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Published: 2024-02-01 00:00:00 ET
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EX-99.2 3 ex992-supplementalinformat.htm EX-99.2 Document
The Clorox Company
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Three months ended Dec. 31, 2023
Percentage change versus the year-ago period
Reported
(GAAP)
Net Sales
Growth/ (Decrease)
Reported VolumeAcquisitions & DivestituresForeign Exchange Impact
Price
Mix and
Other (1)
Organic
Sales
Growth/ (Decrease)
(Non-GAAP) (2)
Organic
Volume (3)
Health and Wellness25%22%—%—%3%25%22%
Household94——594
Lifestyle2124——(3)2124
International96—(22)25316
Total Company (4)
16%13%—%(4)%7%20%13%
Six months ended Dec. 31, 2023
Percentage change versus the year-ago period
Reported
(GAAP)
Net Sales
Growth/ (Decrease)
Reported VolumeAcquisitions & DivestituresForeign Exchange Impact
Price
Mix and
Other (1)
Organic
Sales
Growth/ (Decrease)
(Non-GAAP) (2)
Organic
Volume (3)
Health and Wellness(1)%(6)%—%—%5%(1)%(6)%
Household(7)(12)——5(7)(12)
Lifestyle(3)(7)——4(3)(7)
International2(4)—(18)2420(4)
Total Company (4)
(2)%(7)%—%(3)%8%1%(7)%
(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 “Non-GAAP Financial Information” below for reconciliation of organic sales growth / (decrease) to net sales growth / (decrease), the most directly comparable GAAP financial information.
(3)Organic volume represents volume excluding the effect of any acquisitions and divestitures.
(4)Total company includes Corporate and Other.

Non-GAAP Financial Information
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 throughout the relevant periods, and the impact of foreign exchange rate changes, which are out of the control of the company and management. However, organic sales growth / (decrease) may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded.
The Clorox Company
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The following table provides a reconciliation of organic sales growth / (decrease) (non-GAAP) to net sales growth / (decrease) (GAAP), the most comparable GAAP measure:
Three months ended Dec. 31, 2023
Percentage change versus the year-ago period
Health and WellnessHouseholdLifestyleInternational
Total Company (1)
Net sales growth / (decrease) (GAAP)25%9%21%9%16%
Add: Foreign exchange———224
Add/(Subtract): Divestitures/acquisitions—————
Organic sales growth / (decrease) (non-GAAP)25%9%21%31%20%
Six months ended Dec. 31, 2023
Percentage change versus the year-ago period
Health and WellnessHouseholdLifestyleInternational
Total Company (1)
Net sales growth / (decrease) (GAAP)(1)%(7)%(3)%2%(2)%
Add: Foreign Exchange———183
Add/(Subtract): Divestitures/Acquisitions—————
Organic sales growth / (decrease) (non-GAAP)(1)%(7)%(3)%20%1%

(1)Total Company includes Corporate and Other.







The Clorox Company
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Supplemental Unaudited Condensed Information – Gross Margin Drivers
The table below provides details on the drivers of gross margin change versus the year-ago period.
Driver
Gross Margin Change vs. Prior Year (basis points) 
FY23FY24
Q1Q2Q3Q4FYQ1Q2
Cost Savings+180+170+150+210+180+220+170
Price Changes+530+680+750+670+660+470+380
Market Movement (commodities)-330-240-230-230-260-200
Manufacturing & Logistics
-350-100-120-140-1800+10
All other (1) (2) (3)
-140-190+40+50-40-430+170
Change vs prior year-110+320+590+560+360+240+730
  
Gross Margin (%)36.0%36.2%41.8%42.7%39.4%38.4%43.5%

(1)In Q1 of fiscal year 2023, "All other" includes the negative impact from lower shipment volumes.
(2)In Q2 of fiscal year 2023, "All other" includes the negative impact from mix and assortment.
(3)In Q1 of fiscal year 2024, "All other" includes the impact from lower shipment volumes and mix and assortment.
(4)In Q2 of fiscal year 2024, "All other" includes the positive impact from higher shipment volumes and the negative impact from foreign exchange.








The Clorox Company
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Supplemental Unaudited Condensed Information – Cash Flow
For the quarter ended December 31, 2023

Capital expenditures for the second quarter were $52 million versus $42 million in the year-ago quarter.
Depreciation and amortization expense for the second quarter was $57 million versus $58 million in the year-ago quarter.
Net cash provided by operations in the second quarter was $153 million, or 7.7% of net sales.


Supplemental Unaudited Condensed Information – Free Cash Flow
Fiscal Year Free Cash Flow Reconciliation

Dollars in millions and percentages based on rounded numbers
 
Q2
Fiscal
YTD
2024
Q2
Fiscal
YTD
 2023
Net cash provided by operations – GAAP$173$387
Less: Capital expenditures$76$88
Free cash flow – non-GAAP (1)
$97$299
Free cash flow as a percentage of net sales – non-GAAP (1)
2.9%8.7%
Net sales$3,376$3,455

(1)In accordance with the SEC's Regulation G, this schedule provides the definition of certain non-GAAP measures and the reconciliation to the most closely related GAAP measure. Management uses free cash flow 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. In addition, free cash flow may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be read in connection with the company’s consolidated financial statements presented in accordance with GAAP.




The Clorox Company
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Supplemental Unaudited Reconciliation of Earnings (Losses) Before Income Taxes to EBIT(1)(3) and Adjusted EBIT(2)(3)
Dollars in millions and percentages based on rounded numbers

 FY 2023FY 2024
          
 Q1Q2Q3Q4FYQ1Q2
 9/30/202212/31/20223/31/20236/30/20236/30/20239/30/202312/31/2023
Earnings before income taxes$116$130($245)$237$238$29$136
Interest income(2)(3)(4)(7)(16)(10)(7)
Interest expense22232421902126
EBIT (1)(3)
$136$150($225)$251$312$40$155
EBIT margin (1)(3)
7.8%8.7%-11.7 %12.4%4.2%2.9%7.8%
Pension settlement charge (4)
——————171
Cyberattack costs (5)
—————2425
VMS impairment (6)
——445—445——
Streamlined operating model (7)
194211660—3
Digital capabilities and productivity enhancements investment (8)
202528271002732
Adjusted EBIT – non-GAAP (2)(3)
$175 $179$269$294$917$91$386
Adjusted EBIT margin (2)(3)
10.1%10.4%14.0%14.6%12.4%6.6%19.4%
Net sales$1,740$1,715$1,915$2,019$7,389$1,386$1,990
(1)EBIT (a non-GAAP measure) represents earnings (losses) before income taxes (a GAAP measure), excluding interest income and interest expense, as reported above. EBIT margin is the ratio of EBIT to net sales.
(2)Adjusted EBIT (a non-GAAP measure) represents earnings (losses) before income taxes (a GAAP measure), excluding interest income, interest expense and other significant items that are nonrecurring or unusual (such as the pension settlement charge, incremental costs related to the cyberattack, asset impairments, charges related to the streamlined operating model, charges related to the digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions and other nonrecurring or unusual items as reported above). Adjusted EBIT margin is the ratio of adjusted EBIT to net sales.Refer to the Non-GAAP Financial Information within the earnings release for further discussion on the adjustments presented.
(3)In accordance with the SEC's Regulation G, this schedule provides the definition of certain non-GAAP measures and the reconciliation to the most closely related GAAP measure. Management believes the presentation of EBIT, EBIT margin, adjusted EBIT and adjusted EBIT margin provides useful additional information to investors about trends in the company's operations and is useful for comparability of performance over time. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the company’s consolidated financial statements presented in accordance with GAAP.
(4)Represents costs related to related to the settlement of the domestic qualified pension plan.
(5)Reflects charges related to the cyberattack incurred during fiscal year 2024. These costs relate primarily to third-party consulting services, including IT recovery and forensic experts and other professional services incurred to investigate and remediate the attack, as well as incremental operating costs from the resulting disruption to the company's business operations.
(6)Reflects goodwill and trademarks impairment charges related to the VMS business.
(7)Reflects the restructuring and related implementation costs, net incurred by the company as part of the streamlined operating model. These expenses were primarily attributable to employee-related costs, as well as implementation and other associated costs.
(8)Reflects the operating expenses incurred by the company related to its digital capabilities and productivity enhancements investment. The majority of these expenses relate to external consulting fees. The remaining expenses relate to internal IT project management and supporting personnel costs and other costs.



The Clorox Company
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Supplemental Unaudited Reconciliation of Adjusted Earnings per Share (8)(9)
(Dollars in millions except per share data)
Diluted earnings per share
Three months ended
12/31/202312/31/2022% Change
As reported (GAAP)$0.75$0.80(6)%
Pension settlement charge (1)
1.04— 
Cyberattack costs (2)
0.16—
Streamlined operating model (3)
0.020.02
Digital capabilities and productivity enhancements investment (4)
0.190.16
As adjusted (Non-GAAP) (8)(9)
$2.16$0.98120%
Diluted earnings per share
Six months ended
12/31/202312/31/2022% Change
As reported (GAAP)$0.92$1.49(38)%
Pension settlement charge (1)
1.04— 
Cyberattack (2)
0.30—
Streamlined operating model (3)
0.020.14
Digital capabilities and productivity enhancements investment (4)
0.360.28
As adjusted (Non-GAAP) (8)(9)
$2.64$1.9138%
Full year 2024 outlook (estimated range)
Diluted earnings per share
LowHigh
As estimated (GAAP)$3.06$3.26
Pension settlement charge1.041.04
Cyberattack costs (5)
0.300.30
Streamlined operating model (6)
0.200.20
Digital capabilities and productivity enhancements investment (7)
0.700.70
As adjusted (Non-GAAP) (8)(9)
$5.30$5.50
(1)During both the three and six months ended Dec. 31, 2023, the company incurred approximately $171 ($130 after tax) of costs related to the settlement of the domestic qualified pension plan.
(2)During the three and six months ended Dec. 31, 2023, the company incurred approximately $25 ($19 after tax), and $49 ($37 after tax), respectively, of costs related to the cyberattack.
(3)During both the three and six months ended Dec. 31, 2023, the company incurred approximately $3 ($2 after tax), and during the three and six months ended Dec. 31, 2022, the company incurred approximately $4 ($3 after tax) and $23 ($17 after tax), respectively, of restructuring and related costs, net related to implementation of the streamlined operating model.
(4)During the three and six months ended Dec. 31, 2023, the company incurred approximately $32 ($24 after tax) and $59 ($45 after tax), respectively, and during the three and six months ended Dec, 31, 2022, the company incurred approximately $25 ($20 after tax) and $45 ($35 after tax), respectively, of operating expenses related to its digital capabilities and productivity enhancements investment.
(5)In FY24, the company expects to incur approximately $50-$60 ($38-$46 after tax) of costs related to the cyberattack.
(6)In FY24, the company expects to incur approximately $30-$40 ($23-$30 after tax) of restructuring and related costs, net related to implementation of the streamlined operating model.
(7)In FY24, the company expects to incur approximately $115-$135 ($87-$102 after tax) of operating expenses related to its digital capabilities and productivity enhancements investment.
(8)Adjusted EPS is defined as diluted earnings per share that excludes or has otherwise been adjusted for significant items that are nonrecurring or unusual. The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.
(9)Adjusted EPS is supplemental information that management uses to help evaluate the company's historical and prospective financial performance on a consistent basis over time. Management believes that by adjusting for certain items affecting comparability of performance over time, such as the pension settlement charge, incremental costs related to the cyberattack, asset impairments, charges related to the streamlined operating model, charges related to the digital capabilities and productivity enhancements investment, significant losses/(gains) related to acquisitions, and other nonrecurring or unusual items, investors and management are able to gain additional insight into the company's underlying operating performance on a consistent basis over time. However, adjusted EPS may not be the same as similar measures provided by other companies due to potential differences in methods of calculation or differences in which items are incorporated into these adjustments. Refer to the Non-GAAP Financial Information within the second quarter of fiscal year 2024 earnings release for further discussion on the adjustments presented.