CLOROX CO /DE/ (CLX) FY 2025 MD&A

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The Clorox Company

(Dollars in millions, except per share data)

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of The Clorox Company’s (the Company or Clorox) financial statements with a narrative from the perspective of management on the Company’s financial condition, results of operations, liquidity and certain other factors that may affect future results. In certain instances, parenthetical references are made to relevant sections of the Notes to Consolidated Financial Statements to direct the reader to a further detailed discussion. This section should be read in conjunction with the consolidated financial statements and supplementary data included in this Annual Report on Form 10-K.

The following sections are included herein:

•Executive Overview

•Results of Operations

•Financial Position and Liquidity

•Contingencies

•Quantitative and Qualitative Disclosures about Market Risk

•Recently Issued Accounting Standards

•Critical Accounting Estimates

•Summary of Non-GAAP Financial Measures

EXECUTIVE OVERVIEW

The Clorox Company is a leading multinational manufacturer and marketer of consumer and professional products with fiscal year 2025 net sales of $7,104 and about 7,600 employees worldwide as of June 30, 2025. The Company has operations in approximately 25 countries or territories and sells its products in approximately 100 markets, primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet and military stores; third-party and owned e-commerce channels; and distributors. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach and cleaning and disinfecting products; Pine-Sol and Tilex cleaners; Liquid-Plumr clog removers; Poett home care products; Glad bags and wraps; Fresh Step cat litter; Kingsford grilling products; Hidden Valley dressings, dips, seasonings and sauces; Brita water-filtration products and Burt's Bees natural personal care products. The Company also markets industry-leading products and technologies for professional customers, including those sold under the CloroxPro and Clorox Healthcare brand names.

The Company primarily markets its leading brands in midsized categories considered to be financially attractive. Most of the Company’s products compete with other nationally advertised brands within each category and with “private label” brands. About 80% of the Company's sales are generated from brands that hold the No. 1 or No. 2 market share position in their categories.

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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. The four reportable segments consist of the following:

•Health and Wellness consists of cleaning, disinfecting and professional products marketed and sold in the United States. Products within this segment include home care cleaning and disinfecting products and laundry additives, primarily under the Clorox, Clorox2, Pine-Sol, Scentiva, Tilex, Liquid-Plumr and Formula 409 brands; professional cleaning and disinfecting products under the CloroxPro and Clorox Healthcare brands; and professional food service products under the Hidden Valley brand.

•Household consists of bags and wraps, cat litter and grilling products marketed and sold in the United States. Products within this segment include bags and wraps under the Glad brand; cat litter primarily under the Fresh Step and Scoop Away brands; and grilling products under the Kingsford brand.

•Lifestyle consists of food, water-filtration and natural personal care products marketed and sold in the United States. Products within this segment include dressings, dips, seasonings and sauces, primarily under the Hidden Valley brand; water-filtration products under the Brita brand; and natural personal care products under the Burt’s Bees brand.

•International consists of products sold outside the United States. Products within this segment include laundry additives and home care products primarily marketed under the Clorox, Poett, Pine-Sol and Clorinda brands; bags and wraps under the Glad brand; cat litter primarily marketed under the Ever Clean and Fresh Step brands and water-filtration products marketed under the Brita brand.

Non-GAAP Financial Measures

This Executive Overview, the succeeding sections of MD&A and Exhibit 99.2 may include certain financial measures that are not defined by accounting principles generally accepted in the United States of America (U.S. GAAP). These measures, which are referred to as non-GAAP measures, are listed below:

•Free cash flow and free cash flow as a percentage of net sales. Free cash flow is calculated as net cash provided by operations less capital expenditures.

•Earnings before interest and income taxes (EBIT) margin (the ratio of EBIT to net sales).

•Adjusted earnings (losses) before interest and income taxes (adjusted EBIT) represents earnings (losses) excluding interest income, interest expense, income taxes and other significant items that are nonrecurring or unusual (such as the pension settlement charge, incremental costs and insurance recoveries related to the August 2023 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 / divestitures and other nonrecurring or unusual items impacting comparability).

•Adjusted EBIT margin (the ratio of adjusted EBIT to net sales).

•Economic profit (EP) is defined by the Company as earnings before income taxes, excluding certain U.S. GAAP items (such as the pension settlement charge, incremental costs and insurance recoveries related to the August 2023 cyberattack, asset impairments, charges related to implementation of the streamlined operating model, charges related to digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions / divestitures and other nonrecurring or unusual items impacting comparability) and interest expense; less income taxes (calculated based on the Company’s effective tax rate excluding the identified U.S. GAAP items), and less after tax profit attributable to noncontrolling interests, and less a capital charge (calculated as average capital employed multiplied by a cost of capital rate).

•Organic sales growth / (decrease) is defined as net sales growth / (decrease) excluding the effect of foreign exchange rate changes and any acquisitions or divestitures.

For a discussion of these measures and the reasons management believes they are useful to investors, refer to “Summary of Non-GAAP Financial Measures” below. To the extent applicable, this MD&A and Exhibit 99.2 include reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.

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Fiscal Year 2025 Financial Highlights

A detailed discussion of strategic goals, key initiatives and results of operations is included below. Key fiscal year 2025 financial results are summarized as follows:

•The Company’s fiscal year 2025 net sales of $7,104 were essentially flat to fiscal year 2024 net sales of $7,093, primarily due to the incremental shipments related to the enterprise resource planning transition (ERP shipments) and lapping impacts from the cyberattack and retail inventory restoration, partially offset by the divestitures of the Better Health Vitamins, Minerals and Supplements (VMS) and Argentina businesses.

•Gross margin increased by 220 basis points to 45.2% in fiscal year 2025 from 43.0% in fiscal year 2024. The increase was primarily driven by cost savings, higher volume and the benefits of the divestitures of the Better Health VMS and Argentina businesses, partially offset by higher trade promotion spending, unfavorable mix and higher manufacturing and logistics costs.

•The Company reported earnings before income taxes of $1,078 in fiscal year 2025, compared to $398 in fiscal year 2024. The Company reported earnings attributable to Clorox of $810 in fiscal year 2025, compared to $280 in fiscal year 2024.

•The Company delivered diluted net earnings per share (EPS) of $6.52 in fiscal year 2025, an increase of 190%, or $4.27, from fiscal year 2024 diluted net EPS of $2.25. The increase was primarily due to the losses on the divestiture of the Argentina business in the prior year, higher volume in the current year, the pension settlement charge in the prior year and cost savings and the benefits of cyberattack insurance recoveries in the current year, partially offset by the loss relating to the divestiture of the Better Health VMS business, unfavorable mix and higher trade promotion spending all in the current year.

•EP increased by $183 to $756 in fiscal year 2025, compared to $573 in fiscal year 2024 (refer to the reconciliation of EP to earnings before income taxes in Exhibit 99.2).

•The Company’s net cash provided by operations was $981 in fiscal year 2025, compared to $695 in fiscal year 2024. Free cash flow was $761 or 10.7% of net sales in fiscal year 2025, compared to $483 or 6.8% of net sales in fiscal year 2024 (refer to the reconciliation of net cash provided by operations to free cash flow in “Financial Position and Liquidity - Investing - Free Cash Flow”).

•The Company paid $602 in cash dividends to stockholders in fiscal year 2025, compared to $595 in cash dividends paid in fiscal year 2024. In July 2025, the Company announced an increase of 2% in its dividend from the prior year.

Strategic Goals and Initiatives

The Company's IGNITE strategy — underpinned by its purpose and enduring values — accelerates innovation in key areas of the business to drive growth and deliver value for all Clorox stakeholders. IGNITE focuses on four strategic choices aimed at fueling long-term growth; innovating consumer experiences; reimagining how the company and its people work; and continuously evolving the product portfolio. The Company’s long-term financial goals reflected in IGNITE include annual net sales growth of 3% to 5% — increased from 2% to 4% in 2021 — annual adjusted EBIT margin expansion of 25 to 50 basis points and annual free cash flow as a percentage of net sales of 11% to 13%.

In September 2024, the Company completed the divestiture of its Better Health VMS business, which included the Natural Vitality, NeoCell, Rainbow Light and RenewLife brands, relevant trademarks and licenses, and associated manufacturing and distribution facilities in Sunrise, Florida. The transaction was in support of the Company's IGNITE strategy and the commitment to evolve its portfolio to increase focus on its core business to drive more consistent, profitable growth.

In February 2025, the Company announced that the Venture Agreement with The Procter & Gamble Company (P&G) for the Company’s Glad bags and wraps business will wind down by January 31, 2026. The Company will acquire P&G’s 20% interest in the venture for cash at fair value as established by predetermined contractual valuation procedures.

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As announced in August 2021, the Company continues to invest in transformative technologies and processes over a five-year period ending in fiscal year 2026. This investment began in fiscal year 2022, and includes replacement of the Company's enterprise resource planning system (ERP) and transitioning to a cloud-based platform as well as the implementation of a suite of other digital technologies. Following the successful implementation of the new ERP system in Canada in fiscal year 2025, Clorox began implementation in the U.S. in fiscal year 2026. The total incremental transformational investment is expected to be $570 to $580 million. It is expected that these implementations will generate efficiencies and transform the Company's operations in the areas of supply chain, digital commerce, innovation, brand building and more over the long term.

During the fourth quarter of fiscal year 2025, certain retailers placed orders in advance of the ERP transition in the U.S. to minimize any potential inventory impacts during the implementation phase. The incremental shipments provided a benefit to net sales, however, these impacts are expected to reverse in fiscal year 2026 as retailers draw down this inventory.

Finally, in fiscal year 2025, Clorox fully leveraged its new streamlined operating model to deliver ongoing cost savings and further enhance the Company's ability to respond more quickly to changing consumer behaviors and innovate faster.

Recent Events Affecting the Company

For the fiscal year ended June 30, 2025, the Company continues to monitor macroeconomic conditions as a result of volatility in capital markets and developments in international trade policy. These evolving challenges contributed to a highly dynamic operating environment as the Company continued its efforts to drive growth, rebuild margins and drive its transformation.

While inflationary headwinds have moderated, consumers continue to feel pressure as continued macroeconomic uncertainty impacts spending. United States trade policies continue to evolve, including new or increased tariffs on product imports from certain countries. These, and any future new or additional tariffs, as well as any associated retaliatory measures taken by other countries, may impact the macroeconomic environment, consumers, suppliers and the Company’s business. Though the Company has and will continue to take action to mitigate such impacts, the Company anticipates the operating environment will remain volatile and challenging.

The Company will continue to invest in its brands, capabilities and people to deliver consistent, profitable growth over time. The Company completed implementation of the new streamlined operating model in fiscal year 2024, which continues to generate annual cost savings in fiscal year 2025 and beyond. The recent divestitures of the Company’s Argentina and Better Health VMS businesses reflect its commitment to continue evolving its portfolio to reduce volatility, accelerate sales growth and structurally improve margins.

The Company has recovered from the August 2023 cyberattack which had significant impacts to its operations and results in fiscal year 2024. The Company recorded insurance recoveries of $70 in fiscal year 2025 related to the cyberattack. No additional insurance recoveries related to the cyberattack are anticipated.

The impact of continued volatility in macroeconomic conditions and geopolitical instability, including ongoing conflicts in the Middle East and Ukraine, the potential for escalation in hostilities between the U.S. and Iran, and rising tensions between China and Taiwan, actual and potential shifts in U.S. and foreign trade, economic and other policies, have increased global macroeconomic and political uncertainty regarding the duration and resolution of the conflicts, the potential escalation of tensions and potential economic and global trade and supply chain disruptions. These factors are difficult to predict considering the rapidly evolving landscape as the Company continues to expect a variable operating environment going forward.

The Company has not experienced significant disruptions in its operations during fiscal year 2025. However, the risks of future negative impacts due to transportation, logistical or supply constraints and higher commodity costs for certain raw materials remain present, and the Company continues to experience corresponding incremental costs and gross margin pressures.

For fiscal year 2026, the Company anticipates the operating environment will remain volatile and challenging as consumers may face greater pressure as continued macroeconomic uncertainty impacts spending. The Company will continue to invest in its brands, capabilities and people to deliver consistent, profitable growth over time.

For further discussion of the possible impacts of inflationary pressures and other recent events on our business, financial conditions and results of operations, see “Risk Factors” in Part I, Item 1A of this Report.

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RESULTS OF OPERATIONS

Unless otherwise noted, MD&A compares results of operations from fiscal year 2025 (the current year) to fiscal year 2024 (the prior year), with percentage and basis point calculations based on rounded numbers, except for per share data and the effective tax rate. Discussions of fiscal year 2023 items and year-to-year comparisons between fiscal years 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Exhibit 99.1 of the Company’s Annual Report on Form 10-K for the fiscal years ended 2024 and 2023.

CONSOLIDATED RESULTS

(1)The divestiture impact is calculated as net sales from the Argentina and Better Health VMS businesses after the respective sale dates in the year-ago period.

(2)This represents the net impact on net sales growth / (decrease) from pricing actions, mix, trade promotion spending, mix from acquisitions and divestitures and other factors. In the fiscal year ended June 30, 2025, the impact from divestiture mix was 3% and 1% for International and Total Company, respectively.

(3)Organic sales growth / (decrease) is defined as net sales growth / (decrease) excluding the effect of foreign exchange rate changes and any acquisitions or divestitures. See “Summary of Non-GAAP Financial Measures” below for reconciliation of organic sales growth / (decrease) to net sales growth / (decrease), the most directly comparable GAAP financial measure.

(4)Organic volume represents volume excluding the effect of any acquisitions and divestitures. In the fiscal year ended June 30, 2025, the volume impact of divestitures was (14)% and (6)% for International and Total Company, respectively.

(5)Total Company includes Corporate and Other. Corporate and Other includes the results of the Better Health VMS business through the date of divestiture.

Net sales were essentially flat and volume increased by 1% in fiscal year 2025, primarily due to the incremental shipments related to the ERP transition and lapping impacts from the cyberattack and retail inventory restoration, partially offset by the divestitures of the Better Health VMS and Argentina businesses.

Gross margin increased by 220 basis points in fiscal year 2025 from 43.0% to 45.2%. The increase was primarily driven by cost savings, higher volume and the benefits of the divestitures of the Better Health VMS and Argentina businesses, partially offset by higher trade promotion spending, unfavorable mix and higher manufacturing and logistics costs.

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Expenses

Selling and administrative expenses, as a percentage of net sales, decreased by 70 basis points in fiscal year 2025. The dollar decrease in selling and administrative expenses was primarily due to productivity initiatives and the impact from divestitures both in the current year.

Advertising costs, as a percentage of net sales, decreased 90 basis points in fiscal year 2025. The Company continues to support its brands. The Company’s U.S. retail advertising spend as a percentage of net sales was 12% for fiscal year 2025 and 13% for fiscal year 2024.

Research and development costs, as a percentage of net sales, were essentially flat in the current year as compared to the prior year. The Company continues to invest behind product innovation and cost savings.

Loss on divestiture, pension settlement charge, Interest expense, Other expense (income), net and Effective tax rate on earnings

Loss on divestiture of $118 in fiscal year 2025 reflects the divestiture of the Better Health VMS business. The loss on divestiture of $240 in fiscal year 2024 reflected the loss on the divestiture of the Argentina business. See Notes to Consolidated Financial Statements for further information.

Pension settlement charge was $171 in fiscal year 2024 and reflected the settlement of the domestic qualified pension plan. See Notes to Consolidated Financial Statements for further information.

Other (income) expense, net was ($86) and $24 in fiscal year 2025 and fiscal year 2024, respectively. The variance was primarily due to the benefit of insurance recoveries related to the cyberattack in the current year and unfavorable exchange rates primarily related to Argentina in the prior year.

The effective tax rate on earnings was 23.6% and 26.5% in fiscal year 2025 and 2024, respectively. The lower tax rate in fiscal year 2025 compared to fiscal year 2024 was driven by the divestiture of the Argentina business in the prior year, partially offset by an international legal entity reorganization in the prior year and the divestiture of the Better Health VMS business in the current year.

Diluted net earnings per share

Diluted net earnings per share (EPS) increased by $4.27, or 190%, in fiscal year 2025, primarily due to the losses on the divestiture of the Argentina business in the prior year, higher volume in the current year, the pension settlement charge in the prior year and cost savings and the benefits of cyberattack insurance recoveries in the current year, partially offset by the loss relating to the divestiture of the Better Health VMS business, unfavorable mix and higher trade promotion spending all in the current year.

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SEGMENT RESULTS

The following presents the results of the Company’s reportable segments and Corporate and Other (see Notes to Consolidated Financial Statements for further discussion of the principal measure of segment profitability used by management, segment adjusted earnings (losses) before interest and income taxes (segment adjusted EBIT)):

(1)See “Summary of Non-GAAP Financial Measures” below for reconciliation of segment adjusted EBIT to earnings (losses) before income taxes, the most directly comparable GAAP financial measure.

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Health and Wellness

Fiscal year 2025 versus fiscal year 2024: Volume, net sales and segment adjusted EBIT increased by 11%, 9% and 17%, respectively, during fiscal year 2025. The volume increase was primarily due to incremental shipments related to the ERP transition and lapping impacts from the cyberattack and retail inventory restoration. The variance between volume and net sales was primarily due to unfavorable price mix and higher trade promotion spending. The increase in segment adjusted EBIT in the current year was primarily due to higher net sales.

Household

Fiscal year 2025 versus fiscal year 2024: Volume, net sales and segment adjusted EBIT increased by 6%, 3% and 25%, respectively, in fiscal year 2025. The volume increase was primarily driven by incremental shipments related to the ERP transition and lapping impacts from the cyberattack and retail inventory restoration. The variance between volume and net sales was primarily due to unfavorable mix and higher trade promotion spending. The increase in segment adjusted EBIT was mainly due to higher volume and cost savings, partially offset by unfavorable mix.

Lifestyle

Fiscal year 2025 versus fiscal year 2024: Volume, net sales and segment adjusted EBIT increased by 4%, 2% and 15%, respectively, during fiscal year 2025. The volume increase was primarily due to incremental shipments related to the ERP transition and lapping impacts from the cyberattack and retail inventory restoration. The variance between volume and net sales was mainly due to unfavorable mix and higher trade promotion spending. The increase in segment adjusted EBIT was primarily due to higher volume.

International

Fiscal year 2025 versus fiscal year 2024: Both volume and net sales decreased by 8%, and segment adjusted EBIT decreased by 10% during fiscal year 2025. The volume decrease was primarily due to the impact of the Argentina divestiture, partially offset by lapping impacts from the cyberattack and retail inventory restoration and incremental shipments related to the ERP transition. The decrease in segment adjusted EBIT was primarily due to the Argentina divestiture, partially offset by volume recovery from the cyberattack.

On March 20, 2024, the Company completed the divestiture of its Argentina business. See Notes to Consolidated Financial Statements for further information.

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Corporate and Other

Corporate and Other includes certain non-allocated administrative and other costs, various other non-operating income and expenses, as well as the results of the Better Health VMS business through the date of divestiture.

Fiscal year 2025 versus fiscal year 2024: Net sales decreased by 83% due to the divestiture of the Better Health VMS business in the first quarter of fiscal year 2025. The increase in segment adjusted EBIT was primarily due to foreign exchange losses on Corporate and Other assets related to operations in Argentina in the prior year and lower Better Health VMS operating expenses in the current year due to the divestiture.

On September 10, 2024, the Company completed the divestiture of its Better Health VMS business. See Notes to Consolidated Financial Statements for further information.

FINANCIAL POSITION AND LIQUIDITY

Management’s discussion and analysis of the Company’s financial position and liquidity describes its consolidated operating, investing and financing activities from operations.

The Company’s cash position includes amounts held by foreign subsidiaries and, as a result, the repatriation of certain cash balances from some of the Company’s foreign subsidiaries could result in additional tax costs. However, these cash balances are generally available without legal restriction to fund local business operations. In addition, a portion of the Company’s cash balance is held in U.S. dollars by foreign subsidiaries, whose functional currency is their local currency. Such U.S. dollar balances are reported on the foreign subsidiaries’ books, in their functional currency, with the impact from foreign currency exchange rate differences recorded in Other (income) expense, net.

The Company’s financial condition and liquidity remained strong as of June 30, 2025. The following table summarizes cash activities for the years ended June 30:

Operating Activities

Net cash provided by operations was $981 in fiscal year 2025, compared with $695 in fiscal year 2024. The increase was primarily driven by higher cash earnings and lower tax and incentive compensation payments in the current fiscal year, partially offset by an increase in working capital in the current fiscal year.

The increase in working capital in the current fiscal year was primarily driven by incremental billings related to the enterprise resource planning transition (incremental ERP shipments) in the fourth quarter of fiscal year 2025 and a decrease in accounts payable and accrued liabilities primarily due to the timing of payments.

The decrease in tax payments in fiscal year 2025 was primarily driven by payments made in fiscal year 2024 related to fiscal year 2023 income taxes previously deferred as a result of the relief provided by the IRS announced in January 2023 due to winter storms in California.

Payment Terms Extension and Supply Chain Financing

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 Company’s operating cash flows are directly impacted as a result of the extension of payment terms with suppliers. There would not be an expected material impact to the Company’s liquidity or capital resources if the financial institution or a supplier terminated the SCF arrangement. While the Company does not have direct access to information on, or influence over, which invoices a participating supplier elects to sell to the financial institution, the Company expects that the majority of these amounts have been sold to the financial institution. Refer to the Notes to Consolidated Financial Statements for details on the SCF program.

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Investing Activities

Net cash used for investing activities was $94 in fiscal year 2025, as compared to $175 in fiscal year 2024. The year-over-year decrease was mainly due to net cash proceeds from the sale of the Better Health VMS business in the current fiscal year.

Capital expenditures were $220 and $212 in fiscal years 2025 and 2024, respectively. Capital expenditures as a percentage of net sales were 3.1% and 3.0% for fiscal years 2025 and 2024, respectively.

Free cash flow

Financing Activities

Net cash used for financing activities was $924 in fiscal year 2025, compared with $655 in fiscal year 2024. The year-over-year increase was mainly due to higher treasury stock purchases in the current year.

Capital Resources and Liquidity

As of June 30, 2025, current liabilities exceeded current assets by $311, primarily due to the Company's Glad venture agreement terminal obligation coming due for payment in January 2026. This liability was reclassified from Other liabilities to Accounts payable and accrued liabilities as it is reasonably expected to be settled within one year. The venture agreement terminal obligation is expected to be repaid through the Company’s anticipated ability to generate positive cash flows from operations in the future, access to capital markets enabled by our strong short-term and long-term credit ratings and current borrowing availability. See Notes to Consolidated Financial Statements for further information on the Glad venture agreement.

Notwithstanding potential unforeseen adverse market conditions and as part of the Company’s regular assessment of its cash needs, the Company believes it will have the funds necessary to support its short- and long-term liquidity and operating needs, including its digital capabilities and productivity enhancements investment and venture agreement terminal obligation based on its anticipated ability to generate positive cash flows from operations in the future, access to capital markets enabled by our strong short-term and long-term credit ratings and current borrowing availability.

The Company may consider other transactions that require the issuance of additional long- and/or short-term debt or other securities to finance acquisitions, repurchase stock, refinance debt or fund other activities for general business purposes. Such transactions could require funds in excess of the Company’s current cash levels and available credit lines, and the Company’s access to or cost of such additional funds could be adversely affected by any decrease in credit ratings, which were the following as of June 30:

Credit Arrangements

On March 25, 2025, the Company entered into a new $1,200 revolving credit agreement (the Credit Agreement) that matures in March 2030. The Credit Agreement replaced a prior $1,200 revolving credit agreement (the Prior Credit Agreement) in place since March 2022. The Company did not incur any termination fees or penalties in connection with entering the new agreement, which was considered a debt modification. There were no borrowings under either the Credit Agreement or the Prior Credit Agreement as of June 30, 2025 and June 30, 2024, respectively, and the Company believes that borrowings under the Credit Agreement are and will continue to be available for general corporate purposes. The Credit Agreement includes certain restrictive covenants and limitations. The primary restrictive covenant is a minimum ratio of 4.0, calculated as total earnings before interest, taxes, depreciation and amortization and other similar noncash charges and certain other items (Consolidated EBITDA) to total interest expense for the trailing four quarters (Interest Coverage ratio), as defined and described in the Credit Agreement.

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The Company was in compliance with all restrictive covenants and limitations in the Credit Agreement as of June 30, 2025, and anticipates being in compliance with all restrictive covenants for the foreseeable future.

As of June 30, 2025, the Company maintained $34 of foreign and other credit lines, of which $7 was outstanding and the remainder of $27 was available for borrowing.

As of June 30, 2024, the Company maintained $34 of foreign and other credit lines, of which $9 was outstanding and the remainder of $25 was available for borrowing.

Short-term Borrowings

The Company’s notes and loans payable primarily consist of U.S. commercial paper issued by the parent company and any borrowings under the Credit Agreement. These short-term borrowings have stated maturities of less than one year and provide supplemental funding for supporting operations. The level of U.S. commercial paper borrowings generally fluctuates depending upon the amount and timing of operating cash flows and payments for items such as dividends, income taxes and stock repurchases. The average balance of short-term borrowings outstanding was $105 and $168 for the fiscal years ended June 30, 2025 and 2024, respectively.

Long-term Borrowings

Long-term borrowings, consisting of senior unsecured notes and debentures, were $2,484 and $2,481 as of June 30, 2025 and 2024, respectively.

Stock Repurchases and Dividend Payments

As of June 30, 2025, the Company had two stock repurchase programs: an open-market purchase program with an authorized aggregate purchase amount of up to $2,000, which has no expiration date and was authorized by the Board of Directors in May 2018, and a program to offset the anticipated impact of dilution related to stock-based awards (the Evergreen Program), which has no authorization limit on the dollar amount and no expiration date. During the fiscal year ended June 30, 2025, the Company repurchased 2,260 thousand shares of common stock at a cost of $332. There were no share repurchases of common stock during the fiscal year ended June 30, 2024.

Dividends per share and total dividends paid to Clorox stockholders were as follows during the fiscal years ended June 30:

On July 30, 2025, the Company declared a 2% increase in the quarterly dividend, from $1.22 to $1.24 per share, payable on August 29, 2025 to common stockholders of record as of the close of business on August 13, 2025.

On July 30, 2024, the Company declared a 2% increase in the quarterly dividend, from $1.20 to $1.22 per share, payable on August 30, 2024 to common stockholders of record as of the close of business on August 14, 2024.

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Material Cash Requirements

The following table summarizes the Company’s current and long-term material cash requirements as of June 30, 2025:

(1)Purchase obligations are defined as purchase agreements that are enforceable and legally binding and that contain specified or determinable significant terms, including quantity, price and the approximate timing of the transaction. For purchase obligations subject to variable price and/or quantity provisions, an estimate of the price and/or quantity has been made. Examples of the Company’s purchase obligations include contracts to purchase raw materials, commitments to contract manufacturers, commitments for information technology and related services, advertising contracts, capital expenditure agreements, software acquisition and license commitments and service contracts. The raw material contracts included above are entered into during the regular course of business based on expectations of future purchases. Many of these raw material contracts are flexible to allow for changes in the Company’s business and related requirements. If such changes were to occur, the Company believes its exposure could differ from the amounts listed above. Any amounts reflected in the consolidated balance sheets as Accounts payable and accrued liabilities are excluded from the table above, as they are short-term in nature and expected to be paid within one year.

(2)These amounts represent expected payments through 2035. Based on the accounting rules for nonqualified retirement income and retirement health care plans, the liabilities reflected in the Company’s consolidated balance sheets differ from these expected future payments. Refer to the Notes to Consolidated Financial Statements for further details.

(3)The Company has a venture agreement with P&G for the Company’s Glad bags and wraps business (the Venture Agreement). As of June 30, 2025, P&G had a 20% interest in the venture. Upon termination of the agreement in January 2026, the Company is required to purchase P&G’s 20% interest for cash at fair value as established by predetermined valuation procedures. Refer to the Notes to Consolidated Financial Statements for further details.

(4)Includes contracted spend through fiscal year 2026 related to the digital capabilities and productivity enhancements investment, which is expected to be funded through cash generated from operations.

CONTINGENCIES

A summary of contingencies is contained in the Notes to Consolidated Financial Statements and is incorporated herein by reference.