(Mark One) | ||
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended September 30, 2018. | ||
OR | ||
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 31-0595760 |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) |
incorporation or organization) | |
1221 Broadway | |
Oakland, California | 94612-1888 |
(Address of principal executive offices) | (Zip code) |
(510) 271-7000 |
(Registrant's telephone number, including area code) |
(Former name, former address and former fiscal year, if changed since last report) |
_________________________ |
Large accelerated filer þ | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller Reporting Company ¨ | Emerging Growth Company ¨ |
Three Months Ended | |||||||||
9/30/2018 | 9/30/2017 | ||||||||
Net sales | $ | 1,563 | $ | 1,500 | |||||
Cost of products sold | 885 | 827 | |||||||
Gross profit | 678 | 673 | |||||||
Selling and administrative expenses | 212 | 204 | |||||||
Advertising costs | 139 | 134 | |||||||
Research and development costs | 32 | 32 | |||||||
Interest expense | 24 | 21 | |||||||
Other (income) expense, net | 3 | 3 | |||||||
Earnings from continuing operations before income taxes | 268 | 279 | |||||||
Income taxes on continuing operations | 58 | 87 | |||||||
Earnings from continuing operations | 210 | 192 | |||||||
Earnings (losses) from discontinued operations, net of tax | — | — | |||||||
Net earnings | $ | 210 | $ | 192 | |||||
Net earnings (losses) per share | |||||||||
Basic | |||||||||
Continuing operations | $ | 1.65 | $ | 1.49 | |||||
Discontinued operations | — | — | |||||||
Basic net earnings per share | $ | 1.65 | $ | 1.49 | |||||
Diluted | |||||||||
Continuing operations | $ | 1.62 | $ | 1.46 | |||||
Discontinued operations | — | — | |||||||
Diluted net earnings per share | $ | 1.62 | $ | 1.46 | |||||
Weighted average shares outstanding (in thousands) | |||||||||
Basic | 127,803 | 129,019 | |||||||
Diluted | 129,946 | 131,509 | |||||||
Dividends per share declared | $ | 0.96 | $ | 0.84 | |||||
Comprehensive income | $ | 210 | $ | 211 |
9/30/2018 | 6/30/2018 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 162 | $ | 131 | |||
Receivables, net | 568 | 600 | |||||
Inventories, net | 519 | 506 | |||||
Prepaid expenses and other current assets | 68 | 74 | |||||
Total current assets | 1,317 | 1,311 | |||||
Property, plant and equipment, net of accumulated depreciation and amortization of $2,084 and $2,061, respectively | 988 | 996 | |||||
Goodwill | 1,602 | 1,602 | |||||
Trademarks, net | 794 | 795 | |||||
Other intangible assets, net | 131 | 134 | |||||
Other assets | 226 | 222 | |||||
Total assets | $ | 5,058 | $ | 5,060 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities | |||||||
Notes and loans payable | $ | 280 | $ | 199 | |||
Accounts payable and accrued liabilities | 947 | 1,001 | |||||
Income taxes payable | 8 | — | |||||
Total current liabilities | 1,235 | 1,200 | |||||
Long-term debt | 2,285 | 2,284 | |||||
Other liabilities | 793 | 778 | |||||
Deferred income taxes | 68 | 72 | |||||
Total liabilities | 4,381 | 4,334 | |||||
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 September 30, 2018 and June 30, 2018; and 127,605,069 and 127,982,767 shares outstanding as of September 30, 2018 and June 30, 2018, respectively | 159 | 159 | |||||
Additional paid-in capital | 984 | 975 | |||||
Retained earnings | 2,883 | 2,797 | |||||
Treasury shares, at cost: 31,136,392 and 30,758,694 shares as of September 30, 2018 and June 30, 2018, respectively | (2,802 | ) | (2,658 | ) | |||
Accumulated other comprehensive net (loss) income | (547 | ) | (547 | ) | |||
Stockholders’ equity | 677 | 726 | |||||
Total liabilities and stockholders’ equity | $ | 5,058 | $ | 5,060 |
Three Months Ended | |||||||
9/30/2018 | 9/30/2017 | ||||||
(As Adjusted*) | |||||||
Operating activities: | |||||||
Net earnings | $ | 210 | $ | 192 | |||
Deduct: Losses from discontinued operations, net of tax | — | — | |||||
Earnings from continuing operations | 210 | 192 | |||||
Adjustments to reconcile earnings from continuing operations to net cash provided by continuing operations: | |||||||
Depreciation and amortization | 44 | 40 | |||||
Stock-based compensation | 8 | 12 | |||||
Deferred income taxes | (3 | ) | (4 | ) | |||
Other | 16 | 18 | |||||
Changes in: | |||||||
Receivables, net | 33 | 35 | |||||
Inventories, net | (13 | ) | (10 | ) | |||
Prepaid expenses and other current assets | (13 | ) | (6 | ) | |||
Accounts payable and accrued liabilities | (52 | ) | (89 | ) | |||
Income taxes payable | 29 | 71 | |||||
Net cash provided by continuing operations | 259 | 259 | |||||
Net cash provided by (used for) discontinued operations | — | 1 | |||||
Net cash provided by operations | 259 | 260 | |||||
Investing activities: | |||||||
Capital expenditures | (36 | ) | (49 | ) | |||
Other | — | 13 | |||||
Net cash used for investing activities | (36 | ) | (36 | ) | |||
Financing activities: | |||||||
Notes and loans payable, net | 80 | (391 | ) | ||||
Long-term debt borrowings, net of issuance costs | — | 396 | |||||
Treasury stock purchased | (203 | ) | (66 | ) | |||
Cash dividends paid | (122 | ) | (108 | ) | |||
Issuance of common stock for employee stock plans and other | 53 | (7 | ) | ||||
Net cash used for financing activities | (192 | ) | (176 | ) | |||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | — | 4 | |||||
Net increase in cash, cash equivalents, and restricted cash | 31 | 52 | |||||
Cash, cash equivalents, and restricted cash: | |||||||
Beginning of period | 134 | 419 | |||||
End of period | $ | 165 | $ | 471 |
Nutranext | |||
Goodwill ($309 in Lifestyle reportable segment and $102 in Household reportable segment) | $ | 411 | |
Trademarks | 143 | ||
Customer relationships | 75 | ||
Property, plant and equipment | 49 | ||
Working capital, net | 23 | ||
Deferred income taxes | (20 | ) | |
Consideration paid | $ | 681 |
9/30/2018 | 6/30/2018 | ||||||
Finished goods | $ | 408 | $ | 395 | |||
Raw materials and packaging | 135 | 129 | |||||
Work in process | 7 | 9 | |||||
LIFO allowances | (31 | ) | (27 | ) | |||
Total | $ | 519 | $ | 506 |
Gains (losses) recognized in Other comprehensive income | |||||||
Three Months Ended | |||||||
9/30/2018 | 9/30/2017 | ||||||
Commodity purchase derivative contracts | $ | 4 | $ | 2 | |||
Foreign exchange derivative contracts | — | (1 | ) | ||||
Interest rate derivative contracts | — | 2 | |||||
Total | $ | 4 | $ | 3 |
Gains (losses) reclassified from Accumulated other comprehensive net (loss) income and recognized in Net earnings | |||||||
Three Months Ended | |||||||
9/30/2018 | 9/30/2017 | ||||||
Commodity purchase derivative contracts | $ | 4 | $ | — | |||
Foreign exchange derivative contracts | 1 | (1 | ) | ||||
Interest rate derivative contracts | (2 | ) | (2 | ) | |||
Total | $ | 3 | $ | (3 | ) |
9/30/2018 | 6/30/2018 | ||||||||||||||||||
Balance sheet classification | Fair value hierarchy level | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||
Assets | |||||||||||||||||||
Investments including money market funds | Cash and cash equivalents (a) | 1 | $ | 40 | $ | 40 | $ | 24 | $ | 24 | |||||||||
Time deposits | Cash and cash equivalents (a) | 2 | 32 | 32 | 23 | 23 | |||||||||||||
Commodity purchase swaps contracts | Prepaid expenses and other current assets | 2 | 4 | 4 | 3 | 3 | |||||||||||||
Foreign exchange forward contracts | Prepaid expenses and other current assets | 2 | 1 | 1 | 2 | 2 | |||||||||||||
Trust assets for nonqualified deferred compensation plans | Other assets | 1 | 93 | 93 | 86 | 86 | |||||||||||||
$ | 170 | $ | 170 | $ | 138 | $ | 138 | ||||||||||||
Liabilities | |||||||||||||||||||
Notes and loans payable | Notes and loans payable (b) | 2 | $ | 280 | $ | 280 | $ | 199 | $ | 199 | |||||||||
Commodity purchase futures contracts | Accounts payable and accrued liabilities | 1 | 1 | 1 | 1 | 1 | |||||||||||||
Current maturities of long-term debt and Long-term debt | Current maturities of long- term debt and Long-term debt (c) | 2 | 2,285 | 2,269 | 2,284 | 2,269 | |||||||||||||
$ | 2,566 | $ | 2,550 | $ | 2,484 | $ | 2,469 |
(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 loans payable is composed of U.S. commercial paper and/or other similar short-term debt 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. |
Three Months Ended | ||||
9/30/2018 | 9/30/2017 | |||
Basic | 127,803 | 129,019 | ||
Dilutive effect of stock options and other | 2,143 | 2,490 | ||
Diluted | 129,946 | 131,509 | ||
Antidilutive stock options and other | 967 | 1,174 |
Three Months Ended | |||||||||||||
9/30/2018 | 9/30/2017 | ||||||||||||
Amount | Shares (in thousands) | Amount | Shares (in thousands) | ||||||||||
Open-market purchase program | $ | 78 | 591 | $ | — | — | |||||||
Evergreen Program | 120 | 832 | 60 | 450 |
Three Months Ended | ||||||||
9/30/2018 | 9/30/2017 | |||||||
Earnings from continuing operations | $ | 210 | $ | 192 | ||||
Earnings (losses) from discontinued operations, net of tax | — | — | ||||||
Net earnings | 210 | 192 | ||||||
Other comprehensive income (loss), net of tax: | ||||||||
Foreign currency translation adjustments | (2 | ) | 14 | |||||
Net unrealized gains (losses) on derivatives | 1 | 5 | ||||||
Pension and postretirement benefit adjustments | 1 | — | ||||||
Total other comprehensive income (loss), net of tax | — | 19 | ||||||
Comprehensive income | $ | 210 | $ | 211 |
Foreign currency translation adjustments | Net unrealized gains (losses) on derivatives | Pension and postretirement benefit adjustments | Accumulated other comprehensive (loss) income | ||||||||||||
Balance as of June 30, 2017 | $ | (356 | ) | $ | (37 | ) | $ | (150 | ) | $ | (543 | ) | |||
Other comprehensive income (loss) before reclassifications | 16 | 3 | — | 19 | |||||||||||
Amounts reclassified from Accumulated other comprehensive net (loss) income | — | 3 | 1 | 4 | |||||||||||
Income tax benefit (expense) | (2 | ) | (1 | ) | (1 | ) | (4 | ) | |||||||
Net current period other comprehensive income (loss) | 14 | 5 | — | 19 | |||||||||||
Balance as of September 30, 2017 | $ | (342 | ) | $ | (32 | ) | $ | (150 | ) | $ | (524 | ) | |||
Balance as of June 30, 2018 | $ | (384 | ) | $ | (25 | ) | $ | (138 | ) | $ | (547 | ) | |||
Other comprehensive income (loss) before reclassifications | (2 | ) | 4 | — | 2 | ||||||||||
Amounts reclassified from Accumulated other comprehensive net (loss) income | — | (3 | ) | 2 | (1 | ) | |||||||||
Income tax benefit (expense) | — | — | (1 | ) | (1 | ) | |||||||||
Net current period other comprehensive income (loss) | (2 | ) | 1 | 1 | — | ||||||||||
Balance as of September 30, 2018 | $ | (386 | ) | $ | (24 | ) | $ | (137 | ) | $ | (547 | ) |
Three Months Ended | |||||||
9/30/2018 | 9/30/2017 | ||||||
Service cost | $ | — | $ | — | |||
Interest cost | 6 | 6 | |||||
Expected return on plan assets (1) | (4 | ) | (5 | ) | |||
Amortization of unrecognized items | 2 | 3 | |||||
Total | $ | 4 | $ | 4 |
Net sales | |||||||
Three Months Ended | |||||||
9/30/2018 | 9/30/2017 | ||||||
Cleaning | $ | 571 | $ | 559 | |||
Household | 442 | 441 | |||||
Lifestyle | 309 | 246 | |||||
International | 241 | 254 | |||||
Corporate | — | — | |||||
Total | $ | 1,563 | $ | 1,500 | |||
Earnings (losses) from continuing operations before income taxes | |||||||
Three Months Ended | |||||||
9/30/2018 | 9/30/2017 | ||||||
Cleaning | $ | 180 | $ | 172 | |||
Household | 59 | 73 | |||||
Lifestyle | 62 | 64 | |||||
International | 28 | 23 | |||||
Corporate | (61 | ) | (53 | ) | |||
Total | $ | 268 | $ | 279 |
• | 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 and 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 and 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. |
Three Months Ended | ||||||||||
9/30/2018 | 9/30/2017 | % Change | ||||||||
Net sales | $ | 1,563 | $ | 1,500 | 4 | % |
Three Months Ended | ||||||||||
9/30/2018 | 9/30/2017 | % Change | ||||||||
Gross profit | $ | 678 | $ | 673 | 1 | % | ||||
Gross margin | 43.4 | % | 44.9 | % |
Three Months Ended | ||||||||||||||||
% of Net Sales | ||||||||||||||||
9/30/2018 | 9/30/2017 | % Change | 9/30/2018 | 9/30/2017 | ||||||||||||
Selling and administrative expenses | $ | 212 | $ | 204 | 4 | % | 13.6 | % | 13.6 | % | ||||||
Advertising costs | 139 | 134 | 4 | 8.9 | 8.9 | |||||||||||
Research and development costs | 32 | 32 | — | 2.0 | 2.1 |
Three Months Ended | |||||||
9/30/2018 | 9/30/2017 | ||||||
Interest expense | $ | 24 | $ | 21 | |||
Other (income) expense, net | 3 | 3 | |||||
Effective tax rate on earnings | 21.5 | % | 31.3 | % |
Three Months Ended | |||||||||||
9/30/2018 | 9/30/2017 | % Change | |||||||||
Diluted net earnings per share from continuing operations | $ | 1.62 | $ | 1.46 | 11 | % |
Three Months Ended | ||||||||||
9/30/2018 | 9/30/2017 | % Change | ||||||||
Net sales | $ | 571 | $ | 559 | 2 | % | ||||
Earnings from continuing operations before income taxes | 180 | 172 | 5 |
Three Months Ended | ||||||||||
9/30/2018 | 9/30/2017 | % Change | ||||||||
Net sales | $ | 442 | $ | 441 | — | % | ||||
Earnings from continuing operations before income taxes | 59 | 73 | (19 | ) |
Three Months Ended | ||||||||||
9/30/2018 | 9/30/2017 | % Change | ||||||||
Net sales | $ | 309 | $ | 246 | 26 | % | ||||
Earnings from continuing operations before income taxes | 62 | 64 | (3 | ) |
Three Months Ended | ||||||||||
9/30/2018 | 9/30/2017 | % Change | ||||||||
Net sales | $ | 241 | $ | 254 | (5 | )% | ||||
Earnings from continuing operations before income taxes | 28 | 23 | 22 |
Three Months Ended | ||||||||||
9/30/2018 | 9/30/2017 | % Change | ||||||||
Losses from continuing operations before income taxes | $ | (61 | ) | $ | (53 | ) | 15 | % |
Three Months Ended | |||||||
9/30/2018 | 9/30/2017 | ||||||
Net cash provided by continuing operations | $ | 259 | $ | 259 | |||
Net cash used for investing activities | (36 | ) | (36 | ) | |||
Net cash used for financing activities | (192 | ) | (176 | ) |
Twelve Months Ended | |||
9/30/2018 | |||
Earnings from continuing operations | $ | 841 | |
Add back: | |||
Interest expense | 88 | ||
Income tax expense | 202 | ||
Depreciation and amortization | 170 | ||
Non-cash asset impairment charges | 1 | ||
Deduct: | |||
Interest income | (6 | ) | |
Consolidated EBITDA | $ | 1,296 | |
Interest expense | $ | 88 | |
Interest Coverage ratio | 14.7 |
Three Months Ended | |||||||||||||
9/30/2018 | 9/30/2017 | ||||||||||||
Amount | Shares (in thousands) | Amount | Shares (in thousands) | ||||||||||
Open-market purchase program | $ | 78 | 591 | $ | — | — | |||||||
Evergreen Program | 120 | 832 | 60 | 450 |
Three Months Ended | ||||||||
9/30/2018 | 9/30/2017 | |||||||
Dividends per share declared | $ | 0.96 | $ | 0.84 | ||||
Total dividends paid | 122 | 108 |
• | 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 prices 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 the Company's use of and 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 devaluation, 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 The Procter & Gamble Company's (P&G) interest in the Glad® business such as the significant increases over fiscal year 2018 primarily due to the Tax Act and the 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 final 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. |
[a] | [b] | [c] | [d] | ||||||||
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share (2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||
July 1 to 31, 2018 | 646,953 | $ | 132.59 | 646,953 | $1,827 million | ||||||
August 1 to 31, 2018 | 719,774 | 144.73 | 719,774 | $1,827 million | |||||||
September 1 to 30, 2018 | 55,991 | 149.72 | 55,991 | $1,827 million | |||||||
Total | 1,422,718 | $ | 139.40 | 1,422,718 |
(1) | Of the shares purchased in July 2018, 590,977 shares were acquired pursuant to the Company’s 2018 Open-Market Program and 55,976 shares were acquired pursuant to the Company's Evergreen Program. All shares purchased in August 2018 and September 2018 were acquired pursuant to the Evergreen Program. |
(2) | Average price paid per share in the period includes commission. |
101 | The following materials from The Clorox Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2018, are formatted in eXtensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Earnings and Comprehensive Income, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated Financial Statements. |
THE CLOROX COMPANY | ||
(Registrant) | ||
DATE: October 31, 2018 | BY | /s/ Jeffrey R. Baker |
Jeffrey R. Baker Vice President – Chief Accounting Officer and Corporate Controller |
GRANTEE | <<1) Optionee ID>> |
TOTAL RESTRICTED UNITS AWARDED | <<4) Shares Granted>> |
DATE OF AWARD | <<8) Grant Date>> |
PERIOD OF RESTRICTION | 100% vests 36 months from the date of award |
1. | Grant of Units. The Company hereby grants to the Grantee the Units set forth above, subject to the terms, definitions and provisions of the Plan and this Agreement. All terms, provisions, and conditions applicable to the Units set forth in the Plan and not set forth herein are incorporated by reference. To the extent any provision hereof is inconsistent with a provision of the Plan, the provisions of the Plan will govern. All capitalized terms that are used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. |
2. | Nature and Settlement of Award. The Units represent an unfunded, unsecured promise by the Company to issue Shares. Units will be settled in Shares on a one Share for one Unit basis, rounded down to the nearest whole Share, less any Shares withheld in accordance with the provisions of Section 4 of this Agreement. Settlement shall occur as soon as practicable after the Period of Restriction lapses as provided in the Summary of Restricted Stock Unit Award above, but in any event, within the period ending on the later to occur of the date that is 2 ½ months from the end of (1) the Grantee’s tax year that includes the date of the lapse of the Period of Restriction, or (2) the Company’s tax year that includes the date of the lapse of the Period of Restriction (which payment schedule is intended to comply with the “short-term deferral” exemption from the application of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)). Although the Units shall be vested within the meaning of Section 83 of the Internal Revenue Code since no substantial risk of forfeiture exists after the Period of Restriction lapses, the Units will not be earned until the Grantee has fulfilled all of the conditions precedent set forth in this Agreement, including, but not limited to, the obligations set forth in Section 9(b), 9(c), 9(d), 9(e) and Section 10, and the Grantee shall have no right to retain the Shares or the value thereof upon vesting or settlement of the Units until all such conditions precedent have been satisfied. |
3. | Dividend Equivalents. No Dividend Equivalents shall be paid to the Grantee prior to the lapse of the Period of Restriction. Rather, such Dividend Equivalent payments will accrue and be notionally credited to the Grantee’s RSU account and paid out in the form of additional Shares after the lapse of the Period of Restriction, within the time period described in Section 2 above. |
4. | Taxes. Pursuant to Section 16 of the Plan, the Committee shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy any applicable tax withholding requirements applicable to this Award. The Committee may condition the issuance of Shares in settlement of Units upon the Grantee’s satisfaction of such withholding obligations. The Grantee may elect to satisfy all or part of such withholding requirement by tendering previously-owned Shares or by having the |
5. | Termination of Employment or Service. |
a. | If the Grantee’s employment or service with the Company and its Subsidiaries is terminated for any reason, any Units (the “Unvested Units”) for which the Period of Restriction has not lapsed before such termination of employment or service and/or any Dividend Equivalents related thereto shall be forfeited. Notwithstanding the above, if the Grantee’s termination of employment or service is due to death or Disability, the Units shall become 100% vested and the Period of Restriction on the Units shall lapse and all Dividend Equivalents related thereto shall become immediately vested and payable as of such termination date. |
b. | Definition of “Disability.” For purposes of this Agreement, the Grantee’s employment shall be deemed to have terminated due to the Grantee’s Disability if the Grantee is entitled to long-term disability benefits under the Company’s long-term disability plan or policy, as in effect on the date of termination of the Grantee’s employment. |
6. | Authorization to Return Forfeited Units. The Grantee authorizes the Company or its designee to return to the Company all Units and related Dividend Equivalents and Shares subject thereto which are forfeited along with any cash or other property held with respect to or in substitution of such Units, related Dividend Equivalents and/or Shares. Any such action shall comply with all applicable provisions of this Agreement or the Plan. |
7. | Transferability of Units. Unless otherwise determined by the Committee, Units shall not be transferable by the Grantee other than by will or by the laws of descent or distribution. For avoidance of doubt, Shares issued to the Grantee in settlement of Units pursuant to Section 2 of this Agreement shall not be subject to any of the foregoing transferability restrictions. |
8. | Change in Control. Upon the occurrence of a Change in Control, unless otherwise specifically prohibited under Applicable Laws or by the rules and regulations of any governing governmental agencies or national securities exchanges, any Unvested Units and related Dividend Equivalents shall become 100% vested and the Period of Restriction for the Units and related Dividend Equivalents shall lapse, unless the Units are assumed, converted or replaced by the continuing entity; provided, however, that in the event the Grantee’s employment is terminated without Cause or by the Grantee for Good Reason upon or within twenty-four (24) months following consummation of a Change in Control, the Period of Restriction on any replacement awards shall lapse and all Dividend Equivalents related thereto shall become immediately payable. For purposes of this Agreement, the term “Good Reason” shall have the meaning set forth in any employment agreement or severance agreement or policy applicable to the Grantee. If the Grantee is not a party to any agreement or covered by a policy in which a definition of “Good Reason” is provided, then the following definition shall apply: |
a. | The assignment to the Grantee of any duties inconsistent in any material respect with the Grantee’s position (including offices, titles and reporting requirements), authority, duties or responsibilities as they existed at any time during the 120-day period immediately preceding the Change in Control, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Grantee; or |
b. | Any material reduction by the Company of the Grantee’s Base Salary or bonus target, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Grantee; or |
c. | The Company requires the Grantee to be based at any office or location which increases his commute by more than 50 miles from his commute immediately prior to the Change in Control. |
9. | Protection of Trade Secrets and Limitations on Exercise. |
a. | Definitions. |
i. | “Affiliated Company” means any organization controlling, controlled by or under common control with the Company. |
ii. | “Confidential Information” means the Company’s technical or business or personnel information not readily available to the public or generally known in the trade, including inventions, developments, trade secrets and other confidential information, knowledge, data and know-how of the Company or any Affiliated Company, whether or not they originated with the Grantee, or information which the Company or any Affiliated Company received from third parties under an obligation of confidentiality. |
iii. | “Conflicting Product” means any product, process, machine, or service of any person or organization, other than the Company or any Affiliated Company, in existence or under development that (1) resembles or competes with a product, process, machine, or service upon or with which the Grantee shall have worked during the two years prior to the Grantee’s termination of employment with the Company or any Affiliated Company or (2) with respect to which during that period of time the Grantee, as a result of his/her job performance and duties, shall have acquired knowledge of Confidential Information, and whose use or marketability could be enhanced by application to it of Confidential Information. For purposes of this section, it shall be conclusively presumed that the Grantee has knowledge of information to which s/he has been directly exposed through actual receipt or review of memorandum or documents containing such information or through actual attendance at meetings at which such information was discussed or disclosed. |
iv. | “Conflicting Organization” means any person or organization that is engaged in or about to become engaged in research on or development, production, marketing or selling of a Conflicting Product. |
b. | Right to Retain Units/Shares Contingent on Protection of Confidential Information. In partial consideration for the award of these Units, the Grantee agrees that at all times, both during and after the term of the Grantee’s employment with the Company or any Affiliated Company, to hold in the strictest confidence, and not to use (except for the benefit of the Company at the Company’s direction) or disclose (except for the benefit of the Company at the Company’s direction), regardless of when disclosed to the Grantee, any and all Confidential Information of the Company or any Affiliated Company. The Grantee understands that for purposes of this Section 9(b), Confidential Information further includes, but is not limited to, information pertaining to any aspect of the business of the Company or any Affiliated Company which is either information not known (or known as a result of a wrongful act of the Grantee or of others who were under confidentiality obligations as to the item or items involved) by actual or potential competitors of the Company or other third parties not under confidentiality obligations to the Company. If, prior to the |
c. | No Interference with Customers or Suppliers. In partial consideration for the award of these Units, in order to forestall the disclosure or use of Confidential Information as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company and to promote fair competition, the Grantee agrees that the Grantee’s right to receive the Shares upon settlement of the Units is contingent upon the Grantee refraining, during the Period of Restriction and for a period of one (1) year after the settlement of any of the Units, for himself/herself or any third party, directly or indirectly, from using Confidential Information to (1) divert or attempt to divert from the Company (or any Affiliated Company) any business of any kind in which it is engaged, or (2) intentionally solicit its customers with which it has a contractual relationship as to Conflicting Products, or interfere with the contractual relationship with any of its suppliers or customers (collectively, “Interfere”). If, during the Period of Restriction or at any time within one (1) year after the settlement of any of the Units, the Grantee breaches his/her obligation not to Interfere, the Grantee’s right to the Shares upon settlement of the Units shall not have been earned and the Units, whether vested or not, will be immediately cancelled, and the Grantee shall immediately return to the Company the Shares issued in settlement of the Units or the pre-tax income derived from any disposition of such Shares. For avoidance of doubt, the term “Interfere” shall not include any advertisement of Conflicting Products through the use of media intended to reach a broad public audience (such as television, cable or radio broadcasts, or newspapers or magazines) or the broad distribution of coupons through the use of direct mail or through independent retail outlets. THE GRANTEE UNDERSTANDS THAT THIS PARAGRAPH IS NOT INTENDED TO AND DOES NOT PROHIBIT THE CONDUCT DESCRIBED, BUT PROVIDES FOR THE CANCELLATION OF THE UNITS AND A RETURN TO THE COMPANY OF THE SHARES OR THE GROSS TAXABLE PROCEEDS OF THE SHARES IF THE GRANTEE SHOULD CHOOSE TO VIOLATE THIS “NO INTERFERENCE WITH CUSTOMERS OR SUPPLIERS” PROVISION DURING THE PERIOD OF RESTRICTION OR WITHIN ONE (1) YEAR AFTER THE SETTLEMENT OF ANY OF THE UNITS. |
d. | No Solicitation of Employees. In partial consideration for the award of these Units, in order to forestall the disclosure or use of Confidential Information, as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company, and to promote fair competition, the Grantee agrees that the Grantee’s right to receive the Shares upon settlement of the Units is contingent upon the Grantee refraining, during the Period of Restriction and for a period of one (1) year after the settlement of any of the Units, for himself/herself or any third party, directly or indirectly, from soliciting for employment any person employed by the Company, or by any Affiliated Company, during the period of the solicited person’s employment and for a period of one (1) year after the termination of the solicited person’s employment with the Company or any Affiliated Company (collectively “Solicit”). If, during the term of the Period of Restriction or at any time within one (1) year after the settlement of any of the Units, the Grantee breaches his/her obligation not to Solicit, the Grantee’s right to the Shares upon settlement of the Units shall not have been earned and the Units, whether vested or not, will be immediately cancelled, and the Grantee shall immediately return to the Company the Shares issued in settlement of the Units or the pre-tax income derived from any disposition of such Shares. THE GRANTEE UNDERSTANDS THAT THIS PARAGRAPH IS NOT INTENDED TO AND DOES NOT PROHIBIT THE CONDUCT DESCRIBED, BUT PROVIDES FOR THE CANCELLATION OF THE UNITS AND A RETURN TO THE COMPANY OF THE SHARES OR THE GROSS TAXABLE PROCEEDS OF THE SHARES IF THE GRANTEE SHOULD CHOOSE TO VIOLATE THIS NON-SOLICITATION OF EMPLOYEES PROVISION DURING THE PERIOD OF RESTRICTION OR WITHIN ONE (1) YEAR AFTER THE SETTLEMENT OF ANY OF THE UNITS. |
e. | Injunctive and Other Available Relief. By acceptance of these Units and any Shares issued in settlement thereof, the Grantee acknowledges that, if the Grantee were to breach or threaten to breach his/her obligation hereunder not to Interfere or Solicit or not to disclose or use any Confidential Information other than in the course of performing authorized services for the Company (or any Affiliated Company), the harm caused to the Company by such breach or threatened breach would be, by its nature, irreparable because, among other things, damages would be significant and the monetary harm that would ensue would not be able to be readily proven, and that the Company would be entitled to injunctive and other appropriate relief to prevent threatened or continued breach and to such other remedies as may be available at law or in equity. To the extent not prohibited by law, any cancellation of the Units pursuant to any of Sections 9(b) through 9(d) above shall not restrict, abridge or otherwise limit in any fashion the types and scope of injunctive and other available relief to the Company. Notwithstanding any provision of this Agreement to the contrary, nothing under this Agreement shall limit, abridge, modify or otherwise restrict the Company (or any Affiliated Company) from pursuing any or all legal, equitable or other appropriate remedies to which the Company may be entitled under any other agreement with the Grantee, any other plan, program, policy or arrangement of the Company (or any Affiliated Company) under which the Grantee is covered or participates, or any applicable law, all to the fullest extent not prohibited under applicable law. |
f. | Permitted Reporting and Disclosure. Notwithstanding any language in this Agreement to the contrary, nothing in this Agreement prohibits Grantee from reporting possible violations of federal law or regulation to any governmental agency or governmental entity, or making other disclosures that are protected under federal law or regulation; provided, that, in each case such communications and disclosures are consistent with applicable law. Notwithstanding the foregoing, under no circumstance is Grantee authorized to disclose any information covered by the Company’s attorney-client privilege or attorney work product or the Company’s trade secrets without prior written consent of the Company’s General Counsel. Any reporting or disclosure permitted under this Section 9(f) shall not result in the cancellation of Shares. |
10. | Right to Retain Units/Shares Contingent on Continuing Non-Conflicting Employment. In partial consideration for the award of these Units in order to forestall the disclosure or use of Confidential Information, as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company, and to promote fair competition, the Grantee agrees that the Grantee’s right to receive the Shares upon settlement of the Units is contingent upon the Grantee refraining, during the Period of Restriction and for a period of one (1) year after the settlement of any of the Units, from rendering services, directly or indirectly, as director, officer, employee, agent, consultant or otherwise, to any Conflicting Organization except a Conflicting Organization whose business is diversified and that, as to that part of its business to which the Grantee renders services, is not a Conflicting Organization, provided that the Company shall receive separate written assurances satisfactory to the Company from the Grantee and the Conflicting Organization that the Grantee shall not render services during such period with respect to a Conflicting Product. If, prior to the expiration of the Period of Restriction or at any time within one (1) year after the settlement of any of the Units, the Grantee shall render services to any Conflicting Organization other than as expressly permitted herein, the Grantee’s right to the Shares upon settlement of the Units shall not have been earned and the Units, whether vested or not, will be immediately cancelled, and the Grantee shall immediately return to the Company the Shares issued in settlement of the Units or the pre-tax income derived from any disposition of such Shares. THE GRANTEE UNDERSTANDS THAT THIS PARAGRAPH IS NOT INTENDED TO AND DOES NOT PROHIBIT THE GRANTEE FROM RENDERING SERVICES TO A CONFLICTING ORGANIZATION, BUT PROVIDES FOR THE CANCELLATION OF THE UNITS AND A RETURN TO THE COMPANY OF THE SHARES OR THE GROSS TAXABLE PROCEEDS OF THE SHARES IF THE GRANTEE SHOULD CHOOSE TO RENDER SUCH SERVICES DURING THE PERIOD OF RESTRICTION OR WITHIN ONE YEAR AFTER THE SETTLEMENT OF ANY OF THE UNITS. |
11. | Repayment Obligation. In the event that (1) the Company issues a restatement of financial results to correct a material error and (2) the Committee determines, in good faith, that the Grantee’s fraud or willful misconduct was a significant contributing factor to the need to issue such restatement and (3) some or all of the Units that |
12. | Miscellaneous Provisions. |
a. | Choice of Law, Exclusive Jurisdiction and Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. The courts of the State of Delaware shall have exclusive jurisdiction over any disputes or other proceedings relating to this Agreement, and venue shall reside with the courts in New Castle County, Delaware, including if jurisdiction shall so permit, the U.S. District Court for the District of Delaware. Accordingly, the Grantee agrees that any claim of any type relating to this Agreement must be brought and maintained in the appropriate court located in New Castle County, Delaware, including if jurisdiction will so permit, in the U.S. District Court for the State of Delaware. The Grantee hereby consents to the jurisdiction over the Grantee of any such courts and waives all objections based on venue or inconvenient forum. |
b. | Modification or Amendment. This Agreement may be modified or amended by the Board or the Committee at any time; provided, however, no modification or amendment to this Agreement shall be made which would materially and adversely affect the rights of the Grantee, without such Grantee’s written consent. |
c. | Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced to reflect the intent of the parties to the fullest extent not prohibited by law, and in the event that such provision is not able to be so construed and enforced, then this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included. In amplification of the preceding sentence, in the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall have the power to reduce the time period or scope to the maximum time period or scope permitted by law. |
d. | References to Plan. All references to the Plan shall be deemed references to the Plan as may be amended. |
e. | Headings. The captions used in this Agreement are inserted for convenience and shall not be deemed a part of this Agreement for construction or interpretation. |
f. | Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or by the Company forthwith to the Board or the Committee, which shall review such dispute at its next regular meeting. The resolution of such dispute by the Board or the Committee shall be final and binding on all persons. It is the intention of the Company and the Grantee to make the promises contained in this Agreement reasonable and binding only to the extent that it may be lawfully done under existing applicable laws. This Agreement and the Plan constitute the entire and exclusive agreement between the Grantee and the Company, and it supersedes all prior agreements or understandings, whether written or oral, with respect to the grant of Units set forth in this Agreement. |
g. | Section 409A Compliance. To the extent applicable, it is intended that the Plan and this Agreement comply with the requirements of Section 409A of the Code, and any related regulations or other guidance |
h. | Agreement with Terms. Receipt of any benefits under this Agreement by the Grantee shall constitute the Grantee’s acceptance of and agreement with all of the provisions of this Agreement and of the Plan that are applicable to this Agreement, and the Company shall administer this Agreement accordingly. |
US PSU Agreement CEC GL32 | Exhibit 10.2 |
GRANTEE: | <<<Participant Name - 1>>> | |
TARGET AWARD: | <<<Target Shares Granted>>> | |
GRANT ID: | <<<Grant ID>>> | |
PERFORMANCE PERIOD: | July 1, 2018 through June 30, 2021 | |
DATE OF GRANT: | <<<Grant Date - 2>>> | |
SETTLEMENT DATE: | Within 75 days following the last day of the Performance Period, provided the Grantee has remained in the employment or service of the Company or its Subsidiaries through such date (except for a termination of employment or service due to death, Disability or Retirement, as provided below) |
1. | Grant of Performance Shares. The Company hereby grants to the Grantee the Target Award set forth above, payment of which is dependent upon the achievement of certain performance goals more fully described in Section 3 of this Agreement. This Award is subject to the terms, definitions and provisions of the Plan and this Agreement. All terms, provisions, and conditions applicable to the Performance Shares set forth in the Plan and not set forth herein are incorporated by reference. To the extent any provision hereof is inconsistent with a provision of the Plan, the provisions of the Plan will govern. All capitalized terms that are used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. |
2. | Nature and Settlement of Award. The Performance Shares awarded pursuant to this Agreement represent the opportunity to receive Shares of the Company and Dividend Equivalents on such Shares (as described in Section 4 below). The Company shall issue to the Participant one Share for each vested Performance Share (plus any Dividend Equivalents accrued with respect to such vested Performance Shares), rounded to the nearest whole share, less any Shares withheld in accordance with the provisions of Section 7 of this Agreement. Settlement shall occur on a date chosen by the Committee, which date shall be within seventy-five (75) days following the last day of the Performance Period, or any deferred settlement date established pursuant to Section 6 of this Agreement, whichever is later (the “Settlement Date”), and except as specifically provided in Section 5 of this Agreement, provided the Grantee has remained in the employment or service of the Company or its Subsidiaries through the Settlement Date. Although vested within the meaning of Section 83 of the Internal Revenue Code since no substantial risk of forfeiture exists at the Settlement Date, the Performance Shares (and any associated Dividend Equivalents) will not be earned until the Grantee has fulfilled all of the conditions precedent set forth in this Agreement, including, but not limited to, the obligations set forth in Sections 9(b), 9(c), 9(d), 9(e) and Section 10, and the Grantee shall have no right to retain the Shares or the value thereof upon vesting or settlement of the Performance Shares until all such conditions precedent have been satisfied. |
3. | Determination of Number of Performance Shares Vested. The number of Performance Shares vested, if any, for the Performance Period shall be determined in accordance with the following formula: |
EP Growth (for each fiscal year in the Performance Period) | |
4. | Dividend Equivalent Rights. No Dividend Equivalents shall be paid to the Grantee prior to the settlement of the award. Rather, such Dividend Equivalent payments will accrue and be notionally credited to the Grantee’s Performance Share account and paid out at the Payout Percentage in the form of additional Shares (the “Dividend Equivalent Shares”) upon settlement of the award, as described in Section 2 above. |
5. | Termination of Continuous Service. Except as otherwise provided below, if the Grantee’s employment or service with the Company and its Subsidiaries is terminated for any reason prior to the Settlement Date, all Performance Shares and Dividend Equivalents subject to this Agreement shall be immediately forfeited. |
a. | Termination due to Death or Disability. If the Grantee’s termination of employment or service is due to death or Disability, all Performance Shares and Dividend Equivalents shall immediately vest and will be paid upon completion of the Performance Period based on the level of performance achieved as of the end of such Performance Period. |
b. | Termination due to Retirement. If the Grantee’s termination of employment or service is due to Retirement, the Performance Shares shall vest on a pro rata monthly basis, including full credit for partial months elapsed and rounded to the nearest whole Share, and will be paid upon completion of the Performance Period based on the level of performance achieved as of the end of such Performance Period; provided, however, that this provision shall not apply in the event the Grantee’s employment or service is terminated for Cause. The amount of the vested Award may be computed under the following formula: Target Award times (number of full months elapsed in Performance Period (i.e., rounding up for any partial month) divided by number of full months in Performance Period) times percent performance level achieved as of the end of the Performance Period. Dividend Equivalents accrued through the Grantee’s date of termination due to Retirement shall be paid at the same time as the settlement of the vested Performance Shares. |
c. | Definition of “Retirement.” For purposes of this Agreement, the term “Retirement” shall mean termination of employment or service as an Employee after (1) twenty (20) or more years of “vesting service,” which solely for purposes of this Agreement, shall be calculated under Article III of The Clorox Company 401(k) Plan (the “401(k) Plan”) entitled “Service” along with any other relevant provisions of the 401(k) Plan necessary or desirable to give full effect thereto, or any successor provisions, regardless of the status of the Grantee with respect to the 401(k) Plan (“Vesting Service”), or (2) attaining age fifty-five with ten (10) or more years of Vesting Service. |
d. | Definition of “Disability.” For purposes of this Agreement, the Grantee’s employment shall be deemed to have terminated due to the Grantee’s Disability if the Grantee is entitled to long-term disability benefits under the Company’s long-term disability plan or policy, as in effect on the date of termination of the Grantee’s employment. |
6. | Election to Defer Settlement. Prior to the commencement of the last year of the Performance Period, the Grantee may elect to defer the settlement of the Performance Shares from the last day of the Performance Period until a date at least two years following such date, or until the Grantee’s later termination of employment or service. If the Grantee makes such an election, it will become irrevocable on the date of such election. If the Grantee makes such an election, any Dividend Equivalents awarded with respect to such deferred Performance Shares shall also be deferred under the same terms. If the Grantee makes such an election, but a transaction occurs that subjects the Grantee’s Performance Shares to Section 19 of the Plan prior to the settlement date, the Grantee’s deferral election will terminate and the Grantee’s Performance Shares and Dividend Equivalents will |
7. | Taxes. Pursuant to Section 16 of the Plan, the Committee shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy any applicable tax withholding requirements applicable to this Award. The Committee may condition the issuance of Shares upon the Grantee’s satisfaction of such withholding obligations. The Grantee may elect to satisfy all or part of such withholding requirement by tendering previously-owned Shares or by having the Company withhold Shares having a Fair Market Value equal to the minimum statutory withholding rate that could be imposed on the transaction (or such other rate that will not result in a negative accounting impact) or in such other manner as is acceptable to the Company. Such election shall be irrevocable, made in writing, signed by the Grantee, and shall be subject to any restriction or limitations that the Committee, in its sole discretion, deems appropriate. |
8. | Transferability of Performance Shares. Performance Shares shall not be transferable by the Grantee other than by will or by the laws of descent or distribution. For avoidance of doubt, Shares issued to the Grantee in settlement of Performance Shares pursuant to Section 2 of this Agreement shall not be subject to any of the foregoing transferability restrictions. |
9. | Protection of Trade Secrets and Limitations on Retention. |
a. | Definitions. |
i. | “Affiliated Company” means any organization controlling, controlled by or under common control with the Company. |
ii. | “Confidential Information” means the Company’s technical or business or personnel information not readily available to the public or generally known in the trade, including inventions, developments, trade secrets and other confidential information, knowledge, data and know-how of the Company or any Affiliated Company, whether or not they originated with the Grantee, or information which the Company or any Affiliated Company received from third parties under an obligation of confidentiality. |
iii. | “Conflicting Product” means any product, process, machine, or service of any person or organization, other than the Company or any Affiliated Company, in existence or under development that (1) resembles or competes with a product, process, machine, or service upon or with which the Grantee shall have worked during the two years prior to the Grantee’s termination of employment with the Company or any Affiliated Company or (2) with respect to which during that period of time the Grantee, as a result of his/her job performance and duties, shall have acquired knowledge of Confidential Information, and whose use or marketability could be enhanced by application to it of Confidential Information. For purposes of this section, it shall be conclusively presumed that the Grantee has knowledge of information to which s/he has been directly exposed through actual receipt or review of memorandum or documents containing such information or through actual attendance at meetings at which such information was discussed or disclosed. |
iv. | “Conflicting Organization” means any person or organization that is engaged in or about to become engaged in research on or development, production, marketing or selling of a Conflicting Product. |
b. | Right to Retain Shares Contingent on Protection of Confidential Information. In partial consideration for the award of these Performance Shares, the Grantee agrees that at all times, both during and after the term of the Grantee’s employment with the Company or any Affiliated Company, to hold in the strictest confidence, and not to use (except for the benefit of the Company at the Company’s direction) or disclose (except for the benefit of the Company at the Company’s direction), regardless of when disclosed to the |
c. | No Interference with Customers or Suppliers. In partial consideration for the award of these Performance Shares, in order to forestall the disclosure or use of Confidential Information as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company and to promote fair competition, the Grantee agrees that the Grantee’s right to the Shares upon settlement of the Performance Shares is contingent upon the Grantee refraining, for a period of one (1) year after the Settlement Date (for purposes of this Section 9(c), ignoring any election to defer settlement pursuant to Section 6) of the Performance Shares, for himself/herself or any third party, directly or indirectly, from using Confidential Information to (1) divert or attempt to divert from the Company (or any Affiliated Company) any business of any kind in which it is engaged, or (2) intentionally solicit its customers with which it has a contractual relationship as to Conflicting Products, or to interfere with the contractual relationship with any of its suppliers or customers (collectively, “Interfere”). If, during the term of the Performance Period or at any time within one (1) year after the Settlement Date (for purposes of this Section 9(c), ignoring any election to defer settlement pursuant to Section 6), the Grantee breaches his/her obligation not to Interfere, the Grantee’s right to the Shares upon settlement of the Performance Shares shall not have been earned and the Performance Shares, whether vested or not, will be immediately cancelled, and the Grantee shall immediately return to the Company the Shares or the pre-tax income derived from any disposition of the Shares. For avoidance of doubt, the term “Interfere” shall not include any advertisement of Conflicting Products through the use of media intended to reach a broad public audience (such as television, cable or radio broadcasts, or newspapers or magazines) or the broad distribution of coupons through the use of direct mail or through independent retail outlets. THE GRANTEE UNDERSTANDS THAT THIS PARAGRAPH IS NOT INTENDED TO AND DOES NOT PROHIBIT THE CONDUCT DESCRIBED, BUT PROVIDES FOR THE CANCELLATION OF THE PERFORMANCE SHARES AND A RETURN TO THE COMPANY OF THE SHARES OR THE GROSS TAXABLE PROCEEDS OF THE SHARES IF THE GRANTEE SHOULD CHOOSE TO VIOLATE THIS “NO INTERFERENCE WITH CUSTOMERS OR SUPPLIERS” PROVISION DURING THE TERM OF THE PERFORMANCE PERIOD OR WITHIN ONE (1) YEAR AFTER THE SETTLEMENT DATE (FOR PURPOSES OF THIS SECTION 9(C), IGNORING ANY ELECTION TO DEFER SETTLEMENT PURSUANT TO SECTION 6). |
d. | No Solicitation of Employees. In partial consideration for the award of these Performance Shares, in order to forestall the disclosure or use of Confidential Information, as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company, and to promote fair competition, the Grantee agrees that the Grantee’s right to the Shares upon settlement of the Performance Shares is contingent upon the Grantee refraining, for a period of one (1) year after the Settlement Date (for purposes of this Section 9(d), ignoring any election to defer settlement pursuant to Section 6), for himself/herself or any third party, directly or indirectly, from soliciting for employment any person employed by the Company, or by any Affiliated Company, during the period of the solicited |
e. | Injunctive and Other Available Relief. By acceptance of these Performance Shares, the Grantee acknowledges that, if the Grantee were to breach or threaten to breach his/her obligation hereunder not to Interfere or Solicit or not to disclose or use any Confidential Information other than in the course of performing authorized services for the Company (or any Affiliated Company), the harm caused to the Company by such breach or threatened breach would be, by its nature, irreparable because, among other things, damages would be significant and the monetary harm that would ensue would not be able to be readily proven, and that the Company would be entitled to injunctive and other appropriate relief to prevent threatened or continued breach and to such other remedies as may be available at law or in equity. To the extent not prohibited by law, any cancellation of the Performance Shares pursuant to any of Sections 9(b) through 9(d) above shall not restrict, abridge or otherwise limit in any fashion the types and scope of injunctive and other available relief to the Company. Notwithstanding any provision of this Agreement to the contrary, nothing under this Agreement shall limit, abridge, modify or otherwise restrict the Company (or any Affiliated Company) from pursuing any or all legal, equitable or other appropriate remedies to which the Company may be entitled under any other agreement with the Grantee, any other plan, program, policy or arrangement of the Company (or any Affiliated Company) under which the Grantee is covered or participates, or any applicable law, all to the fullest extent not prohibited under applicable law. |
f. | Permitted Reporting and Disclosure. Notwithstanding any language in this Agreement to the contrary, nothing in this Agreement prohibits Grantee from reporting possible violations of federal law or regulation to any governmental agency or governmental entity, or making other disclosures that are protected under federal law or regulation; provided, that, in each case such communications and disclosures are consistent with applicable law. Notwithstanding the foregoing, under no circumstance is Grantee authorized to disclose any information covered by the Company’s attorney-client privilege or attorney work product or the Company’s trade secrets without prior written consent of the Company’s General Counsel. Any reporting or disclosure permitted under this Section 9(f) shall not result in the cancellation of Performance Shares. Grantee is entitled to certain immunities from liability under state and federal law for disclosing trade secrets if the disclosure was made to report or investigate an alleged violation of law, subject to certain conditions. Please see the Company’s Confidential Information Policy for further details. |
10. | Right to Retain Shares Contingent on Continuing Non-Conflicting Employment. In partial consideration for the award of these Performance Shares, in order to forestall the disclosure or use of Confidential Information, as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company, and to promote fair competition, the Grantee agrees that the Grantee’s right to the Shares upon settlement of the Performance Shares is contingent upon the Grantee refraining, during the term of the Performance Period and for a period of one (1) year after the Settlement Date (for purposes of this Section 10, ignoring any election to defer settlement pursuant to Section 6), from rendering services, |
11. | Repayment Obligation. In the event that (1) the Company issues a restatement of financial results to correct a material error and (2) the Committee determines, in good faith, that the Grantee’s fraud or willful misconduct was a significant contributing factor to the need to issue such restatement and (3) some or all of the Performance Shares that were granted and/or vested prior to such restatement would not have been granted and/or vested, as applicable, based upon the restated financial results, the Grantee shall immediately return to the Company the Performance Shares or any Shares or the pre-tax income derived from any disposition of the Shares previously received in settlement of the Performance Shares that would not have been granted and/or vested based upon the restated financial results (the “Repayment Obligation”). The Company shall be able to enforce the Repayment Obligation by all legal means available, including, without limitation, by withholding such amount from other sums owed by the Company to the Grantee. |
12. | Miscellaneous Provisions. |
a. | Rights as a Stockholder. Neither the Grantee nor the Grantee’s transferee or representative shall have any rights as a stockholder with respect to any Shares subject to this Award until the Performance Shares have been settled and Share certificates have been issued to the Grantee, transferee or representative, as the case may be. |
b. | Choice of Law, Exclusive Jurisdiction and Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. The courts of the State of Delaware shall have exclusive jurisdiction over any disputes or other proceedings relating to this Agreement, and venue shall reside with the courts in New Castle County, Delaware, including if jurisdiction shall so permit, the U.S. District Court for the District of Delaware. Accordingly, the Grantee agrees that any claim of any type relating to this Agreement must be brought and maintained in the appropriate court located in New Castle County, Delaware, including if jurisdiction will so permit, in the U.S. District Court for the State of Delaware. The Grantee hereby consents to the jurisdiction over the Grantee of any such courts and waives all objections based on venue or inconvenient forum. |
c. | Modification or Amendment. This Agreement may be modified or amended by the Board or the Committee at any time; provided, however, no modification or amendment to this Agreement shall be made which would materially and adversely affect the rights of the Grantee, without such Grantee’s written consent. |
d. | Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced to reflect the intent of the parties to the fullest extent not prohibited by law, and in the event that such provision is not able to be so construed and enforced, then this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included. In amplification of the preceding sentence, in the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall have the power to reduce the time period or scope to the maximum time period or scope permitted by law. |
e. | References to Plan. All references to the Plan shall be deemed references to the Plan as may be amended. |
f. | Headings. The captions used in this Agreement are inserted for convenience and shall not be deemed a part of this Agreement for construction or interpretation. |
g. | Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or by the Company forthwith to the Board or the Committee, which shall review such dispute at its next regular meeting. The resolution of such dispute by the Board or the Committee shall be final and binding on all persons. It is the intention of the Company and the Grantee to make the promises contained in this Agreement reasonable and binding only to the extent that it may be lawfully done under existing applicable laws. This Agreement and the Plan constitute the entire and exclusive agreement between the Grantee and the Company, and it supersedes all prior agreements or understandings, whether written or oral, with respect to the grant of Performance Shares set forth in this Agreement. |
h. | Section 409A Compliance. To the extent applicable, it is intended that the Plan and this Agreement comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any related regulations or other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service (“Section 409A”). Any provision of the Plan or this Agreement that would cause this Award to fail to satisfy Section 409A shall have no force or effect until amended to comply with Section 409A, which amendment may be retroactive to the extent permitted by Section 409A. |
i. | Agreement with Terms. Receipt of any benefits under this Agreement by the Grantee shall constitute the Grantee’s acceptance of and agreement with all of the provisions of this Agreement and of the Plan that are applicable to this Agreement, and the Company shall administer this Agreement accordingly. |
1. | I have reviewed this quarterly report on Form 10-Q 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 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. |
Date: October 31, 2018 |
/s/ Benno Dorer |
Benno Dorer |
Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q 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 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. |
Date: October 31, 2018 |
/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 |
Document and Entity Information - shares |
3 Months Ended | |
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Sep. 30, 2018 |
Oct. 17, 2018 |
|
Document And Entity Information | ||
Entity Registrant Name | CLOROX CO /DE/ | |
Entity Central Index Key | 0000021076 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 127,652,097 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2018 |
Jun. 30, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Property, plant and equipment, accumulated depreciation and amortization | $ 2,084 | $ 2,061 |
Preferred stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 158,741,461 | 158,741,461 |
Common stock, shares outstanding (in shares) | 127,605,069 | 127,982,767 |
Treasury stock, shares (in shares) | 31,136,392 | 30,758,694 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
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Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited interim condensed consolidated financial statements for the three months ended September 30, 2018 and 2017, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the consolidated results of operations, financial position and cash flows of The Clorox Company and its subsidiaries (the Company) for the periods presented. However, the financial results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been omitted or condensed pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain prior year reclassifications were made in the condensed consolidated statements of cash flows to conform to the current year presentation. The information in this report should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended June 30, 2018, which includes a complete set of footnote disclosures, including the Company’s significant accounting policies. Revenue Recognition Revenue is recognized when performance obligations under the terms of the contracts with customers are satisfied. The Company's performance obligation generally consists of the promise to sell finished products to wholesalers, distributors, retailers or consumers. Control of the finished products are transferred upon shipment to, or receipt at, customers' locations, as determined by the specific terms of the contract. Once control is transferred to the customer, the Company has completed its performance obligation, and revenue is recognized. After completion of the performance obligation, there is an unconditional right to consideration as outlined in the contract. A right is unconditional if nothing other than the passage of time is required before payment of that consideration is due. The Company typically collects its customer receivables within two months. All performance obligations under the terms of contracts with customers have an original duration of one year or less. The Company routinely commits to one-time or ongoing trade-promotion programs with customers and consumer coupon programs that require the Company to estimate and accrue the expected costs of such programs. Programs include shelf price reductions, end-of-aisle or in-store displays of the Company’s products and graphics and other trade-promotion activities conducted by the customer. The costs of such activities, defined as variable consideration under Topic 606 of the Accounting Standards Codification, "Revenue from Contracts with Customers," are netted against sales and recorded when the related sale takes place. The accruals for trade promotion programs and consumer coupon liabilities are established based on the Company’s best estimate of the amounts necessary to settle future and existing obligations for products sold as of the balance sheet date. The Company uses forecasted appropriations, historical trend analysis, and customer and sales organization inputs in determining the accruals for promotional activities, and uses historical trend experience and coupon redemption estimates for the coupon accrual requirements. The Company provides an allowance for doubtful accounts based on its historical experience and ongoing assessment of its customers’ credit risk and aging. Receivables are presented net of the allowance for doubtful accounts. Foreign Currency Transactions and Translation Effective July 1, 2018, under the requirements of U.S. GAAP, Argentina was designated as a highly inflationary economy, since it has experienced cumulative inflation of approximately 100 percent or more over a three-year period. As a result, beginning July 1, 2018, the U.S. dollar replaced the Argentine peso as the functional currency of the Company’s subsidiaries in Argentina (collectively, "Clorox Argentina"). Consequently, gains and losses from non-U.S. dollar denominated monetary assets and liabilities for Clorox Argentina are recognized in Other (income) expense, net in the condensed consolidated statement of earnings. Recently Issued Accounting Standards Recently Issued Accounting Standards Not Yet Adopted In February 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which amends its guidance to allow a reclassification from Accumulated Other Comprehensive Income to Retained Earnings for the stranded income tax effects resulting from The Tax Cuts and Jobs Act of 2017 (the Tax Act). The amendments are effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will potentially have on its consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” which amends the hedge accounting recognition and presentation requirements to better align an entity’s risk management activities with its financial reporting. This standard also simplifies the application of hedge accounting in certain situations. The new guidance is effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The new guidance is effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize a right-of-use asset and a lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation will depend on the classification of a lease as either a finance or an operating lease. ASU 2016-02 also requires expanded disclosures about leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, "Leases (Topic 842), Targeted Improvements," which provides an optional transition method in applying the new lease standard. Topic 842 can be applied using either a modified retrospective approach at the beginning of the earliest period presented, or as permitted by ASU 2018-11, at the beginning of the period in which it is adopted. The new guidance is effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted. The Company has initiated its plan for the adoption and implementation of this new accounting standard, including assessing its lease arrangements and implementing software to meet the reporting and disclosure requirements of this standard. Additionally, the Company is in the process of identifying changes to its business processes and controls to support the adoption and is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. Recently Adopted Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which replaces most of the existing U.S. GAAP revenue recognition guidance and is intended to improve and converge with international standards on the financial reporting requirements for revenue from contracts with customers. The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU 2014-09 also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from contracts with customers, including information about significant judgments and changes in judgments. The Company adopted the new guidance on a modified retrospective basis effective July 1, 2018, and does not expect the guidance to have a material impact on the Company's annual consolidated financial statements. However, there will be an impact on the Company’s financial results in the interim periods due to the timing of recognition for certain trade promotion spending. Due to a change in the timing of recognition for certain trade promotion spending, the Company recorded an immaterial cumulative effect of initially applying the new guidance as an adjustment to the fiscal year 2019 opening balance of Retained earnings. Results for periods beginning on or after July 1, 2018 are recognized and presented in accordance with Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the prior accounting guidance under Topic 605, "Revenue Recognition." The Company has made changes to its accounting policies, business processes, systems and controls to align with the new revenue recognition guidance and disclosure requirements. In March 2017, the FASB issued ASU No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires presenting the service cost component of net periodic benefit cost in the same income statement line items as other employee compensation costs arising from services rendered during the period. This standard also requires that other components of the net periodic benefit cost be presented separately from the line item(s) that includes service costs and outside of any subtotal of operating income, if one is presented, on a retrospective basis. The Company adopted this new guidance in the first quarter of fiscal year 2019 and the adoption did not have a material impact on the Company's consolidated financial statements. Following the adoption of this guidance, the Company records the non-service cost components of net periodic benefit cost in Other (income) expense, net. In March 2018, the FASB issued ASU No. 2018-05, “Income Taxes (Topic 740)-Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” which amends its guidance to address the initial accounting for the income tax effects of the Tax Act, which was enacted on December 22, 2017 (enactment date). This new guidance allows reasonable estimates of income tax effects to be reported as provisional amounts during the measurement period, which is one year from the enactment date, when the necessary information is not available, prepared, or analyzed in sufficient detail to complete the accounting. The amendments also added specific disclosure requirements. The Company has adopted this new guidance. The Company recorded $81 of provisional benefits in the second quarter of fiscal year 2018. Refer to Note 6 for more information. |
BUSINESS ACQUIRED |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||
BUSINESS ACQUIRED | BUSINESS ACQUIRED On April 2, 2018, the Company acquired 100 percent of Nutranext, a health and wellness company based in Sunrise, Florida. Nutranext manufactures and markets leading dietary supplement brands in the retail and e-commerce channels as well as in its direct-to-consumer business. 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. The total consideration paid of $681, which included post-closing working capital and other adjustments, was initially funded through commercial paper borrowings and subsequently repaid using a combination of long-term debt financing and cash repatriated from foreign subsidiaries. The assets and liabilities of Nutranext were recorded at their respective estimated fair value as of the acquisition date using generally accepted accounting principles for business combinations. The excess of the purchase price over the fair value of the net identifiable assets acquired has been allocated to goodwill in the Lifestyle and Household reportable segments of $309 and $102, respectively. The goodwill of $411 is primarily attributable to the synergies, including those with the digestive health business, expected to arise after the acquisition and reflects the value of further expanding the Company’s portfolio into the health and wellness arena. Of the total goodwill, $363 is expected to be deductible for tax purposes. The following table summarizes the estimated fair value of Nutranext's assets acquired and liabilities assumed and the related deferred income taxes as of the acquisition date. Due to the timing of the acquisition, the fair value of the assets acquired and liabilities assumed are based on a preliminary valuation and the Company’s estimates and assumptions are subject to change within the measurement period. The primary areas of the purchase price that are not yet finalized are related to goodwill and income taxes. The weighted-average estimated useful life of intangible assets subject to amortization is 15 years.
Effective April 2, 2018, Nutranext was consolidated into the Company's results of operations. Results for Nutranext's global business are reflected in the Lifestyle reportable segment. Pro forma results reflecting the acquisition were not presented because the acquisition did not meet the threshold requirements for additional disclosure. |
DISCONTINUED OPERATIONS |
3 Months Ended |
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Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS On September 22, 2014, the Company's Venezuela affiliate, Corporación Clorox de Venezuela S.A. (Clorox Venezuela) announced that it was discontinuing its operations, effective immediately, and seeking to sell its assets. Since fiscal year 2012, Clorox Venezuela has been required to sell more than two thirds of its products at prices frozen by the Venezuelan government. During this same period, Clorox Venezuela experienced successive years of hyperinflation resulting in significant sustained increases in its input costs, including packaging, raw materials, transportation and wages. As a result, Clorox Venezuela had been selling its products at a loss, resulting in ongoing operating losses. Clorox Venezuela repeatedly met with government authorities in an effort to help them understand the rapidly declining state of the business, including the need for immediate, significant and ongoing price increases and other critical remedial actions to address these adverse impacts. Based on the Venezuelan government’s representations, Clorox Venezuela had expected significant price increases would be forthcoming much earlier; however, the price increases subsequently approved were insufficient and would have caused Clorox Venezuela to continue operating at a significant loss into the foreseeable future. As such, Clorox Venezuela was no longer financially viable and was forced to discontinue its operations. On September 26, 2014, the Company reported that Venezuelan Vice President Jorge Arreaza announced, with endorsement by President Nicolás Maduro, that the Venezuelan government had occupied the Santa Lucía and Guacara production facilities of Clorox Venezuela. On November 6, 2014, the Company reported that the Venezuelan government had published a resolution granting a government-sponsored Special Administrative Board full authority to restart and operate the business of Clorox Venezuela, thereby reaffirming the government's expropriation of Clorox Venezuela’s assets. Further, President Nicolás Maduro announced the government's intention to facilitate the resumed production of bleach and other cleaning products at Clorox Venezuela plants. He also announced his approval of a financial credit to invest in raw materials and production at the plants. These actions by the Venezuelan government were taken without the consent or involvement of Clorox Venezuela, its parent Clorox Spain S.L. (Clorox Spain) or any of their affiliates. Clorox Venezuela, Clorox Spain and their affiliates reserved their rights under all applicable laws and treaties. With this exit, the financial results of Clorox Venezuela are reflected as discontinued operations in the Company’s condensed consolidated financial statements for all periods presented. The results of Clorox Venezuela had historically been part of the International reportable segment. There were no net sales for each of the three months ended September 30, 2018 and 2017, and losses from discontinued operations, net of tax were insignificant for these same periods. |
INVENTORIES, NET |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES, NET | INVENTORIES, NET Inventories, net, consisted of the following as of:
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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS |
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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Financial Risk Management and Derivative Instruments The Company is exposed to certain commodity, foreign currency and interest rate risks related to its ongoing business operations and uses derivative instruments to mitigate its exposure to these risks. Commodity Price Risk Management The Company may use commodity exchange traded futures and over-the-counter swap contracts, which are generally no longer than 2 years, to fix the price of a portion of its forecasted raw material requirements. Commodity purchase contracts are measured at fair value using market quotations obtained from the Chicago Board of Trade commodity futures exchange and commodity derivative dealers. As of September 30, 2018, the notional amount of commodity derivatives was $39, of which $28 related to soybean oil futures used for the food business and $11 related to jet fuel swaps used for the charcoal business. As of June 30, 2018, the notional amount of commodity derivatives was $34, of which $24 related to soybean oil futures and $10 related to jet fuel swaps. Foreign Currency Risk Management The Company may also enter into certain over-the-counter derivative contracts to manage a portion of the Company’s forecasted foreign currency exposure associated with the purchase of inventory. These foreign currency contracts generally have durations of no longer than 2 years. The foreign exchange contracts are measured at fair value using information quoted by foreign exchange dealers. The notional amounts of outstanding foreign currency forward contracts used by the Company’s subsidiaries to hedge forecasted purchases of inventory were $39 as of September 30, 2018, and $50 as of June 30, 2018. Interest Rate Risk Management The Company may enter into over-the-counter interest rate forward contracts to fix a portion of the benchmark interest rate prior to the anticipated issuance of fixed rate debt or to manage the Company’s level of fixed and floating rate debt. These interest rate forward contracts generally have durations of less than 12 months. The interest rate contracts are measured at fair value using information quoted by U.S. government bond dealers. As of September 30, 2018 and June 30, 2018, the Company had no outstanding interest rate forward contracts. Commodity, Foreign Exchange and Interest Rate Derivatives The Company designates its commodity forward and future contracts for forecasted purchases of raw materials, foreign currency forward contracts for forecasted purchases of inventory, and interest rate forward contracts for forecasted interest payments as cash flow hedges. The effects of derivative instruments designated as hedging instruments on Other comprehensive income and Net earnings were as follows:
The gains (losses) reclassified from Accumulated other comprehensive net (loss) income and recognized in Net earnings during the three months ended September 30, 2018 and 2017, for commodity purchase and foreign exchange contracts were included in Cost of products sold, and for interest rate contracts were included in Interest expense. The estimated amount of the existing net gain (loss) in Accumulated other comprehensive net (loss) income as of September 30, 2018, which is expected to be reclassified into Net earnings within the next twelve months is $(3). Gains and losses on derivative instruments representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in Net earnings. During the three months ended September 30, 2018 and 2017, hedge ineffectiveness was not significant. Counterparty Risk Management and Derivative Contract Requirements The Company utilizes a variety of financial institutions as counterparties for over-the-counter derivative instruments. The Company enters into agreements governing the use of over-the-counter derivative instruments and sets internal limits on the aggregate over-the-counter derivative instrument positions held with each counterparty. Certain terms of these agreements require the Company or the counterparty to post collateral when the fair value of the derivative instrument exceeds contractually defined counterparty liability position limits. Of the over-the-counter derivative instruments in liability positions held as of September 30, 2018 and June 30, 2018, none contained such terms. As of September 30, 2018 and June 30, 2018, neither the Company nor any counterparty was required to post any collateral as no counterparty liability position limits were exceeded. Certain terms of the agreements governing the Company’s over-the-counter derivative instruments require the credit ratings of the Company and its counterparties, as assigned by Standard & Poor’s and Moody’s, to remain at a level equal to or better than the minimum of an investment grade credit rating. If the Company’s credit ratings were to fall below investment grade, the counterparties to the derivative instruments could request full collateralization on derivative instruments in net liability positions. As of both September 30, 2018 and June 30, 2018, the Company and each of its counterparties had been assigned investment grade credit ratings by both Standard & Poor’s and Moody’s. Certain of the Company’s exchange-traded futures contracts used for commodity price risk management include requirements for the Company to post collateral in the form of a cash margin account held by the Company’s broker for trades conducted on that exchange. As of September 30, 2018 and June 30, 2018, the Company maintained cash margin balances related to exchange-traded futures contracts of $2, which are classified as Prepaid expenses and other current assets in the condensed consolidated balance sheets. Trust Assets The Company has held interests in mutual funds and cash equivalents as part of the trust assets related to its nonqualified deferred compensation plans. The participants in the nonqualified deferred compensation plans, who are the Company’s current and former employees, may select among certain mutual funds in which to invest their compensation deferrals in accordance with the terms of the plans and within the confines of the trusts, which hold the marketable securities. The trusts represent variable interest entities for which the Company is considered the primary beneficiary, and, therefore, trust assets are consolidated and included in Other assets in the condensed consolidated balance sheets. The interests in mutual funds are measured at fair value using quoted market prices. The Company has designated these marketable securities as trading investments. Fair Value Measurements Financial assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets are required to be classified and disclosed in one of the following three categories of the fair value hierarchy: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions. As of September 30, 2018 and June 30, 2018, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis included derivative financial instruments, which were classified as either Level 1 or Level 2, and trust assets to fund the Company’s nonqualified deferred compensation plans, which were classified as Level 1. The following table summarizes the fair value of the Company’s assets and liabilities for which disclosure of fair value is required:
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INCOME TAXES |
3 Months Ended |
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Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter. The effective tax rate on earnings from continuing operations was 21.5% and 31.3% for the three months ended September 30, 2018 and 2017, respectively. The decrease in the effective tax rate on earnings from continuing operations for the current period was primarily due to the corporate income tax rate reduction resulting from enactment of the Tax Act during the second quarter of fiscal year 2018 (the period of the Tax Act's enactment). The Tax Act was signed into law by the President of the United States on December 22, 2017. The Tax Act makes significant changes to U.S. tax law, and includes a reduction of U.S. corporation statutory income tax rates from 35% to 21% effective January 1, 2018. Under the Tax Act, the Company was subject to an average federal statutory tax rate of 28.1% for its fiscal year ended June 30, 2018. The Company’s federal statutory tax rate was 21.0% beginning in July 2018 for the fiscal year ending June 30, 2019. The Tax Act also includes, among other things, a one-time transition tax on accumulated foreign earnings and the adoption of a modified territorial approach to the taxation of future foreign earnings. As of September 30, 2018, the Company continued to obtain, prepare and analyze information necessary to finalize the accounting for the impacts of the Tax Act. Consequently, reasonable estimates of the impacts of the Tax Act have been reported as provisional, as defined in Staff Accounting Bulletin No. 118. Total benefits of $81 were recorded in the period of the Tax Act's enactment and were due to several provisional adjustments including net deferred tax liability reductions of $60, a beneficial current taxable income impact of $28 and a provisional one-time transition tax of $7. Measurement adjustments to the provisional amounts were not significant for the first quarter of fiscal year 2019. |
NET EARNINGS PER SHARE (EPS) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET EARNINGS PER SHARE (EPS) | NET EARNINGS PER SHARE (EPS) The following is the reconciliation of the weighted average number of shares outstanding (in thousands) used to calculate basic net EPS to those used to calculate diluted net EPS:
The Company has two stock repurchase programs: an open-market purchase program with an authorized aggregate purchase amount of up to $2,000, which has no expiration date, and a program to offset the anticipated impact of dilution related to stock-based awards (the Evergreen Program), which has no authorization limit on the dollar amount and no expiration date. Stock repurchases under the two stock repurchase programs were as follows for the periods indicated:
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COMPREHENSIVE INCOME |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME | COMPREHENSIVE INCOME The following table provides a summary of Comprehensive income for the periods indicated:
Changes in Accumulated other comprehensive net (loss) income by component were as follows for the three months ended September 30:
Included in foreign currency translation adjustments are re-measurement losses on long-term intercompany loans where settlement is not planned or anticipated in the foreseeable future. For the three months ended September 30, 2018 and 2017, Other comprehensive income (loss) on these loans totaled $(2) and $(1), respectively. There were no amounts associated with these loans reclassified from Accumulated other comprehensive net (loss) income for the periods presented. |
EMPLOYEE BENEFIT PLANS |
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Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS The following table summarizes the components of net periodic benefit cost for the Company’s retirement income plans:
(1) The weighted average long-term expected rate of return on plan assets used in computing the fiscal year 2019 net periodic benefit cost is 4.33%. During the three months ended September 30, 2018 and 2017, the Company made $2 in contributions to the domestic retirement income plans. As a result of adopting ASU No. 2017-07, "Compensation-Retirement Benefits (Topic 715)," effective July 1, 2018, net periodic benefit cost is reflected in Other (income) expense, net for fiscal year 2019, and in Cost of products sold, Selling and administrative expenses and Research and development costs prior to fiscal year 2019. Refer to Note 1 for more details. |
OTHER CONTINGENCIES AND GUARANTEES |
3 Months Ended |
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Sep. 30, 2018 | |
OTHER CONTINGENCIES AND GUARANTEES [Abstract] | |
OTHER CONTINGENCIES AND GUARANTEES | OTHER CONTINGENCIES AND GUARANTEES Contingencies The Company is involved in certain environmental matters, including response actions at various locations. The Company had recorded liabilities totaling $28 as of September 30, 2018 and June 30, 2018, for its share of aggregate future remediation costs related to these matters. One matter, which accounted for $14 of the recorded liability as of September 30, 2018 and June 30, 2018, relates to environmental costs associated with one of the Company’s former operations at a site located in Alameda County, California. In November 2016, at the request of regulators and with the assistance of environmental consultants, the Company submitted a Feasibility Study that evaluated various options for managing the site and included estimates of the related costs. As a result, the Company recorded in Other (income) expense, net an undiscounted liability for costs estimated to be incurred over a 30-year period, based on the option recommended in the Feasibility Study. However, as a result of ongoing discussions with regulators, in June 2017, the Company increased its recorded liability to $14, which reflects anticipated costs to implement additional remediation measures at this site. While the Company believes its latest estimate is reasonable, regulators could require the Company to implement one of the other options evaluated in the Feasibility Study, with estimated undiscounted costs of up to $28 over an estimated 30-year period, or require the Company to take other actions and incur costs not included in the study. Another matter in Dickinson County, Michigan, at the site of one of the Company's former operations for which the Company is jointly and severally liable, accounted for $12 of the recorded liability, as of September 30, 2018 and June 30, 2018. This amount reflects the Company's agreement to be liable for 24.3% of the aggregate remediation and associated costs for this matter pursuant to a cost-sharing arrangement with a third party. With the assistance of environmental consultants, the Company maintains an undiscounted liability representing its current best estimate of its share of the capital expenditures, maintenance and other costs that may be incurred over an estimated 30-year remediation period. Although it is reasonably possible that the Company’s exposure may exceed the amount recorded for the Dickinson County matter, any amount of such additional exposures, or range of exposures, is not estimable at this time. The Company's estimated losses related to these matters are sensitive to a variety of uncertain factors, including the efficacy of any remediation efforts, changes in any remediation requirements, and the future availability of alternative clean-up technologies. The Company is subject to various legal proceedings, claims and other loss contingencies, including, without limitation, loss contingencies relating to contractual arrangements, product liability, patents and trademarks, advertising, labor and employment, environmental, health and safety and other matters. With respect to these proceedings, claims and other loss contingencies, while considerable uncertainty exists, in the opinion of management at this time, the ultimate disposition of these matters, to the extent not previously provided for, will not have a material adverse effect, either individually or in the aggregate, on the Company’s condensed consolidated financial statements taken as a whole. Guarantees In conjunction with divestitures and other transactions, the Company may provide typical indemnifications (e.g., indemnifications for representations and warranties and retention of previously existing environmental, tax and employee liabilities) that have terms that vary in duration and in the potential amount of the total obligation and, in many circumstances, are not explicitly defined. The Company has not made, nor does it believe that it is probable that it will make, any material payments relating to its indemnifications, and believes that any reasonably possible payments would not have a material adverse effect, either individually or in the aggregate, on the Company’s condensed consolidated financial statements taken as a whole. The Company had not recorded any material liabilities on the aforementioned guarantees as of September 30, 2018 and June 30, 2018. As of September 30, 2018, the Company was a party to letters of credit of $9, primarily related to one of its insurance carriers, of which $0 had been drawn upon. |
SEGMENT RESULTS |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT RESULTS | SEGMENT RESULTS The Company operates through strategic business units that are aggregated into four reportable segments based on the economics and nature of the products sold: Cleaning, Household, Lifestyle and International. Certain non-allocated administrative costs, interest income, interest expense and various other non-operating income and expenses are reflected in Corporate. Corporate assets include cash and cash equivalents, prepaid expenses and other current assets, property and equipment, other investments and deferred taxes. The table below presents reportable segment information and a reconciliation of the segment information to the Company’s consolidated Net sales and Earnings from continuing operations before income taxes, with amounts that are not allocated to the reportable segments reflected in Corporate.
All intersegment sales are eliminated and are not included in the Company’s reportable segments’ net sales. Net sales to the Company's largest customer, Wal-Mart Stores, Inc. and its affiliates, as a percentage of consolidated net sales, were 25% and 26% for the three months ended September 30, 2018 and 2017, respectively. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited interim condensed consolidated financial statements for the three months ended September 30, 2018 and 2017, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the consolidated results of operations, financial position and cash flows of The Clorox Company and its subsidiaries (the Company) for the periods presented. However, the financial results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been omitted or condensed pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain prior year reclassifications were made in the condensed consolidated statements of cash flows to conform to the current year presentation. The information in this report should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended June 30, 2018, which includes a complete set of footnote disclosures, including the Company’s significant accounting policies. |
Revenue Recognition | Revenue Recognition Revenue is recognized when performance obligations under the terms of the contracts with customers are satisfied. The Company's performance obligation generally consists of the promise to sell finished products to wholesalers, distributors, retailers or consumers. Control of the finished products are transferred upon shipment to, or receipt at, customers' locations, as determined by the specific terms of the contract. Once control is transferred to the customer, the Company has completed its performance obligation, and revenue is recognized. After completion of the performance obligation, there is an unconditional right to consideration as outlined in the contract. A right is unconditional if nothing other than the passage of time is required before payment of that consideration is due. The Company typically collects its customer receivables within two months. All performance obligations under the terms of contracts with customers have an original duration of one year or less. The Company routinely commits to one-time or ongoing trade-promotion programs with customers and consumer coupon programs that require the Company to estimate and accrue the expected costs of such programs. Programs include shelf price reductions, end-of-aisle or in-store displays of the Company’s products and graphics and other trade-promotion activities conducted by the customer. The costs of such activities, defined as variable consideration under Topic 606 of the Accounting Standards Codification, "Revenue from Contracts with Customers," are netted against sales and recorded when the related sale takes place. The accruals for trade promotion programs and consumer coupon liabilities are established based on the Company’s best estimate of the amounts necessary to settle future and existing obligations for products sold as of the balance sheet date. The Company uses forecasted appropriations, historical trend analysis, and customer and sales organization inputs in determining the accruals for promotional activities, and uses historical trend experience and coupon redemption estimates for the coupon accrual requirements. The Company provides an allowance for doubtful accounts based on its historical experience and ongoing assessment of its customers’ credit risk and aging. Receivables are presented net of the allowance for doubtful accounts. |
Foreign Currency Transactions and Translation | Foreign Currency Transactions and Translation Effective July 1, 2018, under the requirements of U.S. GAAP, Argentina was designated as a highly inflationary economy, since it has experienced cumulative inflation of approximately 100 percent or more over a three-year period. As a result, beginning July 1, 2018, the U.S. dollar replaced the Argentine peso as the functional currency of the Company’s subsidiaries in Argentina (collectively, "Clorox Argentina"). Consequently, gains and losses from non-U.S. dollar denominated monetary assets and liabilities for Clorox Argentina are recognized in Other (income) expense, net in the condensed consolidated statement of earnings. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Recently Issued Accounting Standards Not Yet Adopted In February 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which amends its guidance to allow a reclassification from Accumulated Other Comprehensive Income to Retained Earnings for the stranded income tax effects resulting from The Tax Cuts and Jobs Act of 2017 (the Tax Act). The amendments are effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will potentially have on its consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” which amends the hedge accounting recognition and presentation requirements to better align an entity’s risk management activities with its financial reporting. This standard also simplifies the application of hedge accounting in certain situations. The new guidance is effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The new guidance is effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize a right-of-use asset and a lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation will depend on the classification of a lease as either a finance or an operating lease. ASU 2016-02 also requires expanded disclosures about leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, "Leases (Topic 842), Targeted Improvements," which provides an optional transition method in applying the new lease standard. Topic 842 can be applied using either a modified retrospective approach at the beginning of the earliest period presented, or as permitted by ASU 2018-11, at the beginning of the period in which it is adopted. The new guidance is effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted. The Company has initiated its plan for the adoption and implementation of this new accounting standard, including assessing its lease arrangements and implementing software to meet the reporting and disclosure requirements of this standard. Additionally, the Company is in the process of identifying changes to its business processes and controls to support the adoption and is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. Recently Adopted Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which replaces most of the existing U.S. GAAP revenue recognition guidance and is intended to improve and converge with international standards on the financial reporting requirements for revenue from contracts with customers. The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU 2014-09 also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from contracts with customers, including information about significant judgments and changes in judgments. The Company adopted the new guidance on a modified retrospective basis effective July 1, 2018, and does not expect the guidance to have a material impact on the Company's annual consolidated financial statements. However, there will be an impact on the Company’s financial results in the interim periods due to the timing of recognition for certain trade promotion spending. Due to a change in the timing of recognition for certain trade promotion spending, the Company recorded an immaterial cumulative effect of initially applying the new guidance as an adjustment to the fiscal year 2019 opening balance of Retained earnings. Results for periods beginning on or after July 1, 2018 are recognized and presented in accordance with Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the prior accounting guidance under Topic 605, "Revenue Recognition." The Company has made changes to its accounting policies, business processes, systems and controls to align with the new revenue recognition guidance and disclosure requirements. In March 2017, the FASB issued ASU No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires presenting the service cost component of net periodic benefit cost in the same income statement line items as other employee compensation costs arising from services rendered during the period. This standard also requires that other components of the net periodic benefit cost be presented separately from the line item(s) that includes service costs and outside of any subtotal of operating income, if one is presented, on a retrospective basis. The Company adopted this new guidance in the first quarter of fiscal year 2019 and the adoption did not have a material impact on the Company's consolidated financial statements. Following the adoption of this guidance, the Company records the non-service cost components of net periodic benefit cost in Other (income) expense, net. In March 2018, the FASB issued ASU No. 2018-05, “Income Taxes (Topic 740)-Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” which amends its guidance to address the initial accounting for the income tax effects of the Tax Act, which was enacted on December 22, 2017 (enactment date). This new guidance allows reasonable estimates of income tax effects to be reported as provisional amounts during the measurement period, which is one year from the enactment date, when the necessary information is not available, prepared, or analyzed in sufficient detail to complete the accounting. The amendments also added specific disclosure requirements. The Company has adopted this new guidance. The Company recorded $81 of provisional benefits in the second quarter of fiscal year 2018. Refer to Note 6 for more information. |
Fair Value Measurements | Fair Value Measurements Financial assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets are required to be classified and disclosed in one of the following three categories of the fair value hierarchy: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions. As of September 30, 2018 and June 30, 2018, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis included derivative financial instruments, which were classified as either Level 1 or Level 2, and trust assets to fund the Company’s nonqualified deferred compensation plans, which were classified as Level 1. |
Segment Results | The Company operates through strategic business units that are aggregated into four reportable segments based on the economics and nature of the products sold: Cleaning, Household, Lifestyle and International. Certain non-allocated administrative costs, interest income, interest expense and various other non-operating income and expenses are reflected in Corporate. Corporate assets include cash and cash equivalents, prepaid expenses and other current assets, property and equipment, other investments and deferred taxes. |
BUSINESS ACQUIRED (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair value of Nutranext's assets acquired and liabilities assumed and the related deferred income taxes as of the acquisition date. Due to the timing of the acquisition, the fair value of the assets acquired and liabilities assumed are based on a preliminary valuation and the Company’s estimates and assumptions are subject to change within the measurement period. The primary areas of the purchase price that are not yet finalized are related to goodwill and income taxes. The weighted-average estimated useful life of intangible assets subject to amortization is 15 years.
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INVENTORIES, NET (Tables) |
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Schedule of Inventories, Net | Inventories, net, consisted of the following as of:
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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) |
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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effects of Derivative Instruments Designated as Hedging Instruments on OCI | The effects of derivative instruments designated as hedging instruments on Other comprehensive income and Net earnings were as follows:
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Effects of Derivative Instruments Designated as Hedging Instruments on Net Earnings |
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Schedule of Assets and Liabilities for Fair Value Disclosure | The following table summarizes the fair value of the Company’s assets and liabilities for which disclosure of fair value is required:
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NET EARNINGS PER SHARE (EPS) (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares Outstanding and Antidilutive Shares | The following is the reconciliation of the weighted average number of shares outstanding (in thousands) used to calculate basic net EPS to those used to calculate diluted net EPS:
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Schedule of Share Repurchases Under Authorized Programs | Stock repurchases under the two stock repurchase programs were as follows for the periods indicated:
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COMPREHENSIVE INCOME (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Comprehensive Income | The following table provides a summary of Comprehensive income for the periods indicated:
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Schedule of Changes in Accumulated Other Comprehensive Net (Losses) Income | Changes in Accumulated other comprehensive net (loss) income by component were as follows for the three months ended September 30:
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EMPLOYEE BENEFIT PLANS (Tables) |
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Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Net Periodic Benefit Cost | The following table summarizes the components of net periodic benefit cost for the Company’s retirement income plans:
(1) The weighted average long-term expected rate of return on plan assets used in computing the fiscal year 2019 net periodic benefit cost is 4.33%. |
SEGMENT RESULTS (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Financial Information Relating to the Company's Segments | The table below presents reportable segment information and a reconciliation of the segment information to the Company’s consolidated Net sales and Earnings from continuing operations before income taxes, with amounts that are not allocated to the reportable segments reflected in Corporate.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Sep. 30, 2018 |
Dec. 31, 2017 |
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Accounting Policies [Abstract] | ||
Contract term | one year or less | |
Tax Cuts and Jobs Act of 2017, provisional income tax benefit | $ 81 |
DISCONTINUED OPERATIONS (Summary of (Losses) Gains from Discontinued Operations) (Details) - Clorox Venezuela [Member] - USD ($) $ in Millions |
3 Months Ended | 39 Months Ended | |
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Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2014 |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Minimum percentage of products required to be sold at frozen price | 66.67% | ||
Net sales | $ 0 | $ 0 |
BUSINESS ACQUIRED (Narrative) (Details) - USD ($) $ in Millions |
Apr. 02, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
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Business Acquisition [Line Items] | |||
Goodwill | $ 1,602 | $ 1,602 | |
Nutranext [Member] | |||
Business Acquisition [Line Items] | |||
Percentage of business acquired | 100.00% | ||
Amount paid for acquisition | $ 681 | ||
Goodwill | 411 | ||
Goodwill expected to be tax deductible | $ 363 | ||
The weighted-average estimated useful life of intangible assets subject to amortization | 15 years | ||
Lifestyle [Member] | Nutranext [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 309 | ||
Household [Member] | Nutranext [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 102 |
BUSINESS ACQUIRED (Fair Value Of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Jun. 30, 2018 |
Apr. 02, 2018 |
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Business Acquisition [Line Items] | |||
Goodwill | $ 1,602 | $ 1,602 | |
Nutranext [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 411 | ||
Property, plant and equipment | 49 | ||
Working capital, net | 23 | ||
Deferred income taxes | (20) | ||
Consideration paid | 681 | ||
Customer Relationships [Member] | Nutranext [Member] | |||
Business Acquisition [Line Items] | |||
Other intangible assets | 75 | ||
Trademarks [Member] | Nutranext [Member] | |||
Business Acquisition [Line Items] | |||
Other intangible assets | 143 | ||
Lifestyle [Member] | Nutranext [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | 309 | ||
Household [Member] | Nutranext [Member] | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 102 |
INVENTORIES, NET (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Jun. 30, 2018 |
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Inventory Disclosure [Abstract] | ||
Finished goods | $ 408 | $ 395 |
Raw materials and packaging | 135 | 129 |
Work in process | 7 | 9 |
LIFO allowances | (31) | (27) |
Total | $ 519 | $ 506 |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Narrative) (Details) $ in Millions |
3 Months Ended | |
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Sep. 30, 2018
USD ($)
instrument
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Jun. 30, 2018
USD ($)
instrument
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Derivative [Line Items] | ||
Maximum duration, foreign exchange contracts | 2 years | |
Number of interest rate derivatives held | instrument | 0 | 0 |
Estimated amount of the existing net gain (loss) to be reclassified into earnings in the next 12 months | $ (3) | |
Derivative instruments subject to contractually defined counterparty liability position limits | $ 0 | |
Total Commodity Purchase Derivative Contracts [Member] | ||
Derivative [Line Items] | ||
Maximum duration, commodity contracts | 2 years | |
Notional amounts | $ 39 | $ 34 |
Cash margin balances amount | 2 | 2 |
Jet Fuel Swaps [Member] | ||
Derivative [Line Items] | ||
Notional amounts | 11 | 10 |
Soybean Oil Futures [Member] | ||
Derivative [Line Items] | ||
Notional amounts | 28 | 24 |
Purchases of Inventory [Member] | Foreign Exchange Contract [Member] | ||
Derivative [Line Items] | ||
Notional amounts | $ 39 | $ 50 |
INCOME TAXES (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||
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Sep. 30, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Income Tax Contingency [Line Items] | |||||
Effective tax rate on earnings from continuing operations | 21.50% | 31.30% | |||
Federal statutory tax rate | 28.10% | ||||
Remeasurement of deferred tax liabilities | $ 60 | ||||
Provisional on-time transition tax expense on accumulated foreign earnings, net of applicable foreign tax credits | 7 | ||||
Benefit related to current year taxable income | 28 | ||||
Total Tax Cuts and Jobs Act of 2017, provisional income tax benefit | $ 81 | ||||
Scenario, Forecast [Member] | |||||
Income Tax Contingency [Line Items] | |||||
Federal statutory tax rate | 21.00% |
NET EARNINGS PER SHARE (EPS) (Schedule of Weighted Average Number of Shares) (Details) - shares shares in Thousands |
3 Months Ended | |
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Sep. 30, 2018 |
Sep. 30, 2017 |
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Earnings Per Share [Abstract] | ||
Basic (in shares) | 127,803 | 129,019 |
Dilutive effect of stock options and other (in shares) | 2,143 | 2,490 |
Diluted (in shares) | 129,946 | 131,509 |
Antidilutive stock options and other (in shares) | 967 | 1,174 |
NET EARNINGS PER SHARE (EPS) (Share Repurchase Programs) (Details) shares in Thousands |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2018
USD ($)
repurchase_program
shares
|
Sep. 30, 2017
USD ($)
shares
|
May 31, 2018
USD ($)
|
|
Share Repurchase Programs [Line Items] | |||
Number of repurchase programs | repurchase_program | 2 | ||
$2 Billion Open-Market Purchase Program [Member] | |||
Share Repurchase Programs [Line Items] | |||
Authorized repurchase amount | $ 2,000,000,000 | ||
Value of shares repurchased | $ 78,000,000 | ||
Shares repurchased (in shares) | shares | 591 | ||
$750 Million Open-Market Purchase Program [Member] | |||
Share Repurchase Programs [Line Items] | |||
Value of shares repurchased | $ 0 | ||
Shares repurchased (in shares) | shares | 0 | ||
Evergreen Program [Member] | |||
Share Repurchase Programs [Line Items] | |||
Value of shares repurchased | $ 120,000,000 | $ 60,000,000 | |
Shares repurchased (in shares) | shares | 832 | 450 |
COMPREHENSIVE INCOME (Schedule of Comprehensive Income) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Stockholders' Equity Note [Abstract] | ||
Earnings from continuing operations | $ 210 | $ 192 |
Earnings (losses) from discontinued operations, net of tax | 0 | 0 |
Net earnings | 210 | 192 |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Foreign currency translation adjustments | (2) | 14 |
Net unrealized gains (losses) on derivatives | 1 | 5 |
Pension and postretirement benefit adjustments | 1 | 0 |
Total other comprehensive income (loss), net of tax | 0 | 19 |
Comprehensive income | $ 210 | $ 211 |
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted average long-term expected rate or return on plan assets | 4.30% | |
Other Postretirement Benefits Plan [Member] | Retirement Income Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 0 | $ 0 |
Interest cost | 6 | 6 |
Expected return on plan assets | (4) | (5) |
Amortization of unrecognized items | 2 | 3 |
Total | 4 | 4 |
UNITED STATES | Retirement Income Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discretionary contributions | $ 2 | $ 2 |
OTHER CONTINGENCIES AND GUARANTEES (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Loss Contingencies [Line Items] | |||
Liability for aggregate future remediation costs | $ 28 | $ 28 | |
Letter of credit | 9 | ||
Letter of credit, amount outstanding | 0 | ||
Alameda County, California Matter | |||
Loss Contingencies [Line Items] | |||
Liability for aggregate future remediation costs | $ 14 | 14 | $ 14 |
Remediation period | 30 years | ||
Maximum undiscounted costs | $ 28 | ||
Dickinson County, Michigan Matter | |||
Loss Contingencies [Line Items] | |||
Liability for aggregate future remediation costs | $ 12 | $ 12 | |
Remediation period | 30 years | ||
Percentage of liability for aggregate remediation and associated costs, other than legal fees | 24.30% |
SEGMENT RESULTS (Narrative) (Details) - reportable_segment |
3 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Concentration Risk [Line Items] | ||
Number of reportable segments | 4 | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Walmart Stores, Inc. [Member] | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 25.00% | 26.00% |
Label | Element | Value |
---|---|---|
Accounting Standards Update 2016-18 [Member] | ||
Restricted Cash | us-gaap_RestrictedCash | $ 2,000,000 |
Restricted Cash | us-gaap_RestrictedCash | $ 3,000,000 |
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