DALLAS, July 23, 2015 /PRNewswire/ -- Kimberly-Clark
Corporation (NYSE: KMB) today reported second quarter 2015 results
and narrowed its previous guidance for full-year 2015 adjusted
earnings per share.
Executive Summary
- Second quarter 2015 net sales of $4.6 billion decreased 6 percent compared to the
year-ago period, as changes in foreign currency exchange rates
reduced sales 10 percent. Organic sales rose 4 percent, including a
10 percent increase in developing and emerging markets.
- Diluted net income per share for the second quarter was a
loss of $0.83 in 2015, driven by
non-cash pension settlement charges, compared to income of
$1.32 from continuing operations in
2014. Including earnings from the health care business
(discontinued operations) that was spun off at the end of
October 2014, diluted net income per
share was $1.35 for the second
quarter of 2014.
- Second quarter adjusted earnings per share were
$1.41 in 2015 compared to adjusted
earnings per share from continuing operations of $1.33 in the prior year. Performance benefited
from organic sales growth, cost savings, input cost deflation and a
lower share count. Comparisons were negatively impacted by
unfavorable foreign currency exchange rate effects and higher other
expense. Adjusted earnings per share in both years exclude certain
items described later in this news release.
- Full-year adjusted earnings per share in 2015 are
anticipated to be $5.65 to $5.80
compared to the company's previous guidance range of $5.60 to $5.80.
Chairman and Chief Executive Officer Thomas J. Falk said, "We continue to execute our
Global Business Plan strategies well. In the second quarter, we
delivered mid-single digit growth in organic sales and adjusted
earnings per share from continuing operations. We also achieved
significant cost savings and improvements in adjusted gross and
operating margins. In addition, we made further progress with
targeted growth initiatives, launched product innovations and
allocated capital in shareholder-friendly ways. In terms of our
full-year earnings outlook, we are raising the low end of our
previous guidance by 5 cents per
share. This reflects our strong performance in the first half of
the year, additional cost savings and more investments behind our
brands and growth initiatives than we previously planned. We
continue to be optimistic about our prospects to generate
attractive returns to shareholders."
Second Quarter 2015 Operating Results
Sales of $4.6 billion in the
second quarter of 2015 were down 6 percent compared to the year-ago
period. Changes in foreign currency exchange rates reduced sales 10
percent as a result of the weakening of most currencies relative to
the U.S. dollar. Organic sales rose 4 percent, as volumes increased
3 percent and product mix/other was favorable by 1 percent.
Second quarter operating profit was a loss of $544 million in 2015 and profit of $775 million in 2014. Adjusted operating profit
was $790 million in the second
quarter of 2015 compared to $777
million in the year-ago period. Adjusted results in 2015
exclude $1,322 million of charges for
pension settlements and $12 million
of 2014 Organization Restructuring costs. Adjusted results in 2014
exclude $2 million of restructuring
costs for European strategic changes.
The year-over-year adjusted operating profit comparison
benefited from organic sales growth, $105
million in cost savings from the company's FORCE (Focused On
Reducing Costs Everywhere) program and $20
million of savings from the 2014 Organization Restructuring.
Input costs decreased $40 million
overall, including $35 million of
lower costs for raw materials other than fiber and $5 million of lower energy costs. Translation
effects due to changes in foreign currency exchange rates lowered
operating profit by $80 million and
transaction effects also negatively impacted comparisons. The
currency impacts were most significant in Latin America and Eastern Europe. On an adjusted basis, other
(income) and expense, net was expense of $10
million in 2015 and income of $13
million in 2014. Results in 2015 were driven by foreign
currency transaction losses, while prior-period results benefited
from a gain on an asset sale.
The second quarter 2015 adjusted effective tax rate, which
excludes the effects of the previously mentioned items excluded
from adjusted earnings per share, was 32.2 percent, consistent with
company expectations for a full-year rate between 31.5 and 33.5
percent. The second quarter 2014 adjusted effective tax rate was
31.4 percent.
Kimberly-Clark's share of net income of equity companies in the
second quarter of 2015 was $39
million, even with the year-ago period. At Kimberly-Clark de
Mexico, results benefited from
organic sales growth, lower input costs and cost savings, but were
negatively impacted by a weaker Mexican peso. Second quarter net
income attributable to noncontrolling interests was $12 million in 2015 and $21 million in 2014. The change was driven by the
redemption of $0.5 billion of
preferred securities in December
2014.
Cash Flow and Balance Sheet
Cash provided by operations in the second quarter of 2015 was
$772 million compared to $842 million in 2014. The comparison was affected
by the spin-off of the health care business in 2014. Capital
spending for the second quarter was $243
million in 2015 and $181
million in 2014. Second quarter 2015 share repurchases were
0.9 million shares at a cost of $100
million. Total debt was $7.6
billion at June 30, 2015 and
$7.0 billion at the end of 2014.
Second Quarter 2015 Business Segment Results
Personal Care Segment
Second quarter sales of $2.3
billion decreased 6 percent. Currency rates were unfavorable
by more than 10 percent. Volumes increased 3 percent and net
selling prices and product mix each improved 1 percent. Second
quarter operating profit of $473
million increased 4 percent. The comparison benefited from
organic sales growth, cost savings and lower input costs, partially
offset by unfavorable effects from changes in currency rates.
Sales in North America
decreased 2 percent. Currency was unfavorable 1 percent and the
combined impact of changes in net selling prices and product mix
reduced sales 1 percent. Huggies baby wipes volumes rose double
digits, including benefits from innovation and market share gains.
Volumes in adult care, child care and Huggies diapers were all down
slightly. Feminine care volumes were off high-single digits
compared to mid-single digit growth in the year-ago period, with
market shares down slightly.
Sales in developing and emerging markets decreased 7 percent,
including a 20 percent negative impact from changes in currency
rates. Volumes increased 7 percent, net selling prices improved 5
percent and product mix advanced 1 percent. The volume growth
included gains in China and most
of Latin America, led by
Argentina, Brazil and Peru. The higher net selling prices were
driven by increases in Eastern
Europe and Latin America in
response to weaker currency rates.
Sales in developed markets outside North America (Australia, South
Korea and Western/Central
Europe) decreased 12 percent. Currency rates were
unfavorable by 11 percent and net selling prices and volumes were
both down slightly.
Consumer Tissue Segment
Second quarter sales of $1.5
billion decreased 8 percent. Currency rates were unfavorable
by 9 percent and net selling prices were down 2 percent, while
volumes were up 3 percent. Second quarter operating profit of
$260 million increased 8 percent. The
comparison benefited from cost savings, lower manufacturing-related
costs and reduced marketing, research and general expenses,
partially offset by unfavorable currencies and lower net selling
prices.
Sales in North America were
even with the year-ago period. Volumes increased 5 percent. Net
selling prices were off 4 percent, including the impact of
increased promotion activity, and product mix was unfavorable 1
percent. Volumes rose high-single digits in bathroom tissue, with
benefits from increased promotion shipments on Cottonelle. Volumes
increased low-single digits in facial tissue and paper towels.
Sales in developing and emerging markets decreased 20 percent,
including a 23 point negative impact from currency rates. Net
selling prices increased 2 percent and volumes advanced 1
percent.
Sales in developed markets outside North America decreased 13 percent, driven by
unfavorable currency rates.
K-C Professional (KCP) Segment
Second quarter sales of $0.8
billion decreased 4 percent. Changes in currency rates
reduced sales 9 percent and net selling prices were down 1 percent.
Volumes rose 3 percent and product mix/other was favorable by 3
percent, including sales of nonwovens to Halyard Health, Inc. in
conjunction with a near-term supply agreement. Second quarter
operating profit of $145 million
decreased 5 percent. The comparison was negatively impacted by
unfavorable currency effects, partially offset by benefits from
organic sales growth, cost savings and lower input costs.
Sales in North America
increased 1 percent. Volumes rose 3 percent. The combined impact of
changes in net selling prices and product mix reduced sales 1
percent and currency was unfavorable 1 percent. Volumes were up
mid-single digits in wipers and safety products and low-single
digits in washroom products.
Sales in developing and emerging markets decreased 13 percent,
including a 21 point drag from currency rates. Volumes rose 4
percent, net selling prices improved 3 percent and product mix
advanced 1 percent. The volume growth was driven by increases in
Latin America and Asia.
Sales in developed markets outside North America were down 16 percent. Changes in
currency rates reduced sales 15 percent. Net selling prices were
off 3 percent, mostly in Western/Central
Europe, while overall volumes increased 2 percent.
Year-To-Date Results
For the first six months of 2015, sales of $9.3 billion decreased 5 percent compared to the
year-ago period, as changes in foreign currency exchange rates
reduced sales 9 percent. Organic sales rose 4 percent, as volumes
increased 3 percent and product mix/other was favorable by 1
percent.
Year-to-date operating profit was $204
million in 2015 versus $1,486
million in 2014. Adjusted operating profit of $1,605 million in 2015 increased 4 percent
compared to $1,537 million in 2014.
Adjusted operating profit comparisons benefited from organic sales
growth, FORCE cost savings of $195
million and $30 million of
savings from the 2014 Organization Restructuring. In addition,
input costs overall were $55 million
lower. Translation effects due to changes in foreign currency
exchange rates lowered operating profit by $160 million and transaction effects also
negatively impacted the operating profit comparisons.
Through six months, diluted net income per share was
$0.44 in 2015 and $2.75 in 2014. Adjusted earnings per share of
$2.83 in 2015 increased 6 percent
versus $2.66 of adjusted earnings per
share from continuing operations in 2014. The increase was driven
by higher adjusted operating profit and a lower share count,
partially offset by a higher adjusted effective tax rate.
Adjusted operating profit and adjusted earnings per share in
2015 exclude pension settlement charges, 2014 Organization
Restructuring costs and a balance sheet remeasurement charge in
Venezuela. Adjusted results in
2014 exclude restructuring costs for European strategic changes and
a charge related to a regulatory dispute in the Middle East.
2014 Organization Restructuring
In October 2014, Kimberly-Clark
initiated a restructuring program in order to improve organization
efficiency and offset the impact of stranded overhead costs
resulting from the spin-off of the company's health care business.
The restructuring is intended to improve underlying profitability
and increase flexibility to invest in targeted growth initiatives,
brand building and other capabilities critical to delivering future
growth.
The restructuring is expected to be completed by the end of
2016, with total costs anticipated to be $130 to $160 million after tax ($190 to $230 million pre-tax). Cumulative pre-tax
savings from the restructuring are expected to be $120 to $140 million by the end of 2017. Second
quarter 2015 restructuring costs were $8
million after tax ($12 million
pre-tax), bringing cumulative costs to $108
million after tax ($158
million pre-tax). Second quarter 2015 savings were
$20 million, bringing cumulative
savings to $35 million.
Defined Benefit Pension Plan Changes
Effective January 2015, the
company amended its U.S. pension plan to include a lump-sum pension
benefit payout option for certain plan participants. In addition,
in April, Kimberly-Clark completed the purchase of group annuity
contracts that transferred to two insurance companies the pension
benefit obligations for approximately 21,000 Kimberly-Clark
retirees in the United States. As
a result of these changes, the company recognized pension
settlement charges of $0.8 billion
after tax ($1.3 billion pre-tax) in
the first half of 2015, mostly in the second quarter.
2015 Outlook and Key Planning Assumptions
The company updated the following key planning and guidance
assumptions for full-year 2015:
- The drag on sales and earnings from foreign currency
translation effects is expected to be at the high end of the
company's previous assumption, which was for a negative impact on
net sales of 9 to 10 percent and a negative impact on operating
profit of 10 to 11 percent.
- Deflation in key cost inputs is more likely to be
$100 to $200 million compared to the
prior estimate of $50 to $150
million. This reflects modest improvements in the outlook
for oil-based materials, recycled fiber and energy costs versus
prior assumptions.
- Cost savings from the company's FORCE program are
expected to be at least $350 million.
The previous target was for savings of at least $300 million.
- Adjusted earnings per share are anticipated to be
$5.65 to $5.80 versus the company's
previous guidance of $5.60 to
$5.80.
Non-GAAP Financial Measures
This press release and the accompanying tables include the
following financial measures that have not been calculated in
accordance with accounting principles generally accepted in the
U.S., or GAAP, and are therefore referred to as non-GAAP financial
measures:
- Adjusted earnings and earnings per share (including
continuing operations)
- Adjusted gross and operating profit
- Adjusted other (income) and expense, net
- Adjusted effective tax rate
These non-GAAP financial measures exclude the following items
for the relevant time periods as indicated in the accompanying
non-GAAP reconciliations to the comparable GAAP financial
measures:
- Pension settlement charges and 2014 Organization
Restructuring. See previous discussion in this news
release.
- Venezuelan balance sheet remeasurement. In the first
quarter of 2015, following the Venezuelan government's elimination
of the SICAD II exchange rate, the company recorded a charge for
remeasuring the local currency balance sheet in Venezuela at the new SIMADI floating exchange
rate.
- Regulatory dispute in the Middle East. In the first quarter of 2014, the
company recorded a non-deductible charge as a result of an adverse
court ruling regarding the treatment of capital contributions in
prior years to an affiliate in the Middle
East.
- Western and Central
Europe strategic changes and related restructuring charges.
In October 2012, the company
initiated strategic changes and a related restructuring in its
Western and Central European businesses. The restructuring was
completed at the end of 2014.
In addition, this press release includes information regarding
organic sales, which exclude the impact of changes in foreign
currency rates.
The company provides these non-GAAP financial measures as
supplemental information to our GAAP financial measures. Management
and the company's Board of Directors use adjusted earnings,
adjusted earnings per share and adjusted gross and operating profit
to (a) evaluate the company's historical and prospective financial
performance and its performance relative to its competitors, (b)
allocate resources and (c) measure the operational performance of
the company's business units and their managers. Management also
believes that the use of an adjusted effective tax rate provides
improved insight into the tax effects of our ongoing business
operations.
Additionally, the Management Development and Compensation
Committee of the company's Board of Directors has used certain of
the non-GAAP financial measures when setting and assessing
achievement of incentive compensation goals. These goals are based,
in part, on the company's adjusted earnings per share and
improvement in the company's adjusted return on invested capital
and adjusted operating profit return on sales determined by
excluding certain of the charges that are used in calculating these
non-GAAP financial measures.
Conference Call
A conference call to discuss this news release and other matters
of interest to investors and analysts will be held at 9 a.m. (CDT) today. The conference call will be
simultaneously broadcast over the World Wide Web. Stockholders and
others are invited to listen to the live broadcast or a playback,
which can be accessed by following the instructions set out in the
Investors section of the company's Web site
(www.kimberly-clark.com).
About Kimberly-Clark
Kimberly-Clark and its well-known global brands are an
indispensable part of life for people in more than 175 countries.
Every day, nearly a quarter of the world's population trust K-C
brands and the solutions they provide to enhance their health,
hygiene and well-being. With brands such as Kleenex, Scott,
Huggies, Pull-Ups, Kotex and Depend, Kimberly-Clark holds No. 1 or
No. 2 share positions in 80 countries. To keep up with the latest
K-C news and to learn more about the company's 143-year history of
innovation, visit www.kimberly-clark.com.
Copies of Kimberly-Clark's Annual Report to Stockholders and its
proxy statements and other SEC filings, including Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K, are made available free of charge on the company's Web
site on the same day they are filed with the SEC. To view these
filings, visit the Investors section of the company's Web site.
Certain matters contained in this news release concerning the
outlook, anticipated financial and operating results, raw material,
energy and other input costs, anticipated currency rates and
exchange risks, net income from equity companies, sources and uses
of cash, the effective tax rate, the anticipated costs, scope,
timing and financial and other effects of the 2014 Organization
Restructuring, growth initiatives, contingencies and anticipated
transactions of the company constitute forward-looking statements
and are based upon management's expectations and beliefs concerning
future events impacting the company. There can be no assurance that
these future events will occur as anticipated or that the company's
results will be as estimated. Forward-looking statements speak only
as of the date they were made, and we undertake no obligation to
publicly update them. For a description of certain factors, such as
currency rates and exchange risks, cost savings and reductions, raw
material, energy and other input costs, competition, market demand
and economic and political conditions, that could cause the
company's future results to differ from those expressed in any such
forward-looking statements, see Item 1A of the company's Annual
Report on Form 10-K for the year ended December 31, 2014 entitled "Risk
Factors."
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED INCOME
STATEMENT
|
(Millions, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30
|
|
|
|
2015
|
|
2014
|
|
Change
|
Net
Sales
|
$
|
4,643
|
|
|
$
|
4,953
|
|
|
-6.3
|
%
|
Cost of products
sold
|
2,986
|
|
|
3,253
|
|
|
-8.2
|
%
|
Gross
Profit
|
1,657
|
|
|
1,700
|
|
|
-2.5
|
%
|
Marketing, research
and general expenses
|
869
|
|
|
938
|
|
|
-7.4
|
%
|
Other (income) and
expense, net
|
1,332
|
|
|
(13)
|
|
|
N.M.
|
|
Operating Profit
(Loss)
|
(544)
|
|
|
775
|
|
|
N.M.
|
|
Interest
income
|
4
|
|
|
5
|
|
|
-20.0
|
%
|
Interest
expense
|
(73)
|
|
|
(72)
|
|
|
+1.4
|
%
|
Income (Loss) From
Continuing Operations Before Income Taxes and Equity
Interests
|
(613)
|
|
|
708
|
|
|
N.M.
|
|
Provision for income
taxes
|
281
|
|
|
(225)
|
|
|
N.M.
|
|
Income (Loss) From
Continuing Operations Before Equity Interests
|
(332)
|
|
|
483
|
|
|
N.M.
|
|
Share of net income
of equity companies
|
39
|
|
|
39
|
|
|
—
|
|
Income (Loss) From
Continuing Operations
|
(293)
|
|
|
522
|
|
|
N.M.
|
|
Income from
discontinued operations, net of income taxes
|
—
|
|
|
8
|
|
|
N.M.
|
|
Net Income
(Loss)
|
(293)
|
|
|
530
|
|
|
N.M.
|
|
Net income
attributable to noncontrolling interests in continuing
operations
|
(12)
|
|
|
(21)
|
|
|
-42.9
|
%
|
Net Income (Loss)
Attributable to Kimberly-Clark Corporation
|
$
|
(305)
|
|
|
$
|
509
|
|
|
N.M.
|
|
|
|
|
|
|
|
Per Share
Basis
|
|
|
|
|
|
Net Income (Loss)
Attributable to Kimberly-Clark Corporation
|
|
|
|
|
|
Basic
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.84)
|
|
|
$
|
1.33
|
|
|
N.M.
|
|
Discontinued
operations
|
—
|
|
|
0.02
|
|
|
N.M.
|
|
Net income
(loss)
|
$
|
(0.84)
|
|
|
$
|
1.35
|
|
|
N.M.
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.83)
|
|
|
$
|
1.32
|
|
|
N.M.
|
|
Discontinued
operations
|
—
|
|
|
0.02
|
|
|
N.M.
|
|
Rounding
|
—
|
|
|
0.01
|
|
|
N.M.
|
|
Net income
(loss)
|
$
|
(0.83)
|
|
|
$
|
1.35
|
|
|
N.M.
|
|
|
|
|
|
|
|
Cash Dividends
Declared
|
$
|
0.88
|
|
|
$
|
0.84
|
|
|
+4.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding
|
June
30
|
|
|
|
2015
|
|
2014
|
|
|
Outstanding shares as
of
|
364.3
|
|
|
374.0
|
|
|
|
Average diluted
shares for three months ended
|
366.7
|
|
|
378.4
|
|
|
|
|
|
|
|
|
|
|
|
|
N.M. –
Not Meaningful
|
Unaudited
|
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED INCOME
STATEMENT
|
(Millions, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30
|
|
|
|
2015
|
|
2014
|
|
Change
|
Net
Sales
|
$
|
9,334
|
|
|
$
|
9,840
|
|
|
-5.1
|
%
|
Cost of products
sold
|
6,018
|
|
|
6,475
|
|
|
-7.1
|
%
|
Gross
Profit
|
3,316
|
|
|
3,365
|
|
|
-1.5
|
%
|
Marketing, research
and general expenses
|
1,718
|
|
|
1,834
|
|
|
-6.3
|
%
|
Other (income) and
expense, net
|
1,394
|
|
|
45
|
|
|
N.M.
|
|
Operating
Profit
|
204
|
|
|
1,486
|
|
|
-86.3
|
%
|
Interest
income
|
8
|
|
|
8
|
|
|
—
|
|
Interest
expense
|
(145)
|
|
|
(143)
|
|
|
+1.4
|
%
|
Income From
Continuing Operations Before Income Taxes and Equity
Interests
|
67
|
|
|
1,351
|
|
|
-95.0
|
%
|
Provision for income
taxes
|
51
|
|
|
(421)
|
|
|
N.M.
|
|
Income From
Continuing Operations Before Equity Interests
|
118
|
|
|
930
|
|
|
-87.3
|
%
|
Share of net income
of equity companies
|
75
|
|
|
82
|
|
|
-8.5
|
%
|
Income From
Continuing Operations
|
193
|
|
|
1,012
|
|
|
-80.9
|
%
|
Income from
discontinued operations, net of income taxes
|
—
|
|
|
64
|
|
|
N.M.
|
|
Net
Income
|
193
|
|
|
1,076
|
|
|
-82.1
|
%
|
Net income
attributable to noncontrolling interests in continuing
operations
|
(30)
|
|
|
(29)
|
|
|
+3.4
|
%
|
Net Income
Attributable to Kimberly-Clark Corporation
|
$
|
163
|
|
|
$
|
1,047
|
|
|
-84.4
|
%
|
|
|
|
|
|
|
Per Share
Basis
|
|
|
|
|
|
Net Income
Attributable to Kimberly-Clark Corporation
|
|
|
|
|
|
Basic
|
|
|
|
|
|
Continuing
operations
|
$
|
0.45
|
|
|
$
|
2.60
|
|
|
-82.7
|
%
|
Discontinued
operations
|
—
|
|
|
0.17
|
|
|
N.M.
|
|
Net income
|
$
|
0.45
|
|
|
$
|
2.77
|
|
|
-83.8
|
%
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
Continuing
operations
|
$
|
0.44
|
|
|
$
|
2.58
|
|
|
-82.9
|
%
|
Discontinued
operations
|
—
|
|
|
0.17
|
|
|
N.M.
|
|
Net income
|
$
|
0.44
|
|
|
$
|
2.75
|
|
|
-84.0
|
%
|
|
|
|
|
|
|
Cash Dividends
Declared
|
$
|
1.76
|
|
|
$
|
1.68
|
|
|
+4.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding
|
June
30
|
|
|
|
2015
|
|
2014
|
|
|
Average diluted
shares for six months ended
|
367.3
|
|
|
380.3
|
|
|
|
|
|
|
|
|
|
|
N.M. – Not
Meaningful
|
Unaudited
|
KIMBERLY-CLARK
CORPORATION
|
NON-GAAP
RECONCILIATIONS
|
(Millions, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2015
|
|
|
As
Reported
|
|
Charges
for
Pension
Settlements
|
|
Charges for 2014
Organization Restructuring
|
|
As
Adjusted
Non-GAAP
|
Cost of products
sold
|
|
$
|
2,986
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
2,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
1,657
|
|
|
—
|
|
|
(7)
|
|
|
1,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, research
and general expenses
|
|
869
|
|
|
—
|
|
|
5
|
|
|
864
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) and
expense, net
|
|
1,332
|
|
|
1,322
|
|
|
—
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
(loss)
|
|
(544)
|
|
|
(1,322)
|
|
|
(12)
|
|
|
790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes and equity
interests
|
|
(613)
|
|
|
(1,322)
|
|
|
(12)
|
|
|
721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
281
|
|
|
509
|
|
|
4
|
|
|
(232)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Kimberly-Clark Corporation
|
|
(305)
|
|
|
(813)
|
|
|
(8)
|
|
|
516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
|
(0.83)
|
|
|
(2.22)
|
|
|
(0.02)
|
|
|
1.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2014
|
|
|
As
Reported
|
|
Charges for
European Strategic Changes
|
|
As
Adjusted
Non-GAAP
|
Cost of products
sold
|
|
$
|
3,253
|
|
|
$
|
2
|
|
|
$
|
3,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
1,700
|
|
|
(2)
|
|
|
1,702
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
775
|
|
|
(2)
|
|
|
777
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes and equity
interests
|
|
708
|
|
|
(2)
|
|
|
710
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
(225)
|
|
|
(2)
|
|
|
(223)
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
31.8
|
%
|
|
—
|
|
|
31.4
|
%
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
522
|
|
|
(4)
|
|
|
526
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests in continuing
operations
|
|
(21)
|
|
|
—
|
|
|
(21)
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to Kimberly-Clark
Corporation
|
|
501
|
|
|
(4)
|
|
|
505
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations
|
|
1.32
|
|
|
(0.01)
|
|
|
1.33
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP financial
measures are not meant to be considered in isolation or as a
substitute for the comparable GAAP measures, and they should be
read only in conjunction with the company's consolidated financial
statements prepared in accordance with GAAP. There are limitations
to these non-GAAP financial measures because they are not prepared
in accordance with GAAP and may not be comparable to similarly
titled measures of other companies due to potential differences in
methods of calculation and items being excluded. The company
compensates for these limitations by using these non-GAAP financial
measures as a supplement to the GAAP measures and by providing
reconciliations of the non-GAAP and comparable GAAP financial
measures.
|
|
Unaudited
|
KIMBERLY-CLARK
CORPORATION
|
NON-GAAP
RECONCILIATIONS
|
(Millions, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2015
|
|
|
As
Reported
|
|
Charges
for
Pension
Settlements
|
|
Charges for 2014
Organization Restructuring
|
|
Charge for
Venezuelan Balance Sheet Remeasurement
|
|
As
Adjusted
Non-GAAP
|
Cost of products
sold
|
|
$
|
6,018
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
5
|
|
|
$
|
5,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
3,316
|
|
|
—
|
|
|
(15)
|
|
|
(5)
|
|
|
3,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, research
and general expenses
|
|
1,718
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
1,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) and
expense, net
|
|
1,394
|
|
|
1,331
|
|
|
—
|
|
|
40
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
204
|
|
|
(1,331)
|
|
|
(25)
|
|
|
(45)
|
|
|
1,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes and equity
interests
|
|
67
|
|
|
(1,331)
|
|
|
(25)
|
|
|
(45)
|
|
|
1,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
51
|
|
|
512
|
|
|
12
|
|
|
—
|
|
|
(473)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Kimberly-Clark Corporation
|
|
163
|
|
|
(819)
|
|
|
(13)
|
|
|
(45)
|
|
|
1,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
0.44
|
|
|
(2.23)
|
|
|
(0.04)
|
|
|
(0.12)
|
|
|
2.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2014
|
|
|
As
Reported
|
|
Charges for
European Strategic Changes
|
|
Charge Related to
Regulatory Dispute in Middle East
|
|
As
Adjusted
Non-GAAP
|
Cost of products
sold
|
|
$
|
6,475
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
6,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
3,365
|
|
|
(8)
|
|
|
—
|
|
|
3,373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, research
and general expenses
|
|
1,834
|
|
|
4
|
|
|
—
|
|
|
1,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) and
expense, net
|
|
45
|
|
|
—
|
|
|
39
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
1,486
|
|
|
(12)
|
|
|
(39)
|
|
|
1,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes and equity
interests
|
|
1,351
|
|
|
(12)
|
|
|
(39)
|
|
|
1,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
(421)
|
|
|
3
|
|
|
—
|
|
|
(424)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
31.2
|
%
|
|
—
|
|
|
—
|
|
|
30.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
1,012
|
|
|
(9)
|
|
|
(39)
|
|
|
1,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests in continuing
operations
|
|
(29)
|
|
|
—
|
|
|
20
|
|
|
(49)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to Kimberly-Clark
Corporation
|
|
983
|
|
|
(9)
|
|
|
(19)
|
|
|
1,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations(a)
|
|
2.58
|
|
|
(0.02)
|
|
|
(0.05)
|
|
|
2.66
|
|
|
|
|
(a)
|
"As Adjusted
Non-GAAP" does not equal "As Reported" plus "Charges" as a result
of rounding.
|
|
Unaudited
|
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED BALANCE
SHEET
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
June 30,
2015
|
|
December 31,
2014
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
603
|
|
|
$
|
789
|
Accounts receivable,
net
|
2,286
|
|
|
2,223
|
Inventories
|
1,948
|
|
|
1,892
|
Other current
assets
|
681
|
|
|
655
|
Total Current
Assets
|
5,518
|
|
|
5,559
|
Property, Plant
and Equipment, Net
|
7,251
|
|
|
7,359
|
Investments in
Equity Companies
|
286
|
|
|
257
|
Goodwill
|
1,553
|
|
|
1,628
|
Other
Assets
|
738
|
|
|
723
|
TOTAL
ASSETS
|
$
|
15,346
|
|
|
$
|
15,526
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Debt payable within
one year
|
$
|
2,055
|
|
|
$
|
1,326
|
Trade accounts
payable
|
2,599
|
|
|
2,616
|
Accrued
expenses
|
1,790
|
|
|
1,974
|
Dividends
payable
|
321
|
|
|
310
|
Total Current
Liabilities
|
6,765
|
|
|
6,226
|
Long-Term
Debt
|
5,544
|
|
|
5,630
|
Noncurrent
Employee Benefits
|
1,186
|
|
|
1,693
|
Deferred Income
Taxes
|
698
|
|
|
587
|
Other
Liabilities
|
337
|
|
|
319
|
Redeemable
Preferred Securities of Subsidiaries
|
72
|
|
|
72
|
Stockholders'
Equity
|
|
|
|
Kimberly-Clark
Corporation
|
516
|
|
|
729
|
Noncontrolling
Interests
|
228
|
|
|
270
|
Total
Stockholders' Equity
|
744
|
|
|
999
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
15,346
|
|
|
$
|
15,526
|
|
|
|
|
|
|
|
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED CASH
FLOW STATEMENT
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30
|
|
Six Months
Ended
June 30
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(293)
|
|
|
$
|
530
|
|
|
$
|
193
|
|
|
$
|
1,076
|
|
Depreciation and
amortization
|
189
|
|
|
217
|
|
|
383
|
|
|
435
|
|
Asset
impairments
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
Stock-based
compensation
|
36
|
|
|
27
|
|
|
51
|
|
|
36
|
|
Deferred income
taxes
|
(517)
|
|
|
12
|
|
|
(346)
|
|
|
63
|
|
Equity companies'
earnings (in excess of) less than dividends paid
|
(2)
|
|
|
7
|
|
|
(37)
|
|
|
(36)
|
|
(Increase) decrease
in operating working capital
|
29
|
|
|
(5)
|
|
|
(417)
|
|
|
(215)
|
|
Postretirement benefits
|
1,322
|
|
|
21
|
|
|
908
|
|
|
(135)
|
|
Charge for Venezuelan
balance sheet remeasurement
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
Other
|
8
|
|
|
(9)
|
|
|
12
|
|
|
13
|
|
Cash Provided by
Operations
|
772
|
|
|
842
|
|
|
792
|
|
|
1,279
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Capital
spending
|
(243)
|
|
|
(181)
|
|
|
(527)
|
|
|
(439)
|
|
Proceeds from sales
of investments
|
—
|
|
|
92
|
|
|
—
|
|
|
93
|
|
Investments in time
deposits
|
(36)
|
|
|
(75)
|
|
|
(82)
|
|
|
(113)
|
|
Maturities of time
deposits
|
18
|
|
|
25
|
|
|
91
|
|
|
182
|
|
Other
|
16
|
|
|
(8)
|
|
|
(8)
|
|
|
(4)
|
|
Cash Used for
Investing
|
(245)
|
|
|
(147)
|
|
|
(526)
|
|
|
(281)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Cash dividends
paid
|
(321)
|
|
|
(318)
|
|
|
(631)
|
|
|
(627)
|
|
Change in short-term
debt
|
(108)
|
|
|
(375)
|
|
|
183
|
|
|
279
|
|
Debt
proceeds
|
13
|
|
|
615
|
|
|
510
|
|
|
616
|
|
Debt
repayments
|
(40)
|
|
|
(5)
|
|
|
(44)
|
|
|
(106)
|
|
Proceeds from
exercise of stock options
|
41
|
|
|
44
|
|
|
82
|
|
|
81
|
|
Acquisitions of
common stock for the treasury
|
(110)
|
|
|
(476)
|
|
|
(358)
|
|
|
(917)
|
|
Shares purchased from
noncontrolling interest
|
—
|
|
|
—
|
|
|
(151)
|
|
|
—
|
|
Other
|
17
|
|
|
14
|
|
|
5
|
|
|
(7)
|
|
Cash Used for
Financing
|
(508)
|
|
|
(501)
|
|
|
(404)
|
|
|
(681)
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
(3)
|
|
|
10
|
|
|
(48)
|
|
|
(2)
|
|
Increase
(Decrease) in Cash and Cash Equivalents
|
16
|
|
|
204
|
|
|
(186)
|
|
|
315
|
|
Cash and Cash
Equivalents - Beginning of Period
|
587
|
|
|
1,165
|
|
|
789
|
|
|
1,054
|
|
Cash and Cash
Equivalents - End of Period
|
$
|
603
|
|
|
$
|
1,369
|
|
|
$
|
603
|
|
|
$
|
1,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KIMBERLY-CLARK
CORPORATION
|
SELECTED BUSINESS
SEGMENT DATA
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30
|
|
|
|
Six Months
Ended
June 30
|
|
|
|
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
NET
SALES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Care
|
|
$
|
2,306
|
|
|
$
|
2,442
|
|
|
-5.6
|
%
|
|
$
|
4,614
|
|
|
$
|
4,824
|
|
|
-4.4
|
%
|
Consumer
Tissue
|
|
1,499
|
|
|
1,638
|
|
|
-8.5
|
%
|
|
3,073
|
|
|
3,327
|
|
|
-7.6
|
%
|
K-C
Professional
|
|
822
|
|
|
858
|
|
|
-4.2
|
%
|
|
1,617
|
|
|
1,658
|
|
|
-2.5
|
%
|
Corporate &
Other
|
|
16
|
|
|
15
|
|
|
N.M.
|
|
|
30
|
|
|
31
|
|
|
N.M.
|
|
TOTAL NET
SALES
|
|
$
|
4,643
|
|
|
$
|
4,953
|
|
|
-6.3
|
%
|
|
$
|
9,334
|
|
|
$
|
9,840
|
|
|
-5.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Care
|
|
$
|
473
|
|
|
$
|
453
|
|
|
+4.4
|
%
|
|
$
|
928
|
|
|
$
|
910
|
|
|
+2.0
|
%
|
Consumer
Tissue
|
|
260
|
|
|
240
|
|
|
+8.3
|
%
|
|
551
|
|
|
497
|
|
|
+10.9
|
%
|
K-C
Professional
|
|
145
|
|
|
153
|
|
|
-5.2
|
%
|
|
279
|
|
|
288
|
|
|
-3.1
|
%
|
Corporate &
Other(a)
|
|
(90)
|
|
|
(84)
|
|
|
N.M.
|
|
|
(160)
|
|
|
(164)
|
|
|
N.M.
|
|
Other (income) and
expense, net(b)
|
|
1,332
|
|
|
(13)
|
|
|
N.M.
|
|
|
1,394
|
|
|
45
|
|
|
N.M.
|
|
TOTAL OPERATING
PROFIT (LOSS)
|
|
$
|
(544)
|
|
|
$
|
775
|
|
|
N.M.
|
|
|
$
|
204
|
|
|
$
|
1,486
|
|
|
-86.3
|
%
|
|
|
(a)
|
Corporate & Other
includes charges related to the 2014 Organization Restructuring of
$12 and $25 for the three and six months ended June 30, 2015,
respectively, and a charge related to the remeasurement of the
Venezuelan balance sheet of $5 for the six months ended June 30,
2015. In addition, Corporate & Other includes charges related
to the European strategic changes of $2 and $12 for the three and
six months ended June 30, 2014, respectively.
|
|
|
(b)
|
Other (income) and
expense, net includes charges for pension settlements of $1,322 and
$1,331 for the three and six months ended June 30, 2015,
respectively, and a charge related to the remeasurement of the
Venezuelan balance sheet of $40 for the six months ended June 30,
2015.
|
|
|
N.M. – Not
Meaningful
|
Unaudited
|
KIMBERLY-CLARK
CORPORATION
|
SELECTED BUSINESS
SEGMENT DATA
|
|
PERCENTAGE CHANGE IN
NET SALES VERSUS PRIOR YEAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2015
|
|
|
Total
|
|
Volume
|
|
Net
Price
|
|
Mix/
Other(a)
|
|
Currency
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Care
|
|
(5.6)
|
|
|
3
|
|
1
|
|
|
—
|
|
(10)
|
|
Consumer
Tissue
|
|
(8.5)
|
|
|
3
|
|
(2)
|
|
|
—
|
|
(9)
|
|
K-C
Professional
|
|
(4.2)
|
|
|
3
|
|
(1)
|
|
|
3
|
|
(9)
|
|
TOTAL
CONSOLIDATED
|
|
(6.3)
|
|
|
3
|
|
—
|
|
|
1
|
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2015
|
|
|
Total
|
|
Volume
|
|
Net
Price
|
|
Mix/
Other(a)
|
|
Currency
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Care
|
|
(4.4)
|
|
|
4
|
|
1
|
|
|
1
|
|
(10)
|
|
Consumer
Tissue
|
|
(7.6)
|
|
|
2
|
|
(1)
|
|
|
—
|
|
(9)
|
|
K-C
Professional
|
|
(2.5)
|
|
|
3
|
|
—
|
|
|
3
|
|
(8)
|
|
TOTAL
CONSOLIDATED
|
|
(5.1)
|
|
|
3
|
|
—
|
|
|
1
|
|
(9)
|
|
|
|
(a)
|
Mix/Other includes
rounding.
|
|
|
Unaudited
|
KIMBERLY-CLARK
CORPORATION
|
OUTLOOK FOR
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
Range
|
|
|
|
|
|
|
|
ESTIMATED FULL YEAR
2015 DILUTED EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share
|
|
$
|
5.65
|
|
|
-
|
|
$
|
5.80
|
|
Adjustments
for:
|
|
|
|
|
|
|
Charges related to
the 2014 Organization Restructuring
|
|
(0.14)
|
|
|
-
|
|
(0.08)
|
|
Charge for Venezuelan
balance sheet remeasurement
|
|
(0.12)
|
|
|
-
|
|
(0.12)
|
|
Charges for pension
settlements
|
|
(2.28)
|
|
|
-
|
|
(2.23)
|
|
Per share basis –
diluted net income attributable to Kimberly-Clark
Corporation
|
|
$
|
3.11
|
|
|
-
|
|
$
|
3.37
|
|
|
|
|
|
|
|
|
ESTIMATED FULL YEAR
2015 EFFECTIVE TAX RATE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
31.5
|
%
|
|
-
|
|
33.5
|
%
|
Adjustments
for:
|
|
|
|
|
|
|
Charges related to
the 2014 Organization Restructuring
|
|
—
|
|
|
-
|
|
—
|
|
Charge for Venezuelan
balance sheet remeasurement
|
|
0.5
|
|
|
-
|
|
0.5
|
|
Charges for pension
settlements
|
|
(4.9)
|
|
|
-
|
|
(4.7)
|
|
Effective tax
rate
|
|
27.1
|
%
|
|
-
|
|
29.3
|
%
|
[KMB-F]
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SOURCE Kimberly-Clark Corporation