þ
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Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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for the fiscal year ended June 30, 2018
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OR
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¨
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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for the transition period from__________to__________.
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Commission file number: 1-07151
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Delaware
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31-0595760
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification Number)
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1221 Broadway, Oakland, California 94612-1888
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(Address of principal executive offices) (ZIP code)
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(510) 271-7000
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(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common Stock–$1.00 par value
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
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None
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(Title of class)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Emerging Growth Company
¨
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•
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Cleaning
consists of laundry, home care and professional products marketed and sold in the United States. Products within this segment include laundry additives, including bleach products under the Clorox
®
brand and Clorox 2
®
stain fighter and color booster; home care products, primarily under the Clorox
®
, Formula 409
®
, Liquid-Plumr
®
, Pine-Sol
®
, S.O.S
®
and Tilex
®
brands; naturally derived products under the Green Works
®
brand; and professional cleaning, disinfecting, and Food service products under the Clorox
®
, Dispatch
®
, HealthLink
®
, Clorox Healthcare
®
, Hidden Valley
®
, KC Masterpiece
®
, and Soy Vay
®
brands.
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•
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Household
consists of charcoal, bags, wraps and containers, cat litter, and digestive health products marketed and sold in the United States. Products within this segment include charcoal products under the Kingsford
®
and Match Light
®
brands; bags, wraps and containers under the Glad
®
brand; cat litter products under the Fresh Step
®
, Scoop Away
®
and Ever Clean
®
brands; and digestive health products under the RenewLife
®
brand.
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•
|
Lifestyle
consists of food products, water-filtration systems and filters, natural personal care products and dietary supplements primarily marketed and sold in the United States. Products within this segment include dressings and sauces, primarily under the Hidden Valley
®
, KC Masterpiece
®
,
Kingsford
®
and Soy Vay
®
brands; water-filtration systems and filters under the Brita
®
brand; natural personal care products under the Burt’s Bees
®
brand; and dietary supplements under the Rainbow Light
®
, Natural Vitality
®
and Neocell
®
brands.
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•
|
International
consists of products sold outside the United States. Products within this segment include laundry, home care, water-filtration systems and filters, digestive health products, charcoal, cat litter products, food products, bags, wraps and containers, natural personal care products and professional cleaning and disinfecting products primarily under the Clorox
®
, Glad
®
, PinoLuz
®
, Ayudin
®
, Limpido
®
, Clorinda
®
, Poett
®
, Mistolin
®
, Lestoil
®
, Bon Bril
®
, Brita
®
, Green Works
®
,
Pine-Sol
®
, Agua Jane
®
, Chux
®
, RenewLife
®
, Kingsford
®
, Fresh Step
®
, Scoop Away
®
, Ever Clean
®
, KC Masterpiece
®
, Hidden Valley
®
, Burt’s Bees
®
and Clorox Healthcare
®
brands.
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(Dollars in millions)
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Fiscal
Year
|
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Cleaning
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Household
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Lifestyle
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International
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Corporate
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Total
Company
|
||||||||||||
Net Sales
|
2018
|
|
$
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2,060
|
|
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$
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1,959
|
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$
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1,077
|
|
|
$
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1,028
|
|
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$
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—
|
|
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$
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6,124
|
|
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2017
|
|
2,002
|
|
|
1,961
|
|
|
1,000
|
|
|
1,010
|
|
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—
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|
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5,973
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||||||
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2016
|
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1,912
|
|
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1,862
|
|
|
990
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|
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997
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|
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—
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|
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5,761
|
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||||||
Earnings (losses) from
continuing operations before
Income taxes
|
2018
|
|
574
|
|
|
370
|
|
|
243
|
|
|
84
|
|
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(217
|
)
|
|
1,054
|
|
||||||
2017
|
|
523
|
|
|
419
|
|
|
244
|
|
|
81
|
|
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(234
|
)
|
|
1,033
|
|
|||||||
2016
|
|
511
|
|
|
428
|
|
|
251
|
|
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66
|
|
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(273
|
)
|
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983
|
|
|||||||
Total assets
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2018
|
|
902
|
|
|
1,223
|
|
|
1,533
|
|
|
1,045
|
|
|
357
|
|
|
5,060
|
|
||||||
|
2017
|
|
881
|
|
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1,103
|
|
|
902
|
|
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1,060
|
|
|
627
|
|
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4,573
|
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2018
|
|
2017
|
|
2016
|
|||
Home Care products
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26
|
%
|
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25
|
%
|
|
24
|
%
|
Bags, wraps and containers
|
18
|
%
|
|
18
|
%
|
|
19
|
%
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Laundry additives
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15
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%
|
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15
|
%
|
|
16
|
%
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Charcoal products
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10
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%
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11
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%
|
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11
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%
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Food products
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10
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%
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10
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%
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10
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%
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•
|
successfully integrate acquired companies, products, systems or personnel into the Company’s existing business operations in an effective, timely and cost efficient manner;
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•
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maintain uniform standards, controls, procedures and policies throughout acquired companies, including effective integration of acquired companies into the Company's internal controls over financial reporting;
|
•
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minimize any potential interruption to the ongoing business of the Company or the acquired company;
|
•
|
successfully enter categories and markets in which the Company may have limited or no prior experience;
|
•
|
achieve expected synergies and obtain the desired financial or strategic benefits from acquisitions;
|
•
|
achieve distribution expansion related to products, categories and markets from acquisitions; and
|
•
|
retain key relationships with employees, customers, partners and suppliers of acquired companies.
|
•
|
economic or political instability;
|
•
|
price controls and related government actions;
|
•
|
foreign currency fluctuations, including devaluations, currency controls and inflation, which may adversely affect the Company’s ability to do business in certain markets and reduce the U.S. dollar value of revenues, profits or cash flows it generates in non-U.S. markets;
|
•
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continued high levels of inflation in Argentina;
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•
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difficulty in obtaining non-local currency (e.g., U.S. dollars) to pay for the raw materials needed to manufacture the Company’s products and contract-manufactured products;
|
•
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restrictions on or costs related to the repatriation of foreign profits to the U.S.;
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•
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the imposition of tariffs, trade restrictions, price, profit or other government controls, labor laws, travel or immigration restrictions, import and export laws or other government actions generating a negative impact on the Company’s business, including changes in trade policies that may be implemented and the impact of geopolitical events generally;
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•
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difficulties in hiring and retaining qualified employees;
|
•
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civil unrest, work stoppages and labor disputes;
|
•
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employment litigation related to employees, contractors and suppliers, particularly in Argentina;
|
•
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difficulties in obtaining or unavailability of raw materials;
|
•
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potential loss of distribution channels as a result of retailer consolidation;
|
•
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increased credit risk of customers, suppliers and distributors;
|
•
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potential harm to third parties, the Company’s employees and/or surrounding communities, and related liabilities and damages to the Company’s reputation, from the use, storage and transportation of chlorine in certain international markets where chlorine is used in the production of bleach, whether such actions are undertaken by the Company or by the Company’s business partners;
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•
|
difficulties in enforcing intellectual property and contractual rights;
|
•
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lack of well-established or reliable, and impartial legal systems in certain countries where the Company operates;
|
•
|
challenges relating to enforcement of or compliance with local laws and regulations and with U.S. laws affecting operations outside of the U.S., including without limitation, the Foreign Corrupt Practices Act;
|
•
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the possibility of nationalization, expropriation of assets or other similar government actions;
|
•
|
risks related to natural disasters, terrorism and other events beyond the Company’s control; and
|
•
|
risks related to the Company’s discontinued operations in Venezuela.
|
•
|
require the Company to dedicate a substantial portion of its cash flow from operations to payments on its indebtedness, which would reduce the availability of its cash flow to fund working capital requirements, capital expenditures, future acquisitions, dividends, repurchase the Company's common stock and for other general corporate purposes;
|
•
|
limit the Company’s flexibility in planning for or reacting to general adverse economic conditions or changes in its business and the industries in which it operates;
|
•
|
place the Company at a competitive disadvantage compared to its competitors that have less debt; and
|
•
|
limit, along with the financial and other restrictive covenants in the Company’s debt documents, its ability to borrow additional funds.
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Name
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Age
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Year First
Elected
Executive
Officer
|
Title
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Benno Dorer
|
54
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2009
|
Chairman and Chief Executive Officer
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Laura Stein
|
56
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2005
|
Executive Vice President – General Counsel and Corporate Affairs
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Dawn Willoughby
|
49
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2013
|
Executive Vice President – Chief Operating Officer
|
Jon Balousek
|
49
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2013
|
Executive Vice President – Specialty and Corporate Development
|
Linda Rendle
|
40
|
2016
|
Executive Vice President – Cleaning and Strategy
|
William S. Bailey
|
52
|
2016
|
Senior Vice President – Corporate Business Development
|
Diego J. Barral
|
48
|
2018
|
Senior Vice President – General Manager, International Division
|
Michael R. Costello
|
52
|
2011
|
Senior Vice President – General Manager, Nutranext and RenewLife
|
Denise Garner
|
55
|
2015
|
Senior Vice President – Chief Innovation Officer
|
Kevin B. Jacobsen
|
52
|
2018
|
Senior Vice President – Chief Financial Officer
|
Matthew Laszlo
|
48
|
2015
|
Senior Vice President – Chief Customer Officer
|
Kirsten Marriner
|
45
|
2016
|
Senior Vice President – Chief People Officer
|
John J. McNulty
|
62
|
2018
|
Senior Vice President – Chief Information Officer
|
Andrew J. Mowery
|
52
|
2018
|
Senior Vice President – Chief Product Supply Officer
|
Eric Reynolds
|
48
|
2015
|
Senior Vice President – Chief Marketing Officer
|
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[a]
|
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[b]
|
|
[c]
|
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[d]
|
||||
Period
|
Total Number of
Shares (or Units)
Purchased
(1)
|
|
Average Price Paid
per Share (or Unit) (2)
|
|
Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
Maximum Number (or
Approximate Dollar
Value) that May Yet
Be Purchased Under the
Plans or Programs
|
||||
April 1 to 30, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$750 million
|
May 1 to 31, 2018
|
850,000
|
|
|
120.06
|
|
|
850,000
|
|
|
$1,996 million
|
|
June 1 to 30, 2018
|
845,000
|
|
|
126.59
|
|
|
845,000
|
|
|
$1,905 million
|
|
|
1,695,000
|
|
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$
|
123.32
|
|
|
1,695,000
|
|
|
|
(1)
|
Of the shares purchased in May 2018, 815,457 shares were acquired pursuant to the Company’s Evergreen Program and 34,543 shares were acquired pursuant to the Company’s 2018 Open-Market Program. Of the shares purchased in June 2018, 714,179 shares were acquired pursuant to the 2018 Open-Market Program and 130,821 shares were acquired pursuant to the Evergreen Program.
|
(2)
|
Average price paid per share in the period includes commission.
|
(a)
|
Financial Statements and Schedules:
|
(b)
|
Exhibits:
|
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|
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|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
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Form
|
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File No.
|
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Exhibit
|
|
Filing Date
|
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|
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8-K
|
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001-07151
|
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3.2
|
|
September 15, 2016
|
||
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8-K
|
|
001-07151
|
|
3.1
|
|
July 19, 2011
|
||
|
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8-K
|
|
001-07151
|
|
4.1
|
|
December 3, 2004
|
||
|
|
S-3ASR
|
|
333-200722
|
|
4.1
|
|
December 4, 2014
|
||
|
|
S-3ASR
|
|
333-200722
|
|
4.2
|
|
December 4, 2014
|
||
|
|
S-3ASR
|
|
333-200722
|
|
4.3
|
|
December 4, 2014
|
||
|
|
S-3ASR
|
|
333-200722
|
|
4.4
|
|
December 4, 2014
|
||
|
|
S-3ASR
|
|
333-200722
|
|
4.5
|
|
December 4, 2014
|
||
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8-K
|
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001-07151
|
|
4.1
|
|
December 9, 2014
|
||
|
|
8-K
|
|
001-07151
|
|
4.1
|
|
September 28, 2017
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
|
8-K
|
|
001-07151
|
|
4.1
|
|
May 9, 2018
|
||
|
|
10-Q
|
|
001-07151
|
|
10.55
|
|
May 2, 2008
|
||
|
|
10-K
|
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001-07151
|
|
10(x)
|
|
August 27, 2004
|
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|
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10-K
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001-07151
|
|
10.3
|
|
August 16, 2016
|
||
|
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10-K
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001-07151
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10.8
|
|
August 25, 2014
|
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|
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10-Q
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001-07151
|
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10.1
|
|
February 5, 2013
|
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|
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10-Q
|
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001-07151
|
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10.1
|
|
November 2, 2015
|
||
|
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10-Q
|
|
001-07151
|
|
10.1
|
|
November 2, 2016
|
||
|
|
10-Q
|
|
001-07151
|
|
10.2
|
|
November 1, 2017
|
||
|
|
10-Q
|
|
001-07151
|
|
10.1
|
|
November 1, 2017
|
||
|
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10-Q
|
|
001-07151
|
|
10.3
|
|
November 1, 2017
|
||
|
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10-K
|
|
001-07151
|
|
10.18
|
|
August 19, 2008
|
||
|
|
10-K
|
|
001-07151
|
|
10.18
|
|
August 26, 2011
|
||
|
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10-K
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|
001-07151
|
|
10.13
|
|
August 16, 2016
|
||
|
|
10-Q
|
|
001-07151
|
|
10.17
|
|
November 3, 2009
|
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10-Q
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001-07151
|
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10.21
|
|
November 3, 2011
|
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10-Q
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001-07151
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10.2
|
|
November 2, 2012
|
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|
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10-Q
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001-07151
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10.1
|
|
May 2, 2018
|
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|
|
10-Q
|
|
001-07151
|
|
10.58
|
|
May 2, 2008
|
||
|
|
10-Q
|
|
001-07151
|
|
10.27
|
|
May 4, 2010
|
||
|
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10-Q
|
|
001-07151
|
|
10.1
|
|
February 5, 2015
|
||
|
|
10-Q
|
|
001-07151
|
|
10.2
|
|
February 5, 2015
|
||
|
|
10-Q
|
|
001-07151
|
|
10.27
|
|
May 4, 2011
|
||
|
|
10-K
|
|
001-07151
|
|
10.22
|
|
August 16, 2016
|
||
|
|
10-K
|
|
001-07151
|
|
10.29
|
|
August 26, 2011
|
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|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
|
10-K
|
|
001-07151
|
|
10.24
|
|
August 16, 2016
|
||
|
|
|
|
|
|
|
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|
||
|
|
8-K
|
|
001-07151
|
|
10.1
|
|
February 10, 2017
|
||
|
|
10-K/A
|
|
001-07151
|
|
10.26
|
|
September 30, 2016
|
||
|
|
10-Q
|
|
001-07151
|
|
10.2
|
|
February 2, 2018
|
||
|
|
10-Q
|
|
001-07151
|
|
10.1
|
|
February 2, 2018
|
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101
|
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The following materials from The Clorox Company’s Annual Report on Form 10-K for the year ended June 30, 2018 are formatted in extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Earnings, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements.
|
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|
(*)
|
Indicates a management or director contract or compensatory plan or arrangement required to be filed as an exhibit to this report.
|
|
THE CLOROX COMPANY
|
|
|
||
Date: August 14, 2018
|
By:
|
/s/ Benno Dorer
|
|
|
Benno Dorer
|
|
|
Chairman and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
/s/ A. Banse
|
|
Director
|
|
August 14, 2018
|
A. Banse
|
|
|
|
|
/s/ R. H. Carmona
|
|
Director
|
|
August 14, 2018
|
R. H. Carmona
|
|
|
|
|
/s/ S. C. Fleischer
|
|
Director
|
|
August 14, 2018
|
S. C. Fleischer
|
|
|
|
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/s/ E. Lee
|
|
Director
|
|
August 14, 2018
|
E. Lee
|
|
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|
|
/s/ A. D. D. Mackay
|
|
Director
|
|
August 14, 2018
|
A. D. D. Mackay
|
|
|
|
|
/s/ R. W. Matschullat
|
|
Director
|
|
August 14, 2018
|
R. W. Matschullat
|
|
|
|
|
/s/ J. Noddle
|
|
Director
|
|
August 14, 2018
|
J. Noddle
|
|
|
|
|
/s/ M. J. Shattock
|
|
Director
|
|
August 14, 2018
|
M. J. Shattock
|
|
|
|
|
/s/ P. Thomas-Graham
|
|
Director
|
|
August 14, 2018
|
P. Thomas-Graham
|
|
|
|
|
/s/ C. M. Ticknor
|
|
Director
|
|
August 14, 2018
|
C. M. Ticknor
|
|
|
|
|
/s/ R. J. Weiner
|
|
Director
|
|
August 14, 2018
|
R. J. Weiner
|
|
|
|
|
/s/ C. J. Williams
|
|
Director
|
|
August 14, 2018
|
C. J. Williams
|
|
|
|
|
/s/ B. Dorer
|
|
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
August 14, 2018
|
B. Dorer
|
|
|
|
|
/s/ K. B. Jacobsen
|
|
Senior Vice President – Chief Financial Officer
(Principal Financial Officer)
|
|
August 14, 2018
|
K. B. Jacobsen
|
|
|
|
|
/s/ J. R. Baker
|
|
Vice President – Chief Accounting Officer and Corporate Controller (Principal Accounting Officer)
|
|
August 14, 2018
|
J. R. Baker
|
|
|
|
(i)
|
any merger or consolidation of this corporation or any Subsidiary (as hereinafter defined) into or with
|
(a)
|
any Interested Stockholder (as hereinafter defined); or
|
(b)
|
any other corporation (whether or not it is an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or
|
(ii)
|
any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of this corporation or any Subsidiary having an aggregate Fair Market Value (as hereinafter defined) of more than ten percent (10%) of the Fair Market Value of the consolidated total assets of this corporation; or
|
(iii)
|
the issuance or transfer by this corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of this corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property having an aggregate Fair Market Value of more than ten percent (10%) of the Fair Market Value of the consolidated total assets of this corporation; or
|
(iv)
|
the adoption of any plan or proposal for the liquidation of this corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of any Interested Stockholder; or
|
(v)
|
any reclassification of this corporation's securities (including any reverse stock split), or recapitalization of this corporation, or any merger or consolidation of this corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or
|
(i)
|
The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of Common Stock in such Business Combination shall be at least equal to the higher of the following:
|
(a)
|
(if applicable) the highest per share price paid by the Interested Stockholder for any shares of Common Stock acquired by it (1) within the two year period immediately prior to the first public announcement of the proposal of the Business Combination (the "Announcement Date") or (2) in the transaction in which it became an Interested Stockholder, whichever is higher; and
|
(b)
|
the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (such latter date is
|
(ii)
|
The aggregate amount of the cash and the Fair Market Value on the date of the consummation of the Business Combination of consideration other than cash to be received per share by the holders of shares of any other class of outstanding Voting Stock shall be at least equal to the highest of the following (it being intended that the requirements of this paragraph B (ii) shall be required to be met with respect to every class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock):
|
(a)
|
(if applicable) the highest per share price paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it (1) within the two-year period immediately prior to the Announcement Date or (2) in the transaction in which it became an Interested Stockholder, whichever is higher;
|
(b)
|
(if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of this corporation; or
|
(c)
|
the Fair Market Value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher.
|
(iii)
|
The consideration to be received by holders of a particular class of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interested Stockholder has previously paid for shares of such class of Voting Stock. If the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration for such class of Voting Stock shall be either cash or the form used to acquire the largest number of shares of such class of Voting Stock previously acquired by it. The price determined in accordance with paragraphs B(i) and B(ii) shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event.
|
(iv)
|
After such Interested Stockholder has become an Interested Stockholder except as approved by a majority of the Disinterested Directors, there shall have been:
|
(a)
|
no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on the outstanding Preferred Stock, if any; and
|
(b)
|
no reduction in the effective annual rate of dividends paid on the Common Stock.
|
(v)
|
After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the corporation, whether in anticipation of or in connection with such Business Combination or otherwise.
|
(i)
|
is the beneficial owner, directly or indirectly, of more than 5% of the voting power of the outstanding Voting Stock; or
|
(ii)
|
is an Affiliate of this corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of more than five percent (5%) of the voting power of the then outstanding Voting Stock; or
|
(iii)
|
is an assignee of or has otherwise acquired or succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.
|
(i)
|
which such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns, directly or indirectly; or
|
(ii)
|
which such person or any of its Affiliates or Associates has:
|
(a)
|
the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or
|
(b)
|
the right to vote pursuant to any agreement, arrangement or understanding; or
|
(iii)
|
which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock.
|
(i)
|
In the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock as reported in the principal consolidated transaction reporting system for securities listed or admitted to trading on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange, registered under the Securities Exchange Act of 1934 on which stock is listed, or, if such stock is not listed on such an exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period immediately preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotation System or any system then in use, and
|
(ii)
|
in the case of property other than cash or stock valued under (i) above, the fair market value of such property on the date in question as determined in good faith by a majority of the Disinterested Directors.
|
Date: November 19, 1999
|
By:
/S/ G. C. SULLIVAN
G. C. Sullivan Chairman of the Board and Chief Executive Officer |
Name of Company
|
|
Jurisdiction of Incorporation
|
1221 Olux, LLC
|
|
Delaware
|
6570 Donlon Group, LLC
|
|
Delaware
|
A & M Products Manufacturing Company
|
|
Delaware
|
Andover Properties, Inc.
|
|
Delaware
|
Iodine Holdings, Inc.
|
|
Connecticut
|
Brita Canada Corporation
|
|
Nova Scotia
|
Brita Canada Holdings Corporation
|
|
Nova Scotia
|
Brita GP
|
|
Ontario
|
Brita LP
|
|
Ontario
|
Brita Manufacturing Company
|
|
Delaware
|
The Brita Products Company
|
|
Delaware
|
BGP (Switzerland) S. a. r. l.
|
|
Switzerland
|
Burt’s Bees, Inc.
|
|
Delaware
|
Burt's Bees Australia Pty Ltd.
|
|
Australia
|
Burt’s Bees International Holdings
|
|
Delaware
|
Burt’s Bees Licensing, LLC
|
|
Delaware
|
The Burt’s Bees Products Company
|
|
Delaware
|
Caltech Industries, Inc.
|
|
Michigan
|
CBee (Europe) Limited
|
|
United Kingdom
|
Chesapeake Assurance Limited
|
|
Hawaii
|
Clorox Africa (Proprietary) Ltd.
|
|
South Africa
|
Clorox Africa Holdings (Proprietary) Ltd.
|
|
South Africa
|
Clorox Argentina S.A.
|
|
Argentina
|
Clorox Australasia Holdings, Inc.
|
|
Delaware
|
Clorox Australia Pty. Ltd.
|
|
Australia
|
Clorox Brazil Holdings LLC
|
|
Delaware
|
Clorox (Cayman Islands) Ltd.
|
|
Cayman Islands
|
Clorox Chile S.A.
|
|
Chile
|
Clorox China (Guangzhou) Ltd.
|
|
Guangzhou, P.R.C.
|
Clorox Commercial Company
|
|
Delaware
|
The Clorox Company of Canada Ltd.
|
|
Canada (Federal)
|
Clorox de Centro America, S.A.
|
|
Costa Rica
|
Clorox de Colombia S.A.
|
|
Colombia
|
Clorox de Mexico, S.A. de C.V.
|
|
Mexico
|
Clorox de Panama S.A.
|
|
Panama
|
Clorox del Ecuador S.A. Ecuaclorox
|
|
Ecuador
|
Clorox Diamond Production Company
|
|
Delaware
|
Clorox Dominicana S.R.L.
|
|
Dominican Republic
|
Clorox (Europe) Financing S.a.r.l.
|
|
Luxembourg
|
Clorox Healthcare Holdings, LLC
|
|
Delaware
|
Clorox Holdings Pty. Limited
|
|
Australia
|
Clorox Hong Kong Limited
|
|
Hong Kong
|
Clorox Hungary Liquidity Management Kft
|
|
Hungary
|
The Clorox International Company
|
|
Delaware
|
Clorox International Holdings, LLC
|
|
Delaware
|
Clorox International Philippines, Inc.
|
|
The Philippines
|
Clorox Luxembourg S.a.r.l.
|
|
Luxembourg
|
Name of Company
|
|
Jurisdiction of Incorporation
|
Clorox (Malaysia) Sdn. Bhd.
|
|
Malaysia
|
Clorox Manufacturing Company
|
|
Delaware
|
Clorox Manufacturing Company of Puerto Rico, Inc.
|
|
Puerto Rico
|
Clorox Mexicana S. de R.L. de C.V.
|
|
Mexico
|
Clorox New Zealand Limited
|
|
New Zealand
|
The Clorox Outdoor Products Company
|
|
Delaware
|
Clorox Peru S.A.
|
|
Peru
|
The Clorox Pet Products Company
|
|
Texas
|
Clorox Professional Products Company
|
|
Delaware
|
The Clorox Sales Company
|
|
Delaware
|
Clorox Services Company
|
|
Delaware
|
Clorox Servicios Corporativos S. de R.L. de C.V.
|
|
Mexico
|
Clorox Spain, S.L.
|
|
Spain
|
Clorox Spain Holdings, S.L.
|
|
Spain
|
Clorox Sub-Sahara Africa Limited
|
|
Kenya
|
Clorox (Switzerland) S.a.r.l.
|
|
Switzerland
|
Clorox Uruguay S.A.
|
|
Uruguay
|
The Consumer Learning Center, Inc.
|
|
Delaware
|
Corporacion Clorox de Venezuela, S.A.
|
|
Venezuela
|
CLX Realty Co.
|
|
Delaware
|
Everest NeoCell LLC
|
|
Delaware
|
Evolution Sociedad S.A.
|
|
Uruguay
|
Fabricante de Productos Plasticos, S.A. de C.V.
|
|
Mexico
|
First Brands (Bermuda) Limited
|
|
Bermuda
|
First Brands Corporation
|
|
Delaware
|
First Brands do Brasil Ltda.
|
|
Brazil
|
First Brands Mexicana, S.A. de C.V.
|
|
Mexico
|
Fully Will Limited
|
|
Hong Kong
|
Gazoontite, LLC
|
|
Delaware
|
Glad Manufacturing Company
|
|
Delaware
|
The Glad Products Company
|
|
Delaware
|
The Household Cleaning Products Company of Egypt Ltd.
|
|
Egypt
|
The HV Food Products Company
|
|
Delaware
|
HV Manufacturing Company
|
|
Delaware
|
Invermark S.A.
|
|
Argentina
|
Jingles LLC
|
|
Delaware
|
Kaflex S.A.
|
|
Argentina
|
Kingsford Manufacturing Company
|
|
Delaware
|
The Kingsford Products Company, LLC
|
|
Delaware
|
Lerwood Holdings Limited
|
|
British Virgin Islands
|
The Mexco Company
|
|
Delaware
|
Mohamed Ali Abudawood for Industry and Partners for Industry Company Ltd.
|
|
Saudi Arabia
|
National Cleaning Products Company Limited
|
|
Saudi Arabia
|
Nature’s Products, Inc.
|
|
Florida
|
Nutranext, LLC
|
|
Delaware
|
Nutranext Business, LLC
|
|
Delaware
|
Nutranext eHealth LLC
|
|
Delaware
|
Nutranext Direct, LLC
|
|
Delaware
|
Name of Company
|
|
Jurisdiction of Incorporation
|
Nutri-Health Direct Real Estate Holding Company, LLC
|
|
Delaware
|
Paulsboro Packaging Inc.
|
|
New Jersey
|
Petroplus Productos Automotivos S.A.
|
|
Brazil
|
Petroplus Sul Comercio Exterior S.A.
|
|
Brazil
|
Rainbow Light Nutritional Systems, LLC
|
|
Delaware
|
Rainbow Light Real Estate Holding Company, LLC
|
|
Delaware
|
ReNew Life Formulas, LLC
|
|
Delaware
|
ReNew Life Holdings Corporation
|
|
Delaware
|
Round Ridge Production Company
|
|
Delaware
|
Soy Vay Enterprises, Inc.
|
|
California
|
STP do Brasil Ltda.
|
|
Brazil
|
Yuhan-Clorox Co., Ltd.
|
|
Korea
|
(1)
|
Registration Statement (Form S-3 No. 333-224699) and in the related Prospectuses of The Clorox Company, and
|
(2)
|
Registration Statements (Form S-8 Nos. 33-56563, 33-56565, 33-41131, including post effective amendments No. 1 and No. 2, 333-16969, 333-29375, 333-44675, 333-69455, including post effective amendment No. 1, 333-86783, 333-90386, including the post effective amendment No. 1, 333-131487, 333-193913 and 333-213161) of The Clorox Company;
|
1.
|
I have reviewed this annual report on Form 10-K of The Clorox Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Benno Dorer
|
Benno Dorer
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of The Clorox Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Kevin B. Jacobsen
|
Kevin B. Jacobsen
|
Senior Vice President - Chief Financial Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
|
/s/ Benno Dorer
|
|
Benno Dorer
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|
/s/ Kevin B. Jacobsen
|
|
Kevin B. Jacobsen
|
|
Senior Vice President – Chief Financial Officer
|
•
|
Executive Overview
|
•
|
Results of Operations
|
•
|
Financial Position and Liquidity
|
•
|
Contingencies
|
•
|
Quantitative and Qualitative Disclosures about Market Risk
|
•
|
Recently Issued Accounting Standards
|
•
|
Critical Accounting Policies and Estimates
|
•
|
Summary of Non-GAAP Financial Measures
|
•
|
Cleaning
consists of laundry, home care and professional products marketed and sold in the United States. Products within this segment include laundry additives, including bleach products under the Clorox
®
brand and Clorox 2
®
stain fighter and color booster; home care products, primarily under the Clorox
®
, Formula 409
®
, Liquid-Plumr
®
, Pine-Sol
®
, S.O.S
®
and Tilex
®
brands; naturally derived products under the Green Works
®
brand; and professional cleaning, disinfecting and Food service products under the Clorox
®
, Dispatch
®
, HealthLink
®
,
Clorox Healthcare
®
,
Hidden Valley
®
, KC Masterpiece
®
, and Soy Vay
®
brands.
|
•
|
Household
consists of charcoal, bags, wraps and containers, cat litter, and digestive health products marketed and sold in the United States. Products within this segment include charcoal products under the Kingsford
®
and Match Light
®
brands; bags, wraps and containers under the Glad
®
brand; cat litter products under the Fresh Step
®
, Scoop Away
®
and Ever Clean
®
brands; and digestive health products under the RenewLife
®
brand.
|
•
|
Lifestyle
consists of food products, water-filtration systems and filters, natural personal care products, and dietary supplements primarily marketed and sold in the United States. Products within this segment include dressings and sauces, primarily under the Hidden Valley
®
, KC Masterpiece
®
,
Kingsford
®
and Soy Vay
®
brands; water-filtration systems and filters under the Brita
®
brand; natural personal care products under the Burt’s Bees
®
brand; and dietary supplements under the Rainbow Light
®
, Natural Vitality
®
and Neocell
®
brands.
|
•
|
International
consists of products sold outside the United States. Products within this segment include laundry, home care, water-filtration, digestive health products, charcoal and cat litter products, food products, bags, wraps and containers, natural personal care products and professional cleaning and disinfecting products primarily under the Clorox
®
, Glad
®
, PinoLuz
®
, Ayudin
®
, Limpido
®
, Clorinda
®
, Poett
®
, Mistolin
®
, Lestoil
®
, Bon Bril
®
, Brita
®
, Green Works
®
, Pine-Sol
®
, Agua Jane
®
, Chux
®
, RenewLife
®
, Kingsford
®
, Fresh Step
®
, Scoop Away
®
, Ever Clean
®
, KC Masterpiece
®
, Hidden Valley
®
, Burt’s Bees
®
brands and Clorox Healthcare
®
brands.
|
•
|
Free cash flow and free cash flow as a percentage of net sales.
Free cash flow is calculated as net cash provided by continuing operations less capital expenditures related to continuing operations.
|
•
|
Earnings from continuing operations before interest and taxes (EBIT) margin (the ratio of EBIT to net sales)
|
•
|
Earnings from continuing operations before interest, taxes, depreciation and amortization and non-cash asset impairment charges (Consolidated EBITDA, as defined in our Credit Agreement) to interest expense ratio (Interest Coverage ratio)
|
•
|
Economic profit (EP)
is defined by the Company as earnings from continuing operations before income taxes, excluding non-cash U.S. GAAP restructuring and intangible asset impairment charges, and interest expense; less income taxes (calculated utilizing the Company's effective tax rate), and less a capital charge (calculated as average capital employed multiplied by a cost of capital percentage rate).
|
•
|
The Company’s fiscal year
2018
net sales increased by
3%
to
$6,124
in fiscal year
2018
from
$5,973
in fiscal year
2017
, reflecting volume growth and the benefit of price increases, partially offset by unfavorable mix.
|
•
|
Gross margin decreased 100 basis points to
43.7%
in fiscal year
2018
from 44.7% in fiscal year
2017
, reflecting higher manufacturing and logistics costs and unfavorable commodity costs, partially offset by cost savings and the benefit of price increases.
|
•
|
The Company reported earnings from continuing operations of
$823
in fiscal year
2018
compared to
$703
in fiscal year
2017
. The Company reported earnings from continuing operations before income taxes of
$1,054
in fiscal year
2018
, compared to
$1,033
in fiscal year
2017
.
|
•
|
The Company delivered diluted net EPS from continuing operations in fiscal year
2018
of
$6.26
, an increase of approximately
17%
or $0.91, from fiscal year
2017
diluted net EPS of
$5.35
. The fiscal year 2018 EPS included a benefit of $0.83 as a result of the passage of The Tax Cuts and Jobs Act (the Tax Act).
|
•
|
EP increased by 19% to $624 in fiscal year
2018
compared to $525 in fiscal year
2017
(refer to the reconciliation of EP to earnings from continuing operations before income taxes in Exhibit 99.3).
|
•
|
The Company’s net cash flows provided by continuing operations were
$974
in fiscal year
2018
, compared to
$871
in fiscal year
2017
, reflecting lower tax payments, mainly due to the benefits from the Tax Act, and lower incentive compensation payments, partially offset by timing of payments to vendors. Free cash flow was
$780
or
12.7%
of net sales in fiscal year
2018
, an increase from
$640
or
10.7%
of net sales in fiscal year
2017
.
|
•
|
The Company paid
$450
in cash dividends to stockholders in fiscal year
2018
compared to
$412
in cash dividends in fiscal year
2017
. In February 2018, the Company announced an increase of 14% in its quarterly cash dividend, which was an accelerated declaration of the Company’s dividend increase that has typically taken place in the month of May and was a result of the passage of the Tax Act.
|
•
|
In May 2018, the Board of Directors authorized the Company to repurchase up to $2,000 in shares of common stock on the open market, which replaced the prior open-market purchase program with an authorized aggregate purchase amount of up to $750. In fiscal year
2018
, the Company repurchased
749,000
shares of its common stock at a cost of
$95
under the open-market purchase program.
|
•
|
On April 2, 2018, the Company acquired 100 percent of Nutranext, a health and wellness company based in Sunrise, Florida, for $681. The purchase of the business reflects the Company's strategy to acquire leading brands in fast-growing categories with attractive gross margins and a focus on health and wellness.
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
to
2017
|
|
2017
to
2016
|
||||||||
Net sales
|
$
|
6,124
|
|
|
$
|
5,973
|
|
|
$
|
5,761
|
|
|
3
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
to
2017
|
|
2017
to
2016
|
||||||||
Gross profit
|
$
|
2,675
|
|
|
$
|
2,671
|
|
|
$
|
2,598
|
|
|
—
|
%
|
|
3
|
%
|
Gross margin
|
43.7
|
%
|
|
44.7
|
%
|
|
45.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
% of Net sales
|
|||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
to
2017
|
|
2017
to
2016
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||
Selling and administrative expenses
|
$
|
837
|
|
|
$
|
810
|
|
|
$
|
806
|
|
|
3
|
%
|
|
—
|
%
|
|
13.7
|
%
|
|
13.6
|
%
|
|
14.0
|
%
|
Advertising costs
|
570
|
|
|
599
|
|
|
587
|
|
|
(5
|
)
|
|
2
|
|
|
9.3
|
|
|
10.0
|
|
|
10.2
|
|
|||
Research and development costs
|
132
|
|
|
135
|
|
|
141
|
|
|
(2
|
)
|
|
(4
|
)
|
|
2.2
|
|
|
2.3
|
|
|
2.4
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Interest expense
|
$
|
85
|
|
|
$
|
88
|
|
|
$
|
88
|
|
Other (income) expense, net
|
(3
|
)
|
|
6
|
|
|
(7
|
)
|
|||
Effective tax rate on earnings
|
21.8
|
%
|
|
31.9
|
%
|
|
34.1
|
%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
to
2017
|
|
2017
to
2016
|
||||||||
Diluted net EPS from continuing operations
|
$
|
6.26
|
|
|
$
|
5.35
|
|
|
$
|
4.92
|
|
|
17
|
%
|
|
9
|
%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
to
2017
|
|
2017
to
2016
|
||||||||
Net sales
|
$
|
2,060
|
|
|
$
|
2,002
|
|
|
$
|
1,912
|
|
|
3
|
%
|
|
5
|
%
|
Earnings from continuing operations before income taxes
|
574
|
|
|
523
|
|
|
511
|
|
|
10
|
|
|
2
|
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
to
2017
|
|
2017
to
2016
|
||||||||
Net sales
|
$
|
1,959
|
|
|
$
|
1,961
|
|
|
$
|
1,862
|
|
|
—
|
%
|
|
5
|
%
|
Earnings from continuing operations before income taxes
|
370
|
|
|
419
|
|
|
428
|
|
|
(12
|
)
|
|
(2
|
)
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
to
2017
|
|
2017
to
2016
|
||||||||
Net sales
|
$
|
1,077
|
|
|
$
|
1,000
|
|
|
$
|
990
|
|
|
8
|
%
|
|
1
|
%
|
Earnings from continuing operations before income taxes
|
243
|
|
|
244
|
|
|
251
|
|
|
—
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
to
2017
|
|
2017
to
2016
|
||||||||
Net sales
|
$
|
1,028
|
|
|
$
|
1,010
|
|
|
$
|
997
|
|
|
2
|
%
|
|
1
|
%
|
Earnings from continuing operations before income taxes
|
84
|
|
|
81
|
|
|
66
|
|
|
4
|
|
|
23
|
|
|
|
|
|
|
|
|
% Change
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
to
2017
|
|
2017
to
2016
|
||||||||
Losses from continuing operations before income taxes
|
$
|
(217
|
)
|
|
$
|
(234
|
)
|
|
$
|
(273
|
)
|
|
(7
|
)%
|
|
(14
|
)%
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by continuing operations
|
$
|
974
|
|
|
$
|
871
|
|
|
$
|
768
|
|
Net cash used for investing activities
|
(859
|
)
|
|
(205
|
)
|
|
(430
|
)
|
|||
Net cash used for financing activities
|
(399
|
)
|
|
(645
|
)
|
|
(316
|
)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by continuing operations
|
$
|
974
|
|
|
$
|
871
|
|
|
$
|
768
|
|
Less: capital expenditures
|
(194
|
)
|
|
(231
|
)
|
|
(172
|
)
|
|||
Free cash flow
|
$
|
780
|
|
|
$
|
640
|
|
|
$
|
596
|
|
Free cash flow as a percentage of net sales
|
12.7
|
%
|
|
10.7
|
%
|
|
10.3
|
%
|
|
2018
|
|
2017
|
||||
|
Short-term
|
|
Long-term
|
|
Short-term
|
|
Long-term
|
Standard and Poor’s
|
A-2
|
|
A-
|
|
A-2
|
|
A-
|
Moody’s
|
P-2
|
|
Baa1
|
|
P-2
|
|
Baa1
|
|
2018
|
||
Earnings from continuing operations
|
$
|
823
|
|
Add back:
|
|
||
Interest expense
|
85
|
|
|
Income tax expense
|
231
|
|
|
Depreciation and amortization
|
166
|
|
|
Non-cash asset impairment charges
|
1
|
|
|
Less:
|
|
||
Interest income
|
(6
|
)
|
|
Consolidated EBITDA
|
$
|
1,300
|
|
Interest expense
|
$
|
85
|
|
Interest Coverage ratio
|
15.3
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Amount
|
|
Shares
(in thousands)
|
|
Amount
|
|
Shares
(in thousands)
|
|
Amount
|
|
Shares
(in thousands)
|
|||||||||
Open-market purchase program
|
$
|
95
|
|
|
749
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Evergreen Program
|
177
|
|
|
1,422
|
|
|
189
|
|
|
1,505
|
|
|
254
|
|
|
2,151
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Dividends per share declared
|
$
|
3.60
|
|
|
$
|
3.24
|
|
|
$
|
3.11
|
|
Dividends per share paid
|
3.48
|
|
|
3.20
|
|
|
3.08
|
|
|||
Total dividends paid
|
450
|
|
|
412
|
|
|
398
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-term debt maturities including interest
payments
|
$
|
79
|
|
|
$
|
79
|
|
|
$
|
79
|
|
|
$
|
373
|
|
|
$
|
659
|
|
|
$
|
1,580
|
|
|
$
|
2,849
|
|
Notes and loans payable
|
199
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
199
|
|
|||||||
Purchase obligations
(1)
|
169
|
|
|
55
|
|
|
32
|
|
|
20
|
|
|
15
|
|
|
13
|
|
|
304
|
|
|||||||
Operating leases
|
56
|
|
|
51
|
|
|
46
|
|
|
36
|
|
|
33
|
|
|
108
|
|
|
330
|
|
|||||||
Payments related to nonqualified retirement income and retirement health care plans
(2)
|
15
|
|
|
16
|
|
|
14
|
|
|
14
|
|
|
15
|
|
|
73
|
|
|
147
|
|
|||||||
Venture agreement terminal obligation
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
631
|
|
|
631
|
|
|||||||
Total
|
$
|
518
|
|
|
$
|
201
|
|
|
$
|
171
|
|
|
$
|
443
|
|
|
$
|
722
|
|
|
$
|
2,405
|
|
|
$
|
4,460
|
|
(1)
|
Purchase obligations are defined as purchase agreements that are enforceable and legally binding and that contain specified or determinable significant terms, including quantity, price and the approximate timing of the transaction. For purchase obligations subject to variable price and/or quantity provisions, an estimate of the price and/or quantity has been made. Examples of the Company’s purchase obligations include contracts to purchase raw materials, commitments to contract manufacturers, commitments for information technology and related services, advertising contracts, capital expenditure agreements, software acquisition and license commitments and service contracts. The raw material contracts included above are entered into during the regular course of business based on expectations of future purchases. Many of these raw material contracts are flexible to allow for changes in the Company’s business and related requirements. If such changes were to occur, the Company believes its exposure could differ from the amounts listed above. Any amounts reflected in the consolidated balance sheets as Accounts payable and accrued liabilities are excluded from the table above, as they are short-term in nature and expected to be paid within one year.
|
(2)
|
These amounts represent expected payments through 2028. Based on the accounting rules for nonqualified retirement income and retirement health care plans, the liabilities reflected in the Company’s consolidated balance sheets differ from these expected future payments (see Notes to Consolidated Financial Statements).
|
(3)
|
The Company has a venture agreement with The Procter & Gamble Company (P&G) for the Company’s Glad
®
bags, wraps and containers business. As of
June 30, 2018
, P&G had a 20% interest in the venture. Upon termination of the agreement, the Company is required to purchase P&G’s
20%
interest for cash at fair value as established by predetermined valuation procedures. Refer to Notes to Consolidated Financial Statements for further details.
|
•
|
intense competition in the Company’s markets;
|
•
|
the impact of the changing retail environment, including the growth of e-commerce retailers, hard discounters and other alternative retail channels;
|
•
|
volatility and increases in commodity costs such as resin, sodium hypochlorite and agricultural commodities, and increases in energy, transportation or other costs;
|
•
|
the ability of the Company to drive sales growth, increase price and market share, grow its product categories and manage favorable product and geographic mix;
|
•
|
dependence on key customers and risks related to customer consolidation and ordering patterns;
|
•
|
risks related to reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or Company information, or service interruptions;
|
•
|
the Company’s ability to maintain its business reputation and the reputation of its brands;
|
•
|
risks relating to acquisitions, new ventures and divestitures, and associated costs, including the potential for asset impairment charges related to, among others, intangible assets and goodwill; and the ability to complete announced transactions and, if completed, integration costs and potential contingent liabilities related to those transactions, including those related to the Nutranext acquisition;
|
•
|
lower revenue or increased costs resulting from government actions and regulations;
|
•
|
the ability of the Company to successfully manage global political, legal, tax and regulatory risks, including changes in regulatory or administrative activity and as a result of the Nutranext acquisition;
|
•
|
worldwide, regional and local economic and financial market conditions;
|
•
|
risks related to international operations and international trade, including political instability; government-imposed price controls or other regulations; foreign currency fluctuations, including devaluations, and foreign currency exchange rate controls, including periodic changes in such controls; changes in U.S. immigration or trade policies, including tariffs, labor claims, labor unrest and inflationary pressures, particularly in Argentina; potential negative impact and liabilities from the use, storage and transportation of chlorine in certain international markets where chlorine is used in the production of bleach; and the possibility of nationalization, expropriation of assets or other government action;
|
•
|
the ability of the Company to innovate and to develop and introduce commercially successful products;
|
•
|
the impact of product liability claims, labor claims and other legal or tax proceedings, including in foreign jurisdictions;
|
•
|
the ability of the Company to implement and generate cost savings and efficiencies;
|
•
|
the success of the Company’s business strategies;
|
•
|
risks related to additional increases in the estimated fair value of P&G’s interest in the Glad
®
business such as the significant increase over fiscal year 2018 primarily due to the recent Tax Act and the recent extension of the venture agreement with, and the related R&D support provided by, P&G;
|
•
|
the Company’s ability to attract and retain key personnel;
|
•
|
supply disruptions and other risks inherent in reliance on a limited base of suppliers;
|
•
|
environmental matters, including costs associated with the remediation and monitoring of past contamination, and possible increases in costs resulting from actions by relevant regulators, and the handling and/or transportation of hazardous substances;
|
•
|
the impact of natural disasters, terrorism and other events beyond the Company’s control;
|
•
|
the Company’s ability to maximize, assert and defend its intellectual property rights;
|
•
|
any infringement or claimed infringement by the Company of third-party intellectual property rights;
|
•
|
risks related to the effects of the Tax Act on the Company as the Company continues to assess and analyze such effects as well as its current interpretation, assumptions and expectations relating to the Tax Act, and the possibility that the financial impact of the Tax Act on the Company may be materially different from the Company's current estimates based on the Company's actual results for future periods, the Company's further assessment and analysis of the Tax Act, any additional Congressional, administrative or other actions, or other guidance related to the Tax Act and any actions that the Company may take as a result of the Tax Act;
|
•
|
uncertainties relating to tax positions, tax disputes and changes in the Company’s tax rate;
|
•
|
the effect of the Company’s indebtedness and credit rating on its business operations and financial results;
|
•
|
the Company’s ability to pay and declare dividends or repurchase its stock in the future;
|
•
|
the Company’s ability to maintain an effective system of internal controls;
|
•
|
the impacts of potential stockholder activism;
|
•
|
the accuracy of the Company’s estimates and assumptions on which its financial projections are based; and
|
•
|
risks related to the Company’s discontinuation of operations in Venezuela.
|
Dollars in millions, except share and per share data
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
|
$
|
6,124
|
|
|
$
|
5,973
|
|
|
$
|
5,761
|
|
Cost of products sold
|
|
3,449
|
|
|
3,302
|
|
|
3,163
|
|
|||
Gross profit
|
|
2,675
|
|
|
2,671
|
|
|
2,598
|
|
|||
Selling and administrative expenses
|
|
837
|
|
|
810
|
|
|
806
|
|
|||
Advertising costs
|
|
570
|
|
|
599
|
|
|
587
|
|
|||
Research and development costs
|
|
132
|
|
|
135
|
|
|
141
|
|
|||
Interest expense
|
|
85
|
|
|
88
|
|
|
88
|
|
|||
Other (income) expense, net
|
|
(3
|
)
|
|
6
|
|
|
(7
|
)
|
|||
Earnings from continuing operations before income taxes
|
|
1,054
|
|
|
1,033
|
|
|
983
|
|
|||
Income taxes on continuing operations
|
|
231
|
|
|
330
|
|
|
335
|
|
|||
Earnings from continuing operations
|
|
823
|
|
|
703
|
|
|
648
|
|
|||
Losses from discontinued operations, net of tax
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||
Net earnings
|
|
$
|
823
|
|
|
$
|
701
|
|
|
$
|
648
|
|
Net earnings (losses) per share
|
|
|
|
|
|
|
||||||
Basic
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
6.37
|
|
|
$
|
5.45
|
|
|
$
|
5.01
|
|
Discontinued operations
|
|
—
|
|
|
(0.02
|
)
|
|
—
|
|
|||
Basic net earnings per share
|
|
$
|
6.37
|
|
|
$
|
5.43
|
|
|
$
|
5.01
|
|
Diluted
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
6.26
|
|
|
$
|
5.35
|
|
|
$
|
4.92
|
|
Discontinued operations
|
|
—
|
|
|
(0.02
|
)
|
|
—
|
|
|||
Diluted net earnings per share
|
|
$
|
6.26
|
|
|
$
|
5.33
|
|
|
$
|
4.92
|
|
Weighted average shares outstanding (in thousands)
|
|
|
|
|
|
|
||||||
Basic
|
|
129,293
|
|
|
128,953
|
|
|
129,472
|
|
|||
Diluted
|
|
131,581
|
|
|
131,566
|
|
|
131,717
|
|
Years ended June 30
|
|
|
|
|
|
|
||||||
Dollars in millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Earnings from continuing operations
|
|
$
|
823
|
|
|
$
|
703
|
|
|
$
|
648
|
|
Losses from discontinued operations, net of tax
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||
Net earnings
|
|
823
|
|
|
701
|
|
|
648
|
|
|||
Other comprehensive income (losses):
|
|
|
|
|
|
|
||||||
Foreign currency adjustments, net of tax
|
|
(28
|
)
|
|
(3
|
)
|
|
(53
|
)
|
|||
Net unrealized gains (losses) on derivatives, net of tax
|
|
12
|
|
|
7
|
|
|
9
|
|
|||
Pension and postretirement benefit adjustments, net of tax
|
|
12
|
|
|
23
|
|
|
(24
|
)
|
|||
Total other comprehensive income (losses), net of tax
|
|
(4
|
)
|
|
27
|
|
|
(68
|
)
|
|||
Comprehensive income
|
|
$
|
819
|
|
|
$
|
728
|
|
|
$
|
580
|
|
As of June 30
|
|
|
|
|
||||
Dollars in millions, except share and per share data
|
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
131
|
|
|
$
|
418
|
|
Receivables, net
|
|
600
|
|
|
565
|
|
||
Inventories, net
|
|
506
|
|
|
459
|
|
||
Prepaid expenses and other current assets
|
|
74
|
|
|
72
|
|
||
Total current assets
|
|
1,311
|
|
|
1,514
|
|
||
Property, plant and equipment, net
|
|
996
|
|
|
931
|
|
||
Goodwill
|
|
1,602
|
|
|
1,196
|
|
||
Trademarks, net
|
|
795
|
|
|
654
|
|
||
Other intangible assets, net
|
|
134
|
|
|
68
|
|
||
Other assets
|
|
222
|
|
|
210
|
|
||
Total assets
|
|
$
|
5,060
|
|
|
$
|
4,573
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Notes and loans payable
|
|
$
|
199
|
|
|
$
|
404
|
|
Current maturities of long-term debt
|
|
—
|
|
|
400
|
|
||
Accounts payable and accrued liabilities
|
|
1,001
|
|
|
1,005
|
|
||
Total current liabilities
|
|
1,200
|
|
|
1,809
|
|
||
Long-term debt
|
|
2,284
|
|
|
1,391
|
|
||
Other liabilities
|
|
778
|
|
|
770
|
|
||
Deferred income taxes
|
|
72
|
|
|
61
|
|
||
Total liabilities
|
|
4,334
|
|
|
4,031
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Stockholders’ equity
|
|
|
|
|
||||
Preferred stock: $1.00 par value; 5,000,000 shares authorized; none
issued or outstanding
|
|
—
|
|
|
—
|
|
||
Common stock: $1.00 par value; 750,000,000 shares authorized; 158,741,461 shares issued as of June 30, 2018 and 2017; and 127,982,767
and 129,014,172 shares outstanding as of June 30, 2018 and 2017, respectively
|
|
159
|
|
|
159
|
|
||
Additional paid-in capital
|
|
975
|
|
|
928
|
|
||
Retained earnings
|
|
2,797
|
|
|
2,440
|
|
||
Treasury shares, at cost: 30,758,694 and 29,727,289 shares as of June 30, 2018 and 2017, respectively
|
|
(2,658
|
)
|
|
(2,442
|
)
|
||
Accumulated other comprehensive net (losses) income
|
|
(547
|
)
|
|
(543
|
)
|
||
Stockholders’ equity
|
|
726
|
|
|
542
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
5,060
|
|
|
$
|
4,573
|
|
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
|
|
Treasury
Shares |
|
Accumulated
Other Comprehensive Net (Losses) Income |
|
|
||||||||||||||||||
Dollars in millions
|
|
Shares
(in thousands) |
|
Amount
|
|
Retained
Earnings |
|
Shares
(in thousands) |
|
Amount
|
|
Total
|
||||||||||||||||||
Balance as of June 30, 2015
|
|
158,741
|
|
|
$
|
159
|
|
|
$
|
775
|
|
|
$
|
1,923
|
|
|
(30,127
|
)
|
|
$
|
(2,237
|
)
|
|
$
|
(502
|
)
|
|
$
|
118
|
|
Net earnings
|
|
|
|
|
|
|
|
648
|
|
|
|
|
|
|
|
|
648
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(68
|
)
|
|
(68
|
)
|
||||||||||||
Accrued dividends
|
|
|
|
|
|
|
|
(406
|
)
|
|
|
|
|
|
|
|
(406
|
)
|
||||||||||||
Stock-based compensation
|
|
|
|
|
|
45
|
|
|
|
|
|
|
|
|
|
|
45
|
|
||||||||||||
Other employee stock plan activities
|
|
|
|
|
|
48
|
|
|
(2
|
)
|
|
2,892
|
|
|
168
|
|
|
|
|
214
|
|
|||||||||
Treasury stock purchased
|
|
|
|
|
|
|
|
|
|
(2,151
|
)
|
|
(254
|
)
|
|
|
|
(254
|
)
|
|||||||||||
Balance as of June 30, 2016
|
|
158,741
|
|
|
159
|
|
|
868
|
|
|
2,163
|
|
|
(29,386
|
)
|
|
(2,323
|
)
|
|
(570
|
)
|
|
297
|
|
||||||
Net earnings
|
|
|
|
|
|
|
|
701
|
|
|
|
|
|
|
|
|
701
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
|
27
|
|
||||||||||||
Accrued dividends
|
|
|
|
|
|
|
|
(421
|
)
|
|
|
|
|
|
|
|
(421
|
)
|
||||||||||||
Stock-based compensation
|
|
|
|
|
|
51
|
|
|
|
|
|
|
|
|
|
|
51
|
|
||||||||||||
Other employee stock plan activities
|
|
|
|
|
|
9
|
|
|
(3
|
)
|
|
1,164
|
|
|
70
|
|
|
|
|
76
|
|
|||||||||
Treasury stock purchased
|
|
|
|
|
|
|
|
|
|
(1,505
|
)
|
|
(189
|
)
|
|
|
|
(189
|
)
|
|||||||||||
Balance as of June 30, 2017
|
|
158,741
|
|
|
159
|
|
|
928
|
|
|
2,440
|
|
|
(29,727
|
)
|
|
(2,442
|
)
|
|
(543
|
)
|
|
542
|
|
||||||
Net earnings
|
|
|
|
|
|
|
|
823
|
|
|
|
|
|
|
|
|
823
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||||||||
Accrued dividends
|
|
|
|
|
|
|
|
(467
|
)
|
|
|
|
|
|
|
|
(467
|
)
|
||||||||||||
Stock-based compensation
|
|
|
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
53
|
|
||||||||||||
Other employee stock plan activities
|
|
|
|
|
|
(6
|
)
|
|
1
|
|
|
1,139
|
|
|
56
|
|
|
|
|
51
|
|
|||||||||
Treasury stock purchased
|
|
|
|
|
|
|
|
|
|
(2,171
|
)
|
|
(272
|
)
|
|
|
|
(272
|
)
|
|||||||||||
Balance as of June 30, 2018
|
|
158,741
|
|
|
$
|
159
|
|
|
$
|
975
|
|
|
$
|
2,797
|
|
|
(30,759
|
)
|
|
$
|
(2,658
|
)
|
|
$
|
(547
|
)
|
|
$
|
726
|
|
Years ended June 30
|
|
|
|
|
|
|
||||||
Dollars in millions
|
|
2018
|
|
2017
|
|
2016
|
||||||
Operating activities:
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
823
|
|
|
$
|
701
|
|
|
$
|
648
|
|
Deduct: Losses from discontinued operations, net of tax
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||
Earnings from continuing operations
|
|
823
|
|
|
703
|
|
|
648
|
|
|||
Adjustments to reconcile earnings from continuing operations to net cash provided by continuing operations:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
166
|
|
|
163
|
|
|
165
|
|
|||
Stock-based compensation
|
|
53
|
|
|
51
|
|
|
45
|
|
|||
Deferred income taxes
|
|
(23
|
)
|
|
(35
|
)
|
|
5
|
|
|||
Other
|
|
43
|
|
|
36
|
|
|
1
|
|
|||
Changes in:
|
|
|
|
|
|
|
||||||
Receivables, net
|
|
(24
|
)
|
|
(1
|
)
|
|
(52
|
)
|
|||
Inventories, net
|
|
(21
|
)
|
|
(19
|
)
|
|
(45
|
)
|
|||
Prepaid expenses and other current assets
|
|
3
|
|
|
(5
|
)
|
|
6
|
|
|||
Accounts payable and accrued liabilities
|
|
(47
|
)
|
|
(34
|
)
|
|
57
|
|
|||
Income taxes payable
|
|
1
|
|
|
12
|
|
|
(62
|
)
|
|||
Net cash provided by continuing operations
|
|
974
|
|
|
871
|
|
|
768
|
|
|||
Net cash (used for) provided by discontinued operations
|
|
—
|
|
|
(3
|
)
|
|
10
|
|
|||
Net cash provided by operations
|
|
974
|
|
|
868
|
|
|
778
|
|
|||
Investing activities:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(194
|
)
|
|
(231
|
)
|
|
(172
|
)
|
|||
Businesses acquired, net of cash acquired
|
|
(681
|
)
|
|
—
|
|
|
(290
|
)
|
|||
Other
|
|
16
|
|
|
26
|
|
|
32
|
|
|||
Net cash used for investing activities
|
|
(859
|
)
|
|
(205
|
)
|
|
(430
|
)
|
|||
Financing activities:
|
|
|
|
|
|
|
||||||
Notes and loans payable, net
|
|
(214
|
)
|
|
(125
|
)
|
|
426
|
|
|||
Long-term debt borrowings, net of issuance costs
|
|
891
|
|
|
—
|
|
|
—
|
|
|||
Long-term debt repayments
|
|
(400
|
)
|
|
—
|
|
|
(300
|
)
|
|||
Treasury stock purchased
|
|
(271
|
)
|
|
(183
|
)
|
|
(254
|
)
|
|||
Cash dividends paid
|
|
(450
|
)
|
|
(412
|
)
|
|
(398
|
)
|
|||
Issuance of common stock for employee stock plans and other
|
|
45
|
|
|
75
|
|
|
210
|
|
|||
Net cash used for financing activities
|
|
(399
|
)
|
|
(645
|
)
|
|
(316
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(3
|
)
|
|
(1
|
)
|
|
(13
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
(287
|
)
|
|
17
|
|
|
19
|
|
|||
Cash and cash equivalents:
|
|
|
|
|
|
|
||||||
Beginning of year
|
|
418
|
|
|
401
|
|
|
382
|
|
|||
End of year
|
|
$
|
131
|
|
|
$
|
418
|
|
|
$
|
401
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
75
|
|
|
$
|
78
|
|
|
$
|
79
|
|
Income taxes paid, net of refunds
|
|
245
|
|
|
347
|
|
|
323
|
|
|||
Non-cash financing activities:
|
|
|
|
|
|
|
||||||
Cash dividends declared and accrued, but not paid
|
|
123
|
|
|
108
|
|
|
104
|
|
|
Estimated
Useful Lives
|
Buildings and leasehold improvements
|
7 - 40 years
|
Land improvements
|
10 - 30 years
|
Machinery and equipment
|
3 - 15 years
|
Computer equipment
|
3 - 5 years
|
Capitalized software costs
|
3 - 7 years
|
|
RenewLife
|
||
Goodwill
|
$
|
137
|
|
Trademarks
|
134
|
|
|
Customer relationships
|
36
|
|
|
Property, plant and equipment
|
3
|
|
|
Working capital, net
|
40
|
|
|
Deferred income taxes
|
(60
|
)
|
|
Consideration paid
|
$
|
290
|
|
|
2018
|
|
2017
|
||||
Finished goods
|
$
|
395
|
|
|
$
|
363
|
|
Raw materials and packaging
|
129
|
|
|
119
|
|
||
Work in process
|
9
|
|
|
3
|
|
||
LIFO allowances
|
(27
|
)
|
|
(26
|
)
|
||
Total
|
$
|
506
|
|
|
$
|
459
|
|
|
2018
|
|
2017
|
||||
Machinery and equipment
|
$
|
1,808
|
|
|
$
|
1,696
|
|
Buildings
|
574
|
|
|
524
|
|
||
Capitalized software costs
|
375
|
|
|
371
|
|
||
Land and improvements
|
131
|
|
|
116
|
|
||
Construction in progress
|
77
|
|
|
130
|
|
||
Computer equipment
|
92
|
|
|
95
|
|
||
Total
|
3,057
|
|
|
2,932
|
|
||
Less: Accumulated depreciation and amortization
|
(2,061
|
)
|
|
(2,001
|
)
|
||
Property, plant and equipment, net
|
$
|
996
|
|
|
$
|
931
|
|
|
Goodwill
|
||||||||||||||||||
|
Cleaning
|
|
Household
|
|
Lifestyle
|
|
International
|
|
Total
|
||||||||||
Balance June 30, 2016
|
$
|
323
|
|
|
$
|
207
|
|
|
$
|
244
|
|
|
$
|
423
|
|
|
$
|
1,197
|
|
Effect of foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Balance June 30, 2017
|
$
|
323
|
|
|
$
|
207
|
|
|
$
|
244
|
|
|
$
|
422
|
|
|
$
|
1,196
|
|
Acquisition
|
—
|
|
|
102
|
|
|
309
|
|
|
—
|
|
|
411
|
|
|||||
Effect of foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|||||
Balance June 30, 2018
|
$
|
323
|
|
|
$
|
309
|
|
|
$
|
553
|
|
|
$
|
417
|
|
|
$
|
1,602
|
|
|
As of June 30, 2018
|
|
As of June 30, 2017
|
||||||||||||||||||||
|
Gross
carrying amount |
|
Accumulated
amortization |
|
Net carrying
amount |
|
Gross
carrying amount |
|
Accumulated
amortization |
|
Net carrying
amount |
||||||||||||
Trademarks not subject to amortization
|
$
|
778
|
|
|
$
|
—
|
|
|
$
|
778
|
|
|
$
|
645
|
|
|
$
|
—
|
|
|
$
|
645
|
|
Trademarks subject to amortization
|
41
|
|
|
24
|
|
|
17
|
|
|
32
|
|
|
23
|
|
|
9
|
|
||||||
Other intangible assets
|
430
|
|
|
296
|
|
|
134
|
|
|
358
|
|
|
290
|
|
|
68
|
|
||||||
Total
|
$
|
1,249
|
|
|
$
|
320
|
|
|
$
|
929
|
|
|
$
|
1,035
|
|
|
$
|
313
|
|
|
$
|
722
|
|
|
2018
|
|
2017
|
||||
Accounts payable
|
$
|
507
|
|
|
$
|
501
|
|
Compensation and employee benefit costs
|
154
|
|
|
162
|
|
||
Trade and sales promotion
|
91
|
|
|
117
|
|
||
Dividends
|
129
|
|
|
116
|
|
||
Other
|
120
|
|
|
109
|
|
||
Total
|
$
|
1,001
|
|
|
$
|
1,005
|
|
|
2018
|
|
2017
|
||||
Commercial paper
|
$
|
199
|
|
|
$
|
403
|
|
Foreign borrowings
|
—
|
|
|
1
|
|
||
Total
|
$
|
199
|
|
|
$
|
404
|
|
|
2018
|
|
2017
|
||||
Senior unsecured notes and debentures:
|
|
|
|
||||
5.95%, $400 due October 2017
|
$
|
—
|
|
|
$
|
400
|
|
3.80%, $300 due November 2021
|
298
|
|
|
298
|
|
||
3.05%, $600 due September 2022
|
597
|
|
|
596
|
|
||
3.50%, $500 due December 2024
|
497
|
|
|
497
|
|
||
3.10%, $400 due October 2027
|
397
|
|
|
—
|
|
||
3.90%, $500 due May 2028
|
495
|
|
|
—
|
|
||
Total
|
2,284
|
|
|
1,791
|
|
||
Less: Current maturities of long-term debt
|
—
|
|
|
(400
|
)
|
||
Long-term debt
|
$
|
2,284
|
|
|
$
|
1,391
|
|
|
2018
|
|
2017
|
||||
Revolving credit facility
|
$
|
1,100
|
|
|
$
|
1,100
|
|
Foreign and other credit lines
|
37
|
|
|
29
|
|
||
Total
|
$
|
1,137
|
|
|
$
|
1,129
|
|
|
2018
|
|
2017
|
||||
Venture agreement terminal obligation, net
|
$
|
341
|
|
|
$
|
317
|
|
Employee benefit obligations
|
283
|
|
|
298
|
|
||
Taxes
|
52
|
|
|
42
|
|
||
Other
|
102
|
|
|
113
|
|
||
Total
|
$
|
778
|
|
|
$
|
770
|
|
|
Gains (losses)
recognized in Other comprehensive income |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Commodity purchase derivative contracts
|
$
|
4
|
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
Foreign exchange derivative contracts
|
2
|
|
|
(1
|
)
|
|
(3
|
)
|
|||
Interest rate derivative contracts
|
2
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
8
|
|
|
$
|
(4
|
)
|
|
$
|
(7
|
)
|
|
Gains (losses) reclassified from Accumulated
other comprehensive net (losses) income and recognized in Net earnings |
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Commodity purchase derivative contracts
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
(13
|
)
|
Foreign exchange derivative contracts
|
(1
|
)
|
|
(3
|
)
|
|
1
|
|
|||
Interest rate derivative contracts
|
(6
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|||
Total
|
$
|
(6
|
)
|
|
$
|
(11
|
)
|
|
$
|
(18
|
)
|
|
|
|
|
|
2018
|
|
2017
|
||||||||||||
Assets
|
Balance sheet classification
|
|
Fair value
hierarchy level |
|
Carrying
Amount |
|
Estimated
Fair Value |
|
Carrying
Amount |
|
Estimated
Fair Value |
||||||||
Investments including money market funds
|
Cash and cash equivalents
(a)
|
|
1
|
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
221
|
|
|
$
|
221
|
|
Time deposits
|
Cash and cash equivalents
(a)
|
|
2
|
|
23
|
|
|
23
|
|
|
115
|
|
|
115
|
|
||||
Commodity purchase swaps contracts
|
Prepaid expenses and other current assets
|
|
2
|
|
3
|
|
|
3
|
|
|
1
|
|
|
1
|
|
||||
Foreign exchange forward contracts
|
Prepaid expenses and other current assets
|
|
2
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Trust assets for nonqualified deferred compensation plans
|
Other assets
|
|
1
|
|
86
|
|
|
86
|
|
|
72
|
|
|
72
|
|
||||
|
|
|
|
|
$
|
138
|
|
|
$
|
138
|
|
|
$
|
409
|
|
|
$
|
409
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Notes and loans payable
|
Notes and loans payable
(b)
|
|
2
|
|
$
|
199
|
|
|
$
|
199
|
|
|
$
|
404
|
|
|
$
|
404
|
|
Commodity purchase futures contracts
|
Accounts payable and accrued liabilities
|
|
1
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Commodity purchase swaps contracts
|
Accounts payable and accrued liabilities
|
|
2
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Foreign exchange forward contracts
|
Accounts payable and accrued liabilities
|
|
2
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Current maturities of long-term debt and Long-term debt
|
Current maturities of long-
term debt and Long-term debt (c) |
|
2
|
|
2,284
|
|
|
2,269
|
|
|
1,791
|
|
|
1,855
|
|
||||
|
|
|
|
|
$
|
2,484
|
|
|
$
|
2,469
|
|
|
$
|
2,197
|
|
|
$
|
2,261
|
|
(a)
|
Cash and cash equivalents are composed of time deposits and other interest-bearing investments, including money market funds with original maturity dates of 90 days or less. Cash and cash equivalents are recorded at cost, which approximates fair value.
|
(b)
|
Notes and loan payable is composed of U.S. commercial paper and/or other similar short-term debts issued by non-U.S. subsidiaries, all of which are recorded at cost, which approximates fair value.
|
(c)
|
Current maturities of long-term debt and Long-term debt are recorded at cost. The fair value of Long-term debt, including current maturities, was determined using secondary market prices quoted by corporate bond dealers, and is classified as Level 2
.
|
Year
|
Operating
leases |
|
Capital
leases |
||||
2019
|
$
|
56
|
|
|
$
|
1
|
|
2020
|
51
|
|
|
—
|
|
||
2021
|
46
|
|
|
—
|
|
||
2022
|
36
|
|
|
—
|
|
||
2023
|
33
|
|
|
—
|
|
||
Thereafter
|
108
|
|
|
—
|
|
||
Total
|
$
|
330
|
|
|
$
|
1
|
|
Year
|
Purchase
Obligations |
||
2019
|
$
|
169
|
|
2020
|
55
|
|
|
2021
|
32
|
|
|
2022
|
20
|
|
|
2023
|
15
|
|
|
Thereafter
|
13
|
|
|
Total
|
$
|
304
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Amount
|
|
Shares
(in thousands) |
|
Amount
|
|
Shares
(in thousands) |
|
Amount
|
|
Shares
(in thousands) |
|||||||||
Open-market purchase program
|
$
|
95
|
|
|
749
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Evergreen Program
|
177
|
|
|
1,422
|
|
|
189
|
|
|
1,505
|
|
|
254
|
|
|
2,151
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Dividends per share declared
|
$
|
3.60
|
|
|
$
|
3.24
|
|
|
$
|
3.11
|
|
Dividends per share paid
|
3.48
|
|
|
3.20
|
|
|
3.08
|
|
|
Foreign currency
translation adjustments |
|
Net
unrealized gains (losses) on derivatives |
|
Pension and
postretirement benefit adjustments |
|
Accumulated
other comprehensive (losses) income |
||||||||
Balance June 30, 2015
|
$
|
(300
|
)
|
|
$
|
(53
|
)
|
|
$
|
(149
|
)
|
|
$
|
(502
|
)
|
Other comprehensive income (loss) before
reclassifications
|
(43
|
)
|
|
(7
|
)
|
|
(38
|
)
|
|
(88
|
)
|
||||
Amounts reclassified from Accumulated other
comprehensive net losses
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
||||
Income tax benefit (expense)
|
(10
|
)
|
|
(2
|
)
|
|
14
|
|
|
2
|
|
||||
Net current period other comprehensive income (loss)
|
(53
|
)
|
|
9
|
|
|
(24
|
)
|
|
(68
|
)
|
||||
Balance June 30, 2016
|
(353
|
)
|
|
(44
|
)
|
|
(173
|
)
|
|
(570
|
)
|
||||
Other comprehensive income (loss) before
reclassifications |
(3
|
)
|
|
(4
|
)
|
|
27
|
|
|
20
|
|
||||
Amounts reclassified from Accumulated other
comprehensive net losses
|
—
|
|
|
11
|
|
|
9
|
|
|
20
|
|
||||
Income tax benefit (expense)
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
||||
Net current period other comprehensive income (loss)
|
(3
|
)
|
|
7
|
|
|
23
|
|
|
27
|
|
||||
Balance June 30, 2017
|
(356
|
)
|
|
(37
|
)
|
|
(150
|
)
|
|
(543
|
)
|
||||
Other comprehensive income (loss) before
reclassifications
|
(20
|
)
|
|
8
|
|
|
11
|
|
|
(1
|
)
|
||||
Amounts reclassified from Accumulated other
comprehensive net losses
|
—
|
|
|
6
|
|
|
8
|
|
|
14
|
|
||||
Income tax benefit (expense)
|
(8
|
)
|
|
(2
|
)
|
|
(7
|
)
|
|
(17
|
)
|
||||
Net current period other comprehensive income (loss)
|
(28
|
)
|
|
12
|
|
|
12
|
|
|
(4
|
)
|
||||
Balance June 30, 2018
|
$
|
(384
|
)
|
|
$
|
(25
|
)
|
|
$
|
(138
|
)
|
|
$
|
(547
|
)
|
|
2018
|
|
2017
|
|
2016
|
|||
Basic
|
129,293
|
|
|
128,953
|
|
|
129,472
|
|
Dilutive effect of stock options and other
|
2,288
|
|
|
2,613
|
|
|
2,245
|
|
Diluted
|
131,581
|
|
|
131,566
|
|
|
131,717
|
|
|
|
|
|
|
|
|||
Antidilutive stock options and other
|
1,192
|
|
|
11
|
|
|
42
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of products sold
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
6
|
|
Selling and administrative expenses
|
42
|
|
|
40
|
|
|
35
|
|
|||
Research and development costs
|
4
|
|
|
4
|
|
|
4
|
|
|||
Total compensation costs
|
$
|
53
|
|
|
$
|
51
|
|
|
$
|
45
|
|
|
|
|
|
|
|
||||||
Related income tax benefit
|
$
|
16
|
|
|
$
|
19
|
|
|
$
|
17
|
|
|
2018
|
|
2017
|
|
2016
|
Expected life
|
5.5 years
|
|
5.5 years
|
|
5.6 years
|
Weighted-average expected life
|
5.5 years
|
|
5.5 years
|
|
5.6 years
|
Expected volatility
|
15.7% to 18.7%
|
|
16.2% to 16.9%
|
|
16.4% to 17.3%
|
Weighted-average volatility
|
15.7%
|
|
16.9%
|
|
17.2%
|
Risk-free interest rate
|
1.3% to 2.6%
|
|
1.3% to 2.2%
|
|
1.3% to 1.7%
|
Weighted-average risk-free interest rate
|
1.8%
|
|
1.3%
|
|
1.7%
|
Dividend yield
|
2.4% to 3.0%
|
|
2.4% to 2.8%
|
|
2.5% to 2.8%
|
Weighted-average dividend yield
|
2.5%
|
|
2.6%
|
|
2.8%
|
|
Number of
Shares (In thousands) |
|
Weighted-
Average Exercise Price per Share |
|
Average
Remaining Contractual Life |
|
Aggregate
Intrinsic Value |
|||||
Options outstanding as of June 30, 2017
|
6,907
|
|
|
$
|
93
|
|
|
6 years
|
|
$
|
277
|
|
Granted
|
1,181
|
|
|
136
|
|
|
|
|
|
|||
Exercised
|
(901
|
)
|
|
80
|
|
|
|
|
|
|||
Canceled
|
(107
|
)
|
|
123
|
|
|
|
|
|
|||
Options outstanding as of June 30, 2018
|
7,080
|
|
|
$
|
101
|
|
|
6 years
|
|
$
|
240
|
|
|
|
|
|
|
|
|
|
|||||
Options vested as of June 30, 2018
|
4,366
|
|
|
$
|
88
|
|
|
5 years
|
|
$
|
205
|
|
|
Number of
Shares (In thousands) |
|
Weighted-Average
Grant Date Fair Value per Share |
|||
Restricted stock awards as of June 30, 2017
|
18
|
|
|
$
|
120
|
|
Granted
|
155
|
|
|
135
|
|
|
Vested
|
(10
|
)
|
|
110
|
|
|
Forfeited
|
(7
|
)
|
|
135
|
|
|
Restricted stock awards as of June 30, 2018
|
156
|
|
|
$
|
135
|
|
|
Number of
Shares (In thousands) |
|
Weighted-Average
Grant Date Fair Value per Share |
|||
Performance share awards as of June 30, 2017
|
862
|
|
|
$
|
102
|
|
Granted
|
236
|
|
|
135
|
|
|
Distributed
|
(360
|
)
|
|
88
|
|
|
Forfeited
|
(40
|
)
|
|
120
|
|
|
Performance share awards as of June 30, 2018
|
698
|
|
|
$
|
111
|
|
|
|
|
|
|||
Performance shares vested and deferred as of June 30, 2018
|
154
|
|
|
$
|
74
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Income from equity investees
|
$
|
(12
|
)
|
|
$
|
(19
|
)
|
|
$
|
(15
|
)
|
Loss (gain) on sale of assets and investments, net
|
4
|
|
|
(11
|
)
|
|
(11
|
)
|
|||
Interest income
|
(6
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|||
Asset impairment charges
|
1
|
|
|
23
|
|
|
10
|
|
|||
Amortization of trademarks and other intangible assets
|
11
|
|
|
10
|
|
|
8
|
|
|||
Foreign exchange transaction (gains) losses, net
|
3
|
|
|
(1
|
)
|
|
1
|
|
|||
Other
|
(4
|
)
|
|
8
|
|
|
5
|
|
|||
Total
|
$
|
(3
|
)
|
|
$
|
6
|
|
|
$
|
(7
|
)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
177
|
|
|
$
|
291
|
|
|
$
|
254
|
|
State
|
34
|
|
|
36
|
|
|
31
|
|
|||
Foreign
|
43
|
|
|
38
|
|
|
45
|
|
|||
Total current
|
254
|
|
|
365
|
|
|
330
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
(24
|
)
|
|
(29
|
)
|
|
11
|
|
|||
State
|
3
|
|
|
(2
|
)
|
|
1
|
|
|||
Foreign
|
(2
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|||
Total deferred
|
(23
|
)
|
|
(35
|
)
|
|
5
|
|
|||
Total
|
$
|
231
|
|
|
$
|
330
|
|
|
$
|
335
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
$
|
963
|
|
|
$
|
927
|
|
|
$
|
900
|
|
Foreign
|
91
|
|
|
106
|
|
|
83
|
|
|||
Total
|
$
|
1,054
|
|
|
$
|
1,033
|
|
|
$
|
983
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Statutory federal tax rate
|
28.1
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State taxes (net of federal tax benefits)
|
2.4
|
|
|
2.2
|
|
|
2.1
|
|
Tax differential on foreign earnings
|
1.2
|
|
|
(0.6
|
)
|
|
0.5
|
|
Federal domestic manufacturing deduction
|
(1.8
|
)
|
|
(2.6
|
)
|
|
(2.4
|
)
|
Change in valuation allowance
|
0.3
|
|
|
0.2
|
|
|
0.5
|
|
Federal excess tax benefits
|
(1.7
|
)
|
|
(2.0
|
)
|
|
—
|
|
Reversals of deferred taxes related to foreign unremitted earnings
|
(2.6
|
)
|
|
—
|
|
|
—
|
|
Remeasurement of deferred taxes
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
Other differences
|
(1.0
|
)
|
|
(0.3
|
)
|
|
(1.6
|
)
|
Effective tax rate
|
21.8
|
%
|
|
31.9
|
%
|
|
34.1
|
%
|
|
2018
|
|
2017
|
||||
Deferred tax assets
|
|
|
|
||||
Compensation and benefit programs
|
$
|
103
|
|
|
$
|
182
|
|
Net operating loss and tax credit carryforwards
|
86
|
|
|
52
|
|
||
Accruals and reserves
|
28
|
|
|
41
|
|
||
Basis difference related to Venture Agreement
|
19
|
|
|
30
|
|
||
Inventory costs
|
16
|
|
|
25
|
|
||
Other
|
25
|
|
|
54
|
|
||
Subtotal
|
277
|
|
|
384
|
|
||
Valuation allowance
|
(43
|
)
|
|
(40
|
)
|
||
Total deferred tax assets
|
234
|
|
|
344
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Fixed and intangible assets
|
(232
|
)
|
|
(311
|
)
|
||
Low-income housing partnerships
|
(17
|
)
|
|
(25
|
)
|
||
Unremitted foreign earnings
|
—
|
|
|
(7
|
)
|
||
Other
|
(19
|
)
|
|
(24
|
)
|
||
Total deferred tax liabilities
|
(268
|
)
|
|
(367
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
(34
|
)
|
|
$
|
(23
|
)
|
|
2018
|
|
2017
|
||||
Valuation allowance at beginning of year
|
$
|
(40
|
)
|
|
$
|
(37
|
)
|
Net decrease/(increase) for other foreign deferred tax assets
|
—
|
|
|
—
|
|
||
Net decrease/(increase) for foreign net operating loss carryforwards and tax credits
|
(3
|
)
|
|
(3
|
)
|
||
Valuation allowance at end of year
|
$
|
(43
|
)
|
|
$
|
(40
|
)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Unrecognized tax benefits at beginning of year
|
$
|
40
|
|
|
$
|
37
|
|
|
$
|
38
|
|
Gross increases - tax positions in prior periods
|
2
|
|
|
1
|
|
|
3
|
|
|||
Gross decreases - tax positions in prior periods
|
(1
|
)
|
|
(6
|
)
|
|
(3
|
)
|
|||
Gross increases - current period tax positions
|
8
|
|
|
9
|
|
|
8
|
|
|||
Gross decreases - current period tax positions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Lapse of applicable statute of limitations
|
(2
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|||
Settlements
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||
Unrecognized tax benefits at end of year
|
$
|
47
|
|
|
$
|
40
|
|
|
$
|
37
|
|
|
Retirement
Income |
|
Retirement
Health Care |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Change in benefit obligations:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation as of beginning of year
|
$
|
633
|
|
|
$
|
673
|
|
|
$
|
42
|
|
|
$
|
47
|
|
Service cost
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
23
|
|
|
22
|
|
|
2
|
|
|
2
|
|
||||
Actuarial loss (gain)
|
(21
|
)
|
|
(21
|
)
|
|
(2
|
)
|
|
(4
|
)
|
||||
Plan amendments
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Translation and other adjustments
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(43
|
)
|
|
(42
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||
Benefit obligation as of end of year
|
593
|
|
|
633
|
|
|
38
|
|
|
42
|
|
||||
Change in plan assets:
|
|
|
|
|
|
|
|
||||||||
Fair value of assets as of beginning of year
|
$
|
434
|
|
|
$
|
423
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
8
|
|
|
22
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
22
|
|
|
31
|
|
|
4
|
|
|
3
|
|
||||
Benefits paid
|
(43
|
)
|
|
(42
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||
Translation and other adjustments
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets as of end of year
|
420
|
|
|
434
|
|
|
—
|
|
|
—
|
|
||||
Accrued benefit cost, net funded status
|
$
|
(173
|
)
|
|
$
|
(199
|
)
|
|
$
|
(38
|
)
|
|
$
|
(42
|
)
|
|
ABO Exceeds the Fair Value of Plan Assets
|
||||||
|
2018
|
|
2017
|
||||
Projected benefit obligation
|
$
|
571
|
|
|
$
|
611
|
|
Accumulated benefit obligation
|
571
|
|
|
610
|
|
||
Fair value of plan assets
|
395
|
|
|
409
|
|
|
Retirement Income
|
|
Retirement Health Care
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Service cost
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
23
|
|
|
22
|
|
|
26
|
|
|
2
|
|
|
2
|
|
|
2
|
|
||||||
Expected return on plan assets
|
(19
|
)
|
|
(20
|
)
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of unrecognized items
|
10
|
|
|
11
|
|
|
10
|
|
|
(3
|
)
|
|
(2
|
)
|
|
(3
|
)
|
||||||
Total
|
$
|
15
|
|
|
$
|
14
|
|
|
$
|
20
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
Retirement
Income |
|
Retirement
Health Care |
||||
Net actuarial loss (gain)
|
$
|
242
|
|
|
$
|
(17
|
)
|
Prior service benefit
|
—
|
|
|
(3
|
)
|
||
Net deferred income tax (assets) liabilities
|
(91
|
)
|
|
7
|
|
||
Accumulated other comprehensive loss (income)
|
$
|
151
|
|
|
$
|
(13
|
)
|
|
Retirement
Income |
|
Retirement
Health Care |
||||
Net actuarial loss (gain) as of beginning of year
|
$
|
262
|
|
|
$
|
(16
|
)
|
Amortization during the year
|
(10
|
)
|
|
1
|
|
||
Loss (gain) during the year
|
(10
|
)
|
|
(2
|
)
|
||
Net actuarial loss (gain) as of end of year
|
$
|
242
|
|
|
$
|
(17
|
)
|
|
Retirement Income
|
|
Retirement Health Care
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Discount rate
|
4.10
|
%
|
|
3.70
|
%
|
|
4.01
|
%
|
|
3.66
|
%
|
Rate of compensation increase
|
2.87
|
%
|
|
2.83
|
%
|
|
n/a
|
|
|
n/a
|
|
|
Retirement Income
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Discount rate
|
3.70
|
%
|
|
3.42
|
%
|
|
4.20
|
%
|
Rate of compensation increase
|
2.83
|
%
|
|
2.92
|
%
|
|
3.37
|
%
|
Expected return on plan assets
|
4.43
|
%
|
|
4.73
|
%
|
|
4.34
|
%
|
|
|
|
|
|
|
|||
|
Retirement Health Care
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Discount rate
|
3.66
|
%
|
|
3.42
|
%
|
|
4.16
|
%
|
|
Retirement
Income |
|
Retirement
Health Care |
||||
2019
|
$
|
38
|
|
|
$
|
3
|
|
2020
|
52
|
|
|
3
|
|
||
2021
|
37
|
|
|
3
|
|
||
2022
|
37
|
|
|
3
|
|
||
2023
|
37
|
|
|
3
|
|
||
Fiscal years 2024 through 2028
|
190
|
|
|
14
|
|
|
% Target Allocation
|
|
% of Plan Assets
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
U.S. equity
|
11
|
%
|
|
11
|
%
|
|
11
|
%
|
|
11
|
%
|
International equity
|
12
|
%
|
|
12
|
%
|
|
12
|
%
|
|
12
|
%
|
Fixed income
|
74
|
%
|
|
74
|
%
|
|
74
|
%
|
|
73
|
%
|
Other
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
4
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
2018
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash equivalents
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Total assets in the fair value hierarchy
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
|
|
|
|
|
||||||
Common collective trusts measured at net asset value
|
|
|
|
|
|
||||||
Bond funds
|
|
|
|
|
$
|
299
|
|
||||
International equity funds
|
|
|
|
|
60
|
|
|||||
Domestic equity funds
|
|
|
|
|
44
|
|
|||||
Real estate fund
|
|
|
|
|
14
|
|
|||||
Total common collective trusts measured at net asset value
|
|
|
|
|
417
|
|
|||||
Total assets at fair value
|
|
|
|
|
$
|
420
|
|
|
2017
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash equivalents
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Total assets in the fair value hierarchy
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
|
|
|
|
|
||||||
Common collective trusts measured at net asset value
|
|
|
|
|
|
||||||
Bond funds
|
|
|
|
|
$
|
310
|
|
||||
International equity funds
|
|
|
|
|
64
|
|
|||||
Domestic equity funds
|
|
|
|
|
46
|
|
|||||
Real estate fund
|
|
|
|
|
12
|
|
|||||
Total common collective trusts measured at net asset value
|
|
|
|
|
432
|
|
|||||
Total assets at fair value
|
|
|
|
|
$
|
434
|
|
•
|
Cleaning
consists of laundry, home care and professional products marketed and sold in the United States. Products within this segment include laundry additives, including bleach products under the Clorox
®
brand and Clorox 2
®
stain fighter and color booster; home care products, primarily under the Clorox
®
, Formula 409
®
, Liquid-Plumr
®
, Pine-Sol
®
, S.O.S
®
and Tilex
®
brands; naturally derived products under the Green Works
®
brand; and professional cleaning, disinfecting and Food service products under the Clorox
®
, Dispatch
®
, HealthLink
®
, Clorox Healthcare
®
, Hidden Valley
®
, KC Masterpiece
®
, and Soy Vay
®
brands.
|
•
|
Household
consists of charcoal, bags, wraps and containers, cat litter and digestive health products marketed and sold in the United States. Products within this segment include charcoal products under the Kingsford
®
and Match Light
®
brands; bags, wraps and containers under the Glad
®
brand; cat litter products under the Fresh Step
®
, Scoop Away
®
and Ever Clean
®
brands; and digestive health products under the RenewLife
®
brand.
|
•
|
Lifestyle
consists of food products, water-filtration systems and filters, natural personal care products, and dietary supplements primarily marketed and sold in the United States. Products within this segment include dressings and sauces, primarily under the Hidden Valley
®
, KC Masterpiece
®
,
Kingsford
®
and Soy Vay
®
brands; water-filtration systems and filters under the Brita
®
brand; natural personal care products under the Burt’s Bees
®
brand; and dietary supplements under the Rainbow Light
®
, Natural Vitality
®
, and Neocell
®
brands.
|
•
|
International
consists of products sold outside the United States. Products within this segment include laundry, home care, water-filtration, digestive health products, charcoal and cat litter products, food products, bags, wraps and containers, natural personal care products and professional cleaning and disinfecting products, primarily under the Clorox
®
, Glad
®
, PinoLuz
®
, Ayudin
®
, Limpido
®
, Clorinda
®
, Poett
®
, Mistolin
®
, Lestoil
®
, Bon Bril
®
, Brita
®
, Green Works
®
, Pine-Sol
®
, Agua Jane
®
, Chux
®
, RenewLife
®
, Kingsford
®
, Fresh Step
®
, Scoop Away
®
, Ever Clean
®
, KC Masterpiece
®
, Hidden Valley
®
, Burt’s Bees
®
brands and Clorox Healthcare
®
brands.
|
|
Fiscal
Year |
|
Cleaning
|
|
Household
|
|
Lifestyle
|
|
International
|
|
Corporate
|
|
Total
Company |
||||||||||||
Net sales
|
2018
|
|
$
|
2,060
|
|
|
$
|
1,959
|
|
|
$
|
1,077
|
|
|
$
|
1,028
|
|
|
$
|
—
|
|
|
$
|
6,124
|
|
|
2017
|
|
2,002
|
|
|
1,961
|
|
|
1,000
|
|
|
1,010
|
|
|
—
|
|
|
5,973
|
|
||||||
|
2016
|
|
1,912
|
|
|
1,862
|
|
|
990
|
|
|
997
|
|
|
—
|
|
|
5,761
|
|
||||||
Earnings (losses) from continuing
operations before income taxes
|
2018
|
|
574
|
|
|
370
|
|
|
243
|
|
|
84
|
|
|
(217
|
)
|
|
1,054
|
|
||||||
|
2017
|
|
523
|
|
|
419
|
|
|
244
|
|
|
81
|
|
|
(234
|
)
|
|
1,033
|
|
||||||
|
2016
|
|
511
|
|
|
428
|
|
|
251
|
|
|
66
|
|
|
(273
|
)
|
|
983
|
|
||||||
Income from equity investees
|
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||
|
2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||||
|
2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||||
Total assets
|
2018
|
|
902
|
|
|
1,223
|
|
|
1,533
|
|
|
1,045
|
|
|
357
|
|
|
5,060
|
|
||||||
|
2017
|
|
881
|
|
|
1,103
|
|
|
902
|
|
|
1,060
|
|
|
627
|
|
|
4,573
|
|
||||||
Capital expenditures
|
2018
|
|
60
|
|
|
73
|
|
|
22
|
|
|
33
|
|
|
6
|
|
|
194
|
|
||||||
|
2017
|
|
76
|
|
|
82
|
|
|
30
|
|
|
37
|
|
|
6
|
|
|
231
|
|
||||||
|
2016
|
|
44
|
|
|
83
|
|
|
18
|
|
|
24
|
|
|
3
|
|
|
172
|
|
||||||
Depreciation and amortization
|
2018
|
|
49
|
|
|
65
|
|
|
23
|
|
|
24
|
|
|
5
|
|
|
166
|
|
||||||
|
2017
|
|
51
|
|
|
64
|
|
|
20
|
|
|
22
|
|
|
6
|
|
|
163
|
|
||||||
|
2016
|
|
61
|
|
|
60
|
|
|
19
|
|
|
21
|
|
|
4
|
|
|
165
|
|
||||||
Significant non-cash charges included in earnings (losses) from continuing operations before income taxes:
|
|||||||||||||||||||||||||
Stock-based compensation
|
2018
|
|
13
|
|
|
12
|
|
|
7
|
|
|
1
|
|
|
20
|
|
|
53
|
|
||||||
|
2017
|
|
16
|
|
|
15
|
|
|
9
|
|
|
2
|
|
|
9
|
|
|
51
|
|
||||||
|
2016
|
|
10
|
|
|
8
|
|
|
5
|
|
|
1
|
|
|
21
|
|
|
45
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Home Care products
|
26
|
%
|
|
25
|
%
|
|
24
|
%
|
Bags, wraps and containers
|
18
|
%
|
|
18
|
%
|
|
19
|
%
|
Laundry additives
|
15
|
%
|
|
15
|
%
|
|
16
|
%
|
Charcoal products
|
10
|
%
|
|
11
|
%
|
|
11
|
%
|
Food products
|
10
|
%
|
|
10
|
%
|
|
10
|
%
|
|
Fiscal
Year |
|
United
States |
|
Foreign
|
|
Total
Company |
||||||
Net sales
|
2018
|
|
$
|
5,135
|
|
|
$
|
989
|
|
|
$
|
6,124
|
|
|
2017
|
|
5,001
|
|
|
972
|
|
|
5,973
|
|
|||
|
2016
|
|
4,805
|
|
|
956
|
|
|
5,761
|
|
|||
Property, plant and equipment, net
|
2018
|
|
887
|
|
|
109
|
|
|
996
|
|
|||
|
2017
|
|
823
|
|
|
108
|
|
|
931
|
|
Dollars in millions, except market price and per share data
|
Quarters Ended
|
|
|
||||||||||||||||
|
September 30
|
|
December 31
|
|
March 31
|
|
June 30
|
|
Full Year
|
||||||||||
Fiscal year ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,500
|
|
|
$
|
1,416
|
|
|
$
|
1,517
|
|
|
$
|
1,691
|
|
|
$
|
6,124
|
|
Cost of products sold
|
$
|
827
|
|
|
$
|
807
|
|
|
$
|
868
|
|
|
$
|
947
|
|
|
$
|
3,449
|
|
Earnings from continuing operations
|
$
|
192
|
|
|
$
|
233
|
|
|
$
|
181
|
|
|
$
|
217
|
|
|
$
|
823
|
|
Earnings (losses) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net earnings
|
$
|
192
|
|
|
$
|
233
|
|
|
$
|
181
|
|
|
$
|
217
|
|
|
$
|
823
|
|
Net earnings (losses) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
1.49
|
|
|
$
|
1.81
|
|
|
$
|
1.39
|
|
|
$
|
1.69
|
|
|
$
|
6.37
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Basic net earnings per share
|
$
|
1.49
|
|
|
$
|
1.81
|
|
|
$
|
1.39
|
|
|
$
|
1.69
|
|
|
$
|
6.37
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
1.46
|
|
|
$
|
1.77
|
|
|
$
|
1.37
|
|
|
$
|
1.66
|
|
|
$
|
6.26
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Diluted net earnings per share
|
$
|
1.46
|
|
|
$
|
1.77
|
|
|
$
|
1.37
|
|
|
$
|
1.66
|
|
|
$
|
6.26
|
|
Dividends declared per share
|
$
|
0.84
|
|
|
$
|
0.84
|
|
|
$
|
0.96
|
|
|
$
|
0.96
|
|
|
$
|
3.60
|
|
Market price (NYSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
$
|
139.34
|
|
|
$
|
150.40
|
|
|
$
|
148.88
|
|
|
$
|
136.24
|
|
|
$
|
150.40
|
|
Low
|
127.00
|
|
|
124.09
|
|
|
123.64
|
|
|
113.57
|
|
|
113.57
|
|
|||||
Year-end
|
|
|
|
|
|
|
|
|
135.25
|
|
|||||||||
Fiscal year ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,443
|
|
|
$
|
1,406
|
|
|
$
|
1,477
|
|
|
$
|
1,647
|
|
|
$
|
5,973
|
|
Cost of products sold
|
$
|
803
|
|
|
$
|
777
|
|
|
$
|
827
|
|
|
$
|
895
|
|
|
$
|
3,302
|
|
Earnings from continuing operations
|
$
|
179
|
|
|
$
|
150
|
|
|
$
|
172
|
|
|
$
|
202
|
|
|
$
|
703
|
|
Earnings (losses) from discontinued operations, net of tax
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|||||
Net earnings
|
$
|
179
|
|
|
$
|
149
|
|
|
$
|
172
|
|
|
$
|
201
|
|
|
$
|
701
|
|
Net earnings (losses) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
1.39
|
|
|
$
|
1.16
|
|
|
$
|
1.34
|
|
|
$
|
1.56
|
|
|
$
|
5.45
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.02
|
)
|
|||||
Basic net earnings per share
|
$
|
1.39
|
|
|
$
|
1.16
|
|
|
$
|
1.34
|
|
|
$
|
1.55
|
|
|
$
|
5.43
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
1.36
|
|
|
$
|
1.14
|
|
|
$
|
1.31
|
|
|
$
|
1.53
|
|
|
$
|
5.35
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.02
|
)
|
|||||
Diluted net earnings per share
|
$
|
1.36
|
|
|
$
|
1.14
|
|
|
$
|
1.31
|
|
|
$
|
1.52
|
|
|
$
|
5.33
|
|
Dividends declared per share
|
$
|
0.80
|
|
|
$
|
0.80
|
|
|
$
|
0.80
|
|
|
$
|
0.84
|
|
|
$
|
3.24
|
|
Market price (NYSE)
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
$
|
140.47
|
|
|
$
|
124.70
|
|
|
$
|
139.30
|
|
|
$
|
141.76
|
|
|
$
|
141.76
|
|
Low
|
121.75
|
|
|
111.24
|
|
|
118.41
|
|
|
127.62
|
|
|
111.24
|
|
|||||
Year-end
|
|
|
|
|
|
|
|
|
133.24
|
|
|
Years ended June 30
|
||||||||||||||||||
Dollars in millions, except per share data
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
OPERATIONS
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
6,124
|
|
|
$
|
5,973
|
|
|
$
|
5,761
|
|
|
$
|
5,655
|
|
|
$
|
5,514
|
|
Gross profit
|
2,675
|
|
|
2,671
|
|
|
2,598
|
|
|
2,465
|
|
|
2,356
|
|
|||||
Earnings from continuing operations
|
$
|
823
|
|
|
$
|
703
|
|
|
$
|
648
|
|
|
$
|
606
|
|
|
$
|
579
|
|
(Losses) earnings from discontinued operations, net of tax
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(26
|
)
|
|
(21
|
)
|
|||||
Net earnings
|
$
|
823
|
|
|
$
|
701
|
|
|
$
|
648
|
|
|
$
|
580
|
|
|
$
|
558
|
|
COMMON STOCK
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
6.37
|
|
|
$
|
5.45
|
|
|
$
|
5.01
|
|
|
$
|
4.65
|
|
|
$
|
4.47
|
|
Diluted
|
6.26
|
|
|
5.35
|
|
|
4.92
|
|
|
4.57
|
|
|
4.39
|
|
|||||
Dividends declared per share
|
3.60
|
|
|
3.24
|
|
|
3.11
|
|
|
2.99
|
|
|
2.87
|
|
|||||
|
As of June 30
|
||||||||||||||||||
Dollars in millions
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
OTHER DATA
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
(1)
|
$
|
5,060
|
|
|
$
|
4,573
|
|
|
$
|
4,510
|
|
|
$
|
4,154
|
|
|
$
|
4,251
|
|
Long-term debt
(1)
|
2,284
|
|
|
1,391
|
|
|
1,789
|
|
|
1,786
|
|
|
1,588
|
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||||||
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
Description
|
|
Balance at
beginning of period |
|
Charged to
costs and expenses |
|
Charged to other accounts
|
|
Deductions
|
|
Balance at
end of period |
||||||||||
Allowance for doubtful accounts
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended June 30, 2018
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
Year ended June 30, 2017
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(3
|
)
|
|||||
Year ended June 30, 2016
|
|
(4
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
LIFO allowances
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended June 30, 2018
|
|
$
|
(26
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(27
|
)
|
Year ended June 30, 2017
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(26
|
)
|
|||||
Year ended June 30, 2016
|
|
(34
|
)
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
|
(32
|
)
|
|||||
Valuation allowance on deferred tax assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended June 30, 2018
|
|
$
|
(40
|
)
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(43
|
)
|
Year ended June 30, 2017
|
|
(37
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|||||
Year ended June 30, 2016
|
|
(34
|
)
|
|
(5
|
)
|
|
—
|
|
|
2
|
|
|
(37
|
)
|
Dollars in millions
|
|
FY18
|
|
FY17
|
|
FY16
|
||||||
Earnings from continuing operations before income taxes
|
|
$
|
1,054
|
|
|
$
|
1,033
|
|
|
$
|
983
|
|
Add back:
|
|
|
|
|
|
|
||||||
Non-cash U.S. GAAP restructuring and intangible asset impairment charges
|
|
2
|
|
|
4
|
|
|
9
|
|
|||
Interest expense
|
|
85
|
|
|
88
|
|
|
88
|
|
|||
Earnings from continuing operations before income taxes,
non-cash U.S. GAAP restructuring and intangible asset impairment charges, and interest expense
|
|
$
|
1,141
|
|
|
$
|
1,125
|
|
|
$
|
1,080
|
|
Less: Income taxes on earnings from continuing operations before
income taxes, non-cash U.S. GAAP restructuring and intangible asset impairment charges and interest expense
(2)
|
|
249
|
|
|
359
|
|
|
368
|
|
|||
Adjusted after tax profit
|
|
892
|
|
|
766
|
|
|
712
|
|
|||
Average capital employed
(3)
|
|
2,977
|
|
|
2,680
|
|
|
2,463
|
|
|||
Less: Capital charge
(4)
|
|
268
|
|
|
241
|
|
|
222
|
|
|||
Economic profit
(1)
(Adjusted after tax profit less capital charge)
|
|
$
|
624
|
|
|
$
|
525
|
|
|
$
|
490
|
|
Dollars in millions
|
|
FY18
|
|
FY17
|
|
FY16
|
||||||
Total assets
(5)
|
|
$
|
5,060
|
|
|
$
|
4,573
|
|
|
$
|
4,510
|
|
Less:
|
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities
(6)
|
|
1,000
|
|
|
1,002
|
|
|
1,032
|
|
|||
Income taxes payable
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other liabilities
(6)
|
|
778
|
|
|
770
|
|
|
784
|
|
|||
Deferred income taxes
|
|
72
|
|
|
61
|
|
|
82
|
|
|||
Non-interest bearing liabilities
|
|
1,850
|
|
|
1,833
|
|
|
1,898
|
|
|||
Total capital employed
|
|
3,210
|
|
|
2,740
|
|
|
2,612
|
|
|||
After tax non-cash U.S. GAAP restructuring
and intangible asset impairment charges
|
|
1
|
|
|
2
|
|
|
6
|
|
|||
Adjusted capital employed
|
|
$
|
3,211
|
|
|
$
|
2,742
|
|
|
$
|
2,618
|
|
Average capital employed
|
|
$
|
2,977
|
|
|
$
|
2,680
|
|
|
$
|
2,463
|
|