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Item 2. Management’s Discussion and Analysis

2024-04-19 compared with 2024-01-23 · 193 added, 195 removed, 457 unchanged (46% of the section changed)

34 unchanged sentences

The MD&A is organized in the following sections:

• Summary of Results – Six Months Ended December 31, 2023

• Summary of Results – Nine Months Ended March 31, 2024

• Economic Conditions and Uncertainties

• Results of Operations – Three and Six Months Ended December 31, 2023

• Segment Results – Three and Six Months Ended December 31, 2023

• Results of Operations – Three and Nine Months Ended March 31, 2024

• Segment Results – Three and Nine Months Ended March 31, 2024

• Liquidity and Capital Resources

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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).

The following table provides the percentage of net sales and net earnings by reportable business segment (excluding Corporate) for the three and six months ended December 31, 2023:

Three Months Ended December 31, 2023 Six Months Ended December 31, 2023

The following table provides the percentage of net sales and net earnings by reportable business segment (excluding Corporate) for the three and nine months ended March 31, 2024:

Three Months Ended March 31, 2024 Nine Months Ended March 31, 2024

Net Sales Net Earnings Net Sales Net Earnings

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For a more detailed discussion of the Gillette impairment, refer to Note 4 to the Consolidated Financial Statements.

SUMMARY OF RESULTS – Six Months Ended December 31, 2023

The following are highlights of results for the six months ended December 31, 2023, versus the six months ended December 31, 2022:

SUMMARY OF RESULTS – Nine Months Ended March 31, 2024

The following are highlights of results for the nine months ended March 31, 2024, versus the nine months ended March 31, 2023:

• Net sales increased 3% to $63.5 billion versus the prior year period.

Net sales increased high single digits in Health Care and Fabric & Home Care, mid-single digits in Grooming and low single digits in Baby, Feminine & Family Care and Beauty.

Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange, also increased 5%.

Organic sales increased high single digits in Grooming and Fabric & Home Care, mid-single digits in Health Care and Baby, Feminine & Family Care and low single digits in Beauty.

Net sales increased mid-single digits in Health Care, Fabric & Home Care and Grooming and low single digits in Beauty and Baby, Feminine & Family Care.

Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange, increased 4%.

Organic sales increased high single digits in Grooming, mid-single digits in Fabric & Home Care and Health Care and low single digits in Baby, Feminine & Family Care and Beauty.

• Net earnings were $11.8 billion, an increase of $484 million, or 4%, versus the prior year period due to the increase in net sales, partially offset by the non-cash impairment charge of $1.0 billion after taxes related to the Gillette intangible asset.

49 unchanged sentences

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 December 31, 2023.

Net assets of our Ukraine business accounted for less than 1% of consolidated net assets as of March 31, 2024.

Our Russia business includes two manufacturing sites.

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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 December 31, 2023.

Net assets of our Russia business accounted for less than 2% of consolidated net assets as of March 31, 2024.

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.

6 unchanged sentences

18 The Procter & Gamble Company

RESULTS OF OPERATIONS – Three Months Ended December 31, 2023

The following discussion provides a review of results for the three months ended December 31, 2023, versus the three months ended December 31, 2022.

Three Months Ended December 31

RESULTS OF OPERATIONS – Three Months Ended March 31, 2024

The following discussion provides a review of results for the three months ended March 31, 2024, versus the three months ended March 31, 2023.

Three Months Ended March 31

Amounts in millions, except per share amounts 2024 2023 % Chg

6 unchanged sentences

Core net earnings per common share 1.52 1.37 11%

Three Months Ended December 31

Three Months Ended March 31

COMPARISONS AS A PERCENTAGE OF NET SALES 2024 2023 Basis Pt Chg

6 unchanged sentences

Net sales for the quarter increased 1% to $20.2 billion.

The increase in net sales was due to higher pricing of 4%, partially offset by unfavorable foreign exchange of 1%.

Unit volume and mix were unchanged.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 4% while organic volume declined by 1%.

The increase in net sales was due to increased pricing of 3%, partially offset by unfavorable foreign exchange of 2%.

Unit volume and mix had a neutral impact on net sales growth.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 3%.

The following table summarizes key drivers of the change in net sales by reportable segment:

Net Sales Change Drivers 2024 vs.

2022 (Three Months Ended December 31) (1)

2023 (Three Months Ended March 31) (1)

Volume with Acquisitions & Divestitures Volume Excluding Acquisitions & Divestitures Foreign Exchange Price Mix Other (2)

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These impacts were partially offset by:

• a 70 basis-point decline from unfavorable foreign exchange impacts,

• 20 basis points of product and packaging investments and

• 20 basis points of rounding and other impacts.

• a 100 basis-point decline from unfavorable product mix including the decline of the super-premium SK-II brand,

• a 90 basis-point decline from unfavorable foreign exchange impacts and

• 30 basis points of product and packaging investments.

The Procter & Gamble Company 19

Total SG&A spending increased 9% to $5.9 billion versus the prior year period due to increased marketing spending and overhead costs.

SG&A as a percentage of net sales increased 130 basis points to 25.8% due to the increase in marketing spending as a percentage of sales.

SG&A as a percentage of net sales increased 210 basis points to 29.1% due to the increase in marketing and overhead spending as a percentage of net sales.

Marketing spending as a percentage of net sales increased 180 basis points as the increase in marketing spending was partially offset by the positive scale impacts of the net sales increase and productivity savings.

Overhead costs as a percentage of net sales were unchanged as wage inflation, foreign exchange and other cost increases were offset by the positive scale impacts of the net sales increase and productivity savings.

Overhead costs as a percentage of net sales increased 50 basis points as wage inflation, foreign exchange and other cost increases were offset by the positive scale impacts of the net sales increase and productivity savings.

Other operating expenses as a percentage of net sales decreased 20 basis points.

Productivity-driven cost savings delivered 60 basis points of benefit to SG&A as a percentage of net sales.

The Company recorded a non-cash impairment charge of $1.3 billion ($1.0 billion after tax) on the Gillette intangible asset.

The impairment charge arose from a reduction in the estimated fair value of the Gillette indefinite-lived intangible asset due to a higher discount rate, weakening of several currencies relative to the U.S.

dollar and the impact of the limited market portfolio restructuring program focused primarily in certain Enterprise Markets, including Argentina and Nigeria.

For further discussion of the Gillette impairment charge, refer to Note 4 to the Consolidated Financial Statements.

Non-Operating Expenses and Income

1 unchanged sentence

Interest income was $ 104 million for the quarter, an increase of $21 million versus the prior year period due primarily to higher interest rates.

Other non-operating income was $ 177 million, which is an increase of $22 million versus the prior year period.

The effective income tax rate for the three months ended December 31, 2023, was 22.3%, compared to 18.1% for the three months ended December 31, 2022.

The increase in the effective tax rate was primarily driven by 180 basis points due to the net impact of the prior year recognition of operating loss carryforwards and 180 basis points due to unfavorable geographic mix impacts.

Operating income decreased $352 million, or 7%, to $4.4 billion for the quarter, due to the non-cash, before tax impairment charge to the Gillette intangible asset of $1.3 billion and an increase in SG&A spending as a percentage of net sales.

This was partially offset by the increase in net sales, along with the increase in gross margin, all of which are discussed above.

Net earnings decreased $466 million, or 12%, to $3.5 billion due to the decrease in operating income and an increase in the effective tax rate.

Other non-operating income was $ 260 million, which is an increase of $81 million versus the prior year period due to gains from the sale of minor brands.

The effective income tax rate for the three months ended March 31, 2024, was 17.7%, compared to 20.1% for the three months ended March 31, 2023.

The decrease in the effective tax rate was primarily driven by a 160 basis-point decrease from higher excess tax benefits of share-based compensation and decreases from discrete impacts related to uncertain tax positions.

Operating income increased $212 million, or 5%, to $4.5 billion for the quarter, due to the increase in net sales and the increase in operating margin, the components of which are discussed above.

Net earnings increased $357 million, or 10%, to $3.8 billion due to the increase in operating income, increase in non-operating income and a decrease in the effective tax rate.

Foreign exchange had a negative impact of approximately $220 million on net earnings for the quarter, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S.

Net earnings attributable to Procter & Gamble decreased $465 million, or 12%, to $3.5 billion for the quarter.

Diluted EPS decreased 12% to $1.40 versus the prior year period due to the decrease in net earnings.

Core EPS, which represents diluted EPS excluding charges for the Gillette intangible asset impairment and incremental restructuring, increased 16% to $1.84.

RESULTS OF OPERATIONS – Six Months Ended December 31, 2023

The following discussion provides a review of results for the six months ended December 31, 2023, versus the six months ended December 31, 2022.

Six Months Ended December 31

Net earnings attributable to Procter & Gamble increased $357 million, or 11%, to $3.8 billion for the quarter.

Diluted EPS increased 11% to $1.52 versus the prior year period due to the increase in net earnings.

RESULTS OF OPERATIONS – Nine Months Ended March 31, 2024

The following discussion provides a review of results for the nine months ended March 31, 2024, versus the nine months ended March 31, 2023.

Nine Months Ended March 31

Amounts in millions, except per share amounts 2024

6 unchanged sentences

Core net earnings per common share 5.19 4.53 15%

20 The Procter & Gamble Company

Six Months Ended December 31

Nine Months Ended March 31

COMPARISONS AS A PERCENTAGE OF NET SALES 2024

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Net sales for the period increased 3% to $63.5 billion.

The increase in net sales was due to higher pricing of 6%, partially offset by unfavorable foreign exchange of 1% and a 1% decrease in unit volume.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales also increased 5%.

The increase in net sales was due to higher pricing of 5%, partially offset by unfavorable foreign exchange of 1%.

Unit volume and mix were unchanged.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 4%.

20 The Procter & Gamble Company

The following table summarizes key drivers of the change in net sales by reportable segment:

Net Sales Change Drivers 2024 vs.

2022 (Six Months Ended December 31) (1)

2023 (Nine Months Ended March 31) (1)

Volume with Acquisitions & Divestitures Volume Excluding Acquisitions & Divestitures Foreign Exchange Price Mix Other (2)

12 unchanged sentences

• a 220 basis-point increase due to higher pricing,

• 180 basis points of lower commodity costs and

• 180 basis points of manufacturing productivity savings.

• 220 basis points of manufacturing productivity savings and

• 180 basis points of lower commodity costs.

These impacts were partially offset by:

2 unchanged sentences

• 30 basis points of product and packaging investments and

• 10 basis points of decline from loss of manufacturing scale benefits.

Total SG&A spending increased 12% to $11.1 billion versus the prior year period due to increased marketing spending, overhead costs and other operating costs.

SG&A as a percentage of net sales increased 170 basis points to 25.7% due to the increase in marketing spending, overhead spending and other operating costs as a percentage of sales.

• 30 basis points of one-time manufacturing related costs including capacity startup costs.

Total SG&A spending increased 11% to $17.0 billion versus the prior year period due to increased marketing spending and overhead costs.

SG&A as a percentage of net sales increased 180 basis points to 26.8% due to the increase in marketing spending and overhead spending as a percentage of sales.

Marketing spending as a percentage of net sales increased 150 basis points as the increase in marketing spending was partially offset by the positive scale impacts of the net sales increase and productivity savings.

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Productivity-driven cost savings delivered 80 basis points of benefit to SG&A as a percentage of net sales.

The Company recorded a non-cash impairment charge of $1.3 billion ($1.0 billion after tax) on the Gillette intangible asset.

In the period ended December 31, 2023, the Company recorded a non-cash impairment charge of $1.3 billion ($1.0 billion after tax) on the Gillette intangible asset.

1 unchanged sentence

For further discussion of the Gillette impairment charge, refer to Note 4 to the Consolidated Financial Statements.

The Procter & Gamble Company 21

Non-Operating Expenses and Income

1 unchanged sentence

Interest income was $ 366 million for the period, an increase of $175 million versus the prior year period due primarily to higher interest rates.

Other non-operating income was $ 309 million, which is an increase of $15 million versus the prior year period.

The effective income tax rate for the six months ended December 31, 2023, was 21.8%, compared to 19.4% for the six months ended December 31, 2022.

The increase in the effective tax rate was primarily driven by 90 basis points due to the net impact of the prior year recognition of operating loss carryforwards and 150 basis points due to unfavorable geographic mix impacts.

Other non-operating income was $ 570 million, which is an increase of $97 million versus the prior year period, due primarily to gains from the sale of minor brands and an increase in net non-operating benefits on postretirement plans.

The effective income tax rate for the nine months ended March 31, 2024, was 20.6%, compared to 19.6% for the nine months ended March 31, 2023.

The increase in the effective tax rate was primarily due to the net impacts of the prior year recognition of operating loss carryforwards, partially offset by decreases due to higher excess tax benefits of share-based compensation.

Operating income increased $688 million, or 5%, to $14.7 billion for the period, due to the increase in net sales and the increase in gross margin, the components of which are described above.

These benefits were partially offset by non-cash before tax impairment charges of $1.3 billion related to Gillette intangible asset and an increase in SG&A spending as a percentage of net sales.

These benefits were partially offset by non-cash before tax impairment charges of $1.3 billion related to the Gillette intangible asset and an increase in SG&A spending as a percentage of net sales.

The Procter & Gamble Company 21

Net earnings increased $484 million, or 4%, to $11.8 billion, as the increase in operating income was partially offset by an increase in the effective tax rate.

Foreign exchange had a negative impact of approximately $468 million on net earnings for the period, including both transactional and translational impacts from converting earnings from foreign subsidiaries to U.S.

Net earnings attributable to Procter & Gamble increased $116 million, or 1%, to $8.0 billion for the quarter.

Net earnings attributable to Procter & Gamble increased $473 million, or 4%, to $11.7 billion for the period.

Diluted EPS increased 5% to $4.75 versus the prior year period due to the increase in net earnings and a reduction in the weighted average number of shares outstanding.

Core EPS, which represents diluted EPS excluding charges for incremental restructuring and the impairment of the Gillette intangible asset, increased 15% to $5.19.

SEGMENT RESULTS – Three and Six Months Ended December 31, 2023

SEGMENT RESULTS – Three and Nine Months Ended March 31, 2024

The following discussion provides a review of results by reportable business segment.

Analysis of the results for the three and six months ended December 31, 2023, is provided based on a comparison to the three and six months ended December 31, 2022.

Analysis of the results for the three and nine months ended March 31, 2024, is provided based on a comparison to the three and nine months ended March 31, 2023.

The primary financial measures used to evaluate segment performance are net sales and net earnings.

The table below provides supplemental information on net sales, earnings before income taxes and net earnings by reportable business segment for the three and six months ended December 31, 2023, versus the comparable prior year period (dollar amounts in millions):

Three Months Ended December 31, 2023

The table below provides supplemental information on net sales, earnings before income taxes and net earnings by reportable business segment for the three and nine months ended March 31, 2024, versus the comparable prior year period (dollar amounts in millions):

Three Months Ended March 31, 2024

Net Sales % Change Versus Year Ago Earnings/(Loss) Before Income Taxes % Change Versus Year Ago Net Earnings/(Loss) % Change Versus Year Ago

6 unchanged sentences

Total Company $ 20,195 1 % $ 4,592 7 % $ 3,781 10 %

Six Months Ended December 31, 2023

Nine Months Ended March 31, 2024

Net Sales % Change Versus Year Ago Earnings/(Loss) Before Income Taxes % Change Versus Year Ago Net Earnings/(Loss) % Change Versus Year Ago

6 unchanged sentences

Total Company $ 63,507 3 % $ 14,891 5 % $ 11,830 4 %

22 The Procter & Gamble Company

Three months ended December 31, 2023, compared with three months ended December 31, 2022

Beauty net sales increased 1% to $3.8 billion as the positive impacts of higher pricing of 4% and a benefit from acquisitions of 1% were partially offset by the negative impacts of unfavorable foreign exchange of 1% and unfavorable mix of 3% (due primarily to the decline of the super-premium SK-II brand, which has higher than segment-average selling prices).

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales also increased 1%.

Global market share of the Beauty segment increased 0.2 points.

• Hair Care net sales increased double digits.

Positive impacts of higher pricing (driven by Latin America, Europe and North America), a benefit from acquisitions, favorable product mix (due to the growth of premium products) and an increase in unit volume were partially offset by negative impacts of unfavorable foreign exchange.

The volume increase was driven by growth in North America (due to innovation), Asia Pacific (due to innovation) and Latin America (due to market growth), partially offset by a decline in Greater China (due to market contraction and distribution footprint changes).

Organic sales increased high single digits driven by more than 30% growth in Latin America, mid-teen increases in Europe and North America, partially offset by a double-digit decline in Greater China.

Three months ended March 31, 2024, compared with three months ended March 31, 2023

Beauty net sales increased 2% to $3.6 billion as the positive impacts of higher pricing of 4%, unit volume increase of 1% and benefit from acquisitions of 1% were partially offset by the negative impacts of unfavorable foreign exchange of 3% and unfavorable mix of 1% (due primarily to the decline of the super-premium SK-II brand, which has higher than segment-average selling prices).

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 3%.

Global market share of the Beauty segment decreased 0.2 points.

• Hair Care net sales increased mid-single digits.

Positive impacts of higher pricing (driven by Argentina, Europe and North America), a benefit from acquisitions and favorable geographic and brand mix (due to growth of the premium Native brand) were partially offset by negative impacts of unfavorable foreign exchange.

Unit volume was unchanged as growth in North America (due to increased marketing support and distribution gains) and Latin America (due to market growth) was offset by a decline in IMEA (due to increased pricing and lower demand in the Middle East).

Organic sales increased high single digits driven by more than 30% growth in Latin America, a double-digit increase in Europe and a high single-digit increase in North America, partially offset by a mid-single-digit decrease in Greater China.

Global market share of the Hair Care category decreased 0.5 points.

• Skin and Personal Care net sales decreased high single digits.

Negative impacts of unfavorable mix (due to the decline of the super-premium SK-II brand, which has higher than category-average selling prices) and a unit volume decrease were partially offset by higher pricing (driven by Greater China).

The volume decrease was driven by a decline in Greater China (due to the decline of the super-premium SK-II brand and market contraction of skin care and personal care), partially offset by growth in North America and Europe (both due to innovation in Personal Care).

Organic sales decreased mid-single digits due to more than 20% declines in Greater China and Asia Pacific, partially offset by a double-digit increase in North America.

• Skin and Personal Care net sales decreased low single digits.

Negative impacts of unfavorable mix (due to the decline of the super-premium SK-II brand, which has higher than category-average selling prices) and unfavorable foreign exchange

22 The Procter & Gamble Company

were partially offset by an increase in unit volume and higher pricing (across all regions).

The volume increase was driven by growth in North America (due to innovation in Personal Care) and Latin America (due to market growth).

Organic sales decreased low single digits due to a 20% decline in Greater China, partially offset by high single-digit growth in North America.

Global market share of the Skin and Personal Care category increased 0.1 points.

1 unchanged sentence

Net earnings margin decreased as an increase in gross margin was more than fully offset by an increase in SG&A as a percentage of net sales and a higher effective tax rate.

The gross margin improvement was driven by increased pricing and productivity savings, partially offset by unfavorable foreign exchange impacts and negative product mix (due to the decline of the super-premium SK-II brand).

The gross margin improvement was driven by increased productivity savings and pricing, partially offset by negative product mix (due to the decline of the super-premium SK-II brand) and unfavorable foreign exchange impacts.

SG&A as a percentage of net sales increased due primarily to an increase in marketing and overhead spending, partially offset by the positive scale effects of the net sales increase.

The higher effective tax rate was driven by unfavorable geographic mix.

Six months ended December 31, 2023, compared with six months ended December 31, 2022

Beauty net sales increased 2% to $7.9 billion, as the positive impacts of higher pricing of 5% and a benefit from acquisitions of 1% were partially offset by the negative impacts of unfavorable foreign exchange of 2% and unfavorable mix of 2% (due primarily to the decline of the super-premium SK-II brand, which has higher than segment-average selling prices).

Nine months ended March 31, 2024, compared with nine months ended March 31, 2023

Beauty net sales increased 2% to $11.5 billion, as the positive impacts of higher pricing of 5% and a unit volume increase of 1% were partially offset by the negative impacts of unfavorable foreign exchange of 2% and unfavorable mix of 2% (due primarily to the decline of the super-premium SK-II brand, which has higher than segment-average selling prices).

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 3%.

1 unchanged sentence

• Hair Care net sales increased high single digits.

Positive impacts of higher pricing (driven by Latin America, Europe and North America), a benefit from acquisitions and favorable product mix (due to the growth of premium products) were partially offset by negative impacts of unfavorable foreign exchange.

Unit volume was unchanged as growth in Latin America and North America were offset by a decline in Greater China (due to market contraction and distribution footprint changes).

Organic sales increased high single digits due to more than 30% growth in Latin America, a mid-teens increase in Europe and a low-teens increase in North America, partially offset by a high single-digit decline in Greater China.

Positive impacts of higher pricing (driven by Latin America, Europe and North America), a benefit from acquisitions and favorable brand mix (due to growth of the premium Native brand) were partially offset by negative impacts of unfavorable foreign exchange.

Unit volume was unchanged as growth in North America (due to innovation) and Latin America (due to market growth) was offset by a decline in Greater China (due to market contraction and distribution footprint changes).

Organic sales increased high single digits due to a more than 30% growth in Latin America, low teens increase in Europe and double-digit increase in North America, partially offset by a high single-digit decline in Greater China.

Global market share of the Hair Care category decreased 0.4 points.

• Skin and Personal Care net sales decreased low single digits.

Negative impacts of unfavorable mix (due to the decline of the super-premium SK-II brand, which has higher than category-average selling prices) and unfavorable foreign exchange were partially offset by the positive impacts of higher pricing (across all regions).

Unit volume was unchanged as growth in North America and Europe (both due to innovation in Personal Care) was offset by a decline in Greater China (due to the decline of the super-premium SK-II brand and market contraction of skin care and personal care).

Organic sales decreased low single digits, due to a more than 20% decline in Asia Pacific and a low-teens decline in Greater China, partially offset by a double-digit increase in North America.

The increase in volume was driven by growth in North America and Europe (both due to innovation in Personal Care), partially offset by a decline in Greater China (due to the decline of the super-premium SK-II brand and market contraction).

Organic sales decreased low single digits, due to a high-teens decline in Asia Pacific and a mid-teens decline in Greater China, partially offset by a double-digit increase in North America.

Global market share of the Skin and Personal Care category increased 0.3 points.

2 unchanged sentences

The gross margin improvement was driven by increased pricing and productivity savings, partially offset by negative product mix (due to the decline of the super-premium SK-II brand) and unfavorable foreign exchange impacts.

SG&A as a percentage of net sales increased due primarily to an increase in marketing and overhead spending and higher foreign exchange transactional charges, partially offset by the positive scale

The Procter & Gamble Company 23

effects of the net sales increase.

SG&A as a percentage of net sales increased due primarily to an increase in marketing and overhead spending and higher foreign exchange transactional charges, partially offset by the positive scale effects of the net sales increase.

The higher effective tax rate was driven by unfavorable geographic mix.

Three months ended December 31, 2023, compared with three months ended December 31, 2022

Grooming net sales increased 6% to $1.7 billion as the benefits of higher pricing of 7% (driven primarily by Europe and Latin America), a 1% increase in unit volume and favorable product mix of 1% (due to the growth of premium shavers) were partially offset by unfavorable foreign exchange of 3%.

The volume growth was driven primarily by Latin America (due to market growth) and Asia Pacific (due to innovation).

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 9% driven by more than 30% growth in Latin America, low-teens growth in Asia Pacific and double-digit growth in Europe, partially offset by a low single-digit decline in North America.

Three months ended March 31, 2024, compared with three months ended March 31, 2023

Grooming net sales increased 3% to $1.5 billion as the benefits of higher pricing of 10% (driven primarily by Argentina and Europe) and a 2% increase in unit volume were partially offset by unfavorable foreign exchange of 7% and unfavorable product mix of 1% (due to the disproportionate growth of disposables).

The volume growth was driven primarily by Latin America and IMEA (both due to innovation), partially offset by a decline in Greater China (due to market contraction).

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 10% driven by a more than 50% growth in Latin America and double-digit growth in Europe, partially offset by a low single-digit decline in North America.

Global market share of the Grooming segment increased 0.7 points.

Net earnings increased 9% to $440 million due to net sales growth and an 80 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 higher pricing and productivity savings, partially offset by unfavorable foreign exchange.

Net earnings decreased 2% to $303 million as the net sales growth was more than fully offset by a 90 basis-point decrease in net earnings margin.

Net earnings margin decreased as an increase in gross margin was more than fully offset by an increase in SG&A as a percentage of net sales.

The gross margin increase was driven by higher pricing and productivity savings, partially offset by unfavorable foreign exchange and unfavorable mix due to the growth of premium innovation that has lower than segment-average gross margins.

SG&A as a percentage of net sales increased due primarily to an increase in marketing spending, partially offset by the positive scale effects of the net sales increase.

Six months ended December 31, 2023, compared with six months ended December 31, 2022

Grooming net sales increased 6% to $3.5 billion as the benefits of higher pricing of 8% (driven primarily by Europe and Latin America) and favorable product mix of 1% (due to growth of premium shavers) were partially offset by unfavorable foreign exchange of 3% and a 1% decrease in unit volume.

The volume decrease was due to declines in Europe (due to increased pricing) and Greater China (due to market decline), partially offset by growth in Latin America and IMEA (both due to innovation).

Excluding the impact of acquisitions and divestitures and foreign exchange, Grooming organic sales increased 9% due to more than 30% growth in Latin America and double-digit growth in Europe.

The Procter & Gamble Company 23

Nine months ended March 31, 2024, compared with nine months ended March 31, 2023

Grooming net sales increased 5% to $5.0 billion as the benefits of higher pricing of 8% (driven primarily by Latin America and Europe) and favorable product mix (due to growth of premium shavers) of 1% were partially offset by unfavorable foreign exchange of 4%.

Unit volume was unchanged as growth in Latin America and IMEA (both due to innovation) was offset by declines in Europe (due to increased pricing) and Greater China (due to market decline and increased pricing).

Excluding the impact of acquisitions and divestitures and foreign exchange, Grooming organic sales increased 9% due to more than 30% growth in Latin America and double-digit growth in Europe, partially offset by a low single-digit decline in North America.

Global market share of the Grooming segment increased 0.5 points.

Net earnings increased 7% to $862 million, due to net sales growth and a 20 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.

Net earnings increased 4% to $1.2 billion, due to the net sales growth.

Net earnings margin was unchanged as an increase in gross margin was fully offset by an increase in SG&A as a percentage of net sales.

The gross margin increase was driven by higher pricing and productivity savings, partially offset by unfavorable foreign exchange.

SG&A as a percentage of net sales increased due to an increase in marketing spending and higher foreign exchange transactional charges, partially offset by the positive scale effects of the net sales increase.

Three months ended December 31, 2023, compared with three months ended December 31, 2022

Health Care net sales increased 4% to $3.2 billion driven by higher pricing of 5%, favorable product mix of 1% and favorable foreign exchange of 2%, partially offset by a 3% decrease in unit volume.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 2%.

Three months ended March 31, 2024, compared with three months ended March 31, 2023

Health Care net sales increased 2% to $2.9 billion driven by higher pricing of 4% and favorable product mix of 3%, partially offset by a 4% decrease in unit volume and unfavorable foreign exchange of 1%.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales also increased 2%.

Global market share of the Health Care segment increased 0.7 points.

• Oral Care net sales increased mid-single digits driven by the positive impacts of higher pricing (driven by Europe, North America and Latin America), favorable product mix (due to growth of premium paste, which have higher than category-average selling prices) and favorable foreign exchange, partially offset by a decline in unit volume.

The decrease in unit volume was driven primarily by declines in IMEA and Latin America (both due to share losses).

Organic sales increased mid-single digits driven by a double-digit increase in Europe and a mid-single-digit increase in North America.

• Oral Care net sales increased low single digits driven by the positive impacts of favorable product mix (due to growth of power brushes and premium paste, which have higher than category-average selling prices) partially offset by a decline in unit volume and unfavorable foreign exchange impacts.

The decrease in unit volume was driven primarily by declines in Latin America (due to increased pricing and competitive activity), North America and Asia Pacific (both due to share losses).

Organic sales increased mid-single digits driven by a double-digit increase in Europe and a low single-digit increase in North America, partially offset by a double-digit decrease in Asia Pacific.

Global market share of the Oral Care category increased 0.3 points.

• Personal Health Care net sales increased low single digits as the positive impacts of higher pricing (driven by North America, Europe and Latin America) and favorable foreign exchange were partially offset by a unit volume decrease and unfavorable mix (due to the decline of respiratory products, which have higher than category-average selling prices).

The volume decrease was driven primarily by declines in Europe and Latin America (both due to market decline of respiratory products).

Organic sales decreased low single digits driven by a double-digit decline in Europe, a mid-single-digit decline in Latin America, partially offset by low single-digit growth in North America.

• Personal Health Care net sales were unchanged as the positive impacts of higher pricing (driven by Argentina and North America) were fully offset by a decrease in unit volume, unfavorable foreign exchange and unfavorable product mix (due to the decline of respiratory products, which have higher than category-average selling prices).

The volume decrease was driven primarily by declines in IMEA (due to distribution rationalization), North America (due to market decline of respiratory products) and Latin America (due to market contraction).

Organic sales increased low single digits driven by mid-single-digit growth in Latin America and low single-digit growth in North America, partially offset by a high single-digit decline in IMEA.

Global market share of the Personal Health Care category increased 0.8 points.

Net earnings increased 5% to $719 million due to the net sales growth and a 20 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 higher pricing and productivity savings, partially offset by unfavorable gross margin product mix (due to a decline in respiratory products, which have higher than segment-average gross margins).

SG&A as a percentage of net sales increased due to increased marketing and overhead spending, partially offset by the positive scale impacts of the net sales increase.

Six months ended December 31, 2023, compared with six months ended December 31, 2022

Health Care net sales increased 8% to $6.2 billion driven by higher pricing of 5%, favorable product mix of 2% and favorable foreign exchange of 2%, partially offset by a 1% decrease in unit volume.

Excluding the impact of acquisitions and divestitures

24 The Procter & Gamble Company

and foreign exchange, organic sales increased 6%.

Net earnings were unchanged at $525 million as the net sales growth was fully offset by a 20 basis-point decrease in net earnings margin.

Net earnings margin decreased as an increase in gross margin was more than fully offset by an increase in SG&A as a percentage of net sales and a higher effective tax rate.

The gross margin increase was driven by higher pricing and productivity savings, partially offset by unfavorable product mix (due to a decline in respiratory products, which have higher than segment-average gross margins) and unfavorable foreign exchange.

SG&A as a percentage of net sales increased due to increased marketing and overhead spending, partially offset by the positive scale impacts of the net sales increase and a decrease in other operating costs.

The higher effective tax rate was driven by unfavorable geographic mix.

Nine months ended March 31, 2024, compared with nine months ended March 31, 2023

Health Care net sales increased 6% to $9.1 billion driven by higher pricing of 5%, favorable geographic and product mix of 2% and favorable foreign exchange of 1%, partially offset by a 2% decrease in unit volume.

Excluding the impact of acquisitions and divestitures and foreign exchange, organic sales increased 5%.

Global market share of the Health Care segment increased 0.7 points.

• Oral Care net sales increased high single digits due to the positive impacts of higher pricing (driven by Europe, North America and Latin America), favorable product mix (due to growth of premium paste and power brushes, which have higher than category-average selling prices) and favorable foreign exchange, partially offset by a decrease in unit volume.

The unit volume decrease was due to a decline in Latin America (due to share losses), IMEA and Greater China (due to market contraction) partially offset by growth in Europe (due to market growth).

Organic sales also increased high single digits due to a double-digit increase in Europe and a mid-single-digit increase in North America.

• Oral Care net sales increased mid-single digits due to the positive impacts of favorable product mix (due to growth of premium paste and power brushes, which have higher than category-average selling prices), higher pricing (driven by Europe, North America and Latin America) and favorable foreign exchange, partially offset by a decrease in unit volume.

The unit volume decrease was due to a decline in Latin America (due to share losses) and Asia Pacific (due to increased pricing) partially offset by growth in Europe (due to market growth).

Organic sales also increased mid-single digits due to a double-digit increase in Europe and a mid-single-digit increase in North America.

Global market share of the Oral Care category increased 0.3 points.

• Personal Health Care net sales increased high single digits due to the positive impacts of higher pricing (driven by North America, Europe and Latin America) and favorable foreign exchange, partially offset by unfavorable mix (due to the decline of respiratory products, that have higher than category-average selling prices).

Unit volume was unchanged as growth in North America (due to innovation) was offset by declines in Asia Pacific and Latin America (both due to market contraction).

Organic sales increased mid-single digits due to high single-digit growth in North America and mid-single-digit growth in Europe.

• Personal Health Care net sales increased mid-single digits due to the positive impacts of higher pricing (driven by North America, Latin America and Europe) and favorable foreign exchange, partially offset by a decline in unit volume and unfavorable mix (due to the decline of respiratory products, that have higher than category-average selling prices).

The decline in unit volume was driven by declines in IMEA, Asia Pacific and Latin America (all due to market contraction

24 The Procter & Gamble Company

including lower cough and cold incidence), partially offset by growth in North America (due to innovation).

Organic sales increased mid-single digits due to mid-single-digit growth in North America and low single-digit growth in Europe.

Global market share of the Personal Health Care category increased 0.8 points.

Net earnings increased 6% to $1.9 billion due to the increase in net sales.

Net earnings margin was unchanged as an increase in gross margin was offset by an increase in SG&A as a percentage of net sales.

The gross margin increase was driven by higher pricing and productivity savings, partially offset by unfavorable gross margin product mix (due to a decline in respiratory and whitening products, both of which have higher than segment-average gross margins).

Net earnings margin was unchanged as an increase in gross margin was offset by an increase in SG&A as a percentage of net sales and a higher effective tax rate.

The gross margin increase was driven by higher pricing and productivity savings, partially offset by unfavorable product mix (due to a decline in respiratory and whitening products, both of which have higher than segment-average gross margins).

SG&A as a percentage of net sales increased due to increased marketing and overhead spending, partially offset by the positive scale impacts of the net sales increase.

The higher effective tax rate was driven by unfavorable geographic mix.

Fabric & Home Care

Three months ended December 31, 2023, compared with three months ended December 31, 2022

Fabric & Home Care net sales increased 5% to $7.4 billion driven by higher pricing of 4% and favorable product mix of 1%.

Unit volume remained unchanged.

Three months ended March 31, 2024, compared with three months ended March 31, 2023

Fabric & Home Care net sales increased 2% to $7.2 billion driven by higher pricing of 2% and a unit volume increase of 1%, partially offset by unfavorable foreign exchange of 1%.

Excluding the impact of foreign exchange and acquisitions and divestitures, organic sales increased 3%.

Global market share of the Fabric & Home Care segment increased 0.3 points.

• Fabric Care net sales increased mid-single digits due to the positive impacts of higher pricing (driven by Europe, Asia Pacific and Latin America) and favorable premium product mix.

Volume was unchanged as growth in North America was fully offset by declines in Greater China (due to market contraction and portfolio rationalization), Asia Pacific (due to share losses) and IMEA (due to increased pricing).

Organic sales increased mid-single digits driven by a high single-digit increase in Europe and a mid-single-digit increase in North America.

Global market share of the Fabric & Home Care segment decreased 0.1 points.

• Fabric Care net sales were unchanged as the positive impacts of higher pricing (driven primarily by Asia Pacific and Europe, partially offset by increased trade spending in North America) and favorable geographic mix were partially offset by unfavorable foreign exchange.

Volume was unchanged as growth in North America was fully offset by declines in Asia Pacific (due to share losses) and IMEA (due to lower demand in the Middle East and increased pricing).

Organic sales increased low single digits driven by a mid-single-digit increase in North America and a high single-digit increase in Europe, partially offset by a double-digit decrease in IMEA.

Global market share of the Fabric Care category decreased 0.5 points.

• Home Care net sales increased high single digits.

Positive impacts of higher pricing (driven primarily by Europe and Latin America), a unit volume increase and favorable premium product mix were partially offset by unfavorable foreign exchange.

The increase in unit volume was due primarily to growth in North America (due to innovation), partially offset by decline in Asia Pacific (due to increased pricing).

Organic sales increased high single digits driven by low-teens growth in Europe and high single-digit growth in North America.

• Home Care net sales increased mid-single digits.

Positive impacts of a unit volume increase, higher pricing (driven primarily by Europe) and favorable premium product mix were partially offset by unfavorable foreign exchange.

The increase in unit volume was due primarily to growth in North America (due to innovation) and Europe (due to increased marketing support), partially offset by a decline in Latin America (due to increased pricing).

Organic sales increased high single digits driven by high single-digit growth in North America and mid-teens growth in Europe.

Global market share of the Home Care category increased 0.5 points.

1 unchanged sentence

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 productivity savings, higher pricing and lower commodity costs.

The gross margin increase was driven by increased productivity savings, lower commodity costs and higher pricing, partially offset by unfavorable mix due to the growth of premium products that have lower than segment-average gross margins.

SG&A as a percentage of net sales increased due to an increase in marketing spending, partially offset by the positive scale effects of the net sales increase.

Six months ended December 31, 2023, compared with six months ended December 31, 2022

Nine months ended March 31, 2024, compared with nine months ended March 31, 2023

Fabric & Home Care net sales increased 5% to $22.2 billion driven by higher pricing of 4% and favorable product mix of 1%, partially offset by unfavorable foreign exchange of 1%.

2 unchanged sentences

Global market share of the Fabric & Home Care segment increased 0.2 points.

• Fabric Care net sales increased mid-single digits driven by the positive impacts of higher pricing (driven by Europe, Latin America, IMEA and Asia Pacific) and favorable premium product mix.

Unit volume was unchanged as growth in North America (due to market growth) was offset by declines in Greater China (due to market contraction and portfolio rationalization) and Asia Pacific (due to increased pricing).

Organic sales also increased mid-single digits driven by a low-teens increase in Europe and a mid-single-digit increase in North America.

• Fabric Care net sales increased mid-single digits driven by the positive impacts of higher pricing (driven by Europe, Asia Pacific and Latin America) and favorable geographic mix.

Unit volume was unchanged as growth in North America (due to market growth) was offset by declines in Asia Pacific (due to increased pricing) and Greater China (due to market contraction and portfolio rationalization).

Organic sales also increased mid-single digits driven by a double-digit increase in Europe and a mid-single-digit increase in North America.

Global market share of the Fabric Care category decreased 0.3 points.

• Home Care net sales increased double digits.

Positive impacts of higher pricing (driven primarily by Europe, North America and Latin America), favorable premium product mix and a unit volume increase were partially offset by

The Procter & Gamble Company 25

unfavorable foreign exchange.

The increase in volume was due to growth in North America (due to innovation), partially offset by declines in Europe and Latin America (both due to increased pricing).

Organic sales increased double digits driven by mid-teens growth in Europe and double-digit growth in North America.

• Home Care net sales increased high single digits.

Positive impacts of higher pricing (driven primarily by Europe, North America and Latin America), favorable premium product mix and a unit volume increase were partially offset by unfavorable foreign exchange.

The increase in volume was due to growth in North America (due to innovation), partially offset by decline in Latin America (due to increased pricing).

Organic sales increased double digits driven by mid-teens growth in Europe and high single-digit growth in North America.

Global market share of the Home Care category increased 0.9 points.

3 unchanged sentences

SG&A as a percentage of net sales increased due to an increase in marketing spending, partially offset by the positive scale effects of the net sales increase.

The Procter & Gamble Company 25

Baby, Feminine & Family Care

Three months ended December 31, 2023, compared with three months ended December 31, 2022

Baby, Feminine & Family Care net sales increased 2% to $5.1 billion driven by higher pricing of 4% and favorable product mix of 1%, partially offset by a 2% decrease in unit volume and unfavorable foreign exchange of 1%.

Excluding the impacts of foreign exchange and acquisitions and divestitures, organic sales increased 3%.

Three months ended March 31, 2024, compared with three months ended March 31, 2023

Baby, Feminine & Family Care net sales decreased 2% to $4.9 billion due to a 3% decrease in unit volume and unfavorable foreign exchange of 2% partially offset by higher pricing of 2% and favorable mix of 1%.

Excluding the impacts of foreign exchange and acquisitions and divestitures, organic sales were unchanged.

Global market share of the Baby, Feminine & Family Care segment decreased 0.1 points.

• Baby Care net sales decreased low single digits.

Positive impacts of higher pricing (driven by Latin America, Europe, IMEA and North America) and favorable product mix (due to growth of premium diapers, which have higher than category-average selling prices) were partially offset by a decrease in unit volume and unfavorable foreign exchange.

Volumes decreased in all regions led by Europe, IMEA and North America, all due to increased pricing.

Organic sales were unchanged as mid-teens growth in Latin America was offset by mid-single-digit declines in IMEA and Europe.

• Baby Care net sales decreased high single digits.

Negative impacts of a decrease in unit volume and unfavorable foreign exchange were partially offset by higher pricing (primarily driven by Argentina) and favorable product mix (due to a higher proportion of premium diapers, which have higher than category-average selling prices).

The unit volume decline was due primarily to Europe (due to higher pricing), North America (due to market decline and competitive activity) and IMEA (due to lower demand in the Middle East and increased pricing).

Organic sales decreased mid-single digits as a high single-digit decline in Europe and mid-single-digit decline in North America were partially offset by a more than 20% growth in Latin America.

Global market share of the Baby Care category decreased 0.2 points.

• Feminine Care net sales increased low single digits.

Positive impacts of higher pricing (driven primarily by Europe, Latin America and IMEA) and favorable mix (due to growth of premium products) were partially offset by a decrease in unit volume and unfavorable foreign exchange.

The volume decrease was primarily driven by declines in Europe, IMEA (both due to increased pricing) and Greater China (due to market decline).

Organic sales increased mid-single digits driven by a mid-single-digit increase in Europe and a low single-digit increase in North America.

Global market share of the Feminine Care category increased 0.1 points.

• Net sales in Family Care, which is predominantly a North America business, increased mid-single digits driven by an increase in unit volume and higher pricing, partially offset by unfavorable product mix (due to growth of larger pack sizes, with lower than category-average selling prices).

Organic sales also increased mid-single digits.

Positive impacts of higher pricing (driven primarily by Europe) and favorable mix (due to growth of premium products) were partially offset by a decrease in unit volume and unfavorable foreign exchange.

The volume decrease was primarily driven by declines in Europe and Latin America (both due to increased pricing).

Organic sales increased low single digits driven by an approximately 20% increase in Latin America and a low single-digit increase in Europe.

Global market share of the Feminine Care category was unchanged.

• Net sales in Family Care, which is predominantly a North America business, increased low single digits driven by an increase in unit volume, partially offset by unfavorable product mix (due to growth of larger pack sizes with lower than category-average selling prices).

Organic sales also increased low single digits.

North America market share of the Family Care category decreased 0.1 points.

Net earnings increased 30% to $1.1 billion due to the increase in net sales and a 460 basis-point increase in net earnings margin.

Net earnings increased 8% to $997 million as the decrease in net sales was more than fully offset by a 190 basis-point increase in net earnings margin.

Net earnings margin increased primarily due to an increase in gross margin, partially offset by an increase in SG&A as a percentage of net sales.

Gross margin increased primarily due to lower commodity costs, increased productivity savings and increased pricing, partially offset by unfavorable foreign exchange.

SG&A as a percentage of net sales increased due to an increase in marketing and overhead spending, partially offset by the positive scale impacts of the net sales increase.

Six months ended December 31, 2023, compared with six months ended December 31, 2022

Gross margin increased primarily due to increased productivity savings, lower commodity costs and increased pricing, partially offset by unfavorable foreign exchange.

SG&A as a percentage of net sales increased due to an increase in marketing and overhead spending.

Nine months ended March 31, 2024, compared with nine months ended March 31, 2023

Baby, Feminine & Family Care net sales increased 1% to $15.3 billion driven by higher pricing of 5% and favorable product mix of 1%, partially offset by a 3% decrease in unit volume and unfavorable foreign exchange of 2%.

1 unchanged sentence

Global market share of the Baby, Feminine & Family Care segment decreased 0.1 points.

• Baby Care net sales increased low single digits.

Positive impacts of higher pricing (driven by Europe, Latin America, North America and IMEA) and favorable product mix (due to growth of premium diapers, which have higher than category-average selling prices) were partially offset by a decrease in unit volume and unfavorable foreign exchange.

Volumes decreased in all regions led by Europe and North America, all due to increased pricing.

Organic sales increased low single digits driven by more than 20% growth in Latin America, mid-single-digit growth in IMEA and low single-digit growth in North America.

• 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 (driven primarily by Latin America and Europe) and favorable product mix (due to growth of premium diapers, which have higher than category-average selling prices).

Volumes decreased in all regions led by Europe and North America, due to increased pricing and competitive activity.

Organic sales increased low single digits driven by more than 20% growth in Latin America, partially offset by a mid-single-digit decline in Europe.

Global market share of the Baby Care category decreased 0.2 points.

• Feminine Care net sales increased mid-single digits.

• Feminine Care net sales increased low single digits.

Positive impacts of higher pricing (driven primarily by Europe, IMEA and Latin America) and favorable mix (due to growth of premium products) were partially offset by a decrease in unit volume and unfavorable foreign exchange.

The volume decrease was driven primarily by declines in Europe and IMEA (both due to increased pricing) and Greater China (due to market decline), partially offset by growth in North America (due to increased demand for premium products and distribution gains).

Organic sales increased mid-single digits driven by a double-digit increase in IMEA, high single-digit increase in Europe and mid-single-digit increase in North America.

The volume decrease was driven primarily by declines in Europe and IMEA (both due to increased pricing), partially offset by growth in North America (due to increased marketing support and distribution gains).

Organic sales increased mid-single digits driven by high single-digit increases in Europe and IMEA and a mid-single-digit increase in North America.

Global market share of the Feminine Care category increased 0.3 points.

26 The Procter & Gamble Company

• Net sales in Family Care, which is predominantly a North America business, increased mid-single digits driven by higher pricing and unit volume increase, partially offset by unfavorable product mix (due to growth of larger pack sizes, with lower than category-average selling prices).

• Net sales in Family Care, which is predominantly a North America business, increased mid-single digits driven by higher pricing and a unit volume increase, partially offset by unfavorable product mix (due to growth of larger pack sizes with lower than category-average selling prices).

Organic sales also increased mid-single digits.

3 unchanged sentences

Gross margin increased primarily due to lower commodity costs, increased pricing and increased productivity savings, partially offset by unfavorable foreign exchange.

SG&A as a percentage of net sales increased due to an increase in marketing and overhead spending and higher foreign exchange transactional charges, partially offset by the positive scale impacts of the net sales increase.

SG&A as a percentage of net sales increased due to an increase in marketing and overhead spending, partially offset by the positive scale impacts of the net sales increase.

26 The Procter & Gamble Company

Corporate includes certain operating and non-operating activities not allocated to specific business segments.

2 unchanged sentences

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.

For the three months ended December 31, 2023, Corporate net sales decreased $49 million to $126 million due to a decrease in net sales of incidental businesses managed at the corporate level.

Corporate net earnings decreased to a loss of $1.2 billion for the quarter due to the impairment of the Gillette intangible asset, increased interest expense and higher restructuring charges.

For the six months ended December 31, 2023, Corporate net sales decreased $158 million to $270 million due to a decrease in net sales of incidental businesses managed at the corporate level.

Corporate net earnings decreased to a loss of $1.4 billion due to the impairment charge of the Gillette intangible asset, increased interest expense and higher restructuring charges.

For the three months ended March 31, 2024, Corporate net sales decreased $45 million to $128 million due to a decrease in net sales of incidental businesses managed at the corporate level.

Corporate net earnings increased $182 million to $68 million for the quarter due to higher current period tax benefits (including excess tax benefits of share-based compensation) and gain from the sale of certain minor brands.

For the nine months ended March 31, 2024, Corporate net sales decreased $203 million to $398 million due to a decrease in net sales of incidental businesses managed at the corporate level.

Corporate net earnings decreased $1.1 billion to a loss of $1.3 billion due primarily to the impairment charge of the Gillette intangible asset.

LIQUIDITY & CAPITAL RESOURCES

1 unchanged sentence

Operating cash flow was $14.1 billion fiscal year to date, an increase of $2.6 billion versus the prior year period.

Net earnings, adjusted for non-cash items (depreciation and amortization, intangible asset impairment, and share-based compensation expense), generated $10.9 billion of operating cash flow.

Working capital and other impacts used $927 million of cash in the period primarily driven by an increase in accounts receivable from sales growth, a reduction in salary related liabilities due to the excess of payment over accruals, and a reduction in postretirement benefit accruals resulting from the net periodic benefit credit and payments.

This is partially offset by the impact of our supplier finance program (see Note 10, Supplier Finance Programs).

Days sales outstanding and Days inventory on hand increased by three days.

Net earnings, adjusted for non-cash items (depreciation and amortization, intangible asset impairment, share-based compensation expense and deferred income taxes), generated $15.5 billion of operating cash flow.

Working capital and other impacts used $1.4 billion of cash in the period primarily driven by an increase in accounts receivable from sales growth, a decrease in trade payables and a decrease in other liabilities.

The decrease in trade payables resulted from reduced commodity costs, partially offset by the impact of our supplier finance program (see Note 10, Supplier Finance Programs).

The decrease in other liabilities is primarily driven by postretirement benefit payments and the net periodic credit from other retiree benefits.

Days sales outstanding increased by two days.

Days inventory on hand increased by three days.

Investing Activities

2 unchanged sentences

Financing activities used $12.4 billion of net cash fiscal year to date, mainly due to dividends to shareholders, treasury stock purchases and a net debt decrease, partially offset by the impact of stock options and other.

As of December 31, 2023, our current liabilities exceeded current assets by $12.8 billion.

As of March 31, 2024, our current liabilities exceeded current assets by $9.9 billion.

We anticipate being able to support our short-term liquidity and operating needs largely through cash generated from operations.

9 unchanged sentences

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.

The Procter & Gamble Company 27

Organic sales growth.

2 unchanged sentences

This measure is used in assessing the achievement of management goals for at-risk compensation.

The Procter & Gamble Company 27

The following table provides a numerical reconciliation of organic sales growth to reported net sales growth:

Three Months Ended December 31, 2023 Net Sales Growth Foreign Exchange Impact Acquisition & Divestiture Impact/Other (1)

Three Months Ended March 31, 2024 Net Sales Growth Foreign Exchange Impact Acquisition & Divestiture Impact/Other (1)

Organic Sales Growth

6 unchanged sentences

(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.

Six Months Ended December 31, 2023 Net Sales Growth Foreign Exchange Impact Acquisition & Divestiture Impact/Other (1)

Nine Months Ended March 31, 2024 Net Sales Growth Foreign Exchange Impact Acquisition & Divestiture Impact/Other (1)

Organic Sales Growth

11 unchanged sentences

The following table provides a numerical reconciliation of adjusted free cash flow ($ millions):

Six Months Ended December 31, 2023

Nine Months Ended March 31, 2024

Operating Cash Flow Capital Spending U.S.

7 unchanged sentences

The following table provides a numerical reconciliation of adjusted free cash flow productivity ($ millions):

Six Months Ended December 31, 2023

Nine Months Ended March 31, 2024

Adjusted Free Cash Flow Net Earnings Adjustments to

4 unchanged sentences

(1) Adjustments to Net Earnings relate to the Gillette intangible asset impairment charge announced in December 2023.

28 The Procter & Gamble Company

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.

2 unchanged sentences

The Core earnings measures included in the following reconciliation tables refer to the equivalent GAAP measures adjusted as applicable for the following items:

28 The Procter & Gamble Company

• Incremental restructuring :

8 unchanged sentences

Reconciliation of Non-GAAP Measures

Three Months Ended December 31, 2023 Three Months Ended December 31, 2022

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Amounts in millions except per share amounts As Reported (GAAP) Incremental Restructuring Intangible Impairment Core

7 unchanged sentences

$ 1.52 $ — $ — $ 1.52 $ 1.37

(1) For the three months ended December 31, 2022, there were no adjustments to or reconciling items for Core EPS.

(1) For the three months ended March 31, 2023, there were no adjustments to or reconciling items for Core EPS.

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

7 unchanged sentences

Reconciliation of Non-GAAP Measures

Six Months Ended December 31, 2023 Six Months Ended December 31, 2022

Nine Months Ended March 31, 2024 Nine Months Ended March 31, 2023

Amounts in millions except per share amounts As Reported (GAAP) Incremental Restructuring Intangible Impairment Core

7 unchanged sentences

$ 4.75 $ 0.02 $ 0.42 $ 5.19 $ 4.53

(1) For the six months ended December 31, 2022, there were no adjustments to or reconciling items for Core EPS.

(1) For the nine months ended March 31, 2023, there were no adjustments to or reconciling items for Core EPS.

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

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis