Company: CLX
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0000021076-25-000053
Chunk: 72

Company: CLOROX CO /DE/
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 8
Chunk 72
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 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.

Venture Agreement

The Company has an agreement with The Procter & Gamble Company (P&G) for the Company’s Glad bags and wraps business. As of both September 30, 2025 and June 30, 2025, P&G had a 20% interest in the venture. This agreement is now scheduled to expire in January 2026 as the parties jointly did not opt to further extend the term of the agreement. Upon termination of the agreement, the Company is required to purchase P&G’s 20% interest for cash at fair value as established by predetermined valuation procedures. 

The Company performed a valuation of the Glad bags and wraps business in the third quarter of fiscal year 2025 in connection with an update of the Company’s financial projections. As of September 30, 2025 and June 30, 2025 the estimated fair value of P&G’s interest in the venture was $476, of which $488 and $501, respectively, was recognized and reflected in Accounts payable and accrued liabilities in the Company’s condensed consolidated balance sheet. Changes in the judgments, assumptions and market factors used could result in significantly different estimates of fair value. The difference between the estimated fair value and the amount recognized, and any future changes in the fair value of P&G’s interest, is charged to Cost of products sold in accordance with the effective interest method over the remaining life of the agreement. Following termination, the Glad business will retain the exclusive core intellectual property licenses contributed by P&G on a royalty-free basis for the licensed products marketed.

See notes to condensed consolidated financial statements for further information.

Credit Arrangements

As of September 30, 2025, the Company maintained a $1,200 revolving credit agreement that matures in March 2030 (the Credit Agreement). There were no borrowings under the Credit Agreement as of both September 30, 2025 and June 30, 2025, 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