Procter & Gamble Annual Report 2023

← All annual reports

FY2023 Annual Report · Procter & Gamble

Loading PDF…

2023
Annual
Report

F I N A N CIA L H IG H LIG HT S (U N AU D ITE D)
Amounts in billions, except per share amounts

2 02 3 N E T SA LE S BY BU S I N E S S S EG M E NT 3

2023 2022 2021 2020 2019

Net Sales

$82.0 $80.2 $76.1

$71.0 $67.7

Operating Income

$18.1

$17.8 $18.0 $15.7

$5.5

Net Earnings

Attributable to P&G

$14.7

$14.3

$13.0

$3.9

Net Earnings Margin

18.0% 18.4% 18.9% 18.5% 5.9%

Diluted Net Earnings

per Common Share 1

Core Earnings

per Share 2

$5.90 $5.81 $5.50 $4.96 $1.43

$5.90 $5.81 $5.66 $5.12 $4.52

Operating Cash Flow

$16.8

$16.7

$18.4 $17.4

$15.2

Dividends per

Common Share

$3.68 $3.52 $3.24 $3.03 $2.90

2 02 3 N E T SA LE S BY G EOG R A PH IC R EG IO N

(1) Diluted net earnings per common share are calculated based on net earnings attributable to Procter & Gamble.

(2) Core EPS is a measure of the Company’s diluted net earnings per common share adjusted for certain items not viewed as part of our sustainable results.

Please see page 70 of the Annual Report for detail on the reconciling items.

(3) These results exclude net sales in Corporate.

(4) North America includes the United States, Canada and Puerto Rico.

VARIOUS STATEMENTS IN THIS ANNUAL REPORT, including estimates, projections, objectives and expected results, 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 and are generally identified by the words “believe,” “expect,” “anticipate,” “intend,” “opportunity,” “plan,” “project,” “will,” “should,” “could,” “would,” “likely”

and similar expressions. Forward-looking statements are based on current assumptions that are subject to risks and uncertainties that may cause actual results

to differ materially from the forward-looking statements, including the risks and uncertainties discussed in Item 1A – Risk Factors of the Form 10-K included

in this Annual Report. Such forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise publicly

any forward-looking statements, except as required by law.

Brand names referenced in this Annual Report are trademarks of The Procter & Gamble Company or one of its subsidiaries. All other brand names are trademarks

of their respective owners.

F I SC A L Y E A R 2 02 3 BY TH E N U M B E R S

$82.0B

$16.8B 95%

Net Sales
(up 2%)

Organic Sales
Growth

Core EPS

Growth

Operating

Cash Flow

Adjusted Free Cash

Flow Productivity

Dear
Shareowners,

Your Company delivered another strong year

in fiscal 2023 with robust top-line growth across

categories and regions, strong earnings per share

growth in the face of significant cost headwinds

and continued strong cash return — in a very difficult

operating environment — an outcome of continued

excellent execution of our integrated strategies

by P&G people.

Organic sales for the fiscal year grew 7%. Core

earnings per share grew 2%. Currency-neutral core

earnings per share were up 11%. Adjusted free cash

flow productivity was 95%.

This was our second consecutive year of 7% organic

sales growth and fifth consecutive year of 5% or

better organic growth — starting in fiscal 2019:

5%, 6%, 6%, 7%, 7%.

Growth was broad-based across business units, with

all 10 of our product categories growing organic sales.

Personal Health Care grew mid-teens. Feminine Care

grew double digits. Fabric Care, Home Care and Hair

Care were each up high single digits. Skin & Personal

Care, Baby Care, Family Care and Grooming each grew

mid-single digits. Oral Care grew low single digits.

Focus markets grew 5% for the year.

We delivered strong results in our largest and most

profitable market, the United States, with organic

sales growing 6%. This is on top of a strong 8% growth

comparison in the base period. Sales in the U.S. are

up 32% on a four-year stack basis (across fiscal years

2020, 2021, 2022 and 2023).

J O N R . M O E LLE R

Chairman of the Board,

President and Chief Executive Officer

We increased our dividend by 3% and returned over
$16 billion of value to shareowners with $9 billion in
dividends and over $7 billion in share repurchase.

Over the past 10 years, we have returned $145 billion to

shareowners through dividends and share repurchase.

P&G has paid a dividend for 133 consecutive years,

raising our dividend for 67 consecutive years.

Only seven U.S. publicly traded companies have

paid a dividend more consecutive years than P&G,

and only three U.S. companies have raised their

dividend more consecutive years.

In summary — another year of strong performance

in difficult operating conditions, in which we met or

exceeded each of our going-in target ranges for the

year — organic sales growth, core EPS growth, free cash

flow productivity and cash returned to shareowners.

Enterprise markets were up 15%, led by Latin America

P&G’s Strategy

with 24% organic sales growth.

E-commerce sales increased 7%, now representing

17% of total Company sales.

Seven of 10 product categories grew share globally

over the past year. Twenty-nine of our top 50 category/

country combinations held or grew share for the year.

The team has been growing and creating value

prior to, during, and following the pandemic

through a strategy that drives growth and value

creation through five integrated choices: a portfolio

of daily-use products where performance drives

brand choice; superiority across product, package,

brand communication, retail execution, and value;

On the bottom line, our core earnings per share growth

productivity; constructive disruption of the entire

of 2% overcame a 24 percentage-point headwind from

value chain; and a highly efficient and effective

higher materials costs and foreign exchange.

organization structure.

ii • The Procter & Gamble Company

The model is dynamic and sustainable. It adapts to the

changing needs of consumers, customers and society

and is focused on growing markets — creating versus

taking business — the most sustainable and typically

most profitable way to grow. We believe the best path

forward is to double down on this integrated set of

strategies that are driving our results.

A Portfolio of Daily-Use
Products

We go to market with a portfolio of daily-use products

in 10 categories: Fabric Care, Home Care, Baby Care,

Feminine Care, Family Care, Hair Care, Skin & Personal

Superiority that Wins with
Consumers and Grows Markets

We continue to raise the bar on all aspects of

superiority — to win with the consumers we serve —

in all price tiers where we compete.

With innovation-driven superior products, packages,

brand communication, retail execution and value,

we aim to be a disproportionate contributor to market

growth — creating business by growing markets and

P&G’s share in them through new solutions, better

and more delightful experiences, adding usage

occasions and building regimens.

Care, Oral Care, Personal Health Care and Grooming.

We are committed to continue to invest to strengthen

With a portfolio of brands in categories where

performance drives brand choice, the superiority

of our offerings versus competition matters.

the superiority of our brands to deliver superior value

for consumers, which requires ongoing productivity.

PO R TFO LIO
performance drives
brand choice

O RGA N I Z ATIO N
empowered, agile,
accountable

S U PE R IO R IT Y
to win with
consumers

CO N S TRUC TIV E
D I S RU P TIO N
across our
business

PRO DUC TIV IT Y
to fuel
investments

I NTEG R ATE D G ROW TH S TR ATEGY

Our strategic choices are the foundation
for balanced top- and bottom-line growth

The Procter & Gamble Company • iii

Productivity in All We Do

We remain fully committed to productivity as a

core driver of balanced top- and bottom-line growth

The strategic need for investment to strengthen the

and strong cash generation. We cannot let up here.

long-term health and competitiveness of our brands,

Productivity will remain a significant part of our

the short-term need to manage through significant

work, especially now.

cost increases, and the ongoing need to drive

balanced top- and bottom-line growth, including

margin expansion, underscore the importance

of productivity.

We have developed a strong productivity muscle

over the last decade, completing two $10 billion

savings programs. Productivity is now fully embedded

in our operating model and is embraced in every

part of our operation.

We are getting more productive, for example,

with our marketing spending. More efficient and

effective communication enables us to reach target

consumers when and where they are most receptive

to our advertising. This leads to higher quality

engagement, and when orchestrated across media

platforms, avoids excessive advertising frequency

that is, at best, wasteful spending and, at worst,

an annoyance. As we continue to integrate data

and analytics and artificial intelligence, brand teams

will be working to make our marketing investments

even more efficient and effective to reach more

consumers with improved demand creation at

equal or lower cost.

There are also significant opportunities in cost

of goods sold. Real-time formula flexibility is

helping improve superiority and reduce cost.

We are also able to reduce transportation costs

through real-time optimization of truck loads,

dynamic routing and sourcing optimization.

We are embracing SKU rationalization to drive

both top- and bottom-line growth.

An Approach of
Constructive Disruption

Success in our highly competitive industry and

increasingly dynamic world requires agility that

comes with a mindset of constructive disruption —

a willingness to change, adapt and create new

trends and technologies that will shape our

industry for the future.

We are creating proprietary algorithms to digitally

design molecules. We are using this capability

in our Fabric Care business, together with virtual

reality tools, to reformulate perfume molecules

and formulations based on real-time raw material

availability and cost data. This has enabled us to reduce

product development time from years to months,

while creating irresistible consumer experiences.

We are using proprietary algorithms for fast-cycle

testing to optimize brand communications — iterating

on changes to visuals, music and copy in a few hours

to achieve the best communications performance

across the full range of media vehicles.

Our digitized manufacturing processes are enabling

on-line quality control testing — identifying problems

at the point they occur versus at the end of the line

or in our warehouses — saving money, reducing

scrap and increasing quality.

The best way to manage disruption is to lead it —

in a way that creates value.

PRO DUC TIV IT Y I NTEG R ATE D I NTO OU R S TR ATEGY

Delivering the same or better output measures with lower spending or resource investment

Materials

Manufacturing

Overhead

Ad Spend &
Promotion

Working
Capital

iv • The Procter & Gamble Company

Superiority
that Wins with
Consumers and
Grows Markets

Read more about

superiority at pg.com/
annualreport2023

PRODUC T

PACK AG ING

Products so good, consumers

Packaging that attracts

recognize the difference. Superior

consumers, conveys brand equity,

products raise expectations for

helps consumers select the best

performance in the category.

product for their needs and

delights consumers during use.

Superiority is helping us delight

In Europe, Fabric Care is driving

consumers and drive category

strong demand and consumer

growth with Pampers Swaddlers

value with a superior product in

in North America. We have invested

superior packaging. Ariel PODS

to drive superiority across all five

ECOCLIC packaging is made

vectors, including the product itself,

from 70% recycled fibers and is

with superior comfort, ultra-soft

recyclable. We introduced a similar

absorbent layers and up to 100%

recyclable cardboard package

leakproof skin protection. In fiscal

for Lenor Unstoppables scent

2023, Pampers delivered mid-single

boosters. The new packaging is

digit organic sales growth and

consumer preferred, helps reduce

contributed to market growth

use of plastic in line with P&G’s

of the category in North America.

packaging goals and contributed

to high single digit organic sales

growth in Europe Fabric Care

in fiscal 2023.

Superiority that Wins with Consumers and Grows Markets

The Procter & Gamble Company • v

B R AN D
COM M U N IC ATION

R ETAIL
E XECUTION

CON SU M E R
& CUSTOM E R
VALU E

Advertising that reaches consumers

In-store: with the right store

For consumers: all these elements

and communicates the superiority of

coverage, product forms, sizes, price

presented in a clear and shoppable

the brand’s product and packaging

points, shelving and merchandising.

way at a compelling price. For

benefits — attracting consumers to

Online: with the right content,

customers: margin, penny profit,

the brand and driving brand and

assortment, ratings, reviews,

trip generation, basket size and

category growth.

search and subscription offerings.

category growth.

Vicks, the #1 OTC cough, cold

Always Discreet has disrupted

Sold in China for more than 30

and flu brand in the world, is an

traditional ideas of the adult

years, Safeguard is the country’s

example of enduring irresistible

incontinence category, focusing

#1 personal cleansing brand.

superiority that we have continued

on superior protection with

Consumers appreciate the value

to build upon with innovations

thinner, more discreet products

of innovations such as Safeguard

like NyQuil and DayQuil Honey.

and beautiful, feminine retail

Detox Body Wash, which provides

Superior communication like the

displays — making a meaningful

deep cleansing with a superior

print advertising seen here, which

change in consumers’ quality of

usage experience of a luxurious,

highlights the products’ great

life and driving strong business

creamy foam. Safeguard Detox

tasting formula and powerful

results. With superior retail

Body Wash sales nearly doubled

relief, has helped Vicks become

execution, Always Discreet delivered

in fiscal 2023, leading the China

the preferred choice by millions.

low teens organic sales growth

body wash category up more than

Vicks grew organic sales more than

in fiscal 2023 and drove 1.5 times

10% — great value for consumers

25% in fiscal 2023 and contributed

our fair share of the adult

and category value growth for

to double-digit growth of the

incontinence category growth.

P&G and our retail partners.

category globally.

vi • The Procter & Gamble Company

A Structure that Yields
an Empowered, Agile and
Accountable Organization

P&G’s organization structure is designed to focus

our human, technical and financial resources on

our biggest opportunities for growth.

We are organized around five industry-based

sector business units, which manage our 10 product

categories, with full sales, profit, cash and value

creation responsibility for our largest and most

profitable markets. Enterprise Markets, which

represent the rest of the world, are a separate unit

with sales, profit and value creation responsibility.

This structure yields a more empowered, agile

and accountable organization and culture with

little overlap or redundancy — flowing to new

demands, seamlessly supporting each other to

deliver against our priorities around the world.

Four Focus Areas to Improve
Execution of Our Strategy

We are working in four areas to further improve the

execution of our integrated strategy.

of our products and packages, while improving their

sustainability. An example is Ariel PODS ECOCLIC.

Ariel PODS, our leading European laundry brand,

provides consumers superior cold-water cleaning

performance that enables energy cost savings and

improves sustainability by allowing consumers to

reduce the energy required to heat water in the

laundry process. Additionally, the Ariel ECOCLIC

packaging is made from 70% recycled fibers and

The first is supply. We are further upgrading our world

is recyclable, saving up to 6,500 tons of plastic

class supply chain to one that enables even greater

annually in Europe if all Ariel PODS users switch

agility, flexibility, scalability, transparency, and resilience

to ECOCLIC packaging.

for a new reality and a new age. We call this Supply

3.0 — an end-to-end synchronized, sustainable, and

resilient supply chain, amplified by data and analytics

and enabled by an organization that is at the leading

edge of transformation, mastery and leadership.

Third, digital acumen — to drive consumer and

customer preference, reduce cost and enable rapid

and efficient decision making across the entire value

chain — how we engage with consumers, how we

innovate, how we go to market, and how we operate

Second, environmental sustainability has been

our business. Through this, we are able to put

integrated into each of our businesses and processes

more focus on the highest order work — work that

with a mindset of ‘no trade offs’— continuing to

serves consumers, customers, employees, society

deliver and improve the irresistible performance

and shareowners.

OU R FOU R
FOCU S A R E A S

These are further

strengthening the

execution of our

integrated growth

strategy.

Supply
Chain

Environmental
Sustainability

Digital
Acumen

Employee Value
Equation

The Procter & Gamble Company • vii

Fourth, a superior employee value equation for all

in a way that allows consumers to reduce their

employees, inclusive of all genders, races, ethnicities,

own footprint without making tradeoffs between

sexual orientations, ages and abilities — for all

performance and sustainability. Finally, we help

roles — to ensure we continue to attract, retain and

industry reduce its footprint by making innovative

develop the best talent. We are focusing on four

technologies available broadly for application.

vectors, ensuring employees have the opportunity

to make an impact daily; have the ability to grow

their skills and capabilities; feel valued and rewarded;

and are inspired to serve consumers better than

competition — to grow markets, build the business,

and be part of a Company that is a force for growth

and a force for good.

These four areas — supply, environmental

sustainability, digital acumen and a superior employee

value equation — are not new or separate strategies.

They are necessary elements in continuing to build

superiority, in reducing cost to enable investment and

value creation, and in strengthening our organization.

They are part of the constructive disruption we must

continue to lead.

Meeting and Balancing the
Needs of All Stakeholders

Our objective is balanced top- and bottom-line

growth, but in the ever more complex world we

live in, balance also requires serving the needs of all

stakeholders — consumers, customers, employees,

society and shareowners. This is particularly

important when it comes to environmental,

social and governance areas.

Our efforts in Environmental Sustainability are

important to create value while improving P&G’s

In our Community Impact work, we support people

in need around the world through our brands and

products that help restore normalcy in uncertain

times. With our partners, we also provide clean

drinking water with our Children’s Safe Drinking

Water Program to support people who lack access

to clean water daily.

We serve billions of consumers all over the world.

Our ability to do this most effectively is enabled by

a workforce and culture that understands, respects

and reflects the uniqueness of all the consumers

we serve — inclusive of all genders, races, ethnicities,

sexual orientations, ages and abilities. As of the end

of the fiscal year, 41% of our global employees and 50%

of our global management employees are women.

Thirty percent of our U.S. employees are multicultural.

Our current Board is 46% women and 38% multicultural

leaders. More balanced and representative leadership,

and diversity throughout our organization, is helping

to drive balanced and sustainable growth as we serve

an increasingly diverse set of consumers.

P&G was founded on uncompromising beliefs that

our products should be of the highest quality and

value and that the only way to run a business is with

honest and fair dealings. These beliefs come to life

today in P&G’s Purpose, Values and Principles, which

set high standards that we hold ourselves and each

other accountable for, and create a strong culture

environmental impact, enabling consumers to reduce

focused on winning the right way.

their footprint, and helping society solve some of the

most pressing challenges. We start where we have

the most control — our operations. Then, we look at

how we can innovate to extend our level of superiority

Citizenship

A FO RCE FO R G ROW TH
A N D A FO RCE FO R GOO D

Community
Impact

Equality
& Inclusion

Environmental
Sustainability

To learn more about our work, visit our ESG
for Investors website at pginvestor.com/esg
and read our latest Citizenship Report at
pg.com/citizenship.

Ethics & Corporate
Responsibility

viii • The Procter & Gamble Company

Confidence in P&G’s Strategy
and People

I want to close this letter with a few thoughts about

this Company, its strategy and organization — as

a reflection back on what has been accomplished

and as a glimpse forward into what is possible.

First, pre-COVID, during COVID and since COVID —

pre-inflation and since inflation — we have delivered

consistent, strong top-line growth across categories

and geographies, core EPS growth each of the

last five fiscal years, and consistent cash return

to shareowners. Our strategy has sustained us

through all of it.

Second, in the past two years, nearly half our

earnings have been wiped out by commodities,

transportation and foreign exchange headwinds.

Yet, we still grew earnings per share in each of those

years, while delivering 7% organic sales growth each

performing products of high quality at a superior

year, increasing investment in innovation, brand

building and market growth, and growing market

share, in aggregate, in the process.

value. We strive to do this in the most responsible

way, consistent with P&G’s Values and Principles.

This approach, with consumers at the center, and an

Third, if you had asked me four years ago if we could

organization built to serve them, has served us and

grow top line, bottom line and deliver strong cash

return to shareowners through a global pandemic,

our many stakeholders well. It will guide our actions as

we move forward. If we do this effectively, consumers

with employees challenged to get to the workplace,

will benefit, customers will grow their businesses,

in the context of a war in Europe, major disruption

in global supply chains, rapidly escalating costs,

the highest consumer inflation in 40 years, and

fundamental shifts in consumer behavior and channel

relevance — it would have been hard to say “yes.”

But that is exactly what your team has done.

Over the last five years, they have added over $15

employees will develop and thrive, we will have a

positive impact on society, and shareholders will

continue to be rewarded for their investment.

I believe in this Company, in our organization — its

capabilities and in the commitment of P&G people

to serve consumers. I am excited about what lies

ahead. Of course, we will continue to weather some

billion in incremental sales, grown our share of the

dark days and nights. But the future, in general,

global market, grown core earnings per share by

holds great promise. At all times, we will continue to

40% and returned over $80 billion of value through

be guided by P&G’s Purpose, Values and Principles

dividends and share repurchase to shareowners.

and the relentless execution of our strategy to

As you well know, past performance is no guarantee

of future results and no excuse to stand still — quite

As P&G celebrates our 186th anniversary this year,

the opposite. There will be bumps in the road ahead.

I believe we have a stronger hand to play today

We are still navigating through plenty of bumps right

than we have ever had.

move toward an even brighter dawn.

now. Each of these three look-backs, though, gives

us confidence in the effectiveness of our strategy —

grounded in and focused on consumers — and an

appreciation for the capability of a talented, creative,

agile and committed organization.

At the end of the day, we serve people — with a strong

desire to improve their lives and the lives of their

J O N R . M O E LLE R

families. We stand by consumers and support them in

Chairman of the Board, President

small but meaningful ways every day — with superior

and Chief Executive Officer

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark one)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 TRUE

For the Fiscal Year Ended June 30, 2023

[ ]

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

Cincinnati
One Procter & Gamble Plaza
513

Title of each class
Common Stock, without Par Value
1.125% Notes due 2023
0.500% Notes due 2024
0.625% Notes due 2024
1.375% Notes due 2025
0.110% Notes due 2026
3.250% EUR Notes due 2026
4.875% EUR Notes due May 2027
1.200% Notes due 2028
1.250% Notes due 2029
1.800% Notes due 2029
6.250% GBP Notes due January 2030
0.350% Notes due 2030
0.230% Notes due 2031
3.250% EUR Notes due 2031
5.250% GBP Notes due January 2033
1.875% Notes due 2038
0.900% Notes due 2041

For the transition period from to
Commission File No. 1-434

THE PROCTER & GAMBLE COMPANY
One Procter & Gamble Plaza, Cincinnati, Ohio 45202
Telephone (513) 983-1100
IRS Employer Identification No. 31-0411980
State of Incorporation: Ohio
Securities registered pursuant to Section 12(b) of the Act:

OH
45202
983-1100
31-0411980
OH

Trading Symbol
PG
PG23A
PG24A
PG24B
PG25
PG26D
PG26E
PG27A
PG28
PG29B
PG29A
PG30
PG30C
PG31A
PG31B
PG33
PG38
PG41

Name of each exchange on which registered
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes  No 

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  No 

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 and post such files). Yes  No 

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 filed," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the
Exchange Act.

Large accelerated filer
Non-accelerated filer




Accelerated filer
Smaller reporting company




Emerging growth company



FALSE FALS

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Yes  No  TRUE

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements. 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No  False

The aggregate market value of the voting stock held by non-affiliates amounted to $357 billion on December 31, 2022.

There were 2,357,306,187 shares of Common Stock outstanding as of July 31, 2023.

Portions of the Proxy Statement for the 2023 Annual Meeting of Shareholders, which will be filed within one hundred and twenty days of the fiscal year ended June 30,
2023 (2023 Proxy Statement), are incorporated by reference into Part III of this report to the extent described herein.

Documents Incorporated by Reference

FORM 10-K TABLE OF CONTENTS

Page

PART I

Item 1.
Item 1A. Risk Factors

Business

Item 1B. Unresolved Staff Comments

Item 2.

Properties

Item 3.

Legal Proceedings

Item 4. Mine Safety Disclosure

Information about our Executive Officers

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities

Item 6.

Intentionally Omitted

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Item 8.

Financial Statements and Supplementary Data

Management's Report and Reports of Independent Registered Public Accounting Firm

Consolidated Statements of Earnings

Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets

Consolidated Statements of Shareholders' Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Note 1: Summary of Significant Accounting Policies

Note 2: Segment Information

Note 3: Supplemental Financial Information

Note 4: Goodwill and Intangible Assets

Note 5: Income Taxes

Note 6: Earnings Per Share

Note 7: Share-based Compensation

Note 8: Postretirement Benefits and Employee Stock Ownership Plan

Note 9: Risk Management Activities and Fair Value Measurements

Note 10: Short-term and Long-term Debt

Note 11: Accumulated Other Comprehensive Income/(Loss)

Note 12: Leases
Note 13: Commitments and Contingencies

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

PART III Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters

Item 13. Certain Relationships and Related Transactions and Director Independence
Item 14. Principal Accountant Fees and Services

PART IV Item 15. Exhibits and Financial Statement Schedules

Item 16. Form 10-K Summary

Signatures

2
4

36
37

61
62

64
64

PART I

Item 1. Business.

The Procter & Gamble Company (the Company) is focused on providing branded products of superior quality and value to
improve the lives of the world's consumers, now and for generations to come. The Company was incorporated in Ohio in 1905,
having first been established as a New Jersey corporation in 1890, and was built from a business founded in Cincinnati in 1837
by William Procter and James Gamble.
Additional information required by this item is incorporated herein by reference to Management's Discussion and Analysis
(MD&A); and Notes 1 and 2 to our Consolidated Financial Statements. Unless the context indicates otherwise, the terms
"Company," "P&G," "we," "our" or "us" as used herein refer to The Procter & Gamble Company (the registrant) and its
subsidiaries. Throughout this Form 10-K, we incorporate by reference information from other documents filed with the Securities
and Exchange Commission (SEC).
The Company's Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and
amendments thereto, are filed electronically with the SEC. The SEC maintains an internet site that contains these reports at:
www.sec.gov. Reports can also be accessed through links from our website at: www.pginvestor.com. P&G includes the website
link solely as a textual reference and the information on our website is not incorporated by reference into this report.
Copies of these reports are also available, without charge, by contacting EQ Shareowner Services, 1100 Centre Pointe Curve,
Suite 101, Mendota, MN 55120-4100.
Financial Information about Segments
Information about our reportable segments can be found in the MD&A and Note 2 to our Consolidated Financial Statements.
Narrative Description of Business
Business Model. Our business model is built to deliver balanced top- and bottom-line growth and value creation. We rely on
the continued growth and success of existing brands and products, as well as the creation of new innovative products and
brands. We offer products in markets and industry segments that are highly competitive. Our products are sold in approximately
180 countries and territories through numerous channels as well as direct-to-consumer. Our growth strategy is to deliver
meaningful and noticeable superiority across five key vectors of our consumer proposition - product performance, packaging,
brand communication, retail execution and consumer and customer value. We use our research and development (R&D) and
consumer insights to provide superior products and packaging. We utilize our marketing and online presence to deliver superior
brand messaging to our consumers. We partner with our customers to deliver superior retail execution, both in-store and online.
In conjunction with the above vectors, we provide superior value to consumers and our retail customers in each price tier in
which we compete. Productivity improvement is also critical to delivering our objectives of balanced top- and bottom-line
growth and value creation.
Key Product Categories. Information on key product categories can be found in the MD&A and Note 2 to our Consolidated
Financial Statements.
Key Customers. Our customers include mass merchandisers, e-commerce (including social commerce) channels, grocery
stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores (including
airport duty-free stores), high-frequency stores, pharmacies, electronics stores and professional channels. We also sell direct to
consumers. Sales to Walmart Inc. and its affiliates represent approximately 15% of our total sales in 2023, 2022 and 2021. No
other customer represents more than 10% of our total sales. Our top ten customers accounted for 40% of our total net sales in
2023 and 39% in 2022 and 2021.
Sources and Availability of Materials. Almost all of the raw and packaging materials used by the Company are purchased
from third parties, some of whom are single-source suppliers. We produce certain raw materials, primarily chemicals, for
further use in the manufacturing process. In addition, fuel, natural gas and derivative products are important commodities
consumed in our manufacturing processes and in the transportation of input materials and finished products. The prices we pay
for materials and other commodities are subject to fluctuation. When prices for these items change, we may or may not pass the
change to our customers. The Company purchases a substantial variety of other raw and packaging materials, none of which are
material to our business taken as a whole.
Trademarks and Patents. We own or have licenses under patents and registered trademarks, which are used in connection
with our activity in all businesses. Some of these patents or licenses cover significant product formulation and processes used to
manufacture our products. The trademarks are important to the overall marketing and branding of our products. All major
trademarks in each business are registered. In part, our success can be attributed to the existence and continued protection of
these trademarks, patents and licenses.
Competitive Condition. The markets in which our products are sold are highly competitive. Our products compete against
similar products from many large and small companies, including well-known global competitors. In many of the markets and
industry segments in which we sell our products, we compete against other branded products as well as retailers' private-label
brands. We are well positioned in the industry segments and markets in which we operate, often holding a leadership or
significant market share position. We support our products with advertising, promotions and other marketing vehicles to build
awareness and trial of our brands and products in conjunction with our sales force. We believe this combination provides the

The Procter & Gamble Company 1most efficient method of marketing for these types of products. Product quality, performance, value and packaging are also
important differentiating factors.
Government Regulation. Our Company is subject to a wide variety of laws and regulations across the countries in which we
do business. In the United States, many of our products and manufacturing operations are subject to one or more federal or state
regulatory agencies, including the U.S. Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), the
Occupational Safety and Health Administration (OSHA), the Federal Trade Commission (FTC) and the Consumer Product
Safety Commission (CPSC). We are also subject to anti-corruption laws and regulations, such as the U.S. Foreign Corrupt
Practices Act, and antitrust and competition laws and regulations that govern our dealings with suppliers, customers,
competitors and government officials.
In addition, many foreign jurisdictions in which we do business have regulations and regulatory bodies that govern similar
aspects of our operations and products, in some cases to an even more significant degree. We are also subject to expanding laws
and regulations related to environmental protection and other sustainability-related matters, non-financial reporting and
diligence, labor and employment, trade, taxation and data privacy and protection, including the European Union’s General Data
Protection Regulation (GDPR) and similar regulations in states within the United States and in countries around the world.
The Company has in place compliance programs and internal and external experts to help guide our business in complying with
these and other existing laws and regulations that apply to us around the globe; and we have made, and plan to continue
making, necessary expenditures for compliance with these laws and regulations. We also expect that our many suppliers,
consultants and other third parties working on our behalf share our commitment to compliance, and we have policies and
procedures in place to manage these relationships, though they inherently involve a lesser degree of control over operations and
governance. We do not expect that the Company’s expenditures for compliance with current government regulations, including
current environmental regulations, will have a material effect on our total capital expenditures, earnings or competitive position
in fiscal year 2024 as compared to prior periods.
Human Capital. Our employees are a key source of competitive advantage. Their actions, guided by our Purpose, Values and
Principles (PVPs), are critical to the long-term success of our business. We aim to retain our talented employees by offering
competitive compensation and benefits, strong career development and a respectful and inclusive culture that provides equal
opportunity for all.
Our Board of Directors, through the Compensation and Leadership Development Committee (C&LD Committee), provides
oversight of the Company’s policies and strategy relating to talent including diversity, equality and inclusion as well as the
Company’s compensation principles and practices. The C&LD Committee also evaluates and approves the Company’s
compensation plans, policies and programs applicable to our senior executives.
Employees
As of June 30, 2023, the Company had approximately 107,000 employees, an increase of 1% versus the prior year due
primarily to business growth. The total number of employees is an estimate of total Company employees excluding interns, co-
ops, contractors and employees of joint ventures. 49% of our employees are in manufacturing roles and 27% of our employees
are located in the United States. 41% of our global employees are women and 30% of our U.S. employees identify as
multicultural.
Training and Development
We focus on attracting, developing and retaining skilled and diverse talent, both from universities and the broader market. We
recruit from among the best universities across markets in which we compete and are generally able to select from the top
talent. We focus on developing our employees by providing a variety of job experiences, training programs and skill
development opportunities. Given our develop-from-within model for staffing most of our senior leadership positions, it is
particularly important for us to ensure holistic growth and full engagement of our employees.
Diversity, Equality and Inclusion
As a consumer products company, we believe that it is important for our workforce to reflect the diversity of our consumers
worldwide. We also seek to foster an inclusive work environment where each individual can bring their authentic self, which
helps drive innovation and enables us to better serve our consumers. We aspire to achieve equal gender representation globally
and at key management and leadership levels. Within the U.S. workforce, our aspiration is to achieve 40% multicultural
representation overall as well as at management and leadership levels.
Compensation and Benefits
Market-competitive compensation and reward programs are critical elements of our employee value equation to attract and
retain the best talent. Our total rewards programs are based on the principles of paying for performance, paying competitively
versus peer companies that we compete with for talent in the marketplace and focusing on long-term success through a
combination of short-term and long-term incentive programs. We also offer competitive benefit programs, including retirement
plans and health insurance in line with local country practices with flexibility to accommodate the needs of a diverse workforce.
Sustainability. Environmental sustainability is integrated into our business strategy to offer consumers irresistibly superior
products that are more sustainable. Our aim is to deliver balanced top- and bottom-line growth, value creation and key
sustainability objectives. In 2021, the Company announced a 2040 net zero ambition and published a Climate Transition Action

2 The Procter & Gamble CompanyPlan, which describes the Company’s ongoing efforts toward reducing greenhouse gas emissions across scopes 1 and 2 and
elements of scope 3. This includes a long-term objective of net zero emissions for scopes 1 and 2, elements of scope 3 and
interim goals to help us pace our progress. The Company has also declared goals towards using renewable electricity for our
operations, reducing use of virgin petroleum-based plastic in packaging, increasing the recyclability or reusability of packaging,
responsible sourcing of key forest-based commodities, improving efficiency of water usage in our operations and driving a
global portfolio of water restoration projects to address water scarcity.
We use the standards and guidelines of the Global Reporting Initiative, Sustainability Accounting Standards Board (SASB)
industry specific standards and the Task Force on Climate-related Financial Disclosures (TCFD) to inform our sustainability
and related disclosures included in this Annual Report, our Proxy Statement and our sustainability reports. The “materiality”
thresholds in those standards and guidelines may differ from the concept of “materiality” for purposes of the federal securities
laws and disclosures required by the Commission’s rules in this Annual Report. References to our sustainability reports and
website are for informational purposes only and neither the sustainability reports nor the other information on our website is
incorporated by reference into this Annual Report on Form 10-K. Additional detailed information on our sustainability efforts
can be found on our website at https://pginvestor.com/esg.
Item 1A. Risk Factors.

We discuss our expectations regarding future performance, events and outcomes, such as our business outlook and objectives in
this Form 10-K, as well as in our quarterly and annual reports, current reports on Form 8-K, press releases and other written and
oral communications. All statements, except for historical and present factual information, are “forward-looking statements”
and are based on financial data and business plans available only as of the time the statements are made, which may become
outdated or incomplete. We assume no obligation to update any forward-looking statements as a result of new information,
future events or other factors, except to the extent required by law. Forward-looking statements are inherently uncertain, and
investors must recognize that events could significantly differ from our expectations.
The following discussion of “risk factors” identifies significant factors that may adversely affect our business, operations,
financial position or future financial performance. This information should be read in conjunction with Management's
Discussion and Analysis and the Consolidated Financial Statements and related Notes incorporated in this report. The following
discussion of risks is not all inclusive but is designed to highlight what we believe are important factors to consider when
evaluating our expectations. These and other factors could cause our future results to differ from those in the forward-looking
statements and from historical trends, perhaps materially.
MACROECONOMIC CONDITIONS AND RELATED FINANCIAL RISKS
Our business is subject to numerous risks as a result of having significant operations and sales in international markets,
including foreign currency fluctuations, currency exchange or pricing controls and localized volatility.
We are a global company, with operations in approximately 70 countries and products sold in approximately 180 countries and
territories around the world. We hold assets, incur liabilities, generate sales and pay expenses in a variety of currencies other
than the U.S. dollar, and our operations outside the U.S. generate more than 50% of our annual net sales. Fluctuations in
exchange rates for foreign currencies have and could continue to reduce the U.S. dollar value of sales, earnings and cash flows
we receive from non-U.S. markets, increase our supply costs (as measured in U.S. dollars) in those markets, negatively impact
our competitiveness in those markets or otherwise adversely impact our business results or financial condition. Further, we have
a significant amount of foreign currency debt and derivatives as part of our capital markets activities. The maturity cash
outflows of these instruments could be adversely impacted by significant appreciation of foreign currency exchange rates
(particularly the Euro), which could adversely impact our overall cash flows. Moreover, discriminatory or conflicting fiscal or
trade policies in different countries, including changes to tariffs and existing trade policies and agreements, could adversely
affect our results. See also the Results of Operations and Cash Flow, Financial Condition and Liquidity sections of the MD&A
and the Consolidated Financial Statements and related Notes.
We also have businesses and maintain local currency cash balances in a number of countries with currency exchange, import
authorization, pricing or other controls or restrictions, such as Egypt, Argentina and Pakistan. Our results of operations,
financial condition and cash flows could be adversely impacted if we are unable to successfully manage such controls and
restrictions, continue existing business operations and repatriate earnings from overseas, or if new or increased tariffs, quotas,
exchange or price controls, trade barriers or similar restrictions are imposed on our business.
Additionally, our business, operations or employees have been and could continue to be adversely affected (including by the
need to de-consolidate or even exit certain businesses in particular countries) by geopolitical conflicts, political volatility, trade
controls, labor market disruptions or other crises or vulnerabilities in individual countries or regions. This could include
political instability, upheaval or acts of war (such as the Russia-Ukraine War) and the related government and other entity
responses, broad economic instability or sovereign risk related to a default by or deterioration in the creditworthiness of local
governments, particularly in emerging markets.
Uncertain economic or social conditions may adversely impact demand for our products or cause our customers and
other business partners to suffer financial hardship, which could adversely impact our business.
Our business could be negatively impacted by reduced demand for our products related to one or more significant local,
regional or global economic or social disruptions. These disruptions have included and may in the future include: a slow-down,

The Procter & Gamble Company 3recession or inflationary pressures in the general economy; reduced market growth rates; tighter credit markets for our
suppliers, vendors or customers; a significant shift in government policies; significant social unrest; the deterioration of
economic relations between countries or regions; potential negative consumer sentiment toward non-local products or sources;
or the inability to conduct day-to-day transactions through our financial intermediaries to pay funds to or collect funds from our
customers, vendors and suppliers. Additionally, these and other economic conditions may cause our suppliers, distributors,
contractors or other third-party partners to suffer financial or operational difficulties that they cannot overcome, resulting in
their inability to provide us with the materials and services we need, in which case our business and results of operations could
be adversely affected. Customers may also suffer financial hardships due to economic conditions such that their accounts
become uncollectible or are subject to longer collection cycles. In addition, if we are unable to generate sufficient sales, income
and cash flow, it could affect the Company’s ability to achieve expected share repurchase and dividend payments.
Disruptions in credit markets or to our banking partners or changes to our credit ratings may reduce our access to
credit or overall liquidity.
A disruption in the credit markets or a downgrade of our current credit rating could increase our future borrowing costs and
impair our ability to access capital and credit markets on terms commercially acceptable to us, which could adversely affect our
liquidity and capital resources or significantly increase our cost of capital. In addition, we rely on top-tier banking partners in
key markets around the world, who themselves face economic, societal, political and other risks, for access to credit and to
facilitate collection, payment and supply chain finance programs. A disruption to one or more of these top-tier partners could
impact our ability to draw on existing credit facilities or otherwise adversely affect our cash flows or the cash flows of our
customers and vendors.
Changing political and geopolitical conditions could adversely impact our business and financial results.
Changes in the political conditions in markets in which we manufacture, sell or distribute our products, as well as changing
geopolitical conditions, may be difficult to predict and may adversely affect our business and financial results. Results of
elections, referendums, sanctions or other political processes and pressures in certain markets in which our products are
manufactured, sold or distributed could create uncertainty regarding how existing governmental policies, laws and regulations
may change, including with respect to sanctions, taxes, tariffs, import and export controls and the general movement of goods,
materials, services, capital, data and people between countries. The potential implications of such uncertainty, which include,
among others, exchange rate fluctuations, new or increased tariffs, trade barriers and market contraction, could adversely affect
the Company’s results of operations and cash flows.
The Company operates a global business with sales, manufacturing, distribution and research and development organizations
globally that contribute to our overall growth. If geopolitical tensions and trade controls were to increase or disrupt our business
in markets where we have significant sales or operations, including disruptions due to governmental responses to such conflicts
(such as the imposition of sanctions, retaliatory tariffs, increased business licensing requirements or limitations on profits), such
disruptions could adversely impact our business, financial condition, results of operations and cash flows.
The war between Russia and Ukraine has adversely impacted and could continue to adversely impact our business and
financial results.
The war between Russia and Ukraine has negatively impacted, and the situation it generates may continue to negatively impact,
our operations. Beginning in March 2022, the Company reduced its product portfolio, discontinued new capital investments and
suspended media, advertising and promotional activity in Russia. Future impacts to the Company are difficult to predict due to
the high level of uncertainty as to how the overall situation will evolve. Within Ukraine, there is a possibility of physical
damage and destruction of our two manufacturing facilities, our distribution centers or those of our customers. We may not be
able to operate our manufacturing sites and source raw materials from our suppliers or ship finished products to our customers.
Within Russia, we may reduce further or discontinue our operations due to sanctions and export controls and counter-sanctions,
monetary, currency or payment controls, restrictions on access to financial institutions, supply and transportation challenges or
other circumstances and considerations. Ultimately, these could result in loss of assets or impairments of our manufacturing
plants and fixed assets or write-downs of other operating assets and working capital.
The war between Russia and Ukraine could also amplify or affect the other risk factors set forth in this Part I, Item 1A,
including, but not limited to, foreign exchange volatility, disruptions to the financial and credit markets, energy supply and
supply chain disruptions, increased risks of an information security or operational technology incident, cost fluctuations and
commodity cost increases and increased costs to ensure compliance with global and local laws and regulations. The occurrence
of any of these risks, combined with the increased impact from the war between Russia and Ukraine, could adversely impact
our business and financial results.
More broadly, there could be additional negative impacts to our net sales, earnings and cash flows should the situation worsen,
including, among other potential impacts, economic recessions in certain neighboring countries or globally due to inflationary
pressures, energy and supply chain cost increases or the geographic proximity of the war relative to the rest of Europe.
BUSINESS OPERATIONS RISKS
Our business results depend on our ability to manage disruptions in our global supply chain.
Our ability to meet our customers’ needs and achieve cost targets depends on our ability to maintain key manufacturing and
supply arrangements, including execution of supply chain optimizations and certain sole supplier or sole manufacturing plant

4 The Procter & Gamble Companyarrangements. The loss or disruption of such manufacturing and supply arrangements, including for issues such as labor
disputes or controversies, loss or impairment of key manufacturing sites, discontinuity or disruptions in our internal information
and data systems or those of our suppliers, cybersecurity incidents, inability to procure sufficient raw or input materials
(including water, recycled materials and materials that meet our labor standards), significant changes in trade policy, natural
disasters, increasing severity or frequency of extreme weather events due to climate change or otherwise, acts of war or
terrorism, disease outbreaks or other external factors over which we have no control, have at times interrupted and could, in the
future, interrupt product supply and, if not effectively managed and remedied, could have an adverse impact on our business,
financial condition, results of operations or cash flows.
Our businesses face cost fluctuations and pressures that could affect our business results.
Our costs are subject to fluctuations, particularly due to changes in the prices of commodities (including certain petroleum-
derived materials like resins and paper-based materials like pulp) and raw and packaging materials and the costs of labor,
transportation (including trucks and containers), energy, pension and healthcare. Inflation pressures could also result in
increases in these input costs. Therefore, our business results depend, in part, on our continued ability to manage these
fluctuations through pricing actions, cost saving projects and sourcing decisions, while maintaining and improving margins and
market share. Failure to manage these fluctuations and to anticipate consumer reaction to our management of these fluctuations
could adversely impact our results of operations or cash flows.
The ability to achieve our business objectives depends on how well we can compete with our local and global
competitors in new and existing markets and channels.
The consumer products industry is highly competitive. Across all of our categories, we compete against a wide variety of global
and local competitors. As a result, we experience ongoing competitive pressures in the environments in which we operate,
which may result in challenges in maintaining sales and profit margins. To address these challenges, we must be able to
successfully respond to competitive factors and emerging retail trends, including pricing, promotional incentives, product
delivery windows and trade terms. In addition, evolving sales channels and business models may affect customer and consumer
preferences as well as market dynamics, which, for example, may be seen in the growing consumer preference for shopping
online, ease of competitive entry into certain categories and growth in hard discounter channels. Failure to successfully respond
to competitive factors and emerging retail trends and effectively compete in growing sales channels and business models,
particularly e-commerce and mobile or social commerce applications, could negatively impact our results of operations or cash
flows.
A significant change in customer relationships or in customer demand for our products could have a significant impact
on our business.
We sell most of our products via retail customers, which include mass merchandisers, e-commerce (including social commerce)
channels, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty
stores (including airport duty-free stores), high-frequency stores, pharmacies, electronics stores and professional channels. Our
success depends on our ability to successfully manage relationships with our retail trade customers, which includes our ability
to offer trade terms that are mutually acceptable and are aligned with our pricing and profitability targets. Continued concentration
among our retail customers could create significant cost and margin pressure on our business, and our business performance could
suffer if we cannot reach agreement with a key customer on trade terms and principles. Our business could also be negatively
impacted if a key customer were to significantly reduce the inventory level of or shelf space allocated to our products as a result
of
and generic non-branded
products or for other reasons, significantly tighten product delivery windows or experience a significant business disruption.
If the reputation of the Company or one or more of our brands erodes significantly, it could have a material impact on
our financial results.
The Company's reputation, and the reputation of our brands, form the foundation of our relationships with key stakeholders and
other constituencies, including consumers, customers and suppliers. The quality and safety of our products are critical to our
business. Many of our brands have worldwide recognition and our financial success directly depends on the success of our
brands. The success of our brands can suffer if our marketing plans or product initiatives do not have the desired impact on a
brand's image or its ability to attract consumers. Our results of operations or cash flows could also be negatively impacted if the
Company or one of our brands suffers substantial harm to its reputation due to a significant product recall, product-related
litigation, defects or impurities in our products, product misuse, changing consumer perceptions of certain ingredients, negative
perceptions of packaging (such as plastic and other petroleum-based materials), lack of recyclability or other environmental
impacts, concerns about actual or alleged labor or equality and inclusion practices, privacy lapses or data breaches, allegations
of product tampering or the distribution and sale of counterfeit products. Additionally, negative or inaccurate postings or
comments on social media or networking websites about the Company or one of its brands could generate adverse publicity that
could damage the reputation of our brands or the Company. If we are unable to effectively manage real or perceived issues,
including concerns about safety, quality, ingredients, efficacy, environmental or social impacts or similar matters, sentiments
toward the Company or our products could be negatively impacted, and our results of operations or cash flows could suffer. Our
Company also devotes time and resources to citizenship efforts that are consistent with our corporate values and are designed to
strengthen our business and protect and preserve our reputation, including programs driving ethics and corporate responsibility,
strong communities, equality and inclusion and environmental sustainability. While the Company has many programs and

increased offerings of other branded manufacturers, private

label brands

The Procter & Gamble Company 5initiatives to further these goals, our ability to achieve these goals is impacted in part by the actions and efforts of third parties
including local and other governmental authorities, suppliers, vendors and customers. Consumer or broader stakeholder
perceptions of these programs and initiatives widely vary and could adversely affect our business. If these programs are not
executed as planned or suffer negative publicity, the Company's reputation and results of operations or cash flows could be
adversely impacted.
We rely on third parties in many aspects of our business, which creates additional risk.
Due to the scale and scope of our business, we must rely on relationships with third parties, including our suppliers, contract
manufacturers, distributors, contractors, commercial banks, joint venture partners and external business partners, for certain
functions. If we are unable to effectively manage our third-party relationships and the agreements under which our third-party
partners operate, our results of operations and cash flows could be adversely impacted. Further, failure of these third parties to
meet their obligations to the Company or substantial disruptions in the relationships between the Company and these third
parties could adversely impact our operations and financial results. Additionally, while we have policies and procedures for
managing these relationships, they inherently involve a lesser degree of control over business operations, governance and
compliance, thereby potentially increasing our financial, legal, reputational and operational risk.
A significant information security or operational technology incident, including a cybersecurity breach, or the failure of
one or more key information or operations technology systems, networks, hardware, processes and/or associated sites
owned or operated by the Company or one of its service providers could have a material adverse impact on our business
or reputation.
We rely extensively on information and operational technology (IT/OT) systems, networks and services, including internet and
intranet sites, data hosting and processing facilities and technologies, physical security systems and other hardware, software
and technical applications and platforms, many of which are managed, hosted, provided and/or used by third parties or their
vendors, to assist in conducting our business. The various uses of these IT/OT systems, networks and services include, but are
not limited to:
•
•
•
• marketing and selling products to consumers;
•

ordering and managing materials from suppliers;
converting materials to finished products;
shipping products to customers;

collecting, transferring, storing and/or processing customer, consumer, employee, vendor, investor and other stakeholder
information and personal data, including such data from persons covered by an expanding landscape of privacy and data
regulations, such as citizens of the European Union who are covered by the General Data Protection Regulation (GDPR),
residents of California covered by the California Consumer Privacy Act (CCPA), citizens of China covered by the Personal
Information Protection Law (PIPL) and citizens of Brazil covered by the General Personal Data Protection Law (LGPD);
summarizing and reporting results of operations, including financial reporting;

•
• managing our banking and other cash liquidity systems and platforms;
•

hosting, processing and sharing, as appropriate, confidential and proprietary research, business plans and financial
information;
collaborating via an online and efficient means of global business communications;
complying with regulatory, legal and tax requirements;
providing data security; and
handling other processes necessary to manage our business.

•
•
•
•
Numerous and evolving information security threats, including advanced persistent cybersecurity threats, pose a risk to the
security of our services, systems, networks and supply chain, as well as to the confidentiality, availability and integrity of our
data and of our critical business operations. In addition, because the techniques, tools and tactics used in cyber-attacks
frequently change and may be difficult to detect for periods of time, we may face difficulties in anticipating and implementing
adequate preventative measures or fully mitigating harms after such an attack.
Our IT/OT databases and systems and our third-party providers’ databases and systems have been, and will likely continue to
be, subject to advanced computer viruses or other malicious codes, ransomware, unauthorized access attempts, denial of service
attacks, phishing, social engineering, hacking and other cyber-attacks. Such attacks may originate from outside parties, hackers,
criminal organizations or other threat actors, including nation states. In addition, insider actors - malicious or otherwise - could
cause technical disruptions and/or confidential data leakage. We cannot guarantee that our security efforts or the security efforts
of our third-party providers will prevent material breaches, operational incidents or other breakdowns to our or our third-party
providers’ IT/OT databases or systems.
A breach of our data security systems or failure of our IT/OT databases and systems may have a material adverse impact on our
business operations and financial results. If the IT/OT systems, networks or service providers we rely upon fail to function
properly or cause operational outages or aberrations, or if we or one of our third-party providers suffer significant unavailability
of key operations, or inadvertent disclosure of, lack of integrity of, or loss of our sensitive business or stakeholder information,

6 The Procter & Gamble Companyincluding personal information, due to any number of causes, including catastrophic events, natural disasters, power outages,
computer and telecommunications failures, improper data handling, viruses, phishing attempts, cyber-attacks, malware and
ransomware attacks, security breaches, security incidents or employee error or malfeasance, and our business continuity plans
do not effectively address these failures on a timely basis, we may suffer interruptions in our ability to manage operations and
be exposed to reputational, competitive, operational, financial and business harm as well as litigation and regulatory action. If
our critical IT systems or back-up systems or those of our third-party vendors are damaged or cease to function properly, we
may have to make a significant investment to repair or replace them.
In addition, if a ransomware attack or other cybersecurity incident occurs, either internally or at our third-party technology
service providers, we could be prevented from accessing our data or systems, which may cause interruptions or delays in our
business operations, cause us to incur remediation costs, subject us to demands to pay a ransom or damage our reputation. In
addition, such events could result in unauthorized disclosure of confidential information or stakeholder information, including
personal information, and we may suffer financial and reputational damage because of lost or misappropriated information
belonging to us or to our partners, our employees, customers and suppliers. Additionally, we could be exposed to potential
liability, litigation, governmental inquiries, investigations or regulatory enforcement actions; and we could be subject to
payment of fines or other penalties, legal claims by our suppliers, customers or employees and significant remediation costs.
Periodically, we also upgrade our IT/OT systems or adopt new technologies. If such a new system or technology does not
function properly or otherwise exposes us to increased cybersecurity breaches and failures, it could affect our ability to order
materials, make and ship orders and process payments in addition to other operational and information integrity and loss issues.
The costs and operational consequences of responding to the above items and implementing remediation measures could be
significant and could adversely impact our results of operations and cash flows.
We must successfully manage the demand, supply and operational challenges associated with the effects of any future
disease outbreak, including epidemics, pandemics or similar widespread public health concerns.
Our business may be negatively impacted by the fear of exposure to or actual effects of a disease outbreak, epidemic, pandemic
or similar widespread public health concern. These impacts may include, but are not limited to:
•

Significant reductions in demand or significant volatility in demand for one or more of our 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, shifts in demand away from one or more of our more discretionary or higher priced
products to lower priced products, or stockpiling or similar pantry-loading activity. If prolonged, such impacts can further
increase the difficulty of business or operations planning and may adversely impact our results of operations and cash
flows; or
Significant changes in the political conditions in markets in which we manufacture, sell or distribute our products,
including quarantines, import/export restrictions, price controls, or governmental or regulatory actions, closures or other
restrictions that limit or close our operating and manufacturing facilities, restrict our employees’ ability to travel or perform
necessary business functions, or otherwise prevent our third-party partners, suppliers or customers from sufficiently
staffing operations.

•

Despite efforts to manage and remedy these impacts, their ultimate impact also depends on factors beyond our knowledge or
control, including the duration and severity of any such outbreak as well as third-party actions taken to contain its spread and
mitigate its public health effects.
BUSINESS STRATEGY & ORGANIZATIONAL RISKS
Our ability to meet our growth targets depends on successful product, marketing and operations innovation and
successful responses to competitive innovation, evolving digital marketing and selling platforms and changing consumer
habits.
We are a consumer products company that relies on continued global demand for our brands and products. Achieving our
business results depends, in part, on successfully developing, introducing and marketing new products and on making
significant improvements to our equipment and manufacturing processes. The success of such innovation depends on our ability
to correctly anticipate customer and consumer acceptance and trends, to obtain, maintain and enforce necessary intellectual
property protections and to avoid infringing upon the intellectual property rights of others and to continue to deliver efficient
and effective marketing across evolving media and mobile platforms with dynamic and increasingly more restrictive privacy
requirements. We must also successfully respond to technological advances made by, and intellectual property rights granted to,
competitors, customers and vendors. Failure to continually innovate, improve and respond to competitive moves, platform
evolution and changing consumer habits could compromise our competitive position and adversely impact our financial
condition, results of operations or cash flows.
We must successfully manage ongoing acquisition, joint venture and divestiture activities.
As a company that manages a portfolio of consumer brands, our ongoing business model includes a certain level of acquisition,
joint venture and divestiture activities. We must be able to successfully manage the impacts of these activities, while at the same
time delivering against our business objectives. Specifically, our financial results have been, and in the future could be,
adversely impacted by the dilutive impacts from the loss of earnings associated with divested brands or dissolution of joint
ventures. Our results of operations and cash flows have been, and in the future could also be, impacted by acquisitions or joint

The Procter & Gamble Company 7venture activities, if: 1) changes in the cash flows or other market-based assumptions cause the value of acquired assets to fall
below book value, or 2) we are not able to deliver the expected cost and growth synergies associated with such acquisitions and
joint ventures, including as a result of integration and collaboration challenges, which could also result in an impairment of
goodwill and intangible assets.
Our business results depend on our ability to successfully manage productivity improvements and ongoing
organizational change, including attracting and retaining key talent as part of our overall succession planning.
Our financial projections assume certain ongoing productivity improvements and cost savings, including staffing adjustments
and employee departures. Failure to deliver these planned productivity improvements and cost savings, while continuing to
invest in business growth, could adversely impact our results of operations and cash flows. Additionally, successfully executing
organizational change, management transitions at leadership levels of the Company and motivation and retention of key
employees is critical to our business success. Factors that may affect our ability to attract and retain sufficient numbers of
qualified employees include employee morale, our reputation, competition from other employers and availability of qualified
individuals. Our success depends on identifying, developing and retaining key employees to provide uninterrupted leadership
and direction for our business. This includes developing and retaining organizational capabilities in key growth markets where
the depth of skilled or experienced employees may be limited and competition for these resources is intense as well as
continuing the development and execution of robust leadership succession plans.
LEGAL & REGULATORY RISKS
We must successfully manage compliance with current and expanding laws and regulations, as well as manage new and
pending legal and regulatory matters in the U.S. and abroad.
Our business is subject to a wide variety of laws and regulations across the countries in which we do business, including those
laws and regulations involving intellectual property, product liability, product composition or formulation, packaging content or
corporate responsibility for packaging and product disposal, marketing, antitrust and competition, privacy, data protection,
environmental (including increasing focus on the climate, water and waste impacts of consumer packaged goods companies'
operations and products), employment, healthcare, anti-bribery and anti-corruption (including interactions with health care
professionals and government officials as well as corresponding internal controls and record-keeping requirements), trade
(including tariffs, sanctions and export controls), tax, accounting and financial reporting or other matters. In addition, increasing
governmental and societal attention to environmental, social and governance (ESG) matters, including expanding mandatory
and voluntary reporting, diligence and disclosure on topics such as climate change, waste production, water usage, human
capital, labor and risk oversight, could expand the nature, scope and complexity of matters that we are required to control,
assess and report. These and other rapidly changing laws, regulations, policies and related interpretations as well as increased
enforcement actions by various governmental and regulatory agencies, create challenges for the Company, may alter the
environment in which we do business, may increase the ongoing costs and complexities of compliance including by requiring
investments in technology or other compliance systems, and may ultimately result in the need to cease manufacturing, sales or
other business activities in certain jurisdictions, which could adversely impact our results of operations and cash flows. If we
are unable to continue to meet these challenges and comply with all laws, regulations, policies and related interpretations, it
could negatively impact our reputation and our business results. Additionally, we are currently, and in the future may be,
subject to a number of inquiries, investigations, claims, proceedings and requests for information from governmental agencies
or private parties, the adverse outcomes of which could harm our business. Failure to successfully manage these new or pending
regulatory and legal matters and resolve such matters without significant liability or damage to our reputation may materially
adversely impact our financial condition, results of operations and cash flows. Furthermore, if new or pending legal or
regulatory matters result in fines or costs in excess of the amounts accrued to date, that may also materially impact our results of
operations and financial position.
Changes in applicable tax laws and regulations and resolutions of tax disputes could negatively affect our financial
results.
The Company is subject to taxation in the U.S. and numerous foreign jurisdictions. Changes in the various tax laws can and do
occur. For example, in December 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as
the Tax Cuts and Jobs Act (the U.S. Tax Act). The changes included in the U.S. Tax Act were broad and complex. Under the
current U.S. presidential administration, comprehensive federal income tax reform has been proposed, including an increase in
the U.S. Federal corporate income tax rate, elimination of certain investment incentives and an increase in U.S. taxation of non-
U.S. earnings. While these proposals are controversial, likely to change during the legislative process and may prove difficult to
enact as proposed in the current closely divided U.S. Congress, their impact could nonetheless be significant.
Additionally, longstanding international tax norms that determine each country’s jurisdiction to tax cross-border international
trade are subject to potential evolution. An outgrowth of the original Base Erosion and Profit Shifting (BEPS) project is a
project undertaken by the approximately 140 member countries of the expanded Organisation for Economic Co-operation and
Development (OECD) Inclusive Framework focused on "Addressing the Challenges of the Digitalization of the Economy." The
breadth of this project extends beyond pure digital businesses and, as proposed, would likely impact a large portion of
multinational businesses by potentially redefining jurisdictional taxation rights in market countries and establishing a global
minimum tax. In December 2022, the European Union (EU) approved a directive requiring member states to incorporate a 15%
global minimum tax into their respective domestic laws effective for fiscal years beginning on or after December 31, 2023. In

8 The Procter & Gamble Companyaddition, several non-EU countries have recently proposed and/or adopted legislation consistent with the global minimum tax
framework. Important details of these minimum tax developments are still to be determined and, in some cases, enactment and
timing remain uncertain.
While it is too early to assess the overall impact of these potential changes, as these and other tax laws and related regulations
are revised, enacted and implemented, our financial condition, results of operations and cash flows could be materially
impacted.
Furthermore, we are subject to regular review and audit by both foreign and domestic tax authorities. While we believe our tax
positions will be sustained, the final outcome of tax audits and related litigation, including maintaining our intended tax
treatment of divestiture transactions such as the fiscal 2017 Beauty Brands transaction with Coty, may differ materially from the
tax amounts recorded in our Consolidated Financial Statements, which could adversely impact our results of operations and
cash flows.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
In the U.S., we own and operate 24 manufacturing sites located in 18 different states. In addition, we own and operate 80
manufacturing sites in 34 other countries. Many of the domestic and international sites manufacture products for multiple
businesses. Beauty products are manufactured at 23 of these locations; Grooming products at 17; Health Care products at 20;
Fabric & Home Care products at 37; and Baby, Feminine & Family Care products at 37. We own our Corporate headquarters in
Cincinnati, Ohio. We own or lease our principal regional general offices in Switzerland, Panama, Singapore, China and the
United Arab Emirates. We own or lease our principal regional shared service centers in Costa Rica, the United Kingdom and
the Philippines. Management believes that the Company's sites are adequate to support the business and that the properties and
equipment have been well maintained.
Item 3. 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. See Note 13 to our Consolidated
Financial Statements for information on certain legal proceedings for which there are contingencies.
This item should be read in conjunction with the Company's Risk Factors in Part I, Item 1A for additional information.
Item 4. Mine Safety Disclosure.
Not applicable.

The Procter & Gamble Company 9INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The names, ages and positions held by the Executive Officers of the Company on August 4, 2023, are:

Name

Position

Jon R. Moeller

Chairman of the Board, President and Chief Executive
Officer

Shailesh Jejurikar

Chief Operating Officer

Andre Schulten

Chief Financial Officer

Gary A. Coombe

Chief Executive Officer - Grooming

Jennifer L. Davis

Chief Executive Officer - Health Care

Ma. Fatima D. Francisco

Chief Executive Officer - Baby, Feminine and Family Care
and Executive Sponsor for Gender Equality

R. Alexandra Keith

Chief Executive Officer - Beauty and Executive Sponsor for
Corporate Sustainability

Sundar Raman

Victor Aguilar

Chief Executive Officer - Fabric and Home Care

Chief Research, Development and Innovation Officer

Marc S. Pritchard

Chief Brand Officer

Balaji Purushothaman

Chief Human Resources Officer

Susan Street Whaley

Chief Legal Officer and Secretary

Age

First Elected to
Officer Position

2009 (1)

2018 (2)

2021 (3)

2014 (4)

2022 (5)

2018 (6)

2017 (7)

2021 (8)

2020 (9)

2008 (( )

2023 (10)

2022 (11)

All the Executive Officers named above have been employed by the Company for more than the past five years.
(1) Mr. Moeller previously served as President and Chief Executive Officer (2021 - 2022), Vice Chairman, Chief Operating Officer and Chief Financial

Officer (2019 - 2021), Vice Chairman and Chief Financial Officer (2017 - 2019) and as Chief Financial Officer (2009 - 2017).

(2) Mr. Jejurikar previously served as Chief Executive Officer - Fabric and Home Care (2019 - 2021), President - Global Fabric, Home Care and P&G

Professional (2018 - 2019), and President - Global Fabric Care and Brand-Building Officer Global Fabric & Home Care (2015 - 2018).

(3) Mr. Schulten previously served as Senior Vice President - Baby Care, North America (2018 - 2021) and Senior Vice President - Finance & Accounting,

Global Baby, Feminine and Family Care (2014 - 2018).

(4) Mr. Coombe previously served as President - Europe Selling & Market Operations (2014 - 2018).
(5) Ms. Davis previously served as President - Feminine Care (2019 - 2022), President - Global Feminine Care (2018 - 2019), and Vice President - Feminine

Care, North America and Brand Franchise Leader, Tampax (2016 - 2018).

(6) Ms. Francisco previously served as Chief Executive Officer - Baby and Feminine Care (2019 - 2021), President - Global Baby Care and Baby & Feminine

Care Sector (2018 - 2019), and President - Global Feminine Care (2015 - 2018).
(7) Ms. Keith previously served as Chief Executive Officer - Beauty (2017 - 2022).
(8) Mr. Raman previously served as President - Home Care and P&G Professional (2020 - 2021), President - Fabric Care, North America and P&G

Professional (2019 - 2020), and Vice President - Fabric Care, North America (2015 - 2019).

(9) Mr. Aguilar previously served as Senior Vice President - Research & Development, Corporate Function Research & Development (2020), Senior Vice
President - Research & Development, Corporate Function Research & Development and Global Fabric Care (2019), and Senior Vice President - Research
& Development Global Fabric Care; and Sector Leader, Research & Development Global Fabric and Home Care (2014 - 2019).

(10) Mr. Purushothaman previously served as Senior Vice President - Human Resources, Global Total Rewards, Employee and Labor Relations and Corporate

Services (2020 - 2022) and as Senior Vice President - Human Resources, Beauty, Grooming, and Family Care (2015 - 2020).

(11) Ms. Whaley previously served as Senior Vice President and General Counsel - North America, Practice Groups and Sector Business Units (2019 - 2022),

and Vice President and General Counsel - North America, Global Go-To-Market and Practice Groups, and Global Business Units (2016 - 2019).

10 The Procter & Gamble Company

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

ISSUER PURCHASES OF EQUITY SECURITIES

Period
4/1/2023 - 4/30/2023
5/1/2023 - 5/31/2023

6/1/2023 - 6/30/2023

Total

Total Number of
Shares Purchased (1)

—

914,324

Average Price Paid
per Share (2)
—
—

$149.95

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

—
—

—

(3)

(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 April 21, 2023, the Company stated that in fiscal year 2023 the Company expected to reduce outstanding shares through direct share
repurchases at a value of $7.4 to $8.0 billion, notwithstanding any purchases under the Company's compensation and benefit plans. The
share repurchases were authorized pursuant to a resolution issued by the Company's Board of Directors and were financed through a
combination of operating cash flows and issuance of debt. The total value of the shares purchased under the share repurchase plan was
$7.4 billion. The share repurchase plan ended on June 30, 2023.

Additional information required by this item can be found in Part III, Item 12 of this Form 10-K.
SHAREHOLDER RETURN PERFORMANCE GRAPHS
Market and Dividend Information
P&G has been paying a dividend for 133 consecutive years since its incorporation in 1890 and has increased its dividend for 67
consecutive years since 1956. Over the past ten years, the dividend has increased at an annual compound average rate of 5%.
Nevertheless, as in the past, further dividends will be considered after reviewing dividend yields, profitability and cash flow
expectations and financing needs and will be declared at the discretion of the Company's Board of Directors.

(in dollars; split-adjusted)
Dividends per share

1956

1963

1973

1983

1993

2003

2013

2023

0.01

0.02

0.05

0.14

0.28

0.82

2.29

3.68

The Procter & Gamble Company 11Common Stock Information
P&G trades on the New York Stock Exchange under the stock symbol PG. As of June 30, 2023, there were approximately five
million common stock shareowners, including shareowners of record, participants in P&G stock ownership plans and beneficial
owners with accounts at banks and brokerage firms.
Shareholder Return
The following graph compares the cumulative total return of P&G’s common stock for the five-year period ended June 30,
2023, against the cumulative total return of the S&P 500 Stock Index (broad market comparison) and the S&P 500 Consumer
Staples Index (line of business comparison). The graph and table assume $100 was invested on June 30, 2018, and that all
dividends were reinvested.

Company Name/Index

P&G
S&P 500
S&P 500 Consumer Staples

Cumulative Value of $100 Investment, through June 30

2018

2019

2020

2021

2022

2023

100 $
100
100

145 $
110
116

162 $
119
121

188 $
167
149

205 $
149
159

222
179
169

Item 6. Intentionally Omitted.
Item 7. 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, 8 and 13 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.

12 The Procter & Gamble CompanyRisks 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
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 and geopolitical 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, the environment, due diligence, risk
oversight, 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; (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; (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; (18) the
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, Item 1A) of this Form 10-K.
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 in the following sections:
•
•
•
•
•
•
•
•
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 common share (diluted EPS) and 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), consisting of organic sales growth, core earnings per share (Core EPS), adjusted free cash flow and adjusted free cash
flow productivity. Organic sales growth is net sales growth excluding the impacts of acquisitions and divestitures and foreign
exchange from year-over-year comparisons. Core EPS is diluted EPS excluding certain items that are not judged by
management to be part of the Company's sustainable results or trends. Adjusted free cash flow is operating cash flow less

Overview
Summary of 2023 Results
Economic Conditions and Uncertainties
Results of Operations
Segment Results
Cash Flow, Financial Condition and Liquidity
Critical Accounting Policies and Estimates
Other Information

The Procter & Gamble Company 13capital spending and excluding payments for the transitional tax resulting from the U.S. Tax Act. Adjusted free cash flow
productivity is the ratio of adjusted free cash flow to net earnings excluding certain one-time items. We believe these measures
provide our investors with additional information about our underlying results and trends as well as insight to some of the
metrics used to evaluate management. The explanation at the end of the MD&A provides more 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 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 quarter and
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 drivers of changes in net sales. Organic volume growth reflects year-over-year changes in unit volume
excluding the impacts of acquisitions, divestitures and certain one-time items, if applicable, and is used to explain changes in
organic sales.
OVERVIEW
Procter & Gamble 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 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, 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.
Organizational Structure
Our organizational structure is comprised of Sector Business Units (SBUs), Enterprise Markets (EMs), Corporate Functions
(CF) and Global Business Services (GBS).
Sector Business Units
The Company's ten product categories are organized into five SBUs and five reportable segments (under U.S. GAAP): Beauty;
Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care. The SBUs are responsible for global brand
strategy, product upgrades and innovation, marketing plans and supply chain. They have direct profit responsibility for markets
(referred to as Focus Markets) representing the large majority of the Company's sales and earnings and are also responsible for
innovation plans, supply plans and operating frameworks to drive growth and value creation in the remaining markets (referred
to as Enterprise Markets). Throughout the MD&A, we reference business results by region, which are comprised of North
America, Europe, Greater China, Latin America, Asia Pacific and India, Middle East and Africa (IMEA).

14 The Procter & Gamble CompanyThe following provides additional detail on our reportable segments and the ten product categories and brand composition
within each segment.

Reportable Segments

% of
Net Sales (1)

% of Net
Earnings (1)

Beauty

18%

21%

Grooming (2)

10%

Health Care

14%

Fabric & Home
Care

35%

32%

Baby, Feminine &
Family Care

25%

23%

Product Categories (Sub-Categories)

Major Brands

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 (Appliances, Female Blades & Razors,
Male Blades & Razors, Pre- and Post-Shave
Products, Other Grooming)

Braun, Gillette, Venus

Oral Care (Toothbrushes, Toothpastes, Other Oral
Care)

Crest, Oral-B

Personal Health Care (Gastrointestinal, Pain Relief,
Rapid Diagnostics, Respiratory, Vitamins/Minerals/
Supplements, Other Personal Health Care)

Metamucil, Neurobion,
Pepto-Bismol, Vicks

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 Care (Baby Wipes, Taped Diapers and Pants)
Feminine Care (Adult Incontinence, Feminine Care) Always, Always Discreet,

Luvs, Pampers

Tampax

Family Care (Paper Towels, Tissues, Toilet Paper)

Bounty, Charmin, Puffs

(1)

(2)

Percent of Net sales and Net earnings for the fiscal year ended June 30, 2023 (excluding results held in Corporate).
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.

Organization Design:
Sector Business Units
Beauty: We are a global market leader amongst the beauty categories in which we compete, including hair care and skin and
personal care. We are a global market leader in the retail hair care market with nearly 20% global market share primarily behind
our Pantene and Head & Shoulders brands. In skin and personal care, we offer a wide variety of products, ranging from
deodorants to personal cleansing to skin care, such as our Olay brand, which is one of the top facial skin care brands in the
world with nearly 5% global market share.
Grooming: We are the global market leader in the blades and razors market. Our global blades and razors market share is more
than 60%, primarily behind our Gillette and Venus brands. Our appliances, such as electric shavers and epilators, are sold
primarily under the Braun brand in a number of markets around the world where we compete against both global and regional
competitors. We hold nearly 25% of the male electric shavers market and over 50% of the female epilators market.
Health Care: We compete in oral care and personal health care. In oral care, there are several global competitors in the market,
and we have the number two market share position with nearly 20% global market share behind our Crest and Oral-B brands. In
personal health care, we are a global market leader among the categories in which we compete, including respiratory
treatments, digestive wellness, vitamins and analgesics behind our Vicks, Metamucil, Pepto-Bismol and Neurobion brands.
Fabric & Home Care: This segment is comprised of a variety of fabric care products, including laundry detergents, additives
and fabric enhancers; and home care products, including dishwashing liquids and detergents, surface cleaners and air
fresheners. In fabric care, we generally have the number one or number two market share position in the markets in which we
compete and are the global market leader with over 35% global market share, primarily behind our Tide, Ariel and Downy
brands. Our global home care market share is about 25% across the categories in which we compete, primarily behind our
Cascade, Dawn, Febreze and Swiffer brands.
Baby, Feminine & Family Care: In baby care, we are a global market leader and compete mainly in taped diapers, pants and
baby wipes, with more than 20% global market share. We have the number one or number two market share position in the
markets in which we compete, primarily behind our Pampers brand. We are a global market leader in the feminine care category
with over 25% global market share, primarily behind our Always and Tampax brands. We also compete in the adult
incontinence category in certain markets behind Always Discreet, with over 10% market share in the key markets in which we
compete. Our family care business is predominantly a North American business comprised primarily of the Bounty paper towel
and Charmin toilet paper brands. North America market shares are over 40% for Bounty and over 25% for Charmin.

The Procter & Gamble Company 15Enterprise Markets
Enterprise Markets are responsible for sales and profit delivery in specific countries, supported by SBU-agreed innovation and
supply chain plans, along with scaled services like planning, distribution and customer management.
Corporate Functions
Corporate Functions provides company-level strategy and portfolio analysis, corporate accounting, treasury, tax, external
relations, governance, human resources, information technology and legal services.
Global Business Services
Global Business Services provides scaled services in technology, process and data tools to enable the SBUs, the EMs and CF to
better serve consumers and customers. The GBS organization is responsible for providing world-class services and solutions
that drive value for P&G.
Strategic Focus
Procter & Gamble aspires to serve the world’s consumers better than our best competitors in every category and in every
country in which we compete and, as a result, deliver total shareholder return in the top one-third of our peer group. Delivering
and sustaining leadership levels of shareholder value creation requires balanced top- and bottom-line growth and strong cash
generation.
The Company competes in daily-use product categories where performance plays a significant role in the consumer's choice of
brands, and therefore, play to P&G's strengths. Our focused portfolio of businesses consists of ten product categories where
P&G has leading market positions, strong brands and consumer-meaningful product technologies.
Within these categories, our strategic choices are focused on delighting and winning with consumers. Our consumers are at the
center of everything we do. We win with consumers by delivering irresistible superiority across five key vectors - product
performance, packaging, brand communication, retail execution and value. Winning with consumers around the world and
against our best competitors requires superior innovation. Innovation has always been, and continues to be, P&G’s
lifeblood. Superior products delivered with superior execution drive market growth, value creation for retailers and build share
growth for P&G.
Ongoing productivity improvement is crucial to delivering our balanced top- and bottom-line growth, cash generation and value
creation objectives. Productivity improvement enables investments to strengthen the superiority of our brands via product and
packaging innovation, more efficient and effective supply chains, equity and awareness-building brand advertising and other
programs and expansion of sales coverage and R&D programs. Productivity improvements also enable us to mitigate
challenging cost environments (including periods of increasing commodity and negative foreign exchange impacts). Our
objective is to drive productivity improvements across all elements of the statement of earnings and balance sheet, including
cost of goods sold, marketing and promotional spending, overhead costs and capital spending.
We act with agility and are constructively disrupting our highly competitive industry and the way we do business, including
how we innovate, communicate and leverage new technologies, to create more value.
We are improving operational effectiveness and organizational culture through enhanced clarity of roles and responsibilities,
accountability and incentive compensation programs.
Additionally, within this strategy of superiority, productivity, constructive disruption and organization, we have declared four
focus areas to strengthen our performance going forward. These are 1) leveraging environmental sustainability as an additional
driver of superior performing products and packaging innovations, 2) increasing digital acumen to drive consumer and
customer preference, reduce cost and enable rapid and efficient decision making, 3) developing next-level supply chain
capabilities to enable flexibility, agility, resilience and a new level of productivity and 4) delivering employee value equation
for all gender identities, races, ethnicities, sexual orientations, ages and abilities for all roles to ensure we continue to attract,
retain and develop the best talent.
We believe this strategy is right for the long-term health of the Company and our objective of delivering total shareholder return
in the top one-third of our peer group.
The Company expects the delivery of the following long-term growth algorithm will result in total shareholder returns in the
top third of the competitive, fast-moving consumer goods peer group:
• Organic sales growth above market growth rates in the categories and geographies in which we compete;
• Core EPS growth of mid-to-high single digits; and
• Adjusted free cash flow productivity of 90% or greater.
While periods of significant macroeconomic pressures may cause short-term results to deviate from the long-term growth
algorithm, we intend to maintain a disciplined approach to investing in our business.

16 The Procter & Gamble Company

SUMMARY OF 2023 RESULTS

Amounts in millions, except per share amounts

Net sales
Operating income
Net earnings
Net earnings attributable to Procter & Gamble
Diluted net earnings per common share
Core earnings per share
Cash flow from operating activities

2023

2022

Change vs.
Prior Year

82,006 $
18,134
14,738
14,653

5.90

80,187
17,813
14,793
14,742

5.81

16,848

16,723

2 %
2 %
— %
(1) %
2 %
2 %
1 %

•

Net sales increased 2% to $82.0 billion versus the prior year. The net sales growth was driven by a mid-single-digit
increase in Health Care, low single-digit increases in Fabric & Home Care, Baby, Feminine & Family Care and Beauty,
partially offset by a low single-digit decrease in Grooming. Organic sales, which excludes the impact of acquisitions and
divestitures and foreign exchange, increased 7%. Organic sales increased high single digits in Health Care and Fabric &
Home Care and mid-single digits in Baby, Feminine & Family Care, Beauty and Grooming.
Operating income increased $321 million, or 2%, to $18.1 billion versus year ago due to the increase in net sales, partially
offset by a modest decrease in operating margin.
Net earnings decreased modestly by $55 million to $14.7 billion versus year ago as the increase in operating income was
more than fully offset by a higher effective tax rate. Foreign exchange impacts reduced net earnings by approximately $1.4
billion.
Net earnings attributable to Procter & Gamble decreased $89 million, or 1%, to $14.7 billion versus the prior year due
primarily to the decrease in net earnings.
Diluted EPS increased 2% to $5.90 as the decrease in net earnings was more than offset by a reduction in shares
outstanding.
Cash flow from operating activities was $16.8 billion.
o Adjusted free cash flow, which is operating cash flow less capital expenditures and certain other impacts, was $14.0

billion.

o Adjusted free cash flow productivity, which is the ratio of adjusted free cash flow to net earnings, was 95%.

ECONOMIC CONDITIONS AND UNCERTAINTIES
We discuss expectations regarding future performance, events and outcomes, such as our business outlook and objectives, in
annual and quarterly reports, press releases and other written and oral communications. All such statements, except for
historical and present factual information, are "forward-looking statements" and are based on financial data and our business
plans available only as of the time the statements are made, which may become out-of-date or incomplete. We assume no
obligation to update any forward-looking statements as a result of new information, future events or other factors, except as
required by law. Forward-looking statements are inherently uncertain and investors must recognize that events could be
significantly different from our expectations. For more information on risk factors that could impact our results, please refer to
“Risk Factors” in Part I, Item 1A of this Form 10-K.
Global Economic Conditions. Our products are sold in numerous countries across North America, Europe, Latin America,
Asia, Australia and Africa, with more than half our sales generated outside the United States. Our largest international markets
are Greater China, the United Kingdom, Canada, Japan and Germany and collectively comprise more than 20% of our net sales
in fiscal 2023. As such, we are exposed to and impacted by global macroeconomic factors, geopolitical tensions, U.S. and
foreign government policies and foreign exchange fluctuations. We are also exposed to market risks from operating in
challenging environments including unstable economic, political and social conditions, civil unrest, natural disasters, debt and
credit issues and currency controls or fluctuations. These risks can reduce our net sales or erode our operating margins 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, other 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. Volatility in the market price of these commodities and input materials has a direct impact on our costs. Disruptions in our
manufacturing, supply and distribution operations due to energy shortages, natural disasters, labor or freight constraints have
impacted our costs and could do so in the future. New or increased legal or regulatory requirements, along with initiatives to
meet our sustainability goals, could also result in increased costs due to higher material costs and investments in facilities and
equipment. We strive to implement, achieve and sustain cost improvement plans, including supply chain optimization and
general overhead and workforce optimization. Increased pricing in response to certain inflationary or cost increases may also
offset portions of the cost impacts; however, such price increases may impact product consumption. If we are unable to manage
cost impacts through pricing actions and consistent productivity improvements, it may adversely impact our net sales, gross
margin, operating margin, net earnings and cash flows.

The Procter & Gamble Company 17Foreign Exchange. We have significant 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 the past three years, weakening of certain foreign currencies versus the U.S.
dollar has resulted in significant foreign exchange impacts leading to lower net sales, net earnings and cash flows. Certain
countries that recently had and are currently experiencing significant exchange rate fluctuations include Argentina, Brazil, the
United Kingdom, Japan, Russia and Turkey. These fluctuations have significantly impacted our historical net sales, net earnings
and cash flows and could do so in the future. 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 sales, gross margin, operating margin, net earnings and cash flows could be affected by changes
in U.S. or foreign government legislative, regulatory or enforcement policies. For example, 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, including changes resulting
from the current work being led by the OECD/G20 Inclusive Framework focused on "Addressing the Challenges of the
Digitalization of the Economy." The breadth of the OECD project extends beyond pure digital businesses and, as proposed, is
likely to impact most large multinational businesses by both redefining jurisdictional taxation rights and establishing a 15%
global minimum tax. 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 Egypt, Argentina and 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. Changes in
government policies in the above areas might cause an increase or decrease in our net sales, gross margin, operating margin, net
earnings and cash flows.
Russia-Ukraine War. The war between Russia and Ukraine has negatively impacted our operations. Our Ukraine business
includes two manufacturing sites and accounted for less than 1% of consolidated net sales and consolidated net earnings in the
fiscal year ended June 30, 2023. Net assets of our Ukraine business accounted for less than 1% of consolidated net assets as of
June 30, 2023. Our Russia business includes two manufacturing sites. Beginning in March 2022, the Company reduced its
product portfolio, discontinued new capital investments and suspended media, advertising and promotional activity in Russia.
The Russia business accounted for approximately 2% of consolidated net sales and consolidated net earnings in the fiscal year
ended June 30, 2023. Net assets of our Russia business accounted for less than 2% of consolidated net assets as of June 30,
2023.
Future impacts to the Company are difficult to predict due to the high level of uncertainty related to the war's duration,
evolution and ultimate 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.
Within Russia, we may not be able to continue our reduced operations at current levels due to sanctions and counter-sanctions,
monetary, currency or payment controls, legislative restrictions or policies, restrictions on access to financial institutions and
supply and transportation challenges. Our suppliers, distributors and retail customers are also impacted by the war and their
ability to successfully maintain their operations could also impact our operations or negatively impact the sales of our products.
More broadly, there could be additional negative impacts to our net sales, earnings and cash flows 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 supply chain cost increases or the geographic proximity of the war relative to the rest
of Europe.
For additional information on risk factors that could impact our business results, please refer to “Risk Factors” in Part I, Item
1A of this Form 10-K.
RESULTS OF OPERATIONS
The key metrics included in the discussion of our consolidated results of operations include net sales, gross margin, selling,
general and administrative costs (SG&A), operating margin, other non-operating items, income taxes and net earnings. The
primary factors driving year-over-year changes in net sales include overall market growth in the categories in which we
compete, product initiatives, competitive activities (the level of initiatives, pricing and other activities by competitors),
marketing spending, retail executions (both in-store and online) and acquisition and divestiture activity, all of which drive
changes in our underlying unit volume, as well as our pricing actions (which can also impact volume), changes in product and
geographic mix and foreign exchange impacts on sales outside the U.S.
For most of our categories, our cost of products sold and SG&A are variable in nature to some extent. Accordingly, our
discussion of these operating costs focuses primarily on relative margins rather than the absolute year-over-year changes in total
costs. The primary drivers of changes in gross margin are input costs (energy and other commodities), pricing impacts,
geographic mix (for example, gross margins in North America are generally higher than the Company average for similar
products), product mix (for example, the Beauty segment has higher gross margins than the Company average), foreign

18 The Procter & Gamble Companyexchange rate fluctuations (in situations where certain input costs may be tied to a different functional currency than the
underlying sales), the impacts of manufacturing savings projects and reinvestments (for example, product or package
improvements) and, to a lesser extent, scale impacts (for costs that are fixed or less variable in nature). The primary components
of SG&A are marketing-related costs and non-manufacturing overhead costs. Marketing-related costs are primarily variable in
nature, although we may achieve some level of scale benefit over time due to overall growth and other marketing efficiencies.
While overhead costs are variable to some extent, we generally experience more scale-related impacts for these costs due to our
ability to leverage our organization and systems' infrastructures to support business growth. The main drivers of changes in
SG&A as a percentage of net sales are overhead and marketing cost savings, reinvestments (for example, increased
advertising), inflation, foreign exchange fluctuations and scale impacts.
For a detailed discussion of the fiscal 2022 year-over-year changes, please refer to the MD&A in Part II, Item 7 of the
Company's Form 10-K for the fiscal year ended June 30, 2022.
Net Sales
Net sales increased 2% to $82.0 billion in fiscal 2023. The increase in net sales was driven by higher pricing of 9% and a
favorable mix of 1%, partially offset by unfavorable foreign exchange of 5% and a 3% decrease in unit volume versus the prior
year. Favorable mix was driven by a higher proportion of sales in North America (with higher than Company-average selling
prices) and decline in Europe (with lower than Company-average selling prices). Excluding the impacts of foreign exchange
and acquisitions and divestitures, organic sales grew 7%.
Net sales increased mid-single digits in Health Care, increased low single digits in Fabric & Home Care, Baby, Feminine &
Family Care and Beauty and decreased low single digits in Grooming. On a regional basis, volume decreased double digits in
Europe, mid-single digits in Greater China and low single digits in Asia Pacific, IMEA and North America. Volume increased
low single digits in Latin America.
Operating Costs

Comparisons as a percentage of net sales; fiscal years ended June 30

2023

2022

Basis Point Change

Gross margin
Selling, general and administrative expense

Operating margin

Earnings before income taxes

Net earnings

Net earnings attributable to Procter & Gamble

47.9 %
25.7 %

22.1 %

22.4 %

18.0 %

17.9 %

47.4 %
25.2 %

22.2 %

22.4 %

18.4 %

50 bps
50 bps

(10) bps

0 bps

(40) bps

(50) bps

a 430 basis-point increase from higher pricing and
a 150 basis-point increase from manufacturing productivity savings.

Gross margin increased 50 basis points to 47.9% of net sales. The increase in gross margin was due to:
•
•
These increases were partially offset by
•
•

320 basis points of increased commodity and input material costs,
a 110 basis-point decline from unfavorable mix due to the launch and growth of premium products (which have lower than
Company-average gross margins) and the disproportionate decline of the super-premium SK-II brand,
a 50 basis-point decline from unfavorable foreign exchange impacts,
30 basis points due to capacity start-up costs and other manufacturing impacts and
20 basis points of product and packaging investments.

•
•
•
Total SG&A increased 4% to $21.1 billion due primarily to an increase in overhead costs and other net operating costs. SG&A
as a percentage of net sales increased 50 basis points to 25.7% due to an increase in overhead and other net operating costs as a
percentage of net sales, partially offset by a decrease in marketing spending as a percentage of net sales.
• Marketing spending as a percentage of net sales decreased 40 basis points due to the positive scale impacts of the net sales

•

increase and increased productivity savings, partially offset by increased media reinvestments.
Overhead costs as a percentage of net sales increased 40 basis points due to wage inflation and other cost increases,
partially offset by the positive scale impacts of the net sales increase and productivity savings.
Other net operating expenses as a percentage of net sales increased 60 basis points due primarily to higher foreign
exchange transactional charges.

Productivity-driven cost savings delivered 90 basis points of benefit to SG&A as a percentage of net sales.
Operating margin decreased 10 basis points to 22.1% as the increase in gross margin was more than fully offset by the increase
in SG&A as a percentage of net sales as discussed above.

The Procter & Gamble Company 19Non-Operating Items
•

Interest expense was $756 million, an increase of $317 million versus the prior year due to higher interest rates and an
increase in short-term debt in the current year.
Interest income was $307 million, an increase of $256 million versus the prior year due to higher interest rates.

•
• Other non-operating income increased $98 million to $668 million due primarily to a prior year unrealized loss on equity

investments and a current year gain on divestiture of minor brands.

Income Taxes
The effective tax rate increased 190 basis points versus the prior year period to 19.7% due to:
•
•
•

a 100 basis-point increase from lower excess tax benefits of share-based compensation,
a 50 basis-point increase from discrete impacts related to uncertain tax positions and
a 40 basis-point increase primarily from lower current year deductions for foreign-derived intangible income versus prior
year.
Net Earnings
Operating income increased $321 million, or 2%, to $18.1 billion due to the increase in net sales, partially offset by a modest
decrease in operating margin, both of which are discussed above.
Earnings before income taxes increased $358 million, or 2%, to $18.4 billion due primarily to the increase in operating income.
Net earnings declined modestly by $55 million to $14.7 billion due to the increase in earnings before income taxes, more than
fully offset by the increase in the effective income tax rate discussed above. Foreign exchange impacts reduced net earnings by
approximately $1.4 billion due to a weakening of certain currencies against the U.S. dollar. This impact includes both
transactional charges and translational impacts from converting earnings from foreign subsidiaries to U.S. dollars.
Net earnings attributable to Procter & Gamble decreased $89 million, or 1%, to $14.7 billion.
Diluted EPS increased $0.09, or 2%, to $5.90 as the decrease in net earnings was more than fully offset by a reduction in shares
outstanding.
SEGMENT RESULTS
Segment results reflect information on the same basis we use for internal management reporting and performance evaluation.
The results of these reportable segments do not include certain non-business unit specific costs which are reported in our
Corporate segment and are included as part of our Corporate segment discussion. Additionally, we apply blended statutory tax
rates in the segments. Eliminations to adjust segment results to arrive at our consolidated effective tax rate are included in
Corporate. See Note 2 to the Consolidated Financial Statements for additional information on items included in the Corporate
segment.

Beauty
Grooming

Health Care
Fabric & Home Care

Baby, Feminine & Family Care

TOTAL COMPANY

Net Sales Change Drivers 2023 vs. 2022 (1)

Volume with
Acquisitions &
Divestitures

Volume
Excluding
Acquisitions &
Divestitures

Foreign
Exchange

Price

Mix

Other (2)

Net Sales
Growth

(1) %
(3) %

(1) %
(4) %

(3) %

(3)%

(2) %
(3) %

(1) %
(4) %

(3) %

(3)%

(5) %
(7) %

(4) %
(5) %

(4) %

(5)%

8 %
9 %

5 %
11 %

8 %

9 %

(1) %
1 %
(2) % — %

4 % — %
1 % — %

1 % — %

2 %
(3) %

4 %
3 %

2 %

(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.

BEAUTY

($ millions)
Volume
Net sales

Net earnings

% of net sales

2023
N/A
$15,008

$3,178

21.2%

2022
N/A
$14,740

$3,160

21.4%

Change vs. 2022
(1)%
2%

(20) bps

Beauty net sales increased 2% to $15.0 billion as the positive impacts of higher pricing of 8% and benefit from acquisitions of
1% were partially offset by unfavorable foreign exchange of 5%, unfavorable mix of 1% (due primarily to the decline of the
super-premium SK-II brand, which has higher than segment-average selling prices) and a 1% decrease in unit volume.

20 The Procter & Gamble Company

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 6%. Global market share of
the Beauty segment increased 0.3 points.
•

Hair Care net sales increased low single digits. Positive impacts of higher pricing (driven by all regions) and benefit from
acquisitions were partially offset by the negative impacts of unfavorable foreign exchange and a decrease in unit volume.
Mix had a neutral impact on net sales. The volume decrease was driven primarily by declines in Europe (due to portfolio
reduction in Russia and increased pricing), Greater China (due to market contraction and pandemic-related disruptions) and
Asia Pacific (due to increased pricing). Organic sales increased high single digits driven by 20% growth in Latin America
and double-digit growth in Europe and North America, partially offset by a mid-single-digit decline in Greater China.
Global market share of the hair care category decreased more than half a point.
Skin and Personal Care net sales increased low single digits. Positive impacts of higher pricing (across all regions), a unit
volume increase and a benefit from acquisitions were partially offset by the negative impacts from unfavorable mix (due
primarily to the decline of the super-premium SK-II brand) and unfavorable foreign exchange. The volume increase was
driven primarily by growth in North America, Latin America and Greater China (all due to innovation), partially offset by a
decline in Asia Pacific (due to the decline of the super-premium SK-II brand in the travel retail channel). Organic sales
increased mid-single digits as more than 20% increases in Latin America and Europe and a double-digit increase in North
America were partially offset by a double-digit decrease in Asia Pacific. Global market share of the skin and personal care
category increased nearly a point.

•

Net earnings increased 1% to $3.2 billion due to the increase in net sales, partially offset by a 20 basis-point decrease in net
earnings margin. Net earnings margin decreased due to a reduction in gross margin, partially offset by a reduction in SG&A as a
percentage of net sales. The gross margin reduction was driven by negative product mix (due to the decline of the super-
premium SK-II brand), increased commodity costs and unfavorable foreign exchange, partially offset by increased pricing.
SG&A as a percentage of net sales decreased primarily due to a decrease in marketing spending.

GROOMING

($ millions)
Volume
Net sales

Net earnings

% of net sales

2023

N/A
$6,419

$1,461

22.8%

2022

Change vs. 2022

N/A
$6,587

$1,490

22.6%

(3)%
(3)%

(2)%

20 bps

Grooming net sales decreased 3% to $6.4 billion driven by unfavorable foreign exchange of 7%, a 3% decrease in unit volume
and unfavorable mix of 2% (due to decline of appliances, which have higher than segment-average selling prices), partially
offset by higher pricing of 9% (driven by all regions). The volume decrease was primarily driven by decreases in Europe (due
to portfolio reduction in Russia and increased pricing) and North America (due to market contraction and increased pricing).
Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 5% driven by growth in all
regions led by a more than 20% growth in Latin America and a double-digit growth in Asia Pacific. Global market share of the
Grooming segment increased 1 point.
Net earnings decreased 2% to $1.5 billion due to the decrease in net sales, partially offset by a 20 basis-point increase in net
earnings margin. Net earnings margin increased as a decrease in gross margin was more than fully offset by a decrease in
SG&A as a percentage of net sales. The gross margin decrease was driven by unfavorable product mix (due to a
disproportionate decline of higher gross margin appliances such as premium shavers), commodity cost increases and
unfavorable foreign exchange, partially offset by higher pricing and productivity savings. SG&A as a percentage of net sales
decreased due primarily to a decrease in marketing spending.

HEALTH CARE

($ millions)
Volume
Net sales

Net earnings

% of net sales

2023
N/A
$11,226

$2,125

18.9%

2022
N/A
$10,824

$2,006

18.5%

Change vs. 2022
(1)%
4%

40 bps

Health Care net sales increased 4% to $11.2 billion driven by higher pricing of 5% and favorable mix of 4% (due to growth in
North America and the Personal Health Care category, both of which have higher than segment-average selling prices), partially
offset by unfavorable foreign exchange of 4% and a 1% decrease in unit volume. Excluding the impact of foreign exchange and
acquisitions and divestitures, organic sales increased 8%. Global market share of the Health Care segment decreased 0.2 points.

The Procter & Gamble Company 21•

•

Oral Care net sales decreased low single digits. Negative impacts of unfavorable foreign exchange and a unit volume
decrease were partially offset by increased pricing (driven primarily by North America and Europe) and favorable premium
product mix. Volume decline was primarily driven by Europe (due to portfolio reduction in Russia and increased pricing),
North America (due to increased pricing) and Greater China (due to market contraction, especially in the power brush
market). Organic sales increased low single digits driven by a more than 20% growth in Latin America and a low single-
digit growth in North America. Global market share of the oral care category was unchanged.
Personal Health Care net sales increased double digits. Positive impacts of favorable mix (due to the disproportionate
growth of North America and respiratory products, both of which have higher than category-average selling prices), higher
pricing (driven primarily by North America, Europe and Latin America) and a unit volume increase were partially offset by
unfavorable foreign exchange. Volume increase was primarily driven by growth in North America (due to innovation and a
stronger respiratory season) and Latin America, partially offset by a decline in IMEA (versus a prior year impacted by
pandemic-related consumption increases in certain markets). Organic sales increased mid-teens driven by a high teens
increase in North America, a mid-teens increase in Europe and a low teens increase in Latin America. Global market share
of the personal health care category was unchanged.

Net earnings increased 6% to $2.1 billion due to the increase in net sales and a 40 basis-point increase in net earnings margin.
Net earnings margin increased as a decrease in gross margin was more than fully offset by a decrease in SG&A as a percentage
of net sales. The decrease in gross margin was driven by unfavorable product mix (due to the growth of products such as
manual brushes, which have lower gross margins) and increased commodity and input material costs, partially offset by
increased pricing. SG&A as a percentage of net sales decreased due to the positive scale impacts of the net sales increase and
lower marketing spending, partially offset by increased overhead spending.

FABRIC & HOME CARE

($ millions)
Volume
Net sales

Net earnings

% of net sales

2023
N/A
$28,371

$4,828

17.0%

2022
N/A
$27,556

$4,386

15.9%

Change vs. 2022
(4)%
3%

10%

110 bps

Fabric & Home Care net sales increased 3% to $28.4 billion driven by higher pricing of 11% and favorable mix of 1% (due to a
disproportionate volume decline in Europe, which has lower than segment-average selling prices), partially offset by
unfavorable foreign exchange of 5% and a 4% decrease in unit volume. Excluding the impact of foreign exchange and
acquisitions and divestitures, organic sales increased 8%. Global market share of the Fabric & Home Care segment was
unchanged.
•

Fabric Care net sales increased low single digits. Positive impacts of higher pricing (driven by all regions) and favorable
geographic mix (due to decline in Europe, which has lower than category-average selling prices) were partially offset by
unfavorable foreign exchange and a decrease in unit volume. The volume decrease was primarily driven by declines in
Europe (due to increased pricing and portfolio reduction in Russia), North America (due to increased pricing and market
contraction) and Greater China (due to portfolio reductions and market contraction). Organic sales increased high single
digits driven by more than 20% increases in Latin America and IMEA, high single-digit increases in Asia Pacific and
Europe and a low single-digit increase in North America. Global market share of the fabric care category decreased nearly
a point.
Home Care net sales increased mid-single digits. Positive impacts of higher pricing (driven primarily by Europe and North
America) and favorable product mix were partially offset by unfavorable foreign exchange and a decrease in unit volume.
The volume decrease was driven by declines in Europe (due to market contraction and increased pricing) and North
America (due to market contraction). Organic sales increased high single digits driven by a mid-teens growth in Europe
and a high single-digit growth in North America. Global market share of the home care category increased more than a
point.

•

Net earnings increased 10% to $4.8 billion due to the increase in net sales and a 110 basis-point increase in net earnings margin.
Net earnings margin increased due to an increase in gross margin, partially offset by an increase in SG&A as a percentage of net
sales. The gross margin increase was driven by increased pricing, partially offset by an increase in commodity and input
material costs, unfavorable foreign exchange and unfavorable product mix. SG&A as a percentage of net sales increased due to
an increase in media spending, partially offset by the positive scale effects of the net sales increase.

22 The Procter & Gamble CompanyBABY, FEMININE & FAMILY CARE

($ millions)
Volume
Net sales

Net earnings

% of net sales

2023

N/A
$20,217

$3,545

17.5%

2022

Change vs. 2022

N/A
$19,736

$3,266

16.5%

(3)%
2%

100 bps

Baby, Feminine & Family Care net sales increased 2% to $20.2 billion as the positive impacts of higher pricing of 8% and
favorable mix of 1% (due to a higher proportion of sales in North America, which has higher than segment-average selling
prices) were partially offset by unfavorable foreign exchange of 4% and a 3% decrease in unit volume. Excluding the impact of
foreign exchange and acquisitions and divestitures, organic sales increased 6%. Global market share of the Baby, Feminine &
Family Care segment was unchanged.
•

Baby Care net sales decreased low single digits. Negative impacts of a decrease in unit volume and unfavorable foreign
exchange were partially offset by higher pricing (across all regions) and favorable product and geographic mix (due to a
higher proportion of sales in North America). The volume decrease was driven primarily by declines in Europe (due to
increased pricing and portfolio reduction in Russia), North America (due to increased pricing) and Greater China. Organic
sales increased mid-single digits driven by a more than 30% growth in Latin America, high single-digit growth in IMEA
and mid-single-digit growth in North America and Europe, partially offset by a double-digit decline in Greater China.
Global market share of the baby care category was unchanged.
Feminine Care net sales increased mid-single digits. Positive impacts of higher pricing (driven by all regions) and
favorable product and geographic mix (due to a decline in Europe, which has lower than category-average selling prices)
were partially offset by unfavorable foreign exchange and a decrease in unit volume. The volume decrease was driven
primarily by declines in Europe (due to portfolio reduction in Russia and increased pricing) and IMEA (due to increased
pricing). Organic sales increased double digits driven by growth in all regions led by a mid-teens increase in Europe and a
double-digit increase in North America. Market share of the feminine care category increased nearly half a point.
Net sales in Family Care, which is predominantly a North American business, increased low single digits driven by higher
pricing. Unit volume had a neutral impact on net sales. Organic sales increased mid-single digits. North America's share of
the family care category decreased nearly half a point.

•

Net earnings increased 9% to $3.5 billion due to the increase in net sales and a 100 basis-point increase in net earnings margin.
Net earnings margin increased primarily due to an increase in gross margin and a modest decrease in SG&A as a percentage of
net sales. Gross margin increased due to increased pricing, partially offset by an increase in commodity and input material
costs. SG&A as a percentage of net sales decreased due to the positive scale effects of the net sales increase partially offset by
an increase in other operating expense.

CORPORATE

($ millions)
Net sales
Net earnings/(loss)

2023
$765
$(399)

2022
$744
$485

Change vs. 2022
3%
N/A

Corporate includes certain operating and non-operating activities not allocated to specific business segments. These include but
are not limited to incidental businesses managed at the corporate level, gains and losses related to certain divested brands or
businesses, impacts from various financing and investing activities, impacts related to employee benefits, asset impairments and
restructuring activities including manufacturing and workforce optimization. Corporate also includes reconciling items to adjust
the accounting policies used within the reportable segments to U.S. GAAP. The most notable ongoing reconciling item is
income taxes, which adjusts the blended statutory rates that are reflected in the reportable segments to the overall Company
effective tax rate.
Corporate net sales increased 3% to $765 million due to an increase in net sales of the incidental businesses managed at the
corporate level. Corporate net earnings decreased $884 million to a loss of $399 million primarily due to higher interest
expense, lower excess tax benefits of share-based compensation and higher foreign exchange transactional charges, partially
offset by the increase in net sales of the incidental businesses and higher interest income.
Restructuring Program to Deliver Productivity and Cost Savings
The Company has historically had an ongoing restructuring program with annual spending in the range of $250 to $500 million.
Savings generated from the Company's restructuring program are difficult to estimate, given the nature of the activities, the
timing of the execution and the degree of reinvestment. In fiscal 2023, the Company incurred before tax restructuring costs
within the range of our historical annual ongoing level of $250 to $500 million.

The Procter & Gamble Company 23Restructuring accruals of $174 million as of June 30, 2023, are classified as current liabilities. Approximately 87% of the
restructuring charges incurred in fiscal 2023 either have been or will be settled with cash. Consistent with our policies for
ongoing restructuring-type activities, the resulting charges are funded by and included within Corporate for segment reporting.
In addition to our restructuring programs, we have additional ongoing savings efforts in our supply chain, marketing and
overhead areas that yield additional benefits to our operating margins.
CASH FLOW, FINANCIAL CONDITION AND LIQUIDITY
We believe our financial condition continues to be of high quality, as evidenced by our ability to generate substantial cash from
operations and to readily access capital markets at competitive rates.
Operating cash flow provides the primary source of cash to fund operating needs and capital expenditures. Excess operating
cash is used first to fund shareholder dividends. Other discretionary uses include share repurchases and acquisitions to
complement our portfolio of businesses, brands and geographies. As necessary, we may supplement operating cash flow with
debt to fund these activities. The overall cash position of the Company reflects our strong business results and a global cash
management strategy that takes into account liquidity management, economic factors and tax considerations.
Cash Flow Analysis

($ millions)
Net cash provided by operating activities
Net cash used in investing activities

Net cash used in financing activities
Adjusted Free Cash Flow

Adjusted Free Cash Flow Productivity

2023
16,848
(3,500)

(12,146)
14,011

2022
$ 16,723
(4,424)

(14,876)
13,792

95 %

93 %

•

Operating Cash Flow
Operating cash flow was $16.8 billion in 2023, a 1% increase versus the prior year. Net earnings, adjusted for non-cash items
(depreciation and amortization, share-based compensation, deferred income taxes and gain on sale of assets) generated
approximately $17.5 billion of operating cash flow. Working capital and other impacts used $656 million of operating cash
flow as summarized below.
•

An increase in Accounts receivable used $307 million of cash primarily due to sales growth. The number of days sales
outstanding increased approximately 1 day versus prior year.
Higher inventory used $119 million of cash due to increased safety stock levels to strengthen supply chain sufficiency.
Inventory days on hand was flat versus year ago.
Accounts payable and Accrued and other liabilities provided $313 million of cash, primarily driven by increases in taxes
payable and accrued compensation expense, partially offset by a reduction in trade payables. The reduction in trade
payables was due to lower supply chain payables from a decrease in commodity and transportation costs, partially offset by
the impact of extended payment terms with suppliers (see Extended Payment Terms and Supply Chain Financing below).
Days payable outstanding decreased approximately 3 days versus prior year.
Other net operating assets and liabilities used $543 million of cash primarily driven by pension-related contributions.

•
Adjusted Free Cash Flow. We view adjusted free cash flow as an important non-GAAP measure because it is a factor
impacting the amount of cash available for dividends, share repurchases, acquisitions and other discretionary investments. It is
defined as operating cash flow less capital expenditures and excluding payments for the transitional tax resulting from the U.S.
Tax Act. Adjusted free cash flow is one of the measures used to evaluate senior management and determine their at-risk
compensation.
Adjusted free cash flow was $14.0 billion in 2023, an increase of 2% versus the prior year. The increase was primarily driven
by the increase in operating cash flows as discussed above. Adjusted free cash flow productivity, defined as the ratio of adjusted
free cash flow to net earnings, was 95% in 2023.
Extended Payment Terms and Supply Chain Financing. Beginning in fiscal 2014, in response to evolving market practices,
the Company began a program to negotiate extended payment terms with its suppliers. At the same time, the Company initiated
a Supply Chain Finance program (the "SCF") with a number of global financial institutions (the "SCF Banks"). Under the SCF,
qualifying suppliers may elect to sell their receivables from the Company to an SCF Bank. These participating suppliers
negotiate their receivables sales arrangements directly with the respective SCF Bank. While the Company is not party to those
agreements, the SCF Banks allow the participating suppliers to utilize the Company’s creditworthiness in establishing credit
spreads and associated costs. This generally provides the suppliers with more favorable terms than they would be able to secure
on their own. The Company has no economic interest in a supplier’s decision to sell a receivable. Once a qualifying supplier
elects to participate in the SCF and reaches an agreement with an SCF Bank, they elect which individual Company invoices
they sell to the SCF bank. However, all the Company’s payments to participating suppliers are paid to the SCF Bank on the
invoice due date, regardless of whether the individual invoice is sold by the supplier to the SCF Bank. The SCF Bank pays the
supplier on the invoice due date for any invoices that were not previously sold to the SCF Bank under the SCF.

24 The Procter & Gamble CompanyThe terms of the Company’s payment obligation are not impacted by a supplier’s participation in the SCF. Our payment terms
with our suppliers for similar services and materials within individual markets are consistent between suppliers that elect to
participate in the SCF and those that do not participate. Accordingly, our average days outstanding are not significantly
impacted by the portion of suppliers or related input costs that are included in the SCF. In addition, the SCF is available to both
material suppliers, where the underlying costs are largely included in Cost of goods sold, and to service suppliers, where the
underlying costs are largely included in SG&A. As of June 30, 2023, approximately 3% of our global suppliers have elected to
participate in the SCF. Payments to those suppliers during fiscal year 2023 were approximately $18 billion, which equals
approximately 29% of our total Cost of goods sold and SG&A for the year. For participating suppliers, we believe substantially
all of their receivables with the Company are sold to the SCF Banks. Accordingly, we would expect that at each balance sheet
date, a similar proportion of amounts originally due to suppliers would instead be payable to SCF Banks. All outstanding
amounts related to suppliers participating in the SCF are recorded within Accounts payable in our Consolidated Balance Sheets,
and the associated payments are included in operating activities within our Consolidated Statements of Cash Flows. As of
June 30, 2023 and 2022, the amounts due to suppliers participating in the SCF and included in Accounts payable were
approximately $6 billion.
Although difficult to project due to market and other dynamics, we anticipate incremental cash flow benefits from the extended
payment terms with suppliers could increase at a slower rate in fiscal 2024. Future changes in our suppliers’ financing policies
or economic developments, such as changes in interest rates, general market liquidity or the Company’s credit-worthiness
relative to participating suppliers, could impact suppliers’ participation in the SCF and/or our ability to negotiate extended
payment terms with our suppliers. However, any such impacts are difficult to predict.
Investing Cash Flow
Net investing activities used $3.5 billion of cash in 2023, primarily due to capital spending and acquisitions.
Capital Spending. Capital expenditures, primarily to support capacity expansion, innovation and cost efficiencies, were $3.1
billion in 2023. Capital spending as a percentage of net sales decreased 20 basis points to 3.7% in 2023.
Acquisitions. Acquisition activity used cash of $765 million in 2023, primarily related to a Beauty acquisition.
Financing Cash Flow
Net financing activities consumed $12.1 billion of cash in 2023, mainly due to dividends to shareholders and treasury stock
purchases, partially offset by a net debt increase and the impact of stock options and other.
Dividend Payments. Our first discretionary use of cash is dividend payments. Dividends per common share increased 4% to
$3.6806 per share in 2023. Total dividend payments to common and preferred shareholders were $9.0 billion in 2023. In April
2023, the Board of Directors declared a 3% increase in our quarterly dividend from $0.9133 to $0.9407 per share on Common
Stock and Series A and B Employee Stock Ownership Plan (ESOP) Convertible Class A Preferred Stock. This is the 67th
consecutive year that our dividend has increased. We have paid a dividend for 133 consecutive years, every year since our
incorporation in 1890.
Long-Term and Short-Term Debt. We maintain debt levels we consider appropriate after evaluating a number of factors,
including cash flow expectations, cash requirements for ongoing operations, investment and financing plans (including
acquisitions and share repurchase activities) and the overall cost of capital. Total debt was $34.6 billion as of June 30, 2023. We
generated $2.9 billion from net debt issuances in short-term debt and long-term debt markets.
Treasury Purchases. Total share repurchases were $7.4 billion in 2023.
Impact of Stock Options and Other. The exercise of stock options and other financing activities generated $1.3 billion of cash
in 2023.
Liquidity
At June 30, 2023, our current liabilities exceeded current assets by $13.1 billion, largely due to short-term borrowings under our
commercial paper program. We anticipate being able to support our short-term liquidity and operating needs largely through
cash generated from operations. The Company regularly assesses its cash needs and the available sources to fund these needs.
As of June 30, 2023, the Company had $5.1 billion of cash and cash equivalents related to foreign subsidiaries, primarily in
various European and Asian countries. We did not have material cash and cash equivalents related to any country subject to
exchange controls that significantly restrict our ability to access or repatriate the funds. Under current law, we do not expect
restrictions or taxes on repatriation of cash held outside of the U.S. to have a material effect on our overall liquidity, financial
condition or the results of operations for the foreseeable future.
We utilize short- and long-term debt to fund discretionary items, such as acquisitions and share repurchases. We have strong
short- and long-term debt ratings, which 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 funding to meet short-term financing requirements.
On June 30, 2023, our short-term credit ratings were P-1 (Moody's) and A-1+ (Standard & Poor's), while our long-term credit
ratings were Aa3 (Moody's) and AA- (Standard & Poor's), all with a stable outlook.
We maintain bank credit facilities to support our ongoing commercial paper program. The current facility is an $8.0 billion
facility split between a $3.2 billion five-year facility and a $4.8 billion 364-day facility, which expire in November 2027 and

The Procter & Gamble Company 25November 2023, respectively. Both facilities can be extended for certain periods of time as specified in the terms of the credit
agreement. These facilities are currently undrawn and we anticipate that they will remain undrawn. These credit facilities do not
have cross-default or ratings triggers, nor do they have material adverse events clauses, except at the time of signing. In addition
to these credit facilities, we have an automatically effective registration statement on Form S-3 filed with the SEC that is
available for registered offerings of short- or long-term debt securities. For additional details on debt, see Note 10 to the
Consolidated Financial Statements.
Guarantees and Other Off-Balance Sheet Arrangements
We do not have guarantees or other off-balance sheet financing arrangements, including variable interest entities, which we
believe could have a material impact on our financial condition or liquidity.
Contractual Commitments
The following table provides information on the amount and payable date of our contractual commitments as of June 30, 2023.

($ millions)
RECORDED LIABILITIES
Total debt
Leases
U.S. Tax Act transitional charge (1)
OTHER
Interest payments relating to long-term debt
Minimum pension funding (2)
Purchase obligations (3)

Total

Less Than 1 Year

1-3 Years

3-5 Years

After 5 Years

35,248 $
911
1,575

10,316 $
222
421

5,328 $
322
1,154

5,899 $
171
—

13,705
196
—

5,727
591
2,989

713
192
1,169

1,245
399
976

946
—
482

2,823
—
362

TOTAL CONTRACTUAL COMMITMENTS

47,041 $

13,033 $

9,424 $

7,498 $

17,086

(1) Represents the U.S. federal tax liability associated with the repatriation provisions of the U.S. Tax Act.
(2) Represents future pension payments to comply with local funding requirements. These future pension payments assume the Company
continues to meet its future statutory funding requirements. Considering the current economic environment in which the Company
operates, the Company believes its cash flows are adequate to meet the future statutory funding requirements. The projected payments
beyond fiscal year 2026 are not currently determinable.

(3) Primarily reflects future contractual payments under various take-or-pay arrangements entered into as part of the normal course of
business. Commitments made under take-or-pay obligations represent minimum commitments with suppliers and are in line with
expected usage. This includes service contracts for information technology, human resources management and facilities management
activities that have been outsourced. While the amounts listed represent contractual obligations, we do not believe it is likely that the full
contractual amount would be paid if the underlying contracts were canceled prior to maturity. In such cases, we generally are able to
negotiate new contracts or cancellation penalties, resulting in a reduced payment. The amounts do not include other contractual purchase
obligations that are not take-or-pay arrangements. Such contractual purchase obligations are primarily purchase orders at fair value that
are part of normal operations and are reflected in historical operating cash flow trends. We do not believe such purchase obligations will
adversely affect our liquidity position.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES
In preparing our financial statements in accordance with U.S. GAAP, there are certain accounting policies that may require a
choice between acceptable accounting methods or may require substantial judgment or estimation in their application. These
include revenue recognition, income taxes, certain employee benefits and goodwill and intangible assets. We believe these
accounting policies, and others set forth in Note 1 to the Consolidated Financial Statements, should be reviewed as they are
integral to understanding the results of operations and financial condition of the Company.
The Company has discussed the selection of critical accounting policies and the effect of estimates with the Audit Committee of
the Company's Board of Directors.
Revenue Recognition
Our revenue is primarily generated from the sale of finished product to customers. Those sales predominantly contain a single
performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer, which
can be on the date of shipment or the date of receipt by the customer. Trade promotions, consisting primarily of customer
pricing allowances, in-store merchandising funds, advertising and other promotional activities and consumer coupons, are
offered through various programs to customers and consumers. Sales are recorded net of trade promotion spending, which is
recognized as incurred at the time of the sale. Amounts accrued for trade promotions at the end of a period require estimation,
based on contractual terms, sales volumes and historical utilization and redemption rates. The actual amounts paid may be
different from such estimates. These differences, which have historically not been significant, are recognized as a change in
management estimate in a subsequent period.
Income Taxes
Our annual tax rate is determined based on our income, statutory tax rates and the tax impacts of items treated differently for tax
purposes than for financial reporting purposes. Also inherent in determining our annual tax rate are judgements and

26 The Procter & Gamble Company

assumptions regarding the recoverability of certain deferred tax balances, primarily net operating loss and other carryforwards,
and our ability to uphold certain tax positions.
Realization of net operating losses and other carryforwards is dependent upon generating sufficient taxable income in the
appropriate jurisdiction prior to the expiration of the carryforward periods, which involves business plans, planning
opportunities and expectations about future outcomes. Although realization is not assured, management believes it is more
likely than not that our deferred tax assets, net of valuation allowances, will be realized.
We operate in multiple jurisdictions with complex tax policy and regulatory environments. In certain of these jurisdictions, we
may take tax positions that management believes are supportable but are potentially subject to successful challenge by the
applicable taxing authority. These interpretational differences with the respective governmental taxing authorities can be
impacted by the local economic and fiscal environment.
A core operating principle is that our tax structure is based on our business operating model, such that profits are earned in line
with the business substance and functions of the various legal entities in the jurisdictions where those functions are performed.
However, because of the complexity of transfer pricing concepts, we may have income tax uncertainty related to the
determination of intercompany transfer prices for our various cross-border transactions. We have obtained and continue to
prioritize the strategy of seeking advance rulings with tax authorities to reduce this uncertainty. We estimate that our current
portfolio of advance rulings reduces this uncertainty with respect to over 70% of our global earnings. We evaluate our tax
positions and establish liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. We
review these tax uncertainties considering changing facts and circumstances, such as the progress of tax audits, and adjust them
accordingly. We have several audits in process in various jurisdictions. Although the resolution of these tax positions is
uncertain, based on currently available information, we believe that the ultimate outcomes will not have a material adverse
effect on our financial position, results of operations or cash flows.
Because there are several estimates and assumptions inherent in calculating the various components of our tax provision, certain
future events such as changes in tax legislation, geographic mix of earnings, completion of tax audits or earnings repatriation
plans could have an impact on those estimates and our effective tax rate. See Note 5 to the Consolidated Financial Statements
for additional details on the Company's income taxes.
Employee Benefits
We sponsor various postretirement benefits throughout the world. These include pension plans, both defined contribution plans
and defined benefit plans, and other postretirement benefit (OPRB) plans consisting primarily of health care and life insurance
for retirees. For accounting purposes, the defined benefit pension and OPRB plans require assumptions to estimate the net
projected and accumulated benefit obligations, including the following variables: discount rate; expected salary increases;
certain employee-related factors, such as turnover, retirement age and mortality; expected return on assets; and health care cost
trend rates. These and other assumptions affect the annual expense and net obligations recognized for the underlying plans. Our
assumptions reflect our historical experiences and management's best judgment regarding future expectations. As permitted by
U.S. GAAP, the net amount by which actual results differ from our assumptions is deferred. If this net deferred amount exceeds
10% of the greater of plan assets or liabilities, a portion of the deferred amount is included in expense for the following year.
The cost or benefit of plan changes, such as increasing or decreasing benefits for prior employee service (prior service cost), is
deferred and included in expense on a straight-line basis over the average remaining service period of the employees expected
to receive benefits.
The expected return on plan assets assumption impacts our defined benefit expense since many of our defined benefit pension
plans and our primary OPRB plan are partially funded. The process for setting the expected rates of return is described in Note
8 to the Consolidated Financial Statements. For 2023, the average return on assets assumptions for pension plan assets and
OPRB assets was 5.9% and 8.4%, respectively. A change in the rate of return of 100 basis points for both pension and OPRB
assets would impact annual after-tax benefit/expense by approximately $135 million.
Since pension and OPRB liabilities are measured on a discounted basis, the discount rate impacts our plan obligations and
expenses. Discount rates used for our U.S. defined benefit pension and OPRB plans are based on a yield curve constructed from
a portfolio of high-quality bonds for which the timing and amount of cash outflows approximate the estimated payouts of the
plan. For our international plans, the discount rates are set by benchmarking against investment grade corporate bonds rated AA
or better. The average discount rate on the defined benefit pension plans of 4.2% represents a weighted average of local rates in
countries where such plans exist. A 100 basis-point change in the discount rate would impact annual after-tax benefit expense
by approximately $130 million. The average discount rate on the OPRB plan of 5.6% reflects the higher interest rates generally
applicable in the U.S., which is where most of the plan participants receive benefits. A 100 basis-point change in the discount
rate would impact annual after-tax OPRB expense by approximately $30 million. See Note 8 to the Consolidated Financial
Statements for additional details on our defined benefit pension and OPRB plans.
Goodwill and Intangible Assets
Significant judgment is required to estimate the fair value of our goodwill reporting units and intangible assets. Accordingly, we
typically obtain the assistance of third-party valuation specialists for significant goodwill reporting units and intangible assets.
Determining the useful life of an intangible asset also requires judgment. Certain brand intangible assets are expected to have
indefinite lives based on their history and our plans to continue to support and build the acquired brands. Other acquired

The Procter & Gamble Company 27intangible assets (e.g., certain brands, customer relationships, patents and technologies) are expected to have determinable
useful lives. Our assessment as to brands that have an indefinite life and those that have a determinable life is based on a
number of factors including competitive environment, market share, brand history, underlying product life cycles, operating
plans and the macroeconomic environment of the countries in which the brands are sold. Determinable-lived intangible assets
are amortized to expense over their estimated lives. An impairment assessment for determinable-lived intangibles is only
required when an event or change in circumstances indicates that the carrying amount of the asset may not be recoverable.
Goodwill and indefinite-lived intangible assets are not amortized but are tested at least annually for impairment. We use the
income method to estimate the fair value of these assets, which is based on forecasts of the 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.
Most of our goodwill reporting units have fair value cushions that significantly exceed their underlying carrying values. In
connection with the Grooming operating segment integration as described further in Note 2, we concluded that the Shave Care
and Appliances categories now operate as one reporting unit for goodwill impairment testing. Based on our annual impairment
testing during the three months ended December 31, 2022, our Grooming reporting unit goodwill has a fair value cushion of
over 30%. As of June 30, 2023, the carrying value of the Grooming reporting unit goodwill was $12.7 billion.
Most of our indefinite-lived intangible assets have fair value cushions that significantly exceed their underlying carrying value.
Based on our annual impairment testing during the three months ended December 31, 2022, the Gillette indefinite-lived
intangible asset's fair value exceeded its carrying value by approximately 5%. As of June 30, 2023, the carrying value of the
Gillette indefinite-lived intangible asset was $14.1 billion. While we have concluded that no triggering event has occurred
during the fiscal year ended June 30, 2023, the Gillette indefinite-lived intangible asset 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 and trigger a future impairment charge.
Further reduction of the Gillette business activities in Russia could reduce the estimated fair value by up to 5%.
The most significant assumptions utilized in the determination of the estimated fair value of the Gillette indefinite-lived
intangible asset are the net sales 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 Gillette products, which may
be caused by, among other things: changes in the use and frequency of grooming products, 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 rates represent the expected rate at
which the Gillette brand is expected to grow beyond the shorter-term business planning period. The residual growth rates
utilized in our fair value estimates are consistent with the brand operating plans and approximates expected long-term category
market growth rates. The residual growth rates depend 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 rates 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 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.
The royalty rates are 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.
We performed a sensitivity analysis for the Gillette indefinite-lived intangible asset as part of our annual impairment testing
during the three months ended December 31, 2022, utilizing reasonably possible changes in the assumptions for the discount
rate, the short-term and residual growth rates and the royalty 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 and residual growth rates, or a 50 basis-point decrease in our royalty
rates, which may result in an impairment of the Gillette indefinite-lived intangible asset.

Gillette indefinite-lived intangible asset

(6)%

(4)%

See Note 4 to the Consolidated Financial Statements for additional discussion on goodwill and intangible assets.

Approximate Percent Change in Estimated Fair Value
-25 bps
Growth Rate

+25 bps
Discount Rate

-50 bps
Royalty Rate

28 The Procter & Gamble CompanyNew Accounting Pronouncements
Refer to Note 1 to the Consolidated Financial Statements for recently adopted accounting pronouncements and recently issued
accounting pronouncements not yet adopted as of June 30, 2023.
OTHER INFORMATION
Hedging and Derivative Financial Instruments
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. We evaluate exposures on a centralized basis to take advantage of natural
exposure correlation and netting. We leverage the Company's diversified portfolio of exposures as a natural hedge and prioritize
operational hedging activities over financial market instruments. To the extent we choose to further manage volatility within
our financing operations, as discussed below, we enter into various financial transactions which we account for using the
applicable accounting guidance for derivative instruments and hedging activities. These financial transactions are governed by
our policies covering acceptable counterparty exposure, instrument types and other hedging practices. See Note 9 to the
Consolidated Financial Statements for a discussion of our accounting policies for derivative instruments.
Derivative positions are monitored using techniques including market valuation, sensitivity analysis and value-at-risk modeling.
The tests for interest rate, currency rate and commodity derivative positions discussed below are based on the RiskManager™
value-at-risk model using a one-year horizon and a 95% confidence level. The model incorporates the impact of correlation (the
degree to which exposures move together over time) and diversification (from holding multiple currency, commodity and
interest rate instruments) and assumes that financial returns are normally distributed. Estimates of volatility and correlations of
market factors are drawn from the RiskMetrics™ dataset as of June 30, 2023. In cases where data is unavailable in
RiskMetrics™, a reasonable proxy is included.
Our market risk exposures relative to interest rates, currency rates and commodity prices, as discussed below, have not changed
materially versus the previous reporting period. In addition, we are not aware of any facts or circumstances that would
significantly impact such exposures in the near term.
Interest Rate Exposure on Financial Instruments. Interest rate swaps are used to manage exposures to interest rates on
underlying debt obligations. Certain interest rate swaps denominated in foreign currencies are designated to hedge exposures to
currency exchange rate movements on our investments in foreign operations. These currency interest rate swaps are designated
as hedges of the Company's foreign net investments.
Based on our interest rate exposure as of and during the fiscal year ended June 30, 2023, including derivative and other
instruments sensitive to interest rates, we believe a near-term change in interest rates, at a 95% confidence level based on
historical interest rate movements, would not materially affect our financial statements.
Currency Rate Exposure on Financial Instruments. Because we manufacture and sell products and finance operations in a
number of countries throughout the world, we are exposed to the impact on revenue and expenses of movements in currency
exchange rates. Corporate policy prescribes the range of allowable hedging activity. To manage the exchange rate risk
associated with the financing of our operations, we primarily use forward contracts and currency swaps with maturities of less
than 18 months.
Based on our currency rate exposure on derivative and other instruments as of and during the fiscal year ended June 30, 2023,
we believe, at a 95% confidence level based on historical currency rate movements, the impact on such instruments of a near-
term change in currency rates would not materially affect our financial statements.
Commodity Price Exposure on Financial Instruments. We use raw materials that are subject to price volatility caused by
weather, supply conditions, political and economic variables and other unpredictable factors. We may use futures, options and
swap contracts to manage the volatility related to the above exposures. During the fiscal years ended June 30, 2023 and 2022,
we did not have any financial commodity hedging activity.
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. We believe that these measures provide useful perspective on
underlying business trends (i.e., trends excluding non-recurring or unusual items) and results and provide a supplemental
measure of year-on-year results. The non-GAAP measures described below are used by management in making operating
decisions, allocating financial resources and for business strategy purposes. These measures may be useful to investors, as they
provide supplemental information about business performance and provide investors a view of our business results through the
eyes of management. These measures are also used to evaluate senior management and are a factor in determining their at-risk
compensation. These non-GAAP measures are not intended to be considered by the user in place of the related GAAP measures
but rather as supplemental information to our business results. These non-GAAP measures may not be the same as similar
measures used by other companies due to possible differences in method and in the items or events being adjusted. These
measures include:
Organic Sales Growth. Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions,
divestitures and foreign exchange from year-over-year comparisons. We believe this measure provides investors with a

The Procter & Gamble Company 29supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. This measure is used in
assessing the achievement of management goals for at-risk compensation.
The following tables provide a numerical reconciliation of organic sales growth to reported net sales growth:

Fiscal year ended June 30, 2023

Beauty
Grooming

Health Care

Fabric & Home Care

Baby, Feminine & Family Care

TOTAL COMPANY

Net Sales Growth

Foreign Exchange
Impact

Acquisition &
Divestiture
Impact/Other (1)

Organic Sales
Growth

2 %
(3) %

4 %

3 %

2 %

5 %
7 %

4 %

5 %

4 %

5 %

(1) %
1 %

— %

6 %
5 %

8 %

6 %

7 %

(1) Acquisition & 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. Adjusted free cash flow is defined as operating cash flow less capital spending and excluding
payments for the transitional tax resulting from the U.S. Tax Act. Adjusted free cash flow represents the cash that the Company
is able to generate after taking into account planned maintenance and asset expansion. We view 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.
The following table provides a numerical reconciliation of adjusted free cash flow ($ millions):

2023
2022

Operating Cash Flow

Capital Spending

Adjustments to
Operating Cash Flow(1)

Adjusted Free
Cash Flow

$
$

16,848 $
16,723 $

(3,062) $
(3,156) $

225 $
225 $

14,011
13,792

(1) Adjustments to Operating Cash Flow include transitional tax payments resulting from the U.S. Tax Act of $225 in 2023 and 2022.
Adjusted Free Cash Flow Productivity. Adjusted free cash flow productivity is defined as the ratio of adjusted free cash flow
to net earnings. We view adjusted free cash flow productivity as a useful measure to help investors understand P&G’s ability to
generate cash. Adjusted free cash flow productivity is used by management in making operating decisions, in allocating
financial resources and for budget planning purposes. This measure is used in assessing the achievement of management goals
for at-risk compensation.
The following table provides a numerical reconciliation of adjusted free cash flow productivity ($ millions):

2023

2022

Adjusted Free
Cash Flow

Net Earnings

Adjusted Free
Cash Flow Productivity

14,011 $

13,792 $

14,738

14,793

95 %

93 %

Core EPS. Core EPS is a measure of the Company's diluted EPS excluding items that are not judged by management to be part
of the Company's sustainable results or trends. Management views this non-GAAP measure as a useful supplemental measure
of Company performance over time. This measure is also used in assessing the achievement of management goals for at-risk
compensation. For the fiscal years ended June 30, 2023 and 2022, there were no adjustments to or reconciling items for diluted
EPS.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
The information required by this item is incorporated by reference to the section entitled Other Information in the MD&A and
Note 9 to the Consolidated Financial Statements.

30 The Procter & Gamble Company

Item 8. Financial Statements and Supplementary Data.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal control over financial reporting of The Procter &
Gamble Company (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Our internal control
over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the
United States of America.
Strong internal controls is an objective that is reinforced through our Worldwide Business Conduct Manual, which sets forth our
commitment to conduct business with integrity, and within both the letter and the spirit of the law. Our people are deeply
committed to our Purpose, Values and Principles, which unite us in doing what’s right. Our system of internal controls includes
written policies and procedures, segregation of duties and the careful selection and development of employees. Additional key
elements of our internal control structure include our Global Leadership Council, which is actively involved in oversight of the
business strategies, initiatives, results and controls, our Disclosure Committee, which is responsible for evaluating disclosure
implications of significant business activities and events, our Board of Directors, which provides strong and effective corporate
governance, and our Audit Committee, which reviews critical accounting policies and estimates, financial reporting and internal
control matters.
Global Internal Audit performs audits of internal controls over financial reporting as well as broader financial, operational and
compliance audits around the world, provides training and continually improves our internal control processes. The Company’s
internal control over financial reporting also includes a robust Control Self-Assessment Program that is conducted annually on
critical financial reporting areas of the Company. Management takes the appropriate action to correct any identified control
deficiencies.
Because of its inherent limitations, any system of internal control over financial reporting, no matter how well designed, may
not prevent or detect misstatements due to the possibility that a control can be circumvented or overridden or that misstatements
due to error or fraud may occur that are not detected. Also, because of changes in conditions, internal control effectiveness may
vary over time.
Management assessed the effectiveness of the Company's internal control over financial reporting as of June 30, 2023, using
criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO) and concluded that the Company maintained effective internal control over financial
reporting as of June 30, 2023, based on these criteria.
Deloitte & Touche LLP, an independent registered public accounting firm, has audited the effectiveness of the Company's internal
control over financial reporting as of June 30, 2023, as stated in their report which is included herein.

/s/ Jon R. Moeller

(Jon R. Moeller)

Chairman of the Board, President and Chief Executive Officer

/s/ Andre Schulten

(Andre Schulten)

Chief Financial Officer

August 4, 2023

The Procter & Gamble Company 31REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of The Procter & Gamble Company
Opinion on the Financial Statements
We have audited the accompanying Consolidated Balance Sheets of The Procter & Gamble Company and subsidiaries (the
"Company") as of June 30, 2023 and 2022, the related Consolidated Statements of Earnings, Comprehensive Income,
Shareholders’ Equity and Cash Flows, for each of the three years in the period ended June 30, 2023, and the related notes
(collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of June 30, 2023 and 2022, and the results of its operations and its cash flows
for each of the three years in the period ended June 30, 2023, in conformity with accounting principles generally accepted in the
United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of June 30, 2023, based on criteria established in Internal
Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
and our report dated August 4, 2023, expressed an unqualified opinion on the Company's internal control over financial
reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are
material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Intangible Assets — Gillette Indefinite Lived Intangible Asset — Refer to Notes 1 and 4 to the financial statements
Critical Audit Matter Description
The Company’s evaluation of the Gillette indefinite lived intangible asset (the "Gillette Brand") for impairment involves the
comparison of the fair value to its carrying value. The Company estimates fair value using the income method, which is based
on the present value of estimated future cash flows attributable to the respective asset. This requires management to make
significant estimates and assumptions related to forecasts of future net sales and earnings, including growth rates beyond a 10-
year time period, royalty rates, and discount rate. Changes in the assumptions could have a significant impact on either the fair
value, the amount of any impairment charge, or both. The Company performed their annual impairment assessment of the
Gillette Brand as of December 31, 2022. Because the estimated fair value exceeds the carrying value, no impairment was
recorded. As of June 30, 2023, the carrying value of the Gillette Brand was $14.1 billion.
We identified the Company’s impairment evaluation of the Gillette Brand as a critical audit matter because of the significant
judgments made by management to estimate the fair value of the indefinite lived intangible asset. A high degree of auditor
judgment and an increased extent of effort was required when performing audit procedures to evaluate the reasonableness of
management’s estimates and assumptions related to the forecasts of future net sales and earnings as well as the selection of
royalty rates and discount rate, including the need to involve our fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to forecasts of future net sales and earnings and the selection of the royalty rates and discount rate
for the Gillette Brand included the following, among others:
• We tested the effectiveness of controls over the Gillette Brand, including those over the determination of fair value, such as
controls related to management’s development of forecasts of future net sales and earnings, and the selection of royalty
rates and discount rate.

• We evaluated management’s ability to accurately forecast net sales and earnings by comparing actual results to

management’s historical forecasts.

32 The Procter & Gamble Company• We evaluated the reasonableness of management’s forecast of net sales and earnings by comparing the forecasts to:

•
•
•
•

Historical net sales and earnings.
Underlying analysis detailing business strategies and growth plans.
Internal communications to management and the Board of Directors.
Forecasted information included in analyst and industry reports for the Company and certain of its peer companies.
• With the assistance of our fair value specialists, we evaluated the net sales and earnings growth rates, royalty rates, and

discount rate by:
•

Testing the source information underlying the determination of net sales and earnings growth rates, royalty rates, and
discount rate and the mathematical accuracy of the calculations.
Developing a range of independent estimates for the discount rate and comparing the discount rate selected by
management to that range.

•

/s/ Deloitte & Touche LLP

Cincinnati, Ohio

August 4, 2023

We have served as the Company’s auditor since 1890.

The Procter & Gamble Company 33REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of The Procter & Gamble Company
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of The Procter & Gamble Company and subsidiaries (the
"Company") as of June 30, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained,
in all material respects, effective internal control over financial reporting as of June 30, 2023, based on criteria established in
Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended June 30, 2023, of the Company and our report
dated August 4, 2023, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report
on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Cincinnati, Ohio

August 4, 2023

34 The Procter & Gamble CompanyConsolidated Statements of Earnings

Amounts in millions except per share amounts; fiscal years ended June 30
NET SALES

Cost of products sold

Selling, general and administrative expense

OPERATING INCOME

Interest expense

Interest income

Other non-operating income, net

EARNINGS BEFORE INCOME TAXES

Income taxes

NET EARNINGS

Less: Net earnings attributable to noncontrolling interests

2023

2022

2021

82,006 $
42,760

80,187 $
42,157

21,112

18,134
(756)

307

668

18,353
3,615

14,738

20,217

17,813
(439)

570

17,995
3,202

14,793

76,118
37,108

21,024

17,986
(502)

17,615
3,263

14,352

NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE

14,653 $

14,742 $

14,306

NET EARNINGS PER COMMON SHARE (1)

Basic

Diluted

6.07 $

5.90 $

6.00 $

5.81 $

5.69

5.50

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

Gamble.

Consolidated Statements of Comprehensive Income

Amounts in millions; fiscal years ended June 30
NET EARNINGS

OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX

2023

2022

2021

14,738 $

14,793 $

14,352

Foreign currency translation (net of tax (benefit)/expense of $(197), $515 and
$(266), respectively)

(71)

(1,450)

1,023

Unrealized gains/(losses) on investment securities
(net of tax (benefit)/expense of $(2), $1 and $5, respectively)
Unrealized gains on defined benefit postretirement plans
(net of tax expense of $9, $1,022 and $445, respectively)

TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX

TOTAL COMPREHENSIVE INCOME

Less: Comprehensive income attributable to noncontrolling interests

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO
PROCTER & GAMBLE

(7)

(38)

14,700
78

2,992

1,547

16,340
43

1,386

2,425

16,777
50

14,622 $

16,297 $

16,727

The Procter & Gamble Company 35See accompanying Notes to Consolidated Financial Statements.Consolidated Balance Sheets

Amounts in millions except stated values; as of June 30
Assets
CURRENT ASSETS

Cash and cash equivalents

Accounts receivable

INVENTORIES

Materials and supplies

Work in process

Finished goods

Total inventories
Prepaid expenses and other current assets

TOTAL CURRENT ASSETS

PROPERTY, PLANT AND EQUIPMENT, NET
GOODWILL

TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET

OTHER NONCURRENT ASSETS

TOTAL ASSETS

Liabilities and Shareholders' Equity

CURRENT LIABILITIES

Accounts payable

Accrued and other liabilities

Debt due within one year

TOTAL CURRENT LIABILITIES

LONG-TERM DEBT
DEFERRED INCOME TAXES

OTHER NONCURRENT LIABILITIES

TOTAL LIABILITIES

SHAREHOLDERS' EQUITY

Convertible Class A preferred stock, stated value $1 per share (600 shares authorized)

Non-Voting Class B preferred stock, stated value $1 per share (200 shares authorized)

Common stock, stated value $1 per share (10,000 shares authorized; shares issued:
2023 - 4,009.2, 2022 - 4,009.2)

Additional paid-in capital

Reserve for ESOP debt retirement

Accumulated other comprehensive loss

Treasury stock (shares held: 2023 - 1,647.1; 2022 - 1,615.4)

Retained earnings

Noncontrolling interest

TOTAL SHAREHOLDERS' EQUITY

2023

2022

8,246 $

5,471

1,863

956

4,254

7,073
1,858

22,648

21,909
40,659

23,783

11,830

7,214

5,143

2,168

856

3,900

6,924
2,372

21,653

21,195
39,700

23,679

10,981

120,829 $

117,208

14,598 $

14,882

10,929

10,229

35,756

24,378
6,478

7,152

73,764

819

—

4,009

66,556

(821)

9,554

8,645

33,081

22,848
6,809

7,616

70,354

843

—

4,009

65,795

(916)

(12,220)

(12,189)

(129,736)

(123,382)

118,170

112,429

288

47,065

265

46,854

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

120,829 $

117,208

36 The Procter & Gamble CompanySee accompanying Notes to Consolidated Financial Statements. Consolidated Statements of Shareholders' Equity

Common Stock

Amount

Preferred
Stock

Additional
Paid-In
Capital

Accumulated
Other
Comprehens
ive
Income/
(Loss)

Reserve
for ESOP
Debt
Retirement

Treasury
Stock

Retained
Earnings

Noncont
rolling
Interest

Total
Sharehol
ders'
Equity

2,479,746 $4,009

$897

$64,194

($1,080)

($16,165) ($105,573) $100,239
14,306

$357 $46,878
14,352

2,421

2,425

Dollars in millions except per
share amounts;
shares in thousands

BALANCE JUNE 30, 2020
Net earnings

Other comprehensive
income/(loss)

Dividends and dividend
equivalents ($3.2419 per
share):
Common

Preferred

Treasury stock purchases

(81,343)

Employee stock plans

Preferred stock conversions

ESOP debt impacts
Noncontrolling interest, net

28,001

3,302

650

(27)

(8,020)

(271)

(11,009)

1,586

120

(8,020)

(271)

(11,009)

2,236

—

194

(131)

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

Other comprehensive
income/(loss)

Dividends and dividend
equivalents ($3.5227 per
share):
Common

Preferred

Treasury stock purchases

(67,088)

Employee stock plans

Preferred stock conversions

28,042

3,217

ESOP debt impacts

Noncontrolling interest, net

(27)

945

(2)

14,742

14,793

1,555

(8)

1,547

(8,514)

(281)

(10,003)

1,571

108

(8,514)

(281)

(10,003)

2,516

—

198

(54)

(56)

BALANCE JUNE 30, 2023

2,393,877 $4,009

$843

$65,795

($916)

($12,189) ($123,382) $112,429

$265 $46,854

Net earnings

Other comprehensive
income/(loss)

Dividends and dividend
equivalents ($3.6806 per
share):
Common

Preferred

Treasury stock purchases

Employee stock plans

(52,021
)
17,424

Preferred stock conversions

2,840

(24)

ESOP debt impacts

Noncontrolling interest, net

758

—

14,653

85 14,738

(31)

(7)

(38)

(8,742)

(282)

(7,353)

978

112

(55)

(8,742)

(282)

(7,353)

1,736

—

207

(55)

BALANCE JUNE 30, 2023 2,362,120 $4,009

$819 $66,556

($821) ($12,220) ($129,736) $118,170

$288 $47,065

The Procter & Gamble Company 37See accompanying Notes to Consolidated Financial Statements.
Consolidated Statements of Cash Flows

Amounts in millions; fiscal years ended June 30
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR
OPERATING ACTIVITIES

2023
$ 7,214

2022
$ 10,288

2021
$ 16,181

Net earnings

Depreciation and amortization

Loss on early extinguishment of debt

Share-based compensation expense

Deferred income taxes

Loss/(gain) on sale of assets

Change in accounts receivable

Change in inventories

Change in accounts payable and accrued and other liabilities

Change in other operating assets and liabilities
Other

TOTAL OPERATING ACTIVITIES
INVESTING ACTIVITIES

Capital expenditures

Proceeds from asset sales

Acquisitions, net of cash acquired

Other investing activity

TOTAL INVESTING ACTIVITIES

FINANCING ACTIVITIES
Dividends to shareholders

14,738

2,714

14,793

2,807

14,352

2,735

—

545

(453)

(40)

(307)

(119)

313

(1,107)
564

—

528

(402)

(85)

(694)

(1,247)

1,429

(635)
229

512

540

(258)

(16)

(342)

(309)

1,391

(369)
135

16,848

16,723

18,371

(3,062)

(3,156)

(2,787)

(765)

281

110

(1,381)

(34)

(55)

(3,500)

(4,424)

(2,834)

(8,999)

(8,770)

(8,263)

Additions to short-term debt with original maturities of more than three months

17,168

10,411

Reductions in short-term debt with original maturities of more than three months

(13,031)

(11,478)

Net additions/(reductions) to other short-term debt

Additions to long-term debt
Reductions in long-term debt (1)
Treasury stock purchases

Impact of stock options and other

TOTAL FINANCING ACTIVITIES

EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS
AND RESTRICTED CASH

CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

7,675

(7,577)

(3,431)

4,417

(3,319)

3,997

917

4,385

(1,878)

(2,343)

(4,987)

(7,353)

(10,003)

(11,009)

1,269

2,005

1,644

(12,146)

(14,876)

(21,531)

(170)

1,032

(497)

101

(3,074)

(5,893)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR

$ 8,246

$ 7,214

$ 10,288

SUPPLEMENTAL DISCLOSURE

Cash payments for interest

Cash payments for income taxes

(1)

Includes early extinguishment of debt costs of $512 in 2021.

721

451

531

4,278

3,818

3,822

38 The Procter & Gamble CompanySee accompanying Notes to Consolidated Financial Statements. Notes to Consolidated Financial Statements

NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
The Procter & Gamble Company's (the "Company," "Procter & Gamble," "we" or "us") business is focused on providing
branded consumer packaged goods of superior quality and value. Our products are sold in 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, specialty beauty stores (including airport
duty-free stores), high-frequency stores, pharmacies, electronics stores and professional channels. We also sell direct to
consumers. We have on-the-ground operations in approximately 70 countries.
Basis of Presentation
The Consolidated Financial Statements include the Company and its controlled subsidiaries. Intercompany transactions are
eliminated.
Because of a lack of control over Venezuelan subsidiaries caused by a number of currency and other operating controls and
restrictions, our Venezuelan subsidiaries are not consolidated for any year presented. We account for those subsidiaries at cost,
less impairments, plus or minus observable price changes.
Beginning in fiscal year 2022, 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 fiscal year
ended June 30, 2021, 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.
Use of Estimates
Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
(U.S. GAAP) requires management to make estimates and assumptions that affect the amounts reported in the Consolidated
Financial Statements and accompanying disclosures. These estimates are based on management's best knowledge of current
events and actions the Company may undertake in the future. Estimates are used in accounting for, among other items,
consumer and trade promotion accruals, restructuring reserves, pensions, postretirement benefits, stock options, valuation of
acquired intangible assets, useful lives for depreciation and amortization of long-lived assets, future cash flows associated with
impairment testing for goodwill, indefinite-lived intangible assets and other long-lived assets, deferred tax assets and liabilities,
uncertain income tax positions and contingencies. Actual results may ultimately differ from estimates, although management
does not generally believe such differences would materially affect the financial statements in any individual year. However,
regarding ongoing impairment testing of goodwill and indefinite-lived intangible assets, significant deterioration in future cash
flow projections or other assumptions used in estimating fair values versus those anticipated at the time of the initial valuations,
could result in impairment charges that materially affect the financial statements in a given year.
Revenue Recognition
Our revenue is primarily generated from the sale of finished product to customers. Those sales predominantly contain a single
performance obligation and revenue is recognized at a single point in time when ownership, risks and rewards transfer, which
can be on the date of shipment or the date of receipt by the customer. A provision for payment discounts and product return
allowances is recorded as a reduction of sales in the same period the revenue is recognized. The revenue recorded is presented
net of sales and other taxes we collect on behalf of governmental authorities. The revenue includes shipping and handling costs,
which generally are included in the list price to the customer.
Trade promotions, consisting primarily of customer pricing allowances, merchandising funds and consumer coupons, are
offered through various programs to customers and consumers. Sales are recorded net of trade promotion spending, which is
recognized as incurred at the time of the sale. Most of these arrangements have terms of approximately one year. Accruals for
expected payouts under these programs are included as accrued marketing and promotion in the Accrued and other liabilities
line item in the Consolidated Balance Sheets.
Cost of Products Sold
Cost of products sold is primarily comprised of direct materials and supplies consumed in the manufacturing of product, as well
as manufacturing labor, depreciation expense and direct overhead expenses necessary to acquire and convert the purchased
materials and supplies into finished products. Cost of products sold also includes the cost to distribute products to customers,
inbound freight costs, internal transfer costs, warehousing costs and other shipping and handling activity.
Selling, General and Administrative Expense
Selling, general and administrative expense (SG&A) is primarily comprised of marketing expenses, selling expenses, research
and development costs, administrative and other indirect overhead costs, depreciation and amortization expense on non-
manufacturing assets and other miscellaneous operating items. Research and development costs are charged to expense as
incurred and were $2.0 billion in 2023 and 2022 and $1.9 billion in 2021. Advertising costs, charged to expense as incurred,
include television, print, radio, digital and in-store advertising expenses and were $8.0 billion in 2023, $7.9 billion in 2022 and

The Procter & Gamble Company 39Amounts in millions of dollars except per share amounts or as otherwise specified.$8.2 billion in 2021. Non-advertising related components of the Company's total marketing spending reported in SG&A include
costs associated with consumer promotions, product sampling and sales aids.
Other Non-Operating Income, Net
Other non-operating income, net primarily includes divestiture gains, net non-service impacts related to postretirement benefit
plans, investment income and other non-operating items.
Currency Translation
Financial statements of operating subsidiaries outside the U.S. generally are measured using the local currency as the functional
currency. Adjustments to translate those statements into U.S. dollars are recorded in Other comprehensive income (OCI). For
subsidiaries operating in highly inflationary economies, the U.S. dollar is the functional currency. Re-measurement adjustments
for financial statements in highly inflationary economies and other transactional exchange gains and losses are reflected in
earnings.
Cash Flow Presentation
The Consolidated Statements of Cash Flows are prepared using the indirect method, which reconciles net earnings to cash flows
from operating activities. Cash flows from foreign currency transactions and operations are translated at monthly exchange rates
for each period. Cash flows from hedging activities are included in the same category as the items being hedged. Cash flows
from derivative instruments designated as net investment hedges are classified as investing activities. Realized gains and losses
from non-qualifying derivative instruments used to hedge currency exposures resulting from intercompany financing
transactions are classified as financing activities. Cash flows from other derivative instruments used to manage interest rates,
commodity or other currency exposures are classified as operating activities. Cash payments related to income taxes are
classified as operating activities.
Investments
The Company holds minor equity investments in certain companies over which we exert significant influence, but do not
control the financial and operating decisions. These are accounted for as equity method investments. Other equity investments
that are not controlled, and over which we do not have the ability to exercise significant influence, and for which there is a
readily determinable market value, are recorded at fair value, with gains and losses recorded through net earnings. Equity
investments without readily determinable fair values are measured at cost, less impairments, plus or minus observable price
changes. Equity investments are included as Other noncurrent assets in the Consolidated Balance Sheets.
The Company also holds highly liquid investments, primarily money market funds and time deposits. Such investments are
considered cash equivalents and are included within Cash and cash equivalents in the Consolidated Balance Sheets.
Inventory Valuation
Inventories are valued at the lower of cost or net realizable value. Product-related inventories are maintained on the first-in,
first-out method. The cost of spare part inventories is maintained using the average-cost method.
Property, Plant and Equipment
Property, plant and equipment is recorded at cost reduced by accumulated depreciation. Depreciation expense is recognized
over the assets' estimated useful lives using the straight-line method. Machinery and equipment includes office furniture and
fixtures (15-year life), computer equipment and capitalized software (3- to 5-year lives) and manufacturing equipment (3- to 20-
year lives). Buildings are depreciated over an estimated useful life of 40 years. Estimated useful lives are periodically reviewed
and, when appropriate, changes are made prospectively. When certain events or changes in operating conditions occur, asset
lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts.
Goodwill and Other Intangible Assets
Goodwill and indefinite-lived intangible assets are not amortized but are evaluated for impairment annually or more often if
indicators of a potential impairment are present. Our annual impairment testing of goodwill is performed separately from our
impairment testing of indefinite-lived intangible assets.
We have acquired brands that have been determined to have indefinite lives. We evaluate several factors to determine whether
an indefinite life is appropriate, including the competitive environment, market share, brand history, underlying product life
cycles, operating plans and the macroeconomic environment of the countries in which the brands are sold. In addition, when
certain events or changes in operating conditions occur, an additional impairment assessment is performed and indefinite-lived
assets may be adjusted to a determinable life.
The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed,
either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangible assets
with contractual terms are generally amortized over their respective legal or contractual lives. Customer relationships, brands
and other non-contractual intangible assets with determinable lives are amortized over periods generally ranging from 5 to 30
years. When certain events or changes in operating conditions occur, an impairment assessment is performed and remaining
lives of intangible assets with determinable lives may be adjusted.
For additional details on goodwill and intangible assets see Note 4.

40 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.Fair Values of Financial Instruments
Certain financial instruments are required to be recorded at fair value. Changes in assumptions or estimation methods could
affect the fair value estimates; however, we do not believe any such changes would have a material impact on our financial
condition, results of operations or cash flows. Other financial instruments, including cash equivalents, certain investments and
certain short-term debt, are recorded at cost, which approximates fair value. The fair values of long-term debt and financial
instruments are disclosed in Note 9.
New Accounting Pronouncements and Policies
In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-04,
"Liabilities - Supplier Finance Programs (Subtopic 405-50): 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 is effective for fiscal years beginning after December 15, 2023. We will adopt
the guidance effective July 1, 2023. Additional disclosures will be included in the Notes to the Consolidated Financial
Statements.
No other new accounting pronouncements issued or effective during the fiscal year or in future years had, or are expected to
have, a material impact on our Consolidated Financial Statements.

NOTE 2
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: Grooming (Appliances, Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other
Grooming);
Health Care: Oral Care (Toothbrushes, Toothpaste, Other Oral Care); Personal Health Care (Gastrointestinal, Pain Relief,
Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, Other Personal Health Care);
Fabric & Home Care: Fabric Care (Fabric Enhancers, Laundry Additives, Laundry Detergents); Home Care (Air Care,
Dish Care, P&G Professional, Surface Care); and
Baby, Feminine & Family Care: Baby Care (Baby Wipes, Taped Diapers and Pants); Feminine Care (Adult Incontinence,
Feminine Care); Family Care (Paper Towels, Tissues, Toilet Paper).

•

While none of our reportable segments are highly seasonal, components within certain reportable segments, such as Appliances
(Grooming) and Personal Health Care (Health), are seasonal.
The accounting policies of the segments are generally the same as those described in Note 1. Differences between these policies
and U.S. GAAP primarily reflect income taxes, which are reflected in the segments using applicable blended statutory rates.
Adjustments to arrive at our effective tax rate are included in Corporate. In addition, capital expenditures in the segments are on
an accrual basis consistent with the balance sheet. Adjustments to move from an accrual to cash basis, for purposes of the cash
flow statement, are reflected in Corporate.
Corporate includes certain operating and non-operating activities that are not reflected in the operating results used internally to
measure and evaluate the businesses, as well as items to adjust management reporting principles to U.S. GAAP. Operating
activities in Corporate include the results of incidental businesses managed at the corporate level. Operating elements also
include certain employee benefit costs, the costs of certain restructuring-type activities to maintain a competitive cost structure,
including manufacturing and workforce optimization, asset impairment charges and other general Corporate items. The non-
operating elements in Corporate primarily include interest expense, certain pension and other postretirement benefit costs,
certain acquisition and divestiture gains, interest and investing income and other financing costs.
Total assets for the reportable segments include those assets managed by the reportable segment, primarily inventory, fixed
assets and intangible assets. Other assets, primarily cash, accounts receivable, investment securities and goodwill, are included
in Corporate.

The Procter & Gamble Company 41Amounts in millions of dollars except per share amounts or as 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)

Fiscal years ended June 30
Fabric Care
Home Care

Baby Care

Skin and Personal Care

Hair Care

Family Care
Grooming (2)
Oral Care

Feminine Care

Personal Health Care
Other (2)

TOTAL

2023
23%
12%

10%

—%

100%

2022
23%
12%

10%

2021
22%
12%

10%

100%

(1) % of Net sales by operating segment excludes sales recorded 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 fiscal years ended June 30, 2022 and
2021, Appliances was presented in Other.

Net sales and long-lived assets in the United States and internationally were as follows (in billions):

Fiscal years ended June 30
NET SALES

United States

International

LONG-LIVED ASSETS (1)

United States

International

2023

2022

2021

38.7 $

43.3 $

11.4 $

10.5 $

36.5 $

43.7 $

10.7 $

10.5 $

33.7

42.4

10.1

11.6

(1)

Long-lived assets consists of property, plant and equipment.

No country, other than the United States, exceeds 10% of the Company's consolidated net sales or long-lived assets.
Our largest customer, Walmart Inc. and its affiliates, accounted for consolidated net sales of approximately 15% in 2023, 2022
and 2021. No other customer represents more than 10% of our consolidated net sales

42 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.Global Segment Results

Net Sales

Earnings/(Loss)
Before
Income Taxes

Net Earnings
/(Loss)

Depreciation
and
Amortization

Total
Assets

Capital
Expenditures

BEAUTY

GROOMING

HEALTH CARE

FABRIC & HOME CARE

BABY, FEMININE &
FAMILY CARE

CORPORATE

TOTAL COMPANY

2023 $ 15,008 $
2022

14,740

4,009 $
3,946

3,178 $
3,160

376 $ 6,196 $
348

6,055

2021

2023

2022

2021

2023

2022

2021

2023

2022

2021

2023
2022

2021

2023

2022

2021

14,417

6,419

6,587

6,440

11,226

10,824

9,956

28,371

27,556

26,014

20,217
19,736

18,850

765

744

441

4,018

1,806

1,835

1,728

2,759

2,618

2,398

6,303

5,729

5,986

4,623
4,267

4,723

(1,147)

(400)

(1,238)

3,210

1,461

1,490

1,427

2,125

2,006

1,851

4,828

4,386

4,622

3,545
3,266

3,629

(399)

485

(387)

333

335

361

378

352

376

372

675

672

646

804
826

846

172

224

160

5,587

20,601

20,482

20,668

8,480

7,888

7,976

8,669

8,567

8,334

8,517
8,443

8,666

68,366

65,773

68,076

2023 $ 82,006 $
2022

80,187

18,353 $
17,995

14,738 $
14,793

2,714 $120,829 $
2,807

117,208

2021

76,118

17,615

14,352

2,735

119,307

287
331

386

300

260

291

466

410

364

979

988

1,006

994
932

814

235

(74)

3,062
3,156

2,787

The Procter & Gamble Company 43Amounts in millions of dollars except per share amounts or as otherwise specified.NOTE 3
SUPPLEMENTAL FINANCIAL INFORMATION
The components of property, plant and equipment were as follows:

As of June 30
PROPERTY, PLANT AND EQUIPMENT
Buildings

Machinery and equipment

Land

Construction in progress

TOTAL PROPERTY, PLANT AND EQUIPMENT
Accumulated depreciation

PROPERTY, PLANT AND EQUIPMENT, NET

Selected components of current and noncurrent liabilities were as follows:

As of June 30
ACCRUED AND OTHER LIABILITIES - CURRENT
Marketing and promotion

Compensation expenses

Taxes payable

Derivative liabilities

Leases

Restructuring reserves

Other

TOTAL

OTHER NONCURRENT LIABILITIES
Pension benefits

U.S. Tax Act transitional tax payable

Other retiree benefits

Uncertain tax positions

Long term operating leases

Derivative liabilities

Other

TOTAL

2023

2022

8,277 $

36,521

867

2,980

48,645
(26,736)

8,087

35,098

756

2,756

46,697
(25,502)

21,909 $

21,195

2023

2022

3,894

2,030

828

631

222

174

3,150

10,929

3,116

1,154

690

622

595

445

530

3,878

1,797

587

205

147

2,939

9,554

3,139

1,661

672

752

595

307

490

7,152

7,616

RESTRUCTURING PROGRAM
The Company has historically incurred an ongoing annual level of restructuring-type activities to maintain a competitive cost
structure, including manufacturing and workforce optimization. Before tax costs incurred under ongoing programs have
generally ranged from $250 to $500 annually.
Restructuring costs incurred consist primarily of costs to separate employees, asset-related costs to exit facilities and other
costs. Employee separation costs relate to severance packages that are primarily voluntary and the amounts calculated are based
on salary levels and past service periods. Severance costs related to voluntary separations are generally charged to earnings
when the employee accepts the offer. Asset-related costs consist of both asset write-downs and accelerated depreciation. Asset
write-downs relate to the establishment of a new fair value basis for assets held-for-sale or for disposal. These assets are written
down to the lower of their current carrying basis or amounts expected to be realized upon disposal, less minor disposal costs.
Charges for accelerated depreciation relate to long-lived assets that will be taken out of service prior to the end of their normal
service period. These assets relate primarily to manufacturing consolidations and technology standardizations. The asset-related
charges will not have a significant impact on future depreciation charges. Other restructuring-type charges primarily include
asset removal and termination of contracts related to supply chain and overhead optimization. The Company incurred total
restructuring charges of $329 and $253 for the fiscal years ended June 30, 2023 and 2022. Of the charges incurred for fiscal
year 2023, $160 were recorded in Costs of products sold, $160 in SG&A and $9 in Other non-operating income, net. Of the

44 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.charges incurred in fiscal year 2022, $182 were recorded in Costs of products sold, $67 in SG&A, and $4 in Other non-
operating income, net. The following table presents restructuring activity for the fiscal years ended June 30, 2023 and 2022:

RESERVE JUNE 30, 2021
Cost incurred and charged to expense

Cost paid/settled

RESERVE JUNE 30, 2022
Cost incurred and charged to expense

Cost paid/settled

RESERVE JUNE 30, 2023

Separations

Asset-Related
Costs

Other

Total

176 $
88

(143)

121
175

(141)

— $
87

(87)

—
43

(43)

102 $
78

(154)

26
111

(118)

155 $

— $

19 $

278
253

(384)

147
329

(302)

174

Consistent with our historical policies for ongoing restructuring-type activities, the restructuring charges are funded by and
included within Corporate for management and segment reporting.
However, for information purposes, the following table summarizes the total restructuring costs related to our reportable
segments:

Fiscal years ended June 30
Beauty
Grooming

Health Care

Fabric & Home Care

Baby, Feminine & Family Care
Corporate (1)

Total Company

2023

2022

2021

15 $
17

161

11 $
14

329 $

253 $

13
25

190

330

(1) Corporate includes costs related to allocated overheads, including charges related to our Enterprise Markets, Global Business Services

and Corporate Functions activities.

NOTE 4
GOODWILL AND INTANGIBLE ASSETS
The change in the net carrying amount of goodwill by reportable segment was as follows:

Balance at June 30, 2021 - Net (1)
Acquisitions and divestitures

Translation and other

Balance at June 30, 2022 - Net (1)
Acquisitions and divestitures

Translation and other

Beauty

Grooming Health Care

Fabric &
Home Care

Baby,
Feminine &
Family Care

Total
Company

$ 13,257 $ 13,095 $

781

(742)

13,296
405

187

—

(524)

12,571
—

132

8,046 $
1

1,873 $
—

4,653 $ 40,924
782

—

(458)

7,589
—

129

(65)

1,808
—

(217)

(2,006)

4,436
33

39,700
438

521

Balance at June 30, 2023 - Net (1)

$ 13,888 $ 12,703 $

7,718 $

1,821 $

4,529 $ 40,659

(1) Grooming goodwill balance is net of $7.9 billion accumulated impairment losses.

Goodwill and indefinite-lived intangibles are tested for impairment at least annually by comparing the estimated fair values of
our reporting units and indefinite-lived intangible assets to their respective carrying values. We use the income method to
estimate the fair value of these assets, which is based on forecasts of the expected future cash flows attributable to the
respective assets. Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace
participants and include the amount and timing of future cash flows (including expected growth rates and profitability).
Significant judgement by management is required to estimate the impact of macroeconomic and other factors on future cash
flows, including those related to the Russia-Ukraine War. Estimates utilized in the projected cash flows include consideration of
macroeconomic conditions, overall category growth rates, competitive activities, cost containment and margin expansion,
Company business plans, the underlying product or technology life cycles, economic barriers to entry, a brand's relative market
position and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances may
occur, which could affect the accuracy or validity of the estimates and assumptions.

The Procter & Gamble Company 45Amounts in millions of dollars except per share amounts or as otherwise specified.We believe the estimates and assumptions utilized in our impairment testing are reasonable and are comparable to those that
would be used by other marketplace participants. However, actual events and results could differ substantially from those used
in our valuations. To the extent 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 additional non-cash impairment charges in the future.
Goodwill increased during fiscal 2023 primarily due to an acquisition in the Beauty segment, other minor brand acquisitions in
the Baby, Feminine & Family Care segment and currency translation across all reportable segments.
Goodwill decreased during fiscal 2022 due to currency translation across all reportable segments, partially offset by three
acquisitions (Farmacy Beauty, Ouai and TULA) in the Beauty reportable segment.
Identifiable intangible assets were comprised of:

2023

2022

Gross Carrying
Amount

Accumulated
Amortization

Gross Carrying
Amount

Accumulated
Amortization

As of June 30
INTANGIBLE ASSETS WITH DETERMINABLE LIVES
Brands
Patents and technology
Customer relationships
Other

TOTAL

INTANGIBLE ASSETS WITH INDEFINITE LIVES
Brands

4,352 $
2,775
1,847
73

9,047 $

(2,540) $
(2,649)
(1,039)
(28)

(6,256) $

4,299 $
2,769
1,797
147

9,012 $

(2,628)
(2,609)
(939)
(97)

(6,273)

20,992

—

20,940

—

TOTAL INTANGIBLE ASSETS

30,039 $

(6,256) $

29,952 $

(6,273)

Amortization expense of intangible assets was as follows:

Fiscal years ended June 30
Intangible asset amortization

2023

2022

2021

327 $

312 $

318

Estimated amortization expense over the next five fiscal years is as follows:

Fiscal years ending June 30
Estimated amortization expense

2024

2025

2026

2027

2028

340 $

320 $

297 $

287 $

247

NOTE 5
INCOME TAXES
Income taxes are recognized for the amount of taxes payable for the current year and for the impact of deferred tax assets and
liabilities, which represent future tax consequences of events that have been recognized differently in the financial statements
than for tax purposes. Deferred tax assets and liabilities are established using the enacted statutory tax rates and are adjusted for
any changes in such rates in the period of change.
We have elected to account for the tax effects of Global Intangible Low-Taxed Income (GILTI) as a current period expense
when incurred.
Earnings before income taxes consisted of the following:

Fiscal years ended June 30
United States
International

TOTAL

2023

2022

2021

12,107 $
6,246

11,698 $
6,297

18,353 $

17,995 $

10,858
6,757

17,615

46 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.Income taxes consisted of the following:

Fiscal years ended June 30
CURRENT TAX EXPENSE
U.S. federal

International

U.S. state and local

TOTAL

DEFERRED TAX EXPENSE/(BENEFIT)
U.S. federal

International and other

TOTAL

TOTAL TAX EXPENSE

2023

2022

2021

2,303 $

1,916 $

1,412

353

4,068

(224)

(229)

(453)

1,333

355

3,604

(320)

(82)

(402)

1,663

1,534

324

3,521

(65)

(193)

(258)

3,615 $

3,202 $

3,263

A reconciliation of the U.S. federal statutory income tax rate to our actual effective income tax rate is provided below:

Fiscal years ended June 30
U.S. federal statutory income tax rate
Country mix impacts of foreign operations
State income taxes, net of federal benefit

Excess tax benefits from the exercise of stock options

Foreign derived intangible income deduction (FDII)

Changes in uncertain tax positions

Other

EFFECTIVE INCOME TAX RATE

2023

2022

2021

21.0 %
(0.5)%
1.6 %

(1.0)%

(0.8)%

0.1 %

(0.7)%

19.7 %

21.0 %
(0.3)%
1.5 %

(2.0)%

(1.1)%

(0.4)%

(0.9)%

17.8 %

21.0 %
(0.5)%
1.3 %

(1.6)%

(1.0)%

(0.1)%

(0.6)%

18.5 %

Country mix impacts of foreign operations includes the effects of foreign subsidiaries' earnings taxed at rates other than the
U.S. statutory rate, the U.S. tax impacts of non-U.S. earnings repatriation and any net impacts of intercompany transactions.
Changes in uncertain tax positions represent changes in our net liability related to prior year tax positions. Excess tax benefits
from the exercise of stock options reflect the excess of actual tax benefits received on employee exercises of stock options and
other share-based payments (which generally equals the income taxable to the employee) over the amount of tax benefits that
were calculated and recognized based on the grant date fair values of such instruments.
Tax benefits credited to shareholders' equity totaled $190 for the fiscal year ended June 30, 2023. This primarily relates to the
tax effects of net investment hedges. Tax costs charged to shareholders' equity totaled $1,538 for the fiscal year ended June 30,
2022. This primarily relates to the tax effects of certain adjustments to pension obligations recorded in shareholders' equity and
the tax effects of net investment hedges.
Prior to the passage of the U.S. Tax Act, the Company asserted that substantially all of the undistributed earnings of its foreign
subsidiaries were considered indefinitely invested and, accordingly, no deferred taxes were provided. Pursuant to the provisions
of the U.S. Tax Act, these earnings were subjected to a one-time transition tax. This charge included taxes for all U.S. income
taxes and for the related foreign withholding taxes for the portion of those earnings which are no longer considered indefinitely
invested. We have not provided deferred taxes on approximately $24 billion of earnings that are considered indefinitely
invested.
A reconciliation of the beginning and ending liability for uncertain tax positions is as follows:

Fiscal years ended June 30
BEGINNING OF YEAR
Increases in tax positions for prior years

Decreases in tax positions for prior years

Increases in tax positions for current year

Settlements with taxing authorities

Lapse in statute of limitations

Currency translation

END OF YEAR

2023

2022

2021

583 $
113

(119)

(108)

(7)

627 $
102

(118)

(42)

(17)

(22)

515 $

583 $

485
157

(34)

(26)

(24)

627

The Procter & Gamble Company 47Amounts in millions of dollars except per share amounts or as otherwise specified.Included in the total liability for uncertain tax positions at June 30, 2023, is $354 that, depending on the ultimate resolution,
could impact the effective tax rate in future periods.
The Company is present in approximately 70 countries and over 150 taxable jurisdictions and, at any point in time, has 30-40
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 the closing of statutes
of limitation. Such adjustments are reflected in the tax provision as appropriate. We have tax years open ranging from 2010 and
forward. We are generally not able to reliably estimate the ultimate settlement amounts until the close of the audit. Based on
information currently available, we anticipate that over the next 12-month period, audit activity could be completed related to
uncertain tax positions in multiple jurisdictions for which we have accrued existing liabilities of approximately $40, including
interest and penalties.
We recognize the additional accrual of any possible related interest and penalties relating to the underlying uncertain tax
position in income tax expense. As of June 30, 2023, 2022 and 2021, we had accrued interest of $143, $179 and $166 and
accrued penalties of $12, $12 and $10, respectively, which are not included in the above table. During the fiscal years ended
June 30, 2023, 2022 and 2021, we recognized $23, $21 and $38 in interest expense and $1, $2 and $6 in penalties expense,
respectively.
Deferred income tax assets and liabilities were comprised of the following:

As of June 30
DEFERRED TAX ASSETS
Loss and other carryforwards

Capitalized research & development

Pension and other retiree benefits

Accrued marketing and promotion

Stock-based compensation

Unrealized loss on financial and foreign exchange transactions

Fixed assets

Lease liabilities

Other

Valuation allowances

TOTAL

DEFERRED TAX LIABILITIES
Goodwill and other intangible assets

Fixed assets

Other retiree benefits
Unrealized gain on financial and foreign exchange transactions

Lease right-of-use assets

Foreign withholding tax on earnings to be repatriated

Other

TOTAL

2023

2022

1,014 $

930

737

421

412

282

223

197

874

(403)

4,687 $

5,811 $

1,556

1,101
198

191

381

914

646

740

420

386

138

209

185

862

(409)

4,091

5,783

1,542

1,031
439

179

244

9,334 $

9,288

Net operating loss carryforwards were $2.9 billion at June 30, 2023, and $2.5 billion at June 30, 2022. If unused, approximately
$300 will expire between 2023 and 2042. The remainder, totaling $2.6 billion at June 30, 2023, may be carried forward
indefinitely.

NOTE 6
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 year. 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 year. The diluted shares include the dilutive effect of stock options and other share-
based awards based on the treasury stock method (see Note 7) and the assumed conversion of preferred stock (see Note 8).

48 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.

Net earnings per common share were calculated as follows:

Fiscal years ended June 30
CONSOLIDATED AMOUNTS
Net earnings

Less: Net earnings attributable to noncontrolling interests

Net earnings attributable to P&G
Less: Preferred dividends

2023

2022

2021

14,738 $

14,793 $

14,352

14,653
282

14,742
281

14,306
271

Net earnings attributable to P&G available to common shareholders
(Basic)

Net earnings attributable to P&G available to common shareholders
(Diluted)

14,371 $

14,461 $

14,035

14,653 $

14,742 $

14,306

SHARES IN MILLIONS

Basic weighted average common shares outstanding

2,368.2

2,410.3

2,465.8

Add effect of dilutive securities:

Stock options and other unvested equity awards (1)
Convertible preferred shares (2)

39.4
76.3

49.5
79.3

52.5
82.7

Diluted weighted average common shares outstanding

2,483.9

2,539.1

2,601.0

NET EARNINGS PER COMMON SHARE (3)
Basic

Diluted

6.07 $

5.90 $

6.00 $

5.81 $

5.69

5.50

(1)

Excludes 19 million, 11 million and 9 million in 2023, 2022 and 2021, respectively, of weighted average stock options outstanding
because the exercise price of these options was greater than the average market value of the Company's stock or their effect was
antidilutive.

(2) An overview of preferred shares can be found in Note 8.
(3) Basic net earnings per common share and Diluted net earnings per common share are calculated on Net earnings attributable to Procter &

Gamble.

NOTE 7
SHARE-BASED COMPENSATION
The Company has two primary share-based compensation programs under which we annually grant stock option, restricted
stock unit (RSU) and performance stock unit (PSU) awards to certain managers and directors.
In our main long-term incentive program, managers can elect to receive stock options or RSUs. All options vest after three
years and have a 10-year life. Exercise prices on options are set equal to the market price of the underlying shares on the date of
the grant. RSUs vest and settle in shares of common stock three years from the grant date.
Senior-level executives participate in an additional long-term incentive program that awards PSUs, which are paid in shares
after the end of a three-year performance period subject to pre-established performance goals. The program includes a Relative
Total Shareholder Return (R-TSR) modifier under which the number of shares ultimately granted is also impacted by the
Company's actual shareholder return relative to our consumer products competitive peer set.
In addition to these long-term incentive programs, we award RSUs to the Company's non-employee directors and make other
minor stock option and RSU grants to employees for which the terms are not substantially different from our long-term
incentive awards.
The Company's share-based compensation plan was approved by shareholders in 2019. Under the 2019 plan, a maximum of
150 million shares of common stock was authorized for issuance and a total of 96 million shares remain available for grant.
The Company recognizes share-based compensation expense based on the fair value of the awards at the date of grant. The
expense is recognized on a straight-line basis over the requisite service period. Awards to employees eligible for retirement
prior to the award becoming fully vested are recognized as compensation expense ratably from the grant date through the date
the employee first becomes eligible to retire and/or is no longer required to provide services to earn the award. Share-based
compensation expense is included as part of Cost of products sold and SG&A in the Consolidated Statement of Earnings and
includes an estimate of forfeitures, which is based on historical data.

The Procter & Gamble Company 49Amounts in millions of dollars except per share amounts or as otherwise specified.Total expense and related tax benefit were as follows:

Fiscal years ended June 30
Stock options
RSUs and PSUs

Total share-based expense

Income tax benefit

2023

2022

2021

303 $
242

545 $

271 $
257

528 $

103 $

88 $

279
261

540

102

We utilize an industry standard lattice-based valuation model to calculate the fair value for stock options granted. Assumptions
utilized in the model, which are evaluated and revised to reflect market conditions and experience, were as follows:

Fiscal years ended June 30
Interest rate
Weighted average interest rate

Dividend yield

Expected volatility

Expected life in years

2023

2022

2021

3.7

- 4.1 % 0.1

- 1.6 % 0.1

3.7 %

2.6 %

21 %

8.8

1.5 %

2.4 %

19 %

9.1

- 0.7 %
0.6 %

2.4 %

20 %

9.2

Lattice-based option valuation models incorporate ranges of assumptions for inputs and those ranges are disclosed in the
preceding table. Expected volatilities are based on a combination of historical volatility of our stock and implied volatilities of
call options on our stock. We use historical data to estimate option exercise and employee termination patterns within the
valuation model. The expected life of options granted is derived from the output of the option valuation model and represents
the average period of time that options granted are expected to be outstanding. The interest rate for periods within the contractual
life of the options is based on the U.S. Treasury yield curve in effect at the time of grant.
We utilize a Monte-Carlo simulation model to estimate the fair value of performance stock units granted. Assumptions utilized
in the model are not substantially different from those used for stock options.
A summary of options outstanding under the plans as of June 30, 2023, and activity during the year then ended is presented
below:

Options
Outstanding at July 1, 2022
Granted
Exercised
Forfeited/expired

Outstanding at June 30, 2023
Exercisable

Options
(in thousands)

Weighted
Average
Exercise Price

Weighted Average
Contractual Life
in Years

Aggregate
Intrinsic Value

126,715 $
9,672
(14,667)
(515)

121,205 $
86,336 $

99.59
131.26
81.07
128.40

104.18
90.46

5.1 $
3.9 $

5,770
5,291

The following table provides additional information on stock options:

Fiscal years ended June 30
Weighted average grant-date fair value of options granted
Intrinsic value of options exercised

Grant-date fair value of options that vested

Cash received from options exercised

Actual tax benefit from options exercised

2023

2022

2021

29.58 $
979

21.55 $
1,886

219

1,189

207

177

1,930

399

20.94
1,401

236

1,705

292

At June 30, 2023, $159 of compensation cost had not yet been recognized related to stock option grants. That cost is expected
to be recognized over a remaining weighted average period of 1.6 years.

50 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.A summary of non-vested RSUs and PSUs outstanding under the plans as of June 30, 2023, and activity during the year then
ended is presented below:

RSU and PSU awards
Non-vested at July 1, 2022
Granted

Vested

Forfeited

Non-vested at June 30, 2023

RSUs

PSUs

Units (in
thousands)

Weighted
Average Grant
Date Fair Value

Units (in
thousands)

Weighted
Average Grant
Date Fair Value

2,832 $
1,727

(1,286)

(101)

3,172 $

130.37
128.78

116.89

131.22

134.94

928 $
569

(453)

(33)

152.94
133.21

152.90

140.68

1,011 $

142.40

At June 30, 2023, $218 of compensation cost had not yet been recognized related to RSUs and PSUs. That cost is expected to
be recognized over a remaining weighted average period of 1.7 years. The total grant date fair value of shares vested was $220,
$248 and $266 in 2023, 2022 and 2021, respectively.
The Company settles equity issuances with treasury shares. We have no specific policy to repurchase common shares to
mitigate the dilutive impact of options, RSUs and PSUs. However, we have historically made adequate discretionary purchases,
based on cash availability, market trends and other factors, to offset the impacts of such activity.

NOTE 8
POSTRETIREMENT BENEFITS AND EMPLOYEE STOCK OWNERSHIP PLAN
We offer various postretirement benefits to our employees.
Defined Contribution Retirement Plans
We have defined contribution plans, which cover the majority of our U.S. employees, as well as employees in certain other
countries. These plans are fully funded. We generally make contributions to participants' accounts based on individual base
salaries and years of service. Total global defined contribution expense was $392, $366 and $340 in 2023, 2022 and 2021,
respectively.
The primary U.S. defined contribution plan (the U.S. DC plan) comprises the majority of the expense for the Company's
defined contribution plans. For the U.S. DC plan, the contribution rate is set annually. Total contributions for this plan
approximated 13% of total participants' annual wages and salaries in 2023 and 14% in 2022 and 2021.
We maintain The Procter & Gamble Profit Sharing Trust (Trust) and Employee Stock Ownership Plan (ESOP) to provide a
portion of the funding for the U.S. DC plan and other retiree benefits (described below). Operating details of the ESOP are
provided at the end of this Note. The fair value of the ESOP Series A shares allocated to participants reduces our cash
contribution required to fund the U.S. DC plan.
Defined Benefit Retirement Plans and Other Retiree Benefits
We offer defined benefit retirement pension plans to certain employees. These benefits relate primarily to plans outside the U.S.
and, to a lesser extent, plans assumed in previous acquisitions covering U.S. employees.
We also provide certain other retiree benefits, primarily health care benefits for the majority of our U.S. employees who
become eligible for these benefits when they meet minimum age and service requirements. The plans require cost sharing with
retirees and the benefits are funded by ESOP Series B shares and certain other assets contributed by the Company.

The Procter & Gamble Company 51Amounts in millions of dollars except per share amounts or as otherwise specified.Obligation and Funded Status. The following provides a reconciliation of benefit obligations, plan assets and funded status of
these defined benefit plans:

Fiscal years ended June 30

CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year (3)
Service cost
Interest cost
Participants' contributions
Amendments (4)
Net actuarial loss/(gain)
Special termination benefits
Currency translation and other
Benefit payments
BENEFIT OBLIGATION AT END OF YEAR (3)

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Participants' contributions
Currency translation and other
ESOP debt impacts (5)
Benefit payments
FAIR VALUE OF PLAN ASSETS AT END OF YEAR
FUNDED STATUS

Pension Benefits (1)

2023

2022

Other Retiree Benefits (2)
2022
2023

$
$

12,608 $
173
430
13
8
(550)
5
363
(551)
12,499 $

10,173 $
37
392
13
310
—
(551)
10,374 $
(2,125) $

18,469
253
253
14
5
(4,067)
4
(1,720)
(603)
12,608

13,041
(1,233)
222
14
(1,268)
—
(603)
10,173
$
(2,435) $

3,070 $
71
142
50
—
(208)
4
31
(227)
2,933 $

6,889 $
482
42
50
1
87
(227)
7,324 $
4,391 $

4,206
86
99
67
(586)
(586)
1
51
(268)
3,070

6,444
526
37
67
1
82
(268)
6,889
3,819

(1)

(2)

(3)

(4)

Primarily non-U.S.-based defined benefit retirement plans.
Primarily U.S.-based other postretirement benefit plans.
For the pension benefit plans, the benefit obligation is the projected benefit obligation. For other retiree benefit plans, the benefit
obligation is the accumulated postretirement benefit obligation.
For the other retiree benefits, the amendment primarily relates to adjustments in the self-insured U.S. retiree health care program to
utilize fully-insured Medicare Advantage Programs impacting fiscal year 2022.

(5) Represents the net impact of ESOP debt service requirements, which is netted against plan assets for other retiree benefits.
The actuarial gain for pension plans in 2023 was primarily related to increases in discount rates, offset by inflation-related
pension benefit increases. The actuarial gain for other retiree benefits in 2023 was primarily related to increases in discount
rates and a decrease in assumptions for medical claims costs. The actuarial gain for pension plans in 2022 was primarily related
to increases in discount rates. The actuarial gain for other retiree benefits in 2022 was primarily related to increases in discount
rates, partially offset by unfavorable medical claim experience.
The underfunding of pension benefits is primarily a function of the different funding incentives that exist outside of the U.S. In
certain countries, there are no legal requirements or financial incentives provided to companies to pre-fund pension obligations
prior to their due date. In these instances, benefit payments are typically paid directly from the Company's cash as they become
due.

As of June 30
CLASSIFICATION OF NET AMOUNT RECOGNIZED
Noncurrent assets

Current liabilities

Noncurrent liabilities

Pension Benefits

Other Retiree Benefits

2023

2022

2023

2022

1,085 $

(94)

(3,116)

765

(61)

(3,139)

5,119 $

4,525

(38)

(690)

(34)

(672)

NET AMOUNT RECOGNIZED

(2,125) $

(2,435) $

4,391 $

3,819

AMOUNTS RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE (INCOME)/LOSS (AOCI)
Net actuarial loss/(gain)

1,818 $

1,906

(1,160) $

Prior service cost/(credit)

156

170

(787)

(1,093)

(907)

NET AMOUNTS RECOGNIZED IN AOCI

1,974 $

2,076

(1,947) $

(2,000)

52 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.The accumulated benefit obligation for all defined benefit pension plans, which differs from the projected obligation in that it
excludes the assumption of future salary increases, was $11.8 billion and $11.9 billion as of June 30, 2023 and 2022,
respectively. Information related to the funded status of selected pension and other retiree benefits at June 30 is as follows:

As of June 30

2023

2022

PENSION PLANS WITH A PROJECTED BENEFIT OBLIGATION IN EXCESS OF PLAN ASSETS

Projected benefit obligation

Fair value of plan assets

7,967 $

4,758

PENSION PLANS WITH AN ACCUMULATED BENEFIT OBLIGATION IN EXCESS OF PLAN ASSETS

Accumulated benefit obligation

Fair value of plan assets

7,442 $

4,677

OTHER RETIREE BENEFIT PLANS WITH AN ACCUMULATED BENEFIT OBLIGATION IN EXCESS OF
PLAN ASSETS

Accumulated benefit obligation

Fair value of plan assets

818 $

Net Periodic Benefit Cost. Components of the net periodic benefit cost were as follows:

7,989

4,789

7,191

4,433

808

102

Pension Benefits

Other Retiree Benefits

Fiscal years ended June 30
2022
AMOUNTS RECOGNIZED IN NET PERIODIC BENEFIT COST/(CREDIT)
Service cost

173 $

2023

253 $

2021

2023

2022

2021

Interest cost

Expected return on plan assets

Amortization of net actuarial loss/(gain)

Amortization of prior service cost/(credit)

Amortization of net actuarial loss/(gain) due to settlements

Special termination benefits

GROSS BENEFIT COST/(CREDIT)

Dividends on ESOP preferred stock

275 $

71 $

86 $

430

253

240

142

(591)

(684)

(783)

(611)

(564)

(508)

133

337

423

(7)

—

176

—

(5)

186

—

202

—

(125)

(107)

—

(526)

(474)

(311)

—

(8)

114

(60)

—

NET PERIODIC BENEFIT COST/(CREDIT)

176 $

186 $

202 $ (526) $ (474) $ (319)

CHANGE IN PLAN ASSETS AND BENEFIT OBLIGATIONS RECOGNIZED IN AOCI
Net actuarial loss/(gain) - current year

4 $ (2,150)

Prior service cost/(credit) - current year

Amortization of net actuarial loss/(gain)

Amortization of prior service (cost)/credit
Amortization of net actuarial loss/(gain) due to settlements

Currency translation and other

TOTAL CHANGE IN AOCI

(133)

(337)

(26)
—

(28)
5

(486)

(102)

(2,991)

(79) $ (548)

—

125
—

—

(586)

(11)

107
—

(1,025)

NET AMOUNTS RECOGNIZED IN PERIODIC
BENEFIT COST/(CREDIT) AND AOCI

74 $ (2,805)

$ (473) $ (1,499)

The service cost component of the net periodic benefit cost is included in the Consolidated Statements of Earnings in Cost of
products sold and SG&A. All other components are included in the Consolidated Statements of Earnings in Other non-
operating income/(expense), net, unless otherwise noted.

The Procter & Gamble Company 53Amounts in millions of dollars except per share amounts or as otherwise specified.Assumptions. We determine our actuarial assumptions on an annual basis. These assumptions are weighted to reflect each
country that may have an impact on the cost of providing retirement benefits. The weighted average assumptions used to
determine benefit obligations recorded on the Consolidated Balance Sheets as of June 30, 2023 and 2022, were as follows: (1)

As of June 30
Discount rate
Rate of compensation increase

Interest crediting rate for cash balance plans

Health care cost trend rates assumed for next year

Rate to which the health care cost trend rate is assumed to
decline (ultimate trend rate)

Year that the rate reaches the ultimate trend rate

Pension Benefits

2023

2022

Other Retiree Benefits

2023

2022

4.2 %
2.9 %

4.3 %

N/A

3.7 %
2.8 %

4.3 %

N/A

5.6 %
N/A

N/A

6.1 %

4.5 %

2028

5.0 %
N/A

N/A

6.4 %

4.5 %

2028

(1) Determined as of end of fiscal year.
The weighted average assumptions used to determine net benefit cost recorded on the Consolidated Statement of Earnings for
the fiscal years ended June 30 were as follows: (1)

Fiscal years ended June 30
Discount rate
Expected return on plan assets

Rate of compensation increase

Interest crediting rate for cash balance plans

(1) Determined as of beginning of fiscal year.

Pension Benefits
2022

2021

2023

Other Retiree Benefits
2022

2021

2023

3.7 %
5.9 %

2.8 %

4.3 %

1.7 %
5.5 %

2.7 %

4.4 %

1.5 %
6.5 %

2.5 %

4.4 %

5.0 %
8.4 %

N/A

3.2 %
8.4 %

N/A

3.1 %
8.4 %

N/A

For plans that make up the majority of our obligation, the Company calculates the benefit obligation and the related impacts on
service and interest costs using specific spot rates along the corporate bond yield curve. For the remaining plans, the Company
determines these amounts utilizing a single weighted average discount rate derived from the corporate bond yield curve used to
measure the plan obligations.
Several factors are considered in developing the estimate for the long-term expected rate of return on plan assets. For the
defined benefit retirement plans, these factors include historical rates of return of broad equity and bond indices and projected
long-term rates of return obtained from pension investment consultants. The expected long-term rates of return for plan assets
are 8 – 9% for equities and 3 – 5% for bonds. For other retiree benefit plans, the expected long-term rate of return reflects that
the assets are comprised primarily of Company stock. The expected rate of return on Company stock is based on the long-term
projected return of 8.5% and reflects the historical pattern of returns.
Plan Assets. Our investment objective for defined benefit retirement plan assets is to meet the plans' benefit obligations and to
improve plan self-sufficiency for future benefit obligations. The investment strategies focus on asset class diversification,
liquidity to meet benefit payments and an appropriate balance of long-term investment return and risk. Target ranges for asset
allocations are determined by assessing different investment risks and matching the actuarial projections of the plans' future
liabilities and benefit payments with current as well as expected long-term rates of return on the assets, taking into account
investment return volatility and correlations across asset classes. Plan assets are diversified across several investment managers
and are generally invested in liquid funds that are selected to track broad market equity and bond indices. Investment risk is
carefully controlled with plan assets rebalanced to target allocations on a periodic basis and with continual monitoring of
investment managers' performance relative to the investment guidelines established with each investment manager.
Our target asset allocation for the fiscal year ended June 30, 2023, and actual asset allocation by asset category as of June 30,
2023 and 2022, were as follows:

Asset Category

Cash
Debt securities

Equity securities

TOTAL

Target Asset Allocation

Actual Asset Allocation at June 30

Pension Benefits

Other Retiree
Benefits

Pension Benefits

Other Retiree Benefits

2023

2022

2023

2022

1 %
59 %

40 %

2 %
— %

98 %

1 %
60 %

39 %

1 %
58 %

41 %

100 %

2 %
1 %

97 %

100 %

2 %
1 %

97 %

100 %

The following table sets forth the fair value of the Company's plan assets as of June 30, 2023 and 2022, segregated by level
within the fair value hierarchy (refer to Note 9 for further discussion on the fair value hierarchy and fair value principles).

54 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.

Investments valued using net asset value as a practical expedient are not valued using the fair value hierarchy, but rather valued
using the net asset value reported by the managers of the funds and as supported by the unit prices of actual purchase and sale
transactions.

As of June 30
ASSETS AT FAIR VALUE
Cash and cash equivalents

Company common stock
Company preferred stock (1)
Fixed income securities (2)
Insurance contracts (3)

TOTAL ASSETS IN THE FAIR
VALUE HIERARCHY
Investments valued at net asset value (4)
TOTAL ASSETS AT FAIR VALUE

Pension Benefits

Other Retiree Benefits

Fair Value
Hierarchy Level

2023

2022

Fair Value
Hierarchy Level

2023

2022

54 $

—

1,190

1,545

1,337

9,037

1,717

8,456

$ 10,374

10,173

148 $

368

6,721

—

7,237

$ 7,324

130

319

6,340

—

6,789

100

6,889

(1) Company preferred stock is valued based on the value of Company common stock and is presented net of ESOP debt discussed below.
(2)

Fixed income securities are estimated by using pricing models or quoted prices of securities with similar characteristics.
Fair values of insurance contracts are valued based on either their cash equivalent value or models that project future cash flows and
discount the future amounts to a present value using market-based observable inputs, including credit risk and interest rate curves. The
activity for Level 3 assets is not significant for all years presented.
Investments valued using net asset value as a practical expedient are primarily equity and fixed income collective funds.

(3)

(4)

Cash Flows. Management's best estimate of cash requirements and discretionary contributions for the defined benefit
retirement plans and other retiree benefit plans for the fiscal year ending June 30, 2024, is $206 and $52, respectively. Expected
contributions are dependent on many variables, including the variability of the market value of the plan assets as compared to the
benefit obligation and other market or regulatory conditions. In addition, we take into consideration our business investment
opportunities and resulting cash requirements. Accordingly, actual funding may differ significantly from current estimates.
Total benefit payments expected to be paid to participants, which include payments funded from the Company's assets and
payments from the plans are as follows:

Fiscal years ending June 30
EXPECTED BENEFIT PAYMENTS
2024

2025

2026

2027

2028
2029 - 2033

Pension Benefits Other Retiree Benefits

648 $

633

632

652

704
3,800

179

186

189

196

202
1,102

Employee Stock Ownership Plan
We maintain the ESOP to provide funding for certain employee benefits discussed in the preceding paragraphs.
The ESOP borrowed $1.0 billion in 1989 and the proceeds were used to purchase Series A ESOP Convertible Class A Preferred
Stock to fund a portion of the U.S. DC plan. Principal and interest requirements of the borrowing were paid by the Trust from
dividends on the preferred shares and from advances provided by the Company. The original borrowing of $1.0 billion has been
repaid in full, and advances from the Company of $8 remain outstanding at June 30, 2023. Each share is convertible at the
option of the holder into one share of the Company's common stock. The dividend for the current year was equal to the
common stock dividend of $3.68 per share. The liquidation value is $6.82 per share.
In 1991, the ESOP borrowed an additional $1.0 billion. The proceeds were used to purchase Series B ESOP Convertible
Class A Preferred Stock to fund a portion of retiree health care benefits. These shares, net of the ESOP's debt, are considered
plan assets of the other retiree benefits plan discussed above. The original borrowings of $1.0 billion were repaid in 2021. Debt
service requirements were funded by preferred stock dividends, cash contributions and advances provided by the Company, of
which $814 are outstanding at June 30, 2023. Each share is convertible at the option of the holder into one share of the
Company's common stock. The dividend for the current year was equal to the common stock dividend of $3.68 per share. The
liquidation value is $12.96 per share.

The Procter & Gamble Company 55Amounts in millions of dollars except per share amounts or as otherwise specified.Our ESOP accounting practices are consistent with current ESOP accounting guidance, including the permissible continuation
of certain provisions from prior accounting guidance. ESOP debt, which was guaranteed by the Company, was recorded as debt
with an offset to the Reserve for ESOP debt retirement, which is presented within Shareholders' equity. Advances to the ESOP
by the Company are recorded as an increase in the Reserve for ESOP debt retirement. Interest incurred on the ESOP debt was
recorded as Interest expense. Dividends on all preferred shares are charged to Retained earnings.
The series A and B preferred shares of the ESOP are allocated to employees based on debt service requirements. The number of
preferred shares outstanding at June 30 was as follows:

Shares in thousands
Allocated
Unallocated

TOTAL SERIES A

Allocated

Unallocated

TOTAL SERIES B

2023

2022

2021

24,449
535

25,901
1,123

24,984

27,024

32,172

17,867

30,719

20,120

50,039

50,839

27,759
1,769

29,528

29,203

22,349

51,552

For purposes of calculating diluted net earnings per common share, the preferred shares held by the ESOP are considered
converted from inception.

NOTE 9
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. We evaluate exposures on a centralized basis to take advantage of natural
exposure correlation and netting. To the extent we choose to manage volatility associated with the net exposures, we enter into
various financial transactions that we account for using the applicable accounting guidance for derivative instruments and
hedging activities. These financial transactions are governed by our policies covering acceptable counterparty exposure,
instrument types and other hedging practices.
If the Company elects to do so and if the instrument meets certain specified accounting criteria, management designates
derivative instruments as cash flow hedges, fair value hedges or net investment hedges. We record derivative instruments at fair
value and the accounting for changes in the fair value depends on the intended use of the derivative, the resulting designation
and the effectiveness of the instrument in offsetting the risk exposure it is designed to hedge. We generally have a high degree
of effectiveness between the exposure being hedged and the hedging instrument.
Credit Risk Management
We have counterparty credit guidelines and normally enter into transactions with investment grade financial institutions, to the
extent commercially viable. Counterparty exposures are monitored daily and downgrades in counterparty credit ratings are
reviewed on a timely basis. We have not incurred, and do not expect to incur, material credit losses on our risk management or
other financial instruments.
Substantially all of the Company's financial instruments used in hedging transactions are governed by industry standard netting
and collateral agreements with counterparties. If the Company's credit rating were to fall below the levels stipulated in the
agreements, the counterparties could demand either collateralization or termination of the arrangements. The aggregate fair
value of the instruments covered by these contractual features that are in a net liability position was $1,088 and $219 as of
June 30, 2023 and 2022, respectively. The Company has not been required to post collateral as a result of these contractual
features.
Interest Rate Risk Management
Our policy is to manage interest cost using a mixture of fixed-rate and variable-rate debt. To manage this risk in a cost-efficient
manner, we enter into interest rate swaps whereby we agree to exchange with the counterparty, at specified intervals, the
difference between fixed and variable interest amounts calculated by reference to a notional amount.
We designate certain interest rate swaps on fixed rate debt that meet specific accounting criteria as fair value hedges. For fair
value hedges, the changes in the fair value of both the hedging instruments and the underlying debt obligations are immediately
recognized in earnings.
Foreign Currency Risk Management
We manufacture and sell our products and finance our operations in a number of countries throughout the world. As a result, we
are exposed to movements in foreign currency exchange rates. We leverage the Company’s diversified portfolio of exposures as
a natural hedge. In certain cases, we enter into non-qualifying foreign currency contracts to hedge certain balance sheet items
subject to revaluation. The change in fair value of these instruments and the underlying exposure are both immediately
recognized in earnings.

56 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.

To manage exchange rate risk related to our intercompany financing, we primarily use forward contracts and currency swaps.
The change in fair value of these non-qualifying instruments is immediately recognized in earnings, substantially offsetting the
foreign currency mark-to-market impact of the related exposure.
Net Investment Hedging
We hedge certain net investment positions in foreign subsidiaries. To accomplish this, we either borrow directly in foreign
currencies and designate all or a portion of the foreign currency debt as a hedge of the applicable net investment position or we
enter into foreign currency swaps that are designated as hedges of net investments. The time value component of the net
investment hedge currency swaps is excluded from the assessment of hedge effectiveness. Changes in the fair value of the
swap, including changes in the fair value of the excluded time value component, are recognized in OCI and offset the value of
the net investment being hedged. The time value component is subsequently reported in income on a systematic basis.
Commodity Risk Management
Certain raw materials used in our products or production processes are subject to price volatility caused by weather, supply
conditions, political and economic variables and other unpredictable factors. As of and during the fiscal years ended June 30,
2023 and 2022, we did not have any financial commodity hedging activity.
Insurance
We self-insure for most insurable risks. However, we purchase insurance for Directors and Officers Liability and certain other
coverage where it is required by law or by contract.
Fair Value Hierarchy
Accounting guidance on fair value measurements for certain financial assets and liabilities requires that financial assets and
liabilities carried at fair value be classified and disclosed in one of the following categories:
•
Level 1: Quoted market prices in active markets for identical assets or liabilities.
•
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs reflecting the reporting entity's own assumptions or external inputs from inactive markets.
•
The Company had no significant activity with Level 3 assets and liabilities during the periods presented. When applying fair
value principles in the valuation of assets and liabilities, we are required to maximize the use of quoted market prices and
minimize the use of unobservable inputs. The Company has not changed its valuation techniques used in measuring the fair
value of any financial assets or liabilities during the year.
When active market quotes are not available for financial assets and liabilities, we use industry standard valuation models.
Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based
observable inputs including credit risk, interest rate curves and forward and spot prices for currencies. In circumstances where
market-based observable inputs are not available, management judgment is used to develop assumptions to estimate fair value.
Assets and Liabilities Measured at Fair Value
Cash equivalents were $6.8 billion and $6.0 billion as of June 30, 2023 and 2022, respectively, and are classified as Level 1
within the fair value hierarchy. The Company had no other material investments in debt or equity securities during the periods
presented.
The fair value of long-term debt was $26.9 billion and $25.7 billion as of June 30, 2023 and 2022, respectively. This includes
the current portion of long-term debt instruments ($3.9 billion as of June 30, 2023, and $3.6 billion as of June 30, 2022).
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.

The Procter & Gamble Company 57Amounts in millions of dollars except per share amounts or as otherwise specified.Disclosures about Financial Instruments
The notional amounts and fair values of financial instruments used in hedging transactions as of June 30, 2023 and 2022, are as
follows:

As of June 30
DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS
Interest rate contracts

$ 4,044 $ 4,972

Notional Amount
2022
2023

DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS
Foreign currency interest rate contracts

$ 11,005 $ 7,943

TOTAL DERIVATIVES DESIGNATED AS
HEDGING INSTRUMENTS

$ 15,049 $ 12,915

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
$ 3,489 $ 5,625
Foreign currency contracts

Fair Value Asset
2022
2023

Fair Value (Liability)
2022
2023

— $

(445) $

(307)

26 $

561

(631) $

(1)

26 $

564

$ (1,076) $

(308)

7 $

(42) $

(61)

TOTAL DERIVATIVES AT FAIR VALUE

$ 18,538 $ 18,540

33 $

570

$ (1,118) $

(369)

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 $3.6 billion and $4.7 billion
as of June 30, 2023 and 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 $11.8 billion and $11.2 billion as of June 30, 2023 and 2022, respectively.
The increase in the notional balance of derivative instruments designated as net investment hedges is primarily driven by the
Company’s decision to leverage favorable interest rate spreads in the foreign currency swap market. The decrease in the
notional balance of foreign currency contracts not designated as hedging instruments reflects changes in the level of
intercompany financing activity during the period.
Derivative assets are presented in Prepaid expenses and other current assets or Other noncurrent assets. 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.
Before tax gains/(losses) on our financial instruments in hedging relationships are categorized as follows:

Fiscal years ended June 30
DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS (1) (2)
Foreign currency interest rate contracts

Amount of Gain/(Loss)
Recognized in OCI on Derivatives

2023

2022

(544) $

1,033

(1)

(2)

For the derivatives in net investment hedging relationships, the amount of gain excluded from effectiveness testing, which was
recognized in earnings, was $238 and $73 for the fiscal years ended June 30, 2023 and 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 amount of gain/(loss) recognized in AOCI for such instruments was
$(315) and $1,639, for the fiscal years ended June 30, 2023 and 2022, respectively.

Fiscal years ended June 30

DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS
Interest rate contracts

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
Foreign currency contracts

Amount of Gain/(Loss)
Recognized in Earnings

2023

2022

(141) $

(450)

(97) $

(149)

The 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 Statement of Earnings in Interest Expense. The 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 SG&A.

58 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.NOTE 10
SHORT-TERM AND LONG-TERM DEBT

As of June 30
DEBT DUE WITHIN ONE YEAR
Current portion of long-term debt

Commercial paper

Other

TOTAL

Weighted average interest rate of debt due within one year (1)
4.2 %
(1) Weighted average interest rate of debt due within one year includes the effects of interest rate swaps discussed in Note 9.

As of June 30
LONG-TERM DEBT
3.10% USD note due August 2023

1.13% EUR note due November 2023

0.50% EUR note due October 2024
0.63% EUR note due October 2024

0.55% USD note due October 2025

4.10% USD note due January 2026

2.70% USD note due February 2026

1.00% USD note due April 2026

3.25% EUR note due August 2026

2.45% USD note due November 2026

1.90% USD note due February 2027

2.80% USD note due March 2027

4.88% EUR note due May 2027

2.85% USD note due August 2027

3.95% USD note due January 2028

1.20% EUR note due October 2028

1.25% EUR note due October 2029

3.00% USD note due March 2030

0.35% EUR note due May 2030

1.20% USD note due October 2030
1.95% USD note due April 2031

3.25% EUR note due August 2031

2.30% USD note due February 2032

4.05% USD note due January 2033

5.55% USD note due March 2037

1.88% EUR note due October 2038

3.55% USD note due March 2040

0.90% EUR note due November 2041

All other long-term debt

Current portion of long-term debt

TOTAL

Weighted average interest rate of long-term debt (1)
(1) Weighted average interest rate of long-term debt includes the effects of interest rate swaps discussed in Note 9.

2.9 %

2023

2022

3,951

6,236

10,229

3,647

4,805

193

8,645

0.8 %

2023

2022

1,000

1,359

544
870

1,000

650

600

1,000

707

875

1,000

500

1,087

750

600

870

544

1,500

544

1,250
1,000

707

850

716

544

516

652

5,244

(3,951)

24,378

1,000

1,306

523
836

1,000

—

600

1,000

—

875

1,000

500

1,045

750

—

836

523

1,500

523

1,250
1,000

—

850

—

716

523

516

627

7,196

(3,647)

22,848

2.2 %

The Procter & Gamble Company 59Amounts in millions of dollars except per share amounts or as otherwise specified.Long-term debt maturities during the next five fiscal years are as follows:

Fiscal years ending June 30

Debt maturities

2024

2025

2026

2027

2028

$3,951

$1,954

$3,364

$4,368

$1,380

NOTE 11
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:

Changes in Accumulated Other Comprehensive Income/(Loss) by Component

BALANCE at JUNE 30, 2021
OCI before reclassifications (1)
Amounts reclassified to the Consolidated Statement of Earnings (2)

Net current period OCI

Less: OCI attributable to non-controlling interests

BALANCE at JUNE 30, 2022
OCI before reclassifications (3)
Amounts reclassified to the Consolidated Statement of Earnings (4)

Net current period OCI

Less: OCI attributable to non-controlling interests

Investment
Securities

Post-
retirement
Benefit Plans

Foreign
Currency
Translation

Total AOCI

15 $

—

20
(7)

—

(7)

—

(2,963) $ (10,796) $ (13,744)
1,350
(1,451)
2,797

195

2,992

27
21

—

(1,450)

(10)

(12,236)
(71)

—

(71)

(7)

197

1,547

(8)

(12,189)
(57)

(38)

(7)

BALANCE at JUNE 30, 2023

13 $

67 $ (12,300) $ (12,220)

(1) Net of tax (benefit)/expense of $1, $953 and $515 for gains/losses on investment securities, postretirement benefit plans and foreign
currency translation, respectively, for the period ended June 30, 2022. Income tax effects within foreign currency translation include
impacts from items such as net investment hedge transactions.

(2) Net of tax (benefit)/expense of $0, $69 and $0 for gains/losses on investment securities, postretirement benefit plans and foreign

currency translation, respectively, for the period ended June 30, 2022.

(3) Net of tax (benefit)/expense of $(2), $1 and $(197) for gains/losses on investment securities, postretirement benefit plans and foreign
currency translation, respectively, for the period ended June 30, 2023. Income tax effects within foreign currency translation include
impacts from items such as net investment hedge transactions.

(4) Net of tax (benefit)/expense of $0, $8 and $0 for gains/losses on investment securities, postretirement benefit plans and foreign currency

translation, respectively, for the period ended June 30, 2023.

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

Investment securities: amounts reclassified from AOCI into Other non-operating income, net.
Postretirement benefit plans: amounts reclassified from AOCI into Other non-operating income, net and included in the
computation of net periodic postretirement costs (see Note 8).

NOTE 12
LEASES
The Company determines whether a contract contains a lease at the inception of a contract by determining if the contract
conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration.
We lease certain real estate, machinery, equipment, vehicles and office equipment for varying periods. Many of these leases
include an option to either renew or terminate the lease. For purposes of calculating lease liabilities, these options are included
within the lease term when it has become reasonably certain that the Company will exercise such options. The incremental
borrowing rate utilized to calculate our lease liabilities is based on the information available at commencement date, as most of
the leases do not provide an implicit borrowing rate. Our operating lease agreements do not contain any material guarantees or
restrictive covenants. The Company does not have any material finance leases or sublease activities. Short-term leases, defined
as leases with initial terms of 12 months or less, are not reflected on the Consolidated Balance Sheets. Lease expense for such
short-term leases is not material. The most significant assets in our leasing portfolio relate to real estate and vehicles. For
purposes of calculating lease liabilities for such leases, we have combined lease and non-lease components.

60 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.The components of the Company’s total operating lease cost for the fiscal years ended June 30, 2023, 2022 and 2021, were as
follows:

Fiscal years ended June 30

Operating lease cost
Variable lease cost (1)

Total lease cost

2023

2022

2021

229 $
79

308 $

220 $
89

309 $

245
75

320

(1)

Includes primarily costs for utilities, common area maintenance, property taxes and other operating costs associated with operating leases
that are not included in the lease liability and are recognized in the period in which they are incurred.

Supplemental balance sheet and other information related to leases is as follows:

As of June 30

Operating leases:
Right-of-use assets (Other noncurrent assets)

Current lease liabilities (Accrued and other liabilities)

Noncurrent lease liabilities (Other noncurrent liabilities)

Total operating lease liabilities

Weighted average remaining lease term:

Operating leases

Weighted average discount rate:

Operating leases

At June 30, 2023, future payments of operating lease liabilities were as follows:

1 year
2 years

3 years

4 years

5 years

Over 5 years

Total lease payments
Less: Interest

Present value of lease liabilities

2023

2022

781

760

222

595

817

205

595

800

6.2 years

6.4 years

3.5 %

3.2 %

Operating Leases

June 30, 2023

222
185

137

100

196

911
(94)

817

Total cash paid for amounts included in the measurement of lease liabilities was $233 and $228 for the fiscal years ended
June 30, 2023 and 2022, respectively.
The right-of-use assets obtained in exchange for lease liabilities were $213 and $217 for the fiscal years ended June 30, 2023
and 2022, respectively.

NOTE 13
COMMITMENTS AND CONTINGENCIES
Guarantees
In conjunction with certain transactions, primarily divestitures, we may provide routine indemnifications (e.g., indemnification
for representations and warranties and retention of previously existing environmental, tax and employee liabilities) for which
terms range in duration and, in some circumstances, are not explicitly defined. The maximum obligation under some
indemnifications is also not explicitly stated and, as a result, the overall amount of these obligations cannot be reasonably
estimated. We have not made significant payments for these indemnifications. We believe that if we were to incur a loss on any
of these matters, the loss would not have a material effect on our financial position, results of operations or cash flows.

The Procter & Gamble Company 61Amounts in millions of dollars except per share amounts or as otherwise specified.In certain situations, we guarantee loans for suppliers and customers. The total amount of guarantees issued under such
arrangements is not material.
Off-Balance Sheet Arrangements
We do not have off-balance sheet financing arrangements, including variable interest entities, that have a material impact on our
financial statements.
Purchase Commitments
We have purchase commitments for materials, supplies, services and property, plant and equipment as part of the normal course
of business. Commitments made under take-or-pay obligations are as follows:

Fiscal years ending June 30
Purchase obligations

2024

2025

2026

2027

2028

Thereafter

1,169 $

597 $

379 $

314 $

168 $

362

Such amounts represent minimum commitments under take-or-pay agreements with suppliers and are in line with expected
usage. These amounts include purchase commitments related to service contracts for information technology, human resources
management and facilities management activities that have been outsourced to third-party suppliers. Due to the proprietary
nature of many of our materials and processes, certain supply contracts contain penalty provisions for early termination. We do
not expect to incur penalty payments under these provisions that would materially affect our financial position, results of
operations or cash flows.
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.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures.
The Company's Chairman of the Board, President and Chief Executive Officer, 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)) as of the end of the period covered by
this Annual Report on Form 10-K.
Messrs. 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. Moeller and Schulten, to allow their timely
decisions regarding required disclosure.
Reports on Internal Control over Financial Reporting.
The information required by this item is incorporated by reference to "Management's Report on Internal Control over Financial
Reporting" and "Report of Independent Registered Public Accounting Firm" included in Item 8 of this Form 10-K.
Changes in Internal Control over Financial Reporting.
There were no changes in our internal control over financial reporting that occurred during the Company's fourth fiscal quarter
that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 9B. Other Information.
Not applicable.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.

62 The Procter & Gamble CompanyAmounts in millions of dollars except per share amounts or as otherwise specified.PART III

Item 10. Directors, Executive Officers and Corporate Governance.
The Board of Directors has determined that the following members of the Audit Committee are independent and are Audit
Committee financial experts as defined by SEC rules: Ms. Patricia A. Woertz (Chair) and Ms. Christine M. McCarthy.
The information required by this item is incorporated by reference to the following sections of the 2023 Proxy Statement filed
pursuant to Regulation 14A, which will be filed no later than 120 days after June 30, 2023: the section entitled Election of
Directors; the subsection of the Corporate Governance section entitled Board Meetings and Committees of the Board; the
subsection of the Corporate Governance section entitled Code of Ethics; and the subsection of the Other Matters section entitled
Shareholder Recommendations or Nominations of Director Candidates. Pursuant to the Instruction to Item 401 of Regulation S-
K, Executive Officers of the Registrant are reported in Part I of this report.
Item 11. Executive Compensation.
The information required by this item is incorporated by reference to the following sections of the 2023 Proxy Statement filed
pursuant to Regulation 14A, which will be filed no later than 120 days after June 30, 2023: the subsections of the Corporate
Governance section entitled Board Meetings and Committees of the Board, Compensation Committee Interlocks and Insider
Participation, and Risk Oversight - Compensation-Related Risk; and the portion beginning with the section entitled Director
Compensation up to but not including the section entitled Pay Versus Performance.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table gives information about the Company's common stock that may be issued upon the exercise of options,
warrants and rights under all of the Company's equity compensation plans as of June 30, 2023. The table includes the following
plans: The Procter & Gamble 1992 Stock Plan; The Procter & Gamble 2001 Stock and Incentive Compensation Plan; The
Procter & Gamble 2003 Non-Employee Directors' Stock Plan; The Procter & Gamble 2009 Stock and Incentive Compensation
Plan; The Procter & Gamble 2014 Stock and Incentive Compensation Plan; and The Procter & Gamble 2019 Stock and
Incentive Compensation Plan.

Plan Category

Equity compensation plans approved by
security holders
Stock Options/Stock Appreciation Rights

Restricted Stock Units (RSUs)/Performance
Stock Units (PSUs)

TOTAL

(a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights

(b)
Weighted
average exercise
price of outstanding
options, warrants and
rights

(c)
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))

121,226,313

$104.1900

6,430,184

127,656,497

N/A

$104.1900 (2)

(1)

(1) Of the plans listed above, only The Procter & Gamble 2019 Stock and Incentive Compensation Plan (the “2019 Plan”) allows for future
grants of securities. The maximum number of shares that may be granted under this plan is 187 million shares. Stock options and stock
appreciation rights are counted on a one-for-one basis while full value awards (such as RSUs and PSUs) are counted as five shares for each
share awarded. Total shares available for future issuance under this plan is 96 million.

(2) Weighted average exercise price of outstanding options only.
Additional information required by this item is incorporated by reference to the following section of the 2023 Proxy Statement
filed pursuant to Regulation 14A, which will be filed no later than 120 days after June 30, 2023: the subsection of the Beneficial
Ownership section entitled Security Ownership of Management and Certain Beneficial Owners.
Item 13. Certain Relationships and Related Transactions and Director Independence.
The information required by this item is incorporated by reference to the following sections of the 2023 Proxy Statement filed
pursuant to Regulation 14A, which will be filed no later than 120 days after June 30, 2023: the subsections of the Corporate
Governance section entitled Director Independence and Review and Approval of Transactions with Related Persons.
Item 14. Principal Accountant Fees and Services.
The information required by this item is incorporated by reference to the following section of the 2023 Proxy Statement filed
pursuant to Regulation 14A, which will be filed no later than 120 days after June 30, 2023: Report of the Audit Committee, which
ends with the subsection entitled Services Provided by Deloitte.

The Procter & Gamble Company 63PART IV

Item 15. Exhibits and Financial Statement Schedules.
1. Financial Statements:
The following Consolidated Financial Statements of The Procter & Gamble Company and subsidiaries, management's report
and the reports of the independent registered public accounting firm are incorporated by reference in Part II, Item 8 of this Form
10-K.
• Management's Report on Internal Control over Financial Reporting
•

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting (PCAOB Firm ID
is 34)
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements
Consolidated Statements of Earnings - for fiscal years ended June 30, 2023, 2022 and 2021
Consolidated Statements of Comprehensive Income - for fiscal years ended June 30, 2023, 2022 and 2021
Consolidated Balance Sheets - as of June 30, 2023 and 2022
Consolidated Statements of Shareholders' Equity - for fiscal years ended June 30, 2023, 2022 and 2021
Consolidated Statements of Cash Flows - for fiscal years ended June 30, 2023, 2022 and 2021
Notes to Consolidated Financial Statements

•
•
•
•
•
•
•
2. Financial Statement Schedules:
These schedules are omitted because of the absence of the conditions under which they are required or because the information
is set forth in the Consolidated Financial Statements or Notes thereto.
EXHIBITS

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
Annual Report on Form 10-K for the year ended June 30, 2016).

(3-2) - Regulations (as approved by the Board of Directors on December 13, 2022, 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
Current Report on Form 8-K filed December 13, 2022).

Exhibit

(4-1) -

Indenture, dated as of September 3, 2009, between the Company and Deutsche Bank Trust Company Americas, as
Trustee (Incorporated by reference to Exhibit (4-1) of the Company's Annual Report on Form 10-K for the year ended
June 30, 2015).

(4-2) - The Company agrees to furnish to the Securities and Exchange Commission, upon request, a copy of any other

instrument defining the rights of holders of the Company’s long-term debt.

(4-3) - Description of the Company’s Common Stock (Incorporated by reference to Exhibit (4-3) of the Company’s Annual

report on Form 10-K for the year ended June 30, 2019).

(4-4) - Description of the Company’s 0.625% Notes due 2024, 1.200% Notes due 2028, and 1.875% Notes due 2038

(Incorporated by reference to Exhibit (4-4) of the Company’s Annual report on Form 10-K for the year ended June 30,
2019).

(4-5) - Description of the Company’s 4.875% EUR notes due May 2027, 6.250% GBP notes due January 2030, and 5.250%
GBP notes due January 2033 (Incorporated by reference to Exhibit (4-5) of the Company’s Annual report on Form 10-
K for the year ended June 30, 2021).

(4-6) - Description of the Company’s 0.500% Notes due 2024 and 1.250% Notes due 2029 (Incorporated by reference to

Exhibit (4-6) of the Company’s Annual report on Form 10-K for the year ended June 30, 2019).

(4-7) - Description of the Company’s 1.375% Notes due 2025 and 1.800% Notes due 2029 (Incorporated by reference to

Exhibit (4-7) of the Company’s Annual report on Form 10-K for the year ended June 30, 2019).

(4-8) - Description of the Company’s 1.125% Notes due 2023 (Incorporated by reference to Exhibit (4-8) of the Company’s

Annual report on Form 10-K for the year ended June 30, 2019).

(4-9) - Description of the Company's 0.350% EUR Notes due 2030 and 0.900% EUR Notes due 2041 (Incorporated by

reference to Exhibit (4-10) of the Company's Annual Report on Form 10-K for the year ended June 30, 2022).

(4-10) - Description of the Company's 0.110% Yen Notes due 2026 and 0.230% Yen Notes due 2031 (Incorporated by reference

to Exhibit (4-11) of the Company's Annual Report on Form 10-K for the year ended June 30, 2022).

(4-11) - Description of the Company's 3.250% Notes due 2026 and 3.250% Notes due 2031.+

64 The Procter & Gamble CompanyExhibit (10-1) - The Procter & Gamble 2001 Stock and Incentive Compensation Plan (as amended), which was originally adopted by
shareholders at the annual meeting on October 9, 2001 (Incorporated by reference to Exhibit (10-1) of the Company’s
Annual Report on Form 10-K for the year ended June 30, 2018).*

(10-2) - The Procter & Gamble 2001 Stock and Incentive Compensation Plan related correspondence and terms and conditions
(Incorporated by reference to Exhibit (10-1) of the Company's Form 10-Q for the quarter ended December 31, 2013).*

(10-3) - The Procter & Gamble 1992 Stock Plan (as amended December 11, 2001), which was originally adopted by the

shareholders at the annual meeting on October 12, 1992 (Incorporated by reference to Exhibit (10-2) of the Company’s
Annual Report on Form 10-K for the year ended June 30, 2018).*

(10-4) - The Procter & Gamble Executive Group Life Insurance Policy (Incorporated by reference to Exhibit (10-3) of the

Company’s Annual Report on Form 10-K for the year ended June 30, 2018).*

(10-5) - Summary of the Company’s Retirement Plan Restoration Program (Incorporated by reference to Exhibit (10-5) of the

Company's Form 10-Q for the quarter ended December 31, 2019).*

(10-6) - Retirement Plan Restoration Program - Related Correspondence and Terms and Conditions. * +

(10-7) - Summary of the Company’s Long-Term Incentive Program (Incorporated by reference to Exhibit (10-3) of the

Company's Form 10-Q for the quarter ended September 30, 2020).*

(10-8) - Long-Term Incentive Program related correspondence and terms and conditions (Incorporated by reference to Exhibit

(10-3) of the Company's Form 10-Q for the quarter ended September 30, 2021).*

(10-9) - The Procter & Gamble Company Executive Deferred Compensation Plan (Incorporated by reference to Exhibit (10-2)

of the Company's Form 10-Q for the quarter ended March 31, 2020).*

(10-10) - Summary of the Company's Short Term Achievement Reward Program (Incorporated by reference to Exhibit (10-1) of

the Company's Form 10-Q for the quarter ended December 31, 2022).*

(10-11) - Short Term Achievement Reward Program – related correspondence and terms and conditions (Incorporated by
reference to Exhibit (10-2) of the Company's Form 10-Q for the quarter ended September 30, 2021).*

(10-12) - Company's Form of Separation Agreement & Release (Incorporated by reference to Exhibit (10-12) of the Company's

Annual Report on Form 10-K for the year ended June 30, 2022).*

(10-13) - Company's Form of Separation Letter and Release (Incorporated by reference to Exhibit (10-1) of the Company's Form

10-Q for the quarter ended March 31, 2023).*

(10-14) - Summary of personal benefits available to certain officers and non-employee directors (Incorporated by reference to

Exhibit (10-5) of the Company's Form 10-Q for the quarter ended September 30, 2021).*

(10-15) - The Gillette Company Deferred Compensation Plan (Incorporated by reference to Exhibit (10-18) of the Company’s

Annual Report on Form 10-K for the year ended June 30, 2017).*

(10-16) - Senior Executive Recoupment Policy (Incorporated by reference to Exhibit (10-19) of the Company’s Annual Report

on Form 10-K for the year ended June 30, 2018).*

(10-17) - The Gillette Company Deferred Compensation Plan (for salary deferrals prior to January 1, 2005) as amended through
August 21, 2006 (Incorporated by reference to Exhibit (10-20) of the Company's Annual Report on Form 10-K for the
year ended June 30, 2017).*

(10-18) - The Procter & Gamble 2009 Stock and Incentive Compensation Plan, which was originally adopted by shareholders at
the annual meeting on October 13, 2009 (Incorporated by reference to Exhibit (10-21) of the Company's Annual Report
on Form 10-K for the year ended June 30, 2017).*

(10-19) - Regulations of the Compensation and Leadership Development Committee for The Procter & Gamble 2009 Stock and

Incentive Compensation Plan, The Procter & Gamble 2001 Stock and Incentive Compensation Plan, The Procter &
Gamble 1992 Stock Plan, The Procter & Gamble 1992 Stock Plan (Belgium Version), The Gillette Company 2004
Long-Term Incentive Plan and the Gillette Company 1971 Stock Option Plan (Incorporated by reference to Exhibit
(10-21) of the Company’s Annual Report on Form 10-K for the year ended June 30, 2018).*

(10-20) - The Procter & Gamble 2009 Stock and Incentive Compensation Plan - Additional terms and conditions and related

correspondence (Incorporated by reference to Exhibit (10-2) of the Company Form 10-Q for the quarter ended
December 31, 2013).*

(10-21) - The Procter & Gamble Performance Stock Program Summary (Incorporated by reference to Exhibit (10-5) of the

Company's Form 10-Q for the quarter ended September 30, 2020).*

(10-22) - Performance Stock Program related correspondence and terms and conditions (Incorporated by reference to Exhibit

(10-4) of the Company’s Form 10-Q for the quarter ended September 30, 2021).*

(10-23) - The Procter & Gamble 2013 Non-Employee Directors' Stock Plan (Incorporated by reference to Exhibit (10-3) of the

Company's Form 10-Q for the quarter ended December 31, 2013). *

The Procter & Gamble Company 65(10-24) - The Procter & Gamble 2014 Stock and Incentive Compensation Plan, which was originally adopted by shareholders at
the annual meeting on October 14, 2014 (Incorporated by reference to Exhibit (10-25) of the Company's Annual Report
on Form 10-K for the year ended June 30, 2016).*

(10-25) - Regulations of the Compensation and Leadership Development Committee for The Procter & Gamble 2019 Stock and
Incentive Compensation Plan and The Procter & Gamble 2014 Stock and Incentive Compensation Plan (Incorporated
by reference to Exhibit (10-1) of the Company's Form 10-Q for the quarter ended December 31, 2019).*

(10-26) - The Procter & Gamble 2014 Stock and Incentive Compensation Plan - Additional terms and conditions (Incorporated

by reference to Exhibit (10-26) of the Company's Annual Report on Form 10-K for the year ended June 30, 2017).*

(10-27) - The Procter & Gamble 2019 Stock and Incentive Compensation Plan, which was originally adopted by shareholders at
the annual meeting on October 8, 2019 (Incorporated by reference to Exhibit (10-1) of the Company’s Current Report
on Form 8-K filed October 11, 2019).*

(10-28) - The Procter & Gamble 2019 Stock and Incentive Compensation Plan - Additional terms and conditions (Incorporated

by reference to Exhibit (10-28) of the Company's Annual Report on Form 10-K for the year ended June 30, 2021).*

Exhibit (21) - Subsidiaries of the Registrant. +

Exhibit (23) - Consent of Independent Registered Public Accounting Firm. +

Exhibit (31) - Rule 13a-14(a)/15d-14(a) Certifications. +

Exhibit (32) - Section 1350 Certifications. +

Exhibit (99-1) - Summary of Directors and Officers Insurance Program. +

101.INS (1)

Inline XBRL Instance Document

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)

(1) Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration

statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities
Exchange Act of 1934 and otherwise are not subject to liability.

* Compensatory plan or arrangement.

Filed herewith.

Item 16. Form 10-K Summary.
Not applicable.

66 The Procter & Gamble CompanySIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized in the city of Cincinnati, State of Ohio.

THE PROCTER & GAMBLE COMPANY

By /s/ JON R. MOELLER

(Jon R. Moeller)
Chairman of the Board, President and Chief Executive Officer

August 04, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons in the capacities and on the dates indicated.

Signature

/s/ JON R. MOELLER
(Jon R. Moeller)

/s/ ANDRE SCHULTEN
(Andre Schulten)

Title

Date

Chairman of the Board, President and Chief
Executive Officer (Principal Executive Officer)

August 04, 2023

Chief Financial Officer
(Principal Financial Officer)

/s/ MATTHEW W. JANZARUK
(Matthew W. Janzaruk)

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

/s/ B. MARC ALLEN
(B. Marc Allen)

/s/ SHEILA BONINI
(Sheila Bonini)

/s/ ANGELA F. BRALY
(Angela F. Braly)

/s/ AMY L. CHANG
(Amy L. Chang)

/s/ JOSEPH JIMENEZ
(Joseph Jimenez)

/s/ CHRISTOPHER J. KEMPCZINSKI
(Christopher J. Kempczinski)

/s/ DEBRA L. LEE
(Debra L. Lee)

/s/ TERRY J. LUNDGREN
(Terry J. Lundgren)

/s/ CHRISTINE M. MCCARTHY
(Christine M. McCarthy)

/s/ ROBERT J. PORTMAN
(Robert J. Portman)

/s/ RAJESH SUBRAMANIAM
(Rajesh Subramaniam)

/s/ PATRICIA A. WOERTZ
(Patricia A. Woertz)

Director

August 04, 2023

The Procter & Gamble Company 67[ THIS PAGE INTENTIONALLY LEF T BL ANK ]

Company and Shareholder Information

P&G’s Purpose

Shareowner Services

Stock Symbol

The Procter & Gamble Company • 69

We will provide branded products
and services of superior quality and
value that improve the lives of the
world’s consumers, now and for
generations to come. As a result,
consumers will reward us with
leadership sales, profit and value
creation, allowing our people, our
shareholders and the communities
in which we live and work to prosper.
To learn more, please visit pg.com.

Brands

P&G brands are trusted to provide
products of the highest quality
and superior performance and value
for the daily-use cleaning, health
and hygiene needs of consumers
around the world. For information
on our portfolio of brands and
our latest innovations please visit
pg.com/brands.

Citizenship

We are committed to doing
what’s right and being a good
corporate citizen. Our Citizenship
efforts are focused on Community
Impact, Equality & Inclusion and
Environmental Sustainability, with
a foundation of Ethics & Corporate
Responsibility guiding everything
we do.

P&G Online

• pg.com

• pginvestor.com

• news.pg.com

• twitter.com/proctergamble

• linkedin.com/company/

procter-and-gamble

• youtube.com/proctergamble

• instagram.com/proctergamble

EQ Shareowner Services serves
as transfer and dividend paying
agent for P&G Common Stock
and Administrator of the Procter
& Gamble Direct Stock Purchase
Plan. Registered shareholders and
Plan participants needing account
assistance with share transfers,
plan purchases/sales, lost stock
certificates, etc., should contact
EQ Shareowner Services at:

Website shareowneronline.com

Email shareowneronline.com
Click Email under the Contact Us
section.

Phone Mon–Fri, 7 a.m.–7 p.m., CST
1-800-742-6253 or 1-651-450-4064

P&G Direct Stock
Purchase Plan

The Procter & Gamble Direct Stock
Purchase Plan (DSPP) is a direct
stock purchase and dividend
reinvestment plan. The DSPP is open
to current P&G shareholders as well
as new investors and is designed to
encourage long-term investment
in P&G by providing a convenient
and economical way to purchase
P&G stock and reinvest dividends.
Highlights of the plan include:

• Minimum initial investment — $250

• Twice-weekly purchases

• 24/7 online account access

• Optional cash investment —

minimum $50

• Administered by EQ
Shareowner Services

For complete information on
the DSPP, please read the Plan
Prospectus. The Prospectus and
online Plan Application are available
at shareowneronline.com or by
contacting EQ Shareowner Services.

P&G shares can also be purchased
through any financial institution
that offers stock purchase services
for shares traded on the New York
Stock Exchange.

Transfer Agent

EQ Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120-4100

Registrar

EQ Shareowner Services
P.O. Box 64874
St. Paul, MN 55164-0874

Exchange Listings

New York Stock Exchange

Corporate Headquarters

The Procter & Gamble Company
1 P&G Plaza
Cincinnati, OH 45202-3315

Annual Meeting

The next annual meeting of
shareholders will be held on Tuesday,
October 10, 2023. A full transcript of
the meeting will be available from
P&G’s Assistant Secretary, who can
be reached at 1 P&G Plaza, Cincinnati,
OH 45202-3315.

Form 10-K

Shareholders may obtain a copy of
P&G’s 2023 report to the Securities
and Exchange Commission on Form
10-K at no charge at pginvestor.com.

The most recent certifications
by our Chief Executive and Chief
Financial Officers pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
are filed as exhibits to our Form 10-K
for the fiscal year ended June 30,
2023. We have also filed with the
New York Stock Exchange the most
recent Annual CEO certification as
required by Section 303A.12(a) of the
New York Stock Exchange Listed
Company Manual.

70 • The Procter & Gamble Company

Measures Not Defined by U.S. GAAP

The following provides definitions of the non-GAAP measures used in Procter & Gamble’s 2023 Annual Report and the
reconciliation to the most closely related GAAP measure. We believe that these measures provide useful perspective on
underlying business trends (i.e., trends excluding non-recurring or unusual items) and results and provide a supplemental
measure of year-on-year results. The non-GAAP measures described below are used by management in making operating
decisions, allocating financial resources and for business strategy purposes. These measures may be useful to investors,
as they provide supplemental information about business performance and provide investors a view of our business
results through the eyes of management. These measures are also used to evaluate senior management and are a factor
in determining their at-risk compensation. These non-GAAP measures are not intended to be considered by the user
in place of the related GAAP measure, but rather as supplemental information to our business results. These non-GAAP
measures may not be the same as similar measures used by other companies due to possible differences in method
and in the items or events being adjusted.

Organic sales growth. Organic sales growth is a non-
GAAP measure of sales growth excluding the impacts of
the July 1, 2018, adoption of the new accounting standard
for “Revenue from Contracts with Customers,” 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 the 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 resulting from
the U.S. Tax Act. Adjusted free cash flow represents the
cash that the Company is able to generate after taking
into account planned maintenance and asset expansion.
We view 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.

The following tables provide a numerical reconciliation
of organic sales growth to reported net sales growth:

2023

2022

2021

2020

2019

Net Sales
Growth

Foreign
Exchange
Impact

Acquisition
& Divestiture
Impact/Other 1

Organic Sales
Growth

(1)%

–%

(1)%

–%

(1) Acquisitions & Divestitures Impact/Other includes the volume and mix

impact of acquisitions and divestitures, the impact from the July 1, 2018,

adoption of the new accounting standard for “Revenue from Contracts

with Customers” and rounding impacts necessary to reconcile net sales

to organic sales.

($ millions)

Operating
Cash Flow

Capital
Spending

Adjustments2

Adjusted
Free Cash
Flow

FY 2023

$16,848

$(3,062)

$225

$14,011

(2) Adjustments relate to tax payments for the transitional tax resulting from

the U.S. Tax Act.

Adjusted free cash flow productivity. Adjusted free
cash flow productivity is defined as the ratio of adjusted
free cash flow to net earnings. We view 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, in allocating financial resources and
for budget planning purposes. This measure is used in
assessing the achievement of management goals for
at-risk compensation.

($ millions)

Adjusted Free
Cash Flow

Net
Earnings

Adjusted Free
Cash Flow
Productivity

FY 2023

$14,011

$14,738

95%

The Procter & Gamble Company • 71

Core EPS. Core EPS is a measure of the Company’s diluted
net earnings per common share excluding items that are
not judged by management to be part of the Company’s
sustainable results or trends. Management views this
non-GAAP measure as a useful supplemental measure
of Company performance over time. This measure is
also used in assessing the achievement of management
goals for at-risk compensation. The table below provides
a reconciliation of diluted net earnings per share to Core
EPS, including the following reconciling items.

Charges for early debt extinguishment: During fiscal years
2021 and 2018, the Company recorded after-tax charges
due to the early extinguishment of certain long-term
debt. These charges represent the difference between
the reacquisition price and the par value of the
debt extinguished.

Incremental Restructuring: The Company has historically
had an ongoing restructuring program with annual
spending in the range of $250 to $500 million before
tax. Starting in 2012 through fiscal 2020, the Company
had a strategic productivity and cost savings initiative
that resulted in incremental restructuring charges.
The adjustment to Core earnings includes only the
restructuring costs above the normal recurring level
of restructuring costs.

Gain on Dissolution of the PGT Healthcare Partnership:
The Company dissolved our PGT Healthcare partnership,
a venture between the Company and Teva Pharmaceuticals
Industries, Ltd (Teva) in the OTC consumer healthcare
business, during the year ended June 30, 2019. The
transaction was accounted for as a sale of the Teva
portion of the PGT business; the Company recognized
an after-tax gain on the dissolution.

Shave Care Impairment: In fiscal 2019, the Company
recognized a one-time, non-cash, after-tax charge of
$8.0 billion to adjust the carrying value of the Shave
Care reporting unit. This was comprised of a before-
and after-tax impairment charge of $6.8 billion related
to goodwill and an after-tax impairment charge of
$1.2 billion to reduce the carrying value of the Gillette
indefinite-lived intangible asset.

Anti-Dilutive Impacts: The Shave Care impairment
charges caused certain equity instruments that are
normally dilutive (and hence normally assumed converted
or exercised for the purposes of determining diluted
net earnings per common share) to be anti-dilutive.
Accordingly for U.S. GAAP diluted net earnings per
common share, the instruments were not assumed to be
converted or exercised. Specifically, in fiscal 2019, certain of
our outstanding preferred shares and share-based equity
awards were not included in the diluted weighted average
common shares outstanding. As a result of the non-GAAP
Shave Care impairment adjustment, these instruments
were dilutive for non-GAAP earnings per share.

Transitional Impacts of the U.S. Tax Act: The U.S.
government enacted comprehensive tax legislation
commonly referred to as the Tax Cuts and Jobs Act
(the “U.S. Tax Act”) in December 2017. This resulted in
a net charge for the fiscal year 2018. The adjustment
to core earnings includes only this transitional impact.
It does not include the ongoing impacts of the lower
U.S. statutory rate on pre-tax earnings.

We do not view these items to be part of our sustainable
results and their exclusion from Core earnings per
share provides a more comparable measure of year-
on-year results.

Years ended June 30

2023

2022

2021

2020

2019

2018

Diluted net earnings per common share

$5.90

$5.81

$5.50

$4.96

$1.43

$3.67

Early debt extinguishment charges

Incremental restructuring charges

Gain on dissolution of PGT Healthcare partnership

Shave Care impairment

Anti-dilutive impacts

Transitional impacts of the U.S. Tax Act

Core EPS

Core EPS growth vs. prior year

Currency Impact to Earnings

Currency neutral Core EPS

Currency neutral Core EPS growth

2018–2023 Core EPS growth

–

$0.16

–

$0.09

–

$0.16

$0.13

$0.23

–

$(0.13)

$3.03

$0.06

–

$0.23

$5.90

$5.81

$5.66

$5.12

$4.52

$4.22

$0.55

$6.45

11%

40%

N/A

72 • The Procter & Gamble Company

Board of Directors

B. Marc Allen

Debra L. Lee

Chair of Leading Women Defined Foundation (nonprofit
education and advocacy organization). Former Chairman
and Chief Executive Officer of BET Networks (media
and entertainment). Director since 2020. Also a Director
of Marriott International, Inc., Burberry Group plc, and
Warner Bros. Discovery. Age 69.

Terry J. Lundgren

Former Executive Chairman, Chairman of the Board and
Chief Executive Officer of Macy’s, Inc. (national retailer).
Director since 2013. Age 71.

Christine M. McCarthy

Strategic Advisor and former Senior Executive Vice
President and Chief Financial Officer of The Walt Disney
Company (global entertainment). Director since 2019.
Age 68.

Jon R. Moeller

Chairman of the Board, President and Chief Executive
Officer of the Company. Director since 2021. Age 59.

Robert J. Portman

Former United States Senator, Director of the U.S. Office
of Management and Budget, and United States Trade
Representative. Director since April 2023. Age 67.

Rajesh Subramaniam

President and Chief Executive Officer of FedEx
Corporation (transportation and business services).
Director since 2022. Also a Director of FedEx. Age 57.

Patricia A. Woertz

Former Chairman of the Board and Chief Executive
Officer of Archer Daniels Midland Company (agricultural
origination and processing). Director since 2008. Age 70.

Chief Strategy Officer and Senior Vice President of
Strategy and Corporate Development at The Boeing
Company (aerospace, commercial jetliners, and military
defense systems). Director since 2021. Age 50.

Sheila Bonini

Senior Vice President of Private Sector Engagement at
the World Wildlife Fund (nonprofit wildlife conservation
organization). Director since April 2023. Age 59.

Angela F. Braly

Former Chair of the Board, President and Chief Executive
Officer of WellPoint, Inc. (healthcare insurance), now
known as Elevance Health. Director since 2009. Also
a Director of Brookfield Corporation and ExxonMobil
Corporation. Age 62.

Amy L. Chang

Former Executive Vice President at Cisco Systems,
Inc. (networking technology). Founder and former
Chief Executive Officer of Accompany, Inc. (relationship
intelligence). Director since 2017. Also a Director of
The Walt Disney Company. Age 46.

Joseph Jimenez

Co-Founder and Managing Director of Aditum Bio
(a biotech venture fund). Former Chief Executive Officer
of Novartis AG (global healthcare). Director since 2018.
Also a Director of General Motors, Graphite Bio, Inc.
and Century Therapeutics, Inc. Age 63. Independent
Lead Director.

Christopher Kempczinski

President and Chief Executive Officer of McDonald’s
Corporation (restaurant operator and franchisor).
Director since 2021. Also a Director of McDonald’s.
Age 54.

The Board of Directors Has Four Committees:

• Audit
• Compensation & Leadership Development
• Governance & Public Responsibility
• Innovation & Technology

The Procter & Gamble Company • 73

Company Leadership

Jon R. Moeller

Chairman of the Board, President and Chief Executive Officer

Shailesh G. Jejurikar

Chief Operating Officer

Gary Coombe

Ma. Fatima D. Francisco

Sundar G. Raman

Chief Executive Officer – Grooming
Executive Sponsor – Corporate
Wellbeing

Chief Executive Officer – Baby,
Feminine and Family Care
Executive Sponsor – Gender Equality

Chief Executive Officer –
Fabric & Home Care

Jennifer Davis

Chief Executive Officer –
Health Care

R. Alexandra Keith

Chief Executive Officer – Beauty
Executive Sponsor – Corporate
Sustainability

Andre Schulten

Chief Financial Officer

Hesham Tohamy
Abd El Hak

President – Feminine Care

Victor Aguilar

Chief Research, Development
and Innovation Officer

Juliana Azevedo

President – Latin America

Laura Becker

Paul Gama

Luc Reynaert

President – Personal Health Care

Chief Product Supply Officer

Virginie Helias

Chief Sustainability Officer

Damon Jones

Mindy Sherwood

President – Global Walmart
and Chief Sales Officer

Chief Communications Officer

Kirti Singh

Shelly McNamara

Chief Equality & Inclusion Officer

Chief Analytics and Insights Officer

Markus Strobel

President – Skin & Personal Care

President – Global Business Services

Ken Patel

Eric Breissinger

President – Family Care

Vittorio Cretella

Chief Information Officer

Philip J. Duncan

Chief Design Officer

Christophe Duron

President – Go-To-Market,
China, and Market Operations,
Hong Kong and Taiwan

Chief Ethics & Compliance Officer
and Chief Patent Counsel

Loïc Tassel

President – Europe

Guy Persaud

Monica Turner

President – New Business

President – North America

Matthew S. Price

President – Home Care and
P&G Professional

Stanislav Vecera

President – Asia Pacific,
Middle East and Africa

Marc S. Pritchard

Chief Brand Officer

Susan Street Whaley

Chief Legal Officer and Secretary

Bala Purushothaman

Jasmine Xu

Chief Human Resources Officer

President – Greater China

As of August 4, 2023

Visit us at us.pg.com/leadership-team to learn more about P&G’s global leaders.

74 • The Procter & Gamble Company

Recognitions and Awards

P&G’s dedication to superiority allows us to serve the world’s consumers better and create
shareholder value in the process. These recognitions demonstrate our impact as a force
for growth and a force for good.

Brands
& Innovation

Community
Impact

Equality
& Inclusion

Environmental
Sustainability

Ethics & Corporate
Responsibility

DiversityInc Top Companies
for Board of Directors

DiversityInc Top Companies
for Mentoring

2022 Circana New Products Pacesetter Report:
7 of the Top 25 non-food product launches

3BL Media 100 Best
Corporate Citizens of 2022

Barron’s Most Sustainable

Forbes 2023 America’s Best

Companies 2023

Employers For Diversity

Fortune 2023 America’s

Fortune 2023 World’s

Newsweek Most Trustworthy

Most Innovative Companies

Most Admired Companies

Companies in America 2023

Score of 100 for 3rd consecutive year

The paper utilized in the printing of this annual report is certified to the

Logos are property of their respective

FSC® Standards, which promotes environmentally appropriate, socially

owners; used with permission.

beneficial and economically viable management of the world’s forests.

Design: Madison Design

P&G’s Portfolio

Ten Categories Organized
in Five Operating Sectors

P&G has a focused portfolio of daily-

use products in categories where

performance plays a significant role in

brand choice. Our focus is on delivering

superior products with the best

performance, in every price tier in

which we compete.

H E A LTH C A R E

Personal Health Care

Oral Care

FA B R IC A N D H O M E C A R E

Fabric Care

Home Care

B E AUT Y

G ROO M I N G

Skin & Personal Care

Hair Care

Grooming

BA BY, F E M I N I N E A N D FA M I LY C A R E

Baby Care

Feminine Care

Family Care

Explore the digital version of
the P&G 2023 Annual Report
at pg.com/annualreport2023