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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, 2000
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:
Title of each class Name of each exchange on which registered
- --------------------------------- -----------------------------------------
Common Stock - $1.25 Par Value New York Stock Exchange
Preferred Stock Purchase Rights Chicago Stock Exchange
Pacific 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 16, 2001, 533,036,154 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 $36 billion.
(Continued)
FACING SHEET
(CONTINUED)
DOCUMENTS INCORPORATED BY REFERENCE
Kimberly-Clark Corporation's 2000 Annual Report to Stockholders and 2001 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
2000 Annual Report to Stockholders and 2001 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
- ---------------------------------- ----------------------------------
2000 Annual Report to Stockholders PART I
(Year ended December 31, 2000) ITEM 1. Business
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 7A. Quantitative and
Qualitative Disclosures About
Market Risk
ITEM 8. Financial Statements and
Supplementary Data
PART IV
ITEM 14. Exhibits, Financial
Statement Schedules and Reports
on Form 8-K
2001 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
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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 15 to the Consolidated Financial Statements contained in
the 2000 Annual Report to Stockholders, are incorporated in this Item 1 by
reference.
RECENT DEVELOPMENTS. Historically, the Corporation has been engaged in a wide
variety of diversified businesses, including the manufacture and sale of
consumer products, paper and forest products, airline services and various
other businesses. In recent years, the Corporation has made the transition to
a global consumer products company based on the strategy of building its
tissue, personal care and health care businesses. Since 1992, the Corporation
has completed about 35 acquisitions in its core businesses and approximately
20 strategic divestitures, including the following transactions:
- - On December 12, 1995, Scott Paper Company ("Scott") became a
wholly-owned subsidiary of Kimberly-Clark upon completion of a merger
transaction in which the outstanding Scott common shares were converted into
shares of Kimberly-Clark common stock. The transaction was valued at
approximately $9.4 billion and accounted for as a pooling of interests. On
February 14, 1996, Scott changed its name to Kimberly-Clark Tissue Company
("KCTC").
- - 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.
Department of Justice as part of the Scott merger.
- - On July 1, 1996, the Corporation purchased a 51 percent ownership
interest in a personal care products joint venture, Kenko de Brasil.
- - 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 March 27, 1997, the Corporation sold its Coosa Pines, Alabama pulp
and newsprint operations, and related woodlands ("Coosa"), to Alliance Forest
Products Inc., a publicly-held Canadian corporation, for approximately $600
million in cash.
- - On June 6, 1997, the Corporation sold its 50.1 percent interest in Scott
Paper Limited, a publicly-traded Canadian company to Kruger, Inc., a Canadian
paper and forest products company, for approximately $127 million.
- - On December 18, 1997, the Corporation acquired Tecnol Medical Products,
Inc. ("Tecnol"), a leading maker of disposable face masks and patient care
products, in a merger transaction which involved the conversion of all
outstanding shares of Tecnol common stock into shares of Kimberly-Clark
common stock. The transaction was valued at approximately $428 million
and was accounted for as a purchase.
PART I
(Continued)
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ITEM 1. BUSINESS (Continued)
- - On May 28, 1998, the Corporation purchased a 50 percent equity interest
in Klabin Tissue S.A. (now known as Klabin Kimberly S.A.), the leading
tissue manufacturer in Brazil.
- - On July 21, 1998, the Corporation purchased an additional 10 percent
ownership interest in its Korean affiliate, YuHan-Kimberly, Limited,
increasing its ownership interest to 70 percent.
- - On August 19, 1998, the Corporation sold the outstanding shares of K-C
Aviation Inc., a leading provider of business aviation services, to
Gulfstream Aerospace Corporation for $250 million in cash.
- - On June 10, 1999, the Corporation purchased the European consumer and
away-from-home tissue businesses of Attisholz Holding AG for approximately
$365 million. The acquired businesses are located in Germany, Switzerland
and Austria.
- - On September 23, 1999, the Corporation acquired Ballard Medical
Products, a leading maker of disposable medical devices for respiratory care,
gastroenterology and cardiology, at a cost of approximately $788 million,
including the value of common stock exchanged and other costs of the
transaction. This acquisition was accounted for as a purchase.
- - On September 30, 1999, the Corporation completed the sale of
approximately 460,000 acres of timberland in Alabama, Mississippi
and Tennessee.
- - On February 8, 2000, the Corporation acquired Safeskin Corporation
("Safeskin"), a leading maker of disposable gloves for health care,
high-technology and scientific industries, in a merger transaction pursuant
to which Safeskin shareholders received .1956 of a share of the
Corporation's common stock for each share of Safeskin common stock.
The transaction was valued at approximately $750 million and was accounted
for as a purchase.
- - On July 5, 2000, the Corporation acquired majority shares of privately
held S-K Corporation of Taiwan, which holds trademark and distribution
rights in Taiwan for the Corporation's global brands including Kleenex,
Huggies and Kotex. Prior to the acquisition, the Corporation owned
approximately 3 percent of S-K Corporation.
- - On December 20, 2000, the Corporation purchased an additional 33.3
percent ownership interest in its Taiwanese affiliate, Taiwan Scott Paper
Corporation, increasing its ownership interest to 100 percent.
- - On January 31, 2001, the Corporation acquired Linostar S.p.A., a leading
Italian-based diaper manufacturer that produces and markets Lines, Italy's
second largest diaper brand.
In the fourth quarter of 1995, in connection with the Scott merger, the
Corporation announced a plan to restructure the combined operations and to
accomplish other business improvement objectives (the "1995 Plan"). The
original estimated pretax cost of the 1995 Plan was $1,440 million and it was
completed in 1998 at a pretax cost of $1,305 million.
On November 21, 1997, the Corporation announced a restructuring plan (the
"1997 Plan"). The plan, among other things, resulted in the sale, closure or
downsizing of 16 manufacturing facilities worldwide and a workforce reduction
of approximately 3,740 employees. Costs for the 1997 Plan of $250.8 million
and $414.2 million were recorded in 1998 and 1997, respectively, at the time
costs became accruable
PART I
(Continued)
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ITEM 1. BUSINESS (Continued)
under appropriate accounting principles. Included in such costs was
accelerated depreciation charged to cost of products sold related to assets that
were to be disposed of but which continued to be operated during 1997 and 1998.
In 1999, the Corporation recorded a net credit of $16.7 million, which was
composed of accelerated depreciation expense of $23.7 million, reductions
in accrued costs of $31.9 million and lower asset write-offs and higher sales
proceeds totaling $8.5 million, due to changes in estimates.
In the fourth quarter of 1998, the Corporation announced a facilities
consolidation plan (the "1998 Plan") to, among other things, further align
tissue manufacturing capacity with demand in Europe, close a diaper
manufacturing facility in Canada, shut down and dispose of a tissue machine in
Thailand, write down certain excess feminine care production equipment in
North America and reduce the Corporation's workforce by approximately 830
employees. Costs for the 1998 Plan of $18.2 million, $42.6 million and $49.1
million were recorded in 2000, 1999 and 1998, respectively, and charged to
cost of products sold. The year 2000 costs are composed primarily of certain
severance costs and charges for accelerated depreciation for the Corporation's
Larkfield, U.K. tissue manufacturing facility that remained in use until it
was shutdown in October 2000.
Pursuant to the 1998 Plan, through December 31, 2000, 814 employees were
notified of the Corporation's plans to terminate their employment, and the
costs of this workforce reduction were charged to earnings in the period in
which such employee severance benefits were appropriately communicated.
The 1997 Plan and the 1998 Plan were completed as of December 31, 2000.
DESCRIPTION OF THE CORPORATION. The Corporation is principally engaged in the
manufacturing and marketing throughout the world of a wide range of consumer
products. The Corporation also produces premium business correspondence and
technical papers. Most of these products are made from natural and synthetic
fibers using advanced technologies in fibers, nonwovens and absorbency.
The Corporation is organized into three global business segments: Tissue;
Personal Care; and Health Care and Other.
The Tissue segment includes facial and bathroom tissue, paper towels, wipers
and napkins for household and away-from-home use; wet wipes; printing, premium
business and correspondence papers; and related products. Products in this
business segment are sold under the Kleenex, Scott, Kimberly-Clark, Kleenex
Cottonelle, Kleenex Viva, Huggies, Kimwipes, WypAll, Surpass and other brand
names. In January 2001, the Corporation announced the launch of Cottonelle
Fresh rollwipes, a dispersible pre-moistened wipe on a roll, which will be
available Summer 2001.
The Personal Care segment includes disposable diapers, training and youth
pants and swimpants; feminine and incontinence care products; and related
products. Products in this business segment are primarily for household use
and are sold under a variety of well-known brand names, including Huggies,
Pull-Ups, Little Swimmers, GoodNites, Kotex, Lightdays, Depend, Poise and
other brand names.
The Health Care and Other segment includes health care products, consisting of
surgical gowns, drapes, exam gloves, infection control products, sterilization
wraps, disposable face masks, respiratory products and other disposable
medical products; specialty and technical papers; and other products.
Products in this segment are sold under the Kimberly-Clark, Safeskin, Tecnol,
Ballard, and other brand names.
PART I
(Continued)
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ITEM 1. BUSINESS (Continued)
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. 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. Paper products
are sold directly to users, converters, manufacturers, publishers and
printers, and through paper merchants, brokers, sales agents and other
resale agencies. Health care products are sold to distributors, converters
and end-users.
PATENTS AND TRADEMARKS. The Corporation owns various patents and trademarks
registered domestically and in many foreign countries. The Corporation
considers the patents and trademarks which it owns and the trademarks under
which it sells certain of its products 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 2000
Annual Report to Stockholders and is incorporated herein by reference.
RAW MATERIALS. Superabsorbent materials are important components in
disposable diapers, training and youth pants and incontinence care products.
Polypropylene and other synthetics and chemicals are the primary raw materials
for manufacturing nonwoven fabrics, which are used in disposable diapers,
training and youth pants, wet wipes, feminine pads, incontinence and health
care products, and away-from-home wipers.
Cellulose fiber, in the form of kraft pulp or recycled fiber, is the primary
raw material for the Corporation's tissue and paper products and is an
important component in disposable diapers, training pants, feminine pads and
incontinence care products.
Most recovered paper and all synthetics are purchased from third parties.
Pulp and recycled fiber 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. See "Factors That May Affect
Future Results - Raw Materials."
The Corporation owns or controls approximately 5.7 million acres of forestland
in Canada, principally as a fiber source for pulp production, which is
consumed internally within the tissue business. Approximately 1.0 million
acres in the province of Nova Scotia are owned by the Corporation, and
approximately 4.7 million acres, principally in the province of Ontario, are
held under long-term Crown rights or leases.
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
tissue products, and nonwoven materials. Consolidated research and
development expense was $277.4 million in 2000, $249.8 million in 1999, and
$224.8 million in 1998.
ENVIRONMENTAL MATTERS. Total worldwide capital expenditures for voluntary
environmental controls or controls necessary to comply with legal
requirements relating to the protection of the environment at the
Corporation's facilities are expected to be approximately $78 million in 2001
and $35 million in 2002. Of
PART I
(Continued)
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ITEM 1. BUSINESS (Continued)
these amounts, approximately $18 million in 2001, and $9 million in 2002 are
expected to be spent at facilities in the U.S. Approximately $.4 million of such
expenditures in 2001 relate to compliance with the U.S. Environmental
Protection Agency's ("EPA") Cluster Rule for sulfite pulping operations at the
Corporation's Everett, Washington pulp mill. The remainder of the expected
expenditures in the U.S. will be applied at various other production
facilities of the Corporation for other environmental control system
improvements. For facilities outside of the U.S., capital expenditures for
environmental controls are expected to be $60 million in 2001 and $26 million
in 2002.
Total worldwide operating expenses for environmental compliance are expected
to be approximately $184 million in 2001 and $189 million in 2002. U.S.
operating expenses are expected to be approximately $98 million in 2001 and
$100 million in 2002. Operating expenses for facilities outside the U.S. are
expected to be approximately $86 million in 2001 and $89 million in 2002.
Operating expenses include pollution control equipment operation and
maintenance costs, governmental payments, and research and engineering costs.
Total environmental capital expenditures and operating expenses are not
expected to have a material effect on the Corporation's total capital and
operating expenditures, consolidated earnings or competitive position.
However, current environmental spending estimates could be modified as a
result of changes in the Corporation's plans, changes in legal requirements or
other factors.
In connection with certain divestitures, including those described in "Recent
Developments," the Corporation has agreed to indemnify the purchasers of
certain divested businesses against certain environmental liabilities.
Generally, these indemnification obligations apply only to environmental
liabilities which are actually incurred by the purchaser within a specified
time period after closing and are limited to a specified dollar amount of
coverage. The Corporation has established appropriate accrued liabilities
with respect thereto, and does not otherwise consider these obligations to be
material.
EMPLOYEES. In its worldwide consolidated operations, the Corporation had
66,300 employees as of December 31, 2000.
Approximately 22 percent of the Corporation's United States workforce and
approximately 25 percent of the Corporation's non-United States workforce are
represented by unions. In the U.S., the largest concentration of union
membership is with the Paper, Allied-Industrial, Chemical & Energy Workers
International Union (PACE). Other employees are represented by the
International Brotherhood of Electrical Workers (IBEW), the International
Association of Machinists and Aerospace Workers (IAM), the Association of
Western Pulp and Paper Workers (AWPPW), and various independent unions. The
Corporation's collective bargaining agreements typically have a term of 5 to 6
years and provide for wage and fringe benefit increases during the term. The
agreements have staggered termination dates.
Throughout the Corporation, management seeks to establish and maintain an open
and respectful relationship with its employees. Management believes that
communications should flow freely in the organization to provide all employees
the opportunity to maximize the use of their talents in the attainment of the
Corporation's business objectives.
INSURANCE. The Corporation maintains coverage consistent with industry
practice for most risks that are incident to its operations.
PART I
(Continued)
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ITEM 1. BUSINESS (Continued)
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, among other things, the
business outlook, anticipated financial and operating results, strategies,
contingencies and contemplated transactions of the Corporation 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 SEC 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 widely advertised,
well-known, branded products, as well as 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, the
effects of recent consolidations of retailers and distribution channels, 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 or improved products as a means of achieving and/or
maintaining category leadership. In order to maintain its competitive
position, the Corporation must develop technology to support its products.
COST SAVING STRATEGY. A significant portion of the Corporation's anticipated
cost savings are expected to result from operating efficiencies. There can be
no assurance that such cost savings and efficiencies will be achieved.
RAW MATERIALS. Cellulose fiber, in the form of kraft pulp or recycled fiber,
is used extensively in the Corporation's tissue and paper products and is
subject to significant price fluctuations due to the cyclical nature of the
pulp markets. Recycled fiber accounts for approximately 25 percent of the
Corporation's overall fiber requirements. On a worldwide basis, the
Corporation has reduced its internal supply of pulp to approximately 40
percent of its virgin fiber requirements.
The Corporation still intends to reduce its level of pulp integration, when
market conditions permit, to approximately 25 percent, and such a reduction in
pulp integration, if accomplished, could increase the Corporation's commodity
price risk. Specifically, increases in pulp prices could adversely affect the
Corporation's earnings if selling prices for its finished products are not
adjusted or if such adjustments significantly trail the increases in pulp
prices. Derivative instruments have not been used to manage these risks.
PART I
(Continued)
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ITEM 1. BUSINESS (Continued)
ENERGY COSTS. The Corporation's manufacturing operations utilize electricity,
natural gas and petroleum-based fuels. To insure that it uses all forms of
energy cost-effectively, the Corporation maintains ongoing energy efficiency
improvement programs at all of its manufacturing sites and also provides
expert staff assistance to operating units in negotiating favorable utility
and other energy supply agreements. The Corporation's contracts with energy
suppliers vary as to price, payment terms, quantities and duration.
Kimberly-Clark's energy costs are also affected by various market factors
including the availability of supplies of particular forms of energy, energy
prices and local and national regulatory decisions. There can be no assurance
that the Corporation will be fully protected against substantial changes in
the price or availability of energy sources, especially in light of recent
instability in energy markets. See also Item 3. Legal Proceedings for
discussion of Mobile Energy Services Company, LLC.
ACQUISITION STRATEGY. The Corporation's anticipated financial results and
business outlook are dependent in part upon the availability of suitable
acquisition candidates. 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.
Furthermore, there can be no assurance that any such acquired business can or
will be successfully integrated with the Corporation's businesses in order to
provide anticipated synergies and 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), anticipating changes in
technology 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 occur as estimated.
FOREIGN MARKET RISKS. Because the Corporation and its equity companies have
manufacturing facilities in 41 countries and their products are sold in more
than 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. The extremely competitive
situation in European personal care and tissue markets, and the challenging
economic environments in Mexico and developing countries in eastern Europe,
Asia and Latin America, may slow the Corporation's sales growth and earnings
potential. In addition, the Corporation is subject to the strengthening and
weakening of various currencies against each other and local currencies versus
the U.S. dollar. Transaction exposure, arising from transactions and
commitments denominated in non-local currency, is selectively hedged (through
foreign currency forward, swap and option contracts). See "Management's
Discussion and Analysis - Market Risk Sensitivity and Inflation Risks",
contained in the 2000 Annual Report to Stockholders, which is incorporated
herein by reference. Translation exposure for the Corporation with respect to
foreign operations is generally not hedged. There can be no assurance that
the Corporation will be fully protected against substantial foreign currency
fluctuations.
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."
PART I
(Continued)
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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 generally operate at or
near capacity, except in certain instances such as when new products or
technology are being introduced or when mills are being shut down. Certain
facilities of the Corporation 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
Mobile - tissue products
ARIZONA
Tucson - health care products
ARKANSAS
Conway - feminine care, incontinence care and nonwovens
Maumelle - wet wipes and nonwovens
CALIFORNIA
Escondido - printing inks
Fullerton - tissue products
San Diego - health care products
CONNECTICUT
New Milford - diapers and tissue products
GEORGIA
LaGrange - nonwovens
IDAHO
Pocatello - respiratory care and gastroenterology products
KENTUCKY
Owensboro - tissue products
MICHIGAN
Munising - technical papers
MISSISSIPPI
Corinth - nonwovens, wipers and towels
Hattiesburg - tissue products
PART I
(Continued)
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ITEM 2. PROPERTIES (Continued)
NORTH CAROLINA
Hendersonville - nonwovens
Lexington - nonwovens
OHIO
Piqua - printing inks
OKLAHOMA
Jenks - tissue products
PENNSYLVANIA
Chester - tissue products
SOUTH CAROLINA
Beech Island - diapers and tissue products
TENNESSEE
Loudon - tissue products
TEXAS
Del Rio - health care products
Fort Worth - health care products
Paris - diapers, training and youth pants
San Antonio - personal cleansing products and systems
UTAH
Draper - respiratory care and gastroenterology products
Ogden - diapers
VERMONT
East Ryegate - technical papers
WASHINGTON
Everett - tissue products and pulp
WISCONSIN
Marinette - tissue products
Neenah - diapers, training and youth pants, feminine care, incontinence
care, business and correspondence papers and nonwovens
Whiting - business and correspondence papers
OUTSIDE THE UNITED STATES
ARGENTINA
*Bernal - tissue products
Pilar - feminine care and incontinence care
San Luis - diapers
AUSTRALIA
*Albury - nonwovens
*Ingleburn - diapers
*Lonsdale - diapers, incontinence care and feminine care
*Millicent - pulp and tissue products
*Tantanoola - pulp
*Warwick Farm - tissue products
BAHRAIN
*East Riffa - tissue products
* Equity company production facility
PART I
(Continued)
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ITEM 2. PROPERTIES (Continued)
BELGIUM
Duffel - tissue products
BOLIVIA
La Paz - tissue products
Santa Cruz - diapers, feminine care and tissue products
BRAZIL
*Bahia - tissue products
Barueri - wet wipes
*Correia Pinto - tissue products
*Cruzeiro - tissue products
*Mogi das Cruzes - tissue products
Porto Alegre - feminine care
*Sao Paulo - tissue products
Suzano - diapers, incontinence care
CANADA
Huntsville, Ontario - tissue products and wipers
New Glasgow, Nova Scotia - pulp
St. Hyacinthe, Quebec - feminine care
Terrace Bay, Ontario - pulp
CHILE
Colina - tissue products
Santiago - diapers, feminine care
CHINA
Beijing - feminine care and diapers
Chengdu - feminine care
Guangzhou - tissue products
Handan - feminine care
Nanjing - feminine care
Shanghai - tissue products
Shenyang - feminine care
Wuhan - feminine care
COLOMBIA
Barbosa - tissue products, business, notebooks and correspondence papers
Guarne - tissue products
Pereira - tissue products, feminine care, incontinence care and diapers
Tocancipa - diapers
*Villa Rica - diapers and incontinence care
COSTA RICA
Belen - tissue products
Cartago - diapers and feminine care
CZECH REPUBLIC
Jaromer - diapers and incontinence care
Litovel - feminine care
DOMINICAN REPUBLIC
Santo Domingo - tissue products
* Equity company production facility
PART I
(Continued)
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ITEM 2. PROPERTIES (Continued)
ECUADOR
Babahoyo - tissue products
Mapasingue - tissue products, diapers and feminine care
EL SALVADOR
Sitio del Nino - tissue products
FRANCE
Rouen - tissue products
Villey-Saint-Etienne - tissue products
GERMANY
Forchheim - feminine care and incontinence care
Koblenz - tissue products
Mainz - tissue products
Reisholz - tissue products
GUATEMALA
Poza Verde - tissue products
HONDURAS
Villanueva - health care products
INDIA
*Pune - feminine care and diapers
INDONESIA
Jakarta - tissue products
*Medan - specialty papers
ISRAEL
Afula - diapers, feminine care and incontinence care
Hadera - tissue products
ITALY
Alanno - tissue products
Romagnano - tissue products
Villanovetta - tissue products
JAPAN
Shinga - soap
KOREA
Anyang - feminine care, diapers and tissue products
Kimcheon - tissue products and nonwovens
Taejon - feminine care and diapers
MALAYSIA
Kluang - tissue products, feminine care and diapers
* Equity company production facility
PART I
(Continued)
- -------------------------------------------------------------------------------
ITEM 2. PROPERTIES (Continued)
MEXICO
Acuna - health care products
*Bajio - tissue products, fine papers and notebooks
*Cuautitlan - feminine care, diapers and nonwovens
*Ecatepec - tissue products
Empalme - health care products
Magdalena - health care products
*Morelia - tissue products, pulp and fine papers
*Naucalpan - tissue products, diapers and feminine care
Nogales - health care products
*Orizaba - tissue products, fine papers and pulp
*Ramos Arizpe - tissue products and diapers
*San Rafael - tissue products and fine papers
*Texmelucan - tissue products
Tijuana - printing inks
*Tlaxcala - diapers
PERU
Puente Piedra - tissue products
Santa Clara - tissue products
Villa Chorrillos - diapers, feminine care and incontinence care
PHILIPPINES
San Pedro, Laguna - feminine care, diapers, tissue products and specialty
papers
SAUDI ARABIA
*Al-Khobar - diapers, feminine care and tissue products
SLOVAK REPUBLIC
Piestany - health care products
SOUTH AFRICA
Cape Town - tissue products, feminine care and incontinence care
Springs - tissue products and diapers
SPAIN
Aranguren - tissue products
Arceniega - tissue products, personal cleansing products and systems
Calatayud - diapers
Telde, Canary Islands - tissue products
Salamanca - tissue products
SWITZERLAND
Balsthal - tissue products and specialty papers
Niederbipp - tissue products
Reichenburg - tissue products
TAIWAN
Chung Li - tissue products, feminine care and diapers
Hsin-Ying - tissue products
Neihu - feminine care, diapers
Ta-Yuan - tissue products
* Equity company production facility
PART I
(Continued)
- -------------------------------------------------------------------------------
ITEM 2. PROPERTIES (Continued)
THAILAND
Hat Yai - disposable gloves
Pathumthani - feminine care, diapers and tissue products
Samut Prakarn - tissue products
TURKEY
Istanbul - diapers
UNITED KINGDOM
Barrow - tissue products
Barton-upon-Humber - diapers
Flint - tissue products and nonwovens
Northfleet - tissue products
VENEZUELA
Maracay - tissue products and diapers
VIETNAM
Binh Duong - feminine care
Hanoi - feminine care
PART I
(Continued)
- -------------------------------------------------------------------------------
ITEM 3. LEGAL PROCEEDINGS
The following is a brief description of certain legal and administrative
proceedings to which the Corporation or its subsidiaries is a party or to
which the Corporation's or its subsidiaries' properties are subject:
On May 13, 1997, the State of Florida, acting through its attorney general,
filed a complaint in the Gainesville Division of the United States District
Court for the Northern District of Florida alleging that manufacturers of
tissue products for away-from-home use, including the Corporation and Scott,
agreed to fix prices by coordinating price increases for such products.
Following Florida's complaint, similar actions by the States of Maryland, New
York and West Virginia, as well as approximately 45 class action complaints,
were filed in various federal and state courts around the United States.
The actions by the States of Florida, Maryland, New York and West Virginia,
the private plaintiffs in Minnesota and the federal private class action
plaintiffs were dismissed with prejudice pursuant to settlements with
defendants. A settlement was reached in the California class action
litigation and was preliminarily approved by the judge in December 2000. With
respect to the only remaining litigation, filed in Tennessee on behalf of a
purported class of indirect purchasers of commercial products, the Corporation
has answered the complaint and has denied the allegations contained therein as
well as any liability.
On February 8, 2000, the Corporation completed the acquisition of Safeskin.
Approximately 300 product liability lawsuits seeking monetary damages, in most
cases of an unspecified amount, were pending in federal and state courts
against Safeskin. Safeskin is typically one of several defendants who
manufacture or sell natural rubber latex gloves. These lawsuits allege
injuries ranging from dermatitis to severe allergic reactions caused by the
residual chemicals or latex proteins in gloves worn by health care workers and
other individuals while performing their duties. Safeskin has referred the
defense of these lawsuits to its insurance carriers.
Since March 11, 1999, numerous lawsuits (collectively the "Securities
Actions") have been filed in the U.S. District Court for the Southern District
of California against Safeskin and certain of its officers and directors
alleging violations of Sections 10(b) and 20(a) of the Securities and Exchange
Act of 1934, and Rule 10b-5 promulgated thereunder. The Securities Actions
were brought by plaintiffs in their individual capacities and on behalf of a
purported class of persons who purchased or otherwise acquired Safeskin
publicly traded securities during various periods occurring prior to the
Corporation's acquisition of Safeskin. The suits allege that plaintiffs
purchased Safeskin securities at prices artificially inflated by defendants'
misrepresentations and omissions concerning Safeskin's financial condition and
prospects and seek an unspecified amount of damages. Defendants' motion to
dismiss was denied and discovery is proceeding.
In addition, a shareholder derivative action has been filed against certain of
Safeskin's directors, and Safeskin as a nominal defendant, in the Supreme
Court of the State of California, San Diego County (the "Derivative Action").
The Derivative Action alleges breach of fiduciary duty, waste of corporate
assets and gross negligence in connection with Safeskin's stock repurchase
program and seeks an unspecified amount of damages. The court has stayed
discovery in the Derivative Action so that it can be coordinated with
discovery in the Securities Actions. Safeskin has referred the defense of the
Derivative Action and the Securities Actions to its insurance carriers.
PART I
(Continued)
- -------------------------------------------------------------------------------
ITEM 3. LEGAL PROCEEDINGS (Continued)
On April 14, 2000, a complaint was filed by Anne Meader and others against
KCTC and others in the State of Maine Superior Court. Nineteen plaintiffs
seek compensation for injuries allegedly caused by exposure to substances
emitted by the defendants' mills, including two former KCTC mills, and from
the Central Maine Disposal Landfill in Fairfield, Maine.
The Corporation intends to contest the foregoing claims vigorously and, in
management's opinion, they are not, individually or in the aggregate, expected
to have a material adverse effect on the Corporation's business, financial
condition or results of operations.
In connection with the Mobile pulp mill closure, on May 5, 1998, the
Corporation gave notice to Mobile Energy Services Company, L.L.C. ("MESC") of
its intent to terminate a long-term energy services contract. On January 14,
1999, MESC and related parties (the "Debtors") filed for Chapter 11 bankruptcy
protection and instituted an action in the United States Bankruptcy Court in
Mobile, Alabama against KCTC claiming unspecified damages in connection with
the pulp mill closure. The Debtors, as debtors-in-possession, own a
cogeneration complex that provides energy services to KCTC's Mobile facility.
The complaint alleges that: (i) the sale of the cogeneration complex by KCTC
to MESC in December 1994 was a fraudulent transfer; (ii) KCTC cannot effect a
pulp mill closure while it continues to operate the wastewater treatment
facility and "produce pulp" at the Mobile facility; (iii) Kimberly-Clark's
announced pulp mill closure was a repudiation of the site operating
agreements; (iv) KCTC breached the master operating agreement by failing to
give MESC reasonable assistance in developing new business opportunities for
the energy complex after Kimberly-Clark announced the pulp mill closure; (v)
KCTC failed to allow the sale of the Mobile pulp mill; and (vii) K-C's
announcement of the pulp mill closure in May 1998 was a fraudulent transfer.
The complaint does not specify the amount of damages demanded.
On December 31, 1999, a joint motion ("the Motion") was filed with the U.S.
Bankruptcy Court ("the Court") seeking approval of a settlement agreement
and compromise of claims and pending litigation against KCTC arising from the
closure of the pulp mill and termination of the energy services contract.
Under the proposed settlement agreement, KCTC agreed to pay MESC at closing
approximately $30 million, subject to certain adjustments. The Court granted
the Motion on January 24, 2000. Closing of the settlement would be subject
to, among other conditions, the Debtors filing a plan of reorganization from
bankruptcy and the ultimate approval of that plan by the Court. The
approximate $30 million payment, which will be accrued when the conditions for
settlement are met, is in addition to $24.3 million previously accrued by the
Corporation. In addition, the proposed settlement provides, among other
things, an agreement by MESC to provide energy to the Corporation's Mobile
tissue mill at market rates.
In August 2000, the Debtors filed a plan of reorganization with the Court that
would implement the settlement agreement. During the fourth quarter of 2000,
several crucial elements of the Debtors' plan became no longer viable. As a
result, the Debtors have sought and received from the Court and the
Corporation several extensions of deadlines contained in the settlement
agreement.
Because of uncertainty involving the Debtors' business prospects, the
Corporation has developed contingency plans seeking to minimize disruption to
its Mobile operations in the event that MESC is unable or unwilling to supply
energy to the Mobile tissue mill. In the absence of the settlement agreement,
the litigation and arbitration proceedings between the Corporation and Debtors
could resume. The outcome of the MESC litigation, arbitration and settlement
is not expected to have a material adverse effect on the Corporation's
business, financial condition or results of operations.
PART I
(Continued)
- -------------------------------------------------------------------------------
ITEM 3. LEGAL PROCEEDINGS (Continued)
The Corporation 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, financial condition or results of
operations.
Environmental Matters
- ----------------------
The Corporation is subject to federal, state and local environmental
protection laws and regulations with respect to its business operations and is
operating in compliance with, or taking action aimed at ensuring compliance
with, such laws and regulations. Compliance with these laws and regulations
is not expected to have a material adverse effect on the Corporation's
business, financial condition or results of operations.
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, financial condition 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 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.
B. In January 1998, the Corporation was notified by the Tennessee
Department of Environment and Conservation of its status as a
potentially liable party at the Bellevue Avenue Landfill in Shelby
County, Tennessee.
PART I
(Continued)
- -------------------------------------------------------------------------------
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,
2001, together with certain biographical information, are as follows:
ROBERT E. ABERNATHY, 46, was elected Group President effective January 1,
1997. He is responsible for the global health care business, nonwovens
manufacturing and research, the technical paper business and corporate
research and development. 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, 54, 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. Mr. Donehower is a director of Eastman Chemical Co.
and Factory Mutual Insurance Company.
O. GEORGE EVERBACH, 62, 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, 42, has served as President and Chief Operating Officer of the
Corporation since his election on November 16, 1999. He previously had been
elected Group President - Global Tissue, Pulp and Paper in 1998, where he was
responsible for the Corporation's global tissue businesses. He also was
responsible for the Wet Wipes and Neenah Paper sectors, Pulp Operations and
Consumer Business Services, Environment and Energy and Human Resources
organizations. Mr. Falk joined the Corporation in 1983 and has held other
senior management positions in the Corporation. Mr. Falk is a member of the
University of Wisconsin - Madison School of Business Dean's Advisory Board.
He has been a director of the Corporation since 1999.
WAYNE R. SANDERS, 53, has served as Chief Executive Officer of the Corporation
since 1991 and Chairman of the Board of the Corporation since 1992. He
previously had been elected President and Chief Operating Officer in 1990.
Employed by the Corporation since 1975, Mr. Sanders also has held various
other senior management positions in the Corporation. Mr. Sanders is a
director of Adolph Coors Company, Coors Brewing Company and Texas Instruments
Incorporated. He also is a member of the Marquette University Board of
Trustees and is Chairman of the Southwest Region, and a member of the Board of
Governors, of the Boys and Girls Clubs of America. He has been a director of
the Corporation since 1989.
PART I
(Continued)
- -------------------------------------------------------------------------------
EXECUTIVE OFFICERS OF THE REGISTRANT (Continued)
KATHI P. SEIFERT, 51, was elected Executive Vice President in November 1999.
She is responsible for the Infant Care, Child Care, Feminine Care, and Adult
Care business sectors, the Safety and Quality Assurance team and the U.S. and
Canadian Sales organizations, and leads a team responsible for the
Corporation's global personal care businesses. 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 Care business sectors. She was appointed President - Feminine Care
Sector in 1991, was elected Group President - Feminine and Adult Care in 1994,
elected Group President - North American Consumer Products in January 1995,
elected Group President - North American Personal Care Products in July 1995
and elected Group President - Global Personal Care Products in April 1998.
Ms. Seifert is a member of the Board of Directors of Eli Lilly and Company,
Aid Association for Lutherans and Fox Cities Performing Arts Center.
PART II
- -------------------------------------------------------------------------------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The dividend and market price data included in Note 13 to the Consolidated
Financial Statements, and the information set forth under the captions
"Dividends and Dividend Reinvestment Plan" and "Stock Exchanges" contained in
the 2000 Annual Report to Stockholders are incorporated in this Item 5 by
reference.
As of March 16, 2001, the Corporation had 48,090 holders of record of its common
stock.
PART II
(Continued)
- -------------------------------------------------------------------------------
ITEM 6. SELECTED FINANCIAL DATA
Year Ended December 31
(Millions of dollars, -----------------------------------------------------
except per share amounts) 1996 1997 1998 1999 2000
- -----------------------------------------------------------------------------------------------
Net Sales. . . . . . . . . . . . . . . $13,149.1 $12,546.6 $12,297.8 $13,006.8 $13,982.0
Gross Profit . . . . . . . . . . . . . 4,688.5 4,607.6 4,597.6 5,325.2 5,753.5
Operating Profit . . . . . . . . . . . 1,666.0 1,486.1 1,697.7 2,435.4 2,633.8
Share of Net Income of
Equity Companies . . . . . . . . . . 152.4 157.3 137.1 189.6 186.4
Income from Continuing
Operations Before
Extraordinary Items and
Cumulative Effect of
Accounting Change. . . . . . . . . . 1,035.4 985.4 1,114.3 1,668.1 1,800.6
Per Share Basis:
Basic. . . . . . . . . . . . . . . 1.84 1.77 2.02 3.11 3.34
Diluted. . . . . . . . . . . . . . 1.83 1.76 2.01 3.09 3.31
Net Income . . . . . . . . . . . . . . 1,035.4 1,002.9 1,103.1 1,668.1 1,800.6
Per Share Basis:
Basic. . . . . . . . . . . . . . . 1.84 1.80 2.00 3.11 3.34
Diluted. . . . . . . . . . . . . . 1.83 1.79 1.99 3.09 3.31
Cash Dividends Per Share
Declared . . . . . . . . . . . . . . .92 .96 1.00 1.04 1.08
Paid . . . . . . . . . . . . . . . . .92 .95 .99 1.03 1.07
Total Assets . . . . . . . . . . . . . $11,820.4 $11,417.1 $11,687.8 $12,815.5 $14,479.8
Long-Term Debt . . . . . . . . . . . . 1,738.6 1,803.9 2,068.2 1,926.6 2,000.6
Stockholders' Equity . . . . . . . . . 4,595.0 4,340.3 4,031.5 5,093.1 5,767.3
NOTES TO SELECTED FINANCIAL DATA
(1) Included in the selected financial data for 1996 are the following items:
Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
------------------------------------------------------------------------------------
Charges for business improvement and other
programs . . . . . . . . . . . . . . . . . . $154.2 $429.9 $328.6
Gains on asset disposals . . . . . . . . . . . - (93.6) (72.6)
Change in value of Mexican peso. . . . . . . . - - 2.3
Restructuring of Mexican operations. . . . . . - - 5.5
------ ------- -------
Total. . . . . . . . . . . . . . . . . . . . $154.2 $336.3 $263.8 $.46
====== ======= ======= ====
PART II
ITEM 6. SELECTED FINANCIAL DATA (Continued)
- -------------------------------------------------------------------------------
NOTES TO SELECTED FINANCIAL DATA
(2) Included in the selected financial data for 1997 are the following items:
Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
------------------------------------------------------------------------------------
Charges for business improvement and other
programs . . . . . . . . . . . . . . . . . . $128.8 $478.3 $366.3
Gain on asset disposal . . . . . . . . . . . . - (26.5) (16.8)
Gain on sale of K-C de Mexico's Regio business - - (16.3)
Extraordinary gains, net of income taxes . . . - - (17.5)
------ ------- -------
Total. . . . . . . . . . . . . . . . . . . . $128.8 $451.8 $315.7 $.57
====== ======= ======= ====
(3) Included in the selected financial data for 1998 are the following items:
Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
------------------------------------------------------------------------------------
Charges for business improvement and other
programs . . . . . . . . . . . . . . . . . . $191.6 $ 377.8 $276.8
Mobile pulp mill fees and related severance. . 42.3 42.3 25.9
Gain on asset disposal . . . . . . . . . . . . - (140.0) (78.3)
Change in value of Mexican peso. . . . . . . . - - 9.2
Cumulative effect of accounting change, net of
income taxes . . . . . . . . . . . . . . . . - - 11.2
------ ------- -------
Total. . . . . . . . . . . . . . . . . . . . $233.9 $ 280.1 $244.8 $.45
====== ======= ====== ====
(4) Included in the selected financial data for 1999 are the following items:
Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
------------------------------------------------------------------------------------
Charges for business improvement and other
programs. . . . . . . . . . . . . . . . . $ 69.0 $ 47.8 $ 35.6
Business integration and other costs. . . . 11.2 22.6 14.5
Mobile pulp mill fees and related severance 9.0 9.0 5.6
Gains on asset disposals. . . . . . . . . . - (176.7) (112.3)
------ ------- -------
Total . . . . . . . . . . . . . . . . . . $ 89.2 $ (97.3) $ (56.6) $(.11)
====== ======= ======= =====
PART II
ITEM 6. SELECTED FINANCIAL DATA (Continued)
- -------------------------------------------------------------------------------
NOTES TO SELECTED FINANCIAL DATA
(5) Included in the selected financial data for 2000 are the following items:
Diluted
Gross Operating Net Net Income
(Millions of dollars, except per share amounts) Profit Profit Income per Share
------------------------------------------------------------------------------------
Charges for business improvement and other
programs . . . . . . . . . . . . . . . . . . . $ 20.2 $ 24.4 $ 16.4
Business integration and other costs . . . . . . 10.1 35.1 23.0
Patent settlement and accrued liability reversal - (75.8) (46.5)
Litigation settlements . . . . . . . . . . . . . - 15.2 9.3
------ ------ ------
Total. . . . . . . . . . . . . . . . . . . . . $ 30.3 $ (1.1) $ 2.2 $.01
====== ====== ====== ====
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 2000 Annual Report to Stockholders is incorporated
in this Item 7 by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information set forth under the caption "Management's Discussion and
Analysis - Market Risk Sensitivity and Inflation Risks" contained in the 2000
Annual Report to Stockholders is incorporated in this Item 7A by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Corporation and its consolidated
subsidiaries and the independent auditors' report thereon contained in the
2000 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 2001 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 2001 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 2001 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 2001 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, 2000 and 1999, and the
related Consolidated Statements of Income, Stockholders' Equity and Cash Flow
for the years ended December 31, 2000, 1999 and 1998, 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 2000 Annual Report to Stockholders.
In addition, a related report of Deloitte & Touche LLP is 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 2000 Annual
Report to Stockholders.
Independent Auditors' Report
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 June 12, 1997,
incorporated by reference to Exhibit (3)(a) of the Corporation's Annual Report
on Form 10-K for the year ended December 31, 1999.
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. 333-17367).
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 and
restated as of January 1, 1998, incorporated by reference to Exhibit No. (10)a
of the Corporation's Annual Report on Form 10-K for the year ended December
31, 1997.
Exhibit No. (10)b. Executive Severance Plan, as amended and restated as of
June 8, 2000.
Exhibit No. (10)c. Fourth Amended and Restated Deferred Compensation Plan for
Directors, incorporated by reference to Exhibit No. (10)c of the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1996.
PART IV
(Continued)
- -------------------------------------------------------------------------------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(Continued)
Exhibit No. (10)d. 1986 Equity Participation Plan, as amended effective
November 20, 1997, incorporated by reference to Exhibit No. (10)d of the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1997.
Exhibit No. (10)e. 1992 Equity Participation Plan, as amended effective
November 14, 2000.
Exhibit No. (10)f. Deferred Compensation Plan, as amended effective November
14, 2000.
Exhibit No. (10)g. 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)h. Supplemental Benefit Plan to Salaried Employees' Retirement
Plan, amended and restated as of November 17, 1994, incorporated by reference
to Exhibit No. (10)i of the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1996.
Exhibit No. (10)i. Second Supplemental Benefit Plan to Salaried Employees'
Retirement Plan, amended and restated as of November 17, 1994, incorporated by
reference to Exhibit No. (10)j of the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1996.
Exhibit No. (10)j. Retirement Contribution Excess Benefit Program, as amended
and restated as of June 29, 2000.
Exhibit No. (10)k. 1999 Restricted Stock Plan, as amended effective November
14, 2000.
Exhibit No. (10)l. Outside Directors' Stock Option Plan, effective January 1,
2001.
Exhibit No. (12). Computation of ratio of earnings to fixed charges for the
five years ended December 31, 2000.
Exhibit No. (13). Portions of the Corporation's 2000 Annual Report to
Stockholders incorporated by reference in this Form 10-K.
Exhibit No. (21). Subsidiaries of the Corporation.
Exhibit No. (23). Independent Auditors' Consent of Deloitte & Touche LLP.
Exhibit No. (24). Powers of Attorney.
PART IV
(Continued)
- -------------------------------------------------------------------------------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(Continued)
(b) REPORTS ON FORM 8-K
The Corporation filed a Current Report on Form 8-K, dated November 14, 2000,
to report that the Board of Directors of the Corporation authorized the
repurchase of an additional 25 million shares of the Corporation's Common
Stock.
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 23, 2001
By: /s/ John W. Donehower
------------------------
John W. Donehower
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Wayne R. Sanders Chairman of the Board March 23, 2001
- ----------------------- and Chief Executive Officer
Wayne R. Sanders and Director
(principal executive officer)
/s/ John W. Donehower Senior Vice President and March 23, 2001
- ------------------------ Chief Financial Officer
John W. Donehower (principal financial officer)
/s/ Randy J. Vest Vice President and March 23, 2001
- -------------------- Controller
Randy J. Vest (principal accounting officer)
Directors
John F. Bergstrom Claudio X. Gonzalez
Pastora San Juan Cafferty Frank A. McPherson
Paul J. Collins Linda Johnson Rice
Robert W. Decherd Wolfgang R. Schmitt
Thomas J. Falk Marc J. Shapiro
William O. Fifield Randall L. Tobias
By: /s/ O. George Everbach March 23, 2001
-----------------------------------------
O. George Everbach, Attorney-in-Fact
INDEPENDENT AUDITORS' REPORT
- -------------------------------------------------------------------------------
KIMBERLY-CLARK CORPORATION:
We have audited the consolidated financial statements of Kimberly-Clark
Corporation as of December 31, 2000 and 1999, and for each of the three years
in the period ended December 31, 2000, and have issued our report thereon
dated January 23, 2001; such consolidated financial statements and report are
included in your 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. In our opinion, 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 23, 2001
SCHEDULE II Kimberly-Clark Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(Millions of dollars)
ADDITIONS DEDUCTIONS
------------------------ -----------------
BALANCE AT CHARGED TO CHARGED TO WRITE-OFFS BALANCE
BEGINNING COSTS AND OTHER AND AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS(A) RECLASSIFICATIONS PERIOD
- ------------------- ---------- ---------- ----------- ----------------- ---------
DECEMBER 31, 2000
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts . . . . . . . . $50.9 $ 12.7 $3.9 $ 14.3 (b) $53.2
Allowances for sales
discounts. . . . . . . . 20.7 203.7 (.4) 204.1 (c) 19.9
DECEMBER 31, 1999
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts . . . . . . . . $51.5 $ 13.9 $6.8 $ 21.3 (b) $50.9
Allowances for sales
discounts. . . . . . . . 15.8 176.2 (.4) 170.9 (c) 20.7
DECEMBER 31, 1998
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts . . . . . . . . $37.8 $ 21.5 $3.1 $ 10.9 (b) $51.5
Allowances for sales
discounts. . . . . . . . 22.1 182.5 .2 189.0 (c) 15.8
(a) Includes bad debt recoveries and the effects of changes in foreign
currency exchange rates. Also includes the beginning balances resulting
from acquisitions made during the year and from the consolidation of
Hogla-Kimberly Limited, the Corporation's Israeli affiliate, and
Colombiana Kimberly Colpapel S.A., its Colombian affiliate, in 2000
and 1999, respectively.
(b) Primarily uncollectible receivables written off.
(c) Sales discounts allowed.
SCHEDULE II Kimberly-Clark Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(Millions of dollars)
ADDITIONS DEDUCTIONS
------------------------ -----------------
BALANCE AT CHARGED TO CHARGED TO WRITE-OFFS BALANCE
BEGINNING COSTS AND OTHER AND AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS RECLASSIFICATIONS PERIOD
- ------------------- ---------- ---------- ----------- ----------------- ---------
1998 AND 1997 PLANS
DECEMBER 31, 1999
Contra assets deducted from
assets to which they apply
Inventory . . . . . . . . $10.9 $(.3) $- $10.6 $ -
Other Assets. . . . . . . .5 (.5) $- - -
DECEMBER 31, 1998
Contra assets deducted from
assets to which they apply
Inventory . . . . . . . . $23.8 $4.1 $- $17.0 $10.9
Other Assets. . . . . . . 12.1 .2 $- 11.8 .5
SCHEDULE II Kimberly-Clark Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEAR ENDED DECEMBER 31, 1998
(Millions of dollars)
ADDITIONS DEDUCTIONS
------------------------ -----------------
BALANCE AT CHARGED TO CHARGED TO WRITE-OFFS BALANCE
BEGINNING COSTS AND OTHER AND AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS RECLASSIFICATIONS PERIOD
- ------------------- ---------- ---------- ----------- ----------------- ---------
1995 PLAN
DECEMBER 31, 1998
Contra assets deducted from
assets to which they apply
Inventory . . . . . . . . $.6 $- $- $.6 $-
SCHEDULE II Kimberly-Clark Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(Millions of dollars)
ADDITIONS
------------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS AND OTHER AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
- ------------------- ---------- ---------- ----------- ----------------- ---------
DECEMBER 31, 2000
Deferred Taxes
Valuation Allowance . . . . . . $279.0 $(102.6) $- $17.6 $158.8
DECEMBER 31, 1999
Deferred Taxes
Valuation Allowance . . . . . . $285.6 $ 34.9 $- $41.5 $279.0
DECEMBER 31, 1998
Deferred Taxes
Valuation Allowance . . . . . . $209.0 $ 71.1 $- $(5.5) $285.6
(a) Includes the net currency effects of translating valuation allowances
at current rates under SFAS No. 52 of $(17.8) million in 2000, $(39.4)
million in 1999 and $15.6 million in 1998. Included in this column are
expired income tax loss carryforwards of $15.8 million in 1998. These
items offset deferred tax assets resulting in no effect on the
consolidated balance sheet.
INDEX TO DOCUMENTS FILED AS PART OF THIS REPORT.
________________________________________________________________
DESCRIPTION
-----------
Consolidated financial statements, incorporated by reference
Independent Auditors' Report, incorporated by reference
Independent Auditors' Report
Schedule for Kimberly-Clark Corporation and Subsidiaries:
Schedule II Valuation and Qualifying Accounts
Exhibit No. (3)a. Restated Certificate of Incorporation, dated June 12, 1997,
incorporated by reference to Exhibit (3)(a) of the Corporation's Annual Report
on Form 10-K for the year ended December 31, 1999.
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. 333-17367).
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 and
restated as of January 1, 1998, incorporated by reference to Exhibit No. (10)a
of the Corporation's Annual Report on Form 10-K for the year ended December
31, 1997.
Exhibit No. (10)b. Executive Severance Plan, as amended and restated as of
June 8, 2000.
Exhibit No. (10)c. Fourth Amended and Restated Deferred Compensation Plan for
Directors, incorporated by reference to Exhibit No. (10)c of the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1996.
Exhibit No. (10)d. 1986 Equity Participation Plan, as amended effective
November 20, 1997, incorporated by reference to Exhibit No. (10)d of the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1997.
Exhibit No. (10)e. 1992 Equity Participation Plan, as amended effective
November 14, 2000.
Exhibit No. (10)f. Deferred Compensation Plan, as amended effective November
14, 2000.
Exhibit No. (10)g. 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)h. Supplemental Benefit Plan to Salaried Employees' Retirement
Plan, amended and restated as of November 17, 1994, incorporated by reference
to Exhibit No. (10)i of the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1996.
Exhibit No. (10)i. Second Supplemental Benefit Plan to Salaried Employees'
Retirement Plan, amended and restated as of November 17, 1994, incorporated by
reference to Exhibit No. (10)j of the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1996.
Exhibit No. (10)j. Retirement Contribution Excess Benefit Program, as amended
and restated as of June 29, 2000.
Exhibit No. (10)k. 1999 Restricted Stock Plan, as amended effective November
14, 2000.
Exhibit No. (10)l. Outside Directors' Stock Option Plan, effective January 1,
2001.
Exhibit No. (12). Computation of ratio of earnings to fixed charges for the
five years ended December 31, 2000.
Exhibit No. (13). Portions of the Corporation's 2000 Annual Report to
Stockholders incorporated by reference in this Form 10-K.
Exhibit No. (21). Subsidiaries of the Corporation.
Exhibit No. (23). Independent Auditors' Consent of Deloitte & Touche LLP.
Exhibit No. (24). Powers of Attorney.