Company: CLX
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0000021076-25-000023
Chunk: 39

Company: CLOROX CO /DE/
Filing Date: 2025-05-05
Form: 10-Q
Item: Part I, Item 1
Chunk 39
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 Company reports in its consolidated financial statements. Accordingly, a different financial presentation could result depending on the judgments, estimates or assumptions that are used. The most critical accounting estimates are those that are most important to the portrayal of the Company’s financial condition and results, and require the Company to make the most difficult and subjective judgments, often estimating the outcome of future events that are inherently uncertain. As of March 31, 2025, there have been no significant changes to the Company’s critical accounting estimates since the preparation of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, except as noted below:

Venture Agreement Terminal Obligation

The Company performed a valuation of the Glad bags and wraps business during the third quarter of fiscal year 2025 in connection with an update of the Company’s financial projections. As of March 31, 2025 the estimated fair value of P&G’s interest in the venture was $476, of which $515 was recognized and reflected in Accounts payable and accrued liabilities. As of June 30, 2024 the estimated fair value of P&G’s interest in the venture was $531, of which $510 was recognized and reflected in Other liabilities. See Notes to Condensed Consolidated Financial Statements for additional information on the Venture Agreement.

Fair value determination requires significant judgment, assumptions and market factors which are uncertain and subject to change. Changes in the judgments, assumptions and market factors used could result in significantly different estimates of fair value. For perspective, if the discount rate as of the third quarter of fiscal year 2025, the date of the most recent valuation performed, were to increase or decrease by 100 basis points, the estimated fair value of P&G’s interest would decrease by approximately $53 or increase by approximately $68, respectively. Such changes would affect the amount of future charges to Cost of products sold.

NON-GAAP FINANCIAL MEASURES

The non-GAAP financial measures that are included in this MD&A and the reasons management believes they are useful to investors are described below. Certain non-GAAP financial measures may be considered in determining incentive compensation. These measures should be considered supplemental in nature and are not intended to be a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, these measures may not be the same as similarly named measures presented by other companies.

Adjusted earnings (losses) before interest and income taxes (adjusted EBIT) represents earnings (losses) before income taxes