Kimberly-Clark Announces Third Quarter 2007 Results



    
    3Q Net Sales Climbed Nearly 10 Percent to a Record $4.6 Billion in 2007;
    GAAP-Basis EPS Were $1.04 vs. $0.79 in 2006

    Adjusted EPS Increased 8 Percent to $1.07, Slightly Above Previous
    Expectations

    Company Now Anticipates Adjusted EPS of $4.23 to $4.25 for 2007, Toward
    High End of Previous Guidance Range of $4.20 to $4.25
    

    DALLAS, Oct. 22 /CNW/ -- Kimberly-Clark Corporation (NYSE:   KMB) today
reported that net sales in the third quarter of 2007 increased 9.7 percent to
$4.6 billion, setting a new quarterly record.  The improvement was highlighted
by excellent volume gains for many of the company's well-known Personal Care,
Consumer Tissue and K-C Professional brands and a twelfth consecutive quarter
of double-digit sales expansion in developing and emerging markets.  Overall,
organic sales growth totaled 7 percent and changes in currency exchange rates
also benefited sales by about 3 percent.
    Diluted net income per share was $1.04 compared with 79 cents in the
prior year.  Adjusted earnings in the third quarter of 2007 were $1.07 per
share, up more than 8 percent from 99 cents per share in 2006 and slightly
above the company's previous guidance range of $1.04 to $1.06 per share.  The
higher sales, along with continued success in reducing costs, enabled the
company to fund a $10 million increase in strategic marketing spending and
deliver a 6 percent increase in adjusted operating profit for the quarter
despite approximately $70 million of cost inflation.  A lower share count,
partially offset by a related increase in interest expense, also contributed
to the bottom-line improvement 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 current quarter is a gain on
settlement of litigation related to prior years' operations in Latin America.
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, "I'm encouraged
by the progress we have made again this quarter under our Global Business
Plan.  We're focused on driving our targeted growth initiatives and
continually improving our capabilities and cost effectiveness.  As a result,
we have generated better-than-expected top-line growth and a solid improvement
in adjusted operating profit at a time when cost inflation has pressured our
margins.  Overall, our teams are doing a great job of delivering on our
bottom-line commitments in the short-term while at the same time making the
necessary changes to further strengthen our competitive position and prospects
for long-term sustainable growth."
    
    Review of third quarter sales
    
    The growth in third quarter sales of nearly 10 percent was driven by a 5
percent increase in sales volumes, along with improved net selling prices and
product mix, each approximately 1 percent better than the prior year.  As
noted above, stronger foreign currencies also added about 3 percent to sales.
    Sales of personal care products advanced 12.0 percent in the third
quarter, highlighted by sales volume growth of approximately 8 percent.
Product mix improved 1 percent, while currency effects added more than 3
percent to sales.
    Personal care sales in North America increased about 8 percent compared
with the third quarter of 2006, with higher sales volumes accounting for
almost all of the increase.  Net selling prices rose 1 percent, offset by a 1
percent decline in product mix.  Product innovations spurred broad-based
volume growth, with a double-digit gain for Huggies baby wipes, high single-
digit growth for Huggies diapers and mid-single digit increases for the
company's child care and incontinence care brands.  Child care volumes
benefited from the late-quarter introduction of GoodNites Sleep Boxers and
Sleep Shorts, a unique, new offering in the youth pants category.  Meanwhile,
sales volumes of Kotex feminine care products were even with the year-ago
quarter.  In Europe, personal care sales also were up 8 percent in the
quarter, due primarily to favorable currency effects of 8 percent.  Sales
volumes and product mix both improved 1 percent, offset by a 2 percent decline
in net selling prices.  The volume gain reflects higher sales of Huggies
diapers and baby wipes across the region, even though timing of promotional
activities resulted in a 3 percent decline in sales volumes of Huggies diapers
in the four core markets - U.K., France, Italy and Spain.  In developing and
emerging markets (D&E), personal care sales expanded more than 20 percent for
the second straight quarter, boosted by a 12 percent increase in sales
volumes, favorable product mix of 3 percent and currency benefits of about 6
percent.  All four D&E regions posted double-digit volume gains, with
particular strength throughout most of Latin America and in South Korea, China
and Russia.
    Sales of consumer tissue products increased 10.5 percent versus the third
quarter of 2006, benefiting from higher sales volumes, up 4 percent, along
with improved net selling prices and foreign currency effects, each
approximately 3 percent better than the prior year.
    In North America, sales of consumer tissue products climbed nearly 11
percent in the third quarter, driven primarily by sales volume growth of more
than 7 percent and an increase in net selling prices of about 3 percent.
Product improvements for Kleenex facial tissue, Scott bathroom tissue and Viva
paper towels, backed by a stepped-up level of advertising, helped all three
brands achieve double-digit volume gains in the quarter.  Meanwhile, sales
volumes for Cottonelle bathroom tissue and Scott towels were similar to last
year.  In Europe, consumer tissue sales rose about 8 percent.  Favorable
currencies accounted for most of the increase, as the Euro and the U.K. pound
strengthened by an average of 7 percent.  Sales volumes were up 2 percent, on
higher sales of Andrex bathroom tissue and Kleenex facial tissue, partially
offset by a 1 percent decrease in net selling prices.  Consumer tissue sales
in developing and emerging markets increased more than 11 percent, mainly
attributable to higher net selling prices and currency effects, both of which
benefited sales by approximately 6 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 & other products improved 8.8 percent compared
with the year-ago quarter.  Sales volumes increased more than 4 percent, net
selling prices and product mix were both about 1 percent better and currency
effects added 3 percent to sales.  The higher volumes reflect mid-single digit
gains in North America, led by the Kleenex, Scott and Cottonelle washroom
brands and Kimtech and WypAll wiper products, as well as continued double-
digit growth in Latin America.
    Sales of health care products were down 5.2 percent in the third quarter.
Sales volumes were approximately 9 percent lower, partially offset by improved
product mix of 3 percent and currency benefits of 1 percent.  The decrease in
sales volumes was primarily attributable to the company's decision in the
second half of last year to exit the latex exam glove business, along with a
higher level of sales of face masks in the year-ago quarter primarily due to
avian flu preparedness.  In the exam glove category, the company has
transitioned many customers and users from latex to its higher-margin,
clinically-preferred nitrile gloves.  Sales growth of these products, although
strong, has not yet compensated for the drop-off in sales of latex gloves, due
in part to supply constraints earlier in the year and competitive market
conditions.  As a result, overall sales of exam gloves declined more than 20
percent in the third quarter.  In other areas of the business, third quarter
sales of medical devices, particularly Ballard respiratory catheters,
generated solid improvement.
    The company believes health care sales comparisons will show some
sequential improvement in the fourth quarter, given projected growth in demand
for nitrile exam gloves and a sharp decline in sales of latex gloves in the
year-ago period.
    
    Other third quarter operating results
    
    Operating profit was $683 million in the third quarter of 2007, compared
with $526 million in 2006.  Excluding net charges totaling about $25 million
for the company's strategic cost reduction plan and related implementation
costs, as well as the litigation settlement gain of more than $16 million in
2007, adjusted operating profit for the quarter increased approximately 6
percent to $691 million from $650 million in the prior year.  Top-line growth,
along with FORCE (Focused On Reducing Costs Everywhere) cost savings of about
$40 million and strategic cost reductions of $27 million enabled the company
to more than offset approximately $70 million of cost inflation.  The
inflationary increases were driven primarily by higher fiber costs, up nearly
$50 million versus the third quarter of 2006, and about $25 million for raw
materials other than fiber, including nonwovens and other oil-based materials,
partially offset by lower energy costs.  Marketing, research and general
expenses in the third 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 $22 million from
the prior year, mainly as a result of new long-term debt issued in late July
to fund the company's previously announced accelerated share repurchase
program.
    The company's effective tax rate in the third quarter was 27.6 percent in
2007 and 24.9 percent in 2006.  Excluding the effects of charges for the
company's strategic cost reduction plan, related implementation costs and the
litigation settlement gain, as well as net benefits from synthetic fuel
partnerships in both years, the adjusted effective tax rate for the quarter
was 27.6 percent in 2007 compared with 28.1 percent in 2006.  The net benefit
from synthetic fuel partnership activities was $1 million in the third quarter
of 2007, down from approximately $5 million in the prior year.  The net
benefit 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.
    Kimberly-Clark's share of net income of equity companies in the third
quarter was about $39 million compared with nearly $43 million in 2006,
primarily reflecting a decline in net income at Kimberly-Clark de Mexico,
S.A.B. de C.V. due to the absence of earnings from pulp and paper operations
that were sold late last year.
    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 will
allow for investment in targeted growth opportunities and in key capabilities,
including innovation, marketing and customer development.
    During the third quarter, the company continued to successfully execute
planned cost reduction activities, the most significant of which involved the
consolidation of infant and child care operations in North America and
streamlining of administrative operations in North America and Europe.  With
year-to-date savings totaling $76 million, the company is on track to meet its
target to save $75 to $100 million for the full year.
    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 $794
million (about $558 million after tax), or more than 85 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
$875 to $925 million ($615 to $650 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 third quarter decreased to $585
million from $648 million in 2006, primarily as a result of higher levels of
working capital compared with the year-ago quarter, which more than offset an
increase in cash earnings.  Capital spending for the quarter was $233 million
in 2007 compared with $240 million in the prior year.  The company expects
capital spending for the full year will be toward the high end of its targeted
spending range of $900 million to $1 billion.
    During the third quarter, the company repurchased approximately 33.0
million shares of its common stock at a cost of more than $2.2 billion,
including the purchase of 29.6 million shares on July 24 under an accelerated
share repurchase agreement (ASR) with Bank of America for an initial payment
of $2.0 billion.  Year-to-date, the company has spent more than $2.5 billion
to repurchase about 37.3 million shares of Kimberly-Clark stock.  The company
reaffirmed its commitment to repurchase $2.8 billion of its common stock in
2007.
    At September 30, 2007, total debt and preferred securities was $6.6
billion compared with $4.4 billion at the end of 2006.  In late July, the
company issued $2.1 billion of long-term debt at an average interest rate of
approximately 6.2 percent, principally to finance the ASR.
    
    Year-to-date results
    
    For the first nine months of 2007, sales of $13.5 billion were up 9
percent from $12.4 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 $1,948 million compared with
$1,491 million in 2006.  Adjusted operating profit, which excludes charges
related to strategic cost reductions in both years and incremental
implementation costs and the gain on settlement of litigation in 2007,
increased approximately 7 percent to $2,038 million in 2007 from $1,913
million in the prior year.  The benefits of top-line growth, along with cost
savings of about $205 million, more than offset inflation in key cost
components totaling approximately $235 million and a $40 million increase in
strategic marketing spending.  Through nine months, diluted net income per
share in 2007 was $3.03 compared with $2.21 in 2006.  Adjusted earnings per
share increased more than 9 percent to $3.14 in 2007 from $2.87 in 2006.
    
    Outlook
    
    Commenting on the outlook, Falk said, "The underlying strength of our
business results through the first nine months gives us confidence that we
will continue to execute our Global Business Plan well over the balance of the
year.  We expect top-line momentum will remain positive, paced by continued
strong performance in developing and emerging markets and success of our other
targeted growth initiatives, particularly in Personal Care and K-C
Professional.  We also will continue to drive costs out of the system through
our FORCE and strategic cost reduction efforts.  These factors, combined with
benefits from our accelerated share repurchase, should enable us to overcome
significant inflationary pressures and deliver another quarter of solid
bottom-line growth.  Meanwhile, our plans incorporate further increases in
spending for strategic marketing to support volume growth and improve brand
equity, as we remain committed to boost spending above the rate of sales
growth this year.  All in all, we expect adjusted earnings per share in the
fourth quarter will be in a range of $1.09 to $1.11 per share, up 6 to 8
percent from $1.03 per share last year.
    "With the anticipated improvement in our fourth quarter performance, we
now expect adjusted earnings per share for the full year of 2007 will be in a
range of $4.23 to $4.25.  This compares with our previous guidance for
adjusted earnings per share of $4.20 to $4.25 and will result in growth of 8
to 9 percent versus $3.90 per share in 2006."
    
    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 S.E.C. 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 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 will incur 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.
     (*)    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 benefits 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 135-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
Competitive Improvement Initiatives, 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 SEPTEMBER 30
               (Millions of dollars, except per share amounts)
    

    
                                         Three Months
                                      Ended September 30
                                     2007            2006          Change
    

    
    Net Sales                      $4,620.6        $4,210.4         +9.7%
     Cost of products sold          3,177.1         2,934.9         +8.3%
    

    
    Gross Profit                    1,443.5         1,275.5        +13.2%
     Marketing, research and
      general expenses                783.7           749.2         +4.6%
     Other (income) and
      expense, net                    (22.9)            (.1)        N.M.
    

    
    Operating Profit                  682.7           526.4        +29.7%
     Nonoperating expense              (6.5)          (17.2)       -62.2%
     Interest income                    9.3             6.8        +36.8%
     Interest expense                 (78.6)          (56.5)       +39.1%
    

    
    Income Before Income Taxes
     and Equity Interests             606.9           459.5        +32.1%
     Provision for income taxes      (167.5)         (114.6)       +46.2%
    Income Before Equity Interests    439.4           344.9        +27.4%
     Share of net income of
      equity companies                 39.1            42.8         -8.6%
     Minority owners' share of
      subsidiaries' net income        (25.4)          (23.5)        +8.1%
    

    Net Income                       $453.1          $364.2        +24.4%

    
    Net Income Per Share Basis
     - Diluted                        $1.04            $.79        +31.6%
    

    
    N.M. - Not meaningful
    Unaudited
    



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED SEPTEMBER 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 September 30
                                                        2007          2006
    Cost of products sold                              $18.9          $80.2
    

    Marketing, research and general expenses             7.8           46.7

    Other (income) and expense, net                     (3.9)          (3.3)

    Provision for income taxes                          (2.5)         (32.4)

    Strategic Cost Reductions after taxes               20.3           91.2

    Minority interest                                      -            (.2)

    
    Net Charges                                        $20.3          $91.0
    
    In addition, charges of $2.0 million ($1.3 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.

    Unaudited



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

    
                                         Nine Months
                                     Ended September 30
                                    2007            2006            Change
    

    
    Net Sales                     $13,507.9       $12,439.7         +8.6%
     Cost of products sold          9,266.1         8,723.5         +6.2%
    

    
    Gross Profit                    4,241.8         3,716.2        +14.1%
     Marketing, research and
      general expenses              2,313.9         2,203.6         +5.0%
     Other (income) and
      expense, net                    (19.6)           21.7          N.M.
    

    
    Operating Profit                1,947.5         1,490.9        +30.6%
     Nonoperating expense             (81.6)          (40.6)         N.M.
     Interest income                   23.3            19.8        +17.7%
     Interest expense                (181.4)         (165.9)        +9.3%
    

    
    Income Before Income Taxes
     and Equity Interests           1,707.8         1,304.2        +30.9%
     Provision for income taxes      (391.1)         (344.9)       +13.4%
    Income Before Equity Interests  1,316.7           959.3        +37.3%
     Share of net income of
      equity companies                126.9           124.7         +1.8%
     Minority owners' share of
      subsidiaries' net income        (76.7)          (67.1)       +14.3%
    

    Net Income                     $1,366.9        $1,016.9        +34.4%

    
    Net Income Per Share Basis
     - Diluted                        $3.03           $2.21        +37.1%
    

    
    N.M. - Not meaningful
    Unaudited
    



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED SEPTEMBER 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:

    
                                                           Nine Months
                                                       Ended September 30
                                                        2007         2006
    Cost of products sold                              $71.4         $302.3
    

    Marketing, research and general expenses            23.0          111.7

    Other (income) and expense, net                    (13.2)           7.6

    Provision for income taxes                         (36.0)        (115.1)

    Strategic Cost Reductions after taxes               45.2          306.5

    Minority interest                                   (0.1)          (1.6)

    
    Net Charges                                        $45.1         $304.9
    
    In addition, charges of $25.2 million ($16.1 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:


    
                                                           Nine Months
                                                       Ended September 30
                                                       2007           2006
    

    Cash Dividends Declared Per Share                  $1.59          $1.47



    
                                                           September 30
    Common Shares (Millions)                            2007          2006
    

    Outstanding, as of                                 423.7          457.7

    
    Average Diluted for:
     Three Months Ended                                436.0          459.8
     Nine Months Ended                                 451.7          460.9
    

    Unaudited



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

    Supplemental Financial Information:

    
    Preliminary Balance Sheet Data:
                                                  September 30    December 31
                                                      2007           2006
    

    Cash and cash equivalents                         $539.6         $360.8

    Accounts receivable, net                         2,516.9        2,336.7

    Inventories                                      2,386.3        2,004.5

    Total assets                                    18,324.3       17,067.0

    Accounts payable                                 1,713.6        1,530.8

    Debt payable within one year                     1,395.9        1,326.4

    Total current liabilities                        5,368.5        5,015.8

    Long-term debt                                   4,379.3        2,276.0

    Preferred securities of subsidiary                 821.5          793.4

    Stockholders' equity                             4,996.9        6,097.4



    
                                                          Nine Months
                                                       Ended September 30
    Preliminary Cash Flow Data:                       2007           2006
    

    Cash provided by operations                     $1,760.7       $1,766.5

    Cash used for investing                          $(716.4)       $(617.1)

    Cash used for financing                          $(854.8)     $(1,113.2)

    Depreciation and amortization                    $626.4         $714.5

    Capital spending                                 $776.8         $639.0

    Cash dividends paid                              $707.7         $659.6

    Unaudited



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED SEPTEMBER 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 and drapes, sterilization wrap, face masks,
exam gloves, and respiratory care and digestive health products as well as
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 SEPTEMBER 30
                            (Millions of dollars)
    

    
                           Three Months                  Nine Months
                        Ended September 30           Ended September 30
                     2007      2006    Change     2007      2006    Change
    NET SALES:
    

    
    Personal
     Care          $1,920.8  $1,714.7  +12.0%   $5,599.9   $5,054.8  +10.8%
    Consumer
     Tissue         1,629.8   1,475.2  +10.5%    4,791.5    4,406.8   +8.7%
    K-C Professional
     & Other          780.5     717.5   +8.8%    2,240.9    2,074.3   +8.0%
    Health Care       292.1     308.2   -5.2%      891.5      926.5   -3.8%
    

    
    Corporate &
     Other             10.5       6.8  +54.4%       27.5       23.5  +17.0%
    

    
    Intersegment
     Sales            (13.1)    (12.0)  +9.2%      (43.4)     (46.2)  -6.1%
    

    Consolidated   $4,620.6  $4,210.4   +9.7%  $13,507.9  $12,439.7   +8.6%

    OPERATING PROFIT:

    
    Personal
     Care            $396.3    $331.6  +19.5%   $1,136.7     $960.2  +18.4%
    Consumer
     Tissue           166.1     180.2   -7.8%      542.1      566.8   -4.4%
    K-C Professional
     & Other          125.1     127.2   -1.7%      353.7      345.6   +2.3%
    Health Care        43.4      51.4  -15.6%      151.0      161.0   -6.2%
    

    
    Corporate &
     Other            (71.1)   (164.1) -56.7%     (255.6)    (521.0) -50.9%
    

    
    Other income and
     (expense), net    22.9        .1    N.M.       19.6     (21.7)    N.M.
    

    Consolidated     $682.7    $526.4  +29.7%   $1,947.5   $1,490.9  +30.6%

    
    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              Nine Months
                             Ended September 30        Ended September 30
                             2007         2006         2007         2006
    Corporate & Other       $(28.7)     $(126.9)     $(119.6)     $(414.0)
    

    
    Other income and
     (expense), net            3.9          3.3         13.2        (7.6)
    

    
    N.M. - Not meaningful
    Unaudited
    



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



    PERCENTAGE CHANGE IN NET SALES VERSUS PRIOR YEAR

    
                                   Three Months Ended September 30, 2007
                                                   Net      Mix/
                              Total     Volume     Price   Other(1) Currency
    

    Consolidated                9.7        5        1        1        3

    Personal Care              12.0        8        -        1        3

    Consumer Tissue            10.5        4        3        -        3

    K-C Professional & Other    8.8        4        1        1        3

    Health Care                (5.2)      (9)       -        3        1



    
                                    Nine Months Ended September 30, 2007
                                                   Net      Mix/
                              Total     Volume     Price   Other(1) Currency
    

    Consolidated                8.6        4        1        1        3

    Personal Care              10.8        7        -        1        3

    Consumer Tissue             8.7        2        3        1        3

    K-C Professional & Other    8.0        4        1        -        3

    Health Care                (3.8)      (6)       -        1        1


    (1) Mix/Other includes rounding.



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED SEPTEMBER 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 September 30
                                     2007                      2006
                                          Diluted                  Diluted
                             Income      Earnings     Income      Earnings
                           (Expense)    Per Share   (Expense)    Per Share
    

    Adjusted Earnings       $464.8        $1.07       $455.2         $.99

    Adjustments for:

    
     Strategic Cost
      Reduction charges      (20.3)        (.05)       (91.0)        (.20)
    

    Implementation costs     (1.3)           -            -            -

    Litigation settlement     9.9          .02            -            -

    Net Income              $453.1        $1.04       $364.2         $.79



    
                                     Nine Months Ended September 30
                                     2007                      2006
                                          Diluted                  Diluted
                             Income      Earnings     Income      Earnings
                           (Expense)    Per Share   (Expense)    Per Share
    

    Adjusted Earnings     $1,418.2        $3.14     $1,321.8        $2.87

    Adjustments for:

    
     Strategic Cost
      Reduction charges      (45.1)        (.10)      (304.9)        (.66)
    

    Implementation costs    (16.1)        (.04)           -            -

    Litigation settlement     9.9          .02            -            -

    Rounding                    -          .01            -            -

    Net Income            $1,366.9        $3.03     $1,016.9        $2.21



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


    OPERATING PROFIT SUMMARY:

    
                                                          Three Months
                                                       Ended September 30
                                                       2007          2006
    

    Adjusted Operating Profit                         $691.1         $650.0

    Adjustments for:

    Strategic Cost Reduction charges                  (22.8)        (123.6)

    Implementation costs                               (2.0)             -

    Litigation settlement                              16.4              -

    Operating Profit                                  $682.7         $526.4



    
                                                         Nine Months
                                                      Ended September 30
                                                      2007          2006
    

    Adjusted Operating Profit                       $2,037.5       $1,912.5

    Adjustments for:

    Strategic Cost Reduction charges                  (81.2)        (421.6)

    Implementation costs                              (25.2)             -

    Litigation settlement                              16.4              -

    Operating Profit                                $1,947.5       $1,490.9



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

    
                              Three Months Ended September 30, 2007
                                                          Synthetic Fuel
                                            Excluding   Effect
                         As    Adjustments Adjustments    of     Excluding
                      Reported     (1)         (1)    Activities Activities
    Income Before
     Income Taxes       $606.9     $(8.4)   $615.3      $(6.5)     $621.8
    


    
    Provision for
     Income Taxes        167.5       3.4     164.1       (7.7)      171.8
    

    
    Net Synthetic
     Fuel Benefit                                        $1.2
    

    
    Effective Income
     Tax Rate            27.6%
    

    
    Adjusted Effective
     Income Tax Rate                         26.7%                  27.6%
    



    
                               Three Months Ended September 30, 2006
                                                         Synthetic Fuel
                                            Excluding   Effect
                         As    Adjustments Adjustments    of     Excluding
                      Reported     (1)         (1)    Activities Activities
    

    
    Income Before
     Income Taxes       $459.5   $(123.6)   $583.1     $(17.2)     $600.3
    

    
    Provision for
     Income Taxes        114.6     (32.4)    147.0      (21.7)      168.7
    

    
    Net Synthetic
     Fuel Benefit                                        $4.5
    

    
    Effective Income
     Tax Rate            24.9%
    

    
    Adjusted Effective
     Income Tax Rate                         25.2%                  28.1%
    


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



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

    
                                Nine Months Ended September 30, 2007
                                                          Synthetic Fuel
                                            Excluding   Effect
                         As    Adjustments Adjustments    of     Excluding
                      Reported     (1)         (1)    Activities Activities
    

    
    Income Before
     Income Taxes     $1,707.8    $(90.0) $1,797.8     $(81.6)   $1,879.4
    

    
    Provision for
     Income Taxes        391.1     (38.6)    429.7     (101.9)      531.6
    

    
    Net Synthetic
     Fuel Benefit                                       $20.3
    

    
    Effective Income
     Tax Rate            22.9%
    

    
    Adjusted Effective
     Income Tax Rate                         23.9%                  28.3%
    



    
                                Nine Months Ended September 30, 2006
                                                          Synthetic Fuel
                                            Excluding   Effect
                         As    Adjustments Adjustments    of     Excluding
                      Reported     (1)         (1)    Activities Activities
    

    
    Income Before
     Income Taxes     $1,304.2   $(421.6) $1,725.8     $(40.6)   $1,766.4
    

    
    Provision for
     Income Taxes        344.9    (115.1)    460.0      (50.4)       510.4
    

    
    Net Synthetic
     Fuel Benefit                                        $9.8
    

    
    Effective Income
     Tax Rate            26.4%
    

    
    Adjusted Effective
     Income Tax Rate                         26.7%                  28.9%
    


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


    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED SEPTEMBER 30
    


    OUTLOOK FOR 2007

    Estimated Full-Year 2007 Diluted Earnings Per Share:

    Adjusted Earnings Per Share                   $4.23   -  $4.25

    Strategic Cost Reductions                      (.15)  -   (.14)

    Implementation costs                           (.04)  -   (.04)

    Litigation settlement                           .02   -    .02

    Earnings Per Share - Diluted                  $4.06   -  $4.09


    Estimated Fourth Quarter 2007 Diluted Earnings Per Share:

    Adjusted Earnings Per Share                   $1.09   -  $1.11

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

    Earnings Per Share - Diluted                  $1.04   -  $1.07




For further information:

For further information: Investor Relations, Mike Masseth, 
+1-972-281-1478, mmasseth@kcc.com, or Paul Alexander, +1-972-281-1440, 
palexander@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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