Company: CLX
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0000021076-25-000053
Chunk: 74

Company: CLOROX CO /DE/
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 8
Chunk 74
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 (such as the pension settlement charge, incremental costs and insurance recoveries related to the August 2023 cyberattack, asset impairments, 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). Due to the nature, scope and magnitude of these costs, the Company’s management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the Company’s operations. See below and notes to condensed consolidated financial statements for additional information on these costs.

The Company uses this measure to assess the operating results and performance of its segments, monitor actual results as compared to plan, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment. Management believes that the presentation of adjusted EBIT is useful to investors to assess operating performance on a consistent basis by removing the impact of the items that management believes does not directly reflect the performance of each segment's underlying operations. It also allows investors to view underlying operating results in the same manner as they are viewed by Company management. Adjusted EBIT margin is the ratio of adjusted EBIT to net sales.

Reconciliation of earnings before income taxes to adjusted EBITThree months ended9/30/20259/30/2024Earnings before income taxes$107 $177 Interest income(2)(3)Interest expense23 21 Loss on divestiture (1)— 118 Cyberattack costs, net of insurance recoveries (2)— (10)Digital capabilities and productivity enhancements investment (3)32 29 Adjusted EBIT$160 $332 

(1)Represents the loss related to the divestiture of the Better Health VMS business.  

(2)Represents incremental costs and insurance recoveries related to the cyberattack.

(3)Represents expenses related to the Company's digital capabilities and productivity enhancements investment. 

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NON-GAAP FINANCIAL MEASURES (Continued)

Due to the nature, scope and magnitude of this investment, these costs are considered by management to represent incremental transformational costs above the historical normal level of spending for information technology to support operations. Since these strategic investments, including incremental operating costs, will cease at the end of the investment period, are not expected to recur in the foreseeable future and are not considered representative of the Company's underlying operating performance, the Company's management believes presenting these costs as an adjustment in the non-G