Item 1. Financial Statements

The Clorox Company

Condensed Consolidated Statements of Earnings and Comprehensive Income (Unaudited)

(Dollars in millions, except per share data)

						Three Months Ended																		Six Months Ended
						12/31/2021									12/31/2020									12/31/2021									12/31/2020
Net sales						$			1,691						$			1,842						$			3,497						$			3,758
Cost of products sold									1,133									1,005									2,269									2,001
Gross profit									558									837									1,228									1,757
Selling and administrative expenses									241									269									477									507
Advertising costs									167									187									349									366
Research and development costs									34									40									67									72
Interest expense									23									24									48									49
Other (income) expense, net									—									(15)									9									(95)
Earnings before income taxes									93									332									278									858
Income taxes									21									71									63									180
Net earnings									72									261									215									678
Less: Net earnings attributable to noncontrolling interests									3									2									4									4
Net earnings attributable to Clorox						$			69						$			259						$			211						$			674
Net earnings per share attributable to Clorox
Basic net earnings per share						$			0.56						$			2.06						$			1.71						$			5.34
Diluted net earnings per share						$			0.56						$			2.03						$			1.70						$			5.25
Weighted average shares outstanding (in thousands)
Basic									123,064									126,216									123,022									126,281
Diluted									123,910									128,135									123,976									128,457
Comprehensive income						$			65						$			309						$			187						$			743
Less: Total comprehensive income attributable to noncontrolling interests									3									2									4									4
Total comprehensive income attributable to Clorox						$			62						$			307						$			183						$			739

See Notes to Condensed Consolidated Financial Statements (Unaudited)

The Clorox Company

Condensed Consolidated Balance Sheets

(Dollars in millions, except per share data)

			12/31/2021									6/30/2021
			(Unaudited)
ASSETS
Current assets
Cash and cash equivalents			$			192						$			319
Receivables, net						569									604
Inventories, net						818									752
Prepaid expenses and other current assets						162									154
Total current assets						1,741									1,829
Property, plant and equipment, net of accumulated depreciation and amortization of $2,466 and $2,382, respectively						1,298									1,302
Operating lease right-of-use assets						310									332
Goodwill						1,565									1,575
Trademarks, net						690									693
Other intangible assets, net						210									225
Other assets						376									378
Total assets			$			6,190						$			6,334
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Notes and loans payable			$			383						$			—
Current maturities of long-term debt						600									300
Current operating lease liabilities						73									81
Accounts payable and accrued liabilities						1,540									1,675
Total current liabilities						2,596									2,056
Long-term debt						1,886									2,484
Long-term operating lease liabilities						286									301
Other liabilities						861									834
Deferred income taxes						70									67
Total liabilities						5,699									5,742
Commitments and contingencies
Stockholders’ equity
Preferred stock: $1.00 par value; 5,000,000 shares authorized; none issued or outstanding						—									—
Common stock: $1.00 par value; 750,000,000 shares authorized; 130,741,461 shares issued as of December 31, 2021 and June 30, 2021; and 122,964,541 and 122,780,220 shares outstanding as of December 31, 2021 and June 30, 2021, respectively						131									131
Additional paid-in capital						1,180									1,186
Retained earnings						949									1,036
Treasury stock, at cost: 7,776,920 and 7,961,241 shares as of December 31, 2021 and June 30, 2021, respectively						(1,373)									(1,396)
Accumulated other comprehensive net (loss) income						(574)									(546)
Total Clorox stockholders’ equity						313									411
Noncontrolling interests						178									181
Total stockholders’ equity						491									592
Total liabilities and stockholders’ equity			$			6,190						$			6,334

See Notes to Condensed Consolidated Financial Statements (Unaudited)

The Clorox Company

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in millions)

			Six Months Ended
			12/31/2021									12/31/2020
Operating activities:
Net earnings			$			215						$			678
Adjustments to reconcile net earnings to net cash provided by operations:
Depreciation and amortization						110									104
Stock-based compensation						25									35
Deferred income taxes						6									41
Other						18									(65)
Changes in:
Receivables, net						31									72
Inventories, net						(72)									(140)
Prepaid expenses and other current assets						(2)									(17)
Accounts payable and accrued liabilities						(130)									23
Operating lease right-of-use assets and liabilities, net						(1)									—
Income taxes payable / prepaid						22									(102)
Net cash provided by operations						222									629
Investing activities:
Capital expenditures						(109)									(151)
Businesses acquired, net of cash acquired						—									(85)
Other						(3)									(22)
Net cash used for investing activities						(112)									(258)
Financing activities:
Notes and loans payable, net						383									—
Long-term debt repayments						(300)									—
Treasury stock purchased						(25)									(300)
Cash dividends paid to Clorox stockholders						(285)									(280)
Cash dividends paid to noncontrolling interests						(5)									(18)
Issuance of common stock for employee stock plans and other						(3)									74
Net cash used for financing activities						(235)									(524)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash						(3)									11
Net increase (decrease) in cash, cash equivalents, and restricted cash						(128)									(142)
Cash, cash equivalents, and restricted cash:
Beginning of period						324									879
End of period			$			196						$			737

See Notes to Condensed Consolidated Financial Statements (Unaudited)

The Clorox Company

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in millions, except per share data)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited interim condensed consolidated financial statements for the three and six months ended December 31, 2021 and 2020, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the consolidated results of operations, financial position and cash flows of The Clorox Company and its controlled subsidiaries (the Company) for the periods presented. However, the financial results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been omitted or condensed pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). The information in this report should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended June 30, 2021, which includes a complete set of footnote disclosures, including the Company’s significant accounting policies.

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12, “Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes,” which removes certain exceptions to the general principles in ASC 740 and amends existing guidance to improve consistent application. Certain amendments must be applied prospectively, certain amendments must be applied on a retrospective basis, and certain amendments must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings. The Company adopted this standard as of July 1, 2021. The adoption of this new standard did not have a material impact on the Company’s condensed consolidated financial statements.

NOTE 2. BUSINESS ACQUIRED

Saudi Joint Venture Acquisition

On July 9, 2020, the Company increased its investment in each of the two entities comprising its joint venture in the Kingdom of Saudi Arabia (Saudi joint venture) from 30 percent to 51 percent. The joint venture offers customers in the Gulf region a range of cleaning and disinfecting products. With the additional investment, the Company has consolidated this joint venture into its consolidated financial statements from the date of acquisition and reflects operations within the International reportable segment. The equity and income attributable to the other joint venture owners is recorded and presented as noncontrolling interests. As a result of this transaction, the carrying value of the Company’s previously held equity investment was remeasured to fair value, and resulted in an $85 non-recurring, noncash gain recorded in Other (income) expense, net in the condensed consolidated statement of earnings and adjusted in Other operating activities in the condensed consolidated statement of cash flows for the first quarter of fiscal year 2021.

The Saudi joint venture acquisition was accounted for under the acquisition method of accounting for business combinations. The total purchase consideration was $111 consisting of $100 cash paid and $11 from the net effective settlement of preexisting arrangements between the Company and the joint venture. The assets and liabilities of the joint venture were recorded at their respective estimated fair value as of the acquisition date. The fair value of the total net assets and noncontrolling interests recorded as of the date of acquisition was $412 and $198, respectively. The purchase price allocation was finalized during the second quarter of fiscal year 2021.

Refer to the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021 for the final purchase price allocation, valuation methodology and other information related to the Saudi joint venture acquisition.

NOTE 3. INVENTORIES, NET

Inventories, net, consisted of the following as of:

			12/31/2021						6/30/2021
Finished goods			$	626					$	543
Raw materials and packaging			220						229
Work in process			14						11
LIFO allowances			(42)						(31)
Total			$	818					$	752

NOTE 4. DEBT

Short-term borrowings

In November 2021, $300 of the Company’s senior notes with an annual fixed interest rate of 3.80% became due and were repaid using commercial paper borrowings.

The weighted average effective interest rate of notes and loans payable as of December 31, 2021 was 0.27%. The Company had no notes and loans payable outstanding as of June 30, 2021.

NOTE 5. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Financial Risk Management and Derivative Instruments

The Company is exposed to certain commodity, foreign currency and interest rate risks related to its ongoing business operations and uses derivative instruments to mitigate its exposure to these risks.

Commodity Price Risk Management

The Company may use commodity exchange traded futures and over-the-counter swap contracts, which are generally no longer than 2 years, to fix the price of a portion of its forecasted raw material requirements. Commodity purchase contracts are measured at fair value using market quotations obtained from the Chicago Board of Trade commodity futures exchange and commodity derivative dealers.

As of December 31, 2021, the notional amount of commodity derivatives was $32, of which $19 related to soybean oil futures used for the Food products business and $13 related to jet fuel swaps used for the Grilling business. As of June 30, 2021, the notional amount of commodity derivatives was $32, of which $23 related to soybean oil futures and $9 related to jet fuel swaps.

Foreign Currency Risk Management

The Company may also enter into certain over-the-counter derivative contracts to manage a portion of the Company’s forecasted foreign currency exposure associated with the purchase of inventory. These foreign currency contracts generally have durations of no longer than 2 years. The foreign exchange contracts are measured at fair value using information quoted by foreign exchange dealers.

The notional amounts of outstanding foreign currency forward contracts used by the Company’s subsidiaries to hedge forecasted purchases of inventory were $46 and $70, respectively, as of both December 31, 2021 and June 30, 2021.

Interest Rate Risk Management

The Company may enter into over-the-counter interest rate contracts to fix a portion of the benchmark interest rate prior to the anticipated issuance of fixed rate debt. These interest rate contracts generally have durations of less than 3 years. The interest rate contracts are measured at fair value using information quoted by bond dealers.

The notional amounts of outstanding interest rate contracts used by the Company were $300 as of both December 31, 2021 and June 30, 2021. These contracts represent forward starting interest rate swap contracts with a maturity date of September 2022 to manage the exposure to interest rate volatility associated with future interest payments on a forecasted debt issuance.

NOTE 5. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

Commodity, Foreign Exchange and Interest Rate Derivatives

The Company designates its commodity forward and futures contracts for forecasted purchases of raw materials, foreign currency forward contracts for forecasted purchases of inventory and interest rate contracts for forecasted interest payments as cash flow hedges.

The effects of derivative instruments designated as hedging instruments on Other comprehensive (loss) income and Net earnings were as follows:

			Gains (losses) recognized in Other comprehensive (loss) income
			Three Months Ended												Six Months Ended
			12/31/2021						12/31/2020						12/31/2021						12/31/2020
Commodity purchase derivative contracts			$	2					$	6					$	2					$	7
Foreign exchange derivative contracts			—						(2)						1						(3)
Interest rate derivative contracts			(3)						7						—						10
Total			$	(1)					$	11					$	3					$	14

			Location of gains (losses) reclassified from Accumulated other comprehensive net (loss) income into Net earnings			Gains (losses) reclassified from Accumulated other comprehensive net (loss) income and recognized in Net earnings
						Three Months Ended												Six Months Ended
						12/31/2021						12/31/2020						12/31/2021						12/31/2020
Commodity purchase derivative contracts			Cost of products sold			$	5					$	(1)					$	10					$	(2)
Foreign exchange derivative contracts			Cost of products sold			—						—						—						—
Interest rate derivative contracts			Interest expense			(1)						(1)						(3)						(3)
Total						$	4					$	(2)					$	7					$	(5)

The estimated amount of the existing net gain (loss) in Accumulated other comprehensive net (loss) income as of December 31, 2021, that is expected to be reclassified into Net earnings (losses) within the next twelve months is $5.

Counterparty Risk Management and Derivative Contract Requirements

The Company utilizes a variety of financial institutions as counterparties for over-the-counter derivative instruments. The Company enters into agreements governing the use of over-the-counter derivative instruments and sets internal limits on the aggregate over-the-counter derivative instrument positions held with each counterparty. Certain terms of these agreements require the Company or the counterparty to post collateral when the fair value of the derivative instruments exceeds contractually-defined counterparty liability position limits. Of the over-the-counter derivative instruments in liability positions held as of both December 31, 2021 and June 30, 2021, $0 contained such terms. As of both December 31, 2021 and June 30, 2021, neither the Company nor any counterparty was required to post any collateral, as no counterparty liability position limits were exceeded.

Certain terms of the agreements governing the Company’s over-the-counter derivative instruments require the credit ratings, as assigned by Standard & Poor’s and Moody’s to the Company and its counterparties, to remain at a level equal to or better than the minimum of an investment grade credit rating. If the Company’s credit ratings were to fall below investment grade, the counterparties to the derivative instruments could request full collateralization on derivative instruments in net liability positions. As of both December 31, 2021 and June 30, 2021, the Company and each of its counterparties had been assigned investment grade ratings by both Standard & Poor’s and Moody’s.

NOTE 5. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

Certain of the Company’s exchange-traded futures contracts used for commodity price risk management include requirements for the Company to post collateral in the form of a cash margin account held by the Company’s broker for trades conducted on that exchange. As of both December 31, 2021 and June 30, 2021, the Company maintained cash margin balances related to exchange-traded futures contracts of $2 and $0, respectively, which are classified as Prepaid expenses and other current assets on the condensed consolidated balance sheets.

Trust Assets

The Company holds interests in mutual funds and cash equivalents as part of trust assets related to its nonqualified deferred compensation plans. The participants in the nonqualified deferred compensation plans, who are the Company’s current and former employees, may select among certain mutual funds in which their compensation deferrals are invested in accordance with the terms of the plans and within the confines of the trusts, which hold the marketable securities. The trusts represent variable interest entities for which the Company is considered the primary beneficiary, and, therefore, trust assets are consolidated and included in Other assets in the condensed consolidated balance sheets. The interests in mutual funds are measured at fair value using quoted market prices. The Company has designated these marketable securities as trading investments.

Fair Value of Financial Instruments

Financial assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets are required to be classified and disclosed in one of the following three categories of the fair value hierarchy:

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.

As of both December 31, 2021 and June 30, 2021, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis included derivative financial instruments, which were classified as either Level 1 or Level 2, and trust assets to fund the Company’s nonqualified deferred compensation plans, which were classified as Level 1.

All of the Company’s derivative instruments qualify for hedge accounting. The following table provides information about the balance sheet classification and the fair values of the Company’s derivative instruments:

															12/31/2021												6/30/2021
			Balance Sheet Classification						Fair Value Hierarchy Level						Carrying Amount						Estimated Fair Value						Carrying Amount						Estimated Fair Value
Assets
Commodity purchase futures contracts			Prepaid expenses and other current assets						1						$	—					$	—					$	5					$	5
Commodity purchase swaps contracts			Prepaid expenses and other current assets						2						3						3						4						4
Foreign exchange forward contracts			Prepaid expenses and other current assets						2						2						2						—						—
Interest rate contracts			Prepaid expenses and other current assets						2						24						24						24						24
															$	29					$	29					$	33					$	33
Liabilities
Commodity purchase futures contracts			Accounts payable and accrued liabilities						1						1						1						—						—
															$	1					$	1					$	—					$	—

NOTE 5. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

The following table provides information about the balance sheet classification and the fair values of the Company’s other assets and liabilities for which disclosure of fair value is required:

															12/31/2021												6/30/2021
			Balance Sheet Classification						Fair Value Hierarchy Level						Carrying Amount						Estimated Fair Value						Carrying Amount						Estimated Fair Value
Assets
Interest-bearing investments, including money market funds			Cash and cash equivalents (1)						1						$	56					$	56					$	196					$	196
Time deposits			Cash and cash equivalents (1)						2						3						3						11						11
Trust assets for nonqualified deferred compensation plans			Other assets						1						149						149						136						136
															$	208					$	208					$	343					$	343
Liabilities
Notes and loans payable			Notes and loans payable (2)						2						$	383					$	383					$	—					$	—
Current maturities of long-term debt and Long-term debt			Current maturities of long- term debt and Long-term debt (3)						2						2,486						2,614						2,784						2,963
															$	2,869					$	2,997					$	2,784					$	2,963

(1)Cash and cash equivalents are composed of time deposits and other interest-bearing investments, including money market funds with original maturity dates of 90 days or less. Cash and cash equivalents are recorded at cost, which approximates fair value.

(2)Notes and loans payable are composed of outstanding U.S. commercial paper balances, which are recorded at cost, which approximates fair value.

(3)Current maturities of long-term debt and Long-term debt are recorded at cost. The fair value of Long-term debt, including current maturities, was determined using secondary market prices quoted by corporate bond dealers, and is classified as Level 2.

NOTE 6. INCOME TAXES

In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter. The effective tax rate on earnings was 23.1% and 22.8% for the three and six months ended December 31, 2021, respectively, and 21.2% and 20.9% for the three and six months ended December 31, 2020, respectively.

NOTE 7. NET EARNINGS PER SHARE (EPS)

The following is the reconciliation of the weighted average number of shares outstanding (in thousands) used to calculate basic net EPS to those used to calculate diluted net EPS:

			Three Months Ended												Six Months Ended
			12/31/2021						12/31/2020						12/31/2021						12/31/2020
Basic			123,064						126,216						123,022						126,281
Dilutive effect of stock options and other			846						1,919						954						2,176
Diluted			123,910						128,135						123,976						128,457
Antidilutive stock options and other			1,065						437						1,067						437

Basic net earnings per share and Diluted net earnings per share are calculated on Net earnings attributable to Clorox.

NOTE 8. COMPREHENSIVE INCOME

The following table provides a summary of Comprehensive income for the periods indicated:

			Three Months Ended												Six Months Ended
			12/31/2021						12/31/2020						12/31/2021						12/31/2020
Net earnings			$	72					$	261					$	215					$	678
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments			(5)						37						(28)						47
Net unrealized gains (losses) on derivatives			(4)						10						(3)						15
Pension and postretirement benefit adjustments			2						1						3						3
Total other comprehensive (loss) income, net of tax			(7)						48						(28)						65
Comprehensive income			65						309						187						743
Less: Total comprehensive income attributable to noncontrolling interests			3						2						4						4
Total comprehensive income attributable to Clorox			$	62					$	307					$	183					$	739

NOTE 9. STOCKHOLDERS’ EQUITY

Changes in the components of Stockholders’ equity were as follows for the periods indicated:

			Three Months Ended December 31
(Dollars in millions except per share data; shares in thousands)			Common Stock												Additional Paid-in Capital						Retained Earnings						Treasury Stock												Accumulated Other Comprehensive Net (Loss) Income						Non-controlling interests						Total Stockholders’ Equity
Amount						Shares												Amount						Shares
Balance as of September 30, 2020			$	159					158,741						$	1,146					$	3,840					$	(3,407)					(32,704)						$	(623)					$	196					$	1,311
Net earnings			—						—						—						259						—						—						—						2						261
Other comprehensive (loss) income			—						—						—						—						—						—						48						—						48
Dividends to Clorox stockholders ($1.11 per share declared)			—						—						—						(141)						—						—						—						—						(141)
Dividends to non-controlling interests			—						—						—						—						—						—						—						(2)						(2)
Stock-based compensation			—						—						22						—						—						—						—						—						22
Other employee stock plan activities			—						—						8						(16)						89						667						—						—						81
Treasury stock purchased			—						—						—						—						(200)						(980)						—						—						(200)
Treasury stock retirement (1)			(28)						(28,000)						—						(2,640)						2,668						28,000						—						—						—
Balance as of December 31, 2020			$	131					130,741						$	1,176					$	1,302					$	(850)					(5,017)						$	(575)					$	196					$	1,380
Balance as of September 30, 2021			$	131					130,741						$	1,166					$	1,027					$	(1,389)					(7,885)						$	(567)					$	179					$	547
Net earnings			—						—						—						69						—						—						—						3						72
Other comprehensive (loss) income			—						—						—						—						—						—						(7)						—						(7)
Dividends to Clorox stockholders ($1.16 per share declared)			—						—						—						(144)						—						—						—						—						(144)
Dividends to non-controlling interests			—						—						—						—						—						—						—						(4)						(4)
Stock-based compensation			—						—						16						—						—						—						—						—						16
Other employee stock plan activities			—						—						(2)						(3)						16						108						—						—						11
Balance as of December 31, 2021			$	131					130,741						$	1,180					$	949					$	(1,373)					(7,777)						$	(574)					$	178					$	491

NOTE 9. STOCKHOLDERS’ EQUITY (Continued)

			Six Months Ended December 31
(Dollars in millions except per share data; shares in thousands)			Common Stock												Additional Paid-in Capital						Retained Earnings						Treasury Stock												Accumulated Other Comprehensive Net (Loss) Income						Non-controlling interests						Total Stockholders’ Equity
Amount						Shares												Amount						Shares
Balance as of June 30, 2020			$	159					158,741						$	1,137					$	3,567					$	(3,315)					(32,543)						$	(640)					$	—					$	908
Net earnings			—						—						—						674						—						—						—						4						678
Other comprehensive (loss) income			—						—						—						—						—						—						65						—						65
Dividends to Clorox stockholders ($2.22 per share declared)			—						—						—						(282)						—						—						—						—						(282)
Dividends to noncontrolling interests			—						—						—						—						—						—						—						(6)						(6)
Business combinations including purchase accounting adjustments			—						—						—						—						—						—						—						198						198
Stock-based compensation			—						—						35						—						—						—						—						—						35
Other employee stock plan activities			—						—						4						(17)						97						950						—						—						84
Treasury stock purchased			—						—						—						—						(300)						(1,424)						—						—						(300)
Treasury stock retirement (1)			(28)						(28,000)						—						(2,640)						2,668						28,000						$	—					—						—
Balance as of December 31, 2020			$	131					130,741						$	1,176					$	1,302					$	(850)					(5,017)						$	(575)					$	196					$	1,380
Balance as of June 30, 2021			$	131					130,741						$	1,186					$	1,036					$	(1,396)					(7,961)						$	(546)					$	181					$	592
Net earnings			—						—						—						211						—						—						—						4						215
Other comprehensive (loss) income			—						—						—						—						—						—						(28)						—						(28)
Dividends to Clorox stockholders ($2.32 per share declared)			—						—						—						(287)						—						—						—						—						(287)
Dividends to noncontrolling interests			—						—						—						—						—						—						—						(7)						(7)
Stock-based compensation			—						—						25						—						—						—						—						—						25
Other employee stock plan activities			—						—						(31)						(11)						48						336						—						—						6
Treasury stock purchased			—						—						—						—						(25)						(152)						—						—						(25)
Balance as of December 31, 2021			$	131					130,741						$	1,180					$	949					$	(1,373)					(7,777)						$	(574)					$	178					$	491

(1) On November 18, 2020 the Company retired 28 million shares of its treasury stock. These shares are now authorized but unissued. There was no effect on the Company’s overall equity position as a result of the retirement.

NOTE 9. STOCKHOLDERS’ EQUITY (Continued)

Changes in Accumulated other comprehensive net (loss) income attributable to Clorox by component were as follows for the periods indicated:

			Three Months Ended December 31
			Foreign currency translation adjustments						Net unrealized gains (losses) on derivatives						Pension and postretirement benefit adjustments						Accumulated other comprehensive net (loss) income
Balance as of September 30, 2020			$	(440)					$	(13)					$	(170)					$	(623)
Other comprehensive (loss) income before reclassifications			36						11						—						47
Amounts reclassified from Accumulated other comprehensive net (loss) income			—						2						2						4
Income tax benefit (expense)			1						(3)						(1)						(3)
Net current period other comprehensive (loss) income			37						10						1						48
Balance as of December 31, 2020			$	(403)					$	(3)					$	(169)					$	(575)
Balance as of September 30, 2021			$	(426)					$	22					$	(163)					$	(567)
Other comprehensive (loss) income before reclassifications			(5)						(1)						—						(6)
Amounts reclassified from Accumulated other comprehensive net (loss) income			—						(4)						2						(2)
Income tax benefit (expense), and other			—						1						—						1
Net current period other comprehensive (loss) income			(5)						(4)						2						(7)
Balance as of December 31, 2021			$	(431)					$	18					$	(161)					$	(574)
			Six Months Ended December 31
			Foreign currency translation adjustments						Net unrealized gains (losses) on derivatives						Pension and postretirement benefit adjustments						Accumulated other comprehensive net (loss) income
Balance as of June 30, 2020			$	(450)					$	(18)					$	(172)					$	(640)
Other comprehensive (loss) income before reclassifications			45						14						—						59
Amounts reclassified from Accumulated other comprehensive net (loss) income			—						5						4						9
Income tax benefit (expense)			2						(4)						(1)						(3)
Net current period other comprehensive (loss) income			47						15						3						65
Balance as of December 31, 2020			$	(403)					$	(3)					$	(169)					$	(575)
Balance as of June 30, 2021			$	(403)					$	21					$	(164)					$	(546)
Other comprehensive (loss) income before reclassifications			(28)						3						—						(25)
Amounts reclassified from Accumulated other comprehensive net (loss) income			—						(7)						4						(3)
Income tax benefit (expense), and other			—						1						(1)						—
Net current period other comprehensive (loss) income			(28)						(3)						3						(28)
Balance as of December 31, 2021			$	(431)					$	18					$	(161)					$	(574)

Included in foreign currency translation adjustments are remeasurement losses on long-term intercompany loans where settlement is not planned or anticipated in the foreseeable future. There were no amounts associated with these loans reclassified from Accumulated other comprehensive net (loss) income for the periods presented.

NOTE 10. EMPLOYEE BENEFIT PLANS

The following table summarizes the components of net periodic benefit cost for the Company’s retirement income plans:

			Three Months Ended												Six Months Ended
			12/31/2021						12/31/2020						12/31/2021						12/31/2020
Service cost			$	—					$	—					$	—					$	—
Interest cost			4						3						8						7
Expected return on plan assets (1)			(3)						(3)						(7)						(7)
Amortization of unrecognized items			2						2						4						5
Total			$	3					$	2					$	5					$	5

(1) The weighted average long-term expected rate of return on plan assets used in computing the fiscal year 2022 net periodic benefit cost is 3.0%.

The net periodic benefit cost for the Company’s retirement health care plans was $0 for both the three and six months ended December 31, 2021, and $(1) for both the three and six months ended December 31, 2020.

During the three months ended December 31, 2021 and 2020, the Company made $2 in contributions to its domestic retirement income plans. During the six months ended December 31, 2021 and 2020, the Company made $5 and $4 in contributions to its domestic retirement income plans, respectively.

Service cost component of the net periodic benefit cost, if any, is reflected in employee benefit costs, all other components are reflected in Other (income) expense, net.

NOTE 11. OTHER CONTINGENCIES AND GUARANTEES

Contingencies

The Company is involved in certain environmental matters, including response actions at various locations. The Company had recorded liabilities totaling $28 as of both December 31, 2021 and June 30, 2021, for its share of aggregate future remediation costs related to these matters.

One matter, which accounted for $14 of the recorded liability as of both December 31, 2021 and June 30, 2021, relates to environmental costs associated with one of the Company’s former operations at a site located in Alameda County, California. In November 2016, at the request of regulators and with the assistance of environmental consultants, the Company submitted a Feasibility Study that evaluated various options for managing the site and included estimates of the related costs. Following further discussions with the regulators in 2017, the Company recorded an undiscounted liability for costs estimated to be incurred over a 30-year period, based on one of the options in the Feasibility Study. In September 2021, as a result of an additional study and further discussions with regulators, the Company submitted a Soil Vapor Intrusion Report to the regulators, which has not resulted in a change to the recorded liability. While the Company believes its latest estimates of remediation costs are reasonable, the ultimate remediation requirements are not yet finalized and the regulators could require the Company to implement remediation actions for a longer period or take additional actions, which could include estimated undiscounted costs of up to approximately $28 over an estimated 30-year period, or require the Company to take different actions and incur additional costs.

Another matter in Dickinson County, Michigan, at the site of one of the Company’s former operations for which the Company is jointly and severally liable, accounted for $10 of the recorded liability, as of both December 31, 2021 and June 30, 2021. This amount reflects the Company’s agreement to be liable for 24.3% of the aggregate remediation and associated costs for this matter pursuant to a cost-sharing arrangement with a third party. If the third party is unable to pay its share of the response and remediation obligations, the Company may be responsible for such obligations. With the assistance of environmental consultants, the Company maintains an undiscounted liability representing its current best estimate of its share of the capital expenditures, maintenance and other costs that may be incurred over an estimated 30-year remediation period. Although it is reasonably possible that the Company’s exposure may exceed the amount recorded for the Dickinson County matter, any amount of such additional exposures, or range of exposures, is not estimable at this time.

The Company’s estimated losses related to these matters are sensitive to a variety of uncertain factors, including the efficacy of any remediation efforts, changes in any remediation requirements and the future availability of alternative clean-up technologies. The Company is subject to various legal proceedings, claims and other loss contingencies, including, without limitation, loss contingencies relating to contractual arrangements, product liability, patents and trademarks, advertising, labor and employment, environmental, health and safety and other matters. With respect to these proceedings, claims and other loss contingencies, while considerable uncertainty exists, in the opinion of management at this time, the ultimate disposition of these matters, to the extent not previously provided for, will not have a material adverse effect, either individually or in the aggregate, on the Company’s condensed consolidated financial statements taken as a whole.

Guarantees

In conjunction with divestitures and other transactions, the Company may provide typical indemnifications (e.g., indemnifications for representations and warranties and retention of previously existing environmental, tax and employee liabilities) that have terms that vary in duration and in the potential amount of the total obligation and, in many circumstances, are not explicitly defined. The Company has not made, nor does it believe that it is probable that it will make, any material payments relating to its indemnifications, and believes that any reasonably possible payments would not have a material adverse effect, either individually or in the aggregate, on the Company’s condensed consolidated financial statements taken as a whole.

The Company had not recorded any material liabilities on the aforementioned guarantees as of both December 31, 2021 and June 30, 2021.

As of December 31, 2021, the Company was party to a letter of credit of $14, related to one of its insurance carriers, of which $0 had been drawn upon.

NOTE 12. SEGMENT RESULTS

The Company operates through strategic business units (SBUs) that are also the Company’s operating segments. The SBUs are then aggregated into four reportable segments: Health and Wellness, Household, Lifestyle and International.

Certain non-allocated administrative costs, interest income, interest expense and various other non-operating income and expenses are reflected in Corporate. Corporate assets include cash and cash equivalents, prepaid expenses and other current assets, property and equipment, operating lease right-of-use assets, other long-term assets and deferred taxes.

The tables below present reportable segment information and a reconciliation of the segment information to the Company’s consolidated net sales and earnings before income taxes, with amounts that are not allocated to the reportable segments reflected in Corporate.

						Net sales
						Three Months Ended												Six Months Ended
						12/31/2021						12/31/2020						12/31/2021						12/31/2020
Health and Wellness						$	648					$	817					$	1,393					$	1,630
Household						423						411						865						911
Lifestyle						324						317						655						635
International						296						297						584						582
Corporate						—						—						—						—
Total						$	1,691					$	1,842					$	3,497					$	3,758
						Earnings (losses) before income taxes
						Three Months Ended												Six Months Ended
						12/31/2021						12/31/2020						12/31/2021						12/31/2020
Health and Wellness						$	56					$	247					$	161					$	498
Household						10						60						46						169
Lifestyle						80						89						173						191
International						19						30						49						154
Corporate						(72)						(94)						(151)						(154)
Total						$	93					$	332					$	278					$	858

All intersegment sales are eliminated and are not included in the Company’s reportable segments’ net sales.

Net sales to the Company’s largest customer, Wal-Mart Stores, Inc. and its affiliates, as a percentage of consolidated net sales, were 25% for the three and six months ended December 31, 2021, and 23% and 24% for the three and six months ended December 31, 2020, respectively.

NOTE 12. SEGMENT RESULTS (Continued)

The following table provides Net sales as a percentage of the Company’s consolidated net sales, disaggregated by SBU, for the periods indicated:

						Net sales
						Three Months Ended												Six Months Ended
						12/31/2021						12/31/2020						12/31/2021						12/31/2020
Cleaning						29		%				33		%				31		%				31		%
Professional Products						5		%				8		%				5		%				8		%
Vitamins, Minerals and Supplements						4		%				4		%				4		%				4		%
Health and Wellness						38		%				45		%				40		%				43		%
Bags and Wraps						13		%				11		%				12		%				11		%
Cat Litter						8		%				7		%				7		%				7		%
Grilling						4		%				4		%				5		%				7		%
Household						25		%				22		%				24		%				25		%
Food Products						10		%				9		%				10		%				9		%
Natural Personal Care						5		%				4		%				5		%				4		%
Water Filtration						4		%				4		%				4		%				4		%
Lifestyle						19		%				17		%				19		%				17		%
International						18		%				16		%				17		%				15		%
Total						100		%				100		%				100		%				100		%