UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
 Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2019
THE CLOROX COMPANY
 (Exact name of registrant as specified in its charter)
________________

Delaware	1-07151	31-0595760	
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer	
incorporation)		Identification No.)	

1221 Broadway, Oakland, California 94612-1888
 (Address of principal executive offices) (Zip code)
(510) 271-7000
 (Registrant's telephone number, including area code)
Not applicable
 (Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]  Written communications pursuant to Rule 425 Under the Securities Act (17 CFR 230.425)	
 	
[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 	
[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 	
[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company       ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.       ☐

Item 2.02 Results of Operations and Financial Condition
On February 4, 2019, The Clorox Company issued a press release announcing its financial results for its second quarter ended December 31, 2018. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
Attached hereto as Exhibit 99.2 and incorporated herein by reference is supplemental financial information.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
See the Exhibit Index below.
EXHIBIT INDEX

Exhibit	    	Description	
99.1		Press Release dated February 4, 2019 of The Clorox Company	
99.2		Supplemental information regarding financial results	

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE CLOROX COMPANY	
		 	
Date: February 4, 2019	By: 	/s/ Laura Stein	
		Executive Vice President –	
		General Counsel and Corporate Affairs	

	
PRESS RELEASE	
 	
Clorox Reports Second-Quarter Fiscal Year 2019 Results, Confirms Outlook
OAKLAND, Calif., Feb. 4, 2019 – For its second quarter of fiscal year 2019, which ended Dec. 31, 2018, The Clorox Company (NYSE:CLX) reported sales growth of 4 percent and, as expected, a 21 percent decrease in diluted net earnings per share from continuing operations. Diluted EPS is 37 cents lower compared to the year-ago quarter, which reflected a one-time benefit of 40 cents due to U.S. tax reform.
“Sound execution of our pricing and cost-savings plans has enabled us to address near-term headwinds, resulting in another strong quarter of topline performance,” said Clorox Chair and CEO Benno Dorer. “Importantly, we remain on track for sales and earnings in fiscal year 2019.”
“With pricing largely behind us, we’re focused on ongoing investment in our brands through robust back-half innovation, behind significant advertising and sales promotion support,” Dorer added. “We have continued confidence in our ability to deliver long-term value for our shareholders, guided by our 2020 Strategy, with an emphasis on innovation, brands with purpose and superior value, and leadership in digital.”
All results in this press release are reported on a continuing operations basis, unless otherwise stated.
Fiscal Second-Quarter Results
Following is a summary of key second-quarter results. All comparisons are with the second quarter of fiscal year 2018, unless otherwise stated.

●	4% sales growth	
●	$1.40 diluted EPS (21% decrease)	
Sales increased 4 percent, reflecting 3 points of negative impact from unfavorable foreign currency headwinds as well as 4 points of benefit from Nutranext, which was acquired in April 2018.
The company’s second-quarter gross margin increased by 70 basis points to 43.7 percent from 43.0 percent in the year-ago quarter. Gross margin expansion was driven primarily by the benefits of price increases and cost savings. These factors were partially offset by higher manufacturing and logistics as well as commodity costs.
Clorox delivered earnings from continuing operations of $182 million, or $1.40 diluted EPS — a 21 percent decrease in diluted earnings per share — compared to $233 million, or $1.77 diluted EPS, in the year-ago quarter. The 37-cent lower diluted EPS reflects the implementation of U.S. tax reform in 2018, which provided a one-time benefit of 40 cents in the year-ago quarter.
Year-to-date net cash provided by continuing operations was $449 million, compared with $324 million in the year-ago period, an increase of 39 percent, due to lower tax payments, primarily from benefits of U.S. tax reform.
Page 1 of 8

Key Segment Results
Following is a summary of key second-quarter results from continuing operations by reportable segment. All comparisons are with the second quarter of fiscal year 2018, unless otherwise stated.
Cleaning
(Laundry, Home Care, Professional Products)

●	6% sales increase	
●	12% pretax earnings increase	
Segment sales increased, reflecting growth across all businesses. Home Care led segment sales growth, benefiting from strong innovation across the portfolio, including new products on the Clorox ® Scentiva ® platform. Additionally, segment results reflected double-digit sales increases in the Professional Products business from broad-based gains across all categories. Double-digit pretax earnings growth — on top of 16 percent growth in the year-ago period — was driven primarily by higher sales as well as the benefits of cost savings and price increases, partially offset by higher commodity as well as manufacturing and logistics costs.
Household
(Bags and Wraps, Charcoal, Cat Litter, Digestive Health)

●	4% sales decrease	
●	15% pretax earnings decrease	
Segment sales were down, reflecting decreases in Bags and Wraps, due mainly to heightened competitive activity in trash bags and distribution losses in food storage products, and in Charcoal, primarily due to a shift in the timing of shipments from the second quarter to the third quarter this fiscal year in support of an early-season customer program, as well as continued lower consumption. These factors were partially offset by double-digit sales gains in Cat Litter behind the continued strong performance of Fresh Step Clean Paws ® innovation. Lower pretax earnings were driven primarily by lower sales, higher manufacturing and logistics costs, and higher commodity costs, which were partially offset by the benefits of price increases and cost savings.
Lifestyle
(Dressings and Sauces, Water Filtration, Natural Personal Care, Dietary Supplements)

●	25% sales increase	
●	13% pretax earnings increase	
Segment sales gains reflect the positive impact of the Nutranext acquisition as well as growth in all businesses. Key contributors were Natural Personal Care, behind strength in the Burt’s Bees ® core business driven by innovation, and Dressings and Sauces, behind double-digit sales gains in Hidden Valley ® dry dressings. The increase in pretax earnings was the result of higher sales, partially offset by higher manufacturing and logistics costs. Second-quarter pretax earnings also reflected Nutranext integration costs.
International
(Sales outside of the U.S.)

●	8% sales decrease	
●	9% pretax earnings increase	
Page 2 of 8

Segment sales decreased, as the benefit of price increases was more than offset by about 16 points of negative impact from unfavorable foreign currency exchange rates. Pretax earnings growth was driven by continued progress in the International business’s ongoing Go Lean strategy, including pricing and cost savings initiatives, which more than offset the impact of unfavorable foreign currency exchange rates, mainly from devaluation of the Argentine peso, as well as higher costs in manufacturing and logistics due to inflation.
Clorox Confirms Fiscal Year 2019 Outlook

●	2% to 4% sales growth	
●	$6.20 to $6.40 diluted EPS range	
Clorox continues to anticipate sales growth in the range of 2 to 4 percent, driven by ongoing strong innovation, which is expected to deliver about 3 percentage points of incremental sales. It also reflects about 3 percentage points of combined net benefit from the Nutranext acquisition, which is running ahead of plan, and the Aplicare divestiture. These factors are expected to be partially offset by a more pronounced foreign exchange impact of about 3 points, primarily from the devaluation of the Argentine peso.
Gross margin is expected to remain about flat in fiscal year 2019, as the benefits of price increases and strong cost savings are expected to be offset by negative impacts from cost pressures and foreign currency exchange rates.
Clorox continues to anticipate advertising and sales promotion spending to be about 10 percent of sales behind the company’s ongoing commitment to invest strongly behind its brands.
Selling and administrative expenses are expected to stay at about 14 percent of sales, continuing to reflect more normalized performance-based employee incentive compensation costs as well as costs related to the Nutranext acquisition.
The company’s effective tax rate is now projected to be in the range of 22 to 23 percent.
Net of all these factors, Clorox expects fiscal year 2019 diluted EPS from continuing operations to remain in the range of $6.20 to $6.40. Fiscal year diluted EPS also continues to include about 8 to 12 cents of dilution related to the Nutranext acquisition, in addition to 5 to 7 cents of negative impact from tariffs, which are affecting a couple of the company’s business units.
“We moved early to address cost and currency pressures through a focused approach, led by pricing actions and cost-savings initiatives grounded in our 2020 Strategy,” said Chief Financial Officer Kevin Jacobsen. “With our latest results — most notably a return to gross margin expansion — we’ve reaffirmed that the steps we’re taking are the right ones to drive long-term shareholder value, allowing us to keep investing in our brands to drive superior consumer value. We feel good that we remain on track for the full fiscal year.”
For More Detailed Financial Information
Visit the company’s Financial Information: Quarterly Results section of the company’s website at TheCloroxCompany.com for the following:

●	Supplemental unaudited volume and sales growth information	
●	Supplemental unaudited gross margin driver information	
●	Supplemental unaudited reconciliation of earnings from continuing operations before interest and taxes (EBIT) and earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA)	
●	Supplemental unaudited balance sheet and cash flow information and free cash flow reconciliation	
Note: Percentage and basis-point changes noted in this press release are calculated based on rounded numbers, except for per-share data and the effective tax rate. Supplemental materials are available in the Financial Information: Quarterly Results section of the company’s website at TheCloroxCompany.com .
Page 3 of 8

The Clorox Company
The Clorox Company (NYSE: CLX) is a leading multinational manufacturer and marketer of consumer and professional products with approximately 8,700 employees worldwide and fiscal year 2018 sales of $6.1 billion. 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 and sauces; Brita ® water-filtration products; Burt's Bees ® natural personal care products; RenewLife ® digestive health products; and Rainbow Light ® , Natural Vitality ® and Neocell ® dietary supplements. The company also markets brands for its industry-leading healthcare and commercial cleaning products under the CloroxPro™ and Clorox Healthcare ® names. More than 80 percent of the company’s sales are generated from brands that hold the No. 1 or No. 2 market share positions in their categories.
Clorox is a signatory of the United Nations Global Compact, a community of global leaders committed to sustainability. The company has been broadly recognized for its corporate responsibility efforts, included on CR Magazine's 2018 100 Best Corporate Citizens list, Barron’s 2018 100 Most Sustainable Companies, the Human Rights Campaign’s 2018 Corporate Equality Index and the 2019 Bloomberg Gender Equality Index, among others. In support of its communities, The Clorox Company and its foundations contributed about $20 million in combined cash grants, product donations and cause marketing in fiscal year 2018. For more information, visit TheCloroxCompany.com, including the Good Growth blog, and follow the company on Twitter at @CloroxCo.
Forward-Looking Statements
This press release 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, foreign currencies, costs, cost savings, margins, earnings, earnings per share, including as a result of the Nutranext acquisition, 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 the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2018, 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 e-commerce retailers, hard discounters and other alternative retail channels; volatility and increases in commodity costs such as resin, sodium hypochlorite and agricultural commodities, and increases in energy, transportation or other costs; the ability of the Company to drive sales growth, increase prices and market share, grow its product categories and manage favorable product and geographic mix; dependence on key customers and risks related to customer consolidation and ordering patterns; risks related to the Company’s use of and reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or Company information, or service interruptions; the Company’s ability to maintain its business reputation and the reputation of its brands; risks relating to acquisitions, new ventures and divestitures, and associated costs, including the potential for asset impairment charges related to, among others, intangible assets and goodwill; and the ability to complete announced transactions and, if completed, integration costs and potential contingent liabilities related to those transactions, including those related to the Nutranext acquisition;
Page 4 of 8

lower revenue or increased costs resulting from government actions and regulations, including as a result of a prolonged U.S. government shutdown; the ability of the Company to successfully manage global political, legal, tax and regulatory risks, including changes in regulatory or administrative activity and as a result of the Nutranext acquisition; worldwide, regional and local economic and financial market conditions; risks related to international operations and international trade, including political instability; government-imposed price controls or other regulations; foreign currency fluctuations, including devaluation, and foreign currency exchange rate controls, including periodic changes in such controls; changes in U.S. immigration or trade policies, including tariffs, labor claims, labor unrest and inflationary pressures, particularly in Argentina; potential negative impact and liabilities from the use, storage and transportation of chlorine in certain international markets where chlorine is used in the production of bleach; and the possibility of nationalization, expropriation of assets or other government action; the ability of the Company to innovate and to develop and introduce commercially successful products; the impact of product liability claims, labor claims and other legal or tax proceedings, including in foreign jurisdictions; the ability of the Company to implement and generate cost savings and efficiencies; the success of the Company’s business strategies; risks related to additional increases in the estimated fair value of The Procter & Gamble Company’s (P&G’s) interest in the Glad ® business such as the significant increases over fiscal year 2018 primarily due to the Tax Cuts and Jobs Act (Tax Act) and the extension of the venture agreement with, and the related R&D support provided by, P&G; the Company’s ability to attract and retain key personnel; supply disruptions and other risks inherent in reliance on a limited base of suppliers; environmental matters, including costs associated with the remediation and monitoring of past contamination, and possible increases in costs resulting from actions by relevant regulators, and the handling and/or transportation of hazardous substances; the impact of natural disasters, terrorism and other events beyond the Company’s control; the Company’s ability to maximize, assert and defend its intellectual property rights; any infringement or claimed infringement by the Company of third-party intellectual property rights; the on-going effects of the Tax Act on the Company, including as a result of any additional Congressional, administrative or other actions, or other guidance related to the Tax Act; uncertainties relating to tax positions, tax disputes and changes in the Company’s tax rate; the effect of the Company’s indebtedness and credit rating on its business operations and financial results; the Company’s ability to pay and declare dividends or repurchase its stock in the future; the Company’s ability to maintain an effective system of internal controls; the impacts of potential stockholder activism; the accuracy of the Company’s estimates and assumptions on which its financial projections are based; and risks related to the Company’s discontinuation of operations in Venezuela.
The Company’s forward-looking statements in this press release are based on management’s current views, beliefs, assumptions and expectations regarding future events and speak only as of the dates when made. 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.
Media Relations
Naomi Greer 510-271-7892, naomi.greer@clorox.com
Aileen Zerrudo 510-271-3075, aileen.zerrudo@clorox.com
Investor Relations
Lisah Burhan 510-271-3269, lisah.burhan@clorox.com
Joel Ramirez 510-271-3012, joel.ramirez@clorox.com
For recent presentations made by company management and other investor materials, visit Investor Events on the company’s website.
Page 5 of 8

Condensed Consolidated Statements of Earnings (Unaudited)
Dollars in millions, except share and per share data

	     	Three Months Ended	     	Six Months Ended	
		12/31/2018	     	12/31/2017		12/31/2018	     	12/31/2017	
Net sales		$     	1,473		$     	1,416			$     	3,036		$     	2,916		
Cost of products sold			830			807				1,715			1,634		
Gross profit			643			609				1,321			1,282		
 	
Selling and administrative expenses			211			197				423			401		
Advertising costs			145			140				284			274		
Research and development costs			32			31				64			63		
Interest expense			24			20				48			41		
Other (income) expense, net			7			(6	)			10			(3	)	
Earnings from continuing operations before income taxes			224			227				492			506		
Income taxes on continuing operations			42			(6	)			100			81		
Earnings from continuing operations			182			233				392			425		
Earnings (losses) from discontinued operations, net of tax			-			-				-			-		
Net earnings		$     	182		$	233			$	392		$	425		
 	
Net earnings (losses) per share															
Basic															
Continuing operations		$     	1.42		$	1.81			$	3.07		$	3.29		
Discontinued operations			-			-				-			-		
Basic net earnings per share		$     	1.42		$	1.81			$	3.07		$	3.29		
 	
Diluted															
Continuing operations		$     	1.40		$	1.77			$	3.02		$	3.23		
Discontinued operations			-			-				-			-		
Diluted net earnings per share		$     	1.40		$	1.77			$	3.02		$	3.23		
 	
Weighted average shares outstanding (in thousands)															
Basic			128,068			129,359				127,955			129,189		
Diluted			130,094			131,655				130,107			131,559		
Page 6 of 8

Reportable Segment Information (Unaudited)
 Dollars in millions

		Net sales		Earnings (losses) from continuing operations before
income taxes	
		Three Months Ended		Three Months Ended	
	     	12/31/2018	     	12/31/2017	     	% Change (1)	     	12/31/2018	     	12/31/2017	     	% Change (1)	
Cleaning		$      	500		$     	472		          6	%		$     	135			$     	121			          12	%	
Household			393			410		-4	%			46				54			-15	%	
Lifestyle			335			268		25	%			78				69			13	%	
International			245			266		-8	%			25				23			9	%	
Corporate			-			-		-				(60	)			(40	)		50	%	
Total		$     	1,473		$     	1,416		4	%		$     	224			$     	227			-1	%	
 	
		Net sales		Earnings (losses) from continuing operations before
income taxes	
		Six Months Ended		Six Months Ended	
		12/31/2018		12/31/2017	     	% Change (1)		12/31/2018		12/31/2017		% Change (1)	
Cleaning		$     	1,071		$     	1,031		4	%		$     	315			$     	293			8	%	
Household			835			851		-2	%			105				127			-17	%	
Lifestyle			644			514		25	%			140				133			5	%	
International			486			520		-7	%			53				46			15	%	
Corporate			-			-		-				(121	)			(93	)		30	%	
Total		$     	3,036		$     	2,916		4	%		$     	492			$     	506			-3	%	

(1) 	Percentages based on rounded numbers.	
 
Page 7 of 8

Condensed Consolidated Balance Sheets
Dollars in millions

     	     	12/31/2018	     	6/30/2018	     	12/31/2017	
		(Unaudited)						(Unaudited)	
ASSETS													
Current assets													
Cash and cash equivalents		$     	162			$     	131			$     	489		
Receivables, net			528				600				536		
Inventories, net			578				506				494		
Prepaid expenses and other current assets			97				74				161		
Total current assets			1,365				1,311				1,680		
 	
Property, plant and equipment, net			992				996				935		
Goodwill			1,586				1,602				1,202		
Trademarks, net			792				795				655		
Other intangible assets, net			127				134				65		
Other assets			211				222				221		
Total assets		$	5,073			$	5,060			$	4,758		
 	
LIABILITIES AND STOCKHOLDERS’ EQUITY													
Current liabilities													
Notes and loans payable		$	235			$	199			$	495		
Accounts payable and accrued liabilities			951				1,001				885		
Total current liabilities			1,186				1,200				1,380		
Long-term debt			2,285				2,284				1,788		
Other liabilities			789				778				791		
Deferred income taxes			71				72				39		
Total liabilities			4,331				4,334				3,998		
 	
Stockholders’ equity													
Preferred stock			-				-				-		
Common stock			159				159				159		
Additional paid-in capital			1,014				975				941		
Retained earnings			2,940				2,797				2,649		
Treasury shares			(2,794	)			(2,658	)			(2,465	)	
Accumulated other comprehensive net (loss) income			(577	)			(547	)			(524	)	
Stockholders’ equity			742				726				760		
Total liabilities and stockholders’ equity		$	5,073			$	5,060			$	4,758		
Page 8 of 8

	
The Clorox Company	
Supplemental Unaudited Condensed Information – Volume Growth

Reportable
Segments	% Change vs. Prior Year	Major Drivers of Volume Change	
	FY18	FY19		
	Q1	Q2	Q3	Q4	FY	Q1	Q2	FYTD		
Cleaning	5%	2%	4%	2%	3%	-1%	1%	0%	Q2 increase in volume primarily driven by higher shipments in Professional Products, partially offset by lower shipments in Home Care.	
Household	7%	0%	3%	0%	2%	-2%	-5%	-3%	Q2 decrease in volume primarily driven by lower shipments in Glad ® Bags and Wraps and Charcoal, partially offset by higher shipments in Cat Litter.	
Lifestyle	2%	3%	0%	27%	8%	35%	32%	33%	Q2 increase driven primarily by the benefit of the Nutranext acquisition and higher shipments in Burt’s Bees ® natural personal care.	
International	-2%	0%	3%	-1%	0%	2%	0%	1%	Q2 volume was flat.	
Total Company	4%	1%	3%	5%	3%	5%	5%	5%	 	
Supplemental Unaudited Condensed Information – Sales Growth

Reportable
Segments	% Change vs. Prior Year	Major Drivers of Variance between Volume and Sales Change	
	FY18	FY19		
	Q1	Q2	Q3	Q4	FY	Q1	Q2	FYTD		
Cleaning	5%	1%	3%	3%	3%	2%	6%	4%	Q2 variance between volume and sales driven primarily by the benefit of price increases and favorable mix.	
Household	5%	-3%	1%	-3%	0%	0%	-4%	-2%	Q2 variance between volume and sales driven primarily by the benefit of price increases, partially offset by unfavorable mix.	
Lifestyle	4%	3%	2%	21%	8%	26%	25%	25%	Q2 variance between volume and sales driven primarily by the unfavorable mix and higher trade promotion spending, partially offset by the benefit of price increases.	
International	1%	4%	4%	-2%	2%	-5%	-8%	-7%	Q2 variance between volume and sales driven primarily by unfavorable foreign currency exchange rates, partially offset by the benefit of price increases.	
Total Company	4%	1%	3%	3%	3%	4%	4%	4%	 	

	
The Clorox Company	
Supplemental Unaudited Condensed Information – Gross Margin Drivers
The table below provides details on the drivers of gross margin change versus the prior year.

Driver	Gross Margin Change vs. Prior Year (basis points)	
	FY18	FY19	
	Q1	Q2	Q3	Q4	FY	Q1	Q2	
Cost Savings	+160	+170	+140	+120	+140	+130	+140	
Price Changes	+40	+30	+50	+50	+40	+90	+220	
Market Movement (commodities)	-90	-110	-160	-130	-130	-130	-120	
Manufacturing & Logistics	-80	-240	-220	-110	-160	-280	-190	
All other (1)	+20	-20	+70	-100	+10	+40	+20	
Change vs prior year	+50	-170	-120	-170	-100	-150	+70	
Gross Margin (%)	44.9%	43.0%	42.8%	44.0%	43.7%	43.4%	43.7%	

(1) 	In Q4 of fiscal year 2018, “All other” includes about -60bps of negative impact from costs related to the Nutranext acquisition.	

	
The Clorox Company	
Supplemental Unaudited Condensed Information – Balance Sheet
 As of December 31, 2018
Working Capital Update
Dollars in Millions and percentages based on rounded numbers

 	Q2	Change	Q2	Change	
	FY 2019	FY 2018		Days (4)	Days (4)		
	($ millions)	($ millions)		FY 2019	FY 2018		
Receivables, net	$528	$536	($8)	33	34	-1	
Inventories, net	$578	$494	$84	59	53	6	
Accounts payable and Accrued Liabilities	$951	$885	$66	 	 	 	
Total WC (1)	$252	$306	($54)	 	 	 	
Total WC % of net sales (2)	4.3%	5.4%	 	 	 	 	
Average WC (1)	$226	$198	$28	 	 	 	
Average WC % of net sales (3)	3.8%	3.5%	 	 	 	 	

(1)	Working capital (WC) is defined in this context as current assets minus current liabilities excluding cash and short-term debt, based on end of period balances. Average working capital represents a two-point average of working capital.	
(2)	Represents working capital at the end of the period divided by (net sales for current quarter x 4).	
(3)	Represents a two-point average of working capital divided by (net sales for current quarter x 4).	
(4)	Days calculations based on a two-point average.	

Supplemental Unaudited Condensed Information – Cash Flow
 For the quarter ended December 31, 2018
Capital expenditures for the second quarter were $50 million versus $40 million in the year-ago quarter.
Depreciation and amortization expense for the second quarter was $44 million versus $41 million in the year-ago quarter.
Net cash provided by continuing operations in the second quarter was $190 million, or 12.9% of net sales.

	
The Clorox Company	
Supplemental Unaudited Condensed Information – Free Cash Flow
Fiscal Year-To-Date Free Cash Flow Reconciliation
Dollars in Millions and percentages based on rounded numbers

		Q2
Fiscal
YTD
2019		Q2
Fiscal
YTD
2018 (2)	
Net cash provided by continuing operations – GAAP	     	  	$449	  	     	  	$324	  	
Less: Capital expenditures			$86				$89		
Free cash flow – non-GAAP (1)			$363				$235		
Free cash flow as a percentage of net sales – non-GAAP (1)			12.0%				8.1%		
 									
Net sales			$3,036				$2,916		

(1)	In accordance with the SEC's Regulation G, this schedule provides the definition of certain non-GAAP measures and the reconciliation to the most closely related GAAP measure. Management uses free cash flow and free cash flow as a 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. In addition, free cash flow may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded.	
	 	
	These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be read in connection with the company’s consolidated financial statements presented in accordance with GAAP.	
	 	
(2)	Net cash provided by continuing operations and free cash flow have been adjusted to reflect the retrospective adoption of Accounting Standards Update No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” effective July 1, 2018.	

	
The Clorox Company	
Supplemental Unaudited Reconciliation of Earnings From Continuing Operations Before Income Taxes to EBIT (1)(3) and EBITDA (2)(3)
Dollars in millions and percentages based on rounded numbers

		FY 2018		FY 2019	
 															
	     	Q1	  	Q2	  	Q3	  	Q4	  	FY	   	Q1	  	Q2	
		 		 		 		 		 		 			
		9/30/17		12/31/17		3/31/18		6/30/18		6/30/18		9/30/18		12/31/18	
Earnings from continuing operations before income taxes		$279		$227		$242		$306		$1,054		$268		$224	
Interest income		-$1		-$2		-$1		-$2		-$6		-$1		$0	
Interest expense		$21		$20		$20		$24		$85		$24		$24	
EBIT (1)(3)		$299		$245		$261		$328		$1,133		$291		$248	
EBIT margin (1)(3)		19.9%		17.3%		17.2%		19.4%		18.5%		18.6%		16.8%	
Depreciation and amortization		$40		$41		$40		$45		$166		$44		$44	
EBITDA (2)(3)		$339		$286		$301		$373		$1,299		$335		$292	
EBITDA margin (2)(3)		22.6%		20.2%		19.8%		22.1%		21.2%		21.4%		19.8%	
Net sales		$1,500		$1,416		$1,517		$1,691		$6,124		$1,563		$1,473	
Total debt (4)		$2,200		$2,283		$2,855		$2,483		$2,483		$2,565		$2,520	
Debt to EBITDA (3)(5)		1.7		1.8		2.2		1.9		1.9		2.0		1.9	

(1)	EBIT (a non-GAAP measure) represents earnings from continuing operations before income taxes (a GAAP measure), excluding interest income and interest expense, as reported above. EBIT margin is the ratio of EBIT to net sales.	
 		
(2)	EBITDA (a non-GAAP measure) represents earnings from continuing operations before income taxes (a GAAP measure), excluding interest income, interest expense, depreciation and amortization, as reported above. EBITDA margin is the ratio of EBITDA to net sales.	
 		
(3)	In accordance with the SEC's Regulation G, this schedule provides the definition of certain non-GAAP measures and the reconciliation to the most closely related GAAP measure. Management believes the presentation of EBIT, EBIT margin, EBITDA, EBITDA margin and debt to EBITDA provides useful additional information to investors about trends in the company's operations and is useful for period-over-period comparisons. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the company’s consolidated financial statements presented in accordance with GAAP.	
 		
(4)	Total debt represents the sum of notes and loans payable, current maturities of long-term debt and long-term debt. Current maturities of long-term debt and long-term debt are carried at face value net of unamortized discounts, premiums and debt issuance costs.	
 		
(5)	Debt to EBITDA (a non-GAAP measure) represents total debt divided by EBITDA for the trailing four quarters.