ORCL Term Loan Credit Agreements

On June 10, 2024, we terminated our Term Loan Credit Agreement and repaid the principal amount outstanding together with interest accrued up to the date of repayment. Simultaneously, we borrowed up to the maximum commitment amount of $5.6 billion pursuant to a term loan credit agreement (Term Loan Credit Agreement 2) executed on the same date. The critical terms of the Term Loan Credit Agreement 2 are similar to the critical terms of the Term Loan Credit Agreement, except for terms related to the interest, the consolidation of two term loan facilities under Term Loan Credit Agreement into a single facility under Term Loan Credit Agreement 2 and the options to extend the Term Loan Credit Agreement 2. Interest is based on either (a) a Term SOFR-based formula plus a margin of 112.5 basis points to 162.5 basis points, depending on the credit rating assigned to our long-term senior unsecured debt, or (b) a Base Rate formula plus a margin of 12.5 basis points to 62.5 basis points, depending on the same such credit rating, each as set forth in the Term Loan Credit Agreement 2.


ORCL Term Loan Credit Agreements

The Term Loan Credit Agreement 2 provides for repayment of borrowing as follows: •an amount equal to the amount borrowed reduced by any prepayments multiplied by 1.25% on September 30, 2024 and quarterly thereafter until June 30, 2026; •an amount equal to the amount borrowed reduced by any prepayments multiplied by 2.50% on September 30, 2026 and quarterly thereafter until June 30, 2027; and


ORCL Index to Financial Statements

•any remaining unpaid principal balance under the Term Loan Credit Agreement 2 will become fully due and payable on August 16, 2027 (subject to any extension of the Term Loan Credit Agreement 2 termination date, as set out below), unless the outstanding loans are prepaid earlier at the request of Oracle or accelerated by the lenders if an event of default occurs.


ORCL Index to Financial Statements

The termination date of the Term Loan Credit Agreement 2 may be extended at our sole option by up to 2 years. The termination date of the Term Loan Credit Agreement 2 may also be further extended at each lender’s option by up to 2 years.


ORCL Commercial Paper Program and Commercial Paper Notes

Our existing $6.0 billion commercial paper program allows us to issue and sell unsecured short-term promissory notes (Commercial Paper Notes) pursuant to a private placement exemption from the registration requirements under federal and state securities laws pursuant to dealer agreements with various banks and an Issuing and Paying Agency Agreement with Deutsche Bank Trust Company Americas.


As of May 31, 2024 and 2023, there were $401 million and $563 million of outstanding Commercial Paper Notes, respectively. Commercial Paper Notes outstanding as of May 31, 2024 mature at various dates through August 2024. We use the net proceeds from the issuance of commercial paper for general corporate purposes.


ORCL Fiscal 2024 Oracle Restructuring Plan

During fiscal 2024, our management approved, committed to and initiated plans to restructure and further improve efficiencies in our operations due to our acquisitions and certain other operational activities (2024 Restructuring Plan). The total estimated restructuring costs associated with the 2024 Restructuring Plan are up to $635 million and will be recorded to the restructuring expense line item within our consolidated statements of operations as they are incurred through the end of the plan. We recorded $432 million of restructuring expenses in connection with the 2024 Restructuring Plan in fiscal 2024. Any changes to the estimates of executing the 2024 Restructuring Plan will be reflected in our future results of operations.


ORCL Fiscal 2022 Oracle Restructuring Plan

During fiscal 2022, our management approved, committed to and initiated plans to restructure and further improve efficiencies in our operations due to our acquisitions and certain other operational activities (2022 Restructuring Plan). In fiscal 2023, our management supplemented the 2022 Restructuring Plan to reflect additional actions that we expected to take. Restructuring costs associated with the 2022 Restructuring Plan were recorded to the restructuring expense line item within our consolidated statements of operations as they were incurred. We recorded $493 million and $223 million of restructuring expenses in connection with the 2022 Restructuring Plan in fiscal 2023 and 2022, respectively. The total costs recorded in our consolidated statements of operations in


ORCL Index to Financial Statements

connection with the 2022 Restructuring Plan were $716 million. Actions pursuant to the 2022 Restructuring Plan were substantially complete as of May 31, 2023.


ORCL Fiscal 2024 Activity

####Accrued############Year Ended May 31, 2024##############Accrued####Total Costs####Total Expected (in millions)####May 31, 2023(2)####Initial Costs(3)####Adj. to Cost(4)########Cash Payments######Others(5)####May 31, 2024(2)####Accrued to Date####Program Costs Fiscal 2024 Oracle Restructuring Plan(1)###################################### Cloud and license##$##—##$##204##$##(9##)####$##(108##)##$##—##$##87##$##195##$##205 Hardware####—####9####—########(5##)####—####4####9####17 Services####—####46####(1##)######(33##)####—####12####45####136 Other####—####188####(5##)######(134##)####—####49####183####277 Total Fiscal 2024 Oracle Restructuring Plan##$##—##$##447##$##(15##)####$##(280##)##$##—##$##152##$##432##$##635 Total other restructuring plans(6)##$##199##$##—##$##(28##)####$##(89##)##$##2##$##84######## Total restructuring plans##$##199##$##447##$##(43##)####$##(369##)##$##2##$##236########


ORCL Fiscal 2023 Activity

####Accrued############Year Ended May 31, 2023################Accrued (in millions)####May 31, 2022####Initial Costs(3)####Adj. to Cost(4)########Cash Payments######Others(5)######May 31, 2023(2) Fiscal 2022 Oracle Restructuring Plan(1)################################ Cloud and license##$##34##$##288##$##(6##)####$##(218##)##$##1####$##99 Hardware####7####18####—########(18##)####(1##)####6 Services####9####28####—########(19##)####(1##)####17 Other####10####162####3########(141##)####1######35 Total Fiscal 2022 Oracle Restructuring Plan##$##60##$##496##$##(3##)####$##(396##)##$##—####$##157 Total other restructuring plans(6)##$##71##$##1##$##(4##)####$##(22##)##$##(4##)##$##42 Total restructuring plans##$##131##$##497##$##(7##)####$##(418##)##$##(4##)##$##199


ORCL Fiscal 2022 Activity

####Accrued############Year Ended May 31, 2022################Accrued (in millions)####May 31, 2021####Initial Costs(3)####Adj. to Cost(4)########Cash Payments######Others(5)######May 31, 2022 Fiscal 2022 Oracle Restructuring Plan(1)################################ Cloud and license##$##—##$##90##$##(2##)####$##(52##)##$##(2##)##$##34 Hardware####—####11####—########(4##)####—######7 Services####—####16####—########(7##)####—######9 Other####—####105####3########(29##)####(69##)####10 Total Fiscal 2022 Oracle Restructuring Plan##$##—##$##222##$##1######$##(92##)##$##(71##)##$##60 Total other restructuring plans(6)##$##225##$##—##$##(32##)####$##(109##)##$##(13##)##$##71 Total restructuring plans##$##225##$##222##$##(31##)####$##(201##)##$##(84##)##$##131


ORCL Fiscal 2022 Activity

(1)Restructuring costs recorded to each of the operating segments presented primarily related to employee severance costs. Other restructuring costs represented employee severance costs not related to our operating segments and certain other restructuring plan costs.


ORCL Fiscal 2022 Activity

(2)As of May 31, 2024 and 2023, substantially all restructuring liabilities have been recorded in other current liabilities within our consolidated balance sheets.


ORCL Fiscal 2022 Activity

(3)Costs recorded for the respective restructuring plans during the period presented.


ORCL Fiscal 2022 Activity

(4)All plan adjustments were changes in estimates whereby increases and decreases in costs were generally recorded to operating expenses in the period of adjustments.


ORCL Fiscal 2022 Activity

(5)Represents foreign currency translation and certain other non-cash adjustments.


ORCL Fiscal 2022 Activity

(6)Other restructuring plans presented in the tables above included condensed information for other Oracle based plans and other plans associated with certain of our acquisitions whereby we continued to make cash outlays to settle obligations under these plans during the periods presented but for which the periodic impact to our consolidated statements of operations was not significant.


ORCL 9.DEFERRED REVENUES

Deferred revenues consisted of the following: ######May 31,#### (in millions)####2024######2023 Cloud services and license support##$##8,203####$##7,983 Hardware####546######535 Services####512######400 Cloud license and on-premise license####52######52 Deferred revenues, current####9,313######8,970 Deferred revenues, non-current (in other non-current liabilities)####1,233######968 Total deferred revenues##$##10,546####$##9,938


ORCL 9.DEFERRED REVENUES

Deferred cloud services and license support revenues and deferred hardware revenues substantially represent customer payments made in advance for cloud or support contracts that are typically billed in advance with corresponding revenues generally being recognized ratably or based upon customer usage over the respective contractual periods. Deferred services revenues include prepayments for our services business and revenues for these services are generally recognized as the services are performed. Deferred cloud license and on-premise license revenues typically resulted from customer payments that related to undelivered products and services or specified enhancements.


ORCL Leases

We have operating leases that primarily relate to certain of our data centers and facilities. As of May 31, 2024, our operating leases substantially have remaining terms of one year to fifteen years, some of which include options to extend and/or terminate the leases.


ORCL Leases

Operating lease expenses totaled $1.2 billion, net of sublease income of $9 million in fiscal 2024 and $873 million, net of sublease income of $11 million in fiscal 2023. At May 31, 2024, ROU assets, current lease liabilities and non-current lease liabilities for our operating leases were $7.3 billion, $1.3 billion and $6.3 billion, respectively. We recorded ROU assets of $4.2 billion in exchange for operating lease obligations during the year ended May 31, 2024. Cash paid for amounts included in the measurement of operating lease liabilities was $1.2 billion and $894 million for the year ended May 31, 2024 and 2023, respectively. As of May 31, 2024, the weighted average remaining lease term for operating leases was approximately nine years and the weighted average discount rate used for calculating operating lease obligations was 5.1%. As of May 31, 2024, we have $22.9 billion of additional operating lease commitments, primarily for data centers, that are generally expected to commence between fiscal 2025 and fiscal 2027 and for terms of nine to fifteen years that were not reflected on our consolidated balance sheet as of May 31, 2024 or in the maturities table below.


ORCL Leases

Maturities of operating lease liabilities were as follows as of May 31, 2024 (in millions): Fiscal 2025##$##1,313## Fiscal 2026####1,236## Fiscal 2027####1,128## Fiscal 2028####1,027## Fiscal 2029####936## Thereafter####3,861## Total operating lease payments####9,501## Less: imputed interest####(1,956##) Total operating lease liability##$##7,545##


ORCL Leases

Subsequent to May 31, 2024, we entered into $9.3 billion of additional operating lease commitments for data centers that are generally expected to commence between fiscal 2025 and fiscal 2026 and for terms of fourteen to fifteen years.


ORCL Unconditional Obligations

In the ordinary course of business, we enter into certain unconditional purchase obligations with our suppliers, which are agreements that are enforceable and legally binding and specify terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the payment. Certain routine arrangements that are entered into in the ordinary course of business are not included in the amounts below, as they are generally entered into in order to secure pricing or other negotiated terms and are difficult to quantify in a meaningful way or are for terms of less than one year.


ORCL Unconditional Obligations

As of May 31, 2024, our unconditional purchase and certain other obligations were as follows (in millions): Fiscal 2025##$##625 Fiscal 2026####315 Fiscal 2027####188 Fiscal 2028####113 Fiscal 2029####86 Thereafter####260 Total##$##1,587


ORCL Index to Financial Statements

As described in Note 7 above, as of May 31, 2024 we have senior notes and other borrowings that mature at various future dates and derivative financial instruments outstanding that we leverage to manage certain risks and exposures.


ORCL Guarantees

Our cloud, license and hardware sales agreements generally include certain provisions for indemnifying customers against liabilities if our products infringe a third party’s intellectual property rights. To date, we have not incurred any material costs as a result of such indemnifications and have not accrued any material liabilities related to such obligations in our consolidated financial statements. Certain of our sales agreements also include provisions indemnifying customers against liabilities in the event we breach confidentiality or service level requirements. It is not possible to determine the maximum potential amount under these indemnification agreements due to our limited and infrequent history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.


ORCL Guarantees

Our Oracle Cloud Services agreements generally include a warranty that the cloud services will be performed in all material respects as defined in the agreement during the service period. Our license and hardware agreements also generally include a warranty that our products will substantially operate as described in the applicable program documentation for a period of one year after delivery. We also warrant that services we perform will be provided in a manner consistent with industry standards for a period of 90 days from performance of the services.


ORCL Common Stock Repurchases

Our Board of Directors has approved a program for us to repurchase shares of our common stock. As of May 31, 2024, approximately $7.0 billion remained available for stock repurchases pursuant to our stock repurchase program. We repurchased 10.6 million shares for $1.2 billion, 17.0 million shares for $1.3 billion, and 185.8 million shares for $16.2 billion in fiscal 2024, 2023 and 2022, respectively, under the stock repurchase program.


ORCL Common Stock Repurchases

Our stock repurchase authorization does not have an expiration date and the pace of our repurchase activity will depend on factors such as our working capital needs, our cash requirements for acquisitions and dividend payments, our debt repayment obligations or repurchases of our debt, our stock price and economic and market conditions. Our stock repurchases may be effected from time to time through open market purchases or pursuant to a Rule 10b5-1 trading plan. Our stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.


ORCL Dividends on Common Stock

During fiscal 2024, 2023 and 2022, our Board of Directors declared cash dividends of $1.60, $1.36 and $1.28 per share of our outstanding common stock, respectively, which we paid during the same period.


ORCL Dividends on Common Stock

In June 2024, our Board of Directors declared a quarterly cash dividend of $0.40 per share of our outstanding common stock. The dividend is payable on July 25, 2024 to stockholders of record as of the close of business on July 11, 2024. Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination of our Board of Directors.


ORCL Accumulated Other Comprehensive Loss

The following table summarizes, as of each balance sheet date, the components of our AOCL, net of income taxes: ########May 31,###### (in millions)####2024########2023## Foreign currency translation losses##$##(1,703##)####$##(1,686##) Unrealized gains on marketable securities, net####—########1## Unrealized gains on defined benefit plans, net####92########61## Unrealized gains on cash flow hedges, net####179########102## Total accumulated other comprehensive loss##$##(1,432##)####$##(1,522##)


ORCL Stock Plans

In fiscal 2021, we adopted the 2020 Equity Incentive Plan to replace the Amended and Restated 2000 Long-Term Equity Incentive Plan (the 2000 Plan) which provides for the issuance of long-term performance awards, including restricted stock-based awards, non-qualified stock options and incentive stock options, as well as stock purchase rights and stock appreciation rights, to our eligible employees, officers and directors who are also employees or consultants, independent consultants and advisers. In fiscal 2022 and 2024, our stockholders, upon the recommendation of our Board of Directors (the Board), approved the adoption of the Amended and Restated 2020 Equity Incentive Plan (as amended and restated, the 2020 Plan and, together with the 2000 Plan, the Plans), which increased the number of authorized shares of stock that may be issued under the 2020 Plan by 300 million shares and 350 million shares, respectively. Approximately 457 million shares of common stock were available for future awards under the 2020 Plan as of May 31, 2024. Under the 2020 Plan, for each share granted as a full value award in the form of a RSU or a performance-based restricted stock award, an equivalent of 2.5 shares is deducted from our pool of shares available for grant.


ORCL Stock Plans

As of May 31, 2024, 134 million unvested RSUs, 38 million PSOs (of which 11 million shares were vested) and service-based stock options (SOs) to purchase 13 million shares of common stock, substantially all of which were vested, were outstanding under the Plans. To date, we have not issued any stock purchase rights or stock appreciation rights under either of the Plans.


ORCL Stock Plans

The vesting schedule for all awards granted under the Plans is established by the Compensation Committee of the Board (the Compensation Committee). RSUs generally require service-based vesting of 25% annually over four years. SOs were previously granted under the 2000 Plan at not less than fair market value, become exercisable generally 25% annually over four years of service, and generally expire 10 years from the date of grant.


ORCL Stock Plans

PSOs granted under the 2000 Plan to our Chief Executive Officer and Chief Technology Officer in fiscal 2018 consisted of seven numerically equivalent vesting tranches that potentially could vest. One tranche, which was based solely on the attainment of a market-based metric, was achieved and vested in fiscal 2022. Each of the remaining six tranches requires the attainment of both a performance metric and a market capitalization metric by May 31, 2022, which was subsequently extended by three additional fiscal years to May 31, 2025 via an amendment approved by the Compensation Committee during fiscal 2022. The Compensation Committee has certified that all six market capitalization goals have been achieved. One operational performance goal was achieved in fiscal 2023 and consequently, the first of the remaining six tranches vested in fiscal 2024. One operational performance goal was achieved in fiscal 2024, but the Compensation Committee has not yet certified the achievement of this performance goal and the second of the remaining six tranches is therefore not yet vested as of May 31, 2024. If any of the remaining operational performance goals are achieved before May 31, 2025, additional tranches may vest, assuming continued employment and service through the date the Compensation Committee certifies that performance has been achieved. Stock-based compensation expense is recognized starting at the time each vesting tranche becomes probable of achievement over the longer of the estimated implicit service period or derived service period. Stock-based compensation associated with a vesting tranche where vesting is no longer determined to be probable is


ORCL Index to Financial Statements

reversed on a cumulative basis and is no longer prospectively recognized in the period when such a determination is made. We have estimated remaining service periods for those tranches that have been deemed probable of achievement as of May 31, 2024 to be one year.


ORCL Index to Financial Statements

In connection with certain of our acquisitions, we assumed certain outstanding restricted stock-based awards and stock options under each acquired company’s respective stock plans, or we substituted substantially similar awards under the Plans. These restricted stock-based awards and stock options assumed or substituted generally retained all of the rights, terms and conditions of the respective plans under which they were originally granted. As of May 31, 2024, approximately 520,000 unvested RSUs and stock options to purchase approximately 257,000 shares of common stock, substantially all of which were vested, were outstanding under acquired company stock plans that Oracle assumed.


ORCL Index to Financial Statements

The 1993 Directors’ Stock Plan (the Directors’ Plan) provides for the issuance of RSUs and other stock-based awards, including non-qualified stock options, to non-employee directors. The Directors’ Plan has from time to time been amended and restated. Under the terms of the Directors’ Plan, 10 million shares of common stock are reserved for issuance (including a fiscal 2013 amendment to increase the number of shares of our common stock reserved for issuance by 2 million shares). Currently, we only grant RSUs that vest fully on the one-year anniversary of the date of grant. In fiscal 2016, the Directors’ Plan was amended to permit the Compensation Committee to determine the amount and form of automatic grants of stock awards, if any, to each non-employee director upon first becoming a director and thereafter on an annual basis, as well as automatic grants for chairing certain Board committees, subject to certain stockholder approved limitations set forth in the Directors’ Plan. In fiscal 2020, the Compensation Committee reduced the maximum value of the annual automatic RSU grants to each non-employee director to $350,000 and eliminated all equity grants for chairing Board committees. As of May 31, 2024, approximately 36,000 unvested RSUs and stock options to purchase approximately 92,000 shares of common stock (all of which were vested) were outstanding under the Directors’ Plan. As of May 31, 2024, approximately 1 million shares were available for future stock awards under this plan.


ORCL Index to Financial Statements

The following table summarizes restricted stock-based award activity granted pursuant to Oracle-based stock plans for our last three fiscal years ended May 31, 2024: ######Restricted Stock-Based Awards Outstanding#### (in millions, except fair value)##Number of Shares########Weighted-Average Grant Date Fair Value Balance, May 31, 2021##110######$##51.87 Granted##65######$##85.07 Vested and issued##(38##)####$##50.52 Canceled##(9##)####$##63.25 Balance, May 31, 2022##128######$##68.34 Granted##76######$##66.67 Assumed##5######$##69.02 Vested and issued##(46##)####$##62.97 Canceled##(11##)####$##69.25 Balance, May 31, 2023##152######$##69.09 Granted##47######$##110.26 Vested and issued##(53##)####$##66.97 Canceled##(8##)####$##77.52 Balance, May 31, 2024##138######$##83.43


ORCL Index to Financial Statements

The total grant date fair values of restricted stock-based awards that were vested and issued in fiscal 2024, 2023 and 2022 were $3.5 billion, $2.9 billion and $1.9 billion, respectively. As of May 31, 2024, total unrecognized stock-based compensation expense related to non-vested restricted stock-based awards was $8.6 billion and is expected to be recognized over the remaining weighted-average vesting period of 2.68 years.


ORCL Index to Financial Statements

The following table summarizes stock option activity, including SOs and PSOs, and includes awards granted pursuant to the Plans and stock plans assumed from our acquisitions for our last three fiscal years ended May 31, 2024: ######Options Outstanding#### (in millions, except exercise price)##Shares Under Stock Option########Weighted-Average Exercise Price Balance, May 31, 2021##107######$##40.14 Granted and assumed##—######$##— Exercised##(10##)####$##34.34 Balance, May 31, 2022##97######$##40.70 Granted and assumed##—######$##— Exercised##(33##)####$##31.37 Balance, May 31, 2023##64######$##45.42 Granted and assumed##2######$##113.91 Exercised##(15##)####$##34.84 Balance, May 31, 2024##51######$##51.05


ORCL Index to Financial Statements

Stock options outstanding that have vested and that are expected to vest as of May 31, 2024 were as follows: ##Outstanding Stock Options (in millions)####Weighted-Average Exercise Price##Weighted-Average Remaining Contract Term (in years)####Aggregate Intrinsic Value(1) (in millions) Vested##24##$##46.38##1.63##$##1,691 Expected to vest(2)##11##$##56.99##1.93####674 Total##35##$##49.76##1.73##$##2,365


ORCL Index to Financial Statements

(1)The aggregate intrinsic value was calculated based on the gross difference between our closing stock price on the last trading day of fiscal 2024 of $117.19 and the exercise prices for all “in-the-money” options outstanding, excluding tax effects.


ORCL Index to Financial Statements

(2)The unrecognized compensation expense calculated under the fair value method for shares expected to vest as of May 31, 2024 was approximately $76 million and is expected to be recognized over a weighted-average period of 2.96 years. Approximately 16 million shares outstanding as of May 31, 2024 were not expected to vest.


ORCL Stock-Based Compensation Expense and Valuations of Restricted Stock-Based Awards

We estimated the fair values of our restricted stock-based awards that are solely subject to service-based vesting requirements based upon their market values as of the grant dates, discounted for the present values of expected dividends.


Stock-based compensation expense was included in the following operating expense line items in our consolidated statements of operations: ##########Year Ended May 31,######## (in millions)####2024######2023######2022## Cloud services and license support##$##525####$##435####$##205## Hardware####23######18######15## Services####167######137######67## Sales and marketing####667######611######448## Research and development####2,225######1,983######1,633## General and administrative####367######363######245## Total stock-based compensation####3,974######3,547######2,613## Estimated income tax benefit included in provision for income taxes####(913##)####(802##)####(593##) Total stock-based compensation, net of estimated income tax benefit##$##3,061####$##2,745####$##2,020##


ORCL Index to Financial Statements

Tax Benefits from Exercises of Stock Options and Vesting of Restricted Stock-Based Awards


ORCL Index to Financial Statements

Total cash received as a result of stock option exercises was approximately $545 million, $1.0 billion and $319 million for fiscal 2024, 2023 and 2022, respectively. The total aggregate intrinsic value of restricted stock-based awards that vested and were issued and stock options that were exercised was $7.4 billion, $5.1 billion and $3.7 billion for fiscal 2024, 2023 and 2022. In connection with the vesting and issuance of restricted stock-based awards and stock options that were exercised, the tax benefits realized by us were $1.7 billion, $1.2 billion and $843 million for fiscal 2024, 2023 and 2022, respectively.


ORCL Employee Stock Purchase Plan

We have an Employee Stock Purchase Plan (Purchase Plan) that allows employees to purchase shares of common stock at a price per share that is 95% of the fair market value of Oracle stock as of the end of the semi-annual option period. As of May 31, 2024, 35 million shares were reserved for future issuances under the Purchase Plan. We issued approximately 2 million shares in each of fiscal 2024, 2023 and 2022 under the Purchase Plan.


ORCL Defined Contribution and Other Postretirement Plans

We offer various defined contribution plans for our U.S. and non-U.S. employees. Total defined contribution plan expense was $468 million, $470 million and $412 million for fiscal 2024, 2023 and 2022, respectively.


In the U.S., regular employees can participate in the Oracle Corporation 401(k) Savings and Investment Plan (Oracle 401(k) Plan). Participants can generally contribute up to 40% of their eligible compensation on a per-pay-period basis as defined by the Oracle 401(k) Plan document or by the section 402(g) limit as defined by the U.S. Internal Revenue Service (IRS). We match a portion of employee contributions, currently 50% up to 6% of compensation each pay period, subject to maximum aggregate matching amounts. Our contributions to the Oracle 401(k) Plan, net of forfeitures, were $200 million, $198 million and $164 million in fiscal 2024, 2023 and 2022, respectively.


We also offer non-qualified deferred compensation plans to certain employees whereby they may defer a portion of their annual base and/or variable compensation until retirement or a date specified by the employee in accordance with the plans. Deferred compensation plan assets and liabilities were each approximately $988 million and approximately $792 million as of May 31, 2024 and 2023, respectively, and were presented in other non-current assets and other non-current liabilities in the accompanying consolidated balance sheets.


We sponsor certain defined benefit pension plans that are offered primarily by certain of our foreign subsidiaries. Many of these plans were assumed through our acquisitions or are required by local regulatory requirements. We may deposit funds for these plans with insurance companies, third-party trustees, or into government-managed accounts consistent with local regulatory requirements, as applicable. Our total defined benefit plan pension expenses were $71 million, $78 million and $67 million for fiscal 2024, 2023 and 2022, respectively. The aggregate projected benefit obligation and aggregate net liability (funded status, which is substantially included in other non-current liabilities in our consolidated balance sheets) of our defined benefit plans as of May 31, 2024 were $997 million and $313 million, respectively, and as of May 31, 2023 were $939 million and $322 million, respectively.


ORCL 13.INCOME TAXES

Our effective tax rates for each of the periods presented are the result of the mix of income and losses earned in various tax jurisdictions that apply a broad range of income tax rates. Our provision for income taxes varied from the tax computed at the U.S. federal statutory income tax rate for fiscal 2024, 2023 and 2022 primarily due to earnings in foreign operations, state taxes, the U.S. research and development tax credit, settlements with tax authorities, the tax effects of stock-based compensation, the Foreign Derived Intangible Income deduction and the tax effect of Global Intangible Low-Taxed Income.


ORCL Index to Financial Statements

The following is a geographical breakdown of income before income taxes: ########Year Ended May 31,###### (in millions)####2024####2023####2022## Domestic##$##3,023##$##1,492##$##(629##) Foreign####8,718####7,634####8,278## Income before income taxes##$##11,741##$##9,126##$##7,649##


ORCL Index to Financial Statements

The provision for income taxes consisted of the following: ##########Year Ended May 31,######## (Dollars in millions)####2024######2023######2022## Current provision:################## Federal##$##999####$##625####$##709## State####420######398######186## Foreign####1,994######1,767######1,183## Total current provision##$##3,413####$##2,790####$##2,078## Deferred benefit:################## Federal##$##(2,020##)##$##(2,193##)##$##(1,661##) State####(280##)####(398##)####(139##) Foreign####161######424######654## Total deferred benefit##$##(2,139##)##$##(2,167##)##$##(1,146##) Total provision for income taxes##$##1,274####$##623####$##932## Effective income tax rate####10.9%######6.8%######12.2%##


ORCL Index to Financial Statements

The provision for income taxes differed from the amount computed by applying the federal statutory rate to our income before income taxes as follows: ##########Year Ended May 31,######## (Dollars in millions)####2024######2023######2022## U.S. federal statutory tax rate####21.0%######21.0%######21.0%## Tax provision at statutory rate##$##2,466####$##1,917####$##1,606## Foreign earnings at other than U.S. rates####(262##)####(357##)####(536##) State tax expense, net of federal benefit####81######41######132## Settlements and releases from judicial decisions and statute expirations, net####(124##)####(552##)####(263##) Tax contingency interest accrual, net####157######101######44## Domestic tax contingency, net####131######28######441## Federal research and development credit####(372##)####(280##)####(222##) Stock-based compensation####(624##)####(322##)####(263##) Realization of a one-time tax attribute####(235##)####—######—## Other, net####56######47######(7##) Total provision for income taxes##$##1,274####$##623####$##932##


ORCL Index to Financial Statements

The components of our deferred tax assets and liabilities were as follows: ########May 31,###### (in millions)####2024########2023## Deferred tax assets:############## Accruals and allowances##$##708######$##928## Employee compensation and benefits####929########811## Differences in timing of revenue recognition####781########662## Lease liabilities####1,553########1,036## Basis of property, plant and equipment and intangible assets####9,315########9,989## Capitalized research and development####2,574########1,421## Tax credit and net operating loss carryforwards####5,695########4,941## Other####15########189## Total deferred tax assets####21,570########19,977## Valuation allowance####(1,898##)######(1,940##) Total deferred tax assets, net####19,672########18,037## Deferred tax liabilities:############## Unrealized gain on stock####(79##)######(79##) Acquired intangible assets####(1,425##)######(2,124##) GILTI deferred####(7,759##)######(8,124##) ROU assets####(1,503##)######(1,000##) Withholding taxes on foreign earnings####(325##)######(256##) Total deferred tax liabilities####(11,091##)######(11,583##) Net deferred tax assets##$##8,581######$##6,454## Recorded as:############## Non-current deferred tax assets##$##12,273######$##12,226## Non-current deferred tax liabilities####(3,692##)######(5,772##) Net deferred tax assets##$##8,581######$##6,454##


ORCL Index to Financial Statements

We provide for U.S. income taxes on the undistributed earnings and the other outside basis temporary differences of foreign subsidiaries unless they are considered indefinitely reinvested outside the U.S. At May 31, 2024, the amount of temporary differences related to undistributed earnings and other outside basis temporary differences of investments in foreign subsidiaries upon which U.S. income taxes have not been provided was approximately $11.0 billion. If the undistributed earnings and other outside basis differences were recognized in a taxable transaction, they would generate foreign tax credits that would reduce the federal tax liability associated with the foreign dividend or the otherwise taxable transaction. At May 31, 2024, assuming a full utilization of the foreign tax credits, the potential net deferred tax liability associated with these other outside basis temporary differences would be approximately $2.0 billion.


ORCL Index to Financial Statements

Our net deferred tax assets were $8.6 billion and $6.5 billion as of May 31, 2024 and 2023, respectively. We believe that it is more likely than not that the net deferred tax assets will be realized in the foreseeable future. Realization of our net deferred tax assets is dependent upon our generation of sufficient taxable income in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credit carryforwards. The amount of net deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.


ORCL Index to Financial Statements

The valuation allowance was $1.9 billion as of May 31, 2024 and 2023. A majority of the valuation allowances as of May 31, 2024 and 2023 related to tax assets established in purchase accounting and other tax credits. Any subsequent reduction of that portion of the valuation allowance and the recognition of the associated tax benefits associated with our acquisitions will be recorded to our provision for income taxes subsequent to our final determination of the valuation allowance or the conclusion of the measurement period (as defined above), whichever comes first.


ORCL Index to Financial Statements

At May 31, 2024, we had federal net operating loss carryforwards of approximately $322 million, which are subject to limitation on their utilization. Approximately $255 million of these federal net operating losses expire in various years between fiscal 2025 and fiscal 2038. Approximately $67 million of these federal net operating losses are not currently subject to expiration dates. We had state net operating loss carryforwards of approximately $2.1 billion at May 31, 2024, which are subject to limitations on their utilization. Approximately $2.0 billion of these state net operating losses expire in various years between fiscal 2025 and fiscal 2044. Approximately $49 million of these state net operating losses are not currently subject to expiration dates. We had total foreign net operating loss carryforwards of approximately $1.9 billion at May 31, 2024, which are subject to limitations on their utilization. Approximately $1.9 billion of these foreign net operating losses are not currently subject to expiration dates. The remainder of the foreign net operating losses, approximately $68 million, expire between fiscal 2025 and fiscal 2044. At May 31, 2024, we had federal capital loss carryforwards of approximately $145 million, which expire between fiscal 2026 and fiscal 2027. We had state capital loss carryforwards of approximately $318 million, which expire between fiscal 2026 and fiscal 2037. We had foreign capital loss carryforwards of approximately $187 million, which are not currently subject to expiration dates. We had tax credit carryforwards of approximately $1.4 billion at May 31, 2024, which are subject to limitations on their utilization. Approximately $956 million of these tax credit carryforwards are not currently subject to expiration dates. The remainder of the tax credit carryforwards, approximately $478 million, expire in various years between fiscal 2025 and fiscal 2044.


ORCL Index to Financial Statements

Current income taxes payable are included in other current liabilities in our consolidated balance sheets and totaled $2.1 billion and $1.9 billion as of May 31, 2024 and 2023, respectively.


ORCL Index to Financial Statements

We classify our unrecognized tax benefits as either current or non-current income taxes payable in the accompanying consolidated balance sheets. The aggregate changes in the balance of our gross unrecognized tax benefits, including acquisitions, were as follows: ##########Year Ended May 31,######## (in millions)####2024######2023######2022## Gross unrecognized tax benefits as of June 1##$##7,715####$##7,284####$##6,912## Increases related to tax positions from prior fiscal years####492######709######66## Decreases related to tax positions from prior fiscal years####(128##)####(45##)####(24##) Increases related to tax positions taken during current fiscal year####889######669######919## Settlements with tax authorities####(46##)####(212##)####(117##) Lapses of statutes of limitation####(129##)####(631##)####(333##) Cumulative translation adjustments and other, net####(8##)####(59##)####(139##) Total gross unrecognized tax benefits as of May 31##$##8,785####$##7,715####$##7,284##


ORCL Index to Financial Statements

As of May 31, 2024, 2023 and 2022, $4.2 billion, $3.9 billion and $4.3 billion, respectively, of unrecognized tax benefits would affect our effective tax rate if recognized. We recognized interest and penalties related to uncertain tax positions in our provision for income taxes line of our consolidated statements of operations of $199 million, $111 million and $93 million during fiscal 2024, 2023 and 2022, respectively. Interest and penalties accrued as of May 31, 2024 and 2023 were $1.8 billion and $1.7 billion, respectively.


ORCL Index to Financial Statements

Domestically, U.S. federal and state taxing authorities are currently examining income tax returns of Oracle and various acquired entities for years through fiscal 2022. Many issues are at an advanced stage in the examination process, the most significant of which include issues related to transfer pricing, domestic production activity, one-time transition tax, foreign tax credits, research and development credits and state economic nexus. With respect to all of these domestic audit issues considered in the aggregate, we believe that it was reasonably possible that, as of May 31, 2024, our gross unrecognized tax benefits could decrease (whether by payment, release, or a combination of both) in the next 12 months by as much as $568 million ($454 million net of offsetting tax benefits). Our U.S. federal income tax returns have been examined for all years prior to fiscal 2013 and, with some exceptions, we are no longer subject to audit for those periods. Our U.S. state income tax returns, with some exceptions, have been examined for all years prior to fiscal 2010, and we are no longer subject to audit for those periods.


ORCL Index to Financial Statements

Internationally, tax authorities for numerous non-U.S. jurisdictions are also examining or have examined returns of Oracle and various acquired entities for years through fiscal 2023. Many of the relevant tax years are at an advanced


ORCL Index to Financial Statements

stage in examination or subsequent controversy resolution processes, the most significant of which include issues related to transfer pricing and withholding tax. The manner in which those issues are resolved and the timing thereof could potentially result in a range of decreases or increases in our unrecognized tax benefits over the next 12 months. With respect to all of these international audit issues considered in the aggregate, we believe it was reasonably possible that, as of May 31, 2024, the gross unrecognized tax benefits could decrease (whether by payment, release, or a combination of both) in the next 12 months by as much as $847 million ($302 million net of offsetting tax benefits). We also believe it was reasonably possible that, as of May 31, 2024, the gross unrecognized tax benefits could increase in the next 12 months by as much as $619 million ($107 million net of offsetting U.S. tax benefits). With some exceptions, we are generally no longer subject to tax examinations in non-U.S. jurisdictions for years prior to fiscal 2001.


ORCL Index to Financial Statements

We are under audit by the IRS and various other domestic and foreign tax authorities with regards to income tax and indirect tax matters and are involved in various challenges and litigation in a number of countries, including, in particular, Australia, Brazil, Canada, Egypt, Germany, India, Indonesia, Israel, Italy, Pakistan, Saudi Arabia, South Korea and Spain, where the amounts under controversy are significant. In some, although not all, cases, we have reserved for potential adjustments to our provision for income taxes and accrual of indirect taxes that may result from examinations by, or any negotiated agreements with, these tax authorities or final outcomes in judicial proceedings and we believe that the final outcome of these examinations, agreements or judicial proceedings will not have a material effect on our results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of benefits in the period we determine the liabilities are no longer necessary. If our estimates of the federal, state and foreign income tax liabilities and indirect tax liabilities are less than the ultimate assessment, it could result in a further charge to expense.


ORCL Index to Financial Statements

We believe that we have adequately provided under GAAP for outcomes related to our tax audits. However, there can be no assurances as to the possible outcomes or any related financial statement effect thereof.


ORCL 14.SEGMENT INFORMATION

ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision makers (CODMs) are our Chief Executive Officer and Chief Technology Officer. We are organized by line of business and geographically. While our CODMs evaluate results in a number of different ways, the line of business management structure is the primary basis for which the allocation of resources and financial results are assessed. The tabular information below presents financial information that is provided to our CODMs for their review and assists our CODMs with evaluating the company’s performance and allocating company resources.


ORCL 14.SEGMENT INFORMATION

We have three businesses—cloud and license, hardware and services—each of which is comprised of a single operating segment. All three of our businesses market and sell our offerings globally to businesses of many sizes, government agencies, educational institutions and resellers with a worldwide sales force positioned to offer the combinations that best meet customer needs.


ORCL 14.SEGMENT INFORMATION

Our cloud and license business engages in the sale, marketing and delivery of our enterprise applications and infrastructure technologies through cloud and on-premise deployment models including our cloud services and license support offerings; and our cloud license and on-premise license offerings. Cloud services and license support revenues are generated from offerings that are typically contracted with customers directly, billed to customers in advance, delivered to customers over time with our revenue recognition occurring over the contractual terms and renewed by customers upon completion of the contractual terms. Cloud services and license support contracts provide customers with access to the latest updates to the applications and infrastructure technologies as they become available and for which the customer contracted and also include related technical support services over the contractual term. Cloud license and on-premise license revenues represent fees earned from granting customers licenses, generally on a perpetual basis, to use our database and middleware and our applications software products within cloud and on-premise IT environments. We generally recognize revenues at the point in time the software is made available to the customer to download and use, which typically is immediate upon signature of the license


ORCL Index to Financial Statements

contract. In each fiscal year, our cloud and license business’ contractual activities are typically highest in our fourth fiscal quarter and the related cash flows are typically highest in the following quarter (i.e., in the first fiscal quarter of the next fiscal year) as we receive payments from these contracts.


ORCL Index to Financial Statements

Our hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Our hardware business also offers hardware support, which provides customers with software updates for the software components that are essential to the functionality of their hardware products and can also include product repairs, maintenance services and technical support services that are typically delivered and recognized ratably over the contractual term.


ORCL Index to Financial Statements

Our services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies.


ORCL Index to Financial Statements

We do not track our assets for each business. Consequently, it is not practical to show assets by operating segment.


ORCL Index to Financial Statements

The following table presents summary results for each of our three businesses for each of fiscal 2024, 2023 and 2022: ########Year Ended May 31,#### (in millions)####2024####2023####2022 Cloud and license:############ Revenues##$##44,464##$##41,086##$##36,052 Cloud services and license support expenses####8,783####7,222####4,915 Sales and marketing expenses####7,167####7,738####7,054 Margin(1)##$##28,514##$##26,126##$##24,083 Hardware:############ Revenues##$##3,066##$##3,274##$##3,183 Hardware products and support expenses####855####1,011####944 Sales and marketing expenses####296####331####361 Margin(1)##$##1,915##$##1,932##$##1,878 Services:############ Revenues##$##5,431##$##5,594##$##3,205 Services expenses####4,515####4,490####2,539 Margin(1)##$##916##$##1,104##$##666 Totals:############ Revenues##$##52,961##$##49,954##$##42,440 Expenses####21,616####20,792####15,813 Margin(1)##$##31,345##$##29,162##$##26,627


ORCL Index to Financial Statements

(1)The margins reported reflect only the direct controllable costs of each line of business and do not include allocations of research and development, general and administrative and certain other allocable expenses, net. Additionally, the margins reported above do not reflect amortization of intangible assets, acquisition related and other expenses, restructuring expenses, stock-based compensation, interest expense or certain other non-operating expenses, net. Refer to the table below for a reconciliation of our total margin for operating segments to our income before income taxes as reported per our consolidated statements of operations.


ORCL Index to Financial Statements

The following table reconciles total margin for operating segments to income before income taxes: ##########Year Ended May 31,######## (in millions)####2024######2023######2022## Total margin for operating segments##$##31,345####$##29,162####$##26,627## Research and development####(8,915##)####(8,623##)####(7,219##) General and administrative####(1,548##)####(1,579##)####(1,317##) Amortization of intangible assets####(3,010##)####(3,582##)####(1,150##) Acquisition related and other####(314##)####(190##)####(4,713##) Restructuring####(404##)####(490##)####(191##) Stock-based compensation for operating segments####(1,382##)####(1,201##)####(735##) Expense allocations and other, net####(419##)####(404##)####(376##) Interest expense####(3,514##)####(3,505##)####(2,755##) Non-operating expenses, net####(98##)####(462##)####(522##) Income before income taxes##$##11,741####$##9,126####$##7,649##


ORCL Disaggregation of Revenues

We have considered information that is regularly reviewed by our CODMs in evaluating financial performance and disclosures presented outside of our financial statements in our earnings releases and used in investor presentations to disaggregate revenues to depict how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. The principal category we use to disaggregate revenues is the nature of our products and services as presented in our consolidated statements of operations.


ORCL Disaggregation of Revenues (1)Comprised of Europe, the Middle East and Africa

The following table is a summary of our total revenues by geographic region: ########Year Ended May 31,#### (in millions)####2024####2023####2022 Americas##$##33,122##$##31,226##$##23,679 EMEA(1)####13,030####12,109####12,011 Asia Pacific####6,809####6,619####6,750 Total revenues##$##52,961##$##49,954##$##42,440


The following table presents our cloud services and license support revenues by offerings: ########Year Ended May 31,#### (in millions)####2024####2023####2022 Cloud services##$##19,774##$##15,881##$##10,809 License support####19,609####19,426####19,365 Total cloud services and license support revenues##$##39,383##$##35,307##$##30,174


The following table presents our cloud services and license support revenues by applications and infrastructure ecosystems: ########Year Ended May 31,#### (in millions)####2024####2023####2022 Applications cloud services and license support##$##18,172##$##16,651##$##12,612 Infrastructure cloud services and license support####21,211####18,656####17,562 Total cloud services and license support revenues##$##39,383##$##35,307##$##30,174


ORCL Geographic Information

Disclosed in the table below is geographic information for each country that comprised greater than three percent of our total revenues for any of fiscal 2024, 2023 or 2022: ################As of and for the Year Ended May 31,############## ######2024##########2023##########2022#### (in millions)####Revenues######Long-Lived Assets(1)####Revenues######Long-Lived Assets(1)####Revenues######Long-Lived Assets(1) U.S.##$##29,055####$##24,798##$##27,535####$##19,322##$##20,246####$##10,300 United Kingdom####2,423######1,164####2,159######905####2,335######805 Germany####1,794######1,192####1,755######940####1,799######813 Japan####1,662######1,144####1,681######770####1,847######788 Other countries####18,027######3,962####16,824######3,626####16,213######3,438 Total##$##52,961####$##32,260##$##49,954####$##25,563##$##42,440####$##16,144


ORCL Geographic Information

(1)Long-lived assets exclude goodwill, intangible assets, non-marketable investments and deferred taxes, which are not allocated to specific geographic locations as it is impracticable to do so.


ORCL 15.EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding restricted stock-based awards, stock options and shares issuable under the Purchase Plan as applicable pursuant to the treasury stock method. The following table sets forth the computation of basic and diluted earnings per share: ########Year Ended May 31,#### (in millions, except per share data)####2024####2023####2022 Net income##$##10,467##$##8,503##$##6,717 Weighted-average common shares outstanding####2,744####2,696####2,700 Dilutive effect of employee stock plans####79####70####86 Dilutive weighted-average common shares outstanding####2,823####2,766####2,786 Basic earnings per share##$##3.82##$##3.15##$##2.49 Diluted earnings per share##$##3.71##$##3.07##$##2.41 Shares subject to anti-dilutive restricted stock-based awards and stock options excluded from calculation(1)####27####50####34


ORCL 15.EARNINGS PER SHARE

(1)These weighted shares relate to anti-dilutive restricted service based stock-based awards as calculated using the treasury stock method and contingently issuable shares pursuant to PSOs arrangements. Such shares could be dilutive in the future. See Note 12 for information regarding the exercise prices of our outstanding, unexercised stock options.


ORCL Derivative Litigation Concerning Oracle’s NetSuite Acquisition

On May 3 and July 18, 2017, two alleged stockholders filed separate derivative lawsuits in the Court of Chancery of the State of Delaware, purportedly on Oracle’s behalf. Thereafter, the court consolidated the two derivative cases and designated the July 18, 2017 complaint as the operative complaint. The consolidated lawsuit was brought against all the then-current members and one former member of our Board of Directors, and Oracle as a nominal defendant. Plaintiff alleged that the defendants breached their fiduciary duties by causing Oracle to agree to purchase NetSuite Inc. at an excessive price. The complaint sought (and the operative complaint continues to seek) declaratory relief, unspecified monetary damages (including interest) and attorneys’ fees and costs. The defendants filed a motion to dismiss, which the court denied on March 19, 2018.


ORCL Index to Financial Statements

On May 4, 2018, our Board of Directors established a Special Litigation Committee (SLC) to investigate the allegations in this derivative action. Three non-employee directors served on the SLC. On August 15, 2019, the SLC filed a letter with the court, stating that the SLC believed that plaintiff should be allowed to proceed with the derivative litigation on behalf of Oracle. After the SLC advised the Board that it had fulfilled its duties and obligations, the Board withdrew the SLC’s authority, except that the SLC maintained certain authority to respond to discovery requests in the litigation.


ORCL Index to Financial Statements

After plaintiff filed the July 18, 2017 complaint, an additional plaintiff joined the case. Plaintiffs filed several amended complaints, and filed their most recent amended complaint on December 11, 2020. The final complaint asserts claims for breach of fiduciary duty against our Chief Executive Officer, our Chief Technology Officer, the estate of Mark Hurd (our former Chief Executive Officer who passed away on October 18, 2019) and two other members of our Board of Directors. Oracle is named as a nominal defendant. On December 11, 2020, the estate of Mark Hurd and the two other members of our Board of Directors moved to dismiss this complaint. On June 21, 2021, the court granted this motion as to the estate of Mark Hurd and one Board member and denied the motion as to the other Board member, who filed an answer to the complaint on August 9, 2021. On December 28, 2020, our Chief Executive Officer, our Chief Technology Officer and Oracle as a nominal defendant filed answers to the operative complaint.


ORCL Index to Financial Statements

Trial commenced on July 18, 2022, and on November 18, 2022, the court held a final hearing on the parties’ post-trial briefing. On December 27, 2022, the court “so ordered” a stipulation, dismissing the Board member from this action. On May 12, 2023, the court issued its trial ruling, finding for defendants and rejecting plaintiffs’ claims. The court entered judgment for defendants on March 5, 2024. On April 2, 2024, plaintiffs filed a notice of appeal, appealing the court’s trial ruling and judgment and certain discovery decisions relating to the SLC. On May 2, 2024, plaintiffs filed their opening appellate brief. On June 3, 2024, our Chief Executive Officer and Chief Technology Officer filed their opposition brief, and the SLC filed an opposition brief on the discovery issues. Plaintiffs’ reply is due on June 25, 2024. No hearing date has been set.


ORCL Index to Financial Statements

While Oracle continues to evaluate these claims, we do not believe these matters will have a material impact on our financial position or results of operations.


ORCL Derivative Litigation Concerning Oracle’s Cloud Business

On February 12 and May 6, 2019, two stockholder derivative lawsuits were filed in the U.S. District Court for the Northern District of California. The cases were consolidated, and on July 8, 2019, a single plaintiff filed a consolidated complaint. The consolidated complaint brought various claims relating to a Rule 10b-5 class action that was filed in the same court on August 10, 2018, and which was settled for a payment by Oracle of $17,500,000. That matter is now concluded. In the Rule 10b-5 class action, plaintiff alleged Oracle and certain Oracle officers made or were responsible for false and misleading statements regarding Oracle’s cloud business.


Plaintiff in the derivative action filed an amended complaint on June 4, 2021. The derivative suit is brought by an alleged stockholder of Oracle, purportedly on Oracle’s behalf, against our Chief Technology Officer, our Chief Executive Officer and the estate of Mark Hurd. Plaintiff claims that the alleged actions described in the 10b-5 class action caused harm to Oracle, including harming Oracle because Oracle allegedly repurchased its own stock at an inflated price. Plaintiff also claims that defendants violated their fiduciary duties of candor, good faith, loyalty, and due care by failing to prevent this alleged harm. Plaintiff also brings derivative claims for violations of federal securities laws. Plaintiff seeks a ruling that this case may proceed as a derivative action, a finding that defendants are liable for breaching their fiduciary duties, an award of damages to Oracle, an order directing defendants to enact corporate reforms, attorneys’ fees and costs, and unspecified relief. Beginning on June 14, 2021, the court “so ordered” several stipulations from the parties, staying this case. The parties have reached an agreement in principle to settle this case, under which Oracle will implement certain corporate governance measures, which shall remain in place for five years, and Oracle will pay plaintiffs’ attorneys’ fees and costs of no more than $700,000. On April 5, 2024, plaintiffs filed a motion for preliminary approval of the proposed settlement, and the court will hold a preliminary fairness hearing on the proposed settlement on August 8, 2024.


ORCL Other Litigation

We are party to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business, including proceedings and claims that relate to acquisitions we have completed or to companies we have acquired or are attempting to acquire. While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized, if any.


ORCL Form 10-K Summary

None.


ORCL INDEX OF EXHIBITS

The following exhibits are filed or furnished herewith or are incorporated by reference to exhibits previously filed with the U.S. Securities and Exchange Commission. ########Incorporated by Reference#### Exhibit No.##Exhibit Description##Form##File No.##Exhibit##Filing Date##Filed By 3.01##Amended and Restated Certificate of Incorporation of Oracle Corporation and Certificate of Amendment of Amended and Restated Certificate of Incorporation of Oracle Corporation##8-K 12G3##000-51788##3.1##2/6/06##Oracle Corporation 3.02##Amended and Restated Bylaws of Oracle Corporation##8-K##001-35992##3.02##11/17/23##Oracle Corporation 4.01##Specimen Certificate of Oracle Corporation’s Common Stock##S-3 ASR##333-166643##4.4##5/7/10##Oracle Corporation 4.02##Indenture dated January 13, 2006, among Ozark Holding Inc., Oracle Corporation and Citibank, N.A.##8-K##000-14376##10.34##1/20/06##Oracle Systems Corporation 4.03##First Supplemental Indenture dated May 9, 2007 among Oracle Corporation, Citibank, N.A. and The Bank of New York Trust Company, N.A.##S-3 ASR##333-142796##4.3##5/10/07##Oracle Corporation 4.04##Form of 6.50% Note due 2038, together with Officers’ Certificate issued April 9, 2008 setting forth the terms of the Note##8-K##000-51788##4.09##4/8/08##Oracle Corporation 4.05##Form of 6.125% Note due 2039, together with Officers’ Certificate issued July 8, 2009 setting forth the terms of the Note##8-K##000-51788##4.08##7/8/09##Oracle Corporation 4.06##Form of 2040 Note, together with Officers’ Certificate issued July 19, 2010 setting forth the terms of the Note##10-Q##000-51788##4.08##9/20/10##Oracle Corporation


ORCL Index to Financial Statements

########Incorporated by Reference#### Exhibit No.##Exhibit Description##Form##File No.##Exhibit##Filing Date##Filed By 4.07##Form of New 2040 Note##S-4##333-176405##4.5##8/19/11##Oracle Corporation 4.08##Form of 3.125% Note due 2025, together with Officers’ Certificate issued July 10, 2013 setting forth the terms of the Note##8-K##001-35992##4.11##7/10/13##Oracle Corporation 4.09##Forms of 3.40% Note due 2024, 4.30% Note due 2034 and 4.50% Note due 2044, together with Officers’ Certificate issued July 8, 2014 setting forth the terms of the Notes##8-K##001-35992##4.13##7/8/14##Oracle Corporation 4.10##Forms of 2.95% Notes due 2025, 3.25% Notes due 2030, 3.90% Notes due 2035, 4.125% Notes due 2045 and 4.375% Notes due 2055, together with Officers’ Certificate issued May 5, 2015 setting forth the terms of the Notes##8-K##001-35992##4.13##5/5/15##Oracle Corporation 4.11##Forms of 2.65% Notes due 2026, 3.85% Notes due 2036 and 4.00% Notes due 2046, together with Officers’ Certificate issued July 7, 2016 setting forth the terms of the Notes##8-K##001-35992##4.1##7/7/16##Oracle Corporation 4.12##Forms of 2.950% Notes due 2024, 3.250% Notes due 2027, 3.800% Notes due 2037 and 4.000% Notes due 2047, together with Officers’ Certificate issued November 9, 2017 setting forth the terms of the Notes##8-K##001-35992##4.1##11/9/17##Oracle Corporation


ORCL Index to Financial Statements

########Incorporated by Reference#### Exhibit No.##Exhibit Description##Form##File No.##Exhibit##Filing Date##Filed By 4.13##Forms of 2.500% Notes due 2025, 2.800% Notes due 2027, 2.950% Notes due 2030, 3.600% Notes due 2040, 3.600% Notes due 2050 and 3.850% Notes due 2060, together with Officers’ Certificate issued April 1, 2020 setting forth the terms of the Notes##8-K##001-35992##4.1##4/1/20##Oracle Corporation 4.14##Forms of 1.650% Notes due 2026, 2.300% Notes due 2028, 2.875% Notes due 2031, 3.650% Notes due 2041, 3.950% Notes due 2051 and 4.100% Notes due 2061, together with Officers’ Certificate issued March 24, 2021 setting forth the terms of the Notes##8-K##001-35992##4.1##3/24/21##Oracle Corporation 4.15##Forms of 5.800% Notes due 2025, 6.150% Notes due 2029, 6.250% Notes due 2032 and 6.900% Notes due 2052, together with an Officers’ Certificate issued November 9, 2022 setting forth the terms of the Notes##8-K##001-35992##4.1##11/9/22##Oracle Corporation 4.16##Forms of 4.500% Notes due 2028, 4.650% Notes due 2030, 4.900% Notes due 2033 and 5.550% Notes due 2053, together with an Officers’ Certificate issued February 6, 2023 setting forth the terms of the Notes##8-K##001-35992##4.1##2/6/23##Oracle Corporation 4.17##Description of Oracle Corporation’s Securities Registered Under Section 12 of the Exchange Act##10-K##001-35992##4.15##6/21/19##Oracle Corporation 10.01*##Oracle Corporation Deferred Compensation Plan, as amended and restated as of July 1, 2015##10-Q##001-35992##10.01##9/18/15##Oracle Corporation 10.02*##Oracle Corporation Employee Stock Purchase Plan (1992), as amended and restated as of May 3, 2022##10-K##001-35992##10.02##6/21/22##Oracle Corporation


ORCL Index to Financial Statements

########Incorporated by Reference#### Exhibit No.##Exhibit Description##Form##File No.##Exhibit##Filing Date##Filed By 10.03*##Oracle Corporation Amended and Restated 1993 Directors’ Stock Plan, as amended and restated on April 29, 2016##10-K##001-35992##10.03##6/22/16##Oracle Corporation 10.04*##Amended and Restated 2000 Long-Term Equity Incentive Plan, as approved on November 15, 2017##8-K##001-35992##10.04##11/17/17##Oracle Corporation 10.05*##Form of Stock Option Agreement under the Amended and Restated 2000 Long-Term Equity Incentive Plan for U.S. Executive Vice Presidents and Section 16 Officers##10-Q##001-35992##10.05##9/18/17##Oracle Corporation 10.06*##Form of Stock Option Agreement under the Oracle Corporation Amended and Restated 1993 Directors’ Stock Plan##10-K##001-35992##10.06##6/25/15##Oracle Corporation 10.07*##Form of Indemnity Agreement for Directors and Executive Officers##10-Q##000-51788##10.07##12/23/11##Oracle Corporation 10.08*##Oracle Corporation Amended and Restated Executive Bonus Plan, as amended and restated as of February 12, 2019##10-Q##001-35992##10.09##3/18/19##Oracle Corporation 10.09*##Oracle Corporation Stock Unit Award Deferred Compensation Plan, as amended and restated as of July 1, 2015##10-Q##001-35992##10.15##9/18/15##Oracle Corporation 10.10*##Form of Restricted Stock Unit Award Agreement under the Oracle Corporation Amended and Restated 1993 Directors’ Stock Plan##10-K##001-35992##10.17##6/25/15##Oracle Corporation 10.11*##Form of Performance-Based Stock Option Agreement under the Amended and Restated 2000 Long-Term Equity Incentive Plan for Named Executive Officers##10-Q##001-35992##10.16##9/18/17##Oracle Corporation


ORCL Index to Financial Statements

########Incorporated by Reference#### Exhibit No.##Exhibit Description##Form##File No.##Exhibit##Filing Date##Filed By 10.12*##First Amendment to Performance-Based Stock Option Agreement with Lawrence J. Ellison and Safra A. Catz under the Amended and Restated 2000 Long-Term Equity Incentive Plan##8-K##001-35992##10.15##7/7/21##Oracle Corporation 10.13*##Form of Stock Unit Award Agreement under the Amended and Restated 2000 Long-Term Equity Incentive Plan for U.S. Employees (Including Section 16 Officers)##10-Q##001-35992##10.17##9/18/17##Oracle Corporation 10.14*##Form of Restricted Stock Unit Agreement under the 2020 Equity Incentive Plan for U.S. Employees##10-Q##001-35992##10.16##12/11/20##Oracle Corporation 10.15§##$6,000,000,000 5-Year Revolving Credit Agreement dated as of March 8, 2022 among Oracle Corporation and the lenders and agents named therein##10-Q##001-35992##10.16##3/11/22##Oracle Corporation 10.16§##$15,700,000,000 364-Day Delayed Draw Term Loan Credit Agreement dated as of March 8, 2022 among Oracle Corporation and the lenders and agents named therein##10-Q##001-35992##10.17##3/11/22##Oracle Corporation 10.17*##Oracle Corporation Amended and Restated 2020 Equity Incentive Plan, as approved on November 15, 2023##8-K##001-35992##10.18##11/17/23##Oracle Corporation 19##Oracle Corporation Insider Trading Policy########## 21.01##Subsidiaries of the Registrant##########


ORCL Index to Financial Statements

########Incorporated by Reference#### Exhibit No.##Exhibit Description##Form##File No.##Exhibit##Filing Date##Filed By 23.01##Consent of Independent Registered Public Accounting Firm########## 31.01##Rule 13a-14(a)/15d-14(a) Certification of Principal Executive and Financial Officer########## 32.01##Section 1350 Certification of Principal Executive and Financial Officer########## 97##Oracle Corporation Compensation Clawback Policy########## 99.01##$5,630,000,000 Term Loan Credit Agreement dated as of June 10, 2024 among Oracle Corporation and the lenders and agents named therein########## 101##Interactive Data Files Pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL: (1) Consolidated Balance Sheets as of May 31, 2024 and 2023, (2) Consolidated Statements of Operations for the years ended May 31, 2024, 2023 and 2022, (3) Consolidated Statements of Comprehensive Income for the years ended May 31, 2024, 2023 and 2022, (4) Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended May 31, 2024, 2023 and 2022, (5) Consolidated Statements of Cash Flows for the years ended May 31, 2024, 2023 and 2022 and (6) Notes to Consolidated Financial Statements##########


ORCL Index to Financial Statements

########Incorporated by Reference#### Exhibit No.##Exhibit Description##Form##File No.##Exhibit##Filing Date##Filed By 104##The cover page from the Company’s Annual Report on Form 10-K for the year ended May 31, 2024, formatted in Inline XBRL and included in Exhibit 101##########


ORCL Index to Financial Statements

* Indicates management contract or compensatory plan or arrangement.


ORCL Index to Financial Statements

§ Certain schedules and attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to provide, on a supplemental basis, a copy of any omitted schedules and attachments to the SEC or its staff upon its request.


ORCL Index to Financial Statements

Filed herewith.


ORCL Index to Financial Statements

Furnished herewith.


ORCL SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ####ORACLE CORPORATION## Date: June 20, 2024##By:####/s/ Safra A. Catz ######Safra A. Catz ######Chief Executive Officer and Director ######(Principal Executive and Financial Officer)


ORCL SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Name##Title##Date /s/ Safra A. Catz##Chief Executive Officer and Director (Principal Executive and Financial Officer)##June 20, 2024 Safra A. Catz#### /s/ Maria Smith##Executive Vice President, Chief Accounting Officer (Principal Accounting Officer)##June 20, 2024 Maria Smith#### /s/ Lawrence J. Ellison##Chairman of the Board of Directors and Chief Technology Officer##June 20, 2024 Lawrence J. Ellison#### /s/ Jeffrey O. Henley##Vice Chairman of the Board of Directors##June 20, 2024 Jeffrey O. Henley#### /s/ Awo Ablo##Director##June 20, 2024 Awo Ablo#### /s/ Jeffrey S. Berg##Director##June 20, 2024 Jeffrey S. Berg#### /s/ Michael J. Boskin##Director##June 20, 2024 Michael J. Boskin#### /s/ Bruce R. Chizen##Director##June 20, 2024 Bruce R. Chizen#### /s/ George H. Conrades##Director##June 20, 2024 George H. Conrades#### /s/ Rona A. Fairhead##Director##June 20, 2024 Rona A. Fairhead#### /s/ Renée J. James##Director##June 20, 2024 Renée J. James#### /s/ Charles W. Moorman IV##Director##June 20, 2024 Charles W. Moorman IV#### /s/ Leon E. Panetta##Director##June 20, 2024 Leon E. Panetta#### /s/ William G. Parrett##Director##June 20, 2024 William G. Parrett#### /s/ Naomi O. Seligman##Director##June 20, 2024 Naomi O. Seligman#### /s/ Vishal Sikka##Director##June 20, 2024 Vishal Sikka####


PG Business

The Procter & Gamble Company (the Company) is focused on providing branded products of superior quality and value to improve the lives of the world's consumers, now and for generations to come. The Company was incorporated in Ohio in 1905, having first been established as a New Jersey corporation in 1890, and was built from a business founded in Cincinnati in 1837 by William Procter and James Gamble.


PG Business

Additional information required by this item is incorporated herein by reference to Management's Discussion and Analysis (MD&A); and Notes 1 and 2 to our Consolidated Financial Statements. Unless the context indicates otherwise, the terms "Company," "P&G," "we," "our" or "us" as used herein refer to The Procter & Gamble Company (the registrant) and its subsidiaries. Throughout this Form 10-K, we incorporate by reference information from other documents filed with the Securities and Exchange Commission (SEC).


PG Business

The Company's Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments thereto, are filed electronically with the SEC. The SEC maintains an internet site that contains these reports at: www.sec.gov. Reports can also be accessed through links from our website at: www.pginvestor.com. P&G includes the website link solely as a textual reference and the information on our website is not incorporated by reference into this report.


PG Business

Copies of these reports are also available, without charge, by contacting EQ Shareowner Services, 1100 Centre Pointe Curve, Suite 101, Mendota, MN 55120-4100.


PG Financial Information about Segments

Information about our reportable segments can be found in the MD&A and Note 2 to our Consolidated Financial Statements.


PG Narrative Description of Business

Business Model. Our business model is built to deliver balanced top- and bottom-line growth and value creation. We rely on the continued growth and success of existing brands and products, as well as the creation of new innovative products and brands. We offer products in markets and industry segments that are highly competitive. Our products are sold in approximately 180 countries and territories through numerous channels as well as direct-to-consumer. Our growth strategy is to deliver meaningful and noticeable superiority across five key vectors of our consumer proposition - product performance, packaging, brand communication, retail execution and consumer and customer value. We use our research and development (R&D) and consumer insights to provide superior products and packaging. We utilize our marketing and online presence to deliver superior brand messaging to our consumers. We partner with our customers to deliver superior retail execution, both in-store and online. In conjunction with the above vectors, we provide superior value to consumers and our retail customers in each price tier in which we compete. Productivity improvement is also critical to delivering our objectives of balanced top- and bottom-line growth and value creation.


PG Narrative Description of Business

Key Product Categories. Information on key product categories can be found in the MD&A and Note 2 to our Consolidated Financial Statements.


PG Narrative Description of Business

Key Customers. Our customers include mass merchandisers, e-commerce (including social commerce) channels, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores (including airport duty-free stores), high-frequency stores, pharmacies, electronics stores and professional channels. We also sell direct to consumers. Sales to Walmart Inc. and its affiliates represent approximately 15% of our total sales in 2023, 2022 and 2021. No other customer represents more than 10% of our total sales. Our top ten customers accounted for 40% of our total net sales in 2023 and 39% in 2022 and 2021.


PG Narrative Description of Business

Sources and Availability of Materials. Almost all of the raw and packaging materials used by the Company are purchased from third parties, some of whom are single-source suppliers. We produce certain raw materials, primarily chemicals, for further use in the manufacturing process. In addition, fuel, natural gas and derivative products are important commodities consumed in our manufacturing processes and in the transportation of input materials and finished products. The prices we pay for materials and other commodities are subject to fluctuation. When prices for these items change, we may or may not pass the change to our customers. The Company purchases a substantial variety of other raw and packaging materials, none of which are material to our business taken as a whole.


PG Narrative Description of Business

Trademarks and Patents. We own or have licenses under patents and registered trademarks, which are used in connection with our activity in all businesses. Some of these patents or licenses cover significant product formulation and processes used to manufacture our products. The trademarks are important to the overall marketing and branding of our products. All major trademarks in each business are registered. In part, our success can be attributed to the existence and continued protection of these trademarks, patents and licenses.


PG Narrative Description of Business

Competitive Condition. The markets in which our products are sold are highly competitive. Our products compete against similar products from many large and small companies, including well-known global competitors. In many of the markets and industry segments in which we sell our products, we compete against other branded products as well as retailers' private-label brands. We are well positioned in the industry segments and markets in which we operate, often holding a leadership or significant market share position. We support our products with advertising, promotions and other marketing vehicles to build awareness and trial of our brands and products in conjunction with our sales force. We believe this combination provides the


PG 2 The Procter & Gamble Company

most efficient method of marketing for these types of products. Product quality, performance, value and packaging are also important differentiating factors.


PG 2 The Procter & Gamble Company

Government Regulation. Our Company is subject to a wide variety of laws and regulations across the countries in which we do business. In the United States, many of our products and manufacturing operations are subject to one or more federal or state regulatory agencies, including the U.S. Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), the Federal Trade Commission (FTC) and the Consumer Product Safety Commission (CPSC). We are also subject to anti-corruption laws and regulations, such as the U.S. Foreign Corrupt Practices Act, and antitrust and competition laws and regulations that govern our dealings with suppliers, customers, competitors and government officials.


PG 2 The Procter & Gamble Company

In addition, many foreign jurisdictions in which we do business have regulations and regulatory bodies that govern similar aspects of our operations and products, in some cases to an even more significant degree. We are also subject to expanding laws and regulations related to environmental protection and other sustainability-related matters, non-financial reporting and diligence, labor and employment, trade, taxation and data privacy and protection, including the European Union’s General Data Protection Regulation (GDPR) and similar regulations in states within the United States and in countries around the world.


PG 2 The Procter & Gamble Company

The Company has in place compliance programs and internal and external experts to help guide our business in complying with these and other existing laws and regulations that apply to us around the globe; and we have made, and plan to continue making, necessary expenditures for compliance with these laws and regulations. We also expect that our many suppliers, consultants and other third parties working on our behalf share our commitment to compliance, and we have policies and procedures in place to manage these relationships, though they inherently involve a lesser degree of control over operations and governance. We do not expect that the Company’s expenditures for compliance with current government regulations, including current environmental regulations, will have a material effect on our total capital expenditures, earnings or competitive position in fiscal year 2024 as compared to prior periods.


PG 2 The Procter & Gamble Company

Human Capital. Our employees are a key source of competitive advantage. Their actions, guided by our Purpose, Values and Principles (PVPs), are critical to the long-term success of our business. We aim to retain our talented employees by offering competitive compensation and benefits, strong career development and a respectful and inclusive culture that provides equal opportunity for all.


PG 2 The Procter & Gamble Company

Our Board of Directors, through the Compensation and Leadership Development Committee (C&LD Committee), provides oversight of the Company’s policies and strategy relating to talent including diversity, equality and inclusion as well as the Company’s compensation principles and practices. The C&LD Committee also evaluates and approves the Company’s compensation plans, policies and programs applicable to our senior executives.


PG Employees

As of June 30, 2023, the Company had approximately 107,000 employees, an increase of 1% versus the prior year due primarily to business growth. The total number of employees is an estimate of total Company employees excluding interns, co-ops, contractors and employees of joint ventures. 49% of our employees are in manufacturing roles and 27% of our employees are located in the United States. 41% of our global employees are women and 30% of our U.S. employees identify as multicultural.


PG Training and Development

We focus on attracting, developing and retaining skilled and diverse talent, both from universities and the broader market. We recruit from among the best universities across markets in which we compete and are generally able to select from the top talent. We focus on developing our employees by providing a variety of job experiences, training programs and skill development opportunities. Given our develop-from-within model for staffing most of our senior leadership positions, it is particularly important for us to ensure holistic growth and full engagement of our employees.


PG Diversity, Equality and Inclusion

As a consumer products company, we believe that it is important for our workforce to reflect the diversity of our consumers worldwide. We also seek to foster an inclusive work environment where each individual can bring their authentic self, which helps drive innovation and enables us to better serve our consumers. We aspire to achieve equal gender representation globally and at key management and leadership levels. Within the U.S. workforce, our aspiration is to achieve 40% multicultural representation overall as well as at management and leadership levels.


PG Compensation and Benefits

Market-competitive compensation and reward programs are critical elements of our employee value equation to attract and retain the best talent. Our total rewards programs are based on the principles of paying for performance, paying competitively versus peer companies that we compete with for talent in the marketplace and focusing on long-term success through a combination of short-term and long-term incentive programs. We also offer competitive benefit programs, including retirement plans and health insurance in line with local country practices with flexibility to accommodate the needs of a diverse workforce.


PG Compensation and Benefits

Sustainability. Environmental sustainability is integrated into our business strategy to offer consumers irresistibly superior products that are more sustainable. Our aim is to deliver balanced top- and bottom-line growth, value creation and key sustainability objectives. In 2021, the Company announced a 2040 net zero ambition and published a Climate Transition Action


PG The Procter & Gamble Company 3

Plan, which describes the Company’s ongoing efforts toward reducing greenhouse gas emissions across scopes 1 and 2 and elements of scope 3. This includes a long-term objective of net zero emissions for scopes 1 and 2, elements of scope 3 and interim goals to help us pace our progress. The Company has also declared goals towards using renewable electricity for our operations, reducing use of virgin petroleum-based plastic in packaging, increasing the recyclability or reusability of packaging, responsible sourcing of key forest-based commodities, improving efficiency of water usage in our operations and driving a global portfolio of water restoration projects to address water scarcity.


PG The Procter & Gamble Company 3

We use the standards and guidelines of the Global Reporting Initiative, Sustainability Accounting Standards Board (SASB) industry specific standards and the Task Force on Climate-related Financial Disclosures (TCFD) to inform our sustainability and related disclosures included in this Annual Report, our Proxy Statement and our sustainability reports. The “materiality” thresholds in those standards and guidelines may differ from the concept of “materiality” for purposes of the federal securities laws and disclosures required by the Commission’s rules in this Annual Report. References to our sustainability reports and website are for informational purposes only and neither the sustainability reports nor the other information on our website is incorporated by reference into this Annual Report on Form 10-K. Additional detailed information on our sustainability efforts can be found on our website at https://pginvestor.com/esg.


PG Risk Factors

We discuss our expectations regarding future performance, events and outcomes, such as our business outlook and objectives in this Form 10-K, as well as in our quarterly and annual reports, current reports on Form 8-K, press releases and other written and oral communications. All statements, except for historical and present factual information, are “forward-looking statements” and are based on financial data and business plans available only as of the time the statements are made, which may become outdated or incomplete. We assume no obligation to update any forward-looking statements as a result of new information, future events or other factors, except to the extent required by law. Forward-looking statements are inherently uncertain, and investors must recognize that events could significantly differ from our expectations.


PG Risk Factors

The following discussion of “risk factors” identifies significant factors that may adversely affect our business, operations, financial position or future financial performance. This information should be read in conjunction with Management's Discussion and Analysis and the Consolidated Financial Statements and related Notes incorporated in this report. The following discussion of risks is not all inclusive but is designed to highlight what we believe are important factors to consider when evaluating our expectations. These and other factors could cause our future results to differ from those in the forward-looking statements and from historical trends, perhaps materially.


PG MACROECONOMIC CONDITIONS AND RELATED FINANCIAL RISKS

Our business is subject to numerous risks as a result of having significant operations and sales in international markets, including foreign currency fluctuations, currency exchange or pricing controls and localized volatility.


We are a global company, with operations in approximately 70 countries and products sold in approximately 180 countries and territories around the world. We hold assets, incur liabilities, generate sales and pay expenses in a variety of currencies other than the U.S. dollar, and our operations outside the U.S. generate more than 50% of our annual net sales. Fluctuations in exchange rates for foreign currencies have and could continue to reduce the U.S. dollar value of sales, earnings and cash flows we receive from non-U.S. markets, increase our supply costs (as measured in U.S. dollars) in those markets, negatively impact our competitiveness in those markets or otherwise adversely impact our business results or financial condition. Further, we have a significant amount of foreign currency debt and derivatives as part of our capital markets activities. The maturity cash outflows of these instruments could be adversely impacted by significant appreciation of foreign currency exchange rates (particularly the Euro), which could adversely impact our overall cash flows. Moreover, discriminatory or conflicting fiscal or trade policies in different countries, including changes to tariffs and existing trade policies and agreements, could adversely affect our results. See also the Results of Operations and Cash Flow, Financial Condition and Liquidity sections of the MD&A and the Consolidated Financial Statements and related Notes.


We also have businesses and maintain local currency cash balances in a number of countries with currency exchange, import authorization, pricing or other controls or restrictions, such as Egypt, Argentina and Pakistan. Our results of operations, financial condition and cash flows could be adversely impacted if we are unable to successfully manage such controls and restrictions, continue existing business operations and repatriate earnings from overseas, or if new or increased tariffs, quotas, exchange or price controls, trade barriers or similar restrictions are imposed on our business.


Additionally, our business, operations or employees have been and could continue to be adversely affected (including by the need to de-consolidate or even exit certain businesses in particular countries) by geopolitical conflicts, political volatility, trade controls, labor market disruptions or other crises or vulnerabilities in individual countries or regions. This could include political instability, upheaval or acts of war (such as the Russia-Ukraine War) and the related government and other entity responses, broad economic instability or sovereign risk related to a default by or deterioration in the creditworthiness of local governments, particularly in emerging markets.


Uncertain economic or social conditions may adversely impact demand for our products or cause our customers and other business partners to suffer financial hardship, which could adversely impact our business.


Our business could be negatively impacted by reduced demand for our products related to one or more significant local, regional or global economic or social disruptions. These disruptions have included and may in the future include: a slow-down,


PG 4 The Procter & Gamble Company

recession or inflationary pressures in the general economy; reduced market growth rates; tighter credit markets for our suppliers, vendors or customers; a significant shift in government policies; significant social unrest; the deterioration of economic relations between countries or regions; potential negative consumer sentiment toward non-local products or sources; or the inability to conduct day-to-day transactions through our financial intermediaries to pay funds to or collect funds from our customers, vendors and suppliers. Additionally, these and other economic conditions may cause our suppliers, distributors, contractors or other third-party partners to suffer financial or operational difficulties that they cannot overcome, resulting in their inability to provide us with the materials and services we need, in which case our business and results of operations could be adversely affected. Customers may also suffer financial hardships due to economic conditions such that their accounts become uncollectible or are subject to longer collection cycles. In addition, if we are unable to generate sufficient sales, income and cash flow, it could affect the Company’s ability to achieve expected share repurchase and dividend payments.


PG 4 The Procter & Gamble Company

Disruptions in credit markets or to our banking partners or changes to our credit ratings may reduce our access to credit or overall liquidity.


PG 4 The Procter & Gamble Company

A disruption in the credit markets or a downgrade of our current credit rating could increase our future borrowing costs and impair our ability to access capital and credit markets on terms commercially acceptable to us, which could adversely affect our liquidity and capital resources or significantly increase our cost of capital. In addition, we rely on top-tier banking partners in key markets around the world, who themselves face economic, societal, political and other risks, for access to credit and to facilitate collection, payment and supply chain finance programs. A disruption to one or more of these top-tier partners could impact our ability to draw on existing credit facilities or otherwise adversely affect our cash flows or the cash flows of our customers and vendors.


PG 4 The Procter & Gamble Company

Changing political and geopolitical conditions could adversely impact our business and financial results.


PG 4 The Procter & Gamble Company

Changes in the political conditions in markets in which we manufacture, sell or distribute our products, as well as changing geopolitical conditions, may be difficult to predict and may adversely affect our business and financial results. Results of elections, referendums, sanctions or other political processes and pressures in certain markets in which our products are manufactured, sold or distributed could create uncertainty regarding how existing governmental policies, laws and regulations may change, including with respect to sanctions, taxes, tariffs, import and export controls and the general movement of goods, materials, services, capital, data and people between countries. The potential implications of such uncertainty, which include, among others, exchange rate fluctuations, new or increased tariffs, trade barriers and market contraction, could adversely affect the Company’s results of operations and cash flows.


PG 4 The Procter & Gamble Company

The Company operates a global business with sales, manufacturing, distribution and research and development organizations globally that contribute to our overall growth. If geopolitical tensions and trade controls were to increase or disrupt our business in markets where we have significant sales or operations, including disruptions due to governmental responses to such conflicts (such as the imposition of sanctions, retaliatory tariffs, increased business licensing requirements or limitations on profits), such disruptions could adversely impact our business, financial condition, results of operations and cash flows.


PG 4 The Procter & Gamble Company

The war between Russia and Ukraine has adversely impacted and could continue to adversely impact our business and financial results.


PG 4 The Procter & Gamble Company

The war between Russia and Ukraine has negatively impacted, and the situation it generates may continue to negatively impact, our operations. Beginning in March 2022, the Company reduced its product portfolio, discontinued new capital investments and suspended media, advertising and promotional activity in Russia. Future impacts to the Company are difficult to predict due to the high level of uncertainty as to how the overall situation will evolve. Within Ukraine, there is a possibility of physical damage and destruction of our two manufacturing facilities, our distribution centers or those of our customers. We may not be able to operate our manufacturing sites and source raw materials from our suppliers or ship finished products to our customers. Within Russia, we may reduce further or discontinue our operations due to sanctions and export controls and counter-sanctions, monetary, currency or payment controls, restrictions on access to financial institutions, supply and transportation challenges or other circumstances and considerations. Ultimately, these could result in loss of assets or impairments of our manufacturing plants and fixed assets or write-downs of other operating assets and working capital.