Kimberly-Clark Announces Fourth Quarter and Full Year 2007 Results



    
    4Q Net Sales Increased More Than 10 Percent to a Record $4.8 Billion in
    2007; GAAP-Basis EPS Were $1.07 vs. $1.05 in 2006

    Adjusted EPS Rose 8 Percent to $1.11, Consistent With Previous Guidance

    2008 Outlook Calls for Continued Top- and Bottom-Line Growth in Line With
    Long-Term Targets
    

    DALLAS, Jan. 24 /CNW/ -- Kimberly-Clark Corporation (NYSE:   KMB) today
reported that net sales in the fourth quarter of 2007 improved 10.5 percent to
$4.8 billion, setting a new quarterly record. Highlights included continued
strong growth in developing and emerging markets, where sales climbed in
excess of 20 percent, and double-digit volume gains for several of the
company's well-known Personal Care brands in North America.  Overall, organic
sales growth totaled approximately 6 percent, driven principally by higher
sales volumes, while changes in currency exchange rates also benefited sales
by nearly 5 percent.
    Diluted net income per share was $1.07 compared with $1.05 in the prior
year.  Adjusted earnings in the fourth quarter of 2007 were $1.11 per share,
up nearly 8 percent from $1.03 per share in 2006 and in line with the
company's previous guidance range of $1.09 to $1.11 per share.  The increase
in sales, along with continued success in reducing costs, enabled the company
to deliver improved results for the quarter while absorbing approximately $115
million of cost inflation and increasing strategic marketing expenses by $10
million.  A lower share count, partially offset by a related increase in
interest expense, and a lower adjusted effective income tax rate also
contributed to the increase in adjusted earnings per share versus the year-ago
period.
    Adjusted earnings exclude charges for strategic cost reductions to
streamline the company's operations in both years and certain incremental
implementation costs related to the strategic cost reduction plan in 2007.
Also excluded from adjusted earnings in the year-ago quarter is the company's
share of an equity affiliate's gain on the sale of a business.  Further
information about adjusted earnings and other non-GAAP financial measures is
provided in a separate section of this news release.
    Chairman and Chief Executive Officer Thomas J. Falk said, "Looking back
on 2007, I'm encouraged by the progress K-C teams have made under our Global
Business Plan.  By focusing on innovation, building our brands and partnering
with customers while relentlessly driving costs out of the system, we again
delivered on our financial commitments.  For the year, better-than-expected
top-line growth contributed to solid improvement in adjusted operating profit
and earnings per share -- in line with our long-term targets -- despite
significantly higher inflation and a stepped up level of marketing spending. I
was also pleased with our fourth quarter performance overall and with the
sustained excellent results in Personal Care and developing and emerging
markets in particular.  Still, because of the toll inflation has taken on our
Consumer Tissue and K-C Professional margins, we are not satisfied with our
current position.  Recently announced price increases are among the steps
we're taking to improve revenue realization in those businesses."
    
    Review of fourth quarter sales
    
    The fourth quarter sales growth of 10.5 percent included an increase in
sales volumes of more than 4 percent versus the prior year, as well as
improvements in net selling prices and product mix of approximately 1 percent
each.  As noted above, stronger foreign currencies boosted sales by almost 5
percent.
    Sales of personal care products climbed 16.4 percent in the fourth
quarter.  Sales volume growth exceeded 10 percent and net selling prices
improved about 1 percent, while currency effects added approximately 5 percent
to sales.
    Personal care sales in North America went up about 13 percent compared
with the fourth quarter of 2006, driven by a 10-plus percent increase in
overall sales volumes.  The remainder of the improvement was attributable to
higher net selling prices and appreciation of the Canadian dollar, each of
which benefited sales by more than 1 percent.  Volume growth was broad-based,
as product innovations helped drive double-digit volume gains for Huggies
diapers and baby wipes and for the company's child care brands, with
particular strength in higher-margin, super premium product offerings.  Child
care volumes benefited from continued growth of Pull-Ups training pants and
the third quarter introduction of GoodNites Sleep Boxers and Sleep Shorts in
the youth pants category.  Meanwhile, sales volumes of the company's Depend
and Poise incontinence care brands rose 7 percent and Kotex feminine care
volumes were up slightly compared with the year-ago quarter.  In Europe,
personal care sales advanced 13 percent in the quarter, with favorable
currency effects accounting for the entire increase.  Sales volumes improved 3
percent, offset by a 3 percent decline in net selling prices.  The volume gain
reflects higher sales of Huggies diapers and baby wipes, Pull-Ups training
pants and DriNites youth pants across the region.  Competitive promotional
activity in diapers affected net selling prices and also contributed to a 2
percent decline in sales volumes of Huggies diapers in the company's four core
markets -- U.K., France, Italy and Spain.  In developing and emerging markets
(D&E), personal care top-line momentum remained very strong, as sales rose
nearly 25 percent, boosted by an increase in sales volumes of 14 percent and
currency benefits of about 9 percent.  Net selling prices were also up 1
percent.  The growth in sales volumes was broad-based, with particular
strength throughout most of Latin America and in South Korea, China and
Russia.
    Sales of consumer tissue products were 6.8 percent above the fourth
quarter of 2006, due primarily to favorable currency exchange rates that
benefited sales by 5 percent, along with improved product mix and net selling
prices, each approximately 1 percent better than the prior year.
    In North America, sales of consumer tissue products decreased about 1
percent in the fourth quarter, as 1 percent lower sales volumes and a 2
percent decline in net selling prices were partially offset by favorable
product mix and currency effects of 1 percent each.  Sales volumes of bathroom
tissue and paper towels increased 6 percent and 3 percent, respectively, on
continued growth of Scott bathroom tissue and Viva paper towels behind product
improvements for these brands.  These improvements, however, were offset by a
12 percent reduction in shipments of Kleenex facial tissue mainly because of a
weaker cold and flu season than in the prior year.  The decline in net selling
prices reflects heightened levels of competitive promotional activity in the
premium bathroom tissue category to support recent product upgrades, including
the company's improved Cottonelle bathroom tissue, as well as support for
facial tissue in anticipation of a seasonal pick up in volumes that has not
yet occurred.  In Europe, consumer tissue sales rose about 14 percent.
Currency exchange rates strengthened by an average of more than 10 percent,
accounting for a majority of the increase.  Sales volumes were up 4 percent,
on higher sales of Kleenex facial tissue and Andrex bathroom tissue, while a 1
percent increase in net selling prices was offset by a slight fall-off in
product mix.  Consumer tissue sales in developing and emerging markets rose
approximately 17 percent.  Favorable currency effects added 9 percent to
sales, and net selling prices and product mix improved 6 percent and 3
percent, respectively, while sales volumes were down approximately 1 percent.
Over the past year, prices have been raised in most D&E markets in response to
higher raw materials costs.
    Sales of K-C Professional (KCP) & other products advanced 8.1 percent
compared with the fourth quarter of 2006.  Currency effects benefited sales by
almost 5 percent, while sales volumes, net selling prices and product mix were
all about 1 percent better than the prior year.  KCP continued to post solid
sales volume gains in Latin America and volumes were up 3 percent in North
America, reflecting continued growth of the Kleenex, Scott and Cottonelle
washroom brands and Kimtech and WypAll wiper products.  In Europe, however,
sales volumes were lower in comparison to strong growth in the year-ago
period.
    Sales of health care products increased 1.4 percent in the fourth
quarter. Improved product mix of about 2 percent and currency benefits of the
same amount were partially offset by decreases in sales volumes and net
selling prices of approximately 1 percent and 2 percent, respectively.  The
decrease in sales volumes was mainly attributable to a higher level of sales
of face masks in the year-ago quarter primarily due to avian flu preparedness
and the company's decision in the second half of 2006 to exit the latex exam
glove business.  In the fourth quarter, the company made further progress in
transitioning customers and users from latex to its higher-margin,
clinically-preferred nitrile gloves, and sales of exam gloves improved
sequentially versus third quarter levels, as expected.  Nevertheless, the
growth in sales of nitrile gloves has not yet fully compensated for the
drop-off in sales of latex gloves, due in part to supply constraints earlier
in the year and competitive market conditions.  In other areas of the
business, fourth quarter sales of medical devices, particularly Ballard
respiratory catheters, generated solid improvement.
    
    Other fourth quarter operating results
    
    Operating profit was $669 million in the fourth quarter of 2007, compared
with $611 million in 2006.  Excluding net charges for the company's strategic
cost reduction plan in both years and related implementation costs in 2007,
adjusted operating profit for the quarter increased 3.5 percent to $697
million from $673 million in the prior year.  Top-line growth, along with
FORCE (Focused On Reducing Costs Everywhere) cost savings of about $30 million
and strategic cost reductions of $30 million enabled the company to more than
offset approximately $115 million of cost inflation.  The inflationary
increases were driven primarily by higher fiber costs, up about $60 million
versus the fourth quarter of 2006, and approximately $40 million for raw
materials other than fiber, including nonwovens and other oil-based materials,
along with about $10 million in distribution costs and $5 million of higher
energy costs.  Marketing, research and general expenses in the fourth quarter
reflect the higher level of marketing spending, as well as increased expenses
to support growth in developing and emerging markets and to further build
capabilities in key areas such as customer development.
    Interest expense for the quarter increased approximately $29 million from
the prior year, mainly as a result of new long-term debt issued in late July
to fund the company's accelerated share repurchase program.
    The company's effective tax rate in the fourth quarter was 23.8 percent
in 2007 and 23.0 percent in 2006.  Excluding the effects of charges for the
company's strategic cost reduction plan and related implementation costs, as
well as net effects from synthetic fuel partnerships in both years and
minority owners' share of tax benefits in 2007, the adjusted effective tax
rate for the quarter was 24.8 percent in 2007 compared with 29.1 percent in
2006.  The decline was due primarily to reversal of valuation allowances on
deferred tax assets at certain majority-owned subsidiaries in Latin America
based on a sustained improvement in the subsidiaries' operating results.  The
net effect of synthetic fuel partnership activities was a cost of nearly $7
million in the fourth quarter of 2007 compared with a benefit of approximately
$11 million in the prior year.  The cost in the current quarter reflects a
partial phase out of benefits, retroactive to the beginning of the year, as a
result of the recent increase in the price of oil.  The overall impact of
income taxes in the fourth quarter was favorable by approximately $9 million,
or 2 cents per share, versus both the prior year and the company's previous
guidance.  Reconciliations of the above effective tax rate calculations are
provided in a separate section of this news release.
    Kimberly-Clark's share of net income of equity companies in the fourth
quarter decreased to about $43 million from nearly $94 million in 2006, due
mainly to lower net income at Kimberly-Clark de Mexico, S.A.B. de C.V. (KCM).
The 2006 total includes a gain of approximately $46 million from KCM's sale of
its pulp and paper business.  The remainder of the decline was driven
primarily by lower operating profit at KCM, where sales growth of about 3
percent did not overcome the impact of significantly higher raw materials
costs.  As previously noted, Kimberly-Clark excluded the $46 million gain from
2006 adjusted earnings.
    Minority owners' share of subsidiaries' net income was approximately $51
million in the fourth quarter of 2007 compared with almost $28 million in the
prior year.  The increase was mainly attributable to minority owners' share of
the above-mentioned tax benefits at majority-owned subsidiaries.
    Competitive improvement initiatives -- update on strategic cost reduction
plan
    The company's strategic cost reduction plan is part of a comprehensive,
multi-year effort announced in July 2005 to further improve Kimberly-Clark's
competitive position.  The plan calls for streamlining manufacturing and
administrative operations primarily in North America and Europe, with expected
annual savings of at least $350 million by 2009.  These cost savings are
allowing the company to invest in targeted growth opportunities and in key
capabilities, including innovation, marketing and customer development.
    During the fourth quarter, the company continued to successfully execute
planned cost reduction activities, the most significant of which involved
consolidating infant and child care operations in North America, improving the
cost structure in Health Care and streamlining of administrative operations in
North America and Europe.  Savings for the full year totaled approximately
$105 million, somewhat above the company's target to save $75 to $100 million.
    To date, employees have been notified about workforce reductions and
other actions at 23 of 24 facilities slated for sale, closure or streamlining
as part of the cost reduction plan.  In addition, pretax charges of $820
million (about $574 million after tax), or approximately 90 percent of the
plan's expected cost, have now been incurred.  The company estimates
cumulative charges for implementing the plan, through its completion in 2008,
will total $880 to $910 million ($610 to $630 million after tax), of which
approximately 35 percent is expected to be paid in cash.
    
    Cash flow and balance sheet
    
    Cash provided by operations in the fourth quarter decreased to $685
million from $813 million in 2006, primarily because the prior year's cash
flow included a special dividend of $123 million received from KCM following
the sale of its pulp and paper business.  Capital spending for the quarter was
$213 million in 2007 compared with $333 million in the prior year. For the
full year of 2007, capital spending totaled $989 million, consistent with the
company's targeted spending range of $900 million to $1 billion.
    During the fourth quarter, the company repurchased approximately 3.9
million shares of its common stock at a cost of nearly $269 million.  For the
year, the company spent $2.8 billion to repurchase about 41.2 million shares
of Kimberly-Clark stock, including the purchase of 29.6 million shares in July
under an accelerated share repurchase agreement (ASR) for an initial payment
of $2.0 billion.
    At December 31, 2007, total debt and preferred securities was $6.5
billion compared with $4.4 billion at the end of 2006.  In late July, the
company issued $2.1 billion of long-term debt principally to finance the ASR.
    
    Full year results
    
    For the year of 2007, sales of $18.3 billion were up 9 percent from $16.7
billion in the prior year, as a result of a 4 percent increase in sales
volumes, improvements of approximately 1 percent in both net selling prices
and product mix and favorable currency effects of nearly 3 percent.
Year-to-date operating profit was $2,616 million compared with $2,102 million
in 2006.  Adjusted operating profit increased approximately 6 percent to
$2,734 million in 2007 from $2,586 million in the prior year.  The benefits of
top-line growth, along with cost savings of about $265 million, more than
offset inflation in key cost components totaling approximately $350 million
and a $50 million increase in strategic marketing spending.  For the year,
diluted net income per share in 2007 was $4.09 compared with $3.25 in 2006.
Adjusted earnings per share increased 9 percent to $4.25 in 2007 from $3.90 in
2006.  Those amounts are adjusted for: charges related to strategic cost
reductions in both years; incremental implementation costs and a gain on
settlement of litigation in 2007; and the gain resulting from the sale of part
of an affiliate's business in 2006.

    
    Outlook
    The company detailed its planning assumptions for 2008 as follows:
    

    
    --  Organic sales growth of 4 to 6 percent, in line with or slightly above
        its long-term objective.  Sales volumes are expected to increase 3 to
        4 percent, while net selling prices are anticipated to rise 1 to 2
        percent, reflecting price increases implemented during 2007 or
        scheduled for implementation in early 2008.
    --  Net sales growth of 5 to 7 percent, as foreign currency effects, at
        current rates, should benefit sales comparisons by at least 1 percent.
    --  Adjusted operating profit growth of 5 to 8 percent, in line with its
        long-term objective, as higher prices and continued significant cost
        savings should more than offset expected inflationary pressures and
        fund increased levels of strategic marketing.
        --  Cost inflation is projected to be at least $400 million, due
            mainly to higher fiber, polymer resin and other oil-based raw
            materials costs.  Energy and distribution costs are also expected
            to increase.
        --  Savings from the company's FORCE program and its strategic cost
            reduction plan are expected to total $200 to $250 million.
        --  Strategic marketing spending is planned to increase at a faster
            rate than sales to support new and improved products and improve
            overall brand equity and market share.
    --  The adjusted effective tax rate for the year is expected to be in a
        range of 28 to 30 percent versus 27.4 percent in 2007.  The company
        expects no benefits from its synthetic fuel partnerships in 2008.  The
        partnerships ceased operations because the law giving rise to the
        related tax deductions and credits expired at the end of 2007, as
        scheduled.
    --  The company's share of net income of equity companies is expected to
        be slightly above the 2007 level.
    --  Share repurchases of about $800 million to $1 billion are anticipated,
        subject to market conditions.  At current market prices, this equates
        to approximately 3 percent of outstanding shares and is consistent
        with the Global Business Plan target of 2 to 3 percent.  The total
        includes final settlement of the accelerated share repurchase executed
        in July 2007.
    --  Capital spending should total $850 million to $950 million, slightly
        below the long-range objective for annual spending of 5 to 6 percent
        of sales.
    --  A high single-digit percentage increase in the dividend, effective in
        April 2008, subject to approval by the Board of Directors.
    
    Commenting on the outlook, Falk said, "The underlying strength of our
business results throughout 2007 in the face of significant inflationary
pressures gives us confidence that we will continue to execute our Global
Business Plan well in the coming year.  We expect good top-line growth in
2008, as we build on our momentum in Personal Care and developing and emerging
markets and successfully drive our other targeted growth initiatives.  We also
will continue to aggressively reduce costs and we are intent on improving
results in businesses that have been most significantly impacted by cost
inflation.  At the same time, we will invest more to further strengthen key
capabilities in innovation, marketing and customer development -- investments
that will help us deliver sustainable growth.  Finally, we will remain focused
on increasing cash flow and deploying it in shareholder-friendly ways.
    "All things considered, we expect adjusted earnings per share in 2008
will be in a range of $4.45 to $4.60 per share.  Compared with adjusted
earnings of $4.25 per share in 2007, this will enable us to deliver growth of
5 to 8 percent, in line with our long-term objective.
    "As for the first quarter, we expect adjusted earnings per share will be
in a range of $1.05 to $1.08.  This reflects recent increases in pulp, polymer
resin and oil-based costs and the timing of previously announced price
increases for key consumer brands in the U.S., which are scheduled to be
implemented in mid-February.  We expect our earnings momentum to accelerate
later in the year as those price increases are realized and our top-line
growth and cost savings initiatives gain further traction."
    
    Non-GAAP financial measures
    
    This press release and the accompanying tables include the following
financial measures that have not been calculated in accordance with accounting
principles generally accepted in the U.S., or GAAP, and are therefore referred
to as non-GAAP financial measures:

    
    --  adjusted earnings and earnings per share
    --  adjusted operating profit
    --  adjusted effective tax rate
    
    These non-GAAP financial measures exclude certain items that are included
in the company's earnings, earnings per share, operating profit and effective
tax rate calculated in accordance with GAAP. A detailed explanation of each of
the adjustments to the comparable GAAP financial measures is given below.  In
accordance with the requirements of SEC Regulation G, reconciliations of the
non-GAAP financial measures to the comparable GAAP financial measures are
attached.
    The company provides these non-GAAP financial measures as supplemental
information to our GAAP financial measures.  Management and the company's
Board of Directors use adjusted earnings, adjusted earnings per share and
adjusted operating profit to (a) evaluate the company's historical and
prospective financial performance and its performance relative to its
competitors, (b) allocate resources and (c) measure the operational
performance of the company's business units and their managers.  Additionally,
the Management Development and Compensation Committee of the company's Board
of Directors uses these non-GAAP financial measures when setting and assessing
achievement of incentive compensation goals.  These goals are based, in part,
on the company's adjusted earnings per share and improvement in the company's
adjusted return on invested capital determined by excluding the charges that
are used in calculating these non-GAAP financial measures.
    In addition, Kimberly-Clark management believes that investors'
understanding of the company's performance is enhanced by including these
non-GAAP financial measures as a reasonable basis for comparing the company's
ongoing results of operations and for understanding the company's effective
tax rate.  Many investors are interested in understanding the performance of
our businesses by comparing our results from ongoing operations from one
period to the next.  By providing the non-GAAP financial measures, together
with the reconciliations, we believe we are enhancing investors' understanding
of our businesses and our results of operations, as well as assisting
investors in evaluating how well the company is executing the material changes
to our enterprise contemplated by the strategic cost reduction plan.  Also,
many financial analysts who follow our company focus on and publish both
historical results and future projections based on non-GAAP financial
measures.  We believe that it is in the best interests of our investors for us
to provide this information to analysts so that those analysts accurately
report the non-GAAP financial information.
    We calculate adjusted earnings, adjusted earnings per share, adjusted
operating profit and adjusted effective tax rate by excluding from the
comparable GAAP measure (i) charges related to our strategic cost reduction
plan for streamlining the company's operations, (ii) certain incremental
implementation costs relating to our strategic cost reduction plan, (iii) the
gain on a litigation settlement, (iv) our share of an equity affiliate's gain
on the sale of a business, and (v) the net effect of the company's investment
in synthetic fuel partnerships and the minority owners' share of tax benefits
on the company's effective tax rate.  Each of these adjustments and the basis
for such adjustments are described below:

    
    --  Strategic cost reduction plan. In July 2005, the company authorized a
        strategic cost reduction plan aimed at streamlining manufacturing and
        administrative operations, primarily in North America and Europe.  The
        strategic cost reduction plan commenced in the third quarter of 2005
        and is expected to be substantially completed by December 31, 2008.
        At the time we announced the plan, we advised investors that we would
        report our earnings, earnings per share and operating profit excluding
        the strategic cost reduction plan charges so that investors could
        compare our operating results without the plan charges from period to
        period and could assess our progress in implementing the plan.
        Management does not consider these charges to be part of our earnings
        from ongoing operations for purposes of evaluating the performance of
        its business units and their managers and excludes these charges when
        making decisions to allocate resources among its business units.
    --  Implementation costs. In connection with our strategic cost reduction
        plan, the company has incurred incremental implementation costs
        related to the transfer of certain administrative processes to third
        party providers.  These costs were incurred primarily in the first six
        months of 2007.  Management intends to exclude these implementation
        costs from our earnings from ongoing operations for purposes of
        evaluating the performance of our business units and their managers
        and to exclude these costs when making decisions to allocate resources
        among its business units.
    --  Litigation settlement. In the third quarter of 2007, the company
        received proceeds from settlement of litigation related to prior
        years' operations in Latin America.  Management does not consider this
        gain to be part of our earnings from ongoing operations for purposes
        of evaluating the performance of its business units and their managers
        and excludes the gain when making decisions to allocate resources
        among its business units.
    --  Gain on sale of business.  In the fourth quarter of 2006, the
        company's equity affiliate, Kimberly-Clark de Mexico, S.A. de C.V.
        sold its pulp and paper business and recorded an after-tax gain of
        $95 million.  The company's share of the gain was approximately $46
        million.  We exclude this gain from our adjusted earnings and adjusted
        earnings per share so that investors can compare our operating results
        without the non-recurring gain.  Management also excludes this gain
        when evaluating the operating performance of the company.
    --  Adjusted effective tax rate. In the analysis of its effective tax
        rate, the company excludes the effects of charges for the strategic
        cost reduction plan, related implementation costs and the litigation
        settlement gain, as well as net effects from the company's investment
        in synthetic fuel partnerships and the minority owners' share of tax
        benefits.  We believe that adjusting for these items provides improved
        insight into the tax effects of our ongoing business operations.
    
    These non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for the comparable GAAP measures.  There are
limitations to these non-GAAP financial measures because they are not prepared
in accordance with GAAP and they may not be comparable to similarly titled
measures of other companies due to potential differences in methods of
calculation and items being excluded.  The company compensates for these
limitations by using these non-GAAP financial measures as supplements to the
GAAP measures and by providing the reconciliations of the non-GAAP and
comparable GAAP financial measures.  The non-GAAP financial measures should be
read only in conjunction with the company's consolidated financial statements
prepared in accordance with GAAP.
    
    Conference call
    
    A conference call to discuss this news release and other matters of
interest to investors and analysts will be held at 9 a.m. (CST) today.  The
conference call will be simultaneously broadcast over the World Wide Web.
Stockholders and others are invited to listen to the live broadcast or a
playback, which can be accessed by following the instructions set out in the
Investors section of the company's Web site (http://www.kimberly-clark.com).
    
    About Kimberly-Clark
    
    Kimberly-Clark and its well-known global brands are an indispensable part
of life for people in more than 150 countries.  Every day, 1.3 billion people
-- nearly a quarter of the world's population -- trust K-C brands and the
solutions they provide to enhance their health, hygiene and well-being.  With
brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend,
Kimberly-Clark holds No. 1 or No. 2 share positions in more than 80 countries.
To keep up with the latest K-C news and to learn more about the company's
136-year history of innovation, visit http://www.kimberly-clark.com.
    Copies of Kimberly-Clark's Annual Report to Stockholders and its proxy
statements and other SEC filings, including Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, are made
available free of charge on the company's Web site on the same day they are
filed with the SEC.  To view these filings, visit the Investors section of the
company's Web site.
    Certain matters contained in this news release concerning the business
outlook, including new product introductions, cost savings, changes in
finished product selling prices, anticipated costs and benefits related to the
strategic cost reduction plan, anticipated benefits from the accelerated share
repurchase agreement, anticipated financial and operating results, strategies,
contingencies and anticipated transactions of the company constitute
forward-looking statements and are based upon management's expectations and
beliefs concerning future events impacting the company.  There can be no
assurance that these future events will occur as anticipated or that the
company's results will be as estimated.  For a description of certain factors
that could cause the company's future results to differ materially from those
expressed in any such forward-looking statements, see Item 1A of the company's
Annual Report on Form 10-K for the year ended December 31, 2006 entitled "Risk
Factors."



    
                          KIMBERLY-CLARK CORPORATION
                        CONSOLIDATED INCOME STATEMENT
                          PERIODS ENDED DECEMBER 31
               (Millions of dollars, except per share amounts)
    

    
                                                 Three Months
                                               Ended December 31
                                              2007          2006       Change
    

    
    Net Sales                               $4,758.1      $4,307.2    + 10.5%
      Cost of products sold                  3,296.0       2,941.3    + 12.1%
    

    
    Gross Profit                             1,462.1       1,365.9    +  7.0%
      Marketing, research and general
       expenses                                792.0         744.7    +  6.4%
      Other (income) and expense, net            1.2          10.6    - 88.7%
    

    
    Operating Profit                           668.9         610.6    +  9.5%
      Nonoperating income (expense)             14.7         (24.9)      N.M.
      Interest income                            9.5           9.4    +  1.1%
      Interest expense                         (83.4)        (54.4)   + 53.3%
    

    
    Income Before Income Taxes and Equity
     Interests                                 609.7         540.7    + 12.8%
      Provision for income taxes              (145.4)       (124.3)   + 17.0%
    

    
    Income Before Equity Interests             464.3         416.4    + 11.5%
      Share of net income of equity companies   43.1          93.9    - 54.1%
      Minority owners' share of subsidiaries'
       net income                              (51.4)        (27.7)   + 85.6%
    

    Net Income                               $ 456.0       $ 482.6    -  5.5%

    Net Income Per Share Basis - Diluted     $  1.07       $  1.05    +  1.9%

    
    N.M. - Not meaningful
    Unaudited
    



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED DECEMBER 31
                            (Millions of dollars)
    

    
    Notes:
    1. Charges for the Strategic Cost Reductions are included in the
       Consolidated Income Statement as follows:
    

    
                                                      Three Months
                                                    Ended December 31
                                                      2007     2006
    Cost of products sold                           $ 18.0    $ 40.1
    

    Marketing, research and general expenses           8.8      22.3

    Other (income) and expense, net                    (.8)       .4

    Provision for income taxes                        (9.6)    (22.7)

    Strategic Cost Reductions after taxes             16.4      40.1

    Minority interest                                  (.1)        -

    Net Charges                                     $ 16.3    $ 40.1

    In addition, charges of $1.9 million ($1.2 million after tax) in 2007 for
the related implementation costs are included in marketing, research and
general expenses.

    Unaudited



    
                          KIMBERLY-CLARK CORPORATION
                        CONSOLIDATED INCOME STATEMENT
                          PERIODS ENDED DECEMBER 31
               (Millions of dollars, except per share amounts)
    

    
                                               Twelve Months
                                             Ended December 31
                                            2007           2006        Change
    Net Sales                            $18,266.0      $16,746.9      + 9.1%
      Cost of products sold               12,562.1       11,664.8      + 7.7%
    

    
    Gross Profit                           5,703.9        5,082.1      +12.2%
      Marketing, research and general
       expenses                            3,105.9        2,948.3      + 5.3%
      Other (income) and expense, net        (18.4)          32.3        N.M.
    

    
    Operating Profit                       2,616.4        2,101.5      +24.5%
      Nonoperating expense                   (66.9)         (65.5)     + 2.1%
      Interest income                         32.8           29.2      +12.3%
      Interest expense                      (264.8)        (220.3)     +20.2%
    

    
    Income Before Income Taxes and Equity
     Interests                             2,317.5        1,844.9      +25.6%
      Provision for income taxes            (536.5)        (469.2)     +14.3%
    Income Before Equity Interests         1,781.0        1,375.7      +29.5%
      Share of net income of equity
       companies                             170.0          218.6      -22.2%
      Minority owners' share of
       subsidiaries' net income             (128.1)         (94.8)     +35.1%
    

    Net Income                            $1,822.9       $1,499.5      +21.6%

    Net Income Per Share Basis - Diluted  $   4.09       $   3.25      +25.8%

    
    N.M. - Not meaningful
    Unaudited
    



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED DECEMBER 31
               (Millions of dollars, except per share amounts)
    

    
    Notes:
    1. Charges for the Strategic Cost Reductions are included in the
       Consolidated Income Statement as follows:
    

    
                                                      Twelve Months
                                                     Ended December 31
                                                     2007         2006
    Cost of products sold                           $89.4       $342.4
    

    Marketing, research and general expenses         31.8        134.0

    Other (income) and expense, net                 (14.0)         8.0

    Provision for income taxes                      (45.6)      (137.8)

    Strategic Cost Reductions after taxes            61.6        346.6

    Minority interest                                 (.2)        (1.6)

    
    Net Charges                                     $61.4       $345.0
    
    In addition, charges of $27.1 million ($17.3 million after tax) in 2007
for the related implementation costs are included in marketing, research and
general expenses.

    
    2.  Other (income) and expense, net includes a pre-tax gain of
        $16.4 million ($9.9 million after tax) in 2007 for a litigation
        settlement.
    

    3.  Other Information:

    
                                                      Twelve Months
                                                    Ended December 31
                                                    2007        2006
    Cash Dividends Declared Per Share            $   2.12      $  1.96
    


    
                                                      December 31
    Common Shares (Millions)                        2007        2006
    

    Outstanding, as of                              420.9        455.6

    Average Diluted for:

    Three Months Ended                          426.5        461.2

    Twelve Months Ended                         445.6        461.6

    Unaudited



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED DECEMBER 31
                            (Millions of dollars)
    

    Supplemental Financial Information:

    
    Preliminary Balance Sheet Data:
                                                December 31       December 31
                                                   2007              2006
    

    Cash and cash equivalents                   $    472.7       $    360.8

    Accounts receivable, net                       2,560.6          2,336.7

    Inventories                                    2,443.8          2,004.5

    Total assets                                  18,439.7         17,067.0

    Accounts payable                               1,768.3          1,530.8

    Debt payable within one year                   1,097.9          1,326.4

    Total current liabilities                      4,928.6          5,015.8

    Long-term debt                                 4,393.9          2,276.0

    Preferred securities of subsidiary             1,004.6            793.4

    Stockholders' equity                           5,223.7          6,097.4



    
                                                         Twelve Months
                                                       Ended December 31
    Preliminary Cash Flow Data:                       2007          2006
    

    Cash provided by operations                    $ 2,428.9    $  2,579.5

    Cash used for investing                        $  (898.1)   $ (1,035.9)

    Cash used for financing                        $(1,426.8)   $ (1,551.3)

    Depreciation and amortization                $   806.5    $    932.8

    Capital spending                             $   989.3    $    972.1

    Cash dividends paid                          $   932.9    $    884.0

    Unaudited


    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED DECEMBER 31
    

    
    Description of Business Segments
    
    The Corporation is organized into operating segments based on product
groupings. These operating segments have been aggregated into four reportable
global business segments:  Personal Care; Consumer Tissue; K-C Professional &
Other; and Health Care. The reportable segments were determined in accordance
with how the Corporation's executive managers develop and execute the
Corporation's global strategies to drive growth and profitability of the
Corporation's worldwide Personal Care, Consumer Tissue, K-C Professional &
Other, and Health Care operations. These strategies include global plans for
branding and product positioning, technology, research and development
programs, cost reductions including supply chain management, and capacity and
capital investments for each of these businesses. Segment management is
evaluated on several factors, including operating profit. Segment operating
profit excludes other income and (expense), net; income and expense not
associated with the business segments; and the costs of corporate decisions
related to the Strategic Cost Reductions.  Corporate & Other includes the
costs related to the Strategic Cost Reductions.
    The principal sources of revenue in each of our global business segments
are described below.
    The Personal Care segment manufactures and markets disposable diapers,
training and youth pants and swimpants; baby wipes; feminine and incontinence
care products; and related products. Products in this segment are primarily
for household use and are sold under a variety of brand names, including
Huggies, Pull-Ups, Little Swimmers, GoodNites, Kotex, Lightdays, Depend, Poise
and other brand names.
    The Consumer Tissue segment manufactures and markets facial and bathroom
tissue, paper towels, napkins and related products for household use. Products
in this segment are sold under the Kleenex, Scott, Cottonelle, Viva, Andrex,
Scottex, Hakle, Page and other brand names.
    The K-C Professional & Other segment manufactures and markets facial and
bathroom tissue, paper towels, napkins, wipers and a range of safety products
for the away-from-home marketplace. Products in this segment are sold under
the Kimberly-Clark, Kleenex, Scott, WypAll, Kimtech, Kleenguard and Kimcare
brand names.
    The Health Care segment manufactures and markets disposable health care
products such as surgical gowns, drapes, infection control products,
sterilization wrap, face masks, exam gloves, respiratory products and other
disposable medical products.  Products in this segment are sold under the
Kimberly-Clark, Ballard and other brand names.

    Unaudited


    
                          KIMBERLY-CLARK CORPORATION
                        SELECTED BUSINESS SEGMENT DATA
                          PERIODS ENDED DECEMBER 31
                            (Millions of dollars)
    

    
                            Three Months                 Twelve Months
                          Ended December 31            Ended December 31
                       2007      2006    Change      2007     2006    Change
    NET SALES:
    

    
    Personal Care   $1,962.8  $1,686.1   +16.4%   $7,562.7  $6,740.9   +12.2%
    Consumer Tissue  1,683.0   1,575.2   + 6.8%    6,474.5   5,982.0   + 8.2%
    K-C Professional
     & Other           798.3     738.8   + 8.1%    3,039.2   2,813.1   + 8.0%
    Health Care        315.3     310.9   + 1.4%    1,206.8   1,237.4   - 2.5%
    

    Corporate & Other   13.2       8.8   +50.0%       40.7      32.3   +26.0%

    
    Intersegment
     Sales             (14.5)    (12.6)  +15.1%      (57.9)    (58.8)  - 1.5%
    

    Consolidated    $4,758.1  $4,307.2   +10.5%  $18,266.0 $16,746.9   + 9.1%

    OPERATING PROFIT:

    
    Personal Care     $425.7    $342.3   +24.4%   $1,562.4  $1,302.5   +20.0%
    Consumer Tissue    160.3     205.8   -22.1%      702.4     772.6   - 9.1%
    K-C Professional
     & Other           124.5     126.5   - 1.6%      478.2     472.1   + 1.3%
    Health Care         44.0      50.2   -12.4%      195.0     211.2   - 7.7%
    

    Corporate & Other  (84.4)   (103.6)  -18.5%     (340.0)   (624.6)  -45.6%

    
    Other income and
     (expense), net     (1.2)    (10.6)  -88.7%       18.4     (32.3)    N.M.
    

    Consolidated      $668.9    $610.6   + 9.5%   $2,616.4  $2,101.5   +24.5%

    
    Note:  Corporate & Other and Other income and (expense), net, include the
           following amounts of pre-tax charges for the Strategic Cost
           Reductions.  In 2007, Corporate & Other also includes the related
           implementation costs.
    

    
                                         Three Months          Twelve Months
                                       Ended December 31     Ended December 31
                                        2007       2006      2007       2006
    

    Corporate & Other                $ (26.8)   $ (62.4)   $(121.2)  
$(476.4)

    Other income and (expense), net       .8        (.4)      14.0      
(8.0)

    
    N.M. - Not meaningful
    Unaudited
    



    
                          KIMBERLY-CLARK CORPORATION
                        SELECTED BUSINESS SEGMENT DATA
                          PERIODS ENDED DECEMBER 31
    

    PERCENTAGE CHANGE IN NET SALES VERSUS PRIOR YEAR

    
                                       Three Months Ended December 31, 2007
                                                    Net       Mix/
                                  Total   Volume   Price    Other(1)  Currency
    

    Consolidated                   10.5      4       1         1         5

    Personal Care                16.4     10       1         -         5

    Consumer Tissue               6.8      -       1         1         5

    K-C Professional & Other      8.1      1       1         1         5

    Health Care                   1.4     (1)     (2)        2         2


    
                                       Twelve Months Ended December 31, 2007
                                                    Net       Mix/
                                  Total   Volume   Price    Other(1)  Currency
    

    Consolidated                    9.1      4       1         1         3

    Personal Care                12.2      8       -         1         3

    Consumer Tissue               8.2      1       2         1         4

    K-C Professional & Other      8.0      3       1         1         3

    Health Care                  (2.5)    (5)      -         1         1

    (1) Mix/Other includes rounding.



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED DECEMBER 31
               (Millions of dollars, except per share amounts)
    

    
    NON-GAAP RECONCILIATION SCHEDULES
    
    The tables on the following pages present the reconciliation of non-GAAP
financial measures to GAAP financial measures.

    EARNINGS SUMMARY:

    
                                        Three Months Ended December 31
                                          2007                  2006
                                              Diluted                Diluted
                                    Income    Earnings    Income     Earnings
                                   (Expense)  Per Share  (Expense)   Per Share
    

    Adjusted Earnings               $ 473.5   $  1.11     $ 477.1    $  1.03

    Adjustments for:

    
      Gain on sale of Equity
       Affiliate Business                 -         -        45.6        .10
    

    
      Strategic Cost Reduction
       charges                        (16.3)     (.04)      (40.1)      (.09)
    

    Implementation costs             (1.2)        -           -          -

    Rounding                            -         -           -        .01

    Net Income                     $  456.0   $  1.07     $ 482.6    $  1.05


    
                                        Twelve Months Ended December 31
                                          2007                  2006
                                              Diluted                Diluted
                                    Income    Earnings    Income     Earnings
                                   (Expense)  Per Share  (Expense)   Per Share
    

    Adjusted Earnings            $  1,891.7    $  4.25  $ 1,798.9    $  3.90

    Adjustments for:

    
      Gain on sale of Equity
       Affiliate Business                 -          -       45.6        .10
    

    
      Strategic Cost Reduction
       charges                        (61.4)      (.14)    (345.0)      (.75)
    

    Implementation costs            (17.3)      (.04)         -          -

    Litigation settlement             9.9        .02          -          -

    Net Income                   $  1,822.9    $  4.09  $ 1,499.5    $  3.25



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED DECEMBER 31
                            (Millions of dollars)
    

    OPERATING PROFIT SUMMARY:

    
                                                            Three Months
                                                           Ended December 31
                                                            2007       2006
    

    Adjusted Operating Profit                            $  696.8   $  673.4

    Adjustments for:

    Strategic Cost Reduction charges                      (26.0)     (62.8)

    Implementation costs                                   (1.9)         -

    Operating Profit                                     $  668.9   $  610.6


    
                                                            Twelve Months
                                                          Ended December 31
                                                            2007       2006
    

    Adjusted Operating Profit                           $ 2,734.3   $2,585.9

    Adjustments for:

    Strategic Cost Reduction charges                     (107.2)   ( 484.4)

    Implementation costs                                  (27.1)         -

    Litigation settlement                                  16.4          -

    
    Operating Profit
                                                        $ 2,616.4   $2,101.5
    



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED DECEMBER 31
                            (Millions of dollars)
    
    Effective Income Tax Rate Reconciliation - Adjustments(1) and Synthetic
Fuel Partnership Activities and the Minority Owners' Share of Tax Benefits:


    
                             Three Months Ended December 31, 2007
                                                                Minority
                                                              Owners' Share
                                        Synthetic Fuels     of Tax Benefits(2)
                                                                     Excluding
                  As      Excluding    Effect of  Excluding    Tax      Tax
               Reported Adjustments(1) Activities Activities Benefits Benefits
    Income
     Before
     Income
     Taxes       $609.7      $637.6        $14.7    $622.9       $ -   $622.9
    

    
    Provision
     for Income
     Taxes        145.4       155.7         21.4     134.3     (20.4)   154.7
    

    
    Net Synthetic
     Fuel
     Benefit                               $(6.7)
    

    
    Effective
     Income
     Tax Rate      23.8%
    

    
    Adjusted
     Effective
     Income
     Tax Rate                  24.4%                  21.6%              24.8%
    



    
                    Three Months Ended December 31, 2006
                                             Synthetic Fuels
                  As      Excluding       Effect of     Excluding
               Reported  Adjustments(1)   Activities    Activities
    Income
     Before
     Income
     Taxes       $540.7      $603.5        $(24.9)        $628.4
    

    
    Provision
     for Income
     Taxes        124.3       147.0         (35.6)         182.6
    

    
    Net Synthetic
     Fuel
     Benefit                                $10.7
    

    
    Effective
     Income
     Tax Rate      23.0%
    

    
    Adjusted
     Effective
     Income
     Tax Rate                  24.4%                        29.1%
    

    
    (1) Charges for Strategic Cost Reductions and related implementation costs
        in 2007 and Strategic Cost Reductions in 2006.
    

    (2) Minority owners' share of tax benefits at majority-owned
subsidiaries.



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED DECEMBER 31
                            (Millions of dollars)
    
    Effective Income Tax Rate Reconciliation - Adjustments(1) and Synthetic
Fuel Partnership Activities and the Minority Owners' Share of Tax Benefits:

    
                            Twelve Months Ended December 31, 2007
                                                                 Minority
                                                              Owners' Share
                                         Synthetic Fuels    of Tax Benefits(2)
                                                                     Excluding
                  As      Excluding     Effect of Excluding    Tax      Tax
               Reported Adjustments(1) Activities Activities Benefits Benefits
    

    
    Income
     Before
     Income
     Taxes      $2,317.5    $2,435.4    $(66.9)   $ 2,502.3    $ -   $2,502.3
    

    
    Provision
     for Income
     Taxes         536.5       585.4     (80.5)       665.9  (20.4)     686.3
    

    
    Net Synthetic
     Fuel Benefit                        $13.6
    

    
    Effective
     Income
     Tax Rate       23.1%
    

    
    Adjusted
     Effective
     Income
     Tax Rate                   24.0%                  26.6%             27.4%
    



    
                               Twelve Months Ended December 31, 2006
                                                     Synthetic Fuels
                         As       Excluding      Effect of      Excluding
                      Reported  Adjustments(1)   Activities    Activities
    

    
    Income
     Before
     Income
     Taxes           $ 1,844.9    $ 2,329.3       $ (65.5)     $ 2,394.8
    

    
    Provision
     for Income
     Taxes               469.2        607.0         (86.0)         693.0
    

    
    Net
     Synthetic Fuel
     Benefit                                       $ 20.5
    

    
    Effective
     Income
     Tax Rate             25.4%
    

    
    Adjusted
     Effective
     Income
     Tax Rate                          26.1%                        28.9%
    

    
     (1) Charges for Strategic Cost Reductions, related implementation costs
         and a litigation settlement in 2007 and Strategic Cost Reductions in
         2006.
    

    
     (2) Minority owners' share of tax benefits at majority-owned
         subsidiaries.
    



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED DECEMBER 31
    

    
    OUTLOOK FOR 2008
    Estimated Full-Year 2008 Diluted Earnings Per Share:
    

    Adjusted Earnings Per Share                      $ 4.45  - $ 4.60

    Strategic Cost Reductions                          (.13) -   (.09)

    Earnings Per Share - Diluted                     $ 4.32  - $ 4.51

    
    Estimated First Quarter 2008 Diluted
     Earnings Per Share:
    

    Adjusted Earnings Per Share                      $ 1.05  - $ 1.08

    Strategic Cost Reductions                          (.05) -   (.04)

    Earnings Per Share - Diluted                     $ 1.00  - $ 1.04




For further information:

For further information: Media, Dave Dickson, +1-972-281-1481, 
ddickson@kcc.com, or Joey Mooring, +1-972-281-1443, joey.mooring@kcc.com,  or
Investors, Mike Masseth, +1-972-271-1478, mmasseth@kcc.com, all of 
Kimberly-Clark Corporation Web Site: http://www.kimberly-clark.com

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