3Q '05 Sales Rose 6 Percent to $4.0 Billion; EPS Before Unusual Items Were 95
Cents, an Increase of 9 Percent vs. EPS From Continuing Operations in 2004
Company Expects Full Year 2005 EPS Before Unusual Items to Be Within the
Range of its Previous Guidance
DALLAS, Oct. 24 /PRNewswire-FirstCall/ -- Kimberly-Clark Corporation
(NYSE: KMB) today reported that sales in the third quarter of 2005 were $4.0
billion, an increase of 5.8 percent over the prior year and a new quarterly
record. The improvement was driven by volume growth of about 4 percent along
with currency benefits of nearly 2 percent. Diluted net income of 68 cents
per share decreased 22 percent compared with income from continuing operations
of 87 cents per share in 2004. However, excluding charges related to
competitive improvement initiatives for streamlining the company's operations,
earnings before unusual items in the third quarter of 2005 rose 9 percent to
95 cents per share. This was in line with the company's previous guidance (94
to 96 cents per share) despite higher-than-expected energy costs and direct
expenses from Hurricane Katrina that totaled approximately $15 million before
tax, or 2 cents per share.
In the third quarter of 2004, reported net income of 89 cents per share
included 2 cents per share from discontinued operations, representing the
results of the company's former fine paper and technical paper businesses that
were part of the Neenah Paper spin-off to shareholders on November 30, 2004.
Chairman and Chief Executive Officer Thomas J. Falk attributed the
improvement in third quarter results to continued solid execution of the
company's Global Business Plan. He said, "K-C teams are focused on building
and extending our brands, reducing costs and improving returns on invested
capital. In combination, these strategies are enabling us to generate
profitable top-line growth, deliver bottom-line results in line with our
objectives and return significant amounts of cash to our shareholders. I am
proud of what our teams have accomplished this quarter, particularly in light
of the inflationary pressures that have impacted our businesses."
The company noted that sales for the quarter were about 7 percent above
the prior year excluding sales in 2004 from the pulp operations that were also
divested in the Neenah Paper spin-off. Highlights of the 4 percent increase
in sales volumes included continued strength in developing and emerging
markets along with double-digit growth for key personal care and consumer
tissue brands in North America and for diapers in Europe. In addition to
currency effects of 2 percent, higher net selling prices boosted sales by
approximately 1 percent.
The top-line growth, continued successful cost and tax savings initiatives
and the company's ongoing share repurchase program were key factors
contributing to the 9 percent improvement in third quarter earnings per share
before unusual items. In achieving these results, the company absorbed
inflation in key cost components totaling approximately $90 million and funded
more than $25 million of additional marketing and research spending for new
and improved products.
Review of third quarter sales by segment
Sales of personal care products rose 7.5 percent in the third quarter, on
the strength of a 6 percent increase in sales volumes and currency benefits of
3 percent. Net selling prices declined about 1 percent, as response to
competitive activity in Europe, primarily for diapers, was partially offset by
higher prices in Asia and Latin America.
Personal care sales in North America increased approximately 3 percent
versus the prior year. Sales volumes advanced about 5 percent, while product
mix declined 2 percent. Net selling prices were unchanged year-over-year, an
improvement versus the 3 percent decline in the second quarter. Price
increases for the company's infant, child and incontinence care products in
the U.S. were implemented as planned during the third quarter. Leading
contributors to the overall volume growth included infant care, with a solid
gain of 7 percent, and incontinence care, baby wipes and toiletries, each
delivering continued double-digit growth. In Europe, sales were down 1
percent. Sales volumes rose 7 percent, due mainly to a 10 percent increase
for diapers stemming from the brand and product innovation strategies
implemented late last year. The volume gains, however, were offset by an 8
percent decline in selling prices, as competition in the diaper category
remained intense. In developing and emerging markets, personal care sales
climbed 18 percent, driven by widespread volume growth and currency benefits,
along with higher selling prices and improved product mix.
Sales of consumer tissue products grew 8.1 percent. Sales volumes
improved approximately 4 percent, while net selling prices and currency
exchange rates were both about 2 percent better.
In North America, sales of consumer tissue products advanced more than 10
percent, as net selling prices and sales volumes both increased 5 percent
compared with the third quarter of 2004. Volume growth was particularly
strong in bathroom tissue behind innovative new products and packaging for the
Cottonelle and Scott brands. Scott bathroom tissue volumes rose at a
double-digit rate for the second consecutive quarter, benefiting from the
successful launch of the new Scott Extra Soft line extension. In Europe,
consumer tissue sales decreased 3 percent. Sales volumes declined nearly 2
percent and net selling prices were about 1 percent lower in continued
competitive market conditions. Consumer tissue sales in developing and
emerging markets expanded 18 percent, with higher sales volumes, including
double-digit growth in Asia, currency and product mix all contributing to the
improvement.
Sales of business-to-business products decreased 5.3 percent in the
quarter, but were about 3 percent greater excluding 2004 sales from pulp
operations that were part of the Neenah Paper spin-off. Sales volumes were up
1 percent during the quarter, with K-C Professional and Health Care posting
gains of 3 percent and 2 percent, respectively. Currency effects also
positively affected sales comparisons by approximately 1 percent. Net selling
prices and product mix improved slightly, driven mainly by gains in K-C
Professional's North American operations. Health Care prices were down about
1 percent globally.
Other third quarter operating results
Operating profit before unusual items in the third quarter of 2005 was
$633 million, approximately 3 percent greater than the prior year, as
continued top-line growth and cost savings helped offset approximately $90
million of cost inflation. Having generated gross cost savings of more than
$45 million for the quarter and nearly $150 million through nine months, the
company is on track to meet its full year objective for savings of at least
$200 million. Cost inflation in the third quarter included $50 million for
raw materials other than fiber, driven by increases in the cost of polymer
resins, superabsorbents and other oil-based materials, $20 million in energy
costs and $25 million in distribution costs, offset by slightly lower fiber
costs. The year-over-year change in operating profit was also affected by $20
million of costs in the third quarter of 2004 to improve the efficiency of the
company's diaper operations.
The company's effective tax rate in the third quarter of 2005 was 17.4
percent. Excluding unusual items, however, the effective tax rate for the
quarter was 19.7 percent versus 23.9 percent in the prior year. The lower
rate was due primarily to income tax benefits from the company's ownership
interest in synthetic fuel partnership activities which, net of related
nonoperating expenses, improved third quarter net income by approximately $13
million in 2005 compared with about $7 million in 2004. The effective tax
rate in the third quarter before the effects of the synthetic fuel activities
in both years and excluding the unusual items in 2005 was 27.7 percent
compared with 28.5 percent in 2004.
Kimberly-Clark's share of net income of equity companies in the third
quarter rose 5 percent to $33 million, driven by higher net income at
Kimberly-Clark de Mexico, S.A. de C.V. KCM achieved double digit growth in
sales and operating profit for the third straight quarter, paced by continued
strong results in its consumer business. Its bottom-line results, however,
were negatively impacted by currency transaction losses that reduced Kimberly-
Clark's share of KCM's net income by approximately $5 million.
Cash flow and balance sheet
Cash provided by operations was $553 million in the third quarter compared
with $734 million in 2004. The decrease was driven primarily by the timing of
income tax payments. Capital spending in the third quarter was $190 million,
up from $104 million in the prior year. Capital spending of $452 million for
the first nine months of 2005 was in line with the company's spending target
of $650-$700 million for the full year. At September 30, 2005, total debt and
preferred securities was $4.3 billion, up slightly from $4.2 billion at the
end of 2004.
During the third quarter, the company repurchased 8.0 million shares of
its common stock at a cost of $499 million, bringing the year-to-date total to
15.7 million shares at a cost of $1.0 billion. The company reaffirmed its
target to buy back $1.5 billion worth of its stock in 2005. Share repurchases
have resulted in a 4 percent reduction in the average number of outstanding
shares versus the year-ago quarter, with a corresponding benefit on earnings
per share comparisons.
Outlook
Commenting on the outlook, Falk said, "We are confident that we will
continue to execute our Global Business Plan well and generate solid top-line
growth and additional cost savings over the balance of the year. Net sales in
the fourth quarter should benefit from a full quarter's worth of the price
increases implemented during the third quarter for our diaper, pant and
incontinence products in the U.S. as well as recent price increases for K-C
Professional products in North America. At the same time, we expect business
conditions will remain very challenging, as costs for resin and other
oil-based materials, energy and distribution have risen following Hurricanes
Katrina and Rita. In total, we expect these key cost components to increase
more than $30 million versus the third quarter, a drag equivalent to
approximately 5 cents per share.
"All in all, we expect earnings before unusual items in the fourth quarter
will be in a range of 94 to 96 cents per share, or similar to the third
quarter, despite the recent, unanticipated escalation in our costs.
"As for the year, we remain comfortable that earnings per share before
unusual items in 2005 will be within the range of our previous guidance of
$3.77 to $3.83, although most likely toward the lower end of that range. With
this level of earnings, we will deliver improvement of 6 to 8 percent versus
earnings from continuing operations of $3.55 per share in 2004, consistent
with our long-term objective for growth in the mid to high single-digits."
Competitive improvement initiatives
The competitive improvement initiatives announced in July 2005 are focused
on building and growing those businesses that will yield improved margins and
higher returns on invested capital. During the third quarter, the company
made substantial progress implementing the new strategic cost reductions that
will support these targeted growth investments. As previously announced, the
company plans to reduce costs by streamlining manufacturing and administrative
operations primarily in North America and Europe, creating an even more
competitive platform for growth and margin improvement.
Pretax charges totaling $168 million (approximately $126 million after
tax) related to these cost reduction initiatives were recorded in the third
quarter. Most of the pretax charges were noncash, primarily for asset
impairments or write-offs and accelerated depreciation. Major components of
the charges were for consolidation of the company's North Atlantic feminine
and adult care operations, consolidation of health care operations within
North America and cost structure improvements in Europe.
To date, employees have been notified about workforce reductions and other
actions at 10 of the 15 facilities slated for sale, closure or streamlining as
part of the initial phase of the cost reduction initiatives. As previously
announced, the initial phase should be complete by mid-2007, with pretax
charges amounting to $500 to $550 million ($355 to $390 million after tax).
Including subsequent phases through the end of 2008, the company expects to
incur cumulative pretax charges of $900 million to $1.1 billion ($625 to $775
million after tax) that will yield annual pretax savings of $300 to $350
million by 2009. Anticipated savings of $5 to $10 million in 2005 should
increase substantially in 2006 as the initiatives are executed and more
headcount reductions begin to take place.
The company will continue to report on the progress of these strategic
cost reduction activities on a quarterly basis and provide information about
future phases as specific projects are approved and implemented.
Year to date results
For the first nine months of 2005, sales of $11.9 billion were up about 6
percent from $11.2 billion in the prior year, driven by a 4 percent increase
in sales volumes and favorable currency effects of 3 percent, offset by the
divestiture of pulp operations. Operating profit before unusual items rose
more than 2 percent to $1,906 million in 2005 versus $1,865 million in 2004.
For the year to date, diluted earnings per share before unusual items were
$2.83 in 2005 versus diluted earnings per share from continuing operations of
$2.63 in 2004, an improvement of nearly 8 percent. Including unusual items in
2005 and net income from discontinued operations in 2004, diluted net income
through the first nine months was $2.49 per share in 2005 and $2.70 per share
in 2004.
Non-GAAP financial measures
Certain financial measures contained in this press release exclude prior
year net sales of the pulp operations which were spun-off in the fourth
quarter of 2004, charges related to competitive improvement initiatives for
streamlining the company's operations, incremental tax expenses arising out of
repatriation of earnings of foreign subsidiaries under the American Jobs
Creation Act and the effects of the company's synthetic fuel activities.
Financial measures which exclude those items have not been determined in
accordance with generally accepted accounting principles and are therefore
"non-GAAP" financial measures.
Kimberly-Clark management believes that investors' understanding of the
company's performance is enhanced by disclosing these non-GAAP financial
measures as a reasonable basis for comparison of the company's ongoing results
of operations. The attached Non-GAAP Reconciliation Schedules provide
reconciliations of these non-GAAP financial measures to the most closely
analogous measure determined in accordance with generally accepted accounting
principles.
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 -
- almost 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 the No. 1 or No. 2 share position in more than 80 countries. To
keep up with the latest K-C news and to learn more about the company's 133-
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 savings 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 the section of Part I, Item 1 of
the company's Annual Report on Form 10-K for the year ended December 31, 2004
entitled "Factors That May Affect Future Results."
KIMBERLY-CLARK CORPORATION
(Millions, except per share amounts)
EARNINGS SUMMARY:
The following tables present the reconciliation of a non-GAAP financial
measure to reported GAAP net income.
Three Months Ended September 30, 2005:
Diluted
Income Earnings
(Expense) Per Share
Earnings Before Unusual Items $ 451.7 $ .95
Charges for Unusual Items:
Competitive Improvement Initiatives (126.4) (.27)
Net Income $ 325.3 $ .68
Nine Months Ended September 30, 2005:
Earnings Before Unusual Items $1,358.4 $ 2.83
Charges for Unusual Items:
Competitive Improvement Initiatives (126.4) (.26)
Income Taxes on American Jobs
Creation Act Dividends (34.8) (.07)
Rounding - (.01)
Net Income $1,197.2 $ 2.49
There were no unusual items in 2004.
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED SEPTEMBER 30
(Millions, except per share amounts)
Three Months
Ended September 30
2005 2004 Change
Net Sales $4,000.8 $3,783.0 + 5.8%
Cost of products sold 2,844.4 2,543.9 + 11.8%
Gross Profit 1,156.4 1,239.1 - 6.7%
Marketing, research and general
expenses 679.5 613.6 + 10.7%
Other (income) expense, net 12.3 8.6 + 43.0%
Operating Profit 464.6 616.9 - 24.7%
Nonoperating expense (43.2) (26.4) + 63.6%
Interest income 7.4 4.7 + 57.4%
Interest expense (48.0) (41.1) + 16.8%
Income Before Income Taxes,
Equity Interests and
Discontinued Operations 380.8 554.1 - 31.3%
Provision for income taxes (66.3) (132.7) - 50.0%
Share of net income of equity
companies 33.0 31.3 + 5.4%
Minority owners' share of
subsidiaries' net income (22.2) (18.8) + 18.1%
Income from continuing operations 325.3 433.9 - 25.0%
Income from discontinued operations,
net of income taxes - 7.4 N.M.
Net Income $ 325.3 $ 441.3 - 26.3%
Diluted Per Share Basis:
Continuing operations $ .68 $ .87 - 21.8%
Discontinued operations - .02 N.M.
Net Income $ .68 $ .89 - 23.6%
Discontinued operations represents the results of the Corporation's
former fine paper and technical paper businesses that were part of the
November 30, 2004 Neenah Paper spin-off.
N.M. - Not meaningful
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED SEPTEMBER 30
(Millions, except per share amounts)
Notes (Three Months):
1. In 2005, charges of $126.4 million for unusual items are included as
follows:
Cost of products sold $160.5
Marketing, research & general expenses 7.5
Provision for income taxes (41.6)
Total charges $126.4
2. The Corporation accounts for stock-based compensation using the
intrinsic-value method. The following presents pro forma information
about net income and earnings per share as if the Corporation had
applied fair value expense recognition to all employee stock options
granted.
(Millions of dollars, except per share amounts) 2005 2004
Pro forma net income $318.0 $431.7
Pro forma earnings per share - diluted $ .67 $ .87
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED SEPTEMBER 30
(Millions, except per share amounts)
Nine Months
Ended September 30
2005 2004 Change
Net Sales $11,893.7 $11,181.8 + 6.4%
Cost of products sold 8,108.1 7,432.2 + 9.1%
Gross Profit 3,785.6 3,749.6 + 1.0%
Marketing, research and general
expenses 2,021.5 1,847.0 + 9.4%
Other (income) expense, net 25.7 37.6 -31.6%
Operating Profit 1,738.4 1,865.0 - 6.8%
Nonoperating expense (137.4) (116.6) +17.8%
Interest income 21.7 12.7 +70.9%
Interest expense (138.2) (120.5) +14.7%
Income Before Income Taxes,
Equity Interests and
Discontinued Operations 1,484.5 1,640.6 - 9.5%
Provision for income taxes (324.3) (358.2) - 9.5%
Share of net income of equity
companies 99.4 92.1 + 7.9%
Minority owners' share of
subsidiaries' net income (62.4) (53.9) +15.8%
Income from continuing operations 1,197.2 1,320.6 - 9.3%
Income from discontinued operations,
net of income taxes - 34.3 N.M.
Net Income $ 1,197.2 $ 1,354.9 -11.6%
Diluted Per Share Basis:
Continuing operations $ 2.49 $ 2.63 - 5.3%
Discontinued operations - .07 N.M.
Net Income $ 2.49 $ 2.70 - 7.8%
Discontinued operations represents the results of the Corporation's
former fine paper and technical paper businesses that were part of the
November 30, 2004 Neenah Paper spin-off.
N.M. - Not meaningful
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED SEPTEMBER 30
(Millions, except per share amounts)
Notes (Nine Months):
1. In 2005, charges of $161.2 million for unusual items are included as
follows:
Cost of products sold $160.5
Marketing, research & general expenses 7.5
Provision for income taxes (41.6)
$126.4
Provision for income taxes - American Jobs
Creation Act Dividends 34.8
Total charges $161.2
2. The Corporation accounts for stock-based compensation using the
intrinsic-value method. The following presents pro forma information
about net income and earnings per share as if the Corporation had
applied fair value expense recognition to all employee stock options
granted.
(Millions of dollars, except per share amounts) 2005 2004
Pro forma net income $1,168.4 $1,327.3
Pro forma earnings per share - diluted $ 2.43 $ 2.64
3. OTHER INFORMATION:
Nine Months Ended
September 30
2005 2004
Cash Dividends Declared
Per Share $ 1.35 $ 1.20
September 30
Common Shares (Millions) 2005 2004
Outstanding As Of 469.8 489.0
Average Diluted for:
Three Months Ended 476.8 497.1
Nine Months Ended 480.8 502.2
Unaudited
KIMBERLY-CLARK CORPORATION
(Millions)
Supplemental Financial Information:
September 30 December 31
2005 2004
Preliminary Balance Sheet Data:
Cash and cash equivalents $ 313.4 $ 594.0
Accounts receivable 1,980.4 2,038.3
Inventories 1,726.1 1,670.9
Total assets 16,289.2 17,018.0
Accounts payable 1,241.3 1,248.7
Debt payable within one year 906.4 1,214.7
Total current liabilities 4,144.6 4,537.2
Long-term debt 2,625.1 2,298.0
Preferred securities of subsidiary 748.5 722.9
Stockholders' equity 6,031.8 6,629.5
Preliminary Cash Flow Data -
Continuing Operations:
Nine Months
Ended September 30
"Free Cash Flow" Reconciled to 2005 2004
Cash Provided by Operations:
Free cash flow $ 558.1 $ 1,162.7
Capital spending 451.9 322.8
Cash dividends paid 625.7 571.9
Cash provided by operations $ 1,635.7 $ 2,057.4
Cash used for investing $ (382.6) $ (307.9)
Cash used for financing $(1,518.7) $(1,757.0)
Depreciation and amortization $ 624.6 $ 606.2
Unaudited
KIMBERLY-CLARK CORPORATION
SELECTED BUSINESS SEGMENT DATA
PERIODS ENDED SEPTEMBER 30
(Millions)
Three Months Nine Months
Ended September 30 Ended September 30
2005 2004 Change 2005 2004 Change
NET SALES:
Personal Care $1,606.7 $1,494.1 + 7.5% $ 4,741.2 $ 4,465.5 + 6.2%
Consumer Tissue 1,431.0 1,323.4 + 8.1% 4,295.6 3,925.3 + 9.4%
Business-to-
Business 961.4 1,014.7 - 5.3% 2,849.5 2,951.8 - 3.5%
Corporate & Other 6.7 6.2 + 8.1% 22.3 15.6 +43.0%
Intersegment
Sales (5.0) (55.4) N.M. (14.9) (176.4) N.M.
Consolidated $4,000.8 $3,783.0 + 5.8% $11,893.7 $11,181.8 + 6.4%
OPERATING PROFIT:
Personal Care $ 316.7 $ 292.0 + 8.5% $ 943.5 $ 941.7 + .2%
Consumer Tissue 189.8 196.2 - 3.3% 596.4 579.9 + 2.8%
Business-to-
Business 169.0 169.3 - .2% 494.1 482.3 + 2.4%
Other income
(expense), net (12.3) (8.6) +43.0% (25.7) (37.6) -31.6%
Corporate & Other (198.6) (32.0) N.M. (269.9) (101.3) N.M.
Consolidated $ 464.6 $ 616.9 -24.7% $ 1,738.4 $ 1,865.0 - 6.8%
The above segment data is presented on a continuing operations basis that
reflects the November 30, 2004 spin-off of the Corporation's former fine paper
and technical paper businesses.
Corporate & Other, for the three months and nine months ended September
30, 2005, includes $168.0 million of pre-tax charges for the Competitive
Improvement Initiatives.
N.M.-Not meaningful
Unaudited
Description of Business Segments
The Corporation is organized into operating segments based on product
groupings. These operating segments have been aggregated into three reportable
global business segments: Personal Care; Consumer Tissue; and Business-to-
Business. The reportable segments are headed by executive officers who report
to the Corporation's Chief Executive Officer. These officers are responsible
for the development and execution of global strategies to drive growth and
profitability of the Corporation's worldwide Personal Care, Consumer Tissue
and Business-to-Business 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 the competitive
improvement initiatives.
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 Business-to-Business segment manufactures and markets disposable,
single-use, health and hygiene products to the away-from-home marketplace.
These products include facial and bathroom tissue, paper towels, napkins,
wipers, surgical gowns, drapes, infection control products, sterilization
wrap, disposable face masks and exam gloves, respiratory products, other
disposable medical products and other products. Products in this segment are
sold under the Kimberly-Clark, Kleenex, Scott, Kimwipes, WypAll, Surpass,
Safeskin, Tecnol, Ballard and other brand names.
Unaudited
KIMBERLY-CLARK CORPORATION
PERIODS ENDED SEPTEMBER 30
NON-GAAP RECONCILIATION SCHEDULES
The following tables present the reconciliation of non-GAAP financial
measures to reported GAAP financial measures.
Supplemental Net Sales Data:
Variance comparison of reported net sales to net sales excluding
divested pulp operations
Third Quarter of 2005 versus Third Quarter of 2004
Consolidated Business-to-Business
Reported Excluding Reported Excluding
Total Change 5.8% 6.5% -5.3% 2.8%
Volume 4% 4% 1% 1%
Net Selling Price 1% 1% 0% 0%
Currency 2% 2% 1% 1%
Mix/Other 0% 0% 1% 1%
Pulp Sales -1% 0% -8% 0%
The above table presents the percentage variation in net sales on an as
reported (GAAP) basis and excluding pulp operations which were divested as
part of the November 30, 2004 Neenah Paper spin-off. The press release
includes commentary that compares 2005 net sales for consolidated and the
business-to-business segment to 2004 net sales excluding those pulp
operations.
KIMBERLY-CLARK CORPORATION
PERIODS ENDED SEPTEMBER 30
(Millions)
Effective Income Tax Rate Reconciliation - Unusual Items and Synthetic
Fuel Partnership Activities:
Three Months Ended September 30, 2005
Excluding Synthetic Fuel
As Unusual Unusual Effect of Excluding
Reported Items Items Activities Activities
Income Before
Income Taxes $380.8 $(168.0) $548.8 $(43.2) $592.0
Provision for
Income Taxes 66.3 41.6 107.9 56.1 164.0
Net Synthetic Fuel
Benefit $ 12.9
Effective Income
Tax Rate 17.4% 19.7% 27.7%
Three Months Ended September 30, 2004
Excluding Synthetic Fuel
As Unusual Unusual Effect of Excluding
Reported Items Items Activities Activities
Income Before
Income Taxes $554.1 $ - $554.1 $(26.4) $580.5
Provision for
Income Taxes 132.7 - 132.7 32.9 165.6
Net Synthetic Fuel
Benefit $ 6.5
Effective Income
Tax Rate 23.9% 23.9% 28.5%
KIMBERLY-CLARK CORPORATION
PERIOD ENDED SEPTEMBER 30, 2005
Outlook for 2005
Estimated Full-Year 2005 Diluted Earnings Per Share:
Earnings Per Share
Before Unusual Items $3.77 - $3.83
Competitive Improvement Initiatives* (.26)
Income Taxes on American Jobs
Creation Act Dividends (.07)
Earnings Per Share - Diluted $3.44 - $3.50
* Does not include fourth quarter charges related to these initiatives.
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/19991117/KMBLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Media: Dave Dickson, +1-972-281-1481,
ddickson@kcc.com Investor Relations: Mike Masseth,
+1-972-281-1478, mmasseth@kcc.com, both of Kimberly-Clark
Corporation
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