Kimberly-Clark Announces Year-End 2015 Results And 2016 Outlook

25 Jan, 2016, 07:30 ET from Kimberly-Clark Corporation

DALLAS, Jan. 25, 2016 /PRNewswire/ -- Kimberly-Clark Corporation (NYSE: KMB) today reported year-end 2015 results and provided its 2016 outlook and related key planning assumptions.

Executive Summary

  • Fourth quarter 2015 net sales of $4.5 billion decreased 6 percent compared to the year-ago period, as changes in foreign currency exchange rates reduced sales 11 percent. Organic sales rose 5 percent, including a 9 percent increase in developing and emerging markets.
  • Diluted net income per share for the fourth quarter was income of $0.91 in 2015 and a loss of $0.22 in 2014. Full-year diluted net income per share was $2.77 in 2015 and $4.04 in 2014.
  • Fourth quarter adjusted earnings per share were $1.42 in 2015 compared to adjusted earnings per share from continuing operations of $1.35 in 2014. Performance benefited from organic sales growth, cost savings, input cost deflation and a lower share count. Comparisons were negatively impacted by unfavorable foreign currency exchange rate effects, increased marketing, research and general spending on a local currency basis and higher other expense. Adjusted earnings per share in both years exclude certain items described later in this news release.
  • Full-year adjusted earnings per share were $5.76 in 2015, up 5 percent compared to adjusted earnings per share from continuing operations of $5.51 in 2014. The company's previous guidance was for adjusted earnings per share of $5.70 to $5.80. The company's original outlook in January 2015 was for adjusted earnings per share of $5.60 to $5.80.
  • At the end of 2015, Kimberly-Clark deconsolidated its Venezuelan business from the company's balance sheet and moved to the cost method of accounting for its operations in Venezuela. As a result, the company recorded an after tax charge of $102 million in the fourth quarter of 2015.
  • Adjusted earnings per share in 2016 are expected to be $5.95 to $6.15. The outlook reflects expectations for 3 to 5 percent organic sales growth, substantial cost savings, relatively benign commodity costs and significantly unfavorable foreign currency exchange rates.

Chairman and Chief Executive Officer Thomas J. Falk said, "Our fourth quarter results capped off another year of good financial performance for Kimberly-Clark. For the full year of 2015, we achieved 5 percent organic sales growth, highlighted by 10 percent growth in developing and emerging markets and a 5 percent volume increase in our North American consumer products business. We also improved adjusted operating profit margin by 120 basis points, including benefits from $365 million of FORCE cost savings. In addition, we grew adjusted earnings per share from continuing operations 5 percent, toward the high end of our original guidance for the year despite significantly more currency headwinds. Finally, we improved return on invested capital considerably and returned $2.1 billion to shareholders through dividends and share repurchases. I'm pleased with our execution in a challenging environment."

Falk added, "Looking to 2016, we will continue to focus on the fundamentals that create shareholder value and we expect to deliver good underlying financial performance. We will also continue to invest in our brands, our targeted growth initiatives and our capabilities. We plan to achieve healthy organic sales growth and cost savings, improve cash flow and allocate capital in shareholder-friendly ways. Despite another year of significantly unfavorable currencies, we also expect to further improve our margins and deliver 3 to 7 percent growth in adjusted earnings per share. We are very optimistic about our future and our ability to generate attractive returns to shareholders through successful execution of our Global Business Plan."

Fourth Quarter 2015 Operating Results

Sales of $4.5 billion in the fourth quarter of 2015 were down 6 percent compared to the year-ago period. Changes in foreign currency exchange rates reduced sales 11 percent as a result of the weakening of most currencies relative to the U.S. dollar. Organic sales rose 5 percent, as volumes increased 4 percent and net selling prices improved 1 percent.

Fourth quarter operating profit was $630 million in 2015 and $158 million in 2014. Adjusted operating profit was $779 million in the fourth quarter of 2015 compared to $769 million in the year-ago period. Adjusted results in 2015 exclude $108 million of charges for the Venezuelan deconsolidation, $27 million of 2014 Organization Restructuring costs, $8 million of charges for pension settlements and $6 million of charges for restructuring the company's business in Turkey. Adjusted results in 2014 exclude a $462 million charge for a balance sheet remeasurement in Venezuela, $133 million of 2014 Organization Restructuring costs, $20 million of restructuring costs for European strategic changes and $4 million of income related to an updated assessment regarding a regulatory dispute in the Middle East.

The year-over-year adjusted operating profit comparison benefited from organic sales growth, $85 million in cost savings from the company's FORCE (Focused On Reducing Costs Everywhere) program and $15 million of savings from the 2014 Organization Restructuring. Input costs decreased $50 million, including $45 million of lower costs for raw materials other than fiber and $5 million of lower energy costs. Other manufacturing-related costs also decreased versus the year-ago period. Translation effects due to changes in foreign currency exchange rates lowered operating profit by $85 million and transaction effects also negatively impacted the comparison. Total marketing, research and general expenses increased on a local currency basis, mostly due to higher administrative and selling costs. On an adjusted basis, other (income) and expense, net was expense of $23 million in 2015 and $7 million in 2014. Results in 2015 were driven by foreign currency transaction losses, including impacts of the devaluation of the Argentine peso in December 2015.

The fourth quarter adjusted effective tax rate, which excludes the effects of the previously mentioned items excluded from adjusted earnings per share, was 30.6 percent in 2015 and 30.5 percent in 2014. The adjusted effective tax rate in the fourth quarter of 2015 also excludes the impact of a $49 million tax charge, related to prior years, as a result of an updated assessment of uncertain tax positions. Kimberly-Clark's share of net income of equity companies in the fourth quarter was $37 million in 2015 and $33 million in 2014. At Kimberly-Clark de Mexico, results benefited from organic sales growth, lower input costs and cost savings, but were negatively impacted by a weaker Mexican peso. Fourth quarter net income attributable to noncontrolling interests was $11 million in 2015 and $20 million in 2014. The change was driven by the redemption of $0.5 billion of preferred securities in December 2014.

Cash Flow and Balance Sheet

Cash provided by operations in the fourth quarter of 2015 was $665 million versus $590 million in 2014. Full-year cash provided by operations was $2,306 million in 2015 and $2,845 million in 2014. The comparison was negatively impacted by higher pension contributions, increased working capital and the 2014 spin-off of the health care business, partially offset by lower tax payments. Full-year defined benefit pension plan contributions were $485 million in 2015 and $185 million in 2014.

Capital spending for the fourth quarter was $258 million in 2015 and $309 million in 2014. Full-year spending was $1,056 million in 2015 and $1,039 million in 2014. Fourth quarter 2015 share repurchases were 2.9 million shares at a cost of $350 million. Full-year 2015 share repurchases totaled 7.1 million shares at a cost of $800 million. Total debt was $7.8 billion at the end of 2015 and $7.0 billion at the end of 2014.

Fourth Quarter 2015 Business Segment Results

Personal Care Segment

Fourth quarter sales of $2.2 billion decreased 4 percent. Currency rates were unfavorable by 12 percent. Volumes increased 6 percent and net selling prices and product mix were each favorable by 1 percent. Fourth quarter operating profit of $473 million increased 15 percent. The comparison benefited from organic sales growth, cost savings and lower input and other manufacturing-related costs, partially offset by unfavorable currency effects and increased marketing, research and general spending on a local currency basis.

Sales in North America increased 4 percent. Volumes improved 5 percent, while currency was unfavorable by 1 percent. Volumes were up double-digits in adult care, with benefits from category growth and market share gains. Volumes on Huggies diapers rose mid-single digits compared to a 10 percent decline in the year-ago period and included benefits from innovation and increased promotion support. Child care and feminine care volumes were each up low-single digits, while Huggies baby wipes volumes were off double-digits compared to strong double-digit growth in the prior year.

Sales in developing and emerging markets decreased nearly 12 percent, including a negative impact from changes in currency rates of more than 23 percent. Volumes increased 6 percent and the combined impact of higher net selling prices and changes in product mix improved sales 6 percent. The volume growth included gains in China and most of Latin America, led by Brazil. The higher net selling prices were driven by increases in Eastern Europe and Latin America in response to weaker currency rates.

Sales in developed markets outside North America (Australia, South Korea and Western/Central Europe) decreased 9 percent, including a 12 point drag from unfavorable currency rates. Volumes rose 4 percent, driven by Australia, while the combined impact of changes in net selling prices and product mix reduced sales 1 percent.

Consumer Tissue Segment

Fourth quarter sales of $1.5 billion decreased 6 percent. Currency rates were unfavorable by 9 percent. Volumes increased 4 percent, while net selling prices were down 1 percent. Fourth quarter operating profit of $262 million decreased 6 percent. The comparison was impacted by unfavorable currencies, partially offset by cost savings and organic sales growth.

Sales in North America increased 4 percent. Volumes increased 8 percent, while net selling prices were off 2 percent and product mix was unfavorable by more than 1 percent. Volume growth was particularly strong on Cottonelle bathroom tissue and Viva paper towels and included benefits from market share gains and promotion activity.

Sales in developing and emerging markets decreased 23 percent, including a 26 point negative impact from currency rates. Net selling prices rose 4 percent.

Sales in developed markets outside North America fell 10 percent. Currency rates were unfavorable 10 percent. Volumes advanced 1 percent and product mix improved slightly, while net selling prices were off 2 percent.

K-C Professional (KCP) Segment

Fourth quarter sales of $0.8 billion decreased 9 percent. Changes in currency rates reduced sales 9 percent. Volumes were off 2 percent and product mix/other was slightly unfavorable, while net selling prices rose 2 percent. Fourth quarter operating profit of $157 million increased 4 percent. The comparison was impacted by higher net selling prices and cost savings, partially offset by unfavorable currency effects.

Sales in North America were down 1 percent. Currency was unfavorable 1 percent. Net selling prices increased 1 percent, while volumes were off 1 percent.

Sales in developing and emerging markets decreased 19 percent, including a 21 point drag from currency rates. Net selling prices rose 4 percent, driven by increases in Latin America in response to weaker currency rates, and product mix was favorable by 1 percent. Volumes declined 4 percent.

Sales in developed markets outside North America were down 15 percent. Changes in currency rates reduced sales more than 11 percent. Volumes decreased 3 percent compared to a strong year-ago result.

Full Year 2015 Results

Sales of $18.6 billion decreased 6 percent compared to the year-ago period, as changes in foreign currency exchange rates reduced sales more than 10 percent. Organic sales rose approximately 5 percent, as volumes increased 4 percent and product mix/other was favorable by 1 percent.

Operating profit was $1,613 million in 2015 versus $2,521 million in 2014. Adjusted operating profit of $3,210 million in 2015 increased 1 percent compared to $3,184 million in 2014. Adjusted operating profit comparisons benefited from organic sales growth, FORCE cost savings of $365 million, input cost deflation of $150 million and $65 million of savings from the 2014 Organization Restructuring. Translation effects due to changes in foreign currency exchange rates lowered operating profit by $360 million and transaction effects also negatively impacted the operating profit comparisons. Total marketing, research and general expenses increased on a local currency basis, driven by higher administrative costs. On an adjusted basis, other (income) and expense, net was expense of $62 million in 2015, driven by foreign currency transaction losses, and income of $3 million in 2014.

Diluted net income per share was $2.77 in 2015 and $4.04 in 2014. Adjusted earnings per share of $5.76 in 2015 increased 5 percent versus $5.51 of adjusted earnings per share from continuing operations in 2014. The increase included benefits from higher adjusted operating profit and a lower share count.

Venezuela Update

At the end of 2015, Kimberly-Clark deconsolidated the assets and liabilities of its Venezuelan business from the company's balance sheet and moved to the cost method of accounting for its operations in Venezuela. The change reflects the continued deterioration of conditions in the country, including a slowdown in the availability of foreign exchange, and resulted in an after tax charge of $102 million in the fourth quarter of 2015. Beginning in the first quarter of 2016, the company will no longer include the results of its Venezuelan business in its consolidated financial statements. Kimberly-Clark continues to manufacture and sell products in Venezuela when foreign exchange is received to pay for imports of raw materials and finished goods. 

2014 Organization Restructuring

In October 2014, Kimberly-Clark initiated a restructuring program in order to improve organization efficiency and offset the impact of stranded overhead costs resulting from the spin-off of the company's health care business. The restructuring is intended to improve underlying profitability and increase flexibility to invest in targeted growth initiatives, brand building and other capabilities critical to delivering future growth.

The restructuring is expected to be completed by the end of 2016, with total costs anticipated to be toward the middle of the previously communicated range of $130 to $160 million after tax ($190 to $230 million pre-tax). Cumulative pre-tax savings from the restructuring are expected to be $120 to $140 million by the end of 2017. Fourth quarter 2015 restructuring costs were $22 million after tax ($27 million pre-tax), bringing cumulative costs to $137 million after tax ($196 million pre-tax). Fourth quarter 2015 savings were $15 million, bringing cumulative savings to $70 million.

2016 Outlook and Key Planning Assumptions

The company's key planning and guidance assumptions for 2016 are as follows:

  • Net sales in a range of down 3 percent to even with the prior year.
    • Organic sales growth of 3 to 5 percent, with volumes up 2 to 3 percent and changes in net selling prices and product mix, combined, up an additional 1 to 2 percent.
    • Negative foreign currency exchange rate impact of 5 to 6 percent.
  • Adjusted operating profit growth of 2 to 5 percent.
    • Cost savings of at least $350 million from the company's FORCE program.
    • Savings of at least $50 million from the 2014 Organization Restructuring.
    • Negative foreign currency translation effects of 5 to 6 percent. Currency transaction effects are also anticipated to negatively impact comparisons.
    • Impact of changes in key cost inputs expected to be between $100 million of deflation and $50 million of inflation. The company is assuming North American market prices of $840 to $870 per metric ton for eucalyptus pulp and $35 to $45 per barrel for oil. Despite lower oil prices, some oil-based costs are expected to increase due to market-specific dynamics. Costs for materials in some international markets are also expected to increase due to local inflation.
    • Advertising spending as a percent of net sales is expected to be similar to, or up slightly, compared to 2015.
    • Other (income) and expense, net is anticipated to be less expense than in 2015.
  • Net income from equity companies similar to or up somewhat compared to 2015's level.
  • Adjusted effective tax rate between 30.5 and 32.5 percent. The quarterly adjusted effective tax rate in 2016 could vary more than in 2015.
  • Adjusted earnings per share of $5.95 to $6.15, up 3 to 7 percent versus $5.76 in 2015.
  • Capital spending of $950 to $1,050 million.
  • Defined benefit pension plan contributions of up to $100 million.
  • Dividend expected to increase mid-single digits, subject to approval by the Board of Directors. The anticipated increase is generally consistent with the 2015 growth in adjusted earnings per share from continuing operations of 5 percent.
  • Share repurchases are expected to total $600 to $900 million, subject to market conditions.

Non-GAAP Financial Measures

This press release and the accompanying tables include the following financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP, and are therefore referred to as non-GAAP financial measures:

  • Adjusted earnings and earnings per share (including continuing operations)
  • Adjusted gross and operating profit
  • Adjusted other (income) and expense, net
  • Adjusted effective tax rate

These non-GAAP financial measures exclude the following items for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures:

  • Deconsolidation of Venezuelan business. See previous discussion in this news release.
  • Venezuelan balance sheet remeasurements. In the fourth quarter of 2014, the company recorded a charge for remeasuring the local currency balance sheet in Venezuela at the SICAD II exchange rate. In the first quarter of 2015, following the Venezuelan government's elimination of the SICAD II exchange rate, the company recorded a charge for remeasuring the local currency balance sheet in Venezuela at the new SIMADI floating exchange rate.
  • Pension settlement charges. In 2015, the company started to offer a lump-sum pension benefit payout option for certain plan participants. In addition, Kimberly-Clark purchased group annuity contracts that transferred to two insurance companies the pension benefit obligations for certain Kimberly-Clark retirees. As a result, the company recognized pension settlement charges in 2015, mostly in the second quarter.
  • Uncertain tax positions. In the fourth quarter of 2015, the company recognized a charge, related to prior years, as a result of an updated assessment of uncertain tax positions for certain international operations.
  • 2014 Organization Restructuring. See previous discussion in this news release.
  • Turkey restructuring. In the third quarter of 2015, the company initiated actions to restructure its business in Turkey, including the closing of a manufacturing facility. The company incurred after tax charges in the third and fourth quarters of 2015 for this restructuring. The company acquired the remaining 49.9 percent interest in its subsidiary in Turkey in conjunction with the acquisition of the remaining 49.9 percent interest in its subsidiary in Israel in the first quarter of 2015.
  • Regulatory dispute in the Middle East. In the first quarter of 2014, the company recorded a non-deductible charge as a result of an adverse court ruling regarding the treatment of capital contributions in prior years to an affiliate in the Middle East. In the fourth quarter of 2014, the company recorded a modest amount of income as a result of an updated assessment of the liability related to the dispute.
  • Western and Central Europe strategic changes and related restructuring charges. In October 2012, the company initiated strategic changes and a related restructuring in its Western and Central European businesses. The restructuring was completed at the end of 2014.

In addition, this press release includes information regarding organic sales, which exclude the impact of changes in foreign currency rates.

The company provides these non-GAAP financial measures as supplemental information to our GAAP financial measures. Management and the company's Board of Directors use adjusted earnings, adjusted earnings per share and adjusted gross and operating profit to (a) evaluate the company's historical and prospective financial performance and its performance relative to its competitors, (b) allocate resources and (c) measure the operational performance of the company's business units and their managers. Management also believes that the use of an adjusted effective tax rate provides improved insight into the tax effects of our ongoing business operations.

Additionally, the Management Development and Compensation Committee of the company's Board of Directors has used certain of the non-GAAP financial measures when setting and assessing achievement of incentive compensation goals. These goals are based, in part, on the company's adjusted earnings per share and improvement in the company's adjusted return on invested capital and adjusted operating profit return on sales determined by excluding certain of the charges that are used in calculating these non-GAAP financial measures.

Conference Call

A conference call to discuss this news release and other matters of interest to investors and analysts will be held at 9 a.m. (CST) today. The conference call will be simultaneously broadcast over the World Wide Web. Stockholders and others are invited to listen to the live broadcast or a playback, which can be accessed by following the instructions set out in the Investors section of the company's Web site (www.kimberly-clark.com).

About Kimberly-Clark

Kimberly-Clark and its well-known global brands are an indispensable part of life for people in more than 175 countries. Every day, nearly a quarter of the world's population trust K-C brands and the solutions they provide to enhance their health, hygiene and well-being. With brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend, Kimberly-Clark holds No. 1 or No. 2 share positions in 80 countries. To keep up with the latest K-C news and to learn more about the company's 144-year history of innovation, visit www.kimberly-clark.com.

Copies of Kimberly-Clark's Annual Report to Stockholders and its proxy statements and other SEC filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, are made available free of charge on the company's Web site on the same day they are filed with the SEC. To view these filings, visit the Investors section of the company's Web site.

Certain matters contained in this news release concerning the outlook, anticipated financial and operating results, raw material, energy and other input costs, anticipated currency rates and exchange risks, net income from equity companies, sources and uses of cash, the effective tax rate, the anticipated costs, scope, timing and financial and other effects of the 2014 Organization Restructuring, the anticipated cost savings from the company's FORCE program, growth initiatives, contingencies and anticipated transactions of the company constitute forward-looking statements and are based upon management's expectations and beliefs concerning future events impacting the company. There can be no assurance that these future events will occur as anticipated or that the company's results will be as estimated. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to publicly update them. For a description of certain factors, such as currency rates and exchange risks, cost savings and reductions, raw material, energy and other input costs, competition, market demand and economic and political conditions, that could cause the company's future results to differ from those expressed in any such forward-looking statements, see Item 1A of the company's Annual Report on Form 10-K for the year ended December 31, 2014 entitled "Risk Factors."

 

KIMBERLY-CLARK CORPORATION

CONSOLIDATED INCOME STATEMENT

(Millions, except per share amounts)

Three Months Ended December 31

2015

2014

Change

Net Sales

$

4,539

$

4,828

-6.0

%

Cost of products sold

2,913

3,275

-11.1

%

Gross Profit

1,626

1,553

+4.7

%

Marketing, research and general expenses

857

971

-11.7

%

Other (income) and expense, net

139

424

-67.2

%

Operating Profit

630

158

+298.7

%

Interest income

5

5

Interest expense

(76)

(69)

+10.1

%

Income From Continuing Operations Before Income Taxes and Equity Interests

559

94

+494.7

%

Provision for income taxes

(252)

(175)

+44.0

%

Income (Loss) From Continuing Operations Before Equity Interests

307

(81)

N.M.

Share of net income of equity companies

37

33

+12.1

%

Income (Loss) From Continuing Operations

344

(48)

N.M.

Income (loss) from discontinued operations, net of income taxes

(15)

N.M.

Net Income (Loss)

344

(63)

N.M.

Net income attributable to noncontrolling interests in continuing operations

(11)

(20)

-45.0

%

Net Income (Loss) Attributable to Kimberly-Clark Corporation

$

333

$

(83)

N.M.

Per Share Basis

Net Income (Loss) Attributable to Kimberly-Clark Corporation

Basic

Continuing operations

$

0.92

$

(0.18)

N.M.

Discontinued operations

(0.04)

N.M.

Net income (loss)

$

0.92

$

(0.22)

N.M.

Diluted

Continuing operations

$

0.91

$

(0.18)

N.M.

Discontinued operations

(0.04)

N.M.

Net income (loss)

$

0.91

$

(0.22)

N.M.

Cash Dividends Declared

$

0.88

$

0.84

+4.8

%

Common Shares Outstanding

December 31

2015

2014

Outstanding shares as of

360.9

365.3

Average diluted shares for three months ended

364.5

373.0

N.M. – Not Meaningful

Unaudited

 

KIMBERLY-CLARK CORPORATION

CONSOLIDATED INCOME STATEMENT

(Millions, except per share amounts)

Twelve Months Ended December 31

2015

2014

Change

Net Sales

$

18,591

$

19,724

-5.7

%

Cost of products sold

11,967

13,041

-8.2

%

Gross Profit

6,624

6,683

-0.9

%

Marketing, research and general expenses

3,443

3,709

-7.2

%

Other (income) and expense, net

1,568

453

+246.1

%

Operating Profit

1,613

2,521

-36.0

%

Interest income

17

18

-5.6

%

Interest expense

(295)

(284)

+3.9

%

Income From Continuing Operations Before Income Taxes and Equity Interests

1,335

2,255

-40.8

%

Provision for income taxes

(418)

(856)

-51.2

%

Income From Continuing Operations Before Equity Interests

917

1,399

-34.5

%

Share of net income of equity companies

149

146

+2.1

%

Income From Continuing Operations

1,066

1,545

-31.0

%

Income from discontinued operations, net of income taxes

50

N.M.

Net Income

1,066

1,595

-33.2

%

Net income attributable to noncontrolling interests in continuing operations

(53)

(69)

-23.2

%

Net Income Attributable to Kimberly-Clark Corporation

$

1,013

$

1,526

-33.6

%

Per Share Basis

Net Income Attributable to Kimberly-Clark Corporation

Basic

Continuing operations

$

2.78

$

3.94

-29.4

%

Discontinued operations

0.13

N.M.

Net income

$

2.78

$

4.07

-31.7

%

Diluted

Continuing operations

$

2.77

$

3.91

-29.2

%

Discontinued operations

0.13

N.M.

Net income

$

2.77

$

4.04

-31.4

%

Cash Dividends Declared

$

3.52

$

3.36

+4.8

%

Common Shares Outstanding

December 31

2015

2014

Average diluted shares for twelve months ended

366.3

377.4

N.M. – Not Meaningful

2015 Data is Unaudited

 

KIMBERLY-CLARK CORPORATION

NON-GAAP RECONCILIATIONS

(Millions, except per share amounts)

Three Months Ended December 31, 2015

As

Reported

Charges Related to Venezuelan

Operations

Uncertain Tax Positions Adjustment

Charges

for Pension

Settlements

Charges for 2014 Organization Restructuring

Charges for

Turkey Restructuring

As

Adjusted

Non-GAAP

Cost of products sold

$

2,913

$

$

$

$

4

$

6

$

2,903

Gross profit

1,626

(4)

(6)

1,636

Marketing, research and general expenses

857

23

834

Other (income) and expense, net

139

108

8

23

Operating profit

630

(108)

(8)

(27)

(6)

779

Income from continuing operations before income taxes and equity interests

559

(108)

(8)

(27)

(6)

708

Provision for income taxes

(252)

6

(49)

3

5

(217)

Effective tax rate

45.1

%

30.6

%

Net income attributable to Kimberly-Clark Corporation

333

(102)

(49)

(5)

(22)

(6)

517

Diluted earnings per share(a)

0.91

(0.28)

(0.13)

(0.01)

(0.06)

(0.02)

1.42

(a)

"As Adjusted Non-GAAP" does not equal "As Reported" plus "Charges" as a result of rounding.

Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measures, and they should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP.  There are limitations to these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies due to potential differences in methods of calculation and items being excluded.  The company compensates for these limitations by using these non-GAAP financial measures as a supplement to the GAAP measures and by providing reconciliations of the non-GAAP and comparable GAAP financial measures.

Unaudited

 

KIMBERLY-CLARK CORPORATION

NON-GAAP RECONCILIATIONS

(Millions, except per share amounts)

Three Months Ended December 31, 2014

As

Reported

Charges for

European

Strategic

Changes

Charges Related to

Health Care

Spin-off

Regulatory Dispute in Middle East

Charges for 2014 Organization Restructuring

Charges Related to Venezuelan

Operations

As

Adjusted

Non-GAAP

Cost of products sold

$

3,275

$

2

$

$

$

40

$

41

$

3,192

Gross profit

1,553

(2)

(40)

(41)

1,636

Marketing, research and general expenses

971

18

93

860

Other (income) and expense, net

424

(4)

421

7

Operating profit

158

(20)

4

(133)

(462)

769

Income from continuing operations before income taxes and equity interests

94

(20)

4

(133)

(462)

705

Provision for income taxes

(175)

2

38

(215)

Effective tax rate

186.2

%

30.5

%

Income (loss) from continuing operations

(48)

(18)

4

(95)

(462)

523

Net income attributable to noncontrolling interests in continuing operations

(20)

(2)

(18)

Income (loss) from continuing operations attributable to Kimberly-Clark Corporation

(68)

(18)

2

(95)

(462)

505

Diluted earnings (loss) per share from continuing operations

(0.18)

(0.05)

0.01

(0.25)

(1.24)

1.35

Income (loss) from discontinued operations, net of income taxes

(15)

(44)

29

Diluted earnings (loss) per share from discontinued operations

(0.04)

(0.12)

0.08

Net income (loss) attributable to Kimberly-Clark Corporation

(83)

(18)

(44)

2

(95)

(462)

534

Diluted earnings (loss) per share

(0.22)

(0.05)

(0.12)

0.01

(0.25)

(1.24)

1.43

Unaudited

 

KIMBERLY-CLARK CORPORATION

NON-GAAP RECONCILIATIONS

(Millions, except per share amounts)

Twelve Months Ended December 31, 2015

As

Reported

Charges Related to Venezuelan

Operations

Uncertain Tax Positions Adjustment

Charges

for Pension

Settlements

Charges for 2014 Organization Restructuring

Charges for Turkey Restructuring

As

Adjusted

Non-GAAP

Cost of products sold

$

11,967

$

5

$

$

$

23

$

22

$

11,917

Gross profit

6,624

(5)

(23)

(22)

6,674

Marketing, research and general expenses

3,443

40

1

3,402

Other (income) and expense, net

1,568

148

1,358

62

Operating profit

1,613

(153)

(1,358)

(63)

(23)

3,210

Income from continuing operations before income taxes and equity interests

1,335

(153)

(1,358)

(63)

(23)

2,932

Provision for income taxes

(418)

6

(49)

523

21

(919)

Effective tax rate

31.3

%

31.3

%

Net income attributable to Kimberly-Clark Corporation

1,013

(147)

(49)

(835)

(42)

(23)

2,109

Diluted earnings per share(a)

2.77

(0.40)

(0.13)

(2.28)

(0.11)

(0.06)

5.76

(a) 

"As Adjusted Non-GAAP" does not equal "As Reported" plus "Charges" as a result of rounding.

Unaudited

 

KIMBERLY-CLARK CORPORATION

NON-GAAP RECONCILIATIONS

(Millions, except per share amounts)

Twelve Months Ended December 31, 2014

As

Reported

Charges for

European

Strategic

Changes

Charges Related to

Health Care

Spin-off

Charge Related to Regulatory Dispute in Middle East

Charges for 2014 Organization Restructuring

Charges Related to Venezuelan

Operations

As

Adjusted

Non-GAAP

Cost of products sold

$

13,041

$

11

$

$

$

40

$

41

$

12,949

Gross profit

6,683

(11)

(40)

(41)

6,775

Marketing, research and general expenses

3,709

22

93

3,594

Other (income) and expense, net

453

35

421

(3)

Operating profit

2,521

(33)

(35)

(133)

(462)

3,184

Income from continuing operations before income taxes and equity interests

2,255

(33)

(35)

(133)

(462)

2,918

Provision for income taxes

(856)

3

38

(897)

Effective tax rate

38.0

%

30.7

%

Income from continuing operations

1,545

(30)

(35)

(95)

(462)

2,167

Net income attributable to noncontrolling interests in continuing operations

(69)

18

(87)

Income from continuing operations attributable to Kimberly-Clark Corporation

1,476

(30)

(17)

(95)

(462)

2,080

Diluted earnings per share from continuing operations

3.91

(0.08)

(0.05)

(0.25)

(1.22)

5.51

Income from discontinued operations, net of income taxes

50

(138)

188

Diluted earnings per share from discontinued operations

0.13

(0.37)

0.50

Net income attributable to Kimberly-Clark Corporation

1,526

(30)

(138)

(17)

(95)

(462)

2,268

Diluted earnings per share

4.04

(0.08)

(0.37)

(0.05)

(0.25)

(1.22)

6.01

Unaudited

 

KIMBERLY-CLARK CORPORATION

CONSOLIDATED BALANCE SHEET

(Millions)

December 31

2015

2014

ASSETS

Current Assets

Cash and cash equivalents

$

619

$

789

Accounts receivable, net

2,281

2,223

Inventories

1,909

1,892

Other current assets

617

655

Total Current Assets

5,426

5,559

Property, Plant and Equipment, Net

7,104

7,359

Investments in Equity Companies

247

257

Goodwill

1,446

1,628

Other Assets

619

723

TOTAL ASSETS

$

14,842

$

15,526

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Debt payable within one year

$

1,669

$

1,326

Trade accounts payable

2,612

2,616

Accrued expenses

1,750

1,974

Dividends payable

318

310

Total Current Liabilities

6,349

6,226

Long-Term Debt

6,106

5,630

Noncurrent Employee Benefits

1,137

1,693

Deferred Income Taxes

766

587

Other Liabilities

380

319

Redeemable Preferred Securities of Subsidiaries

64

72

Stockholders' Equity (Deficit)

Kimberly-Clark Corporation

(174)

729

Noncontrolling Interests

214

270

Total Stockholders' Equity

40

999

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

14,842

$

15,526

2015 Data is Unaudited

 

KIMBERLY-CLARK CORPORATION

CONSOLIDATED CASH FLOW STATEMENT

(Millions)

Three Months Ended December 31

Twelve Months Ended December 31

2015

2014

2015

2014

Operating Activities

Net income (loss)

$

344

$

(63)

$

1,066

$

1,595

Depreciation and amortization

181

207

746

862

Asset impairments

2

22

42

Stock-based compensation

7

1

75

52

Deferred income taxes

123

6

(255)

63

Net (gains) losses on asset dispositions

12

32

17

21

Equity companies' earnings (in excess of) less than dividends paid

28

55

(10)

28

(Increase) decrease in operating working capital

(129)

(113)

(445)

(176)

Postretirement benefits

(11)

17

930

(102)

Charges related to Venezuelan Operations

108

462

153

462

Other

(14)

7

(2)

Cash Provided by Operations

665

590

2,306

2,845

Investing Activities

Capital spending

(258)

(309)

(1,056)

(1,039)

Proceeds from dispositions of property

1

2

27

38

Proceeds from sales of investments

31

127

Investments in time deposits

(46)

(28)

(146)

(151)

Maturities of time deposits

64

48

164

239

Other

12

11

(39)

16

Cash Used for Investing

(227)

(245)

(1,050)

(770)

Financing Activities

Cash dividends paid

(320)

(314)

(1,272)

(1,256)

Change in short-term debt

412

568

303

721

Debt proceeds

3

636

1,100

1,257

Debt repayments

(204)

(14)

(553)

(123)

Redemption of redeemable preferred securities of subsidiary

(500)

(500)

Cash paid on redeemable preferred securities of subsidiaries

(2)

(12)

(3)

(34)

Proceeds from exercise of stock options

38

29

140

127

Acquisitions of common stock for the treasury

(358)

(817)

(861)

(1,939)

Cash transferred to Halyard Health, Inc. related to spin-off

(120)

(120)

Shares purchased from noncontrolling interest

(151)

Other

(8)

(26)

(1)

(26)

Cash Used for Financing

(439)

(570)

(1,298)

(1,893)

Effect of Exchange Rate Changes on Cash and Cash Equivalents

(23)

(417)

(128)

(447)

Increase (Decrease) in Cash and Cash Equivalents

(24)

(642)

(170)

(265)

Cash and Cash Equivalents - Beginning of Period

643

1,431

789

1,054

Cash and Cash Equivalents - End of Period

$

619

$

789

$

619

$

789

Unaudited

 

KIMBERLY-CLARK CORPORATION

SELECTED BUSINESS SEGMENT DATA

(Millions)

Three Months Ended December 31

Twelve Months Ended December 31

2015

2014

Change

2015

2014

Change

NET SALES

Personal Care

$

2,233

$

2,336

-4.4

%

$

9,204

$

9,635

-4.5

%

Consumer Tissue

1,520

1,621

-6.2

%

6,121

6,645

-7.9

%

K-C Professional

776

857

-9.5

%

3,219

3,388

-5.0

%

Corporate & Other

10

14

N.M.

47

56

N.M.

TOTAL NET SALES

$

4,539

$

4,828

-6.0

%

$

18,591

$

19,724

-5.7

%

OPERATING PROFIT

Personal Care

$

473

$

410

+15.4

%

$

1,885

$

1,803

+4.5

%

Consumer Tissue

262

280

-6.4

%

1,073

1,062

+1.0

%

K-C Professional

157

151

+4.0

%

590

604

-2.3

%

Corporate & Other(a)

(123)

(259)

N.M.

(367)

(495)

N.M.

Other (income) and expense, net(a)

139

424

-67.2

%

1,568

453

+246.1

%

TOTAL OPERATING PROFIT

$

630

$

158

+298.7

%

$

1,613

$

2,521

-36.0

%

(a)

Segment Operating Profit excludes other (income) and expense, net and expenses not associated with the business segments, including charges as indicated in the Non-GAAP Reconciliations.

N.M. – Not Meaningful

Unaudited

 

KIMBERLY-CLARK CORPORATION

SELECTED BUSINESS SEGMENT DATA

PERCENTAGE CHANGE IN NET SALES VERSUS PRIOR YEAR

Three Months Ended December 31, 2015

Total

 

Volume

Net

Price

Mix/

Other(a)

Currency

Personal Care

(4.4)

6

1

1

(12)

Consumer Tissue

(6.2)

4

(1)

(9)

K-C Professional

(9.5)

(2)

2

(9)

TOTAL CONSOLIDATED

(6.0)

4

1

(11)

 

Twelve Months Ended December 31, 2015

Total

 

Volume

Net

Price

Mix/

Other(a)

Currency

Personal Care

(4.5)

5

1

1

(11)

Consumer Tissue

(7.9)

3

(1)

(1)

(9)

K-C Professional

(5.0)

2

2

(9)

TOTAL CONSOLIDATED

(5.7)

4

(10)

(a) 

Mix/Other includes rounding.

Unaudited

 

KIMBERLY-CLARK CORPORATION

OUTLOOK FOR 2016

Estimated Range

ESTIMATED FULL YEAR 2016 DILUTED EARNINGS PER SHARE

Adjusted earnings per share

$

5.95

-

$

6.15

Adjustment for charges related to the 2014 Organization Restructuring

(0.06)

-

(0.03)

Per share basis – diluted net income attributable to Kimberly-Clark Corporation

$

5.89

-

$

6.12

 

[KMB-F]

Logo - http://photos.prnewswire.com/prnh/20110928/DA76879LOGO

 

SOURCE Kimberly-Clark Corporation



RELATED LINKS

http://www.kimberly-clark.com