January 23, 2018

Kimberly-Clark Announces Year-End 2017 Results, 2018 Outlook, New Global Restructuring And Multi-Year Cost Savings Target

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










Unaudited

 

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




Unaudited

 

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



2017 Data is Unaudited

 

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



Unaudited

 

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]

 

Kimberly-Clark Corporation logo. (PRNewsFoto/Kimberly-Clark Corporation)

 

 

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SOURCE Kimberly-Clark Corporation

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