FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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Commission file number 1-225
KIMBERLY-CLARK CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 39-0394230
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. BOX 619100, DALLAS, TEXAS 75261-9100
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 281-1200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock - $1.25 Par Value; Preferred Share New York Stock Exchange
Purchase Rights Chicago Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X . No
--------- -------.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of March 19, 1996, 283,009,657, shares of common stock were outstanding, and
the aggregate market value of the registrant's common stock held by non-
affiliates on such date (based on the closing stock price on the New York
Stock Exchange) was approximately $22,180 million.
DOCUMENTS INCORPORATED BY REFERENCE
Kimberly-Clark Corporation's 1995 Annual Report to Stockholders and 1996
Proxy Statement contain much of the information required in this Form 10-K,
and portions of those documents are incorporated by reference herein from the
applicable sections thereof. The following table identifies the sections of
this Form 10-K which incorporate by reference portions of the Corporation's
1995 Annual Report to Stockholders and 1996 Proxy Statement. The Items of
this Form 10-K, where applicable, specify which portions of such documents
are incorporated by reference. The portions of such documents that are not
incorporated by reference shall not be deemed to be filed with the Commission
as part of this Form 10-K.
DOCUMENT OF WHICH PORTIONS ITEMS OF THIS FORM 10-K
ARE INCORPORATED BY REFERENCE IN WHICH INCORPORATED
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1995 Annual Report to Stockholders PART I
(Year ended December 31, 1995) ITEM 1. Business
ITEM 3. Legal Proceedings
PART II
ITEM 5. Market for the Registrant's
Common Stock and Related Stockholder
Matters
ITEM 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations
ITEM 8. Financial Statements and
Supplementary Data
PART IV
ITEM 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K
1996 Proxy Statement PART III
ITEM 10. Directors and Executive
Officers of the Registrant
ITEM 11. Executive Compensation
ITEM 12. Security Ownership of
Certain Beneficial Owners and
Management
ITEM 13. Certain Relationships and
Related Transactions
PART I
ITEM 1. BUSINESS
Kimberly-Clark Corporation was incorporated in Delaware in 1928. As used in
Items 1, 2 and 7 of this Form 10-K, the term "Corporation" refers to Kimberly-
Clark Corporation and its consolidated subsidiaries. In the remainder of this
Form 10-K, the terms "Kimberly-Clark" or "Corporation" refer to Kimberly-Clark
Corporation.
On December 12, 1995, Scott Paper Company, a Pennsylvania corporation
(`Scott''), became a wholly-owned subsidiary of Kimberly-Clark upon
consummation of the merger (the `Merger'') contemplated by the Agreement and
Plan of Merger dated as of July 16, 1995 (the `Merger Agreement'') among
Kimberly-Clark, Rifle Merger Co., a wholly-owned subsidiary of Kimberly-
Clark, and Scott. Pursuant to the Merger Agreement, each Scott common share,
without par value, outstanding immediately prior to the Effective Time (as
defined in the Merger Agreement) of the Merger (other than shares owned
directly or indirectly by Kimberly-Clark or Scott, which shares were canceled)
was converted into .78 of a share of common stock, $1.25 par value, of
Kimberly-Clark (`Kimberly-Clark Common Stock''), including the corresponding
percentage of a right to purchase shares of Series A Junior Participating
Preferred Stock, without par value, of Kimberly-Clark. On February 14, 1996,
Scott changed its name to Kimberly-Clark Tissue Company.
On November 30, 1995, Kimberly-Clark distributed to its stockholders all of
the outstanding shares of common stock of Schweitzer-Mauduit International,
Inc. (`SMI''). SMI was formed in 1995 to facilitate the spin-off of
Kimberly-Clark's tobacco-related paper and other specialty paper products
businesses conducted in the United States, France and Canada.
On September 27, 1995, the Corporation sold 80 percent of the outstanding
shares of Midwest Express Holdings, Inc., the parent company of Midwest
Express Airlines, Inc. and Astral Aviation, Inc., in an initial public
offering.
Financial information by business segment and geographic area, and information
about principal products and markets of the Corporation, contained under the
caption "Management's Discussion and Analysis" and in Note 17 to the Financial
Statements contained in the 1995 Annual Report to Stockholders, are
incorporated in this Item 1 by reference.
DESCRIPTION OF THE CORPORATION. The Corporation is principally engaged in the
manufacturing and marketing throughout the world of a wide range of products
for personal, business and industrial uses. Most of these products are made
from natural and synthetic fibers using advanced technologies in absorbency,
fibers and nonwovens.
The Corporation's products and services are divided into three business
segments: Personal Care Products, Tissue-Based Products and Newsprint, Paper
and Other.
Personal Care Products include disposable diapers, training and youth pants;
feminine and adult incontinence care products; wet wipes; health care
products; and related products. Products in this class are sold under a
variety of well-known brand names, including Huggies, Pull-Ups, GoodNites,
Kotex, New Freedom, Lightdays, Depend and Poise.
Tissue-Based Products include facial and bathroom tissue, paper towels and
wipers for household and away-from-home use; pulp; and related products.
Products in this class are sold under the recognized brand names Kleenex,
Scott, Cottonelle, Viva, Kimwipes and Wypall.
Products for home use are sold directly and through wholesalers to
supermarkets, mass merchandisers, drugstores, warehouse clubs, home health
care stores, variety stores, department stores and other retail outlets.
Health care products are sold to distributors, converters and end-users.
Products for away-from-home use are sold through distributors and directly to
manufacturing, lodging, office building, food service and health care
establishments and other high volume public facilities.
Newsprint, Paper and Other includes newsprint, printing papers, premium
business and correspondence papers, specialty papers, technical papers, and
related products; and other products and services.
Newsprint and groundwood printing papers are sold directly to newspaper pub-
lishers and commercial printers. Other papers and specialty products in this
class are sold directly to users, converters, manufacturers, publishers and
printers, and through paper merchants, brokers, sales agents and other resale
agencies.
PATENTS AND TRADEMARKS. The Corporation owns various patents and trademarks
registered domestically and in certain foreign countries. The Corporation
considers the patents and trademarks which it owns and the
trademarks under which it sells certain of its products, in each instance and
in the aggregate, to be material to its business. Consequently, the
Corporation seeks patent and trademark protection by all available means,
including registration. A partial list of the Corporation's trademarks is
included under the caption "Trademarks" contained in the 1995 Annual Report to
Stockholders and is incorporated herein by reference.
EMPLOYEES. In its worldwide consolidated operations, the Corporation had
55,341 employees as of December 31, 1995.
RAW MATERIALS. Cellulose fibers in the form of wood pulp are the primary raw
materials for the Corporation's paper and tissue products and are important
components in disposable diapers, training pants, feminine pads and
incontinence care products. Large amounts of secondary and recycled fibers
are also consumed, primarily in tissue products. Superabsorbent materials are
important components in disposable diapers, training pants and incontinence
care products. Polypropylene and other synthetics are primary raw materials
for manufacturing nonwoven fabrics which are used in disposable diapers,
training pants, feminine pads, incontinence and health care products and away-
from-home wipers. Most secondary fibers and all synthetics are purchased.
Wood pulp and nonwood cellulose fibers are produced by the Corporation and
purchased from others. The Corporation considers the supply of such raw
materials to be adequate to meet the needs of its businesses.
For its worldwide consolidated operations, production at the Corporation's
pulp mills at Coosa Pines and Mobile, Alabama; Everett, Washington; Terrace
Bay, Ontario; Pictou, Nova Scotia; and Miranda, Spain totaled about 80 percent
of the Corporation's 1995 virgin fiber requirements for products other than
newsprint. The Corporation's newsprint mill at Coosa Pines produces all of its
own fiber requirements, of which virgin fiber represented approximately 73
percent in 1995.
The Corporation owns or controls 6.9 million acres of forestland in North
America, principally as a fiber source for pulp production which is consumed
internally within the tissue and personal care businesses. In the United
States, approximately .9 million acres are owned in Alabama and Mississippi.
In Canada, 1.0 million acres in the province of Nova Scotia are owned by the
Corporation, and 5.0 million acres, principally in the province of Ontario,
are held under long-term Crown rights or leases.
Certain states have adopted laws and entered into agreements with publishers
requiring newspapers sold in such states to contain specified amounts of
recycled paper. The Corporation provides certain newspaper publishers with
newsprint containing specified amounts of recycled paper.
COMPETITION. The Corporation competes in numerous domestic and foreign
markets. The number of competitors and the Corporation's competitive
positions in these markets vary. In general, in the sale of its products, the
Corporation faces strong competition from other manufacturers, some of which
are larger and more diversified than the Corporation. The Corporation has
several major competitors in its disposable diaper and training pants,
household and other tissue-based products, and feminine and incontinence care
products businesses.
Depending on the characteristics of the market involved, the Corporation com-
petes on the basis of product quality and performance, price, service, packa-
ging, distribution, advertising and promotion.
RESEARCH AND DEVELOPMENT. A major portion of total research and development
expenditures is directed toward new or improved personal care, health care and
household products, and nonwoven materials. Consolidated research and
development expenditures were $207.2 million in 1995, $208.8 million in 1994
and $208.7 million in 1993.
ENVIRONMENTAL MATTERS. Capital expenditures for environmental controls to
meet legal requirements and otherwise relating to the protection of the
environment at the Corporation's facilities in the United States are estimated
to be $46.7 million in 1996 and $135.2 million in 1997. Such expenditures are
not expected to have a material effect on the Corporation's total capital
expenditures, consolidated earnings or competitive position; however, these
estimates could be modified as a result of changes in the Corporation's plans,
changes in legal requirements or other factors.
Capital expenditures at the Corporation's U.S. facilities for 1998, 1999 and
2000 are expected to be affected by finalization of the U.S. Environmental
Protection Agency's (`EPA'') proposed Cluster Rules. If finalized as
proposed, these rules would require significant additional expenditures for
environmental controls at the Corporation's Coosa Pines and Mobile, Alabama,
and Everett, Washington, pulp mills and at various other tissue and paper
production facilities in the United States. Based on currently available
information, total capital expenditures required to meet the Cluster Rule
requirements over the three-year period following their planned finalization
in late 1996 or early 1997 are estimated at between $275 million and $395
million. However, the nature, amount and timing of these expenditures could
change significantly based on the provisions of EPA's final rules. Neither
the Cluster Rule expenditures nor other anticipated environmental capital
spending at the Corporation's U.S. facilities during this time period are
expected to have a material adverse effect on the Corporation's business or
results of operations.
RISKS FOR FOREIGN OPERATIONS. The Corporation and its equity companies have
manufacturing facilities in
33 countries throughout the world. Consumer products made abroad or in the
U.S. are marketed in approximately 150 countries. Because these countries are
so numerous, it is not feasible to generally characterize the risks involved.
Such risks vary from country to country and include such factors as tariffs,
trade restrictions, changes in currency value, economic conditions and
international relations. See "Management's Discussion and Analysis -- Foreign
Currencies Risks, Hedging Activities and Inflation Risks" contained in the
1995 Annual Report to Stockholders, which is incorporated herein by reference.
INSURANCE. The Corporation maintains coverage consistent with industry
practice for most risks that are incident to its operations.
ITEM 2. PROPERTIES
Management believes that the Corporation's production facilities are suitable
for their purpose and adequate to support its businesses. The extent of
utilization of individual facilities varies, but they operate at or near
capacity, except in certain instances such as when new products or technology
are being introduced. New facilities of the Corporation are under construc-
tion and others are being expanded. Various facilities contain pollution
control, solid waste disposal and other equipment which have been financed
through the issuance of industrial revenue or similar bonds and are held by
the Corporation under lease or installment purchase agreements.
Principal facilities and products made at these facilities are listed on the
following pages. In addition, the principal facilities of the Corporation's
equity companies and the products or groups of products made at such
facilities are included on the following pages.
HEADQUARTERS LOCATIONS
Dallas, Texas
Roswell, Georgia
Neenah, Wisconsin
Reigate, United Kingdom
Bangkok, Thailand
ADMINISTRATIVE CENTER
Knoxville, Tennessee
WORLDWIDE PRODUCTION AND SERVICE FACILITIES
UNITED STATES (1)
ALABAMA
Coosa Pines - pulp and newsprint
Mobile - tissue products and pulp (2)
ARIZONA
Tucson - nonwovens
Mohave - tissue products
ARKANSAS
Conway - feminine care, incontinence care, nonwovens
Maumelle - wet wipes, nonwovens
CALIFORNIA
Fullerton - tissue products
CONNECTICUT
New Milford - diapers, feminine care, tissue products
Shelton - aviation personnel services
DELAWARE
Dover - wet wipes (3)
GEORGIA
LaGrange - nonwovens
KENTUCKY
Owensboro - tissue products
MAINE
Winslow - tissue products (4)
MASSACHUSETTS
Lee - industrial wipers (5)
Westfield - aircraft maintenance, finishing and refurbishing
MICHIGAN
Munising - printing and base papers
MISSISSIPPI
Corinth - nonwovens, away-from-home wipers and towels
Hattiesburg - tissue products
NEW JERSEY
Montvale - corporate aircraft management services
South Hackensack - corporate aircraft management services
NEW YORK
Fort Edward - tissue products
Islip - corporate aircraft management services
NORTH CAROLINA
Hendersonville - nonwovens
Lexington - nonwovens
OKLAHOMA
Jenks - tissue products
PENNSYLVANIA
Chester - tissue products
SOUTH CAROLINA
Beech Island - diapers, tissue products
TENNESSEE
Loudon - tissue products
TEXAS
Dallas - aircraft maintenance, finishing and refurbishing
Paris - diapers, training and youth pants
San Antonio - personal cleansing products and systems
UTAH
Ogden - diapers
VERMONT
East Ryegate - technical papers
WASHINGTON
Everett - tissue products, pulp
WISCONSIN
Appleton - aircraft maintenance, finishing and refurbishing
Marinette - tissue products
Neenah - diapers, feminine care, incontinence care, business and
correspondence papers, industrial wipers, nonwovens, tissue products
Oconto Falls - tissue products
Whiting - business and correspondence papers
OUTSIDE THE UNITED STATES
ARGENTINA
Cordoba - diapers
Pilar - feminine care, incontinence care
San Luis - diapers
AUSTRALIA
*Albury - nonwovens
*Ingleburn - diapers
*Lonsdale - diapers, incontinence care, feminine care
*Millicent - tissue products
*Tantanoola - pulp
*Warwick Farm - tissue products
* Equity company production facility
BAHRAIN
*East Riffa - tissue products
BELGIUM
Duffel - tissue products
CANADA
Crabtree, Quebec - tissue products
Hull, Quebec - tissue products
Huntsville, Ontario - tissue products, away-from-home wipers
Lennoxville, Quebec - tissue products
New Glasgow, Nova Scotia - pulp
New Westminster, British Columbia - tissue products
Rexdale, Ontario - away from home products, feminine care
St. Catharines, Ontario - tissue products, away-from-home wipers
St. Hyacinthe, Quebec - feminine care, diapers
Terrace Bay, Ontario - pulp
CHINA (6)
Beijing - feminine care
Changchun - feminine care
Chengdu - feminine care
Guangzhou Province - tissue products
Guiyang - feminine care
Handan - feminine care
Harbin - feminine care
Kunming - feminine care
Nanjing - feminine care
Shanghai - tissue products
Shenyang - feminine care
Taiyuan - feminine care
COLOMBIA
*Barbosa - tissue products, specialty products, fine papers
*Guarne - tissue products
*Pereira - tissue products, feminine care, incontinence care, diapers
*Tocancipa - diapers
COSTA RICA
Cartago - diapers
San Jose - tissue products
CZECH REPUBLIC
Litovel - feminine care
EL SALVADOR
Sitio del Nino - tissue products, feminine care
FRANCE
Orleans - tissue products
Rouen - tissue products
Villey-Saint-Etienne - tissue products
GERMANY
Dusseldorf - Reisholz - tissue products
Flensburg - tissue products
Forchheim - feminine care
Koblenz - tissue products
Neunkirchen - wet wipes
* Equity company production facility
HONDURAS
Cortes - nonwovens
San Pedro Sula - tissue products, feminine care
HONG KONG
Hong Kong - tissue products (7)
INDIA
*Pune - feminine care, diapers
Pune - tissue products
INDONESIA
Jog-Jakarta - tissue products
*Medan - specialty products
ITALY
Alanno - tissue products
Romagnano - tissue products
Villanovetta - tissue products
KOREA
Anyang - feminine care, diapers, tissue products
*Jo-Chi-Weon - tissue products
Kimcheon - feminine care, tissue products, nonwovens
Taejon - feminine care, diapers
MALAYSIA
Kluang - tissue products
Petaling Jaya - feminine care, tissue products
MEXICO
*Bajio - tissue products
*Cepamisa - tissue products
*Cuautitlan - feminine care, diapers, nonwovens
*Ecatepec - tissue products
Empalme - nonwovens
Magdalena - nonwovens
*Naucalpan - tissue products, diapers, feminine care
Nogales - nonwovens
*Orizaba - tissue products
*Ramos Arizpe - tissue products, diapers
*San Juan - tissue products
*San Rafael - tissue products, fine papers
Santa Ana - nonwovens
*Tlaxcala - diapers
NETHERLANDS
Gennep - tissue products
Veenendaal - feminine care, incontinence care
PANAMA
Panama City - tissue products, feminine care
PERU
Lima - tissue products, feminine care
PHILIPPINES
San Pedro, Laguna - feminine care, diapers, tissue products, specialty papers
SAUDI ARABIA
*Al-Khobar - diapers, feminine care, tissue products
SINGAPORE
Singapore - feminine care, tissue products
* Equity company production facility.
SOUTH AFRICA
Cape Town - tissue products, feminine care
Springs - tissue products, feminine care, diapers, incontinence care
Wadeville - tissue products, nonwovens
SPAIN
Aranguren - tissue products
Arceniaga - tissue products, personal cleansing products and systems
Canarias, Canary Islands - tissue products
Miranda del Ebro - pulp
Salamanca - tissue products
TAIWAN
Hsin Ying - tissue products (8)
Tayaun - tissue products
THAILAND
Patumthanee - feminine care, diapers, tissue products
Samut Prakan - tissue products
UNITED KINGDOM
Barrow - tissue products
Barton-upon-Humber - diapers, training pants
Flint - tissue products, nonwovens
Larkfield - tissue products
Northfleet - tissue products
Prudhoe - tissue products, away-from-home wipers (3)
Sealand - feminine care
VENEZUELA
Guacara - diapers
(1)The Corporation has announced its intention to sell two of the following
four tissue mills: Badger-Globe, Lakeview and Marinette, Wisconsin; and
Fort Edward, New York. The Badger-Globe and Lakeview facilities are part
of the Neenah, Wisconsin operations.
(2)Portions of the land under this facility are held under various long-term
operating leases, the more significant of which contain options to purchase
the land.
(3) The Corporation has announced its intention to sell this facility.
(4)The fiber recycling facility at this mill is held under an operating lease
expiring in 2008 under which the Corporation has the option of renewing the
lease for terms not exceeding nine additional years or purchasing the
facility for its then fair market value.
(5) In connection with the SMI spin-off, the Corporation continues to own a
paper machine incorporating hydroknit manufacturing technology which is
located at one of the Corporation's former Lee, Massachusetts facilities.
On or before November 30, 2000, the Corporation will remove such technology
and sell the remaining components of the machine to SMI for a nominal
purchase price.
(6)The land on which these facilities are located is held under long-term
leases.
(7) This facility is held under a short-term renewable lease.
(8) The land and a portion of this facility are subject to a mortgage.
ITEM 3. LEGAL PROCEEDINGS
The following is a brief description of potentially material legal proceedings
to which the Corporation or any of its subsidiaries is a party or of which any
of their properties is subject:
Litigation
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A. Since September 28, 1990, numerous lawsuits related to exposure to
asbestos have been filed in state and federal courts by over 8,500
plaintiffs against multiple defendants, including the Corporation. During
this period, the asbestos litigation against the Corporation has been
consolidated into seven actions that include approximately 500 claims
against the Corporation. The plaintiffs allege, with respect to the
Corporation, that they sustained personal injuries and/or emotional
distress from alleged exposure to asbestos-containing materials while
working at the Corporation's Coosa Pines, Ala. mill as employees of
independent contractors at various times since the mill's construction and
that, in its capacity as a premises owner, the Corporation is responsible,
in part, for these injuries.
In 1995, the Corporation settled four of these actions and obtained
releases and dismissals with prejudice from 374 plaintiffs with claims
against the Corporation, and dismissals, without prejudice, from
approximately 4,000 other plaintiffs. There are approximately 4,500
plaintiffs in the actions that remain pending. Of these plaintiffs, an
unspecified number (not believed to exceed 250), have identified their
claims as based, in whole or in part, on having worked at the
Corporation's Coosa Pines, Ala. mill. The complaints do not specify the
amount of damages demanded.
The Corporation believes that its defenses to the remaining asbestos
claims are meritorious and that the final results of such claims, while
they cannot be predicted with certainty, will not have a material adverse
effect on the Corporation's business or results of operations.
B. Scott is a defendant in numerous actions in state and federal courts
seeking damages relating to breast implants. The actions allege that the
plaintiffs' breast implants were covered by polyurethane foam manufactured
by Scott's former Foam Division, which was sold in 1983, and that the foam
caused physical and/or psychological harm to the plaintiffs. In each of
these actions, Scott is one of several defendants, including the Foam
Division's successor and the manufacturers of the implants. The
Corporation believes that only a small percentage of breast implants were
covered by polyurethane foam manufactured by the Foam Division prior to
its sale.
Pursuant to an order of the Mutidistrict Litigation Panel, all federal
cases involving breast implants have been consolidated for pre-trial
purposes in the Northern District of Alabama and one of these cases,
Lindsey et al., vs. Dow Corning Corporation et al., has been provisionally
--------------------------------------------------
certified by the court as a class action for settlement purposes. Scott
elected not to participate in the proposed settlement of these actions;
rather, in April 1995, Scott's motion for summary judgment was granted by
the court, resulting in the dismissal of all federal actions against Scott
and the purchaser of the Foam Division. In January 1996, the plaintiffs
agreed to dismiss their appeal of such dismissal. A similar motion for
summary judgment was granted in 1995 in the consolidated California state
court breast implant suits, and that dismissal is now final because the
plaintiffs failed to file an appeal.
The Corporation believes that it has meritorious defenses to the remaining
breast implant claims and that the final results of such claims, while
they cannot be predicted with certainty, will not have a material adverse
effect on the Corporation's business or results of operations.
C. On July 18, 1995, a complaint was filed by Doris I. Fish and Debra Smilow
(the ``Fish Complaint'') on behalf of a putative class of the public
shareholders of Scott in the Circuit Court for the Fifteenth Judicial
Circuit, Palm Beach County, Florida (Case No. CL 95-5691 AD) against
Scott, certain former members of the Scott board of directors and certain
former officers of Scott. The Fish Complaint alleged, among other things,
that the former Scott directors acted in disregard of their fiduciary
duties to Scott shareholders in agreeing to the Merger. On January 17,
1996, the proceedings under this action were dismissed without prejudice.
On July 21, 1995, a complaint was filed by Louis Agnes (the ``Agnes
Complaint'') on behalf of a putative class of the public shareholders of
Scott, and derivatively on behalf of Scott, in the Circuit Court for the
Fifteenth Judicial Circuit, Palm Beach County, Florida (Case No. CL 95-
5757 AH) against Scott, the former members of the Scott board of directors
and Kimberly-Clark. The Agnes Complaint alleged, among other things, that
the terms of the Merger were fundamentally unfair to Scott shareholders,
that the former Scott directors acted in disregard of their fiduciary
duties to Scott shareholders in agreeing to the Merger and that Kimberly-
Clark aided and abetted such alleged breach. On January 18, 1996, the
proceedings under this action were dismissed without prejudice.
D. The Corporation also is subject to routine litigation from time to time
which individually or in the aggregate is not expected to have a material
adverse effect on the Corporation's business or results of operations.
Environmental Matters
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The information set forth under the "Environmental Matters" section of
"Management's Discussion and Analysis" contained in the 1995 Annual Report to
Stockholders is incorporated in this Item 3 by reference.
The Corporation has been named a potentially responsible party ("PRP") under
the provisions of the federal Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), or analogous state statute, at a
number of waste disposal sites, none of which, individually or in the
aggregate, in management's opinion, is likely to have a material adverse
effect on the Corporation's business or results of operations.
Notwithstanding its opinion, management believes it appropriate to discuss the
following matters concerning two of these sites where the Corporation's
estimated share of total site remediation costs, if any, cannot be established
on the basis of currently available information:
A. In 1993, Scott received a request for information from the EPA regarding
the Saco Landfill Superfund Site in Saco, Maine. Following an internal
investigation, Scott responded that Scott had no knowledge of any
arrangement for the disposal of waste materials at the site. However,
Scott had provided sludge and fly ash to the City of Saco and its
contractors for use in the construction of the landfill cap. The City of
Saco and the Maine Department of Environmental Protection previously had
approved the utilization of the sludge and ash in construction of the
topsoil cap. In 1994, the EPA served Scott with a second request for
information regarding Scott's nexus to the site. Scott again responded
that it had never disposed of hazardous waste at the site.
B. In 1994, Scott received a notice of responsibility from the Massachusetts
Department of Environmental Protection regarding the South Hadley Site in
South Hadley, Massachusetts. The notice implicated Scott Graphics, Inc.,
a former Scott subsidiary, as having disposed of hazardous waste at the
site.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A Special Meeting of Stockholders was convened at 11:00 a.m. on Tuesday,
December 12, 1995, at the Corporation's World Headquarters, 351 Phelps Drive,
Irving, Texas. Represented at the meeting in person or by proxy were 144.5
million shares of common stock, or 90% of all shares of common stock
outstanding.
The stockholders approved the issuance of shares of Kimberly-Clark Common
Stock pursuant to the Merger Agreement and certain ancillary agreements. Of
the shares represented at the meeting, 92.4% voted for such issuance, .6%
voted against and 7.0% abstained or did not vote.
The stockholders also approved an amendment to the Corporation's Restated
Certificate of Incorporation to increase the number of authorized shares of
Kimberly-Clark Common Stock from 300,000,000 to 600,000,000. Of the 160.5
million shares outstanding on the record date for the Special Meeting, 86.1%
voted for such amendment, 3.6% voted against and 10.3% abstained or did not
vote.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names and ages of the executive officers of the Corporation as of March 1,
1996, together with certain biographical information, are as follows:
JOHN W. DONEHOWER, 49, was elected Senior Vice President and Chief Financial
Officer in 1993. Mr. Donehower joined the Corporation in 1974. He was
appointed Director of Finance - Europe in 1978, Vice President, Marketing and
Sales - Nonwovens in 1981, Vice President, Specialty Papers in 1982, Managing
Director, Kimberly-Clark Australia Pty. Limited in 1982, and Vice President,
Professional Health Care, Medical and Nonwoven Fabrics in 1985. He was
appointed President, Specialty Products - U.S. in 1987, and President - World
Support Group in 1990.
O. GEORGE EVERBACH, 57, was elected Senior Vice President - Law and Government
Affairs in 1988. Mr. Everbach joined the Corporation in 1984. His
responsibilities have included direction of legal, human resources and
administrative functions. He was elected Vice President and General Counsel
in 1984; Vice President, Secretary and General Counsel in 1985; and Senior
Vice President and General Counsel in 1986.
THOMAS J. FALK, 37, was elected Group President - North American Tissue, Pulp
and Paper effective January 1, 1996. He is responsible for the Family Care
and Wet Wipes, Away From Home, Neenah Paper and Pulp and Paper Sectors, as
well as the Consumer Business Services and Environment and Energy
organizations. Mr. Falk joined the Corporation in 1983. His responsibilities
have included internal audit, financial and strategic analysis, and operations
management. Mr. Falk was appointed Vice President - Operations Analysis and
Control in 1990. He was elected Senior Vice President -Analysis and
Administration in 1992, Group President - Infant and Child Care in 1993, Group
President - North American Consumer Products effective January 1, 1995, and
Group President - North American Tissue Products effective July 21, 1995. Mr.
Falk is a director of Midwest Express Holdings, Inc., an equity company of the
Corporation.
JAMES G. GROSKLAUS, 60, was elected Executive Vice President effective
December 1, 1990. Employed by the Corporation since 1957, Mr. Grosklaus was
appointed Vice President in 1972 and Divisional Vice President in 1975, and
was elected Senior Vice President effective January 1, 1979. He was appointed
President, K-C Health Care, Nonwoven and Industrial Group in 1981, Senior
Staff Vice President in 1982, Senior Vice President in 1983 and President,
Technical Paper and Specialty Products in 1985, and elected Executive Vice
President in January 1986. In 1988, he was appointed President - North
American Pulp and Paper Sector. He is a director of Midwest Express Holdings,
Inc., an equity company of the Corporation, and is a member of the Emory
University Dean's Advisory Council and the Woodruff Arts Center Board of
Trustees. Mr. Grosklaus has been a director of the Corporation since 1987.
JAMES T. MCCAULEY, 57, was elected Executive Vice President in 1990. Mr.
McCauley joined the Corporation in 1969. He was elected Vice President and
Treasurer in 1980. Mr. McCauley was appointed Vice President - Nonwoven
Operations in 1984, Senior Vice President, Kimberly-Clark Newsprint & Pulp and
Forest Products in 1984, President, North American Pulp and Newsprint Sector
in 1985, President, Health Care and Nonwovens Sector in 1987, and President -
Nonwovens and Technical Products Sector in 1988. He was appointed President -
Nonwovens, Medical and Technical Products Sector in 1988 and President -
Nonwovens and Professional Health Care Sector, Far East Operations and World
Support Group in 1990.
WAYNE R. SANDERS, 48, has served as Chief Executive Officer of the Corporation
since December 1991 and Chairman of the Board of the Corporation since March
1992. He previously had been elected President and Chief Operating Officer in
1990. Employed by the Corporation in 1975, Mr. Sanders was appointed Vice
President of Kimberly-Clark Canada Inc., a wholly owned subsidiary of the
Corporation, in 1981 and was appointed Director and President in 1984. Mr.
Sanders was elected Senior Vice President of Kimberly-Clark Corporation in
1985 and was appointed President - Infant Care Sector in 1987, President -
Personal Care Sector in 1988 and President - World Consumer, Nonwovens and
Service and Industrial Operations in 1990. Mr. Sanders is a director of
Adolph Coors Company, Coors Brewing Company and Texas Commerce Bank, National
Association. He also is a member of the Marquette University Board of
Trustees and is a national trustee of the Boys and Girls Clubs of America. He
has been a director of the Corporation since 1989.
KATHI P. SEIFERT, 46, was elected Group President - North American Personal
Care Products effective July 21, 1995. She is responsible for the Infant and
Child Care and Feminine and Adult Care Sectors, as well as the U.S. and
Canadian Consumer Sales and Safety and Quality Assurance organizations. Ms.
Seifert joined Kimberly-Clark in 1978. Her responsibilities in the
Corporation have included various marketing positions within the Away From
Home, Consumer Tissue and Feminine Products business sectors. She was
appointed President - Feminine Care Sector in 1991 and was elected Group
President - Feminine and Adult Care in 1994 and Group President - North
American Consumer Products effective January 1, 1995. Ms. Seifert is a member
of the Board of Directors of Eli Lilly and Company and the Aid Association for
Lutherans.
JOHN A. VAN STEENBERG, 48, was elected President - European Consumer and
Service & Industrial Operations effective January 1, 1994. He is responsible
for the Household Products, Infant and Child Care, Feminine and Adult Care and
Away From Home Sectors in Europe, as well as the European Consumer Sales and
Distribution organizations. Mr. Van Steenberg joined the Corporation in 1978.
His responsibilities have included operations and major project management in
North America. He was appointed Managing Director of Kimberly-Clark Australia
Pty. Limited in 1990.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The dividend and market price data included in Note 16 to the Financial
Statements, and the information set forth under the captions "Dividends and
Dividend Reinvestment Plan" and "Stock Exchanges" contained in the 1995 Annual
Report to Stockholders are incorporated in this Item 5 by reference.
As of March 19, 1996, the Corporation had 57,032 stockholders of record.
ITEM 6. SELECTED FINANCIAL DATA (1)
(Millions of dollars Year Ended December 31
--------------------------------------------------
except per share amounts) 1995 1994 1993 1992 1991
- --------------------------------------------------------------------------------
Net Sales ..................$13,788.6 $11,979.2 $11,646.8 $12,024.2 $11,627.9
Restructuring and Other
Unusual Charges (2) ...... 1,440.0 -- 378.9 250.0 267.6
Operating Profit (2) ....... 213.0 1,277.1 734.5 883.8 803.8
Share of Net Income of
Equity Companies (3) ..... 113.3 110.5 76.1 90.0 97.6
Income from Continuing
Operations Before
Extraordinary Loss and
Cumulative Effects
of Accounting Changes (2) 33.2 766.5 287.2 492.0 475.4
Net Income (2)(3)(4)(5)(6) . 33.2 753.8 231.0 150.1 435.2
Per Share Basis:
Income from Continuing
Operations Before
Extraordinary Loss and
Cumulative Effects
of Accounting Changes (2) $ .12 $ 2.76 $1.03 $1.77 $ 1.72
Net Income (2)(3)(4)(5)(6) .12 2.71 .83 .54 1.58
Cash Dividends Declared .. 1.80 1.76 1.29 2.07 1.52
Cash Dividends Paid ...... 1.79 1.75 1.70 1.64 1.45
Total Assets ...............$11,439.2 $12,555.7 $13,210.4 $12,559.4 $12,467.0
Long-Term Debt ............. 1,984.7 2,085.4 3,403.0 3,140.1 3,329.8
Stockholders' Equity ....... 3,650.4 4,134.9 3,810.7 3,996.7 4,444.0
(1)All financial information, except cash dividends declared/paid per share,
has been restated to include the results of Scott Paper Company for all
periods presented prior to the merger on December 12, 1995. Cash
dividends declared/paid per share represent the historical dividends
declared/paid by Kimberly-Clark. The merger has been accounted for as a
pooling of interests.
(2)Results for 1995 include a pretax charge of $1,440.0 million or $1,070.9
million after income taxes and minority interests ($3.83 per share) for
the estimated costs of the merger with Scott, for restructuring the
combined operations, and for other unusual charges. Results for 1993
include a pretax charge of $378.9 million or $283.2 million after-tax
($1.02 per share) for Scott's planned restructuring and productivity
improvement programs. Results for 1992 include a pretax charge of $250.0
million or $172.0 million after-tax ($.62 per share) related to the
restructuring of the consumer and away-from-home products operations in
Europe and certain operations in North America. Results for 1991 include
a pretax charge of $267.6 million or $160.6 million after-tax ($.58 per
share) related to Scott's business improvement program.
(3)Share of net income of equity companies and net income for 1995 include a
nonoperating charge of $38.5 million ($.14 per share) for foreign
currency losses incurred by the Corporation's Mexican affiliates on the
translation of the net exposure of U.S. dollar-denominated liabilities
into pesos. In
1994, this charge to net income of equity companies and net income was
$39.2 million ($.14 per share). The translation losses are related to
the devaluation of the Mexican peso in December 1994 and subsequent
periods.
(4)Results for 1994 include income from a discontinued operation of $48.4
million ($.17 per share) related to S.D. Warren Company, a former
printing and publishing papers subsidiary, which was sold on December 20,
1994. Results for 1993, 1992 and 1991 include a loss from the
discontinued operation of $46.6 million ($.17 per share), $30.9 million
($.11 per share) and $40.2 million ($.14 per share), respectively.
(5)Results for 1994 and 1993 include an extraordinary loss related to the
early extinguishment of debt of $61.1 million ($.22 per share) and $9.6
million ($.03 per share), respectively.
(6)Net income for 1992 includes net after-tax charges of $311.0 million
($1.12 per share) for the cumulative effects of adopting the required
accounting rules for postretirement health care and life insurance
benefits and for income taxes.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information set forth under the caption "Management's Discussion and
Analysis" contained in the 1995 Annual Report to Stockholders is incorporated
in this Item 7 by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Corporation and its consolidated subsidiaries
and the independent auditors' report thereon contained in the 1995 Annual
Report to Stockholders are incorporated in this Item 8 by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The section of the 1996 Proxy Statement captioned "Certain Information
Regarding Directors and Nominees" under "Proposal 1. Election of Directors"
identifies members of the board of directors of the Corporation and nominees,
and is incorporated in this Item 10 by reference.
See also "EXECUTIVE OFFICERS OF THE REGISTRANT" appearing in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION
The information in the section of the 1996 Proxy Statement captioned
"Executive Compensation" under "Proposal 1. Election of Directors" is
incorporated in this Item 11 by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information in the sections of the 1996 Proxy Statement captioned
"Security Ownership of Management" under "Proposal 1. Election of Directors"
is incorporated in this Item 12 by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information in the section captioned "Certain Transactions and Business
Relationships" under "Proposal 1. Election of Directors" of the 1996 Proxy
Statement is incorporated in this Item 13 by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) DOCUMENTS FILED AS PART OF THIS REPORT.
1. Financial statements:
The Consolidated Balance Sheet as of December 31, 1995 and 1994, and the related
Consolidated Income Statement and Consolidated Cash Flow Statement for the years
ended December 31, 1995, 1994 and 1993, and the related Notes thereto, and the
Independent Auditors' Report of Deloitte & Touche LLP thereon are incorporated
in Part II, Item 8 of this Form 10-K by reference to the financial statements
contained in the 1995 Annual Report to Stockholders. In addition, related
reports of Deloitte & Touche LLP and other auditors are included herein.
2. Financial statement schedule:
The following information is filed as part of this Form 10-K and should be
read in conjunction with the financial statements contained in the 1995
Annual Report to Stockholders.
Independent Auditors' Reports
Schedule for Kimberly-Clark Corporation and Subsidiaries:
II Valuation and Qualifying Accounts
All other schedules have been omitted because they were not applicable or
because the required information has been included in the financial
statements or notes thereto.
3. Exhibits:
Exhibit No. (3)a. Restated Certificate of Incorporation of Kimberly-Clark
Corporation, dated April 16, 1987, incorporated by reference to Exhibit
No. (4)e of the Kimberly-Clark Corporation Form S-8 filed on February 16,
1993 (File No. 33-58402).
Exhibit No. (3)b. Certificate of Amendment of the Restated Certificate of
Incorporation of Kimberly-Clark Corporation, dated December 12, 1995.
Exhibit No. (3)c. By-Laws of Kimberly-Clark Corporation, as amended June 8,
1995, incorporated by reference to Exhibit No. (3) of the Kimberly-Clark
Corporation Form 10-Q for the quarterly period ended June 30, 1995.
Exhibit No. (4). Copies of instruments defining the rights of holders of
long-term debt will be furnished to the Securities and Exchange Commission on
request.
Exhibit No. (10)a. Kimberly-Clark Corporation Management Achievement Award
Program, as amended as of January 1, 1993, incorporated by reference to
Exhibit No. (10)b of the Kimberly-Clark Corporation Form 10-K for the year
ended December 31, 1994.
Exhibit No. (10)b. Kimberly-Clark Corporation Executive Severance Plan,
incorporated by reference to
Exhibit No. (10)c of the Kimberly-Clark Corporation Form 10-K for the year
ended December 31, 1992.
Exhibit No. (10)c. Second Amended and Restated Deferred Compensation Plan for
Directors of Kimberly-Clark Corporation, incorporated by reference to Exhibit
No. (10)d of the Kimberly-Clark Corporation Form
10-K for the year ended December 31, 1992.
Exhibit No. (10)d. Kimberly-Clark Corporation 1986 Equity Participation Plan,
as amended effective February 11, 1993, incorporated by reference to Exhibit
No. (10)e of the Kimberly-Clark Corporation Form 10-K for the year ended
December 31, 1994.
Exhibit No. (10)e. Kimberly-Clark Corporation 1992 Equity Participation Plan,
as amended effective February 16, 1995, incorporated by reference to
Exhibit No. (10) of the Kimberly-Clark Corporation Form 10-Q for the quarter
ended March 31, 1995.
Exhibit No. (10)f. Kimberly-Clark Corporation Deferred Compensation Plan,
effective as of October 1, 1994, incorporated by reference to Exhibit No.
(10)g. of the Kimberly-Clark Corporation Form 10-K for the year ended December
31, 1994.
Exhibit No. (11). The net income per share of common stock computations for
each of the periods included in Part II, Item 6 of this Form 10-K are based on
average common shares outstanding during each of the respective periods. The
only "common stock equivalents" or other potentially dilutive securities or
agreements (as defined in Accounting Principles Board Opinion No. 15) in
Kimberly-Clark Corporation's capital structure during the periods presented
were options outstanding under its Equity Participation Plans and under
Scott's stock option plans.
Computations of "primary" and "fully diluted" net income per share assume the
exercise of outstanding stock options under the "treasury stock method." The
table below presents the amounts by which the earnings per share amounts
presented in Part II, Item 6 would be reduced if the "treasury stock method"
had been used.
Primary Fully Diluted
------- -------------
1995 $ - $ -
1994 .02 .02
1993 - -
1992 - -
1991 .01 .01
Exhibit No. (12). Computation of ratio of earnings to fixed charges for the
five years ended December 31, 1995.
Exhibit No. (13). Portions of the Kimberly-Clark Corporation 1995 Annual
Report to Stockholders incorporated by reference in this Form 10-K.
Exhibit No. (21). Consolidated Subsidiaries and Equity Companies of Kimberly-
Clark Corporation are identified in the Kimberly-Clark Corporation 1995 Annual
Report to Stockholders, and such information is incorporated in this Form 10-K
by reference.
Exhibit No. (23)a. Independent Auditors' Consent of Deloitte & Touche LLP
Exhibit No. (23)b. Independent Auditors' Consent of Coopers & Lybrand L.L.P.
Exhibit No. (23)c. Independent Auditors' Consent of Price Waterhouse LLP
Exhibit No. (24). Powers of Attorney.
Exhibit No. (27). The Financial Data Schedule required by Item 601(b)(27) of
Regulation S-K has been included with the electronic filing of this Form 10-K.
(B) REPORTS ON FORM 8-K
The Corporation filed a Current Report on Form 8-K dated December 12, 1995,
which reported the consummation of the Merger. Such report was amended by a
Current Report on Form 8-K /A dated December 12, 1995, which reported certain
pro forma financial information related to the Merger.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Kimberly-Clark Corporation
March 25, 1996
By: /s/ John W. Donehower
-------------------------------------
John W. Donehower
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Wayne R. Sanders Chairman of the Board March 25, 1996
- ---------------------------
Wayne R. Sanders and Chief Executive Officer
and Director
(principal executive officer)
/s/ John W. Donehower Senior Vice President and March 25, 1996
- ---------------------------
John W. Donehower Chief Financial Officer
(principal financial officer)
/s/ Randy J. Vest Vice President and March 25, 1996
- ----------------------------
Randy J. Vest Controller
(principal accounting officer)
Directors
John F. Bergstrom James G. Grosklaus
Pastora San Juan Cafferty Louis E. Levy
Paul J. Collins Frank A. McPherson
Robert W. Decherd Linda Johnson Rice
William O. Fifield Wolfgang R. Schmitt
Claudio X. Gonzalez Randall L. Tobias
By: /s/ O. George Everbach March 25, 1996
-------------------------------------------
O. George Everbach, Attorney-in-Fact
INDEPENDENT AUDITORS' REPORT
KIMBERLY-CLARK CORPORATION:
We have audited the consolidated financial statements of Kimberly-Clark
Corporation as of December 31, 1995 and 1994, and for each of the three years in
the period ended December 31, 1995, and have issued our report thereon dated
January 30, 1996; such consolidated financial statements and report are included
in your 1995 Annual Report and are incorporated herein by reference. Our audits
also included the consolidated financial statement schedule of Kimberly-Clark
Corporation, listed in Item 14. This consolidated financial statement schedule
is the responsibility of the Corporation's management. Our responsibility is to
express an opinion on the financial statement schedule based on our audits. The
financial statements and financial statement schedule of Scott Paper Company, a
wholly-owned subsidiary of Kimberly-Clark Corporation, were audited by other
auditors whose reports have been furnished to us, and our opinions, insofar as
they relate to the amounts included for Scott Paper Company, are based on the
reports of such other auditors.
In our opinion, based on our audits and the reports of other auditors referred
to above, the consolidated financial statement schedule listed in Item 14, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.
/S/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Dallas, Texas
January 30, 1996
INDEPENDENT AUDITORS' REPORT
KIMBERLY-CLARK CORPORATION:
We have audited the consolidated balance sheets of Scott Paper Company and its
subsidiaries as of December 30, 1995 and December 31, 1994, and the related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for the years then ended. We have also audited the schedule of valuation
and qualifying accounts of Scott Paper Company and its subsidiaries as of and
for the years ended December 30, 1995 and December 31, 1994. These financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits. We
did not audit the provision for restructuring and other unusual charges of
$827.0 million, the related tax benefit of $218.0 million and related effect on
minority owners' share of subsidiaries' net income of $0.8 million for the year
ended December 30, 1995 nor the related effects of $39.5 million on cash and
cash equivalents, $26.8 million on receivables, $597.8 million on plant assets,
$79.9 million on accumulated depreciation, $57.6 million on goodwill and other
assets, $250.1 million on assets held for sale, $83.3 million on deferred income
tax asset, $134.7 million on deferred income taxes, $257.6 million on accruals
for restructuring programs, $0.8 million on minority owners' interests in
subsidiaries and $17.9 million on additional paid in capital at December 30,
1995. Such provision and related accounts were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it relates to the
aforementioned amounts, is based solely on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audit and the report of other auditors, (1) the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Scott Paper Company as of December
30, 1995 and December 31, 1994, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles, and (2) the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
As discussed in Note 1 of the Financial Review Notes, the Company adopted the
provisions of Statement of Financial Accounting Standards No. 121, `Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of''in 1995.
/S/ COOPERS & LYBRAND L.L.P.
- ----------------------------
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
January 30, 1996
INDEPENDENT AUDITORS' REPORT
KIMBERLY-CLARK CORPORATION:
We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements of Kimberly-Clark Corporation and its
subsidiaries for the year ended December 31, 1995, and have issued our report
thereon dated January 30, 1996. The financial statements of Scott Paper
Company, a wholly-owned subsidiary of Kimberly-Clark Corporation, were audited
by other auditors whose report has been furnished to us, and our opinion on the
consolidated financial statements referred to above, insofar as it relates to
the amounts included for Scott Paper Company (except for the provision for
restructuring and other unusual charges described below), is based on the report
of such other auditors. We have also audited the accompanying schedule of the
Scott Paper Company provision for restructuring and other unusual charges of
$827.0 million, the related tax benefit of $218.0 million and the related effect
on minority owners' share of subsidiaries' net income of $.8 million for the
year ended December 30, 1995 and the accompanying schedule of related effects on
asset and liability accounts as of December 30, 1995 including effects of $39.5
million on cash, $26.8 million on accounts receivable, $597.8 million on
property, plant and equipment, $79.9 million on accumulated depreciation, $57.6
million on other assets, $250.1 million on assets held for sale, $83.3 million
on deferred tax assets, $134.7 million on deferred tax liabilities, $257.6 on
accrued liabilities, $.8 million on minority owners' interests in subsidiaries
and $17.9 million on additional paid in capital, which amounts are included in
the 1995 consolidated financial statements of Scott Paper Company. These
schedules are the responsibility of the company's management. Our
responsibility is to express an opinion on these schedules based on our audit.
We conducted our audit of the schedules in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the schedules are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the schedules. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the schedules. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the schedules referred to above present fairly, in all material
respects, the Scott Paper Company provision for restructuring and other unusual
charges and the related tax benefits for the year ended December 30, 1995 and
the related effects on assets and liabilities as of December 30, 1995, in
conformity with generally accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Dallas, Texas
January 30, 1996
REPORT OF INDEPENDENT ACCOUNTANTS
In our opinion, the consolidated statements of operations, of cash flows and of
changes in stockholders' equity of Scott Paper Company and its subsidiaries (not
presented separately herein) present fairly, in all material respects, the
results of its operations and its cash flows for the year ended December 25,
1993, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which required that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides reasonable basis for the opinion expressed
above.
/S/ PRICE WATERHOUSE LLP
- ------------------------
PRICE WATERHOUSE LLP
Philadelphia, PA
January 25, 1994, except as to the classification of S.D. Warren as
discontinued operation, which is as of December 20, 1994.
REPORT OF PREDECESSOR INDEPENDENT ACCOUNTANTS ON
1993 FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
Scott Paper Company
Our audit of the consolidated financial statements referred to in our report
dated January 25, 1994 appearing on page 25 of this Form 10-K also included an
audit of the Financial Statement Schedule listed in Item 14(a)(2) of this Form
10-K for the year 1993. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
/S/ PRICE WATERHOUSE LLP
- ------------------------
PRICE WATERHOUSE LLP
Philadelphia, PA
January 25, 1996
SCHEDULE II Kimberly-Clark Corporation and Subsidiaries{PRIVATE }
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(Millions of dollars)
ADDITIONS DEDUCTIONS
------------------------------- ------------
BALANCE AT CHARGED TO CHARGED TO WRITE-OFFS BALANCE AT
BEGINNING COSTS AND OTHER AND DISCOUNTS END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS(A) ALLOWED PERIOD
DECEMBER 31, 1995
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts ............. $ 23.5 $ 41.7 $ .8 $ 12.0(b) $ 54.0
Allowances for sales
discounts ............. 22.1 201.7 .1 193.2(c) 30.7
------ ------- ---- ------ -------
Total ............... $ 45.6 $ 243.4 $ .9 $205.2 $ 84.7
====== ======= ==== ====== =======
DECEMBER 31, 1994
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts.............. $ 21.0 $ 8.2 $ .1 $ 5.8(b) $ 23.5
Allowances for sales
discounts ............. 20.1 108.3 - 106.3(c) 22.1
------ ------- ---- ------ -------
Total ............... $ 41.1 $ 116.5 $ .1 $112.1 $ 45.6
====== ======= ==== ====== =======
DECEMBER 31, 1993
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts.............. $ 23.2 $ 10.1 $ .2 $ 12.5(b) $ 21.0
Allowances for sales
discounts ............. 26.0 99.6 - 105.5(c) 20.1
------ ------- ---- ------ -------
Total ............... $ 49.2 $ 109.7 $ .2 $118.0 $ 41.1
====== ======= ==== ====== =======
(a) Primarily bad debt recoveries
(b) Primarily uncollectible receivables written off
(c) Sales discounts allowed
INDEX TO DOCUMENTS FILED AS A PART OF THIS REPORT
DESCRIPTION
-----------
Consolidated financial statements, incorporated by reference
Independent Auditors' Reports, incorporated by reference
Independent Auditors' Reports
Schedules for Kimberly-Clark Corporation and Subsidiaries:
II Valuation and Qualifying Accounts
Exhibit No. (3)a. Restated Certificate of Incorporation of Kimberly-Clark
Corporation, dated April 16, 1987, incorporated by reference to Exhibit
No. (4)e of the Kimberly-Clark Corporation Form S-8 filed on February 16,
1993 (File No. 33-58402)
Exhibit No. (3)b. Certificate of Amendment of the Restated Certificate of
Incorporation of Kimberly-Clark Corporation, dated December 12, 1995.
Exhibit No. (3)c. By-Laws of Kimberly-Clark Corporation, as amended
June 8, 1995, incorporated by reference to Exhibit No. (3) of the
Kimberly-Clark Corporation Form 10-Q for the quarterly period ended
June 30, 1995
Exhibit No. (4). Copies of instruments defining the rights of holders of
long-term debt will be furnished to the Securities and Exchange Commission
on request
Exhibit No. (10)a. Kimberly-Clark Corporation Management Achievement Award
Program, as amended as of January 1, 1993, incorporated by reference to
Exhibit No. (10)b of the Kimberly-Clark Corporation Form 10-K for the year
ended
December 31, 1994
Exhibit No. (10)b. Kimberly-Clark Corporation Executive Severance Plan,
incorporated by reference to Exhibit No. (10)c of the Kimberly-Clark
Corporation
Form 10-K for the year ended December 31, 1992
Exhibit No. (10)c. Second Amended and Restated Deferred Compensation Plan for
Directors of Kimberly-Clark Corporation, incorporated by reference to
Exhibit No. (10)d of the Kimberly-Clark Corporation Form 10-K for the year
ended December 31, 1992
Exhibit No. (10)d. Kimberly-Clark Corporation 1986 Equity Participation Plan,
as amended effective February 11, 1993, incorporated by reference to
Exhibit No. (10)e of the Kimberly-Clark Corporation Form 10-K for the year
ended December 31, 1994
Exhibit No. (10)e. Kimberly-Clark Corporation 1992 Equity Participation Plan,
as amended effective February 16, 1995, incorporated by reference to
Exhibit No. (10) of the Kimberly-Clark Corporation Form 10-Q for the
quarter ended March 31, 1995.
Exhibit No. (10)f. Kimberly-Clark Corporation Deferred Compensation Plan,
effective as of October 1, 1994, incorporated by reference to Exhibit No.
(10)g of the Kimberly-Clark Corporation Form 10-K for the year ended
December 31, 1994
Exhibit No. (11). Statement re: computation of earnings per share
Exhibit No. (12). Computation of ratio of earnings to fixed charges for the
five years ended December 31, 1995
Exhibit No. (13). Portions of the Kimberly-Clark Corporation 1995 Annual
Report to Stockholders incorporated by reference in this Form 10-K
Exhibit No. (21). Consolidated Subsidiaries and Equity Companies of Kimberly-
Clark Corporation are identified in the Kimberly-Clark Corporation 1995
Annual Report to Stockholders, and such information is incorporated in this
Form 10-K by reference
Exhibit No. (23)a. Independent Auditors' Consent of Deloitte & Touche LLP
Exhibit No. (23)b. Independent Auditors' Consent of Coopers & Lybrand LLP
Exhibit No. (23)c. Independent Auditors' Consent of Price Waterhouse LLP
Exhibit No. (24). Powers of Attorney
Exhibit No. (27). The Financial Data Schedule required by Item 601(b)(27) of
Regulation S-K has been included with the electronic filing of this Form
10-K.
Exhibit No. (3)b.
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
KIMBERLY-CLARK CORPORATION
Adopted in Accordance with
the Provisions of Section 242 of the
General Corporation Law of the State of Delaware
The undersigned, being a Vice President and the Secretary of Kimberly-
Clark Corporation (the `Corporation''), a corporation organized and existing
under the laws of the State of Delaware, hereby certifies as follows:
FIRST: That this amendment to the Restated Certificate of
Incorporation of the Corporation (the `Amendment'') has been duly adopted by
the Board of Directors of the Corporation and has been duly adopted by the
stockholders of the Corporation in accordance with Section 242 of the General
Corporation Law of the State of Delaware.
SECOND: That the Restated Certificate of Incorporation of the
Corporation is hereby amended so the Article IV thereof shall read in its
entirety as follows:
ARTICLE IV
The total number of shares of all classes of capital stock which the
Corporation shall have the authority to issue is six hundred and
twenty million (620,000,000) shares which shall be divided into two
classes as follows:
(a) Twenty million (20,000,000) shares of Preferred Stock without par
value; and
(b) Six hundred million (600,000,000) shares of Common Stock of the
par value of One Dollar and Twenty-Five Cents ($1.25) per share.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be executed by Donald M. Crook, its Vice President and Secretary,
this 12th day of December, 1995.
KIMBERLY-CLARK CORPORORATION
By: /s/ Donald M. Crook
------------------------------
Donald M. Crook
Vice President and Secretary
Exhibit No. (12).
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLAR AMOUNTS IN MILLIONS)
Year Ended December 30
--------------------------------------------------
1995 1994 1993 1992 1991
--------------------------------------------------
Consolidated Companies
- ----------------------
Income before taxes (a) ........ $104.4 $1,147.9 $492.4 $671.4 $645.4
Interest expense ............... 245.5 270.5 249.5 255.8 285.6
Interest factor in rent expense. 36.1 41.9 42.7 46.2 41.4
Amortization of capitalized interest 9.7 9.2 8.1 8.2 8.0
Equity Affiliates
- -----------------
Share of 50%-owned:
Income before income taxes ... 40.6 48.0 35.0 38.0 29.6
Interest expense.............. 18.5 15.3 13.7 10.6 16.2
Interest factor in rent expense .8 .7 .8 .6 .7
Amortization of capitalized
interest.................. .7 .6 .6 .3 .2
Distributed income of less than
50%-owned .................... 25.1 41.4 41.4 56.2 43.4
-------- --------- -------- --------- --------
Earnings ......................... $481.4 $1,575.5 $884.2 $1,087.3 $1,070.5
====== ======== ====== ======== ========
Consolidated Companies
- ----------------------
Interest expense ............... $245.5 $270.5 $249.5 $255.8 $285.6
Capitalized interest ........... 8.8 20.6 28.4 20.9 19.7
Interest factor in rent expense 36.1 41.9 42.7 46.2 41.4
Equity Affiliates
- -----------------
Share of 50%-owned:
Interest and capitalized
interest.................. 18.9 15.4 13.8 15.5 18.2
Interest factor in rent
expense .................. .8 .7 .8 .6 .7
-------- -------- -------- --------- ---------
Fixed charges .................... $310.1 $349.1 $335.2 $339.0 $365.6
====== ====== ====== ====== ======
Ratio of earnings to fixed
charges(a) ................ 1.55 4.51 2.64 3.21 2.93
======== ======== ======== ======== ========
Note: The Corporation has guaranteed certain aircraft lease obligations
totaling $72.9 million for two of its equity affiliates. In addition, the
Corporation has provided Midwest Express Airlines, Inc. with a five-year $20
million secondary revolving credit facility. No drawings have been made on
these facilities. The Corporation is also contingently liable as guarantor, or
directly liable as the original obligor for certain debt and lease obligations
of S.D. Warren Company. No losses are expected from these arrangements and they
have not been included in the computation of earnings to fixed charges.
S.D. Warren was sold on December 20, 1994, and is reflected as a discontinued
operation in the consolidated income statement. Accordingly, these computations
exclude earnings (losses) and net fixed charges of this discontinued operation
for all years presented.
(a) The ratio of earnings to fixed charges
includes a pretax restructuring charge of $1,440.0 million in 1995, $378.9
million in 1993, $250.0 million in 1992 and $267.6 million in 1991.
Excluding this charge the ratio of earnings to fixed charges was 6.20 in
1995, 3.77 in 1993, 3.94 in 1992 and 3.66 in 1991.
EXHIBIT 13
FINANCIAL HIGHLIGHTS
% Change % of Sales
(Millions of dollars except per share amounts) 1995 vs. 1994 1995 1994
- -----------------------------------------------------------------------------------------------------------
Net Sales .......................................... $13,788.6 15.1%
Gross Profit ....................................... 4,960.5 18.5% 36.0 34.9
Operating Profit ................................... 213.0 -83.3% 1.5 10.7
Income Before Income Taxes ......................... 104.4 -90.9% .8 9.6
Net Income ......................................... 33.2 -95.6% .2 6.3
Net Income Per Share ............................... .12 -95.6%
1995 1994
- ------------------------------------------------------------------------------------------------------
Capital Spending .............................................................. $ 817.6 $857.3
Net Income Return on Average Stockholders'
Equity ...................................................................... .9%(a) 19.0%
Operating Profit Return on Average Assets ..................................... 1.8%(a) 10.4%
Ratio of Total Debt to Capital ................................................ 41.9% 45.9%
Closing Price: KMB Common Stock Per Share .................................... $82-3/4 $50-3/8
Certain events occurred in 1995 which affect earnings comparisons. A 1995
restructuring and other unusual charge, a nonoperating charge for foreign
currency losses resulting from the devaluation of the Mexican peso, the sale of
80 percent of Midwest Express Holdings, Inc., and asset disposals affected 1995
income from continuing operations, net income and net income per share as
follows:
Net
Operating Net Income
(Millions of dollars) Profit Income Per Share
- ----------------------------------------------------------------------------------------------------------------
Restructuring and Other Unusual Charge ......................... $(1,440.0) $(1,070.9) $(3.83)
Mexican Peso Devaluation ....................................... - (38.5) (.14)
Gain on Sale of Midwest Express ................................ - 40.0 .14
Asset Disposals ................................................ - 24.1 .09
--------- ---------- -------
Total ..................................................... $(1,440.0) $(1,045.3) $ 3.74)
========= ======== =======
(a)Includes the effect of deducting a
1995 restructuring and other unusual charge from net income ($1,070.9 million
after taxes and minority interests) and from operating profit ($1,440.0
million pretax). Excluding these effects from net income and operating
profit, net income return on average stockholders' equity and operating
profit return on average assets for 1995 were 28.4 percent and 14.2 percent,
respectively.
Certain events occurred in 1994 which affect earnings comparisons. Income from
a discontinued operation and the sales of the Mobile, Alabama energy and
recovery complex and Scott Health Care assets increased net income and net
income per share, while a loss on early extinguishment of debt and a
nonoperating charge for foreign currency losses resulting from the devaluation
of the Mexican peso reduced earnings. The effect of these events on 1994 net
income and net income per share is
as follows:
Net
Net Income
(Millions of dollars) Income Per Share
- ------------------------------------------------------------------------------------------------------
Income From Discontinued Operation ............................................ $ 48.4 $ .17
Sales of Mobile Energy Complex and Scott Health Care Assets ................... 62.5 .22
Extraordinary Loss on Early Extinguishment of Debt ............................ (61.1) (.22)
Mexican Peso Devaluation ...................................................... (39.2) (.14)
Asset Disposals................................................................ 27.4 .09
-------- ------
Total .................................................................... $ 38.0 $ .12
======== ======
NOTE:
Financial information has been restated to include the results of Scott Paper
Company for all periods presented prior to the merger on December 12, 1995.
The merger has been accounted for as a pooling of interests.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Kimberly-Clark Corporation and Subsidiaries
Management believes that the following commentary and tables appropriately
discuss and analyze the comparative results of operations and the financial
condition of the Corporation for the periods covered.
Certain matters which occurred in the last three years represent major unusual
items. These matters and their effect on the comparability of financial data
presented in this Management's Discussion and Analysis are discussed below.
1995 Business Combination, Worldwide Integration Plan, and Restructuring and
Other Unusual Charges
. On December 12, 1995, Kimberly-Clark merged with Scott Paper Company
(``Scott''), a worldwide producer of sanitary tissue products, and issued .78
of a share of its common stock for each share of Scott common stock. The
$9.4 billion transaction qualified as a tax-free reorganization for income
tax purposes and has been accounted for as a pooling of interests for
financial reporting purposes. Accordingly, the Corporation's consolidated
financial statements have been restated for all years presented to include
the results of operations, cash flows and financial positions of Scott.
Likewise, the financial data presented in this Management's Discussion and
Analysis include Scott data for all periods presented.
Net sales and earnings data for Kimberly-Clark and its subsidiaries and for
Scott and its subsidiaries through December 31, 1995, and for the prior two
years, are presented in Note 2 to the Financial Statements.
. Kimberly-Clark is implementing a worldwide plan to integrate its operations
with those of Scott. The plan is expected to yield annual pretax benefits of
approximately $250 million in 1996, $400 million in 1997 and $500 million in
1998. In order to achieve the anticipated benefits and to meet regulatory
requirements, the plan includes the sale of up to 12 mills throughout the
world that employ about 3,300 people and the elimination of about 2,700
duplicate staff and sales positions. This reduction of about 6,000 jobs
represents about 10 percent of the combined workforce of the merged
companies.
. In conjunction with the worldwide integration plan, the Corporation recorded
a one-time pretax charge of $1,440.0 million for the estimated costs of the
merger with Scott, for restructuring the combined operations and for other
unusual charges (the ``1995 one-time charge''). The 1995 one-time charge
includes:
. The write-down to estimated net realizable value of nine mills in Europe
and Canada and a research facility in the U.S. that will be disposed of,
resulting in a loss of $211.8 million. Sale or closure of these facilities
is required to eliminate excess capacity and inefficient operations in the
combined company.
. Losses of $81.8 million related to compliance with consent decrees of the
U.S. Justice Department and the European Commission. These agreements
require the sale of the Scott Baby Fresh baby wipes and Scotties facial
tissue operations in the U.S. and the Kleenex Velvet bathroom tissue
business in the United Kingdom and Ireland. Under the agreements, Scott's
baby wipes mill in Dover, Delaware and Kimberly-Clark' s bathroom tissue
mill in Prudhoe, England must be sold, as well as up to two of four other
tissue mills located in the U.S. The terms of sale of the latter group of
mills will permit the buyer(s) to select the mills they wish to buy.
Depending on the choices made by the buyer(s), other changes to the size
and manner of operation of the retained tissue mills may be required. The
estimated loss represents management's current estimate of the most likely
choices to be made
by the buyer, the estimated sales values of the mills, and the related
implications on the retained tissue mills. Management expects to sell both
the Dover and Prudhoe mills at gains, and such gains will not be recognized
until realized.
. Employee severance and other employee-related costs of $220.2 million.
. The costs of terminating leases, contracts and other long-term agreements
and for providing for losses on other contracts of $142.5 million.
. Impaired asset charges arising from adoption of SFAS 121, `Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of.'' The impaired asset charges are for mills or operations
whose future cash flows are estimated to be insufficient to cover their
carrying amounts. The two most significant items included in the
impairment write-down are a Scott tissue mill in the U.S. and the Scott
pulp mill in Spain. One of these facilities has been written down to its
estimated fair value, based on the Corporation's assessment of expected
pretax future cash flows discounted at a rate commensurate with the risk
involved. The other mill has estimated negative future cash flows
(undiscounted), and consequently the entire cost of the mill was written
off. The total impairment loss aggregated $158.3 million.
. Other asset write-downs of $449.1 million, representing principally losses
associated with elimination of inefficient and excess tissue-making
capacity at a Scott facility in Canada, the write-down of certain assets at
Scott facilities which do not meet Kimberly-Clark's environmental
standards, losses on disposal of less efficient and duplicate machinery and
equipment not needed in the combined restructured manufacturing operations,
assets that became obsolete as a result of the merger, or which will no
longer be used, and additional allowances related to Scott accounts
receivable to facilitate an orderly and satisfactory transfer of customer
relationships to Kimberly-Clark.
. Fees for investment bankers, outside legal counsel and independent auditors
totaling $80.7 million.
. Other costs of the merger of $95.6 million.
The $1,440.0 million pretax cost of the 1995 one-time charge has been
recorded in operating profit. Of this charge, $626.3 million relates to
restructuring and $813.7 million relates to other unusual items.
The effect of the 1995 one-time charge on cash flow is discussed under
Liquidity and Capital Resources elsewhere in this Management's Discussion and
Analysis. Additional information concerning the nature and amounts of the
items comprising the 1995 one-time charge, the uncertainty of amounts that
were estimated and the classification of the related assets and liabilities
associated with the 1995 one-time charge is contained in Note 3 to the
Financial Statements.
The 1995 one-time charge decreased 1995 business segment and geographic
operating profit as follows:
($ Millions)
Outside
North North
America America Total
--------- -------- ---------
1995 ONE-TIME CHARGE
- --------------------
Personal Care Products ................................. $ (92.3) $(138.0) $ (230.3)
Tissue-Based Products ................................. (609.8) (371.4) (981.2)
Newsprint, Paper and Other ............................ (35.0) - (35.0)
-------- ------- ---------
$(737.1) $ 509.4) (1,246.5)
======= =======
Unallocated ........................................... (193.5)
---------
Total $(1,440.0)
=========
The income tax benefit of the 1995 one-time charge is estimated at $360.0
million, or 25 percent of the pretax charge. The income tax benefit is lower
than the statutory income tax rate because certain costs and fees are
nondeductible and other costs relate to operations in countries in which the
Corporation has income tax loss carryforwards. The 1995 one-time charge, net of
applicable income taxes and minority interests, reduced 1995 net income by
$1,070.9 million, or $3.83 per share.
In conjunction with the merger, an additional $73.3 million of state, federal
and foreign income tax liabilities were accrued to conform Scott's income tax
accrual practices to Kimberly-Clark's. These liabilities were recorded as
conforming accounting adjustments and were charged to the income tax provisions
of 1994 and prior years, as discussed more fully in Note 2 to the Financial
Statements. The portion of income tax conforming accounting adjustments
allocated to 1994 reduced 1994 net income by $42.4 million, or $.15 per share.
1994 Scott Discontinued Operation and Modification and Acceleration of the 1993
Scott Restructuring
. In December 1994, Scott completed the sale of S.D. Warren Company (``S.D.
Warren''), its former printing and publishing papers subsidiary, for
approximately $1.6 billion, including the assumption by the buyer of
approximately $120.0 million in debt. The operating results of S.D. Warren
prior to the sale have been segregated and reported as a discontinued
operation in all income statements presented. Additional information
concerning the results of S.D. Warren is contained in Note 13 to the
Financial Statements.
In August 1994, Scott modified its 1993 restructuring plan to accelerate the
timing and to increase total workforce reductions. This modified plan was
completed by year-end 1994 and no additional charges were needed to achieve
the restructuring. In 1994, Scott management estimated annual, full-year
pretax benefits of approximately $340 million related to the successful
implementation of the program. The 1994 partial-year, pretax benefit of the
program is currently estimated at approximately $165 million.
1993 Scott Restructuring and Accounting Changes
. In 1993, Scott recorded a charge for its planned restructuring and
productivity improvement programs (the ``1993 restructuring charge''). The
plan included the estimated costs to reduce Scott's workforce as well as the
costs to realign and shut down some older and inefficient assets. The total
pretax cost of the 1993 restructuring charge was $467.4 million; $378.9
million of the cost was charged to operating profit, and $88.5 million
applicable to S.D. Warren was included in the results of operations of that
company presented as a discontinued operation.
The 1993 restructuring charge decreased 1993 business segment and geographic
operating profit as follows:
($ Millions)
Outside
North North
America America Total
-------- --------- ---------
1993 RESTRUCTURING CHARGE
- -------------------------
Tissue-Based Products ....................... $(259.9) $ (93.0) $(352.9)
======= ========
Unallocated ................................. (26.0)
--------
Total ....................................... $ (378.9)
========
The 1993 restructuring charge reduced income from continuing operations by
$283.2 million, or $1.02 per share.
. In 1992, Scott adopted SFAS 106 ``Employers' Accounting for Postretirement
Benefits Other Than Pensions'' (``SFAS 106'' using the delayed recognition
option under which the transition obligation was being amortized over 16
years. Kimberly-Clark adopted SFAS 106 in 1992 utilizing the immediate
recognition option under which the transition obligation for Kimberly-Clark's
plans was charged to 1992 income. An adjustment was made to conform Scott's
accounting to Kimberly-Clark's, and Scott's amortization of the transition
obligation in subsequent years was reversed as part of the conforming
accounting adjustment. This conforming accounting adjustment increased 1993
net income $25.6 million, or $.09 per share.
. A conforming accounting adjustment was made to reflect the adoption of SFAS
109 ``Accounting for Income Taxes'' (`SFAS 109''), with respect to Scott.
Scott had adopted SFAS 109 in 1993, whereas Kimberly-Clark adopted SFAS 109
in 1992. This conforming accounting adjustment decreased 1993 net income
$21.7 million, or $.08 per share.
. The net effect of the conforming accounting adjustments discussed in the
previous two paragraphs, plus the 1993 portion of the previously discussed
$73.3 million income tax conforming accounting adjustment, reduced 1993 net
income by $2.9 million, or $.01 per share.
For purposes of this Management's Discussion and Analysis, the 1995 one-time
charge has been segregated in the following business segment and geographic
presentations to facilitate a meaningful discussion of ongoing operations. For
a summary of the business segment and geographic data that include the 1995 one-
time charge, see Note 17 to the Financial Statements.
ANALYSIS OF CONSOLIDATED OPERATING RESULTS
BY BUSINESS SEGMENT
Net Sales Operating Profit
---------------------------------------------- ----------------------------------------------
% Change % of 1995 % Change % Return on Sales
-----------------
($ Millions) 1995 1994 vs. 1994 Consolidated 1995 1994 vs. 1994 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
Personal Care Products . $ 4,342.1 $ 3,783.6 +14.8% 31.5% $ 568.2 $ 582.7 - 2.5% 13.1% 15.4%
Tissue-Based Products .. 7,982.0 6,771.4 +17.9 57.9 944.7 576.3 +63.9 11.8 8.5
Newsprint, Paper and Other 1,584.3 1,514.6 + 4.6 11.5 259.6 213.0 +21.9 16.4 14.1
1995 one-time charge ... - - - (1,440.0) -
Adjustments ............ (119.8) (90.4) (.9) (119.5) (94.9)
---------- ---------- ------ -------- --------
Consolidated........ $ 13,788.6 $ 11,979.2 +15.1% 100.0% $ 213.0 $1,277.1 - 83.3% 1.5% 10.7%
========== ========== ====== ========= ========
BY GEOGRAPHY
Net Sales Operating Profit
-------------------------------------------- ------------------------------------------------
% Change % of 1995 % Change % Return on Sales
-----------------
($ Millions) 1995 1994 vs. 1994 Consolidated 1995 1994 vs. 1994 1995 1994
- ---------------------------------------------------------------------------------------------------------------------
North America ... $ 9,805.4 $ 9,012.6 + 8.8% 71.1% $ 1,420.9 $1,187.4 +19.7% 14.5% 13.2%
Outside North
America ....... 4,255.0 3,176.6 + 33.9 30.9 351.6 184.6 +90.5 8.3 5.8
1995 one-time
charge ........ - - - (1,440.0) -
Adjustments ..... (271.8) (210.0) (2.0) (119.5) (94.9)
---------- -------- ------- -------- -------
Consolidated .... $13,788.6 $11,979.2 + 15.1% 100.0% $ 213.0 $1,277.1 -83.3% 1.5% 10.7%
========= ========= ====== ======== ========
In conjunction with the Scott merger and the application of pooling of interests
accounting, management has redefined its consolidated operations into the
following segments to appropriately reflect the businesses in which the
Corporation now operates.
. Personal Care Products include infant, child, feminine and incontinence care
products; wet wipes; health care products; and related products.
. Tissue-Based Products include tissue and wipers for household and away-from-
home use; pulp; and related products.
. Newsprint, Paper and Other includes newsprint, printing papers, premium
business and correspondence papers, specialty papers, technical papers, and
related products; and other products and services.
Business segment data for all years presented have been restated to this revised
presentation.
Commentary:
Net sales increased from 1994 as a result of higher selling prices, increased
sales volumes and improved product mix in many of the Corporation's worldwide
businesses. About one-third of the net sales increase was due to higher sales
volumes and improved product mix.
. Sales volumes were higher in North America for Kleenex, Scott and Cottonelle
bathroom tissue, Huggies disposable diapers, branded and private-label
training and youth pants, Huggies baby wipes, Depend and Poise incontinence
care products, away-from-home products, professional health care products and
technical papers.
. Sales volumes increased for nearly all of the Corporation's premium consumer
products in Europe and Asia, especially for diapers and feminine care
products in Europe.
. Selling prices improved for tissue products, newsprint, pulp and premium
business and correspondence papers. Selling prices declined slightly for
diapers and training pants in North America due to competitive pressures.
. Changes in currency exchange rates are estimated to have increased
consolidated net sales by $185 million.
Gross profit improved 18.5 percent in absolute terms, and as a percentage of net
sales, primarily because of the higher selling prices and improved product mix
which more than offset increased fiber costs.
. Cost reductions and manufacturing efficiencies were achieved in the North
American disposable diaper and premium bathroom tissue businesses and in the
European diaper business.
. Manufacturing cost improvements were achieved in consumer and away-from-home
businesses in the U.S. and Europe.
Excluding the 1995 one-time charge, operating profit improved 29.4 percent in
absolute terms, and as a percentage of net sales, due to the higher gross margin
coupled with the savings from acceleration of the 1993 restructuring plan.
Management estimates that the accelerated plan improved consolidated operating
profit by more than $175 million in 1995 compared to 1994.
. Marketing costs increased in North America primarily for disposable diapers,
feminine care products and consumer tissue products in response to
competition.
. Operating losses in the infant and child care business in Europe exceeded
those of 1994 due primarily to higher marketing costs associated with the
1995 expansion of disposable diapers into France and Belgium and in response
to competition.
. Operating profit for the Scott consumer and away-from-home tissue products
businesses improved from 1994 levels due to selling price increases and the
benefits of the 1993 restructuring, which more than offset the substantial
increase in fiber costs and the higher marketing costs for the support of
Viva Ultra towels and Cottonelle bathroom tissue in the U.S.
. Changes in currency exchange rates had no significant effect on consolidated
operating profit in 1995.
Additional Income Statement Commentary:
. Interest expense declined due to lower average debt levels.
. Other income (expense) included the following unusual transactions in 1995:
. A pretax gain of $61.4 million from the September 1995 initial public
offering (`IPO'') of 80 percent of the Corporation's investment in Midwest
Express Airlines, Inc. (`Midwest Express'') and Astral Aviation, Inc.
(`Astral''). In 1994, these operations had combined net sales of $203.6
million and operating profit of $11.3 million. In 1995 to the date of the
IPO, these operations had combined net sales of $192.8 million and
operating profit of $26.0 million. The IPO resulted in the Corporation's
retained ownership in Midwest Express and Astral being shown with equity
company investments.
. A pretax gain of $57.5 million on asset sales. Included were gains on the
sale of an interest in a pulp-making joint venture in Chile, a timberland
joint venture in Georgia and Scott's Philadelphia headquarters.
. A pretax charge of $7.6 million for fees and expenses related to the
November 1995 spin-off of the Corporation's tobacco-related business
operations in the U.S., France and Canada. In 1994, these operations had
net sales of $404.2 million and operating profit of $58.7 million. In 1995
to the date of the spin-off, these operations had net sales of $426.2
million and operating profit of $63.3 million.
. A pretax charge of $6.0 million related to the disposition of the
Corporation's trucking business.
. These 1995 transactions resulted in an after-tax gain of $64.1 million, or
$.23 per share.
. Other income (expense) for 1994 included unusual transactions aggregating
$128.8 million from sales of assets and timberlands. These unusual
transactions improved 1994 net income by $89.9 million, or $.31 per share.
. The Corporation's effective income tax rate for the full year was 147.0
percent in 1995 compared with 40.5 percent in 1994. Excluding the 1995 one-
time charge, the Corporation's effective tax rate for 1995 was 33.2 percent.
The drop in the effective rate was primarily attributable to higher earnings
in countries where net operating loss carryforwards were realized, to tax law
changes in the Netherlands that caused deferred tax assets to be recognized
and to tax credits. The 1994 effective rate was abnormally high due to
recording the 1994 effect of the previously described conforming accounting
adjustment for Scott's income tax liabilities.
. The Corporation's share of equity company net income improved $2.8 million.
. Earnings from Kimberly-Clark de Mexico, S.A. de C.V. (`K-C de Mexico'')
were unchanged from the prior year, as the effects of substantially higher
fiber and other raw material costs and exchange losses were offset by
selling price increases and higher interest income. The translation of the
net exposure of U.S. dollar-denominated liabilities into pesos at K-C de
Mexico reduced equity company net income $38.5 million in 1995 and $39.2
million in 1994; in each year these translation losses reduced earnings by
$.14 per share.
. Operating profit at the Mexican affiliate, Compania Industrial de San
Cristobal, S.A. de C.V. (`Cristobal''), improved nearly 50 percent and net
income improved 75 percent. These results were achieved from higher
selling prices which more than offset fiber cost increases, and from the
benefits of a 1993 restructuring of its operations.
. During 1995, the Corporation increased its ownership in its South African
affiliate, Carlton Paper
Corporation Limited (`Carlton''), and its Argentine affiliate, Kimberly-
Clark Argentina S.A., which resulted in these former equity affiliates
becoming consolidated subsidiaries. Because the operations are now
consolidated, their results are no longer reported in net income from
equity affiliates.
Adjustments:
. Adjustments to sales shown in the preceding tables consist of intercompany
sales of products between business segments or geographical areas.
Adjustments to operating profit consist of expenses not associated with
business segments or geographical areas.
LIQUIDITY AND CAPITAL RESOURCES
Year Ended
December 31,
---------------------
($ Millions) 1995 1994
- -------------------------------------------------------------------------------------------------------------
Cash provided by operations ....................................................... $ 931.6 $ 913.7
Capital spending .................................................................. 817.6 857.3
Proceeds from disposition of property and businesses .............................. 336.1 1,936.4
Ratio of total debt to capital .................................................... 41.9% 45.9%
Pretax interest coverage - times .................................................. 1.6 5.0
Commentary:
. Despite higher working capital needs, and excluding the effects of the 1995
one-time charge, cash provided by operations in 1995 increased. Major
factors affecting the change in operating working capital, excluding
businesses bought and sold and the effects of the 1995 one-time charge, were:
. an increase in accounts receivable, net of allowances and discounts, of
$264.5 million, which is primarily due to the growth in net sales, and
. an increase in inventories of $191.3 million due in part to a decline in
December shipments of Scott tissue products as retailers sold existing
stock to reduce inventories.
. The 1995 one-time charge is estimated to require total cash payments of $512
million. On an after-tax basis, the charge is estimated to require the net
expenditure of $152 million in cash.
. The decline in proceeds from dispositions of property and businesses is
attributable to Scott's 1994 sale of S.D. Warren for approximately $1.6
billion. Part of these proceeds were used to retire debt in 1994 and 1995.
. The ratio of total debt to capital is outside the Corporation's target range
of 28 to 32 percent due primarily to the effect of the 1995 one-time charge.
Excluding the effect of such charge, the ratio of total debt to capital would
be 36.1 percent at December 31, 1995, reflecting the previously mentioned
reduction in debt.
. The decline in the Corporation's pretax interest coverage is due to the 1995
one-time charge. Excluding the effect of such charge, the 1995 pretax
interest coverage would be 5.8 times.
. A shelf registration for $200 million of debt securities is on file with the
Securities and Exchange Commission. The filing allows flexibility to issue
debt promptly if the Corporation's needs and market conditions warrant.
. Revolving credit facilities of $1,575 million are in place for general
corporate purposes and to back up commercial paper borrowings.
. The Corporation's long-term debt securities have a Double-A rating, and its
commercial paper is rated in the top category.
. Management believes that the Corporation's ability to generate cash from
operations and its capacity to issue short-term and long-term debt are
adequate to fund working capital, capital spending and other needs in the
foreseeable future.
TRENDS IN THE LAST THREE YEARS
NET SALES
($ Billions) 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------
Principal products:
Diapers .................................................................... $ 2.1 $ 1.7 $ 1.5
Tissue ..................................................................... 7.4 6.3 6.4
All other .................................................................. 4.3 4.0 3.7
------- ------- -------
Consolidated ................................................................. $ 13.8 $ 12.0 $ 11.6
======= ======= =======
Consolidated net sales have grown $1.8 billion, or 15 percent, since 1992. The
increase from 1994 to 1995 is primarily attributable to improved selling prices
for tissue products, pulp and newsprint, and to better product mix and the
effects of currency translation. The increase from 1993 to 1994 is primarily
due to higher sales volumes, largely for disposable diapers in North America,
Europe and Asia. This increase was offset, in part, by lower selling prices for
premium tissue products.
ANALYSIS OF OPERATING PROFIT AS A PERCENTAGE OF NET SALES
1995 1994 1993
- ----------------------------------------------------------------------------------------
Net sales .................................................. 100.0% 100.0% 100.0%
Less:
Cost of products sold .................................... 64.0 65.1 64.7
Marketing expense ........................................ 18.1 17.9 19.0
Research expense ......................................... 1.5 1.7 1.8
General expense .......................................... 4.4 4.6 4.9
1995 and 1993 charges ..................................... 10.5 - 3.3
----- ------ -----
Operating profit ........................................... 1.5% 10.7% 6.3%
===== ====== =====
. Excluding the 1995 one-time charge and the 1993 restructuring charge,
operating profit margins have improved during each of the last two years.
. As discussed previously, the 1995 improvement in operating profit margin
was principally attributable to the higher selling prices, which more than
offset the industry-wide increase in fiber costs, and to the savings from
the acceleration of the 1993 restructuring plan. Offsetting some of the
1995 improvements were higher marketing expenses for the support of Viva
Ultra towels and Cottonelle bathroom tissue in the U.S. and Huggies
disposable diapers in Europe.
. The improvement in operating profit margin in 1994 was primarily the result
of the benefits of cost reductions associated with the 1993 restructuring,
partial offset by a decline in operating margin in the Kimberly-Clark
businesses. The decline in operating profit margin in the Kimberly-Clark
businesses was attributable to lower selling prices, higher labor and fiber
costs, and lower sales volumes for training pants in North America, which
more than offset higher sales volumes for most other products, improved
manufacturing efficiencies and lower marketing costs. Other factors
affecting operating profit margins for the last three years were:
. weak markets in Europe for tissue products,
. higher product improvement and start-up costs in 1994 and 1993,
. lower net price realizations for newsprint in 1994 and 1993,
. poor results for Kimberly-Clark's bathroom tissue businesses in North
America and Europe in 1994 and 1993, and
. marketing expenses to support the introduction of diapers and training
pants in Europe.
CHANGES IN NET SALES AND EARNINGS VERSUS THE PRECEDING YEAR
1995 1994
--------------------- ------------------------
Excluding 1995 Excluding 1993
One-Time Restructuring
Reported Charge Reported Charge
- ------------------------------------------------------------------------------------------------------
Net sales ........................................ + 15.1% +15.1% + 2.9% + 2.9%
Gross profit ..................................... + 18.5 +18.5 + 1.9 + 1.9
Operating profit ................................. - 83.3 +29.4 + 73.9 +14.7
Income from continuing
operations ...................................... - 95.7 +44.0 + 166.9 +34.4
Income per share from
continuing operations .......................... - 95.7 +43.1 + 168.0 +34.6
The comparison of 1995's results to those of 1994 has previously been discussed.
Highlights of 1994's results compared to those of 1993 are as follows:
. The net sales increase in 1994 was due to the Kimberly-Clark portion of
consolidated operations. Kimberly-Clark's 1994 sales increase resulted from
an overall improvement in sales volumes of 6.9 percent, which more than
offset the effect of lower selling prices.
. Gross profit grew marginally in 1994 as a result of (i) the lower selling
prices, (ii) higher labor and fiber costs as well as lower sales volumes for
training pants in North America (all of which tempered the benefits of higher
sales volumes for most other Kimberly-Clark products), (iii) improved
manufacturing efficiencies and (iv) a portion of the benefits of the cost
savings from the 1993 restructuring.
. Excluding the 1993 restructuring charge, operating profit grew 14.7 percent,
principally as a result of lower marketing expenses and the benefits of the
balance of the cost savings from the 1993 restructuring.
. Other income (expense) improved dramatically in 1994 primarily because of
$99.2 million in gains on the sales of Scott's Mobile, Alabama energy complex
and the Scott Health Care assets. Also contributing to the improvement were
net gains on the sale of woodlands.
. The Corporation's share of net income of equity companies improved from 1993,
and was affected by the following:
. Cristobal recorded a restructuring charge in 1993 which resulted in a net
loss, of which the Corporation's share was $36.2 million.
. K-C de Mexico recorded a loss from the 1994 devaluation of the Mexican peso
due to the remeasurement of such affiliate's net exposure of U.S. dollar-
denominated liabilities, of which the Corporation's share was $39.2
million. Excluding the peso loss, the Corporation's share of the
affiliate's net income improved nearly 18 percent.
. Equity accounting was readopted for Carlton which improved the
Corporation's share of net income of equity companies.
. Income from continuing operations was affected by an abnormally high income
tax rate in 1993 as a result of the income tax benefits attributable to the
1993 restructuring charge. The effective income tax rate on such charge was
25.3 percent.
CONTINGENCIES
As more fully described in Note 14 to the Financial Statements, Scott is a
defendant in numerous actions in state and federal courts seeking damages
relating to breast implants allegedly covered by polyurethane foam manufactured
by the subsidiary's former Foam Division, which was sold in 1983. The
Corporation believes that only a small percentage of breast implants were
covered by polyurethane foam manufactured by Scott's Foam Division prior to its
sale. The Corporation believes that it has meritorious defenses against these
claims and that the final results of such claims, while they cannot be predicted
with certainty, will not have a material adverse effect on the Corporation's
business or results of operations.
The Corporation also is subject to routine litigation from time to time which
individually or in the aggregate is not expected to have a material adverse
effect on the Corporation's business or results of operations.
ENVIRONMENTAL MATTERS
The Corporation is subject to federal, state and local environmental protection
laws and regulations with respect to its business operations and is operating in
compliance with, or taking action aimed at ensuring compliance with, such laws
and regulations. Compliance with these laws and regulations is not expected to
materially affect the Corporation's business or results of operations. The
Corporation has been named as a potentially responsible party at a number of
waste disposal sites, none of which individually, or in the aggregate, in
management's opinion, is likely to have a material adverse effect on the
Corporation's business or results of operations. Additional information
concerning environmental matters is disclosed in the Corporation's annual report
to the Securities and Exchange Commission on Form 10-K for the year ended
December 31, 1995 under the `Business'' and ``Legal Proceedings'' sections. See
page 65 of this report on how to obtain a copy of the Form 10-K.
FOREIGN CURRENCY RISKS, HEDGING ACTIVITIES AND INFLATION RISKS
The Corporation's foreign currency risks and hedging activities are discussed in
Notes 7 and 8 to the Financial Statements. As previously discussed, the
fluctuations in the value of the Mexican peso have resulted in foreign currency
losses at K-C de Mexico in both 1995 and 1994. Historically, K-C de Mexico has
been able to increase both selling prices and sales volumes to recover, over
time, the effect of changes in currency exchange rates, as well as cost
increases. In 1995, K-C de Mexico's earnings were unchanged from 1994, but were
down from 1993, due to the continued erosion in the value of the peso, which
reduced earnings. Management believes that this peso foreign currency risk will
remain in the foreseeable future.
The Corporation's inflation risks are managed on an entity-by-entity basis
through selective price increases, productivity increases and cost-containment
measures. The net assets of subsidiaries and affiliates operating in
hyperinflationary countries are not significant.
OUTLOOK - 1996
The Corporation expects 1996 to be an excellent year, although one that is
difficult to forecast. At this point, management can state that the merger will
be additive to earnings per share in 1996 and that securities analysts'
consensus estimate of $4.94 per share as of December 1995, is a realistic number
given what the Corporation currently knows.
For 1996, the Corporation forecasts an effective tax rate of approximately 36
percent.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
Certain sections of this report contain forward-looking statements. Such
sections include, without limitation, discussions concerning the outlook of the
Corporation, the 1995 one-time charge, the 1993 restructuring charge and the
contingencies of the Corporation. Forward-looking statements are made based
upon management's expectations and beliefs concerning future events impacting
the Corporation. There can be no assurances that such events will occur or that
the results of the Corporation will be as estimated.
The assumptions used as a basis for the forward-looking statements contained in
this report include many estimates, which, among other things, depend on the
integration of the operations of Scott with those of the Corporation. Events
affecting such integration that could adversely affect future results of the
Corporation include, but are not limited to, the terms on which the Corporation
disposes of certain mills and facilities and the cost savings achieved from the
consolidation of operational and administrative functions. Many factors outside
the control of the Corporation also could impact the realization of such
estimates.
SELECTED FINANCIAL DATA
Kimberly-Clark Corporation and Subsidiaries
(Millions of dollars except Year Ended December 31
per share amounts) 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------
INCOME STATEMENT DATA
Net sales ............................. $13,788.6 $11,979.2 $11,646.8 $12,024.2 $11,627.9
Gross profit ........................... 4,960.5 4,185.5 4,106.7 4,344.9 4,130.1
Restructuring and other
unusual charges ..................... 1,440.0 - 378.9 250.0 267.6
Operating profit ...................... 213.0 1,277.1 734.5 883.8 803.8
Share of net income of equity
companies ........................... 113.3 110.5 76.1 90.0 97.6
Income from continuing operations
before extraordinary loss and
cumulative effects of accounting
changes .............................. 33.2 766.5 287.2 492.0 475.4
Net income ............................ 33.2 753.8 231.0 150.1 435.2
PER SHARE BASIS
Income from continuing operations
before extraordinary loss and effects
of accounting changes ............... $ .12 $ 2.76 $ 1.03 $ 1.77 $ 1.72
Net income ............................ .12 2.71 .83 .54 1.58
Cash dividends paid ................... 1.79 1.75 1.70 1.64 1.45
Book value ............................ 13.00 14.87 13.79 14.48 16.15
Market value .......................... 82.75 50.38 51.88 59.00 50.69
CASH FLOW AND BALANCE SHEET DATA
Capital spending ...................... $ 817.6 $ 857.3 $ 1,107.5 $ 1,040.4 $ 871.2
Depreciation .......................... 581.7 635.9 596.1 578.8 619.3
Cash provided by operations ........... 931.6 913.7 1,090.3 1,195.6 1,314.1
Long-term debt ........................ 1,984.7 2,085.4 3,403.0 3,140.1 3,329.8
Stockholders' equity .................. 3,650.4 4,134.9 3,810.7 3,996.7 4,444.0
Total assets .......................... 11,439.2 12,555.7 13,210.4 12,559.4 12,467.0
NOTES:
All financial information, except cash dividends paid per share, has been
restated to include the results of Scott Paper Company for all periods presented
prior to the merger on December 12, 1995. Cash dividends paid per share
represent the historical dividends paid by Kimberly-Clark. The merger has been
accounted for as a pooling of interests as described in Note 2 to the Financial
Statements.
Restructuring and other unusual charges for 1995 and 1993 are described in Note
3 to the Financial Statements. The 1992 restructuring charge related to a plan
to strengthen the Corporation's competitive position in consumer and service
products operations in Europe and certain operations in North America. The 1991
charge relates to Scott's business improvement program. Excluding the
restructuring and other unusual charges, income from continuing operations per
share was $3.95 in 1995, $2.05 in 1993, $2.39 in 1992 and $2.30 in 1991.
The 1992 consolidated income statement includes net charges for the cumulative
effects of accounting changes related to the Corporation's adoption of SFAS 106,
`Employers' Accounting for Postretirement Benefits Other Than Pensions'' and
SFAS 109, `Accounting for Income Taxes''.
In 1994, the sale of S.D. Warren Company, a former printing and publishing
papers subsidiary, was completed as described in Note 13 to the Financial
Statements. S. D. Warren Company's results have been segregated and reported as
discontinued operations for all periods presented.
The 1994 and 1993 consolidated income statements include extraordinary losses
for early extinguishment of debt as described in Note 6 to the Financial
Statements.
CONSOLIDATED INCOME STATEMENT
Kimberly-Clark Corporation and Subsidiaries
Year Ended December 31
-------------------------------------
1995 1994 1993
(Millions of dollars except per share amounts) Note 2
- ---------------------------------------------------------------------------------------------------------
NET SALES ...................................................... $13,788.6 $ 11,979.2 $11,646.8
Cost of products sold ......................................... 8,828.1 7,793.7 7,540.1
--------- ----------- -----------
GROSS PROFIT ................................................... 4,960.5 4,185.5 4,106.7
Advertising, promotion and selling expenses .................. 2,496.5 2,144.0 2,211.3
Research expense ............................................. 207.2 208.8 208.7
General expense .............................................. 603.8 555.6 573.3
Restructuring and other unusual charges ...................... 1,440.0 - 378.9
--------- ----------- ------------
OPERATING PROFIT ............................................... 213.0 1,277.1 734.5
Interest expense ............................................. (245.5) (270.5) (249.5)
Other income (expense), net .................................. 136.9 141.3 7.4
--------- ----------- ------------
INCOME BEFORE INCOME TAXES ..................................... 104.4 1,147.9 492.4
Provision for income taxes ................................... 153.5 464.9 255.0
--------- ----------- ------------
INCOME (LOSS) BEFORE EQUITY INTERESTS .......................... (49.1) 683.0 237.4
Share of net income of equity companies ...................... 113.3 110.5 76.1
Minority owners' share of subsidiaries' net income ........... (31.0) (27.0) (26.3)
--------- ----------- ------------
INCOME FROM CONTINUING OPERATIONS BEFORE
EXTRAORDINARY LOSS ............................................. 33.2 766.5 287.2
Income (loss) of discontinued operation, net of income taxes . - 48.4 (46.6)
--------- ----------- ------------
INCOME BEFORE EXTRAORDINARY LOSS ............................... 33.2 814.9 240.6
Extraordinary loss, net of income taxes ...................... - (61.1) (9.6)
--------- ----------- ------------
NET INCOME ..................................................... $ 33.2 $ 753.8 $ 231.0
========= =========== ============
PER SHARE BASIS
Income from continuing operations before
extraordinary loss ......................................... $ .12 $ 2.76 $ 1.03
Income (loss) from discontinued operation .................... - .17 (.17)
Extraordinary loss ........................................... - (.22) (.03)
--------- ------------ -----------
NET INCOME ................................................... $ .12 $ 2.71 $ .83
========= ============ ===========
CONSOLIDATED BALANCE SHEET
Kimberly-Clark Corporation and Subsidiaries
December 31
-----------------------
1995 1994
(Millions of Dollars) ASSETS Note 2
- -----------------------------------------------------------------------------------------------------
CURRENT ASSETS
Cash and cash equivalents .............................................. $ 221.6 $ 1,137.8
Accounts receivable .................................................... 1,678.0 1,468.1
Inventories ............................................................ 1,426.1 1,258.4
Deferred income tax benefits ........................................... 335.3 254.4
Prepaid expenses and other ............................................. 152.8 99.0
----------- -----------
TOTAL CURRENT ASSETS ................................................... 3,813.8 4,217.7
----------- -----------
PROPERTY
Land and timberlands ................................................... 289.1 283.8
Buildings .............................................................. 1,728.6 1,743.5
Machinery and equipment ................................................ 8,601.1 9,130.1
Construction in progress ............................................... 301.1 441.8
----------- -----------
10,919.9 11,599.2
Less accumulated depreciation .......................................... 4,866.6 4,724.4
----------- -----------
NET PROPERTY ......................................................... 6,053.3 6,874.8
INVESTMENTS IN EQUITY COMPANIES .......................................... 413.4 555.3
ASSETS HELD FOR SALE...................................................... 330.2 -
GOODWILL, DEFERRED CHARGES AND OTHER ASSETS .............................. 828.5 907.9
----------- -----------
$ 11,439.2 $ 12,555.7
=========== ===========
See Notes to Financial Statements.
December 31
-----------------------
1995 1994
LIABILITIES AND STOCKHOLDERS' EQUITY Note 2
- ----------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Debt payable within one year ........................................... $ 817.8 $ 1,567.5
Trade accounts payable ................................................. 888.3 785.8
Other payables ......................................................... 215.3 201.5
Accrued expenses ....................................................... 1,555.3 1,147.8
Accrued income taxes ................................................... 320.7 417.0
Dividends payable ...................................................... 72.2 70.5
----------- ----------
TOTAL CURRENT LIABILITIES ............................................ 3,869.6 4,190.1
----------- -----------
LONG-TERM DEBT ........................................................... 1,984.7 2,085.4
----------- -----------
NONCURRENT EMPLOYEE BENEFIT AND OTHER OBLIGATIONS ........................ 974.9 1,044.7
----------- -----------
DEFERRED INCOME TAXES .................................................... 723.1 932.1
----------- -----------
MINORITY OWNERS' INTERESTS IN SUBSIDIARIES ............................... 236.5 168.5
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock - no par value - authorized 20.0 million shares,
none issued .......................................................... - -
Preferred stock of a subsidiary, redeemed in 1995 ...................... - 7.1
Common stock - $1.25 par value - authorized 600.0 million shares,
issued 282.3 million at December 31, 1995; authorized 300.0 million
shares, issued 280.5 million at December 31, 1994 .................... 352.9 350.7
Additional paid-in capital ............................................. 419.0 384.8
Common stock held in treasury, at cost - 1.5 million and 2.4 million
shares at December 31, 1995 and 1994, respectively ................... (74.9) (88.0)
Unrealized currency translation adjustments ............................ (640.5) (565.0)
Retained earnings ...................................................... 3,593.9 4,045.3
----------- ----------
TOTAL STOCKHOLDERS' EQUITY ........................................... 3,650.4 4,134.9
----------- ----------
$ 11,439.2 $ 12,555.7
=========== ==========
CONSOLIDATED CASH FLOW STATEMENT
Kimberly-Clark Corporation and Subsidiaries
Year Ended December 31
-------------------------------------
1995 1994 1993
(Millions of dollars) Note 2
- -----------------------------------------------------------------------------------------------------
OPERATIONS
Net income .................................................. $ 33.2 $ 753.8 $ 231.0
Restructuring and other unusual charges, net of cash
expended ................................................. 1,353.8 - 378.9
Depreciation ................................................ 581.7 635.9 596.1
Extraordinary loss on early extinguishment of debt
(net of income taxes) ..................................... - 61.1 9.6
Deferred income tax benefit ................................. (330.0) (78.6) (57.8)
Gains on asset sales ........................................ (118.5) (107.9) -
Equity companies' earnings in excess of dividends paid ...... (57.6) (60.5) (20.5)
Minority owners' share of subsidiaries' net income .......... 31.0 27.0 26.3
Changes in operating working capital ........................ (527.9) (215.9) (61.2)
Pension funding in excess of expense ........................ (89.0) (101.0) (43.9)
Other ....................................................... 54.9 (.2) 31.8
--------- --------- ----------
CASH PROVIDED BY OPERATIONS ............................. 931.6 913.7 1,090.3
--------- --------- ----------
INVESTING
Capital spending ............................................ (817.6) (857.3) (1,107.5)
Acquisitions of businesses .................................. (76.1) (118.0) -
Proceeds from disposition of property and businesses ........ 336.1 1,936.4 33.8
Other ....................................................... 3.8 (2.4) (125.5)
--------- --------- -----------
CASH PROVIDED BY (USED FOR) INVESTING ................... (553.8) 958.7 (1,199.2)
--------- --------- ----------
FINANCING
Cash dividends paid ......................................... (348.2) (341.8) (332.9)
Changes in debt payable within one year ..................... (25.2) (111.9) 250.2
Increases in long-term debt ................................. 80.7 226.6 439.2
Decreases in long-term debt ................................. (944.0) (586.7) (244.7)
Premiums paid on early extinguishment of debt and interest
rate swaps ................................................ - (59.3) -
Proceeds from exercise of stock options ..................... 121.4 53.4 7.1
Acquisition of common stock for the treasury ................ (137.8) (52.2) (.8)
Other ....................................................... (40.9) (31.1) (23.6)
--------- --------- ----------
CASH PROVIDED BY (USED FOR) FINANCING ................... (1,294.0) (903.0) 94.5
--------- --------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .............. $ (916.2) $ 969.4 $ (14.4)
========= ========= ==========
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Kimberly-Clark
Corporation and all subsidiaries which are more than 50 percent owned and
controlled. Investments in significant nonconsolidated companies which are at
least 20 percent owned are stated at cost plus equity in undistributed net
income. These latter companies are referred to as equity companies.
All financial information includes the results of Scott Paper Company
(`Scott'') for all periods presented prior to the merger on December 12, 1995
(see Note 2). The merger has been accounted for as a pooling of interests.
Scott's fiscal year is a 52- or 53-week year ending on the last Saturday in
December. Certain of Scott's international subsidiaries have a fiscal year
based on the twelve months ending November 30.
Financial statement preparation requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingencies at the date of the financial statements and the
reported amounts of net sales and expenses during the reporting period.
Differences from those estimates are recorded in the period they become known.
ADVERTISING AND PROMOTION EXPENSES
Advertising and promotion expenses are charged to income during the year in
which they are incurred.
PER SHARE DATA
Per share data are based on the average number of common shares outstanding,
which was
279.5 million, 278.2 million and 277.1 million for the years ended December 31,
1995, 1994 and 1993, respectively.
INVENTORIES
U.S. inventories valued at cost on the Last-In, First-Out (LIFO) method for U.S.
income tax purposes are valued in the same manner for financial reporting
purposes. The balance of the U.S. inventories and inventories of consolidated
operations outside the U.S. are valued at the lower of cost, generally using the
First-In, First-Out (FIFO) method, or market.
PROPERTY AND DEPRECIATION
Property, plant and equipment are stated at cost. Depreciable property is
depreciated on the straight-line or units-of-production method for financial
reporting purposes and generally on an accelerated method for income tax
purposes. When property is sold or retired, the cost of the property and the
related accumulated depreciation are removed from the balance sheet and any gain
or loss on the transaction is included in income.
GOODWILL, DEFERRED CHARGES AND OTHER ASSETS
Goodwill is amortized over various periods not exceeding 40 years. The
realizability of goodwill is evaluated periodically to assess recoverability
and, if warranted, impairment would be recognized.
Costs of bringing certain significant new or expanded facilities into operation
are recorded as deferred charges and amortized to income over periods of not
more than five years.
ENVIRONMENTAL EXPENDITURES
Environmental expenditures related to current operations which qualify as
property, plant and equipment or which substantially increase the economic value
or extend the useful life of an asset are capitalized, and all other
expenditures are expensed as incurred. Environmental expenditures that relate
to an existing condition caused by past operations are expensed. Liabilities
are recorded when environmental assessments and/or remedial efforts are
probable, and the costs can be reasonably estimated. Generally, the timing of
these accruals coincides with completion of a feasibility study or a commitment
to a formal plan of action.
ACCOUNTING STANDARDS CHANGE
In 1995, the Corporation adopted Statement of Financial Accounting Standards
(`SFAS'') 121, ``Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of''(``SFAS 121''). This standard specifies
when assets should be reviewed for impairment, how to determine if an asset is
impaired, how to measure an impairment loss, and what disclosures are necessary
in the financial statements. See Note 3 for the effect of adoption.
The Corporation intends to adopt SFAS 123, `Accounting for Stock-Based
Compensation''effective January 1, 1996, and to continue to measure
compensation cost for stock options and awards based on intrinsic value under
Accounting Principles Board Opinion 25, `Accounting for Stock Issued to
Employees.''
NOTE 2. BUSINESS COMBINATION
Effective December 12, 1995, the Corporation issued 119.7 million shares of its
common stock for all of the outstanding common stock of Scott, a worldwide
producer of sanitary tissue products. Scott shareholders received .78 of a
share of the Corporation's common stock for each share of Scott's common stock,
for a total value of $9.4 billion. All Scott outstanding preferred shares were
redeemed for cash prior to the merger. The merger qualified as a tax-free
reorganization and has been accounted for as a pooling of interests.
Accordingly, the Corporation's consolidated financial statements have been
restated for all periods prior to the business combination to include the
results of operations, financial positions, and cash flows of Scott. Net sales
and earnings data for Kimberly-Clark and subsidiaries and Scott and subsidiaries
prior to the merger are displayed in the following table. Since the merger was
effective on December 12, 1995, the table reflects the net sales and earnings
data for the entire year of 1995. Operations from December 12, 1995 to year-end
would not have a material impact on the data presented.
(Millions of dollars, except per share amounts) 1995 1994 1993
- -----------------------------------------------------------------------------------------------------
Net sales:
Kimberly-Clark ............................................. $ 8,494.6 $ 7,399.6 $ 7,005.5
Scott ..................................................... 4,131.6 3,581.1 3,584.9
Reclassifications/adjustments ............................. 1,162.4 998.5 1,056.4
---------- ---------- -----------
Total .................................................. $ 13,788.6 $ 11,979.2 $ 11,646.8
========== ========== ===========
Income before extraordinary items:
Kimberly-Clark ............................................ $ 627.2 $ 535.1 $ 510.9
Scott ..................................................... 472.2 270.9 (289.1)
Reclassifications/adjustments ............................. 4.7 8.9 18.8
Restructuring and other unusual charge,
net of income taxes and minority interests .............. (1,070.9) - -
---------- ----------- -----------
Total ................................................. $ 33.2 $ 814.9 $ 240.6
========== =========== ===========
Net income:
Kimberly-Clark ............................................ $ 627.2 $ 535.1 $ 510.9
Scott ..................................................... 472.2 209.8 (277.0)
Reclassifications/adjustments ............................. 4.7 8.9 (2.9)
Restructuring and other unusual charge,
net of income taxes and minority interests .............. (1,070.9) - -
---------- ----------- -----------
Total .................................................. $ 33.2 $ 753.8 $ 231.0
========== =========== ===========
Per share basis:
Income before extraordinary items ......................... $ .12 $ 2.93 $ .86
Net income ................................................ .12 2.71 .83
The consolidated financial information presented above reflects accounting
adjustments and reclassifications to conform the accounting practices of Scott
to those of Kimberly-Clark. Adjustments are (1) to conform the date of adoption
of SFAS 109, `Accounting for Income Taxes;'' (2) to conform the method of
adoption of SFAS 106, `Employers' Accounting for Postretirement Benefits Other
than Pensions;''(3) to conform Scott's treatment of disposals of property,
plant and equipment to Kimberly-Clark's accounting practices; and (4) to conform
Scott's accounting treatment for (i) amortization of start-up costs, (ii) the
cost of dispensers issued to customers, (iii) the timing of cost recognition for
certain promotional expenses, and (iv) certain income tax practices.
In addition, certain reclassifications have been made to conform prior year data
for Scott to Kimberly-Clark's presentation. The reclassification to net sales
includes certain trade promotion costs Scott included as a reduction in net
sales which Kimberly-Clark classifies as advertising, promotion and selling
expenses. Gains or losses on dispositions of Scott property were reclassified
to other income (expense).
The following table indicates the effect of the conforming accounting
adjustments on consolidated net income and stockholders' equity:
1992
and Prior
Equity
(Millions of dollars) 1995 1994 1993 Impact
- --------------------------------------------------------------------------------------------------------
Increase (decrease) in net income or equity:
SFAS 106 .................................................$ 4.7 $51.3 $ 25.6 $ (166.7)
SFAS 109 ................................................ - - (21.7) 21.7
Income tax accounting .................................... - (42.4) (6.8) (24.1)
Other conforming adjustments ............................. - - - (50.2)
------ ------ ------- --------
Total ..................................................$ 4.7 $ 8.9 $ (2.9) $ (219.3)
====== ====== ======= ========
A cumulative effect of conforming accounting practices of $223.5 million has
been charged to retained earnings and $4.2 million has been credited to
unrealized currency translation adjustments as of or prior to December 31, 1992.
NOTE 3. RESTRUCTURING AND OTHER UNUSUAL CHARGES
In the fourth quarter of 1995, the Corporation recorded a one time-pretax charge
of $1,440.0 million ($1,070.9 million after income taxes and minority interests,
or $3.83 per share) for the estimated costs of the merger with Scott, for
restructuring the combined operations, and for other unusual charges. The
charge includes: (i) the costs of plant rationalizations and employee
terminations to eliminate duplicate facilities and excess capacity; (ii) losses
in connection with compliance with consent decrees of the U.S. Justice
Department and the European Commission; (iii) costs of terminating leases,
contracts, and other long-term agreements; (iv) the direct costs of the merger,
including the fees of investment bankers, outside legal counsel and independent
auditors; (v) impaired asset charges; and (vi) other unusual charges.
In 1993, Scott recorded a charge for its planned restructuring and productivity
improvement programs. The plan included the estimated costs to reduce its
workforce as well as the costs to realign and shut down some older and
inefficient assets. The total pretax cost of the charge was $467.4 million;
$378.9 million of the cost was charged to operating profit, and $88.5 million
applicable to S.D. Warren Company (`S.D. Warren'') was included in the results
of operations of S.D. Warren presented as a discontinued operation.
The restructuring and other unusual charges consisted of the following:
Year Ended December 31
------------------------
(Millions of dollars) 1995 1993
- -------------------------------------------------------------------------------------------------------
Restructuring charges:
Cost of workforce reduction ................................................ $ 127.8 $ 285.9
Losses on mills and facilities to be disposed of .......................... 211.8 -
Write-down of property, plant and equipment ................................ 169.7 49.0
Costs of contract and lease terminations .................................. 76.4 -
Other ...................................................................... 40.6 44.0
--------- --------
Total restructuring charges ............................................... 626.3 378.9
--------- --------
Other unusual charges:
Fees and expenses of the Scott merger ...................................... 80.7 -
Write-down of property, plant and equipment and other assets ............... 279.4 -
Asset impairments .......................................................... 158.3 -
Costs of contract and lease terminations ................................... 66.1 -
Employee severance and related costs ........................................ 92.4 -
Losses on disposals required by regulatory bodies ......................... 81.8 -
Other ...................................................................... 55.0 -
--------- --------
Total other unusual charges ............................................ 813.7 -
--------- --------
Total restructuring and other unusual charges................................. $ 1,440.0 $ 378.9
========= ========
The principal costs included in the 1995 restructuring charge are as follows:
The costs for workforce reduction are primarily comprised of severance
payments for 2,700 duplicate staff and sales positions. Communication of
these planned workforce reductions took place no later than December 31, 1995,
and severance payments are expected to be substantially completed by the end
of 1996.
Losses on mills and facilities to be disposed of include the write-down to
estimated net realizable value of nine mills in Europe and Canada and a
research facility in the U.S. Sale or closure of these facilities is required
to eliminate excess capacity and inefficient operations in the combined
company.
The write-down of property, plant and equipment represents the net book value
of less efficient and duplicate machinery and equipment not needed in the
combined restructured manufacturing operations. About 60 percent of these
assets relate to the Tissue-Based Products business segment.
The costs of contract and lease terminations are comprised primarily of the
estimated costs of terminating long-term leases for Scott's Wilmington,
Delaware and Boca Raton, Florida office facilities and terminating sales
distributor contracts.
The principal costs comprising the 1995 other unusual charges are as follows:
Fees and expenses represent the costs of investment bankers that advised Scott
and Kimberly-Clark on the merger, independent legal counsel engaged in the
merger and independent auditors for work on the joint proxy
statement/prospectus and due diligence work concerning the merger.
The write-down of property, plant and equipment and other assets represents
principally losses associated with elimination of inefficient and excess
tissue-making capacity at a Scott facility in Canada, the write-down of
certain assets at Scott facilities which do not meet Kimberly-Clark's
environmental standards, assets that become obsolete as a result of the
merger, or which will no longer be used, and additional allowances related to
Scott accounts receivable to facilitate an orderly and satisfactory transfer
of customer relationships to Kimberly-Clark. About 70 percent of the assets
relate to the Tissue-Based Products business segment.
Asset impairments represent charges arising from adoption of SFAS 121. The
impaired asset charges are for mills or operations whose future cash flows are
estimated to be insufficient to cover their carrying amounts. The two most
significant items included in the impairment write-down are a Scott tissue
mill in the U.S. and the Scott pulp mill in Spain. One of these facilities
has been written down to its estimated fair value, based on the Corporation's
assessment of expected pretax future cash flows discounted at a rate
commensurate with the risk involved. The other mill has negative estimated
future cash flows (undiscounted), and consequently the entire cost of the mill
was written off.
Contract and lease terminations primarily represent the cost of terminating an
operating lease for a deinking facility related to the Scott tissue mill
referred to above and a provision for estimated losses on disputed items on
the 1994 sale of a Scott business.
Employee severance and related costs are comprised primarily of the estimated
costs of downsizing operations. Commitments regarding the downsizing had been
made by the Corporation no later than December 31, 1995.
Losses on disposals required by regulatory bodies represent the estimated
costs associated with compliance with consent decrees of the U.S. Justice
Department and the European Commission. These agreements require the sale of
the Scott Baby Fresh baby wipes and Scotties facial tissue operations in the
U.S. and the Kleenex Velvet bathroom tissue business in the United Kingdom and
Ireland. Under the agreements, Scott's baby wipes mill in Dover, Delaware and
Kimberly-Clark' s bathroom tissue mill in Prudhoe, England must be sold, as
well as up to two of four other tissue mills located in the U.S. The terms of
the sale of the latter group of mills will permit the buyer(s) to select the
mills they wish to buy. Depending on the choices made by the buyer(s), other
changes to the size and manner of operation of the retained tissue mills may
be required. The estimated loss represents management's current estimate of
the most likely choices to be made by the buyer(s), the estimated sales values
of the mills, and the related implications on the retained tissue mills.
Management expects to sell both the Dover and Prudhoe mills at gains, and such
gains will not be recognized until realized.
The calculation of estimated net realizable value of (i) mills to be disposed
of in accordance with consent decrees of the U.S. Justice Department and the
European Commission, (ii) mills to be disposed of to eliminate inefficient
operations or duplicate facilities, and (iii) other property, plant and
equipment required management to make estimates of proceeds from the sale of
such assets. Selling price estimates in excess of the book value of a
particular facility or group of facilities, as appropriate, were not assumed
in the calculation of net realizable values. Selling price estimates were
based on reviews of selling prices of comparable mills or facilities and on
consideration of the time horizon required to complete the transaction. In
situations involving proprietary technology or custom machinery and equipment
or where only a portion of an ongoing facility is to be disposed of, no sales
proceeds were assumed. If realized sales proceeds fall short or exceed
management's estimates, the losses accrued with respect to these asset
disposals will require adjustment in the period of the change.
The restructuring and other unusual charge accruals were $610.7 million and
$108.6 million at December 31, 1995 and 1994, respectively. The 1995 accrual
relates primarily to severance cost of $220.2 million, contract termination
costs of $142.5 million and other costs of $248.0 million. These costs are
expected to be paid by the end of 1996.
The balance of the 1995 restructuring and other unusual charge is contained in
assets held for sale, property, plant and equipment and goodwill, deferred
charges and other assets on the consolidated balance sheet.
More than 75 percent of the 1994 accrual related to costs of workforce
reductions. During 1995, all but $13.4 million of the remaining severance was
paid. The balance of the 1994 accrual was used in 1995 as property and other
assets were disposed of.
NOTE 4. INCOME TAXES
An analysis of the provision (benefit) for income taxes follows:
Year Ended December 31
-----------------------------
(Millions of dollars) 1995 1994 1993
- ---------------------------------------------------------------------------------------------------
......................................................
Current income taxes:
United States ....................................................... $280.3 $429.0 $184.0
State ............................................................... 43.7 44.6 44.3
Other countries ..................................................... 159.5 62.6 68.0
------ ------ ------
Total ............................................................. 483.5 536.2 296.3
------ ------ ------
Deferred income taxes:
United States ....................................................... (133.2) (74.2) (39.3)
State ............................................................... (48.2) (6.6) 2.8
Other countries ..................................................... (148.6) 2.2 (21.3)
------ ------ ------
Total ............................................................. (330.0) (78.6) (57.8)
------ ------ ------
Total provision for income taxes....................................... 153.5 457.6 238.5
Less income taxes related to:
Discontinued operation ............................................... - 28.5 (11.3)
Extraordinary loss .................................................. - (35.8) (5.2)
------ ------ ------
Total provision for income taxes - continuing operations .......... $153.5 $464.9 $255.0
====== ====== ======
Income (loss) before income taxes is included in the financial statements as
follows:
(Millions of dollars) 1995 1994 1993
- ---------------------------------------------------------------------------------------------------
Continuing Operations:
United States ................................................. $ 42.5 $ 976.0 $ 477.2
Other countries ............................................... 61.9 171.9 15.2
-------- --------- -------
$ 104.4 $ 1,147.9 $ 492.4
======== ========= =======
Discontinued Operation:
United States ................................................. $ - $ 71.6 $ (53.7)
Other countries ............................................... - 5.3 (4.2)
-------- --------- -------
$ - $ 76.9 $ (57.9)
======== ========= =======
Extraordinary Loss - United States .............................. $ - $ (96.9) $ (14.8)
======== ========= =======
Deferred income tax assets (liabilities) as of
December 31, 1995 and 1994 are comprised of the following:
(Millions of dollars) 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
Current deferred income tax assets attributable to:
Advertising and promotion accruals .................................................... $ 32.8 $ 31.1
Pension, postretirement and other employee benefits .................................. 64.9 92.2
Other accrued liabilities, including restructuring and
other unusual charges .............................................................. 250.0 105.0
Other ................................................................................ 39.3 48.0
Valuation allowances ................................................................. (51.7) (21.9)
---------- ----------
Net current deferred income tax asset .............................................. $ 335.3 $ 254.4
========== ==========
Noncurrent deferred income tax assets (liabilities) attributable to:
Accumulated depreciation ............................................................. $ (950.2) $ (1,181.3)
Operating loss carryforwards ......................................................... 289.6 337.6
Other postretirement benefits ........................................................ 298.0 285.7
Installment sales .................................................................... (137.9) (137.9)
Other ................................................................................ (13.6) (31.5)
Valuation allowances ................................................................. (209.0) (204.7)
---------- ----------
Net noncurrent deferred income tax liability ....................................... $ (723.1) $ (932.1)
=========== ==========
The valuation allowances for deferred income tax assets increased by $34.1
million in 1995 and by $18.3 million in 1994. Valuation allowances relate to
the potentially unusable portion of tax loss carryforwards of $824.1 million
which are in jurisdictions outside the United States. If not utilized against
taxable income, $353.6 million of this amount will expire from 1996 through
2000. The remaining $470.5 million has no expiration date.
Realization of deferred tax assets is dependent on generating sufficient taxable
income prior to expiration of the loss carryforwards. Although realization is
not assured, management believes it is more likely than not that all of the
deferred tax asset, net of applicable valuation allowance, will be realized.
The amount of the deferred tax asset considered realizable could be reduced or
increased
if estimates of future taxable income during the carryforward period are reduced
or are increased.
A reconciliation of income tax computed at the U.S. federal statutory tax rate
to the provision for income taxes applicable to continuing operations is as
follows:
1995 1994 1993
--------------------- -------------------- -------------------
(Millions of dollars) Amount Percent Amount Percent Amount Percent
- --------------------------------------------------------------------------------------------------------------------
............................
Income before income taxes:
As reported ....................... $ 104.4 $ 1,147.9 $ 492.4
Add back restructuring and other
unusual charges ................. 1,440.0 - 378.9
---------- --------- -------
Income before income taxes
excluding restructuring and
other unusual charges ....... $ 1,544.4 $ 1,147.9 $ 871.3
========== ========= =======
Tax at U.S. statutory rate(a) ....... $ 540.5 35.0% $ 401.8 35.0% $ 305.0 35.0%
State income taxes, net of federal
tax benefit ........................ 34.2 2.2 28.2 2.5 26.8 3.1
Operating losses for which no tax
benefit was recognized ............. 10.9 .7 53.6 4.7 44.7 5.1
Net operating losses realized ....... (70.6) (4.6) (21.7) (1.9) (4.0) (.5)
U.S. federal income tax rate
increase ........................ - - - - 19.3 2.2
Increase in income tax liabilities
for Scott .......................... - - 42.4 3.7 6.8 .8
Other - net ......................... (1.5) (.1) (39.4) (3.5) (47.9) (5.4)
---------- ------ -------- ------ ------- -----
513.5 33.2% 464.9 40.5% 350.7 40.3%
====== ====== ====
Tax benefit of restructuring and
other unusual charges(b) .......... (360.0) 25.0% - (95.7) 25.3%
---------- -------- -------
Provision for income taxes ......... $ 153.5 147.0% $ 464.9 40.5% $ 255.0 51.8%
========== ========= =======
(a) Tax at U.S. statutory rate is based on income before income taxes excluding
the restructuring and other unusual charges of $1,440 million in 1995 and
$378.9 million in 1993. The tax benefit of such items is shown elsewhere in
the table.
(b) The effective rate for the tax benefit attributable to the restructuring
and other unusual charges in 1995 and 1993 is lower than the statutory rate
of 35.0 percent because certain costs and fees are not deductible and others
relate to operations in countries in which the Corporation has income tax
loss carryforwards for which there are related valuation allowances.
At December 31, 1995, income taxes have not been provided on $1,630 million of
permanently invested unremitted net income of subsidiaries operating outside the
U.S. These earnings could become subject to additional tax if they were
remitted as dividends, were lent to the Corporation or
a U.S. affiliate, or if the Corporation were to sell its stock in the
subsidiaries. Any resulting U.S. or foreign tax liability would be largely
offset by U.S. foreign tax credits.
NOTE 5. POSTRETIREMENT AND OTHER BENEFITS
DEFINED-BENEFIT RETIREMENT PLANS
The Corporation and its subsidiaries in North America and the United Kingdom
have defined-benefit retirement plans covering substantially all full-time
employees. Plans covering U.S. salaried employees provide pension benefits
based on years of service (only through December 31, 1994 for certain employees
participating in the defined contribution retirement plan discussed later in
this note) and compensation during the final years of employment. Plans
covering U.S. hourly employees provide benefits of stated amounts for each year
of service or benefits based on years of service and compensation during the
final years of employment. For plans in North America and the United Kingdom,
the funding policy is to contribute assets that, at a minimum, fully fund the
accumulated benefit obligation, subject to regulatory and tax deductibility
limits. The policy for the remaining plans is to fund them based on legal
requirements, tax considerations, local practices and investment opportunities.
Assets held in the pension trusts are comprised principally of common stocks,
high-grade corporate and government bonds, real estate funds and various short-
term investments.
Most other subsidiaries outside the U.S. have pension plans or, in certain
countries, termination pay plans covering substantially all full-time employees.
Obligations under such plans are provided for by contributing to trusts,
purchasing insurance policies, or recording liabilities.
The components of net pension cost were as follows:
Year Ended December 31
----------------------------
(Millions of dollars) 1995 1994 1993
- ----------------------------------------------------------------------------------------------------
.......................................................
Benefits earned ...................................................... $ 78.0 $ 103.7 $ 92.3
Interest on projected benefit obligation ............................. 249.8 225.8 223.5
Amortizations and other .............................................. 4.0 12.7 7.6
------- ------- -------
331.8 342.2 323.4
Less expected return on plan assets (actual return on plan assets
was a $521.7 million gain in 1995, a $3.4 million loss in 1994,
and a $400.9 million gain in 1993) ................................. 276.1 258.7 243.4
------- ------- -------
Net pension cost ..................................................... $ 55.7 $ 83.5 $ 80.0
======= ======= =======
The weighted average assumptions used to determine net pension costs were as
follows:
1995 1994 1993
- -----------------------------------------------------------------------------------------------------
Expected long-term rate of return on plan assets.................. 10.2% 9.8% 10.3%
Discount rate .................................................... 8.7% 7.4% 8.5%
Assumed rate of increase in compensation levels .................. 5.4% 4.3% 5.2%
Transition adjustments are being amortized on the straight-line method over 14
to 21 years. Prior service cost is being amortized on a straight-line basis
over the participant's average remaining service period for plans with
compensation-related benefit formulas and over seven years for certain other
plans.
The funded status of the plans is presented below as of December 31:
1995 Plans Where 1994 Plans Where
------------------ ----------------------
Assets ABO Assets ABO
Exceed Exceeds Exceed Exceeds
(Millions of dollars) ABO Assets ABO Assets
- ----------------------------------------------------------------------------------------------------------------------
Actuarial present value of plan benefits:
Accumulated benefit obligation (ABO):
Vested .................................................. $1,638.5 $1,289.8 $1,412.0 $1,152.5
Nonvested ............................................... 36.9 40.1 28.2 46.4
-------- -------- -------- --------
Total ................................................. $1,675.4 $1,329.9 $1,440.2 $1,198.9
======== ======== ======== ========
Projected benefit obligation ................................. $1,974.0 $1,398.9 $1,755.2 $1,281.5
Plan assets at fair value .................................... 1,832.6 1,193.5 1,601.3 1,000.7
-------- -------- -------- --------
Projected benefit obligation in excess of
plan assets ............................................... $ (141.4) $ (205.4) $ (153.9) $ (280.8)
======== ======== ======== ========
Consisting of:
Unfavorable actuarial experience ........................ $ (261.5) $ (94.2) $ (260.7) $ (90.3)
Unamortized transition adjustments ...................... 4.0 21.9 5.2 28.1
Unamortized prior service costs ......................... (20.7) (19.3) (21.5) (22.5)
Net prepaid (accrued) pension costs ..................... 136.8 (175.1) 123.1 (240.2)
Adjustment for minimum liability ........................ - 61.3 - 44.1
-------- -------- -------- --------
Total ................................................. $ (141.4) $ (205.4) $ (153.9) $ (280.8)
========= ======== ========= =========
The weighted average assumptions used to determine the projected benefit
obligation were as follows:
December 31
------------------------------
1995 1994
- ------------------------------------------------------------------------------------------------------------
Discount rate(a) ..................................................... 7.5% 8.7%
Assumed rate of increase in compensation ............................. 4.4% 5.4%
(a)Weighted average discount rates for U.S. plans were 7.25% and 8.64% at
December 31, 1995 and 1994, respectively.
The Corporation's 1995 and 1993 restructuring and other unusual charges
described in Note 3 included $18.1 million and $109.7 million, respectively, of
costs for enhanced termination pension benefits and curtailment losses. The
above pension cost associated with the 1995 and 1993 charges increased the
Corporation's accrued pension cost.
DEFINED CONTRIBUTION RETIREMENT PLANS
Effective January 1, 1995, certain U.S. salaried employees were covered by a
defined contribution retirement plan. The Corporation's contributions to the
plan are based on age and compensation. The total 1995 contribution charged to
expense was $9.7 million.
POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
Substantially all retired employees of the Corporation and its North American
subsidiaries and certain international employees are covered by health care and
life insurance benefit plans. Benefits are based on years of service and age at
retirement. The plans are principally noncontributory for current retirees, and
are contributory for most future retirees. Certain U.S. plans place a limit on
the Corporation's cost of future annual per capita retiree medical benefits at
no more than 200 percent of the 1992 annual per capita cost. Certain other U.S.
plans place a limit on the Corporation's future cost for retiree medical
benefits to a defined annual per capita medical cost.
The Scott accounting for health care and life insurance benefits plans has been
restated to conform to Kimberly-Clark's accounting practice by adopting SFAS 106
in 1992 and recognizing the transition obligation as a cumulative effect of
adopting SFAS 106. Previously, Scott was amortizing the transition obligation
over 16 years.
The components of postretirement health care and life insurance benefit costs
were as follows:
Year Ended December 31
--------------------------
(Millions of dollars) 1995 1994 1993
- ----------------------------------------------------------------------------------------------------
Benefits earned ....................................................... $ 10.3 $ 17.5 $ 15.7
Interest on accumulated postretirement benefit obligation ............. 54.6 47.3 52.2
Amortization .......................................................... (.8) (.4) (1.1)
-------- ------- -------
Net postretirement benefit costs (of which $49.9 million, $48.5 million
and $42.0 million were paid in 1995, 1994 and 1993, respectively) ... $ 64.1 $ 64.4 $ 66.8
======== ======= =======
The components of the postretirement health care and life insurance benefit
obligation are presented below:
December 31
-----------------
(Millions of dollars) 1995 1994
- -----------------------------------------------------------------------------------------------------
Accumulated postretirement benefit obligation:
Retirees ...................................................................... $503.1 $448.7
Fully eligible active plan participants ....................................... 76.1 66.4
Other active plan participants ................................................ 144.3 128.8
------ ------
Total ....................................................................... 723.5 643.9
Favorable actuarial experience .................................................. 23.2 91.9
Unrecognized prior service gain ................................................. 26.9 31.8
------ ------
Total accrued postretirement benefit liability .................................. 773.6 767.6
Less current portion ............................................................ 59.7 49.4
------ ------
Noncurrent portion .............................................................. $713.9 $718.2
====== ======
Weighted average discount rates used to determine the accumulated postretirement
benefit obligation for all plans were 7.31% and 8.67% at December 31, 1995 and
1994, respectively. The rates used for the U.S. plans were 7.25% and 8.64% at
December 31, 1995 and 1994, respectively.
The December 31, 1995 accumulated postretirement benefit obligation for the
historical Kimberly-Clark U.S. plans was determined using an assumed health care
cost trend rate of 9.8% in 1996, declining to zero in 2002 and thereafter, which
reflects the previously described limit on the Corporation's cost of annual per
capita retiree medical benefits. The December 31, 1994 accumulated
postretirement benefit obligations were determined using a trend rate of 10.4%
in 1995, declining to zero in 2002 and thereafter.
The December 31, 1995 accumulated postretirement benefit obligation for the
Scott U.S. plans was determined using an assumed health care cost trend rate of
9.0% for 1996, declining gradually to an ultimate rate of 6.0% for certain plans
and to zero for others. The December 31, 1994 accumulated postretirement
benefit obligation was determined using an assumed health care cost trend rate
of 8.7% in 1995, declining gradually to an ultimate rate of 5.0% for certain
plans and to zero for others.
A one-percentage point increase in the health care cost trend rates would
increase the accumulated postretirement benefit obligation by $17.7 million at
December 31, 1995 and expense by $1.7 million for the year then ended.
In connection with the business dispositions referred to in Note 12, the
Corporation transferred postretirement benefit liabilities to the respective
buyers. The net postretirement curtailment and settlement loss recognized
related to these sales was $14.9 million and $34.3 million in 1995 and 1994,
respectively. As a result of the 1994 sale of S.D. Warren, referred to in Note
13, the Corporation realized a curtailment gain of $61.1 million ($38.5 million
after-tax).
The Corporation's 1993 restructuring charge described in Note 3 included $67.2
million of cost for enhanced termination postretirement benefits and curtailment
losses.
INVESTMENT PLANS
Voluntary contribution investment plans are provided to substantially all U.S.
employees. Under the plans, the Corporation matches a portion of employee
contributions. Costs under the plans were
$26.0 million, $33.4 million and $33.0 million in 1995, 1994 and 1993,
respectively.
NOTE 6. DEBT
The major issues of long-term debt outstanding were:
December 31
---------------------
(Millions of dollars) 1995 1994
- ------------------------------------------------------------------------------------------------------
Kimberly-Clark Corporation
7 7/8% Debentures due 2023 ................................................ $ 199.7 $ 199.7
8 5/8% Notes due 2001 ..................................................... 199.6 199.6
9 3/4% Notes due 1995 ..................................................... - 100.1
9 1/8% Notes due 1997 ..................................................... 100.0 100.0
9% Notes due 2000 ......................................................... 99.8 99.8
6 7/8% Debentures due 2014 ................................................ 99.7 99.7
9 1/2% Sinking Fund Debentures due 2018 ................................... 49.9 49.9
6 1/8% to 9.67% Industrial Development Revenue Bonds maturing to 2023 ..... 97.9 98.0
Other ..................................................................... 3.4 3.4
--------- ----------
850.0 950.2
Subsidiaries
7% Debentures due 2023 .................................................... 200.0 200.0
5.375% Swiss Franc Bonds (swapped into U.S. dollars - effective interest
rate of 11.1%) due 2000 ................................................. 100.0 100.0
7.2% to 7.4% British Pound Notes due 1998 and 2007 ........................ 186.3 187.2
8.3% to 13% Debentures maturing to 2022 ................................... 165.3 168.5
Industrial Development Revenue Bonds at variable rates (average rate
for December 1995 - 4.5%) due 2018, 2023 and 2024 ....................... 250.0 250.0
5.7% to 6 3/8% Industrial Development Revenue Bonds maturing to 2007 ...... 76.8 82.2
Bank loans and other financings in various currencies at fixed rates
(average rate at December 31, 1995 - 8.7%) maturing to 2008 ............. 93.8 75.2
Bank loans and other financings in various currencies at variable rates
(average rate at December 31, 1995 - 7.3%) maturing to 2007 ............. 162.4 240.3
Bank loans, notes, debentures retired in January 1995 ..................... - 686.2
--------- ----------
2,084.6 2,939.8
Less current portion ........................................................ 99.9 854.4
--------- ----------
Total ..................................................................... $ 1,984.7 $ 2,085.4
========= ==========
Scheduled maturities of long-term debt are $228.0 million in 1997, $134.6
million in 1998, $25.4 million in 1999 and $234.4 million in 2000.
At December 31, 1995, the Corporation and its domestic subsidiaries had $1,575
million of revolving credit facilities with a group of banks. These
facilities, which were unused at December 31, 1995, permit borrowing at
competitive interest rates and are available for general corporate purposes,
including backup for commercial paper borrowings. The Corporation pays
commitment fees on the unused portion but may cancel the facilities without
penalty at any time prior to their expiration. Of these facilities, $400
million expires in June 1996; $775 million expires in December 1997; and
$400 million expires in December 1999.
Debt payable within one year:
December 31
---------------------
(Millions of dollars) 1995 1994
- -----------------------------------------------------------------------------------------------------
Commercial paper............................................................. $ 496.5 $ 542.7
Current portion of long-term debt ........................................... 99.9 854.4
Other short-term debt ...................................................... 221.4 170.4
------- ---------
Total ..................................................................... $ 817.8 $ 1,567.5
======= =========
At December 31, 1995 and 1994, the weighted average interest rate for commercial
paper was 5.8 percent and 6.0 percent, respectively.
In 1994 and 1993, the Corporation recorded extraordinary losses on the
retirement of debt of $61.1 million, net of income tax benefits of $35.8
million, and $9.6 million, net of income tax benefits of $5.2 million,
respectively. The 1994 extraordinary loss related to net premiums paid to
retire $934.2 million of debentures and notes and to terminate interest rate
swaps prior to their scheduled maturities. The funding source for these
retirements was principally from the net proceeds received on the sale of S.D.
Warren. Included in the amounts retired are debentures and notes that were
defeased by placing $221.3 million of U.S. government obligations in an
irrevocable trust to service the defeased debt. The 1993 extraordinary loss
related to the net premium paid and the write-off of unamortized debt discount
and issuance costs on $72.1 million of 11.5% Debentures. The funding source for
this retirement was the issuance of commercial paper.
NOTE 7. FOREIGN CURRENCY
FOREIGN EXCHANGE RISK
The Corporation and its subsidiaries and affiliates have manufacturing
facilities in more than
30 countries throughout the world. Consequently, Kimberly-Clark is subject to
foreign exchange translation risk as a result of strengthening or weakening of
various currencies against each other and local currencies versus the U.S.
dollar.
Foreign currency losses included in consolidated net income were $46.4 million,
$51.1 million and
$12.3 million in 1995, 1994 and 1993, respectively. The 1995 and 1994 losses
include the Corporation's share of foreign currency losses attributable to the
effect of the devaluation of the Mexican peso, as explained below, and losses
from other currency transactions and from the translation of balance sheet
accounts of operations in hyperinflationary economies.
Certain equity affiliates and subsidiaries, located in Mexico and Latin America,
have financed a portion of their operations with U.S. dollar-denominated
liabilities, thereby creating foreign currency transaction risks. The net
exposure of the U.S. dollar-denominated liabilities of these entities at
December 31, 1995 was approximately $430 million of which approximately $390
million was attributable to the Corporation's Mexican affiliates. The
Corporation's share of the foreign currency transaction risk attributable to
these liabilities was approximately $190 million. Since December 1994 and
throughout 1995, the value of the Mexican peso has declined. The Corporation's
share of the nonoperating, after-tax foreign currency losses attributable to
the effect of the original devaluation and subsequent fluctuations on the net
exposure of the U.S. dollar-denominated liabilities of its Mexican affiliates
was $38.5 million, or $.14 per share, and $39.2 million, or $.14 per share,
in 1995 and 1994, respectively.
TRANSLATION RISK
The income statements of foreign operations other than those in
hyperinflationary economies are translated into U.S. dollars at rates of
exchange in effect each month. The balance sheets of these operations are
translated at period-end exchange rates, and the differences from historical
exchange rates are reflected in stockholders' equity as unrealized currency
translation adjustments.
The income statements and balance sheets of operations in hyperinflationary
economies, i.e., Brazil (through July 1994 when the operation was sold) and
Venezuela, are translated into U.S. dollars using both current and historical
rates of exchange. For balance sheet accounts translated at current exchange
rates, such as cash and accounts receivable, the differences from historical
exchange rates are reflected in income.
Translation exposure is not hedged. The risk to any particular entity's net
assets is minimized to the extent that the entity is financed with local
currency borrowing. In addition, many of the Corporation's non-U.S. operations
buy the majority of their inputs and sell the majority of their outputs in local
currency, thereby minimizing the effect of currency rate changes on their local
operating profit margins.
NOTE 8. FINANCIAL INSTRUMENTS
The Corporation and its subsidiaries and affiliates throughout the world have
transactions denominated in numerous currencies. Foreign currency risks arise
from transactions and commitments denominated in non-local currencies. These
transactions and commitments include the purchase of raw materials, finished
goods or items of property, plant and equipment, receipt of dividends or
royalties and fees, the sale of products and the repayment of loans.
Management selectively hedges the Corporation's foreign currency risks when it
is practicable and economical to do so. The instruments used to hedge foreign
currency risks are forward contracts, currency swaps and, to a lesser extent,
option contracts. These instruments are purchased from well-known money center
banks (counterparties) throughout the world. Usually the contracts extend for
no more than 12 months, although their contractual term has been as long as 25
months. Currency swaps extend for longer periods through the year 2000. Credit
risks with respect to the counterparties, and the foreign currency risks that
would not be hedged if the counterparties fail to fulfill their obligations
under the contracts, are minimal in view of the financial strength of the
counterparties.
Gains and losses on instruments that hedge firm commitments are deferred and
included in the basis of the underlying hedged items. Premiums paid for options
are amortized ratably over the life of the option. All other gains and losses
are included in current period income based on the period-end market price of
the instrument.
The Corporation uses foreign currency forward contracts to hedge certain
transactions denominated in currencies other than the domestic currency. As of
December 31, 1995 there were outstanding forward contracts, maturing at various
dates in 1996, to purchase $451.3 million and to sell $726.8 million of various
foreign currencies. These contracts have not given rise to any significant net
deferred gains or losses as of December 31, 1995.
FAIR VALUES OF FINANCIAL INSTRUMENTS
December 31, 1995 December 31, 1994
---------------------- -------------------------
Principal Fair Principal Fair
(Millions of dollars) Amount Value Amount Value
- -----------------------------------------------------------------------------------------------------
Cash and cash equivalents ...................... $ 221.6 $ 221.6 $ 1,137.8 $ 1,137.8
Short-term debt ................................ (717.9) (717.9) (713.1) (713.1)
Long-term notes receivable ..................... 220.0 220.0 220.0 220.0
Current maturities and long-term debt .......... (2,084.6) (2,249.0) (2,939.8) (2,914.9)
The estimated fair values of the Corporation's financial instruments are
generally based on quoted market prices or on current rates available to the
Corporation for financial instruments of similar remaining maturities and do not
include potential tax effects or possible expenses incurred in settling the
transactions.
NOTE 9. STOCK OPTIONS AND EQUITY PARTICIPATION PLANS
Kimberly-Clark Equity Participation Plans adopted in 1976, 1986 and 1992 provide
for awards of participation shares and stock options to key employees of the
Corporation and its subsidiaries. Upon maturity, participation share awards are
paid in cash based on the increase in the book value of the Corporation's common
stock during the award period. Participants do not receive dividends on the
participation shares, but their accounts are credited with dividend shares
payable in cash at the maturity of the award. Neither participation nor
dividend shares are shares of common stock.
Data concerning participation and dividend shares follow:
1995 1994 1993
- -------------------------------------------------------------------------------------------------------
Outstanding - Beginning of year............................... 3,795,678 3,584,354 2,986,154
Awarded ...................................................... 1,052,650 - 1,351,100
Dividend shares credited - net ............................... 432,195 358,499 432,788
Matured ...................................................... (2,199,273) (84,775) (1,142,988)
Forfeited .................................................... (84,400) (62,400) (42,700)
---------- ---------- ----------
Outstanding - End of year .................................... 2,996,850 3,795,678 3,584,354
========= ========= =========
The Scott stock options outstanding and exercisable at the date of the merger
were converted to Kimberly-Clark stock options. The Scott option activity and
share prices have been restated, for all years presented, to Kimberly-Clark
equivalents using the exchange ratio of .78 Kimberly-Clark shares to one share
of Scott.
All stock options are granted at not less than market value and expire 10 years
after the date of grant. The Kimberly-Clark options become exercisable over
three years. All of the converted Scott options are exercisable at December 31,
1995, and no additional shares will be granted under the Scott plans.
Data concerning stock options follow:
1995 Number of Options
-------------- ------------------------------------
Price Range 1995 1994 1993
- ---------------------------------------------------------------------------------------------------
Outstanding - Beginning of year ......... $15.22 - $58.63 13,850,716 10,386,335 8,317,261
Granted ................................. $43.92 - $63.31 2,127,390 6,291,480 2,407,844
Exercised* .............................. $15.22 - $63.31 (4,192,162) (2,076,079) (257,954)
Rescinded options ....................... $24.36 - $31.98 (1,216,488) - -
Cancelled, expired or adjusted .......... $15.22 - $56.68 (225,874) (751,020) (80,816)
------------ ----------- -----------
Outstanding - End of year ............... $20.21 - $63.31 10,343,582 13,850,716 10,386,335
============ =========== ===========
Exercisable ............................. $20.21 - $63.31 8,038,861 5,149,832 5,180,415
============ =========== ===========
*Price ranges for options exercised were $11.88 to $46.25 per share in both 1994
and 1993.
At December 31, 1995, the number of additional shares of common stock of the
Corporation available for option and sale under the 1992 Plan or for award as
participation shares at such date under the 1992 Plan was 4,733,128 shares. The
1976 and 1986 Plans have expired and no additional grants will be made under
these Plans. Amounts expensed for shares under the Plans were $15.2 million,
$12.3 million and $10.6 million in 1995, 1994 and 1993, respectively.
NOTE 10. COMMITMENTS
LEASES
The future minimum obligations under leases having an initial or remaining
noncancellable term in excess of one year as of December 31, 1995 are as
follows:
Operating
(Millions of dollars) Leases
- -------------------------------------------------------------------------------------
Year Ending December 31:
1996 ................................................................... $ 45.9
1997 ................................................................... 28.4
1998 ................................................................... 22.2
1999 ................................................................... 17.2
2000 ................................................................... 11.9
Thereafter ............................................................. 64.5
-------
Future minimum obligations ............................................... $ 190.1
=======
Operating lease obligations have been reduced by approximately $18.5 million for
rental income from noncancellable subleases of tractors and trailers associated
with the disposal of the Corporation's trucking business. Although the
Corporation is primarily liable for rental payments to January 2003 under the
primary leases, no loss is expected from the sublease arrangements.
Consolidated rental expense under operating leases was $157.0 million, $163.7
million and $155.2 million in 1995, 1994 and 1993, respectively.
OTHER
The Corporation has entered into long-term contracts for the purchase of certain
raw materials. Minimum purchase commitments, at current prices, are
approximately $230 million and $40 million in 1996 and 1997, respectively.
These purchase commitments are not expected to result in losses.
The Corporation has an agreement obligating it to purchase a minimum of 40% of
the pulp production at market-related prices from one of its former Chilean
affiliates until 2001. At current prices, the minimum purchase commitment under
this agreement is approximately $100 million per year. This purchase commitment
is not expected to result in a loss.
The Corporation has guaranteed certain aircraft lease obligations totaling $72.9
million for its equity affiliates, Midwest Express Airlines, Inc. (``Midwest
Express'') and Astral Aviation, Inc. (``Astral''), in return for a guarantee
fee. In addition, the Corporation has provided Midwest Express with a five-year
$20 million secondary revolving credit facility for use in the event Midwest
Express does not have amounts available for borrowing under its revolving bank
credit facility. The facility expires
September 27, 2000 and no drawings have been made under the facility. No losses
are expected from these arrangements.
NOTE 11. STOCKHOLDERS' EQUITY
Changes in common stock issued, treasury stock, additional paid-in capital,
retained earnings and unrealized currency translation adjustments (``UTA'') are
shown below:
Common Stock Issued Additional
(Millions of dollars, --------------------- Treasury Stock Paid-In Retained
-------------------
except per share amounts) Shares Amount Shares Amount Capital Earnings UTA
- ----------------------------------------------------------------------------------------------------------------------
Balance at December 31,
1992 .................... 278,104,264 $347.6 2,046,371 $ (52.9) $327.5 $3,682.7 $(315.3)
Shares issued for the exercise
of stock options, stock awards,
and restricted stock .... 87,463 .2 (309,128) 8.4 4.6 - -
Purchased for treasury ..... - - 16,526 (.8) - - -
Translation adjustment...... - - - - - - (148.6)
Minimum pension liability
adjustment ............... - - - - - (13.7) -
Net income ................. - - - - - 231.0 -
Dividends declared on:
Common shares ............ - - - - - (266.8) -
Preferred shares ......... - - - - - (.3) -
--------------- -------- ----------- ------- ------- --------- ------
Balance at December 31,
1993 .................... 278,191,727 347.8 1,753,769 (45.3) 332.1 3,632.9 (463.9)
Shares issued for the exercise
of stock options, stock awards,
and restricted stock .... 2,355,110 2.9 (341,793) 9.5 52.7 - -
Purchased for treasury ..... - - 1,013,848 (52.2) - - -
Translation adjustment ..... - - - - - - (101.1)
Minimum pension liability
adjustment ............... - - - - - 1.7 -
Net income ................. - - - - - 753.8 -
Dividends declared on:
Common shares ............ - - - - - (342.8) -
Preferred shares ......... - - - - - (.3) -
--------------- ------- ----------- -------- ------- ---------- ------
Balance at December 31,
1994 .................... 280,546,837 350.7 2,425,824 (88.0) 384.8 4,045.3 (565.0)
Shares issued for the exercise
of stock options, stock awards,
and restricted stock .... 3,895,587 4.8 (436,291) 12.7 150.4 - -
Conversion of Scott options
and restricted shares payable
upon change of control ... 832,469 1.1 - - 18.3 - -
Cancellation of Scott treasury
shares ................... (2,994,775) (3.7) (2,994,775) 138.2 (134.5) - -
Distribution of net assets
of Schweitzer-Mauduit
International, Inc. ..... - - - - - (119.0) (13.3)
Purchased for treasury ..... - - 2,484,966 (137.8) - - -
Translation adjustment ..... - - - - - - (62.2)
Minimum pension liability
adjustment ............... - - - - - (15.8) -
Net income ................. - - - - - 33.2 -
Dividends declared on:
Common shares ............ - - - - - (349.5) -
Preferred shares .............. - - - - - (.3) -
----------- ------- ---------- -------- --------- ----------- --------
Balance at December 31,
1995 .................... 282,280,118 $352.9 1,479,724 $ (74.9) $ 419.0 $ 3,593.9 $ (640.5)
=========== ====== ========= ======= ========= =========== =========
At December 31, 1995, unremitted net income of equity companies included in
consolidated retained earnings was $502.6 million.
Scott had preferred shares outstanding in each of the years ended December 31,
1992, 1993 and 1994 (46,205 shares of $3.40 series and 24,435 shares of $4.00
series) which were redeemed for cash prior to the merger in 1995. Such
preferred stock was carried at $7.1 million and was redeemed for
$7.3 million. All other preferred stock issues of Scott which were authorized
but unissued were cancelled effective with the merger.
On June 21, 1988, the board of directors of the Corporation declared a
distribution of one preferred share purchase right for each outstanding share of
the Corporation's common stock. On June 8, 1995, the board amended the plan
governing such rights. The rights are intended to protect the stockholders
against abusive takeover tactics.
A right will entitle its holder to purchase one one-hundredth of a share of
Series A Junior Participating Preferred Stock at an exercise price of $225, but
will not become exercisable until 10 days after a person or group acquires, or
announces a tender offer which would result in the ownership of, 20 percent or
more of the Corporation's outstanding common shares.
Under certain circumstances, a right will entitle its holder to acquire either
shares of the Corporation's stock or shares of an acquiring company's common
stock, in either event having a market value of twice the exercise price of the
right. At any time after the acquisition by a person or group of 20 percent or
more, but fewer than 50 percent, of the Corporation's common shares, the
Corporation may exchange the rights, except for rights held by the acquiring
person or group, in whole or in part, at a rate of one right for one share of
the Corporation's common stock or for one one-hundredth of a share of Series A
Junior Participating Preferred Stock.
The rights may be redeemed at $.01 per right prior to the acquisition by a
person or group of 20 percent or more of the common stock. Unless redeemed
earlier, the rights expire on June 8, 2005.
The Corporation has 20 million shares of authorized preferred stock with no par
value, none of which has been issued.
NOTE 12. OTHER ACQUISITIONS AND DISPOSITIONS OF BUSINESSES
MIDWEST EXPRESS AIRLINES
In 1995, the Corporation sold 80 percent of its investment in Midwest Express
and Astral. An initial public offering of approximately 5.1 million shares of
the common stock of Midwest Express Holdings, Inc., the parent company of these
businesses, was made in the third quarter of 1995. The Corporation recognized a
gain of $61.4 million ($40.0 million after-tax, or $.14 per share) on the sale.
SPECIALTY PRODUCTS BUSINESSES
On November 30, 1995, the Corporation spun off its tobacco-related business
operations in the United States, Canada and France in a tax-free transaction.
Kimberly-Clark shareholders received all outstanding shares of common stock of
Schweitzer-Mauduit International, Inc. (`SMI''), which holds such operations.
Kimberly-Clark shareholders received one share of SMI common stock for every 10
shares of Kimberly-Clark stock held. The distribution was paid on November 30,
1995 to stockholders of record on November 13, 1995. The Corporation recognized
expenses of $7.6 million ($.03 per share) related to the spin-off.
OTHER 1995 ACQUISITIONS
In the first quarter of 1995, the Corporation increased its ownership of Carlton
Paper Corporation Limited in South Africa to more than 50 percent and Kimberly-
Clark Argentina S.A. to 51 percent. As a result, these entities are now
consolidated in the financial statements. The aggregate cost of these
investments was approximately $43.0 million.
THE ENERGY COMPLEX AND SCOTT HEALTH CARE
On December 16, 1994, Scott completed the sale of the energy and recovery
complex assets (the `Energy Complex'') located at its Mobile, Alabama mill site
to Mobile Energy Service Company, Inc. (MESC), which is a wholly-owned
subsidiary of The Southern Company. Total proceeds were approximately $350
million, consisting of approximately $265 million in cash and the buyer's
assumption, guaranteed by The Southern Company, of $85 million of debt under a
tax-exempt financing relating to the Energy Complex. Under terms of an
agreement, MESC will provide power, steam and pulping liquor to the mills
located at this site.
On December 23, 1994, Scott sold substantially all of its interest in a 50-
percent-owned joint venture for $65.7 million. This venture manufactures and
markets adult incontinence and wound care products under the name Scott Health
Care.
The above asset dispositions resulted in an aggregate pretax gain of $99.2
million ($62.5 million after-tax, or $.22 per share).
OTHER 1994 ACQUISITIONS AND DISPOSITIONS
In 1994, the Corporation purchased the feminine care products businesses of VP-
Schickedanz AG, a German company, and a 90 percent interest in the Handan
Comfort and Beauty Group, a Chinese company, for approximately $144 million.
During the year, the Corporation sold its tissue mill in Memphis, Tennessee,
adhesive-coated label stock business in Troy, Ohio, tissue subsidiary in Brazil
and Spenco Medical Corporation and received total proceeds of $118.2 million.
These transactions, individually and in the aggregate, are not significant to
ongoing operations or to the consolidated financial statements.
NOTE 13. DISCONTINUED OPERATION
On December 20, 1994, Scott completed the sale of S.D. Warren, its former
printing and publishing papers subsidiary, to an investor group led by Sappi
Limited. Scott received $1.6 billion, which included the buyer's assumption of
approximately $120 million of debt. In connection with the transaction, Scott
remained either contingently liable as guarantor, or directly liable as the
original obligor for certain debt and lease obligations of S.D. Warren. The
buyer provided Scott with a letter of credit from a major financial institution
guaranteeing repayment of these obligations. At December 31, 1995, this
contingent liability was approximately $170 million, and the Corporation
believes it will incur no liability under these arrangements.
S.D. Warren's operations have been segregated and reported as a discontinued
operation in the consolidated income statement for periods prior to the
disposition. For all periods presented, cash flow activities for S.D. Warren
have not been segregated in the consolidated cash flow statement.
The income statement related to the discontinued operation for the years ended
December 1994 and 1993 is presented below:
(Millions of dollars) 1994 1993
- ---------------------------------------------------------------------------------------------------
Net Sales ................................................................. $ 1,145.3 $ 1,143.9
Costs and expenses ........................................................ 1,129.5 1,201.8
--------- ---------
Income (loss) before income taxes ......................................... 15.8 (57.9)
Income tax provision (benefit) ............................................ 5.9 (11.3)
--------- ---------
Income (loss) before gain on sale ......................................... 9.9 (46.6)
Gain on sale, net of income taxes ......................................... 38.5 -
--------- ---------
Net Income (Loss) ......................................................... $ 48.4 $ (46.6)
======== =========
The effective tax rates for the discontinued operation varied from the federal
tax rates primarily due to the tax on foreign operations in 1994 and the tax
rate increase on deferred taxes in 1993.
NOTE 14. CONTINGENCIES
Scott is a defendant in numerous actions in state and federal courts seeking
damages relating to breast implants. The actions allege that the plaintiffs'
breast implants were covered by polyurethane foam manufactured by the
subsidiary's former Foam Division, which was sold in 1983, and that the foam
caused physical and/or psychological harm to the plaintiffs. In each of these
actions, the subsidiary is one of several defendants, including the Foam
Division's successor and the manufacturers of the implants. The Corporation
believes that only a small percentage of breast implants were covered by
polyurethane foam manufactured by the Foam Division prior to its sale.
Pursuant to an order of the Multidistrict Litigation Panel, all federal cases
involving breast implants have been consolidated for pre-trial purposes in the
Northern District of Alabama and one of these cases, Lindsey et al., vs. Dow
-----------------------
Corning Corporation et al., has been provisionally certified by the court as a
- --------------------------
class action for settlement purposes. Scott elected not to participate in the
proposed settlement of these actions; rather, in April 1995, Scott's motion for
summary judgment was granted by the court, resulting in the dismissal of all
federal actions against Scott and the purchaser of the Foam Division. In
January 1996, the plaintiffs agreed to dismiss their appeal of such dismissal.
A similar motion for summary judgment was granted in 1995 in the consolidated
California state court breast implant suits, and that dismissal is now final
because the plaintiffs failed to file an appeal.
The Corporation believes it has meritorious defenses to the remaining
breast implant claims and that the final results of such claims, while they
cannot be predicted with certainty, will not have a material adverse effect on
the Corporation's business or results of operations.
The Corporation also is subject to routine litigation from time to time which
individually or in the aggregate is not expected to have a material adverse
effect on the Corporation's business or results of operations.
NOTE 15. SUPPLEMENTAL DATA (Millions of dollars)
SUPPLEMENTAL BALANCE SHEET DATA
December 31
-------------------
Summary of Accounts Receivable and Inventories 1995 1994
- ----------------------------------------------------------------------------------------------------
Accounts Receivable:
From customers .............................................................. $ 1,579.5 $ 1,349.0
Other ....................................................................... 183.2 164.7
Less allowance for doubtful accounts and sales discounts .................... (84.7) (45.6)
--------- ---------
Total ................................................................... $ 1,678.0 $ 1,468.1
========= =========
Inventories by Major Class:
At the lower of cost on the First-In, First-Out (FIFO) method or market:
Raw materials ............................................................. $ 373.7 $ 298.0
Work in process ........................................................... 281.0 223.9
Finished goods ............................................................ 785.2 703.4
Supplies and other ........................................................ 251.1 256.2
--------- ---------
1,691.0 1,481.5
Excess of FIFO cost over Last-In, First-Out (LIFO) cost ..................... (264.9) (223.1)
--------- ---------
Total ................................................................... $ 1,426.1 $ 1,258.4
========= =========
Total inventories include $519.4 million and $464.9 million of inventories
valued on the LIFO method at December 31, 1995 and 1994, respectively.
December 31
--------------------
Summary of Accrued Expenses 1995 1994
- -----------------------------------------------------------------------------------------------------
Accruals for restructuring and other unusual charges:
Employee severance and related costs ........................................ $ 220.2 $ 83.8
Costs of contract and lease terminations .................................... 142.5 -
Other ....................................................................... 248.0 24.8
--------- ----------
Total accruals for restructuring and other unusual charges ................ 610.7 108.6
Accrued advertising and promotion expense ..................................... 250.6 219.0
Accrued salaries and wages .................................................... 339.6 307.3
Other accrued expenses ........................................................ 354.4 512.9
--------- ----------
Total accrued expenses .................................................. $ 1,555.3 $ 1,147.8
========= ==========
SUPPLEMENTAL CASH FLOW STATEMENT DATA
Summary of Cash Flow Effects of Changes in Year Ended December 31
-------------------------------------
Operating Working Capital* 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------
Accounts receivable ............................................... $ (264.5) $ (287.4) $ 83.9
Inventories ....................................................... (191.3) (74.1) (41.5)
Prepaid expenses .................................................. (56.7) 3.5 24.2
Trade accounts payable ............................................ 148.8 116.0 (181.9)
Other payables .................................................... 10.8 35.8 13.4
Accrued expenses .................................................. (111.8) (222.6) 30.3
Accrued income taxes .............................................. (63.0) 228.8 41.0
Currency rate changes ............................................. (.2) (15.9) (30.6)
---------- ---------- ----------
Changes in operating working capital .............................. $ (527.9) $ (215.9) $ (61.2)
========== ========== ===========
*Excludes the effects of acquisitions, dispositions and the 1995 and 1993
restructuring and other
unusual charges.
Year Ended December 31
--------------------------------
Other Cash Flow Data 1995 1994 1993
- -----------------------------------------------------------------------------------------------------
Interest paid .................................................... $ 259.9 $ 333.5 $ 308.0
Income taxes paid ................................................ 570.1 321.2 243.9
Increase (decrease) in cash and cash equivalents due to exchange
rate changes ................................................... (.7) 7.3 (9.0)
Reconciliation of changes in cash and cash equivalents:
Balance, January 1 ............................................. $ 1,137.8 $ 168.4 $ 182.8
Increase (decrease) ............................................ (916.2) 969.4 (14.4)
--------- ---------- --------
Balance, December 31 ........................................... $ 221.6 $ 1,137.8 $ 168.4
========= ========== ========
Year Ended December 31
-------------------------------
Interest Expense 1995 1994 1993
- -----------------------------------------------------------------------------------------------------
Gross interest cost .............................................. $ 254.3 $ 351.5 $ 337.3
Capitalized interest ............................................. (8.8) (20.6) (28.4)
Interest expense allocated to discontinued operation ............. - (60.4) (59.4)
--------- --------- -------
Interest expense ................................................. $ 245.5 $ 270.5 $ 249.5
========= ========= =======
Interest expense is capitalized on major construction projects. Interest
expense has been allocated to S. D. Warren, the discontinued operation, based on
the ratio of net assets sold to the sum of consolidated common stockholders'
equity and consolidated debt less debt specifically related to the discontinued
operation.
NOTE 16. UNAUDITED QUARTERLY DATA
(Millions of dollars
except per share 1995 1994
----------------------------------------- -------------------------------------------
amounts) Fourth(a,b) Third(b,c) Second(b) First(b) Fourth(b,d) Third Second First
- ---------------------------------------------------------------------------------------------------------------
Net sales ........... $3,442.9 $3,606.8 $3,483.6 $3,255.3 $3,158.6 $2,982.3 $2,995.3 $2,843.0
Gross profit ........ 1,235.1 1,327.2 1,263.1 1,135.1 1,087.1 1,040.2 1,071.1 987.1
Operating profit
(loss) .......... (1,087.9) 496.3 435.7 368.9 342.7 307.7 334.1 292.6
Income (loss) from
continuing
operations ........ (841.7) 367.9 307.4 199.6 223.7 175.2 203.5 164.1
Income (loss) before
extraordinary loss . (841.7) 367.9 307.4 199.6 277.1 183.6 193.4 160.8
Net income (loss) ... (841.7) 367.9 307.4 199.6 216.0 183.6 193.4 160.8
Per share basis:
Income (loss) from
continuing
operations ...... (3.01) 1.32 1.10 .71 .80 .63 .74 .59
Income (loss)
before
extraordinary
loss ............ (3.01) 1.32 1.10 .71 .99 .66 .70 .58
Net income (loss) . (3.01) 1.32 1.10 .71 .77 .66 .70 .58
Kimberly-Clark
cash dividends declared .45 .45 .45 .45 .44 .44 .44 .44
Market price:
High .............. 83 68-3/4 62-5/8 53-3/8 59 60 57-5/8 58-1/4
Low ............... 66-5/8 57-1/2 50-1/8 47-1/4 47 52-1/2 51-3/4 51-3/8
Close ............. 82-3/4 67-1/8 59-7/8 52 50-3/8 58-3/4 52-7/8 52-7/8
All financial information, except cash dividends declared per share, has been
restated to include the results of Scott for all periods presented. Cash
dividends declared per share represent the historical dividends declared by
Kimberly-Clark. The merger, which was effective on December 12, 1995, has been
accounted for as a pooling of interests and includes appropriate
reclassification entries and accounting adjustments to conform the accounting
practices of Scott to those of Kimberly-Clark.
(a) Results for the fourth quarter 1995 include a restructuring and other
unusual charge of $1,440.0 million ($1,070.9 million after taxes and minority
interests, or $3.83 per share).
(b) Results for all quarters in 1995 and the fourth quarter 1994 include
nonoperating effects for the Corporation's share of foreign currency losses
incurred by its Mexican affiliates on the translation of the net exposure of
U.S. dollar-denominated liabilities into pesos. The translation losses are
related to the devaluation of the Mexican peso in December 1994 and
subsequent fluctuations. Effects for the quarters are as follows:
(Millions of dollars except Nonoperating gain (loss) Per share gain (loss)
per share amounts) due to the peso due to the peso
- ---------------------------------------------------------------------------------------------------
1995:
Fourth .................................. $(18.1) $(.06)
Third ................................... (2.0) (.01)
Second .................................. 8.4 .03
First ................................... (26.8) (.10)
------ -----
Total ................................. $(38.5) $(.14)
====== =====
1994:
Fourth .................................. $(39.2) $(.14)
====== =====
(c) Results for the third quarter 1995 include a nonoperating pretax gain of
$61.4 million ($40.0 million after-tax, or $.14 per share) related to the
sale of 80 percent of Midwest Express Holdings, Inc.
(d) Fourth quarter 1994 results were affected by the following:
- A pretax gain of $99.2 million ($62.5 million after-tax, or $.22 per share)
related to the sales of the Mobile, Alabama energy and recovery complex and
Scott Health Care assets.
- An extraordinary loss on early extinguishment of debt of $61.1 million, net
of income taxes, or $.22 per share.
- Completion of the sale of S.D. Warren, whose operations have been
segregated and reported as a discontinued operation. The gain on the sale
was $61.1 million ($38.5 million after-tax, or $.14 per share).
NOTE 17. BUSINESS SEGMENT AND GEOGRAPHIC DATA
For reporting purposes, the Corporation's businesses are separated into three
segments.
. Personal Care Products include infant, child, feminine and incontinence care
products; wet wipes; health care products; and related products.
. Tissue-Based Products include tissue and wipers for household and away-from-
home use; pulp; and related products.
. Newsprint, Paper and Other includes newsprint, printing papers, premium
business and correspondence papers, specialty papers, technical papers, and
related products; and other products and services.
In conjunction with the merger with Scott and the application of pooling of
interests accounting, management has redefined its consolidated operations into
the above three segments to appropriately reflect the businesses in which the
Corporation now operates. Business segment data for all years presented have
been restated to this revised presentation.
Information concerning consolidated operations by business segment and
geographic area, as well as data for equity companies, is presented in the
tables below and on the following pages:
CONSOLIDATED OPERATIONS BY BUSINESS SEGMENT
Net Sales Operating Profit
(Millions of dollars) 1995 1994 1993 1995(a) 1994 1993(b)
Personal Care Products $ 4,342.1 $ 3,783.6 $ 3,423.9 $337.9 $ 582.7 $555.3
Tissue-Based Products . 7,982.0 6,771.4 6,831.7 (36.5) 576.3 81.6
Newsprint, Paper
and Other ........... 1,584.3 1,514.6 1,459.6 224.6 213.0 202.3
---------------------- ------------- -------- ---------- ------
Combined .............. 13,908.4 12,069.6 11,715.2 526.0 1,372.0 839.2
Interclass sales ...... (119.8) (90.4) (68.4) - - -
Unallocated items - net - - - (313.0) (94.9) (104.7)
---------- ---------- ----------- ------ ---------- -------
Consolidated .......... $ 13,788.6 $11,979.2 $ 11,646.8 $213.0 $ 1,277.1 $ 734.5
========== ========= =========== ====== ========== =======
Assets Depreciation Capital Spending
----------------------------- ------------------------ --------------------------
(Millions of dollars)1995 1994 1993 1995 1994 1993 1995 1994 1993
- -------------------------------------------------------------------------------------------------------
Personal Care
Products ... $ 3,388.9 $ 3,170.5 $ 2,868.6 $193.1 $162.2 $135.3 $237.4 $313.6 $ 425.5
Tissue-Based
Products ... 6,104.0 5,957.1 5,890.8 323.6 322.4 300.6 485.5 393.3 486.0
Newsprint,
Paper
and Other .. 710.3 1,078.4 2,928.8 51.0 135.6 148.3 76.4 119.4 169.1
---------- ----------- --------- ------ ------ ------ ------ ------ ---------
Combined ..... 10,203.2 10,206.0 11,688.2 567.7 620.2 584.2 799.3 826.3 1,080.6
Unallocated(c) 1,415.8 2,553.7 1,691.9 14.0 15.7 11.9 18.3 31.0 26.9
Interclass
assets ..... (179.8) (204.0) (169.7) - - - - - -
---------- --------- -------- ----- ------ ------ ------ ------ ---------
Consolidated . $ 11,439.2 $ 12,555.7 $ 13,210.4 $581.7 $635.9 $596.1 $817.6 $857.3 $ 1,107.5
========== ========== ========== ====== ====== ====== ====== ====== =========
(a) Operating profit in 1995 for Personal Care Products; Tissue-Based Products;
Newsprint, Paper and Other; and Unallocated includes $230.3 million, $981.2
million, $35.0 million and $193.5 million, respectively, of the restructuring
and other unusual charges described in Note 3.
(b) Operating profit in 1993 for Tissue-Based Products and Unallocated includes
$352.9 million and $26.0 million, respectively, of the $378.9 million
restructuring charge described in Note 3.
(c)Assets include investments in equity companies of $413.4 million, $555.3
million and $656.5 million
in 1995, 1994 and 1993, respectively.
CONSOLIDATED OPERATIONS BY GEOGRAPHIC AREA
Net Sales Operating Profit
-------------------------------- ---------------------------
(Millions of dollars) 1995 1994 1993 1995(a) 1994 1993(d)
- ----------------------------------------------------------------------------------------------------
United States ....................... $ 9,007.9 $ 8,414.0 $ 8,037.6 $661.9 $1,152.5 $784.4
Canada ............................. 1,250.1 955.1 916.5 21.9 34.9 (16.9)
Intergeographic items(b) ............ (452.6) (356.5) (259.9) - - -
--------- ---------- ---------- ------ --------- -------
North America ....................... 9,805.4 9,012.6 8,694.2 683.8 1,187.4 767.5
Europe ............................. 2,912.5 2,340.5 2,296.3 (277.5) 62.2 (16.1)
Asia, Latin America and Africa ...... 1,342.5 836.1 767.2 119.7 122.4 87.8
--------- ---------- ---------- ------ ---------- -------
Combined ............................ 14,060.4 12,189.2 11,757.7 526.0 1,372.0 839.2
Intergeographic items ............... (271.8) (210.0) (110.9) - - -
Unallocated items - net(c)........... - - - (313.0) (94.9) (104.7)
--------- --------- --------- ------ ---------- -------
Consolidated ........................ $13,788.6 $11,979.2 $11,646.8 $213.0 $ 1,277.1 $ 734.5
========= ========= ========= ====== ========== =======
Assets
----------------------------------
(Millions of dollars) 1995 1994 1993
- ------------------------------------------------------------------------------------------------------
United States .................................................. $ 6,182.1 $ 5,896.2 $ 7,612.0(e)
Canada ........................................................ 703.2 759.5 791.3
Intergeographic items .......................................... (198.9) (106.0) (87.8)
---------- ---------- ----------
North America .................................................. 6,686.4 6,549.7 8,315.5
Europe ........................................................ 2,592.7 2,687.6 2,450.6
Asia, Latin America and Africa ................................. 1,380.5 947.5 876.8
---------- ---------- ----------
Combined ....................................................... 10,659.6 10,184.8 11,642.9
Intergeographic items .......................................... (636.2) (182.8) (124.4)
Unallocated items - net (c) .................................... 1,415.8 2,553.7 1,691.9
---------- ---------- ----------
Consolidated ................................................... $ 11,439.2 $ 12,555.7 $13,210.4
========== ========== =========
(a) Operating profit in 1995 for the U.S.; Canada; Europe; Asia, Latin America
and Africa; and Unallocated includes $575.6 million, $161.5 million, $464.1
million, $45.3 million and $193.5 million, respectively, of the restructuring
and other unusual charges described in Note 3.
(b) Net sales include $310.3 million, $236.8 million and $171.7 million by
operations in Canada to the U.S. in 1995, 1994 and 1993, respectively.
(c) Assets include investments in equity companies of $413.4 million, $555.3
million and $656.5 million in 1995, 1994 and 1993, respectively.
(d) Operating profit in 1993 for the U.S.; Europe; Asia, Latin America and
Africa; and Unallocated includes $259.9 million, $79.0 million, $14.0 million
and $26.0 million, respectively, of the restructuring charge described in
Note 3.
(e) U.S. assets in 1993 include discontinued printing and publishing papers
segment assets of $1,851.8 million.
EQUITY COMPANIES' DATA BY GEOGRAPHIC AREA
Kimberly-
Clark's
Share
Net Gross Operating Net of Net
(Millions of dollars) Sales Profit Profit Income Income
- -------------------------------------------------------------------------------------------------------
For the year ended:
December 31, 1995
Latin America(a) ..................... $1,465.2 $ 551.0 $ 399.8 $ 222.1(b)$ 104.8(b)
North America, Asia, Australia, Africa(c)
and Middle East .................... 567.6 196.0 56.5 19.5 8.5(c)
-------- --------- --------- --------- --------
Total ............................ $2,032.8 $ 747.0 $ 456.3 $ 241.6 $ 113.3
======== ========= ========= ========= =========
December 31, 1994
Latin America(a) ..................... $1,843.6 $ 675.4 $ 429.0 $ 194.6(b)$ 88.9(b)
Asia, Australia, Africa and
Middle East ........................ 577.9 202.5 58.7 37.4 21.6(c)
-------- --------- --------- --------- --------
Total ............................ $2,421.5 $ 877.9 $ 487.7 $ 232.0 $ 110.5
======== ========= ========= ========= =========
December 31, 1993
Latin America ........................ $1,589.0 $ 586.6 $ 265.2 $ 154.4(d) $ 64.5(d)
Asia, Australia and
Middle East ........................ 385.9 127.4 38.2 24.7(e) 11.6
-------- --------- --------- -------- ---------
Total ............................ $1,974.9 $ 714.0 $ 303.4 $ 179.1 $ 76.1
======== ========= ========= ========= =========
(a) Results for Latin America in 1994 include operations of a newly formed
joint venture in Argentina. In June 1994, the Corporation combined its wholly
owned subsidiary in Argentina with the operations of another company to
create the joint venture. In the first quarter of 1995, the Corporation
purchased additional shares of this subsidiary resulting in its
consolidation.
(b) Net income and Kimberly-Clark's share of net income in Latin America in
1995 include a nonoperating charge of $89.4 million and $38.5 million,
respectively, for foreign currency losses incurred by the Corporation's
Mexican affiliates on the translation of the net exposure of U.S. dollar-
denominated liabilities into pesos. In 1994, this charge to net income and
Kimberly-Clark's share of net income was $91.2 million and $39.2 million,
respectively. The translation losses are related to the devaluation of the
Mexican peso in December 1994 and subsequent periods.
(c) The Corporation's share of net income for 1994 includes a gain of $10.0
million due to the readoption of equity accounting for the Corporation's
South African affiliate. Income taxes of $3.7 million related to this
item are reflected in the provision for income taxes in the consolidated
income statement. In
the first quarter of 1995, the Corporation purchased additional shares of
this subsidiary resulting in its consolidation.
(d) Compania Industrial de San Cristobal, S.A., one of the Corporation's
Mexican affiliates, recorded an
after-tax charge of $44.9 million, of which Kimberly-Clark's share was $36.2
million, for the 1993 Scott restructuring which included workforce reductions
and mill closings related to its printing and writing papers business.
(e) Net income in Australia in 1993 includes a $7.8 million credit from a
decrease in the statutory
income tax rate to 33 percent from 39 percent.
Non- Non- Stock
Current Current Current Current holders'
(Millions of dollars) Assets Assets Liabilities Liabilities Equity
- ------------------------------------------------------------------------------------------------------
December 31, 1995
Latin America(f) ....................... $ 722.6 $ 599.2 $ 404.7 $ 339.1 $ 578.0
North America, Asia, Australia, Africa
and Middle East ...................... 168.3 465.5 153.0 229.5 251.3
--------- --------- --------- --------- --------
Total ................................ $ 890.9 $ 1,064.7 $ 557.7 $ 568.6 $ 829.3
========= ========= ========= ========= ========
December 31, 1994
Latin America(f) ....................... $ 697.1 $ 721.6 $ 354.3 $ 322.2 $ 743.2
Asia, Australia, Africa and
Middle East .......................... 164.8 454.9 159.6 151.7 308.4
--------- --------- --------- --------- --------
Total ................................ $ 861.9 $ 1,176.5 $ 513.9 $ 473.9 $1,051.6
========= ========= ========= ========= ========
December 31, 1993
Latin America .......................... $ 773.4 $ 931.3 $ 336.4 $ 378.5 $ 989.7
Asia, Australia and
Middle East .......................... 98.8 342.3 85.0 148.4 207.7
--------- --------- --------- --------- --------
Total ................................ $ 872.2 $ 1,273.6 $ 421.4 $ 526.9 $1,197.4
========= ========= ========= ========= ========
(a) Includes effect of December 1994 devaluation of the Mexican peso and
subsequent fluctuations on the translated balance sheet of the Corporation's
Mexican affiliates.
Equity companies are principally engaged in Personal Care Products and Tissue-
Based Products operations. A listing of the Corporation's percentage ownership
of the common stock of each significant subsidiary and equity company is
contained elsewhere in this annual report.
Estimated fair values of publicly traded equity companies at December 31, 1995:
Kimberly-Clark's Investment
---------------------------
Estimated
Carrying Fair
(Millions of dollars) Value Value
- -------------------------------------------------------------------------------------------------------
Kimberly-Clark de Mexico, S.A. de C.V. (Mexico) .......................... $133.9 $1,230.2
Compania Industrial de San Cristobal, S.A. (Mexico) ...................... 118.9 605.0
Midwest Express Holdings, Inc. (U.S.) .................................... 5.8 35.4
INDEPENDENT AUDITORS' REPORT
Kimberly-Clark Corporation and Subsidiaries
Kimberly-Clark Corporation, Its Directors and Stockholders:
We have audited the accompanying consolidated balance sheets of Kimberly-Clark
Corporation and Subsidiaries as of December 31, 1995 and 1994, and the related
consolidated income and cash flow statements for each of the three years in the
period ended December 31, 1995. These financial statements are the
responsibility of the Corporation's management. Our responsibility is to
express
an opinion on these financial statements based on our audits. The consolidated
financial statements give retroactive effect to the merger of Kimberly-Clark
Corporation and Scott Paper Company, which has been accounted for as a pooling
of interests as described in Note 2 to the consolidated financial statements.
We did not audit the financial statements of Scott Paper Company for the years
ended December 31, 1995, 1994 and 1993 (before the effects of the conforming
adjustments described in Note 2 that were applied to restate such statements)
which statements reflect total assets (in millions) of $4,525.8, $5,626.1 and
$6,625.1 as of December 31, 1995, 1994 and 1993, respectively, and total net
sales (in millions) of $4,131.6, $3,581.1 and $3,584.9 for the respective years
then ended. Those financial statements were audited by other auditors whose
reports have been furnished to us, and our opinion, insofar as it relates to the
amounts included for Scott Paper Company, is based on the reports of such other
auditors. We audited the conforming adjustments described in Note 2 that were
applied to restate the 1995, 1994 and 1993 financial statements of Scott Paper
Company.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosure in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors referred
to above, such consolidated financial statements present fairly, in all material
respects, the financial position of Kimberly-Clark Corporation and Subsidiaries
at December 31, 1995 and 1994, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
- -------------------------------------------
Deloitte & Touche LLP
Dallas, Texas
January 30, 1996
AUDIT COMMITTEE CHAIRMAN'S LETTER
The members of the Audit Committee are selected by the board of directors.
During 1995, the committee consisted of four outside directors and met three
times.
The Audit Committee oversees the financial reporting process on behalf of the
board of directors. As part of that responsibility, the committee recommended
to the board of directors, subject to stockholder approval, the selection of the
Corporation's independent public accountants. The Audit Committee discussed the
overall scope and specific plans for annual audits with the Corporation's
internal auditors and Deloitte & Touche LLP. The committee also discussed the
Corporation's annual consolidated financial statements and the adequacy of its
internal controls. The committee met regularly with the internal auditors and
Deloitte & Touche LLP, without management present, to discuss the results of
their audits, their evaluations of the Corporation's internal controls, and the
overall quality of the Corporation's financial reporting. The meetings also
were designed to facilitate any private communication with the committee desired
by the internal auditors or independent public accountants.
/s/ Paul J. Collins
- --------------------------
Paul J. Collins
Chairman, Audit Committee
January 30, 1996
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
Kimberly-Clark Corporation and Subsidiaries
The management of Kimberly-Clark Corporation is responsible for conducting all
aspects of the business, including the preparation of the financial statements
in this annual report. The financial statements have been prepared using
generally accepted accounting principles considered appropriate in the
circumstances to present fairly the Corporation's consolidated financial
position, results of operations and cash flows on a consistent basis.
Management also has prepared the other information in this annual report and is
responsible for its accuracy and consistency with the financial statements.
As can be expected in a complex and dynamic business environment, some financial
statement amounts are based on management's estimates and judgments. Even
though estimates and judgments are used, measures have been taken to provide
reasonable assurance of the integrity and reliability of the financial
information contained in this annual report. These measures include an
effective control-oriented environment in which the internal audit function
plays an important role, an Audit Committee of the board of directors which
oversees the financial reporting process, and independent audits.
One characteristic of a control-oriented environment is a system of internal
control over financial reporting and over safeguarding of assets against
unauthorized acquisition, use or disposition, designed to provide reasonable
assurance to management and the board of directors regarding preparation of
reliable published financial statements and such asset safeguarding. The system
is supported with written policies and procedures, contains self-monitoring
mechanisms and is audited by the internal audit function. Appropriate actions
are taken by management to correct deficiencies as they are identified. All
internal control systems have inherent limitations, including the possibility of
circumvention and overriding of controls, and, therefore, can provide only
reasonable assurance as to financial statement preparation and such asset
safeguarding.
The Corporation has also adopted a code of conduct which, among other things,
contains policies for conducting business affairs in a lawful and ethical manner
in each country in which it does business, for avoiding potential conflicts of
interest, and for preserving confidentiality of information and business ideas.
Internal controls have been implemented to provide reasonable assurance that the
code of conduct is followed.
The financial statements have been audited by the independent accounting firm,
Deloitte & Touche LLP. During their audits, the independent auditors were given
unrestricted access to all financial records and related data, including minutes
of all meetings of stockholders and the board of directors and all committees of
the board. Management believes that all representations made to the independent
auditors during their audits were valid and appropriate. The financial
statements of Scott Paper Company for 1995, 1994 and 1993 were audited by other
auditors. Their reports were furnished to Deloitte & Touche LLP, whose
auditors' opinion as it relates to amounts included for Scott Paper Company, is
based solely on the reports of such other auditors.
During the audits conducted by both the independent auditors and the internal
audit function, management received recommendations to strengthen or modify
internal controls in response to developments and changes. Management has
adopted, or is in the process of adopting, all recommendations which are cost-
effective.
The Corporation has assessed its internal control system as of December 31,
1995 in relation to criteria for effective internal control over financial
reporting described in `Internal Control - Integrated Framework'' issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on this
assessment, management believes that, as of December 31, 1995, its system of
internal control over the preparation of its published interim and annual
financial statements and over safeguarding of assets against unauthorized
acquisition, use or disposition met those criteria.
/s/ Wayne R. Sanders /s/ John W. Donehower
- ---------------------------- ----------------------------
Wayne R. Sanders John W. Donehower
Chairman of the Board Senior Vice President and
and Chief Executive Officer Chief Financial Officer
January 30, 1996
The following list includes certain companies which were owned directly or
indirectly by Kimberly-Clark Corporation,
a Delaware corporation, Dallas, Texas, as of December 31, 1995. Kimberly-Clark's
percentage ownership of each company is 100 percent unless otherwise indicated.
This list includes all significant subsidiaries and equity companies. The
place of incorporation is the same as the location of the company except as
shown parenthetically.
Consolidated Subsidiaries
Avent, Inc. and subsidiaries (Delaware) Tucson, Arizona
Carlton Paper Corporation Limited, Johannesburg,
South Africa (50% plus one share)
Chengdu Comfort & Beauty Sanitary Articles Co., Ltd.,
Chengdu, China (98.1%)
CPM Inc. (New Hampshire) East Ryegate, Vermont
Handan Comfort & Beauty (Group) Co., Ltd., Handan,
China (90%)
Housing Horizons, LLC, Dallas, Texas
Kimberly-Clark Inova a.s., Czech Republic
K-C Aviation Inc. and subsidiaries (Delaware) Dallas, Texas
Kimberly-Clark Argentina S.A. and subsidiaries,
Cordoba, Argentina (51%)
Kimberly-Clark Benelux Operations B.V., Veenendaal,
Netherlands
Kimberly-Clark Canada Inc. and subsidiaries, Mississauga,
Ontario, Canada
Kimberly-Clark de Centro America, S.A., Sitio del Nino,
El Salvador (75%)
Kimberly-Clark Costa Rica, S.A., Cartago, Costa Rica (75%)
Kimberly-Clark Far East Pte. Limited, Singapore
Kimberly-Clark GmbH, Koblenz, Germany
Kimberly-Clark International, S.A., Panama City, Panama
Kimberly-Clark Limited, Larkfield, Kent, United Kingdom
Kimberly-Clark Malaysia Sendirian Berhad, Petaling Jaya,
Malaysia (51.0%)
Kimberly-Clark Peru, S.A., Lima, Peru (68%)
Kimberly-Clark Philippines Inc., Makati, Philippines (87%)
Kimberly-Clark Puerto Rico, Inc. (Delaware) San Juan,
Puerto Rico
Kimberly-Clark Sopalin, S.A., St. Cloud, France
Kimberly-Clark Thailand Limited, Bangkok, Thailand
Kunming Comfort & Beauty Hygienic Products Co., Ltd.,
Kunming, China (97.9%)
Nanjing Comfort & Beauty Sanitary Products Co., Ltd.,
Nanjing, China (97.9%)
Scott Continental N.V., Duffel, Belgium
Scott GmbH, Neunkirchen, Germany
Scott Iberica, S.A., Madrid, Spain (99.7%)
Scott India, Pune, India
Scott Japan Limited, Tokyo, Japan
Scott Limited, Northfleet, Kent, United Kingdom
Scott Paper Indonesia, Jakarta Utara, Indonesia
Scott Page B.V., Gennep, The Netherlands
Scott Paper Limited, Mississauga, Ontario, Canada (50.1%)
Scott Paper Company (Pennsylvania) Neenah, Wisconsin
Scott Paper Company de Costa Rica, S.A., San Jose,
Costa Rica (51%)
Scott Paper Company - Honduras, S.A. de C.V.,
San Pedro, Honduras
Scott Paper GmbH, Dusseldorf, Germany
Scott Paper (Guangzhou) Limited, Guangzhou Province,
China (75%)
Scott Paper (Hong Kong) Limited, Kowloon, Hong Kong
Scott Paper (Malaysia) Sdn. Bhd., Kluang, Malaysia
Scott Paper Portugal Lda., Lisboa, Portugal
Scott Paper (Shanghai) Co., Ltd., Shanghai, China (56%)
Scott Paper (Singapore) Pte. Ltd., Singapore
Scott S.N.C., Le Pecq, France
Scott S.p.A., Torino, Italy
Taiwan Scott Paper Corporation, Taipei, Taiwan (66.7%)
Thai-Scott Paper Company Limited, Bangkok, Thailand (99.6%)
Venekim, C.A., Caracas, Venezuela (60%)
YuHan-Kimberly, Limited, Seoul, Korea (60%)
Equity Companies
Colombiana Kimberly S.A., Medellin, Colombia (50%)
Colombiana Universal de Papeles S.A., Pereira, Colombia (50%)
Compania Industrial de San Cristobal, S.A., Mexico City,
Mexico (48.8%*)
Kimberly-Clark Australia Pty. Limited, Milsons Point,
New South Wales, Australia (50%)
Kimberly-Clark Dominicana, S.A., Santo Domingo,
Dominican Republic (33%)
Kimberly-Clark Lever, Ltd., Pune, India (50%)
Kimberly-Clark de Mexico, S.A. de C.V., Mexico City,
Mexico (43%)
Midwest Express Holdings, Inc. (Delaware) Milwaukee,
Wisconsin (20%)
Olayan Kimberly-Clark Arabia Company, Al-Khobar,
Kingdom of Saudi Arabia (49%)
Olayan Kimberly-Clark (Bahrain) WLL, Manama,
Bahrain (49%)
P.T. Kimsari Paper Indonesia, Medan, Indonesia (50%)
Ssangyong Paper Co., Ltd., Seoul, Korea (23.8%)
*An additional 3.1 percent of this affiliate is owned by a 40-percent-owned
Mexican affiliate of the Corporation.
Exhibit No. (23)a.
INDEPENDENT AUDITORS' CONSENT
- -----------------------------
We consent to the incorporation by reference in Kimberly-Clark Corporation's
Registration Statements on Form S-8 (Nos. 33-5299, 33-30425, 33-49050, 33-
58402 and 33-64689) and on Form S-3 (Nos. 33-52343 and 33-54177) of our
reports dated January 30, 1996, appearing in and incorporated by reference in
this Annual Report on Form 10-K of Kimberly-Clark Corporation for the year
ended December 31, 1995.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Dallas, Texas
March 22, 1996
Exhibit No. (23)b.
INDEPENDENT AUDITORS' CONSENT
- -----------------------------
We hereby consent to the incorporation by reference in Kimberly-Clark
Corporation's Registration Statements on Form S-8 (Nos. 33-5299, 33-30425,
33-49050, 33-58402 and 33-64689) and on Form S-3 (Nos. 33-52343 and 33-54177)
of our report dated January 30, 1996 on our audits of the consolidated
financial statements and financial statement schedule of Scott Paper Company
as of December 30, 1995 and December 31, 1994 and for the years then ended,
appearing in this Annual Report on Form 10-K of Kimberly-Clark Corporation
for the year ended December 31, 1995.
/s/ COOPERS & LYBRAND L.L.P.
- ----------------------------
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
March 26, 1996
Exhibit No. (23)c.
INDEPENDENT AUDITORS' CONSENT
- -----------------------------
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 33-5299, 33-30425, 33-49050, 33-58402 and 33-
64689) and on Form S-3 (Nos. 33-52343 and 33-54177) of Kimberly-Clark
Corporation of our report dated January 25, 1994, except as to the
classification of S.D. Warren as a discontinued operation, which is as of
December 20, 1994, appearing on page 25 in this Annual Report on Form 10-K of
Kimberly-Clark Corporation for the year ended December 31, 1995. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears on page 27 of such Annual Report on Form
10-K.
/s/ PRICE WATERHOUSE LLP
- ------------------------
PRICE WATERHOUSE LLP
Philadelphia, PA
March 22, 1996
Exhibit No. (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ John F. Bergstrom
---------------------
John F. Bergstrom
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that John F. Bergstrom is personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed, sealed
and delivered the said instrument as his free and voluntary act, for the uses
and purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for her and in her
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ Pastora San Juan Cafferty
-----------------------------
Pastora San Juan Cafferty
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that Pastora San Juan Cafferty is personally known
to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that she
signed, sealed and delivered the said instrument as her free and voluntary act,
for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ Paul J. Collins
-------------------
Paul J. Collins
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that Paul J. Collins is personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed, sealed
and delivered the said instrument as his free and voluntary act, for the uses
and purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ Robert W. Decherd
---------------------
Robert W. Decherd
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that Robert W. Decherd is personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed, sealed
and delivered the said instrument as his free and voluntary act, for the uses
and purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ William O. Fifield
----------------------
William O. Fifield
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that William O. Fifield is personally known to me
to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed, sealed
and delivered the said instrument as his free and voluntary act, for the uses
and purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ Claudio X. Gonzalez
-----------------------
Claudio X. Gonzalez
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that Claudio X. Gonzalez is personally known to me
to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed, sealed
and delivered the said instrument as his free and voluntary act, for the uses
and purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ James G. Grosklaus
----------------------
James G. Grosklaus
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that James G. Grosklaus is personally known to me
to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed, sealed
and delivered the said instrument as his free and voluntary act, for the uses
and purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ Louis E. Levy
-----------------
Louis E. Levy
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that Louis E. Levy is personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that she signed, sealed and
delivered the said instrument as her free and voluntary act, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ Frank A. McPherson
----------------------
Frank A. McPherson
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that Frank A. McPherson is personally known to me
to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that she signed, sealed
and delivered the said instrument as her free and voluntary act, for the uses
and purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for her and in her
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ Linda Johnson Rice
----------------------
Linda Johnson Rice
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that Linda Johnson Rice is personally known to me
to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that she signed, sealed
and delivered the said instrument as her free and voluntary act, for the uses
and purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ Wolfgang R. Schmitt
-----------------------
Wolfgang R. Schmitt
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that Wolfgang R. Schmitt is personally known to me
to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that she signed, sealed
and delivered the said instrument as her free and voluntary act, for the uses
and purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute
and appoint John W. Donehower, Randy J. Vest and O. George Everbach, and each of
them, with full power to act alone, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign Kimberly-Clark
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
February, 1996.
/s/ Randall L. Tobias
---------------------
Randall L. Tobias
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that Randall L. Tobias is personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that she signed, sealed
and delivered the said instrument as her free and voluntary act, for the uses
and purposes therein set forth.
GIVEN under my hand and notarial seal this 13th day of February, 1996.
/s/ Clairene Jorella
--------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
5
1000
12-MOS
DEC-31-1995
DEC-31-1995
221600
0
1762700
84700
1426100
3813800
10919900
4866600
11439200
3869600
1984700
0
0
352900
3297500
11439200
13788600
13788600
8828100
12135600
1440000
0
245500
104400
153500
33200
0
0
0
33200
.12
.12
