1Q Net Sales Increased 8 Percent to a Record $4.4 Billion in 2007;
GAAP-Basis EPS Were 98 Cents vs. 60 Cents in 2006
Adjusted EPS Rose 11 Percent to $1.03, Consistent With Updated Guidance for
the Quarter
Company Reaffirms Adjusted EPS Guidance of $4.10 to $4.20 for the Full Year
of 2007
DALLAS, April 23 /PRNewswire-FirstCall/ -- Kimberly-Clark Corporation
(NYSE: KMB) today reported that net sales in the first quarter of 2007 rose
7.8 percent to $4.4 billion, a new quarterly high. Highlights included a
tenth consecutive quarter of double-digit gains in developing and emerging
markets, strong innovation-driven volume growth for the company's Personal
Care business in North America and higher net selling prices overall.
Diluted net income per share was 98 cents compared with 60 cents in the
prior year. Adjusted earnings in the first quarter of 2007 were $1.03 per
share, an increase of nearly 11 percent from 93 cents per share in 2006.
The improvement in adjusted earnings per share versus the year-ago quarter
was driven by the higher sales, continued success in reducing costs, a
lower effective tax rate and results at K-C de Mexico. In late March, the
company announced it anticipated positive results for the quarter, with
adjusted earnings per share expected to be at or slightly above the high
end of its previous guidance range of $0.99 to $1.01 per share.
Adjusted earnings exclude charges for strategic cost reductions to
streamline the company's operations in both years and certain incremental
implementation costs related to the strategic cost reduction plan in 2007.
Further information about adjusted earnings and other non-GAAP financial
measures is provided on pages 5-7.
Chairman and Chief Executive Officer Thomas J. Falk said, "With
excellent top-line growth in the first quarter and bottom-line results
ahead of our original expectations, we are off to a very good start in
2007. I'm encouraged by the progress K-C teams around the world are making
under our Global Business Plan, successfully implementing our targeted
growth initiatives and driving costs out of the system. As a result, we
delivered a solid improvement in operating profit, overcoming $80 million
of inflation while at the same time funding a stepped-up level of spending
for strategic marketing. Moreover, the underlying strength of our cash flow
enabled us to again boost the dividend and buy back a healthy amount of K-C
stock."
Review of first quarter sales
The increase in first quarter sales was driven by sales volume growth
of more than 3 percent, along with improved net selling prices and product
mix, each approximately 1 percent better than the prior year. In addition,
stronger foreign currencies benefited sales by about 3 percent.
Sales of personal care products advanced 10.6 percent in the first
quarter, highlighted by sales volume growth in excess of 8 percent.
Favorable currency effects of more than 2 percent and better product mix of
1 percent also contributed to the increase in sales, while net selling
prices declined approximately 1 percent.
Personal care sales in North America increased about 8 percent compared
with the first quarter of 2006, driven entirely by higher sales volumes.
Net selling prices were essentially unchanged. Sales volumes for Huggies
diapers and baby wipes grew at a double-digit rate on the strength of
innovations to the brand's high-margin, super-premium offerings in both
categories. Sales momentum for the company's market-leading Pull-Ups
training pants remained strong, lifting sales volumes for the company's
child care brands to a new first quarter record. Although Kotex feminine
care sales volumes were down year-over-year, they were similar to fourth
quarter 2006 levels. In Europe, personal care sales rose more than 12
percent in the quarter, with currency effects accounting for the entire
increase. Sales volumes were up 1 percent, as strong gains for diapers were
mostly offset by lower sales volumes in other areas. Meanwhile, net selling
prices were down approximately 1 percent compared with the prior year.
Positive customer and consumer response to new Huggies Newborn and Natural
Fit diapers and Huggies Little Walkers diaper pants, launched in the second
half of 2006, resulted in 9 percent volume growth for Huggies diapers in
core European markets - the U.K., France, Italy and Spain. In developing
and emerging markets, personal care sales climbed about 16 percent, driven
by a 12 percent increase in sales volumes and currency benefits of 3
percent. Sales growth was particularly strong throughout Latin America, as
well as in China and Russia.
Sales of consumer tissue products rose 6.4 percent versus the first
quarter of 2006, as net selling prices improved 3 percent and changes in
currency exchange rates also benefited sales by 3 percent. Favorable
product mix added about 2 percent to sales; however, sales volumes were
lower by 2 percent.
In North America, first quarter sales of consumer tissue products rose
approximately 4 percent, driven primarily by higher net selling prices, up
4 percent, and improved product mix of 1 percent, partially offset by a 1
percent decrease in sales volumes compared with the prior year. The rise in
net selling prices was mainly attributable to list price increases
implemented during the first half of 2006. Meanwhile, growth in
higher-margin facial tissue and bathroom tissue product offerings enhanced
product mix. Sales volumes for Kleenex facial tissue in the first quarter
increased despite a weaker cold and flu season than in 2006; however,
overall volumes for bathroom tissue and paper towels were down, due in part
to the timing of promotional activities. In Europe, consumer tissue sales
were up about 6 percent. Net selling prices increased about 1 percent,
product mix improved by 2 percent and stronger currencies boosted sales by
10 percent. Sales volumes decreased approximately 7 percent, as the company
has continued to maintain a disciplined approach to pricing and has also
shed low-margin business following the sale or closure of certain
facilities in the region. Consumer tissue sales in developing and emerging
markets rose approximately 11 percent, with growth in all regions,
primarily reflecting higher net selling prices, favorable product mix and
currency benefits.
Sales of K-C Professional & other products were 6.8 percent above the
year-ago quarter. Higher sales volumes and currency effects both
contributed about 3 percent to the increase in sales. Product mix improved
1 percent, while net selling prices for the segment were up slightly, as
U.S. price increases in K-C Professional (KCP) were tempered by lower
prices for other products. As a result of its focused strategy to expand in
the attractive workplace and safety markets, sales of KCP's differentiated
apparel, glove and wiper products in North America and Europe continued to
grow at above the segment average. In addition, KCP continued to capitalize
on opportunities in rapidly-growing international markets, generating
double-digit sales increases in the first quarter in both Asia and Latin
America.
Sales of health care products were up 0.7 percent in the first quarter,
as favorable product mix and currency benefits of 1 percent each were
partially offset by a 1 percent decline in sales volumes. Although most
product categories experienced solid growth, overall sales volumes were
down as a result of the company's decision in the second half of last year
to exit the latex exam glove business. In the near term, additional
manufacturing capacity is needed to satisfy the growing demand for nitrile
exam gloves, particularly new Sterling Nitrile gloves, as customers and
users are transitioning to these more cost-effective, better-performing
solutions faster than expected. As a result, the company has accelerated
plans to bring new capacity on line over the next several months.
Other first quarter operating results
Operating profit was $616 million in the first quarter of 2007,
compared with $420 million in 2006. Excluding charges for the company's
strategic cost reduction plan and related implementation costs, adjusted
operating profit for the quarter increased approximately 6 percent to $669
million from $629 million in the prior year. Top-line growth, along with
FORCE (Focused On Reducing Costs Everywhere) cost savings of $29 million
and strategic cost reductions of $33 million enabled the company to more
than offset about $80 million of cost inflation. The inflationary increases
were driven primarily by higher fiber costs, which were up nearly $60
million versus the first quarter of 2006. As planned, strategic marketing
spending increased at a faster rate than sales, rising nearly $20 million,
principally to support new and improved products and other targeted growth
initiatives.
The company's effective tax rate in the first quarter was 20.6 percent
in 2007 and 27.8 percent in 2006. Excluding the effects of charges for the
company's strategic cost reduction plan and related implementation costs,
as well as net benefits from synthetic fuel partnerships in both years, the
adjusted effective tax rate for the quarter declined to 28.3 percent in
2007 from 29.6 percent in 2006 primarily due to settlements of tax issues
related to prior years. Including the net benefit from synthetic fuel
partnership activities of about $7 million in 2007, the overall effect of
tax initiatives on adjusted earnings per share was less than 1 cent
favorable versus guidance for the quarter.
As previously disclosed, the company adopted FASB Interpretation No.
48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statement 109 (FIN 48) in the first quarter. The adoption of FIN 48
resulted in an increase in income tax liabilities and a corresponding
charge to retained earnings of approximately $34 million.
Kimberly-Clark's share of net income of equity companies in the first
quarter increased 15 percent to $45 million in 2007 from $39 million in
2006, due mainly to higher net income at Kimberly-Clark de Mexico, S.A.B.
de C.V. (KCM). The increase was achieved despite the absence of earnings
from pulp and paper operations that were sold in the fourth quarter of last
year, driven by continued strong performance of KCM's consumer business as
well as a lower level of currency transaction losses than in 2006.
Competitive improvement initiatives - update on strategic cost
reduction plan
The company's strategic cost reduction plan is part of a comprehensive,
multi-year effort announced in July 2005 to further improve its competitive
position. The plan calls for streamlining manufacturing and administrative
operations primarily in North America and Europe, with expected annual
savings of at least $350 million by 2009 earmarked for reinvestment in
targeted growth opportunities and to improve key capabilities as well as to
support margin improvement.
During the first quarter, the company continued to successfully execute
planned cost reduction activities, incurring pretax charges totaling $53
million (approximately $23 million after tax) for the plan and related
incremental implementation costs. Major components of the charges were for
consolidating consumer tissue operations in Europe and infant and child
care operations in North America, as well as streamlining administrative
operations in North America and Europe, partially offset by gains on the
sale of several facilities. As noted above, year-over-year savings of $33
million were realized in the quarter, putting the company in good position
to meet or potentially exceed its target to save $75 to $100 million for
the full year.
To date, employees have been notified about workforce reductions and
other actions at 22 of the approximately 24 facilities slated for sale,
closure or streamlining as part of the cost reduction plan, and more than
75 percent of the total charges expected through the end of 2008
(approximately $950 million to $1.0 billion before tax, or $665 to $700
million after tax) have now been recorded.
Cash flow and balance sheet
Cash provided by operations in the first quarter increased to $525
million from $519 million in 2006, reflecting higher cash earnings
primarily offset by an increased investment in working capital compared
with the year-ago quarter. The change in working capital was mainly
attributable to payment of accrued liabilities. Capital spending for the
quarter was $282 million compared with $179 million in the prior year. As
previously announced, capital spending in 2007 is expected to total $900
million to $1 billion. At March 31, 2007, total debt and preferred
securities was $4.4 billion, essentially the same level as the end of 2006.
During the first quarter, the company repurchased approximately 2.2
million shares of its common stock at a cost of $150 million, in line with
its target to spend $600 to $800 million for share repurchases for the full
year.
Outlook
Commenting on the outlook, Falk said, "Our first quarter results give
us confidence that we will continue to execute our Global Business Plan
well. We have good momentum and plans in place that should enable us to
generate solid improvement in sales and earnings for the balance of the
year. Although escalation in fiber costs is driving a higher level of
inflation than we assumed coming into the year, we expect to offset the
additional cost pressure with continued strong business performance. At the
same time, we will maintain our commitment to increase customer development
and strategic marketing spending to support our growth initiatives and
further improve brand equity. Finally, we will remain focused on increasing
cash flow from operations, deploying our cash wisely and improving returns
for our shareholders.
"Overall, we remain comfortable that we will deliver top- and
bottom-line growth in 2007 in line with the long-term objectives of our
Plan. Specifically, we expect adjusted earnings per share for the year will
be in a range of $4.10 to $4.20 per share, up 5 to 8 percent versus $3.90
per share in 2006.
"As for the second quarter, we anticipate adjusted earnings per share
will be similar to the first quarter, in a range of $1.01 to $1.03 per
share. This will represent improvement of 6 to 8 percent versus the
year-ago quarter, consistent with the rate of growth we're targeting for
the full year."
Non-GAAP financial measures
This press release and the accompanying tables include the following
financial measures that have not been calculated in accordance with
accounting principles generally accepted in the U.S., or GAAP, and are
therefore referred to as non-GAAP financial measures:
-- adjusted earnings and earnings per share
-- adjusted operating profit
-- adjusted effective tax rate
These non-GAAP financial measures exclude certain items that are
included in the company's earnings, earnings per share, operating profit
and effective tax rate calculated in accordance with GAAP. A detailed
explanation of each of the adjustments to the comparable GAAP financial
measures is given below. In accordance with the requirements of Regulation
G, reconciliations of the non- GAAP financial measures to the comparable
GAAP financial measures are attached.
The company provides these non-GAAP financial measures as supplemental
information to our GAAP financial measures. Management and the company's
Board of Directors use adjusted earnings, adjusted earnings per share and
adjusted operating profit to (a) evaluate the company's historical and
prospective financial performance and its performance relative to its
competitors, (b) allocate resources and (c) measure the operational
performance of the company's business units and their managers.
Additionally, the Management Development and Compensation Committee of the
company's Board of Directors uses these non-GAAP financial measures when
setting and assessing achievement of incentive compensation goals. These
goals are based, in part, on the company's adjusted earnings per share and
improvement in the company's return on invested capital determined by
excluding the charges that are used in calculating these non-GAAP financial
measures.
In addition, Kimberly-Clark management believes that investors'
understanding of the company's performance is enhanced by including these
non- GAAP financial measures as a reasonable basis for comparing the
company's ongoing results of operations and for understanding the company's
effective tax rate. Many investors are interested in understanding the
performance of our businesses by comparing our results from ongoing
operations from one period to the next. By providing the non-GAAP financial
measures, together with the reconciliations, we believe we are enhancing
investors' understanding of our businesses and our results of operations,
as well as assisting investors in evaluating how well the company is
executing the material changes to our enterprise contemplated by the
strategic cost reduction plan. Also, many financial analysts who follow our
company focus on and publish both historical results and future projections
based on non-GAAP financial measures. We believe that it is in the best
interests of our investors for us to provide this information to analysts
so that those analysts accurately report the non-GAAP financial
information.
We calculate adjusted earnings, adjusted earnings per share, adjusted
operating profit and adjusted effective tax rate by excluding from the
comparable GAAP measure (i) charges related to our strategic cost reduction
plan for streamlining the company's operations, (ii) certain incremental
implementation costs relating to our strategic cost reduction plan, and
(iii) the net effect of the company's investment in synthetic fuel
partnerships on the company's effective tax rate. Each of these adjustments
and the basis for such adjustments are described below:
-- Strategic cost reduction plan. In July 2005, the company authorized a
strategic cost reduction plan aimed at streamlining manufacturing and
administrative operations, primarily in North America and Europe. The
strategic cost reduction plan commenced in the third quarter of 2005
and is expected to be substantially completed by December 31, 2008. At
the time we announced the plan, we advised investors that we would
report our earnings, earnings per share and operating profit excluding
the strategic cost reduction plan charges so that investors could
compare our operating results without the plan charges from period to
period and could assess our progress in implementing the plan.
Management does not consider these charges to be part of our earnings
from ongoing operations for purposes of evaluating the performance of
its business units and their managers and excludes these charges when
making decisions to allocate resources among its business units.
-- Implementation costs. In connection with our strategic cost reduction
plan, the company will incur incremental implementation costs related
to the transfer of certain administrative processes to third party
providers. These costs will be incurred primarily in the first six
months of 2007. Management intends to exclude these implementation
costs from our earnings from ongoing operations for purposes of
evaluating the performance of our business units and their managers and
to exclude these costs when making decisions to allocate resources
among its business units.
-- Adjusted effective tax rate. In the analysis of its effective tax
rate, the company excludes the effects of charges for the strategic
cost reduction plan and related implementation costs, as well as net
benefits from the company's investment in synthetic fuel partnerships.
We believe that adjusting for these items provides improved insight
into the tax effects of our ongoing business operations.
These non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for the comparable GAAP measures. There are
limitations to these non-GAAP financial measures because they are not
prepared in accordance with GAAP and they may not be comparable to
similarly titled measures of other companies due to potential differences
in methods of calculation and items being excluded. The company compensates
for these limitations by using these non-GAAP financial measures as
supplements to the GAAP measures and by providing the reconciliations of
the non-GAAP and comparable GAAP financial measures. The non-GAAP financial
measures should be read only in conjunction with the company's consolidated
financial statements prepared in accordance with GAAP.
Conference call
A conference call to discuss this news release and other matters of
interest to investors and analysts will be held at 9 a.m. (CDT) today. The
conference call will be simultaneously broadcast over the World Wide Web.
Stockholders and others are invited to listen to the live broadcast or a
playback, which can be accessed by following the instructions set out in
the Investors section of the company's Web site (http://www.kimberly-clark.com).
About Kimberly-Clark
Kimberly-Clark and its well-known global brands are an indispensable
part of life for people in more than 150 countries. Every day, 1.3 billion
people - nearly a quarter of the world's population - trust K-C brands and
the solutions they provide to enhance their health, hygiene and well-being.
With brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend,
Kimberly- Clark holds No. 1 or No. 2 share positions in more than 80
countries. To keep up with the latest K-C news and to learn more about the
company's 135-year history of innovation, visit http://www.kimberly-clark.com.
Copies of Kimberly-Clark's Annual Report to Stockholders and its proxy
statements and other SEC filings, including Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, are made
available free of charge on the company's Web site on the same day they are
filed with the SEC. To view these filings, visit the Investors section of
the company's Web site.
Certain matters contained in this news release concerning the business
outlook, including new product introductions, cost savings and
acquisitions, anticipated costs and benefits related to the Competitive
Improvement Initiatives, anticipated financial and operating results,
strategies, contingencies and anticipated transactions of the company
constitute forward- looking statements and are based upon management's
expectations and beliefs concerning future events impacting the company.
There can be no assurance that these future events will occur as
anticipated or that the company's results will be as estimated. For a
description of certain factors that could cause the company's future
results to differ materially from those expressed in any such
forward-looking statements, see Item 1A of the company's Annual Report on
Form 10-K for the year ended December 31, 2006 entitled "Risk Factors."
Investor Relations contacts: Mike Masseth, 972-281-1478, mmasseth@kcc.com
Paul Alexander, 972-281-1440,
palexander@kcc.com
Media Relations contact: Dave Dickson, 972-281-1481, ddickson@kcc.com
KIMBERLY-CLARK CORPORATION
CONSOLIDATED INCOME STATEMENT
PERIODS ENDED MARCH 31
(Millions of dollars, except per share amounts)
Three Months
Ended March 31
2007 2006 Change
Net Sales $4,385.3 $4,067.9 + 7.8%
Cost of products sold 3,033.0 2,914.8 + 4.1%
Gross Profit 1,352.3 1,153.1 +17.3%
Marketing, research and general
expenses 732.6 712.5 + 2.8%
Other (income) expense, net 3.6 20.2 -82.2%
Operating Profit 616.1 420.4 +46.6%
Nonoperating expense (27.6) (15.8) +74.7%
Interest income 6.6 6.4 + 3.1%
Interest expense (50.9) (54.3) - 6.3%
Income Before Income Taxes
and Equity Interests 544.2 356.7 +52.6%
Provision for income taxes (112.1) (99.3) +12.9%
Income Before Equity Interests 432.1 257.4 +67.9%
Share of net income of equity
companies 45.0 39.0 +15.4%
Minority owners' share of
subsidiaries' net income (25.1) (21.3) +17.8%
Net Income $ 452.0 $ 275.1 +64.3%
Net Income Per Share Basis
- Diluted $ .98 $ .60 +63.3%
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED MARCH 31
(Millions of dollars, except per share amounts)
Notes:
1. Charges for the Strategic Cost Reductions are included in the
Consolidated Income Statement as follows:
Three Months
Ended March 31
2007 2006
Cost of products sold $ 41.8 $ 155.7
Marketing, research and general expenses 8.1 42.0
Other (income) and expense, net (9.3) 10.9
Provision for income taxes (25.6) (53.4)
Strategic Cost Reductions after taxes 15.0 155.2
Minority interest - (1.6)
Net Charges $ 15.0 $ 153.6
In addition, charges of $12.2 million in 2007 for the related
implementation costs are included in marketing, research and general
expenses.
2. Other Information:
Three Months
Ended March 31
2007 2006
Cash Dividends Declared
Per Share $ .53 $ .49
March 31
Common Shares (Millions) 2007 2006
Outstanding, as of 455.3 460.0
Average Diluted for:
Three Months Ended 459.9 461.8
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED MARCH 31
(Millions of dollars)
Supplemental Financial Information:
Preliminary Balance Sheet Data:
March 31 December 31
2007 2006
Cash and cash equivalents $ 342.0 $ 360.8
Accounts receivable 2,296.7 2,336.7
Inventories 2,085.8 2,004.5
Total assets 17,181.6 17,067.0
Accounts payable 1,540.1 1,530.8
Debt payable within one year 1,288.8 1,326.4
Total current liabilities 4,613.0 5,015.8
Long-term debt 2,277.0 2,276.0
Preferred securities of subsidiary 802.6 793.4
Stockholders' equity 6,355.0 6,097.4
Three Months
Ended March 31
Preliminary Cash Flow Data: 2007 2006
Cash provided by operations $ 524.5 $ 518.9
Cash used for investing $ (198.1) $ (143.7)
Cash used for financing $ (347.8) $ (353.2)
Depreciation and amortization $ 214.6 $ 261.0
Capital spending $ 281.8 $ 179.1
Cash dividends paid $ 224.1 $ 208.6
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED MARCH 31
Description of Business Segments
The Corporation is organized into operating segments based on product
groupings. These operating segments have been aggregated into four
reportable global business segments: Personal Care; Consumer Tissue; K-C
Professional & Other; and Health Care. The reportable segments were
determined in accordance with how the Corporation's executive managers
develop and execute the Corporation's global strategies to drive growth and
profitability of the Corporation's worldwide Personal Care, Consumer
Tissue, K-C Professional & Other, and Health Care operations. These
strategies include global plans for branding and product positioning,
technology, research and development programs, cost reductions including
supply chain management, and capacity and capital investments for each of
these businesses. Segment management is evaluated on several factors,
including operating profit. Segment operating profit excludes other income
and (expense), net; income and expense not associated with the business
segments; and the costs of corporate decisions related to the Strategic
Cost Reductions. Corporate & Other includes the costs of the Strategic Cost
Reductions.
The principal sources of revenue in each of our global business
segments are described below.
The Personal Care segment manufactures and markets disposable diapers,
training and youth pants and swimpants; baby wipes; feminine and
incontinence care products; and related products. Products in this segment
are primarily for household use and are sold under a variety of brand
names, including Huggies, Pull-Ups, Little Swimmers, GoodNites, Kotex,
Lightdays, Depend, Poise and other brand names.
The Consumer Tissue segment manufactures and markets facial and
bathroom tissue, paper towels, napkins and related products for household
use. Products in this segment are sold under the Kleenex, Scott,
Cottonelle, Viva, Andrex, Scottex, Hakle, Page and other brand names.
The K-C Professional & Other segment manufactures and markets facial
and bathroom tissue, paper towels, napkins, wipers and a range of safety
products for the away-from-home marketplace. Products in this segment are
sold under the Kimberly-Clark, Kleenex, Scott, WypAll, Kimtech, Kleenguard
and Kimcare brand names.
The Health Care segment manufactures and markets health care products
such as surgical gowns, drapes, infection control products, sterilization
wrap, disposable face masks and exam gloves, respiratory products and other
disposable medical products. Products in this segment are sold under the
Kimberly-Clark, Ballard and other brand names.
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED MARCH 31
SELECTED BUSINESS SEGMENT DATA
(Millions of dollars)
Three Months
Ended March 31
2007 2006 Change
NET SALES:
Personal Care $1,797.6 $1,625.0 +10.6%
Consumer Tissue 1,593.1 1,497.2 + 6.4%
K-C Professional & Other 697.4 652.8 + 6.8%
Health Care 302.7 300.5 + .7%
Corporate & Other 8.0 9.0 -11.1%
Intersegment Sales (13.5) (16.6) -18.7%
Consolidated $4,385.3 $4,067.9 + 7.8%
OPERATING PROFIT:
Personal Care $ 347.2 $ 300.2 +15.7%
Consumer Tissue 207.1 209.0 - .9%
K-C Professional & Other 108.7 104.5 + 4.0%
Health Care 55.6 51.3 + 8.4%
Corporate & Other (98.9) (224.4) -55.9%
Other income and (expense), net (3.6) (20.2) -82.2%
Consolidated $ 616.1 $ 420.4 +46.6%
Note: Corporate & Other and Other income and (expense), net, include the
following amounts of pre-tax charges for the Strategic Cost
Reductions. In 2007, Corporate & Other also includes the related
implementation costs.
Three Months
Ended March 31
2007 2006
Corporate & Other $ (62.1) $ (197.7)
Other income and (expense), net 9.3 (10.9)
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED MARCH 31
SELECTED BUSINESS SEGMENT DATA
PERCENTAGE CHANGE IN NET SALES VERSUS PRIOR YEAR
Three Months Ended March 31, 2007
Net Mix/
Total Volume Price Other(1) Currency
Consolidated 7.8 3 1 1 3
Personal Care 10.6 8 (1) 2 2
Consumer Tissue 6.4 (2) 3 2 3
K-C Professional & Other 6.8 3 - 1 3
Health Care .7 (1) - 1 1
(1) Mix/Other includes rounding.
KIMBERLY-CLARK CORPORATION
PERIODS ENDED MARCH 31
(Millions of dollars, except per share amounts)
NON-GAAP RECONCILIATION SCHEDULES
The tables on the following pages present the reconciliation of
non-GAAP financial measures to GAAP financial measures.
EARNINGS SUMMARY:
Three Months Ended March 31
2007 2006
Diluted Diluted
Income Earnings Income Earnings
(Expense) Per Share (Expense) Per Share
Adjusted Earnings $ 474.7 $ 1.03 $ 428.7 $ .93
Adjustments for:
Strategic Cost Reduction
charges (15.0) (.03) (153.6) (.33)
Implementation costs (7.7) (.02) - -
Net Income $ 452.0 $ .98 $ 275.1 $ .60
OPERATING PROFIT SUMMARY:
Three Months
Ended March 31
2007 2006
Adjusted Operating Profit $ 668.9 $ 629.0
Adjustments for:
Strategic Cost Reduction
charges (40.6) (208.6)
Implementation costs (12.2) -
Operating Profit $ 616.1 $ 420.4
KIMBERLY-CLARK CORPORATION
PERIODS ENDED MARCH 31
(Millions of dollars)
Effective Income Tax Rate Reconciliation - Adjustments(1) and Synthetic
Fuel Partnership Activities:
Three Months Ended March 31, 2007
Synthetic Fuel
As Excluding Effect of Excluding
Reported Adjustments(1) Adjustments(1) Activities Activities
Income Before
Income Taxes $544.2 $ (52.8) $ 597.0 $ (27.6) $ 624.6
Provision for
Income Taxes 112.1 (30.1) 142.2 (34.7) 176.9
Net Synthetic
Fuel Benefit $ 7.1
Effective Income
Tax Rate 20.6%
Adjusted Effective
Income Tax Rate 23.8% 28.3%
Three Months Ended March 31, 2006
Synthetic Fuel
As Excluding Effect of Excluding
Reported Adjustments(1) Adjustments(1) Activities Activities
Income Before
Income Taxes $356.7 $ (208.6) $ 565.3 $ (15.8) $ 581.1
Provision for
Income Taxes 99.3 (53.4) 152.7 (19.5) 172.2
Net Synthetic
Fuel Benefit $ 3.7
Effective Income
Tax Rate 27.8%
Adjusted Effective
Income Tax Rate 27.0% 29.6%
(1) Charges for Strategic Cost Reductions and related implementation costs
in 2007 and Strategic Cost Reductions in 2006.
KIMBERLY-CLARK CORPORATION
PERIODS ENDED MARCH 31
OUTLOOK FOR 2007
Estimated Full-Year 2007 Diluted Earnings Per Share:
Adjusted Earnings Per Share $4.10 - $4.20
Strategic Cost Reductions (.31) - (.28)
Implementation costs (.04) - (.04)
Earnings Per Share - Diluted $3.75 - $3.88
Estimated Second Quarter 2007 Diluted Earnings Per Share:
Adjusted Earnings Per Share $1.01 - $1.03
Strategic Cost Reductions (.09) - (.07)
Implementation costs (.02) - (.02)
Earnings Per Share - Diluted $.90 - $.94
SOURCE Kimberly-Clark Corporation
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Related links:
http://www.kimberly-clark.com/
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20070423/CLM053
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Investor Relations: Mike Masseth,
+1-972-281-1478, mmasseth@kcc.com, Paul Alexander,
+1-972-281-1440, palexander@kcc.com, Media Relations: Dave
Dickson, +1-972-281-1481, ddickson@kcc.com, both of Kimberly-
Clark Corporation
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