KIMBERLY CLARK CORP, 10-K, 2000-03-24

KIMBERLY CLARK CORP
10-K, 2000-03-24
PAPER MILLS

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FORM 10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _______________ TO _______________

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)

Registrant's telephone number, including area code: (972) 281-1200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered
- ------------------------------- -----------------------------------------
Common Stock - $1.25 Par Value New York Stock Exchange
Preferred Stock Purchase Rights Chicago Stock Exchange
Pacific Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securit-ies 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.
---- -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]

As of March 17, 2000, 546,361,849 shares of common stock were outstanding, and
the aggregate market value of the registrant's common stock held by
non-affiliates on such date (based on the closing stock price on the New York
Stock Exchange) was approximately $29.5 billion.

(Continued)

<PAGE>
FACING SHEET
(CONTINUED)

DOCUMENTS INCORPORATED BY REFERENCE

Kimberly-Clark Corporation's 1999 Annual Report to Stockholders and 2000 Proxy
Statement contain much of the information required in this Form 10-K, and
portions of those documents are incorporated by reference herein from the
applicable sections thereof. The following table identifies the sections of
this Form 10-K which incorporate by reference portions of the Corporation's
1999 Annual Report to Stockholders and 2000 Proxy Statement. The Items of
this Form 10-K, where applicable, specify which portions of such documents are
incorporated by reference. The portions of such documents that are
not incorporated by reference shall not be deemed to be filed with the
Commission as part of this Form 10-K.

DOCUMENT OF WHICH PORTIONS ITEMS OF THIS FORM 10-K
ARE INCORPORATED BY REFERENCE IN WHICH INCORPORATED
- ---------------------------------------- -----------------------

1999 Annual Report to Stockholders PART I
(Year ended December 31, 1999) ITEM 1. Business

PART II
ITEM 5. Market for the Registrant's
Common Stock and Related
Stockholder Matters

ITEM 7. Management's Discussion and
Analysis of Financial Condition
and Results of Operations

ITEM 7A. Quantitative and
Qualitative Disclosures About
Market Risk

ITEM 8. Financial Statements and
Supplementary Data

PART IV
ITEM 14. Exhibits, Financial
Statement Schedules and Reports
on Form 8-K

2000 Proxy Statement PART III
ITEM 10. Directors and Executive
Officers of the Registrant

ITEM 11. Executive Compensation

ITEM 12. Security Ownership of
Certain Beneficial Owners and
Management

ITEM 13. Certain Relationships and
Related Transactions

PART I

ITEM 1. BUSINESS

Kimberly-Clark Corporation was incorporated in Delaware in 1928. As used in
Items 1, 2 and 7 of this Form 10-K, the term "Corporation" refers to
Kimberly-Clark Corporation and its consolidated subsidiaries. In the
remainder of this Form 10-K, the terms "Kimberly-Clark" or "Corporation" refer
only to Kimberly-Clark Corporation. Financial information by business segment
and geographic area, and information about principal products and markets of
the Corporation, contained under the caption "Management's Discussion and
Analysis" and in Note 16 to the Consolidated Financial Statements contained in
the 1999 Annual Report to Stockholders, are incorporated in this Item 1 by
reference.

RECENT DEVELOPMENTS. Historically, the Corporation has been engaged in a wide
variety of diversified businesses, including the manufacture and sale of
consumer products, paper and forest products, airline services and various
other businesses. In recent years, the Corporation has been undergoing a
transition to a global consumer products company based on the strategy of
building its tissue, personal care and health care businesses. Businesses
that did not, or could not, build on the Corporation's strengths were
candidates for divestiture. Businesses that fit into the Corporation's
strategy were candidates for further investment and support. Outside
businesses that were perceived as opportunities consistent with the strategy
were candidates for acquisition. As a result, since 1992, the Corporation has
completed over 30 strategic acquisitions and approximately 20 strategic
divestitures, including the following transactions:

- - On December 12, 1995, Scott Paper Company ("Scott") became a
wholly-owned subsidiary of Kimberly-Clark upon completion of a merger
transaction in which the outstanding Scott common shares were converted
into shares of Kimberly-Clark common stock. The transaction was valued
at approximately $9.4 billion and accounted for as a pooling of interests.
On February 14, 1996, Scott changed its name to Kimberly-Clark Tissue
Company ("KCTC").

- - On June 28, 1996, the Corporation sold the baby and child wipe
businesses previously conducted by Scott, consisting of the Baby Fresh,
Wash a-Bye Baby and Kid Fresh brands and the Dover, Delaware production
facility, to The Procter & Gamble Company. This divestiture was required
by the U.S. Department of Justice as part of the Scott merger.

- - On September 16, 1996, the Corporation sold its tissue mill in Prudhoe,
England and certain consumer tissue businesses in the United Kingdom
and Ireland to Svenska Cellulosa Aktiebolaget (SCA) of Sweden. This
divestiture was required by the European Commission as part of the
Scott merger.

- - On March 27, 1997, the Corporation sold its Coosa Pines, Alabama pulp
and newsprint operations, and related woodlands ("Coosa"), to Alliance
Forest Products Inc., a publicly-held Canadian corporation, for
approximately $600 million in cash.

- - On June 6, 1997, the Corporation sold its 50.1 percent interest in Scott
Paper Limited ("SPL"), a publicly-traded Canadian company to Kruger, Inc.,
a Canadian paper and forest products company, for approximately $127
million.

<PAGE>
PART I
(Continued)

ITEM 1. BUSINESS (Continued)

- - On December 18, 1997, the Corporation acquired Tecnol Medical Products,
Inc. ("Tecnol"), a leading maker of disposable face masks and patient
care products, in a merger transaction which involved the conversion
of all outstanding shares of Tecnol common stock into shares of
Kimberly-Clark common stock. The transaction was valued at approximately
$428 million and was accounted for as a purchase.

- - On May 28, 1998, the Corporation purchased a 50 percent equity interest in
Klabin Tissue S.A. (now known as Klabin Kimberly S.A.), the leading tissue
manufacturer in Brazil.

- - On July 21, 1998, the Corporation purchased an additional 10 percent
ownership interest in its Korean affiliate, YuHan-Kimberly, Limited,
increasing its ownership interest to 70 percent.

- - On July 29, 1998, the Corporation purchased a 51 percent ownership interest
in Kimberly Bolivia, S.A., a new joint venture company in Bolivia.

- - On August 19, 1998, the Corporation sold the outstanding shares of K-C
Aviation Inc. ("KCA"), a leading provider of business aviation services,
to Gulfstream Aerospace Corporation for $250 million in cash.

- - On June 10, 1999, the Corporation purchased the European consumer and
away-from-home tissue businesses of Attisholz Holding AG for approximately
$365 million. The acquired businesses are located in Germany, Switzerland
and Austria.

- - On September 23, 1999, the Corporation acquired Ballard Medical Products,
a leading maker of disposable medical devices for respiratory care,
gastroenterology and cardiology, at a cost of approximately $788 million,
including the value of common stock exchanged and other costs of
the transaction. This acquisition has been accounted for as a purchase.

- - On September 30, 1999, the Corporation completed the sale of
approximately 460,000 acres of timberland in Alabama, Mississippi and
Tennessee to Joshua Timberlands, LLC for notes receivable with a fair value
of approximately $383 million. Also, as part of its previously announced
intention to exit the entire integrated pulp operation in Mobile, Alabama,
the Corporation shut down the pulp mill facility in August 1999.

- - On February 8, 2000, the Corporation acquired Safeskin Corporation
("Safeskin"), a leading maker of disposable gloves for health care,
high-technology and scientific industries, in a merger transaction pursuant
to which Safeskin shareholders received .1956 of a share of the
Corporation's common stock for each share Safeskin common stock. The
transaction is valued at approximately $800 million and will be
accounted for as a purchase.

<PAGE>
PART I
(Continued)

ITEM 1. BUSINESS (Continued)

In the fourth quarter of 1995, in connection with the Scott merger, the
Corporation announced a plan to restructure the combined operations and to
accomplish other business improvement objectives (the "1995 Plan"). The
original estimated pretax cost of the 1995 Plan was $1,440 million. The plan
was completed in 1998 at a pretax cost of $1,305 million. Costs of the 1995
Plan were charged to earnings as follows: $814.3 million in 1995, $429.9
million in 1996 and $64.1 million in 1997. A credit of $3.3 million was
recorded in 1998.

On November 21, 1997, the Corporation announced a restructuring plan (the
"1997 Plan"). The plan included the sale, closure or downsizing of
17 manufacturing facilities worldwide and a workforce reduction of
approximately 4,800 employees. Costs for the 1997 Plan of $250.8 million and
$414.2 million were recorded in 1998 and 1997, respectively, at the time
costs became accruable under appropriate accounting principles. Included in
such costs was accelerated depreciation charged to cost of products sold
related to assets that were to be disposed of but which continued to be
operated during 1997 and 1998. In 1999, the Corporation recorded a net
credit of $16.7 million, which was comprised of accelerated depreciation
expense of $23.7 million, reductions in accrued costs of $31.9 million and
lower asset write-offs and higher sales proceeds totaling $8.5 million, due
to changes in estimates.

In the fourth quarter of 1998, the Corporation announced a facilities
consolidation plan (the "1998 Plan") to, among other things, further align
tissue manufacturing capacity with demand in Europe, close a diaper
manufacturing facility in Canada, shut down and dispose of a tissue machine in
Thailand, write down certain excess feminine care production equipment in
North America and reduce the Corporation's workforce by approximately 830
employees. Costs for the 1998 Plan of $42.6 million and $49.1 million were
recorded in 1999 and 1998, respectively, and charged to cost of products sold.
Costs of approximately $20 million will be charged to cost of products sold in
2000. These costs are comprised primarily of certain severance costs and
charges for accelerated depreciation for the Corporation's Larkfield, U.K.
tissue manufacturing facility that will remain in use until its expected
shutdown in October 2000.

Pursuant to the 1998 Plan, through December 31, 1999, 800 employees have been
notified of the Corporation's plans to terminate their employment, and the
costs of this workforce reduction were charged to earnings in the period in
which such employee severance benefits were appropriately communicated. Of
the employees that have been notified, 530 employees have been terminated and
270 additional employees will be terminated in 2000. Approximately 50
additional employees will be notified in 2000 of the Corporation's plans to
terminate their employment. Their severance costs, which are included in the
$20 million discussed above, will be accrued and charged to cost of products
sold at that time.

DESCRIPTION OF THE CORPORATION. The Corporation is principally engaged in the
manufacturing and marketing throughout the world of a wide range of products
for personal, business and industrial uses. Most of these products are made
from natural and synthetic fibers using advanced technologies in fibers,
nonwovens and absorbency.

The Corporation is organized into three global business segments: Tissue;
Personal Care; and Health Care and Other.

<PAGE>
PART I
(Continued)

ITEM 1. BUSINESS (Continued)

The Tissue segment includes facial and bathroom tissue, paper towels and
wipers and napkins for household and away-from-home use; wet wipes; printing,
premium business and correspondence papers; and related products. Products in
this business segment are sold under the Kleenex, Scott, Kimberly-Clark,
Kleenex Cottonelle, Kleenex Viva, Huggies, Kimwipes, Wypall, Surpass and other
brand names.

The Personal Care segment includes disposable diapers, training and youth
pants and swimpants; feminine and incontinence care products; and related
products. Products in this business segment are primarily for household use
and are sold under a variety of well-known brand names, including Huggies,
Pull-Ups, Little Swimmers, GoodNites, Kotex, Lightdays, Depend, Poise and
other brand names.

The Health Care and Other segment includes health care products, consisting of
surgical gowns, drapes, infection control products, sterilization wraps,
disposable face masks, respiratory products and other disposable medical
products; specialty and technical papers; and other products. Products in
this segment are sold under the Kimberly-Clark, Tecnol, Ballard and other
brand names.

Products for household use are sold directly, and through wholesalers, to
supermarkets, mass merchandisers, drugstores, warehouse clubs, home health
care, variety and department stores and other retail outlets. Products for
away-from-home use are sold through distributors and directly to
manufacturing, lodging, office building, food service and health care
establishments and other high volume public facilities. Paper products are
sold directly to users, converters, manufacturers, publishers and printers,
and through paper merchants, brokers, sales agents and other resale agencies.
Health care products are sold to distributors, converters and end-users.

PATENTS AND TRADEMARKS. The Corporation owns various patents and trademarks
registered domestically and in many foreign countries. The Corporation
considers the patents and trademarks which it owns and the trademarks under
which it sells certain of its products to be material to its business.
Consequently, the Corporation seeks patent and trademark protection by all
available means, including registration. A partial list of the Corporation's
trademarks is included under the caption "Trademarks" contained in the 1999
Annual Report to Stockholders and is incorporated herein by reference.

RAW MATERIALS. Superabsorbent materials are important components in
disposable diapers, training and youth pants and incontinence care products.
Polypropylene and other synthetics and chemicals are primary raw materials for
manufacturing nonwoven fabrics which are used in disposable diapers, training
and youth pants, wet wipes, feminine pads, incontinence and health care
products, and away-from-home wipers.

Cellulose fiber, in the form of kraft pulp or recycled fiber, is the primary
raw material for the Corporation's tissue and paper products and is an
important component in disposable diapers, training pants, feminine pads and
incontinence care products.

Most recovered paper and all synthetics are purchased from third parties.
Pulp and recycled fiber are produced by the Corporation and purchased from
others. The Corporation considers the supply of such raw materials to be
adequate to meet the needs of its businesses. See "Factors That May Affect
Future Results - Raw Materials."

PART I
(Continued)

ITEM 1. BUSINESS (Continued)

The Corporation owns or controls approximately 5.7 million acres of forestland
in Canada, principally as a fiber source for pulp production which is consumed
internally within the tissue business. Approximately 1.0 million acres in the
province of Nova Scotia are owned by the Corporation, and approximately 4.7
million acres, principally in the province of Ontario, are held under
long-term Crown rights or leases. The Corporation closed its Mobile, Alabama
pulp mill in August of 1999 and during 1999 sold approximately 530,000 acres
of timberlands it owned or held under long term leases in North America.

COMPETITION. For a discussion of the competitive environment in which the
Corporation conducts its business, see "Factors That May Affect Future Results
- - Competitive Environment."

RESEARCH AND DEVELOPMENT. A major portion of total research and development
expenditures is directed toward new or improved personal care, health care and
tissue products, and nonwoven materials. Consolidated research and development
expense was $249.8 million in 1999, $224.8 million in 1998 and $211.8 million
in 1997.

ENVIRONMENTAL MATTERS. Total worldwide capital expenditures for environmental
controls to meet legal requirements or otherwise relating to the protection of
the environment at the Corporation's facilities are expected to be
approximately $72 million in 2000 and $44 million in 2001. Of this amount,
approximately $27 million in 2000, and $18 million in 2001 are expected to be
spent at facilities in the United States. Approximately $15 million of U.S.
expenditures in 2000 relate to compliance with the U. S. Environmental
Protection Agency's ("EPA") Cluster Rule for sulfite pulping operations at
the Corporation's Everett, Washington pulp mill. The remainder of the expected
expenditures in the U. S., approximately $12 million in 2000, will be applied
at various other production facilities of the Corporation for other
environmental control system improvements. For facilities outside of the
U. S., capital expenditures for environmental controls are expected to e
$45 million in 2000 and $26 million in 2001.

Total worldwide operating expenses for environmental compliance are expected
to be $167 million in 2000 and $172 million in 2001. U. S. operating expenses
are expected to be $89 million in 2000 and $89 million in 2001. Operating
expenses for facilities outside the U. S. are expected to be $78 million in
2000 and $83 million in 2001. Operating expenses include pollution control
equipment operation and maintenance costs, governmental payments, and research
and engineering costs.

Total environmental capital expenditures and operating expenses are not
expected to have a material effect on the Corporation's total capital and
operating expenditures, consolidated earnings or competitive position.
However, current environmental spending estimates could be modified as a
result of changes in the Corporation's plans, changes in legal requirements or
other factors.

In connection with certain divestitures, including those described in "Recent
Developments," the Corporation has agreed to indemnify the purchasers of
certain divested businesses against certain contingent environmental
liabilities. Generally, these indemnification obligations apply only to
environmental liabilities which are actually incurred by the purchaser within
a specified time period after closing and are limited to a specified dollar
amount of coverage. The Corporation does not consider these obligations to be
material and has established appropriate accrued liabilities with respect
thereto.

PART I
(Continued)

ITEM 1. BUSINESS (Continued)

EMPLOYEES. In its worldwide consolidated operations, the Corporation had
54,800 employees as of December 31, 1999.

Approximately 22 percent of the Corporation's United States workforce and
approximately 34 percent of the Corporation's non-United States workforce are
represented by unions. In the United States, the largest concentration of
union membership is with the Paper, Allied-Industrial, Chemical & Energy
Workers International Union (PACE). Other employees are represented by the
International Brotherhood of Electrical Workers (IBEW), the International
Association of Machinists and Aerospace Workers (IAM), the Association of
Western Pulp and Paper Workers (AWPPW), and various independent unions.

Throughout the Corporation, management seeks to establish and maintain an open
and respectful relationship with its employees. Management believes that
communications should flow freely in the organization to provide all employees
the opportunity to maximize the use of their talents in the attainment of the
Corporation's business objectives.

INSURANCE. The Corporation maintains coverage consistent with industry
practice for most risks that are incident to its operations.

FACTORS THAT MAY AFFECT FUTURE RESULTS

Certain matters discussed in this Form 10-K, or documents a portion of which
are incorporated herein by reference, concerning, among other things, 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 1997 Plan and the 1998 Plan constitute
forward-looking statements and are based upon management's expectations and
beliefs concerning future events impacting the Corporation. There can be no
assurance that these events will occur or that the Corporation's results will
be as estimated.

The following factors, as well as factors described elsewhere in this Form
10-K, or in other SEC filings, among others, could cause the Corporation's
future results to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Corporation.

Such factors are described in accordance with the provisions of the Private
Securities Litigation Reform Act of 1995, which encourages companies to
disclose such factors.

COMPETITIVE ENVIRONMENT. The Corporation experiences intense competition for
sales of its principal products in its major markets, both domestically and
internationally. The Corporation's products compete with widely advertised,
well-known, branded products, as well as private label products which are
typically sold at lower prices. The Corporation has several major competitors
in most of its markets, some of which are larger and more diversified than the
Corporation. The principal methods and elements of competition include brand
recognition and loyalty, product quality and performance, price, marketing and
distribution capabilities. Inherent risks in the Corporation's competitive
strategy include uncertainties concerning trade and consumer acceptance, the
effects of recent consolidations of retailers and distribution channels,

<PAGE>
PART I
(Continued)

ITEM 1. BUSINESS (Continued)

and competitive reaction. Aggressive competitive reaction may lead to
increased advertising and promotional spending by the Corporation in
order to maintain market share. Increased competition with respect to
pricing would reduce revenue and could have an adverse impact on the
Corporation's financial results. In addition, the Corporation relies on
the development and introduction of new products and line extensions as a
means of achieving and/or maintaining category leadership. In order to
maintain its competitive position, the Corporation must develop technological
innovation with respect to its products.

COST SAVING STRATEGY. A significant portion of the Corporation's anticipated
cost savings are expected to result from operating efficiencies, the 1997 Plan
and the 1998 Plan. However, such savings will require the continued
consolidation and integration of facilities, functions, systems and
procedures, all of which present significant management challenges. There can
be no assurance that such actions will be successfully accomplished as rapidly
as expected or of the extent to which such cost savings and efficiencies will
be achieved.

RAW MATERIALS. Cellulose fiber, in the form of kraft pulp or recycled fiber,
is used extensively in the Corporation's tissue and paper products and is
subject to significant price fluctuations due to the cyclical nature of the
pulp markets. Recycled fiber accounts for approximately 20 percent of the
Corporation's overall fiber requirements. On a worldwide basis, the
Corporation has reduced its internal supply of pulp to approximately 40
percent of its virgin fiber requirements.

The Corporation has announced its intention to reduce its level of pulp
integration to approximately 20 percent. However, such a reduction in pulp
integration could increase the Corporation's commodity price risk.
Specifically, increases in pulp prices could adversely affect the
Corporation's earnings if selling prices for its finished products are not
adjusted or if such adjustments significantly trail the increases in pulp
prices. The Corporation has not used derivative instruments in the management
of these risks.

ACQUISITION AND DIVESTITURE STRATEGY. The Corporation's anticipated financial
results and business outlook are dependent in part upon the consummation of a
proposed divestiture on terms advantageous to the Corporation and the
availability of suitable acquisition candidates. There can be no assurance
that such divestiture will be consummated, or, if consummated, that the terms
of such divestiture will be advantageous to the Corporation. In addition, the
Corporation could encounter significant challenges in locating suitable
acquisition candidates that are consistent with its strategic objectives and
will contribute to its long-term success. Furthermore, there can be no
assurance that any such acquired business can or will be successfully
integrated with the Corporation's businesses in order to provide anticipated
synergies and earnings growth.

VOLUME FORECASTING. The Corporation's anticipated financial results reflect
forecasts of future volume increases in the sales of its products. Challenges
in such forecasting include anticipating consumer preferences, estimating
sales of new products, estimating changes in population characteristics (such
as birth rates and changes in per capita income), anticipating changes in
technology and estimating the acceptance of the Corporation's products in new
markets. As a result, there can be no assurance that the Corporation's volume
increases will occur as estimated.

<PAGE>

PART I
(Continued)

ITEM 1. BUSINESS (Continued)

FOREIGN MARKET RISKS. Because the Corporation and its equity companies have
manufacturing facilities in 40 countries and its products are sold in more
than 150 countries, the Corporation's results may be substantially affected by
foreign market risks. The Corporation is subject to the impact of economic
and political instability in developing countries. The extremely competitive
situation in European personal care and tissue markets, and the challenging
economic environments in Mexico and developing countries in eastern Europe and
Latin America, may slow the Corporation's sales growth and earnings potential.
In addition, the Corporation is subject to the strengthening or weakening of
various currencies against each other and local currencies versus the U.S.
dollar, and foreign currency risk arising from transactions and commitments
denominated in non-local currencies. See "Management's Discussion and
Analysis - Market Risk Sensitivity and Inflation Risks", contained in the 1999
Annual Report to Stockholders, which is incorporated herein by reference.
Translation exposure for the Corporation's balance sheet with respect to
foreign operations is not hedged. Although the Corporation uses instruments
to hedge its foreign currency risks (through foreign currency forward, swap
and option contracts), these instruments are used selectively to manage risk
and there can be no assurance that the Corporation will be fully protected
against substantial foreign currency fluctuations.

CONTINGENCIES. The costs and other effects of pending litigation and
administrative actions against the Corporation cannot be determined with
certainty. Although management believes that no such proceedings will have a
material adverse effect on the Corporation, there can be no assurance that the
outcome of such proceedings will be as expected. See "Item 3. Legal
Proceedings."

"YEAR 2000". For a discussion regarding "Year 2000" compliance in terms of
its computer systems, see "Management's Discussion and Analysis - 'Year 2000
Readiness' contained in the 1999 Annual Report to Stockholders, which is
incorporated herein by reference.
<PAGE>
PART I
(Continued)

ITEM 2. PROPERTIES

Management believes that the Corporation's production facilities are suitable
for their purpose and adequate to support its busi-nesses. The extent of
utilization of individual facilities varies, but they operate at or near
capacity, except in certain instances such as when new products or technology
are being introduced or when mills are being shut down. Certain facilities of
the Corporation are being expanded. Various facilities contain pollution
control, solid waste disposal and other equipment which have been financed
through the issuance of industrial revenue or similar bonds and are held by
the Corporation under lease or installment purchase agreements.

The principal facilities of the Corporation (including the Corporation's
equity companies) and the products or groups of products made at such
facilities are as follows:

HEADQUARTERS LOCATIONS
Dallas, Texas
Roswell, Georgia
Neenah, Wisconsin
Reigate, United Kingdom
Bangkok, Thailand

ADMINISTRATIVE CENTER
Knoxville, Tennessee

WORLDWIDE PRODUCTION AND SERVICE FACILITIES

UNITED STATES

ALABAMA
Mobile - tissue products
ARIZONA
Tucson - health care products
ARKANSAS
Conway - feminine care, incontinence care and nonwovens
Maumelle - wet wipes and nonwovens
CALIFORNIA
Escondido - printing inks
Fullerton - tissue products
CONNECTICUT
New Milford - diapers and tissue products
GEORGIA
LaGrange - nonwovens
IDAHO
Pocatello - respiratory care and gastroenterology products
KENTUCKY
Owensboro - tissue products
MICHIGAN
Munising - technical papers

PART I
(Continued)

ITEM 2. PROPERTIES (Continued)

MISSISSIPPI
Corinth - nonwovens, wipers and towels
Hattiesburg - tissue products
NORTH CAROLINA
Hendersonville - nonwovens
Lexington - nonwovens
OHIO
Piqua - printing inks
OKLAHOMA
Jenks - tissue products
PENNSYLVANIA
Chester - tissue products
SOUTH CAROLINA
Beech Island - diapers and tissue products
TENNESSEE
Loudon - tissue products
TEXAS
Cleburne - apparel products (1)
Del Rio - health care products
Fort Worth - health care products
Paris - diapers, training and youth pants
San Antonio - personal cleansing products and systems
UTAH
Draper - respiratory care and gastroenterology products
Ogden - diapers
VERMONT
East Ryegate - technical papers
WASHINGTON
Everett - tissue products and pulp
WISCONSIN
Marinette - tissue products
Neenah - diapers, training and youth pants, feminine care, incontinence care,
business and correspondence papers and nonwovens
Whiting - business and correspondence papers

OUTSIDE THE UNITED STATES

ARGENTINA
*Bernal - tissue products
Pilar - feminine care and incontinence care
San Luis - diapers

* Equity company production facility
<PAGE>
PART I
(Continued)

ITEM 2. PROPERTIES (Continued)

AUSTRALIA
*Albury - nonwovens
*Ingleburn - diapers
*Lonsdale - diapers, incontinence care and feminine care
*Millicent - pulp and tissue products
*Tantanoola - pulp
*Warwick Farm - tissue products
BAHRAIN
*East Riffa - tissue products
BELGIUM
Duffel - tissue products
BOLIVIA
La Paz - tissue products
Santa Cruz - diapers, feminine care and tissue products
BRAZIL
*Bahia - tissue products
Barueri - wet wipes
*Correia Pinto - tissue products
*Cruzeiro - tissue products
*Mendes - tissue products
*Mogi das Cruzes - tissue products
Porto Alegre - feminine care
*Recife - tissue products
Rio de Janeiro - diapers, feminine care and incontinence care
*Sao Paulo - tissue products
Suzano - diapers
CANADA
Huntsville, Ontario - tissue products and wipers
New Glasgow, Nova Scotia - pulp
St. Hyacinthe, Quebec - feminine care
Terrace Bay, Ontario - pulp (2)
CHINA (3)
Beijing - feminine care and diapers
Chengdu - feminine care
Guangzhou - tissue products
Handan - feminine care
Nanjing - feminine care
Shanghai - tissue products
Shenyang - feminine care
Wuhan - feminine care

* Equity company production facility
<PAGE>
PART I
(Continued)

ITEM 2. PROPERTIES (Continued)

COLOMBIA
Barbosa - business, notebooks and correspondence papers
Guarne - tissue products
Pereira - tissue products, feminine care, incontinence care and diapers
Tocancipa - diapers
*Villa Rica - diapers and incontinence care
COSTA RICA
Belen - tissue products
Cartago - diapers and feminine care
CZECH REPUBLIC
Jaromer - diapers and incontinence care
Litovel - feminine care
DOMINICAN REPUBLIC
Santo Domingo - tissue products
ECUADOR
Babahoyo - tissue products
Duran - diapers and feminine care
Mapasingue - tissue products and notebooks
EL SALVADOR
San Salvador - tissue products
Sitio del Nino - tissue products and feminine care
FRANCE
Rouen - tissue products
Villey-Saint-Etienne - tissue products
GERMANY
Forchheim - feminine care and incontinence care
Koblenz - tissue products
Mainz - tissue products
Reisholz - tissue products
GUATEMALA
Poza Verde - tissue products, feminine care and notebooks
HONDURAS
San Pedro Sula - tissue products
Villanueva - health care products
INDIA
*Pune - feminine care and diapers
INDONESIA
Jakarta - tissue products
*Medan - specialty papers
ISRAEL
*Afula - diapers, feminine care and incontinence care
*Hadera - tissue products

* Equity company production facility
<PAGE>
PART I
(Continued)

ITEM 2. PROPERTIES (Continued)

ITALY
Alanno - tissue products
Romagnano - tissue products
Villanovetta - tissue products
JAPAN
Shinga - soap
KOREA
Anyang - feminine care, diapers and tissue products
Kimcheon - tissue products and nonwovens
Taejon - feminine care and diapers
MALAYSIA
Kluang - tissue products, feminine care and diapers
MEXICO
Acuna - health care products
*Bajio - tissue products, fine papers and notebooks
*Cuautitlan - feminine care, diapers and nonwovens
*Ecatepec - tissue products
Empalme - health care products
Magdalena - health care products
*Morelia - tissue products, pulp and fine papers
*Naucalpan - tissue products, diapers and feminine care
Nogales - health care products
*Orizaba - tissue products, fine papers and pulp
*Ramos Arizpe - tissue products and diapers
*San Rafael - tissue products and fine papers
Texmelucan - tissue products
Tijuana - printing inks
*Tlaxcala - diapers
PERU
Ate - tissue products
Santa Clara - tissue products
Villa Corrillos - diapers, feminine care and incontinence care
PHILIPPINES
San Pedro, Laguna - feminine care, diapers, tissue products and specialty
papers
SAUDI ARABIA
*Al-Khobar - diapers, feminine care and tissue products
SLOVAK REPUBLIC
Piestany - health care products
SOUTH AFRICA
Cape Town - tissue products, feminine care and incontinence care
Springs - tissue products and diapers

* Equity company production facility
<PAGE>
PART I
(Continued)

ITEM 2. PROPERTIES (Continued)

SPAIN
Aranguren - tissue products
Arceniega - tissue products, personal cleansing products and systems
Calatayud - diapers
Canary Islands - tissue products
Salamanca - tissue products
SWITZERLAND
Balsthal - tissue products and specialty papers
Niederbipp - tissue products
Reichenburg - tissue products
TAIWAN
Hsin-Ying - tissue products (4)
Ta-Yuan - tissue products
THAILAND
Pathumthani - feminine care, diapers and tissue products
Samut Prakarn - tissue products
TURKEY
*Istanbul - diapers
UNITED KINGDOM
Barrow - tissue products
Barton-upon-Humber - diapers
Flint - tissue products and nonwovens
Larkfield - tissue products (1)
Northfleet - tissue products
VENEZUELA
Guacara - diapers and feminine care
Maracay - tissue products
VIETNAM
Binh Duong - feminine care
Hanoi - feminine care

* Equity company production facility
_________________________________

(1) The Corporation has announced its intention to close this facility.

(2) The Corporation has announced its intention to sell this facility.

(3) The land on which these facilities are located is held under long-term
leases.

(4) The land and a portion of this facility are subject to a mortgage.

<PAGE>
PART I
(Continued)

ITEM 3. LEGAL PROCEEDINGS

The following is a brief description of certain legal and administrative
proceedings to which the Corporation or its subsidiaries is a party or to
which the Corporation's or its subsidiaries' properties is subject:

Litigation
- ----------

A. On May 13, 1997, the State of Florida, acting through its attorney
general, filed a complaint in the Gainesville Division of the United
States District Court for the Northern District of Florida (the
"Florida District Court") alleging that manufacturers of tissue products
for away-from-home use, including the Corporation and Scott, agreed to
fix prices by coordinating price increases for such products. Following
Florida's complaint, actions by the States of Maryland, New York and West
Virginia, as well as approximately 45 class action complaints, have been
filed in various federal and state courts around the United States. These
actions contain allegations similar to those made by the State of Florida
in its complaint. The actions in federal courts have been consolidated for
pretrial proceedings in the Florida District Court. Class certification
was granted in the federal proceedings in July 1998 and will be contested
in the state cases. The foregoing actions seek an unspecified amount of
actual and treble damages.

In February 2000, the State of Florida agreed to dismiss its complaint
with prejudice pursuant to a settlement with defendants. With respect
to the remaining actions, the Corporation has answered the complaints in
these actions and has denied the allegations contained therein as
well as any liability. Discovery is proceeding. The Corporation intends
to contest these claims vigorously. These actions are not expected to have
a material adverse effect on the Corporation's business, financial
condition or results of operations.

B. On January 14, 1999, Mobile Energy Services Company, L.L.C. ("MESC") and
Mobile Energy Services Holdings, Inc. filed an adversary proceeding
against Kimberly-Clark Tissue Company in the United States Bankruptcy Court
in Mobile, Alabama. Plaintiffs, as debtors-in-possession, own a
cogeneration complex that provides energy services to KCTC's Mobile
facility. The complaint alleges that: (i) the sale of the cogeneration
complex by KCTC to MESC in December 1994 was a fraudulent transfer;
(ii) KCTC cannot effect a pulp mill closure while it continues to operate
the wastewater treatment facility and "produce pulp" at the Mobile facility;
(iii) Kimberly-Clark's announced pulp mill closure was a repudiation of
the site operating agreements; (iv) KCTC breached the master operating
agreement by failing to give MESC reasonable assistance in developing new
business opportunities for the energy complex after Kimberly-Clark
announced the pulp mill closure; and (v) KCTC failed to allow the sale
of the Mobile pulp mill. The complaint does not specify the amount of
damages demanded.

ITEM 3. LEGAL PROCEEDINGS (CONTINUED)

conditions, MESC filing a plan of reorganization from bankruptcy and the
ultimate approval of that plan by the U.S. Bankruptcy Court. In addition,
the proposed settlement provides MESC with an option to purchase the Mobile
pulp mill at a nominal price; a settlement of all pending litigation and
arbitration between the KCTC and MESC; mutual releases by KCTC, MESC and
its affiliate (the Southern Company and affiliates), and the
representatives of the MESC bondholders; and an agreement by MESC to
terminate the existing tissue mill energy services agreement and to
provide the Mobile tissue mill energy at market rates. This action is
not expected to have a material adverse effect on the Corporation's
business, financial condition or results of operations.

C. The Corporation is subject to routine litigation from time to time, which,
individually or in the aggregate, is not expected to have a material adverse
effect on the Corporation's business, financial condition or results of
operations.

Environmental Matters
- ----------------------

The Corporation has been named a potentially responsible party under the
provisions of the federal Comprehensive Environmental Response, Compensation
and Liability Act, or analogous state statute, 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 the Corporation's
business, financial condition or results of operations.

Notwithstanding its opinion, management believes it appropriate to discuss the
following matters concerning three of these sites where the Corporation's
estimated share of total site remediation costs, if any, cannot be established
on the basis of currently available information:

A. In 1994, Scott received a notice of responsibility from the
Massachusetts Department of Environmental Protection regarding the South
Hadley Site in South Hadley, Massachusetts. The notice implicated Scott
Graphics, Inc., a former Scott subsidiary, as having disposed of hazardous
waste at the site. There have been no significant developments since the
date the Corporation received the notice.

B. In January 1998, the Corporation was notified by the Tennessee
Department of Environment and Conservation of its status as a potentially
liable party at the Bellevue Avenue Landfill in Shelby County, Tennessee.
The Corporation currently lacks adequate information to make a determination
as to the extent of its liability at the site.

<PAGE>
PART I
(Continued)

C. In June 1999, the Corporation was notified that S.D. Warren, a former
division of Scott, had been named as a potentially responsible party at
the Sunrise Landfill in Wayland, Allegan County, Michigan. Scott agreed
to be responsible for S.D. Warren's liability at the site pursuant
to an indemnification agreement between Scott and S.D. Warren. The
Corporation currently lacks adequate information to make a determination as
to the extent of its liability at the site.

<PAGE>
PART I
(Continued)

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

The names and ages of the executive officers of the Corporation as of March 1,
2000, together with certain biographical information, are as follows:

ROBERT E. ABERNATHY, 45, was elected Group President effective January 1,
1997. He is responsible for the global health care business, nonwovens
manufacturing and research, the technical paper business and corporate
research and development. Mr. Abernathy joined the Corporation in 1982. His
past responsibilities in the Corporation have included operations and major
project management in North America. He was appointed Vice President-North
American Diaper Operations in 1992 and Managing Director of Kimberly-Clark
Australia Pty. Limited in 1994.

JOHN W. DONEHOWER, 53, was elected Senior Vice President and Chief Financial
Officer in 1993. Mr. Donehower joined the Corporation in 1974. He was
appointed Director of Finance - Europe in 1978, Vice President, Marketing and
Sales - Nonwovens in 1981, Vice President, Specialty Papers in 1982, Managing
Director, Kimberly-Clark Australia Pty. Limited in 1982, and Vice President,
Professional Health Care, Medical and Nonwoven Fabrics in 1985. He was
appointed President, Specialty Products - U.S. in 1987, and President - World
Support Group in 1990. Mr. Donehower is a director of Eastman Chemical Co.
and Factory Mutual Insurance Company.

O. GEORGE EVERBACH, 61, was elected Senior Vice President - Law and Government
Affairs in 1988. Mr. Everbach joined the Corporation in 1984. His
responsibilities have included direction of legal, human resources and
administrative functions. He was elected Vice President and General Counsel
in 1984; Vice President, Secretary and General Counsel in 1985; and Senior
Vice President and General Counsel in 1986.

THOMAS J. FALK, 41, has served as President and Chief Operating Officer of the
Corporation since his election on November 16, 1999. He previously had been
elected Group President - Tissue, Pulp and Paper in 1998 where he was
responsible for the Corporation's global tissue businesses. He also was
responsible for the Wet Wipes and Neenah Paper sectors, Pulp Operations and
Consumer Business Services, Environment and Energy and Human Resources
organizations. Mr. Falk joined the Corporation in 1983. His prior
responsibilities have included internal audit, finance and strategic analysis,
and operations management. In 1993, he was elected Group President - Infant
and Child Care and has held various senior management positions in the
Corporation's Consumer and Away From Home businesses in North America and
Europe since that time. Mr. Falk is a member of the University of Wisconsin -
Madison School of Business Dean's Advisory Board and serves on the Board of
Directors of Newell Rubbermaid Inc. He has been a director of the Corporation
since November 1999.

<PAGE>
PART I
(Continued)

EXECUTIVE OFFICERS OF THE REGISTRANT (Continued)

WAYNE R. SANDERS, 52, has served as Chief Executive Officer of the Corporation
since 1991 and Chairman of the Board of the Corporation since 1992. He
previously had been elected President and Chief Operating Officer in 1990.
Employed by the Corporation in 1975, Mr. Sanders was appointed Vice President
of Kimberly-Clark Canada Inc., a wholly owned subsidiary of the Corporation,
in 1981 and was appointed Director and President in 1984. Mr. Sanders was
elected Senior Vice President of Kimberly-Clark Corporation in 1985 and was
appointed President - Infant Care Sector in 1987, President - Personal Care
Sector in 1988 and President - World Consumer, Nonwovens and Service and
Industrial Operations in 1990. Mr. Sanders is a director of Adolph Coors
Company, Coors Brewing Company, Texas Instruments Incorporated and Chase Bank
of Texas, National Association. He also is a member of the Marquette
University Board of Trustees and is a national trustee of the Boys and Girls
Clubs of America. He has been a director of the Corporation since 1989.

KATHI P. SEIFERT, 50, was elected Executive Vice President in November 1999.
She is responsible for the Infant Care, Child Care, Feminine Care, and Adult
Care business sectors, the Safety and Quality Assurance team and the U.S. and
Canadian Sales organizations, and leads a team responsible for the
Corporation's global personal care businesses. Ms. Seifert joined
Kimberly-Clark in 1978. Her responsibilities in the Corporation have included
various marketing positions within the Away From Home, Consumer Tissue and
Feminine Care business sectors. She was appointed President - Feminine Care
Sector in 1991, was elected Group President - Feminine and Adult Care in 1994,
elected Group President - North American Consumer Products in January 1995,
elected Group President - North American Personal Care Products in July 1995
and elected Group President - Global Personal Care Products in April 1998.
Ms. Seifert is a member of the Board of Directors of Eli Lilly and Company and
Aid Association for Lutherans.

<PAGE>
PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS

The dividend and market price data included in Note 14 to the Consolidated
Financial Statements, and the information set forth under the captions
"Dividends and Dividend Reinvestment Plan" and "Stock Exchanges" contained in
the 1999 Annual Report to Stockholders are incorporated in this Item 5 by
reference.

As of March 17, 2000, the Corporation had 52,331 holders of record of its
common stock.

<PAGE>
PART II

ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

Year Ended December 31
(Millions of dollars, -----------------------------------------------------
except per share amounts) 1995 1996 1997 1998 1999
- -------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Net Sales . . . . . . . . $13,373.0 $13,149.1 $12,546.6 $12,297.8 $13,006.8
Gross Profit. . . . . . . 4,544.9 4,688.5 4,607.6 4,597.6 5,325.2
Operating Profit. . . . . 942.3 1,666.0 1,486.1 1,697.7 2,435.4
Share of Net Income of
Equity Companies . . . 113.3 152.4 157.3 137.1 189.6
Income from Continuing
Operations Before
Extraordinary Items and
Cumulative Effect of
Accounting Change. . . 507.2 1,035.4 985.4 1,114.3 1,668.1
Per Share Basis:
Basic . . . . . . . .91 1.84 1.77 2.02 3.11
Diluted . . . . . . .90 1.83 1.76 2.01 3.09
Net Income. . . . . . . . 507.2 1,035.4 1,002.9 1,103.1 1,668.1
Per Share Basis:
Basic . . . . . . . .91 1.84 1.80 2.00 3.11
Diluted . . . . . . .90 1.83 1.79 1.99 3.09
Cash Dividends Per Share
Declared . . . . . . . .90 .92 .96 1.00 1.04
Paid . . . . . . . . . .90 .92 .95 .99 1.03
Total Assets. . . . . . . $11,561.0 $11,820.4 $11,417.1 $11,687.8 $12,815.5
Long-Term Debt. . . . . . 1,984.7 1,738.6 1,803.9 2,068.2 1,926.6
Stockholders' Equity. . . 4,141.3 4,595.0 4,340.3 4,031.5 5,093.1
</TABLE>

NOTES TO SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

(1) Included in the selected financial data for 1995 are the following items:
Diluted
Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Income per Share
- ----------------------------------------------------- ---------- ------ ----------

<S> <C> <C> <C>
Charges for business improvement and other programs. . . $814.3 $596.9
Unusual charges, net . . . . . . . . . . . . . . . . . . 21.7 14.8
Net gains on asset disposals . . . . . . . . . . . . . . (126.6) (78.9)
Change in value of Mexican peso. . . . . . . . . . . . . - 38.5
------ ------

Total. . . . . . . . . . . . . . . . . . . . . . . . . . $709.4 $571.3 $1.01
====== ====== =====
</TABLE>

<PAGE>
PART II
ITEM 6. SELECTED FINANCIAL DATA (Continued)

NOTES TO SELECTED FINANCIAL DATA

(2) Included in the selected financial data for 1996 are the following items:
<TABLE>

Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
- --------------------------------------------------- -------- ---------- ------ ----------
<S> <C> <C> <C> <C>
Charges for business improvement and other
programs . . . . . . . . . . . . . . . . . . . . . $154.2 $429.9 $328.6
Gains on asset disposals . . . . . . . . . . . . . . - (93.6) (72.6)
Change in value of Mexican peso. . . . . . . . . . . - - 2.3
Restructuring of Mexican operations. . . . . . . . . - - 5.5
------ ------ ------

Total. . . . . . . . . . . . . . . . . . . . . . . . $154.2 $336.3 $263.8 $.46
====== ====== ====== ====
</TABLE>

(3) Included in the selected financial data for 1997 are the following items:
<TABLE>

Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
- --------------------------------------------------- -------- ---------- ------ ----------
<S> <C> <C> <C> <C>
Charges for business improvement and other
programs . . . . . . . . . . . . . . . . . . . . . $128.8 $478.3 $366.3
Gain on asset disposal . . . . . . . . . . . . . . . - (26.5) (16.8)
Gain on sale of K-C de Mexico's Regio business . . . - - (16.3)
Extraordinary gains, net of income taxes . . . . . . - - (17.5)
------ ------ ------

Total. . . . . . . . . . . . . . . . . . . . . . . . $128.8 $451.8 $315.7 $.57
====== ====== ====== ====
</TABLE>

(4) Included in the selected financial data for 1998 are the following
items:
<TABLE>

Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
- --------------------------------------------------- -------- ---------- ------ ----------
<S> <C> <C> <C> <C>
Charges for business improvement and other
programs . . . . . . . . . . . . . . . . . . . . . $191.6 $377.8 $276.8
Mobile pulp mill fees and related severances . . . . 42.3 42.3 25.9
Gain on asset disposal . . . . . . . . . . . . . . . - (140.0) (78.3)
Change in value of Mexican peso. . . . . . . . . . . - - 9.2
Cumulative effect of accounting change, net of
income taxes . . . . . . . . . . . . . . . . . . . . - - 11.2
------ ------ ------

Total. . . . . . . . . . . . . . . . . . . . . . . . $233.9 $280.1 $244.8 $.45
====== ====== ====== ====
</TABLE>

<PAGE>
PART II
ITEM 6. SELECTED FINANCIAL DATA (Continued)

NOTES TO SELECTED FINANCIAL DATA

(5) Included in the selected financial data for 1999 are the following items:
<TABLE>

Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
- --------------------------------------------------- -------- ---------- ------ ----------
<S> <C> <C> <C> <C>
Charges for business improvement and other
programs. . . . . . . . . . . . . . . . . . . . . $69.0 $47.8 $35.6
Business integration and other costs. . . . . . . . 11.2 22.6 14.5
Mobile pulp mill fees and related severances. . . . 9.0 9.0 5.6
Gains on asset disposals. . . . . . . . . . . . . . - (176.7) (112.3)
----- ------ ------

Total . . . . . . . . . . . . . . . . . . . . . . . $89.2 $(97.3) $(56.6) $(.11)
===== ====== ====== =====
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The information set forth under the caption "Management's Discussion and
Analysis" contained in the 1999 Annual Report to Stockholders is incorporated
in this Item 7 by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information set forth under the caption "Management's Discussion and
Analysis - Market Risk Sensitivity and Inflation Risks" contained in the 1999
Annual Report to Stockholders is incorporated in this Item 7A by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of the Corporation and its consolidated
subsidiaries and the independent auditors' report thereon contained in the
1999 Annual Report to Stockholders are incorporated in this Item 8 by
reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

<PAGE>
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The section of the 2000 Proxy Statement captioned "Certain Information
Regarding Directors and Nominees" under "Proposal 1. Election of Directors"
identifies members of the board of directors of the Corporation and nominees,
and is incorpor-ated in this Item 10 by reference.

See also "EXECUTIVE OFFICERS OF THE REGISTRANT" appearing in Part I hereof.

ITEM 11. EXECUTIVE COMPENSATION

The information in the section of the 2000 Proxy Statement captioned
"Executive Compensation" under "Proposal 1. Election of Directors" is
incorporated in this Item 11 by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information in the section of the 2000 Proxy Statement captioned "Security
Ownership of Management" under "Proposal 1. Election of Directors" is
incorporated in this Item 12 by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information in the section of the 2000 Proxy Statement captioned "Certain
Transactions and Business Relationships" under "Proposal 1. Election of
Directors" is incorporated in this Item 13 by reference.

<PAGE>
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A) DOCUMENTS FILED AS PART OF THIS REPORT.

1. Financial statements:

The Consolidated Balance Sheet as of December 31, 1999 and 1998, and the
related Consolidated Statements of Income, Stockholders' Equity and Cash Flow
for the years ended December 31, 1999, 1998 and 1997, and the related Notes
thereto, and the Indepen-dent Auditors' Report of Deloitte & Touche LLP
thereon are incorporated in Part II, Item 8 of this Form 10-K by reference to
the financial statements contained in the 1999 Annual Report to Stockholders.
In addition, related reports of Deloitte & Touche LLP are included herein.

2. Financial statement schedule:

The following information is filed as part of this Form 10-K and should be
read in conjunction with the financial statements contained in the 1999 Annual
Report to Stockholders.

Independent Auditors' Report

Schedule for Kimberly-Clark Corporation and Subsidiaries:
Schedule II Valuation and Qualifying Accounts

All other schedules have been omitted because they were not applicable or
because the required information has been included in the financial statements
or notes thereto.

3. Exhibits:

Exhibit No. (3)a. Restated Certificate of Incorporation, dated June 12, 1997.

Exhibit No. (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. 333-17367).

Exhibit No. (4). Copies of instruments defining the rights of holders of
long-term debt will be furnished to the Securities and Exchange Commission on
request.

Exhibit No. (10)a. Management Achievement Award Program, as amended and
restated as of January 1, 1998, incorporated by reference to Exhibit No. (10)a
of the Corporation's Annual Report on Form 10-K for the year ended December
31, 1997.

Exhibit No. (10)b. Executive Severance Plan, as amended and restated as of
December 10, 1998, incorporated by reference to Exhibit No. (10)b to the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1998.

Exhibit No. (10)c. Fourth Amended and Restated Deferred Compensation Plan for
Directors, incorporated by reference to Exhibit No. (10)c of the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1996.

<PAGE>
PART IV
(Continued)

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(Continued)

Exhibit No. (10)d. 1986 Equity Participation Plan, as amended effective
November 20, 1997, incorporated by reference to Exhibit No. (10)d of the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1997.

Exhibit No. (10)e. 1992 Equity Participation Plan, as amended effective
November 15, 1999.

Exhibit No. (10)f. Deferred Compensation Plan, as amended effective June 9,
1999.

Exhibit No. (10)g. Outside Directors' Stock Compensation Plan, incorporated by
reference to Exhibit No. 4.5 to the Corporation's Registration Statement on
Form S-8 filed with the Securities and Exchange Commission on April 18, 1996
(File No. 33-02607).

Exhibit No. (10)h. Supplemental Benefit Plan to Salaried Employees' Retirement
Plan, amended and restated as of November 17, 1994, incorporated by reference
to Exhibit No. (10)i of the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1996.

Exhibit No. (10)i. Second Supplemental Benefit Plan to Salaried Employees'
Retirement Plan, amended and restated as of November 17, 1994, incorporated by
reference to Exhibit No. (10)j of the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1996.

Exhibit No. (10)j. Retirement Contribution Excess Benefit Program, as amended
and restated as of August 19, 1998, incorporated by reference to Exhibit (10)k
of the Corporation's Annual Report on Form 10-K for the year ended December
31, 1998.

Exhibit No. (10)k. 1999 Restricted Stock Plan, effective as of January 1,
1999, incorporated by reference to Exhibit No. 4.5 to the Corporation's
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission on February 3, 1999 (File No. 333-71661).

Exhibit No. (12). Computation of ratio of earnings to fixed charges for the
five years ended December 31, 1999.

Exhibit No. (13). Portions of the Corporation's 1999 Annual Report to
Stockholders incorporated by reference in this Form 10-K.

Exhibit No. (21). Subsidiaries of the Corporation.

Exhibit No. (23). Independent Auditors' Consent of Deloitte & Touche LLP.

<PAGE>
PART IV
(Continued)

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(Continued)

Exhibit No. (24). Powers of Attorney.

Exhibit No. (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-K.

(B) REPORTS ON FORM 8-K

The Corporation filed on December 3, 1999 a Current Report on Form 8-K, dated
November 30, 1999, in connection with an improved product, the Corporation's
outlook and other matters.

<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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

March 24, 2000

By: /s/ John W. Donehower
-----------------------------
John W. Donehower
Senior Vice President and
Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

/s/ Wayne R. Sanders
- --------------------------------- Chairman of the Board March 24, 2000
Wayne R. Sanders and Chief Executive Officer
and Director
(principal executive officer)

/s/ John W. Donehower
- --------------------------------- Senior Vice President and March 24, 2000
John W. Donehower Chief Financial Officer
(principal financial officer)

/s/ Randy J. Vest
- --------------------------------- Vice President and March 24, 2000
Randy J. Vest Controller
(principal accounting officer)

Directors

John F. Bergstrom Claudio X. Gonzalez
Pastora San Juan Cafferty Louis E. Levy
Paul J. Collins Frank A. McPherson
Robert W. Decherd Linda Johnson Rice
Thomas J. Falk Wolfgang R. Schmitt
William O. Fifield Randall L. Tobias

By: /s/ O. George Everbach
--------------------------------------- March 24, 2000
O. George Everbach, Attorney-in-Fact
<PAGE>
INDEPENDENT AUDITORS' REPORT

KIMBERLY-CLARK CORPORATION:

We have audited the consolidated financial statements of Kimberly-Clark
Corporation as of December 31, 1999 and 1998, and for each of the three years
in the period ended December 31, 1999, and have issued our report thereon
dated January 24, 2000; such consolidated financial statements and report are
included in your Annual Report and are incorporated herein by reference. Our
audits also included the consolidated financial statement schedule of
Kimberly-Clark Corporation, listed in Item 14. This consolidated financial
statement schedule is the responsibility of the Corporation's management. Our
responsibility is to express an opinion on the financial statement schedule
based on our audits. In our opinion, the consolidated financial statement
schedule listed in Item 14, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

/s/ DELOITTE & TOUCHE LLP
- ---------------------------

DELOITTE & TOUCHE LLP

Dallas, Texas
January 24, 2000

SCHEDULE II Kimberly-Clark Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(Millions of dollars)

ADDITIONS DEDUCTIONS
------------------------- ---------------
BALANCE AT CHARGED TO CHARGED TO WRITE-OFFS BALANCE
BEGINNING COSTS AND OTHER AND DISCOUNTS AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS(A) ALLOWED PERIOD
- ------------------- ----------- ----------- ----------- -------------- ---------

<S> <C> <C> <C> <C> <C>
DECEMBER 31, 1999
Allowances deducted from
assets to which they apply

Allowances for doubtful
accounts . . . . . . . . . . . . $51.5 $ 23.8 $(3.1) $ 21.3 (b) $50.9

Allowances for sales
discounts. . . . . . . . . . . . 15.8 176.4 (.6) 170.9 (c) 20.7

DECEMBER 31, 1998
Allowances deducted from
assets to which they apply

Allowances for doubtful
accounts . . . . . . . . . . . . $37.8 $ 21.5 $3.1 $ 10.9 (b) $51.5

Allowances for sales
discounts. . . . . . . . . . . . 22.1 182.5 .2 189.0 (c) 15.8

DECEMBER 31, 1997
Allowances deducted from
assets to which they apply

Allowances for doubtful
accounts . . . . . . . . . . . . $33.0 $ 12.3 $ 2.2 $ 9.7 (b) $37.8

Allowances for sales
discounts. . . . . . . . . . . . 13.3 174.5 7.8 173.5 (c) 22.1
</TABLE>

(a) Includes bad debt recoveries and the effects of changes in foreign
currency exchange rates. 1997 includes the balances of Tecnol
Medical Products, Inc. acquired in December 1997.

(b) Primarily uncollectible receivables written off.

SCHEDULE II Kimberly-Clark Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(Millions of dollars)

ADDITIONS DEDUCTIONS
------------------------ -----------------
BALANCE AT CHARGED TO CHARGED TO WRITE-OFFS BALANCE
BEGINNING COSTS AND OTHER AND AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS RECLASSIFICATIONS PERIOD
- ------------------- ----------- ----------- ----------- ----------------- ---------

1998 AND 1997 PLANS

DECEMBER 31, 1999
Contra assets deducted from
assets to which they apply

Inventory . . . . . . . . . . . . $10.9 $(.3) $ - $10.6 $ -

Other Assets. . . . . . . . . . . .5 (.5) - - -

DECEMBER 31, 1998
Contra assets deducted from
assets to which they apply

Inventory . . . . . . . . . . . . $23.8 $4.1 $ - $17.0 $10.9

Other Assets. . . . . . . . . . . 12.1 .2 - 11.8 .5

DECEMBER 31, 1997
Contra assets deducted from
assets to which they apply

Inventory . . . . . . . . . . . . $ - $28.8 $ - $5.0 $23.8

Other Assets. . . . . . . . . . . - 15.1 - 3.0 12.1

</TABLE>

SCHEDULE II Kimberly-Clark Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
(Millions of dollars)

1995 PLAN

DECEMBER 31, 1998
Contra assets deducted from
assets to which they apply

Inventory. . . . . . . . . . . . . $.6 $- $- $.6 $-

DECEMBER 31, 1997
Contra assets deducted from
assets to which they apply

Accounts receivable. . . . . . . . $.6 $- $- $.6 $-

Inventory. . . . . . . . . . . . . 14.1 (3.1) - 10.4 .6

Other assets . . . . . . . . . . . .5 (.5) - - -
</TABLE>

SCHEDULE II Kimberly-Clark Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(Millions of dollars)

ADDITIONS
------------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS AND OTHER AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS(A) PERIOD
- ------------------- ----------- ----------- ----------- ------------- ---------

DECEMBER 31, 1999

Deferred Taxes
Valuation Allowance. . . . . . . $271.9 $25.7 $- $ 41.5 $256.1

DECEMBER 31, 1998

Deferred Taxes
Valuation Allowance. . . . . . . $203.0 $63.4 $- $(5.5) $271.9

DECEMBER 31, 1997

Deferred Taxes
Valuation Allowance. . . . . . . $174.3 $72.4 $- $43.7 $203.0
</TABLE>

(a) Includes the net currency effects of translating valuation allowances
at current rates under SFAS No. 52 of $(39.4) million in 1999, $15.6
million in 1998 and $(26.0) million in 1997. Included in this column
are also expired income tax loss carryforwards of $15.8 million in
1998 and $16.9 million in 1997. These items offset deferred tax assets
resulting in no effect on the consolidated balance sheet.

<PAGE>

INDEX TO DOCUMENTS FILED AS PART OF THIS REPORT.
________________________________________________________________

DESCRIPTION
-----------

Consolidated financial statements, incorporated by reference

Independent Auditors' Reports, incorporated by reference

Independent Auditors' Reports

Schedule for Kimberly-Clark Corporation and Subsidiaries:
Schedule II Valuation and Qualifying Accounts

Exhibit No. (3)a. Restated Certificate of Incorporation, dated June 12, 1997.

Exhibit No. (4). Copies of instruments defining the rights of holders of
long-term debt will be furnished to the Securities and Exchange Commission on
request.

Exhibit No. (10)e. 1992 Equity Participation Plan, as amended effective
November 15, 1999.

Exhibit No. (10)f. Deferred Compensation Plan, as amended effective June 9,
1999.

<PAGE>
INDEX TO DOCUMENTS FILED AS PART OF THIS REPORT.
(continued)
_________________________________________________________________

DESCRIPTION
-----------

Exhibit No. (12). Computation of ratio of earnings to fixed charges for the
five years ended December 31, 1999.

Exhibit No. (13). Portions of the Corporation's 1999 Annual Report to
Stockholders incorporated by reference in this Form 10-K.

Exhibit No. (21). Subsidiaries of the Corporation.

Exhibit No. (23). Independent Auditors' Consent of Deloitte & Touche LLP.

Exhibit No. (24). Powers of Attorney.

Exhibit No. (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-K.

Exhibit No. (3)a
RESTATED

CERTIFICATE OF INCORPORATION

KIMBERLY-CLARK CORPORATION

JUNE 12, 1997

<PAGE>
RESTATED CERTIFICATE OF INCORPORATION

KIMBERLY-CLARK CORPORATION

The date of filing of the original certificate of incorporation of this
Corporation with the Secretary of State was June 29, 1928.

ARTICLE I

The name of this Corporation is KIMBERLY-CLARK CORPORATION.

ARTICLE II

Its registered office in the State of Delaware is located at Corporation
Trust Center, 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name and address of its registered agent is The Corporation Trust
Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware. The Corporation shall possess and may exercise all powers and
privileges necessary or convenient to effect such purpose and all powers and
privileges now or hereafter conferred by the laws of Delaware upon
corporations formed under the General Corporation Law of Delaware.

ARTICLE IV

The total number of shares of all classes of capital stock which the
Corporation shall have the authority to issue is one billion, two hundred and
twenty million (1,220,000,000) shares which shall be divided into two classes
as follows:

(a) Twenty million (20,000,000) shares of Preferred Stock without par
value; and

(b) One billion, two hundred million (1,200,000,000) shares of Common
Stock of the par value of One Dollar and Twenty-five Cents ($1.25)
per share.

ARTICLE V

A statement of the voting powers and of the designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations and restrictions thereof, of each class of stock
of the Corporation, is as follows:

(1) In General

No holders of shares of this Corporation of any class, or of bonds,
debentures or other securities convertible into stock of any class, shall be
entitled as of right to subscribe for, purchase, or receive any stock of any
class whether now or hereafter authorized, or any bonds, debentures or other
securities whether now or hereafter authorized, convertible into stock of any
class, or any stock into which said bonds, debentures or other securities may
be convertible, and all such additional shares of stock, debentures or other
securities, together with the stock into which the same may be converted, may
be issued and disposed of by the Board of Directors to such persons and on
such terms and for such consideration (as far as may be permitted by law) as
the Board of Directors in their absolute discretion may deem advisable.

All persons who shall acquire stock in the Corporation shall acquire the
same subject to the provisions of this Certificate of Incorporation.

(2) Preferred Stock

The Preferred Stock may be issued from time to time in one or more
series, with such distinctive serial designations as may be stated or
expressed in the resolution or resolutions providing for the issue of such
stock adopted from time to time by the Board of Directors; and in such
resolution or resolutions providing for the issue of shares of each particular
series, the Board of Directors is also expressly authorized to fix: the
consideration for which the shares of such series are to be issued; the number
of shares constituting such series; the rate of dividends upon which and the
times at which dividends on shares of such series shall be payable and the
preference, if any, which such dividends shall have relative to dividends on
shares of any other class or classes or any other series of stock of the
Corporation; whether such dividends shall be cumulative or noncumulative, and
if cumulative, the date or dates from which dividends on shares of such series
shall be cumulative; the voting rights, if any, to be provided for shares of
such series; the rights, if any, which the holders of shares of such series
shall have in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation; the rights, if
any, which the holders of shares of such series shall have to convert such
shares into or exchange such shares for shares of any other class or classes
or any other series of stock of the Corporation and the terms and conditions,
including price and rate of exchange, of such conversion or exchange; the
redemption price or prices and other terms of redemption, if any, for shares
of such series; and any and all other preferences and relative, participating,
optional or other special rights and qualifications, limitations or
restrictions thereof pertaining to shares of such series.

(3) Common Stock

(a) Subject to preferences and rights to which holders of stock other
than the Common Stock may have become entitled by resolution or resolutions of
the Board of Directors as hereinbefore provided, such dividends (payable in
cash, stock, or otherwise) as may be determined by the Board of Directors may
be declared and paid out of funds legally available therefor upon the Common
Stock from time to time.

(b) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, the holders of the Common Stock shall be entitled
to share ratably in all assets available for distribution to the shareholders,
subject to preferences and rights to which the holders of stock other than the
Common Stock may have become entitled by resolution or resolutions of the
Board of Directors as hereinbefore provided.

(c) The holders of Common Stock shall be entitled to one vote for each of
the shares held by them of record at the time for determining holders thereof
entitled to vote.

(4) Series A Junior Participating Preferred Stock

Pursuant to authority conferred by this Article V upon the Board of
Directors of the Corporation, the Board of Directors created a series of
2,000,000 shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock by filing an Amended Certificate of Designations
of the Corporation with the Secretary of State of the State of Delaware on
July 12, 1995, and the voting powers, designations, preferences and relative,
participating and other special rights, and the qualifications, limitations
and restrictions thereof, of the Series A Junior Participating Preferred Stock
of the Corporation are as set forth in Annex 1 hereto and are incorporated
herein by reference.

ARTICLE VI

(1) The following corporate action shall require the approval, given at a
stockholders' meeting or by consent in writing, of the holders of at least
two-thirds of the stock issued and outstanding and entitled to vote thereon:

(a) the dissolution of the Corporation, or

(b) the sale, lease, exchange or conveyance of all or substantially all
of the property and assets of the Corporation, or

(c) the adoption of an agreement of merger or consolidation, but no
stockholder approval shall be required for any merger or consolidation which,
under the Laws of Delaware, need not be approved by the stockholders of the
Corporation.

(2) The number of authorized shares of any class or classes of stock may
be increased or decreased by the approval of the holders of a majority of all
of the stock of the Corporation entitled to vote thereon, except to the extent
that, in the resolution or resolutions providing for the issuance of a class
or series of stock, the Board of Directors shall specify that approval of the
holders of one or more classes or series of stock shall be required to
increase or decrease the number of authorized shares of one or more classes or
series of stock.

(3) Any action required or permitted to be taken by the stockholders of
the Corporation must be effected at a duly called annual or special meeting of
stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders, except for stockholder approvals required by
Section (1) of this Article VI.

(4) Meetings of stockholders of the Corporation may be called only by the
Board of Directors pursuant to a resolution adopted by the affirmative vote of
a majority of the entire Board of Directors, by the Chairman of the Board, or
by the Chief Executive Officer.

ARTICLE VII

The private property of the stockholders of the Corporation shall not be
subject to the payment of corporate debts to any extent whatever.

ARTICLE VIII

(1) Power of the Board of Directors. The business and affairs of the
Corporation shall be managed under the direction of its Board of Directors. In
furtherance, and not in limitation, of the powers conferred by the laws of the
State of Delaware, the Board of Directors is expressly authorized:

(a) to make, alter, amend or repeal the By-Laws of the Corporation;
provided, however, that no By-Laws hereafter adopted shall invalidate any
prior act of the Directors that would have been valid if such By-Laws had not
been adopted;

(b) to determine the rights, powers, duties, rules and procedures that
affect the power of the Board of Directors to direct the business and affairs
of the Corporation, including the power to designate and empower committees of
the Board of Directors, to elect, appoint and empower the officers and other
agents of the Corporation, and to determine the time and place of, and the
notice requirements for, Board meetings, as well as quorum and voting
requirements (except as otherwise provided in this Certificate of
Incorporation) for, and the manner of taking, Board action; and

(c) to exercise all such powers and do all such acts as may be exercised
by the Corporation, subject to the provisions of the laws of the State of
Delaware, this Certificate of Incorporation, and any By-Laws of the
Corporation.

(2) Number of Directors. The number of Directors constituting the entire
Board of Directors shall be not less than 11 nor more than 25. The specific
number of Directors constituting the entire Board of Directors shall be as
authorized from time to time exclusively by the affirmative vote of a majority
of the entire Board of Directors. As used in this Certificate of
Incorporation, the term "entire Board of Directors" means the total authorized
number of Directors that the Corporation would have if there were no
vacancies.

(3) Classified Board. At the 1986 Annual Meeting of Stockholders, the
Directors shall be divided into three classes, with respect to the time that
they severally hold office, as nearly equal in number as possible, with the
initial term of office of the first class of Directors to expire at the 1987
Annual Meeting of Stockholders, the initial term of office of the second class
of Directors to expire at the 1988 Annual Meeting of Stockholders and the
initial term of office of the third class of Directors to expire at the 1989
Annual Meeting of Stockholders. Commencing with the 1987 Annual Meeting of
Stockholders, Directors elected to succeed those Directors whose terms have
thereupon expired shall be elected for a term of office to expire at the third
succeeding Annual Meeting of Stockholders after their election, and upon the
election and qualification of their successors. A person elected as a Director
shall be deemed a Director as of the time of such election. If the number of
Directors is changed, any increase or decrease shall be apportioned among the
classes so as to maintain or attain, if possible, an equal number of Directors
in each class, but in no case will a decrease in the number of Directors
shorten the term of any incumbent Director. If such equality is not possible,
the increase or decrease shall be apportioned among the classes in such a way
that the difference in the number of Directors in any two classes shall not
exceed one.

(4) Nominations. Subject to the rights of holders of any series of
Preferred Stock or any other class of capital stock of the Corporation (other
than the Common Stock) then outstanding, nominations for the election of
Directors may be made by the affirmative vote of a majority of the entire
Board of Directors or by any stockholder of record entitled to vote generally
in the election of Directors. However, any stockholder of record entitled to
vote generally in the election of Directors may nominate one or more persons
for election as Directors at a meeting only if a written notice of such
stockholder's intent to make such nomination or nominations, meeting the
requirements described below, has been given, either by personal delivery or
by United States mail, postage prepaid, to the Secretary of the Corporation,
and received by the Corporation, not less than 50 days nor more than 75 days
prior to the meeting; provided, however, that in the event that less than 60
days' notice or prior public disclosure of the date of the meeting is given or
made to stockholders, notice by the stockholder to be timely must be so
received not later than the close of business on the 10th day following the
day on which such notice of the date of meeting was mailed or such public
disclosure was made, whichever first occurs. Each such notice to the Secretary
shall set forth: (i) the name and address of record of the stockholder who
intends to make the nomination; (ii) a representation that the stockholder is
a holder of record of shares of the Corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice; (iii) the name, age, business
and residence addresses, and principal occupation or employment of each
nominee; (iv) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the stockholder; (v) such other information regarding each nominee
proposed by such stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission; and (vi) the consent of each nominee to serve as a Director of the
Corporation if so elected. The Corporation may require any proposed nominee to
furnish such other information as may reasonably be required by the
Corporation to determine the eligibility of such proposed nominee to serve as
a Director of the Corporation. The presiding officer of the meeting may, if
the facts warrant, determine that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded.

(5) Vacancies. Subject to the rights of the holders of any series of
Preferred Stock or any other class of capital stock of the Corporation (other
than the Common Stock) then outstanding, any vacancies in the Board of
Directors for any reason and any newly created Directorships resulting by
reason of any increase in the number of Directors may, if occurring prior to
the expiration of the term of office of the class in which such vacancy or
increase occurs, be filled only by the Board of Directors, acting by the
affirmative vote of a majority of the remaining Directors then in office,
although less than a quorum, and any Directors so elected shall hold office
until the next election of the class for which such Directors have been
elected and until their successors are elected and qualified.

(6) Removal of Directors. Subject to the rights of the holders of any
series of Preferred Stock or any other class of capital stock of the
Corporation (other than the Common Stock) then outstanding, (i) any Director,
or the entire Board of Directors, may be removed from office at any time prior
to the expiration of his or their term of office, but only for cause and only
by the affirmative vote of the holders of record of outstanding shares
representing at least eighty percent (80%) of the voting power of all of the
shares of capital stock of the Corporation then entitled to vote generally in
the election of Directors, voting together as a single class, and (ii) any
Director may be removed from office by the affirmative vote of a majority of
the entire Board of Directors, at any time prior to the expiration of his term
of office, but only for cause.

ARTICLE IX

Whenever a compromise or arrangement is proposed between this Corporation
and its creditors or any class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof, or on the application
of any receiver or receivers appointed for this Corporation under the
provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Corporation, as
the case may be, to be summoned in such manner as the said Court directs. If a
majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of
this Corporation, as the case may be, agree to any compromise or arrangement
and to any reorganization of this Corporation as a consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the Court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or
on all the stockholders or class of stockholders, of this Corporation, as the
case may be, and also on this Corporation.

ARTICLE X

(1) Certain Definitions. For the purposes of this Article X and the
second proviso of Article XI:

A. "Business Combination" means:

(i) any merger or consolidation of the Corporation or any Subsidiary with
(a) an Interested Stockholder or (b) any other Person (whether or not itself
an Interested Stockholder) which is, or after such merger or consolidation
would be, an Affiliate or Associate of an Interested Stockholder; or

(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with, or
proposed by or on behalf of, an Interested Stockholder or an Affiliate or
Associate of an Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate Fair Market Value of not less than one percent
(1%) of the total assets of the Corporation as reported in the consolidated
balance sheet of the Corporation as of the end of the most recent quarter with
respect to which such balance sheet has been prepared; or

(iii) the issuance or transfer by the Corporation or any Subsidiary (in one
transaction or a series of transactions) of any securities of the Corporation
or any Subsidiary to, or proposed by or on behalf of, an Interested
Stockholder or an Affiliate or Associate of an Interested Stockholder in
exchange for cash, securities or other property (or a combination thereof)
having an aggregate Fair Market Value of not less than one percent (1%) of the
total assets of the Corporation as reported in the consolidated balance sheet
of the Corporation as of the end of the most recent quarter with respect to
which such balance sheet has been prepared; or

(iv) the adoption of any plan or proposal for the liquidation or dissolution
of the Corporation, or any spin-off or split-up of any kind of the Corporation
or any Subsidiary, proposed by or on behalf of an Interested Stockholder or an
Affiliate or Associate of an Interested Stockholder; or

(v) any reclassification of securities (including any reverse stock split), or
recapitalization of the Corporation, or any merger or consolidation of the
Corporation with any Subsidiary or any other transaction (whether or not with
or into or otherwise involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the percentage of the
outstanding shares of (a) any class of equity securities of the Corporation or
any Subsidiary or (b) any class of securities of the Corporation or any
Subsidiary convertible into equity securities of the Corporation or any
Subsidiary, represented by securities of such class which are directly or
indirectly owned by an Interested Stockholder and all of its Affiliates and
Associates; or

(vi) any agreement, contract or other arrangement providing for any one or
more of the actions specified in clauses (i) through (v) of this Section (1)A.

B. "Affiliate" or "Associate" have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on January 1, 1986.

C. "Beneficial Owner" has the meaning ascribed to such term in Rule 13d-3
of the General Rules and Regulations under the Exchange Act, as in effect on
January 1, 1986.

D. "Continuing Director" means: (i) any member of the Board of Directors
of the Corporation who (a) is neither the Interested Stockholder involved in
the Business Combination as to which a vote of Continuing Directors is
provided hereunder, nor an Affiliate, Associate, employee, agent, or nominee
of such Interested Stockholder, or the relative of any of the foregoing, and
(b) was a member of the Board of Directors of the Corporation prior to the
time that such Interested Stockholder became an Interested Stockholder; and
(ii) any successor of a Continuing Director described in clause (i) who is
recommended or elected to succeed a Continuing Director by the affirmative
vote of a majority of Continuing Directors then on the Board of Directors of
the Corporation.

E. "Fair Market Value" means: (i) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not reported on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Exchange Act on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with respect to
a share of such stock during the 30-day period preceding the date in question
on the National Association of Securities Dealers, Inc. Automated Quotations
System or any similar interdealer quotation system then in use, or, if no such
quotation is available, the fair market value on the date in question of a
share of such stock as determined by a majority of the Continuing Directors in
good faith; and (ii) in the case of property other than cash or stock, the
fair market value of such property on the date in question as determined by a
majority of the Continuing Directors in good faith.

F. "Interested Stockholder" means any Person (other than the Corporation
or any Subsidiary, any employee benefit plan maintained by the Company or any
Subsidiary or any trustee or fiduciary with respect to any such plan when
acting in such capacity) who or which:

(i) is, or was at any time within the two-year period immediately prior
to the date in question, the Beneficial Owner of five percent (5%) or more of
the voting power of the then outstanding Voting Stock of the Corporation; or

(ii) is an assignee of, or has otherwise succeeded to, any shares of
Voting Stock of the Corporation of which an Interested Stockholder was the
Beneficial Owner at any time within the two-year period immediately prior to
the date in question, if such assignment or succession shall have occurred in
the course of a transaction, or series of transactions, not involving a public
offering within the meaning of the Securities Act of 1933, as amended.

For the purpose of determining whether a Person is an Interested
Stockholder, the outstanding Voting Stock of the Corporation shall include
unissued shares of Voting Stock of the Corporation of which the Interested
Stockholder is the Beneficial Owner but shall not include any other shares of
Voting Stock of the Corporation which may be issuable pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, warrants or options, or otherwise, to any Person who is not the
Interested Stockholder.

G. A "Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as
any syndicate or group deemed to be a person under Section 14(d)(2) of the
Exchange Act.

H. "Subsidiary" means any corporation of which the Corporation owns,
directly or indirectly, (i) a majority of the outstanding shares of equity
securities of such corporation, or (ii) shares having a majority of the voting
power represented by all of the outstanding shares of Voting Stock of such
corporation. For the purpose of determining whether a corporation is a
Subsidiary, the outstanding Voting Stock and shares of equity securities
thereof shall include unissued shares of which the Corporation is the
Beneficial Owner but shall not include any other shares of Voting Stock of the
corporation which may be issuable pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, warrants or options,
or otherwise, to any Person who is not the corporation.

I. "Voting Stock" means outstanding shares of capital stock of the
relevant corporation entitled to vote generally in the election of Directors.

(2) Higher Vote for Business Combinations. In addition to any affirmative
vote required by law or by this Certificate of Incorporation, and except as
otherwise expressly provided in Section (3) of this Article, any Business
Combination shall require the affirmative vote of the holders of record of
outstanding shares representing at least eighty percent (80%) of the voting
power of the then outstanding shares of the Voting Stock of the Corporation,
voting together as a single class, voting at a stockholders' meeting and not
by consent in writing. Such affirmative vote shall be required notwithstanding
the fact that no vote may be required, or that a lesser percentage may be
specified, by law or in any agreement with any national securities exchange or
otherwise.

(3) When Higher Vote Is Not Required. The provisions of Section (2) of
this Article shall not be applicable to any particular Business Combination,
and such Business Combination shall require only such affirmative vote, if
any, of the stockholders as is required by law and any other provision of this
Certificate of Incorporation, if the conditions specified in either of the
following paragraphs A and B are met.

A. Approval by Continuing Directors. The Business Combination shall have
been approved by the affirmative vote of a majority of the Continuing
Directors, even if the Continuing Directors do not constitute a quorum of the
entire Board of Directors.

B. Form of Consideration, Price and Procedure Requirements. All of the
following conditions shall have been met:

(i) With respect to each share of each class of Voting Stock of the
Corporation (including Common Stock), the holder thereof shall be entitled to
receive on or before the date of the consummation of the Business Combination
(the "Consummation Date"), consideration, in the form specified in subsection
(3)(B)(ii) hereof, with an aggregate Fair Market Value as of the Consummation
Date at least equal to the highest of the following:

(a) the highest per share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid by the Interested
Stockholder to which the Business Combination relates, or by any Affiliate or
Associate of such Interested Stockholder, for any shares of such class of
Voting Stock acquired by it (1) within the two-year period immediately prior
to the first public announcement of the proposal of the Business Combination
(the "Announcement Date") or (2) in the transaction in which it became an
Interested Stockholder, whichever is higher;

(b) the Fair Market Value per share of such class of Voting Stock of the
Corporation on the Announcement Date; and

(c) the highest preferential amount per share, if any, to which the
holders of shares of such class of Voting Stock of the Corporation are
entitled in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation.

(ii) The consideration to be received by holders of a particular class of
outstanding Voting Stock of the Corporation (including Common Stock) as
described in subsection (3)(B)(i) hereof shall be in cash or if the
consideration previously paid by or on behalf of the Interested Stockholder in
connection with its acquisition of beneficial ownership of shares of such
class of Voting Stock consisted in whole or in part of consideration other
than cash, then in the same form as such consideration. If such payment for
shares of any class of Voting Stock of the Corporation has been made in
varying forms of consideration, the form of consideration for such class of
Voting Stock shall be either cash or the form used to acquire the beneficial
ownership of the largest number of shares of such class of Voting Stock
previously acquired by the Interested Stockholder.

(iii) After such Interested Stockholder has become an Interested
Stockholder and prior to the Consummation Date: (a) except as approved by the
affirmative vote of a majority of the Continuing Directors, there shall have
been no failure to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on the outstanding Preferred
Stock of the Corporation, if any; (b) there shall have been (1) no reduction
in the annual rate of dividends paid on the Common Stock of the Corporation
(except as necessary to reflect any subdivision of the Common Stock), except
as approved by the affirmative vote of a majority of the Continuing Directors,
and (2) an increase in such annual rate of dividends as necessary to reflect
any reclassification (including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect of reducing the
number of outstanding shares of Common Stock, unless the failure so to
increase such annual rate is approved by the affirmative vote of a majority of
the Continuing Directors; and (c) such Interested Stockholder shall not have
become the Beneficial Owner of any additional shares of Voting Stock of the
Corporation except as part of the transaction which results in such Interested
Stockholder becoming an Interested Stockholder.

(iv) After such Interested Stockholder has become an Interested
Stockholder, neither such Interested Stockholder nor any Affiliate or
Associate thereof shall have received the benefit, directly or indirectly
(except proportionately as a stockholder of the Corporation), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits
or other tax advantages provided by the Corporation.

(v) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Exchange Act and the
General Rules and Regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be mailed to the stockholders
of the Corporation at least 45 days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is required to
be mailed pursuant to such Act or subsequent provisions thereof).

(4) Powers of Continuing Directors. A majority of the Continuing
Directors shall have the power and duty to determine, on the basis of
information known to them after reasonable inquiry, all facts necessary to
determine compliance with this Article, including, without limitation, (A)
whether a Person is an Interested Stockholder, (B) the number of shares of
Voting Stock of the Corporation beneficially owned by any Person, (C) whether
a Person is an Affiliate or Associate of another, (D) whether the requirements
of paragraph B of Section (3) have been met with respect to any Business
Combination, and (E) whether the assets which are the subject of any Business
Combination have, or the consideration to be received for the issuance or
transfer of securities by the Corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of not less than one percent
(1%) of the total assets of the Corporation as reported in the consolidated
balance sheet of the Corporation as of the end of the most recent quarter with
respect to which such balance sheet has been prepared; and the good faith
determination of a majority of the Continuing Directors on such matters shall
be conclusive and binding for all the purposes of this Article.

(5) No Effect on Fiduciary Obligations.

A. Nothing contained in this Article shall be construed to relieve the
members of the Board of Directors or an Interested Stockholder from any
fiduciary obligation imposed by law.

B. The fact that any Business Combination complies with the provisions of
Section (3) of this Article shall not be construed to impose any fiduciary
duty, obligation or responsibility on the Board of Directors, or any member
thereof, to approve such Business Combination or recommend its adoption or
approval to the stockholders of the Corporation, nor shall such compliance
limit, prohibit or otherwise restrict in any manner the Board of Directors, or
any member thereof, with respect to evaluations of or actions and responses
taken with respect to such Business Combination.

(6) Effect on Other Provisions. The provisions of this Article X are in
addition to, and shall not alter or amend, the provisions of Section (1) of
Article VI of this Certificate of Incorporation.

ARTICLE XI

The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation in the manner now or
hereafter prescribed by law, and all rights and powers conferred herein on
stockholders, directors and officers are subject to this reserved power;
provided that, notwithstanding the fact that a lesser percentage may be
specified by the General Corporation Law of Delaware, the affirmative vote of
the holders of record of outstanding shares representing at least eighty
percent (80%) of the voting power of all of the shares of capital stock of the
Corporation then entitled to vote generally in the election of Directors,
voting together as a single class, shall be required to amend, alter, change,
repeal, or adopt any provision or provisions inconsistent with, Section (2) of
Article V, Sections (3) and (4) of Article VI, and Articles VIII and XI
(except for the second proviso of this Article XI) of this Certificate of
Incorporation unless such amendment, alteration, change, repeal or adoption of
any inconsistent provision or provisions is declared advisable by the Board of
Directors by the affirmative vote of at least seventy-five percent (75%) of
the entire Board of Directors; and provided further that, notwithstanding the
fact that a lesser percentage may be specified by the General Corporation Law
of Delaware, the affirmative vote of the holders of record of outstanding
shares representing at least eighty percent (80%) of the voting power of all
the outstanding Voting Stock of the Corporation, voting together as a single
class, shall be required to amend, alter or repeal, or adopt any provision or
provisions inconsistent with, any provision of Article X or this proviso of
this Article XI, unless such amendment, alteration, repeal, or adoption of any
inconsistent provision or provisions is declared advisable by the Board of
Directors by the affirmative vote of at least seventy-five percent (75%) of
the entire Board of Directors and by a majority of the Continuing Directors.

ARTICLE XII

No Director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
Director as a Director. Notwithstanding the foregoing, a Director shall be
liable to the extent provided by applicable law (i) for breach of the
Director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) pursuant to Section 174 of the General
Corporation Law of the State of Delaware or (iv) for any transaction from
which the Director derived an improper personal benefit. No amendment to or
repeal of these provisions shall apply to or have any effect on the liability
or alleged liability of any Director of the Corporation for or with respect to
any acts or omissions of such Director occurring prior to such amendment or
repeal.

<PAGE>

ANNEX 1

AMENDED

CERTIFICATE OF DESIGNATIONS

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

KIMBERLY-CLARK CORPORATION

(PURSUANT TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW)

Kimberly-Clark Corporation, a corporation organized and existing under
the General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that (i) a Certificate of Designations for
the Series A Participating Preferred Stock of the Corporation (the "Preferred
Stock") was filed with the Secretary of State of the State of Delaware on July
1, 1988, (ii) no shares of the Preferred Stock have been issued or are
outstanding, and (iii) the Board of Directors of the Corporation adopted the
following resolution amending in their entireties the voting powers,
preferences and relative, participating, optional and other special rights of
the Preferred Stock as the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of the General
Corporation Law at a meeting duly called and held on June 8, 1995:

RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the
Certificate of Incorporation, the Board of Directors hereby amends the
provisions of the Series A Junior Participating Preferred Stock of the
Corporation to state the designation and number of shares, and to fix the
relative rights, preferences, and limitations thereof as follows:

Series A Junior Participating Preferred Stock:

Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 2,000,000. Such number of shares may be increased or decreased
by resolution of the Board of Directors; provided, that no decrease shall
reduce the number of shares of Series A Preferred Stock to a number less than
the number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

Section 2. Dividends and Distributions.

(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Common Stock, par
value $1.25 per share (the "Common Stock"), of the Corporation, and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June, September
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions, other than a dividend payable
in shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.

(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on
the Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.

(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof.

Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:

(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

(B) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.

(C) Except as set forth herein, or as otherwise provided by law, holders
of Series A Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.

Section 4. Certain Restrictions.

(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:

(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;

(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;

(iii) redeem or purchase or otherwise acquire for consideration shares of
any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or

(iv) redeem or purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a parity with
the Series A Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among the respective
series or classes.

(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.

Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Certificate of Incorporation, or in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock or
as otherwise required by law.

Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made
(1) to the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock unless, prior thereto, the holders of shares of Series A Preferred Stock
shall have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock, or (2) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all such parity stock in proportion to the total amounts to which
the holders of all such shares are entitled upon such liquidation, dissolution
or winding up. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which holders of shares
of Series A Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

Section 7. Consolidation. Merger. Etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each
share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.

Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.

Section 9. Rank. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all series
of any other class of the Corporation's Preferred Stock.

Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.

IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of
the Corporation by its Vice President and Secretary this 12th day of July,
1995.

/s/ DONALD M. CROOK
----------------------
Name: Donald M. Crook
Title: Vice President and Secretary

<PAGE>
CERTIFICATE OF
INCREASE TO THE AMENDED CERTIFICATE OF DESIGNATIONS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

KIMBERLY-CLARK CORPORATION

(Pursuant to Section 151 of the
Delaware General Corporation Law)

Kimberly-Clark Corporation, a corporation organized and existing under
the General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that (i) an Amended Certificate of
Designations ("Certificate of Designations") for the Series A Junior
Participating Preferred Stock of the Corporation (the "Series A Preferred
Stock") was filed with the Secretary of State of the State of Delaware on July
12, 1995, and (ii) the Board of Directors of the Corporation (the "Board of
Directors") has adopted the following resolution increasing the number of
shares to which the Certificate of Designations applies in accordance with the
provisions of Section 151(g) of the General Corporation Law of the State of
Delaware:

RESOLVED, that pursuant to the authority granted to and vested in the Board of
Directors of this Corporation by Article V of its Restated Certificate of
Incorporation, and in accordance with the provisions of Section 151(g) of the
General Corporation Law of the State of Delaware, the Board of Directors of
the Corporation hereby authorizes and directs that the number of shares of
Preferred Stock, without par value, of the Corporation authorized and
designated as Series A Junior Participating Preferred Stock ("Series A
Preferred Stock") be increased from 2,000,000 shares to 6,000,000 shares.

* * *

IN WITNESS WHEREOF, this Certificate of Increase is executed on behalf of
the Corporation by its Senior Vice President - Law and Government Affairs and
attested by its Vice President and Secretary this 18th day of February, 2000.

KIMBERLY-CLARK CORPORATION

By: /s/ O. George Everbach
------------------------------------------
Name: O. George Everbach
Title: Senior Vice President - Law
and Government Affairs

Attest:
By: /s/ Ronald D. Mc Cray
-------------------------------------------
Name: Ronald D. Mc Cray
Title: Vice President and Secretary

Exhibit No. (10)e

KIMBERLY-CLARK CORPORATION
1992 EQUITY PARTICIPATION PLAN
(AS AMENDED EFFECTIVE NOVEMBER 15, 1999)

1. PURPOSE

This 1992 Equity Participation Plan (the "Plan") of Kimberly-Clark
Corporation (the "Corporation") is intended to aid in attracting and retaining
highly qualified personnel and to encourage those employees who materially
contribute, by managerial, scientific or other innovative means, to the
success of the Corporation or of an Affiliate, to acquire an ownership
interest in the Corporation, thereby increasing their motivation for and
interest in the Corporation's or Affiliate's long-term success.

2. EFFECTIVE DATE

The Plan was originally adopted effective as of April 24, 1992, upon
approval by the stockholders of the Corporation at the 1992 Annual Meeting.
The Plan as hereby amended and restated is effective as of June 9, 1999.

3. DEFINITIONS

"Account" has the meaning set forth in subsection 7(a) of this Plan.
-------

"Affiliate" means any company in which the Corporation owns 20% or more
---------
of the equity interest (collectively, the "Affiliates").

"Award" has the meaning set forth in section 6 of this Plan.
-----

"Award Agreement" means an agreement entered into between the Corporation
---------------
and a Participant setting forth the terms and conditions applicable to the
Award granted to the Participant.

"Base Value" has the meaning set forth in subsection 7(a) of this Plan.
-----------

"Board" means the Board of Directors of the Corporation.
-----

"Book Value" has the meaning set forth in subsection 7(a) of this Plan.
-----------

"Code" means the Internal Revenue Code of 1986 and the regulations
----
thereunder, as amended from time to time.

"Committee" means the Compensation Committee of the Board, provided that
---------
if the requisite number of members of the Compensation Committee are not
Disinterested Persons, the Plan shall be administered by a committee, all of
whom are Disinterested Persons, appointed by the Board and consisting of two
or more directors with full authority to act in the matter. The term
"Committee" shall mean the Compensation Committee or the committee appointed
by the Board, as the case may be.

"Committee Rules" means the interpretative guidelines approved by the
----------------
Committee providing the foundation for administration of this Plan.

"Common Stock" means the common stock, par value $1.25 per share, of the
-------------
Corporation and shall include both treasury shares and authorized but unissued
shares and shall also include any security of the Corporation issued in
substitution, in exchange for, or in lieu of the Common Stock.

"Disinterested Person" means a person who is a "Non-Employee Director"
---------------------
for purposes of rule 16b-3 under the Exchange Act, or any successor provision,
and who is also an "outside director" for purposes of section 162(m) of the
Code or any successor section.

"Dividend Shares" has the meaning set forth in subsection 7(c) of this
----------------
Plan.

"Dividend Share Value" means Dividend Share Value as defined in
----------------------
subsection 7(c) of this Plan.
---

"Exchange Act" means the Securities Exchange Act of 1934 and the rules
-------------
and regulations thereunder, as amended from time to time.

"Fair Market Value" means the reported closing price of the Common Stock,
-----------------
on the relevant date as reported on the composite list used by The Wall Street
Journal for reporting stock prices, or if no such sale shall have been made on
that day, on the last preceding day on which there was such a sale.

"Incentive Stock Option" means an Option which is so defined for purposes
----------------------
of section 422 of the Code or any successor section.

"Insider" has the meaning set forth in subsection 15(k) of this Plan.
-------

"Maturity Date" has the meaning set forth in subsection 7(b) of this
--------------
Plan.

"Maturity Value" has the meaning set forth in subsection 7(c) of this
---------------
Plan.

"Nonqualified Stock Option" means any Option which is not an Incentive
---------------------------
Stock Option.

"Option" means a right to purchase a specified number of shares of Common
------
Stock at a fixed option price equal to no less than 100% of the Fair Market
Value of the Common Stock on the date the Award is granted.

"Option Price" has the meaning set forth in subsection 8(b) of this Plan.
------------

"Participant" means an employee who the Committee selects to participate
-----------
in and receive Awards under the Plan (collectively, the "Participants").

"Participation Shares" means the right, as described in section 7, to
---------------------
receive an amount equal to the increase in Book Value on a specified number of
shares of Common Stock.

"Retirement" and "Retires" means the termination of employment on or
---------- -------
after the date the Participant is entitled to receive immediate payments under
a qualified retirement plan of the Corporation or an Affiliate; provided,
however, if the Participant is not eligible to participate under a qualified
retirement plan of the Corporation or its Affiliates then such Participant
shall be deemed to have retired if his termination of employment is on or
after the date such Participant has attained age 55.

"Severe Financial Hardship" means a severe financial hardship as defined
---------------------------
in subsection 15(h) of this Plan.

"Stock Appreciation Right (SAR)" has the meaning set forth in subsection
-------------------------------
8(j)(i) of this Plan.

"Total and Permanent Disability" means Totally and Permanently Disabled
--------------------------------
as defined in the Kimberly-Clark Corporation Salaried Employees' Retirement
Plan.

4. ADMINISTRATION

The Plan and all Awards granted pursuant thereto shall be administered by
the Committee. The Committee, in its absolute discretion, shall have the power
to interpret and construe the Plan and any Award Agreements; provided,
however, that no such action or determination may increase the amount of
compensation payable that would otherwise be due in a manner that would result
in the disallowance of a deduction to the Corporation under section 162(m) of
the Code or any successor section. Any interpretation or construction of any
provisions of this Plan or the Award Agreements by the Committee shall be
final and conclusive upon all persons. No member of the Board or the
Committee shall be liable for any action or determination made in good faith.

Within 60 days following the close of each calendar year that the Plan is
in operation, the Committee shall make a report to the Board. The report
shall specify the employees who received Awards under the Plan during the
prior year, the form and size of the Awards to the individual employees, and
the status of prior Awards.

The Committee shall have the power to promulgate Committee Rules and
other guidelines in connection with the performance of its obligations, powers
and duties under the Plan, including its duty to administer and construe the
Plan and the Award Agreements.

The Committee may authorize persons other than its members to carry out
its policies and directives subject to the limitations and guidelines set by
the Committee, except that: (a) the authority to grant Awards, the selection
of officers and directors for participation and decisions concerning the
timing, pricing and amount of a grant or Award shall not be delegated by the
Committee; (b) the authority to administer Awards with respect to persons who
are subject to section 16 of the Exchange Act shall not be delegated by the
Committee; (c) any delegation shall satisfy all applicable requirements of
rule 16b-3 of the Exchange Act, or any successor provision; and (d) no such
delegation shall result in the disallowance of a deduction to the Corporation
under section 162(m) of the Code or any successor section. Any person to whom
such authority is granted shall continue to be eligible to receive Awards
under the Plan.

5. ELIGIBILITY

The Committee shall from time to time select the Plan Participants from
those employees whom the Committee determines either to be in a position to
contribute materially to the success of the Corporation or Affiliate or to
have in the past so contributed. Only employees (including officers and
directors who are employees) of the Corporation and its Affiliates are
eligible to participate in the Plan.

6. FORMS OF AWARDS

All Awards under the Plan shall be made in the form of Participation
Shares or Options. The Committee may make Awards solely in Options or
Participation Shares, or in any combination of the two. Notwithstanding
anything in this Plan to the contrary, any Awards shall contain the
restriction on assignability in subsection 15(f) of this Plan to the extent
required under rule 16b-3 of the Exchange Act.

7. PARTICIPATION SHARES

The Committee shall from time to time designate those Participants who
shall receive Participation Share awards. The Committee shall advise such
Participants of their Participation Share awards by a letter indicating the
number of Participation Shares awarded and the following terms and conditions
of the award.

(a) Base Value of Participation Shares. The number of
Participation Shares awarded to a Participant shall be entered in such
Participant's memorandum account (the "Account") established for this purpose
as of the date of the award. Each Participation Share shall be assigned a
base value equal to the book value of one share of Common Stock as of the
close of the fiscal year of the Corporation preceding the date of the award
(the "Base Value"). Book value per share shall be defined for purposes of the
Plan as common stockholders' equity, as reported in the year-end audited
consolidated financial statements, or in the quarter-end unaudited
consolidated financial statements, of the Corporation (as the case may be),
divided by the number of shares of Common Stock outstanding as of the date of
such financial statements, as adjusted pursuant to the provisions of the Plan
(the "Book Value"). The term "book value", when used without initial capital
letters, shall be defined as in the preceding sentence without the
adjustments.

(b) Maturation of Participation Shares. An Award of
Participation Shares shall reach maturity at the close of the fiscal year (i)
in which either the fifth or seventh anniversary, as determined by the
Committee when the Award is granted, of the date the Award occurs, (ii) the
Participant who holds such Award dies, Retires, or becomes Totally and
Permanently Disabled, or (iii) the events described in subsection 9(a) occur,
whichever is earlier (the "Maturity Date"). The Book Value at the Maturity
Date shall be the Book Value as of the close of the fiscal year of the
Corporation in which such Maturity Date occurs.

(c) Participation Share Payments. Each Participant shall be
entitled to receive a payment equal to the sum of the Maturity Value and the
Dividend Share Value for his or her Participation Share award, payable as
provided in subsection 7(g). Such payment shall be payable either in cash, or
partly in cash and up to 50% in Common Stock, as determined by the Committee
when the Award is granted. Such payment in Common Stock shall be payable in
the number of shares of Common Stock that could have been purchased with the
amount equal to the sum of the Maturity Value and the Dividend Share Value for
that portion of his or her Participation Share award which is payable in
Common Stock, at the average of the Fair Market Value of shares of Common
Stock on each business day during the month immediately preceding the month of
such payment. A Participation Share award shall only be paid in Common Stock
as provided above to the extent shares of Common Stock are available under
section 10 hereof, with the remainder settled in cash. To the extent shares
of Common Stock are not fully available under section 10 hereof to fully pay
such portion of the Award in shares of Common Stock then the available shares
of Common Stock shall be paid on a pro rata basis, with the remainder settled
in cash.

The "Maturity Value" of an Award of Participation Shares shall be
equal to the Book Value of the Participation Shares subject to such Award at
the Maturity Date less the Base Value of such Participation Shares.

Participants are not entitled to receive current dividends on their
Participation Shares, but in lieu thereof their Accounts shall be credited
with dividend shares (the "Dividend Shares"). The "Dividend Share Value" of
an award shall be equal to the product of (A) the number of Dividend Shares
credited to a Participant's Account and (B) the Book Value per share of the
Common Stock at the Maturity Date. The amount available for the acquisition
of Dividend Shares for a Participant's Account at the end of each fiscal
quarter of the Corporation shall be determined by multiplying the total cash
dividend declared per share of Common Stock during such quarter (but
subsequent to the date of the award in the case of Participation Shares and
subsequent to the date of crediting in the case of Dividend Shares) by the
total of the Participation Shares and Dividend Shares in the Participant's
Account. The amount so determined shall be divided by the Book Value of one
share of Common Stock as of the close of such fiscal quarter, and the quotient
shall represent the number of full and fractional Dividend Shares credited to
the Participant's Account for that quarter.

(d) Dividend Maintenance. No Dividend Shares shall be credited
to a Participant's Account in any quarter (i) in which the total cash
dividends declared per share of Common Stock are less than $.205 or (ii) in
which the total cash dividends declared per share of Common Stock are less
than the total cash dividends declared per share of Common Stock in the same
quarter of the immediately preceding year, except that the determination of
whether the total cash dividends per share of Common Stock are less than in
the immediately preceding year shall be made after adjustment for the
two-for-one stock split which occurred in 1992 and the two-for-one stock split
which was declared on February 20, 1997, in accordance with generally accepted
accounting principles. When total cash dividends declared per share of Common
Stock are less than total cash dividends declared per share of Common Stock in
the same quarter of the immediately preceding year as described above, the
book value of each Participation Share held by a Participant shall be reduced
by an amount equal to the difference between the cash dividend declared in
such immediately preceding quarter less the cash dividend declared in the
quarter the cash dividend is reduced.

(e) Adjustments. To preserve the benefit to the Participant and
the Corporation contemplated hereby, stock repurchases (other than Common
Stock transferred to the Corporation upon the exercise of an Option pursuant
to subsection 8(f)) or changes in the Corporation's accounting policies during
any fiscal year shall be automatically excluded for purposes of determining
Book Value for purposes of this Plan for such fiscal year and for all future
years with respect to any outstanding Participation Share Awards; provided,
however, that the Committee shall have the discretion to waive any such
exclusion that would have the effect of increasing Book Value (to the extent
that such discretion does not result in the disallowance of a deduction to the
Corporation under section 162(m) of the Code or any successor section). To
further preserve the benefit to the Participant and the Corporation
contemplated hereby, if a cash dividend is declared in any quarter and the
payment date for such cash dividend is later than the immediately subsequent
quarter, then such cash dividend will be deemed to be declared in the quarter
immediately preceding the payment date for all purposes of this Plan, as of
the first date the Board meets in such quarter, or if the Board does not meet
in such quarter, on the first business day of such quarter, including, but not
limited to, the determination of (i) Book Value in subsection 7(a), (ii)
Dividend Shares in subsection 7(c) and (iii) whether the total cash dividends
declared per share of Common Stock in a quarter is less than $.205 or whether
the total cash dividends declared per share of Common Stock are less than the
total cash dividends declared per share of Common Stock in the same quarter of
the immediately preceding year in subsection 7(d).

(f) Absence of Rights as a Stockholder. A Participant shall not
be entitled, on the basis of a Participation Share award, to any of the rights
of a stockholder of the Corporation, including the right to vote and receive
dividends on Common Stock.

(g) Date of Payment. Except as provided in subsection 15(h),
the payment provided for in subsection 7(c) shall be payable within 90 days
following the Maturity Date.

(h) Termination of Employment. Except as provided in subsection
9(a), any Participation Shares or Dividend Shares credited to a Participant's
Account shall be forfeited if the Participant is dismissed or leaves the
service of the Corporation or Affiliate prior to the Maturity Date of the
award for any reason other than death, Retirement or Total and Permanent
Disability.

(i) Termination of Award. After the Corporation makes the cash
payment provided for in subsection 7(c), any rights of the Participant (or the
Participant's estate or beneficiaries) in the Participation Share award shall
end.

8. STOCK OPTIONS

The Committee shall determine and designate from time to time those
Participants to whom Options are to be granted and the number of shares of
Common Stock to be optioned to each. Such Options may be in the form of
Incentive Stock Options or in the form of Nonqualified Stock Options. After
granting an Option to a Participant, the Committee shall cause to be delivered
to the Participant an Award Agreement evidencing the granting of the Option.
The Award Agreement shall be in such form as the Committee shall from time to
time approve. The terms and conditions of all Options granted under the Plan
need not be the same, but all Options must meet the applicable terms and
conditions specified in subsections 8(a) through 8(h).

(a) Period of Option. The Period of each Option shall be no
more than 10 years from the date it is granted.

(b) Option Price. The Option price shall be determined by the
Committee, but shall not in any instance be less than the Fair Market Value of
the Common Stock at the time that the Option is granted (the "Option Price").

(c) Limitations on Exercise. The Option shall not be
exercisable until at least one year has expired after the granting of the
Option, during which time the Participant shall have been in the continuous
employ of the Corporation or an Affiliate. At any time during the period of
the Option after the end of the first year, the Participant may purchase up to
30 percent of the shares covered by the Option; after the end of the second
year, an additional 30 percent; and after the end of the third year, the
remaining 40 percent of the total number of shares covered by the Option;
provided, however, that if the Participant's employment is terminated for any
reason other than death, Retirement or Total and Permanent Disability, the
Option shall be exercisable only for three months following such termination
and only for the number of shares of Common Stock which were exercisable on
the date of such termination. In no event, however, may an Option be
exercised more than 10 years after the date of its grant.

(d) Exercise after Death, Retirement, or Disability. If a
Participant dies or becomes Totally and Permanently Disabled, without having
exercised the Option in full, the remaining portion of such Option may be
exercised, without regard to the limitations in subsection 8(c), within (i)
three years from the date of any such event or (ii) the remaining period of
the Option, whichever is earlier. Upon a Participant's death, the Option may
be exercised by the person or persons to whom such Participant's rights under
the Option shall pass by will or by applicable law or, if no such person has
such rights, by his executor or administrator. If a Participant Retires
without having exercised the Option in full, the remaining portion of such
Option may be exercised, without regard to the limitations in subsection 8(c),
within the remaining period of the Option.

(e) Non-transferability. During the Participant's lifetime,
Options shall be exercisable only by such Participant. Options shall not be
transferable other than by will or the laws of descent and distribution upon
the Participant's death. Notwithstanding anything in this subsection 8(e) to
the contrary, the Committee may grant to designated Participants the right to
transfer Nonqualified Stock Options, to the extent allowed under rule 16b-3 of
the Exchange Act, subject to the terms and conditions of the Committee Rules.

(f) Exercise; Notice Thereof. Options shall be exercised by
delivering to the Corporation, at the office of the Treasurer at the World
Headquarters, written notice of the number of shares with respect to which
Option rights are being exercised and by paying in full the Option Price of
the shares at the time being acquired. Payment may be made in cash, a check
payable to the Corporation or in shares of Common Stock transferable to the
Corporation and having a Fair Market Value on the transfer date equal to the
amount payable to the Corporation. The date of exercise shall be deemed to be
the date the Corporation receives the written notice and payment for the
shares being purchased. A Participant shall have none of the rights of a
stockholder with respect to shares covered by such Option until the
Participant becomes the record holder of such shares.

(g) Purchase for Investment. It is contemplated that the
Corporation will register shares sold to Participants pursuant to the Plan
under the Securities Act of 1933. In the absence of an effective
registration, however, a Participant exercising an Option hereunder may be
required to give a representation that he/she is acquiring such shares as an
investment and not with a view to distribution thereof.

(h) Limitations on Incentive Stock Option Grants.

(i) An Incentive Stock Option shall be granted only to an
individual who, at the time the Option is granted, does not own stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Corporation or Affiliates.

(ii) The aggregate Fair Market Value of all shares with
respect to which Incentive Stock Options are exercisable by a Participant for
the first time during any year shall not exceed $100,000. The aggregate Fair
Market Value of such shares shall be determined at the time the Option is
granted.

(i) Options for Nonresident Aliens. In the case of any Option
awarded to a Participant who is not a resident of the United States or who is
employed by an Affiliate other than an Affiliate that is incorporated, or
whose place of business is, in a State of the United States, the Committee may
(i) waive or alter the conditions set forth in subsections 8(a) through 8(h)
to the extent that such action is necessary to conform such Option to
applicable foreign law, or (ii) take any action, either before or after the
award of such Option, which it deems advisable to obtain approval of such
Option by an appropriate governmental entity; provided, however, that no
action may be taken hereunder if such action would (1) increase any benefits
accruing to any Participants under the Plan, (2) increase the number of
securities which may be issued under the Plan, (3) modify the requirements for
eligibility to participate in the Plan, (4) result in a failure to comply with
applicable provisions of the Securities Act of 1933, the Exchange Act or the
Code or (5) result in the disallowance of a deduction to the Corporation under
section 162(m) of the Code or any successor section.

(j) Election to Receive Cash Rather than Stock.

(i) At the same time as Nonqualified Stock Options are
granted the Committee may also grant to designated Participants the right to
convert a specified number of shares of Common Stock covered by such
Nonqualified Stock Options to cash, subject to the terms and conditions of
this subsection 8(j). For each such Option so converted, the Participant
shall be entitled to receive cash equal to the difference between the
Participant's Option Price and the Fair Market Value of the Common Stock on
the date of conversion. Such a right shall be referred to herein as a Stock
Appreciation Right ("SAR"). Participants to which an SAR has been granted
shall be notified of such grant and of the Options to which such SAR pertains.
An SAR may be revoked by the Committee, in its sole discretion, at any time,
provided, however, that no such revocation may be taken hereunder if such
action would result in the disallowance of a deduction to the Corporation
under section 162(m) of the Code or any successor section.

(ii) A person who has been granted an SAR may exercise such
SAR during such periods as provided for in the rules promulgated under section
16 of the Exchange Act. The SAR shall expire when the period of the subject
Option expires.

(iii) At the time a Participant converts one or more shares
of Common Stock covered by an Option to cash pursuant to an SAR, such
Participant must exercise one or more Nonqualified Stock Options, which were
granted at the same time as the Option subject to such SAR, for an equal
number of shares of Common Stock. In the event that the number of shares and
the Option Price per share of all shares of Common Stock subject to
outstanding Options is adjusted as provided in the Plan, the above SARs shall
automatically be adjusted in the same ratio which reflects the adjustment to
the number of shares and the Option Price per share of all shares of Common
Stock subject to outstanding Options.

9. GOVERNMENT SERVICE, LEAVES OF ABSENCE AND OTHER TERMINATIONS

(a) A Participation Share award shall be considered to reach
maturity as of the close of the fiscal year in which (i) a Participant's
employment terminates because such Participant enters governmental service or
(ii) the Participant's employment with the Corporation or an Affiliate is
terminated by reason of a shutdown or divestiture of all or a portion of the
Corporation's or its Affiliate's business.

(b) An authorized leave of absence, or qualified military leave in
accordance with section 414(u) of the Code, shall not be deemed to be a
termination of employment for purposes of the Plan. A termination of
employment with the Corporation or an Affiliate to accept immediate
reemployment with the Corporation or an Affiliate likewise shall not be deemed
to be a termination of employment for purposes of the Plan.

10. SHARES SUBJECT TO THE PLAN

The number of shares of Common Stock available with respect to all Awards
granted under this Plan shall not exceed 40,000,000 in the aggregate, of which
not more than 40,000,000 shall be available for option and sale, subject to
the adjustment provision set forth in section 12 hereof. The shares of Common
Stock subject to the Plan may consist in whole or in part of authorized but
unissued shares or of treasury shares, as the Board may from time to time
determine. Participation Shares which are retired through forfeiture or
maturity, other than those Participation Shares which are retired through the
payment of Common Stock, and shares subject to Options which become ineligible
for purchase will be available for Awards under the Plan to the extent
permitted by section 16 of the Exchange Act (or the rules and regulations
promulgated thereunder) and to the extent determined to be appropriate by the
Committee. Shares of Common Stock which are distributed through the payment
of Participation Share Awards pursuant to subsection 7(c) will not be
available for Awards under the Plan.

11. INDIVIDUAL LIMITS

The maximum number of Participation Shares or shares of Common Stock
covered by Options which may be granted to any Participant within any 2
consecutive calendar year period shall not exceed 1,000,000 in the aggregate.
If an Option which had been granted to a Participant is canceled, the shares
of Common Stock which had been subject to such canceled Option shall continue
to be counted against the maximum number of shares for which Options may be
granted to the Participant. In the event that the number of Participation
Shares which may be awarded or Options which may be granted is adjusted as
provided in the Plan, the above limits shall automatically be adjusted in the
same ratio which reflects the adjustment to the number of Participation Shares
or Options available under the Plan.

12. CHANGES IN CAPITALIZATION

In the event there are any changes in the Common Stock or the
capitalization of the Corporation through a corporate transaction, such as any
merger, any acquisition through the issuance of capital stock of the
Corporation, any consolidation, any separation of the Corporation (including a
spin-off or other distribution of stock of the Corporation), any
reorganization of the Corporation (whether or not such reorganization comes
within the definition of such term in section 368 of the Code), or any partial
or complete liquidation by the Corporation, recapitalization, stock dividend,
stock split or other change in the corporate structure, appropriate
adjustments and changes shall be made by the Committee, to the extent
necessary to preserve the benefit to the Participant contemplated hereby, to
reflect such changes in (a) the aggregate number of shares subject to the
Plan, (b) the maximum number of shares for which Options or Participation
Shares may be granted or awarded to any Participant, (c) the number of shares
and the Option Price per share of all shares of Common Stock subject to
outstanding Options, (d) the number of Participation Shares, the Base Value
per Participation Share awarded to Participants, and the number of Dividend
Shares credited to Participants' Accounts, and (e) such other provisions of
the Plan as may be necessary and equitable to carry out the foregoing
purposes, provided, however that no such adjustment or change may be made to
the extent that such adjustment or change will result in the disallowance of a
deduction to the Corporation under section 162(m) of the Code or any successor
section.

13. EFFECT ON OTHER PLANS

All payments and benefits under the Plan shall constitute special
compensation and shall not affect the level of benefits provided to or
received by any Participant (or the Participant's estate or beneficiaries) as
part of any employee benefit plan of the Corporation or an Affiliate. The
Plan shall not be construed to affect in any way a Participant's rights and
obligations under any other plan maintained by the Corporation or an Affiliate
on behalf of employees.

14. TERM OF THE PLAN

The term of the Plan shall be ten years, beginning April 24, 1992, and
ending April 23, 2002, unless the Plan is terminated prior thereto by the
Committee. No Option may be granted or Participation Share awarded after the
termination date of the Plan, but Options and Participation Shares theretofore
granted or awarded shall continue in force beyond that date pursuant to their
terms.

15. GENERAL PROVISIONS

(a) Designated Beneficiary. Each Participant who shall be
granted a Participation Share award under the Plan may designate a beneficiary
or beneficiaries with the Committee on a form to be prescribed by it; provided
that no such designation shall be effective unless so filed prior to the death
of such Participant.

(b) No Right of Continued Employment. Neither the establishment
of the Plan nor the payment of any benefits hereunder nor any action of the
Corporation, its Affiliates, the Board of Directors of the Corporation or its
Affiliates, or the Committee shall be held or construed to confer upon any
person any legal right to be continued in the employ of the Corporation or its
Affiliates, and the Corporation and its Affiliates expressly reserve the right
to discharge any Participant without liability to the Corporation, its
Affiliates, the Board of Directors of the Corporation or its Affiliates or the
Committee, except as to any rights which may be expressly conferred upon a
Participant under the Plan.

(c) Binding Effect. Any decision made or action taken by the
Corporation, the Board or by the Committee arising out of or in connection
with the construction, administration, interpretation and effect of the Plan
shall be conclusive and binding upon all persons.

(d) Modification of Awards.

(1) The Committee may in its sole and absolute discretion, by
written notice to a Participant, (i) limit or eliminate the ability of the
Participant's Participation and Dividend Shares to generate additional
Dividend Shares, and/or (ii) fix the Book Value of all or any portion of the
Participant's existing Participation and existing or future Dividend Shares
for the purposes of any payments that might be made under subsection 7(c) at
their Book Value as of the end of the fiscal year of the Corporation in which
such notice is dated so that no further appreciation occurs in such Book
Value, and/or (iii) limit the period in which an Option may be exercised to a
period ending at least three months following the date of such notice, and/or
(iv) limit or eliminate the number of shares subject to Option after a period
ending at least three months following the date of such notice.
Notwithstanding anything in this subsection 15(d) to the contrary, the
Committee may not take any action to the extent that such action would result
in the disallowance of a deduction to the Corporation under section 162(m) of
the Code or any successor section.

(2) A Participant's Participation Share or Dividend Share which
has had its ability to generate additional Dividend Shares limited or
eliminated and for which the Book Value is fixed pursuant to subsection
15(d)(1)(i) of the Plan shall be credited with interest equal to the product
of (i) the number of Interest Credits (determined pursuant to subsection
15(d)(3) below) credited to such Participant's Account as of the Maturity Date
and (ii) the Book Value at which such Participation Share or Dividend Share
has been fixed.

(3) The number of Interest Credits to be credited to a
Participant's Account for each fiscal quarter of the Corporation ending after
the date as of which the Book Value of such Participant's Participation Shares
or Dividend Shares is fixed shall be determined as follows. The total cash
dividend declared per share of Common Stock during such quarter (but
subsequent to the date of the award in the case of Participation Shares and
subsequent to the date of crediting in the case of Dividend Shares) shall be
multiplied by the total of the Participation Shares, Dividend Shares and
Interest Credits in the Participant's Account. The amount so determined shall
be divided by the Book Value of one share of Common Stock as of the close of
such fiscal quarter. The quotient shall represent the number of full and
fractional Interest Credits credited to such Participant's Account for that
quarter.

(e) No Segregation of Cash or Stock. The Accounts established
for Participants are merely a bookkeeping convenience and neither the
Corporation nor its Affiliates shall be required to segregate any cash or
stock which may at any time be represented by Awards. Nor shall anything
provided herein be construed as providing for such segregation. Neither the
Corporation, its Affiliates, the Board nor the Committee shall, by any
provisions of the Plan, be deemed to be a trustee of any property, and the
liability of the Corporation or its Affiliates to any Participant pursuant to
the Plan shall be those of a debtor pursuant to such contract obligations as
are created by the Plan, and no such obligation of the Corporation or its
Affiliates shall be deemed to be secured by any pledge or other encumbrance on
any property of the Corporation or its Affiliates.

(f) Inalienability of Benefits and Interest. Except as provided
in subsections 8(e) and 15(a), no benefit payable under or interest in the
Plan shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any such attempted
action shall be void and no such benefit or interest shall be in any manner
liable for or subject to debts, contracts, liabilities, engagements, or torts
of any Participant or beneficiary.

(g) Delaware Law to Govern. All questions pertaining to the
construction, interpretation, regulation, validity and effect of the
provisions of the Plan shall be determined in accordance with the laws of the
State of Delaware.

(h) Election to Defer Receipt.

(1) A Participant may, with the consent of the Committee,
elect to defer the receipt of all or any portion of amounts which may
otherwise become payable under subsection 7(c). A Participant's receipt of
any portion of the amount payable with respect to one or more outstanding
Participation Share awards shall be deferred if, prior to the Maturity Date of
any such award, or if earlier, such Participant's termination of employment,
such Participant irrevocably elects such deferral by written notice to the
Committee signed by the Participant and delivered to the Committee, and the
Committee consents to such deferral. Such notice must clearly specify the
manner of distribution described in paragraph (2) below which shall apply with
respect to such deferred amounts. After adjustment for any resulting
interest, the deferred amount shall be paid at the date or dates specified in
the Participant's letter, and such adjusted amount shall not be subject to
forfeiture as otherwise provided in subsection 7(h). Notwithstanding the
foregoing, with the consent of the Committee, an election made prior to
January 1, 1999 pursuant to this paragraph may be irrevocably modified by a
Participant prior to the earlier of (i) January 1, 1999, (ii) such
Participant's termination of employment or (iii) the payment of the first
installment pursuant to subsection 15(h)(2) below.

(2) Amounts deferred pursuant to this subsection 15(h)
shall be distributed in accordance with clause (i), (ii), or (iii), below, as
elected by the Participant: (i) up to 20 annual installments commencing in
the year after the termination of employment by reason of retirement; (ii) up
to five annual installments, commencing 13 months after the Participant's
repatriation to his home country following a foreign assignment; or (iii) up
to five annual installments, commencing as of a date requested by the
Participant; provided, however, that such date shall not be more than 20 years
after the Maturity Date. The amount of each installment under clause (i),
(ii) or (iii) above shall be equal to the product of the amount which has not
been distributed immediately prior to such installment and a fraction, the
numerator of which is one and the denominator of which is the number of
installments yet to be paid.

(3) (i) Notwithstanding any other provision of this
Plan to the contrary, deferred amounts shall be paid in one lump sum as soon
as practicable after the death of the Participant or the termination of
employment of the Participant with the Corporation for reasons other than
Retirement or Total and Permanent Disability; however, if a Participant is or
has been on foreign assignment in the 12 months immediately prior to the date
of his termination of employment, and if the termination of employment is for
any reason other than Retirement or Total and Permanent Disability, any
remaining amounts shall be paid in one lump sum 13 months following the
earlier of (A) the date of the Participant's repatriation to his home country
following the foreign assignment or (B) the date of such termination of
employment.

(ii) Upon written application by a Participant or his
legal representative stating that severe financial hardship will result from
continued deferral, the Committee in its sole discretion may authorize payment
of such Participant's deferred amounts prior to the date specified in the
written notice described in subparagraph (h)(1) above. For purposes of this
Plan, a "severe financial hardship" is an unanticipated emergency that is
caused by an event beyond the control of the Participant and that would result
in severe financial hardship to the individual if the emergency distribution
were not permitted. Cash needs arising from foreseeable events, such as the
purchase of a residence or education expenses for children shall not be
considered the result of a severe financial hardship. For purposes of this
Plan, a "severe financial hardship" is limited to an event described in
Treasury Regulation section 1.401(k)-1(d)(2)(iv)(A)(1) or (4). For purposes
of this Plan, a distribution is in "the amount necessary to satisfy the
emergency" only if the requirements of Treasury Regulation section
1.401(k)-1(d)(2)(iv)(B) are satisfied. A Participant must provide the
Committee with substantiation of any such claim of severe financial hardship.

(4) Amounts deferred hereunder shall be credited with
interest, compounded quarterly, from the date such amount otherwise would have
been paid at a rate yielding interest equivalent to the per annum market
discount rate for six-month U.S. Treasury Bills as published by the Federal
Reserve Board for the seven calendar days prior to January 1 (for interest to
be credited for the subsequent fiscal quarters ending March 31 and June 30)
and prior to July 1 (for interest to be credited for the subsequent fiscal
quarters ending on September 30 and December 31).

(i) Purchase of Common Stock. The Corporation and its
Affiliates may purchase from time to time shares of Common Stock in such
amounts as they may determine for purposes of the Plan. The Corporation and
its Affiliates shall have no obligation to retain, and shall have the
unlimited right to sell or otherwise deal with for their own account, any
shares of Common Stock purchased pursuant to this paragraph.

(j) Use of Proceeds. The proceeds received by the Corporation
from the sale of Common Stock pursuant to the exercise of Options shall be
used for general corporate purposes.

(k) Withholding. The Committee shall require the withholding of
all taxes as required by law. In the case of payments of Awards in shares of
Common Stock or other securities, withholding shall be as required by law and
in the Committee Rules. A Participant may elect to have any portion of the
federal, state or local income tax withholding required with respect to an
exercise of a Nonqualified Stock Option satisfied by tendering to the
Corporation shares of Common Stock, which, in the absence of such an election,
would have been issued to such Participant in connection with such exercise.
In the event that the value of the shares of Common Stock tendered to satisfy
the withholding tax required with respect to an exercise exceeds the amount of
such tax, the excess of such market value over the amount of such tax shall be
returned to the Participant, to the extent possible, in whole shares of Common
Stock, and the remainder in cash. The value of a share of Common Stock
tendered pursuant to this subsection 15(k) shall be the Fair Market Value of
the Common Stock on the date on which such shares are tendered to the
Corporation. An election pursuant to this subsection 15(k) shall be made in
writing and signed by the Participant. An election pursuant to this
subsection 15(k) is irrevocable. A Participant who exercises an option may
satisfy the income tax withholding due in respect of such exercise pursuant to
this subsection 15(k) only to meet required tax withholding. Shares of Common
Stock cannot be withheld in excess of the minimum number required for tax
withholding.

(l) Amendments. The Committee may at any time amend, suspend,
or discontinue the Plan or alter or amend any or all Awards and Award
Agreements under the Plan to the extent (1) permitted by law, (2) permitted by
the rules of any stock exchange on which the Common Stock or any other
security of the Corporation is listed, (3) permitted under applicable
provisions of the Securities Act of 1933, as amended, the Exchange Act
(including rule 16b-3 thereof) and (4) that such action would not result in
the disallowance of a deduction to the Corporation under section 162(m) of the
Code or any successor section (including the rules and regulations promulgated
thereunder); provided, however, that if any of the foregoing requires the
approval by stockholders of any such amendment, suspension or discontinuance,
then the Committee may take such action subject to the approval of the
stockholders. Except as provided in subsections 8(i) and 15(d) no such
amendment, suspension, or termination of the Plan shall, without the consent
of the Participant, adversely alter or change any of the rights or obligations
under any Awards or other rights previously granted the Participant under the
Plan.

Exhibit (10)f

KIMBERLY-CLARK CORPORATION
DEFERRED COMPENSATION PLAN

EFFECTIVE AS OF OCTOBER 1, 1994

AMENDED THROUGH JUNE 9, 1999
<PAGE>
KIMBERLY-CLARK CORPORATION
DEFERRED COMPENSATION PLAN

I. PURPOSE

The purpose of this Kimberly-Clark Corporation Deferred Compensation Plan
is to permit a select group of management or highly compensated employees
of Kimberly-Clark Corporation and its subsidiaries to defer income
which would otherwise become payable to them.

II. DEFINITIONS AND CERTAIN PROVISIONS

2.1 "Agreement" means the Plan Agreement(s) executed between a
Participant and the Company, whereby a Participant agrees to defer
a portion of his Salary or Bonus, or both, pursuant to the
provisions of the Plan, and the Company agrees to make benefit
payments in accordance with the provisions of the Plan. In the
event the terms of the Agreement conflict with the terms of the
Plan, the terms of the Plan shall be controlling.

2.2 "Beneficiary" means the person or persons who under this Plan
becomes entitled to receive a Participant's interest in the
event of the Participant's death.

2.3 "Board of Directors" means the Board of Directors of the Company.

2.4 "Bonus" means any amount(s) paid during a calendar year to the
Participant under the Company's Management Achievement Award
Program.

2.5 A "Change of Control" of the Company shall be deemed to have
taken place if: (i) a third person, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, acquires shares of the Company having 20% or more of
the total number of votes that may be cast for the election of
Directors of the Company; or (ii) as the result of any cash tender
or exchange offer, merger or other business combination, sale of
assets or contested election, or any combination of the
foregoing transactions (a "Transaction"), the persons who were
directors of the Company before the Transaction shall cease
to constitute a majority of the Board of Directors of the
Company or any successor to the Company.

2.6 "Code" means the Internal Revenue Code for 1986, as amended and
any lawful regulations or other pronouncements promulgated
thereunder.

2.7 "Committee" means the Retirement Trust Committee named under the
Kimberly-Clark Corporation Salaried Employers' Retirement Plan.

2.8 "Company" means Kimberly-Clark Corporation, a Delaware
corporation, and its subsidiaries and any successor in interest.
For purposes of the Plan, a subsidiary is a corporation, 50% or
more of the voting shares of which are owned directly or
indirectly by the Company, which is incorporated under the
laws of one of the states of the United States.

2.9 "Compensation Committee" means the Compensation Committee of the
Board of Directors.

2.10 "Deferral Year" means any calendar year, 1995 through 2000. For
purposes of 1994, Deferral Year means the Effective Date of the
Plan through December 31, 1994.

2.11 "Deferred Benefit Account" means the cumulative total dollar
amount that a Participant elects to defer in the Agreement,
including gains and losses pursuant to Section 3 as maintained on
the books of the Company for a Participant under this Plan.
A Participant's Deferred Benefit Account shall not constitute
or be treated as a trust fund of any kind.

2.12 "Determination Date" means the date on which the amount of a
Participant's Deferred Benefit Account is determined as provided
in Article III hereof. The last day of each calendar quarter shall
be a Determination Date.

2.13 "Disability" shall have the same meaning as the phrase "Totally
and Permanently Disabled" under the Kimberly-Clark Corporation
Salaried Employees' Retirement Plan. The determination of a
Participant's having become Disabled shall be made by the
Retirement Committee of the Kimberly-Clark Corporation Salaried
Employees' Retirement Plan.

2.14 "Effective Date" means October 1, 1994.

2.15 "IIP" means the Kimberly-Clark Corporation Salaried Employees
Incentive Investment Plan and the Kimberly-Clark Corporation Hourly
Employees Incentive Investment Plan, collectively.

2.16 "Investment Grade" means a bond rating of BBB minus, or its
equivalent, by one of the nationally recognized rating agencies.

2.17 "Participant" means an employee of the Company, or its
subsidiaries or affiliated companies, who is eligible to participate
in the Plan pursuant to Article III, who has executed an Agreement
with the Company, and who has commenced Salary or Bonus, or both
Salary and Bonus, reductions pursuant to such Agreement.

2.18 "Plan" means the Kimberly-Clark Corporation Deferred Compensation
Plan as amended from time to time.

2.19 "Retirement Date" means the date of Termination of Service of
the Participant on or after he attains age 55 and has 5 Years of
Service with the Company.

2.20 "Salary" means the Participant's base salary which would be
received during a calendar year if no election to defer were made,
including any 401(k) Contributions under the IIP or pre-tax
contributions under the Company's Flexible Benefit Plan.

2.21 "Termination of Service" means the Participant's cessation of
his service with the Company for any reason whatsoever, whether
voluntarily or involuntarily, including by reason of retirement,
death, or Disability.

2.22 "Tier 1 Participants" shall include the Chief Executive Officer
and all elected officers of the Company who report directly
to the Chief Executive Officer.

2.23 "Tier 2 Participants" shall include all employees of the Company
(excluding Tier 1 Participants) whose Salary at the beginning of
the Deferral Year is greater than the considered compensation
limit pursuant to Section 401(a)(17) of the Code. For the 1994
Deferral Year, the considered compensation limit is $150,000.

2.24 "Valuation Date" means, for purposes of crediting earnings under
Section 3.6 and determining a Participant's Deferred Benefit
Account under Section 3.7, any business day on which securities
are traded on the New York Stock Exchange.

2.25 "Years of Service" shall have the same meaning as defined under
the Kimberly-Clark Corporation Salaried Employees' Retirement Plan.

III. PARTICIPATION AND COMPENSATION REDUCTION

3.1 Participation. Participation in the Plan shall be limited to
employees of the Company who are either a Tier 1 Participant
or a Tier 2 Participant and who elect to participate in the Plan
by filing an Agreement with the Committee prior to the first day
of the deferral period in which a Participant's participation
commences in the Plan. The election to participate shall be
effective upon receipt by the Committee of the Agreement that is
properly completed and executed in conformity with the Plan.

3.2 Minimum and Maximum Deferral and Length of Participation. Tier 1
Participants - A Tier 1 Participant may elect to defer any
amount of his Salary or Bonus, or both, to the extent that any
portion of such amounts would not be deductible by the Company
pursuant to Section 162(m) of the Code. In addition, a Tier 1
Participant may elect to defer up to 100% of his Bonus paid during
a Deferral Year in 25% increments.

Tier 2 Participants - A Tier 2 Participant may elect to defer
an amount of his Bonus up to the dividend distributed under
Section 7.12 of the IIP during a Deferral Year. The amount of
Bonus which may be deferred related to the dividend payment
from the IIP shall be equal to 25% to 100% (in 25% increments)
of the IIP dividend received. A Tier 2 Participant may not defer
any part of his Salary pursuant to this Plan.

In no event may the amount of a Participant's deferral election
related to the IIP estimated dividend payment for the upcoming
Deferral Year be less than $5,000. The deferral opportunity shall
extend through December 31, 2000. A Participant shall make an
annual election for the upcoming Deferral Year in the year
preceding the Deferral Year for which the election is being made.
Except as provided in Section 3.5, "Emergency Benefit: Waiver
of Deferral," any election so made shall be irrevocable with
respect to Salary and Bonus applicable to that Deferral Year.

Notwithstanding anything in this Plan to the contrary, a
Participant may not elect to defer any amount under this Plan
unless the Participant files a statement with the Committee that
the Participant had individual income in excess of $200,000 in
each of the two most recent years or joint income with that
person's spouse n excess of $300,000 in each of those years and
has a reasonable expectation of reaching the same income level
in the current year.

3.3 Timing of Deferral Credits. The amount of Salary or Bonus, or
both that a Participant elects to defer in the Agreement
shall cause an equivalent reduction in the Participant's
Salary and Bonus, respectively. Deferrals shall be credited
throughout each Deferral Year as the Participant is paid the
non-deferred portion of Salary and Bonus for such Deferral Year.

3.4 New Participants. Subsequent to October 1, 1994, an individual
who is hired into a position which satisfies the requirements
of a Tier 1 Participant or a Tier 2 Participant shall be eligible
to participate in the Plan thirty (30) days after satisfying the
criteria for participation. The eligible employee shall be bound
by all terms and conditions of the Plan, provided, however, that
his Agreement must be filed no later than thirty (30) days
following his eligibility to participate.

Employees who satisfy the criteria of a Tier 1 Participant or a
Tier 2 Participant as a result of a promotion or Salary increase
will be eligible to participate in the Plan beginning on January
1st of the calendar year following eligibility.

3.5 Emergency Benefit: Waiver of Deferral. In the event that the
Committee, upon written petition of the Participant or his
Beneficiary, determines in its sole discretion, that the
Participant or his Beneficiary has suffered an unforeseeable
financial emergency, the Company shall pay to the Participant or
his Beneficiary as soon as possible following such
determination, an amount from the Participant's Deferred Benefit
Account not in excess of the amount necessary to satisfy the
emergency. For purposes of this Plan, an "unforeseeable
financial emergency" is an unanticipated emergency that is
caused by an event beyond the control of the Participant or
Beneficiary and that would result in severe financial
hardship to the individual if the emergency distribution
were not permitted. Cash needs arising from foreseeable events,
such as the purchase of a residence or education expenses for
children shall not be considered the result of an unforeseeable
financial emergency. For purposes of this Plan, an
"unforeseeable financial emergency" is limited to an event
described in Treasury Regulation section 1.401(k)-1(d)(2)(iv)(A)
(1) or (4). For purposes of this Plan, a distribution is in
"the amount necessary to satisfy the emergency" only if the
requirements of Treasury Regulation section 1.401(k)-1(d)(2)
(iv)(B) are satisfied. The Committee shall also grant a
waiver of the Participant's agreement to defer a stated amount
of Salary and Bonus upon finding that the Participant has
suffered an unforeseeable financial emergency. The waiver
shall be for such period of time as the Committee deems necessary
under the circumstances to relieve the hardship.

3.6 Crediting of Earnings - As of the close of business on each
Valuation Date the designated Deferred Benefit Account of each
Participant shall be capable of being valued and adjusted to
preserve for each Participant his proportionate interest in the
related funds as if such account held actual assets and such
assets were among such investment funds as the Participant,
retired Participant or Beneficiary elected pursuant to Section
3.8. As of each Valuation Date the Deferred Benefit Account of
each Participant shall be capable of being adjusted to reflect
the effect of income, collected and accrued, realized and
unrealized profits and losses, expenses which would have been
incurred in connection with the sale, investment and reinvestment
of the investment funds (such as brokerage, postage, express and
insurance charges and transfer taxes), and all other transactions
with respect to the related fund. The effect of such transactions
shall be determined by the Committee in accordance with generally
accepted valuation principles applied on a consistent basis.
Each Participant's Deferred Benefit Account shall then be
appropriately credited with his deferred amounts as set forth in
Section 3.7.

3.7 Determination of Account. The balance of each Participant's
Deferred Benefit Account as of each Valuation Date shall be
calculated, in a manner determined by the Committee in
accordance with generally accepted valuation principles applied on
a consistent basis, as follows: the beginning balance of each
Participant's Deferred Benefit Account; less distributions payable
pursuant to Section 4.11 as of the Valuation Date coincident with
the Determination Date set forth in Section 4.11 or, if none,
the Valuation Date immediately following such Determination Date;
plus investment earnings, gains and losses determined pursuant
to Section 3.6 credited to each Participant's Deferred Benefit
Account; plus Participant deferrals credited to each
Participant's Deferred Benefit Account pursuant to Section 3.3.

3.8 Investment Funds and Elections. - Participants, retired
Participants, and Beneficiaries may elect that their Deferred
Benefit Account be credited with earnings, gains and losses as
if such accounts held actual assets and such assets were among
such investment funds as the Company may designate. Any such
direction of investment shall be subject to such rules as the
Company and the Committee may prescribe, including, without
limitation, rules concerning the manner of providing investment
directions, the frequency of changing such investment
directions, and method of crediting earnings, gains and losses
for any portion of a Deferred Benefit Account which is not
covered by any valid investment directions. The investment
funds which the Company may designate shall include but not be
limited to the following types of funds, which can be managed on
an individual basis or as part of a mutual fund, as the Company
shall determine:

(a) money market funds;
(b) common stock funds;
(c) bond funds;
(d) balanced funds;
(e) investment funds which are primarily invested in insurance
contracts; and
(f) investment funds which are provided for under insurance
contracts.

The Company shall have the sole discretion to determine the number
of investment funds to be designated hereunder and the nature of the funds and
may change or eliminate the investment funds provided hereunder from time to
time. The Committee shall determine the rate of earnings, gains and losses to
be credited to Participant's Deferred Benefit Accounts under this Plan with
respect to any such investment fund for any period, taking into account the
return, net of any expenses which would have been incurred in connection with
the sale, investment and reinvestment of the investment funds (such as
brokerage, postage, express and insurance charges and transfer taxes), of such
investment funds for such period.

3.9 Reallocations. A Participant may elect to reallocate all or any
whole percentage portion of his Deferred Benefit Account effective as of the
last Valuation Date of any calendar month.

3.10 Vesting of Deferred Benefit Account. A Participant shall be 100
percent vested in his Deferred Benefit Account equal to the amount of Salary
and Bonus he deferred into the Deferred Benefit Account and the earnings,
gains or losses credited thereon.

IV. BENEFITS

4.1 Inservice Distribution. At the time a Participant executes an
Agreement, he may elect to receive a return of his deferrals.
The amount of the return of deferral shall be equal to the
lesser of the amount deferred in a specific year or the
Participant's Deferred Benefit Account. Each such return of
deferral shall be made in a lump sum as soon as administratively
feasible on or after the last business day of October of the
fifth, tenth or fifteenth year following the year in which the
deferral is earned, provided that the Participant continues in
the employ of the Company, its subsidiary or affiliated company
until such date. Once the Participant elects to receive his
return of deferral, the election shall be irrevocable. A
return of deferral pursuant to this Section 4.1 shall only
be paid prior to a Participant's Termination of Service.
Any return of deferral paid shall be deemed a distribution, and
shall be deducted from the Participant's Deferred Benefit Account.
A separate return of deferrals election shall be made for each
Deferral Year.

4.2 Retirement Benefit. Subject to Section 4.6 below, upon a
Participant's Retirement Date, he shall be entitled to receive
the amount of his Deferred Benefit Account. The form of
benefit payment, and the commencement of such benefit, shall
be as provided in Section 4.6.

4.3 Termination Benefit. Upon the Termination of Service of a
Participant prior to his Retirement Date, for reasons other
than death or Disability, the Company shall pay to the
Participant, a benefit equal to his Deferred Benefit Account.

Unless otherwise directed by the Committee, the termination
benefit shall be payable in a lump sum as set forth in Section
4.11 following the Participant's Termination of Service. Upon
a Termination of Service, the Participant shall immediately cease
to be eligible for any other benefit provided under this Plan.

4.4 Death Benefits. Upon the death of a Participant or a retired
Participant, the Beneficiary of such Participant shall receive
the Participant's remaining Deferred Benefit Account. Payment of
a Participant's remaining Deferred Benefit Account shall be in
accordance with Section 4.6.

4.5 Disability. In the event of a Termination of Service due to
Disability prior to his Retirement Date, a disabled Participant
shall receive his remaining Deferred Benefit Account. Payment of
a Participant's remaining Deferred Benefit Account shall be in
accordance with Section 4.6.

4.6 Form of Benefit Payment.

(a) Upon the happening of an event described in Sections 4.1,
4.2, 4.3, 4.4, or 4.5, the Company shall pay to the
Participant the amount specified therein in a lump sum.

(b) In the event that a Participant retires as described in
Section 4.2, the Participant may, with the consent of the
Committee, elect an installment form of benefit payments.
The written request must be made prior to December 31 of
the calendar year preceding the Participant's Retirement
Date. The Committee may, in its discretion, grant the
Participant's request.

(c) In the event of the death of the Participant, as described
in Section 4.4, the Participant's Beneficiary may,
with the consent of the Committee, elect an installment
benefit payment. This written request must be made no
later than thirty (30) days after the Participant's date
of death. The Committee may, in its discretion, grant
such Beneficiary's request.

(d) In the event that a Participant terminates service due to a
Disability as described in Section 4.5, the Participant
may, with the consent of the Committee, elect an
installment form of benefit payment. The written request
must be made no later than thirty (30) days after the
date the Participant is determined to be disabled by the
Retirement Committee of the Kimberly-Clark Salaried
Employees' Retirement Plan. The Committee may, in its
discretion, grant the Participant's request.

(e) In the event that installment payments are to be made
pursuant to Subsections 4.6(b), (c) or (d), such
payments shall be in quarterly installments commencing as
soon as administratively feasible after the Committee
grants the request for an installment form of benefit
payment. Such quarterly installments shall be payable in
approximately equal amounts over a period, no less than
two (2) calendar years and no more than twenty (20) calendar
years.

Initially, the amount of any installments under the
installment form of payment described in this Subsection
4.6(e) shall be equal to the balance of the Participant's
Deferred Benefit Account to be distributed divided by
the number of installments to be paid. The amount of the
installment payments shall be recomputed annually and the
installment payments shall be increased or decreased to
reflect any changes in the Participant's Deferred Benefit
Account due to fluctuations in earnings, gains and losses
on the remaining balance and the number of remaining
installments. Quarterly installments payments will be made
on the last business day of January, April, July and
October.

4.7 Limitations on the Annual Amount Paid to a Participant.
Notwithstanding any other provisions of this Plan to the
contrary, in the event that a portion of the payments due a
Participant pursuant to Sections 3.5, 4.1, 4.2, 4.3, 4.4, 4.5,
or 4.6 would not be deductible by the Company pursuant to
Section 162(m) of the Code, the Company, at its discretion, may
postpone payment of such amounts to the Participant until such
time that the payments would be deductible by the Company.
Provided, however, that no payment postponed pursuant to this
Section 4.7 shall be postponed beyond the first anniversary of
such Participant's Termination of Service.

4.8 Change of Control and Lump Sum Payments.

(a) If there is a Change of Control, notwithstanding any other
provision of this Plan, any Participant who has a
Deferred Benefit Account hereunder may, at any time during
a twenty-four (24) month period immediately following a
Change of Control, elect to receive an immediate lump sum
payment of the balance of his Deferred Benefit Account,
reduced by a penalty equal to ten percent (10%) of the
Participant's Deferred Benefit Account as of the
Determination Date. The ten percent (10%) penalty shall
be permanently forfeited and shall not be paid to,
or in respect of, the Participant.

(b) If there is a Change of Control, notwithstanding any other
provision of this Plan, any retired or disabled
Participant, or Beneficiary, who has a Deferred Benefit
Account hereunder may, at any time during a twenty-four
(24) month period immediately following a Change of Control,
elect to receive an immediate lump sum payment of the
balance of his Deferred Benefit Account, reduced by a
penalty equal to five percent (5%) of the Participant's
Deferred Benefit Account as of the Determination Date. The
five percent (5%) penalty of the retired Participant's or
Beneficiary's Deferred Benefit Account shall be permanently
forfeited and shall not be paid to, or in respect of, the
retired Participant or Beneficiary.

(c) In the event no such request is made by a Participant, a
retired or disabled Participant or Beneficiary, the Plan
and Agreement shall remain in full force and effect.

4.9 Change In Credit Rating and Lump Sum Payments.

In the event the Company's financial rating falls below
Investment Grade, a Participant, retired or disabled Participant,
or Beneficiary may at any time during a six (6) month period
following the reduction in the Company's financial rating,
elect to receive an immediate lump sum payment of the balance of
his Deferred Benefit Account reduced by a penalty equal to ten
percent (10%) of the Participant's Deferred Benefit Account or
five percent (5%) of the retired or disabled Participant's
or Beneficiary's Deferred Benefit Account. The penalties
accrued hereunder shall be permanently forfeited and shall not
be paid to, or in respect of, the Participant, retired or
disabled Participant or Beneficiary.

In the event no such request is made by a Participant, retired
or disabled Participant or Beneficiary, the Plan and Agreement
shall remain in full force and effect.

4.10 Tax Withholding. To the extent required by law in effect at the
time payments are made, the Company shall withhold any taxes
required to be withheld by any Federal, State or local
government.

4.11 Commencement of Payments. Unless otherwise provided,
commencement of payments under this Plan shall be as soon as
administratively feasible on or after the last business
day of the month following the Determination Date after receipt
of notice and approval by the Committee of an event which
entitles a Participant or a Beneficiary to payments under this
Plan. Amounts payable hereunder shall be credited with
interest from the Determination Date to the day prior to
payment at a rate yielding interest equivalent to the per annum
secondary market discount rate for six-month U.S. Treasury Bills
as published by the Federal Reserve Board for the calendar week
ending prior to January 1 (for interest to be credited for
either of the subsequent fiscal quarters ending March 31 or
June 30) or prior to July 1 (for interest to be credited for
either of the subsequent fiscal quarters ending on September 30
or December 31).

4.12 Recipients of Payments: Designation of Beneficiary. All
payments to be made by the Company under the Plan shall
be made to the Participant during his lifetime, provided that
if the Participant dies prior to the completion of such
payments, then all subsequent payments under the Plan shall be
made by the Company to the Beneficiary determined in accordance
with this Section. The Participant may designate a Beneficiary
by filing a written notice of such designation with the
Committee in such form as the Committee requires and may include
contingent Beneficiaries. The Participant may from time-to-time
change the designated Beneficiary by filing a new designation
in writing with the Committee. If no designation is in effect at
the time when any benefits payable under this Plan shall
become due, the Beneficiary shall be the spouse of the
Participant, or if no spouse is then living, the representatives
of the Participant's estate.

V. CLAIMS FOR BENEFITS PROCEDURE

5.1 Claim for Benefits. Any claim for benefits under the Plan shall
be made in writing to any member of the Committee. If such claim
is wholly or partially denied by the Committee, the Committee
shall, within a reasonable period of time, but not later than
sixty (60) days after receipt of the claim, notify the claimant of
the denial of the claim. Such notice of denial shall be in writing
and shall contain:

(a) The specific reason or reasons for denial of the claim;

(b) A reference to the relevant Plan provisions upon which the
denial is based;

(c) A description of any additional material or information
necessary for the claimant to perfect the claim, together with
an explanation of why such material or information is
necessary; and

(d) An explanation of the Plan's claim review procedure.

If no such notice is provided, the claim shall be deemed to have
been denied.

5.2 Request for Review of a Denial of a Claim for Benefits. Upon the
receipt by the claimant of written notice of denial of the claim,
the claimant may file a written request to the Committee,
requesting a review of the denial of the claim, which review shall
include a hearing if deemed necessary by the Committee. In
connection with the claimant's appeal of the denial of his
claim, he may review relevant documents and may submit issues and
comments in writing.

5.3 Decision Upon Review of Denial of Claim for Benefits. The
Committee shall render a decision on the claim review promptly,
but no more than sixty (60) days after the receipt of the
claimant's request for review, unless special circumstances
(such as the need to hold a hearing) require an extension of time,
in which case the sixty (60) day period shall be extended to
120 days. Such decision shall:

(a) Include specific reasons for the decision;

(b) Be written in a manner calculated to be understood by the
claimant; and

The decision of the Committee shall be final and binding in
all respects on both the Company and the claimant.

VI. ADMINISTRATION

6.1 Committee. The Plan shall be administered by the Committee. The
Committee shall elect one of its members as chairman.
Members of the Committee shall not receive compensation for
their services. Committee expenses shall be paid by the Company.
Members of the Committee or agents of the Committee may be
Participants under the Plan. No member of the Committee who is
also a Participant shall be involved in the decisions of the
Committee regarding any determination of any claim for benefit
with respect to himself.

6.2 General Rights, Powers, and Duties of Committee. The Committee
shall be responsible for the management, operation, and
administration of the Plan. The Committee may designate a
Committee member or an officer of the Company as Plan
Administrator. Absent such delegation, the Committee shall be
the Plan Administrator. The Plan Administrator shall
perform duties as designated by the Committee. In addition to
any powers, rights and duties set forth elsewhere in the Plan,
it shall have the following powers and duties:

(a) To adopt such rules and regulations consistent with the
provisions of the Plan as it deems necessary for the proper
and efficient administration of the Plan;

(b) To administer the Plan in accordance with its terms and any
rules and regulations it establishes;

(c) To maintain records concerning the Plan sufficient to
prepare reports, returns and other information required by
the Plan or by law;

(d) To construe and interpret the Plan including any doubtful or
contested terms and resolve all questions arising under the
Plan;

(e) To direct the Company to pay benefits under the Plan, and to
give such other directions and instructions as may be
necessary for the proper administration of the Plan;

(f) To employ or retain agents, attorneys, actuaries,
accountants or other persons, who may also be Participants
in the Plan or be employed by or represent the Company,
as it deems necessary for the effective exercise of its
duties, and may delegate to such agents any power and duties,
both ministerial and discretionary, as it may deem necessary
and appropriate; and

(g) To be responsible for the preparation, filing and disclosure
on behalf of the Plan of such documents and reports as are
required by any applicable Federal or State law.

6.3 Information to be Furnished to Committee. The Company shall
furnish the Committee such data and information as it may
require. The records of the Company shall be
determinative of each Participant's period of employment,
termination of employment and the reason therefor,
leave of absence, reemployment, Years of Service, personal
data, and Salary and Bonus reductions. Participants and
their Beneficiaries shall furnish to the Committee such
evidence, data, or information, and execute such documents as
the Committee requests.

6.4 Responsibility. No member of the Committee, the Compensation
Committee or the Board of Directors of the Company shall
be liable to any person for any action taken or omitted in
connection with the administration of this Plan.

6.5 Committee Review. Any action on matters within the discretion
of the Committee shall be final and conclusive as to all
Participants, retired Participants, Beneficiaries and other
persons claiming rights under the Plan. The Committee shall
exercise all of the powers, duties and responsibilities set
forth hereunder in its sole discretion.

VII. AMENDMENT AND TERMINATION

7.1 Amendment. The Plan may be amended in whole or in part by either
the Board of Directors or the Compensation Committee at any time.
Notice of any such amendment shall be given in writing to the
Committee and to each Participant and each Beneficiary. No
amendment shall decrease the value of a Participant's Deferred
Benefit Account.

7.2 Company's Right to Terminate. The Board of Directors may
terminate the Plan and may terminate any Agreements
pertaining to the Participant at any time after the Effective
Date of the Plan. In the event of any such termination, the
Participant shall be entitled to the amount of his Deferred
Benefit Account determined under Section 3.7 as of the date of
any such termination. Such benefit shall be paid to the
Participant in quarterly installments over a period of no more
than ten (10) years, except that the Company, in its sole
discretion, may pay out such benefit in a lump sum or in
installments over a period shorter than ten (10) years.

VIII. MISCELLANEOUS

8.1 No Implied Rights; Rights on Termination of Service. Neither the
establishment of the Plan nor any amendment thereof shall be
construed as giving any Participant, retired Participant,
Beneficiary, or any other person any legal or equitable right
unless such right shall be specifically provided for in the Plan
or conferred by specific action of the Company in accordance
with the terms and provisions of the Plan. Except as expressly
provided in this Plan, the Company shall not be required or be
liable to make any payment under the Plan.

8.2 No Right to Company Assets. Neither the Participant nor any other
person shall acquire by reason of the Plan any right in or
title to any assets, funds or property of the Company
whatsoever including, without limiting the generality of the
foregoing, any specific funds, assets, or other property which
the Company, in its sole discretion, may set aside. Any
benefits which become payable hereunder shall be paid from the
general assets of the Company. The Participant shall have
only a contractual right to the amounts, if any, payable
hereunder unsecured by any asset of the Company. Nothing
contained in the Plan constitutes a guarantee by the Company that
the assets of the Company shall be sufficient to pay any
benefit to any person.

8.3 No Employment Rights. Nothing herein shall constitute a contract
of employment or of continuing service or in any manner obligate
the Company to continue the services of the Participant, or
obligate the Participant to continue in the service of the Company,
or as a limitation of the right of the Company to discharge any
of its employees, with or without cause. Nothing herein shall be
construed as fixing or regulating the Salary and Bonus payable
to the Participant.

8.4 Offset. If, at the time payments or installments of payments are
to be made hereunder, the Participant, retired Participant or the
Beneficiary are indebted or obligated to the Company, then the
payments remaining to be made to the Participant, retired
Participant, or the Beneficiary may, at the discretion of the
Company, be reduced by the amount of such indebtedness or
obligation, provided, however, that an election by the Company
not to reduce any such payment or payments shall not constitute
a waiver of its claim for such indebtedness or obligation.

8.5 Non-assignability. Neither the Participant nor any other person
shall have any voluntary or involuntary right to commute,
sell, assign, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which
are expressly declared to be unassignable and non-transferable.
No part of the amounts payable shall be, prior to actual
payment, subject to seizure or sequestration for the payment
of any debts, judgments, alimony or separate maintenance owed
by the Participant or any other person, or be transferable by
operation of law in the event of the Participant's or any other
person's bankruptcy or insolvency.

8.6 Successors, Mergers, and Consolidations. The Plan and any
Agreement thereunder shall inure to the benefit of and be binding
upon (i) the Company and its successors and assigns,
including without limitation, any corporation into which the
Company may be merged or consolidated, or which acquires all or
substantially all of the assets and business of the Company and
(ii) the Participant and his heirs, executors, administrators
and legal representatives.

8.7 Notice. Any notice required or permitted to be given under the
Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, and if given to the
Company, delivered to the principal office of the Company,
directed to the attention of the Committee. Such notice shall
be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark or the receipt
for registration or certification.

8.8 Governing Laws. The Plan shall be construed and administered
according to the laws of the State of Wisconsin.

Exhibit No. (12)

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLAR AMOUNTS IN MILLIONS)
<TABLE>

Year Ended December 31
------------------------------------------------
1995(a) 1996(b) 1997(c) 1998(d) 1999(e)
-------- -------- -------- -------- --------

<S>
Consolidated Companies <C> <C> <C> <C> <C>
Income before income taxes. . . . . . . . . . $730.1 $1,507.4 $1,352.7 $1,523.3 $2,251.7
Interest expense. . . . . . . . . . . . . . . 245.5 186.7 164.8 198.7 213.1
Interest factor in rent expense . . . . . . . 36.1 45.7 49.8 52.3 50.5
Amortization of capitalized interest. . . . . 9.7 8.6 9.0 9.4 10.0

Equity Affiliates
Share of 50%-owned:
Income before income taxes . . . . . . . . 40.6 49.3 51.2 47.6 43.4
Interest expense . . . . . . . . . . . . . 18.5 9.5 7.1 9.9 8.0
Interest factor in rent expense. . . . . . .8 .7 .7 1.2 .9
Amortization of capitalized interest . . . .7 .7 .6 .5 .6
Distributed income of less than 50%-owned . . 25.1 48.4 62.5 98.1 88.0
-------- -------- -------- -------- --------

Earnings. . . . . . . . . . . . . . . . . . . . $1,107.1 $1,857.0 $1,698.4 $1,941.0 $2,666.2
======== ======== ======== ======== ========

Consolidated Companies
Interest expense . . . . . . . . . . . . . . $245.5 $186.7 $164.8 $198.7 $213.1
Capitalized interest . . . . . . . . . . . . 8.8 13.9 17.0 12.4 12.9
Interest factor in rent expense. . . . . . . 36.1 45.7 49.8 52.3 50.5

Equity Affiliates
Share of 50%-owned:
Interest and capitalized interest . . . . 18.9 9.5 7.5 10.0 8.1
Interest factor in rent expense . . . . . .8 .7 .7 1.2 .9
-------- -------- -------- -------- --------

Fixed Charges. . . . . . . . . . . . . . . . . $310.1 $256.5 $239.8 $274.6 $285.5
======== ======== ======== ======== ========

Ratio of earnings to fixed charges . . . . . . 3.57 7.24 7.08 7.07 9.34
======== ======== ======== ======== ========
</TABLE>

Note: The Corporation has provided Midwest Express Airlines, Inc., its
former commercial airline subsidiary, with a five-year $20 million
secondary revolving credit facility for use in the event Midwest Express
does not have amounts available for borrowing under its revolving bank
credit facility. No drawings have been made on this facility which
expires on September 27, 2000. The Corporation is contingently liable as
guarantor, or directly liable as the original obligor, for certain debt
and lease obligations of S.D. Warren Company, which was sold in
December 1994. The buyer provided the Corporation with a letter of
credit from a major financial institution guaranteeing repayment of
these obligations. No losses are expected from these arrangements and
they have not been included in the computation of earnings to fixed
charges.

(a) Income before income taxes for consolidated companies and the ratio of
earnings to fixed charges include the following pretax items: $814.3
million of charges for business improvement and other programs, $21.7
million of net unusual charges and $(126.6) of net gains on asset
disposals. Excluding these items, the ratio of earnings to fixed
charges was 5.86.

(b) Income before income taxes for consolidated companies and the ratio of
earnings to fixed charges include the following pretax items: $429.9
million of charges for business improvement and other programs and
$(93.6) of gains on asset disposals. Excluding these items, the
ratio of earnings to fixed charges was 8.55.

(c) Income before income taxes for consolidated companies and the ratio of
earnings to fixed charges include the following pretax items: $478.3
million of charges for business improvement and other programs and
$(26.5) of a gain on an asset disposal. Excluding these items, the
ratio of earnings to fixed charges was 8.97.

(d) Income before income taxes for consolidated companies and the ratio of
earnings to fixed charges include the following pretax items: $377.8
million of charges for business improvement and other programs,
$42.3 million of Mobile pulp mill fees and related severances and
$(140.0) of a gain on an asset disposal. Excluding these items, the
ratio of earnings to fixed charges was 8.09.

(e) Income before income taxes for consolidated companies and the ratio of
earnings to fixed charges include the following pretax items: $47.8
million of charges for business improvement and other programs,
$22.6 million of business integration and other costs, $9.0 million
of Mobile pulp mill fees and related severances and $(176.7) of
gains on asset disposals. Excluding these items, the ratio of earnings
to fixed charges was 9.00.

Exhibit No. (13)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Kimberly-Clark Corporation and Subsidiaries

GLOBAL BUSINESS SEGMENTS

The Corporation is organized into three global business segments. Each
segment is responsible for the development and execution of global strategies
to expand the Corporation's worldwide tissue, personal care, and health care
and other businesses. Such strategies include global plans for branding and
product positioning, cost reductions, technology and research and development
programs, and capacity and capital investment for each of these businesses.
The major products manufactured and marketed by each of the Corporation's
business segments are as follows:

- - Tissue - facial and bathroom tissue, paper towels and wipers for
household and away-from-home use; wet wipes; printing, premium business
and correspondence papers; and related products.

- - Personal Care - disposable diapers, training and youth pants; feminine
and incontinence care products; and related products.

- - Health Care and Other - health care products such as surgical packs and
gowns, sterilization wraps and disposable face masks; disposable
medical devices for respiratory care, gastroenterology and cardiology;
specialty and technical papers and related products; and other
products.

BUSINESS IMPROVEMENT AND OTHER PROGRAMS

The Corporation has undertaken a number of actions in recent years to
address ongoing business competitiveness by improving its operating efficiency
and cost structure. These programs began in 1995, at the time of the merger
with Scott Paper Company ("Scott"), and were substantially completed at
December 31, 1999. The activities involved in these plans did not disrupt the
Corporation's business operations to any significant extent. The principal
benefits of these plans have been lower production costs and a more simplified
manufacturing infrastructure. A summary and status of each of these programs
is set forth below.

1998 PLAN

Through December 31, 1999, 800 employees have been notified of the
Corporation's plans to terminate their employment, and the costs of this
workforce reduction were charged to earnings in the period in which such
employee severance benefits were appropriately communicated. Of the employees
that have been notified, 530 employees have been terminated and 270 additional
employees will be terminated in 2000. Approximately 50 additional employees
will be notified in 2000 of the Corporation's plans to terminate their
employment. Their severance costs, which are included in the $20 million
discussed above, will be accrued and charged to cost of products sold at that
time.

<PAGE>
The charges under the 1998 Plan for the two years ended December 31, 1999
are summarized below:
<TABLE>
<CAPTION>

Amounts Charged
to Earnings
-------------------
(Millions of dollars) 1999 1998
- ----------------------- ----- -----

<S> <C> <C>
Workforce severance. . . . . . . . . . . . . . . . . . . . . $16.0 $11.1
Write-downs of property, plant and equipment and other costs (3.0) 35.2
Accelerated depreciation . . . . . . . . . . . . . . . . . . 29.6 2.8
------ -----

Total pretax charge. . . . . . . . . . . . . . . . . . . . $42.6 $49.1
====== =====
</TABLE>

Charges under the 1998 Plan were included in operating profit by business
segment and geography as follows:
<TABLE>
<CAPTION>

Year Ended
December 31
------------------
(Millions of dollars) 1999 1998
- ----------------------- ----- -----

<S> <C> <C>
By Business Segment
Tissue. . . . . . . . . . . . . . . . . . . . . . . . . $36.4 $14.9
Personal Care . . . . . . . . . . . . . . . . . . . . . 6.2 34.2
----- -----

Total pretax charge . . . . . . . . . . . . . . . . . . $42.6 $49.1
===== =====

By Geography
North America . . . . . . . . . . . . . . . . . . . . . $ 5.7 $34.0
Outside North America . . . . . . . . . . . . . . . . . 36.9 15.1
----- -----

Total pretax charge . . . . . . . . . . . . . . . . . . $42.6 $49.1
===== =====
</TABLE>

Charges under the 1998 Plan reduced operating profit and net income as
follows:
<TABLE>
<CAPTION>

Year Ended
December 31
-----------------
(Millions of dollars) 1999 1998
- ----------------------- ---- ----

<S> <C> <C>
Operating profit . . . . . . . . . . . . . . . . . . . . . $42.6 $49.1
Net income . . . . . . . . . . . . . . . . . . . . . . . . 30.3 34.1
</TABLE>

Set forth below is a summary of the types and amounts recognized as
accrued expenses for the 1998 Plan together with cash payments made against
such accruals for the year ended December 31, 1999.
<TABLE>
<CAPTION>

1999
------------------
Balance Additions Balance
(Millions of dollars) 12/31/98 (Reductions) Payments 12/31/99
- ----------------------- ------------------------------------------------

<S> <C> <C> <C> <C>
Workforce severance . . . . . . . . . . . . . . . . $10.6 $16.0 $(10.2) $16.4
Asset removal costs . . . . . . . . . . . . . . . . 2.5 (.4) (2.1) -
Environmental costs and lease contract terminations 1.0 - - 1.0
Other costs . . . . . . . . . . . . . . . . . . . . 4.7 (2.6) (2.1) -
----- ----- ----- -----

$18.8 $13.0 $(14.4) $17.4
===== ===== ====== =====
</TABLE>

Management considers the 1998 Plan to be substantially completed as of
December 31, 1999. The accrued expense balance of $17.4 million will be paid
in accordance with the terms of the applicable employee severance and other
agreements.

1997 PLAN

On November 21, 1997, the Corporation announced a restructuring plan (the
"1997 Plan"). The plan included the sale, closure or downsizing of 17
manufacturing facilities worldwide and a workforce reduction of approximately
4,800 employees. Costs for the 1997 Plan of $250.8 million and
$414.2 million were recorded in 1998 and 1997, respectively, at the time costs
became accruable under appropriate accounting principles. Included in such
costs was accelerated depreciation charged to cost of products sold related to
assets that were to be disposed of but which continued to be operated during
1997 and 1998. In 1999, the Corporation recorded a net credit of $16.7
million, which was comprised of accelerated depreciation expense of $23.7
million, reductions in accrued costs of $31.9 million and lower asset
write-offs and higher sales proceeds totaling $8.5 million, due to changes in
estimates.

Charges or (credits) under the 1997 Plan for the three years ended
December 31, 1999 are summarized below:
<TABLE>
<CAPTION>

Amounts Charged to Earnings
------------------------------
(Millions of dollars) 1999 1998 1997
- ----------------------- ------------------------------

<S> <C> <C> <C>
Workforce severance. . . . . . . . . . . . . . . . . . . . . . $ (4.8) $ 53.2 $ 35.4
Write-downs of property, plant and equipment and other assets. (8.5) 56.2 93.6
Contract settlements, lease terminations and other costs . . . (27.1) 31.3 64.2
Asset impairments. . . . . . . . . . . . . . . . . . . . . . . - 31.3 187.4
Accelerated depreciation . . . . . . . . . . . . . . . . . . . 23.7 78.8 33.6
------- ------ ------

Total pretax charge (credit) . . . . . . . . . . . . . . . $(16.7) $250.8 $414.2
======= ====== ======

Income statement classification:
Cost of products sold. . . . . . . . . . . . . . . . . . . . $ 10.3 $134.0 $113.7
Restructuring and other unusual charges. . . . . . . . . . . (27.0) 116.8 300.5
------- ------ ------

Total pretax charge (credit) . . . . . . . . . . . . . . . $(16.7) $250.8 $414.2
======= ====== ======
</TABLE>

The effects of the 1997 Plan were included in operating profit by
business segment and geography as follows:

<TABLE>
<CAPTION> Year Ended December 31
----------------------------
(Millions of dollars) 1999 1998 1997
- ----------------------- ----------------------------

<S> <C> <C> <C>
By Business Segment
Tissue . . . . . . . . . . . . . . . . . . . . . . . . . $(16.5) $149.3 $324.4
Personal Care . . . . . . . . . . . . . . . . . . . . . 7.2 87.6 72.8
Health Care . . . . . . . . . . . . . . . . . . . . . . (1.3) 13.2 8.7
Unallocated. . . . . . . . . . . . . . . . . . . . . . . (6.1) .7 8.3
------ ------ ------

Total pretax charge (credit) . . . . . . . . . . $(16.7) $250.8 $414.2
===== ====== ======
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
By Geography
North America . . . . . . . . . . . . . . . . . . . . . $ .7 $160.9 $181.5
Outside North America. . . . . . . . . . . . . . . . . (11.3) 89.2 224.4
Unallocated. . . . . . . . . . . . . . . . . . . . . . . (6.1) .7 8.3
------ ------ ------

Total pretax charge (credit) . . . . . . . . . . $(16.7) $250.8 $414.2
====== ====== ======
</TABLE>

<PAGE>
The effects of the 1997 Plan decreased (increased) operating profit and
net income as follows:
<TABLE>
<CAPTION>

Year Ended December 31
----------------------------
(Millions of dollars) 1999 1998 1997
- ----------------------- ----------------------------

<S> <C> <C> <C>
Operating profit . . . . . . . . . . . . . . . . . . . . . . $(16.7) $250.8 $414.2
Net income . . . . . . . . . . . . . . . . . . . . . . . . . (9.2) 178.9 315.0
</TABLE>

The principal components of the 1997 Plan were as follows:

- - The sale, closure or downsizing of certain manufacturing facilities
worldwide has resulted in the consolidation of the Corporation's
manufacturing operations into fewer, larger and more efficient
facilities and the elimination of excess, high-cost tissue
manufacturing capacity in North America and Europe. Of the
originally identified facilities, 16 have been closed as of
December 31, 1999 and one will remain in operation. In addition, four
other small facilities were closed. The effects of these modifications
were reflected in earnings at the time such modifications became
accruable events.

- - The workforce reduction has been completed and, through December 31, 1999,
a total reduction of 3,740 employees has been realized. The costs of the
reduction were charged to earnings in the period in which such
employee severances and benefits were appropriately communicated.

- - Property, plant and equipment and other assets not used in the
restructured manufacturing operations have been written down,
excess manufacturing capacity has been eliminated, and certain
inventories in restructured operations and other assets have been
written down.

- - Certain of the Corporation's facilities and capacity which became
excessive as a result of the combination of the Corporation's health
care operations with those of Tecnol Medical Products, Inc. ("Tecnol")
have been eliminated.

- - Certain contracts have been terminated and other costs have been
incurred to achieve planned efficiencies.

In 1998, as a result of additional evaluations of the Corporation's
tissue manufacturing operations, the Villanovetta, Italy tissue manufacturing
facility became an impaired asset because its cash flows from use and disposal
were insufficient to cover the carrying amount of the asset. Consequently, a
charge to earnings of $26.8 million was recorded in the fourth quarter of
1998. In addition, management intended to close the facility in 2000 in order
to continue to align capacity with demand. While the facility continues to be
an impaired asset, in late 1999, after negotiations with labor
representatives, management agreed to only downsize the facility and continue
operations through 2001. During this period, additional negotiations with
governmental authorities and labor representatives will continue. In 1998,
other less significant modifications were made to the 1997 Plan, the largest
of which was a $12.1 million charge for losses on European feminine care
equipment removed from service. The effects of these modifications were
included in 1998 results of operations.

<PAGE>
Set forth below is a summary of the types and amounts of charges that
were recognized as accrued expenses for the 1997 Plan together with cash
payments made against such accruals for the two years ended December 31, 1999.
<TABLE>
<CAPTION>

Balance 1999 Balance
------------------------
(Millions of dollars) 12/31/98 (Reductions) Payments 12/31/99
- ----------------------- ----------------------------------------

<S> <C> <C> <C> <C>
Workforce severance . . . . . . . . . . . . . . . . $ 42.7 $ (4.8) $(37.8) $ .1
Asset removal costs . . . . . . . . . . . . . . . . 12.7 (8.5) (4.2) -
Environmental costs and lease contract terminations 40.2 (9.1) (24.1) 7.0
Other costs . . . . . . . . . . . . . . . . . . . . 15.4 (9.5) (5.9) -
------ ------ ------ ----

$111.0 $(31.9) $(72.0) $7.1
====== ====== ====== ====
</TABLE>

Balance 1998 Balance
------------------------
(Millions of dollars) 12/31/97 Additions Payments 12/31/98
- ----------------------- ----------------------------------------

<S> <C> <C> <C> <C>
Workforce severance . . . . . . . . . . . . . . . . $32.1 $53.2 $(42.6) $ 42.7
Asset removal costs . . . . . . . . . . . . . . . . 17.2 .3 (4.8) 12.7
Environmental costs and lease contract terminations 32.1 23.2 (15.1) 40.2
Other costs . . . . . . . . . . . . . . . . . . . . 9.2 7.8 (1.6) 15.4
----- ----- ------ ------

$90.6 $84.5 $(64.1) $111.0
===== ===== ====== ======
</TABLE>

Management considers the 1997 Plan to be substantially completed as of
December 31, 1999. The accrued expense balance of $7.1 million will be paid
in accordance with the terms of the applicable contract settlement and other
agreements.

1995 SCOTT MERGER AND RESTRUCTURING PLAN

In connection with the Scott merger, in December 1995, the Corporation
announced a plan to restructure the combined operations and to accomplish
other business improvement objectives (the "1995 Plan"). The 1995 Plan
included (i) the cost of plant rationalizations and employee terminations to
eliminate duplicate facilities and excess capacity; (ii) disposition of
facilities to comply with the merger-related decrees of the U.S. Justice
Department and the European Commission; (iii) costs of terminating leases,
contracts and other long-term agreements; (iv) the direct costs of the merger,
including fees of investment bankers, outside legal counsel and accountants;
(v) impaired asset charges; and (vi) accelerated depreciation charges on
assets that were to be disposed of but which were not to be immediately
removed from operations.

The original estimated pretax cost of the 1995 Plan was $1,440 million.
The plan was completed in 1998 at a pretax cost of $1,305 million. Charges or
(credits) under the 1995 Plan for the two years ended December 31, 1998 are
summarized below:

Amounts
Charged
to Earnings
---------------
(Millions of dollars) 1998 1997
- ----------------------- --------------------

<S> <C> <C>
Cost of products sold. . . . . . . . . . . . . . . . $ 1.7 $15.1
Restructuring and other unusual charges. . . . . . . (5.0) 49.0
----- -----

Total pretax charge (credit) . . . . . . . . . . . $(3.3) $64.1
===== =====
</TABLE>

<PAGE>
The effects of the 1995 Plan were included in operating profit by
business segment and geography as follows:
<TABLE>
<CAPTION>

Year Ended
December 31
--------------
(Millions of dollars) 1998 1997
- ----------------------- ---- ----

<S> <C> <C>
By Business Segment
Tissue . . . . . . . . . . . . . . . . . . . . . . $ .7 $60.5
Personal Care. . . . . . . . . . . . . . . . . . . .9 1.9
Health Care. . . . . . . . . . . . . . . . . . . . (.8) (.3)
Unallocated. . . . . . . . . . . . . . . . . . . . (4.1) 2.0
----- -----

Total pretax charge (credit) $(3.3) $64.1
===== ======

By Geography
North America. . . . . . . . . . . . . . . . . . . $(2.9) $11.5
Outside North America. . . . . . . . . . . . . . . 3.7 50.6
Unallocated. . . . . . . . . . . . . . . . . . . . (4.1) 2.0
----- -----

Total pretax charge (credit) . . . . . . . . . . $(3.3) $64.1
===== =====
</TABLE>

The effects of the 1995 Plan decreased (increased) operating profit and
net income as follows:
<TABLE>
<CAPTION>

Year Ended
December 31
--------------
(Millions of dollars) 1998 1997
- ----------------------- ---- ----

<S> <C> <C>
Operating profit . . . . . . . . . . . . . . . . . . $(3.3) $64.1
Net income . . . . . . . . . . . . . . . . . . . . . (.9) 51.3
</TABLE>

Set forth below is a summary of the types and amounts recognized as
accrued expenses for the 1995 Plan together with the cash payments made
against such accruals for the year ended December 31, 1998.
<TABLE>
<CAPTION>

1998
Balance -------------------------- Balance
(Millions of dollars) 12/31/97 (Reductions) Payments 12/31/98
- ----------------------- -------------------------------------------------

<S> <C> <C> <C> <C>
Workforce severance . . . . . . . . . . . . . . $ 8.1 $ (3.5) $ (4.6) $ -
Asset removal costs . . . . . . . . . . . . . . 1.9 - (1.9) -
Contract settlement and lease termination costs 27.1 (6.1) (5.7) 15.3
Other costs . . . . . . . . . . . . . . . . . . 9.1 (1.4) (7.0) .7
----- ------ ------ -----
$46.2 $(11.0) $(19.2) $16.0
===== ====== ====== =====
</TABLE>

The 1998 accrued expense balance of $16.0 million is being paid in
accordance with the terms of the contract settlement agreements and, as of
December 31, 1999, approximately $4 million remains to be paid under a
contractual lease obligation.

<PAGE>
OTHER INFORMATION

1999 Unusual Charges
- ----------------------

In 1999, the Corporation incurred $13.6 million of unusual business
improvement costs that were not related to the three formally adopted business
improvement plans discussed above. The costs, which primarily were for
employee severances and write off of assets removed from service, were charged
to cost of products sold when incurred.

Write-down of Certain Intangible and Other Assets
- -------------------------------------------------------

In 1998, the carrying amounts of trademarks and unamortized goodwill of
certain European businesses were determined to be impaired and written down.
These write-downs, which were charged to general expense, reduced 1998
operating profit $70.2 million and net income $57.1 million. In addition, the
Corporation began depreciating the cost of all newly acquired personal
computers ("PCs") over two years. In recognition of the change in estimated
useful lives, PC assets with a remaining net book value of $16.6 million
became subject to accelerated depreciation charges. These charges, along
with $8.8 million of charges for write-downs of other assets and a loss on a
pulp contract, reduced 1998 operating profit $81.2 million and net income
$64.7 million. Of the $81.2 million, $6.8 million was charged to cost of
products sold and $74.4 million was charged to general expense. In 1999,
accelerated depreciation on PCs reduced operating profit by $8.3 million, $2.7
million of which was charged to cost of products sold and $5.6 million was
charged to general expense.

Approximately 91 percent of the 1998 write-down of certain intangible and
other assets and accelerated depreciation on PCs described above relates to
the Personal Care segment and 9 percent relates to the Tissue segment. In
1999, 50 percent of the $8.3 million of accelerated depreciation was charged
to each of the Tissue and Personal Care segments.

<TABLE>
<CAPTION>
ANALYSIS OF CONSOLIDATED NET SALES - THREE YEARS ENDED DECEMBER 31, 1999

By Business Segment
Net Sales
---------------------------------
(Millions of dollars) 1999 1998 1997
- ----------------------- ---------------------------------
<S> <C> <C> <C>
Tissue. . . . . . . . . . . . . . . . . . . . . $ 6,968.8 $ 6,733.1 $ 7,210.2
Personal Care . . . . . . . . . . . . . . . . . 5,138.1 4,596.5 4,510.7
Health Care and Other . . . . . . . . . . . . . 936.4 1,001.5 863.6
Intersegment sales. . . . . . . . . . . . . . . (36.5) (33.3) (37.9)
--------- --------- ---------

Consolidated. . . . . . . . . . . . . . . . . . $13,006.8 $12,297.8 $12,546.6
========= ========== ==========

By Geographic Area
Net Sales
--------------------------------
(Millions of dollars) 1999 1998 1997
- --------------------- --------------------------------

United States . . . . . . . . . . . . . . . . . $ 8,392.5 $ 7,992.8 $ 7,854.3
Canada. . . . . . . . . . . . . . . . . . . . . 843.4 785.1 1,052.5
Intergeographic sales . . . . . . . . . . . . . (507.4) (408.9) (397.2)
--------- --------- ---------

Total North America . . . . . . . . . . . . . 8,728.5 8,369.0 8,509.6

Europe. . . . . . . . . . . . . . . . . . . . . 2,544.7 2,471.2 2,548.1
Asia, Latin America and Africa. . . . . . . . . 2,084.6 1,766.2 1,837.9
Intergeographic sales . . . . . . . . . . . . . (351.0) (308.6) (349.0)
--------- --------- ---------

Consolidated. . . . . . . . . . . . . . . . . . $13,006.8 $12,297.8 $12,546.6
========= ========= =========
</TABLE>

Commentary:

1999 versus 1998

Consolidated net sales increased 5.8 percent above 1998. In 1998, the
Corporation sold K-C Aviation Inc. ("KCA"). In 1999, it closed its Mobile,
Alabama pulp mill and sold its Southeast Timberlands ("SET") and its pulp mill
located in Miranda, Spain ("Miranda"). Excluding the revenues of these
divested businesses for both years, consolidated net sales increased about 8
percent. Sales volumes increased approximately 9 percent, with each of the
business segments contributing to the gain. However, changes in foreign
currency exchange rates reduced consolidated net sales by about 1 percent,
with favorable effects in Korea being more than offset by unfavorable changes
in Brazil and Europe. Although the preceding tables include the divested
businesses, the following net sales commentary excludes their results in order
to facilitate a more meaningful discussion.

- - Worldwide net sales of tissue products increased 5 percent. Sales
volumes grew by nearly 6 percent, while slightly lower prices and
unfavorable foreign currency exchange rate effects, primarily in Europe,
reduced net sales by approximately 1 percent. The increase in sales
volumes is primarily attributable to the contribution from the Attisholz
Holding AG ("Attisholz") tissue brands in Europe, acquired in June 1999,
and improved sales of Kleenex Cottonelle and Scott bathroom tissue in
North America. Other significant contributors to the increase were Kleenex
facial tissue, washroom systems and wet wipes products, which more than
offset a decline in sales volumes for consumer towel products in North
America. A portion of the tissue sales volume increase is due to operations
in Colombia, in which the Corporation made an additional investment in
late 1998 to gain majority ownership of certain Latin American equity
companies (the "Colombian Investment").

- - Worldwide net sales of personal care products were 11.8 percent greater
primarily due to a 13 percent increase in sales volumes. A selling
price increase of approximately 1 percent was more than offset by the
negative effect of changes in foreign currency exchange rates of slightly
more than 2 percent. Net sales were higher in every geographic region.
In North America, net sales increased across all brands, led by higher
volumes for Huggies diapers. There was particular improvement in diaper
sales in Europe and notably increased sales of personal care products in
Korea. In addition, a portion of the increase in net sales is
attributable to the Colombian Investment.

- - Net sales for health care and other products increased 11 percent
primarily due to sales volume growth for professional health care
products, including the contribution from the acquisition of Ballard
Medical Products ("Ballard") in September 1999.

1998 versus 1997

Consolidated net sales were 2.0 percent lower than in 1997. In 1997, the
Corporation divested a pulp and newsprint facility located in Coosa Pines,
Alabama ("Coosa") and sold its 50.1 percent interest in Scott Paper Limited
("SPL"). Excluding the revenues from these divested businesses for both
years, consolidated net sales remained essentially even. Sales volumes,
however, increased more than 2 percent and selling prices were nearly 2
percent higher, primarily due to improved pricing for consumer tissue products
in the United States. However, changes in foreign currency exchange rates,
primarily in Asia, reduced consolidated net sales slightly more than 3
percent. Although the preceding tables include the divested businesses, the
following net sales commentary excludes their results in order to facilitate a
more meaningful discussion.

- - Worldwide net sales for tissue products declined slightly more than 3
percent primarily due to changes in currency exchange rates in Asia.
Sales volumes declined approximately 1 percent as sales volume increases
in Latin America and for wet wipes products, primarily in North
America, were offset by lower sales volumes in Europe and Asia and
<PAGE>
lower consumer towel volume in North America. The decline in sales volumes,
however, was more than offset by an increase of nearly 2 percent in selling
prices.

- - Worldwide net sales of personal care products increased about 2 percent.
Sales volumes grew by nearly 5 percent and selling prices increased by
about 2 percent; however, changes in foreign currency exchange rates
reduced net sales by approximately 4 percent. Training and youth pants
in North America and sales volume growth in Latin America were the primary
factors contributing to the overall sales volume increase. These
increases more than offset lower diaper sales volumes in North America
and Europe which were attributable to the transition to larger size
product packaging, the introduction of unisex product and increased
competition.

- - Net sales for health care and other products increased more than 24
percent due to sales volume growth in health care products, driven,
in large part, by the acquisition of Tecnol in December 1997.

UNUSUAL ITEMS

For purposes of this Management's Discussion and Analysis, and in order
to facilitate a meaningful discussion of the ongoing operations of the
Corporation, the items summarized in the following table are considered to be
unusual items ("Unusual Items").
<TABLE>
<CAPTION>

Year Ended December 31
--------------------------------
(Millions of dollars) 1999 1998 1997
- ----------------------- --------------------------------

<S> <C> <C> <C>
Charges (credits) to Operating Profit:
Business Improvement and Other Programs:
1998 Plan . . . . . . . . . . . . . . . . . . . . . $ 42.6 $ 49.1 $ -
1997 Plan . . . . . . . . . . . . . . . . . . . . . (16.7) 250.8 414.2
1995 Plan . . . . . . . . . . . . . . . . . . . . . - (3.3) 64.1
1999 unusual charges. . . . . . . . . . . . . . . . 13.6 - -
Write-down of certain intangible and other assets . . 8.3 81.2 -
Gains on disposals of assets. . . . . . . . . . . . . (176.7) (140.0) (26.5)
Mobile pulp mill fees and related severances. . . . . 9.0 42.3 -
Business integration and other costs. . . . . . . . . 22.6 - -
-------- --------- --------

Net charge (credit) for unusual items . . . . . . . . . (97.3) 280.1 451.8
Operating profit as reported. . . . . . . . . . . . . . 2,435.4 1,697.7 1,486.1
-------- --------- --------

Operating profit excluding unusual items. . . . . . . . $2,338.1 $1,977.8 $1,937.9
======== ========= =========
</TABLE>

Note: Gains on certain disposals of assets are recorded in the
Consolidated Income Statement as other (income) expense, net. In December
1999, the Corporation reclassified other (income) expense, net, to be part of
reported operating profit in accordance with Regulation S-X.

- - A description of the items included in the 1998, 1997 and 1995 Plans, the
1999 unusual charges and the write-down of certain intangible and other
assets is contained in the Business Improvement and Other Programs
section above.

- - Gains on disposals of assets are primarily related to the sale of a portion
of SET in 1999, the sale of KCA in 1998 and the sale of the
Corporation's investment in Ssangyong Paper Co., Ltd. (Korea) in 1997.

- - In 1999, the Corporation recorded severance related to the sale of SET.
In 1998, a contract cancellation fee and severance related to the closure
of the Mobile pulp mill were recorded.

<PAGE>
- - As part of the integration of acquired businesses, Attisholz and Ballard,
the Corporation recorded certain costs, which were expensed as incurred,
related to assimilating these operations. It is estimated that an
additional $10 million of cost related to these activities will be incurred
and expensed in 2000.

The items displayed in the preceding table have been excluded from
operating profit in the "Excluding Unusual Items" columns in the following
Consolidated Operating Profit tables.

<TABLE>
<CAPTION>
ANALYSIS OF CONSOLIDATED OPERATING PROFIT - THREE YEARS ENDED DECEMBER 31,
1999

By Business Segment

1999 1998 1997
----------------- -------------------- -------------------
Excluding Excluding Excluding
As Unusual As Unusual As Unusual
(Millions of dollars) Reported Items Reported Items Reported Items
- ----------------------- -------- --------- -------- --------- -------- ---------

<S> <C> <C> <C> <C> <C> <C>
Tissue . . . . . . . . . . . . $1,114.1 $1,171.3 $ 921.3 $1,135.7 $ 704.3 $1,089.2
Personal Care. . . . . . . . . 1,092.8 1,109.1 588.7 785.3 737.8 812.5
Health Care and Other. . . . . 154.3 161.9 161.2 173.7 135.1 143.5
Unallocated - net. . . . . . . 74.2 (104.2) 26.5 (116.9) (91.1) (107.3)
-------- -------- -------- -------- -------- --------

Consolidated . . . . . . . . . $2,435.4 $2,338.1 $1,697.7 $1,977.8 $1,486.1 $1,937.9
======== ======== ======== ======== ======== ========
</TABLE>

By Geographic Area

<S> <C> <C> <C> <C> <C> <C>
United States . . . . . . . . . $1,821.9 $1,868.8 $1,407.2 $1,663.4 $1,362.8 $1,553.1
Canada. . . . . . . . . . . . . 105.3 110.9 112.7 104.8 151.9 154.6
Europe. . . . . . . . . . . . . 183.3 219.8 (39.7) 123.1 (76.1) 128.7
Asia, Latin America and Africa 250.7 242.8 191.0 203.4 138.6 208.8
Unallocated - net . . . . . . . 74.2 (104.2) 26.5 (116.9) (91.1) (107.3)
-------- --------- --------- --------- --------- ---------

Consolidated. . . . . . . . . . $2,435.4 $2,338.1 $1,697.7 $1,977.8 $1,486.1 $1,937.9
======== ========= ========= ========= ========= =========
</TABLE>

Note: Unallocated - net consists of expenses not associated with the business
segments or geographic areas and other (income) expense, net.

Commentary:

1999 versus 1998

Excluding the Unusual Items, operating profit increased 18.2 percent, and
operating profit as a percentage of net sales increased to 18.0 percent in
1999 from 16.1 percent in 1998. Excluding the divested businesses and the
Unusual Items for both years, operating profit increased 20.0 percent. The
increase in operating profit was driven by the higher sales volumes, with
productivity improvements and other manufacturing cost efficiencies
contributing to the gain. The benefits of these improvements more than offset
the additional investments in marketing and product improvement initiatives.
The following commentary excludes the Unusual Items and the results of
divested businesses in both years.

<PAGE>

- - Operating profit for tissue products increased slightly more than 4 percent
primarily due to higher sales volumes for facial and bathroom tissue and
wet wipes products in North America, the Attisholz acquisition in Europe
and the Colombian Investment. The sales growth along with manufacturing
efficiencies more than offset the increased marketing costs for new
Kleenex Cottonelle bathroom tissue and improved Scott towels and bathroom
tissue in North America.

- - Operating profit for personal care products increased 41.2 percent, led
by results in North America where the higher sales volumes, manufacturing
cost reductions and selling price increases more than offset increased
marketing costs. Operating profit also benefited from contributions by
Europe due to the increased diaper sales volume, other cost savings
and lower marketing expense and the Colombian Investment.

- - Operating profit for the health care and other segment increased nearly
3 percent primarily due to increased sales volumes for professional
health care products which benefited from the Ballard acquisition.

1998 versus 1997

Excluding the Unusual Items, operating profit increased 2.1 percent in
absolute terms and increased to 16.1 percent in 1998 from 15.4 percent in 1997
as a percentage of net sales. Excluding the divested businesses and the
Unusual Items for both years, operating profit increased approximately 3.8
percent. The increase in operating profit was due to the price and sales
volume increases partially offset by higher spending for advertising and
promotion, the negative effect of changes in foreign currency exchange rates
and additional goodwill amortization. The following operating profit
commentary excludes the Unusual Items and the results of divested businesses
in both years.

- - Tissue operating profit increased 7 percent principally due to the
selling price increases. Restructuring and other cost savings were
partially offset by changes in currency exchange rates.

- - Operating profit for personal care declined 3 percent, as increased
advertising and promotion, and product improvement costs, primarily in
North America, and changes in currency exchange rates more than offset
the gains in selling prices and sales volumes.

- - Operating profit for health care and other products increased
approximately 24 percent due, in large part, to the acquisition of
Tecnol, partially offset by increased goodwill amortization.

- - Changes in currency exchange rates reduced consolidated operating profit
by nearly 3 percent.

ADDITIONAL INCOME STATEMENT COMMENTARY

1999 versus 1998

- - Interest expense increased primarily due to higher average debt levels.

- - The Corporation's effective income tax rate was 32.4 percent in 1999
compared with 34.3 percent in 1998. Excluding the Unusual Items from
both years, the Corporation's effective income tax rate was 32.1 percent
in 1999 compared with 32.0 percent in 1998.

- - The Corporation's share of net income of equity companies was $189.6
million in 1999 compared with $146.3 million in 1998, excluding a
charge related to the change in value of the Mexican peso in 1998. The
increase is primarily due to the results of Kimberly-Clark de
Mexico, S.A. de C.V. ("KCM"), which benefited from higher selling
prices and increased sales volumes.

<PAGE>

- - Minority owners' share of subsidiaries' net income increased in 1999
primarily due to the previously mentioned Colombian Investment
and the improved results of the Corporation's majority owned subsidiary
in Korea.

- - Diluted net income was $3.09 per share in 1999 compared with $1.99 per
share in 1998, an increase of 55.3 percent. Excluding the Unusual Items
in both years, the charge for the devaluation of the Mexican peso
and the cumulative effect of the accounting change for start-up
costs in 1998, earnings from operations were $2.98 per share in 1999
compared with $2.44 per share in 1998, an increase of 22.1 percent.

1998 versus 1997

- - Interest expense increased primarily due to higher average debt levels.

- - The Corporation's effective income tax rate was 34.3 percent in 1998
compared with 36.5 percent in 1997. Excluding the Unusual Items from
both years, the Corporation's effective income tax rate was 32.0 percent
in 1998 compared with 32.8 percent in 1997.

- - The Corporation's 1998 share of net income of equity companies includes
a charge equal to $.02 per share related to the change in the value of
the Mexican peso. In 1997, a gain equal to $.03 per share, primarily
related to the sale of a portion of the tissue business of KCM to meet
Mexican regulatory requirements in connection with KCM's merger with
Scott's former Mexican affiliate, was included in the Corporation's
share of net income of equity companies. Also included in the
Corporation's share of 1997 net income of equity companies was $2.2
million of charges for the 1997 Plan. Excluding these items in both
years, the Corporation's share of net income of equity companies increased
2.2 percent.

- - Minority owners' share of subsidiaries' net income in 1998 and 1997
includes $.8 million and $6.5 million, respectively, attributable to
other owners' share of Unusual Items. Also included in 1997 is $8.7
million of other owners' share of the net income of SPL. Excluding these
items, minority owners' share of subsidiaries' net income decreased
$4.8 million.

- - In 1997, the Corporation recorded extraordinary gains of $17.5 million
(or $.03 per share), net of income taxes of $38.4 million. The gains
related to certain asset disposals and impairments occurring subsequent
to a business combination accounted for as a pooling of interest
(the Scott merger).

- - Effective January 1, 1998, the Corporation changed its method of
accounting for preoperating and start-up costs to expense these costs
as incurred in accordance with new accounting requirements. Previously,
these costs incurred for major projects were capitalized and amortized
over five years. The cumulative effect of this accounting change is
presented on the income statement net of income taxes. This charge reduced
reported net income for the first quarter and 1998 by $.02 per share.

- - Diluted net income was $1.99 per share in 1998 compared with $1.79 per
share in 1997, an increase of 11.2 percent. Excluding the Unusual Items
in both years, the change in the value of the Mexican peso and the
cumulative effect of the accounting change in 1998, and the extraordinary
gains in 1997, earnings per share from operations increased to $2.44 from
$2.36 in 1997, an increase of 3.4 percent.

<PAGE>
<TABLE>
<CAPTION>
SALES OF PRINCIPAL PRODUCTS

(Billions of dollars) 1999 1998 1997 1996
- ----------------------- ---- ----- ----- -----

<S> <C> <C> <C> <C>
Tissue-based products . . . . . . . . . . $ 5.9 $ 5.7 $ 6.1 $ 6.9
Diapers . . . . . . . . . . . . . . . . . 3.0 2.6 2.7 2.3
All other . . . . . . . . . . . . . . . . 4.1 4.0 3.7 3.9
----- ----- ----- -----

Consolidated. . . . . . . . . . . . . . . $13.0 $12.3 $12.5 $13.1
===== ===== ===== =====
</TABLE>

- - Consolidated net sales increased 5.8 percent in 1999, after declining
for the two years after 1996. The declining sales trend was affected by
the divestment of noncore businesses and those businesses that were sold
following the 1995 Scott merger.

<TABLE>
<CAPTION>
LIQUIDITY AND CAPITAL RESOURCES

Year Ended December 31
-------------------------
(Millions of dollars) 1999 1998
- ----------------------- ---- ----

<S> <C> <C>
Cash provided by operations . . . . . . . . . . . . . $2,134.3 $1,993.7
Capital spending. . . . . . . . . . . . . . . . . . . 786.4 669.5
Acquisitions of businesses, net of cash acquired. . . 271.9 342.5
Proceeds from dispositions of property and businesses 115.2 324.9
Proceeds from notes receivable. . . . . . . . . . . . 383.0 -
Ratio of net debt to capital. . . . . . . . . . . . . 28.9% 35.6%
Pretax interest coverage - times. . . . . . . . . . . 11.4 8.7
</TABLE>

Cash Flow Commentary:

- - Cash provided by operations increased by $140.6 million. Net income
plus noncash charges included in net income increased to $2.2 billion in
1999 compared with $1.9 billion in 1998. The Corporation invested $67.1
million in working capital in 1999 versus a decrease of $63.6
million in 1998.

- - Approximately $86 million and $83 million of cash payments were charged
to the accruals for the Business Improvement and Other Programs in 1999
and 1998, respectively.

- - Cash proceeds received in 1999 from the disposal of a portion of SET and
from the sale of Miranda and other asset disposals totaled $115.2
million. Additionally, in 1999, $383 million of notes receivable
from the SET transaction were transferred for cash to a
nonconsolidated special purpose entity in which the Corporation has a
minority voting interest. The transfer of the notes, which was accounted
for as a sale, resulted in no gain or loss to the Corporation. Cash
proceeds received in 1998 from the sale of KCA and other asset disposals
totaled $324.9 million.

- - In 1999, the Corporation purchased 13.5 million shares of its common
stock in connection with its share repurchase program at a total cost of
about $750 million. At December 31, 1999, authority to repurchase
7.5 million shares remained under an October 1998 repurchase
authority from the Corporation's board of directors. In 1998, the
Corporation purchased 19.5 million shares of its common stock in
connection with its share repurchase program at a total cost of
approximately $900 million.

<PAGE>
Financing Commentary:

- - At December 31, 1999, total debt was $2.7 billion, essentially even with
the prior year. Net debt (total debt net of cash, cash equivalents and
$220 million of long-term notes receivable) was $2.2 billion at
December 31, 1999 compared with $2.3 billion at December 31, 1998. The
Corporation's ratio of net debt to capital of 28.9 percent at
December 31, 1999 is below the targeted range of 30 to 40 percent.

- - The increase in the pretax interest coverage ratio is primarily due to
the higher level of pretax income. Excluding the Unusual Items in 1999
and 1998, the pretax interest coverage ratio would have been 11.0
and 10.7, respectively.

- - Revolving credit facilities of $1.1 billion are in place for general
corporate purposes and to back up commercial paper borrowings.

- - The Corporation's long-term debt securities have a Double-A rating and
its commercial paper is rated in the top category.

Other Commentary:

- - On November 17, 1999, the Corporation announced that it had signed a
definitive agreement to acquire Safeskin Corporation ("Safeskin"), a
leading maker of high quality, disposable gloves for the health care,
high-technology and scientific industries. Under the agreement,
Safeskin shareholders will receive .1956 shares of the Corporation's
common stock in exchange for each share of Safeskin common stock.
The transaction, which is valued at approximately $800 million,
will be accounted for as a purchase.

- - 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.

MARKET RISK SENSITIVITY AND INFLATION RISKS

The Corporation is disclosing information concerning market risk with
respect to foreign exchange rates, interest rates and commodity prices. The
Corporation makes such disclosures utilizing a sensitivity analysis approach
based on hypothetical changes in foreign exchange rates, interest rates and
commodity prices.

As a multinational enterprise, the Corporation is exposed to changes in
foreign currency exchange rates, interest rates and commodity prices. The
Corporation employs a variety of practices to manage these market risks,
including its operating and financing activities and, where deemed
appropriate, the use of derivative financial instruments. The Corporation
uses derivative financial instruments only for risk management purposes and
does not use them for speculation or for trading. All derivative instruments
are either exchange traded or are entered into with major financial
institutions for the purpose of reducing the Corporation's credit risk and the
risk of nonperformance by third parties.

Foreign Currency Risk

<PAGE>
currency transactional exposures were managed during 1999, and management
does not foresee or expect any significant changes in such exposures or in
the strategies it employs to manage them in the near future.

Foreign currency contracts and transactional exposures are sensitive to
changes in foreign currency exchange rates. As of December 31, 1999, a ten
percent unfavorable change in the exchange rate of the U.S. dollar against the
prevailing market rates of the foreign currencies in which the Corporation has
transactional exposures would have resulted in a net pretax loss of
approximately $27 million. Gains or losses on foreign currency contracts and
transactional exposures are defined as the difference between the contract
rates and the hypothetical exchange rates. In the view of management, the
above losses resulting from the hypothetical changes in foreign currency
exchange rates are not material to the Corporation's consolidated financial
position, results of operations or cash flows.

Interest Rate Risk

Interest rate risk is managed through the maintenance of a portfolio of
variable- and fixed-rate debt composed of short- and long-term instruments.
The objective is to maintain a cost-effective mix that management deems
appropriate. At December 31, 1999, the Corporation's debt portfolio was
composed of approximately 33 percent variable-rate debt, adjusted for the
effect of variable-rate assets, and 67 percent fixed-rate debt. The strategy
employed by the Corporation to manage its exposure to interest rate
fluctuations did not change significantly during 1999, and management does not
foresee or expect any significant changes in its exposure to interest rate
fluctuations or in how such exposure is managed in the near future.

Various financial instruments issued by the Corporation and its
subsidiaries are sensitive to changes in interest rates. Interest rate
changes would result in gains or losses in the market value of the
Corporation's fixed-rate debt due to differences between the current market
interest rates and the rates governing these instruments. With respect to the
Corporation's fixed-rate debt outstanding at December 31, 1999, a ten percent
change in interest rates would have resulted in no material change in the fair
value of the Corporation's fixed-rate debt. With respect to the Corporation's
commercial paper and other variable-rate debt, a ten percent increase in
interest rates would have had no material effect on the Corporation's future
results of operations.

Commodity Price Risk

The Corporation is subject to commodity price risk arising from price
movement for purchased pulp, the market price of which is determined by
industry supply and demand. Selling prices of the Corporation's tissue
products can be influenced by the market price for pulp. On a worldwide
basis, the Corporation has reduced its internal pulp supply to approximately
40 percent of its virgin fiber needs. The Corporation has announced its
intention to further reduce its level of pulp integration to approximately 20
percent. However, such a reduction in pulp integration could increase the
Corporation's commodity price risk. Specifically, increases in pulp prices
could adversely affect the Corporation's earnings if selling prices are not
adjusted or if such adjustments significantly trail the increases in pulp
prices. The Corporation has not used derivative instruments in the management
of these risks.

Inflation Risk

The Corporation's inflation risks are managed on an entity-by-entity
basis through selective price increases, productivity increases and
cost-containment measures. Management does not believe that inflation risk is
material to the Corporation's business or its consolidated financial position,
results of operations or cash flows.

<PAGE>
"YEAR 2000" READINESS

Beginning in 1995, the Corporation was involved in a worldwide program to
be "Year 2000" ready. The program involved 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 were contacts with key suppliers and customers
to determine 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.

As a result of this worldwide program, there were no significant
occurrences of Year 2000-related failures. Additionally, the Corporation does
not anticipate that any significant subsequent events will occur.

The total costs incurred to complete "Year 2000" readiness, which was
comprised of staff time and the costs of replacing certain computerized
systems and microprocessors, was approximately $80 million.

CONTINGENCIES AND LEGAL MATTERS

In connection with the Mobile pulp mill closure, and as permitted by the
terms of the governing contract, on May 5, 1998, the Corporation gave notice
to Mobile Energy Services Company, L.L.C. ("MESC") of the Corporation's intent
to terminate MESC's long-term contract for power, steam and liquor processing
services with respect to the Mobile pulp mill. The resulting termination
penalty of $24.3 million, which comprised six months of adjusted demand
payments under the contract, was charged to cost of products sold in the
second quarter of 1998. On January 14, 1999, MESC and Mobile Energy Services
Holdings, Inc. (the "debtors") filed an action against the Corporation
claiming unspecified damages in connection with the cancellation of the
contract.

On December 31, 1999, a joint motion of the debtors and the MESC
bondholders' steering committee (the "Motion") was filed with the U.S.
Bankruptcy Court seeking approval of a settlement and compromise of claims
against the Corporation arising from the closure of the Mobile pulp mill and
termination of the pulp mill's energy services agreement. The Motion,
which was granted by the U.S. Bankruptcy Court by order dated January 24,
2000, outlines the terms of settlement for various litigation matters
between the Corporation and MESC. Under the proposed settlement, the
Corporation agreed to pay MESC at closing approximately $30 million, subject
to certain adjustments. Closing of the settlement would be subject to, among
other conditions, MESC filing a plan of reorganization from bankruptcy and
the ultimate approval of that plan by the U.S. Bankruptcy Court. The
approximate $30 million payment, which will be accrued when appropriate, is
in addition to $24.3 million previously accrued by the Corporation. In
addition, the proposed settlement provides MESC with an option to purchase the
Mobile pulp mill at a nominal price; a settlement of all pending litigation
and arbitration between the Corporation and MESC; mutual releases by the
Corporation, MESC and its affiliate (the Southern Company and affiliates),
and the representatives of the MESC bondholders; and an agreement by MESC
to terminate the existing tissue mill energy services agreement and to provide
the Mobile tissue mill energy at market rates.

The outcome of the MESC litigation and settlement matters is not expected
to have a material adverse effect on the Corporation's business, financial
condition or results of operations.

<PAGE>
ENVIRONMENTAL MATTERS

The Corporation is subject to federal, state and local environmental
protection laws and regulations with respect to its business operations and is
operating in compliance with, or taking action aimed at ensuring compliance
with, such laws and regulations. Compliance with these laws and regulations
is not expected to have a material adverse effect on the Corporation's
business or results of operations. 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 the Corporation's business, financial
condition or results of operations.

OUTLOOK

The Corporation expects sales to continue to rise 6 percent to 8 percent
annually and earnings per share to grow at double-digit rates. A portion of
this growth is expected to be achieved by increasing our shares in existing
markets and entering new countries for additional growth. The Corporation
expects product superiority and innovation to remain as the cornerstones of
its growth strategy. The Corporation also expects acquisitions to continue to
play a key role in its growth strategy.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

Certain matters discussed in this report concerning, among other things,
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 charges under the 1997 Plan, the adequacy
of the 1998 Plan and the anticipated acquisition of Safeskin constitute
forward-looking statements and are based upon management's expectations and
beliefs concerning future events impacting the Corporation. There can be no
assurance that these events will occur or that the Corporation's results will
be as estimated.

The assumptions used as a basis for the forward-looking statements
include many estimates that, among other things, depend on the achievement of
future cost savings, including cost savings as a result of the 1997 Plan and
the 1998 Plan, and the ability to achieve intended facilities consolidations,
and projected volume increases. Furthermore, the Corporation has assumed that
it will continue to identify suitable acquisition candidates in those product
markets where it intends to grow by acquisition. In addition, many
factors outside the control of the Corporation, including the prices of the
Corporation's raw materials, potential competitive pressures on selling prices
or advertising and promotion expenses for the Corporation's products, and
fluctuations in foreign currency exchange rates, as well as general economic
conditions in the markets in which the Corporation does business, also
could impact the realization of such estimates.

For a description of these and other 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 I of the
Corporation's Annual Report on Form 10-K entitled "Factors That May Affect
Future Results."
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED INCOME STATEMENT
Kimberly-Clark Corporation and Subsidiaries

Year Ended December 31
----------------------
(Millions of dollars, except per share amounts) 1999 1998 1997
- -----------------------------------------------------------------------------------------------

<S> <C> <C> <C>
NET SALES . . . . . . . . . . . . . . . . . . . . . . . . . $13,006.8 $12,297.8 $12,546.6
Cost of products sold . . . . . . . . . . . . . . . . . . 7,681.6 7,700.2 7,939.0
---------- ---------- ----------

GROSS PROFIT. . . . . . . . . . . . . . . . . . . . . . . . 5,325.2 4,597.6 4,607.6
Advertising, promotion and selling expenses . . . . . . . 2,097.8 1,937.4 1,937.2
Research expense. . . . . . . . . . . . . . . . . . . . . 249.8 224.8 211.8
General expense . . . . . . . . . . . . . . . . . . . . . 707.4 717.0 623.9
Goodwill amortization . . . . . . . . . . . . . . . . . . 41.8 33.3 16.8
Restructuring and other unusual charges . . . . . . . . . (27.0) 111.8 349.5
Other (income) expense, net . . . . . . . . . . . . . . . (180.0) (124.4) (17.7)
---------- ---------- ----------

OPERATING PROFIT. . . . . . . . . . . . . . . . . . . . . . 2,435.4 1,697.7 1,486.1
Interest income . . . . . . . . . . . . . . . . . . . . . 29.4 24.3 31.4
Interest expense. . . . . . . . . . . . . . . . . . . . . (213.1) (198.7) (164.8)
---------- ---------- ----------

INCOME BEFORE INCOME TAXES. . . . . . . . . . . . . . . . . 2,251.7 1,523.3 1,352.7
Provision for income taxes. . . . . . . . . . . . . . . . 730.2 522.2 493.3
---------- ---------- ----------

INCOME BEFORE EQUITY INTERESTS. . . . . . . . . . . . . . . 1,521.5 1,001.1 859.4
Share of net income of equity companies . . . . . . . . . 189.6 137.1 157.3
Minority owners' share of subsidiaries' net income. . . . (43.0) (23.9) (31.3)
---------- ---------- ----------

INCOME BEFORE EXTRAORDINARY GAINS AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE . . . . . . . . . . . . . . . 1,668.1 1,114.3 985.4
Extraordinary gains, net of income taxes. . . . . . . . - - 17.5
Cumulative effect of accounting change,
net of income taxes . . . . . . . . . . . . . . . . . - (11.2) -
---------- ---------- ----------

NET INCOME. . . . . . . . . . . . . . . . . . . . . . . . . $ 1,668.1 $ 1,103.1 $ 1,002.9
========== ========== ==========

PER SHARE BASIS
BASIC
Income before extraordinary gains and cumulative effect
of accounting change. . . . . . . . . . . . . . . . . $ 3.11 $ 2.02 $ 1.77
========== ========== ==========
Net income. . . . . . . . . . . . . . . . . . . . . . . $ 3.11 $ 2.00 $ 1.80
========== ========== ==========

DILUTED
Income before extraordinary gains and cumulative effect
of accounting change. . . . . . . . . . . . . . . . . $ 3.09 $ 2.01 $ 1.76
========== ========== ==========
Net income. . . . . . . . . . . . . . . . . . . . . . . $ 3.09 $ 1.99 $ 1.79
========== ========== ==========

</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
Kimberly-Clark Corporation and Subsidiaries

December 31
-----------
(Millions of dollars) ASSETS 1999 1998
- -----------------------------------------------------------------

<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents . . . . . . . $ 322.8 $ 144.0

Accounts receivable . . . . . . . . . . 1,600.6 1,465.2

Inventories . . . . . . . . . . . . . . 1,239.9 1,283.8

Deferred income taxes . . . . . . . . . 311.4 375.3

Prepaid expenses and other. . . . . . . 87.1 117.5
--------- ---------

TOTAL CURRENT ASSETS. . . . . . . . . 3,561.8 3,385.8

PROPERTY

Land . . . . . . . . . . . . . . . . . 190.7 161.1

Buildings . . . . . . . . . . . . . . . 1,739.2 1,673.1

Machinery and equipment . . . . . . . . 8,747.7 8,461.2

Construction in progress. . . . . . . . 403.2 264.6
--------- ---------

11,080.8 10,560.0

Less accumulated depreciation . . . . . 4,858.8 4,561.9
--------- ---------

NET PROPERTY. . . . . . . . . . . . . 6,222.0 5,998.1

INVESTMENTS IN EQUITY COMPANIES . . . . . 863.1 813.1

ASSETS HELD FOR SALE . . . . . . . . . . - 109.5

GOODWILL, NET OF ACCUMULATED AMORTIZATION 1,246.1 589.4

OTHER ASSETS. . . . . . . . . . . . . . . 922.5 791.9
--------- ---------

$12,815.5 $11,687.8
========= =========

</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>

December 31
---------------------
LIABILITIES AND STOCKHOLDERS' EQUITY 1999 1998
- ---------------------------------------------------------------------------------------------------

<S> <C> <C>
CURRENT LIABILITIES
Debt payable within one year . . . . . . . . . . . . . . . . . . . . . . $ 782.4 $ 635.4

Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . 780.4 670.1

Other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245.3 333.1

Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,312.1 1,419.1

Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 584.6 570.9

Dividends payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 141.0 135.5
---------- ----------

TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . 3,845.8 3,764.1

LONG-TERM DEBT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,926.6 2,068.2

NONCURRENT EMPLOYEE BENEFIT AND OTHER OBLIGATIONS . . . . . . . . . . . . . 868.5 899.9

DEFERRED INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . 836.9 721.6

MINORITY OWNERS' INTERESTS IN SUBSIDIARIES. . . . . . . . . . . . . . . . . 244.6 202.5

STOCKHOLDERS' EQUITY

Preferred stock - no par value - authorized 20.0 million shares,
none issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - -

Common stock - $1.25 par value - authorized 1.2 billion shares;
issued 568.6 million shares at December 31, 1999 and 1998 . . . . . . . 710.8 710.8

Additional paid-in capital 166.4 86.3

Common stock held in treasury, at cost - 28.0 million and 30.3 million
shares at December 31, 1999 and 1998, respectively. . . . . . . . . . . (1,420.4) (1,454.7)

Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . (1,114.8) (964.3)

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,764.6 5,653.4

Unearned compensation on restricted stock . . . . . . . . . . . . . . . . (13.5) -
---------- ----------

TOTAL STOCKHOLDERS' EQUITY. . . . . . . . . . . . . . . . . . . . . . . 5,093.1 4,031.5
---------- ----------

$12,815.5 $11,687.8
========== ==========
</TABLE>

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Kimberly-Clark Corporation and Subsidiaries

Common Stock
------------------- Accumulated Unearned Total
Issued Additional Treasury Stock Other Compensation Stock- Compre-
(Millions of dollars, ------------------- Paid-In --------------- Comprehensive Retained on Restricted holders' hensive
except share amounts) Shares Amount Capital Shares Amount Income(Loss) Earnings Stock Equity Income
- ------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1996 . . . . . .568,596,810 $710.8 $136.7 5,223,194 $(214.4) $(667.4) $4,629.3 $ - $4,595.0
Shares issued for the
exercise of stock options
and awards. . . . . . . . . . - - (18.2) (2,434,504) 88.2 - - - 70.0
Shares purchased for
treasury. . . . . . . . . . . - - - 18,143,208 (910.6) - - - (910.6)
Shares issued for the
acquisition of Tecnol
Medical Products, Inc . . . - - (5.2) (8,681,530) 419.7 - - - 414.5
Comprehensive income:
Net income. . . . . . . . . . - - - - - - 1,002.9 - 1,002.9 $1,002.9
Other comprehensive
income (loss):
Unrealized translation
adjustments . . . . . . - - - - - (296.4) - - (296.4) (296.4)
Minimum pension liability
adjustment. . . . . . . - - - - (2.8) - - (2.8) (2.8)
- --------
Comprehensive income. . . . . . - - - - - - - - - $ 703.7
========
Dividends declared on
common shares . . . . . . . . - - - - - - (532.3) - (532.3)
--------------------------------------------------------------------------------------------------
Balance at
December 31, 1997 . . . . . .568,596,810 710.8 113.3 12,250,368 (617.1) (966.6) 5,099.9 - 4,340.3
Shares issued for the
exercise of stock options 55.1
and awards. . . . . . . . . . - - (27.0) (1,643,718) 82.1 - - -
Shares purchased for
treasury. . . . . . . . . . . - - - 19,732,752 - (919.7) - - (919.7)
Comprehensive income:
Net income. . . . . . . . . . - - - - - - 1,103.1 - 1,103.1 $1,103.1
Other comprehensive
income (loss):
Unrealized translation
adjustments . . . . . . - - - - - 3.1 - - 3.1 3.1
Minimum pension liability
adjustment. . . . . . . - - - - - (.8) - - (.8) (.8)
-------
Comprehensive income. . . . . . - - - - - - - - - $1,105.4
========
Dividends declared on
common shares . . . . . . . . - - - - - - (549.6) - (549.6)
----------------------------------------------------------------------------------------------------
Balance at
December 31, 1998 . . . . . .568,596,810 710.8 86.3 30,339,402 (1,454.7) (964.3) 5,653.4 - 4,031.5
Shares issued for the
exercise of stock options
and awards. . . . . . . . . . - - (19.7) (2,189,629) 108.9 - - - 89.2
Shares purchased for
treasury. . . . . . . . . . . - - - 13,940,653 (779.0) - - - (779.0)
Shares issued for the
acquisition of Ballard
Medical Products. . . . . . . - - 100.6 (13,758,610) 686.2 - - - 786.8
Stock issued, net of
forfeitures, under restricted
stock plans, less
amortization. . . . . . . . . - - (.8) (362,000) 18.2 - - (13.5) 3.9
Comprehensive income:
Net income. . . . . . . . . . - - - - - - 1,668.1 - 1,668.1 $1,668.1
Other comprehensive
income (loss):
Unrealized translation
adjustments . . . . . . - - - - - (154.6) - - (154.6) (154.6)
Minimum pension liability
adjustment. . . . . . . - - - - - 4.1 - - 4.1 4.1
--------
Comprehensive income. . . . . . - - - - - - - - - $1,517.6
========
Dividends declared on
common shares . . . . . . . . - - - - - - (556.9) - (556.9)
------------------------------------------------------------------------------------------
Balance at
December 31, 1999 . . . . . .568,596,810 $710.8 $166.4 27,969,816 $(1,420.4) $(1,114.8) $6,764.6 $(13.5) $5,093.1
=========== ====== ====== ========== ========= ========= ======== ====== ========
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CASH FLOW STATEMENT
Kimberly-Clark Corporation and Subsidiaries

Year Ended December 31
----------------------
(Millions of dollars) 1999 1998 1997
- -------------------------------------------------------------------------------------------------

<S> <C> <C> <C>
OPERATIONS
Net income. . . . . . . . . . . . . . . . . . . . . . . . . $ 1,668.1 $ 1,103.1 $ 1,002.9
Charges for business improvement and other programs
Restructuring and other unusual charges . . . . . . . . . (27.0) 111.8 349.5
Other charges . . . . . . . . . . . . . . . . . . . . . . 13.2 180.7 91.2
Cumulative effect of accounting change, net of income taxes - 11.2 -
Extraordinary gains, net of income taxes. . . . . . . . . . - - (17.5)
Mobile pulp mill fees and related severances. . . . . . . . 9.0 42.3 -
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . 586.2 594.5 528.5
Goodwill amortization . . . . . . . . . . . . . . . . . . . 41.8 33.3 16.8
Deferred income tax provision . . . . . . . . . . . . . . . 126.2 13.6 71.4
Net gains on asset sales. . . . . . . . . . . . . . . . . . (143.9) (125.9) (8.4)
Equity companies' earnings in excess of dividends paid. . . (78.7) (15.1) (62.1)
Minority owners' share of subsidiaries' net income. . . . . 43.0 23.9 31.3
(Increase) decrease in operating working capital. . . . . . (67.1) 63.6 (588.4)
Pension funding in excess of expense. . . . . . . . . . . . (32.8) (45.9) (10.2)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.7) 2.6 4.0
---------- ---------- ----------

CASH PROVIDED BY OPERATIONS . . . . . . . . . . . . . . 2,134.3 1,993.7 1,409.0
---------- ---------- ----------

INVESTING
Capital spending. . . . . . . . . . . . . . . . . . . . . . (786.4) (669.5) (944.3)
Acquisitions of businesses, net of cash acquired. . . . . . (271.9) (342.5) (82.2)
Proceeds from dispositions of property and businesses . . . 115.2 324.9 779.6
Proceeds from notes receivable. . . . . . . . . . . . . . . 383.0 - -
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . (16.7) (16.7) (66.8)
---------- ---------- ----------

CASH USED FOR INVESTING . . . . . . . . . . . . . . . . (576.8) (703.8) (313.7)
---------- ---------- ----------

FINANCING
Cash dividends paid . . . . . . . . . . . . . . . . . . . . (551.3) (545.5) (530.6)
Net (decrease) increase in short-term debt. . . . . . . . . (163.8) (2.6) 355.3
Increases in long-term debt . . . . . . . . . . . . . . . . 117.7 541.3 113.0
Decreases in long-term debt . . . . . . . . . . . . . . . . (75.9) (319.1) (253.8)
Proceeds from exercise of stock options . . . . . . . . . . 60.8 38.3 49.2
Acquisitions of common stock for the treasury . . . . . . . (779.0) (919.7) (910.6)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.8 (29.4) 89.8
---------- ---------- ----------

CASH USED FOR FINANCING . . . . . . . . . . . . . . . . (1,378.7) (1,236.7) (1,087.7)
---------- ---------- ----------

INCREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . $ 178.8 $ 53.2 $ 7.6
========== ========== ==========
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Kimberly-Clark Corporation and Subsidiaries

NOTE 1. ACCOUNTING POLICIES

BASIS OF PRESENTATION

The consolidated financial statements include the accounts of
Kimberly-Clark Corporation and all subsidiaries that are more than 50 percent
owned and controlled. Investments in nonconsolidated companies that are at
least 20 percent owned are stated at cost plus equity in undistributed net
income. These latter companies are referred to as equity companies. All
significant intercompany transactions and accounts are eliminated in
consolidation.

In 1999, the Corporation reclassified other (income) expense, net, to be
part of operating profit in accordance with Regulation S-X. This item, which
is substantially comprised of gains on certain disposals of assets, was
previously reported below operating profit. Certain other reclassifications
have been made to conform prior year data to the current year presentation.

The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingencies at the date of the financial
statements and the reported amounts of net sales and expenses during the
reporting period. Differences from those estimates are recorded in the period
they become known.

INVENTORIES

Most U.S. inventories are valued at cost on the Last-In, First-Out (LIFO)
method for U.S. income tax purposes and for financial reporting purposes. The
balance of the U.S. inventories and inventories of consolidated operations
outside the U.S. are generally valued at the lower of cost, using either the
First-In, First-Out (FIFO) or weighted average cost methods, or market.

PROPERTY AND DEPRECIATION

Property, plant and equipment are stated at cost and are depreciated over
their estimated useful lives on the straight-line or units-of-production
method for financial reporting purposes and generally on an accelerated method
for income tax purposes. Estimated useful lives are periodically reviewed
and, when warranted, changes are made that result in an acceleration of
depreciation. These long-lived assets are reviewed for impairment
whenever events or changes in circumstances indicate that their cost may
not be recoverable. An impairment loss would be recognized when
estimated future cash flows from the use of the asset and its eventual
disposition are less than its carrying amount. When property is sold or
retired, the cost of the property and the related accumulated depreciation
are removed from the balance sheet and any gain or loss on the transaction is
included in income.

Costs of bringing significant new or expanded facilities into operation
are expensed as incurred. Prior to 1998, the Corporation's practice had
been to record such costs as deferred charges and to amortize them over
periods of not more than five years. The Corporation adopted Statement of
Position 98-5, Reporting on the Costs of Start-Up Activities, effective
January 1, 1998, and recorded a pretax charge of $17.8 million, $11.2 million
after taxes, or $.02 per share, as the cumulative effect of this accounting
change.

<PAGE>
NOTE 1. (Continued)

GOODWILL

Goodwill is amortized on the straight-line method ranging from 10 years
to 40 years. The realizability and period of benefit of goodwill is evaluated
periodically to assess recoverability. If it becomes probable that the future
undiscounted cash flows associated with such goodwill is less than its
carrying value, an impairment loss would be recognized. Accumulated
amortization of goodwill at December 31, 1999 and 1998 was $185.8 million and
$150.8 million, respectively.

ADVERTISING EXPENSE

Advertising expense is comprised of media, agency and production
expenses. Advertising expenses are charged to income during the period
incurred, except for expenses related to the development of a major
commercial or media campaign which are charged to income during the
period in which the advertisement or campaign is first presented by the media.
Advertising expenses charged to income totaled $336.5 million in 1999, $295.3
million in 1998 and $306.6 million in 1997.

REVENUE RECOGNITION

Sales revenue is recognized at the time of product shipment to
unaffiliated customers and appropriate provision is made for uncollectible
accounts.

ENVIRONMENTAL EXPENDITURES

Environmental expenditures related to current operations that qualify as
property, plant and equipment or which substantially increase the economic
value or extend the useful life of an asset are capitalized, and all other
expenditures are expensed as incurred. Environmental expenditures that relate
to an existing condition caused by past operations are expensed as incurred.
Liabilities are recorded when environmental assessments and/or remedial
efforts are probable and the costs can be reasonably estimated. Generally,
the timing of these accruals coincides with completion of a feasibility study
or a commitment to a formal plan of action.

STOCK-BASED COMPENSATION

Compensation cost for stock options and awards is measured based on
intrinsic value under Accounting Principles Board Opinion ("APB") 25,
Accounting for Stock Issued to Employees.

NEW PRONOUNCEMENTS

In 1998, Statement of Financial Accounting Standards ("SFAS") 133,
Accounting for Derivative Instruments and Hedging Activities, was issued.
This standard, which establishes new accounting and reporting standards for
derivative financial instruments, must be adopted no later than January 1,
2001. The Corporation is currently analyzing the effect of this standard but
does not expect it to have a material effect on the Corporation's consolidated
financial position, results of operations or cash flows.

<PAGE>

NOTE 2. BUSINESS IMPROVEMENT AND OTHER PROGRAMS

1998 PLAN

The charges under the 1998 Plan for the two years ended December 31, 1999
are summarized below:
<TABLE>
<CAPTION>

Amounts Charged
to Earnings
-------------------
(Millions of dollars) 1999 1998
- ----------------------- ----- ----

Total pretax charge. . . . . . . . . . . . . . . . . . . . $42.6 $49.1
====== =====
</TABLE>

<PAGE>
NOTE 2. (Continued)

Charges under the 1998 Plan were included in operating profit by business
segment and geography as follows:
<TABLE>
<CAPTION>

Year Ended
December 31
-----------------
(Millions of dollars) 1999 1998
- ----------------------- ---- ----

<S> <C> <C>
By Business Segment
Tissue. . . . . . . . . . . . . . . . . . . . . . . . . . . $36.4 $14.9
Personal Care . . . . . . . . . . . . . . . . . . . . . . . 6.2 34.2
----- -----

Total pretax charge . . . . . . . . . . . . . . . . . . . . $42.6 $49.1
===== =====

By Geography
North America . . . . . . . . . . . . . . . . . . . . . . . $ 5.7 $34.0
Outside North America . . . . . . . . . . . . . . . . . . . 36.9 15.1
----- -----

Total pretax charge . . . . . . . . . . . . . . . . . . . . $42.6 $49.1
===== =====
</TABLE>

Charges under the 1998 Plan reduced operating profit and net income as
follows:
<TABLE>
<CAPTION>

Year Ended
December 31
-----------------
(Millions of dollars) 1999 1998
- ----------------------- -----------------

<S> <C> <C>
Operating profit . . . . . . . . . . . . . . . . . . . . . . $42.6 $49.1
Net income . . . . . . . . . . . . . . . . . . . . . . . . . 30.3 34.1
</TABLE>

1999
------------------
Balance Additions Balance
(Millions of dollars) 12/31/98 (Reductions) Payments 12/31/99
- ----------------------- ------------------------------------------------

$18.8 $13.0 $(14.4) $17.4
===== ===== ======= =====
</TABLE>

1997 PLAN

<PAGE>
NOTE 2. (Continued)

$414.2 million were recorded in 1998 and 1997, respectively, at the time costs
became accruable under appropriate accounting principles. Included in such
costs was accelerated depreciation charged to cost of products sold related to
assets that were to be disposed of but which continued to be operated during
1997 and 1998. In 1999, the Corporation recorded a net credit of $16.7
million, which was comprised of accelerated depreciation expense of $23.7
million, reductions in accrued costs of $31.9 million and lower asset
write-offs and higher sales proceeds totaling $8.5 million, due to changes in
estimates.

Charges or (credits) under the 1997 Plan for the three years ended
December 31, 1999 are summarized below:
<TABLE>
<CAPTION>

Amounts Charged to Earnings
------------------------------
(Millions of dollars) 1999 1998 1997
- ----------------------- ------- ------ ------

Total pretax charge (credit) . . . . . . . . . . . . . . . $(16.7) $250.8 $414.2
======= ====== ======

Total pretax charge (credit) . . . . . . . . . . . . . . . $(16.7) $250.8 $414.2
======= ====== ======
</TABLE>

The effects of the 1997 Plan were included in operating profit by
business segment and geography as follows:
<TABLE>
<CAPTION>

Year Ended December 31
----------------------------
(Millions of dollars) 1999 1998 1997
- ----------------------- ------- ------ ------

<S> <C> <C> <C>
By Business Segment
Tissue . . . . . . . . . . . . . . . . . . . . . . . . . . . $(16.5) $149.3 $324.4
Personal Care. . . . . . . . . . . . . . . . . . . . . . . . 7.2 87.6 72.8
Health Care. . . . . . . . . . . . . . . . . . . . . . . . . (1.3) 13.2 8.7
Unallocated. . . . . . . . . . . . . . . . . . . . . . . . . (6.1) .7 8.3
------- ------ ------

Total pretax charge (credit) . . . . . . . . . . . . . . . $(16.7) $250.8 $414.2
======= ====== ======

By Geography
North America. . . . . . . . . . . . . . . . . . . . . . . . $ .7 $160.9 $181.5
Outside North America. . . . . . . . . . . . . . . . . . . . (11.3) 89.2 224.4
Unallocated. . . . . . . . . . . . . . . . . . . . . . . . . (6.1) .7 8.3
------- ------ ------

Total pretax charge (credit) . . . . . . . . . . . . . . . $(16.7) $250.8 $414.2
======= ====== ======

</TABLE>

<PAGE>
NOTE 2. (Continued)

The effects of the 1997 Plan decreased (increased) operating profit and
net income as follows:
<TABLE>
<CAPTION>

Year Ended December 31
----------------------------
(Millions of dollars) 1999 1998 1997
- ----------------------- ------- ------ ------

<S> <C> <C> <C>
Operating profit . . . . . . . . . . . . . $(16.7) $250.8 $414.2
Net income . . . . . . . . . . . . . . . . (9.2) 178.9 315.0
</TABLE>

The principal components of the 1997 Plan were as follows:

- - The sale, closure or downsizing of certain manufacturing facilities
worldwide has resulted in the consolidation of the Corporation's
manufacturing operations into fewer, larger and more efficient
facilities and the elimination of excess, high-cost tissue manufacturing
capacity in North America and Europe. Of the originally identified
facilities, 16 have been closed as of December 31, 1999 and one will
remain in operation. In addition, four other small facilities were closed.
The effects of these modifications were reflected in earnings at the
time such modifications became accruable events.

- - The workforce reduction has been completed and, through December 31,
1999, a total reduction of 3,740 employees has been realized. The costs of
the reduction were charged to earnings in the period in which such
employee severances and benefits were appropriately communicated.

- - Certain contracts have been terminated and other costs have been
incurred to achieve planned efficiencies.

<PAGE>
NOTE 2. (Continued)

Set forth below is a summary of the types and amounts of charges that
were recognized as accrued expenses for the 1997 Plan together with cash
payments made against such accruals for the two years ended December 31, 1999.
<TABLE>
<CAPTION>

1999
Balance ---------------------------- Balance
(Millions of dollars) 12/31/98 (Reductions) Payments 12/31/99
- ----------------------- ----------------------------------------------

$111.0 $(31.9) $(72.0) $7.1
====== ======= ======= ====
</TABLE>

<TABLE>
<CAPTION> 1998
Balance ---------------------------- Balance
(Millions of dollars) 12/31/97 Additions Payments 12/31/98
- ----------------------- --------- --------- -------- --------

$90.6 $84.5 $(64.1) $111.0
===== ===== ======= ======
</TABLE>

1995 SCOTT MERGER AND RESTRUCTURING PLAN

<PAGE>
NOTE 2. (Continued)

Amounts
Charged
to Earnings
------------------
(Millions of dollars) 1998 1997
- ----------------------- ---- ----

<S> <C> <C>
Cost of products sold . . . . . . . . . . . . . . . . $ 1.7 $15.1
Restructuring and other unusual charges . . . . . . . (5.0) 49.0
------ -----

Total pretax charge (credit). . . . . . . . . . . . $(3.3) $64.1
====== =====
</TABLE>

The effects of the 1995 Plan were included in operating profit by
business segment and geography as follows:
<TABLE>
<CAPTION>

Year Ended
December 31
--------------
(Millions of dollars) 1998 1997
- ----------------------- ---- ----

<S> <C> <C>
By Business Segment
Tissue . . . . . . . . . . . . . . . . . . . . . . . $ .7 $60.5
Personal Care. . . . . . . . . . . . . . . . . . . . .9 1.9
Health Care. . . . . . . . . . . . . . . . . . . . . (.8) (.3)
Unallocated. . . . . . . . . . . . . . . . . . . . . (4.1) 2.0
------ -----

Total pretax charge (credit) . . . . . . . . . . . $(3.3) $64.1
====== =====

By Geography
North America. . . . . . . . . . . . . . . . . . . . $(2.9) $11.5
Outside North America. . . . . . . . . . . . . . . . 3.7 50.6
Unallocated. . . . . . . . . . . . . . . . . . . . . (4.1) 2.0
------ -----

Total pretax charge (credit) . . . . . . . . . . . $(3.3) $64.1
====== =====
</TABLE>

The effects of the 1995 Plan decreased (increased) operating profit and
net income as follows:
<TABLE>
<CAPTION>

Year Ended
December 31
--------------
(Millions of dollars) 1998 1997
- ----------------------- ---- ----

<S> <C> <C>
Operating profit . . . . . . . . . . . . . . . . . . . $(3.3) $64.1
Net income . . . . . . . . . . . . . . . . . . . . . . (.9) 51.3
</TABLE>

<PAGE>
NOTE 2. (Continued)

Set forth below is a summary of the types and amounts recognized as
accrued expenses for the 1995 Plan together with the cash payments made
against such accruals for the year ended December 31, 1998.

Balance 1998 Balance
-----------------------
(Millions of dollars) 12/31/97 (Reductions) Payments 12/31/98
- ----------------------- -------- ------------ -------- --------

$46.2 $(11.0) $(19.2) $16.0
===== ======= ======= =====
</TABLE>

OTHER INFORMATION

1999 Unusual Charges
- ----------------------

Write-down of Certain Intangible and Other Assets
- -------------------------------------------------------

<PAGE>
NOTE 3. INCOME TAXES

An analysis of the provision for income taxes follows:
<TABLE>
<CAPTION>

Year Ended December 31
----------------------
(Millions of dollars) 1999 1998 1997
- ----------------------- ---- ---- ----

<S> <C> <C> <C>
Current income taxes:
United States . . . . . . . . . . . . . . . . . . . . . . . . $386.9 $402.0 $423.9
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.8 26.8 96.7
Other countries . . . . . . . . . . . . . . . . . . . . . . . 147.3 79.8 104.6
------- ------- -------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 604.0 508.6 625.2
------- ------- -------

Deferred income taxes:
United States . . . . . . . . . . . . . . . . . . . . . . . . 139.2 39.8 (29.3)
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18.7) 5.5 (49.5)
Other countries . . . . . . . . . . . . . . . . . . . . . . . 5.7 (38.3) (14.7)
------- ------- -------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 126.2 7.0 (93.5)
------- ------- -------

Total provision for income taxes. . . . . . . . . . . . . . . . 730.2 515.6 531.7

Less income taxes related to:

Extraordinary gains . . . . . . . . . . . . . . . . . . . . . - - 38.4

Cumulative effect of accounting change. . . . . . . . . . . . - (6.6) -
------- ------- -------

Total provision excluding income taxes related to extraordinary
gains and cumulative effect of accounting change. . . . . . . $730.2 $522.2 $493.3
======= ======= =======

Income before income taxes is classified in the Consolidated Income
Statement as follows:

</TABLE>
<TABLE>
<CAPTION>

Year Ended December 31
----------------------
(Millions of dollars) 1999 1998 1997
- ----------------------- ---- ---- ----

<S> <C> <C> <C>
Income Before Extraordinary Gains and
Cumulative Effect of Accounting Change:
United States . . . . . . . . . . . . . . . $1,782.7 $1,455.6 $1,291.6
Other countries . . . . . . . . . . . . . . 469.0 67.7 61.1
-------- -------- --------
$2,251.7 $1,523.3 $1,352.7
======== ======== ========
Extraordinary Gains:
United States . . . . . . . . . . . . . . . . $ - $ - $ 55.9
======== ======== ========

Cumulative Effect of Accounting Change:
United States . . . . . . . . . . . . . . . . $ - $ (17.2) $ -
Other countries . . . . . . . . . . . . . . . - (.6) -
-------- -------- --------
$ - $ (17.8) $ -
======== ======== ========
</TABLE>

<PAGE>
- ------
NOTE 3. (Continued)

Deferred income tax assets are composed of the following:
<TABLE>
<CAPTION>

December 31
-----------
(Millions of dollars) 1999 1998
- ----------------------- ---- ----

<S> <C> <C>
Current deferred income tax asset attributable to:
Advertising and promotion accruals. . . . . . . . . . . . . . . . $ 27.5 $ 29.7
Pension, postretirement and other employee benefits . . . . . . . 121.9 92.0
Other accrued expenses, including those related to business
improvement programs. . . . . . . . . . . . . . . . . . . . . . 124.6 210.4
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.0 41.9
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7 6.1
Valuation allowances. . . . . . . . . . . . . . . . . . . . . . . (.3) (4.8)
-------- --------

Net current deferred income tax asset . . . . . . . . . . . . . . . $ 311.4 $ 375.3
======== ========

Noncurrent deferred income tax asset attributable to:

Accumulated depreciation. . . . . . . . . . . . . . . . . . . . . $ (42.4) $ (11.7)
Income tax loss carryforwards . . . . . . . . . . . . . . . . . . 294.1 290.4
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1 6.3
Valuation allowances. . . . . . . . . . . . . . . . . . . . . . . (255.8) (267.1)
-------- --------

Net noncurrent deferred income tax asset included in other assets . $ 7.0 $ 17.9
======== ========

Noncurrent deferred income tax liability attributable to:

Accumulated depreciation. . . . . . . . . . . . . . . . . . . . $(869.0) $(908.6)
Income tax loss carryforwards . . . . . . . . . . . . . . . . . 55.3 47.4
Pension and other postretirement benefits . . . . . . . . . . . 227.0 242.0
Installment sales . . . . . . . . . . . . . . . . . . . . . . . (275.7) (137.9)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.5 35.5
-------- --------

Net noncurrent deferred income tax liability. . . . . . . . . . . . $(836.9) $(721.6)
======== ========
</TABLE>

Valuation allowances for deferred income tax assets decreased by $15.8
million in 1999 and increased $68.9 million in 1998. Valuation allowances at
the end of 1999 primarily relate to the potentially unusable portion of income
tax loss carryforwards of $931.2 million in jurisdictions primarily outside
the United States. If not utilized against taxable income, $306.4 million of
the loss carryforwards will expire from 2000 through 2009. The remaining
$624.8 million has no expiration date.

Realization of deferred tax assets is dependent on generating sufficient
taxable income prior to expiration of the loss carryforwards. Although
realization is not assured, management believes it is more likely than not
that all of the deferred tax assets, net of applicable valuation allowances,
will be realized. The amount of the deferred tax assets considered realizable
could be reduced or increased if estimates of future taxable income
during the carryforward period are reduced or increased.

<PAGE>
NOTE 3. (Continued)

Presented below is a reconciliation of the income tax provision computed
at the U.S. federal statutory tax rate to the provision for income taxes
excluding income taxes applicable to extraordinary gains and cumulative effect
of an accounting change.
<TABLE>
<CAPTION>

Year Ended December 31
-----------------------------------------------------------
1999 1998 1997
---- ---- ----
(Millions of dollars) Amount Percent Amount Percent Amount Percent
- ----------------------- -------------------- ---------------- ------------------

<S> <C> <C> <C> <C> <C> <C>
Income before income taxes:
As reported. . . . . . . . . . . . $2,251.7 $1,523.3 $1,352.7
Charges (credits) for business
improvement programs and
other unusual items. . . . . . . (97.3) 280.1 451.8
--------- -------- --------
Income before income taxes
excluding the above charges. $2,154.4 $1,803.4 $1,804.5
========= ======== ========

Tax at U.S. statutory rate(a). . . . $ 754.0 35.0% $ 631.2 35.0% $631.6 35.0%
State income taxes, net of federal
tax benefit. . . . . . . . . . . . 29.7 1.4 17.3 1.0 34.9 1.9
Operating losses for which no tax
benefit was recognized, net of
operating losses realized. . . . . 7.0 .3 24.4 1.4 22.0 1.2
Other - net. . . . . . . . . . . . . (99.1) (4.6) (96.1) (5.4) (97.2) (5.3)
--------- --------- -------- ------- --------- ------

691.6 32.1% 576.8 32.0% 591.3 32.8%
========= ======= =======
Tax effects of business improvement
programs and other unusual items . 38.6 39.7% (54.6) (19.5)% (98.0) (21.7)%
--------- ========= --------- ======= ------- =======

Provision for income taxes . . . . . $ 730.2 32.4% $ 522.2 34.3% $493.3 36.5%
========= ========= ========= ======= ======= =======
</TABLE>

(a) Tax at U.S. statutory rate is based on income before income taxes
excluding the charges (credits) for business improvement programs and
other unusual items. The tax effects of such programs are shown elsewhere
in the table.

At December 31, 1999, income taxes have not been provided on
approximately $1.7 billion of unremitted earnings of subsidiaries operating
outside the U.S. These earnings, which are considered to be invested
indefinitely, would become subject to income tax if they were remitted as
dividends, were lent to the Corporation or a U.S. affiliate, or if the
Corporation were to sell its stock in the subsidiaries. Determination of the
amount of unrecognized deferred U.S. income tax liability on these unremitted
earnings is not practicable because of the complexities associated with its
hypothetical calculation. Withholding taxes of approximately $170 million
would be payable upon remittance of all previously unremitted earnings at
December 31, 1999.

<PAGE>
NOTE 4. POSTRETIREMENT AND OTHER BENEFITS

The Corporation and its subsidiaries in North America and the United
Kingdom have defined benefit and/or defined contribution retirement plans
covering substantially all regular employees. Certain other subsidiaries have
defined benefit pension plans or, in certain countries, termination pay plans
covering substantially all regular employees. For the principal defined
benefit plans in North America and the United Kingdom, the funding policy is
to contribute assets that, at a minimum, fully fund the accumulated benefit
obligation, subject to regulatory and tax deductibility limits. The funding
policy for the remaining defined benefit plans outside North America and
nonqualified U.S. plans providing pension benefits in excess of limitations
imposed by the U.S. income tax code is based on legal requirements, tax
considerations, customary business practices in such countries and investment
opportunities.

Substantially all retired employees of the Corporation and its North
American subsidiaries and certain international employees are covered by
health care and life insurance benefit plans. Benefits are based on years of
service and age at retirement. The plans are principally noncontributory for
employees who retired before 1993, and are contributory for most employees who
retire in 1993 or after. Certain U.S. plans limit the Corporation's cost of
future annual per capita retiree medical benefits to no more than
200 percent of the 1992 annual per capita cost. Certain other U.S. plans
limit the Corporation's future cost for retiree medical benefits to a defined
annual per capita medical cost.

Summarized financial information about postretirement plans, excluding
defined contribution retirement plans, is presented below.

<PAGE>
NOTE 4. (Continued)
<TABLE>
<CAPTION>

Pension Benefits Other Benefits
------------------- -----------------
Year Ended December 31
---------------------------------------
(Millions of dollars) 1999 1998 1999 1998
- ----------------------- ---- ---- ---- ----

<S> <C> <C> <C> <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year . . . . . $3,867.5 $3,623.2 $ 658.6 $ 638.0
Service cost. . . . . . . . . . . . . . . . . . . 73.3 69.2 12.5 11.8
Interest cost . . . . . . . . . . . . . . . . . . 251.1 247.1 45.2 44.2
Participants' contributions . . . . . . . . . . . 7.2 8.3 4.9 4.0
Amendments. . . . . . . . . . . . . . . . . . . . 11.6 9.5 - -
Actuarial (gain) loss . . . . . . . . . . . . . . (292.9) 171.8 (28.4) 27.5
Acquisitions. . . . . . . . . . . . . . . . . . . 1.0 1.5 - -
Curtailments. . . . . . . . . . . . . . . . . . . 11.9 (8.4) (4.1) (2.6)
Special termination benefits. . . . . . . . . . . 1.9 5.0 - -
Currency exchange rate effects. . . . . . . . . . (12.2) (2.3) 1.5 (2.0)
Benefit payments. . . . . . . . . . . . . . . . . (271.9) (257.4) (63.3) (62.3)
--------- --------- -------- --------

Benefit obligation at end of year . . . . . . . . 3,648.5 3,867.5 626.9 658.6
--------- --------- -------- --------

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year. . 3,927.2 3,619.9 - -
Actual return on plan assets. . . . . . . . . . . 736.9 525.7 - -
Employer contributions. . . . . . . . . . . . . . 25.0 24.5 58.4 58.3
Participants' contributions . . . . . . . . . . . 7.2 8.3 4.9 4.0
Currency exchange rate effects. . . . . . . . . . (8.4) (11.3) - -
Benefit payments. . . . . . . . . . . . . . . . . (261.7) (239.9) (63.3) (62.3)
--------- --------- -------- --------

Fair value of plan assets at end of year. . . . . 4,426.2 3,927.2 - -
--------- --------- -------- --------

FUNDED STATUS
Funded status at end of year. . . . . . . . . . . 777.7 59.7 (626.9) (658.6)
Unrecognized net actuarial (gain) loss. . . . . . (682.4) 9.5 (91.6) (68.0)
Unrecognized transition amount. . . . . . . . . . (10.9) (15.3) - -
Unrecognized prior service cost . . . . . . . . . 67.0 64.2 (15.5) (17.7)
--------- --------- -------- --------

Net amount recognized . . . . . . . . . . . . . . $ 151.4 $ 118.1 $(734.0) $(744.3)
========= ========= ======== ========

AMOUNTS RECOGNIZED IN THE BALANCE SHEET CONSIST OF:
Prepaid benefit cost. . . . . . . . . . . . . . . $ 248.2 $ 228.8 $ - $ -
Accrued benefit cost. . . . . . . . . . . . . . . (117.9) (139.6) (734.0) (744.3)
Intangible asset. . . . . . . . . . . . . . . . . 4.9 6.1 - -
Accumulated other comprehensive income. . . . . . 16.2 22.8 - -
--------- --------- -------- --------

Net amount recognized . . . . . . . . . . . . . . $ 151.4 $ 118.1 $(734.0) $(744.3)
========= ========= ======== ========
</TABLE>

The above pension benefit information has been presented on an aggregated
basis whereby benefit obligation and plan asset information for plans in which
plan assets exceed accumulated benefit obligations ("ABO") have been combined
with plans where the ABO exceeds plan assets. Summary disaggregated
information about these plans follows:

<PAGE>
NOTE 4. (Continued)
<TABLE>
<CAPTION>

Assets Exceed ABO Exceeds
ABO Assets
--------------- ---------------
December 31
----------------------------------
(Millions of dollars) 1999 1998 1999 1998
- ----------------------- ---- ---- ---- ----

<S> <C> <C> <C> <C>
Projected benefit obligation . . . . . . . . . $3,483.1 $3,757.1 $165.4 $110.4
ABO. . . . . . . . . . . . . . . . . . . . . . 3,309.1 3,417.3 152.6 100.1
Fair value of plan assets. . . . . . . . . . . 4,379.6 3,926.2 46.6 1.0
</TABLE>

Pension Benefits Other Benefits
----------------- ---------------
December 31
-----------------------------------
1999 1998 1999 1998
---- ---- ---- ----

<S> <C> <C> <C> <C>
Weighted Average Assumptions
Discount rate. . . . . . . . . . 7.4% 6.6% 7.7% 6.7%
Expected return on plan assets . 9.3% 9.3% - -
Rate of compensation increase. . 4.3% 3.9% - -
Health care cost trend rate(a) . - - 7.5% 7.8%
</TABLE>

(a) Assumed to decrease gradually to 6% in 2003 and remain at that level
for the large majority of plans and to zero by 2006 and thereafter for
the balance.
<TABLE>
<CAPTION>

Pension Benefits Other Benefits
-------------------------- ----------------------
Year Ended December 31
----------------------------------------------------
(Millions of dollars) 1999 1998 1997 1999 1998 1997
- ----------------------- ---- ---- ---- ---- ---- ----

<S> <C> <C> <C> <C> <C> <C>
Components Of Net Periodic
Benefit Cost
Service cost. . . . . . . . . . . . $ 73.3 $ 69.2 $ 72.6 $12.5 $11.8 $10.7
Interest cost . . . . . . . . . . . 251.1 247.1 246.7 45.2 44.2 44.9
Expected return on plan assets. . . (352.8) (332.3) (297.8) - - -
Amortization of prior service cost. 9.5 8.5 7.9 (2.1) (2.1) -
Amortization of transition amount . (4.6) (5.3) (5.3) - - -
Recognized net actuarial loss
(gain). . . . . . . . . . . . . . 4.8 2.9 2.9 (4.4) (4.9) (8.1)
Curtailments. . . . . . . . . . . . 18.0 .7 .5 (4.1) (.4) (.7)
Other . . . . . . . . . . . . . . . 6.1 5.1 - - - -
-------- -------- -------- ------ ------ ------

Net periodic benefit
cost (income) . . . . . . . . . . $ 5.4 $ (4.1) $ 27.5 $47.1 $48.6 $46.8
======== ======== ======== ====== ====== ======
</TABLE>

Assumed health care cost trend rates affect the amounts reported for
postretirement health care benefit plans. A one-percentage-point change in
assumed health care trend rates would have the following effects:
<TABLE>
<CAPTION>

One-Percentage-Point
--------------------
(Millions of dollars) Increase Decrease
- ----------------------- --------------------

<S> <C> <C>
Effect on total of service and interest cost components $ 4.1 $ 3.3
Effect on postretirement benefit obligation . . . . . . 44.6 37.4
</TABLE>

<PAGE>
NOTE 4. (Continued)

DEFINED CONTRIBUTION RETIREMENT PLANS

The Corporation's contributions to the defined contribution retirement
plans are based on the age and compensation of covered employees. The
Corporation's contributions, all of which were charged to expense, were $26.1
million, $23.8 million and $14.8 million in 1999, 1998 and 1997, respectively.

INVESTMENT PLANS

Voluntary contribution investment plans are provided to substantially all
North American employees. Under the plans, the Corporation matches a portion
of employee contributions. Costs charged to expense under the plans were
$25.1 million, $26.1 million and $24.9 million in 1999, 1998 and 1997,
respectively.

<PAGE>
NOTE 5. EARNINGS PER SHARE

There are no adjustments required to be made to Income Before
Extraordinary Gains and Cumulative Effect of 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 follows:
<TABLE>
<CAPTION>

Average Common Shares Outstanding
-----------------------------------
(Millions) 1999 1998 1997
- ---------- ---- ---- ----

<S> <C> <C> <C>
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536.3 550.3 555.9
Dilutive effect of stock options. . . . . . . . . . . . . . . . 3.1 2.3 3.1
Dilutive effect of deferred compensation plan shares. . . . . . .1 - -
Dilutive effect of shares issued for participation share awards .6 .5 .3
----- ----- -----

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 540.1 553.1 559.3
===== ===== =====
</TABLE>

Options outstanding that were not included in the computation of diluted
EPS because their exercise price was greater than the average market price of
the common shares are summarized below:

<TABLE>
<CAPTION>
Description 1999 1998 1997
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Number of shares (millions). . . . . . . . . . . . . . . . . . . . .1 9.1 -
Weighted-average option price. . . . . . . . . . . . . . . . . . . $58.10 $52.74 -
Expiration date of option. . . . . . . . . . . . . .. . . . . . . 2009 2004-2008 -
Options outstanding at year end. . . . . . . . . . . . . . . . . . yes yes -

</TABLE>

The number of common shares outstanding as of December 31, 1999, 1998 and
1997 was 540.6 million, 538.3 million and 556.3 million, respectively.

<PAGE>
NOTE 6. DEBT

The major issues of long-term debt outstanding were:
<TABLE>
<CAPTION>

December 31
------------------
(Millions of dollars) 1999 1998
- ----------------------- ---- ----

<S> <C> <C>
Kimberly-Clark Corporation:
6 1/4% Debentures due 2018. . . . . . . . . . . . . . . . . . . . . . . . $ 297.7 $ 297.6
6 3/8% Debentures due 2028. . . . . . . . . . . . . . . . . . . . . . . . 198.3 198.2
7 7/8% Debentures due 2023. . . . . . . . . . . . . . . . . . . . . . . . 199.7 199.7
8 5/8% Notes due 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . 199.9 199.8
9% Notes due 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 99.9
6 7/8% Debentures due 2014. . . . . . . . . . . . . . . . . . . . . . . . 99.7 99.7
5% Notes maturing to 2002 . . . . . . . . . . . . . . . . . . . . . . . . 27.0 36.0
6.2% to 7.55% Industrial Development Revenue Bonds maturing to 2023 . . . 79.7 79.7
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.5 3.7
-------- --------
1,218.5 1,214.3
Subsidiaries:
7% Debentures due 2023. . . . . . . . . . . . . . . . . . . . . . . . . . 194.3 194.0
11.1% Bonds due 2000. . . . . . . . . . . . . . . . . . . . . . . . . . . 99.8 99.6
8.3% to 11% Debentures maturing to 2022 . . . . . . . . . . . . . . . . . 175.2 163.8
Industrial Development Revenue Bonds at variable rates (weighted-
average rate at December 31, 1999 - 4%) maturing to 2032. . . . . . . . 298.3 286.6
5 3/4% to 6 3/8% Industrial Development Revenue Bonds maturing
to 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.3 22.9
Bank loans and other financings in various currencies at fixed rates
(weighted-average rate at December 31, 1999 - 9.6%)
maturing to 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.7 97.9
Bank loans and other financings in various currencies at variable rates
(weighted-average rate at December 31, 1999 - 10.1%)
maturing to 2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . 108.9 45.6
-------- --------

Total long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,224.0 2,124.7

Less current portion. . . . . . . . . . . . . . . . . . . . . . . . . . . 297.4 56.5
-------- --------

Long-term portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,926.6 $2,068.2
======== ========
</TABLE>

Fair value of long-term debt was $2,212.0 million and $2,256.6 million at
December 31, 1999 and 1998, respectively. Scheduled maturities of long-term
debt are $249.5 million in 2001, $34.9 million in 2002, $12.2 million in 2003
and $124.0 million in 2004.

At December 31, 1999, the Corporation had a $1.1 billion syndicated
revolving credit facility. This facility, unused at December 31, 1999,
permits borrowing at competitive interest rates and is available for general
corporate purposes, including backup for commercial paper borrowings. The
Corporation pays commitment fees on the unused portion but may cancel the
facility without penalty at any time prior to its expiration. Of this
facility, $550 million expires in November 2000 and the balance expires in
November 2004.

<PAGE>
NOTE 6. (Continued)

Debt payable within one year:
<TABLE>
<CAPTION>

December 31
--------------
(Millions of dollars) 1999 1998
- ----------------------- ------ ------

<S> <C> <C>
Commercial paper. . . . . . . . . . . . . . . $353.4 $418.0
Current portion of long-term debt . . . . . . 297.4 56.5
Other short-term debt . . . . . . . . . . . . 131.6 160.9
------ ------

Total. . . . . . . . . . . . . . . . . . . $782.4 $635.4
====== ======
</TABLE>

At December 31, 1999 and 1998, the weighted-average interest rate for
commercial paper was 5.4 percent and 5.3 percent, respectively.

<PAGE>
NOTE 7. RISK MANAGEMENT

Foreign Currency Risk Management

Foreign currency risk is managed by the use of foreign currency
forward, swap and option contracts. The use of these contracts allows the
Corporation to manage its transactional exposure to exchange rate fluctuations
because the gains or losses incurred on the derivative instruments will offset
in whole, or in part, losses or gains on the underlying foreign currency
exposure. There have been no significant changes in how foreign currency
transactional exposures were managed during 1999, and management does not
foresee or expect any significant changes in such exposures or in the
strategies it employs to manage them in the near future.

Foreign currency losses included in consolidated net income were $1.4
million, $32.8 million and $10.2 million in 1999, 1998 and 1997, respectively.
Included in foreign currency losses were the Corporation's share of foreign
currency gains and losses at the Corporation's Mexican affiliate,
Kimberly-Clark de Mexico, S.A. de C.V. ("KCM"), attributable to changes in the
value of the Mexican peso, which is the Corporation's most significant foreign
currency risk. The Corporation's share of the peso currency losses was not
significant in 1999 and 1997 and was $.02 per share in 1998.

Beginning in 1999, the Mexican economy was no longer deemed to be
hyperinflationary and the peso, rather than the U.S. dollar, became the
functional currency for accounting purposes. Consequently, changes in the
value of the peso resulted in gains or losses on U.S. dollar obligations of
KCM. Prior to 1999, Mexico's economy was deemed to be hyperinflationary and
the functional currency of KCM was the U.S. dollar. Accordingly, changes in
the value of the peso did not result in foreign currency gains or losses
attributable to the U.S. dollar obligations of KCM. However, changes in the
value of the peso in 1998 and 1997 resulted in gains or losses attributable to
peso-denominated monetary assets held by KCM.

Gains and losses on instruments that hedge firm commitments are deferred
and included in the basis of the underlying hedged items. Premiums paid for
options are amortized ratably over the life of the option. Contracts used to
hedge recorded foreign currency transactions generally mature within
one year and are marked-to-market with the resulting gains or losses included
in current income. These gains and losses offset foreign exchange gains and
losses on the underlying transactions. Notwithstanding the sizable notional
principal amounts involved, the Corporation's credit exposure under these
arrangements is limited to the fair value of the agreements with a positive
fair value at the reporting date. Additionally, credit risk with respect to
the counterparties is considered minimal in view of the financial strength of
the counterparties.

<PAGE>
NOTE 7. (Continued)

The following table presents the aggregate notional principal amounts,
carrying values and fair values of the Corporation's foreign currency forward
contracts outstanding at December 31, 1999 and 1998:

1999 1998
--------------------------------- --------------------------------
Notional Notional
Principal Carrying Fair Principal Carrying Fair
(Millions of dollars) Amounts Values Values Amounts Values Values
- ----------------------- --------- -------- ------ --------- -------- ------

<S> <C> <C> <C> <C> <C> <C>
Forward contracts
Assets. . . . . . . . . $770.5 $18.0 $16.8 $848.0 $ 4.1 $(3.0)
Liabilities . . . . . . 375.9 (6.8) (4.4) 964.0 (12.1) (4.4)
</TABLE>

Translation Risk

The income statements of foreign operations, other than those in
hyperinflationary economies, are translated into U.S. dollars at rates of
exchange in effect each month. The balance sheets of these operations are
translated at period-end exchange rates, and the differences from historical
exchange rates are reflected in stockholders' equity as unrealized translation
adjustments.

The income statements and balance sheets of operations in
hyperinflationary economies are translated into U.S. dollars using both
current and historical rates of exchange. For balance sheet accounts
translated at current exchange rates, such as cash and accounts receivable,
the differences from historical exchange rates are reflected in income.
Operations that are deemed to be hyperinflationary are as follows: Brazil
(prior to January 1, 1998), Ecuador, Mexico (effective January 1, 1997
through December 31, 1998), Turkey and Venezuela.

Translation exposure is not hedged. The risk to any particular entity's
net assets is minimized to the extent that the entity is financed with local
currency borrowing. In addition, many of the Corporation's non-U.S.
operations buy the majority of their inputs and sell the majority of their
outputs in their local currency, thereby minimizing the effect of currency
rate changes on their local operating profit margins.

Interest Rate Risk Management

Interest rate risk is managed through the maintenance of a portfolio of
variable- and fixed-rate debt composed of short- and long-term instruments.
The objective is to maintain a cost-effective mix that management deems
appropriate. The strategy employed by the Corporation to manage its exposure
to interest rate fluctuations did not change significantly during 1999.
Management does not foresee or expect any significant changes in its exposure
to interest rate fluctuations or in how such exposure is managed in the near
future.

Commodity Price Risk Management

The Corporation is subject to commodity price risk arising from price
movement for purchased pulp, the market price of which is determined by
industry supply and demand. Selling prices of the Corporation's tissue
products can be influenced by the market price for pulp. On a worldwide
basis, the Corporation has reduced its internal pulp supply to approximately
40 percent of its virgin fiber needs. The Corporation has announced
its intention to further reduce its level of pulp integration to
approximately 20 percent. However, such a reduction in pulp integration
could increase the Corporation's commodity price risk. Specifically,
increases in pulp prices could adversely affect the Corporation's
earnings if selling prices are not adjusted or if such adjustments
significantly trail the increases in pulp prices. The Corporation has not
used derivative instruments in the management of these risks.

<PAGE>
NOTE 8. STOCK COMPENSATION PLANS

Kimberly-Clark Equity Participation Plans provide for awards of
participation shares and stock options to key employees of the Corporation and
its subsidiaries. Upon maturity, participation share awards are paid, in cash
or cash and shares of the Corporation's stock, based on the increase in the
book value of the Corporation's common stock during the award period.
Participants do not receive dividends on the participation shares, but their
accounts are credited with dividend shares payable, in cash or cash and shares
of the Corporation's stock, at the maturity of the award. Neither
participation nor dividend shares are shares of common stock. In conjunction
with the restricted stock plan discussed later in this note, no additional
participation shares will be awarded after 1998.

Data concerning participation and dividend shares follow:
<TABLE>
<CAPTION>

(Thousands of shares) 1999 1998 1997
- ----------------------- ---- ---- ----

<S> <C> <C> <C>
Outstanding - Beginning of year. . . 10,049 9,381 7,173

Awarded. . . . . . . . . . . . . . . - 2,145 1,994

Dividend shares credited - net . . . 808 883 795

Matured. . . . . . . . . . . . . . . (483) (1,925) (500)

Forfeited. . . . . . . . . . . . . . (145) (435) (81)
------- ------- ------

Outstanding - End of year. . . . . . 10,229 10,049 9,381
======= ======= ======
</TABLE>

Amounts expensed related to participation shares were $34.9 million,
$23.1 million and $26.8 million in 1999, 1998 and 1997, respectively.

The Corporation also has stock option plans under which executives and
key employees may be granted awards. Under these plans, all stock options are
granted at not less than market value at date of grant, expire 10 years after
the date of grant and generally become exercisable over three years.

In October 1997, approximately 57,000 employees worldwide were granted
approximately 3.2 million stock options and .2 million stock appreciation
rights under the Corporation's Global Stock Option Plan. Employees were
granted options to purchase a fixed number of shares, ranging from 25 to 125
shares per employee, of common stock at a price equal to the fair market value
of the Corporation's stock at the date of grant. The grants generally become
exercisable after the third anniversary of the grant date and have a term of
seven years.

As part of the acquisition of Ballard Medical Products ("Ballard")
discussed in Note 12 to the Consolidated Financial Statements, outstanding
Ballard stock options were converted into options to acquire approximately
463,000 shares of the Corporation's common stock at a weighted-average
exercise price of $36.13.

<PAGE>
NOTE 8. (Continued)

Data concerning stock option activity follows:
<TABLE>
<CAPTION>

1999 1998 1997
------------------- ------------------- ---------------------
Weighted- Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
(Options in thousands) Options Price Options Price Options Price
- ------------------------ ------- --------- ------- --------- -------- ----------

<S> <C> <C> <C> <C> <C> <C>
Outstanding - Beginning of
year. . . . . . . . . . . . 17,132 $41.04 16,195 $36.73 12,609 $26.61
Granted . . . . . . . . . . . 5,271 48.46 3,076 55.94 6,111 51.12
Exercised . . . . . . . . . . (2,154) 27.24 (1,608) 22.91 (2,401) 20.15
Canceled or expired . . . . . (545) 51.46 (531) 50.86 (124) 38.61
Converted Ballard stock . . .
options . . . . . . . . . . 463 36.13 - - - -
------ ------ ------

Outstanding - End of year . . 20,167(a) 44.08 17,132 41.04 16,195 36.73
====== ====== ======

Exercisable - End of year . . 9,588 36.59 8,429 30.10 7,016 25.57
===== ===== =====
</TABLE>

(a) Data concerning stock options at December 31, 1999 follows (options in
thousands):
<TABLE>
<CAPTION>

Options Outstanding
-------------------------------- Options Exercisable
Weighted- -------------------
Average Remaining Weighted-
Exercise Contractual Average
Exercise Price Range Options Price Life(Years) Options Price
- -------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
$9.83 - $14.73 . . . 151 $13.43 2.3 151 $13.43
18.16 - 20.44 . . . 837 19.71 2.1 837 19.71
22.36 - 28.34 . . .3,265 26.09 3.9 3,265 26.09
39.94 - 48.31 . . .7,720 45.58 7.9 2,613 40.27
50.00 - 59.81 . . .8,194 52.89 6.6 2,722 52.15
----- -----

20,167 9,588
====== =====
</TABLE>

At December 31, 1999, the number of additional shares of common stock of
the Corporation available for awards under the 1992 Plan was 13.2 million
shares.

The Corporation has elected to follow APB 25 and related interpretations
in accounting for its stock options. Under APB 25, because the exercise price
of employee stock options that have been awarded was equal to the market price
of the underlying stock on the date of grant, no compensation expense was
required to be recognized. However, SFAS 123, Accounting for Stock-Based
Compensation, requires presentation of pro forma net income and earnings per
share as if the Corporation had accounted for its employee stock options under
a fair value method. For purposes of pro forma disclosure, the estimated fair
value of such stock options is amortized to expense over the vesting period.
Under the fair value method, the Corporation's net income and net income per
share would have been reduced as follows:
<TABLE>
<CAPTION>

(Millions of dollars, except per share amounts) 1999 1998 1997
- ----------------------------------------------------- ---- ---- ----

<S> <C> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . . $41.2 $31.0 $22.4
Basic and diluted net income per share . . . . . . . .08 .06 .04
</TABLE>

<PAGE>
NOTE 8. (Continued)

The weighted-average fair value of the individual options granted during
1999, 1998 and 1997 is estimated as $11.77, $13.36 and $12.22, respectively,
on the date of grant. The fair values were determined using a Black-Scholes
option-pricing model with the following assumptions:
<TABLE>
<CAPTION>

1999 1998 1997
---- ---- ----

<S> <C> <C> <C>
Dividend yield. . . . . . 2.15% 1.79% 1.88%
Volatility. . . . . . . . 21.40% 17.60% 18.30%
Risk-free interest rate . 5.25% 5.59% 5.98%
Expected life . . . . . . 5.8 YEARS 5.8 years 5.4 years
</TABLE>

UNEARNED COMPENSATION ON RESTRICTED STOCK

Effective January 1, 1999, the Corporation adopted a restricted stock
plan under which certain key employees may be granted, in the aggregate, up to
2.5 million shares of the Corporation's common stock (or awards of restricted
stock units). These restricted stock awards vest and become unrestricted
shares in three to ten years from the date of grant. Although plan
participants are entitled to cash dividends and may vote such awarded shares,
the sale or transfer of such shares is limited during the restricted period.
During 1999, .4 million shares were awarded and at December 31, 1999, 2.1
million shares of the Corporation's common stock remained available for
awards.

The market value of the Corporation's common stock determines the value
of the restricted stock award, and such value is recorded at the date of the
award as unearned compensation on restricted stock in a separate component of
stockholders' equity. This unearned compensation is amortized to compensation
expense over the periods of restriction. During 1999, $5.0 million was
charged to compensation expense under the plan.

<PAGE>
- ------
NOTE 9. COMMITMENTS

LEASES

The future minimum obligations under leases having a noncancelable term
in excess of one year as of December 31, 1999, are as follows:
<TABLE>
<CAPTION>

Operating
(Millions of dollars) Leases
- ----------------------- ---------

<S> <C>
Year Ending December 31:
2000 . . . . . . . . . . . . . . . . . . $ 62.1
2001 . . . . . . . . . . . . . . . . . . 47.9
2002 . . . . . . . . . . . . . . . . . . 30.8
2003 . . . . . . . . . . . . . . . . . . 21.6
2004 . . . . . . . . . . . . . . . . . . 16.7
Thereafter . . . . . . . . . . . . . . 63.0
------

Future minimum obligations . . . . . . . . $242.1
======
</TABLE>

Operating lease obligations have been reduced by approximately $11.5
million for rental income from noncancelable sublease agreements.

Consolidated rental expense under operating leases was $151.4 million,
$156.9 million, and $150.8 million in 1999, 1998 and 1997, respectively.

RAW MATERIALS

The Corporation has entered into long-term contracts for the purchase of
raw materials, primarily pulp. The minimum purchase commitments extend to
2003. At current prices, the commitments are approximately $348 million, $341
million and $237 million in 2000, 2001 and 2002, respectively. The commitment
beyond the year 2002 is approximately $96 million in total.

Although the Corporation is primarily liable for rental payments on the
above-mentioned leases and, considering the purchase commitments for raw
materials described above, management believes the Corporation's exposure to
losses, if any, under these arrangements is not material.

<PAGE>
NOTE 10. STOCKHOLDERS' EQUITY AND OTHER COMPREHENSIVE INCOME

STOCKHOLDERS' EQUITY

At December 31, 1999, unremitted net income of equity companies included
in consolidated retained earnings was $713.3 million.

On June 21, 1988, the board of directors of the Corporation declared a
distribution of one preferred share purchase right for each outstanding share
of the Corporation's common stock. On June 8, 1995, the board amended the
plan governing such rights. The rights are intended to protect the
stockholders against abusive takeover tactics.

A right will entitle its holder to purchase one two-hundredth of a share
of Series A Junior Participating Preferred Stock at an exercise price of $225,
but will not become exercisable until 10 days after a person or group acquires
or announces a tender offer that would result in the ownership of 20 percent
or more of the Corporation's outstanding common shares.

Under certain circumstances, a right will entitle its holder to acquire
either shares of the Corporation's stock or shares of an acquiring company's
common stock, in either event having a market value of twice the exercise
price of the right. At any time after the acquisition by a person or group of
20 percent or more, but fewer than 50 percent, of the Corporation's common
shares, the Corporation may exchange the rights, except for rights held by the
acquiring person or group, in whole or in part, at a rate of one right for one
share of the Corporation's common stock or for one two-hundredth of a share of
Series A Junior Participating Preferred Stock.

The rights may be redeemed at $.005 per right prior to the acquisition by
a person or group of 20 percent or more of the common stock. Unless
redeemed earlier, the rights expire on June 8, 2005.

<PAGE>
NOTE 10. (Continued)

OTHER COMPREHENSIVE INCOME

The changes in the components of other comprehensive income (loss) are as
follows:
<TABLE>
<CAPTION>

Year Ended December 31
--------------------------------------------------------------------------------------------------
1999 1998 1997
------------------------------ ------------------------------ ----------------------------

Pretax Tax Exp. Net Pretax Tax Exp. Net Pretax Tax Exp. Net
(Millions of dollars) Amount (Credit) Amount Amount (Credit) Amount Amount (Credit) Amount
- --------------------- ------ -------- ------ ------ -------- ------ ------ ------ ------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unrealized translation
adjustments. . . . . . . $(154.6) $ - $(154.6) $ 3.1 $ - $3.1 $(296.4) $ - $(296.4)
Minimum pension liability
adjustment . . . . . . . 6.6 2.5 4.1 (1.4) (.6) (.8) (4.5) (1.7) (2.8)
-------- ---- -------- ------ ----- ----- -------- ------ --------

Other comprehensive
income (loss). . . . . . $(148.0) $2.5 $(150.5) $ 1.7 $(.6) $2.3 $(300.9) $(1.7) $(299.2)
======== ==== ======== ====== ===== ===== ======== ====== ========

</TABLE>

Accumulated balances of other comprehensive income (loss), net of
applicable income taxes:
<TABLE>
<CAPTION>

December 31
------------------
(Millions of dollars) 1999 1998
- ----------------------- -------- -------

<S> <C> <C>
Unrealized translation adjustments . . . . . . . $(1,104.7) $(950.1)
Minimum pension liability adjustment . . . . . . (10.1) (14.2)
--------- -------

Accumulated other comprehensive income (loss) . .$(1,114.8) $(964.3)
========= =======
</TABLE>

<PAGE>
NOTE 11. EXTRAORDINARY GAINS

In March 1997, the Corporation sold a noncore pulp and newsprint facility
located in Coosa Pines, Alabama ("Coosa") for approximately $600 million in
cash. Also, in the first quarter of 1997, the Corporation recorded impairment
losses on certain tissue and pulp manufacturing facilities. These impairment
losses totaled $111.5 million before income tax benefits. In June 1997, the
Corporation completed the sale of its interest in Scott Paper Limited ("SPL")
for approximately $127 million. The above described transactions have been
aggregated and reported as extraordinary gains totaling $17.5 million, net of
applicable income taxes of $38.4 million. The high effective income tax rate
on the extraordinary gains is due to income tax loss carryforwards that
precluded the current recognition of the income tax benefit on certain
impairment losses and the tax basis in SPL being substantially lower than the
carrying amount of the investment in the financial statements. The
extraordinary gains were equal to $.03 per share for both basic and diluted
EPS.

<PAGE>
NOTE 12. ACQUISITIONS AND DISPOSITIONS OF BUSINESSES

ACQUISITIONS

On June 10, 1999, the Corporation completed the acquisition of the
European consumer and away-from-home tissue businesses of Attisholz Holding AG
("Attisholz") for $365 million in cash. On September 23, 1999, the
Corporation completed the acquisition of Ballard through the exchange of
approximately 13.8 million shares of the Corporation's common stock for all
outstanding shares of Ballard. The value of the exchange of stock plus
related acquisition costs was approximately $788 million. These acquisitions
were accounted for as purchases. Accordingly, the results of operations of
these two entities have been included in the Corporation's consolidated
results of operations from the date of their acquisition and their assets and
liabilities are included in the Consolidated Balance Sheet as of December 31,
1999.

The Corporation engaged independent appraisers to assist in the
determination of the fair value of the acquired assets of Attisholz and
Ballard. Although the appraisals are not yet complete, the Corporation
believes that the allocation of the purchase price will result in assigning
values to intangible assets in a range of $720 million to $740 million. These
intangible assets will be amortized on the straight-line method over periods
up to 30 years.

The unaudited pro forma combined historical results, as if the Attisholz
and Ballard businesses had been acquired at the beginning of fiscal 1999 and
1998 are estimated to be:
<TABLE>
<CAPTION>

(Millions of dollars, except per share amounts) 1999 1998
- ----------------------------------------------------- ---- ----

<S> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,235.8 $12,733.6
Income before extraordinary gains and cumulative effect of accounting
change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,631.8 1,099.9
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,631.8 1,088.7
Basic net income per share. . . . . . . . . . . . . . . . . . . . . . 2.98 1.93
Diluted net income per share. . . . . . . . . . . . . . . . . . . . . 2.96 1.92
</TABLE>

The pro forma results include amortization of the intangibles discussed
above and interest expense on debt assumed to be issued to finance the
Attisholz purchase and to acquire the treasury stock exchanged in the Ballard
purchase. The pro forma results are not necessarily indicative of what
actually would have occurred if the acquisition had been completed as of the
beginning of each of the fiscal periods presented, nor are they necessarily
indicative of future consolidated results.

Other acquisitions relating primarily to increased ownership and
expansion in Asia and Latin America in 1999 and 1998 were $44.7 million and
$342.5 million, respectively. The Corporation recognized goodwill on
acquisitions of consolidated subsidiaries of $41.4 million in 1999 and $72.8
million in 1998. In addition, goodwill of $150.4 million related to the
acquisitions of equity companies in 1998 was recorded in investments in equity
companies.

In December 1997, the Corporation acquired Tecnol in a purchase
transaction through the exchange of approximately 8.7 million shares of the
Corporation's common stock for all the outstanding shares of Tecnol common
stock. The value of the exchange of stock plus related acquisition costs was
approximately $428 million. The allocation of the purchase price resulted in
assigning values to goodwill and other intangible assets of $336 million.

<PAGE>

NOTE 12. (Continued)

Other acquisitions in 1997 primarily related to increased ownership in
Asia and Latin America were $82.2 million, resulting in goodwill of $48.5
million, none of which relates to acquisitions of equity companies.

DISPOSITIONS

Southeast Timberlands
- ----------------------

In April 1998, the U.S. Environmental Protection Agency enacted new and
more stringent air emission and water discharge regulations, referred to as
the Cluster Rule, that impose additional pollution control requirements on the
Corporation's pulp production facilities. These rules would have required the
Corporation to spend more than $250 million to meet the Cluster Rule
requirements at its Mobile, Alabama pulp mill. Sappi Fine Paper (S.D. Warren
Company), a producer of printing and publishing papers, had purchased
approximately one-third of the pulp mill's output. On May 4, 1998, S.D.
Warren and the Corporation announced an agreement to terminate their pulp
supply contract effective September 1, 1999. As a result of the cancellation
of the pulp supply contract and the cost of implementing the Cluster Rule, on
May 5, 1998, the Corporation announced its intention to dispose of its entire
integrated pulp operation in Mobile, Alabama, including the related sale of
the associated woodlands operations (the "Southeast Timberlands") and the
closure of its pulp production facility. The pulp facility was shut down in
August 1999. Closure of the pulp mill resulted in the elimination of
approximately 450 jobs, and severance costs of $18.0 million for these
employees were charged to cost of products sold in the third quarter of 1998,
at the time the employees were notified of their termination benefits.

On September 30, 1999, the Corporation sold approximately 460,000 acres
of the Southeast Timberlands to Joshua Timberlands, LLC for notes receivable
with approximate face value of $400 million ("Joshua Notes"). The Joshua
Notes, which were recorded at their fair value of approximately $383 million,
bear interest initially at floating rates based on LIBOR less 15 basis points
and are backed by irrevocable standby letters of credit issued by a major
money-center bank, are due September 30, 2009 and are extendable in additional
five-year increments up to September 30, 2029, at the option of the note
holder. Additional acres of such timberland and related equipment were sold
to other buyers prior to September 30, 1999 for $66 million in cash. The
closure of the pulp mill combined with the sale of the related timberlands
resulted in a pretax gain of $153.3 million, which is recorded in other
(income) expense, net. The after-tax effect of the transaction was a gain of
$95.7 million, or $.18 per share.

In November 1999, the Joshua Notes were transferred for cash to a
noncontrolled special purpose entity ("SPE") in which the Corporation has a
minority voting interest. The transfer of the Joshua Notes, which was
accounted for as a sale, resulted in no gain or loss to the Corporation. The
SPE is accounted for as an equity investment by the Corporation.

In connection with the pulp mill closure, and as permitted by the terms
of the governing contract, on May 5, 1998, the Corporation gave notice to
Mobile Energy Services Company, L.L.C. ("MESC") of the Corporation's intent to
terminate MESC's long-term contract for power, steam and liquor processing
services with respect to the Mobile pulp mill. The resulting termination
penalty of $24.3 million, which comprised six months of adjusted demand
payments under the contract, was charged to cost of products sold in the
second quarter of 1998. On January 14, 1999, MESC and Mobile Energy Services
Holdings, Inc. (the "debtors") filed an action against the Corporation
claiming unspecified damages in connection with the cancellation of the
contract.

<PAGE>

NOTE 12. (Continued)

On December 31, 1999, a joint motion of the debtors and the MESC
bondholders' steering committee (the "Motion") was filed with the U.S.
Bankruptcy Court seeking approval of a settlement and compromise of claims
against the Corporation arising from the closure of the Mobile pulp mill and
termination of the pulp mill's energy services agreement. The Motion,
which was granted by the U.S. Bankruptcy Court by order dated January 24,
2000, outlines the terms of settlement for various litigation matters
between the Corporation and MESC. Under the proposed settlement, the
Corporation agreed to pay MESC at closing approximately $30 million,
subject to certain adjustments. Closing of the settlement would be subject
to, among other conditions, MESC filing a plan of reorganization from
bankruptcy and the ultimate approval of that plan by the U.S. Bankruptcy Court.
The approximate $30 million payment, which will be accrued when appropriate,
is in addition to $24.3 million previously accrued by the Corporation. In
addition, the proposed settlement provides MESC with an option to purchase the
Mobile pulp mill at a nominal price; a settlement of all pending litigation
and arbitration between the Corporation and MESC; mutual releases by the
Corporation, MESC and its affiliate (the Southern Company and affiliates),
and the representatives of the MESC bondholders; and an agreement by MESC
to terminate the existing tissue mill energy services agreement and to provide
the Mobile tissue mill energy at market rates.

The outcome of the MESC litigation and settlement matters is not expected
to have a material adverse effect on the Corporation's business, financial
condition or results of operations.

K-C Aviation Inc.
- -------------------

In August 1998, the Corporation completed the sale of its subsidiary, K-C
Aviation Inc. ("KCA"), for $250 million in cash. The sale resulted in a
pretax gain of $140.0 million, which is included in other (income) expense,
net. The transaction resulted in an after-tax gain of $78.3 million, or $.14
per share.

Assets Held for Sale
- -----------------------

During 1999, 1998 and 1997, in accordance with SFAS 121, depreciation was
suspended on certain timberlands assets, pulp producing facilities and
depreciable property that were held for disposal or disposed of. Depreciation
for these facilities would have been $5.5 million in 1999, $12.6 million in
1998 and $47.3 million in 1997. The suspended depreciation in 1999 relates to
the sale of the Southeast Timberlands, which was completed in September 1999.
The lower amount of suspended depreciation in 1998 versus 1997 was a result of
the sale of Coosa in March 1997, the sale of SPL in June 1997 and the
reclassification of the New Glasgow, Nova Scotia and the Terrace Bay, Ontario
pulp manufacturing facilities from assets held for sale to property, plant and
equipment used in operations during 1998.

<PAGE>
NOTE 13. CONTINGENCIES AND LEGAL MATTERS

LITIGATION

On May 13, 1997, the State of Florida, acting through its attorney
general, filed a complaint in the Gainesville Division of the United States
District Court for the Northern District of Florida (the "Florida District
Court"), alleging that manufacturers of tissue products for away-from-home
use, including the Corporation and Scott, agreed to fix prices by coordinating
price increases for such products. Following Florida's complaint, an action
by the states of Maryland, New York and West Virginia, as well as
approximately 45 class action complaints, have been filed in various federal
and state courts around the United States. These actions contain allegations
similar to those made by the State of Florida in its complaint. The actions
in federal courts have been consolidated for pretrial proceedings in the
Florida District Court. Class certification was granted in the federal
proceedings in July 1998 and will be contested in the state cases. The
foregoing actions seek an unspecified amount of actual and treble damages.

In February 2000, the State of Florida is expected to agree to dismiss
its complaint with prejudice pursuant to a settlement with defendants. With
respect to the remaining actions, the Corporation has answered the complaints
in these actions and has denied the allegations contained therein as well as
any liability. The Corporation intends to contest these claims vigorously.
These actions are not expected to have a material adverse effect on the
Corporation's business, financial condition or results of operations.

The Corporation also is subject to routine litigation from time to time,
which, individually or in the aggregate, is not expected to have a material
adverse effect on the Corporation's business, financial condition or results
of operations.

ENVIRONMENTAL MATTERS

The Corporation has been named a potentially responsible party under the
provisions of the federal Comprehensive Environmental Response, Compensation
and Liability Act, or analogous state statute, 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 the Corporation's
business, financial condition or results of operations.

<PAGE>
NOTE 14. UNAUDITED QUARTERLY DATA
<TABLE>
<CAPTION>

1999 1998
(Millions of dollars, ------------------------------------------- -------------------------------------------
except per share amounts) Fourth(a) Third(b) Second(c) First(d) Fourth(e) Third(f) Second(g) First(h)
- --------------------------- --------- -------- --------- -------- --------- -------- --------- --------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales. . . . . . . . . . . $3,425.5 $3,307.5 $3,148.6 $3,125.2 $3,108.2 $3,099.7 $3,041.3 $3,048.6
Gross profit . . . . . . . . . 1,409.0 1,345.9 1,297.0 1,273.3 1,192.3 1,166.6 1,126.1 1,112.6
Operating profit . . . . . . . 602.5 719.0 569.3 544.6 384.1 530.6 400.1 382.9
Income before cumulative
effect of accounting
change . . . . . . . . . . . 424.0 478.4 391.1 374.6 266.7 326.8 262.9 257.9
Per share basis:
Basic. . . . . . . . . . . .78 .90 .73 .70 .49 .60 .47 .46
Diluted. . . . . . . . . . .77 .89 .73 .69 .49 .59 .47 .46
Net income . . . . . . . . . . 424.0 478.4 391.1 374.6 266.7 326.8 262.9 246.7
Per share basis:
Basic. . . . . . . . . . . .78 .90 .73 .70 .49 .60 .47 .44
Diluted. . . . . . . . . . .77 .89 .73 .69 .49 .59 .47 .44
Cash dividends declared
per share. . . . . . . . . . .26 .26 .26 .26 .25 .25 .25 .25
Market price per share:
High . . . . . . . . . . . . 69.56 62.19 64.06 54.88 54.94 49.44 52.44 59.44
Low. . . . . . . . . . . . . 50.81 52.13 48.00 44.81 39.44 35.88 44.44 46.75
Close. . . . . . . . . . . . 65.44 52.75 57.00 47.94 54.50 40.50 45.88 50.13
</TABLE>

(a) Included in the fourth quarter 1999 are the following items:
<TABLE>
<CAPTION>

Basic and
Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
-----------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C>
Charges for business improvement and other programs . . $ 8.5 $(.2) $2.4
Business integration and other costs. . . . . . . . . . 1.8 9.2 6.1
----- ----- ----

Total . . . . . . . . . . . . . . . . . . . . . . . . $10.3 $9.0 $8.5 $.02
===== ===== ==== ====
</TABLE>

(b) Included in the third quarter 1999 are the following items:
<TABLE>
<CAPTION>
Basic and
Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
-----------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C>
Charges for business improvement and other programs . . $36.2 $ 19.4 $ 13.4
Business integration and other costs. . . . . . . . . . 9.4 13.4 8.4
Gain on asset disposal. . . . . . . . . . . . . . . . . - (153.3) (95.7)
----- -------- -------

Total . . . . . . . . . . . . . . . . . . . . . . . . $45.6 $(120.5) $(73.9) $(.14)
===== ======== ======= ======
</TABLE>

<PAGE>
NOTE 14. (Continued)

<S> <C> <C> <C> <C>
Charges for business improvement and other programs . . $ 5.8 $ 5.8 $ 4.4
Mobile pulp mill fees and related severances. . . . . . 9.0 9.0 5.6
Gains on asset disposals. . . . . . . . . . . . . . . . - (23.4) (16.6)
----- ------- -------

Total . . . . . . . . . . . . . . . . . . . . . . . . $14.8 $ (8.6) $ (6.6) $(.01)
===== ======= ======= ======
</TABLE>

(d) Gross profit, operating profit, net income and basic and diluted net
income per share includes $18.5 million, $22.8 million, $15.4 million
and $.03, respectively, related to the charges for business improvement
and other programs.

(e) Gross profit, operating profit, net income and basic and diluted net
income per share includes $69.8 million, $151.9 million, $106.8 million
and $.20, respectively, related to the charges for business improvement
and other programs.

(f) Included in the third quarter 1998 are the following items:
<TABLE>
<CAPTION>

<S> <C> <C> <C> <C>
Charges for business improvement and other programs . . $28.1 $ 100.2 $ 77.4
Mobile pulp mill fees and related severances. . . . . . 18.0 18.0 11.0
Gain on asset disposal. . . . . . . . . . . . . . . . . - (140.0) (78.3)
----- -------- -------

Total . . . . . . . . . . . . . . . . . . . . . . . . $46.1 $ (21.8) $ 10.1 $.03
===== ======== ======= ====
</TABLE>

Basic and diluted net income per share include a loss of $.01 per share
related to the change in the value of the Mexican peso.

(g) Included in the second quarter 1998 are the following items:
<TABLE>
<CAPTION>
Basic and
Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
-----------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C>
Charges for business improvement and other programs . . $45.3 $53.9 $45.7
Mobile pulp mill fees and related severances. . . . . . 24.3 24.3 14.9
----- ----- -----

Total . . . . . . . . . . . . . . . . . . . . . . . . $69.6 $78.2 $60.6 $.11
===== ===== ===== ====
</TABLE>

(h) Gross profit, operating profit, net income and basic and diluted net
income per share includes $48.4 million, $71.8 million, $46.9 million
and $.08, respectively, related to the charges for business improvement
and other programs. Basic and diluted net income per share also include
a loss of $.01 per share related to the change in the value of
the Mexican peso.

<PAGE>
NOTE 15. SUPPLEMENTAL DATA (Millions of dollars)
<TABLE>
<CAPTION>
SUPPLEMENTAL BALANCE SHEET DATA

December 31
-------------------
Summary of Accounts Receivable 1999 1998
- --------------------------------- -------------------

<S> <C> <C>
Accounts Receivable:
From customers . . . . . . . . . . . . . . . . . . . . . $1,492.3 $1,396.0
Other. . . . . . . . . . . . . . . . . . . . . . . . . . 179.9 136.5
Less allowance for doubtful accounts and sales discounts (71.6) (67.3)
--------- ---------

Total. . . . . . . . . . . . . . . . . . . . . . . . $1,600.6 $1,465.2
========= =========
</TABLE>

Accounts receivable are carried at amounts that approximate fair value.

Long-term notes receivable carried at $220 million have a fair value of
approximately $212 million.
<TABLE>
<CAPTION>

December 31
-------------------
Summary of Inventories 1999 1998
- ------------------------ -------------------

<S> <C> <C>
Inventories by Major Class:
At the lower of cost on the First-In,
First-Out (FIFO) method, weighted-
average cost method or market:
Raw materials . . . . . . . . . . . . . . . . . . . . $ 342.3 $ 355.4
Work in process . . . . . . . . . . . . . . . . . . . 171.2 164.2
Finished goods. . . . . . . . . . . . . . . . . . . . 713.4 751.3
Supplies and other. . . . . . . . . . . . . . . . . . 215.4 195.5
--------- ---------
1,442.3 1,466.4

Excess of FIFO cost over Last-In, First-Out (LIFO) cost (202.4) (182.6)
--------- ---------

Total . . . . . . . . . . . . . . . . . . . . . . . $1,239.9 $1,283.8
========= =========
</TABLE>

Total inventories include $399.2 million and $490.2 million of
inventories valued on the LIFO method at December 31, 1999 and 1998,
respectively.
<TABLE>
<CAPTION>

December 31
-------------------
Summary of Accrued Expenses 1999 1998
- ------------------------------ -------------------

<S> <C> <C>
Accruals for the 1998 and 1997 Plans. . . . . . . . . . $ 24.5 $ 129.8
Accrued advertising and promotion expense . . . . . . . 277.8 272.6
Accrued salaries and wages. . . . . . . . . . . . . . . 392.8 335.0
Other accrued expenses. . . . . . . . . . . . . . . . . 617.0 681.7
-------- --------

Total accrued expenses. . . . . . . . . . . . . . $1,312.1 $1,419.1
======== ========
</TABLE>

<PAGE>
NOTE 15. (Continued)
<TABLE>
<CAPTION>

SUPPLEMENTAL CASH FLOW STATEMENT DATA

Year Ended December 31
----------------------------
Summary of Cash Flow Effects of (Increase) Decrease in
Operating Working Capital(a) 1999 1998 1997
- ------------------------------ ----------------------------

<S> <C> <C> <C>
Accounts receivable . . . . . . . . . . . . . . . . . . $ (10.3) $ 87.5 $ 13.4
Inventories . . . . . . . . . . . . . . . . . . . . . . 111.2 (.4) (43.7)
Prepaid expenses. . . . . . . . . . . . . . . . . . . . 22.4 14.2 (13.6)
Trade accounts payable. . . . . . . . . . . . . . . . . 41.1 (101.2) (89.0)
Other payables. . . . . . . . . . . . . . . . . . . . . (98.4) 41.0 27.9
Accrued expenses. . . . . . . . . . . . . . . . . . . . (147.3) (116.3) (294.7)
Accrued income taxes. . . . . . . . . . . . . . . . . . 34.9 130.8 (151.9)
Currency rate changes . . . . . . . . . . . . . . . . . (20.7) 8.0 (36.8)
-------- -------- --------

(Increase) decrease in operating working capital. . . . $ (67.1) $ 63.6 $(588.4)
======== ======== ========
</TABLE>

(a) Excludes the effects of acquisitions, dispositions and the business
improvement and other programs discussed in Note 2 to the
Consolidated Financial Statements.
<TABLE>
<CAPTION>

Year Ended December 31
----------------------------
Other Cash Flow Data 1999 1998 1997
- ----------------------- ----------------------------

<S> <C> <C> <C>
Reconciliation of changes in cash and cash equivalents:
Balance, January 1. . . . . . . . . . . . . . . . . . . $144.0 $ 90.8 $ 83.2
Increase. . . . . . . . . . . . . . . . . . . . . . . . 178.8 53.2 7.6
------ ------ -------

Balance, December 31. . . . . . . . . . . . . . . . . . $322.8 $144.0 $ 90.8
====== ====== =======

Interest paid . . . . . . . . . . . . . . . . . . . . . . $227.1 $192.1 $173.6
Income taxes paid . . . . . . . . . . . . . . . . . . . . 557.8 368.6 557.3
Increase (decrease) in cash and cash equivalents due to
currency rate changes . . . . . . . . . . . . . . . . . .1 2.4 (17.4)
</TABLE>

<TABLE>
<CAPTION>
Year Ended December 31
----------------------------
Interest Expense 1999 1998 1997
- ----------------- ----------------------------

<S> <C> <C> <C>
Gross interest cost. . . . . . . . . . . . . . . . . . . . $226.0 $211.1 $181.8
Capitalized interest on major construction projects. . . . (12.9) (12.4) (17.0)
------- ------- -------

Interest expense . . . . . . . . . . . . . . . . . . . . . $213.1 $198.7 $164.8
======= ======= =======
</TABLE>

<PAGE>
NOTE 16. BUSINESS SEGMENT AND GEOGRAPHIC DATA INFORMATION

The Corporation is organized into three global business segments as
follows:

- - The Tissue segment manufactures and markets facial and bathroom tissue,
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; disposable medical devices for respiratory
care, gastroenterology and cardiology; specialty and technical papers
and related products; and other products.

Information concerning consolidated operations by business segment and
geographic area, as well as data for equity companies, is presented in the
tables below and on the following pages:

<TABLE>
<CAPTION>
CONSOLIDATED OPERATIONS BY BUSINESS SEGMENT

Net Sales Operating Profit
---------------------------------- ------------------------------
(Millions of dollars) 1999 1998 1997 1999(a) 1998(a) 1997(a)
- -------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Tissue. . . . . . . . . .$ 6,968.8 $ 6,733.1 $ 7,210.2 $1,114.1 $ 921.3 $ 704.3
Personal Care . . . . . . 5,138.1 4,596.5 4,510.7 1,092.8 588.7 737.8
Health Care and Other . . 936.4 1,001.5 863.6 154.3 161.2 135.1
---------- ---------- ---------- -------- -------- ---------
Combined. . . . . . . . . 13,043.3 12,331.1 12,584.5 2,361.2 1,671.2 1,577.2
Intersegment sales. . . . (36.5) (33.3) (37.9) - - -
Unallocated items - net . - - - 74.2 26.5 (91.1)
---------- ---------- ---------- -------- -------- ---------

Consolidated. . . . . . .$13,006.8 $12,297.8 $12,546.6 $2,435.4 $1,697.7 $1,486.1
========= ========= ========= ======== ======== ========
</TABLE>

Assets Depreciation Capital Spending
------------------------------ ---------------------- ----------------------
(Millions of dollars) 1999 1998 1997 1999 1998 1997 1999 1998 1997
- -----------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Tissue. . . . . . . . $ 6,096.6 $ 5,870.8 $ 5,885.0 $359.6 $341.5 $303.3 $482.2 $345.6 $563.5
Personal Care . . . . 3,234.8 3,138.7 3,154.2 195.8 220.0 198.7 260.7 290.4 326.6
Health Care
and Other . . . . . 1,679.0 951.1 1,005.6 29.8 31.8 24.7 43.0 31.2 44.9
--------- --------- --------- ------ ------ ------ ------ ------ ------
Combined. . . . . . . 11,010.4 9,960.6 10,044.8 585.2 593.3 526.7 785.9 667.2 935.0
Unallocated(b)
assets. . . . . . . 1,805.1 1,727.2 1,372.3 1.0 1.2 1.8 .5 2.3 9.3
--------- --------- --------- ------ ------ ------ ------ ------ ------

Consolidated. . . . . $12,815.5 $11,687.8 $11,417.1 $586.2 $594.5 $528.5 $786.4 $669.5 $944.3
========= ========= ========= ====== ====== ====== ====== ====== ======
</TABLE>

<PAGE>
NOTE 16. (Continued)

(a) Included in Business Segment operating profit are the following
unusual items:
<TABLE>
<CAPTION>

1999
----------------------------------------------------------------
Personal Health Care
(Millions of dollars) Tissue Care and Other Unallocated Total
----------------------- ----------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Charges for business improvement
and other programs. . . . . . . . . . . . . $31.8 $16.3 $1.4 $ (1.7) $ 47.8
Business integration and others costs . . . . 16.4 - 6.2 - 22.6
Mobile pulp mill fees and related severances. 9.0 - - - 9.0
Gains on asset disposals. . . . . . . . . . . - - - (176.7) (176.7)
----- ----- ---- ------- -------

Total. . . . . . . . . . . . . . . . . . . $57.2 $16.3 $7.6 $(178.4) $ (97.3)
===== ===== ==== ======== ========
</TABLE>

1998
----------------------------------------------------------------
Personal Health Care
(Millions of dollars) Tissue Care and Other Unallocated Total
----------------------- ----------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Charges for business improvement
and other programs . . . . . . . . . . . . $172.1 $196.6 $12.5 $ (3.4) $377.8
Mobile pulp mill fees and related severances 42.3 - - - 42.3
Gain on asset disposal . . . . . . . . . . . - - - (140.0) (140.0)
------ ------ ----- -------- -------

Total. . . . . . . . . . . . . . . . . . . $214.4 $196.6 $12.5 $(143.4) $280.1
====== ====== ===== ======== ======
</TABLE>

<TABLE>
<CAPTION>
1997
----------------------------------------------------------------
Personal Health Care
(Millions of dollars) Tissue Care and Other Unallocated Total
----------------------- ----------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Charges for business improvement
and other programs. . . . . . . . . . . . $384.9 $74.7 $8.4 $ 10.3 $478.3
Gain on asset disposal. . . . . . . . . . . - - - (26.5) (26.5)
------ ----- ---- ------- -------

Total . . . . . . . . . . . . . . . . . . $384.9 $74.7 $8.4 $(16.2) $451.8
====== ===== ==== ======= ======
</TABLE>

(b) Assets include investments in equity companies of $863.1 million,
$813.1 million and $567.7 million in 1999, 1998 and 1997,
respectively.

<TABLE>
<CAPTION>
CONSOLIDATED OPERATIONS BY GEOGRAPHIC AREA

Net Sales Operating Profit
------------------------------ -----------------------------
(Millions of dollars) 1999 1998 1997 1999(a) 1998(a) 1997(a)
- --------------------------- --------- --------- --------- -------- -------- --------

<S> <C> <C> <C> <C> <C> <C>
United States . . . . . . . . . $ 8,392.5 $ 7,992.8 $ 7,854.3 $1,821.9 $1,407.2 $1,362.8
Canada. . . . . . . . . . . . . 843.4 785.1 1,052.5 105.3 112.7 151.9
Intergeographic items(b). . . . (507.4) (408.9) (397.2) - - -
--------- --------- --------- -------- -------- ---------

North America . . . . . . . . . 8,728.5 8,369.0 8,509.6 1,927.2 1,519.9 1,514.7
Europe. . . . . . . . . . . . . 2,544.7 2,471.2 2,548.1 183.3 (39.7) (76.1)
Asia, Latin America and Africa. 2,084.6 1,766.2 1,837.9 250.7 191.0 138.6
--------- --------- --------- -------- -------- ---------

Combined. . . . . . . . . . . . 13,357.8 12,606.4 12,895.6 2,361.2 1,671.2 1,577.2
Intergeographic items . . . . . (351.0) (308.6) (349.0) - - -
Unallocated items - net . . . . - - - 74.2 26.5 (91.1)
--------- --------- --------- -------- -------- ---------

Consolidated. . . . . . . . . . $13,006.8 $12,297.8 $12,546.6 $2,435.4 $1,697.7 $1,486.1
========= ========= ========= ======== ======== ========
</TABLE>

<PAGE>
NOTE 16. (Continued)
<TABLE>
<CAPTION>

Assets
------
(Millions of dollars) 1999 1998 1997
- ----------------------- ----------------------------------

<S> <C> <C> <C>
United States . . . . . . . . . $ 6,363.1 $ 5,807.4 $ 5,901.0
Canada. . . . . . . . . . . . . 497.5 470.0 547.5
Intergeographic items . . . . . (79.0) (52.6) (65.4)
---------- ---------- ----------

North America . . . . . . . . . 6,781.6 6,224.8 6,383.1
Europe. . . . . . . . . . . . . 2,404.1 2,133.2 2,279.9
Asia, Latin America and Africa. 1,960.7 1,714.9 1,524.6
---------- ---------- ----------

Combined. . . . . . . . . . . . 11,146.4 10,072.9 10,187.6
Intergeographic items . . . . . (136.0) (112.3) (142.8)
Unallocated items - net(c). . . 1,805.1 1,727.2 1,372.3
---------- ---------- ----------

Consolidated. . . . . . . . . . $12,815.5 $11,687.8 $11,417.1
========== ========== ==========
</TABLE>

Note: The Corporation has reclassified the results of its Puerto Rican
operations to Latin America from the United States.

(a) Included in geographic operating profit are the following unusual
items:
<TABLE>
<CAPTION>

1999
-------------------------------------------------------------------------
Asia,
Latin America
(Millions of dollars) U.S. Canada Europe and Africa Unallocated Total
----------------------- -------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Charges for business improvement
and other programs. . . . . . . . $20.5 $5.6 $31.3 $(7.9) $ (1.7) $ 47.8
Business integration and other
costs . . . . . . . . . . . . . . 17.4 - 5.2 - - 22.6
Mobile pulp mill fees and related
severances. . . . . . . . . . . . 9.0 - - - - 9.0
Gains on asset disposals. . . . . . - - - - (176.7) (176.7)
----- ---- ----- ------ ------- -------
Total . . . . . . . . . . . . . . $46.9 $5.6 $36.5 $(7.9) $(178.4) $ (97.3)
===== ==== ===== ====== ======= =======
</TABLE>

1998
-------------------------------------------------------------------------
Asia,
Latin America
(Millions of dollars) U.S. Canada Europe and Africa Unallocated Total
----------------------- -------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Charges for business improvement
and other programs . . . . . . . . $213.9 $(7.9) $162.8 $12.4 $ (3.4) $ 377.8
Mobile pulp mill fees and related
severances . . . . . . . . . . . . 42.3 - - - - 42.3
Gain on asset disposal . . . . . . . - - - - (140.0) (140.0)
------ ------ ------ ----- -------- --------
Total. . . . . . . . . . . . . . . $256.2 $(7.9) $162.8 $12.4 $(143.4) $(280.1)
====== ====== ====== ===== ======== ========
</TABLE>

<TABLE>
<CAPTION>
1997
-------------------------------------------------------------------------
Asia,
Latin America
(Millions of dollars) U.S. Canada Europe and Africa Unallocated Total
----------------------- -------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Charges for business improvement
and other programs . . . . . . . . $190.3 $2.7 $204.8 $70.2 $ 10.3 $ 478.3
Gain on asset disposal . . . . . . . - - - - (26.5) (26.5)
------ ---- ------ ----- ------- -------
Total. . . . . . . . . . . . . . . $190.3 $2.7 $204.8 $70.2 $(16.2) $ 451.8
====== ==== ====== ===== ======= =======

</TABLE>
(b) Net sales include $287.6 million, $255.9 million and $246.0 million
by operations in Canada to the U.S. in 1999, 1998 and 1997, respectively.

<PAGE>

NOTE 16. (Continued)

(c) Assets include investments in equity companies of $863.1 million,
$813.1 million and $567.7 million in 1999, 1998 and 1997, respectively.

<TABLE>
<CAPTION>
EQUITY COMPANIES' DATA BY GEOGRAPHIC AREA

Kimberly-
Clark's
Share
Net Gross Operating Net of Net
(Millions of dollars) Sales Profit Profit Income Income
- --------------------- -------- --------- --------- -------- --------

<S> <C> <C> <C> <C> <C>
For the year ended:
December 31, 1999
Latin America(a). . . . . . . . $1,611.6 $638.9 $477.7 $334.1 $154.0
Asia, Australia and Middle East 714.0 263.1 98.6 73.4 35.6
-------- ------ ------ ------ ------

Total. . . . . . . . . . . $2,325.6 $902.0 $576.3 $407.5 $189.6
======== ====== ====== ====== ======

For the year ended:
December 31, 1998
Latin America(b). . . . . . . . $1,606.8 $574.4 $344.5 $245.5 $113.5
Asia, Australia and Middle East 666.9 236.6 81.8 49.1 23.6
-------- ------ ------ ------ ------

Total . . . . . . . . . . . $2,273.7 $811.0 $426.3 $294.6 $137.1
======== ====== ====== ====== ======

For the year ended:
December 31, 1997
Latin America(c). . . . . . . . $1,464.3 $528.6 $444.2 $283.1 $130.8
Asia, Australia and Middle East 698.1 253.6 93.7 55.0 26.5
-------- ------ ------ ------ ------

Total. . . . . . . . . . . $2,162.4 $782.2 $537.9 $338.1 $157.3
======== ====== ====== ====== ======
</TABLE>

(a) As of January 1, 1999, the Corporation consolidated Colombiana
Kimberly Colpapel S.A., its Colombian affiliate, in which the Corporation
made an additional investment in late 1998 to gain majority ownership
of certain equity affiliates.

(b) Operating profit, net income and Kimberly-Clark's share of net income
includes a loss of $38.9 million, $19.8 million and $9.2 million,
respectively, related to the change in the value of the Mexican peso. In
May 1998, the Corporation acquired 50 percent of Klabin Tissue, S.A., the
leading tissue manufacturer in Brazil.

(c) Operating profit, net income and Kimberly-Clark's share of net income
includes a gain of $73.0 million, $36.0 million and $16.3 million,
primarily related to the sale of a portion of the tissue business of KCM.
Additionally, operating profit, net income and Kimberly-Clark's share of net
income includes $6.7 million, $4.4 million and $2.2 million, respectively,
related to the 1997 Plan.

<PAGE>
NOTE 16. (Continued)
<TABLE>
<CAPTION>

Non- Non- Stock-
Current Current Current Current holders'
(Millions of dollars) Assets Assets Liabilities Liabilities Equity
- ----------------------- ------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
December 31, 1999
Latin America . . . . . . . . . $ 860.6 $1,076.4 $428.8 $400.9 $1,107.3
Asia, Australia and Middle East 254.0 391.7 143.3 194.1 308.3
-------- -------- ------ ------ --------

Total . . . . . . . . . . . $1,114.6 $1,468.1 $572.1 $595.0 $1,415.6
======== ======== ====== ====== ========

December 31, 1998
Latin America . . . . . . . . . $ 785.5 $1,170.7 $575.0 $154.0 $1,227.2
Asia, Australia and Middle East 239.2 359.1 129.5 173.8 295.1
-------- -------- ------ ------ --------

Total . . . . . . . . . . . $1,024.7 $1,529.8 $704.5 $327.8 $1,522.3
======== ======== ====== ====== ========

December 31, 1997
Latin America . . . . . . . . . $ 752.8 $ 624.6 $336.0 $278.4 $ 763.0
Asia, Australia and Middle East 226.8 386.9 128.0 185.5 300.2
-------- -------- ------ ------ --------

Total . . . . . . . . . . . $ 979.6 $1,011.5 $464.0 $463.9 $1,063.2
======== ======== ====== ====== ========
</TABLE>

Equity companies are principally engaged in operations in the Tissue and
Personal Care businesses.

KCM is partially owned by the public and its stock is publicly traded in
Mexico. At December 31, 1999, the Corporation's investment in this equity
company was $448.0 million, and the estimated fair value of the investment was
$2.4 billion based on the market price of publicly traded shares.

<PAGE>
INDEPENDENT AUDITORS' REPORT
Kimberly-Clark Corporation and Subsidiaries

Kimberly-Clark Corporation, Its Directors and Stockholders:

We have audited the accompanying consolidated balance sheets of
Kimberly-Clark Corporation and Subsidiaries as of December 31, 1999 and 1998,
and the related consolidated statements of income, stockholders' equity and
cash flows for each of the three years in the period ended December 31, 1999.
These financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Kimberly-Clark Corporation
and Subsidiaries at December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1999, in conformity with generally accepted accounting
principles.

/s/ Deloitte & Touche LLP
- -----------------------------
Deloitte & Touche LLP
Dallas, Texas
January 24, 2000

<PAGE>
AUDIT COMMITTEE CHAIRMAN'S LETTER
Kimberly-Clark Corporation and Subsidiaries

The members of the Audit Committee are selected by the board of
directors. The committee consists of four outside directors and met five
times during 1999.

The Audit Committee oversees the financial reporting process on behalf of
the board of directors. As part of that responsibility, the committee
recommends to the board of directors, subject to stockholder approval, the
selection of the Corporation's independent auditor. The Audit Committee
discusses the overall scope and specific plans for annual audits with the
Corporation's internal auditors and Deloitte & Touche LLP. The committee also
discusses the Corporation's annual consolidated financial statements and the
adequacy of its internal controls. The committee meets regularly with the
internal auditors and with Deloitte & Touche LLP, with and without management
present, to discuss the results of their audits, their evaluations of the
Corporation's internal controls, and the overall quality of the Corporation's
financial reporting. The meetings also are designed to facilitate any private
communication with the committee desired by the internal auditors or
independent auditor.

/s/ Paul J. Collins
- -------------------------------
Paul J. Collins
Chairman, Audit Committee
January 24, 2000

<PAGE>
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
Kimberly-Clark Corporation and Subsidiaries

The management of Kimberly-Clark Corporation is responsible for
conducting all aspects of the business, including the preparation of the
consolidated financial statements in this annual report. The consolidated
financial statements have been prepared using generally accepted accounting
principles considered appropriate in the circumstances to present fairly the
Corporation's consolidated financial position, results of operations and cash
flows on a consistent basis. Management also has prepared the other
information in this annual report and is responsible for its accuracy and
consistency with the consolidated financial statements.

As can be expected in a complex and dynamic business environment, some
financial statement amounts are based on management's estimates and judgments.
Even though estimates and judgments are used, measures have been taken to
provide reasonable assurance of the integrity and reliability of the financial
information contained in this annual report. These measures include an
effective control-oriented environment in which the internal audit function
plays an important role, an Audit Committee of the board of directors that
oversees the financial reporting process, and independent audits.

One characteristic of a control-oriented environment is a system of
internal control over financial reporting and over safeguarding of assets
against unauthorized acquisition, use or disposition, designed to provide
reasonable assurance to management and the board of directors regarding
preparation of reliable published financial statements and such asset
safeguarding. The system is supported with written policies and procedures,
contains self-monitoring mechanisms and is audited by the internal audit
function. Appropriate actions are taken by management to correct deficiencies
as they are identified. All internal control systems have inherent
limitations, including the possibility of circumvention and overriding of
controls, and, therefore, can provide only reasonable assurance as to
financial statement preparation and such asset safeguarding.

The Corporation also has adopted a code of conduct that, among other
things, contains policies for conducting business affairs in a lawful and
ethical manner everyplace in which it does business, for avoiding potential
conflicts of interest and for preserving confidentiality of information and
business ideas. Internal controls have been implemented to provide reasonable
assurance that the code of conduct is followed.

The consolidated financial statements have been audited by the
independent accounting firm, Deloitte & Touche LLP. During their audits,
independent auditors were given unrestricted access to all financial records
and related data, including minutes of all meetings of stockholders and the
board of directors and all committees of the board. Management believes
that all representations made to the independent auditors during their
audits were valid and appropriate.

During the audits conducted by both the independent auditors and the
internal audit function, management received recommendations to strengthen or
modify internal controls in response to developments and changes. Management
has adopted, or is in the process of adopting, all recommendations that are
cost effective.

<PAGE>
The Corporation has assessed its internal control system as of December
31, 1999, in relation to criteria for effective internal control over
financial reporting described in "Internal Control - Integrated Framework"
issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on this assessment, management believes that, as of
December 31, 1999, its system of internal control over the preparation of its
published interim and annual consolidated financial statements and over
safeguarding of assets against unauthorized acquisition, use or disposition
met those criteria.

/s/ Wayne R. Sanders /s/ Thomas J. Falk /s/ John W. Donehower
- ------------------------- ----------------------- -------------------------
Wayne R. Sanders Thomas J. Falk John W. Donehower
Chairman of the Board and President and Senior Vice President and
Chief Executive Officer Chief Operating Officer Chief Financial Officer

January 24, 2000

<PAGE>

ADDITIONAL INFORMATION

TRANSFER AGENT, REGISTRAR AND DIVIDEND DISBURSING AGENT

BankBoston N.A. is the Transfer Agent, Registrar and Dividend Disbursing Agent
for the Company's common stock and is responsible for maintaining shareholder
account records. Inquiries regarding dividend payments, lost certificates,
IRS Form 1099, changes in address, name or ownership, and information
regarding Kimberly-Clark's Dividend Reinvestment and Stock Purchase Plan
should be addressed to:

BankBoston N.A.
c/o EquiServe L.P.
P.O. Box 8040
Boston, Massachusetts 02266-8040
Telephone: 800-730-4001
Internet: http://www.equiserve.com

DIVIDENDS AND DIVIDEND REINVESTMENT PLAN

Quarterly dividends have been paid continually since 1935. Dividends are paid
on or about the second day of January, April, July and October. The Automatic
Dividend Reinvestment service of EquiServe L.P. is available to Kimberly-Clark
stockholders of record. The service makes it possible for Kimberly-Clark
stockholders of record to have their dividends automatically reinvested in
common stock and to make additional cash investments up to $3,000 per quarter.

STOCK EXCHANGES

Kimberly-Clark common stock is listed on the New York, Chicago and Pacific
stock exchanges. The ticker symbol is KMB.

ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of Stockholders will be held at the Corporation's World
Headquarters, 351 Phelps Drive, Irving, Texas, at 11:00 a.m. on Thursday,
April 13, 2000.

INVESTOR RELATIONS

Securities analysts, portfolio managers and representatives of institutional
investors seeking information about the Company should contact Michael D.
Masseth, Vice President - Investor Relations, at 972-281-1478. Investors may
also obtain information about Kimberly-Clark and copies of documents released
by the Company by calling 800-639-1352.

CALENDAR

Kimberly-Clark's fiscal year ends December 31. The annual report is
distributed in March.

SEC FORM 10-K AND OTHER INFORMATION/COMPANY WEB SITE

Stockholders and others will find the Company's financial information, press
releases and other information on the Company's web site at
www.kimberly-clark.com. There is a direct link from the web site to the
Securities and Exchange Commission (SEC) filings via the EDGAR database,
including Forms 10-K, 10-Q and 8-K. Stockholders may contact Stockholder
Services, P.O. Box 612606, Dallas, Texas 75261-2606 or call 972-281-1521 to
obtain a hard copy of these reports, without charge.

<PAGE>

EMPLOYEES AND STOCKHOLDERS

In its worldwide consolidated operations, Kimberly-Clark had 54,800 employees
as of December 31, 1999. Equity companies had an additional 12,700 employees.
The Corporation had 52,332 stockholders of record and 540.6 million shares of
common stock outstanding as of the same date.

TRADEMARKS

The brand names mentioned in this report - Andrex, Classic Crest, Cottonelle,
Depend, DryNites, Environment, GoodNites, Hakle, Huggies, Kimberly-Clark,
Kimwipes, Kleenex, Kotex, Little Swimmers, Neve, Poise, Pull-Ups, Scott,
Tecnol, UV Ultra and WypAll - are trademarks of Kimberly-Clark Corporation
or its affiliates.

Exhibit No. (21)

CONSOLIDATED SUBSIDIARIES AND EQUITY COMPANIES
Kimberly-Clark Corporation and Subsidiaries

The following list includes certain companies that were owned directly or
indirectly by Kimberly-Clark Corporation, a Delaware corporation, Dallas,
Texas, as of December 31, 1999.

This list includes all significant subsidiaries and equity companies.
The place of incorporation or organization is the same as the location of the
company except as shown parenthetically.

Consolidated Subsidiaries

Avent, Inc. and subsidiaries (Delaware), Tucson, Arizona
Ballard Medical Products and subsidiaries, Draper, Utah
Colombiana Kimberly Colpapel S.A. and subsidiaries, Medellin, Colombia (69%)
Ecuapel, S.A., Guayaquil, Ecuador (69%)
Hakle-Kimberly Switzerland GmbH and subsidiaries, Reichenburg, Switzerland
Hakle-Kimberly Deutschland GmbH and subsidiaries, Koblenz, Germany
Housing Horizons, LLC, Dallas, Texas
K-C Hanoi Co. Ltd., Hanoi, Vietnam (70%)
Kimberly Bolivia S.A., Santa Cruz, Bolivia (42%)
Kimberly-Clark Argentina Holdings S.A. and subsidiaries, Buenos Aires,
Argentina
Kimberly-Clark a.s., Czech Republic
Kimberly-Clark Australia Holdings Pty. Ltd. and subsidiaries, Milsons Point,
Australia
Kimberly-Clark B.V., Ede, The Netherlands
Kimberly-Clark CBG Hygienic Products Company Limited, Chengdu, Handan, Kunming
and Nanjing, China
Kimberly-Clark Canada Inc. and subsidiaries, Mississauga, Ontario, Canada
Kimberly-Clark Central American Holdings, S.A., Panama (81%)
Kimberly-Clark de Centro America, S.A. and subsidiaries, Sitio del Nino, El
Salvador (81%)
Kimberly-Clark Chile, S.A., Santiago, Chile
Kimberly-Clark do Brasil Limitada and subsidiaries, Sao Paulo, Brazil
Kimberly-Clark Holding Ltd. and subsidiaries, Kent, United Kingdom
Kimberly-Clark (Hong Kong) Limited, Kowloon, Hong Kong
Kimberly-Clark International, S.A., Panama City, Panama
Kimberly-Clark Japan Limited, Tokyo, Japan
Kimberly-Clark Kenko Industria e Commercio Ltda. and subsidiaries, Sao Paulo,
Brazil (51%)
Kimberly-Clark Lda., Lisbon, Portugal
Kimberly-Clark Luxembourg S.A.R.L. and subsidiaries, Luxembourg
Kimberly-Clark Malaysia Sendirian Berhad, Petaling Jaya, Malaysia
Kimberly-Clark N.V., Duffel, Belgium
Kimberly-Clark ooo, Moscow, Russia
Kimberly-Clark Paper (Guangzhou) Company Ltd., Guangzhou, China
Kimberly-Clark Paper (Shanghai), Ltd., Shanghai, China
Kimberly-Clark Paraguay, S.A., Asuncion, Paraguay
Kimberly-Clark Personal Hygienic Products Co., Ltd., Beijing, China
Kimberly-Clark Personal Hygienic Products (Nanjing) Co. Ltd., Nanjing, China
Kimberly-Clark Philippines Inc., Makati, Philippines (87%)
Kimberly-Clark Poland Sp. z o.o, Warsaw, Poland
Kimberly-Clark Printing Technology, Inc. (California) and subsidiaries,
Roswell, Georgia
Kimberly-Clark Products (Malaysia) Sdn. Bhd., Kluang, Malaysia
Kimberly-Clark Pudumjee Limited, Pune, India (51%)
Kimberly-Clark Puerto Rico, Inc. (Delaware), San Juan, Puerto Rico
<PAGE>
Kimberly-Clark, S.L. and subsidiaries, Madrid, Spain
Kimberly-Clark - SID, S.A., Dominican Republic (80%)
Kimberly-Clark Singapore Pte. Ltd., Singapore
Kimberly-Clark S.N.C., Saint Cloud, France
Kimberly-Clark Southern Africa (Holdings) (Pty) Ltd. and subsidiaries,
Johannesburg, South Africa (50% plus one share)
Kimberly-Clark S.p.A. and subsidiaries, Turin, Italy
Kimberly-Clark Technical Paper, Inc. (New Hampshire), East Ryegate, Vermont
Kimberly-Clark Thailand Limited, Bangkok, Thailand
Kimberly-Clark Tissue Company (Pennsylvania), Dallas, Texas
Kimberly-Clark Ukraine LLC, Kiev, Ukraine
Kimberly-Clark Uruguay, S.A., Montevideo, Uruguay
Kimberly-Clark Vietnam Co, Inc., Ho Chi Minh City, Vietnam
Kimberly-Clark Worldwide, Inc. (Delaware), Dallas, Texas
KIMNICA, S.A., Managua, Nicaragua
MIMO S.A., Guayaquil, Ecuador (69%)
MIMO S.A., Lima, Peru (55%)
Papelera Guaicaipuro, C.A., Maracay, Venezuela (69%)
Papeles Absorbentes, S.A., Guatemala City, Guatemala (66%)
P.T. Scott Paper Indonesia, Jakarta Utara, Indonesia
Scott Paper Company de Costa Rica, S.A. and subsidiaries, San Jose, Costa Rica
(81%)
Scott Paper Company - Honduras, S.A. de C.V., San Pedro, Honduras (81%)
Scott, S.A. and subsidiaries, Saint Cloud, France
Taiwan Scott Paper Corporation, Taipei, Taiwan (67%)
Tecnol, Inc. and subsidiaries (Delaware), Fort Worth, Texas
Venekim, C.A., Caracas, Venezuela (69%)
YuHan-Kimberly, Limited, Seoul, Korea (70%)

Equity Companies

Hogla-Kimberly, Limited and subsidiaries, Hadera, Israel (49.9%)
KCK Tissue S.A., Buenos Aires, Argentina (50%)
Kimberly-Clark Australia Pty. Limited, Milsons Point, New South Wales,
Australia (50%)
Kimberly-Clark Lever, Ltd., Pune, India (50%)
Kimberly-Clark de Mexico, S.A. de C.V. and subsidiaries, Mexico City, Mexico
(47.9%)
Klabin Kimberly S.A., Sao Paulo, Brazil (50%)
Olayan Kimberly-Clark Arabia Company, Al-Khobar, Kingdom of Saudi Arabia (49%)
Olayan Kimberly-Clark (Bahrain) WLL, Manama, Bahrain (49%)
Ovisan Turkey, Pendik, Turkey (49.9%)
P.T. Kimsari Paper Indonesia, Medan, Indonesia (50%)
Tenosur S.A., Colombia (34%)
<PAGE>

Exhibit No. (23)
INDEPENDENT AUDITORS' CONSENT

KIMBERLY-CLARK CORPORATION:

We consent to the incorporation by reference in Kimberly-Clark Corporation's
Registration Statements on Form S-8 (Nos. 33-5299, 33-49050, 33-58402,
33-64063, 33-64689, 33-64931, 333-02607, 333-06996, 333-17367, 333-38385,
333-43647, 333-71661, 333-94139, and 333-85099) and on Form S-3
(Nos. 33-52343, 333-45399 and 333-68903) of our reports dated January 24,
2000 appearing in and incorporated by reference in this Annual Report on
Form 1O-K of Kimberly-Clark Corporation.

/s/ Deloitte & Touche LLP
- --------------------------------
DELOITTE & TOUCHE LLP

Dallas, Texas
March 22, 2000

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EXHIBIT (24)

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby
constitute and appoint John W. Donehower, Randy J. Vest and O. George
Everbach, and each of them, with full power to act alone, his true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1999 and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his substitute or their
substitutes, lawfully do or cause to be done by virtue hereof.