SUSTAINABLE GROWTH

"As we approach the company's 100-year anniversary in 2013, I remain confident we have the right people, brands and capabilities to successfully execute our Centennial Strategy."

Clorox Stockholders:

When people ask me about the key to our company's growth and success, my answer is innovation. In today's challenging economic environment, it's more important than ever for all of us at Clorox to innovate across all aspects of our business. Whether it's continuing to delight our consumers with new products that make everyday life better or supporting the well-being of communities through our corporate responsibility initiatives, we challenge ourselves to "think outside the bottle" to deliver growth and value for all our stockholders.

This year, for the first time, we integrated our annual financial and corporate responsibility reports, bringing to life our innovative approaches in the areas of Performance, Products, People, Planet and Purpose. These five pillars represent the intersection of our business and social imperatives.

As we approach the company's 100-year anniversary in 2013, I remain confident we have the right people, brands and capabilities to successfully execute our Centennial Strategy and build on our strong track record of delivering significant value for all our stockholders. I'd like to highlight some key accomplishments from fiscal year 2011, and why we feel confident about our plans for fiscal year 2012 and beyond.

We delivered a strong finish to fiscal year 2011.

I'm proud of our organization's ability to effectively execute and manage the factors within our control during one of the most challenging periods in decades. Fiscal 2011 was characterized by a slow economic recovery, declining U.S. categories, rising commodity costs and the devaluation of foreign currencies. As anticipated, we had some challenges in the first half. However, despite the challenging environment, we achieved higher growth in the second half, with net sales increasing 3 percent, earnings from continuing operations growing 6 percent, and diluted earnings per share (EPS) from continuing operations up 11 percent. For fiscal year 2011 results, see Our Scorecard under the Performance section of this report.

We continued to make substantial progress on our Centennial Strategy.

Relentless focus on innovation across the organization is one of the common threads in delivering on our four key strategic commitments:

Win With Superior Capabilities in the "3Ds": Desire, Decide and Delight — Clorox has a leading portfolio of brands that are No. 1 or No. 2 in their categories. In fiscal 2011, we continued to execute with excellence across our "3D" demand-creation model, shown by the increased market share of our brands. We recorded more share growth over the past three fiscal years than any branded competitor or private label in our categories, and achieved all-time-high total company market share of 27.9 percent, up 1.4 percentage points since fiscal 2008. We continued to address the challenge of declining categories through strong innovation. We delivered 2.8 percent of incremental sales from innovation, marking the ninth consecutive year we've met or exceeded our annual innovation target of 2 percentage points of incremental sales growth from new products. And we've made sustainability improvements¹ to 16 percent of our product portfolio since fiscal year 2009, putting us in a strong position to achieve our Centennial environmental goal of 25 percent.

Accelerate Growth in and Beyond the Core — We continued to capitalize on the global consumer "megatrends" of health and wellness, sustainability, the multicultural marketplace and affordability/value to drive growth from our existing businesses and new sources. We divested our Auto Care businesses in order to reshape our portfolio on more strategic businesses. With our global growth platforms, such as Stop the Spread of Infection, we have the strategies and plan to invest the resources necessary to capitalize on pivotal consumer trends that span global markets.

Relentlessly Drive Out Waste — At Clorox, we have tremendous cost discipline and remain focused on operational excellence. In fiscal 2011, we delivered $110 million in cost savings. In fact, we've delivered about $100 million or more in savings every fiscal year since 2003. We continued to streamline our operating model to be more effective and efficient, and invested in improving our global information technology processes and systems. We also delivered cost savings and efficiencies through our environmental sustainability initiatives, reducing our greenhouse gas emissions, energy and water use, and solid waste across the company.

Be a High-Performance Organization of Enthusiastic Owners — We have some of the most talented and enthusiastic employees in the business. Based on our annual employee engagement survey, the percentage of employees who consider themselves highly engaged reached a new high and significantly exceeded the 2011 global benchmark for employee engagement.² In 2011, we continued driving our corporate responsibility strategy across the company, as an integrated part of our culture and business.

We continued our history of strong cash flow, a Clorox hallmark.

Our priorities for cash flow remain the same: supporting our dividend, pursuing strategic acquisitions and returning excess cash to stockholders. In fiscal 2011, we returned nearly $1 billion to stockholders in the form of dividends and share repurchases. Over the last five fiscal years, from July 1, 2006, through June 30, 2011, we returned $2.7 billion to stockholders through dividends and share repurchases.

We've increased total annual dividends paid to Clorox stockholders every year for the past 34 years. Over the past five years, we have doubled the dividend from $1.20 to $2.40 per share. Most recently in May, we announced a 9 percent increase in our quarterly cash dividend versus the previous year.

We remain committed to delivering value to our stockholders.

Over the past three fiscal years, since the beginning of the global recession, Clorox has delivered a 43 percent increase in total stockholder returns, versus 34 percent for our 17-company peer group and 10 percent for the S&P 500 (see chart above).

We have continued to give back to our communities.

Since its founding in 1980, The Clorox Company Foundation has awarded cash grants totaling more than $84 million to nonprofit organizations, schools and colleges. In fiscal 2011 alone, the foundation awarded more than $4 million in cash grants and Clorox made product donations valued at $13 million.

By continuing to stay focused on innovation and a "think outside the bottle" approach across our entire business, I'm confident we can continue to deliver sustainable, long-term growth and value for all our stockholders. Looking ahead, we believe our robust innovation pipeline will enable category growth, our infrastructure investments will provide platforms for growth and efficiencies, and our strong cost-savings programs will contribute to margin expansion.

Most importantly, we have an organization of 8,100 highly engaged and talented employees committed to bringing you innovative products that make everyday life better, every day. Thank you for your continued support.

Sincerely,

Donald R. Knauss
Chairman and Chief Executive Officer
August 25, 2011

¹Redesign of product formulation or packaging to reduce materials and waste
²Corporate Executive Council survey of 250,000 employees at companies around the world