| The Clorox Company |  |
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Earnings Before Interest and Taxes (EBIT) and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1)
Reconciliation schedule of earnings before income taxes to EBIT and EBITDA
Dollars in millions and percentages based on rounded numbers
| | | Three Months Ended | | Six Months Ended |
| | | 12/31/08 | | 12/31/07 | | 12/31/08 | | 12/31/07 |
| Earnings before income taxes | | $131 | | | $128 | | | $317 | | | $302 | |
| Interest income | | (1 | ) | | (4 | ) | | (3 | ) | | (7 | ) |
| Interest expense | | 44 | | | 46 | | | 86 | | | 79 | |
| EBIT(2) | | 174 | | | 170 | | | 400 | | | 374 | |
| EBIT margin(2) | | 14.3 | % | | 14.3 | % | | 15.4 | % | | 15.4 | % |
| Depreciation and amortization | | 46 | | | 50 | | | 93 | | | 98 | |
| EBITDA(3) | | $220 | | | $220 | | | $493 | | | $472 | |
| EBITDA margin(3) | | 18.1 | % | | 18.5 | % | | 19.0 | % | | 19.5 | % |
| Net sales | | $1,216 | | | $1,186 | | | $2,600 | | | $2,425 | |
| (1) | | In accordance with SEC's Regulation G, this schedule provides the definition of certain non-GAAP measures and the reconciliation to the most closely related GAAP measure. |
| | | Management believes the presentation of EBIT, EBIT margin, EBITDA and EBITDA margin provides additional useful information to investors about current trends in the business. |
| (2) | | EBIT (a non-GAAP measure) represents earnings before income taxes (a GAAP measure), excluding interest income and expense, as reported above. EBIT margin is a measure of EBIT as a percentage of net sales. |
| (3) | | EBITDA (a non-GAAP measure) represents earnings before income taxes (a GAAP measure), excluding interest income, interest expense, depreciation and amortization, as reported above. EBITDA margin is a measure of EBITDA as a percentage of net sales. |
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| The Clorox Company | |
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Supplemental Information – Balance Sheet
(Unaudited)
As of December 31, 2008
Working Capital Update
| | Q2 | | | | |
| | FY 2009 | FY 2008 | Change | Days(5) | Days(5) | |
| | ($ millions) | ($ millions) | ($ millions) | FY 2009 | FY 2008 | Change |
| Receivables, net | $409 | $397 | $12 | | 32 | 31 | 1 days |
| Inventories, net | $405 | $421 | -$16 | | 51 | 48 | 3 days |
| Accounts payable(1) | $330 | $312 | $18 | | 46 | 36 | 10 days |
| Accrued liabilities | $430 | $389 | $41 | | | | |
| Total WC(2) | $152 | $144 | $8 | | | | |
| Total WC % net sales(3) | 3.1% | 3.0% | | | | |
| Average WC(2) | $150 | $109 | $41 | | | | |
| Average WC % net sales(4) | 3.1% | 2.3% | | | | |
- Receivables increased primarily as a result of the acquisition of Burt’s Bees and higher December sales.
- Inventories decreased primarily as a result of a reduction in Glad inventory due to lower resin prices.
- Accounts payable increased mainly due to the timing of payments.
- Accrued liabilitiesincreased primarily due to an increase in derivative liabilities as a result of the reduction in the market value of certain commodities.
Supplemental Information – Cash Flow
(Unaudited)
For the quarter ended December 31, 2008
Capital expenditures for the second quarter were $45 million
Depreciation and amortization for the second quarter was $46 million
Cash provided by operations
Net cash provided by operations in the second quarter was $98 million, compared with $148 million in the year-ago quarter. The decrease was primarily due to the timing of tax and interest payments.
| (1) | | Days of accounts payable is calculated as follows: average accounts payable / [(cost of products sold + change in inventory) / 90]. |
| (2) | | Working capital (WC) is defined in this context as current assets minus current liabilities excluding cash and short-term debt, based on end of period balances. Average working capital represents a two-point average of working capital. |
| (3) | | Represents working capital at the end of the period divided by annualized net sales(current quarter net sales x 4). |
| (4) | | Represents a two-point average of working capital divided by annualized net sales(current quarter net sales x 4). |
| (5) | | Days calculations based on a two-point average. |
| The Clorox Company | |
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SupplementalInformation–GrossMarginDrivers
The table belowprovidesdetails on the drivers of grossmarginchangeversus the prior year.
| Driver | Change vs. Prior Year (basis points) |
| FY08 | FY09 |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 |
| Cost savings | +180 | bp | +170 | bp | +150 | bp | +180 | bp | +170 | bp | +200 | bp | +210 | bp |
| Pricing changes | +50 | bp | +40 | bp | +80 | bp | +150 | bp | +80 | bp | +230 | bp | +350 | bp |
| Market movement (commodities) | -120 | bp | -170 | bp | -350 | bp | -370 | bp | -270 | bp | -460 | bp | -450 | bp |
| Manufacturing & logistics(1) | -140 | bp | -70 | bp | -120 | bp | -170 | bp | -110 | bp | -250 | bp | -120 | bp |
| All other(2) | 0 | bp | -130 | bp | -110 | bp | 0 | bp | -60 | bp | +80 | bp | -30 | bp |
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| Gross margin change vs prior year | -30 | bp | -160 | bp | -350 | bp | -210 | bp | -190 | bp | -200 | bp | -40 | bp |
| (1) | | “Manufacturing & logistics” includes the change in the cost of diesel fuel. |
| (2) | | “All other” includes all other drivers of gross margin change, which are usually of an immaterial nature. Examples of drivers included: volume change, trade and consumer spending, restructuring and acquisition-related costs, foreign currency, etc. If a driver included in all other is deemed to be material in a given period, it will be disclosed as part of the company’s earnings release. |
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The Clorox Company
Updated: 2-4-09 |  |
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U.S. Price Increases from CY2005 - CY2009
| Brand / Product | Average Increase | | Effective Date |
| Home Care | | | | | |
| Clorox Clean-Up®cleaners | 5 | % | | | July 2005 |
| Clorox Clean-Up®and Tilex®cleaners | 8 | % | | | January 2006 |
| Pine-Sol®cleaners | 13 | % | | | May 2008 |
| Clorox Clean-Up®cleaners | 8 | % | | | August 2008 |
| Formula 409®, Tilex®, and Clorox®Disinfecting Bathroom cleaners | 12 | % | | | August 2008 |
| Liquid-Plumr®products | 9 | % | | | August 2008 |
| Clorox®Toilet Bowl Cleaner and Clorox®ToiletWandTMproducts | 8 – 13 | % | | | August 2008 |
| Laundry | | | | | |
| Clorox 2®bleach for colors | 5 | % | | | July 2005 |
| Clorox®liquid bleach | 9 | % | | | July 2005 |
| Clorox®liquid bleach | 8 | % | | | January 2006 |
| Clorox®liquid bleach | 10 | % | | | August 2008 |
| Glad | | | | | |
| Glad®trash bags | 13 | % | | | February 2005 |
| GladWare®disposable containers | 12 | % | | | February 2005 |
| Glad®food bags | 7 | % | | | August 2005 |
| GladWare®disposable containers | 9 | % | | | January 2006 |
| Glad®trash bags | 15 | % | | | February 2006 |
| Glad®trash bags and GladWare®disposable containers | 7 | % | | | February 2008 |
| Glad®trash bags (rescinded December 2008) | 10 | % | | | October 2008 |
| Litter | | | | | |
| Cat litter | 5 | % | | | October 2005 |
| Cat litter | 6 | % | | | June 2006 |
| Cat litter | 7 – 8 | % | | | August 2008 |
| Food | | | | | |
| Hidden Valley Ranch®salad dressing | 6 | % | | | October 2007 |
| Hidden Valley Ranch®salad dressing | 7 | % | | | August 2008 |
| Charcoal | | | | | |
| Match Light®charcoal | 6 | % | | | January 2006 |
| Kingsford®lighter fluid | 10 | % | | | January 2006 |
| Charcoal and lighter fluid | 4 – 8 | % | | | January 2007 |
| Charcoal | 6 | % | | | January 2008 |
| Charcoal and lighter fluid | 7 – 16 | % | | | January 2009 |
| Brita | | | | | |
| Brita®pour-through filters | 7 | % | | | January 2006 |
| Brita®pitchers | 5 | % | | | January 2006 |
| Auto | | | | | |
| Armor All®and STP®auto-care products | 9 | % | | | January 2006 |
| STP®functional fuel products | 17 | % | | | October 2006 |
| Armor All®and STP®auto-care products | 5 – 7 | % | | | January 2008 |
| Armor All®and STP®auto-care products | 5 – 10 | % | | | January 2009 |
Notes:
- Average % increase reflects brand averages rounded to the whole percent. Individual SKUs vary versus the average.
- This communication reflects pricing actions on primary items.
The Clorox Company
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| Supplemental Information –Volume Growth |
| | % Change vs. Prior Year | |
| Business Segment | FY08 | FY09 | MajorDriversofChange |
| | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | YTD | |
| North America (1) | 5 | % | 6 | % | 4 | % | 6 | % | 5 | % | 4 | % | -2 | % | 1 | % | Q2 decrease primarily driven by retailer inventory reductions, exiting the private-label food bags business, lower shipments of Glad® trash bags, Pine-Sol® cleaner and Clorox® liquid bleach due to the impact of price increases, and lower shipments of auto care products due to category softness. These were partially offset by acquisition of Burt’s Bees®, increased consumption of food products and new products, including Green Works™. |
| International | 11 | % | 6 | % | 4 | % | 7 | % | 7 | % | 5 | % | 4 | % | 4 | % | Q2 increase primarily driven by category growth in Latin America. |
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| Total Company | 6 | % | 6 | % | 4 | % | 6 | % | 6 | % | 4 | % | -1 | % | 2 | % | |
SupplementalInformation–SalesGrowth
| | % Change vs. Prior Year | |
| Business Segment | FY08 | FY09 | MajorDriversofChange |
| | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | YTD | |
| North America (1) | 5 | % | 6 | % | 8 | % | 10 | % | 8 | % | 11 | % | 3 | % | 7 | % | Q2 growth primarily driven by the acquisition of Burt’s Bees® and the benefit of price increases, offset by unfavorable currency. |
| International | 18 | % | 17 | % | 14 | % | 16 | % | 16 | % | 14 | % | 0 | % | 7 | % | Flat Q2 sales are a result of higher shipments and the benefit of price increases, offset by unfavorable currency. |
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| Total Company | 7 | % | 8 | % | 9 | % | 11 | % | 9 | % | 12 | % | 3 | % | 7 | % | |
(1) North America includes U.S. and Canadian results and the worldwide Burt’s Bees business.
