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
						9/30/2023									9/30/2022
Net sales						$			1,386						$			1,740
Cost of products sold									854									1,114
Gross profit									532									626
Selling and administrative expenses									276									261
Advertising costs									165									161
Research and development costs									29									32
Interest expense									21									22
Other (income) expense, net									12									34
Earnings before income taxes									29									116
Income tax expense									4									29
Net earnings									25									87
Less: Net earnings attributable to noncontrolling interests									3									2
Net earnings attributable to Clorox						$			22						$			85
Net earnings per share attributable to Clorox
Basic net earnings per share						$			0.17						$			0.69
Diluted net earnings per share						$			0.17						$			0.68
Weighted average shares outstanding (in thousands)
Basic									123,973									123,339
Diluted									124,650									123,914
Comprehensive income						$			24						$			51
Less: Total comprehensive income attributable to noncontrolling interests									3									2
Total comprehensive income attributable to Clorox						$			21						$			49

See Notes to Condensed Consolidated Financial Statements (Unaudited)

The Clorox Company

Condensed Consolidated Balance Sheets

(Dollars in millions, except per share data)

			9/30/2023									6/30/2023
			(Unaudited)
ASSETS
Current assets
Cash and cash equivalents			$			518						$			367
Receivables, net						581									688
Inventories, net						710									696
Prepaid expenses and other current assets						102									77
Total current assets						1,911									1,828
Property, plant and equipment, net of accumulated depreciation and amortization of $2,768 and $2,705, respectively						1,317									1,345
Operating lease right-of-use assets						328									346
Goodwill						1,246									1,252
Trademarks, net						541									543
Other intangible assets, net						162									169
Other assets						486									462
Total assets			$			5,991						$			5,945
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Notes and loans payable			$			347						$			50
Current operating lease liabilities						88									87
Accounts payable and accrued liabilities						1,678									1,659
Income taxes payable						115									121
Total current liabilities						2,228									1,917
Long-term debt						2,478									2,477
Long-term operating lease liabilities						290									310
Other liabilities						837									825
Deferred income taxes						27									28
Total liabilities						5,860									5,557
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, 2023 and June 30, 2023; and 124,001,348 and 123,820,022 shares outstanding as of September 30, 2023 and June 30, 2023, respectively						131									131
Additional paid-in capital						1,246									1,245
Retained earnings						299									583
Treasury stock, at cost: 6,740,113 and 6,921,439 shares as of September 30, 2023 and June 30, 2023, respectively						(1,219)									(1,246)
Accumulated other comprehensive net (loss) income						(494)									(493)
Total Clorox stockholders’ (deficit) equity						(37)									220
Noncontrolling interests						168									168
Total stockholders’ equity						131									388
Total liabilities and stockholders’ equity			$			5,991						$			5,945

See Notes to Condensed Consolidated Financial Statements (Unaudited)

The Clorox Company

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in millions)

			Three months ended
			9/30/2023									9/30/2022
Operating activities:
Net earnings			$			25						$			87
Adjustments to reconcile net earnings to net cash provided by operations:
Depreciation and amortization						61									56
Stock-based compensation						13									10
Deferred income taxes						(5)									(5)
Other						1									16
Changes in:
Receivables, net						108									63
Inventories, net						(14)									(6)
Prepaid expenses and other current assets						(22)									(30)
Accounts payable and accrued liabilities						(138)									(28)
Operating lease right-of-use assets and liabilities, net						(1)									1
Income taxes payable / prepaid						(8)									14
Net cash provided by operations						20									178
Investing activities:
Capital expenditures						(24)									(46)
Other						1									1
Net cash used for investing activities						(23)									(45)
Financing activities:
Notes and loans payable, net						298									111
Cash dividends paid to Clorox stockholders						(149)									(145)
Issuance of common stock for employee stock plans and other						6									(1)
Net cash provided by (used for) financing activities						155									(35)
Effect of exchange rate changes on cash, cash equivalents and restricted cash						—									(4)
Net increase (decrease) in cash, cash equivalents and restricted cash						152									94
Cash, cash equivalents and restricted cash:
Beginning of period						368									186
End of period			$			520						$			280

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, 2023 and 2022, in the opinion of management, reflect all normal and recurring adjustments considered 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, 2023, which includes a complete set of footnote disclosures, including the Company’s significant accounting policies.

Recently Adopted Accounting Standards

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. The Company adopted the standard as of July 1, 2023. The adoption relates to disclosures only and does not have an impact on the condensed consolidated financial statements, results of operations, or cash flows.

NOTE 2. CYBERATTACK

On Monday, August 14, 2023, the Company disclosed it had identified unauthorized activity on some of its Information Technology (IT) systems. That activity began on Friday, August 11, 2023 and after becoming aware of it that evening, the Company immediately began taking steps to stop and remediate the activity. The Company also took certain systems offline and engaged third-party cybersecurity experts to support its investigation and recovery efforts. The Company implemented its business continuity plans, including manual ordering and processing procedures at a reduced rate of operations in order to continue servicing its customers. However, the incident resulted in wide-scale disruptions to the Company’s business operations throughout the remainder of the quarter.

The impacts of these system disruptions included order processing delays and significant product outages, resulting in a negative impact on net sales and earnings. The Company has since transitioned back to automated order processing and the vast majority of orders are taking place in an automated manner. The Company expects to experience ongoing, but lessening, operational impacts in the second quarter as it makes progress in returning to normalized operations.

The Company also incurred incremental expenses of approximately $24 as a result of the cyberattack for the three months ended September 30, 2023. The following table summarizes the recognition of costs in the condensed consolidated statement of earnings and comprehensive income:

			Three months ended
			9/30/2023
Costs of products sold			$	11
Selling and administrative expenses			13
Total			$	24

The costs incurred relate primarily to third-party consulting services, including IT recovery and forensic experts and other professional services incurred to investigate and remediate the attack, as well as incremental operating costs incurred from the resulting disruption to the Company’s business operations. The Company expects to incur additional costs related to the

NOTE 2. CYBERATTACK (Continued)

cyberattack in future periods. The Company has not recognized any insurance proceeds in the three months ended September 30, 2023 related to the cyberattack. The timing of recognizing insurance recoveries, if any, may differ from the timing of recognizing the associated expenses.

NOTE 3. SUPPLY CHAIN FINANCING PROGRAM

The Company has arranged for a global financial institution to offer a voluntary supply chain finance (SCF) program for the benefit of the Company’s suppliers. The Company’s current payment terms do not exceed 120 days in keeping with industry standards. The SCF program enables suppliers to directly contract with the financial institution to receive payment from the financial institution prior to the payment terms between the Company and the supplier by selling the Company’s payables to the financial institution. Participation in the program is at the sole discretion of the supplier and the Company has no economic interest in a supplier's decision to enter into the agreement and has no direct financial relationship with the financial institution, as it relates to the SCF program. Once a supplier elects to participate in the SCF program and reaches an agreement with the financial institution, the supplier elects which individual Company invoices to sell to the financial institution. The terms of the Company’s payment obligations are not impacted by a supplier’s participation in the program and as such, the SCF program has no direct impact on the Company’s balance sheets, cash flows or liquidity. The Company and our subsidiaries have not pledged any assets as security or provided guarantees under the SCF program.

All outstanding amounts related to suppliers participating in SCF are recorded within Accounts payable and accrued liabilities in the condensed consolidated balance sheets and the associated payments are included in operating activities within the condensed consolidated statements of cash flows. As of September 30, 2023 and June 30, 2023, the amount due to suppliers participating in the SCF program and included in Accounts payable and accrued liabilities was $119 and $220, respectively. The decrease in the amount due to suppliers participating in the SCF program from June 30, 2023 to September 30, 2023 was attributable to a reduction of orders due to the temporary operational disruptions of the cyberattack along with the timing of payments.

NOTE 4. 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 incurred $60 of costs in fiscal year 2023 and anticipates incurring approximately $30 to $40 of costs in fiscal year 2024 related to this initiative, of which approximately $10 to $15 are expected to be employee-related costs to reduce certain staffing levels such as severance payments, with the remainder for consulting and other costs. Costs incurred are expected to be settled primarily in cash.

The total restructuring and related implementation costs, net associated with the Company’s streamlined operating model plan as reflected in the condensed consolidated statements of earnings and comprehensive income:

			Three months ended																		Inception to date ended
			9/30/2023						9/30/2022																		9/30/2023
Costs of products sold			$	—					$	(1)																	$	(3)
Selling and administrative expenses			—						1																		12
Research and development			—						—																		(1)
Other (income) expense, net:
Employee-related costs			—						19																		52
Total, net			$	—					$	19																	$	60

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 streamlined operating model, related processes and other professional fees incurred.

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

NOTE 4. RESTRUCTURING AND RELATED COSTS (Continued)

The following table reconciles the accrual for the streamlined operating model’s restructuring and related implementation costs discussed above, which are recorded within Accounts payable and accrued liabilities in the condensed consolidated balance sheets:

			Employee-Related Costs						Other						Total
Accrual Balance as of June 30, 2023			$	23					$	5					$	28
Charges			—						—						—
Cash payments			(16)						(5)						(21)
Accrual Balance as of September 30, 2023			$	7					$	—					$	7

NOTE 5. INVENTORIES, NET

Inventories, net consisted of the following as of:

			9/30/2023						6/30/2023
Finished goods			$	618					$	595
Raw materials and packaging			178						182
Work in process			20						8
LIFO allowances			(104)						(87)
Total inventories, net			$	712					$	698
Less: Non-current inventories, net (1)			2						2
Total current inventories, net			$	710					$	696

(1)Non-current inventories, net are recorded in Other assets.

NOTE 6. 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 generally have original contractual maturities of less than 2 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, 2023, and June 30, 2023, the notional amount of commodity derivatives was $36 and $41, respectively, which related primarily to exposures in soybean oil used for the Food 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 original contractual maturities of less 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 $55 and $51 as of September 30, 2023 and June 30, 2023, respectively.

Interest Rate Risk Management

NOTE 6. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

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 original contractual maturities of less than 3 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 both September 30, 2023 and June 30, 2023.

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.

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
			9/30/2023						9/30/2022
Commodity purchase derivative contracts			$	(1)					$	(3)
Foreign exchange derivative contracts			1						1
Interest rate derivative contracts			—						—
Total			$	—					$	(2)

			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
						9/30/2023						9/30/2022
Commodity purchase derivative contracts			Cost of products sold			$	(2)					$	4
Foreign exchange derivative contracts			Cost of products sold			—						1
Interest rate derivative contracts			Interest expense			3						3
Total						$	1					$	8

The estimated amount of the existing net gain (loss) in Accumulated other comprehensive net (loss) income as of September 30, 2023 that is expected to be reclassified into Net earnings within the next twelve months is $13.

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, $0 and $1 contained such terms as of September 30, 2023 and June 30, 2023, respectively. As of both September 30, 2023 and June 30, 2023, 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, 2023 and June 30, 2023, 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, 2023 and June 30, 2023, the Company maintained cash margin balances

NOTE 6. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

related to exchange traded futures and options 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 gains and losses on the trust assets are recorded in Other (income) expense, net in the condensed consolidated statements of earnings. 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, 2023 and June 30, 2023, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis during the period 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:

															9/30/2023												6/30/2023
			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						$	—					$	—					$	2					$	2
Commodity purchase swaps contracts			Prepaid expenses and other current assets						2						1						1						—						—
Foreign exchange forward contracts			Prepaid expenses and other current assets						2						2						2						—						—
															$	3					$	3					$	2					$	2
Liabilities
Commodity purchase futures contracts			Accounts payable and accrued liabilities						1						1						1						—						—
Commodity purchase swaps contracts			Accounts payable and accrued liabilities						2						—						—						1						1
															$	1					$	1					$	1					$	1

NOTE 6. 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:

															9/30/2023												6/30/2023
			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						$	388					$	388					$	243					$	243
Time deposits			Cash and cash equivalents (1)						2						16						16						9						9
Trust assets for nonqualified deferred compensation plans			Other assets						1						137						137						129						129
															$	541					$	541					$	381					$	381
Liabilities
Notes and loans payable			Notes and loans payable (2)						2						$	347					$	347					$	50					$	50
Current maturities of long-term debt and Long-term debt			Current maturities of long- term debt and Long-term debt (3)						2						2,478						2,259						2,477						2,327
															$	2,825					$	2,606					$	2,527					$	2,377

(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 7. 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 14.6% and 25.0% for the three months ended September 30, 2023 and 2022, respectively. The lower tax rate on earnings was primarily driven by the impact of temporary relief provided by the Internal Revenue Service relating to U.S. foreign tax credit regulations.

NOTE 8. 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
			9/30/2023						9/30/2022
Basic			123,973						123,339
Dilutive effect of stock options and other			677						575
Diluted			124,650						123,914
Antidilutive stock options and other			2,220						2,983

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

NOTE 9. COMPREHENSIVE INCOME

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

			Three months ended
			9/30/2023						9/30/2022
Net earnings			$	25					$	87
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments			(11)						(29)
Net unrealized gains (losses) on derivatives			(1)						(8)
Pension and postretirement benefit adjustments			11						1
Total other comprehensive (loss) income, net of tax			(1)						(36)
Comprehensive income			24						51
Less: Total comprehensive income attributable to noncontrolling interests			3						2
Total comprehensive income attributable to Clorox			$	21					$	49

NOTE 10. 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						Noncontrolling interests						Total stockholders’ equity
Amount						Shares												Amount						Shares
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
Balance as of June 30, 2023			$	131					130,741						$	1,245					$	583					$	(1,246)					(6,921)						$	(493)					$	168					$	388
Net earnings (losses)			—						—						—						22						—						—						—						3						25
Other comprehensive (loss) income			—						—						—						—						—						—						(1)						—						(1)
Dividends to Clorox stockholders ($2.40 per share declared)			—						—						—						(300)						—						—						—						—						(300)
Dividends to noncontrolling interests			—						—						—						—						—						—						—						(3)						(3)
Stock-based compensation			—						—						13						—						—						—						—						—						13
Other employee stock plan activities			—						—						(12)						(6)						27						181						—						—						9
Balance as of September 30, 2023			$	131					130,741						$	1,246					$	299					$	(1,219)					(6,740)						$	(494)					$	168					$	131

NOTE 10. 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, 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)			—						2						—						2
Net current period other comprehensive (loss) income			(29)						(8)						1						(36)
Balance as of September 30, 2022			$	(477)					$	113					$	(151)					$	(515)
Balance as of June 30, 2023			$	(445)					$	99					$	(147)					$	(493)
Other comprehensive (loss) income before reclassifications			(11)						—						11						—
Amounts reclassified from Accumulated other comprehensive net (loss) income			—						(1)						3						2
Income tax benefit (expense), and other			—						—						(3)						(3)
Net current period other comprehensive (loss) income			(11)						(1)						11						(1)
Balance as of September 30, 2023			$	(456)					$	98					$	(136)					$	(494)

NOTE 11. 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. The Plan is fully funded under specified Employee Retirement Income Security Act (ERISA) funding rules as of September 30, 2023.

In anticipation of this settlement, the Company remeasured the plan’s benefit obligation as of September 30, 2023, based on a discount rate of 5.0% which resulted in a net unrealized loss balance of $126, net of tax, ($165 before taxes) in Accumulated other comprehensive net (loss) income on its condensed consolidated balance sheet related to the Plan.

In the second quarter of fiscal year 2024, a one-time non-cash settlement charge of approximately $165 (before taxes) is expected to be recognized in the Company’s condensed consolidated statement of earnings and comprehensive income, related to these net unrealized losses, as plan obligations are settled through both lump sum payouts and annuity purchases. The actual amount of the settlement charge could vary based on the final valuation of assets and liabilities. On October 10, 2023, the Company completed the annuity purchase related to the pension plan termination. On October 31, 2023, the Company paid out the lump sum amounts related to the termination.

NOTE 11. EMPLOYEE BENEFIT PLANS (Continued)

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

			Three months ended
			9/30/2023						9/30/2022
Interest cost			$	5					$	5
Expected return on plan assets (1)			(3)						(3)
Settlement loss recognized			1						—
Amortization of unrecognized items			2						2
Total			$	5					$	4

(1)The weighted average long-term expected rate of return on plan assets used in computing the fiscal year 2024 net periodic benefit cost is 3.5%.

The net periodic benefit cost for the Company’s retirement health care plans was $0 for both the three months ended September 30, 2023 and 2022.

During both the three months ended September 30, 2023 and 2022, the Company made $2 in contributions to its domestic retirement income plans.

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 12. OTHER CONTINGENCIES AND GUARANTEES

Contingencies

The Company is involved in certain environmental matters, including response actions at various locations. The Company recorded liabilities totaling $28 as of both September 30, 2023 and June 30, 2023, respectively, for its share of aggregate future remediation costs related to these matters.

One matter, which accounted for $12 of the recorded liability as of both September 30, 2023 and June 30, 2023, 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 groundwater at 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 related to groundwater. 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. In January 2023, the regulators issued a new order directing the Company and the current property owner to conduct a Remedial Investigation and then prepare a Feasibility Study to evaluate and remediate impacts to soil, soil vapor and indoor air. While the Company believes its latest estimates of remediation costs (including any related to soil, soil vapor and indoor air impacts) 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 in the aggregate 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 September 30, 2023 and June 30, 2023, respectively. 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 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. From time to time, 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,

NOTE 12: OTHER CONTINGENCIES AND GUARANTEES (continued)

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 September 30, 2023 and June 30, 2023.

The Company was a party to letters of credit of $15 as of September 30, 2023, primarily related to its insurance carriers, of which $0 had been drawn upon.

NOTE 13. SEGMENT RESULTS

The Company operates through strategic business units (SBUs) which are organized into operating segments. Operating segments are then aggregated into four reportable segments: Health and Wellness, Household, Lifestyle and International. Operating segments not aggregated into a reportable segment are reflected in Corporate and Other.

Corporate and Other includes certain non-allocated administrative costs and various other non-operating income and expenses, as well as the results of the Vitamins, Minerals and Supplements (VMS) business. Assets in Corporate and Other 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, as well as the assets related to the VMS business.

The principle measure of segment profitability used by management is segment adjusted earnings (losses) before interest and income taxes (segment adjusted EBIT). Segment adjusted EBIT is defined as earnings (losses) before income taxes excluding interest income, interest expense and other significant items that are nonrecurring or unusual (such as charges relating to the cyberattack, asset impairments, charges related to the streamlined operating model, charges related to the digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions and other nonrecurring or unusual items impacting comparability).

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 and Other.

NOTE 13. SEGMENT RESULTS (Continued)

						Net sales
						Three months ended
						9/30/2023						9/30/2022
Health and Wellness						$	504					$	657
Household						325						423
Lifestyle						229						320
International						270						285
Corporate and Other						58						55
Total						$	1,386					$	1,740
						Segment adjusted EBIT
						Three months ended
						9/30/2023						9/30/2022
Health and Wellness						$	104					$	133
Household						(4)						22
Lifestyle						19						60
International						34						23
Corporate and Other						(62)						(63)
Total						$	91					$	175
Interest income						10						2
Interest expense						(21)						(22)
Cyberattack costs (1)						(24)						—
Streamlined operating model (2)						—						(19)
Digital capabilities and productivity enhancements investment (3)						(27)						(20)
Earnings before income taxes						$	29					$	116

(1)Represents incremental costs related to the cyberattack detailed in Note 2. For informational purposes the following table provides the approximate cyberattack costs corresponding to the Company’s reportable segments as a percentage of total costs:

						Three months ended
						9/30/2023
			Health and Wellness			22		%
			Household			11
			Lifestyle			14
			International			1
			Corporate and Other			52
			Total			100		%

(2)Represents restructuring and related implementation costs, net for the streamlined operating model of $0 and $19 for the three months ended September 30, 2023 and 2022, respectively. 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						Three months ended									Inception to date ended
						9/30/2023						9/30/2022									9/30/2023
			Health and Wellness			—		%				6		%							6		%
			Household			—						—									1
			Lifestyle			—						5									3
			International			—						19									16
			Corporate and Other			—						70									74
			Total			—		%				100		%							100		%

(3)Represents expenses related to the Company’s digital capabilities and productivity enhancements investment corresponding to Corporate and Other.

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

NOTE 13. SEGMENT RESULTS (Continued)

Net sales to the Company’s largest customer, Walmart Inc. and its affiliates, as a percentage of consolidated net sales, were 27% for both the three months ended September 30, 2023 and 2022.

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

						Net sales
						Three months ended
						9/30/2023									9/30/2022
Cleaning						32			%						33			%
Professional Products						4									5
Health and Wellness						36			%						38			%
Bags and Wraps						11									11
Cat Litter						8									8
Grilling						5									5
Household						24			%						24			%
Food						9									10
Natural Personal Care						3									4
Water Filtration						5									5
Lifestyle						17			%						19			%
International						19			%						16			%
Corporate and Other						4			%						3			%
Total						100			%						100			%