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
						9/30/2022									9/30/2021
Net sales						$			1,740						$			1,806
Cost of products sold									1,114									1,136
Gross profit									626									670
Selling and administrative expenses									261									236
Advertising costs									161									182
Research and development costs									32									33
Interest expense									22									25
Other (income) expense, net									34									9
Earnings before income taxes									116									185
Income taxes									29									42
Net earnings									87									143
Less: Net earnings attributable to noncontrolling interests									2									1
Net earnings attributable to Clorox						$			85						$			142
Net earnings per share attributable to Clorox
Basic net earnings per share						$			0.69						$			1.15
Diluted net earnings per share						$			0.68						$			1.14
Weighted average shares outstanding (in thousands)
Basic									123,339									122,980
Diluted									123,914									124,042
Comprehensive income						$			51						$			122
Less: Total comprehensive income attributable to noncontrolling interests									2									1
Total comprehensive income attributable to Clorox						$			49						$			121

See Notes to Condensed Consolidated Financial Statements (Unaudited)

The Clorox Company

Condensed Consolidated Balance Sheets

(Dollars in millions, except per share data)

			9/30/2022									6/30/2022
			(Unaudited)
ASSETS
Current assets
Cash and cash equivalents			$			278						$			183
Receivables, net						612									681
Inventories, net						755									755
Prepaid expenses and other current assets						118									106
Total current assets						1,763									1,725
Property, plant and equipment, net of accumulated depreciation and amortization of $2,575 and $2,530, respectively						1,322									1,334
Operating lease right-of-use assets						336									342
Goodwill						1,546									1,558
Trademarks, net						685									687
Other intangible assets, net						190									197
Other assets						311									315
Total assets			$			6,153						$			6,158
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Notes and loans payable			$			348						$			237
Current operating lease liabilities						78									78
Accounts payable and accrued liabilities						1,584									1,469
Total current liabilities						2,010									1,784
Long-term debt						2,475									2,474
Long-term operating lease liabilities						308									314
Other liabilities						805									791
Deferred income taxes						59									66
Total liabilities						5,657									5,429
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 September 30, 2022 and June 30, 2022; and 123,355,986 and 123,152,132 shares outstanding as of September 30, 2022 and June 30, 2022, respectively						131									131
Additional paid-in capital						1,193									1,202
Retained earnings						832									1,048
Treasury stock, at cost: 7,385,475 and 7,589,329 shares as of September 30, 2022 and June 30, 2022, respectively						(1,315)									(1,346)
Accumulated other comprehensive net (loss) income						(515)									(479)
Total Clorox stockholders’ equity						326									556
Noncontrolling interests						170									173
Total stockholders’ equity						496									729
Total liabilities and stockholders’ equity			$			6,153						$			6,158

See Notes to Condensed Consolidated Financial Statements (Unaudited)

The Clorox Company

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in millions)

			Three Months Ended
			9/30/2022									9/30/2021
Operating activities:
Net earnings			$			87						$			143
Adjustments to reconcile net earnings to net cash provided by operations:
Depreciation and amortization						56									55
Stock-based compensation						10									9
Deferred income taxes						(5)									2
Other						16									8
Changes in:
Receivables, net						63									(53)
Inventories, net						(6)									(37)
Prepaid expenses and other current assets						(30)									(14)
Accounts payable and accrued liabilities						(28)									(96)
Operating lease right-of-use assets and liabilities, net						1									—
Income taxes payable / prepaid						14									24
Net cash provided by operations						178									41
Investing activities:
Capital expenditures						(46)									(52)
Other						1									(4)
Net cash used for investing activities						(45)									(56)
Financing activities:
Notes and loans payable, net						111									86
Treasury stock purchased						—									(25)
Cash dividends paid to Clorox stockholders						(145)									(142)
Issuance of common stock for employee stock plans and other						(1)									(11)
Net cash used for financing activities						(35)									(92)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash						(4)									(3)
Net increase (decrease) in cash, cash equivalents, and restricted cash						94									(110)
Cash, cash equivalents, and restricted cash:
Beginning of period						186									324
End of period			$			280						$			214

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 months ended September 30, 2022 and 2021, 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 or Clorox) 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, 2022, which includes a complete set of footnote disclosures, including the Company’s significant accounting policies.

Restructuring Liabilities

The Company incurs restructuring costs in connection with workforce reductions; consolidation or closure of a facility; sale or termination of a line of business; and other actions. Such costs include employee termination benefits (one-time arrangements and benefits attributable to prior service), termination of contractual obligations, non-cash asset charges and other direct incremental costs.

The Company records employee termination liabilities once they are both probable and estimable for severance provided under the Company’s existing severance policy. Employee termination liabilities outside of the Company’s existing severance policy are recognized at the time relevant employees are notified, unless the employees will be retained to render service beyond a minimum retention period for transition purposes, in which case the liability is recognized ratably over the future service period. Other costs associated with a restructuring plan or exit or disposal activities, such as consulting and professional fees, facility exit costs, employee relocation, outplacement costs, accelerated depreciation or asset impairments associated with a restructuring plan, are recognized in the period in which the liability is incurred or the asset is impaired.

Recently Issued Accounting Standards

Recently Issued Accounting Standards Not Yet Adopted

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-04, "Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” These amendments require disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations. 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. As these amendments relate to disclosures only, there were no impacts expected to the Company’s consolidated results of operations, financial position and cash flows.

NOTE 2. RESTRUCTURING AND RELATED COSTS

In the first quarter of fiscal year 2023, the Company began recognizing costs related to a plan that involves streamlining its operating model to meet its objectives of driving growth and productivity. The streamlined operating model is expected to enhance the Company’s ability to respond more quickly to changing consumer behaviors and innovate faster. The Company anticipates the implementation of this new model will be completed in fiscal year 2024, with different phases occurring throughout the implementation period.

The Company anticipates incurring approximately $75 to $100 of costs in fiscal years 2023 and 2024 related to this initiative, of which approximately $35 is expected to be incurred in fiscal year 2023. Related costs are primarily expected to include employee-related costs to reduce certain staffing levels such as severance payments, as well as for consulting and other costs. Costs incurred are expected to be settled primarily in cash.

Restructuring and related implementation costs, net were $19 for the three months ended September 30, 2022. The following table summarizes the total restructuring and related implementation costs, net associated with the Company’s streamlined operating model plan as reflected in the Consolidated Statements of Earnings and Comprehensive Income.

			Three Months Ended
			9/30/2022
Costs of products sold			$	(1)
Selling and administrative expenses			1
Other (income) expense, net:
Employee-related costs			19
Total, net			$	19

Employee-related costs primarily include severance and other termination benefits calculated based on salary levels, prior service and statutory requirements. Other costs primarily include consulting fees incurred for the organizational design and implementation of the future streamlined operating model, related processes and other professional fees incurred.

Charges for restructuring and related implementation costs are recorded in the Corporate segment as these initiatives are centrally directed and controlled and are not included in internal measures of segment operating performance.

The Company may, from time to time, decide to pursue additional restructuring-related initiatives that involve costs in future periods.

The following table reconciles the accrual for the streamlined operating model restructuring and related implementation costs discussed above, which are recorded within Accounts payable and accrued liabilities in the Consolidated Balance Sheets:

			Employee-Related Costs						Other						Total
Accrual Balance as of June 30, 2022			$	—					$	—					$	—
Charges			19						3						22
Cash payments			—						—						—
Accrual Balance as of September 30, 2022			$	19					$	3					$	22

NOTE 3. INVENTORIES, NET

Inventories, net, consisted of the following as of:

			9/30/2022						6/30/2022
Finished goods			$	639					$	593
Raw materials and packaging			200						191
Work in process			15						16
LIFO allowances			(94)						(40)
Total inventories, net			$	760					$	760
Less: Noncurrent inventories, net (1)			5						5
Total current inventories, net			$	755					$	755

(1) Noncurrent inventories, net is recorded in Other assets.

NOTE 4. 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 futures, options and swap contracts to limit the impact of price volatility on a portion of its forecasted raw material requirements. These commodity derivatives may be exchange traded or over-the-counter contracts and are generally for a period of no longer than two years. Commodity purchase and options 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 September 30, 2022, and June 30, 2022, the notional amount of commodity derivatives was $30 and $27, respectively, which related primarily to exposures in soybean oil used for the Food products business and jet fuel used for the Grilling business.

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 two 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 $13 and $31 as of September 30, 2022 and June 30, 2022, respectively.

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 three years. The interest rate contracts are measured at fair value using information quoted by bond dealers.

The Company held no interest rate contracts as of September 30, 2022 and June 30, 2022.

Commodity, Foreign Exchange and Interest Rate Derivatives

The Company designates its commodity forward, futures and options 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.

NOTE 4. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

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
			9/30/2022						9/30/2021
Commodity purchase derivative contracts			$	(3)					$	—
Foreign exchange derivative contracts			1						1
Interest rate derivative contracts			—						3
Total			$	(2)					$	4

			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
						9/30/2022						9/30/2021
Commodity purchase derivative contracts			Cost of products sold			$	4					$	5
Foreign exchange derivative contracts			Cost of products sold			1						—
Interest rate derivative contracts			Interest expense			3						(2)
Total						$	8					$	3

The estimated amount of the existing net gain (loss) in Accumulated other comprehensive net (loss) income as of September 30, 2022 that is expected to be reclassified into Net earnings within the next twelve months is $11.

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 September 30, 2022 and June 30, 2022, none contained such terms. As of both September 30, 2022 and June 30, 2022, 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 Company’s 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 September 30, 2022 and June 30, 2022, the Company and each of its counterparties had been assigned investment grade ratings by both Standard & Poor’s and Moody’s.

Certain of the Company’s exchange traded futures and options 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 September 30, 2022 and June 30, 2022, the Company maintained cash margin balances related to exchange traded futures and options contracts of $2 and $1, respectively, which are classified as Prepaid expenses and other current assets on the condensed consolidated balance sheets.

NOTE 4. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

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 September 30, 2022 and June 30, 2022, 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:

															9/30/2022												6/30/2022
			Balance Sheet Classification						Fair Value Hierarchy Level						Carrying Amount						Estimated Fair Value						Carrying Amount						Estimated Fair Value
Assets
Commodity purchase options contracts			Prepaid expenses and other current assets						1						$	1					$	1					$	—					$	—
Commodity purchase swaps contracts			Prepaid expenses and other current assets						2						2						2						6						6
Foreign exchange forward contracts			Prepaid expenses and other current assets						2						1						1						1						1
															$	4					$	4					$	7					$	7
Liabilities
Commodity purchase futures contracts			Accounts payable and accrued liabilities						1						1						1						1						1
															$	1					$	1					$	1					$	1

NOTE 4. 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:

															9/30/2022												6/30/2022
			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						$	168					$	168					$	86					$	86
Time deposits			Cash and cash equivalents (1)						2						4						4						4						4
Trust assets for nonqualified deferred compensation plans			Other assets						1						118						118						119						119
															$	290					$	290					$	209					$	209
Liabilities
Notes and loans payable			Notes and loans payable (2)						2						$	348					$	348					$	237					$	237
Current maturities of long-term debt and Long-term debt			Current maturities of long- term debt and Long-term debt (3)						2						2,475						2,258						2,474						2,386
															$	2,823					$	2,606					$	2,711					$	2,623

(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 and/or amounts drawn on the Company’s credit agreements, all of 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 5. 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 25.0% and 22.6% for the three months ended September 30, 2022 and 2021, respectively.

The Inflation Reduction Act (the “Act”) was signed into law on August 16, 2022. The Act introduces a new 15% corporate minimum tax for certain large corporations that becomes effective at the beginning of the Company’s fiscal 2024 and it imposes a 1% excise tax on the value of share repurchases, net of new share issuances, after December 31, 2022. These provisions, as well as the other corporate tax changes included in the Act, are not expected to have a material impact on the Company’s financial statements.

NOTE 6. 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
			9/30/2022						9/30/2021
Basic			123,339						122,980
Dilutive effect of stock options and other			575						1,062
Diluted			123,914						124,042
Antidilutive stock options and other			2,983						1,068

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

NOTE 7. COMPREHENSIVE INCOME (LOSS)

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

			Three Months Ended
			9/30/2022						9/30/2021
Net earnings			$	87					$	143
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments			(29)						(23)
Net unrealized gains (losses) on derivatives			(8)						1
Pension and postretirement benefit adjustments			1						1
Total other comprehensive (loss) income, net of tax			(36)						(21)
Comprehensive income			51						122
Less: Total comprehensive income attributable to noncontrolling interests			2						1
Total comprehensive income attributable to Clorox			$	49					$	121

NOTE 8. STOCKHOLDERS’ EQUITY

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

			Three Months Ended September 30
(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, 2021			$	131					130,741						$	1,186					$	1,036					$	(1,396)					(7,961)						$	(546)					$	181					$	592
Net earnings			—						—						—						142						—						—						—						1						143
Other comprehensive (loss) income			—						—						—						—						—						—						(21)						—						(21)
Dividends to Clorox stockholders ($1.16 per share declared)			—						—						—						(143)						—						—						—						—						(143)
Dividends to noncontrolling interests			—						—						—						—						—						—						—						(3)						(3)
Stock-based compensation			—						—						9						—						—						—						—						—						9
Other employee stock plan activities			—						—						(29)						(8)						32						228						—						—						(5)
Treasury stock purchased			—						—						—						—						(25)						(152)						—						—						(25)
Balance as of September 30, 2021			$	131					130,741						$	1,166					$	1,027					$	(1,389)					(7,885)						$	(567)					$	179					$	547
Balance as of June 30, 2022			$	131					130,741						$	1,202					$	1,048					$	(1,346)					(7,589)						$	(479)					$	173					$	729
Net earnings			—						—						—						85						—						—						—						2						87
Other comprehensive (loss) income			—						—						—						—						—						—						(36)						—						(36)
Dividends to Clorox stockholders ($2.36 per share declared)			—						—						—						(293)						—						—						—						—						(293)
Dividends to noncontrolling interests			—						—						—						—						—						—						—						(5)						(5)
Stock-based compensation			—						—						10						—						—						—						—						—						10
Other employee stock plan activities			—						—						(19)						(8)						31						204						—						—						4
Balance as of September 30, 2022			$	131					130,741						$	1,193					$	832					$	(1,315)					(7,385)						$	(515)					$	170					$	496

NOTE 8. 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 September 30
			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, 2021			$	(403)					$	21					$	(164)					$	(546)
Other comprehensive (loss) income before reclassifications			(22)						4						—						(18)
Amounts reclassified from Accumulated other comprehensive net (loss) income			—						(3)						2						(1)
Income tax benefit (expense)			(1)						—						(1)						(2)
Net current period other comprehensive (loss) income			(23)						1						1						(21)
Balance as of September 30, 2021			$	(426)					$	22					$	(163)					$	(567)
Balance as of June 30, 2022			$	(448)					$	121					$	(152)					$	(479)
Other comprehensive (loss) income before reclassifications			(29)						(2)						—						(31)
Amounts reclassified from Accumulated other comprehensive net (loss) income			—						(8)						1						(7)
Income tax benefit (expense), and other			—						2						—						2
Net current period other comprehensive (loss) income			(29)						(8)						1						(36)
Balance as of September 30, 2022			$	(477)					$	113					$	(151)					$	(515)

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 9. EMPLOYEE BENEFIT PLANS

The Company has a domestic qualified pension plan (the Plan). The Plan is frozen for all participants. The Plan generally was frozen effective June 30, 2011 for all employees, except for certain collectively bargained employees, whose Plan freeze was effective January 1, 2019. As a result of the Plan freeze, no employees are eligible to commence participation in the Plan or accrue any additional benefits under the Plan.

On May 17, 2022, the Company’s Board of Directors approved a resolution to terminate the Plan. The amendment will allow the settlement of the pension obligation with either a lump sum payout or a purchased annuity. It is expected to take 18 to 24 months to complete the termination from the date of the approved resolution to terminate the Plan. The completion of the process of offering and accepting lump sum elections are dependent on when certain regulatory approvals are obtained. Currently, there is not enough information available to determine the ultimate charge of the termination. The Plan is fully funded under specified Employee Retirement Income Security Act (ERISA) funding rules as of September 30, 2022.

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

			Three Months Ended
			9/30/2022						9/30/2021
Interest cost			$	5					$	4
Expected return on plan assets (1)			(3)						(4)
Amortization of unrecognized items			2						2
Total			$	4					$	2

(1) The weighted average long-term expected rate of return on plan assets used in computing the fiscal year 2023 net periodic benefit cost is 2.7%.

The net periodic benefit cost for the Company’s retirement health care plans was $0 for both the three months ended September 30, 2022 and 2021.

During the three months ended September 30, 2022 and 2021, the Company made $2 and $3 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 10. 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 $27 and $28 as of September 30, 2022 and June 30, 2022, respectively, for its share of aggregate future remediation costs related to these matters.

One matter, which accounted for $13 and $14 of the recorded liability as of September 30, 2022 and June 30, 2022, respectively, 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 $9 of the recorded liability as of both September 30, 2022 and June 30, 2022. 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 agreement 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

NOTE 10: OTHER CONTINGENCIES AND GUARANTEES (continued)

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 (including costs connected to the transition and unwinding of certain supply and manufacturing relationships), 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 as of both September 30, 2022 and June 30, 2022.

The Company was a party to letters of credit of $15 as of September 30, 2022, primarily related to its insurance carriers, of which $0 had been drawn upon.

NOTE 11. 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 (losses) before income taxes, with amounts that are not allocated to the reportable segments reflected in Corporate.

						Net sales
						Three Months Ended
						9/30/2022						9/30/2021
Health and Wellness						$	712					$	745
Household						423						442
Lifestyle						320						331
International						285						288
Total						$	1,740					$	1,806
						Earnings (losses) before income taxes
						Three Months Ended
						9/30/2022						9/30/2021
Health and Wellness						$	115					$	105
Household						22						36
Lifestyle						60						93
International						23						30
Corporate (1)						(104)						(79)
Total						$	116					$	185

(1) The earnings (losses) before income taxes for Corporate includes restructuring and related implementation costs, net for the streamlined operating model of $19 for the three-months ended September 30, 2022. While recorded within the Corporate segment, for informational purposes the following table provides the approximate restructuring and related implementation costs, net corresponding to the Company’s reportable segments as a percentage of the total costs:

									Three Months Ended
									9/30/2022
			Health and Wellness						6		%
			Household						—
			Lifestyle						5
			International						19
			Corporate						70
			Total						100		%

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, Walmart Inc. and its affiliates, as a percentage of consolidated net sales, were 27% and 25% for the three months ended September 30, 2022 and 2021, respectively.

NOTE 11. 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
						9/30/2022									9/30/2021
Cleaning						33			%						33			%
Professional Products						5									5
Vitamins, Minerals and Supplements						3									3
Health and Wellness						41			%						41			%
Bags and Wraps						11									12
Grilling						5									6
Cat Litter						8									7
Household						24			%						25			%
Food						10									9
Natural Personal Care						4									4
Water Filtration						5									5
Lifestyle						19			%						18			%
International						16			%						16			%
Total						100			%						100			%