Inventories

Inventories include materials, labor and overhead and are stated at the lower of cost or net realizable value. Cost is

determined by the first-in, first-out method. The Company reviews inventory quantities on hand and records reserves for

obsolescence based on historical selling prices, current market conditions and forecasted product demand, to reduce

inventory to net realizable value.

Property and Equipment

Property and equipment, carried at cost, is depreciated using the straight-line method over the estimated useful lives of

the assets. The cost and related accumulated depreciation of assets sold or retired is removed from the accounts with any

resulting gain or loss included in net loss in the consolidated statement of operations. Maintenance and repairs are

charged to expense as incurred. Major renewals and betterments that extend useful life are capitalized.

Leasehold improvements are depreciated over the shorter of the estimated useful lives of the assets or the contractual

term of the lease, with consideration of lease renewal options if renewal appears probable.

Estimated useful lives of the Company’s property and equipment by major asset category are as follows:


Leasehold improvements	5 to 15 years
Furniture and equipment	3 to 15 years
Production machinery	3 to 7 years
Computer equipment and software	3 to 12 years

Goodwill and Intangible Assets, Net

Goodwill is the difference between the purchase price of a company and the fair market value of the acquired company’s

net identifiable assets. The Company’s intangible assets include developed technologies and trade names/trademarks.

Definite-lived intangible assets are being amortized using the straight-line method over their estimated lives, ranging from

8-10 years.

Asset Impairment Charges

Long-lived Assets and Definite-lived Intangible Assets

The Company reviews its long-lived assets and definite-lived intangible assets for impairment whenever events or

changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable.

When evaluating long-lived assets for potential impairment, the Company first compares the carrying value of the asset to

the estimated future cash flows (undiscounted and without interest charges plus proceeds expected from disposition, if

any). If the estimated undiscounted cash flows are less than the carrying value of the asset, the Company calculates an

impairment loss. The impairment loss calculation compares the carrying value of the asset to the asset’s estimated fair

value. When the Company recognizes an impairment loss, the carrying amount of the asset is reduced to estimated fair

value based on discounted cash flows, quoted market prices or other valuation techniques. Assets to be disposed of are

reported at the lower of the carrying amount of the asset or fair value less costs to sell. The Company reviews retail stores

by asset group, defined by designated market areas, for potential impairment based on historical cash flows, lease

termination provisions and expected future operating results. If the Company recognizes an impairment loss for a

depreciable long-lived asset or asset group, the adjusted carrying amount becomes its new cost basis and will be

depreciated (amortized) over the remaining useful life.

Goodwill and Indefinite-lived Intangible Assets

Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment annually, or when there are

indicators of impairment, using a fair value approach. The goodwill impairment test involves a comparison of the fair value

of a reporting unit with its carrying value. Fair value is determined using a market-based approach utilizing widely

accepted valuation techniques, including quoted market prices and the Company’s market capitalization. The Company

has only one reporting unit, which has a negative carrying value. The reporting unit had a goodwill balance of $64 million

at January 3, 2026 and December 28, 2024. Indefinite-lived intangible assets are assessed for impairment by comparing

the carrying value of an asset with its fair value. If the carrying value exceeds fair value, an impairment loss is recognized

in an amount equal to the excess. Based on the Company’s 2025 assessments, it determined there was no impairment.

Other Investments

The Company made a payment of $3 million during the second quarter of 2025 to secure contractual rights from a

strategic product-development partner. This payment was included in prepaid expenses in the Company’s consolidated

balance sheet and as an investing activity in the Company’s consolidated statement of cash flows. In the third quarter of

2025, the Company made the decision to end business operations with the strategic-development partner. In connection

with this decision, the Company evaluated the recoverability of assets associated with those operations and determined

that the carrying amounts of those assets were unlikely to be recoverable and recorded an impairment charge of

$16 million, which is included in restructuring costs in the consolidated statements of operations for the year ended

January 3, 2026.

Warranty Liabilities

The Company provides a standard limited warranty on most of the products it sells. The estimated warranty costs, which

are expensed at the time of sale and included in cost of sales, are based on historical trends and warranty claim rates

incurred by the Company and are adjusted for any current trends as appropriate. The majority of the Company’s warranty

claims are incurred within the first year. The Company’s warranty liability contains uncertainties because its warranty

obligations cover an extended period of time and require management to make estimates for claim rates and the projected

cost of materials and freight associated with sending replacement parts to customers. The Company regularly assesses

and adjusts the estimate of accrued warranty claims by updating claims rates for actual trends and projected claim costs.

The warranty liabilities are included in other current liabilities and other non-current liabilities in the consolidated balance

sheet.

The Company classifies as non-current those estimated warranty costs expected to be paid out in greater than one year.

The activity in the accrued warranty liabilities account was as follows (in thousands):


	2025	2024	2023
Balance at beginning of period	$6,947	$8,503	$8,997
Additions charged to costs and expenses for current-year sales	10,171	13,821	15,939
Deductions from reserves	(10,834)	(14,657)	(16,438)
Change in liabilities for pre-existing warranties during the current year, including expirations	(628)	(720)	5
Balance at end of period	$5,656	$6,947	$8,503

The Company also offers the option for customers to purchase an extended warranty contract through an unrelated third

party. The extended warranty extends parts and labor coverage on their purchase. Extended warranty revenue and

premium remitted to the underwriter are recognized at the time of delivery because the third party is the primary obligor

under these contracts.

Fair Value Measurements

Fair value measurements are reported in one of three levels based on the lowest level of significant input used:

•Level 1 – observable inputs such as quoted prices in active markets;

•Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

•Level 3 – unobservable inputs in which there is little or no market data, which require the reporting entity to develop its

own assumptions.

The Company generally estimates fair value of long-lived assets, including its retail stores, using the income approach,

which the Company based on estimated future cash flows (discounted and with interest charges). The inputs used to

determine fair value relate primarily to future assumptions regarding sales volumes, gross profit rates, retail store

operating expenses and applicable probability weightings regarding future alternative uses. These inputs are categorized

as Level 3 inputs under the fair value measurements guidance. The inputs used represent management’s assumptions

about what information market participants would use in pricing the assets and are based upon the best information

available at the balance sheet date.

Non-Recurring Fair Value Measurements

In 2025, the Company initiated cost savings and operational efficiencies to reduce operating expenses and accelerate

gross margin initiatives. As a result the Company recorded $50.7 million of restructuring costs in 2025. Refer to Note 11,

Restructuring Costs for additional information. In the $50.7 million, we recorded $30.9 million of long-lived asset

impairment charges primarily related to lease right-of-use assets, property and equipment and strategic partner long-lived

assets. The restructuring costs are included on the Company’s consolidated statements of operation. All non-recurring fair

value remeasurements discussed above were based on significant unobservable inputs (Level 3). The remaining carrying

value of net long-lived assets subject to impairment approximates fair value and was immaterial as of January 3, 2026.

Shareholders’ Deficit

Dividends

Under the Company’s Amended and Restated Credit and Security Agreement, dated as of February 14, 2018 (as

amended, supplemented or otherwise modified from time to time), among U.S. Bank National Association, as

Administrative Agent, Swing Line Lender and Issuing Lender, and certain other financial institutions party thereto (the

“Credit Agreement”), the Company is restricted from paying cash dividends, subject to narrow exceptions. However, Sleep

Number has not historically paid, and has no current plans to pay, cash dividends on the Company’s common stock.

Share Repurchases

At January 3, 2026, there was $348 million remaining authorization under the $600 million board-approved share

repurchase program. There is no expiration date governing the period over which the Company can repurchase shares.

Any repurchased shares are constructively retired and returned to an unissued status. The cost of stock repurchases is

first charged to additional paid-in-capital. Once additional paid-in capital is reduced to zero, any additional amounts are

charged to accumulated deficit.

Revenue Recognition

The Company recognizes revenue when control of the promised goods or services is transferred to its customers in an

amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. Revenue

recognized excludes sales taxes. Amounts billed to customers for delivery and setup are included in net sales. For most

products, the Company receives payment before or promptly after the products or services are delivered to the customer.

The Company accepts sales returns of most products during a 100-night trial period. Accrued sales returns represent a

refund liability for the amount of consideration that the Company does not expect to be entitled to because it will be

refunded to customers. The refund liability estimate is based on historical return rates and is adjusted for any current

trends as appropriate. Each reporting period, the Company remeasures the liability to reflect changes in the estimate, with

a corresponding adjustment to net sales.

Sleep Number beds sold with SleepIQ technology contain multiple performance obligations including the bed, and

SleepIQ hardware and software. The Company analyzes its multiple performance obligations to determine whether they

are distinct and can be separated or whether they must be accounted for as a single performance obligation. The

Company determined that beds sold with the SleepIQ technology have two performance obligations consisting of: (i) the

bed; and (ii) SleepIQ hardware and software. SleepIQ hardware and software are not separable as the hardware and

related software are not sold separately and the software is integral to the hardware’s functionality. Prior to the fourth

quarter of fiscal 2025, the Company determined the transaction price for multiple performance obligations based on their

relative standalone selling prices. In the fourth quarter of fiscal 2025, the Company determined the transaction price for

multiple performance obligations based on a cost plus margin approach. The Company determined the cost plus margin

approach was the most reasonable approach based on the significance of the SleepIQ technology. The Company

determined an observable price is not available for SleepIQ. The Company estimated the standalone selling price by (1)

identifying the expected costs of providing the good or service and (2) adding an appropriate margin that reflects market

assumptions for similar offerings. The performance obligation related to the bed is satisfied at a point in time. The

performance obligation related to SleepIQ technology is satisfied over time based on the ongoing access and usage by

the customer of software essential to the functionality of SleepIQ technology. The deferred revenue and costs related to

SleepIQ technology are recognized on a straight-line basis over the estimated period of benefit to the customer of

4.5 years because its inputs are generally expended evenly throughout the performance period.

See Note 9, Revenue Recognition, for additional information on revenue recognition and sales returns.

Cost of Sales, Sales and Marketing, General and Administrative (G&A) and Research & Development (R&D) Expenses

The following tables summarize the primary costs classified in each major expense category (the classification of which

may vary within the Company’s industry):


	Cost of Sales		Sales & Marketing
•	Costs associated with purchasing, manufacturing, shipping, handling and delivering the Company’s products to its retail stores and customers, including payroll and benefits;	•	Advertising, marketing and media production;
		•	Marketing and selling materials such as brochures, videos, websites, customer mailings and in-store signage;
•	Physical inventory losses, scrap and obsolescence;	•	Payroll and benefits for sales and customer service staff;
•	Purchase commitment obsolescence;	•	Store occupancy costs;
•	Related occupancy and depreciation expenses;	•	Store depreciation expense;
•	Costs associated with returns and exchanges; and	•	Credit card processing fees; and
•	Estimated costs to service customer warranty claims.	•	Promotional financing costs.

	G&A		R&D(1)
•	Payroll and benefit costs for corporate employees, including information technology, legal, human resources, finance, sales and marketing administration, investor relations and risk management;	•	Internal labor and benefits related to research and development activities;
		•	Outside consulting services related to research and development activities; and
•	Occupancy costs of corporate facilities;	•	Testing equipment related to research and development
•	Depreciation related to corporate assets;		___________________________ (1) Costs incurred in connection with R&D are charged to expense as incurred.
•	Information hardware, software and maintenance;
•	Insurance;
•	Investor relations costs; and
•	Other overhead costs.

Leases

The Company determines if an arrangement is a lease at inception. Right-of-use (ROU) assets and operating lease

liabilities are recognized at the lease commencement date based on the estimated present value of future lease payments

over the lease term. The Company elected the option to not separate lease and non-lease components for all of its

leases. Most of the Company’s leases do not provide an implicit interest rate nor is the rate available to it from its lessors.

As an alternative, the Company uses its estimated incremental borrowing rate, which is derived from information available

at the lease commencement date, including publicly available data, in determining the present value of lease payments.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet as an ROU asset or

operating lease liability. The Company recognizes operating lease costs for these short-term leases, primarily small

equipment leases, on a straight-line basis over the lease term. At January 3, 2026, the Company’s finance lease ROU

assets and associated lease liabilities were not significant.

See Note 7, Leases, for further information regarding the Company’s operating leases and Note 11, Restructuring Costs,

for further information regarding the Company’s cost savings for right-of-use assets.

Pre-opening Costs

Costs associated with the start-up and promotion of new retail store openings are expensed as incurred.

Advertising Costs

The Company incurs advertising costs associated with print, digital and broadcast advertisements. Advertising costs are

charged to expense when the ad first runs. Advertising expense was $197 million, $248 million and $272 million in 2025,

2024 and 2023, respectively and is included in sales and marketing expenses on the consolidated statement of

operations. Advertising costs deferred and included in prepaid expenses in the consolidated balance sheet were not

significant at January 3, 2026 or December 28, 2024, respectively.

Insurance

The Company is self-insured for certain losses related to health and workers’ compensation claims, although the

Company obtains third-party insurance coverage to limit exposure to these claims. The Company estimates its self-

insured liabilities using a number of factors including historical claims experience and analysis of incurred but not reported

claims. The Company’s self-insurance liability was $10 million and $11 million at January 3, 2026 and December 28, 2024,

respectively. At January 3, 2026 and December 28, 2024, $5 million and $7 million, respectively, were included in current

liabilities: compensation and benefits in the consolidated balance sheet and $5 million and $4 million, respectively, were

included in other non-current liabilities in the consolidated balance sheet.

Software Capitalization

For software developed or obtained for internal use, the Company capitalizes direct external costs associated with

developing or obtaining internal-use software. In addition, the Company capitalizes certain payroll and payroll-related

costs for employees who are directly involved with the development of such applications. Capitalized costs related to

internal-use software under development are treated as construction-in-progress until the program, feature or functionality

is ready for its intended use, at which time depreciation commences. The Company expenses any data conversion or

training costs as incurred. Capitalized software costs are included in property and equipment, net in the consolidated

balance sheet.

The Company capitalizes costs incurred with the implementation of a cloud computing arrangement that is a service

contract, consistent with its policy for software developed or obtained for internal use. The capitalized implementation

costs of cloud computing arrangements are expensed over the term of the cloud computing arrangement in the same line

item in the statement of operations as the associated hosting fees. Capitalized costs incurred with the implementation of a

cloud computing arrangement are included in prepaid expenses and other non-current assets in the Company’s

consolidated balance sheet, and in operating cash flows in its consolidated statement of cash flows.

Stock-based Compensation

The Company compensates officers, directors and key employees with stock-based compensation under stock plans

approved by its shareholders and administered under the supervision of the Company’s Board of Directors (Board). At

January 3, 2026, a total of 3.4 million shares were available for future grant. These plans include non-qualified stock

options and stock awards.

The Company records stock-based compensation expense based on the award’s fair value at the grant date and the

awards that are expected to vest. The Company recognizes stock-based compensation expense over the period during

which an employee is required to provide services in exchange for the award. The Company reduces compensation

expense by estimated forfeitures. Forfeitures are estimated using historical experience and projected employee turnover.

The Company includes, as part of cash flows from operating activities, the benefit of tax deductions in excess of

recognized stock-based compensation expense. In addition, excess tax benefits or deficiencies are recorded as discrete

adjustments to income tax expense.

Stock Options

Stock option awards are granted at exercise prices equal to the closing price of the Company’s stock on the grant date.

Generally, options vest proportionally over three years and expire after 10 years. Compensation expense is recognized

ratably over the vesting period.

The Company determines the fair value of stock options granted and the resulting compensation expense at the date-of-

grant using the Black-Scholes-Merton option-pricing model. Descriptions of significant assumptions used to estimate the

expected volatility, risk-free interest rate and expected term are as follows:

Expected Volatility – expected volatility was determined based on implied volatility of the Company’s traded options

and historical volatility of the Company’s stock price.

Risk-Free Interest Rate – the risk-free interest rate was based on the implied yield available on U.S. Treasury zero-

coupon issues at the date of grant with a term equal to the expected term.

Expected Term – expected term represents the period that the Company’s stock-based awards are expected to be

outstanding and was determined based on historical experience and anticipated future exercise patterns, giving

consideration to the contractual terms of unexercised stock-based awards.

Stock Awards

The Company issues stock awards to certain employees in conjunction with its stock-based compensation plan. The stock

awards generally vest over three years based on continued employment (time-based). Compensation expense related to

stock awards, except for stock awards with a market condition, is determined on the grant date based on the publicly

quoted closing price of the Company’s common stock and is charged to earnings on a straight-line basis over the vesting

period. Stock awards with a market condition are valued using a Monte Carlo simulation model. The significant

assumptions used to estimate the expected volatility and risk-free interest rate are similar to those described above in

Stock Options.

Certain time-based stock awards have a performance condition (performance-based). The final number of shares earned

for performance-based stock awards and the related compensation expense is adjusted up or down to the extent the

performance target is met. The actual number of shares that will ultimately be awarded range from 0% - 200% of the

targeted amount for the 2025, 2024 and 2023 awards. The Company evaluates the likelihood of meeting the performance

targets at each reporting period and adjusts compensation expense, on a cumulative basis, based on the expected

achievement of each of the performance targets. For performance-based stock awards granted in 2025, 2024 and 2023,

the performance targets are based on growth in net sales and in operating profit, and the performance periods are fiscal

2025 through 2027, 2024 through 2026 and fiscal 2023 through 2025, respectively.

See Note 8, Shareholders’ Deficit, for additional information on stock-based compensation.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to temporary

differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax

bases. Deferred tax assets and liabilities 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 of a change in tax rates on

deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. A valuation

allowance is established for any portion of deferred tax assets that are not considered more likely than not to be realized.

The Company evaluates all available positive and negative evidence, including its forecast of future taxable income, to

assess the need for a valuation allowance on its deferred tax assets.

The Company records a liability for unrecognized tax benefits from uncertain tax positions taken, or expected to be taken,

in the Company’s tax returns. The Company follows a two-step approach to recognizing and measuring uncertain tax

positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates it is

more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation

processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of

being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax

positions and tax benefits, which may require periodic adjustments, and may not accurately forecast actual outcomes.

The Company classifies net interest and penalties related to income taxes as a component of income tax expense in its

consolidated statement of operations.

Refer to Note 12, Income Taxes for further information on the Company’s income taxes.

Net Loss Per Share

The Company calculates basic net loss per share by dividing net loss by the weighted-average number of common shares

outstanding during the period. It calculates diluted net loss per share based on the weighted-average number of common

shares outstanding adjusted by the number of potentially dilutive common shares as determined by the treasury stock

method. Potentially dilutive shares consist of stock options and stock awards.

Sources of Supply

The Company currently obtains materials and components used to produce its beds from outside sources. As a result, the

Company is dependent upon suppliers that in some instances, are its sole source of supply, or supply the vast majority of

the particular component or material. The Company continuously evaluates opportunities to dual-source key components

and materials. The failure of one or more of the Company’s suppliers to provide it with materials or components on a

timely basis could significantly impact the consolidated results of operations and net loss per share. While the Company

believes that these materials and components, or suitable replacements, could be obtained from other sources in the

event of a disruption or loss of supply, it may not be able to find alternative sources of supply or alternative sources of

supply on comparable terms and an unexpected loss of supply over a short period of time may not allow the Company to

replace these sources in the ordinary course of business.

Going Concern

The Company’s financial statements have been prepared under the assumption that the Company will continue as a going

concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the

foreseeable future.

Historically, the Company has relied principally on liquidity generated from operating activities to fund the Company’s day-

to-day operations and service its debt. Over the past three years, the Company has a history of net losses. For 2025, net

loss was $132 million. Although the Company continues to pursue its turnaround strategy “Sleep Number Shifts,” centered

on product, marketing and distribution, as well as ongoing cost savings and operating efficiencies, to reignite growth and

increase financial resilience, the timing and realization of its turnaround strategy cannot be guaranteed to ensure sufficient

cash flow is generated to provide liquidity to meet the Company’s obligations. In addition, the Company anticipates that it

will not remain in compliance with the financial covenants of its Credit Agreement for the next twelve months. These

conditions and events raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plan to address the substantial doubt about the Company’s ability to continue as a going concern, as

described above, includes the following actions:

•execute the Company’s turnaround strategy centered on product, marketing and distribution with ongoing cost

savings and operating efficiencies to reignite growth and increase financial resilience;

•engage in negotiations with the lenders in its Credit Agreement with the goal of amending or waiving financial

covenants and certain other provisions of its credit facility; and

•engaged financial advisors to assist in negotiating with the lenders and identifying and securing additional capital

options, alternative financing arrangements, strategic alternatives, or other comprehensive solutions to address

the Company’s capital structure and leverage needs to return to growth and create long-term value.

There can be no assurance of the Company’s ability to realize these plans. As a result, the Company has concluded that

management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern for at

least one year from the date of issuance of these financial statements.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of

recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this

uncertainty.

Recently Adopted and Recently Issued Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In the fourth quarter of 2025, the Company prospectively adopted the annual disclosure requirements of Accounting

Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The

amendments in this ASU require a public business entity to disclose a tabular tax rate reconciliation, using both

percentages and currency, with specific categories. A public business entity is also required to provide a qualitative

description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax

category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also

disaggregated by individual jurisdictions. The Company has adopted ASU 2023-09 on a prospective basis, which resulted

in additional disclosures, but did not have any other impact on its consolidated financial statements. See Note 12, Income

Taxes, for applicable income tax-related disclosures required by this guidance.

Accounting Pronouncements Issued But Not Yet Effective

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense

Disaggregation Disclosures (Subtopic 220-40)", which requires public business entities to disclose in the notes to the

financial statements more detailed information about the types of expenses included in certain expense captions in the

consolidated financial statements, including purchases of inventory, employee compensation, and depreciation and

amortization. The amendments are effective for the Company beginning with the 2027 annual period and in interim

periods beginning in 2028. Early adoption is permitted. The ASU may be adopted prospectively or retrospectively. The

Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and related

disclosures.

In July 2025, the FASB issued ASU 2025-05, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit

Losses for Accounts Receivable and Contract Assets”, which provides a practical expedient related to the estimation of

expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for

under Topic 606, including those assets acquired in a business combination. The practical expedient permits an entity to

assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts

receivable and current contract assets. This guidance is effective for the Company for its fiscal year and all interim periods

beginning January 4, 2026 on a prospective basis. Early adoption is permitted. The Company is currently evaluating the

impact of the adoption of this guidance on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting - Narrow Scope Improvements (Topic 270), which

clarifies the guidance to improve the consistency of interim financial reporting. The guidance provides a comprehensive

list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end

of the last annual reporting period that have a material impact on the entity. The guidance is effective for the Company for

its fiscal year and all interim periods beginning with the 2027 annual period and in interim periods beginning in 2028. Early

adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated

financial statements.