Financial Analysis

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 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 co …

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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. 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 …

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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 numbe …

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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 …

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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 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 …

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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 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 Companys total operating lease cost for the fiscal years ended June 30, 2026, 2025 and 2024, …

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"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 StatementReporting Comprehensive IncomeExpense 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, IntangiblesGoodwill and OtherInternal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software. This guidance amends the accounting for and disclosure of …

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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. employe …

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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 primar …

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"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 benef …

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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.

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Commitments and Contingencies Litigation We are subject, from time to time, to certain legal proceedings and claims arising out of our business, which cover a wide range of matters, including antitrust and trade regulation, product liability, advertising, contracts, environmental, patent and trademark matters, labor and employment matters and tax. While considerable uncertainty exists, in the opinion of management and our counsel, the ultimate resolution of the various lawsuits and claims will not materially affect our financial position, results of operations or cash flows. We are also subject to contingencies pursuant to environmental laws and regulations that in the future may require us to take action to correct the effects on the environment of prior manufacturing and waste disposal practices. Based on currently available information, we do not believe the ultimate resolution of environmental remediation will materially affect our financial position, results of operations or cash flows. Income Tax Uncertainties The Company is present in about 70 countries and over 150 taxable jurisdictions and, at any point in time, has 3040 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 b …

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Share-Based Compensation and Postretirement Benefits The following table provides a summary of our share-based compensation expense and postretirement benefit impacts: Three Months Ended March 31 Nine Months Ended March 31 2026 2025 2026 2025 Share-based compensation expense $ 132 $ 123 $ 394 $ 364 Net periodic benefit cost for pension benefits 27 29 93 92 Net periodic benefit (credit) for other retiree benefits (153) (180) (456) (541)

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Goodwill and Intangible Assets Goodwill is allocated by reportable segment as follows: Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Total Company GOODWILL AT JUNE 30, 2025 $ 14,229 $ 12,993 $ 7,941 $ 1,848 $ 4,640 $ 41,650 Acquisitions and divestitures 40 40 Translation and other (124) (85) (78) (9) (35) (330) GOODWILL AT MARCH 31, 2026 $ 14,105 $ 12,908 $ 7,902 $ 1,840 $ 4,605 $ 41,359 Goodwill decreased from June 30, 2025, primarily due to currency translation, partially offset by a minor acquisition within Health Care. Identifiable intangible assets at March 31, 2026, were comprised of: Gross Carrying Amount Accumulated Amortization Intangible assets with determinable lives $ 9,175 $ (7,189) Intangible assets with indefinite lives 19,544 Total identifiable intangible assets $ 28,719 $ (7,189) Intangible assets with determinable lives consist of brands, patents, technology and customer relationships. The intangible assets with indefinite lives primarily consist of brands. The amortization expense of determinable-lived intangible assets for the three months ended March 31, 2026 and 2025, was $76 and $78, respectively. For the nine months ended March 31, 2026 and 2025, amortization expense was $232 and $241, respectively. Goodwill and indefinite-lived intangible assets are not amortized but are tested at least annually for impairment. We use the income method to estimate the fair value of these assets, which is based on forecasts of the …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

New Accounting Pronouncements and Policies In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures. This guidance requires consistent categories and greater disaggregation of information in the rate reconciliation and disclosures of income taxes paid by jurisdiction. This amendment is effective for our fiscal year ending June 30, 2026. This guidance will require additional disclosures in the Income Tax footnote but will not have a material impact on our Consolidated Financial Statements. In November 2024, the FASB issued ASU No. 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures: Disaggregation of Income Statement Expenses. This guidance requires disclosures about significant expense categories, including but not limited to, inventory purchases, employee compensation, depreciation, amortization and selling expenses. This amendment is effective for our fiscal year ending June 30, 2028, and our interim periods within the fiscal year ending June 30, 2029. We are currently assessing the impact of this guidance on our disclosures. In September 2025, the FASB issued ASU No. 2025-06, IntangiblesGoodwill and OtherInternal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software. This guidance amends the accounting for and disclosure of software costs. This amendment is effective for our fiscal year ending Ju …

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Restructuring Program The Company has historically incurred an ongoing annual level of restructuring-type activities to maintain a competitive cost structure, including manufacturing and workforce optimization. Before tax costs incurred under the ongoing program have generally ranged from $250 to $500 annually. Consistent with our historical policies for restructuring-type activities, the restructuring program charges will be funded by and included within Corporate for management and segment reporting. In June 2025, the Company announced a portfolio and productivity plan to streamline its portfolio and organization to improve its cost structure and competitiveness. The Company expects to incur approximately $1.5 to $2.0 billion in before-tax restructuring costs over two years. The Company expects to incur over half of the costs under this plan by the end of fiscal 2026, with the remainder incurred in fiscal 2027. The restructuring activities will be executed across the Sector Business Units as well as the Enterprise Markets, Corporate Functions and Global Business Services. These restructuring activities include a plan for a reduction of up to 7,000 non-manufacturing overhead personnel by the end of fiscal 2027. In addition, the plan includes brand and market exits as well as the optimization of the supply chain and other manufacturing processes. Costs incurred under the plan will consist primarily of costs to separate employees and asset-related costs to exit facilities. The …

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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). Operating segments as a percentage of consolidated net sales are as follows: % of Net sales by operating segment (1) Three Months Ended March 31 Nine Months Ended March 31 2026 2025 2026 2025 Fabric Care 23 % 23 % 23 % 23 % Home Care 12 % 12 % 12 % 12 % Baby Care 9 % 9 % 9 % 9 % Hair Care 9 % 9 % 9 % 9 % Family Care 9 % 9 % 8 % 9 % Groo …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing