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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.            )
 
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Check the appropriate box:	
 	
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[   ]	 	Definitive Proxy Statement	
[   ]	 	Definitive Additional Materials	
[   ]	 	Soliciting Material Pursuant to §240.14a-12	

 	THE CLOROX COMPANY	 	
 	(Name of Registrant as Specified In Its Charter)	 	

 	(Name of Person(s) Filing Proxy Statement, if other than the Registrant)	 	

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To Our Fellow Shareholders

Dear Shareholders:
I am pleased to invite you to attend our 2019 Annual Meeting of Shareholders.
As we enter the final year of our 2020 Strategy, we remain committed to Good Growth – our philosophy that profitable, sustainable and responsible growth is a requirement for success in today’s marketplace – while also looking beyond the horizon, as we roll out our new strategy. By imagining new ways of earning customer loyalty and infusing our brands with bold ideas, we aim to continue to deliver not only superior consumer value but also the required performance to earn our shareholders’ continued trust.
Environmental, social and governance matters, including inclusion and diversity, continue to be top priorities for us, guiding us in making decisions that effectively serve the needs of our diverse consumer base. We have also continued our strong commitment to reducing the environmental impact of our operations and improving the sustainability of our supply chain and products, while also making a positive difference in the global communities in which we operate.
Our Board continues to provide excellent guidance and leadership, setting the right tone for the organization. Whether through strategic oversight, risk management, or people management and culture, the Board is constantly thinking about how we can meet the needs of our consumers with strong investment in brands that offer superior value, innovation and technology transformation, in ways that are responsible, in order to continue to generate long-term financial returns for you, our shareholders.
We look forward to sharing our progress and results with you at our Annual Meeting. Thank you for your continued support and investment in Clorox.
Sincerely,

Benno Dorer
 Chair and Chief Executive Officer

Dear Shareholders:
As Lead Independent Director of Clorox, it is my honor to serve with our other independent directors as the independent voices representing you, our shareholders, to help ensure that the Company continues to be managed with integrity, strong corporate governance, and appropriate oversight of strategy, risks and corporate culture.
Over the past fiscal year, I have had the opportunity to deepen my role and involvement with the Company and also to meet and engage more directly with our shareholders, customers and employees. I strongly believe that our people are the primary ambassadors of our brands, and as a result, it is important for our people to feel proud of Clorox and what it stands for.
Inclusion and diversity remain key priorities for the Board. The diverse backgrounds, skills and experiences of the Board enable us to provide strong guidance to Clorox in these key areas, as well as in our oversight of strategy and risks. We believe that a diverse Board, management team and workforce that is reflective of our diverse consumer base position us to better understand consumers’ wants and needs – which we believe drives our ability to deliver superior consumer value and successfully innovate. Diverse perspectives in the boardroom also allow us to evaluate issues through different experiences and perspectives and help us to guide the Company in a thoughtful way.
Once again in fiscal year 2019, I participated in outreach meetings with our shareholders to better understand the issues that are most important to you. As a Board, we continue to regularly discuss and consider investor feedback on a wide variety of business and environmental, social and governance issues, as we continue to strive to be responsible stewards of the Company.
On behalf of the independent directors, thank you for your confidence and your support.
Sincerely,

Pamela Thomas-Graham
 Lead Independent Director

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Notice of Annual Meeting of Shareholders
To be held on November 20, 2019
The 2019 Annual Meeting of Shareholders (the Annual Meeting) of The Clorox Company (Clorox or the Company) will be held at 9:00 a.m. Pacific time on Wednesday, November 20, 2019, at the Company’s Pleasanton, CA offices, 4900 Johnson Drive, Pleasanton, CA 94588, for the following purposes:

1.	To elect the eleven director nominees named in the proxy statement;	
2.	To hold an advisory vote to approve executive compensation;	
3.	To ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm; and	
4.	To approve an amendment to the Company’s Restated Certificate of Incorporation to eliminate the supermajority voting provision.	

Shareholders also will consider and act upon such other business as may properly come before the Annual Meeting or any adjournment or postponement.
Shareholders of record at the close of business on September 23, 2019, are entitled to vote at the Annual Meeting and any adjournment or postponement.
Proof of share ownership as of the record date will be required to attend the Annual Meeting. Please see the Attending the Annual Meeting section of the proxy statement for more information.
On or about October     , 2019, we began mailing a Notice of Internet Availability of Proxy Materials to our shareholders informing them that our Proxy Statement, Integrated Annual Report – Executive Summary, and voting instructions are available on the Internet as of the same date.
Your vote is very important. Even if you plan to attend the Annual Meeting, we hope that you will read the proxy statement and vote your proxy by telephone, via the Internet, or by signing, dating, and returning the proxy card in the envelope provided.
By Order of the Board of Directors,

Angela C. Hilt
 Vice President – Corporate Secretary
& Deputy General Counsel
The Clorox Company
1221 Broadway
Oakland, California 94612
October     , 2019
Important Notice Regarding the Availability of Proxy Materials for The Clorox Company Shareholders Meeting to be Held on November 20, 2019: The Notice of Annual Meeting, Proxy Statement, and 2019 Integrated Annual Report – Executive Summary are available at www.edocumentview.com/CLX.

THE CLOROX COMPANY - 2019 Proxy Statement	        	

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YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN
If you have questions about how to vote your shares, or need additional assistance, please contact Innisfree M&A Incorporated, who is assisting us in the solicitation of proxies:

501 Madison Avenue, 20th Floor
New York, New York 10022
Shareholders may call toll-free at (877) 750-9499
Banks and brokers may call collect at (212) 750-5833

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       	Leveraging Environmental, Social and Governance (ESG) Performance to Drive
Long-Term, Sustainable Value	     	1	
	BOARD OF DIRECTORS		3	
	Proposal 1: Election of Directors		3	
	Our Director Nominees		3	
	How We Identify, Evaluate and Nominate Our Directors		10	
	Director Skills & Experience		10	
	Diverse Backgrounds & Tenure		11	
	How Our Directors Are Elected		12	
	Vote Required		12	
	Board’s Recommendation		12	
	How You Can Communicate With Us		13	
	Shareholder Recommendations and Nominations of Director Candidates		13	
	Director Communications		13	
	Corporate Governance 		15	
	Corporate Governance Philosophy and Strengths		15	
	Corporate Governance Strengths		15	
	Our Commitment to Corporate Responsibility		15	
	Integrated Annual Reporting		16	
	The Clorox Company Governance Guidelines		16	
	The Board’s Role and Oversight		17	
	Our Corporate Governance Process		17	
	Shareholder Engagement		17	
	The Board’s Role in Risk Management and Culture Oversight		18	
	Board Meeting Attendance		19	
	Director Independence		19	
	Related Person Transaction and Conflict of Interest Policies and Procedures		19	
	Code of Conduct		20	
	Board Leadership Structure and Diversity		20	
	Board Committees		21	
	Annual Board and Director Evaluation Process		23	
	Director Compensation		23	
	STOCK OWNERSHIP INFORMATION		26	
	Beneficial Ownership of Voting Securities		26	
	EXECUTIVE COMPENSATION		28	
	Proposal 2: Advisory Vote to Approve Executive Compensation		28	
	Board’s Recommendation		28	
	Vote Required		29	

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       	Compensation Discussion and Analysis	     	30	
	Executive Summary		30	
	What We Pay: Components of Our Compensation Program		31	
	How We Make Compensation Decisions		39	
	Fiscal Year 2019 Compensation of Our Named Executive Officers		40	
	The Management Development and Compensation Committee Report		43	
	Compensation Committee Interlocks and Insider Participation		43	
	Compensation Discussion and Analysis Tables		44	
	Fiscal Year 2019 CEO Pay Ratio		57	
	Equity Compensation Plan Information		58	
	AUDIT COMMITTEE MATTERS		59	
	Proposal 3: Ratification of Independent Registered Public Accounting Firm		59	
	Board’s Recommendation		59	
	Vote Required		59	
	Audit Committee Report		60	
	Fees of the Independent Registered Public Accounting Firm		61	
	ADDITIONAL ITEMS TO BE VOTED ON		62	
	Proposal 4: 	Amendment to the Company’s Restated Certificate of Incorporation to Eliminate the Supermajority Voting Provision		62	
	Board’s Recommendation		63	
	Vote Required		63	
	INFORMATION ABOUT THE ANNUAL MEETING		64	
	Delivery of Proxy Materials		64	
	Voting Information		64	
	Form 10-K, Financial Statements, and Integrated Annual Report – Executive Summary		66	
	Solicitation of Proxies		66	
	Shareholder Proposals and Director Nominations for the 2020 Annual Meeting		67	
	Eliminating Duplicative Proxy Materials		68	
	Attending the Annual Meeting		69	
	Appendix A 	Proposed Amendment to the Company’s Restated Certificate of Incorporation		A-1	
	Appendix B 	Management’s Discussion and Analysis of Financial Condition and Results of Operations, Audited Financial Statements, and Other Selected Financial Information		B-1	

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 	Leveraging Environmental, Social and Governance (ESG) Performance to Drive Long-Term, Sustainable Value	
We are dedicated to being leaders in ESG performance, including reducing our carbon footprint; minimizing our operational footprint and enhancing the sustainability of our products; supporting our employees, so they can develop as leaders and advance in their careers; creating a respectful and safe work environment; promoting a dynamic culture that enables personal and professional growth, with inclusion and diversity as central to these commitments; and supporting the communities where we live and work. We recognize that these commitments to the environment, our people, and our communities are all key to Good Growth – our philosophy that profitable, sustainable and responsible growth are requirements for success in today’s marketplace.

	    	PEOPLE
WE STRIVE TO PROMOTE DIVERSITY, EMPOWERMENT AND RESPECT FOR ALL PEOPLE WHO TOUCH OUR BUSINESS.	

●	Ethnically diverse and female representation on our Board has consistently exceeded average representation at other Fortune 500 companies. We are also leaders in encouraging diversity of all types at senior levels.	
●	27% of our director nominees, 36% of our Executive Committee, and 43% of our global non-production managers are women.	
●	36% of our director nominees and 28% of our U.S. non-production managers are ethnically diverse.	
●	Two members of our Executive Committee identify as LGBTQ.	
●	We have received a perfect score on the Human Rights Campaign’s Corporate Equality Index, a recognition we have received each year since 2006.	
●	For the past two years, we have been included on Bloomberg’s Gender-Equality Index, an index of companies that are committed to transparency in gender reporting and advancing women’s equality in the workplace.	
●	We spent nearly $136 million in fiscal year 2019 with diverse suppliers in the U.S., which include businesses owned by ethnically diverse individuals, women, service personnel and veterans, and individuals who identify as LGBTQ.	

	    	PLANET
WE STRIVE TO SHRINK OUR ENVIRONMENTAL FOOTPRINT WHILE WE GROW – TO DO MORE WITH LESS.	

●	We have exceeded the 20% reduction goals we set in our 2020 Strategy for greenhouse gas emissions (33% reduction), solid-waste-to-landfill (21% reduction), and water use (21% reduction).	
●	We have cut energy usage by 18% and are on track to meet our reduction goal by the end of 2020.	
●	100% of our Glad facilities worldwide achieved zero waste-to-landfill status in the 2019 fiscal year, bringing our total to 13 global company sites versus our goal of 10.	
●	More than 99% of directly purchased paper-based packaging is now made from recycled or certified sustainable virgin fiber.	

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	    	PRODUCTS
WE STRIVE TO MAKE RESPONSIBLE PRODUCTS RESPONSIBLY.	

●	We surpassed our product sustainability goal two years early, having made sustainability improvements to 58% of our product portfolio versus our goal of 50% by 2020.	
●	Across our portfolio, 92% of our primary packaging is recyclable and 85% of our domestic retail sales volume carries the How2Recycle label.	
●	We’ve eliminated 100% of polyvinyl chloride (PVC) in our U.S. packaging and are on track to achieve our goal to eliminate PVC in packaging globally by the end of 2020.	
●	In May 2019, leaders from our Burt’s Bees and Glad businesses participated in the inaugural Ocean Plastics Leadership Summit, a forum for developing innovative solutions to the causes of plastic waste.	

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 	Board of Directors	

 	Proposal 1:
Election of Directors	

The Board, upon the recommendation of the Nominating, Governance and Corporate Responsibility Committee (NGCRC), has nominated the eleven people listed below for election at the Annual Meeting to serve until the 2020 Annual Meeting of Shareholders, and until their respective successors are duly elected and qualified.
Carolyn Ticknor, who has served on the Board since 2005, is not being re-nominated for re-election in accordance with the Board’s retirement age policy and, therefore, will be retiring from the Board on the date of the Annual Meeting.

Our Director Nominees
We invite you to read about our director nominees below. Our director nominees represent diverse perspectives and experiences and bring core strategic, operating, financial and governance skills as well as consumer product
expertise to our Board. Each of the director nominees has agreed to be named in this proxy statement and to serve as a director if elected, and is currently serving as a director of the Company.

Director Since		Name, Principal Occupation, and Other Information	
2016		Amy Banse	
	     	Amy Banse has served as managing director and head of funds of Comcast Ventures LLC, the venture capital arm of Comcast Corporation, a global media and technology company, since August 2011. Under her leadership, Comcast Ventures has grown the size and diversity of its portfolio, making it one of the country’s most active corporate venture arms, investing in early-and later-stage companies across a wide spectrum of industries, including commerce, digital media, cybersecurity, SaaS, enterprise, and autonomous vehicles. From 2005 to 2011, Banse was senior vice president, Comcast Corporation and president, Comcast Interactive Media, a division of Comcast responsible for developing online strategy and operating the company’s digital properties. In this role, she drove the acquisition of a number of digital properties, including Fandango, and, together with her team, oversaw the development of Xfinity TV. Since joining Comcast in 1991, Banse has held various positions at the company, including content development, programming investments and overseeing the development and acquisition of Comcast’s cable network portfolio. Earlier in her career, Ms. Banse was an associate at Drinker, Biddle & Reath LLP.
Other Public Company Boards:
 Banse serves as a director of Adobe, Inc. (May 2012 to present).
Nonprofit/Other Boards:
 Banse serves on the boards of a number of Comcast Ventures’ portfolio companies, including Quantifind, Inc. and Nextdoor, and on the board of Tipping Point Community.
Director Qualifications:
 Banse’s expertise in media and technology enables her to contribute valuable insights into digital media and online business. Her experience in starting, investing in and building businesses provides her with deep strategic and financial understanding, and her previous executive leadership roles contribute to her management and operational knowledge. Age: 60.
Committee Membership:
 Audit Committee.	

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Director Since		Name, Principal Occupation, and Other Information	
2007		Richard H. Carmona, M.D., M.P.H., F.A.C.S.	
	     	Richard Carmona has been chief of health innovations of Canyon Ranch Inc., a life-enhancement company, since August 2017. He previously served as vice chairman of Canyon Ranch, chief executive officer of the Canyon Ranch health division, and president of the nonprofit Canyon Ranch Institute from October 2006 to August 2017. He is the first distinguished professor of public health at the Mel and Enid Zuckerman College of Public Health at the University of Arizona. Prior to joining Canyon Ranch, Carmona served as the 17th Surgeon General of the United States from 2002 through 2006, achieving the rank of vice admiral. Previously, he was chairman of the State of Arizona Southern Regional Emergency Medical System, a professor of surgery, public health, and family and community medicine at the University of Arizona, and surgeon and deputy sheriff of the Pima County, Arizona,  Sheriff’s Department. Carmona served in the United States Army and the Army’s Special Forces.
Other Public Company Boards:
 Carmona serves as a director of Axon Enterprise, Inc. (formerly Taser International, March 2007 to present) and Herbalife Ltd. (October 2013 to present).
Nonprofit/Other Boards:
 Carmona serves on the boards of NuvOX Pharma LLC, DermSpectra LLC, TherimuneX Pharmaceuticals, Inc., Ross University and Health Literacy Media.
Director Qualifications:
 Carmona’s experience as the Surgeon General of the United States and extensive background in public health, including as CEO of a hospital and healthcare system, provide him with a valuable perspective on health and wellness matters as well as insight into regulatory organizations and institutions, which are important to the Company’s business strategy. In addition, his executive leadership background, including with a global lifestyle enhancement company, provides him with international experience and enables him to make valuable contributions to the Company’s international growth strategies. Carmona’s experience in the United States Army and in academia also strengthens the Board’s collective qualifications, skills and experience. Age: 69.
Committee Membership:
 Nominating, Governance and Corporate Responsibility Committee (Chair); Management Development and Compensation Committee.	

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Board of Directors

Director Since		Name, Principal Occupation, and Other Information	
2014		Benno Dorer	
	     	Benno Dorer has served as chief executive officer (CEO) of the Company since November 2014 and was appointed chair of the Board in August 2016. Prior to becoming CEO, Dorer was executive vice president and chief operating officer – Cleaning, International and Corporate Strategy since January 2013, with responsibility for the Laundry, Home Care, and International businesses as well as Corporate Strategy and Growth. He previously served as senior vice president – Cleaning Division and Canada from 2011 through 2012, senior vice president – Cleaning Division from 2009 to 2011, and vice president & general manager – Cleaning Division from 2007 to 2009. Dorer joined Clorox in 2005 as vice president & general manager – Glad® Products. Prior to that role, he worked for The Procter & Gamble Company for 14 years, leading the marketing organization for the Glad® products joint venture since its inception and holding marketing positions across a range of categories and countries.
Other Public Company Boards:
Dorer serves as a director of VF Corporation (February 2017 to present).
Nonprofit/Other Boards:
Dorer serves as the vice chair of the executive committee of the board of GMA (Grocery Manufacturers Association).
Director Qualifications:
Dorer’s leadership experience and his in-depth knowledge of the consumer packaged goods industry, the Company’s businesses and his leadership in developing the Company’s 2020 Strategy and its new strategy enable him to provide valuable contributions with respect to strategy, growth and long-range plans. Additionally, his extensive international background provides him with a broad perspective on international customer and consumer dynamics and business strategy. Age: 55.	
		 	
2015	     	Spencer C. Fleischer	
		Spencer Fleischer is managing partner of FFL Partners, L.P. (FFL), a private equity firm, where he has served in various roles since co-founding FFL in 1997. Before co-founding FFL, Fleischer spent 19 years with Morgan Stanley & Company as an investment banker and manager. At Morgan Stanley & Company, he was a member of the worldwide Investment Banking Operating Committee and also held roles including head of investment banking in Asia and head of corporate finance for Europe.
Other Public Company Boards:
 Fleischer is a director of Levi Strauss & Co. (July 2013 to present). He was previously a director of Banner Corporation (October 2015 to December 2016).
Nonprofit/Other Boards:
 Fleischer is a director of Eyemart Express Holdings LLC and Americans for Oxford, Inc.
Director Qualifications:
 Fleischer brings to the Board more than 35 years of financial and operational expertise as well as deep international experience. His significant experience in both private equity and investment banking enables him to contribute valuable insights into strategic planning, mergers and acquisitions and operating expertise to the Company. His leadership role at FFL also allows him to provide significant experience in compensation matters. Age: 66.
Committee Membership:
 Management Development and Compensation Committee (Chair).	

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Director Since		Name, Principal Occupation, and Other Information	
2013		Esther Lee	
	     	Esther Lee has served as executive vice president – global chief marketing officer at MetLife Inc., an insurance, annuities, and employee benefits company, since January 2015. Previously, Lee served as senior vice president – brand marketing, advertising and sponsorships for AT&T from 2009 to December 2014. From 2007 to 2008 she served as CEO of North America and president of global brands for Euro RSCG Worldwide. Prior to that, she served for five years as global chief creative officer for The Coca-Cola Company. Earlier in her career, Lee worked in several leadership positions in the advertising industry, including as co-founder of DiNoto Lee. In this capacity, Lee worked with several consumer packaged goods companies, including The Procter & Gamble Company, Unilever and Nestle.
Nonprofit/Other Boards:
 Lee serves on the boards of the MetLife Foundation and HATCH, a non-profit organization that connects people to resources and a global network to accelerate ideas into solutions, and on the advisory board of Kairos, a venture capital fund that builds and funds companies that make life more affordable.
Director Qualifications:
 Lee brings to the Company significant executive and marketing expertise, focused on developing customer strategies to drive growth, building high-performing teams, and driving customer-centric innovation and transformation. Her current and prior executive leadership roles in global brand marketing, advertising, media and sponsorship have afforded her expertise in consumer engagement, creativity and digital transformation, as well as the operating models in these areas, that enable her to provide valuable contributions to the Company’s business strategies. Age: 60.
Committee Membership:
 Nominating, Governance and Corporate Responsibility Committee.	
		 	
2016		A. D. David Mackay	
	     	David Mackay served as president and chief executive officer of Kellogg Company, a food manufacturing company, from 2006 until his retirement in 2011. From 2003 to 2006, he served as the company’s president and chief operating officer. Prior to that, Mackay held a number of other leadership positions at Kellogg, including roles at Kellogg Australia, United Kingdom and Republic of Ireland. He also previously served as managing director of Sara Lee Corporation in Australia and held various positions at Mars, Inc.
Other Public Company Boards:
 Mackay is a director of Fortune Brands Home and Security (September 2011 to present). Mackay previously served as a director of Keurig Green Mountain, Inc. (December 2012 to March 2016).
Nonprofit/Other Boards:
 Mackay serves on the boards of FSHD Global Research Foundation Ltd., Facio Therapies, and Tropic Sport LLC.
Director Qualifications:
 Mackay brings significant strategic leadership and operational experience to the Board. His extensive consumer products background and his international experience allow him to contribute valuable insights regarding the Company’s industry, operations and international businesses. In addition, his previous leadership roles provide him with expertise in executive compensation and succession planning matters. Age: 64.
Committee Membership:
 Audit Committee; Management Development and Compensation Committee.	

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Board of Directors

Director Since	      	Name, Principal Occupation, and Other Information	
1999		
Robert W. Matschullat	
		Robert Matschullat served as independent lead director of the Board from November 2012 until July 2015. He was interim chairman and interim chief executive officer of the Company from March 2006 through October 2006, served as presiding director of the Board from January 2005 through March 2006 and served as chairman of the Board from January 2004 through January 2005. Previously, he was the vice chairman and chief financial officer of The Seagram Company Ltd., a global company with entertainment and beverage operations. Prior to joining The Seagram Company Ltd., Matschullat served as head of worldwide investment banking for Morgan Stanley & Co. Incorporated, and was on the Morgan Stanley Group board of directors.

Other Public Company Boards:
Matschullat serves on the board of Visa, Inc. (October 2007 to present), having served as chairman of the board of Visa, Inc. from April 2013 to April 2019. He previously served on the board of The Walt Disney Company, Inc. (December 2002 to March 2018).

Director Qualifications:
Matschullat brings to the Company a wealth of public company leadership experience at the Board and executive levels. Matschullat’s executive leadership experience includes service as the chief financial officer of a major global company and as the division head of a major financial institution, providing him with expertise in business and financial matters as well as broad international experience. In addition, Matschullat has an extensive understanding of the Company’s business, having served on the Board since 1999, including in the leadership roles of independent lead director, non-executive chairman and presiding director of the Board. Matschullat also served as the Company’s interim chief executive officer. These experiences have provided him with a long-term perspective, as well as valuable management, governance and leadership experience. Age: 71.

Committee Membership:
Nominating, Governance and Corporate Responsibility Committee.	
		 	
2018		
Matthew J. Shattock	
		Matthew Shattock has served as non-executive chairman of the board of Beam Suntory Inc., the world’s third largest premium spirits company, since April 2019. He previously served as chairman and CEO of Beam Suntory, having joined Beam in March 2009 as president & CEO and led the company’s successful growth strategy transformation and subsequent integration of the Beam and Suntory spirits businesses following Beam’s acquisition by Suntory in 2014. Prior to joining Beam, he spent six years at Cadbury plc, an international confectionary manufacturer, where he led its businesses first in The Americas and then in the Europe, Middle East & Africa region. Prior to Cadbury, Shattock spent 16 years at Unilever, an international manufacturer of food, home care and personal care products, in various leadership roles, culminating in his role as chief operating officer of Unilever Best Foods North America.

Other Public Company Boards:
Shattock serves as a director of VF Corporation (February 2013 to present).

Nonprofit/Other Boards:
Shattock serves as a director of Suntory Holdings Ltd. and Beam Suntory Inc. and is a member of the board of The Boys and Girls Club of Lake County, Illinois.

Director Qualifications:
Shattock brings significant experience in the consumer packaged goods industry to the Board. His current and prior leadership roles, including overseeing the successful growth, integration and strategy transformation of a global spirits company, enable him to provide valuable insights to the Company’s business. Shattock has a strong track record of driving growth through innovation, brand communication and operational excellence. Age: 57.

Committee Membership:
Audit Committee.	

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Director Since	      	Name, Principal Occupation, and Other Information	
2005		
Pamela Thomas-Graham	
		Pamela Thomas-Graham is the lead independent director for the Company. She is the founder and chief executive officer of Dandelion Chandelier LLC, a private digital media enterprise focused on the world of luxury. Prior to founding Dandelion Chandelier in August 2016, she served as chair, new markets, of Credit Suisse Group AG, a global financial services company, from October 2015 to June 2016. She served as chief marketing and talent officer, head of private banking & wealth management new markets, and member of the executive board of Credit Suisse from January 2010 to October 2015. From 2008 to 2009, she served as a managing director in the private equity group at Angelo, Gordon & Co. From 2005 to 2007, Thomas-Graham held the position of group president at Liz Claiborne, Inc. She served as chairman, president and chief executive officer of CNBC from 2001 to 2005. Previously, Thomas-Graham served as an executive vice president of NBC and as president and chief executive officer of CNBC.com. Prior to joining NBC, Thomas-Graham was a partner at McKinsey & Company.

Other Public Company Boards:
Thomas-Graham serves on the boards of Bank of N.T. Butterfield & Son (December 2017 to present) and Norwegian Cruise Line Holdings Ltd. (April 2018 to present).

Nonprofit/Other Boards:
Thomas-Graham serves on the boards of Peloton Interactive, Inc. and the Parsons School of Design.

Director Qualifications:
Thomas-Graham brings to the Company significant executive expertise, including as a current and former CEO. Her current and prior executive leadership roles enable her to provide valuable contributions with respect to management, operations, growth and long-range plans. In addition, Thomas-Graham brings to the Company significant experience in the area of branding. Her prior experience as a management consultant also enables her to provide valuable contributions to the Company’s business strategies and mergers and acquisitions activities. Additionally, her leadership experience in banking and private equity provides her with financial and accounting expertise, enabling her to contribute to the oversight of the Company. Age: 56.

Committee Membership:
Nominating, Governance and Corporate Responsibility Committee.	
		 	
2017		
Russell J. Weiner	
		Russell J. Weiner is chief operating officer and president of the Americas for Domino’s Pizza, Inc., a restaurant chain, a role he assumed in July 2018. Before assuming this position, he served as president of Domino’s USA from September 2014 through June 2018. Prior to his role as president of Domino’s USA, he served as the company’s executive vice president, chief marketing officer, starting in 2008. Before joining Domino’s, he was vice president of marketing, Colas at Pepsi-Cola North America from 2005 to 2008. During his tenure at Pepsi-Cola North America, which commenced in 1998, Weiner held a number of leadership roles in marketing and brand management.

Director Qualifications:
Weiner’s experience in digital innovation enables him to help the Company maintain its leadership position in digital technology within the consumer packaged goods industry. In addition, his executive leadership experience in the food and consumer packaged goods industries enables him to contribute his deep knowledge of brand building, marketing, operations and consumer insights. Age: 51.

Committee Membership:
Audit Committee; Management Development and Compensation Committee.	

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Board of Directors

Director Since	      	Name, Principal Occupation, and Other Information	
2015		
Christopher J. Williams	
		Christopher Williams has served as the chairman and chief executive officer of The Williams Capital Group, L.P. and Williams Capital Management, LLC (Williams Capital), an investment banking and financial services firm, since the company’s formation in 1994. Prior to founding Williams Capital, Williams managed the derivatives and structured finance division of Jefferies & Company. He previously worked at Lehman Brothers, where his roles included managing groups in the corporate debt capital markets and derivatives structuring and trading.

Other Public Company Boards:
Williams is a director of Ameriprise Financial, Inc. (September 2016 to present). He previously served on the boards of Caesars Entertainment Corporation (April 2008 to March 2019) and Wal-Mart Stores Inc. (June 2004 to June 2014).

 Nonprofit/Other Boards:
Williams serves on the boards of Cox Enterprises Inc., Lincoln Center for the Performing Arts, and The Partnership for New York City.

Director Qualifications:
Williams brings a wealth of financial, accounting, and strategic knowledge to the Board with his years of experience in investment banking and finance, and as the former chair of the audit committee of a Fortune 100 company. He also contributes important executive management and leadership experience as the chairman and chief executive officer of an investment management firm. As a current and former director of several public and private companies, he brings a valuable perspective for the Company’s strategy and operations as well as extensive customer insights. Age: 61.

Committee Membership:
Audit Committee (Chair – effective as of this Annual Meeting, subject to his re-election to the Board).	

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How We Identify, Evaluate and Nominate Our Directors
The NGCRC engages in continuous Board succession planning and Board refreshment, working closely with our Board in determining the skills, experiences, and characteristics desired for the Board as a whole and for its individual members, and also screening and recommending candidates for nomination by the full Board.

While the Board has not established any specific minimum qualifications that a potential nominee must possess, director candidates, including incumbent directors, are assessed based upon criteria established by the NGCRC in light of the Company’s long-term strategy, the skills and backgrounds currently represented on the Board, and any specific needs identified in the Committee’s evaluation of Board composition. Criteria include broad-based leadership and business skills and experience, prominence and reputation in their professions, global business and social perspective, ability to effectively represent the long-term interests of our shareholders and other stakeholders, personal integrity and judgment, and diversity of thought, background and experience. The NGCRC works to ensure that any slate of director candidates that it presents to the Board includes diverse candidates.
The NGCRC focuses on achieving the right balance of tenure of our directors to obtain a Board with a mix of fresh perspectives and institutional memory of longer-tenured directors who have seen issues arise over time and have worked with different CEOs and management teams to guide the Company.

The ability of incumbent directors to continue to contribute to the Board and the Company’s evolving needs is also carefully considered in connection with the renominating process. Further, under the Company’s Corporate Governance Guidelines (Governance Guidelines), non-management directors whose personal circumstances change in a manner that affects their ability to contribute to the Company, including a change in their primary job responsibilities, must offer their resignation for the Board’s consideration, to ensure that the individual is still qualified to perform their duties as a director of the Company.

Director Skills & Experience
The following experience and skills, among others, have been specifically identified by the NGCRC as being important in creating a diverse and well-rounded Board:

	Consumer packaged goods or relevant industry expertise
	
	Brand-building/marketing/digital/e-commerce experience
  	
	Significant M&A/financial/accounting expertise
  	
	Operational experience
  	
	Regulatory, scientific or R&D experience
  	
	Human capital and culture experience

	Emerging technology/innovation experience
  	
	Retail/customer experience
  	
	International experience
  	
	Experience in product development or supply chain management
  	
	ESG experience (sustainability, social responsibility, public issues expertise)
  	
	Cybersecurity/information technology knowledge

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Board of Directors

●	Consumer Packaged Goods or Relevant Industry Expertise helps a director provide guidance on the Company’s strategy and position in our industry, in addition to providing market insights.	
●	Emerging Technology and Innovation Experience supports the Company’s strategy, innovation and business operations – emerging technologies and innovation can disrupt a business strategy, and a director who is able to identify and understand emerging technologies can support the development and execution of our corporate strategy.	
●	Brand Building / Marketing Experience, including digital marketing and e-commerce experience, enables a director to provide insight on building our brands and marketing to consumers in an ever-evolving digital and e-commerce landscape.	
●	Retail and Customer Experience allows a director to provide insights on consumer engagement and customer relations, in addition to a comprehensive understanding of industry trends.	
●	Significant Mergers and Acquisitions / Strategy Experience and Financial / Accounting Expertise enables a director to provide perspective on the Company’s merger and acquisitions, operational integration, partnership, and adjacency strategies, and to analyze and oversee the Company’s financial position, financial statements and reporting, and results of operations.	
●	International Experience supports the Company’s global business strategy by drawing upon a director’s experience managing international operations or exposure to different cultural perspectives and practices to ensure that we have the tools to fully understand the wants and needs of our diverse consumer base.	
●	Operational Experience enables a director to contribute to the Company’s management expertise, operations, strategy, growth, and long-range plans.	
●	Experience in Product Development / Supply Chain Management supports the Company’s strategy and operations, enabling a director to provide insight	
	in identifying and developing new products and identifying new areas for existing products and also anticipating and managing supply chain and manufacturing disruptions and issues.	
●	Regulatory, Scientific or Research & Development Experience supports the Company’s brand and intellectual property portfolio and allows a director to provide insights on navigating the regulatory environment in the U.S. and in international markets, including in highly regulated sectors, such as health and wellness.	
●	Environmental, Social and Governance (ESG) Experience, including sustainability, social responsibility, and public issues experience, allows a director to appropriately consider and address business, social and environmental challenges and the priorities of stakeholders, while also mitigating risks and unlocking opportunities for long-term sustainable growth. This experience enables a director to help the Company navigate its emerging business imperatives.	
●	Human Capital and Culture Experience allows a director to help ensure our culture reflects our mission and values and that our employees and other people who touch our business are appropriately considered in corporate decisions.	
●	Cybersecurity and Information Technology Knowledge allows a director to effectively oversee and advise on the Company’s cybersecurity and risk management programs.	
To enhance and expand on the key skills and experiences relevant to the Company’s industry, our directors regularly participate in external continuing education programs and presentations developed internally and given by external expert speakers. New directors also participate in comprehensive orientation sessions that provide them with a robust overview of the Company’s business and strategies as well as a thorough understanding of their fiduciary duties, which allows new directors to begin making contributions to the Board at the start of their service.

Diverse Backgrounds & Tenure
Our director nominees represent diverse perspectives and experiences, and we regularly assess our Board to ensure that we have a mix of tenures balancing fresh perspectives with institutional memory of longer-tenured directors who have seen issues arise over time and have worked with different CEOs and management teams to guide the Company.

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Clorox is committed to inclusion and diversity throughout our organization from the boardroom to the factory floor. As highlighted in our Governance Guidelines, the Board values diversity and recognizes the importance of having unique and complementary backgrounds and perspectives in the boardroom. The Board believes that setting the tone at the top – that people of all backgrounds are welcome and empowered – helps the Company attract and retain the best talent and also helps lead to a better strategy that resonates with our customers and consumers. The Board endeavors to bring together diverse skills, professional
experience, perspectives, age, race, ethnicity, gender, sexual identity and orientation, and cultural backgrounds that reflect the Company’s diverse consumer and investor base, and to guide the Company in a way that reflects the best interests of all of our shareholders and considers the impact on other stakeholders. The NGCRC assesses the effectiveness of these efforts by examining the overall composition of the Board, assessing how individual director candidates, including incumbent directors, can contribute to the overall success of the Board, and reviewing individual, committee, and Board evaluation results.

How Our Directors Are Elected
Vote Required
The Company’s Bylaws require each director to be elected by a majority of the votes cast with respect to such director in uncontested elections—the number of shares voted FOR a director must exceed the number of shares voted AGAINST that director.
The people designated in the proxy and voting instruction card intend to vote your shares represented by proxy FOR the election of each of these nominees, unless you include instructions to the contrary. In the event any director nominee is unable to serve or for good cause will not serve, the persons named as proxies may vote for a substitute nominee recommended by the Board, or the Board may reduce the size of the Board or leave a vacancy.
Under the Company’s Bylaws, any director who fails to be elected by a majority of the votes cast in an uncontested election must tender their resignation to the Board. The NGCRC would then make a recommendation to the Board whether to accept or reject the resignation, or whether
other action should be taken. The Board would act on the NGCRC’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date the election results are certified. A director who tenders their resignation would not participate in the Board’s decision.
Board’s Recommendation
The Board unanimously recommends a vote FOR each of the Board’s eleven nominees for director listed above. The Board believes that each nominee listed above is highly qualified and has the background, skills, experience, and attributes that qualify each nominee to serve as a director of the Company. See each nominee’s biographical information and the How We Identify, Evaluate and Nominate our Directors section above for more information. The Board’s recommendation is based on its carefully considered judgment that the background, skills, experience, and attributes of the nominees make them the best candidates to serve on the Board.

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Board of Directors

How You Can Communicate With Us
Shareholder Recommendations and Nominations of Director Candidates
The NGCRC considers recommendations from many sources, including shareholders, regarding possible candidates for director. Such recommendations, together with biographical and business experience information (similar to that required to be disclosed under the applicable Securities and Exchange Commission (SEC) rules and regulations) regarding the candidate, should be submitted to The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888. The NGCRC evaluates all candidates for the Board in the same manner, including those suggested by shareholders.
In addition, our Bylaws permit a shareholder or group of up to 20 shareholders who have owned at least 3% of the outstanding shares of the Company’s common stock (Common Stock) for at least three years to submit director nominees (up to 20% of the Board) for inclusion in the Company’s proxy statement and form of proxy used in connection with the Annual Meeting (proxy materials) if the shareholder(s) provide(s) timely written notice of such
nomination(s) and the shareholder(s) and the nominee(s) satisfy the requirements specified in the Company’s Bylaws. Shareholders who wish to nominate directors for inclusion in the Company’s proxy materials or directly at an annual meeting of shareholders in accordance with the procedures in our Bylaws should follow the instructions under the Shareholder Proposals and Director Nominations for the 2020 Annual Meeting section of this proxy statement.
Director Communications
Shareholders and interested parties may direct communications to individual directors, including the lead independent director, to a Board committee, to the independent directors as a group, or to the Board as a whole, by addressing the communications to the appropriate party and sending them to The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888. The Corporate Secretary will review all communications so addressed and will forward to the addressee(s) all communications determined to bear substantively on the business, management, or governance of the Company.

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Message from Rich Carmona, Chair of the Nominating, Governance and Corporate Responsibility Committee

Dear Shareholders:
A key priority of the NGCRC is ensuring that we have the right people in the boardroom for the Company and its shareholders. We regularly assess our Board composition for strong, independent leadership, skills and expertise tailored to our business strategy and needs and a mix of tenures to ensure that we have continuously fresh perspectives, as well as deep knowledge of the Company, and diverse voices and backgrounds that are reflective of the diverse populations that we have the privilege of serving. You’ll see this independence and balanced mix reflected in the biographies of our director nominees above. We believe that the diversity of our Board not only aligns with our values and culture but also provides us with a strong strategic advantage by allowing us to have a more comprehensive understanding of how we can better serve the needs of our diverse consumer base.
We believe that consistently reviewing and refreshing the Board’s skill sets and perspectives is important to ensure that the Board is prepared to anticipate and face the challenges presented by the dynamic industry and changing external environment in which we operate, both now and as we look down the road.
Another key role of the NGCRC—and which is reflected in our decision a few years ago to expand the name and mandate of the NGCRC from the Nominating and Governance Committee—is overseeing Clorox’s corporate responsibility programs. The other NGCRC members and I meet with management to review and discuss corporate responsibility initiatives, challenges and opportunities, so that we can advise on key corporate responsibility matters that affect all of Clorox’s stakeholders. Whether it is helping guide Clorox’s environmental, social and governance strategies, including important environmental topics such as climate change and plastic waste, or discussing insights on corporate culture and inclusion and diversity, the NGCRC takes seriously its responsibility to ensure that the Company is responsible, and we remain committed and accountable to you, our shareholders.
After nearly fourteen years of service, Carolyn Ticknor will not be standing for re-election and is retiring from the Board on the date of the Annual Meeting, in accordance with the Governance Guidelines. We sincerely thank Ms. Ticknor for her contributions to the Board and the Company during her tenure.
Sincerely,

Rich Carmona
 Chair, Nominating, Governance and Corporate Responsibility Committee

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 	Corporate Governance	
Corporate Governance Philosophy and Strengths
Consistent with our focus on Good Growth, we are committed to strong corporate governance and corporate responsibility. We regularly review our policies and practices to ensure that they further the interests of our shareholders, promote the long-term health of our business, provide effective oversight of management, and encourage responsible and ethical behavior by our directors and employees. Our Governance Guidelines, Code of Conduct, and other company policies establish a framework to further these goals and guide our decisions, as described in greater detail below.
Corporate Governance Strengths

✓	All of our director nominees are independent, except for our CEO	
✓	Annual election of all directors	
✓	Diverse Board with effective mix of skills, experiences, and perspectives	
✓	Active Board refreshment and average board tenure of 7.4 years*	
✓	100% independent Board committee members	
✓	Diverse Board committee leadership	
✓	Majority voting and director resignation policy in uncontested director elections	
✓	Strong lead independent director with ability to call special meetings of the Board and active supervision of meeting materials, agendas and schedules	
✓	Proactive shareholder engagement	
✓	Proxy access right for shareholders	
✓	Special meeting right for shareholders	
✓	Robust Code of Conduct applicable to directors, officers, and employees	
✓	Effective annual Board, Board committee, and individual director evaluation process	
✓	Rigorous stock ownership guidelines for directors and executives	
✓	Employees, directors and officers prohibited from hedging our stock	

*	As of August 30, 2019.	
Our Commitment to Corporate Responsibility
Doing the right thing is one of Clorox’s corporate values – we believe that the long-term health of the Company depends on our integrity and are proud of our tradition of honesty, fair dealing and ethical practices. As a result, corporate responsibility is foundational to our operations, and we consider it integral to our business.
In furtherance of our focus on corporate responsibility, in fiscal year 2017, we changed the name of our Nominating and Governance Committee to include Corporate Responsibility and enhanced the NGCRC’s charter in the areas of corporate responsibility and sustainability to reflect the work that was already being done by this committee. The revised charter expands the Committee’s responsibilities to include oversight of corporate responsibility, including with regard to culture and human capital, and sustainability matters. While the committee as well as the full Board has historically provided oversight in these areas, the Board felt it was important to formalize these responsibilities, reflecting our long-standing values and commitment to best practices in corporate responsibility and sustainability. The NGCRC considers and discusses environmental, health, safety and social matters each time it meets.
In 2015, we became a signatory to the United Nations Global Compact, which is the world’s largest corporate responsibility initiative. As a signatory, we pledged to support and promote 10 principles in the areas of human rights, labor, the environment and anti-corruption. Our commitment to sustainability includes:

●	Making responsible products responsibly;	
●	Shrinking our environmental footprint while we grow; and	
●	Reducing the environmental impact of our operations, improving the sustainability of our upstream supply chain and reducing the impact of our products and packaging once used by consumers.	

In the seventh year of our sustainability goal period, we have already exceeded the 20% reduction goals we set in our 2020 Strategy for greenhouse gas emissions (33% reduction), solid-waste-to-landfill (21% reduction) and water use (21% reduction), and all of our Glad® facilities achieved zero waste-to-landfill status (bringing our total to 13 global company sites versus our goal of 10). More than 99% of directly purchased paper-based packaging is now made from recycled or certified sustainable virgin fiber – which was one of our 2020 goals for product and packaging sustainability, aimed at reducing the pressure on natural forests and related impacts on climate change. We also spent nearly $136 million with diverse suppliers in the U.S. during fiscal year 2019, which include businesses owned by minorities, women, service personnel and veterans, and individuals who identify as LGBTQ.

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We are also committed to helping communities and safeguarding families through initiatives that promote health, education and safety. Some initiatives from fiscal year 2019 include:

●	Encouraging our employees to support causes of their choosing by participating in our workplace giving program, which also allows eligible charities to receive matching funds from Clorox.	
●	Donating thousands of cases of Clorox, Glad, Kingsford and Burt’s Bees products, working with our partner, the American Red Cross, in response to natural disasters such as hurricanes Florence and Michael and Midwest U.S. flooding.	
●	Kicking off the Rainbow Light Shine Your Light™ campaign in April 2019 to make Rainbow Light®-brand vitamin drops for Vitamin Angels, a nonprofit organization providing lifesaving vitamins to mothers and children at risk of malnutrition, that will be distributed in 25 women’s shelters coast-to-coast to celebrate Rainbow Light® and Vitamin Angels’ 25-year partnership.	
We believe our financial performance and commitment to corporate responsibility go hand in hand. Each year, we publish an integrated report that highlights the intersection of our business and corporate responsibility commitments by reporting our financial and ESG performance as described below.
Integrated Annual Reporting
Clorox was among the first U.S. companies to pursue integrated annual reporting, which we adopted in 2011. Our integrated annual report uses the Global Reporting Initiative framework, as well as reports against the Ten Principles of the United Nations Global Compact. We engage a third party to review certain non-financial key performance indicators, and we continue to look for opportunities to provide metrics that provide further insight into how we create value for all our stakeholders. This year, as part of our ongoing efforts to implement best practices and provide additional information that our shareholders
may find helpful, we are including certain information aligned with the Sustainability Accounting Standards Board (SASB) reporting framework. This is the first year that we will be reporting certain information aligned with SASB, and we hope to continue making more disclosures in the future pursuant to this framework as standards continue to formalize and collecting and validating data for relevant industry classifications becomes more commonplace and comprehensive. We look forward to receiving feedback from our stakeholders and continuing to collect and disclose information that is as useful and meaningful as possible, and also to continuing the journey to providing additional relevant data for key ESG indicators and helping establish more uniform ESG reporting standards for our industry generally. Clorox’s use of SASB-aligned disclosure this year in our integrated annual report is an important step.
The Clorox Company Governance Guidelines
The Board has adopted Governance Guidelines to reflect the Board’s view and the Company’s policy regarding significant corporate governance matters, which the Board believes are best practice. The Governance Guidelines present a framework for the governance of the Company by setting forth the Board’s and the Board committees’ responsibilities, qualifications, and operational matters and describing key matters, such as the evaluation of the CEO and ordinary-course and emergency succession planning. The NGCRC reviews the Governance Guidelines on, at least, an annual basis and recommends changes to the Board based on current corporate governance best practices.
The Governance Guidelines can be found in the Corporate Governance section on the Company’s website at https://www.thecloroxcompany.com/who-we-are/corporategovernance/governance-guidelines/, and are available in print to any shareholder who requests them from The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.

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Corporate Governance

The Board’s Role and Oversight
Our Corporate Governance Process
We believe that a critical component of meaningful corporate governance is a robust annual process (as presented in the graphic below) that includes active and transparent shareholder engagement. In addition to our regularly scheduled governance cadence described below, our Board reviews, considers, and acts, as necessary, upon ESG matters throughout the year.

Shareholder Engagement

We maintain active, year-round engagement with our shareholders. During the past fiscal year, our directors and management met with investors to discuss key corporate governance, executive compensation, corporate responsibility, and ESG topics. In addition to highlighting our progress particularly with respect to diversity and environmental sustainability, these meetings allow for two-way dialogue between our shareholders and our Board and management, and for our management and Board to listen to our shareholders’ perspectives and understand any concerns they may have.
The Board considers shareholder feedback from these meetings, along with best practices, market standards, policies at other companies, and Clorox’s shareholder base and circumstances, and the feedback we have received from our shareholder engagement activities has informed the Board’s decisions and deliberations. For example, as a result of shareholder feedback, the Board has determined that elimination of the supermajority voting provision in our Company charter, as proposed in Proposal 4, is appropriate for the Company and our shareholders. Our Board also considered shareholder input in reviewing the Company’s compensation plan design and metrics, as described in greater detail in the Compensation Discussion and Analysis section of this proxy statement, and in other key areas.

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The Board’s Role in Risk Management and Culture Oversight
While the Company’s management is responsible for the day-to-day risk management process, the Board has ultimate responsibility for the oversight of the Company’s risk management and setting the right tone for integrity, ethics and culture. The Company has instituted a robust, comprehensive enterprise risk management program, which involves Board oversight, and an Enterprise Risk Management Steering Committee (ERM Committee), which consists of a cross-functional team of senior leaders and key executives. The ERM Committee oversees the annual key risk identification process, whereby it identifies the top risks that the Company faces with respect to its business, operations, strategy, and other factors, as well as key mitigation strategies and risk owners. The Company’s management reports and discusses identified risks and risk mitigation and management efforts with the Board, at minimum, on an annual basis and typically in connection with the Board’s annual strategy meeting.
The Board also oversees risk management through its committees by allocating certain matters to the Board committees based on expertise, and these committees report on risk exposure during its regular reports to the full Board to facilitate proper risk oversight by the entire Board.

●	The Audit Committee oversees the integrity of the financial statements, the Company’s accounting and financial controls, including the independent and internal auditors, risk management policies and compliance relating to accounting and financial reporting matters.	
●	The Management Development and Compensation Committee (MDCC) oversees management development and succession planning processes and approves compensation for executive officers and various benefit plans for the Company as a whole.	
●	The NGCRC oversees the Company’s corporate governance practices, director nominations, Board, Committee, director and peer evaluations, corporate responsibility, sustainability and political contribution matters, shareholder engagement, and compliance and ethics program.	
For example, the Audit Committee reviews compliance and risk management related to accounting and financial reporting matters and financial risk management and also receives quarterly cybersecurity updates, and the MDCC reviews the risks related to the executive compensation structure.
Furthermore, as part of its responsibilities, the MDCC periodically reviews the Company’s compensation policies and programs to ensure that compensation offers
performance incentives to employees and executives, while mitigating excessive risk-taking. The overall executive compensation program contains various provisions that mitigate against excessive risk-taking, including:

●	Balancing cash compensation under the Annual Incentive Plan and equity compensation;	
●	Capping the payouts under executive and non-executive incentive plans, which protect against executives taking short-term actions to maximize bonuses that are not supportive of long-term objectives;	
●	Utilizing weighted financial metrics under the Annual Incentive Plan that are intended to discourage revenue generation at the expense of profitability and profitable growth, and vice versa;	
●	Using different financial metrics under our Annual Incentive Plan and long-term performance shares;	
●	Including clawback provisions that allow the recapture of compensation paid to current and former executives, which serve as a deterrent to inappropriate risk-taking activities; and	
●	Implementing and enforcing stock ownership guidelines that require executive officers to accumulate meaningful levels of equity ownership in the Company, which align executives’ short- and long-term interests with those of the Company’s shareholders.	
Based on its review and the analysis provided by its independent compensation consultant, FW Cook, the MDCC has determined that the risks arising from the Company’s compensation policies and practices for its employees, including executive officers, are not reasonably likely to have a material adverse effect on the Company.
In overseeing culture, the Board also receives information through a number of channels, including updates from the Chief People Officer, such as data and metrics from our annual employee engagement survey and also relating to inclusion and diversity, as well as updates from the General Counsel on any significant compliance, discrimination and harassment complaints.
The Company also has formalized governance structure and reporting channel policies that require management to notify the Board of, among other things, any instances of significant threatened or actual litigation, significant governmental or regulatory inquiry or proceeding, and any events or occurrences that could materially impact the Company’s reputation, including any cyber-related issues that could involve the significant misappropriation of personal or sensitive/valuable company data, or that may have significant operational, financial, legal or reputational impacts.

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Corporate Governance
Board Meeting Attendance
The Board held seven meetings during fiscal year 2019. All incumbent directors attended at least 75% of the meetings of the Board and committees of which they were members during fiscal year 2019 during the period in which they served on the Board. All members of the Board are expected to attend the Annual Meeting of Shareholders. Each of the twelve members of the Board at the time of the Company’s 2018 Annual Meeting of Shareholders attended that meeting.
Director Independence
The Governance Guidelines provide that a substantial majority of the Board must consist of independent directors. The Board determines whether individual Board members are independent, as defined by the New York Stock Exchange (NYSE). The Board has adopted director independence standards, which are set forth in the Governance Guidelines, to assist it in assessing the independence of directors. The Board makes an affirmative determination regarding the independence of each director annually, based upon the recommendation of the NGCRC.
The Board has determined that each of our directors who served during the 2019 fiscal year (Messrs. Fleischer, Mackay, Matschullat, Shattock, Weiner, and Williams, Mmes. Banse, Lee, Thomas-Graham, and Ticknor, and Dr. Carmona) is independent under the NYSE listing standards and the independence standards set forth in the Governance Guidelines, except for Mr. Dorer as a result of his service as the Company’s CEO. The Board’s determination considered the impact of tenure on a director’s independence, particularly with respect to directors with 10 or more years of Board service, and the Board concluded that such longer-tenured directors, based on their communications and interactions with management, their decisions, and their adherence to their fiduciary duties to shareholders, have demonstrated their independence from management.
The independent directors generally meet in executive session at each regularly scheduled Board meeting without the presence of management directors or employees of the Company to discuss various matters related to the oversight of the Company, the management of the Board’s affairs, and the CEO’s performance. The lead independent director chairs the independent executive sessions.

Related Person Transaction and Conflict of Interest Policies and Procedures
The Company has a written policy regarding review and approval of related person transactions by the Audit Committee (Related Person Policy). The Related Person Policy defines an “Interested Transaction” as any transaction, arrangement, or relationship or series of similar transactions, arrangements, or relationships (including any indebtedness or guarantee of indebtedness) in which (i) the aggregate amount involved since the beginning of the Company’s last completed fiscal year will or may be expected to exceed $120,000 (including any periodic payments or installments due on or after the beginning of the Company’s last completed fiscal year and, in the case of indebtedness, the largest amount expected to be outstanding and the amount of annual interest thereon), (ii) the Company is a participant, and (iii) any Related Person (as defined below) has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10% beneficial owner of an equity interest in another entity).
A “Related Person” is (i) any person who is or was (since the beginning of the Company’s last fiscal year, even if they do not presently serve in that role) an executive officer, director, or nominee for election as a director, (ii) a beneficial owner of more than 5% of the Company’s Common Stock, or (iii) an immediate family member of any of the foregoing. For purposes of this definition, “immediate
family member” includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers-and fathers-in-law, sons- and daughters-in-law, brothers-and sisters-in-law, and anyone residing in such person’s home (other than a tenant or employee).
Under the Related Person Policy, if a new Interested Transaction is identified for approval, it is brought to the Audit Committee to determine if the proposed transaction is reasonable and fair to the Company. The Audit Committee will review the material facts of all Interested Transactions that require its approval and either approve or disapprove of the entry into the Interested Transaction.
The Related Person Policy also contains categories of preapproved transactions that the Board has identified as not having a significant potential for an actual or potential conflict of interest or improper benefit.
In determining whether to approve or ratify an Interested Transaction, the Audit Committee will take into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related Person’s interest in the transaction.

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No director participates in any discussion or approval of an Interested Transaction for which he or she (or an immediate family member) is a Related Person, except that the director will provide all material information concerning the Interested Transaction to the Audit Committee. There have been no transactions considered to be an Interested Transaction since the beginning of the Company’s 2019 fiscal year.
Additionally, the Company’s Code of Conduct has a detailed provision prohibiting its directors, officers, and employees from entering into transactions that are an actual or potential conflict of interest and is available on the Company’s website at https://www.thecloroxcompany.com/who-we-are/corporate-governance/codes-of-conduct.

Code of Conduct
The Company has adopted a Code of Conduct, which can be found in the Corporate Governance section of the Company’s website, https://www.thecloroxcompany.com/who-we-are/corporate-governance/codes-of-conduct, or obtained in print by contacting The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.
The Code of Conduct applies to all of the Company’s employees, including executives, as well as directors. We require that all Board members and employees complete
training and certify compliance with the Code of Conduct annually. We also perform an annual audit of internal compliance with our Code of Conduct.
We also have established a separate Business Partner Code of Conduct outlining our standards and expectations of our suppliers and other business partners, which can also be found at https://www.thecloroxcompany.com/who-we-are/corporate-governance/codes-of-conduct.

Board Leadership Structure and Diversity
The Board believes it is in the best interests of the Company and its shareholders for the Board to have flexibility in determining the Board leadership structure of the Company based on the Company’s current circumstances and anticipated needs. Over the years, the Board has had a variety of leadership structures and has determined that a combined chair and CEO role with a strong lead independent director is in the best interest of the Company and its shareholders at this time.
As part of our ongoing, proactive efforts to implement effective and progressive corporate governance practices, the NGCRC regularly reviews the leadership structure of the Board in addition to its annual review of the Company’s Governance Guidelines, taking into account the Company and its needs, market practices, investor feedback, and corporate governance studies and expert commentary, among other things. Since August 2016, the Board leadership structure has consisted of a combined Chair and CEO role held by Mr. Dorer, a strong lead independent director position held by Ms. Thomas-Graham, and strong independent committee chairs. The Board is committed to continuously evaluating this structure to ensure that it promotes effective governance.
The Board believes that Mr. Dorer’s leadership in developing the Company’s 2020 Strategy and its new strategy, his in-depth knowledge of the Company’s operations, and his strong working relationship with the independent members of the Board make him best-suited to chair the regular Board meetings as key business and strategic issues are discussed and to serve as Chair of the Board at this time. This role allows him to drive execution of the Company’s strategic plans and facilitate effective communication between management and the Board, to bring key issues to the Board’s attention, and to see that the Board’s guidance and decisions are implemented effectively by management.
Further, the Board believes that Ms. Thomas-Graham’s strong leadership and qualifications, including her prior experience as a CEO and her tenure on the Board, among other factors, contribute to her ability to fulfill the role of lead independent director effectively.
The Company’s Governance Guidelines require an independent director to serve as a lead director if the position of Chair is held by a management director. In order to ensure that the lead independent director has the skills and qualifications necessary to serve as a strong leader,

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Corporate Governance
the Company has created clearly delimited comprehensive duties and responsibilities for the lead independent director, as outlined below.
The lead independent director is elected annually by and from the independent directors. In order to qualify as lead independent director, a director must have served as a member of the Board for at least three years. The duties of the lead independent director include coordinating the activities of the independent directors and serving as a liaison between the Chair and the independent directors. In addition, the lead independent director:

●	has the ability to call special meetings of the Board;	
●	presides at executive sessions of the independent directors and has the authority to call additional executive sessions or meetings of the independent directors;	
●	presides at Board meetings in the Chair’s absence;	
●	approves information sent to the Board;	
●	reviews and provides feedback on meeting agendas and approves meeting schedules for the Board to ensure that appropriate topics are being addressed and there is sufficient time allocated for discussion of agenda items;	
●	is available for consultation and direct communication with major shareholders, if requested;	
●	meets with Company employees and employee resource groups (ERGs) with and without management present to foster mentorship and dialogue with diverse employees;	
●	evaluates the performance of the CEO, along with the members of the MDCC and the other independent directors and helps oversee CEO succession planning; and	
●	assists the Board and Company officers in promoting compliance with and implementation of the Governance Guidelines.	
In addition to the duties listed above, Ms. Thomas-Graham has taken an active role in the Company’s diversity efforts and outreach to employees, including hosting small group meetings with high-potential, diverse employees and holding employee town hall meetings. She also actively participates in shareholder engagement and meets with many of the Company’s major shareholders.
Lastly, the Board is guided by strong, independent committee chairs, with Dr. Carmona leading the NGCRC, Mr. Fleischer leading the MDCC, and Ms. Ticknor serving as the Audit Committee chair for several years. Since Ms. Ticknor is not standing for re-election at this Annual Meeting, Mr. Williams has agreed to serve as the new Audit Committee chair, pending his re-election to the Board.
While our Board is diverse by many traditional metrics, our Board leadership positions also reflect this diversity, as Ms. Thomas-Graham, Dr. Carmona, and Mr. Williams are each ethnically diverse.
Other than Mr. Dorer, all of the Company’s directors are “independent” as defined by the NYSE rules. The Board believes that this structure promotes effective governance and that the leadership structure described above is in the best interests of the Company and its shareholders, in light of current circumstances.

Board Committees
The Board has established three standing committees: the Audit Committee, the NGCRC, and the MDCC. Each of these committees consists only of non-management directors whom the Board has determined are independent under the NYSE listing standards and the Board’s independence standards set forth in the Company’s Governance Guidelines. Directors who serve on the Audit Committee and the MDCC must meet additional, heightened independence
and qualification criteria applicable to directors serving on these committees under the NYSE listing standards. The charters for these committees are available in the Corporate Governance section of the Company’s website at https://www.thecloroxcompany.com/who-we-are/corporategovernance/committee-charters, or in print by contacting The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.

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The table below indicates the current members of each standing Board committee as of the date of the Annual Meeting:

Director	     	Audit	     	Nominating,
Governance and
Corporate Responsibility	     	Management
Development and
Compensation	
Amy Banse		●		 		 	
Richard H. Carmona				Chair		●	
Benno Dorer		 		 			
Spencer C. Fleischer						Chair	
Esther Lee				●			
A.D. David Mackay		●				●	
Robert W. Matschullat				●		 	
Matthew J. Shattock		●					
Pamela Thomas-Graham				●		 	
Russell J. Weiner		●				●	
Christopher J. Williams1		Chair					
Number of meetings in fiscal year 2019		9		5		4	

1	Effective as of this Annual Meeting, Carolyn Ticknor will no longer serving as Audit Committee chair, since she is not standing for re-election at this Annual Meeting. Chris Williams has been nominated to serve as Audit Committee chair, subject to his re-election to the Board.	
Audit Committee. The Audit Committee is the principal link between the Board and the Company’s independent registered public accounting firm. The Audit Committee has the functions and duties set forth in its charter, including:

●	representing and assisting the Board in overseeing:	
●	the integrity of the Company’s financial statements;	
●	the independent registered public accounting firm’s qualifications, independence, and performance;	
●	the performance of the Company’s internal audit function;	
●	the Company’s system of disclosure controls and procedures and system of internal control over financial reporting;	
●	the Company’s compliance with legal and regulatory requirements relating to accounting and financial reporting matters;	
●	the Company’s framework and guidelines with respect to risk assessment and risk management; and	
●	the Company’s material financial policies and actions.	
●	preparing the report required by the SEC proxy rules to be included in the Company’s annual proxy statement.	
The Board has determined that, with respect to fiscal year 2019, directors Ms. Ticknor and Mr. Williams are audit committee financial experts, as defined by SEC rules, and each member of the Audit Committee is financially literate, as defined by NYSE rules.
Nominating, Governance and Corporate Responsibility Committee. The NGCRC has the functions and duties set forth in its charter, including:

●	identifying and recruiting individuals qualified to become Board members and recruiting them for membership on the Board;	
●	recommending to the Board individuals to be selected as director nominees for the annual meeting of shareholders and any individuals to be elected by the Board between annual meetings;	
●	reviewing and recommending to the Board changes in the Governance Guidelines and the Code of Conduct;	
●	overseeing the Company’s ethics and compliance program, including the Company’s compliance with legal and regulatory requirements relating to matters other than accounting and financial reporting matters;	
●	performing a leadership role in shaping the Company’s corporate governance and overseeing the evaluation of the Board and its committees;	
●	assisting the Board in overseeing the Company’s corporate responsibility and sustainability program; and	
●	assisting the Board in overseeing the Company’s engagement efforts with shareholders and other key stakeholders.	

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Corporate Governance
Management Development and Compensation Committee. The MDCC has the functions and duties set forth in its charter, including:

●	assisting the Board in discharging its responsibilities relating to compensation of the CEO and other executive officers;	
●	reviewing and approving the Company’s compensation policies, plans and goals and objectives for the executive officers and directors;	
●	overseeing the Company’s management development succession planning processes; and	
●	evaluating, making recommendations and taking appropriate action in response to the shareholders’ advisory “say on pay” vote.	

Annual Board and Director Evaluation Process
The NGCRC is responsible for overseeing the Board, committee, and individual director evaluation process. Under the Governance Guidelines, the Board and each Board committee are required to conduct an annual self-evaluation. The evaluations include a range of issues designed to assess Board and committee performance, including Board and committee composition, structure, information received, accountability, and effectiveness, among other topics.
Evaluations are conducted through individual director interviews as part of its evaluation process. Each director provides an individual assessment as well as any feedback they may have on other Board members’ performance on an annual basis. The individual assessments are conducted by the chair of the NGCRC, who summarizes and reports the results and any related recommendations to the NGCRC and the full Board.
As a result of the evaluation process, the Board has made a number of changes, including, for example, adding regular cybersecurity updates to Audit Committee meeting agendas, adding new topics or devoting more time to particular topics and businesses of interest, incorporating external speakers on certain topics, meeting with high potential employees below the executive level to develop relationships and become familiar with the potential internal management succession pipeline, revising the format and focus of Board materials, adding periodic updates that continue focusing on digital engagement and corporate development topics, and identifying the skills and expertise desired for future director candidates.

Director Compensation
Only our non-employee directors receive compensation for their services as directors. The Company’s non-employee director compensation program is comprised of cash compensation and an annual grant of deferred stock units.

The MDCC has the responsibility for making recommendations regarding non-employee director compensation. The MDCC reviews the form and amount of compensation of non-employee directors at least once a year to ensure that the Company’s non-employee directors are being compensated appropriately relative to peer companies. The MDCC retains the services of an independent compensation consulting firm to assist it in
the performance of its duties. During fiscal year 2019, the MDCC used the services of Frederic W. Cook & Co., Inc. (FW Cook). FW Cook’s work with the MDCC included data analysis and guidance and recommendations regarding compensation levels relative to our compensation peer group (see discussion regarding the peer group in the Compensation Discussion and Analysis section below) as well as trends and recent developments in the area of non-employee director compensation. Clorox generally aims to compensate non-employee directors at or near the median of the compensation peer group.

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The following table sets forth information regarding compensation for each of the Company’s non-employee directors during fiscal year 2019.

Name	     	Fees Earned
or Paid in Cash
($)(2)	     	Stock
Awards
($)(3)	     	Total
($)	
Amy Banse		100,000		152,500		252,500	
Richard H. Carmona		115,000		152,500		267,500	
Spencer C. Fleischer		112,609		152,500		265,109	
Esther Lee		100,000		152,500		252,500	
A. D. David Mackay		100,000		152,500		252,500	
Robert W. Matschullat		100,000		152,500		252,500	
Jeffrey Noddle(1)		44,348		38,125		82,473	
Matthew J. Shattock		91,304		114,375		205,679	
Pamela Thomas-Graham		150,000		152,500		302,500	
Carolyn M. Ticknor		120,000		152,500		272,500	
Russell J. Weiner		100,000		152,500		252,500	
Christopher J. Williams		100,000		152,500		252,500	

(1)	Mr. Noddle retired from the Board effective November 14, 2018.	
(2)	The amounts reported in the Fees Earned or Paid in Cash column reflect the total annual cash retainer and other cash compensation earned by each director in fiscal year 2019 and include amounts deferred into cash or deferred stock units and/or amounts issued in Common Stock in lieu of cash, as elected by the director. The annual cash retainer is paid to each director in quarterly installments.	
(3)	The amounts reported reflect the grant-date fair value for financial statement reporting purposes of the annual grant of deferred stock units. Deferred stock units are shares of the Company’s Common Stock that the director receives only upon terminating their service with the Company. Awards are granted on an annual basis at the end of each calendar year. Refer to Note 14 of the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019, for a discussion of the relevant assumptions used in calculating the grant-date fair value under applicable accounting guidance. As of June 30, 2019, the following directors had the indicated aggregate number of deferred stock units accumulated in their deferred accounts for all years of service as a director, which includes deferrals of cash compensation used to acquire deferred stock units, annual awards of deferred stock units made by the Company, and additional deferred stock units credited as a result of dividend equivalents earned with respect to the deferred stock units: Ms. Banse – 2,346 units; Dr. Carmona – 20,317 units; Mr. Fleischer – 6,971 units; Ms. Lee – 6,116 units; Mr. Mackay – 2,346 units; Mr. Matschullat – 86,245 units; Mr. Shattock – 838 units; Ms. Thomas-Graham 24,662–units; Ms. Ticknor – 31,799 units; Mr. Weiner – 3,484 units; and Mr. Williams – 6,889 units.	
Cash Compensation
Directors receive cash compensation, which consists of annual cash retainer amounts and any special assignment fees. The following table lists the various retainers paid for Board service and service as the lead independent director or a committee chair during fiscal year 2019:

Annual director retainer	$	100,000	
Lead independent director retainer		50,000	
Committee chair retainers:			
Nominating, Governance and Corporate Responsibility Committee		15,000	
Audit Committee		20,000	
Management Development and Compensation Committee		20,000	
Directors who serve as a Board member, lead independent director, or committee chair for less than the full fiscal year receive pro-rated retainer amounts based on the number of days they served in such position during the fiscal year. In addition to the retainer amounts, each non-employee director is entitled to receive a fee of $2,500 per day for any special assignment requested by the Board. No special assignment fees were paid in fiscal year 2019.
Payment Elections
Under the Company’s Independent Directors’ Deferred Compensation Plan, a director may annually elect to receive all or a portion of their cash compensation in the form of cash, Common Stock, deferred cash, or deferred stock units.

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Corporate Governance
Payment in Stock. Directors who elect to receive cash compensation amounts in the form of Common Stock are issued shares of Common Stock based on the fair market value of the Common Stock as determined by the closing price of the Common Stock on the last trading day of the quarter for which the fees were earned.
Elective Deferral Program: Deferred Cash. For directors who elect deferred cash, the amount deferred is credited to an unfunded cash account that is credited with interest at an annual interest rate equal to Wells Fargo Bank, N.A.’s prime lending rate in effect on January 1 of each year. Upon termination of service as a director, the amounts credited to the director’s deferred cash account are paid out in five annual cash installments or in one lump-sum cash payment, as elected by the director.
Elective Deferral Program: Deferred Stock Units. For directors who elect deferred stock units, the amount deferred is credited to an unfunded account in the form of units equivalent to the fair market value of the Common Stock on the last trading day of the quarter for which the fees were earned. When dividends are declared, additional deferred stock units are allocated to the director’s deferred stock unit account in amounts equivalent to the dollar amount of Common Stock dividends paid by the Company divided by the fair market value of the Common Stock on the date the dividends are paid. Upon termination of service as a director, the amounts credited to the deferred stock unit account, which include any elective deferrals and the annual deferred stock unit grants described above, are paid out in shares of Common Stock in five annual installments or in one lump sum, as elected by the director. Deferred stock units may only be settled in shares of Common Stock.
Equity Compensation
Each non-employee director receives a majority of their annual compensation in the form of deferred stock units. Deferred stock units are shares of the Company’s Common Stock that the director receives only upon terminating their service with the Company. Each non-employee director receives an annual grant of deferred stock units. The value of the deferred stock unit award amount earned by a non-employee director serving for the full fiscal year 2019 was $152,500. Awards are made as of the last business day in the calendar year and represent payment for services provided during such calendar year. The dollar value of an annual grant of deferred stock units was not increased for calendar year 2019.
The Company believes that the use of deferred stock units provides a stronger alignment between directors and the Company’s shareholders compared to outright stock ownership since directors have no ability to sell the deferred stock units while they remain on the Board. The Company has maintained the deferred stock unit program for its directors for over 20 years.
Directors who serve as non-employee Board members for less than the full calendar year receive pro-rated awards based on the number of full fiscal quarters they served as a non-employee Board member during the calendar year. Deferred stock units accrue dividend equivalents and the balance of a director’s deferred stock unit account is paid out in Common Stock only following the director’s termination of service, as described in greater detail under Payment Elections above.
Fiscal Year 2020 Compensation Changes
As discussed above, the MDCC reviews the form and amount of compensation of non-employee directors at least once a year to ensure that the Company’s non-employee directors are being compensated appropriately relative to peer companies. The MDCC again reviewed non-employee director compensation in September 2019. As part of its review, the MDCC considered the data provided by FW Cook as well as its guidance and recommendations regarding compensation levels relative to our compensation peer group as well as trends and recent developments in the area of non-employee director compensation. After taking all of this information into account, the MDCC has recommended, and the Board agreed, to increase the annual director cash retainer to $103,000 from $100,000, the annual compensation in the form of deferred stock units to $157,000 from $152,500, and the annual Audit Committee chair retainer to $25,000 from $20,000, effective as of October 2019. No other changes were made to the Company’s director compensation program.
Stock Ownership Philosophy and Guidelines for Directors
The Board believes that the alignment of directors’ interests with those of shareholders is strengthened when Board members are also shareholders. The Board therefore requires that each non-employee director, within five years of first being elected, own Common Stock or deferred stock units that are settled only in Common Stock having a market value of at least five times their annual cash retainer. This program is designed to ensure that directors acquire a meaningful and significant ownership interest in the Company during their tenure on the Board. Furthermore, as directors must hold the deferred stock units until termination of their service on the Board, they have aligned interests and appropriate incentives to promote long-term value for shareholders during their service as a director. As of August 30, 2019, each non-employee director was in compliance with the guidelines, and in fact, the majority of our directors held Common Stock or deferred stock units with value far in excess of this amount.

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 	Stock Ownership Information	
Beneficial Ownership of Voting Securities
The following table shows, as of August 30, 2019 (except as otherwise indicated below), the holdings of Common Stock by (i) any entity or person known to the Company to be the beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii) each director and nominee for director and each of the five individuals named in the Summary Compensation Table (the named executive officers), and (iii) all directors and executive
officers of the Company as a group. As discussed in the Director Compensation section of this proxy statement, the majority of director compensation is delivered in the form of deferred stock units, which are paid out in Common Stock following a director’s termination of service. Because the directors cannot dispose of those shares while they serve on the Board, they are not reflected in this table. See footnote 2 below.

Name of Beneficial Owner	     	Amount and Nature
 of Beneficial Ownership(1)(2)	
     	Percent of Class(3)	
The Vanguard Group, Inc.(4)					
     100 Vanguard Blvd.					
     Malvern, PA 19355		15,378,583		12.26	
BlackRock, Inc.(5)					
     55 East 52nd Street					
     New York, NY 10055		10,555,837		8.41	
State Street Corporation(6)					
     One Lincoln Street					
     Boston, MA 02111		7,855,221		6.26	
Amy Banse(2)		0		*	
Richard H. Carmona(2)		0		*	
Benno Dorer		727,586		*	
Spencer C. Fleischer(2)		0		*	
Kevin Jacobsen		59,412		*	
Esther Lee(2)		0		*	
A. D. David Mackay(2)		1,600		*	
Robert W. Matschullat(2)		1,324		*	
Linda Rendle		57,672		*	
Eric Reynolds		50,207		*	
Matthew J. Shattock(8)		0		*	
Laura Stein		186,801		*	
Pamela Thomas-Graham(2)		1,778		*	
Carolyn M. Ticknor(2)		0		*	
Russell J. Weiner(2)		0		*	
Christopher J. Williams(2)		0		*	
All directors and executive officers as a group (25 persons)(7)		1,442,274		1.14	

*	Does not exceed 1% of the outstanding shares.	
(1)	Unless otherwise indicated, each beneficial owner listed has sole voting and dispositive power concerning the shares indicated. These totals include the following numbers of shares of Common Stock that such persons have the right to acquire through stock options exercisable within 60 days of August 30, 2019, or with respect to which such persons have shared voting or dispositive power: Mr. Dorer – 685,167 options; Mr. Jacobsen – 53,800 options and shared voting and dispositive power with respect to 3,145 shares held in family trust; Ms. Rendle – 50,757 options; Mr. Reynolds – 38,362 options; Ms. Stein – 157,100 options; and all directors and executive officers as a group – 1,282,216 options. The numbers in the table above do not include the following numbers of shares of Common Stock that the executive officers have the right to acquire upon the termination of their service as employees pursuant to vested performance units that were deferred at the executive officers’ election: Mr. Dorer – 43,327; Mr. Jacobsen – 3,420; Ms. Rendle – 1,746; Mr. Reynolds – 6,993; Ms. Stein – 34,194; and all executive officers as a group –108,229.	
(2)	The numbers in the table above do not include the following numbers of shares of Common Stock that the non-management directors have the right to acquire upon the termination of their service as directors pursuant to deferred stock units granted under the Independent Directors’ Stock-Based Compensation Plan: Ms. Banse – 2,346 shares of Common Stock; Dr. Carmona – 20,317 shares of Common Stock; Mr. Fleischer – 6,971 shares of Common Stock; Ms. Lee – 6,116 shares of Common Stock; Mr. Mackay – 2,346 shares of Common Stock; Mr. Matschullat – 86,245 shares of Common Stock; Mr. Shattock – 838 shares of Common Stock; Ms. Thomas-Graham – 24,662 shares of Common Stock; Ms. Ticknor – 31,799 shares of Common Stock; Mr. Weiner – 3,484 shares of Common Stock; and Mr. Williams – 6,889	

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Stock Ownership Information

	shares of Common Stock. Deferred stock units are shares of the Company’s Common Stock that the director receives only upon terminating their service with the Company. Please refer to the Director Compensation section in this proxy statement for further details on the deferred stock units held by non-management directors. The total financial commitment of each non-management director in the Company’s Common Stock is more fully appreciated if the number of shares of Common Stock listed above in the column entitled “Amount and Nature of Beneficial Ownership” is added to the number of deferred stock units set forth in this footnote.	
(3)	On August 30, 2019, there were 125,467,200 shares of Common Stock outstanding.	
(4)	Based on information contained in a report on Schedule 13G/A filed with the SEC on February 11, 2019, The Vanguard Group reported, as of December 31, 2018, sole voting power with respect to 155,570 shares, sole dispositive power with respect to 15,178,541 shares, shared voting power with respect to 44,679 shares and shared dispositive power with respect to 200,042 shares.	
(5)	Based on information contained in a report on Schedule 13G/A filed with the SEC on February 4, 2019, BlackRock, Inc. reported, as of December 31, 2018, sole voting power with respect to 9,254,591 shares and sole dispositive power with respect to all shares reported.	
(6)	Based on information contained in a report on Schedule 13G filed with the SEC on February 14, 2019, State Street Corporation reported, as of December 31, 2018, shared voting power with respect to 6,376,264 shares and shared dispositive power with respect to 7,853,345 shares.	
(7)	Pursuant to Rule 3b-7 of the Securities Exchange Act of 1934, as amended (Exchange Act), executive officers include the Company’s CEO and all executive vice presidents and senior vice presidents.	

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 	Executive Compensation	

 	Proposal 2:
Advisory Vote to Approve Executive Compensation	

We are seeking a non-binding, advisory vote from our shareholders to approve the compensation of our named executive officers that are listed in the Compensation Discussion and Analysis section of this proxy statement. This proposal gives our shareholders the opportunity to express their views on the Company’s executive compensation, and is commonly referred to as a “say-on-pay” proposal. This vote is only advisory and will not be binding upon the Company or the Board. However, the MDCC, which is responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by shareholders and encourages all shareholders to vote their shares on this matter.

As discussed in the Compensation Discussion and Analysis section of this proxy statement, which begins on page 30, the Company’s compensation programs are designed to align pay with short- and long-term financial and strategic objectives to build shareholder value, while providing
a competitive level of compensation to recruit, retain, and motivate talented executives. The Board urges you to consider the factors discussed in the Compensation Discussion and Analysis section when deciding how to vote on this Proposal 2.

At our 2018 Annual Meeting of Shareholders, our shareholders overwhelmingly approved our executive compensation policies, with approximately 93% of votes cast in favor of our proposal. We value this positive endorsement by our shareholders and believe that the outcome signals our shareholders’ support of our compensation program and continued our general approach to compensation for fiscal year 2019. We provide our shareholders the opportunity to vote on the compensation of our named executive officers every year. It is expected that the next vote on executive compensation will be at the 2020 Annual Meeting of Shareholders.

Board’s Recommendation
The Board recommends a vote FOR the advisory vote to approve executive compensation. The Company is asking its shareholders to support the compensation of the named executive officers as described in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers in fiscal year 2019 and the philosophy, policies, and practices underlying that compensation, which are described in this proxy statement. The Board believes that the Company’s overall compensation process effectively implements its compensation philosophy and achieves its goals.
Accordingly, the Board recommends a vote FOR the adoption of the following advisory resolution, which will be presented at the Annual Meeting:

“RESOLVED, that the shareholders of The Clorox Company approve, on an advisory basis, the compensation of the named executive officers, as disclosed in The Clorox Company’s Proxy Statement for the 2019 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the other related tables and disclosure.”

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Executive Compensation

Vote Required
The affirmative vote of a majority of the votes present in person or represented by proxy and entitled to vote at the Annual Meeting is required to approve this proposal.

This vote is advisory, and therefore not binding on the Company, the Board, or the MDCC. However, the Board and the MDCC value the opinions of the Company’s shareholders and, to the extent there is any significant vote against the named executive officers’ compensation
as disclosed in the proxy statement, we will consider such shareholders’ concerns, and the MDCC will evaluate whether any actions are necessary to address those concerns.

The people designated in the proxy and voting instruction card will vote your shares FOR approval unless you include instructions to the contrary.

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 	Compensation Discussion and Analysis	
Executive Summary
This Compensation Discussion and Analysis (CD&A) describes our executive compensation philosophy and program, the compensation decisions made under this program and the specific factors we considered in making those decisions. This CD&A focuses on the compensation of our “named executive officers” for fiscal year 2019, who were:

●	Benno Dorer – Chair and Chief Executive Officer (CEO);	
●	Kevin B. Jacobsen – Executive Vice President, Chief Financial Officer (CFO);	
●	Laura Stein – Executive Vice President, General Counsel and Corporate Affairs;	
●	Linda Rendle – Executive Vice President, Strategy and Operations; and	
●	Eric Reynolds – Executive Vice President, Cleaning and Burt’s Bees.	
Components of Our Executive Compensation Program
The table below outlines the components of our executive compensation program, their characteristics and summary description of these components.

Component	     	Characteristics	     	Description	
Base Salary		Fixed component.		Based on role and level of responsibilities, as well as individual performance.	
Annual Incentives(1)		Performance-based cash bonus opportunity.		Based on Company’s annual net sales (50%), net earnings from continuing operations (30%) and gross margin (20%) and individual objectives with payouts for the Company performance ranging from 0 to 200% of target and the individual factor modifying the Company score.	
Long-Term Incentives(1)		Performance share grants and stock option awards.		Initial grant is based on individual performance and potential. Value at vesting is based on actual company financial and stock price performance.	
Other programs provided include Retirement Plans, Post-Termination Compensation and Perquisites	

(1)	Payouts under the annual and long-term incentive plans are determined based on the achievement of objectives established by the MDCC at the beginning of the performance period. The performance period is one year for the cash awarded under the Annual Incentive Plan and three years for the performance shares awarded under the long-term incentive plan, both of which are further described in What We Pay: Components of Our Compensation Program. Specific financial goals cannot be changed during the performance period, except in accordance with principles set by the MDCC at the time the goals were established, which, in the case of our performance share awards, provide for adjustments in limited circumstances, including acquisitions, restructuring charges, or significant changes to generally accepted accounting principles, and only if the adjustments exceed a specified minimum financial impact to the Company.	
Fiscal Year 2019 Performance Highlights
In fiscal year 2019, Clorox delivered mixed results with fiscal year net sales growth of 1% in a macroeconomic environment that included high levels of competition in select categories, increasingly competitive retail dynamics, significantly rising logistics and commodity costs and global inflationary pressures. The Company also grew diluted net earnings per share (EPS) from continuing operations by 1%. In addition, the Company maintained its focus on operational efficiencies including maintaining discipline on selling and administrative expenses, delivering cost savings, and continuing to make progress toward its product sustainability improvement and green-house gas emissions, water energy, and waste reduction goals.
The Company’s 2020 Strategy, which we introduced in 2013, aims to accelerate profitable growth by engaging employees as business owners, increasing brand investment behind superior products and technology that reach consumers in a dynamic marketplace, expanding its brands into new categories and channels, and driving out waste in its work, processes, and products. Successes for the Company in fiscal year 2019 included:

●	Achieving $122 million in cost savings, the Company’s 12th consecutive year of cost savings in excess of $100 million;	
●	Achieving increased net sales growth of 1%, reflecting gains in Lifestyle and Cleaning reportable segments with partial offsets by lower sales in the Household and International reportable segments;	

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●	Increasing diluted EPS from continuing operations by 1% to $6.32 from $6.26 in the prior year;	
●	Leveraging incremental demand-building investments, including product innovation, to support category growth and market share;	
●	Launching new products in numerous categories and countries, including the Brita® Premium Filtering Water Bottle, Burt’sBees® lip oils, Burt’s Bees® liquid lipsticks, Clorox® Ultra Clean disinfecting wipes, Clorox Scentiva™ disinfecting mopping cloths, Clorox Healthcare® VersaSure™ cleaner disinfectant wipes, Clorox® disinfecting bio stain & odor remover; Clorox® Ropa Quitamanchas Blanco Supremo; Fresh Step® Clean Paws® cat litter in new unscented and Mediterranean Lavender scent; Glad® 4-gallon bags in Beachside Breeze and Sweet Citron and Lime scents; Hidden Valley® Ranch ready-to-eat dips; Kingsford® 100% natural hardwood briquets; NeoCell® collagen protein peptides: unflavored, pomegranate açai and mandarin orange flavors; NeoCell® Gummy Glow; and Rainbow Light® prenatal Precious Gems™ gummies;	
●	Continuing to receive external recognition for our leadership in corporate responsibility, inclusion and diversity, and sustainability efforts; and	
●	Returning excess capital to stockholders through $660 million of stock repurchases and paying $490 million in cash dividends to stockholders, including a 10% increase in the quarterly dividend announced in May 2019.	
How Pay Was Tied to the Company’s Performance in Fiscal Year 2019
Our fiscal year 2019 results and compensation decisions continue to illustrate application of our pay-for-performance philosophy, with pay being driven by performance in the following ways:

●	Fiscal Year 2019 Annual Incentive Payout. The annual incentive payout for each of our named executive officers was below target. Although the Company grew net sales and gross margins versus the prior fiscal year, net earnings fell versus the prior fiscal year, and net sales and net earnings fell short of the targets established at the beginning of the 2019 fiscal year. The Company’s gross margin met the target for the fiscal year.	
●	Fiscal Year 2019 Long-Term Incentive Payout. Our three-year performance share results were above the financial target for cumulative economic profit (EP) and yielded a 104% payout. These awards were granted in September 2016, and payment was determined in August 2019, based on performance over the period commencing July 1, 2016, and ending June 30, 2019. Fiscal year 2017 had especially strong results.	

 	
What We Pay: Components of Our Compensation Program

●	Compensation Mix. A substantial portion of our targeted direct compensation for our executives is at-risk variable compensation, with 86% of compensation for our CEO and 72% of compensation for all of our other named executive officers being at-risk. Base salary is the only fixed direct compensation component, as outlined in the following charts, which reflect target compensation for fiscal year 2019.	

Compensation Mix - CEO(1)	Compensation Mix - Average of All Other NEOs(1)	

(1)	Compensation mix represents the actual base salary, target annual incentive award, and actual long-term incentives granted in fiscal year 2019. Refer to the Summary Compensation Table below for further details on actual compensation.	

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Additional elements of our executive compensation program include retirement plans, post-termination compensation, and perquisites as appropriate to support our executive compensation philosophy. Further detail about each element is provided in the discussion below:
Base Salary. The MDCC generally seeks to establish base salaries for our named executive officers within 15% of the median of the compensation peer group. The MDCC considered factors such as the executive’s specific role, level of experience, and sustained performance, as well as the compensation peer group data, in determining each named executive officer’s base salary for fiscal year 2019. Changes in base salary are approved by the MDCC in September and become effective in October of each year. All base salaries that went into effect in October 2018 for the named executive officers, who were executive officers at the time, were within this target pay range.
After conducting a review for Mr. Dorer and evaluating his performance and overall Company performance for fiscal year 2018 in light of his competitive pay positioning, the MDCC approved a base salary increase of 11.6% to $1,200,000 effective October 2018. The annual base salary increases for our named executive officers represented a combination of merit increases and market adjustments in light of competitive pay positioning, and other than for our CEO, ranged from 3.4% to 10% with an average increase of 5.8%. The actual base salaries earned by our named executive officers in fiscal year 2019 are listed in the Salary column of the Summary Compensation Table.
Annual Incentives. The Company provides annual incentive awards to our named executive officers under the Company’s Executive Incentive Compensation Plan (Annual Incentive Plan). Payouts under the Annual Incentive Plan are based on the level of achievement of
Company performance goals set annually by the MDCC, not to exceed the stockholder-approved maximums. These performance goals are tied to Board-approved corporate financial performance goals and individual objectives, which are described below.
Annual Incentive Design. The amounts actually paid under the Annual Incentive Plan are based on the following factors:

(1)	A target award for each named executive officer, which is the base salary multiplied by the annual incentive target (Target Award).	
(2)	The Company’s performance measured against pre-established corporate financial goals (Financial Performance Multiplier). The Financial Performance Multiplier can range from 0% to 200% based on an objective assessment of Company performance versus goals established by the MDCC at the beginning of the year.	
(3)	The named executive officer’s individual performance (Individual Performance Multiplier) is based primarily on the performance of the operations or functions under the individual’s responsibility and can range from 0% to 150%. The Individual Performance Multiplier is also determined by the MDCC and typically has a much narrower range, which makes its impact on the total payout significantly smaller than the Financial Performance Multiplier. Historically, the MDCC approved individual multipliers for the CEO at no more than 110% over the previous 5 years. For fiscal year 2019, the MDCC approved multiplier for the CEO was 100%.	

The final individual Annual Incentive Plan payout is determined by the following formula:

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Over the past three years, the range for the Individual Performance Multipliers for the named executive officers was 90% to 115%. By comparison, the range for the Financial Performance Multiplier during this same time period was 67% to 96%.
Each of the elements of the annual incentive formula is further described below.
Base Salary. The named executive officer’s actual fiscal year 2019 base salary is the starting point for the annual incentive calculation.
Annual Incentive Target. Each year, the MDCC sets an annual incentive target level for each named executive officer as a percentage of their base salary, based on an assessment of median bonus targets in the compensation peer group and other factors such as individual experience, as noted above. The annual incentive target level is generally set near the median of bonus targets for comparable positions in the compensation peer group. The table below sets forth the targets for the fiscal year 2019 annual incentive awards.

Named Executive Officer		Annual Incentive
Target (% of
Base Salary)	
Benno Dorer – Chair and Chief Executive Officer		150%	
Kevin B. Jacobsen – Executive Vice President, Chief Financial Officer(1)		85%	
Laura Stein – Executive Vice President, General Counsel and Corporate Affairs		70%	
Linda Rendle – Executive Vice President, Strategy and Operations(2)		80%	
Eric Reynolds – Executive Vice President, Cleaning and Burt’s Bees(3)		75%	

(1)	Mr. Jacobsen’s target was increased from 80% to 85% at the beginning of fiscal year 2019.	
(2)	Ms. Rendle’s target was increased from 75% to 80% with her promotion in January 2019.	
(3)	Mr. Reynolds’ target was increased from 65% to 75% with his promotion in January 2019.	

Financial Performance Multiplier. At the beginning of each fiscal year, the MDCC sets financial goals for the Annual Incentive Plan based on targets approved by the Board which consider guidance provided to investors. At the end of the year, the MDCC reviews the Company’s results against the goals set at the beginning of the year.
For fiscal year 2019, the MDCC established financial goals with a focus on increasing net sales, net earnings from continuing operations, and gross margin, as described in greater detail below, in order to drive sustainable, profitable growth and short- and long-term total stockholder returns. The Financial Performance Multiplier is based on the following metrics.

●	Net Sales weighted at 50%,	
●	Net Earnings from Continued Operations weighted at 30% and	
●	Gross Margin weighted at 20%.	
The MDCC believes this mix effectively balances a focus on both top-line and bottom-line performance. In selecting the metrics and setting the financial goals of the Annual Incentive Plan, the MDCC carefully considered whether the goals appropriately align with the goals of the long-term incentive program so that the overall compensation design does not encourage participants to take unnecessary or excessive risk or actions that are inconsistent with the Company’s short- and long-term strategic and financial objectives.
For fiscal year 2019, the financial goals for the Annual Incentive Plan, the potential range of payouts for achieving those goals, and the actual results as determined by the MDCC were as follows:

		Annual Incentive
Financial Goals (in millions)	
Goal	     	0%
(Minimum)	     	100%   
(Target)(1)	     	200%
(Maximum)	     	Actual(2)	
Net Sales (weighted 50%)		     $	6,117			   $	6,306			      $	6,495			   $	6,202		
Net Earnings from Continued Operations (weighted 30%)		$	755			$	803			$	851			$	796		
Gross Margin (weighted 20%)			41.8	%			43.8	%			45.8	%			43.8	%	

(1)	The target for net earnings was set lower than prior year’s result largely driven by lapping the impact of the Tax Cuts and Jobs Act, as well as higher interest expense associated with the $2 billion share repurchase program.	
(2)	Results exclude the impact of the change in accounting for share-based payments (ASU 2016-09), US and Argentina tax reform, hurricane insurance claim, Nutranext acquisition, and Aplicare and Healthlink divestitures on net sales, net earnings from continuing operations and gross margin. Results include certain net adjustments related to certain trade expenses.	

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For fiscal year 2019, the Financial Performance Multiplier was 67%, primarily driven by below-target sales growth, inclusive of unfavorable foreign currency exchange rates, mainly in Argentina. Additionally, net earnings from continuing operations was below target. Gross margin was at target reflecting the benefit of price increases and cost savings, partially offset by higher manufacturing and logistics costs and unfavorable rising commodity.

Individual Performance Multiplier. Consistent with our pay-for-performance philosophy, the annual incentive payouts are determined by financial results multiplied by an Individual Performance Multiplier. Based on its evaluation of individual performance, the MDCC reviewed and approved the Individual Performance Multiplier for each named executive officer to reflect the officer’s individual contributions in fiscal year 2019. In determining the multiplier for individual performance, the MDCC carefully
evaluates several performance factors against objectives established at the beginning of the year. For our CEO, the MDCC conducts a detailed evaluation covering the key categories of strategy, people, operations, and overall performance, with specific goals within each category. For our other named executive officers, the CEO recommends an individual performance multiplier based on each officer’s contribution in those key categories relevant to their roles.

To set specific targets for our CEO, the MDCC uses a balanced scorecard covering key categories of strategy, people, operations, and overall performance, with specific metrics and targets within each key category. These targets are used to measure the CEO’s performance twice a year, with a mid-year review and a year-end evaluation. This assessment is then used to determine the appropriate individual multiplier for the fiscal year performance.

The individual multipliers for fiscal year 2019 are provided in the table below along with a performance summary for each named executive officer.

Named Executive Officer	     	Individual
Performance
Multiplier	     	Performance Summary	
Benno Dorer – Chair and Chief Executive Officer		100%		Strong overall performance across strategy, operations and people with targeted operational challenges appropriately reflected in the Financial Performance Multiplier of 67%.	
Kevin B. Jacobsen – Executive Vice President,
Chief Financial Officer		90%		Strong contributions to strategy and people results; however the Company missed two of three key financial metrics.	
Laura Stein – Executive Vice President,
General Counsel and Corporate Affairs		105%		Excellent outcomes related to litigation, governance, external engagement and overall ESG strategy.	
Linda Rendle – Executive Vice President,
Strategy and Operations		105%		Enterprise leadership across strategy, people and operations, as well as leadership across functions to drive operational excellence.	
Eric Reynolds – Executive Vice President,
Cleaning and Burt’s Bees		105%		Strong finish in Chief Marketing Officer role. Business results in Cleaning and Burt’s Bees met or exceeded target.	

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Final Individual Annual Incentive Plan Payouts. In accordance with the formula described above, the final annual incentive calculations and payouts for our named executive officers in fiscal year 2019 are found in the table below. The Financial Performance Multiplier was 67% in fiscal year 2019, which resulted in final payouts that were below target. These payouts are also reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.

Named Executive Officer	Base
Salary	Annual Incentive
Target (As a %
of Base Salary)	Financial
Performance
Multiplier	Individual
Performance
Multiplier	Final Annual
Incentive
Plan Payout	
Benno Dorer - Chair and Chief Executive Officer	$	1,200,000	                    150%	67%	100%	      $	1,206,000	
Kevin B. Jacobsen - Executive Vice President,
 Chief Financial Officer	$	550,000	85%	67%	90%	$	281,903	
Laura Stein - Executive Vice President,
General Counsel and Corporate Affairs	$	640,000	70%	67%	105%	$	315,168	
Linda Rendle - Executive Vice President,
Strategy and Operations	$	560,000	80%	67%	105%	$	290,318	
Eric Reynolds - Executive Vice President,
Cleaning and Burt’s Bees(3)	$	490,000	75%	67%	105%	$	230,363	
Long-Term Incentives. Each year, we provide long-term incentive compensation to our named executive officers. These awards have been made in the form of performance shares and stock options, which we believe align Company performance and executive officer compensation with the interests of our stockholders. These incentive awards also support the achievement of our long-term corporate financial goals.
We use time-based restricted stock for non-executive officer employees and occasionally for special purposes for executive officers, such as in connection with a promotion or as a replacement for compensation forfeited by an externally recruited executive at a prior employer.
The MDCC annually reviews the costs of, and potential stockholder dilution attributable to, our long-term incentive program to ensure that the overall program is financially efficient and in line with that of our compensation peer group. The MDCC also seeks to calibrate the long-term incentive program design to drive performance and deliver appropriate rewards relative to the compensation peer group. In determining the total value of the long-term incentive opportunity for each named executive officer, the MDCC reviews the compensation peer group data presented by both management and the independent compensation consultant on a role-by-role basis and considers recommendations by our CEO for the other named executive officers.
The MDCC’s goal is to target long-term incentive awards in amounts that are generally competitive with the median of the compensation peer group. Actual long-term incentive award target levels for individual named executive officers may vary from the median based on a variety of factors, such as the named executive officer’s sustained performance, individual experience, critical nature of their role, and expected future contributions. Like the annual incentive awards, actual payouts under the long-term
incentive awards will vary from the target based on how the Company performs against pre-established targets. The value of payouts will also vary based on changes in the market price of our Common Stock.
The MDCC determined that our named executive officers would receive 50% of the value of their total annual long-term incentive award granted in fiscal year 2019 in performance shares and 50% in stock options. The MDCC believes this mix of equity awards supports several important objectives, including compensating named executive officers for achievement of long-term goals tied to our business strategy, rewarding named executive officers for sustained increases in the price of our Common Stock, enhancing retention by mitigating the impact of price fluctuations of our Common Stock in the overall long-term incentive value, and ensuring that the overall cost of the program is aligned with the compensation realized by the named executive officers and the performance delivered to stockholders. The MDCC does not consider the amount of outstanding performance shares, stock options, and restricted stock currently held by a named executive officer when making annual awards of performance shares and stock options because such amounts represent compensation attributable to prior years.
Long-Term Incentive Award. The long-term incentive awards granted to our named executive officers for fiscal year 2019 were made in September 2018. The MDCC considered factors such as the executive’s role, level of experience, and sustained performance, as well as the compensation peer group market data, in determining each named executive officer’s long-term incentive award. For fiscal year 2019, the long-term incentives for our named executive officers (including the off-cycle awards discussed below), excluding our CEO, ranged in value from $900,000 to $1,300,000. Mr. Dorer received a long-term incentive award valued at $5,750,000. Our

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EVP – Strategy & Operations, Ms. Rendle, and our EVP – Cleaning and Burt’s Bees, Mr. Reynolds received off-cycle performance share and stock option grants in connection with their promotions in January 2019 based on competitive market pay and an approximate proration of their new total direct compensation. The performance shares are subject to the same terms and conditions as the September 2018 performance shares. The stock options are subject to the same terms and conditions as the annual grants. The exercise price for the stock options was equal to the closing price of our Common Stock on the date of grant. The long-term incentives awarded to our named executive officers in fiscal year 2019 are listed in the Stock Awards and Option Awards columns of the Summary Compensation Table.
Performance Shares. Performance shares are grants of restricted stock units that pay out after a three-year performance period only if the Company meets pre-established financial performance goals, which are described below. Economic profit (EP) performance is measured to a three-year annual growth rate that is established at the beginning of the cycle and held constant. For purposes of the performance shares, EP is defined as earnings before interest and taxes, adjusted for non-cash restructuring charges, times one minus the tax rate, less capital charge. The potential payout can range from 0% to 200% of target.
We believe that performance shares align the interests of our named executive officers with the interests of our stockholders because the number of shares earned and the shares’ potential value are tied to the achievement of performance targets. As discussed above, the performance target for the awards granted in September 2018 is a three-year annual EP growth rate target informed by our three-year financial long-range plan and the budget developed by management, which is reviewed and approved by the Board. In setting the performance targets for the performance shares, the MDCC reviews the budget and long-range plan and seeks to appropriately align the performance goals with the objectives of the Annual Incentive Plan, so that the overall compensation design does not encourage participants to take unnecessary or excessive risk or actions that are inconsistent with the Company’s short- and long-term strategic and financial objectives. The MDCC believes its use of growth in EP as a metric provides rigor and an ability to align performance with pay over the three-year performance period.
The payout of the performance share awards granted in September 2018 is subject solely to the Company’s achievement of a three-year EP annual growth rate target during the performance period of July 2018 through June 2021. The percentage range for payouts is from 0%, if the minimum EP target is not met, to a maximum of 200% of the target number of shares.
For the grant made in September 2016, which was based on a performance period of July 2016 through June 2019 and paid out in August 2019, the MDCC established cumulative EP targets and set various payout levels tied to cumulative EP for the performance period. For the September 2016 grant, the cumulative EP target was set so a payout of 100% would be made if the Company achieved adjusted cumulative EP growth of approximately 5% per year during the performance period. The MDCC believes this metric directly supports the Company’s corporate strategy and long-term financial goals and correlates to stock price performance.
In August 2019, the MDCC certified the results of the September 2016 grant for the July 2016 to June 2019 performance period. The adjusted financial target for the grant was a cumulative EP of $1.750 billion over the three-year performance period for a 100% payout. The cumulative EP target was adjusted in accordance with predetermined criteria established by the MDCC at the time initial grants were approved as set forth in the grant agreements for the impact of the adoption of a change to the accounting standards for share-based payments under ASU 2016-09, as well as for the acquisition of Nutranext in April 2018, fiscal year 2018 net impact of hurricanes, Argentina tax reform and the Tax Cuts and Jobs Act that went into effect January 1, 2018. The cumulative EP target also reflects the inclusion of certain net adjustments related to certain trade expenses. The Company’s actual cumulative EP, inclusive of the predetermined adjustments, of $1.754 billion was above the target amount of $1.750 billion, resulting in the MDCC certifying a payout of 104% for the 2016 grants.
Stock Options. Stock options align the interests of our named executive officers with those of our stockholders because the options only have value if the price of the Company’s stock increases after the stock options are granted. Stock options vest in 25% increments over a four-year period (beginning one year from the date of grant) and expire 10 years from the date of grant. In fiscal year 2019, the MDCC awarded stock options to our named executive officers as part of our annual long-term incentive plan. Information on all stock option grants is shown in the Grants of Plan-Based Awards table.
Retirement Plans
Our named executive officers participate in the same tax-qualified retirement benefit programs available to all other United States-based salaried and non-collectively bargained hourly employees. The Company’s retirement plans are designed to provide replacement income upon retirement and to be competitive with programs offered by our peers.
In addition, because the IRC limits the amount of benefits that can be contributed to and paid from a tax-qualified retirement plan, the Company also provides our executive officers,

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including our named executive officers, with additional retirement benefits intended to restore amounts that would otherwise be payable under the Company’s tax-qualified retirement plans if the IRC did not have limits on includable compensation and maximum benefits. We call these plans “restoration plans” because they restore total executive retirement benefits to the same percentage level provided to our salaried employees who are not limited by IRC restrictions.
A brief description of each of our retirement programs is set forth below. Each of our named executive officers participates in these retirement programs with the exception of the Supplemental Executive Retirement Plan.
The Clorox Company Pension Plan. The Clorox Company Pension Plan (the Pension Plan) is a cash balance pension plan that was frozen effective June 30, 2011. This freeze did not affect the benefits previously accrued under the Pension Plan, which remain fully funded.
The Clorox Company 401(k) Plan. After the Pension Plan was frozen in June 2011, the Clorox Company 401(k) Plan (the 401(k) Plan) became the primary retirement plan for the Company. The Company makes an annual fixed contribution of 6% of eligible pay and a matching contribution of up to 4% of eligible pay to eligible employees.
Nonqualified Deferred Compensation Plan. Under the Nonqualified Deferred Compensation Plan (the NQDC), eligible employees may voluntarily defer receipt of up to 50% of base salary and up to 100% of their annual incentive awards. In fiscal year 2019, deferred amounts could be invested in a manner that generally mirrored the funds available in the 401(k) Plan. The NQDC permits the Company to contribute amounts that exceed the IRC compensation limits in the tax-qualified plans through a 401(k) restoration provision for those employees deferring at required levels in the plan.
Supplemental Executive Retirement Plan. The Supplemental Executive Retirement Plan (the SERP), a defined benefit plan, was closed to new participants effective April 2007 and, effective June 30, 2011, was frozen with regard to pay and offsets, while still accruing age and service credits. Benefits under the SERP have historically been calculated as an annuity based on a percentage of average compensation adjusted by age and years of service and offset by the annuity value of Company contributions to the tax-qualified retirement plans and by Social Security. Effective July 1, 2011, the SERP was replaced by the Executive Retirement Plan (the ERP) (described below). Moving from the SERP to the ERP created a defined contribution structure that is more closely aligned
with the benefits provided by the Company’s compensation peer group. In March 2018, the SERP was amended to provide that designated participants whose service as an executive of the Company is succeeded by service as a consultant or advisor will be entitled to receive age and service credits while serving as a consultant or advisor for purposes of accruing an early retirement benefit under the SERP, provided that they have attained a minimum of 25 years of service and be at least 50 years old at the time that service as a consultant or advisor commences. As of July 1, 2019, only two of our named executive officers are still eligible for the SERP.
Executive Retirement Plan. Our executive officers (including named executive officers) participate in the ERP. Under the ERP, the Company makes an annual contribution of 5% of an eligible participant’s base salary and annual incentive award into the plan.
Further details about the provisions of the Pension Plan, NQDC, SERP, and ERP are provided in the Overview of Pension Benefits and the Overview of the Nonqualified Deferred Compensation Plans sections below.
Post-Termination Compensation
The Company has a severance plan (the Severance Plan) that provides our named executive officers with post-termination payments if the named executive officers’ employment is terminated by the Company other than for cause. These payments are intended to provide a measure of financial security following the loss of employment, which we believe is important to attract and retain executives. The severance benefits are designed to be competitive with the compensation peer group and external market practices.
The Company also has an Executive Change in Control Severance Plan (the CIC Plan), which provides severance benefits to certain eligible executives of the Company, including all of the Company’s named executive officers, if their employment with the Company is involuntarily terminated in connection with a change in control of the Company. In addition to helping mitigate the financial impact associated with termination after a change in control, these benefits further align the interests of our executive officers with the interests of our stockholders by providing incentives for retention, for business continuity purposes. Under the CIC Plan, a named executive officer is eligible for change in control severance benefits if their employment is terminated in connection with a change in control, either by the Company without cause or by the named executive officer for good reason. See the Potential Payments Upon Termination or Change in Control section of the CD&A for additional information.

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Perquisites
We provide our named executive officers with other limited benefits we believe are competitive with the compensation peer group and consistent with the Company’s overall executive compensation program. These benefits allow our named executive officers to proactively manage their health, work more efficiently, and, in the case of the financial planning program, help them optimize the value received from our compensation and benefits programs. These perquisites are a Company car or car allowance, paid parking at the Company’s headquarters, an annual executive physical exam, reimbursement for health club membership, and financial planning services.
Compensation Philosophy
A core principle of our compensation philosophy is to align pay with performance. We do so by delivering the majority of executive pay through “at-risk” variable incentive awards that help ensure realized pay is tied to attainment of critical operational goals and sustainable appreciation in stockholder value. In fiscal year 2019, approximately 86% of the targeted compensation for our CEO and approximately 72% of the targeted compensation for our other named executive officers was directly tied to the achievement of short- and long-term operating goals and total stockholder return. This approach is designed to accomplish the following:

Element	     	Objective	
Pay for Performance		Reward performance that drives achievement of the Company’s short- and long-term goals and, ultimately, stockholder value.	
Align Management and Stockholder Interests		Align the interests of our executive officers with our stockholders by using long-term, equity-based incentives, encourage a culture of ownership with stock retention guidelines, and reward executive officers for sustained Company performance as measured by operating results and total stockholder return.	
Attract, Retain, and Motivate Talented Executives		Maintain market-based pay targets and program design that allow the Company to be a magnet for high-performing executives.	
Address Risk-Management Considerations		Motivate our executives to create long-term stockholder value and discourage behavior that could lead to unnecessary or excessive risk-taking by providing a balance of fixed and at-risk pay, and short-term and long-term performance horizons, using a variety of metrics tied to key drivers of sustainable value creation.	
Support Financial Efficiency		Help ensure that cash- and equity-based incentive payouts are appropriately supported by performance, and design awards in a way that is intended to minimize unnecessary accounting charges and maximize the extent to which payments are tax-deductible to the Company compensation.	

What We Have and Don’t Have – Elements of Our Executive Compensation Program
The following elements of our executive compensation program reflect our continued commitment to our compensation philosophy:
What We Have

✓	An executive compensation program designed to further the Company’s strategy and mitigate inappropriate risk;	
✓	Different performance horizons for the goals within our annual and long-term incentive plans;	
✓	Use of economic profit as a rigorous long-term incentive metric and net sales, net earnings and gross margin for our annual incentive metrics;	
✓	Stringent stock ownership and retention guidelines for all of our executives;	
✓	A prohibition on speculative transactions involving the Company’s stock, including hedging and pledging;	
✓	Stock options that vest over a four-year period and have an exercise price equal to fair market value of our Common Stock on the date of grant;	
✓	Clawback provisions in both our annual and long-term incentive plans;	
✓	Double-trigger change in control provisions for all equity awards;	
✓	Reasonable cash severance provisions to support talent retention and attraction objectives, promote orderly succession planning, and avoid individual negotiation with exiting executives, thus eliminating the need for individual employment agreements;	
✓	Modest perquisites supported by sound business rationale;	
✓	Annual review of our executive compensation program by the MDCC, which yielded changes to the annual and long-term incentive programs effective in fiscal year 2019; and	
✓	Use of an independent compensation consultant who does not provide any additional consulting services to the Company.	
What We Don’t Have

ø	Employment contracts for any executives;	
ø	Stock option re-pricing without stockholder approval;	
ø	Payment of dividends or dividend equivalents on unvested or unearned performance shares or restricted stock; and	
ø	Tax gross-ups for any executive officers.	

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Compensation Discussion and Analysis

How We Make Compensation Decisions
Roles and Responsibilities in Setting Executive Compensation
Management Development and Compensation Committee. The MDCC is made up entirely of independent directors as defined by our Governance Guidelines and NYSE listing standards. The MDCC regularly reviews the design and implementation of our executive compensation program and reports on its discussions and actions to the Board. In particular, the MDCC (i) oversees our executive compensation program, (ii) approves the performance goals and strategic objectives for our named executive officers, evaluates results against those targets each year, and determines and approves the compensation of our CEO (after consulting with the other independent members of the Board) and our other named executive officers, as well as officers at or above the level of senior vice president and any other officers covered by Section 16 of the Exchange Act, and (iii) makes recommendations to the Board with respect to the structure of overall incentive and equity-based plans.
The MDCC makes its determinations regarding executive compensation after consulting with management and the MDCC’s independent compensation consultant (as further described below), and its decisions are based on a variety of factors, including the Company’s performance, individual executives’ performance, peer group data, and input and recommendations from the independent compensation consultant.
The MDCC evaluates individual performance based on the performance of the business or operations for which the executive is responsible, the individual’s skill set relative to industry peers, overall experience and time in the position, the critical nature of the individual’s role, difficulty of replacement, expected future contributions, readiness for promotion to a higher level, and role relative to that of other executive officers.
In determining the compensation package for each of our named executive officers other than our CEO, the MDCC receives input and recommendations from our CEO and our Executive Vice President – Chief People Officer. Named executive officers do not have a role in the determination of their own compensation, but named executive officers other than our CEO do discuss their individual performance objectives and results with our CEO.
Board of Directors. The independent members of the Board undertake a thorough process during which they review our CEO’s annual performance, and each independent director provides candid feedback and
observations that are shared in aggregate with our CEO. The Board considers a variety of substantive factors it has identified as being most important for effective CEO performance, with a focus on strategy, people, and operations. The full Board discusses the evaluations of our CEO’s performance against these factors and then provides its compensation recommendations to the MDCC. The MDCC, after evaluating the Board’s recommendations and receiving input from the independent compensation consultant, then makes a final determination on our CEO’s compensation. Our CEO does not have a role in his own compensation determination other than participating in a discussion with the Board regarding his performance relative to specific targets and strategic objectives set at the beginning of the fiscal year, which the Board considers in both its compensation determination and when setting performance targets for the upcoming fiscal year.
Independent Compensation Consultant. The MDCC retains the services of an independent compensation consulting firm to assist it in the performance of its duties. During fiscal year 2019, the MDCC used the services of Frederic W. Cook & Co., Inc. (FW Cook). FW Cook’s work with the MDCC included data analysis and guidance and recommendations on the following topics: compensation levels relative to our peers, market trends in incentive plan design, risk and reward structure of executive compensation plans, and other policies and practices, including the policies and views of third-party proxy advisory firms. FW Cook also assisted in the evaluation and implementation of changes to the Company’s incentive plans, which were effective with fiscal year 2019 and are described under the What We Pay: Components of Our Compensation Program section of this CD&A. See the Independence of the Compensation Consultant section below for a discussion of FW Cook’s independence from management.
Chief Executive Officer. Our CEO makes compensation recommendations to the MDCC for all executive officers other than himself. In making these recommendations, our CEO evaluates the performance of each executive officer and considers their responsibilities as well as the compensation analysis provided by the independent compensation consultant.
Other Members of Management. Senior human resources management provides analyses regarding competitive practices and pay ranges, compensation and benefit plans, policies and procedures for equity awards, perquisites, general compensation, and benefits philosophy. Senior human resources, legal, and, from time to time, finance executives attend non-executive sessions of the MDCC meetings to provide additional perspective and expertise.

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Independence of the Compensation Consultant
Pursuant to its charter, the MDCC is authorized to retain, oversee, and terminate any consultants as it deems necessary, as well as to approve the fees and other retention terms of any such consultants. Prior to retaining a compensation consultant or any other external advisor, from time to time as the MDCC deems appropriate but at least annually, the MDCC assesses the independence of the advisor from management. In evaluating FW Cook, the MDCC’s compensation consultant, the MDCC took into consideration all factors relevant to FW Cook’s independence, including the following factors specified in the NYSE listing standards:

●	other services provided to the Company by FW Cook or any of its affiliates;	
●	the fees paid by the Company to FW Cook as a percentage of FW Cook’s total revenue;	
●	the policies and procedures of FW Cook that are designed to prevent a conflict of interest;	
●	any business or personal relationship between individuals at FW Cook performing consulting services for the MDCC and an MDCC member;	
●	any ownership of Company stock by the individuals at FW Cook performing consulting services for the MDCC; and	
●	any business or personal relationship between FW Cook or individuals at FW Cook performing consulting services for the MDCC and an executive officer of the Company.	
FW Cook has provided the MDCC with appropriate assurances and confirmation of its independent status in accordance with the MDCC’s charter and other considerations. The MDCC believes that FW Cook has been independent throughout its service to the MDCC and that there is no conflict of interest between FW Cook or individuals at FW Cook and the MDCC, the Company’s executive officers, or the Company.
Our Peer Group
The MDCC uses a peer group of consumer products companies (the compensation peer group) to help determine competitive compensation rates for the Company’s executive officers, including the named executive officers. The compensation peer group was selected by the MDCC based on the factors described below, with input from FW Cook. The compensation peer group is used to evaluate both the levels of executive compensation and compensation practices within the consumer products industry.

For fiscal year 2019, the compensation peer group was composed of the following 18 companies:

Avon Products, Inc.	The Estee Lauder Companies Inc.	McCormick & Company, Incorporated	
Campbell Soup Company	General Mills, Inc.	Molson Coors Brewing Company	
Church & Dwight Co., Inc.	The Hershey Company	Newell Rubbermaid Inc.	
Colgate-Palmolive Company	Hormel Foods Corporation	Revlon, Inc.	
Keurig Dr. Pepper	The J.M. Smucker Company	S.C. Johnson & Son, Inc.	
Edgewell Personal Care	Kellogg Company	Tupperware Brands Corporation	
To determine the compensation peer group for each year, the MDCC considers companies that:

●	hold leadership positions in branded consumer products;	
●	are of reasonably similar size based on market capitalization and revenue;	
●	compete with the Company for executive talent; and	
●	have executive positions similar in breadth, complexity, and scope of responsibility to those of the Company.	
The MDCC annually reviews and makes adjustments to the compensation peer group as appropriate to ensure that the peer group companies continue to meet the relevant criteria. As of July 31, 2019, the Company was at the 33rd percentile for revenue, 55th percentile for net income, and 61st percentile for market capitalization compared with the compensation peer group.

Fiscal Year 2019 Compensation of Our Named Executive Officers
For fiscal year 2019, management engaged Aon Hewitt to obtain and aggregate compensation data for the compensation peer group. This data was used to advise the MDCC on setting target compensation for our named executive officers. FW Cook reviewed this information
and performed an independent compensation analysis of the compensation peer group data to advise the MDCC. Although each individual component of executive compensation is reviewed, particular emphasis is placed on targeting total compensation within 15% of the median

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Compensation Discussion and Analysis
target dollar amounts of compensation of the compensation peer group. Other factors, such as an executive’s level of experience, may result in target total compensation for individual named executive officers being set above or below this median range. For fiscal year 2019, each named executive officer’s target total compensation is within 15% of the compensation peer group median, with the exception of Mr. Jacobsen, who was promoted to CFO in fiscal year 2018 and falls below the indicated range due to his short tenure in the role.
Other Executive Compensation Policies and Practices
Tally Sheets. To help ensure that our executive compensation design is aligned with our overall compensation philosophy of pay for performance and that total compensation levels are appropriate, the MDCC annually reviews compensation tally sheets for each of our named executive officers. These tally sheets outline current target total compensation (including the compensation elements described above), the potential wealth creation of long-term incentive awards granted to our officers under various potential stock prices, and the potential value of payouts under various termination scenarios. As such, these tally sheets help provide the MDCC with a comprehensive understanding of all elements of the Company’s compensation program and enable the MDCC to consider changes to the Company’s compensation program, arrangements, and plans in light of best practices and emerging trends. The MDCC may consider the information presented in the tally sheets in determining future compensation.
Results of 2018 Advisory Vote on Executive Compensation. At our 2018 Annual Meeting of Stockholders held on November 14, 2018, we asked our stockholders to approve, on an advisory basis, our fiscal year 2018 compensation awarded to our named executive officers, commonly referred to as a “say-on-pay” vote. Our stockholders overwhelmingly approved the compensation to our named executive officers, with approximately 93% of votes cast in favor of our proposal. We value this positive endorsement by our stockholders of our 2018 executive compensation policies and believe that the outcome signals our stockholders’ support of our compensation program. We continued our general approach to compensation for fiscal year 2018, specifically our pay-for-performance philosophy and our efforts to attract, retain, and motivate our named executive officers, taking into account the say-on-pay results as well as specific feedback from our stockholders. We value the opinions of our stockholders and will continue to consider the results from this year’s and future advisory votes on executive compensation, as well as feedback received throughout the year, when making compensation decisions for our named executive officers.
Stock Award Granting Practices. The Company awards long-term incentive grants each September at a regularly scheduled MDCC meeting, which typically occurs during the third week of the month, or about six weeks after the Company has publicly reported its annual earnings. The meeting date is the effective grant date for the awards, and the exercise/grant price is equal to the closing price of our Common Stock on that date.
The MDCC may also make occasional grants of stock options and other equity-based awards at other times to recognize, retain, or recruit executive officers.
Executive Stock Ownership Guidelines. To maintain alignment of the interests of the Company’s executive officers and our stockholders, all executive officers, including the named executive officers, are expected to build and maintain a significant level of direct stock ownership. Ownership levels can be achieved over time in a variety of ways, such as by retaining stock received upon the exercise of stock options or the vesting of stock awards or by purchasing stock in the open market. At a minimum, executive officers are expected to establish and maintain direct ownership of Common Stock having a value, based on the closing market price of the stock on the first business day of fiscal year 2019, equal to a multiple of each executive officer’s annual base salary. The current minimum ownership guidelines are as follows:

Chief Executive Officer	6x annual base salary	
Executive Officers (other than the CEO)	3x annual base salary	
Other Senior Executives	2x annual base salary	
Ownership levels are based on shares of Common Stock owned by the named executive officer or held pursuant to Company plans, including performance shares that have vested and been deferred for settlement. Unexercised stock options and shares that have not vested due to time or performance restrictions are excluded from the ownership calculations.
As of the date of this proxy statement, Messer. Dorer and Reynolds and Ms. Stein have met the required ownership levels. Ms. Rendle and Mr. Jacobsen became subject to a higher threshold with their promotions to the Executive Committee in fiscal years 2017 and 2018, respectively, and their ownership threshold increased from 2 times annual base salary to 3 times annual base salary required for executive officers other than the CEO.

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Retention Ratios. Executive officers, including our named executive officers, are required to retain a certain percentage of shares obtained upon either the exercise of stock options or the release of restrictions on performance shares and restricted stock, after satisfying applicable taxes. Our CEO is expected to retain 75% of shares acquired (after taxes) until the minimum ownership level is met. After attaining the minimum ownership level, our CEO must retain 50% of any additional shares acquired (after taxes) until retirement or termination. Other executive officers must retain 75% of shares acquired (after taxes) until the minimum ownership levels are met and thereafter must retain 25% of shares acquired (after taxes) for one year after receipt.
Securities Trading Policy; Prohibition on Hedging and Pledging. To ensure alignment of the interests of our stockholders with all of our directors, officers, employees and consultants, including our named executive officers, the Company’s Insider Trading Policy does not permit any director, officer, employee or consultant of the Company, including any of the Company’s executive officers, either (1) to trade in the stock or other securities of any company when aware of material nonpublic information about that company, including the Company as well as any customers or suppliers of the Company or firms with which the Company may be negotiating a major transaction or (2) to engage in short-term or speculative transactions or derivative transactions involving the Company’s stock and includes prohibitions on options trading and hedging. Restrictions and cautions have also been set forth in this Policy on pledging the Company’s stock as collateral.
The Policy’s prohibition on engaging in hedging transactions in Company securities covers the purchase of a financial transaction instrument, or otherwise engaging in a transaction that hedges or offsets, or is designed to hedge or offset, any decrease in the market value of the Company’s equity securities that were granted as part of the individual’s compensation or that the individual holds directly or indirectly. The following transactions are expressly prohibited by the Policy: (1) short sales (selling Company securities you do not own), (2) transactions involving publicly traded options or other derivatives whose value is tied to the Company’s securities, including trading in or writing puts or calls on the Company’s securities, (3) pre-paid forward contracts and (4) collars. Directors, executive officers, the principal accounting officer and 10% beneficial owners of the Company’s common stock are also prohibited from borrowing against the value of any Company stock that they own through the use of a margin account or other pledge of Company stock as collateral.
Trading of the Company’s securities by directors, executive officers and certain other employees who are so designated from time to time and are informed of their status by the office of the Company’s General Counsel is permitted only during announced trading periods or in accordance with a previously established trading plan that meets SEC
requirements. At all times, including during announced trading periods, directors, executive officers and certain other employees notified by the office of the Company’s General Counsel are required to obtain preclearance from the Company’s General Counsel or Corporate Secretary prior to entering into any transactions in Company securities, unless those sales occur in accordance with a previously established trading plan that meets SEC requirements.
Clawback Provisions. Under our Annual Incentive Plan and long-term incentive plan, in the event of a restatement of financial results to correct a material error or other factors as described in the long-term incentive plan, the MDCC is authorized to reduce or recoup an executive officer’s award, as applicable, to the extent that the MDCC determines such executive officer’s fraud or intentional misconduct was a significant contributing factor to the need for a restatement.
Tax Deductibility Limits on Executive Compensation. Section 162(m) limits the federal income tax deductibility of compensation paid to our CEO and the three other most highly compensated named executive officers employed at the end of the year (other than the CFO) to $1 million per year, unless such amounts are determined to be performance-based compensation awarded on or before November 2, 2017. Our policy with respect to Section 162(m) seeks to balance the interests of the Company in maintaining flexible incentive plans against the possible loss of a tax deduction when taxable compensation for any of the executive officers subject to Section 162(m) exceeds $1 million per year. The rules and regulations promulgated under Section 162(m) are complex and subject to change from time to time, sometimes with retroactive effect. There can be no guarantee, therefore, that amounts potentially subject to the Section 162(m) limitations and awarded on or before November 2, 2017 will be treated by the Internal Revenue Service as “qualified performance-based compensation” under Section 162(m) and/or deductible by the Company.
With the enactment of the Tax Cuts and Jobs Act in December 2017, for taxable years beginning after December 31, 2017, which includes our 2019 fiscal year, the deductibility exemption for performance-based compensation under Section 162(m) has been eliminated. As a result, compensation in excess of $1 million paid to covered executive officers generally is not deductible unless the compensation qualifies for certain transition relief under the Tax Cuts and Jobs Act. As a result, the Company has assessed, and continues to assess how the amendments to Section 162(m) affect its annual and long-term incentive compensation. Given the commitment of the Company and the MDCC to tying the compensation of its executives to the performance of the Company, to date there have not been, and we do not expect there to be in the future material changes made to the manner in which the Company awards its incentive compensation.

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Compensation Discussion and Analysis

The Management Development and Compensation Committee Report
As detailed in its charter, the Management Development and Compensation Committee of the Board oversees the Company’s executive compensation program and policies. As part of this function, the MDCC discussed, and reviewed with management, the CD&A. Based on this review and discussion, we have recommended to the Board that the CD&A be included in the proxy statement.
THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
Spencer C. Fleischer, Chair
Richard H. Carmona
David Mackay
Russell J. Weiner

Compensation Committee Interlocks and Insider Participation
Each of Dr. Carmona and Messrs. Fleischer, Mackay, Weiner and Jeffrey Noddle served as a member of the MDCC during part or all of fiscal year 2019. None of the members was an officer or employee of the Company or any of its subsidiaries during fiscal year 2019 or in any prior fiscal year. No executive officer of the Company served on the board of directors or compensation committee of any other entity that has or had one or more executive officers who served as a member of the Board or MDCC during fiscal year 2019.

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Compensation Discussion and Analysis Tables
FISCAL YEAR 2019 SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned, paid, or awarded to our named executive officers for the fiscal years ended June 30, 2019, 2018, and 2017.

Name and Principal
Position	   	Year	   	Salary
($)(1)	   	Stock
Awards
($)(2)(3)	   	Option
Awards
($)(2)	   	Non-Equity
Incentive Plan
Compensation
($)(4)	   	Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(5)	   	All Other
Compensation
($)(6)	   	Total
($)	
Benno Dorer		2019		  $	1,166,346		  $	2,874,521		  $	2,874,816		       $	1,206,000		         $	859,528		         $	381,504		$	9,362,715	
Chair and Chief		2018			1,061,538			2,624,635			2,625,829			1,269,840			131,210			420,015			8,133,067	
Executive Officer		2017			1,010,577			2,374,406			2,374,959			1,569,480			188,548			550,919			8,068,890	
Kevin Jacobsen		2019			536,539			649,918			649,958			331,650			4,612			122,077			2,294,753	
Executive Vice President		2018			388,463			349,952			350,091			168,040			7,476			107,965			1,371,987	
— Chief Financial Officer																								
Laura Stein		2019			632,461			549,697			549,965			315,168			787,857			133,721			2,968,869	
Executive Vice President		2018			607,288			500,253			500,093			321,300			—			177,933			2,106,867	
— General Counsel and		2017			590,317			412,352			412,475			399,500			—			227,339			2,041,983	
Corporate Affairs																								
Linda Rendle(7)		2019			523,965			600,194			600,006			290,311			1,572			144,820			2,160,869	
Executive Vice President		2018			435,923			563,379			312,577			271,900			1,401			117,181			1,702,362	
— Strategy and Operations																								
Eric Reynolds(8)		2019			462,788			450,587			450,016			230,362			3,120			119,035			1,715,909	
Executive Vice President																								
—Cleaning and Burt's Bees																								

(1)	Reflects actual salary earned for fiscal years 2019, 2018, and 2017.	
(2)	The amounts reflected in these columns are the values determined under FASB ASC Topic 718 for the awards granted in the fiscal years ended June 30, 2019, 2018, and 2017, in accordance with the applicable accounting standard. The assumptions made in valuing stock awards and option awards reported in these columns are discussed in Note 1, Summary of Significant Accounting Policies under subsection “Stock-Based Compensation”, and in Note 16, Stock-Based Compensation Plans, to the Company’s consolidated financial statements for the three years in the period ended June 30, 2019, included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019. Additional information regarding the stock awards and option awards granted to our named executive officers during fiscal year 2019 is set forth in the Grants of Plan-Based Awards Table.	
(3)	The grant date fair value of the performance share awards reflected in this column is the target payout based on the probable outcome of the performance-based conditions, determined as of the grant date. The maximum potential payout of the stock awards would be 200% of the target shares awarded on the grant date. The maximum value of the performance share award for 2019 determined as of the date of grant would be as follows for each respective named executive officer: Mr. Dorer – $5,749,041; Mr. Jacobsen – $1,299,836; Ms. Stein – $1,099,394; Ms. Rendle – $1,200,389; and Mr. Reynolds – $901,174. See the Grants of Plan-Based Awards Table for more information about the performance shares granted under the 2005 Stock Incentive Plan.	
(4)	Reflects annual incentive awards earned for fiscal years 2019, 2018, and 2017 and paid out in September 2019, September 2018, and September 2017, respectively, under the Annual Incentive Plan. Information about the Annual Incentive Plan is set forth in the Compensation Discussion and Analysis under the Annual Incentives section of this CD&A.	

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(5)	The amounts reflect the aggregate change in the present value of accumulated benefits during fiscal years 2019, 2018, and 2017 under the SERP, the Pension Plan, and the cash balance restoration benefit of the NQDC (note that the SERP, the Pension Plan, and the cash balance restoration benefit of the NQDC are all frozen benefits; refer to the Pension Benefits Table for further information). Each plan amount in fiscal year 2019 is set forth in the following table:	

	     	Benno
Dorer	     	Kevin
Jacobsen	     	Laura
Stein	     	Linda
Rendle	     	Eric
Reynolds	
The Pension Plan		$	1,744		      $	4,151		$	4,322		  $	1,572		     $	3,078	
SERP			848,102			—			759,013			—			—	
Cash Balance Restoration Benefit			9,682			461			24,522			—			42	
Total		$	859,528		$	4,612		$	787,857		$	1,572		$	3,120	

(6)	The amounts shown in the All Other Compensation column represent (i) actual Company contributions under the Company’s 401(k) Plan, (ii) nonqualified contributions under the NQDC and ERP, and (iii) perquisites utilized by our named executive officers of the Company:	

	     	Benno
Dorer	     	Kevin
Jacobsen	     	Laura
Stein	     	Linda
Rendle	     	Eric
Reynolds	
The Clorox Company 401(k) Plan		$	28,004		   $	26,840		$	27,758		  $	26,314		  $	26,791	
Nonqualified Deferred Compensation Plan and ERP			329,899			68,694			86,874			83,562			63,278	
Company Paid Perquisites			23,601			26,543			19,089			34,944			28,966	
Total		$	381,504		$	122,077		$	133,721		$	144,820		$	119,035	
The following table sets forth the perquisites utilized by our named executive officers and the cost to the Company for providing these perquisites during fiscal year 2019. The amounts shown in the Other Perquisites row consist of paid parking at the Company’s headquarters, health club reimbursement, and an annual executive physical.

	     	Benno
Dorer	     	Kevin
Jacobsen	     	Laura
Stein	     	Linda
Rendle	     	Eric
Reynolds	
Executive Automobile Program		  $	13,200		     $	5,432		  $	13,200		  $	13,200		   $	13,200	
Basic Financial Planning			3,545			16,500			—			16,500			12,186	
Non-Business Use of Company Aircraft			—			—			—			—			—	
Other Perquisites			6,856			4,611			5,889			5,244			3,580	
Total		$	23,601		$	26,543		$	19,089		$	34,944		$	28,966	

(7)	In July 2019, Ms. Rendle was promoted to Executive Vice President, Cleaning, International, Strategy and Operations.	
(8)	In July 2019, Mr. Reynolds was promoted to Executive Vice President, Household and Lifestyle.	

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FISCAL YEAR 2019 GRANTS OF PLAN BASED AWARDS
This tables shows grants of plan-based awards to the named executive officers during fiscal year 2019.

Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards		Estimated Possible Payouts
Under Equity Incentive Plan
Awards		All Other
Stock
Awards:
Number
of Shares
if Stock or
Units
(#)		All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)		Exercise
or Base
Price of
Option
Awards
($/Sh)	  	Grant Date
Fair Value
of Stock
and Option
Awards
($)	
Name	     	Grant
Date	     	Threshold
($)	     	Target
($)	     	Maximum
($)	     	Threshold
(#)	     	Target
(#)	     	Maximum
(#)	     		     		     		     		
Benno Dorer																												
Annual Incentive Plan(1)				—		   $	1,800,000		  $	5,400,000																		
Performance Shares(2)		9/18/2018										           	—		18,930		37,860									  $	2,874,521	
Stock Options(3)		9/18/2018																			128,800		   $	151.85			2,874,816	
Kevin Jacobsen																												
Annual Incentive Plan(1)				—			467,500			1,402,500																		
Performance Shares(2)		9/18/2018											—		4,280		8,560										649,918	
Stock Options(3)		9/18/2018																			29,120		$	151.85			649,958	
Laura Stein																												
Annual Incentive Plan(1)				—			448,000			1,344,000																		
Performance Shares(2)		9/18/2018											—		3,620		7,240										549,697	
Stock Options(3)		9/18/2018																			24,640		$	151.85			549,965	
Linda Rendle																												
Annual Incentive Plan(1)				—			412,667			1,238,001																		
Performance Shares(2)		9/18/2018											—		2,800		5,600										425,180	
		1/7/2019											—		1,130		2,260										175,014	
Stock Options(3)		9/18/2018																			19,040		$	151.85			424,973	
		1/7/2019																			6,932		$	154.88			175,033	
Eric Reynolds																												
Annual Incentive Plan(1)				—			327,452			982,356																		
Performance Shares(2)		9/18/2018											—		1,980		3,960										300,663	
		1/7/2019											—		968		1,936										149,924	
Stock Options(3)		9/18/2018																			13,440		$	151.85			299,981	
		1/7/2019																			5,942		$	154.88			150,036	

(1)	Represents estimated possible payouts of annual incentive awards for fiscal year 2019 under the Annual Incentive Plan for each of our named executive officers. The Annual Incentive Plan is an annual cash incentive opportunity and, therefore, awards are earned in the year of grant. The target amounts represent the potential payout if both Company performance, including financial and strategic metrics, and individual performance are at target levels. The maximum amount represents maximum payout in the Annual Incentive Plan utilizing a Company performance multiplier of 200% and an individual performance multiplier of 150%. See the Summary Compensation Table for the actual payout amounts in fiscal year 2019 under the Annual Incentive Plan. See “Annual Incentives” in the Compensation Discussion and Analysis for additional information about the Annual Incentive Plan.	
(2)	Represents possible future payouts of Common Stock underlying performance shares awarded in fiscal year 2019 to each of our named executive officers as part of their participation in the 2005 Stock Incentive Plan. These awards will vest upon the achievement of performance measures based on average economic profit growth over a three-year period, with the threshold, target, and maximum awards equal to 0%, 100%, and 200%, respectively, of the number of performance shares granted. If the minimum financial goals are not met at the end of the three-year period, no awards will be paid out under the 2005 Stock Incentive Plan. See “Long-Term Incentives” in the Compensation Discussion and Analysis for additional information.	
(3)	Represents stock options awarded to each of our named executive officers under the 2005 Stock Incentive Plan. All stock options vest in equal installments on the first, second, third, and fourth anniversaries of the grant date.	

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Compensation Discussion and Analysis
OUTSTANDING EQUITY AWARDS AT FISCAL 2019 YEAR-END
The following equity awards granted to our named executive officers were outstanding as of the end of fiscal year 2019.

		Option Awards		Stock Awards	
		Number of
Securities
Underlying
Unexercised
Options-
Exercisable		Number of
Securities
Underlying
Unexercised
Options-
Unexercisable			Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options		Option
Exercise
Price		Option
Expiration		Number of
Shares or
Units of Stock
That Have Not
Vested		Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested		Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested			Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested	
Name	       	(#)	       	(#)		       	(#)	       		($)	       	Date	       	(#)	       	($)	       	(#)		       	($)(1)	
Benno Dorer					   														    				
Stock Options(2)		50,780		—					$	89.82		9/17/2024			 			 							
		221,170		—					$	100.24		11/20/2024											
		124,050		41,350	(3)				$	111.60		9/15/2025											
		86,425		86,425	(4)				$	123.09		9/13/2026											
		42,990		128,970	(5)				$	135.57		9/12/2027											
		—		128,800	(6)				$	151.85		9/18/2028											
Performance Shares(2)																		20,062	(9)		      $	3,071,632	
																		19,360	(10)		$	2,964,210	
																		18,930	(11)		$	2,898,372	
Kevin Jacobsen																							
Stock Options(2)		3,585		—					$	84.45		9/17/2023											
		15,630		—					$	89.82		9/17/2024											
		8,557		2,853	(3)				$	111.60		9/15/2025											
		5,460		5,460	(4)				    $	123.09		9/13/2026											
		2,457		7,373	(5)				$	135.57		9/12/2027													
		2,790		8,370	(7)				$	128.69		4/2/2028													
		—		29,120	(6)				$	151.85		9/18/2028													
Performance Shares(2)																				1,269	(9)			194,266	
																				1,110	(10)			169,952	
																				1,550	(11)			237,321	
																				4,280	(12)			655,311	
Laura Stein																									
Stock Options(2)		39,960		—					$	84.45		9/17/2023													
		41,670		—					$	89.82		9/17/2024													
		22,815		7,605	(3)				$	111.60		9/15/2025													
		15,010		15,010	(4)				$	123.09		9/13/2026													
		8,187		24,563	(5)				$	135.57		9/12/2027													
		—		24,640	(6)				$	151.85		9/18/2028													
Performance Shares(2)																				3,484	(9)			533,435	
																				3,690	(10)			564,976	
																				3,620	(11)			554,258	

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		Option Awards		Stock Awards	
		Number of
Securities
Underlying
Unexercised
Options-
Exercisable		Number of
Securities
Underlying
Unexercised
Options-
Unexercisable			Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options		Option
Exercise
Price		Option
Expiration		Number of
Shares or
Units of Stock
That Have Not
Vested			Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested		Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested			Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested	
Name	       	(#)	       	(#)		       	(#)	       		($)	       	Date	       	(#)		       	($)	       	(#)		       	($)(1)	
Linda Rendle																									
Stock Options(2)		1,697		—					$	72.11		9/11/2022													
		2,935		—					$	84.45		9/17/2023													
		7,850		—					$	89.82		9/17/2024													
		9,270		3,090	(3)				$	111.60		9/15/2025													
		7,280		7,280	(4)				$	123.09		9/13/2026													
		5,117		15,353	(5)				$	135.57		9/12/2027													
		—		19,040	(6)				$	151.85		9/18/2028													
		—		6,932	(8)				$	154.88		1/7/2029													
Performance Shares(2)																				1,685	(9)			257,960	
																				2,310	(10)			353,684	
																				2,800	(11)			428,708	
																				1,130	(13)			173,014	
Restricted Shares(2)														1,490	(14)		$	228,134							
														1,850	(15)		$	283,254							
 																									
Eric Reynolds																									
Stock Options(2)		11,407		3,803	(3)				$	111.60		9/15/2025													
		7,735		7,735	(4)				$	123.09		9/13/2026													
		4,095		12,285	(5)				$	135.57		9/12/2027													
		—		13,440	(6)				$	151.85		9/18/2028													
		—		5,942	(8)				   $	154.88		1/7/2029													
Performance Shares(2)																				1,799	(9)			275,476	
																				1,840	(10)			281,722	
																				1,980	(11)			303,158	
																				968	(13)			148,210	
Restricted Shares(2)														1,490	(14)		  $	228,134							

(1)	Represents unvested “target” number of performance shares under the 2005 Stock Incentive Plan multiplied by the closing price of our Common Stock on June 28, 2019, except as noted below in footnote (8). The ultimate value will depend on whether performance criteria are met and the value of our Common Stock on the actual vesting date.	
(2)	Grants were made under the 2005 Stock Incentive Plan.	
(3)	Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 15, 2015.	
(4)	Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 13, 2016.	
(5)	Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 12, 2017.	
(6)	Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 18, 2018.	
(7)	Represents unvested portion of off-cycle stock options granted to Mr. Jacobsen when he was promoted to Senior Vice President, Chief Financial Officer, effective April 1, 2018. Options vest in four equal installments beginning one year from the grant date of April 2, 2018.	

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Compensation Discussion and Analysis

(8)	Represents unvested portion of off-cycle stock options granted to Mr. Reynolds when he was promoted to Executive Vice President, Cleaning and Burt's Bees, effective January 7, 2019. Options vest in four equal installments beginning one year from the grant date of January 7, 2019.	
(9)	Represents the actual number of performance shares that were paid out under our 2005 Stock Incentive Plan. The grants from the plan have a three-year performance period (fiscal years 2017 through 2019). Performance is based on achievement of cumulative economic profit growth. After completion of fiscal year 2019, the MDCC determined whether the performance measures had been achieved and based on the results, on August 15, 2019, the MDCC approved the payout of this award at 104% of target.	
(10)	Represents the “target” number of performance shares that can be earned under our 2005 Stock Incentive Plan. The grants from the plan have a three-year performance period (fiscal years 2018 through 2020). Performance is based on achievement of cumulative economic profit growth. The MDCC will determine whether the performance measures have been achieved after the completion of fiscal year 2020.	
(11)	Represents the “target” number of performance shares that can be earned under our 2005 Stock Incentive Plan. The grants from the plan have a three-year performance period (fiscal years 2019 through 2021). Performance is based on achievement of average economic profit growth. The MDCC will determine whether the performance measures have been achieved after the completion of fiscal year 2021.	
(12)	Represents the “target” number of performance shares that can be earned under our 2005 Stock Incentive Plan. The off-cycle grants from the plan, which was granted to Mr. Jacobsen when he was promoted to Senior Vice President, Chief Financial Officer, effective April 1, 2018, have a three-year performance period (fiscal years 2018 through 2020). Performance is based on achievement of average economic profit growth. The MDCC will determine whether the performance measures have been achieved after the completion of fiscal year 2020.	
(13)	Represents the “target” number of performance shares that can be earned under our 2005 Stock Incentive Plan. The off-cycle grants from the plan, which were granted to Ms. Rendle and Mr. Reynolds when they were promoted to Executive Vice President, Strategy and Operations and Executive Vice President, Cleaning and Burt's Bees, respectively, effective January 7, 2019, have a three-year performance period (fiscal years 2019 through 2021). Performance is based on achievement of average economic profit growth. The MDCC will determine whether the performance measures have been achieved after the completion of fiscal year 2021.	
(14)	Represents unvested one-time off-cycle restricted stock grants that were granted to Ms. Rendle when she became the Senior Vice President – GM, Cleaning Division & PPD effective April 3, 2017 and to Mr. Reynolds in conjunction with leadership changes effective April 3, 2017. Restricted stock units vest three years from the anniversary of the grant date.	
(15)	Represents unvested one-time off-cycle restricted stock grant that was granted to Ms. Rendle when she became the Executive Vice President – Cleaning & Strategy effective June 29, 2018. Restricted stock units vest three years from the anniversary of the grant date.	

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FISCAL YEAR 2019 OPTION EXERCISES AND STOCK VESTED
This table shows stock options exercised and stock vested for the named executive officers during fiscal year 2019.

		Option Awards		Stock Awards	
Name		Number
of Shares
Acquired
on Exercise
(#)			Value
Realized on
Exercise
($)(1)		Number of
Shares
Acquired
on Vesting
(#)			Value
Realized on
Vesting
($)(2)	
Benno Dorer	     	165,470	(3)	     	   $	15,114,202	     	31,216	(4)	     	    $	4,581,572	
Kevin Jacobsen		—	(3)			—		2,146	(4)(5)			314,968	
Laura Stein		13,650	(3)			983,362		5,734	(4)			841,579	
Linda Rendle		—	(3)			—		2,338	(4)			343,148	
Eric Reynolds		41,925	(3)			983,362		2,867	(4)(5)			420,790	
(1)	The dollar value realized reflects the difference between the market price of the Common Stock upon exercise and the stock option exercise price.	
(2)	The dollar value realized reflects the market value of the vested shares and dividend equivalent units based on the closing price of the Common Stock on the vesting date.	
(3)	The number represents the exercise of nonqualified stock options granted in previous years under the Company’s 2005 Stock Incentive Plan.	
(4)	The number of stock awards listed represent the vesting of performance shares and dividend equivalent units at 150% of target, granted through participation in the Company's 2005 Stock Incentive Plan. The grant from the plan had a three-year performance period (fiscal years 2015 through 2018). Performance is based on the achievement of cumulative economic profit growth. On August 16, 2018, the MDCC approved the payout of this award at 150% of target and the award was settled on August 20, 2018.	
(5)	These shares have been deferred and will be distributed over 5 annual installments after separation for Mr. Jacobsen and in a single installment 3 years after vesting for Mr. Reynolds.	
Overview of Pension Benefits
Historically, pension benefits have been paid to the named executive officers under the following plans: (i) the Pension Plan, (ii) the cash balance restoration provision in the NQDC, and (iii) the SERP. Effective June 30, 2011, the
Pension Plan and the cash balance restoration provision under the NQDC were frozen. The SERP was also frozen as of June 30, 2011, with regard to pay and offsets, while still allowing age and service credits, as most recently amended in March 2018, as described in the Retirement Plans section of the CD&A.

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Compensation Discussion and Analysis
FISCAL YEAR 2019 PENSION BENEFITS TABLE
The following table sets forth each named executive officer’s pension benefits under the Company’s pension plans for fiscal year 2019.

Name	     	Plan Name	     	Number of Years
of Credited
Service
(#)(1)	     	Present Value
of Accumulated
Benefit
($)(2)	     	Payments
During Last
Fiscal Year
($)	
Benno Dorer		The Clorox Company Pension Plan(3)		14		        $	56,869		 $—	
		SERP(4)		14			3,476,005		—	
		Cash Balance Restoration(5)		14			157,121		—	
Kevin Jacobsen		The Clorox Company Pension Plan(3)		23			135,347		—	
		SERP(4)		23			—		—	
		Cash Balance Restoration(5)		23			50,393		—	
Laura Stein		The Clorox Company Pension Plan(3)		22			140,929		—	
		SERP(4)		22			5,066,447		—	
		Cash Balance Restoration(5)		22			292,667		—	
Linda Rendle		The Clorox Company Pension Plan(3)		16			51,289		—	
		SERP(4)		16			—		—	
		Cash Balance Restoration(5)		16			—		—	
Eric Reynolds		The Clorox Company Pension Plan(3)		20			100,382		—	
		SERP(4)		20			—		—	
		Cash Balance Restoration(5)		20			1,948		—	
(1)	Number of years of credited service is rounded down to the nearest whole number.	
(2)	Present value of the accumulated benefit was calculated using the following assumptions: mortality table: MILES-CGFD; discount rate: 3.40%; and age at June 30, 2019.	
(3)	The Pension Plan was frozen effective July 1, 2011. Participants keep their accumulated pay credits and receive only quarterly interest credits after that date.	
(4)	The SERP was frozen with regards to pay and offsets effective June 30, 2011. Age and service credits continue to accrue. Mr. Dorer and Ms. Stein are the only named executive officers eligible for the SERP.	
(5)	The cash balance restoration provision in the NQDC was eliminated effective July 1, 2011, when the Pension Plan was frozen. Participants keep their accumulated pay credits but no contributions were made under this provision after July 1, 2011.	
Overview of the Nonqualified Deferred Compensation Plans
Executive Retirement Plan. Our executive officers (including each of our named executive officers) are eligible for participation in the ERP. The ERP provides that the Company will make an annual contribution of 5% of an eligible participant’s base salary plus an annual incentive payment into the plan. Company contributions will vest over a three-year period and will fully vest upon the participant’s attainment of age 62 with 10 years of service with the Company (at which time the individuals are considered retirement-eligible under the ERP). An eligible participant can elect distribution in a lump sum or up to 15 annual installments upon a qualifying payment event.
Nonqualified Deferred Compensation Plan. Under the NQDC, participants, including each of our named executive officers, may voluntarily defer the receipt of up to 50% of their base salary and up to 100% of their annual incentive award. In addition, the NQDC offers a 401(k) restoration provision for those who defer at a required
level. All Company retirement contributions are made in the form of (i) a fixed 6% employer annual contribution and (ii) an employer match of up to 4% of pay into the 401(k) Plan, subject to IRC compensation limits. Contributions on eligible compensation that exceed the IRC compensation limits are contributed into a participant’s NQDC account under the 401(k) restoration provision.
Participants in the NQDC may elect to receive benefits from the NQDC either in a lump sum or up to 15 annual payments upon a qualifying payment event. Participants may choose from an array of investment crediting rates that generally mirror the investment fund options available in the 401(k) Plan. The NQDC uses the same benefit formulas, types of compensation to determine benefits, and vesting requirements as our tax-qualified 401(k) plan. The responsibility to pay benefits under the NQDC is an unfunded and unsecured obligation of the Company.
The following table provides information regarding the accounts of the named executive officers under the NQDC and ERP in fiscal year 2019.

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FISCAL YEAR 2019 NONQUALIFIED DEFERRED COMPENSATION

Name	     	Executive
Contributions
in Last FY
($)(1)	     	Registrant
Contributions
in Last FY
($)(2)	     	Aggregate
Earnings
in Last FY
($)(3)	     	Aggregate
Balance
at Last FYE
($)(4)(5)	
Benno Dorer		          $	91,784		        $	329,899		    $	251,515		$	3,791,125	
Kevin Jacobsen			68,972			68,694			43,258			855,193	
Laura Stein			—			86,874			322,627			4,943,260	
Linda Rendle			53,086			83,562			30,068			457,089	
Eric Reynolds			54,689			63,278			12,493			323,861	

(1)	Amounts represent the annual base salary and incentive award that each executive deferred during fiscal year 2019. Deferred base salary is also reported in the Summary Compensation Table – Salary. Deferred annual incentive awards are also reported in the Summary Compensation Table – Non-Equity Incentive Plan Compensation.	
(2)	Represents that portion of the Company’s 401(k) match and Company contribution of up to 10% of eligible compensation that is in excess of IRC compensation limits pursuant to the 401(k) restoration provision of the NQDC and the Company’s contribution under the ERP. These contributions are also reported in the Summary Compensation Table – All Other Compensation and are included under the caption “Nonqualified Deferred Compensation Plan” in footnote (6) to the Summary Compensation Table.	
(3)	Earnings are based on an array of investment options that generally mirror the 401(k) Plan. Earnings vary based on participant investment elections.	
(4)	Reflects aggregate balances under the restoration provision of the NQDC and any deferred base salary and annual incentive awards as of the end of fiscal year 2019.	
(5)	The executive and registrant contribution total amounts in the table below are also reported as compensation in the Summary Compensation Table in the years indicated:	

Fiscal Year	     	Benno
Dorer	     	Kevin
Jacobsen	     	Laura
Stein	     	Linda
Rendle	     	Eric
Reynolds	
2019		$	329,899		   $	68,694		$	86,874		$	83,562		    $	63,278	
2018		$	423,145		$	113,227		$	172,578		$	112,495				
2017		$	620,819					$	222,120							
Potential Payments Upon Termination or Change in Control
Payments Upon Termination
Severance Plan for Named Executive Officers. Under the terms of the Severance Plan, our named executive officers are eligible to receive benefits if their employment is terminated by the Company without cause (other than in connection with a change in control). No benefits are payable under the terms of the Severance Plan if the Company terminates the employment of the named executive officer for cause or if the named executive officer voluntarily resigns.
Regardless of the manner in which a named executive officer’s employment terminates, each named executive officer would retain the amounts he or she had earned over the course of their employment prior to the termination event, such as balances under the NQDC, vested and accrued retirement benefits, and previously vested stock options, except as outlined below under Termination for Misconduct. For further information about previously earned amounts, see the Summary Compensation Table, Outstanding Equity Awards at Fiscal 2019 Year-End Table, Option Exercises and Stock Vested Table, Pension Benefits Table, and Nonqualified Deferred Compensation Table.
Under the Severance Plan, each named executive officer agrees to return and not to use or disclose proprietary information of the Company and, for two years following any such termination, the named executive officer is also prohibited from soliciting for employment any employee of the Company.
Termination benefits under the Severance Plan for our named executive officers are as follows:
Involuntary Termination Without Cause. If the Company terminates the employment of a named executive officer (other than the CEO) without cause, the Severance Plan entitles the named executive officer to receive a lump-sum severance payment after termination equal to two times the named executive officer’s then-current base salary. In the case of the CEO, the severance amount is equal to the sum of (i) two times the CEO’s base salary and (ii) two times the CEO’s three-year average annual bonus multiplied by 75%. Under the Severance Plan, a named executive officer (other than the CEO) is also entitled to an amount equal to 75% of their Annual Incentive Plan award for the fiscal year in which he or she was terminated. The CEO is entitled to an amount equal to 100% of his Annual Incentive Plan award for the fiscal year in which he was terminated.

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Compensation Discussion and Analysis
The amount of severance paid is calculated using the actual Company Financial Performance Multiplier and assumes an Individual Performance Multiplier of 100%, prorated to the date of termination. If the named executive officer is retirement-eligible under the terms of the Annual Incentive Plan, the executive would be eligible for either the treatment under the Severance Plan or retirement treatment for purposes of the Annual Incentive Plan award payout (retirement treatment would be 100%, versus 75%, of their Annual Incentive Plan award for the fiscal year in which he or she was terminated, prorated to the date of termination). It is the MDCC’s decision as to which treatment to apply.
The Severance Plan provides that the named executive officer is entitled to continue to participate in the Company’s medical, vision, and dental insurance programs for up to two years following termination on the same terms as active employees. In addition, at the end of this coverage, a named executive officer will be eligible to participate in the Company’s medical, vision, and/or dental plans offered to former employees who retire at age 55 or older, provided the executive has completed at least 10 years of service, on the same terms as such other former employees. If eligible, this coverage will continue until the named executive officer turns age 65. Thereafter, the named executive officer may participate in the Company’s general retiree health plan as it may exist in the future, if otherwise eligible. If the named executive officer will be age 55 or older and will have completed at least 10 years of service at the end of, and including, the two-year period following termination, the named executive officer will be deemed to be age 55 and/or to have 10 years of service under any pre-65 retiree health plan as well as the SERP.
The above severance-related benefits are provided only if the named executive officer executes a general release prepared by the Company.
Termination Due to Retirement. Under the Company’s policy applicable to all employees, upon retirement the named executive officer is entitled to their salary through the last day of employment and is eligible for a pro-rata portion of the Annual Incentive Plan award for the fiscal year in which their retirement occurs. Based on the provisions of the respective plans, he or she will also be eligible to receive SERP, ERP, and other benefits under applicable Company retirement plans. In addition to the amounts that the named executive officer has earned or accrued over the course of their employment under the Company’s qualified and nonqualified plans, a named executive officer who is at least age 55 with 10 years of service or who has 20 years of service regardless of age is eligible to receive retirement-related benefits under the long-term incentive program. Stock options held for longer than six months will vest in full and remain exercisable for five years following the named executive officer’s retirement, or until the expiration date, whichever is sooner, and performance
shares will be paid out on a pro-rata basis at the end of the relevant performance period based on the actual level of performance achieved during that period.
Termination Due to Death or Disability. Under the Company’s policy applicable to all employees, if the named executive officer’s employment is terminated due to their death, the named executive officer’s beneficiary or estate is entitled to (i) the named executive officer’s salary through the date of their death, (ii) a pro-rata portion of the named executive officer’s actual Annual Incentive Plan award for the fiscal year of their death, (iii) a pro-rata portion of the named executive officer’s 6% annual contribution to the 401(k) plan for the fiscal year of their death, and (iv) benefits pursuant to the Company’s life insurance plan. Stock options and restricted stock units will vest in full, and all vested options remain exercisable for an additional year following the named executive officer’s death or until the expiration date, whichever is earlier, and all performance shares will be paid out at the end of the relevant performance period based on the actual level of performance achieved during that period.
If the named executive officer begins to receive benefits under the Company’s long-term disability plan, the Company may terminate the named executive officer’s employment at any time, in which case the named executive officer will receive their salary through the date of their termination and will also be entitled to a pro-rata portion of their actual Annual Incentive Plan award for the fiscal year of their termination. Stock options will vest in full, and all vested options will remain exercisable for an additional year following the named executive officer’s disability or until the expiration date, whichever is earlier, and all performance shares will be paid out at the end of the relevant performance period based on the actual level of performance achieved during that period.
Termination for Misconduct. The Company may terminate a named executive officer’s employment for misconduct at any time without notice. Upon the named executive officer’s termination for misconduct, the named executive officer is entitled to their salary through the date of their termination, but is not entitled to any Annual Incentive Plan award for the fiscal year in which their termination for misconduct occurs. “Misconduct” under the Severance Plan means: (i) the willful and continued neglect of significant duties or willful and continued violation of a material Company policy after having been warned in writing, (ii) a material act of dishonesty, fraud, misrepresentation, or other act of moral turpitude, (iii) gross negligence in the course of employment, (iv) the failure to obey a lawful direction of the Board or a corporate officer to whom the named executive officer reports, directly or indirectly, or (v) an action that is inconsistent with the Company’s best interests and values. All outstanding stock option and restricted stock units grants are forfeited upon a termination for

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misconduct. In addition, any retirement-related benefits a named executive officer would normally receive related to performance shares are also forfeited upon a termination for misconduct.
Voluntary Termination. A named executive officer may resign from their employment at any time. Upon the named executive officer’s voluntary resignation, the named executive officer is entitled to their salary through the date of termination, but is not entitled to any Annual Incentive Plan award for the fiscal year of termination. All unvested outstanding stock options, restricted stock units, and performance share grants are forfeited upon voluntary termination.
The Company also maintains the CIC Plan for the benefit of each of our named executive officers. Please see the Potential Payments Upon Termination or Change in Control section below for further details on the CIC Plan.
Potential Payments Upon Change in Control
Change in Control Severance Plan for Named Executive Officers. Under the CIC Plan, executives are eligible for change in control severance benefits, subject to the execution of a waiver and release, if they are terminated without cause or resign for good reason (each as defined under the CIC Plan and as further described below) during (i) the two-year period following a change in control or (ii) a period of up to one year prior to the change in control in limited circumstances where the executive’s termination is directly related to or in anticipation of a change in control.
The severance benefits under the CIC Plan include (i) a lump-sum severance payment equal to two times (or, in the case of the CEO, three times) the sum of (a) the executive’s base salary and (b) average Annual Incentive Plan award for the three completed fiscal years prior to termination, (ii) a lump-sum amount equal to the difference between the actuarial equivalent of the benefit the named executive officer would have been entitled to receive if their employment had continued until the second anniversary of the date of termination and the actuarial equivalent of the aggregate benefits paid or payable as of the date of termination under the qualified and nonqualified retirement plans, (iii) continuation of healthcare benefits for a maximum of two (or, in the case of the CEO, three) years following a severance-qualifying termination, (iv) continued financial planning services for the year of termination, (v) vesting of all outstanding equity awards granted prior to the change in control, and (vi) an amount equal to the average Annual Incentive Plan award for the three completed fiscal years preceding termination prorated for the number of days employed in the fiscal year during which termination occurred. In addition, the CIC Plan provides for an excise tax cutback such that the excise tax under Sections 280G
and 4999 of the IRC would not apply (unless the executive would receive a greater amount of severance benefits on an after-tax basis without a cutback, in which case the cutback would not apply). The CIC Plan permits the MDCC to make changes to the CIC Plan that are adverse to covered executives with 12 months’ advance notice. If a change in control of the Company occurs during that 12-month period, then such changes would not become effective. Each participant under the CIC Plan is subject to certain restrictive covenants including confidentiality and non-disparagement provisions and a non-solicitation and non-diversion of business provision during the term of their employment and for two years thereafter.
“Cause” is generally defined as (i) willful and continued failure to substantially perform duties upon written demand or (ii) willfully engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company. A termination for cause requires a vote of 75% of the Board at a meeting after notice to the executive has been given and the executive has had an opportunity to be heard.
“Good Reason” is generally defined as (i) an assignment of duties inconsistent with the executive officer’s position (including offices and reporting requirements), authority, duties, or responsibilities (other than reassignments with a substantially similar level and scope of authority, duties, responsibilities, and reporting relationships), (ii) any failure to substantially comply with any of the material provisions of compensation plans, programs, agreements, or arrangements as in effect immediately prior to the change in control, which material provisions consist of base salary, cash incentive compensation target bonus opportunity, equity compensation opportunity in the aggregate, savings and retirement benefits in the aggregate, and welfare benefits (including medical, dental, life, disability, and severance benefits) in the aggregate, (iii) relocation of principal place of employment that increases the executive officer’s commuting distance by more than 50 miles, (iv) termination of employment by the Company other than as expressly permitted by the CIC Plan, or (v) failure of a successor company to assume the CIC Plan.
Estimated Potential Payments Upon Termination or Change in Control
The following table reflects the estimated amount of compensation payable to each of the Company’s named executive officers upon termination of the named executive officer’s employment under various scenarios. The amounts exclude earned amounts such as vested or accrued benefits, other than benefits vested under the Company’s SERP. If a named executive officer is eligible for their SERP benefit as of the assumed termination date, the respective SERP benefit amount reported under the Retirement column

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Compensation Discussion and Analysis
is also included in the scenarios for Involuntary Termination Without Cause and Involuntary Termination After Change in Control on the Retirement Plan Benefits line.

The amounts shown are calculated using an assumed termination date effective as of the last business day of fiscal year 2019 (June 28, 2019) and the closing trading price of our Common Stock of $153.11 on such date. Although the calculations are intended to provide reasonable estimates of the potential compensation payable upon termination, they are based on assumptions outlined in the footnotes
of the table and may not represent the actual amount the named executive officer would receive if an eligible termination event were to occur.

The table does not include compensation or benefits provided under plans or arrangements that are generally available to all salaried employees. Amounts reflected for change in control assume that each named executive officer is involuntarily terminated by the Company without cause or voluntarily terminates for good reason within two years after a change in control.

FISCAL YEAR 2019 TERMINATION TABLE
The following table sets forth the compensation earned, paid or awarded to our named executive officers for the fiscal years ended June 30, 2019, 2018, 2017.

Name and Benefits	  	Involuntary
Termination
Without Cause	  	  	Involuntary
Termination
After Change
In Control	  	  	Retirement	  	  	Disability	  	  	  	Death		
Benno Dorer																					
Cash Payment		       $	6,854,270	(1) 		    $	10,708,540	(2) 		$	—	(3) 		$	—	(4) 		$	—	(4) 	
Stock Options			11,451,059	(16) 			11,451,059	(5) 			11,451,059	(16) 			11,451,059	(6) 			11,451,059	(6) 	
Restricted Stock			—				—				—				—				—		
Performance Shares			6,185,063	(17) 			9,183,544	(7) 			6,185,063	(17) 			9,183,544	(8) 			9,183,544	(8) 	
Retirement Plan Benefits			4,345,240	(18) 			4,891,995	(19) 			4,345,240	(18) 			3,711,112	(9) 			2,324,330	(10) 	
Health & Welfare Benefits			22,368	(11) 			33,552	(12) 			—				—				—		
Financial Planning			—				16,500	(13) 			—				—				—		
     Total Estimated Value		$	28,857,999			$	36,285,190			$	21,981,361			$	24,345,715			$	22,958,933		
Kevin Jacobsen																					
Cash Payment	  	$	1,567,500	(14) 		$	1,990,066	(15) 		$	—	(3) 		$	—	(4) 		$	—	(4) 	
Stock Options			1,447,085	(16) 			1,447,085	(5) 			1,447,085	(16) 			1,447,085	(6) 			1,447,085	(6) 	
Restricted Stock			—				—				—				—				—		
Performance Shares			702,469	(17) 			1,288,195	(7) 			702,469	(17) 			1,288,195	(8) 			1,288,195	(8) 	
Retirement Plan Benefits			—				—				—				—				—		
Health & Welfare Benefits			35,856	(11) 			35,856	(12) 			—				—				—		
Financial Planning			—				16,500	(13) 			—				—				—		
     Total Estimated Value		$	3,752,910			$	4,777,702			$	2,149,554			$	2,735,280			$	2,735,280		
Laura Stein																					
Cash Payment		$	1,728,000	(14) 		$	2,755,780	(15) 		$	—	(3) 		$	—	(4) 		$	—	(4) 	
Stock Options			2,119,988	(16) 			2,119,988	(5) 			2,119,988	(16) 			2,119,988	(6) 			2,119,988	(6) 	
Restricted Stock			—				—				—				—				—		
Performance Shares	 		1,126,300	(17) 			1,699,051	(7) 			1,126,300	(17) 			1,699,051	(8) 			1,699,051	(8) 	
Retirement Plan Benefits			6,424,460	(18) 			6,809,392	(19) 			6,424,460	(18) 			5,207,376	(9) 			2,805,214	(10) 	
Health & Welfare Benefits			13,344	(11) 			13,344	(12) 			—				—				—		
Financial Planning			—				16,500	(13) 			—				—				—		
     Total Estimated Value		$	11,412,092			$	13,414,055			$	9,670,748			$	9,026,415			$	3,819,039		

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Name and Benefits	  	Involuntary
Termination
Without Cause	  	  	Involuntary
Termination
After Change
In Control	  	  	Retirement	  	  	Disability	  	  	  	Death		
Linda Rendle																					
Cash Payment		$	1,456,000	(14) 		$	1,939,750	(15) 		$	—	(3) 		$	—	(4) 		$	—	(4) 	
Stock Options			—				640,094	(5) 			—				950,288	(6) 			950,288	(6) 	
Restricted Stock			—				511,387	(20) 			—				511,387	(20) 			511,387	(20) 	
Performance Shares			—				1,244,393	(7) 			—				1,244,393	(8) 			1,244,393	(8) 	
Retirement Plan Benefits			—				—				—				—				—		
Health & Welfare Benefits			22,332	(11) 			22,332	(12) 			—				—				—		
Financial Planning			—				16,500	(13) 			—				—				—		
     Total Estimated Value		$	1,478,332			$	4,374,456			$	—			$	2,706,069			$	2,706,069		
Eric Reynolds																					
Cash Payment		$	  1,347,500	(14)		$	  1,877,913	(15)		$	—	(3)		$	—	(4)		$	—	(4)	
Stock Options			1,093,033	(16)			1,217,285	(5)			  1,093,033	(16)			  1,217,285	(6)			  1,217,285	(6)	
Restricted Stock			—				228,134	(20)			—				228,134	(20)			228,134	(20)	
Performance Shares			630,436	(17)			1,034,271	(7)			630,436	(17)			1,034,271	(8)			1,034,271	(8)	
Retirement Plan Benefits			—				—				—				—				—		
Health & Welfare Benefits			12,396	(11)			12,396	(12)			—				—				—		
Financial Planning			—				16,500	(13)			—				—				—		
     Total Estimated Value		$	  3,083,365			$	  4,386,499			$	  1,723,469			$	  2,479,689			$	2,479,689		

(1)	This amount reflects two times Mr. Dorer’s current base salary plus two times 75% of his average Annual Incentive Plan awards from the preceding three years. In addition, the amount includes 100% of his current year target Annual Incentive Plan award, pro-rated to the date of termination.	
(2)	This amount represents three times Mr. Dorer’s current base salary, plus three times the average Annual Incentive Plan awards for the preceding three years, plus the average Annual Incentive Plan awards for the preceding three years, pro-rated to the date of termination, subject to the excise tax cut back provision in the Change in Control Severance Plan.	
(3)	Messrs. Dorer, Jacobsen and Reynolds, and Ms. Stein are retirement-eligible and thus are eligible for a pro-rata Annual Incentive Plan award upon retirement. However, all bonus-eligible employees active as of June 30, 2019 are eligible to receive an annual incentive award, so a pro-rata Annual Incentive Plan award would not be applicable as of this date as the assumed termination date is June 30, 2019. Ms. Rendle is not retirement-eligible and thus not eligible for an annual incentive award upon retirement.	
(4)	Named executive officers whose termination is the result of disability or death are eligible to receive a pro-rata Annual Incentive Plan award through the date of termination. However, all bonus-eligible employees active as of June 30, 2019 are eligible to receive an annual incentive award, so a pro-rata Annual Incentive Plan award would not be applicable since the assumed termination date is June 30, 2019.	
(5)	For Messrs. Dorer, Jacobsen and Reynolds, and Ms. Stein who are retirement-eligible, this amount represents the expected value of the accelerated vesting of all outstanding stock options, and assumes a five-year expected life, or the remaining original term, whichever is sooner. For Ms. Rendle, this amount represents the intrinsic value of the accelerated vesting of all outstanding stock options (based on the provision that non-retirement eligible executives exercise stock options within 90 days of termination), calculated as the difference between the June 28, 2019 closing Common Stock price of $153.11 and the exercise price for each option.	
(6)	For Messrs. Dorer, Jacobsen and Reynolds, and Ms. Stein who are retirement-eligible, this amount represents the expected value of the accelerated vesting of all outstanding stock options upon the named executive officer’s termination of employment due to disability or death, and assumes a five-year expected life, or the remaining original term, whichever is sooner. For Ms. Rendle, this amount represents the expected value of the accelerated vesting of all outstanding stock options (based on the provision that non-retirement eligible executives exercise stock options within one-year of death or disability), calculated as the difference between the June 28, 2019 closing Common Stock price of $153.11 and the exercise price for each option.	
(7)	Performance shares will vest based on performance through the day of the change in control. This amount assumes a pro-rated targeted payout and is valued at the closing price of our Common Stock on June 28, 2019 of $153.11.	
(8)	This amount represents the value of the accelerated vesting of performance shares upon a death or disability, assuming a target payout and valued at the closing price of our Common Stock on June 28, 2019 of $153.11. Upon a death or disability termination, the entire performance share grant will vest. The actual payout will not be determined until the end of the performance period.	
(9)	This amount represents the present value of the SERP benefit payable to the named executive officer at the time of termination due to disability.	
(10)	This amount represents the present value of the SERP benefit payable to the named executive officer’s beneficiary at the time of death.	
(11)	This amount represents the estimated Company cost of providing welfare benefits, including medical, dental, and vision, for the two-year period following termination.	
(12)	For Messrs. Jacobsen and Reynolds, and Mses. Stein and Rendle, this amount represents the estimated Company cost of providing welfare benefits, including medical, dental, and vision, for the two-year period following a qualifying termination after a change in control. For Mr. Dorer, this amount represents the estimated Company cost of providing welfare benefits, including medical, dental, and vision, for the three-year period following a qualifying termination after a change in control.	
(13)	This amount represents the cost of providing financial planning for the year of termination.	
(14)	This amount reflects two times the named executive officer’s current base salary. In addition, for Messrs. Jacobsen and Reynolds and Ms. Stein who are retirement-eligible, this amount includes 100% of their current year target Annual Incentive Plan award pro-rated to the date of termination. For Ms. Rendle, this amount includes 75% of their current year's target Annual Incentive Plan award, pro-rated to the date of termination.	

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Compensation Discussion and Analysis

(15)	This amount represents two times the named executive officer’s current base salary, plus two times the average Annual Incentive Plan awards for the preceding three years, subject to the excise tax cut back provision in the Change in Control Severance Plan. For Messrs. Jacobsen and Reynolds and Ms. Stein who are retirement-eligible, this amount also includes 100% of their current year target Annual Incentive Plan award, pro-rated to the date of termination. For Ms. Rendle, this amount includes the average Annual Incentive Plan awards for the preceding three years, pro-rated to the date of termination.	
(16)	Messrs. Dorer, Jacobsen and Reynolds and Ms. Stein are retirement-eligible and, thus, all unvested stock options held greater than six months will automatically vest upon termination. This amount represents the expected value of the accelerated vesting of the stock options, and assumes a five-year expected life, or the remaining original term, whichever is sooner.	
(17)	Messrs. Dorer, Jacobsen and Reynolds and Ms. Stein are retirement-eligible and, thus, are entitled to receive a pro-rata portion of all performance shares held at least one year at the date of termination for the September 2016 award and a pro-rata portion of all performance shares for the September 2017 and September 2018 awards, for which no holding period is required. This value represents the full vesting of eligible shares from the September 2016 grant, as with the assumed termination date of June 30, 2019 they would have completed the entire performance period and the pro-rata vesting of the eligible shares from the September 2017 and September 2018 grants, assuming a target payout and valued at the closing price of our Common Stock on June 28, 2019 of $153.11. The actual payout of the shares will not be determined until the end of the performance period. Named executive officers who are not retirement-eligible forfeit shares upon termination under these scenarios.	
(18)	This amount represents the present value of the Company SERP per the provisions of the Severance Plan for Clorox Executive Committee Members.	
(19)	This amount represents the difference between the actuarial equivalent of the benefit Mr. Dorer and Ms. Stein would have been eligible to receive if their employment had continued until the second anniversary of the date of termination or the first day of the month following their 65th birthday, if earlier, under the qualified and nonqualified retirement plans and the actuarial equivalent of their actual aggregate benefits paid or payable, if any, as of the date of termination under the qualified and nonqualified retirement plans.	
(20)	This amount represents value of the restricted stock held by Ms. Rendle and Mr. Reynolds that will vest upon change in control, death or disability.	

Fiscal Year 2019 CEO Pay Ratio
Under rules adopted by the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act), we are required to disclose the ratio of the annual total compensation of our Chair & Chief Executive Officer (CEO) to the annual total compensation of our median compensated employee. We identified our median employee utilizing data as of June 30, 2019, by examining the total cash compensation for all individuals, excluding our Chair & CEO, who were employed by us on June 30, 2019. All employees were included, whether they worked on full-time, part-time, or temporary basis. We did not make any assumptions, adjustments, or estimates with respect to total cash compensation. No exclusions were utilized during this process.
After identifying the median employee based on total cash compensation, we calculated annual total compensation for that employee using the same methodology we use for our named executive officers as set forth in the Summary Compensation Table in this proxy statement.

●	Total compensation for our median employee is $68,441.	
●	Our CEO to median employee pay ratio is 137:1.	
The pay ratio reported here is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above.
The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies, including our compensation peer group, may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

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 	Equity Compensation Plan Information	
The following table sets out the number of shares of Common Stock to be issued upon exercise of outstanding options, warrants, and rights, the weighted-average
exercise price of outstanding options, warrants, and rights, and the number of securities available for future issuance under equity compensation plans as of June 30, 2019.

		[a]		[b]		[c]	
Plan category	     	Number of securities to
be issued upon exercise
of outstanding options,
warrants, and rights
(in thousands)	     	Weighted-average
exercise price per share of
outstanding options,
warrants, and rights	     	Number of securities
remaining for future
issuance under non-
qualified stock-based
compensation programs
(excluding securities
reflected in column [a])
(in thousands)	
Equity compensation plans approved by security holders		6,722		                                       $	112		7,579	
Equity compensation plans not approved by security holders		—			—		—	
Total		6,722		$	112		7,579	
Column [a] includes the following outstanding equity-based awards (in thousands):

●	5,744 stock options	
●	537 performance shares and deferred shares	
●	200 deferred stock units for non-employee directors	
●	241 restricted stock awards	

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 	Audit Committee Matters	

 	Proposal 3:
Ratification of Independent Registered Public Accounting Firm	
The Audit Committee has the authority to appoint, retain, compensate, and oversee the Company’s independent registered public accounting firm, and the Company’s shareholders must ratify the Audit Committee’s selection and appointment. The Audit Committee has selected Ernst & Young LLP (E&Y) as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2020. E&Y has been engaged since February 15, 2003.

Board’s Recommendation
The Board unanimously recommends that shareholders vote FOR the ratification of the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2020. While we are not required by law to obtain such ratification from our shareholders, the Board believes it is good practice to do so. The Audit Committee and the Board believe that the continued retention of E&Y as the Company’s independent registered public accounting firm is in the best interests of the Company and its shareholders.
Representatives of E&Y are expected to be present at the Annual Meeting to respond to appropriate questions and to make a statement should they desire to do so.

Vote Required
The affirmative vote of a majority of the votes present in person or represented by proxy and entitled to vote at the Annual Meeting is required to ratify the appointment of E&Y. If shareholders fail to ratify the appointment of E&Y, the Audit Committee will reconsider the appointment.
The people designated in the proxy and voting instruction card will vote your shares represented by proxy FOR ratification unless you include instructions to the contrary.

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 	Audit Committee Report	
The Audit Committee assists the Board in its oversight of corporate governance by overseeing the quality and integrity of the accounting, auditing, and reporting practices of the Company, including:

●	review of reports filed by the Company on Form 10-Q and Form 10-K,	
●	oversight of the financial reporting process,	
●	assessment of the effectiveness of the Company’s internal control over financial reporting and the review of the performance of the internal audit function, and	
●	oversight of the Company’s framework and guidelines with respect to risk assessment and risk management, including the Company’s cybersecurity and information technology risks and initiatives, and disclosure controls and procedures.	
The Audit Committee operates in accordance with a written charter, which was adopted and is periodically updated by the Board. Each member of the Audit Committee is “independent,” as required by the applicable listing standards of the NYSE and the rules of the SEC.
While the Company’s management has primary responsibility for the financial statements, the reporting process and the Company’s internal control over financial reporting, the independent registered public accounting firm is responsible for performing an integrated audit of the Company’s financial statements and internal control over financial reporting in accordance with the auditing standards of the Public Company Accounting Oversight Board (the PCAOB). The Audit Committee members are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management or the Company’s independent registered public accounting firm.
The Audit Committee is responsible for the appointment, retention, compensation, and oversight of the Company’s independent registered public accounting firm, including the review of their qualifications, independence and performance, and approval of the audit fee. In this regard, the Audit Committee appointed Ernst & Young LLP (E&Y) to audit the Company’s financial statements as of and for the year ended June 30, 2019, and the effectiveness of the Company’s internal control over financial reporting as of June 30, 2019. E&Y has served as the Company’s independent registered public accounting firm since February 2003. The Audit Committee considered several factors in selecting E&Y as the Company’s independent registered public accounting firm for the year ended June 30, 2019, including the firm’s independence and internal quality controls, the overall depth of talent, their experience with the Company’s industry, and their familiarity with the
Company’s businesses and internal control over financial reporting. In determining whether to reappoint E&Y as the Company’s independent registered public accounting firm for the year ending June 30, 2020, the Audit Committee again took those factors into consideration along with its evaluation of the past performance of E&Y.
The Audit Committee has a policy that requires it to consider and approve, in advance, any audit and permissible non-audit services to be performed by the independent registered public accounting firm. Among the services provided by E&Y in fiscal year 2019, E&Y has issued reports on its review of certain corporate responsibility and sustainability metrics and information provided in the Company’s Integrated Annual Report – Executive Summary. The Audit Committee obtained from E&Y the written disclosures and the letter required by the applicable requirements of the PCAOB regarding communications with the Audit Committee concerning independence of the auditors and discussed with the auditors their independence. In evaluating E&Y’s independence, the Audit Committee considered whether the firm’s provision of any non-audit services impaired or compromised the firm’s independence and concluded that they did not.
Further, in conjunction with the mandated rotation of the auditing firm’s coordinating partner, the Audit Committee and its chairperson oversee and are directly involved in the selection of E&Y’s new coordinating partner. The Audit Committee periodically considers rotation of the registered independent public accounting firm.
In fulfilling its oversight responsibilities, the Audit Committee meets regularly with management and E&Y to discuss, prior to their release to the public, the Company’s financial statements and earnings releases and, as appropriate, other Company public communications containing Company financial information or performance measures. The Audit Committee’s meetings with the independent registered public accounting firm, which are both with and without management present, include discussions about the results of the independent registered public accounting firm’s examinations and evaluations of the quality of the Company’s financial statements and the Company’s internal control over financial reporting.
In this regard, the Audit Committee discussed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2019. This review included a discussion of the quality and the acceptability of the Company’s financial reporting and system of internal controls, including the clarity of disclosures in the financial statements, reasonableness of significant contingency accruals, reserves, allowances

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Audit Committee Report
and other judgments, critical accounting policies and estimates, and risk assessment. In addition, the Audit Committee reviewed and discussed with the Company’s independent registered public accounting firm the audited financial statements of the Company for the fiscal year ended June 30, 2019, the independent registered public accounting firm’s judgments as to the quality and acceptability of the Company’s financial reporting, E&Y’s discussion about critical audit matters in its report on the audited financial statements for the fiscal year ended June 30, 2019, the Company’s critical accounting policies and estimates, the effectiveness of the Company’s internal control over financial reporting and such other matters as are required to be discussed by the applicable requirements of the PCAOB and SEC.
In addition to the regular meetings with the independent registered public accounting firm noted above, the Audit Committee holds private sessions with each of the Company’s General Counsel, Chief Financial Officer, and Vice President of Internal Audit.
Based upon the review and discussions referred to above, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019, for filing with the SEC.

THE AUDIT COMMITTEE as of June 30, 2019
Carolyn Ticknor, Chair
Amy Banse
A.D. David Mackay
Matthew J. Shattock
Russell J. Weiner
Christopher J. Williams

Fees of the Independent Registered Public Accounting Firm
The table below includes fees related to fiscal years 2019 and 2018 of the Company’s independent registered public accounting firm, Ernst & Young LLP:

	2019	2018	
Audit Fees(1)	$	5,842,000	$	5,870,000	
Audit-Related Fees(2)		130,000		129,000	
Tax Fees(3)		117,000		156,000	
All Other Fees(4)		5,000		—	
Total	$	6,094,000	$	6,155,000	

(1)	Consists of fees for professional services rendered for the audit of the Company’s annual financial statements and internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, included in the Company’s Annual Reports on Form 10-K for each of the fiscal years ended June 30, 2019 and 2018, and for review of the financial statements included in the Company’s Quarterly Reports on Form 10-Q during those fiscal years.	
(2)	Consists of fees for assurance and related services (including the Company’s employee benefit plans) not included in the Audit Fees listed above.	
(3)	Consists of fees for tax compliance, tax  advice,  and tax planning for the fiscal years ended June 30, 2019 and 2018. These services included tax return preparation and review services for foreign subsidiaries and affiliates and advisory services on tax matters.	
(4)	Consists of fees for all other services not included in the three categories set forth above, primarily related to fees for publications and subscriptions to online content.	
The Audit Committee has established a policy that requires it to approve all services provided by the Company’s independent registered public accounting firm before services are provided. The Audit Committee has pre-approved the engagement of the independent registered public accounting firm for audit services, and certain specified audit-related services and tax services within defined limits. The Audit Committee has not pre-approved engagement of the independent registered public accounting firm for any other non-audit services.

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 	Additional Items to be Voted On	

 	Proposal 4:
Amendment to the Company’s Restated Certificate of Incorporation to Eliminate the Supermajority Voting Provision	

Article Six of the Company’s Restated Certificate of Incorporation (Certificate of Incorporation) currently requires that certain transactions between the Company and a beneficial owner of more than 5% of the Company’s Common Stock (Interested Stockholder) be approved by a vote of 80% of the outstanding shares of Common Stock at the time of the transaction unless (a) the transaction is approved by the Board or (b) the transaction meets certain pricing requirements.
This “interested stockholder” business combination provision, which is the only provision in the Company’s Certificate of Incorporation that requires approval of more than a majority of outstanding shares of Common Stock, requires a vote of 80% of the outstanding shares of Common Stock to be removed from the Company’s Certificate of Incorporation. This supermajority provision is a legacy provision that was designed to protect minority shareholders under circumstances in which a party would seek to acquire the Company through the open market accumulation of shares.
This year, the Company is again submitting a proposal to eliminate the supermajority provisions in the Certificate of Incorporation by deleting in its entirety the text of Article Six. The Company previously submitted an identical proposal for shareholder approval at the Company’s 2018 Annual Meeting of Shareholders. However, the proposal was not approved by the Company’s shareholders as it did not receive the requisite number of votes. After revisiting this topic again this year, the Board continues to believe that this supermajority provision does not substantively enhance the Company’s defense profile. The Board also continues to be mindful of the fact that during the Company’s previous
shareholder engagements, shareholders have expressed disapproval of the Company’s supermajority provisions for “interested stockholder” business combinations, as well as for similar provisions at other companies. The Board also notes that the majority of S&P 500 Companies have, over the past several years, eliminated such supermajority provisions for business combinations.
Further, the Company continues to be subject to and benefit from Section 203 of the Delaware General Corporation Law, which provides that once a stockholder reaches a 15% ownership threshold, such stockholder is prohibited for a period of three years from consummating a broad range of business combination transactions with the Company, unless (a) the business combination is approved by the Board, (b) the business combination is approved by the holders of 2/3 or more of the outstanding voting stock not held by such stockholder, or (c) such stockholder is able to obtain at least 85% of the outstanding shares in one step. Though there are some differences between the Company’s supermajority provision and Section 203, the Board believes that Section 203 provides the Company appropriate protection from unfair acquisition attempts.
Accordingly, the Board is again asking the Company’s shareholders to vote in support of this proposal.
The full text of the proposed amendment to the Certificate of Incorporation, marked to show the proposed deletion of Article Six, is set forth in Appendix A to this Proxy Statement. The general description of the Certificate of Incorporation and the proposed amendment set forth herein are qualified in their entirety by reference to the text of Appendix A.

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Additional Items to be Voted On

Board’s Recommendation
The Board unanimously recommends a vote FOR this proposal to amend the Company’s Certificate of Incorporation to eliminate this supermajority voting provision for the reasons stated above. If the shareholders do not approve the amendment to the Company’s Certificate of Incorporation eliminating this
supermajority voting provision, the provision will continue to remain in existence, and certain Interested Stockholder business combinations will continue to require the approval of 80% of the outstanding shares of Common Stock at the time of the transaction.

Vote Required
The affirmative vote of at least 80% of the then-outstanding voting stock, voting together as a single class, is required to approve this proposal.
The people designated in the proxy and voting instruction card will vote your shares FOR this proposal unless you include instructions to the contrary.

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Annual Meeting Location
4900 Johnson Drive
Pleasanton, CA 94588

 	Information About the Annual Meeting	
This proxy statement is furnished in connection with the solicitation of proxies by the Board of The Clorox Company (Clorox or the Company), a Delaware corporation, for use at the Annual Meeting, to be held at 9:00 a.m. Pacific time on Wednesday, November 20, 2019, at the Company’s Pleasanton, CA offices, 4900 Johnson Drive, Pleasanton, CA 94588.
Please refer to the Attending the Annual Meeting section of this proxy statement for more information about procedures for attending the Annual Meeting.

Delivery of Proxy Materials
Providing access to proxy materials via the Internet allows us to communicate with our shareholders in the way that is most efficient and convenient for them, and supports us in our efforts to conserve natural resources and reduces the costs of printing and distributing the proxy materials. On or about October , 2019, we began mailing a Notice of Internet Availability of Proxy Materials (the Notice) to our shareholders (other than those shareholders who previously requested electronic or paper delivery of communications from us), informing them that our Proxy Statement, Integrated Annual Report – Executive Summary, and voting
instructions are available on the Internet as of the same date. As a shareholder, you may access these materials and vote your shares via the Internet or by telephone; you may also request that a printed copy of the proxy materials be sent to you. You will not receive a printed copy of the proxy materials unless you request one in the manner described in the Notice.
The Notice of Annual Meeting, Proxy Statement, and Integrated Annual Report – Executive Summary are available at www.edocumentview.com/CLX.

Voting Information
Who Is Entitled to Vote
Only shareholders of record at the close of business on September 23, 2019 (the Record Date) are entitled to vote at the Annual Meeting. On that date, there were       shares of Common Stock outstanding and entitled to vote. Holders of Common Stock as of the close of business on the Record Date are entitled to one vote per share on each matter submitted to a vote of shareholders.
How to Vote Before the Annual Meeting
Even if you plan to attend the Annual Meeting, we strongly urge you to vote in advance. You may vote via the Internet or by telephone by following the instructions on your proxy card, voting instruction form or Notice or (if you received a printed copy of the proxy materials) by completing and returning a proxy card or voting instruction form by mail. If you are the beneficial owner of shares held in “street name” (that is, you hold your shares through a broker, bank or other holder of record), you must follow that nominee’s instructions to vote.

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Information About the Annual Meeting
Please note that if you received a Notice, you cannot vote your shares by filling out and returning the Notice. Instead, you should follow the instructions contained in the Notice on how to cast your vote.
How to Vote in Person at the Annual Meeting
You may vote your shares at the Annual Meeting if you attend in person and use a written ballot. However, if your shares are held in the name of a broker, bank, or other nominee, you must obtain and bring with you to the Annual Meeting a legal proxy from that nominee granting you authority to vote your shares directly at the Annual Meeting. If you vote by proxy and also attend the Annual Meeting, you do not need to vote again at the Annual Meeting unless you wish to change your vote.
Voting Shares Held in the Clorox 401(k) Plan
If you are a participant in our 401(k) plan, you will receive a voting instruction card to direct Mercer Trust Company, as trustee of our 401(k) plan, how to vote the shares of our Common Stock attributable to your individual account. Mercer Trust Company will vote shares as instructed by participants prior to 11:59 p.m. Eastern time on November 20, 2019. If you do not provide voting directions to Mercer Trust Company by that time, the shares attributable to your account will not be voted.
How to Revoke Your Proxy or Change Your Vote
If you are a shareholder of record, you may change your vote or revoke your proxy at any time before it is exercised at the Annual Meeting by taking any of the following actions:

●	submitting written notice of revocation to the Corporate Secretary of the Company;	
●	voting again electronically by telephone or via the Internet or by submitting another proxy card with a later date; or	
●	voting in person at the Annual Meeting.	
If you are the beneficial owner of shares held in “street name,” you must follow the instructions of your bank, broker or other nominee to revoke your voting instructions.
Effect of Not Providing Voting Instructions to Your Broker
If you are the beneficial owner of shares held in “street name,” you have the right to direct your bank or broker how to vote your shares, and it is required to vote those shares in accordance with your instructions. Under applicable NYSE rules, if you do not give instructions to your bank or brokerage firm, it will have discretion to vote your shares on “routine” matters, but it will not be permitted to vote your shares on “non-routine” matters. In the case of a non-routine matter, your shares will be considered “broker non-votes” on that proposal.
Proposal 3 (Ratification of Independent Registered Public Accounting Firm) is the only routine matter on the agenda at this year’s Annual Meeting. Thus, the broker is entitled to vote your shares on Proposal 3 even if you do not provide voting instructions to your broker. The broker is not entitled to vote your shares on Proposal 1, 2, or 4 without your instructions.
Quorum
We must have a “quorum” to conduct the Annual Meeting. A quorum is a majority of the outstanding shares of Common Stock entitled to vote at the meeting, present in person or by proxy. Abstentions and broker non-votes (described above) will be counted for the purpose of determining a quorum.
Votes Required; Effect of Abstentions and Broker Non-Votes
Proposal 1 (Election of Directors). A director nominee will be elected if he or she receives a majority of the votes cast in person or represented by proxy. A majority of the votes cast means that the number of shares voted FOR a director must exceed the number of shares voted AGAINST that director. An abstention or a broker non-vote on Proposal 1 will not have any effect on the election of directors and will not be counted in determining the number of votes cast. Your broker is not entitled to vote your shares on Proposal 1 unless you provide voting instructions.
Proposals 2 and 3. Approval of each of Proposals 2 and 3 requires the affirmative vote of a majority of the votes present in person or represented by proxy and entitled to vote at the Annual Meeting. Abstentions will have the same effect as a vote against the proposal. Broker non-votes will have no effect and will not be counted, with respect to Proposal 2. There should be no broker non-votes with respect to Proposal 3, since brokers have discretionary voting authority with respect to this proposal.

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Proposal 4. Approval of Proposal 4 requires the affirmative vote of 80% of the then outstanding voting stock, voting together as a single class. Abstentions and broker non-votes will have the same effect as a vote against the proposal.
Board’s Recommendations
The Board recommends that you vote:

●	FOR the election of each of the eleven nominees for director named in this proxy statement (Proposal 1);	
●	FOR the proposal to approve (on an advisory basis) the compensation of the Company’s named executive officers (Proposal 2);	
●	FOR the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2020 (Proposal 3); and	
●	FOR the amendment to the Company’s charter to eliminate the supermajority provision (Proposal 4).	
Other Matters
Management of the Company is not aware of any matters other than those described in this proxy statement that may be presented for action at the Annual Meeting. If any other matters are properly presented at the Annual Meeting for consideration, the proxy holders will have discretion to vote for you on those matters.
Counting Votes; Vote Results
Votes will be counted by Computershare Trust Company, N.A., our inspector of election appointed for the Annual Meeting. We will report final results in a filing with the SEC on Form 8-K, which will be filed within four business days following the Annual Meeting.

Form 10-K, Financial Statements, and Integrated Annual Report – Executive Summary
The following portions of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019, are attached as Appendix B to this proxy statement: Management’s Discussion and Analysis of Financial Condition and Results of Operations; Management’s Report on Internal Control over Financial Reporting; Report of Independent Registered Public Accounting Firm; Consolidated Financial Statements; Valuation and Qualifying Accounts and Reserves; and Reconciliation of Economic Profit. The Company’s Form 10-K has been
filed with the SEC and posted on the Company’s website and a copy may be obtained, without charge, by calling Clorox Stockholder Direct at 888-CLX-NYSE (259-6973) toll-free, 24 hours a day, seven days a week, or by contacting The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888. The 2019 Integrated Annual Report – Executive Summary is available with the Proxy Statement at www.edocumentview.com/CLX.

Solicitation of Proxies
We will pay for the entire cost of soliciting proxies on behalf of the Company. We will also reimburse brokerage firms, banks, and other agents for the cost of forwarding the Company’s proxy materials to beneficial owners. Our directors and employees may also solicit proxies in person, by telephone, via the Internet, or by other means of communication, for which they will not be paid any
additional compensation. We have retained Innisfree M&A Incorporated (Innisfree) to assist in soliciting proxies for the Annual Meeting at an estimated cost of $50,000 plus out-of-pocket expenses and have agreed to indemnify Innisfree against certain liabilities arising out of or in connection with their engagement.

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Information About the Annual Meeting

Shareholder Proposals and Director Nominations for the 2020 Annual Meeting
Shareholder Proposals for Inclusion in the Proxy Statement for the 2020 Annual Meeting
In the event that a shareholder wishes to have a proposal considered for presentation at the 2020 Annual Meeting and included in the Company’s proxy statement and form of proxy used in connection with such meeting pursuant to Exchange Act Rule 14a-8, the proposal must be received by the Company’s Corporate Secretary no later than the close of business on                      , 2020. Any such proposal must comply with the requirements of Rule 14a-8.
Director Nominations for Inclusion in the Proxy Statement for the 2020 Annual Meeting
The Board has adopted proxy access, which allows a shareholder or group of up to 20 shareholders who have owned at least 3% of the Company’s Common Stock for at least three years to submit director nominees (up to 20% of the Board) for inclusion in the Company’s proxy materials if the shareholder or group provides timely written notice of such nomination and the shareholder or group, and the nominee(s) satisfy the requirements specified in the Company’s Bylaws. To be timely for inclusion in the Company’s proxy materials, notice must be received by the Corporate Secretary at the principal executive offices of the Company no earlier than the close of business on                      , 2020, and no later than the close of business on                       , 2020. The notice must contain the information required by the Company’s Bylaws, and the shareholder or group and its nominee(s) must comply with the information and other requirements in our Bylaws relating to the inclusion of shareholder nominees in the Company’s proxy materials.
Other Proposals and Director Nominations for Presentation at the 2020 Annual Meeting
Our Bylaws also establish an advance notice procedure for shareholders who wish to present a proposal, including the nomination of directors, before an annual meeting of shareholders, but do not intend for the proposal to be included in our proxy statement. Under our Bylaws, if a shareholder, rather than seeking to include a proposal or director nomination in the proxy statement as discussed above, seeks to nominate a director or propose other business for consideration at that meeting, notice must be received by the Corporate Secretary at the principal executive offices of the Company not later than the close of business on the 90th day or earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting. To be timely for the 2020 Annual Meeting, the notice must be received by the Corporate Secretary on any date beginning no earlier than the close of business on                      , 2020, and ending no later than the close of business on                      , 2020. However, in the event that the date of the annual meeting is advanced by more than 30 days, or delayed by more than 60 days from such anniversary date, notice by the shareholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. The notice must contain the information required by the Company’s Bylaws. If a shareholder does not meet these deadlines, or does not satisfy the requirements of Rule 14a-4 of the Exchange Act, the persons named as proxies will be allowed to use their discretionary voting authority when and if the matter is raised at the annual meeting.
All notices of proposals or nominations, as applicable, must be addressed to The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.

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Eliminating Duplicative Proxy Materials
A single Notice of Annual Meeting and Proxy Statement or Notice of Internet Availability of Proxy Materials will be delivered to shareholders who share an address, unless otherwise requested. This procedure reduces printing and mailing costs. If you share an address with another shareholder, have received only one set of proxy materials and wish to receive a separate copy, or if you are currently receiving multiple copies of the proxy materials at the same address and wish to receive a single copy in the future, you may call us at Clorox Stockholder Direct at 888-CLX-NYSE (259-6973) toll-free, 24 hours a day, seven days a week, or write to us at The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.
If you are a beneficial owner (i.e., your shares are held in the name of a bank, broker, or other holder of record), the bank, broker, or other holder of record may deliver only one copy of the proxy materials to shareholders who have the same address unless the bank, broker, or other holder of record has received contrary instructions from one or more of the shareholders. If you wish to receive a separate copy of the proxy materials, now or in the future, you may contact us at the address or telephone number above, and we will promptly deliver a separate copy. Beneficial owners sharing an address who are currently receiving multiple copies of the proxy materials and wish to receive a single copy in the future should contact their bank, broker, or other holder of record to request that only a single copy be delivered to all shareholders at the shared address in the future.

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 	Attending the Annual Meeting	

The Annual Meeting will be held on Wednesday, November 20, 2019, at 9:00 a.m. Pacific time, at the Company’s Pleasanton, CA, offices, 4900 Johnson Drive, Pleasanton, CA 94588. Check-in for the Annual Meeting begins promptly at 8:30 a.m. To attend the Annual Meeting, you must be a shareholder of the Company as of the close of business on the Record Date and provide proof that you owned Clorox Common Stock on the Record Date or hold a legal proxy from a Record Date shareholder. Please see the more detailed information below. Admission will be on a first-come, first-served basis, and seating is limited. Even if you plan to attend the Annual Meeting, we strongly urge you to vote in advance by proxy.
In order to attend the Annual Meeting in-person, you must provide the following items:

●	A current, government-issued photo identification (such as a driver’s license or passport).	
●	Proof that you owned Clorox Common Stock on the Record Date (see additional information below).	
●	A legal proxy from a Record Date shareholder, if you are not a Record Date shareholder.	
With respect to proof that you owned Clorox Common Stock on the Record Date:

●	If you hold your shares with Clorox’s transfer agent, Computershare Trust Company, N.A., your ownership of Clorox Common Stock as of the Record Date will be verified through reports provided by Computershare prior to admittance to the meeting.	
●	If you hold your shares with a broker, trustee, bank, or nominee, you must provide proof of beneficial ownership as of the Record Date, such as a brokerage account statement showing that you owned Clorox Common Stock for the statement period immediately prior to the Record Date, a copy of your Notice of Internet Availability of Proxy Materials, a copy of your proxy and voting instruction card, a letter or legal proxy provided by your broker, trust, bank, or nominee, or other similar evidence.	
Please note that you may not use cameras, recording equipment, and other electronic devices during the meeting, and briefcases, purses, packages, etc., may be subject to inspection as you enter the meeting. We regret any inconvenience this may cause you.

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 	Appendix A	
PROPOSED AMENDMENT TO THE COMPANY’S RESTATED CERTIFICATE OF INCORPORATION TO
ELIMINATE THE SUPERMAJORITY VOTING PROVISION
Set forth below is the text of Article Six of the Company’s Restated Certificate of Incorporation. Proposal 4 submitted for the consideration of stockholders would amend the Certificate to delete Article Six in its entirety (the deletion is indicated in blacklining) and replace the deleted text with “[Reserved]”:
ARTICLE SIX
Part I
Vote Required For Certain Business Combinations
A. In addition to any affirmative vote required by law or this Restated Certificate of Incorporation, and except as otherwise expressly provided in Part II of this Article Six, the following transactions:

(i)     	any merger or consolidation of this corporation or any Subsidiary (as hereinafter defined) into or with	
 		
	(a)   	any Interested Stockholder (as hereinafter defined); or	
		 	
	(b)   	any other corporation (whether or not it is an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or	
 		
(ii)    	any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of this corporation or any Subsidiary having an aggregate Fair Market Value (as hereinafter defined) of more than ten percent (10%) of the Fair Market Value of the consolidated total assets of this corporation; or	
 		
(iii)   	the issuance or transfer by this corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of this corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property having an aggregate Fair Market Value of more than ten percent (10%) of the Fair Market Value of the consolidated total assets of this corporation; or	
 		
(iv)   	the adoption of any plan or proposal for the liquidation of this corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of any Interested Stockholder; or	
 		
(v)   	any reclassification of this corporation’s securities (including any reverse stock split), or recapitalization of this corporation, or any merger or consolidation of this corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of this corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder;	
shall require the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the then outstanding shares of stock of this corporation entitled to vote regularly in the election of directors (the “Voting Stock”) voting as a single class (it being understood that for purposes of this Article Six, each share of the Voting Stock other than Common Stock shall have the number of votes granted to it pursuant to Article Four of this Restated Certificate of Incorporation). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise.
B. The term “Business Combination” as used in this Article Six shall mean any transaction which is referred to in any one or more of clauses (i) through (v) of paragraph A of Part I.

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Part II
When Higher Vote Is Not Required
The provisions of Part I of this Article Six shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by law and any other provision of this Restated Certificate of Incorporation, if all of the conditions specified in either of the following paragraphs A and B are met:
A. The Business Combination shall have been approved by a majority of the Disinterested Directors (as hereinafter defined).
B. All of the following conditions shall have been met:

(i)    	The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of Common Stock in such Business Combination shall be at least equal to the higher of the following:	
 	       		
	(a)   	(if applicable) the highest per share price paid by the Interested Stockholder for any shares of Common Stock acquired by it (1) within the two year period immediately prior to the first public announcement of the proposal of the Business Combination (the “Announcement Date”) or (2) in the transaction in which it became an Interested Stockholder, whichever is higher; and	
 			
	(b)   	the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (such latter date is referred to in this Article Six as the “Determination Date”), whichever is higher.	
 			
(ii)   	The aggregate amount of the cash and the Fair Market Value on the date of the consummation of the Business Combination of consideration other than cash to be received per share by the holders of shares of any other class of outstanding Voting Stock shall be at least equal to the highest of the following (it being intended that the requirements of this paragraph B (ii) shall be required to be met with respect to every class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock):	
 			
	(a)   	(if applicable) the highest per share price paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it (1) within the two-year period immediately prior to the Announcement Date or (2) in the transaction in which it became an Interested Stockholder, whichever is higher;	
	 		
	(b)   	(if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of this corporation; or	
 	 		
	(c)   	the Fair Market Value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher.	
 			
(iii)   	The consideration to be received by holders of a particular class of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interested Stockholder has previously paid for shares of such class of Voting Stock. If the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration for such class of Voting Stock shall be either cash or the form used to acquire the largest number of shares of such class of Voting Stock previously acquired by it. The price determined in accordance with paragraphs B(i) and B(ii) shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event.	

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Appendix A

(iv)   	After such Interested Stockholder has become an Interested Stockholder except as approved by a majority of the Disinterested Directors, there shall have been:	
	 		
	(a)   	no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on the outstanding Preferred Stock, if any; and	
 			
	(b)   	no reduction in the effective annual rate of dividends paid on the Common Stock.	
	 		
(v)    	After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the corporation, whether in anticipation of or in connection with such Business Combination or otherwise.	
Part III
Certain Definitions
For the purpose of this Article Six:
A. A “person” shall mean any individual, firm, corporation or other entity.
B. “Interested Stockholder” shall mean any person (other than this corporation, any Subsidiary or any compensation plan of this corporation) who or which:

(i)    	is the beneficial owner, directly or indirectly, of more than 5% of the voting power of the outstanding Voting Stock; or	
 		
(ii)   	is an Affiliate of this corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of more than five percent (5%) of the voting power of the then outstanding Voting Stock; or	
 		
(iii)   	is an assignee of or has otherwise acquired or succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.	
C. A person shall be a “Beneficial Owner” of any Voting Stock:

(i)    	which such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns, directly or indirectly; or	
 	       		
(ii)    	which such person or any of its Affiliates or Associates has:	
 			
	(a)   	the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or	
	 		
	(b)   	the right to vote pursuant to any agreement, arrangement or understanding; or	
 			
(iii)   	which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock.	

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D. For the purpose of determining whether a person is an Interested Stockholder pursuant to paragraph B of this Part III, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of paragraph C of this Part III but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
E. “Affiliate” or “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on March 1, 1984.
F. “Subsidiary” means any corporation of which a majority of any class of equity securities is owned, directly or indirectly, by this corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in paragraph B of this Part III, the term “Subsidiary” shall mean only a corporation of which a majority of each class of equity securities is owned, directly or indirectly, by this corporation.
G. “Disinterested Director” means any member of the board of directors of this corporation (the “Board”) who is unaffiliated with the Interested Stockholder by whom or on whose behalf, directly or indirectly, the Business Combination is proposed or was a member of the Board prior to the time that such Interested Stockholder became an Interested Stockholder, and any successor of a Disinterested Director who is unaffiliated with such Interested Stockholder and is recommended to succeed a Disinterested Director by a majority of Disinterested Directors then on the Board.
H. “Fair Market Value” means:

(i)    	In the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock as reported in the principal consolidated transaction reporting system for securities listed or admitted to trading on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange, registered under the Securities Exchange Act of 1934 on which stock is listed, or, if such stock is not listed on such an exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period immediately preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotation System or any system then in use, and	
 		
(ii)   	in the case of property other than cash or stock valued under (i) above, the fair market value of such property on the date in question as determined in good faith by a majority of the Disinterested Directors.	
I. In the event of any Business Combination in which this corporation is the surviving corporation, the phrase “consideration other than cash to be received” as used in clauses (i) and (ii) of paragraph B of Part II of this Article Six shall include the Fair Market Value of the shares of Common Stock and/or the shares of any other class of outstanding Voting Stock retained by the holders of such shares.
Part IV
Powers of The Board of Directors
A majority of the Disinterested Directors of this corporation shall have the power and duty to determine for the purposes of this Article Six, on the basis of information known to them after reasonable inquiry:
A. whether a person is an Interested Stockholder;
B. the number of shares of Voting Stock beneficially owned by any person;
C. whether a person is an Affiliate or Association of another; and
D. whether the assets which are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by this corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of more than ten percent (10%) of the Fair Market Value of the consolidated total assets of this corporation.

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Part V
Fiduciary Obligations
Nothing contained in this Article Six shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law.
Part VI
Amendment Or Repeal
The provisions set forth in this Article Six may not be amended or repealed in any respect, unless such action is approved by the affirmative vote of the holders of not less than eighty percent (80%) of the then outstanding Voting Stock, voting as a single class.

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 	Appendix B	
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 The Clorox Company
 (Dollars in millions, except share and per share data)
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of The Clorox Company’s (the Company or Clorox) financial statements with a narrative from the perspective of management on the Company’s financial condition, results of operations, liquidity and certain other factors that may affect future results. In certain instances, parenthetical references are made to relevant sections of the Notes to Consolidated Financial Statements to direct the reader to a further detailed discussion. This section should be read in conjunction with the Consolidated Financial Statements and Supplementary Data included in this Annual Report on Form 10-K.
The following sections are included herein:

●	Executive Overview	
●	Results of Operations	
●	Financial Position and Liquidity	
●	Contingencies	
●	Quantitative and Qualitative Disclosures about Market Risk	
●	Recently Issued Accounting Standards	
●	Critical Accounting Policies and Estimates	
●	Summary of Non-GAAP Financial Measures	
EXECUTIVE OVERVIEW
Clorox is a leading multinational manufacturer and marketer of consumer and professional products with fiscal year 2019 net sales of $6,214 and approximately 8,800 employees worldwide as of June 30, 2019. Clorox sells its products primarily through mass retailers, grocery outlets, warehouse clubs, dollar stores, home hardware centers, drug, pet and military stores, third-party and owned e-commerce channels, and distributors. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach and cleaning products, Pine-Sol® cleaners, Liquid-Plumr® clog removers, Poett® home care products, Fresh Step® cat litter, Glad® bags, wraps and containers, Kingsford® charcoal, Hidden Valley® dressings, Brita® water-filtration products, Burt’s Bees® natural personal care products, RenewLife® digestive health products, and Rainbow Light®, Natural VitalityTM and NeoCell® dietary supplements. The Company also markets industry-leading products and technologies for professional customers, including those sold under the CloroxProTM and the Clorox Healthcare® brand names. The Company has operations in more than 25 countries or territories and sells its products in more than 100 markets.
The Company primarily markets its leading brands in midsized categories considered to be financially attractive. Most of the Company’s products compete with other nationally advertised brands within each category and with “private label” brands.
The Company operates through strategic business units (SBUs) that are aggregated into the following four reportable segments based on the economics and nature of the products sold:

●	Cleaning consists of laundry, home care and professional products marketed and sold in the United States. Products within this segment include laundry additives, such as bleach products under the Clorox® brand and Clorox 2® stain fighter and color booster; home care products, primarily under the Clorox®, Formula 409®, Liquid-Plumr®, Pine-Sol®, S.O.S® and Tilex® brands; naturally derived products under the Green Works® brand; and professional cleaning, disinfecting and food service products under the CloroxProTM, Dispatch®, Clorox Healthcare®, Hidden Valley® and KC Masterpiece® brands.	
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●	Household consists of charcoal, bags, wraps and containers, cat litter, and digestive health products marketed and sold in the United States. Products within this segment include charcoal products under the Kingsford® and Match Light® brands; bags, wraps and containers under the Glad® brand; cat litter products under the Fresh Step®, Scoop Away® and Ever Clean® brands; and digestive health products under the RenewLife® brand.	
●	Lifestyle consists of food products, water-filtration systems and filters, natural personal care products, and dietary supplements marketed and sold mainly in the United States. Products within this segment include dressings and sauces, primarily under the Hidden Valley®, KC Masterpiece®, Kingsford® and Soy Vay® brands; water-filtration systems and filters under the Brita® brand; natural personal care products under the Burt’s Bees® brand; and dietary supplements under the Rainbow Light®, Natural VitalityTM and NeoCell® brands.	
●	International consists of products sold outside the United States. Products within this segment include laundry; home care; water-filtration systems and filters; digestive health products; charcoal; cat litter products; food products; bags, wraps and containers; natural personal care products; and professional cleaning and disinfecting products primarily under the Clorox®, Glad®, PinoLuz®, Ayudin®, Limpido®, Clorinda®, Poett®, Mistolin®, Lestoil®, Bon Bril®, Brita®, Green Works®, Pine-Sol®, Agua Jane®, Chux®, RenewLife®, Kingsford®, Fresh Step®, Scoop Away®, Ever Clean®, KC Masterpiece®, Hidden Valley®, Burt’s Bees®, CloroxProTM, and Clorox Healthcare® brands.	
Non-GAAP Financial Measures
This Executive Overview, the succeeding sections of MD&A and Exhibit 99.2 may include certain financial measures that are not defined by accounting principles generally accepted in the United States of America (U.S. GAAP). These measures, which are referred to as non-GAAP measures, are listed below:

●	Free cash flow and free cash flow as a percentage of net sales. Free cash flow is calculated as net cash provided by continuing operations less capital expenditures.	
●	Earnings from continuing operations before interest and taxes (EBIT) margin (the ratio of EBIT to net sales)	
●	Earnings from continuing operations before interest, taxes, depreciation and amortization and non-cash asset impairment charges (Consolidated EBITDA, as defined in our Credit Agreement) to interest expense ratio (Interest Coverage ratio)	
●	Economic profit (EP) is calculated as earnings from continuing operations before income taxes, excluding non-cash U.S. GAAP restructuring and intangible asset impairment charges, and interest expense; less income taxes (calculated utilizing the Company’s effective tax rate), and less a capital charge (calculated as average capital employed multiplied by a cost of capital percentage rate).	
●	Organic sales growth is defined as net sales growth excluding the effect of foreign exchange rate changes and any acquisitions and divestitures.	
For a discussion of these measures and the reasons management believes they are useful to investors, refer to “Summary of Non-GAAP Financial Measures” below. To the extent applicable, this MD&A and Exhibit 99.2 include reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.
Fiscal Year 2019 Financial Highlights
A detailed discussion of strategic goals, key initiatives and results of operations is included below. Key fiscal year 2019 financial results are summarized as follows:

●	The Company’s fiscal year 2019 net sales increased by 1% to $6,214 in fiscal year 2019 from $6,124 in fiscal year 2018, reflecting 3 points of net benefit from the Nutranext acquisition and Aplicare divestiture, offset by the negative 3-point impact from unfavorable foreign currency exchange rates. Fiscal-year 2019 sales also included the benefit of pricing net of trade spending.	

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●	Gross margin increased by 20 basis points to 43.9% in fiscal year 2019 from 43.7% in fiscal year 2018, reflecting the benefit of price increases and cost savings, partially offset by higher manufacturing and logistics costs and unfavorable commodity costs.
 	
●	The Company reported earnings from continuing operations of $820 in fiscal year 2019, compared to $823 in fiscal year 2018. The Company reported earnings from continuing operations before income taxes of $1,024 in fiscal year 2019, compared to $1,054 in fiscal year 2018.
 	
●	The Company delivered diluted net earnings per share (EPS) from continuing operations in fiscal year 2019 of $6.32, an increase of approximately 1%, or $0.06, from fiscal year 2018 diluted net EPS of $6.26. The increase was mainly driven by a lower effective tax rate, primarily from the benefit of The Tax Cuts and Jobs Act (the Tax Act), and a higher gross margin, partially offset by increased advertising spending.
 	
●	EP decreased by 2% to $610 in fiscal year 2019 compared to $624 in fiscal year 2018 (refer to the reconciliation of EP to earnings from continuing operations before income taxes in Exhibit 99.2).
 	
●	The Company’s net cash provided by continuing operations was $992 in fiscal year 2019, compared to $976 in fiscal year 2018, reflecting improvements in working capital and current-year benefits from the Tax Act, partially offset by a higher contribution to employee retirement income plans. Free cash flow was $786 or 12.6% of net sales in fiscal year 2019, compared to $782 or 12.8% of net sales in fiscal year 2018 (refer to the reconciliation of net cash provided by continuing operations to free cash flow in “Financial Position and Liquidity - Investing -Free Cash Flow”).
 	
●	The Company paid $490 in cash dividends to stockholders in fiscal year 2019, compared to $450 in cash dividends in fiscal year 2018. In May 2019, the Company announced an increase of 10% in its quarterly cash dividend from prior year.
 	
●	In fiscal year 2019, the Company repurchased 2,266 thousand shares of its common stock at a cost of $328 under the Open-market purchase program and 2,208 thousand shares of its common stock at a cost of $332 under the Evergreen Program.	
Strategic Goals and Initiatives
Since October 2013, the Company’s 2020 Strategy has directed the Company to focus on the highest-value opportunities for profitable, sustainable and responsible growth, or Good Growth. The Company’s long-term financial goals reflected in the 2020 Strategy included annual net sales growth of 3%-5%, annual EBIT margin expansion of 25-50 basis points and annual free cash flow of 11%-13% of net sales. The strategy also called for the Company to prioritize the use of free cash flow to invest in the business, including the pursuit of strategic acquisitions, support dividends, maintain appropriate debt levels, and return excess cash to stockholders.
In October 2019, the Company will introduce a new long-term strategy, which builds on the success of the Company’s former long-term 2020 Strategy. Looking forward, the Company’s priority will be to continue its commitment to be a mission driven business as a means to support long-term value creation for all stakeholders.
RESULTS OF OPERATIONS
Unless otherwise noted, MD&A compares results of continuing operations from fiscal year 2019 to fiscal year 2018, and fiscal year 2018 to fiscal year 2017, with percentage and basis point calculations based on rounded numbers, except for per share data and the effective tax rate.

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CONSOLIDATED RESULTS
Continuing Operations

								% Change	
	     	2019	     	2018	     	2017	     	2019
to
2018	     	2018
to
2017	
Net sales		$6,214		$6,124		$5,973		1%		3%	
Net sales in fiscal year 2019 increased by 1%, reflecting sales growth in the Lifestyle and Cleaning reportable segments, partially offset by lower sales in the Household and International reportable segments. Volume increased by 2%, primarily driven by higher shipments in the Lifestyle reportable segment, which included the benefit from the Nutranext acquisition in April 2018, partially offset by lower shipments in the Household reportable segment. The variance between volume growth and net sales growth was primarily due to the impact of unfavorable foreign currency exchange rates, unfavorable mix and higher trade promotion spending, partially offset by the benefit of price increases.
Net sales in fiscal year 2018 increased 3%, reflecting sales growth in the Lifestyle, Cleaning and International reportable segments. Volume increased 3%, with growth across all reportable segments, most significantly in the Cleaning and Lifestyle reportable segments. Higher shipments in the Cleaning reportable segment were primarily driven by growth in Home Care, partially offset by lower shipments of Professional Products due to the Aplicare divestiture in August 2017. Growth in the Lifestyle reportable segment included the benefit from the Nutranext acquisition in April 2018 and higher shipments in Burt’s Bees® Natural Personal Care, partially offset by lower shipments in water-filtration products. Net sales also included the benefit of price increases offset by unfavorable mix.

										     	% Change	
	     	2019	     	2018	     	2017	 	2019
to
2018	     	2018
to
2017	
Gross profit		$2,728			$2,675			$2,671		 	2%		—%	
Gross margin		43.9	%		43.7	%		44.7	%	 				
Gross margin, defined as gross profit as a percentage of net sales, in fiscal year 2019 increased 20 basis points from 43.7% to 43.9%. The increase was primarily driven by the benefit of price increases and cost savings, partially offset by higher manufacturing and logistics costs, unfavorable commodity costs, the impact of unfavorable foreign currency exchange rates and higher trade promotion spending.
Gross margin in fiscal year 2018 decreased 100 basis points from 44.7% to 43.7%. The decrease was primarily driven by higher manufacturing and logistics costs and unfavorable commodity costs, partially offset by cost savings and the benefit of price increases.
Expenses

								% Change		% of Net sales	
	     	2019	     	2018	     	2017	     	2019
to
2018	     	2018
to
2017	     	2019	     	2018	     	2017	
Selling and administrative expenses		$856		$837		$810		  2	%		3	%		13.8	%		13.7	%		13.6	%	
Advertising costs		612		570		599		7			(5	)		9.8			9.3			10.0		
Research and development costs		136		132		135		3			(2	)		2.2			2.2			2.3		
Selling and administrative expenses, as a percentage of net sales, were essentially flat in fiscal year 2019. The dollar increase in selling and administrative expenses was primarily due to the impact of the Nutranext business, which was acquired in April 2018, and the related integration costs, partially offset by the benefit from ongoing productivity initiatives as well as lower incentive compensation expenses, consistent with the Company’s performance-based compensation philosophy.

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Selling and administrative expenses, as a percentage of net sales, were essentially flat in fiscal year 2018. The dollar increase in selling and administrative expenses was primarily due to the impact of the Nutranext acquisition in April 2018 and inflationary pressure in the International reportable segment.
Advertising costs, as a percentage of net sales, increased by 50 basis points in fiscal year 2019, primarily due to increased investments across a majority of the U.S. portfolio. The Company’s U.S. retail advertising spend was approximately 11% of U.S. retail sales for fiscal year 2019.
Advertising costs, as a percentage of net sales, decreased 70 basis points in fiscal year 2018, primarily due to a reduction in advertising investments. The Company’s U.S. retail advertising spend was approximately 10% of U.S. retail sales for fiscal year 2018.
Research and development costs, as a percentage of net sales, were essentially flat in fiscal years 2019 and 2018. The Company continues to focus on product innovation and cost savings.
Interest expense, Other (income) expense, net, and the effective tax rate on earnings

	     	2019	     	2018	     	2017	
Interest expense		$	97			$	85			  $	88		
Other (income) expense, net			3				(3	)			6		
Effective tax rate on earnings			19.8	%			21.8	%			31.9	%	
Interest expense increased by $12 in fiscal year 2019 and decreased by $3 in fiscal year 2018. The increase in fiscal year 2019 was primarily due to incremental interest incurred on senior notes issued in May 2018 to fund the Nutranext acquisition, partially offset by the impact of lower interest from senior notes issued in September 2017 to refinance senior notes that matured in October 2017.
Other (income) expense, net of $3 in fiscal year 2019 included $17 of amortization of trademarks and other intangible assets, partially offset by $15 of income from equity investees. Additionally, $14 of net period benefit cost was recognized in Other (income) expense, net as a result of adopting Accounting Standards Update No. 2017-07, “Compensation-Retirement Benefits (Topic 715),” on July 1, 2018. Prior to the adoption, net periodic benefit cost was recorded in Cost of products sold, Selling and administrative expenses and Research and development costs. See Notes to Consolidated Financial Statements for more information.
Other (income) expense, net of $(3) in fiscal year 2018 included $12 of income from equity investees, partially offset by $11 of amortization of trademarks and other intangible assets. See Notes to Consolidated Financial Statements for more information.
Other (income) expense, net of $6 in fiscal year 2017 included a $21 non-cash charge related to impairing certain assets of the Aplicare business, $14 of projected environmental costs associated with the Company’s former operation at a site in Alameda County, California and $10 of amortization of trademarks and other intangible assets. These were partially offset by $19 of income from equity investees and a gain of $10 from the sale of an Australian distribution facility. See Notes to Consolidated Financial Statements for more information.
The effective tax rate on earnings from continuing operations was 19.8%, 21.8% and 31.9% in fiscal years 2019, 2018 and 2017, respectively. The lower effective tax rate in fiscal year 2019 compared to fiscal year 2018 was primarily due to the lower federal statutory tax rate for fiscal year 2019, partially offset by one-time tax benefits from the enactment of the Tax Act during the second quarter of fiscal year 2018. The lower effective tax rate in fiscal year 2018 compared to fiscal year 2017 was primarily due to benefits from the Tax Act.

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Diluted net earnings per share

								% Change	
	     	2019	     	2018	     	2017	     	2019
to
2018	     	2018
to
2017	
Diluted net EPS from continuing operations		$6.32		$6.26		$5.35		1%		17%	
Diluted net earnings per share (EPS) from continuing operations increased by $0.06, or 1%, in fiscal year 2019, mainly driven by a lower effective tax rate, primarily from the benefit of the Tax Act, partially offset by lower earnings from continuing operations before income taxes. Earnings from continuing operations before income taxes reflected a higher gross margin, which was more than offset by increased advertising spending.
Diluted EPS from continuing operations increased $0.91 in fiscal year 2018, primarily driven by a lower effective tax rate due to the passage of the Tax Act in December 2017 (See Note 16 of Notes to Consolidated Financial Statements), cost savings and higher net sales, partially offset by higher manufacturing and logistics costs and unfavorable commodity costs.
SEGMENT RESULTS FROM CONTINUING OPERATIONS
The following presents the results from continuing operations of the Company’s reportable segments and certain unallocated costs reflected in Corporate (see Notes to Consolidated Financial Statements for a reconciliation of segment results to consolidated results):
Cleaning

								% Change	
	     	2019	     	2018	     	2017	     	2019
to
2018	     	2018
to
2017	
Net sales		$2,109		$2,060		$2,002		2	%		3	%	
Earnings from continuing operations before income taxes		600		574		523		5			10		
Fiscal year 2019 versus fiscal year 2018: Volume decreased by 1%, while net sales and earnings from continuing operations before income taxes increased by 2% and 5%, respectively, during fiscal year 2019. Volume decreased primarily driven by lower shipments in Home Care and Laundry, partially offset by higher shipments of Professional Products due to growth across all categories. The decreased shipments in Home Care were primarily driven by volume softness in Clorox® disinfecting wipes impacted by competitive activity. The lower shipments in Laundry were primarily driven by the impact of price increases. The variance between volume and net sales was primarily due to the benefit of price increases. The increase in earnings from continuing operations before income taxes was primarily due to net sales growth and cost savings, partially offset by higher manufacturing and logistics costs, unfavorable commodity costs and higher advertising spending.
Fiscal year 2018 versus fiscal year 2017: Volume, net sales and earnings from continuing operations before income taxes increased by 3%, 3% and 10%, respectively, during fiscal year 2018. Both volume and net sales growth were driven primarily by higher shipments in Home Care, mainly due to continued strength in Clorox® disinfecting wipes across multiple channels and the launch of ScentivaTM branded products, partially offset by lower shipments in Professional Products. The decreased shipments in Professional Products were primarily driven by the sale of the Aplicare business in August 2017, partially offset by increased shipments of cleaning products driven by e-commerce growth and innovation. The increase in earnings from continuing operations before income taxes was primarily due to net sales growth, cost savings and the prior year $21 non-cash impairment charge for the Aplicare business, partially offset by higher manufacturing and logistics costs and unfavorable commodity costs.

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Household

											% Change	
	                    	2019	     	2018	     	2017	     	2019
to
2018	     	2018
to
2017	
Net sales		$	1,870		$	1,959		$	1,961		(5	)%		—	%	
Earnings from continuing operations before income taxes			316			370			419		(15	)		(12	)	
Fiscal year 2019 versus fiscal year 2018: Volume, net sales and earnings from continuing operations before income taxes decreased by 7%, 5% and 15%, respectively, during fiscal year 2019. Volume decreased, primarily driven by lower shipments of Glad® bags and wraps, mainly due to wider price gaps compared to a year ago and distribution losses, and lower shipments in Charcoal, mainly due to distribution losses and lower merchandising activity. The variance between volume and net sales was primarily due to the benefit of price increases, partially offset by unfavorable mix and higher trade promotion spending. The decrease in earnings from continuing operations before income taxes was mainly due to higher manufacturing and logistics costs, lower net sales, unfavorable commodity costs and higher advertising spending, partially offset by cost savings.
Fiscal year 2018 versus fiscal year 2017: Volume increased by 2% and sales were flat, while earnings from continuing operations before income taxes decreased by 12% during fiscal year 2018. Volume growth was driven by higher shipments in Cat Litter, primarily due to innovation and increased merchandising activity, higher shipments of RenewLife® digestive health products primarily due to growth in the e-commerce channel, and increased shipments in Glad® products primarily due to strength in premium trash bags. These increases were partially offset by lower shipments of Charcoal products mainly due to poor weather in the back half of fiscal year 2018. Volume outpaced net sales, primarily due to unfavorable mix and a price decrease on a portion of the Glad® trash portfolio. The decrease in earnings from continuing operations before income taxes was mainly due to higher manufacturing and logistics costs and unfavorable commodity costs, partially offset by cost savings.
Lifestyle

											% Change	
	                    	2019	     	2018	     	2017	     	2019
to
2018	     	2018
to
2017	
Net sales		$	1,265		$	1,077		$	1,000		17	%		8	%	
Earnings from continuing operations before income taxes			255			243			244		5			—		
Fiscal year 2019 versus fiscal year 2018: Volume, net sales and earnings from continuing operations before income taxes increased by 23%, 17% and 5%, respectively, during fiscal year 2019. Both volume and net sales increased, primarily driven by the benefit of the April 2018 acquisition of the Nutranext dietary supplements business, growth in Burt’s Bees® Natural Personal Care, mainly due to continued strength in lip care and face care largely driven by product innovation and distribution gains, and higher shipments of Brita® water-filtration systems due to product innovation. The variance between volume and net sales was primarily due to unfavorable mix and higher trade promotion spending, partially offset by the benefit of price increases. The increase in earnings from continuing operations before income taxes was primarily due to net sales growth and cost savings, partially offset by higher manufacturing and logistics costs.
Fiscal year 2018 versus fiscal year 2017: Volume and net sales each increased by 8%, while earnings from continuing operations before income taxes was flat during fiscal year 2018. Both volume and net sales growth were primarily driven by the benefit of the April 2018 acquisition of the Nutranext dietary supplements business and higher shipments of Burt’s Bees® Natural Personal Care products, mainly due to continued strength in lip care and new product launch of face and eye cosmetics, partially offset by lower shipments of Brita® water-filtration products. Earnings from continuing operations before income taxes was flat, as net sales growth and cost savings were offset by costs related to the Nutranext acquisition and higher manufacturing and logistics costs.

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International

											% Change	
	                    	2019	     	2018	     	2017	     	2019
to
2018	     	2018
to
2017	
Net sales		$	970		$	1,028		$	1,010		(6	)%		2	%	
Earnings from continuing operations before income taxes			96			84			81		14			4		
Fiscal year 2019 versus fiscal year 2018: Volume increased by 2%, net sales decreased by 6%, and earnings from continuing operations before income taxes increased by 14% during fiscal year 2019. Volume grew, primarily driven by higher shipments in Asia and Canada, partially offset by lower shipments in certain Latin American countries, mainly Argentina. The variance between volume and net sales was mainly due to unfavorable foreign currency exchange rates and higher trade promotion spending, partially offset by the benefit of price increases. The increase in earnings from continuing operations before income taxes was largely due to the benefit of price increases and cost savings, partially offset by the impact of unfavorable foreign currency exchange rates, mainly from devaluation of the Argentine peso, and inflationary pressure on manufacturing and logistics costs.
Fiscal year 2018 versus fiscal year 2017: Volume was flat, net sales and earnings from continuing operations before income taxes increased by 2% and 4%, respectively, during fiscal year 2018. Volume reflected higher shipments in Canada, partially offset by lower shipments in Europe and in certain Latin American and Asian countries. Net sales outpaced volume primarily due to the benefit of price increases, partially offset by unfavorable foreign currency exchange rates and unfavorable mix. The increase in earnings from continuing operations before income taxes was primarily due to net sales growth, mainly driven by pricing, and cost savings, partially offset by inflationary pressure on manufacturing, logistics and administrative costs and unfavorable commodity costs.
Argentina
The Company operates in Argentina through certain wholly owned subsidiaries (collectively, “Clorox Argentina”). Net sales from Clorox Argentina represented approximately 2%, 3% and 3% of the Company’s consolidated net sales for the fiscal years ended June 30, 2019, 2018 and 2017, respectively. The operating environment in Argentina continues to be challenging, including continuing significant volatility in Argentina’s currency, high inflation and economic recession.
Clorox Argentina manufactures products at two plants that it owns and operates across Argentina and markets those products to consumers throughout the country. Products are advertised nationally and sold to consumers through wholesalers and retail outlets located throughout Argentina. Sales are made primarily through the use of Clorox Argentina’s sales force. Small amounts of products produced in Argentina are exported each year, including sales to the Company’s other subsidiaries located primarily in Latin America. Clorox Argentina obtains its raw materials almost entirely from local sources. The Company also conducts research and development activities at its owned facility in Buenos Aires, Argentina. Additionally, Clorox Argentina performs marketing, legal, and various other shared service activities to support the Company’s Latin American operations. Clorox Argentina, in turn, benefits from shared service activities performed within other geographic locations, such as information technology support and manufacturing technical assistance.
Effective July 1, 2018, under the requirements of U.S. GAAP, Argentina was designated as a highly inflationary economy, since it has experienced cumulative inflation of approximately 100 percent or more over a three-year period. As a result, beginning July 1, 2018, the U.S. dollar replaced the Argentine peso as the functional currency of the Company’s subsidiaries in Argentina. Consequently, gains and losses from non-U.S. dollar denominated monetary assets and liabilities for Clorox Argentina are recognized in Other (income) expense, net in the consolidated statement of earnings.
Volatility in the exchange rate is expected to continue in the future, which, along with competition and changes in the retail, labor and macro-economic environment, could have an adverse impact on Clorox Argentina’s net sales, net earnings, cash flows and net monetary asset position. The Company is closely monitoring developments in Argentina and continues to take steps intended to mitigate the adverse conditions, but there can be no assurances that these actions will be able to mitigate these conditions as they may occur.

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Corporate

											% Change	
	                    	2019	     	2018	     	2017	     	2019
to
2018	     	2018
to
2017	
Losses from continuing operations before income taxes		$	(243	)	$	(217	)	$	(234	)	12	%		(7	)%	
Corporate includes certain non-allocated administrative costs, interest income, interest expense and other non-operating income and expenses. Corporate assets include cash and cash equivalents, prepaid expenses and other current assets, property and equipment, other investments and deferred taxes.
Fiscal year 2019 versus fiscal year 2018: The increase in losses from continuing operations before income taxes was primarily driven by an increase in interest expense.
Fiscal year 2018 versus fiscal year 2017: The decrease in losses from continuing operations before income taxes was primarily driven by a prior year increase in projected environmental costs associated with the Company’s former operations at a site in Alameda County, California in fiscal year 2017 (See Notes to Consolidated Financial Statements for more information) and lower employee incentive compensation costs.
FINANCIAL POSITION AND LIQUIDITY
Management’s discussion and analysis of the Company’s financial position and liquidity describes its consolidated operating, investing and financing activities from continuing operations, contractual obligations and off-balance sheet arrangements.
The Company’s cash position includes amounts held by foreign subsidiaries and, as a result, the repatriation of certain cash balances from some of the Company’s foreign subsidiaries could result in additional tax costs. However, these cash balances are generally available without legal restriction to fund local business operations. In addition, a portion of the Company’s cash balance is held in U.S. dollars by foreign subsidiaries, whose functional currency is their local currency. Such U.S. dollar balances are reported on the foreign subsidiaries’ books, in their functional currency, with the impact from foreign currency exchange rate differences recorded in Other (income) expense, net.
The Company’s financial condition and liquidity remained strong as of June 30, 2019. The following table summarizes cash activities from continuing operations for the years ended June 30:

	               	2019		     	2018		     	2017		
Net cash provided by continuing operations		$	992			$	976			$	868		
Net cash used for investing activities			(196	)			(859	)			(205	)	
Net cash used for financing activities			(815	)			(399	)			(645	)	
Operating Activities
Net cash provided by continuing operations was $992 in fiscal year 2019, compared with $976 in fiscal year 2018. The increase was primarily related to year-over-year improvements in working capital, current year benefits from the Tax Act, partially offset by a higher contribution to employee retirement income plans.
Net cash provided by continuing operations was $976 in fiscal year 2018, compared with $868 in fiscal year 2017. The year-over-year increase was primarily related to lower tax payments, mainly due to benefits from the Tax Act, and lower employee incentive compensation payments, partially offset by timing of payments to vendors.
Investing Activities
Net cash used for investing activities was $196 in fiscal year 2019, as compared to $859 in fiscal year 2018. The year-over-year decrease was mainly due to the $681 of cash paid for the April 2, 2018 acquisition of Nutranext (See Notes to Consolidated Financial Statements for more information).

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Net cash used for investing activities was $859 in fiscal year 2018, as compared to $205 in fiscal year 2017. The year-over-year increase was mainly due to the April 2, 2018 acquisition of Nutranext, a dietary supplements company that manufactures and markets leading dietary supplement brands in the retail and e-commerce channels as well as in its direct-to-consumer business. The total amount paid was $681 (See Notes to Consolidated Financial Statements for more information).
Capital expenditures were $206, $194 and $231 in fiscal years 2019, 2018 and 2017, respectively. Capital expenditures as a percentage of net sales was 3.3%, 3.2% and 3.9% for fiscal years 2019, 2018 and 2017, respectively. The year-over-year fluctuations were due to the timing of certain infrastructure projects.
In January 2017, the Company sold an Australian distribution facility, previously reported in the International reportable segment, which resulted in $23 in cash proceeds from investing activities and a gain of $10 recorded in Other (income) expense, net, on the consolidated statement of earnings for the year ended June 30, 2017.
Free cash flow

	           	2019		     	2018		     	2017		
Net cash provided by continuing operations		$	992			$	976			$	868		
Less: capital expenditures			(206	)			(194	)			(231	)	
Free cash flow		$	786			$	782			$	637		
Free cash flow as a percentage of net sales			12.6	%			12.8	%			10.7	%	
Financing Activities
Net cash used for financing activities was $815 in fiscal year 2019, as compared to $399 in fiscal year 2018. Net cash used for financing activities was higher in fiscal year 2019, mainly due to higher treasury stock repurchases and higher dividend payments, partially offset by higher proceeds from stock option exercises.
Net cash used for financing activities was $399 in fiscal year 2018, as compared to $645 in fiscal year 2017. Net cash used for financing activities was lower in fiscal year 2018, mainly due to higher net borrowings in fiscal year 2018 to fund the Nutranext acquisition, partially offset by reduced notes payables balances from cash repatriated from foreign subsidiaries, increased treasury stock purchases and cash dividends.
Capital Resources and Liquidity
The Company believes it will have the funds necessary to meet its financing requirements and other fixed obligations as they become due based on its working capital requirements, anticipated ability to generate positive cash flows from operations in the future, investment-grade credit ratings, demonstrated access to long- and short-term credit markets and current borrowing availability under credit agreements. The Company may consider other transactions that require the issuance of additional long- and/or short-term debt or other securities to finance acquisitions, repurchase stock, refinance debt or fund other activities for general business purposes. Such transactions could require funds in excess of the Company’s current cash levels and available credit lines, and the Company’s access to or cost of such additional funds could be adversely affected by any decrease in credit ratings, which were the following as of June 30:

		2019		2018	
	     	Short-term	     	Long-term	     	Short-term	     	Long-term	
Standard and Poor’s		A-2		A-		A-2		A-	
Moody’s		P-2		Baa1		P-2		Baa1	
Credit Arrangements
As of June 30, 2019, the Company maintained a $1,100 revolving credit agreement that matures in February 2022. There were no borrowings under this credit agreement as of June 30, 2019 and 2018, and the Company believes that borrowings under this credit agreement are and will continue to be available for general business purposes.

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The credit agreement includes certain restrictive covenants and limitations. The primary restrictive covenant is a minimum ratio of 4.0 calculated as total earnings before interest, taxes, depreciation and amortization and non-cash asset impairment charges (Consolidated EBITDA) to total interest expense for the trailing four quarters (Interest Coverage ratio), as defined and described in the credit agreement.
The following table sets forth the calculation of the Interest Coverage ratio as of June 30, 2019, using Consolidated EBITDA for the trailing four quarters, as contractually defined in the credit agreement:

	          	2019		
Earnings from continuing operations		$	820		
Add back:					
Interest expense			97		
Income tax expense			204		
Depreciation and amortization			180		
Non-cash asset impairment charges			—		
Less:					
Interest income			(3	)	
Consolidated EBITDA		$	1,298		
Interest expense		$	97		
Interest Coverage ratio			13.4		
			 		
As of June 30, 2019, the Company was in compliance with all restrictive covenants and limitations in the credit agreement, and anticipates being in compliance with all restrictive covenants for the foreseeable future. The Company continues to monitor the financial markets and assess its ability to fully draw on its revolving credit agreement, and currently expects that any drawing on the agreement will be fully funded.
As of June 30, 2019, the Company maintained $39 of foreign and other credit lines, of which $4 was outstanding and the remainder of $35 was available for borrowing.
As of June 30, 2018, the Company maintained $37 of foreign and other credit lines, of which $3 was outstanding and the remainder of $34 was available for borrowing.
Short-term Borrowings
The Company’s notes and loans payable consist of U.S. commercial paper issued by the parent company. These short-term borrowings have stated maturities of less than one year and provide supplemental funding for supporting operations. The level of U.S. commercial paper borrowings generally fluctuates depending upon the amount and timing of operating cash flows and payments for items such as dividends, income taxes, stock repurchases and pension contributions. The average balance of U.S. commercial paper borrowings outstanding was $304 and $470 for the fiscal years ended June 30, 2019 and 2018, respectively.
Long-term Borrowings
In May 2018, the Company issued $500 of senior notes with an annual fixed interest rate of 3.90% and used the proceeds to repay a portion of its outstanding commercial paper, including amounts raised in connection with the Nutranext acquisition. The notes carry an effective interest rate of 4.02% (see Notes to Consolidated Financial Statements). The notes rank equally with all of the Company’s existing senior indebtedness.
In September 2017, the Company issued $400 of senior notes with an annual fixed interest rate of 3.10% and used the proceeds to repay $400 of senior notes with an annual fixed interest rate of 5.95% that became due in October 2017. The September 2017 senior notes carry an effective interest rate of 3.13% (See Notes to Consolidated Financial Statements). The notes rank equally with all of the Company’s existing senior indebtedness.

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Stock Repurchases and Dividend Payments
As of June 30, 2019, the Company had two stock repurchase programs: an open-market purchase program with an authorized aggregate purchase amount of up to $2,000, which has no expiration date and was authorized by the Board of Directors in May 2018 and replaced a prior open-market program with an authorized aggregate purchase amount of up to $750, and a program to offset the anticipated impact of dilution related to stock-based awards (the Evergreen Program), which has no authorization limit on the dollar amount and no expiration date.
Stock repurchases under the two stock repurchase programs were as follows during the fiscal years ended June 30:

		2019	     	2018	     	2017	
	     	Amount	     	Shares
(in thousands)	     	Amount	     	Shares
(in thousands)	     	Amount	     	Shares
(in thousands)	
Open-market purchase program		     	$	328		             	2,266		     	$	95		             	749	 	     	$	—		             	—	 	
Evergreen Program				332			2,208				177			1,422				189			1,505	 	
Total stock repurchases			$	660			4,474			$	272			2,171			$	189			1,505	 	
 																						 	
Dividends per share and total dividends paid were as follows during the fiscal years ended June 30:

	     	2019	     	2018	     	2017	
Dividends per share declared		$	3.94		$	3.60		$	3.24	
Dividends per share paid			3.84			3.48			3.20	
Total dividends paid			490			450			412	
On May 20, 2019, the Company declared a 10% increase in the quarterly dividend, from 96 cents to $1.06 per share, payable on August 16, 2019 to common stockholders of record as of the close of business on July 31, 2019.
On February 13, 2018, the Company declared a quarterly dividend of 96 cents per share payable on May 11, 2018 to common stockholders of record at the close of business on April 25, 2018. This represented an increase of 14 percent in the quarterly dividend, which was an accelerated declaration of the Company’s dividend increase that has typically taken place in the month of May and was a result of the passage of the Tax Act.
Contractual Obligations
The Company had contractual obligations as of June 30, 2019, payable or maturing in the following fiscal years:

	     	2020	     	2021	     	2022	     	2023	     	2024	     	Thereafter	     	Total	
Long-term debt maturities including interest payments		$	79		$	79		$	374		$	659		$	49		    	$	1,530		$	2,770	 	
Notes and loans payable			397			1			1			—			—		 		—			399	 	
Purchase obligations(1)			77			36			26			14			11		 		—			164	 	
Operating leases			71			65			50			42			37		 		124			389	 	
Payments related to nonqualified retirement income																	 						 	
and retirement health care plans(2)			14			13			13			13			14		 		71			138	 	
Venture agreement terminal obligation(3)			—			—			—			—			—		 		619			619	 	
Total		$	638		$	194		$	464		$	728		$	111		 	$	2,344		$	4,479	 	
 																	 						 	
(1)	Purchase obligations are defined as purchase agreements that are enforceable and legally binding and that contain specified or determinable significant terms, including quantity, price and the approximate timing of the transaction. For purchase obligations subject to variable price and/or quantity provisions, an estimate of the price and/or quantity has been made. Examples of the Company’s purchase obligations include contracts to purchase raw materials, commitments to contract manufacturers, commitments for information technology and related services, advertising contracts, capital expenditure agreements, software acquisition and license commitments and service contracts. The raw material contracts included above are entered into during the regular course of business based on expectations of future purchases. Many of these raw material contracts are flexible to allow for changes in the Company’s business and related requirements. If such changes were to occur, the Company believes its exposure could differ from the amounts listed above. Any amounts reflected in the consolidated balance sheets as Accounts payable and accrued liabilities are excluded from the table above, as they are short-term in nature and expected to be paid within one year.	

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(2)	These amounts represent expected payments through 2029. Based on the accounting rules for nonqualified retirement income and retirement health care plans, the liabilities reflected in the Company’s consolidated balance sheets differ from these expected future payments (see Notes to Consolidated Financial Statements).	
(3)	The Company has a venture agreement with The Procter & Gamble Company (P&G) for the Company’s Glad® bags, wraps and containers business. As of June 30, 2019, P&G had a 20% interest in the venture. Upon termination of the agreement in January 2026, the Company is required to purchase P&G’s 20% interest for cash at fair value as established by predetermined valuation procedures. Refer to Notes to Consolidated Financial Statements for further details.	
Off-Balance Sheet Arrangements
In conjunction with divestitures and other transactions, the Company may provide typical indemnifications (e.g., indemnifications for representations and warranties and retention of previously existing environmental, tax and employee liabilities) that have terms that vary in duration and in the potential amount of the total obligation and, in many circumstances, are not explicitly defined. The Company has not made, nor does it believe that it is probable that it will make, any material payments relating to its indemnifications, and believes that any reasonably possible payments would not have a material adverse effect, individually or in the aggregate, on the Company’s consolidated financial statements.
The Company had not recorded any material liabilities on the aforementioned indemnifications as of June 30, 2019 and 2018.
The Company was a party to letters of credit of $9 as of both June 30, 2019 and 2018, primarily related to one of its insurance carriers, of which $0 had been drawn upon.
CONTINGENCIES
A summary of contingencies is contained in the Notes to Consolidated Financial Statements and is incorporated herein by reference.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a multinational company, the Company is exposed to the impact of foreign currency fluctuations, changes in commodity prices, interest-rate risk and other types of market risk.
In the normal course of business, where available at a reasonable cost, the Company manages its exposure to market risk using contractual agreements and a variety of derivative instruments. The Company’s objective in managing its exposure to market risk is to limit the impact of fluctuations on earnings and cash flow through the use of swaps, forward purchases and futures contracts. Derivative contracts are entered into for non-trading purposes with major credit-worthy institutions, thereby decreasing the risk of credit loss.
The Company uses different methodologies, when necessary, to estimate the fair value of its derivative contracts. The estimated fair values of the majority of the Company’s contracts are based on quoted market prices, exchange traded market prices or broker price quotations, and represent the estimated amounts that the Company would pay or receive to terminate the contracts.
Sensitivity Analysis for Derivative Contracts
For fiscal years 2019 and 2018, the Company’s exposure to market risk was estimated using sensitivity analyses, which illustrate the change in the fair value of a derivative financial instrument assuming hypothetical changes in foreign exchange rates, commodity prices or interest rates. The results of the sensitivity analyses for foreign currency derivative contracts, commodity derivative contracts and interest rate contracts are summarized below. Actual changes in foreign exchange rates, commodity prices or interest rates may differ from the hypothetical changes, and any changes in the fair value of the contracts, real or hypothetical, would be partly to fully offset by an inverse change in the value of the underlying hedged items.

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The changes in the fair value of derivatives are recorded as either assets or liabilities in the consolidated balance sheets with an offset to Net earnings or Other comprehensive income (loss), depending on whether or not, for accounting purposes, the derivative is designated and qualified as an accounting hedge. For those derivative instruments designated and qualifying as hedging instruments, the Company must designate the hedging instrument either as a fair value hedge or as a cash flow hedge. The Company designates its commodity forward and future contracts for forecasted purchases of raw materials, interest rate forward contracts for forecasted interest payments and foreign currency forward contracts for forecasted purchases of inventory as cash flow hedges. During the fiscal years ended June 30, 2019, 2018 and 2017, the Company had no hedging instruments designated as fair value hedges. In the event the Company has contracts not designated as hedges for accounting purposes, the Company recognizes the changes in the fair value of these contracts in the consolidated statement of earnings.
Commodity Price Risk
The Company is exposed to changes in the price of commodities used as raw materials in the manufacturing of its products. The Company uses various strategies to manage cost exposures on certain raw material purchases with the objective of obtaining more predictable costs for these commodities, including long-term commodity purchase contracts and commodity derivative contracts, where available at a reasonable cost. During fiscal years 2019 and 2018, the Company had derivative contracts related to raw materials exposures for jet fuel used for the charcoal business and soybean oil used for the food business. Based on a hypothetical decrease or increase of 10% in these commodity prices as of June 30, 2019, and June 30, 2018, the estimated fair value of the Company’s then-existing commodity derivative contracts would decrease or increase by $2 and $4, respectively, with the corresponding impact included in Accumulated other comprehensive net (losses) income.
Foreign Currency Risk
The Company seeks to minimize the impact of certain foreign currency fluctuations by hedging transactional exposures with foreign currency forward contracts. Based on a hypothetical decrease of 10% in the value of the U.S. dollar as of June 30, 2019 and June 30, 2018, the estimated fair value of the Company’s then-existing foreign currency derivative contracts would decrease by $7 and $5, respectively, with the corresponding impact included in Accumulated other comprehensive net (losses) income. Based on a hypothetical increase of 10% in the value of the U.S. dollar as of June 30, 2019 and June 30, 2018, the estimated fair value of the Company’s then-existing foreign currency derivative contracts would increase by $6 and $4, respectively, with the corresponding impact included in Accumulated other comprehensive net (losses) income.
Interest Rate Risk
The Company is exposed to interest rate volatility with regard to existing short-term borrowings, primarily commercial paper, and anticipated future issuances of long-term debt. Weighted average interest rates for commercial paper borrowings were 2.61% during fiscal year 2019 and 1.86% during fiscal year 2018. Assuming average variable rate debt levels during fiscal years 2019 and 2018, a 100 basis point increase or decrease in interest rates would increase or decrease interest expense from commercial paper by approximately $3 and $5, respectively.
The Company is also exposed to interest rate volatility with regard to anticipated future issuances of debt. Primary exposures include movements in U.S. Treasury rates. The Company had no outstanding interest rate forward contract positions as of June 30, 2019 or 2018.
RECENTLY ISSUED ACCOUNTING STANDARDS
A summary of all recently issued accounting standards is contained in Note 1 of Notes to Consolidated Financial Statements.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The methods, estimates, and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results the Company reports in its consolidated financial statements. Specific areas requiring the application of management’s estimates and judgments include, among others, assumptions pertaining to accruals for consumer and trade-promotion programs, stock-based compensation, retirement income plans, future cash flows associated with impairment testing of goodwill and other long-lived assets and the valuation of the venture agreement terminal obligations, valuation of assets acquired and liabilities assumed in connection with a business combination, the credit worthiness of customers, uncertain tax positions, tax valuation allowances and legal, environmental and insurance matters. Accordingly, a different financial presentation could result depending on the judgments, estimates or assumptions that are used. The most critical accounting policies and estimates are those that are most important to the portrayal of the Company’s financial condition and results, and require the Company to make the most difficult and subjective judgments, often estimating the outcome of future events that are inherently uncertain. The Company’s most critical accounting policies and estimates are related to: revenue recognition; the valuation of goodwill and other intangible assets; income taxes; and the venture agreement terminal obligation. The Company’s critical accounting policies and estimates have been reviewed with the Audit Committee of the Board of Directors. A summary of the Company’s significant accounting policies and estimates is contained in Note 1 of Notes to Consolidated Financial Statements.
Revenue Recognition
The Company routinely commits to one-time or ongoing trade-promotion programs with customers. Programs include shelf-price reductions, end-of-aisle or in-store displays and graphics of the Company’s products and other trade-promotion activities conducted by the customer to promote the Company’s brands and products. Costs related to these programs are recorded as a reduction of sales. The Company’s trade promotion accruals are primarily based on estimated volume and incorporate historical sales and spending trends by customer and category. The determination of these estimated accruals requires judgment and may change in the future as a result of changes in customer promotion participation. Final determination of the total cost of a promotion is dependent upon customers providing information about proof of performance and other information related to the promotional event. This process of analyzing and settling trade-promotion programs with customers could impact the Company’s results of operations and trade promotion accruals depending on how actual results of the programs compare to the estimates. If the Company’s trade promotion accrual estimates as of June 30, 2019 were to differ by 10%, the impact on net sales would be approximately $10.
Goodwill and Other Intangible Assets
The Company tests its goodwill and other indefinite-lived intangible assets for impairment annually in the fiscal fourth quarter unless there are indications during a different interim period that these assets may have become impaired.
Goodwill
For fiscal year 2019, the Company’s reporting units for goodwill impairment testing purposes were its individual U.S. SBUs and the International division. These reporting units, which are also the Company’s operating segments, are the level at which discrete financial information is available and reviewed by the managers of the respective operating segments. The respective operating segment managers do not review financial information for components that are below the operating segment level. No instances of impairment were identified during the fiscal year 2019 annual impairment review. All of the Company’s reporting units had fair values that exceeded recorded values. However, future changes in the judgments, assumptions and estimates that are used in the impairment testing for goodwill and indefinite-lived intangible assets as described below could result in significantly different estimates of the fair values.
In its evaluation of goodwill impairment, the Company has the option to first assess qualitative factors such as the maturity and stability of the reporting unit, the magnitude of the excess fair value over carrying value from the prior year’s impairment testing, other reporting unit operating results as well as new events and circumstances impacting the operations at the reporting unit level. If the result of a qualitative test indicates a potential for impairment, a quantitative test is performed. The quantitative test is a two-step process. In the first step, the Company compares the estimated fair value of each reporting unit to its carrying value. In all instances, the estimated fair value exceeded the carrying value

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of the reporting unit. If the estimated fair value of any reporting unit had been less than its carrying value, the Company would have performed a second step to determine the implied fair value of the reporting unit’s goodwill. If the carrying amount of a reporting unit’s goodwill had exceeded its implied fair value, an impairment charge would have been recorded for the difference between the carrying amount and the implied fair value of the reporting unit’s goodwill.
To determine the fair value of a reporting unit as part of its quantitative test, the Company uses a discounted cash flow (DCF) method under the income approach, as it believes that this approach is the most reliable indicator of the fair value of its businesses and the fair value of their future earnings and cash flows. Under this approach, the Company estimates the future cash flows of each reporting unit and discounts these cash flows at a rate of return that reflects their relative risk. The cash flows used in the DCF method are consistent with those the Company uses in its internal planning, which gives consideration to actual business trends experienced, and the long-term business strategy. The other key estimates and factors used in the DCF method include, but are not limited to, future volumes, net sales and expense growth rates, commodity prices, changes in working capital, foreign exchange rates, inflation and a terminal growth rate. Changes in such estimates or the application of alternative assumptions could produce different results.
No impairments were identified in fiscal year 2019 as a result of the Company’s impairment review performed annually during the fourth quarter or during any other quarters of fiscal year 2019.
Trademarks and Other Indefinite-Lived Intangible Assets
For trademarks and other intangible assets with indefinite lives, the Company performs a quantitative analysis to test for impairment. When a quantitative test is performed, the estimated fair value of an asset is compared to its carrying amount. If the carrying amount of such asset exceeds its estimated fair value, an impairment charge is recorded for the difference between the carrying amount and the estimated fair value. The Company uses the income approach to estimate the fair value of its trademarks and other intangible assets with indefinite lives. This approach requires significant judgments in determining the royalty rates and the assets’ estimated cash flows as well as the appropriate discount and foreign exchange rates applied to those cash flows to determine fair value. Changes in such estimates or the use of alternative assumptions could produce different results.
No impairments were identified in fiscal year 2019 as a result of the Company’s impairment review performed annually during the fourth quarter or during any other quarters of fiscal year 2019.
Finite-Lived Intangible Assets
Finite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset (or asset group) may not be recoverable. The Company’s impairment review requires significant management judgment, including estimating the future success of product lines, future sales volumes, revenue and expense growth rates, alternative uses for the assets and proceeds from the disposal of the assets. The Company reviews business plans for possible impairment indicators. Impairment occurs when the carrying amount of the asset (or asset group) exceeds its estimated future undiscounted cash flows and the impairment is viewed as other than temporary. When impairment is indicated, an impairment charge is recorded for the difference between the asset’s carrying value and its estimated fair value. Depending on the asset, estimated fair value may be determined either by use of a DCF model or, if available, by reference to estimated selling values of assets in similar condition. The use of different assumptions would increase or decrease the estimated fair value of assets and would increase or decrease any impairment measurement.
No significant impairments were identified in fiscal year 2019 as a result of the Company’s impairment review during any quarters of fiscal year 2019.
Income Taxes
The Company’s effective tax rate is based on income by tax jurisdiction, statutory tax rates and tax planning opportunities available to the Company in the various jurisdictions in which the Company operates. Significant judgment is required in determining the Company’s effective tax rate and in evaluating its tax positions.

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The Company maintains valuation allowances when it is likely that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the Company’s income tax provision in the period of change. In determining whether a valuation allowance is warranted, the Company takes into account such factors as prior earnings history, expected future earnings, unsettled circumstances that, if unfavorably resolved, would adversely affect the utilization of a deferred tax asset, statutory carry-back and carry-forward periods and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. Valuation allowances maintained by the Company relate mostly to deferred tax assets arising from the Company’s currently anticipated inability to use net operating losses and tax credits in certain foreign countries. As of June 30, 2019 and June 30, 2018, valuation allowances related to the realization of deferred tax assets were approximately $44 and $43, respectively.
In addition to valuation allowances, the Company provides for uncertain tax positions when such tax positions do not meet certain recognition thresholds or measurement standards. Amounts for uncertain tax positions are adjusted in quarters when new information becomes available or when positions are effectively settled. As of June 30, 2019 and June 30, 2018, the liabilities recorded for uncertain tax positions, excluding associated interest and penalties, were approximately $31 and $47, respectively. Since audit outcomes and the timing of audit settlements are subject to significant uncertainty, liabilities for uncertain tax positions are excluded from the contractual obligations table (see Notes to Consolidated Financial Statements).
Foreign withholding taxes are not provided when foreign earnings are indefinitely reinvested. The Company determines whether its foreign subsidiaries will invest their undistributed earnings indefinitely and reassesses this determination on a quarterly basis. A change to the Company’s determination may be warranted based on the Company’s experience as well as plans regarding future international operations and expected remittances. Changes in the Company’s determination would require an adjustment to the income tax provision in the quarter in which the determination is made. Through the second quarter of fiscal year 2018, the Company had determined that the undistributed earnings of a number of its foreign subsidiaries were indefinitely reinvested. In the third quarter of fiscal year 2018, the Company concluded an analysis wherein it determined that none of the undistributed earnings of its foreign subsidiaries were indefinitely reinvested because the Tax Act enacted in December 2017 significantly reduced the cost of U.S. repatriation. As a result, the Company is providing foreign withholding taxes on the undistributed earnings of all foreign subsidiaries where applicable, which has no significant impact on the Company’s consolidated results.
Venture Agreement Terminal Obligation
The Company has a venture agreement with P&G for the Company’s Glad® bags, wraps and containers business. In connection with this agreement, P&G provides R&D support to the Glad® business. As of June 30, 2019 and June 30, 2018, P&G had a 20% interest in the venture. In December 2017, the Company and P&G extended the term of the agreement and the related R&D support provided by P&G. The term will now expire in January 2026, unless the parties agree, on or prior to January 31, 2025, to further extend the term of the agreement for another seven years or agree to take some other relevant action. Upon termination of the agreement, the Company is required to purchase P&G’s 20% interest for cash at fair value as established by predetermined valuation procedures. The Company’s obligation to purchase P&G’s interest is reflected in Other Liabilities (See Notes to Consolidated Financial Statements). The difference between the estimated fair value and the amount recognized, and any future changes in the fair value of P&G’s interest, is charged to Cost of products sold in accordance with the effective interest method over the remaining life of the agreement.
The estimated fair value of P&G’s interest may increase or decrease up until any such purchase by the Company of P&G’s interest. The Company uses the income approach to estimate the fair value of P&G’s interest. Under this approach, the Company estimates the future cash flows and discounts these cash flows at a rate of return that reflects its risk. The cash flows used are consistent with those the Company uses in its internal planning, which gives consideration to actual business trends experienced and the long-term business strategy. The other key assumptions and estimates used include, but are not limited to, future volumes, net sales and expense growth rates, commodity prices, changes in working capital, capital expenditures, foreign exchange rates, tax rates, discount rates, inflation and terminal growth rates. Changes in the judgments, assumptions and estimates used could result in significantly different estimates of fair value. For perspective, if the discount rate as of June 30, 2019 were to increase or decrease by 100 basis points, the estimated

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fair value of P&G’s interest would decrease by approximately $60 or increase by approximately $80, respectively. Additionally, if the tax rate as of June 30, 2019 were to increase or decrease by 100 basis points, the estimated fair value of P&G’s interest would change by approximately $7. Such changes would affect the amount of future charges to Cost of products sold.
SUMMARY OF NON-GAAP FINANCIAL MEASURES
The non-GAAP financial measures that may be included in this MD&A and Exhibit 99.2 and the reasons management believes they are useful to investors are described below. These measures should be considered supplemental in nature and are not intended to be a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, these measures may not be the same as similarly named measures presented by other companies.
Free cash flow is calculated as net cash provided by continuing operations less capital expenditures. The Company’s management uses this measure and free cash flow as a percentage of net sales to help assess the cash generation ability of the business and funds available for investing activities, such as acquisitions, investing in the business to drive growth, and financing activities, including debt payments, dividend payments and stock repurchases. Free cash flow does not represent cash available only for discretionary expenditures, since the Company has mandatory debt service requirements and other contractual and non-discretionary expenditures. Refer to “Free cash flow” and “Free cash flow as a percentage of net sales” above for a reconciliation of these non-GAAP measures.
The Company uses the term Consolidated EBITDA because it is a term used in its revolving credit agreement. As defined in the credit agreement, Consolidated EBITDA represents earnings from continuing operations before interest, taxes, depreciation and amortization and non-cash asset impairment charges. Interest Coverage ratio is the ratio of Consolidated EBITDA to interest expense. The Company’s management believes disclosure of Consolidated EBITDA provides useful information to investors because it is used in the primary restrictive covenant in the Company’s credit agreement. For additional discussion of the Interest Coverage ratio and a reconciliation of Consolidated EBITDA, see “Financial Position and Liquidity - Financing Activities - Credit Arrangements” above.
EBIT represents earnings from continuing operations before income taxes, interest income and interest expense. EBIT margin is the ratio of EBIT to net sales. The Company’s management believes these measures provide useful additional information to investors to enhance their understanding about trends in the Company’s operations and are useful for period-over-period comparisons.
Economic profit (EP) is defined by the Company as earnings from continuing operations before income taxes, excluding non-cash U.S. GAAP restructuring and intangible asset impairment charges, and interest expense; less income taxes (calculated utilizing the Company’s effective tax rate), and less a capital charge (calculated as average capital employed multiplied by a cost of capital percentage rate). EP is a key financial metric the Company’s management uses to evaluate business performance and allocate resources, and is a component in determining employee incentive compensation. The Company’s management believes EP provides additional perspective to investors about financial returns generated by the business and represents profit generated over and above the cost of capital used by the business to generate that profit. Refer to Exhibit 99.2 for a reconciliation of EP to earnings from continuing operations before income taxes.
Organic sales growth is defined as net sales growth excluding the effect of foreign exchange rate changes and any acquisitions and divestitures. Management believes that the presentation of organic sales growth is useful to investors because it excludes sales from any acquisitions and divestitures, which results in a comparison of sales only from the businesses that the Company was operating and expects to operate throughout the relevant periods, and the Company’s estimate of the impact of foreign exchange rate changes, which are difficult to predict, and out of the control of the Company and management.

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Appendix B
CAUTIONARY STATEMENT
This Annual Report on Form 10-K (this Report), including the exhibits hereto and the information incorporated by reference herein, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements involve risks and uncertainties. Except for historical information, statements about future volumes, sales, organic sales growth, foreign currencies, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, foreign currency exchange rates, tax rates, cash flows, plans, objectives, expectations, growth or profitability are forward-looking statements based on management’s estimates, beliefs, assumptions and projections. Words such as “could,” “may,” “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that could affect performance and cause results to differ materially from management’s expectations are described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report, as updated from time to time in the Company’s Securities and Exchange Commission filings. These factors include, but are not limited to:

●	intense competition in the Company’s markets;	
●	the impact of the changing retail environment, including the growth of alternative retail channels and business models, and changing consumer preferences;	
●	volatility and increases in commodity costs such as resin, sodium hypochlorite and agricultural commodities, and increases in energy, transportation or other costs;	
●	the ability of the Company to drive sales growth, increase prices and market share, grow its product categories and manage favorable product and geographic mix;	
●	dependence on key customers and risks related to customer consolidation and ordering patterns;	
●	risks related to the Company’s use of and reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or Company information, or service interruptions;	
●	the Company’s ability to maintain its business reputation and the reputation of its brands and products;	
●	risks relating to acquisitions, new ventures and divestitures, and associated costs, including the potential for asset impairment charges related to, among others, intangible assets and goodwill; and the ability to complete announced transactions and, if completed, integration costs and potential contingent liabilities related to those transactions;	
●	lower revenue, increased costs or reputational harm resulting from government actions and regulations;	
●	the ability of the Company to successfully manage global, political, legal, tax and regulatory risks, including changes in regulatory or administrative activity;	
●	worldwide, regional and local economic and financial market conditions;	
●	risks related to international operations and international trade, including foreign currency fluctuations, including devaluations, and foreign currency exchange rate controls, including periodic changes in such controls; changes in U.S. immigration or trade policies, including the imposition of new or additional tariffs, labor claims, labor unrest and inflationary pressures, particularly in Argentina; political instability and the uncertainty regarding the outcome of Brexit; government-imposed price controls or other regulations; potential negative impact and liabilities from the use, storage and transportation of chlorine in certain international markets where chlorine is used in the production of bleach; and the possibility of nationalization, expropriation of assets or other government action;	
●	the ability of the Company to innovate and to develop and introduce commercially successful products, or expand into adjacent categories and countries;	
●	the impact of product liability claims, labor claims and other legal or tax proceedings, including in foreign jurisdictions;	
●	the ability of the Company to implement and generate cost savings and efficiencies;	
●	the success of the Company’s business strategies;	
●	risks related to additional increases in the estimated fair value of P&G’s interest in the Glad® business;	

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Appendix B

●	the Company’s ability to attract and retain key personnel;	
●	supply disruptions and other risks inherent in reliance on a limited base of suppliers;	
●	environmental matters, including costs associated with the remediation and monitoring of past contamination, and possible increases in costs resulting from actions by relevant regulators, and the handling and/or transportation of hazardous substances;	
●	increased focus by governmental and non-governmental organizations, customers, consumers and investors on sustainability issues, including those related to climate change;	
●	the facilities of the Company and its suppliers being subject to disruption by events beyond the Company’s control, including work stoppages, cyber-attacks, natural disasters and terrorism;	
●	the Company’s ability to maximize, assert and defend its intellectual property rights;	
●	any infringement or claimed infringement by the Company of third-party intellectual property rights;	
●	the accuracy of the Company’s estimates and assumptions on which its financial projections are based;	
●	the effect of the Company’s indebtedness and credit rating on its business operations and financial results;	
●	the Company’s ability to pay and declare dividends or repurchase its stock in the future;	
●	uncertainties relating to tax positions, tax disputes and changes in the Company’s tax rate, and any additional effects of the Tax Act on the Company;	
●	the Company’s ability to maintain an effective system of internal controls;	
●	the impacts of potential stockholder activism; and	
●	risks related to the Company’s discontinuation of operations in Venezuela.	
The Company’s forward-looking statements in this Report are based on management’s current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this Report. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.
In this Report, unless the context requires otherwise, the terms “the Company,” “Clorox,” “we,” “us,” and “our” refer to The Clorox Company and its subsidiaries.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of its Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Management evaluated the effectiveness of the Company’s internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework published in 2013. Management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2019, and concluded that it is effective.
The Company’s independent registered public accounting firm, Ernst & Young LLP, has audited the effectiveness of the Company’s internal control over financial reporting as of June 30, 2019, as stated in their report, which is included herein.

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Appendix B
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of The Clorox Company
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of The Clorox Company (the Company) as of June 30, 2019 and 2018, the related consolidated statements of earnings, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended June 30, 2019, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2019, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated August 13, 2019 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

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Appendix B

 	 	Valuation of Goodwill and Trademarks with Indefinite Lives	
Description of the
Matter	    	At June 30, 2019, the Company’s goodwill was $1.6 billion and represented 31% of total assets; trademarks with indefinite lives was $777 million and represented 15% of total assets. As discussed in Note 1 of the consolidated financial statements, goodwill and trademarks with indefinite lives are tested by the Company’s management for impairment at least annually, in the fiscal fourth quarter, unless there are indications of impairment at other points throughout the year. Goodwill is tested for impairment at the reporting unit level.
Auditing the Company’s annual impairment test for goodwill and trademarks with indefinite lives is complex and highly judgmental and required the involvement of a valuation specialist due to the significant judgment in estimating the fair value of reporting units and trademarks with indefinite lives. In particular, the fair value estimates of reporting units with fair values that do not significantly exceed their carrying values are sensitive to assumptions such as net sales growth rates, gross margins and discount rates. Trademarks with indefinite lives with fair values that do not significantly exceed their carrying values are sensitive to assumptions such as net sales growth rates, discount rates and royalty rates. All of these assumptions are sensitive to and affected by expected future market or economic conditions, particularly those in emerging markets, and industry and company-specific qualitative factors.	
		 	
How We
Addressed the
Matter in Our
Audit		We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill and trademarks impairment review process. This included evaluating controls over the Company’s budgetary and forecasting process used to develop the estimated future earnings and cash flows used in estimating the fair value of reporting units and trademarks with indefinite lives. We also tested controls over management’s review of the data used in their valuation models and review of the significant assumptions such as estimation of net sales, expense growth rates and terminal growth rates.
To test the estimated fair value of the Company’s reporting units and trademarks with indefinite lives (with fair values that do not significantly exceed carrying values), we performed audit procedures that included, among others, assessing the methodologies, testing the significant assumptions discussed above used to develop the estimates of future earnings and cash flows and testing the completeness and accuracy of the underlying data. We compared the significant assumptions used by management to current industry and economic trends, the Company’s historical results and other guideline companies within the same industry, and evaluated whether changes in the Company’s business would affect the significant assumptions. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the change in the fair value of the reporting units and trademarks with indefinite lives resulting from changes in these assumptions. We involved our valuation specialists to assist in reviewing the valuation methodology and testing the terminal growth rates, discount rates and royalty rates.
In addition, for goodwill we also tested the Company’s calculation of implied multiples of the reporting units, compared them to guideline companies and evaluated the resulting premium. For trademarks with indefinite lives, where applicable, we also assessed whether the assumptions used were consistent with those used in the goodwill impairment review process.	

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Appendix B

 	 	Valuation of Venture Agreement Terminal Obligation	
Description of the
Matter	    	As discussed in Note 8 of the consolidated financial statements, the Company has an agreement with The Proctor & Gamble Company (P&G) for the Company’s Glad® bags, wraps and containers business, for which the Company is required to purchase P&G’s 20% interest in the venture for cash at fair value of the global Glad® business upon termination of the agreement. At June 30, 2019, the fair value of $370 million has been recognized as a venture agreement terminal obligation and represented 8% of total liabilities.
Auditing the Company’s Glad® venture agreement terminal obligation is complex and highly judgmental and required the involvement of a valuation specialist due to the significant judgment in estimating the fair value of the global Glad® business. In particular, the fair value estimate is sensitive to assumptions such as net sales growth rates, gross margins, discount rate and commodity prices. These assumptions are sensitive to and affected by expected future market or economic conditions, particularly those in emerging markets, and industry and company-specific qualitative factors.	
		  	
How We
Addressed the
Matter in Our
Audit		We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the venture agreement terminal obligation valuation review process. This included controls over the Company’s budgetary and forecasting process used to develop the estimated fair value of the global Glad® business. We also tested management’s controls over the data used in their valuation models and review of the significant assumptions such as estimation of net sales, expense growth rates, terminal growth rates and commodity prices.
To test the estimated fair value of the venture agreement terminal obligation, we performed audit procedures that included, among others, assessing the methodologies, testing the significant assumptions discussed above used to develop estimates of future earnings and cash flows, testing the completeness and accuracy of the underlying data and comparing the assumptions used for the U.S. Glad® business with those used in the valuation of the Glad® reporting unit for goodwill impairment review purposes. We compared the significant assumptions used by management to current industry and economic trends, the Company’s historical results and other guideline companies within the same industry, and evaluated whether changes in the Company’s business, including shifts in consumer demands and commodity prices, would affect the significant assumptions. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the change in the fair value of the venture agreement terminal obligation resulting from changes in these assumptions. We involved our valuation specialist to assist in reviewing the valuation methodology and testing the terminal growth rates and discount rates.	
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2003.
San Francisco, CA
 August 13, 2019

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Appendix B
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of The Clorox Company
Opinion on Internal Control Over Financial Reporting
We have audited The Clorox Company’s internal control over financial reporting as of June 30, 2019, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, The Clorox Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of June 30, 2019, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of The Clorox Company as of June 30, 2019 and 2018, the related consolidated statements of earnings, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended June 30, 2019, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated August 13, 2019 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

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Appendix B
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
San Francisco, CA
 August 13, 2019

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Appendix B
CONSOLIDATED STATEMENTS OF EARNINGS
 The Clorox Company

Years ended June 30
Dollars in millions, except share and per share data		2019		2018			2017		
Net sales	     	    	$	6,214	     	   	$	6,124		     	   	$	5,973		
Cost of products sold		 		3,486		 		3,449			 		3,302		
Gross profit		 		2,728		 		2,675			 		2,671		
 		 				 					 				
Selling and administrative expenses		 		856		 		837			 		810		
Advertising costs		 		612		 		570			 		599		
Research and development costs		 		136		 		132			 		135		
Interest expense		 		97		 		85			 		88		
Other (income) expense, net		 		3		 		(3	)		 		6		
Earnings from continuing operations before income taxes		 		1,024		 		1,054			 		1,033		
Income taxes on continuing operations		 		204		 		231			 		330		
Earnings from continuing operations		 		820		 		823			 		703		
Losses from discontinued operations, net of tax		 		–		 		–			 		(2	)	
Net earnings		 	$	820		 	$	823			 	$	701		
 		 				 					 				
Net earnings (losses) per share		 				 					 				
Basic		 				 					 				
Continuing operations		 	$	6.42		 	$	6.37			 	$	5.45		
Discontinued operations		 		–		 		–			 		(0.02	)	
Basic net earnings per share		 	$	6.42		 	$	6.37			 	$	5.43		
 		 				 					 				
Diluted		 				 					 				
Continuing operations		 	$	6.32		 	$	6.26			 	$	5.35		
Discontinued operations		 		–		 		–			 		(0.02	)	
Diluted net earnings per share		 	$	6.32		 	$	6.26			 	$	5.33		
 		 				 					 				
Weighted average shares outstanding (in thousands)		 				 					 				
Basic		 		127,734		 		129,293			 		128,953		
Diluted		 		129,792		 		131,581			 		131,566		
See Notes to Consolidated Financial Statements

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Appendix B
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 The Clorox Company

Years ended June 30
Dollars in millions		2019			2018			2017		
Earnings from continuing operations	     	$	820		     	$	823		     	$	703		
Losses from discontinued operations, net of tax			–				–				(2	)	
Net earnings			820				823				701		
Other comprehensive income (loss):													
Foreign currency adjustments, net of tax			(22	)			(28	)			(3	)	
Net unrealized gains (losses) on derivatives, net of tax			2				12				7		
Pension and postretirement benefit adjustments, net of tax			4				12				23		
Total other comprehensive income (loss), net of tax			(16	)			(4	)			27		
Comprehensive income		$	804			$	819			$	728		
 	 	 	 	 	 	 	 	 	 	 	 	 	
See Notes to Consolidated Financial Statements

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Appendix B
CONSOLIDATED BALANCE SHEETS
 The Clorox Company

As of June 30
Dollars in millions, except share and per share data		2019			2018		
ASSETS	       	 				       	 				
Current assets		 					 				
Cash and cash equivalents		    	$	111			  	$	131		
Receivables, net		 		631			 		600		
Inventories, net		 		512			 		506		
Prepaid expenses and other current assets		 		51			 		74		
Total current assets		 		1,305			 		1,311		
Property, plant and equipment, net		 		1,034			 		996		
Goodwill		 		1,591			 		1,602		
Trademarks, net		 		791			 		795		
Other intangible assets, net		 		121			 		134		
Other assets		 		274			 		222		
Total assets		 	$	5,116			 	$	5,060		
 		 					 				
LIABILITIES AND STOCKHOLDERS’ EQUITY		 					 				
Current liabilities		 					 				
Notes and loans payable		 	$	396			 	$	199		
Accounts payable and accrued liabilities		 		1,035			 		1,001		
Income taxes payable		 		9			 		—		
Total current liabilities		 		1,440			 		1,200		
Long-term debt		 		2,287			 		2,284		
Other liabilities		 		780			 		778		
Deferred income taxes		 		50			 		72		
Total liabilities		 		4,557			 		4,334		
 		 					 				
Commitments and contingencies		 					 				
 		 					 				
Stockholders’ equity		 					 				
Preferred stock: $1.00 par value; 5,000,000 shares authorized; none issued or outstanding		 		—			 		—		
Common stock: $1.00 par value; 750,000,000 shares authorized; 158,741,461
shares issued as of June 30, 2019 and 2018; and 125,686,325 and 127,982,767
shares outstanding as of June 30, 2019 and 2018, respectively		 		159			 		159		
Additional paid-in capital		 		1,046			 		975		
Retained earnings		 		3,150			 		2,797		
Treasury shares, at cost: 33,055,136 and 30,758,694 shares
as of June 30, 2019 and 2018, respectively		 		(3,194	)		 		(2,658	)	
Accumulated other comprehensive net (loss) income		 		(602	)		 		(547	)	
Stockholders’ equity		 		559			 		726		
Total liabilities and stockholders’ equity		 	$	5,116			 	$	5,060		
 	 	 	 	 	 	 	 	 	 	 	
See Notes to Consolidated Financial Statements

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Appendix B
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
 The Clorox Company

		Common Stock		 					 					Treasury Stock			 	 				 				
Dollars in millions,
except per share data		Amount		Shares (in
thousands)		Additional
Paid-in
Capital			Retained
Earnings			Amount			Shares (in
thousands)			Accumulated
Other
Comprehensive
Net (Loss)
Income			Total		
Balance as of June 30, 2016	   	    	$	159	   	     	158,741	   	      	$	868		   	    	$	2,163		   	$	(2,323	)	   	     	(29,386	)	   	              	$	(570	)	   	  	$	297		
Net earnings		 				 			 					 		701							 				 	 				 		701		
Other comprehensive
income (loss)		 				 			 					 									 				 	 	27			 		27		
Dividends ($3.24 per
share declared)		 				 			 					 		(421	)						 				 	 				 		(421	)	
Stock-based compensation		 				 			 		51			 									 				 	 				 		51		
Other employee stock
plan activities		 				 			 		9			 		(3	)			70			 	1,164			 	 				 		76		
Treasury stock purchased		 				 			 					 						(189	)		 	(1,505	)		 	 				 		(189	)	
Balance as of June 30, 2017		 		159		 	158,741		 		928			 		2,440				(2,442	)		 	(29,727	)		 	 	(543	)		 		542		
Net earnings		 				 			 					 		823							 				 	 				 		823		
Other comprehensive
income (loss)		 				 			 					 									 				 	 	(4	)		 		(4	)	
Dividends ($3.60 per
share declared)		 				 			 					 		(467	)						 				 	 				 		(467	)	
Stock-based compensation		 				 			 		53			 									 				 	 				 		53		
Other employee stock
plan activities		 				 			 		(6	)		 		1				56			 	1,139			 	 				 		51		
Treasury stock purchased		 				 			 					 						(272	)		 	(2,171	)		 	 				 		(272	)	
Balance as of June 30, 2018		 		159		 	158,741		 		975			 		2,797				(2,658	)		 	(30,759	)		 	 	(547	)		 		726		
Cumulative effect of
accounting changes(1)		 				 			 					 		36							 				 	 	(39	)		 		(3	)	
Net earnings		 				 			 					 		820							 				 	 				 		820		
Other comprehensive
income (loss)		 				 			 					 									 				 	 	(16	)		 		(16	)	
Dividends ($3.94 per
share declared)		 				 			 					 		(503	)						 				 	 				 		(503	)	
Stock-based compensation		 				 			 		43			 									 				 	 				 		43		
Other employee stock
plan activities		 				 			 		28			 		—				124			 	2,178			 	 				 		152		
Treasury stock purchased		 				 			 					 						(660	)		 	(4,474	)		 	 				 		(660	)	
Balance as of June 30, 2019		 	$	159		 	158,741		 	$	1,046			 	$	3,150			$	(3,194	)		 	(33,055	)		 	$	(602	)		 	$	559		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(1)	The opening balances of Retained Earnings and Accumulated other comprehensive net (loss) income were adjusted as a result of adopting Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” on July 1, 2018 and ASU No. 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” on April 1, 2019, respectively. See Note 1 for more information.	
See Notes to Consolidated Financial Statements

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Table of Contents
Appendix B
CONSOLIDATED STATEMENTS OF CASH FLOWS
 The Clorox Company

Years ended June 30
Dollars in millions		2019			2018			2017		
	       				(As Adjusted*)		(As Adjusted*)		
Operating activities:													
Net earnings		$	820		                    	$	823		                    	$	701		
Deduct: Losses from discontinued operations, net of tax			—				—				(2	)	
Earnings from continuing operations			820				823				703		
Adjustments to reconcile earnings from continuing operations to net cash
provided by continuing operations:													
Depreciation and amortization			180				166				163		
Stock-based compensation			43				53				51		
Deferred income taxes			(20	)			(23	)			(35	)	
Other			(29	)			44				33		
Changes in:													
Receivables, net			(32	)			(24	)			(1	)	
Inventories, net			(7	)			(21	)			(19	)	
Prepaid expenses and other current assets			(6	)			4				(5	)	
Accounts payable and accrued liabilities			17				(47	)			(34	)	
Income taxes payable/receivable, net			26				1				12		
Net cash provided by continuing operations			992				976				868		
Net cash used for discontinued operations			—				—				(3	)	
Net cash provided by operations			992				976				865		
 													
Investing activities:													
Capital expenditures			(206	)			(194	)			(231	)	
Businesses acquired, net of cash acquired			—				(681	)			—		
Other			10				16				26		
Net cash used for investing activities			(196	)			(859	)			(205	)	
 													
Financing activities:													
Notes and loans payable, net			189				(214	)			(125	)	
Long-term debt borrowings, net of issuance costs			—				891				—		
Long-term debt repayments			—				(400	)			—		
Treasury stock purchased			(661	)			(271	)			(183	)	
Cash dividends paid			(490	)			(450	)			(412	)	
Issuance of common stock for employee stock plans and other			147				45				75		
Net cash used for financing activities			(815	)			(399	)			(645	)	
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(2	)			(3	)			(1	)	
Net increase (decrease) in cash, cash equivalents and restricted cash			(21	)			(285	)			14		
Cash, cash equivalents and restricted cash:													
Beginning of year			134				419				405		
End of year		$	113			$	134			$	419		
 													
Supplemental cash flow information:													
Interest paid		$	87			$	75			$	78		
Income taxes paid, net of refunds			207				245				347		
Non-cash financing activities:													
Cash dividends declared and accrued, but not paid			133				123				108		
*	Adjusted to reflect the retrospective adoption of ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” effective July 1, 2018. See Note 1 for more information related to restricted cash.	
See Notes to Consolidated Financial Statements

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Table of Contents
Appendix B
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Clorox Company
(Dollars in millions, except share and per share data)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations and Basis of Presentation
The Company is principally engaged in the production, marketing and sales of consumer products through mass retailers, grocery outlets, warehouse clubs, dollar stores, home hardware centers, drug, pet and military stores, third-party and owned e-commerce channels, and distributors. The consolidated financial statements include the statements of the Company and its wholly owned and controlled subsidiaries. All significant intercompany transactions and accounts were eliminated in consolidation. Certain prior year reclassifications were made in the consolidated financial statements and related notes to the consolidated financial statements to conform to the current year presentation.
Effective September 22, 2014, the Company’s Venezuela affiliate, Corporación Clorox de Venezuela S.A. (Clorox Venezuela), discontinued its operations. Consequently, the Company presents the financial results of Clorox Venezuela as a discontinued operation in the consolidated financial statements for all periods presented herein.
Use of Estimates
The preparation of these consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) requires management to reach opinions as to estimates and assumptions that affect reported amounts and related disclosures. Specific areas requiring the application of management’s estimates and judgments include, among others, assumptions pertaining to accruals for consumer and trade-promotion programs, stock-based compensation, retirement income plans, future cash flows associated with impairment testing of goodwill and other long-lived assets and the valuation of the venture agreement terminal obligation, the valuation of assets acquired and liabilities assumed in connection with a business combination, the credit worthiness of customers, uncertain tax positions, tax valuation allowances and legal, environmental and insurance matters. Actual results could materially differ from estimates and assumptions made.
Cash, Cash Equivalents and Restricted Cash
Cash equivalents consist of highly liquid interest-bearing accounts, time deposits held by financial institutions and money market funds with an initial maturity at purchase of three months or less. The fair value of cash and cash equivalents approximates the carrying amount.
The Company’s cash position includes amounts held by foreign subsidiaries and, as a result, the repatriation of certain cash balances from some of the Company’s foreign subsidiaries could result in additional withholding tax costs in certain foreign jurisdictions. However, these cash balances are generally available without legal restriction to fund local business operations. In addition, a portion of the Company’s cash balance is held in U.S. dollars by foreign subsidiaries whose functional currency is their local currency. Such U.S. dollar balances are reported on the foreign subsidiaries’ books in their functional currency, and the impact on such balances from foreign currency exchange rate differences is recorded in Other (income) expense, net.
As of June 30, 2019, 2018, 2017, and 2016, the Company had $2, $3, $2 and $4 of restricted cash, respectively, which was primarily related to a cash margin deposit held for exchange-traded futures contracts. The June 30, 2017 and 2016 balances also included restricted cash related to fiscal year 2012 acquisitions. The restricted cash was included in Prepaid expenses and other current assets and Other assets as of June 30, 2019, 2018, 2017 and 2016.
Inventories
The Company values its inventories using both the First-In, First-Out (“FIFO”) and the Last-In, First-Out (“LIFO”) methods. The FIFO inventory is stated at the lower of cost or net realizable value, which includes any costs to sell or dispose. In addition, appropriate consideration is given to obsolescence, excessive inventory levels, product deterioration and other factors in evaluating net realizable value. The LIFO inventory is stated at the lower of cost or market.

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Table of Contents
Appendix B
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property, Plant and Equipment and Finite-Lived Intangible Assets
Property, plant and equipment and finite-lived intangible assets are stated at cost. Depreciation and amortization expense are primarily calculated by the straight-line method using the estimated useful lives or lives determined by reference to the related lease contract in the case of leasehold improvements. The table below provides estimated useful lives of property, plant and equipment by asset classification.

	     	Estimated
Useful Lives	
Buildings and leasehold improvements		7 - 40 years	
Land improvements		10 - 30 years	
Machinery and equipment		3 - 15 years	
Computer equipment		3 - 5 years	
Capitalized software costs		3 - 7 years	
Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset (or asset group) may not be fully recoverable. The risk of impairment is initially assessed based on an estimate of the undiscounted cash flows at the lowest level for which identifiable cash flows exist. Impairment occurs when the carrying value of the asset exceeds the estimated future undiscounted cash flows generated by the asset. When impairment is indicated, an impairment charge is recorded for the difference between the carrying value of the asset and its estimated fair market value. Depending on the asset, estimated fair market value may be determined either by use of a discounted cash flow model or by reference to estimated selling values of assets in similar condition.
Capitalization of Software Costs
The Company capitalizes certain qualifying costs incurred in the acquisition and development of software for internal use, including the costs of the software, materials, consultants, interest and payroll and payroll-related costs for employees during the application development stage. Internal and external costs incurred during the preliminary project stage and post implementation-operation stage, mainly training and maintenance costs, are expensed as incurred. Once the application is substantially complete and ready for its intended use, qualifying costs are amortized on a straight-line basis over the software’s estimated useful life.
Impairment Review of Goodwill and Indefinite-Lived Intangible Assets
The Company tests its goodwill, trademarks with indefinite lives and other indefinite-lived intangible assets annually for impairment in the fiscal fourth quarter unless there are indications during a different interim period that these assets may have become impaired.
With respect to goodwill, the Company has the option to first assess qualitative factors such as the maturity and stability of the reporting unit, the magnitude of the excess fair value over carrying value from the prior year’s impairment testing, other reporting unit specific operating results as well as new events and circumstances impacting the operations at the reporting unit level. If the result of a qualitative test indicates a potential for impairment of a reporting unit, a quantitative test is performed. The quantitative test is a two-step process. In the first step, the Company compares the estimated fair value of the reporting unit to its carrying value. In all instances, the estimated fair value exceeded the carrying value of the reporting unit. Had the estimated fair value of any reporting unit been less than its carrying value, the Company would have performed a second step to determine the implied fair value of the reporting unit’s goodwill. If the carrying amount of a reporting unit’s goodwill had exceeded its implied fair value, an impairment charge would have been recorded for the difference between the carrying amount and the implied fair value of the reporting unit’s goodwill.
To determine the fair value of a reporting unit as part of its quantitative test, the Company uses a discounted cash flow (DCF) method under the income approach, as it believes that this approach is the most reliable indicator of the fair value of its businesses and the fair value of their future earnings and cash flows. Under this approach, which requires significant judgments, the Company estimates the future cash flows of each reporting unit and discounts these cash

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Table of Contents
Appendix B
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
flows at a rate of return that reflects their relative risk. The cash flows used in the DCF method are consistent with those the Company uses in its internal planning, which gives consideration to actual business trends experienced, and the broader business strategy for the long term. The other key estimates and factors used in the DCF method include, but are not limited to, future volumes, net sales and expense growth rates, commodity prices, changes in working capital, foreign exchange rates, inflation and a terminal growth rate. Changes in such estimates or the application of alternative assumptions could produce different results.
For trademarks and other intangible assets with indefinite lives, the Company performs a quantitative analysis to test for impairment. When a quantitative test is performed, the estimated fair value of an asset is compared to its carrying amount. If the carrying amount of such asset exceeds its estimated fair value, an impairment charge is recorded for the difference between the carrying amount and the estimated fair value. The Company uses the income approach to estimate the fair value of its trademarks and other intangible assets with indefinite lives. This approach requires significant judgments in determining the royalty rates and the assets’ estimated cash flows as well as the appropriate discount and foreign exchange rates applied to those cash flows to determine fair value. Changes in such estimates or the use of alternative assumptions could produce different results.
Stock-based Compensation
The Company grants various nonqualified stock-based compensation awards to eligible employees, including stock options, restricted stock and performance shares.
For stock options, the Company estimates the fair value of each award on the date of grant using the Black-Scholes valuation model, which requires management to make estimates regarding expected option life, stock price volatility and other assumptions. Groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The Company estimates stock option forfeitures based on historical data for each employee grouping. The total number of stock options expected to vest is adjusted by actual and estimated forfeitures. Changes to the actual and estimated forfeitures will result in a cumulative adjustment in the period of change. Compensation expense is recorded by amortizing the grant date fair values on a straight-line basis over the vesting period, adjusted for estimated forfeitures.
The Company’s performance shares provide for the issuance of common stock to certain managerial staff and executive management if the Company achieves specified performance targets. The number of shares issued is dependent upon the achievement of specified performance targets. The performance period is three years and the payout determination is made at the end of the three-year performance period. Performance shares receive dividends earned during the vesting period upon vesting. The fair value of each grant issued is estimated on the date of grant based on the current market price of the stock. The total amount of compensation expense recognized reflects estimated forfeiture rates and management’s assessment of the probability that performance goals will be achieved. A cumulative adjustment is recognized to compensation expense in the current period to reflect any changes in the probability of achievement of performance goals.
Cash flows resulting from tax deductions in excess of the cumulative compensation cost recognized for stock-based payment arrangements (excess tax benefits) are classified as operating cash inflows.
Employee Benefits
The Company accounts for its retirement income and retirement health care plans using actuarial methods. These methods use an attribution approach that generally spreads “plan events” over the service lives or expected lifetime (for frozen plans) of plan participants. Examples of plan events are plan amendments and changes in actuarial assumptions such as the expected return on plan assets, discount rate, rate of compensation increase and certain employee-related factors, such as retirement age and mortality. The principle underlying the attribution approach is that employees render service over their employment period on a relatively “smooth” basis and, therefore, the statement of earnings effects of retirement income and retirement health care plans are recognized in the same pattern. One of the principal assumptions used in the net periodic benefit cost calculation is the expected return on plan assets. The expected return on plan assets may result in recognized expense or income that differs from the actual returns of those plan assets in any given year. Over time, however, the goal is for the expected long-term returns to approximate the actual returns

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Table of Contents
Appendix B
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
and, therefore, the expectation is that the pattern of income and expense recognition should closely match the pattern of the services provided by the participants. The Company uses a market-related value method for calculating plan assets for purposes of determining the amortization of actuarial gains and losses. The differences between actual and expected returns are recognized in the net periodic benefit cost calculation over the average remaining service period or expected lifetime (for frozen plans) of the plan participants using the corridor approach. Under this approach, only actuarial gains (losses) that exceed 5% of the greater of the projected benefit obligation or the market-related value of assets are amortized to the Company’s net periodic benefit cost. In developing its expected return on plan assets, the Company considers the long-term actual returns relative to the mix of investments that comprise its plan assets and also develops estimates of future investment returns by considering external sources.
The Company recognizes an actuarial-based obligation at the onset of disability for certain benefits provided to individuals after employment, but before retirement, that include medical, dental, vision, life and other benefits.
Environmental Costs
The Company is involved in certain environmental remediation and ongoing compliance activities. Accruals for environmental matters are recorded on a site-by-site basis when it is probable that a liability has been incurred and based upon a reasonable estimate of the liability. The Company’s accruals reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. These accruals are adjusted periodically as assessment and remediation efforts progress or as additional technical or legal information becomes available. Actual costs to be incurred at identified sites in future periods may vary from the estimates, given the inherent uncertainties in evaluating environmental exposures. The accrual for environmental matters is included in Accounts payable and accrued liabilities and Other liabilities in the Company’s consolidated balance sheets on an undiscounted basis due to uncertainty regarding the timing of future payments.
Revenue Recognition
Revenue is recognized when performance obligations under the terms of the contracts with customers are satisfied. The Company’s performance obligation generally consists of the promise to sell finished products to wholesalers, distributors, retailers or consumers. Control of finished products is transferred upon shipment to, or receipt at, customers’ locations, as determined by the specific terms of the customer contract. Shipping and handling activities are accounted for as contract fulfillment costs and classified as Cost of products sold. Once control is transferred to the customer, the Company has completed its performance obligation, and revenue is recognized. After the completion of the performance obligation, there is an unconditional right to consideration as outlined in the contract. A right is considered unconditional if nothing other than the passage of time is required before payment of that consideration is due. The Company typically collects its customer receivables within two months. All performance obligations under the terms of contracts with customers have an original duration of one year or less.
The Company routinely commits to one-time or ongoing trade-promotion programs with customers and consumer coupon programs that require the Company to estimate and accrue the expected costs of such programs, which include shelf price reductions, end-of-aisle or in-store displays of the Company’s products and graphics and other trade-promotion activities conducted by the customer. The costs of such activities, defined as variable consideration under Topic 606 of the Accounting Standards Codification, “Revenue from Contracts with Customers,” are netted against sales and recorded when the related sales take place. The accruals for trade promotion programs and consumer coupons are established based on the Company’s best estimate of the amounts necessary to settle existing and future obligations for products sold as of the balance sheet date. The Company uses forecasted appropriations, historical trend analysis, and customer and sales organization inputs in determining the accruals for trade promotional activities, and uses historical trend experience and coupon redemption estimates for the coupon accruals.
The Company provides an allowance for doubtful accounts based on its historical experience and ongoing assessment of its customers’ credit risk and aging. Receivables were presented net of an allowance for doubtful accounts of $4 and $7 as of June 30, 2019 and 2018, respectively. Receivables, net, included non-customer receivables of $17 and $10 as of June 30, 2019 and 2018, respectively.

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Table of Contents
Appendix B
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cost of Products Sold
Cost of products sold represents the costs directly related to the manufacture and distribution of the Company’s products and primarily includes raw materials, packaging, contract manufacturing fees, shipping and handling, warehousing, package design, depreciation, amortization, direct and indirect labor and operating costs for the Company’s manufacturing and distribution facilities, including salary, benefit costs and incentive compensation, and royalties and other charges related to the Company’s Glad® Venture Agreement (See Note 8).
Costs associated with developing and designing new packaging, including design, artwork, films and labeling, are expensed as incurred and included within Cost of products sold.
Selling and Administrative Expenses
Selling and administrative expenses represent costs incurred by the Company in generating revenues and managing the business and include market research, commissions and certain administrative expenses. Administrative expenses include salary, benefits, incentive compensation, professional fees and services and other operating costs associated with the Company’s non-manufacturing, non-research and development staff, facilities and equipment, as well as software and licensing fees.
Advertising and Research and Development Costs
The Company expenses advertising and research and development costs in the period incurred.
Income Taxes
The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between financial statement amounts and their respective tax basis. Management reviews the Company’s deferred tax assets to determine whether their value can be realized based upon available evidence. A valuation allowance is established when management believes that it is more likely than not that some portion of its deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the Company’s income tax provision in the period of change. In addition to valuation allowances, the Company provides for uncertain tax positions when such tax positions do not meet certain recognition thresholds or measurement standards. Amounts for uncertain tax positions are adjusted in quarters when new information becomes available or when positions are effectively settled.
Per U.S. GAAP, foreign withholding taxes are provided on unremitted foreign earnings that are not indefinitely reinvested at the time the earnings are generated. The Company regularly reviews and assesses whether there are any changes to its indefinite reinvestment assertion. Through the second quarter of fiscal year 2018, the Company had determined that the undistributed earnings of a number of its foreign subsidiaries were indefinitely reinvested. In December 2017, The Tax Cuts and Jobs Act (the Tax Act) was passed into law, which significantly reduced the cost of U.S. repatriation. In the third quarter of fiscal year 2018, the Company concluded an analysis wherein it determined that none of the undistributed earnings of its foreign subsidiaries were indefinitely reinvested. As a result, the Company is providing foreign withholding taxes on the undistributed earnings of all foreign subsidiaries where applicable.
Foreign Currency Transactions and Translation
Local currencies are the functional currencies for substantially all of the Company’s foreign operations. When the transactional currency is different than the functional currency, transaction gains and losses are included as a component of Other (income) expense, net. In addition, certain assets and liabilities denominated in currencies other than a foreign subsidiary’s functional currency are reported on the subsidiary’s books in its functional currency, with the impact from exchange rate differences recorded in Other (income) expense, net. Assets and liabilities of foreign operations are translated into U.S. dollars using the exchange rates in effect at the balance sheet date, while income and expenses are translated at the respective average monthly exchange rates during the year.

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Table of Contents
Appendix B
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Gains and losses on foreign currency translations are reported as a component of Other comprehensive income (loss). The income tax effect of currency translation adjustments is recorded as a component of deferred taxes with an offset to Other comprehensive income (loss) where appropriate.
Effective July 1, 2018, under the requirements of U.S. GAAP, Argentina was designated as a highly inflationary economy, since it has experienced cumulative inflation of approximately 100 percent or more over a three-year period. As a result, beginning July 1, 2018, the U.S. dollar replaced the Argentine peso as the functional currency of the Company’s subsidiaries in Argentina (collectively, “Clorox Argentina”). Consequently, gains and losses from non-U.S. dollar denominated monetary assets and liabilities for Clorox Argentina are recognized in Other (income) expense, net in the consolidated statement of earnings.
Derivative Instruments
The Company’s use of derivative instruments, principally swaps, futures and forward contracts, is limited to non-trading purposes and is designed to partially manage exposure to changes in commodity prices, interest rates and foreign currencies. The Company’s contracts are hedges for transactions with notional amounts and periods consistent with the related exposures and do not constitute investments independent of these exposures.
The changes in the fair value (i.e., gains or losses) of a derivative instrument are recorded as either assets or liabilities in the consolidated balance sheets with an offset to Net earnings or Other comprehensive income (loss) depending on whether, for accounting purposes, it has been designated and qualifies as an accounting hedge and, if so, on the type of hedging relationship. The criteria used to determine if hedge accounting treatment is appropriate are: (a) formal designation and documentation of the hedging relationship, the risk management objective and hedging strategy at hedge inception; (b) eligibility of hedged items, transactions and corresponding hedging instrument; and (c) effectiveness of the hedging relationship both at inception of the hedge and on an ongoing basis in achieving the hedging objectives. For those derivative instruments designated and qualifying as hedging instruments, the Company must designate the hedging instrument either as a fair value hedge or as a cash flow hedge. The Company designates its commodity forward and future contracts for forecasted purchases of raw materials, interest rate forward contracts for forecasted interest payments, and foreign currency forward contracts for forecasted purchases of inventory as cash flow hedges. During the fiscal years ended June 30, 2019, 2018 and 2017, the Company had no hedging instruments designated as fair value hedges.
For derivative instruments designated and qualifying as cash flow hedges, the effective portion of gains or losses is reported as a component of Other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. From time to time, the Company may have contracts not designated as hedges for accounting purposes, for which it recognizes changes in the fair value in the consolidated statement of earnings in the current period. Cash flows from hedging activities are classified as operating activities in the consolidated statements of cash flows.
Recently Issued Accounting Standards
Recently Issued Accounting Standards Not Yet Adopted
In August 2017, the Financial Accounting Standards Board (FASB) issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” which amends the hedge accounting recognition and presentation requirements to better align an entity’s risk management activities with its financial reporting. This standard also simplifies the application of hedge accounting in certain situations. The new guidance is effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted. The Company does not expect this guidance to have a material impact on its consolidated financial statements upon adoption.
In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The new guidance is effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

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Table of Contents
Appendix B
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize a right-of-use (ROU) asset and a lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation will depend on the classification of a lease as either a finance or an operating lease. ASU 2016-02 also requires expanded disclosures about leasing arrangements. The new guidance is effective for the Company beginning in the first quarter of fiscal year 2020, with early adoption permitted. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842), Targeted Improvements,” which provides an optional transition method in applying the new lease standard. Topic 842 can be applied using either a modified retrospective approach at the beginning of the earliest period presented, or, as permitted by ASU 2018-11, at the beginning of the period in which it is adopted. The Company will adopt the new standard in the first quarter of fiscal year 2020, on a modified retrospective basis using the optional transition method, and, accordingly, will not restate the comparative periods. The Company expects to elect certain practical expedients, including the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. The Company has substantially completed its plan for the adoption and implementation of this new accounting standard, including assessing its lease arrangements and implementing software to meet the reporting and disclosure requirements of this standard. The Company anticipates the adoption of this new standard will result in the recognition of ROU assets of between approximately $315 and $345 and aggregate current and non-current liabilities of between $350 and $380 on the Company’s consolidated balance sheet with the difference largely due to deferred rent that will be reclassified to the ROU asset. The Company also expects to record a cumulative-effect adjustment to the opening balance of Retained earnings of between approximately $20 and $25 related primarily to the remaining deferred gain from the sale-leaseback of the Company’s general office building in Oakland, California (see Note 8). This new standard is not expected to have a material impact on the Company’s consolidated statement of earnings or the consolidated statement of cash flows.
Recently Adopted Accounting Standards
In February 2018, the FASB issued ASU No. 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which amends its guidance to allow a reclassification from Accumulated Other Comprehensive Income to Retained Earnings for the stranded income tax effects resulting from the Tax Act. The Company early adopted this guidance in, and applied it to, the fourth quarter of fiscal year 2019. As a result of the adoption, the Company decreased Accumulated other comprehensive net (loss) income and increased Retained earnings by $39.
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which replaces most of the existing U.S. GAAP revenue recognition guidance and is intended to improve and converge with international standards on the financial reporting requirements for revenue from contracts with customers. The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU 2014-09 also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from contracts with customers, including information about significant judgments and changes in judgments.
The Company adopted the new guidance on a modified retrospective basis effective July 1, 2018, and the adoption did not have a material impact on the Company’s annual consolidated financial statements. However, there was an impact on the Company’s financial results in the interim periods due to the timing of recognition for certain trade promotion spending. Due to a change in the timing of recognition for certain trade promotion spending, the Company recorded an immaterial cumulative effect of initially applying the new guidance as an adjustment to the fiscal year 2019 opening balance of Retained earnings. Results for periods beginning on or after July 1, 2018 are recognized and presented in accordance with Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the prior accounting guidance under Topic 605, “Revenue Recognition.” The Company has made changes to its accounting policies, business processes, systems and controls to align with the new revenue recognition guidance and disclosure requirements.
In March 2017, the FASB issued ASU No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires presenting the service cost component of net periodic benefit cost in the same income statement line items as other employee compensation costs arising from services rendered during the period. This standard also requires that other components of the net periodic benefit cost be presented separately from the line item(s) that includes service costs and outside

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Table of Contents
Appendix B
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
of any subtotal of operating income, if one is presented, on a retrospective basis. The Company adopted this new guidance in the first quarter of fiscal year 2019 and the adoption did not have a material impact on the Company’s consolidated financial statements. Following the adoption of this guidance, the Company records the non-service cost components of net periodic benefit cost in Other (income) expense, net.
In March 2018, the FASB issued ASU No. 2018-05, “Income Taxes (Topic 740)-Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” which amends its guidance to address the initial accounting for the income tax effects of the Tax Act, which was enacted on December 22, 2017 (enactment date). This guidance allowed reasonable estimates of income tax effects to be reported as provisional amounts during the measurement period, which is one year from the enactment date, when the necessary information is not available, prepared, or analyzed in sufficient detail to complete the accounting. The amendments also added specific disclosure requirements. The Company has adopted this new guidance. The Company recorded $81 of provisional benefits in the second quarter of fiscal year 2018. Refer to Note 16 for more information.
NOTE 2. BUSINESS ACQUIRED
Nutranext Acquisition
On April 2, 2018, the Company acquired 100 percent of Nutranext, a dietary supplements company based in Sunrise, Florida. Nutranext manufactures and markets leading dietary supplement brands in the retail and e-commerce channels as well as in its direct-to-consumer business. The purchase of the business reflects the Company’s strategy to acquire leading brands in fast-growing categories with attractive gross margins.
The total consideration paid of $681, which included post-closing working capital and other adjustments, was initially funded through commercial paper borrowings and subsequently repaid using a combination of long-term debt financing and cash repatriated from foreign subsidiaries. The assets and liabilities of Nutranext were recorded at their respective estimated fair value as of the acquisition date using generally accepted accounting principles for business combinations. The excess of the purchase price over the fair value of the net identifiable assets acquired has been allocated to goodwill in the Lifestyle and Household reportable segments in the amounts of $310 and $102, respectively. The goodwill of $412 is primarily attributable to the synergies, including those with the digestive health business, expected to arise after the acquisition and reflects the value of further expanding the Company’s portfolio into the health and wellness arena. Of the total goodwill, $363 is expected to be deductible for tax purposes.
The purchase price allocation was finalized during the third quarter of fiscal year 2019. The following table summarizes the final purchase price allocation for the fair value of Nutranext’s assets acquired and liabilities assumed and the related deferred income taxes. The fair value of the assets acquired and liabilities assumed reflects the final insignificant measurement period adjustments related to goodwill, deferred income taxes and income taxes payable. The weighted-average estimated useful life of intangible assets subject to amortization is 15 years.

	     	Nutranext		
Goodwill ($310 in Lifestyle reportable segment and $102 in Household reportable segment)		 	$	412		
Trademarks		 		143		
Customer relationships		 		75		
Property, plant and equipment		 		49		
Working capital, net		 		22		
Deferred income taxes		 		(20	)	
Consideration paid		       	$	681		
 		 				
Effective April 2, 2018, Nutranext was consolidated into the Company’s results of operations. Results for Nutranext’s global business are reflected in the Lifestyle reportable segment. Included in the Company’s results for fiscal year 2019 and 2018 was $217 and $53, respectively, of Nutranext’s global net sales.
Pro forma results reflecting the acquisition were not presented because the acquisition did not meet the threshold requirements for additional disclosure.

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Table of Contents
Appendix B
NOTE 3. INVENTORIES
Inventories consisted of the following as of June 30:

	     	2019		    	2018		
Finished goods		 	$	411			 	$	395		
Raw materials and packaging		 		125			 		129		
Work in process		 		6			 		9		
LIFO allowances		 		(30	)		 		(27	)	
Total		 	$	512			 	$	506		
 		 					 				
The LIFO method was used to value approximately 34% and 38% of inventories as of June 30, 2019 and 2018, respectively. The carrying values for all other inventories are determined on the FIFO method. The effect on earnings of the liquidation of LIFO layers was insignificant for each of the fiscal years ended June 30, 2019, 2018 and 2017.
NOTE 4. PROPERTY, PLANT AND EQUIPMENT, NET
The components of property, plant and equipment, net, consisted of the following as of June 30:

	     	2019		    	2018		
Machinery and equipment			$	1,867				$	1,808		
Buildings		 		596			 		574		
Capitalized software costs		 		358			 		375		
Land and improvements		 		138			 		131		
Construction in progress		 		131			 		77		
Computer equipment		 		94			 		92		
Total		 		3,184			 		3,057		
Less: Accumulated depreciation and amortization		 		(2,150	)		 		(2,061	)	
Property, plant and equipment, net		 	$	1,034			 	$	996		
 		 					 				
Included in Machinery and equipment above was $21 and $13 of capital leases as of June 30, 2019 and 2018. Accumulated depreciation for assets under capital leases was $12 and $10 as of June 30, 2019 and 2018, respectively.
Included in Buildings above was $0 and $2 of asset retirement obligations as of June 30, 2019 and 2018, respectively, for leased properties. There were no asset retirement obligations recorded in fiscal year 2019 and 2018.
Depreciation and amortization expense related to property, plant and equipment, net, was $165, $156 and $153 in fiscal years 2019, 2018 and 2017, respectively, which includes depreciation of assets under capital leases. This also includes amortization of capitalized software of $8, $11 and $15 in fiscal years 2019, 2018 and 2017, respectively.
During the second quarter of fiscal year 2017, the Company recognized a $21 non-cash charge, within the Cleaning reportable segment, related to impairing certain assets of the subsequently divested Aplicare business. The asset impairment charge primarily related to writing down Property, plant and equipment to fair value in connection with an updated valuation of the Aplicare business.
Non-cash capital expenditures were $2 in each of the fiscal years ended June 30, 2019, 2018 and 2017.

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Table of Contents
Appendix B
NOTE 5. GOODWILL, TRADEMARKS AND OTHER INTANGIBLE ASSETS
The changes in the carrying amount of goodwill by reportable segment for the fiscal years ended June 30, 2019 and 2018 were as follows:

		Goodtwill	
	     	Cleaning	     	Household	     	Lifestyle	     	International		     	Total		
Balance as of June 30, 2017		 	$	323		 	$	207		 	$	244		 	$	422			 	$	1,196		
Acquisition		 		—		 		102		 		309		 		—			 		411		
Effect of foreign currency translation		 		—		 		—		 		—		 		(5	)		 		(5	)	
Balance as of June 30, 2018		 	$	323		 	$	309		 	$	553		 	$	417			 	$	1,602		
Acquisition		 		—		 		—		 		1		 		—			 		1		
Effect of foreign currency translation		 		—		 		—		 		—		 		(12	)		 		(12	)	
Balance as of June 30, 2019		       	$	323		          	$	309		      	$	554		             	$	405			  	$	1,591		
 		 				 				 				 					 				
The changes in the carrying amount of trademarks and other intangible assets for the fiscal years ended June 30 were as follows:

		As of June 30, 2019		As of June 30, 2018	
	     	Gross
carrying
amount	     	Accumulated
amortization	     	Net
carrying
amount	     	Gross
carrying
amount	     	Accumulated
amortization	     	Net
carrying
amount	 	
Trademarks with indefinite lives		 	$	777		 	$	—		 	$	777		 	$	778		 	$	—		 	$	778	 	
Trademarks with finite lives		 		40		 		26		 		14		 		41		 		24		 		17	 	
Other intangible assets		 		430		 		309		 		121		 		430		 		296		 		134	 	
Total		   	$	1,247		             	$	335		      	$	912		   	$	1,249		              	$	320		      	$	929	 	
 		 				 				 				 				 				 			 	
Finite-lived intangible assets are amortized over their estimated useful lives, which range from 2 to 30 years. Amortization expense relating to the Company’s intangible assets was $15, $10 and $10 for the years ended June 30, 2019, 2018 and 2017, respectively. Estimated amortization expense for these intangible assets is $14, $12, $12, $12 and $10 for fiscal years 2020, 2021, 2022, 2023 and 2024, respectively.
NOTE 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consisted of the following as of June 30:

	     	2019	     	2018	 	
Accounts payable		 	$	507		 	$	507	 	
Compensation and employee benefit costs		 		158		 		154	 	
Trade and sales promotion costs		 		115		 		91	 	
Dividends		 		139		 		129	 	
Other		 		116		 		120	 	
Total		  	$	1,035		  	$	1,001	 	

B-40       	THE CLOROX COMPANY - 2019 Proxy Statement	

Table of Contents
Appendix B
NOTE 7. DEBT
Short-term borrowings
Notes and loans payable primarily consist of U.S. commercial paper issued by the Company, which mature in less than one year, and were $396 and $199 as of June 30, 2019 and 2018, respectively.
The weighted average interest rates incurred on average outstanding notes and loans payable during the fiscal years ended June 30, 2019, 2018 and 2017, including fees associated with the Company’s undrawn revolving credit facility, were 2.98%, 2.10% and 1.21%, respectively. The weighted average effective interest rates on U.S. commercial paper balances as of June 30, 2019 and 2018 were 2.65% and 2.31%, respectively.
Long-term borrowings
Long-term debt, carried at face value net of unamortized discounts, premiums and debt issuance costs, included the following as of June 30:

	     	2019	     	2018	 	
Senior unsecured notes and debentures:							 	
3.80%, $300 due November 2021		$	299		$	298	 	
3.05%, $600 due September 2022			598			597	 	
3.50%, $500 due December 2024			498			497	 	
3.10%, $400 due October 2027			397			397	 	
3.90%, $500 due May 2028			495			495	 	
Total			2,287			2,284	 	
Less: Current maturities of long-term debt			—			—	 	
Long-term debt		 $	2,287		 $	2,284	 	
 							 	
The weighted average interest rates incurred on average outstanding long-term debt during the fiscal years ended June 30, 2019, 2018 and 2017, were 3.81%, 3.94% and 4.41%, respectively. The weighted average effective interest rates on long-term debt balances as of both June 30, 2019 and 2018 were 3.81%.
Long-term debt maturities as of June 30, 2019, are $0, $0, $300, $600, $0, and $1,400 in fiscal years 2020, 2021, 2022, 2023, 2024, and thereafter, respectively.
In May 2018, the Company issued $500 of senior notes with an annual fixed interest rate of 3.90% and a maturity date of May 15, 2028 and used the proceeds to repay a portion of the outstanding commercial paper, including amounts raised in connection with the Nutranext acquisition. Interest on the notes is payable semi-annually in May and November. The notes carry an effective interest rate of 4.02%, which includes the impact of amortizing debt issuance costs and the loss on the related interest rate forward contracts over the life of the notes (See Note 9). The notes rank equally with all of the Company’s existing senior indebtedness.
In September 2017, the Company issued $400 of senior notes with an annual fixed interest rate of 3.10% and a maturity date of October 1, 2027, and used the proceeds to repay $400 of senior notes with an annual fixed interest rate of 5.95% that became due in October 2017. Interest on the September 2017 senior notes is payable semi-annually in April and October. The notes carry an effective interest rate of 3.13%, which includes the impact of amortizing debt issuance costs and the gain on the related interest rate forward contracts over the life of the notes (See Note 9). The notes rank equally with all of the Company’s existing senior indebtedness.

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Table of Contents
Appendix B
NOTE 7. DEBT (Continued)
Credit arrangements
The Company’s borrowing capacity under other financing arrangements as of June 30 was as follows:

	     	2019	     	2018	 	
Revolving credit facility		$	1,100		$	1,100	 	
Foreign and other credit lines			39			37	 	
Total		 $	1,139		 $	1,137	 	
 							 	
As of June 30, 2019 and 2018, the Company had a $1,100 revolving credit agreement (the Credit Agreement) that matures in February 2022. There were no borrowings under the Credit Agreement as of June 30, 2019 and 2018, and the Company believes that borrowings under the Credit Agreement are and will continue to be available for general business purposes. The Credit Agreement includes certain restrictive covenants and limitations, with which the Company was in compliance as of June 30, 2019 and 2018.
Of the $39 of foreign and other credit lines as of June 30, 2019, $4 was outstanding and the remainder of $35 was available for borrowing. Of the $37 of foreign and other credit lines as of June 30, 2018, $3 was outstanding and the remainder of $34 was available for borrowing.
NOTE 8. OTHER LIABILITIES
Other liabilities consisted of the following as of June 30:

	     	2019	     	2018	 	
Venture agreement terminal obligation, net		$	370		$	341	 	
Employee benefit obligations			280			283	 	
Taxes			34			52	 	
Other			96			102	 	
Total		 $	780		$	778	 	
 							 	
Venture Agreement
The Company has an agreement with The Procter & Gamble Company (P&G) for the Company’s Glad® bags, wraps and containers business. In connection with this agreement, P&G provides research and development (R&D) support to the Glad® business. As of June 30, 2019 and 2018, P&G had a 20% interest in the venture. The Company pays a royalty to P&G for its interest in the profits, losses and cash flows, as contractually defined, of the Glad® business, which is included in Cost of products sold. In December 2017, the Company and P&G extended the term of the agreement and the related R&D support provided by P&G. The term will now expire in January 2026, unless the parties agree, on or prior to January 31, 2025, to further extend the term of the agreement for another seven years or agree to take some other relevant action. The agreement can be terminated under certain circumstances, including at P&G’s option upon a change in control of the Company or, at either party’s option, upon the sale of the Glad® business by the Company.
Upon termination of the agreement, the Company is required to purchase P&G’s 20% interest for cash at fair value as established by predetermined valuation procedures. As of June 30, 2019, the estimated fair value of P&G’s interest was $619, of which $370 has been recognized and is reflected in Other liabilities as noted in the table above. The difference between the estimated fair value and the amount recognized, and any future changes in the fair value of P&G’s interest, is charged to Cost of products sold in accordance with the effective interest method over the remaining life of the agreement. Following termination, the Glad® business will retain the exclusive core intellectual property licenses contributed by P&G on a royalty-free basis for the licensed products marketed.

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Table of Contents
Appendix B
NOTE 8. OTHER LIABILITIES (Continued)
Deferred Gain on Sale-leaseback Transaction
In December 2012, the Company completed a sale-leaseback transaction under which it sold its general office building in Oakland, California to an unrelated third party for net proceeds of $108 and entered into a 15-year operating lease agreement with renewal options with the buyer for a portion of the building. The Company deferred recognition of the portion of the total gain on the sale that was equivalent to the present value of the lease payments and will continue to amortize such amount to earnings ratably over the lease term. As of June 30, 2019 and 2018, the long-term portion of the deferred gain of $22 and $29, respectively, was included in Other, as noted in the table above. The Company will reclassify the remaining deferred gain from the sale-leaseback of the general office building to Retained earnings upon adoption of the new lease guidance under Topic 842 effective July 1, 2019. Refer to Note 1 for more information.
NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Financial Risk Management and Derivative Instruments
The Company is exposed to certain commodity, foreign currency and interest rate risks related to its ongoing business operations and uses derivative instruments to mitigate its exposure to these risks.
Commodity Price Risk Management
The Company may use commodity exchange traded futures and over-the-counter swap contracts, which are generally no longer than 2 years, to fix the price of a portion of its forecasted raw material requirements. Commodity purchase contracts are measured at fair value using market quotations obtained from the Chicago Board of Trade commodity futures exchange and commodity derivative dealers.
As of June 30, 2019, the notional amount of commodity derivatives was $24, of which $11 related to jet fuel swaps used for the charcoal business and $13 related to soybean oil futures used for the food business. As of June 30, 2018, the notional amount of commodity derivatives was $34, of which $10 related to jet fuel swaps and $24 related to soybean oil futures.
Foreign Currency Risk Management
The Company may also enter into certain over-the-counter derivative contracts to manage a portion of the Company’s forecasted foreign currency exposure associated with the purchase of inventory. These foreign currency contracts generally have durations of no longer than 2 years. The foreign exchange contracts are measured at fair value using information quoted by foreign exchange dealers.
The notional amounts of outstanding foreign currency forward contracts used by the Company’s subsidiaries to hedge forecasted purchases of inventory were $61 and $50, respectively, as of June 30, 2019 and 2018.
Interest Rate Risk Management
The Company may enter into over-the-counter interest rate forward contracts to fix a portion of the benchmark interest rate prior to the anticipated issuance of fixed rate debt or to manage the Company’s level of fixed and floating rate debt. These interest rate forward contracts generally have durations of less than 12 months. The interest rate contracts are measured at fair value using information quoted by U.S. government bond dealers.
During fiscal year 2018, the Company entered into, and subsequently terminated, interest rate forward contracts related to the September 2017 issuance of $400 in senior notes and the May 2018 issuance of $500 in senior notes (See Note 7). These contracts resulted in insignificant gains and losses to Accumulated other comprehensive net (loss) income on the consolidated balance sheets, which are being amortized into Interest expense on the consolidated statement of earnings over the 10-year term of each of the notes.
The Company had no outstanding interest rate forward contracts as of June 30, 2019 and 2018.

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Table of Contents
Appendix B
NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)
Commodity, Foreign Exchange and Interest Rate Derivatives
The Company designates its commodity forward and futures contracts for forecasted purchases of raw materials, foreign currency forward contracts for forecasted purchases of inventory, and interest rate forward contracts for forecasted interest payments as cash flow hedges.
The effects of derivative instruments designated as hedging instruments on Other comprehensive income and Net earnings were as follows during the fiscal years ended June 30:

		Gains (losses)
recognized in Other
comprehensive income	
 	                             	2019	 	     	2018	 	     	2017	 	
Commodity purchase derivative contracts		     	$	(5	)		   	$	4			   	$	(3	)	
Foreign exchange derivative contracts				—					2					(1	)	
Interest rate derivative contracts				—					2					—	  	
Total			$	(5	)			$	8				$	(4	)	

		Gains (losses)
reclassified from
Accumulated other
comprehensive net
(loss) income and
recognized in
Net earnings	
		2019	 	     	2018	 	     	2017	 	
Commodity purchase derivative contracts	                             	     	$	(2	)		  	$	1			   	$	(2	)	
Foreign exchange derivative contracts				2					(1	)				(3	) 	
Interest rate derivative contracts				(6	)				(6	)				(6	)	
Total			$	(6	)			$	(6	)			$	(11	)	

The gains (losses) reclassified from Accumulated other comprehensive net (loss) income and recognized in Net earnings during the fiscal years ended June 30, 2019, 2018 and 2017, for commodity purchase and foreign exchange derivative contracts were included in Cost of products sold, and for interest rate derivative contracts were included in Interest expense.
The estimated amount of the existing net gain (loss) in Accumulated other comprehensive net (loss) income as of June 30, 2019 that is expected to be reclassified into Net earnings within the next twelve months is $(8). Gains and losses on derivative instruments representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in Net earnings. During each of the fiscal years ended June 30, 2019, 2018 and 2017, hedge ineffectiveness was not significant.
Counterparty Risk Management and Derivative Contract Requirements
The Company utilizes a variety of financial institutions as counterparties for over-the counter derivative instruments. The Company enters into agreements governing the use of over-the-counter derivative instruments and sets internal limits on the aggregate over-the-counter derivative instrument positions held with each counterparty. Certain terms of these agreements require the Company or the counterparty to post collateral when the fair value of the derivative instruments exceeds contractually defined counterparty liability position limits. Of the over-the-counter derivative instruments in liability positions held as of June 30, 2019 and 2018, $1 and $0, respectively, contained such terms. As of both June 30, 2019 and 2018, neither the Company nor any counterparty was required to post any collateral as no counterparty liability position limits were exceeded.

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Table of Contents
Appendix B
NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)
Certain terms of the agreements governing the Company’s over-the-counter derivative instruments require the credit ratings, as assigned by Standard & Poor’s and Moody’s to the Company and its counterparties, to remain at a level equal to or better than the minimum of an investment grade credit rating. If the Company’s credit ratings were to fall below investment grade, the counterparties to the derivative instruments could request full collateralization on derivative instruments in net liability positions. As of both June 30, 2019 and 2018, the Company and each of its counterparties had been assigned investment grade ratings by both Standard & Poor’s and Moody’s.
Certain of the Company’s exchange-traded futures contracts used for commodity price risk management include requirements for the Company to post collateral in the form of a cash margin account held by the Company’s broker for trades conducted on that exchange. As of June 30, 2019 and 2018, the Company maintained cash margin balances related to exchange-traded futures contracts of $1 and $2, respectively, which are classified as Prepaid expenses and other current assets on the consolidated balance sheets.
Trust Assets
The Company has held interests in mutual funds and cash equivalents as part of trust assets related to its nonqualified deferred compensation plans. The participants in the nonqualified deferred compensation plans, who are the Company’s current and former employees, may select among certain mutual funds in which their compensation deferrals are invested in accordance with the terms of the plan and within the confines of the trusts, which hold the marketable securities. The trusts represent variable interest entities for which the Company is considered the primary beneficiary, and, therefore, trust assets are consolidated and included in Other assets in the consolidated balance sheets. The interests in mutual funds are measured at fair value using quoted market prices. The Company has designated these marketable securities as trading investments.
As of June 30, 2019, the value of the trust assets related to the Company’s nonqualified deferred compensation plans increased by $10 as compared to June 30, 2018, primarily due to current year employees’ contributions to these plans.
Fair Value of Financial Instruments
Financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets are required to be classified and disclosed in one of the following three categories of the fair value hierarchy:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions.
As of June 30, 2019 and 2018, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis during the period included derivative financial instruments, which were classified as either Level 1 or Level 2, and trust assets to fund the Company’s nonqualified deferred compensation plans, which were classified as Level 1.

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Table of Contents
Appendix B
NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)
The following table summarizes the fair value of Company’s assets and liabilities for which disclosure of fair value is required as of June 30:

						2019		2018		
	           	Balance sheet classification	     	Fair value
hierarchy
level	     	Carrying
Amount	     	Estimated
Fair
Value	     	Carrying
Amount	     	Estimated
Fair
Value		
Assets						  				   				  			  	   				
Investments including money
market funds		Cash and cash equivalents(a)		1			$	26			$	26			$	24			$	24	  	
Time deposits		Cash and cash equivalents(a)		2				7				7				23				23		
Commodity purchase swaps contracts		Prepaid expenses and other
current assets		2				—				—				3				3		
Foreign exchange forward contracts		Prepaid expenses and other
current assets		2				—				—				2				2		
Trust assets for nonqualified deferred
compensation plans		Other assets		1				96				96				86				86		
							$	129			$	129			$	138			$	138		
Liabilities																						
Notes and loans payable		Notes and loans payable(b)		2			$	396			$	396			$	199			$	199		
Commodity purchase futures contracts		Accounts payable and
accrued liabilities		1				1				1				1				1		
Commodity purchase swaps contracts		Accounts payable and
accrued liabilities		2				1				1				—				—		
Current maturities of long-term debt
and Long-term debt		Current maturities of long-term
debt and Long-term debt(c)		2				2,287				2,402				2,284				2,269		
							$	2,685			$	2,800			$	2,484			$	2,469		

(a)	Cash and cash equivalents are composed of time deposits and other interest-bearing investments, including money market funds with original maturity dates of 90 days or less. Cash and cash equivalents are recorded at cost, which approximates fair value.	
(b)	Notes and loans payable is composed of U.S. commercial paper and/or other similar short-term debt issued by non-U.S. subsidiaries, all of which are recorded at cost, which approximates fair value.	
(c)	Current maturities of long-term debt and Long-term debt are recorded at cost. The fair value of Long-term debt, including current maturities, was determined using secondary market prices quoted by corporate bond dealers, and is classified as Level 2.	

NOTE 10. OTHER CONTINGENCIES AND GUARANTEES
Contingencies
The Company is involved in certain environmental matters, including response actions at various locations. The Company had recorded liabilities totaling $27 and $28 as of June 30, 2019 and 2018, respectively, for its share of aggregate future remediation costs related to these matters.
One matter, which accounted for $14 of the recorded liability as of both June 30, 2019 and 2018, relates to environmental costs associated with one of the Company’s former operations at a site located in Alameda County, California. In November 2016, at the request of regulators and with the assistance of environmental consultants, the Company submitted a Feasibility Study that evaluated various options for managing the site and included estimates of the related costs. As a result, the Company recorded in Other (income) expense, net an undiscounted liability for costs estimated to be incurred over a 30-year period, based on the option recommended in the Feasibility Study. However, as a result of ongoing discussions with regulators, in June 2017, the Company increased its recorded liability to $14, which reflects anticipated costs to implement additional remediation measures at the site. While the Company believes its latest estimate is reasonable, regulators could require the Company to implement one of the other options evaluated in the Feasibility Study, with estimated undiscounted costs of up to $28 over an estimated 30-year period, or require the Company to take other actions and incur costs not included in the study.

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Table of Contents
Appendix B
NOTE 10. OTHER CONTINGENCIES AND GUARANTEES (Continued)
Another matter in Dickinson County, Michigan, at the site of one of the Company’s former operations for which the Company is jointly and severally liable, accounted for $11 and $12 of the recorded liability as of June 30, 2019 and 2018, respectively. This amount reflects the Company’s agreement to be liable for 24.3% of the aggregate remediation and associated costs for this matter pursuant to a cost-sharing arrangement with a third party. With the assistance of environmental consultants, the Company maintains an undiscounted liability representing its current best estimate of its share of the capital expenditures, maintenance and other costs that may be incurred over an estimated 30-year remediation period. Although it is reasonably possible that the Company’s exposure may exceed the amount recorded for the Dickinson County matter, any amount of such additional exposures, or range of exposures, is not estimable at this time. The Company’s estimated losses related to these matters are sensitive to a variety of uncertain factors, including the efficacy of any remediation efforts, changes in any remediation requirements, and the future availability of alternative clean-up technologies.
The Company is subject to various legal proceedings, claims and other loss contingencies, including, without limitation, loss contingencies relating to contractual arrangements, product liability, patents and trademarks, advertising, labor and employment, environmental, health and safety and other matters. With respect to these proceedings, claims and other loss contingencies, while considerable uncertainty exists, in the opinion of management at this time, the ultimate disposition of these matters, to the extent not previously provided for, will not have a material adverse effect, either individually or in the aggregate, on the Company’s consolidated financial statements taken as a whole.
Guarantees
In conjunction with divestitures and other transactions, the Company may provide typical indemnifications (e.g., indemnifications for representations and warranties and retention of previously existing environmental, tax and employee liabilities) that have terms that vary in duration and in the potential amount of the total obligation and, in many circumstances, are not explicitly defined. The Company has not made, nor does it believe that it is probable that it will make, any material payments relating to its indemnifications, and believes that any reasonably possible payments would not have a material adverse effect, either individually or in the aggregate, on the Company’s consolidated financial statements taken as a whole.
The Company had not recorded any material liabilities on the aforementioned guarantees as of June 30, 2019 and 2018.
The Company was a party to letters of credit of $9 as of both June 30, 2019 and 2018, primarily related to one of its insurance carriers, of which $0 had been drawn upon.
NOTE 11. LEASES AND OTHER COMMITMENTS
The Company leases various property, plant, and equipment, including office, warehousing, manufacturing and research and development facilities, in addition to certain manufacturing and information technology equipment. The Company expects that, in the normal course of business, existing contracts will be renewed or replaced by other leases. Rental expense for all operating leases was $72, $86 and $84 in fiscal years 2019, 2018 and 2017, respectively.
The future minimum annual lease payments required under the Company’s existing non-cancelable operating and capital lease agreements as of June 30, 2019, were as follows:

Year		Operating
leases		Capital
leases	  	
2020	            	        	$	71	     	     	$	2		
2021		    		65		    		2		
2022				50				1		
2023				42				1		
2024				37				1		
Thereafter				124				2		
Total			$	389			$	9		

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Table of Contents
Appendix B
NOTE 11. LEASES AND OTHER COMMITMENTS (Continued)
The Company is also a party to certain purchase obligations, which are defined as purchase agreements that are enforceable and legally binding and that contain specified or determinable significant terms, including quantity, price and the approximate timing of the transaction. For purchase obligations subject to variable price and/or quantity provisions, an estimate of the price and/or quantity must be made. Examples of the Company’s purchase obligations include contracts to purchase raw materials, commitments to contract manufacturers, commitments for information technology and related services, advertising contracts, capital expenditure agreements, software acquisition and license commitments and service contracts. The Company enters into purchase obligations based on expectations of future business needs. Many of these purchase obligations are flexible to allow for changes in the Company’s business and related requirements. As of June 30, 2019, the Company’s purchase obligations by purchase date were as follows:

Year		Purchase
Obligations	  	
2020	     	                	$	77		
2021				36		
2022				26		
2023				14		
2024				11		
Thereafter				—		
Total			$	164		
 	 	 	 	 	 	
NOTE 12. STOCKHOLDERS’ EQUITY
As of June 30, 2019, the Company had two stock repurchase programs: an open-market purchase program with an authorized aggregate purchase amount of up to $2,000, which has no expiration date, was authorized by the Board of Directors in May 2018 and replaced the prior open-market purchase program with an authorized aggregate purchase amount of up to $750, and a program to offset the anticipated impact of dilution related to stock-based awards (the Evergreen Program), which has no authorization limit on the dollar amount and no expiration date.
Stock repurchases under the two stock repurchase programs were as follows during the fiscal years ended June 30:

		2019		2018		2017	
	     	Amount	     	Shares
(in thousands)	     	Amount	     	Shares
(in thousands)	     	Amount	     	Shares
(in thousands)	
Open-market purchase program		         	$	328		              	2,266			$	95		              	749		     	$	—		              	—		
Evergreen Program				332			2,208				177			1,422				189			1,505		
Total stock repurchases			$	660			4,474		      	$	272			2,171			$	189			1,505		

Dividends per share paid during the fiscal years ended June 30 were as follows:

	     	2019	     	2018	     	2017	
Dividends per share paid		   $	3.84		 $	3.48		 $	3.20	

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Table of Contents
Appendix B
NOTE 12. STOCKHOLDERS’ EQUITY (Continued)
Accumulated Other Comprehensive Net (Loss) Income
Changes in Accumulated other comprehensive net (loss) income by component were as follows for the fiscal years ended June 30:

	     	Foreign
currency
translation
adjustments		     	Net
unrealized
gains
(losses) on
derivatives		     	Pension and
postretirement
benefit
adjustments		     	Accumulated
other
comprehensive
(loss) income		
Balance June 30, 2016		                  	$	(353	)		                          	$	(44	)		                      	$	(173	)		                  	$	(570	)	
Other comprehensive income (loss) before reclassifications				(3	)				(4	)				27					20		
Amounts reclassified from Accumulated other comprehensive net (loss) income				—					11					9					20		
Income tax benefit (expense)				—					—					(13	)				(13	)	
Net current period other comprehensive income (loss)				(3	)				7					23					27		
Balance June 30, 2017				(356	)				(37	)				(150	)				(543	)	
Other comprehensive income (loss) before reclassifications				(20	)				8					11					(1	)	
Amounts reclassified from Accumulated other comprehensive net (loss) income				—					6					8					14		
Income tax benefit (expense)				(8	)				(2	)				(7	)				(17	)	
Net current period other comprehensive income (loss)				(28	)				12					12					(4	)	
Balance June 30, 2018				(384	)				(25	)				(138	)				(547	)	
Other comprehensive income (loss) before reclassifications				(20	)				(5	)				—					(25	)	
Amounts reclassified from Accumulated other comprehensive net (loss) income				—					6					6					12		
Income tax benefit (expense)				(2	)				1					(2	)				(3	)	
Net current period other comprehensive income (loss)				(22	)				2					4					(16	)	
Cumulative effect of accounting changes(1)				(8	)				—					(31	)				(39	)	
Balance June 30, 2019			$	(414	)			$	(23	)			$	(165	)			$	(602	)	
  	
(1)	The opening balance of Accumulated other comprehensive net (loss) income was adjusted as a result of adopting ASU No. 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” on April 1, 2019. See Note 1 for more information.	
Included in foreign currency adjustments are re-measurement losses on long-term intercompany loans where settlement is not planned or anticipated in the foreseeable future. For the fiscal years ended June 30, 2019, 2018 and 2017, Other comprehensive losses on these loans totaled $3, $9 and $2, respectively, and there were no amounts reclassified from Accumulated other comprehensive net (loss) income for the periods presented.
NOTE 13. NET EARNINGS PER SHARE (EPS)
The following is the reconciliation of the weighted average number of shares outstanding (in thousands) used to calculate basic net EPS to those used to calculate diluted net EPS for the fiscal years ended June 30:

	      	2019	      	2018	      	2017	
Basic		127,734		129,293		128,953	
Dilutive effect of stock options and other		2,058		2,288		2,613	
Diluted		129,792		131,581		131,566	
Antidilutive stock options and other		800		1,192		11	

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Table of Contents
Appendix B
NOTE 14. STOCK-BASED COMPENSATION PLANS
In November 2012, the Company’s stockholders voted to approve the amended and restated 2005 Stock Incentive Plan (the Plan). The Plan permits the Company to grant various nonqualified stock-based compensation awards, including stock options, restricted stock, performance shares, deferred stock units, stock appreciation rights and other stock-based awards. The primary amendment reflected in the Plan was an increase of approximately 3 million common shares that may be issued for stock-based compensation purposes. As of June 30, 2019, the Company is authorized to grant up to approximately 7 million common shares, plus additional shares equal to shares that are potentially deliverable under an award that expire or are canceled, forfeited or settled without the delivery of shares, under the Plan. As of June 30, 2019, approximately 8 million common shares remained available for grant.
Compensation cost and the related income tax benefit recognized for stock-based compensation plans were classified as indicated below for the fiscal years ended June 30:

	     	2019	     	2018	     	2017	
Cost of products sold		          	$	5		          	$	7	      	          	$	7	
Selling and administrative expenses				35				42				40	
Research and development costs				3				4				4	
Total compensation costs			$	43			$	53			$	51	
Related income tax benefit			$	10			$	16			$	19	
Cash received during fiscal years 2019, 2018 and 2017 from stock options exercised under all stock-based payment arrangements was $166, $70 and $81, respectively. The Company issues shares for stock-based compensation plans from treasury stock. The Company may repurchase stock under its Evergreen Program to offset the estimated impact of dilution related to stock-based awards (See Note 12).
Details regarding the valuation and accounting for stock options, restricted stock awards, performance shares and deferred stock units for non-employee directors follow.
Stock Options
The fair value of each stock option award granted during fiscal years 2019, 2018 and 2017 was estimated on the date of grant using the Black-Scholes valuation model and assumptions noted in the following table:

	      	2019	      	2018	      	2017	
Expected life		5.4 years		5.5 years		5.5 years	
Weighted-average expected life		5.4 years		5.5 years		5.5 years	
Expected volatility		17.3% to 20.2%		15.7% to 18.7%		16.2% to 16.9%	
Weighted-average volatility		17.4%		15.7%		16.9%	
Risk-free interest rate		2.5% to 3.0%		1.3% to 2.6%		1.3% to 2.2%	
Weighted-average risk-free interest rate		2.9%		1.8%		1.3%	
Dividend yield		2.5% to 2.6%		2.4% to 3.0%		2.4% to 2.8%	
Weighted-average dividend yield		2.6%		2.5%		2.6%	
The expected life of the stock options is based on historical exercise patterns. The expected volatility is based on implied volatility from publicly traded options on the Company’s stock at the date of grant, historical implied volatility of the Company’s publicly traded options and other factors. The risk-free interest rate is based on the implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected term of the option. The dividend yield is based on the projected annual dividend payment per share, divided by the stock price at the date of grant.

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Table of Contents
Appendix B
NOTE 14. STOCK-BASED COMPENSATION PLANS (Continued)
Details of the Company’s stock option activities are summarized below:

	      	Number of
Shares
(In thousands)		      	Weighted-
Average
Exercise
Price
per Share	      	Average
Remaining
Contractual
Life	      	Aggregate
Intrinsic
Value	
Options outstanding as of June 30, 2018		            	7,080			            	$	101		6 years		         	$	240	
Granted			863					152							
Exercised			(1,951	)				88							
Canceled			(248	)				132							
Options outstanding as of June 30, 2019			5,744				$	112		6 years			$	235	
Options vested as of June 30, 2019			3,533				$	97		5 years			$	198	
The weighted-average fair value per share of each option granted during fiscal years 2019, 2018 and 2017, estimated at the grant date using the Black-Scholes option pricing model, was $22.38, $15.33 and $13.75, respectively. The total intrinsic value of options exercised in fiscal years 2019, 2018 and 2017 was $125, $51 and $65, respectively.
Stock option awards outstanding as of June 30, 2019, have been granted at prices that are equal to the market value of the stock on the date of grant. Stock option grants generally vest over 4 years and expire no later than 10 years after the grant date. The Company recognizes compensation expense on a straight-line basis over the vesting period. As of June 30, 2019, there was $11 of total unrecognized compensation cost related to non-vested options, which is expected to be recognized over a remaining weighted-average vesting period of 1 year, subject to forfeiture changes.
Restricted Stock Awards
The fair value of restricted stock awards is estimated on the date of grant based on the market price of the stock and is amortized to compensation expense on a straight-line basis over the related vesting periods, which are generally 3 to 4 years. The total number of restricted stock awards expected to vest is adjusted by actual and estimated forfeitures. Restricted stock grants receive dividend distributions earned during the vesting period upon vesting.
As of June 30, 2019, there was $23 of total unrecognized compensation cost related to non-vested restricted stock awards, which is expected to be recognized over a remaining weighted-average vesting period of 1 year. The total fair value of the shares that vested in each of the fiscal years 2019, 2018 and 2017 was $5, $1 and $1, respectively. The weighted-average grant-date fair value of awards granted was $152.12, $135.29 and $131.67 per share for fiscal years 2019, 2018 and 2017, respectively.
A summary of the status of the Company’s restricted stock awards is presented below:

	      	Number of
Shares
(In thousands)		      	Weighted-Average
Grant Date
Fair Value
per Share	
Restricted stock awards as of June 30, 2018		                     	156			                     	$	135	
Granted			139					152	
Vested			(36	)				135	
Forfeited			(18	)				140	
Restricted stock awards as of June 30, 2019			241				$	144	
   	
Performance Shares
As of June 30, 2019, there was $9 in unrecognized compensation cost related to non-vested performance shares that is expected to be recognized over a remaining weighted-average performance period of 1 year. The weighted-average grant-date fair value of awards granted was $151.95, $135.47 and $122.73 per share for fiscal years 2019, 2018 and 2017, respectively.

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Table of Contents
Appendix B
NOTE 14. STOCK-BASED COMPENSATION PLANS (Continued)
A summary of the status of the Company’s performance share awards is presented below:

	       	Number of
Shares
(In thousands)		       	Weighted-Average
Grant Date
Fair Value
per Share	
Performance share awards as of June 30, 2018		               	698			                      	$	111	
Granted			216					152	
Distributed			(334	)				109	
Forfeited			(43	)				130	
Performance share awards as of June 30, 2019			537				$	120	
Performance shares vested and deferred as of June 30, 2019			151				$	82	
The non-vested performance shares outstanding as of June 30, 2019 and 2018 were 387,000 and 544,000, respectively, and the weighted average grant date fair value was $133.10 and $120.69 per share, respectively. During fiscal year 2019, 330,000 shares vested. Deferred shares continue to earn dividends, which are also deferred. The total fair value of shares vested was $37, $35 and $0 during fiscal years 2019, 2018 and 2017, respectively. Upon vesting, the recipients of the grants receive the distribution as shares or, if previously elected by eligible recipients, as deferred stock.
Deferred Stock Units for Nonemployee Directors
Nonemployee directors receive annual grants of deferred stock units under the Company’s director compensation program and can elect to receive all or a portion of their annual retainers and fees in the form of deferred stock units. The deferred stock units receive dividend distributions, which are reinvested as deferred stock units, and are recognized at their fair value on the date of grant. Each deferred stock unit represents the right to receive one share of the Company’s common stock following the completion of a director’s service.
During fiscal year 2019, the Company granted 13,000 deferred stock units, reinvested dividends of 5,000 units and distributed 24,000 shares, which had a weighted-average fair value on the grant date of $154.23, $153.16 and $82.74 per share, respectively. As of June 30, 2019, 200,000 units were outstanding, which had a weighted-average fair value on the grant date of $87.47 per share.
NOTE 15. OTHER (INCOME) EXPENSE, NET
The major components of Other (income) expense, net, for the fiscal years ended June 30 were:

	     	2019		     	2018		     	2017		
Income from equity investees		             	$	(15	)		              	$	(12	)		              	$	(19	)	
Net periodic benefit cost(1)				14					—					—		
Loss (gain) on sale of assets and investments, net				—					4					(11	)	
Interest income				(3	)				(6	)				(4	)	
Asset impairment charges				—					1					23		
Amortization of trademarks and other intangible assets				17					11					10		
Foreign exchange transaction (gains) losses, net				7					3					(1	)	
Other				(17	)				(4	)				8		
Total			$	3				$	(3	)			$	6		
 	
(1)	As a result of adopting ASU No. 2017-07, “Compensation-Retirement Benefits (Topic 715),” effective July 1, 2018, net periodic benefit cost is recorded in Other (income) expense, net for fiscal year 2019, and in Cost of products sold, Selling and administrative expenses and Research and development costs prior to fiscal year 2019. Refer to Note 1 for more details.	

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Table of Contents
Appendix B
NOTE 15. OTHER (INCOME) EXPENSE, NET (Continued)
In January 2017, the Company sold an Australian distribution facility, previously reported in the International reportable segment, which resulted in $23 in cash proceeds from investing activities and a gain of $10 included in Loss (gain) on sale of assets and investments, net in the table above for the fiscal year ended June 30, 2017.
During the second quarter of fiscal year 2017, the Company recognized a $21 non-cash charge, within the Cleaning reportable segment, related to impairing certain assets of the subsequently divested Aplicare business. The asset impairment charge is included in Asset impairment charges in the table above for the fiscal year ended June 30, 2017 and primarily related to writing down Property, plant and equipment to fair value in connection with an updated valuation of the Aplicare business.
During fiscal year 2017, the Company recognized $14 of projected environmental costs associated with its former operations at a site in Alameda County, California within Corporate. These costs are included in Other in the table above for the fiscal year ended June 30, 2017. Refer to Note 10 for further details.
NOTE 16. INCOME TAXES
The provision for income taxes on continuing operations, by tax jurisdiction, consisted of the following for the fiscal years ended June 30:

	     	2019		     	2018		     	2017		
Current																
Federal		            	$	166			            	$	177			            	$	291		
State				24					34					36		
Foreign				34					43					38		
Total current				224					254					365		
Deferred																
Federal				(22	)				(24	)				(29	)	
State				(1	)				3					(2	)	
Foreign				3					(2	)				(4	)	
Total deferred				(20	)				(23	)				(35	)	
Total			$	204				$	231				$	330		
 	
The components of earnings from continuing operations before income taxes, by tax jurisdiction, consisted of the following for the fiscal years ended June 30:

	     	2019	     	2018	     	2017	
United States		         	$	912		         	$	963		         	$	927	
Foreign				112				91				106	
Total			$	1,024			$	1,054			$	1,033	

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Table of Contents
Appendix B
NOTE 16. INCOME TAXES (Continued)
A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate on continuing operations follows for the fiscal years ended June 30:

	      	2019	      	2018	      	2017	
Statutory federal tax rate		      	21.0	%		      	28.1	%		      	35.0	%	
State taxes (net of federal tax benefits)			1.7				2.4				2.2		
Tax differential on foreign earnings			1.0				1.2				(0.6	)	
Federal domestic manufacturing deduction			—				(1.8	)			(2.6	)	
Change in valuation allowance			0.1				0.3				0.2		
Federal excess tax benefits			(2.3	)			(1.7	)			(2.0	)	
Reversals of deferred taxes related to foreign unremitted earnings			—				(2.6	)			—		
Remeasurement of deferred taxes			0.1				(3.1	)			—		
Other differences			(1.8	)			(1.0	)			(0.3	)	
Effective tax rate			19.8	%			21.8	%			31.9	%	
  	
The Tax Act was signed into law by the President of the United States on December 22, 2017. The Tax Act made significant changes to U.S. tax law, and included a reduction of U.S. corporation statutory income tax rates from 35% to 21%, effective January 1, 2018. Under the Tax Act, the Company was subject to an average federal statutory tax rate of 28.1% for its fiscal year ended June 30, 2018. The Company’s federal statutory tax rate was 21.0% beginning in July 2018 for the fiscal year ended June 30, 2019. The Tax Act also included, among other things, a one-time transition tax on accumulated foreign earnings and the adoption of a modified territorial approach to the taxation of future foreign earnings.
During the second quarter of fiscal year 2018, the Company made reasonable estimates of the impacts of the Tax Act and initially recorded total benefits of $81 as provisional, as defined in Staff Accounting Bulletin No. 118, as follows:

	     	Adjustments		
One-time net deferred tax liability reduction		               	$	60		
One-time transition tax				(7	)	
Net total one-time tax benefit				53		
Beneficial year-to-date current taxable income impact				28		
Total tax benefits			$	81		
  	
As of December 31, 2018, the Company completed its accounting for all of the enactment-date income tax effects of the Tax Act. Cumulative measurement adjustments through the second quarter of fiscal year 2019 were insignificant.
Per U.S. GAAP, foreign withholding taxes are provided on unremitted foreign earnings that are not indefinitely reinvested at the time the earnings are generated. The Company regularly reviews and assesses whether there are any changes to its indefinite reinvestment assertion. Through the second quarter of fiscal year 2018, the Company had determined that the undistributed earnings of a number of its foreign subsidiaries were indefinitely reinvested. When the Tax Act was passed into law in December 2017, it significantly reduced the cost of U.S. repatriation. In the third quarter of fiscal year 2018, the Company concluded an analysis wherein it determined that none of the undistributed earnings of its foreign subsidiaries were indefinitely reinvested. As a result, the Company is providing foreign withholding taxes on the undistributed earnings of all foreign subsidiaries where applicable. These withholding taxes had no significant impact on the Company’s consolidated results.

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Table of Contents
Appendix B
NOTE 16. INCOME TAXES (Continued)
The components of net deferred tax assets (liabilities) as of June 30 are shown below:

	     	2019		     	2018		
Deferred tax assets									
Compensation and benefit programs		$	100			$	103		
Net operating loss and tax credit carryforwards			87				86		
Accruals and reserves			41				28		
Basis difference related to Venture Agreement			19				19		
Inventory costs			22				16		
Other			21				25		
Subtotal			290				277		
Valuation allowance			(44	)			(43	)	
Total deferred tax assets			246				234		
Deferred tax liabilities									
Fixed and intangible assets			(236	)			(232	)	
Low-income housing partnerships			(13	)			(17	)	
Other			(18	)			(19	)	
Total deferred tax liabilities			(267	)			(268	)	
Net deferred tax assets (liabilities)		$	(21	)		$	(34	)	
 	 	 	 	 	 	 	 	 	
The Company reviews its deferred tax assets for recoverability on a quarterly basis. A valuation allowance is established when the Company believes that it is more likely than not that some portion of its deferred tax assets will not be realized. Valuation allowances have been provided to reduce deferred tax assets to amounts considered recoverable. Details of the valuation allowance were as follows as of June 30:	
	     	2019		     	2018		     	2017		
Valuation allowance at beginning of year		$	(43	)		$	(40	)		$	(37	)	
Net decrease/(increase) for other foreign deferred tax assets			—				—				—		
Net decrease/(increase) for foreign net operating loss carryforwards and tax credits			(1	)			(3	)			(3	)	
Valuation allowance at end of year		$	(44	)		$	(43	)		$	(40	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
As of June 30, 2019, the Company had foreign tax credit carryforwards of $35 for U.S. income tax purposes with expiration dates between fiscal years 2024 and 2029. Tax credit carryforwards in foreign jurisdictions of $24 can be carried forward indefinitely. Tax benefits from foreign net operating loss carryforwards of $19 have expiration dates between fiscal years 2020 and 2036. Tax benefits from foreign net operating loss carryforwards of $9 can be carried forward indefinitely.
The Company files income tax returns in the U.S. federal and various state, local and foreign jurisdictions. The federal statute of limitations has expired for all tax years through June 30, 2015. Various income tax returns in state and foreign jurisdictions are currently in the process of examination.
The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of June 30, 2019 and 2018, the total balance of accrued interest and penalties related to uncertain tax positions was $4 and $5, respectively. Interest and penalties related to uncertain tax positions included in income tax expense resulted in a net benefit of $1 in fiscal year 2019, a net expense of $1 in fiscal year 2018, and a net benefit of $1 in fiscal year 2017.

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Table of Contents
Appendix B
NOTE 16. INCOME TAXES (Continued)
The following is a reconciliation of the beginning and ending amounts of the Company’s gross unrecognized tax benefits:

	     	2019		     	2018		     	2017		
Unrecognized tax benefits at beginning of year		$	47			$	40			$	37		
Gross increases - tax positions in prior periods			2				2				1		
Gross decreases - tax positions in prior periods			(20	)			(1	)			(6	)	
Gross increases - current period tax positions			6				8				9		
Gross decreases - current period tax positions			—				—				—		
Lapse of applicable statute of limitations			(3	)			(2	)			(1	)	
Settlements			(1	)			—				—		
Unrecognized tax benefits at end of year		$	31			$	47			$	40		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Included in the balance of unrecognized tax benefits as of June 30, 2019, 2018 and 2017, were potential benefits of $23, $33 and $28, respectively, which if recognized, would affect the effective tax rate. Unrecognized tax benefits are not expected to significantly increase or decrease within the next 12 months.
During the year ended June 30, 2019, new facts and circumstances warranted the recognition of previously unrecognized federal, state, and foreign income tax benefits from prior years. The benefits that were recognized in the current year were not material for any one jurisdiction or any one tax position.
NOTE 17. EMPLOYEE BENEFIT PLANS
Retirement Income Plans
The Company has various retirement income plans for eligible domestic and international employees. As of June 30, 2019 and 2018, the domestic retirement income plans were frozen for most participants, and the benefits of the domestic retirement income plans were generally based on either employee years of service and compensation or a stated dollar amount per year of service.
The Company contributed $63, $21 and $31 to its domestic retirement income plans during fiscal years 2019, 2018 and 2017, respectively. The Company’s funding policy is to contribute amounts sufficient to meet benefit payments and minimum funding requirements as set forth in employee benefit tax laws plus additional amounts as the Company may determine to be appropriate.
Retirement Health Care Plans
The Company provides certain health care benefits for employees who meet age, participation and length of service requirements at retirement. The plans pay stated percentages of covered expenses after annual deductibles have been met or stated reimbursements up to a specified dollar subsidy amount. Benefits paid take into consideration payments by Medicare for the domestic plan. The plans are funded as claims are paid, and the Company has the right to modify or terminate certain plans.

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Table of Contents
Appendix B
NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)
Benefit Obligation and Funded Status
Summarized information for the Company’s retirement income and retirement health care plans as of and for the fiscal years ended June 30 is as follows:

		Retirement
Income	    	Retirement
Health Care	
	     	2019		     	2018		 	2019		   	2018		
Change in benefit obligations:																			
Benefit obligation as of beginning of year		$	593			$	633			   	$	38			   	$	42		
Service cost			1				1					—					—		
Interest cost			23				23					2					2		
Actuarial loss (gain)			26				(21	)				(3	)				(2	)	
Plan amendments			—				1					—					—		
Translation and other adjustments			—				(1	)				—					—		
Benefits paid			(39	)			(43	)				(3	)				(4	)	
Benefit obligation as of end of year			604				593					34					38		
Change in plan assets:																			
Fair value of assets as of beginning of year			420				434					—					—		
Actual return on plan assets			41				8					—					—		
Employer contributions			63				22					3					4		
Benefits paid			(39	)			(43	)				(3	)				(4	)	
Translation and other adjustments			—				(1	)				—					—		
Fair value of plan assets as of end of year			485				420					—					—		
Accrued benefit cost, net funded status		$	(119	)		$	(173	)			$	(34	)			$	(38	)	
Amount recognized in the balance sheets consists of:																			
Pension benefit assets		$	48			$	3				$	—				$	—		
Current accrued benefit liability			(12	)			(13	)				(2	)				(2	)	
Non-current accrued benefit liability			(155	)			(163	)				(32	)				(36	)	
Accrued benefit cost, net		$	(119	)		$	(173	)			$	(34	)			$	(38	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
For the retirement income plans, the benefit obligation is the projected benefit obligation. For the retirement health care plan, the benefit obligation is the accumulated benefit obligation (ABO).
The ABO for all retirement income plans was $603, $592 and $632 as of June 30, 2019, 2018 and 2017, respectively.
Retirement income plans with ABO in excess of plan assets as of June 30 were as follows:

		ABO Exceeds the Fair Value
of Plan Assets	
	     	2019	     	2018	
Projected benefit obligation		           $	167		           $	571	
Accumulated benefit obligation			166			571	
Fair value of plan assets			—			395	

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Table of Contents
Appendix B
NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)
Net Periodic Benefit Cost
The net cost of the retirement income and health care plans for the fiscal years ended June 30 included the following components:

		Retirement Income		Retirement Health Care	
	     	2019		     	2018		     	2017		     	2019		     	2018		     	2017		
Service cost		$	1			$	1			$	1			    	$	—			    	$	—			    	$	—		
Interest cost			23				23				22					2					2					2		
Expected return on plan assets			(18	)			(19	)			(20	)				—					—					—		
Amortization of unrecognized items			9				10				11					(3	)				(3	)				(2	)	
Total		$	15			$	15			$	14				$	(1	)			$	(1	)			$	—		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As a result of adopting ASU No. 2017-07, “Compensation-Retirement Benefits (Topic 715),” effective July 1, 2018, net periodic benefit cost is reflected in Other (income) expense, net for fiscal year 2019, and in Cost of products sold, Selling and administrative expenses and Research and development costs prior to fiscal year 2019. Refer to Note 1 for more details.
Items not yet recognized as a component of postretirement expense as of June 30, 2019, consisted of:

	     	Retirement
Income		     	Retirement
Health Care		
Net actuarial loss (gain)		         	$	236			            	$	(18	)	
Prior service benefit				—					(2	)	
Net deferred income tax (assets) liabilities				(56	)				5		
Accumulated other comprehensive loss (income)			$	180				$	(15	)	
 	 	 	 	 	 	 	 	 	 	 	
Net actuarial loss (gain) recorded in Accumulated other comprehensive net (losses) income for the fiscal year ended June 30, 2019, included the following:

	     	Retirement
Income		     	Retirement
Health Care		
Net actuarial loss (gain) as of beginning of year		          	$	242			           	$	(17	)	
Amortization during the year				(9	)				2		
Loss (gain) during the year				3					(3	)	
Net actuarial loss (gain) as of end of year			$	236				$	(18	)	
 	 	 	 	 	 	 	 	 	 	 	
The Company uses the straight-line amortization method for unrecognized prior service costs and benefits. In fiscal year 2020, the Company expects to recognize, on a pre-tax basis, $9 of the net actuarial loss as a component of net periodic benefit cost for the retirement income plans. In addition, in fiscal year 2020, the Company expects to recognize, on a pre-tax basis, $3 of the net actuarial gain as a component of net periodic benefit cost for the retirement health care plans.

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Table of Contents
Appendix B
NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)
Assumptions
Weighted-average assumptions used to estimate the actuarial present value of benefit obligations were as follows as of June 30:

		Retirement
Income		Retirement
Health Care	
	     	2019	     	2018	     	2019	     	2018	
Discount rate		3.41	%		4.10	%		3.35	%		4.01	%	
Rate of compensation increase		2.86	%		2.87	%		n/a			n/a		
Weighted-average assumptions used to estimate the retirement income and retirement health care costs were as follows as of June 30:

		Retirement Income	
	     	2019	     	2018	     	2017	
Discount rate		4.10	%		3.70	%		3.42	%	
Rate of compensation increase		2.87	%		2.83	%		2.92	%	
Expected return on plan assets		4.33	%		4.43	%		4.73	%	
 	
		Retirement Health Care	
		2019		2018		2017	
Discount rate		4.01	%		3.66	%		3.42	%	
The expected long-term rate of return assumption is based on an analysis of historical experience of the portfolio and the summation of prospective returns for each asset class in proportion to the fund’s current asset allocation.
Expected Benefit Payments
Expected benefit payments for the Company’s retirement income and retirement health care plans as of June 30, 2019, were as follows:

	     	Retirement
Income	     	Retirement
Health Care	
2020		          $	38		             $	2	
2021			51			2	
2022			36			2	
2023			36			2	
2024			37			2	
Fiscal years 2025 through 2029			186			10	
Expected benefit payments are based on the same assumptions used to measure the benefit obligations and include estimated future employee service.

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Table of Contents
Appendix B
NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)
Plan Assets
The target allocations and weighted average asset allocations by asset category of the investment portfolio for the Company’s domestic retirement income plans as of June 30 were:

		% Target Allocation		% of Plan Assets	
	     	2019	     	2018	     	2019	     	2018	
U.S. equity		9	%		11	%		9	%		11	%	
International equity		8	%		12	%		8	%		12	%	
Fixed income		83	%		74	%		83	%		74	%	
Other		—	%		3	%		—	%		3	%	
Total		100	%		100	%		100	%		100	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
The target asset allocation is determined based on the optimal balance between risk and return and, at times, may be adjusted to achieve the plan’s overall investment objective to generate sufficient resources to pay current and projected plan obligations over the life of the domestic retirement income plan.
The following table sets forth by level within the fair value hierarchy, the retirement income plans’ assets carried at fair value as of June 30:

		2019	
	     	Level 1	     	Level 2	     	Total	  	
Cash equivalents		       	$2		       	$—		$	2	 	
Total assets in the fair value hierarchy			$2			$—		$	2	 	
Common collective trusts measured at net asset value										 	
Bond funds								$	393	 	
International equity funds									50	 	
Domestic equity funds									39	 	
Real estate fund									1	 	
Total common collective trusts measured at net asset value									483	 	
Total assets at fair value								$	485	 	

		2018	
		Level 1		Level 2		Total	 	
Cash equivalents			$3			$—		$	3	 	
Total assets in the fair value hierarchy			$3			$—		$	3	 	
Common collective trusts measured at net asset value										 	
Bond funds								$	299	 	
International equity funds									60	 	
Domestic equity funds									44	 	
Real estate fund									14	 	
Total common collective trusts measured at net asset value									417	 	
Total assets at fair value								$	420	 	

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Table of Contents
Appendix B
NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)
The carrying value of cash equivalents approximated their aggregate fair value as of June 30, 2019 and 2018.
Common collective trust funds are not publicly traded and were valued at a net asset value unit price determined by the portfolio’s sponsor based on the fair value of underlying assets held by the common collective trust fund on June 30, 2019 and 2018.
The common collective trusts are invested in various trusts that attempt to achieve their investment objectives by investing primarily in other collective investment funds that have characteristics consistent with each trust’s overall investment objective and strategy.
Defined Contribution Plans
The Company has various defined contribution plans for eligible domestic and international employees. The aggregate cost of the domestic defined contribution plans was $49, $47 and $47 in fiscal years 2019, 2018 and 2017, respectively. The aggregate cost of the international defined contribution plans was $4, $3 and $3 for the fiscal years ended June 30, 2019, 2018 and 2017, respectively.
NOTE 18. SEGMENT REPORTING
The Company operates through strategic business units (SBU) that are aggregated into the following four reportable segments based on the economics and nature of the products sold:

●	Cleaning consists of laundry, home care and professional products marketed and sold in the United States. Products within this segment include laundry additives, such as bleach products under the Clorox® brand and Clorox 2® stain fighter and color booster; home care products, primarily under the Clorox®, Formula 409®, Liquid-Plumr®, Pine-Sol®, S.O.S® and Tilex® brands; naturally derived products under the Green Works® brand; and professional cleaning, disinfecting and food service products under the CloroxProTM, Dispatch®, Clorox Healthcare®, Hidden Valley® and KC Masterpiece® brands.
 	
●	Household consists of charcoal, bags, wraps and containers, cat litter, and digestive health products marketed and sold in the United States. Products within this segment include charcoal products under the Kingsford® and Match Light® brands; bags, wraps and containers under the Glad® brand; cat litter products under the Fresh Step®, Scoop Away® and Ever Clean® brands; and digestive health products under the RenewLife® brand.
 	
●	Lifestyle consists of food products, water-filtration systems and filters, natural personal care products, and dietary supplements mainly marketed and sold in the United States. Products within this segment include dressings and sauces, primarily under the Hidden Valley®, KC Masterpiece®, Kingsford® and Soy Vay® brands; water-filtration systems and filters under the Brita® brand; natural personal care products under the Burt’s Bees® brand; and dietary supplements under the Rainbow Light®, Natural VitalityTM, and NeoCell® brands.
 	
●	International consists of products sold outside the United States. Products within this segment include laundry; home care; water-filtration systems and filters; digestive health products; charcoal; cat litter products; food products; bags, wraps and containers; natural personal care products; and professional cleaning and disinfecting products, primarily under the Clorox®, Glad®, PinoLuz®, Ayudin®, Limpido®, Clorinda®, Poett®, Mistolin®, Lestoil®, Bon Bril®, Brita®, Green Works®, Pine-Sol®, Agua Jane®, Chux®, RenewLife®, Kingsford®, Fresh Step®, Scoop Away®, Ever Clean®, KC Master-piece®, Hidden Valley®, Burt’s Bees®, CloroxProTM, and Clorox Healthcare® brands.	
Certain non-allocated administrative costs, interest income, interest expense and various other non-operating income and expenses are reflected in Corporate. Corporate assets include cash and cash equivalents, prepaid expenses and other current assets, property and equipment, other investments and deferred taxes.

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Table of Contents
Appendix B
NOTE 18. SEGMENT REPORTING (Continued)

	     	Fiscal
Year	     	Cleaning	     	Household	     	Lifestyle	     	International	     	Corporate		     	Total
Company	
Net sales		     2019		     $	2,109		        $	1,870		      $	1,265		          $	970		        $	—			     $	6,214	
		2018			2,060			1,959			1,077			1,028			—				6,124	
		2017			2,002			1,961			1,000			1,010			—				5,973	
Earnings (losses) from continuing operations before income taxes		2019			600			316			255			96			(243	)			1,024	
		2018			574			370			243			84			(217	)			1,054	
		2017			523			419			244			81			(234	)			1,033	
Income from equity investees		2019			—			—			—			15			—				15	
		2018			—			—			—			12			—				12	
		2017			—			—			—			19			—				19	
Total assets		2019			903			1,223			1,581			1,027			382				5,116	
		2018			902			1,223			1,533			1,045			357				5,060	
Capital expenditures		2019			49			81			39			26			11				206	
		2018			60			73			22			33			6				194	
		2017			76			82			30			37			6				231	
Depreciation and amortization		2019			52			67			31			25			5				180	
		2018			49			65			23			24			5				166	
		2017			51			64			20			22			6				163	
Significant non-cash charges included in earnings (losses) from continuing operations before income taxes:																						
Stock-based compensation		2019			14			12			7			1			9				43	
		2018			13			12			7			1			20				53	
		2017			16			15			9			2			9				51	
All intersegment sales are eliminated and are not included in the Company’s reportable segments’ net sales.
Net sales to the Company’s largest customer, Walmart Stores, Inc. and its affiliates, were 25%, 26% and 26% of consolidated net sales for each of the fiscal years ended June 30, 2019, 2018 and 2017, respectively, and occurred across all of the Company’s reportable segments. No other customers accounted for 10% or more of the Company’s consolidated net sales in any of these fiscal years.

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Table of Contents
Appendix B
NOTE 18. SEGMENT REPORTING (Continued)
The following table provides Net sales as a percentage of the Company’s consolidated net sales, disaggregated by SBU, for the fiscal years ended June 30:

	     	2019	     	2018	     	2017	
Home care		19	%		19	%		19	%	
Laundry		9	%		9	%		9	%	
Professional products		6	%		6	%		6	%	
Cleaning		34	%		34	%		34	%	
Bags, wraps, and containers		13	%		14	%		14	%	
Charcoal		8	%		9	%		10	%	
Cat litter		7	%		7	%		7	%	
Digestive health		2	%		2	%		2	%	
Household		30	%		32	%		33	%	
Food products		9	%		9	%		9	%	
Natural personal care		5	%		4	%		4	%	
Water filtration		3	%		3	%		3	%	
Dietary supplements(1)		3	%		1	%		—	%	
Lifestyle		20	%		17	%		16	%	
International		16	%		17	%		17	%	
Total		100	%		100	%		100	%	
 										
(1)	       	The dietary supplements business was acquired in April 2018. See Note 2 for details.	
The Company’s products are marketed and sold globally. The following table provides the Company’s global product lines, which were sold in the U.S. (including Professional products SBU) and International, that accounted for 10% or more of consolidated net sales for the fiscal years ended June 30:

	     	2019	     	2018	     	2017	
Home Care products		26	%		26	%		25	%	
Bags, wraps and containers		16	%		18	%		18	%	
Laundry additives		14	%		15	%		15	%	
Food products		10	%		10	%		10	%	
Charcoal products		9	%		10	%		11	%	
Net sales and property, plant and equipment, net, by geographic area as of and for the fiscal years ended June 30 were as follows:

	     	Fiscal
Year	     	United
States	     	Foreign	     	Total
Company	
Net sales		2019		  $	5,281		     $	933		     $	6,214	
		2018			5,135			989			6,124	
		2017			5,001			972			5,973	
Property, plant and equipment, net		2019			929			105			1,034	
		2018			887			109			996	

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Table of Contents
Appendix B
NOTE 19. RELATED PARTY TRANSACTIONS
The Company holds various equity investments with ownership percentages of up to 50% in a number of consumer products businesses, most of which operate outside the United States. The equity investments, presented in Other assets accounted for under the equity method, were $57 and $55 as of the fiscal years ended June 30, 2019 and 2018, respectively. The Company has no ongoing capital commitments, loan requirements, guarantees or any other types of arrangements under the terms of its agreements that would require any future cash contributions or disbursements arising out of an equity investment.
Transactions with the Company’s equity investees typically represent payments for contract manufacturing and purchases of raw materials. Payments to related parties, including equity investees, for such transactions during the fiscal years ended June 30, 2019, 2018 and 2017 were $56, $55 and $62, respectively. Receipts from and ending accounts receivable and payable balances related to the Company’s related parties were not significant during or as of the end of each of the fiscal years presented.
NOTE 20. UNAUDITED QUARTERLY DATA

Dollars in millions, except per share data		Quarters Ended					 	
	     	September 30	     	December 31	     	March 31	     	June 30	     	Full Year	 	
Fiscal year ended June 30, 2019		          												     							 	
Net sales			$	1,563		           	$	1,473		    	$	1,551			$	1,627		     	$	6,214	 	
Cost of products sold			$	885			$	830			$	878			$	893			$	3,486	 	
Earnings from continuing operations			$	210			$	182			$	187			$	241			$	820	 	
Earnings (losses) from discontinued operations, net of tax				—				—				—				—				—	 	
Net earnings			$	210			$	182			$	187			$	241			$	820	 	
Net earnings (losses) per share:																					 	
Basic																					 	
Continuing operations			$	1.65			$	1.42			$	1.46			$	1.91			$	6.42	 	
Discontinued operations				—				—				—				—				—	 	
Basic net earnings per share			$	1.65			$	1.42			$	1.46			$	1.91			$	6.42	 	
Diluted																					 	
Continuing operations			$	1.62			$	1.40			$	1.44			$	1.88			$	6.32	 	
Discontinued operations				—				—				—				—				—	 	
Diluted net earnings per share			$	1.62			$	1.40			$	1.44			$	1.88			$	6.32	 	
Dividends declared per share			$	0.96			$	0.96			$	0.96			$	1.06			$	3.94	 	
Fiscal year ended June 30, 2018																					 	
Net sales			$	1,500			$	1,416			$	1,517			$	1,691			$	6,124	 	
Cost of products sold			$	827			$	807			$	868			$	947			$	3,449	 	
Earnings from continuing operations			$	192			$	233			$	181			$	217			$	823	 	
Earnings (losses) from discontinued operations, net of tax				—				—				—				—				—	 	
Net earnings			$	192			$	233			$	181			$	217			$	823	 	
Net earnings (losses) per share:																					 	
Basic																					 	
Continuing operations			$	1.49			$	1.81			$	1.39			$	1.69			$	6.37	 	
Discontinued operations				—				—				—				—				—	 	
Basic net earnings per share			$	1.49			$	1.81			$	1.39			$	1.69			$	6.37	 	
Diluted																					 	
Continuing operations			$	1.46			$	1.77			$	1.37			$	1.66			$	6.26	 	
Discontinued operations				—				—				—				—				—	 	
Diluted net earnings per share			$	1.46			$	1.77			$	1.37			$	1.66			$	6.26	 	
Dividends declared per share			$	0.84			$	0.84			$	0.96			$	0.96			$	3.60	 	

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Appendix B
FIVE-YEAR FINANCIAL SUMMARY
 The Clorox Company

		Years ended June 30	
Dollars in millions, except per share data	     	2019	     	2018	     	2017		     	2016	     	2015		
OPERATIONS		 				 				 									 				
Net sales		  	$	6,214			$	6,124		 	$	5,973			 	$	5,761		  	$	5,655		
Gross profit		 		2,728		 	$	2,675		 	$	2,671			 	$	2,598		 	$	2,465		
Earnings from continuing operations		 	$	820		 	$	823		 	$	703			 	$	648		 	$	606		
(Losses) earnings from discontinued operations, net of tax		 		—		 		—		 		(2	)		 		—		 		(26	)	
Net earnings		 	$	820		 	$	823		 	$	701			 	$	648		 	$	580		
COMMON STOCK		 				 				 					 				 				
Earnings per share		 				 				 					 				 				
Continuing operations		 				 				 					 				 				
Basic		 	$	6.42		 	$	6.37		 	$	5.45			 	$	5.01		 	$	4.65		
Diluted		 		6.32		 		6.26		 		5.35			 		4.92		 		4.57		
Dividends declared per share		 		3.94		 		3.60		 		3.24			 		3.11		 		2.99		
		 				 				 		 	 		 		 		 				
		As of June 30	
Dollars in millions	     	2019	     	 	2018	     	 	2017		     	 	2016	     	 	2015		
OTHER DATA		 				 				 					 				 				
Total assets(1)		 	$	5,116		 	$	5,060		 	$	4,573			 	$	4,510		 	$	4,154		
Long-term debt(1)		 		2,287		 		2,284		 		1,391			 		1,789		 		1,786		
(1)	Amounts for the fiscal years ended June 30, 2016 and 2015 have been retrospectively adjusted to conform to the presentation of debt issuance costs required by ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.”	

Continues on next page ►		
 		
THE CLOROX COMPANY - 2019 Proxy Statement	       B-65	

Table of Contents
Appendix B
THE CLOROX COMPANY
 RECONCILIATION OF ECONOMIC PROFIT (UNAUDITED)(1)

Dollars in millions	     	FY19	     	FY18	     	FY17	 	
Earnings from continuing operations before income taxes		$	1,024		$	1,054		$	1,033	 	
Add back:										 	
Non-cash U.S. GAAP restructuring and intangible asset impairment charges			2			2			4	 	
Interest expense			97			85			88	 	
Earnings from continuing operations before income taxes, non-cash U.S. GAAP restructuring and intangible asset impairment charges, and interest expense			1,123		$	1,141		$	1,125	 	
Less:										 	
Income taxes on earnings from continuing operations before income taxes, non-cash U.S. GAAP restructuring and intangible asset impairment charges and interest expense(2)			222			249			359	 	
Adjusted after tax profit			901			892			766	 	
Average capital employed(3)			3,231			2,977			2,680	 	
Less: Capital charge(4)			291			268			241	 	
Economic profit(1) (Adjusted after tax profit less capital charge)		$	610		$	624		$	525	 	
 	 	 	 	 	 	 	 	 	 	 	
(1)	Economic profit (EP) is defined by the Company as earnings from continuing operations before income taxes, excluding non-cash U.S. GAAP restructuring and intangible asset impairment charges, and interest expense; less income taxes (calculated utilizing the Company’s effective tax rate), and less a capital charge (calculated as average capital employed multiplied by a cost of capital rate). EP is a key financial metric that the Company’s management uses to evaluate business performance and allocate resources, and is a component in determining employee incentive compensation. The Company’s management believes EP provides additional perspective to investors about financial returns generated by the business and represents profit generated over and above the cost of capital used by the business to generate that profit.	
(2)	The tax rate applied is the effective tax rate on earnings from continuing operations, which was 19.8%, 21.8% and 31.9% in fiscal years 2019, 2018 and 2017, respectively.	
(3)	Total capital employed represents total assets less non-interest bearing liabilities. Adjusted capital employed represents total capital employed adjusted to add back current year after tax noncash U.S. GAAP restructuring and intangible asset impairment charges. Average capital employed is the average of adjusted capital employed for the current year and total capital employed for the prior year, based on year-end balances. See below for details of the average capital employed calculation.	
(4)	Capital charge represents average capital employed multiplied by a cost of capital, which was 9% for all fiscal years presented. The calculation of capital charge includes the impact of rounding numbers.	

Dollars in millions	     	FY19	     	FY18	     	FY17	 	
Total assets		$	5,116		$	5,060		$	4,573	 	
Less:										 	
Accounts payable and accrued liabilities(5)			1,033			1,000			1,002	 	
Income taxes payable			9			—			—	 	
Other liabilities(5)			774			778			770	 	
Deferred income taxes			50			72			61	 	
Non-interest bearing liabilities			1,866			1,850			1,833	 	
Total capital employed			3,250			3,210			2,740	 	
Add back:										 	
After tax non-cash U.S. GAAP restructuring and intangible asset impairment charges			1			1			2	 	
Adjusted capital employed		$	3,251		$	3,211		$	2,742	 	
Average capital employed		$	3,231		$	2,977		$	2,680	 	
 	 	 	 	 	 	 	 	 	 	 	
(5)	Accounts payable and accrued liabilities and Other Liabilities are adjusted to exclude interest-bearing liabilities.	

B-66       	THE CLOROX COMPANY - 2019 Proxy Statement	

Table of Contents

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Annual Meeting Proxy Card		

▼ IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼	

 A 	The Board of Directors recommends a vote FOR the election of each of the following director nominees:	
1. Election of Directors:	 	For	   	Against	  	Abstain	 		 	For	   	Against	  	Abstain	 		 	For	   	Against	  	Abstain	 		
    	01 - Amy Banse	 	☐		☐		☐		05 - Esther Lee	 	☐		☐		☐		09 - Pamela Thomas-Graham	 	☐		☐		☐			
	02 - Richard H. Carmona	 	☐		☐		☐		06 - A.D. David Mackay		☐		☐		☐		10 - Russell Weiner		☐		☐		☐			
	03 - Benno Dorer		☐		☐		☐	 	07 - Robert W. Matschullat		☐		☐		☐		11 - Christopher J. Williams		☐		☐		☐			
	04 - Spencer C. Fleischer		☐		☐		☐		08 - Matthew J. Shattock		☐		☐		☐		 		☐		☐		☐			

 B 	The Board of Directors recommends a vote FOR Proposal 2.	
	   	For	  	Against	  	Abstain	
2. Advisory Vote to Approve Executive Compensation.		☐		☐		☐	

 D 	The Board of Directors recommends a vote FOR Proposal 4.	
	   	For	  	Against	  	Abstain	
4. Approval of the Amended and Restated Certificate of Incorporation to Eliminate the Supermajority Voting Provision.	 	☐		☐		☐	

 C 	The Board of Directors recommends a vote FOR Proposal 3.	
	   	For	  	Against	  	Abstain	
3. Ratification of Independent Registered Public Accounting Firm.		☐		☐		☐	

 E 	Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below	
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
Date (mm/dd/yyyy) — Please print date below.		Signature 1 — Please keep signature within the box.		Signature 2 — Please keep signature within the box.	
/        /       	 	 	 	 	

Table of Contents
Dear Stockholders:
Attached is the proxy for The Clorox Company’s 2019 Annual Meeting of Stockholders (the “Annual Meeting”). It is important that you vote your shares. You may vote via telephone, the Internet or mail. If you wish to vote via telephone or the Internet, instructions are printed on this form. If you wish to vote by mail, please mark, sign, date and return the proxy using the enclosed envelope.
Only stockholders on the record date, September 23, 2019, or their legal proxy holders, may attend the Annual Meeting. To be admitted to the Annual Meeting, you must bring a current form of government-issued photo identification and proof that you owned Clorox common stock on the record date. Please see the “Attending the Annual Meeting” section of the proxy statement for further information.
Sincerely,

Angela C. Hilt
 Vice President – Corporate Secretary
& Deputy General Counsel

Annual Meeting of Stockholders
●	Meeting Date: November 20, 2019	
●	Check-In Time: 8:30 a.m. Pacific Time	
●	Meeting Time: 9:00 a.m. Pacific Time	
●	Meeting Location: the Company’s Pleasanton, CA Offices, 4900 Johnson Drive, Pleasanton, CA 94588	
Please note that cameras, recording equipment and other electronic devices will not be allowed to be used in the meeting except for use by the Company. For your protection, briefcases, purses, packages, etc. may be inspected as you enter the meeting.
The Notice of Annual Meeting, Proxy Statement and 2019 Integrated Annual Report — Executive Summary are available at www.envisionreports.com/CLX.

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▼ IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼	

Proxy — The Clorox Company		
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CLOROX COMPANY
ANNUAL MEETING OF STOCKHOLDERS — NOVEMBER 20, 2019
The stockholder(s) whose signature(s) appear(s) on the reverse side hereby appoint(s) Benno Dorer, Kevin Jacobsen and Laura Stein, and each of them individually, as proxies, each with full power of substitution, to vote as designated on the reverse side of this ballot, all of the shares of common stock of The Clorox Company that the stockholder(s) whose signature(s) appear(s) on the reverse side would be entitled to vote, if personally present, at the Annual Meeting of Stockholders to be held at 9:00 a.m., Pacific time on Wednesday, November 20, 2019, at the Company’s Pleasanton, CA Offices, 4900 Johnson Drive, Pleasanton, CA 94588 and any adjournment or postponement thereof. A majority of said proxies, including any substitutes, or if only one of them be present, then that one, may exercise all of the powers of said proxies hereunder.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). WHEN PROPERLY EXECUTED AND IF NO SUCH DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS, FOR PROPOSAL 2, FOR PROPOSAL 3 AND FOR PROPOSAL 4.
If any other matters properly come before the meeting, the persons named in this proxy will vote in their discretion.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE.
(Items to be voted appear on reverse side)

 F 	Non-Voting Items	
Change of Address —Please print new address below.	     	Comments — Please print your comments below.