Company: CLX
Filing Date: 2025-08-08
Form Type: 10-K
Source: 0000021076-25-000039
Chunk: 37

Company: CLOROX CO /DE/
Filing Date: 2025-08-08
Form: 10-K
Item: Item 1A
Chunk 37
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 reporting, which may require significant effort and judgment. Any failure to maintain an effective system of internal control over financial reporting, including as a result of failure of the ERP system to work properly, could limit the Company’s ability to report its results of operations accurately and on a timely basis, or to detect and prevent fraud and could expose it to regulatory 

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enforcement action and shareholder claims, which could have a material adverse effect on the Company’s business, financial condition and results of operations. 

Fluctuations in federal, state, local and foreign taxes or a change to uncertain tax positions, including related interest and penalties, may also impact the Company’s effective tax rate and the Company’s results of operations. Changes in tax laws, including additional guidance issued by the U.S. Treasury Department, the U.S. Internal Revenue Service or similar bodies of state, local and foreign governments could create uncertainty, impact the Company's recorded liability in future periods and have a material impact on the Company’s results of operations. For example, on July 4, 2025, the One Big Beautiful Bill Act was enacted in the United States. The act contains a number of provisions that are applicable to U.S. corporate taxpayers. The Company is in the process of evaluating the impact of this legislation on its consolidated financial statements. Additionally, on December 20, 2021, the Organization for Economic Development released a set of model rules, known as the Global Anti-Base Erosion rules (GloBE rules) or “Pillar Two,” designed to ensure that large multinational enterprises pay a minimum 15% tax on income arising in each jurisdiction in which they operate. Many countries have implemented Pillar Two, and the Company has been subject to Pillar Two in certain foreign jurisdictions beginning this past fiscal year ended June 30, 2025. The Company has evaluated and will continue to monitor the impact of the GloBE rules but does not anticipate that they will have a material impact on the Company's effective tax rate and cash flows. See also “Critical Accounting Estimates—Income Taxes” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in Exhibit 99.1 for more information on factors influencing the determination of our effective tax rate and tax positions. 

If the Company is found to be noncompliant with applicable laws and regulations in these or other areas, it could be subject to governmental or regulatory actions, including fines, import detentions, injunctions, product withdrawals or recalls or asset seizures, as well as potential