-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TPouJuDYXT0pNsXWaWLcYfPo9lxyCcvVZ83UODvOWL9/alE9ycPaWrbbxchVPR/g 1qlIHzA4KtLklK9x6tAzVg== 0000055785-03-000053.txt : 20030723 0000055785-03-000053.hdr.sgml : 20030723 20030723082138 ACCESSION NUMBER: 0000055785-03-000053 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030723 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030723 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KIMBERLY CLARK CORP CENTRAL INDEX KEY: 0000055785 STANDARD INDUSTRIAL CLASSIFICATION: PAPER MILLS [2621] IRS NUMBER: 390394230 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00225 FILM NUMBER: 03797381 BUSINESS ADDRESS: STREET 1: P O BOX 619100 STREET 2: DFW AIRPORT STATION CITY: DALLAS STATE: TX ZIP: 75261-9100 BUSINESS PHONE: 9722811200 MAIL ADDRESS: STREET 1: 351 PHELPS DRIVE CITY: IRVING STATE: TX ZIP: 75038 8-K 1 form8k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: July 23, 2003 (Date of earliest event reported) KIMBERLY-CLARK CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-225 39-0394230 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) P.O. Box 619100, Dallas, Texas 75261-9100 (Address of principal executive offices) (Zip Code) (972) 281-1200 (Registrant's telephone number, including area code) Item 7. Financial Statements and Exhibits (c) Exhibits. 99.1 Press Release issued by Kimberly-Clark Corporation on July 23, 2003 regarding the Corporation's second quarter results of operations, strategic plan and long-term objectives. Item 9. Regulation FD Disclosure (and Item 12. Results of Operations and Financial Condition) The information contained in this Item 9 of the Current Report is being furnished pursuant to "Item 12. Results of Operations and Financial Condition" of Form 8-K in accordance with Securities and Exchange Commission Release Nos. 33-8216 and 34-47583. The information, including exhibits attached hereto, in this Current Report is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing. Attached and incorporated herein by reference as Exhibit 99.1 is a copy of the press release of Kimberly-Clark Corporation, dated July 23, 2003, reporting the Corporation's results of operations for the second quarter ended June 30, 2003. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. KIMBERLY-CLARK CORPORATION Date: July 23, 2003 By: /s/ Mark A. Buthman ---------------------- Mark A. Buthman Senior Vice President and Chief Financial Officer EXHIBIT INDEX ------------- (99.1) Press release issued by Kimberly-Clark Corporation on July 23, 2003, regarding the Corporation's second quarter results of operations, strategic plan and long-term objectives. EX-99 3 ex99a.txt PRESS RELEASE Kimberly-Clark's Second Quarter 2003 Sales Rose 4 Percent to $3.5 Billion; Diluted Net Income Was 82 Cents Per Share Company Outlines Strategic Plan and Long-Term Objectives DALLAS, July 23, 2003--Kimberly-Clark Corporation (NYSE: KMB) today reported that sales in the second quarter of 2003 were $3.5 billion, an increase of 4 percent over the prior year. Diluted net income for the second quarter was 82 cents per share in 2003, up from 81 cents per share in 2002. Compared with earnings before unusual items of 86 cents per share in 2002, second quarter earnings per share declined about 5 percent. Last year's unusual items are described in more detail below. Sales growth in the second quarter of 2003 was driven primarily by a 4 percent improvement in currency exchange rates. Sales volumes were essentially flat, reflecting weaker-than-expected growth in a number of key categories in North America, particularly diapers and consumer tissue products. Net selling prices were approximately the same as last year, as price increases in certain geographies were offset by continued high levels of competitive promotional spending overall. Compared with the prior year, second quarter results were also impacted by higher pretax pension expense of about $35 million. Thomas J. Falk, chairman and chief executive officer of Kimberly-Clark, said, "While sales volumes in the second quarter trailed our earlier expectations and the cost of energy and raw materials moved higher, we more than made up for these factors with progress on our priority to cut costs this year. Our businesses delivered savings of nearly $50 million in the quarter, putting us well on our way to achieving our annual target of $175 million to $200 million. I'm also encouraged by the improvement in market share trends for our diapers - more - - 2 - and training pants in North America and the rebound in operating profit margin for our Business-to-Business segment in the second quarter. "Meanwhile, continued strong cash flow enabled us to repurchase another 2.2 million shares of our common stock during the quarter. "Today, we are also introducing our new global business plan. It's the result of a six-month internal evaluation of our long-term corporate and financial objectives. The plan calls for significant changes in the way we operate, in particular how we assess our opportunities and how we allocate our capital. As you will see from details provided later in this news release, the main focus of the plan is to drive improved returns. With the plan, we have reset our target for top-line growth to 3 to 5 percent annually which, combined with margin improvement and share repurchases, should enable us to deliver earnings per share growth in the mid to high single digits. It will also result in solid cash flow growth, enabling us to increase our annual dividend at a high single-digit to low double-digit rate over the next five years. "Importantly, I believe that our new plan lays out a strong, credible and achievable roadmap for delivering value to our shareholders." Unusual items There were no unusual items in the second quarter of 2003. In the second quarter of 2002, the company recorded a pretax charge of about $27 million, or 3 cents per share, for losses associated with tax credits in Brazil. Last year's second quarter results also included pretax charges of approximately $15 million, equivalent to 2 cents per share, for business improvement programs primarily in Latin America and Europe. Kimberly-Clark management believes that, because of the nature of the unusual items, investors' understanding of the company's performance is enhanced by disclosing earnings per share before unusual items as a reasonable basis for comparison of the company's ongoing results of operations. The attached Earnings Summary schedule provides a reconciliation of earnings per share before unusual items - more - - 3 - to diluted net income per share determined in accordance with generally accepted accounting principles. Review of second quarter sales The company's Consumer Tissue and Business-to-Business segments posted higher sales, while Personal Care sales were even with last year. Sales of consumer tissue products were up approximately 6 percent, driven primarily by currency effects in Europe and Australia. Overall sales volumes increased nearly 1 percent following strong growth of 13 percent in the second quarter of 2002. Net selling prices were about the same as last year, as response to competitive promotional activity in North America and Europe negated list price increases mainly in those geographies. In North America, sales volumes of consumer tissue products rose 1 percent on top of last year's 12 percent gain. Volume growth remained solid for Cottonelle and Scott bathroom tissue despite below-trend consumer demand for the overall category. Net pricing was off almost 1 percent due to increases in competitive promotion spending. In Europe, sales advanced 20 percent primarily as a result of improvement in currency exchange rates for the euro and the British pound. Sales volumes rose 3 percent and net selling prices rose more than 1 percent. Meanwhile, consumer tissue sales were up more than 5 percent in Asia, as volume gains in Korea and currency benefits in Australia were partially offset by continued weakness in Taiwan. Personal Care sales were flat in the second quarter. Currency-related gains of about 3 percent and slightly higher net selling prices were offset by lower sales volumes of more than 3 percent. Sales volumes were affected by intense competition in the diaper category in a number of key markets as well as a slowdown in category growth in North America. In North America, Personal Care sales volumes decreased approximately 4 percent versus the second quarter of 2002 despite record shipments of Pull-Ups training pants, GoodNites youth pants and Huggies Little Swimmers swimpants. Although sales volumes of Huggies diapers were lower than last year, the brand's market share improved - more - - 4 - sequentially from the first quarter to the second quarter. Net selling prices of personal care products in North America were similar to last year. Personal care sales in Europe increased more than 11 percent in the quarter due primarily to favorable currency rates, partially offset by lower sales volumes for the company's diaper products. In Asia, personal care sales rose nearly 11 percent in the second quarter, highlighted by strong double-digit growth in Australia from a combination of currency benefits and higher sales volumes. Sales volumes were higher for the majority of the company's operations in the region. Finally, in Latin America, sales decreased 15 percent, as price increases were not sufficient to offset widespread volume and currency weakness throughout most of the region. Sales of business-to-business products increased nearly 8 percent in the quarter, boosted by volume growth of about 3 percent and currency benefits of more than 4 percent. The company's global Health Care business posted record quarterly sales. Its sales volumes rose 10 percent, with strong growth outside North America and substantially higher sales of face masks and gloves. K-C Professional's sales volumes increased approximately 4 percent in North America and nearly 10 percent in Asia, but were flat in Europe. Overall selling prices declined 1 percent compared with the second quarter of last year. Other second quarter operating results Operating profit in the second quarter of 2003 was $606.9 million, about 3 percent below the prior year. The company made further progress in its efforts to reduce costs in 2003, as savings ramped up to nearly $50 million in the quarter from more than $40 million in the first quarter. The savings are net of higher resin costs. The cost reductions, however, were more than offset by the increase in pension expense of about $35 million and higher fiber and energy costs of approximately $40 million. Kimberly-Clark's share of net income of equity companies in the second quarter increased to $30.3 million in 2003 from $21.5 million in 2002 primarily due to higher net income at Kimberly-Clark de Mexico, S.A. de C.V. (KCM). Most of the increase was attributable to - more - - 5 - lower currency transaction losses compared with last year. Before currency effects, KCM's second quarter sales improved approximately 6 percent, nearly offsetting inflationary cost increases. Cash provided by operations in the second quarter was $689 million compared with an all-time record of $797 million in 2002 and $521 million in the first quarter of this year. Year-to-date results For the first six months of 2003, sales of $7.0 billion were up 3.9 percent from $6.7 billion in the prior year. Excluding currency effects, sales were essentially flat. Operating profit declined 8 percent to $1,186.2 million in 2003 versus $1,289.2 million in 2002. Diluted earnings per share for the first six months of 2003 were $1.60 versus $1.65 in 2002, a decline of 3 percent. Earnings before unusual items of $1.62 per share in 2003 were about 6 percent lower than last year's level of $1.73 per share. At June 30, 2003, net debt and preferred securities totaled $3.8 billion, compared with $3.9 billion at the end of 2002. For the first six months of the year, the company repurchased 4.7 million shares of its common stock at a cost of approximately $225 million. The company recently announced plans to redeem $200 million of 7.875 percent debentures and $200 million of 7 percent debentures. The redemptions will take place in the third quarter, enabling the company to refinance these obligations at substantially lower interest rates. Because of the nature of these transactions, the company will consider the costs of calling the debentures totaling approximately $20 million as unusual items in the third quarter. Outlook Commenting on the outlook, Mr. Falk said, "Clearly, the business environment remains difficult. Despite soft category growth, intense competition and higher raw material and energy costs, we still expect earnings per share before unusual items in the third quarter of 2003 will slightly exceed the second quarter. As for the fourth quarter, we expect further sequential improvement in earnings per share before unusual items. - more - - 6 - "For the year, we are still aiming for earnings before unusual items of $3.36 per share. Without some improvement in the business environment, however, it's possible that target could prove to be optimistic. That said, we will do our utmost to increase sales volumes and aggressively reduce costs over the balance of the year in order to deliver on our commitments." Global Business Plan Addressing the company's new strategic plan, Mr. Falk said it is designed to make Kimberly-Clark a stronger and more competitive company that delivers more predictable results. "Our Global Business Plan is based, in part, on continuing to do what we do well - understanding and meeting consumer wants and needs, striving to be the best possible partner with our customers, and driving innovation," he said. "But the plan also calls for our organization to be more disciplined, balancing the growth and profitability of our operations to drive improved returns." The most significant structural element of the plan is that the company has put each of its businesses into one of three categories based on an in-depth assessment of their market dynamics, the strength of their brands and technologies and their profitability and returns. The categories - grow, sustain and fix - will govern how the company allocates capital. o In the first category are brands and sectors that are growing the fastest - products like household towels, wipes, training pants, and light-end adult incontinence. Today, they account for more than 15 percent of sales and operating profit. They offer superior returns and the company's revised strategic plan calls for accelerated investments to fuel their growth. o In the second category are such businesses as North American infant care and facial tissue - generating solid, healthy returns and enjoying strong market shares. These businesses today represent nearly two-thirds of net sales and about three-quarters of operating profit. Here, the company will - more - - 7 - concentrate its investments on product improvements to sustain its strong positions in these markets. Planned productivity improvements will also support volume growth and improved margin goals. o Examples of businesses in the third category are businesses like North American K-C Professional Washroom and European Personal Care. They have not been performing to satisfaction, accounting for 20 percent of net sales, but less than 10 percent of operating profit. They are not currently generating the returns on capital the company expects. The primary focus will be to fix these businesses before investing any significant capital in new capacity. Mr. Falk noted that the new plan is all about setting priorities and making changes that will help Kimberly-Clark grow sales and maximize profit from each aspect of its operation. It also is a realistic assessment of what the company's portfolio can achieve. Accordingly, the company's revised key long-term financial objectives are: o Sales growth: 3-5 percent (Represents organic growth, without any significant contribution from acquisitions) o Profit margins: average annual improvement of 40-50 basis points in gross profit and operating profit margins o Earnings per share growth: mid to high single digits o Capital spending: 5-6 percent of sales (Down from an average of 7.3 percent of sales over the last five years) o Working capital: reduction of more than 200 basis points long term versus 2002 o Return on investment capital (ROIC): increase more than 2 percentage points long term versus 2002 o Dividends: annual increases at a high single-digit to low double-digit rate over the next five years o Share repurchases: 2 percent of outstanding shares per year (Depending on market conditions) - more - - 8 - Mr. Falk continued, "With our new plan, we have a solid platform in place for growing our business and applying greater financial discipline. Longer term, it establishes a stronger foundation for future growth through market share gains and new product breakthroughs. "Given our tradition of innovation and our new, more rigorous financial discipline, I'm confident we can achieve our top- and bottom-line growth targets, continue to provide healthy dividend increases and deliver superior value to our shareholders." Conference call A conference call to discuss this news release and other matters of interest to investors and analysts will be held at 9 a.m. (CST) today. The conference call will be simultaneously broadcast over the World Wide Web. Stockholders and others are invited to listen to the live broadcast or a playback, which can be accessed by following the instructions set out in the Investors section of the company's Web site (www.kimberly-clark.com). About Kimberly-Clark Kimberly-Clark and its well-known brands are an indispensable part of life for people in more than 150 countries. Every day, one in four people around the world trust K-C's brands to enhance their health, hygiene and well-being -- brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend. For the second consecutive year, Kimberly-Clark has been named to Fortune magazine's list of "100 Best Companies to Work For In America." With nearly 64,000 employees worldwide, the company has received similar recognition in the U.K., Argentina, Australia, Czech Republic, Korea and Thailand. To keep up with the latest K-C news and to learn more about the company's 131-year history of innovation, visit www.kimberly-clark.com. Copies of Kimberly-Clark's Annual Report to Stockholders, its proxy statements and its other SEC filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, - more - - 9 - are made available free of charge on the company's Web site on the same day they are filed with the SEC. To view these filings, visit the Investors section of the company's Web site. Certain matters contained in this news release concerning the business outlook, including new product introductions, cost savings and acquisitions, anticipated financial and operating results, strategies, contingencies and transactions of the company constitute forward-looking statements and are based upon management's expectations and beliefs concerning future events impacting the company. There can be no assurance that these future events will occur as anticipated or that the company's results will be as estimated. For a description of certain factors that could cause the company's future results to differ materially from those expressed in any such forward-looking statements, see the section of Part I, Item 1 of the company's Annual Report on Form 10-K for the year ended December 31, 2002 entitled "Factors That May Affect Future Results." - more - - 10 - KIMBERLY-CLARK CORPORATION PERIOD ENDED JUNE 30 (Millions, except per share amounts) EARNINGS SUMMARY: There were no unusual items in the second quarter of 2003. The following tables present the reconciliation of earnings before unusual items to GAAP net income.
Three Months Ended June 30, 2002 -------------------------------- Diluted Income Earnings (Expense) Per Share -------------------------------- Earnings Before Unusual Items............................................ $448.0 $ .86 Charges for Unusual Items: Brazil Tax Credits.................................... (13.5) (.03) Business Improvement Programs....................................... (9.9) (.02) ------ ----- Net Income......................................... $424.6 $ .81 ====== ===== Average Diluted Common Shares Outstanding............................... 522.6
- more - - 11 - KIMBERLY-CLARK CORPORATION PERIOD ENDED JUNE 30 (Millions, except per share amounts)
Six Months Ended June 30 -------------------------------------------------------------------- 2003 2002 ------------------------------ ------------------------------ Diluted Diluted Income Earnings Income Earnings (Expense) Per Share (Expense) Per Share --------- --------- --------- --------- Earnings Before Unusual Items.......................................... $826.1 $ 1.62 $904.1 $ 1.73 Charges for Unusual Items: European Legal Judgment..................................... (11.1) (.02) - - Brazil Tax Credits.................................. - - (13.5) (.03) Change in Accounting Principle.................................... - - (11.4) (.02) Business Improvement Programs..................................... - - (15.4) (.03) ------ ------ ------ ------ Net Income....................................... $815.0 $ 1.60 $863.8 $ 1.65 ====== ====== ====== ====== Average Diluted Common Shares Outstanding............................. 510.4 523.1
OTHER INFORMATION:
SIX MONTHS ENDED JUNE 30 ----------------------------- 2003 2002 ------- ------- Cash Dividends Declared Per Share...................................... $ .68 $ .60 Capital Spending................................. 402.1 382.0
AS OF JUNE 30 ----------------------------- 2003 2002 ------- ------- Number of Common Shares Outstanding.................................... 507.0 517.2
Unaudited - more - - 12 - KIMBERLY-CLARK CORPORATION PERIOD ENDED JUNE 30 (Millions, except per share amounts)
Three Months Ended June 30 ---------------------------- 2003 2002 Change -------- -------- ------ Net Sales...................................................... $3,544.6 $3,408.9 + 4.0% Cost of products sold........................................ 2,337.4 2,166.1 + 7.9% -------- -------- Gross Profit................................................... 1,207.2 1,242.8 - 2.9% Marketing, research and general expenses................................................... 579.5 587.3 - 1.3% Other (income) expense, net.................................. 20.8 31.2 N.M. -------- -------- Operating Profit............................................... 606.9 624.3 - 2.8% Interest income.............................................. 4.3 3.5 +22.9% Interest expense............................................. (44.6) (45.1) - 1.1% -------- -------- Income Before Income Taxes..................................... 566.6 582.7 - 2.8% Provision for income taxes................................... 164.9 163.2 + 1.0% -------- -------- Income Before Equity Interests................................. 401.7 419.5 - 4.2% Share of net income of equity companies.................................................. 30.3 21.5 +40.9% Minority owners' share of subsidiaries' net income................................... (14.7) (16.4) -10.4% -------- -------- Net Income .................................................... $ 417.3 $ 424.6 - 1.7% ======== ======== Net Income Per Share - Diluted................................. $ .82 $ .81 + 1.2% ======== ========
- more - - 13 - KIMBERLY-CLARK CORPORATION PERIOD ENDED JUNE 30 (Millions, except per share amounts) Notes (Three Months): 1. In 2002, charges (credits) for unusual items are included as follows: cost of products sold - $6.6 million; marketing, research and general expenses - $8.5 million; other (income) expense, net - $26.5 million; share of net income of equity companies - $1.4 million; and minority owners' share of subsidiaries' net income - $(6.0) million. 2. The Corporation accounts for stock-based compensation using the intrinsic-value method. The following presents pro forma information about net income and earnings per share as if the Corporation had applied fair value expense recognition to all employee stock options granted.
(Millions of dollars, except per share amounts) 2003 2002 -------------------------------------------------------------------------- Pro forma net income........................... $403.9 $406.4 Pro forma earnings per share - diluted......... .79 .78
N.M.-Not meaningful Unaudited - more - - 14 - KIMBERLY-CLARK CORPORATION PERIOD ENDED JUNE 30 (Millions, except per share amounts)
Six Months Ended June 30 ---------------------------- 2003 2002 Change -------- ------- ------ Net Sales...................................................... $7,004.3 $6,739.8 + 3.9% Cost of products sold........................................ 4,593.5 4,284.6 + 7.2% -------- -------- Gross Profit................................................... 2,410.8 2,455.2 - 1.8% Marketing, research and general expenses................................................... 1,168.4 1,153.5 + 1.3% Other (income) expense, net.................................. 56.2 12.5 N.M. -------- -------- Operating Profit............................................... 1,186.2 1,289.2 - 8.0% Interest income.............................................. 9.1 7.2 +26.4% Interest expense............................................. (87.6) (91.8) - 4.6% -------- -------- Income Before Income Taxes..................................... 1,107.7 1,204.6 - 8.0% Provision for income taxes................................... 322.4 348.3 - 7.4% -------- -------- Income Before Equity Interests................................. 785.3 856.3 - 8.3% Share of net income of equity companies.................................................. 56.3 53.9 + 4.5% Minority owners' share of subsidiaries' net income................................... (26.6) (35.0) -24.0% -------- -------- Income Before Cumulative Effect of Accounting Change......................................... 815.0 875.2 - 6.9% Cumulative effect of accounting change, net of income taxes.................................. - (11.4) N.M. -------- -------- Net Income .................................................... $ 815.0 $ 863.8 - 5.6% ======== ======== Per Share Basis - Diluted: Income Before Cumulative Effect of Accounting Change....................................... $ 1.60 $ 1.67 - 4.2% Cumulative effect of accounting change, net of income taxes................................ - (.02) N.M. -------- -------- Net Income................................................... $ 1.60 $ 1.65 - 3.0% ======== ========
- more - - 15 - KIMBERLY-CLARK CORPORATION PERIOD ENDED JUNE 30 (Millions, except per share amounts) Notes (Six Months): 1. In 2003, charges for unusual items are included as follows: other (income) expense, net - $15.6 million. 2. In 2002, charges (credits) for unusual items are included as follows: cost of products sold - $14.1 million; marketing, research and general expenses - $9.9 million; other (income) expense, net - $26.5 million; share of net income of equity companies - $1.4 million; minority owners' share of subsidiaries' net income - $(7.3) million; and cumulative effect of accounting change, net of income taxes - $11.4 million. 3. The Corporation accounts for stock-based compensation using the intrinsic-value method. The following presents pro forma information about net income and earnings per share as if the Corporation had applied fair value expense recognition to all employee stock options granted.
(Millions of dollars, except per share amounts) 2003 2002 ------------------------------------------------------------------------ Pro forma net income......................... $785.6 $828.9 Pro forma earnings per share - diluted...... 1.54 1.58
N.M.-Not meaningful Unaudited - more - - 16 - KIMBERLY-CLARK CORPORATION SELECTED BUSINESS SEGMENT DATA PERIOD ENDED JUNE 30
Three Months Six Months Ended June 30 Ended June 30 ------------------------------------ ------------------------------------ 2003 2002 Change 2003 2002 Change -------- -------- ------ -------- -------- ------ NET SALES: Personal Care................... $1,328.9 $1,329.1 0.0% $2,611.4 $2,586.3 + 1.0% Consumer Tissue................. 1,287.1 1,215.2 + 5.9% 2,612.4 2,470.0 + 5.8% Business-to- Business..................... 967.4 898.4 + 7.7% 1,855.2 1,751.3 + 5.9% Intersegment Sales........................ (38.8) (33.8) N.M. (74.7) (67.8) N.M. -------- -------- -------- -------- Consolidated.................... $3,544.6 $3,408.9 + 4.0% $7,004.3 $6,739.8 + 3.9% ======== ======== ======== ======== OPERATING PROFIT: (a) Personal Care................... $ 273.7 $ 293.3 - 6.7% $ 533.9 $ 557.4 - 4.2% Consumer Tissue................. 197.9 221.0 -10.5% 431.7 466.2 - 7.4% Business-to- Business..................... 181.3 171.1 + 6.0% 325.8 331.0 - 1.6% Other income (expense), net.......................... (20.8) (31.2) N.M. (56.2) (12.5) N.M. Unallocated items - net.......................... (25.2) (29.9) N.M. (49.0) (52.9) N.M. -------- -------- -------- -------- Consolidated.................... $ 606.9 $ 624.3 - 2.8% $1,186.2 $1,289.2 - 8.0% ======== ======== ======== ======== Notes: (a) Operating profit includes charges for unusual items as follows:
Three Months Six Months Ended June 30 Ended June 30 ---------------- --------------- 2003 2002 2003 2002 ---- ---- ---- ---- Personal Care.................................... $ - $ 4.6 $ - $ 8.0 Consumer Tissue.................................. - 7.3 - 11.5 Business-to-Business............................. - 3.2 - 4.5 Other income (expense), net........................................... - 26.5 15.6 26.5 ---- ----- ----- ----- Consolidated..................................... $ - $41.6 $15.6 $50.5 ==== ===== ===== =====
- more - - 17 - Description of Business Segments The Corporation is organized into operating segments based on product groupings. These operating segments have been aggregated into three reportable global business segments: Personal Care; Consumer Tissue; and Business-to-Business. Each reportable segment is headed by an executive officer who reports to the Corporation's Chief Executive Officer and is responsible for the development and execution of global strategies to drive growth and profitability of the Corporation's worldwide personal care, consumer tissue and business-to-business operations. These strategies include global plans for branding and product positioning, technology and research and development programs, cost reductions including supply chain management, and capacity and capital investments for each of these businesses. The principal sources of revenue in each of our global business segments are described below. The Personal Care segment manufactures and markets disposable diapers, training and youth pants and swimpants; feminine and incontinence care products; and related products. Products in this segment are primarily for household use and are sold under a variety of brand names, including Huggies, Pull-Ups, Little Swimmers, GoodNites, Kotex, Lightdays, Depend, Poise and other brand names. The Consumer Tissue segment manufactures and markets facial and bathroom tissue, paper towels and napkins for household use; wet wipes; and related products. Products in this segment are sold under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Page, Huggies and other brand names. The Business-to-Business segment manufactures and markets facial and bathroom tissue, paper towels, wipers and napkins for away-from-home use; health care products such as surgical gowns, drapes, infection control products, sterilization wraps, disposable face masks and exam gloves, respiratory products, and other disposable medical products; printing, premium business and correspondence papers; specialty and technical papers; and other products. Products in this segment are sold under the Kimberly-Clark, Kleenex, Scott, Kimwipes, WypAll, Surpass, Safeskin, Tecnol, Ballard and other brand names. N.M.-Not meaningful Unaudited - 18 - KIMBERLY-CLARK CORPORATION Supplemental Consolidated Information Reconciling Non-GAAP Financial Measures To Reported (GAAP) Financial Measures in Earnings Press Release of July 23, 2003 OUTLOOK FOR 2003 - ---------------- Estimated Full-Year 2003 Diluted Earnings Per Share - --------------------------------------------------- Earnings Per Share Before Unusual items.............................. $3.36 European Legal Judgment.............................. (0.02) Callable Bonds....................................... (0.02) - (0.03) --------------- Earnings Per Share - Diluted......................... $3.32 - $3.31 =============== DEFINITIONS - ----------- Net Debt and Preferred Securities - --------------------------------- Net debt is total debt less cash and cash equivalents and time deposits. Return on Invested Capital (ROIC) - --------------------------------- ROIC is calculated based on the sum of annualized enterprise operating profit(1), before unusual items, plus goodwill expense, on an after tax basis divided by invested capital. Invested capital is calculated on an enterprise basis(1) as the sum of accounts receivable, net; inventories; property, net; and gross goodwill less accounts payable on a rolling average 12-month basis. (1) As if equity companies were 100% owned by K-C. Unaudited # # # -----END PRIVACY-ENHANCED MESSAGE-----