Exhibit 99.1

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

Clorox is a leading multinational manufacturer and marketer of consumer and professional products with fiscal year 2022 net sales of $7,107 and approximately 9,000 employees worldwide as of June 30, 2022. Clorox sells its products 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 products; Pine-Sol cleaners; Liquid-Plumr clog removers; Poett home care products; Fresh Step cat litter; Glad bags and wraps; Kingsford grilling products; Hidden Valley dressings, dips, seasonings and sauces; Brita water-filtration products; Burt’s Bees natural personal care products; and RenewLife, Rainbow Light, Natural Vitality and NeoCell vitamins, minerals and supplements. 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 has operations in more than 25 countries or territories and sells its products in more than 100 markets.

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.

The Company operates through strategic business units (SBUs) that are also the Company’s operating segments. These SBUs are then aggregated into four reportable segments: Health and Wellness, Household, Lifestyle and International. These four reportable segments consist of the following:

•Health and Wellness consists of cleaning products, professional products and vitamins, minerals and supplements mainly marketed and sold in the U.S. Products within this segment include cleaning products such as laundry additives and home care products, primarily under the Clorox, Clorox2, Scentiva, Pine-Sol, Liquid-Plumr, Tilex and Formula 409 brands; professional cleaning and disinfecting products under the CloroxPro and Clorox Healthcare brands; professional food service products under the Hidden Valley brand; and vitamins, minerals and supplements under the RenewLife, Natural Vitality, NeoCell and Rainbow Light brands.

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

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

1

----

•International consists of products sold outside the U.S. Products within this segment include laundry additives; home care products; water-filtration products; digestive health products; grilling products; cat litter; food; bags and wraps; natural personal care products; and professional cleaning and disinfecting products marketed primarily under the Clorox, Ayudin, Clorinda, Poett, Pine-Sol, Glad, Brita, RenewLife, Ever Clean and Burt’s Bees brands.

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 taxes (EBIT) margin (the ratio of 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 asset impairments, charges related to digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions and other non-recurring or unusual items) 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 excluding the effect of foreign exchange rate changes and any acquisitions and 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.

Fiscal Year 2022 Financial Highlights

A detailed discussion of strategic goals, key initiatives and results of operations is included below. Key fiscal year 2022 financial results are summarized as follows:

•The Company’s fiscal year 2022 net sales decreased by 3% to $7,107 from $7,341 in fiscal year 2021, reflecting lower shipments primarily in the Health and Wellness reportable segment. The variance between volume and net sales was primarily due to the impact of favorable price mix, partially offset by unfavorable foreign currency exchange rates.

•Gross margin decreased by 780 basis points to 35.8% in fiscal year 2022 from 43.6% in fiscal year 2021. The decrease was primarily driven by higher manufacturing and logistics costs, increased commodity costs and unfavorable mix, partially offset by the benefit of price increases and cost savings.

•The Company reported earnings before income taxes of $607 in fiscal year 2022, compared to $900 in fiscal year 2021. The Company reported earnings attributable to Clorox of $462 in fiscal year 2022, compared to $710 in fiscal year 2021. 

•The Company delivered diluted net earnings per share (EPS) of $3.73 in fiscal year 2022, a decrease of approximately 33%, or $1.85, from fiscal year 2021 diluted net EPS of $5.58. The decrease was primarily due to lower gross margin and the one-time, noncash remeasurement gain recognized on the previously held equity interest in the Saudi joint venture in the prior period, partially offset by the noncash impairment charges on assets held by the Vitamins, Minerals and Supplements (VMS) business in the prior period.

•EP decreased by 58% to $282 in fiscal year 2022, compared to $672 in fiscal year 2021 (refer to the reconciliation of EP to earnings before income taxes in Exhibit 99.2).

•The Company’s net cash provided by operations was $786 in fiscal year 2022, compared to $1,276 in fiscal year 2021. Free cash flow was $535 or 7.5% of net sales in fiscal year 2022, compared to $945 or 12.9% of net sales in fiscal year 2021 (refer to the reconciliation of net cash provided by operations to free cash flow in “Financial Position and Liquidity - Investing - Free Cash Flow”).

2

----

•The Company paid $571 in cash dividends to stockholders in fiscal year 2022, compared to $558 in cash dividends in fiscal year 2021. In July 2022, the Company announced an increase of 2% in its quarterly cash dividend from the prior year.

Strategic Goals and Initiatives

As announced in 2019, the IGNITE strategy is intended to accelerate innovation in key areas of the business to drive growth and deliver value for both the Company's shareholders and society. Specifically, IGNITE focuses on four strategic choices to deliver purpose-driven growth: Fuel Growth, Innovate Experiences, Reimagine Work and Evolve Portfolio. Performance goals within the environmental, social and governance pillars of Healthy Lives, Clean Planet and Thriving Communities, all underpinned by strong governance also are integrated into the strategy. 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 EBIT margin expansion of 25 to 50 basis points and annual free cash flow of 11% to 13%.

Additionally, in fiscal year 2021 the Company announced a strategic investment of approximately $500 over a five-year period for digital capabilities and productivity enhancements. This investment, which began in the first quarter of fiscal year 2022, includes replacement of the Company's enterprise resource planning system and transitioning to a cloud-based platform as well as the implementation of a suite of other digital technologies. This investment will generate efficiencies and better position the Company in supply chain, digital commerce, innovation, brand building and more over the long term.

Recent Events Affecting the Company

For the fiscal year ended June 30, 2022, the effects of the on-going novel coronavirus (COVID-19) pandemic continued to cause economic and social disruptions. These disruptions led to ongoing uncertainties, heightened by the conflict in Ukraine that began in the back half of the fiscal year.

Demand for many of the products across the Company's portfolio remained elevated compared to pre-pandemic levels, but moderated versus the previous fiscal year. An inflationary environment marked by higher manufacturing and logistics costs as well as increased commodity costs is expected to continue into fiscal year 2023. While we did not experience significant disruptions in our operations during fiscal year 2022, 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.

Throughout fiscal year 2022, our focus has been on addressing supply-chain disruptions and volatility in commodity costs and foreign exchange markets and countering inflationary pressures through pricing actions and cost-cutting measures.

The extent of COVID-19’s effect on the Company’s operational and financial performance in the future will depend on future developments, including the duration, spread, intensity and phase of the pandemic in different countries, the emergence of COVID-19 variants and the effectiveness of vaccines against these variants, the Company’s continued ability to manufacture and distribute its products, any future government actions affecting consumers, our business operations, including any vaccine mandates, or the economy in general, and effectiveness of global vaccines. Additionally, the impact of certain geopolitical events, specifically the conflict in Ukraine, and continued inflationary pressures have increased global economic and political uncertainty due to the uncertainty around the duration and resolution of the conflict and potential economic and global supply chain disruptions. All of these factors are difficult to predict considering the rapidly evolving landscape as the Company continues to expect a variable operating environment going forward. 

For further discussion of the possible impacts of the COVID-19 pandemic and other recent events on our business, financial conditions and results of operations, see “Risk Factors” in Part I, Item 1A of this Report.

3

----

RESULTS OF OPERATIONS

Unless otherwise noted, MD&A compares results of operations from fiscal year 2022 to fiscal year 2021, with percentage and basis point calculations based on rounded numbers, except for per share data and the effective tax rate. Discussions of fiscal year 2020 items and year-to-year comparisons between fiscal years 2021 and 2020 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 year ended June 30, 2021.

CONSOLIDATED RESULTS|           |      |             |      |  |            |             |  |  |     |   |  |  |  |  |  |  |  |
|-----------|------|-------------|------|--|------------|-------------|--|--|-----|---|--|--|--|--|--|--|--|
|           |      |             |      |  | % Change   |
|      | 2022 |             | 2021 |  | 2022to2021 |
| Net sales | $    | 7,107  |      |  | $          | 7,341  |  |  | (3) | % |

|                     |                                               |                 |         |                                 |                         |                     |                                                  |                    |   |         |   |               |   |         |   |  |  |  |  |  |  |  |  |  |  |  |
|---------------------|-----------------------------------------------|-----------------|---------|---------------------------------|-------------------------|---------------------|--------------------------------------------------|--------------------|---|---------|---|---------------|---|---------|---|--|--|--|--|--|--|--|--|--|--|--|
|                     | Year Ended June 30, 2022                      |
|                     | Percentage change versus the year-ago period  |
|                     | Reported (GAAP) Net Sales Growth / (Decrease) | Reported Volume |         | Acquisitions & Divestitures | Foreign Exchange Impact | Price/Mix/Other (1) | Organic Sales Growth / (Decrease) (Non-GAAP) (2) | Organic Volume (3) |
| Health and Wellness | (10)                                          | %               | (9)     | %                               |                         | —        | %                                                | —       | % | (1)     | % | (10)          | % | (9)     | % |
| Household           | —                                  |                 | (3)     |                                 |                         | —        |                                                  | —       |   | 3  |   | —  |   | (3)     |   |
| Lifestyle           | 3                                        |                 | 2  |                                 |                         | —        |                                                  | —       |   | 1  |   | 3        |   | 2  |   |
| International       | 2                                        |                 | (1)     |                                 |                         | —        |                                                  | (4)                |   | 7  |   | 6        |   | (1)     |   |
| Total               | (3)                                           | %               | (5)     | %                               |                         | —        | %                                                | (1)                | % | 3  | % | (2)           | % | (5)     | % |

(1) This represents the net impact on net sales growth / (decrease) from pricing actions, mix and other factors.

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

(3) Organic volume represents volume excluding the effect of any acquisitions and divestitures.

Net sales in fiscal year 2022 decreased by 3%, reflecting lower shipments primarily in the Health and Wellness reportable segment. Volume decreased by 5% versus the prior period. The variance between volume and net sales was primarily due to the impact of favorable price mix, partially offset by unfavorable foreign currency exchange rates.|              |            |             |      |            |            |             |  |  |      |   |  |  |  |  |  |  |  |
|--------------|------------|-------------|------|------------|------------|-------------|--|--|------|---|--|--|--|--|--|--|--|
|              |            |             |      |            | % Change   |
|              | 2022       |             | 2021 |            | 2022to2021 |
| Gross profit | $          | 2,545  |      |            | $          | 3,199  |  |  | (20) | % |
| Gross margin | 35.8  | %           |      | 43.6  | %          |             |  |

Gross margin decreased by 780 basis points in fiscal year 2022 from 43.6% to 35.8%. The decrease was primarily driven by higher manufacturing and logistics costs, increased commodity costs and unfavorable mix, partially offset by the benefit of price increases and cost savings.

4

----

Expenses|                                     |           |           |      |           |            |             |                |  |      |            |  |            |            |  |            |   |  |  |  |  |  |  |  |  |  |  |  |  |  |
|-------------------------------------|-----------|-----------|------|-----------|------------|-------------|----------------|--|------|------------|--|------------|------------|--|------------|---|--|--|--|--|--|--|--|--|--|--|--|--|--|
|                                     |           |           |      |           | % Change   |             | % of Net sales |
|                                     | 2022      |           | 2021 |           | 2022to2021 |             | 2022           |  | 2021 |
| Selling and administrative expenses | $         | 954  |      |           | $          | 1,004  |                |  | (5)  | %          |  | 13.4  | %          |  | 13.7  | % |
| Advertising costs                   | 709  |           |      | 790  |            |             | (10)           |  |      | 10.0  |  |            | 10.8  |  |
| Research and development costs      | 132  |           |      | 149  |            |             | (11)           |  |      | 1.9   |  |            | 2.0   |  |

Selling and administrative expenses, as a percentage of net sales, decreased by 30 basis points in fiscal year 2022. The dollar decrease in selling and administrative expenses was primarily due to lower nonqualified deferred compensation plan expense, lower incentive compensation expense and the benefit from cost savings, partially offset by the Company’s digital capabilities and productivity enhancements investments. 

Advertising costs, as a percentage of net sales, decreased by 80 basis points in fiscal year 2022. The dollar decrease was primarily due to higher spend in the prior period and the Company returning to historical levels of spend in the current period. The Company’s U.S. retail advertising spend as a percentage of net sales was 10% for fiscal year 2022 and 12% for fiscal year 2021, respectively.

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

Goodwill, trademark and other asset impairments, Interest expense, Other expense (income), net, and the effective tax rate on earnings|                                                 |           |               |            |          |   |           |  |  |  |  |  |
|-------------------------------------------------|-----------|---------------|------------|----------|---|-----------|--|--|--|--|--|
|                                                 | 2022      |               | 2021       |
| Goodwill, trademark and other asset impairments | $         | —  |            |          | $ | 329  |  |
| Interest expense                                | 106  |               |            | 99  |   |
| Other expense (income), net                     | 37   |               |            | (72)     |   |
| Effective tax rate on earnings                  | 22.4%     |               | 20.1  | %        |

Goodwill, trademark and other asset impairments of $329 in the prior fiscal year reflect non-cash impairment charges related to goodwill, trademarks, and other assets held by the VMS business (included within the Health and Wellness segment). See Notes to Consolidated Financial Statements for further information regarding the impairments recorded.

Interest expense was $106 and $99 in fiscal year 2022 and fiscal year 2021, respectively. The increase in the current period interest expense was primarily due to a loss on the early extinguishment of debt. See Notes to Consolidated Financial Statements for further information regarding the loss on the early extinguishment of debt recorded.

Other expense (income), net was $37 and ($72) in fiscal year 2022 and fiscal year 2021, respectively. The variance was due to the one-time, non-cash remeasurement gain recognized from the Company’s previously held equity interest in the Saudi joint venture in the first quarter of fiscal year 2021 (see Notes to Consolidated Financial Statements) and the loss in the current period from revaluation of the Company’s trust assets related to its nonqualified deferred compensations plans.

The effective tax rate on earnings (losses) was 22.4% and 20.1% in fiscal year 2022 and 2021, respectively. The lower tax rate in fiscal year 2021 compared to fiscal year 2022 was driven by higher excess tax benefits from stock-based compensation in the prior year. 

Diluted net earnings per share|                 |      |            |      |  |            |            |  |  |      |   |  |  |  |  |  |  |  |
|-----------------|------|------------|------|--|------------|------------|--|--|------|---|--|--|--|--|--|--|--|
|                 |      |            |      |  | % Change   |
|            | 2022 |            | 2021 |  | 2022to2021 |
| Diluted net EPS | $    | 3.73  |      |  | $          | 5.58  |  |  | (33) | % |

Diluted net earnings per share (EPS) decreased by 1.85, or 33%, in fiscal year 2022, primarily due to lower gross margin and the one-time, noncash remeasurement gain recognized on the previously held equity interest in the Saudi joint venture in the prior period, partially offset by the noncash impairment charges on assets held by the VMS business in the prior period.

5

----

SEGMENT RESULTS

The following presents the results of the Company’s reportable segments and certain unallocated costs reflected in Corporate (see Notes to Consolidated Financial Statements for a reconciliation of segment results to consolidated results):

Health and Wellness|                              |           |             |      |           |            |             |     |  |      |   |  |  |  |  |  |  |  |
|------------------------------|-----------|-------------|------|-----------|------------|-------------|-----|--|------|---|--|--|--|--|--|--|--|
|                              |           |             |      |           | % Change   |
|                              | 2022      |             | 2021 |           | 2022to2021 |
| Net sales                    | $         | 2,690  |      |           | $          | 2,980  |     |  | (10) | % |
| Earnings before income taxes | 300  |             |      | 305  |            |             | (2) |  |

Fiscal year 2022 versus fiscal year 2021: Volume, net sales and earnings before income taxes decreased by 9%, 10% and 2%, respectively, during fiscal year 2022. The volume and net sales decreases were primarily due to lower shipments in the Professional Products portfolio due to higher COVID-19 related demand in the prior period. The decrease in earnings before income taxes in the current period was primarily due to lower net sales, higher manufacturing and logistics costs and unfavorable commodity costs, partially offset by the non-cash impairment charges on assets held by the VMS business in the prior period, and lower advertising spending, selling and administrative expenses and cost savings in the current period. 

Household|                              |           |             |      |           |            |             |      |  |               |   |  |  |  |  |  |  |  |
|------------------------------|-----------|-------------|------|-----------|------------|-------------|------|--|---------------|---|--|--|--|--|--|--|--|
|                              |           |             |      |           | % Change   |
|                              | 2022      |             | 2021 |           | 2022to2021 |
| Net sales                    | $         | 1,984  |      |           | $          | 1,981  |      |  | —  | % |
| Earnings before income taxes | 234  |             |      | 375  |            |             | (38) |  |

Fiscal year 2022 versus fiscal year 2021: Volume and earnings before income taxes decreased by 3% and 38%, respectively, and net sales were flat during fiscal year 2022. The volume decrease was primarily driven by lower shipments in Grilling due to higher demand in the prior period and impacts from pricing actions in the current period. The decrease in earnings before income taxes was mainly due to unfavorable commodity costs and higher manufacturing and logistics costs, partially offset by cost saving efforts and the benefits from pricing and lower trade spending.

Lifestyle|                              |           |             |      |           |            |             |      |  |         |   |  |  |  |  |  |  |  |
|------------------------------|-----------|-------------|------|-----------|------------|-------------|------|--|---------|---|--|--|--|--|--|--|--|
|                              |           |             |      |           | % Change   |
|                              | 2022      |             | 2021 |           | 2022to2021 |
| Net sales                    | $         | 1,253  |      |           | $          | 1,218  |      |  | 3  | % |
| Earnings before income taxes | 280  |             |      | 320  |            |             | (13) |  |

Fiscal year 2022 versus fiscal year 2021: Volume and net sales increased by 2% and 3%, respectively, while earnings before income taxes decreased by 13% during fiscal year 2022. The volume and net sales increases were primarily driven by higher shipments of Brita water-filtration products due to expanded distribution and merchandising support and Natural Personal Care products primarily due to innovation and strong consumption. The decrease in earnings before income taxes was primarily due to unfavorable commodity costs and higher manufacturing and logistics costs, partially offset by net sales growth.

6

----

International|                              |          |             |      |           |            |             |      |  |         |   |  |  |  |  |  |  |  |
|------------------------------|----------|-------------|------|-----------|------------|-------------|------|--|---------|---|--|--|--|--|--|--|--|
|                              |          |             |      |           | % Change   |
|                              | 2022     |             | 2021 |           | 2022to2021 |
| Net sales                    | $        | 1,180  |      |           | $          | 1,162  |      |  | 2  | % |
| Earnings before income taxes | 97  |             |      | 201  |            |             | (52) |  |

Fiscal year 2022 versus fiscal year 2021: Volume and earnings before income taxes decreased by 1% and 52%, respectively, and net sales increased by 2% during fiscal year 2022. The variance between volume and net sales was mainly due to the benefit of price increases, partially offset by the impact of unfavorable foreign exchange rates. The decrease in earnings before income taxes was primarily due to the one-time, noncash remeasurement gain recognized on the previously held equity interest in the Saudi joint venture recognized in the prior period and unfavorable commodity costs and higher manufacturing and logistics costs, partially offset by net sales growth all in the current period.

Argentina

The business environment in Argentina continues to be challenging due to significant volatility in Argentina’s currency, high inflation, economic recession, impacts of COVID-19 and temporary price controls. The Company operates in Argentina through certain wholly owned subsidiaries (collectively, “Clorox Argentina”). Clorox Argentina manufactures products at two plants that it owns and operates across Argentina. 

Effective July 1, 2018, under the requirements of U.S. GAAP, Argentina was designated as a highly inflationary economy, and as a result, the U.S. dollar replaced the Argentine peso as the functional currency of the Company’s subsidiaries in Argentina. Consequently, gains and losses from non-U.S. dollar denominated monetary assets and liabilities of Clorox Argentina are recognized in Other (income) expense, net in the consolidated statement of earnings. 

As of September 2019, the government of Argentina reinstated foreign exchange controls in response to further declines in the value of the Argentine peso, limiting the Company’s ability to convert Argentine pesos to U.S. dollars and transfer U.S. dollars outside of Argentina. As of June 30, 2022 and 2021, the net asset position, excluding goodwill, of Clorox Argentina was $45 and $48, respectively. Of these net assets, cash balances were approximately $15 and $11 as of June 30, 2022 and 2021, respectively. Net sales from Clorox Argentina represented approximately 2% of the Company’s consolidated net sales for the fiscal years ended June 30, 2022 and 2021. 

Volatility in the exchange rate is expected to continue, which, along with competition, changes in the retail, labor and macro-economic environment, and implemented and future additional legal limitations instituted to restrict foreign exchange transactions, as well as government price controls, could have an adverse impact on Clorox Argentina’s liquidity, net sales, net earnings, cash flows and net monetary asset position. The Company is closely monitoring developments in Argentina and continues to take steps intended to mitigate the adverse conditions, but there can be no assurances that these actions will be able to mitigate these conditions as they may occur.

Corporate|                            |      |       |      |  |            |       |  |  |         |   |  |  |  |  |  |  |  |
|----------------------------|------|-------|------|--|------------|-------|--|--|---------|---|--|--|--|--|--|--|--|
|                            |      |       |      |  | % Change   |
|                       | 2022 |       | 2021 |  | 2022to2021 |
| Losses before income taxes | $    | (304) |      |  | $          | (301) |  |  | 1  | % |

Corporate includes certain non-allocated administrative costs, interest income, interest expense and various other non-operating income and expenses. Beginning in fiscal year 2022, losses before income taxes for Corporate include expenses related to the Company's digital capabilities and productivity enhancements investment.

Fiscal year 2022 versus fiscal year 2021: Losses before income taxes were essentially flat due to increased investments in the Company’s digital capabilities and productivity enhancements, offset by lower employee incentive compensation expenses.

7

----

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, 2022. The following table summarizes cash activities for the years ended June 30:|                                        |       |           |      |         |   |             |  |  |  |  |  |
|----------------------------------------|-------|-----------|------|---------|---|-------------|--|--|--|--|--|
|                                        | 2022  |           | 2021 |
| Net cash provided by operations        | $     | 786  |      |         | $ | 1,276  |  |
| Net cash used for investing activities | (229) |           |      | (452)   |   |
| Net cash used for financing activities | (689) |           |      | (1,391) |   |

Operating Activities

Net cash provided by operations was $786 in fiscal year 2022, compared with $1,276 in fiscal year 2021. The year-over-year decrease was driven by lower cash earnings and an increase in working capital, partially offset by lower tax payments and cash received from the settlement of interest rate derivative contracts in the current period. The increase in working capital was due to lower Accounts payable and accrued liabilities in the current period driven by lower spend and timing of payments, higher receivables due to the timing of sales in the current period and increased collections in the prior period, partially offset by higher inventory builds in the prior period to improve product availability.

Payment Terms Extension and Supply Chain Financing

The Company initiated the extension of its payment terms with its suppliers in the second half of fiscal year 2020 in order to improve working capital as part of and to fund the IGNITE strategy and in keeping with evolving market practices. 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 the payment terms with the suppliers.

As part of those ongoing efforts, 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. Leveraging the Company’s credit rating, the SCF program enables suppliers to directly contract with the financial institution to receive payment from the financial institution prior to the payment terms between the Company and the supplier, by selling the Company’s payables to the financial institution. The participation in the program is at the sole discretion of the supplier and the Company has no economic interest in a supplier's decision to enter into the agreement and has no direct financial relationship with the financial institution, as it relates to the SCF program. Once a supplier elects to participate in the SCF program and reaches an agreement with the financial institution, the supplier elects which individual Company invoices to sell to the financial institution. The terms of the Company’s payment obligations are not impacted by a supplier’s participation in the program and as such, the SCF program has no direct impact on the Company’s balance sheets, cash flows or liquidity. No guarantees are provided by the Company or any of our subsidiaries under the SCF program. 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.

All outstanding amounts related to suppliers participating in SCF are recorded within Accounts payable and accrued liabilities in the Consolidated Balance Sheets and the associated payments are included in operating activities within the Consolidated Statements of Cash Flows. As of June 30, 2022 and 2021, the amount due to suppliers participating in SCF and included in Accounts payable and accrued liabilities was $211 and $152, respectively. 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.

Investing Activities

Net cash used for investing activities was $229 in fiscal year 2022, as compared to $452 in fiscal year 2021. The year-over-year decrease was mainly due to the acquisition of additional interest in the Company's Saudi joint venture in the prior period and lower capital spending in the current period. 

8

----

Capital expenditures were $251 and $331 in fiscal years 2022 and 2021, respectively. Capital expenditures as a percentage of net sales was 3.5% and 4.5% for fiscal years 2022 and 2021, respectively. The current year-over-year decrease was due to higher spending in the prior period on capital projects to expand production capacity.

Free cash flow|                                             |           |           |      |            |   |             |  |  |  |  |  |
|---------------------------------------------|-----------|-----------|------|------------|---|-------------|--|--|--|--|--|
|                                             | 2022      |           | 2021 |
| Net cash provided by operations             | $         | 786  |      |            | $ | 1,276  |  |
| Less: capital expenditures                  | (251)     |           |      | (331)      |   |
| Free cash flow                              | $         | 535  |      |            | $ | 945    |  |
| Free cash flow as a percentage of net sales | 7.5  | %         |      | 12.9  | % |

Financing Activities

Net cash used for financing activities was $689 in fiscal year 2022, compared with $1,391 in fiscal year 2021. The year-over-year decrease was mainly due to lower treasury stock purchases, partially offset by reduced proceeds from employee stock option exercises and net cash outflows from borrowings in the current period.

Current period financing activities include repayment of $300 of the Company’s senior notes with an annual fixed interest rate of 3.80% that became due in November 2021 and were repaid using commercial paper borrowings and repayment of $600 of the Company’s senior notes with an annual fixed interest rate of 3.05% due in September 2022 and $500 of senior notes with an annual fixed interest rate of 3.50% due in December 2024 that were redeemed prior to maturity using the proceeds from the May 2022 debt issuance of $1,100.

Capital Resources and Liquidity

The Company's current liabilities may periodically exceed current assets as a result of the Company's debt management policies, including the Company's use of commercial paper borrowings which fluctuates depending on the amount and timing of operating and investing cash flows and payments for shareholder transactions such as dividends. In addition, the Company’s cash generated from operations has decreased recently primarily due to higher manufacturing and logistics costs and unfavorable commodity costs. The Company continues to take actions to address some of the effects of such cost increases, which include implementing price increases, driving cost savings and optimizing the Company’s supply chain.

Global financial markets have experienced a significant increase in volatility due to heightened uncertainty over the adverse economic impact caused by the COVID-19 outbreak and other geopolitical circumstances. 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 our short- and long-term liquidity and operating needs based on our 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:

|                           |            |  |           |  |            |  |           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|---------------------------|------------|--|-----------|--|------------|--|-----------|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|
|                           | 2022       |  | 2021      |
|                           | Short-term |  | Long-term |  | Short-term |  | Long-term |
| Standard and Poor’s | A-2        |  | BBB+      |  | A-2        |  | A-        |
| Moody’s             | P-2        |  | Baa1      |  | P-2        |  | Baa1      |

Credit Arrangements

On March 25, 2022, the Company entered into a new $1,200 revolving credit agreement (the Credit Agreement) that matures in March 2027. The Credit Agreement replaced a prior $1,200 revolving credit agreement (the prior Credit Agreement) in place since November 2019. The Credit Agreement also changed the interest rate benchmark used as a reference rate for certain borrowings under the Credit Agreement from the London Interbank Offered Rate (LIBOR) to the secured overnight financing rate (SOFR). The Company did not incur any termination fees or penalties in connection with entering the new Credit 

9

----

Agreement, which was considered a debt modification. There were no borrowings under either the new Credit Agreement or the prior Credit Agreement as of June 30, 2022 and 2021, respectively, and the Company believes that borrowings under the new 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 non-cash 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.

The Company was in compliance with all restrictive covenants and limitations in the Credit Agreement as of June 30, 2022, and anticipates being in compliance with all restrictive covenants for the foreseeable future.

As of June 30, 2022, the Company maintained $34 of foreign and other credit lines, of which $4 was outstanding and the remainder of $30 was available for borrowing. 

As of June 30, 2021, the Company maintained $35 of foreign and other credit lines, of which $5 was outstanding and the remainder of $30 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, stock repurchases and pension contributions. The average balance of short-term borrowings outstanding was $233 and $0 for the fiscal years ended June 30, 2022 and 2021, respectively. 

Long-term Borrowings

In May 2022, the Company issued $1,100 in senior notes, including $500 of senior notes with an annual fixed interest rate of 4.40% payable semi-annually in May and November, final maturity in May 2029 that carry an effective rate of 3.89% (May 2029 senior notes), which includes the impact from the settlement of interest rate contracts in May 2022, and $600 of senior notes with an annual fixed rate of 4.60%, payable semi-annually in May and November, final maturity in May 2032 that carry an effective rate of 3.25% (May 2032 senior notes), which includes the impact from the settlement of interest rate contracts in May 2022. The notes rank equally with all of the Company's existing senior indebtedness. Proceeds from the senior notes were used to redeem prior to maturity $600 of senior notes with an annual fixed interest rate of 3.05% due in September 2022 and $500 of senior notes with an annual fixed interest rate of 3.50% due in December 2024, which were redeemed in June 2022 and for general corporate purposes. In connection with the redemption prior to maturity of the $500 of senior notes due in December 2024, the Company recorded a loss on the early extinguishment of debt of $13, which is included in Interest expense in the Consolidated Statement of Earnings, representing the difference paid in cash between the redemption price and the carrying amount of the debt extinguished of $5 and the accelerated amortization of losses on settlement of interest rate contracts and issuance costs associated with the debt extinguished of $8.

In November 2021, $300 of the Company’s senior notes with annual fixed interest rate of 3.80% became due and were repaid using commercial paper borrowings.

Stock Repurchases and Dividend Payments

As of June 30, 2022, 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 twelve months ended June 30, 2022 and 2021, the Company purchased 152 thousand and 4,758 thousand shares of common stock at a cost of $25 and $905, respectively.

10

----

Dividends per share and total dividends paid to Clorox stockholders were as follows during the fiscal years ended June 30:|                              |            |            |      |            |   |            |  |  |  |  |  |
|------------------------------|------------|------------|------|------------|---|------------|--|--|--|--|--|
|                              | 2022       |            | 2021 |
| Dividends per share declared | $          | 3.48  |      |            | $ | 4.49  |  |
| Dividends per share paid     | 4.64  |            |      | 4.44  |   |
| Total dividends paid         | 571   |            |      | 558   |   |

On July 12, 2022, the Company declared a 2% increase in the quarterly dividend, from $1.16 to $1.18 per share, payable on August 12, 2022 to common stockholders of record as of the close of business on July 27, 2022. 

On June 2, 2021, the Company declared a 5% increase in the quarterly dividend, from $1.11 to $1.16 per share, payable on August 13, 2021 to common stockholders of record as of the close of business on July 28, 2021.

Material Cash Requirements

The following table summarizes the Company’s current and long-term material cash requirements as of June 30, 2022, which we intend to fund primarily with operating cash flows:

|                                                                                        |               |           |      |               |      |           |               |  |      |           |            |  |               |           |  |               |   |           |           |  |   |             |  |  |   |             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|----------------------------------------------------------------------------------------|---------------|-----------|------|---------------|------|-----------|---------------|--|------|-----------|------------|--|---------------|-----------|--|---------------|---|-----------|-----------|--|---|-------------|--|--|---|-------------|--|--|--|--|--|--|--|--|--|--|--|--|--|--|--|
|                                                                                        | 2023          |           | 2024 |               | 2025 |           | 2026          |  | 2027 |           | Thereafter |  | Total         |
| Long-term debt maturities including interest payments                                  | $             | 90   |      |               | $    | 90   |               |  | $    | 90   |            |  | $             | 90   |  |               | $ | 90   |           |  | $ | 2,737  |  |  | $ | 3,187  |  |
| Notes and loans payable                                                                | 265      |           |      | 1        |      |           | 1        |  |      | 1    |            |  | 1        |           |  | —  |   |           | 269  |  |
| Purchase obligations (1)                                                               | 186      |           |      | 127      |      |           | 73       |  |      | 35   |            |  | 12       |           |  | 23       |   |           | 456  |  |
| Operating and finance leases                                                           | 87       |           |      | 83       |      |           | 70       |  |      | 57   |            |  | 46       |           |  | 103      |   |           | 446  |  |
| Payments related to nonqualified retirement income and retirement health care plans(2) | 15       |           |      | 15       |      |           | 14       |  |      | 15   |            |  | 14       |           |  | 62       |   |           | 135  |  |
| Venture Agreement terminal obligation (3)                                              | —  |           |      | —  |      |           | —  |  |      | 635  |            |  | —  |           |  | —  |   |           | 635  |  |
| Total                                                                                  | $             | 643  |      |               | $    | 316  |               |  | $    | 248  |            |  | $             | 833  |  |               | $ | 163  |           |  | $ | 2,925  |  |  | $ | 5,128  |  |

(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 2032. 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 (see Notes to Consolidated Financial Statements).

(3)The Company has a venture agreement with The Procter & Gamble Company (P&G) for the Company’s Glad bags and wraps business (the Venture Agreement). As of June 30, 2022, 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.

As announced in fiscal year 2021 and with investments beginning in fiscal year 2022, Clorox plans to invest approximately $500 million over a five year period in its digital capabilities and for productivity enhancements. The above table includes contracted spend related to these investments within Purchase obligations, which are 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.

11

----

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a multinational company, the Company is exposed to the impact of changes in commodity prices, foreign currency fluctuations, interest-rate risk and other types of market risk.

In the normal course of business, where available at a reasonable cost, the Company manages its exposure to market risk using contractual agreements and a variety of derivative instruments. The Company’s objective in managing its exposure to market risk is to limit the impact of fluctuations on earnings and cash flow through the use of derivative instruments, including over-the-counter swaps, forward purchase contracts and exchange-traded futures contracts. Over-the-counter derivative contracts are entered into for non-trading purposes with major credit-worthy institutions, thereby decreasing the risk of credit loss.

The Company uses different methodologies, when necessary, to estimate the fair value of its derivative contracts. The estimated fair values of the majority of the Company’s contracts are based on quoted market prices, exchange-traded market prices or broker price quotations, and represent the estimated amounts that the Company would pay or receive to terminate the contracts.

See Notes to Consolidated Financial Statements for further discussion of derivatives and hedging policies and fair value measurements.

Sensitivity Analysis for Derivative Contracts

For fiscal years 2022 and 2021, the Company’s exposure to market risk was estimated using sensitivity analyses, which illustrates the change in the fair value of a derivative financial instrument assuming hypothetical changes in commodity prices, foreign exchange rates or interest rates. The results of the sensitivity analyses for commodity, foreign currency and interest rate derivative contracts are summarized below. Actual changes in commodity prices, foreign exchange rates or interest rates may differ from the hypothetical changes, and any changes in the fair value of the contracts, real or hypothetical, would be partly to fully offset by an inverse change in the value of the underlying hedged items.

The changes in the fair value of derivatives are recorded as either assets or liabilities in the consolidated balance sheets with an offset to Net earnings or Other comprehensive (loss) income, depending on whether or not, for accounting purposes, the derivative is designated and qualified as an accounting hedge. For those derivative instruments designated and qualifying as hedging instruments, the Company must designate the hedging instrument either as a fair value hedge or as a cash flow hedge. The Company designates its commodity swaps and futures contracts for forecasted purchases of raw materials, foreign currency forward contracts for forecasted purchases of inventory, and interest rate contracts for forecasted interest payments as cash flow hedges. During the fiscal years ended June 30, 2022 and 2021, the Company had no hedging instruments designated as fair value hedges. In the event the Company has contracts not designated as hedges for accounting purposes, the Company recognizes the changes in the fair value of these contracts in the consolidated statement of earnings.

Commodity Price Risk

The Company is exposed to changes in the price of commodities used as raw materials in the manufacturing of its products. The Company uses various strategies, where available at a reasonable cost to manage cost exposures on certain raw material purchases with the objective of obtaining more predictable costs for these commodities, including long-term commodity purchase contracts and commodity derivative contracts. During fiscal years 2022 and 2021, the Company had derivative contracts related to raw material exposures for soybean oil used for the Food business and jet fuel used for the Grilling business. 

Based on a hypothetical decrease or increase of 10% in these commodity prices as of June 30, 2022, and June 30, 2021, the estimated fair value of the Company’s then-existing commodity derivative contracts would decrease or increase by $3 and $4, respectively, with the corresponding impact included in Other comprehensive (loss) income.

Foreign Currency Risk

The Company seeks to minimize the impact of certain foreign currency fluctuations by hedging transactional exposures related to inventory purchases with foreign currency forward contracts. Based on a hypothetical decrease of 10% in the value of the U.S. dollar as of June 30, 2022 and June 30, 2021, the estimated fair value of the Company’s then-existing foreign currency derivative contracts would decrease by $3 and $8, respectively, with the corresponding impact included in Other comprehensive (loss) income. Based on a hypothetical increase of 10% in the value of the U.S. dollar as of June 30, 2022 and June 30, 2021, the estimated fair value of the Company’s then-existing foreign currency derivative contracts would increase by $3 and $6, respectively.

12

----

Interest Rate Risk

The Company can be exposed to interest rate volatility with regard to short-term borrowings, using commercial paper or under the Credit Agreement, in addition to potential changes in interest rates relating to anticipated future issuances of long-term debt. Weighted average interest rates for short-term borrowings using commercial paper were 0.48% during fiscal year 2022. The Company had no material exposure to interest rate volatility through any short-term borrowing arrangements during fiscal year 2021. Assuming average commercial paper borrowing levels during fiscal year 2022, a 100 basis point increase in interest rates or a decrease in interest rates to zero would increase or decrease interest expense from short-term borrowings by approximately $2 and $1, respectively. 

The Company can also be exposed to interest rate volatility with regard to anticipated future issuances of debt. The Company utilizes interest rate contracts to manage our exposure to interest rate volatility related to movements in U.S. Treasury and swap rates. In May 2022, the Company’s interest rate contracts were settled upon issuance of $1,100 in senior notes. Therefore, as of June 30, 2022, the Company had no outstanding interest rate contracts.Based on a hypothetical increase or decrease of 100 basis points to relevant interest rates as of June 30, 2021, the estimated fair value of the Company’s existing interest rate contracts would have increased or decreased by $27 during fiscal year 2021, with the corresponding impact recorded in Other comprehensive (loss) income.

RECENTLY ISSUED ACCOUNTING STANDARDS

A summary of all recently issued accounting standards is contained in Note 1 of the Notes to Consolidated Financial Statements.

CRITICAL ACCOUNTING ESTIMATES

The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results the 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. The Company’s most critical accounting estimates are related to: 

•Revenue recognition; 

•The valuation of goodwill and other intangible assets; 

•Income taxes; and

•The Venture Agreement terminal obligation.

The Company’s critical accounting estimates have been reviewed with the Audit Committee of the Board of Directors. A summary of the Company’s significant accounting policies is contained in Note 1 of Notes to Consolidated Financial Statements.

13

----

Revenue Recognition

The Company’s revenue is primarily generated from the sale of finished products to customers. This revenue is reported net of certain variable consideration provided to customers, generally in the form of one-time and ongoing trade-promotion programs. These trade-promotion programs include shelf price reductions, in-store merchandising, consumer coupons and other trade-related activities. Amounts accrued for trade-promotions are based on various factors such as contractual terms and sales volumes, and also incorporate estimates that include customer participation rates, the rate at which customers will achieve program performance criteria, product availability and historical consumer redemption rates. The actual amounts remitted to customers for these activities may differ from the Company’s estimates, depending on how actual results of the programs compare to the estimates. If the Company’s trade promotion accrual estimates as of June 30, 2022 were to increase or decrease by 10%, the impact on net sales would be approximately $19.

Goodwill and Other Intangible Assets

The Company tests its goodwill and other indefinite-lived intangible assets for impairment annually in the fiscal fourth quarter unless there are indications during a different interim period that these assets may have become impaired.

Goodwill

For fiscal year 2022, the Company’s reporting units for goodwill impairment testing purposes were its individual SBUs. These reporting units, which are also the Company’s operating segments, are the level at which discrete financial information is available andreviewed by the manager of the respective operating segments. The respective operating segment managers, who have responsibility for operating decisions, allocating resources and assessing performance within their respective segments, do not review financial information for components that are below the operating segment level. 

In its evaluation of goodwill impairment, the Company has the option to first assess qualitative factors such as the maturity and stability of the reporting unit, the magnitude of the excess fair value over the carrying value from a prior period’s impairment testing, other reporting unit operating results, micro and macroeconomic factors, as well as new events and circumstances impacting the operations at the reporting unit level. If the test indicates a potential for impairment, a quantitative test is performed. In the quantitative test, the Company compares the estimated fair value of each reporting unit to its carrying value. If the estimated fair value of any reporting unit is less than its carrying value, an impairment charge is recorded for the difference between the carrying value and the fair value of the reporting unit.

Determining the fair value of a reporting unit requires significant judgments, assumptions and estimates by management which are subject to uncertainty. The Company uses a discounted cash flow (DCF) method under the income approach for its quantitative test, as it believes that this approach is the most reliable indicator of the fair value of its businesses and the fair value of their future earnings and cash flows. Under this approach, the Company estimates the future cash flows of each reporting unit and discounts these cash flows at a rate of return that reflects their relative risk. The cash flows used in the DCF method are consistent with those the Company uses in its internal planning, which gives consideration to actual business trends experienced and the long-term business strategy. The other key estimates and factors used in the DCF method include, but are not limited to, net sales and expense growth rates, commodity prices, foreign exchange rates, inflation and a terminal growth rate. Future changes in the judgments, assumptions and estimates that are used in the impairment testing for goodwill could result in significantly different estimates of the fair values and future impairment charges.

During the third quarter of fiscal year 2021, as a result of lower than expected actual and projected net sales growth and operating performance for the VMS reporting unit, a strategic review was initiated by management that resulted in updated financial and operational plans. These events were considered a triggering event requiring interim impairment assessments to be performed on the VMS reporting unit, indefinite-lived trademarks and other assets. Based on the outcome of these assessments, a $228 goodwill impairment charge was recorded during the third quarter of fiscal year 2021. The results of the fiscal year 2022 annual impairment review indicated that the VMS reporting unit has a heightened risk of future impairments if any assumptions, estimates or market factors unfavorably change in the future. For perspective, if the discount rate as of June 30, 2022 were to increase by 100 basis points, the change to the estimated fair value of the VMS reporting unit would have resulted in impairment charges of approximately $10. No triggering events or impairments for goodwill related to the VMS reporting unit were identified during fiscal year 2022. The VMS reporting unit had goodwill of $306 as of June 30, 2022. The Company is closely monitoring any events, circumstances or changes in this business that might imply a further reduction in the estimated fair value and may lead to additional goodwill impairment. 

Except for the VMS reporting unit discussed above, no heightened risk of impairment of reporting units was identified. No impairments were identified in fiscal year 2022 as a result of the Company’s impairment review performed annually during the fourth quarter or during any other quarters of fiscal year 2022.

14

----

Trademarks and Other Indefinite-Lived Intangible Assets

For trademarks and other intangible assets with indefinite lives, the Company has the option to first assess qualitative factors, such as the maturity and stability of the trademark or other intangible asset, the magnitude of the excess fair value over carrying value from a prior period’s impairment testing, other specific operating results, as well as new events and circumstances impacting the significant inputs used to determine the fair value of the intangible asset. If the result of a qualitative test indicates that it is more likely than not that the asset is impaired, a quantitative test is performed. When a quantitative test is performed, the estimated fair value of an asset is compared to its carrying value. If the carrying value of such asset exceeds its estimated fair value, an impairment charge is recorded for the difference between the carrying value and the estimated fair value. The Company uses a DCF method under the relief from royalty income approach to estimate the fair value of its trademarks and other intangible assets with indefinite lives. This approach requires significant judgments in determining the royalty rates and the assets’ estimated cash flows, including consideration of related net sales growth rates, as well as the appropriate discount and foreign exchange rates applied to those cash flows to determine fair value. Future changes in such estimates or the use of alternative assumptions could result in significantly different estimates of the fair values.

During the third quarter of fiscal year 2021, as a result of the interim impairment assessments performed on various VMS assets, an $86 impairment charge to indefinite-lived trademarks was recorded. 

No heightened risk of impairment or impairments were identified in fiscal year 2022 as a result of the Company’s impairment review performed annually during the fourth quarter or during any other quarters of fiscal year 2022. 

Finite-Lived Intangible Assets

Finite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances occur that indicate that the carrying value of an asset (or asset group) may not be recoverable. The Company’s impairment review requires significant judgment by management, including estimating the future success of product lines, future sales volumes, revenue and expense growth rates, alternative uses for the assets and proceeds from the disposal of the assets. The Company reviews business plans for possible impairment indicators. The risk of impairment is initially assessed based on an estimate of the undiscounted cash flows at the lowest level for which identifiable cash flows exist. The asset (or asset group) is not recoverable when the carrying value of the asset exceeds the estimated future undiscounted cash flows generated by the asset. When impairment is indicated, an impairment charge is recorded for the difference between the asset’s (or asset group’s) carrying value and its estimated fair value. Depending on the asset, estimated fair value may be determined either by use of a DCF method or, if available, by reference to estimated selling values of assets in similar condition. These approaches require significant judgments in determining the assumptions utilized in the DCF or the selection of comparable assets, as applicable. Future changes in such estimates or the use of alternative assumptions could result in significantly different estimates of the fair values.

During the third quarter of fiscal year 2021, as a result of the interim impairment assessments performed on various VMS assets, a $14 impairment charge to finite-lived intangible assets was recorded. Additionally during the fourth quarter of fiscal year 2021, an impairment charge of $14 was recorded related to other intangible assets with finite lives that were no longer expected to be recoverable due to a pending exit from a Professional Products SBU supplier relationship. 

No significant impairments for finite-lived intangible assets were identified in fiscal year 2022.

15

----

Income Taxes

The Company’s effective tax rate is based on income by tax jurisdiction, statutory tax rates and tax planning opportunities available to the Company in the various jurisdictions in which the Company operates. Significant judgment is required in determining the Company’s effective tax rate and in evaluating its tax positions.

The Company maintains valuation allowances when it is likely that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the Company’s income tax provision in the period of change. In determining whether a valuation allowance is warranted, the Company takes into account many factors, including the specific tax jurisdiction, both historical and projected future earnings, carryback and carryforward periods and tax planning strategies. Many of the judgments made in adjusting valuation allowances involve assumptions and estimates that are highly subjective. Valuation allowances maintained by the Company relate mostly to deferred tax assets arising from the Company’s currently anticipated inability to use net operating losses and tax credits in certain foreign countries.

In addition to valuation allowances, the Company establishes uncertain tax positions when such tax positions do not meet certain recognition thresholds or measurement standards as defined by generally accepted accounting principles. These uncertain tax positions are adjusted as a result of changes in factors such as tax legislation, interpretations of laws by courts, rulings by tax authorities, new audit developments, changes in estimates and the expiration of the statute of limitations. Amounts for uncertain tax positions are adjusted in quarters when new information becomes available or when positions are effectively settled. Many of the judgments made in adjusting uncertain tax positions involve assumptions and estimates regarding audit outcomes and the timing of audit settlements, which are often uncertain and subject to change.

Venture Agreement Terminal Obligation 

The Company has a Venture Agreement with P&G for the Company’s Glad bags and wraps business. As of June 30, 2022 and June 30, 2021, P&G had a 20% interest in the venture. Upon termination of the agreement, currently set for January 2026, unless the parties agree to a further extension, the Company is required to purchase P&G’s 20% interest for cash at fair value as established by predetermined valuation procedures. The Company’s obligation to purchase P&G’s interest is reflected in Other liabilities. 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. See Notes to Consolidated Financial Statements for additional information on the Venture Agreement.

The estimated fair value of P&G’s interest may increase or decrease up until any such purchase by the Company of P&G’s interest. The Company uses the DCF method under the income approach to estimate the fair value of P&G’s interest. Under this approach, the Company estimates the future cash flows and discounts these cash flows at a rate of return that reflects its risk. The cash flows used are consistent with those the Company uses in its internal planning, which gives consideration to actual business trends experienced and the long-term business strategy. The other key assumptions and estimates used include, but are not limited to, net sales and expense growth rates, commodity prices, foreign exchange rates, discount rates, inflation and terminal growth rates. 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 June 30, 2022 were to increase or decrease by 100 basis points, the estimated fair value of P&G’s interest would decrease by approximately $75 or increase by approximately $98, respectively. Such changes would affect the amount of future charges to Cost of products sold. 

SUMMARY OF NON-GAAP FINANCIAL MEASURES

The non-GAAP financial measures that may be included in this MD&A and Exhibit 99.2 and the reasons management believes they are useful to investors are described below. 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.

Free cash flow is calculated as net cash provided by operations less capital expenditures. The Company’s management uses this measure and free cash flow as a percentage of net sales to help assess the cash generation ability of the business and funds available for investing activities, such as acquisitions, investing in the business to drive growth, and financing activities, including debt payments, dividend payments and stock repurchases. Free cash flow does not represent cash available only for discretionary expenditures, since the Company has mandatory debt service requirements and other contractual and non-discretionary expenditures. Refer to “Free cash flow” and “Free cash flow as a percentage of net sales” above for a reconciliation of these non-GAAP measures.

16

----

EBIT represents earnings before income taxes, interest income and interest expense. EBIT margin is the ratio of EBIT to net sales. The Company’s management believes these measures provide useful additional information to investors to enhance their understanding about trends in the Company’s operations and are useful for period-over-period comparisons.

Economic profit (EP) is defined by the Company as earnings before income taxes, excluding certain U.S. GAAP items (such as asset impairments, charges related to digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions and other non-recurring or unusual items) 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). EP is a key financial metric that the Company’s management uses to evaluate business performance and allocate resources, and is a component in determining employee incentive compensation. The Company’s management believes EP provides additional perspective to investors about financial returns generated by the business and represents profit generated over and above the cost of capital used by the business to generate that profit. Refer to Exhibit 99.2 for a reconciliation of EP to earnings before income taxes.

Organic sales growth / (decrease) is defined as net sales growth excluding the effect of foreign exchange rate changes and any acquisitions and divestitures. Management believes that the presentation of organic sales growth / (decrease) is useful to investors because it excludes sales from any acquisitions and divestitures, which results in a comparison of sales only from the businesses that the Company was operating and expects to continue to operate throughout the relevant periods, and the Company’s estimate of the impact of foreign exchange rate changes, which are difficult to predict, and out of the control of the Company and management. 

The following table provides a reconciliation of organic sales growth / (decrease) (non-GAAP) to net sales growth / (decrease) (GAAP), the most comparable GAAP measure:

|                                              |                                              |           |               |               |               |   |               |   |               |   |  |  |  |  |  |  |  |
|----------------------------------------------|----------------------------------------------|-----------|---------------|---------------|---------------|---|---------------|---|---------------|---|--|--|--|--|--|--|--|
|                                              | Twelve Months Ended June 30, 2022            |
|                                              | Percentage change versus the year-ago period |
|                                              | Health and Wellness                          | Household | Lifestyle     | International | Total         |
| Net sales growth / (decrease) (GAAP)         | (10)                                         | %         | —  | %             | 3        | % | 2        | % | (3)           | % |
| Add: Foreign Exchange                        | —                                 |           | —  |               | —  |   | 4        |   | 1        |   |
| Add/(Subtract): Divestitures/Acquisitions    | —                                 |           | —  |               | —  |   | —  |   | —  |   |
| Organic sales growth / (decrease) (non-GAAP) | (10)                                         | %         | —  | %             | 3        | % | 6        | % | (2)           | % |

17

----

CAUTIONARY STATEMENT

This Annual Report on Form 10-K (this Report), including the exhibits hereto and the information incorporated by reference herein, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, among others, statements related to the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of governments, consumers, customers, suppliers, employees and the Company, on our business, operations, employees, financial condition and results of operations, and any such forward-looking statements, whether concerning the COVID-19 pandemic or otherwise, involve risks, assumptions and uncertainties. Except for historical information, statements about future volumes, sales, organic sales growth, foreign currencies, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, foreign currency exchange rates, tax rates, cash flows, plans, objectives, expectations, growth or profitability are forward-looking statements based on management’s estimates, beliefs, assumptions and projections. Words such as “could,” “may,” “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “predicts,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that could affect performance and cause results to differ materially from management’s expectations are described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report, as updated from time to time in the Company’s Securities and Exchange Commission filings. These factors include, but are not limited to:

•the impact of the changing retail environment, including the growth of alternative retail channels and business models, and changing consumer preferences;

•volatility and increases in the costs of raw materials, energy, transportation, labor and other necessary supplies or services;

•the ability of the Company to drive sales growth, increase prices and market share, grow its product categories and manage favorable product and geographic mix;

•risks related to supply chain issues, product shortages and disruptions to the business, as a result of increased supply chain dependencies due to an expanded supplier network and a reliance on certain single-source suppliers;

•the ongoing COVID-19 pandemic and related impacts, including on the availability of, and efficiency of the supply, manufacturing and distribution systems for, the Company’s products, including any significant disruption to such systems; on the demand for and sales of the Company’s products; and on worldwide, regional and local adverse economic conditions

•intense competition in the Company’s markets;

•unfavorable general economic and political conditions beyond our control, including recent supply chain disruptions, labor shortages, wage pressures, rising inflation, fuel and energy costs, foreign currency exchange rate fluctuations, weather events or natural disasters, disease outbreaks or pandemics, such as COVID-19, terrorism, and unstable geopolitical conditions, including the conflict in Ukraine;

•risks related to the Company’s use of and reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or Company information, or service interruptions, especially at a time when a large number of the Company’s employees are working remotely and accessing its technology infrastructure remotely;

•the ability of the Company to implement and generate cost savings and efficiencies, and successfully implement its business strategies, including achieving anticipated results and cost savings from the implementation of the streamlined operating model;

•dependence on key customers and risks related to customer consolidation and ordering patterns;

•the Company’s ability to attract and retain key personnel, which may continue to be impacted by challenges in the labor market, such as wage inflation and sustained labor shortages;

•the Company’s ability to maintain its business reputation and the reputation of its brands and products;

•lower revenue, increased costs or reputational harm resulting from government actions and compliance with regulations, or any material costs imposed by changes in regulation;

18

----

•the ability of the Company to successfully manage global political, legal, tax and regulatory risks, including changes in regulatory or administrative activity;

•risks related to international operations and international trade, including changing macroeconomic conditions as a result of inflation, volatile commodity prices and increases in raw and packaging materials prices, labor, energy and logistics; global economic or political instability; foreign currency fluctuations, such as devaluations, and foreign currency exchange rate controls; changes in governmental policies, including trade, travel or immigration restrictions, new or additional tariffs, and price or other controls; labor claims and civil unrest; continued high levels of inflation in Argentina; potential disruption from wars and military conflicts, including the conflict in Ukraine; impact of the United Kingdom’s exit from the European Union; potential negative impact and liabilities from the use, storage and transportation of chlorine in certain international markets where chlorine is used in the production of bleach; widespread health emergencies, such as COVID-19; and the possibility of nationalization, expropriation of assets or other government action;

•the impact of Environmental, Social, and Governance (ESG) issues, including those related to climate change and sustainability on our sales, operating costs or reputation;

•the ability of the Company to innovate and to develop and introduce commercially successful products, or expand into adjacent categories and countries;

•the impact of product liability claims, labor claims and other legal, governmental or tax proceedings, including in foreign jurisdictions and in connection with any product recalls;

•risks relating to acquisitions, new ventures and divestitures, and associated costs; and the ability to complete announced transactions and, if completed, integration costs and potential contingent liabilities related to those transactions;

•the accuracy of the Company’s estimates and assumptions on which its financial projections, including any sales or earnings guidance or outlook it may provide from time to time, are based;

•risks related to additional increases in the estimated fair value of P&G’s interest in the Glad business;

•environmental matters, including costs associated with the remediation and monitoring of past contamination, and possible increases in costs resulting from actions by relevant regulators, and the handling and/or transportation of hazardous substances; 

•the Company’s ability to effectively utilize, assert and defend its intellectual property rights, and any infringement or claimed infringement by the Company of third-party intellectual property rights;

•the performance of strategic alliances and other business relationships;

•the effect of the Company’s indebtedness and credit rating on its business operations and financial results and the Company’s ability to access capital markets and other funding sources;

•the Company’s ability to pay and declare dividends or repurchase its stock in the future;

•the impacts of potential stockholder activism; and

•risks related to any litigation associated with the exclusive forum provision in the Company’s bylaws. 

The Company’s forward-looking statements in this Report are based on management’s current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this Report. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws. In this Report, unless the context requires otherwise, the terms “the Company,” “Clorox,” “we,” “us,” and “our” refer to The Clorox Company and its subsidiaries.

19

----

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of its Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management evaluated the effectiveness of the Company’s internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework published in 2013. Management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2022, and concluded that it is effective.

The Company’s independent registered public accounting firm, Ernst & Young LLP, has audited the effectiveness of the Company’s internal control over financial reporting as of June 30, 2022, as stated in their report, which is included herein.

20

----

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of The Clorox Company

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Clorox Company (the Company) as of June 30, 2022 and 2021, the related consolidated statements of earnings, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended June 30, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated August 10, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

21

----

|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |  |  |  |
|---------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
|                           | Valuation of Goodwill and Trademarks with Indefinite Lives                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Description of the Matter | At June 30, 2022, the Company’s goodwill was $1.6 billion and represented 25% of total assets; trademarks with indefinite lives was $668 million and represented 11% of total assets. As discussed in Note 1 of the consolidated financial statements, goodwill and trademarks with indefinite lives are tested by the Company’s management for impairment at least annually, in the fiscal fourth quarter, unless there are indications of impairment at other points throughout the year. Goodwill is tested for impairment at the reporting unit level.Auditing the Company’s annual impairment test for goodwill and trademarks with indefinite lives is complex and highly judgmental and required the involvement of a valuation specialist due to the significant judgment in estimating the fair value of reporting units and trademarks with indefinite lives. In particular, the fair value estimates of reporting units with fair values that do not significantly exceed or that fall below their carrying values are sensitive to assumptions such as net sales growth rates, gross margins and discount rates. Trademarks with indefinite lives with fair values that do not significantly exceed or that fall below their carrying values are sensitive to assumptions such as net sales growth rates, discount rates and royalty rates. All of these assumptions are sensitive to and affected by expected future market or economic conditions, particularly those in emerging markets, and industry and company-specific qualitative factors. |

|                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  |  |
|------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill and trademarks impairment review process. This included evaluating controls over the Company’s budgetary and forecasting process used to develop the estimated future earnings and cash flows used in estimating the fair value of reporting units and trademarks with indefinite lives. We also tested controls over management’s review of the data used in their valuation models and review of the significant assumptions such as estimation of net sales, expense growth rates and terminal growth rates.To test the estimated fair value of the Company’s reporting units and trademarks with indefinite lives (with fair values that do not significantly exceed or that fall below carrying values), we performed audit procedures that included, among others, assessing the methodologies, testing the significant assumptions discussed above used to develop the estimates of future earnings and cash flows and testing the completeness and accuracy of the underlying data. We compared the significant assumptions used by management to current industry and economic trends, the Company’s historical results and other guideline companies within the same industry, and we evaluated whether changes in the Company’s business would affect the significant assumptions. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the change in the fair value of the reporting units and trademarks with indefinite lives resulting from changes in these assumptions. We involved our valuation specialists to assist in reviewing the valuation methodology and testing the terminal growth rates, discount rates and royalty rates.  In addition, for goodwill we also tested the Company’s calculation of implied multiples of the reporting units, compared them to guideline companies and evaluated the resulting premium.  For trademarks with indefinite lives, where applicable, we also assessed whether the assumptions used were consistent with those used in the goodwill impairment review process. |

22

----

|                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |  |  |
|------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
|                                          | Valuation of Venture Agreement Terminal Obligation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Description of the Matter                | As discussed in Note 8 of the consolidated financial statements, the Company has an agreement with The Proctor & Gamble Company (P&G) for the Company’s Glad bags and wraps business, for which the Company is required to purchase P&G’s 20% interest in the venture for cash at fair value of the global Glad business upon termination of the agreement. At June 30, 2021, the fair value of $468 million has been recognized as a venture agreement terminal obligation and represented 9% of total liabilities. Auditing the Company’s Glad venture agreement terminal obligation is complex and highly judgmental and required the involvement of a valuation specialist due to the significant judgment in estimating the fair value of the global Glad business. In particular, the fair value estimate is sensitive to assumptions such as net sales growth rates, gross margins, discount rate and commodity prices. These assumptions are sensitive to and affected by expected future market or economic conditions, particularly those in emerging markets, and industry and company-specific qualitative factors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the venture agreement terminal obligation valuation review process. This included controls over the Company’s budgetary and forecasting process used to develop the estimated fair value of the global Glad business. We also tested management’s controls over the data used in their valuation models and review of the significant assumptions such as estimation of net sales, expense growth rates, terminal growth rates and commodity prices.To test the estimated fair value of the venture agreement terminal obligation, we performed audit procedures that included, among others, assessing the methodologies, testing the significant assumptions discussed above used to develop estimates of future earnings and cash flows, and testing the completeness and accuracy of the underlying data. We compared the significant assumptions used by management to current industry and economic trends, the Company’s historical results and other guideline companies within the same industry, and we evaluated whether changes in the Company’s business, including shifts in consumer demands and commodity prices, would affect the significant assumptions. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the change in the fair value of the venture agreement terminal obligation resulting from changes in these assumptions.  We involved our valuation specialists to assist in reviewing the valuation methodology and testing the terminal growth rates and discount rates. |

/s/ Ernst & Young LLPWe have served as the Company’s auditor since 2003.San Francisco, CAAugust 10, 2022 23REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of The Clorox CompanyOpinion on Internal Control Over Financial ReportingWe have audited The Clorox Company’s internal control over financial reporting as of June 30, 2022, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, The Clorox Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of June 30, 2022, based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of The Clorox Company as of June 30, 2022 and 2021, the related consolidated statements of earnings, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended June 30, 2022, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated August 10, 2022 expressed an unqualified opinion thereon.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.Definition and Limitations of Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate./s/ Ernst & Young LLPSan Francisco, CAAugust 10, 2022 24CONSOLIDATED STATEMENTS OF EARNINGSThe Clorox CompanyYears ended June 30Dollars in millions, except per share data202220212020Net sales$7,107 $7,341 $6,721 Cost of products sold4,562 4,142 3,658 Gross profit2,545 3,199 3,063 Selling and administrative expenses954 1,004 969 Advertising costs709 790 675 Research and development costs132 149 145 Goodwill, trademark and other asset impairments— 329 — Interest expense106 99 99 Other (income) expense, net37 (72)(10)Earnings before income taxes607 900 1,185 Income taxes136 181 246 Net earnings471 719 939 Less: Net earnings attributable to noncontrolling interests9 9 — Net earnings attributable to Clorox$462 $710 $939 Net earnings per share attributable to CloroxBasic net earnings per share$3.75 $5.66 $7.46 Diluted net earnings per share$3.73 $5.58 $7.36 Weighted average shares outstanding (in thousands)Basic123,113 125,570 125,828 Diluted123,906 127,299 127,671 See Notes to Consolidated Financial Statements25CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEThe Clorox CompanyYears ended June 30  Dollars in millions202220212020Net earnings$471 $719 $939 Other comprehensive (loss) income:Foreign currency adjustments, net of tax(45)47 (36)Net unrealized gains (losses) on derivatives, net of tax100 39 5 Pension and postretirement benefit adjustments, net of tax12 8 (7)Total other comprehensive (loss) income, net of tax67 94 (38)Comprehensive income538 813 901 Less: Total comprehensive income attributable to noncontrolling interests9 9 — Total comprehensive income attributable to Clorox$529 $804 $901 See Notes to Consolidated Financial Statements26CONSOLIDATED BALANCE SHEETSThe Clorox CompanyAs of June 30Dollars in millions, except per share data20222021ASSETS  Current assetsCash and cash equivalents$183 $319 Receivables, net681 604 Inventories, net755 752 Prepaid expenses and other current assets106 154 Total current assets1,725 1,829 Property, plant and equipment, net1,334 1,302 Operating lease right-of-use assets342 332 Goodwill1,558 1,575 Trademarks, net687 693 Other intangible assets, net197 225 Other assets315 378 Total assets$6,158 $6,334 LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent liabilitiesNotes and loans payable$237 $— Current maturities of long-term debt— 300 Current operating lease liabilities78 81 Accounts payable and accrued liabilities1,469 1,675 Total current liabilities1,784 2,056 Long-term debt2,474 2,484 Long-term operating lease liabilities314 301 Other liabilities791 834 Deferred income taxes66 67 Total liabilities5,429 5,742 Commitments and contingenciesStockholders’ equityPreferred stock: $1.00 par value; 5,000,000 shares authorized; none issued or outstanding— — Common stock: $1.00 par value; 750,000,000 shares authorized; 130,741,461 shares issued as of June 30, 2022 and 2021; and 123,152,132 and 122,780,220 shares outstanding as of June 30, 2022 and 2021, respectively131 131 Additional paid-in capital1,202 1,186 Retained earnings1,048 1,036 Treasury stock, at cost: 7,589,329 and 7,961,241 shares as of June 30, 2022 and 2021, respectively(1,346)(1,396)Accumulated other comprehensive net (loss) income(479)(546)Total Clorox stockholders’ equity556 411 Noncontrolling interests173 181 Total stockholders’ equity729 592 Total liabilities and stockholders’ equity$6,158 $6,334 See Notes to Consolidated Financial Statements27CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITYThe Clorox CompanyCommon StockAdditionalPaid-inCapitalTreasury StockAccumulatedOtherComprehensiveNet (Loss) IncomeNon-controlling interestsTotal Stockholders’ Equity(Dollars in millions except per share data; shares in thousands)AmountSharesRetainedEarningsAmountSharesBalance as of June 30, 2019$159 158,741 $1,046 $3,150 $(3,194)(33,055)$(602)$— $559 Cumulative effect of accounting changes (1)— — — 22 — — — — 22 Net earnings— — — 939 — — — — 939 Other comprehensive (loss) income— — — — — — (38)— (38)Dividends to Clorox stockholders ($4.29 per share declared)— — — (544)— — — — (544)Stock-based compensation— — 50 — — — — — 50 Other employee stock plan activities— — 41 — 121 2,043 — — 162 Treasury stock purchased— — — — (242)(1,531)— — (242)Balance as of June 30, 2020159 158,741 1,137 3,567 (3,315)(32,543)(640)— 908 Net earnings— — — 710 — — — 9 719 Other comprehensive (loss) income— — — — — — 94 — 94 Dividends to Clorox stockholders ($4.49 per share declared)— — — (564)— — — — (564)Dividends to noncontrolling interests— — — — — — — (26)(26)Business combinations including purchase accounting adjustments— — — — — — — 198 198 Stock-based compensation— — 50 — — — — — 50 Other employee stock plan activities— — (1)(37)156 1,340 — — 118 Treasury stock purchased— (905)(4,758)— — (905)Treasury stock retirement(28)(28,000)(2,640)2,668 28,000 — — — Balance as of June 30, 2021131 130,741 1,186 1,036 (1,396)(7,961)(546)181 592 Net earnings— — — 462 — — — 9 471 Other comprehensive (loss) income— — — — — — 67 — 67 Dividends to Clorox stockholders ($3.48 per share declared)— — — (430)— — — — (430)Dividends to noncontrolling interests— — — — — — — (17)(17)Stock-based compensation— — 52 — — — — — 52 Other employee stock plan activities— — (36)(20)75 524 — — 19 Treasury stock purchased— — — — (25)(152)— — (25)Balance as of June 30, 2022$131 130,741 $1,202 $1,048 $(1,346)(7,589)$(479)$173 $729 (1)As a result of adopting ASU No. 2016-02, “Leases (ASC 842),” on July 1, 2019, the Company recorded a cumulative effect of initially applying the newguidance as an adjustment to the fiscal year 2020 opening balance of Retained earnings. See Notes to Consolidated Financial Statements28CONSOLIDATED STATEMENTS OF CASH FLOWSThe Clorox CompanyYears ended June 30Dollars in millions202220212020Operating activities:Net earnings$471 $719 $939 Adjustments to reconcile net earnings to net cash provided by operations:Depreciation and amortization224 211 180 Stock-based compensation52 50 50 Deferred income taxes5 (32)(2)Goodwill, trademark and other asset impairments— 329 — Settlement of interest rate derivative contracts114 — — Other19 10 30 Changes in:Receivables, net(84)82 (27)Inventories, net(18)(282)50 Prepaid expenses and other current assets16 (30)2 Accounts payable and accrued liabilities(47)311 291 Operating lease right-of-use assets and liabilities, net(1)(2)19 Income taxes payable/prepaid35 (90)14 Net cash provided by operations786 1,276 1,546