The Clorox Company | 
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SupplementalInformation –VolumeGrowth
| % Change vs. Prior Year | |
| Business Segment | FY08 | FY09 | MajorDrivers ofChange |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | |
| North America(1) | 5% | 6% | 4% | 6% | 5% | 4% | -2% | -4% | -3% | -1% | Q4decrease wasprimarily the result of the impact of priceincreases oncleaningproducts andseveral otherbrands and thecompany’s exit from the private-label food bagsbusiness. These results werepartially offset by highershipments of Clorox®disinfecting wipes, Brita® water-filtrationproducts, Green Works®naturalcleaningproducts and Clorox 2® stain fighter and colorbooster. |
| International | 11% | 6% | 4% | 7% | 7% | 5% | 4% | 2% | 1% | 3% | Q4increaseprimarily driven byincreasedshipments ofdisinfectingproducts in LatinAmerica due toincreaseddemand as a result of the H1N1 fluoutbreak. |
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| Total Company | 6% | 6% | 4% | 6% | 6% | 4% | -1% | -3% | -2% | -1% | |
SupplementalInformation –SalesGrowth
| % Change vs. Prior Year | |
| Business Segment | FY08 | FY09 | MajorDrivers ofChange |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | |
| North America(1) | 5% | 6% | 8% | 10% | 8% | 11% | 3% | 0% | 0% | 3% | Q4 salesoutpaced thedecline involumeprimarily due to the benefit of priceincreases,partially offset by the impact ofunfavorableCanadiancurrencyexchange rates. |
| International | 18% | 17% | 14% | 16% | 16% | 14% | 0% | -1% | 1% | 3% | Q4 sales andvolume were about equal. Thenegative impact ofunfavorableforeignexchange rates was offset by the benefit of priceincreases. |
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| Total Company | 7% | 8% | 9% | 11% | 9% | 12% | 3% | 0% | 0% | 3% | |
| (1) | | NorthAmericaincludes U.S. andCanadian results and theworldwide Burt’s Beesbusiness. |
The Clorox Company |
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Earnings Before Interest and Taxes (EBIT), Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), and Debt to EBITDA (Unaudited)(1)
Reconciliation schedule of earnings before income taxes to EBIT, EBITDA, and debt to EBITDA
Dollars in millions and percentages based on rounded numbers
| Three Months Ended | | | Twelve Months Ended |
| 6/30/09 | | 6/30/08 | | 6/30/09 | | 6/30/08 |
| Earnings before income taxes | $ | 261 | | | $ | 240 | | | $ | 811 | | | $ | 693 | |
| Interest income | | (1 | ) | | | (2 | ) | | | (4 | ) | | | (12 | ) |
| Interest expense | | 36 | | | | 43 | | | | 161 | | | | 168 | |
| EBIT(2) | | 296 | | | | 281 | | | | 968 | | | | 849 | |
| EBIT margin(2) | | 19.7 | % | | | 18.8 | % | | | 17.8 | % | | | 16.1 | % |
| Depreciation and amortization | | 48 | | | | 51 | | | | 190 | | | | 205 | |
| EBITDA(3) | $ | 344 | | | $ | 332 | | | $ | 1,158 | | | $ | 1,054 | |
| EBITDA margin(3) | | 22.9 | % | | | 22.2 | % | | | 21.2 | % | | | 20.0 | % |
| Net sales | $ | 1,500 | | | $ | 1,495 | | | $ | 5,450 | | | $ | 5,273 | |
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| | | | | | | | | Trailing Twelve Months Ended |
| | | | | | | | | 6/30/09 | | 6/30/08 |
| Debt to EBITDA(4) | | | | | | | | | | 2.7 | | | | 3.3 | |
| Total debt(5) | | | | | | | | | $ | 3,149 | | | $ | 3,475 | |
| (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, EBITDA margin, and Debt to EBITDA provides additional useful information to investors about current trends in the business. |
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| (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. |
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| (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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| (4) | Debt to EBITDA (a non-GAAP measure) represents total debt for the periods ended June 30, 2009 and June 30, 2008, divided by EBITDA for the twelve months ended June 30, 2009 and June 30, 2008, respectively. |
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| (5) | Total debt represents the sum of notes and loans payable, current maturities of long-term debt, and long-term debt. |
The Clorox Company |
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Supplemental Information – Balance Sheet
(Unaudited)
As of June 30, 2009
Working Capital Update
| Q4 | | | | |
| FY 2009 | FY 2008 | Change | Days(5) | Days(5) | |
| ($ millions) | ($ millions) | ($ millions) | FY 2009 | FY 2008 | Change |
| Receivables, net | $486 | $505 | -$19 | 28 | 29 | -1 day |
| Inventories, net | $366 | $384 | -$18 | 43 | 42 | +1 day |
| Accounts payable(1) | $381 | $418 | -$37 | 42 | 41 | +1 day |
| Accrued liabilities | $472 | $440 | $32 | | | |
| Total WC(2) | $35 | $129 | -$94 | | | |
| Total WC % net sales(3) | 0.6% | 2.2% | | | | |
| Average WC(2) | $86 | $150 | -$64 | | | |
| Average WC % net sales(4) | 1.4% | 2.5% | | | | |
- Receivablesdecreased primarily due to the timing of sales in the quarter and the impact of weaker foreign currencies.
- Inventoriesdecreased primarily as a result of a reduction in inventory values due to lower commodity prices.
- Accounts payabledecreased mainly due to a decline in certain commodity prices.
- Accrued liabilitiesincreased primarily due to an increase in commodity hedging liabilities as a result of the reduction in the market prices of certain commodities.
Supplemental Information – Cash Flow
(Unaudited)
For the quarter and year ended June 30, 2009
Capital expenditures for the fourth quarter were $62 million (full year = $197 million)
Depreciation and amortization for the fourth quarter was $48 million (full year = $190 million)
Cash provided by operations
Net cash provided by operations in the fourth quarter was $315 million, compared with $254 million provided by operations in the year-ago quarter. The year-over-year increase was primarily due to higher net earnings and lower tax payments, partially offset by a voluntary $30 million pension contribution.
| (1) | Days of accounts payable is calculated as follows: average accounts payable / [(cost of products sold + change in inventory) / 90]. |
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| (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. |
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| (3) | Represents working capital at the end of the period divided by annualized net sales(current quarter net sales x 4). |
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| (4) | Represents a two-point average of working capital divided by annualized net sales(current quarter net sales x 4). |
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| (5) | Days calculations based on a two-point average. |
The Clorox Company |
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SupplementalInformation –GrossMarginDrivers
The table belowprovides details on the drivers of grossmarginchange versus the prior year.
| | Change vs. Prior Year (basis points) |
| Driver | FY08 | FY09 |
| | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY |
| Cost savings | +180 bp | +170 bp | +150 bp | +180 bp | +170 bp | +200 bp | +210 bp | +240 bp | +230 bp | +220 bp |
| Pricing changes | +50 bp | +40 bp | +80 bp | +150 bp | +80 bp | +230 bp | +350 bp | +310 bp | +250 bp | +280 bp |
| Market movement (commodities) | -120 bp | -170 bp | -350 bp | -370 bp | -270 bp | -460 bp | -450 bp | 0 bp | +160 bp | -170 bp |
| Manufacturing & logistics(1) | -140 bp | -70 bp | -120 bp | -170 bp | -110 bp | -250 bp | -120 bp | -90 bp | -150 bp | -160 bp |
| All other(2) | 0 bp | -130 bp | -110 bp | 0 bp | -60 bp | +80 bp | -30 bp | +90 bp | -120 bp | +10 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 | +550 bp | +370 bp | +180 bp |
| (1) | “Manufacturing & logistics” includes the change in the cost of diesel fuel. |
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| (2) | “All other” includes all other drivers of gross margin change, which are usually insignificant in nature. Examples of drivers included: volume change, trade and consumer spending, restructuring and acquisition-related costs, foreign currency translation and transaction impacts, etc. If a driver included in all other is deemed to be significant in a given period, it will be disclosed as part of the company’s earnings release. |
The Clorox Company |
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Economic Profit (Unaudited)(1)
Reconciliation schedule of earnings from continuing operations before income taxes to economic profit (EP)
Dollars in millions and all calculations on a rounded basis
| FY09 | | FY08 | | FY07 |
| Earnings from continuing operations before income taxes | $ | 811 | | | $ | 693 | | | $ | 743 |
| Non-cash restructuring-related and asset impairment costs(2) | | 10 | | | | 48 | | | | 4 |
| Interest expense(3) | | 161 | | | | 168 | | | | 113 |
| Earnings from continuing operations before income taxes, non-cash restructuring-related and asset | | | | | | | | | | |
| impairment costs, and interest expense | $ | 982 | | | $ | 909 | | | $ | 860 |
| Adjusted after tax profit(4) | $ | 650 | | | $ | 604 | | | $ | 574 |
| Average capital employed(5) | $ | 3,045 | | | $ | 2,680 | | | $ | 2,165 |
| Capital charge(6) | | 274 | | | | 241 | | | | 195 |
| Economic profit(7)(Adjusted after tax profit less capital charge) | $ | 376 | | | $ | 363 | | | $ | 379 |
| % increase over prior year | | +3.6 | % | | | -4.2 | % | | | |
| (1) | In accordance with SEC's Regulation G, this schedule provides the definition of a non-GAAP measure and the reconciliation to the most closely related GAAP measure.
Management believes the presentation of economic profit (EP) provides additional information to investors about current trends in the business. EP is used by management to evaluate business performance and was taken into account in determining management’s incentive compensation and the Company’s contribution to employee profit sharing plans in fiscal year 2009. EP represents profit generated over and above the cost of paying for assets used by the business to generate that profit. |
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| (2) | Non-cash restructuring-related and asset impairment costs are added back to earnings and adjusted capital employed to more closely reflect cash earnings and the total capital investment used to generate those earnings. |
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| (3) | Interest expense is added back to earnings because it is included as a component of the capital charge. |
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| (4) | Adjusted after tax profit represents earnings from continuing operations before income taxes, non-cash restructuring-related and asset impairment costs, and interest expense, after tax. The tax rate applied is the effective tax rate on continuing operations which was 33.8%, 33.6%, and 33.2% in fiscal years 2009, 2008, and 2007, respectively. |
The Clorox Company |
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| (5) | Total capital employed represents total assets less non-interest bearing liabilities. Adjusted capital employed represents total capital employed adjusted to add back current year non-cash restructuring-related and asset impairment costs. Average capital employed represents a two-point average of adjusted capital employed for the current year and total capital employed for the prior year, based on year-end balances. See below for details of the average capital employed calculation: |
| FY09 | | FY08 | | FY07 | | FY06 |
| Total assets | $ | 4,576 | | $ | 4,712 | | $ | 3,581 | | $ | 3,521 |
| Less: | | | | | | | | | | | |
| Accounts payable | | 381 | | | 418 | | | 329 | | | 329 |
| Accrued liabilities | | 472 | | | 440 | | | 507 | | | 474 |
| Income taxes payable | | 86 | | | 52 | | | 17 | | | 19 |
| Other liabilities | | 640 | | | 632 | | | 516 | | | 547 |
| Deferred income taxes | | 23 | | | 65 | | | 5 | | | 34 |
| Non-interest bearing liabilities | | 1,602 | | | 1,607 | | | 1,374 | | | 1,403 |
| Total capital employed | | 2,974 | | | 3,105 | | | 2,207 | | $ | 2,118 |
| Non-cash restructuring-related and asset impairment costs | | 10 | | | 48 | | | 4 | | | |
| Adjusted capital employed | $ | 2,984 | | $ | 3,153 | | $ | 2,211 | | | |
| Average capital employed | $ | 3,045 | | $ | 2,680 | | $ | 2,165 | | | |
| (6) | Capital charge represents average capital employed multiplied by the weighted-average cost of capital. Weighted-average cost of capital is the blended average of the cost of the Company’s debt and equity capital. The weighted-average cost of capital used to calculate capital charge was 9% for fiscal years 2009, 2008, and 2007. |
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| (7) | EP represents earnings from continuing operations before income taxes, non-cash restructuring-related and asset impairment costs, and interest expense, after tax, less a capital charge (as defined above). |
The Clorox Company
Updated: 8-3-09 | |
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U.S. Pricing Actions 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 (rescinded May 2009) | 7% | February 2008 |
| GladWare®disposable containers (rescinded April 2009) | 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 |
The Clorox Company
Updated: 8-3-09 | |
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U.S. Pricing Actions from CY2005 - CY2009 (continued)
| Brand / Product | Average Increase | Effective Date |
| 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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Return on Invested Capital (Unaudited)(1)
Reconciliation of earnings from continuing operations before income taxes to return on invested capital (ROIC)
Dollars in millions and all calculations on a rounded basis
| FY09 | | FY08 | | FY07 | | FY06 | | FY05 |
| Earnings from continuing operations before income taxes | $ | 811 | | | $ | 693 | | | $ | 743 | | | $ | 653 | | | $ | 729 | |
| Restructuring and asset impairment costs(2) | | 20 | | | | 36 | | | | 13 | | | | 1 | | | | 36 | |
| Interest expense(3) | | 161 | | | | 168 | | | | 113 | | | | 127 | | | | 79 | |
| Earnings from continuing operations before income taxes, | | | | | | | | | | | | | | | | | | | |
| restructuring and asset impairment costs, and interest expense | $ | 992 | | | $ | 897 | | | $ | 869 | | | $ | 781 | | | $ | 844 | |
| Adjusted after tax profit(4) | $ | 657 | | | $ | 596 | | | $ | 580 | | | $ | 530 | | | $ | 596 | |
| Adjusted average invested capital(5) | $ | 3,019 | | | $ | 2,805 | | | $ | 2,189 | | | $ | 2,095 | | | $ | 2,204 | |
| Return on invested capital(6) | | 21.8 | % | | | 21.2 | % | | | 26.5 | % | | | 25.3 | % | | | 27.0 | % |
| (1) | In accordance with SEC's Regulation G, this schedule provides the definition of a non-GAAP measure and the reconciliation to the most closely related GAAP measure. Management believes the presentation of return on invested capital (ROIC) provides additional information to investors about current trends in the business. ROIC is a measure of how effectively the company allocates capital. Beginning with fiscal year 2008, the company adopted a simplified ROIC calculation (see definition below). |
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| (2) | Restructuring and asset impairment costs are added back to earnings and average invested capital to more closely reflect operating results. |
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| (3) | Interest expense is added back to earnings because it is factored in debt, a component of average invested capital (as defined below). |
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| (4) | Adjusted after tax profit represents earnings from continuing operations before income taxes, restructuring and asset impairment costs, and interest expense; after tax. The tax rate applied is the effective tax rate on continuing operations, which was 33.8%, 33.6%, 33.2%, 32.1%, and 29.4% in fiscal years 2009, 2008, 2007, 2006, and 2005, respectively. |
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| (5) | Average invested capital represents a five quarter average of debt and equity. Adjusted average invested capital represents average invested capital adjusted to add back a five quarter average of cumulative, current-year after-tax restructuring and asset impairment costs. See below for details of the adjusted average invested capital calculation: |
| (amounts shown below are five quarter averages) | FY09 | | FY08 | | FY07 | | FY06 | | FY05 |
| Debt | $ | 3,338 | | | $ | 3,161 | | | $ | 2,181 | | $ | 2,533 | | | $ | 1,820 |
| Equity | | (324 | ) | | | (372 | ) | | | 4 | | | (439 | ) | | | 366 |
| Average invested capital | | 3,014 | | | | 2,789 | | | | 2,185 | | | 2,094 | | | | 2,186 |
| Cumulative after-tax restructuring and asset impairment costs | | 5 | | | | 16 | | | | 4 | | | 1 | | | | 18 |
| Adjusted average invested capital | $ | 3,019 | | | $ | 2,805 | | | $ | 2,189 | | $ | 2,095 | | | $ | 2,204 |
| (6) | ROIC is calculated as earnings from continuing operations before income taxes, excluding restructuring and asset impairment costs and interest expense, computed on an after-tax basis as a percentage of adjusted average invested capital (as defined above). |
