Kimberly-Clark Announces Full Details of Second Quarter 2008 Results



    
    As Previously Reported, Net Sales Rose More Than 11 Percent to $5.0
    Billion, With Increases in Each Business Segment

    GAAP-Basis EPS Were $0.99 vs. $1.00 in 2007; Adjusted EPS Were $1.03 vs.
    $1.04 in the Year-Ago Quarter

    Cash Provided By Operations Increased 16 Percent on Improved Working
    Capital Performance

    
    DALLAS, July 24 /CNW/ -- Kimberly-Clark Corporation (NYSE:   KMB) today
reported full details of its second quarter 2008 results. Preliminary net
sales and earnings per share figures were announced on July 14, 2008.  For the
quarter, net sales increased 11.2 percent to $5.0 billion, a new quarterly
record.  Sales were higher in all four of the company's business segments,
highlighted by continued strong performance across developing and emerging
markets and double-digit sales growth for Personal Care products in North
America.  Organic sales growth exceeded 7 percent, including improvements of
about 3 percent in both sales volumes and net selling prices.  Changes in
currency exchange rates also benefited sales by approximately 4 percent.
    Diluted net income per share was $0.99 compared with $1.00 in the prior
year.  Adjusted earnings in the second quarter of 2008 were $1.03 per share
versus $1.04 per share in 2007.  The top-line growth and cost savings
contributed positively to results; however, those improvements were not
sufficient to overcome an increased level of inflation, as input costs climbed
about $180 million, and a planned higher investment in strategic marketing of
nearly $25 million.  As expected, a lower share count, net of a related
increase in interest expense, benefited year-over-year earnings per share
comparisons, while a higher effective income tax rate than in 2007, due
primarily to the expiration of synthetic fuel tax benefits, was an offsetting
factor.
    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, as
well as an after-tax extraordinary loss related to the restructuring of
certain contractual arrangements in the second quarter of 2008.  Further
information about these adjustments, along with the company's rationale for
reporting adjusted earnings and other non-GAAP financial measures is provided
later in this news release.
    Chairman and Chief Executive Officer Thomas J. Falk said, "Our second
quarter results reflect continued progress with our top-line growth strategies
as well as the significant challenges we are facing on the cost front.
Although we have delivered organic sales growth of more than 6 percent through
the first half of the year, the reality is that the rapid run-up in commodity
costs has outpaced our ability to offset inflation in the near-term with price
increases and other actions.  As a result, we have increased our emphasis on
improving revenue realization and during the second quarter implemented or
announced new price increases in the U.S. and other markets around the world.
These moves should lead to sequentially better bottom-line results in the
fourth quarter, as we announced last week.
    Meanwhile, we will continue to drive our Global Business Plan strategies
to strengthen the long-term health of our company and our brands.  We will
also continue to operate our business efficiently, improving productivity and
driving costs out of the system.  Finally, we remain committed to improving
our working capital performance, which will benefit our already strong cash
flow."
    
    Review of second quarter sales by business segment
    
    Sales of personal care products climbed 15.1 percent in the second
quarter.  Sales volumes rose 9 percent, net selling prices improved about 2
percent and currency effects added approximately 4 percent to sales.
    Personal care sales in North America went up about 10 percent compared
with the second quarter of 2007, driven primarily by strong sales volume
growth of 8 percent.  Higher net selling prices and favorable currency
translation both added 1 percent to sales.  Sales volumes improved across most
categories, paced by double-digit growth for Huggies diapers and high
single-digit gains for the company's child care and incontinence care brands.
Selling prices rose primarily as a result of price increases for diaper and
child care products implemented during the first quarter in the U.S.,
partially offset by competitive promotional activities.
    In Europe, personal care sales were up approximately 8 percent in the
quarter.  Favorable currency effects boosted sales by about 13 percent;
however, sales volumes were lower by 5 percent.  The volume decline reflects
lower sales of Huggies diapers, partially offset by increased sales of baby
wipes and child care products across the region.  Sales volumes of Huggies
diapers in the company's four core markets -- U.K., France, Italy and Spain --
were down 8 percent as the company maintained net selling prices generally in
line with prior year levels in a continued highly competitive environment.
    In developing and emerging markets (D&E), personal care sales surged
about 25 percent, as the company is benefiting from strong product and
customer programs in rapidly growing markets.  Sales volumes increased more
than 14 percent, while net selling prices and the mix of products sold both
improved approximately 2 percent.  Stronger foreign currencies benefited sales
by more than 6 percent.  The growth in sales volumes was broad-based, with
particular strength throughout most of Latin America and in South Korea,
China, Russia, Turkey and Vietnam.
    Sales of consumer tissue products were 7.7 percent above the second
quarter of 2007.  Although overall sales volumes declined 3 percent versus the
prior year, net selling prices and product mix improved by 5 percent and 2
percent, respectively, and favorable currency exchange rates benefited sales
by 4 percent.
    In North America, sales of consumer tissue products decreased 1 percent
in the second quarter, as an increase in net selling prices of about 5 percent
was more than offset by a 6 percent decline in sales volumes.  The improvement
in selling prices was due mainly to price increases for bathroom tissue and
paper towels implemented during the first quarter in the U.S., while the
majority of the decrease in sales volumes was attributable to the paper towel
and private label tissue categories.  In towels, volumes were down following
implementation of price increases during the first quarter in the U.S. and in
comparison to strong growth in the year-ago quarter.  The lower level of
private label sales reflects the company's decision in late 2007 to shed
certain low-margin business to support growth of more profitable products such
as Scott bathroom tissue.  Meanwhile, sales of both Scott and Cottonelle
bathroom tissue registered solid improvement in the quarter, driven primarily
by higher net selling prices.
    In Europe, consumer tissue sales rose about 11 percent versus the second
quarter of 2007.  Currency exchange rates strengthened by an average of 10
percent, accounting for virtually all of the increase.  Sales volumes were
down approximately 3 percent, due mainly to lower sales of Andrex and Scottex
bathroom tissue, as sales softened somewhat following implementation of price
increases.  Overall, net selling prices improved nearly 4 percent.
    Consumer tissue sales in developing and emerging markets rose
approximately 21 percent.  Sales volumes increased approximately 6 percent,
highlighted by strong growth in Latin America and Russia.  Net selling prices
and product mix improved 7 percent and 1 percent, respectively, as the company
has raised prices in response to higher raw materials costs and shifted mix to
more differentiated, value-added products.  Favorable currency effects added 7
percent to sales.
    Sales of K-C Professional (KCP) & other products advanced 10.1 percent
compared with the year-ago quarter.  Net selling prices and product mix
improved by 3 percent and 2 percent, respectively, while sales volumes were
approximately 1 percent higher than the prior year.  Changes in foreign
currency rates increased sales by about 4 percent.  Globally, KCP achieved
double-digit growth in sales of washroom, workplace and safety products.  In
North America and Europe, organic sales rose at a mid-single digit rate,
driven primarily by higher net selling prices and better product mix.  Across
developing and emerging markets, sales were up 22 percent on sales volume
gains of 9 percent, net selling price/mix improvements of 7 percent and
currency benefits of 6 percent.
    Sales of health care products increased 3.2 percent in the second
quarter, reflecting 5 percent growth in sales volumes and favorable currency
effects of 2 percent, partially offset by declines of about 2 percent in both
net selling prices and product mix.  The improvement in sales volumes was
broad-based across most categories and geographic regions, paced by
double-digit growth of medical devices and exam gloves.  The price and mix
declines were mainly attributable to competitive conditions affecting surgical
supplies in North America.
    
    Other second quarter operating results
    
    Operating profit was $650 million in the second quarter of 2008, compared
with $649 million in 2007.  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 decreased 2 percent to $665 million
from $678 million in the prior year.  The decrease was driven by higher
manufacturing costs which, combined with the increase in strategic marketing
spending, exceeded the benefits from top-line growth and cost savings.
Inflation in key manufacturing cost inputs totaled approximately $180 million,
consisting of higher fiber costs, up $70 million versus the second quarter of
2007, more than $55 million for raw materials other than fiber, including
nonwovens and other oil-based materials, about $30 million of higher energy
costs and approximately $25 million in distribution costs.  Cost savings in
the quarter from the company's FORCE (Focused On Reducing Costs Everywhere)
program and strategic cost reduction plan totaled almost $40 million.
    Interest expense for the quarter increased approximately $21 million from
the prior year, mainly as a result of new long-term debt issued to fund the
company's $2.0 billion accelerated share repurchase program in July 2007.
    The company's effective tax rate in the second quarter was 29.9 percent
in 2008 and 20.0 percent in 2007.  Excluding the effects of charges for the
company's strategic cost reduction plan in both years, as well as related
implementation costs and net effects from synthetic fuel partnerships in 2007,
the adjusted effective tax rate for the quarter was 30.1 percent in 2008, up
versus 28.9 percent in 2007, as expected, due to the timing of tax
initiatives.  Synthetic fuel partnership activities provided a benefit of $12
million in the second quarter of 2007.  Synthetic fuel produced by the
partnerships was eligible for tax credits through the end of 2007, at which
time the law giving rise to the tax benefits expired.  The partnerships will
be dissolved during 2008 at no cost to the company.  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 second
quarter increased to about $48 million from approximately $43 million in 2007,
due mainly to higher net income at Kimberly-Clark de Mexico, S.A.B. de C.V.
Results from the company's Mexican affiliate reflected solid volume growth,
higher net selling prices and currency benefits, which more than offset
inflation in raw materials costs and an increase in the effective tax rate.
    Minority owners' share of subsidiaries' net income was approximately $34
million in the second quarter of 2008 compared with about $26 million in the
prior year.  The increase was mainly attributable to minority owners' share of
increased earnings at majority-owned subsidiaries in Asia and the Middle East
and higher returns on the redeemable preferred securities of the company's
consolidated financing subsidiary.
    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 second 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 administrative operations in
North America and Europe.  With savings of $38 million in the second quarter
and $66 million for the year to date, the company is on track to exceed its
target to reduce costs by $75 to $100 million for the full year.
    Employees have been notified about workforce reductions and other actions
at all 23 facilities slated for sale, closure or streamlining as part of the
cost reduction plan.  To date, pretax charges of $859 million (about $599
million after tax) have been incurred.  With the plan's activities nearing
completion, the company is again lowering the total projected cost of the
plan.  Cumulative charges for implementing the plan, through its completion by
the end of this year, are now expected to total $880 to $900 million ($610 to
$620 million after tax), a reduction of up to $10 million, both pretax and
after tax, from the company's previous estimates.
    
    Cash flow and balance sheet
    
    Cash provided by operations in the second quarter increased 16 percent to
$753 million from $652 million in 2007, primarily because a lower level of
cash was invested in primary working capital (accounts receivable and
inventories, less accounts payable) than in the year-ago quarter.  Capital
spending for the quarter was $213 million in 2008 compared with $262 million
in the prior year.  Through six months, capital spending of $434 million is in
line with the company's plan to spend $850 to $950 million this year.  During
the second quarter, the company repurchased approximately 3.5 million shares
of its common stock at a cost of $220 million, bringing year-to-date
repurchases to about 6.6 million shares at a cost of $420 million.  As
previously announced, the company expects to buy back $700 to $800 million of
its common stock in 2008.
    At June 30, 2008, total debt and redeemable preferred securities was $7.4
billion, including the newly consolidated loan obligations described below,
compared with $6.5 billion at the end of 2007.
    
    Consolidation of variable interest entities and extraordinary loss
    
    During the second quarter of 2008, the company restructured contractual
arrangements related to two nonconsolidated financing entities to, among other
things, extend the maturity dates of debt obligations held by the entities. As
a result of these transactions, the company began to consolidate the entities
effective June 30, 2008, as required by FASB Interpretation No. 46 (Revised
December 2003), Consolidation of Variable Interest Entities ("FIN 46R"). 
Accordingly, notes receivable and loan obligations held by the entities with
aggregate fair values totaling $600 million and $612 million, respectively,
have been included in long-term notes receivable and long-term debt on the
consolidated balance sheet.  In addition, because the fair value of the debt
obligations exceeded the fair value of the notes receivable, the company
recorded an extraordinary noncash loss, net of income taxes, of approximately
$8 million, or 2 cents per share, during the second quarter of 2008 pursuant
to the requirements of FIN 46R.
    
    Year-to-date results
    
    For the first six months of 2008, sales of $9.8 billion rose 10.5 percent
from $8.9 billion in the prior year.  Sales volumes increased about 3 percent,
net selling prices were higher by more than 2 percent and product mix was
favorable by 1 percent, resulting in organic sales growth of 6-plus percent,
while favorable currency effects added approximately 4 percent to sales.
Year-to-date operating profit of $1,314 million included charges of more than
$38 million for strategic cost reductions.  Adjusted operating profit was
$1,353 million, up slightly from $1,346 million in 2007.  The benefits of
top-line growth, along with cost savings of about $90 million, were mostly
offset by inflation in key cost components totaling approximately $340 million
and an increase in strategic marketing spending of more than $45 million.
Through six months, diluted net income per share in 2008 was $2.04 compared
with $1.99 in 2007.  Adjusted earnings per share increased 2 percent to $2.11
in 2008 from $2.07 in 2007.  Those amounts are adjusted for charges related to
strategic cost reductions in both years, related incremental implementation
costs in 2007 and the extraordinary loss in 2008.
    
    Outlook
    
    As previously announced on July 14, 2008 and based on the planning
assumptions outlined on that date, the company expects that adjusted earnings
per share in 2008 will be in a range of $0.98 to $1.03 for the third quarter
and in a range of $4.20 to $4.30 for the full year.
    
    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) an
after-tax extraordinary loss related to the restructuring of certain
contractual arrangements, and (iv) the net effect of the company's investment
in synthetic fuel partnerships 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 excludes these implementation
        costs from our earnings from ongoing operations for purposes of
        evaluating the performance of our business units and their managers
        and excludes these costs when making decisions to allocate resources
        among its business units.
    --  Extraordinary loss.  In June 2008, the company restructured
        contractual arrangements of two financing entities, which resulted in
        the consolidation of these two entities.  As a result of the
        consolidation, notes receivable and loan obligations held by these
        entities with aggregate fair values of $600 million and $612 million,
        respectively, have been included in long-term notes receivable and
        long-term debt on the company's consolidated balance sheet.  Because
        the fair value of the loans exceeded the fair value of the notes
        receivable, the company recorded an after-tax extraordinary loss of
        approximately $8 million on its income statement for the period ended
        June 30, 2008, as required by FIN 46R.  Management does not consider
        this loss to be part of our earnings from ongoing operations for
        purposes of evaluating the performance of its business units and their
        managers and excludes this loss when making decisions to allocate
        resources among its business units.
    --  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 and related implementation costs, as well as net
        effects from the company's investment in synthetic fuel partnerships.
        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. (CDT) 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 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, 2007
entitled "Risk Factors."



    
                          KIMBERLY-CLARK CORPORATION
                        CONSOLIDATED INCOME STATEMENT
                            PERIODS ENDED JUNE 30
               (Millions of dollars, except per share amounts)
    

    
                                                     Three Months
                                                     Ended June 30
                                                    2008       2007    Change
    

    
    Net Sales                                     $5,006.2  $4,502.0   +11.2%
      Cost of products sold                        3,521.7   3,056.0   +15.2%
    

    
    Gross Profit                                   1,484.5   1,446.0    +2.7%
      Marketing, research and general expenses       827.3     797.6    +3.7%
      Other (income) and expense, net                  7.1       (.3)    N.M.
    

    
    Operating Profit                                 650.1     648.7    +0.2%
      Nonoperating  expense                              -     (47.5)    N.M.
      Interest income                                  7.4       7.4       -
      Interest expense                               (72.8)    (51.9)  +40.3%
    

    
    Income Before Income Taxes, Equity Interests
     and Extraordinary Loss                          584.7     556.7    +5.0%
      Provision for income taxes                    (174.6)   (111.5)  +56.6%
    Income Before Equity Interests and
     Extraordinary Loss                              410.1     445.2    -7.9%
      Share of net income of equity companies         48.4      42.8   +13.1%
      Minority owners' share of subsidiaries' net
       income                                        (34.1)    (26.2)  +30.2%
      Extraordinary loss, net of income taxes         (7.7)        -     N.M.
    

    
    Net Income                                      $416.7    $461.8    -9.8%
    

    
    Net Income Per Share Basis - Diluted
    

    
      Before extraordinary loss                      $1.01     $1.00    +1.0%
    

    
      Net Income                                      $.99     $1.00    -1.0%
    

    
    N.M. - Not meaningful
    

    
    Unaudited
    



    
                          KIMBERLY-CLARK CORPORATION
                            PERIODS ENDED JUNE 30
               (Millions of dollars, except per share amounts)
    

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

    
                                                        Three Months
                                                       Ended June 30
                                                   2008              2007
    

    
    Cost of products sold                          $8.7             $10.7
    

    
    Marketing, research and general
     expenses                                       4.9               7.1
    

    
    Other (income) and expense, net                  .9                 -
    

    
    Provision for income taxes                     (5.5)             (7.9)
    

    
    Strategic cost reductions after
     taxes                                          9.0               9.9
    

    
    Minority interest                                 -               (.1)
    

    
    Net Charges                                    $9.0              $9.8
    

    In addition, charges of $11.0 million ($7.1 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 JUNE 30
               (Millions of dollars, except per share amounts)
    

    
                                                      Six Months
                                                     Ended June 30
                                                    2008       2007     Change
    

    
    Net Sales                                     $9,818.9   $8,887.3   +10.5%
      Cost of products sold                        6,878.7    6,089.0   +13.0%
    

    
    Gross Profit                                   2,940.2    2,798.3    +5.1%
      Marketing, research and general expenses     1,625.7    1,530.2    +6.2%
      Other (income) and expense, net                   .3        3.3     N.M.
    

    
    Operating Profit                               1,314.2    1,264.8    +3.9%
      Nonoperating expense                               -      (75.1)    N.M.
      Interest income                                 15.7       14.0   +12.1%
      Interest expense                              (147.5)    (102.8)  +43.5%
    

    
    Income Before Income Taxes, Equity Interests
     and Extraordinary Loss                        1,182.4    1,100.9    +7.4%
      Provision for income taxes                    (339.2)    (223.6)  +51.7%
    Income Before Equity Interests and
     Extraordinary Loss                              843.2      877.3    -3.9%
      Share of net income of equity companies         91.8       87.8    +4.6%
      Minority owners' share of subsidiaries' net
       income                                        (69.7)     (51.3)  +35.9%
      Extraordinary loss, net of income taxes         (7.7)         -     N.M.
    

    
    Net Income                                      $857.6     $913.8    -6.2%
    

    
    Net Income Per Share Basis - Diluted
    

    
      Before extraordinary loss                      $2.06      $1.99    +3.5%
    

    
      Net Income                                     $2.04      $1.99    +2.5%
    

    
    N.M. - Not meaningful
    

    
    Unaudited
    



    
                          KIMBERLY-CLARK CORPORATION
                            PERIODS ENDED JUNE 30
               (Millions of dollars, except per share amounts)
    

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

    
                                                         Six Months
                                                        Ended June 30
                                                    2008             2007
    

    
    Cost of products sold                          $20.5            $52.5
    

    
    Marketing, research and general
     expenses                                       16.2             15.2
    

    
    Other (income) and expense, net                  1.6             (9.3)
    

    
    Provision for income taxes                     (13.2)           (33.5)
    

    
    Strategic cost reductions after
     taxes                                          25.1             24.9
    

    
    Minority interest                                  -              (.1)
    

    
    Net Charges                                    $25.1            $24.8
    

    In addition, charges of $23.2 million ($14.8 million after tax) in 2007
for the related implementation costs are included in marketing, research and
general expenses.

    
    2.  Other Information:
    

    
                                                            Six Months
                                                           Ended June 30
                                                         2008         2007
    

    
    Cash Dividends Declared Per Share                   $1.16        $1.06
    



    
                                                              June 30
    Common Shares (Millions)                             2008         2007
    

    
    Outstanding, as of                                  416.2        455.3
    

    
    Average Diluted for:
      Three Months Ended                                419.9        459.6
      Six Months Ended                                  421.4        459.8
    

    
    Unaudited
    



    
                          KIMBERLY-CLARK CORPORATION
                            PERIODS ENDED JUNE 30
                            (Millions of dollars)
    

    
    Supplemental Financial Information:
    

    
    Preliminary Balance Sheet Data:
                                                       June 30     December 31
                                                         2008          2007
    

    
    Cash and cash equivalents                           $545.8        $472.7
    

    
    Accounts receivable, net                           2,599.0       2,560.6
    

    
    Inventories                                        2,629.8       2,443.8
    

    
    Total assets                                      19,625.5      18,439.7
    

    
    Accounts payable                                   1,751.6       1,768.3
    

    
    Debt payable within one year                       1,348.4       1,097.9
    

    
    Total current liabilities                          5,214.5       4,928.6
    

    
    Long-term debt                                     4,995.5       4,393.9
    

    
    Redeemable preferred securities of
     subsidiary                                        1,011.0       1,004.6
    

    
    Stockholders' equity                               5,603.4       5,223.7
    



    
                                                         Six Months
                                                        Ended June 30
    Preliminary Cash Flow Data:                      2008           2007
    

    
    Cash provided by operations                    $1,196.9      $1,176.0
    

    
    Cash used for investing                         $(436.1)      $(498.4)
    

    
    Cash used for financing                         $(679.3)      $(584.6)
    

    
      Depreciation and amortization                  $400.2        $412.9
    

    
      Capital spending                               $433.6        $544.0
    

    
      Cash dividends paid                            $467.5        $465.8
    

    
    Unaudited
    



    
                          KIMBERLY-CLARK CORPORATION
                            PERIODS ENDED JUNE 30
    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 JUNE 30
                            (Millions of dollars)
    

    
                                Three Months                Six Months
                                Ended June 30              Ended June 30
                           2008     2007    Change    2008      2007    Change
    NET SALES:
    

    
    Personal Care       $2,165.0  $1,881.5  +15.1%  $4,211.1  $3,679.1  +14.5%
    Consumer Tissue      1,689.6   1,568.6   +7.7%   3,396.6   3,161.7   +7.4%
    K-C Professional &
     Other                 839.9     763.0  +10.1%   1,600.8   1,460.4   +9.6%
    Health Care            306.3     296.7   +3.2%     604.2     599.4    +.8%
    

    
    Corporate & Other       23.0       9.0    N.M.      44.8      17.0    N.M.
    

    
    Intersegment Sales     (17.6)    (16.8)   N.M.     (38.6)    (30.3)   N.M.
    

    
    Consolidated        $5,006.2  $4,502.0  +11.2%  $9,818.9  $8,887.3  +10.5%
    

    
    OPERATING PROFIT:
    

    
    Personal Care         $436.4    $393.2  +11.0%    $864.6    $740.4  +16.8%
    Consumer Tissue        130.4     168.9  -22.8%     285.9     376.0  -24.0%
    K-C Professional &
     Other                 110.9     119.9   -7.5%     207.6     228.6   -9.2%
    Health Care             29.8      52.0  -42.7%      76.0     107.6  -29.4%
    

    
    Corporate & Other      (50.3)    (85.6) -41.2%    (119.6)   (184.5) -35.2%
    

    
    Other income and
     (expense), net         (7.1)       .3    N.M.       (.3)     (3.3)   N.M.
    

    
    Consolidated          $650.1    $648.7    +.2%  $1,314.2  $1,264.8   +3.9%
    

    
    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            Six Months
                                        Ended June 30          Ended June 30
                                       2008        2007       2008       2007
    

    
    Corporate & Other                $(13.6)     $(28.8)    $(36.7)    $(90.9)
    

    
    Other income and (expense), net     (.9)          -       (1.6)       9.3
    

    
    N.M. - Not meaningful
    

    
    Unaudited
    



    
                          KIMBERLY-CLARK CORPORATION
                        SELECTED BUSINESS SEGMENT DATA
                            PERIODS ENDED JUNE 30
    

    
    PERCENTAGE CHANGE IN NET SALES VERSUS PRIOR YEAR
    

    
                                          Three Months Ended June 30, 2008
                                                      Net    Mix/
                                     Total   Volume  Price  Other(1)  Currency
    

    
    Consolidated                      11.2        3      3        1          4
    

    
      Personal Care                   15.1        9      2        -          4
    

    
      Consumer Tissue                  7.7       (3)     5        2          4
    

    
      K-C Professional & Other        10.1        1      3        2          4
    

    
      Health Care                      3.2        5     (2)      (2)         2
    


    
                                           Six Months Ended June 30, 2008
                                                      Net    Mix/
                                     Total   Volume  Price  Other(1)  Currency
    

    
    Consolidated                      10.5        3      2        1          4
    

    
      Personal Care                   14.5        8      1        1          4
    

    
      Consumer Tissue                  7.4       (2)     4        1          4
    

    
      K-C Professional & Other         9.6        1      3        2          4
    

    
      Health Care                       .8        2     (2)      (1)         2
    

    
    (1) Mix/Other includes rounding.
    



    
                          KIMBERLY-CLARK CORPORATION
                            PERIODS ENDED JUNE 30
               (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 June 30
                                           2008                 2007
                                                Diluted               Diluted
                                     Income     Earnings   Income     Earnings
                                    (Expense)  Per Share  (Expense)  Per Share
    

    
    Adjusted Earnings                  $433.4     $1.03     $478.7     $1.04
    

    
    Adjustments for:
    

    
      Strategic Cost Reduction charges   (9.0)     (.02)      (9.8)     (.02)
    

    
      Implementation costs                  -         -       (7.1)     (.02)
    

    
      Extraordinary loss                 (7.7)     (.02)         -         -
    

    
    Net Income                         $416.7      $.99     $461.8     $1.00
    


    
                                            Six Months Ended June 30
                                           2008                 2007
                                                Diluted               Diluted
                                     Income     Earnings   Income     Earnings
                                    (Expense)  Per Share  (Expense)  Per Share
    

    
    Adjusted Earnings                  $890.4     $2.11     $953.4     $2.07
    

    
    Adjustments for:
    

    
      Strategic Cost Reduction charges  (25.1)     (.06)     (24.8)     (.05)
    

    
      Implementation costs                  -         -      (14.8)     (.03)
    

    
      Extraordinary loss                 (7.7)     (.02)         -         -
    

    
    Rounding                                -       .01          -         -
    

    
    Net Income                         $857.6     $2.04     $913.8     $1.99
    



    
                          KIMBERLY-CLARK CORPORATION
                            PERIODS ENDED JUNE 30
               (Millions of dollars, except per share amounts)
    

    
    OPERATING PROFIT SUMMARY:
    

    
                                                              Three Months
                                                              Ended June 30
                                                              2008     2007
    

    
    Adjusted Operating Profit                                $664.6   $677.5
    

    
    Adjustments for:
    

    
      Strategic Cost Reduction charges                        (14.5)   (17.8)
    

    
      Implementation costs                                        -    (11.0)
    

    
    Operating Profit                                         $650.1   $648.7
    



    
                                                           Six Months
                                                          Ended June 30
                                                       2008           2007
    

    
    Adjusted Operating Profit                     $  1,352.5       $ 1,346.4
    

    
    Adjustments for:
    

    
      Strategic Cost Reduction charges                 (38.3)          (58.4)
    

    
      Implementation costs                                 -           (23.2)
    

    
    Operating Profit                              $  1,314.2       $ 1,264.8
    



    
                          KIMBERLY-CLARK CORPORATION
                            PERIODS ENDED JUNE 30
                            (Millions of dollars)
    
    Effective Income Tax Rate Reconciliation - Adjustments(1) and Synthetic
Fuel Partnership Activities:

    
                                               Three Months Ended
                                                  June 30, 2008
                                            As                  Excluding
                                         Reported             Adjustments(1)
    

    
    Income Before Income Taxes            $584.7                  $599.2
    

    
    Provision for Income Taxes             174.6                   180.1
    

    
    Effective Income Tax Rate               29.9%
    

    
    Adjusted Effective Income Tax Rate                              30.1%
    



    
                                  Three Months Ended June 30, 2007
                                                           Synthetic Fuels
                                 As       Excluding     Effect of   Excluding
                              Reported  Adjustments(1)  Activities  Activities
    

    
    Income Before Income Taxes  $556.7      $585.5       $(47.5)      $633.0
    

    
    Provision for Income Taxes   111.5       123.3        (59.5)       182.8
    

    
    Net Synthetic Fuel Benefit                            $12.0
    

    
    Effective Income Tax Rate     20.0%
    

    
    Adjusted Effective Income
     Tax Rate                                 21.1%                     28.9%
    

    
    (1)  Charges for Strategic Cost Reductions in 2008 and Strategic Cost
         Reductions and related implementation costs in 2007.
    



    
                          KIMBERLY-CLARK CORPORATION
                            PERIODS ENDED JUNE 30
                            (Millions of dollars)
    
    Effective Income Tax Rate Reconciliation - Adjustments(1) and Synthetic
Fuel Partnership Activities:

    
                                            Six Months Ended
                                              June 30, 2008
    

    
                                             As          Excluding
                                          Reported     Adjustments(1)
    

    
    Income Before Income Taxes           $1,182.4        $1,220.7
    

    
    Provision for Income Taxes              339.2           352.4
    

    
    Effective Income Tax Rate                28.7%
    

    
    Adjusted Effective Income Tax Rate                       28.9%
    



    
                                 Six Months Ended June 30, 2007
                                                            Synthetic Fuels
                                 As      Excluding      Effect of   Excluding
                              Reported  Adjustments(1)  Activities  Activities
    

    
    Income Before Income
     Taxes                    $1,100.9    $1,182.5        $(75.1)    $1,257.6
    

    
    Provision for Income
     Taxes                       223.6       265.5         (94.2)       359.7
    

    
    Net Synthetic Fuel Benefit                             $19.1
    

    
    Effective Income Tax Rate     20.3%
    

    
    Adjusted Effective Income
     Tax Rate                                 22.5%                      28.6%
    

    
    (1)  Charges for Strategic Cost Reductions in 2008 and Strategic Cost
         Reductions and related implementation costs in 2007.
    



    
                          KIMBERLY-CLARK CORPORATION
                            PERIODS ENDED JUNE 30
    

    
    OUTLOOK FOR 2008
    

    
    Estimated Full-Year 2008 Diluted Earnings Per Share:
    

    
    Adjusted Earnings Per Share                              $4.20  - $4.30
    

    
    Adjustments for:
    

    
      Strategic Cost Reductions                               (.11) -  (.09)
    

    
      Extraordinary Loss                                      (.02)    (.02)
    

    
    Earnings Per Share - Diluted                             $4.07  - $4.19
    


    
    Estimated Third Quarter 2008 Diluted Earnings Per Share:
    

    
    Adjusted Earnings Per Share                               $.98  - $1.03
    

    
    Adjustments for:
    

    
      Strategic Cost Reductions                               (.03) -  (.02)
    

    
    Earnings Per Share - Diluted                              $.95  - $1.01

    




For further information:

For further information: investors, Mike Masseth, +1-972-281-1478,
mmasseth@kcc.com, or Paul Alexander, +1-972-281-1440, palexand@kcc.com, or
media, Dave Dickson, +1-972-281-1481, ddickson@kcc.com, all of Kimberly-Clark
Corporation Web Site: http://www.kimberly-clark.com

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