Kimberly-Clark Announces Third Quarter 2008 Results



    
    Net Sales Rose More Than 8 Percent to $5.0 Billion, With Increases in Each
    Business Segment

    GAAP-Basis EPS Were $0.99 vs. $1.04 in 2007; Adjusted EPS Decreased 5
    Percent to $1.02, in Line With Previous Guidance for the Quarter

    Cash Provided By Operations Increased 13 Percent on Improved Working
    Capital Performance

    Company Updates 2008 Earnings Guidance to Reflect Near-Term Impact of
    Recent Declines in Key Foreign Currency Exchange Rates

    
    DALLAS, Oct. 22 /CNW/ -- Kimberly-Clark Corporation (NYSE:   KMB) today
reported that net sales in the third quarter of 2008 advanced 8.2 percent to
$5.0 billion.  Sales were higher in all four of the company's business
segments, highlighted by continued strong performance in Personal Care and K-C
Professional & Other and double-digit sales growth in developing and emerging
markets.  Organic sales growth totaled almost 6 percent, driven by
improvements in net selling prices and product mix of about 4 percent and 2
percent, respectively, while sales volumes declined less than 1 percent. 
Changes in currency exchange rates benefited sales by less than 3 percent.
    Diluted net income per share in the third quarter of 2008 was $0.99
compared with $1.04 in the prior year.  Adjusted earnings for the quarter were
$1.02 per share versus $1.07 per share in 2007 and in line with the company's
previous guidance range of $.98 to $1.03 per share.  The top-line growth,
along with cost savings, higher net income from equity affiliates and a lower
share count, contributed positively to the current quarter's results; however,
earnings were negatively impacted by inflation in commodity costs totaling
approximately $250 million.  Meanwhile, the company continued to step up its
investment in strategic marketing, increasing spending by $25 million compared
with the third quarter of last year.
    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 and the gain
on a litigation settlement in 2007.  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 third
quarter results show that our focus on improving revenue realization is
beginning to pay off, with higher prices and better product mix.  While this
strategy has dampened volume growth more than we anticipated in the near-term,
I am confident we are doing the right things to strengthen our competitive
position and improve our profitability over the long haul.  I am also proud of
the accomplishments of K-C teams around the world who are striving to overcome
the most challenging cost hurdle the company has ever faced.  Finally, I am
pleased by the continued strength of our cash flow and our balance sheet,
particularly in light of recent developments impacting global financial
markets."
    
    Review of third quarter sales by business segment
    
    Sales of personal care products were 11.7 percent greater than in the
third quarter of 2007.  Sales volumes and net selling prices both increased
about 4 percent, product mix improved more than 1 percent and currency effects
added approximately 3 percent to sales.
    Personal care sales in North America improved about 7 percent versus the
year-ago quarter, reflecting higher net selling prices of 4 percent, along
with sales volume growth and favorable product mix of more than 1 percent
each.  Price increases were implemented for Depend and Poise incontinence and
Kotex feminine care products in the second quarter and for Huggies diapers and
Pull-Ups training pants in both the first and third quarters.  Sales volumes
for Huggies diapers were up slightly, while volumes for the company's child
care, feminine care and incontinence care brands were down low single-digits.
Meanwhile, sales volumes rose at a double-digit rate for Huggies baby wipes.
    In Europe, personal care sales rose approximately 2 percent in the
quarter.  Favorable currency effects increased sales by 9 percent, while net
selling prices overall were unchanged.  Sales volumes decreased nearly 8
percent, driven primarily by lower sales of Huggies diapers in the company's
four core markets of the U.K., France, Italy and Spain, where promotional
activity remained intense.
    In developing and emerging markets, personal care sales climbed almost 20
percent, as the company continued to benefit from strong product and customer
programs in rapidly growing markets.  Sales volumes increased by more than 9
percent, while net selling prices improved about 4 percent and product mix was
better by more than 2 percent.  Stronger foreign currencies positively
impacted sales comparisons by more than 4 percent.  The growth in sales
volumes was broad-based, with particular strength throughout Latin America and
in South Korea, Russia, Turkey and Vietnam.
    Sales of consumer tissue products advanced 5.0 percent in the third
quarter.  Although overall sales volumes decreased 7 percent versus the prior
year, net selling prices and product mix improved by 7 percent and 2 percent,
respectively, and favorable currency exchange rates benefited sales by 3
percent.
    In North America, sales of consumer tissue products decreased 2 percent
in the third quarter, as an increase in net selling prices of about 6 percent
and improved product mix of 1 percent were more than offset by a 9 percent
decline in sales volumes.  The improvement in net selling prices was primarily
attributable to price increases for bathroom tissue and paper towels
implemented during the first and third quarters in the U.S.  List prices for
facial tissue were raised late in the third quarter.  Sales volumes were down
mid-single digits in bathroom tissue and facial tissue and double-digits in
paper towels, primarily as a result of the company's focus on improving
revenue realization.  A portion of the overall volume decline is also due to
the company's decision in late 2007 to shed certain low-margin private label
business.  Although branded bathroom tissue volumes declined, revenue growth
was solid, with particular strength in the mainline Scott 1000 and super
premium Cottonelle Ultra brands.  Meanwhile, sales of Viva and Scott paper
towels have been impacted by high levels of competitive spending and a shift
in the category toward lower-priced, private label products.
    In Europe, consumer tissue sales increased about 7 percent compared with
the third quarter of 2007.  Currency exchange rates strengthened by an average
of more than 6 percent, accounting for virtually all of the increase.  Sales
volumes were down approximately 4 percent, due mainly to lower sales of Andrex
and Scottex bathroom tissue and Kleenex facial tissue in response to higher
prices and a slowdown in category sales, particularly in the U.K.  Net selling
prices improved 4 percent, reflecting list price increases across multiple
markets, partially offset by competitive promotional activity, while product
mix also was better by 1 percent.
    Consumer tissue sales in developing and emerging markets rose
approximately 18 percent.  Net selling prices and product mix increased 12
percent and 4 percent, respectively, as the company has raised prices in
response to higher raw materials costs and improved mix with more
differentiated, value-added products.  Currency gains also benefited sales by
nearly 5 percent.  Although sales volumes grew in a number of key markets,
including Australia, Russia, Israel and Brazil, volumes declined about 3
percent overall, mainly as a result of the company's strategies to drive price
and mix.
    Sales of K-C Professional (KCP) & other products went up 8.0 percent from
the year-ago quarter.  Net selling prices and product mix improved by 4
percent and 2 percent, respectively, while sales volumes were approximately 1
percent below prior year levels.  Changes in foreign currency rates increased
sales by about 3 percent.  Globally, KCP continued to generate double-digit
growth in sales of higher-margin workplace and safety products. In North
America, improvements of 3 percent in both price and mix were partially offset
by a 4 percent reduction in sales volumes.  Sales volumes softened somewhat as
a result of slowing economic growth in combination with the company's
strategies to raise prices and enhance the mix of products sold and in
comparison to strong growth in the year-ago quarter.  In Europe, KCP achieved
20-plus percent sales growth, as innovative product offerings contributed to a
10 percent rise in sales volumes, net selling prices were about 2 percent
higher and favorable currency effects added 9 percent to sales.  Across
developing and emerging markets, sales were up 16 percent on sales volume
gains of 2 percent, net selling price/mix improvements of 10 percent and
currency benefits of 4 percent.
    Sales of health care products increased 3.7 percent in the third quarter,
with 5 percent growth in sales volumes and a 1 percent lift from currency
exchange rates, partially offset by a 2 percent decline in net selling prices.
The improvement in sales volumes was paced by double-digit growth in exam
gloves, while overall sales volumes for both surgical supplies and medical
devices were up at a mid-single digit rate.  The price decline was mainly
attributable to competitive conditions affecting surgical supplies in North
America and Europe.
    
    Other third quarter operating results
    
    Operating profit was $610 million in the third quarter of 2008, compared
with $683 million in 2007.  Excluding net charges for the company's strategic
cost reduction plan in both years and related implementation costs and the
gain on a litigation settlement in 2007, adjusted operating profit for the
quarter decreased 9 percent to $626 million from $691 million in the prior
year.  The decrease was driven by significant inflation in key manufacturing
cost inputs which, combined with the increase in strategic marketing spending,
exceeded the benefits from top-line growth and cost savings.  Cost inflation
for the quarter totaled $250 million, an all-time high, consisting of
approximately $110 million for raw materials other than fiber, primarily
polymer resins and other oil-based materials, more than $60 million in fiber
costs, nearly $50 million of energy costs and about $30 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 $19 million and $28 million, respectively.
    The company's effective tax rate in the third quarter was 28.1 percent in
2008 and 27.6 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, the gain on a litigation settlement and net effects from
synthetic fuel partnerships in 2007, the adjusted effective tax rate for the
quarter was 28.2 percent in 2008, up slightly compared with 27.6 in 2007, as
expected.  Synthetic fuel partnership activities provided a net benefit of $1
million in the third 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 third
quarter increased to about $53 million from approximately $39 million in 2007,
primarily as a result of higher net income at Kimberly-Clark de Mexico, S.A.B.
de C.V. (KCM).  Results at KCM were boosted by double-digit growth in sales
and a favorable income tax settlement, partially offset by cost inflation and
currency losses incurred on approximately $300 million of U.S.
dollar-denominated debt.  The benefit to Kimberly-Clark in the current quarter
from KCM's tax settlement was equivalent to 3 cents per share, while the
negative impact of the currency losses amounted to 1 cent per share.
    Minority owners' share of subsidiaries' net income was approximately $34
million in the third quarter of 2008 compared with about $25 million in the
prior year.  The increase was due mainly to minority owners' share of
increased earnings at majority-owned subsidiaries in Latin America and the
Middle East and higher returns payable on the redeemable preferred securities
issued by the company's consolidated financing subsidiary.
    
    Update on cost savings programs
    
    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.  During the third quarter,
the most significant activities 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.
    The plan will be completed by the end of this year.  Employees at all 23
facilities slated for sale, closure or streamlining as part of the cost
reduction plan have been notified about workforce reductions and other
actions.  To date, pretax charges of $875 million (about $610 million after
tax) have been incurred compared with expected cumulative charges for
implementing the plan of $880 to $900 million ($610 to $620 million after
tax).
    Through the first nine months of 2008, pretax savings of $94 million have
been realized, bringing the cumulative total to approximately $320 million
since the plan's inception.
    Regarding the company's ongoing FORCE program, year-to-date savings of
$43 million are below anticipated levels, primarily as a result of
higher-than-expected manufacturing costs in the second and third quarters.
    With combined strategic cost reduction and FORCE savings of $137 million
for the year-to-date, it is possible the full year total may not reach the
company's target for savings of $200 to $250 million in 2008 from the two
programs.
    
    Cash flow and balance sheet
    
    Cash provided by operations in the third quarter increased 13 percent to
$641 million from $568 million in 2007, as improved working capital
performance compared with the year-ago quarter more than offset a decrease in
cash earnings.  Capital spending for the quarter was $219 million in 2008
compared with $233 million in the prior year.  Through nine months, capital
spending of $652 million is in line with the company's plan to spend $850 to
$950 million this year.  During the third quarter, the company repurchased
approximately 2.2 million shares of its common stock at a cost of $130
million, bringing year-to-date repurchases to about 8.7 million shares at a
cost of $550 million.  To be prudent in the current environment, the company
has reduced its full year target for share repurchases to $600 to $650 million
from its previous range of $700 to $800 million.
    At September 30, 2008, total debt and redeemable preferred securities was
$7.3 billion compared with $7.4 billion at June 30, 2008 and $6.5 billion at
the end of 2007.
    
    Year-to-date results
    
    For the first nine months of 2008, sales of $14.8 billion rose 9.7
percent from $13.5 billion in the prior year.  Sales volumes increased about 2
percent, net selling prices were higher by more than 3 percent and product mix
was favorable by 1 percent, resulting in organic sales growth of 6 percent,
while favorable currency effects added approximately 4 percent to sales.
Year-to-date operating profit of $1,924 million included charges of about $54
million for strategic cost reductions.  Adjusted operating profit was $1,978
million, down approximately 3 percent from $2,038 million in 2007.  The
benefits of top-line growth, along with cost savings of $137 million, were
more than offset by inflation in key cost components totaling approximately
$590 million, an increase in strategic marketing spending of more than $70
million and higher levels of selling and administrative expenses, mainly to
support growth in developing and emerging markets.  Through nine months,
diluted net income per share in 2008 was $3.03, the same as in 2007.  Adjusted
earnings per share decreased slightly to $3.13 in 2008 from $3.14 in 2007.
Those amounts are adjusted for charges related to strategic cost reductions in
both years, related incremental implementation costs and the gain on a
litigation settlement in 2007, as well as an extraordinary loss recorded in
the second quarter of 2008.
    
    Outlook
    
    Commenting on the outlook, Falk said, "The unprecedented volatility in
global commodity, currency and financial markets has resulted in a high level
of uncertainty in the current business environment.  Although this makes it
more challenging to predict our results in the near-term, we will continue to
do the right things for the long-term health of our business and effectively
manage those things we can control.  In short, we will continue to focus on
executing our Global Business Plan strategies.
    "Based on plans in place, we are targeting continued solid organic sales
growth over the balance of the year, driven primarily by higher net selling
prices and improved product mix.  Sales volume growth will likely be
relatively weak due to our focus on revenue realization and areas of economic
weakness.  Nonetheless, we still expect to maintain higher levels of
investment in strategic marketing and customer development.  Given the
significant changes in foreign currency exchange rates over the last month, we
now anticipate currency will be a drag on fourth quarter sales comparisons
instead of a benefit.
    "Meanwhile, the price increases implemented during the third quarter,
along with some benefit from recent commodity cost reductions, should help
drive a sequential improvement in adjusted operating profit in the fourth
quarter versus the third quarter, assuming consumer demand holds up and no
further material changes in input costs and key foreign currencies.  I am
encouraged that commodity costs have recently started to decline.  However, it
could take up to six months before the lower costs are fully realized in our
results, while offsetting currency effects are reflected almost immediately.
In fact, we estimate that the effects of recent changes in currency exchange
rates, including currency translation and transaction losses at K-C de Mexico,
will have an adverse impact on our fourth quarter results by more than 10
cents per share versus our previous plan.
    "All in all, based on what we know today, we expect adjusted earnings per
share in the fourth quarter will be in a range of $1.02 to $1.07, compared
with $1.11 in 2007.  Given the anticipated fourth quarter performance, we
expect adjusted earnings per share for the full year of 2008 will be in a
range of $4.15 to $4.20 versus $4.25 in 2007.  This compares with our previous
guidance for adjusted earnings per share of $4.20 to $4.30."
    
    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 operating 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 or
gains that are used in calculating these non-GAAP financial measures.
    In addition, Kimberly-Clark management believes that investors'
understanding of the company's performance is enhanced by including these non-
GAAP financial measures as a reasonable basis for comparing the company's
ongoing results of operations and for understanding the company's effective
tax rate.  Many investors are interested in understanding the performance of
our businesses by comparing our results from ongoing operations from one
period to the next.  By providing the non-GAAP financial measures, together
with the reconciliations, we believe we are enhancing investors' understanding
of our businesses and our results of operations, as well as assisting
investors in evaluating how well the company is executing the material changes
to our enterprise contemplated by the strategic cost reduction plan.  Also,
many financial analysts who follow our company focus on and publish both
historical results and future projections based on non-GAAP financial
measures.  We believe that it is in the best interests of our investors for us
to provide this information to analysts so that those analysts accurately
report the non-GAAP financial information.
    We calculate adjusted earnings, adjusted earnings per share, adjusted
operating profit and adjusted effective tax rate by excluding from the
comparable GAAP measure (i) charges related to our strategic cost reduction
plan for streamlining the company's operations, (ii) certain incremental
implementation costs relating to our strategic cost reduction plan, (iii) the
gain on a litigation settlement, (iv) an after-tax extraordinary loss related
to the restructuring of certain contractual arrangements, and (v) 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.
    -- 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.
    -- 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,
       were 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, related implementation costs and the litigation
       settlement, 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 SEPTEMBER 30
               (Millions of dollars, except per share amounts)
    

    
                                                    Three Months
                                                 Ended September 30
                                                  2008       2007      Change
    

    
    Net Sales                                   $4,998.2   $4,620.6    +  8.2%
        Cost of products sold                    3,535.0    3,177.1    + 11.3%
    

    
    Gross Profit                                 1,463.2    1,443.5    +  1.4%
        Marketing, research and general expenses   849.0      783.7    +  8.3%
        Other (income) and expense, net              4.7      (22.9)      N.M.
    

    
    Operating Profit                               609.5      682.7    - 10.7%
        Nonoperating expense                           -       (6.5)      N.M.
        Interest income                             14.9        9.3    + 60.2%
        Interest expense                           (75.5)     (78.6)   -  3.9%
    

    
    Income Before Income Taxes and Equity
     Interests                                     548.9      606.9    -  9.6%
        Provision for income taxes                (154.5)    (167.5)   -  7.8%
    Income Before Equity Interests                 394.4      439.4    - 10.2%
        Share of net income of equity companies     52.7       39.1    + 34.8%
        Minority owners' share of subsidiaries'
         net income                                (34.0)     (25.4)   + 33.9%
    

    
    Net Income                                    $413.1     $453.1    -  8.8%
    

    
    Net Income Per Share Basis - Diluted            $.99      $1.04    -  4.8%
    

    
    N.M. - Not meaningful
    



    
    Unaudited
    

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

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

    
                                                            Three Months
                                                         Ended September 30
                                                         2008          2007
    

    
        Cost of products sold                           $11.0         $18.9
    

    
        Marketing, research and general expenses          5.0           7.8
    

    
        Other (income) and expense, net                    .1          (3.9)
    

    
        Provision for income taxes                       (4.7)         (2.5)
    

    
        Strategic cost reductions after taxes            11.4          20.3
    

    
        Minority interest                                 (.1)            -
    

    
        Net Charges                                     $11.3         $20.3
    
    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 for 2007 includes a pre-tax gain of
       $16.4 million ($9.9 million after tax) 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
                                                  2008        2007     Change
    

    
    Net Sales                                  $14,817.1  $13,507.9    +  9.7%
        Cost of products sold                   10,413.7    9,266.1    + 12.4%
    

    
    Gross Profit                                 4,403.4    4,241.8    +  3.8%
        Marketing, research and general expenses 2,474.7    2,313.9    +  6.9%
        Other (income) and expense, net              5.0      (19.6)      N.M.
    

    
    Operating Profit                             1,923.7    1,947.5    -  1.2%
        Nonoperating expense                           -      (81.6)      N.M.
        Interest income                             30.6       23.3    + 31.3%
        Interest expense                          (223.0)    (181.4)   + 22.9%
    

    
    Income Before Income Taxes, Equity Interests
     and Extraordinary Loss                      1,731.3    1,707.8    +  1.4%
        Provision for income taxes                (493.7)    (391.1)   + 26.2%
    Income Before Equity Interests and
     Extraordinary Loss                          1,237.6    1,316.7    -  6.0%
        Share of net income of equity companies    144.5      126.9    + 13.9%
        Minority owners' share of subsidiaries'
         net income                               (103.7)     (76.7)   + 35.2%
    

    
        Extraordinary loss, net of income taxes     (7.7)         -       N.M.
    

    
    Net Income                                  $1,270.7   $1,366.9    -  7.0%
    

    
    Net Income Per Share Basis - Diluted
    

    
        Before extraordinary loss                  $3.05      $3.03    +  0.7%
    

    
        Net Income                                 $3.03      $3.03         -
    
    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
                                                         2008          2007
        Cost of products sold                           $31.5         $71.4
    

    
        Marketing, research and general expenses         21.2          23.0
    

    
        Other (income) and expense, net                   1.7         (13.2)
    

    
        Provision for income taxes                      (17.9)        (36.0)
    

    
        Strategic cost reductions after taxes            36.5          45.2
    

    
        Minority interest                                 (.1)          (.1)
    

    
        Net Charges                                     $36.4         $45.1
    
    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 for 2007 includes a pre-tax gain of
       $16.4 million ($9.9 million after tax) for a litigation settlement.
    

    
    3. Other Information:
    


    
                                                            Nine Months
                                                        Ended September 30
                                                         2008        2007
        Cash Dividends Declared Per Share               $1.74        $1.59
    


    
                                                           September 30
        Common Shares (Millions)                         2008         2007
    

    
        Outstanding, as of                              414.7        423.7
    

    
        Average Diluted for:
    

    
            Three Months Ended                          416.8        436.0
    

    
            Nine Months Ended                           419.7        451.7
    



    
    Unaudited
    

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

    
    Supplemental Financial Information:
    

    
    Preliminary Balance Sheet Data:
                                                   September 30    December 31
                                                      2008            2007
    

    
    Cash and cash equivalents                         $524.1         $472.7
    

    
    Accounts receivable, net                         2,478.1        2,560.6
    

    
    Inventories                                      2,569.8        2,443.8
    

    
    Total current assets                             6,042.8        6,096.6
    

    
    Total assets                                    18,701.2       18,439.7
    

    
    Accounts payable                                 1,742.6        1,768.3
    

    
    Debt payable within one year                     1,870.9        1,097.9
    

    
    Total current liabilities                        5,655.5        4,928.6
    

    
    Long-term debt                                   4,369.5        4,393.9
    

    
    Redeemable preferred securities of subsidiary    1,011.0        1,004.6
    

    
    Stockholders' equity                             4,995.0        5,223.7
    


    
                                                          Nine Months
                                                       Ended September 30
    Preliminary Cash Flow Data:                        2008          2007
    

    
    Cash provided by operations                     $1,837.8       $1,743.6
    

    
    Cash used for investing                          $(635.5)       $(716.4)
    

    
    Cash used for financing                        $(1,122.4)       $(854.7)
    

    
        Depreciation and amortization                 $595.5         $626.4
    

    
        Capital spending                              $652.4         $776.8
    

    
        Cash dividends paid                           $709.4         $707.7
    



    
    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, 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 SEPTEMBER 30
                            (Millions of dollars)
    

    
                               Three Months                 Nine Months
                            Ended September 30          Ended September 30
                         2008      2007     Change    2008      2007    Change
    NET SALES:
    

    
    Personal Care      $2,146.4  $1,920.8  +11.7%   $6,357.5  $5,599.9  +13.5%
    Consumer Tissue     1,711.4   1,629.8  + 5.0%    5,108.0   4,791.5  + 6.6%
    K-C Professional
     & Other              842.8     780.5  + 8.0%    2,443.6   2,240.9  + 9.0%
    Health Care           302.8     292.1  + 3.7%      907.0     891.5  + 1.7%
    

    
    Corporate & Other      16.7      10.5    N.M.       61.5      27.5    N.M.
    

    
    Intersegment Sales    (21.9)    (13.1)   N.M.      (60.5)    (43.4)   N.M.
    

    
    Consolidated       $4,998.2  $4,620.6  + 8.2%  $14,817.1 $13,507.9  + 9.7%
    

    
    OPERATING PROFIT:
    

    
    Personal Care        $404.4    $396.3  + 2.0%   $1,269.0  $1,136.7  +11.6%
    Consumer Tissue       132.9     166.1  -20.0%      418.8     542.1  -22.7%
    K-C Professional
     & Other              119.5     125.1  - 4.5%      327.1     353.7  - 7.5%
    Health Care            21.9      43.4  -49.5%       97.9     151.0  -35.2%
    

    
    Corporate & Other     (64.5)    (71.1) - 9.3%     (184.1)   (255.6) -28.0%
    

    
    Other income and
     (expense), net        (4.7)     22.9    N.M.       (5.0)     19.6    N.M.
    

    
    Consolidated         $609.5    $682.7  -10.7%   $1,923.7  $1,947.5   -1.2%
    

    
    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
                                          2008      2007       2008      2007
        Corporate & Other               $(16.0)   $(28.7)    $(52.7)  $(119.6)
    

    
        Other income and (expense), net    (.1)      3.9       (1.7)     13.2
    

    
    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, 2008
                                                    Net      Mix/
                                  Total   Volume   Price   Other(1)   Currency
    

    
    Consolidated                   8.2      (1)      4        2          3
    

    
        Personal Care             11.7       4       4        1          3
    

    
        Consumer Tissue            5.0      (7)      7        2          3
    

    
        K-C Professional & Other   8.0      (1)      4        2          3
    

    
        Health Care                3.7       5      (2)       -          1
    



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

    
    Consolidated                   9.7       2       3        1          4
    

    
        Personal Care             13.5       7       2        1          4
    

    
        Consumer Tissue            6.6      (3)      5        1          4
    

    
        K-C Professional & Other   9.0       1       3        1          4
    

    
        Health Care                1.7       3      (2)      (1)         2
    

    
    (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
                                          2008                    2007
                                             Diluted                Diluted
                                  Income     Earnings    Income     Earnings
                                 (Expense)   Per Share  (Expense)   Per Share
    

    
    Adjusted Earnings              $424.4      $1.02      $464.8       $1.07
    

    
    Adjustments for:
    

    
        Strategic Cost Reduction
         charges                    (11.3)      (.03)      (20.3)       (.05)
    

    
        Implementation costs            -          -        (1.3)          -
    

    
        Litigation settlement           -          -         9.9         .02
    

    
    Net Income                     $413.1       $.99      $453.1       $1.04
    



    
                                         Nine Months Ended September 30
                                          2008                    2007
                                             Diluted                Diluted
                                  Income     Earnings    Income     Earnings
                                 (Expense)   Per Share  (Expense)   Per Share
    

    
    Adjusted Earnings            $1,314.8      $3.13    $1,418.2       $3.14
    

    
    Adjustments for:
    

    
        Strategic Cost Reduction
         charges                    (36.4)      (.09)      (45.1)       (.10)
    

    
        Implementation costs            -          -       (16.1)       (.04)
    

    
        Litigation settlement           -          -         9.9         .02
    

    
        Extraordinary loss           (7.7)      (.02)          -           -
    

    
    Rounding                            -        .01           -         .01
    

    
    Net Income                   $1,270.7      $3.03    $1,366.9       $3.03
    



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

    
    OPERATING PROFIT SUMMARY:
    

    
                                                           Three Months
                                                        Ended September 30
                                                        2008          2007
    

    
        Adjusted Operating Profit                      $625.6        $691.1
    

    
        Adjustments for:
    

    
          Strategic Cost Reduction charges              (16.1)        (22.8)
    

    
          Implementation costs                              -          (2.0)
    

    
          Litigation settlement                             -          16.4
    

    
        Operating Profit                               $609.5        $682.7
    



    
                                                           Nine Months
                                                       Ended September 30
                                                       2008          2007
    

    
        Adjusted Operating Profit                    $1,978.1      $2,037.5
    

    
        Adjustments for:
    

    
          Strategic Cost Reduction charges              (54.4)        (81.2)
    

    
          Implementation costs                              -         (25.2)
    

    
          Litigation settlement                             -          16.4
    

    
        Operating Profit                             $1,923.7      $1,947.5
    



    
                          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, 2008
    

    
                                                   As          Excluding
                                                Reported     Adjustments(1)
    

    
    Income Before Income Taxes                   $548.9          $565.0
    

    
    Provision for Income Taxes                    154.5           159.2
    

    
    Effective Income Tax Rate                     28.1%
    

    
    Adjusted Effective Income Tax Rate                            28.2%
    



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

    
    Income Before Income Taxes $606.9      $615.3        $(6.5)       $621.8
    

    
    Provision for Income Taxes  167.5       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%
    

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



    
                          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, 2008
    

    
                                                 As            Excluding
                                              Reported      Adjustments(1)
    

    
    Income Before Income Taxes                $1,731.3         $1,785.7
    

    
    Provision for Income Taxes                   493.7            511.6
    

    
    Effective Income Tax Rate                    28.5%
    

    
    Adjusted Effective Income Tax Rate                            28.6%
    



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

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

    
    Provision for Income Taxes   391.1      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%
    
    (1) Charges for Strategic Cost Reductions in 2008 and Strategic Cost
    
       Reductions and related implementation costs and a litigation settlement
       in 2007.
    



    
                          KIMBERLY-CLARK CORPORATION
                          PERIODS ENDED SEPTEMBER 30
    

    
    OUTLOOK FOR 2008
    

    
    Estimated Full-Year 2008 Diluted Earnings Per Share:
    

    
    Adjusted Earnings Per Share                           $4.15     -   $4.20
    

    
    Adjustments for:
    

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

    
        Extraordinary loss                                 (.02)    -    (.02)
    

    
    Earnings Per Share - Diluted                          $4.02     -   $4.09
    


    
    Estimated Fourth Quarter 2008 Diluted Earnings
     Per Share:
    

    
    Adjusted Earnings Per Share                           $1.02     -   $1.07
    

    
    Adjustments for:
    

    
        Strategic Cost Reductions                          (.02)    -       -
    

    
    Earnings Per Share - Diluted                          $1.00     -   $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,
palexand@kcc.com, or Media Relations, 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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