What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-08-04 compared with 2024-08-05 · 163 added, 131 removed, 1149 unchanged (20% of the section changed)

47 unchanged sentences

The Company performed their annual impairment assessment of the Gillette Brand as of October 1, 2024.

During the fiscal year ended June 30, 2024, the Company determined that the fair value of the Gillette indefinite-lived intangible asset was less than its carrying amount.

As a result, the Company recorded an 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.

Because the estimated fair value exceeded the carrying value, no impairment was recorded.

As of June 30, 2025, the carrying value of the Gillette Brand was $12.8 billion.

3 unchanged sentences

Our audit procedures related to forecasts of future net sales and earnings and the selection of the royalty rate and discount rate for the Gillette Brand included the following, among others:

34 The Procter & Gamble Company

• We tested the effectiveness of controls over the Gillette Brand, including those over the determination of fair value, such as controls related to management’s development of forecasts of future net sales and earnings, and the selection of royalty rate and discount rate.

34 The Procter & Gamble Company

• We evaluated management’s ability to accurately forecast net sales and earnings by comparing actual results to management’s historical forecasts.

68 unchanged sentences

— ( 3 ) ( 7 )

Unrealized gains on defined benefit postretirement plans

(net of tax expense of $ 230 , $ 9 and $ 1,022 , respectively)

Unrealized gains/(losses) on defined benefit postretirement plans

(net of tax (benefit)/expense of $( 407 ), $ 230 and $ 9 , respectively)

( 1,390 ) 546 40

TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX ( 248 ) 317 ( 38 )

105 unchanged sentences

Change in inventories ( 324 ) ( 70 ) ( 119 )

Change in accounts payable and accrued and other liabilities 1,814 313 1,429

Change in other operating assets and liabilities ( 1,414 ) ( 1,107 ) ( 635 )

Change in accounts payable ( 542 ) 878 ( 447 )

Other ( 1,653 ) 491 217

22 unchanged sentences

Cash payments for income taxes 4,554 4,363 4,278

(1) Certain prior period amounts within Operating Activities have been reclassified for consistency with the current period presentation.

These reclassifications had no effect on the previously reported Total Operating Activities.

See accompanying Notes to Consolidated Financial Statements.

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Cost of products sold is primarily comprised of direct materials and supplies consumed in the manufacturing of product, as well as manufacturing labor, depreciation expense and direct overhead expenses necessary to acquire and convert the purchased materials and supplies into finished products.

Cost of products sold also includes the cost to distribute products to customers, inbound freight costs, internal transfer costs, warehousing costs and other shipping and handling activity.

Cost of products sold also includes the cost to distribute products to customers, inbound freight costs, customs and duties, internal transfer costs, warehousing costs and other shipping and handling activity.

Selling, General and Administrative Expense

Selling, general and administrative expense (SG&A) is primarily comprised of marketing expenses, selling expenses, research and development costs, administrative and other indirect overhead costs, depreciation and amortization expense on non-manufacturing assets and other miscellaneous operating items.

Research and development costs are charged to expense as incurred and were $ 2.0 billion in 2024, 2023 and 2022.

Research and development costs are charged to expense as incurred and were $ 2.1 billion in 2025 and $ 2.0 billion in 2024 and 2023.

Advertising costs, charged to expense as incurred, include television, print, radio, digital and in-store advertising expenses and were $ 9.2 billion in 2025, $ 9.6 billion in 2024 and $ 8.0 billion in 2023.

1 unchanged sentence

Other Non-Operating Income, Net

Other non-operating income, net primarily includes divestiture gains, net non-service impacts related to postretirement benefit plans, investment income, accumulated foreign currency translation losses and other non-operating items.

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

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These are accounted for as equity method investments.

Other equity investments that are not controlled, and over which we do not have the ability to exercise significant influence, and for which there is a readily determinable market value, are recorded at fair value, with gains and losses recorded through net earnings.

Other equity investments that are not controlled, over which we do not have the ability to exercise significant influence, and for which there is a readily determinable market value, are recorded at fair value, with gains and losses recorded through net earnings.

Equity investments without readily determinable fair values are measured at cost, less impairments, plus or minus observable price changes.

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New Accounting Pronouncements and Policies

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

On July 1, 2024, we adopted the Accounting Standards Update (ASU) No.

2023-07, “Segment Reporting:

Improvements to Reportable Segment Disclosures.” This guidance requires disclosure of incremental segment information on an annual and interim basis.

This amendment is effective for our fiscal year ending June 30, 2025, and our interim periods within the fiscal year ending June 30, 2026.

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

In December 2023, the FASB issued ASU No.

Improvements to Reportable Segment Disclosures".

This guidance requires disclosure of incremental segment information on an annual and interim basis.

This amendment was effective for our fiscal year ended June 30, 2025, and will be effective for our interim periods within the fiscal year ending June 30, 2026.

This standard was applied retrospectively to all periods presented in the financial statements and resulted in additional disclosures.

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU No.

2023-09, “Income Taxes:

Improvements to Income Tax Disclosures.” This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction.

Improvements to Income Tax Disclosures".

This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction.

This amendment is effective for our fiscal year ending June 30, 2026.

The guidance will require additional disclosures in the Income Taxes footnote but will not have a material impact on our Consolidated Financial Statements.

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.

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Hair Care (Conditioners, Shampoos, Styling Aids, Treatments);

Skin and Personal Care (Antiperspirants and Deodorants, Personal Cleansing, Skin Care);

Personal Care (Antiperspirants and Deodorants, Personal Cleansing);

Skin Care (Facial Moisturizers, Cleaners and Treatments);

Grooming (Appliances, Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other Grooming);

• 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);

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The non-operating elements in Corporate primarily include interest expense, certain pension and other postretirement benefit costs, certain acquisition and divestiture gains, interest and investing income and other financing costs.

Total assets for the reportable segments include those assets managed by the reportable segment, primarily inventory, fixed assets and intangible assets.

Other assets, primarily cash, accounts receivable, investment securities and goodwill, are included in Corporate.

The Company’s Chief Operating Decision Maker (CODM) is the Chief Executive Officer.

As the Company allocates taxes to individual segments, the CODM uses Earnings before income taxes and Net earnings to assess segment performance and allocate resources in the budgeting and forecasting process.

The CODM does not use assets by segment to evaluate performance or allocate resources.

Therefore, we do not disclose assets by segment.

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

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Our operating segments are comprised of similar product categories.

Operating segments that individually accounted for 5% or more of consolidated net sales are as follows:

% of Net sales by operating segment (1)

Operating segments as a percentage of consolidated net sales (excluding sales recorded in Corporate) are as follows:

Fiscal years ended June 30 2025 2024 2023

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Hair Care 9 % 9 % 9 %

Skin and Personal Care 9 % 9 % 9 %

Grooming 8 % 8 % 8 %

Oral Care 8 % 8 % 8 %

Feminine Care 6 % 6 % 7 %

Personal Care (1)

Personal Health Care 6 % 6 % 6 %

Skin Care (1)

TOTAL 100 % 100 % 100 %

(1) % of Net sales by operating segment excludes sales recorded in Corporate.

(2) Effective July 1, 2022, the Grooming Sector Business Unit completed the full integration of its Shave Care and Appliances categories to cohesively serve consumers' grooming needs.

This transition included the integration of the management team, strategic decision-making, innovation plans, financial targets, budgets and internal management reporting.

For the fiscal year ended June 30, 2022, Appliances was presented in Other.

(1) Effective July 1, 2024, the Beauty reportable business segment separated Skin and Personal Care into individual operating segments, Skin Care and Personal Care.

This transition included separation of the management team, strategic decision-making, innovation plans, financial targets, budgets and management reporting.

Net sales and long-lived assets in the United States and internationally were as follows (in billions):

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Our largest customer, Walmart Inc.

and its affiliates, accounted for consolidated net sales of approximately 16 % in 2024 and 15 % in 2023 and 2022.

and its affiliates, accounted for consolidated net sales of approximately 16 % in 2025 and 2024 and 15 % in 2023.

No other customer represents more than 10% of our consolidated net sales.

Fiscal Year Ended June 30, 2025

Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company

Net sales $ 14,964 $ 6,662 $ 11,998 $ 29,617 $ 20,248 $ 794 $ 84,284

Cost of products sold ( 5,822 ) ( 2,675 ) ( 4,974 ) ( 15,650 ) ( 10,926 ) ( 1,118 ) ( 41,164 )

Selling, general and administrative expense ( 5,687 ) ( 2,036 ) ( 3,886 ) ( 6,509 ) ( 4,108 ) ( 443 ) ( 22,669 )

Other segment items (1)

( 1 ) — 10 1 — ( 294 ) ( 284 )

Earnings/(Loss) before income taxes 3,454 1,952 3,149 7,459 5,214 ( 1,061 ) 20,167

Net earnings/(loss) $ 2,715 $ 1,577 $ 2,440 $ 5,848 $ 4,013 $ ( 527 ) $ 16,065

Other segment information

Depreciation and amortization $ 399 $ 313 $ 397 $ 723 $ 814 $ 200 $ 2,847

Capital expenditures $ 328 $ 451 $ 526 $ 1,208 $ 1,080 $ 180 $ 3,773

(1) Other segment items for each reportable segment includes interest expense, interest income and certain other non-operating income/(expense).

Corporate includes non-operating losses comprised primarily of a non-cash charge of $ 752 for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina.

See Note 3 for more information on the limited market portfolio restructuring program.

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

44 The Procter & Gamble Company

Global Segment Results Net Sales Earnings/(Loss)

Income Taxes Net Earnings/(Loss) Depreciation

Amortization Total

Assets Capital

BEAUTY 2024 $ 15,220 $ 3,805 $ 2,963 $ 399 $ 6,103 $ 280

2023 15,008 4,009 3,178 376 6,196 287

2022 14,740 3,946 3,160 348 6,055 331

GROOMING 2024 6,654 1,845 1,477 335 19,082 337

2023 6,419 1,806 1,461 335 20,601 300

2022 6,587 1,835 1,490 361 20,482 260

HEALTH CARE 2024 11,793 2,941 2,258 381 8,416 524

2023 11,226 2,759 2,125 352 8,480 466

2022 10,824 2,618 2,006 376 7,888 410

FABRIC & HOME CARE 2024 29,495 7,339 5,687 710 8,907 1,076

2023 28,371 6,303 4,828 675 8,669 979

2022 27,556 5,729 4,386 672 8,567 988

BABY, FEMININE & FAMILY CARE 2024 20,277 5,253 4,020 824 8,497 979

2023 20,217 4,623 3,545 804 8,517 994

2022 19,736 4,267 3,266 826 8,443 932

CORPORATE 2024 601 ( 2,422 ) ( 1,430 ) 247 71,365 126

2023 765 ( 1,147 ) ( 399 ) 172 68,366 36

2022 744 ( 400 ) 485 224 65,773 235

TOTAL COMPANY 2024 $ 84,039 $ 18,761 $ 14,974 $ 2,896 $ 122,370 $ 3,322

Fiscal Year Ended June 30, 2024

Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company

Net sales $ 15,220 $ 6,654 $ 11,793 $ 29,495 $ 20,277 $ 601 $ 84,039

Cost of products sold ( 5,722 ) ( 2,711 ) ( 4,967 ) ( 15,535 ) ( 10,831 ) ( 1,082 ) ( 40,848 )

Selling, general and administrative expense ( 5,700 ) ( 2,105 ) ( 3,886 ) ( 6,631 ) ( 4,198 ) ( 784 ) ( 23,305 )

Other segment items (1)

8 7 1 10 6 ( 1,156 ) ( 1,125 )

Earnings/(Loss) before income taxes 3,805 1,845 2,941 7,339 5,253 ( 2,422 ) 18,761

Net earnings/(loss) $ 2,963 $ 1,477 $ 2,258 $ 5,687 $ 4,020 $ ( 1,430 ) $ 14,974

Other segment information

Depreciation and amortization $ 399 $ 335 $ 381 $ 710 $ 824 $ 247 $ 2,896

Capital expenditures $ 280 $ 337 $ 524 $ 1,076 $ 979 $ 126 $ 3,322

(1) Other segment items for each reportable segment includes interest expense, interest income and certain other non-operating income/(expense).

The non-cash impairment charge of $ 1.3 billion on the Gillette intangible asset was included in Other segment items within Corporate and is discussed further in Note 4.

Fiscal Year Ended June 30, 2023

Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company

Net sales $ 15,008 $ 6,419 $ 11,226 $ 28,371 $ 20,217 $ 765 $ 82,006

Cost of products sold ( 5,849 ) ( 2,698 ) ( 4,855 ) ( 16,342 ) ( 11,857 ) ( 1,159 ) ( 42,760 )

Selling, general and administrative expense ( 5,157 ) ( 1,925 ) ( 3,615 ) ( 5,772 ) ( 3,749 ) ( 894 ) ( 21,112 )

Other segment items (1)

7 10 4 45 12 141 219

Earnings/(Loss) before income taxes 4,009 1,806 2,759 6,303 4,623 ( 1,147 ) 18,353

Net earnings/(loss) $ 3,178 $ 1,461 $ 2,125 $ 4,828 $ 3,545 $ ( 399 ) $ 14,738

Other segment information

Depreciation and amortization $ 376 $ 335 $ 352 $ 675 $ 804 $ 172 $ 2,714

Capital expenditures $ 287 $ 300 $ 466 $ 979 $ 994 $ 36 $ 3,062

(1) Other segment items for each reportable segment includes interest expense, interest income and certain other non-operating income/(expense).

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

16 unchanged sentences

Taxes payable 1,177 1,042

Derivative liabilities 627 54

Accrued interest 293 282

1 unchanged sentence

Restructuring reserves 189 166

Derivative liabilities 54 631

Other 2,920 2,953

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Other retiree benefit obligations 691 653

Tax Act transitional tax payable 592 1,154

Derivative liabilities 435 325

Tax Act transitional tax payable — 592

Other 566 555

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Before tax costs incurred under ongoing programs have generally ranged from $ 250 to $ 500 annually.

In December 2023, the Company announced a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions.

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.

The Company incurred total restructuring charges of $ 659 and $ 329 for the fiscal years ended June 30, 2024 and 2023.

Of the charges incurred for fiscal year 2024, $ 248 were recorded in Costs of products sold, $ 155 in SG&A and $ 255 in Other non-operating income, net.

Of the charges incurred in fiscal year 2023, $ 160 were recorded in Costs of products sold, $ 160 in SG&A and $ 9 in Other non-operating income, net .

In the fiscal year ended June 30, 2024, the Company started a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions.

During the period ended September 30, 2024, the Company completed this limited market portfolio restructuring with the substantial liquidation of its operations in Argentina and recorded $ 801 after tax of incremental charges, comprised primarily of non-cash charges for accumulated foreign currency translation losses previously included in Accumulated other comprehensive income/(loss).

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 $ 1.2 billion after tax.

The Company incurred total restructuring charges of $ 1.1 billion and $ 659 for the fiscal years ended June 30, 2025 and 2024.

Of the charges incurred for fiscal year 2025, $ 150 were recorded in Costs of products sold, $ 171 in SG&A and $ 793 in Other

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

46 The Procter & Gamble Company

non-operating income, net.

Of the charges incurred in fiscal year 2024, $ 248 were recorded in Costs of products sold, $ 155 in SG&A and $ 255 in Other non-operating income, net .

The following table presents restructuring activity for the fiscal years ended June 30, 2025 and 2024:

10 unchanged sentences

Asset-Related Costs

Asset-related costs consist of both asset write-downs and accelerated depreciation for manufacturing and facilities consolidations.

Asset-related costs consist of both asset write-downs and accelerated depreciation for manufacturing consolidations.

Asset write-downs relate to the establishment of a new fair value basis for assets held-for-sale or for disposal.

2 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.

As of June 30, 2024, the Company has substantially liquidated its operations in certain Enterprise Markets, including Nigeria, and recorded a non-cash charge of $ 216 for accumulated foreign currency translation losses previously included in Accumulated other comprehensive income/(loss).

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

In the period ended September 30, 2024, the Company substantially liquidated its operations in Argentina and recorded a non-cash charge of $ 752 for accumulated foreign currency translation losses previously included in Accumulated other comprehensive income/(loss).

Consistent with our historical policies for ongoing restructuring-type activities, the restructuring charges are funded by and included within Corporate for management and segment reporting .

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(1) Grooming goodwill balance is net of $ 7.9 billion accumulated impairment losses.

Goodwill increased during fiscal 2025 primarily due to currency translation across all reportable segments.

Goodwill decreased during fiscal 2024 primarily due to currency translation across all reportable segments and a brand divestiture in the Beauty reportable segment.

Goodwill increased during fiscal 2023 primarily due to an acquisition in the Beauty segment, other minor brand acquisitions in the Baby, Feminine & Family Care segment and currency translation across all reportable segments.

Goodwill and indefinite-lived intangibles are tested for impairment at least annually by comparing the estimated fair values of our reporting units and indefinite-lived intangible assets to their respective carrying values.

8 unchanged sentences

To the extent such factors result in a failure to achieve the level of projected cash flows initially used to estimate fair value for purposes of establishing or subsequently impairing the carrying amount of goodwill and related intangible assets, we may need to record additional non-cash impairment charges in the future.

During the fiscal year ended June 30, 2024, 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 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.

As previously disclosed, we recorded a non-cash impairment charge of $ 1.3 billion ($ 1.0 billion after tax) on the Gillette indefinite-lived intangible asset 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 equivalent to the estimated fair value as of December 31, 2023.

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

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We are generally not able to reliably estimate the timing and ultimate settlement amounts until the close of an audit.

Based on information currently available, we do not anticipate over the next 12-month period any significant audit activity concluding related to uncertain tax positions for which we have existing accrued liabilities.

Based on information currently available, we anticipate that over the next 12-month period, audit activity could be completed related to uncertain tax positions in multiple jurisdictions for which we have accrued liabilities of approximately $ 114 , including interest and penalties.

We recognize the additional accrual of any possible related interest and penalties relating to the underlying uncertain tax position in income tax expense.

As of June 30, 2025 and 2024, we had accrued interest of $ 141 and $ 111 and accrued penalties of $ 45 and $ 15 , respectively, which are not included in the above table.

During the fiscal years ended June 30, 2024, 2023 and 2022, we recognized $ 18 , $ 23 and $ 21 in interest expense and $ 4 , $ 1 and $ 2 in penalties expense, respectively.

Deferred income tax assets and liabilities were comprised of the following:

6 unchanged sentences

Stock-based compensation 445 433

Unrealized loss on financial and foreign exchange transactions 358 107

Fixed assets 230 206

Lease liabilities 212 199

Unrealized loss on financial and foreign exchange transactions 107 282

Other 758 843

5 unchanged sentences

Other retiree benefits 1,102 1,319

Unrealized gain on financial and foreign exchange transactions 263 198

Lease right-of-use assets 209 196

Foreign withholding tax on earnings to be repatriated 131 104

Unrealized gain on financial and foreign exchange transactions 96 263

Other 492 441

6 unchanged sentences

Diluted net earnings per common share are calculated by dividing Net earnings attributable to Procter & Gamble by the diluted weighted average number of common shares outstanding during the period.

The diluted shares include the dilutive effect of stock options and other share-based awards based on the treasury stock method (see Note 7) and the assumed conversion of preferred stock (see Note 8).

The diluted shares include the dilutive effect of stock options and other unvested stock-based awards based on the treasury stock method (see Note 7) and the assumed conversion of preferred stock (see Note 8).

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

3 unchanged sentences

CONSOLIDATED AMOUNTS

Net earnings $ 14,974 $ 14,738 $ 14,793

Net earnings attributable to noncontrolling interests 95 85 51

Net earnings attributable to P&G 14,879 14,653 14,742

Net earnings attributable to P&G (Diluted) $ 15,974 $ 14,879 $ 14,653

Preferred dividends 291 284 282

Net earnings attributable to P&G available to common shareholders (Basic) $ 15,682 $ 14,595 $ 14,371

Net earnings attributable to P&G available to common shareholders (Diluted) $ 14,879 $ 14,653 $ 14,742

SHARES IN MILLIONS

9 unchanged sentences

Diluted $ 6.51 $ 6.02 $ 5.90

(1) Excludes 4 million, 19 million and 11 million in 2024, 2023 and 2022, respectively, of weighted average stock options outstanding because the exercise price of these options was greater than the average market value of the Company's stock or their effect was antidilutive.

(1) For the years ended June 30, 2025, 2024 and 2023, the weighted average of stock options that were antidilutive and not included in the diluted net earnings per share calculation were 6 million, 4 million and 19 million, respectively.

(2) An overview of preferred shares can be found in Note 8.

82 unchanged sentences

DC plan) comprises the majority of the expense for the Company's defined contribution plans.

DC plan, the contribution rate is set annually.

Total contributions for this plan approximated 13 % of total participants' annual wages and salaries in 2024 and 2023 and 14 % in 2022.

DC plan, the contribution rate is predetermined and reflects years of service and plan participation.

Total contributions for this plan approximated 12 % of total participants' annual wages and salaries in 2025 and 13 % in 2024 and 2023.

We maintain The Procter & Gamble Profit Sharing Trust (Trust) and Employee Stock Ownership Plan (ESOP) to provide a portion of the funding for the U.S.

DC plan and other retiree benefits (described below).

DC plan and U.S.

other retiree benefits (described below).

Operating details of the ESOP are provided at the end of this Note.

The fair value of the ESOP Series A shares allocated to participants reduces our cash contribution required to fund the U.S.

Defined Benefit Retirement Plans and Other Retiree Benefits

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(4) Represents the net impact of ESOP debt service requirements, which is netted against plan assets for other retiree benefits.

The actuarial gain for pension plans in 2025 was primarily related to increases in discount rates and updates of various assumptions in the plan.

The actuarial loss for other retiree benefits in 2025 was primarily related to updates in assumptions for medical claims costs.

The actuarial gain for pension benefits in 2024 was primarily related to updating of various assumptions in the plan, offset by updates in work experience and decreases in discount rates.

The actuarial gain for other retiree benefits in 2024 was primarily related to updating various assumptions in the plan based work experience and an increase in discount rates.

The actuarial gain for pension plans in 2023 was primarily related to increases in discount rates, offset by inflation-related pension benefit increases.

The actuarial gain for other retiree benefits in 2023 was primarily related to increases in discount rates and a decrease in assumptions for medical claims costs.

The underfunding of pension benefits is primarily a function of the different funding incentives that exist outside of the U.S.

1 unchanged sentence

In these instances, benefit payments are typically paid directly from the Company's cash as they become due.

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

The Procter & Gamble Company 55

Pension Benefits Other Retiree Benefits

9 unchanged sentences

NET AMOUNTS RECOGNIZED IN AOCI $ 1,444 $ 1,398 $ ( 387 ) $ ( 2,148 )

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

The Procter & Gamble Company 55

The accumulated benefit obligation for all defined benefit pension plans, which differs from the projected obligation in that it excludes the assumption of future salary increases, was $ 12.5 billion and $ 11.6 billion as of June 30, 2025 and 2024, respectively.

10 unchanged sentences

Fair value of plan assets 70 79

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

56 The Procter & Gamble Company

Net Periodic Benefit Cost .

22 unchanged sentences

All other components are included in the Consolidated Statements of Earnings in Other non-operating income, net, unless otherwise noted.

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

56 The Procter & Gamble Company

Assumptions .

19 unchanged sentences

(1) Determined as of beginning of fiscal year.

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

The Procter & Gamble Company 57

For plans that make up the majority of our obligation, the Company calculates the benefit obligation and the related impacts on service and interest costs using specific spot rates along the corporate bond yield curve.

11 unchanged sentences

Investment risk is carefully controlled with plan assets rebalanced to target allocations on a periodic basis and with continual monitoring of investment managers' performance relative to the investment guidelines established with each investment manager.

Our target asset allocation for the fiscal year ended June 30, 2024, and actual asset allocation by asset category as of June 30, 2024 and 2023, were as follows:

Target Asset Allocation Actual Asset Allocation at June 30

Our target asset allocation for the fiscal year ended June 30, 2025, was as follows:

Target Asset Allocation (1)

Pension Benefits Other Retiree

Benefits Pension Benefits Other Retiree Benefits

Asset Category

Cash 1 % 2 % 2 % 1 % 2 % 2 %

Debt securities 64 % 1 %

1 unchanged sentence

TOTAL 100 % 100 %

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

The Procter & Gamble Company 57

The following table sets forth the fair value of the Company's plan assets as of June 30, 2024 and 2023, segregated by level within the fair value hierarchy (refer to Note 9 for further discussion on the fair value hierarchy and fair value principles).

(1) Actual allocations approximated the targets.

The following table sets forth the fair value of the Company's plan assets as of June 30, 2025 and 2024, segregated by level within the fair value hierarchy (see Note 9 for further discussion on the fair value hierarchy and fair value principles).

Investments valued using net asset value as a practical expedient are not valued using the fair value hierarchy, but rather valued using the net asset value reported by the managers of the funds and as supported by the unit prices of actual purchase and sale transactions.

9 unchanged sentences

Insurance contracts (3)

3 207 165 — —

TOTAL ASSETS IN THE FAIR VALUE HIERARCHY 1,312 1,508 7,718 7,966

7 unchanged sentences

(4) Investments valued using net asset value as a practical expedient are primarily equity and fixed income collective funds.

Management's best estimate of cash requirements and discretionary contributions for the defined benefit retirement plans and other retiree benefit plans for the fiscal year ending June 30, 2025, is $ 180 and $ 53 , respectively.

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

58 The Procter & Gamble Company

Management's best estimate of cash requirements and discretionary contributions for the pension benefits and other retiree benefit plans for the fiscal year ending June 30, 2026, is $ 218 and $ 54 , respectively.

Expected contributions are dependent on many variables, including the variability of the market value of the plan assets as compared to the benefit obligation and other market or regulatory conditions.

19 unchanged sentences

The original borrowings of $ 1.0 billion were repaid in 2021.

Debt service requirements were funded by preferred stock dividends, cash contributions and advances provided by the Company, of

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

58 The Procter & Gamble Company

which $ 737 are outstanding at June 30, 2024.

Debt service requirements were funded by preferred stock dividends, cash contributions and advances provided by the Company, of which $ 672 are outstanding at June 30, 2025.

Each share is convertible at the option of the holder into one share of the Company's common stock.

18 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.

We evaluate exposures on a centralized basis to take advantage of natural exposure correlation and netting.

We evaluate exposures on a centralized basis to take advantage of natural

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

The Procter & Gamble Company 59

exposure correlation and netting.

To the extent we choose to manage volatility associated with the net exposures, we enter into various financial transactions that we account for using the applicable accounting guidance for derivative instruments and hedging activities.

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We have not incurred, and do not expect to incur, material credit losses on our risk management or other financial instruments.

Substantially all of the Company's financial instruments used in hedging transactions are governed by industry standard netting and collateral agreements with counterparties.

Certain of the Company's financial instruments used in hedging transactions are governed by industry standard netting and collateral agreements with counterparties.

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.

6 unchanged sentences

For fair value hedges, the changes in the fair value of both the hedging instruments and the underlying debt obligations are immediately recognized in earnings.

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

The Procter & Gamble Company 59

Foreign Currency Risk Management

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Observable market-based inputs or unobservable inputs that are corroborated by market data.

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

60 The Procter & Gamble Company

Unobservable inputs reflecting the reporting entity's own assumptions or external inputs from inactive markets.

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Fair values are generally estimated based on quoted market prices for identical or similar instruments.

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

60 The Procter & Gamble Company

Disclosures about Financial Instruments

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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 $ 11.2 billion and $ 11.9 billion as of June 30, 2025 and 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.

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

Derivative liabilities are presented in Accrued and other liabilities or Other noncurrent liabilities.

Changes in the fair value of net investment hedges are recognized in the Foreign currency translation component of Other comprehensive income (OCI).

Changes in the fair value of net investment hedges are recognized in the Foreign currency translation component of OCI.

All of the Company's derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy.

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

The Procter & Gamble Company 61

Before tax gains/(losses) on our financial instruments in hedging relationships are categorized as follows:

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Foreign currency contracts $ 66 $ ( 91 )

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

The gains 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 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).

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

The Procter & Gamble Company 61

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 SG&A.

SHORT-TERM AND LONG-TERM DEBT

6 unchanged sentences

(1) Weighted average interest rate of debt due within one year includes the effects of interest rate swaps discussed in Note 9.

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

62 The Procter & Gamble Company

As of June 30 2025 2024

LONG-TERM DEBT

3.10 % USD note due August 2023

1.13 % EUR note due November 2023

0.50 % EUR note due October 2024

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4.35 % USD note due January 2029

1.80 % GBP note due May 2029

4.15 % USD note due October 2029

1.25 % EUR note due October 2029

3.00 % USD note due March 2030

4.05 % USD note due May 2030

0.35 % EUR note due May 2030

6 unchanged sentences

3.20 % EUR note due April 2034

4.55 % USD note due October 2034

4.60 % USD note due May 2035

5.55 % USD note due March 2037

7 unchanged sentences

(1) Weighted average interest rate of long-term debt includes the effects of interest rate swaps discussed in Note 9.

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

62 The Procter & Gamble Company

Long-term debt maturities during the next five fiscal years are as follows:

3 unchanged sentences

We maintain bank credit facilities to support our ongoing commercial paper program.

The current facility is an $ 8.0 billion facility split between a $ 3.2 billion five-year facility and a $ 4.8 billion 364-day facility, which expire in November 2028 and October 2024, respectively.

The current facility is an $ 8.0 billion facility split between a $ 3.2 billion five-year facility and a $ 4.8 billion 364-day facility, which expire in October 2029 and

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

The Procter & Gamble Company 63

October 2025, respectively.

Both facilities can be extended for certain periods of time as specified in the terms of the credit agreement.

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BALANCE AT JUNE 30, 2025, NET OF TAX $ 9 $ ( 777 ) $ ( 11,375 ) $ ( 12,143 )

Foreign currency translation includes financial statement translation and changes in fair value of net investment hedges (see Note 9).

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, net and included in the computation of net periodic postretirement costs (see Note 8).

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

These amounts relate to accumulated foreign currency translation losses recognized due to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria (see Note 3).

• Postretirement benefit plan amounts are reclassified from AOCI into Other non-operating income, net and included in the computation of net periodic postretirement costs/(credit) (see Note 8).

• Foreign currency translation amounts are reclassified from AOCI into Other non-operating income, net, upon the substantial liquidation of foreign operations.

These accumulated foreign currency translation losses include non-cash charges due to the substantial liquidation of operations in certain Enterprise markets, including Argentina in 2025 and Nigeria in 2024 (see Note 3).

The Company determines whether a contract contains a lease at the inception of a contract by determining if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration.

5 unchanged sentences

The Company does not have any material finance leases or sublease activities.

Short-term leases, defined

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

The Procter & Gamble Company 63

as leases with initial terms of 12 months or less, are not reflected on the Consolidated Balance Sheets.

Short-term leases, defined as leases with initial terms of 12 months or less, are not reflected on the Consolidated Balance Sheets.

Lease expense for such short-term leases is not material.

1 unchanged sentence

For purposes of calculating lease liabilities for such leases, we have combined lease and non-lease components.

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

64 The Procter & Gamble Company

The components of the Company’s total operating lease cost for the fiscal years ended June 30, 2025, 2024 and 2023, were as follows:

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At June 30, 2025, future payments of operating lease liabilities were as follows:

Operating Leases

June 30, 2025

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In conjunction with certain transactions, primarily divestitures, we may provide routine indemnifications (e.g., indemnification for representations and warranties and retention of previously existing environmental, tax and employee liabilities) for which terms range in duration and, in some circumstances, are not explicitly defined.

The maximum obligation under some

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

64 The Procter & Gamble Company

indemnifications is also not explicitly stated and, as a result, the overall amount of these obligations cannot be reasonably estimated.

The maximum obligation under some indemnifications is also not explicitly stated and, as a result, the overall amount of these obligations cannot be reasonably estimated.

We have not made significant payments for these indemnifications.

We believe that if we were to incur a loss on any of these matters, the loss would not have a material effect on our financial position, results of operations or cash flows.

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

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In certain situations, we guarantee loans for suppliers and customers.

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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 June 30, 2024 and $ 5.7 billion as of June 30, 2023.

SUBSEQUENT EVENT

On July 1, 2024, the Company completed the divestiture of its business in Argentina.

The Company expects to record a non-cash charge of approximately $ 750 for accumulated foreign currency translation losses in the first quarter of the fiscal year ended June 30, 2025.

The summary of the Company's outstanding obligation confirmed as valid under the SCF program is as follows:

CONFIRMED OBLIGATIONS OUTSTANDING AT JUNE 30, 2024 $ 5,559

Invoices confirmed 17,132

Confirmed invoices paid ( 16,999 )

Translation and other 98

CONFIRMED OBLIGATIONS OUTSTANDING AT JUNE 30, 2025 $ 5,790

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

3 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-K

Item 8. Financial Statements and Supplementary Data