What changed in this filing

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Item 1. Financial Statements

2025-01-22 compared with 2024-10-18 · 114 added, 53 removed, 389 unchanged (30% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF EARNINGS

Three Months Ended September 30

Three Months Ended December 31 Six Months Ended December 31

Amounts in millions except per share amounts 2024 2023 2024 2023

2 unchanged sentences

Selling, general and administrative expense 5,723 5,522 11,242 11,127

Indefinite-lived intangible asset impairment charge — 1,341 — 1,341

OPERATING INCOME 5,741 4,433 11,538 10,200

12 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended September 30

Three Months Ended December 31 Six Months Ended December 31

Amounts in millions 2024 2023 2024 2023

12 unchanged sentences

CONSOLIDATED BALANCE SHEETS

Amounts in millions September 30, 2024 June 30, 2024

Amounts in millions December 31, 2024 June 30, 2024

CURRENT ASSETS

24 unchanged sentences

Preferred stock 788 798

Common stock – shares issued – September 2024 4,009.2

Common stock – shares issued – December 2024 4,009.2

June 2024 4,009.2 4,009 4,009

11 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Three Months Ended September 30, 2024

Three Months Ended December 31, 2024

Dollars in millions;

1 unchanged sentence

Shares Amount

BALANCE SEPTEMBER 30, 2024 2,355,042 $ 4,009 $ 791 $ 68,102 ($ 707 ) ($ 10,893 ) ($ 134,823 ) $ 125,361 $ 300 $ 52,141

Net earnings 4,630 29 4,659

Other comprehensive income/(loss) ( 744 ) ( 3 ) ( 747 )

Dividends and dividend equivalents

($ 1.0065 per share):

Common ( 2,375 ) ( 2,375 )

Preferred ( 72 ) ( 72 )

Treasury stock purchases ( 14,716 ) ( 2,520 ) ( 2,520 )

Employee stock plans 4,057 181 228 408

Preferred stock conversions 469 ( 3 ) — 3 —

ESOP debt impacts — — —

Noncontrolling interest, net — ( 51 ) ( 51 )

BALANCE DECEMBER 31, 2024 2,344,852 $ 4,009 $ 788 $ 68,283 ($ 707 ) ($ 11,637 ) ($ 137,112 ) $ 127,544 $ 275 $ 51,443

Six Months Ended December 31, 2024

Dollars in millions;

shares in thousands Common Stock Preferred Stock Additional Paid-In Capital Reserve for ESOP Debt Retirement Accumulated Other Comprehensive Income/(Loss) Treasury Stock Retained Earnings Noncontrolling Interest Total Shareholders' Equity

Shares Amount

BALANCE JUNE 30, 2024 2,357,051 $ 4,009 $ 798 $ 67,684 ($ 737 ) ($ 11,900 ) ($ 133,379 ) $ 123,811 $ 272 $ 50,559

10 unchanged sentences

Noncontrolling interest, net — ( 51 ) ( 51 )

BALANCE DECEMBER 31, 2024 2,344,852 $ 4,009 $ 788 $ 68,283 ($ 707 ) ($ 11,637 ) ($ 137,112 ) $ 127,544 $ 275 $ 51,443

See accompanying Notes to Consolidated Financial Statements.

4 The Procter & Gamble Company

Three Months Ended December 31, 2023

Dollars in millions;

Shares Amount

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

Three Months Ended September 30, 2023

Net earnings 3,468 25 3,493

Other comprehensive income/(loss) 416 — 416

Dividends and dividend equivalents

($ 0.9407 per share):

Common ( 2,225 ) ( 2,225 )

Preferred ( 70 ) ( 70 )

Treasury stock purchases ( 6,879 ) ( 1,008 ) ( 1,008 )

Employee stock plans 2,630 113 147 260

Preferred stock conversions 385 ( 3 ) — 3 —

ESOP debt impacts — — —

Noncontrolling interest, net — ( 52 ) ( 52 )

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

Dollars in millions;

13 unchanged sentences

Noncontrolling interest, net — ( 52 ) ( 52 )

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

See accompanying Notes to Consolidated Financial Statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended September 30

Six Months Ended December 31

Amounts in millions 2024 2023

6 unchanged sentences

Loss/(gain) on sale of assets 787 ( 3 )

Indefinite-lived intangible asset impairment charge — 1,341

Change in accounts receivable ( 262 ) ( 839 )

2 unchanged sentences

Change in other operating assets and liabilities ( 748 ) ( 704 )

Other 135 346

TOTAL OPERATING ACTIVITIES 9,127 10,004

10 unchanged sentences

Net additions/(reductions) to other short-term debt ( 2,705 ) 3,740

Additions to long-term debt 995 254

Reductions in long-term debt ( 1,478 ) ( 2,335 )

28 unchanged sentences

We are currently assessing the impact of this guidance on our disclosures.

In November 2024, the FASB issued ASU No.

2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures:

Disaggregation of Income Statement Expenses”.

This guidance requires disclosures about significant expense categories, including but not limited to, inventory purchases, employee compensation, depreciation, amortization, and selling expenses.

This amendment is effective for our fiscal year ending June 30, 2028 and our interim periods within the fiscal year ending June 30, 2029.

We are currently assessing the impact of this guidance on our disclosures.

No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on our Consolidated Financial Statements.

8 unchanged sentences

• Health Care :

Oral Care (Toothbrushes, Toothpaste, Other Oral Care);

Oral Care (Toothbrushes, Toothpastes, Other Oral Care);

Personal Health Care (Gastrointestinal, Pain Relief, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, Other Personal Health Care);

10 unchanged sentences

% of Net sales by operating segment (1)

Three Months Ended September 30

Three Months Ended December 31 Six Months Ended December 31

2024 2023 2024 2023

Fabric Care 23 % 23 % 23 % 23 %

1 unchanged sentence

Baby Care 9 % 9 % 9 % 10 %

Hair Care 9 % 9 %

Family Care 9 % 9 % 9 % 8 %

Hair Care 9 % 9 % 9 % 9 %

Grooming 8 % 8 % 8 % 8 %

3 unchanged sentences

Personal Care (2)

5 % 5 % 6 % 5 %

Skin Care (2)

4 % 4 % 3 % 4 %

Total 100 % 100 % 100 % 100 %

3 unchanged sentences

The following is a summary of reportable segment results:

Three Months Ended September 30

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

Three Months Ended December 31 Six Months Ended December 31

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

Beauty 2024 $ 3,848 $ 996 $ 780 $ 7,741 $ 2,063 $ 1,620

18 unchanged sentences

Translation and other ( 139 ) ( 104 ) ( 107 ) ( 11 ) ( 44 ) ( 405 )

Goodwill at September 30, 2024 $ 13,974 $ 12,812 $ 7,789 $ 1,831 $ 4,566 $ 40,970

Goodwill increased from June 30, 2024, primarily due to currency translation.

Goodwill at December 31, 2024 $ 13,584 $ 12,529 $ 7,531 $ 1,799 $ 4,456 $ 39,898

Goodwill decreased from June 30, 2024, primarily 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 September 30, 2024, were comprised of:

Identifiable intangible assets at December 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 September 30, 2024 and 2023, was $ 83 and $ 87 , respectively.

The amortization expense of determinable-lived intangible assets for the three months ended December 31, 2024 and 2023, was $ 80 and $ 84 , respectively.

For the six months ended December 31, 2024 and 2023, amortization expense was $ 163 and $ 171 , respectively.

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

4 unchanged sentences

Other than our Gillette indefinite-lived intangible asset, our goodwill reporting units and indefinite-lived intangible assets have fair values that significantly exceed their underlying carrying values.

As previously disclosed, the carrying value of the Gillette indefinite-lived intangible asset was impaired during the year ended June 30, 2024.

As previously disclosed, the carrying value of the Gillette indefinite-lived intangible asset was impaired during the fiscal year ended June 30, 2024.

The impairment charge arose due to a higher discount rate, weakening of several currencies relative to the U.S.

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

Following the impairment charge, the carrying value of the Gillette indefinite-lived intangible asset was $ 12.8 billion, which was equivalent to the estimated fair value as of December 31, 2023.

While we have concluded that no triggering event has occurred during the quarter ended September 30, 2024, the Gillette indefinite-lived intangible asset is susceptible to further impairment risk.

Following the impairment charge, the carrying value of the Gillette indefinite-lived intangible asset was equivalent to the estimated fair value as of December 31, 2023.

Based on our impairment testing performed during the three months ended December 31, 2024, the Gillette indefinite-lived intangible asset's fair value exceeds its carrying value by greater than 10 %.

As of December 31, 2024, the carrying value of the Gillette indefinite-lived intangible asset was $ 12.8 billion.

Adverse changes in the business or in the macroeconomic environment, including foreign currency devaluation, increasing global inflation, or market contraction from an economic recession, 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.

16 unchanged sentences

We performed a sensitivity analysis for the Gillette indefinite-lived intangible asset as part of our annual impairment testing during the three months ended December 31, 2024, utilizing reasonably possible changes in the assumptions for the discount rate, the short-term and residual growth rates and the royalty rate to demonstrate the potential impacts to estimated fair values.

The table below provides, in isolation, the estimated fair value impacts related to a 25 basis-point increase in the discount rate, a 25 basis-point decrease in our short-term and residual growth rates or a 50 basis-point decrease in our royalty rate, which may result in an additional impairment of the Gillette indefinite-lived intangible asset.

Approximate Percent Change in Estimated Fair Value

6 unchanged sentences

Net earnings per common share were calculated as follows:

CONSOLIDATED AMOUNTS Three Months Ended September 30

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

2024 2023 2024 2023

Net earnings $ 4,659 $ 3,493 $ 8,646 $ 8,049

7 unchanged sentences

Convertible preferred shares (1)

71.3 73.9 71.6 74.3

Stock options and other unvested equity awards (2)

34.9 36.4 36.4 38.5

Diluted weighted average common shares outstanding 2,458.1 2,468.4 2,462.1 2,471.8

3 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, 2024.

(2) Excludes approximately 1 million for the three months ended September 30, 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.

(2) Excludes approximately 8 million and 9 million for the three months ended December 31, 2024 and 2023 respectively, and 4 million and 5 million for the six months ended December 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 September 30

Three Months Ended December 31 Six Months Ended December 31

2024 2023 2024 2023

Share-based compensation expense $ 136 $ 150 $ 241 $ 275

5 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 three months ended September 30, 2024.

There have been no significant changes in our risk management policies or activities during the six months ended December 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 three months ended September 30, 2024 or during the fiscal year ended June 30, 2024.

Cash equivalents were $ 10.7 billion and $ 8.0 billion as of September 30, 2024 and June 30, 2024, respectively, and are classified as Level 1 within the fair value hierarchy.

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, 2024 or during the fiscal year ended June 30, 2024.

Cash equivalents were $ 8.7 billion and $ 8.0 billion as of December 31, 2024 and June 30, 2024, 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 $ 29.0 billion and $ 27.7 billion as of September 30, 2024 and June 30, 2024, respectively.

This includes the current portion of long-term debt instruments ($ 3.9 billion and $ 3.8 billion as of September 30, 2024 and June 30, 2024, respectively).

The fair value of long-term debt was $ 27.3 billion and $ 27.7 billion as of December 31, 2024 and June 30, 2024, respectively.

This includes the current portion of long-term debt instruments ($ 3.3 billion and $ 3.8 billion as of December 31, 2024 and June 30, 2024, 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 September 30, 2024 and June 30, 2024, are as follows:

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

Notional Amount Fair Value Asset Fair Value (Liability)

September 30, 2024 June 30, 2024 September 30, 2024 June 30, 2024 September 30, 2024 June 30, 2024

December 31, 2024 June 30, 2024 December 31, 2024 June 30, 2024 December 31, 2024 June 30, 2024

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 $ 2.9 billion and $ 2.7 billion as of September 30, 2024 and June 30, 2024, 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 as of December 31, 2024 and June 30, 2024.

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 $ 12.6 billion and $ 11.9 billion as of September 30, 2024 and June 30, 2024, 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 $ 10.4 billion and $ 11.9 billion as of December 31, 2024 and June 30, 2024, respectively.

The increase in notional balance of the derivative instruments designated as net investment hedges is primarily driven by the Company's decision to leverage favorable interest rate spreads in the foreign currency swap market.

8 unchanged sentences

The Procter & Gamble Company 11

September 30, 2024 and June 30, 2024, respectively.

December 31, 2024 and June 30, 2024, respectively.

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

1 unchanged sentence

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

Three Months Ended September 30

Three Months Ended December 31 Six Months Ended December 31

2024 2023 2024 2023

DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS (1) (2)

Foreign currency interest rate contracts $ 857 $ ( 487 ) $ 356 $ ( 202 )

(1) For the derivatives in net investment hedging relationships, the amount of gain excluded from effectiveness testing, which was recognized in earnings, was $ 50 and $ 67 for the three months ended September 30, 2024 and 2023, respectively.

(1) For the derivatives in net investment hedging relationships, the amount of gain excluded from effectiveness testing, which was recognized in earnings, was $ 57 and $ 62 for the three months ended December 31, 2024 and 2023, respectively.

The amount of gain excluded from effectiveness testing was $ 107 and $ 130 for the six months ended December 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 gain/(loss) recognized in Accumulated other comprehensive income (AOCI) for such instruments was $( 611 ) and $ 344 for the three months ended September 30, 2024 and 2023, respectively.

The amount of gain/(loss) recognized in Accumulated other comprehensive income (AOCI) for such instruments was $ 825 and $( 504 ) for the three months ended December 31, 2024 and 2023, respectively.

The amount of gain/(loss) recognized in AOCI for such instruments was $ 215 and $( 159 ) for the six months ended December 31, 2024 and 2023, respectively.

Amount of Gain/(Loss) Recognized in Earnings

Three Months Ended September 30

Three Months Ended December 31 Six Months Ended December 31

2024 2023 2024 2023

DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS

17 unchanged sentences

OCI attributable to noncontrolling interests, net of tax — 2 ( 5 ) ( 3 )

Balance at September 30, 2024, net of tax $ 12 $ 591 $ ( 11,496 ) $ ( 10,893 )

Balance at December 31, 2024, net of tax $ 11 $ 614 $ ( 12,262 ) $ ( 11,637 )

The below provides additional details on amounts reclassified from AOCI into the Consolidated Statement of Earnings:

• Postretirement benefit plan amounts are reclassified from AOCI into Other non-operating income/(expense) and included in the computation of net periodic postretirement costs.

• Foreign currency translation amounts are reclassified from AOCI into Other non-operating income/(expense).

These amounts relate to accumulated foreign currency translation losses recognized due to the substantial liquidation of operations in certain Enterprise Markets, including Argentina.

Commitments and Contingencies

We are subject, from time to time, to certain legal proceedings and claims arising out of our business, which cover a wide range of matters, including antitrust and trade regulation, product liability, advertising, contracts, environmental, patent and trademark matters, labor and employment matters and tax.

While considerable uncertainty exists, in the opinion of management and our

• Postretirement benefit plan amounts are reclassified from AOCI into Other non-operating income/(expense), net and included in the computation of net periodic postretirement costs.

• Foreign currency translation amounts are reclassified from AOCI into Other non-operating income/(expense), net.

These amounts relate to accumulated foreign currency translation losses recognized due to the substantial liquidation of operations in Argentina recorded in the period ended September 30, 2024.

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

12 The Procter & Gamble Company

counsel, the ultimate resolution of the various lawsuits and claims will not materially affect our financial position, results of operations or cash flows.

Commitments and Contingencies

While considerable uncertainty exists, in the opinion of management and our counsel, the ultimate resolution of the various lawsuits and claims will not materially affect our financial position, results of operations or cash flows.

We are also subject to contingencies pursuant to environmental laws and regulations that in the future may require us to take action to correct the effects on the environment of prior manufacturing and waste disposal practices.

1 unchanged sentence

Income Tax Uncertainties

The Company is present in approximately 70 countries and over 150 taxable jurisdictions and, at any point in time, has 30 – 40 jurisdictional audits underway at various stages of completion.

The Company is present in about 70 countries and over 150 taxable jurisdictions and, at any point in time, has 30 – 40 jurisdictional audits underway at various stages of completion.

We evaluate our tax positions and establish liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite our belief that the underlying tax positions are fully supportable.

18 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 $ 5.7 billion as of September 30, 2024 and $ 5.6 billion as of June 30, 2024.

The amount due to suppliers participating in SCF and included in Accounts payable was approximately $ 5.6 billion as of December 31, 2024 and June 30, 2024.

Restructuring Program

5 unchanged sentences

The total incremental restructuring charges incurred under the program beginning in the three-month period ended December 31, 2023, through the three-month period ended September 30, 2024, were approximately $ 1.2 billion after tax.

For the three months ended September 30, 2024, the Company incurred total before tax charges of $ 886 including $ 41 in Costs of products sold, $ 54 in SG&A and $ 791 in Other non-operating income/(expense).

For the three months ended December 31, 2024, the Company incurred total before tax charges of $ 47 including $ 28 in Costs of products sold, $ 25 in SG&A and $( 5 ) in Other non-operating income/(expense).

For the six months ended December 31, 2024, the Company incurred charges of $ 933 including $ 69 in Costs of products sold, $ 79 in SG&A and $ 785 in Other non-operating income/(expense).

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 three months ended September 30, 2024:

The following table presents restructuring activity for the six months ended December 31, 2024:

Separation Costs Asset-Related Costs Other Costs Total

1 unchanged sentence

Costs incurred for the three months ended September 30, 2024 16 30 839 886

Costs paid/settled for the three months ended September 30, 2024 ( 33 ) ( 30 ) ( 815 ) ( 879 )

RESERVE SEPTEMBER 30, 2024 $ 116 $ — $ 56 $ 172

Costs incurred for the three months ended December 31, 2024 25 9 14 47

Costs incurred for the six months ended December 31, 2024 41 39 853 933

Costs paid/settled for the six months ended December 31, 2024 ( 58 ) ( 39 ) ( 823 ) ( 921 )

RESERVE DECEMBER 31, 2024 $ 115 $ — $ 62 $ 178

Separation Costs

6 unchanged sentences

Other restructuring-type charges are incurred as a direct result of the restructuring plan.

Such charges include accumulated foreign currency translation losses, asset removal and termination of contracts related to Enterprise Market portfolio restructuring.

Such charges include accumulated foreign currency translation losses, asset removal and termination of contracts.

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