| The Clorox Company | 
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SupplementalInformation –VolumeGrowth
| | % Change vs. Prior Year | |
| Reportable Segment | FY11(1) | FY12(1) | Major Drivers of Change |
| | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | YTD | |
| Cleaning(2) | 1% | -6% | 4% | 4% | 1% | -1% | 0% | 7% | 2% | Q3 increase primarily driven by higher shipments in the Away From Home business due to the recent acquisitions of HealthLink and Aplicare, Inc.; as well as higher shipments of Clorox®Disinfecting Wipes. |
| Household | -9% | -1% | -3% | 2% | -2% | 5% | 1% | 2% | 2% | Q3 increase primarily driven by higher shipments due to merchandising for Glad®OdorShield® trash bags and food storage products. |
| Lifestyle(3) | 1% | 3% | 3% | 3% | 3% | 6% | 2% | 4% | 4% | Q3 increase primarily driven by growth behind the new Brita Bottle®and higher shipments of Burt’s Bees®natural personal care products behind the new güd®product line. |
| International | -2% | 3% | 0% | 0% | 0% | 3% | -1% | 1% | 1% | Q3 increase primarily driven by higher shipments in Argentina, Mexico and Peru. |
| Total Company | -2% | -2% | 1% | 2% | 0% | 2% | 0% | 4% | 2% | |
SupplementalInformation –SalesGrowth
| | % Change vs. Prior Year | |
| Reportable Segment | FY11(1) | FY12(1) | Major Drivers of Change |
| | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | YTD | |
| Cleaning(2) | -1% | -6% | 3% | 4% | 0% | -2% | 5% | 10% | 4% | Q3 variance between changes in volume and sales was primarily driven by the benefit of price increases. |
| Household | -7% | -4% | -3% | 1% | -3% | 3% | 4% | 6% | 5% | Q3 variance between changes in volume and sales was primarily driven by the benefit of price increases on Glad®products, partially offset by trade promotion spending and product mix. |
| Lifestyle(3) | 1% | 3% | 0% | 5% | 2% | 6% | 6% | 10% | 7% | Q3 variance between changes in volume and sales was primarily driven by the benefit of price increases on Hidden Valley®salad dressing as well as favorable trade promotion spending. |
| International | -2% | -1% | 8% | 9% | 3% | 9% | 0% | 4% | 4% | Q3 variance between changes in volume and sales was primarily driven by the benefit of price increases, offset by trade promotion spending and unfavorable foreign currency exchange rates. |
| Total Company | -3% | -3% | 1% | 4% | 0% | 3% | 4% | 7% | 5% | |
| (1) | | Volume and sales growth percentage changes for the Cleaning and International reportable segments and Total Company reflect the reclassification of the Auto Care businesses to discontinued operations in Q1 fiscal 2011 for all periods presented. |
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| (2) | | The Cleaning reportable segment includes the recent acquisitions of HealthLink and Aplicare, Inc. |
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| (3) | | Lifestyle includes results of the worldwide Burt’s Bees business. |
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Earnings (Losses) From Continuing Operations Before Interest and Taxes (EBIT), Earnings (Losses) From Continuing Operations Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1)
Reconciliation of earnings (losses) from continuing operations before income taxes to EBIT and EBITDA
Dollars in millions and percentages based on rounded numbers
| FY 2011 | | | FY2012 |
| | | | | | | | | | | | |
| Q1
9/30/10 | | Q2
12/31/10 | | Q3
3/31/2011 | | Q4
6/30/11 | | FY
6/30/11 | | | Q1
9/30/11 | | Q2
12/31/11 | | Q3
3/31/12 |
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| Earnings (losses) from continuing | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| operations before income taxes | $ | 202 | | | $ | (112 | ) | | $ | 219 | | | $ | 254 | | | $ | 563 | | | | $ | 187 | | | $ | 155 | | | $ | 198 |
| Goodwill impairment(2) | | - | | | | 258 | | | | - | | | | - | | | | 258 | | | | | - | | | | - | | | | - |
| Interest income | | (1 | ) | | | (1 | ) | | | - | | | | (1 | ) | | | (3 | ) | | | | (1 | ) | | | (1 | ) | | | - |
| Interest expense | | 32 | | | | 33 | | | | 29 | | | | 29 | | | | 123 | | | | | 29 | | | | 30 | | | | 33 |
| EBIT(3) | | 233 | | | | 178 | | | | 248 | | | | 282 | | | | 941 | | | | | 215 | | | | 184 | | | | 231 |
| EBIT margin(3) | | 18.4% | | | | 15.1% | | | | 19.0% | | | | 19.0% | | | | 18.0% | | | | | 16.5% | | | | 15.1% | | | | 16.5% |
| Depreciation and amortization | | 45 | | | | 43 | | | | 42 | | | | 43 | | | | 173 | | | | | 46 | | | | 43 | | | | 44 |
| EBITDA(4) | $ | 278 | | | $ | 221 | | | $ | 290 | | | $ | 325 | | | $ | 1,114 | | | | $ | 261 | | | $ | 227 | | | $ | 275 |
| EBITDA margin(4) | | 22.0% | | | | 18.7% | | | | 22.2% | | | | 21.9% | | | | 21.3% | | | | | 20.0% | | | | 18.6% | | | | 19.6% |
| Net sales | $ | 1,266 | | | $ | 1,179 | | | $ | 1,304 | | | $ | 1,482 | | | $ | 5,231 | | | | $ | 1,305 | | | $ | 1,221 | | | $ | 1,401 |
| (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. These non-GAAP financial measures may not be the same as similar measures presented by other companies. |
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| | Note: The calculation of EBITDA for compliance with the Company’s debt covenants uses net earnings and includes other items as defined by its revolving credit agreement. |
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| (2) | | The goodwill impairment represents a $258 million noncash charge recognized in Q2 fiscal 2011 to adjust the carrying value of the goodwill related to the acquisition of Burt’s Bees to estimated fair value. |
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| (3) | | EBIT (a non-GAAP measure) represents earnings before income taxes (a GAAP measure), excluding goodwill impairment, interest income and interest expense, as reported above. EBIT margin is a measure of EBIT as a percentage of net sales. |
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| (4) | | EBITDA (a non-GAAP measure) represents earnings before income taxes (a GAAP measure), excluding goodwill impairment, interest income, interest expense, depreciation and amortization, as reported above. EBITDA margin is a measure of EBITDA as a percentage of net sales. |
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Supplemental Information – Balance Sheet
(Unaudited)
As of March 31, 2012
Working Capital Update
| Q3 | | | | |
| FY 2012 | FY 2011 | Change | Days(5) | Days(5) | |
| ($ millions) | ($ millions) | ($ millions) | FY 2012 | FY 2011 | Change |
| Receivables, net | $557 | | $499 | | $58 | | 34 | 32 | 2 days |
| Inventories, net | $454 | | $435 | | $19 | | 50 | 52 | -2 days |
| Accounts payable(1) | $364 | | $360 | | $4 | | 39 | 41 | -2 days |
| Accrued liabilities | $472 | | $452 | | $20 | | | | |
| Total WC(2) | $288 | | $162 | | $126 | | | | |
| Total WC % net sales(3) | 5.1 | % | 3.1 | % | | | | | |
| Average WC(2) | $264 | | $127 | | $137 | | | | |
| Average WC % net sales(4) | 4.7 | % | 2.4 | % | | | | | |
- Receivables increased primarily due to increase in sales.
- Inventories increased primarily due to the recent acquisitions of HealthLink and Aplicare, Inc.
- Accrued liabilities increased due to an increase in incentive compensation accruals.
Supplemental Information – Cash Flow
(Unaudited)
For the quarter ended March 31, 2012
Capital expendituresfor the third quarter were $37 million versus $70 million in the year-ago quarter.
Depreciation and amortizationwas $44 million versus $42 million for the year-ago quarter.
Net cash provided by continuingoperations in the third quarter decreased to $165 million from $217 million in the year-ago quarter. The year-over-year decrease was primarily due to lower tax payments in the year-ago period.
| (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, assets held for sale, 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. |
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| The Clorox Company | 
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SupplementalInformation –GrossMarginDriversThe table belowprovides details on the drivers of the grossmarginchange versus the prior year.
| Gross Margin Change vs. Prior Year (basis points) |
| Driver | FY11 | FY12 |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 |
| Cost Savings | +200 | +180 | +180 | +110 | +170 | +160 | +180 | +160 |
| Price Changes | +80 | +100 | +60 | +70 | +80 | +170 | +240 | +250 |
| Market Movement (commodities) | -180 | -150 | -150 | -170 | -160 | -320 | -240 | -200 |
| Manufacturing & Logistics(1) | +20 | -60 | -70 | -40 | -30 | -220 | -170 | -200 |
| All other(2) | -160 | -250 | -70 | -50 | -140 | -40 | -30 | -190 |
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| Change vs prior year | -40 | -180 | -50 | -80 | -80 | -250 | -20 | -180 |
| Gross Margin (%) | 44.3% | 41.7% | 44.1% | 43.5% | 43.5% | 41.7% | 41.5% | 42.3% |
| (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. Examples of drivers included: volume change, product mix, 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 |
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| U.S. Pricing Actions from CY2008 - CY2012 |
| Brand / Product | | Average Price Change | | Effective Date |
| Home Care | | | | | |
| 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 to +13% | | | August 2008 |
| Green Works®cleaners | | -7 to -21% | | | May 2010 |
| Formula 409® | | +6% | | | August 2011 |
| Clorox Clean-Up®cleaners | | +8% | | | August 2011 |
| Clorox®Toilet Bowl Cleaner | | +5% | | | August 2011 |
| Liquid-Plumr®products | | +5% | | | August 2011 |
| Pine-Sol®cleaners | | +17% | | | April 2012 |
| Laundry | | | | | |
| Clorox®liquid bleach | | +10% | | | August 2008 |
| Green Works®liquid detergent | | approx. -30% | | | May 2010 |
| Clorox®liquid bleach | | +12% | | | August 2011 |
| Clorox 2®stain fighter and color booster | | +5% | | | August 2011 |
| Glad | | | | | |
| Glad®trash bags | | +7% | | | February 2008 |
| GladWare®disposable containers | | +7% | | | February 2008 |
| Glad®trash bags | | +10% | | | October 2008 |
| Glad®trash bags | | -10% | | | December 2008 |
| GladWare®disposable containers | | -7% | | | April 2009 |
| Glad®trash bags | | -7% | | | May 2009 |
| Glad®trash bags | | +5% | | | August 2010 |
| Glad®trash bags | | +10% | | | May 2011 |
| Glad®wraps | | +7% | | | August 2011 |
| Glad®food bags | | +10% | | | November 2011 |
| Litter | | | | | |
| Cat litter | | +7 to +8% | | | August 2008 |
| Cat litter | | -8 to -9% | | | March 2010 |
| Food | | | | | |
| Hidden Valley Ranch®salad dressing | | +7% | | | August 2008 |
| Hidden Valley Ranch®salad dressing | | +7% | | | August 2011 |
| Charcoal | | | | | |
| Charcoal | | +6% | | | January 2008 |
| Charcoal and lighter fluid | | +7 to +16% | | | January 2009 |
| Charcoal and lighter fluid | | +8 to 10% | | | January 2012 |
| Brita | | | | | |
| Brita®pitchers | | +3% | | | August 2011 |
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| Notes: | | | | | |
- Individual SKUs vary within the range.
- This communication reflects pricing actions on primary items.
