PROCTER & GAMBLE Co 10-K

Item 8. Financial Statements and Supplementary Data. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management is responsible for establishing and maintaining adequate internal control over financial reporting of The Procter & Gamble Company (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. Strong internal controls is an objective that is reinforced through our Worldwide Business Conduct Manual , which sets forth our commitment to conduct business with integrity, and within both the letter and the spirit of the law. Our people are deeply committed to our Purpose, Values and Principles, which unite us in doing what’s right. Our system of internal controls includes written policies and procedures, segregation of duties and the careful selection and development of employees. Additional key elements of our internal control structure include our Global Leadership Council, which is actively involved in oversight of the business strategies, initiatives, results and controls, our Disclosure Committee, which is responsible for evaluating disclosure implications of significant business activities and events, our Board of Directors, which provides strong and effective corporate governance, and our Audit Committee, which reviews critical accounting policies and estimates, financial reporting and internal control matters. Global Internal Audit performs audits of internal controls over financial reporting as well as broader financial, operational and compliance audits around the world, provides training and continually improves our internal control processes. The Company’s internal control over financial reporting also includes a robust Control Self-Assessment Program that is conducted annually on critical financial reporting areas of the Company. Management takes the appropriate action to correct any identified control deficiencies. Because of its inherent limitations, any system of internal control over financial reporting, no matter how well designed, may not prevent or detect misstatements due to the possibility that a control can be circumvented or overridden or that misstatements due to error or fraud may occur that are not detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Management assessed the effectiveness of the Company's internal control over financial reporting as of June 30, 2026, using criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and concluded that the Company maintained effective internal control over financial reporting as of June 30, 2026, based on these criteria. Deloitte & Touche LLP, an independent registered public accounting firm, has audited the effectiveness of the Company's internal control over financial reporting as of June 30, 2026, as stated in their report which is included herein. /s/ Shailesh Jejurikar (Shailesh Jejurikar) Chairman of the Board, President and Chief Executive Officer /s/ Andre Schulten (Andre Schulten) Chief Financial Officer August 4, 2026 The Procter & Gamble Company 35 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of The Procter & Gamble Company Opinion on the Financial Statements We have audited the accompanying Consolidated Balance Sheets of The Procter & Gamble Company and subsidiaries (the "Company") as of June 30, 2026 and 2025, the related Consolidated Statements of Earnings, Comprehensive Income, Shareholders' Equity, and Cash Flows, for each of the three years in the period ended June 30, 2026, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2026, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 4, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Intangible Assets — Gillette Indefinite-Lived Intangible Asset — Refer to Notes 1 and 4 to the financial statements Critical Audit Matter Description The Company’s evaluation of the Gillette indefinite-lived intangible asset (the “Gillette Brand”) for impairment involves the comparison of the fair value to its carrying value. The Company estimates fair value using the income method, which is based on the present value of estimated future cash flows attributable to the respective asset. This requires management to make significant estimates and assumptions related to the forecast of future net sales, including the growth rate beyond a 10-year time period, royalty rate and discount rate. Changes in the assumptions could have a significant impact on either the fair value, the amount of any impairment charge, or both. The Company performed their annual impairment assessment of the Gillette Brand as of October 1, 2025. Because the estimated fair value exceeded the carrying value, no impairment was recorded. As of June 30, 2026, the carrying value of the Gillette Brand was $12.8 billion. We identified the Company’s impairment evaluation of the Gillette Brand as a critical audit matter because of the significant judgments made by management to estimate the fair value of the indefinite-lived intangible asset. A high degree of auditor judgment and an increased extent of effort was required when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the forecast of future net sales as well as the selection of royalty rate and discount rate, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the forecast of future net sales and the selection of the royalty rate and discount rate for the Gillette Brand included the following, among others: • 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 the forecast of future net sales, and the selection of the royalty rate and discount rate. 36 The Procter & Gamble Company • We evaluated management's ability to accurately forecast net sales by comparing actual results to management's historical forecasts. • We evaluated the reasonableness of management’s forecast of net sales by comparing the forecast to: • Historical net sales. • Underlying analysis detailing business strategies and growth plans. • Internal communications to management and the Board of Directors. • Forecasted information included in analyst and industry reports for the Company and certain of its peer companies. • With the assistance of our fair value specialists, we evaluated the net sales growth rate, royalty rate, and discount rate by: • Testing the source information underlying the determination of the net sales growth rate, royalty rate, and discount rate and the mathematical accuracy of the calculations. • Developing a range of independent estimates for the discount rate and comparing the discount rate selected by management to that range. /s/ Deloitte & Touche LLP Cincinnati, Ohio August 4, 2026 We have served as the Company’s auditor since 1890. The Procter & Gamble Company 37 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of The Procter & Gamble Company Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of The Procter & Gamble Company and subsidiaries (the "Company") as of June 30, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2026, of the Company and our report dated August 4, 2026, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Cincinnati, Ohio August 4, 2026 See accompanying Notes to Consolidated Financial Statements. 38 The Procter & Gamble Company Consolidated Statements of Earnings Amounts in millions except per share amounts; fiscal years ended June 30 2026 2025 2024 NET SALES $ 87,032 $ 84,284 $ 84,039 Cost of products sold 43,362 41,164 40,848 Selling, general and administrative expense 23,922 22,669 23,305 Indefinite-lived intangible asset impairment charge — — 1,341 OPERATING INCOME 19,748 20,451 18,545 Interest expense ( 877 ) ( 907 ) ( 925 ) Interest income 430 469 473 Other non-operating income/(expense), net 1,076 154 668 EARNINGS BEFORE INCOME TAXES 20,377 20,167 18,761 Income taxes 4,233 4,102 3,787 NET EARNINGS 16,144 16,065 14,974 Less: Net earnings attributable to noncontrolling interests 98 91 95 NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE $ 16,046 $ 15,974 $ 14,879 NET EARNINGS PER COMMON SHARE (1) Basic $ 6.75 $ 6.67 $ 6.18 Diluted $ 6.62 $ 6.51 $ 6.02 (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 Amounts in millions; fiscal years ended June 30 2026 2025 2024 NET EARNINGS $ 16,144 $ 16,065 $ 14,974 OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX Foreign currency translation (net of tax (benefit)/expense of $ 129 , $( 442 ) and $ 66 , respectively) 96 1,143 ( 226 ) Unrealized gains/(losses) on investment securities (net of tax (benefit)/expense of $ 1 , $( 1 ) and $( 1 ), respectively) 1 — ( 3 ) Unrealized gains/(losses) on defined benefit postretirement plans (net of tax (benefit)/expense of $( 81 ), $( 407 ) and $ 230 , respectively) ( 440 ) ( 1,390 ) 546 TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX ( 343 ) ( 248 ) 317 COMPREHENSIVE INCOME 15,801 15,817 15,291 Less: Comprehensive income attributable to noncontrolling interests 77 87 92 COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER & GAMBLE $ 15,724 $ 15,730 $ 15,199 See accompanying Notes to Consolidated Financial Statements. The Procter & Gamble Company 39 Consolidated Balance Sheets Amounts in millions except stated values; as of June 30 2026 2025 Assets CURRENT ASSETS Cash and cash equivalents $ 9,942 $ 9,556 Accounts receivable 6,056 6,185 INVENTORIES Materials and supplies 2,143 2,022 Work in process 1,105 1,012 Finished goods 4,922 4,516 Total inventories 8,170 7,551 Prepaid expenses and other current assets 2,040 2,100 TOTAL CURRENT ASSETS 26,208 25,392 PROPERTY, PLANT AND EQUIPMENT, NET 25,360 23,897 GOODWILL 41,276 41,650 TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET 21,444 21,910 OTHER NONCURRENT ASSETS 12,231 12,381 TOTAL ASSETS $ 126,521 $ 125,231 Liabilities and Shareholders' Equity CURRENT LIABILITIES Accounts payable $ 16,306 $ 15,227 Accrued and other liabilities 11,091 11,318 Debt due within one year 11,296 9,513 TOTAL CURRENT LIABILITIES 38,694 36,058 LONG-TERM DEBT 22,842 24,995 DEFERRED INCOME TAXES 5,760 5,774 OTHER NONCURRENT LIABILITIES 4,914 6,120 TOTAL LIABILITIES 72,210 72,946 SHAREHOLDERS' EQUITY Convertible Class A preferred stock, stated value $ 1 per share ( 600 shares authorized) 756 777 Non-Voting Class B preferred stock, stated value $ 1 per share ( 200 shares authorized) — — Common stock, stated value $ 1 per share ( 10,000 shares authorized; shares issued: 2026 - 4,009.2 , 2025 - 4,009.2 ) 4,009 4,009 Additional paid-in capital 69,533 68,770 Reserve for ESOP debt retirement ( 596 ) ( 672 ) Accumulated other comprehensive loss ( 12,465 ) ( 12,143 ) Treasury stock (shares held: 2026 - 1,685.4 ; 2025 - 1,667.3 ) ( 143,008 ) ( 138,702 ) Retained earnings 135,852 129,973 Noncontrolling interest 230 272 TOTAL SHAREHOLDERS' EQUITY 54,311 52,284 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 126,521 $ 125,231 See accompanying Notes to Consolidated Financial Statements. 40 The Procter & Gamble Company Consolidated Statements of Shareholders' Equity Amounts in millions except per share amounts; 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, 2023 2,362,120 $ 4,009 $ 819 $ 66,556 ($ 821 ) ($ 12,220 ) ($ 129,736 ) $ 118,170 $ 288 $ 47,065 Net earnings 14,879 95 14,974 Other comprehensive income/(loss) 320 ( 3 ) 317 Dividends and dividend equivalents ($ 3.8286 per share): Common ( 9,053 ) ( 9,053 ) Preferred ( 284 ) ( 284 ) Treasury stock purchases ( 31,877 ) ( 5,014 ) ( 5,014 ) Employee stock plans 24,095 1,125 1,353 2,478 Preferred stock conversions 2,713 ( 21 ) 3 18 — ESOP debt impacts 85 99 184 Noncontrolling interest, net — ( 108 ) ( 108 ) BALANCE JUNE 30, 2024 2,357,051 $ 4,009 $ 798 $ 67,684 ($ 737 ) ($ 11,900 ) ($ 133,379 ) $ 123,811 $ 272 $ 50,559 Net earnings 15,974 91 16,065 Other comprehensive income/(loss) ( 243 ) ( 4 ) ( 248 ) Dividends and dividend equivalents ($ 4.0763 per share): Common ( 9,606 ) ( 9,606 ) Preferred ( 291 ) ( 291 ) Treasury stock purchases ( 38,552 ) ( 6,517 ) ( 6,517 ) Employee stock plans 20,940 1,084 1,175 2,259 Preferred stock conversions 2,555 ( 20 ) 3 18 — ESOP debt impacts 64 86 150 Noncontrolling interest, net — ( 87 ) ( 87 ) BALANCE JUNE 30, 2025 2,341,994 $ 4,009 $ 777 $ 68,770 ($ 672 ) ($ 12,143 ) ($ 138,702 ) $ 129,973 $ 272 $ 52,284 Net earnings 16,046 98 16,144 Other comprehensive income/(loss) ( 322 ) ( 21 ) ( 343 ) Dividends and dividend equivalents ($ 4.2589 per share): Common ( 9,966 ) ( 9,966 ) Preferred ( 292 ) ( 292 ) Treasury stock purchases ( 33,437 ) ( 5,029 ) ( 5,029 ) Employee stock plans 12,566 764 705 1,470 Preferred stock conversions 2,735 ( 22 ) 3 19 — ESOP debt impacts 76 91 168 Noncontrolling interest, net ( 5 ) ( 119 ) ( 125 ) BALANCE JUNE 30, 2026 2,323,859 $ 4,009 $ 756 $ 69,533 ($ 596 ) ($ 12,465 ) ($ 143,008 ) $ 135,852 $ 230 $ 54,311 See accompanying Notes to Consolidated Financial Statements. The Procter & Gamble Company 41 Consolidated Statements of Cash Flows Amounts in millions; fiscal years ended June 30 2026 2025 2024 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR $ 9,556 $ 9,482 $ 8,246 OPERATING ACTIVITIES (1) Net earnings 16,144 16,065 14,974 Depreciation and amortization 3,160 2,847 2,896 Share-based compensation expense 524 476 562 Deferred income taxes 51 149 ( 244 ) (Gain)/loss on sale of assets ( 351 ) 755 ( 215 ) Indefinite-lived intangible asset impairment charge — — 1,341 Change in accounts receivable 84 45 ( 766 ) Change in inventories ( 641 ) ( 324 ) ( 70 ) Change in accounts payable 919 ( 542 ) 878 Other ( 333 ) ( 1,653 ) 491 TOTAL OPERATING ACTIVITIES 19,556 17,817 19,846 INVESTING ACTIVITIES Capital expenditures ( 4,409 ) ( 3,773 ) ( 3,322 ) Proceeds from asset sales 508 107 346 Acquisitions, net of cash acquired ( 85 ) ( 11 ) ( 21 ) Other investing activity ( 638 ) ( 141 ) ( 507 ) TOTAL INVESTING ACTIVITIES ( 4,624 ) ( 3,818 ) ( 3,504 ) FINANCING ACTIVITIES Dividends to shareholders ( 10,232 ) ( 9,872 ) ( 9,312 ) Additions to short-term debt with original maturities of more than three months 7,941 8,020 3,528 Reductions in short-term debt with original maturities of more than three months ( 9,984 ) ( 6,512 ) ( 7,689 ) Net additions/(reductions) to other short-term debt 2,674 ( 1,138 ) 857 Additions to long-term debt 2,652 2,237 3,197 Reductions in long-term debt ( 3,390 ) ( 1,977 ) ( 2,335 ) Treasury stock purchases ( 5,028 ) ( 6,500 ) ( 5,006 ) Impact of stock options and other 907 1,707 1,905 TOTAL FINANCING ACTIVITIES ( 14,460 ) ( 14,036 ) ( 14,855 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 86 ) 112 ( 251 ) CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 386 75 1,235 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR $ 9,942 $ 9,556 $ 9,482 SUPPLEMENTAL DISCLOSURE Cash payments for interest $ 866 $ 896 $ 878 (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. Amounts in millions of dollars except per share amounts or as otherwise specified. 42 The Procter & Gamble Company Notes to Consolidated Financial Statements NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations The Procter & Gamble Company's (the "Company," "Procter & Gamble," "we" or "us") business is focused on providing branded consumer packaged goods of superior quality and value. Our products are sold in about 180 countries and territories primarily through mass merchandisers, digital commerce (including social commerce) channels, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores (including airport duty-free stores), high-frequency stores, pharmacies, electronics stores and professional channels. We also sell direct to consumers. We have on-the-ground operations in approximately 65 countries. Basis of Presentation The Consolidated Financial Statements include the Company and its controlled subsidiaries. Intercompany transactions are eliminated. Use of Estimates Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying disclosures. These estimates are based on management's best knowledge of current events and actions the Company may undertake in the future. Estimates are used in accounting for, among other items, consumer and trade promotion accruals, restructuring reserves, pensions, postretirement benefits, stock options, valuation of acquired intangible assets, useful lives for depreciation and amortization of long-lived assets, future cash flows associated with impairment testing for goodwill, indefinite-lived intangible assets and other long-lived assets, deferred tax assets and liabilities, uncertain income tax positions and contingencies. Actual results may ultimately differ from estimates, although management does not generally believe such differences would materially affect the financial statements in any individual year. However, regarding ongoing impairment testing of goodwill and indefinite-lived intangible assets, significant deterioration in future cash flow projections or other assumptions used in estimating fair values versus those anticipated at the time of the initial valuations, could result in impairment charges that materially affect the financial statements in a given year. Revenue Recognition Our revenue is primarily generated from the sale of finished product to customers. Those sales predominantly contain a single performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer, which can be on the date of shipment or the date of receipt by the customer. A provision for payment discounts and product return allowances is recorded as a reduction of sales in the same period the revenue is recognized. The revenue recorded is presented net of sales and other taxes we collect on behalf of governmental authorities. The revenue includes shipping and handling costs, which generally are included in the list price to the customer. Trade promotions, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons, are offered through various programs to customers and consumers. Sales are recorded net of trade promotion spending, which is recognized as incurred at the time of the sale. Most of these arrangements have terms of approximately one year. Accruals for expected payouts under these programs are included as Accrued marketing and promotion in the Accrued and other liabilities line item in the Consolidated Balance Sheets. Cost of Products Sold 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, 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 $ 2.1 billion in 2026 and 2025 and $ 2.0 billion in 2024. Advertising costs, charged to expense as incurred, include television, print, radio, digital and in-store advertising expenses and were $ 10.2 billion in 2026, $ 9.2 billion in 2025 and $ 9.6 billion in 2024. Non-advertising related components of the Company's total marketing spending reported in SG&A include costs associated with consumer promotions, product sampling and sales aids. Other Non-Operating Income/(Expense), Net Other non-operating income/(expense), net primarily includes divestiture gains/(losses), net non-service impacts related to postretirement benefit plans, investment income, accumulated foreign currency translation losses recognized upon the substantial liquidation of foreign operations and other non-operating items. Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 43 Currency Translation Financial statements of operating subsidiaries outside the U.S. generally are measured using the local currency as the functional currency. Adjustments to translate those statements into U.S. dollars are recorded in Other comprehensive income (OCI). For subsidiaries operating in highly inflationary economies, the U.S. dollar is the functional currency. Re-measurement adjustments for financial statements in highly inflationary economies and other transactional exchange gains and losses are reflected in earnings. Cash Flow Presentation The Consolidated Statements of Cash Flows are prepared using the indirect method, which reconciles net earnings to cash flows from operating activities. Cash flows from foreign currency transactions and operations are translated at monthly exchange rates for each period. Cash flows from hedging activities are included in the same category as the items being hedged. Cash flows from derivative instruments designated as net investment hedges are classified as investing activities. Realized gains and losses from non-qualifying derivative instruments used to hedge currency exposures resulting from intercompany financing transactions are classified as financing activities. Cash flows from other derivative instruments used to manage interest rates, commodity or other currency exposures are classified as operating activities. Cash payments related to income taxes are classified as operating activities. Investments The Company holds minor equity investments in certain companies over which we exert significant influence, but do not control the financial and operating decisions. These are accounted for as equity method investments. 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. Equity investments are included as Other noncurrent assets in the Consolidated Balance Sheets. The Company also holds highly liquid investments, primarily money market funds and time deposits. Such investments are considered cash equivalents and are included within Cash and cash equivalents in the Consolidated Balance Sheets. Inventory Valuation Inventories are valued at the lower of cost or net realizable value. Product-related inventories are maintained on the first-in, first-out method. The cost of spare part inventories is maintained using the average-cost method. Property, Plant and Equipment Property, plant and equipment is recorded at cost reduced by accumulated depreciation. Depreciation expense is recognized over the assets' estimated useful lives using the straight-line method. Machinery and equipment includes office furniture and fixtures ( 15 -year life), computer equipment and capitalized software ( 3 - to 5 -year lives) and manufacturing equipment (primarily 3 - to 20 -year lives). Buildings are depreciated over an estimated useful life of 40 years. Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts. Goodwill and Other Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized but are evaluated for impairment annually or more often if indicators of a potential impairment are present. Our annual impairment testing of goodwill is performed separately from our impairment testing of indefinite-lived intangible assets. We have acquired brands that have been determined to have indefinite lives. We evaluate several factors to determine whether an indefinite life is appropriate, including the competitive environment, market share, brand history, underlying product life cycles, operating plans and the macroeconomic environment of the countries in which the brands are sold. In addition, when certain events or changes in operating conditions occur, an additional impairment assessment is performed and indefinite-lived assets may be adjusted to a determinable life. The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangible assets with contractual terms are generally amortized over their respective legal or contractual lives. Customer relationships, brands and other non-contractual intangible assets with determinable lives are amortized over periods generally ranging from 5 to 30 years. When certain events or changes in operating conditions occur, an impairment assessment is performed and remaining lives of intangible assets with determinable lives may be adjusted. For additional details on goodwill and intangible assets see Note 4. Fair Values of Financial Instruments Certain financial instruments are required to be recorded at fair value. Changes in assumptions or estimation methods could affect the fair value estimates; however, we do not believe any such changes would have a material impact on our financial condition, results of operations or cash flows. Other financial instruments, including cash equivalents, certain investments and Amounts in millions of dollars except per share amounts or as otherwise specified. 44 The Procter & Gamble Company certain short-term debt, are recorded at cost, which approximates fair value. The fair values of long-term debt and financial instruments are disclosed in Note 9. New Accounting Pronouncements and Policies On July 1, 2025, we adopted the 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 ended June 30, 2026. This standard was applied retrospectively to all periods presented in the financial statements and resulted in additional disclosures (see Note 5). In November 2024, the Financial Accounting Standards Board (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. This guidance will require additional disclosure of income statement expenses but will not have a material impact on our Consolidated Financial Statements. 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 internal-use 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. NOTE 2 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). While none of our reportable segments are highly seasonal, components within certain reportable segments, such as Appliances (Grooming) and Personal Health Care (Health Care), are seasonal. The accounting policies of the segments are generally the same as those described in Note 1. Differences between these policies and U.S. GAAP primarily reflect income taxes, which are reflected in the segments using applicable blended statutory rates. Adjustments to arrive at our effective tax rate are included in Corporate. In addition, capital expenditures in the segments are on an accrual basis consistent with the balance sheet. Adjustments to move from an accrual to cash basis, for purposes of the cash flow statement, are reflected in Corporate. Corporate includes certain operating and non-operating activities that are not reflected in the operating results used internally to measure and evaluate the businesses, as well as items to adjust management reporting principles to U.S. GAAP. Operating activities in Corporate include the results of incidental businesses managed at the corporate level. Operating elements also include certain employee benefit costs, the costs of certain restructuring-type activities to maintain a competitive cost structure, including manufacturing and workforce optimization, asset impairment charges and other general Corporate items. The non-operating elements in Corporate primarily include interest expense, certain pension and other postretirement benefit costs, certain acquisition and divestiture gains/(losses), interest and investing income and other financing costs. 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 Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 45 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. Our operating segments are comprised of similar product categories. Operating segments as a percentage of consolidated net sales (excluding sales recorded in Corporate) are as follows: Fiscal years ended June 30 2026 2025 2024 Fabric Care 23 % 23 % 24 % Home Care 12 % 13 % 12 % Baby Care 9 % 9 % 9 % Hair Care 9 % 9 % 9 % Family Care 8 % 9 % 9 % Grooming 8 % 8 % 8 % Oral Care 8 % 8 % 8 % Feminine Care 7 % 6 % 6 % Personal Health Care 6 % 6 % 6 % Personal Care (1) 6 % 6 % 5 % Skin Care (1) 4 % 3 % 4 % TOTAL 100 % 100 % 100 % (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): Fiscal years ended June 30 2026 2025 2024 NET SALES United States $ 41.7 $ 41.6 $ 40.5 International $ 45.3 $ 42.7 $ 43.5 LONG-LIVED ASSETS (1) United States $ 13.9 $ 12.6 $ 12.0 International $ 11.5 $ 11.3 $ 10.2 (1) Long-lived assets consists of property, plant and equipment. No country, other than the United States, exceeds 10 % of the Company's consolidated net sales or long-lived assets. Our largest customer, Walmart Inc. and its affiliates, accounted for consolidated net sales of approximately 16 % in 2026, 2025 and 2024. No other customer represents more than 10 % of our consolidated net sales. Fiscal Year Ended June 30, 2026 Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Corporate Total Company Net sales $ 16,023 $ 6,918 $ 12,456 $ 30,314 $ 20,401 $ 919 $ 87,032 Cost of products sold ( 6,397 ) ( 2,845 ) ( 5,208 ) ( 16,428 ) ( 11,089 ) ( 1,395 ) ( 43,362 ) Selling, general and administrative expense ( 6,152 ) ( 2,111 ) ( 4,087 ) ( 6,597 ) ( 4,167 ) ( 808 ) ( 23,922 ) Other segment items (1) — 3 2 — — 623 629 Earnings/(loss) before income taxes 3,473 1,966 3,163 7,290 5,145 ( 660 ) 20,377 Net earnings/(loss) $ 2,672 $ 1,529 $ 2,404 $ 5,632 $ 3,930 $ ( 23 ) $ 16,144 Other segment information Depreciation and amortization $ 410 $ 320 $ 439 $ 756 $ 835 $ 400 $ 3,160 Capital expenditures $ 415 $ 540 $ 592 $ 1,250 $ 1,520 $ 93 $ 4,409 (1) Other segment items for each reportable segment includes interest expense, interest income and certain other non-operating income/(expense). Corporate includes non-operating income comprised primarily of a $ 343 gain due to the dissolution of the Glad joint venture business. Amounts in millions of dollars except per share amounts or as otherwise specified. 46 The Procter & Gamble Company 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. 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. NOTE 3 SUPPLEMENTAL FINANCIAL INFORMATION The components of property, plant and equipment were as follows: As of June 30 2026 2025 PROPERTY, PLANT AND EQUIPMENT Machinery and equipment $ 42,001 $ 40,077 Buildings 9,760 9,190 Construction in progress 4,448 3,935 Land 963 979 TOTAL PROPERTY, PLANT AND EQUIPMENT 57,172 54,181 Accumulated depreciation ( 31,811 ) ( 30,284 ) PROPERTY, PLANT AND EQUIPMENT, NET $ 25,360 $ 23,897 Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 47 Selected components of current and noncurrent liabilities were as follows: As of June 30 2026 2025 ACCRUED AND OTHER LIABILITIES - CURRENT Accrued marketing and promotion $ 4,141 $ 3,851 Accrued compensation 2,043 2,007 Taxes payable 778 1,177 Restructuring reserves 336 189 Accrued interest 301 293 Lease liabilities 246 255 Derivative liabilities 206 627 Other 3,040 2,920 TOTAL $ 11,091 $ 11,318 OTHER NONCURRENT LIABILITIES Pension benefit obligations $ 2,204 $ 3,026 Other retiree benefit obligations 736 691 Uncertain tax positions 654 701 Lease liabilities 641 701 Derivative liabilities 195 435 Other 484 566 TOTAL $ 4,914 $ 6,120 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. 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. 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 incurred over half of the costs under this plan in fiscal 2026, with the remainder expected to be 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. The Company incurred total before tax restructuring charges of $ 1.2 billion and $ 1.1 billion for the fiscal years ended June 30, 2026 and 2025, respectively. Of the charges incurred in fiscal year 2026, $ 606 were recorded in Costs of products sold, $ 460 in SG&A and $ 165 in Other non-operating income/(expense), net. Of the charges incurred in fiscal year 2025, $ 150 were recorded in Costs of products sold, $ 171 in SG&A and $ 793 in Other non-operating income/(expense), net . Amounts in millions of dollars except per share amounts or as otherwise specified. 48 The Procter & Gamble Company The following table presents restructuring activity for the fiscal years ended June 30, 2026 and 2025: Separation Costs Asset-Related Costs Other Costs Total RESERVE JUNE 30, 2024 $ 133 $ — $ 32 $ 166 Cost incurred 145 55 914 1,114 Cost paid/settled ( 158 ) ( 55 ) ( 877 ) ( 1,090 ) RESERVE JUNE 30, 2025 120 — 69 189 Cost incurred 608 231 391 1,230 Cost paid/settled ( 500 ) ( 231 ) ( 353 ) ( 1,084 ) RESERVE JUNE 30, 2026 $ 229 $ — $ 107 $ 336 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 and office 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 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). In the period ended June 30, 2026, the Company substantially liquidated its operations in Pakistan and recorded a non-cash charge of $ 131 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 . However, for information purposes, the following table summarizes the total before tax restructuring costs related to our reportable segments: Fiscal years ended June 30 2026 2025 2024 Beauty $ 76 $ 43 $ 43 Grooming 47 32 76 Health Care 132 30 33 Fabric & Home Care 220 24 84 Baby, Feminine & Family Care 201 40 50 Corporate (1) 556 945 371 TOTAL $ 1,230 $ 1,114 $ 659 (1) Corporate includes costs related to allocated overheads, including charges related to our Enterprise Markets, Global Business Services and Corporate Functions activities. Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 49 NOTE 4 GOODWILL AND INTANGIBLE ASSETS The change in the net carrying amount of goodwill by reportable segment was as follows: Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care TOTAL BALANCE AT JUNE 30, 2024 - NET (1) $ 13,723 $ 12,633 $ 7,638 $ 1,810 $ 4,499 $ 40,303 Acquisitions and divestitures — — — — — — Translation and other 507 360 303 38 141 1,348 BALANCE AT JUNE 30, 2025 - NET (1) 14,229 12,993 7,941 1,848 4,640 41,650 Acquisitions and divestitures — — 40 — — 40 Translation and other ( 157 ) ( 105 ) ( 96 ) ( 10 ) ( 45 ) ( 414 ) BALANCE AT JUNE 30, 2026 - NET (1) $ 14,073 $ 12,887 $ 7,884 $ 1,838 $ 4,595 $ 41,276 (1) Grooming goodwill balance is net of $ 7.9 billion accumulated impairment losses. Goodwill decreased during fiscal 2026 primarily due to currency translation across all reportable segments, partially offset by a minor acquisition within Health Care. Goodwill increased during fiscal 2025 primarily due to 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. 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. Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants and include the amount and timing of future cash flows (including expected growth rates and profitability). Significant judgment by management is required to estimate the impact of macroeconomic and other factors on future cash flows. Estimates utilized in the projected cash flows include consideration of macroeconomic conditions, overall category growth rates, competitive activities, cost containment and margin expansion, Company business plans, the underlying product or technology life cycles, economic barriers to entry, a brand's relative market position and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. We believe the estimates and assumptions utilized in our impairment testing are reasonable and are comparable to those that would be used by other marketplace participants. However, actual events and results could differ substantially from those used in our valuations. 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. 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. 50 The Procter & Gamble Company Identifiable intangible assets were comprised of: 2026 2025 As of June 30 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization INTANGIBLE ASSETS WITH DETERMINABLE LIVES Brands $ 4,421 $ ( 3,181 ) $ 4,449 $ ( 3,019 ) Patents and technology 2,795 ( 2,739 ) 2,803 ( 2,722 ) Customer relationships 1,866 ( 1,300 ) 1,879 ( 1,236 ) Other 82 ( 35 ) 73 ( 31 ) TOTAL $ 9,164 $ ( 7,255 ) $ 9,204 $ ( 7,008 ) INTANGIBLE ASSETS WITH INDEFINITE LIVES Brands 19,535 — 19,714 — TOTAL INTANGIBLE ASSETS $ 28,699 $ ( 7,255 ) $ 28,918 $ ( 7,008 ) Amortization expense of intangible assets was as follows: Fiscal years ended June 30 2026 2025 2024 Intangible asset amortization $ 308 $ 320 $ 338 Estimated amortization expense over the next five fiscal years is as follows: Fiscal years ending June 30 2027 2028 2029 2030 2031 Estimated amortization expense $ 297 $ 256 $ 206 $ 181 $ 166 NOTE 5 INCOME TAXES Income taxes are recognized for the amount of taxes payable for the current year and for the impact of deferred tax assets and liabilities, which represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. Deferred tax assets and liabilities are established using the enacted statutory tax rates and are adjusted for any changes in such rates in the period of change. We have elected to account for the tax effects of Global Intangible Low-Taxed Income (GILTI) as a current period expense when incurred. Earnings before income taxes consisted of the following: Fiscal years ended June 30 2026 2025 2024 United States $ 13,728 $ 13,911 $ 12,246 International 6,649 6,256 6,515 TOTAL $ 20,377 $ 20,167 $ 18,761 Income taxes consisted of the following: Fiscal years ended June 30 2026 2025 2024 CURRENT TAX EXPENSE U.S. federal $ 2,105 $ 2,215 $ 1,954 International 1,700 1,330 1,708 U.S. state and local 378 407 368 TOTAL 4,182 3,953 4,031 DEFERRED TAX EXPENSE/(BENEFIT) U.S. federal ( 27 ) 9 ( 133 ) International 98 146 ( 85 ) U.S. state and local ( 21 ) ( 5 ) ( 26 ) TOTAL 51 149 ( 244 ) TOTAL TAX EXPENSE $ 4,233 $ 4,102 $ 3,787 Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 51 Cash payments for income taxes, net of refunds, consisted of the following: Fiscal years ended June 30 2026 2025 2024 U.S. federal $ 3,057 $ 2,993 $ 2,554 International 1,257 1,187 1,408 U.S. state and local 365 373 402 TOTAL $ 4,678 $ 4,554 $ 4,363 A reconciliation of the U.S. federal statutory income tax rate to our actual effective income tax rate is provided below: Fiscal years ended June 30 2026 2025 2024 U.S. federal statutory income tax rate $ 4,279 21.0 % $ 4,235 21.0 % $ 3,940 21.0 % Effect of cross-border tax laws, net of foreign tax credits Foreign-derived intangible income ( 235 ) ( 1.2 ) % ( 163 ) ( 0.8 ) % ( 201 ) ( 1.1 ) % Other 41 0.2 % ( 2 ) — % 64 0.3 % Tax credits Foreign tax credits from foreign withholding taxes ( 222 ) ( 1.1 ) % ( 180 ) ( 0.9 ) % ( 240 ) ( 1.3 ) % Other ( 42 ) ( 0.2 ) % ( 36 ) ( 0.2 ) % ( 42 ) ( 0.2 ) % Non-taxable or non-deductible items Excess tax benefits from the exercise of stock options ( 82 ) ( 0.4 ) % ( 189 ) ( 0.9 ) % ( 186 ) ( 1.0 ) % Domestic state and local income taxes, net of federal effect (1) 277 1.4 % 334 1.7 % 333 1.8 % Foreign tax effects 344 1.7 % 137 0.7 % 91 0.5 % Worldwide changes in unrecognized tax benefits (2) ( 50 ) ( 0.2 ) % 87 0.4 % 189 1.0 % Other ( 76 ) ( 0.4 ) % ( 121 ) ( 0.6 ) % ( 160 ) ( 0.9 ) % TOTAL $ 4,233 20.8 % $ 4,102 20.3 % $ 3,787 20.2 % (1) State taxes in California, Illinois, New York, and New Jersey made up the majority of the tax effect in this category. (2) The company has elected to present this category on a global aggregated basis and includes the effect of current year increases into unrecognized tax benefits. Prior to the passage of the 2017 U.S. Tax Act, the Company asserted that substantially all of the undistributed earnings of its foreign subsidiaries were considered indefinitely invested and, accordingly, no deferred taxes were provided. Pursuant to the provisions of the 2017 U.S. Tax Act, these earnings were subjected to a one-time transition tax. This charge included taxes for all U.S. income taxes and for the related foreign withholding taxes for the portion of those earnings which are no longer considered indefinitely invested. We have not provided deferred taxes on undistributed foreign earnings which are considered indefinitely reinvested. A reconciliation of the beginning and ending liability for uncertain tax positions is as follows: Fiscal years ended June 30 2026 2025 2024 BEGINNING OF YEAR $ 634 $ 582 $ 515 Increases in tax positions for prior years 59 240 157 Decreases in tax positions for prior years ( 96 ) ( 181 ) ( 133 ) Increases in tax positions for current year 40 57 160 Settlements with taxing authorities ( 73 ) ( 65 ) ( 100 ) Lapse in statute of limitations ( 13 ) ( 6 ) ( 9 ) Currency translation ( 4 ) 7 ( 8 ) END OF YEAR $ 547 $ 634 $ 582 Included in the total liability for uncertain tax positions at June 30, 2026, is $ 438 that, depending on the ultimate resolution, could impact the effective tax rate in future periods. The Company is present in approximately 65 countries and 140 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 for Amounts in millions of dollars except per share amounts or as otherwise specified. 52 The Procter & Gamble Company changing facts and circumstances, including progress of tax audits, developments in case law and the closing of statutes of limitation. Such adjustments are reflected in the tax provision as appropriate. We have tax years open ranging from 2013 and forward. We are generally not able to reliably estimate the timing and ultimate settlement amounts until the close of an audit. 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, 2026 and 2025, we had accrued interest of $ 142 and $ 141 and accrued penalties of $ 48 and $ 45 , respectively, which are not included in the above table. Deferred income tax assets and liabilities were comprised of the following: As of June 30 2026 2025 DEFERRED TAX ASSETS Capitalized research & development $ 1,439 $ 1,251 Loss and other carryforwards 769 857 Accrued marketing and promotion 548 497 Stock-based compensation 466 445 Pension and other retiree benefits 388 601 Fixed assets 266 230 Advance payments 206 — Lease liabilities 198 212 Unrealized loss on financial and foreign exchange transactions 144 358 Other 832 758 Valuation allowances ( 330 ) ( 293 ) TOTAL $ 4,927 $ 4,915 DEFERRED TAX LIABILITIES Goodwill and other intangible assets $ 5,443 $ 5,475 Fixed assets 1,606 1,547 Other retiree benefits 888 1,102 Lease right-of-use assets 194 209 Unrealized gain on financial and foreign exchange transactions 187 96 Foreign withholding tax on earnings to be repatriated 158 131 Other 630 492 TOTAL $ 9,106 $ 9,052 Net operating loss carryforwards were $ 1.6 billion at June 30, 2026, and $ 2.0 billion at June 30, 2025. If unused, approximately $ 100 will expire between 2026 and 2046. The remainder, totaling $ 1.5 billion at June 30, 2026, may be carried forward indefinitely. NOTE 6 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 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. The Procter & Gamble Company 53 Net earnings per common share were calculated as follows: Fiscal years ended June 30 2026 2025 2024 CONSOLIDATED AMOUNTS Net earnings attributable to P&G (Diluted) $ 16,046 $ 15,974 $ 14,879 Less: Preferred dividends 292 291 284 Net earnings attributable to P&G available to common shareholders (Basic) $ 15,754 $ 15,682 $ 14,595 SHARES IN MILLIONS Basic weighted average common shares outstanding 2,333.7 2,350.1 2,360.1 Add effect of dilutive securities: Stock options and other unvested equity awards (1) 20.5 33.3 38.3 Convertible preferred shares (2) 68.3 71.0 73.6 Diluted weighted average common shares outstanding 2,422.5 2,454.4 2,471.9 NET EARNINGS PER COMMON SHARE Basic $ 6.75 $ 6.67 $ 6.18 Diluted $ 6.62 $ 6.51 $ 6.02 (1) For the years ended June 30, 2026, 2025 and 2024, the weighted average of stock options that were antidilutive and not included in the diluted net earnings per share calculation were 20 million, 6 million and 4 million, respectively. (2) An overview of preferred shares can be found in Note 8. NOTE 7 SHARE-BASED COMPENSATION The Company has two primary share-based compensation programs under which we annually grant stock option, restricted stock unit (RSU) and performance stock unit (PSU) awards to certain managers and directors. In our main long-term incentive program, managers can elect to receive stock options or RSUs. All options vest after three years and have a 10-year life. Exercise prices on options are set equal to the market price of the underlying shares on the date of the grant. RSUs vest and settle in shares of common stock three years from the grant date. Senior-level executives participate in an additional long-term incentive program that awards PSUs, which are paid in shares after the end of a three-year performance period subject to pre-established performance goals. The program includes a Relative Total Shareholder Return (R-TSR) modifier under which the number of shares ultimately granted is also impacted by the Company's actual shareholder return relative to our consumer products competitive peer set. In addition to these long-term incentive programs, we award RSUs to the Company's non-employee directors and make other minor stock option and RSU grants to employees for which the terms are not substantially different from our long-term incentive awards. The Company's share-based compensation plan was approved by shareholders in 2025. Under the 2025 plan, a maximum of 175 million shares of common stock was authorized for issuance. Additionally, the number of shares available for award under the 2025 plan includes 38 million shares previously authorized but not awarded under the shareholders approved plan in 2019 plus any shares of Common Stock subject to outstanding awards under the 2019 Plan that are forfeited, cancelled or otherwise terminated without the issuance of shares of Common Stock as set forth in the 2025 Plan. A total of 213 million shares remain available for grant. The Company recognizes share-based compensation expense based on the fair value of the awards at the date of grant. The expense is recognized on a straight-line basis over the requisite service period. Awards to employees eligible for retirement prior to the award becoming fully vested are recognized as compensation expense ratably from the grant date through the date the employee first becomes eligible to retire and/or is no longer required to provide services to earn the award. Share-based compensation expense is included as part of Cost of products sold and SG&A in the Consolidated Statements of Earnings and includes an estimate of forfeitures, which is based on historical data. Amounts in millions of dollars except per share amounts or as otherwise specified. 54 The Procter & Gamble Company Total expense and related recognized tax benefit were as follows: Fiscal years ended June 30 2026 2025 2024 Stock options $ 264 $ 219 $ 270 RSUs and PSUs 260 257 292 Total share-based expense $ 524 $ 476 $ 562 Income tax benefit $ 92 $ 85 $ 103 We utilize an industry standard lattice-based valuation model to calculate the fair value for stock options granted. Assumptions utilized in the model, which are evaluated and revised to reflect market conditions and experience, were as follows: Fiscal years ended June 30 2026 2025 2024 Interest rate 3.6 - 4.2 % 3.5 - 4.4 % 4.6 - 5.5 % Weighted average interest rate 4.1 % 3.7 % 4.6 % Dividend yield 2.7 % 2.4 % 2.5 % Expected volatility 19 % 18 % 18 % Expected life in years 8.8 8.9 8.8 Lattice-based option valuation models incorporate ranges of assumptions for inputs and those ranges are disclosed in the preceding table. Expected volatilities are based on a combination of historical volatility of our stock and implied volatilities of call options on our stock. We use historical data to estimate option exercise and employee termination patterns within the valuation model. The expected life of options granted is derived from the output of the option valuation model and represents the average period of time that options granted are expected to be outstanding. The interest rate for periods within the contractual life of the options is based on the U.S. Treasury yield curve in effect at the time of grant. We utilize a Monte-Carlo simulation model to estimate the fair value of performance stock units granted. Assumptions utilized in the model are not substantially different from those used for stock options. A summary of options outstanding under the plans as of June 30, 2026, and activity during the year then ended is presented below: Options Options (in thousands) Weighted Average Exercise Price Weighted Average Contractual Life in Years Aggregate Intrinsic Value OUTSTANDING AT JULY 1, 2025 96,621 $ 120.96 Granted 8,769 153.71 Exercised ( 10,188 ) 90.34 Forfeited/expired ( 657 ) 151.43 OUTSTANDING AT JUNE 30, 2026 94,544 $ 127.07 4.8 $ 2,143 Exercisable 69,692 $ 116.01 3.6 $ 2,134 The following table provides additional information on stock options: Fiscal years ended June 30 2026 2025 2024 Weighted average grant-date fair value of options granted $ 33.17 $ 36.23 $ 34.25 Intrinsic value of options exercised 664 1,546 1,621 Grant-date fair value of options that vested 274 299 244 Cash received from options exercised 920 1,693 1,888 Actual tax benefit from options exercised 137 321 330 At June 30, 2026, $ 188 of compensation cost had not yet been recognized related to stock option grants. That cost is expected to be recognized over a remaining weighted average period of 1.6 years. Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 55 A summary of non-vested RSUs and PSUs outstanding under the plans as of June 30, 2026, and activity during the year then ended is presented below: RSUs PSUs RSU and PSU awards Units (in thousands) Weighted Average Grant Date Fair Value Units (in thousands) Weighted Average Grant Date Fair Value NON-VESTED AT JULY 1, 2025 3,361 $ 151.58 924 $ 166.15 Granted 1,704 152.91 585 161.53 Vested ( 1,556 ) 142.16 ( 506 ) 155.87 Forfeited ( 114 ) 156.01 ( 30 ) 163.05 NON-VESTED AT JUNE 30, 2026 3,396 $ 156.41 973 $ 168.83 At June 30, 2026, $ 250 of compensation cost had not yet been recognized related to RSUs and PSUs. That cost is expected to be recognized over a remaining weighted average period of 1.6 years. The total grant date fair value of shares vested was $ 301 , $ 258 and $ 256 in 2026, 2025 and 2024, respectively. The Company settles equity issuances with treasury shares. We have no specific policy to repurchase common shares to mitigate the dilutive impact of options, RSUs and PSUs. However, we have historically made adequate discretionary purchases, based on cash availability, market trends and other factors, to offset the impacts of such activity. NOTE 8 POSTRETIREMENT BENEFITS AND EMPLOYEE STOCK OWNERSHIP PLAN We offer various postretirement benefits to our employees. Defined Contribution Retirement Plans We have defined contribution plans, which cover the majority of our U.S. employees, as well as employees in certain other countries. These plans are fully funded. We generally make contributions to participants' accounts based on individual base salaries and years of service. Total global defined contribution expense was $ 534 in 2026 and 2025 and $ 425 in 2024, respectively. The primary U.S. defined contribution plan (the U.S. DC plan) comprises the majority of the expense for the Company's defined contribution plans. For the U.S. 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 2026 and 2025 and 13 % in 2024. We maintain The Procter & Gamble Profit Sharing Trust (Trust) and Employee Stock Ownership Plan (ESOP) to provide a portion of the funding for U.S. other retiree benefits (described below), and historically, the U.S. DC plan. Operating details of the ESOP are provided at the end of this Note. Defined Benefit Retirement Plans and Other Retiree Benefits We offer defined benefit retirement pension plans to certain employees. These benefits relate primarily to plans outside the U.S. and, to a lesser extent, plans assumed in previous acquisitions covering U.S. employees. We also provide certain other retiree benefits, primarily health care benefits for the majority of our U.S. employees who become eligible for these benefits when they meet minimum age and service requirements. The plans require cost sharing with retirees and the benefits are funded by ESOP Series B shares and certain other assets contributed by the Company. Amounts in millions of dollars except per share amounts or as otherwise specified. 56 The Procter & Gamble Company Obligation and Funded Status . The following provides a reconciliation of benefit obligations, plan assets and funded status of these defined benefit plans: Pension Benefits (1) Other Retiree Benefits (2) Fiscal years ended June 30 2026 2025 2026 2025 CHANGE IN BENEFIT OBLIGATION Benefit obligation at beginning of year (3) $ 13,156 $ 12,355 $ 3,396 $ 2,687 Service cost 182 173 80 61 Interest cost 499 498 181 147 Participants' contributions 16 15 59 56 Amendments 18 12 — ( 4 ) Net actuarial loss/(gain) ( 472 ) ( 263 ) 244 679 Special termination benefits 11 3 13 2 Currency translation and other ( 265 ) 980 17 17 Benefit payments ( 691 ) ( 617 ) ( 257 ) ( 250 ) BENEFIT OBLIGATION AT END OF YEAR (3) $ 12,455 $ 13,156 $ 3,734 $ 3,396 CHANGE IN PLAN ASSETS Fair value of plan assets at beginning of year $ 11,672 $ 10,857 $ 7,787 $ 8,043 Actual return on plan assets 1,253 326 ( 540 ) ( 168 ) Employer contributions 220 189 40 42 Participants' contributions 16 15 59 56 Currency translation and other ( 312 ) 903 — — ESOP debt impacts (4) — — 76 64 Benefit payments ( 691 ) ( 617 ) ( 257 ) ( 250 ) FAIR VALUE OF PLAN ASSETS AT END OF YEAR $ 12,159 $ 11,672 $ 7,166 $ 7,787 FUNDED STATUS $ ( 296 ) $ ( 1,484 ) $ 3,432 $ 4,391 (1) Primarily non-U.S.-based defined benefit retirement plans. (2) Primarily U.S.-based other postretirement benefit plans. (3) For the pension benefit plans, the benefit obligation is the projected benefit obligation. For other retiree benefit plans, the benefit obligation is the accumulated postretirement benefit obligation. (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 2026 was primarily related to increases in discount rates. The actuarial loss for other retiree benefits in 2026 was primarily related to updates in assumptions for medical claims costs. 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 underfunding of pension benefits is primarily a function of the different funding incentives that exist outside of the U.S. In certain countries, there are no legal requirements or financial incentives provided to companies to pre-fund pension obligations prior to their due date. In these instances, benefit payments are typically paid directly from the Company's cash as they become due. Pension Benefits Other Retiree Benefits As of June 30 2026 2025 2026 2025 CLASSIFICATION OF NET AMOUNT RECOGNIZED Noncurrent assets $ 1,992 $ 1,621 $ 4,213 $ 5,123 Current liabilities ( 85 ) ( 78 ) ( 45 ) ( 41 ) Noncurrent liabilities ( 2,204 ) ( 3,026 ) ( 736 ) ( 691 ) NET AMOUNT RECOGNIZED $ ( 296 ) $ ( 1,484 ) $ 3,432 $ 4,391 AMOUNTS RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE (INCOME)/LOSS (AOCI) Net actuarial loss/(gain) $ 197 $ 1,322 $ 1,743 $ 166 Prior service cost/(credit) 98 122 ( 458 ) ( 553 ) NET AMOUNTS RECOGNIZED IN AOCI $ 295 $ 1,444 $ 1,285 $ ( 387 ) Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 57 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 $ 11.8 billion and $ 12.5 billion as of June 30, 2026 and 2025, respectively. Information related to the funded status of selected pension and other retiree benefits at June 30 is as follows: As of June 30 2026 2025 PENSION PLANS WITH A PROJECTED BENEFIT OBLIGATION IN EXCESS OF PLAN ASSETS Projected benefit obligation $ 7,380 $ 8,175 Fair value of plan assets 5,091 5,070 PENSION PLANS WITH AN ACCUMULATED BENEFIT OBLIGATION IN EXCESS OF PLAN ASSETS Accumulated benefit obligation $ 6,968 $ 7,653 Fair value of plan assets 5,070 5,018 OTHER RETIREE BENEFIT PLANS WITH AN ACCUMULATED BENEFIT OBLIGATION IN EXCESS OF PLAN ASSETS Accumulated benefit obligation $ 837 $ 802 Fair value of plan assets 55 70 Net Periodic Benefit Cost . Components of the net periodic benefit cost were as follows: Pension Benefits Other Retiree Benefits Fiscal years ended June 30 2026 2025 2024 2026 2025 2024 AMOUNTS RECOGNIZED IN NET PERIODIC BENEFIT COST/(CREDIT) Service cost $ 182 $ 173 $ 164 $ 80 $ 61 $ 68 Interest cost 499 498 527 181 147 157 Expected return on plan assets ( 681 ) ( 657 ) ( 610 ) ( 787 ) ( 745 ) ( 687 ) Amortization of net actuarial loss/(gain) 71 63 95 ( 4 ) ( 59 ) ( 38 ) Amortization of prior service cost/(credit) 39 40 37 ( 90 ) ( 128 ) ( 127 ) Amortization of net actuarial loss/(gain) due to settlements ( 6 ) 5 ( 13 ) — — — Special termination benefits 11 3 4 13 2 3 NET PERIODIC BENEFIT COST/(CREDIT) $ 114 $ 126 $ 203 $ ( 607 ) $ ( 721 ) $ ( 623 ) CHANGE IN PLAN ASSETS AND BENEFIT OBLIGATIONS RECOGNIZED IN AOCI Net actuarial loss/(gain) - current year $ ( 1,044 ) $ 68 $ 1,571 $ 1,592 Prior service cost/(credit) - current year 18 12 — ( 4 ) Amortization of net actuarial (loss)/gain ( 71 ) ( 63 ) 4 59 Amortization of prior service (cost)/credit ( 39 ) ( 40 ) 90 128 Amortization of net actuarial (loss)/gain due to settlements 6 ( 5 ) — — Currency translation and other ( 20 ) 74 7 ( 14 ) TOTAL CHANGE IN AOCI ( 1,149 ) 46 1,672 1,761 NET AMOUNTS RECOGNIZED IN PERIODIC BENEFIT COST/(CREDIT) AND AOCI $ ( 1,035 ) $ 171 $ 1,065 $ 1,040 The service cost component of the net periodic benefit cost is included in the Consolidated Statements of Earnings in Cost of products sold and SG&A. All other components are included in the Consolidated Statements of Earnings in Other non-operating income/(expense), net, unless otherwise noted. Amounts in millions of dollars except per share amounts or as otherwise specified. 58 The Procter & Gamble Company Assumptions . We determine our actuarial assumptions on an annual basis. These assumptions are weighted to reflect each country that may have an impact on the cost of providing retirement benefits. The weighted average assumptions used to determine benefit obligations recorded on the Consolidated Balance Sheets as of June 30, 2026 and 2025, were as follows: (1) Pension Benefits Other Retiree Benefits As of June 30 2026 2025 2026 2025 Discount rate 4.6 % 4.2 % 6.0 % 5.9 % Rate of compensation increase 2.7 % 2.7 % N/A N/A Interest crediting rate for cash balance plans 4.6 % 4.6 % N/A N/A Health care cost trend rates assumed for next year N/A N/A 7.3 % 6.9 % Rate to which the health care cost trend rate is assumed to decline (ultimate trend rate) N/A N/A 5.6 % 5.4 % Year that the rate reaches the ultimate trend rate N/A N/A 2031 2030 (1) Determined as of end of fiscal year. The weighted average assumptions used to determine net benefit cost recorded on the Consolidated Statements of Earnings for the fiscal years ended June 30 were as follows: (1) Pension Benefits Other Retiree Benefits Fiscal years ended June 30 2026 2025 2024 2026 2025 2024 Discount rate 4.2 % 4.2 % 4.2 % 5.9 % 5.8 % 5.6 % Expected return on plan assets 6.0 % 6.0 % 6.0 % 8.5 % 8.5 % 8.5 % Rate of compensation increase 2.7 % 2.8 % 2.9 % N/A N/A N/A Interest crediting rate for cash balance plans 4.6 % 4.7 % 4.3 % N/A N/A N/A (1) Determined as of beginning of fiscal year. 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. For the remaining plans, the Company determines these amounts utilizing a single weighted average discount rate derived from the corporate bond yield curve used to measure the plan obligations. Several factors are considered in developing the estimate for the long-term expected rate of return on plan assets. For the defined benefit retirement plans, these factors include historical rates of return of broad equity and bond indices and projected long-term rates of return obtained from pension investment consultants. The expected long-term rates of return for plan assets are 8 - 9 % for equities and 3 - 5 % for bonds. For other retiree benefit plans, the expected long-term rate of return reflects that the assets are comprised primarily of Company stock. The expected rate of return on Company stock is based on the long-term projected return of 8.5 % and reflects the historical pattern of returns. Plan Assets . Our investment objective for defined benefit retirement plan assets is to meet the plans' benefit obligations and to improve plan self-sufficiency for future benefit obligations. The investment strategies focus on asset class diversification, liquidity to meet benefit payments and an appropriate balance of long-term investment return and risk. Target ranges for asset allocations are determined by assessing different investment risks and matching the actuarial projections of the plans' future liabilities and benefit payments with current as well as expected long-term rates of return on the assets, taking into account investment return volatility and correlations across asset classes. Plan assets are diversified across several investment managers and are generally invested in liquid funds that are selected to track broad market equity and bond indices. 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, 2026, was as follows: Target Asset Allocation (1) Pension Benefits Other Retiree Benefits Asset Category Cash 1 % 2 % Debt securities 64 % 1 % Equity securities 35 % 97 % TOTAL 100 % 100 % (1) Actual allocations approximated the targets. Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 59 The following table sets forth the fair value of the Company's plan assets as of June 30, 2026 and 2025, 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. Pension Benefits Other Retiree Benefits As of June 30 Fair Value Hierarchy Level 2026 2025 Fair Value Hierarchy Level 2026 2025 ASSETS AT FAIR VALUE Cash and cash equivalents 1 $ 74 $ 55 1 $ 180 $ 135 Company common stock — — 1 502 496 Company preferred stock (1) — — 2 6,433 7,087 Fixed income securities (2) 2 2,519 1,050 — — Insurance contracts (3) 3 238 207 — — TOTAL ASSETS IN THE FAIR VALUE HIERARCHY 2,831 1,312 7,115 7,718 Investments valued at net asset value (4) 9,328 10,361 50 68 TOTAL ASSETS AT FAIR VALUE $ 12,159 $ 11,672 $ 7,166 $ 7,787 (1) Company preferred stock is valued based on the value of Company common stock and is presented net of ESOP debt discussed below. (2) Fixed income securities are estimated by using pricing models or quoted prices of securities with similar characteristics. (3) Fair values of insurance contracts are valued based on either their cash equivalent value or models that project future cash flows and discount the future amounts to a present value using market-based observable inputs, including credit risk and interest rate curves. The activity for Level 3 assets is not significant for all years presented. (4) Investments valued using net asset value as a practical expedient are primarily equity and fixed income collective funds. Cash Flows . 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, 2027, is $ 200 and $ 59 , 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. In addition, we take into consideration our business investment opportunities and resulting cash requirements. Accordingly, actual funding may differ significantly from current estimates. Total benefit payments expected to be paid to participants, which include payments funded from the Company's assets and payments from the plans are as follows: Fiscal years ending June 30 Pension Benefits Other Retiree Benefits EXPECTED BENEFIT PAYMENTS 2027 $ 712 $ 215 2028 735 218 2029 753 228 2030 797 236 2031 806 248 2032 - 2036 4,097 1,377 Employee Stock Ownership Plan We maintain the ESOP to provide funding for certain employee benefits discussed in the preceding paragraphs. The ESOP borrowed $ 1.0 billion in 1989, and the proceeds were used to purchase Series A ESOP Convertible Class A Preferred Stock to fund a portion of the U.S. DC plan. Principal and interest requirements of the borrowing were paid by the Trust from dividends on the preferred shares and from advances provided by the Company. The original borrowing of $ 1.0 billion has been repaid in full. No advances from the Company remain outstanding at June 30, 2026. Each share is convertible at the option of the holder into one share of the Company's common stock. The dividend for the current year was equal to the common stock dividend of $ 4.26 per share. The liquidation value is $ 6.82 per share. In 1991, the ESOP borrowed an additional $ 1.0 billion. The proceeds were used to purchase Series B ESOP Convertible Class A Preferred Stock to fund a portion of retiree health care benefits. These shares, net of the ESOP's debt, are considered plan assets of the other retiree benefits plan discussed above. 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. 60 The Procter & Gamble Company which $ 596 are outstanding at June 30, 2026. Each share is convertible at the option of the holder into one share of the Company's common stock. The dividend for the current year was equal to the common stock dividend of $ 4.26 per share. The liquidation value is $ 12.96 per share. Our ESOP accounting practices are consistent with current ESOP accounting guidance, including the permissible continuation of certain provisions from prior accounting guidance. ESOP debt, which was guaranteed by the Company, was recorded as debt with an offset to the Reserve for ESOP debt retirement, which is presented within Shareholders' equity. Advances to the ESOP by the Company are recorded as an increase in the Reserve for ESOP debt retirement. Interest incurred on the ESOP debt was recorded as Interest expense. Dividends on all preferred shares are charged to Retained earnings. The Series A and B preferred shares of the ESOP are allocated to employees based on debt service requirements. The number of Series A preferred shares outstanding of 18 million, 21 million and 23 million were all allocated as of June 30, 2026, 2025 and 2024, respectively. The number of Series B preferred shares outstanding at June 30 was as follows: Shares in thousands 2026 2025 2024 Allocated 36,365 34,965 33,723 Unallocated 12,277 14,142 15,864 TOTAL SERIES B 48,642 49,107 49,587 For purposes of calculating diluted net earnings per common share, the preferred shares held by the ESOP are considered converted from inception. NOTE 9 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. We evaluate exposures on a centralized basis to take advantage of natural 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. These financial transactions are governed by our policies covering acceptable counterparty exposure, instrument types and other hedging practices. If the Company elects to do so and if the instrument meets certain specified accounting criteria, management designates derivative instruments as cash flow hedges, fair value hedges or net investment hedges. We record derivative instruments at fair value and the accounting for changes in the fair value depends on the intended use of the derivative, the resulting designation and the effectiveness of the instrument in offsetting the risk exposure it is designed to hedge. We generally have a high degree of effectiveness between the exposure being hedged and the hedging instrument. Credit Risk Management We have counterparty credit guidelines and normally enter into transactions with investment grade financial institutions, to the extent commercially viable. Counterparty exposures are monitored daily and downgrades in counterparty credit ratings are reviewed on a timely basis. We have not incurred, and do not expect to incur, material credit losses on our risk management or other financial instruments. 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 net liability position was $ 260 and $ 1.1 billion as of June 30, 2026 and 2025, respectively. The Company has not been required to post collateral as a result of these contractual features. Interest Rate Risk Management Our policy is to manage interest cost using a mixture of fixed-rate and variable-rate debt. To manage this risk in a cost-efficient manner, we enter into interest rate swaps whereby we agree to exchange with the counterparty, at specified intervals, the difference between fixed and variable interest amounts calculated by reference to a notional amount. We designate certain interest rate swaps on fixed-rate debt that meet specific accounting criteria as fair value hedges. For fair value hedges, the changes in the fair value of the hedging instruments are immediately recognized in earnings, as well as the adjustment to debt for the change in fair value attributable to the designated risk. Foreign Currency Risk Management We manufacture and sell our products and finance our operations in a number of countries throughout the world. As a result, we are exposed to movements in foreign currency exchange rates. We leverage the Company’s diversified portfolio of exposures as a natural hedge. In certain cases, we enter into non-qualifying foreign currency contracts to hedge certain balance sheet items subject to revaluation. The change in fair value of these instruments and the underlying exposure are both immediately recognized in earnings. Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 61 To manage exchange rate risk related to our intercompany financing, we primarily use forward contracts and currency swaps. The change in fair value of these non-qualifying instruments is immediately recognized in earnings, substantially offsetting the foreign currency mark-to-market impact of the related exposure. Net Investment Hedging We hedge certain net investment positions in foreign subsidiaries. To accomplish this, we either borrow directly in foreign currencies and designate all or a portion of the foreign currency debt as a hedge of the applicable net investment position or we enter into foreign currency swaps that are designated as hedges of net investments. The time value component of the net investment hedge currency swaps is excluded from the assessment of hedge effectiveness. Changes in the fair value of the swap, including changes in the fair value of the excluded time value component, are recognized in OCI and offset the value of the net investment being hedged. The time value component is subsequently reported in income on a systematic basis. Commodity Risk Management Certain raw materials used in our products or production processes are subject to price volatility caused by weather, supply conditions, political and economic variables and other unpredictable factors. As of and during the fiscal years ended June 30, 2026 and 2025, we did not have any financial commodity hedging activity. Insurance We self-insure for most insurable risks. However, we purchase insurance for Directors and Officers Liability and certain other coverage where it is required by law or by contract. Fair Value Hierarchy Accounting guidance on fair value measurements for certain financial assets and liabilities requires that financial assets and liabilities carried at fair value be classified and disclosed in one of the following categories: • Level 1: Quoted market prices in active markets for identical assets or liabilities. • Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. • Level 3: Unobservable inputs reflecting the reporting entity's own assumptions or external inputs from inactive markets. The Company had no significant activity with 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 for the periods presented. When applying fair value principles in the valuation of assets and liabilities, we are required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company has not changed its valuation techniques used in measuring the fair value of any financial assets or liabilities during the year. When active market quotes are not available for financial assets and liabilities, we use industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including credit risk, interest rate curves and forward and spot prices for currencies. In circumstances where market-based observable inputs are not available, management judgment is used to develop assumptions to estimate fair value. Assets and Liabilities Measured at Fair Value Cash equivalents were $ 8.7 billion and $ 8.3 billion as of June 30, 2026 and 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 $ 28.3 billion and $ 29.5 billion as of June 30, 2026 and 2025, respectively. This includes the current portion of long-term debt instruments ($ 6.5 billion as of June 30, 2026, and $ 5.3 billion as of June 30, 2025). All long-term debt is recorded at amortized cost but is measured at fair value for disclosure purposes. Long-term debt designated in a fair value hedging relationship is adjusted for the change in fair value attributable to the designated hedged risk. 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. Amounts in millions of dollars except per share amounts or as otherwise specified. 62 The Procter & Gamble Company Disclosures about Financial Instruments The notional amounts and fair values of financial instruments used in hedging transactions as of June 30, 2026 and 2025, are as follows: Notional Amount Fair Value Asset Fair Value (Liability) As of June 30 2026 2025 2026 2025 2026 2025 DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS Interest rate contracts $ 5,241 $ 3,280 $ — $ — $ ( 221 ) $ ( 201 ) DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS Foreign currency interest rate contracts $ 13,587 $ 11,874 $ 170 $ — $ ( 173 ) $ ( 860 ) TOTAL DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS $ 18,828 $ 15,154 $ 170 $ — $ ( 394 ) $ ( 1,061 ) DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS Foreign currency contracts $ 4,146 $ 3,576 $ 6 $ 19 $ ( 7 ) $ — TOTAL DERIVATIVES AT FAIR VALUE $ 22,975 $ 18,730 $ 176 $ 19 $ ( 401 ) $ ( 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 $ 5.0 billion and $ 3.1 billion as of June 30, 2026 and 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 $ 12.0 billion and $ 11.2 billion as of June 30, 2026 and 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. The increase in the notional balance of derivative instruments designated as net investment hedges was 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 OCI. All of the Company's derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy. Before tax gains/(losses) on our financial instruments in hedging relationships are categorized as follows: Amount of Gain/(Loss) Recognized in OCI on Derivatives Fiscal years ended June 30 2026 2025 DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS (1) (2) Foreign currency interest rate contracts $ 264 $ ( 1,040 ) (1) For the derivatives in net investment hedging relationships, the amount of gain excluded from effectiveness testing, which was recognized in Interest expense, was $ 242 , $ 226 and $ 229 for the fiscal years ended June 30, 2026, 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/(loss) recognized in AOCI for such instruments was $ 395 and $( 1.1 ) billion, for the fiscal years ended June 30, 2026 and 2025, respectively. Amount of Gain/(Loss) Recognized in Earnings Fiscal years ended June 30 2026 2025 2024 DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS Interest rate contracts $ ( 20 ) $ 124 $ 120 DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS Foreign currency contracts $ 48 $ 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. 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 SG&A. Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 63 NOTE 10 SHORT-TERM AND LONG-TERM DEBT As of June 30 2026 2025 DEBT DUE WITHIN ONE YEAR Current portion of long-term debt $ 6,457 $ 5,377 Commercial paper 4,837 4,108 Other 3 27 TOTAL $ 11,296 $ 9,513 Weighted average interest rate of debt due within one year (1) 3.3 % 3.0 % (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. 64 The Procter & Gamble Company As of June 30 2026 2025 LONG-TERM DEBT 0.55 % USD note due October 2025 $ — $ 1,000 4.10 % USD note due January 2026 — 650 2.70 % USD note due February 2026 — 600 1.00 % USD note due April 2026 — 1,000 3.25 % EUR note due August 2026 741 762 2.45 % USD note due November 2026 875 875 1.90 % USD note due February 2027 1,000 1,000 2.80 % USD note due March 2027 500 500 4.88 % EUR note due May 2027 1,140 1,172 2.85 % USD note due August 2027 750 750 3.95 % USD note due January 2028 600 600 3.15 % EUR note due April 2028 741 762 1.20 % EUR note due October 2028 912 937 4.35 % USD note due January 2029 600 600 4.15 % USD note due October 2029 500 500 1.25 % EUR note due October 2029 570 586 3.00 % USD note due March 2030 1,500 1,500 4.05 % USD note due May 2030 700 700 0.35 % EUR note due May 2030 570 586 1.20 % USD note due October 2030 1,250 1,250 1.95 % USD note due April 2031 1,000 1,000 3.25 % EUR note due August 2031 741 762 2.30 % USD note due February 2032 850 850 4.10 % USD note due November 2032 750 — 4.05 % USD note due January 2033 850 850 2.90 % EUR note due November 2033 570 — 4.55 % USD note due January 2034 750 750 3.20 % EUR note due April 2034 969 996 4.55 % USD note due October 2034 500 500 4.60 % USD note due May 2035 550 550 4.35 % USD note due November 2035 500 — 5.55 % USD note due March 2037 716 716 1.88 % EUR note due October 2038 570 586 3.55 % USD note due March 2040 516 516 0.90 % EUR note due November 2041 684 703 3.65 % EUR note due November 2045 570 — All other long-term debt 5,265 5,263 Current portion of long-term debt ( 6,457 ) ( 5,377 ) TOTAL $ 22,842 $ 24,995 Weighted average interest rate of long-term debt (1) 3.3 % 3.3 % (1) Weighted average interest rate of long-term debt includes the effects of interest rate swaps discussed in Note 9. Long-term debt maturities during the next five fiscal years are as follows: Fiscal years ending June 30 2027 2028 2029 2030 2031 Debt maturities $ 6,457 $ 2,123 $ 1,993 $ 3,939 $ 2,275 Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 65 Credit Facilities 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 October 2030 and October 2026, respectively. Both facilities can be extended for certain periods of time as specified in the terms of the credit agreement. These facilities are currently undrawn and we anticipate that they will remain undrawn. These credit facilities do not have cross-default or ratings triggers, nor do they have material adverse event clauses, except at the time of signing. NOTE 11 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: Changes in Accumulated Other Comprehensive Income/(Loss) by Component Investment Securities Post-retirement Benefit Plans Foreign Currency Translation Total AOCI BALANCE AT JUNE 30, 2024, NET OF TAX $ 10 $ 613 $ ( 12,522 ) $ ( 11,900 ) Other comprehensive income/(loss), before tax: OCI before reclassifications ( 1 ) ( 1,717 ) ( 51 ) ( 1,769 ) Amounts reclassified to the Consolidated Statement of Earnings — ( 81 ) 752 671 Total other comprehensive income/(loss), before tax ( 1 ) ( 1,798 ) 701 ( 1,098 ) Tax effect 1 407 442 850 Total other comprehensive income/(loss), net of tax — ( 1,390 ) 1,143 ( 248 ) Less: OCI attributable to non-controlling interests, net of tax — — ( 4 ) ( 4 ) BALANCE AT JUNE 30, 2025, NET OF TAX 9 ( 777 ) ( 11,375 ) ( 12,143 ) Other comprehensive income/(loss), before tax: OCI before reclassifications 2 ( 533 ) 94 ( 437 ) Amounts reclassified to the Consolidated Statement of Earnings — 12 131 143 Total other comprehensive income/(loss), before tax 2 ( 521 ) 226 ( 294 ) Tax effect ( 1 ) 81 ( 129 ) ( 49 ) Total other comprehensive income/(loss), net of tax 1 ( 440 ) 96 ( 343 ) Less: OCI attributable to non-controlling interests, net of tax — ( 1 ) ( 20 ) ( 21 ) BALANCE AT JUNE 30, 2026, NET OF TAX $ 10 $ ( 1,216 ) $ ( 11,259 ) $ ( 12,465 ) 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/(expense), 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/(expense), 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 Pakistan in 2026 and Argentina in 2025 (see Note 3). NOTE 12 LEASES 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. We lease certain real estate, machinery, equipment, vehicles and office equipment for varying periods. Many of these leases include an option to either renew or terminate the lease. For purposes of calculating lease liabilities, these options are included within the lease term when it has become reasonably certain that the Company will exercise such options. The incremental borrowing rate utilized to calculate our lease liabilities is based on the information available at commencement date, as most of the leases do not provide an implicit borrowing rate. Our operating lease agreements do not contain any material guarantees or restrictive covenants. 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. 66 The Procter & Gamble Company 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. The most significant assets in our leasing portfolio relate to real estate and vehicles. For purposes of calculating lease liabilities for such leases, we have combined lease and non-lease components. The components of the Company’s total operating lease cost for the fiscal years ended June 30, 2026, 2025 and 2024, were as follows: Fiscal years ended June 30 2026 2025 2024 Operating lease cost $ 275 $ 276 $ 252 Variable lease cost (1) 85 81 91 Total lease cost $ 361 $ 357 $ 343 (1) Includes primarily costs for utilities, common area maintenance, property taxes and other operating costs associated with operating leases that are not included in the lease liability and are recognized in the period in which they are incurred. Supplemental balance sheet and other information related to leases is as follows: As of June 30 2026 2025 Operating leases: Right-of-use assets (Other noncurrent assets) $ 846 $ 925 Current lease liabilities (Accrued and other liabilities) 246 255 Noncurrent lease liabilities (Other noncurrent liabilities) 641 701 Total operating lease liabilities $ 887 $ 956 Weighted average remaining lease term: Operating leases 6.0 years 6.0 years Weighted average discount rate: Operating leases 5.6 % 4.6 % At June 30, 2026, future payments of operating lease liabilities were as follows: June 30, 2026 1 year $ 246 2 years 205 3 years 171 4 years 126 5 years 82 Over 5 years 198 Total lease payments 1,028 Less: Interest ( 141 ) Present value of lease liabilities $ 887 Total cash paid for amounts included in the measurement of lease liabilities was $ 273 and $ 280 for the fiscal years ended June 30, 2026 and 2025, respectively. The right-of-use assets obtained in exchange for lease liabilities were $ 168 and $ 261 for the fiscal years ended June 30, 2026 and 2025, respectively. NOTE 13 COMMITMENTS AND CONTINGENCIES Guarantees 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 indemnifications is also not explicitly stated and, as a result, the overall amount of these obligations cannot be reasonably Amounts in millions of dollars except per share amounts or as otherwise specified. The Procter & Gamble Company 67 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. In certain situations, we guarantee loans for suppliers and customers. The total amount of guarantees issued under such arrangements is not material. Off-Balance Sheet Arrangements We do not have off-balance sheet financing arrangements, including variable interest entities, that have a material impact on our financial statements. Purchase Commitments We have purchase commitments for materials, supplies, services and property, plant and equipment as part of the normal course of business. Commitments made under take-or-pay obligations are as follows: Fiscal years ending June 30 2027 2028 2029 2030 2031 Thereafter Purchase obligations $ 1,155 $ 764 $ 602 $ 349 $ 287 $ 494 Such amounts represent minimum commitments under take-or-pay agreements with suppliers and are in line with expected usage. These amounts include purchase commitments related to service contracts for information technology, human resources management and facilities management activities that have been outsourced to third-party suppliers. Due to the proprietary nature of many of our materials and processes, certain supply contracts contain penalty provisions for early termination. We do not expect to incur penalty payments under these provisions that would materially affect our financial position, results of operations or cash flows. 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. 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. NOTE 14 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 summary of the Company's outstanding obligation confirmed as valid under the SCF program is as follows: Fiscal years ended June 30 2026 2025 CONFIRMED OBLIGATIONS OUTSTANDING - BEGINNING OF YEAR $ 5,790 $ 5,559 Invoices confirmed 18,110 17,132 Confirmed invoices paid ( 17,741 ) ( 16,999 ) Translation and other 16 98 CONFIRMED OBLIGATIONS OUTSTANDING - END OF YEAR $ 6,176 $ 5,790 Amounts in millions of dollars except per share amounts or as otherwise specified. 68 The Procter & Gamble Company NOTE 15 SUBSEQUENT EVENT On August 4, 2026, the Company entered into an agreement to acquire Thorne, a premium wellness and supplement brand in the vitamins, minerals and supplements category for $ 3.8 billion. We anticipate the transaction to close in the second quarter of fiscal year 2027, with the timing subject to regulatory approval and customary closing conditions. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable.