CLOROX CO /DE/, 10-Q filed on 11/3/2011
Quarterly Report
Document And Entity Information
3 Months Ended
Sep. 30, 2011
Document And Entity Information [Abstract]
 
Document Type
10-Q 
Amendment Flag
FALSE 
Document Period End Date
Sep. 30, 2011 
Document Fiscal Year Focus
2012 
Document Fiscal Period Focus
Q1 
Entity Registrant Name
CLOROX CO /DE/ 
Entity Central Index Key
0000021076 
Current Fiscal Year End Date
--06-30 
Entity Filer Category
Large Accelerated Filer 
Entity Common Stock, Shares Outstanding
131,904,793 
Condensed Consolidated Statements Of Earnings (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
3 Months Ended
Sep. 30,
2011
2010
Condensed Consolidated Statements Of Earnings [Abstract]
 
 
Net sales
$ 1,305 
$ 1,266 
Cost of products sold
759 
705 
Gross profit
546 
561 
Selling and administrative expenses
190 
181 
Advertising costs
118 
118 
Research and development costs
28 
29 
Interest expense
29 
32 
Other income, net
(6)
(1)
Earnings from continuing operations before income taxes
187 
202 
Income taxes on continuing operations
57 
62 
Earnings from continuing operations
130 
140 
Discontinued operations:
 
 
Earnings from Auto businesses, net of tax
 
16 
Gain on sale of Auto businesses, net of tax
 
60 
Earnings from discontinued operations
 
76 
Net earnings
$ 130 
$ 216 
Basic
 
 
Continuing operations
$ 0.99 
$ 0.99 
Discontinued operations
 
$ 0.55 
Basic net earnings per share
$ 0.99 
$ 1.54 
Diluted
 
 
Continuing operations
$ 0.98 
$ 0.98 
Discontinued operations
 
$ 0.54 
Diluted net earnings per share
$ 0.98 
$ 1.52 
Weighted average shares outstanding
 
 
Basic
131,968 
139,475 
Diluted
133,611 
140,932 
Dividend declared per share
$ 0.60 
$ 0.55 
Condensed Consolidated Balance Sheets (USD $)
In Millions
Sep. 30, 2011
Jun. 30, 2011
ASSETS
 
 
Cash and cash equivalents
$ 270 
$ 259 
Receivables, net
439 
525 
Inventories, net
407 
382 
Other current assets
122 
113 
Total current assets
1,238 
1,279 
Property, plant and equipment, net
1,028 
1,039 
Goodwill
1,053 
1,070 
Trademarks, net
547 
550 
Other intangible assets, net
79 
83 
Other assets
132 
142 
Total assets
4,077 
4,163 
LIABILITIES AND STOCKHOLDERS' DEFICIT
 
 
Notes and loans payable
440 
459 
Accounts payable
357 
423 
Accrued liabilities
434 
442 
Income taxes payable
37 
41 
Total current liabilities
1,268 
1,365 
Long-term debt
2,122 
2,125 
Other liabilities
626 
619 
Deferred income taxes
137 
140 
Total liabilities
4,153 
4,249 
Contingencies
 
 
Stockholders' deficit
 
 
Preferred stock: $0.001 par value; 5,000,000 shares authorized; none issued or outstanding
 
 
Common stock: $1.00 par value; 750,000,000 shares authorized; 158,741,461 shares issued at September 30, 2011 and June 30, 2011; and 131,904,793 and 131,066,864 shares outstanding at September 30, 2011 and June 30, 2011, respectively
159 
159 
Additional paid-in capital
611 
632 
Retained earnings
1,185 
1,143 
Treasury shares, at cost: 26,836,668 and 27,674,597 shares at September 30, 2011 and June 30, 2011, respectively
(1,717)
(1,770)
Accumulated other comprehensive net losses
(314)
(250)
Stockholders' deficit
(76)
(86)
Total liabilities and stockholders' deficit
$ 4,077 
$ 4,163 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2011
Jun. 30, 2011
Condensed Consolidated Balance Sheets [Abstract]
 
 
Preferred stock, par value
$ 0.001 
$ 0.001 
Preferred stock, shares authorized
5,000,000 
5,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value
$ 1 
$ 1 
Common stock, shares authorized
750,000,000 
750,000,000 
Common stock, shares issued
158,741,461 
158,741,461 
Common stock, shares outstanding
131,904,793 
131,066,864 
Treasury shares, at cost
26,836,668 
27,674,597 
Condensed Consolidated Statements Of Cash Flows (USD $)
In Millions
3 Months Ended
Sep. 30,
2011
2010
Operating activities:
 
 
Net earnings
$ 130 
$ 216 
Deduct: Earnings from discontinued operations
 
76 
Earnings from continuing operations
130 
140 
Adjustments to reconcile earnings from continuing operations to net cash provided by continuing operations:
 
 
Depreciation and amortization
46 
45 
Share-based compensation
5 
12 
Deferred income taxes
5 
(1)
Other
9 
(3)
Changes in:
 
 
Receivables, net
79 
60 
Inventories, net
(31)
(44)
Other current assets
(2)
9 
Accounts payable and accrued liabilities
(114)
(107)
Income taxes payable
4 
15 
Net cash provided by continuing operations
131 
126 
Net cash provided by discontinued operations
 
22 
Net cash provided by operations
131 
148 
Investing activities:
 
 
Capital expenditures
(37)
(34)
Net cash used for investing activities
(37)
(34)
Financing activities:
 
 
Notes and loans payable, net
(22)
134 
Treasury stock purchased
(9)
(4)
Cash dividends paid
(79)
(77)
Issuance of common stock for employee stock plans and other
33 
22 
Net cash (used for) provided by financing activities
(77)
75 
Effect of exchange rate changes on cash and cash equivalents
(6)
10 
Net increase in cash and cash equivalents
11 
199 
Cash and cash equivalents:
 
 
Beginning of period
259 
87 
End of period
$ 270 
$ 286 
Interim Financial Statements
Interim Financial Statements
NOTE 1. INTERIM FINANCIAL STATEMENTS
 
Basis of Presentation
 
The unaudited interim condensed consolidated financial statements for the three months ended September 30, 2011 and 2010, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the consolidated results of operations, financial position and cash flows of The Clorox Company and its subsidiaries (the Company) for the periods presented. The results for the interim period ended September 30, 2011, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2012, or for any future period.
 
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The information in this report should be read in conjunction with the Company's Annual Report on Form 10-K filed with the SEC for the fiscal year ended June 30, 2011, which includes a complete set of footnote disclosures, including the Company's significant accounting policies.
 
Use of Estimates
 
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ materially from estimates and assumptions made.
 
Recently Issued Accounting Pronouncements
 
On September 15, 2011, the Financial Accounting Standards Board (FASB) issued new guidance to simplify how entities test for goodwill impairment. The new guidance allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The new guidance is effective for the annual goodwill impairment test to be performed in fiscal year 2013, with early adoption permitted. The Company is currently evaluating the anticipated timing for its adoption.
Inventories, Net
Inventories, Net
NOTE 2. INVENTORIES, NET
 
Inventories, net, consisted of the following as of:
 
        9/30/2011       6/30/2011
Finished goods   $      337     $      315  
Raw materials and packaging     117       104  
Work in process     3       3  
LIFO allowances     (38 )     (29 )
Allowances for obsolescence     (12 )     (11 )
Total   $ 407     $ 382  
 
Other Liabilities
Other Liabilities
NOTE 3. OTHER LIABILITIES
 
Other liabilities consisted of the following as of:
 
    9/30/2011       6/30/2011
Venture agreement net terminal obligation       $      278   $      277
Employee benefit obligations     217     215
Taxes     90     89
Other     41     38
Total   $ 626   $ 619
Net Earnings Per Share
Net Earnings Per Share
NOTE 4. NET EARNINGS PER SHARE
 
For the three months ended September 30, 2011, no adjustments were required to be made to net earnings for computing basic and diluted EPS. The following is the reconciliation of net earnings to net earnings applicable to common stock for the three months ended September 30, 2010:
 
Earnings from continuing operations       $      140  
Earnings from discontinued operations     76  
Net earnings   $ 216  
Less: Earnings allocated to participating securities     (1 )
Net earnings applicable to common stock   $ 215  
         
The following is the reconciliation of the weighted average number of shares outstanding (in thousands) used to calculate basic EPS to those used to calculate diluted EPS:
 
       
  Three Months Ended
  9/30/2011   9/30/2010
Basic 131,968   139,475
Dilutive effect of stock options and other 1,643   1,457
Diluted 133,611   140,932
       
During the three months ended September 30, 2011 and 2010, the Company did not include stock options to purchase zero and approximately 2.1 million shares, respectively, of the Company's common stock in the calculations of diluted EPS because their exercise price was greater than the average market price, making them anti-dilutive.
 
 
Share repurchases under authorized programs were as follows:
 
            Three Months Ended
    9/30/2011           9/30/2010
    Amount       Shares
(000)		   Amount       Shares
(000)
Open-market purchase programs   $      9          129   $      -   -
Evergreen Program     -   -     4          58
Total   $ 9   129   $ 4   58
                     
The purpose of the Evergreen Program is to offset the impact of share dilution related to share-based awards.
Comprehensive Income
Comprehensive Income
NOTE 5. COMPREHENSIVE INCOME
 
Comprehensive income includes net earnings and certain adjustments that are excluded from net earnings, but included as a separate component of stockholders' deficit, net of tax. Comprehensive income was as follows:
 
               
  Three Months Ended
  9/30/2011   9/30/2010
Earnings from continuing operations $ 130         $ 140  
Earnings from discontinued operations   -       76  
Net earnings $ 130     $ 216  
Other comprehensive (losses) gains, net of tax:              
       Foreign currency translation   (39 )     34  
       Net derivative adjustments   (23 )     (2 )
       Pension and postretirement benefit adjustments   (2 )     2  
Total $      66     $      250  
           
Income Taxes
Income Taxes
NOTE 6. INCOME TAXES
 
In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter. The effective tax rate on earnings from continuing operations was 30.5% and 30.9% for the three months ended September 30, 2011 and 2010, respectively. The lower rate for the three months ended September 30, 2011, was primarily due to tax benefits associated with lower foreign taxes. The current and prior year periods also reflect benefits from tax settlements.
 
Included in the balance of unrecognized tax benefits at September 30, 2011 and June 30, 2011, are potential benefits of $65 and $68, respectively, which, if recognized, would affect the effective tax rate on earnings.
 
The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of September 30, 2011 and June 30, 2011, the total balance of accrued interest and penalties related to uncertain tax positions was $5 and $8, respectively. Interest and penalties included in income tax expense were net benefits of $1 and $2 for the three months ended September 30, 2011 and 2010, respectively.
 
The Company files income tax returns in the U.S. federal and various state, local and foreign jurisdictions. The federal statute of limitations has expired for all tax years through 2007. Various income tax returns in state and foreign jurisdictions are currently in the process of examination.
Retirement Income And Health Care Benefit Plans
Retirement Income And Health Care Benefit Plans
NOTE 7. RETIREMENT INCOME AND HEALTH CARE BENEFIT PLANS
 
The following table summarizes the components of net periodic benefit cost for the Company's retirement income and health care plans:
 
        Three Months Ended
    9/30/2011       9/30/2010
Service cost   $       1     $       3  
Interest cost     7       7  
Expected return on plan assets       (8 )       (8 )
Amortization of unrecognized items     2       4  
Total   $ 2     $ 6  
                 
The net periodic benefit cost for the Company's retirement health care plans was $1 for both the three months ended September 30, 2011 and 2010.
 
During the three months ended September 30, 2010, the Company made discretionary contributions of $15 to the domestic qualified retirement income plan.
 
Contingencies And Guarantees
Contingencies And Guarantees
NOTE 8. CONTINGENCIES AND GUARANTEES
 
Contingencies
 
The Company is involved in certain environmental matters, including Superfund and other response actions at various locations. The Company had a recorded liability of $15 at both September 30, 2011 and June 30, 2011, for its share of aggregate future remediation costs related to these matters. One matter in Dickinson County, Michigan, for which the Company is jointly and severally liable, accounted for a substantial majority of the recorded liability at both September 30, 2011 and June 30, 2011. The Company has agreed to be liable for 24.3% of the aggregate remediation and associated costs for this matter pursuant to a cost-sharing arrangement with a third party. With the assistance of environmental consultants, the Company maintains an undiscounted liability representing its current best estimate of its share of the capital expenditures, maintenance and other costs that may be incurred over an estimated 30-year remediation period. Currently, the Company cannot accurately predict the timing of future payments that may be made under this obligation. In addition, the Company's estimated loss exposure is sensitive to a variety of uncertain factors, including the efficacy of remediation efforts, changes in remediation requirements and the timing, varying costs and alternative clean-up technologies that may become available in the future. Although it is possible that the Company's exposure may exceed the amount recorded, any amount of such additional exposures, or range of exposures, is not estimable at this time.
 
The Company is subject to various other lawsuits and claims relating to issues such as contract disputes, product liability, patents and trademarks, advertising, employee and other matters. Based on the Company's analysis of these claims and litigation, it is the opinion of management that the ultimate disposition of these matters, including the environmental matter described above, to the extent not previously provided for, will not have a material adverse effect, individually or in the aggregate, on the Company's consolidated financial statements taken as a whole.
 
Guarantees
 
In conjunction with divestitures and other transactions, the Company may provide typical indemnifications (e.g., indemnifications for representations and warranties and retention of previously existing environmental, tax and employee liabilities) for which terms vary in duration and potential amount of the total obligation and, in many circumstances, are not explicitly defined. The Company has not made, nor does it believe that it is probable that it will make any payments relating to its indemnifications, and believes that any reasonably possible payments would not have a material effect on its financial position, results of operations or cash flows, either individually or in the aggregate.
 
At September 30, 2011, the Company was a party to letters of credit of $15, primarily related to one of its insurance carriers.
 
The Company had not recorded any liabilities on any of the aforementioned guarantees at September 30, 2011.
Segment Results
Segment Results
NOTE 9. SEGMENT RESULTS
   
The Company operates through strategic business units that are aggregated into four reportable segments: Cleaning, Lifestyle, Household and International. The four reportable segments consist of the following:
  • Cleaning consists of laundry, home-care and professional products marketed and sold in the United States. Products within this segment include laundry additives, including bleaches under the Clorox® brand and Clorox 2® stain fighter and color booster; home-care products, primarily under the Clorox®, Formula 409®, Liquid-Plumr®, Pine-Sol®, S.O.S® and Tilex® brands; and natural cleaning and laundry products under the Green Works® brand.
       
  • Household consists of charcoal, cat litter and plastic bags, wraps and container products marketed and sold in the United States. Products within this segment include plastic bags, wraps and containers, under the Glad® brand; cat litter products, under the Fresh Step®, Scoop Away® and Ever Clean® brands; and charcoal products under the Kingsford® and Match Light® brands.
       
  • Lifestyle consists of food products, water-filtration systems and filters marketed and sold in the United States and all natural personal care products. Products within this segment include dressings and sauces, primarily under the Hidden Valley® and K C Masterpiece® brands; water-filtration systems and filters under the Brita® brand; and all natural personal care products under the Burt's Bees® brand.
       
  • International consists of products sold outside the United States, excluding natural personal care products. Products within this segment include laundry, home-care, water filtration, charcoal and cat litter products, dressings and sauces, plastic bags, wraps and containers, and insecticides, primarily under the Clorox®, Javex®, Glad®, PinoLuz®, Ayudin®, Limpido®, Clorinda®, Poett®, Mistolin®, Lestoil®, Bon Bril®, Nevex®, Brita®, Green Works®, Pine-Sol®, Agua Jane®, Chux®, Kingsford®, Fresh Step®, Scoop Away®, Ever Clean®, K C Masterpiece® and Hidden Valley® brands.
Certain nonallocated administrative costs, interest income, interest expense and certain other nonoperating income and expenses are reflected in Corporate. Corporate assets include cash and cash equivalents, the Company's headquarters and research and development facilities, information systems hardware and software, pension balances and other investments.
   
The table below presents reportable segment information and a reconciliation of the segment information to the Company's net sales and earnings (losses) from continuing operations before income taxes, with amounts that are not allocated to the operating segments reflected in Corporate.
 
  Net Sales   Earnings (Losses)
from Continuing Operations
Before Income Taxes
  Three Months Ended           Three Months Ended
  9/30/2011           9/30/2010   9/30/2011           9/30/2010
Cleaning $      439   $      449   $          108     $         121  
Household   366     354     42       53  
Lifestyle   214     201     54       58  
International   286     262     41       40  
Corporate   -     -     (58 )       (70 )
Total Company $ 1,305   $ 1,266   $ 187     $ 202  
                           
All intersegment sales are eliminated and are not included in the Company's reportable segments' net sales.
 
Net sales to the Company's largest customer, Wal-Mart Stores, Inc. and its affiliates, were 27% of consolidated net sales for both the three months ended September 30, 2011 and 2010.
Fair Value Measurements And Financial Instruments
Fair Value Measurements And Financial Instruments
NOTE 10. FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS
 
Accounting guidance on fair value measurements for certain financial assets and liabilities requires that financial assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:
 
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs reflecting the reporting entity's own assumptions.
 
At September 30, 2011, the Company's financial assets and liabilities that were measured at fair value on a recurring basis during the year included derivative financial instruments, which were all level 2.
 
Financial Risk Management and Derivative Instruments
 
The Company is exposed to certain commodity, interest rate and foreign currency risks relating to its ongoing business operations and uses derivative instruments to mitigate its exposure to these risks.
 
Commodity Price Risk Management
 
The Company may use commodity exchange traded futures and over-the-counter swap contracts to fix the price of a portion of its forecasted raw material requirements. Contract maturities, which are generally no longer than 21 months, are matched to the length of the raw material purchase contracts. Commodity purchase contracts are measured at fair value using market quotations obtained from commodity derivative dealers.
 
As of September 30, 2011, the net notional value of commodity derivatives was $22, of which $20 related to jet fuel and $2 related to crude oil.
 
Interest Rate Risk Management
 
The Company may enter into over-the-counter interest rate forward contracts to fix a portion of the benchmark interest rate prior to the anticipated issuance of fixed rate debt. These interest rate forward contracts have durations of less than six months. The interest rate contracts are measured at fair value using information quoted by U.S. government bond dealers.
 
As of September 30, 2011, the net notional value of interest rate forward contracts was $300.
 
Foreign Currency Risk Management
 
The Company may also enter into certain over-the-counter foreign currency-related derivative contracts to manage a portion of the Company's foreign exchange risk associated with the purchase of inventory. These foreign currency contracts generally have durations no longer than twelve months. The foreign exchange contracts are measured at fair value using information quoted by foreign exchange dealers.
 
As of September 30, 2011, the net notional values of outstanding foreign currency forward contracts related to the Company's subsidiaries in Canada and Australia and used to hedge forecasted purchases of inventory were $32 and $18, respectively.
 
Counterparty Risk Management
 
Certain terms of the agreements governing the Company's over-the-counter derivative instruments require the Company or the counterparty to post collateral when the fair value of the derivative instruments exceeds contractually defined counterparty liability position limits. As of September 30, 2011, no collateral was required to be posted.
 
Certain terms of the agreements governing the over-the-counter derivative instruments contain provisions that require the credit ratings, as assigned by Standard & Poor's and Moody's to the Company and its counterparties, to remain at a level equal to or better than the minimum of an investment grade credit rating. If our credit ratings were to fall below investment grade, the counterparties to the derivative instruments could request full collateralization on derivative instruments in net liability positions. As of September 30, 2011, the Company and each of its counterparties maintained investment grade ratings with both Standard & Poor's and Moody's.
 
Fair Value of Derivative Instruments
 
The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as a hedge, and on the type of the hedging relationship. For those derivative instruments designated and qualifying as hedging instruments, the Company must designate the hedging instrument as a fair value hedge or a cash flow hedge. The Company designates its commodity forward and future contracts for forecasted purchases of raw materials, interest rate forward contracts for forecasted interest payments, and foreign currency forward contracts of forecasted purchases of inventory as cash flow hedges. During the three months ended September 30, 2011 and 2010, the Company had no hedging instruments designated as fair value hedges.
 
The Company's derivative financial instruments designated as hedging instruments are recorded at fair value in the condensed consolidated balance sheets as follows:
 
            Balance Sheet classification           9/30/2011           6/30/2011
Assets                
Foreign exchange contracts   Other current assets   $      3   $      -
Interest rate contracts   Other current assets     -     1
Commodity purchase contracts   Other current assets     1     4
        $ 4   $ 5
 
Liabilities                
Interest rate contracts   Accrued liabilities   $ 37   $ 1
Commodity purchase contracts   Accrued liabilities     1     -
        $ 38   $ 1
                 
For derivative instruments designated and qualifying as cash flow hedges, the effective portion of gains or losses is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The estimated amount of the existing net gain at September 30, 2011, expected to be reclassified into earnings within the next twelve months is $1. Gains and losses on the derivative instruments representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. During the three months ended September 30, 2011 and 2010, hedge ineffectiveness was not material. The Company dedesignates cash flow hedge relationships whenever it determines that the hedge relationships are no longer highly effective or that the forecasted transaction is no longer probable. The portion of gains or losses on the derivative instrument previously accumulated in OCI for dedesignated hedges remains in accumulated OCI until the forecasted transaction is recognized in earnings, or is recognized in earnings immediately if the forecasted transaction is no longer probable.
 
The effects of derivative instruments designated as hedging instruments on OCI and on the condensed consolidated statements of earnings were as follows:
 
            (Loss) Gain recognized in OCI           (Loss) Gain reclassified from OCI and
recognized in earnings
    Three Months Ended   Three Months Ended
Cash flow hedges   9/30/2011       9/30/2010   9/30/2011           9/30/2010
Commodity purchase contracts   $                (2 )   $                5     $                     (1 )   $                     -
Interest rate contracts     (37 )     (3 )     -       -
Foreign exchange contracts     3       (1 )     1       1
Total   $ (36 )   $ 1     $ -     $ 1
                               
The (losses) gains reclassified from OCI and recognized in earnings during the three months ended September 30, 2011 and 2010, respectively, for commodity purchase contracts and foreign exchange contracts are included in cost of products sold.
 
Other
 
The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate their fair values at September 30, 2011 and 2010, due to the short maturity and nature of those balances. The estimated fair value of long-term debt, including current maturities, was $2,290 and $2,303 at September 30, 2011 and June 30, 2011, respectively. The Company accounts for its long-term debt at face value, net of any unamortized discounts or premiums. The fair value of long-term debt was determined using secondary market prices quoted by corporate bond dealers.
Interim Financial Statements (Policy)
Basis Of Presentation 
Basis of Presentation
 
The unaudited interim condensed consolidated financial statements for the three months ended September 30, 2011 and 2010, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the consolidated results of operations, financial position and cash flows of The Clorox Company and its subsidiaries (the Company) for the periods presented. The results for the interim period ended September 30, 2011, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2012, or for any future period.
 
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The information in this report should be read in conjunction with the Company's Annual Report on Form 10-K filed with the SEC for the fiscal year ended June 30, 2011, which includes a complete set of footnote disclosures, including the Company's significant accounting policies.
Use Of Estimates 
Use of Estimates
 
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ materially from estimates and assumptions made.
Inventories, Net (Tables)
Schedule Of Inventories, Net
        9/30/2011       6/30/2011
Finished goods   $      337     $      315  
Raw materials and packaging     117       104  
Work in process     3       3  
LIFO allowances     (38 )     (29 )
Allowances for obsolescence     (12 )     (11 )
Total   $ 407     $ 382  
 
Other Liabilities (Tables)
Other Liabilities
    9/30/2011       6/30/2011
Venture agreement net terminal obligation       $      278   $      277
Employee benefit obligations     217     215
Taxes     90     89
Other     41     38
Total   $ 626   $ 619
Net Earnings Per Share (Tables)
Reconciliation Of Net Earnings To Net Earnings Applicable To Common Stock 
Earnings from continuing operations       $      140  
Earnings from discontinued operations     76  
Net earnings   $ 216  
Less: Earnings allocated to participating securities     (1 )
Net earnings applicable to common stock   $ 215  
         
Schedule Of Effects Of Participating Securities On Weighted Average Number Of Shares Outstanding 
       
  Three Months Ended
  9/30/2011   9/30/2010
Basic 131,968   139,475
Dilutive effect of stock options and other 1,643   1,457
Diluted 133,611   140,932
       
Schedule Of Reconciliation Of Share Repurchases 
            Three Months Ended
    9/30/2011           9/30/2010
    Amount       Shares
(000)		   Amount       Shares
(000)
Open-market purchase programs   $      9          129   $      -   -
Evergreen Program     -   -     4          58
Total   $ 9   129   $ 4   58
                     
Comprehensive Income (Tables)
Schedule Of Components Of Comprehensive Income
               
  Three Months Ended
  9/30/2011   9/30/2010
Earnings from continuing operations $ 130         $ 140  
Earnings from discontinued operations   -       76  
Net earnings $ 130     $ 216  
Other comprehensive (losses) gains, net of tax:              
       Foreign currency translation   (39 )     34  
       Net derivative adjustments   (23 )     (2 )
       Pension and postretirement benefit adjustments   (2 )     2  
Total $      66     $      250  
           
Retirement Income And Health Care Benefit Plans (Tables)
Components Of The Net Periodic Benefit Cost Of Retirement Income And Health Care Plans
        Three Months Ended
    9/30/2011       9/30/2010
Service cost   $       1     $       3  
Interest cost     7       7  
Expected return on plan assets       (8 )       (8 )
Amortization of unrecognized items     2       4  
Total   $ 2     $ 6  
                 
Segment Results (Tables)
Company's Reportable Segments' Net Sales And Earnings (Losses) Before Income Taxes
  Net Sales   Earnings (Losses)
from Continuing Operations
Before Income Taxes
  Three Months Ended           Three Months Ended
  9/30/2011           9/30/2010   9/30/2011           9/30/2010
Cleaning $      439   $      449   $          108     $         121  
Household   366     354     42       53  
Lifestyle   214     201     54       58  
International   286     262     41       40  
Corporate   -     -     (58 )       (70 )
Total Company $ 1,305   $ 1,266   $ 187     $ 202  
                           
Fair Value Measurements And Financial Instruments (Tables)
Derivative Financial Instruments Designated As Hedging Instruments Recorded At Fair Value 
            Balance Sheet classification           9/30/2011           6/30/2011
Assets                
Foreign exchange contracts   Other current assets   $      3   $      -
Interest rate contracts   Other current assets     -     1
Commodity purchase contracts   Other current assets     1     4
        $ 4   $ 5
 
Liabilities                
Interest rate contracts   Accrued liabilities   $ 37   $ 1
Commodity purchase contracts   Accrued liabilities     1     -
        $ 38   $ 1
                 
Effects Of Derivative Financial Instruments Designated As Hedging Instruments On OCI And On Consolidated Statement Of Earnings 
            (Loss) Gain recognized in OCI           (Loss) Gain reclassified from OCI and
recognized in earnings
    Three Months Ended   Three Months Ended
Cash flow hedges   9/30/2011       9/30/2010   9/30/2011           9/30/2010
Commodity purchase contracts   $                (2 )   $                5     $                     (1 )   $                     -
Interest rate contracts     (37 )     (3 )     -       -
Foreign exchange contracts     3       (1 )     1       1
Total   $ (36 )   $ 1     $ -     $ 1
                               
Inventories, Net (Schedule Of Inventories, Net) (Details) (USD $)
In Millions
Sep. 30, 2011
Jun. 30, 2011
Inventories, Net [Abstract]
 
 
Finished goods
$ 337 
$ 315 
Raw materials and packaging
117 
104 
Work in process
3 
3 
LIFO allowances
(38)
(29)
Allowances for obsolescence
(12)
(11)
Total
$ 407 
$ 382 
Other Liabilities (Schedule Of Other Liabilities) (Details) (USD $)
In Millions
Sep. 30, 2011
Jun. 30, 2011
Other Liabilities [Abstract]
 
 
Venture agreement net terminal obligation
$ 278 
$ 277 
Employee benefit obligations
217 
215 
Taxes
90 
89 
Other
41 
38 
Total
$ 626 
$ 619 
Net Earnings Per Share (Narrative) (Details) (USD $)
In Millions
3 Months Ended
Sep. 30,
2011
2010
Net Earnings Per Share [Abstract]
 
 
Adjustments to net earnings for computation of basic and diluted earnings per share
$ 0 
 
Stock options
0 
2.1 
Net Earnings Per Share (Reconciliation Of Net Earnings And Weighted Average Number Of Shares Outstanding) (Details) (USD $)
In Millions, except Share data in Thousands
3 Months Ended
Sep. 30,
2011
2010
Net Earnings Per Share [Abstract]
 
 
Earnings from continuing operations
$ 130 
$ 140 
Earnings from discontinued operations
 
76 
Net earnings
130 
216 
Less: Earnings allocated to participating securities
 
(1)
Net earnings applicable to common stock
 
$ 215 
Basic
131,968 
139,475 
Dilutive effect of stock options and other
1,643 
1,457 
Diluted
133,611 
140,932 
Net Earnings Per Share (Schedule Of Reconciliation Of Share Repurchases) (Details) (USD $)
In Millions, except Share data in Thousands
3 Months Ended
Sep. 30,
2010
2009
Net Earnings Per Share [Line Items]
 
 
Stock repurchased, value
$ 9 
$ 4 
Stock repurchased, shares
129 
58 
Evergreen Program [Member]
 
 
Net Earnings Per Share [Line Items]
 
 
Stock repurchased, value
 
4 
Stock repurchased, shares
 
58 
Open-Market Purchase Programs [Member]
 
 
Net Earnings Per Share [Line Items]
 
 
Stock repurchased, value
$ 9 
 
Stock repurchased, shares
129 
 
Comprehensive Income (Schedule Of Components Of Comprehensive Income) (Details) (USD $)
In Millions
3 Months Ended
Sep. 30,
2011
2010
Comprehensive Income [Abstract]
 
 
Earnings from continuing operations
$ 130 
$ 140 
Earnings from discontinued operations
 
76 
Net earnings
130 
216 
Foreign currency translation
(39)
34 
Net derivative adjustments
(23)
(2)
Pension and postretirement benefit adjustments
(2)
2 
Total
$ 66 
$ 250 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Sep. 30,
2011
2010
Jun. 30, 2011
Income Taxes [Abstract]
 
 
 
Effective tax rate, continuing operations
30.50% 
30.90% 
 
Unrecognized tax benefits that would affect the effective tax rate
$ 65 
 
$ 68 
Accrued interest and penalties related to uncertain tax positions
5 
 
8 
Interest and penalties included in income tax expense
$ 1 
$ 2 
 
Retirement Income And Health Care Benefit Plans (Narrative) (Details) (USD $)
In Millions
3 Months Ended
Sep. 30,
2011
2010
Defined Benefit Plan Disclosure [Line Items]
 
 
Total net periodic benefit cost
$ 2 
$ 6 
Retirement Health Care Plans [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Total net periodic benefit cost
1 
1 
Domestic Qualified Retirement Income Plan [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Discretionary contributions
 
$ 15 
Retirement Income And Health Care Benefit Plans (Components Of Net Periodic Benefit Cost) (Details) (USD $)
In Millions
3 Months Ended
Sep. 30,
2011
2010
Retirement Income And Health Care Benefit Plans [Abstract]
 
 
Service cost
$ 1 
$ 3 
Interest cost
7 
7 
Expected return on plan assets
(8)
(8)
Amortization of unrecognized items
2 
4 
Total net periodic benefit cost
$ 2 
$ 6 
Contingencies And Guarantees (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Sep. 30, 2011
12 Months Ended
Jun. 30, 2011
Contingencies And Guarantees [Abstract]
 
 
Liability for future remediation costs
$ 15 
$ 15 
Percentage of liability for aggregate remediation and associated costs, other than legal fees
24.30% 
24.30% 
Remediation period, years
30 
 
Letters of credit related to insurance carriers
$ 15 
 
Segment Results (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Sep. 30,
2011
2010
Segment Reporting Information [Line Items]
 
 
Net sales
$ 1,305 
$ 1,266 
Earnings (Losses) from Continuing Operations Before Income Taxes
187 
202 
Our largest customer, percentage of consolidated net sales
27.00% 
27.00% 
Cleaning [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
439 
449 
Earnings (Losses) from Continuing Operations Before Income Taxes
108 
121 
Household [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
366 
354 
Earnings (Losses) from Continuing Operations Before Income Taxes
42 
53 
Lifestyle [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
214 
201 
Earnings (Losses) from Continuing Operations Before Income Taxes
54 
58 
International [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
286 
262 
Earnings (Losses) from Continuing Operations Before Income Taxes
41 
40 
Corporate [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Net sales
 
 
Earnings (Losses) from Continuing Operations Before Income Taxes
$ (58)
$ (70)
Fair Value Measurements And Financial Instruments (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Sep. 30,
2011
2010
Jun. 30, 2011
Derivative [Line Items]
 
 
 
Maximum duration for commodity futures and swap contracts, months
21 
 
 
Maximum duration for interest rate forward contracts, months
6 
 
 
Maximum duration for foreign currency contracts, months
12 
 
 
Derivative financial instruments designated as fair value hedges
0 
0 
 
Estimated amount of the existing net gain to be reclassified into earnings, in the next 12 months
$ 1 
 
 
Notional value of commodity derivatives
22 
 
 
Notional value of interest rate forward contracts
300 
 
 
Estimated fair value of long-term debt
2,290 
 
2,303 
Jet Fuel Commodity Contract [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional value of commodity derivatives
20 
 
 
Crude Oil Commodity Contract [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional value of commodity derivatives
2 
 
 
Canada Foreign Currency Exchange Contracts [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional value
32 
 
 
Australia Foreign Currency Exchange Contracts [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional value
$ 18 
 
 
Fair Value Measurements And Financial Instruments (Details) (USD $)
In Millions
3 Months Ended
Sep. 30,
2011
2010
Jun. 30, 2011
Derivatives, Fair Value [Line Items]
 
 
 
Cash flow hedge derivative instrument assets at fair value
$ 4 
 
$ 5 
Cash flow hedge derivative instrument liabilities at fair value
38 
 
1 
Gain (Loss) recognized in OCI
(36)
1 
 
Gain (Loss) reclassified from OCI and recognized in earnings
0 
1 
 
Interest Rate Contract [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Gain (Loss) recognized in OCI
(37)
(3)
 
Gain (Loss) reclassified from OCI and recognized in earnings
0 
0 
 
Interest Rate Contract [Member] |
Accrued Liabilities [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Interest rate cash flow hedge liability at fair value.
37 
 
1 
Interest Rate Contract [Member] |
Other Current Assets [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Interest rate cash flow hedge asset at fair value
0 
 
1 
Foreign Exchange Contracts [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Gain (Loss) recognized in OCI
3 
(1)
 
Gain (Loss) reclassified from OCI and recognized in earnings
1 
1 
 
Foreign Exchange Contracts [Member] |
Other Current Assets [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Foreign currency cash flow hedge asset at fair value
3 
 
0 
Commodity Purchase Contracts [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Gain (Loss) recognized in OCI
(2)
5 
 
Gain (Loss) reclassified from OCI and recognized in earnings
(1)
0 
 
Commodity Purchase Contracts [Member] |
Accrued Liabilities [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Price risk cash flow hedge liability, at fair value
1 
 
0 
Commodity Purchase Contracts [Member] |
Other Current Assets [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Price risk cash flow hedge asset, at fair value
$ 1 
 
$ 4