DALLAS, Jan. 23, 2018 /PRNewswire/ -- Kimberly-Clark
Corporation (NYSE: KMB) today reported year-end 2017 results and
provided its 2018 outlook. The company also announced a new global
restructuring initiative and established a multi-year savings
target for its ongoing cost savings program.
Executive Summary
- Fourth quarter 2017 net sales of $4.6
billion increased 1 percent compared to the year-ago period
and full-year 2017 net sales of $18.3
billion rose slightly.
- Diluted net income per share for the fourth quarter was
$1.75 in 2017 and $1.40 in 2016. Full-year diluted net income per
share was $6.40 in 2017 and
$5.99 in 2016.
- Fourth quarter adjusted earnings per share were $1.57 in 2017 and $1.45 in 2016. Adjusted earnings per share
exclude certain items described later in this news release.
- Full-year adjusted earnings per share were $6.23 in 2017, up 3 percent compared to
$6.03 in 2016. The company's previous
guidance was for earnings at the low end of the $6.20 to $6.35
range.
- The company has established a cost savings target of more than
$1.5 billion over the 2018 to 2021
time period from its ongoing FORCE (Focused On Reducing Costs
Everywhere) program.
- In addition, the company announced a new 2018 Global
Restructuring Program to reduce the company's structural cost base
by streamlining and simplifying its manufacturing supply chain and
overhead organization. The restructuring is expected to generate
annual cost savings of $500 to
$550 million by the end of 2021 and
accelerate the company's return to delivering its long-term growth
objectives over time.
- Net sales in 2018 are expected to increase 1 to 2 percent.
Diluted net income per share for 2018 is anticipated to be
$3.90 to $4.50, including charges related to the
restructuring. Adjusted earnings per share in 2018 are expected to
be $6.90 to $7.20, a year-on-year increase of approximately
11 to 16 percent.
- The company's Board of Directors has approved a 3.1 percent
increase in the quarterly dividend for 2018, which is the
46th consecutive annual increase in the dividend.
Chairman and Chief Executive Officer Thomas J. Falk said, "In 2017, we delivered
bottom-line growth in a challenging environment. We also achieved
all-time record FORCE cost savings of $450
million and reduced discretionary spending to help offset
inflationary cost headwinds. In addition, we returned $2.3 billion to shareholders through dividends
and share repurchases."
Falk continued, "Although we expect market conditions will
remain challenging in the near-term, we plan to deliver better
results in 2018 while we begin to implement our new restructuring.
We expect organic sales to return to growth while improving our
margins and delivering double-digit growth in adjusted earnings per
share. In addition, we will increase investments in our brands, our
growth initiatives and the capabilities we need for long-term
success. We will also continue to allocate capital in
shareholder-friendly ways."
Falk concluded, "We believe that, over time, our 2018 Global
Restructuring Program will accelerate our return to delivering on
our long-term growth objectives. This is the biggest restructuring
we have undertaken since the introduction of our Global Business
Plan in 2003, and it will make our company leaner, stronger and
faster. The changes we are making will improve our underlying
profitability, provide more flexibility to invest in growth
opportunities and help us compete even more effectively. At the
same time, we are expecting our ongoing FORCE program to continue
to deliver significant results and are making that clear by
establishing a multi-year commitment for this program. Combined,
our restructuring and FORCE programs will generate more than
$2 billion of total cost savings over
the next four years, giving us substantial funds to drive
profitable growth. Today's announcement is the latest example of
Kimberly-Clark's proactive and strategic approach to improving our
business so we can win in the marketplace and create long-term
shareholder value."
Fourth Quarter 2017 Operating Results
Sales of $4.6 billion in the
fourth quarter of 2017 were up 1 percent compared to the year-ago
period. Changes in foreign currency exchange rates benefited sales
by more than 1 percent. Organic sales fell about 1 percent, as
lower net selling prices of 2 percent were partially offset by
improved product mix of 1 percent and slightly higher volumes. In
North America, organic sales were
down 3 percent in consumer products and up 1 percent in K-C
Professional. Outside North
America, organic sales increased 4 percent in developing and
emerging markets but fell 3 percent in developed markets.
Fourth quarter operating profit was $812
million in 2017 and $839 million in 2016. Fourth
quarter adjusted operating profit was $836
million in 2017 and $859
million in 2016. The year-over-year comparison was impacted
by lower net selling prices and $130
million of higher input costs, driven by increases in pulp
and other raw materials. Results benefited from favorable volumes
and product mix, $95 million of cost
savings from the company's FORCE program and reduced marketing,
research and general spending.
The fourth quarter effective tax rate was 19.2 percent in 2017
and 35.7 percent in 2016. The rate in 2017 included a net benefit
as a result of U.S. tax reform and related activities. The fourth
quarter adjusted effective tax rate was 29.7 percent in 2017 and
35.4 percent in 2016.
Kimberly-Clark's share of net income of equity companies in the
fourth quarter was $25 million in
2017 and $29 million in 2016. At
Kimberly-Clark de Mexico, results
were impacted by higher input costs, partially offset by benefits
from sales growth and cost savings.
Cash Flow and Balance Sheet
Cash provided by operations in the fourth quarter was
$863 million in 2017 and
$871 million in 2016. Full-year cash provided by operations
was $2,929 million in 2017 compared
to $3,232 million in 2016. The
decline was in line with expectations and driven by higher tax
payments. Capital spending for the fourth quarter was
$190 million in 2017 and $189 million in 2016. Full-year
spending was $785 million in 2017 and
$771 million in 2016.
Fourth quarter 2017 share repurchases were 0.9 million shares at
a cost of $100 million, bringing
full-year repurchases to 7.2 million shares at a cost of
$900 million. Total debt was
$7.4 billion at the end of 2017 and
$7.6 billion at the end of 2016.
FORCE Cost Savings Target
The company has established a four-year cost savings target of
more than $1.5 billion from its
ongoing FORCE program over the 2018 to 2021 time period. The
savings will further enhance the company's ability to invest in
growth opportunities, offset headwinds and improve gross margin.
The savings will be achieved through a continued focus on improving
productivity at manufacturing facilities, optimizing raw material
and product design costs, generating benefits from procurement
activities and improving distribution efficiencies.
2018 Global Restructuring Program - Overview
The 2018 Global Restructuring Program is expected to reduce
Kimberly-Clark's structural cost base and enhance the company's
flexibility to invest in its brands, growth initiatives and
capabilities critical to delivering future growth. The program will
make Kimberly-Clark's overhead organization structure and
manufacturing supply chain less complex and more efficient. Over
time, the program is expected to accelerate the company's return to
delivering sales and earnings growth in line with its Global
Business Plan objectives and further enhance long-term shareholder
value.
The company expects the program will generate annual pre-tax
cost savings of $500 to $550 million by the end of 2021. Savings will be
driven by workforce reductions, which are anticipated to be in a
range of 5,000 to 5,500 (12 to 13 percent of current headcount),
along with manufacturing supply chain efficiencies. The program is
expected to broadly impact all of the company's business segments
and organizations in each major geography. The savings are
incremental to the company's ongoing FORCE cost savings
program.
The company expects to close or sell approximately 10
manufacturing facilities and expand production capacity at several
others to improve overall scale and cost. As part of the program,
Kimberly-Clark expects to exit or divest some low-margin businesses
that generate approximately 1 percent of company net sales. The
sales are concentrated in the consumer tissue business segment.
To implement the restructuring program, the company expects
total cash spending of $1,500 to
$1,700 million by the end of 2020,
consisting of $900 to $1,000 million in pre-tax cash restructuring
charges and approximately $600 to
$700 million in incremental capital
spending.
The company also expects to incur non-cash restructuring charges
of $800 to $900 million pre-tax by the end of 2020, making
the total expected restructuring charges $1,700 to $1,900
million pre-tax ($1,350 to
$1,500 million after-tax).
Restructuring charges in 2018 are anticipated to be $1,200 to $1,350
million pre-tax ($950 to
$1,050 million after tax). The
company will exclude the restructuring charges when it reports
adjusted results in future periods.
Fourth Quarter 2017 Business Segment Results
Personal Care Segment
Fourth quarter sales of $2.3
billion were up 1 percent. Volumes increased 2 percent and
product mix improved 1 percent, while net selling prices fell 3
percent. In addition, changes in currency rates and the acquisition
of the company's joint venture in India each benefited sales by less than 1
percent. Fourth quarter operating profit of $483 million decreased 2 percent. The comparison
was impacted by lower net selling prices and input cost inflation.
Results benefited from volume growth, improved product mix, cost
savings and reduced marketing, research and general spending.
Sales in North America
decreased 2 percent. Net selling prices declined 4 percent,
including higher promotion spending in most categories, while
volumes increased 2 percent. Adult care volumes rose mid-single
digits, led by gains on the Poise brand. Total volumes in infant
and child care were up low-single digits, driven by growth in
Pull-Ups training pants.
Sales in developing and emerging markets increased 7 percent.
Volumes increased 4 percent and product mix improved 3 percent,
while net selling prices were down 3 percent. In addition, the
acquisition of the company's joint venture in India benefited sales by 2 percent and
currency rates were favorable by 1 percent. The volume increase was
driven by gains in Latin America,
primarily Argentina and
Brazil, and in Eastern Europe.
Sales in developed markets outside North America (Australia, South
Korea and Western/Central
Europe) decreased 5 percent, despite a 2 point benefit
from favorable currency rates. Volumes were down 7 percent, driven
by South Korea. Net selling prices
fell 2 percent, offset by improved product mix.
Consumer Tissue Segment
Fourth quarter sales of $1.5 billion decreased 1 percent. Volumes
and net selling prices each fell 1 percent, while currency rates
were favorable by less than 2 percent. Fourth quarter operating
profit of $258 million decreased 13 percent. The comparison
was impacted by lower sales and input cost inflation, partially
offset by cost savings and reduced marketing, research and general
spending.
Sales in North America
decreased 4 percent. Volumes were down 2 percent, driven by lower
bathroom tissue volumes. Net selling prices fell 2 percent,
reflecting increased promotion spending.
Sales in developing and emerging markets increased 4 percent,
including a 2 point benefit from favorable currency rates. Volumes
increased 3 percent, while the combined impact of changes in net
selling prices and product mix reduced sales by 1 percent.
Sales in developed markets outside North America increased more than 3 percent,
including an approximate 5 point impact from favorable currency
rates. Volumes declined 3 percent, primarily in
Western/Central Europe, while the
combined impact of changes in net selling prices and product mix
benefited sales by 2 percent.
K-C Professional (KCP) Segment
Fourth quarter sales of $0.8
billion increased 3 percent. Changes in currency rates
benefited sales by 2 percent and volumes increased 1 percent.
Fourth quarter operating profit of $151 million increased
3 percent. The comparison benefited from volume growth, cost
savings and lower marketing, research and general spending, mostly
offset by input cost inflation.
Sales in North America
increased 1 percent. Volumes were up 1 percent, including growth in
safety and other product categories.
Sales in developing and emerging markets increased
6 percent, including a 3 point benefit from currency rates.
Volumes were up 3 percent, primarily in China and Latin
America.
Sales in developed markets outside North America were up 6 percent. Currency
rates were favorable by 5 percent and product mix improved 1
percent.
Full Year 2017 Results
Sales of $18.3 billion were up
slightly compared to the year-ago period. Changes in foreign
currency exchange rates benefited sales by less than 1 percent.
Organic sales were similar year-on-year, as volumes increased about
1 percent and product mix improved slightly, while net selling
prices fell more than 1 percent. In North
America, organic sales were down 2 percent in consumer
products and similar year-on-year in K-C Professional. Outside
North America, organic sales
increased 3 percent in developing and emerging markets but fell 3
percent in developed markets.
Operating profit was $3,299
million in 2017 and $3,317
million in 2016. Adjusted operating profit was $3,323 million in 2017 and $3,341 million in 2016. Results were impacted by
lower net selling prices and $355
million of higher input costs. The comparison benefited from
volume growth, $450 million of FORCE
cost savings and lower marketing, research and general
spending.
Diluted net income per share was $6.40 in 2017 and $5.99 in 2016. Adjusted earnings per share of
$6.23 in 2017 increased 3 percent
compared to $6.03 in 2016.
2018 Outlook and Key Planning Assumptions
The company's key planning and guidance assumptions for 2018 are
as follows:
- Net sales increase of 1 to 2 percent.
-
- Organic sales are expected to increase approximately 1 percent,
driven by higher volumes. Changes in net selling prices and product
mix are expected to be similar, or up slightly, year-on-year.
- Changes in foreign currency exchange rates are anticipated to
have a neutral to 1 percent positive impact on net sales, and the
acquisition of the company's joint venture in India should benefit sales slightly.
- Adjusted operating profit growth of 2 to 5 percent.
-
- Cost savings of approximately $400
million from the FORCE program and $50 to $70 million
from the 2018 Global Restructuring Program.
- Inflation in key cost inputs of $300 to $400
million. A majority of the inflation is anticipated to occur
in international markets. In North
America, the company is assuming market prices of
$1,050 to $1,100 per metric ton for eucalyptus pulp and
mid-$50's to low-$60's per barrel for oil.
- Interest expense down approximately 20 percent, including
benefits from redeeming, in December
2017, $500 million of notes
originally due in late 2018.
- Adjusted effective tax rate of 23 to 26 percent.
- Net income from equity companies similar, or up slightly,
year-on-year.
- Adjusted earnings per share of $6.90 to $7.20, up
approximately 11 to 16 percent compared to $6.23 in 2017.
- Capital spending of approximately $1.1
billion.
Dividend increase of 3.1 percent (approved by the Board of
Directors and mentioned previously in this release). The quarterly
dividend will increase to $1.00 per
share, up from $0.97 per share in
2017. The first dividend will be payable on April 3, 2018 to stockholders of record on
March 9, 2018.
- Share repurchases between $0.7
and $0.9 billion, subject to market
conditions.
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
- 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:
- 2018 Global Restructuring Program. Mentioned elsewhere in this
release.
- U.S. tax reform. In the fourth quarter of 2017, the company
recognized a net benefit as a result of U.S. tax reform and related
activities.
- 2014 Organization Restructuring. In October 2014, the company 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. As a result, the
company recognized restructuring charges in 2014, 2015 and
2016.
- Venezuelan operations. In the second quarter of 2016, the
company recorded a modest amount of income related to an updated
assessment of the impact of deconsolidating the company's
Venezuelan business at the end of 2015.
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 adjustments that are used in calculating
these non-GAAP financial measures.
This news release includes information regarding organic sales
growth, which describes the impact of changes in volume, net
selling prices and product mix on net sales. Changes in foreign
currency exchange rates and acquisitions and divestitures also
impact the year-over-year change in net sales.
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 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 146-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 cost savings from
the company's FORCE program, charges and savings from the 2018
Global Restructuring Program, 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 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, 2016
entitled "Risk Factors."
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED INCOME
STATEMENT
|
(Millions, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31
|
|
|
|
2017
|
|
2016
|
|
Change
|
Net
Sales
|
$
|
4,582
|
|
|
$
|
4,544
|
|
|
+1
|
%
|
Cost of products
sold
|
2,984
|
|
|
2,866
|
|
|
+4
|
%
|
Gross
Profit
|
1,598
|
|
|
1,678
|
|
|
-5
|
%
|
Marketing, research
and general expenses
|
759
|
|
|
821
|
|
|
-8
|
%
|
Other (income) and
expense, net
|
27
|
|
|
18
|
|
|
+50
|
%
|
Operating
Profit
|
812
|
|
|
839
|
|
|
-3
|
%
|
Interest
income
|
3
|
|
|
2
|
|
|
+50
|
%
|
Interest
expense
|
(72)
|
|
|
(81)
|
|
|
-11
|
%
|
Income Before
Income Taxes and Equity Interests
|
743
|
|
|
760
|
|
|
-2
|
%
|
Provision for income
taxes
|
(143)
|
|
|
(271)
|
|
|
-47
|
%
|
Income Before
Equity Interests
|
600
|
|
|
489
|
|
|
+23
|
%
|
Share of net income
of equity companies
|
25
|
|
|
29
|
|
|
-14
|
%
|
Net
Income
|
625
|
|
|
518
|
|
|
+21
|
%
|
Net income
attributable to noncontrolling interests
|
(8)
|
|
|
(13)
|
|
|
-38
|
%
|
Net Income
Attributable to Kimberly-Clark Corporation
|
$
|
617
|
|
|
$
|
505
|
|
|
+22
|
%
|
|
|
|
|
|
|
Per Share
Basis
|
|
|
|
|
|
Net Income
Attributable to Kimberly-Clark Corporation
|
|
|
|
|
|
Basic
|
$
|
1.76
|
|
|
$
|
1.41
|
|
|
+25
|
%
|
Diluted
|
$
|
1.75
|
|
|
$
|
1.40
|
|
|
+25
|
%
|
|
|
|
|
|
|
Cash Dividends
Declared
|
$
|
0.97
|
|
|
$
|
0.92
|
|
|
+5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding
|
December
31
|
|
|
|
2017
|
|
2016
|
|
|
Outstanding shares as
of
|
351.1
|
|
|
356.6
|
|
|
|
Average diluted
shares for three months ended
|
353.4
|
|
|
359.6
|
|
|
|
|
|
|
|
|
|
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED INCOME
STATEMENT
|
(Millions, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
December 31
|
|
|
|
2017
|
|
2016
|
|
Change
|
Net
Sales
|
$
|
18,259
|
|
|
$
|
18,202
|
|
|
—
|
|
Cost of products
sold
|
11,706
|
|
|
11,551
|
|
|
+1
|
%
|
Gross
Profit
|
6,553
|
|
|
6,651
|
|
|
-1
|
%
|
Marketing, research
and general expenses
|
3,227
|
|
|
3,326
|
|
|
-3
|
%
|
Other (income) and
expense, net
|
27
|
|
|
8
|
|
|
N.M.
|
|
Operating
Profit
|
3,299
|
|
|
3,317
|
|
|
-1
|
%
|
Interest
income
|
10
|
|
|
11
|
|
|
-9
|
%
|
Interest
expense
|
(318)
|
|
|
(319)
|
|
|
—
|
|
Income Before
Income Taxes and Equity Interests
|
2,991
|
|
|
3,009
|
|
|
-1
|
%
|
Provision for income
taxes
|
(776)
|
|
|
(922)
|
|
|
-16
|
%
|
Income Before
Equity Interests
|
2,215
|
|
|
2,087
|
|
|
+6
|
%
|
Share of net income
of equity companies
|
104
|
|
|
132
|
|
|
-21
|
%
|
Net
Income
|
2,319
|
|
|
2,219
|
|
|
+5
|
%
|
Net income
attributable to noncontrolling interests
|
(41)
|
|
|
(53)
|
|
|
-23
|
%
|
Net Income
Attributable to Kimberly-Clark Corporation
|
$
|
2,278
|
|
|
$
|
2,166
|
|
|
+5
|
%
|
|
|
|
|
|
|
Per Share
Basis
|
|
|
|
|
|
Net Income
Attributable to Kimberly-Clark Corporation
|
|
|
|
|
|
Basic
|
$
|
6.44
|
|
|
$
|
6.03
|
|
|
+7
|
%
|
Diluted
|
$
|
6.40
|
|
|
$
|
5.99
|
|
|
+7
|
%
|
|
|
|
|
|
|
Cash Dividends
Declared
|
$
|
3.88
|
|
|
$
|
3.68
|
|
|
+5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding
|
December
31
|
|
|
|
2017
|
|
2016
|
|
|
Average diluted
shares for twelve months ended
|
355.9
|
|
|
361.7
|
|
|
|
|
|
|
|
|
|
N.M. - Not
Meaningful
|
2017 Data is
Unaudited
|
KIMBERLY-CLARK
CORPORATION
|
|
NON-GAAP
RECONCILIATIONS
|
|
(Millions, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2017
|
|
|
|
As
Reported
|
|
U.S. Tax
Reform
Related
Matters
|
|
As
Adjusted
Non-GAAP
|
|
Other (income) and
expense, net
|
|
$
|
27
|
|
|
$
|
24
|
|
|
$
|
3
|
|
|
Operating
profit
|
|
812
|
|
|
(24)
|
|
|
836
|
|
|
Income before income
taxes and equity interests
|
|
743
|
|
|
(24)
|
|
|
767
|
|
|
Provision for income
taxes
|
|
(143)
|
|
|
85
|
|
|
(228)
|
|
|
Effective tax
rate
|
|
19.2
|
%
|
|
—
|
|
|
29.7
|
%
|
|
Net income
attributable to Kimberly-Clark Corporation
|
|
617
|
|
|
61
|
|
|
556
|
|
|
Diluted earnings per
share(a)
|
|
1.75
|
|
|
0.17
|
|
|
1.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2016
|
|
|
|
As
Reported
|
|
Charges for
2014
Organization
Restructuring
|
|
As
Adjusted
Non-GAAP
|
|
Cost of products
sold
|
|
$
|
2,866
|
|
|
$
|
3
|
|
|
$
|
2,863
|
|
|
Gross
profit
|
|
1,678
|
|
|
(3)
|
|
|
1,681
|
|
|
Marketing, research
and general expenses
|
|
821
|
|
|
17
|
|
|
804
|
|
|
Operating
profit
|
|
839
|
|
|
(20)
|
|
|
859
|
|
|
Income before income
taxes and equity interests
|
|
760
|
|
|
(20)
|
|
|
780
|
|
|
Provision for income
taxes
|
|
(271)
|
|
|
5
|
|
|
(276)
|
|
|
Effective tax
rate
|
|
35.7
|
%
|
|
—
|
|
|
35.4
|
%
|
|
Net income
attributable to Kimberly-Clark Corporation
|
|
505
|
|
|
(15)
|
|
|
520
|
|
|
Diluted earnings per
share(a)
|
|
1.40
|
|
|
(0.04)
|
|
|
1.45
|
|
|
|
(a) "As Adjusted
Non-GAAP" does not equal "As Reported" plus "Adjustments" as a
result of rounding.
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, 2017
|
|
|
|
As
Reported
|
|
U.S. Tax
Reform
Related
Matters
|
|
As
Adjusted
Non-GAAP
|
|
Other (income) and
expense, net
|
|
$
|
27
|
|
|
$
|
24
|
|
|
$
|
3
|
|
|
Operating
profit
|
|
3,299
|
|
|
(24)
|
|
|
3,323
|
|
|
Income before income
taxes and equity interests
|
|
2,991
|
|
|
(24)
|
|
|
3,015
|
|
|
Provision for income
taxes
|
|
(776)
|
|
|
85
|
|
|
(861)
|
|
|
Effective tax
rate
|
|
25.9
|
%
|
|
—
|
|
|
28.6
|
%
|
|
Net income
attributable to Kimberly-Clark Corporation
|
|
2,278
|
|
|
61
|
|
|
2,217
|
|
|
Diluted earnings per
share
|
|
6.40
|
|
|
0.17
|
|
|
6.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, 2016
|
|
|
|
As
Reported
|
|
Charges for
2014
Organization
Restructuring
|
|
Adjustment
Related to
Venezuelan
Operations
|
|
As
Adjusted
Non-GAAP
|
|
Cost of products
sold
|
|
$
|
11,551
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
11,545
|
|
|
Gross
profit
|
|
6,651
|
|
|
(6)
|
|
|
—
|
|
|
6,657
|
|
|
Marketing, research
and general expenses
|
|
3,326
|
|
|
32
|
|
|
—
|
|
|
3,294
|
|
|
Other (income) and
expense, net
|
|
8
|
|
|
(3)
|
|
|
(11)
|
|
|
22
|
|
|
Operating
profit
|
|
3,317
|
|
|
(35)
|
|
|
11
|
|
|
3,341
|
|
|
Income before income
taxes and equity interests
|
|
3,009
|
|
|
(35)
|
|
|
11
|
|
|
3,033
|
|
|
Provision for income
taxes
|
|
(922)
|
|
|
8
|
|
|
—
|
|
|
(930)
|
|
|
Effective tax
rate
|
|
30.6
|
%
|
|
—
|
|
|
—
|
|
|
30.7
|
%
|
|
Net income
attributable to Kimberly-Clark Corporation
|
|
2,166
|
|
|
(27)
|
|
|
11
|
|
|
2,182
|
|
|
Diluted earnings per
share
|
|
5.99
|
|
|
(0.07)
|
|
|
0.03
|
|
|
6.03
|
|
|
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED BALANCE
SHEET
|
(Millions)
|
|
|
|
|
|
|
|
|
|
December
31
|
|
2017
|
|
2016
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
616
|
|
|
$
|
923
|
|
Accounts receivable,
net
|
2,315
|
|
|
2,176
|
|
Inventories
|
1,790
|
|
|
1,679
|
|
Other current
assets
|
490
|
|
|
337
|
|
Total Current
Assets
|
5,211
|
|
|
5,115
|
|
Property, Plant
and Equipment, Net
|
7,436
|
|
|
7,169
|
|
Investments in
Equity Companies
|
233
|
|
|
257
|
|
Goodwill
|
1,576
|
|
|
1,480
|
|
Other
Assets
|
695
|
|
|
581
|
|
TOTAL
ASSETS
|
$
|
15,151
|
|
|
$
|
14,602
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Debt payable within
one year
|
$
|
953
|
|
|
$
|
1,133
|
|
Trade accounts
payable
|
2,834
|
|
|
2,609
|
|
Accrued
expenses
|
1,730
|
|
|
1,775
|
|
Dividends
payable
|
341
|
|
|
329
|
|
Total Current
Liabilities
|
5,858
|
|
|
5,846
|
|
Long-Term
Debt
|
6,472
|
|
|
6,439
|
|
Noncurrent
Employee Benefits
|
1,184
|
|
|
1,301
|
|
Deferred Income
Taxes
|
395
|
|
|
532
|
|
Other
Liabilities
|
299
|
|
|
309
|
|
Redeemable
Preferred Securities of Subsidiaries
|
61
|
|
|
58
|
|
Stockholders'
Equity (Deficit)
|
|
|
|
Kimberly-Clark
Corporation
|
629
|
|
|
(102)
|
|
Noncontrolling
Interests
|
253
|
|
|
219
|
|
Total
Stockholders' Equity
|
882
|
|
|
117
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
15,151
|
|
|
$
|
14,602
|
|
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED CASH
FLOW STATEMENT
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31
|
|
Twelve Months
Ended
December 31
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income
|
$
|
625
|
|
|
$
|
518
|
|
|
$
|
2,319
|
|
|
$
|
2,219
|
|
Depreciation and
amortization
|
184
|
|
|
177
|
|
|
724
|
|
|
705
|
|
Stock-based
compensation
|
12
|
|
|
13
|
|
|
76
|
|
|
77
|
|
Deferred income
taxes
|
(28)
|
|
|
(2)
|
|
|
(69)
|
|
|
(15)
|
|
Equity companies'
earnings (in excess of) less than dividends paid
|
38
|
|
|
27
|
|
|
26
|
|
|
(4)
|
|
Operating working
capital
|
6
|
|
|
185
|
|
|
(148)
|
|
|
334
|
|
Postretirement
benefits
|
3
|
|
|
(54)
|
|
|
2
|
|
|
(50)
|
|
Other
|
23
|
|
|
7
|
|
|
(1)
|
|
|
(34)
|
|
Cash Provided by
Operations
|
863
|
|
|
871
|
|
|
2,929
|
|
|
3,232
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Capital
spending
|
(190)
|
|
|
(189)
|
|
|
(785)
|
|
|
(771)
|
|
Investments in time
deposits
|
(91)
|
|
|
(88)
|
|
|
(214)
|
|
|
(221)
|
|
Maturities of time
deposits
|
113
|
|
|
124
|
|
|
183
|
|
|
188
|
|
Other
|
(6)
|
|
|
(3)
|
|
|
(35)
|
|
|
72
|
|
Cash Used for
Investing
|
(174)
|
|
|
(156)
|
|
|
(851)
|
|
|
(732)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Cash dividends
paid
|
(342)
|
|
|
(330)
|
|
|
(1,359)
|
|
|
(1,311)
|
|
Change in short-term
debt
|
249
|
|
|
(71)
|
|
|
360
|
|
|
(908)
|
|
Debt
proceeds
|
—
|
|
|
3
|
|
|
937
|
|
|
1,293
|
|
Debt
repayments
|
(509)
|
|
|
(2)
|
|
|
(1,481)
|
|
|
(598)
|
|
Proceeds from
exercise of stock options
|
7
|
|
|
10
|
|
|
121
|
|
|
107
|
|
Acquisitions of
common stock for the treasury
|
(107)
|
|
|
(227)
|
|
|
(911)
|
|
|
(739)
|
|
Other
|
(39)
|
|
|
(31)
|
|
|
(88)
|
|
|
(29)
|
|
Cash Used for
Financing
|
(741)
|
|
|
(648)
|
|
|
(2,421)
|
|
|
(2,185)
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
13
|
|
|
(28)
|
|
|
36
|
|
|
(11)
|
|
Change in Cash and
Cash Equivalents
|
(39)
|
|
|
39
|
|
|
(307)
|
|
|
304
|
|
Cash and Cash
Equivalents - Beginning of Period
|
655
|
|
|
884
|
|
|
923
|
|
|
619
|
|
Cash and Cash
Equivalents - End of Period
|
$
|
616
|
|
|
$
|
923
|
|
|
$
|
616
|
|
|
$
|
923
|
|
KIMBERLY-CLARK
CORPORATION
|
SELECTED BUSINESS
SEGMENT DATA
|
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31
|
|
|
|
Twelve Months
Ended December 31
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
NET
SALES
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Care
|
|
$
|
2,274
|
|
|
$
|
2,248
|
|
|
+1
|
%
|
|
$
|
9,078
|
|
|
$
|
9,046
|
|
|
—
|
|
Consumer
Tissue
|
|
1,496
|
|
|
1,505
|
|
|
-1
|
%
|
|
5,932
|
|
|
5,967
|
|
|
-1
|
%
|
K-C
Professional
|
|
803
|
|
|
779
|
|
|
+3
|
%
|
|
3,208
|
|
|
3,150
|
|
|
+2
|
%
|
Corporate &
Other
|
|
9
|
|
|
12
|
|
|
N.M.
|
|
|
41
|
|
|
39
|
|
|
N.M.
|
|
TOTAL NET
SALES
|
|
$
|
4,582
|
|
|
$
|
4,544
|
|
|
+1
|
%
|
|
$
|
18,259
|
|
|
$
|
18,202
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Care
|
|
$
|
483
|
|
|
$
|
495
|
|
|
-2
|
%
|
|
$
|
1,907
|
|
|
$
|
1,857
|
|
|
+3
|
%
|
Consumer
Tissue
|
|
258
|
|
|
295
|
|
|
-13
|
%
|
|
1,034
|
|
|
1,117
|
|
|
-7
|
%
|
K-C
Professional
|
|
151
|
|
|
146
|
|
|
+3
|
%
|
|
633
|
|
|
603
|
|
|
+5
|
%
|
Corporate &
Other(a)
|
|
(53)
|
|
|
(79)
|
|
|
N.M.
|
|
|
(248)
|
|
|
(252)
|
|
|
N.M.
|
|
Other (income) and
expense, net(a)
|
|
27
|
|
|
18
|
|
|
+50
|
%
|
|
27
|
|
|
8
|
|
|
N.M.
|
|
TOTAL OPERATING
PROFIT
|
|
$
|
812
|
|
|
$
|
839
|
|
|
-3
|
%
|
|
$
|
3,299
|
|
|
$
|
3,317
|
|
|
-1
|
%
|
|
|
(a)
|
Corporate & Other
and Other (income) and expense, net include income and expense not
associated with the business segments, including adjustments as
indicated in the Non-GAAP Reconciliations.
|
|
|
PERCENTAGE CHANGE
IN NET SALES VERSUS PRIOR YEAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2017
|
|
|
Total(a)
|
|
Volume
|
|
Net
Price
|
|
Mix/
Other
|
|
Acquisition
|
|
Currency
|
|
|
Organic(b)
|
Personal
Care
|
|
1
|
|
|
2
|
|
|
(3)
|
|
|
1
|
|
|
1
|
|
1
|
|
|
—
|
|
Consumer
Tissue
|
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
2
|
|
|
(2)
|
|
K-C
Professional
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2
|
|
|
1
|
|
TOTAL
CONSOLIDATED
|
|
1
|
|
|
—
|
|
|
(2)
|
|
|
1
|
|
|
—
|
|
1
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, 2017
|
|
|
Total(a)
|
|
Volume
|
|
Net
Price
|
|
Mix/
Other
|
|
Acquisition
|
|
Currency
|
|
|
Organic(b)
|
Personal
Care
|
|
—
|
|
|
1
|
|
|
(2)
|
|
|
1
|
|
|
—
|
|
1
|
|
|
(1)
|
|
Consumer
Tissue
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
1
|
|
|
(1)
|
|
K-C
Professional
|
|
2
|
|
|
1
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
1
|
|
|
1
|
|
TOTAL
CONSOLIDATED
|
|
—
|
|
|
1
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
1
|
|
|
—
|
|
|
|
(a)
|
Total may not equal
the sum of volume, net price, mix/other, acquisition and currency
due to rounding.
|
(b)
|
Combined impact of
changes in volume, net price and mix/other.
|
|
|
N.M. - Not
Meaningful
|
Unaudited
|
KIMBERLY-CLARK
CORPORATION
|
NON-GAAP
RECONCILIATIONS
|
OUTLOOK FOR
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
Range
|
ESTIMATED FULL
YEAR 2018 DILUTED EARNINGS PER SHARE
|
|
|
|
|
|
|
Adjusted earnings per
share
|
|
$
|
6.90
|
|
|
-
|
|
$
|
7.20
|
|
Adjustment for
charges related to the 2018 Global Restructuring Program
|
|
(3.00)
|
|
|
-
|
|
(2.70)
|
|
Per share basis –
diluted net income attributable to Kimberly-Clark
Corporation
|
|
$
|
3.90
|
|
|
-
|
|
$
|
4.50
|
|
|
|
|
|
|
|
|
|
|
|
ESTIMATED FULL
YEAR 2018 EFFECTIVE TAX RATE
|
|
|
|
|
|
|
Adjusted effective
tax rate
|
|
23
|
%
|
|
-
|
|
26
|
%
|
Adjustment for
charges related to the 2018 Global Restructuring Program
|
|
1
|
|
|
-
|
|
1
|
|
Effective tax
rate
|
|
24
|
%
|
|
-
|
|
27
|
%
|
[KMB-F]
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multimedia:http://www.prnewswire.com/news-releases/kimberly-clark-announces-year-end-2017-results-2018-outlook-new-global-restructuring-and-multi-year-cost-savings-target-300586347.html
SOURCE Kimberly-Clark Corporation