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FORM 10-K
UNITED STATES
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, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
--------------- ---------------
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: (972) 281-1200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- ---------------------------------------------- ------------------------
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 14, 1997, 279,744,614 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 $ 29.5 billion.
FACING SHEET
DOCUMENTS INCORPORATED BY REFERENCE
Kimberly-Clark Corporation's 1996 Annual Report to Stockholders and 1997 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 1996
Annual Report to Stockholders and 1997 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
1996 Annual Report to Stockholders PART I
(Year ended December 31, 1996) 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
1997 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 only to Kimberly-Clark Corporation. 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 16 to the Financial
Statements contained in the 1996 Annual Report to Stockholders, are
incorporated in this Item 1 by reference.
RECENT DEVELOPMENTS. Prior to 1992, the Corporation was a widely
diversified enterprise engaged in the manufacture and sale of consumer
products, paper and forest products, airline services and various other
businesses. In recent years, the Corporation has been undergoing a
transition to a global consumer products company based on the strategy of
building on its core technologies, well-known trademarks and consumer
product franchises. Those businesses that did not, or could not, build
on these strengths were candidates for divestiture. Those businesses
that fit into the Corporation's strategy were candidates for further
investment and support. Outside businesses that were perceived as
opportunities consistent with the strategy were candidates for
acquisition. As a result, the Corporation has completed a number of
recent transactions.
On September 27, 1995, the Corporation sold 80 percent of the outstanding
shares of Midwest Express Holdings, Inc. (`MEH''), the parent company of
Midwest Express Airlines Inc. and Astral Aviation, Inc., in an initial
public offering. The Corporation's remaining 20 percent interest in MEH
was sold on May 30, 1996.
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 December 12, 1995, Scott Paper Company (`Scott'') became a wholly-
owned subsidiary of Kimberly-Clark upon consummation of a merger
transaction in which each Scott common share outstanding immediately
prior to the effective time of the merger (other than shares owned by
Kimberly-Clark or Scott, which shares were canceled) was converted into
.78 of a share of common stock of Kimberly-Clark. On February 14, 1996,
Scott changed its name to Kimberly-Clark Tissue Company.
On June 28, 1996, the Corporation sold the baby and child wipe businesses
previously conducted by Scott, consisting of the Baby Fresh, Wash a-Bye
Baby and Kid Fresh brands and the Dover, Delaware production facility, to
The Procter & Gamble Company. This divestiture was required by the U.S.
Justice Department as part of the Scott merger.
On July 31, 1996, the Corporation sold Scott's Fort Edward, New York
tissue mill and licensed the Scotties facial tissue brand name to Irving
Tissue, Inc., a privately-held Canadian company. This divestiture was
required by the U.S. Justice Department as part of the Scott merger.
On September 16, 1996, the Corporation sold its tissue mill in Prudhoe,
England and certain consumer tissue businesses in the United Kingdom and
Ireland to Svenska Cellulosa Aktiebolaget (SCA) of Sweden. This
divestiture was required by the European Commission as part of the Scott
merger.
On November 22, 1996, the Corporation sold its Lakeview tissue mill in
Neenah, Wisconsin to American Tissue Mills of Neenah, LLC. This
divestiture was required by the U.S. Justice Department as part of the
Scott merger.
On February 14, 1997, the Corporation signed an agreement with Alliance
Forest Products Inc., a publicly held Canadian corporation (`Alliance''),
pursuant to which the Corporation agreed to sell its Coosa Pines, Alabama
pulp and newsprint operations, and related woodlands, to Alliance for
approximately $600 million in cash. The transaction, which is subject to
the completion of financing by Alliance, and other customary conditions,
is expected to close on March 27, 1997.
On February 25, 1997, the Corporation announced its intention to sell its
pulp operations and related woodlands at Terrace Bay, Ontario; New
Glasgow, Nova Scotia; and Miranda, Spain by mid-1998 as part of its plan
to reduce its exposure to the cyclical, capital-intensive pulp business.
Notwithstanding the planned divestitures, the Corporation intends to
retain sufficient pulp and recycled fiber capacity in North America to
support its away-from-home products and its consumer tissue products in
the value category, all of which compete with products from fiber-
integrated manufacturers. See `Raw Materials'' and ``Factors That May
Affect Future Results - Raw Materials.'
On March 4, 1997, the Corporation announced its intention to sell its
50.1 percent interest in Scott Paper Limited, a publicly-traded Canadian
company (`SPL''), to Kruger, Inc. (``Kruger'') as part of a transaction
in which Kruger would acquire all of SPL's outstanding common shares.
The transaction is subject to approval by holders of 75 percent of the
common shares represented at a special meeting of SPL shareholders to be
held prior to May 31, 1997, as well as certain regulatory and other
approvals.
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.
For financial reporting purposes, the Corporation's businesses are
separated into three segments: Personal Care Products; Tissue-Based
Products; and Newsprint, Paper and Other.
Personal Care Products includes disposable diapers, training and youth
pants; feminine care and adult incontinence care products; wet wipes;
health care products; and related products. Products in this business
segment are for household use and 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 includes facial and bathroom tissue, paper towels,
paper napkins and wipers for household and away-from-home use; pulp; and
related products. Products in this business segment are sold under the
Kleenex, Scott, Kleenex Cottonelle, Kleenex Viva, Kimwipes, Wypall and
other brand names.
Products for household use are sold directly and through wholesalers to
supermarkets, mass merchandisers, drugstores, warehouse clubs, home
health care, variety and 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 publishers and
commercial printers. Other papers and specialty products in this business
segment 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 1996 Annual
Report to Stockholders and is incorporated herein by reference.
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 and
chemicals 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.
Production at the Corporation's pulp mills at Coosa Pines and Mobile,
Alabama; Everett, Washington; Terrace Bay, Ontario; New Glasgow, Nova
Scotia; and Miranda, Spain supplied approximately 80 percent of the
Corporation's 1996 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 70 percent in 1996,
The Corporation owns or controls 6.8 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 4.9 million acres, principally
in the province of Ontario, are held under long-term Crown rights or
leases.
For recent developments related to the Corporation's fiber strategy,
including the pending sale of the Coosa Pines, Alabama pulp and newsprint
operations and related woodlands, and the Corporation's intention to sell
its pulp operations and related woodlands at Terrace Bay, Ontario; New
Glasgow, Nova Scotia; and Miranda, Spain, see `Recent Developments'' and
`Factors That May Affect Future Results - Raw Materials.''
COMPETITION. For a discussion of the competitive environment in which
the Corporation conducts its business, see `Factors That May Affect
Future Results - Competitive Environment.'
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 $207.9 million in
1996, $207.2 million in 1995 and $208.8 million in 1994.
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,
excluding those related to the proposed Cluster Rules described in the
following paragraph, are estimated to be $83.0 million in 1997 and $122.0
million in 1998. Approximately $8 million and $23 million of such
estimated expenditures in 1997 and 1998, respectively, relate to the
Coosa Pines, Alabama pulp and newsprint operations which are the subject
of a pending sale transaction. See `Recent Developments.'' 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
through 2001 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
1997-1998 are estimated at between $370 million and $400
million. Included in this range is $65 million of estimated
expenditures for the Coosa Pines, Alabama pulp and newsprint operations
which are the subject of a pending sale transaction. See `Recent
Developments.' If the sale occurs, the Corporation's estimated total
capital expenditures required to meet the Cluster Rules will be reduced
to between $305 million and $335 million. However, the nature, amount
and timing of these expenditures could change significantly based on the
provisions of the 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.
EMPLOYEES. In its worldwide consolidated operations, the Corporation had
54,800 employees as of December 31, 1996.
INSURANCE. The Corporation maintains coverage consistent with industry
practice for most risks that are incident to its operations.
FACTORS THAT MAY AFFECT FUTURE RESULTS
Certain matters discussed in this Form 10-K, or documents a portion of
which are incorporated herein by reference, concerning the business
outlook, anticipated financial results, contingencies, contemplated
transactions of the Corporation, and the adequacy of the 1995 charge for
estimated costs of the merger with Scott Paper Company, for restructuring
the combined operations and for other unusual charges, constitute
forward-looking statements and are based upon management's expectations
and beliefs concerning future events impacting the Corporation. There
can be no assurance that these events will occur or that the
Corporation's results will be as estimated.
The following factors, as well as factors described elsewhere in this
Form 10-K, or in other Securities and Exchange Commission filings, among
others, could cause the Corporation's future results to differ materially
from those expressed in any forward-looking statements made by, or on
behalf of, the Corporation.
Such factors are described in accordance with the provisions of the
Private Securities Litigation Reform Act of 1995, which encourages
companies to disclose such factors.
COMPETITIVE ENVIRONMENT. The Corporation experiences intense competition
for sales of its principal products in its major markets, both
domestically and internationally. The Corporation's products compete
with both widely advertised, well-known, branded products and private
label products which are typically sold at lower prices. The Corporation
has several major competitors in most of its markets, some of which are
larger and more diversified than the Corporation. The principal methods
and elements of competition include brand recognition and loyalty,
product quality and performance, price, marketing and distribution
capabilities. Inherent risks in the Corporation's competitive strategy
include uncertainties concerning trade and consumer acceptance and
competitive reaction. Aggressive competitive reaction may lead to
increased advertising and promotional spending by the Corporation in
order to maintain market share. Increased competition with respect to
pricing would reduce revenue and could have an adverse impact on the
Corporation's financial results. In addition, the Corporation relies on
the development and introduction of new products and line extensions as a
means of achieving and/or maintaining category leadership. In order to
maintain its competitive position, the Corporation must develop
technological innovation with respect to its products.
COST SAVING STRATEGY. A significant portion of the Corporation's
anticipated cost savings are expected to result from operating
efficiencies and other synergies realized from the Scott merger.
However, such savings will require the continued consolidation and
integration of facilities, functions, systems and procedures, all of
which present significant management challenges. There can be no
assurance that such actions will be successfully accomplished as rapidly
as expected or of the extent to which such cost savings and efficiencies
will be achieved.
RAW MATERIALS. The Corporation uses a variety of raw materials in its
manufacturing processes, including wood pulp, secondary and recycled
fibers, polypropylene and other synthetics and chemicals. Wood based raw
materials are subject to significant price variations due to the cyclical
nature of the market. On a worldwide basis, the Corporation currently
supplies approximately 80 percent of its virgin fiber needs internally,
but has recently announced its intention to sell all of its non-
integrated pulp operations. Such divestitures, if consummated, will
result in the Corporation's worldwide pulp integration level being
reduced to below 30 percent. This could help insulate the Corporation
from the dramatic price and profit fluctuations inherent in the pulp
market, or it could have no impact at all. However, following the
consummation of such strategy, increases in pulp prices could adversely
affect the Corporation's earnings if selling prices are not adjusted or
if such adjustments significantly trail the increases in pulp prices. If
the Corporation is not successful in consummating such divestitures, the
Corporation's level of pulp integration will remain relatively high and,
accordingly, its financial results could be subject to fluctuations in
the market price of pulp.
ACQUISITION AND DIVESTITURE STRATEGY. The Corporation's anticipated
financial results and business outlook are dependent in part upon the
consummation of projected divestitures on terms advantageous to the
Corporation and the availability of suitable acquisition candidates.
Because the Corporation has only recently announced plans for certain
future divestitures of pulp assets, and negotiations with potential
purchasers have not yet commenced, there can be no assurance that such
divestitures will be consummated, or, if consummated, that the terms of
such divestitures will be as advantageous to the Corporation as expected.
In addition, the Corporation could encounter significant challenges in
locating suitable acquisition candidates that are consistent with its
strategic objectives and will contribute to its long-term success.
Therefore, there can be no assurance that such acquisitions will be
consummated, or, if consummated, that the acquired businesses will be
successfully integrated with the Corporation in order to provide
anticipated earnings growth.
VOLUME FORECASTING. The Corporation's anticipated financial results
reflect forecasts of future volume increases in the sales of its
products. Challenges in such forecasting include anticipating consumer
preferences, estimating sales of new products, estimating changes in
population characteristics (such as birth rates and changes in per capita
income) and estimating the acceptance of the Corporation's products in
new markets. As a result, there can be no assurance that the
Corporation's volume increases will be as estimated.
FOREIGN MARKET RISKS. Because the Corporation and its equity companies
have manufacturing facilities in 35 countries and its products are sold
in approximately 150 countries, the Corporation's results may be
substantially affected by foreign market risks. The Corporation is
subject to the impact of economic and political instability in developing
countries. Economic uncertainty in Mexico (following the 1994 peso
devaluation) has and may continue to have an adverse impact on the
Corporation's earnings. Also, the extremely competitive and challenging
economic environments in developing countries in eastern Europe, Latin
America and Asia may slow the Corporation's sales growth and earnings
potential. In addition, the Corporation is subject to (i) foreign
exchange translation risk associated with the strengthening or weakening
of various currencies against each other and local currencies versus the
U.S. dollar, and (ii) foreign currency risk arising from transactions and
commitments denominated in non-local currencies. See `Management's
Discussion and Analysis - Foreign Currency Risks, Hedging Activities and
Inflation Risks' contained in the 1996 Annual Report to Stockholders,
which is incorporated herein by reference. Translation exposure for the
Corporation's balance sheet with respect to foreign operations is not
hedged. Although the Corporation uses instruments to hedge its foreign
currency risks (through forward contracts, currency swaps and, to a
lesser extent, option contracts), these instruments are used selectively
to manage risk and there can be no assurance that the Corporation will be
fully protected against substantial foreign currency fluctuations.
TAX RATE. The Corporation's projected 1997 tax rate is based upon
estimates of many factors, and such rate could be increased by higher
earnings in countries with relatively higher tax rates or lower earnings
in countries with relatively lower tax rates. In addition, changes in
tax legislation could have an adverse impact on the Corporation's tax
rate.
CONTINGENCIES. The costs and other effects of pending litigation and
administrative actions against the Corporation cannot be determined with
certainty. Although management believes that no such proceedings will
have a material adverse effect on the Corporation, there can be no
assurance that the outcome of such proceedings will be as expected. See
`Item 3. Legal Proceedings,'' below.
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 construction 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.
The principal facilities of the Corporation (including the Corporation's
equity companies) and the products or groups of products made at such
facilities are as follows:
HEADQUARTERS LOCATIONS
Dallas, Texas
Roswell, Georgia
Neenah, Wisconsin
Reigate, United Kingdom
Bangkok, Thailand
ADMINISTRATIVE CENTER
Knoxville, Tennessee
WORLDWIDE PRODUCTION AND SERVICE FACILITIES
UNITED STATES
ALABAMA
Coosa Pines - pulp and newsprint (1)
Mobile - tissue products and pulp (2)
ARIZONA
Tucson - nonwovens
Yucca - tissue products (1)
ARKANSAS
Conway - feminine care, incontinence care, nonwovens
Maumelle - wet wipes, nonwovens
CALIFORNIA
Fullerton - tissue products
CONNECTICUT
New Milford - diapers, feminine care, tissue products
GEORGIA
LaGrange - nonwovens
KENTUCKY
Owensboro - tissue products
MAINE
Winslow - tissue products (3)
MASSACHUSETTS
Westfield - aircraft maintenance, finishing and refurbishing
MICHIGAN
Munising - printing and base papers
MISSISSIPPI
Corinth - nonwovens, away-from-home wipers and towels
Hattiesburg - tissue products
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
Cleburne - away-from-home products
Dallas - aircraft maintenance, finishing and refurbishing
Italy - away-from-home products
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
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 - pulp, tissue products
* Tantanoola - pulp
* Warwick Farm - tissue products
BAHRAIN
* East Riffa - tissue products
*Equity company production facility
BELGIUM
Duffel - tissue products
BRAZIL
Porto Alegre - diapers, feminine care
Suzano- diapers, feminine care
CANADA
Crabtree, Quebec - tissue products (4)
Hull, Quebec - tissue products (4)
Huntsville, Ontario - tissue products, away-from-home wipers
Lennoxville, Quebec - tissue products (4)
New Glasgow, Nova Scotia - pulp (1)
New Westminster, British Columbia - tissue products (4)
St. Hyacinthe, Quebec - feminine care, diapers
Terrace Bay, Ontario - pulp (1)
CHINA (5)
Beijing - feminine care
Changchun - feminine care
Chengdu - feminine care
Guangzhou - tissue products
Handan - feminine care
Harbin - feminine care
Kunming - feminine care
Nanjing - feminine care
Shanghai - tissue products
Shenyang - feminine care
Taiyuan - feminine care
Wuhan - feminine care
COLOMBIA
* Barbosa - away-from-home products, specialty products, fine papers,
notebooks
* Guarne - tissue products
* Pereira - tissue products, feminine care, incontinence care, diapers
* Tocancipa - diapers
COSTA RICA
Cartago - diapers
San Jose - tissue products
CZECH REPUBLIC
Jaromer-diapers, incontinence care
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
Flensburg - tissue products
Forchheim - feminine care, incontinence care
Koblenz - tissue products
Reisholz - tissue products
*Equity company production facility
HONDURAS
Cortes - nonwovens
San Pedro Sula - tissue products, feminine care
HONG KONG
Hong Kong - tissue products (6)
INDIA
* Pune - feminine care, diapers
Pune - tissue products
INDONESIA
Jogjakarta - tissue products
* Medan - specialty products
ISRAEL
* Afula - diapers, feminine care, incontinence care
* Hadera - tissue products
* Nahariya - tissue products
ITALY
Alanno - tissue products
Romagnano - tissue products
Villanovetta - tissue products
KOREA
Anyang - feminine care, diapers, 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
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
*Equity company production facility
SLOVAKIA
Piestany - nonwovens
SOUTH AFRICA
Cape Town - tissue products, feminine care
Springs - tissue products, feminine care, diapers, incontinence care
SPAIN
Aranguren - tissue products
Arceniega - tissue products, personal cleansing products and systems
Canary Islands - tissue products
Miranda del Ebro - pulp (1)
Salamanca - tissue products
TAIWAN
Hsin-Ying - tissue products (7)
Ta-Yuan - tissue products
THAILAND
Pathumthanee - feminine care, diapers, tissue products
Samut Prakarn - tissue products
UNITED KINGDOM
Barrow - tissue products
Barton-upon-Humber - diapers
Flint - tissue products, nonwovens
Larkfield - tissue products
Northfleet - tissue products
Sealand - feminine care
VENEZUELA
Guacara - diapers
Maracay - tissue products
(1) The Corporation has announced its intention to close or sell this facility.
(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 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.
(4) The Corporation has announced its intention to sell its 50.1 percent
interest in SPL, the owner of the facility.
(5) The land on which these facilities are located is held under long-term
leases.
(6) This facility is held under a short-term renewable lease.
(7) The land and a portion of this facility are subject to a mortgage.
*Equity company production facility
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 its properties is subject:
Litigation
A. Since 1990, numerous lawsuits, related to exposure to asbestos, have
been filed in state and federal courts by thousands of plaintiffs
against multiple defendants, including, in some cases, the Corporation.
After the settlement of several matters in 1995, there remain three
consolidated multiple plaintiff asbestos actions in Texas state courts
that include less than 250 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, Alabama 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. The complaints do not specify the amount of damages
demanded.
The Corporation believes that its defenses to these 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.Kimberly-Clark Tissue Company, formerly named Scott Paper Company, 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. Under a ruling covering
federal multi-district litigation, all federal cases have been
consolidated in the Northern District of Alabama for pre-trial
purposes. In April 1995, the court granted Scott's motion for summary
judgment and dismissed with prejudice all claims pending against Scott
and the purchaser of Scott's Foam Division. Scott's similar motion for
summary judgment was granted in the consolidated California state
actions. Actions in other state courts have not reached the stage in
the litigation process where similar summary judgment motions can be
filed.
In the consolidated federal suit, the plaintiffs initially appealed the
summary judgment but then agreed, in January 1996, to dismiss the
appeal against Scott and its related entities. In the consolidated
California actions, the plaintiffs never filed an appeal. Therefore,
the summary judgment in Scott's favor in the federal multi-district
litigation and in California are final and no new legal claims can be
filed in either any United States district court or in California. In
the hundreds of actions pending in other state courts, the actions are
in various stages of early discovery.
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. In June and November 1996, the Corporation was served with amended
complaints in the action originally filed on September 20, 1994 by the
Attorney General of the state of West Virginia in the Circuit Court of
Kanawha County seeking to recover from certain tobacco companies and
other defendants, including the Corporation, monies which West Virginia
allegedly has spent and will spend on medical care for its citizens
with alleged tobacco-related illnesses. Among other things, the
amended complaints alleged that the Corporation aided, abetted and
participated in the manufacture of cigarettes by supplying
reconstituted tobacco sheets to the tobacco company defendants and
advertising that the use of such sheets would allow the tobacco
companies to manipulate the level of nicotine in their cigarettes.
The Attorney General amended the original complaints in the action to
add Public Employees Insurance Agency and the Department of Health and
Human Services as plaintiffs in an effort to reinstate eight common law
counts which had been dismissed against the Corporation and the other
defendants on June 6, 1995 on the basis that the Attorney General
lacked the authority to bring the suit in his own name. The
Corporation filed a motion to dismiss the amended complaints on several
grounds. On February 13, 1997, the reinstated common law claims were
again dismissed, leaving only antitrust and consumer protection claims
arising under state law.
The Corporation believes that its defenses to these remaining claims
are meritorious.
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
The information set forth under the "Environmental Matters" section of
"Management's Discussion and Analysis" contained in the 1996 Annual Report
to Stockholders is incorporated in this Item 3 by reference.
The Corporation has been named a potentially responsible party under the
provisions of the federal Comprehensive Environmental Response,
Compensation and Liability Act, 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. There have been no
significant developments since the date the Corporation received the
notice.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names and ages of the executive officers of the Corporation as of March
1, 1997, together with certain biographical information, are as follows:
ROBERT E. ABERNATHY, 42, was elected Group President effective January 1,
1997. He is responsible for the professional health care business,
nonwovens manufacturing and research, the technical papers business,
K-C Aviation Inc. and the World Support Group. Mr. Abernathy joined the
Corporation in 1982. His past responsibilities in the Corporation have
included operations and major project management in North America. He was
appointed Vice President-North American Diaper Operations in 1992 and
Managing Director of Kimberly-Clark Australia Pty. Limited in 1994.
JOHN W. DONEHOWER, 50, 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, 58, 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, 38, was elected Group President - Tissue, Pulp and Paper
effective January 1, 1996. He is responsible for the Family Care, Wet
Wipes, Away From Home, Neenah Paper and Pulp and Paper Sectors, as well as
the Consumer Business Services, Environment and Energy and Human Resources
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.
PAUL S. GEISLER, 55, was elected Group President - Asia/Pacific in April
1996. He was appointed President - Asia in 1994. Mr. Geisler joined the
Corporation in 1982 as Marketing Director - Facial Tissue and Table
Napkins. He was appointed Vice-President - DEPENDR Absorbent Products and
New Technology Products in 1984, and Vice-President - Home Health Care in
1985. In 1990, Mr. Geisler was appointed President - U.S. Infant Care
Sector, and in 1992, he was elected Group President - North American
Feminine Care and Adult Care Sectors.
WAYNE R. SANDERS, 49, was elected Chief Executive Officer in 1991 and
Chairman of the Board in 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, 47, 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, 49, 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, and the Central and Eastern
Europe Consumer and Away From Home businesses. 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 15 to the Financial
Statements, and the information set forth under the captions "Dividends and
Dividend Reinvestment Plan" and "Stock Exchanges" contained in the 1996 Annual
Report to Stockholders are incorporated in this Item 5 by reference.
As of March 14,1997, the Corporation had 55,800 stockholders of record.
ITEM 6. SELECTED FINANCIAL DATA
(Millions of dollars, Year Ended December 31
---------------------------------------------------------------
except per share amounts) 1996 1995(1) 1994(1) 1993(1) 1992(1)
- -------------------------------------------------------------------------------------------------
Net Sales .................. $13,149.1 $13,373.0 $11,627.9 $11,341.1 $11,745.4
Restructuring and Other
Unusual Charges (2) ............ -- 1,440.0 -- 378.9 250.0
Operating Profit (2) ............. 2,053.7 213.0 1,277.1 734.5 883.8
Share of Net Income of
Equity Companies (3) ........... 152.4 113.3 110.5 76.1 90.0
Income from Continuing
Operations Before
Extraordinary Loss and
Cumulative Effects
of Accounting Changes (2)(3) ... 1,403.8 33.2 766.5 287.2 492.0
Net Income (2)(3)(4)(5)(6) ....... 1,403.8 33.2 753.8 231.0 150.1
Per Share Basis:
Income from Continuing
Operations Before
Extraordinary Loss and
Cumulative Effects
of Accounting Changes (2)(3).. $ 4.98 $ .12 $ 2.76 $ 1.03 $ 1.77
Net Income (2)(3)(4)(5)(6)...... 4.98 .12 2.71 .83 .54
Cash Dividends Declared ........ 1.84 1.80 1.76 1.29 2.07
Cash Dividends Paid ............ 1.83 1.79 1.75 1.70 1.64
Total Assets ..................... $11,845.7 $11,439.2 $12,555.7 $13,210.4 $12,559.4
Long-Term Debt ................... 1,738.6 1,984.7 2,085.4 3,403.0 3,140.1
Stockholders' Equity ............. 4,483.1 3,650.4 4,134.9 3,810.7 3,996.7
(1)Certain promotional costs have been reclassified from advertising,
promotion and selling expenses to a reduction in net sales for all
years presented to conform to the presentation of such data for the
year ended December 31, 1996.
(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 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 service products
operations in Europe and certain operations in North America.
(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, peso losses charged 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 of a discontinued operation, net of taxes,
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 and 1992 include a loss of a discontinued
operation, net of taxes, of $46.6 million ($.17 per share) and $30.9 million
($.11 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 1996 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
1996 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 1997 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 1997 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 section of the 1997 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 of the 1997 Proxy Statement captioned
"Certain Transactions and Business Relationships" under "Proposal 1.
Election of Directors' 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, 1996 and 1995, and the
related Consolidated Income Statement and Consolidated Cash Flow Statement
for the years ended December 31, 1996, 1995 and 1994, 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 1996 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 1996
Annual Report to Stockholders.
Independent Auditors' Reports
Schedule for Kimberly-Clark Corporation and Subsidiaries:
Schedule 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, dated December 12,
1995, incorporated by reference to Exhibit No. (3) to the Corporation's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1996.
Exhibit No. (3)b. By-Laws, as amended November 22, 1996, incorporated by
reference to Exhibit No. 4.2 of the Corporation's Registration Statement on
Form S-8 filed with the Securities and Exchange Commission on December 6,
1996 (File No. 33-17367).
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. Management Achievement Award Program, as amended as of
January 1, 1997.
Exhibit No. (10)b. Executive Severance Plan, incorporated by reference to
Exhibit No. (10)c of the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1992.
Exhibit No. (10)c. Fourth Amended and Restated Deferred Compensation Plan
for Directors.
Exhibit No. (10)d. 1986 Equity Participation Plan, as amended effective
November 1, 1996.
Exhibit No. (10)e. 1992 Equity Participation Plan, as amended effective
November 1, 1996 (subject to stockholder approval at the Corporation's 1997
Annual Meeting of Stockholders).
Exhibit No. (10)f. Deferred Compensation Plan, effective as of October 1,
1994, incorporated by reference to Exhibit No. (10)g of the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1994.
Exhibit No. (10)g. First Amendment to Deferred Compensation Plan, effective
as of November 22, 1996.
Exhibit No. (10)h. Outside Directors' Stock Compensation Plan, incorporated
by reference to Exhibit No. 4.5 to the Corporation's Registration Statement
on Form S-8 filed with the Securities and Exchange Commission on April 18,
1996 (File No. 33-02607).
Exhibit No. (10)i. Supplemental Benefit Plan to Salaried Employees'
Retirement Plan, effective as of November 17, 1994.
Exhibit No. (10)j. Second Supplemental Benefit Plan to Salaried Employees'
Retirement Plan, effective as of November 17, 1994.
Exhibit No. (10)k. Retirement Contribution Excess Benefit Program,
effective as of January 1, 1997, incorporated by reference to Exhibit No.
4.5 to the Corporation's Registration Statement on Form S-8 filed with the
Securities and Exchange Commission on December 6, 1996 (File No. 33-17367).
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 the Corporation's capital structure during the periods presented
were options outstanding under its Equity Participation Plans and under
Scott's stock option plans.
Had the Corporation computed its `primary'' and ``fully diluted'' net
income per share assuming the exercise of outstanding stock options under
the `treasury stock method,'' the earnings per share amounts presented in
Part II, Item 6 would be reduced as follows:
Primary Fully Diluted
1996 $ .03 $ .04
1995 - -
1994 .02 .02
1993 - -
1992 - -
Exhibit No. (12). Computation of ratio of earnings to fixed charges for the
five years ended December 31, 1996.
Exhibit No. (13). Portions of the Corporation's 1996 Annual Report to
Stockholders incorporated by reference in this Form 10-K.
Exhibit No. (21). Significant Subsidiaries of the Corporation.
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. (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
(i)On February 20, 1997, the Corporation filed a Current Report on Form 8-
K reporting its Business Segment Analysis for the three months and year
ended December 31, 1996.
(ii) On February 26, 1997, the Corporation filed a Current Report on Form
8-K reporting certain matters discussed at a meeting with securities
analysts.
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 20, 1997
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 March 20, 1997
- -------------------------
Wayne R. Sanders Chairman of the Board
and Chief Executive Officer
and Director
(principal executive officer)
/s/ John W. Donehower March 20, 1997
- --------------------------
John W. Donehower Senior Vice President and
Chief Financial Officer
(principal financial officer)
/s/ Randy J. Vest March 20, 1997
- --------------------------
Randy J. Vest Vice Presidnet and
Controller
(principal accounting officer)
Directors
John F. Bergstrom Louis E. Levy
Pastora San Juan Cafferty Frank A. McPherson
Paul J. Collins Linda Johnson Rice
Robert W. Decherd Wolfgang R. Schmitt
William O. Fifield Randall L. Tobias
Claudio X. Gonzalez
By: /s/ O. George Everbach March 20, 1997
---------------------------------
O. George Everbach, Attorney-in-Fact
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 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
INDEPENDENT AUDITORS' REPORT
KIMBERLY-CLARK CORPORATION:
We have audited the consolidated financial statements of Kimberly-Clark
Corporation as of December 31, 1996 and 1995, and for each of the three
years in the period ended December 31, 1996, and have issued our report
thereon dated January 27, 1997; such consolidated financial statements
and report are included in your 1996 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 Kimberly-Clark
Tissue Company (formerly Scott Paper Company), a wholly-owned subsidiary
of Kimberly-Clark Corporation, for the years ended December 31, 1995 and
1994 were audited by other auditors whose report has been furnished to
us, and our opinions, insofar as they relate to the amounts included for
Kimberly-Clark Tissue Company, are based solely on the report of such
other auditors.
In our opinion, based on our audits and the report 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 27, 1997
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
SCHEDULE II Kimberly-Clark Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Millions of dollars)
ADDITIONS DEDUCTIONS
---------------------- -------------------------
BALANCE AT CHARGED TO CHARGED TO WRITE-OFFS BALANCE
BEGINNING COSTS AND OTHER AND DISCOUNTS AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS(A) ALLOWED PERIOD
- -------------------------------------------------------------------------------------------
DECEMBER 31, 1996
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts ............ $54.0 $ 13.1 $ .1 $ 34.2(b) $33.0
Allowances for sales
discounts ........... 30.7 181.4 - 198.8(c) 13.3
----- ------ ----- ------ -----
Total ............ $84.7 $194.5 $ .1 $233.0 $46.3
===== ====== ===== ====== =====
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
===== ====== ===== ====== =====
(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:
Schedule II Valuation and Qualifying Accounts
Exhibit No. (3)a. Restated Certificate of Incorporation, dated December
12, 1995, incorporated by reference to Exhibit No. (3) to the
Corporation's Quarterly Report on Form 10-Q for the quarter ended June
30, 1996.
Exhibit No. (3)b. By-Laws , as amended November 22, 1996, incorporated by
reference to Exhibit No. 4.2 of the Corporation's Registration Statement
on Form S-8 filed with the Securities and Exchange Commission on December
6, 1996 (File No. 33-17367).
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. Management Achievement Award Program, as amended as of
January 1, 1997.
Exhibit No. (10)b. Executive Severance Plan, incorporated by reference to
Exhibit No. (10)c of the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1992.
Exhibit No. (10)c. Fourth Amended and Restated Deferred Compensation Plan
for Directors.
Exhibit No. (10)d. 1986 Equity Participation Plan, as amended effective
November 1, 1996.
Exhibit No. (10)e. 1992 Equity Participation Plan, as amended effective
November 1, 1996 (subject to stockholder approval at the Corporation's
1996 Annual Meeting of Stockholders).
Exhibit No. (10)f. Deferred Compensation Plan, effective as of October 1,
1994, incorporated by reference to Exhibit No. (10)g of the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1994.
Exhibit No. (10)g. First Amendment to Deferred Compensation Plan,
effective as of November 22, 1996.
Exhibit No. (10)h. Outside Directors' Stock Compensation Plan,
incorporated by reference to Exhibit No. 4.5 to the Corporation's
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission on April 18, 1996 (File No. 33-02607).
Exhibit No. (10)i. Supplemental Benefit Plan to Salaried Employees'
Retirement Plan, effective as of November 17, 1994.
Exhibit No. (10)j. Second Supplemental Benefit Plan to Salaried
Employees' Retirement Plan, effective as of November 17, 1994.
Exhibit No. (10)k. Retirement Contribution Excess Benefit Program,
effective as of January 1, 1997, incorporated by reference to Exhibit No.
4.5 to the Corporation's Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on December 6, 1996 (File No. 33-
17367).
Exhibit No. (11). Statement regarding computation of earnings per share.
Exhibit No. (12). Computation of ratio of earnings to fixed charges for
the five years ended December 31, 1996.
Exhibit No. (13). Portions of the Corporation's 1996 Annual Report to
Stockholders incorporated by reference in this Form 10-K.
Exhibit No. (21). Significant Subsidiaries of the Corporation.
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. (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.