10-K

   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-K

                                   (Mark One)

        [X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                THE SECURITIES EXCHANGE ACT OF 1934

                     For the fiscal year ended June 30, 2001

                                       OR

        [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                THE EXCHANGE ACT OF 1934

         For the transmission period from _____________ to ____________

                         Commission file number 1-07151

                               THE CLOROX COMPANY
             (Exact name of registrant as specified in its charter)

                DELAWARE                               31-0595760
     (State or other jurisdiction of                (I.R.S. Employer
     incorporation or organization)                Identification No.)

       1221 Broadway, Oakland, CA                      94612-1888
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code: (510) 271-7000

Securities registered pursuant to Section 12(b) of the Act:

                                                 Name of each exchange
     Title of each class                          on which registered
     -------------------                        -----------------------
  Common Stock, $1 par value                    New York Stock Exchange
                                                    Pacific Exchange

Securities registered pursuant to Section 12(g) of the Act:  NONE.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                              Yes [X]    No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to


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Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

Aggregate market value of voting stock held by non-affiliates of the registrant
at July 31, 2001: $6,224,377,981. Number of shares of common stock outstanding
at July 31, 2001: 236,702,265.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's 2001 Annual Report to Shareholders ("Annual
Report") are incorporated by reference into Part I of this report. Portions of
the registrant's definitive Proxy Statement for the 2001 Annual Meeting of
Stockholders to be held on November 28, 2001, which will be filed with the
United States Securities and Exchange Commission within 120 days after the end
of the registrant's fiscal year ended June 30, 2001 ("Proxy Statement"), are
incorporated by reference into Part III of this report.

PART I

ITEM l. BUSINESS

(a) GENERAL DEVELOPMENT OF BUSINESS.

The Company (the term "Company" as used herein includes the registrant
identified on the facing sheet, The Clorox Company, and its subsidiaries, unless
the context indicates otherwise) was originally founded in Oakland, California
in 1913 as the Electro-Alkaline Company. It was reincorporated as Clorox
Chemical Corporation in 1922, as Clorox Chemical Co. in 1928, and as The Clorox
Company (an Ohio corporation) in 1957, when the business was acquired by The
Procter & Gamble Company. The Company was fully divested by The Procter & Gamble
Company in 1969 and, as an independent company, was reincorporated in 1973 in
California as The Clorox Company. In 1986, the Company was reincorporated in
Delaware.

For recent business developments, refer to the information set forth under the
caption "Management's Discussion and Analysis," on pages C-2 through C-10 of
Exhibit 99 hereto, incorporated herein by reference.

(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.

The Company has three business segments: U.S Household Products and Canada, U.S.
Specialty Products and International Operations. Financial information for the
last three fiscal years, including net sales, earnings before income taxes,
cumulative effect of


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change in accounting principle and identifiable assets, attributable to each of
the Company's industry segments is set forth in Note 16 - Industry Segment
Information of the Notes to the Consolidated Financial Statements, which appears
on pages C-34 and C-35 of Exhibit 99 hereto, incorporated herein by reference.

(c) NARRATIVE DESCRIPTION OF BUSINESS.

The Company's business operations, represented by the aggregate of its U.S.
Household Products and Canada, U.S. Specialty Products and International
Operations segments, include the production and marketing of non-durable
consumer products sold primarily through grocery and other retail stores. For
the most part, the factors necessary for an understanding of these three
segments are essentially the same.

PRINCIPAL PRODUCTS. The U.S. Household Products and Canada segment includes the
Company's household cleaning, bleach and other home care products, water
filtration products marketed in the United States, and all products marketed in
Canada. The U.S. Specialty Products segment includes the Company's charcoal,
automotive care, cat litter, insecticide, dressings, sauces, professional
products and food storage and disposal categories. Finally, the International
Operations segment, which includes the Company's overseas operations (excluding
Canada), exports and Puerto Rico, primarily focuses on the laundry, household
cleaning, automotive care and food storage and disposal categories. Principal
products, by segment, currently marketed in the United States and
internationally are listed on pages 21 and 22 of the Company's Annual Report
incorporated herein by reference. Each of the Company's segments accounted for
more than 10 percent of the Company's consolidated revenues during the last
three fiscal years, as shown in Note 16 - Industry Segment Information of the
Notes to the Consolidated Financial Statements, which appears on pages C-34 and
C-35 of Exhibit 99 hereto, incorporated herein by reference.

PRINCIPAL MARKETS - METHODS OF DISTRIBUTION. Most non-durable household consumer
products are nationally advertised and sold within the United States to grocery
stores through a network of brokers and to mass merchandisers, warehouse clubs,
military and other retail stores primarily through a direct sales force. The
Company also sells within the United States institutional versions of specialty
food and non-food products. Outside the United States, the Company sells
consumer products through subsidiaries, licensees, distributors and
joint-venture arrangements with local partners.


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SOURCES AND AVAILABILITY OF RAW MATERIALS. The Company has obtained ample
supplies of all required raw materials and packaging supplies, which, with a few
exceptions, were available from a wide variety of sources during fiscal year
2001. Polyethylene resin raw materials, which are particularly important for the
U.S. Specialty Products segment, were available from a wide variety of sources
during fiscal year 2001, and the Company has entered into financial instruments
with various maturities partially to stabilize the cost of its polyethylene
resin requirements. Contingency plans have been developed for any major
single-sourced supplier materials.

PATENTS AND TRADEMARKS. Although some products are covered by patents, the
Company does not believe that patents, patent licenses or similar arrangements
are material to its business. Most of the Company's brand name consumer products
are protected by registered trademarks. Its brand names and trademarks are
extremely important to its business, and the Company pursues a course of
vigorous action against apparent infringements.

SEASONALITY. The U.S. Specialty Products segment is the only portion of the
operations of the Company that has any significant degree of seasonality. Most
sales of the Company's charcoal briquets, insecticides, and automotive
appearance product lines occur in the first six months of each calendar year.
Working capital to carry inventories built up in the off-season and to extend
terms to customers is generally provided by internally-generated funds plus
commercial paper lines of credit.

CUSTOMERS AND ORDER BACKLOG. During fiscal years 2001, 2000 and 1999, revenues
from the Company's sales of its products to Wal-Mart Stores, Inc. and its
affiliated companies were 20%, 19% and 19%, respectively, of the Company's
consolidated net sales. Except for this relationship, the Company is not
dependent upon any other single customer or a small group of customers. Order
backlog is not a significant factor in the Company's business.

RENEGOTIATION. None of the Company's operations is subject to renegotiation or
termination at the election of the federal government.

COMPETITION. The markets for consumer products are highly competitive. Most of
the Company's products compete with other nationally advertised brands within
each


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category and with "private label" brands and "generic" non-branded products of
grocery chains and wholesale cooperatives. Competition is encountered from
similar and alternative products, many of which are produced and marketed by
major national concerns having financial resources greater than those of the
Company. Depending on the competitive product, the Company's products compete on
price, quality or other benefits to consumers.

A newly-introduced consumer product (whether improved or newly developed)
usually encounters intense competition requiring substantial expenditures for
advertising and sales promotion. If a product gains consumer acceptance, it
normally requires continuing advertising and promotional support to maintain its
relative market position.

RESEARCH AND DEVELOPMENT. The Company incurred expenses of approximately $67
million, $63 million and $63 million in fiscal years 2001, 2000 and 1999,
respectively, on research activities relating to the development of new products
or the maintenance and improvement of existing products. None of this research
activity was customer-sponsored.

ENVIRONMENTAL MATTERS. Historically, the Company has not made material capital
expenditures for environmental control facilities or to comply with
environmental laws and regulations. However, in general, the Company does
anticipate spending increasing amounts annually for facility upgrades and for
environmental programs. The amount of capital expenditures for environmental
compliance was not material in fiscal year 2001 and is not expected to be
material in the next fiscal year.

The Company is involved in certain other environmental matters, including
Superfund clean-up efforts at various locations. The potential cost to the
Company related to ongoing environmental matters is uncertain due to such
factors as: the unknown magnitude of possible pollution and clean-up costs; the
complexity and evolving nature of laws and regulations and their
interpretations; and the timing, varying costs and effectiveness of alternative
clean-up technologies. Based on its experience and without offsetting for
expected insurance recoveries or discounting for present value, the Company does
not expect that such costs individually and in the aggregate will represent a
material cost to the Company or affect its competitive position.

NUMBER OF PERSONS EMPLOYED. At the end of fiscal year 2001, approximately 11,000
people were employed by the Company.


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FORWARD-LOOKING STATEMENTS AND RISK FACTORS. Except for historical information,
matters discussed in this Form 10-K, including the Management's Discussion and
Analysis and statements about future growth, are forward-looking statements
based on management's estimates, assumptions and projections. In addition, from
time to time, the Company may make forward-looking statements relating to such
matters as anticipated financial performance, business prospects, new products,
research and development activities, plans for international expansion,
acquisitions, and similar matters. The Private Securities Litigation Reform Act
of 1995 provides a safe harbor for forward-looking statements. In order to
comply with the terms of the safe harbor, the Company notes that a variety of
factors could cause the Company's actual results and experience to differ
materially from the anticipated results or other expectations expressed in the
Company's forward-looking statements. These forward-looking statements are
uncertain. The risks and uncertainties that may affect operations, performance,
product development, and results of the Company's business, some of which may be
beyond the control of the Company, include those discussed elsewhere in this
Form 10-K, marketplace conditions and events, and the following:

OPERATING RESULTS MAY NOT MEET EXPECTATIONS. The Company cannot be sure that its
operating results will meet its expectations. The Company's operating results
will be influenced by a number of factors, including the following:

*  the introduction of new products and line extensions by the Company or its
   competitors;

*  the mix of products sold in a given quarter;

*  the Company's ability to control its internal costs and the cost of raw
   materials;

*  significant increases in energy costs;

*  changes in product pricing policies by the Company or its competitors;

*  changes in accounting policies; or

*  the impact of general economic conditions in the United States and in other
   countries in which the Company currently does business.

In addition, sales volume growth, whether due to acquisitions or to internal
growth, can place burdens on the Company's management resources and financial
controls that, in turn, can have a negative impact on operating results. To some
extent, the Company sets its expense levels in anticipation of future revenues.
If actual revenue falls short of these expectations, operating results are
likely to be adversely affected.


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FAILURE TO IMPLEMENT ERP SYSTEM COULD ADVERSELY IMPACT ORDER PROCESSING. The
Company is in the process of implementing enterprise resource planning system
software. This software is designed to improve internal systems and processes,
including order fulfillment. If the Company fails to successfully implement the
software, its order fulfillment process, and therefore its ability to take,
ship, bill for and collect for orders, could be adversely impacted.

OPERATIONS OUTSIDE THE UNITED STATES EXPOSE THE COMPANY TO UNCERTAIN CONDITIONS
IN OVERSEAS MARKETS. The Company believes that its sales outside the United
States, which were 19% of net sales in fiscal year 2001, are likely to increase
as a percentage of its total sales. As a result, the Company will increasingly
face risks associated with having foreign operations, including:

*  economic or political instability in its overseas markets; and

*  fluctuations in foreign currency exchange rates that may make the Company's
   products more expensive in its foreign markets or negatively impact its sales
   or earnings.

All of these risks could have a significant impact on the Company's ability to
sell its products on a timely and competitive basis in foreign markets and may
have a material adverse effect on the Company's results of operations or
financial position. The Company seeks to limit its foreign currency exchange
risks through the use of foreign currency forward contracts when practical, but
cannot be sure that this strategy will be successful. In addition, the Company's
operations outside the United States are subject to the risk of new and
different legal and regulatory requirements in local jurisdictions, potential
difficulties in staffing and managing local operations, credit risk of local
customers and distributors, and potentially adverse tax consequences.

INTEGRATION OF ACQUISITIONS AND MERGERS MAY NOT BE SUCCESSFUL. One of the
Company's strategies is to increase its sales volumes, earnings and the markets
it serves through the acquisition of, or merger with, other businesses in the
United States and internationally. There can be no assurance that the Company
will be able to identify, acquire, or profitably manage additional companies or
operations or successfully integrate recent or future acquisitions or mergers
into its operations. In addition, there can be no assurance that companies or
operations acquired will be profitable at the time of their acquisition or will
achieve sales levels and profitability that justify the investment made.

DISPOSITION OF NON-STRATEGIC BUSINESSES MAY NOT BE SUCCESSFUL.


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The Company engages in ongoing review of its portfolio of businesses. If it
decides that a business no longer supports the Company's strategic direction,
the Company may attempt to sell that business. There can be no assurance that
any such disposition will occur, that, if it occurs, it will be at a price
sufficient to recover the book value of the business disposed of or that the
proceeds will be sufficient to avoid earnings dilution.

FINANCIAL PERFORMANCE DEPENDS ON CONTINUOUS AND SUCCESSFUL NEW PRODUCT
INTRODUCTIONS. In most categories in which the Company competes, there are
frequent introductions of new products and line extensions. An important factor
in the Company's future performance will be its ability to identify emerging
consumer and technological trends and to maintain and improve the
competitiveness of its products. The Company cannot be sure that it will
successfully achieve those goals. Continued product development and marketing
efforts have all the risks inherent in the development of new products and line
extensions, including development delays, the failure of new products and line
extensions to achieve anticipated levels of market acceptance, and the cost of
failed product introductions.

GOVERNMENT REGULATIONS COULD IMPOSE MATERIAL COSTS. The manufacture, packaging,
storage, distribution and labeling of the Company's products and the Company's
business operations generally all must comply with extensive federal, state, and
foreign laws and regulations. For example, in the United States, many of the
Company's products are regulated by the Environmental Protection Agency, the
Food and Drug Administration and the Consumer Product Safety Commission. Most
states have agencies that regulate in parallel to these federal agencies. The
failure to comply with applicable laws and regulations in these or other areas,
including taxes, could subject the Company to civil remedies, including fines,
injunctions, recalls or asset seizures, as well as potential criminal sanctions,
any of which could have a material adverse effect on the Company. Loss of or
failure to obtain necessary permits and registrations could delay or prevent the
Company from introducing new products, building new facilities or acquiring new
businesses and could adversely affect operating results.

ENVIRONMENTAL MATTERS CREATE POTENTIAL LIABILITY RISKS. The Company must comply
with various environmental laws and regulations in the jurisdictions in which it
operates, including those relating to air emissions, water discharges, the
handling and disposal of solid and hazardous wastes and the remediation of
contamination associated with the use and disposal of hazardous substances. The
Company has


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incurred, and will continue to incur, capital and operating expenditures and
other costs in complying with those laws and regulations in the United States
and internationally. The Company is currently involved in or has potential
liability with respect to the remediation of past contamination in the operation
of some of its presently and formerly owned and leased facilities. In addition,
some of the Company's present and former facilities have been or had been in
operation for many years, and over that time, some of these facilities may have
used substances or generated and disposed of wastes that are or may be
considered hazardous. It is possible that those sites, as well as disposal sites
owned by third parties to which the Company has sent waste, may in the future be
identified and become the subject of remediation. It is possible that the
Company could become subject to additional environmental liabilities in the
future that could result in a material adverse effect on the Company's results
of operations or financial condition.

FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY COULD IMPACT OUR COMPETITIVENESS.
The Company relies on trademark, trade secret, patent and copyright laws to
protect its intellectual property. The Company cannot be sure that these
intellectual property rights can be successfully asserted in the future or will
not be invalidated, circumvented or challenged. In addition, laws of some of the
foreign countries in which the Company's products are or may be sold do not
protect the Company's intellectual property rights to the same extent as the
laws of the United States. The failure of the Company to protect its proprietary
information and any successful intellectual property challenges or infringement
proceedings against the Company could make it less competitive and could have a
material adverse effect on the Company's business, operating results and
financial condition.

(d)  FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC
OPERATIONS.

The following table shows net sales and assets by geographic area for the last
three fiscal years:

Net Sales By Geographic Area:



(Millions)                                 2001            2000            1999
----------                                ------          ------          ------
                                                                 
Foreign                                   $  734          $  767          $  737
United States                             $3,169          $3,222          $3,149



Assets at June 30:



(Millions)                                 2001            2000            1999
----------                                ------          ------          ------
                                                                 
Foreign                                   $1,134          $1,201          $1,091
United States                             $2,861          $3,152          $3,041



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ITEM 2. PROPERTIES

PRODUCTION FACILITIES. The Company operates production and major warehouse
facilities for its operations in 29 locations throughout the United States and
in 30 locations internationally. Most of the space is owned. Warehousing space
is leased from public service warehouses around the United States. The Company
also utilizes six domestic regional distribution centers for many of the
Company's products, which are operated by service providers. The Company closed
its manufacturing facility in Akron, Ohio in fiscal year 2001 in connection with
its sale of the fire logs business and has announced plans to close its
manufacturing facilities in Wrens, Georgia and Moose Jaw, Saskatchewan, Canada
during fiscal year 2002. The Company considers its manufacturing and warehousing
facilities to be adequate to support its business.

OFFICES AND R&D FACILITIES. The Company owns its general office building located
in Oakland, California. The Company also owns its Technical Center and Data
Center located in Pleasanton, California. The Company leases its research and
development center and its engineering research facility for Glad and GladWare
products, which are located in Willowbrook, Illinois, and Kennesauw, Georgia,
respectively. The Company also leases its research and development center for
STP products located in Brookfield, Connecticut. Leased sales and other office
facilities are located at a number of other locations.

ENCUMBRANCES. None of the Company's owned facilities are encumbered to secure
debt owed by the Company, except that the manufacturing facility in Belle,
Missouri, secures industrial revenue bond indebtedness incurred in relation to
the construction and upgrade thereof.

ITEM 3. LEGAL PROCEEDINGS

See the description of Environmental Matters in Item 1 above.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

EXECUTIVE OFFICERS OF THE REGISTRANT


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The names, ages as of July 31, 2001 and current positions of the executive
officers of the Company are set forth below:



    Name (Age) and Year Elected to
          Current Position                         Title and Current Position(s)
-----------------------------------------          -----------------------------
                                          
G. C. Sullivan       (61)      1992                Chairman of the Board and Chief Executive Officer

G. E. Johnston       (54)      1999                President and Chief Operating Officer

R. T. Conti          (46)      1999                Group Vice President

L. S. Peiros         (46)      1999                Group Vice President

K. M. Rose           (52)      1997                Group Vice President - Chief Financial Officer

P. D. Bewley         (54)      1998                Senior Vice President - General Counsel and Secretary

A. W. Biebl          (51)      1999                Senior Vice President - Product Supply

F. A. Tataseo        (47)      l999                Senior Vice President - Sales

J. M. Brady          (47)      1993                Vice President - Human Resources

C. M. Couric         (54)      2000                Vice President - General Manager, Seasonal, Food
                                                                      and Professional Products

W. L. Delker         (47)      1999                Vice President - Research & Development

W. L. Every-Burns    (48)      2001                Vice President - General Manager, Asia Pacific

G. S. Frank          (41)      2001                Vice President - Treasurer

D. J. Heinrich       (45)      2001                Vice President - Controller



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S. D. House          (40)      1999                Vice President - General Manager, Latin America

R. C. Klaus          (56)      1995                Vice President - Corporate Administration

D. G. Matz           (39)      1999                Vice President - General Manager, Laundry and
                                                                      Home Care

G. C. Roeth          (40)      2000                Vice President - Marketing

G. R. Savage         (45)      1999                Vice President - General Manager, Glad Products

S. S. Silberblatt    (49)      1999                Vice President - Corporate Communications and
                                                                      Public Affairs

D. G. Simpson        (47)      1997                Vice President - Strategy and Planning

K. R. Tandowsky      (43)      1998                Vice President - Chief Information Officer

S. A. Weiss          (44)      2000                Vice President - General Manager, Brita and Canada



There is no family relationship between any of the above named persons, or
between any of such persons and any of the directors of the Company or any
persons nominated for election as a director of the Company. See Item 10 of Part
III of this Form 10-K.

G. C. Sullivan, J. M. Brady and R.C. Klaus have been employed by the Company for
at least the past five years in the same respective positions as listed above.
The other executive officers have held the respective positions described below
for at least the past five years:

G. E. Johnston joined the Company in July 1981 as Regional Sales Manager -
Special Markets. Prior to his election as President and Chief Operating Officer
effective January 20, 1999, he was Group Vice President from July 1, 1996
through January 19, 1999, Vice President - Kingsford Products from November 17,
1993 through June 1996, and Vice President - Corporate Development from June
1992 through


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November 16, 1993.

R. T. Conti joined the Company in 1982 as Associate Region Sales Manager,
Household Products. Prior to his election as Group Vice President effective
September 1, 1999, he was Vice President - General Manager from July 1999
through August 1999, Vice President - Kingsford Products from July 1996 through
June 1999, and Vice President - International from June 1992 through June 1996.

L. S. Peiros joined the Company in 1982 as a brand assistant. He was elected
Group Vice President effective January 20, 1999. Prior to that, he served as
Vice President - Household Products from June 1, 1998 through January 19, 1999,
Vice President - Food Products from July 1995 through June 1998, and Vice
President - Corporate Marketing Services from September 1993 until July 1995.

K. M. Rose joined the Company in 1978 as a financial analyst. Prior to her
election as Group Vice President - Chief Financial Officer effective December 1,
1997, she was Vice President - Treasurer from July 1992 through November 1997.

P. D. Bewley joined the Company in February 1998 as Senior Vice President -
General Counsel and Secretary. From 1994 through January 1998, he was employed
by Nova Care, Inc., as Senior Vice President - General Counsel and Secretary,
and prior to that was employed by Johnson & Johnson as Associate General
Counsel.

A.W. Biebl joined the Company in January 1981 as Director of Manufacturing for
the Food Service Products Division. Prior to his election as Senior Vice
President - Product Supply effective September 1, 1999, he was Vice President -
Product Supply from May 1992 through August 1999.

F. A. Tataseo joined the Company in October 1994 as Vice President - Sales and
was elected as Senior Vice President - Sales effective September 1, 1999.

C. M. Couric joined the Company in 1973 as a brand assistant in the Household
Products marketing organization. Prior to his election in March 2000 as Vice
President - General Manager, Seasonal, Food and Professional Products, he was
Vice President - General Manager, Brita Products from July 1995 through March
2000, and had served as Director, Brita Operations since 1988.

W. L. Delker joined the Company as Vice President - Research & Development in
August 1999. Prior to that, he was General Manager of Six Sigma Quality for GE
Silicones, a division of GE Plastic, from February 1998 through July 1999, and
General Manager of Technology for GE Silicones from January 1994 through January
1998.


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W. L. Every-Burns joined the Company in 1999 as part of the First Brands
merger. Prior to his election as Vice President - General Manager, Asia
Pacific Division effective August 1, 2001, he was Vice President - General
Manager, Australia, New Zealand, Africa and Greater China from November 2000
through July 2001, Vice President - General Manager, Australia, New Zealand and
Africa from September 1999 through October 2000, and General Manager of the Glad
Products companies in Australia and New Zealand, previously known as
NationalPak, from July 1995 through September 1999.

G. S. Frank joined the Company in 1982 as a staff accountant. Prior to his
election as Vice President - Treasurer effective March 2001, he was Vice
President - Controller from October 1999 through February 2001, General Manager
- Korea from September 1998 through September 1999, Director of Finance -
Kingsford Products from 1997 through August 1998, Director of Finance - Armor
All Products from 1996 to 1997, Director of Finance - Food Products from 1995 to
1996, and Director of Corporate Financial Planning from 1994 to 1995.

D. J. Heinrich joined the Company in March 2001 as Vice President - Controller.
From October 1996 through February 2001, he was employed by Transamerica
Corporation, most recently as Senior Vice President - Treasurer of Transamerica
Finance Corporation. Prior to that, he was employed by Granite Management
Corporation, an indirect subsidiary of Ford Motor Company, as Senior Vice
President - Treasurer and Controller.

S. D. House joined the Company in 1983 as a staff accountant. Prior to his
election as Vice President - General Manager, Latin America effective July 1,
1999, he was Vice President - Treasurer from December 1, 1997 through June 1999,
and prior to that he had served as a Director of Finance for the international
business and also had held various positions in auditing, financial analysis and
forecasting.

D. G. Matz joined the Company in 1986 as a brand assistant in the Company's
Household Products marketing organization. He was elected as Vice President -
General Manager, Home Care effective September 1, 1999 (and his title was
changed to Vice President - General Manager, Laundry and Home Care effective
July 23, 2001). Prior to that, he was Category General Manager - Home Care from
February 1999 through August 1999, Director of Marketing - Home Care from
December 1997 through January 1999, Director of Marketing - Food Products and
Auto Care from August 1995 through November 1997, and Group Marketing Manager -
Laundry Care Additives from January 1994 through July 1995.

G. C. Roeth joined the company in 1987 as a brand assistant


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in the marketing organization. Prior to his election as Vice President -
Marketing effective April 1, 2000, he was Vice President - Brand Marketing from
October 1999 through March 2000; Marketing Director - Brita from February 1998
through September 1999; Group Marketing Manager for Brita from October 1996
through January 1998, and for Home Cleaning from January 1994 through September
1996.

G. R. Savage joined the Company in 1983 as an associate marketing manager. He
was elected Vice President - General Manager, Glad Products effective January
20, 1999. Prior to that, he served as Vice President - Food Products from
December 1, 1997 through January 19, 1999, and Director of Marketing for the
Household Products business from 1993.

S. S. Silberblatt joined the Company in 1980 in the marketing department for
Kingsford products. Prior to his election as Vice President - Corporate
Communications and Public Affairs in February 1999, he was Director of Business
Development.

D. G. Simpson joined the Company in 1979 in the brand management function. He
was elected Vice President - Strategy and Planning effective December 1, 1997.
Prior to that, he had served as head of corporate strategic planning.

K. R. Tandowsky joined the Company in 1981 as a staff accountant. He was elected
Vice President - Information Services effective February 7, 1998. Prior to that,
he had served as Director of Finance for the Kingsford products business from
1994 and Director of Corporate Finance, Treasury from 1992.

S. A. Weiss joined the Company in 1994 as an area general manager for the
Pacific Rim business. He was elected Vice President - General Manager, Brita and
Canada in March 2000. Prior to that, he was Vice President - General Manager,
Food & Professional Products from February 1999 to March 2000, Vice President -
Asia Middle East from June 1998 through January 1999 and he held the position of
Area General Manager Asia-Middle East from 1994 until his election as an
officer.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) MARKET INFORMATION.

The principal markets for the Company's common stock are the New York Stock
Exchange and the Pacific Exchange. The high and low sales prices quoted for New
York Stock Exchange-Composite Transactions Report for each quarterly period
during the past


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two fiscal years appears in Note 19-Quarterly Data (Unaudited), of the Notes to
the Consolidated Financial Statements, which appears on pages C-37 and C-38 of
Exhibit 99 hereto, incorporated herein by reference.

(b) HOLDERS.

The approximate number of record holders of the Company's common stock as of
July 31, 2001 was 15,365 based on information provided by the Company's transfer
agent.

(c) DIVIDENDS.

The amount of quarterly dividends paid with respect to the Company's common
stock during the past two fiscal years appears in Note 19-Quarterly Data
(Unaudited), of the Notes to the Consolidated Financial Statements, which
appears on pages C-37 and C-38 of Exhibit 99 hereto, incorporated herein by
reference.

ITEM 6. SELECTED FINANCIAL DATA

This information appears under "Five-Year Financial Summary," on page C-40 of
Exhibit 99 hereto, incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION

This information appears under "Management's Discussion and Analysis," on pages
C-2 through C-10 of Exhibit 99 hereto, incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This information appears under "Market-Sensitive Derivatives and Financial
Instruments" in the "Management's Discussion and Analysis," on pages C-8 and C-9
of Exhibit 99 hereto, incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

These statements and data appear on pages C-11 through C-39 of Exhibit 99
hereto, incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

None.

PART III

ITEM l0. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


                                    Page 16
   17
Information regarding each nominee for election as a director, including those
who are executive officers of the Company, appears under "Nominees for Election
as Directors" of the Proxy Statement, incorporated herein by reference.

Pursuant to Instruction 3 to Item 401(b) of Regulation S-K, information
regarding the executive officers of the registrant is reported in Part I of this
Report.

The information required by Item 405 of Regulation S-K appears under "Section
16(a) Beneficial Ownership Reporting Compliance" of the Proxy Statement,
incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 402 of Regulation S-K appears under
"Organization of the Board of Directors," "Compensation Interlocks and Insider
Participation," "Summary Compensation Table," "Options and Stock Appreciation
Rights," "Comparative Stock Performance," and "Pension Benefits" of the Proxy
Statement, all incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.

Information concerning the only entity or person known to the Company to be the
beneficial owner of more than 5% of its common stock appears under "Beneficial
Ownership of Voting Securities" of the Proxy Statement, incorporated herein by
reference.

(b) SECURITY OWNERSHIP OF MANAGEMENT.

Information concerning the beneficial ownership of the Company's common stock by
each nominee for election as a director and by all directors and executive
officers as a group appears under "Beneficial Ownership of Voting Securities" of
the Proxy Statement, incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information concerning transactions with directors, nominees for election as
directors, management and the beneficial owner of more than 5% of the Company's
common stock appears under "Certain Relationships and Transactions" of the Proxy
Statement, incorporated herein by reference.

PART IV


                                    Page 17
   18
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) (1)  Financial Statements:

         Consolidated Financial Statements and Independent Auditors' Report
         included in Exhibit 99 hereto, incorporated herein by reference:

           Consolidated Statements of Earnings for the years
           ended June 30, 2001, 2000 and 1999

           Consolidated Balance Sheets for the years ended
           June 30, 2001 and 2000

           Consolidated Statements of Stockholders' Equity for
           the years ended June 30, 2001, 2000 and 1999

           Consolidated Statements of Cash Flows for the years
           ended June 30, 2001, 2000 and l999

           Notes to Consolidated Financial Statements

           Independent Auditors' Report

    (2)  Financial Statement Schedules have been omitted because of the absence
         of conditions under which they are required, or because the information
         is shown elsewhere in this Form 10-K.

    (3)  See the Index to Exhibits that is included herein. The following are
         management contracts and compensatory plans or arrangements:

           Long-Term Compensation Program dated October 21, 1987, amended
           November 17, 1993 (Exhibit 10(ii) to the Annual Report on Form 10-for
           the year ended June 30, 1994)

           Officer Employment Agreement (form) (Exhibit 10(xi) to the Annual
           Report on Form 10-K for the year ended June 30, 1996)

           Officer Change of Control Employment Agreement (form)
           (Exhibit 10(xii) to the Annual Report on Form 10-K for
           the year ended June 30, 1996)

           Supplemental Executive Retirement Plan (July 17, 1991, amended May
           18, 1994, January 17, 1996 and January 19, 2000) (Exhibit 10(viii) to
           the Quarterly Report on Form 10-Q for the quarter ended March 31,
           2000)


                                    Page 18
   19
           Non-Qualified Deferred Compensation Plan (Exhibit 10(xiii)to the
           Annual Report on Form 10-K for the year ended June 30, 1996)

           The Clorox Company 1995 Performance Unit Plan (Exhibit 10(xiv) to the
           Annual Report on Form 10-K for the year ended June 30, 1996)

           The Clorox Company 1996 Stock Incentive Plan, amended and restated as
           of July 19, 2001 (filed as Exhibit 10(xii) to this Annual Report on
           Form 10-K for the year ended June 30, 2001)

           The Clorox Company 1996 Executive Incentive Compensation Plan,
           amended and restated as of July 1, 2001 (filed as Exhibit 10(xiii) to
           this Annual Report on Form 10-K for the year ended June 30, 2001)

           1993 Directors' Stock Option Plan dated November 17, 1993 (filed as
           Exhibit 10(xi) to the Annual Report on Form 10-K for the year ended
           June 30, 1994)

           The Clorox Company Independent Directors' Stock-Based Compensation
           Plan (Exhibit 10 (xix) to the Annual Report on Form 10-K for the year
           ended June 30, 1997)

           The Clorox Company Management Incentive Compensation Plan (filed as
           Exhibit 10(xvi) to this Annual Report on Form 10-K for the year ended
           June 30, 2001)

(b) Current Reports on Form 8-K during the fourth quarter of fiscal year 2001:

       None.

(c) Exhibits:

       Index to Exhibits follows.

(d) (Not applicable)

                                Index to Exhibits

(3)   (i)     Restated Certificate of Incorporation (filed as Exhibit 3(iii) to
              the Quarterly Report on Form 10-Q for the quarter ended December
              31, 1999, incorporated herein by reference)

      (ii)    Bylaws (restated) of the Company (filed as Exhibit 3(ii) to the
              Annual Report on Form 10-K for the year ended June 30, 1998



                                    Page 19
   20
              incorporated herein by reference)

(4)   Registrant agrees to file a copy of documents defining the rights of
      holders of long-term debt upon request of the Commission.

(10)  Material contracts:

      (i)     Long-Term Compensation Program dated October 21, 1987, amended
              November 17, 1993 (filed as Exhibit 10(ii) to the Annual Report on
              Form 10-K for the year ended June 30, 1994, incorporated herein by
              reference)

      (ii)    Agreement between Henkel KGaA and the Company dated June l8, l981
              (filed as Exhibit (l0)(v) to Form 8 dated August 11, l983,
              incorporated herein by reference)

      (iii)   Agreement between Henkel GmbH (now Henkel KGaA) and the Company
              dated July 3l, l974 (filed as Exhibit (l0)(vi) to Form 8 dated
              August 11, l983, incorporated herein by reference)

      (iv)    Agreement between Henkel KGaA and the Company dated July 16, 1986
              (filed as Exhibit B to Current Report on Form 8-K for March 19,
              1987, incorporated herein by reference)

      (v)     Agreement between Henkel KGaA and the Company dated March 18, 1987
              (filed as Exhibit A to Current Report on Form 8-K for March 19,
              1987, incorporated herein by reference)

      (vi)    Supplemental Executive Retirement Plan Restated (July 17, 1991,
              amended May 18, 1994, January 17, 1996 and January 19, 2000),
              (filed as Exhibit 10(viii) to the Quarterly Report on Form 10-Q
              for the quarter ended March 31, 2000, incorporated herein by
              reference)

      (vii)   1993 Directors' Stock Option Plan dated November 17, 1993 (filed
              as Exhibit 10(xi) to the Annual Report on Form 10-K for the year
              ended June 30, 1994, incorporated herein by reference)

      (viii)  Officer Employment Agreement (form) (filed as Exhibit 10(xi) to
              the Annual Report on Form 10-K for the year ended June 30, 1996,
              incorporated herein by reference)

      (ix)    Officer Change of Control Employment Agreement (form) (filed as
              Exhibit 10(xii) to the Annual Report on Form 10-K for the year
              ended June 30, 1996, incorporated herein by reference)


                                    Page 20
   21
      (x)     Non-Qualified Deferred Compensation Plan (filed as Exhibit
              10(xiii) to the Annual Report on Form 10-K for the year ended June
              30, 1996, incorporated herein by reference)

      (xi)    The Clorox Company 1995 Performance Unit Plan (filed as Exhibit
              10(xiv) to the Annual Report on Form 10-K for the year ended June
              30, 1996, incorporated herein by reference)

      (xii)   The Clorox Company 1996 Stock Incentive Plan, amended and restated
              as of July 19, 2001 (filed as Exhibit 10(xii) to this Annual
              Report on Form 10-K for the year ended June 30, 2001)

      (xiii)  The Clorox Company 1996 Executive Incentive Compensation Plan,
              amended and restated as of July 1, 2001 (filed as Exhibit 10(xiii)
              to this Annual Report on Form 10-K for the year ended June 30,
              2001)

      (xiv)   The Clorox Company Independent Directors' Stock-Based Compensation
              Plan (filed as Exhibit 10 (xix) to the Annual Report on Form 10-K
              for the year ended June 30, 1997, incorporated herein by
              reference)

      (xv)    Agreement between Henkel KGaA and the Company dated November 2,
              1999 (filed as Exhibit 10 (xix) to the Quarterly Report on Form
              10-Q for the quarter ended December 31, 1999, incorporated herein
              by reference)

      (xvi)   The Clorox Company Management Incentive Compensation Plan (filed
              as Exhibit 10(xvi) to this Annual Report on Form 10-K for the year
              ended June 30, 2001)

(13)  Excerpts of 2001 Annual Report to Stockholders

(21)  Subsidiaries of the Company

(23)  Deloitte & Touche LLP Independent Auditors' Consent

(24)  Power of Attorney (see pages 16 and 17)

(99)  Management's Discussion and Analysis and Financial Statements

SIGNATURES

Pursuant to the requirements of Section l3 or l5(d) of the Securities Exchange
Act of l934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                    Page 21
   22
THE CLOROX COMPANY

Date:  September 19, 2001           By:   /s/ G.C. Sullivan
                                          --------------------------------------
                                          G. C. Sullivan, Chairman of
                                          the Board and Chief
                                          Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Peter D. Bewley, Karen M. Rose, and Daniel J. Heinrich,
jointly and severally, attorneys-in-fact and agents, with full power of
substitution, for her or him in any and all capacities to sign any and all
amendments to this Form 10-K, and to file the same and all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact and agents, and his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of l934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.



Signature                 Title                                Date
---------                 -----                                ----
                                                         
/s/ G. C. Sullivan        Chairman of the Board & Director     September 19, 2001
------------------------- (Chief Executive Officer)
G. C. Sullivan

                          Director                             September 19, 2001
-------------------------
D. Boggan, Jr.

/s/ T. M. Friedman        Director                             September 19, 2001
-------------------------
T. M. Friedman

                          Director                             September 19, 2001
-------------------------
C. Henkel



                                    Page 22
   23

                                                          
                           Director                             September 19, 2001
-------------------------
W. R. Johnson

/s/ R. W. Matschullat      Director                             September 19, 2001
-------------------------
R. W. Matschullat

/s/ D. O. Morton           Director                             September 19, 2001
-------------------------
Dean O. Morton

                           Director                             September 19, 2001
-------------------------
K. Morwind

/s/ L. R. Scott            Director                             September 19, 2001
-------------------------
L. R. Scott

/s/ M. E. Shannon          Director                             September 19, 2001
-------------------------
M. E. Shannon

/s/ C. A. Wolfe            Director                             September 19, 2001
-------------------------
C. A. Wolfe

/s/ K. M. Rose             Group Vice President -               September 19, 2001
-------------------------  Chief Financial Officer
K. M. Rose                 (Principal Financial Officer)

/s/ D. J. Heinrich         Vice President-Controller            September 19, 2001
-------------------------  (Principal Accounting Officer)
D. J. Heinrich




                                    Page 23

EX-10.12

   1
                                                                   EXHIBIT 10.12

THE CLOROX COMPANY
1996 STOCK INCENTIVE PLAN

1. PURPOSES OF THE PLAN.

The purposes of this Stock Incentive Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to Employees and Consultants of the Company and its
Subsidiaries and to promote the success of the Company's business. Definitions
of capitalized terms used in the Plan are contained in the attached Glossary
which is an integral part of the Plan.

2. STOCK SUBJECT TO THE PLAN.

(a) Subject to the provisions of Section 9, below, the maximum aggregate number
of Shares which may be issued pursuant to Awards shall be 25.5 million Shares.
Notwithstanding the foregoing, (i) no more than twenty percent (20%) of the
total number of Shares available for grant under the Plan may be issued as
Restricted Stock, SARs, Dividend Equivalent Rights, Performance Shares or
Performance Units and (ii) any Shares issued pursuant to awards under the
Company's Executive Incentive Compensation Plan granted after the date of the
Board's adoption of the Plan shall reduce on a Share for Share basis the number
of Shares otherwise available under the Plan. The Shares to be issued pursuant
to Awards may be authorized, but unissued, or reacquired Common Stock.

(b) If an Award expires or becomes unexercisable without having been exercised
in full, or is surrendered pursuant to an Award exchange program, or if any
unissued Shares are retained by the Company upon exercise of an Award in order
to satisfy the exercise price for such Award or any withholding taxes due with
respect to such Award, such unissued or retained Shares shall become available
for future grant or sale under the Plan (unless the Plan has terminated). Shares
that actually have been issued under the Plan pursuant to an Award shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if unvested Shares are forfeited, or repurchased by
the Company at their original purchase price, such Shares shall become available
for future grant under the Plan.

3. ADMINISTRATION OF THE PLAN.

(a) PLAN ADMINISTRATOR.

(i) ADMINISTRATION WITH RESPECT TO EMPLOYEES WHO ARE DIRECTORS AND OFFICERS.

With respect to grants of Awards to Employees who are also Officers or Directors
of the Company, the Plan shall be


                                     Page 1
   2
administered by (A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy Applicable Laws
and to permit such grants and related transactions under the Plan to be exempt
from Section 16(b) of the Exchange Act in accordance with Rule16b-3. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board.

(ii) ADMINISTRATION WITH RESPECT TO OTHER EMPLOYEES AND CONSULTANTS. With
respect to grants of Awards to Employees and Consultants who are neither
Directors nor Officers of the Company, the Plan shall be administered by (A) the
Board or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws.

(iii) ADMINISTRATION WITH RESPECT TO COVERED EMPLOYEES. Notwithstanding the
foregoing, grants of Awards to any Covered Employee intended to qualify as
Performance-Based Compensation shall be made only by a Committee (or
subcommittee of a Committee) which is composed solely of two or more Directors
eligible under the Code to serve on a committee making Awards qualifying as
Performance-Based Compensation.

(b) POWERS OF THE ADMINISTRATOR. Subject to Applicable Laws and the provisions
of the Plan (including any other powers given to the Administrator hereunder),
and except as otherwise provided by the Board, the Administrator shall have the
authority, in its discretion:

(i) to select the Employees and Consultants to whom Awards may from time to time
be granted hereunder;

(ii) to determine whether and to what extent Awards are granted hereunder;

(iii) to determine the number of Shares to be covered by each Award granted
hereunder;

(iv) to approve forms of Award Agreement for use under the Plan;

(v) to determine the terms and conditions of any Award granted hereunder;

(vi) to amend the terms of any outstanding Award granted under the Plan,
provided that no such amendment shall reduce the exercise price of outstanding
Options, and provided further, that any amendment that would adversely affect
the Grantee's rights under an outstanding Award shall not be made without the
Grantee's written consent;


                                     Page 2
   3
(vii) to construe and interpret the terms of the Plan and Awards granted
pursuant to the Plan; and

(viii) to take such other action, not inconsistent with the terms of the Plan,
as the Administrator deems appropriate.

(c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions, determinations and
interpretations of the Administrator shall be final and binding on the Grantees
and any other holders of Awards intended by the Administrator to be affected
thereby.

4. ELIGIBILITY.

Awards other than Incentive Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Award may, if otherwise eligible,
be granted additional Awards. Awards may be granted to such Employees and
Consultants of the Company and its subsidiaries who are residing in foreign
jurisdictions as the Administrator in its sole discretion may determine from
time to time. The Administrator may establish additional terms, conditions,
rules or procedures to accommodate the rules or laws of applicable foreign
jurisdictions and to afford Grantees favorable treatment under such laws;
provided, however, that no Award shall be granted under any such additional
terms, conditions, rules or procedures with terms or conditions which are
inconsistent with the provisions of the Plan.

5. TERMS AND CONDITIONS OF AWARDS.

(a) TYPE OF AWARDS. The Administrator is authorized under the Plan to award any
type of arrangement to an Employee or Consultant that is not inconsistent with
the provisions of the Plan and that by its terms involves or might involve the
issuance of (i) Shares, (ii) an Option, a SAR or similar right with an exercise
or conversion privilege at a fixed or variable price related to the Common Stock
and/or the passage of time, the occurrence of one or more events, or the
satisfaction of performance criteria or other conditions, or (iii) any other
security with the value derived from the value of the Common Stock. Such awards
include, without limitation, Options, SARs, sales or bonuses of Restricted
Stock, Dividend Equivalent Rights, Performance Units or Performance Shares, and
an Award may consist of one such security or benefit, or two or more of them in
any combination or alternative.


                                     Page 3
   4
(b) DESIGNATION OF AWARD. Each Award shall be designated in the Award Agreement.
In the case of an Option, the Option shall be designated as either an Incentive
Stock Option or a Non-Qualified Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of Shares
subject to Options designated as Incentive Stock Options which become
exercisable for the first time by a Grantee during any calendar year (under all
plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess
Options, to the extent of the Shares covered thereby in excess of the foregoing
limitation, shall be treated as Non-Qualified Stock Options. For this purpose,
Incentive Stock Options shall be taken into account in the order in which they
were granted, and the Fair Market Value of the Shares shall be determined as of
the date the Option with respect to such Shares is granted.

(c) CONDITIONS OF AWARD. Subject to the terms of the Plan, the Administrator
shall determine the provisions, terms, and conditions of each Award including,
but not limited to, the Award vesting schedule, repurchase provisions, rights of
first refusal, forfeiture provisions, form of payment (cash, Shares, or other
consideration) upon settlement of the Award, and payment contingencies. In the
case of an Award (other than an Option or SAR) intended to qualify as
Performance-Based Compensation, the grant, exercise and/or settlement of such
Award shall be contingent upon achievement of preestablished performance goals,
which shall consist of one or more of the following performance criteria: total
shareholder return, stock price, Clorox Value Measure, cash value added,
economic value added, operating margin, asset turnover, sales growth, asset
growth, return on investment, earnings per share, return on equity, return on
assets, return on capital, operating cash flow, cost of capital, net income,
customer satisfaction, employee satisfaction, and personal management
objectives. Performance goals shall be objective and shall otherwise meet the
requirements of Code Section 162(m) and the regulations thereunder. Performance
goals may differ for Awards granted to any one Grantee or to different Grantees.
Achievement of performance goals in respect of Awards intended to qualify as
Performance-Based Compensation shall be measured over a performance period
specified in the Award of up to ten years, and the goals shall be established
not later than 90 days after the beginning of the performance period applicable
to the Award, or at such other date as may be required or permitted for
Performance-Based Compensation. The Award may provide that partial achievement
of the performance goal will result in a payment or vesting corresponding to the
degree of achievement as


                                     Page 4
   5
specified in the Award. The Administrator may, in its discretion, reduce the
amount of a settlement otherwise to be made in connection with an Award intended
to qualify as Performance-Based Compensation, but may not exercise discretion to
increase the award.

(d) DEFERRAL OF AWARD PAYMENT. The Administrator may establish one or more
programs under the Plan to permit selected Grantees the opportunity to elect to
defer receipt of consideration upon exercise of an Award, satisfaction of
performance criteria, or other event that absent the election would entitle the
Grantee to payment or receipt of Shares or other consideration under an Award.
The Administrator may establish the election procedures, the timing of such
elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts or Shares so deferred, and such other terms,
conditions, rules and procedures that the Administrator deems advisable for the
administration of any such deferral program.

(e) AWARD EXCHANGE PROGRAMS. The Administrator may establish one or more
programs under the Plan to permit selected Grantees to exchange an Award under
the Plan for one or more other types of Awards under the Plan on such terms and
conditions as established by the Administrator from time to time. In no event
may an award exchange program have the effect of reducing the exercise price of
an outstanding Option.

(f) TERM OF AWARD. The term of each Award shall be the term stated in the Award
Agreement, provided, however, that the term of an Award shall be no more than
ten (10) years from the date of grant thereof. However, in the case of an
Incentive Stock Option granted to a Grantee who, at the time the Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of
the Incentive Stock Option shall be five (5) years from the date of grant
thereof or such shorter term as may be provided in the Award Agreement.

(g) INDIVIDUAL OPTION, SAR LIMIT. The maximum aggregate number of Shares with
respect to which Options and SAR may be granted to any Employee in any fiscal
year of the Company shall be two million (2,000,000) Shares. The foregoing
limitation shall be adjusted proportionately in connection with any change in
the Company's capitalization pursuant to Section 9, below. This Section 5(g) is
intended to comply with the requirements for the award of Performance-Based


                                     Page 5
   6
Compensation applicable to stock options and stock appreciation rights and shall
be construed in accordance with the requirements of Section 162(m) of the Code
and the regulations thereunder.

(h) INDIVIDUAL PERFORMANCE-BASED COMPENSATION LIMIT FOR AWARDS OTHER THAN
OPTIONS AND SARS. The maximum value of any Award (other than an Option or SAR)
granted to any Employee in any fiscal year of the Company and intended to
qualify as Performance-Based Compensation shall be two million dollars
($2,000,000), calculated based upon the value of the Award assuming the
performance goal was met on the date of the grant of the Award. This Section
5(h) is intended to comply with the requirements for the award of
Performance-Based Compensation applicable to awards other than stock options and
stock appreciation rights and shall be construed in accordance with the
requirements of Section 162(m) of the Code and the regulations thereunder.

(i) TRANSFERABILITY OF AWARDS. Incentive Stock Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Grantee, only by the Grantee. Other Awards shall be transferable
to the extent provided in the Award Agreement.

(j) TIME OF GRANTING AWARDS. The date of grant of an Award shall for all
purposes be the date on which the Administrator makes the determination to grant
such Award, or such other date as is determined by the Administrator. Notice of
the grant determination shall be given to each Employee to whom an Award is so
granted within a reasonable time after the date of such grant.

6. AWARD EXERCISE OR PURCHASE PRICE, CONSIDERATION, AND TAXES.

(a) EXERCISE OR PURCHASE PRICE. The exercise or purchase price, if any, for an
Award shall be as follows:

(i) In the case of an Incentive Stock Option:

(A) granted to an Employee who, at the time of the grant of such Incentive Stock
Option owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be not less than one hundred ten percent (110%) of
the Fair Market Value per Share on the date of grant.

(B) granted to any Employee other than an Employee


                                     Page 6
   7
described in the preceding clause, the per Share exercise price shall be not
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.

(ii) In the case of a Non-Qualified Stock Option, the per Share exercise price
shall be not less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant unless otherwise determined by the Administrator, but
in no event less than eighty-five percent (85%) of the Fair Market Value per
Share on the date of grant.

(iii) In the case of any other Award, including Restricted Stock, such price, if
any, as determined by the Administrator.

(b) CONSIDERATION. Subject to Applicable Laws, the consideration to be paid for
the Shares to be issued upon exercise or purchase of an Award including the
method of payment, shall be determined by the Administrator (and, in the case of
an Incentive Stock Option, shall be determined at the time of grant). In
addition to any other types of consideration the Administrator may determine,
the Administrator is authorized to accept as consideration for Shares under the
Plan the following:

(i) cash;

(ii) check;

(iii) delivery of Grantee's promissory note with such recourse, interest,
security, and redemption provisions as the Administrator in its discretion
determines as appropriate;

(iv) surrender of Shares (including withholding of Shares otherwise deliverable
upon exercise of the Award) which have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Award shall be exercised (but only to the extent that such exercise of the Award
would not result in an accounting compensation charge with respect to the Shares
used to pay the exercise price unless otherwise determined by the
Administrator);

(v) delivery of a properly executed exercise notice together with such other
documentation as the Administrator and the broker, if applicable, shall require
to effect an exercise of the Award and delivery to the Company of the sale or
loan proceeds required to pay the exercise price and/or related withholding
taxes; or

(vi) any combination of the foregoing methods of payment.

(c) TAXES. No Shares shall be delivered under the Plan to any Grantee or other
person until such Grantee or other person has made arrangements acceptable to
the Administrator for the


                                     Page 7
   8
satisfaction of federal, state, and local income and employment tax withholding
obligations, including, without limitation, obligations incident to the receipt
of Shares or the disqualifying disposition of Shares received on exercise of an
Incentive Stock Option. Upon exercise of an Award, the Company shall withhold
from Grantee an amount sufficient to satisfy such tax obligations.

7. EXERCISE OF AWARD.

(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER.

(i) Any Award granted hereunder shall be exercisable at such times and under
such conditions as determined by the Administrator under the terms of the Plan
and specified in the Award Agreement; provided that no Award may be exercisable
prior to six (6) months from the date of grant.

(ii) An Award shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Award
by the person entitled to exercise the Award and full payment for the Shares
with respect to which the Award is exercised has been received by the Company.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to Shares subject to an
Award, notwithstanding the exercise of an Option or other Award. The Company
shall issue (or cause to be issued) such stock certificate promptly upon
exercise of the Award. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in the Award Agreement or Section 9, below.

(b) EXERCISE OF AWARD FOLLOWING TERMINATION OF EMPLOYMENT RELATIONSHIP.

(i) An Award may not be exercised after the termination date of such Award set
forth in the Award Agreement and may be exercised following the termination of a
Grantee's Continuous Service only to the extent provided in the Award Agreement.

(ii) Where the Award Agreement permits a Grantee to exercise an Award following
the termination of the Grantee's Continuous Service for a specified period, the
Award shall terminate to the extent not exercised on the last day of the
specified period or the last day of the original term of the Award whichever
occurs first.

(iii) Any Award designated as an Incentive Stock Option to the extent not
exercised within the time permitted by law


                                     Page 8
   9
for the exercise of Incentive Stock Options following the termination of a
Grantee's Continuous Service shall convert automatically to a Non-Qualified
Stock Option and thereafter shall be exercisable as such to the extent
exercisable by its terms for the period specified in the Award Agreement.

(iv) Notwithstanding the foregoing, in the event of termination of a Grantee's
Continuous Service after attaining age fifty-five (55) with ten (10) or more
years of Vesting Service, unless otherwise provided in the Award Agreement, each
outstanding Award held by such Grantee shall become fully vested and exercisable
and be released from any restrictions on transfer and repurchase or forfeiture
rights for all of the Shares at the time represented by such Award.

8. CONDITIONS UPON ISSUANCE OF SHARES.

(a) Shares shall not be issued pursuant to the exercise of an Award unless the
exercise of such Award and the issuance and delivery of such Shares pursuant
thereto shall comply with all Applicable Laws, and shall be further subject to
the approval of counsel for the Company with respect to such compliance.

(b) As a condition to the exercise of an Award, the Company may require the
person exercising such Award to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any Applicable
Laws.

9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any required action by
the stockholders of the Company, the number of Shares covered by each
outstanding Award, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Awards have yet been granted or which
have been returned to the Plan, as well as the price per share of Common Stock
covered by each such outstanding Award, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other similar event resulting in
an increase or decrease in the number of issued shares of Common Stock. Such
adjustment shall be made by the Administrator, and its determination in that
respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect,


                                     Page 9
   10
and no adjustment by reason hereof shall be made with respect to, the number or
price of Shares subject to an Award.

10. CORPORATE TRANSACTIONS/CHANGES OF CONTROL/SUBSIDIARY DISPOSITIONS.

(a) In the event of a Corporate Transaction, each Award which is at the time
outstanding under the Plan automatically shall become fully vested and
exercisable and be released from any restrictions on transfer and repurchase or
forfeiture rights, immediately prior to the specified effective date of such
Corporate Transaction, for all of the Shares at the time represented by such
Award. Effective upon the consummation of the Corporate Transaction, all
outstanding Awards under the Plan shall terminate unless assumed by the
successor company or its Parent.

(b) In the event of a Change of Control (other than a Change of Control which
also is a Corporate Transaction), each Award which is at the time outstanding
under the Plan automatically shall become fully vested and exercisable and be
released from any restrictions on transfer and repurchase or forfeiture rights,
immediately prior to the specified effective date of such Change of Control, for
all of the Shares at the time represented by such Award. Each such Award shall
remain so exercisable until the expiration or sooner termination of the
applicable Award term.

(c) The Administrator shall have the authority, exercisable either in advance of
any actual or anticipated Subsidiary Disposition or at the time of an actual
Subsidiary Disposition and either at the time of the grant of an Award or at any
time while an Award remains outstanding, to provide for the automatic full
vesting and exercisability of one or more outstanding unvested Awards under the
Plan and the termination of restrictions on transfer and repurchase or
forfeiture rights on such Awards, in connection with a Subsidiary Disposition,
but only with respect to those Grantees who are at the time engaged primarily in
Continuous Service with the subsidiary corporation involved in such Subsidiary
Disposition. The Administrator also shall have the authority to condition any
such Award vesting and exercisability or release from such limitations upon the
subsequent termination of the affected Grantee's Continuous Service with that
subsidiary corporation within a specified period following the effective date of
the Subsidiary Disposition. The Administrator may provide that any Awards so
vested or released from such limitations in connection with a Subsidiary
Disposition, shall remain fully exercisable until the expiration or sooner
termination of the Award.

(d) The portion of any Incentive Stock Option accelerated


                                    Page 10
   11
under this Section 10 in connection with a Corporate Transaction, Change of
Control or Subsidiary Disposition shall remain exercisable as an Incentive Stock
Option under the Code only to the extent the $100,000 dollar limitation of
Section 422(d) of the Code is not exceeded. To the extent such dollar limitation
is exceeded, the accelerated excess portion of such Option shall be exercisable
as a Non-Qualified Stock Option.

11. TERM OF PLAN.

The Plan shall become effective upon the earlier to occur of its adoption by the
Board or its approval by the stockholders of the Company. It shall continue in
effect for a term of ten (10) years unless sooner terminated.

12. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.

(a) The Board may at any time amend, suspend or terminate the Plan, provided
that no amendment shall, without the approval of the stockholders of the
Company, (i) increase the number of Shares available for Awards of Restricted
Stock, SARs, Dividend Equivalent Rights, Performance Shares or Performance Units
above the number specified under Section 2 of the Plan, (ii) extend the term of
Awards beyond ten (10) years from the date of grant, (iii) reduce the minimum
exercise price for Options below the price provided under Section 6 of the Plan,
(iv) allow Awards to be exercisable prior to six (6) months from the date of
grant or (v) extend the term of the Plan. To the extent necessary and desirable
to comply with Applicable Laws, the Company shall obtain stockholder approval of
any Plan amendment in such a manner and to such a degree as required.

(b) No Award may be granted during any suspension or after termination of the
Plan.

(c) Any amendment, suspension or termination of the Plan shall not affect Awards
already granted, and such Awards shall remain in full force and effect as if the
Plan had not been amended, suspended or terminated, unless mutually agreed
otherwise between the Grantee and the Administrator, which agreement must be in
writing and signed by the Grantee and the Company.

13.AMENDMENT TO PRIOR PLANS.

No Awards shall be granted under the Company's 1977 Stock Option and Restricted
Stock Plans and 1987 Long Term Compensation Program on or after stockholder
approval of the Plan.

14. RESERVATION OF SHARES.

(a) The Company, during the term of the Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient


                                    Page 11
   12
to satisfy the requirements of the Plan.

(b) The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

15. NO EFFECT ON TERMS OF EMPLOYMENT.

The Plan shall not confer upon any Grantee any right with respect to
continuation of employment or consulting relationship with the Company, nor
shall it interfere in any way with his or her right or the Company's right to
terminate his or her employment or consulting relationship at any time, with or
without cause.

16. STOCKHOLDER APPROVAL.

Continuance of the Plan with respect to the grant of Incentive Stock Options and
grants to Covered Employees shall be subject to approval by the stockholders of
the Company within twelve (12) months before or after the date the Plan is
adopted, and such stockholder approval shall be a condition to the right of a
Covered Employee to receive Performance-Based Compensation hereunder. Such
stockholder approval shall be obtained in the degree and manner required under
Applicable Laws.

GLOSSARY OF DEFINED TERMS

DEFINITIONS. As used in the Plan, the following definitions shall apply:

"ADMINISTRATOR" means the Board or any of the Committees appointed to administer
the Plan.

"AFFILIATE" and "ASSOCIATE" shall have the respective meanings ascribed to such
terms in Rule 12b-2 promulgated under the Exchange Act.

"APPLICABLE LAWS" means the legal requirements relating to the administration of
stock incentive plans, if any, under applicable provisions of federal securities
laws, state corporate and securities laws, the Code, and the rules of any
applicable stock exchange or national market system.

"AWARD" means the grant of an Option, SAR, Dividend Equivalent Right, Restricted
Stock, Performance Unit, Performance Share, or other right or benefit under the
Plan.


                                    Page 12
   13
"AWARD AGREEMENT" means the written agreement evidencing the grant of an Award
executed by the Company and the Grantee, including any amendments thereto.

"BOARD" means the Board of Directors of the Company.

"BUSINESS COMBINATION" means a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company or
the acquisition of assets of another corporation or entity, in each case,
unless, immediately following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Common Stock and outstanding Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than fifty percent (50%) of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the outstanding Common Stock and outstanding Voting Securities,
as the case may be, (ii) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, twenty percent (20%) or
more (or, in the case of Henkel, more than the percentage limit of the Company's
issued common stock agreed to in paragraph 4(a) of the June 18, 1981 agreement
between the Company and Henkel, as amended), of the then outstanding shares of
common stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination.

"CHANGE OF CONTROL" means a change in ownership or control of the Company
effected through either of the following transactions:

The acquisition by any Person of beneficial ownership (within the meaning of
Rule 13(d)(3) promulgated under the Exchange Act) of twenty percent (20%) or
more (or, in the case of Henkel, more


                                    Page 13
   14
than the percentage limit of the Company's issued common stock agreed to in
paragraph 4(a) of the June 18, 1981 agreement between the Company and Henkel, as
amended) of either (A) the then outstanding shares of Common Stock or (B) the
combined voting power of the then outstanding Voting Securities; provided,
however, that for purposes of this paragraph, the following acquisitions shall
not constitute a Change of Control: (W) any acquisition directly from the
Company, (X) any acquisition by the Company, including any acquisition which, by
reducing the number of shares outstanding, is the sole cause for increasing the
percentage of shares beneficially owned by any such Person or by Henkel to more
than the applicable percentage set forth above, (Y) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (Z) any acquisition pursuant to
a Business Combination which complies with clauses (i), (ii) and (iii) of the
definition of "Business Combination" above; or Directors constituting the
Incumbent Board cease for any reason to constitute at least a majority of the
Directors.

"CLOROX VALUE MEASURE" means an economic value added model the calculation of
which links profit to investment by including a capital charge for assets
employed in the business.

"CODE" means the Internal Revenue Code of 1986, as amended.

"COMMITTEE" means any committee appointed by the Board to administer the Plan.

"COMMON STOCK" means the common stock of the Company, as adjusted in accordance
with the provisions of Section 9.

"COMPANY" means The Clorox Company.

"CONSULTANT" means any person (other than an Employee) who is engaged by the
Company or any Parent or Subsidiary of the Company to render consulting or
advisory services to the Company or such Parent or Subsidiary.

 "CONTINUOUS SERVICE" means that the provision of services to the Company, any
Parent, or Subsidiary, in any capacity of Employee or Consultant is not
interrupted or terminated. Continuous Service shall not be considered
interrupted in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. A leave of absence approved by the
Company shall include sick leave, military leave, or any other personal leave
approved by an authorized representative of the Company. For purposes of
Incentive Stock Options, no such leave may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by


                                    Page 14
   15
statute or contract.

"CORPORATE TRANSACTION" means any of the following stockholder-approved
transactions to which the Company is a party:

      a Business Combination, or

      a complete liquidation or dissolution of the Company.

"COVERED EMPLOYEE" means an Employee who is a "covered employee" under Section
162(m)(3) of the Code at the time of an Award under the Plan.

"DIRECTOR" means a member of the Board.

"DISABILITY" means disability as defined in subsection 4.1(a) of The Clorox
Company Disability Plan for twelve (12) consecutive months.

"DIVIDEND EQUIVALENT RIGHT" means a right entitling the Grantee to compensation
measured by dividends paid with respect to Common Stock.

"EMPLOYEE" means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. The payment of a director's
fee by the Company shall not be sufficient to constitute "employment" by the
Company.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

"FAIR MARKET VALUE" means, as of any date, the value of Common Stock determined
as follows:

Where there exists a public market for the Common Stock, the Fair Market Value
shall be (A) the closing sales price for a Share for the last market trading day
prior to the time of the determination (or, if no sales were reported on that
date, on the last trading date on which sales were reported) on the New York
Stock Exchange, the NASDAQ National Market or the principal securities exchange
on which the Common Stock is listed for trading, whichever is applicable or (B)
if the Common Stock is not traded on any such exchange or national market
system, the average of the closing bid and asked prices of a Share on the NASDAQ
Small Cap Market, in each case, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or

In the absence of an established market of the type described above, for the
Common Stock, the Fair Market Value thereof shall be


                                    Page 15
   16
determined by the Administrator in good faith, and such determination shall be
conclusive and binding on all persons.

"GRANTEE" means an Employee who receives an Award under the Plan.

"HENKEL" means Henkel KGaA and any person controlled by Henkel KGaA.

"INCENTIVE STOCK OPTION" means an Option intended to qualify as a n incentive
stock option within the meaning of Section 422 of the Code.

"INCUMBENT BOARD" means Directors who (i) are Directors as of the date of Board
adoption of the Plan, (ii) were elected or nominated for election as Directors
by at least a majority of the Directors described in clause (i) who were still
in office at the time such election or nomination was approved by the Board, or
(iii) have been nominated as a representative of Henkel KGaA pursuant to the
agreement between Henkel KGaA and the Company dated July 16, 1986; provided that
a person shall not be deemed an Incumbent Board member if his or her initial
assumption of office as a Director was the result of an actual or threatened
election contest with respect to the election or removal of Directors, or other
actual or threatened solicitation of proxies or stockholder consents, by or on
behalf of a Person other than the Board.

"NON-QUALIFIED STOCK OPTION" means an Option not intended to qualify as an
Incentive Stock Option.

"OFFICER" means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

"OPTION" means a stock option granted pursuant to the Plan.

"PARENT" means a "parent corporation," whether now or hereafter existing, as
defined in Section 424(e) of the Code.

"PERFORMANCE-BASED COMPENSATION" means compensation qualifying as
"performance-based compensation" under Section 162(m) of the Code.

"PERFORMANCE SHARES" means Shares or an Award denominated in Shares which may be
earned in whole or in part upon attainment of performance criteria established
by the Administrator and which may be settled for cash, securities, or a
combination of cash and securities as determined by the Administrator.

"PERFORMANCE UNITS" means awards which may be earned in whole or in part upon
attainment of performance criteria established by the Administrator and which
may be settled for cash, securities or a combination of cash and securities as
determined by the Administrator.


                                    Page 16
   17
"PERSON" means any individual, entity or group within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act.

"PLAN" means this 1996 Stock Incentive Plan.

"RESTRICTED STOCK" means an award of Shares under the Plan to the Grantee for
such consideration, if any, and subject to such restrictions on transfer, rights
of first refusal, repurchase provisions, forfeiture provisions, and other terms
and conditions as established by the Administrator.

"RULE 16B-3" means Rule 16b-3 promulgated under the Exchange Act or any
successor thereto.

"SAR" means a stock appreciation right entitling the Grantee to Shares or cash
compensation measured by appreciation in the value of Common Stock.

"SHARE" means a share of the Common Stock.

"SUBSIDIARY" means a "subsidiary corporation," whether now or hereafter
existing, as defined in Section 424(f) of the Code.

"SUBSIDIARY DISPOSITION" means the disposition by the Company of its equity
holdings in any subsidiary corporation effected by a merger or consolidation
involving that subsidiary corporation, the sale of all or substantially all of
the assets of that subsidiary corporation or the Company's sale or distribution
of substantially all of the outstanding capital stock of such subsidiary
corporation.

"VESTING SERVICE" means vesting service as defined in The Clorox Company Pension
Plan.

"VOTING SECURITIES" means voting securities of the Company entitled to vote
generally in the election of Directors.


                                    Page 17

EX-10.13

   1
                                                                   EXHIBIT 10.13


THE CLOROX COMPANY
EXECUTIVE INCENTIVE COMPENSATION PLAN
Amended and Restated Effective
as of July 1, 2001

1. PURPOSE

The purpose of The Clorox Company Executive Incentive Compensation Plan (the
"Plan") is to provide an incentive for corporate officers and to recognize and
reward those officers. The Company's executive officers are eligible to earn
short-term incentive awards under this Plan and under the Company's Management
Incentive Compensation Plan.

2. DEFINITIONS

The following terms will have the following meaning for purposes of the Plan:

(a) "Award" means a bonus paid in cash, Stock and/or restricted Stock.

(b) "Board" means the Board of Directors of the Company.

(c) "Clorox Value Measure" means an economic value-added model the calculation
of which links profit to investment by including a capital charge for assets
employed in the business.

(d) "Code" means the Internal Revenue Code of 1986, as amended.

(e) "Committee" means the Employee Benefits and Management Compensation
Committee of the Board, or such other Committee designated by the Board to
administer the Plan provided that the Committee shall consist of two or more
persons, each of whom is an "outside director" within the meaning of Section
162(m) of the Code.

(f) "Company" means The Clorox Company.

(g) "Participant" means a corporate officer of the Company or a Subsidiary
selected by the Committee to participate in the Plan.

(h) "Performance Criteria" means the following measures of performance: total
shareholder return, Stock price, Clorox Value Measure, economic value added,
profit margin (gross or net), asset turnover, sales growth, asset growth, return
on investment, earnings per share, return on equity, return on assets, return on
capital, operating cash flow, cost of capital, net income, market share, working
capital, customer satisfaction, and employee satisfaction.


                                     Page 1
   2
A Performance Criterion may be applied by the Committee as a measure of the
performance of any, all, or any combination of the following: the Company, a
Subsidiary, a division, group or other unit of the Company or a Subsidiary, or a
particular product category or categories of the Company or a Subsidiary.

(i) "Performance Goal(s)" means the goal or goals established for a Participant
by the Committee in accordance with Section 4(a).

(j) "Stock" means common stock of the Company.

(k) "Subsidiary" means any corporation in which the Company, directly or
indirectly, controls 50 percent or more of the total combined voting power of
all classes of stock.

(l) "Target Award" means the amount of the target award established for each
Participant by the Committee in accordance with Section 4(a).

3. TERM

The Plan shall be effective as of July 1, 1996 and shall continue until June 30,
2006, subject to stockholders' approval unless reapproved by the Company's
stockholders or unless amended or terminated pursuant to Section 9 hereof.

4. AWARDS

(a) Within 90 days after the beginning of each fiscal year of the Company (a
"year"), the Committee will select Participants for the year and establish in
writing (i) an objective Performance Goal or Goals for each Participant for that
year based on one or more of the Performance Criteria, (ii) the specific Award
amounts that will be paid to each Participant if his or her Performance Goal or
Goals are achieved (the "Target Award") and (iii) the method by which such
amounts will be calculated. The Committee may specify as to each Target Award
the form of payment of the Award (cash, Stock, restricted Stock, and/or other
property), provided that if restricted Stock is offered as an incentive to
Participants to take some or all of their Award in Stock the amount of the
restricted Stock shall be specified and the Target Award, including such
restricted Stock, shall not exceed the maximum Award permitted under Section
4(b). The Target Award may provide for payment of all or part of the Target
Award in the case of retirement, death, disability or change of ownership of
control of the Company or a Subsidiary during the year.

(b) The maximum Award that may be paid to any Participant under the Plan for any
year will be $4 million.

(c) The Committee may reduce or eliminate, but may not increase, any Award
calculated under the methodology established in


                                     Page 2
   3
accordance with paragraph (a) in order to reflect additional considerations
relating to performance.

(d) As soon as practicable following each year while the Plan is in effect, the
Committee shall determine and certify, for each Participant, the extent to which
the Performance Goal or Goals have been met and the amount of the Award, if any,
to be made. Awards will be paid to the Participants following such certification
by the Committee and no later than ninety (90) days following the close of the
year with respect to which the Awards are made.

(e) The Company shall withhold from the payment of any Award hereunder any
amount required to be withheld for taxes.

5. TERMINATION OF EMPLOYMENT

Except as may be specifically provided in an Award pursuant to Section 4(a), a
Participant shall have no right to an Award under the Plan for any year in which
the Participant is not actively employed by the Company or its Subsidiaries on
June 30 of such year. In establishing Target Awards, the Committee may also
provide that in the event a Participant is not employed by the Company or its
Subsidiaries on the date on which the Award is paid, the Participant may forfeit
his or her right to the Award paid under the Plan.

6. ADMINISTRATION

The Plan will be administered by the Committee. The Committee will have the
authority to interpret the Plan, to prescribe rules relating to the Plan and to
make all determinations necessary or advisable in administering the Plan.
Decisions of the Committee with respect to the Plan will be final and
conclusive.

7. UNFUNDED PLAN

Awards under the Plan will be paid from the general assets of the Company, and
the rights of Participants under the Plan will be only those of general
unsecured creditors of the Company.

8. CODE SECTION 162(M)

It is the intent of the Company that all Awards under the Plan qualify as
performance-based compensation for purposes of Code Section 162(m)(4)(C) so that
the Company's tax deduction for such Awards is not disallowed in whole or in
part under Code Section 162(m). The Plan is to be applied and interpreted
accordingly.

9. AMENDMENT OR TERMINATION OF THE PLAN


                                     Page 3
   4
The Committee may from time to time suspend, revise, amend or terminate the
Plan; PROVIDED, that any such amendment or revision which requires approval of
the Company's shareholders in order to maintain the qualification of Awards as
performance-based compensation pursuant to Code Section 162(m)(4)(C) shall not
be made without such approval.

10. APPLICABLE LAW

The Plan will be governed by the laws of California.

11. NO RIGHTS TO EMPLOYMENT

Nothing contained in the Plan shall give any person the right to be retained in
the employment of the Company or any of its Subsidiaries. The Company reserves
the right to terminate any Participant at any time for any reason
notwithstanding the existence of the Plan.

12. NO ASSIGNMENT

Except as otherwise required by applicable law, any interest, benefit, payment,
claim or right of any Participant under the Plan shall not be sold, transferred,
assigned, pledged, encumbered or hypothecated by any Participant and shall not
be subject in any manner to any claims of any creditor of any Participant or
beneficiary, and any attempt to take any such action shall be null and void.
During the lifetime of any Participant, payment of an Award shall only be made
to such Participant. Notwithstanding the foregoing, the Committee may establish
such procedures as it deems necessary for a Participant to designate a
beneficiary to whom any amounts would be payable in the event of any
Participant's death.

13. STOCKHOLDER APPROVAL

This Plan shall be subject to approval by a vote of the stockholders of the
Company at the 2001 Annual Meeting, and such stockholder approval shall be a
condition to the right of any Participant to receive any benefits hereunder.


                                     Page 4

EX-10.16

   1
                                                                    EXHIBIT 16.1


THE CLOROX COMPANY
MANAGEMENT INCENTIVE COMPENSATION PLAN
As Amended and Restated Effective
as of July 1, 2001

1. PURPOSE

The purpose of The Clorox Company Management Incentive Compensation Plan (the
"Plan") is to attract and retain the best available personnel for positions of
substantial responsibility and to provide an incentive for officers and
employees of The Clorox Company (the "Company") and its subsidiaries and to
recognize and reward those officers and employees. The Company's executive
officers are eligible to earn short-term incentive awards under this Plan and
under the Company's Executive Incentive Compensation Plan.

2. DEFINITIONS

The following terms will have the following meaning for purposes of the Plan:

(a) "Award" means a bonus paid in cash.

(b) "Board" means the Board of Directors of the Company.

(c) "Chief Executive Officer" means the chief executive officer of the Company.

(d) "Committee" means the Employee Benefits and Management Compensation
Committee of the Board, or such other Committee designated by the Board to
administer the Plan.

(e) "Employee" means any person employed by the Company or any Subsidiary.

(f) "Executive Committee" means the Officers who are members of the Company's
management executive committee.

(g) "Officer" means a person who is an officer of the Company within the meaning
of Section 16 of the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder.

(h) "Participant" means an Employee selected by the Committee to participate in
the Plan.

(i) "Subsidiary" means any corporation in which the Company, directly or
indirectly, controls 50 percent or more of the total combined voting power of
all classes of stock.

(j) "Year" means a fiscal year of the Company.


                                     Page 1
   2
3. AWARDS

(a) Within 90 days after the beginning of each Year, the Committee will select
Participants for the Year and establish in writing the method by which the
Awards will be calculated for that Year. The Committee may provide for payment
of all or part of the Award in the case of retirement, death, disability or
change of ownership of control of the Company or a Subsidiary during the Year.

(b) For the Chief Executive Officer and the Executive Committee, the Committee
shall determine and certify the amount of the Award, if any, to be made. The
Committee may increase, decrease or eliminate, any Award calculated under the
methodology established in accordance with paragraph (a) in order to reflect
additional considerations relating to performance.

(c) For Participants (other than the Chief Executive Officer and the Executive
Committee), the Chief Executive Officer shall determine and certify the amount
of the Award, if any, to be made. The Chief Executive Officer may increase,
decrease or eliminate, any Award calculated under the methodology established in
accordance with paragraph (a) in order to reflect additional considerations
relating to performance.

(d) Awards will be paid to the Participants following certification and no later
than ninety (90) days following the close of the Year with respect to which the
Awards are made.

(e) The Company shall withhold from the payment of any Award hereunder any
amount required to be withheld for taxes.

4. TERMINATION OF EMPLOYMENT

Except as may be specifically provided in an Award pursuant to Section 3(a), a
Participant shall have no right to an Award under the Plan for any Year in which
the Participant is not actively employed by the Company or its Subsidiaries on
June 30 of such Year. When establishing Awards each Year, the Committee may also
provide that in the event a Participant is not employed by the Company or its
Subsidiaries on the date on which the Award is paid, the Participant may forfeit
his or her right to the Award paid under the Plan.

5. ADMINISTRATION

The Plan will be administered by the Committee. The Committee will have the
authority to interpret the Plan, to prescribe rules relating to the Plan and to
make all determinations necessary


                                     Page 2
   3
or advisable in administering the Plan. Decisions of the Committee with respect
to the Plan will be final and conclusive.

6. UNFUNDED PLAN

Awards under the Plan will be paid from the general assets of the Company, and
the rights of Participants under the Plan will be only those of general
unsecured creditors of the Company.

7. AMENDMENT OR TERMINATION OF THE PLAN

The Committee may from time to time suspend, revise, amend or terminate the
Plan.

8. APPLICABLE LAW

The Plan will be governed by the laws of California.

9. NO RIGHTS TO EMPLOYMENT

Nothing contained in the Plan shall give any person the right to be retained in
the employment of the Company or any of its Subsidiaries. The Company reserves
the right to terminate any Participant at any time for any reason
notwithstanding the existence of the Plan.

10. NO ASSIGNMENT

Except as otherwise required by applicable law, any interest, benefit, payment,
claim or right of any Participant under the Plan shall not be sold, transferred,
assigned, pledged, encumbered or hypothecated by any Participant and shall not
be subject in any manner to any claims of any creditor of any Participant or
beneficiary, and any attempt to take any such action shall be null and void.
During the lifetime of any Participant, payment of an Award shall only be made
to such Participant. Notwithstanding the foregoing, the Committee may establish
such procedures as it deems necessary for a Participant to designate a
beneficiary to whom any amounts would be payable in the event of any
Participant's death.


                                     Page 3

EX-13

   1
                                                                    EXHIBIT 13.1


As of 09/24/01

Principal Products

U.S. Household Products and Canada

Brita
Brita         Pour-through and faucet-mount water filtration systems,
              replacement filters; Fill & Go water-filtration bottle
              and replacement filter

Canada (Many U.S. brands are also sold in Canada)

Jets          Steel-wool soap pads

Roomate       Trash cans

Laundry and Home Care

Clorox        Liquid bleaches, outdoor bleach cleaner, disinfecting sprays and
              wipes, toilet bowl cleaners; Advantage smooth-pour and less-splash
              bleach; Stain Out laundry stain removers; FreshCare fabric
              refresher

Clorox
 Clean-Up     Dilutable, spray and gel household cleaners

Clorox 2      Dry and liquid color-safe bleaches

Formula 409   All-purpose spray cleaners, glass and surface cleaner,
              carpet cleaners
Handi-Wipes   Reusable cleaning cloths

Heavy-Wipes   Reusable cleaning cloths

Lestoil       Heavy-duty cleaner

Liquid-Plumr  Drain openers, buildup remover, septic-system treatment; Foaming
              Pipe Snake clog remover

Pine-Sol      Dilutable, all-purpose spray and floor spray cleaners

Soft Scrub    Mild-abrasive liquid and gel cleansers

S.O.S         Steel-wool soap pads, scrubber sponges; Tuffy
              mesh scrubbers

Tilex         Instant mildew remover, soap scum and bathroom cleaner; Fresh
              Shower daily shower cleaners

Wash'n Dri    Pre-moistened towelettes

U.S. Specialty Products

Auto Care

Armor All     Protectants, cleaners and wipes, tire- and wheel-care products,
              waxes, washes

Formula 409   Cleaners

Rain Dance    Waxes, washes

STP           Automotive additives; Son of a Gun appearance products
Tanner's
 Preserve     Leather cleaner, conditioning cream for leather

Tuff Stuff    All-purpose cleaner, spot and stain remover


                                     Page 1
   2

Cat Litter

EverClean     Clumping cat litter

Fresh Step    Clay, scoopable and silica-gel crystals cat litter, cat odor
              eliminator

Jonny Cat     Clay cat litter, liners

Scoop Away    Scoopable cat litter

Charcoal

Kingsford     Charcoal briquets, charcoal lighter; BBQ Bag single-use, lightable
              bag of charcoal briquets; Match Light instant-lighting charcoal
              briquets

Food Products

Hidden Valley Dressings and dip mixes; Salad Crispins seasoned mini-croutons

K C Master-
 piece        Barbecue sauces, marinades

Kitchen
 Bouquet      Browning and seasoning sauce and gravy aid

Glad

Glad          Freezer, sandwich and food storage bags, food wraps, ovenware;
              outdoor, indoor and recycling disposal bags, unscented and
              odor-fighting trash bags

GladWare      Containers

Insecticides

Black Flag    Ant, roach and other flying insect aerosols; Roach Motel

Combat        Ant and roach bait stations and aerosols, ant granules and
              stakes, roach gels

Professional Products

Clorox        Germicidal bleach, toilet bowl cleanser and disinfectant

Clorox
 Clean-Up     Dilutable cleaner

Combat        Insecticides

Formula 409   Cleaners

Glad          Food storage bags, wraps, trash bags

Hidden Valley Dressings

Himolene      Institutional bags and liners

K C Master-
 piece        Barbecue sauce

Kingsford     Charcoal briquets

Kitchen
 Bouquet      Browning and seasoning sauce and gravy aid

Liquid-Plumr  Drain opener

Maxforce      Ant and roach bait stations, granules and gels

Pine-Sol      Cleaner

S.O.S         Pot and pan detergent, steel-wool soap pads


                                     Page 2
   3

Tilex         Instant mildew remover, soap scum and bathroom cleaner

Principal Products Outside the United States and Canada
(Many U.S. brands are also sold internationally)

Asia-Pacific

Ant Rid       Insecticides

Astra         Disposable rubber gloves

Chux          Cleaning cloths, sponges and scourers, specialty
              cloths, disposable gloves

Clorox Gentle Color-safe bleach

Colour More   Color-safe bleach

Glad          Non-stick baking paper, ice cube bags, non-stick frying pan
              sheets, perforated wraps, aluminum foil, oven bags

Glad-Lock     Reclosable bags

Gumption      Hard paste cleaners

Home Mat      Insecticides

Home Keeper   Insecticides

Mono          Aluminum foil, trash bags, food bags, cling films

OSO           Aluminum foil, trash bags, food bags, cling films

Perfex        Disposable table cloths

Prestone      Coolant concentrate, brake fluid

Rota          Aluminum foil, trash bags, food bags, cling films

XLO           Sponges

Yuhanrox      Bleach

Latin America

Arco Iris     Laundry additives

Arela         Laundry additives, cleaners, waxes, candles

Atlas         Toilet bowl cleaners

Ayudin        Bleach, laundry additives, spray and gel cleaners, disinfecting
              sprays

Blanquita     Bleaches

Bon Bril      Cleaning utensils, liquid household cleaners

Brimax        Cleaners

Ceracol       Waxes

Clorinda      Bleaches, brooms, cleaning utensils

Clorisol      Bleaches

Fleur         Carpet cleaners

Fluss         Toilet bowl cleaners

Limpido       Bleaches

Los Conejos   Bleaches

Luminosa      Candles

Lustrillo     Cleaning utensils

Mistolin      Cleaners, waxes

Mortimer      Cleaning utensils

Pinexo        Cleaners

Pinoluz       Cleaners

Poett         Laundry additives, cleaners, air fresheners

Sabra         Cleaning utensils


                                     Page 3
   4

Sani          Cleaners

SBP           Insecticides

Sello Rojo    Bleaches

Selton        Insecticides

Super Globo   Bleaches, bags, wraps, cleaners, insecticides

Trenet        Laundry additives, fabric refreshers

X-14          Cleaners


                                     Page 4

EX-21

   1
EXHIBIT 21
(to Form 10-K)

THE CLOROX COMPANY
SUBSIDIARIES OF THE REGISTRANT

(100% owned unless otherwise indicated)



Subsidiaries                                   Jurisdiction of Incorporation
-----------------------                        -----------------------------
                                            
1216899 Ontario Inc.                           Canada

1221 Olux, LLC                                 Delaware

A&M Products Manufacturing                     Delaware
 Company

Aldiv Transportation, Inc.                     California

American Sanitary Company                      Cayman Islands
 (Overseas) Inc.

Amesco Ltd. (49%)                              Cayman Islands

Andover Properties, Inc.                       Delaware

Antifreeze Technology                          Delaware
 Systems, Inc.

Armor All Products GmbH                        Germany

The Armor All/STP Products Company             Delaware

Brita Canada Corporation                       Canada

Brita Canada (Holdings)                        Canada
 Corporation

Brita Manufacturing Company                    Delaware

The Brita Products Company                     Delaware

Chesapeake Assurance Limited                   Hawaii

Clorosul Ltda.                                 Brazil

Clorox Africa Holdings                         South Africa
 (Pty) Ltd.


                                     Page 1
   2

                                            
Clorox Africa (Pty) Ltd.                       South Africa

Clorox American Sanitary                       Costa Rica
 Company S.A.

Clorox Argentina S.A.                          Argentina

Clorox Australia                               Australia
 Pty Limited

Clorox (Barbados) Inc.                         Barbados

Clorox do Brasil Ltda.                         Brazil

The Clorox Company of Canada                   Canada
 Ltd.

Clorox Car Care Ltd.                           United Kingdom

Clorox (Cayman Islands) Ltd.                   Cayman Islands

Clorox Chile S.A.                              Chile

The Clorox China Company                       Delaware

Clorox de Colombia S.A.                        Germany

Clorox Commercial Company                      Delaware

Clorox (Europe) Financing S.a.r.l.             Luxembourg

The Clorox Far East Company                    Hong Kong
 Limited

Clorox Germany GmbH                            Germany

The Clorox (Guangzhou) Company                 People's Republic of China
 Limited (95%)

Clorox Holdings Pty Limited                    Australia

Clorox Hong Kong Limited                       Hong Kong

Clorox Hungary Liquidity                       Hungary
 Management Kft.

The Clorox International Company               Delaware

Clorox International Philippines,              The Philippines
 Inc.




                                     Page 2
   3

                                            
Clorox Japan Limited                           Japan

Clorox Korea Ltd.                              Korea

Clorox (Malaysia) Industries                   Malaysia
 Sdn. Bhd.

Clorox (Malaysia) Sdn. Bhd.                    Malaysia

Clorox de Mexico,                              Mexico
 S. de R. L. de C. V.

Clorox Mexicana,                               Mexico
 S. de R. L. de C. V.

Clorox Netherlands B. V.                       The Netherlands

Clorox New Zealand Limited                     New Zealand

Clorox del Pacifico S.A.                       Peru

Clorox de Panama S.A.                          Panama

The Clorox Pet Products Company                Texas

Clorox Products Manufacturing                  Delaware
 Company

Clorox Professional Products                   Delaware
 Company

The Clorox Company of Puerto Rico              Delaware

The Clorox Sales Company                       Delaware

Clorox Services Company                        Delaware

Clorox Servicios Corporativos,                 Mexico
 S. de R.L. de C.V.

The Clorox South Asia Company                  Delaware

Clorox Switzerland S.a.r.l.                    Switzerland

Clorox Uruguay S.A.                            Uruguay

CLX Realty Co.                                 Delaware

Comercial STP Ltda.                            Brazil

Corporacion Clorox de                          Venezuela
 Venezuela, S.A.




                                     Page 3
   4

                                            
EcuaClorox S.A.                                Ecuador

Electroquimicas Unidas S.A.C.I.                Chile

Evolution S.A. (51%)                           Uruguay

Fabricante de Productos                        Mexico
 Plasticos, S.A. de C.V.

First Brands (Bermuda) Ltd.                    Bermuda

First Brands do Brasil Ltda.                   Brasil

First Brands Corporation                       Delaware

First Brands (Guangzhou)                       People's Republic of China
  Ltd. (51%)

First Brands Mexicana,                         Mexico
 S.A. de C.V.

First Brands Zimbabwe Holdings                 Zimbabwe
 (Private) Ltd.

First Brands Zimbabwe                          Zimbabwe
 (Private) Ltd. (76%)

Forest Technology Corporation                  Delaware

Fully Will Limited                             Hong Kong

Glad Manufacturing Company                     Delaware

The Glad Products Company                      Delaware

Henkel Iberica, S.A. (20%)                     Spain

Himolene Incorporated                          Delaware

The Household Cleaning Products                Egypt
   Company of Egypt, Ltd. (49%)

The HV Food Products Company                   Delaware

HV Manufacturing Company                       Delaware

Invermark S.A.                                 Argentina

Jingles, LLC                                    Delaware




                                     Page 4
   5

                                            
Jonapurvco ULC                                 Nova Scotia

Kaflex S.A.                                    Argentina

Kingsford Manufacturing Company                Delaware

The Kingsford Products Company                 Delaware

Lerwood Holdings Limited                       British Virgin Islands

Lynley IFS-A LLC                               Delaware

The Mexco Company                              Delaware

Mohammed Ali Abudawood and                     Saudi Arabia
  Company for Industry (30%)

Multifoil Trading (Pty) Limited                South Africa

National Cleaning Products                     Saudi Arabia
  Company Limited (30%)

Pacico International Limited                   Hong Kong

Pacific Brands (Malaysia)                      Malaysia
 Sdn. Bhd.

Paulsboro Packaging, Inc.                      New Jersey

Percenta Enterprise Sdn. Bhd.                  Malaysia

Petroplus Produtos Automotivos                 Brazil
 S.A. (51%)

Petroplus Sul Comercio Exterior                Brazil
 S.A. (51%)

Polysak, Inc.                                  Connecticut

Productos Del Hogar,                           Dominican Republic
 C. por A.

PT Clorox Indonesia                            Indonesia

Renaissance:  A Resource Recovery              Canada
  Corporation

Risse Limited                                  Republic of Ireland

Sarah Resources Limited                        Canada

Sealapac Mfg.(Pvt) Limited                     South Africa




                                     Page 5
   6

                                            
Securapac (Pvt. (Ltd.)                         Zimbabwe

STP do Brasil Ltda.                            Brazil

STP First Brands Espana, S.L.                  Spain

STP Products Manufacturing Company             Delaware

STP Scientifically Tested                      Canada
 Products of Canada Ltd.

Traisen S.A.                                   Uruguay

United Cleaning Products Mfg. Co.              Yemen Arab Republic
 Ltd. (33%)

Yuhan-Clorox Co., Ltd. (50%)                   Korea

Zao Company "Clorox"                           Russia




                                     Page 6

EX-23.1

   1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in The Clorox Company Registration
Statements No. 333-75455 on Form S-3, and Nos. 33-41131 (Post-Effective
Amendments No. 1 and No. 2), 33-24582, 33-56565, 33-56563, 333-29375, 333-16969
and 333-44675 on Form S-8 of our report dated August 17, 2001 appearing in this
Annual Report on Form 10-K of The Clorox Company for the fiscal year ended June
30, 2001.

/s/ DELOITTE & TOUCHE LLP

Oakland, California
September 27, 2001

EX-99

   1

                                                                      EXHIBIT 99

FINANCIAL HIGHLIGHTS
THE CLOROX COMPANY



YEARS ENDED JUNE 30                                               2001       2000   % CHANGE
--------------------------------------------------------------------------------------------
IN MILLIONS, EXCEPT SHARE AND PER-SHARE AMOUNTS.
                                                                           
Net Sales(1)................................................  $  3,903   $  3,989      - 2%
Earnings before cumulative effect of change in accounting
  principle.................................................  $    325   $    394      -18%
Cumulative effect of change in accounting principle (net of
  tax benefit of $1)........................................        (2)        --       --
                                                              --------   --------     ----
Net Earnings................................................  $    323   $    394      -18%
                                                              ========   ========     ====
Stockholders' Equity........................................  $  1,900   $  1,794        6%
Per Common Share
  Basic
     Earnings before cumulative effect of change in
       accounting principle.................................  $   1.38   $   1.67      -17%
     Cumulative effect of change in accounting principle....     (0.01)        --       --
                                                              --------   --------     ----
  Net Earnings..............................................  $   1.37   $   1.67      -18%
                                                              ========   ========     ====
  Diluted
     Earnings before cumulative effect of change in
       accounting principle.................................  $   1.36   $   1.64      -17%
     Cumulative effect of change in accounting principle....     (0.01)        --       --
                                                              --------   --------     ----
  Net Earnings..............................................  $   1.35   $   1.64      -18%
                                                              ========   ========     ====
  Dividends.................................................  $   0.84   $   0.80        5%
  Stockholders' Equity......................................  $   8.03   $   7.62        5%
Weighted Average Common Shares Outstanding (in thousands)
  Basic.....................................................   236,149    236,108        0%
  Diluted...................................................   239,483    239,614        0%


------------
(1) Coupon costs, previously reported as part of advertising expense, are
    included in net sales in fiscal year 2001. Net sales and advertising expense
    for fiscal year 2000 have been restated to conform to the fiscal year 2001
    presentation.

                                        1
   2

MANAGEMENT'S DISCUSSION AND ANALYSIS

RESULTS OF WORLDWIDE OPERATIONS

CONSOLIDATED RESULTS

DILUTED EARNINGS PER SHARE decreased to $1.35 in fiscal year 2001 from $1.64 in
fiscal year 2000, and NET EARNINGS decreased to $323 million from $394 million
for the fiscal year ended June 30, 2001, as compared to the year ago period,
principally due to lower net sales, inventory write-offs and restructuring and
asset impairment charges, partially offset by lower administrative costs.
Diluted earnings per share increased to $1.64 in fiscal year 2000 from $1.03 in
fiscal year 1999, and net earnings increased to $394 million from $246 million
for the fiscal year ended June 30, 2000, as compared to fiscal year 1999,
primarily due to lower merger, restructuring and asset impairment costs and to
improved earnings driven by volume growth and cost savings. Merger,
restructuring and asset impairment costs (including inventory write-offs) had
the effect of reducing diluted earnings per share by $0.27 in fiscal year 2001,
by $0.11 in fiscal year 2000, and by $0.60 in fiscal year 1999.

The Company's results reflect the January 29, 1999, merger with First Brands
Corporation ("First Brands"). That merger was accounted for as a pooling of
interests with all historical financial information having been restated.

NET SALES in fiscal year 2001 decreased 2% from fiscal year 2000 to $3,903
million despite an increase in volumes of 1%. The decline in net sales resulted
from a 1% increase in customer trade promotion spending, a 1% decrease in net
sales due to foreign currency weaknesses and a 1% decrease due to unfavorable
assortment and product mixes caused by a trend towards larger sizes as well as a
shift to lower-margin items. Volume gains were attributable to greater shipments
in the charcoal, cat litter, auto care and international businesses partly
offset by lower shipments experienced by the Company's U.S. Household Products
and Canada segment.

Starting in fiscal year 2001, coupon costs are deducted from sales. Previously,
such costs were included in advertising expense. Amounts for prior periods have
been reclassified for comparative purposes. Such reclassifications decreased net
sales by 2% in fiscal year 2000 and 3% in fiscal year 1999 from previously
reported amounts. This reclassification had no impact on net earnings or
earnings per share.

Net sales in fiscal year 2000 increased 3% from fiscal year 1999 to $3,989
million due to a 2% volume increase driven by product introductions and shipment
gains in certain products. These gains were partly offset by volume declines in
the Company's First Brands businesses resulting from decreased trade support and
coupon spending, elimination of non-core and low-margin items, changing the
pricing structure for the cat litter business, and by declines in shipments of
Tilex Fresh Shower daily shower cleaner products. Volume growth was positively
impacted by gains in shipments of Hidden Valley dressings, Brita faucet-mount
filter systems, and Kingsford and Match Light charcoal products, as well as the
acquisition of the Bon Bril cleaning utensils business in Latin America.

COST OF PRODUCTS SOLD as a percentage of sales increased to 59.4% in fiscal year
2001 from 56.4% in fiscal year 2000 mostly due to the provision for inventory
obsolescence of $54 million which included $39 million for inventories
associated primarily with discontinued product lines, packaging and unsuccessful
product launches. Higher energy, raw-material and packaging costs and an
unfavorable assortment mix due to a shift to larger sizes also contributed to
the increase. These write-offs and higher costs are somewhat mitigated by cost
savings generated from the Company's ongoing manufacturing initiatives,
transferring auto care and Scoop Away cat litter manufacturing in-house from
co-packers, and restructuring the Company's Asia operations.

Cost of products sold as a percentage of sales increased to 56.4% in fiscal year
2000 from 56.1% in fiscal year 1999. This increase was primarily due to higher
raw-material costs, start-up costs associated with the introduction of products,
and the provision for inventory obsolescence of $15 million, which included a
charge of $4 million relating to the write down of the Company's fire logs
inventory to its net realizable value.

                                        2
   3

These increases were partially offset by cost-savings initiatives and
trade-spending efficiencies in the former First Brands businesses.

SELLING AND ADMINISTRATION EXPENSES declined 6% to $495 million in fiscal year
2001 from $525 million in fiscal year 2000. The decline represents lower
commissions due to renegotiated broker rates in certain of the domestic
businesses as well as the impact of the fiscal year 2000 acquisition of a
distribution business in Argentina, lower market-research expenditures,
reductions in corporate overhead and lower costs resulting from restructuring
the Company's Asia operations in the prior year. These savings are partially
offset by higher spending in Latin America to support volume growth. Selling and
administrative expenses declined by 5% to $525 million in fiscal year 2000 from
$554 million in fiscal year 1999 due to the ongoing benefit of including the
former First Brands businesses; savings from lower commission expense primarily
due to the consolidation of the Company's broker network; the consolidation of
the Company's logistic network; and bringing sales and distribution activities
in-house in major Latin America markets.

ADVERTISING EXPENSE as a percentage of sales was 9% in fiscal years 2001, 2000
and 1999. Advertising expense in fiscal year 2001 as compared with fiscal year
2000 reflects higher media expenditures to support the cat litter and Glad
businesses offset by decreased noncoupon promotional spending in the auto care
business. The increase in advertising expense in fiscal year 2000 as compared
with fiscal year 1999 of $14 million reflects higher media spending to support
new product launches.

MERGER, RESTRUCTURING AND ASSET IMPAIRMENT COSTS of $59 million, $36 million and
$180 million were recognized in fiscal years 2001, 2000 and 1999, respectively.
In fiscal year 2001, the $59 million of restructuring and asset impairment
reflects charges resulting from the Company's review of its operations, which it
announced in December 2000. The Company will be conducting this review over
calendar year 2001 and anticipates incurring additional charges associated with
actions that will streamline certain of the Company's manufacturing operations.

As previously announced, by the end of fiscal year 2002, the Company anticipates
that restructuring, asset impairment and inventory write-offs, resulting from
the Company's current operations review, will total approximately $200 million.
As of June 30, 2001, the Company has recognized $98 million, of which $59
million has been recorded for restructuring and asset impairment and $39
million, relating to inventory write-offs, has been included in cost of products
sold. Restructuring and asset impairment for fiscal year 2001 included $34
million for the write off of equipment no longer necessary due to changes in
technology, elimination of redundancies and discontinued product lines, $15
million for the closure of the Company's Wrens, Ga., cat litter plant and the
planned transfer of the Jonny Cat clay litter production to a third-party
manufacturer, $7 million for the write off of intangible assets, and $3 million
for severance and other restructuring costs.

In fiscal year 2000, the $36 million of charges included $23 million of First
Brands merger-related charges related to the consolidation of First Brands
distribution centers, relocation and retention bonuses paid to former First
Brands employees; $11 million of restructuring and asset impairment related to
the restructuring of the Company's Asia operations; and a $2 million asset
impairment charge related to the Company's fire logs business.

In fiscal year 1999, the $180 million of charges included $36 million of
merger-related charges recognized in connection with the First Brands merger,
$53 million of other restructuring costs and $91 million of provisions for asset
impairment. Restructuring activities in fiscal year 1999 primarily related to
the consolidation of administration and distribution functions; the reduction in
employee headcount primarily at the First Brands' headquarters location in
Danbury, Conn., and at sales offices; and the termination of related leases and
other contracts. Asset impairment losses recognized in fiscal year 1999 were for
the write off of software development and other costs incurred by First Brands
before the merger, and the write down, to expected realizable value, of certain
insecticide and international intangible assets.

INTEREST EXPENSE in fiscal year 2001 as compared with fiscal year 2000 decreased
by $10 million due to the Company's ability to reduce short-term borrowings
using excess cash flow from operations. Interest expense

                                        3
   4

in fiscal year 2000 as compared to fiscal year 1999 remained relatively flat
year over year. Rising interest rates in fiscal year 2000 were offset by the
effect of refinancing First Brands debt in fiscal year 1999.

OTHER EXPENSE, NET in fiscal year 2001 as compared with fiscal year 2000
increased by $12 million due to higher amortization of intangibles resulting
from acquisitions made in fiscal year 2001 and lower equity and royalty income.
Other expense, net in fiscal year 2000 as compared to fiscal year 1999 remained
unchanged year over year. Lower amounts of equity and royalty income were mostly
offset by decreased amortization of intangibles and higher interest income.

THE EFFECTIVE TAX RATE was 33.3%, 36.7% and 42.8% in fiscal years 2001, 2000 and
1999, respectively. The decrease in the tax rate from 36.7% in fiscal year 2000
to 33.3% in fiscal year 2001 was due primarily to the reversal of deferred tax
liabilities on foreign earnings as a result of the Company's increasing ability
to utilize foreign tax credits and due to the adjustment of prior year tax
accruals. The reduction in the effective tax rate from 42.8% in fiscal year 1999
to 36.7% in fiscal year 2000 was primarily attributable to the tax effect of
merger, restructuring and asset impairment costs, which were not deductible in
fiscal year 1999.

THE CUMULATIVE EFFECT OF THE CHANGE IN ACCOUNTING PRINCIPLE of $2 million (net
of tax benefit of $1 million) was recognized as a transition adjustment due to
the implementation of the Statement of Financial Accounting Standards ("SFAS")
No. 133, "Accounting for Derivative Instruments and Hedging Activities," as
amended. The Company adopted SFAS No. 133, as amended, effective July 1, 2000.

SEGMENT RESULTS

U.S. HOUSEHOLD PRODUCTS AND CANADA

Fiscal Year 2001 vs. Fiscal Year 2000: U.S. Household Products and Canada's net
sales decreased by 3% from fiscal year 2000 and earnings before tax decreased by
6% from fiscal year 2000.

The decline in net sales was caused by a 2% decrease in volumes, an unfavorable
assortment mix resulting from a shift towards larger sizes, and higher
trade-promotion spending. The segment's volume decline follows a year in which
21 new products were introduced and the economy softened. Laundry and home
care's volume decline of 1% resulted from lower shipments of Clorox disinfecting
spray due to increased competitive activity and discontinued dry Clorox bleach
and Clorox FreshCare dry cleaning product; these volume declines were partly
offset by increases in shipments of Ultra Clorox liquid bleach. Brita's
shipments decreased 8% from the prior year despite the Company's advertising and
marketing efforts to improve shipments of Brita pour-through pitchers and
filters. Partially offsetting this decline were increased shipments of Brita
faucet-mount systems and Brita Fill & Go sports bottles.

The decline in net earnings before tax resulted from lower volumes, an
unfavorable assortment mix and higher raw material costs and trade spending,
partly offset by costs savings generated from manufacturing initiatives and
lower advertising costs.

Fiscal Year 2000 vs. Fiscal Year 1999: U.S. Household Products and Canada's
fiscal year 2000 net sales increased by 5% while earnings before tax decreased
by 2% from fiscal year 1999.

The improvement in net sales reflected the positive impact of product
introductions including Clorox disinfecting spray and wipes, Liquid-Plumr
Foaming Pipe Snake drain cleaner, Meadow Fresh Pine-Sol cleaner, Ultra Clorox
liquid bleach, Clorox FreshCare dry cleaning product and Brita Fill & Go sports
bottle. Partially offsetting these revenue gains were declines in net sales of
Tilex Fresh Shower daily shower cleaner.

Earnings before tax were impacted by higher product costs and advertising
expenditures. Higher resin and corrugated costs, start-up costs for product
launches, higher product costs in the Brita business due to an increase in
production of faucet-mount filter systems introduced in late fiscal year 1999
and additional components in the Brita pitchers, all contributed to the increase
in cost of products sold. Advertising expenditures also increased over the prior
year due to the introduction of Ultra Clorox liquid bleach and other new
products.

                                        4
   5

U.S. SPECIALTY PRODUCTS

Fiscal Year 2001 vs. Fiscal Year 2000: U.S. Specialty Products' fiscal year 2001
net sales decreased 1% from the prior year despite a 2% increase in volumes from
fiscal year 2000. Earnings before tax for the segment declined 8% from fiscal
year 2000.

The net sales decrease of 1% was due to higher trade-promotion spending. The 2%
volume growth was driven by higher volumes in the seasonal, cat litter and auto
care businesses, offset by declines in the food and Glad bags and wrap
businesses. Seasonal's increased volumes of 6% from the prior year reflect
greater charcoal shipments boosted by marketing support and a narrowing price
spread with private label products. The 5% increase in cat litter's volumes came
from the prior year launch of Fresh Step crystals cat litter, higher Scoop Away
cat litter volumes due to the price rollback in June of the prior year, and the
relaunch of Scoop Away cat litter along with increased advertising and trade
spending. These increases were partly offset by poorer performance early in the
year due to difficulties experienced in the execution of a packaging conversion
and a cat toy promotion. The 4% increase in auto care's shipments resulted from
the introduction of Armor All cleaning and protectant wipes. Offsetting volume
gains in these businesses were declines in the food and the Glad bags and wraps
businesses. The 5% volume decline in the food business reflects signs of slowing
growth in salad dressing consumption and intense competitive pressure in this
category that resulted in decreased consumption in Hidden Valley dressings. The
Glad bags and wraps business volumes decreased 2% from the prior year despite
signs of volume improvement seen in the fourth quarter of fiscal year 2001.
Driving the fourth quarter volume improvement were higher shipments in the
GladWare line of containers.

The decline in net earnings before tax resulted from an unfavorable assortment
mix, higher raw material and energy-related costs, costs associated with product
and packaging improvements for the relaunch of Scoop Away cat litter, and
greater advertising and trade spending. Offsetting these decreases were savings
achieved by transferring auto care and Scoop Away cat litter manufacturing
in-house from co-packers and other manufacturing cost-savings initiatives.

Fiscal Year 2000 vs. Fiscal Year 1999: U.S. Specialty Products' fiscal year 2000
net sales remained relatively flat from the prior year while earnings before tax
increased 8% over the prior year.

Net sales remained relatively flat due to lower volumes from the former First
Brands businesses offset by the favorable results of eliminating First Brand's
inefficient trade-promotion and coupon spending practices. Sales volumes
decreased in the auto care, Glad and cat litter businesses due to the Company's
strategic integration of former First Brands businesses. Auto care volumes
declined due to the elimination of approximately one-half of the STP product
line in an effort to focus on more strategic and higher-margin products. Volumes
in the Glad business were lower than the prior year due to the elimination of
non-core and low-margin items. Cat litter volumes also declined due to reducing
the number of cat litter items, decreasing spending for trade promotions and
changing the price structure. This decline in volume was offset by higher
volumes resulting from the introductions of K C Masterpiece marinades and
GladWare disposable container products and gains in shipments of Hidden Valley
dressings and Kingsford and Match Light charcoal products.

Earnings before tax increased 8% over the prior year due principally to
cost-savings initiatives. Cost savings were achieved from shifting the
manufacturing of certain auto care products from contract packers to Company
facilities, eliminating unprofitable product lines from the First Brands
businesses, reductions in inefficient coupon spending partially offset by
increased focus on media spending, and efficiencies gained from integrating
former First Brands businesses. These cost savings were partially offset by
higher resin costs.

INTERNATIONAL OPERATIONS

Fiscal Year 2001 vs. Fiscal Year 2000: International's earnings before tax
increased 4% while net sales decreased 4%. Despite a volume increase of 5%, the
decrease in net sales was due to foreign currency weaknesses in Australia, New
Zealand and most Latin America countries and higher trade-promotion spending.
Had it not been for the negative impact of foreign currency devaluations,
international's net sales

                                        5
   6

would have increased 2%. The increase in volumes from the prior year resulted
from the prior-year acquisitions of Bon Bril cleaning utensils businesses in
certain Latin American countries, the recent launch of Poett and other
fragranced cleaners in Argentina, Chile, Mexico, Brazil, Peru, Panama and
Venezuela, and increased insecticide consumption in Korea. The increase in
earnings before tax was generated from the restructuring of the Company's Asia
operations, lower commission expense resulting from the prior-year acquisition
of a distribution business in Argentina, and the Company's ongoing efforts to
improve operating margins.

Fiscal Year 2000 vs. Fiscal Year 1999: International's fiscal year 2000 earnings
before tax increased 35% from fiscal year 1999, due mostly to a 4% increase in
net sales as well as the impact of cost savings from the integration of the
sales force and distribution network in Latin America. Net sales reflect an 8%
increase in volumes driven primarily by new product launches in Latin America
and the acquisitions of Bon Bril cleaning utensils businesses in Latin America
and the Astra rubber gloves business in Australia, partly offset by higher
promotional spending.

CORPORATE, INTEREST AND OTHER

Fiscal Year 2001 vs. Fiscal Year 2000: "Corporate, Interest and Other" loss
before tax increased 15% from fiscal year 2000 to fiscal year 2001 due to the
recognition of restructuring and asset impairment costs, offset by lower
interest expense.

Fiscal Year 2000 vs. Fiscal Year 1999: "Corporate, Interest and Other" loss
before tax improved 24% from fiscal year 1999 to fiscal year 2000 mostly due to
the impact of merger-related charges incurred in fiscal year 1999, and not in
fiscal year 2000, and a decrease in pension costs resulting from changes in
actuarial assumptions.

FINANCIAL POSITION AND LIQUIDITY

CASH FLOWS FROM OPERATIONS

The Company's financial position and liquidity remains strong due to continuing
cash flow provided by operations during fiscal years 2001, 2000 and 1999. Cash
provided by operations was $747 million in fiscal year 2001, $681 million in
fiscal year 2000 and $617 million in fiscal year 1999.

Net cash provided by operations increased 10% in fiscal year 2001 as compared to
fiscal year 2000. The increase in cash provided by operations in fiscal year
2001 is attributable to improved management of working capital. Working capital
changes from fiscal year 2000 included decreases in accounts receivable and
inventories and an increase in accrued liabilities, offset partially by lower
accounts payable. The decrease in accounts receivable is due to a decrease in
net sales for the month of June 2001 versus June 2000 and successful collection
of some past due receivables. Lower inventory levels in fiscal year 2001 reflect
better inventory management and a decrease in seasonal product inventories.
Inventory levels were favorably impacted due to management's continuing efforts
to optimize inventories and to eliminate underperforming stock keeping units.
Seasonal product inventories were lower than planned due to stronger sales in
charcoal during the fourth quarter of this year versus the year ago quarter. The
decrease in accounts payable is related to lower raw-material purchases
consistent with the decline in inventories and the effect resulting from the
discontinuation of certain products.

The increase in cash provided by operations in fiscal year 2000, as compared to
fiscal year 1999, is principally attributable to higher earnings and increased
cash effects from an improved working capital position. Working capital changes
from fiscal year 1999 included increases in accounts receivable, inventories and
other current assets, and lower restructuring liabilities; these working capital
increases were offset by increases in accounts payable and accrued liabilities.
The 4% increase in accounts receivable over the prior year corresponded with a
5% increase in net sales in the fourth quarter. Higher inventory levels in
fiscal year 2000 reflected the impact from new product introductions, and a
build of charcoal inventories due to unseasonably cool weather. Other current
assets increased mostly due to the short-term classification of the

                                        6
   7

Argentine forward-purchase agreement, which matured in fiscal year 2001.
Increases in accounts payable and accrued liabilities are partly attributable to
higher purchases and accruals resulting from new product launches.

BORROWING INFORMATION

The Company's overall level of indebtedness (both short-term and long-term debt)
decreased $359 million from $1,363 million at June 30, 2000, to $1,004 million
at June 30, 2001, as excess cash provided by operations was used to reduce
commercial paper borrowings and repay a $142 million short-term note due in
March 2001. In February 2001, the Company increased its borrowings with the
issuance of $300 million of 6.125% unsecured senior unsubordinated notes due in
February 2011.

In fiscal year 2000, the Company reduced certain of its long-term financing
agreements, entered into a $236 million Canadian dollar denominated commercial
paper agreement that is hedged with a forward currency contract for the same
amount, and entered into a 7.38% short-term bank loan totaling $142 million,
which was paid when due in March 2001.

ACQUISITIONS

During fiscal year 2001, the Company invested $126 million in new businesses.
The Company acquired for $122 million (or $116 million, net of cash acquired)
from Brita GmbH the rights to the Brita trademark and other intellectual
property in North and South America, an increase in the Company's ownership from
50% to 100% in Brita Limited and Brita South America Inc., and certain other net
assets. The Company also increased its ownership to 100% in its two joint
ventures in Costa Rica, previously 49% and 51% owned. The investments in Brita
Limited, Brita South America Inc. and Costa Rica were previously accounted for
under the equity method of accounting and are fully consolidated from the date
of acquisition. These acquisitions were accounted for as purchases and were
funded using a combination of cash and debt.

During fiscal year 2000, the Company invested $120 million in new international
businesses. These acquisitions included the Bon Bril cleaning utensils
businesses in Colombia, Venezuela and Peru, the Agrocom S.A. distribution
business in Argentina, an increase in ownership to 100% in Clorox de Colombia
S.A. (formerly Tecnoclor S.A. and previously 72% owned) and the Astra rubber
gloves business purchased in Australia.

During fiscal year 1999, the Company invested $116 million in new businesses,
including the U.S. acquisition of the Handi Wipes and Wash'n Dri businesses.
International acquisitions included the Mistolin bleach and household cleaners
business in Venezuela, the Homekeeper insecticide business in Korea, the
Gumption household cleaner business in Australia, as well as a 12% increase in
ownership in the Company's joint venture in Colombia, Clorox de Colombia S.A.

CAPITAL EXPENDITURES

Capital expenditures were $192 million in fiscal year 2001, $158 million in
fiscal year 2000 and $176 million in fiscal year 1999. In fiscal year 2001,
capital expenditures included the Company's purchases of property, plant and
equipment and $41 million of expenditures for the Company's new enterprise
resource planning system and customer relationship management system. The
Company will be implementing these systems over the next three calendar years,
with total implementation costs estimated to be approximately $250 million.
Approximately $150 million represents incremental spending over and above
previously planned spending on systems projects. Total expenditures for the
fiscal year ended June 30, 2001 were $47 million, of which $41 million were
capitalized as property, plant and equipment and other assets and $6 million
were recorded as selling and administration expense.

                                        7
   8

COMMON STOCK DIVIDENDS, COMPANY STOCK PURCHASES AND STOCK AUTHORIZATION
INFORMATION

Dividends paid in fiscal years 2001, 2000 and 1999 were $199 million, or $0.84
per share; $189 million, or $0.80 per share; and $162 million, or $0.71 per
share, respectively. Also, on July 18, 2001, the Company announced a regular
quarterly dividend of $0.21 per share.

Treasury share purchases and related premiums were $10 million in fiscal year
2001; $135 million, or 3,123,000 shares in fiscal year 2000; and $33 million, or
800,000 shares in fiscal year 1999. Purchases made in fiscal year 2000 were
under a common stock repurchase and hedging program authorized in August 1999 by
the Board of Directors. The purpose of that program was to reduce or eliminate
dilution when shares are issued in accordance with the Company's various stock
compensation plans. Prior to August 1999, the Company had canceled a prior share
repurchase and hedging program (previously authorized in September 1996 by the
Board of Directors to offset the dilutive effects of employee stock exercises)
when it merged with First Brands. Purchases made in fiscal year 1999 were under
the share repurchase and hedging program authorized in September 1996. In August
2001, the Company's Board of Directors authorized the Company to repurchase up
to $500 million of the Company's common stock over a two- to three-year period.
This program is in addition to the program approved in August 1999.

At June 30, 2001, the Company had three share repurchase agreements totaling
approximately $246 million, whereby the Company contracted for future delivery
of 2,260,000 shares each on September 15, 2002 and on September 15, 2004, at a
strike price of $43 per share, and for future delivery of 1,000,000 shares on
November 1, 2003 at a strike price of $51.70 per share.

LIQUIDITY

In fiscal years 2001, 2000 and 1999, cash flows from operations exceeded cash
requirements to fund acquisitions, capital expenditures, dividends and scheduled
debt service. The Company believes that cash flow from operations, supplemented
by financing expected to be available from external sources, will provide
sufficient liquidity for the foreseeable future. At June 30, 2001, the Company
had credit agreements with available credit lines totaling $800 million, which
expire on dates through April 2002. These agreements are available for general
corporate purposes and for the support of additional commercial paper. There
were no borrowings under these agreements at June 30, 2001. The Company's credit
agreements have some limitations and restrictive covenants and require
maintenance of a minimum net worth of $704 million. The most restrictive of
covenants limits certain sale and leaseback transactions to the greater of $100
million or 15% of the Company's consolidated net tangible assets.

Based on the Company's working capital requirements, the current availability
under its credit agreements, and its ability to generate positive cash flows
from operations in the future, the Company does not believe that such
limitations will have a material effect on the Company's long-term liquidity.
The Company believes that it will have the funds necessary to meet all of its
above described financing requirements and all other fixed obligations. Should
the Company undertake strategic acquisitions, requiring funds in excess of its
current cash reserves and available credit lines, it might be required to seek
additional debt or equity financing. Depending upon conditions in the financial
markets, the availability of acceptable terms, and other factors, the Company
may consider the issuance of debt or other securities to finance acquisitions,
to refinance debt or to fund other activities for general business purposes.

MARKET-SENSITIVE DERIVATIVES AND FINANCIAL INSTRUMENTS

The Company is exposed to the impact of interest rates, foreign currency
fluctuations, commodity prices and changes in the market value of its
investments. The Company has certain restrictions on the use of derivatives,
including a prohibition of the use of any leveraged instrument. Derivative
contracts are entered into for non-trading purposes with several major credit
worthy institutions, thereby minimizing the risk of credit loss. In the normal
course of business, the Company employs practices and procedures to manage its
exposure to changes in interest rates, foreign currencies and commodity prices
using a variety of derivative instruments.
                                        8
   9

The Company's objective in managing its exposure to changes in interest rates,
foreign currencies and commodity prices is to limit the impact of fluctuations
on earnings, cash flow and, in the case of interest rate changes, to manage
interest rate exposure. To achieve its objectives, the Company uses swaps and
forward and futures contracts to manage its exposures to interest rate changes,
foreign currency fluctuations and commodity pricing risks.

For fiscal years 2001 and 2000, the Company's exposure to market risk has been
estimated using sensitivity analysis, which is defined as the change in the fair
value of a derivative or financial instrument assuming a hypothetical 10%
adverse change in market rates or prices. The results of the sensitivity
analysis are summarized below. Actual changes in interest rates or market prices
may differ from the hypothetical changes.

The Company has market risk exposure to changing interest rates. Interest rate
risk is managed through the use of a combination of fixed and floating rate
debt. Interest rate swaps may be used to adjust interest rate risk exposures
when appropriate, based on market conditions. These instruments have the effect
of converting fixed rate instruments to floating, or floating to fixed. Changes
in interest rates would result in gains or losses in the market value of the
Company's fixed-rate debt instruments and the Company's interest rate swap
agreements that convert debt instruments from floating to fixed, due to
differences between current market rates and the rates implicit for these
instruments. Based on the results of the sensitivity analysis, at June 30, 2001
and 2000, the Company's estimated market exposure for interest rates was $16
million and $10 million, respectively.

The Company seeks to minimize the impact of certain foreign currency
fluctuations by hedging transactional exposures with foreign currency forward
contracts and similar instruments. The Company's foreign currency transactional
exposures exist primarily with the Canadian, Australian and New Zealand dollars.
The Company also had certain positions in the Argentine peso, with no hedging
designations. The foreign exchange sensitivity analysis includes forward
contracts and other financial instruments affected by foreign exchange risk.
Based on the hypothetical change in foreign currency exchange rates, the net
unrealized losses at June 30, 2001, and 2000 would be $12 million and $23
million, respectively.

Commodity futures and swap contracts are used to manage cost exposures on
certain raw material purchases with the objective of ensuring relatively stable
costs for these commodities. The Company also had a commodity purchase contract
with no hedging designation. The commodity price sensitivity analysis includes
commodity futures and swap contracts affected by commodity price risk. Based on
the results of the sensitivity analysis, at June 30, 2001, and 2000, the
Company's estimated market exposure for commodity prices was $11 million and $14
million, respectively.

ENVIRONMENTAL MATTERS

The Company is committed to an ongoing program of comprehensive, long-term
environmental assessment of its facilities. This program is monitored by the
Company's Department of Health, Safety and Environment with guidance from legal
counsel. During each facility assessment, compliance with applicable
environmental laws and regulations is evaluated and the facility is reviewed in
an effort to identify possible future environmental liabilities. The Company
believes that there are no potential future environmental liabilities that will
have a material adverse effect on its financial position or future operating
results, although no assurance can be given with respect to the ultimate outcome
of any such matters. This premise is based on the accrual for such costs as of
June 30, 2001, and the probable future costs of such environmental claims and
actions without an offset for expected insurance recoveries or discounting for
present value.

ACCOUNTING AND REPORTING CHANGES

In December 1999, the Securities and Exchange Commission ("SEC") issued SEC
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements," as amended. SAB No. 101, as amended, summarizes the SEC's views in
applying generally accepted accounting principles to revenue recognition in
financial statements. The Company adopted SAB 101 at June 30, 2001, and it did
not have a material impact on the Company's financial statements.
                                        9
   10

Effective July 1, 2000, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging
Activities," as amended by SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities." SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. The statement requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. The affect of this new
standard was a reduction of net earnings of $2 million (net of tax benefit of $1
million), which was recognized as a cumulative effect of a change in accounting
principle and an increase in other comprehensive income of $10 million (net of
tax of $7 million). The ongoing effects will depend on future market conditions
and the Company's hedging activities.

In July 2000, the FASB Emerging Issues Task Force ("EITF") reached a consensus
on EITF No. 00-14, "Accounting for Coupons, Rebates and Discounts," which
addresses both the accounting for sales subject to rebates and revenue sharing
arrangements as well as coupon costs and discounts. The Company adopted EITF No.
00-14 effective June 30, 2001. Coupon and consumer rebate sales incentives are
now recognized as a reduction in net sales, rather than as expense. The impact
of adopting this consensus reduced both net sales and advertising expense by $94
million and $117 million, in fiscal years 2000 and 1999, respectively, and prior
years have been restated to reflect these changes.

In June 2001, the FASB issued SFAS No. 141, "Business Combinations," and SFAS
No. 142, " Goodwill and Other Intangible Assets." SFAS No. 141 will apply to all
business combinations that the Company enters into after June 30, 2001, and
eliminates the pooling-of-interests method of accounting. SFAS No. 142
eliminates the amortization of goodwill and intangible assets having indefinite
lives and requires that annual reviews for impairment be made for such assets on
a "fair value basis." Intangible assets with definitive lives will continue to
be amortized. This standard applies to all goodwill and intangible assets
acquired after June 30, 2001, as well as goodwill and intangible assets existing
at that date. The new standard will require the Company to review its goodwill
and intangible assets to determine which assets will no longer be amortized, and
which assets may require a change in their amortizable lives; and to assess
potential asset impairment, measured on a "fair value basis." The Company is
currently reviewing the new standards and adopted the new standards effective
July 1, 2001. The Company has not determined the effect on earnings of the
provision to cease amortization of goodwill, nor has it completed the required
tests for impairment. The Company had net brands, trademarks, patents and other
intangibles of $1,574 million at June 30, 2001, and had related amortization
expense of $60 million, $55 million and $61 million in fiscal years 2001, 2000
and 1999 respectively.

CAUTIONARY STATEMENT

Except for historical information, matters discussed above and in the financial
statements and footnotes, including statements about future plans, objectives,
expectations, growth or profitability, are forward-looking statements based on
management's estimates, assumptions and projections. These forward-looking
statements are subject to risks and uncertainties, and actual results could
differ materially from those discussed in this Appendix C to the Company's 2001
Proxy Statement. Important factors that could affect performance and cause
results to differ materially from management's expectations are described in
"Forward-Looking Statements and Risk Factors" in the Company's Annual Report on
Form 10-K for the fiscal year ending June 30, 2001, which is expected to be
filed with the SEC on or about September 28, 2001, and in subsequent SEC
filings. Those factors include, but are not limited to, marketplace conditions
and events, the Company's actual cost performance, implementation of the
Company's new enterprise resource planning and customer relationship management
systems, risks inherent in litigation and international operations, the success
of new products, the integration of acquisitions and mergers, divestiture of
non-strategic businesses and environmental, regulatory and intellectual property
matters. These forward-looking statements speak only as of the date of this
document.

                                        10
   11

CONSOLIDATED STATEMENTS OF EARNINGS
THE CLOROX COMPANY



                    YEARS ENDED JUNE 30                         2001       2000       1999
--------------------------------------------------------------------------------------------
      IN MILLIONS, EXCEPT SHARE AND PER-SHARE AMOUNTS.
                                                                           
Net Sales...................................................  $  3,903   $  3,989   $  3,886
                                                              --------   --------   --------
Costs and Expenses
  Cost of products sold.....................................     2,319      2,250      2,181
  Selling and administration................................       495        525        554
  Advertising...............................................       352        371        357
  Research and development..................................        67         63         63
  Merger, restructuring and asset impairment................        59         36        180
  Interest expense..........................................        88         98         97
  Other expense-net.........................................        36         24         24
                                                              --------   --------   --------
     Total Costs and Expenses...............................     3,416      3,367      3,456
                                                              --------   --------   --------
Earnings before income taxes and cumulative effect of change
  in accounting principle...................................       487        622        430
Income taxes................................................       162        228        184
                                                              --------   --------   --------
Earnings before cumulative effect of change in accounting
  principle.................................................       325        394        246
Cumulative effect of change in accounting principle (net of
  tax benefit of $1)........................................        (2)        --         --
                                                              --------   --------   --------
Net Earnings................................................  $    323   $    394   $    246
                                                              ========   ========   ========
Earnings per Common Share
  Basic
     Earnings before cumulative effect of change in
       accounting principle.................................  $   1.38   $   1.67   $   1.05
     Cumulative effect of change in accounting principle....     (0.01)        --         --
                                                              --------   --------   --------
  Net Earnings..............................................  $   1.37   $   1.67   $   1.05
                                                              ========   ========   ========
  Diluted
     Earnings before cumulative effect of change in
       accounting principle.................................  $   1.36   $   1.64   $   1.03
     Cumulative effect of change in accounting principle....     (0.01)        --         --
                                                              --------   --------   --------
  Net Earnings..............................................  $   1.35   $   1.64   $   1.03
                                                              ========   ========   ========
Weighted Average Common Shares Outstanding (in thousands)
  Basic.....................................................   236,149    236,108    235,364
  Diluted...................................................   239,483    239,614    240,002


                See Notes to Consolidated Financial Statements.

                                        11
   12

CONSOLIDATED BALANCE SHEETS
THE CLOROX COMPANY



                    YEARS ENDED JUNE 30                        2001      2000
------------------------------------------------------------------------------
      IN MILLIONS, EXCEPT SHARE AND PER-SHARE AMOUNTS.
                                                                  
ASSETS
Current Assets
  Cash and cash equivalents.................................  $  251    $  254
  Receivables-net...........................................     514       624
  Inventories...............................................     281       376
  Other current assets......................................      57       200
                                                              ------    ------
     Total Current Assets...................................   1,103     1,454
                                                              ------    ------
Property, Plant and Equipment -- Net........................   1,046     1,079
                                                              ------    ------
Brands, Trademarks, Patents and Other Intangibles -- Net....   1,574     1,536
                                                              ------    ------
Investments in Affiliates...................................      90       110
                                                              ------    ------
Other Assets................................................     182       174
                                                              ------    ------
Total.......................................................  $3,995    $4,353
                                                              ======    ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Notes and loans payable...................................  $  117    $  768
  Current maturities of long-term debt......................     202         5
  Accounts payable..........................................     314       378
  Accrued liabilities.......................................     436       387
  Income taxes payable......................................      --        36
                                                              ------    ------
     Total Current Liabilities..............................   1,069     1,574
                                                              ------    ------
Long-term Debt..............................................     685       590
                                                              ------    ------
Other Liabilities...........................................     194       204
                                                              ------    ------
Deferred Income Taxes.......................................     147       191
                                                              ------    ------
Stockholders' Equity
  Common stock, $1.00 par value, 750,000,000 shares
     authorized, 249,826,934 shares issued and 236,691,020
     and 235,361,130 shares outstanding at June 30, 2001,
     and 2000, respectively.................................     250       250
  Additional paid-in capital................................     195       175
  Retained earnings.........................................   2,142     2,020
  Treasury shares, at cost, 13,135,914 and 14,465,804 shares
     at June 30, 2001, and 2000, respectively...............    (441)     (451)
  Accumulated other comprehensive net losses................    (235)     (183)
  Unearned compensation.....................................     (11)      (17)
                                                              ------    ------
     Stockholders' Equity-Net...............................   1,900     1,794
                                                              ------    ------
Total.......................................................  $3,995    $4,353
                                                              ======    ======


                See Notes to Consolidated Financial Statements.

                                        12
   13

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
THE CLOROX COMPANY


                                                                                 ACCUMULATED
                                             ADDITIONAL                             OTHER
                                    COMMON    PAID-IN     RETAINED   TREASURY   COMPREHENSIVE     UNEARNED             COMPREHENSIVE
                                    STOCK     CAPITAL     EARNINGS    SHARES     NET LOSSES     COMPENSATION   TOTAL      INCOME
------------------------------------------------------------------------------------------------------------------------------------
IN MILLIONS, EXCEPT PER-SHARE
AMOUNTS.
                                                                                                  
Balance, June 30, 1998...             $249       $  8     $1,735     $(392)        $(116)         $(11)        $1,473
Comprehensive Income
  Net earnings...                                            246                                                  246      $246
  Translation adjustments...                                                         (43)                         (43)      (43)
  Minimum pension liability
    adjustments...                                                                    (1)                          (1)       (1)
                                                                                                                           ----
Total Comprehensive Income...                                                                                              $202
                                                                                                                           ====
  Dividends ($.71 per share)...                             (162)                                                (162)
  Employee stock plans and other...      1         68         (3)       33                          (9)            90
  Treasury stock purchased and
    related operations...                                              (33)                                       (33)
                                      ----       ----     ------     -----         -----          ----         ------
Balance, June 30, 1999...              250         76      1,816      (392)         (160)          (20)         1,570
Comprehensive Income
  Net earnings...                                            394                                                  394      $394
  Translation adjustments...                                                         (23)                         (23)      (23)
                                                                                                                           ----
Total Comprehensive Income...                                                                                              $371
                                                                                                                           ====
  Dividends ($.80 per share)...                             (189)                                                (189)
  Employee stock plans and other...                35         (1)       21                           3             58
  Treasury stock purchased and
    related  premiums...                          (12)                (135)                                      (147)
  Settlement of share repurchase
    obligations and option
    contracts...                                   76                   55                                        131
                                      ----       ----     ------     -----         -----          ----         ------
Balance, June 30, 2000...              250        175      2,020      (451)         (183)          (17)         1,794
Comprehensive Income
  Net earnings...                                            323                                                  323     $323
  Translation adjustments...                                                         (54)                         (54)     (54)
  Minimum pension liability
    adjustments...                                                                    (3)                          (3)      (3)
  Cumulative effect and change in
    valuation of derivatives
    (net of tax benefit of $2)...                                                      5                            5        5
                                                                                                                          ----
Total Comprehensive Income...                                                                                             $271
                                                                                                                          ====
  Dividends ($.84 per share)...                             (199)                                                (199)

  Employee stock plans and other...                20         (2)       20                           6             44
  Treasury stock purchased and
    related  premiums...                                               (10)                                       (10)
                                      ----       ----     ------     -----         -----          ----         ------
Balance, June 30, 2001...             $250       $195     $2,142     $(441)        $(235)         $(11)        $1,900
                                      ====       ====     ======     =====         =====          ====         ======



                See Notes to Consolidated Financial Statements.

                                        13
   14

CONSOLIDATED STATEMENTS OF CASH FLOWS
THE CLOROX COMPANY



                    YEARS ENDED JUNE 30                       2001    2000    1999
-----------------------------------------------------------------------------------
                        IN MILLIONS.
                                                                     
Operations:
  Net earnings..............................................  $ 323   $ 394   $ 246
  Adjustments to reconcile net earnings to net cash provided
     by operations:
     Depreciation and amortization..........................    225     201     202
     Deferred income taxes..................................    (41)    (16)    (29)
     Merger, restructuring and asset impairment.............     59       7      91
     Other..................................................     19      11     (14)
     Cash effects of changes in (excluding effects of
      businesses acquired):
       Accounts receivable..................................    123     (10)     24
       Inventories..........................................     90     (50)     48
       Other current assets.................................      8      (3)      2
       Accounts payable and accrued liabilities.............    (78)    144      (5)
       Income taxes payable.................................     19       3      52
                                                              -----   -----   -----
       Net cash provided by operations......................    747     681     617
                                                              -----   -----   -----
Investing Activities:
  Capital expenditures......................................   (192)   (158)   (176)
  Acquisitions, net of cash acquired........................   (126)   (120)   (116)
  Proceeds from disposals of property, plant and
     equipment..............................................      6       3      16
  Other.....................................................    (24)     15     (37)
                                                              -----   -----   -----
       Net cash used for investing..........................   (336)   (260)   (313)
                                                              -----   -----   -----
Financing Activities:
  Notes and loans payable, net..............................   (651)     34    (232)
  Collection of prepaid forward contract....................    150      --      --
  Long-term borrowings......................................    310       5     205
  Long-term repayments......................................    (19)   (117)    (16)
  First Brands receivables financing program -- net.........     --      --    (100)
  Cash dividends............................................   (199)   (189)   (162)
  Treasury stock purchased and related premiums.............    (10)   (135)    (33)
  Settlement of share repurchase obligations and option
     contracts..............................................     --      76      --
  Issuance of common stock for employee stock plans, and
     other..................................................     12      27      64
                                                              -----   -----   -----
       Net cash used for financing..........................   (407)   (299)   (274)
                                                              -----   -----   -----
Effect of exchange rate changes on cash and cash
  equivalents...............................................     (7)     --      --
                                                              -----   -----   -----
Net increase (decrease) in cash and cash equivalents........     (3)    122      30
Cash and cash equivalents:
  Beginning of year.........................................    254     132     102
                                                              -----   -----   -----
  End of year...............................................  $ 251   $ 254   $ 132
                                                              =====   =====   =====
Supplemental Cash Flow Information:
  Cash paid for:
     Interest (net of amounts capitalized)..................  $  83   $  92   $  98
     Income taxes...........................................    156     166      85
  Non-cash transactions:
     Share repurchase and other obligations.................  $  --   $  55   $  --
     Acquisitions:
       Fair value of assets net of cash acquired............    132     129     116
       Less liabilities assumed.............................     (6)     (9)     --
                                                              -----   -----   -----
       Acquisitions net of cash acquired....................  $ 126   $ 120   $ 116


                See Notes to Consolidated Financial Statements.

                                        14
   15

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

1. SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS AND PRINCIPLES OF CONSOLIDATION

The Company is principally engaged in the production and marketing of nondurable
consumer products through grocery stores, mass merchandisers and other retail
outlets. The consolidated financial statements include the statements of the
Company and its majority-owned and controlled subsidiaries. Minority investments
in foreign entities are accounted for under the equity method, the most
significant of which is an equity investment in Henkel Iberica, S.A. of Spain.
All significant intercompany transactions and accounts are eliminated in
consolidation.

The Company's results reflect the January 29, 1999 merger with First Brands
Corporation ("First Brands"), which was accounted for as a pooling of interests.
Pursuant to the merger agreement, First Brands stockholders obtained the right
to receive .349 of a share of the Company's common stock in exchange for each
share of First Brands common stock, with cash paid in lieu of fractional shares.
Pursuant to the merger, 40.3 million shares of First Brands common stock were
converted into 28.2 million shares of the Company's common stock. In addition,
options to acquire 1.8 million shares of First Brands' common stock were
converted to 1.2 million options to acquire shares of the Company's common
stock. In connection with the merger, the Company also assumed approximately
$435 of First Brands debt. All historical financial information has been
restated to include First Brands.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect reported
amounts and related disclosures. Actual results could differ from estimates and
assumptions made.

ACCOUNTING AND REPORTING CHANGES

In December 1999, the Securities and Exchange Commission ("SEC") issued SEC
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements," as amended. SAB No. 101, as amended, summarizes the SEC's views in
applying generally accepted accounting principles to revenue recognition in
financial statements. The Company adopted SAB 101 at June 30, 2001, and it did
not have a material impact on the Company's financial statements.

In March 2000, the Financial Accounting Standards Board ("FASB") issued guidance
on stock compensation issues in the form of FASB Interpretation No. 44,
"Accounting for Certain Transactions involving Stock Compensation, an
Interpretation of Accounting Principles Board ("APB") Opinion No. 25." The
interpretation clarifies the application of APB Opinion No. 25 for certain
issues. The Company adopted the interpretation beginning July 1, 2000, and it
did not significantly impact the fiscal year 2001 financial statements.

Effective July 1, 2000, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging
Activities," as amended by SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities." SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative instruments,
including certain

                                        15
   16
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

derivative instruments embedded in other contracts, and for hedging activities.
The statement requires that an entity recognize all derivatives as either assets
or liabilities in the statement of financial position and measure those
instruments at fair value. The affect of this new standard was a reduction of
net earnings of $2 (net of tax benefit of $1), which was recognized as a
cumulative effect of a change in accounting principle and an increase in other
comprehensive income of $10 (net of tax benefit tax of $7). The ongoing effects
will depend on future market conditions and the Company's hedging activities.

In July 2000, the FASB Emerging Issues Task Force ("EITF") reached a consensus
on EITF No. 00-14, "Accounting for Coupons, Rebates, and Discounts," which
addresses both the accounting for sales subject to rebates and revenue sharing
arrangements as well as coupon costs and discounts. The Company adopted EITF No.
00-14 effective June 30, 2001. Coupon and consumer rebate sales incentives are
now recognized as a reduction in net sales, rather than as expense. The impact
of adopting this consensus reduced both net sales and advertising expense by $94
and $117, in fiscal years 2000 and 1999, respectively, and prior years have been
restated to reflect these changes.

In June 2001, the FASB issued SFAS No. 141, "Business Combinations," and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 will apply to all
business combinations that the Company enters into after June 30, 2001, and
eliminates the pooling-of-interests method of accounting. SFAS No. 142
eliminates the amortization of goodwill and intangible assets having indefinite
lives and requires that annual reviews for impairment be made for such assets on
a "fair value basis." Intangible assets with definitive lives will continue to
be amortized. This standard applies to all goodwill and intangible assets
acquired after June 30, 2001, as well as goodwill and intangible assets existing
at that date. The new standard will require the Company to review its goodwill
and intangible assets to determine which assets will cease being amortized and
which assets may require a change in their amortizable lives; and to assess
potential impairment testing on a "fair value basis." The Company is currently
reviewing the new standards and adopted the new standards effective July 1,
2001. The Company has not determined the effect on earnings of the provision to
cease amortization of goodwill, nor has it completed the required tests for
impairment. The Company had net brands, trademarks, patents and other
intangibles of $1,574 at June 30, 2001, and had related amortization expense of
$60, $55 and $61 in fiscal years 2001, 2000, and 1999 respectively.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of money market and other high quality instruments with
an initial maturity of three months or less. Such investments are stated at
cost, which approximates market value.

INVENTORIES

Inventories are stated at the lower of cost or market. Cost for the majority of
the domestic inventories, excluding former First Brands businesses, is
determined on the last-in, first-out (LIFO) method. The cost method for all
other inventories, including former First Brands businesses, is determined on
the first-in, first-out (FIFO) method.

                                        16
   17
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Depreciation is calculated by
the straight-line method over estimated useful lives generally ranging from 3-40
years. Carrying values are reviewed periodically for possible impairment. If an
impairment condition exists, an impairment is recorded based on estimates of
fair value of assets.

BRANDS, TRADEMARKS, PATENTS AND OTHER INTANGIBLES

Brands, trademarks, patents and other intangible assets arising from
transactions after October 30, 1970, are amortized over their estimated useful
lives not to exceed 40 years. Carrying values are reviewed periodically for
possible impairment. Impairment charges are recorded when appropriate based on
estimates of fair value of assets.

CAPITALIZED SOFTWARE COSTS

The Company capitalizes significant costs incurred in the acquisition or
development of software for internal use, including the costs of the software,
materials, consultants, interest and payroll and payroll-related costs for
employees incurred in developing internal-use computer software once final
selection of software is made. Costs incurred prior to the final selection are
charged to expense. Capitalized software amortization expense was $18, $13 and
$9, in fiscal years 2001, 2000 and 1999, respectively. The net book value of
capitalized software costs included in other assets at June 30, 2001 and 2000
was $59 and $41, respectively.

FORWARD-PURCHASE FINANCING AGREEMENTS

In connection with the financing of an acquisition in Argentina in 1996 and the
acquisition of the Brita water systems business in Canada in 1995, the Company
entered into forward-purchase agreements with third parties. Under the terms of
the forward-purchase agreements, the Company purchased preferred stock of
certain of its foreign subsidiaries for future delivery from third parties with
the right to acquire this preferred stock according to the terms of certain
subscription agreements. The Brita forward-purchase agreement matured in June
2000, and the Argentine forward-purchase agreement matured in March 2001, and
the third parties delivered the subsidiary preferred stock to the Company. At
June 30, 2000, the Company's Argentine forward purchase amount totaled $144 and
was included in other current assets. The forward purchases of the preferred
stock were accreted to redemption amounts on a straight-line basis over their
five-year terms and the amount of accretion was included in other expense, net.

REVENUE RECOGNITION

Customer sales are recognized when revenue is realized and earned. The Company
recognizes revenue when the risk and title passes to the customer, generally at
the time of shipment. Customer sales are recorded net of allowances for
estimated returns, trade promotions and other discounts, which are recognized as
a deduction to sales at the time of sale.

The Company provides for an allowance for doubtful accounts based on historical
experience and a review of its receivables. Receivables are presented net of an
allowance for doubtful accounts of $(14) and $(12) at June 30, 2001, and 2000,
respectively. The Company's provision for doubtful accounts and deductions for
                                        17
   18
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

charge-offs of receivables were $(5) and $3, respectively in fiscal year 2001
and $(8) and $5, respectively in fiscal year 2000.

ADVERTISING

The Company expenses advertising costs as incurred.

INCOME TAXES

The Company uses the asset and liability method to account for income taxes,
including recognition of deferred tax assets included in other current assets
and liabilities for the anticipated future tax consequences attributable to
differences between financial statement amounts and their respective tax bases.
Income tax expense is recognized currently for taxes payable on remittances of
foreign earnings, while no provision for expense is made for taxes on foreign
earnings that are deemed to be permanently reinvested. (see Note 14).

FOREIGN CURRENCY TRANSLATION

Local currencies are the functional currencies for most of the Company's foreign
operations. Assets and liabilities are translated using the exchange rates in
effect at the balance sheet date. Income and expenses are translated at the
average exchange rates during the year. Translation gains and losses and the
effects of exchange rate changes on transactions designated as hedges of net
foreign investments are reported in accumulated other comprehensive income or
loss in stockholders' equity. Deferred taxes are not provided on translation
gains and losses where the Company expects that earnings of a foreign subsidiary
are reinvested on a permanent basis. Transaction and foreign currency
translation gains and losses where the U.S. dollar is the functional currency
are included in other expense, net.

EARNINGS PER COMMON SHARE

Basic earnings per share is computed by dividing net earnings by the weighted
average number of common shares outstanding each period. Diluted earnings per
share is computed by dividing net earnings by the diluted weighted average
number of common shares outstanding during the period. Diluted earnings per
share reflects the potential dilution from common shares issuable through stock
options, restricted stock, performance unit grants and share repurchase
contracts.

DERIVATIVE INSTRUMENTS

The use of derivative instruments, principally swap, forward and option
contracts, is limited to non-trading purposes and includes management of
interest rate movements, foreign currency exposure and commodity exposure. Most
interest rate swaps, commodity purchase and foreign exchange contracts are
designated as fair-value or cash-flow hedges of fixed and variable rate debt
obligations, raw material purchase obligations, foreign currency denominated
debt instruments, or foreign currency denominated purchase obligations based on
certain hedge criteria. The criteria used to determine if hedge accounting
treatment is appropriate are (a) the designation of the hedge to an underlying
exposure, (b) whether or not overall risk is being reduced and (c) if there is
correlation between the value of the derivative instrument and the underlying
obligation. Effective July 1, 2000, changes in the fair value of such
derivatives are recorded as either assets or liabilities

                                        18
   19
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

in the balance sheet with an offset to current earnings or other comprehensive
income, depending on whether the derivative is designated as a hedge transaction
and the type of hedge transaction. For fair-value hedge transactions, changes in
fair value of the derivative and changes in the fair value of the item being
hedged are recorded in earnings. For cash-flow hedge transactions, changes in
fair value of derivatives are reported as other comprehensive income and are
recognized into earnings in the period or periods during which the hedge
transaction effects earnings. The Company also has contracts with no hedging
designations. These contracts are accounted for by adjusting the carrying amount
of the contracts to market and recognizing any gain or loss in other income or
expense.

The Company has policies with restrictions on the usage of derivatives,
including a prohibition of the use of any leveraged instrument. Derivative
contracts are entered into with several major credit worthy institutions,
thereby minimizing the risk of credit loss. In the normal course of business,
the Company employs practices and procedures to manage its exposure to changes
in interest rates, foreign currencies and commodity prices using a variety of
derivative instruments.

STOCK-BASED COMPENSATION

The Company continues to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to Employees." Compensation cost for stock
options, if any, is measured as the excess of the quoted market price of the
Company's stock at the date of grant over the amount an employee must pay to
acquire the stock. Restricted stock awards are recorded as compensation cost
over the requisite vesting periods based on the market value on the date of
grant. Compensation cost for shares issued under performance share plans is
recorded based upon the current market value of the Company's stock at the end
of each period. Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation," established accounting and disclosure
requirements using a fair-value based method of accounting for stock-based
employee compensation plans. The Company has elected to retain its current
method of accounting as described above and has adopted the disclosure
requirements of SFAS No. 123. (See Note 11).

RECLASSIFICATIONS

Certain reclassifications, including those related to the adoption of EITF No.
00-14, have been made to the prior years' financial statements to conform to the
current year's presentation.

                                        19
   20
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

2. MERGER, RESTRUCTURING AND ASSET IMPAIRMENT

Merger, restructuring and asset impairment charges were $59, $36 and $180 in
fiscal years 2001, 2000 and 1999, respectively. Details of these costs through
June 30, 2001 are as follows:



                                                                        TOTAL MERGER
                                                                             AND          ASSET
                                               MERGER   RESTRUCTURING   RESTRUCTURING   IMPAIRMENT   TOTAL
                                               ------   -------------   -------------   ----------   -----
                                                                                      
Expense for the year:
  June 30, 1999..............................   $ 36        $ 53            $  89          $ 91      $180
  June 30, 2000..............................     17          11               28             8        36
  June 30, 2001..............................     --           4                4            55        59
                                                ----        ----            -----          ----      ----
Total incurred through June 30, 2001.........     53          68              121          $154      $275
                                                ----        ----            -----          ====      ====
Payments for the year:
  June 30, 1999..............................    (31)        (35)             (66)
  June 30, 2000..............................    (17)        (18)             (35)
  June 30, 2001..............................     (5)         (4)              (9)
                                                ----        ----            -----
Total paid through June 30, 2001.............    (53)        (57)            (110)
                                                ----        ----            -----
Accrued restructuring as of June 30, 2001....   $ --        $ 11            $  11
                                                ====        ====            =====


The $59 of restructuring and asset impairment charges in fiscal year 2001
reflects the results of the Company's review of its operations, which was
announced in December 2000. Restructuring and asset impairment for fiscal year
2001 include $34 for the write off of equipment no longer necessary due to
changes in technology, elimination of redundancies and discontinued product
lines, $15 for the closure of the Company's Wrens, Ga., cat litter plant and the
planned transfer of the Jonny Cat clay litter production to a third-party
manufacturer, $7 for the write off of intangible assets and $3 for severance and
other restructuring charges. The Company is continuing this operational review
during the calendar year 2001, and anticipates incurring charges associated with
actions that will streamline certain of the Company's operations. The Company
anticipates that additional restructuring, asset impairment and inventory
write-offs will total approximately $100 and will be recognized when incurred.
As of June 30, 2001, the Company has recognized $98, of which $59 has been
recorded as restructuring and asset impairment, and $39, relating to inventory
write-offs, has been included in cost of products sold.

The $36 of merger, restructuring and asset impairment charges in fiscal year
2000 include $23 incurred in connection with the merger of First Brands, $11
related to the restructuring of the Company's Asia operations, and $2 recognized
for the write down of property, plant and equipment related to the Company's
fire logs business. The Company restructured its Asia operations by moving to
third-party distributors in various Asian countries. Asia restructuring
activities included the reduction in employee headcount, the termination of
lease obligations, charges for professional services and the write off of
certain assets.

The $180 of merger costs in fiscal year 1999 includes $156 of merger,
restructuring and asset impairment incurred in connection with the First Brands
merger, and $24 for impairment and write down of certain insecticide brands and
certain international assets. First Brands restructuring activities in fiscal
year 1999 primarily related to the elimination of redundancies and the
consolidation of administration and distribution

                                        20
   21
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

2. MERGER, RESTRUCTURING AND ASSET IMPAIRMENT (CONTINUED)

functions, the reduction in employee headcount primarily at the First Brands'
headquarters location in Danbury, Conn., and at sales offices, and the
termination of lease and other contractual obligations.

3. BUSINESSES ACQUIRED

The Company made acquisitions in fiscal years 2001, 2000 and 1999, which were
accounted for by the purchase method as follows:

Acquisitions in fiscal year 2001 totaled $126. These acquisitions included the
purchase for $122 (or $116, net of cash acquired) from Brita GmbH of the rights
to the Brita trademark and other intellectual property in North and South
America, an increase in the Company's ownership from 50% to 100% in Brita
Limited and Brita South America Inc. and certain other net assets. The Company
also increased its ownership to 100% in its two joint ventures in Costa Rica
previously 49% and 51% owned. The investments in Brita Limited, Brita South
America Inc. and Costa Rica were previously accounted for under the equity
method of accounting and are fully consolidated from the date of acquisition.
Net assets acquired included net working capital assets of $11, property, plant
and equipment of $9, and brands, trademarks and other intangibles of $121 to be
amortized over estimated lives not to exceed 40 years, less the investment in
the remaining interest for $15. Because the Company previously owned 50% to 51%
in these equity investments, only the incremental equity and its underlying net
book value of the net assets were adjusted to their fair value.

Acquisitions in fiscal year 2000 totaled $120. These acquisitions included the
Bon Bril cleaning utensils business in Colombia, Venezuela and Peru, the Agrocom
S.A. distribution business in Argentina, an increase in ownership to 100% in
Clorox de Colombia S.A. (formerly Tecnoclor, S.A. and previously 72% owned), and
the Astra rubber glove business purchased in Australia. Net assets, acquired at
fair value, included net working capital assets of $6, property, plant and
equipment of $12, and brands, trademarks and other intangibles of $94 to be
amortized over estimated lives not to exceed 40 years. In addition,
approximately $8 was paid to acquire minority interests in Clorox de Colombia
S.A.

Acquisitions in fiscal year 1999 totaled $116. These acquisitions included the
domestic purchase of the Handi Wipes and Wash'n Dri businesses and the
international purchases of the Mistolin bleach and household cleaners business
in Venezuela, the Homekeeper insecticide business in Korea, the Gumption
household cleaner business in Australia, as well as a 12% increase in ownership
in the Company's joint venture in Colombia, Clorox de Colombia S.A.
Approximately $105 of the acquisition cost has been allocated to brands,
trademarks and other intangibles to be amortized over estimated lives not to
exceed 40 years, with the remainder of $11 allocated to the fair value of other
assets acquired.

Operating results of acquired businesses are included in the consolidated net
earnings from the date of acquisition. All acquisitions were funded from cash
provided by operations, long-term debt or commercial paper. In any year
presented, the operating results of businesses acquired were not significant to
the consolidated results.

                                        21
   22
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

4. INVENTORIES

Inventories are comprised of the following:



                                                            2001      2000
                                                           ------    ------
                                                               
Finished goods and work in process.......................  $  219    $  266
Raw materials and packaging..............................     122       135
LIFO allowances..........................................     (11)      (10)
Allowances for obsolescence..............................     (49)      (15)
                                                           ------    ------
Total....................................................  $  281    $  376
                                                           ======    ======


The LIFO method was used to value approximately 35% of inventory at June 30,
2001, and 39% at June 30, 2000. If the cost of LIFO inventories had been
determined using the FIFO method, inventory amounts would have increased by
approximately $11 at June 30, 2001, and $10 at June 30, 2000. The affect on
earnings of the liquidation of any LIFO layers was not material for fiscal years
ended June 30, 2001, 2000 and 1999.

Inventories at June 30 are presented net of an allowance for obsolescence as
follows:



                                                            2001      2000
                                                           ------    ------
                                                               
Allowance for obsolescence at beginning of year..........  $  (15)   $   (8)
Provision for inventory obsolescence.....................     (54)      (15)
Deductions for inventory write-offs......................      20         8
                                                           ------    ------
Allowance for obsolescence at end of year................  $  (49)   $  (15)
                                                           ======    ======


Provision for inventory obsolescence totaling $54 and $15 was charged to cost of
products sold during the fiscal years ended June 30, 2001, and 2000,
respectively, and included charges of $39 in fiscal year 2001 that were related
primarily to discontinued products, packaging, and unsuccessful product launches
and charges of $4 in fiscal year 2000 that were related to the write down of the
Company's fire logs inventory to its net realizable value.

5. PROPERTY, PLANT AND EQUIPMENT

The components of property, plant and equipment are as follows:



                                                            2001      2000
                                                           ------    ------
                                                               
Land and improvements....................................  $   93    $   91
Buildings................................................     448       418
Machinery and equipment..................................   1,333     1,313
Construction in progress and other.......................      97       135
                                                           ------    ------
                                                            1,971     1,957
Less accumulated depreciation............................    (925)     (878)
                                                           ------    ------
Net......................................................  $1,046    $1,079
                                                           ======    ======


Depreciation expense was $134 in fiscal year 2001, $121 in fiscal year 2000 and
$115 in fiscal year 1999.

                                        22
   23
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

6. BRANDS, TRADEMARKS, PATENTS AND OTHER INTANGIBLES

The components of brands, trademarks, patents and other intangibles are as
follows:



                                                            2001      2000
                                                           ------    ------
                                                               
Brands and trademarks....................................  $1,849    $1,771
Patents and other intangibles............................     340       320
                                                           ------    ------
                                                            2,189     2,091
Less accumulated amortization............................    (615)     (555)
                                                           ------    ------
Net......................................................  $1,574    $1,536
                                                           ======    ======


At June 30, 2001, and 2000, respectively, brands and trademarks totaling $1,591
and $1,484 are amortized over 40 years, $61 and $39 are amortized over 30 years,
$152 and $202 are amortized over 20 years and $3 and $4 are amortized over 10
years. Amounts totaling $42 relating to transactions prior to October 31, 1970
are not amortized. Patents and other intangibles are amortized over lives
ranging from 2 to 20 years.

7. ACCRUED LIABILITIES

Accrued liabilities consist of the following:



                                                            2001      2000
                                                           ------    ------
                                                               
Accrued sales promotion..................................  $  123    $  106
Other accrued taxes......................................     173       110
Other....................................................     140       171
                                                           ------    ------
Total....................................................  $  436    $  387
                                                           ======    ======


8. DEBT

Notes and loans payable includes the following:



                                                            2001      2000
                                                           ------    ------
                                                               
U.S. dollar commercial paper.............................  $   --    $  377
Canadian dollar denominated commercial paper.............     105       236
Notes payable and other..................................      12       155
                                                           ------    ------
Total....................................................  $  117    $  768
                                                           ======    ======


At June 30, 2001 and 2000 the Company had $105 and $236, respectively, of
Canadian dollar denominated commercial paper that was fully hedged by a forward
currency contract.

The weighted average interest rate for notes and loans payable was 6.1%, 6.4%
and 5.2% for fiscal years 2001, 2000 and 1999, respectively. The carrying value
of notes and loans payable at June 30, 2001 and 2000 approximates fair value of
such debt.

                                        23
   24
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

8. DEBT (CONTINUED)

Long-term debt includes the following:



                                                              2001     2000
                                                              -----    ----
                                                                 
Senior unsecured notes and debentures:
  6.125%, due February 2011.................................  $ 301    $ --
  8.8%, due July 2001.......................................    200     200
  7.25%, due March 2007.....................................    150     150
Preferred interest transferable securities, due July 2003,
  with a preferred dividend rate of 4.6% as amended January
  2001......................................................    200     200
Industrial revenue bond, due October 2003, interest at bond
  market association index, secured by manufacturing
  facility in Belle, Missouri...............................     13      13
Foreign bank loans..........................................     23      32
                                                              -----    ----
Total long-term debt........................................    887     595
Current maturities of long-term debt........................   (202)     (5)
                                                              -----    ----
Long-term debt..............................................  $ 685    $590
                                                              =====    ====


The weighted average interest rate on long-term debt was 6.3%, 6.4%, 6.5% for
fiscal years 2001, 2000 and 1999, respectively. The estimated fair value of
long-term debt and related carrying value at June 30, 2001, and 2000 is $696 and
$685, and $600 and $590, respectively.

At June 30, 2001 the Company had the following interest rate swaps:



                                    NOTIONAL        INTEREST RATE
                                    PRINCIPAL     -----------------       VARIABLE
         MATURITY DATES              AMOUNT       PAID     RECEIVED      RATE INDEX
         --------------            -----------    -----    --------    --------------
                                                           
February 2011....................     $100        6.125%    6.125%      3 month LIBOR
July 2001........................       50         4.01%     6.26%     12 month LIBOR
July 2003........................      200         3.71%     5.78%      3 month LIBOR


Certain of the Company's unsecured notes, debentures and credit agreements
contain restrictive covenants and limitations, the most restrictive of which
limits certain sale and leaseback transactions to the greater of $100 or 15% of
the Company's consolidated net tangible assets, and requires a minimum net
worth, as defined, of $704. The Company is in compliance with all restrictive
covenants and limitations at June 30, 2001.

The Company has credit agreements of $800 that expire on various dates through
April 2002. There are no borrowings under any of these agreements, which are
available for general corporate purposes and to support additional commercial
paper issuance. These agreements also require the maintenance of a minimum net
worth of $704.

Long-term debt maturities as of June 30, 2001 are $202, $2, $215, $2, $2 and
$464 in fiscal years 2002, 2003, 2004, 2005, 2006 and thereafter, respectively.

                                        24
   25
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

9. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values of the Company's derivative instruments are summarized
below as of June 30:



                                                           2001                 2000
                                                     -----------------    -----------------
                                                                 FAIR                 FAIR
                                                     NOTIONAL    VALUE    NOTIONAL    VALUE
                                                     --------    -----    --------    -----
                                                                          
Derivative Instruments
  Debt-related contracts...........................    $350       $--       $261      $(11)
  Foreign exchange contracts.......................     335        (1)       500        (3)
  Commodity contracts..............................     126         5        146        17
  Commodity option contract........................      46        (1)        69        (3)


The Company utilizes derivative instruments, principally swaps, forward
contracts and options to enhance its ability to manage risk, including interest
rates, foreign currency fluctuations, commodity price changes and share
repurchase obligations, which exist as part of its ongoing business operations.
These contracts hedge transactions and balances for periods consistent with the
related exposures and do not constitute investments independent of these
exposures. The Company is not a party to any leveraged contracts.

Most interest rate swap, commodity purchase and foreign exchange contracts are
designated as fair-value or cash-flow hedges of fixed and variable rate debt
obligations, raw material purchase obligations, foreign currency-denominated
debt instruments, or foreign currency-denominated purchase obligations. The
estimated fair values of the interest rate swap, commodity purchase and foreign
exchange contracts are calculated based on market rates. These values represent
the estimated amounts that the Company would pay or receive to terminate the
contracts. The Company also holds a commodity purchase contract at June 30, 2001
and 2000 and held Argentine foreign currency contracts at June 30, 2000 with no
hedging designations. These contracts are accounted for by adjusting the
carrying amount of the contracts to market, and recognizing any gain or loss in
other income or expense.

Interest rate swap agreements are used to manage interest rate exposure and to
achieve a desired proportion of variable and fixed rate debt. The Company also
has a Deutsche mark-denominated financing arrangement. The Company manages its
interest rate and Deutsche mark exposures through a series of swaps with
notional amounts totaling $200 to eliminate foreign currency exposure risks and
to effectively convert the Company's 4.6% fixed Deutsche mark obligation to a
floating U.S. dollar rate of 90 day LIBOR less 133 basis points, as amended in
January 2001. The terms of the swap agreements match the terms of the underlying
debt.

The Company uses foreign exchange contracts, including forward currency
contracts and swap contracts, to hedge existing foreign exchange exposures.
Foreign currency contracts require the Company, at a future date, to either buy
or sell foreign currency in exchange for U.S. dollars and other currencies. Such
currency contracts existed at June 30, 2001 and 2000 for Canadian dollars and
certain other currencies. Contracts outstanding as of June 30, 2001 will mature
over the next year.

The Company uses commodity futures contracts to fix the price on a portion of
its raw material purchase requirements and swap contracts to hedge the market
risk of diesel fuel included as part of carrier contracts. Contract maturities
are correlated to actual purchases, and contract gains and losses are reflected
as adjustments of the cost of the related item. The Company also uses swap
contracts and an option contract to fix the price and to stabilize partially the
cost of its polyethylene resin requirements. These contracts cover a

                                        25
   26
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

9. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

portion of the Company's domestic resin requirements. The Company's commodity
contracts have maturities until December 2006. All hedges accorded hedge
accounting treatment are considered highly effective.

The carrying values of cash, short-term investments, accounts and notes
receivable, accounts payable, forward purchase financing agreements and other
derivative instruments approximate their fair values at June 30, 2001 and 2000.
The Company has used market information for similar instruments and applied
judgment in estimating fair values. See Note 8 for fair values of notes and
loans payable and long-term debt.

Exposure to counterparty credit risk is considered low because these agreements
have been entered into with major credit-worthy institutions with strong credit
ratings, and they are expected to perform fully under the terms of the
agreements.

10. STOCKHOLDERS' EQUITY

On July 20, 1999, the Company's Board of Directors authorized a 2-for-1 split of
its common stock, effective August 23, 1999, in the form of a stock dividend for
stockholders of record at the close of business on July 30, 1999. All share and
per share amounts in the accompanying consolidated financial statements have
been restated for the stock split.

On November 17, 1999, the stockholders approved an amendment of the Company's
Certificate of Incorporation to increase the authorized capital of the Company
to consist of 750,000,000 shares of common stock and 5,000,000 shares of
preferred stock, each with a par value of $1.00 per share. No shares of the
preferred stock have been issued.

Treasury share purchases and related premiums were $10 in fiscal year 2001, $135
(or 3,123,000 shares) in fiscal year 2000 and $33 (or 800,000 shares) in fiscal
year 1999. Purchases made in fiscal year 2000 were under a common stock
repurchase and hedging program authorized in August 1999 by the Board of
Directors. The purpose of that program was to reduce or eliminate dilution when
shares are issued in accordance with the Company's various stock compensation
plans. Prior to August 1999, the Company had canceled a prior share repurchase
and hedging program (previously authorized in September 1996 by the Board of
Directors to offset the dilutive effects of employee stock exercises) when it
merged with First Brands. Purchases made in fiscal year 1999 were under the
share repurchase and hedging program authorized in September 1996. In August
2001, the Company's Board of Directors authorized the Company to repurchase up
to $500 of the Company's common stock over a two to three-year period. This
program is in addition to the program approved in August 1999.

At June 30, 2001 the Company had three share repurchase agreements totaling
approximately $246, whereby the Company contracted for future delivery of
2,260,000 shares each on September 15, 2002 and on September 15, 2004, at a
strike price of $43 per share, and for future delivery of 1,000,000 shares on
November 1, 2003 at a strike price of $51.70 per share.

Accumulated other comprehensive net losses included translation gains and losses
incurred in connection with the Company's foreign operations, changes in the
valuation of certain of the Company's derivative contracts, and minimum pension
liability adjustments (refer to Note 15).

The Company has various employee performance unit and restricted stock programs.
Restricted stock awards are recorded as compensation cost over the requisite
vesting periods based on the market value on the
                                        26
   27
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

10. STOCKHOLDERS' EQUITY (CONTINUED)

date of grant. Compensation cost for shares issued under performance share plans
is recorded based upon the current market value of the Company's stock at the
end of each period. Compensation costs are amortized over vesting periods
ranging from one to four years. Unearned compensation cost on these programs is
shown as a reduction to stockholder's equity.

11. STOCK COMPENSATION PLANS

At June 30, 2001, the Company had various non-qualified stock-based compensation
programs which include stock options, performance units and restricted stock
awards. The Company's various stock options plans, which include the pre-merger
plans of First Brands, provide for the granting of stock options to officers,
key employees and directors. The 1996 Stock Incentive Plan ("1996 Plan") and the
1993 Directors' Stock Option Plan are the only plans with stock option awards
currently available for grant. The 1996 Plan, the 1993 Directors' Stock Option
Plan and prior plans have shares exercisable at June 30, 2001. The Company is
authorized to grant options for up to 14 million common shares under the 1996
Plan, of which 6 million common shares are remaining. Effective July 1, 2001,
the Board authorized and reserved for issuance an additional 11.5 million common
shares under the 1996 Plan, subject to shareholder approval. Options outstanding
under the Company's plans (except First Brands options which became exercisable
upon the merger) have been granted at prices which are either equal to or above
the market value of the stock on the date of grant, vest over a one to
seven-year period, and expire no later than ten years after the grant date.

The status of the Company's stock option plans at June 30, 2001 is summarized
below:



                                              NUMBER        WEIGHTED AVERAGE
                                            OF SHARES        EXERCISE PRICE
                                          --------------    ----------------
                                          (IN THOUSANDS)
                                                      
Outstanding at June 30, 1998............      12,440              $21
  Granted...............................       4,590               60
  Exercised.............................      (3,174)              20
  Cancelled.............................        (216)              35
                                              ------              ---
Outstanding at June 30, 1999............      13,640               34
  Granted...............................       3,104               40
  Exercised.............................      (1,381)              20
  Cancelled.............................        (301)              44
                                              ------              ---
Outstanding at June 30, 2000............      15,062               36
  Granted...............................       3,077               36
  Exercised.............................      (1,077)              19
  Cancelled.............................      (3,367)              62
                                              ------              ---
Outstanding at June 30, 2001............      13,695              $31
                                              ======              ===
Options exercisable at:
  June 30, 2001.........................       8,570              $26
  June 30, 2000.........................       7,687               21
  June 30, 1999.........................       7,618               19


                                        27
   28
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

11. STOCK COMPENSATION PLANS (CONTINUED)

The Company applies APB Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations in accounting for options granted under
the plans. Accordingly, no compensation expense has been recognized. If
compensation expense for the Company's various stock option plans had been
determined based upon fair values at the grant dates for awards under those
plans in accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation," then the Company's pro-forma net earnings, basic and diluted
earnings per common share would have been $286, $1.21 and $1.19, respectively in
fiscal year 2001; $373, $1.58 and $1.56, respectively in fiscal year 2000; and
$235, $1.00 and $0.98, respectively in fiscal year 1999. The pro forma effects
of applying SFAS No. 123 are not indicative of future amounts because this
statement does not apply to awards granted prior to fiscal year 1996.

The weighted average fair value per share of each option granted during fiscal
years 2001, 2000 and 1999, estimated on the grant date using the Black-Scholes
option pricing model, was $12.76, $12.43 and $13.16, respectively.

The following assumptions were used to estimate the fair value of the fiscal
years 2001, 2000 and 1999 option grants:



                                             2001            2000            1999
                                         ------------    ------------    ------------
                                                                
Dividend yield.........................  2.28%           1.80%           1.30%
Expected volatility....................  38.9%           36.5%           29.5%
Risk-free interest rate................  4.6% to 6.5%    5.7% to 6.8%    4.4% to 5.7%
Expected life..........................  4 to 5 years    3 to 6 years    3 to 6 years


Summary information about the Company's stock options outstanding at June 30,
2001 is as follows (number of shares in thousands):



                             WEIGHTED
RANGE OF                     AVERAGE           WEIGHTED                       WEIGHTED
EXERCISE     OPTIONS       CONTRACTUAL         AVERAGE         OPTIONS        AVERAGE
 PRICE     OUTSTANDING   PERIODS IN YEARS   EXERCISE PRICE   EXERCISABLE   EXERCISE PRICE
--------   -----------   ----------------   --------------   -----------   --------------
                                                            
$10-$21       4,026            3.5               $17            4,026           $17
 22- 33       1,675            5.0                24            1,657            24
 33- 44       6,916            8.4                37            2,478            37
 45- 55         475            7.9                52              405            53
 56- 67         603            7.9                67                4            58
             ------            ---               ---            -----           ---
$10-$67      13,695            6.5               $31            8,570           $26
=======      ======            ===               ===            =====           ===


                                        28
   29
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

12. LEASES

The Company leases transportation equipment and various manufacturing,
warehousing and office facilities. Most leases are classified as operating
leases and will expire over the next 15 years. The following is a schedule by
year of future minimum rental payments required under the operating lease
agreements:



                                                        FUTURE
                                                        MINIMUM
                   FISCAL YEAR                      RENTAL PAYMENTS
                   -----------                      ---------------
                                                 
2002..............................................       $ 33
2003..............................................         23
2004..............................................         15
2005..............................................         11
2006..............................................          8
Thereafter........................................         20
                                                         ----
  Total...........................................       $110
                                                         ====


Rental expense was $50 in fiscal year 2001, $49 in fiscal year 2000 and $36 in
fiscal year 1999.

Space not occupied by the Company in its headquarters building is rented to
other tenants under operating leases expiring in 2008. Future minimum rentals to
be received total $3 and do not exceed $1 in any one year.

13. OTHER EXPENSE -- NET

The components of other (income) expense, net are:



                                                              2001    2000    1999
                                                              ----    ----    ----
                                                                     
Amortization of goodwill and intangibles....................  $ 60    $ 55    $ 61
Equity in earnings of affiliates............................   (16)    (17)    (24)
Interest income.............................................   (10)    (10)     (7)
Other -- net................................................     2      (4)     (6)
                                                              ----    ----    ----
Total.......................................................  $ 36    $ 24    $ 24
                                                              ====    ====    ====


                                        29
   30
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

14. INCOME TAXES

Income tax expense consists of the following:



                                                              2001    2000    1999
                                                              ----    ----    ----
                                                                     
Current
  Federal...................................................  $159    $193    $175
  State.....................................................    24      25      25
  Foreign...................................................    19      25      13
                                                              ----    ----    ----
Total current...............................................   202     243     213
                                                              ----    ----    ----
Deferred
  Federal...................................................   (40)    (11)    (26)
  State.....................................................    (2)     --      (2)
  Foreign...................................................     1      (4)     (1)
                                                              ----    ----    ----
Total deferred..............................................   (41)    (15)    (29)
                                                              ----    ----    ----
Total expense (net of tax benefit of $1 on cumulative effect
  of change in accounting principle in fiscal year 2001)....  $161    $228    $184
                                                              ====    ====    ====


The components of income before income taxes are as follows:



                                                              2001    2000    1999
                                                              ----    ----    ----
                                                                     
United States...............................................  $435    $568    $422
Foreign.....................................................    49      54       8
                                                              ----    ----    ----
Total income before income taxes............................  $484    $622    $430
                                                              ====    ====    ====


Income taxes receivable at June 30, 2001 was $3 and is included in other current
assets.

A reconciliation of the statutory federal income tax rate to the Company's
effective tax rate follows:



                                                              2001    2000    1999
                                                              ----    ----    ----
                                                                     
Statutory federal tax rate..................................  35.0%   35.0%   35.0%
State taxes (net of federal tax benefits)...................  2.9     2.7      3.0
Merger-related costs........................................   --      --      5.9
Adjustment to prior year tax accruals.......................  (3.3)    --       --
Other differences...........................................  (1.3)   (1.0)   (1.1)
                                                              ----    ----    ----
Effective tax rate..........................................  33.3%   36.7%   42.8%
                                                              ====    ====    ====


Applicable U.S. income and foreign withholding taxes have not been provided on
approximately $195 of undistributed earnings of foreign subsidiaries at June 30,
2001. Accumulated undistributed earnings of foreign subsidiaries are considered
permanently reinvested and are not subject to such taxes.

The tax benefit for tax deductions related to the Company's stock option plans
are recorded as an increase to equity when realized. In fiscal years 2001, 2000
and 1999, the Company realized tax benefits of approximately $9, $14 and $29,
respectively.

                                        30
   31
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

14. INCOME TAXES (CONTINUED)

Deferred income tax assets (liabilities) at June 30 result from the tax effects
of the following temporary differences:



                                                              2001     2000
                                                              -----    -----
                                                                 
Deferred Taxes -- Current
  Safe harbor lease agreements..............................  $  (2)   $  (3)
  Merger and restructuring costs............................     --        5
  Tax credit carryforwards..................................     11       --
  Net operating loss carryforwards..........................     --        2
  Other, net................................................     17       23
                                                              -----    -----
     Subtotal...............................................     26       27
  Valuation allowance.......................................     --       (2)
                                                              -----    -----
  Total current.............................................     26       25
                                                              -----    -----
Deferred Taxes -- Noncurrent
  Amortization and depreciation.............................   (195)    (183)
  Safe harbor lease agreements..............................    (13)     (13)
  Unremitted foreign earnings...............................     (2)     (33)
  Post employment benefits..................................     37       29
  Merger and restructuring costs............................     18       18
  Income previously recorded for book purposes..............    (22)     (19)
  Tax credit carryforward...................................      4       --
  Net operating loss carryforwards..........................     38       27
  Other, net................................................     16       10
                                                              -----    -----
     Subtotal...............................................   (119)    (164)
  Valuation allowance.......................................    (28)     (27)
                                                              -----    -----
  Total noncurrent..........................................   (147)    (191)
                                                              -----    -----
  Deferred tax liabilities -- net...........................  $(121)   $(166)
                                                              =====    =====


As of June 30, 2001, the Company had foreign tax credit carryforwards of $15 and
foreign net operating loss carryforwards of $30 with expiration dates from 2002
to 2011. Additionally, foreign net operating loss carryforwards of $8 may be
carried forward indefinitely. Realization depends on generating sufficient
taxable income before expiration of the loss carryforwards. The valuation
allowance at June 30, 2001 and 2000 was $28 and $29, respectively, and was
provided to reduce such deferred tax assets to the amounts considered
realizable. Details of the valuation allowance at June 30 are as follows:



                                                              2001     2000
                                                              -----    -----
                                                                 
Valuation allowance at beginning of year....................  $ (29)   $ (18)
Income tax expense..........................................      1      (11)
                                                              -----    -----
Valuation allowance at end of year..........................  $ (28)   $ (29)
                                                              =====    =====


                                        31
   32
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

15. EMPLOYEE BENEFIT PLANS

RETIREMENT INCOME PLANS

The Company has qualified and non-qualified defined benefit plans that cover
substantially all of the Company's domestic employees and certain of its
international subsidiaries. Benefits are based on either employee years of
service and compensation or a stated dollar amount per year of service. Except
for its Canadian plan, the Company is the sole contributor to the plans in
amounts deemed necessary to provide benefits and to the extent deductible for
federal income tax purposes. Assets of the plans consist primarily of stocks and
bonds.

The projected benefit obligation, accumulated benefit obligation and fair value
of plan assets for the Supplemental Executive Retirement Plan which had an
accumulated benefit obligation in excess of plan assets was $34, $28 and $23,
respectively, as of June 30, 2001 and $35, $28 and $27, respectively, as of June
30, 2000.

RETIREMENT HEALTH CARE

The Company provides certain health care benefits for employees who meet age,
participation and length of service requirements at retirement. The health care
plans were amended in fiscal year 2001 to limit the Company's contribution to
certain levels for non-union retirees. The plans pay stated percentages of
covered expenses after annual deductibles have been met. Benefits paid take into
consideration payments by Medicare. The plans are unfunded, and the Company has
the right to modify or terminate certain of these plans.

The assumed health care cost trend rate used in measuring the accumulated
post-retirement benefit obligation ("APBO") was 12% for fiscal years 2001 and
2002. These rates were assumed to gradually decrease to 5.5% for 2008-2009 and
remain at that level for years thereafter. Changes in these rates can have a
significant effect on amounts reported. A one percentage point increase in the
trend rates would increase the June 30, 2001 APBO by $2 and increase the fiscal
year 2001 expense by less than $1. A one percentage point decrease in the trend
rates would decrease the June 30, 2001 APBO by $2 and decrease the fiscal year
2001 expense by less than $1.

                                        32
   33
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

15. EMPLOYEE BENEFIT PLANS (CONTINUED)

Summarized information for the Company's retirement income and health care plans
are as follows:



                                                                                   RETIREMENT
                                                      RETIREMENT INCOME PLANS      HEALTH CARE
                                                     --------------------------   -------------
                                                         2001          2000       2001    2000
                                                     ------------   -----------   -----   -----
                                                                              
Change in benefit obligations
  Benefit obligation at beginning of year..........  $        252   $       247   $  79   $  77
  Service cost.....................................             9            10       2       3
  Interest cost....................................            20            19       5       5
  Plan amendments..................................             4            --     (14)     --
  Reduction in prior service cost due to
     remeasurement.................................            --             2      --      --
  Actuarial (gain) or loss.........................            18            (6)      9      (2)
  Benefits paid....................................           (20)          (20)     (5)     (4)
                                                     ------------   -----------   -----   -----
  Benefit obligation at end of year................           283           252      76      79
                                                     ------------   -----------   -----   -----
Change in plan assets
  Fair value of assets at beginning of year........           327           324      --      --
  Actual return on plan assets.....................           (26)           23      --      --
  Employee contribution............................             4            --      --      --
  Employer contribution............................            --            --       5       4
  Benefits paid....................................           (20)          (21)     (5)     (4)
                                                     ------------   -----------   -----   -----
  Fair value of plan assets at end of year.........           285           326      --      --
                                                     ------------   -----------   -----   -----
  Funded (unfunded) status.........................             2            74     (76)    (79)
  Unrecognized transition obligation...............            --            --      --       7
  Unrecognized prior service cost..................            (8)           (9)     (5)      2
  Unrecognized (gain) or loss......................            29           (49)      1      (8)
                                                     ------------   -----------   -----   -----
  Prepaid or (accrued) benefit cost................  $         23   $        16   $ (80)  $ (78)
                                                     ============   ===========   =====   =====
Amount recognized in the balance sheets consists
  of:
  Prepaid benefit cost.............................  $         27   $        31   $  --   $  --
  Accrued benefit liability........................            (7)          (15)    (80)    (78)
  Accumulated other comprehensive income...........             3            --      --      --
                                                     ------------   -----------   -----   -----
  Net amount recognized............................  $         23   $        16   $ (80)  $ (78)
                                                     ============   ===========   =====   =====




                                                         2001         2000      2001    2000
                                                     ------------  -----------  -----   -----
                                                                            
Weighted-average assumptions as of June 30:
  Discount rate....................................    7% to 7.5%  6% to 8.25%  7.50%   8.25%
  Long-term rate of compensation increase..........  3.5% to 7.5%  3% to 8.25%  N/A     N/A
  Long-term rate of return on plan assets..........    8% to 9.5%   7% to 9.5%  N/A     N/A


                                        33
   34
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

15. EMPLOYEE BENEFIT PLANS (CONTINUED)




                                                   RETIREMENT              RETIREMENT
                                                  INCOME PLANS            HEALTH CARE
                                              --------------------    --------------------
                                              2001    2000    1999    2001    2000    1999
                                              ----    ----    ----    ----    ----    ----
                                                                    
Components of net periodic benefit cost
  Service cost..............................  $  9    $10     $12      $2     $ 3     $ 3
  Interest cost.............................    20     19      19       5       5       5
  Expected return on plan assets............   (31)   (30)    (26)     --      --      --
  Amortization of unrecognized items
     Transition obligation or (asset).......    --     (2)     (2)      1       1       1
     Prior service cost.....................    (1)    (1)     --      --      --      --
     Net (gain) or loss.....................    (3)    (3)      3      --      (1)     --
                                              ----    ---     ---      --     ---     ---
  Total net periodic benefit cost or
     (income)...............................    (6)    (7)      6       8       8       9
  Total benefits and curtailment (gains) or
     losses.................................    --     (1)      1      --      --       1
  Termination benefits related to First
     Brands merger..........................    --     --       6      --      --      --
                                              ----    ---     ---      --     ---     ---
  Total expense (income)....................  $ (6)   $(8)    $13      $8     $ 8     $10
                                              ====    ===     ===      ==     ===     ===


The $1 curtailment gain in fiscal year 2000 relates to the closure of certain
facilities associated with the First Brands merger. The $7 cost of termination
benefits and curtailment losses in fiscal year 1999 relates to termination
benefits related to the First Brands merger and the closure of certain
facilities. Employee termination expense related to the First Brands merger in
fiscal year 1999 was charged to merger, restructuring and asset impairment
costs.

The Company has defined contribution plans for most of its domestic employees
not covered by collective bargaining agreements. The cost of those plans is
based on either the Company's profitability and/or participants' deferrals. The
aggregate cost of the defined contribution plans was $4 in fiscal year 2001, $16
in fiscal year 2000 and $21 in fiscal year 1999.

16. INDUSTRY SEGMENT INFORMATION

Information regarding the Company's operating segments is shown below. Each
segment is individually managed with separate operating results that are
reviewed regularly by the chief operating decision makers. The operating
segments include:

     - U.S. Household Products and Canada: Includes cleaning, bleach and other
       home care products, and water filtration products, and all products
       marketed in Canada.

     - U.S. Specialty Products: Includes charcoal, automotive care, cat litter,
       insecticides, food products, professional products and the food storage
       and disposal categories.

     - International Operations: Includes operations outside the United States
       and Canada.

The table below represents operating segment information. Operating segment net
sales information for fiscal years ended June 30, 2000 and 1999 has been
restated to conform to the current year's presentation of sales,

                                        34
   35
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

16. INDUSTRY SEGMENT INFORMATION (CONTINUED)

net of coupon costs (See Note 1). Previously coupons were included in
advertising expense. Intersegment sales are insignificant.



                                               U.S. HOUSEHOLD     U.S.                      CORPORATE
                                   FISCAL        PRODUCTS &     SPECIALTY                   INTEREST &    TOTAL
                                    YEAR           CANADA       PRODUCTS    INTERNATIONAL     OTHER      COMPANY
                                 -----------   --------------   ---------   -------------   ----------   -------
                                                                                       
Net sales......................     2001           $1,521        $1,778        $  604            --      $3,903
                                    2000            1,570         1,791           628            --       3,989
                                    1999            1,499         1,785           602            --       3,886

Earnings before income taxes
  and cumulative effect of change   2001              470           466            84         $(533)        487
  in accounting principle......     2000              500           506            81          (465)        622
                                    1999              510           469            60          (609)        430

Identifiable assets............     2001              959         1,340         1,032           664       3,995
                                    2000            1,048         1,510         1,084           711       4,353
                                    1999            1,322         1,220           970           620       4,132

Capital expenditures...........     2001               37            57            31            67         192
                                    2000               49            52            21            36         158
                                    1999               59            64            23            30         176

Depreciation and
  amortization.................     2001               55            75            42            53         225
                                    2000               48            69            36            48         201
                                    1999               45            68            38            51         202

Interest expense...............     2001               --            --            --            88          88
                                    2000               --            --            --            98          98
                                    1999               --            --            --            97          97


Corporate, interest and other includes certain non-allocated administrative
costs, goodwill amortization, interest income, interest expense, and other
income and expense. Corporate interest and other also includes merger,
restructuring and asset impairment costs and related inventory write-offs
totaling $98, $40 and $188 in fiscal years 2001, 2000 and 1999, respectively.
Merger, restructuring and asset impairment costs were $59, $36 and $180, and
inventory write-offs were $39, $4 and $8 in fiscal years 2001, 2000 and 1999,
respectively. Had the Company allocated these charges by segment, the amounts
allocated would have been as follows: U.S. Household Products & Canada, $30 in
fiscal year 2001; U.S. Specialty Products, $57 in fiscal year 2001, $6 in fiscal
year 2000 and $15 in fiscal year 1999; International, $11 in fiscal year 2001,
$11 in fiscal year 2000 and $17 in fiscal year 1999; and Corporate, interest and
other, $23 in fiscal year 2000 and $156 in fiscal year 1999. Corporate assets
include cash, marketable securities, the Company's headquarters and research and
development facilities.

Net sales to the Company's largest customer, Wal-Mart Stores, Inc. and its
affiliates, were 20%, 19% and 19% of consolidated net sales in fiscal years
2001, 2000 and 1999, respectively. No other customer exceeded 5% of net sales in
any year.

                                        35
   36
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

17. COMMITMENTS AND CONTINGENT LIABILITIES

The Company has obligations to certain suppliers to purchase raw materials, at
various prices for estimated annual requirements for periods through September
2010. Estimated purchase commitments based on estimated annual requirements and
current market prices do not exceed $6 in any year for the next 5 years.

The Company is subject to various lawsuits and claims, which include contract
disputes, environmental issues, product liability, patent and trademark matters,
advertising and taxes. Although the results of litigation cannot be predicted
with certainty, it is the opinion of management, after consultation with
counsel, that the ultimate disposition of these matters, to the extent not
previously provided for, will not have a material adverse effect, individually
or in the aggregate, on the Company's consolidated financial statements taken as
a whole.

18. EARNINGS PER SHARE

A reconciliation of the weighted average number of common shares outstanding (in
thousands) used to calculate basic and diluted earnings per share is as follows:



                                                        2001       2000       1999
                                                       -------    -------    -------
                                                                    
Basic................................................  236,149    236,108    235,364
Stock options and other..............................    3,334      3,506      4,638
                                                       -------    -------    -------
Diluted..............................................  239,483    239,614    240,002
                                                       =======    =======    =======


                                        36
   37
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

19. QUARTERLY DATA (UNAUDITED)

The Company's quarterly data is as follows:



                                                        QUARTERS ENDED
                                        -----------------------------------------------
--------------------------------------  SEPTEMBER 30   DECEMBER 31   MARCH 31   JUNE 30   TOTAL YEAR(4)
IN MILLIONS, EXCEPT PER-SHARE AMOUNTS.  ------------   -----------   --------   -------   -------------
                                                                           
Fiscal year ended June 30, 2001
  Net Sales(1)....................         $  963        $   876      $  962    $1,102       $3,903
  Cost of Products Sold...........            549            525         584       662        2,319
  Earnings before cumulative effect of
     change in accounting principle...     $  100        $    64      $   79    $   81       $  325
  Cumulative effect of change in
     accounting principle.........             (2)            --          --        --           (2)
                                           ------        -------      ------    ------       ------
  Net Earnings(2),(3).............         $   98        $    64      $   79    $   81       $  323

Per Common Share
  Basic
     Earnings before cumulative effect
       of change in accounting
       principle..................         $ 0.43        $  0.27      $ 0.33    $ 0.34       $ 1.38
     Cumulative effect of change in
       accounting principle.......          (0.01)            --          --        --        (0.01)
                                           ------        -------      ------    ------       ------
     Net Earnings.................         $ 0.42        $  0.27      $ 0.33    $ 0.34       $ 1.37
  Diluted
     Earnings before cumulative effect
       of change in accounting
       principle..................         $ 0.42        $  0.27      $ 0.33    $ 0.34       $ 1.36
     Cumulative effect of change in
       accounting principle.......          (0.01)            --          --        --        (0.01)
                                           ------        -------      ------    ------       ------
  Net Earnings....................         $ 0.41        $  0.27      $ 0.33    $ 0.34       $ 1.35
  Dividends.......................           0.21           0.21        0.21      0.21         0.84
  Market Price (NYSE)
     High.........................         $45.88        $ 48.63      $37.40    $36.18       $48.63
     Low..........................          33.44          28.38       30.15     29.95        28.38
     Year-end.....................                                                            33.85


                                        37
   38
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                               THE CLOROX COMPANY

                    YEARS ENDED JUNE 30, 2001, 2000 AND 1999

           (MILLIONS OF DOLLARS, EXCEPT SHARE AND PER-SHARE AMOUNTS)

19. QUARTERLY DATA (UNAUDITED -- CONTINUED)




                                                        QUARTERS ENDED
                                        -----------------------------------------------
--------------------------------------  SEPTEMBER 30   DECEMBER 31   MARCH 31   JUNE 30   TOTAL YEAR(4)
IN MILLIONS, EXCEPT PER-SHARE AMOUNTS.  ------------   -----------   --------   -------   -------------
                                                                           
Fiscal year ended June 30, 2000
  Net Sales(1)....................         $  918        $   930      $1,009    $1,132       $3,989
  Cost of Products Sold...........            517            535         573       625        2,250
  Net Earnings(2),(3).............             87             76         106       125          394
Per Common Share
  Net Earnings
     Basic........................         $ 0.37        $  0.32      $ 0.45    $ 0.53       $ 1.67
     Diluted......................           0.36           0.32        0.44      0.52         1.64
  Dividends.......................           0.20           0.20        0.20      0.20         0.80
  Market Price (NYSE)
     High.........................         $58.25        $ 56.00      $56.38    $47.00       $58.25
     Low..........................          37.56          37.50       29.06     32.38        29.06
     Year-end.....................                                                            44.81


------------
(1) Coupon costs, previously reported as part of advertising expense, are now
    included in net sales. Net sales and advertising expense for prior periods
    have been restated to conform to the current presentation.

(2) The Company expenses advertising costs as incurred, although costs incurred
    during interim periods are generally expensed ratably in relation to
    revenues.

(3) Net earnings for the second, third and fourth quarters of fiscal year 2001
    include the effect of restructuring and asset impairment charges of $4, $23
    and $32, respectively. Net earnings for the first, second, third and fourth
    quarters of fiscal year 2000 include the effect of restructuring and asset
    impairment charges of $2, $6, $13 and $15, respectively.

(4) Due to rounding, totals for the year may not equal the sum of the quarterly
    amounts.

                                        38
   39

              RESPONSIBILITY FOR CONSOLIDATED FINANCIAL STATEMENTS

The Company's management is responsible for the preparation of the accompanying
consolidated financial statements and for their content as well as other
information contained herein. These financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America and include amounts which are based on management's best estimates and
judgments.

The Company maintains a system of internal accounting controls that includes
selection and development of employees, division of duties, and written
accounting and operating policies and procedures augmented by a continuing
internal audit program. Although there are inherent limitations to the
effectiveness of any system of accounting controls, the Company believes that
its system provides reasonable, but not absolute, assurance that its assets are
safeguarded from unauthorized use or disposition and that its accounting records
are sufficiently reliable to permit the preparation of financial statements that
conform in all material respects with accounting principles generally accepted
in the United States of America.

The Company has retained Deloitte & Touche LLP, independent public accountants,
to audit the financial statements. Their accompanying report is based on an
examination conducted in accordance with auditing standards generally accepted
in the United States of America, which includes a review of the Company's
systems of internal control as well as tests of accounting records and
procedures sufficient to enable them to render an opinion on the Company's
financial statements.

The Board of Directors has an audit committee composed of independent directors.
The Committee meets periodically and independently throughout the year with
management, internal auditors and the independent accountants to discuss the
Company's internal accounting controls, auditing and financial reporting
matters. The internal auditors and independent accountants have unrestricted
access to the audit committee.

                          INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors of The Clorox Company:

We have audited the accompanying consolidated balance sheets of The Clorox
Company and its subsidiaries (the "Company") as of June 30, 2001 and 2000, and
the related consolidated statements of earnings, stockholders' equity and cash
flows for the fiscal years ended June 30, 2001, 2000 and 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the accompanying consolidated financial statements present
fairly, in all material respects, the financial position of the Company as of
June 30, 2001 and 2000, and the results of its operations and its cash flows for
the fiscal years ended June 30, 2001, 2000, and 1999 in conformity with
accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Oakland, California
August 17, 2001

                                        39
   40

FIVE-YEAR FINANCIAL SUMMARY

THE CLOROX COMPANY



               YEARS ENDED JUNE 30                    2001        2000       1999        1998       1997
----------------------------------------------------------------------------------------------------------
IN MILLIONS, EXCEPT SHARE AND PER-SHARE DATA.
                                                                                   
OPERATIONS
  Net sales(1)....................................  $  3,903    $  3,989   $  3,886    $  3,762   $  3,470
                                                    --------    --------   --------    --------   --------
  Cost of products sold...........................     2,319       2,250      2,181       2,124      1,976
  Operating expenses(1)...........................       914         959        974         965        892
  Other...........................................       124         122        121         114         84
  Merger, restructuring and asset impairment......        59          36        180           3         19
                                                    --------    --------   --------    --------   --------
  Total costs and expenses........................     3,416       3,367      3,456       3,206      2,971
                                                    --------    --------   --------    --------   --------
  Earnings before income taxes and cumulative
     effect of change in accounting principle.....       487         622        430         556        499
  Income taxes....................................       162         228        184         206        199
                                                    --------    --------   --------    --------   --------
  Earnings before cumulative effect of change in
     accounting principle.........................       325         394        246         350        300
  Cumulative effect of change in accounting
     principle....................................        (2)         --         --          (7)        --
                                                    --------    --------   --------    --------   --------
  Net earnings....................................  $    323    $    394   $    246    $    343   $    300
                                                    ========    ========   ========    ========   ========
  Change in net sales.............................        -2%          3%         3%          8%        10%
  Change in net earnings..........................       -18%         60%       -28%         14%         4%

COMMON STOCK
  Weighted average shares (in thousands)
     Basic........................................   236,149     236,108    235,364     234,666    235,042
     Diluted......................................   239,483     239,614    240,002     239,540    239,346
  Net earnings per common share
     Basic
       Earnings before cumulative effect of change
          in accounting principle.................  $   1.38    $   1.67   $   1.05    $   1.49   $   1.27
       Cumulative effect of change in accounting
          principle...............................     (0.01)         --         --       (0.03)        --
                                                    --------    --------   --------    --------   --------
     Net Earnings.................................  $   1.37    $   1.67   $   1.05    $   1.46   $   1.27
                                                    --------    --------   --------    --------   --------
     Diluted
       Earnings before cumulative effect of change
          in accounting principle.................  $   1.36    $   1.64   $   1.03    $   1.46   $   1.25
       Cumulative effect of change in accounting
          principle...............................     (0.01)         --         --       (0.03)        --
                                                    --------    --------   --------    --------   --------
     Net Earnings.................................  $   1.35    $   1.64   $   1.03    $   1.43   $   1.25
                                                    --------    --------   --------    --------   --------
  Dividends per common share......................  $   0.84    $   0.80   $   0.71    $   0.63   $   0.56
  Stockholders' equity per common share at end of
     year.........................................  $   8.03    $   7.62   $   6.67    $   6.32   $   6.10

OTHER DATA
  Property, plant and equipment -- net............  $  1,046    $  1,079   $  1,054    $  1,016   $    948
  Capital expenditures............................       192         158        176         190        161
  Long-term debt..................................       685         590        702         704        946
  Total assets....................................     3,995       4,353      4,132       4,065      3,799
  Stockholders' equity............................     1,900       1,794      1,570       1,473      1,430
  Return on net sales.............................       8.3%        9.9%       6.3%        9.1%       8.6%
  Return on average stockholders' equity..........      18.4%       23.4%      16.1%       23.9%      21.7%


------------
(1) Coupon costs, previously included in operating expenses, are now deducted
    from sales. Net sales and operating expenses for prior periods have been
    restated to conform to the current presentation.

                                        40