10-Q 1 pg-20221231.htm FY2223 Q2 OND 10-Q pg-20221231
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
xTrueQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 2022
OR
oFalseTRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     

pg-20221231_g1.jpg
THE PROCTER & GAMBLE COMPANY
(Exact name of registrant as specified in its charter)
 
OhioOH1-43431-0411980
(State of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)
One Procter & Gamble PlazaCincinnatiOH
One Procter & Gamble Plaza, Cincinnati, Ohio45202
(Address of principal executive offices)(Zip Code)
(513) 983-1100
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, without Par ValuePGNYSE
1.125% Notes due 2023PG23ANYSE
0.500% Notes due 2024PG24ANYSE
0.625% Notes due 2024PG24BNYSE
1.375% Notes due 2025PG25NYSE
0.110% Notes due 2026PG26DNYSE
4.875% EUR notes due May 2027PG27ANYSE
1.200% Notes due 2028PG28NYSE
1.250% Notes due 2029PG29BNYSE
1.800% Notes due 2029PG29ANYSE
6.250% GBP notes due January 2030PG30NYSE
0.350% Notes due 2030PG30CNYSE
0.230% Notes due 2031PG31ANYSE
5.250% GBP notes due January 2033PG33NYSE
1.875% Notes due 2038PG38NYSE
0.900% Notes due 2041PG41NYSE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes þ     No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes þ     No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 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
There were 2,359,144,096 shares of Common Stock outstanding as of December 31, 2022.


PART I. FINANCIAL INFORMATION 
Item 1.Financial Statements
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Ended December 31Six Months Ended December 31
Amounts in millions except per share amounts2022 20212022 2021
NET SALES$20,773 $20,953 $41,385 $41,291 
Cost of products sold10,897 10,664 21,743 21,029 
Selling, general and administrative expense5,091 5,121 9,918 10,071 
OPERATING INCOME4,785 5,168 9,724 10,191 
Interest expense(171)(106)(294)(215)
Interest income66 10 108 21 
Other non-operating income, net155 167 294 277 
EARNINGS BEFORE INCOME TAXES4,835 5,239 9,832 10,274 
Income taxes876 997 1,910 1,906 
NET EARNINGS3,959 4,242 7,922 8,368 
Less: Net earnings attributable to noncontrolling interests26 19 50 33 
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE$3,933 $4,223 $7,872 $8,335 
NET EARNINGS PER SHARE (1)
Basic$1.63 $1.72 $3.25 $3.39 
Diluted$1.59 $1.66 $3.16 $3.27 
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING2,481.2 2,544.2 2,492.4 2,551.6 
(1)Basic net earnings per share and Diluted net earnings per share are calculated on Net earnings attributable to Procter & Gamble.

See accompanying Notes to Consolidated Financial Statements.


THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended December 31Six Months Ended December 31
Amounts in millions2022202120222021
NET EARNINGS$3,959 $4,242 $7,922 $8,368 
OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX
Foreign currency translation379 (241)(333)(706)
Unrealized gains/(losses) on investment securities(1)2 (3)7 
Unrealized gains/(losses) on defined benefit retirement plans(76)737 11 879 
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAX302 498 (325)180 
TOTAL COMPREHENSIVE INCOME4,261 4,740 7,597 8,548 
Less: Total comprehensive income attributable to noncontrolling interests23 19 42 33 
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO PROCTER & GAMBLE$4,238 $4,721 $7,555 $8,515 

See accompanying Notes to Consolidated Financial Statements.


THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Amounts in millionsDecember 31, 2022June 30, 2022
Assets
CURRENT ASSETS
Cash and cash equivalents$6,854 $7,214 
Accounts receivable5,767 5,143 
INVENTORIES
Materials and supplies2,232 2,168 
Work in process946 856 
Finished goods4,363 3,900 
Total inventories7,541 6,924 
Prepaid expenses and other current assets1,704 2,372 
TOTAL CURRENT ASSETS21,866 21,653 
PROPERTY, PLANT AND EQUIPMENT, NET21,167 21,195 
GOODWILL39,951 39,700 
TRADEMARKS AND OTHER INTANGIBLE ASSETS, NET23,594 23,679 
OTHER NONCURRENT ASSETS11,137 10,981 
TOTAL ASSETS$117,715 $117,208 
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Accounts payable$14,153 $14,882 
Accrued and other liabilities10,293 9,554 
Debt due within one year14,300 8,645 
TOTAL CURRENT LIABILITIES38,746 33,081 
LONG-TERM DEBT20,582 22,848 
DEFERRED INCOME TAXES6,462 6,809 
OTHER NONCURRENT LIABILITIES7,200 7,616 
TOTAL LIABILITIES72,990 70,354 
SHAREHOLDERS’ EQUITY
Preferred stock831 843 
Common stock – shares issued –December 20224,009.2 
June 20224,009.2 4,009 4,009 
Additional paid-in capital66,145 65,795 
Reserve for ESOP debt retirement(870)(916)
Accumulated other comprehensive loss(12,506)(12,189)
Treasury stock(129,012)(123,382)
Retained earnings115,858 112,429 
Noncontrolling interest270 265 
TOTAL SHAREHOLDERS’ EQUITY44,725 46,854 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$117,715 $117,208 

See accompanying Notes to Consolidated Financial Statements.


THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Three Months Ended December 31, 2022
Dollars in millions;
shares in thousands		Common StockPreferred StockAdd-itional Paid-In CapitalReserve for ESOP Debt RetirementAccumulated Other Comp-rehensive Income/(Loss)Treasury StockRetained EarningsNon-controlling InterestTotal Share-holders' Equity
SharesAmount
BALANCE SEPTEMBER 30, 20222,369,697 $4,009 $834 $65,955 ($870)($12,811)($127,205)$114,163 $259 $44,334 
Net earnings3,933 26 3,959 
Other comprehensive income/(loss)305 (3)302 
Dividends and dividend equivalents
($0.9133 per share):
Common(2,168)(2,168)
Preferred(70)(70)
Treasury stock purchases(14,426)(2,002)(2,002)
Employee stock plans3,441 189 193 382 
Preferred stock conversions432 (3)1 2 — 
ESOP debt impacts— — — 
Noncontrolling interest, net— (12)(12)
BALANCE DECEMBER 31, 20222,359,144 $4,009 $831 $66,145 ($870)($12,506)($129,012)$115,858 $270 $44,725 
Six Months Ended December 31, 2022
Dollars in millions;
shares in thousands		Common StockPreferred StockAdd-itional Paid-In CapitalReserve for ESOP Debt RetirementAccumulated Other Comp-rehensive Income/(Loss)Treasury StockRetained EarningsNon-controlling InterestTotal Share-holders' Equity
SharesAmount
BALANCE JUNE 30, 20222,393,877 $4,009 $843 $65,795 ($916)($12,189)($123,382)$112,429 $265 $46,854 
Net earnings7,872 50 7,922 
Other comprehensive income/(loss)(317)(8)(325)
Dividends and dividend equivalents
(1.8266 per share):
Common(4,357)(4,357)
Preferred(141)(141)
Treasury stock purchases(42,615)(6,002)(6,002)
Employee stock plans6,452 348 362 710 
Preferred stock conversions1,430 (12)2 10 — 
ESOP debt impacts46 55 101 
Noncontrolling interest, net— (37)(37)
BALANCE DECEMBER 31, 20222,359,144 $4,009 $831 $66,145 ($870)($12,506)($129,012)$115,858 $270 $44,725 
See accompanying Notes to Consolidated Financial Statements.


Three Months Ended December 31, 2021
Dollars in millions;
shares in thousands		Common StockPreferred StockAdd-itional Paid-In CapitalReserve for ESOP Debt RetirementAccumulated Other Comp-rehensive Income/(Loss)Treasury StockRetained EarningsNon-controlling InterestTotal Share-holders' Equity
SharesAmount
BALANCE SEPTEMBER 30, 20212,419,948 $4,009 $859 $65,148 ($964)($14,062)($117,240)$108,361 $297 $46,408 
Net earnings4,223 19 4,242 
Other comprehensive income/(loss)498 — 498 
Dividends and dividend equivalents
($0.8698 per share):
Common(2,108)(2,108)
Preferred(70)(70)
Treasury stock purchases(31,433)(4,754)(4,754)
Employee stock plans7,986 284 448 732 
Preferred stock conversions565 (3)— 3 — 
ESOP debt impacts(1)(13)(14)
Noncontrolling interest, net— (41)(41)
BALANCE DECEMBER 31, 20212,397,066 $4,009 $856 $65,432 ($965)($13,564)($121,543)$110,393 $275 $44,893 
Six Months Ended December 31, 2021
Dollars in millions;
shares in thousands		Common StockPreferred StockAdd-itional Paid-In CapitalReserve for ESOP Debt RetirementAccumulated Other Comp-rehensive Income/(Loss)Treasury StockRetained EarningsNon-controlling InterestTotal Share-holders' Equity
SharesAmount
BALANCE JUNE 30, 20212,429,706 $4,009 $870 $64,848 ($1,006)($13,744)($114,973)$106,374 $276 $46,654 
Net earnings8,335 33 8,368 
Other comprehensive income/(loss)180 — 180 
Dividends and dividend equivalents
(1.7396 per share):
Common(4,226)(4,226)
Preferred(140)(140)
Treasury stock purchases(50,786)(7,504)(7,504)
Employee stock plans16,423 584 922 1,506 
Preferred stock conversions1,723 (14)2 12 — 
ESOP debt impacts41 50 91 
Noncontrolling interest, net(2)(34)(36)
BALANCE DECEMBER 31, 20212,397,066 $4,009 $856 $65,432 ($965)($13,564)($121,543)$110,393 $275 $44,893 

See accompanying Notes to Consolidated Financial Statements.



THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended December 31
Amounts in millions20222021
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD$7,214 $10,288 
OPERATING ACTIVITIES
Net earnings7,922 8,368 
Depreciation and amortization1,316 1,395 
Share-based compensation expense250 268 
Deferred income taxes(398)(101)
Gain on sale of assets(3)(82)
Changes in:
Accounts receivable(654)(644)
Inventories(655)(840)
Accounts payable, accrued and other liabilities177 1,431 
Other operating assets and liabilities(535)(84)
Other224 53 
TOTAL OPERATING ACTIVITIES7,644 9,764 
INVESTING ACTIVITIES
Capital expenditures(1,598)(1,717)
Proceeds from asset sales8 97 
Acquisitions, net of cash acquired(76)(349)
Other investing activity344 3 
TOTAL INVESTING ACTIVITIES(1,322)(1,966)
FINANCING ACTIVITIES
Dividends to shareholders(4,486)(4,353)
Additions to short-term debt with original maturities of more than three months10,447 6,747 
Reductions in short-term debt with original maturities of more than three months(3,260)(1,730)
Net reductions to other short-term debt(1,759)(1,124)
Additions to long-term debt— 2,136 
Reductions in long-term debt(1,877)(1,673)
Treasury stock purchases(6,002)(7,504)
Impact of stock options and other437 1,215 
TOTAL FINANCING ACTIVITIES(6,500)(6,286)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH(182)(256)
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(360)1,256 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD$6,854 $11,544 
See accompanying Notes to Consolidated Financial Statements.


THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
These statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022. In the opinion of management, the accompanying unaudited Consolidated Financial Statements of The Procter & Gamble Company and subsidiaries (the "Company," "Procter & Gamble," "P&G," "we" or "our") contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods reported. However, the results of operations included in such financial statements may not necessarily be indicative of annual results.
2. New Accounting Pronouncements and Policies
In November 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2021-10, "Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance". This guidance requires annual disclosures for transactions with a government authority that are accounted for by applying a grant or contribution model. These amendments are effective for annual periods beginning after December 15, 2021, with early adoption permitted. We have completed our evaluation of significant transactions. The guidance has not had, and is not expected to have, a material impact on the Company's Consolidated Financial Statements.
In September 2022, the FASB issued ASU No. 2022-04, "Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations". This guidance requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. These amendments are effective for fiscal years beginning after December 15, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. We are currently assessing the impact of this guidance on our Consolidated Financial Statements.
No other new accounting pronouncement issued or effective during the fiscal year had, or is expected to have, a material impact on our Consolidated Financial Statements.
3. Segment Information
Under U.S. GAAP, our operating segments are aggregated into five reportable segments: 1) Beauty, 2) Grooming, 3) Health Care, 4) Fabric & Home Care and 5) Baby, Feminine & Family Care. Our five reportable segments are comprised of:
•Beauty: Hair Care (Conditioners, Shampoos, Styling Aids, Treatments); Skin and Personal Care (Antiperspirants and Deodorants, Personal Cleansing, Skin Care);
•Grooming: Grooming (Appliances, Female Blades & Razors, Male Blades & Razors, Pre-and Post-Shave Products, Other Grooming);
•Health Care: Oral Care (Toothbrushes, Toothpaste, Other Oral Care); Personal Health Care (Gastrointestinal, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, Pain Relief, Other Personal Health Care);
•Fabric & Home Care: Fabric Care (Fabric Enhancers, Laundry Additives, Laundry Detergents); Home Care (Air Care, Dish Care, P&G Professional, Surface Care); and
•Baby, Feminine & Family Care: Baby Care (Baby Wipes, Taped Diapers and Pants); Feminine Care (Adult Incontinence, Feminine Care); Family Care (Paper Towels, Tissues, Toilet Paper).

Amounts in millions of dollars unless otherwise specified.

Our operating segments are comprised of similar product categories. Operating segments that individually accounted for 5% or more of consolidated net sales are as follows:
% of Net sales by operating segment (1)
Three Months Ended December 31Six Months Ended December 31
2022202120222021
Fabric Care23%22%23%23%
Home Care11%11%11%11%
Skin and Personal Care10%10%10%10%
Baby Care10%11%10%10%
Hair Care8%9%9%9%
Family Care8%8%8%8%
Grooming (2)
8%7%8%7%
Oral Care8%8%8%8%
Feminine Care7%6%7%6%
Personal Health Care7%6%6%6%
Other—%2%—%2%
Total100%100%100%100%
(1)% of Net sales by operating segment excludes sales held in Corporate.
(2)Effective July 1, 2022, the Grooming Sector Business Unit completed the full integration of its Shave Care and Appliances categories to cohesively serve consumers' grooming needs. This transition included the integration of the management team, strategic decision-making, innovation plans, financial targets, budgets and internal management reporting. For the three and six months ended December 31, 2021, Appliances was presented in Other.

The following is a summary of reportable segment results:
Three Months Ended December 31Six Months Ended December 31
Net SalesEarnings/(Loss) Before Income TaxesNet Earnings/(Loss)Net SalesEarnings/(Loss) Before Income TaxesNet Earnings/(Loss)
Beauty2022$3,807 $1,145 $911 $7,768 $2,416 $1,922 
20213,926 1,179 947 7,890 2,421 1,938 
Grooming20221,643 496 404 3,268 999 808 
20211,811 576 476 3,498 1,094 893 
Health Care20223,051 887 686 5,808 1,687 1,303 
20212,976 905 701 5,652 1,600 1,230 
Fabric & Home Care20227,032 1,538 1,171 14,114 3,081 2,343 
20216,972 1,463 1,137 13,981 3,009 2,328 
Baby, Feminine & Family Care20225,065 1,112 848 9,999 2,167 1,653 
20215,116 1,187 914 9,980 2,262 1,740 
Corporate2022175 (343)(61)428 (518)(107)
2021152 (71)67 290 (112)239 
Total Company2022$20,773 $4,835 $3,959 $41,385 $9,832 $7,922 
202120,953 5,239 4,242 41,291 10,274 8,368 

Amounts in millions of dollars unless otherwise specified.

4. Goodwill and Other Intangible Assets
Goodwill is allocated by reportable segment as follows:
BeautyGroomingHealth CareFabric & Home CareBaby, Feminine & Family CareTotal Company
Goodwill at June 30, 2022$13,296 $12,571 $7,589 $1,808 $4,436 $39,700 
Acquisitions and divestitures— — — — 34 34 
Translation and other88 53 44 4 28 217 
Goodwill at December 31, 2022$13,384 $12,624 $7,633 $1,812 $4,498 $39,951 
Goodwill increased from June 30, 2022 primarily due to minor brand acquisitions in the Baby, Feminine & Family Care segment and currency translation.
Identifiable intangible assets at December 31, 2022 were comprised of:
Gross Carrying AmountAccumulated Amortization
Intangible assets with determinable lives$8,897 $(6,268)
Intangible assets with indefinite lives20,965 — 
Total identifiable intangible assets$29,862 $(6,268)
Intangible assets with determinable lives consist of brands, patents, technology and customer relationships. The intangible assets with indefinite lives primarily consist of brands. The amortization expense of determinable-lived intangible assets for the three months ended December 31, 2022 and 2021 was $79 and $74, respectively. For the six-months ended December 31, 2022 and 2021, amortization expense was $159 and $151, respectively.
Goodwill and indefinite-lived intangible assets are not amortized but are tested at least annually for impairment. We use the income method to estimate the fair value of these assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. If the resulting fair value is less than the asset's carrying value, that difference represents an impairment.
Most of our goodwill reporting units have fair value cushions that significantly exceed their underlying carrying values. In connection with the Grooming operating segment integration as described further in Note 3, we concluded that the Shave Care and Appliances categories are one reporting unit (Grooming) for goodwill impairment testing. Based on our impairment testing performed during the three months ended December 31, 2022, our Grooming goodwill reporting unit, which is comprised entirely of acquired businesses, has a fair value cushion of over 30% and the Gillette indefinite-lived intangible asset's fair value exceeded its carrying value by approximately 5%.
The Gillette indefinite-lived intangible asset is most susceptible to future impairment risk. Adverse changes in the business or in the macroeconomic environment, including foreign currency devaluation, increasing global inflation, market contraction from an economic recession and the Russia-Ukraine War, could reduce the underlying cash flows used to estimate the fair value of the Gillette indefinite-lived intangible asset and trigger a future impairment charge. Further reduction of the Gillette business activities in Russia could reduce the estimated fair value by up to 5%.
The most significant assumptions utilized in the determination of the estimated fair value of the Gillette indefinite-lived intangible asset are the net sales growth rates (including residual growth rates), discount rate and royalty rates.
Net sales growth rates could be negatively impacted by reductions or changes in demand for our Gillette products, which may be caused by, among other things: changes in the use and frequency of grooming products, shifts in demand away from one or more of our higher priced products to lower priced products or potential supply chain constraints. In addition, relative global and country/regional macroeconomic factors, including the Russia-Ukraine War, could result in additional and prolonged devaluation of other countries' currencies relative to the U.S. dollar. The residual growth rates represent the expected rate at which the Gillette brand is expected to grow beyond the shorter-term business planning period. The residual growth rates utilized in our fair value estimates are consistent with the brand operating plans and approximate expected long-term category market growth rates. The residual growth rate depends on overall market growth rates, the competitive environment, inflation, relative currency exchange rates and business activities that impact market share. As a result, the residual growth rate could be adversely impacted by a sustained deceleration in category growth, grooming habit changes, devaluation of currencies against the U.S. dollar or an increased competitive environment.
The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon industry required rates of return, including consideration of both debt and equity components of the
Amounts in millions of dollars unless otherwise specified.

capital structure. Our discount rate may be impacted by adverse changes in the macroeconomic environment, volatility in the equity and debt markets or other country specific factors, such as further devaluation of currencies against the U.S. dollar. Spot rates as of the fair value measurement date are utilized in our fair value estimates for cash flows outside the U.S.
The royalty rate used to determine the estimated fair value for the Gillette indefinite-lived intangible asset 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.
We performed a sensitivity analysis for the Gillette indefinite-lived intangible asset during our annual impairment testing, utilizing reasonably possible changes in the assumptions for the discount rate, the short-term and residual growth rates and the royalty rates to demonstrate the potential impacts to 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 short-term and residual growth rates or a 50 basis-point decrease in our royalty rates, which may result in an impairment of the Gillette indefinite-lived intangible asset.
Approximate Percent Change in Estimated Fair Value
+25 bps Discount Rate-25 bps Growth Rates-50 bps Royalty Rate
Gillette indefinite-lived intangible asset(6)%(6)%(4)%
5. Earnings Per Share
Basic net earnings per common share are calculated by dividing Net earnings attributable to Procter & Gamble less preferred dividends by the weighted average number of common shares outstanding during the period. Diluted net earnings per common share are calculated by dividing Net earnings attributable to Procter & Gamble by the diluted weighted average number of common shares outstanding during the period. The diluted shares include the dilutive effect of stock options and other stock-based awards based on the treasury stock method and the assumed conversion of preferred stock.
Net earnings per share were calculated as follows:
CONSOLIDATED AMOUNTSThree Months Ended December 31Six Months Ended December 31
2022202120222021
Net earnings$3,959 $4,242 $7,922 $8,368 
Less: Net earnings attributable to noncontrolling interests26 19 50 33 
Net earnings attributable to P&G (Diluted)3,933 4,223 7,872 8,335 
Less: Preferred dividends70 70 141 140 
Net earnings attributable to P&G available to common shareholders (Basic)$3,863 $4,153 $7,731 $8,195 
SHARES IN MILLIONS
Basic weighted average common shares outstanding2,365.9 2,413.4 2,375.7 2,420.7 
Add: Effect of dilutive securities
Convertible preferred shares (1)
76.7 79.6 77.0 80.1 
Stock options and other unvested equity awards (2)
38.6 51.2 39.7 50.8 
Diluted weighted average common shares outstanding2,481.2 2,544.2 2,492.4 2,551.6 
NET EARNINGS PER SHARE