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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
--------------- ---------------
Commission file number 1-225
KIMBERLY-CLARK CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 39-0394230
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. BOX 619100, DALLAS, TEXAS 75261-9100
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 281-1200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- --------------------------------------------- -------------------------
Common Stock - $1.25 Par Value; Preferred Share New York Stock Exchange
Purchase Rights Chicago Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X . No
--------- -------.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of March 19, 1996, 283,009,657, shares of common stock were outstanding, and
the aggregate market value of the registrant's common stock held by non-
affiliates on such date (based on the closing stock price on the New York
Stock Exchange) was approximately $22,180 million.
DOCUMENTS INCORPORATED BY REFERENCE
Kimberly-Clark Corporation's 1995 Annual Report to Stockholders and 1996
Proxy Statement contain much of the information required in this Form 10-K,
and portions of those documents are incorporated by reference herein from the
applicable sections thereof. The following table identifies the sections of
this Form 10-K which incorporate by reference portions of the Corporation's
1995 Annual Report to Stockholders and 1996 Proxy Statement. The Items of
this Form 10-K, where applicable, specify which portions of such documents
are incorporated by reference. The portions of such documents that are not
incorporated by reference shall not be deemed to be filed with the Commission
as part of this Form 10-K.
DOCUMENT OF WHICH PORTIONS ITEMS OF THIS FORM 10-K
ARE INCORPORATED BY REFERENCE IN WHICH INCORPORATED
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1995 Annual Report to Stockholders PART I
(Year ended December 31, 1995) ITEM 1. Business
ITEM 3. Legal Proceedings
PART II
ITEM 5. Market for the Registrant's
Common Stock and Related Stockholder
Matters
ITEM 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations
ITEM 8. Financial Statements and
Supplementary Data
PART IV
ITEM 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K
1996 Proxy Statement PART III
ITEM 10. Directors and Executive
Officers of the Registrant
ITEM 11. Executive Compensation
ITEM 12. Security Ownership of
Certain Beneficial Owners and
Management
ITEM 13. Certain Relationships and
Related Transactions
PART I
ITEM 1. BUSINESS
Kimberly-Clark Corporation was incorporated in Delaware in 1928. As used in
Items 1, 2 and 7 of this Form 10-K, the term "Corporation" refers to Kimberly-
Clark Corporation and its consolidated subsidiaries. In the remainder of this
Form 10-K, the terms "Kimberly-Clark" or "Corporation" refer to Kimberly-Clark
Corporation.
On December 12, 1995, Scott Paper Company, a Pennsylvania corporation
(`Scott''), became a wholly-owned subsidiary of Kimberly-Clark upon
consummation of the merger (the `Merger'') contemplated by the Agreement and
Plan of Merger dated as of July 16, 1995 (the `Merger Agreement'') among
Kimberly-Clark, Rifle Merger Co., a wholly-owned subsidiary of Kimberly-
Clark, and Scott. Pursuant to the Merger Agreement, each Scott common share,
without par value, outstanding immediately prior to the Effective Time (as
defined in the Merger Agreement) of the Merger (other than shares owned
directly or indirectly by Kimberly-Clark or Scott, which shares were canceled)
was converted into .78 of a share of common stock, $1.25 par value, of
Kimberly-Clark (`Kimberly-Clark Common Stock''), including the corresponding
percentage of a right to purchase shares of Series A Junior Participating
Preferred Stock, without par value, of Kimberly-Clark. On February 14, 1996,
Scott changed its name to Kimberly-Clark Tissue Company.
On November 30, 1995, Kimberly-Clark distributed to its stockholders all of
the outstanding shares of common stock of Schweitzer-Mauduit International,
Inc. (`SMI''). SMI was formed in 1995 to facilitate the spin-off of
Kimberly-Clark's tobacco-related paper and other specialty paper products
businesses conducted in the United States, France and Canada.
On September 27, 1995, the Corporation sold 80 percent of the outstanding
shares of Midwest Express Holdings, Inc., the parent company of Midwest
Express Airlines, Inc. and Astral Aviation, Inc., in an initial public
offering.
Financial information by business segment and geographic area, and information
about principal products and markets of the Corporation, contained under the
caption "Management's Discussion and Analysis" and in Note 17 to the Financial
Statements contained in the 1995 Annual Report to Stockholders, are
incorporated in this Item 1 by reference.
DESCRIPTION OF THE CORPORATION. The Corporation is principally engaged in the
manufacturing and marketing throughout the world of a wide range of products
for personal, business and industrial uses. Most of these products are made
from natural and synthetic fibers using advanced technologies in absorbency,
fibers and nonwovens.
The Corporation's products and services are divided into three business
segments: Personal Care Products, Tissue-Based Products and Newsprint, Paper
and Other.
Personal Care Products include disposable diapers, training and youth pants;
feminine and adult incontinence care products; wet wipes; health care
products; and related products. Products in this class are sold under a
variety of well-known brand names, including Huggies, Pull-Ups, GoodNites,
Kotex, New Freedom, Lightdays, Depend and Poise.
Tissue-Based Products include facial and bathroom tissue, paper towels and
wipers for household and away-from-home use; pulp; and related products.
Products in this class are sold under the recognized brand names Kleenex,
Scott, Cottonelle, Viva, Kimwipes and Wypall.
Products for home use are sold directly and through wholesalers to
supermarkets, mass merchandisers, drugstores, warehouse clubs, home health
care stores, variety stores, department stores and other retail outlets.
Health care products are sold to distributors, converters and end-users.
Products for away-from-home use are sold through distributors and directly to
manufacturing, lodging, office building, food service and health care
establishments and other high volume public facilities.
Newsprint, Paper and Other includes newsprint, printing papers, premium
business and correspondence papers, specialty papers, technical papers, and
related products; and other products and services.
Newsprint and groundwood printing papers are sold directly to newspaper pub-
lishers and commercial printers. Other papers and specialty products in this
class are sold directly to users, converters, manufacturers, publishers and
printers, and through paper merchants, brokers, sales agents and other resale
agencies.
PATENTS AND TRADEMARKS. The Corporation owns various patents and trademarks
registered domestically and in certain foreign countries. The Corporation
considers the patents and trademarks which it owns and the
trademarks under which it sells certain of its products, in each instance and
in the aggregate, to be material to its business. Consequently, the
Corporation seeks patent and trademark protection by all available means,
including registration. A partial list of the Corporation's trademarks is
included under the caption "Trademarks" contained in the 1995 Annual Report to
Stockholders and is incorporated herein by reference.
EMPLOYEES. In its worldwide consolidated operations, the Corporation had
55,341 employees as of December 31, 1995.
RAW MATERIALS. Cellulose fibers in the form of wood pulp are the primary raw
materials for the Corporation's paper and tissue products and are important
components in disposable diapers, training pants, feminine pads and
incontinence care products. Large amounts of secondary and recycled fibers
are also consumed, primarily in tissue products. Superabsorbent materials are
important components in disposable diapers, training pants and incontinence
care products. Polypropylene and other synthetics are primary raw materials
for manufacturing nonwoven fabrics which are used in disposable diapers,
training pants, feminine pads, incontinence and health care products and away-
from-home wipers. Most secondary fibers and all synthetics are purchased.
Wood pulp and nonwood cellulose fibers are produced by the Corporation and
purchased from others. The Corporation considers the supply of such raw
materials to be adequate to meet the needs of its businesses.
For its worldwide consolidated operations, production at the Corporation's
pulp mills at Coosa Pines and Mobile, Alabama; Everett, Washington; Terrace
Bay, Ontario; Pictou, Nova Scotia; and Miranda, Spain totaled about 80 percent
of the Corporation's 1995 virgin fiber requirements for products other than
newsprint. The Corporation's newsprint mill at Coosa Pines produces all of its
own fiber requirements, of which virgin fiber represented approximately 73
percent in 1995.
The Corporation owns or controls 6.9 million acres of forestland in North
America, principally as a fiber source for pulp production which is consumed
internally within the tissue and personal care businesses. In the United
States, approximately .9 million acres are owned in Alabama and Mississippi.
In Canada, 1.0 million acres in the province of Nova Scotia are owned by the
Corporation, and 5.0 million acres, principally in the province of Ontario,
are held under long-term Crown rights or leases.
Certain states have adopted laws and entered into agreements with publishers
requiring newspapers sold in such states to contain specified amounts of
recycled paper. The Corporation provides certain newspaper publishers with
newsprint containing specified amounts of recycled paper.
COMPETITION. The Corporation competes in numerous domestic and foreign
markets. The number of competitors and the Corporation's competitive
positions in these markets vary. In general, in the sale of its products, the
Corporation faces strong competition from other manufacturers, some of which
are larger and more diversified than the Corporation. The Corporation has
several major competitors in its disposable diaper and training pants,
household and other tissue-based products, and feminine and incontinence care
products businesses.
Depending on the characteristics of the market involved, the Corporation com-
petes on the basis of product quality and performance, price, service, packa-
ging, distribution, advertising and promotion.
RESEARCH AND DEVELOPMENT. A major portion of total research and development
expenditures is directed toward new or improved personal care, health care and
household products, and nonwoven materials. Consolidated research and
development expenditures were $207.2 million in 1995, $208.8 million in 1994
and $208.7 million in 1993.
ENVIRONMENTAL MATTERS. Capital expenditures for environmental controls to
meet legal requirements and otherwise relating to the protection of the
environment at the Corporation's facilities in the United States are estimated
to be $46.7 million in 1996 and $135.2 million in 1997. Such expenditures are
not expected to have a material effect on the Corporation's total capital
expenditures, consolidated earnings or competitive position; however, these
estimates could be modified as a result of changes in the Corporation's plans,
changes in legal requirements or other factors.
Capital expenditures at the Corporation's U.S. facilities for 1998, 1999 and
2000 are expected to be affected by finalization of the U.S. Environmental
Protection Agency's (`EPA'') proposed Cluster Rules. If finalized as
proposed, these rules would require significant additional expenditures for
environmental controls at the Corporation's Coosa Pines and Mobile, Alabama,
and Everett, Washington, pulp mills and at various other tissue and paper
production facilities in the United States. Based on currently available
information, total capital expenditures required to meet the Cluster Rule
requirements over the three-year period following their planned finalization
in late 1996 or early 1997 are estimated at between $275 million and $395
million. However, the nature, amount and timing of these expenditures could
change significantly based on the provisions of EPA's final rules. Neither
the Cluster Rule expenditures nor other anticipated environmental capital
spending at the Corporation's U.S. facilities during this time period are
expected to have a material adverse effect on the Corporation's business or
results of operations.
RISKS FOR FOREIGN OPERATIONS. The Corporation and its equity companies have
manufacturing facilities in
33 countries throughout the world. Consumer products made abroad or in the
U.S. are marketed in approximately 150 countries. Because these countries are
so numerous, it is not feasible to generally characterize the risks involved.
Such risks vary from country to country and include such factors as tariffs,
trade restrictions, changes in currency value, economic conditions and
international relations. See "Management's Discussion and Analysis -- Foreign
Currencies Risks, Hedging Activities and Inflation Risks" contained in the
1995 Annual Report to Stockholders, which is incorporated herein by reference.
INSURANCE. The Corporation maintains coverage consistent with industry
practice for most risks that are incident to its operations.
ITEM 2. PROPERTIES
Management believes that the Corporation's production facilities are suitable
for their purpose and adequate to support its businesses. The extent of
utilization of individual facilities varies, but they operate at or near
capacity, except in certain instances such as when new products or technology
are being introduced. New facilities of the Corporation are under construc-
tion and others are being expanded. Various facilities contain pollution
control, solid waste disposal and other equipment which have been financed
through the issuance of industrial revenue or similar bonds and are held by
the Corporation under lease or installment purchase agreements.
Principal facilities and products made at these facilities are listed on the
following pages. In addition, the principal facilities of the Corporation's
equity companies and the products or groups of products made at such
facilities are included on the following pages.
HEADQUARTERS LOCATIONS
Dallas, Texas
Roswell, Georgia
Neenah, Wisconsin
Reigate, United Kingdom
Bangkok, Thailand
ADMINISTRATIVE CENTER
Knoxville, Tennessee
WORLDWIDE PRODUCTION AND SERVICE FACILITIES
UNITED STATES (1)
ALABAMA
Coosa Pines - pulp and newsprint
Mobile - tissue products and pulp (2)
ARIZONA
Tucson - nonwovens
Mohave - tissue products
ARKANSAS
Conway - feminine care, incontinence care, nonwovens
Maumelle - wet wipes, nonwovens
CALIFORNIA
Fullerton - tissue products
CONNECTICUT
New Milford - diapers, feminine care, tissue products
Shelton - aviation personnel services
DELAWARE
Dover - wet wipes (3)
GEORGIA
LaGrange - nonwovens
KENTUCKY
Owensboro - tissue products
MAINE
Winslow - tissue products (4)
MASSACHUSETTS
Lee - industrial wipers (5)
Westfield - aircraft maintenance, finishing and refurbishing
MICHIGAN
Munising - printing and base papers
MISSISSIPPI
Corinth - nonwovens, away-from-home wipers and towels
Hattiesburg - tissue products
NEW JERSEY
Montvale - corporate aircraft management services
South Hackensack - corporate aircraft management services
NEW YORK
Fort Edward - tissue products
Islip - corporate aircraft management services
NORTH CAROLINA
Hendersonville - nonwovens
Lexington - nonwovens
OKLAHOMA
Jenks - tissue products
PENNSYLVANIA
Chester - tissue products
SOUTH CAROLINA
Beech Island - diapers, tissue products
TENNESSEE
Loudon - tissue products
TEXAS
Dallas - aircraft maintenance, finishing and refurbishing
Paris - diapers, training and youth pants
San Antonio - personal cleansing products and systems
UTAH
Ogden - diapers
VERMONT
East Ryegate - technical papers
WASHINGTON
Everett - tissue products, pulp
WISCONSIN
Appleton - aircraft maintenance, finishing and refurbishing
Marinette - tissue products
Neenah - diapers, feminine care, incontinence care, business and
correspondence papers, industrial wipers, nonwovens, tissue products
Oconto Falls - tissue products
Whiting - business and correspondence papers
OUTSIDE THE UNITED STATES
ARGENTINA
Cordoba - diapers
Pilar - feminine care, incontinence care
San Luis - diapers
AUSTRALIA
*Albury - nonwovens
*Ingleburn - diapers
*Lonsdale - diapers, incontinence care, feminine care
*Millicent - tissue products
*Tantanoola - pulp
*Warwick Farm - tissue products
* Equity company production facility
BAHRAIN
*East Riffa - tissue products
BELGIUM
Duffel - tissue products
CANADA
Crabtree, Quebec - tissue products
Hull, Quebec - tissue products
Huntsville, Ontario - tissue products, away-from-home wipers
Lennoxville, Quebec - tissue products
New Glasgow, Nova Scotia - pulp
New Westminster, British Columbia - tissue products
Rexdale, Ontario - away from home products, feminine care
St. Catharines, Ontario - tissue products, away-from-home wipers
St. Hyacinthe, Quebec - feminine care, diapers
Terrace Bay, Ontario - pulp
CHINA (6)
Beijing - feminine care
Changchun - feminine care
Chengdu - feminine care
Guangzhou Province - tissue products
Guiyang - feminine care
Handan - feminine care
Harbin - feminine care
Kunming - feminine care
Nanjing - feminine care
Shanghai - tissue products
Shenyang - feminine care
Taiyuan - feminine care
COLOMBIA
*Barbosa - tissue products, specialty products, fine papers
*Guarne - tissue products
*Pereira - tissue products, feminine care, incontinence care, diapers
*Tocancipa - diapers
COSTA RICA
Cartago - diapers
San Jose - tissue products
CZECH REPUBLIC
Litovel - feminine care
EL SALVADOR
Sitio del Nino - tissue products, feminine care
FRANCE
Orleans - tissue products
Rouen - tissue products
Villey-Saint-Etienne - tissue products
GERMANY
Dusseldorf - Reisholz - tissue products
Flensburg - tissue products
Forchheim - feminine care
Koblenz - tissue products
Neunkirchen - wet wipes
* Equity company production facility
HONDURAS
Cortes - nonwovens
San Pedro Sula - tissue products, feminine care
HONG KONG
Hong Kong - tissue products (7)
INDIA
*Pune - feminine care, diapers
Pune - tissue products
INDONESIA
Jog-Jakarta - tissue products
*Medan - specialty products
ITALY
Alanno - tissue products
Romagnano - tissue products
Villanovetta - tissue products
KOREA
Anyang - feminine care, diapers, tissue products
*Jo-Chi-Weon - tissue products
Kimcheon - feminine care, tissue products, nonwovens
Taejon - feminine care, diapers
MALAYSIA
Kluang - tissue products
Petaling Jaya - feminine care, tissue products
MEXICO
*Bajio - tissue products
*Cepamisa - tissue products
*Cuautitlan - feminine care, diapers, nonwovens
*Ecatepec - tissue products
Empalme - nonwovens
Magdalena - nonwovens
*Naucalpan - tissue products, diapers, feminine care
Nogales - nonwovens
*Orizaba - tissue products
*Ramos Arizpe - tissue products, diapers
*San Juan - tissue products
*San Rafael - tissue products, fine papers
Santa Ana - nonwovens
*Tlaxcala - diapers
NETHERLANDS
Gennep - tissue products
Veenendaal - feminine care, incontinence care
PANAMA
Panama City - tissue products, feminine care
PERU
Lima - tissue products, feminine care
PHILIPPINES
San Pedro, Laguna - feminine care, diapers, tissue products, specialty papers
SAUDI ARABIA
*Al-Khobar - diapers, feminine care, tissue products
SINGAPORE
Singapore - feminine care, tissue products
* Equity company production facility.
SOUTH AFRICA
Cape Town - tissue products, feminine care
Springs - tissue products, feminine care, diapers, incontinence care
Wadeville - tissue products, nonwovens
SPAIN
Aranguren - tissue products
Arceniaga - tissue products, personal cleansing products and systems
Canarias, Canary Islands - tissue products
Miranda del Ebro - pulp
Salamanca - tissue products
TAIWAN
Hsin Ying - tissue products (8)
Tayaun - tissue products
THAILAND
Patumthanee - feminine care, diapers, tissue products
Samut Prakan - tissue products
UNITED KINGDOM
Barrow - tissue products
Barton-upon-Humber - diapers, training pants
Flint - tissue products, nonwovens
Larkfield - tissue products
Northfleet - tissue products
Prudhoe - tissue products, away-from-home wipers (3)
Sealand - feminine care
VENEZUELA
Guacara - diapers
(1)The Corporation has announced its intention to sell two of the following
four tissue mills: Badger-Globe, Lakeview and Marinette, Wisconsin; and
Fort Edward, New York. The Badger-Globe and Lakeview facilities are part
of the Neenah, Wisconsin operations.
(2)Portions of the land under this facility are held under various long-term
operating leases, the more significant of which contain options to purchase
the land.
(3) The Corporation has announced its intention to sell this facility.
(4)The fiber recycling facility at this mill is held under an operating lease
expiring in 2008 under which the Corporation has the option of renewing the
lease for terms not exceeding nine additional years or purchasing the
facility for its then fair market value.
(5) In connection with the SMI spin-off, the Corporation continues to own a
paper machine incorporating hydroknit manufacturing technology which is
located at one of the Corporation's former Lee, Massachusetts facilities.
On or before November 30, 2000, the Corporation will remove such technology
and sell the remaining components of the machine to SMI for a nominal
purchase price.
(6)The land on which these facilities are located is held under long-term
leases.
(7) This facility is held under a short-term renewable lease.
(8) The land and a portion of this facility are subject to a mortgage.
ITEM 3. LEGAL PROCEEDINGS
The following is a brief description of potentially material legal proceedings
to which the Corporation or any of its subsidiaries is a party or of which any
of their properties is subject:
Litigation
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A. Since September 28, 1990, numerous lawsuits related to exposure to
asbestos have been filed in state and federal courts by over 8,500
plaintiffs against multiple defendants, including the Corporation. During
this period, the asbestos litigation against the Corporation has been
consolidated into seven actions that include approximately 500 claims
against the Corporation. The plaintiffs allege, with respect to the
Corporation, that they sustained personal injuries and/or emotional
distress from alleged exposure to asbestos-containing materials while
working at the Corporation's Coosa Pines, Ala. mill as employees of
independent contractors at various times since the mill's construction and
that, in its capacity as a premises owner, the Corporation is responsible,
in part, for these injuries.
In 1995, the Corporation settled four of these actions and obtained
releases and dismissals with prejudice from 374 plaintiffs with claims
against the Corporation, and dismissals, without prejudice, from
approximately 4,000 other plaintiffs. There are approximately 4,500
plaintiffs in the actions that remain pending. Of these plaintiffs, an
unspecified number (not believed to exceed 250), have identified their
claims as based, in whole or in part, on having worked at the
Corporation's Coosa Pines, Ala. mill. The complaints do not specify the
amount of damages demanded.
The Corporation believes that its defenses to the remaining asbestos
claims are meritorious and that the final results of such claims, while
they cannot be predicted with certainty, will not have a material adverse
effect on the Corporation's business or results of operations.
B. Scott is a defendant in numerous actions in state and federal courts
seeking damages relating to breast implants. The actions allege that the
plaintiffs' breast implants were covered by polyurethane foam manufactured
by Scott's former Foam Division, which was sold in 1983, and that the foam
caused physical and/or psychological harm to the plaintiffs. In each of
these actions, Scott is one of several defendants, including the Foam
Division's successor and the manufacturers of the implants. The
Corporation believes that only a small percentage of breast implants were
covered by polyurethane foam manufactured by the Foam Division prior to
its sale.
Pursuant to an order of the Mutidistrict Litigation Panel, all federal
cases involving breast implants have been consolidated for pre-trial
purposes in the Northern District of Alabama and one of these cases,
Lindsey et al., vs. Dow Corning Corporation et al., has been provisionally
--------------------------------------------------
certified by the court as a class action for settlement purposes. Scott
elected not to participate in the proposed settlement of these actions;
rather, in April 1995, Scott's motion for summary judgment was granted by
the court, resulting in the dismissal of all federal actions against Scott
and the purchaser of the Foam Division. In January 1996, the plaintiffs
agreed to dismiss their appeal of such dismissal. A similar motion for
summary judgment was granted in 1995 in the consolidated California state
court breast implant suits, and that dismissal is now final because the
plaintiffs failed to file an appeal.
The Corporation believes that it has meritorious defenses to the remaining
breast implant claims and that the final results of such claims, while
they cannot be predicted with certainty, will not have a material adverse
effect on the Corporation's business or results of operations.
C. On July 18, 1995, a complaint was filed by Doris I. Fish and Debra Smilow
(the ``Fish Complaint'') on behalf of a putative class of the public
shareholders of Scott in the Circuit Court for the Fifteenth Judicial
Circuit, Palm Beach County, Florida (Case No. CL 95-5691 AD) against
Scott, certain former members of the Scott board of directors and certain
former officers of Scott. The Fish Complaint alleged, among other things,
that the former Scott directors acted in disregard of their fiduciary
duties to Scott shareholders in agreeing to the Merger. On January 17,
1996, the proceedings under this action were dismissed without prejudice.
On July 21, 1995, a complaint was filed by Louis Agnes (the ``Agnes
Complaint'') on behalf of a putative class of the public shareholders of
Scott, and derivatively on behalf of Scott, in the Circuit Court for the
Fifteenth Judicial Circuit, Palm Beach County, Florida (Case No. CL 95-
5757 AH) against Scott, the former members of the Scott board of directors
and Kimberly-Clark. The Agnes Complaint alleged, among other things, that
the terms of the Merger were fundamentally unfair to Scott shareholders,
that the former Scott directors acted in disregard of their fiduciary
duties to Scott shareholders in agreeing to the Merger and that Kimberly-
Clark aided and abetted such alleged breach. On January 18, 1996, the
proceedings under this action were dismissed without prejudice.
D. The Corporation also is subject to routine litigation from time to time
which individually or in the aggregate is not expected to have a material
adverse effect on the Corporation's business or results of operations.
Environmental Matters
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The information set forth under the "Environmental Matters" section of
"Management's Discussion and Analysis" contained in the 1995 Annual Report to
Stockholders is incorporated in this Item 3 by reference.
The Corporation has been named a potentially responsible party ("PRP") under
the provisions of the federal Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), or analogous state statute, at a
number of waste disposal sites, none of which, individually or in the
aggregate, in management's opinion, is likely to have a material adverse
effect on the Corporation's business or results of operations.
Notwithstanding its opinion, management believes it appropriate to discuss the
following matters concerning two of these sites where the Corporation's
estimated share of total site remediation costs, if any, cannot be established
on the basis of currently available information:
A. In 1993, Scott received a request for information from the EPA regarding
the Saco Landfill Superfund Site in Saco, Maine. Following an internal
investigation, Scott responded that Scott had no knowledge of any
arrangement for the disposal of waste materials at the site. However,
Scott had provided sludge and fly ash to the City of Saco and its
contractors for use in the construction of the landfill cap. The City of
Saco and the Maine Department of Environmental Protection previously had
approved the utilization of the sludge and ash in construction of the
topsoil cap. In 1994, the EPA served Scott with a second request for
information regarding Scott's nexus to the site. Scott again responded
that it had never disposed of hazardous waste at the site.
B. In 1994, Scott received a notice of responsibility from the Massachusetts
Department of Environmental Protection regarding the South Hadley Site in
South Hadley, Massachusetts. The notice implicated Scott Graphics, Inc.,
a former Scott subsidiary, as having disposed of hazardous waste at the
site.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A Special Meeting of Stockholders was convened at 11:00 a.m. on Tuesday,
December 12, 1995, at the Corporation's World Headquarters, 351 Phelps Drive,
Irving, Texas. Represented at the meeting in person or by proxy were 144.5
million shares of common stock, or 90% of all shares of common stock
outstanding.
The stockholders approved the issuance of shares of Kimberly-Clark Common
Stock pursuant to the Merger Agreement and certain ancillary agreements. Of
the shares represented at the meeting, 92.4% voted for such issuance, .6%
voted against and 7.0% abstained or did not vote.
The stockholders also approved an amendment to the Corporation's Restated
Certificate of Incorporation to increase the number of authorized shares of
Kimberly-Clark Common Stock from 300,000,000 to 600,000,000. Of the 160.5
million shares outstanding on the record date for the Special Meeting, 86.1%
voted for such amendment, 3.6% voted against and 10.3% abstained or did not
vote.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names and ages of the executive officers of the Corporation as of March 1,
1996, together with certain biographical information, are as follows:
JOHN W. DONEHOWER, 49, was elected Senior Vice President and Chief Financial
Officer in 1993. Mr. Donehower joined the Corporation in 1974. He was
appointed Director of Finance - Europe in 1978, Vice President, Marketing and
Sales - Nonwovens in 1981, Vice President, Specialty Papers in 1982, Managing
Director, Kimberly-Clark Australia Pty. Limited in 1982, and Vice President,
Professional Health Care, Medical and Nonwoven Fabrics in 1985. He was
appointed President, Specialty Products - U.S. in 1987, and President - World
Support Group in 1990.
O. GEORGE EVERBACH, 57, was elected Senior Vice President - Law and Government
Affairs in 1988. Mr. Everbach joined the Corporation in 1984. His
responsibilities have included direction of legal, human resources and
administrative functions. He was elected Vice President and General Counsel
in 1984; Vice President, Secretary and General Counsel in 1985; and Senior
Vice President and General Counsel in 1986.
THOMAS J. FALK, 37, was elected Group President - North American Tissue, Pulp
and Paper effective January 1, 1996. He is responsible for the Family Care
and Wet Wipes, Away From Home, Neenah Paper and Pulp and Paper Sectors, as
well as the Consumer Business Services and Environment and Energy
organizations. Mr. Falk joined the Corporation in 1983. His responsibilities
have included internal audit, financial and strategic analysis, and operations
management. Mr. Falk was appointed Vice President - Operations Analysis and
Control in 1990. He was elected Senior Vice President -Analysis and
Administration in 1992, Group President - Infant and Child Care in 1993, Group
President - North American Consumer Products effective January 1, 1995, and
Group President - North American Tissue Products effective July 21, 1995. Mr.
Falk is a director of Midwest Express Holdings, Inc., an equity company of the
Corporation.
JAMES G. GROSKLAUS, 60, was elected Executive Vice President effective
December 1, 1990. Employed by the Corporation since 1957, Mr. Grosklaus was
appointed Vice President in 1972 and Divisional Vice President in 1975, and
was elected Senior Vice President effective January 1, 1979. He was appointed
President, K-C Health Care, Nonwoven and Industrial Group in 1981, Senior
Staff Vice President in 1982, Senior Vice President in 1983 and President,
Technical Paper and Specialty Products in 1985, and elected Executive Vice
President in January 1986. In 1988, he was appointed President - North
American Pulp and Paper Sector. He is a director of Midwest Express Holdings,
Inc., an equity company of the Corporation, and is a member of the Emory
University Dean's Advisory Council and the Woodruff Arts Center Board of
Trustees. Mr. Grosklaus has been a director of the Corporation since 1987.
JAMES T. MCCAULEY, 57, was elected Executive Vice President in 1990. Mr.
McCauley joined the Corporation in 1969. He was elected Vice President and
Treasurer in 1980. Mr. McCauley was appointed Vice President - Nonwoven
Operations in 1984, Senior Vice President, Kimberly-Clark Newsprint & Pulp and
Forest Products in 1984, President, North American Pulp and Newsprint Sector
in 1985, President, Health Care and Nonwovens Sector in 1987, and President -
Nonwovens and Technical Products Sector in 1988. He was appointed President -
Nonwovens, Medical and Technical Products Sector in 1988 and President -
Nonwovens and Professional Health Care Sector, Far East Operations and World
Support Group in 1990.
WAYNE R. SANDERS, 48, has served as Chief Executive Officer of the Corporation
since December 1991 and Chairman of the Board of the Corporation since March
1992. He previously had been elected President and Chief Operating Officer in
1990. Employed by the Corporation in 1975, Mr. Sanders was appointed Vice
President of Kimberly-Clark Canada Inc., a wholly owned subsidiary of the
Corporation, in 1981 and was appointed Director and President in 1984. Mr.
Sanders was elected Senior Vice President of Kimberly-Clark Corporation in
1985 and was appointed President - Infant Care Sector in 1987, President -
Personal Care Sector in 1988 and President - World Consumer, Nonwovens and
Service and Industrial Operations in 1990. Mr. Sanders is a director of
Adolph Coors Company, Coors Brewing Company and Texas Commerce Bank, National
Association. He also is a member of the Marquette University Board of
Trustees and is a national trustee of the Boys and Girls Clubs of America. He
has been a director of the Corporation since 1989.
KATHI P. SEIFERT, 46, was elected Group President - North American Personal
Care Products effective July 21, 1995. She is responsible for the Infant and
Child Care and Feminine and Adult Care Sectors, as well as the U.S. and
Canadian Consumer Sales and Safety and Quality Assurance organizations. Ms.
Seifert joined Kimberly-Clark in 1978. Her responsibilities in the
Corporation have included various marketing positions within the Away From
Home, Consumer Tissue and Feminine Products business sectors. She was
appointed President - Feminine Care Sector in 1991 and was elected Group
President - Feminine and Adult Care in 1994 and Group President - North
American Consumer Products effective January 1, 1995. Ms. Seifert is a member
of the Board of Directors of Eli Lilly and Company and the Aid Association for
Lutherans.
JOHN A. VAN STEENBERG, 48, was elected President - European Consumer and
Service & Industrial Operations effective January 1, 1994. He is responsible
for the Household Products, Infant and Child Care, Feminine and Adult Care and
Away From Home Sectors in Europe, as well as the European Consumer Sales and
Distribution organizations. Mr. Van Steenberg joined the Corporation in 1978.
His responsibilities have included operations and major project management in
North America. He was appointed Managing Director of Kimberly-Clark Australia
Pty. Limited in 1990.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The dividend and market price data included in Note 16 to the Financial
Statements, and the information set forth under the captions "Dividends and
Dividend Reinvestment Plan" and "Stock Exchanges" contained in the 1995 Annual
Report to Stockholders are incorporated in this Item 5 by reference.
As of March 19, 1996, the Corporation had 57,032 stockholders of record.
ITEM 6. SELECTED FINANCIAL DATA (1)
(Millions of dollars Year Ended December 31
--------------------------------------------------
except per share amounts) 1995 1994 1993 1992 1991
- --------------------------------------------------------------------------------
Net Sales ..................$13,788.6 $11,979.2 $11,646.8 $12,024.2 $11,627.9
Restructuring and Other
Unusual Charges (2) ...... 1,440.0 -- 378.9 250.0 267.6
Operating Profit (2) ....... 213.0 1,277.1 734.5 883.8 803.8
Share of Net Income of
Equity Companies (3) ..... 113.3 110.5 76.1 90.0 97.6
Income from Continuing
Operations Before
Extraordinary Loss and
Cumulative Effects
of Accounting Changes (2) 33.2 766.5 287.2 492.0 475.4
Net Income (2)(3)(4)(5)(6) . 33.2 753.8 231.0 150.1 435.2
Per Share Basis:
Income from Continuing
Operations Before
Extraordinary Loss and
Cumulative Effects
of Accounting Changes (2) $ .12 $ 2.76 $1.03 $1.77 $ 1.72
Net Income (2)(3)(4)(5)(6) .12 2.71 .83 .54 1.58
Cash Dividends Declared .. 1.80 1.76 1.29 2.07 1.52
Cash Dividends Paid ...... 1.79 1.75 1.70 1.64 1.45
Total Assets ...............$11,439.2 $12,555.7 $13,210.4 $12,559.4 $12,467.0
Long-Term Debt ............. 1,984.7 2,085.4 3,403.0 3,140.1 3,329.8
Stockholders' Equity ....... 3,650.4 4,134.9 3,810.7 3,996.7 4,444.0
(1)All financial information, except cash dividends declared/paid per share,
has been restated to include the results of Scott Paper Company for all
periods presented prior to the merger on December 12, 1995. Cash
dividends declared/paid per share represent the historical dividends
declared/paid by Kimberly-Clark. The merger has been accounted for as a
pooling of interests.
(2)Results for 1995 include a pretax charge of $1,440.0 million or $1,070.9
million after income taxes and minority interests ($3.83 per share) for
the estimated costs of the merger with Scott, for restructuring the
combined operations, and for other unusual charges. Results for 1993
include a pretax charge of $378.9 million or $283.2 million after-tax
($1.02 per share) for Scott's planned restructuring and productivity
improvement programs. Results for 1992 include a pretax charge of $250.0
million or $172.0 million after-tax ($.62 per share) related to the
restructuring of the consumer and away-from-home products operations in
Europe and certain operations in North America. Results for 1991 include
a pretax charge of $267.6 million or $160.6 million after-tax ($.58 per
share) related to Scott's business improvement program.
(3)Share of net income of equity companies and net income for 1995 include a
nonoperating charge of $38.5 million ($.14 per share) for foreign
currency losses incurred by the Corporation's Mexican affiliates on the
translation of the net exposure of U.S. dollar-denominated liabilities
into pesos. In
1994, this charge to net income of equity companies and net income was
$39.2 million ($.14 per share). The translation losses are related to
the devaluation of the Mexican peso in December 1994 and subsequent
periods.
(4)Results for 1994 include income from a discontinued operation of $48.4
million ($.17 per share) related to S.D. Warren Company, a former
printing and publishing papers subsidiary, which was sold on December 20,
1994. Results for 1993, 1992 and 1991 include a loss from the
discontinued operation of $46.6 million ($.17 per share), $30.9 million
($.11 per share) and $40.2 million ($.14 per share), respectively.
(5)Results for 1994 and 1993 include an extraordinary loss related to the
early extinguishment of debt of $61.1 million ($.22 per share) and $9.6
million ($.03 per share), respectively.
(6)Net income for 1992 includes net after-tax charges of $311.0 million
($1.12 per share) for the cumulative effects of adopting the required
accounting rules for postretirement health care and life insurance
benefits and for income taxes.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information set forth under the caption "Management's Discussion and
Analysis" contained in the 1995 Annual Report to Stockholders is incorporated
in this Item 7 by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Corporation and its consolidated subsidiaries
and the independent auditors' report thereon contained in the 1995 Annual
Report to Stockholders are incorporated in this Item 8 by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The section of the 1996 Proxy Statement captioned "Certain Information
Regarding Directors and Nominees" under "Proposal 1. Election of Directors"
identifies members of the board of directors of the Corporation and nominees,
and is incorporated in this Item 10 by reference.
See also "EXECUTIVE OFFICERS OF THE REGISTRANT" appearing in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION
The information in the section of the 1996 Proxy Statement captioned
"Executive Compensation" under "Proposal 1. Election of Directors" is
incorporated in this Item 11 by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information in the sections of the 1996 Proxy Statement captioned
"Security Ownership of Management" under "Proposal 1. Election of Directors"
is incorporated in this Item 12 by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information in the section captioned "Certain Transactions and Business
Relationships" under "Proposal 1. Election of Directors" of the 1996 Proxy
Statement is incorporated in this Item 13 by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) DOCUMENTS FILED AS PART OF THIS REPORT.
1. Financial statements:
The Consolidated Balance Sheet as of December 31, 1995 and 1994, and the related
Consolidated Income Statement and Consolidated Cash Flow Statement for the years
ended December 31, 1995, 1994 and 1993, and the related Notes thereto, and the
Independent Auditors' Report of Deloitte & Touche LLP thereon are incorporated
in Part II, Item 8 of this Form 10-K by reference to the financial statements
contained in the 1995 Annual Report to Stockholders. In addition, related
reports of Deloitte & Touche LLP and other auditors are included herein.
2. Financial statement schedule:
The following information is filed as part of this Form 10-K and should be
read in conjunction with the financial statements contained in the 1995
Annual Report to Stockholders.
Independent Auditors' Reports
Schedule for Kimberly-Clark Corporation and Subsidiaries:
II Valuation and Qualifying Accounts
All other schedules have been omitted because they were not applicable or
because the required information has been included in the financial
statements or notes thereto.
3. Exhibits:
Exhibit No. (3)a. Restated Certificate of Incorporation of Kimberly-Clark
Corporation, dated April 16, 1987, incorporated by reference to Exhibit
No. (4)e of the Kimberly-Clark Corporation Form S-8 filed on February 16,
1993 (File No. 33-58402).
Exhibit No. (3)b. Certificate of Amendment of the Restated Certificate of
Incorporation of Kimberly-Clark Corporation, dated December 12, 1995.
Exhibit No. (3)c. By-Laws of Kimberly-Clark Corporation, as amended June 8,
1995, incorporated by reference to Exhibit No. (3) of the Kimberly-Clark
Corporation Form 10-Q for the quarterly period ended June 30, 1995.
Exhibit No. (4). Copies of instruments defining the rights of holders of
long-term debt will be furnished to the Securities and Exchange Commission on
request.
Exhibit No. (10)a. Kimberly-Clark Corporation Management Achievement Award
Program, as amended as of January 1, 1993, incorporated by reference to
Exhibit No. (10)b of the Kimberly-Clark Corporation Form 10-K for the year
ended December 31, 1994.
Exhibit No. (10)b. Kimberly-Clark Corporation Executive Severance Plan,
incorporated by reference to
Exhibit No. (10)c of the Kimberly-Clark Corporation Form 10-K for the year
ended December 31, 1992.
Exhibit No. (10)c. Second Amended and Restated Deferred Compensation Plan for
Directors of Kimberly-Clark Corporation, incorporated by reference to Exhibit
No. (10)d of the Kimberly-Clark Corporation Form
10-K for the year ended December 31, 1992.
Exhibit No. (10)d. Kimberly-Clark Corporation 1986 Equity Participation Plan,
as amended effective February 11, 1993, incorporated by reference to Exhibit
No. (10)e of the Kimberly-Clark Corporation Form 10-K for the year ended
December 31, 1994.
Exhibit No. (10)e. Kimberly-Clark Corporation 1992 Equity Participation Plan,
as amended effective February 16, 1995, incorporated by reference to
Exhibit No. (10) of the Kimberly-Clark Corporation Form 10-Q for the quarter
ended March 31, 1995.
Exhibit No. (10)f. Kimberly-Clark Corporation Deferred Compensation Plan,
effective as of October 1, 1994, incorporated by reference to Exhibit No.
(10)g. of the Kimberly-Clark Corporation Form 10-K for the year ended December
31, 1994.
Exhibit No. (11). The net income per share of common stock computations for
each of the periods included in Part II, Item 6 of this Form 10-K are based on
average common shares outstanding during each of the respective periods. The
only "common stock equivalents" or other potentially dilutive securities or
agreements (as defined in Accounting Principles Board Opinion No. 15) in
Kimberly-Clark Corporation's capital structure during the periods presented
were options outstanding under its Equity Participation Plans and under
Scott's stock option plans.
Computations of "primary" and "fully diluted" net income per share assume the
exercise of outstanding stock options under the "treasury stock method." The
table below presents the amounts by which the earnings per share amounts
presented in Part II, Item 6 would be reduced if the "treasury stock method"
had been used.
Primary Fully Diluted
------- -------------
1995 $ - $ -
1994 .02 .02
1993 - -
1992 - -
1991 .01 .01
Exhibit No. (12). Computation of ratio of earnings to fixed charges for the
five years ended December 31, 1995.
Exhibit No. (13). Portions of the Kimberly-Clark Corporation 1995 Annual
Report to Stockholders incorporated by reference in this Form 10-K.
Exhibit No. (21). Consolidated Subsidiaries and Equity Companies of Kimberly-
Clark Corporation are identified in the Kimberly-Clark Corporation 1995 Annual
Report to Stockholders, and such information is incorporated in this Form 10-K
by reference.
Exhibit No. (23)a. Independent Auditors' Consent of Deloitte & Touche LLP
Exhibit No. (23)b. Independent Auditors' Consent of Coopers & Lybrand L.L.P.
Exhibit No. (23)c. Independent Auditors' Consent of Price Waterhouse LLP
Exhibit No. (24). Powers of Attorney.
Exhibit No. (27). The Financial Data Schedule required by Item 601(b)(27) of
Regulation S-K has been included with the electronic filing of this Form 10-K.
(B) REPORTS ON FORM 8-K
The Corporation filed a Current Report on Form 8-K dated December 12, 1995,
which reported the consummation of the Merger. Such report was amended by a
Current Report on Form 8-K /A dated December 12, 1995, which reported certain
pro forma financial information related to the Merger.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Kimberly-Clark Corporation
March 25, 1996
By: /s/ John W. Donehower
-------------------------------------
John W. Donehower
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Wayne R. Sanders Chairman of the Board March 25, 1996
- ---------------------------
Wayne R. Sanders and Chief Executive Officer
and Director
(principal executive officer)
/s/ John W. Donehower Senior Vice President and March 25, 1996
- ---------------------------
John W. Donehower Chief Financial Officer
(principal financial officer)
/s/ Randy J. Vest Vice President and March 25, 1996
- ----------------------------
Randy J. Vest Controller
(principal accounting officer)
Directors
John F. Bergstrom James G. Grosklaus
Pastora San Juan Cafferty Louis E. Levy
Paul J. Collins Frank A. McPherson
Robert W. Decherd Linda Johnson Rice
William O. Fifield Wolfgang R. Schmitt
Claudio X. Gonzalez Randall L. Tobias
By: /s/ O. George Everbach March 25, 1996
-------------------------------------------
O. George Everbach, Attorney-in-Fact
INDEPENDENT AUDITORS' REPORT
KIMBERLY-CLARK CORPORATION:
We have audited the consolidated financial statements of Kimberly-Clark
Corporation as of December 31, 1995 and 1994, and for each of the three years in
the period ended December 31, 1995, and have issued our report thereon dated
January 30, 1996; such consolidated financial statements and report are included
in your 1995 Annual Report and are incorporated herein by reference. Our audits
also included the consolidated financial statement schedule of Kimberly-Clark
Corporation, listed in Item 14. This consolidated financial statement schedule
is the responsibility of the Corporation's management. Our responsibility is to
express an opinion on the financial statement schedule based on our audits. The
financial statements and financial statement schedule of Scott Paper Company, a
wholly-owned subsidiary of Kimberly-Clark Corporation, were audited by other
auditors whose reports have been furnished to us, and our opinions, insofar as
they relate to the amounts included for Scott Paper Company, are based on the
reports of such other auditors.
In our opinion, based on our audits and the reports of other auditors referred
to above, the consolidated financial statement schedule listed in Item 14, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.
/S/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Dallas, Texas
January 30, 1996
INDEPENDENT AUDITORS' REPORT
KIMBERLY-CLARK CORPORATION:
We have audited the consolidated balance sheets of Scott Paper Company and its
subsidiaries as of December 30, 1995 and December 31, 1994, and the related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for the years then ended. We have also audited the schedule of valuation
and qualifying accounts of Scott Paper Company and its subsidiaries as of and
for the years ended December 30, 1995 and December 31, 1994. These financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits. We
did not audit the provision for restructuring and other unusual charges of
$827.0 million, the related tax benefit of $218.0 million and related effect on
minority owners' share of subsidiaries' net income of $0.8 million for the year
ended December 30, 1995 nor the related effects of $39.5 million on cash and
cash equivalents, $26.8 million on receivables, $597.8 million on plant assets,
$79.9 million on accumulated depreciation, $57.6 million on goodwill and other
assets, $250.1 million on assets held for sale, $83.3 million on deferred income
tax asset, $134.7 million on deferred income taxes, $257.6 million on accruals
for restructuring programs, $0.8 million on minority owners' interests in
subsidiaries and $17.9 million on additional paid in capital at December 30,
1995. Such provision and related accounts were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it relates to the
aforementioned amounts, is based solely on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audit and the report of other auditors, (1) the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Scott Paper Company as of December
30, 1995 and December 31, 1994, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles, and (2) the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
As discussed in Note 1 of the Financial Review Notes, the Company adopted the
provisions of Statement of Financial Accounting Standards No. 121, `Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of''in 1995.
/S/ COOPERS & LYBRAND L.L.P.
- ----------------------------
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
January 30, 1996
INDEPENDENT AUDITORS' REPORT
KIMBERLY-CLARK CORPORATION:
We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements of Kimberly-Clark Corporation and its
subsidiaries for the year ended December 31, 1995, and have issued our report
thereon dated January 30, 1996. The financial statements of Scott Paper
Company, a wholly-owned subsidiary of Kimberly-Clark Corporation, were audited
by other auditors whose report has been furnished to us, and our opinion on the
consolidated financial statements referred to above, insofar as it relates to
the amounts included for Scott Paper Company (except for the provision for
restructuring and other unusual charges described below), is based on the report
of such other auditors. We have also audited the accompanying schedule of the
Scott Paper Company provision for restructuring and other unusual charges of
$827.0 million, the related tax benefit of $218.0 million and the related effect
on minority owners' share of subsidiaries' net income of $.8 million for the
year ended December 30, 1995 and the accompanying schedule of related effects on
asset and liability accounts as of December 30, 1995 including effects of $39.5
million on cash, $26.8 million on accounts receivable, $597.8 million on
property, plant and equipment, $79.9 million on accumulated depreciation, $57.6
million on other assets, $250.1 million on assets held for sale, $83.3 million
on deferred tax assets, $134.7 million on deferred tax liabilities, $257.6 on
accrued liabilities, $.8 million on minority owners' interests in subsidiaries
and $17.9 million on additional paid in capital, which amounts are included in
the 1995 consolidated financial statements of Scott Paper Company. These
schedules are the responsibility of the company's management. Our
responsibility is to express an opinion on these schedules based on our audit.
We conducted our audit of the schedules in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the schedules are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the schedules. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the schedules. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the schedules referred to above present fairly, in all material
respects, the Scott Paper Company provision for restructuring and other unusual
charges and the related tax benefits for the year ended December 30, 1995 and
the related effects on assets and liabilities as of December 30, 1995, in
conformity with generally accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Dallas, Texas
January 30, 1996
REPORT OF INDEPENDENT ACCOUNTANTS
In our opinion, the consolidated statements of operations, of cash flows and of
changes in stockholders' equity of Scott Paper Company and its subsidiaries (not
presented separately herein) present fairly, in all material respects, the
results of its operations and its cash flows for the year ended December 25,
1993, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which required that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides reasonable basis for the opinion expressed
above.
/S/ PRICE WATERHOUSE LLP
- ------------------------
PRICE WATERHOUSE LLP
Philadelphia, PA
January 25, 1994, except as to the classification of S.D. Warren as
discontinued operation, which is as of December 20, 1994.
REPORT OF PREDECESSOR INDEPENDENT ACCOUNTANTS ON
1993 FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
Scott Paper Company
Our audit of the consolidated financial statements referred to in our report
dated January 25, 1994 appearing on page 25 of this Form 10-K also included an
audit of the Financial Statement Schedule listed in Item 14(a)(2) of this Form
10-K for the year 1993. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
/S/ PRICE WATERHOUSE LLP
- ------------------------
PRICE WATERHOUSE LLP
Philadelphia, PA
January 25, 1996
SCHEDULE II Kimberly-Clark Corporation and Subsidiaries{PRIVATE }
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(Millions of dollars)
ADDITIONS DEDUCTIONS
------------------------------- ------------
BALANCE AT CHARGED TO CHARGED TO WRITE-OFFS BALANCE AT
BEGINNING COSTS AND OTHER AND DISCOUNTS END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS(A) ALLOWED PERIOD
DECEMBER 31, 1995
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts ............. $ 23.5 $ 41.7 $ .8 $ 12.0(b) $ 54.0
Allowances for sales
discounts ............. 22.1 201.7 .1 193.2(c) 30.7
------ ------- ---- ------ -------
Total ............... $ 45.6 $ 243.4 $ .9 $205.2 $ 84.7
====== ======= ==== ====== =======
DECEMBER 31, 1994
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts.............. $ 21.0 $ 8.2 $ .1 $ 5.8(b) $ 23.5
Allowances for sales
discounts ............. 20.1 108.3 - 106.3(c) 22.1
------ ------- ---- ------ -------
Total ............... $ 41.1 $ 116.5 $ .1 $112.1 $ 45.6
====== ======= ==== ====== =======
DECEMBER 31, 1993
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts.............. $ 23.2 $ 10.1 $ .2 $ 12.5(b) $ 21.0
Allowances for sales
discounts ............. 26.0 99.6 - 105.5(c) 20.1
------ ------- ---- ------ -------
Total ............... $ 49.2 $ 109.7 $ .2 $118.0 $ 41.1
====== ======= ==== ====== =======
(a) Primarily bad debt recoveries
(b) Primarily uncollectible receivables written off
(c) Sales discounts allowed
INDEX TO DOCUMENTS FILED AS A PART OF THIS REPORT
DESCRIPTION
-----------
Consolidated financial statements, incorporated by reference
Independent Auditors' Reports, incorporated by reference
Independent Auditors' Reports
Schedules for Kimberly-Clark Corporation and Subsidiaries:
II Valuation and Qualifying Accounts
Exhibit No. (3)a. Restated Certificate of Incorporation of Kimberly-Clark
Corporation, dated April 16, 1987, incorporated by reference to Exhibit
No. (4)e of the Kimberly-Clark Corporation Form S-8 filed on February 16,
1993 (File No. 33-58402)
Exhibit No. (3)b. Certificate of Amendment of the Restated Certificate of
Incorporation of Kimberly-Clark Corporation, dated December 12, 1995.
Exhibit No. (3)c. By-Laws of Kimberly-Clark Corporation, as amended
June 8, 1995, incorporated by reference to Exhibit No. (3) of the
Kimberly-Clark Corporation Form 10-Q for the quarterly period ended
June 30, 1995
Exhibit No. (4). Copies of instruments defining the rights of holders of
long-term debt will be furnished to the Securities and Exchange Commission
on request
Exhibit No. (10)a. Kimberly-Clark Corporation Management Achievement Award
Program, as amended as of January 1, 1993, incorporated by reference to
Exhibit No. (10)b of the Kimberly-Clark Corporation Form 10-K for the year
ended
December 31, 1994
Exhibit No. (10)b. Kimberly-Clark Corporation Executive Severance Plan,
incorporated by reference to Exhibit No. (10)c of the Kimberly-Clark
Corporation
Form 10-K for the year ended December 31, 1992
Exhibit No. (10)c. Second Amended and Restated Deferred Compensation Plan for
Directors of Kimberly-Clark Corporation, incorporated by reference to
Exhibit No. (10)d of the Kimberly-Clark Corporation Form 10-K for the year
ended December 31, 1992
Exhibit No. (10)d. Kimberly-Clark Corporation 1986 Equity Participation Plan,
as amended effective February 11, 1993, incorporated by reference to
Exhibit No. (10)e of the Kimberly-Clark Corporation Form 10-K for the year
ended December 31, 1994
Exhibit No. (10)e. Kimberly-Clark Corporation 1992 Equity Participation Plan,
as amended effective February 16, 1995, incorporated by reference to
Exhibit No. (10) of the Kimberly-Clark Corporation Form 10-Q for the
quarter ended March 31, 1995.
Exhibit No. (10)f. Kimberly-Clark Corporation Deferred Compensation Plan,
effective as of October 1, 1994, incorporated by reference to Exhibit No.
(10)g of the Kimberly-Clark Corporation Form 10-K for the year ended
December 31, 1994
Exhibit No. (11). Statement re: computation of earnings per share
Exhibit No. (12). Computation of ratio of earnings to fixed charges for the
five years ended December 31, 1995
Exhibit No. (13). Portions of the Kimberly-Clark Corporation 1995 Annual
Report to Stockholders incorporated by reference in this Form 10-K
Exhibit No. (21). Consolidated Subsidiaries and Equity Companies of Kimberly-
Clark Corporation are identified in the Kimberly-Clark Corporation 1995
Annual Report to Stockholders, and such information is incorporated in this
Form 10-K by reference
Exhibit No. (23)a. Independent Auditors' Consent of Deloitte & Touche LLP
Exhibit No. (23)b. Independent Auditors' Consent of Coopers & Lybrand LLP
Exhibit No. (23)c. Independent Auditors' Consent of Price Waterhouse LLP
Exhibit No. (24). Powers of Attorney
Exhibit No. (27). The Financial Data Schedule required by Item 601(b)(27) of
Regulation S-K has been included with the electronic filing of this Form
10-K.