PG 10-Q: Smart Summary

Basis of presentation: The unaudited Consolidated Financial Statements of The Procter & Gamble Company and subsidiaries are prepared in conformity with U.S. GAAP under SEC interim reporting rules and should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended June 30, 2025; management states all normal recurring adjustments necessary for fair presentation are included, but interim results may not be indicative of annual results.

• ASU 2023-09 (Income Taxes): Issued December 2023, requires consistent categories and greater disaggregation in the rate reconciliation and income taxes paid by jurisdiction; effective for fiscal year ending June 30, 2026, will require additional disclosures in the Income Tax footnote but will not have a material impact on the Consolidated Financial Statements.
• ASU 2024-03 (Expense Disaggregation): Issued November 2024, requires disclosures about significant expense categories including inventory purchases, employee compensation, depreciation, amortization, and selling expenses; effective for fiscal year ending June 30, 2028 and interim periods within fiscal year ending June 30, 2029; impact on disclosures is currently being assessed.
• ASU 2025-06 (Internal-Use Software): Issued September 2025, amends accounting for and disclosure of software costs; effective for fiscal year ending June 30, 2029 and interim periods within that fiscal year; impact on Consolidated Financial Statements is currently being assessed.
• All other pronouncements: No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on the Consolidated Financial Statements.

• Segment structure: P&G reports 5 reportable segments — Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care — each comprising specific product categories as defined in the note, plus a Corporate category that captures items not allocated to the named segments.
• Assets by segment: The CODM does not use assets by segment to evaluate performance or allocate resources; accordingly, assets by segment are not disclosed.
• Other segment items: For each reportable segment, 'Other segment items' includes interest expense, interest income, and certain other non-operating income/(expense). In the prior-year period, Corporate's Other segment items included non-operating losses comprised primarily of a non-cash charge of $752M for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina.
• Net sales mix: Fabric Care was the largest operating segment at 23% of net sales in both periods; Hair Care grew from 9% to 10% of net sales; all other operating segments were unchanged year-over-year as a percentage of net sales.

• Goodwill by segment: Total goodwill declined from $41.6B at June 30, 2025 to $41.6B at September 30, 2025, primarily due to currency translation; there were no acquisitions or divestitures in the quarter across any of the 5 reportable segments (Beauty, Grooming, Health Care, Fabric & Home Care, Baby Feminine & Family Care).
• Identifiable intangibles: As of September 30, 2025, gross identifiable intangibles totaled $28.9B, composed of $9.2B with determinable lives (brands, patents, technology, customer relationships) against $7.1B accumulated amortization, and $19.7B with indefinite lives (primarily brands); amortization expense on determinable-lived assets was $79M for the three months ended September 30, 2025, versus $83M for the three months ended September 30, 2024.
• Gillette intangible — headroom and carrying value: As of September 30, 2025, the Gillette indefinite-lived intangible asset had a carrying value of $12.8B; based on annual impairment testing performed during the three months ended December 31, 2024, its fair value exceeds carrying value by greater than 10%, while all other goodwill reporting units and indefinite-lived intangibles have fair values that 'significantly exceed' their carrying values.
• Gillette sensitivity analysis: A sensitivity analysis (performed during the three months ended December 31, 2024) shows that, in isolation, a +25 basis-point increase in the discount rate, a -25 basis-point decrease in short-term and residual growth rates, or a -50 basis-point decrease in the royalty rate would each reduce the estimated fair value of the Gillette indefinite-lived intangible asset by approximately (5)%, (5)%, and (4)%, respectively.

• Antidilutive options excluded: For the three months ended September 30, 2025 and 2024, antidilutive stock options excluded from the diluted EPS calculation were 11 million and 1 million, respectively.
• Preferred dividends: Preferred dividends of $73M (2025) and $72M (2024) are deducted from Net earnings attributable to P&G to arrive at the basic earnings available to common shareholders.

• Risk management changes: No significant changes in risk management policies or activities during the three months ended September 30, 2025; no transfers between fair value hierarchy levels during the periods presented, no significant Level 3 activity, and no significant assets or liabilities re-measured at fair value on a non-recurring basis.
• Cash equivalents and long-term debt fair value: Cash equivalents were $9.9B (September 30, 2025) and $8.3B (June 30, 2025), classified as Level 1; fair value of long-term debt was $29.6B and $29.5B as of those same dates (including current portions of $6B and $5.3B, respectively), classified as Level 2.
• Hedging instruments: Total derivatives at fair value carried a notional amount of $22.2B (September 30, 2025) versus $18.7B (June 30, 2025), with net fair value liabilities of ($786M) and ($1.1B), respectively; the increase in net investment hedge notional is described as primarily driven by the Company's decision to leverage favorable interest rate spreads in the foreign currency swap market. The carrying value of foreign currency denominated debt designated as net investment hedges was $11.2B as of both dates.
• Collateral and OCI impacts: Instruments in a liability position covered by netting/collateral agreements totaled $772M (September 30, 2025) and $1.1B (June 30, 2025); the Company has not been required to post collateral. Net investment hedge derivatives recognized a gain of $14M in OCI for the three months ended September 30, 2025 versus a loss of ($501M) in the prior-year quarter, with excluded amounts recognized in earnings of $71M and $50M for those same periods, respectively.

• AOCI balance: Total AOCI attributable to Procter & Gamble moved from ($12.1B) at June 30, 2025 to ($12.2B) at September 30, 2025, net of tax, a deterioration of ($19M) driven primarily by foreign currency translation losses of ($20M) net of tax, partially offset by a $3M improvement in postretirement benefit plans.
• Reclassifications: $13M (before tax) was reclassified from AOCI to the Consolidated Statement of Earnings during the quarter, entirely from postretirement benefit plans; these amounts are reclassified into Other non-operating income/(expense), net and included in the computation of net periodic postretirement costs.
• Noncontrolling interests: OCI attributable to noncontrolling interests was ($6M) net of tax, entirely within foreign currency translation.
• Foreign currency translation: The ($11.4B) foreign currency translation balance at September 30, 2025 includes both financial statement translation and changes in fair value of net investment hedges (see Note 7).

Legal Proceedings

• General litigation (ongoing): Management and counsel believe ultimate resolution of various lawsuits — covering antitrust, product liability, advertising, contracts, environmental, patents, labor, and tax — will not materially affect financial position.
• Environmental remediation (ongoing): Subject to contingencies under environmental laws related to prior manufacturing and waste disposal; management does not believe ultimate resolution will be material.
• Income tax uncertainties (~$132M, next 12 months): Across ~70 countries and 30–40 active jurisdictional audits, audit activity could complete in multiple jurisdictions with accrued liabilities of approximately $132M (including interest and penalties).

• SCF program structure: The Company supports a Supply Chain Finance program (SCF) with several global financial institutions, allowing participating suppliers to sell receivables to SCF banks using the Company's creditworthiness to obtain more favorable terms; the Company is not party to supplier-bank agreements, provides no guarantee, and has no economic interest in a supplier's decision to sell a receivable.
• Payment terms: Supplier payment terms under the SCF program generally range from 60 to 180 days.
• Balance sheet classification: All outstanding SCF amounts are recorded within Accounts payable on the Consolidated Balance Sheets, with associated payments included in operating activities on the Consolidated Statements of Cash Flows; amounts due to SCF-participating suppliers were approximately $5.9B as of September 30, 2025 and $5.8B as of June 30, 2025.

• Ongoing program baseline: Historically, the Company has incurred annual restructuring-type costs of $250 to $500M (before tax), funded by and included within Corporate for management and segment reporting.
• Portfolio and productivity plan: In June 2025, the Company announced a new plan to streamline its portfolio and organization, expecting $1.5 to $2B in before-tax restructuring costs over two years — approximately half by end of fiscal 2026 and the remainder in fiscal 2027 — covering Sector Business Units, Enterprise Markets, Corporate Functions, and Global Business Services, with a reduction of up to 7,000 non-manufacturing overhead personnel by end of fiscal 2027, plus brand and market exits and supply chain optimization.
• Q1 FY2026 charges: For the three months ended September 30, 2025, the Company incurred total before-tax charges of $215M: $100M in Costs of products sold, $106M in SG&A, and $9M in Other non-operating income/(expense), net.
• Reserve roll-forward: The restructuring reserve increased from $189M at June 30, 2025 to $273M at September 30, 2025, driven by $215M of costs incurred offset by $131M of costs paid/settled; the Separations reserve was $182M and Other was $91M at period-end (Asset-Related reserve was $0 both periods as charges were settled in the quarter).

• Purpose and structure: The MD&A is organized into seven sections — Overview; Summary of Results – Three Months Ended September 30, 2025; Economic Conditions and Uncertainties; Results of Operations – Three Months Ended September 30, 2025; Segment Results – Three Months Ended September 30, 2025; Liquidity and Capital Resources; and Measures Not Defined by U.S. GAAP.
• Non-GAAP measures: Management refers to organic sales growth, Core EPS, adjusted free cash flow, and adjusted free cash flow productivity, all of which are not defined under U.S. GAAP; definitions, rationale for use, derivations, and reconciliations to the most directly comparable U.S. GAAP measures are provided at the end of the MD&A.
• Market share methodology: Market share and consumption estimates are based on a combination of vendor-purchased traditional brick-and-mortar and online data in key markets plus internal estimates; all market share references represent the % of sales in dollar terms on a constant currency basis relative to all product sales in the category, and typically reflect a lag of one or two months versus the end of the reporting period.
• Volume metric: Organic volume growth reflects year-over-year changes in unit volume excluding the impacts of acquisitions and divestitures and certain one-time items, if applicable, and is used to explain changes in organic sales.

• Business overview: P&G describes itself as a global leader in fast-moving consumer goods, selling branded consumer packaged goods in about 180 countries and territories through mass merchandisers, e-commerce (including social commerce), grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores, high-frequency stores, pharmacies, electronics stores, professional channels, and direct-to-consumer; it has on-the-ground operations in about 70 countries.
• Competitive environment: P&G competes against global, regional, and local competitors as well as retailers' private-label brands across price tiers (super-premium, premium, mid-tier, and value-tier); management states the company is well positioned and often holds a leadership or significant market share position in its segments.
• Segment structure change: Effective July 1, 2024, the Beauty reportable segment separated Skin and Personal Care into individual operating segments (Skin Care and Personal Care), including separation of management team, strategic decision-making, innovation plans, financial targets, budgets, and management reporting.
• Regional reporting: MD&A references business results by region: North America, Europe, Greater China, Latin America, Asia Pacific, and India, Middle East and Africa (IMEA).

• Restructuring scope: The Company began a limited market portfolio restructuring in fiscal year ended June 30, 2024, targeting certain Enterprise Markets including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions.
• Argentina liquidation completed: During the period ended September 30, 2024, the Company completed the restructuring with the substantial liquidation of its Argentina operations, recording incremental restructuring charges of approximately $800M after tax, comprised primarily of non-cash charges for accumulated foreign currency translation losses previously included in Accumulated other comprehensive income/(loss).
• Cumulative program charges: Total incremental restructuring charges incurred under the program from the three-month period ended December 31, 2023, through the three-month period ended September 30, 2024, were approximately $1.2B after tax.

• Plan announcement: In June 2025, the Company announced a portfolio and productivity plan to streamline its portfolio and organization and improve its cost structure and competitiveness, with restructuring activities to be executed across the Sector Business Units, Enterprise Markets, Corporate Functions, and Global Business Services.
• Cost estimates: The Company expects to incur approximately $1.5 to $2B in before-tax restructuring costs over a two-year period, with half of the costs expected by the end of fiscal 2026 and the remainder in fiscal 2027.
• Headcount reduction: Restructuring activities include a plan for a reduction of up to 7,000 non-manufacturing overhead personnel by the end of fiscal 2027.
• Segment reporting treatment: Resulting charges are funded by and included within Corporate for segment reporting purposes; restructuring charges above the normal ongoing level are reported as non-core charges.

• Glad joint venture wind-down: The Company and The Clorox Company have jointly decided not to renew the Glad joint venture agreement; Clorox will purchase the Company's minority interest at fair market value as of the agreement termination in January 2026.
• Expected proceeds and gain: Subject to market conditions and the parties' negotiations on fair market value, the Company expects to receive cash proceeds of approximately $500M and record an after-tax gain in the range of $250 to $300M in the third quarter of the fiscal year ended June 30, 2026.

• Net sales: $22.4B, up $649M or 3% versus the prior year period; mid-single digit growth in Beauty and Grooming, low single digit growth in Health Care, Baby, Feminine & Family Care, and Fabric & Home Care. Organic sales (excluding acquisitions, divestitures, and foreign exchange) increased 2%, with mid-single digit growth in Beauty, low single digit growth in Grooming and Health Care, and unchanged organic sales in Fabric & Home Care and Baby, Feminine & Family Care.
• Net earnings: $4.8B, up $794M or 20% versus the prior year period, driven primarily by higher restructuring charges in the prior year period related to the substantial liquidation of operations in certain Enterprise Markets, including Argentina; net earnings attributable to Procter & Gamble were $4.8B, up $791M or 20%.
• EPS: Diluted EPS increased 21% to $1.95; Core EPS (excluding incremental restructuring charges) increased 3% to $1.99.
• Cash flow: Operating cash flow was $5.4B; adjusted free cash flow (operating cash flow less capital expenditures, excluding transitional tax payments from the 2017 U.S. Tax Act) was $4.9B; adjusted free cash flow productivity was 102% of net earnings.

• Net sales: Net sales grew 3% to $22.4B in the three months ended September 30, 2025, from $21.7B in the prior-year period.
• Earnings growth: Net earnings attributable to Procter & Gamble increased 20% to $4.8B, with diluted net earnings per common share up 21% to $1.95; core net earnings per common share grew 3% to $1.99 from $1.93.
• Margin profile: Gross margin contracted 70 basis points to 51.4%, and operating income margin declined 50 basis points to 26.2%; however, earnings before income taxes as a % of net sales expanded 340 basis points to 27.0%, and net earnings margin expanded 310 basis points to 21.4%, reflecting items below the operating line.

• Overall net sales: Net sales for the quarter increased 3% to $22.4B, driven by higher pricing of 1%, favorable mix of 1%, and favorable foreign exchange of 1%, with volume having a neutral impact; excluding acquisitions, divestitures, and foreign exchange, organic sales increased 2%.
• Segment drivers: Beauty led growth at 6% (volume +4%, FX +1%, price +2%, mix -1%); Grooming grew 5% (volume +1%, FX +2%, price +4%, mix -2%); Health Care +2%, Fabric & Home Care +1%, and Baby, Feminine & Family Care +1% each showed modest gains.

• Gross margin: Decreased 70 basis points to 51.4% of net sales for the quarter, with headwinds from unfavorable product mix (100 bps), product and packaging investments (70 bps), higher tariff costs (60 bps), unfavorable foreign exchange (20 bps), higher restructuring costs (20 bps), and higher commodity costs (10 bps), partially offset by manufacturing productivity savings (140 bps), higher pricing (50 bps), and other items and rounding (20 bps).
• SG&A: Total SG&A spending increased 2% to $5.6B versus the prior year period due to increased marketing spending and overhead costs; SG&A as a percentage of net sales decreased 20 basis points to 25.2%, driven by a 20-basis-point decrease in marketing spending as a percentage of net sales from productivity savings, while overhead costs as a percentage of net sales were unchanged as wage inflation and foreign exchange headwinds were offset by productivity savings; productivity-driven cost savings delivered 90 basis points of benefit to SG&A as a percentage of net sales.
• Operating income: Increased $59M, or 1%, to $5.9B; operating margin decreased 50 basis points to 26.2% versus the prior year period, reflecting the gross margin decline partially offset by the decrease in SG&A as a percentage of net sales.

• Interest expense: $197M for the quarter, a decrease of $41M versus the prior year period.
• Interest income: $108M for the quarter, a decrease of $27M versus the prior year period.
• Other non-operating income/(expense): $268M for the quarter, an increase of $822M versus the prior year period, driven primarily by a non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina recorded in the prior year period.

• Effective tax rate: 20.8% for the three months ended September 30, 2025, down from 22.4% for the three months ended September 30, 2024, a decrease of approximately 160 basis points year over year.
• Rate decrease drivers: The decline was primarily driven by a prior year charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in Argentina (300 basis points impact) and discrete impacts related to uncertain tax positions, partially offset by a 200 basis-point increase from lower excess tax benefits of share-based compensation in the current year.

• Net earnings: $4.8B for the quarter, up $794M or 20% versus the prior year period, driven by higher operating income, increased other non-operating income, and a lower effective tax rate.
• Foreign exchange impact: Negative impact of approximately $4M on net earnings for the quarter, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S. dollars.
• Attributable earnings and EPS: Net earnings attributable to Procter & Gamble were $4.8B, up $791M or 20% for the quarter; diluted EPS increased 21% to $1.95 versus the prior year period.

• Segment performance overview: For the three months ended September 30, 2025, total company net sales grew 3% to $22.4B, earnings before income taxes grew 17% to $6B, and net earnings grew 20% to $4.8B versus the comparable prior year period.
• Top-line leaders: Beauty (+6% net sales to $4.1B) and Grooming (+5% to $1.8B) led segment-level sales growth; Grooming also posted the strongest earnings growth with earnings before income taxes up 12% to $585M and net earnings up 9% to $463M.
• Margin pressure segments: Health Care net sales rose 2% to $3.2B but earnings before income taxes declined 2% to $937M and net earnings fell 3% to $718M; Fabric & Home Care net sales grew 1% to $7.8B with earnings before income taxes down 2% to $2B and net earnings down 3% to $1.6B.
• Corporate: Corporate reported net sales of $242M, a loss before income taxes of $108M, and net earnings of $36M for the quarter (% change versus year ago shown as N/A).

• Net sales: Beauty net sales increased 6% to $4.1B for the three months ended September 30, 2025, driven by a unit volume increase of 4%, pricing contribution of 2%, and favorable foreign exchange of 1%, partially offset by unfavorable product mix of 1%; organic sales (excluding acquisitions, divestitures, and foreign exchange) also increased 6%, while global market share of the Beauty segment decreased 0.5 points.
• Category performance: Hair Care net sales increased mid-single digits with organic sales up low single digits (double-digit growth in Europe, high single-digit growth in Latin America, partially offset by a low single-digit decline in North America), while Personal Care net sales increased double digits with organic sales up high single digits (mid-teens growth in Europe, high single-digit growth in North America and Greater China); Skin Care net sales increased mid-single digits with organic sales also up mid-single digits (high single-digit growth in Greater China and Asia Pacific), though unit volume declined due to distribution loss in Europe.
• Market share: Global market share decreased 1 point in Hair Care and 1 point in Skin Care, while Personal Care gained 0.2 points.
• Net earnings: Net earnings increased 5% to $879M, with net earnings margin down 40 basis points due to an 80 basis-point gross margin decline (driven by higher tariff costs, unfavorable category mix, and higher commodity costs, partially offset by productivity savings) and a higher effective tax rate from unfavorable geographic mix, partially offset by lower SG&A as a percentage of net sales.

• Net sales: Grooming net sales increased 5% to $1.8B for the three months ended September 30, 2025, driven by innovation-driven pricing of 4% (primarily North America and Europe), favorable foreign exchange of 2%, and a unit volume increase of 1%, partially offset by unfavorable product mix of 2%.
• Organic sales and volume: Organic sales increased 3% (excluding acquisitions, divestitures, and foreign exchange), driven by high single-digit growth in Latin America and mid-single-digit growth in Europe, partially offset by low single-digit growth in North America; unit volume grew on increased distribution in Latin America, partially offset by competitive activity in IMEA.
• Market share: Global market share of the Grooming segment decreased 0.8 points.
• Net earnings: Net earnings increased 9% to $463M, reflecting higher net sales and an 80 basis-point increase in net earnings margin; gross margin improved 10 basis points (driven by pricing, partially offset by higher tariff costs and unfavorable product mix), SG&A as a % of net sales declined on positive scale impacts and lower marketing spending, while a higher effective tax rate from unfavorable geographic mix partially offset these gains.

• Net sales: Health Care net sales increased 2% to $3.2B, with favorable product mix contributing 2%, higher pricing 1%, and favorable foreign exchange 1%, partially offset by a 2% unit volume decline; organic sales (excluding acquisitions, divestitures, and foreign exchange) increased 1%, and global market share of the Health Care segment increased 0.3 points.
• Oral Care: Net sales increased low single digits driven by favorable product mix (growth of power brushes and premium paste) and favorable foreign exchange, partially offset by unit volume declines across all regions except Latin America (distribution gains); organic sales were unchanged as low single-digit increases in North America and Latin America were fully offset by a double-digit decrease in Asia Pacific and a high single-digit decrease in Greater China; global market share of the Oral Care category decreased 0.3 points.
• Personal Health Care: Net sales increased low single digits driven by higher pricing (Latin America and North America) and favorable foreign exchange, partially offset by a unit volume decrease led by North America (shift in customer order timing ahead of respiratory season); organic sales increased low single digits with a mid-teens increase in Latin America and mid-single-digit increase in Europe partially offset by a mid-single-digit decline in North America; global market share of the Personal Health Care category increased 0.5 points.
• Net earnings: Net earnings decreased 3% to $718M on a 120 basis-point decrease in net earnings margin; gross margin declined 170 basis points driven by unfavorable geographic mix and higher cost of tariffs, partially offset by productivity savings, while SG&A as a percentage of net sales decreased due to positive scale impacts of the net sales increase.

• Net sales: Fabric & Home Care net sales increased 1% to $7.8B, driven by favorable foreign exchange of 2% and higher pricing of 1%, partially offset by a unit volume decrease of 2%; organic sales were unchanged excluding foreign exchange and acquisitions and divestitures. Global market share of the segment decreased 0.4 points.
• Fabric Care: Net sales were unchanged as favorable foreign exchange was fully offset by a unit volume decrease; the volume decline was driven by Europe (increased competitive activity), partially offset by Asia Pacific and Latin America (market growth). Organic sales decreased low single digits, driven by a double-digit decline in Europe partially offset by a low single-digit increase in North America. Global market share decreased 0.9 points.
• Home Care: Net sales increased low single digits driven by higher pricing (primarily in North America and Europe) and favorable foreign exchange, partially offset by a volume decrease; volume declined in Europe (increased competitive activity) but increased in North America (innovation). Organic sales increased low single digits. Global market share increased 0.4 points.
• Net earnings: Net earnings decreased 3% to $1.6B due to a 70 basis-point decrease in net earnings margin; gross margin declined 130 basis points driven by unfavorable product mix, higher tariff costs, and higher commodities, partially offset by productivity savings, while SG&A as a percentage of net sales decreased due to lower marketing spending.

• Net sales: Baby, Feminine & Family Care net sales increased 1% to $5.2B, driven by favorable foreign exchange of 1%; unit volume was unchanged and organic sales were unchanged excluding foreign exchange and acquisitions/divestitures impacts. Global market share of the segment decreased 0.3 points.
• Category performance: Baby Care organic sales increased low single digits (with a 20% increase in Greater China and mid-single-digit increase in Latin America, partially offset by a low single-digit decline in North America); Feminine Care organic sales were unchanged (low single-digit growth in North America offset by high single-digit decline in IMEA and low single-digit decline in Europe); Family Care organic sales decreased low single digits driven by lower pricing due to merchandising investments with North America market share down 0.8 points.
• Net earnings: Net earnings increased 4% to $1.1B, with a 50 basis-point increase in net earnings margin; gross margin declined 10 basis points due to unfavorable category mix and higher cost of tariffs, partially offset by productivity savings and lower commodity costs; SG&A as a percentage of net sales decreased primarily due to lower marketing spending; the higher effective tax rate was driven by unfavorable geographic mix.

• Corporate segment scope: Corporate includes operating and non-operating activities not allocated to specific segments — incidental businesses managed at the corporate level, gains/losses on divested brands, financing and investing activity impacts, employee benefit impacts, asset impairments, and restructuring activities including manufacturing and workforce optimization. The most notable ongoing reconciling item is income taxes, which adjusts the blended statutory rates used in reportable segments to the overall Company effective tax rate.
• Net sales: Corporate net sales increased $79M to $242M for the three months ended September 30, 2025, driven by an increase in net sales of incidental businesses managed at the corporate level.
• Net earnings: Corporate net earnings increased $743M to $36M for the three months ended September 30, 2025, due primarily to restructuring charges related to the substantial liquidation of operations in certain Enterprise Markets, including Argentina, in the prior year period.

• Operating cash flow: $5.4B fiscal year to date, an increase of $1.1B versus the prior year period, with net earnings adjusted for non-cash items (depreciation and amortization, share-based compensation expense, deferred income taxes, and gain/loss on sale of assets) generating $5.7B of operating cash flow.
• Working capital drag: Working capital and other impacts consumed $304M of cash in total; accounts receivable consumed $305M (driven by sales growth, with days sales outstanding flat) and inventories consumed $303M (driven by increased safety stock levels and new product initiatives, with days inventory on hand down one day).
• Trade payables offset: Trade payables increased, generating $648M of cash, driven primarily by increased supply chain activity in line with the inventory increase.
• Other cash uses: Other impacts consumed an additional $344M, primarily driven by the payment of the transitional tax related to the 2017 U.S. Tax Act and a reduction in postretirement benefit and compensation accruals, partially offset by current year income tax accruals in excess of estimated payments.

Investing activities: Used $1.5B of cash fiscal year to date, primarily driven by capital expenditures.

• Financing cash use: Financing activities used $2.2B of net cash fiscal year to date, driven primarily by dividends to shareholders and treasury stock purchases, partially offset by a net debt increase.
• Working capital position: As of September 30, 2025, current liabilities exceeded current assets by $10.9B; management anticipates supporting short-term liquidity and operating needs largely through cash generated from operations.
• Debt market access: Strong short- and long-term debt ratings are expected to enable refinancing of debt at favorable rates in commercial paper and bond markets, supplemented by agreements with a diverse group of financial institutions to meet short-term financing requirements if needed.

• Organic sales growth: Organic sales growth excludes foreign exchange and acquisition/divestiture impacts; for the three months ended September 30, 2025, total company net sales grew 3%, with a (1)% FX headwind and flat acquisition/divestiture impact, yielding 2% organic growth; Beauty led at 6% organic growth, while Fabric & Home Care and Baby, Feminine & Family Care were flat organically.
• Adjusted free cash flow: Defined as operating cash flow less capital spending, excluding 2017 U.S. Tax Act payments; for the three months ended September 30, 2025, operating cash flow of $5.4B less capital spending of ($1.2B) plus $688M of 2017 U.S. Tax Act payments produced adjusted free cash flow of $4.9B, with adjusted free cash flow productivity of 102% against net earnings of $4.8B.
• Core EPS: Core EPS excludes incremental restructuring charges above the company's historical $250–$500M before-tax baseline, including charges related to a portfolio and productivity plan announced June 5, 2025 and a limited market portfolio restructuring completed in the period ended September 30, 2024; for the three months ended September 30, 2025, GAAP diluted EPS of $1.95 adjusted by $0.04 of incremental restructuring yielded Core EPS of $1.99, up 3% versus prior year, while GAAP diluted EPS grew 21% and GAAP net earnings attributable to P&G grew 20% versus the prior year's $4B (which included significant incremental restructuring of $801M after-tax).