----

----

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.20549

----

FORM 10-Q

**(Mark One)**
| T | QUARTERLY REPORT PURSUANT TO SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|----------------------------------------------------------------------------------------|

     Forthe quarterly period ended September 30, 2004

OR
| £ | TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934 |
|---------|----------------------------------------------------------------------------------------|

     Forthe transition period from              to              

Commission FileNumber   **1-07151**

----

**THE CLOROXCOMPANY**(Exact name of registrant asspecified in its charter)

| **Delaware** (State or other jurisdiction of incorporation or organization)    |  | **31-0595760** (I.R.S. Employer Identification No.) |
|--------------------------------------------------------------------------------|--|----------------------------------------------------------|
| **1221 Broadway Oakland, California** (Address of principal executive offices) |  | **94612-1888** (Zip code)                                |

****

**(510) 271-7000**(Registrant's telephonenumber, including area code)

                                                                                                                                                                        (Former name, former address and former fiscal year, if changedsince last report)

----

Indicate by check mark whether theregistrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter periodthat the registrant was required to file such reports), and(2) has been subject to such filing requirements for the past90 days.

           Yes       X                                        No               

Indicate by check mark whether theregistrant is an accelerated filer (as defined in Rule 12b-2 of theExchange Act.

           Yes       X                                        No                  

As of September 30, 2004 there were213,376,010 shares outstanding of the registrant's common stock(par value - $1.00), the registrant's only outstanding class ofstock.

----

| THECLOROX COMPANY |
|-------------------|
|                   |  |  |  |  |  |
|                   |  |  |  |  |  |
|                   |  |  |  |  |  |
| PARTI.            |  | FinancialInformation | PageNo. |
|                   |  |  |  |  |  |
|                   |  | Item 1. | Financial Statements(Unaudited) |  |
|                   |  |  |  |  |  |  |
|                   |  |  | Condensed ConsolidatedStatements of Earnings |  |
|                   |  |  |  | Three months endedSeptember 30, 2004 and 2003 | 3 |
|                   |  |  |  |  |  |  |
|                   |  |  | Condensed ConsolidatedBalance Sheets |  |
|                   |  |  |  | September 30, 2004 andJune 30, 2004 | 4 |
|                   |  |  |  |  |  |  |
|                   |  |  | Condensed ConsolidatedStatements of Cash Flows |  |
|                   |  |  |  | Three months endedSeptember 30, 2004 and 2003 | 5 |
|                   |  |  |  |  |  |  |
|                   |  |  | Notes to CondensedConsolidated Financial Statements | 6 |
|                   |  |  |  |  |  |  |
|                   |  | Item 2. | Management'sDiscussion and Analysis of Results of |  |
|                   |  |  |  | Operations andFinancial Condition | 16 |
|                   |  |  |  |  |  |  |
|                   |  | Item 3. | Quantitative andQualitative Disclosure About Market Risk | 21 |
|                   |  |  |  |  |
|                   |  | Item 4. | Controls and Procedures | 21 |
|                   |  |  |  |  |
| PART II.          |  | Other Information |  |
|                   |  |  |  |  |
|                   |  | Item 2. | Changes in Securities, Use ofProceeds and Issuer Purchases of |  |
|                   |  |  |        EquitySecurities | 22 |
|                   |  |  |  |  |
|                   |  | Item 6. | Exhibits and Reports on Form8-K | 23 |

----

PART I- FINANCIAL INFORMATION

Item 1.Financial Statements (Unaudited)

TheClorox Company

Condensed Consolidated Statements ofEarnings

(Inmillions, except share and per-share amounts)

|                                                               |                                                            |         | Three MonthsEnded                                                               |
|---------------------------------------------------------------|------------------------------------------------------------|---------|---------------------------------------------------------------------------------|
|                                                               |                                                            |         |                                                                                 |
|                                                               |                                                            |         | 9/30/2004                                                                       |  | 9/30/2003 |
|                                                               |                                                            |         |                                                                                 |  |  |
| Net sales                                                     | $       1,090                |         | $      1,048                                           |
| Cost of products sold                                         | 605                                                        |         |          591                       |
|                                                               |                                                            |         |                                                                                 |  |  |
| Gross profit                                                  | 485                                                        |         |          457                       |
|                                                               |                                                            |         |                                                                                 |  |  |
| Selling and administrativeexpenses                            | 132                                                        |         |          122                       |
| Advertising costs                                             | 108                                                        |         |          106                       |
| Research and developmentcosts                                 | 21                                                         |         |            19            |
| Restructuring and asset impairmentcosts                       | 30                                                         |         |   -                                                                        |
| Interest expense                                              | 8                                                          |         |              6 |
| Other (income) expense,net                                    | (3)                                                        |         |              3 |
|                                                               |                                                            |         |                                                                                 |  |  |
| Earnings from continuing operationsbefore income taxes        |          189  |         |          201                       |
| Income taxes                                                  | 66                                                         |         |            71            |
|                                                               |                                                            |         |                                                                                 |  |  |
| Earnings from continuingoperations                            | 123                                                        |         |          130                       |
|                                                               |                                                            |         |                                                                                 |
| Losses from discontinued operations,net of tax benefits of $1 |                                                            |         |                                                                                 |
|                                                               |   for the three-month periodended September 30, 2003  | -       |                                                                                 | (1) |
|                                                               |                                                            |         |                                                                                 |  |  |
| Net earnings                                                  | $         123 |         | $        129                            |
|                                                               |                                                            |         |                                                                                 |  |  |
|                                                               |                                                            |         |                                                                                 |  |  |
| Net earnings per commonshare                                  |                                                            |         |                                                                                 |
|                                                               | Basic                                                      | $0.58   |                                                                                 | $0.61 |
|                                                               | Diluted                                                    | $0.57   |                                                                                 | $0.60 |
|                                                               |                                                            |         |                                                                                 |
| Weighted average common sharesoutstanding (in thousands)      |                                                            |         |                                                                                 |
|                                                               | Basic                                                      | 212,905 |                                                                                 |  212,654 |
|                                                               | Diluted                                                    | 215,117 |                                                                                 |  214,807 |
|                                                               |                                                            |         |                                                                                 |  |  |
|                                                               |                                                            |         |                                                                                 |  |  |
| Dividends per commonshare                                     | $0.27                                                      |         | $0.27                                                                           |
|                                                               |                                                            |         |                                                                                 |  |  |
|                                                               |                                                            |         |                                                                                 |  |  |
| See Notes to Condensed ConsolidatedFinancial Statements.      |

----

PARTI - FINANCIAL INFORMATION(Continued)

Item 1.Financial Statements (Unaudited)

TheClorox Company

Condensed Consolidated Balance Sheets

(Inmillions, except share amounts)

|                                                         |                                                           |                                                                                                                         |                                                                 | 9/30/2004                                                                          |                                        | 6/30/2004                                        |
|---------------------------------------------------------|-----------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|------------------------------------------------------------------------------------|----------------------------------------|--------------------------------------------------|
|                                                         |                                                           |                                                                                                                         |                                                                 |
| **Assets**                                              |                                                           |                                                                                                                         |                                                                 |
| Current assets                                          |                                                           |                                                                                                                         |                                                                 |
|                                                         | Cash and cash equivalents                                 | $           255                                                       |                                                                 | $        232                                    |
|                                                         | Receivables, net                                          |            385                                                   |                                                                 |           460                    |
|                                                         | Inventories                                               | 305                                                                                                                     |                                                                 |          301                          |
|                                                         | Other current assets                                      | 53                                                                                                                      |                                                                 | 50                                                                                 |
|                                                         | Assets held for exchange                                  | 132                                                                                                                     |                                                                 | -                                                                                  |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
|                                                         |                                                           |                                                                                                                         | Total current assets                                            | 1,130                                                                              |                                        |         1,043 |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| Property, plant and equipment,net                       | 995                                                       |                                                                                                                         |         1,052                |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| Goodwill, net                                           | 736                                                       |                                                                                                                         |           742 |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| Trademarks and other intangibleassets, net              | 602                                                       |                                                                                                                         |           633 |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| Other assets, net                                       | 309                                                       |                                                                                                                         |           364 |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| Total assets                                            | $      3,772                     |                                                                                                                         | $      3,834                           |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| **Liabilities and Stockholders'Equity**                 |                                                           |                                                                                                                         |                                                                 |
| Current liabilities                                     |                                                           |                                                                                                                         |                                                                 |
|                                                         | Notes and loans payable                                   |            $         170 |                                                                 |   $        289                        |
|                                                         | Current maturities of long-termdebt                       | 3                                                                                                                       |                                                                 |           2                      |
|                                                         | Accounts payable                                          | 287                                                                                                                     |                                                                 |           310                    |
|                                                         | Accrued liabilities                                       | 617                                                                                                                     |                                                                 |           643                    |
|                                                         | Income taxes payable                                      | 18                                                                                                                      |                                                                 |              24   |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
|                                                         |                                                           |                                                                                                                         | Total current liabilities                                       | 1,095                                                                              |                                        |         1,268 |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| Long-term debt                                          | 474                                                       |                                                                                                                         |           475 |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| Other liabilities                                       | 385                                                       |                                                                                                                         |           377 |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| Deferred income taxes                                   | 174                                                       |                                                                                                                         |           174 |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| Stockholders' equity                                    |                                                           |                                                                                                                         |                                                                 |
|                                                         | Common stock                                              | 250                                                                                                                     |                                                                 |           250                    |
|                                                         | Additional paid-incapital                                 | 304                                                                                                                     |                                                                 |           301                    |
|                                                         | Retained earnings                                         | 2,906                                                                                                                   |                                                                 |         2,846                                   |
|                                                         | Treasury shares, atcost, 36,450,924 and 36,838,394 shares |                                                                                                                         |                                                                 |                                                                                    |
|                                                         |                                                           | at September 30, 2004, and June 30,2004, respectively                                                                   |        (1,552)                    |                                                                                    |       (1,570) |
|                                                         | Accumulated other comprehensive netlosses                 |          (252)                                                             |                                                                 |          (274)                        |
|                                                         | Unearned compensation                                     |            (12)                                                  |                                                                 |              (13) |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
|                                                         |                                                           |                                                                                                                         | Stockholders' equity                                            |         1,644                                   |                                        |         1,540 |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| Total liabilities and stockholders'equity               | $      3,772                     |                                                                                                                         | $      3,834                           |
|                                                         |                                                           |                                                                                                                         |                                                                 |                                                                                    |                                        |                                                  |
| See Notes to Condensed ConsolidatedFinancial Statements |                                                           |                                                                                                                         |                                                                 |

----

PART I- FINANCIAL INFORMATION (Continued)

Item1.  Financial Statements (Unaudited)

TheClorox Company

Condensed Consolidated Statements of CashFlows

(Inmillions)

|                                                             |                                                                          |                                                                                             |                                                                      |                                                                                 | Three MonthsEnded                                                                     |
|-------------------------------------------------------------|--------------------------------------------------------------------------|---------------------------------------------------------------------------------------------|----------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|                                                             |                                                                          |                                                                                             |                                                                      |                                                                                 |                                                                                       |
|                                                             |                                                                          |                                                                                             |                                                                      |                                                                                 | 9/30/2004                                                                             |  | 9/30/2003 |
| Operations:                                                 |                                                                          |                                                                                             |                                                                      |
|                                                             | Net earnings                                                             |  $        123                                       |                                                                      | $        129                                 |
|                                                             | Adjustments to reconcile netearnings to net cash provided by operations: |                                                                                             |                                                                      |                                                                                 |
|                                                             |                                                                          | Depreciation andamortization                                                                |            47 |                                                                                 |           47                        |
|                                                             |                                                                          | Deferred income taxes                                                                       |          -         |                                                                                 |               2 |
|                                                             |                                                                          | Restructuring and assetimpairment                                                           | 30                                                                   |                                                                                 |               - |
|                                                             |                                                                          | Other                                                                                       |                                                                      |           7                   |                                                                                       |         6   |
|                                                             |                                                                          | Cash effects of changesin:                                                                  |                                                                      |                                                                                 |                                                                                       |
|                                                             |                                                                          |                                                                                             | Receivables, net                                                     |           74                  |                                                                                       |           86 |
|                                                             |                                                                          |                                                                                             | Inventories                                                          |         (8)                             |                                                                                       |               (9)   |
|                                                             |                                                                          |                                                                                             | Other current assets                                                 |            5             |                                                                                       |             2 |
|                                                             |                                                                          |                                                                                             | Accounts payable and accruedliabilities                              |         (67)                                 |                                                                                       |         (80) |
|                                                             |                                                                          |                                                                                             | Income taxes payable                                                 |         5                                    |                                                                                       |            (6) |
|                                                             |                                                                          |                                                                                             | Pension contribution to qualifiedplans                               |         -                               |                                                                                       |             (37)     |
|                                                             |                                                                          |                                                                                             |                                                                      |                                                                                 |                                                                                       |  |
|                                                             |                                                                          |                                                                                             | Net cash provided byoperations                                       |          216                       |                                                                                       | 140 |
|                                                             |                                                                          |                                                                                             |                                                                      |
| Investing Activities:                                       |                                                                          |                                                                                             |                                                                      |
|                                                             | Capital expenditures                                                     |         (27)                                        |                                                                      |          (39)                      |
|                                                             | Low income housingcontributions                                          |         (9)                                         |                                                                      |          (10)                      |
|                                                             | Other                                                                    |                                                                                             |                                                                      |            1             |                                                                                       |           1 |
|                                                             |                                                                          |                                                                                             |                                                                      |                                                                                 |                                                                                       |  |
|                                                             |                                                                          |                                                                                             | Net cash used for investingactivities                                |         (35)                                 |                                                                                       |         (48) |
|                                                             |                                                                          |                                                                                             |                                                                      |
| Financing Activities:                                       |                                                                          |                                                                                             |                                                                      |
|                                                             | Notes and loans payable,net                                              |         (119)                                            |                                                                      |         292                             |
|                                                             | Long-term debt borrowings                                                |              -   |                                                                      |              7 |
|                                                             | Long-term debt repayments                                                |       -                                                            |                                                                      |           (207)               |
|                                                             | Cash dividends paid                                                      |         (58)                                             |                                                                      |          (58)                      |
|                                                             | Treasury stock purchased                                                 |   -                                                                               |                                                                      |         (147)                                |
|                                                             | Proceeds from settlement of interestrate swaps                           | -                                                                                           |                                                                      | 23                                                                              |
|                                                             | Issuance of common stock foremployee stock plans, and other              |          18                                    |                                                                      |             13      |
|                                                             |                                                                          |                                                                                             |                                                                      |                                                                                 |                                                                                       |  |  |
|                                                             |                                                                          |                                                                                             | Net cash used for financingactivities                                |         (159)                                |                                                                                       |         (77) |
|                                                             |                                                                          |                                                                                             |                                                                      |                                                                                 |                                                                                       |  |
|                                                             |                                                                          |                                                                                             |                                                                      |                                                                                 |                                                                                       |  |  |
| Effect of exchange rate changes oncash and cash equivalents |           1            |                                                                                             |           -        |
|                                                             |                                                                          |                                                                                             |                                                                      |
| Net increase in cash and cashequivalents                    |          23                 |                                                                                             |            15 |
| Cash and cashequivalents:                                   |                                                                          |                                                                                             |                                                                      |
|                                                             | Beginning of period                                                      |          232                                   |                                                                      |           172                 |
|                                                             |                                                                          |                                                                                             |                                                                      |                                                                                 |                                                                                       |  |  |
|                                                             | End of period                                                            |  $       255                                             |                                                                      |  $        187                           |
|                                                             |                                                                          |                                                                                             |                                                                      |                                                                                 |                                                                                       |  |  |
|                                                             |
| See Notes to Condensed ConsolidatedFinancial Statements.    |

----

PART I- FINANCIAL INFORMATION (Continued)

Item1.  Financial Statements (Unaudited)

TheClorox Company

Notes to Condensed Consolidated FinancialStatements

(Inmillions, except share and per-share amounts)

1)   InterimFinancial Statements

**Basis ofPresentation**

      The unaudited interimcondensed consolidated financial statements for the three-monthperiods ended September 30, 2004 and 2003, in the opinion ofmanagement, reflect all adjustments (consisting of normal recurringaccruals) necessary for a fair presentation of the consolidatedresults of operations, financial position and cash flows of TheClorox Company and its subsidiaries (the "Company”) for theperiods presented.  Certain reclassifications were madein the prior periods’ condensed consolidated financialstatements to conform to the current periods’presentation.  The results for the interim period endedSeptember 30, 2004 are not necessarily indicative of the resultsthat may be expected for the fiscal year ending June 30, 2005 orfor any future period. 
The condensedconsolidated statements of earnings reflect the results of theCompany’s business in Brazil as a discontinued operation. TheBrazil business had no net sales during the three-month periodsended September 30, 2004 and 2003.

Certain informationand footnote disclosures normally included in financial statementsprepared in accordance with accounting principles generallyaccepted in the United States of America (“U.S. GAAP”)have been omitted or condensed pursuant to the rules andregulations of the Securities and Exchange Commission (the“SEC”).  The information in this report should beread in conjunction with the Company’s Annual Report on Form10-K filed with the SEC for the fiscal year ended June 30, 2004,which includes a complete set of footnote disclosures, includingthe Company’s significant accounting policies.

**Use ofEstimates**

The preparation ofcondensed consolidated financial statements in conformity with U.S.GAAP requires management to make estimates and assumptions thataffect reported amounts and related disclosures.  Actualresults could differ materially from estimates and assumptionsmade.

2)   ShareExchange Agreement

In October 2004, the Company reacheda definitive agreement with a major shareholder, Henkel KGaA(“Henkel”), under which it will exchange its ownershipinterest in a subsidiary for Henkel’s interest in Cloroxcommon stock.The exchange isexpected to qualify as a tax-free exchange under Section 355 of theInternal Revenue Code andisexpected to close no later than December 1, 2004, subject tocustomary closing conditions and regulatory approvals.

As of September 30, 2004,Henkel’s shares represent approximately 29 percent of theoutstanding shares of the Company. The subsidiary to be exchangedwill contain the existing insecticides business, which includesCombat, Home Mat and Home Keeper branded products; the Soft Scrubcleanser business; the 20 percentinterest in Henkel Iberica, S.A. (“Henkel Iberica”), ajoint venture with Henkel; and approximately $2,100 in cash. The Company and Henkel have agreed to an aggregate value of $745for the businesses and the Henkel Iberica joint venture beingtransferred. For the three-month periods ended September 30, 2004and 2003, the businesses being exchanged had net sales of $42 forboth periods, and net income of $17 and $18,respectively.

As part of the agreement, certaintransitional services will be provided to Henkel, including someinterim production of insecticides and Soft Scrub. Other than theinterim services being provided, the Company will no longer have anongoing relationship with Henkel, and Henkel’s right torepresentation on the Company’s board of directors willend.

PART I - FINANCIALINFORMATION (Continued)

Item 1. Financial Statements (Unaudited)

The CloroxCompany

Notes to CondensedConsolidated Financial Statements

(In millions, exceptshare and per-share amounts)

2)   Share ExchangeAgreement (Continued)

The Company has separatelyclassified the assets to be exchanged under the terms of thedefinitive agreement as current assets in the condensedconsolidated balance sheet as follows:

9/30/2004

Current assets, net of currentliabilities of $6

$12

Property, plant and equipment,net

7

Goodwill, net

15

Trademarks and other intangibleassets, net

32

Equity investment in HenkelIberica

62

Other

4

Assets held for exchange

$132

3)  Restructuring and Asset Impairment

Restructuring andasset impairment charges were $30 for the three-month period endedSeptember 30, 2004, and related primarily to the Glad Supply Chainrestructuring.  Changes in the Company’s accruedrestructuring liability, substantially all of which is classifiedas a component of accrued liabilities in the condensed consolidatedbalance sheets, were as follows:

Three MonthsEnded

9/30/2004

9/30/2003

Accrued restructuring at beginningof the period

$3

$6

Restructuring expenses recognized,net

1

(1)

Payments

(1)           

  (1)

Accrued restructuring at end ofperiod

$3

$4

In July 2004, the board of directorsapproved a restructuring plan involving the Glad business, adivision of the Household Products-North America operatingsegment.  This restructuring plan includes closing amanufacturing facility and assigning remaining production betweenGlad’s North American plants and third-party suppliers duringfiscal year 2005.  The Company recorded restructuring chargesof approximately $28 during the first quarter of fiscal year 2005in conjunction with this initiative, including asset impairmentcharges of $27, and employee severance charges of $1. In addition,the Company recorded $2 of asset impairment charges during thefirst quarter of fiscal year 2005 related to certain manufacturingoperations in the International operating segment.

PART I - FINANCIALINFORMATION (Continued)

Item 1. Financial Statements (Unaudited)

The CloroxCompany

Notes to CondensedConsolidated Financial Statements

(In millions, exceptshare and per-share amounts)

4)   FinancialInstruments

                       

The Company utilizesderivative instruments, principally swaps, forwards and options tomanage the ongoing business risks associated with fluctuations ininterest rates, foreign currencies and commodity prices. These contracts are economic hedges for transactions that havenotional balances, and periods consistent with the relatedexposures and do not constitute investments independent of theseexposures.

  At September30, 2004, and June 30, 2004, the Company’s derivativefinancial instruments are recorded at fair value in the condensedconsolidated balance sheets as assets (liabilities) asfollows:

9/30/2004

6/30/2004

Current Assets

Foreign exchangecontracts

          -

          1

Other Assets

Commodity purchasecontracts

         6

          3

Current Liabilities

Commodity purchasecontracts

          (3)

            -

Foreign exchangecontracts

          (1)

           -

The estimated notional and fairvalue amounts of the Company’s derivative instruments aresummarized below:

9/30/2004

6/30/2004

Notional

Fair Value

Notional

Fair Value

Foreign exchangecontracts

         $32

          ($1)

        $36

$1

Commodity purchasecontracts

43

3

43

3

Commodity optioncontracts

1

-

2

        -

Exposure to counterparty credit riskis considered low because these agreements have been entered intowith major institutions with strong credit ratings who are expectedto fully perform under the terms of the agreements.

PART I - FINANCIALINFORMATION (Continued)

Item 1. Financial Statements (Unaudited)

The CloroxCompany

Notes to CondensedConsolidated Financial Statements

(In millions, exceptshare and per-share amounts)

5)  Inventories

     Inventories at September 30, 2004 and June 30, 2004 consistedof:

9/30/2004

6/30/2004

Finished goods

$244

$243

Work in process

4

          3

Raw materials andpackaging

73

        68

LIFO allowances

     (11)

         (9)

Allowance forobsolescence

(5)

     (4)

Total

$305

$301

6)   OtherAssets

Other assets at September 30, 2004and June 30, 2004 consisted of:

9/30/2004

6/30/2004

Equity investments

          

       

Henkel Iberica

$   -

$  62

Other entities

46

45

Investment in low income housingpartnerships

57

         51

Derivative contracts

6

          3

Other investments

39

39

Prepaid benefit costs

117

119

Non-qualified retirement planassets

20

         21

Other

24

         24

Total

$309

$364

Equity Investments

The Company holds various equityinvestments in a number of consumer products businesses, most ofwhich operate outside the United States. The most significant ofthese investments is a 20 percent joint venture interest in HenkelIberica, a subsidiary of Henkel, which is a related party of theCompany. Under the terms of the share exchange agreement reachedwith Henkel (Note 2), the Company has classified the equityinvestment in Henkel Iberica as assets held for exchange in thecondensed consolidated balance sheet as of September 30,2004.

PART I - FINANCIALINFORMATION (Continued)

Item 1. Financial Statements (Unaudited)

The CloroxCompany

Notes to CondensedConsolidated Financial Statements

(Inmillions, except share and per-share amounts)

7)   NetEarnings per Common Share (“EPS”)

Net earnings percommon share is computed by dividing net earnings by the weightedaverage number of common shares outstanding each period on anunrounded basis.  Diluted EPS reflects the earnings dilutionthat would occur from common shares that may be issued throughstock options, restricted stock and performance units.  Theweighted average number of common shares outstanding (denominator)used to calculate both basic and diluted EPS was as follows(inthousands):

Weighted AverageNumber of Common Shares Outstanding

Three MonthsEnded

9/30/2004

9/30/2003

Basic

212,905

212,654

Stock options and other

2,212

2,153

Diluted

215,117

214,807

Stock options to purchase 753,220and 1,566,754 shares of common stock for the three-month periodsended September 30, 2004 and 2003, respectively, were not includedin the computation of diluted EPS because the exercise price of thestock options was greater than the average market price of theCompany’s common shares.

8)  Comprehensive Income

Comprehensive incomeincludes net earnings, foreign currency translation adjustments andnet changes in the valuation of cash flow hedges that are excludedfrom net earnings but included as a separate component ofstockholders' equity.  Comprehensive income was asfollows:

     

Three MonthsEnded

9/30/2004

9/30/2003

Net earnings

$123

$129

Other comprehensive gains (losses),net of tax

Foreign currency translationadjustments

23

(3)

Net derivative loss

          (2)

           (1)

Total comprehensiveincome

$144

$125

PART I - FINANCIALINFORMATION (Continued)

Item 1. Financial Statements (Unaudited)

The CloroxCompany

Notes to CondensedConsolidated Financial Statements

(In millions, exceptshare and per-share amounts)

9)  Goodwill, Trademarks and Other Intangible Assets

In accordancewithStatement of FinancialAccounting Standards (“SFAS”)No. 142, “Goodwill and Other IntangibleAssets,” the Company’s policy is to separatelyidentify, value, and determine the useful lives for all intangibleassets acquired. Assets with definite lives are amortized over suchperiods, while those with indefinite lives are not amortized, buttested for impairment. The annual impairment tests are performed inthe third quarter of each fiscal year unless events suggest animpairment may have occurred in the interim. No goodwill impairmentcharges were recorded for the quarter ended September 30,2004.

Changes in thecarrying amount of goodwill for the three-month period endedSeptember 30, 2004, by operating segment, are asfollows:

Net Balance

Reclassification toAssets Held

Translation

Net Balance

6/30/2004

forExchange

Adjustments

9/30/2004

Household Products - NorthAmerica

$123

                  $   -

$3

$126

Specialty Products

381

(15)

-

366

International

169

6

175

Corporate, Interest andOther

69

-

69

Total Company

$742

($15)

$9

$736

Changes in trademarksand other intangible assets at September 30, 2004 are summarizedbelow. Trademarks and other intangible assets subject toamortization are net of accumulated amortization of $155 and $152at September 30, 2004 and June 30, 2004, respectively. Estimated amortization expense for these intangible assets is $11for each of the fiscal years 2006 through2010.

Net balance

Reclassification toAssets Held

Translation

Net balance

6/30/2004

forExchange

Adjustments

Amortization

9/30/2004

Trademarks and otherintangible

assets subject toamortization

Technology

$97

-

-

($3)

$94

Other

21

-

-

-

21

Sub-total

118

-

-

(3)

115

Trademarks not subject toamortization

515

(32)

4

-

487

Total

$633

($32)

$4

($3)

$602

PART I - FINANCIALINFORMATION (Continued)

Item 1. Financial Statements (Unaudited)

The CloroxCompany

Notes to CondensedConsolidated Financial Statements

(In millions, exceptshare and per-share amounts)

10)  Stock OptionPlans

The Company’s stock optionplans provide for the granting of stock options to officers, keyemployees and directors.  The Company accounts for stock-basedcompensation using the intrinsic value method prescribed inAccounting Principles Board Opinion No. 25, whereby stock optionsare granted at market price and no compensation cost isrecognized.  If compensation expense for the Company’svarious stock option plans had been determined based upon fairvalues at the grant dates for awards under those plans inaccordance with SFAS No. 123, “Accounting for Stock-BasedCompensation,” the Company’s pro forma net earnings,and basic and diluted EPS would have been as follows:

Three MonthsEnded

9/30/2004

9/30/2003

Net earnings - asreported

$123

$129

Fair value-based expense, net oftax

(5)

          (6)

Pro forma net earnings

$118

$123

Net earnings per commonshare

Basic

As reported

$0.58

$0.61

Pro forma

$0.55

$0.58

Diluted

As reported

$0.57

$0.60

Pro forma

$0.55

$0.57

PART I- FINANCIAL INFORMATION (Continued)

 Item 1.  Financial Statements (Unaudited)

TheClorox Company

Notes to Condensed Consolidated FinancialStatements

(Inmillions, except share and per-share amounts)

11)  RetirementIncome and Healthcare Benefit Plans

The following tablesummarizes the components of net periodic benefit cost for theCompany’s Retirement Income and Retirement Health Careplans:

Retirement IncomePlans

Three MonthsEnded

9/30/2004

9/30/2003

Components of net periodic benefitcost (income)

Service cost

$3

$3

Interest cost

        6

6

Expected return on planassets

       (7)

(7)

Amortization of unrecognizeditems

2

1

Total net periodic benefitcost

$4

$3

The Company does not anticipatemaking significant contributions to its retirement income plansduring the current fiscal year. 

Retirement HealthcarePlans

Three MonthsEnded

9/30/2004

9/30/2003

Components of net periodic benefitcost:

Interest cost

$1

$1

Total net periodic benefitcost

$1

$1

12)Guarantees

In conjunction withdivestitures and other transactions, the Company may provideroutine indemnifications relating to the enforceability oftrademarks, retention of pre-existing legal, tax, environmental andemployee liabilities, as well as provisions for product returns andother items.  The Company has several indemnificationagreements in effect through fiscal year 2006 that specify maximumpossible exposures.  The Company’s aggregate exposurefrom these agreements is $8.  In addition, the Company isparty to a $22 letter of credit issued to one of its insurancecarriers. Based on historical experience and evaluation of thespecific agreements, the Company does not believe that anysignificant payments related to its indemnifications and letter ofcredit will result and therefore has not recorded any associatedliabilities.  

PART I - FINANCIALINFORMATION (Continued)

Item 1. Financial Statements (Unaudited)

The CloroxCompany

Notes to CondensedConsolidated Financial Statements

(In millions, exceptshare and per-share amounts)

13) EnvironmentalContingencies

The Company is involved in certainenvironmental matters, including Superfund and other responseactions at various locations, and has a recorded liability of $29at both September 30, 2004 and June 30, 2004, for its share of therelated aggregate future remediation costs. One matter in DickinsonCounty, Michigan, accounts for a substantial majority of therecorded liability at both September 30, 2004 and June 30,2004.  The Company is subject to a cost-sharing arrangementwith one other party for this matter, under which it is liable for24.3 percent of the aggregate remediation and associated costs,other than legal fees.  In October 2004, the Company agreed toa consent judgment with the Michigan Department of EnvironmentalQuality (“MDEQ”), which sets forth certain remediationgoals and monitoring activities.  Based on the current statusof this matter, and with the assistance of environmentalconsultants, the Company maintains an undiscounted liabilityrepresenting its best estimate of its share of costs associatedwith the capital expenditures, maintenance and other costs to beincurred over an estimated 30-year remediation period. The mostsignificant components of the liability relate to the estimatedcosts associated with the remediation of groundwater contaminationand excess levels of subterranean methane deposits. Currently, theCompany cannot accurately predict the timing of the payments thatwill likely be made under this estimated obligation. In addition,the Company’s estimated loss exposure is sensitive to avariety of uncertain factors, including the efficacy of remediationefforts, changes in remediation requirements by the MDEQ and thetiming, varying costs and availability of alternative clean-uptechnologies that may become available in the future. Although itis possible that the Company’s exposure may exceed the amountrecorded, any amount of such additional exposures, or range ofexposures, is not estimable at this time.

     

14) Income TaxContingencies

In conjunction with its audit of theCompany’s tax returns, the IRS is auditing the tax returns ofthe investment fund, a partnership in which the Company is alimited partner. Based on its audit of the investment fund, the IRShas proposed certain adjustments to reattribute taxable incomegenerated by the partnership to the Company. The amount of taxpotentially resulting from these proposed adjustments, excludinginterest and possible penalties, is approximately $200. The Companystrongly disagrees with the proposed adjustments and filed apetition in the Federal Tax Court on June 10, 2004 contesting thoseadjustments. There were no significant developments related to thismatter during the quarter ended September 30, 2004, and the Companybelieves it has appropriately accrued for an unfavorable outcome ofthe dispute and does not currently anticipate that the outcome willhave a material effect on its effective tax rate or earnings.Settlement of this issue could require a material cash payment inthe period of resolution. Assuming the dispute resolution processfollows a normal course, final resolution of the matter and theimpact, if any, on the earnings and cash flows of the Company willprobably occur within 18 months.

PART I- FINANCIAL INFORMATION (Continued)

 Item 1.  Financial Statements (Unaudited)

TheClorox Company

Notes to Condensed Consolidated FinancialStatements

(Inmillions, except share and per-share amounts)

15) SegmentResults

Information regardingthe Company's operating segments is shown below. Each segment isindividually managed with separate operating results that arereviewed regularly by the chief operating decision makers. The operating segments include:

Household Products– North America:  Includes cleaning, bleach, waterfiltration products, and the food storage and disposal categoriesmarketed in the United States and all products marketed inCanada.

Specialty Products:Includes charcoal, the United States and European automotive carebusinesses, cat litter, insecticides, food products andprofessional products.

International,formerly known as Household Products – LatinAmerica/Other:  Includes operations outside the United Statesand Canada, excluding the European automotive carebusiness.

Corporate includescertain non-allocated administrative costs, amortization oftrademarks and other intangible assets, interest income, interestexpense, and other non-operating income and expense.

The table belowrepresents operating segment information. 

Earnings (Losses)from Continuing Operations

Net Sales

Before IncomeTaxes

Three MonthsEnded

Three MonthsEnded

9/30/2004

9/30/2003

9/30/2004

9/30/2003

Household Products - NorthAmerica

  $642

  $603

  $152

  $155

Specialty Products

314

318

109

108

International

134

127

29

30

Corporate

           -

           -

        (101)

         (92)

Total Company

$1,090

 $1,048

  $189

  $201

Net sales to the Company’slargest customer, Wal-Mart Stores, Inc. and its affiliates, were26% and 25% of consolidated net sales for the three-month periodsended September 30, 2004 and 2003, respectively. 

PART I- FINANCIAL INFORMATION (Continued)

Item 2.Management’s Discussion and Analysis of

Resultsof Operations and Financial Condition

TheClorox Company

(Inmillions, except share and per-share amounts)

Comparison of the three-month periods ended September 30,2004 and 2003

***Diluted netearnings per common share***decreased 5% to 57 cents for the quarter endedSeptember 30, 2004 as compared to the year ago quarter.  Thedecrease reflects $30 (pre-tax) of restructuring andasset-impairment charges and higher selling and administrativecosts, offset by higher net sales. 

***Netsales***increased by 4% to $1,090, due to a volume increase of 4%,which was driven by new products and higher shipments ofClorox**disinfecting wipes.

The *HouseholdProducts – North America* segment reported a net salesincrease of 6% and a volume increase of 8%. Volume growth in the segmentwas driven by strong shipments of Glad trash bags behindthe launch of the new Glad**Force Flex trash bags. Alsocontributing to volume growth were strong shipments ofCloro*x* disinfecting wipes and the new Clorox ToiletWanddisposable toilet-cleaning system. This growth was partially offsetby decreased shipments of the Clorox Ready Mop**moppingsystem. Sales growth trailed volume growth due to highertrade-promotionspending behind newproducts.

The *SpecialtyProducts* segment reported a net sales decrease of 1% and avolume decrease of 2%.The segment’s sales decline was driven by strongcompetition for auto-care products and lower shipments of Kingsfordcharcoal due to category softness. These items were partiallyoffset by increased shipments of cat litter. Sales declined at alower rate than volume growth due toprice increases.

The*International* segment, formerly known as Household Product– Latin America/Other, reported net sales and volumeincreases of 6%.  Volume improvements were primarily driven bynew products, category and share growth in Latin America, and thelaunch of Clorox laundry and home-cleaning products in Australiaand New Zealand.

***Cost of productssold***as apercentage of net sales decreased to 55.5% for the quarter endedSeptember 30, 2004 as compared to 56.4% for the quarter endedSeptember 30, 2003.  This decrease was driven primarily by theCompany's ongoingcost savings initiatives combined with lower costs for thethird-party production of some Match Light charcoal. Thesefactors were partially offset byincreased raw materials costs as well ashigher logistics costs. 

***Selling andadministrative expenses***increased by 8% to $132 driven primarily by highercosts primarily related to the amortization from theCompany’s information systems projects and higher salescommissions driven by sales increases. The Company completed theimplementation of its new enterprise resource planning and customerrelationship management systems in June 2004.

***Advertisingcosts***wereapproximately 10% of net sales for the three-month periods endedSeptember 30, 2004 and 2003.

***Restructuringand asset impairment costs***of $30 recognized in the quarter endedSeptember 30, 2004 related primarily to the supply chainrestructuring initiative for the Glad business (For a discussion ofthis initiative, refer to the section entitled “Restructuringand Asset Impairment” on page 18).

***Other (income)expense, net***was ($3) forthe quarter ended September 30, 2004 as compared to $3 for thequarter ended September 30, 2003. This increase was drivenprimarily by a favorable mark-to-market adjustment on one of theCompany’s commodity derivative contracts and other smalleritems.

***The effectivetax rate***on continuing operations was 35.0% and 35.3% for thequarters ended September 30, 2004 and 2003. The lower rate in thequarter ended September 30, 2004 as compared to the quarter endedSeptember 30, 2003 was due primarily to lower taxes on foreignactivities.

****

PART I- FINANCIAL INFORMATION (Continued)

Item 2.Management’s Discussion and Analysis of

Resultsof Operations and Financial Condition

TheClorox Company

(Inmillions, except share and per-share amounts)

FinancialCondition, Liquidity and Capital Resources

The Company’s financialposition and liquidity continue to be strong as of September 30,2004. Net cash provided by operations was $216 for the quarterended September 30, 2004, up from $140 in the year-ago quarter.This increase in operating cash flows was driven by continuedstrong net earnings (which included $30 of restructuring and assetimpairment costs), a $37 discretionary pension contribution madeduring the quarter ended September 30, 2003, and other workingcapital changes.

***WorkingCapital***

The Company’s balance ofworking capital, defined in this context as total current assetsnet of total current liabilities, increased from June 30, 2004 toSeptember 30, 2004 principally due to decreases in short-termborrowing and other current liability balances and theclassification of assets held for exchange, offset by a decrease inreceivables.

The $118 decrease in short-termborrowings was due primarily to the payoff of commercial paperbalances enabled by strong earnings and cash flows.  The $55decrease in payable and accrued liability balances was driven by$43 of profit sharing and incentive compensationpayments.

The Company hasseparately classified assets to be exchanged of $132 under theterms of the definitive agreement described below.

The $75 decrease in receivablebalances was due primarily to the seasonality of sales andcollections in the Charcoal, Food and Insecticide categories, whichdrove a $90 decrease in those categories. This decrease waspartially offset by a $19 increase in receivable balances in theHousehold Products- North America segment, which was driven byhigher sales.

***Share ExchangeAgreement***

In October 2004, the Company reacheda definitive agreement with a major shareholder, Henkel KgaA(“Henkel”), under which it will exchange its ownershipinterest in a subsidiary for Henkel’s interest in Cloroxcommon stock.The exchange isexpected to qualify as a tax-free exchange under Section 355 of theInternal Revenue Code andisexpected to close no later than December 1, 2004, subject tocustomary closing conditions and regulatory approvals.

As of September 30, 2004,Henkel’s shares represent approximately 29 percent of theoutstanding shares of the Company. The subsidiary to be exchangedwill contain the existing insecticides business, which includesCombat, Home Mat and Home Keeper branded products; the Soft Scrubcleanser business; the 20 percentinterest in Henkel Iberica, S.A. (“Henkel Iberica”), ajoint venture with Henkel; and approximately $2,100 in cash. The Company and Henkel have agreed to an aggregate value of $745for the businesses and the Henkel Iberica joint venture beingtransferred. For the three-month periods ended September 30, 2004and 2003, the businesses being exchanged had net sales of $42 forboth periods, and net income of $17 and $18, respectively. Uponclosing the transaction, theCompany anticipates recognizing a gain on the transfer ofthe businesses and the investment in Henkel Iberica in the range of$3.00 to $3.15 per diluted share and anticipates its fiscal year2005 annual effective tax rate to range from 19% to 21%.

As part of the agreement, certaintransitional services will be provided to Henkel, including someinterim production of insecticides and Soft Scrub. Other than theinterim services being provided, the Company will no longer have anongoing relationship with Henkel, and Henkel’s right torepresentation on the Company’s board of directors will end.The Company intends to use a combination of existing cash and theissuance of commercial paper to initially fund the cash that willbe included in the subsidiary at closing.  Subsequent toclosing, the Company intends to issue approximately $1,500 to$1,700 in long-term debt to reduce outstanding commercial paperbalances.
**
PART I- FINANCIAL INFORMATION (Continued)

Item 2.Management’s Discussion and Analysis of

Resultsof Operations and Financial Condition

TheClorox Company

(Inmillions, except share and per-share amounts)

FinancialCondition, Liquidity and Capital Resources

***Restructuring and AssetImpairment***

In July 2004, the board ofdirectors approved a restructuring plan involving the Gladbusiness, a division of the Household Products-North Americaoperating segment.  This restructuring plan includes closing amanufacturing facility and assigning remaining production betweenGlad’s North American plants and third-party suppliers duringfiscal year 2005.  The Company recorded restructuring chargesof approximately $28 during the first quarter of fiscal year 2005in conjunction with this initiative, including asset impairmentcharges of $27, and employee severance charges of $1.  Inaddition, the Company recorded $2 of asset impairment chargesduring the first quarter of fiscal year 2005 related to certainmanufacturing operations in the international operatingsegment.

******

***ShareRepurchases***

The Company has two share repurchaseprograms, consisting of an open-market program and a program tooffset the impact of share dilution related to the exercise ofstock options (“evergreen program”).

There were no sharerepurchases during the three-month period ended September 30, 2004.During the three-month period ended September 30, 2003, the Companyacquired 3.3 million shares of its common stock at a total cost of$147. These repurchases relate to $1,700 board-authorizedopen-market program. The total number of shares repurchased as ofSeptember 30, 2004 under the open-market program is 22 million at acost of $932, leaving $768 of authorized repurchases remainingunder that program.

******

***CapitalExpenditures***

Capital expenditures were $27 and$39 for the three-month periods ended September 30, 2004 and 2003,respectively.   This decrease wasprincipally due to the completion of the implementation of theCompany’s enterprise resource planning and customerrelationship management data processing systems during last fiscalyear. During the three-month period ended September 30, 2003, thecapital expenditures related to these new systems were$14. 

 

PART I- FINANCIAL INFORMATION (Continued)

Item 2.Management’s Discussion and Analysis of

Resultsof Operations and Financial Condition

TheClorox Company

(Inmillions, except share and per-share amounts)

FinancialCondition, Liquidity and Capital Resources

***CreditArrangements***

During the three months endedSeptember 30, 2004 and 2003, cash flow from continuing operationsexceeded cash requirements to fund capital expenditures, dividendsand scheduled debt service.  The Company believes that cashflow from operations, supplemented by financing expected to beavailable from external sources, will provide sufficient liquidityduring the next twelve months. 

The Company intends to use acombination of existing cash and the issuance of commercial paperto initially fund the approximate $2,100 of cash that will beincluded in the share exchange with Henkel, and intends to issueapproximately $1,500 to $1,700 in long-term debt to reduceoutstanding commercial paper balances subsequent toclosing.

At September 30, 2004, the Companyhad two domestic credit agreements with available credit linestotaling $950, including a $600 facility expiring June 2005 and a$350 facility expiring March 2007.  At September 30, 2004 andJune 30, 2004, there were no borrowings under these agreements,which are available for general corporate purposes and to supportadditional commercial paper issuance.

In addition, the Company had $12 offoreign working capital credit lines and overdraft facilities atSeptember 30, 2004, of which $6 is available for borrowing. The Company is in compliance with all restrictive covenants andlimitations as of September 30, 2004. The Company does notanticipate any problems in securing future creditagreements.

***Income TaxContingencies***

In conjunction with its audit of theCompany’s tax returns, the IRS is auditing the tax returns ofthe investment fund, a partnership in which the Company is alimited partner. Based on its audit of the investment fund, the IRShas proposed certain adjustments to reattribute taxable incomegenerated by the partnership to the Company. The amount of taxpotentially resulting from these proposed adjustments, excludinginterest and possible penalties, is approximately $200. The Companystrongly disagrees with the proposed adjustments and filed apetition in the Federal Tax Court on June 10, 2004 contesting thoseadjustments. There were no significant developments related to thismatter during the quarter ended September 30, 2004, and the Companybelieves it has appropriately accrued for an unfavorable outcome ofthe dispute and does not currently anticipate that the outcome willhave a material effect on its effective tax rate or earnings.Settlement of this issue could require a material cash payment inthe period of resolution. Assuming the dispute resolution processfollows a normal course, final resolution of the matter and theimpact, if any, on the earnings and cash flows of the Company willprobably occur within 18 months.
******
PART I- FINANCIAL INFORMATION (Continued)

Item 2.Management’s Discussion and Analysis of

Resultsof Operations and Financial Condition

TheClorox Company

(Inmillions, except share and per-share amounts)

FinancialCondition, Liquidity and Capital Resources

***EnvironmentalContingencies***

The Company is involved in certainenvironmental matters, including Superfund and other responseactions at various locations, and has a recorded liabilityof $29 at both September 30, 2004 andJune 30, 2004 for its share of therelated aggregate future remediation costs. One matter in theDickinson County, Michigan, accounts for a substantial majority ofthe recorded liability at both September 30, 2004 and June 30,2004.  The Company is subject to a cost-sharing arrangementwith one other party for this matter, under which it is liable for24.3 percent of the aggregate remediation and associated costs,other than legal fees. In October 2004, the Company agreed to aconsent judgment with the Michigan Department of EnvironmentalQuality (“MDEQ”), which sets forth certain remediationgoals and monitoring activities.  Based on the current statusof this matter, and with the assistance of environmentalconsultants, the Company maintains an undiscounted liabilityrepresenting its best estimate of its share of costs associatedwith the capital expenditures, maintenance and other costs to beincurred over an estimated 30-year remediation period. The mostsignificant components of the liability relate to the estimatedcosts associated with the remediation of groundwater contaminationand excess levels of subterranean methane deposits. Currently, theCompany cannot accurately predict the timing of the payments thatwill likely be made under this estimated obligation. In addition,the Company’s estimated loss exposure is sensitive to avariety of uncertain factors, including the efficacy of remediationefforts, changes in remediation requirements by the MDEQ and thetiming, varying costs and availability of alternative clean-uptechnologies that may become available in the future. Although itis possible that the Company’s exposure may exceed the amountrecorded, any amount of such additional exposures, or range ofexposures, is not estimable at this time.

Cautionary Statement

Except for historicalinformation, matters discussed above and in the financialstatements and footnotes, including statements about future volume,sales, costs, cost savings, earnings plans, objectives,expectations, growth or profitability, areforward-looking statements based on management’s estimates, assumptionsand projections.  Wordssuch as “expects,” “anticipates,”“targets,” “goals,” “projects,”“intends,” “plans,” “believes,”“seeks,” “estimates,” variations on suchwords, and similar expressions are intended to identify suchforward-looking statements.  These forward-lookingstatements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed aboveand in the financial statements andfootnotes. Important factors that could affect performanceand cause results to differ materially from management’s expectationsare described in the section entitled“Forward-Looking Statements and Risk Factors” and “Management’s Discussion andAnalysis of Financial Condition and Results ofOperations” in the Company’sAnnual Report on Form 10-K for the fiscal year ended June 30, 2004,as updated from time to time in the Company’s SEC filings. Thosefactors include, but are not limited to,general economic and marketplace conditions and events; competitors’actions; the Company’s costs,including changes in exposure to commodity costs; the Company’s actual costperformance; risks inherent in litigation andinternational operations; the effect on cash flow of tax payments and share repurchases; thesuccess of new products; the integration of acquisitions and mergers; the divestiture ofnon-strategic businesses;and environmental, regulatory andintellectual property matters.  In addition, the Company’s future performance issubject to risks particular to the share exchange transaction withHenkel, including the sustainability of cash flows and the actuallevel of debt costs.  Rating agency decisions and otherexternal factors could increase interest costs.  Declines incash flow, which reduce the Company’s ability to repay debt,or interest cost increases greater than management expects, couldadversely affect the Company’searnings. 

The aboveforward-looking statements speak only as of the date this documentis filed with the SEC and the Company assumes no duty to updatesuch statements to reflect information obtained or changesoccurring after the date it is filed.

PART I- FINANCIAL INFORMATION (Continued)

Item 3.Quantitative and Qualitative Disclosure About MarketRisk

TheClorox Company

(Inmillions, except share and per-share amounts)

There have not beenany material changes to the Company’s market risk during thethree-month period ended September 30, 2004.  For additionalinformation, refer to the Company’s Annual Report on Form10-K for the fiscal year ended June 30, 2004.

Item 4.Controls and Procedures

The Company maintains disclosurecontrols and procedures designed to ensure that informationrequired to be disclosed in reports filed under the SecuritiesExchange Act of 1934, as amended, is recorded, processed,summarized and reported within the specified time periods. The chief executive officer and chief financial officer of theCompany, with the participation of the Company's management, haveevaluated the effectiveness of the Company's disclosure controlsand procedures as of September 30, 2004 and, based on thatevaluation, which disclosed no significant deficiencies or materialweaknesses, have concluded that such disclosure controls andprocedures are effective.  During the first quarter of fiscalyear 2005, there have not been any significant changes in theCompany's internal controls over financial reporting or in otherfactors that could significantly affect internal controls overfinancial reporting. 

PART II – OTHERINFORMATION

Item 2. Changes inSecurities, Use of Proceeds and Issuer Purchases of EquitySecurities

The CloroxCompany

Issuer Purchases of EquitySecurities

The following table sets out thepurchases of the Company’s securities by the Company and anyAffiliated Purchasers within the meaning of Rule 10b-18(a)(3) (17CFR 240.10b-18(a)(3)) during the period of this report.

[a]

[b]

[c]

[d]

Period

Total Number of Shares (or Units)Purchased (1)(2)

Average Price Paid per Share (orUnit)

Total Number of Shares (or Units)Purchased as Part of Publicly Announced Plans orPrograms

Maximum Number (or ApproximateDollar Value) that May Yet Be Purchased Under the Plans orPrograms(3)

July 1 to July 31, 2004

3,740

$53.75

None

$767,723,099

August 1 to August 31,2004

2,100

$52.33

None

$767,723,099

Sept. 1 to Sept. 30, 2004

11,317

$53.17

None

$767,723,099

(1)        The sharesrepurchased relate entirely to the surrender to the Company of17,157 shares of common stock to satisfy tax withholdingobligations in connection with the vesting of restricted stockgranted to employees.  There were no surrenders to the Companyof already owned shares of common stock to pay the exercise priceor to satisfy tax withholding obligations in connection with theexercise of employee stock options.

(2)        Forinformation on a share exchange agreement, executed as of October6, 2004, which provides for the Company to acquire the shares ofcommon stock held by its major shareholder, Henkel KGaA,refer to the information set forthunder the caption "Management's Discussion and Analysis," on page17 hereto.

(3)        The board ofdirectors approved a $500,000,000 share repurchase program onAugust 7, 2001, all of which has been utilized; a $500,000,000share repurchase program on July 17, 2002, of which $67,723,099remains available for repurchases; and a $700,000,000 sharerepurchase program on July 16, 2003, of which all remains availablefor repurchases.  On September 1, 1999, the Company alsoannounced a share repurchase program to offset the potential impactof stock option dilution.  The program initiated in 1999 hasno specified cap and therefore is not included in column [d]above.  None of these programs has a specified terminationdate.  The Company suspended share repurchases under the July2002 and July 2003 programs in December 2003 after Henkel KGaAannounced that it might sell its shares in the Company.

PART II – OTHERINFORMATION

Item6.  Exhibits and Reports on Form 8-K

TheClorox Company

(a) Exhibits

(10-1)    Share Exchange Agreement dated as of October6, 2004 by and among the Company, Henkel KGaA and HC Investments,Inc.

(10-2)    The Company’s 1993Directors' Stock Option Plan as amended and restated September 15,2004

(10-3)    Form of Option Award under theCompany’s 1993 Directors' Stock Option Plan as amended andrestated September 15, 2004

(10-4)    TheCompany’s 1996 Stock Incentive Plan as amended and restatedSeptember 15, 2004

(10-5)    Form of Option Award under theCompany’s 1996 Stock Incentive Plan as amended and restatedSeptember 15, 2004

(10-6)    Form of Performance Unit Awardunder the Company’s 1996 Stock Incentive Plan as amended andrestated September 15, 2004

(10-7)    Form of Award under theCompany’s Executive Incentive Compensation Plan, adopted in1996, re-adopted in 2001, and amended and restated as of July 20,2004

(12)    Computation of the Ratio of Earnings to FixedCharges

(31-1)   Certification by the Chief Executive Officer of the CompanyPursuant to Section 302 of the Sarbanes-Oxley Act of2002

(31-2)   Certification by the Chief Financial Officer of the CompanyPursuant to Section 302 of the Sarbanes-Oxley Act of2002

(32)      Certification by the Chief ExecutiveOfficer and Chief Financial Officer of the Company Pursuant toSection 906 of the Sarbanes-Oxley Act of 2002

(b)  Reports on Form 8-K

The Company filed acurrent report on Form 8-K containing information pursuant to Item12 ("Results of Operations and Financial Condition") on August 5,2004, relating to the issuance of an earnings release for thequarter ended June 30, 2004, and a current report on Form 8-Kcontaining information pursuant to Item 1.01 (“Entry into aMaterial Definitive Agreement”) on September 21, 2004,relating to certain amendments to The Clorox Company 1993Directors’ Stock Option Plan and The Clorox Company 1996Stock Incentive Plan.  The amended and restated plansdescribed in the latter filing are attached hereto as Exhibits 10-2and 10-4.

S IG N A T U R E

Pursuant to therequirements of the Securities Exchange Act of 1934, the registranthas duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.

                                                                             THE CLOROX COMPANY

                                                                             (Registrant)

     

DATE:  November4,2004                                                          BY   /s/ Thomas D. Johnson

                                                                                        Thomas D. Johnson

                                                                                         Vice-President –Controller