Paper #1: Analysis of a 10-K Relating to Segment and NCI Reporting & Disclosures 

1. Locate Procter & Gamble SEC 10-K from the SEC website (www.sec.gov). 

2. Explore the concepts of segment and NCI disclosure and reporting using course resources. You must also find and review / read outside literature (to mean more than just the 10-K report) on these subjects and use and reference same in the paper. 

3. Prepare a paper on reporting and disclosure issues related to segment and NCI within a 10-K that must include the following: a. A brief introduction / review of your chosen entity. b. What are the requirements / rules for disclosures in the two areas of segments and NCIs to include the history and development of the specific rules, the specific applicable rule #s, key points etc. of segment and NCI reporting and disclosure requirements. c. Summarize what and how your particular company has disclosed relating to these two items (and only these items), and d. Your thoughts on the effectiveness / overall meaningfulness of your company’s disclosures relating to only segments and NCIs and their disclosure rules for these two areas only

4. Your deliverable is to be three pages in length (~1,000 to 1,800 words), single-spaced, double spacing between paragraphs, one inch margins and a font size of 10 – 12 points. Include a cover page and works cited section. In-text citations of all facts must be included and done per APA standards. The paper is to be uploaded through the assignment folder provided for same using only a single Word document with only “YourName.doc(x)” as the file name. There are to be no active hyperlinks anywhere in the submission. 

5. Points will be deducted for failing to adhere to these requirements, including the word count and especially the 4 requirements in part 3. 

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, 2021

OR

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

For the transition period from to

Commission File No. 1-434

Cincinnati THE PROCTER & GAMBLE COMPANY OH
One Procter
& Gamble

Plaza One Procter & Gamble Plaza, Cincinnati, Ohio 45202 45202
513 Telephone (513) 983-1100 983-1100

IRS Employer Identification No. 31-0411980
31-

0411980
State of Incorporation: Ohio OH

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

Title of each class Trading Symbol Name of each exchange on which registered

Common Stock, without Par Value PG New York Stock Exchange
2.000% notes due 2021 PG21 New York Stock Exchange
2.000% notes due 2022 PG22B New York Stock Exchange
1.125% notes due 2023 PG23A New York Stock Exchange
0.500% notes due 2024 PG24A New York Stock Exchange
0.625% notes due 2024 PG24B New York Stock Exchange
1.375% notes due 2025 PG25 New York Stock Exchange

4.875% EUR notes due May 2027 PG27A New York Stock Exchange
1.200% notes due 2028 PG28 New York Stock Exchange
1.250% notes due 2029 PG29B New York Stock Exchange
1.800% notes due 2029 PG29A New York Stock Exchange

6.250% GBP notes due January 2030 PG30 New York Stock Exchange
5.250% GBP notes due January 2033 PG33 New York Stock Exchange

1.875% notes due 2038 PG38 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 þ No o

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

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

Large accelerated filer þ Accelerated filer ¨

Non-accelerated filer ¨ Smaller reporting company ¨ FALSE
Emerging growth company ¨ FALSE

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

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

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 þ No o TRUE

The aggregate market value of the voting stock held by non-affiliates amounted to $341 billion on December 31, 2020.

There were 2,427,424,874 shares of Common Stock outstanding as of July 31, 2021.

Documents Incorporated by Reference

Portions of the Proxy Statement for the 2021 Annual Meeting of Shareholders, which will be filed within one hundred and twenty days of the fiscal year ended June 30, 2021 (2021 Proxy
Statement), are incorporated by reference into Part III of this report to the extent described herein.

FORM 10-K TABLE OF CONTENTS Page
PART I Item 1. Business 1

Item 1A. Risk Factors 2
Item 1B. Unresolved Staff Comments 8
Item 2. Properties 8
Item 3. Legal Proceedings 8
Item 4. Mine Safety Disclosure 8

Information about our Executive Officers 9
PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 10

Item 6. Intentionally Omitted 11
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 33
Item 8. Financial Statements and Supplementary Data 34

Management’s Report and Reports of Independent Registered Public Accounting Firm 34
Consolidated Statements of Earnings 38
Consolidated Statements of Comprehensive Income 39
Consolidated Balance Sheets 40
Consolidated Statements of Shareholders’ Equity 41
Consolidated Statements of Cash Flows 42
Notes to Consolidated Financial Statements 43

Note 1: Summary of Significant Accounting Policies 43
Note 2: Segment Information 45
Note 3: Supplemental Financial Information 47
Note 4: Goodwill and Intangible Assets 48
Note 5: Income Taxes 49
Note 6: Earnings Per Share 51
Note 7: Stock-based Compensation 52
Note 8: Postretirement Benefits and Employee Stock Ownership Plan 53
Note 9: Risk Management Activities and Fair Value Measurements 59
Note 10: Short-term and Long-term Debt 62
Note 11: Accumulated Other Comprehensive Income/(Loss) 63
Note 12: Leases 64
Note 13: Commitments and Contingencies 65
Note 14: Merck Acquisition 65

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 65
Item 9A. Controls and Procedures 65
Item 9B. Other Information 65

PART III Item 10. Directors, Executive Officers and Corporate Governance 66
Item 11. Executive Compensation 66
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 66
Item 13. Certain Relationships and Related Transactions and Director Independence 67
Item 14. Principal Accountant Fees and Services 67

PART IV Item 15. Exhibits and Financial Statement Schedules 67
Item 16. Form 10-K Summary 69

Signatures 70
Exhibit Index 71

The Procter & Gamble Company 1

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. Today, our products are sold in
more than 180 countries and territories.

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 the “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. You can also access these reports through
links from our website at: www.pginvestor.com. P&G includes the website
link solely as a textual reference. The information contained 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 relies on the continued growth and
success of existing brands and products, as well as the creation of new
innovative products and brands. The markets and industry segments in which
we offer our products are highly competitive. Our products are sold in more
than 180 countries and territories through numerous channels as well as
direct-to-consumer. Our growth strategy is to deliver meaningful and
noticeable superiority in all elements of our consumer proposition – product,
packaging, brand communication, retail execution and consumer and
customer value equation. We use our research and development 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 work collaboratively with our customers to deliver superior retail
execution, both in-store and online. In conjunction with the above elements,
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,
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. These customers sell our products to individual consumers. We also
sell direct to consumers. Sales to Walmart Inc. and its affiliates represent
approximately 15% of our total sales in 2021, 2020 and 2019. No other
customer represents more than 10% of our total sales. Our top ten customers
accounted for approximately 39% of our total sales in 2021, 38% in 2020 and
36% in 2019.

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 to customers. 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 of 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,

2 The Procter & Gamble Company

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 most 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, 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. For additional information on the potential impacts of global legal and
regulatory requirements on our business, see “Item 1A. Risk Factors” herein.

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
2022 as compared to prior periods.

Human Capital. Our employees are a key source of competitive advantage
and their actions, guided by our Purpose, Values and Principles (PVPs), are
critical to the long- term success of our business. As of June 30, 2021, the
Company had approximately 101,000 employees, an increase of two percent
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. As of June

30, 2021, 49% of our employees are in manufacturing roles and 26% of our
employees are located in the United States.

We focus on attracting, developing and retaining skilled, diverse talent,
including recruiting from among the best universities across the 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. Our employees’
holistic growth and full engagement is particularly important, as we primarily
have a develop-from-within model for staffing our senior leadership
positions. 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.

As a consumer products company, we believe that it is important for our
workforce to reflect the diversity of our consumers. We also seek to foster an
inclusive work environment where each individual can bring their whole 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. As of June 30, 2021, 40% of our global
employees are women. In the U.S. workforce, we are progressing towards our
aspiration of 40% multicultural representation overall as well as at
management and leadership levels. As of June 30, 2021, 26% of our U.S.
employees identify as multicultural.

Our compensation plans are based on the principles of paying for
performance, paying competitively versus peer companies that we compete
with for talent and in the marketplace, and focusing on long-term success
through a combination of short-term and long-term incentive plans. 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.

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

The Procter & Gamble Company 3

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 our 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 more than 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 fifty percent 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 Nigeria, Algeria, Egypt, Argentina and
Turkey. 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 political volatility,
labor market disruptions or other crises or vulnerabilities in individual

countries or regions, including political instability or upheaval, 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 or recession 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, including
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 and
payment 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.

Changing political 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 may be difficult to predict and may adversely affect
our business and financial results. Results of elections, referendums or other
political processes in certain markets in which our products

4 The Procter & Gamble Company

are manufactured, sold or distributed (such as the United Kingdom’s
withdrawal from the European Union) 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, services, capital and people between countries
and other matters. 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.

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 arrangements. 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,
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 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, 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 increased offerings of other branded manufacturers,
private label brands 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

The Procter & Gamble Company 5

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. 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:

• ordering and managing materials from suppliers;

• converting materials to finished products;

• shipping products to customers;

• marketing and selling products to consumers;

• 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 GDPR or residents of California
covered by the California Consumer Privacy Act (CCPA);

• 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.

6 The Procter & Gamble Company

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, 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, and we may suffer financial and reputational
damage because of lost or misappropriated confidential 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 a 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, such

as travel restrictions or recommendations or mandates from governmental
authorities to avoid large gatherings or to self-quarantine as a result of the
novel coronavirus (COVID-19) pandemic. These impacts 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;

• Inability to meet our customers’ needs and achieve cost targets due to
disruptions in our manufacturing and supply arrangements caused by
constrained workforce capacity or the loss or disruption of other essential
manufacturing and supply elements such as raw materials or other
finished product components, transportation, or other manufacturing and
distribution capability;

• Failure of third parties on which we rely, including our suppliers,
contract manufacturers, distributors, contractors, commercial banks, joint
venture partners and external business partners, to meet their obligations
to the Company, or significant disruptions in their ability to do so, which
may be caused by their own financial or operational difficulties and may
adversely impact our operations; 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, including operations necessary for the production,
distribution, sale, and support of our products, which could adversely
impact our results of operations and cash flows.

Despite our efforts to manage and remedy these impacts to the Company,
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. In the case of COVID-19, the availability and public acceptance of
effective vaccines has initially varied and may continue to vary significantly
across regions and countries where we operate, leading to further volatility
and disparity in our results and operations across geographies.

The Procter & Gamble Company 7

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 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 venture 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 as well as 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 end-of-life responsibility, 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, anti-corruption, 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, including our compliance and ethics programs,
may alter the environment in which we do business and may increase the
ongoing costs of compliance, 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, proceeding, 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

8 The Procter & Gamble Company

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 a more than doubling of U.S. residual 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 more than 130 member
countries of the expanded 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 is likely to
impact all multinational businesses by potentially redefining jurisdictional
taxation rights in market countries and establishing a global minimum tax.

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 23 manufacturing sites located in 17 different
states. In addition, we own and operate 82 manufacturing sites in 36 other
countries. Many of the domestic and international sites manufacture products
for multiple businesses. Beauty products are manufactured at 22 of these
locations; Grooming products at 18; Health Care products at 21; Fabric &
Home Care products at 38; and Baby, Feminine & Family Care 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 Dubai. 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 9

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The names, ages and positions held by the Executive Officers of the Company on August 6, 2021, are:

Name Position Age
First Elected to
Officer Position

David S. Taylor Chairman of the Board, President and Chief Executive Officer 63 2013

Jon R. Moeller Vice Chairman and Chief Operating Officer; Director 57 2009

Andre Schulten Chief Financial Officer 50 2021

Gary A. Coombe Chief Executive Officer – Grooming 57 2014

Mary Lynn Ferguson-McHugh Chief Executive Officer – Family Care and New Business 61 2016

Ma. Fatima D. Francisco Chief Executive Officer – Baby and Feminine Care 53 2018

Shailesh Jejurikar Chief Executive Officer – Fabric and Home Care 54 2018

R. Alexandra Keith Chief Executive Officer – Beauty 53 2017

Carolyn M. Tastad Chief Executive Officer – Health Care 60 2014

M. Tracey Grabowski Chief Human Resources Officer 53 2018

Victor Aguilar Chief Research, Development and Innovation Officer 54 2020

Deborah P. Majoras Chief Legal Officer and Secretary 57 2010
S
Marc S. Pritchard Chief Brand Officer 61 2008

All the Executive Officers named above have been employed by the Company for more than the past five years.
Mr. Moeller previously served as 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). He was appointed a Director of the Company in July 2021.
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).
Mr. Coombe previously served as President – Europe Selling & Market Operations (November 2014 – February 2018).
Ms. Francisco previously served as President – Global Feminine Care (November 2015 – August 2018).
Mr. Jejurikar previously served as President – Global Fabric Care and Brand-Building Officer Global Fabric & Home Care (November 2015 – July 2018).
Ms. Keith previously served as President – Global Skin & Personal Care (November 2014 – June 2017).
Ms. Tastad previously served as Group President – North America and Chief Sales Officer (June 2019 – July 2021) and Group President – North America Selling & Market Operations
(January 2015 – May 2019).
Ms. Grabowski previously served as Senior Vice President – Human Resources, North America Selling and Market Operations (April 2015 – July 2018).
Mr. Aguilar previously served as Senior Vice President – Research & Development, Corporate Function Research & Development (January 2020 – September 2020), Senior Vice President
– Research & Development, Corporate Function Research & Development and Global Fabric Care (April 2019 – January 2020), and Senior Vice President–Research & Development,
Global Fabric Care; and Sector Leader, Research & Development Global Fabric and Home Care (November 2014 – April 2019).

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

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
Total Number of

Shares Purchased
Average Price Paid per

Share

Total Number of
Shares Purchased as

Part of Publicly
Announced Plans or

Programs

Approximate Dollar Value of Shares that May
Yet Be Purchased Under Our Share

Repurchase Program

4/1/2021 – 4/30/2021 5,908,114 $135.41 5,908,114
5/1/2021 – 5/31/2021 8,038,515 136.84 8,038,515
6/1/2021 – 6/30/2021 8,184,384 134.40 8,184,384

Total 22,131,013 $135.56 22,131,013

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.

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

On April 20, 2021, the Company stated that in fiscal year 2021 the Company expected to reduce outstanding shares through direct share repurchases at a value of
approximately $11 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 long-term and short-term debt. The
total value of the shares purchased under the share repurchase plan was $11 billion. The share repurchase plan ended on June 30, 2021.

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 131 consecutive years since its incorporation in 1890 and has increased its dividend for 65 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.

(1) (2) (3)

(3)

(3)

(3)

(3)

(1)

(2)

(3)

The Procter & Gamble Company 11

(in dollars; split-adjusted) 1956 1961 1971 1981 1991 2001 2011 2021

Dividends per share $ 0.01 $ 0.02 $ 0.04 $ 0.12 $ 0.24 $ 0.70 $ 1.97 $ 3.24

Common Stock Information

P&G trades on the New York Stock Exchange under the stock symbol PG. As of June 30, 2021, there were approximately 4 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, 2021, 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, 2016, and that all dividends were reinvested.

Cumulative Value of $100 Investment, through June 30

Company Name/Index 2016 2017 2018 2019 2020 2021

P&G $ 100 $ 106 $ 98 $ 143 $ 160 $ 184
S&P 500 Stock Index 100 118 135 149 160 225
S&P 500 Consumer Staples Index 100 103 99 115 119 147

Item 6. Intentionally Omitted.

12 The Procter & Gamble Company

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

Management’s Discussion and Analysis

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.

Risks and uncertainties to which our forward-looking statements are subject
include, without limitation: (1) the ability to successfully manage global
financial risks, including foreign currency fluctuations, currency exchange or
pricing controls and localized volatility; (2) the ability to successfully manage
local, regional or global economic volatility, including reduced market
growth rates, and to generate sufficient income and cash flow to allow the
Company to effect the expected share repurchases and dividend payments; (3)
the ability to manage disruptions in credit markets or to our banking partners
or changes to our credit rating; (4) the ability to maintain key manufacturing
and supply arrangements (including execution of supply chain optimizations
and sole supplier and sole manufacturing plant arrangements) and to manage
disruption of business due to various factors, including ones outside of our
control, such as natural disasters, acts of war 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 conditions and potential implications such as exchange
rate fluctuations and market contraction; (13) the ability to successfully
manage current and expanding regulatory and legal requirements and matters
(including, without limitation, those laws and regulations involving product
liability, product and packaging composition, intellectual property, labor and
employment, antitrust, privacy and data protection, tax, environmental, due
diligence, risk oversight, and accounting and financial reporting) and to
resolve new and pending matters within current estimates; (14) the ability to
manage changes in applicable tax laws and regulations including maintaining
our intended tax treatment of divestiture transactions; (15) the ability to
successfully manage our ongoing acquisition, divestiture and joint venture
activities, in each case to achieve the Company’s overall business strategy
and financial objectives, without impacting the delivery of base business
objectives; (16) the ability to successfully achieve productivity improvements
and cost savings and manage ongoing organizational changes, while
successfully identifying, developing and retaining key employees, including
in key growth markets where the availability of skilled or experienced
employees may be limited; and (17) the ability to successfully manage the
demand, supply, and operational challenges associated with a disease
outbreak, including epidemics, pandemics, or similar widespread public
health concerns (including the COVID-19 outbreak). 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.

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:

• Overview
• Summary of 2021 Results

The Procter & Gamble Company 13

• Economic Conditions and Uncertainties
• Results of Operations
• Segment Results
• Cash Flow, Financial Condition and Liquidity
• Significant Accounting Policies and Estimates
• Other Information

Throughout the MD&A we refer to measures used by management to
evaluate performance, including unit volume growth, net sales, net earnings,
diluted net earnings per share and 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, divestitures and
foreign exchange from year-over-year comparisons. Core EPS is diluted net
earnings per share from continuing operations excluding certain items that are
not judged to be part of the Company’s sustainable results or trends. Adjusted
free cash flow is operating cash flow less capital spending, transitional tax
payments related to the U.S. Tax Act and tax payments related to the Merck
OTC consumer healthcare acquisition. 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
measures.

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 and
explain drivers of changes in net sales. Organic volume growth reflects year-
over-year changes in unit volume excluding the impacts of acquisitions and
divestitures and certain one-time items, if applicable, and is used to explain
changes in organic sales.

OVERVIEW

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 more than 180 countries and territories primarily through mass merchandisers, e-commerce,
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.

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.

14 The Procter & Gamble Company

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 six SBUs. The SBUs are responsible for global brand strategy, new product upgrades and innovation,
marketing plans and supply chain. They have direct profit responsibility for markets representing the large majority of the Company’s sales and earnings (referred
to as Focus Markets) and are responsible for innovation plans, supply plans and operating frameworks to drive growth and value creation in the remaining markets
(referred to as Enterprise Markets). Effective September 2021, the Company will be organized into five SBUs as Baby and Feminine Care will combine with
Family Care into one SBU to leverage organizational and business synergies. Under U.S. GAAP, the categories underlying the SBUs are, and will continue to be,
aggregated into five reportable segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care. 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 provides additional detail on our reportable segments and the ten product categories and brand composition within each segment.

Reportable Segments
% of

Net Sales
% of Net

Earnings Product Categories (Sub-Categories) Major Brands

Beauty 19% 22%
Hair Care (Conditioner, Shampoo, Styling Aids, Treatments)

Head & Shoulders, Herbal
Essences, Pantene, Rejoice

Skin and Personal Care (Antiperspirant and Deodorant, Personal
Cleansing, Skin Care)

Olay, Old Spice, Safeguard,
Secret, SK-II

Grooming 9% 10% Grooming (Shave Care – Female Blades & Razors, Male Blades &
Razors, Pre- and Post-Shave Products, Other Shave Care; Appliances)

Braun, Gillette, Venus

Health Care 13% 12%

Oral Care (Toothbrushes, Toothpaste, Other Oral Care) Crest, Oral-B

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

Metamucil, Neurobion, Pepto-
Bismol, Vicks

Fabric & Home Care 34% 31%
Fabric Care (Fabric Enhancers, Laundry Additives, Laundry Detergents) Ariel, Downy, Gain, Tide

Home Care (Air Care, Dish Care, P&G Professional, Surface Care) Cascade, Dawn, Fairy, Febreze,
Mr. Clean, Swiffer

Baby, Feminine &
Family Care

25% 25%

Baby Care (Baby Wipes, Taped Diapers and Pants) Luvs, Pampers

Feminine Care (Adult Incontinence, Feminine Care) Always, Always Discreet, Tampax

Family Care (Paper Towels, Tissues, Toilet Paper) Bounty, Charmin, Puffs

Percent of Net sales and Net earnings for the year ended June 30, 2021 (excluding results held in Corporate).
The Grooming product category is comprised of the Shave Care and Appliances operating segments.

Recent Developments:

During fiscal 2019, the Company completed the acquisition of the over-the-
counter (OTC) healthcare business of Merck KGaA (Merck OTC) for
approximately $3.7 billion. This business primarily sells OTC consumer
healthcare products, mainly in markets in Europe, Latin America and Asia
and is included within our personal health care category.

During fiscal 2019, the Company also dissolved our PGT Healthcare
partnership, a venture between the Company and Teva Pharmaceutical
Industries, Ltd (Teva) in the OTC consumer healthcare business. Pursuant to
the agreement, PGT product assets were returned to the original respective
parent companies to reestablish independent OTC businesses. This transaction
was accounted for as a sale of the Teva portion of the PGT business. The
Company recorded an after-tax gain on the sale of $353 million.

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 the
global market leader in the retail hair care market with over 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 approximately 6%
global market share.

Grooming: We compete in shave care and appliances. In shave care, we are
the global market leader in the blades and

(1) (1)

(2)

(1)

(2)

The Procter & Gamble Company 15

razors market. Our global blades and razors market share is over 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 over 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 top ten competitor
in a large, highly fragmented industry, primarily behind respiratory treatments
(Vicks brand) and digestive wellness products (Metamucil and Pepto Bismol
brands). As discussed earlier, in fiscal 2019, we dissolved the PGT Healthcare
partnership with Teva, and reestablished an independent OTC business. We
also acquired Merck OTC as discussed above.

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 25% global market share, primarily
behind our Tide, Ariel and Downy brands. Our global home care market share
is nearly 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 the global market
leader and compete mainly in taped diapers, pants and baby wipes with over
20% global market share. We have the number one or number two market
share position in most of the key markets in which we compete, primarily
behind Pampers, the Company’s largest brand, with annual net sales of over
$7 billion. We are the global market leader in the feminine care category with
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 nearly 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
approximately 25% for Charmin.

Enterprise 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 and legal services.

Global Business Services

Global Business Services provides technology, processes and standard data
tools to enable the SBUs, the EMs and CF to better understand the business
and better serve consumers and customers. The GBS organization is
responsible for providing world-class solutions at a low cost and with
minimal capital investment.

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 has undertaken an effort to focus and strengthen its business
portfolio to compete in categories and with brands that are structurally
attractive and that play to P&G’s strengths. Our 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 winning with
consumers. The consumers who purchase and use our products are at the
center of everything we do. We win with consumers by delivering superiority
across the five key elements of product, packaging, brand communication,
retail execution and value equation. Winning with consumers around the
world and against our best competitors requires innovation. Innovation has
always been, and continues to be, P&G’s lifeblood. Innovation requires
consumer insights and technology advancements that lead to product
improvements, improved marketing and merchandising programs and game-
changing inventions that create new brands and categories.

Productivity improvement is critical to delivering our balanced top- and
bottom-line growth, cash generation and value creation
objectives. Productivity improvement and sales growth reinforce and fuel
each other. Our objective is to drive productivity improvement across all
elements of cost, including cost of goods sold, marketing and promotional
spending and overhead costs. We plan to use productivity improvements and
cost savings to help offset cost increases (including commodity and foreign
exchange impacts), reinvest in product and packaging improvements, brand
awareness-building advertising and trial-building sampling programs,
increased sales coverage and R&D programs as well as to improve operating
margins.

We are constructively disrupting our 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

16 The Procter & Gamble Company

responsibilities, accountability and incentive compensation programs.

We believe these strategies are 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 annual
financial targets 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 earnings per share (EPS) growth of mid-to-high single digits; and
• Adjusted free cash flow productivity of 90% or greater.

In periods with significant macroeconomic pressures, such as the current
COVID-19 pandemic, we intend to maintain a disciplined approach to
investing so as not to sacrifice the long-term health of our businesses to meet
short-term objectives in any given year.

SUMMARY OF 2021 RESULTS

Amounts in millions, except per share amounts 2021 2020 Change vs. Prior Year

Net sales $ 76,118 $ 70,950 7 %
Operating income 17,986 15,706 15 %
Net earnings 14,352 13,103 10 %
Net earnings attributable to Procter & Gamble 14,306 13,027 10 %
Diluted net earnings per common share 5.50 4.96 11 %
Core earnings per share 5.66 5.12 11 %
Cash flow from operating activities 18,371 17,403 6 %

• Net sales increased 7% to $76.1 billion on a 3% increase in unit
volume. Favorable foreign exchange had a positive 1% impact on net
sales. Net sales growth was driven by double digit increases in Health
Care and in Fabric & Home Care, a high single digit increase in
Beauty, a mid-single digit increase in Grooming and a low single digit
increase in Baby, Feminine & Family Care. Organic sales, which
exclude the impacts of acquisitions and divestitures and foreign
exchange, increased 6% on a 3% increase in organic volume. Organic
sales increased high single digits in Health Care and in Fabric & Home
Care, increased mid-single digits in Beauty and in Grooming and
increased low single digits in Baby, Feminine & Family Care.

• Operating income increased $2.3 billion, or 15% versus year ago to
$18.0 billion, driven by the net sales increase and an increase in
operating margin.

• Net earnings increased $1.2 billion or 10% versus year ago to $14.4
billion, due to the increase in operating income, partially offset by
current year charges of $427 million after tax for the early
extinguishment of debt and an increase in the current year effective tax

rate. Foreign exchange impacts negatively affected net earnings by
approximately $108 million.

• Net earnings attributable to Procter & Gamble were $14.3 billion, an
increase of $1.3 billion or 10% versus the prior year primarily due to
the increase in net earnings.

• Diluted net earnings per share (EPS) increased 11% to $5.50 due to the
increase in net earnings and a reduction in shares outstanding.
◦ Core EPS, which represents net earnings per share excluding

charges for the early extinguishment of debt in the current period
and incremental restructuring charges in the base period, increased
11% to $5.66.

• Cash flow from operating activities was $18.4 billion.
◦ Adjusted free cash flow, which is operating cash flow less capital

expenditures and certain other impacts, was $15.8 billion.
◦ Adjusted free cash flow productivity, which is the ratio of adjusted

free cash flow to net earnings, excluding the charges for early debt
extinguishment, was 107%.

The Procter & Gamble Company 17

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 and Africa, with more
than half our sales generated outside the United States. As such, we are
exposed to and impacted by global macroeconomic factors, U.S. and foreign
government policies and foreign exchange fluctuations. Current global
economic conditions continue to be highly volatile due to the COVID-19
pandemic, resulting in market size contractions in certain countries due to
economic slowdowns and government restrictions on movement. Other
macroeconomic factors also remain dynamic, and any causes of market size
contraction, such as greater political unrest or instability in the Middle East,
Central & Eastern Europe, certain Latin American markets and the Hong
Kong market in Greater China, could reduce our sales or erode our operating
margin, in either case reducing our net earnings and cash flows.

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

Foreign Exchange. We have both translation and transaction exposure to the
fluctuation of exchange rates. Translation exposures relate to exchange rate
impacts of measuring income statements of foreign subsidiaries that do not
use the U.S. dollar as their functional currency. Transaction exposures relate
to 1) the impact from input costs that are denominated in a currency other
than the local reporting currency and 2) the revaluation of transaction-related
working capital balances denominated in currencies other than the functional
currency. In the past three fiscal years, a number of foreign currencies have
weakened versus the U.S. dollar, leading to lower earnings from these foreign
exchange impacts. In the current fiscal year, foreign exchange impacts have
benefited net sales while negatively impacting earnings due to the mix of
currencies in which input costs are denominated. Certain countries currently
experiencing significant exchange rate fluctuations include Argentina, Brazil,
Russia, Turkey as well as the European Union. These fluctuations have
significantly impacted our historical net sales, costs and net earnings 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 affect our net sales, gross margin, operating margin,
net earnings and cash flows.

Government Policies. Our net earnings and cash flows could be affected by
changes in U.S. or foreign government legislative, regulatory or enforcement
policies. For example, any future legislative or regulatory changes in U.S. or
non-U.S. tax policy, or any significant change in global tax policy adopted
under the current work being led by the OECD for the G20 focused on
“Addressing the Challenges of the Digitalization of the Economy.” The
breadth of the OECD project extends beyond pure digital businesses and is
likely to impact all multinational businesses by redefining jurisdictional
taxation rights. 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 Nigeria, Algeria, Egypt, Argentina and Turkey.
Further, our net sales, gross margin, operating margin, net earnings and cash
flows could be affected by changes to international trade agreements in North
America and elsewhere, including any changes related to the United
Kingdom’s exit from the European Union. Changes in government policies in
these areas might cause an increase or decrease in our net sales, gross margin,
operating margin, net earnings and cash flows.

COVID-19 Pandemic Disclosures. Our net sales, net earnings and cash flows
may be impacted by the U.S. and foreign government policies to manage the
COVID-19 pandemic, such as movement restrictions or site closures. The
Company’s priorities during the COVID-19 pandemic continue to be
protecting the health and safety of our

18 The Procter & Gamble Company

employees; maximizing the availability of products that help consumers with
their health, hygiene and cleaning needs; and using our employees’ talents
and our resources to help society meet and overcome the current challenges.
Because the Company sells products that are essential to the daily lives of
consumers, the COVID-19 pandemic has not had a materially negative impact
to our consolidated net sales as positive and negative impacts during fiscal
2021 have largely offset each other. We have experienced a significant
increase in demand and consumption of certain of our product categories
(fabric, home cleaning and hygiene products) primarily in North America,
caused in part by changing consumer habits, pantry stocking and retailer
inventory replenishment, due to the COVID-19 pandemic, contributing to
increases in net sales. At the same time, net sales have been negatively
impacted due to the economic slowdown and restricted consumer movements
in certain markets in Asia Pacific and Europe, in certain channels, such as
professional and in certain categories, such as shave care. In the future, the
pandemic may cause reduced demand for our products if it results in a
recessionary global economic environment. Demand in certain countries in
Latin America, Asia Pacific, and IMEA may be particularly susceptible to
recession. It could also lead to volatility in consumer access to our products
due to government actions impacting our ability to produce and ship products
or impacting consumers’ movements and access to our products. The
resumption of normal economic activity as we emerge from the pandemic in
certain markets, including North America, could also result in reduced
demand due to consumption decreases and consumer pantry destocking
(particularly, in home cleaning and hygiene products). We believe that over
the long term, there will continue to be strong demand for categories in which
we operate, particularly our products that deliver essential health, hygiene and
cleaning benefits. However, the timing and extent of demand recovery in
certain markets in Asia Pacific, IMEA and Latin America, the resumption of
international travel, the timing and impact of potential consumer pantry
destocking and product demand volatility caused by future economic trends
are unclear. Accordingly, there may be heightened volatility in net sales, net
earnings and cash flows during and subsequent to the duration of the
pandemic. Our retail customers are also being impacted by the pandemic.
Their success in addressing the issues and maintaining their operations could
impact consumer access to and, as a result, sales of our products.

Our ability to continue to operate without any significant negative impacts
will in part depend on our ability to protect our employees and our supply
chain. The Company has endeavored to follow actions recommended by
governments and health authorities, including on vaccine administration, to
protect our employees worldwide, with particular measures in place for those
working in our plants and distribution facilities. We have also worked closely
with local and national officials to keep our manufacturing facilities open due
to the essential nature of the majority of our products. While we have been
able to broadly maintain our operations, we experienced some disruption in
our

supply chain in certain markets in Asia Pacific and IMEA in the first months
of the pandemic due primarily to the restriction of employee movements, as
well as increased transportation and manufacturing costs. We intend to
continue to work with government authorities and implement our employee
safety measures to ensure that we continue manufacturing and distributing our
products during the pandemic. However, uncertainty resulting from the
pandemic could result in an unforeseen disruption to our supply chain (for
example, a closure of a key manufacturing or distribution facility or the
inability of a key material or transportation supplier to source and transport
materials) that could impact our operations.

Because the pandemic has not had a material negative impact on our
operations, on the demand for our products or the resulting net sales and net
earnings, it has also not negatively impacted the Company’s liquidity
position. We continue to generate operating cash flows to meet our short-term
liquidity needs, and we continue to maintain access to the capital markets
enabled by our strong short- and long-term credit ratings. We have also not
observed any material impairments of our assets or a significant change in the
fair value of assets due to the COVID-19 pandemic.

For additional information on risk factors that could impact our 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
currency impacts on sales outside the U.S.

Most of our cost of products sold and SG&A are to some extent variable in
nature. 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 exchange 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

The Procter & Gamble Company 19

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 2020 year-over-year changes, please
refer to the MD&A in Part II, Item 7 of the Company’s Form 10-K/A for the
fiscal year ended June 30, 2020.

Net Sales

Net sales increased 7% to $76.1 billion in fiscal 2021 on a 3% increase in unit
volume versus the prior year. Favorable foreign exchange increased net sales
by 1%. Favorable pricing had a 1% positive impact on net sales. Mix had a
positive 2% impact on net sales driven by the

disproportionate growth of the North America region, the Health Care
segment and the Home Care and Appliances categories, all of which have
higher than company-average selling prices. Excluding the net impacts of
foreign exchange and acquisitions and divestitures, organic sales grew 6% on
a 3% increase in organic volume. Net sales increased double digits in Health
Care and Fabric & Home Care, increased high single digits in Beauty,
increased mid-single digits in Grooming and increased low single digits in
Baby, Feminine & Family Care. Organic sales grew high single digits in
Health Care and Fabric & Home Care.

On a regional basis, volume increased high single digits in Greater China,
increased mid-single digits in North America and IMEA and increased low
single digits in Latin America due to innovation, market growth and increased
demand, particularly in household cleaning and personal hygiene products.
This was partially driven by increased consumption and retailer inventory
restocking due to the COVID-19 pandemic. Volume in Europe was
unchanged and decreased low single digits in Asia Pacific due to pandemic-
related market contraction. Excluding the impact of a minor brand divestiture,
organic volume in Europe increased low single digits.

Operating Costs

Comparisons as a percentage of net sales; Years ended June 30 2021 2020
Basis Point

Change

Gross margin 51.2 % 50.3 % 90
Selling, general and administrative expense 27.6 % 28.2 % (60)
Operating margin 23.6 % 22.1 % 150
Earnings before income taxes 23.1 % 22.3 % 80
Net earnings 18.9 % 18.5 % 40
Net earnings attributable to Procter & Gamble 18.8 % 18.4 % 40

Gross margin increased 90 basis points to 51.2% of net sales in fiscal 2021.
Gross margin benefited from:

• 120 basis points from total manufacturing cost savings, net of freight
cost increases (100 basis points after including product and
packaging reinvestments),

• 70 basis points of help from lower restructuring costs versus the base
period, and

• 60 basis points of positive pricing impacts.

These benefits were offset by an 80 basis-point negative impact from
unfavorable product mix (due to the disproportionate growth of the Home
Care and Appliances categories which have lower than company-average
gross margin and mix within segments due to the growth of lower margin
product forms and larger sizes in certain categories), a 40 basis-point negative
impact from unfavorable foreign exchange rates and a 20 basis-point negative
impact from higher commodity costs.

Total SG&A increased 5% to $21.0 billion, primarily due to an increase in
marketing spending and, to a lesser extent, an increase in overhead costs.
SG&A as a percentage of net sales decreased 60 basis points to 27.6% due to
a decrease in overhead costs and other operating expenses as a percentage of
net sales.

• Marketing spending as a percentage of net sales was unchanged, as
investments in media and other marketing spending were offset by the
positive scale impacts of the net sales increase and savings in agency
compensation and production costs.

• Overhead costs as a percentage of net sales decreased 40 basis points due
to the positive scale impacts of the net sales increase and productivity
savings, partially offset by inflation and other cost increases.

• Other net operating expenses as a percentage of net sales decreased 20
basis points primarily due to a reduction in foreign exchange
transactional charges.

20 The Procter & Gamble Company

Productivity-driven cost savings delivered 110 basis points of benefit to
SG&A as a percentage of net sales.

Operating margin increased 150 basis points to 23.6% for fiscal 2021 due to
both the increase in gross margin and the decrease in SG&A as a percentage
of net sales as discussed above.

Non-Operating Items

• Interest expense was $502 million in fiscal 2021, an increase of $37
million versus the prior year due to higher average interest rates for the
fiscal year driven by a higher proportion of fixed rate debt.

• Interest income was $45 million in fiscal 2021, a reduction of $110
million versus the prior year due to lower U.S. interest rates.

• Other non-operating income, which consists primarily of divestiture
gains and other non-operating items decreased $352 million to $86
million, primarily due to current period charges of $512 million ($427
million after tax) for the early debt extinguishment. Excluding the debt
extinguishment charges, other non-operating income increased $160
million primarily due to an unrealized gain on an equity investment that
became publicly traded in fiscal 2021 and an increase in net non-
operating benefits on defined benefit retirement plans driven by annual
updates to actuarial assumptions.

Income Taxes

Income taxes increased to $3.3 billion due to increased earnings and an
increase in the effective tax rate. The effective tax rate increased 130 basis
points to 18.5% in 2021 due to:

• a 135 basis-point increase related to the prior year tax benefit arising
from transactions to simplify our legal entity structure, and

• a 15 basis-point increase from unfavorable impacts from the geographic
mix of current year earnings.

These increases are partially offset by:

• a 20 basis-point decrease from discrete impacts related to uncertain tax
positions (5 basis-point favorable impact in the current year versus a 15
basis-point unfavorable impact in the prior year period).

Net Earnings

Operating income increased 15%, or $2.3 billion, to $18.0 billion due to the
net sales increase and the increase in operating margin, both of which are
discussed above.

Earnings before income taxes increased 11%, or $1.8 billion, to $17.6 billion,
as the increase in operating income was partially offset by the current period
charges of $512 million for the early extinguishment of debt. Net earnings
increased 10%, or $1.2 billion, to $14.4 billion due to the increase in earnings
before income taxes, partially offset by the increase in the effective income
tax rate discussed above. Foreign exchange impacts reduced net earnings by
approximately $108 million in fiscal 2021 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 increased $1.3 billion, or 10%,
to $14.3 billion.

Diluted net EPS increased $0.54, or 11%, to $5.50 due primarily to the
increase in net earnings and, to a lesser extent, a reduction in shares
outstanding.

Core EPS increased 11% to $5.66. Core EPS represents diluted net EPS from
continuing operations excluding the current year charge for the early debt
extinguishment and incremental restructuring charges in the base year related
to our productivity and cost savings plans. The increase was primarily driven
by the increase in net sales and the increase in operating margin, both of
which are discussed above.

The Procter & Gamble Company 21

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.

Net Sales Change Drivers 2021 vs. 2020

Volume with
Acquisitions &

Divestitures

Volume Excluding
Acquisitions &

Divestitures
Foreign

Exchange Price Mix Other
Net Sales
Growth

Beauty 3 % 3 % 2 % 2 % 1 % — % 8 %
Grooming 3 % 3 % — % 2 % 1 % — % 6 %
Health Care 6 % 6 % 1 % 1 % 2 % — % 10 %
Fabric & Home Care 5 % 5 % 1 % 1 % 3 % — % 10 %
Baby, Feminine & Family Care — % — % 1 % 1 % 1 % — % 3 %

TOTAL COMPANY 3 % 3 % 1 % 1 % 2 % — % 7 %

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

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

BEAUTY

($ millions) 2021 2020 Change vs. 2020

Volume N/A N/A 3%
Net sales $14,417 $13,359 8%
Net earnings $3,210 $2,737 17%
% of net sales 22.3% 20.5% 180 bps

Beauty net sales increased 8% to $14.4 billion in fiscal 2021 on a 3% increase
in unit volume. Favorable foreign exchange impacts increased net sales by
2%. Higher pricing increased net sales by 2%. Favorable product mix added
1% to net sales due to the disproportionate growth of the SK-II brand, which
has higher than segment-average selling prices. Organic sales increased 6%
on a 3% increase in organic volume. Global market share of the Beauty
segment decreased 0.4 points.

• Hair Care net sales increased mid-single digits due to a low single digit
increase in volume and increased pricing. Organic sales also increased
mid-single digits. Volume growth was driven by a double digit increase
in Greater China (due to market growth and increased distribution), a
high single digit increase in IMEA (due to innovation and the low base
period due to pandemic-related shutdowns) and a mid-single digit
increase in Latin America (due to product innovation), partially offset by
a low single digit decrease in Europe due to pandemic-related category
declines in certain markets. Global market share of the hair care category
was unchanged.

• Skin and Personal Care net sales increased high single digits due to a low
single digit volume increase, favorable mix due to the disproportionate
growth of the super premium SK-II brand, increased pricing and
favorable foreign exchange impacts. Organic sales also increased high
single digits. Volume increased double digits in Greater China and
increased low single digits in North America driven by increased
consumption of personal care products due to the pandemic. This volume
growth was partially offset by a double digit decrease in IMEA and a low
single digit decrease in Asia Pacific due to pandemic-related market
contractions. Global market share of the skin and personal care category
decreased nearly half a point.

Net earnings increased 17% to $3.2 billion in fiscal 2021 due to the increase
in net sales and a 180 basis-point increase in net earnings margin. Net
earnings margin increased due to an increase in gross margin and a decrease
in SG&A as a percentage of net sales. The gross margin increase was mainly
driven by manufacturing cost savings and increased selling prices, partially
offset by the negative impacts of unfavorable mix (due to the decline of the
skin care category which has higher than segment-average margins and to a
lesser extent the disproportionate growth of Latin America and IMEA, which
have lower than segment-average margins) and increased commodity costs.
SG&A as a percentage of net sales decreased primarily due to the positive
scale impacts of the net sales increase.

(1)

(2)

(1)

(2)

22 The Procter & Gamble Company

GROOMING

($ millions) 2021 2020 Change vs. 2020

Volume N/A N/A 3%
Net sales $6,440 $6,069 6%
Net earnings $1,427 $1,329 7%
% of net sales 22.2% 21.9% 30 bps

Grooming net sales increased 6% to $6.4 billion in fiscal 2021 on a 3%
increase in unit volume. Increased pricing had a 2% positive impact to net
sales. Favorable mix had a 1% positive impact to net sales due to the
disproportionate growth of the Appliances category, which has higher than
segment-average selling prices. Foreign exchange had no net impact on net
sales. Organic sales also increased 6%. Global market share of the Grooming
segment decreased 0.6 points.

• Shave Care net sales increased low single digits driven by a low single
digit increase in volume and increased pricing, partially offset by
unfavorable mix impacts due to the disproportionate growth of lower
priced products in IMEA and Latin America. Organic sales also
increased low single digits. The volume increase was driven by a mid-
teens increase in IMEA (due to innovation and a low base period due to
pandemic-related shutdowns), a high single digit increase in Greater
China (due to innovation and market growth) and low-single digit
increases in Latin America (due to innovation and distribution increases
in certain markets) and in North America (due to innovation and a lower
base period due to pandemic-related consumption declines), partially
offset by a mid-single digit decline in Asia Pacific and a low single digit
decline in Europe due to pandemic-related consumption declines. Global
market share of the shave care category was unchanged.

• Appliances net sales increased more than 20% primarily due to a high
teens increase in volume, favorable foreign exchange impacts, favorable
mix impact due to the disproportionate growth of premium shaver and
styling products and increased pricing. Organic sales also increased more
than 20%. Volume increased in all regions led by high teen increases in
Europe and Greater China and double digit increases in North America
and Asia Pacific, all driven by innovation and increased consumption of
at-home grooming and styling products due to the pandemic. Global
market share of the appliances category increased more than a point.

Net earnings increased 7% to $1.4 billion in fiscal 2021 due to the increase in
net sales and a 30 basis-point increase in net earnings margin. Net earnings
margin increased due to a decrease in SG&A as a percentage of net sales
partially offset by a decrease in gross margin. Gross margin decreased due to
the negative impact of unfavorable mix (due to the disproportionate growth of
the appliances category and the IMEA region, both of which have lower than
segment-average margins) and unfavorable foreign exchange impacts,
partially offset by the positive impacts of manufacturing cost savings and
increased selling prices. SG&A as a percentage of net sales decreased
primarily due to the positive scale

impacts of the net sales increase and reductions in overhead costs due to
productivity savings, partially offset by the impact of a favorable legal
settlement in the base period.

HEALTH CARE

($ millions) 2021 2020 Change vs. 2020

Volume N/A N/A 6%
Net sales $9,956 $9,028 10%
Net earnings $1,851 $1,652 12%
% of net sales 18.6% 18.3% 30 bps

Health Care net sales increased 10% to $10.0 billion in fiscal 2021 on a 6%
increase in unit volume. Favorable foreign exchange impacts increased net
sales by 1%. Favorable product mix increased net sales by 2% due to the
disproportionate growth of premium power brush and paste products.
Increased pricing had a 1% positive impact on net sales. Organic sales
increased 9%. Global market share of the Health Care segment increased 1.8
points.

• Oral Care net sales increased double digits driven by a high-single digit
volume increase, favorable mix impacts from the disproportionate
growth of premium power brush and paste products, favorable foreign
exchange impacts and increased pricing. Organic sales also increased
double digits. Volume increased in all regions led by around 20% growth
in IMEA, high single digit growth in North America, mid-single digits
growth in Greater China and in Asia Pacific and low single digit growth
in Europe due to product innovation, increased marketing spending and a
low base period in certain markets due to pandemic-related shutdowns.
Global market share of the oral care category increased more than a
point.

• Personal Health Care net sales increased mid-single digits driven by a
mid-single digit increase in volume and increased pricing. Organic sales
also increased mid-single digits. Volume increased mid-teens in Asia
Pacific, increased double digits in Latin America and in IMEA, and
increased mid-single digits in North America due to product innovation,
increased marketing spending and increased consumption of certain
health care products including supplements and pain relief. Global
market share of the personal health care category increased more than a
point.

Net earnings increased 12% to $1.9 billion in fiscal 2021 due to the increase
in net sales and a 30 basis-point increase in net earnings margin. Net earnings
margin increased due a decrease in SG&A as a percentage of net sales
partially offset by a decrease in gross margin. Gross margin decreased due to
unfavorable mix impacts (due to the decline of higher-margin respiratory
products and the disproportionate growth of oral care category, which has
lower than segment-average margins) and unfavorable foreign exchange
impacts, partially offset by manufacturing cost savings and increased selling
prices. SG&A as a percentage of net sales decreased primarily due to the
positive scale impacts of the net sales increase, partially offset by increased
marketing spending.

The Procter & Gamble Company 23

FABRIC & HOME CARE

($ millions) 2021 2020 Change vs. 2020

Volume N/A N/A 5%
Net sales $26,014 $23,735 10%
Net earnings $4,622 $4,154 11%
% of net sales 17.8% 17.5% 30 bps

Fabric & Home Care net sales increased 10% to $26.0 billion in fiscal 2021
on a 5% increase in unit volume. Favorable foreign exchange impacts
increased net sales by 1%. Higher pricing increased net sales by 1%. Positive
mix impacts increased net sales by 3% due to the disproportionate growth of
the Home Care category and the North America region, both of which have
higher than segment-average selling prices. Organic sales increased 9%.
Global market share of the Fabric & Home Care segment increased 1 point.

• Fabric Care net sales increased high single digits due to a low single digit
increase in volume, favorable foreign exchange impacts and positive mix
impacts due to the disproportionate growth of premium products
(including scent beads and unit dose) and the North America region, all
of which have higher than category-average selling prices. Organic sales
increased mid-single digits. Volume grew high single digits in North
America and Greater China and grew low single digits in Latin America
(all due to product innovation, incremental marketing spending and
pandemic-related consumption increases) partially offset by a low single
digit decrease in Asia Pacific due to pandemic-related market contraction
and competitive activity. Global market share of the Fabric Care category
increased more than a point.

• Home Care net sales increased high-teens due to mid-teens volume
growth, positive mix impact due to the disproportionate growth of
premium dish care and surface cleaning products and the North America
region, all of which have higher than category-average selling prices,
increased pricing and favorable foreign exchange impacts. Organic sales
also increased high-teens. Volume increased in all regions led by high
teens growth in North America and Latin America and double digit
growth in Europe, all due to consumption increases related to the
COVID-19 pandemic, product innovation and incremental marketing
spending. Global market share of the Home Care category increased
more than a point.

Net earnings increased 11% to $4.6 billion in fiscal 2021 due to the increase
in net sales and a 30 basis-point increase in net earnings margin. The 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. The
gross margin increase was driven by manufacturing cost savings and
increased selling prices, partially offset by unfavorable foreign exchange
impacts and unfavorable product mix (due to the disproportionate growth of
products

that are premium-priced and profit-accretive but with lower than segment-
average margins). SG&A as a percentage of net sales increased due to an
increase in marketing spending, partially offset by the positive scale benefits
of the net sales increase.

BABY, FEMININE & FAMILY CARE

($ millions) 2021 2020 Change vs. 2020

Volume N/A N/A —%
Net sales $18,850 $18,364 3%
Net earnings $3,629 $3,465 5%
% of net sales 19.3% 18.9% 40 bps

Baby, Feminine & Family Care net sales increased 3% to $18.9 billion in
fiscal 2021 on unit volume that was unchanged. Favorable foreign exchange
impacts increased net sales by 1%. Increased pricing was a positive 1%
impact to net sales. Positive mix impact increased net sales by 1% due to the
growth of the North America region which has higher than segment-average
selling prices. Organic sales increased 2%. Global market share of the Baby,
Feminine & Family Care segment decreased 0.2 points.

• Baby Care net sales increased low single digits driven by positive mix
impact due to the growth of the North America region and premium
products, both of which have higher than category-average selling prices,
increased pricing and favorable foreign exchange impacts, partially offset
by a low single digit decrease in volume. Organic sales were unchanged.
The volume decrease was driven by a double digit decline in Greater
China (due to competitive activities), mid-single digit declines in Asia
Pacific (due to market contraction and competitive activity), Latin
America (due to market contraction) and IMEA (due to pandemic-related
retailer inventory reductions and market contraction) and a low single
digit decline in Europe (due to market contractions and competitive
activity in certain markets). These volume declines were partially offset
by a low single digit volume increase in North America due to market
growth and product innovation. Global market share of the baby care
category decreased less than half a point.

• Feminine Care net sales increased mid-single digits due to positive mix
impacts (from the disproportionate growth of the North America region
and premium products, such as adult incontinence, all of which have
higher than category-average selling prices), increased pricing and
favorable foreign exchange impacts. Organic sales also increased mid-
single digits. Volume was unchanged as mid-single digits increases in
North America (due to product innovation) and in IMEA (due to market
growth, innovation and low base period due to pandemic-related
economic slowdowns) were offset by a mid-single digit volume decrease
in Europe (due to pandemic-related consumption declines) and low
single digit decreases in Latin America, Greater China and Asia Pacific
(all due to pandemic-related consumption

24 The Procter & Gamble Company

declines, competitive activities in certain markets and, to a lesser extent,
a high base period due to pandemic-related pantry loading). Market share
of the feminine care category increased more than half a point.

• Net sales in Family Care, which is predominantly a North American
business, increased mid-single digits driven by a low single digit volume
increase and increased pricing in the form of lower consumer
promotions, partially offset by unfavorable mix due to the
disproportionate growth of large pack sizes, which have lower than
category-average selling prices. The volume increase was driven by
pandemic-related consumption increases, pantry loading and to a lesser
extent, retailer inventory restocking. Organic sales increased low single
digits. North America’s share of the family care category decreased less
than a point.

Net earnings in fiscal 2021 increased 5% to $3.6 billion due to the increase in
net sales and a 40 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 sales. The gross margin increase was
driven by manufacturing cost savings and higher selling prices, partially
offset by unfavorable foreign exchange impacts and unfavorable mix (due to
the growth of large sizes which have lower than segment-average margins).
SG&A as a percentage of net sales increased marginally due primarily to an
increase in marketing spending, partially offset by the positive scale benefits
of the net sales increase.

CORPORATE

($ millions) 2021 2020 Change vs. 2020

Net sales $441 $395 12%
Net earnings/(loss) $(387) $(234) N/A

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

Corporate net sales increased 12% to $441 million in fiscal 2021 due to an
increase in the net sales of the incidental businesses managed at the corporate
level. Corporate net loss increased by $153 million in fiscal 2021 primarily
due to the $427 million ($512 million before tax) current period charge for
early debt extinguishment. Excluding this charge, Corporate had net earnings
of $40 million, an improvement of $274 million driven by lower restructuring
charges versus the base period and the current period unrealized gain from an
equity investment that became publicly traded in fiscal

2021, partially offset by higher interest expense and lower interest income in
the current period. Each of these items have been discussed above.

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. In fiscal 2012, the
Company initiated a productivity and cost savings plan, in addition to our
ongoing restructuring-type activities, to reduce costs and better leverage scale
in the areas of supply chain, research and development, marketing and
overheads. In fiscal 2017, the Company communicated specific elements of
an additional multi-year productivity and cost savings program. The plan was
designed to accelerate cost reductions by streamlining decision making,
manufacturing and other work processes to both fund the Company’s growth
strategy and increase the Company’s operating margin. The plan was
substantially completed in fiscal 2020, with spending totaling approximately
$782 million in that year.

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. However, we estimate that the underlying
restructuring costs incurred since 2012 (approximately $8.2 billion), along
with other non-manufacturing enrollment reductions since 2012 have
delivered approximately $3.7 billion in annual before-tax gross savings. In
fiscal 2021, the Company incurred restructuring costs within the range of our
historical ongoing level of $250 to $500 million annually.

Restructuring accruals of $278 million as of June 30, 2021 are classified as
current liabilities. Approximately 91% of the restructuring charges incurred in
fiscal 2021 either have been or will be settled with cash. Consistent with our
historical 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.

Refer to Note 3 to the Consolidated Financial Statements for more details on
the restructuring program and to the Operating Costs section of the MD&A
for more information about the total benefit to operating margins from our
total savings efforts.

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

The Procter & Gamble Company 25

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) 2021 2020

Net cash provided by operating activities $ 18,371 $ 17,403
Net cash provided/(used) by investing
activities (2,834) 3,045
Net cash used in financing activities (21,531) (8,367)
Adjusted Free Cash Flow 15,809 14,873
Adjusted Free Cash Flow Productivity 107 % 114 %

Operating Cash Flow

Operating cash flow was $18.4 billion in 2021, a 6% increase from the prior
year. Net earnings, adjusted for non-cash items (depreciation and
amortization, loss on early extinguishment of debt, share-based
compensation, deferred income taxes and gain on sale of assets) generated
approximately $17.9 billion of operating cash flow. Working capital and other
impacts generated $506 million of operating cash flow as summarized below.

• An increase in accounts receivable used $342 million of cash primarily
due to sales growth and lower relative sales at the end of the base period
in certain markets due to COVID-19. The number of days sales
outstanding increased approximately 1 day versus prior year.

• Higher inventory used $309 million of cash, primarily due to commodity
cost increases and business growth. Inventory days on hand increased
approximately 2 days primarily due to these same factors.

• Accounts payable, accrued and other liabilities increased, generating $1.4
billion of cash. About half of this was driven by extended payment terms
with our suppliers (see Extended Payment Terms and Supply Chain
Financing below). The remaining amount was driven by higher current
period marketing spending and to support the increase in inventory. Days
payable outstanding is approximately 87 days as of June 30, 2021, an
increase of 6 days versus prior year due to these same factors.

• Other net operating assets and liabilities declined, using $369 million of
cash, primarily driven by the payment of the current year portion of
transitional taxes due related to the U.S. Tax Act repatriation charge
($225 million) and pension related accruals and 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 and tax payments related to the Merck acquisition. 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 $15.8 billion in 2021, an increase of 6% 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, excluding the charges
for early debt extinguishment (which are not considered part of our ongoing
operations), was 107% in 2021.

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 a 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.

The 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, 2021, approximately 3% of our global suppliers have elected to
participate in the SCF. Payments to those suppliers during fiscal year 2021
total approximately $15 billion, which equals approximately 26% of our total
Cost of goods sold and SG&A for the period. For participating suppliers, we
believe substantially all of their receivables with the

26 The Procter & Gamble Company

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, 2021 and 2020, the amount due to suppliers
participating in the SCF and included in Accounts payable were
approximately $5 billion and $4 billion, respectively.

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 2022. 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 $2.8 billion in cash in 2021, primarily due to
capital spending. Net investing activities generated $3.0 billion in cash in
2020, mainly due to proceeds from sales and maturities of investment
securities, partially offset by capital spending.

Capital Spending. Capital expenditures, primarily to support capacity
expansion, innovation and cost efficiencies, were $2.8 billion in 2021 and
$3.1 billion in 2020. Capital spending as a percentage of net sales decreased
60 basis points to 3.7% in 2021.

Acquisitions. Acquisition activity used cash of $34 million in 2021, primarily
related to a minor Health Care acquisition. Acquisition activity used $58
million in 2020, primarily related to final contractual payments from the fiscal
2019 acquisition of Merck OTC, along with a minor Baby Care acquisition.

Proceeds from Divestitures and Other Asset Sales. Proceeds from asset sales
were $42 million in 2021, primarily from fixed asset sales and a minor brand
divestiture and $30 million in 2020, primarily from a minor brand divestiture.

Investment Securities. Investments used net cash of $55 million in 2021
primarily from the purchase of investment securities and generated $6.2
billion in 2020 primarily from sales and maturities of investment securities.

Financing Cash Flow

Net financing activities consumed $21.5 billion of cash in 2021, mainly due
to treasury stock purchases, dividends to shareholders and net debt reductions,
partially offset by the impact of proceeds received from stock option
exercises. Net financing activities consumed $8.4 billion in cash in 2020,
mainly due to treasury stock purchases and dividends to

shareholders, partially offset by a net debt increase and the impact of stock
options.

Dividend Payments. Our first discretionary use of cash is dividend payments.
Dividends per common share increased 7% to $3.2419 per share in 2021.
Total dividend payments to common and preferred shareholders were $8.3
billion in 2021 and $7.8 billion in 2020. In April 2021, the Board of Directors
declared a 10% increase in our quarterly dividend from $0.7907 to $0.8698
per share on Common Stock and Series A and B ESOP Convertible Class A
Preferred Stock. This is the 65th consecutive year that our dividend has
increased. We have paid a dividend for 131 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 $32.0 billion as of June 30, 2021
and $34.7 billion as of June 30, 2020. We used $3.9 billion for net debt
reductions, including $512 million for early debt extinguishment costs related
to the early retirement of $2.3 billion of debt. In 2020, we generated $4.8
billion from net debt increases, primarily due to the issuance of bonds of $5.0
billion.

Treasury Purchases. Total share repurchases were $11.0 billion in 2021 and
$7.4 billion in 2020.

Impact of Stock Options and Other. The exercise of stock options and other
financing activities generated $1.6 billion and $2.0 billion of cash in 2021 and
2020, respectively.

Liquidity

At June 30, 2021, our current liabilities exceeded current assets by $10.0
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, 2021, the Company had $4.7 billion of cash and
cash equivalents related to foreign subsidiaries, primarily in various Western
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.

The Procter & Gamble Company 27

On June 30, 2021, 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 2025 and November 2021, 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, 2021.

($ millions) Total Less Than 1 Year 1-3 Years 3-5 Years After 5 Years

RECORDED LIABILITIES
Total debt $ 31,967 $ 8,880 $ 4,928 $ 4,858 $ 13,301
Leases 953 219 349 175 210
U.S. Tax Act transitional charge 2,115 224 645 1,246 —
Uncertain tax positions 9 9 — — —
OTHER
Interest payments relating to long-term debt 5,020 599 1,010 866 2,545
Minimum pension funding 552 179 373 — —
Purchase obligations 1,982 809 599 259 315

TOTAL CONTRACTUAL COMMITMENTS $ 42,598 $ 10,919 $ 7,904 $ 7,404 $ 16,371

Represents the U.S. federal tax liability associated with the repatriation provisions of the U.S. Tax Act. Does not include any provisions made for foreign withholding taxes
on expected repatriations as the timing of those payments is uncertain.

As of June 30, 2021, the Company’s Consolidated Balance Sheet reflects a liability for uncertain tax positions of $803 million, including $176 million of interest and
penalties. Due to the high degree of uncertainty regarding the timing of future cash outflows of liabilities for uncertain tax positions beyond one year, a reasonable estimate
of the period of cash settlement beyond twelve months from the balance sheet date of June 30, 2021 cannot be made.

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 2023 are not currently determinable.

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.

(1)

(2)

(3)

(4)

(1)

(2)

(3)

(4)

28 The Procter & Gamble Company

SIGNIFICANT 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 significant 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 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 in
light of changing facts and circumstances, such as the progress of tax audits,
and adjust them accordingly. We have a number of 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 a number of estimates and assumptions inherent in
calculating the various components of our tax provision, certain changes or
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

The Procter & Gamble Company 29

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
2021, the average return on assets assumptions for pension plan assets and
OPRB assets was 6.5% 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 $140 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 1.7% 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 $210 million. The average discount rate on the OPRB plan of
3.2% reflects the higher interest rates generally applicable in the U.S., which
is where a majority of the plan participants receive benefits. A 100 basis point
change in the discount rate would impact annual after-tax OPRB expense by
approximately $15 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. The fair value estimates are based on
available historical information and on future expectations. We typically
estimate the fair value of these assets using the income method, which is
based on the present value of estimated future cash flows attributable to the
respective assets. The valuations used to establish and to test goodwill and
intangible assets for impairment are dependent on a number of significant
estimates and assumptions, including macroeconomic conditions, overall
category growth rates, competitive activities, cost containment and margin
progression, Company business plans and the discount rate applied to cash
flows.

Indefinite-lived intangible assets and goodwill are not amortized, but are
tested at least annually for impairment. Our ongoing annual impairment
testing for goodwill and indefinite-lived intangible assets occurs during the 3
months

ended December 31. Assumptions used in our impairment evaluations, such
as forecasted growth rates and cost of capital, are consistent with internal
projections and operating plans. We believe these estimates and assumptions
are reasonable and comparable to those that would be used by other
marketplace participants. Unanticipated market or macroeconomic events and
circumstances may occur, which could affect the accuracy or validity of the
estimates and assumptions. For example, future changes in the judgments,
assumptions and estimates that are used in our impairment testing for
goodwill and indefinite-lived intangible assets, including discount and tax
rates or future cash flow projections, could result in significantly different
estimates of the fair values. In addition, changes to, or a failure to achieve
business plans or deterioration of macroeconomic conditions could result in
reduced cash flows or higher discount rates, leading to a lower valuation that
would trigger an impairment of the goodwill and intangible assets of these
businesses.

We test individual indefinite-lived intangible assets by comparing the book
value of each asset to the estimated fair value. Our impairment testing for
goodwill is performed separately from our impairment testing of indefinite-
lived intangible assets. If the fair value of the reporting unit or indefinite-lived
intangible is less than its carrying value, that difference represents an
impairment.

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 intangible assets (e.g., certain brands, all 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.

Most of our goodwill reporting units are comprised of a combination of
legacy and acquired businesses and as a result have fair value cushions that, at
a minimum, exceed two times their underlying carrying values. Certain of our
goodwill reporting units, in particular Shave Care and Appliances, are
comprised entirely of acquired businesses and as a result have fair value
cushions that are not as high as our legacy businesses. The Appliances
reporting unit has a fair value that significantly exceeds the underlying
carrying value.

During fiscal 2019, a non-cash before- and after-tax impairment charge of
$6.8 billion was recognized to reduce the carrying amount of goodwill for the
Shave Care reporting unit, and a non-cash, before-tax impairment charge

30 The Procter & Gamble Company

of $1.6 billion ($1.2 billion after-tax) was recognized to reduce the carrying
amount of the Gillette indefinite-lived intangible asset to its fair value. The
underlying reductions in fair values were due in large part to significant
currency devaluations in a number of countries relative to the U.S. dollar, a
deceleration of category growth caused by changing grooming habits,
primarily in the developed markets, and an increased competitive market
environment in the U.S. and certain other markets. As a result of the fiscal
2019 impairment determined by the step two testing (that existed under
previous accounting standards), the Shave Care fair value exceeded the
carrying value by approximately 20% as of June 30, 2019. Because the
impairment testing for intangible assets has historically been a one-step
process, the Gillette indefinite-lived intangible asset fair value approximated
its carrying value at that date.

During our annual impairment testing during the quarter ended December 31,
2019, we reduced the discount rate used in the valuation based on
developments in the macroeconomic environment. As a result of this change
and updates to other underlying cash flow projections, the Shave Care fair
value exceeded its carrying value by more than 20% and the Gillette
indefinite-lived intangible asset’s fair value exceeded its carrying value by
approximately 5%.

The COVID-19 pandemic that originated during the second half of fiscal
2020 resulted in a reduction in shave incidents by consumers and a weakening
of certain currencies relative to the U.S. dollar, which led to a reduction in net

sales for Gillette-branded products. This resulted in a triggering event for the
Gillette indefinite-lived intangible asset, which caused us to perform an

additional impairment assessment for that asset as of June 30, 2020. That
assessment indicated that the fair value of the Gillette trade name

approximated its carrying value. Accordingly, no impairment charge was
recorded during the year ended June 30, 2020. Based on our annual
impairment testing during the three months ended December 31, 2020, the
Shave Care reporting unit’s fair value continued to exceed its carrying value
by more than 20% and the Gillette indefinite-lived intangible asset’s fair value
continued to approximate its carrying value.

The most significant assumptions utilized in the determination of the
estimated fair values of the Shave Care reporting unit and the Gillette
indefinite-lived intangible asset are the net sales and earnings growth rates
(including residual growth rates) and discount rate. The residual growth rate
represents the expected rate at which the reporting unit and Gillette brand are
expected to grow beyond the shorter-term business planning period. The
residual growth rate utilized in our fair value estimates is consistent with the
reporting unit and brand operating plans and approximates expected long-
term category market growth rates. The residual growth rate is dependent on
overall market growth rates, the competitive environment, inflation, relative
currency exchange rates and business activities that impact market share. As a
result, the residual growth rate could be adversely impacted by a sustained
deceleration in category growth, grooming habit changes, devaluation of
currencies

against the U.S. dollar or an increased competitive environment. The discount
rate, which is consistent with a weighted average cost of capital that is likely
to be expected by a market participant, is based upon industry required rates
of return, including consideration of both debt and equity components of the
capital structure. Our discount rate may be impacted by adverse changes in
the macroeconomic environment, volatility in the equity and debt markets or
other country specific factors, such as further devaluation of currencies
against the U.S. dollar. Spot rates as of the fair value measurement date are
utilized in our fair value estimates for cash flows outside the U.S. Another
key assumption in our fair value determination of the Gillette indefinite-lived
intangible asset is the royalty rate, which is driven by historical and estimated
future profitability of the underlying Gillette business. The royalty rate may
be impacted by significant adverse changes in long-term operating margins.

While management can and has implemented strategies to address these
events in the past, changes in operating plans or adverse changes in the future
could reduce the underlying cash flows used to estimate fair values and could
result in a decline in fair value that would trigger future impairment charges
of the Shave Care reporting unit’s goodwill and indefinite-lived intangibles.

The duration and severity of the pandemic could result in additional future
impairment charges for the Shave Care reporting unit goodwill and the
Gillette indefinite-lived intangible asset. While we have concluded that a
triggering event did not occur during the quarter ended June 30, 2021, the
Gillette indefinite-lived intangible asset is most susceptible to future
impairment risk. Our assessment of the Gillette intangible asset assumes the
net sales growth rates will begin to recover from the impact of the pandemic
during the next fiscal year. There continues to be a high level of uncertainty
relating to how the pandemic will evolve, how governments and consumers

will react and progress on the distribution of vaccines. Accordingly, there
continues to be risk related to this key assumption. A more prolonged
pandemic recovery period could impact the assumptions utilized in the
determination of the estimated fair values of Shave Care reporting unit and
the Gillette indefinite-lived intangible asset that are significant enough to
trigger an impairment. Net sales and earnings growth rates could be
negatively impacted by more prolonged reductions or changes in demand for

our shave care products, which may be caused by, among other things: the
temporary inability of consumers to purchase our products due to illness,
quarantine or other travel restrictions, financial hardship, changes in the use
and frequency of grooming products or by shifts in demand away from one or
more of our higher priced products to lower priced products. In addition,
relative global and country/regional macroeconomic factors could result in
additional and prolonged devaluation of other countries’ currencies relative to
the U.S. dollar. Finally, the discount rate utilized in our valuation model could
be impacted by changes in the underlying interest rates and risk premiums
included in the determination of the cost of

The Procter & Gamble Company 31

capital. As of June 30, 2021, the carrying values of the Shave Care goodwill
and the Gillette indefinite-lived intangible asset were $12.8 billion and $14.1
billion, respectively.

We performed a sensitivity analysis for the Shave Care reporting unit and the
Gillette indefinite-lived intangible asset during our annual impairment testing,
utilizing reasonably possible changes in the assumptions for the shorter-term
and residual growth rates, the discount rate, and the royalty rate 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 rate, any of which, in isolation, would result in an impairment of the
Gillette indefinite-lived intangible asset.

Approximate Percent Change in Estimated Fair Value

+25 bps Discount
Rate

-25 bps
Growth Rate

-50 bps Royalty
Rate

Shave Care goodwill
reporting unit (6)% (6)% N/A
Gillette indefinite-lived
intangible asset (6)% (6)% (4)%

See Note 4 to the Consolidated Financial Statements for additional discussion
on goodwill and intangible asset impairment testing results.

New 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, 2021.

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, 2021. 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 hedge exposures to interest rate movement 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 year ended June 30,
2021, 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 year ended June 30, 2021, 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.

As of and during the years ended June 30, 2021 and June 30, 2020, we did not
have any financial commodity hedging activity.

32 The Procter & Gamble Company

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 measures. We believe that these measures provide
useful perspective of 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 supplemental understanding of underlying sales
trends by providing sales growth on a consistent basis. This measure is used
in assessing achievement of management goals for at-risk compensation.

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

Year ended June 30, 2021
Net Sales
Growth

Foreign
Exchange

Impact

Acquisition &
Divestiture

Impact/Other (1)
Organic Sales

Growth

Beauty 8 % (2) % — % 6 %
Grooming 6 % — % — % 6 %
Health Care 10 % (1) % — % 9 %
Fabric & Home Care 10 % (1) % — % 9 %
Baby, Feminine &
Family Care 3 % (1) % — % 2 %
TOTAL
COMPANY 7 % (1) % — % 6 %

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, tax payments related to the Merck OTC
Consumer Healthcare acquisition in 2020 and transitional tax payments
resulting from the U.S. Tax Act in 2021 and 2020 (the Company incurred a
transitional tax liability of approximately $3.8 billion from the U.S. Tax Act,
which is payable over a period of 8 years). 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):

Operating
Cash Flow

Capital
Spending

Adjustments to
Operating Cash Flow Adjusted Free

Cash Flow

2021 $ 18,371 $ (2,787) $ 225 $ 15,809
2020 $ 17,403 $ (3,073) $ 543 $ 14,873

Adjustments to Operating Cash Flow include transitional tax payments resulting
from the U.S. Tax Act of $225 and $215 in 2021 and 2020, respectively, and
tax payments related to the Merck acquisition of $328 in 2020.

Adjusted Free Cash Flow Productivity. Adjusted free cash flow productivity
is defined as the ratio of adjusted free cash flow to net earnings excluding the
charges for early debt extinguishment (which are not considered part of our
ongoing operations). 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 Company’s long-term target is to generate
annual adjusted free cash flow productivity at or above 90 percent.

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

Adjusted
Free Cash

Flow
Net

Earnings

Early Debt
Extinguishment

Charges

Net Earnings
Excluding

Adjustments

Adjusted Free
Cash Flow

Productivity

2021 $ 15,809 $ 14,352 $ 427 $ 14,779 107 %
2020 14,873 13,103 — 13,103 114 %

(1)

(1)

(1)

The Procter & Gamble Company 33

Core EPS. Core EPS is a measure of the Company’s diluted net earnings per share from continuing operations adjusted as indicated. Management views this non-
GAAP measure as a useful supplemental measure of Company performance over time. Core EPS 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 year 2021, the Company recorded after tax charges of $427 million ($512 million before tax), 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 level of restructuring activities. Such activities have resulted in ongoing annual
restructuring related charges of approximately $250 – $500 million before tax. Beginning in fiscal 2012, the Company had a strategic productivity and cost
savings initiative that resulted in incremental restructuring charges through fiscal 2020. The adjustment to Core earnings includes only the restructuring costs
above the normal recurring level of restructuring costs. In fiscal 2021, the Company incurred restructuring costs within our historical ongoing level.

We do not view the above items to be indicative of underlying business results and their exclusion from Core earnings measures provides a more comparable
measure of year-on-year results. These items are also excluded when evaluating senior management in determining their at-risk compensation.

THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per Share Amounts)

Reconciliation of Non-GAAP Measures
Twelve Months Ended June 30, 2021 Twelve Months Ended June 30, 2020

AS REPORTED
(GAAP)

EARLY DEBT
EXTINGUISHMENT

NON-GAAP
(CORE)

AS REPORTED
(GAAP)

INCREMENTAL
RESTRUCTURING

NON-GAAP
(CORE)

NET EARNINGS ATTRIBUTABLE TO P&G 14,306 427 14,733 13,027 415 13,442

Core EPS Core EPS

DILUTED NET EARNINGS PER COMMON SHARE $ 5.50 $ 0.16 $ 5.66 $ 4.96 $ 0.16 $ 5.12

Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.

CHANGE VERSUS YEAR AGO

CORE EPS 11 %

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 under Management’s Disclosure and Analysis, and Note
9 to the Consolidated Financial Statements.

(1)

(1)

34 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 significant accounting
policies, financial reporting and internal control matters.

The Company’s internal control over financial reporting includes a Control Self-Assessment Program that is conducted annually for critical financial reporting
areas of the Company and is audited by our Global Internal Audit organization. Management takes the appropriate action to correct any identified control
deficiencies. Global Internal Audit also performs financial and compliance audits around the world, provides training, and continuously improves our internal
control processes.

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, 2021, 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, 2021, 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, 2021, as stated in their report which is included herein.

/s/ David S. Taylor
(David S. Taylor)
Chairman of the Board, President and Chief Executive Officer

/s/ Andre Schulten

(Andre Schulten)
Chief Financial Officer

August 6, 2021

The Procter & Gamble Company 35

REPORT 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, 2021 and
2020, 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, 2021 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, 2021 and 2020, and the results of its operations and its cash flows for each of the three years
in the period ended June 30, 2021, 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, 2021, 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 6, 2021 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.

Goodwill and Intangible Assets – Shave Care Goodwill and Gillette Indefinite Lived Intangible Asset – Refer to Notes 1 and 4 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill and indefinite lived intangible assets for impairment involves the comparison of the fair value of each reporting unit or
indefinite lived intangible asset 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 assets. 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 rates. 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 assessments of the Shave Care
reporting unit as of October 1, 2020 and the Gillette brand indefinite lived intangible asset (the “Gillette brand”) as of December 31, 2020. Because the estimated
fair values exceeded their carrying values, no impairments were recorded. As of June 30, 2021, the Shave Care reporting unit goodwill was $12.8 billion, and the
Gillette brand was $14.1 billion.

We identified the Company’s impairment evaluations of goodwill for the Shave Care reporting unit and the Gillette brand as a critical audit matter because of the
significant judgments made by management to estimate the fair values of the reporting unit and the brand. 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 rates, 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 rates

36 The Procter & Gamble Company

for the Shave Care reporting unit and the Gillette brand included the following, among others:

• We tested the effectiveness of controls over goodwill and indefinite lived intangible assets, 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 rates.

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

• 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 including consideration of the effects related to the COVID-19 pandemic.

• Internal communications to management and the Board of Directors.

• Forecasted information included in Company press releases as well as 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 rates by:

• Testing the source information underlying the determination of net sales and earnings growth rates, royalty rates, and discount rates and the mathematical
accuracy of the calculations.

• Developing a range of independent estimates for the discount rates and comparing those to the discount rates selected by management.

/s/ Deloitte & Touche LLP

Cincinnati, Ohio

August 6, 2021

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

The Procter & Gamble Company 37

REPORT 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, 2021, 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, 2021, 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, 2021, of the Company and our report dated August 6, 2021, 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 6, 2021

38 The Procter & Gamble Company

Consolidated Statements of Earnings

Amounts in millions except per share amounts; Years ended June 30 2021 2020 2019

NET SALES $ 76,118 $ 70,950 $ 67,684
Cost of products sold 37,108 35,250 34,768
Selling, general and administrative expense 21,024 19,994 19,084
Goodwill and indefinite-lived intangible impairment charges — — 8,345

OPERATING INCOME 17,986 15,706 5,487

Interest expense (502) (465) (509)
Interest income 45 155 220
Other non-operating income, net 86 438 871

EARNINGS BEFORE INCOME TAXES 17,615 15,834 6,069
Income taxes 3,263 2,731 2,103

NET EARNINGS 14,352 13,103 3,966

Less: Net earnings attributable to noncontrolling interests 46 76 69

NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE $ 14,306 $ 13,027 $ 3,897

NET EARNINGS PER COMMON SHARE:
Basic $ 5.69 $ 5.13 $ 1.45
Diluted $ 5.50 $ 4.96 $ 1.43

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

(1)

(1)

See accompanying Notes to Consolidated Financial Statements.

The Procter & Gamble Company 39

Consolidated Statements of Comprehensive Income

Amounts in millions; Years ended June 30 2021 2020 2019

NET EARNINGS $ 14,352 $ 13,103 $ 3,966
OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX

Foreign currency translation (net of tax of $(266), $59 and $78, respectively) 1,023 (1,083) (213)
Unrealized gains/(losses) on investment securities (net of tax of $5, $(1) and $0, respectively) 16 (12) 184
Unrealized gains/(losses) on defined benefit retirement plans (net of tax of $445, $(42) and $22, respectively) 1,386 (150) 169

TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX 2,425 (1,245) 140

TOTAL COMPREHENSIVE INCOME 16,777 11,858 4,106

Less: Total comprehensive income attributable to noncontrolling interests 50 60 70

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER & GAMBLE $ 16,727 $ 11,798 $ 4,036

See accompanying Notes to Consolidated Financial Statements.

40 The Procter & Gamble Company

Consolidated Balance Sheets

Amounts in millions except stated values; As of June 30 2021 2020

Assets
CURRENT ASSETS

Cash and cash equivalents $ 10,288 $ 16,181
Accounts receivable 4,725 4,178
INVENTORIES
Materials and supplies 1,645 1,414
Work in process 719 674
Finished goods 3,619 3,410

Total inventories 5,983 5,498
Prepaid expenses and other current assets 2,095 2,130

TOTAL CURRENT ASSETS 23,091 27,987

PROPERTY, PLANT AND EQUIPMENT, NET 21,686 20,692
GOODWILL 40,924 39,901
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET 23,642 23,792
OTHER NONCURRENT ASSETS 9,964 8,328

TOTAL ASSETS $ 119,307 $ 120,700

Liabilities and Shareholders’ Equity
CURRENT LIABILITIES

Accounts payable $ 13,720 $ 12,071
Accrued and other liabilities 10,523 9,722
Debt due within one year 8,889 11,183

TOTAL CURRENT LIABILITIES 33,132 32,976

LONG-TERM DEBT 23,099 23,537
DEFERRED INCOME TAXES 6,153 6,199
OTHER NONCURRENT LIABILITIES 10,269 11,110

TOTAL LIABILITIES 72,653 73,822
SHAREHOLDERS’ EQUITY

Convertible Class A preferred stock, stated value $1 per share (600 shares authorized) 870 897
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: 2021 – 4,009.2, 2020 – 4,009.2) 4,009 4,009
Additional paid-in capital 64,848 64,194
Reserve for ESOP debt retirement (1,006) (1,080)
Accumulated other comprehensive loss (13,744) (16,165)
Treasury stock, at cost (shares held: 2021 – 1,579.5, 2020 – 1,529.5) (114,973) (105,573)
Retained earnings 106,374 100,239
Noncontrolling interest 276 357

TOTAL SHAREHOLDERS’ EQUITY 46,654 46,878

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 119,307 $ 120,700

See accompanying Notes to Consolidated Financial Statements.

The Procter & Gamble Company 41

Consolidated Statements of Shareholders’ Equity

Dollars in millions except per
share amounts; shares in
thousands

Common Stock
Preferred

Stock
Additional

Paid-In Capital

Reserve for
ESOP Debt
Retirement

Accumulated
Other

Comp-rehensive
Income/(Loss) Treasury Stock

Retained
Earnings

Non-controlling
Interest

Total Share-
holders’
EquityShares Amount

BALANCE JUNE 30, 2018 2,498,093 $4,009 $967 $63,846 ($1,204) ($14,749) ($99,217) $98,641 $590 $52,883
Impact of adoption of new
accounting standards

(326) (200) (27) (553)

Net earnings 3,897 69 3,966
Other comprehensive
income/(loss)

139 1 140

Dividends and dividend
equivalents ($2.8975 per share):
Common (7,256) (7,256)
Preferred (263) (263)
Treasury stock purchases (53,714) (5,003) (5,003)
Employee stock plans 55,734 93 3,781 3,874
Preferred stock conversions 4,638 (39) 6 33 —
ESOP debt impacts 58 99 157
Noncontrolling interest, net (118) (248) (366)

BALANCE JUNE 30, 2019 2,504,751 $4,009 $928 $63,827 ($1,146) ($14,936) ($100,406) $94,918 $385 $47,579

Net earnings 13,027 76 13,103
Other comprehensive
income/(loss)

(1,229) (16) (1,245)

Dividends and dividend
equivalents ($3.0284 per share):
Common (7,551) (7,551)
Preferred (263) (263)
Treasury stock purchases (61,346) (7,405) (7,405)
Employee stock plans 32,603 362 2,212 2,574
Preferred stock conversions 3,738 (31) 5 26 —
ESOP debt impacts 66 108 174
Noncontrolling interest, net (88) (88)

BALANCE JUNE 30, 2020 2,479,746 $4,009 $897 $64,194 ($1,080) ($16,165) ($105,573) $100,239 $357 $46,878

Net earnings 14,306 46 14,352
Other comprehensive
income/(loss)

2,421 4 2,425

Dividends and dividend
equivalents ($3.2419 per share):
Common (8,020) (8,020)
Preferred (271) (271)
Treasury stock purchases (81,343) (11,009) (11,009)
Employee stock plans 28,001 650 1,586 2,236
Preferred stock conversions 3,302 (27) 4 23 —
ESOP debt impacts 74 120 194
Noncontrolling interest, net (131) (131)

BALANCE JUNE 30, 2021 2,429,706 $4,009 $870 $64,848 ($1,006) ($13,744) ($114,973) $106,374 $276 $46,654

See accompanying Notes to Consolidated Financial Statements.

42 The Procter & Gamble Company

Consolidated Statements of Cash Flows

Amounts in millions; Years ended June 30 2021 2020 2019
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR $ 16,181 $ 4,239 $ 2,569
OPERATING ACTIVITIES

Net earnings 14,352 13,103 3,966
Depreciation and amortization 2,735 3,013 2,824
Loss on early extinguishment of debt 512 — —
Share-based compensation expense 540 558 515
Deferred income taxes (258) (596) (411)
Loss/(gain) on sale of assets (16) 7 (678)
Goodwill and indefinite-lived intangible impairment charges — — 8,345
Change in accounts receivable (342) 634 (276)
Change in inventories (309) (637) (239)
Change in accounts payable, accrued and other liabilities 1,391 1,923 1,856
Change in other operating assets and liabilities (369) (710) (973)
Other 135 108 313

TOTAL OPERATING ACTIVITIES 18,371 17,403 15,242
INVESTING ACTIVITIES

Capital expenditures (2,787) (3,073) (3,347)
Proceeds from asset sales 42 30 394
Acquisitions, net of cash acquired (34) (58) (3,945)
Purchases of investment securities (55) — (158)
Proceeds from sales and maturities of investment securities — 6,151 3,628
Change in other investments — (5) (62)

TOTAL INVESTING ACTIVITIES (2,834) 3,045 (3,490)
FINANCING ACTIVITIES

Dividends to shareholders (8,263) (7,789) (7,498)
Increases/(reductions) in short-term debt (3,333) 2,345 (2,215)
Additions to long-term debt 4,417 4,951 2,367
Reductions of long-term debt (4,987) (2,447) (969)
Treasury stock purchases (11,009) (7,405) (5,003)
Impact of stock options and other 1,644 1,978 3,324

TOTAL FINANCING ACTIVITIES (21,531) (8,367) (9,994)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED
CASH 101 (139) (88)

CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (5,893) 11,942 1,670

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR $ 10,288 $ 16,181 $ 4,239

SUPPLEMENTAL DISCLOSURE

Cash payments for interest $ 531 $ 434 $ 497
Cash payments for income taxes 3,822 3,550 3,064

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

(1)

(1)

See accompanying Notes to Consolidated Financial Statements.

The Procter & Gamble Company 43

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 more than 180
countries and territories primarily through mass merchandisers, e-commerce,
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.

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, in regard to 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 $1.9 billion in 2021, $1.8 billion in 2020 and $1.9 billion in
2019. Advertising costs, charged to expense as incurred, include worldwide
television, print, radio, internet and in-store advertising expenses and were
$8.2 billion in 2021, $7.3 billion in 2020 and $6.8 billion in 2019. 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 net acquisition and
divestiture gains, net non-service costs related to defined benefit plans,
investment income and other non-operating items.

Amounts in millions of dollars except per share amounts or as otherwise specified.

44 The Procter & Gamble Company

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
financing activities. Realized gains and losses from non-qualifying derivative
instruments used to hedge currency exposures resulting from intercompany
financing transactions are also 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.

In addition to equity investments, we have historically held other investment
securities, primarily consisting of readily marketable debt securities.
Unrealized gains or losses from debt securities classified as trading, if any,
are charged to earnings. Unrealized gains on debt securities classified as
available-for-sale are recorded in OCI. Unrealized losses on available-for-sale
debt securities are charged to either earnings or OCI depending on our intent
and ability to retain the security until we recover the full cost basis and the
extent of the loss attributable to the creditworthiness of the issuer. Debt
securities are included as Prepaid expenses and other current assets and Other
noncurrent assets in the Consolidated Balance Sheets.

The Company also holds highly-liquid investments, including treasury bills,
commercial paper, U.S. and foreign

government securities and money market funds with original maturity dates
of three months or less. 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 a number of 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.

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 45

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

On July 1, 2020, we adopted ASU 2017-04, “Intangibles-Goodwill and Other
(Topic 350): Simplifying the Test for Goodwill Impairment.” The standard
simplifies the accounting for goodwill impairment by requiring a goodwill
impairment to be measured using a single step impairment model, whereby
the impairment equals the difference between the carrying amount and the
estimated fair value of the specified reporting units in their entirety. This
eliminated the second step of the previous impairment model that required
companies to first estimate the fair value of all assets in a reporting unit and
measure impairments based on those estimated fair values and a residual
measurement approach. It also specifies that any loss recognized should not
exceed the total amount of goodwill allocated to that reporting unit. The
impact of the new standard will depend on the specific facts and
circumstances of future individual impairments, if any.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform
(Topic 848): Facilitation of the Effects of Reference Rate Reform on
Financial Reporting.” The amendments provide optional guidance for a
limited time to ease the potential burden in accounting for reference rate
reform. The new guidance provides optional expedients and exceptions for
applying U.S. GAAP to contracts and other transactions affected by reference
rate reform if certain criteria are met and to hedging relationships, including
derivative instruments, if there is a change to the interest rates used for
discounting, margining or contract price alignment. These amendments are
effective immediately and may be applied prospectively to contract
modifications made and hedging relationships entered into or evaluated on or
before December 31, 2022. We are currently evaluating our contracts and the
optional expedients provided by the new standard.

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 (Conditioner, Shampoo, Styling Aids, Treatments);
Skin and Personal Care (Antiperspirant and Deodorant, Personal
Cleansing, Skin Care);

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

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

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

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

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, certain significant 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.

Amounts in millions of dollars except per share amounts or as otherwise specified.

46 The Procter & Gamble Company

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
Years ended June 30 2021 2020 2019

Fabric Care 22% 22% 22%
Home Care 12% 11% 10%
Baby Care 10% 11% 12%
Skin and Personal Care 10% 10% 10%
Hair Care 9% 9% 10%
Family Care 9% 9% 9%
Oral Care 8% 8% 8%
Shave Care 7% 7% 8%
Feminine Care 6% 6% 6%
Personal Health Care 5% 5% 4%
All Other 2% 2% 1%

TOTAL 100% 100% 100%

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

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

Years ended June 30 2021 2020 2019

NET SALES
United States $ 33.7 $ 31.3 $ 28.6
International $ 42.4 $ 39.7 $ 39.1

LONG-LIVED ASSETS
United States $ 10.1 $ 9.9 $ 10.0
International $ 11.6 $ 10.8 $ 11.3

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 2021, 2020 and 2019. No
other customer represents more than 10% of our consolidated net sales.

Global Segment Results Net Sales

Earnings/(Loss)
Before

Income Taxes Net Earnings/(Loss)

Depreciation
and

Amortization
Total
Assets

Capital
Expenditures

BEAUTY 2021 $ 14,417 $ 4,018 $ 3,210 $ 333 $ 5,587 $ 386
2020 13,359 3,437 2,737 320 5,531 397
2019 12,897 3,282 2,637 272 5,362 634

GROOMING 2021 6,440 1,728 1,427 378 20,668 291
2020 6,069 1,613 1,329 406 20,589 305
2019 6,199 1,777 1,529 429 20,882 367

HEALTH CARE 2021 9,956 2,398 1,851 372 7,976 364
2020 9,028 2,156 1,652 350 7,726 338
2019 8,218 1,984 1,519 294 7,708 363

FABRIC & HOME CARE 2021 26,014 5,986 4,622 646 8,334 1,006
2020 23,735 5,426 4,154 605 7,745 887
2019 22,080 4,601 3,518 557 7,620 984

BABY, FEMININE & FAMILY
CARE 2021 18,850 4,723 3,629 846 8,666 814

2020 18,364 4,534 3,465 839 8,628 764
2019 17,806 3,593 2,734 861 9,271 819

CORPORATE 2021 441 (1,238) (387) 160 68,076 (74)
2020 395 (1,332) (234) 493 70,481 382
2019 484 (9,168) (7,971) 411 64,252 180

TOTAL COMPANY 2021 $ 76,118 $ 17,615 $ 14,352 $ 2,735 $ 119,307 $ 2,787
2020 70,950 15,834 13,103 3,013 120,700 3,073
2019 67,684 6,069 3,966 2,824 115,095 3,347

The Corporate reportable segment includes the $8.3 billion non-cash before-tax ($8.0 billion after-tax) goodwill and intangible asset impairment charge in fiscal 2019. For additional details
on goodwill and intangible assets see Note 4.

(1)

(1)

(1)

(1)

(1)

(1)

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 47

NOTE 3

SUPPLEMENTAL FINANCIAL INFORMATION

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

As of June 30 2021 2020

PROPERTY, PLANT AND EQUIPMENT
Buildings $ 8,165 $ 7,700
Machinery and equipment 35,367 33,260
Land 808 777
Construction in progress 2,358 2,034
TOTAL PROPERTY, PLANT AND
EQUIPMENT 46,698 43,771
Accumulated depreciation (25,012) (23,079)
PROPERTY, PLANT AND EQUIPMENT,
NET $ 21,686 $ 20,692

Selected components of current and noncurrent liabilities were as follows:

As of June 30 2021 2020

ACCRUED AND OTHER LIABILITIES – CURRENT
Marketing and promotion $ 4,140 $ 3,531
Compensation expenses 2,145 1,921
Taxes payable 637 693
Restructuring reserves 278 472
Leases 219 239
Other 3,104 2,866

TOTAL $ 10,523 $ 9,722

OTHER NONCURRENT LIABILITIES
Pension benefits $ 5,452 $ 6,223
U.S. Tax Act transitional tax payable 1,891 2,121
Other retiree benefits 922 965
Uncertain tax positions 794 580
Long term operating leases 631 652
Other 579 569

TOTAL $ 10,269 $ 11,110

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 the ongoing program have generally ranged from $250 to $500
annually. In fiscal 2012, the Company initiated an incremental restructuring
program (covering fiscal 2012 through 2017) as part of a productivity and
cost savings plan to accelerate cost reductions in the areas of supply chain,
research and development, marketing activities and overhead expenses.

In fiscal 2017, the Company announced specific elements of an incremental
multi-year productivity and cost savings plan

to further reduce costs in the areas of supply chain, certain marketing
activities and overhead expense, which resulted in incremental restructuring
charges through fiscal 2020. For fiscal 2021, restructuring charges were in
line with our historical ongoing program.

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
$330 and $782 for the years ended June 30, 2021 and 2020. Of the charges
incurred for fiscal year 2021, $176 were recorded in SG&A, $134 in Costs of
products sold, and $20 in Other non-operating income, net. Of the charges
incurred in fiscal year 2020, $155 were recorded in SG&A, $614 in Costs of
products sold, and $13 in Other non-operating income, net. The following
table presents restructuring activity for the years ended June 30, 2021 and
2020:

Separations
Asset-Related

Costs Other Total

RESERVE JUNE 30,
2019 $ 280 $ — $ 188 $ 468
Cost incurred and charged
to expense 221 372 189 782
Cost paid/settled (216) (372) (190) (778)
RESERVE JUNE 30,
2020 285 — 187 472
Cost incurred and charged
to expense 127 24 179 330
Cost paid/settled (236) (24) (264) (524)
RESERVE JUNE 30,
2021 $ 176 $ — $ 102 $ 278

Amounts in millions of dollars except per share amounts or as otherwise specified.

48 The Procter & Gamble Company

Consistent with our historical policies for ongoing restructuring-type
activities, the restructuring charges are funded by and included within
Corporate for both management and segment reporting. Accordingly, all of
the charges are included within the Corporate reportable segment.

However, for information purposes, the following table summarizes the total
restructuring costs related to our reportable segments:

Years ended June 30 2021 2020 2019

Beauty $ 13 $ 54 $ 49
Grooming 25 102 65
Health Care 51 136 23
Fabric & Home Care 22 75 84
Baby, Feminine & Family Care 29 192 226
Corporate 190 223 307

Total Company $ 330 $ 782 $ 754

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:

Beauty Grooming Health Care
Fabric & Home

Care
Baby, Feminine
& Family Care Total Company

BALANCE AT JUNE 30, 2019 – NET $ 12,985 $ 12,881 $ 7,972 $ 1,855 $ 4,580 $ 40,273
Acquisitions and divestitures (1) — (46) — 5 (42)
Translation and other (82) (66) (140) (14) (28) (330)

BALANCE AT JUNE 30, 2020 – NET 12,902 12,815 7,786 1,841 4,557 39,901
Acquisitions and divestitures — — 16 — — 16
Translation and other 355 280 244 32 96 1,007

BALANCE AT JUNE 30, 2021 – NET $ 13,257 $ 13,095 $ 8,046 $ 1,873 $ 4,653 $ 40,924

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
underlying indefinite-lived intangible assets to their respective carrying
values. We typically use an income method to estimate the fair value of these
assets, which is based on forecasts of the expected future cash flows
attributable to the respective assets. 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). 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.

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 2021 driven by a minor brand acquisition in
the Health Care reportable segment and currency translation across all
reportable segments.

Goodwill decreased in fiscal 2020 primarily due to opening balance sheet
adjustments from the fiscal 2019 acquisition of the over-the-counter (OTC)
healthcare business of Merck KGaA (Merck OTC) in the Health Care
reportable segment (see Note 14) and currency translation across all
reportable segments.

During fiscal 2019, we determined that the estimated fair value of our Shave
Care reporting unit was less than its carrying value. We also determined that
the estimated fair value of the Gillette indefinite-lived intangible asset was
less than its carrying value. As a result, we recorded non-cash

(1)

(1)

(1)

(1)

(1)

(1)

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 49

impairment charges for both assets. These reductions were due in large part to
significant currency devaluations in a number of countries relative to the U.S.
dollar, a deceleration of category growth caused by changing grooming
habits, primarily in the developed markets, and an increased competitive
market environment in the U.S. and certain other markets, which collectively
resulted in reduced cash flow projections. A non-cash, before and after-tax
impairment charge of $6.8 billion was recognized to reduce the carrying
amount of goodwill for the Shave Care reporting unit. Additionally, a non-
cash, before-tax impairment charge of $1.6 billion ($1.2 billion after-tax) was
recognized to reduce the carrying amount of the Gillette indefinite-lived
intangible asset to its estimated fair value as of June 30, 2019.

Identifiable intangible assets were comprised of:

2021 2020

As of June 30

Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
Amortization

INTANGIBLE ASSETS WITH DETERMINABLE LIVES
Brands $ 3,908 $ (2,546) $ 3,820 $ (2,347)
Patents and
technology 2,781 (2,575) 2,776 (2,513)
Customer
relationships 1,789 (882) 1,752 (778)
Other 150 (97) 143 (92)

TOTAL $ 8,628 $ (6,100) $ 8,491 $ (5,730)
INTANGIBLE ASSETS WITH INDEFINITE LIVES
Brands 21,114 — 21,031 —

TOTAL $ 29,742 $ (6,100) $ 29,522 $ (5,730)

Amortization expense of intangible assets was as follows:

Years ended June 30 2021 2020 2019

Intangible asset amortization $ 318 $ 360 $ 349

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

Years ending June 30 2022 2023 2024 2025 2026

Estimated amortization
expense $ 301 $ 289 $ 277 $ 259 $ 243

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.

On December 22, 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 Global Intangible Low-Taxed Income (GILTI) provision of the
U.S. Tax Act requires the Company to include in its U.S. income tax return
foreign subsidiary earnings in excess of an allowable return on the foreign
subsidiary’s tangible assets. An accounting policy election is available to
account for the tax effects of GILTI either as a current period expense when
incurred, or to recognize deferred taxes for book and tax basis differences
expected to reverse as GILTI in future years. We have elected to account for
the tax effects of GILTI as a current period expense when incurred.

Earnings before income taxes consisted of the following:

Years ended June 30 2021 2020 2019

United States $ 10,858 $ 10,338 $ 1,659
International 6,757 5,496 4,410

TOTAL $ 17,615 $ 15,834 $ 6,069

Income taxes consisted of the following:

Years ended June 30 2021 2020 2019

CURRENT TAX EXPENSE
U.S. federal $ 1,663 $ 1,266 $ 1,064
International 1,534 1,769 1,259
U.S. state and local 324 292 191

TOTAL 3,521 3,327 2,514
DEFERRED TAX EXPENSE/(BENEFIT)
U.S. federal (65) 39 (296)
International and other (193) (635) (115)

TOTAL (258) (596) (411)

TOTAL TAX EXPENSE $ 3,263 $ 2,731 $ 2,103

Amounts in millions of dollars except per share amounts or as otherwise specified.

50 The Procter & Gamble Company

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

Years ended June 30 2021 2020 2019

U.S. federal statutory income tax
rate 21.0 % 21.0 % 21.0 %
Country mix impacts of foreign
operations (0.5)% (0.1)% (0.5)%
State income taxes, net of federal
benefit 1.3 % 1.4 % 2.6 %
Excess tax benefits from the
exercise of stock options (1.6)% (1.6)% (3.8)%
Tax benefit from simplification
of legal entity structure — % (1.4)% — %
Foreign derived intangible
income deduction (FDII) (1.0)% (1.0)% (2.2)%
Changes in uncertain tax
positions (0.1)% 0.1 % (0.3)%
Goodwill impairment — % — % 22.8 %
Other (0.6)% (1.2)% (4.9)%
EFFECTIVE INCOME TAX
RATE 18.5 % 17.2 % 34.7 %

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 costs charged to shareholders’ equity totaled $215 for the year ended
June 30, 2021. This primarily relates to the tax effects of certain adjustments
to pension obligations recorded in in shareholders’ equity, partially offset by
the tax effects of net investment hedges. Tax benefits credited to shareholders’
equity totaled $18 for the year ended June 30, 2020. This primarily relates to
the tax effects of certain adjustments to pension obligations and unrealized
foreign exchange losses recorded in shareholders’ equity, partially offset by
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 $21 billion of earnings that are
considered permanently reinvested.

A reconciliation of the beginning and ending liability for uncertain tax
positions is as follows:

Years ended June 30 2021 2020 2019

BEGINNING OF YEAR $ 485 $ 466 $ 470
Increases in tax positions for prior
years 157 60 85
Decreases in tax positions for prior
years (34) (21) (94)
Increases in tax positions for current
year 60 82 71
Settlements with taxing authorities (26) (83) (37)
Lapse in statute of limitations (24) (12) (27)
Currency translation 9 (7) (2)

END OF YEAR $ 627 $ 485 $ 466

Included in the total liability for uncertain tax positions at June 30, 2021 is
$408 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 40-50 jurisdictional audits
underway at various stages of completion. We evaluate our tax positions and
establish liabilities for uncertain tax positions that may be challenged by local
authorities and may not be fully sustained, despite our belief that the
underlying tax positions are fully supportable. Uncertain tax positions are
reviewed on an ongoing basis and are adjusted in light of changing facts and
circumstances, including progress of tax audits, developments in case law and
the closing of statutes of limitation. Such adjustments are reflected in the tax
provision as appropriate. We have tax years open ranging from 2008 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 $10, 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, 2021, 2020 and 2019, we had accrued interest of
$166, $141 and $133 and accrued penalties of $10, $17 and $17, respectively,
which are not included in the above table. During the fiscal years ended
June 30, 2021, 2020 and 2019, we recognized $38, $39 and $40 in interest
expense and $6, $1 and $2 in penalties expense, respectively.

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 51

Deferred income tax assets and liabilities were comprised of the following:

As of June 30 2021 2020

DEFERRED TAX ASSETS
Pension and other retiree benefits $ 1,476 $ 1,602
Loss and other carryforwards 1,030 875
Accrued marketing and promotion 424 353
Stock-based compensation 386 398
Capitalized research & development 358 —
Fixed assets 223 218
Lease liabilities 196 190
Unrealized loss on financial and foreign
exchange transactions 109 64
Inventory 31 27
Accrued interest and taxes 22 20
Other 878 829
Valuation allowances (569) (486)

TOTAL $ 4,564 $ 4,090

DEFERRED TAX LIABILITIES
Goodwill and intangible assets $ 5,761 $ 5,775
Fixed assets 1,512 1,485
Lease right-of-use assets 191 185
Unrealized gain on financial and foreign
exchange transactions 111 169
Foreign withholding tax on earnings to be
repatriated 108 118
Other retiree benefits 645 265
Other 175 101

TOTAL $ 8,503 $ 8,098

Net operating loss carryforwards were $3.0 billion at June 30, 2021 and $2.9
billion at June 30, 2020. If unused, approximately $900 will expire between
2021 and 2040. The remainder, totaling $2.1 billion at June 30, 2021, 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. For fiscal years 2021 and 2020, 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 stock-based awards based on the treasury stock method (see Note 7) and the assumed conversion of preferred stock (see
Note 8).

For fiscal year 2019, Diluted net earnings per common share do not include the assumed conversion of preferred stock because to do so would have been
antidilutive, due to the lower Net earnings driven by the Shave Care impairment charges (see Note 4). Therefore, Diluted net earnings per common share are
calculated by dividing Net earnings attributable to Procter & Gamble less preferred dividends 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 stock-based awards based on the treasury stock method.

Amounts in millions of dollars except per share amounts or as otherwise specified.

52 The Procter & Gamble Company

Net earnings per share were calculated as follows:
Years ended June 30 2021 2020 2019

CONSOLIDATED AMOUNTS
Net earnings $ 14,352 $ 13,103 $ 3,966
Less: Net earnings attributable to noncontrolling interests 46 76 69

Net earnings attributable to P&G 14,306 13,027 3,897
Less: Preferred dividends 271 263 263

Net earnings attributable to P&G available to common shareholders (Basic) $ 14,035 $ 12,764 $ 3,634

Net earnings attributable to P&G available to common shareholders (Diluted) $ 14,306 $ 13,027 $ 3,634

SHARES IN MILLIONS
Basic weighted average common shares outstanding 2,465.8 2,487.1 2,503.6
Add: Effect of dilutive securities

Stock options and other unvested equity awards 52.5 52.7 35.9
Convertible preferred shares 82.7 86.0 —

Diluted weighted average common shares outstanding 2,601.0 2,625.8 2,539.5

NET EARNINGS PER SHARE
Basic $ 5.69 $ 5.13 $ 1.45
Diluted $ 5.50 $ 4.96 $ 1.43

Excludes 9 million, 6 million and 13 million in 2021, 2020 and 2019, respectively, of weighted average stock options outstanding because the exercise price of these options
was greater than their average market value or their effect was antidilutive.
See an overview of the preferred shares in Note 8. In fiscal year 2019, preferred shares exclude 90 million because to do so would have been antidilutive, due to lower Net
earnings driven by the Shave Care impairment charges (see Note 4).
Net earnings per share are calculated on Net earnings attributable to Procter & Gamble.

NOTE 7

STOCK-BASED COMPENSATION

The Company has two primary stock-based compensation programs under
which we annually grant stock option, restricted stock unit (RSU) and
performance stock unit (PSU) awards to key managers and directors.

In our main long-term incentive program, key managers can elect to receive
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. Effective in fiscal year 2017, RSUs vest and
settle in shares of common stock three years from the grant date. RSUs
granted prior to fiscal year 2017 vest and settle in shares of common stock
five 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.
Effective for fiscal year 2019, we added a Relative Total Shareholder Return
(R-TSR) modifier to the PSUs, 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.

A total of 150 million shares of common stock were newly authorized for
issuance under the stock-based compensation plan approved by shareholders
in 2019. A total of 144 million shares remain available for grant under the
2019 plan.

The Company recognizes stock-based compensation expense based on the fair
value of the awards at the date of grant. The fair value is amortized 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 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. Stock-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. Total expense and related tax benefit were as follows:

Years ended June 30 2021 2020 2019

Stock options $ 279 $ 249 $ 246
RSUs and PSUs 261 309 269

Total stock-based expense $ 540 $ 558 $ 515

Income tax benefit $ 102 $ 97 $ 101

(1)

(2)

(3)

(1)

(2)

(3)

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 53

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:

Years ended June 30 2021 2020 2019

Interest rate 0.1 – 0.7 % 1.1 – 1.4 % 2.5 – 2.7 %
Weighted average
interest rate 0.6 % 1.3 % 2.6 %
Dividend yield 2.4 % 2.4 % 3.0 %
Expected volatility 20 % 17 % 17 %
Expected life in
years 9.2 9.2 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.

A summary of options outstanding under the plans as of June 30, 2021 and
activity during the year then ended is presented below:

Options
Options (in
thousands)

Weighted
Average
Exercise

Price

Weighted
Average

Contract-ual
Life in Years

Aggregate
Intrinsic

Value

Outstanding, beginning
of year 149,872 $ 84.71
Granted 12,133 139.05
Exercised (23,102) 73.72
Forfeited/expired (631) 106.72
OUTSTANDING, END
OF YEAR 138,272 $ 91.24 5.4 $ 6,098

EXERCISABLE 99,177 $ 81.47 4.1 $ 5,302

The following table provides additional information on stock options:

Years ended June 30 2021 2020 2019

Weighted average grant-date fair
value of options granted $ 20.94 $ 15.60 $ 13.60
Intrinsic value of options exercised 1,401 1,455 1,770
Grant-date fair value of options that
vested 236 217 180
Cash received from options exercised 1,705 2,019 3,381
Actual tax benefit from options exercised 292 298 221

At June 30, 2021, there was $169 of compensation cost that has 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.

A summary of non-vested RSUs and PSUs outstanding under the plans as of
June 30, 2021 and activity during the year then ended is presented below:

RSUs PSUs

RSU and PSU
awards

Units (in
thousands)

Weighted
Average Grant

Date Fair
Value

Units (in
thousands)

Weighted
Average Grant

Date Fair
Value

Non-vested at July
1, 2020 4,498 $ 92.15 1,048 $ 117.02
Granted 1,274 137.71 472 152.04
Vested (2,445) 85.40 (529) 106.66
Forfeited (90) 108.30 (20) 140.88
Non-vested at
June 30, 2021 3,237 $ 114.68 971 $ 135.24

At June 30, 2021, there was $229 of compensation cost that has not yet been
recognized related to RSUs and PSUs. That cost is expected to be recognized
over a remaining weighted average period of 1.6 years. The total grant date
fair value of shares vested was $266, $264 and $205 in 2021, 2020 and 2019,
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 $340, $317 and $272 in 2021, 2020 and 2019,
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 14% of total participants’ annual wages and salaries in
2021, 2020 and 2019.

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

Amounts in millions of dollars except per share amounts or as otherwise specified.

54 The Procter & Gamble Company

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. Generally, the health
care plans require cost sharing with retirees and pay a stated percentage of
expenses, reduced by deductibles and other coverages. These benefits are
primarily funded by ESOP Series B shares and certain other assets
contributed by the Company.

Obligation and Funded Status. The following provides a reconciliation of benefit obligations, plan assets and funded status of these defined benefit plans:

Pension Benefits Other Retiree Benefits
Years ended June 30 2021 2020 2021 2020

CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year $ 17,761 $ 17,037 $ 4,770 $ 4,964
Service cost 275 247 94 100
Interest cost 240 276 114 160
Participants’ contributions 13 11 76 74
Amendments 34 3 — (136)
Net actuarial loss/(gain) (466) 951 (678) (85)
Special termination benefits 17 11 2 2
Currency translation and other 1,220 (218) 64 (64)
Benefit payments (625) (557) (236) (245)

BENEFIT OBLIGATION AT END OF YEAR $ 18,469 $ 17,761 $ 4,206 $ 4,770

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year $ 11,484 $ 11,382 $ 5,618 $ 5,096
Actual return on plan assets 1,058 664 879 595
Employer contributions 202 180 34 33
Participants’ contributions 13 11 76 74
Currency translation and other 909 (196) 2 2
ESOP debt impacts — — 71 63
Benefit payments (625) (557) (236) (245)

FAIR VALUE OF PLAN ASSETS AT END OF YEAR $ 13,041 $ 11,484 $ 6,444 $ 5,618

FUNDED STATUS $ (5,428) $ (6,277) $ 2,238 $ 848

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.
Represents the net impact of ESOP debt service requirements, which is netted against plan assets for other retiree benefits. The original borrowing of the ESOP debt was
fully repaid in 2021.

(1) (2)

(3)

(3)

(4)

(1)

(2)

(3)

(4)

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 55

The actuarial gain for pension plans in 2021 was primarily related to increases in discount rates, partially offset by unfavorable actuarial assumptions, including
inflation assumptions. The actuarial gain for other retiree benefits in 2021 was primarily related to favorable medical cost trends. The actuarial loss for pension
plans in 2020 was primarily related to decreases in discount rates. The actuarial gain for other retiree benefits in 2020 was primarily related to favorable updates to
mortality tables and favorable medical cost trends, largely offset by decreases in discount rates.

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.

Pension Benefits Other Retiree Benefits

As of June 30 2021 2020 2021 2020

CLASSIFICATION OF NET AMOUNT RECOGNIZED
Noncurrent assets $ 88 $ 12 $ 3,193 $ 1,843
Current liabilities (64) (66) (33) (30)
Noncurrent liabilities (5,452) (6,223) (922) (965)

NET AMOUNT RECOGNIZED $ (5,428) $ (6,277) $ 2,238 $ 848

AMOUNTS RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE (INCOME)/LOSS (AOCI)
Net actuarial loss/(gain) $ 4,869 $ 5,662 $ (504) $ 572
Prior service cost/(credit) 198 198 (471) (511)

NET AMOUNTS RECOGNIZED IN AOCI $ 5,067 $ 5,860 $ (975) $ 61

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 $17.3 billion and $16.5 billion as of June 30, 2021 and 2020, respectively. Information related to the funded status of selected pension and
other retiree benefits at June 30 is as follows:

As of June 30 2021 2020

PENSION PLANS WITH A PROJECTED BENEFIT OBLIGATION IN EXCESS OF PLAN ASSETS
Projected benefit obligation $ 11,747 $ 17,635
Fair value of plan assets 6,231 11,347

PENSION PLANS WITH AN ACCUMULATED BENEFIT OBLIGATION IN EXCESS OF PLAN ASSETS
Accumulated benefit obligation $ 11,005 $ 11,196
Fair value of plan assets 6,226 5,994

OTHER RETIREE BENEFIT PLANS WITH AN ACCUMULATED BENEFIT OBLIGATION IN EXCESS OF PLAN ASSETS
Accumulated benefit obligation $ 1,082 $ 1,136
Fair value of plan assets 127 141

Amounts in millions of dollars except per share amounts or as otherwise specified.

56 The Procter & Gamble Company

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

Pension Benefits Other Retiree Benefits

Years ended June 30 2021 2020 2019 2021 2020 2019

AMOUNTS RECOGNIZED IN NET PERIODIC BENEFIT COST
Service cost $ 275 $ 247 $ 259 $ 94 $ 100 $ 101
Interest cost 240 276 339 114 160 187
Expected return on plan assets (783) (740) (732) (508) (473) (447)
Amortization of net actuarial loss 423 340 225 47 68 66
Amortization of prior service cost/(credit) 25 25 26 (60) (48) (48)
Amortization of net actuarial loss/prior service cost due to settlements 5 7 9 — — —
Special termination benefits 17 11 13 2 2 8

GROSS BENEFIT COST/(CREDIT) 202 166 139 (311) (191) (133)

Dividends on ESOP preferred stock — — — (8) (19) (28)

NET PERIODIC BENEFIT COST/(CREDIT) $ 202 $ 166 $ 139 $ (319) $ (210) $ (161)

CHANGE IN PLAN ASSETS AND BENEFIT OBLIGATIONS RECOGNIZED IN AOCI
Net actuarial loss/(gain) – current year $ (741) $ 1,027 $ (1,049) $ (207)
Prior service cost/(credit) – current year 34 3 — (136)
Amortization of net actuarial loss (423) (340) (47) (68)
Amortization of prior service (cost)/credit (25) (25) 60 48
Amortization of net actuarial loss/prior service costs due to settlements (5) (7) — —
Currency translation and other 367 (74) — (26)

TOTAL CHANGE IN AOCI (793) 584 (1,036) (389)
NET AMOUNTS RECOGNIZED IN PERIODIC BENEFIT COST
AND AOCI $ (591) $ 750 $ (1,355) $ (599)

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.

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, were as follows:

Pension Benefits Other Retiree Benefits

As of June 30 2021 2020 2021 2020

Discount rate 1.7 % 1.5 % 3.2 % 3.1 %
Rate of compensation increase 2.7 % 2.5 % N/A N/A
Interest crediting rate for cash balance plans 4.4 % 4.4 % N/A N/A
Health care cost trend rates assumed for next year N/A N/A 6.4 % 6.6 %
Rate to which the health care cost trend rate is assumed to decline (ultimate trend rate) N/A N/A 4.5 % 4.9 %
Year that the rate reaches the ultimate trend rate N/A N/A 2028 2026

Determined as of end of fiscal year.

(1)

(1)

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 57

The weighted average assumptions used to determine net benefit cost recorded on the Consolidated Statement of Earnings for the years ended June 30, were as
follows:

Pension Benefits Other Retiree Benefits

Years ended June 30 2021 2020 2019 2021 2020 2019

Discount rate 1.5 % 1.9 % 2.5 % 3.1 % 3.7 % 4.2 %
Expected return on plan assets 6.5 % 6.6 % 6.6 % 8.4 % 8.4 % 8.3 %
Rate of compensation increase 2.5 % 2.6 % 2.6 % N/A N/A N/A
Interest crediting rate for cash balance plans 4.4 % 4.4 % 4.8 % N/A N/A N/A

Determined as of beginning of fiscal year.

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 5 – 6% 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 year ended June 30, 2021, and actual asset allocation by asset category as of June 30, 2021 and 2020, were as follows:

Target Asset Allocation Actual Asset Allocation at June 30

Pension Benefits
Other Retiree

Benefits

Pension Benefits Other Retiree Benefits

Asset Category 2021 2020 2021 2020

Cash — % 2 % 1 % 1 % 2 % 3 %
Debt securities 61 % 3 % 59 % 66 % 2 % 2 %
Equity securities 39 % 95 % 40 % 33 % 96 % 95 %

TOTAL 100 % 100 % 100 % 100 % 100 % 100 %

(1)

(1)

Amounts in millions of dollars except per share amounts or as otherwise specified.

58 The Procter & Gamble Company

The following table sets forth the fair value of the Company’s plan assets as of June 30, 2021 and 2020 segregated by level within the fair value hierarchy (refer to
Note 9 for further discussion on the fair value hierarchy and fair value principles). 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.

Pension Benefits Other Retiree Benefits

As of June 30
Fair Value Hierarchy

Level 2021 2020
Fair Value Hierarchy

Level 2021 2020

ASSETS AT FAIR VALUE
Cash and cash equivalents 1 $ 82 $ 61 1 $ 131 $ 121
Company common stock — — 1 275 217
Company preferred stock — — 2 5,911 5,139
Fixed income securities 2 1,931 1,991 2 3 12
Insurance contracts 3 111 115 — —
TOTAL ASSETS IN THE FAIR VALUE
HIERARCHY 2,124 2,167 6,320 5,489

Investments valued at net asset value 10,917 9,317 124 129

TOTAL ASSETS AT FAIR VALUE $ 13,041 11,484 $ 6,444 5,618

Company preferred stock is valued based on the value of Company common stock and is presented net of ESOP debt discussed below.
Fixed income securities, classified as Level 2, 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.

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 year ending June 30, 2022, is $181 and $46,
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:

Years ending June 30
Pension
Benefits

Other Retiree
Benefits

EXPECTED BENEFIT PAYMENTS
2022 $ 605 $ 190
2023 586 199
2024 615 205
2025 644 209
2026 639 214

2027 – 2031 3,639 1,130

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 $24 remain
outstanding at June 30, 2021. 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 $3.24 per share. The
liquidation value is $6.82 per share.

(1)

(2)

(3)

(4)

(1)

(2)

(3)

(4)

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 59

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 full as of June 30,
2021. Debt service requirements were funded by preferred stock dividends,
cash contributions and advances provided by the Company, of which $982 are
outstanding at June 30, 2021. 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 $3.24 per share. The
liquidation value is $12.96 per share.

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 is 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 2021 2020 2019

Allocated 27,759 29,591 31,600
Unallocated 1,769 2,479 3,259

TOTAL SERIES A 29,528 32,070 34,859

Allocated 29,203 27,894 26,790
Unallocated 22,349 24,418 26,471

TOTAL SERIES B 51,552 52,312 53,261

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 as of June 30, 2021, was not material. 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.

Amounts in millions of dollars except per share amounts or as otherwise specified.

60 The Procter & Gamble Company

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. Changes in the fair value of these
instruments are recognized in the Foreign Currency Translation component of
OCI and offset the change in the value of the net investment being hedged.
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
underlying net assets. 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
years ended June 30, 2021 and 2020, we did not have any financial
commodity hedging activity to manage such exposures.

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.

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.

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 61

Assets and Liabilities Measured at Fair Value

Cash equivalents were $9.1 billion and $14.6 billion as of June 30, 2021 and 2020, respectively and are classified as Level 1 within the fair value hierarchy. Other
investments had a fair value of $192 and $67 as of June 30, 2021 and 2020, respectively, including equity securities of $163 and $39 as of June 30, 2021 and 2020,
respectively, and are presented in Other noncurrent assets. Investments are measured at fair value and primarily classified as Level 1 and Level 2 within the fair
value hierarchy. Level 1 are based on quoted market prices in active markets for identical assets, and Level 2 are based on quoted market prices for similar
investments. There are no material investment balances classified as Level 3 within the fair value hierarchy or using net asset value as a practical expedient.
Unrealized gains on equity securities were $69 and $13 for the fiscal year ended June 30, 2021 and 2020, respectively, and are recognized in the Consolidated
Statements of Earnings in Other non-operating income, net.

The fair value of long-term debt was $28.8 billion and $29.0 billion as of June 30, 2021 and 2020, respectively. This includes the current portion of long-term debt
instruments ($3.6 billion and $2.5 billion as of June 30, 2021 and 2020, respectively). Certain long-term debt (debt designated as a fair value hedge) is recorded at
fair value. All other long-term debt is recorded at amortized cost, but is measured at fair value for disclosure purposes. We consider our debt to be Level 2 in the
fair value hierarchy. Fair values are generally estimated based on quoted market prices for identical or similar instruments.

Disclosures about Financial Instruments

The notional amounts and fair values of financial instruments used in hedging transactions as of June 30, 2021 and 2020 are as follows:

Notional Amount Fair Value Asset Fair Value (Liability)

As of June 30 2021 2020 2021 2020 2021 2020

DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS
Interest rate contracts $ 7,415 $ 7,114 $ 146 $ 269 $ — $ —
DERIVATIVES IN NET INVESTMENT HEDGING RELATIONSHIPS
Foreign currency interest rate contracts $ 8,484 $ 3,856 $ 89 $ 26 $ (94) $ (41)
TOTAL DERIVATIVES DESIGNATED AS HEDGING
INSTRUMENTS $ 15,899 $ 10,970 $ 235 $ 295 $ (94) $ (41)

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
Foreign currency contracts $ 5,060 $ 5,986 $ 20 $ 23 $ (22) $ (25)

TOTAL DERIVATIVES AT FAIR VALUE $ 20,959 $ 16,956 $ 255 $ 318 $ (116) $ (66)

All derivative assets are presented in Prepaid expenses and other current assets or Other noncurrent assets. All derivative liabilities are presented in Accrued and
other liabilities or Other noncurrent liabilities.

The fair value of the interest rate derivative asset/liability directly offsets the cumulative amount of the fair value hedging adjustment included in the carrying
amount of the underlying debt obligation. The carrying amount of the underlying debt obligation, which includes the unamortized discount or premium and the fair
value adjustment, was $7.5 billion and $7.4 billion as of June 30, 2021 and 2020, 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 $12.0
billion and $16.0 billion as of June 30, 2021 and 2020, respectively. The increase in the notional balance of derivative instruments designated as net investment
hedges is largely offset by the decrease in the principal balance of debt instruments designated as net investment hedges, reflecting the Company’s decision to
leverage favorable interest rates in the foreign currency swap market versus the short-term debt market.

All of the Company’s derivative assets and liabilities are measured at fair value that is derived from observable market data, including interest rate yield curves and
foreign exchange rates, and are classified as Level 2 within the fair value hierarchy. There was no significant activity within the Level 3 assets and liabilities during
the periods presented. There were no significant assets or liabilities that were re-measured at fair value on a non-recurring basis during the years ended June 30,
2021 and 2020.

Amounts in millions of dollars except per share amounts or as otherwise specified.

62 The Procter & Gamble Company

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

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

Years ended June 30 2021 2020

DERIVATIVES IN NET INVESTMENT HEDGING
RELATIONSHIPS
Foreign currency interest rate
contracts $ (232) $ 66

For the derivatives in net investment hedging relationships, the amount of gain
excluded from effectiveness testing, which was recognized in earnings, was
$60 and $69 for the fiscal year ended June 30, 2021 and 2020, 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 $(918) and $189, for the fiscal
year ended June 30, 2021 and 2020, respectively.

Amount of Gain/(Loss) Recognized in
Earnings

Years ended June 30 2021 2020

DERIVATIVES IN FAIR VALUE HEDGING RELATIONSHIPS

Interest rate contracts $ (123) $ 93

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS

Foreign currency contracts $ 296 $ (83)

The gain/(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 gain/(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.

NOTE 10

SHORT-TERM AND LONG-TERM DEBT

As of June 30 2021 2020

DEBT DUE WITHIN ONE YEAR
Current portion of long-term debt $ 3,620 $ 2,508
Commercial paper 5,171 8,545
Other 98 130

TOTAL $ 8,889 $ 11,183

Short-term weighted average interest
rates 0.2 % 0.7 %

Short-term weighted average interest rates include the effects of interest rate
swaps discussed in Note 9.

As of June 30 2021 2020
LONG-TERM DEBT
1.70% USD note due November 2021 875 875
2.00% EUR note due November 2021 893 843
2.30% USD note due February 2022 1,000 1,000
2.15% USD note due August 2022 1,250 1,250
2.00% EUR note due August 2022 1,190 1,124
3.10% USD note due August 2023 1,000 1,000
1.13% EUR note due November 2023 1,488 1,405
0.50% EUR note due October 2024 595 562
0.63% EUR note due October 2024 952 899
1.38% GBP note due May 2025 519 461
0.55% USD note due October 2025 1,000 —
2.70% USD note due February 2026 600 600
1.00% USD note due April 2026 1,000 —
2.45% USD note due November 2026 875 875
2.80% USD note due March 2027 500 500
4.88% EUR note due May 2027 1,190 1,124
2.85% USD note due August 2027 750 750
1.20% EUR note due October 2028 952 899
1.80% GBP note due May 2029 519 461
1.25% EUR note due October 2029 595 562
3.00% USD note due March 2030 1,500 1,500
1.20% USD note due October 2030 1,250 —
1.95% USD note due April 2031 1,000 —
5.55% USD note due March 2037 716 763
1.88% EUR note due October 2038 595 562
3.55% USD note due March 2040 516 1,000
All other long-term debt 3,399 7,030
Current portion of long-term debt (3,620) (2,508)

TOTAL $ 23,099 $ 23,537

Long-term weighted average interest rates
2.0% 2.3%

Long-term weighted average interest rates include the effects of interest rate
swaps discussed in Note 9.

Long-term debt maturities during the next five fiscal years are as follows:

Years ending June 30 2022 2023 2024 2025 2026

Debt maturities $3,620 $2,470 $2,537 $2,136 $2,721

The Procter & Gamble Company fully and unconditionally guarantees the
registered debt and securities issued by its 100% owned finance subsidiaries.

(1) (2)

(1)

(2)

(1)

(1)

(1)

(1)

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 63

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

Investment
Securities

Post-retirement
Benefits

Foreign
Currency

Translation Total AOCI

BALANCE at JUNE 30, 2019 $ 11 $ (4,198) $ (10,749) $ (14,936)
OCI before reclassifications (10) (453) (1,083) (1,546)
Amounts reclassified from AOCI into the Consolidated Statement of Earnings (2) 303 — 301

Net current period OCI (12) (150) (1,083) (1,245)

Less: Other comprehensive income/(loss) attributable to non-controlling interests — 2 (18) (16)

BALANCE at JUNE 30, 2020 (1) (4,350) (11,814) (16,165)
OCI before reclassifications 20 1,046 1,023 2,089
Amounts reclassified from AOCI into the Consolidated Statement of Earnings (4) 340 — 336

Net current period OCI 16 1,386 1,023 2,425

Less: Other comprehensive income/(loss) attributable to non-controlling interests — (1) 5 4

BALANCE at JUNE 30, 2021 $ 15 $ (2,963) $ (10,796) $ (13,744)

Net of tax (benefit)/expense of $(1), $(131) and $59 for gains/losses on investment securities, postretirement benefit items and foreign currency translation, respectively, for
the period ended June 30, 2020. Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but tax effects within
cumulative translation does include impacts from items such as net investment hedge transactions.
Net of tax (benefit)/expense of $0, $89 and $0 for gains/losses on investment securities, postretirement benefit items and foreign currency translation, respectively, for the
period ended June 30, 2020.
Net of tax (benefit)/expense of $5, $345 and $(266) for gains/losses on investment securities, postretirement benefit items and foreign currency translation, respectively, for
the period ended June 30, 2021. Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but tax effects within
cumulative translation does include impacts from items such as net investment hedge transactions.
Net of tax (benefit)/expense of $0, $100 and $0 for gains/losses on investment securities, postretirement benefit items and foreign currency translation, respectively, for the
period ended June 30, 2021.

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

costs (see Note 8 for additional details).

(1)

(2)

(3)

(4)

(1)

(2)

(3)

(4)

Amounts in millions of dollars except per share amounts or as otherwise specified.

64 The Procter & Gamble Company

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.

The components of the Company’s total operating lease cost for the years
ended June 30, 2021 and June 30, 2020 were as follows:

Years ended June 30 2021 2020

Operating lease cost 245 271
Variable lease cost 75 76

Total lease cost $ 320 $ 347

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.

Total lease cost for the year ended June 30, 2019 was $341.

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

As of June 30 2021 2020

Operating leases:

Other noncurrent assets $ 808 $ 850

Accrued and other liabilities 219 239
Other noncurrent liabilities 631 652

Total operating lease liabilities $ 850 $ 891

Weighted average remaining lease term:
Operating leases 6.4 years 6.5 years

Weighted average discount rate:
Operating leases 3.8 % 4.3 %

At June 30, 2021, future payments of operating lease liabilities were as
follows:

Operating Leases

June 30, 2021

1 year $ 219
2 years 192
3 years 157
4 years 106
5 years 69
Over 5 years 210

Total lease payments 953
Less: Interest (103)

Present value of lease liabilities $ 850

Total cash paid for amounts included in the measurement of lease liabilities
was $253 and $271 for the years ended June 30, 2021 and June 30, 2020,
respectively.

The right-of-use assets obtained in exchange for lease liabilities were $163
and $126 for the years ended June 30, 2021 and June 30, 2020, respectively.

(1)

(1)

Amounts in millions of dollars except per share amounts or as otherwise specified.

The Procter & Gamble Company 65

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. Other than
obligations recorded as liabilities at the time of divestiture, 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.

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:

Years ending June 30 2022 2023 2024 2025 2026
There-
after

Purchase obligations $ 809 $ 381 $ 218 $ 151 $ 108 $ 315

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.

NOTE 14

MERCK ACQUISITION

On November 30, 2018, we completed our acquisition of the OTC healthcare
business of Merck OTC for $3.7 billion (based on exchange rates at the time
of closing) in an all-cash transaction. This business primarily sells OTC
consumer healthcare products, mainly in Europe, Latin America and Asia
markets. The results of Merck OTC, which are not material to the Company,
are reported in our consolidated financial statements beginning December 1,
2018.

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, David S. Taylor, 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. Taylor and Schulten have concluded that the Company’s disclosure
controls and procedures were effective to ensure that information required to
be disclosed in reports we file or submit under the Exchange Act is
(1) recorded, processed, summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms, and
(2) accumulated and communicated to our management, including Messrs.
Taylor and Schulten, to allow their timely decisions regarding required
disclosure.

Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting that
occurred during the Company’s 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.

Amounts in millions of dollars except per share amounts or as otherwise specified.

66 The Procter & Gamble Company

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 2021 Proxy Statement filed pursuant to Regulation
14A, which will be filed no later than 120 days after June 30, 2021: 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 subsections of the Other Matters section entitled Director
Nominations for Inclusion in the 2022 Proxy Statement and

entitled Shareholder Recommendations of Board Nominees and Committee
Process for Recommending Board Nominees. 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 2021 Proxy Statement filed pursuant to Regulation
14A, which will be filed no later than 120 days after June 30, 2021: the
subsections of the Corporate Governance section entitled Board Meetings and
Committees of the Board and entitled Compensation Committee Interlocks
and Insider Participation; and the portion beginning with the section entitled
Director Compensation up to but not including the section entitled Security
Ownership of Management and Certain Beneficial Owners.

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, 2021. 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

(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))

Equity compensation plans approved by security
holders
Stock Options/Stock Appreciation Rights 138,297,815 $91.2043
Restricted Stock Units (RSUs)/Performance Stock
Units (PSUs) 7,202,433 N/A

TOTAL 145,500,248 $91.2043

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 144 million.
Weighted average exercise price of outstanding options only.

(1)

(1)

(2)

(1)

(2)

The Procter & Gamble Company 67

Additional information required by this item is incorporated by reference to
the following section of the 2021 Proxy Statement filed pursuant to
Regulation 14A, which will be filed no later than 120 days after June 30,
2021: 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 2021 Proxy Statement filed pursuant to Regulation
14A, which will be

filed no later than 120 days after June 30, 2021: 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 2021 Proxy Statement filed pursuant to Regulation
14A, which will be filed no later than 120 days after June 30, 2021: Report of
the Audit Committee, which ends with the subsection entitled Services
Provided by Deloitte.

PART 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

• Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements

• Consolidated Statements of Earnings – for years ended June 30, 2021, 2020 and 2019

• Consolidated Statements of Other Comprehensive Income – for years ended June 30, 2021, 2020 and 2019

• Consolidated Balance Sheets – as of June 30, 2021 and 2020

• Consolidated Statements of Shareholders’ Equity – for years ended June 30, 2021, 2020 and 2019

• Consolidated Statements of Cash Flows – for years ended June 30, 2021, 2020 and 2019

• 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 April 8, 2016, pursuant to authority granted by shareholders at the annual meeting on
October 13, 2009) (Incorporated by reference to Exhibit (3-2) of the Company’s Annual Report on Form 10-K for the year ended June 30, 2016).

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.+

(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).

68 The Procter & Gamble Company

(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 2.000% Notes due 2021 (Incorporated by reference to Exhibit (4-10) of the Company’s Annual report on Form
10-K for the year ended June 30, 2019).

(4-10) – Description of the Company’s 2.000% Notes due 2022 (Incorporated by reference to Exhibit (4-11) of the Company’s Annual report on Form
10-K for the year ended June 30, 2019).

Exhibit (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 (Incorporated by reference to Exhibit (10-8) of the
Company’s Form 10-Q for the quarter ended September 30, 2015).*

(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.*+

(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 September 30, 2020).*

(10-11) – Short Term Achievement Reward Program – related correspondence and terms and conditions.*+

(10-12) – Company’s Forms of Separation Agreement & Release (Incorporated by reference to Exhibit (10-2) of the Company’s Form 10-Q for the quarter
ended March 31, 2021)*

(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, 2021).*

(10-14) – Summary of personal benefits available to certain officers and non-employee directors (Incorporated by reference to Exhibit (10-3) of the
Company’s Form 10-Q for the quarter ended September 30, 2018).*

(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).*

The Procter & Gamble Company 69

(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.*+

(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). *

(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.* +

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.

70 The Procter & Gamble Company

SIGNATURES

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

THE PROCTER & GAMBLE COMPANY

By /s/ DAVID S. TAYLOR
(David S. Taylor)
Chairman of the Board, President and Chief Executive Officer
August 06, 2021

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 Title Date

/s/ DAVID S. TAYLOR
(David S. Taylor)

Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer) August 06, 2021

/s/ ANDRE SCHULTEN
(Andre Schulten)

Chief Financial Officer
(Principal Financial Officer) August 06, 2021

/s/ MICHAEL G. HOMAN
(Michael G. Homan)

Senior Vice President – Chief Accounting Officer
(Principal Accounting Officer) August 06, 2021

/s/ B. MARC ALLEN
(B. Marc Allen) Director August 06, 2021

/s/ FRANCIS S. BLAKE
(Francis S. Blake) Director August 06, 2021

/s/ ANGELA F. BRALY
(Angela F. Braly) Director August 06, 2021

/s/ AMY L. CHANG
(Amy L. Chang) Director August 06, 2021

/s/ JOSEPH JIMENEZ
(Joseph Jimenez) Director August 06, 2021

/s/ DEBRA L. LEE
(Debra L. Lee) Director August 06, 2021

/s/ TERRY J. LUNDGREN
(Terry J. Lundgren) Director August 06, 2021

/s/ CHRISTINE M. MCCARTHY
(Christine M. McCarthy) Director August 06, 2021

/s/ W. JAMES MCNERNEY, JR.
(W. James McNerney, Jr.) Director August 06, 2021

/s/ JON R. MOELLER
(Jon R. Moeller) Director August 06, 2021

/s/ NELSON PELTZ
(Nelson Peltz) Director August 06, 2021

/s/ MARGARET C. WHITMAN
(Margaret C. Whitman) Director August 06, 2021

/s/ PATRICIA A. WOERTZ
(Patricia A. Woertz) Director August 06, 2021

The Procter & Gamble Company 71

EXHIBIT INDEX

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

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

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. +

(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 2.000% Notes due 2021 (Incorporated by reference to Exhibit (4-10) of the Company’s Annual report on Form
10-K for the year ended June 30, 2019).

(4-10) – Description of the Company’s 2.000% Notes due 2022 (Incorporated by reference to Exhibit (4-11) of the Company’s Annual report on Form
10-K for the year ended June 30, 2019).

Exhibit (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 (Incorporated by reference to Exhibit (10-8) of the
Company’s Form 10-Q for the quarter ended September 30, 2015).

(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. +

(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 September 30, 2020).

(10-11) – Short Term Achievement Reward Program – related correspondence and terms and conditions. +

(10-12) – Company’s Forms of Separation Agreement & Release (Incorporated by reference to Exhibit (10-2) of the Company’s Form 10-Q for the quarter
ended March 31, 2021).

(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, 2021).

72 The Procter & Gamble Company

(10-14) – Summary of personal benefits available to certain officers and non-employee directors (Incorporated by reference to Exhibit (10-3) of the
Company’s Form 10-Q for the quarter ended September 30, 2018).

(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.+

(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).

(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. +

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.

+ Filed herewith.

Exhibit (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.

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, Registered Under Section 12 of the Securities Exchange Act of 1934

The following summary of The Procter & Gamble Company’s above referenced debt securities is based on and qualified by the
relevant Fiscal Agency Agreements and/or Indenture referenced in the description of each debt security provided below and the
4.875% EUR notes due May 2027, 6.250% GBP notes due January 2030, and 5.250% GBP notes due January 2033 (collectively,
the “Notes”). For a complete description of the terms and provisions of the Company’s Notes, refer to the relevant Fiscal Agency
Agreement or Indenture and to the forms of Notes, all of which are filed as exhibits to the Form 8-A filed with the Securities and
Exchange Commission on November 3, 2017. Throughout this exhibit, references to “we,” “our,” and “us” refer to The Procter &
Gamble Company.

4.875% EUR Notes (the “2027 Notes”)

General

The 2027 Notes were issued on May 11, 2007, as a separate series under the indenture, dated as of September 28, 1992, between us
and The Bank of New York Trust Company, N.A. (as successor-in-interest to J.P. Morgan Trust Company, National Association)
(the “Indenture”). The 2027 Notes were issued in an aggregate initial principal amount of €1,000,000,000, all of which remains
outstanding.

The 2027 Notes bear interest at the rate of 4.875% per annum payable annually in arrears on May 11. We make interest payments to
the person in whose name the 2027 Notes are registered at the close of business 10 business days before the next interest payment
date. If the interest payment date is not a Business Day at the relevant place of payment, payment of interest will be made on the next
day that is a Business Day at such place of payment. “Business Day” means any day that is not a Saturday or Sunday and that is not a
day on which banking institutions are generally authorized or obligated by law to close in The City of New York and, for any place
of payment outside of The City of New York, in such place of payment, and on which the TARGET System is open for settlement of
payment in Euros.

The first interest period began on May 11, 2007.

The 2027 Notes mature on May 11, 2027, are our senior debt, ranking equally with all of our other present and future unsecured and
unsubordinated indebtedness, will be repaid at par at maturity, are subject to defeasance and covenant defeasance, and are not be
subject to any sinking fund. The 2027 Notes were issued in Euros.

The Indenture and the 2027 Notes do not limit the amount of indebtedness which may be incurred or the amount of securities which
may be issued by us or our subsidiaries, and contain

no financial or similar restrictions on us or our subsidiaries, except as described below under “Restrictive Covenants.”

Additional Amounts

All payments of principal and interest in respect of the 2027 Notes will be made free and clear of, and without deduction or
withholding for or on account of, any present or future taxes, duties, assessments or other governmental charges of whatsoever
nature imposed, levied, collected, withheld or assessed by the United States or any political subdivision or taxing authority of or in
the United States (collectively, “Taxes”), unless such withholding or deduction is required by law.

In the event such withholding or deduction of Taxes is required by law, subject to the limitations described below, we will pay to the
holder or beneficial owner of any 2027 Note that is not a United States holder such additional amounts (“Additional Amounts”) as
may be necessary in order that every net payment by us or any paying agent of principal of or interest on the 2027 Notes (including
upon redemption), after deduction or withholding for or on account of such Taxes, will not be less than the amount provided for in
such 2027 Note to be then due and payable before deduction or withholding for or on account of such Taxes.

However, our obligation to pay Additional Amounts will not apply to:

(a) any Taxes which would not have been so imposed but for:

(1) the existence of any present or former connection between such holder or beneficial owner (or between a fiduciary, settler,
beneficiary, member or shareholder or other equity owner of, or a person having a power over, such holder or beneficial owner, if
such holder or beneficial owner is an estate, a trust, a limited liability company, a partnership, a corporation or other entity) and the
United States, including, without limitation, such holder or beneficial owner (or such fiduciary, settlor, beneficiary, member,
shareholder or other equity owner or person having such a power) being or having been a citizen or resident or treated as a resident
of the United States or being or having been engaged in a trade or business in the United States or being or having been present in
the United States or having or having had a permanent establishment in the United States;

(2) the failure of such holder or beneficial owner to comply with any requirement under United States tax laws and regulations to
establish entitlement to a partial or complete exemption from such Taxes; or

(3) such holder’s or beneficial owner’s present or former status as a personal holding company or a foreign personal holding
company with respect to the United States, as a controlled foreign corporation with respect to the United States, as a passive foreign
investment company with respect to the United States, as a foreign tax exempt organization with respect to the United States or as a
corporation which accumulates earnings to avoid United States federal income tax;

(b) any Taxes imposed by reason of the holder or beneficial owner:

(1) owning or having owned, directly or indirectly, actually or constructively, 10% or more of the total combined voting power of all
classes of our stock;

(2) being a bank receiving interest described in section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended; or

(3) being a controlled foreign corporation with respect to the United States that is related to us by stock ownership;

(c) any Taxes which would not have been so imposed but for the presentation by the holder or beneficial owner of such 2027 Note
for payment on a date more than 10 days after the date on which such payment became due and payable or the date on which
payment of the 2027 Note is duly provided for and notice is given to holders, whichever occurs later, except to the extent that the
holder or beneficial owner would have been entitled to such additional amounts on presenting such 2027 Note on any date during
such 10-day period;

(d) any estate, inheritance, gift, sales, transfer, personal property, wealth, interest equalization or similar Taxes;

(e) any Taxes which are payable otherwise than by withholding from payment of principal of or interest on such 2027 Note;

(f) any Taxes which are payable by a holder that is not the beneficial owner of the 2027 Note, or a portion of the 2027 Note, or that is
a fiduciary, partnership, limited liability company or other similar entity, but only to the extent that a beneficial owner, a beneficiary
or settler with respect to such fiduciary or member of such partnership, limited liability company or similar entity would not have
been entitled to the payment of an additional amount had such beneficial owner, settler, beneficiary or member received directly its
beneficial or distributive share of the payment;

(g) any Taxes required to be withheld by any paying agent from any payment of principal of or interest on any 2027 Note, if such
payment can be made without such withholding by any other paying agent;

(h) any Taxes required to be withheld or deducted where such withholding or deduction is imposed pursuant to European Council
Directive 2003/48/EC on the taxation of savings income or any law implementing or complying with, or introduced in order to
conform to, such European Council Directive;

(i) any Taxes that would not have been imposed in respect of any 2027 Note or coupon if such 2027 Note or coupon had been
presented to another paying agent in a Member State of the European Union; or

(j) any combination of items (a), (b), (c), (d), (e), (f), (g), (h) and (i).

For purposes of this section, the holding of or the receipt of any payment with respect to a 2027 Note will not constitute a connection
(1) between the holder or beneficial owner and the United States or (2) between a fiduciary, settler, beneficiary, member or
shareholder or other equity owner of, or a person having a power over, such holder or beneficial owner if such holder or beneficial
owner is an estate, a trust, a limited liability company, a partnership, a corporation or other entity and the United States.

Any reference in this description to principal or interest will be deemed to refer also to Additional Amounts which may be payable
under the provisions of this section.

Except as specifically provided in the 2027 Notes, we will not be required to make any payment with respect to any tax, duty,
assessment or other governmental charge imposed by any government or any political subdivision or taxing authority of or in the
United States.

In addition, we undertake that, to the extent permitted by law, we will maintain a paying agent in a Member State of the European
Union (if any) that will not require withholding or deduction of tax pursuant to European Council Directive 2003/48/EC on the
taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such European
Council Directive.

Tax Redemption

Except as provided below, the 2027 Notes may not be redeemed prior to maturity. Unless previously redeemed or repurchased and
canceled, the 2027 Notes will be repayable at par, including Additional Amounts, as described below, if any, on May 11, 2027 or
such earlier date on which the same will be due and payable in accordance with the terms and conditions of the 2027 Notes.
However, if the maturity date of the 2027 Notes is not a Business Day, the 2027 Notes will be payable on the next succeeding
Business Day and no interest will accrue for the period from May 11, 2027 to such payment date.

The 2027 Notes may be redeemed at our option, in whole but not in part, at a redemption price equal to 100% of the principal
amount of the 2027 Notes to be redeemed, together with interest accrued and unpaid to the date fixed for redemption, at any time, on
giving not less than 30 nor more than 60 days’ notice, which notice will be irrevocable, if:

(a) we have or will become obligated to pay Additional Amounts as a result of any change in or amendment to the laws, regulations
or rulings of the United States or any political subdivision or any taxing authority of or in the United States affecting taxation, or any
change in or amendment to an official application, interpretation, administration or enforcement of such laws, regulations or rulings,
or

(b) any action will have been taken by a taxing authority, or any action has been brought in a court of competent jurisdiction, in the
United States or any political subdivision or taxing

authority of or in the United States, including any of those actions specified in (a) above, whether or not such action was taken or
brought with respect to us, or any change, clarification, amendment, application or interpretation of such laws, regulations or rulings
will be officially proposed, which results in a substantial likelihood that we will be required to pay Additional Amounts on the next
interest payment date.

However, no such notice of redemption will be given earlier than 90 days prior to the earliest date on which we would be, in the case
of a redemption for the reasons specified in (a) above, or there would be a substantial likelihood that we would be, in the case of a
redemption for the reasons specified in (b) above, obligated to pay such Additional Amounts if a payment in respect of the 2027
Notes were then due.

Restrictive Covenants

Restrictions on Secured Debt

If we or any Domestic Subsidiary will incur, assume or guarantee any Debt secured by a Mortgage on any Principal Domestic
Manufacturing Property or on any shares of stock or debt of any Domestic Subsidiary, we will secure, or cause such Domestic
Subsidiary to secure, the debt securities then outstanding equally and ratably with (or prior to) such Debt. However, we will not be
restricted by this covenant if, after giving effect to the particular Debt so secured the total amount of all Debt so secured, together
with all Attributable Debt in respect of sale and leaseback transactions involving Principal Domestic Manufacturing Properties,
would not exceed 5% of our and our consolidated subsidiaries’ Consolidated Net Tangible Assets.

In addition, the restriction will not apply to, and there will be excluded in computing secured Debt for the purpose of the restriction,
Debt secured by:

(1) Mortgages on property of, or on any shares of stock or debt of, any corporation existing at the time the corporation becomes a
Domestic Subsidiary;

(2) Mortgages in favor of us or a Domestic Subsidiary;

(3) Mortgages in favor of U.S. governmental bodies to secure progress or advance payments;

(4) Mortgages on property, shares of stock or debt existing at the time of their acquisition, including acquisition through merger or
consolidation, purchase money Mortgages and construction cost Mortgages; and

(5) any extension, renewal or refunding of any Mortgage referred to in the immediately preceding clauses (1) through (4), inclusive.

The Indenture does not restrict the incurrence of unsecured debt by us or our subsidiaries.

Restrictions on Sales and Leasebacks

Neither we nor any Domestic Subsidiary may enter into any sale and leaseback transaction involving any Principal Domestic
Manufacturing Property, the completion of construction and commencement of full operation of which has occurred more than 120
days prior to the transaction, unless:

• we or the Domestic Subsidiary could incur a lien on the property under the restrictions described above under “Restrictions
on Secured Debt” in an amount equal to the Attributable Debt with respect to the sale and leaseback transaction without
equally and ratably securing the debt securities then outstanding or

• we, within 120 days, apply to the retirement of our Funded Debt an amount not less than the greater of (1) the net proceeds of
the sale of the Principal Domestic Manufacturing Property leased pursuant to such arrangement or (2) the fair value of the
Principal Domestic Manufacturing Property so leased, subject to credits for various voluntary retirements of Funded Debt.

This restriction will not apply to any sale and leaseback transaction:

• between us and a Domestic Subsidiary,

• between Domestic Subsidiaries or

• involving the taking back of a lease for a period of less than three years.

Definitions Applicable to Covenants

The term “Attributable Debt” means the total net amount of rent, discounted at 10% per annum compounded annually, required to be
paid during the remaining term of any lease.

The term “Consolidated Net Tangible Assets” means the total amount of assets, less applicable reserves and other properly
deductible items, after deducting (a) all current liabilities and (b) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all as described on our and our consolidated subsidiaries’ most recent balance sheet
and computed in accordance with generally accepted accounting principles.

The term “Debt” means notes, bonds, debentures or other similar evidences of indebtedness for money borrowed.

The term “Domestic Subsidiary” means any of our subsidiaries except a subsidiary which neither transacts any substantial portion of
its business nor regularly maintains any substantial portion of its fixed assets within the United States or which is engaged primarily
in financing our and our subsidiaries’ operations outside the United States.

The term “Funded Debt” means Debt having a maturity of, or by its terms extendible or renewable for, a period of more than 12
months after the date of determination of the amount of Debt.

The term “Mortgage” means pledges, mortgages and other liens.

The term “Principal Domestic Manufacturing Property” means any facility (together with the land on which it is erected and fixtures
comprising a part of the land) used primarily for manufacturing or processing, located in the United States, owned or leased by us or
one of our subsidiaries and having a gross book value in excess of 3/4 of 1% of Consolidated Net Tangible Assets. However, the
term “Principal Domestic Manufacturing Property” does not include any facility or portion of a facility (1) which is a pollution
control or other facility financed by obligations issued by a state or local governmental unit pursuant to Section 103(b)(4)(E), 103(b)
(4)(F) or 103(b)(6) of the Internal Revenue Code of 1954, or any successor provision thereof, or (2) which, in the opinion of our
board of directors, is not of material importance to the total business conducted by us and our subsidiaries as an entirety.

Modification and Waiver

The Company and the trustee may make modifications of and amendments to the Indenture governing the 2027 Notes if the holders
of at least 66 2/3% in principal amount of the outstanding debt securities of each series affected by the modification or amendment
consent to the modification or amendment.

However, the consent of the holder of each debt security affected (including the 2027 Notes, if applicable) will be required for any
modification or amendment that: (i) changes the stated maturity of the principal of, or any installment of principal of or interest on,
any debt security, (ii) reduces the principal amount of, or the premium, if any, or interest, if any, on, any debt security, (iii) reduces
the amount of principal of an original issue discount security payable upon acceleration of the maturity of the security, (iv) changes
the place or currency of payment of principal of, or premium, if any, or interest, if any, on, any debt security, (v) impairs the right to
institute suit for the enforcement of any payment on any debt security, or (vi) reduces the percentage in principal amount of debt
securities of any series necessary to modify or amend the Indenture or to waive compliance with various provisions of the Indenture
or to waive various defaults.

Without the consent of any holder of debt securities, including holders of 2027 Notes, we and the trustee may make modifications or
amendments to the Indenture in order to: (i) evidence the succession of another person to us and the assumption by that person of the
covenants in the Indenture; (ii) add to the covenants for the benefit of the holders; (iii) add additional events of default; (iv) permit or
facilitate the issuance of securities in bearer form or uncertificated form; (v) add to, change, or eliminate any provision of the
Indenture in respect of a series of debt securities to be created in the future; (vi) secure the securities as required by “Restrictions on
Secured Debt,”; (vii) establish the form or terms of securities of any series; (viii) evidence the appointment of a successor trustee, or
(ix) cure any ambiguity, correct or supplement any

provision which may be inconsistent with another provision, or make any other provision, provided that any action may not
adversely affect the interests of holders of debt securities in any material respect.

The holders of at least 66 2/3% in principal amount of the outstanding debt securities of any series may on behalf of the holders of
all debt securities of that series waive compliance by us with various restrictive provisions of the Indenture.

The holders of a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all debt
securities of that series waive any past default with respect to that series, except: (i) a default in the payment of the principal of or
premium, if any, or interest, if any, on any debt security of that series; or (ii) default in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the holder of each outstanding debt security of that series that
would be affected.

Events of Default

Any one of the following are events of default under the Indenture: (1) our failure to pay principal of or premium, if any, on any debt
security of that series when due; (2) our failure to pay any interest on any debt security of that series when due, continued for 30
days; (3) our failure to deposit any sinking fund payment, when due, in respect of any debt security of that series; (4) our failure to
perform any other of our covenants in the Indenture, other than a covenant included in the Indenture solely for the benefit of other
series of debt securities, continued for 90 days after written notice as provided in the Indenture; (5) certain events involving
bankruptcy, insolvency or reorganization; and (6) any other event of default provided with respect to debt securities of that series.

If an event of default with respect to outstanding debt securities of any series will occur and be continuing, either the trustee or the
holders of at least 25% in principal amount of the outstanding debt securities of that series may declare the principal amount (or, if
the debt securities of that series are original issue discount securities, the portion of the principal amount as may be specified in the
terms of that series) of all the debt securities of that series to be due and payable immediately. At any time after a declaration of
acceleration with respect to debt securities of any series has been made, but before a judgment or decree based on acceleration has
been obtained, the holders of a majority in principal amount of the outstanding debt securities of that series may, under some
circumstances, rescind and annul the acceleration. For information as to waiver of defaults, see “Modification and Waiver” above.

During default, the trustee has a duty to act with the required standard of care. Otherwise, the Indenture provides that the trustee will
be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the holders,
unless the holders will have offered to the trustee reasonable indemnity. If the provisions for indemnification of the trustee have been
satisfied, the holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the
time, method and place of conducting any

proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the debt
securities of that series.

Consolidation, Merger and Sale of Assets

If the conditions below are met, we may, without the consent of any holders of 2027 Notes: (i) consolidate or merge with or into
another entity, or (ii) transfer or lease our assets as an entirety to another entity.

We have agreed that we will engage in a consolidation, merger or transfer or lease of assets as an entirety only if: (i) the entity
formed by the consolidation or into which we are merged or which acquires or leases our assets is a corporation, partnership or trust
organized and existing under the laws of any United States jurisdiction and assumes our obligations on the debt securities and under
the Indenture, (ii) after giving effect to the transaction, no event of default would have happened and be continuing, and (iii) certain
other conditions are met.

Regarding the Trustee

The Bank of New York Trust Company, N.A. is the trustee under the Indenture.

6.250% GBP Notes (the “2030 Notes”)

General

The 2030 Notes were issued under a fiscal agency agreement (the “Fiscal Agency Agreement”), dated as of January 31, 2000,
between the Company and Bank One, NA, acting through its London Branch as fiscal agent and principal paying agent and certain
paying agents. The Bank of New York Mellon Trust Company N.A., as successor-in-interest to Bank One, NA, London Branch,
currently serves as fiscal agent (the “Fiscal Agent”). The Bank of New York Mellon (London Branch), as successor-in-interest to
Bank One, NA, London Branch, currently serves as principal paying agent. The Company initially issued £500 million aggregate
principal amount of 2030 Notes, of which £105.628 million remain outstanding.

The 2030 Notes bear interest at the rate of 6.25% per annum payable annually in arrears on January 31 (an “Interest Payment Date”).
If any Interest Payment Date would otherwise be a day which is not a Business Day (as defined below), the Interest Payment Date
will be postponed to the next day which is a Business Day and no additional interest will be payable on account of such delayed
payment. “Business Day” means any day, other than a Saturday or Sunday, on which banks in New York City and the relevant place
of payment are open for business.

The first interest period began on January 31, 2000.

The 2030 Notes are the general, direct, unsecured and unsubordinated obligations of the Company, ranking equally among
themselves and equally with all other present and future

unsecured and unsubordinated indebtedness of the Company. Neither the Fiscal Agency Agreement nor the 2030 Notes limit other
indebtedness or securities which may be incurred or issued by the Company or its subsidiaries and contain no financial or similar
restrictions on the Company or its subsidiaries except as described below under “Certain Covenants of the Company.”

The 2030 Notes were issued in British Pounds Sterling.

Redemption

The 2030 Notes may be redeemed, in whole but not in part, prior to maturity as set out below. Unless previously redeemed or
repurchased and cancelled, the 2030 Notes will be payable at par including Additional Amounts, as described below, if any, on
January 31, 2030 or such earlier date on which the same will be due and payable in accordance with the terms and conditions of the
2030 Notes; provided that if the maturity date of the 2030 Notes is not a Business Day, the 2030 Notes will be payable on the next
succeeding Business Day (and no interest will accrue for the period from January 31, 2030 to such payment date).

Optional Redemption

The 2030 Notes may be redeemed, in whole but not in part, at any time at the option of the Company, on giving not less than 30 nor
more than 60 days’ notice, at a price equal to the greater of the following, together with interest accrued and unpaid up to, but
excluding, the date of redemption:

(a) 100% of the principal amount of the 2030 Notes; and

(b) that price (the “Redemption Price”), expressed as a percentage (rounded to three decimal places, 0.0005 being rounded down), at
which the Gross Redemption Yield (as defined below) on the 2030 Notes, if they were to be purchased at such price on the third
dealing day prior to the date of the publication of the notice of redemption, would be equal to the Gross Redemption Yield on such
dealing day of 6% Treasury Stock 2028 or, if such stock is no longer in issue, of such other United Kingdom government stock as
the Company, with the advice of three leading brokers operating in the gilt-edged market and/or gilt-edged market makers selected
by the Company, will determine to be appropriate (the “Reference Stock”) on the basis of the middle market price of the Reference
Stock prevailing at 11:00 a.m. on such dealing day as determined by J.P. Morgan Securities Ltd.

Upon the expiry of such notice, the Company will be bound to redeem the 2030 Notes at the price set forth above (including interest
accrued and unpaid up to, but excluding, the date of redemption).

The “Gross Redemption Yield” on the 2030 Notes and on the Reference Stock will be expressed as a percentage and will be
calculated on the basis indicated by the Joint Index and Classification

Committee of the Institute and Faculty of Actuaries as reported in the Journal of the Institute of Actuaries, Vol. 105, Part I, 1978,
page 18 or its successor publication.

Redemption for Tax Reasons

The 2030 Notes also may be redeemed at the option of the Company, in whole but not in part, at a redemption price equal to 100%
of the principal amount of the 2030 Notes to be redeemed, together with interest accrued and unpaid to the date fixed for redemption,
at any time, on giving not less than 30 nor more than 60 days’ notice (which notice will be irrevocable), if (a) the Company has or
will become obligated to pay Additional Amounts as a result of any change in or amendment to the laws, regulations or rulings of the
United States or any political subdivision or any taxing authority thereof or therein affecting taxation, or any change in or
amendment to an official application, interpretation, administration or enforcement of such laws, regulations or rulings (including a
holding by a court of competent jurisdiction in the United States), or (b) any action will have been taken by any taxing authority, or
any action has been brought in a court of competent jurisdiction, in the United States or any political subdivision or taxing authority
thereof or therein, including any of those actions specified in (a) above (whether or not such action was taken or brought with respect
to the Company) or any change, clarification, amendment, application or interpretation of such laws, regulations or rulings will be
officially proposed, which results in a substantial likelihood that the Company will be required to pay Additional Amounts on the
next Interest Payment Date; provided, however, that no such notice of redemption will be given earlier than 90 days prior to the
earliest date on which the Company would be, in the case of a redemption for the reasons specified in (a) above, or there would be a
substantial likelihood that the Company would be, in the case of a redemption for the reasons specified in (b) above, obligated to pay
such Additional Amounts if a payment in respect of the 2030 Notes were then due.

Special Tax Redemption

In addition, if the Company determines, based upon a written opinion of independent legal counsel of recognized standing, that any
payment made outside the United States by the Company or any paying agent (acting as agent for the Company and not as agent for
the beneficial owner of a 2030 Note or coupon) of the full amount of principal or interest due with respect to any 2030 Note or
coupon would, under any present or future laws or regulations of the United States, be subject to any certification, identification,
documentation, information or other reporting requirement of any kind, the effect of which is the disclosure to the Company, any
paying agent or any governmental authority of the nationality, residence or identity of a beneficial owner of such 2030 Note or
coupon who is a United States Alien (as defined under “Payment of Additional Amounts”) (other than such a requirement (a) which
would not be applicable to payment made by the Company or any one of its paying agents (i) directly to the beneficial owner or (ii)
to any custodian, nominee or other agent of the beneficial owner, (b) which can be satisfied by the holder who is not the beneficial
owner thereof or the custodian, nominee or other agent certifying that the beneficial owner is a United States Alien, (c) which would
be applicable only to a payment by a custodian, nominee or other agent of the beneficial owner to the beneficial owner, or (d) which
would be applicable to a payment to any custodian,

nominee, or other agent of the beneficial owner who is a United States person or a U.S. Controlled Person; provided that in each case
referred to in clauses (a)(ii) and (b), payment by such custodian, nominee or other agent of such beneficial owner is not otherwise
subject to any such requirement other than any such requirement which is imposed on a custodian, nominee, or other agent described
in clause (d)) the Company at its election will either (x) redeem all of the 2030 Notes, upon not less than 30 nor more than 60 days’
prior notice as described under “Notices” below, at a redemption price equal to 100% of their principal amount, together with
accrued and unpaid interest to the redemption date, or (y) if and so long as the certification, identification, documentation,
information or other reporting requirements referred to in this paragraph would be fully satisfied with respect to the 2030 Notes by
payment of United States withholding, backup withholding or similar tax, pay such Additional Amounts as are necessary in order
that, following the effective date of such requirements, every net payment made outside the United States by the Company or any
paying agent of the principal of and interest on a 2030 Note or a coupon appertaining thereto to a beneficial owner who is a United
States Alien (but without any requirement that the nationality, residence or identity (as distinguished from status as a United States
Alien) of the beneficial owner be disclosed to the Company, any paying agent or any United States governmental authority), after
deduction or withholding for or on account of such United States withholding, backup withholding or similar tax (other than a
withholding, backup withholding or similar tax which would not be applicable in the circumstances referred to in the second
parenthetical clause of the first sentence of this paragraph) but before deduction or withholding on account of any tax, duty,
assessment or other governmental charge described in (a) through (h) of the first paragraph under “Payment of Additional Amounts”,
will not be less than the amount provided in the 2030 Note or the coupon to be then due and payable. The Company will make such
determination and election and notify the Fiscal Agent as soon as practicable, and the Fiscal Agent will promptly give notice of such
determination in the manner provided under “Notices” below (the “Determination Notice”) stating the effective date of such
certification, identification, documentation, information or other reporting requirement, whether the Company will redeem the 2030
Notes or will pay the Additional Amounts specified in this paragraph and (if applicable) the last date by which the redemption of the
2030 Notes must take place. If the Company elects to redeem the 2030 Notes, such redemption will take place on such date, not later
than one year after publication of the Determination Notice, as the Company elects by notice in writing to the Fiscal Agent at least
60 days before such date, unless shorter notice is acceptable to the Fiscal Agent. Notwithstanding the foregoing, the Company will
not so redeem the 2030 Notes if the Company, based upon a written opinion of independent legal counsel of recognized standing,
subsequently determines, not less than 30 days prior to the redemption date that subsequent payments would not be subject to any
such requirement, in which case the Company will notify the Fiscal Agent in writing, and the Fiscal Agent will promptly give notice
to the holders of the 2030 Notes of that determination and any earlier redemption notice will thereupon be revoked and of no further
effect. If the Company elects as provided in clause (y) above to pay Additional Amounts, (A) the Company may, as long as the
Company is obligated to pay such Additional Amounts, redeem all of the 2030 Notes, at any time, upon not less than 30 nor more
than 60 days’ prior notice as described under “Notices” below, at a redemption price equal to 100% of their principal amount,
together with accrued and unpaid interest to the redemption date but without deduction for applicable United States withholding
taxes with respect to which the Company is obligated to pay Additional Amounts and (B) if the condition

specified in clause (y) above is no longer satisfied, the Company will redeem all of the 2030 Notes in accordance with the provisions
of this paragraph.

Payment of Additional Amounts

All payments of principal and interest in respect of the 2030 Notes or coupons will be made free and clear of, and without deduction
or withholding for or on account of, any present or future taxes, duties, assessments or other governmental charges of whatsoever
nature imposed, levied, collected, withheld or assessed by the United States or any political subdivision or taxing authority thereof or
therein, unless such withholding or deduction is required by law. In the event such withholding or deduction is required by law,
subject to the limitations set forth below, the Company will pay as additional interest on the 2030 Notes or coupons to the holder or
beneficial owner of any 2030 Note or coupon who is a United States Alien such additional amounts (“Additional Amounts”) as may
be necessary in order that every net payment by the Company or any paying agent of principal of or interest on the 2030 Notes or
coupons (including upon redemption), after deduction or withholding for or on account of any present or future tax, duty, assessment
or other governmental charge imposed upon or as a result of such payment by the United States or any political subdivision or taxing
authority thereof or therein, will not be less than the amount provided for in such 2030 Note or coupon to be then due and payable
before any such tax, duty, assessment or other governmental charge; provided, however, that the foregoing obligation to pay
Additional Amounts will not apply to:

(a) any tax, duty, assessment or other governmental charge which would not have been so imposed but for (i) the existence of any
present or former connection between such holder or beneficial owner (or between a fiduciary, settlor, beneficiary, member or
shareholder or other equity owner of, or a person having a power over, such holder or beneficial owner, if such holder or beneficial
owner is an estate, a trust, a limited liability company, a partnership, a corporation or other entity) and the United States, including,
without limitation, such holder or beneficial owner (or such fiduciary, settlor, beneficiary, member, shareholder or other equity
owner or person having such a power) being or having been a citizen or resident or treated as a resident thereof or being or having
been engaged in a trade or business therein or being or having been present therein or having or having had a permanent
establishment therein, (ii) the failure of such holder or beneficial owner to comply with any requirement under United States income
tax laws and regulations to establish entitlement to a partial or complete exemption from such tax, duty, assessment or other
governmental charge (other than any such exemption which is conditioned upon the disclosure to the Company, any paying agent or
governmental authority of the nationality, residence or identity of the beneficial owner of the 2030 Note or coupon), or (iii) such
holder’s or beneficial owner’s present or former status as a personal holding company or a foreign personal holding company with
respect to the United States, as a controlled foreign corporation with respect to the United States, as a passive foreign investment
company with respect to the United States, as a foreign tax exempt organization with respect to the United States or as a corporation
which accumulates earnings to avoid United States federal income tax;

(b) any tax, duty, assessment or other governmental charge imposed by reason of the holder or beneficial owner (i) owning or having
owned, directly or indirectly, actually or constructively,

10% or more of the total combined voting power of all classes of stock of the Company, (ii) being a bank receiving interest described
in section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended, or (iii) being a controlled foreign corporation with
respect to the United States that is related to the Company by stock ownership;

(c) any tax, duty, assessment or other governmental charge which would not have been so imposed but for the presentation by the
holder or beneficial owner of such 2030 Note or coupon for payment on a date more than 10 days after the date on which such
payment became due and payable or the date on which payment thereof is duly provided for and notice is given to holders,
whichever occurs later, except to the extent that the holder or beneficial owner would have been entitled to such Additional Amounts
on presenting such 2030 Note or coupon on any date during such 10-day period;

(d) any estate, inheritance, gift, sales, transfer, personal property, wealth, interest equalization or any similar tax, assessment or
governmental charge;

(e) any tax, duty, assessment or other governmental charge which is payable otherwise than by withholding from payment of
principal of or interest on such 2030 Note or coupon;

(f) any tax, duty, assessment or other governmental charge which is payable by a holder that is not the beneficial owner of the 2030
Note or the coupon, or a portion of either, or that is a fiduciary, partnership, limited liability company or other similar entity, but only
to the extent that a beneficial owner, a beneficiary or settlor with respect to such fiduciary or member of such partnership, limited
liability company or similar entity would not have been entitled to the payment of an Additional Amount had such beneficial owner,
settlor, beneficiary or member received directly its beneficial or distributive share of the payment;

(g) any tax, duty, assessment or other governmental charge required to be withheld by any paying agent from any payment of
principal of or interest on any 2030 Note or coupon, if such payment can be made without such withholding by any other paying
agent; or

(h) any combination of items (a), (b), (c), (d), (e), (f) and (g).

For purposes of the foregoing, the holding of or the receipt of any payment with respect to a 2030 Note or a coupon will not
constitute a connection between the holder or beneficial owner (or between a fiduciary, settlor, beneficiary, member or shareholder
or other equity owner of, or a person having a power over, such holder or beneficial owner if such holder or beneficial owner is an
estate, a trust, a limited liability company, a partnership, a corporation or other entity) and the United States.

Any reference herein to principal or interest will be deemed to refer to Additional Amounts which may be payable under the
provisions of this section.

Except as specifically provided in the 2030 Notes, the Company will not be required to make any payment with respect to any tax,
duty, assessment or other governmental charge imposed by any government or any political subdivision or taxing authority thereof
or therein.

“United States Alien” means any corporation, partnership, individual or fiduciary that, as to the United States, is (i) a foreign
corporation, (ii) a nonresident alien individual, (iii) a nonresident alien fiduciary of a foreign estate or trust, or (iv) a foreign
partnership one or more of the members of which is, as to the United States, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.

Certain Covenants of the Company

Restrictions on Secured Debt

If the Company or any Domestic Subsidiary will incur, assume or guarantee any Debt secured by a Mortgage of any Principal
Domestic Manufacturing Property or on any shares of stock or debt of any Domestic Subsidiary, the Company will secure, or cause
such Domestic Subsidiary to secure, the 2030 Notes then outstanding equally and ratably with (or prior to) such Debt, unless after
giving effect thereto the aggregate amount of all such Debt so secured, together with all Attributable Debt of the Company and its
Domestic Subsidiaries in respect of sale and leaseback transactions involving Principal Domestic Manufacturing Properties, would
not exceed 5% of the Consolidated Net Tangible Assets of the Company and its consolidated subsidiaries. The restriction will not
apply to, and there will be excluded in computing secured Debt for the purpose of such restriction, Debt secured by (a) Mortgages on
property of, or on any shares of stock or Debt of, any corporation existing at the time such corporation becomes a Domestic
Subsidiary, (b) Mortgages in favor of the Company or a Domestic Subsidiary, (c) Mortgages in favor of U.S. governmental bodies to
secure progress or advance payments, (d) Mortgages on property, shares of stock or Debt existing at the time of acquisition thereof
(including acquisition through merger or consolidation), purchase money Mortgages and construction cost Mortgages and (e) any
extension, renewal or refunding of any Mortgage referred to in the foregoing clauses (a) through (d), inclusive. The Fiscal Agency
Agreement does not restrict the occurrence of unsecured debt by the Company or its subsidiaries.

Restrictions on Sales and Leasebacks

Neither the Company nor any Domestic Subsidiary may enter into any sale and leaseback transaction involving any Principal
Domestic Manufacturing Property, the completion of construction and commencement of full operation of which has occurred more
than 120 days prior thereto, unless (a) the Company or such Domestic Subsidiary could incur a lien on such property under the
restrictions described above under “Restrictions on Secured Debt” in an amount equal to the Attributable Debt with respect to the
sale and leaseback transaction without equally and ratably securing the 2030 Notes then outstanding or (b) the Company, within 120
days, applies to the retirement of its Funded Debt an amount not less than the greater of (i) the net proceeds of the sale of the
Principal Domestic Manufacturing Property leased pursuant to such arrangement or (ii) the fair value of the Principal Domestic
Manufacturing Property so

leased (subject to credits for certain voluntary retirements of Funded Debt). This restriction will not apply to any sale and leaseback
transaction (a) between the Company and a Domestic Subsidiary or between Domestic Subsidiaries or (b) involving the taking back
of a lease for a period of less than three years.

Certain Definitions

The term “Attributable Debt” means the total net amount of rent (discounted at 10% per annum compounded annually) required to
be paid during the remaining term of any lease.

The term “Consolidated Net Tangible Assets” means the aggregate amount of assets (less applicable reserves and other properly
deductible items) after deducting therefrom (a) all current liabilities (excluding any amount thereof constituting Funded Debt by
reason of being renewable or extendible) and (b) all goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, all as set forth on the most recent balance sheet of the Company and its consolidated subsidiaries
and computed in accordance with generally accepted accounting principles.

The term “Debt” means notes, bonds, debentures or other similar evidences of indebtedness for money borrowed.

The term “Domestic Subsidiary” means a subsidiary of the Company except a subsidiary which neither transacts any substantial
portion of its business nor regularly maintains any substantial portion of its fixed assets within the United States or which is engaged
primarily in financing the operations of the Company and its subsidiaries outside the United States.

The term “Funded Debt” means Debt having a maturity of, or by its terms extendible or renewable at the option of the borrower for,
a period of more than 12 months after the date of determination of the amount thereof.

The term “Mortgage’’ means pledges, mortgages and other liens.

The term “Principal Domestic Manufacturing Property” means any facility (together with the land on which it is erected and fixtures
comprising a part thereof) used primarily for manufacturing or processing, located in the United States, owned or leased by the
Company or a subsidiary of the Company and having a gross book value in excess of 3/4 of 1% of Consolidated Net Tangible
Assets, other than any such facility or portion thereof (i) which is a pollution control or other facility financed by obligations issued
by a State or local governmental unit pursuant to Section 103(b)(4)(E), 103(b)(4)(F) or 103(b)(6) of the Internal Revenue Code of
1954, or any successor provision thereof, or (ii) which, in the opinion of the Board of Directors of the Company, is not of material
importance to the total business conducted by the Company and its subsidiaries as an entirety.

The term “subsidiary of the Company” means a corporation a majority of the outstanding voting stock of which is owned, directly or
indirectly, by the Company and/or one or more subsidiaries of the Company.

The term “U.S. Controlled Person” means a controlled foreign corporation for U.S. federal income tax purposes, a foreign person
50% or more of whose gross income from certain specified periods is effectively connected with its conduct of a United States trade
or business, or a foreign partnership if, at any time during the taxable year, at least 50% of the capital or income interest in the
partnership is owned by United States persons, or the partnership is engaged in a U.S. trade or business.

Meetings of Holders and Waivers of Covenants

The Fiscal Agency Agreement provides that the Company may, upon the notice specified in the Fiscal Agency Agreement, call a
meeting of holders of 2030 Notes for the purpose of obtaining a waiver of any covenant or condition set forth above under “Certain
Covenants of the Company” or to modify or amend the Fiscal Agency Agreement or the 2030 Notes. Persons entitled to vote a
majority in principal amount of the 2030 Notes outstanding will constitute a quorum at a meeting of holders of 2030 Notes except as
hereinafter provided. In the absence of a quorum, a meeting called by the Company will he adjourned for a period of not less than 10
days, and in the absence of a quorum at any such adjourned meeting, the meeting will be further adjourned for another period of not
less than 10 days, at which further adjourned meeting persons entitled to vote 25% of the principal amount of the 2030 Notes at the
time outstanding will constitute a quorum. Any action which may be taken by the meeting of holders of 2030 Notes requires a
favorable vote of the holders of the lesser of (i) a majority in principal amount of the outstanding 2030 Notes and (ii) 75% in
principal amount of the 2030 Notes represented and voting at the meeting; provided that without the consent of the holder of each
2030 Note affected thereby, no modification, amendment or waiver of the Fiscal Agency Agreement or the 2030 Notes may (a)
waive a default in the payment of the principal of or interest on any such 2030 Note, or change the stated maturity of the principal of
or any installment of interest on any such 2030 Note; (b) reduce the principal amount of or the rate of interest on any such 2030 Note
or change the obligation of the Company to pay Additional Amounts with respect to such 2030 Note; (c) change the currency of
payment of principal of or interest on any such 2030 Note (including any Additional Amount in respect. thereof); (d) impair the right
to institute suit for the enforcement of any such payment on or with respect to any such 2030 Note; (e) reduce the percentage of the
aggregate amount of 2030 Notes outstanding necessary to modify or amend the Fiscal Agency Agreement or the 2030 Notes or
reduce the percentage of votes required for the adoption of any action at a meeting of holders of 2030 Notes; or (f) modify the
obligation of the Company to maintain an office or agency outside the United States for the purposes specified in the Fiscal Agency
Agreement.

Events of Default

The 2030 Notes define an Event of Default with respect to the 2030 Notes as being any one of the following events: (a) failure to pay
principal of any 2030 Note when due; (b) failure to pay

any interest on any 2030 Note or any Additional Amount in respect of any 2030 Note when due, continued for 30 days; (c) failure to
perform any other covenant of the Company in the Fiscal Agency Agreement, continued for 90 days after written notice as provided
in the Fiscal Agency Agreement; and (d) certain events in bankruptcy, insolvency or reorganization.

If an Event of Default (other than an Event of Default specified in clause (c) of the preceding paragraph) will occur and be
continuing, then a holder of any 2030 Note may declare the principal amount of such 2030 Note and interest thereon to be
immediately due and payable. If an Event of Default will occur and be continuing, the Holders of at least 25% in principal amount of
the outstanding 2030 Notes may declare the principal amount of all the 2030 Notes and interest thereon to be due and payable
immediately. At any time after a declaration of acceleration with respect to the 2030 Notes has been made, but before a judgment or
decree based on acceleration has been obtained, the Holders of a majority in principal amount of the outstanding 2030 Notes may,
under certain circumstances, rescind and annul such acceleration. For information as to waiver of defaults, see “Meetings of Holders
and Waivers of Covenants.”

Consolidation, Merger and Sale of Assets

The Company, without the consent of any Holders of 2030 Notes, may consolidate or merge with or into, or transfer or lease its
assets as an entirety to, any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof (a “Person”), provided that (i) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or which acquires or leases the assets of the Company substantially as an
entirety is organized and existing under the law of any United States jurisdiction and assumes the Company’s obligations on the
2030 Notes and under the Fiscal Agency Agreement, (ii) after giving effect to such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default, will have happened and be continuing, and (iii)
certain other conditions are met.

5.250% GBP Notes (the “2033 Notes”)

General

The 2033 notes were issued under a fiscal agency agreement (the “Fiscal Agency Agreement”), dated as of December 4, 2002,
between the Company and Bank One, NA, acting through its London Branch as fiscal agent and principal paying agent and certain
paying agents. The Bank of New York Mellon Trust Company N.A., as successor-in-interest to Bank One, NA, London Branch,
currently serves as fiscal agent (the “Fiscal Agent”). The Bank of New York Mellon (London Branch), as successor-in-interest to
Bank One, NA, London Branch, currently serves as principal paying agent. The Company initially issued £200 million aggregate
principal amount of 2033 Notes, of which £90.789 million remain outstanding.

The 2033 Notes bear interest from, and including, December 4, 2002 at the rate of 5.25% per annum payable annually in arrears on
January 19 (an “Interest Payment Date”). If any Interest

Payment Date would otherwise be a day which is not a Business Day (as defined below), the Interest Payment Date will be
postponed to the next day which is a Business Day and no additional interest will be payable on account of such delayed payment.
“Business Day” means any day, other than a Saturday or Sunday, on which banks in New York City and the relevant place of
payment are open for business.

The first interest period began on December 4, 2002.

The 2033 Notes are general, direct, unsecured and unsubordinated obligations of the Company, ranking equally among themselves
and equally with all other present and future unsecured and unsubordinated indebtedness of the Company. Neither the Fiscal Agency
Agreement nor the 2033 Notes will limit other indebtedness or securities which may be incurred or issued by the Company or its
subsidiaries and will contain no financial or similar restrictions on the Company or its subsidiaries except as described below under
“Certain Covenants of the Company.”

The 2033 Notes were issued in British Pounds Sterling.

Redemption

The 2033 Notes may be redeemed, in whole but not in part, prior to maturity as set out below. Unless previously redeemed or
repurchased and cancelled, the 2033 Notes will be payable at par including Additional Amounts, as described below, if any, on
January 19, 2033 or such earlier date on which the same will be due and payable in accordance with the terms and conditions of the
2033 Notes; provided that if the maturity date of the 2033 Notes is not a Business Day, the 2033 Notes will be payable on the next
succeeding Business Day (and no interest will accrue for the period from January 19 to such payment date).

Optional Redemption

The 2033 Notes may be redeemed, in whole but not in part, at any time at the option of the Company, on giving not less than 30 nor
more than 60 days’ notice in accordance with “Notices” below, at a price equal to the greater of the following, together with interest
accrued and unpaid up to, but excluding, the date of redemption:

(a) 100% of the principal amount of the 2033 Notes; and

(b) that price (the “Redemption Price”), expressed as a percentage (rounded to three decimal places, 0.0005 being rounded
down), at which the Gross Redemption Yield (as defined below) on the 2033 Notes, if they were to be purchased at such price on the
third dealing day prior to the date of the publication of the notice of redemption, would be equal to the Gross Redemption Yield on
such dealing day of 4.25% Treasury Stock 2032 or, if such stock is no longer in issue, of such other United Kingdom government
stock as the Company, with the advice of three leading brokers operating in the gilt-edged market and/or gilt-edged market makers
selected by the Company, will determine to be appropriate (the “Reference Stock”) on the basis of the middle market price of the
Reference Stock prevailing at 11:00 a.m. on such dealing day as determined by Deutsche Bank AG London.

Upon the expiry of such notice, the Company will be bound to redeem the 2033 Notes at the price set forth above (including interest
accrued and unpaid up to, but excluding, the date of redemption).

The “Gross Redemption Yield” on the 2033 Notes and on the Reference Stock will be expressed as a percentage and will be
calculated on the basis indicated by the Joint Index and Classification Committee of the Institute and Faculty of Actuaries as reported
in the Journal of the Institute of Actuaries, Vol. 105, Part I, 1978, page 18 or its successor publication.

Redemption for Tax Reasons

The 2033 Notes also may be redeemed at the option of the Company, in whole but not in part, at a redemption price equal to 100%
of the principal amount of the 2033 Notes to be redeemed, together with interest accrued and unpaid to the date fixed for redemption,
at any time, on giving not less than 30 nor more than 60 days’ notice in accordance with “Notices” below (which notice will be
irrevocable), if (a) the Company has or will become obligated to pay Additional Amounts as a result of any change in or amendment
to the laws, regulations or rulings of the United States or any political subdivision or any taxing authority thereof or therein affecting
taxation, or any change in or amendment to an official application, interpretation, administration or enforcement of such laws,
regulations or rulings (including a holding by a court of competent jurisdiction in the United States), or (b) any action will have been
taken by any taxing authority, or any action has been brought in a court of competent jurisdiction, in the United States or any
political subdivision or taxing authority thereof or therein, including any of those actions specified in (a) above (whether or not such
action was taken or brought with respect to the Company) or any change, clarification, amendment, application or interpretation of
such laws, regulations or rulings will be officially proposed, which results in a substantial likelihood that the Company will be
required to pay Additional Amounts on the next Interest Payment Date; provided, however, that no such notice of redemption will be
given earlier than 90 days prior to the earliest date on which the Company would be, in the case of a redemption for the reasons
specified in (a) above, or there would be a substantial likelihood that the Company would be, in the case of a redemption for the
reasons specified in (b) above, obligated to pay such Additional Amounts if a payment in respect of the 2033 Notes were then due.

Special Tax Redemption

In addition, if the Company determines, based upon a written opinion of independent legal counsel of recognized standing, that any
payment made outside the United States by the Company or any paying agent (acting as agent for the Company and not as agent for
the beneficial owner of a 2033 Note or coupon) of the full amount of principal or interest due with respect to any 2033 Note or
coupon would, under any present or future laws or regulations of the United States, be subject to any certification, identification,
documentation, information or other reporting requirement of any kind, the effect of which is the disclosure to the Company, any
paying agent or any governmental authority of the nationality, residence or identity (as distinguished from, for example, status as a
United States Alien as defined under “Payment of Additional Amounts”) of a beneficial owner of such 2033 Note or coupon who is a
United States

Alien (other than such a requirement which (a) would not be applicable to payment made by the Company or any one of its paying
agents (i) directly to the beneficial owner or (ii) to any custodian, nominee or other agent of the beneficial owner, (b) can be satisfied
by the holder who is not the beneficial owner thereof or the custodian, nominee or other agent certifying that the beneficial owner is
a United States Alien, (c) would be applicable only to a payment by a custodian, nominee or other agent of the beneficial owner to
the beneficial owner, or (d) would be applicable to a payment to any custodian, nominee, or other agent of the beneficial owner who
is a United States person or a U.S. Controlled Person; provided that in each case referred to in clauses (a)(ii) and (b), payment by
such custodian, nominee or other agent of such beneficial owner is not otherwise subject to any such requirement other than any such
requirement which is imposed on a custodian, nominee, or other agent described in clause (d)) the Company at its election will either
(x) redeem all of the 2033 Notes, upon not less than 30 nor more than 60 days’ prior notice as described under “Notices” below, at a
redemption price equal to 100% of their principal amount, together with accrued and unpaid interest to the redemption date, or (y) if
and so long as the certification, identification, documentation, information or other reporting requirements referred to in this
paragraph would be fully satisfied with respect to the 2033 Notes by payment of a United States withholding, backup withholding or
similar tax, pay such Additional Amounts as are necessary in order that, following the effective date of such requirements, every net
payment made outside the United States by the Company or any paying agent of the principal of and interest on a 2033 Note or a
coupon appertaining thereto to a beneficial owner who is a United States Alien (but without any requirement that the nationality,
residence or identity (as distinguished from, for example, status as a United States Alien) of the beneficial owner be disclosed to the
Company, any paying agent or any United States governmental authority), after deduction or withholding for or on account of such
United States withholding, backup withholding or similar tax (other than a withholding, backup withholding or similar tax which
would not be applicable in the circumstances referred to in the second parenthetical clause of the first sentence of this paragraph) but
before deduction or withholding on account of any tax, duty, assessment or other governmental charge described in (a) through (j) of
the first paragraph under “Payment of Additional Amounts”, will not be less than the amount provided in the 2033 Note or the
coupon to be then due and payable. The Company will make such determination and election and notify the Fiscal Agent as soon as
practicable, and the Fiscal Agent will promptly give notice of such determination in the manner provided under “Notices” below (the
“Determination Notice”) stating the effective date of such certification, identification, documentation, information or other reporting
requirement, whether the Company will redeem the 2033 Notes or will pay the Additional Amounts specified in this paragraph and
(if applicable) the last date by which the redemption of the 2033 Notes must take place. If the Company elects to redeem the 2033
Notes, such redemption will take place on such date, not later than one year after publication of the Determination Notice, as the
Company elects by notice in writing to the Fiscal Agent at least 60 days before such date, unless shorter notice is acceptable to the
Fiscal Agent. Notwithstanding the foregoing, the Company will not so redeem the 2033 Notes if the Company, based upon a written
opinion of independent legal counsel of recognized standing, subsequently determines, not less than 30 days prior to the redemption
date, that subsequent payments would not be subject to any such requirement, in which case the Company will notify the Fiscal
Agent in writing, and the Fiscal Agent will promptly give notice to the holders of the 2033 Notes of that determination and any
earlier redemption notice will thereupon be revoked

and of no further effect. If the Company elects as provided in clause (y) above to pay Additional Amounts, (A) the Company may, as
long as the Company is obligated to pay such Additional Amounts, redeem all of the 2033 Notes, at any time, upon not less than 30
nor more than 60 days’ prior notice as described under “Notices” below, at a redemption price equal to 100% of their principal
amount, together with accrued and unpaid interest to the redemption date but without deduction for applicable United States
withholding taxes with respect to which the Company is obligated to pay Additional Amounts and (B) if the condition specified in
clause (y) above is no longer satisfied, the Company will redeem all of the 2033 Notes in accordance with the provisions of this
paragraph.

Payment of Additional Amounts

All payments of principal and interest in respect of the 2033 Notes or coupons will be made free and clear of, and without deduction
or withholding for or on account of, any present or future taxes, duties, assessments or other governmental charges of whatsoever
nature imposed, levied, collected, withheld or assessed by the United States or any political subdivision or taxing authority thereof or
therein, unless such withholding or deduction is required by law. In the event such withholding or deduction is required by law,
subject to the limitations set forth below, the Company will pay as additional interest on the 2033 Notes or coupons to the holder or
beneficial owner of any 2033 Note or coupon who is a United States Alien such additional amounts (“Additional Amounts”) as may
be necessary in order that every net payment by the Company or any paying agent of principal of or interest on the 2033 Notes or
coupons (including upon redemption), after deduction or withholding for or on account of any present or future tax, duty, assessment
or other governmental charge imposed upon or as a result of such payment by the United States or any political subdivision or taxing
authority thereof or therein, will not be less than the amount provided for in such 2033 Note or coupon to be then due and payable
before any such tax, duty, assessment or other governmental charge; provided, however, that the foregoing obligation to pay
Additional Amounts will not apply to:

(a) any tax, duty, assessment or other governmental charge which would not have been so imposed but for (i) the existence of
any present or former connection between such holder or beneficial owner (or between a fiduciary, settlor, beneficiary, member,
shareholder or other equity owner of, or a person having a power over, such holder or beneficial owner, if such holder or beneficial
owner is an estate, a trust, a limited liability company, a partnership, a corporation or other entity) and the United States, including,
without limitation, such holder or beneficial owner (or such fiduciary, settlor, beneficiary, member, shareholder or other equity
owner or person having such a power) being or having been a citizen or resident or treated as a resident thereof or being or having
been engaged in a trade or business therein or being or having been present therein or having or having had a permanent
establishment therein, (ii) the failure of such holder or beneficial owner to comply with any requirement under United States income
tax laws and regulations to establish entitlement to a partial or complete exemption from such tax, duty, assessment or other
governmental charge (other than any such exemption which is conditioned upon the disclosure to the Company, any paying agent or
any governmental authority of the nationality, residence or identity of the beneficial owner of the 2033 Note or coupon), or (iii) such
holder or beneficial owner being or having been with respect to the United States a personal holding company, a foreign personal
holding company, a controlled foreign

corporation, a passive foreign investment company, a foreign private foundation, a foreign tax exempt organization or a corporation
which accumulates earnings to avoid United States federal income tax;

(b) any tax, duty, assessment or other governmental charge imposed by reason of the holder or beneficial owner (i) owning or
having owned, directly or indirectly, actually or constructively, 10% or more of the total combined voting power of all classes of
stock of the Company, (ii) being a bank receiving interest described in section 881(c)(3)(A) of the United States Internal Revenue
Code of 1986, as amended or (iii) being a controlled foreign corporation with respect to the United States that is related to the
Company by stock ownership;

(c) any tax, duty, assessment or other governmental charge which would not have been so imposed but for the presentation by
the holder or beneficial owner of such 2033 Note or coupon for payment on a date more than 10 days after the date on which such
payment became due and payable or the date on which payment thereof is duly provided for and notice is given to holders,
whichever occurs later, except to the extent that the holder or beneficial owner would have been entitled to such Additional Amounts
on presenting such 2033 Note or coupon on any date during such 10-day period;

(d) any estate, inheritance, gift, sales, transfer, personal property, wealth, interest equalization or any similar tax, assessment or
governmental charge;

(e) any tax, duty, assessment or other governmental charge which is payable otherwise than by withholding from payment of
principal of or interest on such 2033 Note or coupon;

(f) any tax, duty, assessment or other governmental charge which is payable by a holder that is not the beneficial owner of the
2033 Note or the coupon, or a portion of either, or that is a fiduciary, partnership, limited liability company or other similar entity,
but only to the extent that a beneficial owner, a beneficiary or settlor with respect to such fiduciary or member of such partnership,
limited liability company or similar entity would not have been entitled to the payment of an Additional Amount had such beneficial
owner, settlor, beneficiary or member received directly its beneficial or distributive share of the payment;

(g) any tax, duty, assessment or other governmental charge required to be withheld by any paying agent from any payment of
principal of or interest on any 2033 Note or coupon, if such payment can be made without such withholding by any other paying
agent;

(h) any tax, duty, assessment or other governmental charge required to be withheld or deducted where such withholding or
deduction is imposed on a payment to an individual pursuant to any European Union Directive on the taxation of savings
implementing the conclusions of the ECOFIN Council meeting of 26th-27th November 2000 or any law implementing or complying
with, or introduced in order to conform to, such Directive;

(i) any tax, duty, assessment or other governmental charge that would not have been imposed in respect of any 2033 Note or
coupon if such 2033 Note or coupon had been presented to another paying agent in a Member State of the European Union; or

(j) any combination of items (a), (b), (c), (d), (e), (f), (g), (h) and (i).

For purposes of the foregoing, the holding of or the receipt of any payment with respect to a 2033 Note or a coupon will not
constitute a connection between the holder or beneficial owner (or between a fiduciary, settlor, beneficiary, member or shareholder
or other equity owner of, or a person having a power over, such holder or beneficial owner if such holder or beneficial owner is an
estate, a trust, a limited liability company, a partnership, a corporation or other entity) and the United States.

Any reference herein to principal or interest will be deemed to refer to Additional Amounts which may be payable under the
provisions of this section.

Except as specifically provided in the 2033 Notes, the Company will not be required to make any payment with respect to any tax,
duty, assessment or other governmental charge imposed by any government or any political subdivision or taxing authority thereof
or therein.

“United States Alien” means a person that is not a “United States person.”

“United States person” means any citizen or resident of the United States, a corporation, partnership or other entity organized in
or under the laws of the United States or any political subdivision thereof (other than any partnership treated as foreign under
Regulations that may be promulgated), an estate that is subject to United States federal income taxation without regard to the source
of its income, or a trust that is subject to the primary supervision of a court within the United States and the control of a United
States person or that has a valid election in effect under applicable Regulations to be treated as a “United States person.”

Certain Covenants of the Company

Restrictions on Secured Debt

If the Company or any Domestic Subsidiary will incur, assume or guarantee any Debt secured by a Mortgage of any Principal
Domestic Manufacturing Property or on any shares of stock or debt of any Domestic Subsidiary, the Company will secure, or cause
such Domestic Subsidiary to secure, the 2033 Notes then outstanding equally and ratably with (or prior to) such Debt, unless after
giving effect thereto the aggregate amount of all such Debt so secured, together with all Attributable Debt of the Company and its
Domestic Subsidiaries in respect of sale and leaseback transactions involving Principal Domestic Manufacturing Properties, would
not exceed five percent of the Consolidated Net Tangible Assets of the Company and its consolidated subsidiaries. The restriction
will not apply to, and there will be excluded in computing secured Debt for the purpose of such restriction, Debt secured by
(a) Mortgages on property of, or on any shares of stock or Debt of, any corporation existing at the time such corporation becomes a
Domestic Subsidiary, (b) Mortgages in favor of the Company or a Domestic Subsidiary, (c) Mortgages in favor of U.S.
governmental bodies to secure progress or advance payments, (d) Mortgages on property, shares of stock or Debt existing at the time
of acquisition thereof (including acquisition through merger or consolidation), purchase money Mortgages and construction cost
Mortgages and (e) any extension, renewal or refunding of any Mortgage referred to in the foregoing clauses (a) through (d),
inclusive. The Fiscal Agency Agreement does not restrict the occurrence of unsecured debt by the Company or its subsidiaries.

Restrictions on Sales and Leasebacks

Neither the Company nor any Domestic Subsidiary may enter into any sale and leaseback transaction involving any Principal
Domestic Manufacturing Property, the completion of construction and commencement of full operation of which has occurred more
than 120 days prior thereto, unless (a) the Company or such Domestic Subsidiary could incur a lien on such property under the
restrictions described above under “Restrictions on Secured Debt” in an amount equal to the Attributable Debt with respect to that
sale and leaseback transaction without equally and ratably securing the 2033 Notes then outstanding or (b) the Company, within 120
days, applies to the retirement of its Funded Debt an amount not less than the greater of (i) the net proceeds of the sale of the
Principal Domestic Manufacturing Property leased pursuant to such arrangement or (ii) the fair value of the Principal Domestic
Manufacturing Property so leased (subject to credits for certain voluntary retirements of Funded Debt). This restriction will not apply
to any sale and leaseback transaction (a) between the Company and a Domestic Subsidiary or between Domestic Subsidiaries or
(b) involving the taking back of a lease for a period of less than three years.

Certain Definitions

The term “Attributable Debt” means the total net amount of rent (discounted at 10% per annum compounded annually) required to
be paid during the remaining term of any lease.

The term “Consolidated Net Tangible Assets” means the aggregate amount of assets (less applicable reserves and other properly
deductible items) after deducting therefrom (a) all current liabilities (excluding any amount thereof constituting Funded Debt by
reason of being renewable or extendible) and (b) all goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, all as set forth on the most recent balance sheet of the Company and its consolidated subsidiaries
and computed in accordance with generally accepted accounting principles.

The term “Debt” means notes, bonds, debentures or other similar evidences of indebtedness for money borrowed.

The term “Domestic Subsidiary” means a subsidiary of the Company except a subsidiary which neither transacts any substantial
portion of its business nor regularly maintains any substantial portion of its fixed assets within the United States or which is engaged
primarily in financing the operations of the Company and its subsidiaries outside the United States.

The term “Funded Debt” means Debt having a maturity of, or by its terms extendible or renewable at the option of the borrower for,
a period of more than 12 months after the date of determination of the amount thereof.

The term “Mortgage” means pledges, mortgages and other liens.

The term “Principal Domestic Manufacturing Property” means any facility (together with the land on which it is created and fixtures
comprising a part thereof) used primarily for

manufacturing or processing, located in the United States, owned or leased by the Company or a subsidiary of the Company and
having a gross book value in excess of 3/4 of 1% of Consolidated Net Tangible Assets, other than any such facility or portion thereof
(i) which is a pollution control or other facility financed by obligations issued by a State or local governmental unit pursuant to
Section 103(b)(4)(E), 103(b)(4)(F) or 103(b)(6) of the Internal Revenue Code of 1954, or any successor provision thereof, or
(ii) which, in the opinion of the Board of Directors of the Company, is not of material importance to the total business conducted by
the Company and its subsidiaries as an entirety.

The term “subsidiary of the Company” means a corporation a majority of the outstanding voting stock of which is owned, directly or
indirectly, by the Company and/or one or more subsidiaries of the Company.

The term “U.S. Controlled Person” means a controlled foreign corporation for U.S. federal income tax purposes, a foreign person
50% or more of whose gross income from certain specified periods is effectively connected with its conduct of a United States trade
or business, or a foreign partnership if, at any time during the taxable year, at least 50% of the capital or income interest in the
partnership is owned by United States persons, or the partnership is engaged in a U.S. trade or business.

Meetings of Holders and Waivers of Covenants

The Fiscal Agency Agreement provides that the Company may, upon the notice specified in the Fiscal Agency Agreement, call a
meeting of holders of 2033 Notes for the purpose of obtaining a waiver of any covenant or condition set forth above under “Certain
Covenants of the Company” or to modify or amend the Fiscal Agency Agreement or the 2033 Notes. Persons entitled to vote a
majority in principal amount of the 2033 Notes outstanding will constitute a quorum at a meeting of holders of 2033 Notes except as
hereinafter provided. In the absence of a quorum, a meeting called by the Company will be adjourned for a period of not less than 10
days, and in the absence of a quorum at any such adjourned meeting, the meeting will be further adjourned for another period of not
less than 10 days, at which further adjourned meeting persons entitled to vote 25% of the principal amount of the 2033 Notes at the
time outstanding will constitute a quorum. Any action which may be taken by the meeting of holders of 2033 Notes requires a
favorable vote of the holders of the lesser of (i) a majority in principal amount of the outstanding 2033 Notes and (ii) 75% in
principal amount of the 2033 Notes represented and voting at the meeting; provided that without the consent of the holder of each
2033 Note affected thereby, no modification, amendment or waiver of the Fiscal Agency Agreement or the 2033 Notes may
(a) waive a default in the payment of the principal of or interest on any such 2033 Note, or change the stated maturity of the principal
of or any installment of interest on any such 2033 Note; (b) reduce the principal amount of or the rate of interest on any such 2033
Note or change the obligation of the Company to pay Additional Amounts with respect to such 2033 Note; (c) change the currency
of payment of principal of or interest on any such 2033 Note (including any Additional Amount in respect thereof); (d) impair the
right to institute suit for the enforcement of any such payment on or with respect to any such 2033 Note; (e) reduce the percentage of
the aggregate amount of 2033 Notes outstanding necessary to modify or amend the

Fiscal Agency Agreement or the 2033 Notes or reduce the percentage of votes required for the adoption of any action at a meeting of
holders of 2033 Notes; or (f) modify the obligation of the Company to maintain an office or agency outside the United States for the
purposes specified in the Fiscal Agency Agreement.

Events of Default

The 2033 Notes define an Event of Default with respect to the 2033 Notes as being any one of the following events: (a) failure to pay
principal of any 2033 Note when due; (b) failure to pay any interest on any 2033 Note or any Additional Amount in respect of any
2033 Note when due, continued for 30 days; (c) failure to perform any other covenant of the Company in the Fiscal Agency
Agreement, continued for 90 days after written notice as provided in the Fiscal Agency Agreement; and (d) certain events in
bankruptcy, insolvency or reorganization.

If an Event of Default (other than an Event of Default specified in clause (c) of the preceding paragraph) will occur and be
continuing, then a holder of any 2033 Note may declare the principal amount of such 2033 Note and interest thereon to be
immediately due and payable. If an Event of Default will occur and be continuing, the Holders of at least 25% in principal amount of
the outstanding 2033 Notes may declare the principal amount of all the 2033 Notes and interest thereon to be due and payable
immediately. At any time after a declaration of acceleration with respect to the 2033 Notes has been made, but before a judgment or
decree based on acceleration has been obtained, the Holders of a majority in principal amount of the outstanding 2033 Notes may,
under certain circumstances, rescind and annul such acceleration. For information as to waiver of defaults, see “Meetings of Holders
and Waivers of Covenants.”

Consolidation, Merger and Sale of Assets

The Company, without the consent of any Holders of 2033 Notes, may consolidate or merge with or into, or transfer or lease its
assets as an entirety to, any person, provided that (i) the person (if other than the Company) formed by such consolidation or into
which the Company is merged or which acquires or leases the assets of the Company substantially as an entirety is organized and
existing under the law of any United States jurisdiction and assumes the Company’s obligations on the 2033 Notes and under the
Fiscal Agency Agreement, (ii) after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, will have happened and be continuing, and (iii) certain other conditions are met.

Exhibit (10-8)

Long-Term Incentive Program – Related Correspondence and Terms and Conditions

Top of Form

You must scroll and read to the bottom of the grant letter above so
you can accept/reject your grant.

AWARD AGREEMENT [DATE]

NAME GLOBAL ID

Subject: NON-STATUTORY STOCK OPTION SERIES [YR]-LTIP-OCT AA

In recognition of your contributions to the future success of the business, The Procter & Gamble Company (“Company”) hereby grants to you an
option to purchase shares of Procter & Gamble Common Stock as follows:

Option Price per Share: $

Number of Shares:

Grant Date: [DATE]

Expiration Date: [DATE]

Vest Date: 100% on [DATE]

Acceptance Deadline: [DATE]

This Award is granted in accordance with and subject to the terms of The Procter & Gamble 2019 Stock and Incentive Compensation Plan (including
any applicable sub-plan) (the “Plan”), the Regulations of the Compensation and Leadership Development Committee of the Board of Directors
(“Committee”), this Award Agreement including Attachments and the Exercise Instructions in place as may be revised from time to time. Any
capitalized terms used in this Agreement that are not otherwise defined herein are defined in the Plan. You may access the Plan by activating this
hyperlink: The Procter & Gamble 2019 Stock and Incentive Compensation Plan and the Regulations and Sub Plans by activating this
hyperlink: Regulations of the Committee. If you have difficulty accessing the materials online, please send an email to [email address] for assistance.

Vesting and Exercise
If you leave the Company before the Vest Date, the Award will be forfeited unless you meet one of the conditions listed below. If you
remain employed through the Vest Date, the Award will become exercisable on the Vest Date. If you terminate employment before the Expiration
Date and prior to exercising the Award, except for the reasons listed below, the Award will be forfeited immediately upon your termination of
employment. For the purposes of this Award, termination of employment will be effective as of the date that you are no longer actively employed and
will not be extended by any notice period required under local law.

1. Termination on Account of Death. In the event of death, the Vest Date for this Award becomes your date of death and the Award in its entirety
remains exercisable until the Expiration Date.

2. Termination for a Qualified Reason Listed Below. In the event you terminate employment for one of the qualified reasons listed below, after the
Grant Date but before [date], the Award will be forfeited. In the event of termination for one of the qualified reasons listed below, on or after [date],
but prior to [date], the award will be prorated based on the number of days you remained an employee between the Grant Date and [date]. If the
termination for one of the qualified reasons listed below occurs after [date], the entire award will be retained. The portion of the award that is
ultimately retained will be exercisable on the Vest Date in this Award Agreement and will expire on the Expiration Date as long as you remain in
compliance with the terms of the Plan and the Regulations. Qualified termination reasons are as follows:

• Retirement or Disability;

• Termination pursuant to a written separation agreement from the Company or a subsidiary that provides for equity retention; or

• Termination in connection with a divestiture or separation of any of the Company’s businesses.

This Award Agreement, including Attachment A, the Plan and Regulations of the Committee together constitute an agreement between the
Company and you in accordance with the terms thereof and hereof, and no other understandings and/or agreements have been entered by you with
the Company regarding this specific Award. Any legal action related to this Award, including Article 6 of the Plan, must be brought in any federal or
state court located in Hamilton County, Ohio, USA, and you hereby agree to accept the jurisdiction of these courts and consent to service of process
from said courts solely for legal actions related to this Award. You have the right to consult with a lawyer before accepting this Award.

THE PROCTER & GAMBLE COMPANY

Tracey Grabowski

Chief Human Resources Officer

Attachment A

To Accept Your Award To Reject Your Award

Read and check the boxes below: Read and check the box(es) below:

I have read, understand and agree to be bound by each of:

• The Procter & Gamble 2019 Stock and Incentive Compensation Plan

• Regulations of the Committee

• This Award Agreement, including Attachment A

I have read and understand the terms noted above and do not agree
to be bound by these terms. I hereby reject the stock option award
detailed above.

I accept the stock option award detailed above (including attachments)

Bottom of Form

You must scroll and read to the bottom of the grant letter above so you
can accept/reject your grant.

AWARD AGREEMENT [DATE]
NAME GLOBAL ID

Subject: RESTRICTED STOCK UNIT SERIES [YR]-LTIP-OCT-RSU

In recognition of your contributions to the future success of the business, The Procter & Gamble Company (“Company”) hereby grants to you
Restricted Stock Units (“RSUs”) of Procter & Gamble Common Stock as follows:

Number of Restricted Stock Units:

Grant Date: [DATE]

Stock Price on Grant Date: $

Vest Date: [DATE]

Settlement Date (Shares Delivered on): [DATE]

Acceptance Deadline: [DATE]

This Award is granted in accordance with and subject to the terms of The Procter & Gamble 2019 Stock and Incentive Compensation Plan (including
any applicable sub-plan) (the “Plan”), the Regulations of the Compensation and Leadership Development Committee of the Board of Directors
(“Committee”), this Award Agreement including Attachments and the Settlement Instructions in place as may be revised from time to time. Any
capitalized terms used in this Agreement that are not otherwise defined herein are defined in the Plan. You may access the Plan by activating this
hyperlink: The Procter & Gamble 2019 Stock and Incentive Compensation Plan and the Regulations and Sub Plans by activating this
hyperlink: Regulations of the Committee. If you have difficulty accessing the materials online, please send an email to [email address] for assistance.

Voting Rights and Dividend Equivalents
As a holder of RSUs, during the period from the Grant Date until the date the RSUs are paid, each time a cash dividend or other cash distribution is
paid with respect to Common Stock, you will receive additional RSUs (“Dividend Equivalent RSUs”). The number of Dividend Equivalent RSUs will
be determined as follows: multiply the number of RSUs and Dividend Equivalent RSUs currently held by the per share amount of the cash dividend
or other cash distribution on Common Stock, then divide the result by the price of the Common Stock on the date of the dividend or distribution.
These Dividend Equivalent RSUs will be subject to the same terms and conditions as the original RSUs that gave rise to them, including vesting and
settlement terms, except that if there is a fractional number of Dividend Equivalent RSUs on the date the RSUs are paid, the resulting fractional
share unit may be paid as cash, fractional shares, or rounded up to the nearest full share based on administrative preference of the Company. This
Award represents an unfunded, unsecured right to receive payment in the future, and does not entitle you to voting rights or dividend rights as a
shareholder.

Vesting and Payment
If you leave the Company before the Vest Date, the Award will be forfeited unless you meet one of the conditions listed below. If you
remain employed through the Vest Date, the Award will paid on the Settlement Date. For the purposes of this Award, termination of employment will
be effective as of the date that you are no longer actively employed and will not be extended by any notice period required under local law.

1. Termination on Account of Death. In the event of death, the Award will be immediately and fully vested and payment will be made by the later of
the end of the calendar year or two and a half months following the date of death.

2. Termination for a Qualified Reason Listed Below. In the event you terminate employment for one of the qualified reasons listed below, after the
Grant Date but before [date], the Award will be forfeited. In the event of termination for one of the qualified reasons listed below, on or after [date],
but prior to [date], the award will be prorated based on the number of days you remained an employee between the Grant Date and [date]. If the
termination for one of the qualified reasons listed below occurs after [date], the entire award will be retained. The portion of the award that is

ultimately retained will be delivered on the Settlement Date in this Award Agreement as long as you remain in compliance with the terms of the Plan
and the Regulations. Qualified termination reasons are as follows:

• Retirement or Disability;

• Termination pursuant to a written separation agreement from the Company or a subsidiary that provides for equity retention; or

• Termination in connection with a divestiture or separation of any of the Company’s businesses.

Notwithstanding the foregoing, in the event of a Change in Control, payment shall be made pursuant to the terms provided in the Plan.

Payment under this Award will be made in the form of Common Stock or such other form of payment as determined by the Committee pursuant to
the Plan, subject to applicable tax withholding.

This Award Agreement including Attachment A, the Plan and Regulations of the Committee together constitute an agreement between the Company
and you in accordance with the terms thereof and hereof, and no other understandings and/or agreements that have been entered by you with the
Company regarding this specific Award. Any legal action related to this Award, including Article 6 of the Plan, may be brought in any federal or state
court located in Hamilton County, Ohio, USA, and you hereby agree to accept the jurisdiction of these courts and consent to service of process from
said courts solely for legal actions related to this Award. You have the right to consult with a lawyer before accepting this Award.

THE PROCTER & GAMBLE COMPANY

Tracey Grabowski

Chief Human Resources Officer

Attachment(s):

Attachment A

To Accept Your Award
To Reject Your Award

Read and check the boxes below: Read and check the box(es) below:

I have read, understand and agree to be bound by each of:

• The Procter & Gamble 2019 Stock and Incentive Compensation Plan

• Regulations of the Committee

• This Award Agreement, including Attachment A

I have read and understand the terms noted above and do not agree
to be bound by these terms. I hereby reject the restricted stock unit
award detailed above.

I accept the restricted stock unit award detailed above (including attachments)

Attachment A

Please note that when the issue or transfer of the Common Stock covered by this Award may, in the opinion of the Company, conflict or be
inconsistent with any applicable law or regulation of any governmental agency, the Company reserves the right to refuse to issue or transfer said
Common Stock and that any outstanding Awards may be suspended or terminated and net proceeds may be recovered by the Company if you fail
to comply with the terms and conditions governing this Award.

Nature of the Award
By completing this form and accepting the Award evidenced hereby, I acknowledge that: i) the Plan is established voluntarily by The Procter &
Gamble Company (“P&G”), it is discretionary in nature and it may be amended, suspended or terminated at any time; ii) Awards under the Plan are
voluntary and occasional and this Award does not create any contractual or other right to receive future Awards, or benefits in lieu of an Award, even
if Awards have been granted repeatedly in the past; iii) all decisions with respect to future Awards, if any, will be at the sole discretion of P&G; iv) my
participation in the Plan is voluntary; v) this Award is an extraordinary item and not part of normal or expected compensation or salary for any
purposes including, but not limited to, calculating any termination, severance, resignation, redundancy, end of service payments, bonuses, long-
service awards, pension or retirement benefits or similar payments; vi) in the event that my employer is not P&G, the Award will not be interpreted to
form an employment relationship with P&G; and furthermore, the Award will not be interpreted to form an employment contract with my employer
(“Employer”); vii) the future value of the shares purchased under the Plan is unknown and cannot be predicted with certainty, may increase or
decrease in value and potentially have no value; viii) my participation in the Plan shall not create a right to further employment with my Employer and
shall not interfere with the ability of my Employer to terminate my employment relationship at any time, with or without cause; ix) and no claim or
entitlement to compensation or damages arises from the termination of the Award or the diminution in value of the Award or shares purchased and I
irrevocably release P&G and my Employer from any such claim that may arise.

Data Privacy
I hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of my personal data as described in this
document by and among, as applicable, my Employer and The Procter & Gamble Company and its subsidiaries and affiliates (“P&G”) for the
exclusive purpose of implementing, administering and managing my participation in the Plan.

I understand that P&G and my Employer hold certain personal information about me, including, but not limited to, my name, home address and
telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or
directorships held in P&G, details of all Awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or
outstanding in my favor, for the purpose of implementing, administering and managing the Plan (“Data”). I understand that Data may be transferred
to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in my country
or elsewhere (including countries outside the European Economic Area), and that the recipient’s country may have different data privacy laws and
protections than my country. I understand that I may request a list with the names and addresses of any potential recipients of the Data by
contacting my local human resources representative. I authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or
other form, for the purposes of implementing, administering and managing my participation in the Plan, including any requisite transfer of such Data
as may be required to a broker or other third party with whom I may elect to deposit any shares of stock acquired upon exercise or settlement of the
Award. I understand that Data will be held only as long as is necessary to implement, administer and manage my participation in the Plan. I
understand that I may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary
amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing my local human resources
representative. I understand, however, that refusing or withdrawing my consent may affect my ability to participate in the Plan. For more information
on the consequences of my refusal to consent or withdrawal of consent, I understand that I may contact my local human resources representative.

Responsibility for Taxes
Regardless of any action P&G or my Employer takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other
tax-related withholding (“Tax-Related Items”), I acknowledge that the ultimate

liability for all Tax-Related Items is and remains my responsibility and that P&G and/or my Employer (1) make no representations or undertakings
regarding the treatment of any Tax-Related Items in connection with any aspect of this Award, including the issuance, vesting or exercise,
settlement, the subsequent sale of shares acquired, the receipt of any dividends or dividend equivalents or the potential impact of current or future
tax legislation in any jurisdiction; and (2) do not commit to structure the terms of the Award or any aspect of the Award to reduce or eliminate my
liability for Tax-Related Items
.
Prior to exercise or settlement of an Award, I shall pay or make adequate arrangements satisfactory to P&G and/or my Employer to satisfy all
withholding and payment on account obligations of P&G and/or my Employer. In this regard, I authorize P&G and/or my Employer to withhold all
applicable Tax-Related Items from my wages or other cash compensation paid to me by P&G and/or my Employer or from proceeds of the sale of
the shares. Alternatively, or in addition, if permissible under local law, P&G may (1) sell or arrange for the sale of shares that I acquire to meet the
withholding obligation for Tax-Related Items, and/or (2) withhold in shares, provided that P&G only withholds the amount of shares necessary to
satisfy the minimum withholding amount. Finally, I shall pay to P&G or my Employer any amount of Tax-Related Items that P&G or my Employer
may be required to withhold as a result of my participation in the Plan or my purchase of shares that cannot be satisfied by the means previously
described. P&G may refuse to honor the exercise and refuse to deliver the shares if I fail to comply with my obligations in connection with the Tax-
Related Items as described in this section.

EXHIBIT (10-11)

Short Term Achievement Reward Program – Related Correspondence and Terms
and Conditions

FORM STAR-AA AWARD AGREEMENT
______________________________________________________________________________
    [GRANT DATE] [GLOBALID]

[FIRST NAME] [MIDDLE NAME] [LAST NAME]

Subject: NON-STATUTORY STOCK OPTION SERIES STAR 21-AA

In recognition of your contributions to the future success of the business, The Procter & Gamble Company (“Company”) hereby grants to you an option
to purchase shares of Procter & Gamble Common Stock as follows:

Option Price per Share: $[STOCK PRICE]
Number of Shares: [SHARES]
Grant Date: [GRANT DATE]
Expiration Date: [GRANT DATE + 10 YEARS]
Vest Date: 100% on [GRANT DATE + 3 YEARS]

This Award is granted in accordance with and subject to the terms of The Procter & Gamble 2019 Stock and Incentive Compensation Plan (including
any applicable sub-plan) (the “Plan”), the Regulations of the Compensation and Leadership Development Committee of the Board of Directors
(“Committee”), this Award Agreement including Attachments and the Exercise Instructions in place as may be revised from time to time. Any capitalized
terms used in this Agreement that are not otherwise defined herein are defined in the Plan. You may access the Plan by activating this hyperlink: The
Procter & Gamble 2019 Stock and Incentive Compensation Plan and the Regulations and Sub Plans by activating this hyperlink: Regulations of the
Committee. If you have difficulty accessing the materials online, please send an email to [EMAIL ADDRESS] for assistance.

Vesting and Exercise
As long as you remain in compliance with the terms of the Plan and the Regulations, this Award will not be forfeitable, will become exercisable on the
Vest Date, and will expire on the Expiration Date. In the event of death, the Vest Date for this Award becomes your date of death and the Award
remains exercisable until the Expiration Date.

This Award Agreement, including Attachment A, the Plan and Regulations of the Committee together constitute an agreement between the Company
and you in accordance with the terms thereof and hereof, and no other understandings and/or agreements have been entered by you with the
Company regarding this specific Award. Any legal action related to this Award, including Article 6 of the Plan, must be brought in any federal or state
court located in Hamilton County, Ohio, USA, and you hereby agree to accept the jurisdiction of these courts and consent to service of process from
said courts solely for legal actions related to this Award.

You do not need to do anything further to accept this Award under the terms of the Plan. Attachment A is a copy of the Employee Acknowledgement
and Consent Form that you completed when you elected to receive your STAR award in options.

THE PROCTER & GAMBLE COMPANY

Tracey Grabowski

Chief Human Resources Officer
Attachment A (EMPLOYEE ACKNOWLDEGEMENT & CONSENT FORM FOR STAR OPTIONS)

Please note that when the issue or transfer of the Common Stock covered by this Award may, in the opinion of the Company, conflict or be inconsistent with any
applicable law or regulation of any governmental agency, the Company reserves the right to refuse to issue or transfer said Common Stock and that any outstanding
Awards may be suspended or terminated and net proceeds may be recovered by the Company if you fail to comply with the terms and conditions governing this
Award.

Nature of the Award
By completing this form and accepting the Award evidenced hereby, I acknowledge that: i) the Plan is established voluntarily by The Procter & Gamble Company
(“P&G”), it is discretionary in nature and it may be amended, suspended or terminated at any time; ii) Awards under the Plan are voluntary and occasional and this
Award does not create any contractual or other right to receive future Awards, or benefits in lieu of an Award, even if Awards have been granted repeatedly in the
past; iii) all decisions with respect to future Awards, if any, will be at the sole discretion of P&G; iv) my participation in the Plan is voluntary; v) this Award is an
extraordinary item and not part of normal or expected compensation or salary for any purposes including, but not limited to, calculating any termination, severance,
resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; vi) in the event that my
employer is not P&G, the Award will not be interpreted to form an employment relationship with P&G; and furthermore, the Award will not be interpreted to form an
employment contract with my employer (“Employer”); vii) the future value of the shares purchased under the Plan is unknown and cannot be predicted with certainty,
may increase or decrease in value and potentially have no value; viii) my participation in the Plan shall not create a right to further employment with my employer and
shall not interfere with the ability of my employer to terminate my employment relationship at any time, with or without cause; ix) and no claim or entitlement to
compensation or damages arises from the termination of the Award or the diminution in value of the Award or shares purchased and I irrevocably release P&G and
my employer from any such claim that may arise.

Data Privacy
I hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of my personal data as described in this document by
and among, as applicable, my Employer and The Procter & Gamble Company and its subsidiaries and affiliates (“P&G”) for the exclusive purpose of implementing,
administering and managing my participation in the Plan.

I understand that P&G and my Employer hold certain personal information about me, including, but not limited to, my name, home address and telephone number,
date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in P&G, details of all
Awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in my favor, for the purpose of implementing,
administering and managing the Plan (“Data”). I understand that Data may be transferred to any third parties assisting in the implementation, administration and
management of the Plan, that these recipients may be located in my country or elsewhere (including countries outside the European Economic Area), and that the
recipient’s country may have different data privacy laws and protections than my country. I understand that I may request a list with the names and addresses of any
potential recipients of the Data by contacting my local human resources representative. I authorize the recipients to receive, possess, use, retain and transfer the
Data, in electronic or other form, for the purposes of implementing, administering and managing my participation in the Plan, including any requisite transfer of such
Data as may be required to a broker or other third party with whom I may elect to deposit any shares of stock acquired upon exercise or settlement of the Award. I
understand that Data will be held only as long as is necessary to implement, administer and manage my participation in the Plan. I understand that I may, at any time,
view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents
herein, in any case without cost, by contacting in writing my local human resources representative. I understand, however, that refusing or withdrawing my consent
may affect my ability to participate in the Plan. For more information on the consequences of my refusal to consent or withdrawal of consent, I understand that I may
contact my local human resources representative.

Responsibility for Taxes
Regardless of any action P&G or my Employer takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related
withholding (“Tax-Related Items”), I acknowledge that the ultimate liability for all Tax-Related Items is and remains my responsibility and that P&G and/or my
Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Award, including the
issuance, vesting or exercise, settlement, the subsequent sale of shares acquired, the receipt of any dividends or dividend equivalents or the potential impact of
current or future tax legislation in any jurisdiction; and (2) do not commit to structure the terms of the Award or any aspect of the Award to reduce or eliminate my
liability for Tax-Related Items.

Prior to exercise or settlement of an Award, I shall pay or make adequate arrangements satisfactory to P&G and/or my Employer to satisfy all withholding and
payment on account obligations of P&G and/or my employer. In this regard, I authorize P&G and/or my Employer to withhold all applicable Tax-Related Items from
my wages or other cash

compensation paid to me by P&G and/or my Employer or from proceeds of the sale of the shares. Alternatively, or in addition, if permissible under local law, P&G
may (1) sell or arrange for the sale of shares that I acquire to meet the withholding obligation for Tax-Related Items, and/or (2) withhold in shares, provided that P&G
only withholds the amount of shares necessary to satisfy the minimum withholding amount. Finally, I shall pay to P&G or my Employer any amount of Tax-Related
Items that P&G or my Employer may be required to withhold as a result of my participation in the Plan or my purchase of shares that cannot be satisfied by the
means previously described. P&G may refuse to honor the exercise and refuse to deliver the shares if I fail to comply with my obligations in connection with the Tax-
Related Items as described in this section.

Exhibit (10-22)

The Procter & Gamble Performance Stock Program – Related Correspondence and
Terms and Conditions

Subject: PERFORMANCE STOCK UNIT SERIES XX-XX-PSP

In recognition of your contributions to the future success of the business, The Procter & Gamble Company (“Company”) hereby
grants to you Performance Stock Units (“PSUs”) of Procter & Gamble Common Stock as follows:

Target Number of Units:

Maximum Number of Units:

Conversion Ratio: 1 PSU = 1 Common Share

Grant Date: [GRANT DATE]
Vest Date: 30 June 20XX

Performance Period: 1 July 20XX – 30 June 20XX

Original Settlement Date (Shares Delivered on): [SETTLEMENT DATE]

Acceptance Deadline: [ACCEPTANCE DATE]

This Award is granted in accordance with and subject to the terms of The Procter & Gamble 2019 Stock and Incentive
Compensation Plan (including any applicable sub-plan) (the “Plan”), the Regulations of the Compensation and Leadership
Development Committee of the Board of Directors (“Committee”), and this Award Agreement, including Attachments A and B.
Any capitalized terms used in this Agreement that are not otherwise defined herein are defined in the Plan. You may access the
Plan by activating this hyperlink: The Procter & Gamble 2019 Stock and Incentive Compensation Plan and the Regulations and
Sub Plans by activating this hyperlink: Regulations of the Committee.If you have difficulty accessing the materials online, please
send an email to [ ] for assistance.

Voting Rights and Dividend Equivalents
As a holder of PSUs, during the period from the Grant Date until the date the PSUs are paid, each time a cash dividend or other
cash distribution is paid with respect to Common Stock, you will receive additional PSUs (“Dividend Equivalent PSUs”). The
number of Dividend Equivalent PSUs will be determined as follows: multiply the number of PSUs and Dividend Equivalent PSUs
currently held by the per share amount of the cash dividend or other cash distribution on Common Stock, then divide the result
by the price of the Common Stock on the date of the dividend or distribution. These Dividend Equivalent PSUs will be subject to
the same terms and conditions as the original PSUs that gave rise to them, including performance vesting and settlement terms,
except that if there is a fractional number of Dividend Equivalent PSUs on the date the PSUs are paid, the resulting fractional
share units may be paid as cash, fractional shares, or rounded up to the nearest full share based on administrative preference of
the Company. This Award represents an unfunded, unsecured right to receive payment in the future, and does not entitle you to
voting rights or dividend rights as a shareholder.

Performance Vesting
1. Your Target Number of Units indicated in this Award Agreement (the “Target Units”) will vest depending upon performance
during the Performance Period, as specified below. This Award Agreement also sets forth the Maximum Number of Units (the
“Maximum Units”) that you may receive pursuant to this Award. Your right to receive all, any portion of, or more than the Target
Units (but in no event more than the Maximum Units) will be contingent upon the achievement of specified levels of certain
performance goals measured over the Performance Period. The applicable performance goals and the payout factors for each
performance goal applicable to your Award for the Performance Period are set forth in Attachment B.

2. Within 60 days following the end of the Performance Period, the Committee will determine (i) whether and to what extent the
performance goals have been satisfied for the Performance Period, (ii) the number of PSUs that shall become deliverable under
this Award, and (iii) whether the other applicable conditions for receipt of shares of Common Stock in respect of the PSUs have
been met. Any PSUs not approved by the Committee in accordance with this paragraph will be forfeited and cancelled.

Vesting and Payment
If you leave the Company before the Vest Date, the Award will be forfeited unless you meet one of the conditions listed below. If you
remain employed through the Vest Date, the Award will paid on the Original Settlement Date or Agreed Settlement Date (as defined below). For the
purposes of this Award, termination of employment will be effective as of the date that you are no longer actively employed and will not be extended
by any notice period required under local law.

1. Termination on Account of Death. In the event of death, the Award is not forfeited and will become deliverable on the Settlement Date or Agreed
Settlement Date, whichever is applicable.

2. Termination for a Qualified Reason Listed Below. In the event you terminate employment for one of the qualified reasons listed below, after the
Grant Date but before October 28, 20XX, the Award will be forfeited. In the event of termination for one of the qualified reasons listed below, on or
after October 28, 20XX, but prior to September 30, 20XX, the award will be prorated based on the number of days you remained an employee
between the Grant Date and September 30, 20XX. If the termination for one of the qualified reasons listed below occurs after September 30, 20XX,
the entire award will be retained. The portion of the award that is ultimately retained will be delivered on the Original Settlement Date or Agreed
Settlement Date, whichever is applicable, as long as you remain in compliance with the terms of the Plan and the Regulations. Qualified termination
reasons are as follows:

• Retirement or Disability;

• Termination pursuant to a written separation agreement from the Company or a subsidiary that provides for equity retention; or

• Termination in connection with a divestiture or separation of any of the Company’s businesses.

Notwithstanding the foregoing, in the event of a Change in Control, the Target Number of Units shall be paid pursuant to the
terms provided in the Plan.

Payment under this Award will be made in the form of Common Stock or such other form of payment as determined by the
Committee pursuant to the Plan, subject to applicable tax withholding.

Deferral Election (Applicable to participants Band 7 and above as of the Award Date)
At any time at least six months prior of the end of the Performance Period and so long as the achievement of the applicable
performance goals are not yet readily ascertainable (but in no event later than your Termination of Employment from the
Company), you and the Company may agree to postpone the Original Settlement Date to such later date (“Agreed Settlement
Date”) as may be elected by you, which date shall be at least five years later than the Original Settlement Date and in
accordance with Internal Revenue Code Section 409A.

This Award Agreement including Attachments A and B, the Plan and Regulations of the Committee together constitute an
agreement between the Company and you in accordance with the terms thereof and hereof, and no other understandings and/or
agreements that have been entered by you with the Company regarding this specific Award. Any legal action related to this
Award, including Article 6 of the Plan, may be brought in any federal or state court located in Hamilton County, Ohio, USA, and
you hereby agree to accept the jurisdiction of these courts and consent to service of process from said courts solely for legal
actions related to this Award. You have the right to consult with a lawyer before accepting this Award.

THE PROCTER & GAMBLE COMPANY

Tracey Grabowski

Chief Human Resources Officer

_____________________________________________________________________________________
Attachment(s):

Attachment A

To Accept Your Award To Reject Your Award

Read and check the boxes below: Read and check the box(es) below:

□ I have read, understand and agree to be bound by each of:

• The Procter & Gamble 2019 Stock and Incentive Compensation Plan

• Regulations of the Committee

• This Award Agreement, including Attachments A and B

□ I have read and understand the terms noted above and do not agree
to be bound by these terms. I hereby reject the stock option award
detailed above.

□ I have read and understand the terms noted above and do not
agree to be bound by these terms. I hereby reject the restricted stock
unit award detailed above.

□ I have read and understand the terms noted above and do not
agree to be bound by these terms. I hereby reject the performance
share award detailed above.

□ I accept the stock option award detailed above (including attachments)

□ I accept the restricted stock unit award detailed above (includingattachments)

□ I accept the performance share award detailed above (including attachments)

Attachment A

Please note that when the issue or transfer of the Common Stock covered by this Award may, in the opinion of the Company, conflict or be inconsistent with any applicable
law or regulation of any governmental agency, the Company reserves the right to refuse to issue or transfer said Common Stock and that any outstanding Awards may be
suspended or terminated and net proceeds may be recovered by the Company if you fail to comply with the terms and conditions governing this Award.

Nature of the Award
By completing this form and accepting the Award evidenced hereby, I acknowledge that: i) the Plan is established voluntarily by The Procter & Gamble Company (“P&G”), it
is discretionary in nature and it may be amended, suspended or terminated at any time; ii) Awards under the Plan are voluntary and occasional and this Award does not
create any contractual or other right to receive future Awards, or benefits in lieu of an Award, even if Awards have been granted repeatedly in the past; iii) all decisions with
respect to future Awards, if any, will be at the sole discretion of P&G; iv) my participation in the Plan is voluntary; v) this Award is an extraordinary item and not part of
normal or expected compensation or salary for any purposes including, but not limited to, calculating any termination, severance, resignation, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or similar payments; vi) in the event that my employer is not P&G, the Award will not be interpreted
to form an employment relationship with P&G; and furthermore, the Award will not be interpreted to form an employment contract with my employer (“Employer”); vii) the
future value of the shares purchased under the Plan is unknown and cannot be predicted with certainty, may increase or decrease in value and potentially have no value;
viii) my participation in the Plan shall not create a right to further employment with my Employer and shall not interfere with the ability of my Employer to terminate my
employment relationship at any time, with or without cause; ix) and no claim or entitlement to compensation or damages arises from the termination of the Award or the
diminution in value of the Award or shares purchased and I irrevocably release P&G and my Employer from any such claim that may arise.

Data Privacy
I hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of my personal data as described in this document by and
among, as applicable, my Employer and The Procter & Gamble Company and its subsidiaries and affiliates (“P&G”) for the exclusive purpose of implementing,
administering and managing my participation in the Plan.

I understand that P&G and my Employer hold certain personal information about me, including, but not limited to, my name, home address and telephone number, date of
birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in P&G, details of all Awards or any other
entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in my favor, for the purpose of implementing, administering and managing the
Plan (“Data”). I understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these
recipients may be located in my country or elsewhere (including countries outside the European Economic Area), and that the recipient’s country may have different data
privacy laws and protections than my country. I understand that I may request a list with the names and addresses of any potential recipients of the Data by contacting my
local human resources representative. I authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing my participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with
whom I may elect to deposit any shares of stock acquired upon exercise or settlement of the Award. I understand that Data will be held only as long as is necessary to
implement, administer and manage my participation in the Plan. I understand that I may, at any time, view Data, request additional information about the storage and
processing of Data, require any necessary amendments to Data or

refuse or withdraw the consents herein, in any case without cost, by contacting in writing my local human resources representative. I understand, however, that refusing or
withdrawing my consent may affect my ability to participate in the Plan. For more information on the consequences of my refusal to consent or withdrawal of consent, I
understand that I may contact my local human resources representative.

Responsibility for Taxes
Regardless of any action P&G or my Employer takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding
(“Tax-Related Items”), I acknowledge that the ultimate liability for all Tax-Related Items is and remains my responsibility and that P&G and/or my Employer (1) make no
representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Award, including the issuance, vesting or exercise,
settlement, the subsequent sale of shares acquired, the receipt of any dividends or dividend equivalents or the potential impact of current or future tax legislation in any
jurisdiction; and (2) do not commit to structure the terms of the Award or any aspect of the Award to reduce or eliminate my liability for Tax-Related Items.

Prior to exercise or settlement of an Award, I shall pay or make adequate arrangements satisfactory to P&G and/or my Employer to satisfy all withholding and payment on
account obligations of P&G and/or my Employer. In this regard, I authorize P&G and/or my Employer to withhold all applicable Tax-Related Items from my wages or other
cash compensation paid to me by P&G and/or my Employer or from proceeds of the sale of the shares. Alternatively, or in addition, if permissible under local law, P&G may
(1) sell or arrange for the sale of shares that I acquire to meet the withholding obligation for Tax-Related Items, and/or (2) withhold in shares, provided that P&G only
withholds the amount of shares necessary to satisfy the minimum withholding amount. Finally, I shall pay to P&G or my Employer any amount of Tax-Related Items that
P&G or my Employer may be required to withhold as a result of my participation in the Plan or my purchase of shares that cannot be satisfied by the means previously
described. P&G may refuse to honor the exercise and refuse to deliver the shares if I fail to comply with my obligations in connection with the Tax-Related Items as
described in this section.

EXHIBIT (10-28)

The Procter & Gamble 2019 Stock and Incentive
Compensation Plan – Additional Terms and Conditions

RSU Form BOD

FORM BOD AWARD AGREEMENT

<NAME> <DATE>

Number of Restricted Stock Units: [# SHARES]
Grant Date: [GRANT_DATE]
Vest Date: [DATE (Day Before Next Annual Meeting Following Grant)]

Original Settlement Date: One Year Following Termination of Directorship

Subject: Award of Restricted Stock Units

This is to advise you that The Procter & Gamble Company (“Company”) hereby grants to you Restricted Stock Units (“RSUs”) of Procter & Gamble Common Stock as
follows:
This Award is granted in accordance with and subject to the terms of The Procter & Gamble 2019 Stock and Incentive Compensation Plan (including any applicable
sub-plan) (the “Plan”), the Regulations of the Compensation and Leadership Development Committee of the Board of Directors (“Committee”), and this Award
Agreement, including Attachment A-BOD. Any capitalized terms used in this Agreement that are not otherwise defined herein are defined in the Plan.

Voting Rights and Dividend Equivalents
As a holder of RSUs, during the period from the Grant Date until the date the RSUs are paid, each time a cash dividend or other cash distribution is paid with respect to
Common Stock, you will receive additional RSUs (“Dividend Equivalent RSUs”). The number of Dividend Equivalent RSUs will be determined as follows: multiply the
number of RSUs and Dividend Equivalent RSUs currently held by the per share amount of the cash dividend or other cash distribution on Common Stock, then divide
the result by the price of the Common Stock on the date of the dividend or distribution. These Dividend Equivalent RSUs will be subject to the same terms and
conditions as the original RSUs that gave rise to them, including vesting and settlement terms, except that if there is a fractional number of Dividend Equivalent RSUs
on the date the RSUs are paid, the resulting fractional share unit may be paid as cash, fractional shares, or rounded up to the nearest full share based on administrative
preference of the Company. This Award represents an unfunded, unsecured right to receive payment in the future, and does not entitle you to voting rights or dividend
rights as a shareholder.

Vesting and Payment
If you remain a Non-Employee Director through the Vest Date, the Award will be paid on the Original Settlement Date or Agreed Settlement Date, whichever is
applicable, except in the case of death or Disability. In the case of death or Disability, the Award will be fully vested and payment will be made by the later of the end of
the calendar year or two and a half months following the date of death or Disability, as applicable.

Notwithstanding the foregoing, in the event of a Change in Control, payment shall be made pursuant to the terms provided in the Plan.

Payment under this Award will be made in the form of Common Stock or such other form of payment as determined by the Committee pursuant to the Plan, subject to
applicable tax withholding.

Deferral Election
At any time prior to Termination of Directorship, you and the Company may agree to postpone the Original Settlement Date to such later date (“Agreed Settlement
Date”) as may be elected by you, which date shall be at least five years later than the Original Settlement Date and in accordance with Internal Revenue Code Section
409A.

THE PROCTER & GAMBLE COMPANY

Tracey Grabowski
Chief Human Resources Officer

This Award Agreement including Attachment A-BOD, the Plan and Regulations of the Committee together constitute an agreement between the Company and you in
accordance with the terms thereof and hereof, and no other understanding and/or agreements that have been entered by you with the Company regarding this specific
Award. Any legal action related to this Award may be brought in any federal or state court located in Hamilton County, Ohio, USA, and you hereby agree to accept the
jurisdiction of these courts and consent to service of process from said courts solely for legal actions related to this Award.

RSU Form BOD

Attachment A-BOD

Please note that when the issue or transfer of the Common Stock covered by this Award may, in the opinion of the Company, conflict or be inconsistent with any
applicable law or regulation of any governmental agency, the Company reserves the right to refuse to issue or transfer said Common Stock and that any outstanding
Awards may be suspended or terminated and net proceeds may be recovered by the Company if you fail to comply with the terms and conditions governing this
Award.

Nature of the Award
By completing this form and accepting the Award evidenced hereby, I acknowledge that: i) the Plan is established voluntarily by The Procter & Gamble Company
(“P&G”), it is discretionary in nature and it may be amended, suspended or terminated at any time; ii) Awards under the Plan are voluntary and occasional and this
Award does not create any contractual or other right to receive future Awards, or benefits in lieu of an Award, even if Awards have been granted repeatedly in the
past; iii) all decisions with respect to future Awards, if any, will be at the sole discretion of P&G; iv) my participation in the Plan is voluntary; v) this Award is an
extraordinary item and not part of normal or expected compensation for any purposes including, but not limited to, calculating any termination, severance,
resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; vi) the Award will not be
interpreted to form an employment relationship with P&G; and furthermore, the Award will not be interpreted to form an employment contract with P&G; vii) the
future value of the shares purchased under the Plan is unknown and cannot be predicted with certainty, may increase or decrease in value and potentially have no
value; viii) my participation in the Plan shall not interfere with the ability of P&G to terminate my directorship at any time, with or without cause; ix) and no claim or
entitlement to compensation or damages arises from the termination of the Award or the diminution in value of the Award or shares purchased and I irrevocably
release P&G from any such claim that may arise.

Data Privacy
I hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of my personal data as described in this document by and
among, as applicable, The Procter & Gamble Company and its subsidiaries and affiliates (“P&G”) for the exclusive purpose of implementing, administering and
managing my participation in the Plan.

I understand that P&G holds certain personal information about me, including, but not limited to, my name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, , any shares of stock or directorships held in P&G, details of all Awards or any other entitlement
to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in my favor, for the purpose of implementing, administering and managing the Plan
(“Data”). I understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these
recipients may be located in my country or elsewhere (including countries outside the European Economic Area), and that the recipient’s country may have different
data privacy laws and protections than my country. I understand that I may request a list with the names and addresses of any potential recipients of the Data by
contacting my local human resources representative. I authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the
purposes of implementing, administering and managing my participation in the Plan, including any requisite transfer of such Data as may be required to a broker or
other third party with whom I may elect to deposit any shares of stock acquired upon exercise or settlement of the Award. I understand that Data will be held only as
long as is necessary to implement, administer and manage my participation in the Plan. I understand that I may, at any time, view Data, request additional information
about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by
contacting in writing my local human resources representative. I understand, however, that refusing or withdrawing my consent may affect my ability to participate in
the Plan. For more information on the consequences of my refusal to consent or withdrawal of consent, I understand that I may contact my local human resources
representative.

Responsibility for Taxes
Regardless of any action P&G takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-
Related Items”), I acknowledge that the ultimate liability for all Tax-Related Items is and remains my responsibility and that P&G (1) makes no representations or
undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Award, including the issuance, vesting or exercise, settlement, the
subsequent sale of shares acquired, the receipt of any dividends or dividend equivalents or the potential impact of current or future tax legislation in any jurisdiction;
and (2) does not commit to structure the terms of the Award or any aspect of the Award to reduce or eliminate my liability for Tax-Related Items.

Prior to exercise or settlement of an Award, I shall pay or make adequate arrangements satisfactory to P&G to satisfy all withholding and payment on account
obligations of P&G. In this regard, I authorize P&G to withhold all applicable Tax-Related Items from my wages or other cash compensation paid to me by P&G or from
proceeds of the sale of the shares. Alternatively, or in addition, if permissible under local law, P&G may (1) sell or arrange for the sale of shares that I acquire to meet
the withholding obligation for Tax-Related Items, and/or (2) withhold in shares, provided that P&G only withholds the amount of shares necessary to satisfy the
minimum withholding amount. Finally, I shall pay to P&G any amount of Tax-Related Items that P&G may be required to withhold as a result of my participation in the
Plan or my purchase of shares that cannot be satisfied by the means previously described. P&G may refuse to honor the exercise and refuse to deliver the shares if I fail
to comply with my obligations in connection with the Tax-Related Items as described in this section.

RSU Form RTN2

FORM RTN2 AWARD AGREEMENT

<NAME>

Subject: RESTRICTED STOCK UNIT SERIES RTN2

In recognition of your contributions to the future success of the business, The Procter & Gamble Company (“Company”) hereby grants to you Restricted Stock Units
(“RSUs”) of Procter & Gamble Common Stock as follows:

Grant Date: <GRANT DATE>
Stock Price on Grant Date: <GRANT PRICE>

Number of Restricted Stock Units: <SHARES1>
Vest Date: <VEST DATE 1>
Settlement Date: See Payment and Vesting Details Below

Number of Restricted Stock Units: <SHARES2>
Vest Date: <VEST DATE 2>
Settlement Date: See Payment and Vesting Details Below

Total Number of Restricted Stock Units: <TOTAL SHARES>

This Award is granted in accordance with and subject to the terms of The Procter & Gamble 2019 Stock and Incentive Compensation Plan (including any applicable
sub-plan) (the “Plan”), the Regulations of the Compensation and Leadership Development Committee of the Board of Directors (“Committee”), this Award Agreement
including Attachments, and the Settlement Instructions in place as may be revised from time to time. Any capitalized terms used in this Agreement that are not
otherwise defined herein are defined in the Plan. You may access the Plan by activating this hyperlink: The Procter & Gamble 2019 Stock and Incentive Compensation
Plan and the Regulations and Sub Plans by activating this hyperlink: Regulations of the Committee. If you have difficulty accessing the materials online, please send an
email to [_______] for assistance.

Voting Rights and Dividend Equivalents
As a holder of RSUs, during the period from the Grant Date until the date the RSUs are paid, each time a cash dividend or other cash distribution is paid with respect to
Common Stock, you will receive additional RSUs (“Dividend Equivalent RSUs”). The number of Dividend Equivalent RSUs will be determined as follows: multiply the
number of RSUs and Dividend Equivalent RSUs currently held by the per share amount of the cash dividend or other cash distribution on Common Stock, then divide
the result by the price of the Common Stock on the date of the dividend or distribution. These

Dividend Equivalent RSUs will be subject to the same terms and conditions as the original RSUs that gave rise to them, including vesting and settlement terms, except
that if there is a fractional number of Dividend Equivalent RSUs on the date the RSUs are paid, the resulting fractional share unit may be paid as cash, fractional shares,
or rounded up to the nearest full share based on administrative preference of the Company. This Award represents an unfunded, unsecured right to receive payment
in the future, and does not entitle you to voting rights or dividend rights as a shareholder.

Payment and Vesting
If you remain employed through the Vest Dates, the Award will be paid on the Vest Date(s) according to the vesting schedule except if you are a Board-Designated
Section 16 Officer of the Company on the Vest Date(s) and in the case of death, as described below. If your Termination of Employment occurs for any reason before a
Vest Date except for the reasons listed below, the Award will be forfeited. For the purposes of this Award, Termination of Employment will be effective as of the date
that you are no longer actively employed and will not be extended by any notice period required under local law.

RSU Form RTN2

1. Termination on Account of Death or Disability. In the case of death or disability, the Award will be fully vested and payment will be made by the later of the end
of the calendar year or two and a half months following the date of death or disability.

2. Termination without Cause Pursuant to a Written Separation Agreement. In the event of your Termination of Employment from the Company or a Subsidiary
without Cause, your Award is forfeited unless the Chief Human Resources Officer authorizes the retention of the Award and you have executed a written
separation agreement with the Company that provides for retention of the Award. If the Award is retained pursuant to CHRO authorization, the Award will be
delivered on the Vest Date(s) as long as you remain in compliance with the terms of the Plan, the Regulations, and your separation agreement.

3. Vesting for Board-Designated Section 16 Officers. Payment will be on the Vest Date(s) except when the Vest Date(s) is outside of an open trading window as
designated by the Company in accordance with the Company’s Insider Trading Policy and the Section 16 Officer does not have a valid 10b5-1 plan in place
instructing the sale of Common Stock to cover taxes and administrative costs, in which case payment will be made on the first day of the first such open trading
window following the Vest Date(s).

Notwithstanding the foregoing, in the event of a Change in Control, payment shall be made pursuant to the terms provided in the Plan.

Payment under this Award will be made in the form of Common Stock or such other form of payment as determined by the Committee pursuant to the Plan, subject to
applicable tax withholding.

This Award Agreement including Attachment A, the Plan and Regulations of the Committee together constitute an agreement between the Company and you in

accordance with the terms thereof and hereof, and no other understandings and/or agreements that have been entered by you with the Company regarding this

specific Award. Any legal action related to this Award, including Article 6 of the Plan, may be brought in any federal or state court located in Hamilton County, Ohio,

USA, and you hereby agree to accept the jurisdiction of these courts and consent to service of process from said courts solely for legal actions related to this Award.

THE PROCTER & GAMBLE COMPANY

Tracey Grabowski
Chief Human Resources Officer

RSU Form RTN2

Attachment A

Please note that when the issue or transfer of the Common Stock covered by this Award may, in the opinion of the Company, conflict or be inconsistent with any
applicable law or regulation of any governmental agency, the Company reserves the right to refuse to issue or transfer said Common Stock and that any outstanding
Awards may be suspended or terminated and net proceeds may be recovered by the Company if you fail to comply with the terms and conditions governing this
Award.

Nature of the Award
By completing this form and accepting the Award evidenced hereby, I acknowledge that: i) the Plan is established voluntarily by The Procter & Gamble Company
(“P&G”), it is discretionary in nature and it may be amended, suspended or terminated at any time; ii) Awards under the Plan are voluntary and occasional and this
Award does not create any contractual or other right to receive future Awards, or benefits in lieu of an Award, even if Awards have been granted repeatedly in the
past; iii) all decisions with respect to future Awards, if any, will be at the sole discretion of P&G; iv) my participation in the Plan is voluntary; v) this Award is an
extraordinary item and not part of normal or expected compensation or salary for any purposes including, but not limited to, calculating any termination, severance,
resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; vi) in the event that my emplo yer
is not P&G, the Award will not be interpreted to form an employment relationship with P&G; and furthermore, the Award will not be interpreted to form an
employment contract with my employer (“Employer”); vii) the future value of the shares purchased under the Plan is unknown and cannot be predicted with certainty,
may increase or decrease in value and potentially have no value; viii) my participation in the Plan shall not create a right to further employment with my employer and
shall not interfere with the ability of my employer to terminate my employment relationship at any time, with or without cause; ix) and no claim or entitlement to
compensation or damages arises from the termination of the Award or the diminution in value of the Award or shares purchased and I irrevocably release P&G and my
employer from any such claim that may arise.

Data Privacy
I hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of my personal data as described in this document by and
among, as applicable, my Employer and The Procter & Gamble Company and its subsidiaries and affiliates (“P&G”) for the exclusive purpose of implementing,
administering and managing my participation in the Plan.

I understand that P&G and my Employer hold certain personal information about me, including, but not limited to, my name, home address and telephone number,
date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in P&G, details of all
Awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in my favor, for the purpose of implementing,
administering and managing the Plan (“Data”). I understand that Data may be transferred to any third parties assisting in the implementation, administration and
management of the Plan, that these recipients may be located in my country or elsewhere (including countries outside the European Economic Area), and that the
recipient’s country may have different data privacy laws and protections than my country. I understand that I may request a list with the names and addresses of any
potential recipients of the Data by contacting my local human resources representative. I authorize the recipients to receive, possess, use, retain and transfer the Data,
in electronic or other form, for the purposes of implementing, administering and managing my participation in the Plan, including any requisite transfer of such Data
as may be required to a broker or other third party with whom I may elect to deposit any shares of stock acquired upon exercise or settlement of the Award. I
understand that Data will be held only as long as is necessary to implement, administer and manage my participation in the Plan. I understand that I may, at any time,
view Data, request additional

information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost,
by contacting in writing my local human resources representative. I understand, however, that refusing or withdrawing my consent may affect my ability to participate
in the Plan. For more information on the consequences of my refusal to consent or withdrawal of consent, I understand that I may contact my local human resources
representative.

Responsibility for Taxes
Regardless of any action P&G or my Employer takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related
withholding (“Tax-Related Items”), I acknowledge that the ultimate liability for all Tax-Related Items is and remains my responsibility and that P&G and/or my
Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Award, including the
issuance, vesting or exercise, settlement, the subsequent sale of shares acquired, the receipt of any dividends or dividend equivalents or the potential impact of current
or future tax legislation in any jurisdiction; and (2) do not commit to structure the terms of the Award or any aspect of the Award to reduce or eliminate m y liability for
Tax-Related Items.

Prior to exercise or settlement of an Award, I shall pay or make adequate arrangements satisfactory to P&G and/or my Employer to satisfy all withholding and
payment on account obligations of P&G and/or my employer. In this regard, I authorize P&G and/or my Employer to withhold all applicable Tax-Related Items from
my wages or other cash compensation paid to me by P&G and/or my Employer or from proceeds of the sale of the shares. Alternatively, or in addition, if permissible
under local law, P&G may (1) sell or arrange for the sale of shares that I acquire to meet the withholding obligation for Tax-Related Items, and/or (2) withhold in
shares, provided that P&G only withholds the amount of shares necessary to satisfy the minimum withholding amount. Finally, I shall pay to P&G or my Employer any
amount of Tax-Related Items that P&G or my Employer may be required to withhold as a result of my participation in the Plan or my purchase of shares that cannot be
satisfied by the means previously described. P&G may refuse to honor the exercise and refuse to deliver the shares if I fail to comply with my obligations in connection
with the Tax-Related Items as described in this section.

EXHIBIT (21)

The Procter & Gamble Company and Subsidiaries

Subsidiaries of the Registrant

The Procter & Gamble Company and Subsidiaries

The registrant’s subsidiaries are listed below, omitting certain entities that have de minimis activity that, if considered in the aggregate as a single subsidiary, would
not constitute a significant subsidiary as of June 30, 2021.

SUBSIDIARIES OF THE PROCTER & GAMBLE COMPANY Jurisdiction
1837, LLC Ohio
Agile Pursuits Franchising, Inc. Ohio
Agile Pursuits, Inc. Ohio
Arbora & Ausonia, S.L.U. Spain
Braun (Shanghai) Co., Ltd. China
Braun GmbH Germany
Celtic Insurance Company, Inc. Vermont
Charlie Banana (USA), LLC Delaware
Corporativo Procter & Gamble, S. de R.L. de C.V. Mexico
Detergent Products B.V. Netherlands
Detergent Products Sarl Switzerland
Detergenti S.A. Romania
Fameccanica Data S.p.A. Italy
Fameccanica Indùstria e Comèrcio Do Brasil LTDA. Brazil
Fameccanica Machinery (Shanghai) Co., Ltd. China
Fameccanica North America, Inc. Delaware
Fater Central Europe SRL Romania
Fater Eastern Europe LLC Russia
Fater Portugal Unipessoal Lda Portugal
Fater S.p.A. Italy
Fater Temizlik Urunleri Ltd STI Turkey
First Aid Beauty Limited Delaware
Fountain Square Music Publishing Co., Inc. Ohio
FPG Oleochemicals Sdn. Bhd. Malaysia
Gillette (China) Limited China
Gillette (Shanghai) Ltd. China
Gillette Australia Pty. Ltd. Australia
Gillette Commercial Operations North America Massachusetts
Gillette del Uruguay, S.A. Uruguay
Gillette Diversified Operations Pvt. Ltd. India
Gillette Egypt S.A.E. Egypt
Gillette Group UK Ltd U.K.
Gillette Holding Company LLC Delaware
Gillette Holding GmbH Germany
Gillette India Limited India
Gillette Industries Ltd. U.K.
Gillette International B.V. Netherlands
Gillette Latin America Holding B.V. Netherlands
Gillette Management, LLC Delaware
Gillette Pakistan Limited Pakistan
Gillette Poland International Sp. z.o.o. Poland
Gillette U.K. Limited U.K.
Hyginett KFT Hungary
iMFLUX Inc. Delaware
Industries Marocaines Modernes SA Morocco
Inversiones Plaza LLC Delaware
Laboratoire Mediflor S.A.S. France
Laboratorios Vicks, S.L.U. Spain
Lamberts Healthcare Ltd. U.K.

Liberty Street Music Publishing Company, Inc. Ohio
Limited Liability Company ‘Procter & Gamble Trading Ukraine’ Ukraine
LLC “Procter & Gamble – Novomoskovsk” Russia
LLC “Procter & Gamble Distributorskaya Compania” Russia
LLC “Procter & and Gamble Ukraine” Ukraine
Marcvenca Inversiones, C.A. Venezuela
Modern Industries Company – Dammam Saudi Arabia
Modern Products Company – Jeddah Saudi Arabia
Nature’s Best Health Products Ltd. U.K.
New Chapter Canada Inc. Canada
New Chapter, Inc. Delaware
Olay LLC Puerto Rico
Oral-B Laboratories Delaware
P&G Consumer Health Germany GmbH Germany
P&G Distribution East Africa Limited Kenya
P&G Distribution Morocco SAS Morocco
P&G Hair Care Holding, Inc. Delaware
P&G Health Austria GmbH & Co. OG Austria
P&G Health France S.A.S. France
P&G Health Germany GmbH Germany
P&G Healthcare (Zhejiang) Limited China
P&G Industrial Peru S.R.L. Peru
P&G Innovation Godo Kaisha Japan
P&G Investment Management Ltd. United Arab Emirates
P&G Israel M.D.O. Ltd. Israel
P&G Japan G.K. Japan
P&G K.K. Japan
P&G Northeast Asia Pte. Ltd. Singapore
P&G Prestige Godo Kaisha Japan
P&G South African Trading (Pty.) Ltd. South Africa
“Petersburg Products International” LLC Russia
PG13 Launchpad Alpha, Inc. Delaware
PG13 Launchpad Beta, Inc. Delaware
PG13 Launchpad Gamma, Inc. Delaware
PGT Healthcare LLP Delaware
Phase II Holdings Corporation Philippines
Procter & Gamble (Chengdu) Ltd. China
Procter & Gamble (China) Ltd. China
Procter & Gamble (China) Sales Co., Ltd. China
Procter & Gamble (Egypt) Manufacturing Company Egypt
Procter & Gamble (Guangzhou) Consumer Products Co., Ltd. China
Procter & Gamble (Guangzhou) Enterprise Management Service Company Limited China
Procter & Gamble (Guangzhou) Ltd. China
Procter & Gamble (Guangzhou) Technology Innovation Co., LTD. China
Procter & Gamble (Health & Beauty Care) Limited U.K.
Procter & Gamble (Jiangsu) Ltd. China
Procter & Gamble (L&CP) Limited U.K.
Procter & Gamble (Malaysia) Sdn Bhd Malaysia
Procter & Gamble (Manufacturing) Ireland Limited Ireland
Procter & Gamble (Singapore) Pte. Ltd. Singapore
Procter & Gamble Algeria EURL Algeria
Procter & Gamble Amazon Holding B.V. Netherlands
Procter & Gamble Amiens S.A.S. France
Procter & Gamble Argentina SRL Argentina
Procter & Gamble Asia Pte. Ltd. Philippines

Procter & Gamble Australia Proprietary Limited Australia
Procter & Gamble Azerbaijan Services LLC Azerbaijan
Procter & Gamble Bangladesh Private Ltd. Bangladesh
Procter & Gamble Blois S.A.S. France
Procter & Gamble Brazil Holdings B.V. Netherlands
Procter & Gamble Bulgaria EOOD Bulgaria
Procter & Gamble Business Services Canada Company Canada
Procter & Gamble Canada Holding B.V. Netherlands
Procter & Gamble Chile Limitada Chile
Procter & Gamble Colombia Ltda. Colombia
Procter & Gamble Commercial LLC Puerto Rico
Procter & Gamble Czech Republic s.r.o. Czech Republic
Procter & Gamble d.o.o. za trgovinu Croatia
Procter & Gamble Danmark ApS Denmark
Procter & Gamble de Venezuela, S.C.A. Venezuela
Procter & Gamble de Venezuela, S.R.L. Venezuela
Procter & Gamble Detergent (Beijing) Ltd. China
Procter & Gamble Deutschland GmbH Germany
Procter & Gamble Distributing (Philippines) Inc. Philippines
Procter & Gamble Distributing New Zealand Limited New Zealand
Procter & Gamble Distribution Company (Europe) BV Belgium
Procter & Gamble Distribution S.R.L. Romania
Procter & Gamble do Brasil Ltda. Brazil
Procter & Gamble do Brazil, LLC Delaware
Procter & Gamble do Nordeste S/A Brazil
Procter & Gamble doo Beograd Serbia and Montenegro
Procter & Gamble DS Polska Sp. z o.o. Poland
Procter & Gamble Eastern Europe, LLC Ohio
Procter & Gamble Ecuador Cia. Ltda. Ecuador
Procter & Gamble Egypt Egypt
Procter & Gamble Egypt Distribution Egypt
Procter & Gamble Egypt Holding Egypt
Procter & Gamble Egypt Supplies Egypt
Procter & Gamble Energy Company LLC Ohio
Procter & Gamble España, S.A.U. Spain
Procter & Gamble Far East, Inc. Ohio
Procter & Gamble Finance (U.K.) Ltd. U.K.
Procter & Gamble Finance Holding Ltd. U.K.
Procter & Gamble Finance Management S.a.r.l. Luxembourg
Procter & Gamble Financial Investments LLP U.K.
Procter & Gamble Financial Services Ltd. U.K.
Procter & Gamble Financial Services S.a.r.l. Switzerland
Procter & Gamble Finland OY Finland
Procter & Gamble France S.A.S. France
Procter & Gamble Germany GmbH Germany
Procter & Gamble Germany GmbH & Co. Operations oHG Germany
Procter & Gamble Ghana Trading Limited Ghana
Procter & Gamble GmbH Germany
Procter & Gamble Grundstucks-und Vermogensverwaltungs GmbH & Co. KG Germany
Procter & Gamble Gulf FZE United Arab Emirates
Procter & Gamble Hair Care, LLC Delaware
Procter & Gamble Health Belgium BV Belgium
Procter & Gamble Health Limited India
Procter & Gamble Health Ltd. U.K.
Procter & Gamble Health Poland Sp. z o.o. Poland

Procter & Gamble Hellas Single Member Ltd. Greece
Procter & Gamble Holding (Thailand) Limited Thailand
Procter & Gamble Holding France S.A.S. France
Procter & Gamble Holding GmbH Germany
Procter & Gamble Holding S.r.l. Italy
Procter & Gamble Holdings (UK) Ltd. U.K.
Procter & Gamble Home Products Private Limited India
Procter & Gamble Honduras S de RL Honduras
Procter & Gamble Hong Kong Limited Hong Kong
Procter & Gamble Hungary Wholesale Trading Partnership (KKT) Hungary
Procter & Gamble Hygiene & Health Care Limited India
Procter & Gamble Inc. Canada
Procter & Gamble India Holdings, Inc. Ohio
Procter & Gamble Indochina Company Limited Vietnam
Procter & Gamble Industrial – 2012 C.A. Venezuela
Procter & Gamble Industrial e Comercial Ltda. Brazil
Procter & Gamble Industrial S.C.A. Venezuela
Procter & Gamble Interamericas de Costa Rica, Limitada Costa Rica
Procter & Gamble Interamericas de El Salvador, Limitada de Capital Variable El Salvador
Procter & Gamble Interamericas de Guatemala, Limitada Guatemala
Procter & Gamble Interamericas de Panama, S. de R.L. Panama
Procter & Gamble International Operations SA Switzerland
Procter & Gamble International Operations SA-ROHQ Philippines
Procter & Gamble International Sarl Switzerland
Procter & Gamble Investment Company (UK) Ltd. U.K.
Procter & Gamble Investment Holding B.V. Netherlands
Procter & Gamble Italia, S.p.A. Italy
Procter & Gamble Kazakhstan Distribution LLP Kazakhstan
Procter & Gamble Korea S&D Co. Korea
Procter & Gamble Korea, Inc. Korea
Procter & Gamble Leasing LLC Ohio
Procter & Gamble Levant S.A.L. Lebanon
Procter & Gamble Limited U.K.
“Procter & Gamble” LLC Russia
Procter & Gamble Manufacturing (Thailand) Limited Thailand
Procter & Gamble Manufacturing (Tianjin) Co. Ltd. China
Procter & Gamble Manufacturing Belgium N.V. Belgium
Procter & Gamble Manufacturing Berlin GmbH Germany
Procter & Gamble Manufacturing GmbH Germany
Procter & Gamble Manufacturing Mexico S. de R.L. de C.V. Mexico
Procter & Gamble Manufacturing SA (Pty) Ltd South Africa
Procter & Gamble Marketing Romania SRL Romania
Procter & Gamble Mataro, S.L.U. Spain
Procter & Gamble Mexico Holding B.V. Netherlands
Procter & Gamble Mexico Inc. Delaware
Procter & Gamble Middle East FZE United Arab Emirates
Procter & Gamble Nederland B.V. Netherlands
Procter & Gamble Netherlands Services B.V. Netherlands
Procter & Gamble Nigeria Limited Nigeria
Procter & Gamble Norge AS Norway
Procter & Gamble Operations Polska Sp. z o.o. Poland
Procter & Gamble Overseas India B.V. Netherlands
Procter & Gamble Overseas Ltd. U.K.
Procter & Gamble Pakistan (Private) Limited Pakistan
Procter & Gamble Peru S.R.L. Peru

Procter & Gamble Philippines Business Services Inc. Philippines
Procter & Gamble Philippines, Inc. Philippines
Procter & Gamble Polska Sp. z o.o Poland
Procter & Gamble Portugal – Produtos De Consumo, Higiene e Saúde S.A. Portugal
Procter & Gamble Product Supply (U.K.) Limited U.K.
Procter & Gamble Productions, Inc. Ohio
Procter & Gamble Retail Services Sarl Switzerland
Procter & Gamble RHD, Inc. Ohio
Procter & Gamble RSC Regional Service Company Ltd. Hungary
Procter & Gamble S.r.l. Italy
Procter & Gamble Service, GmbH Germany
Procter & Gamble Services (Switzerland) SA Switzerland
Procter & Gamble Services Company N.V. Belgium
“Procter & Gamble Services” LLC Russia
Procter & Gamble Sverige AB Sweden
Procter & Gamble Switzerland SARL Switzerland
Procter & Gamble Taiwan Limited Taiwan
Procter & Gamble Taiwan Sales Company Limited Taiwan
Procter & Gamble Technical Centres Limited U.K.
Procter & Gamble Technology (Beijing) Co., Ltd. China
Procter & Gamble Trading (Thailand) Limited Thailand
Procter & Gamble Tuketim Mallari Sanayii A.S. Turkey
Procter & Gamble UK U.K.
Procter & Gamble UK Group Holdings Ltd U.K.
Procter & Gamble UK Parent Company Ltd. U.K.
Procter & Gamble Universal Holding B.V. Netherlands
Procter & Gamble Vietnam Company Limited Vietnam
Procter & Gamble, Spol. s.r.o. (Ltd.) Slovak Republic
Procter & Gamble-Rakona s.r.o. Czech Republic
Procter and Gamble Lanka (Private) Limited Sri Lanka
Procter and Gamble SA (Pty) Ltd. South Africa
Progam Realty & Development Corporation Philippines
PT Procter & Gamble Home Products Indonesia Indonesia
PT Procter & Gamble Operations Indonesia Indonesia
Redmond Products, Inc. Minnesota
Richardson-Vicks Real Estate Inc. Ohio
Riverfront Music Publishing Co., Inc. Ohio
Rosemount LLC Delaware
Series Acquisition B.V. Netherlands
Seven Seas Limited U.K.
Shulton, Inc. New Jersey
Snowberry New Zealand Limited New Zealand
SPD Development Company Limited U.K.
SPD Swiss Precision Diagnostics GmbH Switzerland
Sunflower Distributing LLC Delaware
Tambrands Inc. Delaware
TAOS – FL, LLC Florida
TAOS Retail, LLC Delaware
Temple Trees Impex & Investment Private Limited India
The Art of Shaving – FL, LLC Florida
The Dover Wipes Company Ohio
The Gillette Company LLC Delaware
The Procter & Gamble Distributing LLC Delaware
The Procter & Gamble Global Finance Company, LLC Ohio
The Procter & Gamble Manufacturing Company Ohio

The Procter & Gamble Paper Products Company Ohio
The Procter & Gamble U.S. Business Services Company Ohio
This is L. Inc. Delaware
US CD LLC Delaware
Vidal Sassoon (Shanghai) Academy China
VitaminHaus Pty Ltd Australia
VitaminHaus Pty Ltd U.K.
Walker & Co. Brands, Inc. Delaware
Zenlen, Inc. Delaware

EXHIBIT (23)

Consent of Independent Registered Public Accounting Firm

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the following registration statements of our reports dated August 6, 2021, relating to
the consolidated financial statements of The Procter & Gamble Company and the effectiveness of The Procter & Gamble Company’s
internal control over financial reporting, appearing in this Annual Report on Form 10-K for the year ended June 30, 2021:
Form S-8 Form S-8 Form S-3
No. 33-49289 No. 333-108997 No. 333-249543
No. 33-47656 No. 333-108998 No. 333-249545
No. 33-50273 No. 333-108999 No. 333-249546
No. 33-51469 No. 333-111304
No. 333-14381 No. 333-128859
No. 333-21783 No. 333-143801
No. 333-37905 No. 333-155046
No. 333-51213 No. 333-161725
No. 333-51219 No. 333-164612
No. 333-51221 No. 333-192841
No. 333-34606 No. 333-199592
No. 333-44034 No. 333-208407
No. 333-47132 No. 333-208408
No. 333-75030 No. 333-208409
No. 333-100561 No. 333-208410
No. 333-108991 No. 333-208411
No. 333-108993 No. 333-208412
No. 333-108994 No. 333-234131
No. 333-108995 No. 333-119592

/s/ Deloitte & Touche LLP

Cincinnati, Ohio

August 6, 2021

EXHIBIT (31)

Rule 13a-14(a)/15d-14(a) Certifications

I, David S. Taylor, certify that:

(1) I have reviewed this Form 10-K of The Procter & Gamble Company;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:

i) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared;

ii) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, 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;

iii) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation;

iv) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are

reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s

internal control over financial reporting.

/s/ DAVID S. TAYLOR

(David S. Taylor)
Chairman of the Board, President and Chief Executive Officer

August 6, 2021
Date

EXHIBIT (31)

Rule 13a-14(a)/15d-14(a) Certifications

I, Andre Schulten, certify that:

(1) I have reviewed this Form 10-K of The Procter & Gamble Company;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:

i) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared;

ii) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, 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;

iii) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation;

iv) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are

reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s

internal control over financial reporting.

/s/ ANDRE SCHULTEN

(Andre Schulten)
Chief Financial Officer

August 6, 2021
Date

EXHIBIT (32)

Section 1350 Certifications

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of The Procter &
Gamble Company (the “Company”) certifies to his knowledge that:

(1) Form 10-K of the Company for the year ended June 30, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and

(2) The information contained in that Form 10-K fairly presents, in all material respects, the financial conditions and results of operations
of the Company.

/s/ DAVID S. TAYLOR

(David S. Taylor)
Chairman of the Board, President and Chief Executive Officer

August 6, 2021
Date

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The Procter & Gamble Company and
will be retained by The Procter & Gamble Company and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT (32)

Section 1350 Certifications

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of The Procter &
Gamble Company (the “Company”) certifies to his knowledge that:

(1) Form 10-K of the Company for the year ended June 30, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and

(2) The information contained in that Form 10-K fairly presents, in all material respects, the financial conditions and results of operations
of the Company.

/s/ ANDRE SCHULTEN

(Andre Schulten)
Chief Financial Officer

August 6, 2021
Date

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The Procter & Gamble Company and
will be retained by The Procter & Gamble Company and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT (99-1)

Summary of Directors and Officers Insurance Program

The Procter & Gamble Company purchases Directors and Officers Liability insurance from various insurance carriers. The policy limits for the period from June
30, 2020 to June 30, 2021 were $300 million.