Balance Sheet Ratios for 2004 and 2005
- Calculate the Current Ratio
- Calculate the Book Debt to Equity Ratio
- Calculate the Market Debt to Equity Ratio (Use Book Value of Debt and Market Capitalization using basic shares outstanding and assuming stock prices of $56.89/share in 2005 and $58.93/share in 2004.)
16 The Clorox Company Report of Independent Registered Public Accounting Firm on Condensed Consolidated Financial Statements The Board of Directors and Stockholders 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 at June 30, 2005 and 2004, and the related consolidated statements of earnings, stockholders' equity, and cash flows for each of the three years in the period ended June 30, 2005 (not presented separately herein), and in our report dated August 26, 2005, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated financial statements 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, 2005, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 26, 2005 (not presented separately herein), expressed an unqualified opinion thereon. Ernst & Young LLP San Francisco, California August 26, 2005 18 The Clorox Company Condensed Consolidated Statements of Earnings Years ended June 30 (dollars in milions, except per-share amounts) 2005 2004 2003 4,388 3,986 Net sales Cost of products sold 4,162 2,331 2,493 2,171 1,815 1,895 551 435 1,831 543 420 84 523 446 Gross profit Selling and administrative expenses Advertising costs Research and development costs Restructuring and asset impairment costs Interest expense Other (income) expense: Equity earnings and gain on exchange of Henkel Iberica, S.A. Other, net Earnings from continuing operations before income taxes Income taxes on continuing operations Reversal of deferred taxes from equity investment in Henkel Iberica, S.A. Earnings from continuing operations Discontinued operations: Gain on exchange Earnings from exchanged businesses Reversal of deferred taxes from exchanged businesses Losses from Brazil operations Income tax expense on discontinued operations (14) Earnings from discontinued operations 579 59 32 Net earnings $ 1,096 $ 549 $ 493 Earnings per common share Basic $ $ Continuing operations Discontinued operations Basic net earnings per common share 2.92 3.28 6.20 2.31 0.28 2.59 2.11 0.15 2.26 $ $ $ $ $ Diluted Continuing operations Discontinued operations Diluted net earnings per common share 2.88 3.23 6.11 2.28 0.28 2.56 2.08 0.15 2.23 $ $ $ Weighted average common shares outstanding in thousands) Basic Diluted 176,586 179,176 211,683 214,371 218,174 220,692 The Clorox Company 19 Condensed Consolidated Balance Sheets As of June 30 dollars in milions, excepit per-share amounts) 2005 2004 $ Assets Current assets Cash and cash equivalents Receivables, net Inventories Other current assets 293 411 323 63 232 460 301 50 Total current assets 1,090 1,043 Property, plant and equipment, net 999 1,052 Goodwill, net 742 Trademarks and other intangible assets, net 599 633 Other assets 186 364 Total assets 3,617 3,834 Liabilities and Stockholders' (Deficit) Equity Current liabilities Notes and loans payable Current maturities of long-term debt Accounts payable Accrued liabilities Income taxes payable 359 2 347 614 289 2 310 643 Total current liabilities 1,348 1,268 Long-term debt 2,122 475 Other liabilities Deferred income taxes 174 Total liabilites 4,170 2,294 Stockholders' (deficit) equity Common stock: $1.00 par value; 750,000,000 shares authorized: 249,826,934 shares issued; and 151,683,314 and 212,988,540 shares outstanding at June 30, 2005 and 2004, respectively Additional paid-in capital Retained earnings Treasury shares, at cost: 98,143,620 and 36,838,394 shares at June 30, 2005 and 2004, respectively Accumulated other comprehensive net losses Unearned compensation 250 328 3,684 (4,463) (336) (16) 250 301 2,846 (1,570) (274) (13) Stockholders' (deficit) equity (553) 1,540 Total liabilities and stockholders' (deficit) equity $ 3.617 $ 3,834 20 The Clorox Company Condensed Consolidated Statements of Stockholders' (Deficit) Equity Common Stock Sheres (000) Amount Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Net Loses Treasury Shares Shares (000) Amount Dollars in milions (except per-share amounts) Total Comprehensive Income Unearned Compensation Total 249,827 $250 $222 $2,270 (26,817) $(1,070) $(296) $(10) $1,366 493 Balance at June 30, 2002 Comprehensive income Net earnings Translation adjustments Tax effect on translation adjustments Translation related to impairment charges Change in valuation of derivatives, net of tax of $(4) Minimum pension liability adjustments, net of tax Total comprehensive income Dividends paid ($0.88 per share) Employee stock plans Treasury stock purchased 33 (193) (5) 2,333 (11,666) 49 (486) (193) 78 (486) 249,827 250 255 2,565 (36,150) (1,507) (339) 1,215 549 Balance at June 30, 2003 Comprehensive income Net earnings Translation adjustments, net of tax of $1 Change in valuation of derivatives, net of tax of $2 Minimum pension liability adjustments, net of tax Total comprehensive income Dividends paid ($1.08 per share) Employee stock plans Treasury stock purchased 46 (229) (39) (4) 4,275 (4,963) 157 (220) (229) 160 (220) 249,827 250 301 2,846 (36,838) (1,570) (274) (13) 1,540 1,096 $1,096 1,096 (2,843) (61,387) 2,843) Balance at June 30, 2004 Comprehensive income Net earnings Share Exchange with Henkel KGaA Translation adjustments resulting from the Henkel KGaA exchange, net of tax of $(10) Other translation adjustments, net of tax of $12) Change in valuation of derivatives, net of tax of $(3) Minimum pension liability adjustments, net of tax 21 29 (118) (118) Total comprehensive income $1,034 Dividends paid ($1.10 per share) Dividends accrued ($0.28 per share) Employee stock plans Treasury stock purchased (201) (42) (15) 2,831 (2,750) 110 (160) (201) (42) 119 (160) (3) Balance at June 30, 2005 249,827 $250 $328 $3,684 (98,144) $14.463) $(336) $(16) $(553) The Clorox Company 21 Condensed Consolidated Statements of Cash Flows Years ended June 20 dollars in milions 2005 2004 2003 $ 517 $ 490 $ 461 (94) (55) 760 728 844 37 55 43 765 899 803 (151) (170) (203) (13) 15 (15) 2 (154) (17) (34) (234) (2) (236) (201) (154) (193) Operations: Earnings from continuing operations Adjustments to reconcile earnings from continuing operations to net cash provided by continuing operations: Depreciation and amortization Deferred income taxes Restructuring and asset impairment activities Gain on exchange of Henkel Iberica, S.A. Net loss disposition of assets Other Changes in: Receivables, net Inventories Other current assets Accounts payable and accrued liabilities Income taxes payable Settlement of income tax contingency Pension contributions to qualified plans Net cash provided by continuing operations Net cash provided by discontinued operations Net cash provided by operations Investing Activities: Capital expenditures Businesses acquired Proceeds from the sale of businesses Low-income housing contributions Other Net cash used for investing by continuing operations Net cash (used for provided by investing by discontinued operations Net cash used for investing activities Financing Activities: Notes and loans payable, net Long-term debt borrowings Long-term debt repayments Proceeds from option exercise pursuant to Venture Agreement Treasury stock acquired from related party, Henkel KGaA Treasury stock purchased from non affiliates Cash dividends paid Issuance of common stock for employee stock plans Other Net cash used for financing by continuing operations Net cash (used for provided by financing by discontinued operations Net cash used for financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents: Beginning of year End of year Supplemental cash flow information: Cash paid for: Interest, net of amounts capitalized Income taxes, net of refunds Non-cash investing and financing activities: Venture Agreement Equipment and technologies obtained Terminal obligation recorded Share Exchange Agreement As part of the Share Exchange Agreement, the company obtained 61,386,509 shares of its common stock in exchange for businesses valued at $745 and cash. Dividends declared but not paid 68 1,635 (215) 133 (2,119) (160) (201) (65) (155) (229) 111 (486) (193) 93 41 24 (0) (552) (596) (9) (627) & S SE $ 31 $ 30 81 126 $ 42
