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| The Clorox Company | |
SupplementalUnauditedCondensedInformation –Volume Growth
Reportable
Segments | % Change vs. Prior Year | |
| FY15 | FY16 | MajorDrivers ofChange |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | |
| Cleaning | -1% | 3% | 1% | 7% | 2% | 5% | Q1increase driven by highershipments across anumber ofbrands in Home Careincluding double-digit growth of Clorox®disinfecting wipes, and in theProfessionalProductsbusinesses’cleaning and health carebrands,partially offset by lowershipments of Clorox® liquid bleach due to theFebruary 2015 priceincrease. |
| Household | 4% | 3% | 0% | 2% | 2% | 1% | Q1increase driven by highershipments in theCharcoalbusiness due to strongmerchandisingrelated to the U.S. Labor Dayholiday, and Bags and Wraps fromconsumerstrading up topremium trash bags,including new Glad®OdorShield®with Gain scent,partially offset by lowershipments of Cat Litter due tocompetitiveactivity. |
| Lifestyle | 0% | 5% | 2% | 0% | 1% | 8% | Q1increase was across all threebusinesses drivenprimarily by highershipments of bottledHidden Valley® saladdressings,including newflavored ranch items, Brita® pourthroughsystems and filters, as well as Burt’s Bees®faceproducts and the earlier timing ofholiday gift packshipments. |
| International | 5% | 5% | 1% | 2% | 3% | 0% | Q1 was flat driven by higher shipments in Mexico and Canada, offset by lower shipments in certain other Latin American countries. |
| Total Company | 1% | 4% | 1% | 3% | 2% | 3% | |
SupplementalUnauditedCondensedInformation –Sales Growth
Reportable
Segments | % Change vs. Prior Year | |
| FY15 | FY16 | MajorDrivers ofChange |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | |
| Cleaning | -2% | 3% | 1% | 9% | 3% | 6% | Q1variancebetweenvolume and sales driven by the benefit of theFebruary 2015 priceincrease on Clorox® liquid bleachpartially offset by higher tradepromotionspending. |
| Household | 5% | 5% | 5% | 4% | 5% | 5% | Q1variancebetweenvolume and sales driven byfavorable mix inCharcoal, as well as Bags andWraps, whichincludedconsumerstrading up topremium trash bags behindproductinnovation, and the benefit of theNovember 2014 priceincrease in Bags andWraps. |
| Lifestyle | -1% | 4% | 3% | 0% | 1% | 7% | Q1variancebetweenvolume and sales driven by higher tradepromotionspending. |
| International | 0% | -2% | 0% | 0% | -1% | -8% | Q1 variance between volume and sales driven by unfavorable foreign currency exchange rates, partially offset by the benefit of price increases. |
| Total Company | 1% | 3% | 3% | 4% | 3% | 3% | |
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| The Clorox Company | |
SupplementalUnauditedCondensedInformation –GrossMarginDrivers
The table belowprovides details on the drivers of grossmarginchange versus the prior year.
| Gross Margin Change vs. Prior Year (basis points) |
| Driver | FY15 | FY16 |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 |
| Cost Savings | +120 | +130 | +170 | +160 | +140 | +140 |
| Price Changes | +90 | +100 | +140 | +110 | +110 | +110 |
| Market Movement (commodities) | -40 | -90 | - | +100 | - | +100 |
| Manufacturing & Logistics | -170 | -90 | -120 | -80 | -110 | -120 |
| All other | -70 | -40 | -80 | -20 | -50 | -10 |
| Change vs prior year | -70 | +10 | +110 | +270 | +90 | +220 |
| Gross Margin (%) | 42.8% | 42.5% | 43.2% | 45.6% | 43.6% | 45.0% |
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| The Clorox Company | |
Supplemental Information – Balance Sheet
(Unaudited)
As of September 30, 2015
Working Capital Update
Dollars in Millions and percentages based on rounded numbers
| Q1 | | Q1 | |
| FY 2016 | FY 2015 | Change | Days(5) | Days(5) | |
| | | | FY 2016 | FY 2015 | Change |
| Receivables, net | $472 | $455 | $17 | 32 | 33 | -1 |
| Inventories | $408 | $397 | $11 | 47 | 46 | 1 |
| Accounts payable(1) | $419 | $385 | $34 | 49 | 47 | 2 |
| Accrued liabilities | $464 | $478 | -$14 | | | |
| Total WC(2) | $107 | $91 | $16 | | | |
| Total WC % net sales(3) | 1.9% | 1.7% | | | | |
| Average WC(2) | $72 | $119 | -$47 | | | |
| Average WC % net sales(4) | 1.3% | 2.2% | | | | |
| (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. |
Supplemental Information – Cash Flow
(Unaudited)
For the quarter ended September 30, 2015
Capital expenditures for the first quarter were $28 million versus $29 million in the year-ago quarter.
Depreciation and amortization for the first quarter was $41 million versus $43 million in the year ago quarter.
Net cash provided by continuing operations in the first quarter was $135 million, or 10 percent of sales.
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| The Clorox Company | |
Supplemental Unaudited Condensed Information
Q1 Fiscal Year 2016 Free Cash Flow Reconciliation
Dollars in Millions and percentages based on rounded numbers
| | Q1 | | Q1 |
| | Fiscal | | Fiscal |
| | Year | | Year |
| | | 2016 | | 2015 |
| Net cash provided by continuing operations – GAAP | | $135 | | $234 |
| Less: Capital expenditures | | $28 | | $29 |
| Free cash flow – non-GAAP(1) | | $107 | | $205 |
| Free cash flow as a percent of sales – non-GAAP(1) | | 7.7% | | 15.2% |
| Net sales | | $1,390 | | $1,352 |
| (1) | In accordance with the 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 uses free cash flow and free cash flow as a percent of sales to help assess the cash generation ability of the business and funds available for investing activities, such as acquisitions, investing in the business to drive growth, and financing activities, including debt payments, dividend payments and share repurchases. Free cash flow does not represent cash available only for discretionary expenditures, since the Company has mandatory debt service requirements and other contractual and non-discretionary expenditures. In addition, free cash flow may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. |
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| The Clorox Company | |
Supplemental unaudited reconciliation of earnings from continuing operations before income taxes to EBIT(1)(3)and EBITDA(2)(3)
Dollars in millions and percentages based on rounded numbers
| | FY 2015 | | | FY 2016 |
| | | | | | |
| | Q1 | | Q2 | | Q3 | | Q4 | | FY | | | Q1 |
| | 9/30/14 | | 12/31/14 | | 3/31/15 | | 6/30/15 | | 6/30/15 | | | 9/30/15 |
Earnings from continuing operations
before income taxes | | $218 | | $197 | | $217 | | $289 | | $921 | | | $264 |
| Interest income | | -$1 | | -$1 | | -$1 | | -$1 | | -$4 | | | -$1 |
| Interest expense | | $26 | | $26 | | $25 | | $23 | | $100 | | | $23 |
| EBIT(1)(3) | | $243 | | $222 | | $241 | | $311 | | $1,017 | | | $286 |
| EBIT margin(1)(3) | | 18.0% | | 16.5% | | 17.2% | | 20.0% | | 18.0% | | | 20.6% |
| Depreciation and amortization | | $43 | | $42 | | $41 | | $43 | | $169 | | | $41 |
| EBITDA(2)(3) | | $286 | | $264 | | $282 | | $354 | | $1,186 | | | $327 |
| EBITDA margin(2)(3) | | 21.2% | | 19.6% | | 20.1% | | 22.7% | | 21.0% | | | 23.5% |
| Net sales | | $1,352 | | $1,345 | | $1,401 | | $1,557 | | $5,655 | | | $1,390 |
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| Total debt(4) | | $2,224 | | $2,672 | | $2,166 | | $2,191 | | $2,191 | | | $2,227 |
| Debt to EBITDA(3)(5) | | 1.9 | | 2.3 | | 1.9 | | 1.8 | | 1.8 | | | 1.8 |
| (1) | EBIT (a non-GAAP measure) represents earnings from continuing operations before income taxes (a GAAP measure), excluding interest income and interest expense, as reported above. EBIT margin is the ratio of EBIT to net sales. |
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| (2) | EBITDA (a non-GAAP measure) represents earnings from continuing operations before income taxes (a GAAP measure), excluding interest income, interest expense, depreciation and amortization, as reported above. EBITDA margin is the ratio of EBITDA to net sales. |
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| (3) | In accordance with the 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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| (4) | Total debt represents the sum of notes and loans payable, current maturities of long-term debt, and long-term debt. |
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| (5) | Debt to EBITDA (a non-GAAP measure) represents total debt divided by EBITDA for the trailing four quarters. |
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The Clorox Company
Updated: 11-02-15 | |
U.S. Retail Pricing Actions from CY2010 - CY2015
| Brand / Product | | Average Price Change | | Effective Date |
| Home Care | | | | |
| 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 |
| Clorox Clean-Up®, Formula 409®, | | | | |
| and Clorox®Disinfecting Bathroom | | | | |
| spray cleaners | | +5% | | March 2013 |
| Green Works®cleaners | | +21% | | July 2014 |
| Laundry | | | | |
| Green Works®liquid detergent | | approx. -30% | | May 2010 |
| Clorox®liquid bleach | | +12% | | August 2011 |
| Clorox 2®stain fighter and color | | | | |
| booster | | +5% | | August 2011 |
| Clorox®liquid bleach | | +7% | | February 2015 |
| Glad | | | | |
| Glad®trash bags | | +5% | | August 2010 |
| Glad®trash bags | | +10% | | May 2011 |
| Glad®wraps | | +7% | | August 2011 |
| Glad®food bags | | +10% | | November 2011 |
| GladWare®disposable containers | | +8% | | July 2012 |
| Glad®trash bags | | +6% | | March 2014 |
| Glad®ClingWrap | | +5% | | March 2014 |
| Glad®trash bags | | +6% | | November 2014 |
| Glad®wraps | | +5% | | January 2015 |
| Litter | | | | |
| Cat litter | | -8 to -9% | | March 2010 |
| Cat litter | | +5% | | May 2012 |
| Food | | | | |
| Hidden Valley Ranch®salad | | | | |
| dressing | | +7% | | August 2011 |
| Charcoal | | | | |
| Charcoal and lighter fluid | | +8 to 10% | | January 2012 |
| Charcoal | | +6% | | December 2012 |
| Brita | | | | |
| Brita®pitchers | | +3% | | August 2011 |
| Brita®pitchers and filters | | +5% | | July 2012 |
| Natural Personal Care | | | | |
| Burt’s Bees®lip balm | | +10% | | July 2013 |
Notes:
| ● | Individual SKUs vary within the range. |
| ● | This communication reflects pricing actions on primary items, and does not reflect pricing actions on our Professional Products business. |
