with Ukraine related assets held by other subsidiaries, account for less than 1% of net assets as of June 30, 2022. Our Russia business includes two manufacturing sites with a net book value of approximately $350 million as of June 30, 2022. We have approximately 2,400 employees, including both manufacturing and non - manufacturing personnel. In fiscal 2022, our operations in Rus sia accounted for less than 2% of consolidated net sales and less than 1% of net earnings. Additionally, net assets of our Russia subsidiaries, along with Russia related assets held by other subsidiaries, account for less than 2% of net assets as of June 30, 2022. Beginning in March 2022, the Company has reduced its product portfolio, discontinued new capital investments and suspended media, advertising and promotional activity in Russia. Future impacts to the Company are difficult to predict due to the high level of uncertainty as to how the war will evolve, what its duration will be and its ultimate resolution. Within Ukraine, there is a possibility of physical damage and destruction of our two manufacturing facilities. We may not be able to operate o ur manufacturing sites and source raw materials from our suppliers or ship finished products to our customers. Ultimately, these could result in impairments of our manufacturing plants and fixed assets or write - downs of other operating assets and working capital. Within Russia, we may not be able to continue our reduced operations at current levels due to sanctions and counter - sanctions, monetary, currency or payment controls, restrictions on access to financial institutions and supply and transportation c hallenges. Our suppliers, distributors and retail customers are also impacted by the war and their ability to successfully maintain their operations could also impact our operations or negatively impact the sales of our products. More broadly, there coul d be additional negative impacts to our net sales, earnings and cash flows should the situation escalate beyond its current scope, including, among other potential impacts, economic recessions in certain neighboring countries or globally due to inflationar y pressures and supply chain cost increases or the geographic proximity of the war relative to the rest of Europe. For additional information on risk factors that could impact our 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 compe titors), marketing spending, retail executions (both in - store and online) and acquisition and divestiture activity, all of which drive changes in our underlying unit volume, as well as our pricing actions (which can also impact volume), changes in product and geographic mix and foreign exchange impacts on sales outside the U.S. For most of our categories, our cost of products sold and SG&A are variable in nature to some extent. Accordingly, our discussion of these operating costs focuses primarily on relat ive 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 gen erally 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 diff erent functional currency than the underlying sales), the impacts of manufacturing savings projects and reinvestments (for example, product or package improvements) and, to a lesser extent, scale impacts (for costs that are fixed or less variable in nature ). The primary components of SG&A are marketing - related costs and non - manufacturing overhead costs. Marketing - related costs are primarily variable in nature, although we may achieve some level of scale benefit over time due to overall growth and other ma rketing 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 d rivers 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 2021 yea r - over - year changes, please refer to the MD&A in Part II, Item 7 of the Company's Form 10 - K for the fiscal year ended June 30, 2021 . Net Sales Net sales increased 5% to $80.2 billion in fiscal 2022 on a 2% increase in unit volume versus the prior year. Unfavorable foreign exchange decreased net sales b y 2%. Favorable pricing had a 4% positive impact on net sales. Mix increased net sales by 1% due to positive geographic mix from the disproportionate growth of the North America region and positive category mix from the disproportionate growth of the Per sonal Health Care category, both of which have higher than Company - average selling prices. This was partially offset by the disproportionate growth of the Fabric Care business, which has lower than Company - average selling prices. Excluding the net impact s of foreign exchange and acquisitions and divestitures, organic sales grew 7% on a 2% increase in organic volume. Net sales increased high single digits in Health Care, increased mid - single digits in Fabric & Home Care and in Baby, Feminine & Family Care and increased low single digits in Beauty and Grooming. On a regional basis, volume increased mid - single digits in North America and Latin America, increased low single digits in Asia Pacific and IMEA. Volume in Europe was unchanged and decreased mid - single digits in Greater China. The Procter & Gamble Company 19