~~0000080424pg:ShaveCareMember2021-07-012021-09-30~~

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)


x			True			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, ~~2021~~2022


o			False			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

THE PROCTER & GAMBLE COMPANY

(Exact name of registrant as specified in its charter)

Ohio

1-434

31-0411980

(State of Incorporation)

(Commission File Number)

(I.R.S. Employer Identification Number)

One Procter & Gamble Plaza

Cincinnati

One Procter & Gamble Plaza, Cincinnati, Ohio

45202

(Address of principal executive offices)

(Zip Code)

(513) 983-1100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, without Par Value	PG	NYSE
~~2.000% Notes due 2021~~	~~PG21~~	~~NYSE~~
~~2.000% Notes due 2022~~	~~PG22B~~	~~NYSE~~
1.125% Notes due 2023	PG23A	NYSE
0.500% Notes due 2024	PG24A	NYSE
0.625% Notes due 2024	PG24B	NYSE
1.375% Notes due 2025	PG25	NYSE
0.110% Notes due 2026	PG26D	NYSE
4.875% EUR notes due May 2027	PG27A	NYSE
1.200% Notes due 2028	PG28	NYSE
1.250% Notes due 2029	PG29B	NYSE
1.800% Notes due 2029	PG29A	NYSE
6.250% GBP notes due January 2030	PG30	NYSE
0.350% Notes due 2030	PG30C	NYSE
0.230% Notes due 2031	PG31A	NYSE
5.250% GBP notes due January 2033	PG33	NYSE
1.875% Notes due 2038	PG38	NYSE
0.900% Notes due 2041	PG41	NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

False

Emerging growth company

False

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ False

There were ~~2,419,947,819~~2,369,696,862 shares of Common Stock outstanding as of September 30, ~~2021.~~2022.

PART I. FINANCIAL INFORMATION


Item 1.			Financial Statements

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS


		Three Months Ended September 30				Three Months Ended September 30
Amounts in millions except per share amounts	Amounts in millions except per share amounts	2021		2020			Amounts in millions except per share amounts	2022		2021
NET SALES	NET SALES	$	20,338	$	19,318		NET SALES	$	20,612	$	20,338
Cost of products sold	Cost of products sold	10,365		9,142			Cost of products sold	10,846		10,365
Selling, general and administrative expense	Selling, general and administrative expense	4,950		4,895			Selling, general and administrative expense	4,827		4,950
OPERATING INCOME	OPERATING INCOME	5,023		5,281			OPERATING INCOME	4,939		5,023
Interest expense	Interest expense	(109)		(136)			Interest expense	(123)		(109)
Interest income	Interest income	11		10			Interest income	42		11
Other non-operating income, net	Other non-operating income, net	110		142			Other non-operating income, net	139		110
EARNINGS BEFORE INCOME TAXES	EARNINGS BEFORE INCOME TAXES	5,035		5,297			EARNINGS BEFORE INCOME TAXES	4,997		5,035
Income taxes	Income taxes	909		989			Income taxes	1,034		909
NET EARNINGS	NET EARNINGS	4,126		4,308			NET EARNINGS	3,963		4,126
Less: Net earnings attributable to noncontrolling interests	Less: Net earnings attributable to noncontrolling interests	14		31			Less: Net earnings attributable to noncontrolling interests	24		14
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE	NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE	$	4,112	$	4,277		NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE	$	3,939	$	4,112

NET EARNINGS PER SHARE (1)	NET EARNINGS PER SHARE (1)						NET EARNINGS PER SHARE (1)
Basic	Basic	$	1.66	$	1.69		Basic	$	1.62	$	1.66
Diluted	Diluted	$	1.61	$	1.63		Diluted	$	1.57	$	1.61

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	2,558.9		2,625.3			DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	2,503.6		2,558.9

(1)Basic net earnings per share and Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.

See accompanying Notes to Consolidated Financial Statements.

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


		Three Months Ended September 30				Three Months Ended September 30
Amounts in millions	Amounts in millions	2021		2020			Amounts in millions	2022		2021
NET EARNINGS	NET EARNINGS	$	4,126	$	4,308		NET EARNINGS	$	3,963	$	4,126
OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX	OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX						OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX
Foreign currency translation	Foreign currency translation	(465)		352			Foreign currency translation	(712)		(465)
Unrealized gains on investment securities		5		6
Unrealized gains/(losses) on defined benefit retirement plans		142		(69)
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX		(318)		289
Unrealized gains/(losses) on investment securities							Unrealized gains/(losses) on investment securities	(2)		5
Unrealized gains on defined benefit retirement plans							Unrealized gains on defined benefit retirement plans	87		142
TOTAL OTHER COMPREHENSIVE LOSS, NET OF TAX							TOTAL OTHER COMPREHENSIVE LOSS, NET OF TAX	(627)		(318)
TOTAL COMPREHENSIVE INCOME	TOTAL COMPREHENSIVE INCOME	3,808		4,597			TOTAL COMPREHENSIVE INCOME	3,336		3,808
Less: Total comprehensive income attributable to noncontrolling interests	Less: Total comprehensive income attributable to noncontrolling interests	14		36			Less: Total comprehensive income attributable to noncontrolling interests	19		14
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER & GAMBLE	TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER & GAMBLE	$	3,794	$	4,561		TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER & GAMBLE	$	3,317	$	3,794

See accompanying Notes to Consolidated Financial Statements.

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


Amounts in millions	Amounts in millions			September 30, 2021		June 30, 2021		Amounts in millions			September 30, 2022		June 30, 2022
Assets	Assets							Assets
CURRENT ASSETS	CURRENT ASSETS							CURRENT ASSETS
Cash and cash equivalents	Cash and cash equivalents			$	10,370	$	10,288	Cash and cash equivalents			$	6,710	$	7,214
Accounts receivable	Accounts receivable			5,662		4,725		Accounts receivable			5,720		5,143
INVENTORIES	INVENTORIES							INVENTORIES
Materials and supplies	Materials and supplies			1,839		1,645		Materials and supplies			2,235		2,168
Work in process	Work in process			769		719		Work in process			898		856
Finished goods	Finished goods			3,699		3,619		Finished goods			4,457		3,900
Total inventories	Total inventories			6,307		5,983		Total inventories			7,590		6,924
Prepaid expenses and other current assets	Prepaid expenses and other current assets			1,997		2,095		Prepaid expenses and other current assets			2,501		2,372
TOTAL CURRENT ASSETS	TOTAL CURRENT ASSETS			24,336		23,091		TOTAL CURRENT ASSETS			22,521		21,653
PROPERTY, PLANT AND EQUIPMENT, NET	PROPERTY, PLANT AND EQUIPMENT, NET			21,392		21,686		PROPERTY, PLANT AND EQUIPMENT, NET			20,593		21,195
GOODWILL	GOODWILL			40,493		40,924		GOODWILL			38,761		39,700
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET	TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET			23,504		23,642		TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET			23,465		23,679
OTHER NONCURRENT ASSETS	OTHER NONCURRENT ASSETS			9,944		9,964		OTHER NONCURRENT ASSETS			10,942		10,981
TOTAL ASSETS	TOTAL ASSETS			$	119,669	$	119,307	TOTAL ASSETS			$	116,282	$	117,208

Liabilities and Shareholders' Equity	Liabilities and Shareholders' Equity							Liabilities and Shareholders' Equity
CURRENT LIABILITIES	CURRENT LIABILITIES							CURRENT LIABILITIES
Accounts payable	Accounts payable			$	14,223	$	13,720	Accounts payable			$	14,845	$	14,882
Accrued and other liabilities	Accrued and other liabilities			10,377		10,523		Accrued and other liabilities			10,056		9,554
Debt due within one year	Debt due within one year			11,989		8,889		Debt due within one year			11,717		8,645
TOTAL CURRENT LIABILITIES	TOTAL CURRENT LIABILITIES			36,589		33,132		TOTAL CURRENT LIABILITIES			36,618		33,081
LONG-TERM DEBT	LONG-TERM DEBT			20,558		23,099		LONG-TERM DEBT			21,286		22,848
DEFERRED INCOME TAXES	DEFERRED INCOME TAXES			6,323		6,153		DEFERRED INCOME TAXES			6,986		6,809
OTHER NONCURRENT LIABILITIES	OTHER NONCURRENT LIABILITIES			9,791		10,269		OTHER NONCURRENT LIABILITIES			7,058		7,616
TOTAL LIABILITIES	TOTAL LIABILITIES			73,261		72,653		TOTAL LIABILITIES			71,948		70,354
SHAREHOLDERS’ EQUITY	SHAREHOLDERS’ EQUITY							SHAREHOLDERS’ EQUITY
Preferred stock	Preferred stock			859		870		Preferred stock			834		843
Common stock – shares issued –	Common stock – shares issued –	September 2021	4,009.2					Common stock – shares issued –	September 2022	4,009.2
		June 2021	4,009.2	4,009		4,009			June 2022	4,009.2	4,009		4,009
Additional paid-in capital	Additional paid-in capital			65,148		64,848		Additional paid-in capital			65,955		65,795
Reserve for ESOP debt retirement	Reserve for ESOP debt retirement			(964)		(1,006)		Reserve for ESOP debt retirement			(870)		(916)
Accumulated other comprehensive loss	Accumulated other comprehensive loss			(14,062)		(13,744)		Accumulated other comprehensive loss			(12,811)		(12,189)
Treasury stock	Treasury stock			(117,240)		(114,973)		Treasury stock			(127,205)		(123,382)
Retained earnings	Retained earnings			108,361		106,374		Retained earnings			114,163		112,429
Noncontrolling interest	Noncontrolling interest			297		276		Noncontrolling interest			259		265
TOTAL SHAREHOLDERS’ EQUITY	TOTAL SHAREHOLDERS’ EQUITY			46,408		46,654		TOTAL SHAREHOLDERS’ EQUITY			44,334		46,854
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	119,669	$	119,307	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	116,282	$	117,208

See accompanying Notes to Consolidated Financial Statements.

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


		Three Months Ended September 30, 2021											Three Months Ended September 30, 2022
Dollars in millions; shares in thousands	Dollars in millions; shares in thousands	Common Stock		Preferred Stock	Add-itional Paid-In Capital	Reserve for ESOP Debt Retirement	Accumulated Other Comp-rehensive Income/(Loss)	Treasury Stock	Retained Earnings	Non-controlling Interest	Total Share-holders' Equity	Dollars in millions; shares in thousands	Common Stock		Preferred Stock	Add-itional Paid-In Capital	Reserve for ESOP Debt Retirement	Accumulated Other Comp-rehensive Loss	Treasury Stock	Retained Earnings	Non-controlling Interest	Total Share-holders' Equity
		Shares	Amount										Shares	Amount
BALANCE JUNE 30, 2021		2,429,706	$4,009	$870	$64,848	($1,006)	($13,744)	($114,973)	$106,374	$276	$46,654
BALANCE JUNE 30, 2022												BALANCE JUNE 30, 2022	2,393,877	$4,009	$843	$65,795	($916)	($12,189)	($123,382)	$112,429	$265	$46,854
Net earnings	Net earnings								4,112	14	4,126	Net earnings								3,939	24	3,963
Other comprehensive income/(loss)							(318)			—	(318)
Dividends and dividend equivalents ($0.8698 per share):
Other comprehensive loss												Other comprehensive loss						(622)			(5)	(627)
Dividends and dividend equivalents ($0.9133 per share):												Dividends and dividend equivalents ($0.9133 per share):
Common	Common								(2,118)		(2,118)	Common								(2,189)		(2,189)
Preferred, net of tax benefits									(70)		(70)
Preferred												Preferred								(71)		(71)
Treasury stock purchases	Treasury stock purchases	(19,353)						(2,750)			(2,750)	Treasury stock purchases	(28,189)						(4,000)			(4,000)
Employee stock plans	Employee stock plans	8,437			300			474			774	Employee stock plans	3,011			159			169			328
Preferred stock conversions	Preferred stock conversions	1,158		(11)	2			9			—	Preferred stock conversions	998		(9)	1			8			—
ESOP debt impacts	ESOP debt impacts					42			63		105	ESOP debt impacts					46			55		101
Noncontrolling interest, net	Noncontrolling interest, net				(2)					7	5	Noncontrolling interest, net				—					(25)	(25)
BALANCE SEPTEMBER 30, 2021		2,419,948	$4,009	$859	$65,148	($964)	($14,062)	($117,240)	$108,361	$297	$46,408
BALANCE SEPTEMBER 30, 2022												BALANCE SEPTEMBER 30, 2022	2,369,697	$4,009	$834	$65,955	($870)	($12,811)	($127,205)	$114,163	$259	$44,334


		Three Months Ended September 30, 2020											Three Months Ended September 30, 2021
Dollars in millions; shares in thousands	Dollars in millions; shares in thousands	Common Stock		Preferred Stock	Add-itional Paid-In Capital	Reserve for ESOP Debt Retirement	Accumulated Other Comp-rehensive Income/(Loss)	Treasury Stock	Retained Earnings	Non-controlling Interest	Total Share-holders' Equity	Dollars in millions; shares in thousands	Common Stock		Preferred Stock	Add-itional Paid-In Capital	Reserve for ESOP Debt Retirement	Accumulated Other Comp-rehensive Loss	Treasury Stock	Retained Earnings	Non-controlling Interest	Total Share-holders' Equity
		Shares	Amount										Shares	Amount
BALANCE JUNE 30, 2020		2,479,746	$4,009	$897	$64,194	($1,080)	($16,165)	($105,573)	$100,239	$357	$46,878
BALANCE JUNE 30, 2021												BALANCE JUNE 30, 2021	2,429,706	$4,009	$870	$64,848	($1,006)	($13,744)	($114,973)	$106,374	$276	$46,654
Net earnings	Net earnings								4,277	31	4,308	Net earnings								4,112	14	4,126
Other comprehensive income/(loss)							284			5	289
Dividends and dividend equivalents ($0.7907 per share):
Other comprehensive loss												Other comprehensive loss						(318)			—	(318)
Dividends and dividend equivalents ($0.8698 per share):												Dividends and dividend equivalents ($0.8698 per share):
Common	Common								(1,969)		(1,969)	Common								(2,118)		(2,118)
Preferred, net of tax benefits									(66)		(66)
Preferred												Preferred								(70)		(70)
Treasury stock purchases	Treasury stock purchases	(14,642)						(2,000)			(2,000)	Treasury stock purchases	(19,353)						(2,750)			(2,750)
Employee stock plans	Employee stock plans	13,504			271			772			1,043	Employee stock plans	8,437			300			474			774
Preferred stock conversions	Preferred stock conversions	998		(9)	2			7			—	Preferred stock conversions	1,158		(11)	2			9			—
ESOP debt impacts	ESOP debt impacts					34			58		92	ESOP debt impacts					42			63		105
Noncontrolling interest, net	Noncontrolling interest, net									1	1	Noncontrolling interest, net				(2)					7	5
BALANCE SEPTEMBER 30, 2020		2,479,606	$4,009	$888	$64,467	($1,046)	($15,881)	($106,794)	$102,539	$394	$48,576
BALANCE SEPTEMBER 30, 2021												BALANCE SEPTEMBER 30, 2021	2,419,948	$4,009	$859	$65,148	($964)	($14,062)	($117,240)	$108,361	$297	$46,408

See accompanying Notes to Consolidated Financial Statements.

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended September 30
Amounts in millions 2021 2020
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD $ 10,288 $ 16,181
OPERATING ACTIVITIES
Net earnings 4,126 4,308
Depreciation and amortization 711 671
Share-based compensation expense 116 89
Deferred income taxes 57 193
Gain on sale of assets (73) (12)
Changes in:
Accounts receivable (1,012) (825)
Inventories (409) (137)
Accounts payable, accrued and other liabilities 1,261 442
Other operating assets and liabilities (178) (30)
Other 44 40
TOTAL OPERATING ACTIVITIES 4,643 4,739
INVESTING ACTIVITIES
Capital expenditures (1,091) (850)
Proceeds from asset sales 85 21
TOTAL INVESTING ACTIVITIES (1,006) (829)
FINANCING ACTIVITIES
Dividends to shareholders (2,182) (2,030)
Increases in short-term debt maturing in more than three months 1,792 1,507
Reductions in short-term debt maturing in more than three months (1,422) (829)
Increases/(reductions) in other short-term debt 512 (4,246)
Reductions to long-term debt (26) (25)
Treasury stock purchases (2,750) (2,000)
Impact of stock options and other 648 893
TOTAL FINANCING ACTIVITIES (3,428) (6,730)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH (127) 31
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 82 (2,789)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD $ 10,370 $ 13,392


	Three Months Ended September 30
Amounts in millions	2022		2021
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD	$	7,214	$	10,288
OPERATING ACTIVITIES
Net earnings	3,963		4,126
Depreciation and amortization	663		711
Share-based compensation expense	105		116
Deferred income taxes	(130)		57
Gain on sale of assets	(1)		(73)
Changes in:
Accounts receivable	(740)		(1,012)
Inventories	(893)		(409)
Accounts payable, accrued and other liabilities	1,495		1,261
Other operating assets and liabilities	(454)		(178)
Other	62		44
TOTAL OPERATING ACTIVITIES	4,070		4,643
INVESTING ACTIVITIES
Capital expenditures	(890)		(1,091)
Proceeds from asset sales	5		85
Acquisitions, net of cash acquired	(2)		—
Proceeds from sales and maturities of short-term investments	55		—
TOTAL INVESTING ACTIVITIES	(832)		(1,006)
FINANCING ACTIVITIES
Dividends to shareholders	(2,255)		(2,182)
Additions to short-term debt with original maturities of more than three months	2,975		1,792
Reductions in short-term debt with original maturities of more than three months	(265)		(1,422)
Net additions to other short-term debt	1,727		512
Reductions in long-term debt	(1,877)		(26)
Treasury stock purchases	(4,000)		(2,750)
Impact of stock options and other	188		648
TOTAL FINANCING ACTIVITIES	(3,507)		(3,428)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(235)		(127)
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(504)		82
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD	$	6,710	$	10,370

See accompanying Notes to Consolidated Financial Statements.

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

These statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2021.~~2022. In the opinion of management, the accompanying unaudited Consolidated Financial Statements of The Procter & Gamble Company and subsidiaries (the "Company," "Procter & Gamble," "P&G," "we" or "our") contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods reported. However, the results of operations included in such financial statements may not necessarily be indicative of annual results.

For the quarter ended September 30, 2021, the Company began to present increases and reductions in short-term debt with maturities of more than three months separately within the Consolidated Statements of Cash Flows. The presentation for the quarter ended September 30, 2020 has been revised to align with the current period presentation. This change had no impact on total financing activities and we have concluded the change is not material.

2. New Accounting Pronouncements and Policies

In ~~March 2020,~~November 2021, the Financial Accounting Standards Board ~~("FASB")~~(FASB) issued Accounting Standards Update ~~("ASU")~~(ASU) No. ~~2020-04, "Reference Rate Reform~~2021-10, "Government Assistance (Topic ~~848)~~832): ~~Facilitation~~Disclosures by Business Entities about Government Assistance". This guidance requires annual disclosures for transactions with a government authority that are accounted for by applying a grant or contribution model. These amendments are effective for annual periods beginning after December 15, 2021, with early adoption permitted. We have completed our evaluation of significant transactions. The guidance has not had, and is not expected to have, a material impact on the ~~Effects of Reference Rate Reform on~~Company's Consolidated Financial Reporting." The amendments provide optional expedients and exceptions for applying generally accepted accounting principles ("GAAP") to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. Statements.

In ~~January 2021,~~September 2022, the FASB issued ASU No. ~~2021-01, "Reference Rate Reform (Topic 848)~~2022-04, "Liabilities - Supplier Finance Programs (Subtopic 405-50): ~~Scope",~~Disclosure of Supplier Finance Program Obligations". This guidance requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. These amendments are effective for fiscal years beginning after December 15, 2022, except for the amendment on rollforward information, which ~~clarified that certain optional expedients and exceptions in Topic 848 apply to derivative instruments that are affected by the discounting transition due to reference rate reform. These ASUs were~~is effective ~~upon issuance and may be applied prospectively to contract modifications and hedging relationships entered or evaluated through~~for fiscal years beginning after December ~~31, 2022.~~15, 2023. We are currently ~~evaluating~~assessing the impact of this guidance on our contracts and do not expect a material impact at this time. Specific elections of expedients and exceptions provided under the ASUs will be made when contract modifications in response to reference rate reform commence.Consolidated Financial Statements.

No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on our Consolidated Financial Statements.

3. Segment Information

Under U.S. GAAP, our operating segments are aggregated into five reportable segments: 1) Beauty, 2) Grooming, 3) Health Care, 4) Fabric & Home Care and 5) Baby, Feminine & Family Care. Our five reportable segments are comprised of:

•Beauty: Hair Care (Conditioners, Shampoos, Styling Aids, Treatments); Skin and Personal Care (Antiperspirants and Deodorants, Personal Cleansing, Skin Care);

•Grooming: ~~Shave Care (Female~~Grooming (Appliances, Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other ~~Shave Care)~~Grooming); ~~Appliances;~~

•Health Care: Oral Care (Toothbrushes, Toothpaste, Other Oral Care); Personal Health Care (Gastrointestinal, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, Pain Relief, Other Personal Health Care);

•Fabric & Home Care: Fabric Care (Fabric Enhancers, Laundry Additives, Laundry Detergents); Home Care (Air Care, Dish Care, P&G Professional, Surface Care); and

•Baby, Feminine & Family Care: Baby Care (Baby Wipes, Taped Diapers and Pants); Feminine Care (Adult Incontinence, Feminine Care); Family Care (Paper Towels, Tissues, Toilet Paper).

Amounts in millions of dollars unless otherwise specified.

Our operating segments are comprised of similar product categories. Operating segments that individually accounted for 5% or more of consolidated net sales are as follows:
% of Net sales by operating segment (1)
Three Months Ended September 30
2021 2020
Fabric Care 23% 22%
Home Care 11% 12%
Baby Care 10% 10%
Skin and Personal Care 10% 10%
Hair Care 10% 10%
Family Care 8% 9%
Oral Care 8% 8%
Shave Care 7% 6%
Feminine Care 6% 6%
Personal Health Care 5% 5%
Other 2% 2%
Total 100% 100%


	% of Net sales by operating segment (1)
	Three Months Ended September 30
	2022	2021
Fabric Care	23%	23%
Home Care	12%	11%
Skin and Personal Care	10%	10%
Baby Care	10%	10%
Hair Care	9%	10%
Family Care	8%	8%
Grooming (2)	8%	7%
Oral Care	8%	8%
Feminine Care	6%	6%
Personal Health Care	6%	5%
Other	—%	2%
Total	100%	100%

(1)% of Net sales by operating segment excludes sales held in Corporate.

(2)Effective July 1, 2022, the Grooming Sector Business Unit completed the full integration of its Shave Care and Appliances categories to cohesively serve consumers' grooming needs. This transition included the integration of the management team, strategic decision-making, innovation plans, financial targets, budgets and internal management reporting. For the three months ended September 30, 2021, Appliances was presented in Other.

The following is a summary of reportable segment results:


			Three Months Ended September 30			Three Months Ended September 30
			Net Sales	Earnings/(Loss) Before Income Taxes	Net Earnings				Net Sales		Earnings/(Loss) Before Income Taxes		Net Earnings/(Loss)
Beauty	Beauty	2021	$3,964	$1,242	$991		Beauty	2022	$	3,961	$	1,271	$	1,011
		2020	3,786	1,228	976			2021	3,964		1,242		991
Grooming	Grooming	2021	1,687	518	417		Grooming	2022	1,625		503		404
		2020	1,601	426	355			2021	1,687		518		417
Health Care	Health Care	2021	2,676	695	529		Health Care	2022	2,757		800		617
		2020	2,471	679	525			2021	2,676		695		529
Fabric & Home Care	Fabric & Home Care	2021	7,009	1,546	1,191		Fabric & Home Care	2022	7,082		1,543		1,172
		2020	6,644	1,743	1,349			2021	7,009		1,546		1,191
Baby, Feminine & Family Care	Baby, Feminine & Family Care	2021	4,864	1,075	826		Baby, Feminine & Family Care	2022	4,934		1,055		805
		2020	4,723	1,318	1,010			2021	4,864		1,075		826
Corporate	Corporate	2021	138	(41)	172		Corporate	2022	253		(175)		(46)
		2020	93	(97)	93			2021	138		(41)		172
Total Company	Total Company	2021	$20,338	$5,035	$4,126		Total Company	2022	$	20,612	$	4,997	$	3,963
		2020	19,318	5,297	4,308			2021	20,338		5,035		4,126

Amounts in millions of dollars unless otherwise specified.

4. Goodwill and Other Intangible Assets

Goodwill is allocated by reportable segment as follows:

Beauty Grooming Health Care Fabric & Home Care Baby, Feminine & Family Care Total Company
Goodwill at June 30, 2021 $ 13,257 $ 13,095 $ 8,046 $ 1,873 $ 4,653 $ 40,924
Translation and other (152) (111) (109) (14) (45) (431)
Goodwill at September 30, 2021 $ 13,105 $ 12,984 $ 7,937 $ 1,859 $ 4,608 $ 40,493


	Beauty		Grooming		Health Care		Fabric & Home Care		Baby, Feminine & Family Care		Total Company
Goodwill at June 30, 2022	$	13,296	$	12,571	$	7,589	$	1,808	$	4,436	$	39,700
Acquisitions and divestitures	—		—		—		—		—		—
Translation and other	(344)		(254)		(217)		(29)		(95)		(939)
Goodwill at September 30, 2022	$	12,952	$	12,317	$	7,372	$	1,779	$	4,341	$	38,761

Goodwill decreased from June 30, ~~2021~~2022 primarily due to currency ~~translation, partially offset by a minor acquisition within Health Care.~~translation.

Identifiable intangible assets at September 30, ~~2021~~2022 were comprised of:


		Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Intangible assets with determinable lives	Intangible assets with determinable lives	$	8,570	$	(6,149)	Intangible assets with determinable lives	$	8,890	$	(6,284)
Intangible assets with indefinite lives	Intangible assets with indefinite lives	21,083		—		Intangible assets with indefinite lives	20,859		—
Total identifiable intangible assets	Total identifiable intangible assets	$	29,653	$	(6,149)	Total identifiable intangible assets	$	29,749	$	(6,284)

Intangible assets with determinable lives consist of brands, patents, technology and customer relationships. The intangible assets with indefinite lives primarily consist of brands. The amortization expense of determinable-lived intangible assets for the three months ended September 30, 2022 and 2021 was $80 and ~~2020 was~~ $77, ~~million and $84 million,~~ respectively.

Goodwill and indefinite-lived intangible assets are not amortized but are tested at least annually for ~~impairment by comparing~~impairment. We use the ~~estimated fair values of our reporting units and underlying indefinite-lived intangible assets to their respective carrying values. We typically use an~~ income method to estimate the fair value of these assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. If the resulting fair value is less than the asset's carrying value, that difference represents an impairment. ~~Our annual impairment testing for goodwill and indefinite-lived intangible assets occurs during the three months ended December 31.~~

The business unit valuations used to test goodwill and intangible assets for impairment depend on a number of significant estimates and assumptions, including macroeconomic conditions, overall category growth rates, competitive activities, cost containment, margin expansion and Company business plans. We believe these estimates and assumptions are reasonable. However, future changes in the judgments, assumptions and estimates that are used in our impairment testing for goodwill and indefinite-lived intangible assets, including discount rates, tax rates or future cash flow projections, could result in significantly different estimates of the fair values. To the extent changes in such factors result in a failure to achieve the level of projected cash flows initially used to estimate fair value for purposes of establishing or subsequently impairing the carrying amount of goodwill and related intangible assets, we may need to record non-cash impairment charges in the future.

Most of our goodwill reporting units ~~are comprised of a combination of legacy and acquired businesses and as a result~~ have fair value cushions that ~~at a minimum,~~significantly exceed ~~two times~~ their underlying carrying values. ~~Certain of our goodwill reporting units,~~In connection with the Grooming operating segment integration as described further in ~~particular~~Note 3, we concluded that the Shave Care and Appliances categories are ~~comprised entirely of acquired businesses and as a result, have fair value cushions that are not as high. The Appliances~~one reporting unit (Grooming) for goodwill impairment testing. Based on our impairment testing performed in the prior fiscal year, goodwill for the Grooming reporting unit has a fair value ~~that significantly exceeds~~cushion of over 40%.

Based on our impairment testing performed in the ~~underlying carrying value. As previously disclosed,~~prior fiscal year, the ~~carrying value of the Shave Care reporting unit and the related~~ Gillette indefinite-lived intangible ~~asset were impaired during the quarter ended June 30, 2019. Also, as previously disclosed, the Shave Care reporting unit~~asset's fair value exceeded its carrying value by ~~more than 20%~~approximately 5% and is most susceptible to future impairment risk. Adverse changes in the business or in the macroeconomic environment, including foreign currency devaluation, increasing global inflation, market contraction from an economic recession and the Russia-Ukraine War, could reduce the underlying cash flows used to estimate the fair value of the Gillette indefinite-lived intangible asset ~~fair value approximated its carrying value as of our fiscal 2021~~ and ~~fiscal 2020~~trigger a future impairment ~~testing dates. Accordingly, no impairment charge was recorded during the years ended June 30, 2021 or June 30, 2020.~~

charge. The most significant assumptions utilized in the determination of the estimated fair ~~values~~value of ~~the Shave Care reporting unit and~~ the Gillette indefinite-lived intangible asset are the net sales ~~and earnings~~ growth rates (including residual growth rates), discount rate and royalty rates.

Net sales growth rates could be negatively impacted by reductions or changes in demand for our Grooming products, which may be caused by, among other things: changes in the ~~discount rate.~~use and frequency of grooming products, by shifts in demand away from one or more of our higher priced products to lower priced products or potential supply chain constraints. In addition, relative global and country/regional macroeconomic factors, including the Russia-Ukraine War, could result in additional and prolonged devaluation of other countries' currencies relative to the U.S. dollar. The residual growth ~~rate represents~~rates represent the expected rate at which the ~~Shave Care reporting unit and~~ Gillette brand ~~are~~is expected to grow beyond the shorter-term business planning period. The residual growth ~~rate~~rates utilized in our fair value estimates isare consistent with the ~~reporting unit and~~ brand operating plans and ~~approximates~~approximate expected long-term category market growth rates. The residual growth rate depends on overall market growth rates, the competitive environment, inflation, relative currency exchange rates and business activities that impact market share. As a result, the residual growth rate could be adversely impacted by a sustained deceleration in category growth, grooming habit changes, devaluation of currencies against the U.S. dollar or an increased competitive environment.

The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon industry required rates of return, including consideration of both debt and equity components of the capital structure. Our discount rate may be impacted by adverse changes in the macroeconomic environment, volatility in the equity and debt markets or other country specific factors, such as

~~Amounts in millions of dollars unless otherwise specified.~~

further devaluation of currencies against the U.S. dollar. Spot rates as of the fair value measurement date are utilized in our fair value estimates for cash flows outside the U.S. ~~Another key assumption~~

Amounts in ~~our~~millions of dollars unless otherwise specified.

The royalty rate used to determine the estimated fair value ~~determination of~~for the Gillette indefinite-lived intangible asset ~~is the royalty rate, which~~ is driven by historical and estimated future profitability of the underlying Gillette business. The royalty rate may be impacted by significant adverse changes in long-term operating margins.

While management can and has implemented strategies to address these events, changes in operating plans or adverse changes in the business or in the macroeconomic environment in the future could reduce the underlying cash flows used to estimate fair values and could result in a decline in fair value that would trigger future impairment charges of the Shave Care reporting unit's goodwill and indefinite-lived intangibles. The duration and severity of the pandemic could also result in future impairment charges for the Shave Care reporting unit goodwill and the Gillette indefinite-lived intangible asset. While we have concluded that a triggering event did not occur during the quarter ended September 30, 2021, the Gillette indefinite-lived intangible asset is most susceptible to future impairment risk. Our assessment of the Gillette intangible asset assumes the net sales growth rates will begin to recover from the impact of the COVID-19 pandemic during the current fiscal year. There continues to be a high level of uncertainty relating to how the pandemic will evolve, how governments and consumers will react, progress on the distribution of vaccines and whether the pandemic will have a longer-term effect on consumer habits. Accordingly, there continues to be risk related to this key assumption. A more prolonged pandemic recovery period could impact the assumptions utilized in the determination of the estimated fair values of the Shave Care reporting unit and the Gillette indefinite-lived intangible asset that are significant enough to trigger an impairment. Net sales and earnings growth rates could be negatively impacted by reductions or changes in demand for our shave care products, which may be caused by, among other things: the temporary inability of consumers to purchase our products due to illness, quarantine or other travel restrictions, or financial hardship, changes in the use and frequency of grooming products or by shifts in demand away from one or more of our higher priced products to lower priced products. In addition, relative global and country/regional macroeconomic factors could result in additional and prolonged devaluation of other countries’ currencies relative to the U.S. dollar. Finally, the discount rate utilized in our valuation model could be impacted by changes in the underlying interest rates and risk premiums included in the determination of the cost of capital. As of September 30, 2021, the carrying values of the Shave Care goodwill and the Gillette indefinite-lived intangible asset were $12.7 billion and $14.1 billion, respectively.

We performed a sensitivity analysis for the ~~Shave Care reporting unit and the~~ Gillette indefinite-lived intangible asset during our ~~most recently completed~~ annual impairment testing from the prior year, utilizing reasonably possible changes in the assumptions for the ~~shorter-term~~discount rate, the short-term and residual growth rates ~~discount rate,~~ and the royalty ~~rate~~rates to demonstrate the potential impacts to ~~the~~ estimated fair values. The table below provides, in isolation, the estimated fair value impacts related to a 25 basis-point increase in the discount rate, a 25 basis-point decrease in our ~~shorter-term~~short-term and residual growth rates or a 50 ~~basis point~~basis-point decrease in our royalty ~~rate, any~~rates, some of which ~~in isolation,~~ would result in an impairment of the Gillette indefinite-lived intangible asset.

Approximate Percent Change in Estimated Fair Value
+25 bps Discount Rate -25 bps Growth Rates -50 bps Royalty Rate
Shave Care goodwill reporting unit (6)% (6)% N/A
Gillette indefinite-lived intangible asset (6)% (6)% (4)%

Approximate Percent Change in Estimated Fair Value

+25 bps Discount Rate

-25 bps Growth Rates

-50 bps Royalty Rate

Gillette indefinite-lived intangible asset

(6)%

(3)%

Gillette's business results in the fiscal year ended June 30, 2022 exceeded the assumptions in our impairment testing from the prior year. However, during the three months ended September 30, 2022, the relative currency exchange rates devalued against the U.S. dollar and the inputs to the cost of capital determination increased. These macroeconomic changes place increased pressure on the fair value of the Gillette indefinite-lived intangible asset. Based on our assessment, we determined it is more likely than not that the fair value of the Gillette indefinite-lived intangible asset continues to exceed its carrying value of $14.1 billion as of September 30, 2022. Therefore, we have concluded that no triggering event has occurred in the current quarter. We will perform our annual impairment testing for goodwill and indefinite-lived intangible assets during the three months ended December 31, 2022.

~~Amounts in millions of dollars unless otherwise specified.~~

5. Earnings Per Share

Basic net earnings per common share are calculated by dividing Net earnings attributable to Procter & Gamble less preferred dividends by the weighted average number of common shares outstanding during the period. Diluted net earnings per common share are calculated by dividing Net earnings attributable to Procter & Gamble by the diluted weighted average number of common shares outstanding during the period. The diluted shares include the dilutive effect of stock options and other stock-based awards based on the treasury stock method and the assumed conversion of preferred stock.

Net earnings per share were calculated as follows:


CONSOLIDATED AMOUNTS	CONSOLIDATED AMOUNTS	Three Months Ended September 30				CONSOLIDATED AMOUNTS	Three Months Ended September 30
		2021		2020					2022		2021
Net earnings	Net earnings	$	4,126	$	4,308			Net earnings	$	3,963	$	4,126
Less: Net earnings attributable to noncontrolling interests	Less: Net earnings attributable to noncontrolling interests	14		31				Less: Net earnings attributable to noncontrolling interests	24		14
Net earnings attributable to P&G (Diluted)	Net earnings attributable to P&G (Diluted)	4,112		4,277				Net earnings attributable to P&G (Diluted)	3,939		4,112
Less: Preferred dividends	Less: Preferred dividends	70		66				Less: Preferred dividends	71		70
Net earnings attributable to P&G available to common shareholders (Basic)	Net earnings attributable to P&G available to common shareholders (Basic)	$	4,042	$	4,211			Net earnings attributable to P&G available to common shareholders (Basic)	$	3,868	$	4,042

SHARES IN MILLIONS	SHARES IN MILLIONS							SHARES IN MILLIONS
Basic weighted average common shares outstanding	Basic weighted average common shares outstanding	2,428.1		2,486.1				Basic weighted average common shares outstanding	2,385.5		2,428.1
Add: Effect of dilutive securities	Add: Effect of dilutive securities							Add: Effect of dilutive securities
Convertible preferred shares (1)	Convertible preferred shares (1)	80.5		83.9				Convertible preferred shares (1)	77.4		80.5
Stock options and other unvested equity awards (2)	Stock options and other unvested equity awards (2)	50.3		55.3				Stock options and other unvested equity awards (2)	40.7		50.3
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	2,558.9		2,625.3				Diluted weighted average common shares outstanding	2,503.6		2,558.9

NET EARNINGS PER SHARE (3)	NET EARNINGS PER SHARE (3)							NET EARNINGS PER SHARE (3)
Basic	Basic	$	1.66	$	1.69			Basic	$	1.62	$	1.66
Diluted	Diluted	$	1.61	$	1.63			Diluted	$	1.57	$	1.61

(1)An overview of preferred shares can be found in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2021.~~2022.

(2)Excludes 918 million and 19 million for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively, of weighted average stock options outstanding because the exercise price of these options was greater than their average market value or their effect was antidilutive.

(3)Net earnings per share are calculated on Net earnings attributable to Procter & Gamble.

Amounts in millions of dollars unless otherwise specified.

6. Share-Based Compensation and Postretirement Benefits

The following table provides a summary of our share-based compensation expense and postretirement benefit ~~costs:~~impacts:

Three Months Ended September 30
2021 2020
Share-based compensation expense $ 116 $ 89
Net periodic benefit cost for pension benefits (1)
48 47
Net periodic benefit credit for other retiree benefits (1)
(103) (80)

~~(1)~~The components of the total net periodic benefit cost/(credit) for both pension benefits and other retiree benefits for these interim periods, on an annualized basis, do not differ materially from the amounts disclosed in the Annual Report on Form 10-K for the fiscal year ended June 30, 2021.


	Three Months Ended September 30
	2022		2021
Share-based compensation expense	$	105	$	116
Net periodic benefit cost for pension benefits	43		48
Net periodic benefit credit for other retiree benefits	(132)		(103)

~~Amounts in millions of dollars unless otherwise specified.~~

7. Risk Management Activities and Fair Value Measurements

As a multinational company with diverse product offerings, we are exposed to market risks, such as changes in interest rates, currency exchange rates and commodity prices. There have been no significant changes in our risk management policies or activities during the three months ended September 30, ~~2021.~~2022.

The Company has not changed its valuation techniques used in measuring the fair value of any financial assets and liabilities during the period. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers between levels during the periods presented. Also, there was no significant activity within the Level 3 assets and liabilities during the periods presented. There were no significant assets or liabilities that were remeasured at fair value on a non-recurring basis for the three months ended September 30, ~~2021.~~2022.

Cash equivalents were ~~$9.0~~$5.1 billion and ~~$9.1~~$6.0 billion as of September 30, ~~2021~~2022 and June 30, ~~2021,~~2022, respectively, and are classified as Level 1 within the fair value hierarchy. Other investments had a fair value of ~~$160~~$93 and ~~$192~~$140 as of September 30, ~~2021~~2022 and June 30, ~~2021,~~2022, respectively, including equity securities of ~~$131~~$66 and ~~$163~~$113 as of September 30, ~~2021~~2022 and June 30, ~~2021,~~2022, respectively, and are presented in Other noncurrent assets. Investments are measured at fair value and primarily classified as Level 1 and Level 2 within the fair value hierarchy. Level 1 are based on quoted market prices in active markets for identical assets, and Level 2 are based on quoted market prices for similar instruments. There are no material investment balances classified as Level 3 within the fair value hierarchy or using net asset value as a practical expedient. Unrealized gains on equity securities were $9 during the three months ended September 30, 2022. Unrealized losses on equity securities were $(29) during the three months ended September 30, 2021. ~~Unrealized losses on equity securities were not significant for the three months ended September 30, 2020.~~ These unrealized ~~losses~~gains/(losses) are recognized in ~~the Consolidated Statements of Earnings in~~ Other non-operating ~~income/(expense),~~income, net.

The fair value of long-term debt was ~~$28.4~~$21.8 billion and ~~$28.8~~$25.7 billion as of September 30, ~~2021~~2022 and June 30, ~~2021,~~2022, respectively. This includes the current portion of long-term debt instruments ($~~5.9~~2.2 billion and $3.6 billion as of September 30, ~~2021~~2022 and June 30, ~~2021,~~2022, respectively). Certain long-term debt (debt designated as a fair value hedge) is recorded at fair value. All other long-term debt is recorded at amortized cost but is measured at fair value for disclosure purposes. We consider our debt to be Level 2 in the fair value hierarchy. Fair values are generally estimated based on quoted market prices for identical or similar instruments.

Disclosures about Financial Instruments

The notional amounts and fair values of financial instruments used in hedging transactions as of September 30, ~~2021~~2022 and June 30, ~~2021~~2022 are as follows:


		Notional Amount				Fair Value Asset				Fair Value (Liability)					Notional Amount				Fair Value Asset				Fair Value (Liability)
		September 30, 2021		June 30, 2021		September 30, 2021		June 30, 2021		September 30, 2021		June 30, 2021			September 30, 2022		June 30, 2022		September 30, 2022		June 30, 2022		September 30, 2022		June 30, 2022
DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS	DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS													DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS
Interest rate contracts	Interest rate contracts	$	7,280	$	7,415	$	110	$	146	$	—	$	—	Interest rate contracts	$	3,743	$	4,972	$	—	$	3	$	(435)	$	(307)
DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS	DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS													DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS
Foreign currency interest rate contracts	Foreign currency interest rate contracts	$	9,506	$	8,484	$	248	$	89	$	(19)	$	(94)	Foreign currency interest rate contracts	$	11,877	$	7,943	$	877	$	561	$	(9)	$	(1)
TOTAL DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS	TOTAL DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS	$	16,786	$	15,899	$	358	$	235	$	(19)	$	(94)	TOTAL DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS	$	15,620	$	12,915	$	877	$	564	$	(444)	$	(308)

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS													DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
Foreign currency contracts	Foreign currency contracts	$	7,058	$	5,060	$	16	$	20	$	(36)	$	(22)	Foreign currency contracts	$	4,108	$	5,625	$	4	$	6	$	(96)	$	(61)

TOTAL DERIVATIVES AT FAIR VALUE	TOTAL DERIVATIVES AT FAIR VALUE	$	23,844	$	20,959	$	374	$	255	$	(55)	$	(116)	TOTAL DERIVATIVES AT FAIR VALUE	$	19,728	$	18,540	$	881	$	570	$	(540)	$	(369)

Amounts in millions of dollars unless otherwise specified.

The fair value of the interest rate derivative asset/(liability) directly offsets the cumulative amount of the fair value hedging adjustment included in the carrying amount of the underlying debt obligation. The carrying amount of the underlying debt obligation, which includes the unamortized discount or premium and the fair value adjustment, was ~~$7.4~~$3.3 billion and ~~$7.5~~$4.7 billion as of September 30, ~~2021~~2022 and June 30, ~~2021,~~2022, respectively. In addition to the foreign currency derivative contracts designated as net investment hedges, certain of our foreign currency denominated debt instruments are designated as net investment hedges. The carrying value of those debt instruments designated as net investment hedges, which includes the adjustment for the foreign currency transaction gain or loss on those instruments, was ~~$11.7~~$9.4 billion and ~~$12.0~~$11.2 billion as of September 30, ~~2021~~2022 and June 30, ~~2021,~~2022, respectively. The increase in the notional balance of derivative instruments designated as net investment hedges is partially offset by the decrease in debt designated as a net investment hedge due to maturities. The net increase in the total amount of instruments designated as net investment hedges is primarily driven by the Company's decision to leverage favorable interest rate spreads in the foreign currency ~~contracts not designated as hedging instruments primarily reflects changes in the level of intercompany financing activity during the period.~~swap market.

All derivative assets are presented in Prepaid expenses and other current assets or Other noncurrent assets. All derivative liabilities are presented in Accrued and other liabilities or Other noncurrent liabilities. Changes in the fair value of net investment hedges are recognized in the Foreign currency translation component of Other comprehensive income (OCI). All of the Company's derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy.

~~Amounts in millions of dollars unless otherwise specified.~~

Before tax ~~gains/(losses)~~gains on our financial instruments in hedging relationships are categorized as follows:


		Amount of Gain/(Loss) Recognized in OCI on Derivatives				Amount of Gain Recognized in OCI on Derivatives
		Three Months Ended September 30					Three Months Ended September 30
		2021		2020					2022		2021
DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS (1) (2)	DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS (1) (2)							DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS (1) (2)
Foreign exchange contracts	Foreign exchange contracts	$	208	$	(186)			Foreign exchange contracts	$	708	$	208

(1)For the derivatives in net investment hedging relationships, the amount of gain excluded from effectiveness testing, which was recognized in earnings, was ~~$15~~$46 and ~~$14~~$15 for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

(2)In addition to the foreign currency derivative contracts designated as net investment hedges, certain of our foreign currency denominated debt instruments are designated as net investment hedges. The amount of gain recognized in Accumulated other comprehensive ~~income/(loss)~~income (AOCI) for such instruments was ~~$303~~$698 and ~~$(646)~~$303 for the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively.


		Amount of Gain/(Loss) Recognized in Earnings				Amount of Loss Recognized in Earnings
		Three Months Ended September 30					Three Months Ended September 30
		2021		2020					2022		2021
DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS	DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS							DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS
Interest rate contracts	Interest rate contracts	$	(36)	$	7			Interest rate contracts	$	(131)	$	(36)
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS							DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
Foreign currency contracts	Foreign currency contracts	$	(24)	$	106			Foreign currency contracts	$	(146)	$	(24)

The ~~gain/(loss)~~loss on the derivatives in fair value hedging relationships is fully offset by the mark-to-market impact of the related exposure. These are both recognized in ~~the Consolidated Statements of Earnings in~~ Interest expense. The ~~gain/(loss)~~loss on derivatives not designated as hedging instruments is substantially offset by the currency mark-to-market of the related exposure. These are both recognized in ~~the Consolidated Statements of Earnings in~~ Selling, general and administrative expense (SG&A).

Amounts in millions of dollars unless otherwise specified.

8. Accumulated Other Comprehensive Income/(Loss)

The table below presents the changes in Accumulated other comprehensive income/(loss) attributable to Procter & Gamble (AOCI), including the reclassifications out of AOCI by component:
Investment Securities Post-retirement Benefits Foreign Currency Translation Total AOCI
Balance at June 30, 2021 $ 15 $ (2,963) $ (10,796) $ (13,744)
OCI before reclassifications (1)
5 80 (465) (380)
Amounts reclassified from AOCI into the Consolidated Statements of Earnings (2)
0 62 0 62
Net current period OCI 5 142 (465) (318)
Less: Other comprehensive income/(loss) attributable to non-controlling interests — — — —
Balance at September 30, 2021 $ 20 $ (2,821) $ (11,261) $ (14,062)


	Investment Securities		Post-retirement Benefit Plans		Foreign Currency Translation		Total AOCI
Balance at June 30, 2022	$	20	$	27	$	(12,236)	$	(12,189)
OCI before reclassifications (1)	(2)		82		(712)		(632)
Amounts reclassified to the Consolidated Statement of Earnings (2)	—		5		—		5
Net current period OCI	(2)		87		(712)		(627)
Less: OCI attributable to non-controlling interests	—		—		(5)		(5)
Balance at September 30, 2022	$	18	$	114	$	(12,943)	$	(12,811)

(1)Net of tax ~~expense/~~(benefit)/expense of ~~$1, $29~~$(1), $9 and ~~$120~~$330 for gains/losses on investment securities, postretirement benefit ~~items~~plans and foreign currency translation, respectively. Income tax effects within ~~cumulative~~foreign currency translation include impacts from items such as net investment hedge transactions. ~~Foreign cumulative translation is not adjusted for income taxes related to permanent investments in international subsidiaries.~~

(2)Net of tax ~~expense/(benefit)~~expense of $0, ~~$20~~$2 and $0 for gains/losses on investment securities, postretirement benefit ~~items~~plans and foreign currency translation, respectively.

The below provides additional details on amounts reclassified from AOCI into the Consolidated Statements of Earnings:

•Investment securities: amounts reclassified from AOCI into Other non-operating income, net.

•Postretirement benefits: amounts reclassified from AOCI into Other non-operating income, net and included in the computation of net periodic postretirement costs.

9. Commitments and Contingencies

Litigation

We are subject, from time to time, to certain legal proceedings and claims arising out of our business, which cover a wide range of matters, including antitrust and trade regulation, product liability, advertising, contracts, environmental, patent and trademark matters, labor and employment matters and tax. While considerable uncertainty exists, in the opinion of management and our counsel, the ultimate resolution of the various lawsuits and claims will not materially affect our financial position, results of operations or cash flows.

We are also subject to contingencies pursuant to environmental laws and regulations that in the future may require us to take action to correct the effects on the environment of prior manufacturing and waste disposal practices. Based on currently available information, we do not believe the ultimate resolution of environmental remediation will materially affect our financial position, results of operations or cash flows.

Income Tax Uncertainties

The Company is present in approximately 70 countries and over 150 taxable jurisdictions and, at any point in time, has 40–50 jurisdictional audits underway at various stages of completion. We evaluate our tax positions and establish liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite our belief that the underlying tax positions are fully supportable. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law and closing of statutes of limitations. Such adjustments are reflected in the tax provision as appropriate. We have tax years open ranging from ~~2008~~2010 and forward. We are generally not able to reliably estimate the ultimate settlement amounts until the close of an audit. Based on information currently available, we anticipate that over the ~~audit. While we do not expect material changes, it is possible that the amount of unrecognized benefit with respect~~next 12 month period, audit activity could be completed related to ~~our~~ uncertain tax positions ~~could increase or decrease within the next 12 months. At this time~~in multiple jurisdictions for which we ~~are not able to make a reasonable estimate~~have accrued existing liabilities of ~~the range of impact on the balance of uncertain tax positions or the impact on the effective tax rate related to these items.~~approximately $12, including interest and penalties.

Additional information on the Commitments and Contingencies of the Company can be found in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2021.~~2022.

Amounts in millions of dollars unless otherwise specified.


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

Forward-Looking Statements

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this report, including without limitation, the following sections: “Management's Discussion and Analysis,” “Risk Factors” and "Notes 4 and 9 to the Consolidated Financial Statements." These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, except to the extent required by law.

Risks and uncertainties to which our forward-looking statements are subject include, without limitation: (1) the ability to successfully manage global financial risks, including foreign currency fluctuations, currency exchange or pricing controls and localized volatility; (2) the ability to successfully manage local, regional or global economic volatility, including reduced market growth rates, and to generate sufficient income and cash flow to allow the Company to effect the expected share repurchases and dividend payments; (3) the ability to manage disruptions in credit markets or to our banking partners or changes to our credit rating; (4) the ability to maintain key manufacturing and supply arrangements (including execution of supply chain optimizations and sole supplier and sole manufacturing plant arrangements) and to manage disruption of business due to various factors, including ones outside of our control, such as natural disasters, acts of war (including the Russia-Ukraine War) or terrorism or disease outbreaks; (5) the ability to successfully manage cost fluctuations and pressures, including prices of commodities and raw materials and costs of labor, transportation, energy, pension and healthcare; (6) the ability to stay on the leading edge of innovation, obtain necessary intellectual property protections and successfully respond to changing consumer habits, evolving digital marketing and selling platform requirements and technological advances attained by, and patents granted to, competitors; (7) the ability to compete with our local and global competitors in new and existing sales channels, including by successfully responding to competitive factors such as prices, promotional incentives and trade terms for products; (8) the ability to manage and maintain key customer relationships; (9) the ability to protect our reputation and brand equity by successfully managing

real or perceived issues, including concerns about safety, quality, ingredients, efficacy, packaging content, supply chain practices or similar matters that may arise; (10) the ability to successfully manage the financial, legal, reputational and operational risk associated with third-party relationships, such as our suppliers, contract manufacturers, distributors, contractors and external business partners; (11) the ability to rely on and maintain key company and ~~third party~~third-party information and operational technology systems, networks and services and maintain the security and functionality of such systems, networks and services and the data contained therein; (12) the ability to successfully manage uncertainties related to changing political conditions and potential implications such as exchange rate fluctuations and market contraction; (13) the ability to successfully manage current and expanding regulatory and legal requirements and matters (including, without limitation, those laws and regulations involving product liability, product and packaging composition, intellectual property, labor and employment, antitrust, privacy and data protection, tax, ~~environmental,~~the environment, due diligence, risk oversight, ~~and~~ accounting and financial reporting) and to resolve new and pending matters within current estimates; (14) the ability to manage changes in applicable tax laws and ~~regulations including maintaining our intended tax treatment of divestiture transactions;~~regulations; (15) the ability to successfully manage our ongoing acquisition, divestiture and joint venture activities, in each case to achieve the Company’s overall business strategy and financial objectives, without impacting the delivery of base business objectives; (16) the ability to successfully achieve productivity improvements and cost savings and manage ongoing organizational changes while successfully identifying, developing and retaining key employees, including in key growth markets where the availability of skilled or experienced employees may be limited; ~~and~~ (17) the ability to successfully manage the demand, supply and operational challenges, as well as governmental responses or mandates, associated with a disease outbreak, including epidemics, pandemics or similar widespread public health concerns (including COVID-19); (18) the ~~COVID-19 outbreak).~~ability to manage the uncertainties, sanctions and economic effects from the war between Russia and Ukraine; and (19) the ability to successfully achieve our ambition of reducing our greenhouse gas emissions and delivering progress towards our environmental sustainability priorities. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from those projected herein is included in the section titled "Economic Conditions and Uncertainties" and the section titled "Risk Factors" (Part I,II, Item 1A) of this Form 10-Q.

Purpose, Approach and Non-GAAP Measures

The purpose of Management's Discussion and Analysis (MD&A) is to provide an understanding of Procter & Gamble's financial condition, results of operations and cash flows by focusing on changes in certain key measures from year to year. The

MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and accompanying Notes.

The MD&A is organized into the following sections:

•Overview

•Summary of Results – Three months ended September 30, ~~2021~~2022

•Economic Conditions and Uncertainties

•Results of Operations – Three months ended September 30, ~~2021~~2022

•Business Segment Discussion – Three months ended September 30, ~~2021~~2022

•Liquidity and Capital Resources

•Reconciliation of Measures Not Defined by U.S. GAAP

Throughout the MD&A, we refer to measures used by management to evaluate performance, including unit volume growth, net sales, net earnings, diluted net earnings per share and ~~net earnings.~~operating cash flow. We also refer to a number of financial measures that are not defined under accounting principles generally accepted in the United States of America (U.S. GAAP), that include organic sales gr~~owth,~~growth, core net earnings per share (Core EPS), adjusted free cash flow and adjusted free cash flow productivity. The explanation at the end of the MD&A provides the definition of these non-GAAP measures, details on the use and the derivation of these measures, as well as reconciliations to the most directly comparable U.S. GAAP measure.

Management also uses certain market share and market consumption estimates to evaluate performance relative to competition, despite some limitations on the availability and comparability of share and consumption information. References to market share and market consumption in the MD&A are based on a combination of vendor purchased traditional brick-and-mortar and online data in key markets as well as internal estimates. All market share references represent the percentage of sales of our products in dollar terms on a constant currency basis relative to all product sales in the category. The Company measures fiscal year to date market shares through the most recent period for which market share data is available, which typically reflects a lag time of one or two months as compared to the end of the reporting period. Management also uses unit volume growth to evaluate and explain drivers of changes in net sales. Organic volume growth reflects year-over-year changes in unit volume excluding the impacts of acquisitions and divestitures and certain one-time items, if applicable, and is used to explain changes in organic sales.

OVERVIEW

P&G is a global leader in the fast-moving consumer goods industry, focused on providing branded consumer packaged goods of superior quality and value to our consumers around the world. Our products are sold in ~~more than~~approximately 180 countries and territories, primarily through mass merchandisers, e-commerce (including social commerce) channels, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, ~~baby stores,~~ specialty beauty stores (including airport duty-free stores), high-frequency stores, pharmacies, electronics stores and professional channels. We also sell direct to individual consumers. We have on-the-ground operations in approximately 70 countries.

Our market environment is highly competitive with global, regional and local 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. Additionally, many of the product segments in which we compete are differentiated by price tiers (referred to as super-premium, premium, mid-tier and value-tier products). We believe we are well positioned in the industry segments and markets in which we operate, often holding a leadership or significant market share position.

The table below lists our reportable segments, including the product categories and brand composition within each segment.


Reportable Segments	Product Categories (Sub-Categories)	Major Brands
Beauty	Hair Care (Conditioners, Shampoos, Styling Aids, Treatments)	Head & Shoulders, Herbal Essences, Pantene, Rejoice
	Skin and Personal Care (Antiperspirants and Deodorants, Personal Cleansing, Skin Care)	Olay, Old Spice, Safeguard, Secret, SK-II
~~Grooming~~	Grooming (1)	~~(Shave Care -~~ Grooming (Appliances, Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other ~~Shave Care;~~ Grooming~~Appliances)~~)	Braun, Gillette, Venus
Health Care	Oral Care (Toothbrushes, Toothpastes, Other Oral Care)	Crest, Oral-B
	Personal Health Care (Gastrointestinal, Pain Relief, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, ~~Pain Relief,~~ Other Personal Health Care)	Metamucil, Neurobion, Pepto-Bismol, Vicks
Fabric & Home Care	Fabric Care (Fabric Enhancers, Laundry Additives, Laundry Detergents)	Ariel, Downy, Gain, Tide
	Home Care (Air Care, Dish Care, P&G Professional, Surface Care)	Cascade, Dawn, Fairy, Febreze, Mr. Clean, Swiffer
Baby, Feminine & Family Care	Baby Care (Baby Wipes, Taped Diapers and Pants)	Luvs, Pampers
	Feminine Care (Adult Incontinence, Feminine Care)	Always, Always Discreet, Tampax
	Family Care (Paper Towels, Tissues, Toilet Paper)	Bounty, Charmin, Puffs

(1)~~The~~Effective July 1, 2022, the Grooming ~~product category is comprised~~Sector Business Unit completed the full integration of ~~the~~its Shave Care and Appliances ~~operating segments.~~

categories to cohesively serve consumers' grooming needs. This transition included the integration of the management team, strategic decision-making, innovation plans, financial targets, budgets and internal management reporting.

The following table provides the percentage of net sales and net earnings by reportable business segment (excluding Corporate) for the three months ended September 30, ~~2021 (excluding net sales and net earnings in Corporate):~~2022:


		Three Months Ended September 30, 2021		Three Months Ended September 30, 2022
		Net Sales	Net Earnings			Net Sales	Net Earnings
Beauty	Beauty	20%	25%		Beauty	19%	25%
Grooming	Grooming	8%	11%		Grooming	8%	10%
Health Care	Health Care	13%	13%		Health Care	14%	16%
Fabric & Home Care	Fabric & Home Care	35%	30%		Fabric & Home Care	35%	29%
Baby, Feminine & Family Care	Baby, Feminine & Family Care	24%	21%		Baby, Feminine & Family Care	24%	20%
Total Company	Total Company	100%	100%		Total Company	100%	100%

SUMMARY OF RESULTS

The following are highlights of results for the three months ended September 30, ~~2021~~2022 versus the three months ended September 30, ~~2020:~~2021:

•Net sales increased 5%1% to ~~$20.3 billion, due to a high single digit increase~~$20.6 billion. Growth was driven by low single-digit increases in Health Care, ~~mid-single digit increases in Beauty, Grooming and~~ Fabric & Home Care and ~~a low single digit increase in~~ Baby, Feminine & Family ~~Care.~~Care, partially offset by a mid-single-digit decrease in Grooming. Net Sales in Beauty were unchanged. Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange, increased 4%7%. Organic sales increased high single digits in Health Care ~~increased mid-single digits in Grooming~~ and in Fabric & Home Care and increased ~~low single~~mid-single digits in Beauty, Grooming and in Baby, Feminine & Family Care.

•Net earnings were ~~$4.1~~$4.0 billion, a decrease of ~~$0.2 billion~~$163 million, or 4%, versus the prior year period asdue to a decrease in operating margin, partially offset by the increase in net ~~sales was more than offset by a decrease in operating margin.~~sales.

•Net earnings attributable to Procter & Gamble ~~decreased $0.2~~were $3.9 billion, a decrease of $173 million, or 4%, versus the prior ~~year period to $4.1 billion.~~year.

•Diluted net earnings per share (EPS) decreased 1%2% to ~~$1.61~~$1.57 due primarily to the decrease in net earnings, partially offset by a reduction in the weighted average shares outstanding. ~~Core net earnings per share also decreased 1% to $1.61 due to the absence of any non-core adjustments in either period.~~

•Operating cash flow was ~~$4.6~~$4.1 billion. Adjusted free cash flow, which is operating cash flow less capital expenditures and certain other impacts, was ~~$3.8~~$3.4 billion. Adjusted free cash flow productivity was ~~92%~~86%.

ECONOMIC CONDITIONS AND UNCERTAINTIES

Global Economic Conditions. Our products are sold in numerous countries across North America, Europe, Latin America, Asia and Africa, with more than half our sales generated outside the United States. As such, we are exposed to and impacted by global macroeconomic factors, U.S. and foreign government policies and foreign exchange fluctuations. Global economic conditions continue to be highly volatile due to the COVID-19 pandemic, resulting in market size contractions in certain countries due to economic slowdowns and government restrictions on movement. OtherCurrent macroeconomic factors ~~also~~ remain very dynamic, and any causes of market size contraction, such as COVID-19 related disruptions or lockdowns, greater political unrest or instability in the Middle East, Central &and Eastern Europe (including the ongoing Russia-Ukraine War), certain Latin American markets ~~the Hong Kong market in Greater China~~ and the Korean peninsula could reduce our sales or erode our operating margin and consequently reduce our net earnings and cash flows.

Changes in Costs. Our costs are subject to fluctuations, particularly due to changes in commodity and input material prices, transportation costs, broader inflationary impacts and our own productivity efforts. We have significant exposures to certain commodities and input materials, in particular certain oil-derived materials like resins and paper-based materials like ~~pulp, and volatility~~pulp.Volatility in the market price of these ~~commodity~~commodities and input materials has a direct impact on our costs.Disruptions in our manufacturing, supply and distribution operations, including due to COVID-19 related lockdowns, energy shortages, port congestions, labor constraints and freight container and truck shortages have impacted our costs and could do so in the future.If we are unable to manage these impacts through pricing actions, cost savings projects and sourcing decisions, as well as through consistent productivity improvements, it may adversely impact our gross margin, operating margin, net earnings and cash flows. Net sales could also be adversely impacted following pricing actions if there is a negative impact on the consumption of our products. We strive to implement, achieve and sustain cost improvement plans, including ~~outsourcing projects,~~ supply chain optimization and general overhead and workforce optimization.If we are not successful in executing and sustaining these changes, there could be a negative impact on our gross margin, operating margin, net earnings and cash flows.

Foreign Exchange. We have both translation and transaction exposure to the fluctuation of exchange rates. Translation exposures relate to exchange rate impacts of measuring income statements of foreign subsidiaries that do not use the U.S. dollar as their functional currency. Transaction exposures relate to 1) the impact from input costs that are denominated in a currency other than the local reporting currency and 2) the revaluation of transaction-related working capital balances denominated in currencies other than the functional currency. ~~In three out~~Historically, weakening of ~~the past four years a number of~~certain foreign currencies ~~have weakened~~ versus the U.S. dollar have resulted in significant foreign exchange impacts leading to lower net sales, net earnings and ~~earnings from these foreign exchange impacts.~~cash flows. Certain countries ~~that recently had and are currently~~ experiencing significant exchange rate fluctuations ~~include~~such as Argentina, Brazil, United Kingdom, Japan, Russia and Turkey ~~Brazil~~have had, and ~~Russia. These fluctuations~~could continue to have, ~~significantly impacted~~a significant impact on our ~~historical~~ net sales, ~~costs and~~ net earnings and ~~could do so in the future.~~cash flows. Increased pricing in response to certain fluctuations in foreign currency exchange rates may offset portions of the currency impacts but could also have a negative impact on the consumption of our products, which would negatively affect our net sales, gross margin, operating margin, net earnings and cash flows.

Government Policies. Our net earnings and cash flows could be affected by changes in U.S. or foreign government legislative, regulatory or enforcement policies. ~~For example, our~~On August 16, 2022, the "Inflation Reduction Act" (H.R. 5376) was signed into law in the United States. We do not currently expect the Inflation Reduction Act to have a material impact on the Company's Consolidated Financial Statements. Our net earnings and cash flows could be affected by any future legislative or regulatory changes in U.S. or non-U.S. tax policy, or any significant change in global tax policy adopted under the current work being led by the ~~Organisation for Economic Co-operation and Development ("OECD")~~OECD for the G20 focused on "Addressing the Challenges of the Digitalization of the Economy." The breadth of the OECD project extends beyond pure digital businesses and if agreed and enacted by most countries is likely to impact most large multinational businesses by both redefining jurisdictional taxation rights and broadly establishing a 15% minimum tax on their foreign operations.Economy". Our net sales, gross margin,

operating margin, net earnings and cash flows may also be impacted by changes in U.S. and foreign government policies related to environmental and climate change matters. Additionally, we attempt to carefully manage our debt, currency and other

exposures in certain countries with currency exchange, import authorization and pricing controls, such as Argentina, Egypt, Nigeria ~~Algeria, Egypt, Argentina~~ and ~~Turkey.~~Pakistan. Further, our net sales, gross margin, operating margin, net earnings and cash flows could be affected by changes to international trade agreements in North America and ~~elsewhere, including any impacts from post-Brexit (United Kingdom’s exit from the European Union) trade agreements.~~elsewhere. Changes in government policies in these areas might cause an increase or decrease in our net sales, gross margin, operating margin, net earnings and cash flows.

~~COVID-19 Disclosures.~~Russia-Ukraine War. The war between Russia and Ukraine has negatively impacted our operations in both countries. Our ~~priorities during the COVID-19 pandemic continue to be~~Ukraine business includes two manufacturing sites. We have approximately 500 employees including both manufacturing and non-manufacturing personnel. Our operations in ~~protecting the health and safety~~Ukraine accounted for less than 1% of our employees; maximizing the availability of products that help consumers with their health, hygiene and cleaning needs; and using our employees’ talents and our resources to help society meet and overcome the current challenges.

~~Because we sell products that are essential to the daily lives of consumers, the pandemic has not had a materially negative impact to our~~ consolidated net sales and net earnings in fiscal 2022. Additionally, net assets of our Ukraine subsidiary, along with Ukraine related assets held by other subsidiaries, account for less than 1% of net assets as ~~positive~~of September 30, 2022.

Our Russia business includes two manufacturing sites with a net book value of approximately $300 million as of September 30, 2022. We have approximately 1,800 employees, including both manufacturing and ~~negative~~non-manufacturing personnel. In fiscal 2022, our operations in Russia accounted for less than 2% of consolidated net sales and less than 1% of net earnings. Additionally, net assets of our Russia subsidiaries, along with Russia related assets held by other subsidiaries, account for less than 2% of net assets as of September 30, 2022. 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 related to the war’s duration, evolution and resolution. Within Ukraine, there is a possibility of physical damage and destruction of our two manufacturing facilities. We may not be able to operate our manufacturing sites and source raw materials from our suppliers or ship finished products to our customers. Ultimately, these could result in impairments of our manufacturing plants and fixed assets or write-downs of other operating assets and working capital.

Within Russia, we may not be able to continue our reduced operations at current levels due to ~~largely offset each other. We further describe these impacts for the period covered by this report in the Business Segment Discussion of the MD&A.~~

~~In the future, the pandemic may reduce demand for our products if it results in a recessionary global economic environment. Demand in certain countries in Latin America, Asia Pacific~~sanctions and ~~IMEA may be particularly susceptible to recession. It could also lead to volatility in consumer~~counter-sanctions, monetary, currency or payment controls, legislative restrictions or policies, restrictions on access to ~~our products (due to government actions or~~financial institutions and supply and transportation challenges. Our suppliers, distributors and labor shortages impacting our ability to produce and ship products) or could impact consumers’ movements and access to our products. The resumption towards normalcy in economic activity as governmental restrictions are relaxed and economies gradually, partially, or fully reopen in certain regions and markets, could also result in reduced demand due to consumption decreases and consumer pantry destocking (particularly, in home cleaning and hygiene products). Our retail customers are also impacted by the ~~pandemic~~war and their ~~success in addressing issues and maintaining~~ability to successfully maintain their operations could also impact ~~consumer access to and, as a result,~~our operations or negatively impact the sales of our products.

~~We believe that in the long term,~~More broadly, there ~~will continue~~could be additional negative impacts to ~~be strong demand for categories in which we operate, particularly~~ our products that deliver essential health, hygiene and cleaning benefits. However, the uncertainty in the timing and extent of demand volatility, the relaxation and reimplementation of movement restrictions, the timing and impact of potential consumer pantry destocking, and future economic trends due to a resurgence of positive cases, the emergence of new variants of the virus, the speed at which treatments and vaccines are administered and governmental actions in response to the pandemic may result in heightened volatility of net sales, ~~net~~ earnings and cash flows ~~during~~should the situation escalate beyond its current scope, including, among other potential impacts, economic recessions in certain neighboring countries or globally due to inflationary pressures and ~~subsequent~~supply chain cost increases or the geographic proximity of the war relative to the ~~pandemic.~~rest of Europe.

~~Business Continuity. Our ability to continue to operate without any significant negative impacts will in part depend on our ability to protect our employees and our supply chain. The Company has endeavored to follow~~For a more complete discussion of the ~~recommendations from governments and health authorities, including on vaccine administration, with specific measures in place for those working~~risks we encounter in our ~~plants and distribution facilities. We have also worked closely with local and national officials to keep our manufacturing facilities open due to the essential nature of the majority of our products.~~

While we have been able to broadly maintain our operations, we experienced some disruption in our supply chain in certain markets in Asia Pacific due primarily to the restriction of employee movements and in North America due to labor shortages and transportation constraints. We intend to continue to work with government authorities and implement employee safety measures to minimize disruption to the manufacturing and distribution of our products. However, uncertainty in the duration and scope of the pandemic, the emergence of new variants of the virus, the likelihood of a resurgence of positive cases, the speed at which treatments and vaccines are administered and governmental actions in response to the pandemic could result in an unforeseen disruption to our supply chain and impact our operations. For example, a closure of a key manufacturing or distribution facility or the inability of a key material or transportation supplier to source and transport materials.

~~Liquidity~~. Because the pandemic, thus far, has not had a material negative impact on our operations, on the demand for our products or the resulting net sales and net earnings, it has not negatively impacted the Company’s liquidity position. We continue to generate operating cash flows to meet our short-term liquidity needs and continue to maintain access to capital markets enabled by our strong short- and long-term credit ratings.

~~Impairments. We have not observed any material impairments or other significant reductions in the fair value of our recorded assets due to the COVID-19 pandemic.~~

~~For additional information on risk factors that could impact our results,~~business, please refer to ~~“Risk Factors”~~Risk Factors in Part I, Item 1A of the Company's Form 10-K for the fiscal year ended June 30, ~~2021.~~

2022.

RESULTS OF OPERATIONS – Three Months Ended September 30, ~~2021~~2022

The following discussion provides a review of results for the three months ended September 30, ~~2021~~2022 versus the three months ended September 30, ~~2020.~~2021.


		Three Months Ended September 30				Three Months Ended September 30
Amounts in millions, except per share amounts	Amounts in millions, except per share amounts	2021	2020	% Chg	Amounts in millions, except per share amounts	2022	2021	% Chg
Net sales	Net sales	$20,338	$19,318	5%	Net sales	$20,612	$20,338	1%
Operating income	Operating income	5,023	5,281	(5)%	Operating income	4,939	5,023	(2)%
Net earnings	Net earnings	4,126	4,308	(4)%	Net earnings	3,963	4,126	(4)%
Net earnings attributable to Procter & Gamble	Net earnings attributable to Procter & Gamble	4,112	4,277	(4)%	Net earnings attributable to Procter & Gamble	3,939	4,112	(4)%
Diluted net earnings per common share	Diluted net earnings per common share	1.61	1.63	(1)%	Diluted net earnings per common share	1.57	1.61	(2)%
Core net earnings per common share		1.61	1.63	(1)%

		Three Months Ended September 30				Three Months Ended September 30
COMPARISONS AS A PERCENTAGE OF NET SALES	COMPARISONS AS A PERCENTAGE OF NET SALES	2021	2020	Basis Pt Chg	COMPARISONS AS A PERCENTAGE OF NET SALES	2022	2021	Basis Pt Chg
Gross margin	Gross margin	49.0%	52.7%	(370)	Gross margin	47.4%	49.0%	(160)
Selling, general & administrative expense	Selling, general & administrative expense	24.3%	25.3%	(100)	Selling, general & administrative expense	23.4%	24.3%	(90)
Operating income	Operating income	24.7%	27.3%	(260)	Operating income	24.0%	24.7%	(70)
Earnings before income taxes	Earnings before income taxes	24.8%	27.4%	(260)	Earnings before income taxes	24.2%	24.8%	(60)
Net earnings	Net earnings	20.3%	22.3%	(200)	Net earnings	19.2%	20.3%	(110)
Net earnings attributable to Procter & Gamble	Net earnings attributable to Procter & Gamble	20.2%	22.1%	(190)	Net earnings attributable to Procter & Gamble	19.1%	20.2%	(110)

Net Sales

Net sales for the quarter increased 5%1% to ~~$20.3 billion on a 2%~~$20.6 billion. The increase in ~~unit volume. Higher pricing increased~~ net sales was due to higher pricing of 9% and favorable mix of 1%, partially offset by 1%unfavorable foreign exchange of 6% and a decrease in unit volume of 3%. ~~Positive~~Favorable mix ~~increased net sales by 1%,~~was driven by the ~~disproportionate~~ growth of the ~~North America region, the~~Skin & Personal Care and Personal Health Care ~~business and premium products in Shave Care, Baby Care and Feminine Care, all~~businesses (both of which have higher than Company-average selling ~~prices. Favorable foreign exchange had a 1% positive impact on net sales. Excluding the impact of acquisitions and divestitures and foreign exchange, organic~~prices). Organic sales increased 4%7% on a ~~2% increase~~3% decrease in organic volume.

Net ~~sales~~Sales increased ~~high~~low single digits in Health Care, ~~increased mid-single digits in Beauty, Grooming and~~ Fabric & Home Care and ~~increased low single digits in~~ Baby, Feminine & Family ~~Care.~~Care and decreased mid-single digits in Grooming. Net Sales in Beauty were unchanged. On a regional basis, volume ~~increased mid-single~~decreased high single digits in ~~Latin America~~Europe and decreased low single digits in North America and ~~Europe,~~Greater China. These volume decreases were partially offset by a high single-digit increase in Latin America and low ~~single digit decreases~~single-digit increases in ~~Greater China,~~ Asia Pacific and IMEA.


		Net Sales Change Drivers 2021 vs. 2020 (Three Months Ended September 30, 2021) (1)								Net Sales Change Drivers 2022 vs. 2021 (Three Months Ended September 30, 2022) (1)
		Volume with Acquisitions & Divestitures	Volume Excluding Acquisitions & Divestitures	Foreign Exchange	Price	Mix	Other (2)	Net Sales Growth		Volume with Acquisitions & Divestitures	Volume Excluding Acquisitions & Divestitures	Foreign Exchange	Price	Mix	Other (2)	Net Sales Growth
Beauty	Beauty	—%	—%	3%	2%	—%	—%	5%	Beauty	(1)%	(1)%	(6)%	7%	(2)%	2%	—%
Grooming	Grooming	1%	1%	1%	2%	2%	(1)%	5%	Grooming	—%	1%	(8)%	8%	(4)%	—%	(4)%
Health Care	Health Care	3%	3%	1%	1%	3%	—%	8%	Health Care	(2)%	(2)%	(5)%	6%	4%	—%	3%
Fabric & Home Care	Fabric & Home Care	2%	2%	1%	2%	1%	(1)%	5%	Fabric & Home Care	(4)%	(4)%	(6)%	11%	1%	(1)%	1%
Baby, Feminine & Family Care	Baby, Feminine & Family Care	1%	1%	1%	(1)%	2%	—%	3%	Baby, Feminine & Family Care	(3)%	(3)%	(5)%	8%	1%	—%	1%
Total Company	Total Company	2%	2%	1%	1%	1%	—%	5%	Total Company	(3)%	(3)%	(6)%	9%	1%	—%	1%

(1)Net sales percentage changes are approximations based on quantitative formulas that are consistently applied.

(2)Other includes the sales mix impact from acquisitions and divestitures and rounding impacts necessary to reconcile volume to net sales.

Operating Costs

Gross margin decreased ~~370~~160 basis points to ~~49%~~47.4% of net sales for the quarter. The decrease in gross margin was due to:

•~~350~~510 basis points of increased commodity ~~costs,~~

•~~an 80 basis point decline from unfavorable mix, primarily due to negative product mix due to the disproportionate growth of large pack sizes, launch~~ and ~~growth of premium-priced products that are profit-accretive but have lower than Company-average gross margin and higher volumes of lower-margin display packs in certain regions and businesses, and~~input material costs,

•a ~~40 basis point~~120 basis-point decline from unfavorable product mix, primarily due to the disproportionate slowdown of SK-II, Appliances and Fabric Enhancers products, all of which have higher ~~restructuring charges versus the base period.~~than company-average gross margins,

~~These impacts were offset by:~~

•~~a 50~~40 basis ~~point increase due to higher pricing,~~points of increased transportation costs,

•30 basis points of ~~net manufacturing productivity savings (100 basis points of gross savings, partially offset by 50 basis points of increased transportation impacts and 20 basis points of~~ product and packaging investments, ~~and other impacts),~~

•a 30 basis-point decline from unfavorable foreign exchange impacts and

•20a 10 basis-point decline from decreased cost leverage.

These impacts were partially offset by

•a 470 basis-point increase due to higher pricing and

•110 basis points of ~~benefit from favorable foreign exchange impacts.~~manufacturing productivity savings.

Total SG&A spending ~~increased 1%~~decreased 2% to ~~$5.0~~$4.8 billion due to ~~increased~~decreased marketing spending partially offset by ~~a decrease in~~increased overhead costs and other operating costs. SG&A as a percentage of net sales decreased ~~100~~90 basis points to ~~24.3%~~23.4% due primarily to a decrease in marketing spending as a percentage of sales, partially offset by an increase in overhead and other operating costs as a percentage of ~~net sales and a decrease in other operating expenses as a percentage of~~ sales. ~~Overhead costs~~Marketing spending as a percentage of net sales decreased 50200 basis points ~~primarily~~ due to the positive scale impacts of the net sales increase, increased savings in promotion-related and ~~productivity savings, partially offset by inflation~~agency costs and ~~other cost increases. Other operating expenses~~lower media spending. Overhead costs as a percentage of net sales ~~decreased 60~~increased 30 basis points due to ~~a gain on the sale of operating real estate. Marketing spending as a percentage of net sales remained flat due to increased media spending,~~inflation and other cost increases, partially offset by the positive scale impacts of the net sales ~~increase~~increase. Other operating expenses as a percentage of net sales increased 80 basis points due to a prior period gain on the sale of real estate and ~~savings in agency compensation, production costs and advertising spending.~~higher foreign exchange transactional charges. Productivity-driven cost savings delivered 80120 basis points of benefit to SG&A as a percentage of net sales.

Non-Operating Expenses and Income

Interest expense was ~~$109~~$123 million for the quarter, a ~~$27 million decrease versus the prior year period driven by lower average interest rates. Interest income was $11 million for the quarter, a $1~~$14 million increase versus the prior year period. Interest income was $42 million for the quarter, a $31 million increase versus the prior year period due to higher interest rates. Other non-operating income was ~~$110~~$139 million, ~~a decrease~~an increase of ~~$32~~$29 million primarily due to ~~current~~a prior period unrealized ~~losses~~loss on equity investments.

Income Taxes

For the three months ended September 30, ~~2021,~~2022, the effective tax rate ~~decreased 60~~increased 260 basis points ~~versus the prior year period~~ to ~~18.1%~~20.7% due to:

•a 130 basis-point increase from lower excess tax benefits of share-based compensation (a 60 ~~basis point decrease~~basis-point benefit in the current period versus a 190 basis-point benefit in the prior year period),

•a 70 basis-point increase from discrete impacts related to uncertain tax positions ~~(55 basis point favorable~~(a 20 basis-point unfavorable impact in the current ~~year~~period versus a ~~5 basis point unfavorable~~50 basis-point favorable impact in the prior year period), and

•a 60 ~~basis point decrease~~basis-point increase from ~~favorable~~unfavorable impacts from the geographic mix of current year earnings.

These decreases are partially offset by a 60 basis point increase from lower excess tax benefits of share-based compensation (190 basis point reduction in the current period versus a 250 basis point reduction in the prior year period).

Net Earnings

Operating income decreased ~~$258~~$84 million, or 5%2%, to ~~$5.0~~$4.9 billion for the quarter, as the increase in net sales was more than fully offset by the decrease in operating margin, the components of which are described above. Net earnings decreased ~~$182~~$163 million, or 4%, to ~~$4.1~~$4.0 billion as the ~~decreases~~decrease in operating income and ~~other non-operating income discussed above~~an increase in effective tax rate were partially offset by ~~the decrease~~an increase in ~~the effective income tax rate.~~other non-operating income. Foreign exchange had a ~~positive~~negative impact of approximately ~~$61~~$381 million on net earnings for the quarter, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S. dollars. Net earnings attributable to Procter & Gamble decreased ~~$165~~$173 million, or 4%, to ~~$4.1~~$3.9 billion for the quarter. Diluted net earnings per share decreased 1%2% to ~~$1.61~~$1.57 versus the ~~base~~prior year period due to the decrease in net earnings, partially offset by a reduction in the weighted average number of shares outstanding.

BUSINESS SEGMENT DISCUSSION – Three Months Ended September 30, ~~2021~~2022

The following discussion provides a review of results by reportable business segment. Analysis of the results for the three month period ended September 30, ~~2021~~2022 is provided based on a comparison to the three month period ended September 30, ~~2020.~~2021. The primary financial measures used to evaluate segment performance are net sales and net earnings. The table below provides supplemental information on net sales, earnings before income taxes and net earnings by reportable business segment for the three months ended September 30, ~~2021~~2022 versus the comparable prior year period (dollar amounts in millions):


		Three Months Ended September 30, 2021													Three Months Ended September 30, 2022
		Net Sales		% Change Versus Year Ago		Earnings/(Loss) Before Income Taxes		% Change Versus Year Ago		Net Earnings		% Change Versus Year Ago			Net Sales		% Change Versus Year Ago		Earnings/(Loss) Before Income Taxes		% Change Versus Year Ago		Net Earnings/(Loss)		% Change Versus Year Ago
Beauty	Beauty	$	3,964	5	%	$	1,242	1	%	$	991	2	%	Beauty	$	3,961	—	%	$	1,271	2	%	$	1,011	2	%
Grooming	Grooming	1,687		5	%	518		22	%	417		17	%	Grooming	1,625		(4)	%	503		(3)	%	404		(3)	%
Health Care	Health Care	2,676		8	%	695		2	%	529		1	%	Health Care	2,757		3	%	800		15	%	617		17	%
Fabric & Home Care	Fabric & Home Care	7,009		5	%	1,546		(11)	%	1,191		(12)	%	Fabric & Home Care	7,082		1	%	1,543		—	%	1,172		(2)	%
Baby, Feminine & Family Care	Baby, Feminine & Family Care	4,864		3	%	1,075		(18)	%	826		(18)	%	Baby, Feminine & Family Care	4,934		1	%	1,055		(2)	%	805		(3)	%
Corporate	Corporate	138		N/A		(41)		N/A		172		N/A		Corporate	253		N/A		(175)		N/A		(46)		N/A
Total Company	Total Company	$	20,338	5	%	$	5,035	(5)	%	$	4,126	(4)	%	Total Company	$	20,612	1	%	$	4,997	(1)	%	$	3,963	(4)	%

Beauty

Three months ended September 30, ~~2021~~2022 compared with three months ended September 30, ~~2020~~2021

Beauty net sales ~~increased 5% to~~were unchanged at $4.0 billion, onas the positive impact from higher pricing of 7% and from acquisitions of 2% was fully offset by unfavorable foreign exchange of 6%, unfavorable mix of 2% (due primarily to the decline of SK-II brand, which has higher than segment-average selling prices) and a decrease in unit volume ~~that was unchanged. Higher pricing increased net sales by 2%~~of 1%. ~~Foreign~~Excluding the impact of acquisitions and foreign exchange, ~~impacts increased net sales by 3%. Organic~~organic sales increased 2%4%. Global market share of the Beauty segment increased ~~0.1~~0.5 points.

•Hair Care net sales increased mid-single digits on flat volume due to inflation-related price increases, favorable foreign exchange impacts and favorable mix driven by the higher proportion of sales of premium tier products including treatments and conditioners, all of which have higher than category-average selling prices. Organic sales increaseddecreased low single digits. ~~Volume increased mid-single digits~~Negative impacts of a decrease in ~~IMEA (due to increased demand following pandemic-related shutdowns)~~unit volume and ~~low single digits~~unfavorable foreign exchange were partially offset by higher pricing (in all regions). The volume decrease was driven primarily by declines in Europe (due to ~~innovation~~portfolio reduction in Russia), Greater China (related to market contraction) and North America (due to market ~~recovery, partially offset~~contraction and increased pricing). Organic sales increased mid-single digits driven by ~~declines following increased pricing~~a double-digit growth in ~~certain markets). This volume increase was~~Latin America and Europe, a high single-digit growth in IMEA and a mid-single-digit growth in North America, partially offset by a ~~mid-single digit~~mid-single-digit decline in Greater ~~China (due to trade inventory reductions and to a lesser extent, a slowdown in e-commerce consumption) and a low single digit decline in Latin America (due to increased pricing).~~China. Global market share of the Hair Care category decreased ~~more than half~~ a point.

•Skin and Personal Care net sales increased ~~mid-single digits due to a~~ low single ~~digit~~digits. Positive impacts of a volume increase, ~~in volume, increased~~higher pricing and ~~favorable foreign exchange impacts,~~a benefit from acquisitions were partially offset by ~~negative geographic~~unfavorable foreign exchange and unfavorable mix ~~caused~~(due to the decline of SK-II brand, which has higher than category-average selling prices). Volume increase was primarily driven by ~~pandemic-related shutdowns. Organic sales increased low single digits. Volume increased high teens~~growth in ~~Latin~~North America (due to ~~pandemic-related consumption declines in the base period)~~innovation) and ~~increased double digits~~Latin America, partially offset by a decline in Greater China (due to ~~new innovation, e-commerce growth~~pandemic-related lockdowns) and ~~customer inventory build-up). This volume~~Asia Pacific. Organic sales increased mid-single digits as a mid-teens increase in North America

was partially offset by a ~~high single digit~~low single-digit decrease in Asia Pacific (due to pandemic-related consumption increases in the base period and inventory destocking) and mid-single digit decreases in Europe and in North America (due to pandemic-related consumption increases in the base period and to a lesser extent, current period port congestion related supply constraints).Greater China. Global market share of the Skin and Personal Care category increased ~~less~~more than ~~half~~ a point.

Net earnings increased 2% to ~~$991 million due to the increase in net sales partially offset by an 80 basis point decrease in net earnings margin. The net earnings margin decreased primarily~~$1.0 billion due to a reduction in gross margin driven by increased commodity costs and negative geographic mix due to pandemic-related shutdowns, partially offset by the positive impacts of increased pricing, favorable foreign exchange and manufacturing cost savings. SG&A as a percentage of net sales increased marginally due to an increase in media spending.

~~Grooming~~

~~Three months ended September 30, 2021 compared with threemonths ended September 30, 2020~~

Grooming net sales increased 5% to $1.7 billion on a 1% increase in unit volume. Increased pricing had a positive 2% impact on net sales. Favorable mix had a positive 2% impact on net sales due to growth in North America and premium shave care products, both of which have higher than segment-average selling prices. Foreign exchange increased net sales by 1%. Organic sales increased 4%. Global market share of the Grooming segment increased 1.1 points.

•Shave Care net sales increased high single digits due to a low single digit volume increase, increased pricing, favorable mix (due to growth in North America and the disproportionate growth of premium female shave systems products, both of which have higher than category-average selling prices) and favorable foreign exchange impacts. Organic sales increased mid-single digits. Volume increased double digits in North America, mid-single digits in Latin America and low single

digits in Europe due to innovation and market size increases versus a base period that was negatively impacted by the pandemic. This was partially offset by a high single digit decrease in Asia Pacific and mid-single digit declines in Greater China and in IMEA due to trade destocking in certain markets and lower consumer promotions. Global market share of the Shave Care category increased more than half a point.

•Appliances net sales decreased low single digits primarily due to a double digit volume decrease, partially offset by favorable mix (due to the disproportionate growth of premium female epilators and shavers) and favorable foreign exchange impacts. Organic sales decreased mid-single digits. Volume declined about 20% in North America and decreased double digits in Europe due to a pandemic-related consumption increase of at-home grooming and styling products in the base period. Global market share of the Appliances category increased more than half a point.

~~Net earnings increased 17% to $417 million due to the increase in net sales and a 250~~50 basis-point increase in net earnings margin. ~~The net~~Net earnings margin increased due to ~~an increase in gross margin and~~ a reduction in SG&A as a percentage of net sales, partially offset by a ~~higher effective tax rate.~~decrease in gross margin. The gross margin ~~increase~~reduction was driven by ~~manufacturing cost savings~~increased commodity and ~~increased selling prices,~~input material costs, transportation costs and negative product mix due to the decline of the super-premium SK-II brand, partially offset by ~~negative mix driven by the launch of premium-priced, profit-accretive products that have lower than segment-average gross margins.~~increased pricing. SG&A as a percentage of net sales decreased primarily due to a decrease in marketing spending.

Grooming

Three months ended September 30, 2022 compared with threemonths ended September 30, 2021

Grooming net sales decreased 4% to $1.6 billion driven by unfavorable foreign exchange of 8% and unfavorable mix of 4% (due to decline of Appliances, which have higher than segment-average selling prices), partially offset by higher pricing of 8% (driven by Europe, North America, Latin America and Asia Pacific). Unit volume was unchanged as increases in Asia Pacific, Europe and IMEA were fully offset by a decline in North America (as a result of increased pricing) and a minor divestiture. Grooming organic sales increased 5% on a 1% increase in organic volume. Organic sales increased more than 20% in Asia Pacific, high teens in Latin America, mid-teens in IMEA and low single digits in Europe. This was partially offset by a low single-digit decline in North America. Global market share of the ~~positive~~Grooming segment increased 0.7 points.

Net earnings decreased 3% to $404 million due to the decrease in net sales. Net earnings margin was unchanged as a decrease in SG&A as a percentage of net sales was mostly offset by a higher effective tax rate. The gross margin remained unchanged as increases due to higher pricing and manufacturing cost savings were fully offset by decreases due to commodity and input material cost increases, unfavorable foreign exchange and negative geographic mix caused by the disproportionate volume growth of Latin America and Asia Pacific (which have lower than segment-average gross margins). SG&A as a percentage of net sales decreased as increased efficiencies in marketing spending were partially offset by the negative scale impacts of the net sales ~~increase.~~decrease. The higher effective tax rate was driven by ~~disproportionate growth~~a higher proportion of net sales in North ~~America.~~America, which has higher than Company-average tax rates.

Health Care

Three months ended September 30, ~~2021~~2022 compared with three months ended September 30, ~~2020~~2021

Health Care net sales increased 8%3% to ~~$2.7~~$2.8 billion ~~on a 3% increase~~driven by higher pricing of 6% and favorable mix of 4% (due to volume growth in ~~unit volume. Favorable mix increased net sales by 3% due to the disproportionate growth of the~~ North America ~~region~~ and the Personal Health Care category, both of which have higher than ~~segment average~~segment-average selling ~~prices. Increased pricing had~~prices), partially offset by unfavorable foreign exchange of 5% and a ~~1% positive impact on net sales. Foreign exchange had a 1% positive impact on net sales.~~decrease in unit volume of 2%. Organic sales increased 7%8%. Global market share of the Health Care segment ~~increased 0.2~~decreased 0.7 points.

•Oral Care net sales ~~increased mid-single digits as a~~decreased low single ~~digit decrease in~~digits. Negative impacts of a volume ~~was more than~~decline and unfavorable foreign exchange were partially offset by ~~positive~~increased pricing and favorable product mix ~~impacts from~~(driven by the growth of ~~premium~~ power brush ~~toothpaste~~ and ~~manual brush~~premium paste products, both of which have higher than category-average selling prices). Volume decline was primarily driven by North America (due to market contraction and ~~favorable foreign exchange impacts.~~increased pricing), Europe (due to portfolio reduction in Russia and increased pricing), Greater China (due to market contraction) and IMEA, partially offset by growth in Latin America. Organic sales increased low single ~~digits. The volume decrease was~~digits driven by ~~a mid-teens decline in Greater China and a mid-single digit decline~~an increase of about 20% in Latin America ~~both due to increased competitive activity,~~ and a low single ~~digit decline~~digits in ~~Europe due to lower shipments. These volume decreases were~~North America, partially offset by ~~a double digit increase~~low single-digit decreases in ~~IMEA~~Europe and ~~a low single digit increase in North America both due to innovation.~~Greater China. Global market share of the Oral Care category ~~increased nearly a point.~~decreased slightly.

•Personal Health Care net sales increased ~~mid-teens due to~~double digits. Positive impacts of a ~~double digit~~volume increase, ~~in volume, inflation-related price increases~~higher pricing (driven primarily by North America and Latin America) and favorable mix (due to the disproportionate volume growth of North America and respiratory products, both of which have higher than category-average selling prices) were partially offset by unfavorable foreign exchange. ~~Organic sales increased double digits.~~ Volume ~~increased more than 40% in APAC, increased mid-teens~~increase was driven by growth in North America and Europe (both due to a stronger respiratory season), partially offset by a decline in IMEA (versus a base period impacted by pandemic-related consumption increases in certain markets). Organic sales increased ~~mid-single digits~~high teens driven by growth in all regions led by a more than 20% growth in North America, about 20% growth in Europe and double-digit growth in Latin ~~America and IMEA due to market recovery of respiratory products and innovation across segments.~~America. Global market share of the Personal Health Care category ~~was unchanged.~~decreased more than half a point.

Net earnings increased 1%17% to ~~$529~~$617 million due to the increase in net sales ~~partially offset by~~and a ~~140~~260 basis-point ~~decrease~~increase in net earnings margin. Net earnings margin ~~decreased~~increased due primarily to a decrease in ~~gross margin, an increase in~~ SG&A as a ~~percentage~~percentage of net sales and a slight increase in gross margin. ~~a decrease in other non-operating income.~~ The ~~decrease~~increase in gross margin was driven by increased ~~commodity~~pricing and ~~transportation costs, and unfavorable~~favorable mix ~~caused~~(caused by the disproportionate growth of ~~premium-priced, profit-accretive~~respiratory products that have ~~lower~~higher than segment-average gross ~~margins. These decreases are~~ ~~partially~~margins), mostly offset by ~~manufacturing cost savings,~~ increased ~~pricing~~commodity and ~~favorable foreign exchange.~~input material costs. SG&A as a percentage of net sales increased primarily due to an increase in media spending behind innovation support, partially offset by the positive scale impacts of the net sales increase. Non-operating income as a percentage of net sales decreased due to ~~a minor brand divestiture gain~~the positive scale impacts of the net sales increase and higher efficiencies in ~~the base period.~~marketing spending.

Fabric & Home Care

Three months ended September 30, ~~2021~~2022 compared with three months ended September 30, ~~2020~~2021

Fabric & Home Care net sales increased 5%1% to ~~$7.0~~$7.1 billion ondriven by higher pricing of 11% and favorable mix of 1% (due to a ~~2% increase~~disproportionate volume decline in ~~unit volume. Higher pricing increased net sales by 2%. Favorable mix increased net sales by 1% due to the disproportionate growth of the North America region and premium forms in Fabric Care, all of~~Europe, which ~~have higher~~has lower than segment-average selling ~~prices. Foreign~~prices), partially offset by unfavorable foreign exchange ~~had~~of 6% and a ~~1% positive impact to net sales.~~decrease in unit volume of 4%. Organic sales increased 5%8%. Global market share of the Fabric & Home Care segment ~~increased 1.3 points.~~was unchanged.

•Fabric Care net sales increased ~~high~~low single ~~digits due~~digits. Positive impacts of higher pricing (driven primarily by North America, Europe and Latin America) and favorable mix (due to a ~~low single digit increase~~volume decline in ~~volume, increased pricing, favorable~~Europe, which has lower than category-average selling prices) were partially offset by unfavorable foreign exchange and ~~positive mix impacts due~~a decrease in unit volume. The volume decrease was primarily driven by declines in Europe (due to ~~the growth of the~~portfolio reduction in Russia and increased pricing) and North America ~~region~~(due to market contraction) partially offset by growth in Asia Pacific, Latin America and ~~premium forms like fabric enhancer beads and laundry unit dose, all of which have higher than category-average selling prices.~~IMEA. Organic sales increased high single ~~digits. Increased volume was~~digits driven by ~~high single~~a more than 30% growth in Latin America, more than 20% growth in IMEA, mid-teens growth in Asia Pacific, mid-single digit ~~increases~~growth in North America and ~~Latin America (due to innovation, including fabric enhancers and unit dose, and increased distribution) and a~~ low ~~single digit increase~~single-digit growth in ~~Europe (due to innovation), partially offset by a low single digit decline in Asia Pacific (due to pandemic-related lockdowns in certain markets).~~Europe. Global market share of the Fabric Care category ~~increased more~~decreased less than a point.

•Home Care net sales ~~increased low single digits due~~were unchanged. Positive impacts of higher pricing (driven primarily ~~to increased pricing, partially offset~~ by ~~a low single digit decrease in volume~~Europe and ~~unfavorable~~North America) and favorable mix ~~due~~(due to a volume ~~decrease~~decline in ~~the North America region~~Europe, which has ~~a higher~~lower than category-average selling ~~price. Organic sales also increased low single digits.~~prices) were fully offset by unfavorable foreign exchange and a decrease in unit volume. The volume decrease was driven by declines in Europe and North America, both due to market contraction versus a ~~low~~high base period of increased consumption of cleaning products. Organic sales increased high single ~~digit decline~~digits driven by about 40% growth in Latin America, double-digit growth in Europe and mid-single-digit growth in North ~~America (due to pandemic-related consumption increases in the base period), partially offset by a low single digit increase in Europe (due to innovation).~~America. Global market share of the Home Care category increased ~~more than~~ a point.

Net earnings decreased ~~12%~~2% to $1.2 billion as the increase in net sales was more than offset by a ~~330 basis point~~50 basis-point reduction in net earnings margin. Net earnings margin decreased due primarily to a reduction in gross ~~margin.~~margin, partially offset by a reduction in SG&A as a percentage of net sales. The gross margin decrease was driven by an increase in commodity and input material costs, transportation costs, unfavorable foreign exchange and ~~unfavorable~~negative product mix ~~caused by the growth~~(due to decline of ~~premium-priced, profit-accretive products~~fabric enhancers that have ~~lower~~higher than segment-average gross ~~margins,~~ margins), partially offset by increased ~~selling prices.~~pricing. SG&A as a percentage of net sales ~~declined marginally~~decreased due to the positive scale benefits of the net sales ~~increase.~~increase and increased efficiencies in marketing spending.

Baby, Feminine & Family Care

Three months ended September 30, ~~2021~~2022 compared with three months ended September 30, ~~2020~~2021

Baby, Feminine & Family Care net sales increased 3%1% to $4.9 billion ondriven by higher pricing of 8% and favorable product and geographic mix of 1%, partially offset by unfavorable foreign exchange of 5% and a ~~1% increase~~decrease in unit ~~volume. Favorable mix had a 2% positive impact to net sales due to the disproportionate growth~~volume of North America and growth of premium diaper pants and adult incontinence products, all of which have higher than segment-average selling prices. Foreign exchange had a positive 1% impact to net sales. Lower pricing reduced net sales by 1% due to increased promotional spending related to Family Care products.3%. Organic sales increased 2%6%. Global market share of the Baby, Feminine & Family Care segment ~~increased 0.7 points.~~was unchanged.

•Baby Care net sales ~~increased high single digits due to a~~decreased low single ~~digit increase~~digits. Negative impacts of a decrease in unit volume ~~inflation-driven price increases, positive~~and unfavorable foreign exchange were partially offset by higher pricing (driven primarily by Europe, North America and Latin America) and favorable product mix (due to ~~the~~a higher proportion of pants, which have higher than category-average selling prices). The volume decrease was driven by declines in Europe (due primarily to portfolio reduction in Russia), North America and Greater China (due to market contraction), partially offset by growth ~~of premium pants~~in Latin America and ~~taped diaper products) and favorable foreign exchange impact.~~IMEA. Organic sales increased mid-single ~~digits. Volume increased mid-teens~~digits driven by more than 30% growth in Latin America, ~~(due to innovation)~~low teens growth in IMEA, mid-single-digit growth in North America and ~~increased mid-single digits~~low single-digit growth in Europe, ~~(due to increased consumption following pandemic-related slowdowns),~~ partially offset by ~~a double digit~~high single-digit decline in Greater ~~China (due to increased competitive activity and trade inventory reductions) and a high single digit decline in Asia Pacific (due to market size declines).~~China. Global market share of the Baby Care category ~~was unchanged.~~increased more than half a point.

•Feminine Care net sales increased ~~high single digits due to a low single digit increase in volume, favorable foreign exchange, increased~~mid-single digits. Positive impacts of higher pricing ~~and positive mix driven~~(driven primarily by ~~the growth of the~~ North America ~~region~~ and ~~the growth of premium adult incontinence~~Europe) and ~~premium pads and tampons, all of~~favorable mix (due to volume decline in Europe, which ~~have higher~~has lower than category-average selling ~~prices. Organic sales increased mid-single digits. Volume increased double digits~~prices) were partially offset by unfavorable foreign exchange and a decrease in unit volume. The volume decrease was driven by declines in Europe (due to portfolio reduction in Russia), North America (due to ~~innovation~~supply constraints) and ~~distribution gains) and low single digits in Europe~~IMEA (due to ~~trade inventory build ahead of price increases)~~increased pricing in certain markets), partially offset by ~~mid-single digit volume decreases~~growth in ~~IMEA (due to pandemic-related~~Latin America. Organic sales increased ~~consumption~~double digits driven by growth in ~~base period), in Greater China (due to lower consumption) and~~all regions led by a more than 30% increase in Latin America, ~~(due to increased competitive activity).~~mid-teens increase in Europe and double-digit increases in North America and Asia Pacific. Global market share of the Feminine Care category increased ~~nearly~~half a point.

•Net sales in Family Care, which is predominantly a North ~~American~~America business, ~~net sales decreased mid-single digits as a~~increased low single ~~digit increase~~digits driven by higher pricing, partially offset by a decrease in unit volume (due to market contraction and increased promotional events) was more than offset by lower pricing (in the form of increased promotional spending versus a low base period impacted by the pandemic) and unfavorable mix (due to disproportionate growth of large count packs)competitive activity). Organic sales also ~~decreased mid-single~~increased low single digits. North America share of the Family Care category ~~increased almost two points.~~decreased more than a point.

Net earnings decreased ~~18%~~3% to ~~$826~~$805 million as the increase in net sales was more than offset by a ~~440~~70 basis-point decrease in net earnings margin. Net earnings margin decreased primarily due to a decrease in gross margin, partially offset by lower SG&A as

a percentage of net sales. Gross margin decreased primarily due to an increase in commodity and ~~transportation~~input material costs and ~~lower selling prices,~~transportation costs, partially offset by ~~favorable foreign exchange.~~increased pricing. SG&A as a percentage of net sales decreased due to ~~reductions~~the positive scale benefits of the net sales increase and increased efficiencies in ~~both~~ marketing ~~and overhead costs.~~

spending.

Corporate

Corporate includes certain operating and non-operating activities not allocated to specific business segments. These ~~include: the~~include but are not limited to incidental businesses managed at the corporate ~~level; financing and investing activities; certain employee benefit costs; other general corporate items; the~~level, gains and losses related to certain divested brands or businesses, impacts from various financing and ~~categories;~~investing activities, impacts related to employee benefits, asset impairments and ~~certain restructuring-type~~restructuring activities ~~to maintain a competitive cost structure,~~ including manufacturing and workforce optimization. Corporate also includes reconciling items to adjust the accounting policies used inwithin the reportable segments to U.S. GAAP. The most ~~significant~~notable ongoing reconciling item ~~relates to~~is income taxes, ~~to adjust from~~which adjusts the blended statutory rates that are reflected in the reportable segments to the overall Company effective tax rate.

Corporate net sales improved by ~~$45~~$115 million to ~~$138~~$253 million, due to an increase in sales of ~~the~~ incidental businesses managed at the corporate level. Corporate net earnings ~~improved~~decreased $218 million to a loss of $46 million as the benefit of the net sales growth was more than offset by ~~$79 million in the quarter primarily due to~~higher foreign exchange transactional charges, lower ~~overhead costs and a~~current period tax benefits (primarily lower excess tax benefits of share-based compensation), prior period gain on the sale of real ~~estate.~~estate and increased commodity costs tied to the aforementioned incidental businesses.

LIQUIDITY & CAPITAL RESOURCES

Operating Activities

We generated ~~$4.6~~$4.1 billion of cash from operating activities fiscal year to date, a decrease of ~~$96~~$573 million versus the prior year period. Net earnings, adjusted for non-cash items (depreciation and amortization, share-based compensation expense, deferred income taxes and gain on sale of assets), generated ~~$4.9~~$4.6 billion of operating cash flow. Working capital and other impacts used ~~$294~~$530 million of cash in the period. Accounts receivable increased, using ~~$1.0 billion~~$740 million of cash, ~~primarily due to~~driven by sales ~~growth.~~growth across regions. Days sales outstanding ~~also~~ increased ~~about three days driven~~ by ~~a higher relative amount of sales towards the end of the quarter. Inventory~~two days. Total inventories increased, consuming ~~$409~~$893 million of cash ~~primarily due~~driven by increased safety stock levels to ~~input cost increases~~strengthen supply chain sufficiency amidst business growth and ~~inventory pre-builds for initiatives and seasonality in certain categories. Inventory days~~increased commodity costs. Days on hand ~~decreased~~increased by ~~three~~four days. Accounts payable, accrued and other net operating assets and liabilities increased, generating ~~$1.1~~$1.0 billion of ~~cash. This was primarily~~cash, driven by higher trade payables ~~caused by~~from an increase in supply chain ~~costs (commodities, transportation, etc.)~~activities and ~~to a lesser extent, extended payment terms with our suppliers,~~current year tax accruals in excess of estimated payments. This is partially offset by the payment of prior fiscal year-end incentive compensation and other salary-related accruals. ~~The number of days~~Days payable outstanding ~~stayed relatively flat at 86 days.~~increased by one day.

Investing Activities

Investing activities used ~~$1.0 billion~~$832 million of cash fiscal year to date primarily ~~due to~~driven by capital expenditures.

Financing Activities

Financing activities used ~~$3.4~~$3.5 billion of net cash fiscal year to date. We used ~~$2.8~~$4.0 billion for treasury stock purchases and ~~$2.2~~$2.3 billion for dividends. ~~The increase in~~We generated $2.6 billion from net ~~short-term~~ debt increases and $188 million from the exercise of stock options and other ~~financing activities generated $1.6 billion of cash.~~impacts.

As of September 30, ~~2021,~~2022, our current liabilities exceeded current assets by ~~$12.3~~$14.1 billion. We have short- and long-term debt to meet our financing needs. We anticipate being able to support our short-term liquidity and operating needs largely through cash generated from operations. We have strong short- and long-term debt ratings that have enabled and should continue to enable us to refinance our debt as it becomes due at favorable rates in commercial paper and bond markets. In addition, we have agreements with a diverse group of financial institutions that, if needed, should provide sufficient credit funding to meet short-term financing requirements.

RECONCILIATION OF MEASURES NOT DEFINED BY U.S. GAAP

In accordance with the SEC's Regulation S-K Item 10(e), the following provides definitions of the non-GAAP measures and the reconciliation to the most closely related GAAP measure. Management believes that these non-GAAP measures provide useful perspective on underlying business trends and provide a supplemental measure of period-to-period financial results. Disclosing these non-GAAP financial measures allows investors and management to view our operating results excluding the impact of items that are not reflective of the underlying operating performance. Management uses these non-GAAP measures in making operating decisions, allocating financial resources and for business strategy purposes. Certain of these measures are also used to evaluate senior management and are a factor in determining their at-risk compensation. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with ~~GAAP results.~~GAAP. Our non-GAAP financial measures do not represent a comprehensive basis of accounting. Therefore, our non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies.

Organic sales growth:Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions and divestitures and foreign exchange from year-over-year comparisons. We believe this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. This measure is used in assessing achievement of management goals for at-risk compensation.

Adjusted free cash flow: Adjusted free cash flow is defined as operating cash flow less capital spending and ~~excluding payments for the~~ transitional tax payments resulting from the U.S. Tax Act ~~(the Company incurred a transitional tax liability of approximately $3.8 billion~~beginning in ~~fiscal 2018 from the U.S. Tax Act of 2017, which is payable over a period of 8 years).~~2019. Adjusted free cash flow represents the cash that the Company is able to generate after taking into account planned maintenance and asset

expansion. Management views adjusted free cash flow as an important measure because it is one factor used in determining the amount of cash available for dividends, share repurchases, acquisitions and other discretionary investments.

Adjusted free cash flow productivity: Adjusted free cash flow productivity is defined as the ratio of adjusted free cash flow to net earnings. Management views adjusted free cash flow productivity as a useful measure to help investors understand P&G’s ability to generate cash. Adjusted free cash flow productivity is used by management in making operating decisions, allocating financial resources and for budget planning purposes. This measure is also used in assessing the achievement of management goals for at-risk compensation. ~~The Company's long-term target is to generate annual adjusted free cash flow productivity at or above 90 percent.~~

Core EPS: Core earnings per share, or Core EPS, is a measure of the Company's diluted net earnings per share excluding items that are not judged to be part of the Company's sustainable results or trends. For the three months ended September 30, ~~2021 compared with the three months ended~~2022 and September 30, ~~2020,~~2021, there ~~are~~were no adjustments to or reconciling items for diluted net earnings per share. Management views this non-GAAP measure as a useful supplemental measure of Company performance over time. This measure is also used when evaluating senior management in determining their at-risk compensation.

Organic sales growth:
Three Months Ended September 30, 2021 Net Sales Growth Foreign Exchange Impact
Acquisition & Divestiture Impact/Other (1)
Organic Sales Growth
Beauty 5% (3)% —% 2%
Grooming 5% (1)% —% 4%
Health Care 8% (1)% —% 7%
Fabric & Home Care 5% (1)% 1% 5%
Baby, Feminine & Family Care 3% (1)% —% 2%
Total Company 5% (1)% —% 4%


Three Months Ended September 30, 2022	Net Sales Growth	Foreign Exchange Impact	Acquisition & Divestiture Impact/Other (1)	Organic Sales Growth
Beauty	—%	6%	(2)%	4%
Grooming	(4)%	8%	1%	5%
Health Care	3%	5%	—%	8%
Fabric & Home Care	1%	6%	1%	8%
Baby, Feminine & Family Care	1%	5%	—%	6%
Total Company	1%	6%	—%	7%

(1)~~Acquisitions/~~Acquisitions & Divestiture Impact/Other includes the volume and mix impact of acquisitions and divestitures and rounding impacts necessary to reconcile net sales to organic sales.

Adjusted free cash flow (dollar amounts in millions):
Three Months Ended September 30, 2021
Operating Cash Flow Capital Spending U.S. Tax Act Payments Adjusted Free Cash Flow
$4,643 $(1,091) $225 $3,777


Three Months Ended September 30, 2022
Operating Cash Flow	Capital Spending	U.S. Tax Act Payments	Adjusted Free Cash Flow
$4,070	$(890)	$225	$3,405

Adjusted free cash flow productivity (dollar amounts in millions):
Three Months Ended September 30, 2021
Adjusted Free Cash Flow Net Earnings Adjusted Free Cash Flow Productivity
$3,777 $4,126 92%


Three Months Ended September 30, 2022
Adjusted Free Cash Flow	Net Earnings	Adjusted Free Cash Flow Productivity
$3,405	$3,963	86%


Item 3.			Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in the Company’s exposure to market risk since June 30, ~~2021.~~2022. Additional information can be found in Note 79 - Risk Management Activities and Fair Value Measurements of the Consolidated Financial Statements.


Item 4.			Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s Chairman of the Board, President and Chief Executive Officer, ~~David S. Taylor,~~Jon R. Moeller, and the Company’s Chief Financial Officer, Andre Schulten, performed an evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 ~~(“Exchange Act”)~~(Exchange Act)) as of the end of the period covered by this report. Messrs. ~~Taylor~~Moeller and Schulten have concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (2) accumulated and communicated to our management, including Messrs. ~~Taylor~~Moeller and Schulten, to allow their timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the Company’s fiscal quarter ended September 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION


Item 1.			Legal Proceedings

The Company is subject, from time to time, to certain legal proceedings and claims arising out of our business, which cover a wide range of matters, including antitrust and trade regulation, product liability, advertising, contracts, environmental issues, patent and trademark matters, labor and employment matters and tax. In addition, SEC regulations require that we disclose certain environmental proceedings arising under Federal, State or local law when a governmental authority is a party and such proceeding involves potential monetary sanctions that the Company reasonably believes will exceed a certain threshold ($1 million or more).

There are no relevant matters to disclose under this Item for this period.


Item 1A.			Risk Factors

For information on risk factors, please refer to "Risk Factors" in Part I, Item 1A of the Company's Form 10-K for the fiscal year ended June 30, ~~2021.~~2022.


Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SECURITIES
Period
Total Number of Shares Purchased (1)
Average Price Paid per Share (2)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)
Approximate Dollar Value of Shares That May Yet Be Purchased Under Our Share Repurchase Program
7/01/2021 - 7/31/2021 8,475,371 $138.46 6,470,128 (3)
8/01/2021 - 8/31/2021 6,281,791 $143.27 6,281,791 (3)
9/01/2021 - 9/30/2021 6,600,892 $143.92 6,600,892 (3)
Total 21,358,054 $141.56 19,352,811


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share (2)	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)	Approximate Dollar Value of Shares That May Yet Be Purchased Under Our Share Repurchase Program
7/01/2022 - 7/31/2022	6,223,741	$144.15	4,865,898	(3)
8/01/2022 - 8/31/2022	11,296,995	$146.06	11,296,995	(3)
9/01/2022 - 9/30/2022	12,025,751	$137.21	12,025,751	(3)
Total	29,546,487	$142.06	28,188,644

(1)All transactions are reported on a trade date basis and were made in the open market with large financial institutions. This table excludes shares withheld from employees to satisfy ~~minimum~~ tax withholding requirements on option exercises and other equity-based transactions. The Company administers cashless exercises through an independent third party and does not repurchase stock in connection with cashless exercises.

(2)Average price paid per share for open market transactions excludes commission.

(3)On October 19, ~~2021,~~2022, the Company stated that in fiscal year ~~2022~~2023 the Company expects to reduce outstanding shares through direct share repurchases at a value of $7$6 to $9$8 billion, notwithstanding any purchases under the Company's compensation and benefit plans. Purchases may be made in the open market and/or private transactions and purchases may be increased, decreased or discontinued at any time without prior notice. The share repurchases are authorized pursuant to a resolution issued by the Company's Board of Directors and are expected to be financed by a combination of operating cash flows and issuance of ~~long-term and short-term~~ debt.


Item 6.			Exhibits


~~3-1~~						Amended Articles of Incorporation (as amended by shareholders at the annual meeting on October 11, 2011 and consolidated by the Board of Directors on April 8, 2016) (Incorporated by reference to Exhibit (3-1) of the Company's Form 10-K for the year ended June 30, 2016).

~~3-2~~						Regulations (as approved by the Board of Directors on April 8, 2016, pursuant to authority granted by shareholders at the annual meeting on October 13, 2009) (Incorporated by reference to Exhibit (3-2) of the Company's Form 10-K for the year ended June 30, 2016).

~~10-1~~						~~Summary of the Company’s Short Term Achievement Reward Program* +~~

~~10-2~~						~~Short Term Achievement Reward Program - Related Correspondence and Terms and Conditions* +~~

~~10-3~~						~~Long-Term Incentive Program - Related Correspondence and Terms and Conditions* +~~

~~10-4~~						~~Performance Stock Program - Related Correspondence and Terms and Conditions* +~~

~~10-5~~						~~Summary of Additional Personal Benefits Available to Certain Officers and Non-Employee Directors* +~~

~~31.1~~						~~Rule 13a-14(a)/15d-14(a) Certification – Chief Executive Officer +~~

~~31.2~~						~~Rule 13a-14(a)/15d-14(a) Certification – Chief Financial Officer +~~

~~32.1~~						~~Section 1350 Certifications – Chief Executive Officer +~~

~~32.2~~						~~Section 1350 Certifications – Chief Financial Officer +~~

~~101.SCH~~ ~~(1)~~						~~Inline XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~ ~~(1)~~						~~Inline XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~ ~~(1)~~						~~Inline XBRL Taxonomy Definition Linkbase Document~~

~~101.LAB~~ ~~(1)~~						~~Inline XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~ ~~(1)~~						~~Inline XBRL Taxonomy Extension Presentation Linkbase Document~~

~~104~~						~~Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)~~


*			~~Compensatory plan or arrangement~~

+			~~Filed herewith~~

~~(1)~~			Pursuant to Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 or 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

~~Pursuant to the requirements 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.~~

~~THE PROCTER & GAMBLE COMPANY~~

~~October 19, 2021~~

~~/s/ MICHAEL G. HOMAN~~

~~Date~~

~~(Michael G. Homan)~~

Senior Vice President - Chief Accounting Officer
(Principal Accounting Officer)

~~EXHIBIT INDEX~~


~~Exhibit~~

3-1						Amended Articles of Incorporation (as amended by shareholders at the annual meeting on October 11, 2011 and consolidated by the Board of Directors on April 8, 2016) (Incorporated by reference to Exhibit (3-1) of the Company's Form 10-K for the year ended June 30, 2016)

3-2						Regulations (as approved by the Board of Directors on April 8, 2016, pursuant to authority granted by shareholders at the annual meeting on October 13, 2009) (Incorporated by reference to Exhibit (3-2) of the Company's Form 10-K for the year ended June 30, 2016)

~~10-1~~						~~Summary of the Company’s Short Term Achievement Reward Program~~ +

~~10-2~~						~~Short Term Achievement Reward Program - Related Correspondence and Terms and Conditions~~ +

~~10-3~~						~~Long-Term Incentive Program - Related Correspondence and Terms and Conditions~~ +

~~10-4~~						~~Long-Term Incentive Program - Related Correspondence and Terms and Conditions~~ +

~~10-5~~						~~Long-Term Incentive Program - Related Correspondence and Terms and Conditions~~ +

31.1						~~Rule 13a-14(a)/~~Rule 13a-14(a)/15d-14(a) Certification – Chief Executive Officer +

31.2						Rule 13a-14(a)/15d-14(a) Certification – Chief Financial Officer +

32.1						Section 1350 Certifications – Chief Executive Officer +

32.2						Section 1350 Certifications – Chief Financial Officer +

101.SCH (1)						Inline XBRL Taxonomy Extension Schema Document

101.CAL (1)						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF (1)						Inline XBRL Taxonomy Definition Linkbase Document

101.LAB (1)						Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE (1)						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)


+			Filed herewith

(1)			Pursuant to Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 or 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

Pursuant to the requirements 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.

THE PROCTER & GAMBLE COMPANY

October 19, 2022

/s/ MATTHEW W. JANZARUK

Date

(Matthew W. Janzaruk)

Senior Vice President - Chief Accounting Officer
(Principal Accounting Officer)


	Investment Securities		Post-retirement Benefits		Foreign Currency Translation		Total AOCI
Balance at June 30, 2021	$	15	$	(2,963)	$	(10,796)	$	(13,744)
OCI before reclassifications (1)	5		80		(465)		(380)
Amounts reclassified from AOCI into the Consolidated Statements of Earnings (2)	0		62		0		62
Net current period OCI	5		142		(465)		(318)
Less: Other comprehensive income/(loss) attributable to non-controlling interests	—		—		—		—
Balance at September 30, 2021	$	20	$	(2,821)	$	(11,261)	$	(14,062)