What changed in this filing

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Item 1. Financial Statements

2024-04-19 compared with 2024-01-23 · 58 added, 58 removed, 432 unchanged (21% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF EARNINGS

Three Months Ended December 31 Six Months Ended December 31

Three Months Ended March 31 Nine Months Ended March 31

Amounts in millions except per share amounts 2024 2023 2024 2023

17 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended December 31 Six Months Ended December 31

Three Months Ended March 31 Nine Months Ended March 31

Amounts in millions 2024 2023 2024 2023

2 unchanged sentences

Foreign currency translation ( 211 ) 259 ( 128 ) ( 74 )

Unrealized losses on investment securities ( 1 ) ( 1 ) ( 2 ) ( 3 )

Unrealized gains/(losses) on investment securities — 1 ( 2 ) ( 2 )

Unrealized gains/(losses) on defined benefit postretirement plans 7 ( 19 ) ( 23 ) ( 8 )

7 unchanged sentences

CONSOLIDATED BALANCE SHEETS

Amounts in millions December 31, 2023 June 30, 2023

Amounts in millions March 31, 2024 June 30, 2023

CURRENT ASSETS

24 unchanged sentences

Preferred stock 801 819

Common stock – shares issued – December 2023 4,009.2

Common stock – shares issued – March 2024 4,009.2

June 2023 4,009.2 4,009 4,009

11 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Three Months Ended December 31, 2023

Three Months Ended March 31, 2024

Dollars in millions;

1 unchanged sentence

Shares Amount

BALANCE SEPTEMBER 30, 2023 2,356,886 $ 4,009 $ 812 $ 66,822 ($ 782 ) ($ 12,583 ) ($ 131,029 ) $ 120,443 $ 321 $ 48,014

BALANCE DECEMBER 31, 2023 2,353,021 $ 4,009 $ 809 $ 66,935 ($ 782 ) ($ 12,167 ) ($ 131,887 ) $ 121,617 $ 294 $ 48,829

Net earnings 3,754 27 3,781

9 unchanged sentences

Noncontrolling interest, net — ( 46 ) ( 46 )

BALANCE DECEMBER 31, 2023 2,353,021 $ 4,009 $ 809 $ 66,935 ($ 782 ) ($ 12,167 ) ($ 131,887 ) $ 121,617 $ 294 $ 48,829

Six Months Ended December 31, 2023

BALANCE MARCH 31, 2024 2,360,135 $ 4,009 $ 801 $ 67,395 ($ 737 ) ($ 12,370 ) ($ 132,172 ) $ 123,132 $ 275 $ 50,333

Nine Months Ended March 31, 2024

Dollars in millions;

13 unchanged sentences

Noncontrolling interest, net — ( 98 ) ( 98 )

BALANCE DECEMBER 31, 2023 2,353,021 $ 4,009 $ 809 $ 66,935 ($ 782 ) ($ 12,167 ) ($ 131,887 ) $ 121,617 $ 294 $ 48,829

BALANCE MARCH 31, 2024 2,360,135 $ 4,009 $ 801 $ 67,395 ($ 737 ) ($ 12,370 ) ($ 132,172 ) $ 123,132 $ 275 $ 50,333

See accompanying Notes to Consolidated Financial Statements.

4 The Procter & Gamble Company

Three Months Ended December 31, 2022

Three Months Ended March 31, 2023

Dollars in millions;

1 unchanged sentence

Shares Amount

BALANCE SEPTEMBER 30, 2022 2,369,697 $ 4,009 $ 834 $ 65,955 ($ 870 ) ($ 12,811 ) ($ 127,205 ) $ 114,163 $ 259 $ 44,334

BALANCE DECEMBER 31, 2022 2,359,144 $ 4,009 $ 831 $ 66,145 ($ 870 ) ($ 12,506 ) ($ 129,012 ) $ 115,858 $ 270 $ 44,725

Net earnings 3,397 27 3,424

9 unchanged sentences

Noncontrolling interest, net — ( 17 ) ( 17 )

BALANCE DECEMBER 31, 2022 2,359,144 $ 4,009 $ 831 $ 66,145 ($ 870 ) ($ 12,506 ) ($ 129,012 ) $ 115,858 $ 270 $ 44,725

Six Months Ended December 31, 2022

BALANCE MARCH 31, 2023 2,356,969 $ 4,009 $ 822 $ 66,316 ($ 821 ) ($ 12,266 ) ($ 130,002 ) $ 117,082 $ 281 $ 45,421

Nine Months Ended March 31, 2023

Dollars in millions;

13 unchanged sentences

Noncontrolling interest, net — ( 54 ) ( 54 )

BALANCE DECEMBER 31, 2022 2,359,144 $ 4,009 $ 831 $ 66,145 ($ 870 ) ($ 12,506 ) ($ 129,012 ) $ 115,858 $ 270 $ 44,725

BALANCE MARCH 31, 2023 2,356,969 $ 4,009 $ 822 $ 66,316 ($ 821 ) ($ 12,266 ) ($ 130,002 ) $ 117,082 $ 281 $ 45,421

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended December 31

Nine Months Ended March 31

Amounts in millions 2024 2023

78 unchanged sentences

% of Net sales by operating segment (1)

Three Months Ended December 31 Six Months Ended December 31

Three Months Ended March 31 Nine Months Ended March 31

2024 2023 2024 2023

2 unchanged sentences

Baby Care 9 % 10 % 9 % 10 %

Family Care 9 % 9 % 9 % 8 %

Hair Care 9 % 9 % 9 % 9 %

Skin and Personal Care 9 % 9 % 9 % 10 %

Family Care 9 % 8 % 8 % 8 %

Oral Care 9 % 8 % 8 % 8 %

Grooming 8 % 8 % 8 % 8 %

Oral Care 8 % 8 % 8 % 8 %

Personal Health Care 6 % 6 % 7 % 6 %

3 unchanged sentences

The following is a summary of reportable segment results:

Three Months Ended December 31 Six Months Ended December 31

Three Months Ended March 31 Nine Months Ended March 31

Net Sales Earnings/(Loss) Before Income Taxes Net Earnings/(Loss) Net Sales Earnings/(Loss) Before Income Taxes Net Earnings/(Loss)

19 unchanged sentences

Translation and other ( 32 ) ( 19 ) ( 24 ) ( 6 ) ( 11 ) ( 92 )

Goodwill at December 31, 2023 $ 13,987 $ 12,774 $ 7,774 $ 1,827 $ 4,554 $ 40,916

Goodwill increased from June 30, 2023, due to currency translation.

Goodwill at March 31, 2024 $ 13,856 $ 12,685 $ 7,695 $ 1,815 $ 4,518 $ 40,567

Goodwill decreased from June 30, 2023, due to currency translation.

Amounts in millions of dollars except per share amounts or as otherwise specified.

8 The Procter & Gamble Company

Identifiable intangible assets at December 31, 2023, were comprised of:

Identifiable intangible assets at March 31, 2024, were comprised of:

Gross Carrying Amount Accumulated Amortization

4 unchanged sentences

The intangible assets with indefinite lives primarily consist of brands.

The amortization expense of determinable-lived intangible assets for the three months ended December 31, 2023 and 2022, was $ 84 and $ 79 , respectively.

For the six months ended December 31, 2023 and 2022, amortization expense was $ 171 and $ 159 , respectively.

The amortization expense of determinable-lived intangible assets for the three months ended March 31, 2024 and 2023, was $ 83 and $ 82 , respectively.

For the nine months ended March 31, 2024 and 2023, amortization expense was $ 255 and $ 241 , respectively.

Goodwill and indefinite-lived intangible assets are not amortized but are tested at least annually for impairment.

5 unchanged sentences

During the three months ended December 31, 2023, we determined that the fair value of the Gillette indefinite-lived intangible asset was less than its carrying amount.

As a result, we recorded a non-cash impairment charge of $ 1.3 billion ($ 1.0 billion after tax) to reduce the carrying amount to its estimated fair value during the quarter ended December 31, 2023.

As a result, we recorded a non-cash impairment charge of $ 1.3 billion ($ 1.0 billion after tax) to reduce the carrying amount to be equivalent to the estimated fair value as of December 31, 2023.

Following the impairment charge, the carrying value of the Gillette indefinite-lived intangible asset is $ 12.8 billion.

1 unchanged sentence

dollar and the impact of a new restructuring program focused primarily in certain Enterprise Markets, including Argentina and Nigeria.

While we have concluded that no triggering event has occurred during the quarter ended March 31, 2024, the Gillette indefinite-lived intangible asset is susceptible to further impairment risk.

Adverse changes in the business or in the macroeconomic environment, including foreign currency devaluation, increasing global inflation, market contraction from an economic recession and the Russia-Ukraine War, could reduce the underlying cash flows used to estimate the fair value of the Gillette indefinite-lived intangible asset and trigger a further impairment charge.

27 unchanged sentences

Net earnings per common share were calculated as follows:

CONSOLIDATED AMOUNTS Three Months Ended December 31 Six Months Ended December 31

CONSOLIDATED AMOUNTS Three Months Ended March 31 Nine Months Ended March 31

2024 2023 2024 2023

16 unchanged sentences

(1) An overview of preferred shares can be found in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

(2) Excludes approximately 9 million and 22 million for the three months ended December 31, 2023 and 2022, respectively, and 5 million and 19 million for the six months ended December 31, 2023 and 2022, respectively, of weighted average stock options outstanding because the exercise price of these options was greater than their average market value or their effect was antidilutive.

(3) Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble.

(2) Excludes approximately 6 million and 21 million for the three months ended March 31, 2024 and 2023, respectively, and 6 million and 20 million for the nine months ended March 31, 2024 and 2023, respectively, of weighted average stock options outstanding because the exercise price of these options was greater than their average market value or their effect was antidilutive.

Share-Based Compensation and Postretirement Benefits

The following table provides a summary of our share-based compensation expense and postretirement benefit impacts:

Three Months Ended December 31 Six Months Ended December 31

Three Months Ended March 31 Nine Months Ended March 31

2024 2023 2024 2023

6 unchanged sentences

As a multinational company with diverse product offerings, we are exposed to market risks, such as changes in interest rates, currency exchange rates and commodity prices.

There have been no significant changes in our risk management policies or activities during the six months ended December 31, 2023.

There have been no significant changes in our risk management policies or activities during the nine months ended March 31, 2024.

The Company has not changed its valuation techniques used in measuring the fair value of any financial assets and liabilities during the period.

2 unchanged sentences

Also, there was no significant activity within the Level 3 assets and liabilities during the periods presented.

Except for the impairment of the Gillette indefinite-lived intangible asset discussed in Note 4, there were no significant assets or liabilities that were re-measured at fair value on a non-recurring basis during the six months ended December 31, 2023 and 2022.

Cash equivalents were $ 6.3 billion and $ 6.8 billion as of December 31, 2023 and June 30, 2023, respectively, and are classified as Level 1 within the fair value hierarchy.

Cash equivalents were $ 5.4 billion and $ 6.8 billion as of March 31, 2024 and June 30, 2023, respectively, and are classified as Level 1 within the fair value hierarchy.

The Company had no other material investments in debt or equity securities during the periods presented.

The fair value of long-term debt was $ 25.6 billion and $ 26.9 billion as of December 31, 2023 and June 30, 2023, respectively.

This includes the current portion of long-term debt instruments ($ 3.4 billion and $ 3.9 billion as of December 31, 2023 and June 30, 2023, respectively).

The fair value of long-term debt was $ 26.4 billion and $ 26.9 billion as of March 31, 2024 and June 30, 2023, respectively.

This includes the current portion of long-term debt instruments ($ 3.4 billion and $ 3.9 billion as of March 31, 2024 and June 30, 2023, respectively).

Certain long-term debt (debt designated as a fair value hedge) is recorded at fair value.

3 unchanged sentences

Disclosures about Financial Instruments

The notional amounts and fair values of financial instruments used in hedging transactions as of December 31, 2023 and June 30, 2023, are as follows:

The notional amounts and fair values of financial instruments used in hedging transactions as of March 31, 2024 and June 30, 2023, are as follows:

Notional Amount Fair Value Asset Fair Value (Liability)

December 31, 2023 June 30, 2023 December 31, 2023 June 30, 2023 December 31, 2023 June 30, 2023

March 31, 2024 June 30, 2023 March 31, 2024 June 30, 2023 March 31, 2024 June 30, 2023

DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS

7 unchanged sentences

The fair value of the interest rate derivative asset/(liability) directly offsets the cumulative amount of the fair value hedging adjustment included in the carrying amount of the underlying debt obligation.

The carrying amount of the underlying debt obligation, which includes the unamortized discount or premium and the fair value adjustment, was $ 2.8 billion and $ 3.6 billion as of December 31, 2023 and June 30, 2023, respectively.

The carrying amount of the underlying debt obligation, which includes the unamortized discount or premium and the fair value adjustment, was $ 2.7 billion and $ 3.6 billion as of March 31, 2024 and June 30, 2023, respectively.

In addition to the foreign currency derivative contracts designated as net investment hedges, certain of our foreign currency denominated debt instruments are designated as net investment hedges.

The carrying value of those debt instruments designated as net investment hedges, which includes the adjustment for the foreign currency transaction gain or loss on those instruments, was $ 10.8 billion and $ 11.8 billion as of December 31, 2023 and June 30, 2023, respectively.

The carrying value of those debt instruments designated as net investment hedges, which includes the adjustment for the foreign currency transaction gain or loss on those instruments, was $ 10.5 billion and $ 11.8 billion as of March 31, 2024 and June 30, 2023, respectively.

Derivative assets are presented in Prepaid expenses and other current assets or Other noncurrent assets.

4 unchanged sentences

If the Company's credit rating were to fall below the levels stipulated in the agreements, the counterparties could demand either collateralization or termination of the arrangements.

The aggregate fair value of the instruments covered by these contractual features that are in a net liability position was $ 653 and $ 1,088 as of December 31, 2023 and June 30, 2023, respectively.

The aggregate fair value of the instruments covered by these contractual features that are in a net liability position was $ 363 and $ 1,088 as of March 31, 2024 and June 30, 2023, respectively.

The Company has not been required to post collateral as a result of these contractual features.

2 unchanged sentences

Before tax gains on our financial instruments in hedging relationships are categorized as follows:

Amount of Loss Recognized in OCI on Derivatives

Three Months Ended December 31 Six Months Ended December 31

Amount of Gain/(Loss) Recognized in OCI on Derivatives

Three Months Ended March 31 Nine Months Ended March 31

2024 2023 2024 2023

1 unchanged sentence

Foreign exchange contracts $ 269 $ (266) $ 67 $ (571)

(1) For the derivatives in net investment hedging relationships, the amount of gain excluded from effectiveness testing, which was recognized in earnings, was $ 62 and $ 69 for the three months ended December 31, 2023 and 2022, respectively.

The amount of gain excluded from effectiveness testing was $ 130 and $ 115 for the six months ended December 31, 2023 and 2022, respectively.

(1) For the derivatives in net investment hedging relationships, the amount of gain excluded from effectiveness testing, which was recognized in earnings, was $ 53 and $ 64 for the three months ended March 31, 2024 and 2023, respectively.

The amount of gain excluded from effectiveness testing was $ 182 and $ 179 for the nine months ended March 31, 2024 and 2023, respectively.

(2) In addition to the foreign currency derivative contracts designated as net investment hedges, certain of our foreign currency denominated debt instruments are designated as net investment hedges.

The amount of loss recognized in Accumulated other comprehensive income (AOCI) for such instruments was $( 504 ) and $( 862 ) for the three months ended December 31, 2023 and 2022, respectively.

The amount of loss recognized in Accumulated other comprehensive income (AOCI) for such instruments was $( 159 ) and $( 164 ) for the six months ended December 31, 2023 and 2022, respectively.

The amount of gain/(loss) recognized in Accumulated other comprehensive income (AOCI) for such instruments was $ 262 and $( 242 ) for the three months ended March 31, 2024 and 2023, respectively.

The amount of gain/(loss) recognized in Accumulated other comprehensive income (AOCI) for such instruments was $ 102 and $( 406 ) for the nine months ended March 31, 2024 and 2023, respectively.

Amount of Gain/(Loss) Recognized in Earnings

Three Months Ended December 31 Six Months Ended December 31

Three Months Ended March 31 Nine Months Ended March 31

2024 2023 2024 2023

3 unchanged sentences

Foreign currency contracts $ ( 84 ) $ 38 $ ( 27 ) $ ( 13 )

The gains/(losses) on the derivatives in fair value hedging relationships is fully offset by the mark-to-market impact of the related exposure.

The gains/(losses) on the derivatives in fair value hedging relationships are fully offset by the mark-to-market impact of the related exposure.

These are both recognized in Interest expense.

The gains/(losses) on derivatives not designated as hedging instruments is substantially offset by the currency mark-to-market of the related exposure.

The gains/(losses) on derivatives not designated as hedging instruments are substantially offset by the currency mark-to-market of the related exposure.

These are both recognized in Selling, general and administrative expense (SG&A).

9 unchanged sentences

OCI attributable to noncontrolling interests — ( 3 ) ( 3 )

Balance at December 31, 2023 $ 11 $ 37 $ ( 12,214 ) $ ( 12,167 )

Balance at March 31, 2024 $ 11 $ 44 $ ( 12,425 ) $ ( 12,370 )

(1) Net of tax (benefit)/expense of $ 0 , $( 3 ) and $ 40 for gains/losses on investment securities, postretirement benefit plans and foreign currency translation, respectively.

31 unchanged sentences

All outstanding amounts related to suppliers participating in SCF are recorded within Accounts payable in our Consolidated Balance Sheets, and the associated payments are included in operating activities within our Consolidated Statements of Cash Flows.

The amount due to suppliers participating in SCF and included in Accounts payable was approximately $ 5.6 billion as of December 31, 2023, $ 5.7 billion as of June 30, 2023, and $ 5.8 billion as of June 30, 2022.

The amount due to suppliers participating in SCF and included in Accounts payable was approximately $ 5.2 billion as of March 31, 2024, $ 5.7 billion as of June 30, 2023, and $ 5.8 billion as of June 30, 2022.

Restructuring Program

4 unchanged sentences

In connection with this announcement, the Company expects to record incremental restructuring charges of $ 1.0 to $ 1.5 billion after tax, consisting primarily of foreign currency translation losses to be recognized as non-cash charges upon the substantial liquidation of operations in the affected markets.

For the three months ended December 31, 2023, the Company incurred charges of $ 89 including $ 48 in Costs of products sold and $ 39 in SG&A.

For the six months ended December 31, 2023, the Company incurred charges of $ 181 including $ 109 in Costs of products sold and $ 68 in SG&A.

For the three months ended March 31, 2024, the Company incurred charges of $ 70 including $ 44 in Costs of products sold, $ 25 in SG&A and $ 1 in Other non-operating income.

For the nine months ended March 31, 2024, the Company incurred charges of $ 252 including $ 154 in Costs of products sold, $ 93 in SG&A and $ 5 in Other non-operating income.

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 13

The following table presents restructuring activity for the six months ended December 31, 2023:

The following table presents restructuring activity for the nine months ended March 31, 2024:

Separation Costs Asset-Related Costs Other Costs Total

RESERVE JUNE 30, 2023 $ 155 $ — $ 19 $ 174

Costs incurred for the three months ended September 30, 2023 69 12 11 92

Costs incurred for the three months ended December 31, 2023 40 30 19 89

Costs incurred for the six months ended December 31, 2023 109 42 30 181

Costs paid/settled for the six months ended December 31, 2023 ( 91 ) ( 42 ) ( 27 ) ( 160 )

RESERVE DECEMBER 31, 2023 $ 173 $ — $ 22 $ 195

Costs incurred for the three months ended March 31, 2024 37 11 22 70

Costs incurred for the nine months ended March 31, 2024 146 52 53 252

Costs paid/settled for the nine months ended March 31, 2024 ( 190 ) ( 52 ) ( 52 ) ( 294 )

RESERVE MARCH 31, 2024 $ 112 $ — $ 19 $ 131

Separation Costs

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements