CLOROX CO /DE/, 10-Q filed on 2/7/2011
Quarterly Report
Document and Entity Information
6 Months Ended
Dec. 31, 2010
Document and Entity Information
 
Document Type
10-Q 
Amendment Flag
FALSE 
Document Period End Date
2010-12-31 
Document Fiscal Year Focus
2011 
Document Fiscal Period Focus
Q2 
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
137,610,515 
Condensed Consolidated Statements of Earnings (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
3 Months Ended
Dec. 31,		 6 Months Ended
Dec. 31,
2010
2009
2010
2009
Condensed Consolidated Statements of Earnings
 
 
 
 
Net sales
$ 1,179 
$ 1,215 
$ 2,445 
$ 2,518 
Cost of products sold
687 
686 
1,392 
1,406 
Gross profit
492 
529 
1,053 
1,112 
Selling and administrative expenses
180 
185 
361 
357 
Advertising costs
117 
123 
235 
245 
Research and development costs
28 
29 
57 
55 
Goodwill impairment
258 
 
258 
 
Interest expense
33 
37 
65 
73 
Other (income) expense, net
(12)
18 
(13)
28 
Earnings (losses) from continuing operations before income taxes
(112)
137 
90 
354 
Income taxes on continuing operations
51 
44 
113 
121 
Earnings (loss) from continuing operations
(163)
93 
(23)
233 
Discontinued operations:
 
 
 
 
Earnings from Auto businesses, net of tax
7 
17 
23 
34 
Gain on sale of Auto businesses, net of tax
177 
 
237 
 
Earnings from discontinued operations
184 
17 
260 
34 
Net earnings
21 
110 
237 
267 
Basic
 
 
 
 
Continuing operations
(1.17)
0.66 
(0.17)
1.65 
Discontinued operations
1.32 
0.12 
1.87 
0.24 
Basic net earnings per share
0.15 
0.78 
1.70 
1.89 
Diluted
 
 
 
 
Continuing operations
(1.17)
0.66 
(0.17)
1.64 
Discontinued operations
1.32 
0.11 
1.87 
0.24 
Diluted net earnings per share
0.15 
0.77 
1.70 
1.88 
Weighted average shares outstanding (in thousands)
 
 
 
 
Basic
138,678 
140,303 
139,077 
140,023 
Diluted
138,678 
141,528 
139,077 
141,211 
Dividend declared per share
$ 0.55 
$ 0.50 
$ 1.10 
$ 1 
Condensed Consolidated Balance Sheets (USD $)
In Millions
6 Months Ended
Dec. 31, 2010
Year Ended
Jun. 30, 2010
ASSETS
 
 
Cash and cash equivalents
$ 379 
$ 87 
Receivables, net
440 
540 
Inventories, net
412 
332 
Assets held for sale
 
405 
Other current assets
113 
125 
Total current assets
1,344 
1,489 
Property, plant and equipment, net
973 
966 
Goodwill
1,063 
1,303 
Trademarks, net
551 
550 
Other intangible assets, net
90 
96 
Other assets
137 
144 
Total assets
4,158 
4,548 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
Notes and loans payable
3 
371 
Current maturities of long-term debt
300 
300 
Accounts payable
326 
409 
Accrued liabilities
443 
491 
Income taxes payable
104 
74 
Total current liabilities
1,176 
1,645 
Long-term debt
2,125 
2,124 
Other liabilities
704 
677 
Deferred income taxes
29 
19 
Total liabilities
4,034 
4,465 
Contingencies
 
 
Stockholders' equity
 
 
Common stock: $1.00 par value; 750,000,000 shares authorized; 158,741,461 shares issued at December 31, 2010 and June 30, 2010; and 137,610,515 and 138,764,511 shares outstanding at December 31, 2010 and June 30, 2010, respectively
159 
159 
Additional paid-in capital
610 
617 
Retained earnings
994 
920 
Treasury shares, at cost: 21,130,946 and 19,976,950 shares at December 31, 2010 and June 30, 2010, respectively
(1,321)
(1,242)
Accumulated other comprehensive net losses
(318)
(371)
Stockholders' equity
124 
83 
Total liabilities and stockholders' equity
$ 4,158 
$ 4,548 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2010
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
137,610,515 
138,764,511 
Treasury stock, shares
21,130,946 
19,976,950 
Condensed Consolidated Statements of Cash Flows (USD $)
In Millions
6 Months Ended
Dec. 31,
2010
2009
Operating activities:
 
 
Net earnings
$ 237 
$ 267 
Deduct: Earnings from discontinued operations
260 
34 
Earnings (loss) from continuing operations
(23)
233 
Adjustments to reconcile earnings (loss) from continuing operations:
 
 
Depreciation and amortization
88 
94 
Share-based compensation
14 
25 
Deferred income taxes
7 
5 
Goodwill impairment
258 
 
Other
 
(15)
Changes in:
 
 
Receivables, net
54 
58 
Inventories, net
(68)
(41)
Other current assets
17 
 
Accounts payable and accrued liabilities
(129)
(109)
Income taxes payable
(48)
(39)
Net cash provided by continuing operations
170 
211 
Net cash provided by discontinued operations
55 
35 
Net cash provided by operations
225 
246 
Investing activities:
 
 
Capital expenditures
(89)
(76)
Proceeds from sale of businesses, net of transaction costs
747 
 
Other
25 
1 
Net cash provided by (used for) investing activities
683 
(75)
Financing activities:
 
 
Notes and loans payable, net
(369)
(397)
Long-term debt borrowings
 
297 
Long-term debt repayments
 
(15)
Treasury stock purchased
(134)
 
Cash dividends paid
(154)
(141)
Issuance of common stock for employee stock plans and other
35 
31 
Net cash used for financing activities
(622)
(225)
Effect of exchange rate changes on cash and cash equivalents
6 
2 
Net increase (decrease) in cash and cash equivalents
292 
(52)
Cash and cash equivalents:
 
 
Beginning of period
87 
206 
End of period
$ 379 
$ 154 
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 six months ended December 31, 2010 and 2009, 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 December 31, 2010, 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 will also receive cash flows of approximately $30 related to working capital that was retained by the Company. Included in earnings from discontinued operations for the three and six months ended December 31, 2010 is an after-tax gain on the transaction of $177 and $237, respectively. The final amount of proceeds is subject to closing adjustments related to the portion of the working capital transferred and 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 transitional services are being provided to the buyer for a period of up to eighteen months. 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 its new ownership. The Company's cash inflows and outflows from these services are not expected to be significant during the transition period. Income from these transition services is being reported in other (income) expense in continuing operations with the costs associated with the services 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 on the accompanying condensed consolidated balance sheet at 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   Three Months Ended   Six Months Ended
    9/30/2010       9/30/2009       12/31/2010       12/31/2009       12/31/2010       12/31/2009
Net sales   $        68     $        68     $        27     $        64     $        95     $        132  
Earnings before income taxes     24       27       10       26       34       53  
Income tax expense on earnings     (8 )     (10 )     (3 )     (9 )     (11 )     (19 )
Gain on sale     -       -       326       -       326       -  
Income tax benefit (expense) on sale     60       -       (149 )     -       (89 )     -  
Earnings from discontinued operations   $ 76     $ 17     $ 184     $ 17     $ 260     $ 34  
                                                 
As a result of the Auto Businesses being reported as discontinued operations in the fiscal quarter ended September 30, 2010, the Company reversed $5 in previously existing deferred tax liabilities and established a net $55 deferred tax asset for the excess of tax basis over book basis in the stock investments of the businesses being sold. A tax benefit had not been previously recorded for this temporary difference because the Company had not entered into a definitive agreement to sell the Auto Businesses until the fiscal quarter ended September 30, 2010. Upon the sale of the Auto Businesses in the fiscal quarter ended December 31, 2010, the deferred tax asset established in the fiscal quarter ended September 30, 2010, was realized. In addition, current income taxes were recorded on the gain on sale.
 
The major classes of assets and liabilities of the Auto Businesses reflected as held for sale at June 30, 2010 were as follows:
 
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 $ 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 six months ended December 31, 2010 and 2009, 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 December 31, 2010, 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 six months ended December 31, 2010 and 2009, 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 $2 and $3 for the three and six months ended December 31, 2010, and $0 for the three and six months ended December 31, 2009, 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       12/31/2010       6/30/2010
Assets                    
Foreign exchange contracts   Other current assets   $ -     $ 1  
Interest rate contracts   Other current assets     6       -  
Commodity purchase contracts   Other current assets     8       -  
        $ 14     $ 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 six months ended December 31, 2010, were as follows:
 
    Three months ended 12/31/2010   Six months ended 12/31/2010
Cash flow hedges      
Gain (Loss)
recognized in OCI		       Gain reclassified
from OCI and
recognized in
earnings		       Gain (Loss)
recognized in
OCI		       Gain reclassified from
OCI and recognized in
earnings
Commodity purchase contracts   $ 6     $ 1   $ 11     $ 1
Interest rate contracts     10       -     6       -
Foreign exchange contracts     (2 )     -     (3 )     -
Total   $ 14     $ 1   $ 14     $ 1
             
The gains 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        12/31/2010        6/30/2010
Commodity purchase contracts   Other current assets   $ 2   $ -  
Commodity purchase contracts   Accrued liabilities     -     (1 )
        $ 2   $ (1 )
                   
As of December 31, 2010, the net notional value of commodity derivatives was $62, of which $23 related to diesel fuel, $17 related to jet fuel, $19 related to soybean oil and $3 related to crude oil.
 
As of December 31, 2010, the net notional value of interest rate forward contracts was $150 related to interest payments associated with the anticipated refinancing of the $300 debt maturing in February 2011.
 
As of December 31, 2010, the Company had outstanding foreign currency forward contracts related to its subsidiaries in Canada and Australia of $24 and $12, 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 at December 31, 2010.
 
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 December 31, 2010 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 December 31, 2010, 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 fair valued using market quotations obtained from commodity derivative dealers. The interest rate contracts are fair valued using information quoted by U.S. government bond dealers. The foreign exchange contracts are fair valued using information 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 December 31, 2010 and June 30, 2010, due to the short maturity and nature of those balances. The estimated fair value of long-term debt, included current maturities was $2,605 and $2,635 at December 31, 2010 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:
 
  12/31/2010       6/30/2010
Finished goods $       335     $      272  
Raw materials and packaging   112       94  
Work in process   4       4  
LIFO allowances   (29 )     (28 )
Allowances for obsolescence   (10 )     (10 )
Total $ 412     $ 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 in new international markets in accordance with projections, particularly in the European Union and Asia. Additionally, in 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 concluded to recognize an impairment charge in 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 concluded 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 fiscal 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.
 
The Company expects to finalize its goodwill impairment analysis for the Burt's Bees reporting unit during the fiscal quarter ended March 31, 2011, and there could be adjustments to the goodwill impairment charge when the analysis is finalized. Any potential adjustments to the Company's preliminary estimates as a result of completing this evaluation would be recorded in the Company's condensed consolidated financial statements when finalized.
 
The Company may need to make future changes in its assumptions relating to the value of Burt's Bees, which may result in additional impairment charges if the Company's sales growth and margin expansion expectations are not realized or macroeconomic factors such as economic and category growth rates, commodity prices and foreign currency rates change in unexpected ways. The Company expects that any such impairment charge will not result in future cash expenditures.
 
Changes in the carrying amount of Goodwill, Trademarks and Other intangible assets as of December 31, 2010, 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  
                                 
 
                                             
  Trademarks   Other intangible assets
subject to amortization
 
Subject to
amortization		       Not subject to
amortization		       Total       Technology
and Product
formulae		       Other       Total
Balance June 30, 2010 $            24     $      526   $      550     $            37     $      59     $      96  
Amortization   (1 )     -     (1 )     (2 )     (1 )     (3 )
Translation adjustments and other   2       1     3       2       (2 )     -  
Balance September 30, 2010   25       527     552       37       56       93  
Amortization   (1 )     -     (1 )     (2 )     (1 )     (3 )
Translation adjustments and other   -       -     -       -       -       -  
Balance December 31, 2010 $ 24     $ 527   $ 551     $ 35     $ 55     $ 90  
                                             
Trademarks and Other intangible assets subject to amortization are net of accumulated amortization of $243 and $235 at December 31, 2010 and June 30, 2010, respectively. Estimated amortization expense for these intangible assets is $17, $17, $16, $15 and $11 for fiscal years 2011, 2012, 2013, 2014 and 2015, respectively. The weighted-average amortization period for trademarks and other intangible assets subject to amortization is 22 years and 15 years, respectively.
 
OTHER LIABILITIES
OTHER LIABILITIES
NOTE 6. OTHER LIABILITIES
 
Other liabilities consisted of the following as of:
 
  12/31/2010       6/30/2010
Employee benefit obligations $      304   $      306
Venture agreement net terminal obligation   276     274
Taxes   93     64
Other   31     33
Total $ 704   $ 677
 
NET EARNINGS PER SHARE
NET EARNINGS PER SHARE
NOTE 7. NET EARNINGS PER SHARE
 
The following are reconciliations of net earnings (loss) to net earnings (loss) applicable 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   Six Months Ended
  12/31/2010         12/31/2009       12/31/2010       12/31/2009
Earnings (losses) from continuing operations $ (163 )   $ 93     $ (23 )   $ 233  
Earnings from discontinued operations   184       17       260       34  
Net earnings $      21     $       110     $       237     $       267  
Less: Earnings allocated to participating securities   -       (1 )     (1 )     (2 )
Net earnings applicable to common stock $ 21     $ 109     $ 236     $ 265  
                               
 
  Weighted Average Number of
Shares Outstanding for the
Three Months Ended		   Weighted Average Number of
Shares Outstanding for the Six
Months Ended
  12/31/2010       12/31/2009       12/31/2010       12/31/2009
Basic      138,678        140,303        139,077        140,023
Dilutive effect of stock options and other              
       (excludes participating securities) -   1,225   -   1,188
Diluted 138,678   141,528   139,077   141,211
               
During the three and six months ended December 31, 2010, the Company did not include stock options to purchase 3,456 thousand shares and 3,504 thousand shares, respectively, of the Company's common stock in the calculations of diluted EPS because their inclusion would be anti-dilutive. Since the Company experienced losses from continuing operations for both the three and six month periods ended December 31, 2010, no dilution was applied to the Company's basic weighted average shares outstanding for those periods as to do so would have reduced the Company's reported losses from continuing operations.
 
During the three and six months ended December 31, 2009, the Company did not include stock options to purchase 4,126 thousand and 4,150 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 and six months ended December 31, 2010, the Company repurchased 2,063 and 2,121 thousand shares for an aggregate of $130 and $134, respectively. The Company did not repurchase any shares during the three and six months ended December 31, 2009.
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' equity, net of tax. Comprehensive income was as follows:
 
  Three Months Ended   Six Months Ended
  12/31/2010       12/31/2009       12/31/2010       12/31/2009
Net earnings $      21   $       110     $      237   $      267
Other comprehensive gains (losses), net of tax:                        
       Foreign currency translation   8     (5 )     42     17
       Net derivative adjustments   8     8       6     11
       Pension and postretirement benefit adjustments   3     1       5     2
Total comprehensive income $ 40   $ 114     $ 290   $ 297
 
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 (45.0)% and 125.9% for the three and six months ended December 31, 2010, respectively, and 32.1% and 34.2% for the three and six months ended December 31, 2009, respectively. The substantially different tax rates in the current periods 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 35.6% and 32.9% for the current periods. The lower rate for the three months ended December 31, 2009, was primarily due to lower foreign tax expense. The lower rate for the six months ended December 31, 2010, was primarily due to favorable tax settlements and the statutory phase-in of increased rates for the domestic manufacturing deduction, partially offset by lower foreign tax expense for the six months ended December 31, 2009.
 
Included in the balance of unrecognized tax benefits at December 31, 2010 and June 30, 2010, are potential benefits of $60 and $57, respectively, that if recognized, would affect the effective tax rate on earnings.
 
The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2010 and June 30, 2010, the total balance of accrued interest and penalties related to uncertain tax positions was $13 and $22, respectively. Interest and penalties included in income tax expense were a benefit of $1 and $3 for the three and six months ended December 31, 2010, and expense of $2 and $5 for the three and six months ended December 31, 2009, 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 current period. Various income tax returns in state and foreign jurisdictions are currently in the process of examination.
 
In the twelve months succeeding December 31, 2010, audit resolutions could potentially reduce total unrecognized tax benefits by up to $6, 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   Six Months Ended
  12/31/2010       12/31/2009       12/31/2010       12/31/2009
Components of net periodic benefit cost (income):                              
       Service cost $          4     $          2     $        7     $        5  
       Interest cost   7       7       14       15  
       Expected return on plan assets   (8 )     (7 )     (16 )     (15 )
       Amortization of unrecognized items   4       2       8       4  
Total net periodic benefit cost $ 7     $ 4     $ 13     $ 9  
                               
The net periodic benefit cost for the Company's retirement health care plans was $1 and $2, respectively for each of the three month and six month periods ended December 31, 2010 and 2009, 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 $16 at both December 31, 2010 and June 30, 2010 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 December 31, 2010 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 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   Six Months Ended
  12/31/2010       12/31/2009       12/31/2010       12/31/2009
Cleaning $      354   $      378   $      803   $      832
Household   320     334     674     715
Lifestyle   218     212     419     412
International   287     291     549     559
Total Company $ 1,179   $ 1,215   $ 2,445   $ 2,518
                       
  Earnings (Losses) from Continuing Operations
Before Income Taxes
  Three Months Ended   Six Months Ended
  12/31/2010       12/31/2009       12/31/2010       12/31/2009  
Cleaning $      64     $      70     $      185     $      189  
Household   25       27       78       82  
Lifestyle   (192 )     78       (134 )     144  
International   41       32       81       75  
Corporate   (50 )     (70 )     (120 )     (136 )
Total Company $ (112 )   $ 137     $ 90     $ 354  
                               
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 include a $258 noncash goodwill impairment charge for the Burt's Bees business for the three and six months ended December 31, 2010.
 
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 six months ended December 31, 2010, and 26% and 27% of consolidated net sales for the three and six months ended December 31, 2009, respectively.
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 December 31, 2010, the Company's aggregate maximum exposure from these agreements is $66. 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 six months from November 5, 2010. The Company had not made, nor does it anticipate making, any payments relating to the indemnities.
 
At December 31, 2010, The Company is a party to letters of credit of $18, primarily related to one of its insurance carriers.
 
The Company has not recorded any liabilities on any of the aforementioned guarantees at December 31, 2010.
INTERIM FINANCIAL STATEMENTS (Policy)
Basis of Presentation 
Basis of Presentation
 
The unaudited interim condensed consolidated financial statements for the three and six months ended December 31, 2010 and 2009, 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 December 31, 2010, 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 
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)
Net Sales and Earnings from the Auto Businesses 
    Three Months Ended   Three Months Ended   Six Months Ended
    9/30/2010       9/30/2009       12/31/2010       12/31/2009       12/31/2010       12/31/2009
Net sales   $        68     $        68     $        27     $        64     $        95     $        132  
Earnings before income taxes     24       27       10       26       34       53  
Income tax expense on earnings     (8 )     (10 )     (3 )     (9 )     (11 )     (19 )
Gain on sale     -       -       326       -       326       -  
Income tax benefit (expense) on sale     60       -       (149 )     -       (89 )     -  
Earnings from discontinued operations   $ 76     $ 17     $ 184     $ 17     $ 260     $ 34  
                                                 
Major Classes of Assets and Liabilities of the Auto Businesses Held for Sale 
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 $ 405  
 
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)
Derivative Financial Instruments Designated as Hedging Instruments Recorded at Fair Value 
        Fair value
        Balance Sheet classification       12/31/2010       6/30/2010
Assets                    
Foreign exchange contracts   Other current assets   $ -     $ 1  
Interest rate contracts   Other current assets     6       -  
Commodity purchase contracts   Other current assets     8       -  
        $ 14     $ 1  
                     
Liabilities                    
Foreign exchange contracts   Accrued liabilities   $ (2 )   $ -  
Commodity purchase contracts   Accrued liabilities     -       (2 )
        $      (2 )   $      (2 )
                     
Effects of Derivative Financial Instruments Designated as Hedging Instruments on OCI and on Statement of Earnings 
    Three months ended 12/31/2010   Six months ended 12/31/2010
Cash flow hedges      
Gain (Loss)
recognized in OCI		       Gain reclassified
from OCI and
recognized in
earnings		       Gain (Loss)
recognized in
OCI		       Gain reclassified from
OCI and recognized in
earnings
Commodity purchase contracts   $ 6     $ 1   $ 11     $ 1
Interest rate contracts     10       -     6       -
Foreign exchange contracts     (2 )     -     (3 )     -
Total   $ 14     $ 1   $ 14     $ 1
             
Derivative Financial Instruments Not Designated as Hedging Instruments 
        Fair value
        Balance Sheet classification        12/31/2010        6/30/2010
Commodity purchase contracts   Other current assets   $ 2   $ -  
Commodity purchase contracts   Accrued liabilities     -     (1 )
        $ 2   $ (1 )
                   
INVENTORIES, NET (Tables)
Schedule of Inventories, Net
  12/31/2010       6/30/2010
Finished goods $       335     $      272  
Raw materials and packaging   112       94  
Work in process   4       4  
LIFO allowances   (29 )     (28 )
Allowances for obsolescence   (10 )     (10 )
Total $ 412     $ 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  
                                 
Schedule of Intangible Assets, Excluding Goodwill 
                                             
  Trademarks   Other intangible assets
subject to amortization
 
Subject to
amortization		       Not subject to
amortization		       Total       Technology
and Product
formulae		       Other       Total
Balance June 30, 2010 $            24     $      526   $      550     $            37     $      59     $      96  
Amortization   (1 )     -     (1 )     (2 )     (1 )     (3 )
Translation adjustments and other   2       1     3       2       (2 )     -  
Balance September 30, 2010   25       527     552       37       56       93  
Amortization   (1 )     -     (1 )     (2 )     (1 )     (3 )
Translation adjustments and other   -       -     -       -       -       -  
Balance December 31, 2010 $ 24     $ 527   $ 551     $ 35     $ 55     $ 90  
                                             
OTHER LIABILITIES (Tables)
Other Liabilities
  12/31/2010       6/30/2010
Employee benefit obligations $      304   $      306
Venture agreement net terminal obligation   276     274
Taxes   93     64
Other   31     33
Total $ 704   $ 677
 
NET EARNINGS PER SHARE (Tables)
Reconciliation of Net Earnings to Net Earnings Applicable to Common Stock 
  Three Months Ended   Six Months Ended
  12/31/2010         12/31/2009       12/31/2010       12/31/2009
Earnings (losses) from continuing operations $ (163 )   $ 93     $ (23 )   $ 233  
Earnings from discontinued operations   184       17       260       34  
Net earnings $      21     $       110     $       237     $       267  
Less: Earnings allocated to participating securities   -       (1 )     (1 )     (2 )
Net earnings applicable to common stock $ 21     $ 109     $ 236     $ 265  
                               
Effects of Participating Securities on Weighted-Average Number of Shares Outstanding 
  Weighted Average Number of
Shares Outstanding for the
Three Months Ended		   Weighted Average Number of
Shares Outstanding for the Six
Months Ended
  12/31/2010       12/31/2009       12/31/2010       12/31/2009
Basic      138,678        140,303        139,077        140,023
Dilutive effect of stock options and other              
       (excludes participating securities) -   1,225   -   1,188
Diluted 138,678   141,528   139,077   141,211
               
COMPREHENSIVE INCOME (Tables)
Comprehensive Income
  Three Months Ended   Six Months Ended
  12/31/2010       12/31/2009       12/31/2010       12/31/2009
Net earnings $      21   $       110     $      237   $      267
Other comprehensive gains (losses), net of tax:                        
       Foreign currency translation   8     (5 )     42     17
       Net derivative adjustments   8     8       6     11
       Pension and postretirement benefit adjustments   3     1       5     2
Total comprehensive income $ 40   $ 114     $ 290   $ 297
 
RETIREMENT INCOME AND HEALTH CARE BENEFIT PLANS (Tables)
Components of the Net Cost of Retirement Income and Health Care Plans
  Three Months Ended   Six Months Ended
  12/31/2010       12/31/2009       12/31/2010       12/31/2009
Components of net periodic benefit cost (income):                              
       Service cost $          4     $          2     $        7     $        5  
       Interest cost   7       7       14       15  
       Expected return on plan assets   (8 )     (7 )     (16 )     (15 )
       Amortization of unrecognized items   4       2       8       4  
Total net periodic benefit cost $ 7     $ 4     $ 13     $ 9  
                               
SEGMENT RESULTS (Tables)
Company's Reportable Segments' Net Sales 
  Net Sales
  Three Months Ended   Six Months Ended
  12/31/2010       12/31/2009       12/31/2010       12/31/2009
Cleaning $      354   $      378   $      803   $      832
Household   320     334     674     715
Lifestyle   218     212     419     412
International   287     291     549     559
Total Company $ 1,179   $ 1,215   $ 2,445   $ 2,518
                       
Company's Reportable Segments' Earnings (Losses) Before Income Taxes 
  Earnings (Losses) from Continuing Operations
Before Income Taxes
  Three Months Ended   Six Months Ended
  12/31/2010       12/31/2009       12/31/2010       12/31/2009  
Cleaning $      64     $      70     $      185     $      189  
Household   25       27       78       82  
Lifestyle   (192 )     78       (134 )     144  
International   41       32       81       75  
Corporate   (50 )     (70 )     (120 )     (136 )
Total Company $ (112 )   $ 137     $ 90     $ 354  
                               
DISCONTINUED OPERATIONS (Details)
In Millions
6 Months Ended
Dec. 31,
3 Months Ended
Dec. 31, 2010
3 Months Ended
Sep. 30, 2010
3 Months Ended
Dec. 31, 2009
3 Months Ended
Sep. 30, 2009
2010
2009
Jun. 30, 2010
DISCONTINUED OPERATIONS
 
 
 
 
 
 
 
Gross proceeds from sale of businesses
 
 
 
 
747 
 
 
Cash flows related to working capital
 
 
 
 
30 
 
 
After-tax gain from sale of discontinued operation
177 
 
 
 
237 
 
 
Term of transitions services agreement, months
 
 
 
 
18 
 
 
Net sales
27 
68 
64 
68 
95 
132 
 
Earnings before income taxes
10 
24 
26 
27 
34 
53 
 
Income tax expense on earnings
(3)
(8)
(9)
(10)
(11)
(19)
 
Gain on sale
326 
 
 
 
326 
 
 
Income tax benefit (expense) on sale
(149)
60 
 
 
(89)
 
 
Earnings from discontinued operations
184 
76 
17 
17 
260 
34 
 
Reversal of previous deferred tax liabilities
 
5 
 
 
 
 
 
Deferred tax asset from sale of discontinued operation
 
55 
 
 
 
 
 
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
 
 
 
 
 
 
405 
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Details)
In Millions
3 Months Ended
Dec. 31,		 6 Months Ended
Dec. 31,
2010
2009
2010
2009
Jun. 30, 2010
Current maturities, months
 
 
18 
 
 
Maximum duration for interest rate forward contracts, months
 
 
6 
 
 
Maximum duration for foreign currency contracts, months
 
 
12 
 
 
Derivative financial instruments not designated as hedging instruments
0 
0 
0 
0 
 
Estimated amount of the existing net gain to be reclassified into earnings, in the next 12 months
 
 
7 
 
 
Changes in the value of derivative instruments after dedesignation
2 
0 
3 
0 
 
Derivative asset designated as hedging instrument, fair value
14 
 
14 
 
1 
Derivative liability designated as hedging instrument, fair value
(2)
 
(2)
 
(2)
Gain (loss) recognized in OCI
14 
 
14 
 
 
Gain reclassified from OCI and recognized in earnings
1 
 
1 
 
 
Total derivative asset, fair value
2 
 
2 
 
 
Total derivative liability, fair value
 
 
 
 
(1)
Notional value of commodity derivatives
62 
 
62 
 
 
Notional value of interest rate forward contract
150 
 
150 
 
 
Debt maturing in 2011
300 
 
300 
 
 
Estimated fair value of long-term debt
2,605 
 
2,605 
 
2,635 
Foreign Exchange Contracts
 
 
 
 
 
Gain (loss) recognized in OCI
(2)
 
(3)
 
 
Gain reclassified from OCI and recognized in earnings
 
 
 
 
 
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
 
 
 
 
1 
Interest Rate Contracts
 
 
 
 
 
Gain (loss) recognized in OCI
10 
 
6 
 
 
Gain reclassified from OCI and recognized in earnings
 
 
 
 
 
Interest Rate Contracts | Other Current Assets [Member]
 
 
 
 
 
Derivative asset designated as hedging instrument, fair value
6 
 
 
 
 
Commodity Purchase Contracts
 
 
 
 
 
Gain (loss) recognized in OCI
6 
 
11 
 
 
Gain reclassified from OCI and recognized in earnings
1 
 
1 
 
 
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
8 
 
 
 
 
Derivative asset not designated as hedging instrument, fair value
2 
 
 
 
 
Diesel Fuel Commodity Contract [Member]
 
 
 
 
 
Notional value of commodity derivatives
23 
 
 
 
 
Jet Fuel Commodity Contract [Member]
 
 
 
 
 
Notional value of commodity derivatives
17 
 
 
 
 
Soybean Oil Commodity Contract [Member]
 
 
 
 
 
Notional value of commodity derivatives
19 
 
 
 
 
Crude Oil Commodity Contract [Member]
 
 
 
 
 
Notional value of commodity derivatives
3 
 
 
 
 
Canada Foreign Currency Exchange Contracts [Member]
 
 
 
 
 
Notional value
24 
 
 
 
 
Australia Foreign Currency Exchange Contracts [Member]
 
 
 
 
 
Notional value
12 
 
 
 
 
INVENTORIES, NET (Details) (USD $)
In Millions
Dec. 31, 2010
Jun. 30, 2010
INVENTORIES, NET
 
 
Finished goods
$ 335 
$ 272 
Raw materials and packaging
112 
94 
Work in process
4 
4 
LIFO allowances
(29)
(28)
Allowances for obsolescence
(10)
(10)
Total
$ 412 
$ 332 
GOODWILL, TRADEMARKS AND OTHER INTANGIBLE ASSETS (Details)
In Millions
3 Months Ended
Sep. 30, 2010
6 Months Ended
Dec. 31, 2010
Year Ended
Jun. 30, 2010
Goodwill impairment
 
(258)
 
Translation adjustments and other, goodwill
14 
4 
 
Balance, goodwill
1,317 
1,063 
1,303 
Balance, trademarks
552 
551 
550 
Amortization, trademarks
(1)
(1)
 
Translation adjustments and other, trademarks
3 
 
 
Balance, intangible assets
93 
90 
96 
Amortization, intangible assets
(3)
(3)
 
Other intangible assets subject to amortization, net of accumulated amortization
 
243 
235 
Future amortization expense 2011
 
17 
 
Future amortization expense 2012
 
17 
 
Future amortization expense 2013
 
16 
 
Future amortization expense 2014
 
15 
 
Future amortization expense 2015
 
11 
 
Cleaning [Member]
 
 
 
Balance, goodwill
275 
 
275 
Lifestyle [Member]
 
 
 
Goodwill impairment
 
(258)
 
Balance, goodwill
623 
365 
623 
Household [Member]
 
 
 
Balance, goodwill
85 
 
85 
International [Member]
 
 
 
Translation adjustments and other, goodwill
14 
4 
 
Balance, goodwill
334 
338 
320 
Trademarks [Member]
 
 
 
Weighted-average amortization period, years
 
22 
 
Intangible Assets [Member]
 
 
 
Weighted-average amortization period, years
 
15 
 
Subject To Amortization [Member]
 
 
 
Balance, trademarks
25 
24 
24 
Amortization, trademarks
(1)
(1)
 
Translation adjustments and other, trademarks
2 
 
 
Not Subject To Amortization [Member]
 
 
 
Balance, trademarks
527 
 
526 
Translation adjustments and other, trademarks
1 
 
 
Technology And Product Formulae [Member]
 
 
 
Balance, intangible assets
37 
35 
37 
Amortization, intangible assets
(2)
(2)
 
Translation adjustments and other, intangible assets
2 
 
 
Other Amortization [Member]
 
 
 
Balance, intangible assets
56 
55 
59 
Amortization, intangible assets
(1)
(1)
 
Translation adjustments and other, intangible assets
(2)
 
 
OTHER LIABILITIES (Details) (USD $)
In Millions
Dec. 31, 2010
Jun. 30, 2010
OTHER LIABILITIES
 
 
Employee benefit obligations
$ 304 
$ 306 
Venture agreement net terminal obligation
276 
274 
Taxes
93 
64 
Other
31 
33 
Total
$ 704 
$ 677 
NET EARNINGS PER SHARE (Details) (USD $)
In Millions, except Share data in Thousands
3 Months Ended
Dec. 31,		 6 Months Ended
Dec. 31,
2010
2009
2010
2009
NET EARNINGS PER SHARE
 
 
 
 
Earnings (losses) from continuing operations
$ (163)
$ 93 
$ (23)
$ 233 
Earnings from discontinued operations
184 
17 
260 
34 
Net earnings
21 
110 
237 
267 
Less: Earnings allocated to participating securities
 
(1)
(1)
(2)
Net earnings applicable to common stock
21 
109 
236 
265 
Basic
138,678 
140,303 
139,077 
140,023 
Dilutive effect of stock options and other (excludes participating securities)
 
1,225 
 
1,188 
Diluted
138,678 
141,528 
139,077 
141,211 
Stock options
3,456 
4,126 
3,504 
4,150 
Stock repurchased, shares
2,063 
0 
2,121 
0 
Stock repurchased, value
130 
 
134 
 
COMPREHENSIVE INCOME (Details) (USD $)
In Millions
3 Months Ended
Dec. 31,		 6 Months Ended
Dec. 31,
2010
2009
2010
2009
COMPREHENSIVE INCOME
 
 
 
 
Net earnings
$ 21 
$ 110 
$ 237 
$ 267 
Foreign currency translation
8 
(5)
42 
17 
Net derivative adjustments
8 
8 
6 
11 
Pension and postretirement benefit adjustments
3 
1 
5 
2 
Total comprehensive income
$ 40 
$ 114 
$ 290 
$ 297 
INCOME TAXES (Details)
In Millions
3 Months Ended
Dec. 31,		 6 Months Ended
Dec. 31,
2010
2009
2010
2009
Jun. 30, 2010
INCOME TAXES
 
 
 
 
 
Effective tax rate, continuing operations
(0.45)
0.321 
1.259 
0.342 
 
Goodwill impairment
258 
 
258 
 
 
Effective tax rate, continuing operations, excluding goodwill impairment charges
0.356 
 
0.329 
 
 
If realized, the total amount of unrecognized tax benefits that would affect the effective tax rate
60 
 
60 
 
57 
Accrued interest and penalties related to uncertain tax positions
13 
 
13 
 
22 
Interest and penalties of income tax expense
(1)
2 
(3)
5 
 
Federal interest and taxes
18 
 
18 
 
 
Potential reduction in unrecognized tax benefits
6 
 
6 
 
 
RETIREMENT INCOME AND HEALTH CARE BENEFIT PLANS (Details)
In Millions
3 Months Ended
Dec. 31,		 6 Months Ended
Dec. 31,		 3 Months Ended
Dec. 31,		 6 Months Ended
Dec. 31,
2010
2009
2010
2009
2010
2009
2010
2009
3 Months Ended
Sep. 30, 2010
Service cost
4 
2 
7 
5 
 
 
 
 
 
Interest cost
7 
7 
14 
15 
 
 
 
 
 
Expected return on plan assets
(8)
(7)
(16)
(15)
 
 
 
 
 
Amortization of unrecognized items
4 
2 
8 
4 
 
 
 
 
 
Total net periodic benefit cost
7 
4 
13 
9 
1 
1 
2 
2 
 
Employer contributions to qualified plans
 
 
 
 
 
 
 
 
15 
CONTINGENCIES (Details) (USD $)
In Millions
Dec. 31, 2010
Jun. 30, 2010
CONTINGENCIES
 
 
Liability for future remediation cost
$ 16 
$ 16 
Percent liable for aggregate remediation and associated costs, other than legal fees
0.243 
0.243 
Remediation period, years
30 
 
SEGMENT RESULTS (Details) (USD $)
In Millions
3 Months Ended
Dec. 31,		 6 Months Ended
Dec. 31,
2010
2009
2010
2009
Net sales
$ 1,179 
$ 1,215 
$ 2,445 
$ 2,518 
Earnings (losses) from continuing operations before income taxes
(112)
137 
90 
354 
Goodwill impairment
258 
 
258 
 
Percentage of net sales to Wal-Mart, Inc. and its affiliates
0.25 
0.26 
0.26 
0.27 
Cleaning [Member]
 
 
 
 
Net sales
354 
378 
803 
832 
Earnings (losses) from continuing operations before income taxes
64 
70 
185 
189 
Household [Member]
 
 
 
 
Net sales
320 
334 
674 
715 
Earnings (losses) from continuing operations before income taxes
25 
27 
78 
82 
Lifestyle [Member]
 
 
 
 
Net sales
218 
212 
419 
412 
Earnings (losses) from continuing operations before income taxes
(192)
78 
(134)
144 
International [Member]
 
 
 
 
Net sales
287 
291 
549 
559 
Earnings (losses) from continuing operations before income taxes
41 
32 
81 
75 
Corporate [Member]
 
 
 
 
Earnings (losses) from continuing operations before income taxes
$ (50)
$ (70)
$ (120)
$ (136)
GUARANTEES (Details) (USD $)
In Millions
Dec. 31, 2010
Indemnification agreements, aggregate maximum exposure
$ 66 
Letters of credit
18 
Avista Capital Partners [Member]
 
Indemnification agreements, aggregate maximum exposure
$ 38