CLOROX CO /DE/, 10-Q filed on 11/3/2009
Quarterly Report
Condensed Consolidated Statements of Earnings (USD $)
In Millions, except Share and Per Share data
3 Months Ended
Sep. 30,
2009
2008
Net sales
$ 1,372 
$ 1,384 
Cost of products sold
753 
822 
Gross profit
619 
562 
Selling and administrative expenses
175 
184 
Advertising costs
127 
119 
Research and development costs
27 
27 
Restructuring costs
Interest expense
36 
42 
Other expense, net
Earnings before income taxes
244 
186 
Income taxes
87 
58 
Net earnings
157 
128 
Earnings per share
 
 
Basic
1.12 
0.91 
Diluted
1.11 
0.90 
Weighted average shares outstanding (in thousands)
 
 
Basic
139,743 
138,457 
Diluted
140,861 
139,860 
Dividend declared per share
0.50 
0.46 
Condensed Consolidated Balance Sheets (USD $)
In Millions
Sep. 30, 2009
Jun. 30, 2009
Assets
 
 
Cash and cash equivalents
$ 237 
$ 206 
Receivables, net
458 
486 
Inventories, net
392 
366 
Other current assets
114 
122 
Total current assets
1,201 
1,180 
Property, plant and equipment, net
947 
955 
Goodwill
1,640 
1,630 
Trademarks, net
558 
557 
Other intangible assets, net
101 
105 
Other assets
151 
149 
Total assets
4,598 
4,576 
Liabilities and Stockholders' Deficit
 
 
Notes and loans payable
457 
421 
Current maturities of long-term debt
575 
577 
Accounts payable
330 
381 
Accrued liabilities
405 
472 
Income taxes payable
99 
86 
Total current liabilities
1,866 
1,937 
Long-term debt
2,137 
2,151 
Other liabilities
617 
640 
Deferred income taxes
25 
23 
Total liabilities
4,645 
4,751 
Contingencies
 
 
Stockholders' deficit
 
 
Common stock: $1.00 par value; 750,000,000 shares authorized;158,741,461 shares issued at September 30, 2009 and June 30, 2009; and 139,808,056 and 139,157,976 shares outstanding at September 30, 2009 and June 30, 2009, respectively
159 
159 
Additional paid-in capital
564 
579 
Retained earnings
720 
640 
Treasury shares, at cost: 18,933,405 and 19,583,485 shares at September 30, 2009 and June 30, 2009, respectively
(1,169)
(1,206)
Accumulated other comprehensive net losses
(321)
(347)
Stockholders' deficit
(47)
(175)
Total liabilities and stockholders' deficit
$ 4,598 
$ 4,576 
Condensed Consolidated Balance Sheets [Parentheticals]
Sep. 30, 2009
Jun. 30, 2009
Condensed Consolidated Balance Sheets [Parentheticals]
 
 
Common Stock, Par or Stated Value Per Share
1.00 
1.00 
Common Stock, Shares Authorized
750,000,000 
750,000,000 
Common Stock, Shares, Issued
158,741,461 
158,741,461 
Common Stock, Shares, Outstanding
139,808,056 
139,157,976 
Treasury Stock, Shares
18,933,405 
19,583,485 
Condensed Consolidated Statements of Cash Flows (USD $)
In Millions
3 Months Ended
Sep. 30,
2009
2008
Operating activities:
 
 
Net earnings
$ 157 
$ 128 
Adjustments to reconcile earnings from operations:
 
 
Depreciation and amortization
48 
47 
Share-based compensation
13 
12 
Deferred income taxes
(3)
Other
(27)
10 
Changes in:
 
 
Receivables, net
35 
41 
Inventories, net
(21)
(45)
Accounts payable and accrued liabilities
(131)
(99)
Income taxes payable
18 
Net cash provided by operations
94 
93 
Investing activities:
 
 
Capital expenditures
(34)
(39)
Other
(1)
Net cash used for investing activities
(33)
(40)
Financing activities:
 
 
Notes and loans payable
35 
(27)
Long-term debt repayments
(15)
Cash dividends paid
(70)
(64)
Issuance of common stock for employee stock plans and other
15 
16 
Net cash used for financing activities
(35)
(75)
Effect of exchange rate changes on cash and cash equivalents
(8)
Net increase (decrease) in cash and cash equivalents
31 
(30)
Cash and cash equivalents:
 
 
Beginning of year
206 
214 
End of year
$ 237 
$ 184 
Interim Financial Statements
Interim Financial Statements [Text Block]

NOTE 1. INTERIM FINANCIAL STATEMENTS

  

Basis of Presentation

  

The unaudited interim condensed consolidated financial statements for the three months ended September 30, 2009 and 2008, 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. Certain prior period amounts have been reclassified in the condensed consolidated financial statements to conform to the current period presentation. The results for the interim period ended September 30, 2009, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2010, or for any future period.  The Company’s condensed consolidated financial statements were evaluated for subsequent events after the balance sheet date through November 3, 2009, the date the consolidated financial statements were issued.

  

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 (the 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, 2009, 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.

  

New Accounting Pronouncements

  

Recently adopted pronouncements

  

On July 1, 2009, the Company adopted a new accounting standard which provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities that must be included in the computation of earnings per share pursuant to the two-class method.  These payment awards were previously not considered participating securities. Accordingly, the Company’s unvested performance units, restricted stock awards and restricted stock units that provide such nonforfeitable rights are now considered participating securities in the calculation of net earnings per share (EPS). The Company’s share-based payment awards granted in fiscal year 2010 are not participating securities. The new standard requires the retrospective adjustment of the Company’s earnings per share data.  The retrospective adoption of the new accounting standard resulted in a $0.01 decrease in the previously reported basic and diluted EPS for the three months ended September 30, 2008, and a $0.04 and $0.02 decrease in the previously reported basic and diluted EPS, respectively, for the fiscal year 2009. The calculation of EPS under the new standard is disclosed in Note 6.

  

On July 1, 2009, the Company adopted a new accounting standard which establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, including contingent liabilities, and any noncontrolling interest in an acquired business.  The new standard also provides for recognizing and measuring the goodwill acquired in a business combination and requires disclosure of information to enable users of the financial statements to evaluate the nature and financial effects of the business combination.  There was no impact to the condensed consolidated financial statements.

  

On July 1, 2009, the Company adopted a new accounting standard which establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary (previously referred to as minority interest) and for the deconsolidation of a subsidiary.  The new standard establishes accounting and reporting standards that require the noncontrolling interest to be reported as a component of equity. Changes in a parent’s ownership interest while the parent retains its controlling interest will be accounted for as equity transactions and any retained noncontrolling equity investment upon the deconsolidation of a subsidiary will be initially measured at fair value.  There was no material impact to the condensed consolidated financial statements.  

  

On July 1, 2009, the Company adopted a new accounting standard requiring disclosures about fair value of financial instruments in interim financial information (See Note 3).  The new standard requires those disclosures for interim reporting periods.  The Company already complies with the provisions of this accounting standard for its annual reporting.  

  

On July 1, 2009, the Company adopted the provisions of the accounting standard on fair value measurements that apply to nonfinancial assets and liabilities that are recognized or disclosed at fair value on a non-recurring basis.  The adoption of these provisions did not have an impact on the condensed consolidated financial statements.

  

On September 30, 2009, the Company adopted the Financial Accounting Standards Board (FASB) Accounting Standards Codification (the Codification).  The Codification is the single official source of authoritative US GAAP (other than the SEC's views), superseding all other accounting literature except that issued by the SEC.  The adoption of the Codification had no impact to the condensed consolidated balance sheets, statements of operations or cash flows.

  

Pronouncements to be adopted

  

On December 30, 2008, the FASB issued an accounting standard that will require additional disclosures about the major categories of plan assets and concentrations of risk for an employer’s plan assets of a defined benefit pension or other postretirement plan, as well as disclosure of fair value levels, similar to the disclosure requirements of the fair value measurements accounting standard. These enhanced disclosures about plan assets must be provided in the Company’s 2010 Annual Report on Form 10-K.  

  

Restructuring
Restructuring [Text Block]

NOTE 2. RESTRUCTURING

  

In fiscal year 2008, the Company began a restructuring plan that involves simplifying its supply chain and other restructuring activities (Supply Chain and Other restructuring plan), which was subsequently expanded to include additional costs, primarily severance, associated with the Company’s plan to reduce certain staffing levels.

The Supply Chain restructuring involves closing certain domestic and international manufacturing facilities. The Company is redistributing production from these facilities between the Company’s remaining facilities and third-party producers to optimize available capacity and reduce operating costs. The Company anticipates the Supply Chain restructuring will be completed in fiscal year 2012.

  

During the three months ended September 30, 2009, the Company recognized $2 of restructuring costs in Corporate.  Additionally, the Company recognized restructuring-related costs associated with the Supply Chain and Other restructuring plan of $1 and $3, included in selling and administrative expenses and cost of products sold, respectively.  Of these amounts, $2, $1 and $1 were related to the Cleaning and Household segments and Corporate, respectively.  

  

During the three months ended September 30, 2008, the Company recognized $1 of restructuring costs in the Cleaning segment.  In addition, the Company recognized  in cost of products sold restructuring-related costs associated with the Supply Chain and Other restructuring plan of $5.  Of these amounts, $1, $3 and $1 were related to the Cleaning, Household and International segments, respectively.

  

Total costs associated with the Supply Chain and Other restructuring plan since inception through September 30, 2009, were $104, of which $31, $41, $12 and $20 related to the Cleaning, Household, International segments and Corporate, respectively.

  

The Company anticipates incurring approximately $18 to $25 of Supply Chain and Other restructuring-related charges in fiscal year 2010, of which approximately $2 are expected to be noncash related. The Company anticipates approximately $5 to $8 of the fiscal year 2010 charges to be in Corporate and $9 to $11 to be in the Cleaning segment, of which approximately $7 to $9 are expected to be recognized as cost of products sold charges. The remaining estimated charges of $4 to $6 are expected to be recognized as cost of products sold in the Household segment. The total anticipated charges related to the Supply Chain and Other restructuring plan for the fiscal years 2011 and 2012 are estimated to be approximately $10 to $12.

  

Total restructuring cash payments for the three months ended September 30, 2009 were $3 and the total accrued restructuring liability as of September 30, 2009, was $14.  The total accrued restructuring liability as of June 30, 2009, was $15.  

  

The Company may, from time to time, decide to pursue additional restructuring-related initiatives that involve charges in future periods.

Financial Instruments and Fair Value Measurements
Financial Instruments and Fair Value Measurements [Text Block]

NOTE 3. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

  

The Company is exposed to certain commodity and foreign currency risks relating to its ongoing business operations. The Company uses commodity futures and fixed price swap contracts to fix the price of a portion of its forecasted raw material requirements. Contract maturities, which are generally no longer than 18 months, are matched to the length of the raw material purchase contracts. The Company also enters into certain 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 12 months.

  

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 as cash flow hedges, commodity forward and future contracts of forecasted purchases for raw materials and foreign currency forward contracts of forecasted purchases of inventory. 

  

For derivative instruments designated and qualifying as a cash flow hedge, the effective portion of the gain or loss on the derivative 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 losses at the reporting date expected to be reclassified into earnings within the next 12 months is $8. 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, 2009, the hedge ineffectiveness was not material.

  

The Company’s derivative financial instruments designated as hedging instruments are recorded at fair value in the condensed consolidated balance sheet as follows:

  

Fair value

Balance Sheet location

9/30/2009

6/30/2009

Assets

Commodity purchase contracts

Other current assets

$

               4

$

               6

Liabilities

Foreign exchange contracts

Accrued liabilities

$

            2

$

               -

Commodity purchase contracts

Accrued liabilities

  

          12

  

          21

$

          14

$

          21

  

The effects of derivative instruments on OCI and on the statement of earnings for the three months ended September 30, 2009, were as follows:

  

Cash flow hedges

Gain (Loss) recognized

in OCI

Loss reclassified

from OCI

and recognized in earnings

Commodity purchase contracts

$

                                  7

$

                      (10)

Foreign exchange contracts

  

                                (2)

  

                        (1)

Total

$

                                  5

$

                      (11)

  

The loss reclassified from OCI and recognized in earnings during the three months ended September 30, 2009, are included in cost of products sold.

  

As of September 30, 2009, the net notional value of commodity derivatives was $94, of which $60 related to diesel fuel, $17 related to unleaded gas, $12 related to soybean oil and $5 related to jet fuel.

  

As of September 30, 2009, the Company had outstanding foreign currency forward contracts used to hedge forecasted purchases of inventory of $43 related to one of its subsidiaries in Canada.

  

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. There was no collateral posted at September 30, 2009.

  

Certain terms of the agreements governing the over-the-counter derivative instruments contain provisions that require the credit ratings, as assigned by Standard and 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. As of September 30, 2009, the Company and each of its counterparties maintained investment grade ratings with both Standard and Poor’s and Moody’s.

  

U.S. GAAP prioritizes the inputs used in measuring fair value into the following hierarchy:

  

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, 2009, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis during the year were level 2 commodity purchase contracts with a fair value of $4 and commodity purchase and foreign exchange contracts with a fair value of $12 and $2, respectively.

  

Commodity purchase contracts are fair valued using market quotations obtained off of the New York Mercantile Exchange.

  

The foreign exchange contracts are fair valued using foreign exchange rates and forward points quoted by foreign exchange dealers.

  

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and notes and loans payable approximate their fair values at September 30, 2009 and June 30, 2009, due to the short maturity and nature of those balances. The estimated fair value of long-term debt, including current maturities, was $2,842 and $2,816 at September 30, 2009 and June 30, 2009, respectively. The fair value of long-term debt was determined using secondary market prices quoted by corporate bond dealers.

Inventories, Net
Inventories, Net [Text Block]

NOTE 4. INVENTORIES, NET

  

Inventories, net, consisted of the following at:

  

9/30/2009

6/30/2009

Finished goods

$

     326

$

     304

Raw materials and packaging

     104

       99

Work in process

         4

         4

LIFO allowances

     (31)

     (31)

Allowances for obsolescence

  

     (11)

  

     (10)

Total

$

     392

$

     366

  

  

Other Liabilities
Other Liabilities [Text Block]

NOTE 5. OTHER LIABILITIES

  

Other liabilities consisted of the following at:

  

  

9/30/2009

  

6/30/2009

Venture agreement net terminal obligation

  

$

     270

  

$

     269

Employee benefit obligations

  

     242

  

     266

Taxes

  

       67

  

       65

Other

  

  

       38

  

  

       40

Total

  

$

       617

  

$

     640

  

  

  

  

  

  

Net Earnings Per Share

NOTE 6. NET EARNINGS PER SHARE

  

The Company computes EPS using the two-class method (See Note 1), which is an earnings allocation formula that determines EPS for common stock and participating securities.

  

EPS for common stock is computed by dividing net earnings applicable to common stock by the weighted average number of common shares outstanding each period on an unrounded basis.

Net earnings applicable to common stock includes dividends paid to common shareholders during the period plus a proportionate share of undistributed net earnings which is based on the

weighted average number of shares of common stock and participating securities outstanding during the period.

  

Diluted EPS for common stock reflects the earnings dilution that could occur from common shares that may be issued through stock options, restricted stock awards, performance units and

restricted stock units, that are not participating securities.  Excluded from this calculation are amounts allocated to participating securities.

  

The following are reconciliations of net earnings to net earnings allocable to common stock, and the number of common shares outstanding (in thousands) used to calculate basic EPS to those

used to calculate diluted EPS:

  

Three Months Ended

9/30/2009

9/30/2008

Net earnings

$

     157

$

    128

Less: Earnings allocated to participating securities

  

      (1)

  

      (2)

Net earnings applicable to common stock

$

     156

$

    126

Weighted Average Number

of Shares Outstanding for

the Three Months Ended

9/30/2009

9/30/2008

Basic

     139,743

    138,457

Dilutive effect of stock options and other (excludes participating securities)

        1,118

        1,403

Diluted

    140,861

    139,860

  

At September 30, 2009 and 2008, the Company did not include stock options to purchase 4,254 thousand and 4,559 thousand shares, respectively, of the Company’s common stock, in the calculations of diluted EPS because their inclusion would be anti-dilutive.

  

During the three months ended September 30, 2009 and 2008, the Company issued 862 thousand and 855 thousand shares, respectively, of the Company’s common stock.

  

The Company did not repurchase any shares during the three months ended September 30, 2009 and 2008.

Comprehensive Income
Comprehensive Income [Text Block]

NOTE 7. 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

9/30/2009

9/30/2008

Net earnings

$

       157

$

       128

Other comprehensive gains (losses), net of tax:

Foreign currency translation

         22

       (47)

Net derivative adjustments

           3

       (32)

Pension and postretirement benefit adjustment

  

           1

  

 -

Total comprehensive income

$

       183

$

         49

Income Taxes
Income Taxes [Text Block]

NOTE 8. 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.

  

As of September 30, 2009 and June 30, 2009, the total amount of unrecognized tax benefits was $85 and $98, respectively, of which $85 and $91, respectively, would reduce income tax expense and the effective tax rate if recognized.

  

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of September 30, 2009 and June 30, 2009, the total balance of accrued interest and penalties related to uncertain tax positions was $18 and $17, respectively. Interest and penalties included in income tax expense were $3 and $2 for the three months ended September 30, 2009 and 2008, respectively.

  

The Company files income tax returns in the U.S. federal and various state, local and foreign jurisdictions. Certain issues relating to 2003, 2004 and 2006 are under review by the IRS Appeals Division. The Company made payments of tax and interest to the IRS related to fiscal years 2004 and 2006 in the first quarter of fiscal year 2010 of $8. No tax benefits had previously been recognized for these payments. Various income tax returns in state and foreign jurisdictions are currently in the process of examination.

  

In the twelve months succeeding September 30, 2009, audit resolutions could potentially reduce total unrecognized tax benefits by up to $26, primarily as a result of cash settlement payments. Audit outcomes and the timing of audit settlements are subject to significant uncertainty.

  

Retirement Income and Health Care Benefit Plans
Retirement Income and Health Care Benefit Plans [Text Block]

NOTE 9. RETIREMENT INCOME AND HEALTH CARE BENEFIT PLANS

  

The following table summarizes the components of net periodic benefit cost for the Company’s retirement income plans:

  

Three Months Ended

9/30/2009

9/30/2008

Components of net periodic benefit cost (income):

Service cost

$

            3

$

            3

Interest cost

            8

            7

Expected return on plan assets

         (8)

         (7)

Amortization of unrecognized items

  

            2

  

            1

Total net periodic benefit cost

$

            5

$

            4

  

The net periodic benefit cost for the Company’s retirement health care plans was $1 for the three month periods ended September 30, 2009 and 2008.

  

During the three months ended September 30, 2009, the Company made a $33 discretionary contribution to the U.S. pension plan.  Based on current pension funding rules, the Company is not required to make any contributions in fiscal year 2010.

  

Contingencies
Contingencies [Text Block]

NOTE 10. CONTINGENCIES  

  

The Company is involved in certain environmental matters, including Superfund and other response actions at various locations. The Company recorded a liability of $19 at both September 30, 2009 and June 30, 2009, for its share of the related aggregate future remediation cost. One matter in Dickinson County, Michigan, for which the Company is jointly and severally liable, accounts for a substantial majority of the recorded liability at both September 30, 2009 and June 30, 2009. The Company is subject to a cost-sharing arrangement with Ford Motor Co. (Ford) for this matter, under which the Company has agreed to be liable for 24.3% of the aggregate remediation and associated costs, other than legal fees, as the Company and Ford are each responsible for their own such fees. If Ford is unable to pay its share of the response and remediation obligations, the Company would likely be responsible for such obligations. In October 2004, the Company and Ford agreed to a consent judgment with the Michigan Department of Environmental Quality, which sets forth certain remediation goals and monitoring activities. Based on the current status of this matter, and with the assistance of environmental consultants, the Company maintains an undiscounted liability representing its best estimate of its share of costs associated with the capital expenditures, maintenance and other costs to be incurred over an estimated 30-year remediation period. The most significant components of the liability relate to the estimated costs associated with the remediation of groundwater contamination and excess levels of subterranean methane deposits. The Company made payments of less than $1 during each of the three months ended September 30, 2009 and 2008, towards remediation efforts. Currently, the Company cannot accurately predict the timing of the payments that will likely be made under this estimated 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. Although the results of claims and litigation cannot be predicted with certainty, it is the opinion of management that the ultimate disposition of these matters, 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.

  

Segment Results
Segment Results [Text Block]

NOTE 11. SEGMENT RESULTS

  

The Company operates through strategic business units which are aggregated into four reportable segments: Cleaning, Household, Lifestyle and International. The four reportable segments consist of the following:

  

  • Cleaning consists of laundry, home-care, professional products and auto-care products marketed and sold in the United States. Products within this segment include laundry additives, including bleaches, under the Clorox ® and Clorox 2 ® brands; home-care products, primarily under the Clorox ®, Formula 409 ®, Liquid-Plumr ®, Pine-Sol ®, S.O.S ® and Tilex ® brands; natural cleaning and laundry products under the Green Works brand; and auto-care products primarily under the Armor All ® and STP ® brands.

  

  • 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 and 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.

  

Corporate includes certain nonallocated administrative costs, interest income, interest expense and certain other nonoperating income and expenses. 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 before income taxes, with amounts that are not allocated to the operating segments shown as Corporate.

  

Earnings (Losses)

Net Sales

Before Income Taxes

Three Months Ended

Three Months Ended

9/30/2009

9/30/2008

9/30/2009

9/30/2008

Cleaning

$

    503

$

    487

$

     137

$

      115

Household

    381

    426

       55

        62

Lifestyle

     200

    194

       66

        56

International

    288

     277

       47

        34

Corporate

  

        -

  

         -

  

    (61)

  

     (81)

Total Company

$

 1,372

$

 1,384

$

      244

$

      186

  

All intersegment sales are eliminated and are not included in the Company’s reportable segments’ net sales.

  

During the three months ended September 30, 2009 and 2008, earnings before income taxes included restructuring and asset impairment costs together with restructuring-related charges included in selling and administrative expenses and cost of products sold (Note 2) of $2 and $2 in the Cleaning segment, $1 and $3 in the Household segment, $0 and $1 in the International segment, respectively, and $3 and $0 in Corporate, respectively.

  

Net sales to the Company’s largest customer, Wal-Mart Stores, Inc. and its affiliates, were 28% and 27% of consolidated net sales for the three months ended September 30, 2009 and 2008, respectively.

Document Information
3 Months Ended
Sep. 30, 2009
Document Type
10-Q 
Amendment Flag
FALSE 
Document Period End Date
09/30/2009 
Entity Information
3 Months Ended
Sep. 30, 2009
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
139,808,056