CLOROX CO /DE/ (CLX, NYSE)
Annual report, fiscal year 2020






## IT HAS BEEN A YEAR



2
CEO Letter to Stakeholders

18
Scorecard

14
IGNITE Strategy

26
Letter From Incoming
CEO and Governance

16
COVID-19: Adapting the Supply Chain

38
ESG Reporting



## COVER ART

The illustrations on the cover and throughout the report, created by Bay Area-based artist John Mavroudis, represent our attempt to put into words a year that defied description. The cover artwork is made up of actual phrases from a diverse set of stakeholders — from healthcare professionals to consumers to employees — describing how Clorox provided support to them through the global pandemic.



## LIKE NO OTHER.

Dear Stakeholder,

There are no words to describe 2020. It’s been a year like none other in modern times. We’re in the midst of a global pandemic that has impacted millions of people, cost hundreds of thousands of lives and caused a deep recession. And a racial and cultural awakening about the pain caused by a long history of racial injustice. Amid this landscape, our essential values have never been more important. >>>






Consistent with our commitment to Good Growth, we’re proud to have delivered strong results for our shareholders, achieved the right way:

+8%
SALES GROWTH (TOTAL COMPANY)

+16%
DILUTED EPS INCREASE

+170BPS
GROSS MARGIN EXPANSION

$1.5B
NET CASH PROVIDED BY OPERATIONS (+56%)

I’d like to focus my letter this year on our values and how this confluence of challenging conditions has provided the impetus for Clorox to live out our values when it counted most. And we were rewarded by consumers and stakeholders, leading to a strong financial performance — including solid

fundamentals, growth and increased shareholder value — which you will see throughout this report. We’re proud that what we’ve achieved this year has been Good Growth — growth that’s done the right way.

In a year of turmoil, the Clorox family has remained strong because of our values — particularly integrity, fair dealing and ethical practices

that are the underpinnings of our focus on doing the right thing. These are values that have guided our predecessors for 107 years and are even more relevant to the challenges brought on by COVID-19. Our character is both internally embedded and externally recognized, as the Axios Harris Poll 100 ranked us No. 1 in corporate reputation, and Forbes rated Clorox one of America’s Best Employers for Diversity. In this unique moment in time, The Clorox Company has become essential to the health and well-being of our society. And in this year, fueled by our IGNITE strategy, which enabled us to serve more communities and consumers, we continued our commitment to delivering value to all our stakeholders.

## SUPPORTING PEOPLE THROUGH
THE PANDEMIC

Clorox is a health and wellness company at heart,

A VERY
DIFFERENT
LETTER FOR
A VERY
DIFFERENT
YEAR
and during COVID-19 our mission has never been clearer. Since our founding in 1913, we’ve been an ally to communities and the government in times of need, including health crises and natural disasters, starting with World War II, when bleach was used to disinfect wounds, neutralize enemy gases and purify water. And whether it was the Ebola outbreak in West Africa, the swine flu or

Hurricane Katrina, The Clorox Company has been there to lend a hand with both product and monetary donations, in collaboration with the American Red Cross and many other organizations in the U.S. and internationally. We’ve learned how important it is to act quickly to help. With COVID-19, we activated our teams across the company in January to increase supply to protect public health and people. We identified three priorities:

1) Protecting the health, safety and well-being of our employees. We care deeply about the safety >>>



# HOW WE'RE EXECUTING OUR IGNITE STRATEGY

## PEOPLE AT THE CENTER

Putting people at the center of everything we do — a focus of our IGNITE strategy — was key in enabling us to serve our consumers and communities during the pandemic. In order for our teams to address unprecedented demand for our products, we needed to focus on their safety and well-being. We enhanced benefits for all our teammates, including a $1 million Employee Emergency Relief Fund covering incremental child care and medical expenses and an emergency time-off program to help parents navigate school closures and other absences related to COVID-19. At all our facilities worldwide, we rolled out enhanced infection prevention measures and offered increased pay and special incentives to our on-site teams who continued to make and ship our products during shelter-in-place orders. Based on survey results, 88% of employees felt their health and well-being were top priorities for the company.





## REIMAGINE WORK

Well before circumstances forced us to streamline production in order to meet unprecedented demand, we had started working on ways to simplify our portfolio and focus on what consumers really want. During COVID-19, this work accelerated. Our Cleaning Division reduced the total number of SKUs while increasing overall productivity – making 100 million more disinfecting units in FY20 compared to FY19, a 50% increase. \( ^{1} $ 

1 First half of CY20 versus same period in 2019.

## REIMAGINE WORK

Through technology, work that was once done only in person is now being done remotely. We began managing plant trials using augmented reality glasses, which share data directly to laptops and phones, while communicating with counterparts in the Product Supply Organization using FaceTime. We used modeling and simulation to indicate fill heights for vitamin, mineral and supplement products based on packaging die lines without the need to physically run trials as well as to improve operating efficiency, product quality and capacity at other plants.



## REIMAGINE WORK

BRITA
DRINK
LIKE
YOU
CARE

Brita’s marketing team reduced turnaround time for new marketing content 55% by shrinking work into small, iterative learning cycles and pushing down decision-making to employees closest to the information. Previously, 12- to 18-month plans were developed before execution. Today, the team is breaking planning into smaller increments aligned with specific needs and deliverables, reducing time from planning to execution from 16 weeks to seven weeks. Because planning is now done closer to execution, it’s more responsive and relevant.



and well-being of our global workforce and their families. Our team that makes and ships essential household products did an outstanding job in the face of extraordinary circumstances. Their health and well-being is top of mind, and we are grateful for their dedication.

2) Maximizing supply to get our products where they’re needed. As a company, we remain focused on doing everything feasible to maximize the supply of disinfecting products to serve consumers, healthcare workers and our communities in the face of demand that at times increased 500%. This is unprecedented for us or any consumer goods company.

3) Supporting caregivers and people most impacted by COVID-19. The Clorox Company Foundation and our brands committed more than $14 million globally in product and monetary donations to relief efforts in the fight against COVID-19. In addition, starting in April we prioritized our hospital-grade disinfectants, increasing production significantly to help healthcare facilities fight the spread of infection.

## GUIDED BY OUR STRATEGY

Our IGNITE strategy was a beacon in helping us navigate through this uncharted period in fiscal year 2020. At the time it was created, we didn’t know how prescient the strategy would be. And integrating environmental, social and governance goals into IGNITE provided a grounding to help us pivot quickly, in a number of ways.

Our ability to Reimagine Work during the pandemic, to keep our plants running 24/7 and not lose productivity, coupled with the agility and adoption of new technology with which we shifted to a remote workforce globally, enabled us to thrive under very trying circumstances.

In addition, IGNITE gave us the framework to make the right decisions to lead the company through this unique moment. Those decisions supported our strategic focus Fuel Growth, allowing us to cultivate a lot more communities with our essential products in new ways during the pandemic and lighting the path to serve society as people move about beyond their homes. Partnerships with United Airlines, AMC Theatres, Uber Technologies and Cleveland Clinic are testament to that. And we will not be hesitant to invest in more of these opportunities to bring our essential products to new places, expanding our disinfection efficacy, our influence and our footprint. Innovating for Good Growth was the guiding principle of IGNITE, and it was the catalyst to a resurgence for the company even prior to the pandemic. It will propel our actions going forward.

## CONTINUED COMMITMENT TO ESG

Our focus on environmental, social and governance priorities furthered our vision of earning people’s enduring loyalty and creating long-term value creation for all stakeholders. The time when a mysterious pathogen suddenly gripped the entire planet was precisely the time we most needed our team’s loyalty, work ethic, innovative thinking, teamwork and long-term focus — the foundation of ESG. And during this time, we don’t want to take our eye off the ball of sustainability. >>>



# HOW WE'RE EXECUTING OUR IGNITE STRATEGY

## FUEL GROWTH

Despite the pandemic, we proceeded with plans to convert cleaning plants for the production of a new concentrated formula of Clorox® bleach, completing the process for three of four facilities. This innovation gives consumers more disinfecting power per drop and reduces plastic packaging and water usage in manufacturing, contributing to record cost savings for the year, allowing us to reinvest that money back into the business.





## FUEL GROWTH

We reduced the amount of packaging used for certain multipack options of dry Hidden Valley \( ^{®} \)  Ranch dressing and Fresh Step \( ^{®} \)  cat litter through changes in product offerings, packaging design and manufacturing, saving nearly 3 million.

## FUEL GROWTH

To streamline inventory management, our Product Supply Organization implemented a new supply chain planning platform for our U.S. businesses that offers real-time visibility into supply chain operating conditions and global inventory. Using this data, models and forecasts can be created in real time to determine how plant capacity and raw material supply will impact future operations. As a result, the team generated $2.8 million in cost savings and $5 million in sustained inventory reduction for FY20.





## FUEL GROWTH

Our Product Supply Organization transformed the operations and efficiency of our supply chain by moving to a digital transportation management system. The fully automated system tracks thousands of daily transactions and traces the location of freight moving from our plants to distribution centers and customers in real time. Additionally, the team can now automate scheduling appointments of freight pick-ups, saving valuable time and resources for carriers and shippers. In total, the new system delivered $2.5 million in cost savings for FY20.



Our commitment to the environment — the “E” in ESG — shows up in all parts of our business every day. And the pandemic has made it more evident how important sustainability is. We set an ambitious target of 50% combined reduction in virgin plastic and fiber packaging and remain committed to this today.

Our IGNITE strategy starts with putting people — or the “Social” in ESG — at the center of everything we do. Not only has the pandemic made this even more significant, the racial reckoning that we experienced this spring triggered by the unjust death of Black men and women has been deeply dispiriting, and sadly they are not anomalies. Clorox stands against racism, inequality and injustice. And we stand with the Black community to confront the systemic racial injustices that have plagued our nation for generations yet feel even more palpable right now. We know we need to do more. It is a time for action and also a time for healing and rebuilding. We have started that process, with significant action toward racial justice and equality in our communities in the U.S. and within our company.

Inclusion and diversity is at the heart of this effort. If we want employees who come together in a crisis, who contribute innovative approaches based on their diverse backgrounds, who instinctively prioritize allocating supplies to front-line workers, who volunteer for long hours in scary times, and who provide perspective that balances our biases in the face of inequality, we need to genuinely value these attributes. I&D has never been more important nor its value more evident.
How we are structured and operate — or the “Governance” in ESG — has always mattered, but the pandemic demonstrated another way it’s important. We’ve never experienced a pandemic like this that spread globally almost overnight. Through it all, Clorox has been able to maintain its R&D operations; large teams of talented people; strong supply chains and distribution networks; and adaptable manufacturing and testing facilities.

In addition, we’re committed to enhancing our leadership in ESG through an unwavering commitment to strong corporate governance and ESG performance overseen by our board of directors. Executive compensation awards reflect achievement of our ESG goals for members of the Clorox Executive Committee, including for me.

Finally, we’re in alignment with key ESG reporting frameworks, including the Sustainability Accounting Standards Board and the Task Force on Climate-Related Financial Disclosures. As a signatory to the United Nations Global Compact, we also reaffirm our commitment to its Ten Principles by driving a strategy that imagines a brighter future for our people and the world around us.

## GIVING BACK TO OUR COMMUNITIES

In a year when the need was greater than ever, we provided both foundation and corporate cash grants, U.S. product donations and cash for cause marketing totaling more than $25 million to support COVID-19 relief and community-building in Oakland, Atlanta and other places where we have facilities and our people live and work. >>>



# HOW WE'RE EXECUTING OUR IGNITE STRATEGY

## FUEL GROWTH

Our Nutranet and RenewLife \( ^{®} \)  brands integrated systems across Product Supply, Sales and Human Resources to form the Better Health Vitamins, Minerals and Supplements business. This cross-functional effort creates a platform for growth through standardized processes and systems to enhance the supply chain, strengthen forecasting, and offer a more holistic portfolio of products to promote health and wellness.





## ENHANCE
SHOPPING EXPERIENCES

Prior to COVID-19, our e-commerce team laid the groundwork for growth by focusing on creating a frictionless online shopping experience for consumers at each stage of the purchase process — from search to delivery. This growth only accelerated as COVID-19 prompted more consumers to purchase our products online, and as a result e-commerce accounted for 12% of total company sales in FY20 compared to 8% in FY19.

## ENHANCE
SHOPPING EXPERIENCES

Our Grilling business focused on standardizing promotional pricing across retailers, so people can continue to trust they’re getting great value for Kingsford \( ^{®} \)  products at any time of the year and any day of the week, regardless of where they shop.





## BUILD PURPOSE-DRIVEN, PERSONALIZED BRANDS

During our COVID-19 response, our Clorox brand purpose — “Champion a cleaner world where everyone thrives” — took on new meaning as we responded to public health needs. We helped get our disinfecting products where they were needed most, like front-line healthcare workers and facilities, and educated consumers on how to use our products effectively and safely. And we partnered with Nextdoor on a “Neighbors Helping Neighbors” program, connecting people who wanted to provide care, such as picking up groceries, medications and other essentials, with those who needed some extra help via the Nextdoor Help Map.



We pledged an additional $2.5 million toward racial justice initiatives. Our employees volunteered in their communities as well, giving approximately 102,000 hours of their own time in calendar year 2019 — the financial equivalent of about $2.8 million.

## DELIVERING ESSENTIAL VALUE

Thanks to the heroic work of our people, our performance in fiscal year 2020 was very strong, delivering sales growth of 8%. And organic sales were up 10%, our highest organic sales growth on record. We also delivered total company gross margin expansion, and a 16% increase in diluted EPS. Importantly we expanded our household penetration and increased the share of our brands in the U.S. and internationally. And I’m proud that the percentage of our U.S. portfolio seen by consumers as delivering superior value has risen to an all-time high, positioning our brands well in this recession, because value is king, especially during difficult times. Consumers trust our brands and are choosing our brands, and we will continue to build long-term loyalty by investing in our relationship with them. And we’re already making progress against an ambitious set of ESG goals.

With a name that’s synonymous with the words “clean” and “trust,” Clorox is uniquely positioned to expand the base of consumers, communities and people we serve beyond the pandemic. Our 2020 fiscal year was a year when lives and livelihoods depended on the care with which we did our jobs. It’s what makes us essential, and I take that responsibility to heart. Finally, as I step down from my role as CEO of Clorox, I want to say that it has been my great privilege to carry forward the legacy of generations of strong Clorox leaders in my pursuit of Good Growth — growth that’s profitable, sustainable and responsible. The idea of Good Growth was based on the belief that companies can deliver great results the right way; that serving employees, communities and the planet is as important as serving shareholders; and that how we generate profit matters. I feel good about the progress we’ve made in delivering on that promise and look forward to continuing to serve the company as executive chair of the board.

I’m leaving Clorox in a good position and in great hands, with Linda Rendle taking over the reins as CEO. I’ve worked with Linda for 13 years, and from the beginning I knew she was a special talent. She’s an exceptional leader with an excellent track record. I think our industry needs leaders with courage — not only to do the right thing but to envision the future and make bold decisions. And that’s exactly who Linda is. She’s the right leader at the right time for this company.

I’m proud of her and every member of our team of 8,800 strong. Today more than ever.



Benno O. Dorer
Chair and Chief Executive Officer



# HOW WE'RE EXECUTING OUR IGNITE STRATEGY

## BUILD PURPOSE-DRIVEN, PERSONALIZED BRANDS

Our Hidden Valley Ranch brand used artificial intelligence to personalize the consumer experience online and show all the ways ranch flavors can be used in recipes. Consumers received AI engine-predicted recipe recommendations based on past behavior and user profiles, leading to a personalized experience on nearly 50% of total website page views and an 11% increase in recipe views.





## DELIVER BIGGER, STICKIER INNOVATION PLATFORMS

In a year when we delivered successful innovation like Kingsford pellets and Clorox fabric sanitizers—even in the midst of a pandemic — innovation platforms like Clorox Scientia \( ^{®} \)  cleaning and disinfecting products and Fresh Step Clean Paws \( ^{®} \)  cat litter products also continued to deliver strong growth in their third year after launch.

## EVOLVE PORTFOLIO

In Australia and New Zealand, our Glad \( ^{®} \)  brand launched “Glad to be Green,” a range of sustainable food protection and trash bag products including 50% plant-based bags and wraps, compostable trash bags \( ^{1} \)  and trash bags made from 95% recycled material. \( ^{2} \)  The food protection range also uses packaging made from 70% recycled material and is 100% recyclable. Each product has a beginning-of-life or end-of-life benefit, making it a more sustainable option for consumers that delivers on the quality promise of Glad — strength in trash bags and freshness in food protection.
1 Certified home compostable to AS5810 and certified industrial compostable to AS4736.
2 Made from 95% pre-consumer recycled material.





## EVOLVE PORTFOLIO

We created a new cross-functional team called Out of Home to help large, global companies improve their daily disinfection protocols for the health and well-being of their employees and consumers as they reopen for business. Partnerships with United Airlines, Uber Technologies and AMC Theatres were announced this year. We also agreed to a formal collaboration with one of the most respected names in healthcare, Cleveland Clinic, to help support public health and help people feel safer in public spaces through educational and other initiatives for businesses and industries.



# HOW WE'RE EXECUTING OUR IGNITE STRATEGY

## PLANET: CLIMATE STEWARDSHIP

We signed a 12-year, 70-megawatt virtual power purchase agreement with Enel Green Power for the purchase of renewable energy beginning in 2021. This VPPA represents about half of our 100% renewable electricity goal for our operations in the U.S. and Canada and is expected to help us accelerate achieving this goal in 2021, four years ahead of our original plan.

Photo courtesy of Enel Green Power.





## PLANET: CLIMATE STEWARDSHIP

We’ve committed to setting and achieving science-based targets to reduce greenhouse gas emissions in our operations (Scope 1 and 2) and across our value chain (Scope 3). These reduction targets ensure our plans for carbon reduction are in line with the latest climate science and the goals of the 2015 Paris Agreement.

## PLANET: PLASTIC AND OTHER WASTE

The company signed the Ellen MacArthur Foundation’s New Plastics Economy Global Commitment, which sets a vision of a circular economy for plastic. As part of our signatory status, we pledged aggressive plastic waste reduction and other packaging goals, including a 50% combined reduction in virgin plastic and fiber packaging by 2030. Bleach compaction — a conversion process that went forward despite the pandemic, demonstrating our commitment to sustainability — and a move to 100% recycled fiber cartons in Glad are projected to contribute approximately 15% of our reduction target.





## PLANET: PLASTIC AND OTHER WASTE

More sustainable product options were introduced, including a concentrated Clorox bleach formula offering superior performance with less waste and Clorox compostable cleaning wipes that have passed third-party tests to be composted at commercial facilities or at home while still offering the convenience of a wipe. Concentrated bleach will save more than $3.2 million in annual transportation costs — the equivalent of eliminating 6,200 truckloads per year — and reduce water use in the manufacturing process by 23 million gallons per year while making our product easier for people to use.



# HOW WE'RE EXECUTING OUR IGNITE STRATEGY

## PLANET: PLASTIC AND OTHER WASTE

We continue to pilot refill models of our consumer products. The Glad brand introduced food bags that can be recycled in a reusable steel container and return pouch through TerraCycle's Loop program, expanding our product offerings on this platform beyond Clorox disinfecting wipes. We also began test marketing a Clorox concentrated spray reusable cleaning system that could minimize the packaging and transportation footprints associated with a reduction in water and a refillable spray bottle.





## PRODUCT: TRANSPARENCY COMMITMENTS

We transitioned ingredient listings for our U.S. cleaning products to the online industry portal SmartLabel, where users will now find ingredient information as well as directions for use and safety data sheets. We also announced a commitment to voluntarily list ingredients on the labels of our household disinfecting products, which goes above and beyond the labeling law requirement that will take effect in 2021.

## PEOPLE: EMPLOYEES

We continued to invest in our No. 1 resource — our people — through wellness initiatives, including enhanced benefits to support our employees' total well-being and goals that support their physical, social, professional and financial well-being, including employee safety, inclusion and engagement in the workplace, gender and ethnic minority representation, and retirement readiness.





## PEOPLE: EMPLOYEES

We continued to invest in leadership training and development for managers to attract, develop and engage our workforce. The work involved ongoing support for hundreds of Clorox leaders through a global, 100% virtual management development program aimed at building stronger managers and teams. This award-winning program features discussions with senior leaders, virtual practice labs, social learning communities and coaching, with particular emphasis on inclusive leadership and mitigating unconscious bias.

## PEOPLE: CONSUMERS

To enhance consumer well-being, we increased the number of our wellness-related product categories in U.S. homes by 6.5 million compared to fiscal year 2019, leveraging the power of our portfolio of natural personal care; vitamins, minerals and supplements; water filtration and hydration; and cleaning brands to promote health and wellness.






## OUR COMMITMENT TO FIGHT FOR A BETTER WORLD

Just as it’s hard to adequately describe the impact of the global pandemic, we’re equally at a loss for words to capture the intense societal pain that’s come to the surface this year.

At Clorox, we’ve stood strongly against racism, inequality and injustice. But the very visible tragedies that have occurred recently have forced us to ask ourselves whether we’ve done enough. They show us we must fight even harder for a better world and stand stronger for the Black community to confront the systemic racial injustice that has plagued the U.S. for generations and been present elsewhere, too.

We will do more. And we will hold each other accountable. We’ll also ask our stakeholders to hold us accountable as we share our progress over time. As with the pandemic, our core value, Do the Right Thing, will guide our work, in order to create a more just and equitable world.







## VISION

Exceptional innovators who earn people’s enduring loyalty



## OBJECTIVE

Deliver Good Growth — profitable, sustainable and responsible

## IGNITE STRATEGY ANNUAL
FINANCIAL GOALS

GROW
Net Sales +2% to 4%

## EXPAND

EBIT Margin +25 to
50 Basis Points

## DELIVER

Free Cash Flow as %
of Sales 11% to 13%

## STRATEGIC CHOICES



## FUEL GROWTH

Widen the funnel on how we deliver cost savings, leveraging technology and sustainability to generate fuel for growth.



## REIMAGINE WORK

Galvanize our people with a bolder, more inclusive workplace in which we simplify our operations, tap technology and move more quickly to drive growth.

Building on our previous 2020 Strategy, IGNITE aims to strengthen our advantage through strategic business choices and fully integrated environmental, social and governance goals to drive Good Growth. With people at the center, the IGNITE strategy is focused on driving growth and delivering value for both shareholders and society.





## INNOVATE EXPERIENCES

Turn data into insights to build purpose-driven, personalized brands and deliver bigger, stickier innovation platforms while enhancing consumer shopping experiences — allowing us to better serve people.



## EVOLVE PORTFOLIO

Broaden our playing field in and around our core business, emphasizing consumer megatrends, and continue to lean in to enhanced wellness and natural personal care.



## INTEGRATED ESG GOALS



AMBITION: Be a leader in environmental sustainability, with a focus on plastic and other waste reduction and science-based climate action.

## GOALS:

## Plastic and Other Waste

• 50% combined reduction in virgin plastic and fiber packaging by 2030.

• 100% recyclable, reusable or compostable packaging by 2025.

• Double plastic PCR in packaging by 2030 (+50% by 2025).

• 100% global facilities zero waste to landfill by 2030 (plants by 2025). \( ^{1} \) 

## Climate Stewardship

- Set and achieve science-based targets to reduce greenhouse gas (GHG) emissions in our operations (Scope 1 and 2) and across our value chain (Scope 3). \( ^{2} \) 

• 100% renewable electricity in the U.S. and Canada in 2021.





## GOVERNANCE

AMBITION: Enhance our leadership in ESG through an unwavering commitment to strong corporate governance and ESG performance overseen by the board of directors.

## GOAL:

• Tie executive compensation awards to select ESG goals.



## PRODUCT

AMBITION: Be a leader in responsible product stewardship, with a focus on progressive actions to enhance our own and consumer packaged goods industry practices.

## GOALS:

## Product Advocacy

- Advance the science behind alternative approaches to animal testing, with the vision of eliminating EPA testing requirements for disinfecting products and replacing them with non-animal alternatives.

## Ingredient Management

- Reduce the chemical footprint of cleaning products, with progress detailed through annual reporting.

• Share restricted substances list for domestic retail cleaning products.

## Transparency Commitments

- Increase reach of SmartLabel tool and expand scope of consumer-meaningful information.

• Aggressively increase third-party product certifications.



## PEOPLE

## GOALS:

## Consumers

- Increase well-being (measure: number of our wellness-related product categories in U.S. homes).

## Employees

- Enhance financial literacy to enable better planning and superior retirement readiness (measure: income replacement ratio).

- Set targets related to manager capabilities, working environment, and health and wellness outcomes.

• Maintain recordable incident rate of <1.0 with a comprehensive safety management effort striving for an injury-free workplace.

• Ensure gender and ethnic pay equity.

• Achieve gender and ethnic minority representation targets.

• Achieve inclusion index \( ^{x} \)  targets.

1 Where infrastructure allows.

2 Will set science-based targets for GHG emissions in coordination with and to be approved by the SBT Initiative by October 2021.

3 A composite score for a set of survey questions we ask our employees, benchmarked against industry and/or other norms.



## COVID-19: HOW WE'RE ADAPTING THE
SUPPLY CHAIN TO ADDRESS DEMAND






Even before the declaration of a global pandemic in March, we were already taking steps to streamline our operations and increase inventory to help meet the anticipated spike in demand for our products. This effort has involved mobilization of response teams from across the company, harnessing innovation and elbow grease to spark an unprecedented transformation of our supply chain. We’ve been working hard but realize there’s a lot more left to do. As we address this critical business priority, we’re guided by our IGNITE strategy, with a relentless focus on reimagining work so it’s simpler, faster and bolder; driving innovation through superior consumer insights about rising expectations; and rapidly deploying new technologies to meet near-term needs while at the same time laying the groundwork for the future.

## KEEPING OUR PEOPLE SAFE

• Implement contact tracing and enhanced pay/sick leave policies.

• Adopt preventive detection through noncontact temperature checks and questionnaires administered by third-party medical provider.

- Clean and sanitize around the clock; acquire additional personal protective equipment for where close contact required.

• Adapt work schedules to reduce exposure during commutes and at shift changes.

• Retain services of epidemiologist to advise on plant practices and procedures.

## MAXIMIZING SUPPLY

• Focus manufacturing on disinfecting products that could be supplied most quickly, simplifying overall product offering to accelerate production.

• Increase production of disinfecting products in the U.S. in FY20 by 100 million units, or 50%. \( ^{1} \) 

• Invest in second manufacturing line within existing wipes plant to double in-house production by 2021.

• Prioritize hospital-grade disinfectants, increasing production significantly to help healthcare facilities fight the spread of infection.

• Develop alternative ingredient formulations to get product on shelf faster while maintaining high quality, safety and efficacy.

## COLLABORATING WITH RETAILERS AND SUPPLIERS

• Refine product mix to focus on most relevant retail partner and consumer needs.

• Identify new raw material sources to enhance our shared supply chains.

- Manage a dynamic, volatile transportation market, using analytics to evaluate and implement most effective shipping options.

• Added more than 10 new third-party manufacturers.



FY20 Sales
BY SEGMENT \( ^{1,2,3} $ 

41%
HEALTH &
WELLNESS \( ^{3} $ 

30%

CLEANING
[Clorox, Clorox Scentiva,
Pine-Sol, Tilex, Formula 409,
Liquid-Plumr]

7% PROFESSIONAL PRODUCTS
[Clorox Healthcare, CloroxPro,
Clorox Total 360]

4% VITAMINS, MINERALS AND SUPPLEMENTS
(Rainbow Light, Natural Vitality, NeoCell, Stop Aging Now, RenewLife)

(Clorox, Ayudin, Colerinda, Poett, Pine-Sol, Glad, Brita, RenewLife, Ever Clean, Burt's Bees)

LATIN AMERICA

CANADA
ASIA

MIDDLE EAST / NORTH AFRICA
EUROPE / SUB-SAHARAN AFRICA
AUSTRALIA / NEW ZEALAND

12%

8%

7%

9%

4%

4%

27%
HOUSEHOLD

BAGS & WRAPS
[Glad]

GRILLING
(Kingsford, Kingsford
Match Light)

CAT LITTER
[Fresh Step, Scoop Away,
Ever Clean]

17%
LIFESTYLE

FOOD PRODUCTS
(Hidden Valley)

NATURAL PERSONAL CARE
[Burt's Bees]

WATER FILTRATION
[Brita]

$6.7B
NET SALES

8,800
EMPLOYEES

25+
COUNTRY/TERRITORY
OPERATIONS

100+
MARKETS

1 All brands are registered trademarks of The Clorox Company.

2 All percentages represent rounded numbers.

3 A new Health and Wellness reportable segment was formed in FY20. It incorporates the previous Digestive Health and Dietary Supplements business units, which were combined into a new Vitamins, Minerals and Supplements business unit, and the previous Laundry and Home Care business units, which were combined to create a new Cleaning business unit. These newly established business units, along with the Professional Products business unit, make up this new segment.



## Our Global FOOTPRINT



## NORTH AMERICA



## SOUTH AMERICA



## EUROPE



United Kingdom



AFRICA



Kenya
South Africa



AUSTRALIA



NEW ZEALAND



Global headquarters



Plants

Administrative/sales offices





## MIDDLE EAST















Egypt

Saudi Arabia

United Arab Emirates

## ASIA

China

South Korea

Hong Kong

Philippines

Malaysia

Joint ventures

R&D facilities



## PERFORMANCE

Achieve financial success while investing for the long term.

## NET SALES
($ MILLIONS)





## EARNINGS BEFORE INCOME TAXES
($ MILLIONS)



## EARNINGS
($ MILLIONS)





## EBIT MARGIN \( ^{1} \) 
(AS A % OF NET SALES) (NON-GAAP)



## ECONOMIC PROFIT \( ^{2} \) 
($ MILLIONS)





## DILUTED NET EARNINGS PER SHARE
($)



## NET CASH PROVIDED BY OPERATIONS
($ MILLIONS)



## FREE CASH FLOW \( ^{3} \) 
(NON-GAAP) ($ MILLIONS)








## PEOPLE

## EMPLOYEE WELL-BEING

PHYSICAL
World-Class
Workplace Safety \( ^{1} $ 

0.58

RECORDABLE INCIDENT RATE
(vs. world-class level<1.0)

SOCIAL
Best-in-Class Employee
Engagement \( ^{2} $ 

88%

EMPLOYEE ENGAGEMENT
(vs. 75 \( ^{th} \)  percentile benchmarks of 84% for consumer goods companies and 85% for Fortune 500 companies)

## PROFESSIONAL
Workforce Diversity

ETHNIC MINORITIES (U.S.)

30% NONPRODUCTION MANAGERS
(vs. 30% U.S. Census Bureau) \( ^{4} $ 

34% NONPRODUCTION EMPLOYEES
(vs. 33% U.S. Census Bureau) \( ^{4} \) 

CONSUMER
WELL-BEING

Enhanced Well-Being
Through Our Brands

+6.5M

NUMBER OF OUR WELLNESS-
RELATED PRODUCT CATEGORIES
IN U.S. HOMES VS. FY19 \( ^{7} \) 

WOMEN (GLOBAL)

44% NONPRODUCTION MANAGERS

51% NONPRODUCTION EMPLOYEES



## Parity Inclusion Across the Company

80% WOMEN (GLOBAL)
Inclusion Index \( ^{3} $ 

75% ETHNIC MINORITIES (U.S.)
Inclusion Index \( ^{3} $ 

78% TOTAL CLOROX (GLOBAL)
Inclusion Index \( ^{3} \) 

## Diversity in Corporate Governance

33% MINORITY BOARD MEMBERS
(vs. 14% Fortune 500 average) \( ^{5} $ 

33% FEMALE BOARD MEMBERS
(vs. 20% Fortune 500 average) \( ^{5} $ 

43% FEMALE CLOROX
EXECUTIVE
COMMITTEE
MEMBERS

21% MINORITY CLOROX
EXECUTIVE
COMMITTEE
MEMBERS

SOCIETAL
WELL-BEING

The inclusion index measures the percentage of Clorox employees who feel a sense of inclusion at work, with the goal of parity across the company. As a new goal within the IGNITE strategy, the inclusion index in FY20 should be considered a baseline measurement.

## FINANCIAL

Retirement Readiness \( ^{6} $ 

64% INCOME REPLACEMENT RATIO (vs. 75% Vanguard target benchmark)

To determine retirement readiness, we measure the income replacement ratio for U.S. employees participating in the Clorox 401(k) program. As a new goal within the IGNITE strategy, the income replacement ratio in FY20 should be considered a baseline measurement.



$147 M SPENDING WITH DIVERSE SUPPLIERS \( ^{8} \) 

Note: To see a more comprehensive set of ESG goals and progress, visit thecloroxcompany.com.



## PEOPLE

At Clorox, creating an inclusive and diverse workplace where people feel respected, valued and seen at all levels of the company is a priority — so much so that it’s built into our overall business strategy.

As part of our continued commitment to transparency and progress in our inclusion and diversity journey, we are now sharing our current U.S. demographic representation data, or EEO-1 information, which is submitted annually to the U.S. Equal Employment Opportunity Commission. \( ^{9} \) 

## FEMALE

<table><tr><td>Executive/Sr Officials &amp; Mgr</td><td>36.2%</td></tr><tr><td>First/Mid Officials &amp; Mgr</td><td>46.7%</td></tr><tr><td>Professionals</td><td>56.8%</td></tr><tr><td>Technicians</td><td>40.8%</td></tr><tr><td>Sales Workers</td><td>69.2%</td></tr><tr><td>Administrative Support</td><td>56.1%</td></tr><tr><td>Craft Workers</td><td>3.9%</td></tr><tr><td>Operatives</td><td>18.5%</td></tr><tr><td>Laborers &amp; Helpers</td><td>20.2%</td></tr><tr><td>Service Workers</td><td>25.0%</td></tr></table>

## MINORITY

<table><tr><td>Executive/Sr Officials &amp; Mgr</td><td>24.5%</td></tr><tr><td>First/Mid Officials &amp; Mgr</td><td>29.9%</td></tr><tr><td>Professionals</td><td>39.0%</td></tr><tr><td>Technicians</td><td>68.0%</td></tr><tr><td>Sales Workers</td><td>23.1%</td></tr><tr><td>Administrative Support</td><td>37.5%</td></tr><tr><td>Craft Workers</td><td>16.2%</td></tr><tr><td>Operatives</td><td>38.6%</td></tr><tr><td>Laborers &amp; Helpers</td><td>61.1%</td></tr><tr><td>Service Workers</td><td>100.0%</td></tr></table>

## ASIAN

<table><tr><td>Executive/Sr Officials &amp; Mgr</td><td>9.6%</td></tr><tr><td>First/Mid Officials &amp; Mgr</td><td>12.7%</td></tr><tr><td>Professionals</td><td>14.7%</td></tr><tr><td>Technicians</td><td>6.8%</td></tr><tr><td>Sales Workers</td><td>2.6%</td></tr><tr><td>Administrative Support</td><td>2.8%</td></tr><tr><td>Craft Workers</td><td>1.0%</td></tr><tr><td>Operatives</td><td>2.0%</td></tr><tr><td>Laborers &amp; Helpers</td><td>2.7%</td></tr><tr><td>Service Workers</td><td>0.0%</td></tr></table>

## BLACK

<table><tr><td>Executive/Sr Officials &amp; Mgr</td><td>6.4%</td></tr><tr><td>First/Mid Officials &amp; Mgr</td><td>6.6%</td></tr><tr><td>Professionals</td><td>11.3%</td></tr><tr><td>Technicians</td><td>10.7%</td></tr><tr><td>Sales Workers</td><td>0.0%</td></tr><tr><td>Administrative Support</td><td>17.3%</td></tr><tr><td>Craft Workers</td><td>8.1%</td></tr><tr><td>Operatives</td><td>18.5%</td></tr><tr><td>Laborers &amp; Helpers</td><td>50.8%</td></tr><tr><td>Service Workers</td><td>31.3%</td></tr></table>



## PEOPLE

## HISPANIC

<table><tr><td>Executive/Sr Officials &amp; Mgrs</td><td>8.5%</td></tr><tr><td>First/Mid Officials &amp; Mgrs</td><td>8.8%</td></tr><tr><td>Professionals</td><td>10.5%</td></tr><tr><td>Technicians</td><td>45.6%</td></tr><tr><td>Sales Workers</td><td>15.4%</td></tr><tr><td>Administrative Support</td><td>15.0%</td></tr><tr><td>Craft Workers</td><td>6.5%</td></tr><tr><td>Operatives</td><td>15.9%</td></tr><tr><td>Laborers &amp; Helpers</td><td>5.3%</td></tr><tr><td>Service Workers</td><td>62.5%</td></tr></table>

PACIFIC ISLANDER

<table><tr><td>Executive/Sr Officials &amp; Mgrs</td><td>0.0%</td></tr><tr><td>First/Mid Officials &amp; Mgrs</td><td>0.2%</td></tr><tr><td>Professionals</td><td>0.2%</td></tr><tr><td>Technicians</td><td>0.0%</td></tr><tr><td>Sales Workers</td><td>5.1%</td></tr><tr><td>Administrative Support</td><td>0.8%</td></tr><tr><td>Craft Workers</td><td>0.0%</td></tr><tr><td>Operatives</td><td>0.6%</td></tr><tr><td>Laborers &amp; Helpers</td><td>1.1%</td></tr><tr><td>Service Workers</td><td>0.0%</td></tr></table>

NATIVE AMERICAN

<table><tr><td>Executive/Sr Officials &amp; Mgrs</td><td>0.0%</td></tr><tr><td>First/Mid Officials &amp; Mgrs</td><td>0.1%</td></tr><tr><td>Professionals</td><td>0.3%</td></tr><tr><td>Technicians</td><td>1.0%</td></tr><tr><td>Sales Workers</td><td>0.0%</td></tr><tr><td>Administrative Support</td><td>0.0%</td></tr><tr><td>Craft Workers</td><td>0.3%</td></tr><tr><td>Operatives</td><td>0.6%</td></tr><tr><td>Laborers &amp; Helpers</td><td>0.4%</td></tr><tr><td>Service Workers</td><td>0.0%</td></tr></table>

MULTIRACIAL

<table><tr><td>Executive/Sr Officials &amp; Mgrs</td><td>0.0%</td></tr><tr><td>First/Mid Officials &amp; Mgrs</td><td>1.5%</td></tr><tr><td>Professionals</td><td>1.9%</td></tr><tr><td>Technicians</td><td>3.9%</td></tr><tr><td>Sales Workers</td><td>0.0%</td></tr><tr><td>Administrative Support</td><td>1.6%</td></tr><tr><td>Craft Workers</td><td>0.3%</td></tr><tr><td>Operatives</td><td>0.9%</td></tr><tr><td>Laborers &amp; Helpers</td><td>0.8%</td></tr><tr><td>Service Workers</td><td>6.3%</td></tr></table>

TOTAL

<table><tr><td>Female</td><td>36.2%</td></tr><tr><td>Minority</td><td>36.4%</td></tr><tr><td>Black</td><td>14.3%</td></tr><tr><td>Hispanic</td><td>12.4%</td></tr><tr><td>Asian</td><td>7.6%</td></tr><tr><td>Multiracial</td><td>0.4%</td></tr><tr><td>Pacific Islander</td><td>0.3%</td></tr><tr><td>Native American</td><td>1.3%</td></tr></table>



PLANET and
COMMUNITY

## PLANET

Be a leader in environmental sustainability, with a focus on plastic and other waste reduction and science-based climate action.

## PLASTIC AND OTHER WASTE

VIRGIN PACKAGING REDUCTION \( ^{1} $ 

15% vs. goal of 50% combined reduction in virgin plastic and fiber packaging by 2030.

OF TARGET

## ZERO WASTE TO LANDFILL \( ^{2} $ 

38% vs. goal of 100% of plants achieving zero waste to landfill by 2025.

OF PLANTS

## CLIMATE STEWARDSHIP



GREENHOUSE GAS EMISSIONS \( ^{4} $ 

519K ↓ 9%

METRIC TONS CO \( _{2} \) e

ENERGY CONSUMPTION \( ^{5} $ 

666K

MEGAWATT HOURS

SCIENCE-BASED TARGETS \( ^{3} \) 

WATER CONSUMPTION \( ^{5} \) 

GOAL: Set and achieve science-based targets for greenhouse gas emissions.

2,904 ↓ 5%

MEGALITERS

RENEWABLE ENERGY \( ^{6} $ 

70

MW SOLAR

Virtual Power Purchase Agreement
GOAL: 100% renewable electricity in the U.S. and Canada in 2021.

## COMMUNITY

Safeguarding families through initiatives that promote health, education and safety.

$97.7M

FOUNDATION AND CORPORATE
COMMUNITY CASH GRANTS

> $13.4M

U.S. CORPORATE
PRODUCT DONATIONS

$2.4M >> $25.5M

U.S. CAUSE
MARKETING

TOTAL FY20
IMPACT

$2.01 M
OR 101,908 EMPLOYEE
VOLUNTEER HOURS IN CY19

$14.4 \( ^{2} \)  M COVID-19 RELIEF

Note: To see a more comprehensive set of ESG goals and progress, visit thecloroxcompany.com.



## FOOTNOTES

See footnotes below for descriptions of these non-generally accepted accounting principles, or non-GAAP measures, the reasons management believes they are useful to investors, and reconciliations to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. The non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be read in connection with the company's consolidated financial statements presented in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded.

1. EBIT represents earnings before income taxes, interest income and interest expense. EBIT margin is the ratio of EBIT to net sales. The company's management believes these measures provide useful additional information to investors to enhance their understanding about trends in the company's operations and are useful for period-over-period comparisons.

<table><tr><td>Reconciliation of EBIT</td><td></td><td></td><td></td></tr><tr><td>Dollars in millions</td><td>FY20</td><td>FY19</td><td>FY18</td></tr><tr><td>Earnings before income taxes</td><td>$1,185</td><td>$1,024</td><td>$1,054</td></tr><tr><td>Interest income</td><td>-2</td><td>-3</td><td>-6</td></tr><tr><td>Interest expense</td><td>99</td><td>97</td><td>85</td></tr><tr><td>EBIT - non-GAAP</td><td>$1,282</td><td>$1,118</td><td>$1,133</td></tr><tr><td>EBIT margin - non-GAAP</td><td>19.1%</td><td>18.0%</td><td>18.5%</td></tr><tr><td>Net sales</td><td>$6,721</td><td>$6,214</td><td>$6,124</td></tr></table>

## 2. Reconciliation of Economic Profit \( ^{II} \) 

<table><tr><td>Dollars in millions and all calculations based on rounded numbers</td><td>FY20</td><td>FY19</td><td>FY18</td></tr><tr><td>Earnings before income taxes</td><td>$1,185</td><td>$1,024</td><td>$1,054</td></tr><tr><td>Add back:</td><td></td><td></td><td></td></tr><tr><td>Noncash U.S. GAAP restructuring and intangible asset impairment charges</td><td>2</td><td>2</td><td>2</td></tr><tr><td>Interest expense</td><td>99</td><td>97</td><td>85</td></tr><tr><td>Earnings before income taxes, noncash U.S. GAAP restructuring and intangible asset impairment charges, and interest expense</td><td>$1,286</td><td>$1,123</td><td>$1,141</td></tr><tr><td>Less: Income taxes on earnings before income taxes, noncash U.S. GAAP restructuring and intangible asset impairment charges and interest expense \( ^{III} \)</td><td>267</td><td>222</td><td>249</td></tr><tr><td>Adjusted after-tax profit</td><td>$1,019</td><td>$901</td><td>$892</td></tr><tr><td>Average capital employed \( ^{III} \)</td><td>$3,478</td><td>$3,231</td><td>$2,977</td></tr><tr><td>Less: Capital charge \( ^{III} \)</td><td>$313</td><td>$291</td><td>$268</td></tr><tr><td>Economic profit \( ^{III} \)  (adjusted after-tax profit less capital charge)</td><td>$706</td><td>$610</td><td>$624</td></tr></table>

 \( ^{II} \)  Economic profit (EP) is defined by the company as earnings before income taxes, excluding noncash U.S. GAAP restructuring and intangible asset impairment charges, and interest

## PEOPLE FOOTNOTES

1 Based on industry benchmarking by Clorox, we consider a recordable incident rate of 1.0 or less to be world-class performance. Our FY20 RIR of 0.58 means that for every 100 Clorox employees globally, not including workers at offices with fewer than 30 employees but including remote workers, we averaged less than one reportable incident during the past year. According to the latest available data from the U.S. Bureau of Labor Statistics, the average RIR for goods-producing manufacturing companies is 3.4%. The entire decade under its predecessor, the RIRs of the U.S. Department of Labor's Occupational Safety and Health Administration guidelines and is applied globally.

2 The FY20 engagement survey was open for three weeks, during which time 84% of eligible Clorox employees completed the survey. The engagement survey was administered by Perceptyx. Engagement is defined as the extent that employees have pride in the company, intend to stay, get intrinsic motivation from their work and would recommend the company as a good place to work. Performance is compared to the Perceptyx Fortune 500 and CGP benchmarks. Perceptyx's Fortune 500 benchmark is comprised of 72 companies from Fortune magazine's annual Fortune Global 500 list and includes 6.14 million survey responses. The Perceptyx CGP benchmark comprises employee survey results from organizations that produce consumer goods, including results from 33 companies and 1.46 million survey responses.

3 Expressed as a percentage of employees experiencing Clorox as an inclusive workplace, measured across the company overall (global) and among female (global) and ethnic minority (U.S. only) employee subgroups. The inclusion index was measured through an FY20 engagement survey, administered by Perceptyx, in which 84% of eligible Clorox employees participated. Inclusion is defined as the extent that employees feel their manager encourages diverse perspectives, that senior leadership visibly demonstrates that having a diverse and inclusive workforce is important for Clorox's business success, that teams openly discuss differing opinions in reaching decisions, and the ability to be one's authentic self at work.

## PLANET FOOTNOTES

1 Projected contribution to target based on major projects launched in FY20.

2 Where infrastructure allows.

3 To reduce GHG emissions in our operations [Scope 1 and 2] and across our value chain [Scope 3]; targets to be set in coordination with and approved by the SBT Initiative by October 2021.

4 CY19 footprint that includes Scope 1, 2 and 3 emissions and percentage change versus CY18 baseline.

## COMMUNITY FOOTNOTES

1 Financial equivalent of 101,908 volunteer hours, calculated at $27.20 per hour, based on the 2020 U.S. value of volunteer time from IndependentSector.org. Less than 5% of these hours are by employees outside the U.S., but all are calculated using the U.S. average rate.
expense; less income taxes [calculated utilizing the company's effective tax rate], and less a capital charge [calculated as average capital employed multiplied by a cost of capital rate]. EP is a key financial metric that the company's management uses to evaluate business performance and allocate resources, and is a component in determining employee incentive compensation. The company's management believes EP provides additional perspective to investors about financial returns generated by the business and represents profit generated over and above the cost of capital used by the business to generate that profit.

 \( ^{III} \)  The tax rate applied is the effective tax rate on net earnings, which was 20.8%, 19.8% and 21.8% in fiscal years 2020, 2019 and 2018, respectively.

 \( ^{III} \)  Total capital employed represents total assets less non-interest-bearing liabilities. Adjusted capital employed represents total capital employed adjusted to add back current year after tax noncash U.S. GAAP restructuring and intangible asset impairment charges. Average capital employed is the average of adjusted capital employed for the current year and total capital employed for the prior year, based on year-end balances. See below for details of the average capital employed calculation.

 \( ^{III} \)  Capital charge represents average capital employed multiplied by a cost of capital, which was 9% for all fiscal years presented. The calculation of capital charge includes the impact of rounding numbers.

<table><tr><td>Dollars in millions</td><td>FY20</td><td>FY19</td><td>FY18</td></tr><tr><td>Total assets</td><td>$6,213</td><td>$5,116</td><td>$5,060</td></tr><tr><td>Less:</td><td></td><td></td><td></td></tr><tr><td>Accounts payable and accrued liabilities \( ^{M} \)</td><td>1,327</td><td>1,033</td><td>1,000</td></tr><tr><td>Current operating lease liabilities</td><td>64</td><td>—</td><td>—</td></tr><tr><td>Income taxes payable</td><td>25</td><td>9</td><td>—</td></tr><tr><td>Long-term operating lease liabilities</td><td>278</td><td>—</td><td>—</td></tr><tr><td>Other liabilities \( ^{M} \)</td><td>755</td><td>774</td><td>778</td></tr><tr><td>Deferred income taxes</td><td>62</td><td>50</td><td>72</td></tr><tr><td>Non-interest-bearing liabilities</td><td>2,511</td><td>1,866</td><td>1,850</td></tr><tr><td>Total capital employed</td><td>3,702</td><td>3,250</td><td>3,210</td></tr><tr><td>After tax noncash U.S. GAAP restructuring and intangible asset impairment charges</td><td>2</td><td>1</td><td>1</td></tr><tr><td>Adjusted capital employed</td><td>$3,704</td><td>$3,251</td><td>$3,211</td></tr><tr><td>Average capital employed</td><td>$3,478</td><td>$3,231</td><td>$2,977</td></tr></table>

 \( ^{III} \)  Accounts payable and accrued liabilities and Other Liabilities are adjusted to exclude interest-bearing liabilities.

<table><tr><td colspan="4">3. Reconciliation of Free Cash Flow</td></tr><tr><td>Dollars in millions</td><td>FY20</td><td>FY19</td><td>FY18</td></tr><tr><td>Net cash provided by operations (GAAP)</td><td>$1,546</td><td>$ 992</td><td>$ 976</td></tr><tr><td>Less: capital expenditures</td><td>(254)</td><td>(206)</td><td>(194)</td></tr><tr><td>Free cash flow (non-GAAP)</td><td>1,292</td><td>786</td><td>782</td></tr><tr><td>Free cash flow as a percentage of net sales (non-GAAP)</td><td>19.2%</td><td>12.6%</td><td>12.8%</td></tr><tr><td>Net sales</td><td>$6,721</td><td>$6,214</td><td>$6,124</td></tr></table>

The company’s management uses free cash flow and free cash flow as a percent of net sales to help assess the cash generation ability of the business and funds available for investing activities, such as acquisitions, investing in the business to drive growth, and financing activities, including debt payments, dividend payments and share repurchases. Free cash flow does not represent cash available only for discretionary expenditures, since the company has mandatory debt service requirements and other contractual and non-discretionary expenditures. In addition, free cash flow may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded.

4 U.S. Census Bureau benchmark metrics are based on the U.S. Census Bureau's Equal Employment Opportunity [EEO] Tabulation 2006-2010, American Community Survey 5-year dataset. The benchmarks are modeled using Clorox's workforce as of June 30, 2018. The calculations utilize weighted averages by U.S. Census job code and apply approximate workforce location assumptions based on Clorox's historical workforce locations and headcount trends.

5 Missing Pieces Report: The 2018 Board Diversity Census of Women and Minorities on Fortune 500 Boards," Deloitte and the Alliance for Board Diversity, 2019.

6 Retirement income available as a percentage of pre-retirement income, calculated by Vanguard for U.S. employees participating in the Clorox 401(k) program (95% of U.S. employees). Based on Clorox 401(k) and estimated Social Security income at retirement age 67); excludes outside income sources or personal savings outside of Clorox 401(k) [unless provided to Vanguard by participant]. 64% income replacement ratio reported as of June 25, 2020. Vanguard's target benchmark of 75% is defined as the percentage of pre-retirement income required to maintain one's lifestyle at retirement.

7 Metric reflects increase in the number of our wellness-related categories in U.S. homes, including cleaning; natural personal care; vitamins, minerals and supplements; and water filtration and hydration.

8 Metric reflects spending with diverse suppliers, including minority, women, service-disabled and veteran-owned business enterprises as well as gay, lesbian, bisexual and transgender business owners in the U.S. and Puerto Rico.

9 Our breakdown of job categories and demographic information provided is in line with EEO-1 categories that are defined by the U.S. Equal Employment Opportunity Commission.

5 CY19 footprint and percentage change versus CY18 baseline.

6 70-megawatt Virtual Power Purchase Agreement executed in November 2019. Purchases under this VPPA are expected to support about 50% of Clorox's 100% renewable electricity goal for U.S. and Canada operations beginning in January 2021.



# CLEAR PRIORITIES FOR
A DEFINING MOMENT

This is such an important time to be CEO of The Clorox Company. It is the challenge and opportunity of a lifetime. And it is an honor to take over from Benno Dorer and work to fulfill the legacy of great Clorox CEOs.

We are facing an incredibly difficult moment in the U.S. and around the world. We know that people are counting on all of our products, and particularly our disinfectants. My No. 1 priority this year is to get more of our disinfecting products into homes and healthcare facilities so we can help people through this health crisis and beyond it. As a health and wellness company, we take this responsibility very seriously.

Our IGNITE strategy helped drive our agility during COVID-19 and will set us up for success in the future. I have three priorities moving forward:

1) Maximizing the Supply of Our Disinfecting Products to ensure that all people have access to them. We don’t know what turns this pandemic will take or what lies in the distance, but I have a singular focus on applying all resources necessary to bring our products to people and communities.

2) Living Our Values by continuing to put people at the center of everything we do. We will lean into this through the culture we create with our own employee base. We recognize the importance of building an even more diverse and inclusive workforce. And that diverse thinking will influence our external actions.

3) Accelerating Our Impact in the world as a company. We will be on “100% offense” to make that happen. We recognize the magnitude of the moment and will leverage our brands and corporate resources to help people adjust to the rapidly changing and challenged world around them. That is Good Growth at its core. Our IGNITE strategy will drive innovation by employing superior insights about rising consumer expectations and deploying rapidly advancing technology to earn long-term loyalty among our stakeholders. And our ESG commitments will guide how we show up for people and society.

None of this can be accomplished without the remarkable team we have at Clorox. All of us are committed to making a difference for people every day with our brands, support of our communities and mission of Good Growth.



Linda Rendle

Incoming Chief Executive Officer



## Corporate GOVERNANCE

A commitment to strong corporate governance allows others to maintain trust in our company and brands and enables us to create long-term shareholder value.

Some examples of Clorox’s adherence to best practices in governance include the following:

## BOARD MAKEUP

• Annual director elections, with a majority voting standard for election.

• Diverse board composition: five female directors; four directors are people of color; lead independent director and two-thirds of committee chairs are ethnically diverse; all but two directors are independent.*

• Active board refreshment and average board tenure of 6.7 years.*

• Shareholders have the right to call special meetings.

• Management proposals to remove legacy supermajority vote provision in charter.



The company also has demonstrated an openness to stockholder feedback, considering and in some cases adopting recent changes to governance guidelines:

For the first time, we are sharing our employment data by race/ethnicity, gender and job category — also known as EE0-1 data, which is submitted annually to the U.S. Equal Employment Opportunity Commission — as part of this integrated annual report.
Proxy access for a shareholder or a group of up to 20 shareholders who have owned at least 3% of outstanding capital stock for at least three years to submit director nominees for up to 20% of board seats.

Adopted formal board diversity policy in fiscal year 2020.



Our governance framework is overseen by an experienced board of directors. The directors bring with them expertise in diverse areas that include operations, finance, regulatory, risk management, strategy and governance, enabling them to serve as responsible stewards of the company. Through active outreach with stockholders, our lead independent director also stays informed of the issues that are most important to our investors.



# Board of
DIRECTORS





Benno Dorer \( ^{1} \) 
CHAIR AND CHIEF EXECUTIVE OFFICER



Linda Rendle \( ^{2} \) 
INCOMING CHIEF EXECUTIVE OFFICER



Amy Banse
MANAGING DIRECTOR AND HEAD OF FUNDS,
COMCAST VENTURES; EXECUTIVE VICE
PRESIDENT, COMCAST CORPORATION



Richard H. Carmona
M.D., M.P.H., F.A.C.S.
CHIEF OF HEALTH INNOVATIONS, CANYON RANCH



Spencer C. Fleischer
MANAGING PARTNER, FFL PARTNERS



Esther Lee
EXECUTIVE VICE PRESIDENT — GLOBAL CHIEF
MARKETING OFFICER, METLIFE INC.



A.D. David Mackay
RETIRED PRESIDENT AND CHIEF EXECUTIVE
OFFICER, KELLOGG COMPANY



Robert W. Matschullat \( ^{3} \) 
RETIRED VICE CHAIRMAN AND CHIEF FINANCIAL
OFFICER, THE SEAGRAM COMPANY LTD.



Matthew J. Shattock
NON-EXECUTIVE CHAIRMAN OF THE BOARD,
BEAM SUNTORY INC.



Kathryn Tesija \( ^{4} \) 
FORMER EXECUTIVE VICE PRESIDENT AND
CHIEF MERCHANDISING AND SUPPLY CHAIN
OFFICER, TARGET CORPORATION



Pamela Thomas-Graham
LEAD INDEPENDENT DIRECTOR



Russell J. Weiner
CHIEF OPERATING OFFICER AND PRESIDENT
OF THE AMERICAS, DOMINO'S PIZZA INC.



Christopher J. Williams
CHAIRMAN, SIEBERT, WILLIAMS
AND SHANK LLC



# Executive
COMMITTEE



Kevin Jacobsen
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER



Bill Bailey
SENIOR VICE PRESIDENT —
CORPORATE AND BUSINESS DEVELOPMENT



Troy Datcher
SENIOR VICE PRESIDENT AND
CHIEF CUSTOMER OFFICER



Kirsten Marriner
EXECUTIVE VICE PRESIDENT AND
CHIEF PEOPLE OFFICER



Chau Banks \( ^{4} \) 
SENIOR VICE PRESIDENT AND
CHIEF INFORMATION OFFICER



Denise Garner
SENIOR VICE PRESIDENT AND
CHIEF INNOVATION OFFICER

Benno Dorer \( ^{1} \) 
CHAIR AND CHIEF EXECUTIVE OFFICER





Eric Reynolds \( ^{3} \) 
EXECUTIVE VICE PRESIDENT —
HOUSEHOLD AND LIFESTYLE



Diego Barral
SENIOR VICE PRESIDENT AND GENERAL
MANAGER — INTERNATIONAL DIVISION



Stacey Grier \( ^{6} \) 
SENIOR VICE PRESIDENT AND
CHIEF MARKETING OFFICER



Linda Rendle \( ^{2} \) 
INCOMING CHIEF EXECUTIVE OFFICER



Laura Stein
EXECUTIVE VICE PRESIDENT — GENERAL
COUNSEL AND CORPORATE AFFAIRS



Michael Costello \( ^{5} \) 
SENIOR VICE PRESIDENT AND GENERAL
MANAGER — NUTRANEXT AND RENEWLIFF



Andy Mowery
SENIOR VICE PRESIDENT AND
CHIEF PRODUCT SUPPLY OFFICER



## CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

<table><tr><td>Years ended June 30Dollars in millions, except share and per share data</td><td>2020</td><td>2019</td><td>2018</td></tr><tr><td>Net sales</td><td>$ 6,721</td><td>$ 6,214</td><td>$ 6,124</td></tr><tr><td>Cost of products sold</td><td>3,658</td><td>3,486</td><td>3,449</td></tr><tr><td>Gross profit</td><td>3,063</td><td>2,728</td><td>2,675</td></tr><tr><td>Selling and administrative expenses</td><td>969</td><td>856</td><td>837</td></tr><tr><td>Advertising costs</td><td>675</td><td>612</td><td>570</td></tr><tr><td>Research and development costs</td><td>145</td><td>136</td><td>132</td></tr><tr><td>Interest expense</td><td>99</td><td>97</td><td>85</td></tr><tr><td>Other (income) expense, net</td><td>(10)</td><td>3</td><td>(3)</td></tr><tr><td>Earnings before income taxes</td><td>1,185</td><td>1,024</td><td>1,054</td></tr><tr><td>Income taxes</td><td>246</td><td>204</td><td>231</td></tr><tr><td>Net earnings</td><td>$ 939</td><td>$ 820</td><td>$ 823</td></tr><tr><td>Net earnings per share</td><td></td><td></td><td></td></tr><tr><td>Basic net earnings per share</td><td>$ 7.46</td><td>$ 6.42</td><td>$ 6.37</td></tr><tr><td>Diluted net earnings per share</td><td>$ 7.36</td><td>$ 6.32</td><td>$ 6.26</td></tr><tr><td>Weighted average shares outstanding (in thousands)</td><td></td><td></td><td></td></tr><tr><td>Basic</td><td>125,828</td><td>127,734</td><td>129,293</td></tr><tr><td>Diluted</td><td>127,671</td><td>129,792</td><td>131,581</td></tr></table>



## CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME

<table><tr><td>Years ended June 30Dollars in millions</td><td>2020</td><td>2019</td><td>2018</td></tr><tr><td>Net earnings</td><td>939</td><td>820</td><td>823</td></tr><tr><td>Other comprehensive (loss) income:</td><td></td><td></td><td></td></tr><tr><td>Foreign currency adjustments, net of tax</td><td>(36)</td><td>(22)</td><td>(28)</td></tr><tr><td>Net unrealized gains (losses) on derivatives, net of tax</td><td>5</td><td>2</td><td>12</td></tr><tr><td>Pension and postretirement benefit adjustments, net of tax</td><td>(7)</td><td>4</td><td>12</td></tr><tr><td>Total other comprehensive (loss) income, net of tax</td><td>(38)</td><td>(16)</td><td>(4)</td></tr><tr><td>Comprehensive income</td><td>$ 901</td><td>$ 804</td><td>$ 819</td></tr></table>



## CONDENSED CONSOLIDATED BALANCE SHEETS

<table><tr><td>As of June 30</td><td></td><td></td></tr><tr><td>Dollars in millions, except share and per share data</td><td>2020</td><td>2019</td></tr><tr><td>ASSETS</td><td></td><td></td></tr><tr><td>Current assets</td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>$ 871</td><td>$ 111</td></tr><tr><td>Receivables, net</td><td>648</td><td>631</td></tr><tr><td>Inventories, net</td><td>454</td><td>512</td></tr><tr><td>Prepaid expenses and other current assets</td><td>47</td><td>51</td></tr><tr><td>Total current assets</td><td>2,020</td><td>1,305</td></tr><tr><td>Property, plant and equipment, net</td><td>1,103</td><td>1,034</td></tr><tr><td>Operating lease right-of-use assets</td><td>291</td><td>—</td></tr><tr><td>Goodwill</td><td>1,577</td><td>1,591</td></tr><tr><td>Trademarks, net</td><td>785</td><td>791</td></tr><tr><td>Other intangible assets, net</td><td>109</td><td>121</td></tr><tr><td>Other assets</td><td>328</td><td>274</td></tr><tr><td>Total assets</td><td>$ 6,213</td><td>$ 5,116</td></tr><tr><td>LIABILITIES AND STOCKHOLDERS&#x27; EQUITY</td><td></td><td></td></tr><tr><td>Current liabilities</td><td></td><td></td></tr><tr><td>Notes and loans payable</td><td>$ —</td><td>$ 396</td></tr><tr><td>Current operating lease liabilities</td><td>64</td><td>—</td></tr><tr><td>Accounts payable and accrued liabilities</td><td>1,329</td><td>1,035</td></tr><tr><td>Income taxes payable</td><td>25</td><td>9</td></tr><tr><td>Total current liabilities</td><td>1,418</td><td>1,440</td></tr><tr><td>Long-term debt</td><td>2,780</td><td>2,287</td></tr><tr><td>Long-term operating lease liabilities</td><td>278</td><td>—</td></tr><tr><td>Other liabilities</td><td>767</td><td>780</td></tr><tr><td>Deferred income taxes</td><td>62</td><td>50</td></tr><tr><td>Total liabilities</td><td>5,305</td><td>4,557</td></tr><tr><td>Commitments and contingencies</td><td></td><td></td></tr><tr><td>Stockholders&#x27; equity</td><td></td><td></td></tr><tr><td>Preferred stock: $1.00 par value; 5,000,000 shares authorized; none issued or outstanding</td><td>—</td><td>—</td></tr><tr><td>Common stock: $1.00 par value; 750,000,000 shares authorized; 158,741,461 shares issued as of June 30, 2020 and 2019; and 126,198,606 and 125,686,325 shares outstanding as of June 30, 2020 and 2019, respectively</td><td>159</td><td>159</td></tr><tr><td>Additional paid-in capital</td><td>1,137</td><td>1,046</td></tr><tr><td>Retained earnings</td><td>3,567</td><td>3,150</td></tr><tr><td>Treasury shares, at cost: 32,542,855 and 33,055,136 shares as of June 30, 2020 and 2019, respectively</td><td>(3,315)</td><td>(3,194)</td></tr><tr><td>Accumulated other comprehensive net (loss) income</td><td>(640)</td><td>(602)</td></tr><tr><td>Stockholders&#x27; equity</td><td>908</td><td>559</td></tr><tr><td>Total liabilities and stockholders&#x27; equity</td><td>$ 6,213</td><td>$ 5,116</td></tr></table>



## CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<table><tr><td rowspan="2"></td><td colspan="2">Common Stock</td><td rowspan="2">Additional Paid-in Capital</td><td rowspan="2">Retained Earnings</td><td colspan="2">Treasury Stock</td><td rowspan="2">Accumulated Other Comprehensive Net (Loss) Income</td><td rowspan="2">Total</td></tr><tr><td>Amount</td><td>Shares (in thousands)</td><td>Amount</td><td>Shares (in thousands)</td></tr><tr><td>Dollars in millions, except per share data</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Balance as of June 30, 2017</td><td>$159</td><td>158,741</td><td>$928</td><td>$2,440</td><td>$(2,442)</td><td>(29,727)</td><td>$(543)</td><td>$542</td></tr><tr><td>Net earnings</td><td></td><td></td><td></td><td>823</td><td></td><td></td><td></td><td>823</td></tr><tr><td>Other comprehensive (loss) income</td><td></td><td></td><td></td><td></td><td></td><td></td><td>(4)</td><td>(4)</td></tr><tr><td>Dividends [$3.60 per share declared]</td><td></td><td></td><td></td><td>(467)</td><td></td><td></td><td></td><td>(467)</td></tr><tr><td>Stock-based compensation</td><td></td><td></td><td>53</td><td></td><td></td><td></td><td></td><td>53</td></tr><tr><td>Other employee stock plan activities</td><td></td><td></td><td>(6)</td><td>1</td><td>56</td><td>1,139</td><td></td><td>51</td></tr><tr><td>Treasury stock purchased</td><td></td><td></td><td></td><td></td><td>(272)</td><td>(2,171)</td><td></td><td>(272)</td></tr><tr><td>Balance as of June 30, 2018</td><td>159</td><td>158,741</td><td>975</td><td>2,797</td><td>(2,658)</td><td>(30,759)</td><td>(547)</td><td>726</td></tr><tr><td>Cumulative effect of accounting changes \( ^{(1)} \)</td><td></td><td></td><td></td><td>36</td><td></td><td></td><td>(39)</td><td>(3)</td></tr><tr><td>Net earnings</td><td></td><td></td><td></td><td>820</td><td></td><td></td><td></td><td>820</td></tr><tr><td>Other comprehensive (loss) income</td><td></td><td></td><td></td><td></td><td></td><td></td><td>(16)</td><td>(16)</td></tr><tr><td>Dividends [$3.94 per share declared]</td><td></td><td></td><td></td><td>(503)</td><td></td><td></td><td></td><td>(503)</td></tr><tr><td>Stock-based compensation</td><td></td><td></td><td>43</td><td></td><td></td><td></td><td></td><td>43</td></tr><tr><td>Other employee stock plan activities</td><td></td><td></td><td>28</td><td>—</td><td>124</td><td>2,178</td><td></td><td>152</td></tr><tr><td>Treasury stock purchased</td><td></td><td></td><td></td><td></td><td>(660)</td><td>(4,474)</td><td></td><td>(660)</td></tr><tr><td>Balance as of June 30, 2019</td><td>159</td><td>158,741</td><td>1,046</td><td>3,150</td><td>(3,194)</td><td>(33,055)</td><td>(602)</td><td>559</td></tr><tr><td>Cumulative effect of accounting changes  \( ^{(2)} \)</td><td></td><td></td><td></td><td>22</td><td></td><td></td><td></td><td>22</td></tr><tr><td>Net earnings</td><td></td><td></td><td></td><td>939</td><td></td><td></td><td></td><td>939</td></tr><tr><td>Other comprehensive (loss) income</td><td></td><td></td><td></td><td></td><td></td><td></td><td>(38)</td><td>(38)</td></tr><tr><td>Dividends [$4.29 per share declared]</td><td></td><td></td><td></td><td>(544)</td><td></td><td></td><td></td><td>(544)</td></tr><tr><td>Stock-based compensation</td><td></td><td></td><td>50</td><td></td><td></td><td></td><td></td><td>50</td></tr><tr><td>Other employee stock plan activities</td><td></td><td></td><td>41</td><td>—</td><td>121</td><td>2,043</td><td></td><td>162</td></tr><tr><td>Treasury stock purchased</td><td></td><td></td><td></td><td></td><td>(242)</td><td>(1,531)</td><td></td><td>(242)</td></tr><tr><td>Balance as of June 30, 2020</td><td>$159</td><td>158,741</td><td>$1,137</td><td>$3,567</td><td>$(3,315)</td><td>(32,543)</td><td>$(640)</td><td>$908</td></tr></table>

(1) As a result of adopting ASU No. 2014-09, “Revenue from Contracts with Customers (ASC 606),” on July 1, 2018, the Company recorded a cumulative effect of initially applying the new guidance as an adjustment to the fiscal year 2019 opening balance of Retained earnings.

(2) As a result of adopting ASU No. 2016-02, “Leases (ASC 862),” on July 1, 2019, the Company recorded a cumulative effect of initially applying the new guidance as an adjustment to the fiscal year 2020 opening balance of Retained earnings.



## CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<table><tr><td>Years ended June 30Dollars in millions</td><td>2020</td><td>2019</td><td>2018</td></tr><tr><td>Operating activities:</td><td></td><td></td><td></td></tr><tr><td>Net earnings</td><td>$ 939</td><td>$ 820</td><td>$ 823</td></tr><tr><td>Adjustments to reconcile net earnings to net cash provided by operations:</td><td></td><td></td><td></td></tr><tr><td>Depreciation and amortization</td><td>180</td><td>180</td><td>166</td></tr><tr><td>Stock-based compensation</td><td>50</td><td>43</td><td>53</td></tr><tr><td>Deferred income taxes</td><td>(2)</td><td>(20)</td><td>(23)</td></tr><tr><td>Other</td><td>30</td><td>(29)</td><td>44</td></tr><tr><td>Changes in:</td><td></td><td></td><td></td></tr><tr><td>Receivables, net</td><td>(27)</td><td>(32)</td><td>(24)</td></tr><tr><td>Inventories, net</td><td>50</td><td>(7)</td><td>(21)</td></tr><tr><td>Prepaid expenses and other current assets</td><td>2</td><td>(6)</td><td>4</td></tr><tr><td>Accounts payable and accrued liabilities</td><td>291</td><td>17</td><td>(47)</td></tr><tr><td>Operating lease right-of-use assets and liabilities, net</td><td>19</td><td>—</td><td>—</td></tr><tr><td>Income taxes payable/prepaid</td><td>14</td><td>26</td><td>1</td></tr><tr><td>Net cash provided by operations</td><td>1,546</td><td>992</td><td>976</td></tr><tr><td>Investing activities:</td><td></td><td></td><td></td></tr><tr><td>Capital expenditures</td><td>(254)</td><td>(206)</td><td>(194)</td></tr><tr><td>Businesses acquired, net of cash acquired</td><td>—</td><td>—</td><td>(681)</td></tr><tr><td>Other</td><td>2</td><td>10</td><td>16</td></tr><tr><td>Net cash used for investing activities</td><td>(252)</td><td>(196)</td><td>(859)</td></tr><tr><td>Financing activities:</td><td></td><td></td><td></td></tr><tr><td>Notes and loans payable, net</td><td>(396)</td><td>189</td><td>(214)</td></tr><tr><td>Long-term debt borrowings, net of issuance costs paid</td><td>492</td><td>—</td><td>891</td></tr><tr><td>Long-term debt repayments</td><td>—</td><td>—</td><td>(400)</td></tr><tr><td>Treasury stock purchased</td><td>(248)</td><td>(661)</td><td>(271)</td></tr><tr><td>Cash dividends paid</td><td>(533)</td><td>(490)</td><td>(450)</td></tr><tr><td>Issuance of common stock for employee stock plans and other</td><td>162</td><td>147</td><td>45</td></tr><tr><td>Net cash used for financing activities</td><td>(523)</td><td>(815)</td><td>(399)</td></tr><tr><td>Effect of exchange rate changes on cash, cash equivalents and restricted cash</td><td>(5)</td><td>(2)</td><td>(3)</td></tr><tr><td>Net increase (decrease) in cash, cash equivalents and restricted cash</td><td>766</td><td>(21)</td><td>(285)</td></tr><tr><td>Cash, cash equivalents and restricted cash:</td><td></td><td></td><td></td></tr><tr><td>Beginning of year</td><td>113</td><td>134</td><td>419</td></tr><tr><td>End of year</td><td>$ 879</td><td>$ 113</td><td>$ 134</td></tr><tr><td>Supplemental cash flow information:</td><td></td><td></td><td></td></tr><tr><td>Interest paid</td><td>$ 89</td><td>$ 87</td><td>$ 75</td></tr><tr><td>Income taxes paid, net of refunds</td><td>241</td><td>207</td><td>245</td></tr><tr><td>Non-cash financing activities:</td><td></td><td></td><td></td></tr><tr><td>Cash dividends declared and accrued, but not paid</td><td>140</td><td>133</td><td>123</td></tr></table>



# REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM ON
CONDENSED FINANCIAL STATEMENTS



Building a better working world

To the Stockholders and the Board of Directors of The Clorox Company

We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of The Clorox Company as of June 30, 2020 and 2019, the related consolidated statements of earnings, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended June 30, 2020, and the related notes (collectively referred to as the "consolidated financial statements") (not presented separately herein) and in our report dated August 13, 2020, we expressed an unqualified opinion on those consolidated financial statements. Our report included a paragraph emphasizing that The Clorox Company changed its method of accounting for leases, effective July 1, 2019, using the modified retrospective approach upon adoption of Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842). In our opinion, the information set forth in the accompanying condensed consolidated financial statements as of June 30, 2020 and 2019 and for each of the three years in the period ended June 30, 2020 (presented on pages 30 through 34) is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of The Clorox Company's internal control over financial reporting as of June 30, 2020, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated August 13, 2020 (not presented separately herein) expressed an unqualified opinion thereon.

Emet + Young LLP

San Francisco, CA
August 13, 2020



# REPORT OF INDEPENDENT ACCOUNTANTS ON
REVIEW OF NONFINANCIAL INFORMATION

To the Board of Directors and Stockholders of The Clorox Company

We have reviewed the schedule of selected quantitative performance indicators (the “Subject Matter”) included in Exhibit A and as identified by the “●” symbol presented in The Clorox Company’s (“Clorox” or “the Company”) Annual Report (the “Report”) for the year ended December 31, 2019 or June 30, 2020, in accordance with the criteria also set forth in Exhibit A (the “Criteria”). We did not review all information included in the Report. We did not review the narrative sections of the Report, except where they incorporated the Subject Matter. The Clorox Company’s management is responsible for the Subject Matter included in Exhibit A and as also presented in the Report, in accordance with the Criteria. Our responsibility is to express a conclusion on the Subject Matter based on our review.

Our review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants (IAICPA) AT-C section 105, Concepts Common to All Attestation Engagements, and AT-C section 210, Review Engagements). Those standards require that we plan and perform our review to obtain limited assurance about whether any material modifications should be made to the Subject Matter in order for it to be in accordance with the Criteria. A review consists principally of applying analytical procedures, making inquiries of persons responsible for the subject matter, obtaining an understanding of the data management systems and processes used to generate, aggregate and report the Subject Matter and performing such other procedures as we considered necessary in the circumstances. A review is substantially less in scope than an examination, the objective of which is to obtain reasonable assurance about whether the Subject Matter is in accordance with the Criteria, in all material respects, in order to express an opinion. Accordingly, we do not express such an opinion. A review also does not provide assurance that we became aware of all significant matters that would be disclosed in an examination. We believe that our review provides a reasonable basis for our conclusion.

In performing our review, we have also complied with the independence and other ethical requirements set forth in the Code of Professional Conduct and applied the Statements on Quality Control Standards established by the AICPA.

As described in Exhibit A, the Subject Matter is subject to measurement uncertainties resulting from limitations inherent in the nature and the methods used for determining such data. The selection of different but acceptable measurement techniques can result in materially different measurements. The precision of different measurement techniques may also vary.

Based on our review, we are not aware of any material modifications that should be made to the selected quantitative performance indicators for the year ended December 31, 2019 or June 30, 2020 in order for it to be in accordance with the Criteria.

Emmett Young LLP

San Francisco, CA

October 6, 2020




EXHIBIT A:

THE CLOROX COMPANY SCHEDULE OF SELECTED QUANTITATIVE PERFORMANCE INDICATORS FOR THE YEAR ENDED DEC. 31, 2019, OR JUNE 30, 2020

<table><tr><td>INDICATOR NAME</td><td>SCOPE</td><td>UNIT</td><td>VALUE1</td><td>CRITERIA</td></tr><tr><td>Scope 1 Greenhouse Gas (GHG) Emissions2,3,4</td><td>Global</td><td></td><td>64,484</td><td>The World Resources Institute/ World Business Council for Sustainable Development (WRI/WBCSD) Greenhouse Gas (GHG) Protocol Corporate Standard</td></tr><tr><td>Scope 2 GHG Emissions, location-based-method2,4,5</td><td>Global</td><td>Absolute metric tonnes carbon dioxide equivalent (tCO2e)</td><td>170,370</td><td></td></tr><tr><td>Scope 2 GHG Emissions, market-based-method2,4,5</td><td>Global</td><td></td><td>170,370</td><td>WRI/WBCSD GHG Protocol Corporate Standard, GHG Protocol Scope 2 Guidance</td></tr><tr><td>Scope 3 GHG Emissions2,6</td><td>See footnote6</td><td></td><td>283,651</td><td>WRI/WBCSD GHG Protocol Corporate Value Chain (Scope 3) Standard</td></tr><tr><td>Energy consumption2,4</td><td>Global</td><td>Absolute megawatt hours (MWh) 2019</td><td>66,112</td><td>Refer to criteria for Scope 1 &amp; 2 GHG Emissions above</td></tr><tr><td>Water consumption2,4</td><td>Global</td><td>Absolute megaliters of water consumed 2019</td><td>2,904</td><td>Global Reporting Initiative (GRI) Standard 303 and Management&#x27;s criteria as follows: Water consumption includes water at all global manufacturing sites, offices and research development centers used in 1) products sold to customers, 2) the manufacturing process, 3) irrigation and 4) water consumed by employees during office hours for personal needs (e.g., restrooms, break rooms). Water sources include city/municipal, well, lake, river and stormwater.</td></tr><tr><td rowspan="6">Workforce demographics/diversity metrics5</td><td rowspan="6">See right for metric scope</td><td>Percentage minority non-production employees in U.S.8</td><td>34%</td><td>OSHA Regulation 1920.2(d) and Equal Employment Opportunity Commission (EEOC) — Instruction Booklet EE0-1 and EE0 Terminology defines &quot;Employee&quot; as an individual who is employed in a business of his employer which affects commerce. The Equal Employment Opportunity Commission defines &quot;Minority&quot; as any race that is not white (Asian; Black; Latino; Native American; Native Hawaiian; or Two or More).</td></tr><tr><td>Percentage minority non-production managers in U.S.8</td><td>30%</td><td rowspan="5">Management&#x27;s criteria as follows: &quot;Manager&quot; is defined as an &quot;employee&quot; at Grade 27 or above for U.S. employees and Grade 26 or above for international employees with regard to Clorox&#x27;s Human Resources (HR) compensation structure. &quot;Production Employee&quot; is defined as an employee at Grade 19 or below with regard to Clorox&#x27;s HR compensation structure (international and U.S.). &quot;Non-Production Employee&quot; is defined as an employee at Grade 20 or above with regard to Clorox&#x27;s HR compensation structure (international and U.S.). In certain circumstances, nonproduction employees may be classified below Grade 20 based on type of work performed.</td></tr><tr><td>Percentage female non-production employees globally8</td><td>51%</td></tr><tr><td>Percentage female non-production managers globally8</td><td>44%</td></tr><tr><td>Percentage female Board of Directors</td><td>33%</td></tr><tr><td>Percentage minority Board of Directors</td><td>33%</td></tr><tr><td>U.S. product donations9</td><td>U.S. only</td><td>Value of products donated in U.S. dollars</td><td>$13.4 million</td><td>GRI 201-1a ii. Economic value distributed (community investments)</td></tr><tr><td>Recordable incident rate10</td><td>Global</td><td>Recordable incident rate (RIR)</td><td>0.58</td><td>Management&#x27;s definition as follows: U.S. product donations refer to those donations used to aid in disaster relief or to support schools, food banks and other nonprofit organizations. Value is derived from current-year average truckload price of the product donated. Truckload prices are based on volume ordered and shipped.</td></tr></table>

Note 1: Nonfinancial information is subject to measurement uncertainties resulting from limitations inherent in the nature and the methods used for determining such data. The selection of different but acceptable measurement techniques can result in materially different measurements. The precision of different measurement techniques may also vary.

1 All percentages are rounded to the nearest whole number in the Annual Report.

2 For all locations where Clorox maintains operational control and for the calendar year ended December 31, 2019.

3 Scope 1 emissions include direct energy used by Clorox in its operations, categorized by stationary combustion, mobile combustion, refrigerant use, direct VOC loss and direct wood pyrolysis. The last two sources relate mainly to Clorox's Kingsford business unit, and wood pyrolysis is considered to be a mostly carbon neutral process; therefore, CO \( _{2} \)  emissions from wood pyrolysis are not included in total tCO \( _{2} \) ; but CO \( _{2} \)  equivalent emissions from CH \( _{4} \)  and N \( _{2} \) O are included. Natural gas emissions, the largest Scope 1 emission source, are calculated using factors from the EPA (Environmental Protection Agency) Mandatory GHG Reporting for Stationary Fuel Sources, Title 40 Part 98 Table C-1 and C-2 (December 2016) and Global Warming Potential (GWP) rates from the Intergovernmental Panel on Climate Change's IPCC) Fourth Assessment Report. For Scope 1 emissions related to wood pyrolysis, Clorox is using the Wood & Wood Residuals emission factors under Title 40 Part 98 Table C-2.

4 Clorox's natural gas, electricity and municipal water consumption data for U.S. sites are tracked by Clorox's third-party utility management company. Other sources of energy and water consumption in the U.S. are tracked manually on a site by site basis and reported to Clorox's corporate team on an annual basis. For international sites, all energy and water consumption data is tracked manually and reported annually to Clorox's corporate team.

5 Scope 2 includes indirect emissions resulting from Clorox's purchased electricity use and is calculated using the EPA's 2018 eGRID emission factors (published in March 2020) for U.S. locations and the International Energy Agency's (IEA) 2017 emission factors (published in 2019) for international locations, with the exception of Canada. For Canadian locations, Clorox uses 2017 emission factors from the 2019 Canada National Inventory Report (NIR) part 3. Clorox applies GWPs from the IPCC's Fourth Assessment Report. For the Scope 2 market-based-method, Clorox contacted its largest utility suppliers, however, was unable to obtain reliable supplier specific emission factors. Clorox's renewable energy certificates are not retired and other contractual instruments and residual mix factors are not available in the locations in which Clorox operates. Due to the lack of market-based data available, Clorox's market-based emissions were calculated following the same process as the location-based-method emissions.

6 Scope 3 includes finished goods transportation in the U.S. only and global employee business travel. Employee business travel includes emissions from commercial air flights and rental car use by Clorox's employees. Commercial air flights are limited to business travel booked in the United States, United Kingdom, Hong Kong, Argentina, Chile, Mexico, Peru and Canada. Scope 3 emissions for business travel are calculated using per vehicle-mile traveled and per passenger-mile traveled emissions factors from the EPA's Center for Corporate Climate Leadership guidance (published in 2020). Emissions from finished goods transportation are calculated using per ton-mile emission factors, from the same guidance.

7 For the fiscal year ended June 30, 2020.

8 Based on headcount data of employees with reported gender and ethnicities. The total headcount data used for workforce/diversity metrics excludes Nurtanent employees as they were acquired in FY18 and are not yet included in Clorox's headcount system.

9 U.S. product donations include donations made by U.S. businesses (Brita, Cat Litter, Charcoal, Food Products, Glad, Home Care, Laundry Care, Natural Personal Care and Renew Life).

10 Recordable incident rate was determined as of July 10, 2020, for the fiscal year ended June 30, 2020. The recordable incident rate includes all reportable incidents that occurred at Clorox facilities globally. It does not include workers at offices with fewer than 30 employees, but it does include remote workers.



# ESG REPORTING

As part of our commitment to trust and transparency, we disclose against voluntary frameworks to report and communicate our environmental, social and governance performance. For our new strategy period, our reporting practices have evolved, and we have chosen to report through the Sustainability Accounting Standards Board again this year and implement the recommendations of the Task Force on Climate-Related Financial Disclosures for the first time because we believe these disclosures represent some of the most meaningful ESG areas of focus for our strategy and our company's impact on the environment and the interests of Clorox's stakeholders. We also continue to be committed to reporting on the Ten Principles of the United Nations Global Compact, which aim to make significant progress on global economic, social and environmental challenges. Clorox's CEO, CFO and general counsel approved our integrated report, which includes our sustainability reporting.

In the tables below we provide links to reporting platforms that contain more information on our ESG initiatives such as our responses to the CDP Climate Change, Forest and Water Security questionnaires, the Roundtable on Sustainable Palm Oil, Annual Communication on Progress report and The Clorox Company website.

## SASB REFERENCE TABLE:

HOUSEHOLD AND PERSONAL PRODUCTS STANDARD \( ^{1} \) 

<table><tr><td>TOPIC</td><td>SASB ACCOUNTING METRIC</td><td>SASB REFERENCE CODE</td><td>LOCATION OR RESPONSE</td></tr><tr><td>Water Management</td><td>Total water withdrawn and percentage in regions with High or Extremely High Baseline Water Stress</td><td>CG-HP-14a.1</td><td>2,904 thousand cubic meters in CY19
14% withdrawn from regions with High or Extremely High Baseline Water Stress
CDP Water Security Report
See exhibit A: The Clorox Company Schedule of Selected Quantitative Performance Indicators for the Year Ended Dec. 31, 2019, or June 30, 2020, page 37</td></tr><tr><td></td><td>Description of water management risks and discussion of strategies and practices to mitigate those risks</td><td>CG-HP-14a.2</td><td>CDP Water Security Report
Clorox Website: Sustainability in Our Facilities — Water</td></tr><tr><td>Product Environmental, Health and Safety Performance</td><td>Discussion of process to identify and manage emerging materials and chemicals of concern</td><td>CG-HP-25a.3</td><td>Clorox Website: Brands — What We&#x27;re Made Of</td></tr><tr><td rowspan="2">Packaging Lifecycle Management</td><td>Percentage of packaging made from recycled and/or renewable materials</td><td>CG-HP-41a.1</td><td>63% of primary and secondary plastic and fiber packaging purchased is made from recycled or renewable materials²
79% of primary packaging is recyclable, reusable and/or compostable³
Clorox Website: Sustainability in Our Products and Packaging</td></tr><tr><td>Percentage that is recyclable, reusable, and/or compostable</td><td></td><td></td></tr><tr><td></td><td>Discussion of strategies to reduce the environmental impact of packaging throughout its lifecycle</td><td>CG-HP-41a.2</td><td>Clorox Website: Sustainability in Our Products and Packaging</td></tr><tr><td rowspan="2">Environmental &amp; Social Impacts of Palm Oil Supply Chain</td><td>Amount of palm oil sourced, percentage certified through the Roundtable on Sustainable Palm Oil (RSPO) supply chains as (a) Identity Preserved,
(b) Segregated,
(c) Mass Balance, or
(d) Book &amp; Claim</td><td>CG-HP-43a.1</td><td>2,137 metric tons of palm oil and palm oil ingredients (palm content only) Clorox purchased for its domestic and international businesses in CY19
32.6% of palm oil and palm oil ingredients (palm content only) purchased has been third-party certified through the Roundtable on Sustainable Palm Oil supply chains
RSPO Annual Communication of Progress, Clorox Website: Supply Chain — Responsible Sourcing, Forest Commodities</td></tr><tr><td>Activity Metric</td><td>Number of manufacturing facilities</td><td>CG-HP-000.B</td><td>32</td></tr><tr><td>Energy Management</td><td>Total energy consumed, percentage renewable</td><td>CG-BF-13a.1</td><td>666,112 global absolute megawatt hours (MWh) in CY19
Goal to achieve 100% renewable electricity in the U.S. and Canada in 2021. 70-megawatt Virtual Power Purchase Agreement executed in November 2019. Purchases under this VPPA are expected to support about 50% of Clorox&#x27;s 100% renewable electricity goal for U.S. and Canada operations beginning in January 2021; the renewable energy we receive under the VPPA along with other market purchases of renewable energy credits mean Clorox is expected to meet its 100% renewable electricity goal beginning in 2021, four years ahead of the original plan
See exhibit A: The Clorox Company Schedule of Selected Quantitative Performance Indicators for the Year Ended Dec. 31, 2019, or June 30, 2020, page 37
CDP Climate Change Report, Clorox Website: Sustainability in Our Facilities — Energy</td></tr><tr><td>Greenhouse Gas Emissions</td><td>Gross global Scope 1, 2 and 3 emissions</td><td>FB-AG-11a.1</td><td>Scope 1 and 2: 234,854 absolute metric tons carbon dioxide equivalent (tCO2e) in CY19
Scope 3: 283,651 absolute metric tons CO2e in CY19
See exhibit A: The Clorox Company Schedule of Selected Quantitative Performance Indicators for the Year Ended Dec. 31, 2019, or June 30, 2020, page 37. CDP Climate Change Report, Clorox Website: Sustainability in Our Facilities — GHG Emissions</td></tr></table>

1 In addition to reporting against Consumer Goods Sector: Household and Personal Products Standard, we have included select metrics on GHG emissions and energy management from other SASB sector frameworks [Food & Beverage: Agricultural Products Standards, Consumer Goods: Building Products & Furnishings Standards].

2 Metric has been calculated based on CY19 purchases of primary and secondary packaging for global operations, and excludes data from contract manufactured product packaging from suppliers that procure packaging materials on our behalf.

3 Data has been calculated using the Ellen MacArthur Foundations' recyclability assessment tool, which is based on the findings of its New Plastics Economy 2020 Recycling Survey and the Ellen MacArthur Foundations' definition of recyclable packaging. Recyclability reporting is based on CY18 U.S. sales data and is estimated to reflect global results for this metric. We believe CY18 sales data is representative of CY19 sales given there were no material changes in the company's product mix during this time period.



## ESG
REPORTING

<table><tr><td>Core Element</td><td>TCFD Disclosure</td><td>The Clorox Company Disclosure</td></tr><tr><td rowspan="2">Governance</td><td>Board oversight of climate-related risks and opportunities</td><td>The Board of Directors&#x27; Nominating, Governance and Corporate Responsibility Committee oversees Clorox&#x27;s environmental matters and compliance and is updated at least quarterly on ESG priorities, including, as appropriate, those related to climate change.See CDP Climate Change Report Section C1</td></tr><tr><td>Management&#x27;s role in assessing and managing climate-related risks and opportunities</td><td>The Clorox Executive Committee is responsible for overseeing the execution of our business strategy, driving ESG priorities, including goals related to climate change, such as carbon emission reductions and renewable energy. Clorox continues to be committed to strong governance and ESG performance and has tied elements of its ESG goals to executive compensation awards.See CDP Climate Change Report Section C1</td></tr><tr><td rowspan="2">Strategy</td><td>Climate-related risks and opportunities</td><td>Clorox identifies risks and opportunities in its products, operations and supply chain, and discloses details as part of its annual CDP reporting. The primary risks and opportunities associated with climate change the company is exposed to and managing include:·Physical risks associated with extreme weather conditions or water stress due to climate change impacting our business operations, disrupting our supply chain, limiting our access to water, or impacting commodity, operational and distribution costs·Transitional risks associated with policy and regulations that increase the pricing on GHG emissions·Transitional risks and opportunities associated with shifts in market preferences as consumers seek products from companies that are proactively working to reduce their climate change-related impacts and offering less carbon intensive product solutions·Transitional opportunity associated with reduced operating and product costs resulting from resource efficiency improvements associated with climate related actions to reduce energy use, water use, waste and material useSee CDP Climate Change Report Section C2See CDP Water Security Report Section W4</td></tr><tr><td>Impact of climate risks and opportunities on businesses, strategy and financial planning</td><td>Climate risks and opportunities that might impact our business strategy include:·Consumer demand for products with lower environmental footprints growing faster than we have allowed for in our innovation investment planning - this is both an opportunity for our low environmental impact products, and a risk if we cannot meet demand·Acceleration of infectious disease and pandemics associated with warmer climates, increasing global demand for disinfecting products and solutions in consumer and business-to-business markets - this is both an opportunity given our leadership in disinfection and a risk if we cannot meet demand or sufficiently innovate to meet particular consumer needs·Low carbon energy sources and material supply chains that cannot keep up with growing industry demand, driving up costs or limiting our ability to meet our environmental commitments or bring sustainable innovation to market·More frequent and extreme weather events causing supply chain disruption and leading to health and sanitation issues due to flooding and property damage. This is both an opportunity and a risk given the potential impact on supply chains but potential increase in demand for our disinfection and other household products.·More severe and geographically dispersed water stress causing supply chain disruption·Faster adoption of climate change regulation that might increase our costsSee CDP Climate Change Report Section C3</td></tr><tr><td>Risk Management</td><td>Process for identifying and managing climate risks</td><td>Clorox identifies opportunities and potential physical, regulatory, reputational, changing consumer trends/awareness and any other risk factors associated with climate change, GHG emissions, energy consumption and water consumption. This is done at the corporate level with the cross-functional ESG &amp; Sustainability team and cascaded to various internal stakeholders, business and functional units as appropriate.The Clorox Enterprise Risk Management (ERM) Steering Committee, consisting of senior leaders across the organization, was established to provide a sustainable framework to proactively identify, understand, assess, prioritize, articulate and continuously manage risks, both existing and emerging, across the entire organization, including climate risks. The ERM office reports directly to the company Board of Directors and provides the Board key ERM updates.See CDP Climate Change Report Section C2</td></tr><tr><td>Metrics &amp; Targets</td><td>Integration of climate risk management into company&#x27;s overall risk management</td><td>In order to mitigate the risks associated with climate change, Clorox has identified Climate Stewardship as a key ESG priority integrated into the company&#x27;s IGINTE business strategy, building on the progress it has achieved in reducing the carbon footprint of its operations and products for more than 10 years. Through IGINTE, the company has committed to taking science-based climate action across its value chain, including opportunities in its operations, products and supply chains. Actions include compaction and other material reduction innovations to reduce material, water, and transportation footprints of its products, renewable energy procurement for its operations, and supply chain engagement informed by life cycle analyses to identify and address its material upstream carbon and water footprints, as well as impacts of products during consumer use and at the end of life. Life cycle analyses are also employed to inform new packaging design to ensure sustainability tradeoffs are considered during the development and commercialization of new products. For instance plastic packaging is often lighter weight to ship and requires less energy to produce than glass or metal but has different recyclability and end-of-life considerations.To accelerate progress, we have established a Sustainability Center responsible for defining, driving and tracking progress against Clorox&#x27;s environmental sustainability strategy. Each business unit leadership team is responsible for defining and achieving a strategic sustainability plan for its portfolio of brands that will help deliver corporate IGINTE ESG goals and advance its brands towards becoming a sustainable business. Business unit strategic sustainability plans are being integrated into the company&#x27;s long range planning process, with accountability to the Clorox Executive Committee.See CDP Climate Change Report Section C2</td></tr><tr><td>Metrics &amp; Targets</td><td>Metrics used to address climate risks and opportunities</td><td>We track, manage and disclose our performance in a number of areas related to climate risk, including Total GHG Emissions, GHG Emissions Intensity, Total Energy Consumption, Energy Intensity, Total Water withdrawal, water intensity and total water withdrawal from areas of high baseline water stressSee Scorecard, page 24, or CDP Climate Change Report Section C4 - C9</td></tr><tr><td></td><td>Scope 1, 2 and 3 GHG emissions</td><td>Scope 1 and 2: CY19 234,854 metric tons CO2eScope 3: CY19 283,651 metric tons CO2e (partial, US finished goods distribution and employee business travel)See Scorecard, page 24, or CDP Climate Change Report Section C4</td></tr><tr><td></td><td>GHG emissions targets</td><td>Set and achieve science-based targets for Scope 1, 2 and 3 GHG emissions by October 2021See IGINTE strategy, page 15; See Scorecard, page 24</td></tr><tr><td></td><td>Energy consumption</td><td>666,112 global absolute megawatt hours (MWh) in CY19-6% energy use per case of product sold vs. CY18 base yearSee Scorecard, page 24</td></tr><tr><td></td><td>Renewable energy targets</td><td>100% renewable electricity in U.S. and Canada in 2021</td></tr><tr><td></td><td>Water consumption</td><td>2,904 thousand cubic meters in CY19-5% water use per case of product sold vs. CY18 base year 410 thousand cubic meters withdrawn from regions with High or Extremely High Baseline Water Stress in CY19See Scorecard, page 24</td></tr><tr><td></td><td>Water targets</td><td>Drive continued water efficiency improvements as we advance a more localized approach to water stewardship</td></tr></table>



## COMMUNICATION ON PROGRESS:
TEN PRINCIPLES OF UNITED NATIONS GLOBAL COMPACT

<table><tr><td>CATEGORY</td><td>PRINCIPLE</td><td>CLOROX POLICIES AND FY20 PERFORMANCE</td></tr><tr><td>Human Rights</td><td>Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.</td><td>The Clorox Code of Conduct documents the ethical and legal standards of behavior and business practices that are required of all our directors, executives and employees around the world. We require all board members and employees to complete training and certify compliance with our code.
Business partners are expected to comply with our Business Partner Code of Conduct. The Business Partner Code of Conduct details our expectations regarding adherence to our Human Rights Commitment and other expectations related to human rights and labor, health and safety, the environment, and business conduct and ethics. This code precludes the use of forced, bonded, or indentured labor or prison labor. As an additional safeguard, the company&#x27;s Global Strategic Sourcing (GSS) organization implemented a monitoring program in FY17 using web-crawl technology to monitor all global direct material suppliers for any activities or incidents that would pose risk to the Clorox supply chain. Through an alert system, buyers are notified of any significant findings for appropriate action and/or follow-up. GSS also began annual risk assessments of global suppliers in FY18 based on location, scale, industry and audit history to determine those suppliers at highest risk for social compliance issues, including forced labor and human trafficking. The risk assessment allows us to determine which suppliers should be selected for third-party audits to verify compliance with all principles and standards of the Clorox Business Partner Code of Conduct.</td></tr><tr><td>Labor</td><td>Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labor;
Principle 5: the effective abolition of child labor; and
Principle 6: the elimination of discrimination in respect of employment and occupation.</td><td>Our responsible sourcing and sustainability program covers how we work with our business partners on key issues such as ethical business conduct and practices. This program sets out our expectations with regards to the respect for the human rights, including labor rights, of the workers in our extended supply chain, as these are all integral to the long-term success of our company and our partners. We also have grievance mechanisms available, including the Clorox compliance hotline, to ensure that individuals have a forum to raise concerns about compliance with the standards set out in our Codes of Conduct. And, in support of the California Transparency in Supply Chains Act and UK Modern Slavery Act, we have established formal trainings for our Global Product Supply and GSS teams to help them identify and address potential risks of slavery and human trafficking in our supply chain.
We work with external monitoring systems to enable suppliers to demonstrate compliance with our standards, including Sedex Members Ethical Trade Audit (SMEIA). We audit higher risk suppliers leveraging our membership in Sedex and suppliers are required to conduct or share their most recent four pillar (or approved equivalent) audit. The audits, which are conducted by an independent third party, assess suppliers&#x27; activities in the areas of labor rights, health and safety, environmental sustainability and business ethics.
As part of our IGNITE strategy, Clorox has refreshed its Inclusion &amp; Diversity strategy and has set goals to achieve our inclusion and gender and ethnic minority representation targets. We have also identified gender and ethnic pay equity as a key area of focus. The effort is a continuation of our ongoing practice to conduct compensation reviews and pay gap audits, looking at a number of diversity variables, including gender and ethnicity.
We respect the rights of workers to freely associate, organize and bargain collectively in accordance with applicable laws and the customs of the countries in which they are employed, as outlined in our Policy on Employee Freedom of Association. Collective bargaining agreements: U.S.: 6.85%, International: 1.28%, Total Company: 8.13%</td></tr><tr><td>Environment</td><td>Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies.</td><td>Additional information: CEO Letter - see pages 2-9 of report, Clorox Website: Workplace Safety
Advancing environmental sustainability is embedded in our value of doing the right thing. We bring this to life through the environmental goals embedded into our IGNITE strategy. These include setting and achieving science-based targets to reduce greenhouse gas (GHG) emissions in our operations and across our value chain by 2030, sourcing 100% renewable electricity for our U.S. and Canada operations in 2021, and ambitious targets to reduce plastic and other waste by 2030. These efforts are in conjunction with long-standing efforts to reduce our GHG, water and waste impacts across our value chain, from sourcing our raw materials to within our own manufacturing and operations, as well as during consumer use. We are also focusing on packaging innovations, compaction, light-weighting and other material reductions to reduce inputs and the footprint of products. Our commitment to environmental sustainability also includes working to ensure our products do not cause harm to the environment. We assess 100% of our product portfolio for both human and environmental safety.
To accelerate our progress in environmental responsibility, we have established a Sustainability Center responsible for defining, driving and tracking progress against Clorox&#x27;s environmental sustainability strategy. Each business unit leadership team is responsible for defining and achieving a strategic sustainability plan for its portfolio of brands that will help deliver corporate IGNITE ESG goals. We have also dedicated resources within our corporate and business development functions to help businesses evaluate and execute on strategic partnerships that help further our sustainability goals. As signatory to the United Nations Global Compact, our sustainability commitments reflect our belief in and support of sustainable development. We are also a signatory of the Ellen MacArthur Foundation&#x27;s New Plastics Economy Global Commitment.
As part of our commitment to sustainability, we aim to be transparent about our environmental challenges and opportunities. We report on sustainability in our annual integrated report, and Clorox&#x27;s CEO, CFO and General Counsel approve our integrated report.</td></tr><tr><td>Anti-corruption</td><td>Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.</td><td>Additional information: Scorecard - see page 24 of report, Third-Party ESG Frameworks - see pages 38-39 of report, Clorox Website: Environmental Sustainability. Environmental Sustainability Governance Guidelines, Brands: What We&#x27;re Made Of, Commitments and Progress - Message From the CEO
At Clorox, our core values are an intrinsic part of who we are as a company and as individuals. Clorox strictly forbids giving, soliciting, offering and accepting bribes, kickbacks and other prohibited payments by its employees, directors and business partners. We abide by anticorruption laws everywhere we do business in the world, without exception. These laws include the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act 2010, as well as all applicable anti-corruption and anti-bribery laws in each country in which we do business. 100% of the company&#x27;s leaders and employees must go through anti-corruption training. 100% of the company&#x27;s suppliers must adhere to the Business Partner Code of Conduct, which addresses ethical business practices.
The Clorox board of directors meets at least quarterly to review key issues/opportunities impacting the company.
Additional information: Clorox Website: Mission and Values, Corporate Governance Guidelines</td></tr></table>



# About this
REPORT



## MATERIALITY AND ESG PRIORITIES

The Clorox Company’s integrated annual report highlights the company’s financial and environmental, social and governance performance for fiscal year 2020 or the most recent ESG reporting periods. Fiscal year financial performance is presented in accordance with generally accepted accounting principles in the U.S., which include principles for determining materiality related to financial reporting.

The information focuses on performance related to the company’s identified ESG priorities. For purposes of this reporting, prioritization is based on how much a topic influences our business success, including alignment with our corporate strategy and purpose; potential impact on our operations, consumers and business partners; potential economic, social and environmental impacts; and the importance of the work to our stakeholders. Key ESG priorities may include, but are not limited to, topics that could have a significant financial impact on the organization.



## REVIEW OF NONFINANCIAL INFORMATION

We believe voluntary assurance strengthens our reporting process and enhances the credibility of our nonfinancial information. We engage a third party to review the following nonfinancial key performance indicators: greenhouse gas emissions, energy consumption, water consumption, workforce demographics, recordable incident rate and U.S. product donations. Items undergoing assurance are indicated with an “✓” throughout the report.



## THIRD-PARTY ESG FRAMEWORKS

This year we’ve evolved our report to focus on the Sustainability Accounting Standards Board’s Household and Personal Products standard, the Task Force on Climate-Related Financial Disclosures and the United Nations Global Compact’s Ten Principles.

- SASB’s industry-specific standards aim to help businesses around the world identify, manage and report on the sustainability topics that matter most to their investors. Progress toward reporting in accordance with SASB’s Household and Personal Products standards can be found on page 19 of this executive summary or in our full report.

- TCFD develops voluntary, consistent climate-related financial risk disclosures for companies to provide information to investors and other stakeholders. Please see our TCFD disclosure in our full report, which can be found at annualreport.thecloroxcompany.com.

- As a signatory to the United Nations Global Compact, our Communication on Progress describes our actions against the UNGC Ten Principles, which can be found at annualreport.thecloroxcompany.com.



## REPORTING PERIOD AND BOUNDARY

Most data in this report covers wholly and majority-owned operations for July 1, 2019, through June 30, 2020. In some instances, we have included data for a multiyear period to show year-over-year comparisons. Data in this report for environmental sustainability and volunteer hours is for the period of Jan. 1, 2019, through Dec. 31, 2019, and is global, unless otherwise stated.



## TRANSFER AGENT, REGISTRAR AND
DIVIDEND DISBURSING AGENT

Inquiries relating to stockholder records, change of ownership, change of address and the dividend reinvestment/direct stock purchase plan should be sent to:

Computershare
P.O. Box 505005
Louisville, KY 40233-5005

Overnight correspondence should be sent to:

Computershare
462 South 4th Street Suite 1600
Louisville, KY 40202
877-373-6374 or 781-575-2726
TDD 800-952-9245 or 312-588-4110 for the hearing impaired
computershare.com/investor

## STOCKHOLDER INFORMATION SERVICE

The latest company news is available at TheCloroxCompany.com.

## DIVIDEND REINVESTMENT/DIRECT STOCK PURCHASE PLAN

Clorox has authorized Computershare to offer a dividend reinvestment/direct stock purchase plan. Registered stockholders can purchase additional shares. Nonstockholders may join the plan with an initial investment, lump sum or bank debit. Most fees are paid by Clorox.

For more information or plan materials, visit TheCloroxCompany.com > Investors > Investor Resources > Online Document Library or contact Computershare (see above).

## MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Clorox management, under the supervision and with the participation of the chief executive officer and chief financial officer, has assessed the effectiveness of the company’s internal control over financial reporting as of June 30, 2020, and concluded that it is effective. For more information, see Item 9.A. of the company’s Form 10-K for the fiscal year ended June 30, 2020.

## 2020 FINANCIAL INFORMATION

Full financial statements are provided in the company’s 2020 proxy statement and annual report on Form 10-K. Detailed financial information is available without charge through the following sources:

- The company’s proxy statement is available at TheCloroxCompany.com and through the SEC’s EDGAR database.

- The company’s annual report on Form 10-K for the fiscal year ended June 30, 2020, is available at TheCloroxCompany.com and through the SEC’s EDGAR database.

## STOCK LISTING AND NUMBER OF RECORD HOLDERS

The Clorox Company’s common stock is listed on the New York Stock Exchange, identified by the symbol CLX. As of July 28, 2020, the number of record holders of Clorox’s common stock was 9,947.

## FORWARD-LOOKING STATEMENTS

Except for historical information, matters discussed in the annual report are forward-looking statements and are based on management’s estimates, assumptions and projections. Actual results could vary materially. Please review the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in the company’s annual report on Form 10-K for the fiscal year ended June 30, 2020, and subsequent SEC filings, for factors that could affect the company’s performance and cause results to differ materially from management’s expectations. The information in this report reflected management’s estimates, assumptions and projections as of Aug. 13, 2020. Clorox has not made updates since then and makes no representation, express or implied, that the information is still current or complete. The company is under no obligation to update any part of this document.

## COMPARATIVE STOCK PERFORMANCE

The graph below compares the cumulative total stockholder return of the Common Stock for the last five fiscal years with the cumulative total return of the Standard & Poor’s 500 Stock Index and a composite index composed of the Standard & Poor’s Household Products Index and the Standard & Poor’s Housewares & Specialties Index (referred to below as the Peer Group) for a five-year period ending June 30, 2020. The composite index is weighted based on market capitalization as of the end of each quarter during each of the last five years. The graph lines merely connect the prices on the dates indicated and do not reflect fluctuations between those dates.

## Comparison of Five-Year Cumulative Total Return \( ^{*} \) 
Among The Clorox Company, the S&P 500 Index and Peer Group



*$100 invested on 6/30/15 in stock or index, including reinvestment of dividends. Fiscal year ending June 30.

Copyright© 2020 Standard & Poor's, a division of S&P Global. All rights reserved.

<table><tr><td></td><td>6/15</td><td>6/16</td><td>6/17</td><td>6/18</td><td>6/19</td><td>6/20</td></tr><tr><td>The Clorox Company</td><td>100.00</td><td>136.47</td><td>134.74</td><td>140.53</td><td>163.26</td><td>240.02</td></tr><tr><td>S&amp;P 500</td><td>100.00</td><td>103.99</td><td>122.60</td><td>140.23</td><td>154.83</td><td>166.45</td></tr><tr><td>Peer Group</td><td>100.00</td><td>116.57</td><td>121.76</td><td>108.49</td><td>144.68</td><td>161.92</td></tr></table>

The stock price performance included in this graph is not necessarily indicative of future stock price performance.



A note of appreciation to all our stakeholders — our suppliers, our customers and others — who provided critical support to us and enabled us to get our products where they were needed most during this unprecedented year. Special thanks to our consumers for their patience as we worked diligently to ramp up supply and meet the unprecedented demand for our products. We feel privileged to be in a position to help. Most of all, thank you to our employees, whose extraordinary dedication to helping others and strong execution are critical to our success.



The Clorox Company

1221 Broadway, Oakland, CA 94612

thecloroxcompany.com

View the 2020 Multimedia Integrated Annual Report:

annualreport.thecloroxcompany.com