SupplementalUnauditedCondensedInformation –Volume Growth
Reportable
Segments | % Change vs. Prior Year | |
| FY15 | FY16 | MajorDrivers ofChange |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | FYTD | |
| Cleaning | -1% | 3% | 1% | 7% | 2% | 5% | 2% | 5% | 4% | Q3increase driven by highershipments in Home Careincluding double-digit growth ofClorox®disinfecting wipes as well asClorox® Clean Up®sprays, andProfessionalProducts fromincreasedshipments incleaning andhealthcareproducts;partially offset by lowershipments inLaundry,reflectingdecreases in Clorox 2® due tocontinuedcategorysoftness andClorox® bleach due to theFebruary 2015 priceincrease. |
| Household | 4% | 3% | 0% | 2% | 2% | 1% | 0% | 3% | 1% | Q3increase driven by highershipments inCharcoalbusiness behindfavorableweather,increasedmerchandisingsupport anddistribution gains, and Bags and Wrapsincludingcontinuedstrength ofpremium trash bags;partially offset by lowershipments of Cat Litter due tocontinuedcompetitiveactivity. |
| Lifestyle | 0% | 5% | 2% | 0% | 1% | 8% | 2% | 4% | 5% | Q3increase driven by highershipments ofNaturalPersonal Care behindinnovation in Burt’s Bees® lip color and face careproducts, as well ascontinued growth in lip careproducts; and highershipments of pourthrough and faucet mount water-filtrationproducts. |
| International | 5% | 5% | 1% | 2% | 3% | 0% | 0% | 4% | 1% | Q3increase drivenprimarily by highershipments inEurope,Mexico, andCanada,partially offset by lowershipments in certain other LatinAmericancountries. |
| Total Company | 1% | 4% | 1% | 3% | 2% | 3% | 1% | 4% | 3% | |
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| Supplemental Unaudited Condensed Information –Sales Growth |
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Reportable
Segments | % Change vs. Prior Year | |
| FY15 | FY16 | MajorDrivers ofChange |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | FYTD | |
| Cleaning | -2% | 3% | 1% | 9% | 3% | 6% | 2% | 5% | 4% | Q3variancebetweenvolume and sales was flat. |
| Household | 5% | 5% | 5% | 4% | 5% | 5% | 1% | 4% | 3% | Q3variancebetweenvolume and sales driven by the benefit of mix,partially offset by higher tradepromotionspending in Bags and Wraps and Cat Litter. |
| Lifestyle | -1% | 4% | 3% | 0% | 1% | 7% | 2% | 5% | 4% | Q3variancebetweenvolume and sales was mainly driven by thebenefits of mix. |
| International | 0% | -2% | 0% | 0% | -1% | -8% | -7% | -9% | -8% | Q3variancebetweenvolume and sales driven byunfavorableforeigncurrencyexchange rates,partially offset by the benefit of priceincreases. |
| Total Company | 1% | 3% | 3% | 4% | 3% | 3% | 0% | 2% | 2% | |
| The Clorox Company |  |
SupplementalUnauditedCondensedInformation –Gross Margin Drivers
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 | Q2 | Q3 |
| Cost Savings | +120 | +130 | +170 | +160 | +140 | +140 | +130 | +120 |
| Price Changes | +90 | +100 | +140 | +110 | +110 | +110 | +110 | +100 |
| Market Movement (commodities) | -40 | -90 | - | +100 | - | +100 | +180 | +180 |
| Manufacturing & Logistics | -170 | -90 | -120 | -80 | -110 | -120 | -150 | -150 |
| All other | -70 | -40 | -80 | -20 | -50 | -10 | -60 | -40 |
| Change vs prior year | -70 | +10 | +110 | +270 | +90 | +220 | +210 | +210 |
| Gross Margin (%) | 42.8% | 42.5% | 43.2% | 45.6% | 43.6% | 45.0% | 44.6% | 45.3% |
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| The Clorox Company | |
Supplemental Information – Balance Sheet
(Unaudited)
As of March 31, 2016
Working Capital Update
Dollars in Millions and percentages based on rounded numbers
| Q3 | | Q3 | |
| FY 2016 | FY 2015 | Change | Days(5) | Days(5) | Change |
| | | | FY 2016 | FY 2015 | |
| Receivables, net | $530 | $528 | $2 | 32 | 32 | 0 |
| Inventories | $460 | $440 | $20 | 53 | 50 | 3 |
| Accounts payable(1) | $436 | $397 | $39 | 46 | 44 | 2 |
| Accrued liabilities | $519 | $533 | -$14 | | | |
| Total WC(2) | $221 | $187 | $34 | | | |
| Total WC % net sales(3) | 3.9% | 3.3% | | | | |
| Average WC(2) | $232 | $203 | $29 | | | |
| Average WC % net sales(4) | 4.1% | 3.6% | | | | |
| (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 March 31, 2016
Capital expenditures for the third quarter were $45 million versus $23 million in the year-ago quarter.
Depreciation and amortization for the third quarter was $40 million versus $41 million in the year ago quarter.
Net cash provided by continuing operations in the third quarter was $258 million, or 18 percent of sales.
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| The Clorox Company | |
Supplemental Unaudited Condensed Information
Q3 Fiscal Year-To-Date 2016 Free Cash Flow Reconciliation
Dollars in Millions and percentages based on rounded numbers
| Q3 | | Q3 |
| Fiscal | | Fiscal |
| YTD | | YTD |
| 2016 | | 2015 |
| Net cash provided by continuing operations – GAAP | $436 | | $481 |
| Less: Capital expenditures | $113 | | $83 |
| Free cash flow – non-GAAP(1) | $323 | | $398 |
| Free cash flow as a percent of sales – non-GAAP(1) | 7.8% | | 9.7% |
| Net sales | $4,161 | | $4,098 |
| (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 | | Q2 | | Q3 |
| | 9/30/14 | | 12/31/14 | | 3/31/15 | | 6/30/15 | | 6/30/15 | | | 9/30/15 | | 12/31/15 | | 3/31/16 |
| Earnings from continuing operations | | $218 | | $197 | | $217 | | $289 | | $921 | | | $264 | | $230 | | $237 |
| before income taxes | | | | | | | | | | | | | | | | | |
| Interest income | | -$1 | | -$1 | | -$1 | | -$1 | | -$4 | | | -$1 | | -$2 | | -$1 |
| Interest expense | | $26 | | $26 | | $25 | | $23 | | $100 | | | $23 | | $22 | | $22 |
| EBIT(1)(3) | | $243 | | $222 | | $241 | | $311 | | $1,017 | | | $286 | | $250 | | $258 |
| EBIT margin(1)(3) | | 18.0% | | 16.5% | | 17.2% | | 20.0% | | 18.0% | | | 20.6% | | 18.6% | | 18.1% |
| Depreciation and amortization | | $43 | | $42 | | $41 | | $43 | | $169 | | | $41 | | $41 | | $40 |
| EBITDA(2)(3) | | $286 | | $264 | | $282 | | $354 | | $1,186 | | | $327 | | $291 | | $298 |
| EBITDA margin(2)(3) | | 21.2% | | 19.6% | | 20.1% | | 22.7% | | 21.0% | | | 23.5% | | 21.6% | | 20.9% |
| Net sales | | $1,352 | | $1,345 | | $1,401 | | $1,557 | | $5,655 | | | $1,390 | | $1,345 | | $1,426 |
| Total debt(4) | | $2,224 | | $2,672 | | $2,166 | | $2,191 | | $2,191 | | | $2,227 | | $2,296 | | $2,228 |
| Debt to EBITDA(3)(5) | | 1.9 | | 2.3 | | 1.9 | | 1.8 | | 1.8 | | | 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: 05-03-16 | |
U.S. Retail Pricing Actions from CY2010 - CY2016
| 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 |
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| 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. |
