Question: What are the potential risks associated with P&G's portfolio restructuring efforts, and how is the company managing these risks?

Procter & Gamble’s (P&G) restructuring efforts face several key risks. Financially, the company expects to record post-tax restructuring charges of $1.0 to $1.5 billion due to foreign currency translation losses. In fiscal 2024, P&G incurred $659 million in restructuring costs, up from $329 million in 2023, including $216 million in non-cash charges for currency translation losses, particularly from operations in Nigeria.

Operationally, business continuity may be disrupted due to the liquidation of markets like Nigeria and Argentina, affecting supply chains and customer relations. Significant asset write-downs are involved.

Execution risks also arise from the complexity of restructuring, with annual costs historically ranging between $250 to $500 million. P&G mitigates these risks by implementing structured financial controls, detailed operational oversight, and a focus on optimizing manufacturing and workforce costs to ensure efficiency and competitiveness during transitions.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.;Item 8. Financial Statements and Supplementary Data.

PROCTER & GAMBLE Co 10-K form for the fiscal year ended 2024-06-30, page 18:
18 The Procter & Gamble Company

RECENT DEVELOPMENTS

Limited Market Portfolio Restructuring

In December 2023, the Company announced a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. In connection with this announcement, the Company announced that it expected to record incremental restructuring charges of $1.0 to $1.5 billion after tax, consisting primarily of foreign currency translation losses to be recognized as non-cash charges upon the substantial liquidation of operations in the affected markets.
As of June 30, 2024, the Company has substantially liquidated its operations in certain Enterprise Markets, including Nigeria, and recorded a non-cash charge of $216 million after tax for accumulated currency translation losses previously included in Accumulated other comprehensive income/(loss). On July 1, 2024, the Company completed the divestiture of its business in Argentina. The Company expects to record a non-cash charge of approximately $750 million for accumulated currency translation losses in the first quarter of the fiscal year ending June 30, 2025. Consistent with our historical policies for ongoing restructuring-type activities, resulting charges were funded by and included within Corporate for segment reporting. Restructuring charges above the normal ongoing level of restructuring costs were reported as non-core charges. For more details on the restructuring program, refer to Note 3 to the Consolidated Financial Statements.

Intangible Asset Impairment

During the fiscal year ended June 30, 2024, the Company recorded a $1.3 billion before tax ($1.0 billion after tax) non-cash impairment charge on an indefinite-lived intangible asset acquired as part of the Company's 2005 acquisition of The Gillette Company. The impairment charge arose from a reduction in the estimated fair value of the Gillette indefinite-lived intangible asset due to a higher discount rate, weakening of several currencies relative to the U.S. dollar and the impact of the non-core restructuring program described above. This impairment charge adjusted the carrying value of the Gillette indefinite-lived intangible asset to fair value. For a more detailed discussion of the Gillette impairment, refer to Note 4 to the Consolidated Financial Statements.

SUMMARY OF 2024 RESULTS
|    |                                               |        |        |      |        |                       |        |    |    |    |    |
|---:|:----------------------------------------------|:-------|:-------|:-----|:-------|:----------------------|:-------|:---|:---|:---|:---|
|  1 | Amounts in millions, except per share amounts | 2024   |        | 2023 |        | Change vs. Prior Year |        |    |    |    |    |
|  2 | Net sales                                     | $      | 84,039 |      |        | $                     | 82,006 |    |    | 2  | %  |
|  3 | Operating income                              | 18,545 |        |      | 18,134 |                       |        | 2  | %  |    |    |
|  4 | Net earnings                                  | 14,974 |        |      | 14,738 |                       |        | 2  | %  |    |    |
|  5 | Net earnings attributable to Procter & Gamble | 14,879 |        |      | 14,653 |                       |        | 2  | %  |    |    |
|  6 | Diluted net earnings per common share         | 6.02   |        |      | 5.90   |                       |        | 2  | %  |    |    |
|  7 | Core earnings per share                       | 6.59   |        |      | 5.90   |                       |        | 12 | %  |    |    |
|  8 | Cash flow from operating activities           | 19,846 |        |      | 16,848 |                       |        | 18 | %  |    |    |

•Net sales increased 2% to $84.0 billion versus the prior year. The net sales growth was driven by mid-single-digit increases in Health Care, Fabric & Home Care and Grooming and a low single-digit increase in Beauty. Net Sales were unchanged in Baby, Feminine & Family Care. Organic sales, which exclude the impact of acquisitions and divestitures and foreign exchange, increased 4%. Organic sales increased high single digits in Grooming, mid-single digits in Fabric & Home Care and Health Care and low single digits in Beauty and Baby, Feminine & Family Care.
•Operating income increased $411 million, or 2%, to $18.5 billion due to the increase in net sales, partially offset by the non-cash impairment charge of $1.3 billion related to the Gillette intangible asset.
•Net earnings increased $236 million, or 2%, to $15.0 billion due to the increase in operating income, partially offset by a higher effective tax rate. Foreign exchange impacts reduced net earnings by approximately $589 million.

•Net earnings attributable to Procter & Gamble increased $226 million, or 2%, to $14.9 billion.

•Diluted EPS increased 2% to $6.02 due to the increase in net earnings. Core EPS, which excludes the charge for the Gillette intangible asset impairment and incremental restructuring charges, increased 12% to $6.59.
•Cash flow from operating activities was $19.8 billion.
◦    Adjusted free cash flow, which is operating cash flow less capital expenditures and certain other impacts, was $16.9 billion.
◦    Adjusted free cash flow productivity, which is the ratio of adjusted free cash flow to net earnings excluding the Gillette intangible asset impairment charge and a non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria, was 105%.

, PROCTER & GAMBLE Co 10-K form for the fiscal year ended 2024-06-30, page 24:
24 The Procter & Gamble Company

Europe (due to increased pricing), Latin America (due to increased competitive activity) and IMEA (due to increased pricing), partially offset by growth in North America (due to increased marketing support and distribution gains). Organic sales increased mid-single digits driven by mid-single-digit increases in Europe and IMEA and a low single-digit increase in North America. Market share of the feminine care category increased 0.2 points.
•Net sales in Family Care, which is predominantly a North American business, increased low single digits driven by a unit volume increase (due to market growth and increased marketing support) and higher pricing, partially offset by unfavorable product mix (due to growth of larger pack sizes with lower than category-average selling prices). Organic sales also increased low single digits. North America's share of the family care category decreased 0.4 points.
Net earnings increased 13% to $4.0 billion due to a 230 basis-point increase in net earnings margin. Net earnings margin increased primarily due to an increase in gross margin, partially offset by an increase in SG&A as a percentage of net sales. Gross margin increased primarily due to lower commodity costs, productivity savings and increased pricing, partially offset by unfavorable foreign exchange. SG&A as a percentage of net sales increased due to an increase in marketing and overhead spending.

CORPORATE

|    |                     |          |        |                 |
|---:|:--------------------|:---------|:-------|:----------------|
|  1 | ($ millions)        | 2024     | 2023   | Change vs. 2023 |
|  2 | Net sales           | $601     | $765   | (21)%           |
|  3 | Net earnings/(loss) | $(1,430) | $(399) | N/A             |

Corporate includes certain operating and non-operating activities not allocated to specific business segments. These include but are not limited to incidental businesses managed at the corporate level, gains and losses related to certain divested brands or businesses, impacts from various financing and investing activities, impacts related to employee benefits, asset impairments and restructuring activities including manufacturing and workforce optimization. Corporate also includes reconciling items to adjust the accounting policies used within the reportable segments to U.S. GAAP. The most notable ongoing reconciling item is income taxes, which adjusts the blended statutory rates that are reflected in the reportable segments to the overall Company effective tax rate.
Corporate net sales decreased $164 million to $601 million due to a decrease in net sales of incidental businesses managed at the corporate level. Corporate net earnings decreased $1.0 billion due to a loss of $1.4 billion due primarily to the impairment charge of the Gillette intangible asset and incremental restructuring charges.

Restructuring Program to Deliver Productivity and Cost Savings

The Company has historically had an ongoing restructuring program with annual spending in the range of $250 to $500 million before tax. On December 5, 2023, the Company announced an incremental limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria.
In fiscal 2024, the Company incurred before tax restructuring costs of $659 million, which include foreign currency translation losses recognized as a non-cash charge of approximately $216 million due to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria. Restructuring accruals of $166 million as of June 30, 2024, are classified as current liabilities. Excluding the non-cash charges of foreign currency translation losses for certain Enterprise Markets, including Nigeria, approximately 64% of the restructuring charges incurred in fiscal 2024 either have been or will be settled with cash. Consistent with our policies for restructuring-type activities, the resulting charges are funded by and included within Corporate for segment reporting.
Savings generated from the Company's restructuring program are difficult to estimate, given the nature of the activities, the timing of the execution and the degree of reinvestment. In addition to our restructuring programs, we have additional ongoing savings efforts in our supply chain, marketing and overhead areas that yield additional benefits to our operating margins. Refer to Note 3 to the Consolidated Financial Statements for more details on the restructuring program.

CASH FLOW, FINANCIAL CONDITION AND LIQUIDITY

We believe our financial condition continues to be of high quality, as evidenced by our ability to generate substantial cash from operations and to readily access capital markets at competitive rates.
Operating cash flow provides the primary source of cash to fund operating needs and capital expenditures. Excess operating cash is used first to fund shareholder dividends. Other discretionary uses include share repurchases and acquisitions to complement our portfolio of businesses, brands and geographies. As necessary, we may supplement operating cash flow with debt to fund these activities. The overall cash position of the Company reflects our strong business results and a global cash management strategy that takes into account liquidity management, economic factors and tax considerations.

, PROCTER & GAMBLE Co 10-K form for the fiscal year ended 2024-06-30, page 45:
The Procter & Gamble Company 45

NOTE 3

SUPPLEMENTAL FINANCIAL INFORMATION

The components of property, plant and equipment were as follows:
|    |                                     |          |        |      |          |    |        |
|---:|:------------------------------------|:---------|:-------|:-----|:---------|:---|:-------|
|  1 | As of June 30                       | 2024     |        | 2023 |          |    |        |
|  2 | PROPERTY, PLANT AND EQUIPMENT       |          |        |      |          |    |        |
|  3 | Machinery and equipment             | $        | 37,507 |      |          | $  | 36,521 |
|  4 | Buildings                           | 8,534    |        |      | 8,277    |    |        |
|  5 | Construction in progress            | 3,126    |        |      | 2,980    |    |        |
|  6 | Land                                | 895      |        |      | 867      |    |        |
|  7 | TOTAL PROPERTY, PLANT AND EQUIPMENT | 50,063   |        |      | 48,645   |    |        |
|  8 | Accumulated depreciation            | (27,911) |        |      | (26,736) |    |        |
|  9 | PROPERTY, PLANT AND EQUIPMENT, NET  | $        | 22,152 |      |          | $  | 21,909 |
Selected components of current and noncurrent liabilities were as follows:|    |                                         |       |        |      |       |    |        |
|---:|:----------------------------------------|:------|:-------|:-----|:------|:---|:-------|
|  1 | As of June 30                           | 2024  |        | 2023 |       |    |        |
|  2 | ACCRUED AND OTHER LIABILITIES - CURRENT |       |        |      |       |    |        |
|  3 | Accrued marketing and promotion         | $     | 4,172  |      |       | $  | 3,894  |
|  4 | Accrued compensation                    | 2,161 |        |      | 2,030 |    |        |
|  5 | Taxes payable                           | 1,042 |        |      | 828   |    |        |
|  6 | Accrued interest                        | 282   |        |      | 235   |    |        |
|  7 | Lease liabilities                       | 243   |        |      | 222   |    |        |
|  8 | Restructuring reserves                  | 166   |        |      | 174   |    |        |
|  9 | Derivative liabilities                  | 54    |        |      | 631   |    |        |
| 10 | Other                                   | 2,953 |        |      | 2,915 |    |        |
| 11 | TOTAL                                   | $     | 11,073 |      |       | $  | 10,929 |
| 13 | OTHER NONCURRENT LIABILITIES            |       |        |      |       |    |        |
| 14 | Pension benefit obligations             | $     | 2,884  |      |       | $  | 3,116  |
| 15 | Uncertain tax positions                 | 723   |        |      | 622   |    |        |
| 16 | Lease liabilities                       | 666   |        |      | 595   |    |        |
| 17 | Other retiree benefit obligations       | 653   |        |      | 690   |    |        |
| 18 | U.S. Tax Act transitional tax payable   | 592   |        |      | 1,154 |    |        |
| 19 | Derivative liabilities                  | 325   |        |      | 445   |    |        |
| 20 | Other                                   | 555   |        |      | 530   |    |        |
| 21 | TOTAL                                   | $     | 6,398  |      |       | $  | 7,152  |

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 ongoing programs have generally ranged from $250 to $500 annually.
In December 2023, the Company announced a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. In connection with this announcement, the Company expects to record incremental restructuring charges of $1.0 to $1.5 billion after tax, consisting primarily of foreign currency translation losses to be recognized as non-cash charges upon the substantial liquidation of operations in the affected markets.
The Company incurred total restructuring charges of $659 and $329 for the fiscal years ended June 30, 2024 and 2023. Of the charges incurred for fiscal year 2024, $248 were recorded in Costs of products sold, $155 in SG&A and $255 in Other non-operating income, net. Of the charges incurred in fiscal year 2023, $160 were recorded in Costs of products sold, $160 in SG&A and $9 in Other non-operating income, net.
Amounts in millions of dollars except per share amounts or as otherwise specified.

, PROCTER & GAMBLE Co 10-K form for the fiscal year ended 2024-06-30, page 46:
46 The Procter & Gamble Company

The following table presents restructuring activity for the fiscal years ended June 30, 2024 and 2023:
|    |                       |                  |                     |             |       |       |       |    |    |     |
|---:|:----------------------|:-----------------|:--------------------|:------------|:------|:------|:------|:---|:---|:----|
|  1 |                       | Separation Costs | Asset-Related Costs | Other Costs | Total |       |       |    |    |     |
|  2 | RESERVE JUNE 30, 2022 | $                | 121                 |             | $     | -     | $     | 26 | $  | 147 |
|  3 | Cost incurred         | 175              |                     | 43          |       | 111   | 329   |    |    |     |
|  4 | Cost paid/settled     | (141)            |                     | (43)        |       | (118) | (302) |    |    |     |
|  5 | RESERVE JUNE 30, 2023 | 155              |                     | -           |       | 19    | 174   |    |    |     |
|  6 | Cost incurred         | 202              |                     | 101         |       | 355   | 659   |    |    |     |
|  7 | Cost paid/settled     | (224)            |                     | (101)       |       | (342) | (667) |    |    |     |
|  8 | RESERVE JUNE 30, 2024 | $                | 133                 |             | $     | -     | $     | 32 | $  | 166 |

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

|    |                              |      |      |      |    |     |    |     |
|---:|:-----------------------------|:-----|:-----|:-----|:---|:----|:---|:----|
|  1 | Fiscal years ended June 30   | 2024 | 2023 | 2022 |    |     |    |     |
|  2 | Beauty                       | $    | 43   |      | $  | 15  | $  | 11  |
|  3 | Grooming                     | 76   |      | 17   |    | 14  |    |     |
|  4 | Health Care                  | 33   |      | 28   |    | 32  |    |     |
|  5 | Fabric & Home Care           | 84   |      | 87   |    | 42  |    |     |
|  6 | Baby, Feminine & Family Care | 50   |      | 21   |    | 83  |    |     |
|  7 | Corporate (1)                | 371  |      | 161  |    | 71  |    |     |
|  8 | TOTAL                        | $    | 659  |      | $  | 329 | $  | 253 |

(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.

18 The Procter & Gamble Company

RECENT DEVELOPMENTS

Limited Market Portfolio Restructuring

In December 2023, the Company announced a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. In connection with this announcement, the Company announced that it expected to record incremental restructuring charges of $1.0 to $1.5 billion after tax, consisting primarily of foreign currency translation losses to be recognized as non-cash charges upon the substantial liquidation of operations in the affected markets.
As of June 30, 2024, the Company has substantially liquidated its operations in certain Enterprise Markets, including Nigeria, and recorded a non-cash charge of $216 million after tax for accumulated currency translation losses previously included in Accumulated other comprehensive income/(loss). On July 1, 2024, the Company completed the divestiture of its business in Argentina. The Company expects to record a non-cash charge of approximately $750 million for accumulated currency translation losses in the first quarter of the fiscal year ending June 30, 2025. Consistent with our historical policies for ongoing restructuring-type activities, resulting charges were funded by and included within Corporate for segment reporting. Restructuring charges above the normal ongoing level of restructuring costs were reported as non-core charges. For more details on the restructuring program, refer to Note 3 to the Consolidated Financial Statements.

Intangible Asset Impairment

During the fiscal year ended June 30, 2024, the Company recorded a $1.3 billion before tax ($1.0 billion after tax) non-cash impairment charge on an indefinite-lived intangible asset acquired as part of the Company's 2005 acquisition of The Gillette Company. The impairment charge arose from a reduction in the estimated fair value of the Gillette indefinite-lived intangible asset due to a higher discount rate, weakening of several currencies relative to the U.S. dollar and the impact of the non-core restructuring program described above. This impairment charge adjusted the carrying value of the Gillette indefinite-lived intangible asset to fair value. For a more detailed discussion of the Gillette impairment, refer to Note 4 to the Consolidated Financial Statements.

SUMMARY OF 2024 RESULTS
|    |                                               |        |        |      |        |                       |        |    |    |    |    |
|---:|:----------------------------------------------|:-------|:-------|:-----|:-------|:----------------------|:-------|:---|:---|:---|:---|
|  1 | Amounts in millions, except per share amounts | 2024   |        | 2023 |        | Change vs. Prior Year |        |    |    |    |    |
|  2 | Net sales                                     | $      | 84,039 |      |        | $                     | 82,006 |    |    | 2  | %  |
|  3 | Operating income                              | 18,545 |        |      | 18,134 |                       |        | 2  | %  |    |    |
|  4 | Net earnings                                  | 14,974 |        |      | 14,738 |                       |        | 2  | %  |    |    |
|  5 | Net earnings attributable to Procter & Gamble | 14,879 |        |      | 14,653 |                       |        | 2  | %  |    |    |
|  6 | Diluted net earnings per common share         | 6.02   |        |      | 5.90   |                       |        | 2  | %  |    |    |
|  7 | Core earnings per share                       | 6.59   |        |      | 5.90   |                       |        | 12 | %  |    |    |
|  8 | Cash flow from operating activities           | 19,846 |        |      | 16,848 |                       |        | 18 | %  |    |    |

•Net sales increased 2% to $84.0 billion versus the prior year. The net sales growth was driven by mid-single-digit increases in Health Care, Fabric & Home Care and Grooming and a low single-digit increase in Beauty. Net Sales were unchanged in Baby, Feminine & Family Care. Organic sales, which exclude the impact of acquisitions and divestitures and foreign exchange, increased 4%. Organic sales increased high single digits in Grooming, mid-single digits in Fabric & Home Care and Health Care and low single digits in Beauty and Baby, Feminine & Family Care.
•Operating income increased $411 million, or 2%, to $18.5 billion due to the increase in net sales, partially offset by the non-cash impairment charge of $1.3 billion related to the Gillette intangible asset.
•Net earnings increased $236 million, or 2%, to $15.0 billion due to the increase in operating income, partially offset by a higher effective tax rate. Foreign exchange impacts reduced net earnings by approximately $589 million.

•Net earnings attributable to Procter & Gamble increased $226 million, or 2%, to $14.9 billion.

•Diluted EPS increased 2% to $6.02 due to the increase in net earnings. Core EPS, which excludes the charge for the Gillette intangible asset impairment and incremental restructuring charges, increased 12% to $6.59.
•Cash flow from operating activities was $19.8 billion.
◦    Adjusted free cash flow, which is operating cash flow less capital expenditures and certain other impacts, was $16.9 billion.
◦    Adjusted free cash flow productivity, which is the ratio of adjusted free cash flow to net earnings excluding the Gillette intangible asset impairment charge and a non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria, was 105%.

,
24 The Procter & Gamble Company

Europe (due to increased pricing), Latin America (due to increased competitive activity) and IMEA (due to increased pricing), partially offset by growth in North America (due to increased marketing support and distribution gains). Organic sales increased mid-single digits driven by mid-single-digit increases in Europe and IMEA and a low single-digit increase in North America. Market share of the feminine care category increased 0.2 points.
•Net sales in Family Care, which is predominantly a North American business, increased low single digits driven by a unit volume increase (due to market growth and increased marketing support) and higher pricing, partially offset by unfavorable product mix (due to growth of larger pack sizes with lower than category-average selling prices). Organic sales also increased low single digits. North America's share of the family care category decreased 0.4 points.
Net earnings increased 13% to $4.0 billion due to a 230 basis-point increase in net earnings margin. Net earnings margin increased primarily due to an increase in gross margin, partially offset by an increase in SG&A as a percentage of net sales. Gross margin increased primarily due to lower commodity costs, productivity savings and increased pricing, partially offset by unfavorable foreign exchange. SG&A as a percentage of net sales increased due to an increase in marketing and overhead spending.

CORPORATE

|    |                     |          |        |                 |
|---:|:--------------------|:---------|:-------|:----------------|
|  1 | ($ millions)        | 2024     | 2023   | Change vs. 2023 |
|  2 | Net sales           | $601     | $765   | (21)%           |
|  3 | Net earnings/(loss) | $(1,430) | $(399) | N/A             |

Corporate includes certain operating and non-operating activities not allocated to specific business segments. These include but are not limited to incidental businesses managed at the corporate level, gains and losses related to certain divested brands or businesses, impacts from various financing and investing activities, impacts related to employee benefits, asset impairments and restructuring activities including manufacturing and workforce optimization. Corporate also includes reconciling items to adjust the accounting policies used within the reportable segments to U.S. GAAP. The most notable ongoing reconciling item is income taxes, which adjusts the blended statutory rates that are reflected in the reportable segments to the overall Company effective tax rate.
Corporate net sales decreased $164 million to $601 million due to a decrease in net sales of incidental businesses managed at the corporate level. Corporate net earnings decreased $1.0 billion due to a loss of $1.4 billion due primarily to the impairment charge of the Gillette intangible asset and incremental restructuring charges.

Restructuring Program to Deliver Productivity and Cost Savings

The Company has historically had an ongoing restructuring program with annual spending in the range of $250 to $500 million before tax. On December 5, 2023, the Company announced an incremental limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria.
In fiscal 2024, the Company incurred before tax restructuring costs of $659 million, which include foreign currency translation losses recognized as a non-cash charge of approximately $216 million due to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria. Restructuring accruals of $166 million as of June 30, 2024, are classified as current liabilities. Excluding the non-cash charges of foreign currency translation losses for certain Enterprise Markets, including Nigeria, approximately 64% of the restructuring charges incurred in fiscal 2024 either have been or will be settled with cash. Consistent with our policies for restructuring-type activities, the resulting charges are funded by and included within Corporate for segment reporting.
Savings generated from the Company's restructuring program are difficult to estimate, given the nature of the activities, the timing of the execution and the degree of reinvestment. In addition to our restructuring programs, we have additional ongoing savings efforts in our supply chain, marketing and overhead areas that yield additional benefits to our operating margins. Refer to Note 3 to the Consolidated Financial Statements for more details on the restructuring program.

CASH FLOW, FINANCIAL CONDITION AND LIQUIDITY

We believe our financial condition continues to be of high quality, as evidenced by our ability to generate substantial cash from operations and to readily access capital markets at competitive rates.
Operating cash flow provides the primary source of cash to fund operating needs and capital expenditures. Excess operating cash is used first to fund shareholder dividends. Other discretionary uses include share repurchases and acquisitions to complement our portfolio of businesses, brands and geographies. As necessary, we may supplement operating cash flow with debt to fund these activities. The overall cash position of the Company reflects our strong business results and a global cash management strategy that takes into account liquidity management, economic factors and tax considerations.

,
The Procter & Gamble Company 45

NOTE 3

SUPPLEMENTAL FINANCIAL INFORMATION

The components of property, plant and equipment were as follows:
|    |                                     |          |        |      |          |    |        |
|---:|:------------------------------------|:---------|:-------|:-----|:---------|:---|:-------|
|  1 | As of June 30                       | 2024     |        | 2023 |          |    |        |
|  2 | PROPERTY, PLANT AND EQUIPMENT       |          |        |      |          |    |        |
|  3 | Machinery and equipment             | $        | 37,507 |      |          | $  | 36,521 |
|  4 | Buildings                           | 8,534    |        |      | 8,277    |    |        |
|  5 | Construction in progress            | 3,126    |        |      | 2,980    |    |        |
|  6 | Land                                | 895      |        |      | 867      |    |        |
|  7 | TOTAL PROPERTY, PLANT AND EQUIPMENT | 50,063   |        |      | 48,645   |    |        |
|  8 | Accumulated depreciation            | (27,911) |        |      | (26,736) |    |        |
|  9 | PROPERTY, PLANT AND EQUIPMENT, NET  | $        | 22,152 |      |          | $  | 21,909 |
Selected components of current and noncurrent liabilities were as follows:|    |                                         |       |        |      |       |    |        |
|---:|:----------------------------------------|:------|:-------|:-----|:------|:---|:-------|
|  1 | As of June 30                           | 2024  |        | 2023 |       |    |        |
|  2 | ACCRUED AND OTHER LIABILITIES - CURRENT |       |        |      |       |    |        |
|  3 | Accrued marketing and promotion         | $     | 4,172  |      |       | $  | 3,894  |
|  4 | Accrued compensation                    | 2,161 |        |      | 2,030 |    |        |
|  5 | Taxes payable                           | 1,042 |        |      | 828   |    |        |
|  6 | Accrued interest                        | 282   |        |      | 235   |    |        |
|  7 | Lease liabilities                       | 243   |        |      | 222   |    |        |
|  8 | Restructuring reserves                  | 166   |        |      | 174   |    |        |
|  9 | Derivative liabilities                  | 54    |        |      | 631   |    |        |
| 10 | Other                                   | 2,953 |        |      | 2,915 |    |        |
| 11 | TOTAL                                   | $     | 11,073 |      |       | $  | 10,929 |
| 13 | OTHER NONCURRENT LIABILITIES            |       |        |      |       |    |        |
| 14 | Pension benefit obligations             | $     | 2,884  |      |       | $  | 3,116  |
| 15 | Uncertain tax positions                 | 723   |        |      | 622   |    |        |
| 16 | Lease liabilities                       | 666   |        |      | 595   |    |        |
| 17 | Other retiree benefit obligations       | 653   |        |      | 690   |    |        |
| 18 | U.S. Tax Act transitional tax payable   | 592   |        |      | 1,154 |    |        |
| 19 | Derivative liabilities                  | 325   |        |      | 445   |    |        |
| 20 | Other                                   | 555   |        |      | 530   |    |        |
| 21 | TOTAL                                   | $     | 6,398  |      |       | $  | 7,152  |

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 ongoing programs have generally ranged from $250 to $500 annually.
In December 2023, the Company announced a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. In connection with this announcement, the Company expects to record incremental restructuring charges of $1.0 to $1.5 billion after tax, consisting primarily of foreign currency translation losses to be recognized as non-cash charges upon the substantial liquidation of operations in the affected markets.
The Company incurred total restructuring charges of $659 and $329 for the fiscal years ended June 30, 2024 and 2023. Of the charges incurred for fiscal year 2024, $248 were recorded in Costs of products sold, $155 in SG&A and $255 in Other non-operating income, net. Of the charges incurred in fiscal year 2023, $160 were recorded in Costs of products sold, $160 in SG&A and $9 in Other non-operating income, net.
Amounts in millions of dollars except per share amounts or as otherwise specified.

,
46 The Procter & Gamble Company

The following table presents restructuring activity for the fiscal years ended June 30, 2024 and 2023:
|    |                       |                  |                     |             |       |       |       |    |    |     |
|---:|:----------------------|:-----------------|:--------------------|:------------|:------|:------|:------|:---|:---|:----|
|  1 |                       | Separation Costs | Asset-Related Costs | Other Costs | Total |       |       |    |    |     |
|  2 | RESERVE JUNE 30, 2022 | $                | 121                 |             | $     | -     | $     | 26 | $  | 147 |
|  3 | Cost incurred         | 175              |                     | 43          |       | 111   | 329   |    |    |     |
|  4 | Cost paid/settled     | (141)            |                     | (43)        |       | (118) | (302) |    |    |     |
|  5 | RESERVE JUNE 30, 2023 | 155              |                     | -           |       | 19    | 174   |    |    |     |
|  6 | Cost incurred         | 202              |                     | 101         |       | 355   | 659   |    |    |     |
|  7 | Cost paid/settled     | (224)            |                     | (101)       |       | (342) | (667) |    |    |     |
|  8 | RESERVE JUNE 30, 2024 | $                | 133                 |             | $     | -     | $     | 32 | $  | 166 |

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

|    |                              |      |      |      |    |     |    |     |
|---:|:-----------------------------|:-----|:-----|:-----|:---|:----|:---|:----|
|  1 | Fiscal years ended June 30   | 2024 | 2023 | 2022 |    |     |    |     |
|  2 | Beauty                       | $    | 43   |      | $  | 15  | $  | 11  |
|  3 | Grooming                     | 76   |      | 17   |    | 14  |    |     |
|  4 | Health Care                  | 33   |      | 28   |    | 32  |    |     |
|  5 | Fabric & Home Care           | 84   |      | 87   |    | 42  |    |     |
|  6 | Baby, Feminine & Family Care | 50   |      | 21   |    | 83  |    |     |
|  7 | Corporate (1)                | 371  |      | 161  |    | 71  |    |     |
|  8 | TOTAL                        | $    | 659  |      | $  | 329 | $  | 253 |

(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.

PROCTER & GAMBLE Co 10-K form for the fiscal year ended 2024-06-30, page 18:
18 The Procter & Gamble Company

RECENT DEVELOPMENTS

Limited Market Portfolio Restructuring

In December 2023, the Company announced a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. In connection with this announcement, the Company announced that it expected to record incremental restructuring charges of $1.0 to $1.5 billion after tax, consisting primarily of foreign currency translation losses to be recognized as non-cash charges upon the substantial liquidation of operations in the affected markets.
As of June 30, 2024, the Company has substantially liquidated its operations in certain Enterprise Markets, including Nigeria, and recorded a non-cash charge of $216 million after tax for accumulated currency translation losses previously included in Accumulated other comprehensive income/(loss). On July 1, 2024, the Company completed the divestiture of its business in Argentina. The Company expects to record a non-cash charge of approximately $750 million for accumulated currency translation losses in the first quarter of the fiscal year ending June 30, 2025. Consistent with our historical policies for ongoing restructuring-type activities, resulting charges were funded by and included within Corporate for segment reporting. Restructuring charges above the normal ongoing level of restructuring costs were reported as non-core charges. For more details on the restructuring program, refer to Note 3 to the Consolidated Financial Statements.

Intangible Asset Impairment

During the fiscal year ended June 30, 2024, the Company recorded a $1.3 billion before tax ($1.0 billion after tax) non-cash impairment charge on an indefinite-lived intangible asset acquired as part of the Company's 2005 acquisition of The Gillette Company. The impairment charge arose from a reduction in the estimated fair value of the Gillette indefinite-lived intangible asset due to a higher discount rate, weakening of several currencies relative to the U.S. dollar and the impact of the non-core restructuring program described above. This impairment charge adjusted the carrying value of the Gillette indefinite-lived intangible asset to fair value. For a more detailed discussion of the Gillette impairment, refer to Note 4 to the Consolidated Financial Statements.

SUMMARY OF 2024 RESULTS

Amounts in millions, except per share amounts	2024		2023		Change vs. Prior Year

Net sales	$	84,039 			$	82,006 			2 	%

Operating income	18,545 			18,134 			2 	%

Net earnings	14,974 			14,738 			2 	%

Net earnings attributable to Procter & Gamble	14,879 			14,653 			2 	%

Diluted net earnings per common share	6.02 			5.90 			2 	%

Core earnings per share	6.59 			5.90 			12 	%

Cash flow from operating activities	19,846 			16,848 			18 	%

•Net sales increased 2% to $84.0 billion versus the prior year. The net sales growth was driven by mid-single-digit increases in Health Care, Fabric & Home Care and Grooming and a low single-digit increase in Beauty. Net Sales were unchanged in Baby, Feminine & Family Care. Organic sales, which exclude the impact of acquisitions and divestitures and foreign exchange, increased 4%. Organic sales increased high single digits in Grooming, mid-single digits in Fabric & Home Care and Health Care and low single digits in Beauty and Baby, Feminine & Family Care.
•Operating income increased $411 million, or 2%, to $18.5 billion due to the increase in net sales, partially offset by the non-cash impairment charge of $1.3 billion related to the Gillette intangible asset.
•Net earnings increased $236 million, or 2%, to $15.0 billion due to the increase in operating income, partially offset by a higher effective tax rate. Foreign exchange impacts reduced net earnings by approximately $589 million.

•Net earnings attributable to Procter & Gamble increased $226 million, or 2%, to $14.9 billion.

•Diluted EPS increased 2% to $6.02 due to the increase in net earnings. Core EPS, which excludes the charge for the Gillette intangible asset impairment and incremental restructuring charges, increased 12% to $6.59.
•Cash flow from operating activities was $19.8 billion.
◦    Adjusted free cash flow, which is operating cash flow less capital expenditures and certain other impacts, was $16.9 billion.
◦    Adjusted free cash flow productivity, which is the ratio of adjusted free cash flow to net earnings excluding the Gillette intangible asset impairment charge and a non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria, was 105%.

, PROCTER & GAMBLE Co 10-K form for the fiscal year ended 2024-06-30, page 24:
24 The Procter & Gamble Company

Europe (due to increased pricing), Latin America (due to increased competitive activity) and IMEA (due to increased pricing), partially offset by growth in North America (due to increased marketing support and distribution gains). Organic sales increased mid-single digits driven by mid-single-digit increases in Europe and IMEA and a low single-digit increase in North America. Market share of the feminine care category increased 0.2 points.
•Net sales in Family Care, which is predominantly a North American business, increased low single digits driven by a unit volume increase (due to market growth and increased marketing support) and higher pricing, partially offset by unfavorable product mix (due to growth of larger pack sizes with lower than category-average selling prices). Organic sales also increased low single digits. North America's share of the family care category decreased 0.4 points.
Net earnings increased 13% to $4.0 billion due to a 230 basis-point increase in net earnings margin. Net earnings margin increased primarily due to an increase in gross margin, partially offset by an increase in SG&A as a percentage of net sales. Gross margin increased primarily due to lower commodity costs, productivity savings and increased pricing, partially offset by unfavorable foreign exchange. SG&A as a percentage of net sales increased due to an increase in marketing and overhead spending.

CORPORATE

($ millions)	2024		2023		Change vs. 2023

Net sales	$601		$765		(21)%

Net earnings/(loss)	$(1,430)		$(399)		N/A

Corporate includes certain operating and non-operating activities not allocated to specific business segments. These include but are not limited to incidental businesses managed at the corporate level, gains and losses related to certain divested brands or businesses, impacts from various financing and investing activities, impacts related to employee benefits, asset impairments and restructuring activities including manufacturing and workforce optimization. Corporate also includes reconciling items to adjust the accounting policies used within the reportable segments to U.S. GAAP. The most notable ongoing reconciling item is income taxes, which adjusts the blended statutory rates that are reflected in the reportable segments to the overall Company effective tax rate.
Corporate net sales decreased $164 million to $601 million due to a decrease in net sales of incidental businesses managed at the corporate level. Corporate net earnings decreased $1.0 billion due to a loss of $1.4 billion due primarily to the impairment charge of the Gillette intangible asset and incremental restructuring charges.

Restructuring Program to Deliver Productivity and Cost Savings

The Company has historically had an ongoing restructuring program with annual spending in the range of $250 to $500 million before tax. On December 5, 2023, the Company announced an incremental limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria.
In fiscal 2024, the Company incurred before tax restructuring costs of $659 million, which include foreign currency translation losses recognized as a non-cash charge of approximately $216 million due to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria. Restructuring accruals of $166 million as of June 30, 2024, are classified as current liabilities. Excluding the non-cash charges of foreign currency translation losses for certain Enterprise Markets, including Nigeria, approximately 64% of the restructuring charges incurred in fiscal 2024 either have been or will be settled with cash. Consistent with our policies for restructuring-type activities, the resulting charges are funded by and included within Corporate for segment reporting.
Savings generated from the Company's restructuring program are difficult to estimate, given the nature of the activities, the timing of the execution and the degree of reinvestment. In addition to our restructuring programs, we have additional ongoing savings efforts in our supply chain, marketing and overhead areas that yield additional benefits to our operating margins. Refer to Note 3 to the Consolidated Financial Statements for more details on the restructuring program.

CASH FLOW, FINANCIAL CONDITION AND LIQUIDITY

We believe our financial condition continues to be of high quality, as evidenced by our ability to generate substantial cash from operations and to readily access capital markets at competitive rates.
Operating cash flow provides the primary source of cash to fund operating needs and capital expenditures. Excess operating cash is used first to fund shareholder dividends. Other discretionary uses include share repurchases and acquisitions to complement our portfolio of businesses, brands and geographies. As necessary, we may supplement operating cash flow with debt to fund these activities. The overall cash position of the Company reflects our strong business results and a global cash management strategy that takes into account liquidity management, economic factors and tax considerations.

, PROCTER & GAMBLE Co 10-K form for the fiscal year ended 2024-06-30, page 45:
The Procter & Gamble Company 45

NOTE 3

SUPPLEMENTAL FINANCIAL INFORMATION

The components of property, plant and equipment were as follows:

As of June 30	2024		2023

PROPERTY, PLANT AND EQUIPMENT

Machinery and equipment	$	37,507 			$	36,521

Buildings	8,534 			8,277

Construction in progress	3,126 			2,980

Land	895 			867

TOTAL PROPERTY, PLANT AND EQUIPMENT	50,063 			48,645

Accumulated depreciation	(27,911)			(26,736)

PROPERTY, PLANT AND EQUIPMENT, NET	$	22,152 			$	21,909

Selected components of current and noncurrent liabilities were as follows:

As of June 30	2024		2023

ACCRUED AND OTHER LIABILITIES - CURRENT

Accrued marketing and promotion	$	4,172 			$	3,894

Accrued compensation	2,161 			2,030

Taxes payable	1,042 			828

Accrued interest	282 			235

Lease liabilities	243 			222

Restructuring reserves	166 			174

Derivative liabilities	54 			631

Other	2,953 			2,915

TOTAL	$	11,073 			$	10,929

OTHER NONCURRENT LIABILITIES

Pension benefit obligations	$	2,884 			$	3,116

Uncertain tax positions	723 			622

Lease liabilities	666 			595

Other retiree benefit obligations	653 			690

U.S. Tax Act transitional tax payable	592 			1,154

Derivative liabilities	325 			445

Other	555 			530

TOTAL	$	6,398 			$	7,152

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 ongoing programs have generally ranged from $250 to $500 annually.
In December 2023, the Company announced a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. In connection with this announcement, the Company expects to record incremental restructuring charges of $1.0 to $1.5 billion after tax, consisting primarily of foreign currency translation losses to be recognized as non-cash charges upon the substantial liquidation of operations in the affected markets.
The Company incurred total restructuring charges of $659 and $329 for the fiscal years ended June 30, 2024 and 2023. Of the charges incurred for fiscal year 2024, $248 were recorded in Costs of products sold, $155 in SG&A and $255 in Other non-operating income, net. Of the charges incurred in fiscal year 2023, $160 were recorded in Costs of products sold, $160 in SG&A and $9 in Other non-operating income, net.
Amounts in millions of dollars except per share amounts or as otherwise specified.

, PROCTER & GAMBLE Co 10-K form for the fiscal year ended 2024-06-30, page 46:
46 The Procter & Gamble Company

The following table presents restructuring activity for the fiscal years ended June 30, 2024 and 2023:

	Separation Costs	Asset-Related Costs	Other Costs	Total

RESERVE JUNE 30, 2022	$	121 		$	- 		$	26 		$	147

Cost incurred	175 		43 		111 		329

Cost paid/settled	(141)		(43)		(118)		(302)

RESERVE JUNE 30, 2023	155 		- 		19 		174

Cost incurred	202 		101 		355 		659

Cost paid/settled	(224)		(101)		(342)		(667)

RESERVE JUNE 30, 2024	$	133 		$	- 		$	32 		$	166

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

Fiscal years ended June 30	2024	2023	2022

Beauty	$	43 		$	15 		$	11

Grooming	76 		17 		14

Health Care	33 		28 		32

Fabric & Home Care	84 		87 		42

Baby, Feminine & Family Care	50 		21 		83

Corporate (1)	371 		161 		71

TOTAL	$	659 		$	329 		$	253

(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.

18 The Procter & Gamble Company

RECENT DEVELOPMENTS

Limited Market Portfolio Restructuring

In December 2023, the Company announced a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. In connection with this announcement, the Company announced that it expected to record incremental restructuring charges of $1.0 to $1.5 billion after tax, consisting primarily of foreign currency translation losses to be recognized as non-cash charges upon the substantial liquidation of operations in the affected markets.
As of June 30, 2024, the Company has substantially liquidated its operations in certain Enterprise Markets, including Nigeria, and recorded a non-cash charge of $216 million after tax for accumulated currency translation losses previously included in Accumulated other comprehensive income/(loss). On July 1, 2024, the Company completed the divestiture of its business in Argentina. The Company expects to record a non-cash charge of approximately $750 million for accumulated currency translation losses in the first quarter of the fiscal year ending June 30, 2025. Consistent with our historical policies for ongoing restructuring-type activities, resulting charges were funded by and included within Corporate for segment reporting. Restructuring charges above the normal ongoing level of restructuring costs were reported as non-core charges. For more details on the restructuring program, refer to Note 3 to the Consolidated Financial Statements.

Intangible Asset Impairment

During the fiscal year ended June 30, 2024, the Company recorded a $1.3 billion before tax ($1.0 billion after tax) non-cash impairment charge on an indefinite-lived intangible asset acquired as part of the Company's 2005 acquisition of The Gillette Company. The impairment charge arose from a reduction in the estimated fair value of the Gillette indefinite-lived intangible asset due to a higher discount rate, weakening of several currencies relative to the U.S. dollar and the impact of the non-core restructuring program described above. This impairment charge adjusted the carrying value of the Gillette indefinite-lived intangible asset to fair value. For a more detailed discussion of the Gillette impairment, refer to Note 4 to the Consolidated Financial Statements.

SUMMARY OF 2024 RESULTS

Amounts in millions, except per share amounts	2024		2023		Change vs. Prior Year

Net sales	$	84,039 			$	82,006 			2 	%

Operating income	18,545 			18,134 			2 	%

Net earnings	14,974 			14,738 			2 	%

Net earnings attributable to Procter & Gamble	14,879 			14,653 			2 	%

Diluted net earnings per common share	6.02 			5.90 			2 	%

Core earnings per share	6.59 			5.90 			12 	%

Cash flow from operating activities	19,846 			16,848 			18 	%

•Net sales increased 2% to $84.0 billion versus the prior year. The net sales growth was driven by mid-single-digit increases in Health Care, Fabric & Home Care and Grooming and a low single-digit increase in Beauty. Net Sales were unchanged in Baby, Feminine & Family Care. Organic sales, which exclude the impact of acquisitions and divestitures and foreign exchange, increased 4%. Organic sales increased high single digits in Grooming, mid-single digits in Fabric & Home Care and Health Care and low single digits in Beauty and Baby, Feminine & Family Care.
•Operating income increased $411 million, or 2%, to $18.5 billion due to the increase in net sales, partially offset by the non-cash impairment charge of $1.3 billion related to the Gillette intangible asset.
•Net earnings increased $236 million, or 2%, to $15.0 billion due to the increase in operating income, partially offset by a higher effective tax rate. Foreign exchange impacts reduced net earnings by approximately $589 million.

•Net earnings attributable to Procter & Gamble increased $226 million, or 2%, to $14.9 billion.

•Diluted EPS increased 2% to $6.02 due to the increase in net earnings. Core EPS, which excludes the charge for the Gillette intangible asset impairment and incremental restructuring charges, increased 12% to $6.59.
•Cash flow from operating activities was $19.8 billion.
◦    Adjusted free cash flow, which is operating cash flow less capital expenditures and certain other impacts, was $16.9 billion.
◦    Adjusted free cash flow productivity, which is the ratio of adjusted free cash flow to net earnings excluding the Gillette intangible asset impairment charge and a non-cash charge for accumulated foreign currency translation losses due to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria, was 105%.

,
24 The Procter & Gamble Company

Europe (due to increased pricing), Latin America (due to increased competitive activity) and IMEA (due to increased pricing), partially offset by growth in North America (due to increased marketing support and distribution gains). Organic sales increased mid-single digits driven by mid-single-digit increases in Europe and IMEA and a low single-digit increase in North America. Market share of the feminine care category increased 0.2 points.
•Net sales in Family Care, which is predominantly a North American business, increased low single digits driven by a unit volume increase (due to market growth and increased marketing support) and higher pricing, partially offset by unfavorable product mix (due to growth of larger pack sizes with lower than category-average selling prices). Organic sales also increased low single digits. North America's share of the family care category decreased 0.4 points.
Net earnings increased 13% to $4.0 billion due to a 230 basis-point increase in net earnings margin. Net earnings margin increased primarily due to an increase in gross margin, partially offset by an increase in SG&A as a percentage of net sales. Gross margin increased primarily due to lower commodity costs, productivity savings and increased pricing, partially offset by unfavorable foreign exchange. SG&A as a percentage of net sales increased due to an increase in marketing and overhead spending.

CORPORATE

($ millions)	2024		2023		Change vs. 2023

Net sales	$601		$765		(21)%

Net earnings/(loss)	$(1,430)		$(399)		N/A

Corporate includes certain operating and non-operating activities not allocated to specific business segments. These include but are not limited to incidental businesses managed at the corporate level, gains and losses related to certain divested brands or businesses, impacts from various financing and investing activities, impacts related to employee benefits, asset impairments and restructuring activities including manufacturing and workforce optimization. Corporate also includes reconciling items to adjust the accounting policies used within the reportable segments to U.S. GAAP. The most notable ongoing reconciling item is income taxes, which adjusts the blended statutory rates that are reflected in the reportable segments to the overall Company effective tax rate.
Corporate net sales decreased $164 million to $601 million due to a decrease in net sales of incidental businesses managed at the corporate level. Corporate net earnings decreased $1.0 billion due to a loss of $1.4 billion due primarily to the impairment charge of the Gillette intangible asset and incremental restructuring charges.

Restructuring Program to Deliver Productivity and Cost Savings

The Company has historically had an ongoing restructuring program with annual spending in the range of $250 to $500 million before tax. On December 5, 2023, the Company announced an incremental limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria.
In fiscal 2024, the Company incurred before tax restructuring costs of $659 million, which include foreign currency translation losses recognized as a non-cash charge of approximately $216 million due to the substantial liquidation of operations in certain Enterprise Markets, including Nigeria. Restructuring accruals of $166 million as of June 30, 2024, are classified as current liabilities. Excluding the non-cash charges of foreign currency translation losses for certain Enterprise Markets, including Nigeria, approximately 64% of the restructuring charges incurred in fiscal 2024 either have been or will be settled with cash. Consistent with our policies for restructuring-type activities, the resulting charges are funded by and included within Corporate for segment reporting.
Savings generated from the Company's restructuring program are difficult to estimate, given the nature of the activities, the timing of the execution and the degree of reinvestment. In addition to our restructuring programs, we have additional ongoing savings efforts in our supply chain, marketing and overhead areas that yield additional benefits to our operating margins. Refer to Note 3 to the Consolidated Financial Statements for more details on the restructuring program.

CASH FLOW, FINANCIAL CONDITION AND LIQUIDITY

We believe our financial condition continues to be of high quality, as evidenced by our ability to generate substantial cash from operations and to readily access capital markets at competitive rates.
Operating cash flow provides the primary source of cash to fund operating needs and capital expenditures. Excess operating cash is used first to fund shareholder dividends. Other discretionary uses include share repurchases and acquisitions to complement our portfolio of businesses, brands and geographies. As necessary, we may supplement operating cash flow with debt to fund these activities. The overall cash position of the Company reflects our strong business results and a global cash management strategy that takes into account liquidity management, economic factors and tax considerations.

,
The Procter & Gamble Company 45

NOTE 3

SUPPLEMENTAL FINANCIAL INFORMATION

The components of property, plant and equipment were as follows:

As of June 30	2024		2023

PROPERTY, PLANT AND EQUIPMENT

Machinery and equipment	$	37,507 			$	36,521

Buildings	8,534 			8,277

Construction in progress	3,126 			2,980

Land	895 			867

TOTAL PROPERTY, PLANT AND EQUIPMENT	50,063 			48,645

Accumulated depreciation	(27,911)			(26,736)

PROPERTY, PLANT AND EQUIPMENT, NET	$	22,152 			$	21,909

Selected components of current and noncurrent liabilities were as follows:

As of June 30	2024		2023

ACCRUED AND OTHER LIABILITIES - CURRENT

Accrued marketing and promotion	$	4,172 			$	3,894

Accrued compensation	2,161 			2,030

Taxes payable	1,042 			828

Accrued interest	282 			235

Lease liabilities	243 			222

Restructuring reserves	166 			174

Derivative liabilities	54 			631

Other	2,953 			2,915

TOTAL	$	11,073 			$	10,929

OTHER NONCURRENT LIABILITIES

Pension benefit obligations	$	2,884 			$	3,116

Uncertain tax positions	723 			622

Lease liabilities	666 			595

Other retiree benefit obligations	653 			690

U.S. Tax Act transitional tax payable	592 			1,154

Derivative liabilities	325 			445

Other	555 			530

TOTAL	$	6,398 			$	7,152

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 ongoing programs have generally ranged from $250 to $500 annually.
In December 2023, the Company announced a limited market portfolio restructuring of its business operations, primarily in certain Enterprise Markets, including Argentina and Nigeria, to address challenging macroeconomic and fiscal conditions. In connection with this announcement, the Company expects to record incremental restructuring charges of $1.0 to $1.5 billion after tax, consisting primarily of foreign currency translation losses to be recognized as non-cash charges upon the substantial liquidation of operations in the affected markets.
The Company incurred total restructuring charges of $659 and $329 for the fiscal years ended June 30, 2024 and 2023. Of the charges incurred for fiscal year 2024, $248 were recorded in Costs of products sold, $155 in SG&A and $255 in Other non-operating income, net. Of the charges incurred in fiscal year 2023, $160 were recorded in Costs of products sold, $160 in SG&A and $9 in Other non-operating income, net.
Amounts in millions of dollars except per share amounts or as otherwise specified.

,
46 The Procter & Gamble Company

The following table presents restructuring activity for the fiscal years ended June 30, 2024 and 2023:

	Separation Costs	Asset-Related Costs	Other Costs	Total

RESERVE JUNE 30, 2022	$	121 		$	- 		$	26 		$	147

Cost incurred	175 		43 		111 		329

Cost paid/settled	(141)		(43)		(118)		(302)

RESERVE JUNE 30, 2023	155 		- 		19 		174

Cost incurred	202 		101 		355 		659

Cost paid/settled	(224)		(101)		(342)		(667)

RESERVE JUNE 30, 2024	$	133 		$	- 		$	32 		$	166

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

Fiscal years ended June 30	2024	2023	2022

Beauty	$	43 		$	15 		$	11

Grooming	76 		17 		14

Health Care	33 		28 		32

Fabric & Home Care	84 		87 		42

Baby, Feminine & Family Care	50 		21 		83

Corporate (1)	371 		161 		71

TOTAL	$	659 		$	329 		$	253

(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.


Question: What key risks related to geopolitical events are highlighted by Johnson & Johnson, and what are their summarized implications?

Johnson & Johnson highlights several key risks related to geopolitical events, including global tensions, conflicts, and economic sanctions. The implications of these geopolitical risks include foreign currency volatility, which can affect the Company’s financial results and operational costs. Decreased demand for products in affected regions due to geopolitical instability or conflict can lead to revenue losses. Additionally, the imposition of trade protection measures or sanctions may disrupt the Company’s global supply chain and impact its ability to operate effectively in certain markets.

JOHNSON & JOHNSON 10-K form for the fiscal year ended 2023-12-31, page 14: countries experiencing high inflation rates or significant currency exchange fluctuations could negatively impact the Company's operating results.
Illegal importation of pharmaceutical products: The illegal importation of pharmaceutical products from countries where government price controls or other market dynamics result in lower prices may adversely affect the Company's sales and profitability in the U.S. and other countries in which the Company operates. With the exception of limited quantities of prescription drugs for personal use, foreign imports of pharmaceutical products are illegal under current U.S. law. However, the volume of illegal imports continues to rise as the ability of patients and other customers to obtain the lower-priced imports has grown significantly.
Anti-bribery and other regulations: The Company is subject to various federal and foreign laws that govern its international business practices with respect to payments to government officials. Those laws include the U.S. Foreign Corrupt Practices Act (FCPA), which prohibits U.S. publicly traded companies from promising, offering, or giving anything of value to foreign officials with the corrupt intent of influencing the foreign official for the purpose of helping the Company obtain or retain business or gain any improper advantage. The Company's business is heavily regulated and therefore involves significant interaction with foreign officials. Also, in many countries outside the U.S., the healthcare providers who prescribe human pharmaceuticals are employed by the government and the purchasers of human pharmaceuticals are government entities; therefore, the Company's interactions with these prescribers and purchasers are subject to regulation under the FCPA. In addition to the U.S. application and enforcement of the FCPA, various jurisdictions in which the Company operates have laws and regulations, including the U.K. Bribery Act 2010, aimed at preventing and penalizing corrupt and anticompetitive behavior. Enforcement activities under these laws could subject the Company to additional administrative and legal proceedings and actions, which could include claims for civil penalties, criminal sanctions, and administrative remedies, including exclusion from healthcare programs.
Other financial, economic, legal, social and political risks. Other risks inherent in conducting business globally include:
•local and regional economic environments and policies in the markets that we serve, including interest rates, monetary policy, inflation, economic growth, recession, commodity prices, and currency controls or other limitations on the ability to expatriate cash;
•protective economic policies taken by governments, such as trade protection measures, increased antitrust reporting requirements and enforcement activity, and import/export licensing requirements;
•compliance with local regulations and laws including, in some countries, regulatory requirements restricting the Company's ability to manufacture or sell its products in the relevant market;
•diminished protection of intellectual property and contractual rights in certain jurisdictions;
•potential nationalization or expropriation of the Company's foreign assets;
•political or social upheavals, economic instability, repression, or human rights issues; and
•geopolitical events, including natural disasters, disruptions to markets due to war, armed conflict, terrorism, epidemics or pandemics.
Due to the international nature of the Company's business, geopolitical or economic changes or events, including global tensions and war, could adversely affect our business, results of operations or financial condition.
As described above, the Company has extensive operations and business activity throughout the world. Global tensions, conflict and/or war among any of the countries in which we conduct business or distribute our products may result in foreign currency volatility, decreased demand for our products in affected countries, and challenges to our global supply chain related to increased costs of materials and other inputs for our products and suppliers. Most recently, we have experienced, and expect to continue to experience, impacts to the Company's business resulting from the Russia-Ukraine war, rising conflict in the Middle East as well as increasing tensions between the U.S. and China. In response to heightened conflict, such as the Russia-Ukraine war, governments may impose export controls and broad financial and economic sanctions. Our business and operations may be further impacted by the imposition of trade protection measures or other policies adopted by any country that favor domestic companies and technologies over foreign competitors. Additional sanctions or other measures may be imposed by the global community, including but not limited to limitations on our ability to file, prosecute and maintain patents, trademarks and other intellectual property rights. Furthermore, in some countries, such as in Russia, action may be taken that allows companies and individuals to exploit inventions owned by patent holders from the United States and many other countries without consent or compensation and we may not be able to prevent third parties from practicing the Company's inventions in Russia or from selling or importing products in and into Russia.
|    |    |
|---:|---:|
|  1 | 14 |

JOHNSON & JOHNSON 10-K form for the fiscal year ended 2023-12-31, page 14: countries experiencing high inflation rates or significant currency exchange fluctuations could negatively impact the Company's operating results.
Illegal importation of pharmaceutical products: The illegal importation of pharmaceutical products from countries where government price controls or other market dynamics result in lower prices may adversely affect the Company's sales and profitability in the U.S. and other countries in which the Company operates. With the exception of limited quantities of prescription drugs for personal use, foreign imports of pharmaceutical products are illegal under current U.S. law. However, the volume of illegal imports continues to rise as the ability of patients and other customers to obtain the lower-priced imports has grown significantly.
Anti-bribery and other regulations: The Company is subject to various federal and foreign laws that govern its international business practices with respect to payments to government officials. Those laws include the U.S. Foreign Corrupt Practices Act (FCPA), which prohibits U.S. publicly traded companies from promising, offering, or giving anything of value to foreign officials with the corrupt intent of influencing the foreign official for the purpose of helping the Company obtain or retain business or gain any improper advantage. The Company's business is heavily regulated and therefore involves significant interaction with foreign officials. Also, in many countries outside the U.S., the healthcare providers who prescribe human pharmaceuticals are employed by the government and the purchasers of human pharmaceuticals are government entities; therefore, the Company's interactions with these prescribers and purchasers are subject to regulation under the FCPA. In addition to the U.S. application and enforcement of the FCPA, various jurisdictions in which the Company operates have laws and regulations, including the U.K. Bribery Act 2010, aimed at preventing and penalizing corrupt and anticompetitive behavior. Enforcement activities under these laws could subject the Company to additional administrative and legal proceedings and actions, which could include claims for civil penalties, criminal sanctions, and administrative remedies, including exclusion from healthcare programs.
Other financial, economic, legal, social and political risks. Other risks inherent in conducting business globally include:
•local and regional economic environments and policies in the markets that we serve, including interest rates, monetary policy, inflation, economic growth, recession, commodity prices, and currency controls or other limitations on the ability to expatriate cash;
•protective economic policies taken by governments, such as trade protection measures, increased antitrust reporting requirements and enforcement activity, and import/export licensing requirements;
•compliance with local regulations and laws including, in some countries, regulatory requirements restricting the Company's ability to manufacture or sell its products in the relevant market;
•diminished protection of intellectual property and contractual rights in certain jurisdictions;
•potential nationalization or expropriation of the Company's foreign assets;
•political or social upheavals, economic instability, repression, or human rights issues; and
•geopolitical events, including natural disasters, disruptions to markets due to war, armed conflict, terrorism, epidemics or pandemics.
Due to the international nature of the Company's business, geopolitical or economic changes or events, including global tensions and war, could adversely affect our business, results of operations or financial condition.
As described above, the Company has extensive operations and business activity throughout the world. Global tensions, conflict and/or war among any of the countries in which we conduct business or distribute our products may result in foreign currency volatility, decreased demand for our products in affected countries, and challenges to our global supply chain related to increased costs of materials and other inputs for our products and suppliers. Most recently, we have experienced, and expect to continue to experience, impacts to the Company's business resulting from the Russia-Ukraine war, rising conflict in the Middle East as well as increasing tensions between the U.S. and China. In response to heightened conflict, such as the Russia-Ukraine war, governments may impose export controls and broad financial and economic sanctions. Our business and operations may be further impacted by the imposition of trade protection measures or other policies adopted by any country that favor domestic companies and technologies over foreign competitors. Additional sanctions or other measures may be imposed by the global community, including but not limited to limitations on our ability to file, prosecute and maintain patents, trademarks and other intellectual property rights. Furthermore, in some countries, such as in Russia, action may be taken that allows companies and individuals to exploit inventions owned by patent holders from the United States and many other countries without consent or compensation and we may not be able to prevent third parties from practicing the Company's inventions in Russia or from selling or importing products in and into Russia.

14


Question: What steps does Apple take to ensure liquidity and meet its capital return program commitments?

Apple takes several steps to ensure liquidity and meet its capital return program commitments. It maintains a strong balance of cash, cash equivalents, and unrestricted marketable securities, supplemented by cash generated from ongoing operations and continued access to debt markets. These resources are expected to cover the company’s cash requirements for at least the next 12 months.

To manage its operational cash needs, Apple works with multiple outsourcing partners for subassemblies and final product assembly, maintaining manufacturing purchase obligations of $38.4 billion, with $38.3 billion due within 12 months as of June 29, 2024.

For its capital return program, Apple has authorized share repurchase programs and consistently pays dividends. In the third quarter of 2024, it repurchased $26 billion worth of common stock and paid $3.9 billion in dividends and equivalents. The company also plans to increase its dividend annually, subject to the Board of Directors' approval.

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Apple Inc. 10-Q form for quarterly period ended 2024-06-29, page 17:
Selling, General and Administrative

Selling, general and administrative expense increased $347 million during the third quarter of 2024 and $793 million during the first nine months of 2024 compared to the same periods in 2023.

Provision for Income Taxes

Provision for income taxes, effective tax rate and statutory federal income tax rate for the three- and nine-month periods ended June 29, 2024 and July 1, 2023 were as follows (dollars in millions):

|    |                                   |                    |       |                   |      |              |       |             |    |    |        |    |    |        |
|---:|:----------------------------------|:-------------------|:------|:------------------|:-----|:-------------|:------|:------------|:---|:---|:-------|:---|:---|:-------|
|  1 |                                   | Three Months Ended |       | Nine Months Ended |      |              |       |             |    |    |        |    |    |        |
|  2 |                                   | June 29,2024       |       | July 1,2023       |      | June 29,2024 |       | July 1,2023 |    |    |        |    |    |        |
|  3 | Provision for income taxes        | $                  | 4,046 |                   |      | $            | 2,852 |             |    | $  | 14,875 |    | $  | 12,699 |
|  4 | Effective tax rate                | 15.9               | %     |                   | 12.5 | %            |       | 15.8        | %  |    | 14.6   | %  |    |        |
|  5 | Statutory federal income tax rate | 21                 | %     |                   | 21   | %            |       | 21          | %  |    | 21     | %  |    |        |

The Company's effective tax rate for the third quarter and first nine months of 2024 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by state income taxes.
The Company's effective tax rate for the third quarter and first nine months of 2024 was higher compared to the same periods in 2023 due primarily to a higher effective tax rate on foreign earnings and lower tax benefits from share-based compensation, partially offset by lower state income taxes.

Liquidity and Capital Resources

The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond.
The Company's contractual cash requirements have not changed materially since the 2023 Form 10-K, except for manufacturing purchase obligations.

Manufacturing Purchase Obligations

The Company utilizes several outsourcing partners to manufacture subassemblies for the Company's products and to perform final assembly and testing of finished products. The Company also obtains individual components for its products from a wide variety of individual suppliers. As of June 29, 2024, the Company had manufacturing purchase obligations of $38.4 billion, with $38.3 billion payable within 12 months.

Capital Return Program

In addition to its contractual cash requirements, the Company has authorized share repurchase programs. The programs do not obligate the Company to acquire a minimum amount of shares. As of June 29, 2024, the Company's quarterly cash dividend was $0.25 per share. The Company intends to increase its dividend on an annual basis, subject to declaration by the Board of Directors.
During the third quarter of 2024, the Company repurchased $26.0 billion of its common stock and paid dividends and dividend equivalents of $3.9 billion.

Recent Accounting Pronouncements

Income Taxes

In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU 2023-09 in its fourth quarter of 2026 using a prospective transition method.

Apple Inc. | Q3 2024 Form 10-Q | 17

Apple Inc. 10-Q form for quarterly period ended 2024-06-29, page 17:
Selling, General and Administrative

Selling, general and administrative expense increased $347 million during the third quarter of 2024 and $793 million during the first nine months of 2024 compared to the same periods in 2023.

Provision for Income Taxes

Provision for income taxes, effective tax rate and statutory federal income tax rate for the three- and nine-month periods ended June 29, 2024 and July 1, 2023 were as follows (dollars in millions):

	Three Months Ended		Nine Months Ended

	June 29,2024		July 1,2023		June 29,2024		July 1,2023

Provision for income taxes	$	4,046 			$	2,852 			$	14,875 			$	12,699

Effective tax rate	15.9 	%		12.5 	%		15.8 	%		14.6 	%

Statutory federal income tax rate	21 	%		21 	%		21 	%		21 	%

The Company's effective tax rate for the third quarter and first nine months of 2024 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by state income taxes.
The Company's effective tax rate for the third quarter and first nine months of 2024 was higher compared to the same periods in 2023 due primarily to a higher effective tax rate on foreign earnings and lower tax benefits from share-based compensation, partially offset by lower state income taxes.

Liquidity and Capital Resources

The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond.
The Company's contractual cash requirements have not changed materially since the 2023 Form 10-K, except for manufacturing purchase obligations.

Manufacturing Purchase Obligations

The Company utilizes several outsourcing partners to manufacture subassemblies for the Company's products and to perform final assembly and testing of finished products. The Company also obtains individual components for its products from a wide variety of individual suppliers. As of June 29, 2024, the Company had manufacturing purchase obligations of $38.4 billion, with $38.3 billion payable within 12 months.

Capital Return Program

In addition to its contractual cash requirements, the Company has authorized share repurchase programs. The programs do not obligate the Company to acquire a minimum amount of shares. As of June 29, 2024, the Company's quarterly cash dividend was $0.25 per share. The Company intends to increase its dividend on an annual basis, subject to declaration by the Board of Directors.
During the third quarter of 2024, the Company repurchased $26.0 billion of its common stock and paid dividends and dividend equivalents of $3.9 billion.

Recent Accounting Pronouncements

Income Taxes

In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU 2023-09 in its fourth quarter of 2026 using a prospective transition method.

Apple Inc. | Q3 2024 Form 10-Q | 17


Question: How does Consumers ensure liquidity and financial stability?

Consumers Energy ensures liquidity and financial stability through a variety of financial strategies and instruments. The company relies on cash flows from operations, external financing, and stockholder contributions from CMS Energy to fund capital expenditures, retire debt, pay dividends, and fulfill other obligations. Consumers maintains robust access to capital markets and expects to continue leveraging these resources barring any major market disruptions.

As of March 31, 2024, Consumers had $1.3 billion available under its revolving credit facilities, which are used for general working capital purposes and issuing letters of credit. Additionally, Consumers operates a commercial paper program with a capacity of $500 million, supported by these credit facilities, to manage short-term funding needs. The company also benefits from CMS Energy’s equity offering program, which provides flexibility to raise capital through various transactions.
These measures, along with stringent adherence to dividend restrictions and financial covenants, ensure Consumers maintains sufficient liquidity and financial resilience.

CMS ENERGY CORP 10-Q form for quarterly period ended 2024-03-31, page 29:
Capital Resources and Liquidity

CMS Energy and Consumers expect to have sufficient liquidity to fund their present and future commitments. CMS Energy uses dividends and tax-sharing payments from its subsidiaries and external financing and capital transactions to invest in its utility and non‑utility businesses, retire debt, pay dividends, and fund its other obligations. The ability of CMS Energy's subsidiaries, including Consumers, to pay dividends to CMS Energy depends upon each subsidiary's revenues, earnings, cash needs, and other factors. In addition, Consumers' ability to pay dividends is restricted by certain terms included in its articles of incorporation and potentially by FERC requirements and provisions under the Federal Power Act and the Natural Gas Act. For additional details on Consumers' dividend restrictions, see Notes to the Unaudited Consolidated Financial Statements-Note 3, Financings and Capitalization-Dividend Restrictions. During the three months ended March 31, 2024, Consumers paid $265 million in dividends on its common stock to CMS Energy.
Consumers uses cash flows generated from operations and external financing transactions, as well as stockholder contributions from CMS Energy, to fund capital expenditures, retire debt, pay dividends, and fund its other obligations. Consumers also uses these sources of funding to contribute to its employee benefit plans.
Financing and Capital Resources: CMS Energy and Consumers rely on the capital markets to fund their robust capital plan. Barring any sustained market dislocations or disruptions, CMS Energy and Consumers expect to continue to have ready access to the financial and capital markets and will continue to explore possibilities to take advantage of market opportunities as they arise with respect to future funding needs. If access to these markets were to diminish or otherwise become restricted, CMS Energy and Consumers would implement contingency plans to address debt maturities, which could include reduced capital spending.
In 2023, CMS Energy entered into an equity offering program under which it may sell shares of its common stock having an aggregate sales price of up to $1 billion in privately negotiated transactions, in "at the market" offerings, or through forward sales transactions. There have been no sales of securities under this program.
At March 31, 2024, CMS Energy had $521 million of its revolving credit facility available and Consumers had $1.3 billion available under its revolving credit facilities. CMS Energy and Consumers use these credit facilities for general working capital purposes and to issue letters of credit. An additional source of liquidity is Consumers' commercial paper program, which allows Consumers to issue, in one or more placements, up to $500 million in aggregate principal amount of commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers' revolving credit facilities. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At March 31, 2024, there were no commercial paper notes outstanding under this program. For additional details on CMS Energy's and Consumers' secured revolving credit facilities and commercial paper program, see Notes to the Unaudited Consolidated Financial Statements-Note 3, Financings and Capitalization.
29