe following table presents revenues and earnings included in the Consolidated Statement of Income for Pioneer since the acquisition date (May 3, 2024) through December 31, 2024:\n(millions of dollars)\nTwelve Months Ended December 31, 2024\nSales and other operating revenues\n17,008\n\nNet income (loss) attributable to ExxonMobil\n1,710\n\nThe following table presents unaudited pro forma information for the Corporation as if the merger with Pioneer had occurred at the beginning of January 1, 2023:\nUnaudited\n(millions of dollars)\nTwelve Months Ended\nDecember 31,\n2024\n2023\nSales and other operating revenues\n347,406\n\n358,014\n\nNet income (loss) attributable to ExxonMobil\n34,476\n\n39,211\n\nThe historical financial information was adjusted to give effect to the pro forma events that were directly attributable to the merger and factually supportable. The unaudited pro forma consolidated results are not necessarily indicative of what the consolidated results of operations actually would have been had the merger been completed on January 1, 2023. In addition, the unaudited pro forma consolidated results reflect pro forma adjustments primarily related to conforming Pioneer's accounting policies to ExxonMobil, additional depreciation expense related to the fair value adjustment of the acquired property, plant, and equipment, our capital structure, Pioneer's transaction-related costs, and applicable income tax impacts of the pro forma adjustments.\nOur transaction costs to effect the acquisition were immaterial.\nDenbury Inc.\nOn November 2, 2023, the Corporation acquired Denbury, a developer of carbon capture, utilization, and storage solutions and enhanced oil recovery producing assets. The acquisition also included Gulf Coast and Rocky Mountain oil and natural gas operations.\nTotal consideration was $\n5.1\n\u00a0billion, which included the issuance of\n46\n\u00a0million shares of ExxonMobil common stock from treasury having a fair value of $\n4.8\n\u00a0billion on the acquisition date, and cash payments of $\n0.3\n\u00a0billion related to repayment of Denbury's credit facility and settlement of fractional shares.\nThe transaction was accounted for as a business combination in accordance with ASC 805, which requires that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. Substantially all of the purchase price was allocated to property, plant, and equipment and long-term liabilities. The Denbury acquisition resulted in an immaterial amount of goodwill. Revenues and earnings arising from Denbury's operations are immaterial in 2023 for pro forma disclosure purposes.\n113\nTable of Contents\nFinancial Table of Contents\nSUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES (unaudited)\nThe results of operations for producing activities shown below do not include earnings from other activities that ExxonMobil includes in the Upstream function, such as oil and gas transportation operations, LNG liquefaction and transportation operations, power operations, technical service agreements, gains and losses from derivative activity, other nonoperating activities, and adjustments for noncontrolling interests. These excluded amounts for both consolidated and equity companies totaled $1.9\u00a0billion in 2025, $1.4\u00a0billion in 2024 and $(0.5)\u00a0billion in 2023. Oil sands mining operations are included in the results of operations in accordance with Securities and Exchange Commission and Financial Accounting Standards Board rules.\nResults of Operations\n(millions of dollars)\nUnited\nStates\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\n\n2025\nConsolidated Subsidiaries\n\nSales to third parties\n14,798\n5,699\n991\n159\n2,374\n3,693\n27,714\nTransfers\n13,696\n11,866\n49\n3,233\n9,821\n501\n39,166\nRevenue\n28,494\n17,565\n1,040\n3,392\n12,195\n4,194\n66,880\nProduction costs excluding taxes\n8,397\n4,793\n450\n1,053\n1,192\n488\n16,373\nExploration expenses\n26\n354\n97\n127\n311\n92\n1,007\nDepreciation and depletion\n13,538\n3,367\n331\n802\n1,505\n707\n20,250\nTaxes other than income\n2,101\n96\n50\n88\n1,780\n279\n4,394\nRelated income tax\n880\n1,406\n64\n505\n5,631\n594\n9,080\nResults of producing activities for consolidated subsidiaries\n3,552\n\n7,549\n\n48\n\n817\n\n1,776\n\n2,034\n\n15,776\n\nEquity Companies\n\nSales to third parties\n68\n\u2014\n321\n249\n12,734\n\u2014\n13,372\nTransfers\n\u2014\n\u2014\n9\n\u2014\n28\n\u2014\n37\nRevenue\n68\n\u2014\n330\n249\n12,762\n\u2014\n13,409\nProduction costs excluding taxes\n64\n\u2014\n486\n32\n670\n\u2014\n1,252\nExploration expenses\n\u2014\n\u2014\n1\n\u2014\n\u2014\n\u2014\n1\nDepreciation and depletion\n16\n\u2014\n41\n39\n2,051\n\u2014\n2,147\nTaxes other than income\n6\n\u2014\n9\n\u2014\n4,406\n\u2014\n4,421\nRelated income tax\n\u2014\n\u2014\n(92)\n52\n1,953\n\u2014\n1,913\nResults of producing activities for equity companies\n(18)\n\u2014\n\n(115)\n126\n\n3,682\n\n\u2014\n\n3,675\n\nTotal results of operations\n3,534\n\n7,549\n\n(67)\n943\n\n5,458\n\n2,034\n\n19,451\n\n114\nTable of Contents\nFinancial Table of Contents\nResults of Operations\n(millions of dollars)\nUnited\nStates\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\n\n2024\nConsolidated Subsidiaries\n\nSales to third parties\n13,036\n5,774\n986\n425\n2,473\n3,790\n26,484\nTransfers\n13,745\n13,140\n43\n5,764\n10,825\n817\n44,334\nRevenue\n26,781\n18,914\n1,029\n6,189\n13,298\n4,607\n70,818\nProduction costs excluding taxes\n6,869\n4,745\n406\n1,723\n1,163\n610\n15,516\nExploration expenses\n43\n485\n46\n213\n31\n8\n826\nDepreciation and depletion\n11,114\n3,343\n94\n1,436\n1,390\n852\n18,229\nTaxes other than income\n2,163\n115\n31\n479\n1,987\n370\n5,145\nRelated income tax\n1,502\n2,025\n202\n605\n6,562\n805\n11,701\nResults of producing activities for consolidated subsidiaries\n5,090\n\n8,201\n\n250\n\n1,733\n\n2,165\n\n1,962\n\n19,401\n\nEquity Companies\n\nSales to third parties\n69\n\u2014\n361\n191\n13,054\n\u2014\n13,675\nTransfers\n\u2014\n\u2014\n15\n\u2014\n142\n\u2014\n157\nRevenue\n69\n\u2014\n376\n191\n13,196\n\u2014\n13,832\nProduction costs excluding taxes\n58\n\u2014\n422\n50\n659\n\u2014\n1,189\nExploration expenses\n\u2014\n\u2014\n2\n\u2014\n\u2014\n\u2014\n2\nDepreciation and depletion\n239\n\u2014\n36\n35\n781\n\u2014\n1,091\nTaxes other than income\n6\n\u2014\n10\n\u2014\n4,469\n\u2014\n4,485\nRelated income tax\n\u2014\n\u2014\n(48)\n24\n2,495\n\u2014\n2,471\nResults of producing activities for equity companies\n(234)\n\u2014\n\n(46)\n82\n\n4,792\n\n\u2014\n\n4,594\n\nTotal results of operations\n4,856\n\n8,201\n\n204\n\n1,815\n\n6,957\n\n1,962\n\n23,995\n\n2023\nConsolidated Subsidiaries\n\nSales to third parties\n5,098\n4,027\n1,345\n298\n2,490\n4,588\n17,846\nTransfers\n13,378\n11,474\n47\n6,355\n10,779\n600\n42,633\nRevenue\n18,476\n15,501\n1,392\n6,653\n13,269\n5,188\n60,479\nProduction costs excluding taxes\n4,164\n4,943\n623\n1,710\n1,146\n511\n13,097\nExploration expenses\n44\n505\n25\n124\n18\n35\n751\nDepreciation and depletion\n8,479\n2,866\n96\n1,561\n1,519\n755\n15,276\nTaxes other than income\n1,701\n117\n48\n516\n1,936\n358\n4,676\nRelated income tax\n703\n1,196\n315\n1,299\n6,498\n1,078\n11,089\nResults of producing activities for consolidated subsidiaries\n3,385\n\n5,874\n\n285\n\n1,443\n\n2,152\n\n2,451\n\n15,590\n\nEquity Companies\n\nSales to third parties\n182\n\u2014\n1,211\n214\n14,653\n\u2014\n16,260\nTransfers\n83\n\u2014\n29\n\u2014\n232\n\u2014\n344\nRevenue\n265\n\u2014\n1,240\n214\n14,885\n\u2014\n16,604\nProduction costs excluding taxes\n239\n\u2014\n419\n39\n714\n\u2014\n1,411\nExploration expenses\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nDepreciation and depletion\n58\n\u2014\n27\n42\n605\n\u2014\n732\nTaxes other than income\n12\n\u2014\n27\n\u2014\n5,049\n\u2014\n5,088\nRelated income tax\n\u2014\n\u2014\n202\n30\n2,904\n\u2014\n3,136\nResults of producing activities for equity companies\n(44)\n\u2014\n\n565\n\n103\n\n5,613\n\n\u2014\n\n6,237\n\nTotal results of operations\n3,341\n\n5,874\n\n850\n\n1,546\n\n7,765\n\n2,451\n\n21,827\n\n115\nTable of Contents\nFinancial Table of Contents\nOil and Gas Exploration and Production Costs\nThe amounts shown for net capitalized costs of consolidated subsidiaries are $9.1 billion less at year-end 2025 and $9.6 billion less at year-end 2024 than the amounts reported as investments in property, plant, and equipment for the Upstream in\nNote\n9\n. This is due to the exclusion from capitalized costs of certain transportation and research assets and assets relating to LNG operations. Assets related to oil sands and oil shale mining operations are included in the capitalized costs in accordance with Financial Accounting Standards Board rules.\nCapitalized Costs\n(millions of dollars)\n\nUnited\nStates\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\nAs of December 31, 2025\nConsolidated Subsidiaries\n\nProperty (acreage) costs\n\u2013 Proved\n33,548\n3,187\n33\n694\n2,962\n688\n41,112\n\n\u2013 Unproved\n43,177\n1,950\n42\n59\n5\n2,659\n47,892\nTotal property costs\n\n76,725\n5,137\n75\n753\n2,967\n3,347\n89,004\nProducing assets\n\n132,738\n60,734\n13,537\n35,493\n46,725\n16,585\n305,812\nIncomplete construction\n\n5,867\n13,015\n239\n1,442\n1,482\n2,479\n24,524\nTotal capitalized costs\n\n215,330\n78,886\n13,851\n37,688\n51,174\n22,411\n419,340\nAccumulated depreciation and depletion\n76,273\n31,036\n13,165\n33,603\n34,165\n11,915\n200,157\nNet capitalized costs for consolidated subsidiaries\n139,057\n\n47,850\n\n686\n\n4,085\n\n17,009\n\n10,496\n\n219,183\n\nEquity Companies\n\nProperty (acreage) costs\n\u2013 Proved\n\u2014\n\u2014\n1\n309\n\u2014\n\u2014\n310\n\n\u2013 Unproved\n\u2014\n\u2014\n\u2014\n3,111\n\u2014\n\u2014\n3,111\nTotal property costs\n\n\u2014\n\u2014\n1\n3,420\n\u2014\n\u2014\n3,421\nProducing assets\n\n1,390\n\u2014\n4,225\n402\n21,842\n\u2014\n27,859\nIncomplete construction\n\n3\n\u2014\n24\n466\n2,225\n\u2014\n2,718\nTotal capitalized costs\n\n1,393\n\u2014\n4,250\n4,288\n24,067\n\u2014\n33,998\nAccumulated depreciation and depletion\n1,081\n\u2014\n4,000\n113\n9,886\n\u2014\n15,080\nNet capitalized costs for equity companies\n312\n\n\u2014\n\n250\n\n4,175\n\n14,181\n\n\u2014\n\n18,918\n\nAs of December 31, 2024\nConsolidated Subsidiaries\n\nProperty (acreage) costs\n\u2013 Proved\n28,143\n3,238\n8\n693\n2,990\n654\n35,726\n\n\u2013 Unproved\n49,903\n2,367\n42\n108\n5\n2,656\n55,081\nTotal property costs\n\n78,046\n5,605\n50\n801\n2,995\n3,310\n90,807\nProducing assets\n\n131,125\n50,905\n12,304\n34,991\n45,482\n15,317\n290,124\nIncomplete construction\n\n6,685\n12,854\n196\n1,317\n2,269\n2,078\n25,399\nTotal capitalized costs\n215,856\n69,364\n12,550\n37,109\n50,746\n20,705\n406,330\nAccumulated depreciation and depletion\n74,303\n27,479\n11,953\n32,837\n32,822\n10,534\n189,928\nNet capitalized costs for consolidated subsidiaries\n141,553\n\n41,885\n\n597\n\n4,272\n\n17,924\n\n10,171\n\n216,402\n\nEquity Companies\n\nProperty (acreage) costs\n\u2013 Proved\n\u2014\n\u2014\n3\n309\n\u2014\n\u2014\n312\n\n\u2013 Unproved\n\u2014\n\u2014\n\u2014\n3,111\n\u2014\n\u2014\n3,111\nTotal property costs\n\n\u2014\n\u2014\n3\n3,420\n\u2014\n\u2014\n3,423\nProducing assets\n\n1,360\n\u2014\n5,222\n402\n19,215\n\u2014\n26,199\nIncomplete construction\n\n2\n\u2014\n15\n453\n5,091\n\u2014\n5,561\nTotal capitalized costs\n1,362\n\u2014\n5,240\n4,275\n24,306\n\u2014\n35,183\nAccumulated depreciation and depletion\n1,046\n\u2014\n4,935\n76\n8,564\n\u2014\n14,621\nNet capitalized costs for equity companies\n316\n\n\u2014\n\n305\n\n4,199\n\n15,742\n\n\u2014\n\n20,562\n\n116\nTable of Contents\nFinancial Table of Contents\nOil and Gas Exploration and Production Costs (continued)\nThe amounts reported as costs incurred include both capitalized costs and costs charged to expense during the year. Costs incurred also include new asset retirement obligations established in the current year, as well as increases or decreases to the asset retirement obligation resulting from changes in cost estimates or abandonment date. Total consolidated costs incurred in 2025 were $27.8\u00a0billion, down $77.3\u00a0billion from 2024, due primarily to the absence of the Pioneer acquisition and partly offset by higher development costs. In 2024, costs were $105.1\u00a0billion, up $84.1\u00a0billion from 2023, due primarily to the Pioneer acquisition and higher development costs. Total equity company costs incurred in 2025 were $0.8\u00a0billion, down $0.3\u00a0billion from 2024, due to lower development costs.\nCosts Incurred in Property Acquisitions,\nExploration and Development Activities\n(millions of dollars)\nUnited\nStates\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\n\nDuring 2025\n\nConsolidated Subsidiaries\n\nProperty acquisition costs\n\u2013 Proved\n1,177\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n1,177\n\n\u2013 Unproved\n2,591\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n2,591\nExploration costs\n\n66\n1,304\n80\n102\n12\n54\n1,618\nDevelopment costs\n\n12,463\n7,310\n238\n634\n967\n823\n22,435\nTotal costs incurred for consolidated subsidiaries\n16,297\n\n8,614\n\n318\n\n736\n\n979\n\n877\n\n27,821\n\nEquity Companies\n\nProperty acquisition costs\n\u2013 Proved\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\n\u2013 Unproved\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nExploration costs\n\n\u2014\n\u2014\n1\n\u2014\n\u2014\n\u2014\n1\nDevelopment costs\n\n9\n\u2014\n21\n15\n769\n\u2014\n814\nTotal costs incurred for equity companies\n9\n\n\u2014\n\n22\n\n15\n\n769\n\n\u2014\n\n815\n\nDuring 2024\n\nConsolidated Subsidiaries\n\nProperty acquisition costs\n\u2013 Proved\n39,271\n\u2014\n\u2014\n1\n\u2014\n\u2014\n39,272\n\n\u2013 Unproved\n45,196\n\u2014\n5\n\u2014\n\u2014\n\u2014\n45,201\nExploration costs\n\n55\n838\n63\n268\n30\n8\n1,262\nDevelopment costs\n\n10,903\n5,839\n113\n910\n750\n844\n19,359\nTotal costs incurred for consolidated subsidiaries\n95,425\n\n6,677\n\n181\n\n1,179\n\n780\n\n852\n\n105,094\n\nEquity Companies\n\nProperty acquisition costs\n\u2013 Proved\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\n\u2013 Unproved\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nExploration costs\n\n\u2014\n\u2014\n2\n\u2014\n\u2014\n\u2014\n2\nDevelopment costs\n\n3\n\u2014\n20\n18\n1,091\n\u2014\n1,132\nTotal costs incurred for equity companies\n3\n\n\u2014\n\n22\n\n18\n\n1,091\n\n\u2014\n\n1,134\n\nDuring 2023\n\nConsolidated Subsidiaries\nProperty acquisition costs\n\u2013 Proved\n2,456\n\u2014\n\u2014\n2\n\u2014\n\u2014\n2,458\n\n\u2013 Unproved\n171\n\u2014\n\u2014\n6\n\u2014\n\u2014\n177\nExploration costs\n\n54\n693\n23\n117\n18\n35\n940\nDevelopment costs\n\n8,978\n5,914\n55\n562\n822\n1,046\n17,377\nTotal costs incurred for consolidated subsidiaries\n11,659\n\n6,607\n\n78\n\n687\n\n840\n\n1,081\n\n20,952\n\nEquity Companies\nProperty acquisition costs\n\u2013 Proved\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\n\u2013 Unproved\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nExploration costs\n\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nDevelopment costs\n\n10\n\u2014\n5\n7\n1,488\n\u2014\n1,510\nTotal costs incurred for equity companies\n10\n\n\u2014\n\n5\n\n7\n\n1,488\n\n\u2014\n\n1,510\n\n117\nTable of Contents\nFinancial Table of Contents\nOil and Gas Reserves\nThe following information describes changes during the years and balances of proved oil and gas reserves at year-end 2023, 2024, and 2025.\nThe definitions used are in accordance with the Securities and Exchange Commission\u2019s Rule 4-10 (a) of Regulation S-X.\nProved oil and natural gas reserves are those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible \u2013 from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations \u2013 prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain. In some cases, substantial new investments in additional wells and related facilities will be required to recover these proved reserves.\nIn accordance with the Securities and Exchange Commission\u2019s (SEC) rules, the Corporation\u2019s year-end reserves volumes, as well as the reserves change categories shown in the following tables, are required to be calculated on the basis of average prices during the 12-month period prior to the ending date of the period covered by this report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period. These reserves quantities are also used in calculating unit-of-production depreciation rates and in calculating the standardized measure of discounted net cash flows.\nRevisions can include upward or downward changes in previously estimated volumes of proved reserves for existing fields due to the evaluation or re-evaluation of (1) already available geologic, reservoir or production data, (2) new geologic, reservoir or production data or (3) changes in the average of first-of-month oil and natural gas prices and/or costs that are used in the estimation of reserves. Revisions can also result from significant changes in either development strategy or production equipment/facility capacity.\nProved reserves include 100 percent of each majority-owned affiliate\u2019s participation in proved reserves and ExxonMobil\u2019s ownership percentage of the proved reserves of equity companies, but exclude royalties and quantities due others. Natural gas reserves exclude the gaseous equivalent of liquids expected to be removed from the natural gas on leases, at field facilities, and at gas processing plants. These liquids are included in net proved reserves of crude oil and natural gas liquids.\nIn the proved reserves tables, consolidated reserves and equity company reserves are reported separately. However, the Corporation does not view equity company reserves any differently than those from consolidated companies.\nReserves reported under production sharing and other nonconcessionary agreements are based on the economic interest as defined by the specific fiscal terms in the agreement. The production and reserves reported for these types of arrangements typically vary inversely with oil and natural gas price changes. As oil and natural gas prices increase, the cash flow and value received by the Company increase; however, the production volumes and reserves required to achieve this value will typically be lower because of the higher prices. When prices decrease, the opposite effect generally occurs. The percentage of total proved reserves (consolidated subsidiaries plus equity companies) at year-end 2025 that were associated with production sharing contract arrangements was 12 percent on an oil-equivalent basis (natural gas is converted to an oil-equivalent basis at six billion cubic feet per one million barrels).\nNet proved developed reserves are those volumes that are expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well. Net proved undeveloped reserves are those volumes that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.\nCrude oil, natural gas liquids, and natural gas production quantities shown are the net volumes withdrawn from ExxonMobil\u2019s oil and natural gas reserves. The natural gas quantities differ from the quantities of natural gas delivered for sale by the producing function as reported in the Upstream Operational Results due to volumes consumed or flared and inventory changes.\nThe changes between 2025 year-end proved reserves and 2024 year-end proved reserves include worldwide production of 1.8 billion oil-equivalent barrels (GOEB), asset sales of 0.1 GOEB primarily in the United States, and downward revisions of 0.9 GOEB attributed primarily to the United States. Additions to proved reserves include 2.1 GOEB from extensions and discoveries primary in the United States and Guyana and 0.1 GOEB related to United States acquisitions.\nThe changes between 2024 year-end proved reserves and 2023 year-end proved reserves include worldwide production of 1.6 billion oil-equivalent barrels (GOEB) and asset sales of 0.1 GOEB primarily in Nigeria. Additions to proved reserves include 2.3 GOEB related to the Pioneer acquisition, 1.9 GOEB from extensions and discoveries primarily in the United States and Guyana, and net revisions of 0.6 GOEB primarily attributed to the United Arab Emirates, United States, Canada, and Guyana.\nThe changes between 2023 year-end proved reserves and 2022 year-end proved reserves include worldwide production of 1.4 billion GOEB, asset sales of 0.2 GOEB primarily in the United States, and downward revisions of 0.4 GOEB. Additions to proved reserves include 1.1 GOEB from extensions and discoveries primarily in the United States and Guyana and 0.2 GOEB related to the Denbury acquisition.\n118\nTable of Contents\nFinancial Table of Contents\nCrude Oil, Natural Gas Liquids, Bitumen and Synthetic Oil Proved Reserves\n\nCrude Oil\nNatural Gas\nLiquids\nBitumen\nSynthetic Oil\nTotal\n\u00a0(millions of barrels)\nUnited\nStates\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\nWorldwide\nCanada/\nOther\nAmericas\nCanada/\nOther\nAmericas\nNet proved developed and undeveloped reserves of consolidated subsidiaries\n\nJanuary 1, 2023\n2,204\n945\n5\n271\n2,794\n66\n6,285\n1,176\n2,420\n353\n10,234\nRevisions\n(398)\n32\n\u2014\n31\n30\n3\n(302)\n(110)\n123\n26\n(263)\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n156\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n156\n2\n\u2014\n\u2014\n158\nSales\n(12)\n\u2014\n\u2014\n\u2014\n(4)\n\u2014\n(16)\n(5)\n\u2014\n\u2014\n(21)\nExtensions/discoveries\n355\n105\n\u2014\n\u2014\n\u2014\n\u2014\n460\n272\n\u2014\n\u2014\n732\nProduction\n(203)\n(88)\n(1)\n(78)\n(153)\n(8)\n(531)\n(99)\n(129)\n(25)\n(784)\nDecember 31, 2023\n2,102\n\n994\n\n4\n\n224\n\n2,667\n\n61\n\n6,052\n\n1,236\n\n2,414\n\n354\n\n10,056\n\nAttributable to noncontrolling interests\n1\n551\n108\nProportional interest in proved reserves of equity companies\n\nJanuary 1, 2023\n119\n\u2014\n2\n5\n756\n\u2014\n882\n355\n\u2014\n\u2014\n1,237\nRevisions\n\u2014\n\u2014\n1\n\u2014\n103\n\u2014\n104\n1\n\u2014\n\u2014\n105\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nSales\n(108)\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(108)\n(1)\n\u2014\n\u2014\n(109)\nExtensions/discoveries\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nProduction\n(4)\n\u2014\n\u2014\n\u2014\n(79)\n\u2014\n(83)\n(22)\n\u2014\n\u2014\n(105)\nDecember 31, 2023\n7\n\n\u2014\n\n3\n\n5\n\n780\n\n\u2014\n\n795\n\n333\n\n\u2014\n\n\u2014\n\n1,128\n\nTotal liquids proved reserves at December 31, 2023\n2,109\n\n994\n\n7\n\n229\n\n3,447\n\n61\n\n6,847\n\n1,569\n\n2,414\n\n354\n\n11,184\n\nNet proved developed and undeveloped reserves of consolidated subsidiaries\n\nJanuary 1, 2024\n2,102\n994\n4\n224\n2,667\n61\n6,052\n1,236\n2,414\n354\n10,056\nRevisions\n(176)\n116\n\u2014\n62\n603\n1\n606\n(128)\n152\n(35)\n595\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n877\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n877\n730\n\u2014\n\u2014\n1,607\nSales\n(18)\n(4)\n\u2014\n(45)\n(7)\n\u2014\n(74)\n(15)\n\u2014\n\u2014\n(89)\nExtensions/discoveries\n804\n138\n\u2014\n25\n\u2014\n\u2014\n967\n489\n\u2014\n\u2014\n1,456\nProduction\n(316)\n(126)\n(1)\n(75)\n(154)\n(7)\n(679)\n(148)\n(137)\n(23)\n(987)\nDecember 31, 2024\n3,273\n\n1,118\n\n3\n\n191\n\n3,109\n\n55\n\n7,749\n\n2,164\n\n2,429\n\n296\n\n12,638\n\nAttributable to noncontrolling interests\n\u2014\n552\n90\nProportional interest in proved reserves of equity companies\n\nJanuary 1, 2024\n7\n\u2014\n3\n5\n780\n\u2014\n795\n333\n\u2014\n\u2014\n1,128\nRevisions\n\u2014\n\u2014\n\u2014\n2\n19\n\u2014\n21\n3\n\u2014\n\u2014\n24\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nSales\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nExtensions/discoveries\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nProduction\n(1)\n\u2014\n(1)\n\u2014\n(75)\n\u2014\n(77)\n(22)\n\u2014\n\u2014\n(99)\nDecember 31, 2024\n6\n\n\u2014\n\n2\n\n7\n\n724\n\n\u2014\n\n739\n\n314\n\n\u2014\n\n\u2014\n\n1,053\n\nTotal liquids proved reserves at December 31, 2024\n3,279\n\n1,118\n\n5\n\n198\n\n3,833\n\n55\n\n8,488\n\n2,478\n\n2,429\n\n296\n\n13,691\n\n119\nTable of Contents\nFinancial Table of Contents\nCrude Oil, Natural Gas Liquids, Bitumen and Synthetic Oil Proved Reserves (continued)\n\nCrude Oil\nNatural Gas\nLiquids\nBitumen\nSynthetic Oil\nTotal\n\u00a0(millions of barrels)\nUnited\nStates\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\nWorldwide\nCanada/\nOther\nAmericas\nCanada/\nOther\nAmericas\n\nNet proved developed and undeveloped reserves of consolidated subsidiaries\n\nJanuary 1, 2025\n3,273\n1,118\n3\n191\n3,109\n55\n7,749\n2,164\n2,429\n296\n12,638\nRevisions\n(652)\n124\n1\n78\n13\n6\n(430)\n(373)\n42\n17\n(744)\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n38\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n38\n41\n\u2014\n\u2014\n79\nSales\n(72)\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(72)\n(12)\n\u2014\n\u2014\n(84)\nExtensions/discoveries\n890\n92\n\u2014\n\u2014\n\u2014\n6\n988\n513\n\u2014\n\u2014\n1,501\nProduction\n(367)\n(139)\n(1)\n(52)\n(162)\n(7)\n(728)\n(194)\n(141)\n(25)\n(1,088)\nDecember 31, 2025\n3,110\n\n1,195\n\n3\n\n217\n\n2,960\n\n60\n\n7,545\n\n2,139\n\n2,330\n\n288\n\n12,302\n\nAttributable to noncontrolling interests\n\u2014\n529\n88\nProportional interest in proved reserves of equity companies\n\nJanuary 1, 2025\n6\n\u2014\n2\n7\n724\n\u2014\n739\n314\n\u2014\n\u2014\n1,053\nRevisions\n\u2014\n\u2014\n3\n\u2014\n(2)\n\u2014\n1\n7\n\u2014\n\u2014\n8\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nSales\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nExtensions/discoveries\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nProduction\n(1)\n\u2014\n\u2014\n\u2014\n(97)\n\u2014\n(98)\n(23)\n\u2014\n\u2014\n(121)\nDecember 31, 2025\n5\n\n\u2014\n\n5\n\n7\n\n625\n\n\u2014\n\n642\n\n298\n\n\u2014\n\n\u2014\n\n940\n\nTotal liquids proved reserves at December 31, 2025\n3,115\n\n1,195\n\n8\n\n224\n\n3,585\n\n60\n\n8,187\n\n2,437\n\n2,330\n\n288\n\n13,242\n\n120\nTable of Contents\nFinancial Table of Contents\nCrude Oil, Natural Gas Liquids, Bitumen and Synthetic Oil Proved Reserves (continued)\n\nCrude Oil and Natural Gas Liquids\nBitumen\nSynthetic Oil\nTotal\n(millions of barrels)\nUnited\nStates\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\nCanada/\nOther\nAmericas\nCanada/\nOther\nAmericas\n\nAs of December 31, 2023\nProved developed reserves\n\nConsolidated subsidiaries\n1,735\n433\n4\n217\n1,996\n45\n4,430\n2,307\n242\n6,979\nEquity companies\n11\n\u2014\n3\n5\n438\n\u2014\n457\n\u2014\n\u2014\n457\nProved undeveloped reserves\nConsolidated subsidiaries\n1,498\n561\n\u2014\n20\n751\n28\n2,858\n107\n112\n3,077\nEquity companies\n\u2014\n\u2014\n\u2014\n\u2014\n671\n\u2014\n671\n\u2014\n\u2014\n671\nTotal liquids proved reserves at December 31, 2023\n3,244\n\n994\n\n7\n\n242\n\n3,856\n\n73\n\n8,416\n\n2,414\n\n354\n\n11,184\n\nAs of December 31, 2024\nProved developed reserves\nConsolidated subsidiaries\n3,053\n473\n3\n153\n1,969\n40\n5,691\n2,308\n190\n8,189\nEquity companies\n9\n\u2014\n2\n7\n569\n\u2014\n587\n\u2014\n\u2014\n587\nProved undeveloped reserves\nConsolidated subsidiaries\n2,308\n646\n\u2014\n38\n1,208\n22\n4,222\n121\n106\n4,449\nEquity companies\n\u2014\n\u2014\n\u2014\n\u2014\n466\n\u2014\n466\n\u2014\n\u2014\n466\nTotal liquids proved reserves at December 31, 2024\n5,370\n\n1,119\n\n5\n\n198\n\n4,212\n\n62\n\n10,966\n\n2,429\n\n296\n\n13,691\n\nAs of December 31, 2025\nProved developed reserves\nConsolidated subsidiaries\n2,627\n587\n3\n185\n1,915\n38\n5,355\n2,230\n288\n7,873\nEquity companies\n8\n\u2014\n2\n7\n596\n\u2014\n613\n\u2014\n\u2014\n613\nProved undeveloped reserves\nConsolidated subsidiaries\n2,546\n609\n\u2014\n32\n1,112\n30\n4,329\n100\n\u2014\n4,429\nEquity companies\n\u2014\n\u2014\n3\n\u2014\n324\n\u2014\n327\n\u2014\n\u2014\n327\nTotal liquids proved reserves at December 31, 2025\n5,181\n\n1,196\n\n8\n\n224\n\n3,947\n\n68\n\n10,624\n\n(1)\n2,330\n\n288\n\n13,242\n\n(1)\n See previous pages for natural gas liquids proved reserves attributable to consolidated subsidiaries and equity companies. For additional information on natural gas liquids proved reserves see \"\nItem 2\n. Properties\" in ExxonMobil\u2019s 2025 Form 10-K.\n121\nTable of Contents\nFinancial Table of Contents\nNatural Gas and Oil-Equivalent Proved Reserves\n\nNatural Gas\n(billions of cubic feet)\nOil-Equivalent\nTotal\nAll Products\n\n(1)\n(millions of oil-equivalent barrels)\nUnited\nStates\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\n\nNet proved developed and undeveloped\nreserves of consolidated subsidiaries\n\nJanuary 1, 2023\n13,645\n708\n413\n312\n3,061\n6,008\n24,147\n14,258\nRevisions\n(1,945)\n(201)\n(3)\n(49)\n121\n339\n(1,738)\n(553)\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n7\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n7\n159\nSales\n(417)\n(1)\n\u2014\n\u2014\n(9)\n\u2014\n(427)\n(92)\nExtensions/discoveries\n1,930\n67\n\u2014\n\u2014\n\u2014\n\u2014\n1,997\n1,065\nProduction\n(957)\n(53)\n(103)\n(43)\n(379)\n(489)\n(2,024)\n(1,121)\nDecember 31, 2023\n12,263\n\n520\n\n307\n\n220\n\n2,794\n\n5,858\n\n21,962\n\n13,716\n\nAttributable to noncontrolling interests\n26\nProportional interest in proved reserves\nof equity companies\n\nJanuary 1, 2023\n127\n\u2014\n380\n663\n12,309\n\u2014\n13,479\n3,484\nRevisions\n(27)\n\u2014\n18\n157\n(32)\n\u2014\n116\n124\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nSales\n(35)\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n(35)\n(115)\nExtensions/discoveries\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nProduction\n(8)\n\u2014\n(54)\n(40)\n(956)\n\u2014\n(1,058)\n(281)\nDecember 31, 2023\n57\n\n\u2014\n\n344\n\n780\n\n11,321\n\n\u2014\n\n12,502\n\n3,212\n\nTotal proved reserves at December 31, 2023\n12,320\n\n520\n\n651\n\n1,000\n\n14,115\n\n5,858\n\n34,464\n\n16,928\n\nNet proved developed and undeveloped\nreserves of consolidated subsidiaries\n\nJanuary 1, 2024\n12,263\n520\n307\n220\n2,794\n5,858\n21,962\n13,716\nRevisions\n(911)\n22\n198\n24\n124\n97\n(446)\n521\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n4,044\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n4,044\n2,281\nSales\n(83)\n(10)\n\u2014\n(105)\n(5)\n\u2014\n(203)\n(123)\nExtensions/discoveries\n2,683\n68\n\u2014\n2\n\u2014\n1\n2,754\n1,915\nProduction\n(1,153)\n(59)\n(99)\n(46)\n(373)\n(477)\n(2,207)\n(1,355)\nDecember 31, 2024\n16,843\n\n541\n\n406\n\n95\n\n2,540\n\n5,479\n\n25,904\n\n16,955\n\nAttributable to noncontrolling interests\n20\nProportional interest in proved reserves\nof equity companies\n\nJanuary 1, 2024\n57\n\u2014\n344\n780\n11,321\n\u2014\n12,502\n3,212\nRevisions\n(3)\n\u2014\n9\n80\n49\n\u2014\n135\n46\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nSales\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nExtensions/discoveries\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nProduction\n(7)\n\u2014\n(37)\n(44)\n(904)\n\u2014\n(992)\n(264)\nDecember 31, 2024\n47\n\n\u2014\n\n316\n\n816\n\n10,466\n\n\u2014\n\n11,645\n\n2,994\n\nTotal proved reserves at December 31, 2024\n16,890\n\n541\n\n722\n\n911\n\n13,006\n\n5,479\n\n37,549\n\n19,949\n\n(1)\n Natural gas is converted to an oil-equivalent basis at six billion cubic feet per one million barrels.\n122\nTable of Contents\nFinancial Table of Contents\nNatural Gas and Oil-Equivalent Proved Reserves (continued)\n\nNatural Gas\n(billions of cubic feet)\nOil-Equivalent\nTotal\nAll Products\n\n(1)\n(millions of oil-equivalent barrels)\n\nUnited States\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\nNet proved developed and undeveloped\nreserves of consolidated subsidiaries\n\nJanuary 1, 2025\n16,843\n541\n406\n95\n2,540\n5,479\n25,904\n16,955\nRevisions\n(1,482)\n21\n21\n34\n68\n228\n(1,110)\n(929)\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n234\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n234\n118\nSales\n(248)\n(28)\n\u2014\n\u2014\n(14)\n\u2014\n(290)\n(132)\nExtensions/discoveries\n2,769\n26\n\u2014\n\u2014\n\u2014\n485\n3,280\n2,048\nProduction\n(1,329)\n(33)\n(89)\n(16)\n(395)\n(482)\n(2,344)\n(1,478)\nDecember 31, 2025\n16,787\n\n527\n\n338\n\n113\n\n2,199\n\n5,710\n\n25,674\n\n16,582\n\nAttributable to noncontrolling interests\n15\nProportional interest in proved reserves\nof equity companies\n\nJanuary 1, 2025\n47\n\u2014\n316\n816\n10,466\n\u2014\n11,645\n2,994\nRevisions\n7\n\u2014\n(3)\n4\n80\n\u2014\n88\n23\nImproved recovery\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nPurchases\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nSales\n\u2014\n\u2014\n(24)\n\u2014\n\u2014\n\u2014\n(24)\n(4)\nExtensions/discoveries\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\n\u2014\nProduction\n(6)\n\u2014\n(26)\n(45)\n(898)\n\u2014\n(975)\n(284)\nDecember 31, 2025\n48\n\n\u2014\n\n263\n\n775\n\n9,648\n\n\u2014\n\n10,734\n\n2,729\n\nTotal proved reserves at December 31, 2025\n16,835\n\n527\n\n601\n\n888\n\n11,847\n\n5,710\n\n36,408\n\n19,311\n\n(1)\n Natural gas is converted to an oil-equivalent basis at six billion cubic feet per one million barrels.\n123\nTable of Contents\nFinancial Table of Contents\nNatural Gas and Oil-Equivalent Proved Reserves (continued)\n\nNatural Gas\n(billions of cubic feet)\nOil-Equivalent\n\nTotal\nAll Products\n\n(1)\n(millions of oil-equivalent barrels)\n\nUnited\nStates\nCanada/\nOther\nAmericas\nEurope\nAfrica\nAsia\nAustralia/\nOceania\nTotal\nAs of December 31, 2023\nProved developed reserves\n\nConsolidated subsidiaries\n8,138\n329\n307\n220\n1,935\n3,163\n14,092\n9,327\nEquity companies\n57\n\u2014\n290\n780\n4,223\n\u2014\n5,350\n1,349\nProved undeveloped reserves\nConsolidated subsidiaries\n4,125\n191\n\u2014\n\u2014\n859\n2,695\n7,870\n4,389\nEquity companies\n\u2014\n\u2014\n54\n\u2014\n7,098\n\u2014\n7,152\n1,863\nTotal proved reserves at December 31, 2023\n12,320\n\n520\n\n651\n\n1,000\n\n14,115\n\n5,858\n\n34,464\n\n16,928\n\nAs of December 31, 2024\nProved developed reserves\nConsolidated subsidiaries\n11,671\n296\n406\n93\n1,900\n3,204\n17,570\n11,118\nEquity companies\n47\n\u2014\n262\n816\n4,242\n\u2014\n5,367\n1,481\nProved undeveloped reserves\nConsolidated subsidiaries\n5,172\n245\n\u2014\n2\n640\n2,275\n8,334\n5,838\nEquity companies\n\u2014\n\u2014\n54\n\u2014\n6,224\n\u2014\n6,278\n1,512\nTotal proved reserves at December 31, 2024\n16,890\n\n541\n\n722\n\n911\n\n13,006\n\n5,479\n\n37,549\n\n19,949\n\nAs of December 31, 2025\nProved developed reserves\nConsolidated subsidiaries\n11,206\n356\n338\n111\n2,010\n3,057\n17,078\n10,722\nEquity companies\n48\n\u2014\n207\n775\n4,782\n\u2014\n5,812\n1,582\nProved undeveloped reserves\nConsolidated subsidiaries\n5,581\n171\n\u2014\n2\n189\n2,653\n8,596\n5,860\nEquity companies\n\u2014\n\u2014\n56\n\u2014\n4,866\n\u2014\n4,922\n1,147\nTotal proved reserves at December 31, 2025\n16,835\n\n527\n\n601\n\n888\n\n11,847\n\n5,710\n\n36,408\n\n19,311\n\n(1)\n Natural gas is converted to an oil-equivalent basis at six billion cubic feet per one million barrels.\n124\nTable of Contents\nFinancial Table of Contents\nStandardized Measure of Discounted Future Cash Flows\nAs required by the Financial Accounting Standards Board, the standardized measure of discounted future net cash flows is computed by applying first-day-of-the-month average prices, year-end costs and legislated tax rates, and a discount factor of 10 percent to net proved reserves. The standardized measure includes costs for future dismantlement, abandonment, and rehabilitation obligations. The Corporation believes the standardized measure does not provide a reliable estimate of the Corporation\u2019s expected future cash flows to be obtained from the development and production of its oil and gas properties or of the value of its proved oil and gas reserves. The standardized measure is prepared on the basis of certain prescribed assumptions, including first-day-of-the-month average prices, which represent discrete points in time and therefore may cause significant variability in cash flows from year to year as prices change.\nStandardized Measure of Discounted\nFuture Cash Flows\n(millions of dollars)\nUnited States\nCanada/Other Americas\n(1)\nEurope\nAfrica\nAsia\nAustralia/ Oceania\nTotal\n\nAs of December 31, 2023\nConsolidated Subsidiaries\n\nFuture cash inflows from sales of oil and gas\n213,623\n227,365\n3,918\n19,282\n221,822\n63,204\n749,214\nFuture production costs\n68,753\n113,875\n1,611\n5,025\n52,672\n13,971\n255,907\nFuture development costs\n37,784\n38,436\n1,881\n4,466\n11,926\n6,393\n100,886\nFuture income tax expenses\n14,270\n15,973\n509\n4,337\n121,751\n12,119\n168,959\nFuture net cash flows\n92,816\n59,081\n(83)\n5,454\n35,473\n30,721\n223,462\nEffect of discounting net cash flows at 10%\n49,199\n23,471\n(762)\n402\n18,537\n16,215\n107,062\nDiscounted future net cash flows\n43,617\n\n35,610\n\n679\n\n5,052\n\n16,936\n\n14,506\n\n116,400\n\nEquity Companies\nFuture cash inflows from sales of oil and gas\n818\n\u2014\n5,101\n4,393\n158,643\n\u2014\n168,955\nFuture production costs\n503\n\u2014\n982\n233\n73,496\n\u2014\n75,214\nFuture development costs\n75\n\u2014\n697\n100\n5,452\n\u2014\n6,324\nFuture income tax expenses\n\u2014\n\u2014\n1,539\n1,120\n24,374\n\u2014\n27,033\nFuture net cash flows\n240\n\u2014\n1,883\n2,940\n55,321\n\u2014\n60,384\nEffect of discounting net cash flows at 10%\n76\n\u2014\n672\n1,635\n20,135\n\u2014\n22,518\nDiscounted future net cash flows\n164\n\n\u2014\n\n1,211\n\n1,305\n\n35,186\n\n\u2014\n\n37,866\n\nTotal consolidated and equity interests in standardized measure of discounted future net cash flows\n43,781\n\n35,610\n\n1,890\n\n6,357\n\n52,122\n\n14,506\n\n154,266\n\n(1)\n Includes discounted future net cash flows attributable to noncontrolling interests in ExxonMobil consolidated subsidiaries of $3,055 million in 2023.\n125\nTable of Contents\nFinancial Table of Contents\nStandardized Measure of Discounted\nFuture Cash Flows (continued)\n(millions of dollars)\nUnited States\nCanada/Other Americas\n(1)\nEurope\nAfrica\nAsia\nAustralia/ Oceania\nTotal\n\nAs of December 31, 2024\nConsolidated Subsidiaries\n\nFuture cash inflows from sales of oil and gas\n312,279\n236,954\n4,339\n15,493\n250,850\n54,247\n874,162\nFuture production costs\n109,915\n96,932\n1,583\n3,167\n60,404\n12,599\n284,600\nFuture development costs\n48,781\n37,253\n1,921\n3,675\n17,608\n6,083\n115,321\nFuture income tax expenses\n21,728\n21,738\n644\n2,801\n129,925\n9,846\n186,682\nFuture net cash flows\n131,855\n81,031\n191\n5,850\n42,913\n25,719\n287,559\nEffect of discounting net cash flows at 10%\n64,731\n34,232\n(387)\n1,419\n23,172\n12,898\n136,065\nDiscounted future net cash flows\n67,124\n\n46,799\n\n578\n\n4,431\n\n19,741\n\n12,821\n\n151,494\n\nEquity Companies\nFuture cash inflows from sales of oil and gas\n614\n\u2014\n3,557\n5,685\n138,978\n\u2014\n148,834\nFuture production costs\n379\n\u2014\n766\n534\n66,969\n\u2014\n68,648\nFuture development costs\n69\n\u2014\n709\n55\n4,243\n\u2014\n5,076\nFuture income tax expenses\n\u2014\n\u2014\n1,106\n1,431\n19,566\n\u2014\n22,103\nFuture net cash flows\n166\n\u2014\n976\n3,665\n48,200\n\u2014\n53,007\nEffect of discounting net cash flows at 10%\n42\n\u2014\n298\n2,099\n16,397\n\u2014\n18,837\nDiscounted future net cash flows\n124\n\n\u2014\n\n677\n\n1,566\n\n31,803\n\n\u2014\n\n34,170\n\nTotal consolidated and equity interests in standardized measure of discounted future net cash flows\n67,248\n\n46,799\n\n1,255\n\n5,997\n\n51,544\n\n12,821\n\n185,664\n\nAs of December 31, 2025\nConsolidated Subsidiaries\n\nFuture cash inflows from sales of oil and gas\n280,283\n209,345\n3,918\n15,372\n210,088\n54,992\n773,998\nFuture production costs\n105,265\n94,251\n1,458\n3,887\n51,049\n12,502\n268,412\nFuture development costs\n57,000\n38,312\n2,287\n4,299\n16,712\n6,683\n125,293\nFuture income tax expenses\n20,341\n15,943\n345\n2,831\n106,859\n9,376\n155,695\nFuture net cash flows\n97,677\n60,839\n(172)\n4,355\n35,468\n26,431\n224,598\nEffect of discounting net cash flows at 10%\n47,868\n22,760\n(523)\n1,150\n19,436\n14,066\n104,757\nDiscounted future net cash flows\n49,809\n\n38,079\n\n351\n\n3,205\n\n16,032\n\n12,365\n\n119,841\n\nEquity Companies\nFuture cash inflows from sales of oil and gas\n490\n\u2014\n3,537\n3,563\n114,161\n\u2014\n121,751\nFuture production costs\n386\n\u2014\n736\n499\n55,221\n\u2014\n56,842\nFuture development costs\n59\n\u2014\n623\n55\n3,285\n\u2014\n4,022\nFuture income tax expenses\n\u2014\n\u2014\n1,031\n806\n15,740\n\u2014\n17,577\nFuture net cash flows\n45\n\u2014\n1,147\n2,203\n39,915\n\u2014\n43,310\nEffect of discounting net cash flows at 10%\n2\n\u2014\n280\n1,220\n12,520\n\u2014\n14,022\nDiscounted future net cash flows\n43\n\n\u2014\n\n867\n\n983\n\n27,395\n\n\u2014\n\n29,288\n\nTotal consolidated and equity interests in standardized measure of discounted future net cash flows\n49,852\n\n38,079\n\n1,218\n\n4,188\n\n43,427\n\n12,365\n\n149,129\n\n(1)\n Includes discounted future net cash flows attributable to noncontrolling interests in ExxonMobil consolidated subsidiaries of $4,466 million in 2024 and $3,132 million in 2025.\n126\nTable of Contents\nFinancial Table of Contents\nChange in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves\nConsolidated and Equity Interests\n(millions of dollars)\n2023\nConsolidated Subsidiaries\nShare of Equity Method Investees\nTotal Consolidated and Equity Interests\n\nDiscounted future net cash flows as of December 31, 2022\n189,609\n69,247\n258,856\nValue of reserves added during the year due to extensions, discoveries, improved recovery and net purchases/sales less related costs\n5,658\n(1,701)\n3,957\nChanges in value of previous-year reserves due to:\nSales and transfers of oil and gas produced during the year, net of production (lifting) costs\n(43,836)\n(10,218)\n(54,054)\nDevelopment costs incurred during the year\n15,343\n1,502\n16,845\nNet change in prices, lifting and development costs\n(120,924)\n(51,923)\n(172,847)\nRevisions of previous reserves estimates\n4,953\n5,096\n10,049\nAccretion of discount\n23,006\n8,962\n31,968\nNet change in income taxes\n42,591\n16,901\n59,492\nTotal change in the standardized measure during the year\n(73,209)\n(31,381)\n(104,590)\nDiscounted future net cash flows as of December 31, 2023\n116,400\n37,866\n154,266\nConsolidated and Equity Interests\n(millions of dollars)\n2024\nConsolidated Subsidiaries\nShare of Equity Method Investees\nTotal Consolidated and Equity Interests\n\nDiscounted future net cash flows as of December 31, 2023\n116,400\n37,866\n154,266\nValue of reserves added during the year due to extensions, discoveries, improved recovery and net purchases/sales less related costs\n42,405\n\u2014\n42,405\nChanges in value of previous-year reserves due to:\nSales and transfers of oil and gas produced during the year, net of production (lifting) costs\n(51,236)\n(8,268)\n(59,504)\nDevelopment costs incurred during the year\n18,924\n1,135\n20,059\nNet change in prices, lifting and development costs\n(4,549)\n(5,811)\n(10,360)\nRevisions of previous reserves estimates\n20,779\n1,690\n22,469\nAccretion of discount\n15,232\n4,853\n20,085\nNet change in income taxes\n(6,461)\n2,705\n(3,756)\nTotal change in the standardized measure during the year\n35,094\n\n(3,696)\n31,398\n\nDiscounted future net cash flows as of December 31, 2024\n151,494\n34,170\n185,664\nConsolidated and Equity Interests\n(millions of dollars)\n2025\nConsolidated Subsidiaries\nShare of Equity Method Investees\nTotal Consolidated and Equity Interests\n\nDiscounted future net cash flows as of December 31, 2024\n151,494\n34,170\n185,664\nValue of reserves added during the year due to extensions, discoveries, improved recovery and net purchases/sales less related costs\n12,392\n216\n12,608\nChanges in value of previous-year reserves due to:\nSales and transfers of oil and gas produced during the year, net of production (lifting) costs\n(48,105)\n(7,828)\n(55,933)\nDevelopment costs incurred during the year\n18,361\n811\n19,172\nNet change in prices, lifting and development costs\n(61,606)\n(5,319)\n(66,925)\nRevisions of previous reserves estimates\n14,666\n636\n15,302\nAccretion of discount\n18,328\n4,207\n22,535\nNet change in income taxes\n14,311\n2,395\n16,706\nTotal change in the standardized measure during the year\n(31,653)\n(4,882)\n(36,535)\nDiscounted future net cash flows as of December 31, 2025\n119,841\n29,288\n149,129\n127\nTable of Contents\nFinancial Table of Contents\nINDEX TO EXHIBITS\nExhibit\nDescription\n3(i)\nRestated Certificate of Incorporation, as restated November 30, 1999, and as further amended effective June 20, 2001 (incorporated by reference to Exhibit 3(i) to the Registrant\u2019s Annual Report on Form 10-K for 2015).\n3(ii)\nBy-Laws, as amended effective October 25, 2022 (incorporated by reference to Exhibit 3(ii) to the Registrant\u2019s Report on Form 8-K of October 31, 2022).\n4(vi)\nDescription of ExxonMobil Capital Stock (incorporated by reference to Exhibit 4(vi) to the Registrant's Annual Report on Form 10-K for 2019).\n10(iii)(a.1)\n2003 Incentive Program, as approved by shareholders May 28, 2003 (incorporated by reference to Exhibit 10(iii)(a.1) to the Registrant\u2019s Annual Report on Form 10-K for 2017).*\n10(iii)(a.2)\nExtended Provisions for Restricted Stock Agreements (incorporated by reference to Exhibit 10(iii)(a.2) to the Registrant\u2019s Annual Report on Form 10-K for 2016).*\n10(iii)(a.3)\nExtended Provisions for Restricted Stock Unit Agreements \u2013 Settlement in Shares.*\n10(iii)(b.1)\nShort Term Incentive Program, as amended (incorporated by reference to Exhibit 10(iii)(b.1) to the Registrant\u2019s Annual Report on Form 10-K for 2023).*\n10(iii)(b.2)\nEarnings Bonus Unit instrument (incorporated by reference to Exhibit 10(iii)(b.2) to the Registrant's Annual Report on Form 10-K for 2019).*\n10(iii)(b.3)\nAmendment of 2018 and 2019 Earnings Bonus Unit instruments, effective November 23, 2021 (incorporated by reference to Exhibit 99.1 to the Registrant's Report on Form 8-K of November 30, 2021).*\n10(iii)(b.4)\nPioneer Natural Resources Company Second Amended and Restated 2006 Long-Term Incentive Plan (incorporated by reference to Exhibit 10(iii)(b.4) to the Registrant\u2019s Report on Form 10-Q for the quarter ended June 30, 2024).*\n10(iii)(c.1)\nExxonMobil Supplemental Savings Plan (incorporated by reference to Exhibit 10(iii)(c.1) to the Registrant's Annual Report on Form 10-K for 2022).*\n10(iii)(c.2)\nExxonMobil Supplemental Pension Plan (incorporated by reference to Exhibit 10(iii)(c.2) to the Registrant's Annual Report on Form 10-K for 2022).*\n10(iii)(c.3)\nExxonMobil Additional Payments Plan (incorporated by reference to Exhibit 10(iii)(c.3) to the Registrant\u2019s Annual Report on Form 10-K for 2023).*\n10(iii)(d)\nExxonMobil Executive Life Insurance and Death Benefit Plan (incorporated by reference to Exhibit 10(iii)(d) to the Registrant\u2019s Annual Report on Form 10-K for 2016).*\n10(iii)(f.1)\n2004 Non-Employee Director Restricted Stock Plan (incorporated by reference to Exhibit 10(iii)(f.1) to the Registrant\u2019s Annual Report on Form 10-K for 2018).*\n10(iii)(f.2)\nStanding resolution for non-employee director restricted grants dated September 26, 2007 (incorporated by reference to Exhibit 10(iii)(f.2) to the Registrant\u2019s Annual Report on Form 10-K for 2016).*\n10(iii)(f.3)\nForm of restricted stock grant letter for non-employee directors.*\n10(iii)(f.4)\nStanding resolution for non-employee director cash fees dated November 25, 2025, as amended effective January 1, 2026.*\n10(iii)(g)\nAircraft Time Share Agreement dated as of August 29, 2023, between Exxon Mobil Corporation and Darren W. Woods (incorporated by reference to Exhibit 10(iii)(g) to the Registrant\u2019s Report on Form 10-Q for the quarter ended October 31, 2023).*\n14\nCode of Ethics and Business Conduct.\n19\nInsider Trading Policy (incorporated by reference to Exhibit 19 to the Registrant\u2019s Annual Report on Form 10-K for 2024).\n21\nSubsidiaries of the registrant.\n23\nConsent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.\n31.1\nCertification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive Officer.\n31.2\nCertification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Financial Officer.\n31.3\nCertification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Accounting Officer.\n32.1\nSection 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Executive Officer.\n32.2\nSection 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Financial Officer.\n32.3\nSection 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Accounting Officer.\n97\nPolicy Relating to Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97 to the Registrant\u2019s Annual Report on Form 10-K for 2023).\n101\nInteractive data files (formatted as Inline XBRL).\n104\nCover page interactive data file (formatted as Inline XBRL and contained in Exhibit 101).\n* Management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a)(3) of this Annual Report on Form 10-K.\nThe registrant has not filed with this report copies of the instruments defining the rights of holders of long-term debt of the registrant and its subsidiaries for which consolidated or unconsolidated financial statements are required to be filed. The registrant agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.\n128\nSIGNATURES\nPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.\n\nEXXON MOBIL CORPORATION\n\nBy:\n/s/ DARREN W. WOODS\nDated February\u00a018, 2026\n\nDarren W. Woods, Chairman of the Board\nPOWER OF ATTORNEY\nEach person whose signature appears below constitutes and appoints Matthew R. Rasmussen, Wendi J. Powell, and Antony E. Peters and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.\n\nPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on February\u00a018, 2026.\nPrincipal Executive Officer\nDirectors\n/s/ DARREN W. WOODS\n/s/ MICHAEL J. ANGELAKIS\n/s/ JOSEPH L. HOOLEY\nDarren W. Woods, Chairman of the Board\nMichael J. Angelakis\nJoseph L. Hooley\n/s/ ANGELA F. BRALY\n/s/ STEVEN A. KANDARIAN\nPrincipal Financial Officer\nAngela F. Braly\nSteven A. Kandarian\n\n/s/ NEIL A. HANSEN\n/s/ MARIA S. DREYFUS\n/s/ ALEXANDER A. KARSNER\nNeil A. Hansen, Senior Vice President and Chief Financial Officer\nMaria S. Dreyfus\nAlexander A. Karsner\n\n/s/ GREG C. GARLAND\n/s/ LAWRENCE W. KELLNER\nPrincipal Accounting Officer\nGreg C. Garland\nLawrence W. Kellner\n/s/ LEN M. FOX\n/s/ JOHN D. HARRIS II\n/s/ DINA POWELL MCCORMICK\nLen M. Fox, Vice President,\nController and Tax\nJohn D. Harris II\nDina Powell McCormick\n/s/ KAISA H. HIETALA\n/s/ JEFFREY W. UBBEN\nKaisa H. Hietala\nJeffrey W. Ubben\n129\n", "ground_truth": {"cover": {"company_name": "EXXON MOBIL CORP", "cik": "0000034088", "ticker": "XOM", "form_type": "10-K", "fiscal_year_end": "2025-12-31", "filing_date": "2026-02-18"}, "financials": {"currency": "USD", "fiscal_year": 2025, "revenue": 332238000000.0, "net_income": 28844000000.0, "eps_basic": 6.7, "eps_diluted": 6.7, "cash_and_equivalents": 10681000000.0, "total_assets": 448980000000.0, "total_equity": 266626000000.0, "total_debt": 18555000000.0, "operating_cash_flow": 51970000000.0}, "top_risk_factors": []}}