CLOROX CO /DE/, 10-Q filed on 5/4/2011
Quarterly Report
Document and Entity Information
9 Months Ended
Mar. 31, 2011
Document and Entity Information
 
Document Type
10-Q 
Amendment Flag
FALSE 
Document Period End Date
2011-03-31 
Document Fiscal Year Focus
2011 
Document Fiscal Period Focus
Q3 
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
133,334,804 
Condensed Consolidated Statements of Earnings (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
3 Months Ended
Mar. 31,
9 Months Ended
Mar. 31,
2011
2010
2011
2010
Condensed Consolidated Statements of Earnings
 
 
 
 
Net sales
$ 1,304 
$ 1,287 
$ 3,749 
$ 3,805 
Cost of products sold
729 
713 
2,121 
2,119 
Gross profit
575 
574 
1,628 
1,686 
Selling and administrative expenses
182 
178 
543 
535 
Advertising costs
125 
122 
360 
367 
Research and development costs
29 
30 
86 
85 
Goodwill impairment
 
 
258 
 
Interest expense
29 
34 
94 
107 
Other (income) expense, net
(9)
(22)
29 
Earnings from continuing operations before income taxes
219 
209 
309 
563 
Income taxes on continuing operations
78 
66 
191 
187 
Earnings from continuing operations
141 
143 
118 
376 
Discontinued operations:
 
 
 
 
Earnings from Auto businesses, net of tax
 
22 
23 
56 
Gain on sale of Auto businesses, net of tax
10 
 
247 
 
Earnings from discontinued operations
10 
22 
270 
56 
Net earnings
151 
165 
388 
432 
Basic
 
 
 
 
Continuing operations
1.03 
1.01 
0.85 
2.66 
Discontinued operations
0.07 
0.16 
1.95 
0.40 
Basic net earnings per share
1.10 
1.17 
2.80 
3.06 
Diluted
 
 
 
 
Continuing operations
1.02 
0.84 
2.64 
Discontinued operations
0.07 
0.16 
1.93 
0.40 
Diluted net earnings per share
1.09 
1.16 
2.77 
3.04 
Weighted average shares outstanding (in thousands)
 
 
 
 
Basic
136,364 
140,764 
138,172 
140,270 
Diluted
137,689 
142,014 
139,527 
141,509 
Dividends declared per share
$ 0.55 
$ 0.5 
$ 1.65 
$ 1.5 
Condensed Consolidated Balance Sheets (USD $)
In Millions
9 Months Ended
Mar. 31, 2011
Year Ended
Jun. 30, 2010
ASSETS
 
 
Cash and cash equivalents
$ 153 
$ 87 
Receivables, net
499 
540 
Inventories, net
435 
332 
Assets held for sale, net
 
405 
Other current assets
117 
125 
Total current assets
1,204 
1,489 
Property, plant and equipment, net
1,006 
966 
Goodwill
1,066 
1,303 
Trademarks, net
550 
550 
Other intangible assets, net
86 
96 
Other assets
139 
144 
Total assets
4,051 
4,548 
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
 
 
Notes and loans payable
343 
371 
Current maturities of long-term debt
 
300 
Accounts payable
360 
409 
Accrued liabilities
452 
491 
Income taxes payable
77 
74 
Total current liabilities
1,232 
1,645 
Long-term debt
2,125 
2,124 
Other liabilities
715 
677 
Deferred income taxes
61 
19 
Total liabilities
4,133 
4,465 
Contingencies
 
 
Stockholders' (deficit) equity
 
 
Common stock: $1.00 par value; 750,000,000 shares authorized; 158,741,461 shares issued at March 31, 2011 and June 30, 2010; and 133,334,804 and 138,764,511 shares outstanding at March 31, 2011 and June 30, 2010, respectively
159 
159 
Additional paid-in capital
623 
617 
Retained earnings
1,059 
920 
Treasury shares, at cost: 25,406,657 and 19,976,950 shares at March 31, 2011 and June 30, 2010, respectively
(1,616)
(1,242)
Accumulated other comprehensive net losses
(307)
(371)
Stockholders' (deficit) equity
(82)
83 
Total liabilities and stockholders' (deficit) equity
$ 4,051 
$ 4,548 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Mar. 31, 2011
Jun. 30, 2010
Condensed Consolidated Balance Sheets
 
 
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
133,334,804 
138,764,511 
Treasury stock, shares
25,406,657 
19,976,950 
Condensed Consolidated Statements of Cash Flows (USD $)
In Millions
9 Months Ended
Mar. 31,
2011
2010
Operating activities:
 
 
Net earnings
$ 388 
$ 432 
Deduct: Earnings from discontinued operations
270 
56 
Earnings from continuing operations
118 
376 
Adjustments to reconcile earnings from continuing operations:
 
 
Depreciation and amortization
130 
138 
Share-based compensation
23 
46 
Deferred income taxes
33 
21 
Goodwill impairment costs
258 
 
Other
(19)
Changes in:
 
 
Receivables, net
(13)
(30)
Inventories, net
(93)
(47)
Other current assets
14 
(4)
Accounts payable and accrued liabilities
(90)
(44)
Income taxes payable
(16)
Net cash provided by continuing operations
387 
421 
Net cash provided by discontinued operations
19 
22 
Net cash provided by operations
406 
443 
Investing activities:
 
 
Capital expenditures
(159)
(109)
Proceeds from sale of businesses, net of transaction costs
747 
 
Businesses acquired
 
(19)
Other
25 
Net cash provided by (used for) investing activities by continuing operations
613 
(126)
Net cash used for investing activities by discontinued operations
 
(2)
Net cash provided by (used for) investing activities
613 
(128)
Financing activities:
 
 
Notes and loans payable, net
(29)
163 
Long-term debt borrowings
 
297 
Long-term debt repayments
(300)
(590)
Treasury stock purchased
(472)
 
Cash dividends paid
(230)
(211)
Issuance of common stock for employee stock plans and other
70 
61 
Net cash used for financing activities
(961)
(280)
Effect of exchange rate changes on cash and cash equivalents
 
Net increase in cash and cash equivalents
66 
35 
Cash and cash equivalents:
 
 
Beginning of period
87 
206 
End of period
$ 153 
$ 241 
Interim Financial Statements
Interim Financial Statements
NOTE 1. INTERIM FINANCIAL STATEMENTS
 
Basis of Presentation
 
The unaudited interim condensed consolidated financial statements for the three and nine months ended March 31, 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. 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 March 31, 2011, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2011, 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 (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, 2010, 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.
 
Discontinued Operations
Discontinued Operations
NOTE 2. DISCONTINUED OPERATIONS
 
In September 2010, the Company entered into a definitive agreement to sell its global auto care businesses (Auto Businesses) to an affiliate of Avista Capital Partners in an all-cash transaction. In November 2010, the Company completed the sale pursuant to the terms of a Purchase and Sale Agreement (Purchase Agreement) and received cash consideration of $755. The Company also received cash flows of approximately $30 related to working capital that was retained by the Company as part of the sale. Included in earnings from discontinued operations for the three and nine months ended March 31, 2011 is an after-tax gain on the transaction of $10 and $247, respectively. The final amount of proceeds is subject to closing adjustments related to the portion of the working capital transferred, which are not expected to be material.
 
Included in the transaction were substantially all of the Company's global auto care businesses, the majority of which are in the U.S., Australia, Canada and Europe, including the worldwide rights to the market-leading Armor All® and STP® brands. As part of the transaction, the buyer acquired two auto care manufacturing facilities, one in the U.S. and one in the United Kingdom. Employees at these facilities, the Auto Businesses management team and other employees affiliated with the Auto Businesses transferred to the buyer. The results of the Auto Businesses have historically been part of the Company's Cleaning and International reportable segments.
 
As part of the Purchase Agreement, certain transition services are being provided to the buyer for a period of up to eighteen months from the date of sale. The purpose of these services is to provide short-term assistance to the buyer in assuming the operations of the Auto Businesses. These services do not confer to the Company the ability to influence the operating or financial policies of the Auto Businesses under their new ownership. The Company's cash inflows and outflows from these services have not been nor are expected to be significant during the transition period. Income from these transition services for the three and nine months ended March 31, 2011 was $3 and $6, respectively, and is being reported in other (income) expense in continuing operations. The costs associated with the services are reflected in continuing operations in the condensed consolidated statements of earnings. Aside from the transition services, the Company has included the financial results of the Auto Businesses in discontinued operations for all periods presented. Assets related to the Auto Businesses are presented as assets held for sale, net, on the accompanying condensed consolidated balance sheet as of June 30, 2010.
 
The following table presents the earnings attributable to the Auto Businesses which includes the financial results up to November 5, 2010, the date of the sale.
 
                             
  Three Months Ended   Nine Months Ended
  3/31/2011        3/31/2010        3/31/2011        3/31/2010
Net sales $       -   $       79     $       95     $       211  
                             
Earnings before income taxes   -     35       34       88  
Income tax expense on earnings   -     (13 )     (11 )     (32 )
Gain on sale, net of tax   10     -       247       -  
Earnings from discontinued operations $ 10   $ 22     $ 270     $ 56  
                             
During the three months ended March 31, 2011, the Company finalized the tax basis of its Auto Businesses. As a result, there was a reduction in tax expense related to the gain on sale of $11.
 
The major classes of assets and liabilities of the Auto Businesses reflected as held for sale as of June 30, 2010 were as follows:
 
       
  6/30/2010
Receivables, net $       4  
Inventories, net   35  
Other current assets   1  
Property, plant and equipment, net   13  
Goodwill   347  
Trademarks and other intangible assets   12  
Accounts payable and other liabilities   (7 )
Assets held for sale, net $ 405  
       
Financial Instruments and Fair Value Measurements
Financial Instruments and Fair Value Measurements
NOTE 3. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
 
The Company is exposed to certain commodity, interest rate and foreign currency risks relating to its ongoing business operations. The Company may use commodity futures and 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 may enter into 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 Company may also enter 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 twelve 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 its commodity forward and future contracts of forecasted purchases for raw materials, interest rate forward contracts of forecasted interest payments, and its foreign currency forward contracts of forecasted purchases of inventory as cash flow hedges. During the three and nine months ended March 31, 2011 and 2010, the Company had no hedging instruments designated as fair value hedges.
  
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 gain at March 31, 2011, expected to be reclassified into earnings within the next twelve months is $7. 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 and nine months ended March 31, 2011 and 2010, the hedge ineffectiveness was not material. The Company dedesignates these 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 other comprehensive income for dedesignated hedges remains in accumulated other comprehensive income 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 after dedesignation are recorded in other (income) expense and amounted to $3 and $6 for the three and nine months ended March 31, 2011, and $0 for the three and nine months ended March 31, 2010, respectively.
 
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 classification        3/31/2011        6/30/2010
Assets                    
Foreign exchange contracts   Other current assets   $       -     $       1  
Interest rate contracts   Other current assets     1       -  
Commodity purchase contracts   Other current assets     6       -  
Commodity purchase contracts   Other assets     1       -  
        $ 8     $ 1  
                     
Liabilities                    
Foreign exchange contracts   Accrued liabilities   $ (2 )   $ -  
Commodity purchase contracts   Accrued liabilities     -       (2 )
        $ (2 )   $ (2 )
                     
The effects of derivative instruments designated as hedging instruments on OCI and on the statement of earnings for the three and nine months ended March 31, 2011, were as follows:
 
                               
    Three months ended 3/31/2011   Nine months ended 3/31/2011
Cash flow hedges        Gain (Loss)
recognized in OCI
       Gain (Loss)
reclassified from OCI
and recognized in
earnings
       Gain (Loss)
recognized in
OCI
       Gain reclassified from
OCI and recognized in
earnings
Commodity purchase contracts   $       1     $       1     $       12     $       2
Interest rate contracts     1       -       7       -
Foreign exchange contracts     (1 )     (1 )     (3 )     -
Total   $ 1     $ -     $ 16     $ 2
                               
 
The gains and losses reclassified from OCI and recognized in earnings for commodity purchase contracts and foreign exchange contracts are included in cost of products sold.
 
The Company's derivative financial instruments not designated as hedging instruments are recorded at fair value in the condensed consolidated balance sheet as follows:
 
                   
        Fair value
         Balance Sheet classification        3/31/2011        6/30/2010
Commodity purchase contracts   Other current assets   $ 3   $ -  
Commodity purchase contracts   Accrued liabilities     -     (1 )
        $       3   $       (1 )
                   
As of March 31, 2011, the net notional value of commodity derivatives was $55, of which $12 related to diesel fuel, $18 related to jet fuel, $23 related to soybean oil and $2 related to crude oil.
 
As of March 31, 2011, the net notional value of interest rate forward contracts was $150.
 
As of March 31, 2011, the net notional values of outstanding foreign currency forward contracts related to the Company's subsidiaries in Canada and Australia were $22 and $6, respectively, used to hedge forecasted purchases of inventory.
 
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 as of March 31, 2011.
 
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. If our credit rating 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 March 31, 2011 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 March 31, 2011, the Company's financial assets and liabilities that were measured at fair value on a recurring basis during the year comprised of derivative financial instruments and were all level 2.
 
Commodity purchase contracts are measured at fair value using market quotations obtained from commodity derivative dealers. The interest rate contracts are measured at fair value using information quoted by U.S. government bond dealers. The foreign exchange contracts are measured at fair value using information quoted by foreign exchange dealers.
 
During the fiscal 2011 second quarter, the Company determined that the book value of the Burt's Bees reporting unit exceeded its fair value and recognized an impairment charge of $258 (See Note 5). The implied fair value was based on significant unobservable inputs, and as a result, the fair value measurement was classified as Level 3. During the nine months ended March 31, 2011 and 2010, the Company did not have any other significant assets or liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition.
 
The carrying values of cash and cash equivalents, accounts receivable, accounts payable and notes and loans payable approximate their fair values at March 31, 2011 and June 30, 2010, due to the short maturity and nature of those balances. The estimated fair value of long-term debt, including current maturities, was $2,284 and $2,635 at March 31, 2011 and June 30, 2010, 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.
Inventories, Net
Inventories, Net
NOTE 4. INVENTORIES, NET
 
Inventories, net, consisted of the following as of:
 
  3/31/2011        6/30/2010
Finished goods $       363     $       272  
Raw materials and packaging   110       94  
Work in process   4       4  
LIFO allowances   (29 )     (28 )
Allowances for obsolescence   (13 )     (10 )
Total $ 435     $ 332  
 
Goodwill, Trademarks and Other Intangible Assets
Goodwill, Trademarks and Other Intangible Assets
NOTE 5. GOODWILL, TRADEMARKS AND OTHER INTANGIBLE ASSETS
 
During the fiscal 2011 second quarter, the Company identified challenges in increasing sales for the Burt's Bees business in new international markets in accordance with projections, particularly in the European Union and Asia. Additionally, during the fiscal 2011 second quarter, the Company initiated its process for updating the three-year long-range financial and operating plan for the Burt's Bees business. In addition to slower than projected growth of international sales and challenges in the timing of certain international expansion plans, the domestic natural personal care category had not recovered in accordance with the Company's projections. Following the comprehensive reevaluation, the Company recognized an impairment charge during the fiscal 2011 second quarter.
 
The impairment charge is a result of changes in the assumptions used to determine the fair value of the Burt's Bees business based on slower than forecasted category growth as well as recent challenges in international expansion plans, which have adversely affected the assumptions for international growth and the estimates of expenses necessary to achieve that growth. The revised assumptions reflect somewhat higher cost levels than previously projected. As a result of this assessment, the Company determined that the book value of the Burt's Bees reporting unit exceeded its fair value, resulting in an impairment charge of $258 recognized in the second quarter ended December 31, 2010. The goodwill impairment charge is based on the Company's current estimates regarding the future financial performance of the Burt's Bees business and macroeconomic factors. There was no substantial tax benefit associated with this noncash charge.
  
To determine the fair value of the Burt's Bees reporting unit, which is in the Lifestyle segment, the Company used a discounted cash flow (DCF) approach, as it believes that this approach is the most reliable indicator of fair value of the business. Under this approach, the Company estimated the future cash flows of the Burt's Bees reporting unit and discounted these cash flows at a rate of return that reflects its relative risk.
 
The Company's trademarks and definite-lived intangible assets for the Burt's Bees reporting unit were included in the impairment testing. The impairment testing concluded that these assets were not impaired.
 
During the fiscal 2011 third quarter, the Company finalized the goodwill impairment analysis for the Burt's Bees reporting unit and concluded that no further adjustment was necessary.
 
Changes in the carrying amount of Goodwill as of March 31, 2011, were as follows:
 
                                 
  Goodwill
  Cleaning        Lifestyle        Household        International        Total
Balance June 30, 2010 $       275   $       623     $       85   $       320     1,303  
Translation adjustments and other   -     -       -     14     14  
Balance September 30, 2010   275     623       85     334     1,317  
Goodwill impairment   -     (258 )     -     -     (258 )
Translation adjustments and other   -     -       -     4     4  
Balance December 31, 2010   275     365       85     338     1,063  
Translation adjustments and other   -     -       -     3     3  
Balance March 31, 2011 $ 275   $ 365     $ 85   $ 341   $       1,066  
                                 
There were no significant changes to trademarks and other intangible assets for the nine months ended March 31, 2011.
 
Other Liabilities
Other Liabilities
NOTE 6. OTHER LIABILITIES
 
Other liabilities consisted of the following as of:
 
  3/31/2011        6/30/2010
Employee benefit obligations $       305   $       306
Venture agreement net terminal obligation   276     274
Taxes   101     64
Other   33     33
Total $ 715   $ 677
           
Net Earnings Per Share
Net Earnings Per Share
NOTE 7. NET EARNINGS PER SHARE
 
The following is the reconciliation of net earnings to net earnings applicable to common stock:
 
  Three Months Ended   Nine Months Ended
  3/31/2011      3/31/2010      3/31/2011      3/31/2010
Earnings from continuing operations $      141   $      143   $      118     $      376  
Earnings from discontinued operations   10     22     270       56  
Net earnings   151     165     388       432  
Less: Earnings allocated to participating securities   -     -     (1 )     (2 )
Net earnings applicable to common stock $ 151   $ 165   $ 387     $ 430  
                           
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   Nine Months Ended
  3/31/2011       3/31/2010       3/31/2011       3/31/2010
Basic 136,364   140,764   138,172   140,270
Dilutive effect of stock options and other 1,325   1,250   1,355   1,239
Diluted 137,689   142,014   139,527   141,509
               
During the three and nine months ended March 31, 2011, the Company did not include stock options to purchase approximately 2.0 million shares of the Company's common stock in the calculations of diluted EPS because their inclusion would be anti-dilutive.
 
During the three and nine months ended March 31, 2010, the Company did not include stock options to purchase approximately 2.7 million and 4.0 million shares, respectively, of the Company's common stock, in the calculations of diluted EPS because their inclusion would be anti-dilutive.
 
Share repurchases under the open-market purchase program were $338 (approximately 5.0 million shares) for the three months ended March 31, 2011. The Company did not repurchase any shares under the Evergreen Program during the three months ended March 31, 2011. Share repurchases under the open-market purchase program and Evergreen Program were $338 (approximately 5.0 million shares) and $134 (approximately 2.1 million shares), respectively, for the nine months ended March 31, 2011. The Company did not repurchase any shares during the three and nine months ended March 31, 2010.
 
In April 2011, share repurchases under the open-market purchase program were $80 (approximately 1.2 million shares).
Comprehensive Income
Comprehensive Income
NOTE 8. 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) equity, net of tax. Comprehensive income was as follows:
 
  Three Months Ended   Nine Months Ended
  3/31/2011      3/31/2010      3/31/2011      3/31/2010
Net earnings $      151   $      165     $      388   $      432
Other comprehensive gains (losses), net of tax:                        
       Foreign currency translation   8     10       50     27
       Net derivative adjustments   1     (1 )     7     10
       Pension and postretirement benefit adjustments   2     1       7     3
Total comprehensive income $ 162   $ 175     $ 452   $ 472
 
Income Taxes
Income Taxes
NOTE 9. 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 income from continuing operations was 35.5% and 61.8% for the three and nine months ended March 31, 2011, respectively, and 31.6% and 33.2% for the three and nine months ended March 31, 2010, respectively. The substantially different tax rate in the current year-to-date period resulted from the non-deductible goodwill impairment charge of $258 related to the Burt's Bees reporting unit as there was no substantial tax benefit associated with this noncash charge. The effective tax rate on continuing operations, excluding the noncash goodwill impairment charge, was 35.5% and 33.9% for the three and nine months ended March 31, 2011, respectively. The lower rate for the three months ended March 31, 2010, was primarily due to reductions of uncertain tax positions in the prior period. The lower rate for the nine months ended March 31, 2010 was primarily due to lower foreign tax expense and reductions of uncertain tax positions in the year-ago period, partially offset by the statutory phase-in of increased rates for the domestic manufacturing deduction in the current period.
 
Included in the balance of unrecognized tax benefits at March 31, 2011 and June 30, 2010, are potential benefits of $69 and $57, respectively, that if recognized, would affect the effective tax rate on earnings.
 
Gross unrecognized tax benefits relating to discontinued operations increased by $12 in the current period.
 
The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of March 31, 2011 and June 30, 2010, the total balance of accrued interest and penalties related to uncertain tax positions was $9 and $22, respectively. Interest and penalties included in income tax expense was an expense of $1 and a benefit of $2 for the three and nine months ended March 31, 2011, and a benefit of $1 and an expense of $4 for the three and nine months ended March 31, 2010, 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 were effectively settled by the Company and the IRS Appeals Division during the first quarter of fiscal year 2011. Tax and interest payments of $18 were made with respect to these issues in the prior quarter, and interest payments of $4 were made with respect to these issues in the current period. Various income tax returns in state and foreign jurisdictions are currently in the process of examination.
 
In the twelve months succeeding March 31, 2011, audit resolutions could potentially reduce total unrecognized tax benefits by up to $4, 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
NOTE 10. 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   Nine Months Ended
  3/31/2011       3/31/2010       3/31/2011       3/31/2010
Components of net periodic benefit cost (income):                              
       Service cost $ 2     $ 2     $ 9     $ 7  
       Interest cost   8       8       22       23  
       Expected return on plan assets   (9 )     (8 )     (25 )     (23 )
       Amortization of unrecognized items   5       2       13       6  
Total net periodic benefit cost $ 6     $ 4     $ 19     $ 13  
                               
The net periodic benefit cost for the Company's retirement health care plans was $1 and $3, respectively, for each of the three and nine month periods ended March 31, 2011 and 2010, respectively.
 
During the three months ended September 30, 2010, the Company made discretionary contributions of $15 to the domestic qualified retirement income plan.
 
Contingencies
Contingencies
NOTE 11. CONTINGENCIES
 
The Company is involved in certain environmental matters, including Superfund and other response actions at various locations. The Company has a recorded liability of $15 and $16 at March 31, 2011 and June 30, 2010, 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, accounts for a substantial majority of the recorded liability at both March 31, 2011 and June 30, 2010. 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. 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, 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 condensed consolidated financial statements taken as a whole.
 
Segment Results
Segment Results
NOTE 12. SEGMENT RESULTS
 
The Company operates through strategic business units, which are aggregated into four reportable segments: Cleaning, Household, Lifestyle and International. As a result of the recognition of the Auto Businesses as discontinued operations, the results of the Auto Businesses are no longer included in the Cleaning and International reportable segments for any period presented. 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. These products include home-care, laundry, 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®, Ever Clean®, Chux®, Kingsford®, Fresh Step®, Scoop Away®, Ever Clean®, K C Masterpiece® and Hidden Valley® brands.
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 (losses) from continuing operations before income taxes, with amounts that are not allocated to the operating segments shown as Corporate.
 
                       
  Net Sales
  Three Months Ended   Nine Months Ended
  3/31/2011       3/31/2010         3/31/2011       3/31/2010
Cleaning $      407   $      397   $      1,210   $      1,229
Household   394     408     1,068     1,123
Lifestyle   227     226     646     638
International   276     256     825     815
Total Company $ 1,304   $ 1,287   $ 3,749   $ 3,805
                       
                               
  Earnings (Losses) from Continuing Operations
Before Income Taxes
  Three Months Ended   Nine Months Ended
  3/31/2011       3/31/2010       3/31/2011       3/31/2010
Cleaning $      89     $      94     $      274     $      283  
Household   73       72       151       154  
Lifestyle   68       82       (66 )     226  
International   39       38       120       113  
Corporate   (50 )     (77 )     (170 )     (213 )
Total Company $ 219     $ 209     $ 309     $ 563  
                               
All intersegment sales are eliminated and are not included in the Company's reportable segments' net sales.
 
The earnings (losses) from continuing operations before income taxes for the Lifestyle segment includes a $258 noncash goodwill impairment charge for the Burt's Bees business for the nine months ended March 31, 2011.
 
Net sales to the Company's largest customer, Wal-Mart Stores, Inc. and its affiliates, were 25% and 26% of consolidated net sales for the three and nine months ended March 31, 2011, respectively, and 27% of consolidated net sales for both the three and nine months ended March 31, 2010.
 
Guarantees
Guarantees
NOTE 13. GUARANTEES
 
In conjunction with divestitures and other transactions, the Company may provide indemnifications relating to the enforceability of trademarks; pre-existing legal, tax, environmental and employee liabilities; as well as provisions for product returns and other items. The Company has various indemnification agreements in effect that specify a maximum possible indemnification exposure. As of March 31, 2011, the Company's aggregate maximum exposure from these agreements is $68. This amount consists primarily of an indemnity of up to $38 made to an affiliate of Avista Capital Partners in connection with the sale of the Auto Businesses, a substantial portion of which expires May 5, 2011. The Company has not made, nor does it anticipate making, any payments relating to the indemnities.
 
At March 31, 2011, the Company is a party to letters of credit of $17, primarily related to one of its insurance carriers.
 
The Company has not recorded any liabilities on any of the aforementioned guarantees at March 31, 2011.
Interim Financial Statements (Policy)
Basis of Presentation
 
The unaudited interim condensed consolidated financial statements for the three and nine months ended March 31, 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. 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 March 31, 2011, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2011, 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 (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, 2010, 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.
Discontinued Operations (Tables)
                             
  Three Months Ended   Nine Months Ended
  3/31/2011        3/31/2010        3/31/2011        3/31/2010
Net sales $       -   $       79     $       95     $       211  
                             
Earnings before income taxes   -     35       34       88  
Income tax expense on earnings   -     (13 )     (11 )     (32 )
Gain on sale, net of tax   10     -       247       -  
Earnings from discontinued operations $ 10   $ 22     $ 270     $ 56  
                             
       
  6/30/2010
Receivables, net $       4  
Inventories, net   35  
Other current assets   1  
Property, plant and equipment, net   13  
Goodwill   347  
Trademarks and other intangible assets   12  
Accounts payable and other liabilities   (7 )
Assets held for sale, net $ 405  
       
Financial Instruments and Fair Value Measurements (Tables)
                     
        Fair value
         Balance Sheet classification        3/31/2011        6/30/2010
Assets                    
Foreign exchange contracts   Other current assets   $       -     $       1  
Interest rate contracts   Other current assets     1       -  
Commodity purchase contracts   Other current assets     6       -  
Commodity purchase contracts   Other assets     1       -  
        $ 8     $ 1  
                     
Liabilities                    
Foreign exchange contracts   Accrued liabilities   $ (2 )   $ -  
Commodity purchase contracts   Accrued liabilities     -       (2 )
        $ (2 )   $ (2 )
                     
                               
    Three months ended 3/31/2011   Nine months ended 3/31/2011
Cash flow hedges        Gain (Loss)
recognized in OCI
       Gain (Loss)
reclassified from OCI
and recognized in
earnings
       Gain (Loss)
recognized in
OCI
       Gain reclassified from
OCI and recognized in
earnings
Commodity purchase contracts   $       1     $       1     $       12     $       2
Interest rate contracts     1       -       7       -
Foreign exchange contracts     (1 )     (1 )     (3 )     -
Total   $ 1     $ -     $ 16     $ 2
                               
                   
        Fair value
         Balance Sheet classification        3/31/2011        6/30/2010
Commodity purchase contracts   Other current assets   $ 3   $ -  
Commodity purchase contracts   Accrued liabilities     -     (1 )
        $       3   $       (1 )
                   
Inventories, Net (Tables)
Schedule of Inventories, Net
  3/31/2011        6/30/2010
Finished goods $       363     $       272  
Raw materials and packaging   110       94  
Work in process   4       4  
LIFO allowances   (29 )     (28 )
Allowances for obsolescence   (13 )     (10 )
Total $ 435     $ 332  
 
Goodwill, Trademarks and Other Intangible Assets (Tables)
Schedule of Goodwill
                                 
  Goodwill
  Cleaning        Lifestyle        Household        International        Total
Balance June 30, 2010 $       275   $       623     $       85   $       320     1,303  
Translation adjustments and other   -     -       -     14     14  
Balance September 30, 2010   275     623       85     334     1,317  
Goodwill impairment   -     (258 )     -     -     (258 )
Translation adjustments and other   -     -       -     4     4  
Balance December 31, 2010   275     365       85     338     1,063  
Translation adjustments and other   -     -       -     3     3  
Balance March 31, 2011 $ 275   $ 365     $ 85   $ 341   $       1,066  
                                 
Other Liabilities (Tables)
Other Liabilities
  3/31/2011        6/30/2010
Employee benefit obligations $       305   $       306
Venture agreement net terminal obligation   276     274
Taxes   101     64
Other   33     33
Total $ 715   $ 677
           
Net Earnings Per Share (Tables)
  Three Months Ended   Nine Months Ended
  3/31/2011      3/31/2010      3/31/2011      3/31/2010
Earnings from continuing operations $      141   $      143   $      118     $      376  
Earnings from discontinued operations   10     22     270       56  
Net earnings   151     165     388       432  
Less: Earnings allocated to participating securities   -     -     (1 )     (2 )
Net earnings applicable to common stock $ 151   $ 165   $ 387     $ 430  
                           
  Three Months Ended   Nine Months Ended
  3/31/2011       3/31/2010       3/31/2011       3/31/2010
Basic 136,364   140,764   138,172   140,270
Dilutive effect of stock options and other 1,325   1,250   1,355   1,239
Diluted 137,689   142,014   139,527   141,509
               
Comprehensive Income (Tables)
Schedule of Accumulated Other Comprehensive Income Loss Net of Tax
  Three Months Ended   Nine Months Ended
  3/31/2011      3/31/2010      3/31/2011      3/31/2010
Net earnings $      151   $      165     $      388   $      432
Other comprehensive gains (losses), net of tax:                        
       Foreign currency translation   8     10       50     27
       Net derivative adjustments   1     (1 )     7     10
       Pension and postretirement benefit adjustments   2     1       7     3
Total comprehensive income $ 162   $ 175     $ 452   $ 472
 
Retirement Income and Health Care Benefit Plans (Tables)
Components of the Net Cost of Retirement Income and Health Care Plans
  Three Months Ended   Nine Months Ended
  3/31/2011       3/31/2010       3/31/2011       3/31/2010
Components of net periodic benefit cost (income):                              
       Service cost $ 2     $ 2     $ 9     $ 7  
       Interest cost   8       8       22       23  
       Expected return on plan assets   (9 )     (8 )     (25 )     (23 )
       Amortization of unrecognized items   5       2       13       6  
Total net periodic benefit cost $ 6     $ 4     $ 19     $ 13  
                               
Segment Results (Tables)
                       
  Net Sales
  Three Months Ended   Nine Months Ended
  3/31/2011       3/31/2010         3/31/2011       3/31/2010
Cleaning $      407   $      397   $      1,210   $      1,229
Household   394     408     1,068     1,123
Lifestyle   227     226     646     638
International   276     256     825     815
Total Company $ 1,304   $ 1,287   $ 3,749   $ 3,805
                       
                               
  Earnings (Losses) from Continuing Operations
Before Income Taxes
  Three Months Ended   Nine Months Ended
  3/31/2011       3/31/2010       3/31/2011       3/31/2010
Cleaning $      89     $      94     $      274     $      283  
Household   73       72       151       154  
Lifestyle   68       82       (66 )     226  
International   39       38       120       113  
Corporate   (50 )     (77 )     (170 )     (213 )
Total Company $ 219     $ 209     $ 309     $ 563  
                               
Discontinued Operations (Details)
In Millions
3 Months Ended
Mar. 31,
9 Months Ended
Mar. 31,
Nov. 30, 2010
2011
2010
2011
2010
Jun. 30, 2010
Discontinued Operations
 
 
 
 
 
 
Gross proceeds from sale of businesses
755 
 
 
 
 
 
After-tax gain from sale of discontinued operation
 
10 
 
247 
 
 
Estimated cash flows related to working capital
 
 
 
30 
 
 
Term of transitions services agreement, months
 
 
 
18 
 
 
Income from transition services agreement
 
 
 
 
Reduction of tax expense related to gain on sale
 
11 
 
 
 
 
Net sales
 
 
79 
95 
211 
 
Earnings before income taxes
 
 
35 
34 
88 
 
Income tax expense on earnings
 
 
(13)
(11)
(32)
 
Gain on sale, net of tax
 
10 
 
247 
 
 
Earnings from discontinued operations
 
10 
22 
270 
56 
 
Receivables, net
 
 
 
 
 
Inventories, net
 
 
 
 
 
35 
Other current assets
 
 
 
 
 
Property, plant and equipment, net
 
 
 
 
 
13 
Goodwill
 
 
 
 
 
347 
Trademarks and other intangible assets
 
 
 
 
 
12 
Accounts payable and other liabilities
 
 
 
 
 
(7)
Assets held for sale, net
 
 
 
 
 
405 
Financial Instruments and Fair Value Measurements (Details)
In Millions
3 Months Ended
Mar. 31,
9 Months Ended
Mar. 31,
2011
2010
2011
2010
Jun. 30, 2010
Maximum duration for commodity futures and swap contracts, months
 
 
18 
 
 
Maximum duration for interest rate forward contracts, months
 
 
 
 
Maximum duration for foreign currency contracts, months
 
 
12 
 
 
Derivative financial instruments designated as fair value hedges
 
Estimated amount of the existing net gain to be reclassified into earnings, in the next 12 months
 
 
 
 
Changes in the value of derivative instruments after dedesignation
 
Derivative asset designated as hedging instrument, fair value
 
 
Derivative liability designated as hedging instrument, fair value
(2)
 
(2)
 
(2)
Gain (Loss) recognized in OCI
 
16 
 
 
Gain reclassified from OCI and recognized in earnings
 
 
 
 
Derivative asset not designated as hedging instrument fair value
 
 
 
Derivative liability not designated as hedging instrument, fair value
 
 
 
 
(1)
Notional value of commodity derivatives
55 
 
55 
 
 
Notional amount of interest rate forward contract
150 
 
150 
 
 
Goodwill impairment
 
 
258 
 
 
Estimated fair value of long-term debt
2,284 
 
2,284 
 
2,635 
Interest Rate Contract [Member]
 
 
 
 
 
Gain (Loss) recognized in OCI
 
 
 
Gain reclassified from OCI and recognized in earnings
 
 
 
 
 
Interest Rate Contract [Member] | Other Current Assets [Member]
 
 
 
 
 
Derivative asset designated as hedging instrument, fair value
 
 
 
 
Foreign Exchange Contracts
 
 
 
 
 
Gain (Loss) recognized in OCI
(1)
 
(3)
 
 
Gain reclassified from OCI and recognized in earnings
(1)
 
 
 
 
Foreign Exchange Contracts | Accrued Liabilities [Member]
 
 
 
 
 
Derivative liability designated as hedging instrument, fair value
(2)
 
 
 
 
Foreign Exchange Contracts | Other Current Assets [Member]
 
 
 
 
 
Derivative asset designated as hedging instrument, fair value
 
 
 
 
Commodity Purchase Contracts
 
 
 
 
 
Gain (Loss) recognized in OCI
 
12 
 
 
Gain reclassified from OCI and recognized in earnings
 
 
 
Commodity Purchase Contracts | Accrued Liabilities [Member]
 
 
 
 
 
Derivative liability designated as hedging instrument, fair value
 
 
 
 
(2)
Derivative liability not designated as hedging instrument, fair value
 
 
 
 
(1)
Commodity Purchase Contracts | Other Current Assets [Member]
 
 
 
 
 
Derivative asset designated as hedging instrument, fair value
 
 
 
 
Derivative asset not designated as hedging instrument fair value
 
 
 
 
Commodity Purchase Contracts | Other Assets [Member]
 
 
 
 
 
Derivative asset designated as hedging instrument, fair value
 
 
 
 
Diesel Fuel Commodity Contract [Member]
 
 
 
 
 
Notional value of commodity derivatives
12 
 
 
 
 
Jet Fuel Commodity Contract [Member]
 
 
 
 
 
Notional value of commodity derivatives
18 
 
 
 
 
Soybean Oil Commodity Contract [Member]
 
 
 
 
 
Notional value of commodity derivatives
23 
 
 
 
 
Crude Oil Commodity Contract [Member]
 
 
 
 
 
Notional value of commodity derivatives
 
 
 
 
Canada Foreign Currency Exchange Contracts [Member]
 
 
 
 
 
Notional value
22 
 
 
 
 
Australia Foreign Currency Exchange Contracts [Member]
 
 
 
 
 
Notional value
 
 
 
 
Inventories, Net (Details) (USD $)
In Millions
Mar. 31, 2011
Jun. 30, 2010
Inventories, Net
 
 
Finished goods
$ 363 
$ 272 
Raw materials and packaging
110 
94 
Work in process
LIFO allowances
(29)
(28)
Allowances for obsolescence
(13)
(10)
Total
$ 435 
$ 332 
Goodwill, Trademarks and Other Intangible Assets (Details) (USD $)
In Millions
3 Months Ended
Mar. 31, 2011
3 Months Ended
Dec. 31, 2010
3 Months Ended
Sep. 30, 2010
Balance, goodwill
$ 1,066 
$ 1,063 
$ 1,317 
Translation adjustments and other
14 
Goodwill impairment costs
 
(258)
 
Cleaning [Member]
 
 
 
Balance, goodwill
275 
275 
275 
Lifestyle [Member]
 
 
 
Balance, goodwill
365 
365 
623 
Goodwill impairment costs
 
(258)
 
Household [Member]
 
 
 
Balance, goodwill
85 
85 
85 
International [Member]
 
 
 
Balance, goodwill
341 
338 
334 
Translation adjustments and other
$ 3 
$ 4 
$ 14 
Other Liabilities (Details) (USD $)
In Millions
Mar. 31, 2011
Jun. 30, 2010
Other Liabilities
 
 
Employee benefit obligations
$ 305 
$ 306 
Venture agreement net terminal obligation
276 
274 
Taxes
101 
64 
Other
33 
33 
Total
$ 715 
$ 677 
Net Earnings Per Share (Details)
In Millions, except Share data
3 Months Ended
Mar. 31,
9 Months Ended
Mar. 31,
2011
2010
2011
2010
Apr. 30, 2011
3 Months Ended
Mar. 31, 2011
9 Months Ended
Mar. 31, 2011
3 Months Ended
Mar. 31, 2011
9 Months Ended
Mar. 31, 2011
Earnings (loss) from continuing operations
141 
143 
118 
376 
 
 
 
 
 
Earnings from discontinued operations
10 
22 
270 
56 
 
 
 
 
 
Net earnings
151 
165 
388 
432 
 
 
 
 
 
Less: Earnings allocated to participating securities
 
 
(1)
(2)
 
 
 
 
 
Net earnings applicable to common stock
151 
165 
387 
430 
 
 
 
 
 
Basic
136,364,000 
140,764,000 
138,172,000 
140,270,000 
 
 
 
 
 
Dilutive effect of stock options and other
1,325,000 
1,250,000 
1,355,000 
1,239,000 
 
 
 
 
 
Diluted
137,689,000 
142,014,000 
139,527,000 
141,509,000 
 
 
 
 
 
Stock options
2,000,000 
2,700,000 
2,000,000 
4,000,000 
 
 
 
 
 
Stock repurchased, shares
 
 
 
1,200,000 
5,000,000 
5,000,000 
2,100,000 
Stock repurchased, value
 
 
 
 
80 
338 
338 
 
134 
Comprehensive Income (Details) (USD $)
In Millions
3 Months Ended
Mar. 31,
9 Months Ended
Mar. 31,
2011
2010
2011
2010
Comprehensive Income
 
 
 
 
Net earnings
$ 151 
$ 165 
$ 388 
$ 432 
Foreign currency translation
10 
50 
27 
Net derivative adjustments
(1)
10 
Pension and postretirement benefit adjustments
Total comprehensive income
$ 162 
$ 175 
$ 452 
$ 472 
Income Taxes (Details)
In Millions
9 Months Ended
Mar. 31,
3 Months Ended
Mar. 31, 2011
3 Months Ended
Dec. 31, 2010
3 Months Ended
Mar. 31, 2010
2011
2010
Jun. 30, 2010
Income Taxes
 
 
 
 
 
 
Effective tax rate, continuing operations
0.355 
 
0.316 
0.618 
0.332 
 
Goodwill impairment
 
258 
 
258 
 
 
Effective tax rate continuing operations excluding other charges
0.355 
 
 
0.339 
 
 
If realized, the total amount of unrecognized tax benefits that would affect the effective tax rate
69 
 
 
69 
 
57 
Unrecognized tax benefit relating to discontinued operations
12 
 
 
12 
 
 
Accrued interest and penalties related to uncertain tax positions
 
 
 
22 
Interest and penalties of income tax expense
 
(1)
(2)
 
Federal interest and taxes
18 
 
 
 
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit
(4)
 
 
(4)
 
 
Retirement Income and Health Care Benefit Plans (Details)
In Millions
3 Months Ended
Mar. 31,
9 Months Ended
Mar. 31,
3 Months Ended
Mar. 31,
9 Months Ended
Mar. 31,
2011
2010
2011
2010
2011
2010
2011
2010
3 Months Ended
Sep. 30, 2010
Service cost
 
 
 
 
 
Interest cost
22 
23 
 
 
 
 
 
Expected return on plan assets
(9)
(8)
(25)
(23)
 
 
 
 
 
Amortization of unrecognized items
13 
 
 
 
 
 
Total net periodic benefit cost
19 
13 
 
Employer contributions to qualified and nonqualified plans
 
 
 
 
 
 
 
 
15 
Contingencies (Details) (USD $)
In Millions
9 Months Ended
Mar. 31, 2011
Jun. 30, 2010
Contingencies
 
 
Liability for future remediation cost
$ 15 
$ 16 
Percent liable for aggregate remediation and associated costs, other than legal fees
0.243 
 
Remediation period, years
30 
 
Segment Results (Details) (USD $)
In Millions
3 Months Ended
Mar. 31,
9 Months Ended
Mar. 31,
2011
2010
2011
2010
Net sales
$ 1,304 
$ 1,287 
$ 3,749 
$ 3,805 
Earnings (losses) from continuing operations before income taxes
219 
209 
309 
563 
Goodwill impairment
 
 
258 
 
Percentage of net sales to Wal-Mart, Inc. and its affiliates
0.25 
0.27 
0.26 
0.27 
Cleaning [Member]
 
 
 
 
Net sales
407 
397 
1,210 
1,229 
Earnings (losses) from continuing operations before income taxes
89 
94 
274 
283 
Lifestyle [Member]
 
 
 
 
Net sales
227 
226 
646 
638 
Earnings (losses) from continuing operations before income taxes
68 
82 
(66)
226 
Household [Member]
 
 
 
 
Net sales
394 
408 
1,068 
1,123 
Earnings (losses) from continuing operations before income taxes
73 
72 
151 
154 
International [Member]
 
 
 
 
Net sales
276 
256 
825 
815 
Earnings (losses) from continuing operations before income taxes
39 
38 
120 
113 
Corporate [Member]
 
 
 
 
Earnings (losses) from continuing operations before income taxes
$ (50)
$ (77)
$ (170)
$ (213)
Guarantees (Details) (USD $)
In Millions
Mar. 31, 2011
Maximum indemnification agreement exposure
$ 68 
Letters of credit
17 
Avista Capital Partners [Member]
 
Maximum indemnification agreement exposure
$ 38