PROCTER & GAMBLE Co 10-Q

Item 1. Financial Statements THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS Three Months Ended December 31 Six Months Ended December 31 Amounts in millions except per share amounts 2025 2024 2025 2024 NET SALES $ 22,208 $ 21,882 $ 44,594 $ 43,619 Cost of products sold 10,834 10,418 21,721 20,839 Selling, general and administrative expense 6,008 5,723 11,651 11,242 OPERATING INCOME 5,366 5,741 11,222 11,538 Interest expense ( 220 ) ( 240 ) ( 417 ) ( 478 ) Interest income 115 119 222 254 Other non-operating income/(expense), net 160 224 427 ( 330 ) EARNINGS BEFORE INCOME TAXES 5,421 5,845 11,455 10,985 Income taxes 1,090 1,187 2,343 2,339 NET EARNINGS 4,331 4,659 9,112 8,646 Less: Net earnings attributable to noncontrolling interests 12 29 42 56 NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE $ 4,319 $ 4,630 $ 9,070 $ 8,589 NET EARNINGS PER COMMON SHARE (1) Basic $ 1.82 $ 1.94 $ 3.82 $ 3.59 Diluted $ 1.78 $ 1.88 $ 3.73 $ 3.49 (1) Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter & Gamble. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three Months Ended December 31 Six Months Ended December 31 Amounts in millions 2025 2024 2025 2024 NET EARNINGS $ 4,331 $ 4,659 $ 9,112 $ 8,646 OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX Foreign currency translation 45 ( 770 ) 25 256 Unrealized gains/(losses) on investment securities 2 — 1 1 Unrealized gains/(losses) on defined benefit postretirement plans ( 2 ) 24 1 3 TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX 46 ( 747 ) 27 260 TOTAL COMPREHENSIVE INCOME 4,377 3,912 9,139 8,906 Less: Comprehensive income attributable to noncontrolling interests 10 26 34 54 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER & GAMBLE $ 4,367 $ 3,887 $ 9,105 $ 8,852 See accompanying Notes to Consolidated Financial Statements. 2 The Procter & Gamble Company THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS Amounts in millions December 31, 2025 June 30, 2025 Assets CURRENT ASSETS Cash and cash equivalents $ 10,825 $ 9,556 Accounts receivable 6,279 6,185 INVENTORIES Materials and supplies 2,139 2,022 Work in process 1,007 1,012 Finished goods 4,672 4,516 Total inventories 7,817 7,551 Prepaid expenses and other current assets 1,666 2,100 TOTAL CURRENT ASSETS 26,588 25,392 PROPERTY, PLANT AND EQUIPMENT, NET 24,487 23,897 GOODWILL 41,665 41,650 TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET 21,737 21,910 OTHER NONCURRENT ASSETS 12,809 12,381 TOTAL ASSETS $ 127,286 $ 125,231 Liabilities and Shareholders' Equity CURRENT LIABILITIES Accounts payable $ 15,173 $ 15,227 Accrued and other liabilities 10,463 11,318 Debt due within one year 11,062 9,513 TOTAL CURRENT LIABILITIES 36,699 36,058 LONG-TERM DEBT 25,577 24,995 DEFERRED INCOME TAXES 5,974 5,774 OTHER NONCURRENT LIABILITIES 5,719 6,120 TOTAL LIABILITIES 73,969 72,946 SHAREHOLDERS’ EQUITY Preferred stock 767 777 Common stock – shares issued – December 2025 4,009.2 June 2025 4,009.2 4,009 4,009 Additional paid-in capital 69,010 68,770 Reserve for ESOP debt retirement ( 637 ) ( 672 ) Accumulated other comprehensive loss ( 12,108 ) ( 12,143 ) Treasury stock ( 141,981 ) ( 138,702 ) Retained earnings 133,981 129,973 Noncontrolling interest 276 272 TOTAL SHAREHOLDERS’ EQUITY 53,317 52,284 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 127,286 $ 125,231 See accompanying Notes to Consolidated Financial Statements. The Procter & Gamble Company 3 THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Three Months Ended December 31, 2025 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 SEPTEMBER 30, 2025 2,336,734 $ 4,009 $ 770 $ 68,917 ($ 637 ) ($ 12,156 ) ($ 139,845 ) $ 132,212 $ 281 $ 53,551 Net earnings 4,319 12 4,331 Other comprehensive income/(loss) 48 ( 2 ) 46 Dividends and dividend equivalents ($ 1.0568 per share): Common ( 2,478 ) ( 2,478 ) Preferred ( 73 ) ( 73 ) Treasury stock purchases ( 15,566 ) ( 2,271 ) ( 2,271 ) Employee stock plans 2,350 92 132 224 Preferred stock conversions 483 ( 3 ) — 3 — ESOP debt impacts — — — Noncontrolling interest, net — ( 14 ) ( 14 ) BALANCE DECEMBER 31, 2025 2,324,001 $ 4,009 $ 767 $ 69,010 ($ 637 ) ($ 12,108 ) ($ 141,981 ) $ 133,981 $ 276 $ 53,317 Six Months Ended December 31, 2025 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, 2025 2,341,994 $ 4,009 $ 777 $ 68,770 ($ 672 ) ($ 12,143 ) ($ 138,702 ) $ 129,973 $ 272 $ 52,284 Net earnings 9,070 42 9,112 Other comprehensive income/(loss) 35 ( 8 ) 27 Dividends and dividend equivalents ($ 2.1136 per share): Common ( 4,960 ) ( 4,960 ) Preferred ( 146 ) ( 146 ) Treasury stock purchases ( 23,591 ) ( 3,529 ) ( 3,529 ) Employee stock plans 4,304 238 242 480 Preferred stock conversions 1,294 ( 10 ) 1 9 — ESOP debt impacts 35 44 79 Noncontrolling interest, net — ( 30 ) ( 30 ) BALANCE DECEMBER 31, 2025 2,324,001 $ 4,009 $ 767 $ 69,010 ($ 637 ) ($ 12,108 ) ($ 141,981 ) $ 133,981 $ 276 $ 53,317 See accompanying Notes to Consolidated Financial Statements. 4 The Procter & Gamble Company Three 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 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 Net earnings 8,589 56 8,646 Other comprehensive income/(loss) 263 ( 3 ) 260 Dividends and dividend equivalents ($ 2.0130 per share): Common ( 4,754 ) ( 4,754 ) Preferred ( 144 ) ( 144 ) Treasury stock purchases ( 26,269 ) ( 4,462 ) ( 4,462 ) Employee stock plans 12,827 598 720 1,318 Preferred stock conversions 1,243 ( 10 ) 1 9 — ESOP debt impacts 30 41 71 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. The Procter & Gamble Company 5 THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended December 31 Amounts in millions 2025 2024 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD $ 9,556 $ 9,482 OPERATING ACTIVITIES (1) Net earnings 9,112 8,646 Depreciation and amortization 1,563 1,434 Share-based compensation expense 262 241 Deferred income taxes 196 221 (Gain)/loss on sale of assets 1 787 Change in accounts receivable ( 92 ) ( 262 ) Change in inventories ( 255 ) ( 170 ) Change in accounts payable 239 ( 286 ) Other ( 645 ) ( 1,484 ) TOTAL OPERATING ACTIVITIES 10,380 9,127 INVESTING ACTIVITIES Capital expenditures ( 2,367 ) ( 1,918 ) Proceeds from asset sales 16 47 Acquisitions, net of cash acquired ( 5 ) ( 6 ) Other investing activity ( 408 ) ( 153 ) TOTAL INVESTING ACTIVITIES ( 2,763 ) ( 2,029 ) FINANCING ACTIVITIES Dividends to shareholders ( 5,093 ) ( 4,886 ) Additions to short-term debt with original maturities of more than three months 4,180 5,905 Reductions in short-term debt with original maturities of more than three months ( 3,270 ) ( 571 ) Net additions/(reductions) to other short-term debt ( 471 ) ( 2,705 ) Additions to long-term debt 2,652 995 Reductions in long-term debt ( 1,005 ) ( 1,478 ) Treasury stock purchases ( 3,528 ) ( 4,449 ) Impact of stock options and other 208 985 TOTAL FINANCING ACTIVITIES ( 6,327 ) ( 6,205 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 21 ) ( 144 ) CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 1,269 748 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 10,825 $ 10,230 (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. 6 The Procter & Gamble Company THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The accompanying unaudited Consolidated Financial Statements of The Procter & Gamble Company and subsidiaries ("the Company," "Procter & Gamble," "P&G," "we" or "our") should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025. We have prepared these statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC) for interim financial information. Note that certain columns and rows may not add due to rounding. In the opinion of management, the accompanying Consolidated Financial Statements contain all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods reported. However, the results of operations included in such financial statements may not necessarily be indicative of annual results. 2. New Accounting Pronouncements and Policies In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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. This amendment is effective for our fiscal year ending June 30, 2026. This guidance will require additional disclosures in the Income Tax 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. In September 2025, the FASB issued ASU No. 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software”. This guidance amends the accounting for and disclosure of software costs. This amendment is effective for our fiscal year ending June 30, 2029 and the interim periods within that fiscal year. We are currently assessing the impact of this guidance on our Consolidated Financial Statements. In December 2025, the FASB issued ASU No. 2025-10, “Accounting for Government Grants Received by Business Entities”. This amendment provides guidance on the recognition, measurement, and presentation of government grants. This amendment is effective for our fiscal year ending June 30, 2030 and the interim periods within that fiscal year. We are currently assessing the impact of this guidance on our Consolidated Financial Statements. 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. 3. Segment Information Under U.S. GAAP, our operating segments are aggregated into five reportable segments: 1) Beauty, 2) Grooming, 3) Health Care, 4) Fabric & Home Care and 5) Baby, Feminine & Family Care. Our five reportable segments are comprised of: • Beauty : Hair Care (Conditioners, Shampoos, Styling Aids, Treatments); Personal Care (Antiperspirants and Deodorants, Personal Cleansing); Skin Care (Facial Moisturizers, Cleaners and Treatments); • Grooming : Grooming (Appliances, Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other Grooming); • Health Care : Oral Care (Toothbrushes, Toothpastes, Other Oral Care); Personal Health Care (Gastrointestinal, Pain Relief, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, Other Personal Health Care); • Fabric & Home Care : Fabric Care (Fabric Enhancers, Laundry Additives, Laundry Detergents); Home Care (Air Care, Dish Care, P&G Professional, Surface Care); and • Baby, Feminine & Family Care : Baby Care (Baby Wipes, Taped Diapers and Pants); Feminine Care (Adult Incontinence, Menstrual Care); Family Care (Paper Towels, Tissues, Toilet Paper). Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 7 Operating segments as a percentage of consolidated net sales are as follows: % of Net sales by operating segment (1) Three Months Ended December 31 Six Months Ended December 31 2025 2024 2025 2024 Fabric Care 23 % 23 % 23 % 23 % Home Care 12 % 12 % 12 % 12 % Baby Care 9 % 9 % 9 % 9 % Hair Care 9 % 9 % 9 % 9 % Oral Care 9 % 9 % 8 % 8 % Family Care 8 % 9 % 8 % 9 % Grooming 8 % 8 % 8 % 8 % Personal Health Care 7 % 6 % 7 % 7 % Feminine Care 6 % 6 % 6 % 6 % Personal Care 5 % 5 % 6 % 6 % Skin Care 4 % 4 % 4 % 3 % Total 100 % 100 % 100 % 100 % (1) % of Net sales by operating segment excludes sales recorded in Corporate. The following is a summary of reportable segment results: Three Months Ended December 31, 2025 Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company Net sales $ 4,039 $ 1,794 $ 3,406 $ 7,686 $ 5,123 $ 160 $ 22,208 Cost of products sold ( 1,557 ) ( 732 ) ( 1,373 ) ( 4,064 ) ( 2,762 ) ( 346 ) ( 10,834 ) Selling, general and administrative expense ( 1,490 ) ( 531 ) ( 1,020 ) ( 1,661 ) ( 1,023 ) ( 284 ) ( 6,008 ) Other segment items (1) — — ( 3 ) — — 58 55 Earnings/(loss) before income taxes 992 531 1,009 1,961 1,338 ( 412 ) 5,421 Net earnings/(loss) $ 763 $ 417 $ 770 $ 1,521 $ 1,020 $ ( 161 ) $ 4,331 Other segment information Depreciation and amortization $ 103 $ 78 $ 108 $ 186 $ 207 $ 121 $ 803 Capital expenditures $ 86 $ 128 $ 139 $ 318 $ 361 $ 135 $ 1,167 (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. 8 The Procter & Gamble Company Three Months Ended December 31, 2024 Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company Net sales $ 3,848 $ 1,752 $ 3,249 $ 7,575 $ 5,298 $ 159 $ 21,882 Cost of products sold ( 1,462 ) ( 681 ) ( 1,284 ) ( 3,936 ) ( 2,820 ) ( 235 ) ( 10,418 ) Selling, general and administrative expense ( 1,390 ) ( 504 ) ( 991 ) ( 1,649 ) ( 1,014 ) ( 175 ) ( 5,723 ) Other segment items (1) — — — ( 1 ) — 104 104 Earnings/(loss) before income taxes 996 568 974 1,989 1,464 ( 146 ) 5,845 Net earnings/(loss) $ 780 $ 459 $ 758 $ 1,567 $ 1,119 $ ( 24 ) $ 4,659 Other segment information Depreciation and amortization $ 101 $ 77 $ 101 $ 180 $ 202 $ 46 $ 706 Capital expenditures $ 69 $ 86 $ 135 $ 267 $ 261 $ 107 $ 925 (1) Other segment items for each reportable segment includes interest expense, interest income and certain other non-operating income/(expense). Six Months Ended December 31, 2025 Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company Net sales $ 8,182 $ 3,611 $ 6,626 $ 15,479 $ 10,294 $ 402 $ 44,594 Cost of products sold ( 3,181 ) ( 1,475 ) ( 2,716 ) ( 8,208 ) ( 5,532 ) ( 607 ) ( 21,721 ) Selling, general and administrative expense ( 2,877 ) ( 1,020 ) ( 1,965 ) ( 3,268 ) ( 1,978 ) ( 544 ) ( 11,651 ) Other segment items (1) — — 3 — — 230 233 Earnings/(loss) before income taxes 2,124 1,117 1,947 4,003 2,784 ( 520 ) 11,455 Net earnings/(loss) $ 1,643 $ 881 $ 1,489 $ 3,100 $ 2,125 $ ( 125 ) $ 9,112 Other segment information Depreciation and amortization $ 205 $ 158 $ 213 $ 371 $ 413 $ 204 $ 1,563 Capital expenditures $ 160 $ 260 $ 248 $ 600 $ 635 $ 463 $ 2,367 (1) Other segment items for each reportable segment includes interest expense, interest income and certain other non-operating income/(expense). Six Months Ended December 31, 2024 Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company Net sales $ 7,741 $ 3,475 $ 6,397 $ 15,285 $ 10,400 $ 322 $ 43,619 Cost of products sold ( 2,956 ) ( 1,387 ) ( 2,543 ) ( 7,941 ) ( 5,550 ) ( 463 ) ( 20,839 ) Selling, general and administrative expense ( 2,722 ) ( 999 ) ( 1,926 ) ( 3,277 ) ( 2,003 ) ( 315 ) ( 11,242 ) Other segment items (1) ( 1 ) — — — — ( 553 ) ( 554 ) Earnings/(loss) before income taxes 2,063 1,090 1,928 4,066 2,847 ( 1,009 ) 10,985 Net earnings/(loss) $ 1,620 $ 885 $ 1,499 $ 3,188 $ 2,185 $ ( 731 ) $ 8,646 Other segment information Depreciation and amortization $ 200 $ 160 $ 198 $ 358 $ 406 $ 112 $ 1,434 Capital expenditures $ 118 $ 181 $ 218 $ 471 $ 459 $ 472 $ 1,918 (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. Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 9 The Chief Operating Decision Maker (CODM) does not use assets by segment to evaluate performance or allocate resources. Therefore, we do not disclose assets by segment. 4. Goodwill and Intangible Assets Goodwill is allocated by reportable segment as follows: Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Total Company GOODWILL AT JUNE 30, 2025 $ 14,229 $ 12,993 $ 7,941 $ 1,848 $ 4,640 $ 41,650 Acquisitions and divestitures — — — — — — Translation and other 5 7 ( 2 ) 2 3 15 GOODWILL AT DECEMBER 31, 2025 $ 14,234 $ 12,999 $ 7,939 $ 1,850 $ 4,643 $ 41,665 Goodwill increased from June 30, 2025, primarily due to currency translation. Identifiable intangible assets at December 31, 2025, were comprised of: Gross Carrying Amount Accumulated Amortization Intangible assets with determinable lives $ 9,183 $ ( 7,157 ) Intangible assets with indefinite lives 19,710 — Total identifiable intangible assets $ 28,893 $ ( 7,157 ) Intangible assets with determinable lives consist of brands, patents, technology and customer relationships. 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, 2025 and 2024, was $ 77 and $ 80 , respectively. For the six months ended December 31, 2025 and 2024, amortization expense was $ 156 and $ 163 , respectively. Goodwill and indefinite-lived intangible assets are not amortized but are tested at least annually for impairment. We use the income method to estimate the fair value of these assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. When appropriate, the market approach, which leverages comparable company revenue and earnings multiples, is weighted with the income approach to estimate fair value. If the resulting fair value is less than the asset's carrying value, that difference represents an impairment. Our annual impairment testing for goodwill and indefinite-lived intangible assets occurs during the three months ended December 31. 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. Based on our impairment testing performed during the three months ended December 31, 2025, the Gillette indefinite-lived intangible asset's fair value exceeds its carrying value by greater than 10 %. As of December 31, 2025, 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 an impairment charge. The most significant assumptions utilized in the determination of the estimated fair value of the Gillette indefinite-lived intangible asset are the net sales growth rates (including residual growth rate), discount rate and royalty rate. Net sales growth rates could be negatively impacted by reductions or changes in demand for our Gillette products, which may be caused by, among other things: changes in the use and frequency of grooming products, shifts in demand away from one or more of our higher priced products to lower priced products or potential supply chain constraints. In addition, relative global and country/regional macroeconomic factors could result in additional and prolonged devaluation of other countries' currencies relative to the U.S. dollar. The residual growth rate represents the expected rate at which the Gillette brand is expected to grow beyond the shorter-term business planning period. The residual growth rate utilized in our fair value estimates is consistent with the brand operating plans and approximates expected long-term category market growth rates. The residual growth rate depends on overall market growth rates, the competitive environment, inflation, relative currency exchange rates and business activities that impact market share. As a result, the residual growth rate could be adversely impacted by a sustained deceleration in category growth, grooming habit changes, devaluation of currencies against the U.S. dollar or an increased competitive environment. The discount rate is based on a weighted average cost of capital that is likely to be expected by a market participant, including consideration of both debt and equity components of the capital structure. Our discount rate may be impacted by adverse changes in the macroeconomic environment, volatility in the equity and debt markets or other country specific factors, such as further devaluation of currencies against the U.S. dollar. Spot rates as of the fair value measurement date are utilized in our fair value estimates for cash flows outside the U.S. Amounts in millions of dollars except per share amounts or as otherwise specified. 10 The Procter & Gamble Company The royalty rate used to determine the estimated fair value for the Gillette indefinite-lived intangible asset is driven by historical and estimated future profitability of the underlying Gillette business. The royalty rate may be impacted by significant adverse changes in long-term operating margins. 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, 2025, 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. Approximate Percent Change in Estimated Fair Value +25 bps Discount Rate -25 bps Growth Rates -50 bps Royalty Rate Gillette indefinite-lived intangible asset ( 5 ) % ( 5 ) % ( 4 ) % 5. Earnings Per Share Basic net earnings per common share are calculated by dividing Net earnings attributable to Procter & Gamble less preferred dividends by the weighted average number of common shares outstanding during the period. 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 and the assumed conversion of preferred stock. Net earnings per common share were calculated as follows: CONSOLIDATED AMOUNTS Three Months Ended December 31 Six Months Ended December 31 2025 2024 2025 2024 Net earnings attributable to P&G (Diluted) $ 4,319 $ 4,630 $ 9,070 $ 8,589 Less: Preferred dividends 73 72 146 144 Net earnings attributable to P&G available to common shareholders (Basic) $ 4,247 $ 4,558 $ 8,924 $ 8,445 SHARES IN MILLIONS Basic weighted average common shares outstanding 2,335.3 2,351.9 2,338.7 2,354.1 Add effect of dilutive securities: Stock options and other unvested equity awards (1) 20.0 34.9 22.7 36.4 Convertible preferred shares (2) 68.7 71.3 69.0 71.6 Diluted weighted average common shares outstanding 2,424.0 2,458.1 2,430.4 2,462.1 NET EARNINGS PER COMMON SHARE Basic $ 1.82 $ 1.94 $ 3.82 $ 3.59 Diluted $ 1.78 $ 1.88 $ 3.73 $ 3.49 (1) For the three months ended December 31, 2025 and 2024, the weighted average of stock options that were antidilutive and not included in the diluted net earnings per share calculation were 23 million and 8 million, respectively. For the six months ended December 31, 2025 and 2024, the weighted average of stock options that were antidilutive and not included in the diluted net earnings per share calculation were 19 million and 4 million, respectively. (2) An overview of preferred shares can be found in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. 6. 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 2025 2024 2025 2024 Share-based compensation expense $ 140 $ 136 $ 262 $ 241 Net periodic benefit cost for pension benefits 26 26 65 63 Net periodic benefit (credit) for other retiree benefits ( 149 ) ( 180 ) ( 302 ) ( 360 ) 7. Risk Management Activities and Fair Value Measurements 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, 2025. Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 11 The Company has not changed its valuation techniques used in measuring the fair value of any financial assets and liabilities during the period. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers between levels during the periods presented. Also, there was no significant activity within the Level 3 assets and liabilities during the periods presented. There were no significant assets or liabilities that were re-measured at fair value on a non-recurring basis during the periods presented. Cash equivalents were $ 9.4 billion and $ 8.3 billion as of December 31, 2025 and June 30, 2025, 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 $ 31.3 billion and $ 29.5 billion as of December 31, 2025 and June 30, 2025, respectively. This includes the current portion of long-term debt instruments ($ 6.4 billion and $ 5.3 billion as of December 31, 2025 and June 30, 2025, respectively). Certain long-term debt (debt designated as a fair value hedge) is recorded at fair value. All other long-term debt is recorded at amortized cost but is measured at fair value for disclosure purposes. We consider our debt to be Level 2 in the fair value hierarchy. Fair values are generally estimated based on quoted market prices for identical or similar instruments. Disclosures about Financial Instruments The notional amounts and fair values of financial instruments used in hedging transactions as of December 31, 2025 and June 30, 2025, are as follows: Notional Amount Fair Value Asset Fair Value (Liability) December 31, 2025 June 30, 2025 December 31, 2025 June 30, 2025 December 31, 2025 June 30, 2025 DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS Interest rate contracts $ 5,336 $ 3,280 $ — $ — $ ( 207 ) $ ( 201 ) DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS Foreign currency interest rate contracts $ 11,992 $ 11,874 $ 3 $ — $ ( 502 ) $ ( 860 ) TOTAL DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS $ 17,328 $ 15,154 $ 3 $ — $ ( 709 ) $ ( 1,061 ) DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS Foreign currency contracts $ 4,381 $ 3,576 $ 30 $ 19 $ ( 4 ) $ — TOTAL DERIVATIVES AT FAIR VALUE $ 21,709 $ 18,730 $ 33 $ 19 $ ( 712 ) $ ( 1,062 ) 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 $ 5.1 billion and $ 3.1 billion as of December 31, 2025 and June 30, 2025, 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 $ 12.4 billion and $ 11.2 billion as of December 31, 2025 and June 30, 2025, respectively. The increase in the notional balance of interest rate contracts designated as fair value hedges is driven by debt portfolio rebalancing to meet interest rate risk management objectives. 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). All of the Company's derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy. 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. The aggregate fair value of the instruments covered by these contractual features that are in a liability position was $ 706 and $ 1.1 billion as of December 31, 2025 and June 30, 2025, respectively. The Company has not been required to post collateral as a result of these contractual features. Amounts in millions of dollars except per share amounts or as otherwise specified. 12 The Procter & Gamble Company Before tax gains and losses on our financial instruments in hedging relationships are categorized as follows: Amount of Gain/(Loss) Recognized in OCI on Derivatives Three Months Ended December 31 Six Months Ended December 31 2025 2024 2025 2024 DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS (1) (2) Foreign currency interest rate contracts $ ( 17 ) $ 857 $ ( 3 ) $ 356 (1) For the derivatives in net investment hedging relationships, the amount of gain excluded from effectiveness testing, which was recognized in earnings, was $ 65 and $ 57 for the three months ended December 31, 2025 and 2024, respectively. The amount of gain excluded from effectiveness testing was $ 136 and $ 107 for the six months ended December 31, 2025 and 2024, 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 recognized in Accumulated other comprehensive income (AOCI) for such instruments was $ 9 and $ 825 for the three months ended December 31, 2025 and 2024, respectively. The amount of gain recognized in AOCI for such instruments was $ 39 and $ 215 for the six months ended December 31, 2025 and 2024, respectively. Amount of Gain/(Loss) Recognized in Earnings Three Months Ended December 31 Six Months Ended December 31 2025 2024 2025 2024 DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS Interest rate contracts $ ( 12 ) $ 34 $ ( 5 ) $ 110 DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS Foreign currency contracts $ 28 $ ( 174 ) $ 22 $ ( 48 ) 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 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). 8. Accumulated Other Comprehensive Income/(Loss) The table below presents the changes in Accumulated other comprehensive income/(loss) attributable to Procter & Gamble (AOCI), including the reclassifications out of AOCI by component: Investment Securities Postretirement Benefit Plans Foreign Currency Translation Total AOCI BALANCE AT JUNE 30, 2025, NET OF TAX $ 9 $ ( 777 ) $ ( 11,375 ) $ ( 12,143 ) Other comprehensive income/(loss), before tax: OCI before reclassifications 1 ( 12 ) 33 23 Amounts reclassified to the Consolidated Statement of Earnings — 14 — 14 Total other comprehensive income/(loss), before tax 1 2 33 36 Tax effect ( 1 ) — ( 8 ) ( 9 ) Total other comprehensive income/(loss), net of tax 1 1 25 27 Less: OCI attributable to noncontrolling interests, net of tax — — ( 9 ) ( 8 ) BALANCE AT DECEMBER 31, 2025, NET OF TAX $ 10 $ ( 776 ) $ ( 11,342 ) $ ( 12,108 ) Foreign currency translation includes financial statement translation and changes in fair value of net investment hedges (see Note 7). 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. 9. Commitments and Contingencies Litigation 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 counsel, the ultimate resolution of the various lawsuits and claims will not materially affect our financial position, results of operations or cash flows. Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 13 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. Based on currently available information, we do not believe the ultimate resolution of environmental remediation will materially affect our financial position, results of operations or cash flows. Income Tax Uncertainties 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. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law and closing of statutes of limitations. Such adjustments are reflected in the tax provision as appropriate. We have tax years open ranging from 2010 and forward. 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 anticipate 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 $ 124 , including interest and penalties. Additional information on the Commitments and Contingencies of the Company can be found in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. 10. Supplier Finance Programs The Company has an ongoing program to negotiate extended payment terms with its suppliers consistent with market practices. The Company also supports a Supply Chain Finance program (“SCF”) with several global financial institutions. Under SCF, the Company maintains an accounts payable system to facilitate participating suppliers' ability to sell receivables from the Company to a SCF bank. These participating suppliers negotiate their sales of receivables arrangements directly with the respective SCF bank. The Company is not party to those agreements, but the SCF banks allow the suppliers to utilize the Company’s creditworthiness in establishing credit spreads and associated costs. Under this model, this arrangement generally provides the suppliers with more favorable terms than they would be able to secure on their own. The Company has no economic interest in a supplier’s decision to sell a receivable. Once a qualifying supplier chooses to participate in SCF, the supplier selects which individual Company invoices to sell to the SCF bank. The Company’s obligations to its suppliers, including the amounts due and scheduled payment dates, are not impacted by the supplier’s decisions to finance amounts under these arrangements. The Company does not provide any form of guarantee under these financing arrangements. Our payment terms for suppliers under this program generally range from 60 to 180 days. 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 $ 5.8 billion as of December 31, 2025 and June 30, 2025. 11. Restructuring Program The Company has historically incurred an ongoing annual level of restructuring-type activities to maintain a competitive cost structure, including manufacturing and workforce optimization. Before tax costs incurred under the ongoing program have generally ranged from $ 250 to $ 500 annually. Consistent with our historical policies for restructuring-type activities, the restructuring program charges will be funded by and included within Corporate for management and segment reporting. In June 2025, the Company announced a portfolio and productivity plan to streamline its portfolio and organization to improve its cost structure and competitiveness. The Company expects to incur approximately $ 1.5 to $ 2.0 billion in before-tax restructuring costs over two years . The Company expects to incur half of the costs under this plan by the end of fiscal 2026, with the remainder incurred in fiscal 2027. The restructuring activities will be executed across the Sector Business Units as well as the Enterprise Markets, Corporate Functions and Global Business Services. These restructuring activities include a plan for a reduction of up to 7,000 non-manufacturing overhead personnel by the end of fiscal 2027. In addition, the plan includes brand and market exits as well as the optimization of the supply chain and other manufacturing processes. Costs incurred under the plan will consist primarily of costs to separate employees and asset-related costs to exit facilities. The Company will also incur other types of costs outlined below as a direct result of the plan. For the three months ended December 31, 2025, the Company incurred total before tax charges of $ 369 including $ 180 in Costs of products sold, $ 171 in SG&A and $ 18 in Other non-operating income/(expense), net. For the six months ended December 31, 2025, the Company incurred charges of $ 584 including $ 280 in Costs of products sold, $ 277 in SG&A and $ 27 in Other non-operating income/(expense), net. Amounts in millions of dollars except per share amounts or as otherwise specified. 14 The Procter & Gamble Company The following table presents restructuring activity for the six months ended December 31, 2025: Separations Asset Related Costs Other Total RESERVE JUNE 30, 2025 $ 120 $ — $ 69 $ 189 Costs incurred for the three months ended September 30, 2025 124 27 65 215 Costs incurred for the three months ended December 31, 2025 198 83 88 369 Costs incurred for the six months ended December 31, 2025 322 109 152 584 Costs paid/settled for the six months ended December 31, 2025 ( 172 ) ( 109 ) ( 99 ) ( 380 ) RESERVE DECEMBER 31, 2025 $ 271 $ — $ 122 $ 393 Separation Costs Employee separation costs relate to severance packages that are primarily voluntary and the amounts calculated are based on salary levels and past service periods. Asset-Related Costs 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. These assets are written down to the lower of their current carrying basis or amounts expected to be realized upon disposal, less minor disposal costs. Charges for accelerated depreciation relate to long-lived assets that will be taken out of service prior to the end of their normal service period. Other Costs Other restructuring-type charges are incurred as a direct result of the restructuring plan. Such charges include asset removal and termination of contracts related to supply chain redesign.