FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto
Commission file number 1-225
KIMBERLY-CLARK CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 39-0394230
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. BOX 619100
DALLAS, TEXAS
75261-9100
(Address of principal executive offices)
(Zip Code)
(972) 281-1200
(Registrant's telephone number, including area code)
NO CHANGE
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X. No.
----
AS OF MAY 7, 1999, 532,416,811 SHARES OF THE CORPORATION'S COMMON STOCK WERE
OUTSTANDING.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
CONSOLIDATED INCOME STATEMENT
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months
Ended March 31
----------------------
(Millions of dollars except per share amounts) 1999 1998
- -----------------------------------------------------------------------------
<S> <C> <C>
NET SALES $3,125.2 $3,048.6
Cost of products sold 1,833.4 1,884.1
--------- ---------
GROSS PROFIT 1,291.8 1,164.5
Advertising, promotion and selling expenses 507.2 494.9
Research expense 54.8 52.9
General expense 148.7 150.4
Goodwill amortization 6.8 7.8
Restructuring (22.3) 14.2
--------- ---------
OPERATING PROFIT 596.6 444.3
Interest income 6.0 8.6
Interest expense (53.5) (48.2)
Other income (expense), net (6.9) (0.3)
--------- ---------
INCOME BEFORE INCOME TAXES 542.2 404.4
Provision for income taxes 177.1 129.6
--------- ---------
INCOME BEFORE EQUITY INTERESTS 365.1 274.8
Share of net income of equity companies 43.6 29.3
Minority owners' share of subsidiaries' net income (5.0) (6.5)
--------- ---------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 403.7 297.6
Cumulative effect of accounting change,
net of income taxes - (11.2)
--------- ---------
NET INCOME $403.7 $286.4
========= =========
PER SHARE BASIS:
BASIC:
Income before cumulative effect of accounting change $.75 $.53
Cumulative effect of accounting change,
net of income taxes - (.02)
--------- ---------
Net income $.75 $.51
========= =========
DILUTED:
Income before cumulative effect of accounting change $.75 $.53
Cumulative effect of accounting change,
net of income taxes - (.02)
--------- ---------
Net income $.75 $.51
========= =========
CASH DIVIDENDS DECLARED $.26 $.25
========= =========
</TABLE>
Unaudited
See Notes to Financial Statements.
CONSOLIDATED BALANCE SHEET
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
MARCH 31, December 31,
(Millions of dollars) 1999 1998
- --------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 105.1 $ 144.0
Accounts receivable 1,451.4 1,465.2
Inventories 1,265.8 1,283.8
Other current assets 411.5 473.9
--------- ---------
TOTAL CURRENT ASSETS 3,233.8 3,366.9
PROPERTY 10,464.4 10,547.7
Less accumulated depreciation 4,649.1 4,702.7
--------- ---------
NET PROPERTY 5,815.3 5,845.0
INVESTMENTS IN EQUITY COMPANIES 827.0 813.1
ASSETS HELD FOR SALE 109.7 109.5
GOODWILL, DEFERRED CHARGES AND OTHER ASSETS 1,419.5 1,375.8
--------- ---------
$11,405.3 $11,510.3
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Debt payable within one year $ 880.6 $ 635.4
Accounts payable 907.4 1,003.2
Accrued expenses 1,318.5 1,453.7
Other current liabilities 711.8 698.4
--------- ---------
TOTAL CURRENT LIABILITIES 3,818.3 3,790.7
LONG-TERM DEBT 2,086.7 2,068.2
NONCURRENT EMPLOYEE BENEFIT AND OTHER OBLIGATIONS 894.6 899.9
DEFERRED INCOME TAXES 681.9 666.3
MINORITY OWNERS' INTERESTS IN SUBSIDIARIES 215.0 198.0
STOCKHOLDERS' EQUITY 3,708.8 3,887.2
--------- ---------
$11,405.3 $11,510.3
========= =========
</TABLE>
Unaudited
See Notes to Financial Statements.
<PAGE>
CONSOLIDATED CASH FLOW STATEMENT
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months
Ended March 31
-----------------------
(Millions of dollars) 1999 1998
- ---------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net Income $403.7 $286.4
Cumulative effect of accounting change,
net of income taxes - 11.2
Restructuring (22.3) 14.2
Depreciation 129.8 123.6
Goodwill amortization 6.8 7.8
Changes in operating working capital (104.3) (39.7)
Pension funding in excess of expense (7.5) (5.6)
Other 26.1 10.3
-------- --------
CASH PROVIDED BY OPERATIONS 432.3 408.2
-------- --------
INVESTING
Capital spending (168.6) (135.3)
Acquisitions of businesses, net of cash acquired - (0.9)
Disposals of property and businesses 18.5 -
Other (57.7) (31.9)
-------- --------
CASH USED FOR INVESTING (207.8) (168.1)
-------- --------
FINANCING
Cash dividends paid (135.5) (131.4)
Changes in debt payable within one year 194.7 (52.9)
Increases in long-term debt 21.2 221.8
Decreases in long-term debt (18.2) (261.6)
Proceeds from exercise of stock options 6.0 18.2
Acquisitions of common stock for the treasury (339.9) (9.1)
Other 8.3 (16.6)
-------- --------
CASH USED FOR FINANCING (263.4) (231.6)
-------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $(38.9) $8.5
======== ========
</TABLE>
Unaudited
See Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
1. The unaudited consolidated financial statements of Kimberly-Clark
Corporation (the "Corporation") have been prepared on the same basis as those
in the 1998 Annual Report to Stockholders and include all adjustments
necessary to present fairly the condensed consolidated balance sheet,
consolidated results of operations and condensed consolidated cash flow
statement for the periods indicated.
2. During the first quarter of 1999, the Corporation recorded a pretax
credit of $22.3 million due to changes in estimates for previously recorded
restructuring costs.
In the fourth quarter of 1997, the Corporation announced a plan to
restructure its worldwide operations ("Announced Plan"), the total pretax cost
of which was estimated at $810.0 million. During the first quarter of 1998,
the Corporation recorded a pretax charge of $14.2 million related to the
Announced Plan. The 1998 charge reduced first quarter 1998 net income by $.02
per share.
3. There are no adjustments required to be made to Income Before Effect of
Cumulative Accounting Change for purposes of computing basic and diluted
earnings per share ("EPS"). A reconciliation of the average number of common
shares outstanding used in the basic and diluted EPS computations is as
follows:
Average Common Shares
Outstanding for the
Three Months Ended March 31
---------------------------
(Millions) 1999 1998
- ---------------------------------------------------------
Basic 535.9 556.7
Dilutive effect of stock options 2.4 3.0
Dilutive effect of deferred
compensation plan shares 0.1 -
Dilutive effect of shares issued for
participation share awards 0.7 0.3
----- -----
Diluted 539.1 560.0
===== =====
Options outstanding during the quarter ended March 31, 1999 to purchase
8.7 million shares of common stock at a weighted average price of $52.75 were
not included in the computation of diluted EPS because the exercise prices of
the options were greater than the average market price of the common shares.
The options, which expire in 2004, 2007 and 2008, were still outstanding at
March 31, 1999.
There were 3.1 million shares of common stock at a weighted average price
of $55.94 outstanding at March 31, 1998 which were excluded from the diluted
EPS computation because the exercise prices of the options were greater than
the average market price of the common shares.
The number of common shares outstanding as of March 31, 1999 and 1998 was
531.8 million and 557.0 million, respectively.
4. The following schedule details inventories by major class as of March
31, 1999 and December 31, 1998:
MARCH 31, December 31,
(Millions of dollars) 1999 1998
- -------------------------------------------------------------
At lower of cost on the First-In,
First-Out (FIFO) method or market:
Raw materials $333.4 $355.4
Work in process 150.6 164.2
Finished goods 750.7 751.3
Supplies and other 205.0 195.5
------- -------
1,439.7 1,466.4
Excess of FIFO cost over Last-In,
First-Out (LIFO) cost (173.9) (182.6)
-------- -------
Total $1,265.8 $1,283.8
======== ========
5. The following schedule provides the detail of comprehensive income:
Three Months Ended March 31
---------------------------
(Millions of dollars) 1999 1998
- -------------------------------------------------------------------
Net Income $403.7 $286.4
Unrealized currency translation adjustments (111.1) (4.1)
-------- -------
Comprehensive income $292.6 $282.3
======== =======
6. The following schedule presents information concerning consolidated
operations by business segment:
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
(Millions of dollars) 1999 1998
- --------------------------------------------------------------------------------------------
<S> <C> <C>
NET SALES:
Tissue $1,708.0 $1,695.0
Personal Care 1,196.4 1,101.9
Health Care and Other 228.7 261.3
Intersegment Sales (7.9) (9.6)
---------- ---------
Consolidated $3,125.2 $3,048.6
========== =========
OPERATING PROFIT (a,b) (reconciled to income before income taxes):
Tissue $319.6 $261.6
Personal Care 241.6 166.3
Health Care and Other 47.6 41.1
Unallocated Items - net (12.2) (24.7)
--------- ---------
Total Operating Profit 596.6 444.3
Interest income 6.0 8.6
Interest expense (53.5) (48.2)
Other income (expense), net (6.9) (0.3)
--------- ---------
Income Before Income Taxes $542.2 $404.4
========= =========
</TABLE>
(a) Operating profit for the three months ended March 31, 1999 for Tissue
includes a credit of $22.3 million of previously recorded restructuring costs
due to changes in estimates.
(b) Operating profit for the three months ended March 31, 1998 for Tissue,
Personal Care and Health Care and Other includes charges of $9.1 million, $4.8
million and $0.3 million, respectively, related to restructuring costs.
Description of Business Segments
The Tissue segment manufactures and markets facial and bathroom tissue, and
paper towels and wipers for household and away-from-home use; wet wipes;
printing, premium business and correspondence papers; and related products.
The Personal Care segment manufactures and markets disposable diapers,
training and youth pants; feminine and incontinence care products; and related
products.
The Health Care and Other segment manufactures and markets health care
products such as surgical packs and gowns, sterilization wraps and disposable
face masks; specialty and technical papers and related products; and other
products.
Unaudited
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Management believes that the following commentary and tables appropriately
discuss and analyze the comparative results of operations and the financial
condition of the Corporation for the periods covered.
RESULTS OF OPERATIONS:
FIRST QUARTER OF 1999 COMPARED WITH FIRST QUARTER OF 1998
By Business Segment
(Millions of dollars)
<TABLE>
<CAPTION>
% Change % OF 1999
NET SALES 1999 vs. 1998 CONSOLIDATED
- ----------------------------------------------------------
<S> <C> <C> <C>
Tissue $1,708.0 + .8% 54.7%
Personal Care 1,196.4 + 8.6 38.3
Health Care and Other 228.7 - 12.5 7.3
Intersegment sales (7.9) (.3)
--------- ----
Consolidated $3,125.2 + 2.5% 100.0%
========= ======
</TABLE>
<TABLE>
<CAPTION>
% Return on Sales
% Change % OF 1999 ------------------
OPERATING PROFIT 1999 vs. 1998 CONSOLIDATED 1999 1998
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Tissue $319.6 +22.2% 53.5% 18.7% 15.4%
Personal Care 241.6 +45.3 40.5 20.2 15.1
Health Care and Other 47.6 +15.8 8.0 20.8 15.7
Unallocated items-net (12.2) (2.0)
------- ------
Consolidated $596.6 +34.3% 100.0% 19.1% 14.6%
======= ======
</TABLE>
Commentary:
Consolidated net sales for the quarter were 2.5 percent higher than in 1998;
however, excluding the revenues of K-C Aviation Inc. ("KCA"), which was sold
in the third quarter of 1998, net sales increased approximately 4 percent.
Excluding the net sales of KCA, worldwide sales volumes were 4 percent
higher.
- - Worldwide sales of tissue products for the quarter were in line with
management's expectations. Due to strong sales in the first quarter of 1998 in
advance of a consumer tissue price increase in North America and the
Corporation's strategy of shedding unprofitable private label sales in Europe,
sales volumes were essentially unchanged. However, overall tissue sales moved
up .8 percent primarily due to the favorable effect of changes in foreign
currency exchange rates.
- - Worldwide sales of personal care products increased 8.6 percent from
the first quarter of 1998. Personal care product sales volumes were 10 percent
higher, with increases in all product categories in North America, and
improvement in Latin America and Asia. A portion of the increase in Latin
America is attributable to operations in Colombia, in which the Corporation
made an additional investment in late 1998 to gain majority ownership of
certain equity affiliates.
- - Worldwide sales of health care and other products, excluding the
revenues of KCA, were 5 percent higher primarily because of continued growth
in sales of professional health care products.
Operating profit for the first quarter of 1999 was $596.6 million, including a
$22.3 million credit due to changes in estimates for previously recorded
restructuring costs. This credit was returned to earnings because all of the
programs included in the 1995 charge related to the merger with Scott Paper
Company have now been completed. In the first quarter of 1998, operating
profit was $444.3 million, including restructuring costs of $14.2 million.
Excluding these restructuring items from both years, first quarter operating
profit was 25.3 percent higher in 1999 and operating profit as a percentage of
sales increased from 15.0 percent in 1998 to 18.4 percent in 1999.
- - The increase in operating profit for worldwide tissue was primarily due
to productivity gains and other manufacturing cost benefits.
- - The increase in operating profit for worldwide personal care was
primarily due to the increase in unit sales volumes and manufacturing cost
reductions.
- - Excluding the operating results of KCA, operating profit for health
care and other increased 24.3 percent primarily due to the increased sales
volumes and productivity gains in professional health care.
<PAGE>
By Geography
(Millions of dollars)
% Change % OF 1999
NET SALES 1999 vs. 1998 CONSOLIDATED
- ----------------------------------------------------------
North America $2,097.6 - .1% 67.1%
Outside North America 1,088.8 + 6.9 34.8
Intergeographic sales (61.2) (1.9)
--------- -----
Consolidated $3,125.2 + 2.5% 100.0%
========= ======
<TABLE>
<CAPTION>
% Return on Sales
% Change % OF 1999 -------------
OPERATING PROFIT 1999 vs. 1998 CONSOLIDATED 1999 1998
- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
North America $507.3 + 24.3% 85.0% 24.2% 19.4%
Outside North America 101.5 + 66.7 17.0 9.3 6.0
Unallocated items-net (12.2) (2.0)
------- ------
Consolidated $596.6 + 34.3% 100.0% 19.1% 14.6%
======= ======
</TABLE>
Commentary:
- - Excluding the revenues of KCA, net sales in North America increased 2
percent due to the increased sales volumes for personal care products.
- - Net sales outside North America increased due, in part, to the
previously mentioned consolidation of certain operations in Colombia and the
higher sales in Latin America and Asia.
- - Excluding the restructuring related credit of $22.3 million in 1999 and
$8.5 million of restructuring costs in 1998, operating profit in North America
increased 16.4 percent. This increase was primarily due to the increased
sales volumes for personal care products and overall manufacturing cost
benefits.
- - Excluding $5.7 million of restructuring costs in 1998, operating profit
outside North America increased 52.4 percent. This increase was due to
improvement in Europe from lower manufacturing and marketing costs, the
consolidation of the Colombian operations and improvements elsewhere in Latin
America and in Asia.
Additional Income Statement Commentary:
- - The increase in interest expense was primarily due to an increase in the
level of debt.
- - The effective income tax rate was 32.7 percent compared to 32.0 percent
last year. The effective tax rate is expected to be between 32.0 percent and
32.5 percent for 1999.
- - The Corporation's share of net income of equity companies increased 48.8
percent from 1998. This increase was primarily attributable to higher
earnings of Kimberly-Clark de Mexico, S.A. de C.V. due to increased selling
prices, higher sales volumes and the favorable effect of changes in the value
of the Mexican peso. In addition, there was a gain of approximately $5
million at Klabin Kimberly S.A. related to the 1999 devaluation of the
Brazilian real.
LIQUIDITY AND CAPITAL RESOURCES
- - Cash provided by operations in the first quarter of 1999 increased by
$24.1 million compared with the first quarter of 1998. A higher level of net
income plus net noncash charges included in net income more than offset an
increase in working capital. Although the investment in accounts receivable
and inventories was reduced, the timing of payments for income tax liabilities
and currency rate changes caused working capital to increase.
- - The status, at March 31, 1999, of the Corporation's restructuring
program announced in 1997 is presented below:
Balance at Unutilized Balance at
(Millions of dollars) December 31, 1998 Utilized March 31, 1999
- ---------------------------------------------------------------------------
1997 Announced Plan $177.1 $11.1 $166.0
The balance at March 31, 1999 is estimated to be adequate to complete the
actions contemplated in this plan. The activities involved in this plan have
not disrupted the Corporation's business operations to any significant extent.
The principal benefits of this plan have resulted in lower production costs
and simplified manufacturing and sourcing strategies.
- - During the first quarter of 1999, the Corporation repurchased 7 million
shares of its common stock at a cost of approximately $340 million.
- - At March 31, 1999, total debt was $3.0 billion compared with $2.7
billion at December 31, 1998. Net debt (total debt net of cash, cash
equivalents and $220 million of long-term notes receivable) was $2.6 billion
at March 31, 1999 compared with $2.3 billion at December 31, 1998. The
Corporation's ratio of net debt to capital was 40.2 percent at March 31, 1999
compared with 36.4 percent at December 31, 1998.
- - Management believes that the Corporation's ability to generate cash from
operations and its capacity to issue short-term and long-term debt are
adequate to fund working capital, capital spending and other needs in the
foreseeable future.
- - On April 29, 1999, the Corporation announced that its board of directors
had approved an agreement to purchase the consumer and away-from-home tissue
businesses of Attisholtz Holding AG for approximately $380 million. The
acquisition will include tissue businesses in Germany, Switzerland and
Austria. The transaction is expected to be completed during the second
quarter of 1999 and will be accounted for as a purchase.
ENVIRONMENTAL MATTERS
The Corporation has been named as a potentially responsible party at a number
of waste disposal sites, none of which, individually or in the aggregate, in
management's opinion, is likely to have a material adverse effect on its
business or results of operations.
"YEAR 2000" READINESS
Since 1995, the Corporation has been involved in a worldwide program to be
"Year 2000" ready. The program involves reviews of major business, financial
and other information systems, including equipment with embedded
microprocessors; development of specific plans for modification or replacement
of date-sensitive software or microprocessors; execution of such plans; and
the testing of such systems to ensure their "Year 2000" readiness. Included
within the scope of the program are contacts with key suppliers and customers
to determine the extent of their "Year 2000" readiness in order to ensure a
steady flow of goods and services to the Corporation and continuity with
respect to customer service.
The Corporation's Crisis Management Program has been expanded, where
necessary, to include contingency plans relating to possible "Year 2000"
issues. This program includes, among other things, contingency plans and
backup procedures to be followed in case of failure of production operations,
the inability of major suppliers to fulfill their commitments, and the
inability of major customers to submit orders and receive product.
Progress against the "Year 2000" readiness plan is monitored and reported to
senior management and to the Corporation's board of directors or audit
committee on a regular basis. As of March 31, 1999, management estimates that
it has completed almost 80 percent of the work involved in modifying,
replacing and testing the Corporation's major systems and microprocessors.
Management plans to have substantially all such work completed by June 30,
1999 and the balance completed by September 30, 1999.
The total cost to ensure "Year 2000" readiness, which is primarily comprised
of staff time and the cost of replacing certain computerized systems and
microprocessors, is estimated to be approximately $80 million. Management
estimates that $52 million has been incurred for this purpose as of March 31,
1999.
Neither the "Year 2000" issue nor the financial effects of the reviews,
modifications, replacements and testing are expected to have a material
adverse effect on the Corporation's business or its consolidated financial
position, results of operations, or cash flow.
Management believes that its "Year 2000" readiness program has encompassed all
reasonable actions and contingency plans to avoid business interruptions
resulting from "Year 2000" problems. The effect, if any, on the Corporation's
future results of operations from the Corporation's major customers or
suppliers not being "Year 2000" ready cannot be reasonably estimated. This
latter risk is mitigated somewhat by the Corporation's broad base of customers
and suppliers and the worldwide nature of the Corporation's operations.
OUTLOOK
Management believes that the fundamental strengths of the Corporation's
well-known brands and proprietary technologies were evident in its first
quarter results as the Corporation generated more top-line growth and achieved
record margins and earnings. Management plans to continue to build upon the
Corporation's strengths going forward. Management is committed to improving
top-line growth and sustaining double-digit growth in earnings per share.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
Certain information contained in this report is forward-looking and is based
on various assumptions. Such information includes, without limitation, the
business outlook, anticipated financial and operating results, strategies,
contingencies and contemplated transactions of the Corporation, including, but
not limited to, the adequacy of the restructuring plan announced in 1997, the
Corporation's estimated effective tax rate for 1999, and its "Year 2000"
readiness program. These forward-looking statements are based upon
management's expectations and beliefs concerning future events impacting the
Corporation. There can be no assurance that such events will occur or that
their effects on the Corporation will be as currently expected. For a
description of certain factors that could cause the Corporation'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 Corporation's Annual
Report on Form 10-K for the year ended December 31, 1998 entitled "Factors
That May Affect Future Results."
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1999 Annual Meeting of Stockholders was convened at 11:00 a.m. on
Thursday, April 29, 1999, at the Corporation's World Headquarters, 351 Phelps
Drive, Irving, Texas. Represented at the meeting in person or by proxy were
485,606,212 shares of common stock or 90.8% of all shares of common stock
outstanding.
The following directors were elected to three-year terms expiring in 2001:
John F. Bergstrom, Paul J. Collins, Robert W. Decherd and Frank A. McPherson.
Of the shares represented at the meeting, at least 98.7% voted for each
nominee, and 1.0% withheld authority to vote.
The Corporation's other directors are Pastora San Juan Cafferty, William O.
Fifield, Claudio X. Gonzalez, Louis E. Levy, Linda Johnson Rice, Wayne R.
Sanders, Wolfgang R. Schmitt and Randall L. Tobias.
In addition to the election of directors, the stockholders approved the
selection of Deloitte & Touche LLP as the independent auditors for the
Corporation. Of the shares represented at the meeting, 99.5% voted for such
selection, .2% voted against and .3% abstained or did not vote.
The stockholders also approved a stockholder proposal requesting that the
Board of Directors of the Corporation consider whether all directors should be
elected annually. Of the shares represented at the meeting, 9.3% did not
vote; of those which did vote on the proposal, 51.2% voted for such proposal,
47.0% voted against and 1.8% abstained.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(3)a Restated Certificate of Incorporation, dated June 12, 1997,
incorporated by reference to Exhibit No. (3)a of the Corporation's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997.
(3)b By-Laws, as amended November 22, 1996, incorporated by reference to
Exhibit No. 4.2 of the Corporation's Registration Statement on Form S-8 filed
with the Securities and Exchange Commission on December 6, 1996 (File No.
33-17367).
(4) Copies of instruments defining the rights of holders of long-term
debt will be furnished to the Securities and Exchange Commission upon request.
<PAGE>
(12) The following computation is filed as an exhibit to Part I of
this Form 10-Q:
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1999 1998
- -----------------------------------------------------------------
<S> <C> <C>
Consolidated Companies
- -----------------------------------------
Income before income taxes $542.2 $404.4
Interest expense 53.5 48.2
Interest factor in rent expense 13.3 11.5
Amortization of capitalized interest 2.4 2.3
Equity Affiliates
- -----------------------------------------
Share of 50%-owned:
Income before income taxes 15.4 11.7
Interest expense 2.9 1.6
Interest factor in rent expense 0.3 0.2
Amortization of capitalized interest 0.1 -
------ ------
Earnings $630.1 $479.9
====== ======
Consolidated Companies
- -----------------------------------------
Interest expense $53.5 $48.2
Capitalized interest 5.1 1.5
Interest factor in rent expense 13.3 11.5
Equity Affiliates
- -----------------------------------------
Share of 50%-owned:
Interest expense and capitalized interest 3.0 1.6
Interest factor in rent expense 0.3 0.2
------ ------
Fixed charges $75.2 $63.0
====== ======
Ratio of earnings to fixed charges 8.38 7.62
====== ======
</TABLE>
(27) The Financial Data Schedule required by Item 601(b)(27) of
Regulation S-K has been included with the electronic filing of this Form
10-Q.
(b) Reports on Form 8-K
Previously Reported.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KIMBERLY-CLARK CORPORATION
(Registrant)
By: /s/ John W. Donehower
-----------------------------
John W. Donehower
Senior Vice President and
Chief Financial Officer
(principal financial officer)
By: /s/ Randy J. Vest
------------------------------------
Randy J. Vest
Vice President and Controller
(principal accounting officer)
May 12, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 105100
<SECURITIES> 0
<RECEIVABLES> 1451400
<ALLOWANCES> 0<F1>
<INVENTORY> 1265800
<CURRENT-ASSETS> 3233800
<PP&E> 10464400
<DEPRECIATION> 4649100
<TOTAL-ASSETS> 11405300
<CURRENT-LIABILITIES> 3818300
<BONDS> 2086700
0
0
<COMMON> 0
<OTHER-SE> 0<F1>
<TOTAL-LIABILITY-AND-EQUITY> 11405300
<SALES> 3125200
<TOTAL-REVENUES> 3125200
<CGS> 1833400
<TOTAL-COSTS> 2528600
<OTHER-EXPENSES> 0<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53500
<INCOME-PRETAX> 542200
<INCOME-TAX> 177100
<INCOME-CONTINUING> 403700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 403700
<EPS-PRIMARY> .75
<EPS-DILUTED> .75
<FN>
<F1>Items not disclosed since they are not required for interim reporting under
regulation S-X, Article 10.
</FN>
</TABLE>
