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NOTE 1. INTERIM FINANCIAL STATEMENTS
Basis of Presentation
The unaudited interim condensed consolidated financial statements for the three months ended September 30, 2013 and 2012, 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, 2013, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2014, or for any other 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, 2013, 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.
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NOTE 2. INVENTORIES, NET
Inventories, net, consisted of the following as of:
9/30/2013 | 6/30/2013 | ||||||
Finished goods | $ | 364 | $ | 321 | |||
Raw materials and packaging | 120 | 121 | |||||
Work in process | 3 | 3 | |||||
LIFO allowances | (39 | ) | (40 | ) | |||
Allowances for obsolescence | (9 | ) | (11 | ) | |||
Total | $ | 439 | $ | 394 |
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NOTE 3. OTHER ASSETS
Investments in Low-Income Housing Partnerships
The Company owns, directly or indirectly, limited partnership interests in low-income housing partnerships, which are accounted for using the equity method of accounting. The Company's investment balance as of both September 30, 2013 and June 30, 2013 was $6. These partnerships are considered to be variable interest entities; however, the Company does not consolidate them because it does not have the power to direct the activities of the partnerships that significantly impact their economic performance. The purpose of the partnerships is to develop and operate low-income housing rental properties. The general partners, who typically hold 1% of the partnership interests, are third parties unrelated to the Company and its affiliates, and are responsible for controlling and managing the business and financial operations of the partnerships. As a limited partner, the Company is not responsible for any of the liabilities and obligations of the partnerships nor do the partnerships or their creditors have any recourse to the Company other than for the capital requirements. All available tax benefits from low-income housing tax credits provided by the partnerships were claimed as of fiscal year 2012. The risk that previously claimed low-income housing tax credits might be recaptured or otherwise retroactively invalidated is considered remote.
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NOTE 4. OTHER LIABILITIES
Other liabilities consisted of the following as of:
9/30/2013 | 6/30/2013 | ||||
Employee benefit obligations | $ | 287 | $ | 270 | |
Venture agreement net terminal obligation | 286 | 284 | |||
Taxes | 76 | 74 | |||
Other | 113 | 114 | |||
Total | $ | 762 | $ | 742 |
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NOTE 5. NET EARNINGS PER SHARE
The following is the reconciliation of the weighted average number of shares outstanding (in thousands) used to calculate basic net earnings per share (EPS) to those used to calculate diluted net EPS:
Three Months Ended | |||
9/30/2013 | 9/30/2012 | ||
Basic | 130,074 | 130,268 | |
Dilutive effect of stock options and other | 2,163 | 1,434 | |
Diluted | 132,237 | 131,702 |
During the three months ended September 30, 2013, the Company excluded stock options to purchase approximately 1.8 million shares of the Company's common stock in the calculations of diluted net EPS because their exercise price was greater than the average market price, making them anti-dilutive.
During the three months ended September 30, 2012, the Company included all stock options to purchase shares of the Company's common stock in the calculations of diluted net EPS because the average market price of all outstanding grants was greater than the exercise price.
The Company has two share repurchase programs: an open-market purchase program with an authorized aggregate purchase amount of up to $750, all of which was available for share repurchases as of September 30, 2013, and a program to offset the impact of share dilution related to share-based awards (the Evergreen Program), which has no authorization limit as to amount or timing of repurchases.
During the three months ended September 30, 2013 and 2012, the Company repurchased approximately 1.6 million shares and zero shares, respectively, under its Evergreen Program, for an aggregate amount of $130 and $0, respectively. The Company did not repurchase any shares under the open-market purchase program during the three months ended September 30, 2013 and 2012.
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NOTE 6. COMPREHENSIVE INCOME
Comprehensive income is defined as net earnings and other changes in stockholders' equity from transactions and other events from sources other than stockholders. Comprehensive income was as follows:
Three Months Ended | |||||||
9/30/2013 | 9/30/2012 | ||||||
Net earnings | $ | 136 | $ | 133 | |||
Other comprehensive (loss) income: | |||||||
Foreign currency translation adjustments, net of tax of $1 and $3, respectively | 4 | 27 | |||||
Net unrealized losses on derivatives, net of tax of $1 and $1, respectively | (1 | ) | (1 | ) | |||
Pension and postretirement benefit adjustments, net of tax of $2 and $0, respectively | (4 | ) | 1 | ||||
Total other comprehensive (loss) income, net of tax | (1 | ) | 27 | ||||
Comprehensive income | $ | 135 | $ | 160 |
On February 5, 2013, the Financial Accounting Standards Board (FASB) issued an update to current accounting standards related to disclosures of reclassifications out of accumulated other comprehensive income. The presentation requirements were adopted by the Company effective July 1, 2013 and are reflected below.
Changes in accumulated other comprehensive net losses by component were as follows:
Foreign currency translation adjustments | Net unrealized losses on derivatives | Pension and postretirement benefit adjustments | Total | |||||||||||||
Balance as of June 30, 2013, net of tax | $ | (209 | ) | $ | (30 | ) | $ | (128 | ) | $ | (367 | ) | ||||
Other comprehensive income (loss) | ||||||||||||||||
before reclassifications | 4 | (1 | ) | (5 | ) | (2 | ) | |||||||||
Amounts reclassified from accumulated other | ||||||||||||||||
comprehensive net losses | - | - | 1 | 1 | ||||||||||||
Net other comprehensive income (loss) | 4 | (1 | ) | (4 | ) | (1 | ) | |||||||||
Balance as of September 30, 2013, net of tax | $ | (205 | ) | $ | (31 | ) | $ | (132 | ) | $ | (368 | ) |
Pension and postretirement benefit reclassification adjustments are reflected in cost of products sold and selling and administrative expenses.
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NOTE 7. 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 operationswas 34.1% and 31.6% for the three months ended September 30, 2013 and 2012, respectively.
The balance of unrecognized tax benefits as of September 30, 2013 and June 30, 2013, included potential benefits of $58 and $56, 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. The total balance of accrued interest and penalties related to uncertain tax positions was $9 and $8 as of September 30, 2013 and June 30, 2013, respectively. Interest and penalties included in income tax expense resulted in a net expense of $1 and a net benefit of $6 for the three months ended September 30, 2013 and 2012, respectively.
The Company files income tax returns in U.S. federal and various state, local and foreign jurisdictions. The federal statute of limitations has expired for all tax years through June 30, 2009. Various income tax returns in state and foreign jurisdictions are currently in the process of examination.
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NOTE 8. 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 | |||||||
9/30/2013 | 9/30/2012 | ||||||
Service cost | $ | 1 | $ | 1 | |||
Interest cost | 6 | 6 | |||||
Expected return on plan assets | (6 | ) | (7 | ) | |||
Amortization of unrecognized items | 3 | 2 | |||||
Total | $ | 4 | $ | 2 |
The net periodic benefit cost for the Company's retirement health care plans was $0 for both the three months ended September 30, 2013 and 2012.
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NOTE 9. CONTINGENCIES AND GUARANTEES
Contingencies
The Company is involved in certain environmental matters, including response actions at various locations. The Company had a recorded liability of $14 and $13 as of September 30, 2013 and June 30, 2013, respectively, 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 as of both September 30, 2013 and June 30, 2013. 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 future availability of alternative clean-up technologies. Although it is reasonably 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.
In October 2012, a Brazilian appellate court issued an adverse decision in a lawsuit pending in Brazil against the Company and one of its wholly owned subsidiaries, The Glad Products Company (Glad). The lawsuit was initially filed in a Brazilian lower court in 2002 by two Brazilian companies and one Uruguayan company (collectively, Petroplus) related to joint venture agreements for the distribution of STP auto-care products in Brazil with three companies that became subsidiaries of the Company as a result of the Company's merger with First Brands Corporation in January 1999 (collectively, Clorox Subsidiaries). The pending lawsuit seeks indemnification for damages and losses for alleged breaches of the joint venture agreements and abuse of economic power by the Company and Glad. Petroplus had previously unsuccessfully raised the same claims and sought damages from the Company and the Clorox Subsidiaries in an International Chamber of Commerce (ICC) arbitration proceeding in Miami filed in 2001. The ICC arbitration panel unanimously ruled against Petroplus in a final decision in November 2003 (Final ICC Arbitration Award). The Final ICC Arbitration Award was ratified by the Superior Court of Justice of Brazil in May 2007 (Foreign Judgment), and the United States District Court for the Southern District of Florida subsequently confirmed the Final ICC Arbitration Award and recognized and adopted the Foreign Judgment as a judgment of the United States District Court for the Southern District of Florida (U.S. Judgment). Despite this, in March 2008, a Brazilian lower court ruled against the Company and Glad in the pending lawsuit and awarded Petroplus R$23 ($13) plus interest. The value of that judgment, including interest and foreign exchange fluctuations as of September 30, 2013, was approximately $35.
Among other defenses, because the Final ICC Arbitration Award, the Foreign Judgment and the U.S. Judgment relate to the same claims as those in the pending lawsuit, the Company believes that Petroplus is precluded from re-litigating these claims. Based on the unfavorable appellate court decision, the Company believes that it is reasonably possible that a loss could be incurred in this matter in excess of amounts accrued, and that the estimated range of such loss in this matter is from $0 to $29. The Company continues to believe that its defenses are meritorious, and has appealed the decision to the highest courts of Brazil, which could take years to resolve. Expenses related to this litigation and any potential additional loss would be reflected in discontinued operations, consistent with the Company's classification of expenses related to its discontinued Brazil operations.
In a separate action filed in 2004 by Petroplus, a lower Brazilian court in January 2013 nullified the Final ICC Arbitration Award. The Company believes this judgment is inconsistent with the Foreign Judgment and the U.S. Judgment and that it is without merit. The Company has appealed this decision.
Glad and the Clorox Subsidiaries have also filed separate lawsuits against Petroplus alleging misuse of the STP trademark and related matters, which are currently pending before Brazilian courts, and have taken other legal actions against Petroplus, which are pending.
The Company is subject to various other lawsuits and claims relating to issues such as contract disputes, product liability, patents and trademarks, advertising, and employee and other matters. Based on management's analysis of these claims and litigation, 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.
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) that have terms that vary in duration and in the 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 adverse effect, individually or in the aggregate, on the Company's consolidated financial statements taken as a whole.
As of September 30, 2013, the Company was a party to a letter of credit of $12, related to one of its insurance carriers, of which $0 had been drawn upon.
The Company had not recorded any liabilities on the aforementioned guarantees as of September 30, 2013.
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NOTE 10. SEGMENT RESULTS
The Company operates through strategic business units that are aggregated into four reportable segments: Cleaning, Household, Lifestyle and International.
Certain non-allocated administrative costs, interest income, interest expense and various other non-operating income and expenses are reflected in Corporate. Corporate assets include cash and cash equivalents, property and equipment, other investments and deferred taxes.
The table below presents reportable segment information and a reconciliation of the segment information to the Company's consolidated net sales and earnings from continuing operations before income taxes, with amounts that are not allocated to the reportable segments reflected in Corporate.
Net sales | Earnings (losses) from continuing operations before income taxes | |||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||
9/30/2013 | 9/30/2012 | 9/30/2013 | 9/30/2012 | |||||||||||
Cleaning | $ | 479 | $ | 472 | $ | 131 | $ | 120 | ||||||
Household | 372 | 355 | 52 | 50 | ||||||||||
Lifestyle | 218 | 208 | 53 | 56 | ||||||||||
International | 295 | 303 | 28 | 28 | ||||||||||
Corporate | - | - | (56 | ) | (60 | ) | ||||||||
Total | $ | 1,364 | $ | 1,338 | $ | 208 | $ | 194 |
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, as a percentage of consolidated net sales, were 26% and 27% for the three months ended September 30, 2013 and 2012, respectively.
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NOTE 11. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Financial assets and liabilities carried at fair value in the consolidated balance sheets are required to 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.
As of September 30, 2013 and June 30, 2013, the Company's financial assets and liabilities that were measured at fair value on a recurring basis during the period 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 related 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 18 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, 2013, the notional amount of commodity derivatives was $64, of which $36 related to jet fuel and $28 related to soybean oil. As of June 30, 2013, the notional amount of commodity derivatives was $51, of which $32 related to jet fuel and $19 related to soybean 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 generally have durations of less than 12 months. The interest rate contracts are measured at fair value using information quoted by U.S. government bond dealers.
As of both September 30, 2013 and June 30, 2013, there were no outstanding interest rate forward contracts.
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 and certain intercompany transactions. These foreign currency contracts generally have durations of no longer than 20 months. The foreign exchange contracts are measured at fair value using information quoted by foreign exchange dealers.
The notional amount of outstanding foreign currency forward contracts used by the Company's subsidiaries in Canada, Australia and New Zealand to hedge forecasted purchases of inventory were $12, $27 and $3, respectively, as of September 30, 2013, and $18, $22 and $4, respectively, as of June 30, 2013. The notional amount of outstanding foreign currency forward contracts used by the Company to economically hedge foreign exchange risk associated with certain intercompany transactions was $0 as of both September 30, 2013 and June 30, 2013.
Counterparty Risk Management
The Company utilizes a variety of financial institutions as counterparties for over-the counter derivative instruments. The Company enters into agreements governing the use of over-the-counter derivative instruments and sets internal limits on the aggregate over-the-counter derivative instrument positions held with each counterparty. Certain terms of these agreements require the Company or the counterparty to post collateral when the fair value of the derivative instruments exceeds contractually defined counterparty liability position limits. The $4 and $3 of derivative instruments reflected in liabilities as of September 30, 2013 and June 30, 2013, respectively, contained such terms. As of both September 30, 2013 and June 30, 2013, the Company was not required to post any collateral.
Certain terms of the agreements governing the Company's over-the-counter derivative instruments 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 the Company's 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 both September 30, 2013 and June 30, 2013, the Company and each of its counterparties had been assigned 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 an accounting hedge, and, if so, on the type of 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 for forecasted purchases of inventory as cash flow hedges. The Company does not designate its foreign currency forward contracts for intercompany transactions as accounting hedges. During the three months ended September 30, 2013 and 2012, the Company had no hedging instruments designated as fair value hedges.
The Company's derivative instruments designated as hedging instruments were recorded at fair value in the condensed consolidated balance sheets as follows:
Balance sheet classification | 9/30/2013 | 6/30/2013 | ||||||
Assets | ||||||||
Foreign exchange contracts | Other current assets | $ | 2 | $ | 4 | |||
Liabilities | ||||||||
Commodity purchase contracts | Accrued liabilities | $ | 3 | $ | 3 | |||
Commodity purchase contracts | Other liabilities | 1 | - | |||||
$ | 4 | $ | 3 |
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 loss in OCI as of September 30, 2013, expected to be reclassified into earnings within the next 12 months is $5. Gains and losses on 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, 2013 and 2012, respectively, hedge ineffectiveness was not significant. The Company de-designates 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 de-designated 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. Changes in the value of derivative instruments not designated as accounting hedges are recorded in other expense, net.
The effects of derivative instruments designated as hedging instruments on OCI and the condensed consolidated statements of earnings and comprehensive income were as follows:
Three Months Ended | ||||||||||||||||
(Loss) gain recognized in OCI | (Loss) gain reclassified from OCI and recognized in earnings | |||||||||||||||
9/30/2013 | 9/30/2012 | 9/30/2013 | 9/30/2012 | |||||||||||||
Commodity purchase contracts | $ | (2 | ) | $ | 2 | $ | - | $ | - | |||||||
Interest rate contracts | - | (1 | ) | (1 | ) | (1 | ) | |||||||||
Foreign exchange contracts | - | (2 | ) | 1 | - | |||||||||||
Total | $ | (2 | ) | $ | (1 | ) | $ | - | $ | (1 | ) |
The gains and losses reclassified from OCI and recognized in earnings during the three months ended September 30, 2013 for commodity purchase contracts and foreign exchange contracts were included in cost of products sold. The losses reclassified from OCI and recognized in earnings during the three months ended September 30, 2013 and 2012 for interest rate contracts were included in interest expense.
The gain from derivatives not designated as accounting hedges was $0 and $1 for the three months ended September 30, 2013 and 2012, respectively, and was reflected in other expense, net.
Other
The carrying values of cash and cash equivalents, accounts receivable, notes and loans payable and accounts payable approximated their fair values as of September 30, 2013 and June 30, 2013, due to their short maturity and nature. The estimated fair value of long-term debt, including current maturities, was $2,252 and $2,263 as of September 30, 2013 and June 30, 2013, respectively. The fair value of long-term debt was determined using secondary market prices quoted by corporate bond dealers, and was classified as Level 2. The Company accounts for its long-term debt at face value, net of any unamortized discounts or premiums.
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Basis of Presentation
The unaudited interim condensed consolidated financial statements for the three months ended September 30, 2013 and 2012, 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, 2013, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2014, or for any other 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, 2013, 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.
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9/30/2013 | 6/30/2013 | ||||||
Finished goods | $ | 364 | $ | 321 | |||
Raw materials and packaging | 120 | 121 | |||||
Work in process | 3 | 3 | |||||
LIFO allowances | (39 | ) | (40 | ) | |||
Allowances for obsolescence | (9 | ) | (11 | ) | |||
Total | $ | 439 | $ | 394 |
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9/30/2013 | 6/30/2013 | ||||
Employee benefit obligations | $ | 287 | $ | 270 | |
Venture agreement net terminal obligation | 286 | 284 | |||
Taxes | 76 | 74 | |||
Other | 113 | 114 | |||
Total | $ | 762 | $ | 742 |
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Three Months Ended | |||
9/30/2013 | 9/30/2012 | ||
Basic | 130,074 | 130,268 | |
Dilutive effect of stock options and other | 2,163 | 1,434 | |
Diluted | 132,237 | 131,702 |
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Three Months Ended | |||||||
9/30/2013 | 9/30/2012 | ||||||
Net earnings | $ | 136 | $ | 133 | |||
Other comprehensive (loss) income: | |||||||
Foreign currency translation adjustments, net of tax of $1 and $3, respectively | 4 | 27 | |||||
Net unrealized losses on derivatives, net of tax of $1 and $1, respectively | (1 | ) | (1 | ) | |||
Pension and postretirement benefit adjustments, net of tax of $2 and $0, respectively | (4 | ) | 1 | ||||
Total other comprehensive (loss) income, net of tax | (1 | ) | 27 | ||||
Comprehensive income | $ | 135 | $ | 160 |
Foreign currency translation adjustments | Net unrealized losses on derivatives | Pension and postretirement benefit adjustments | Total | |||||||||||||
Balance as of June 30, 2013, net of tax | $ | (209 | ) | $ | (30 | ) | $ | (128 | ) | $ | (367 | ) | ||||
Other comprehensive income (loss) | ||||||||||||||||
before reclassifications | 4 | (1 | ) | (5 | ) | (2 | ) | |||||||||
Amounts reclassified from accumulated other | ||||||||||||||||
comprehensive net losses | - | - | 1 | 1 | ||||||||||||
Net other comprehensive income (loss) | 4 | (1 | ) | (4 | ) | (1 | ) | |||||||||
Balance as of September 30, 2013, net of tax | $ | (205 | ) | $ | (31 | ) | $ | (132 | ) | $ | (368 | ) |
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Three Months Ended | |||||||
9/30/2013 | 9/30/2012 | ||||||
Service cost | $ | 1 | $ | 1 | |||
Interest cost | 6 | 6 | |||||
Expected return on plan assets | (6 | ) | (7 | ) | |||
Amortization of unrecognized items | 3 | 2 | |||||
Total | $ | 4 | $ | 2 |
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Net sales | Earnings (losses) from continuing operations before income taxes | |||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||
9/30/2013 | 9/30/2012 | 9/30/2013 | 9/30/2012 | |||||||||||
Cleaning | $ | 479 | $ | 472 | $ | 131 | $ | 120 | ||||||
Household | 372 | 355 | 52 | 50 | ||||||||||
Lifestyle | 218 | 208 | 53 | 56 | ||||||||||
International | 295 | 303 | 28 | 28 | ||||||||||
Corporate | - | - | (56 | ) | (60 | ) | ||||||||
Total | $ | 1,364 | $ | 1,338 | $ | 208 | $ | 194 |
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Balance sheet classification | 9/30/2013 | 6/30/2013 | ||||||
Assets | ||||||||
Foreign exchange contracts | Other current assets | $ | 2 | $ | 4 | |||
Liabilities | ||||||||
Commodity purchase contracts | Accrued liabilities | $ | 3 | $ | 3 | |||
Commodity purchase contracts | Other liabilities | 1 | - | |||||
$ | 4 | $ | 3 |
Three Months Ended | ||||||||||||||||
(Loss) gain recognized in OCI | (Loss) gain reclassified from OCI and recognized in earnings | |||||||||||||||
9/30/2013 | 9/30/2012 | 9/30/2013 | 9/30/2012 | |||||||||||||
Commodity purchase contracts | $ | (2 | ) | $ | 2 | $ | - | $ | - | |||||||
Interest rate contracts | - | (1 | ) | (1 | ) | (1 | ) | |||||||||
Foreign exchange contracts | - | (2 | ) | 1 | - | |||||||||||
Total | $ | (2 | ) | $ | (1 | ) | $ | - | $ | (1 | ) |
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