01—Abstract
Summary
Summary of the 10-K filed March 18, 2002. Cited figures are marked; the original filing is the authoritative source.
Kimberly-Clark Corporation's 2001 Form 10-K reports net sales of $14.52 billiona, up from $13.98 billion in 2000, with net income of $1.61 billion, or $3.02 per diluted share, down from $1.80 billion, or $3.31 per diluted share, in 2000.
Operating profit fell to $2.34 billionb from $2.63 billion, and the filing attributes $212.9 million of unusual charges in 2001, including $43.2 million of arbitration settlements, a $52.6 million North American mill closing and write-off charge, and a $32.5 million Latin American asset plan charge. Excluding unusual items, earnings were $3.27 per diluted share in 2001 compared with $3.32 in 2000. The company reorganized into three segments (Personal Care, Consumer Tissue, and Business-to-Business) and reported that Personal Care was the largest by sales at $5.68 billion.
Cash provided by operations was $2.25 billionc, capital spending was $1.10 billion, and the company repurchased 15.0 million shares for about $900 million. Total debt and preferred securities reached $4.2 billion, and the net debt and preferred securities ratio was 38.9 percent, which the filing states is within its targeted range of 30 to 40 percent. Management expects volume gains in the mid-single digits in 2002 and notes that the EITF 00-25 and 00-14 reclassifications will reduce reported net sales by approximately $1 billion for 2001 without changing reported earnings.
The filing also discloses ongoing litigation, including about 300 product liability suits against Safeskin, securities actions related to Safeskin, and a series of disputes with Mobile Energy Services Company arising from the Mobile pulp mill closure, along with asbestos-related suits. Management states that none of the legal proceedings is expected to have a material adverse effect on the company.
02—Key points
Key Highlights
- Net sales rose to $14,524.4 million in 2001 from $13,982.0 million in 2000, and the filing states that volumes advanced over 4 percent.
- Diluted EPS was $3.02 in 2001 versus $3.31 in 2000, with unusual items totaling $212.9 million pre-tax, or $.25 per share.
- Operating profit declined to $2,338.2 million from $2,633.8 million, while operating profit before unusual items was $2,551.1 million.
- Cash provided by operations was $2,253.8 million, and capital spending was $1,099.5 million.
- The company repurchased 15.0 million shares for about $900 million in 2001 and had 21.5 million shares remaining under its authorization.
- Net debt and preferred securities to capital was 38.9 percent, within the company's targeted range of 30 to 40 percent.
- Total stockholders' equity was $5,646.9 million, and total assets were $15,007.6 million at December 31, 2001.
03—Questions
Frequently Asked Questions
How did Kimberly-Clark perform financially in 2001?
Net sales grew 3.9 percent to $14.52 billion, but net income fell to $1.61 billion, or $3.02 per diluted share, from $1.80 billion, or $3.31 per diluted share, in 2000. The decline reflects $212.9 million of unusual charges recorded in 2001 and lower operating profit.
What were the main unusual charges in 2001?
The filing lists North American mill closing and other write-offs of $52.6 million, a Latin American asset plan of $32.5 million, business improvement programs of $55.5 million, business integration costs of $29.1 million, and arbitration settlements of $43.2 million related to the Mobile pulp mill dispute.
How is the company's debt position described?
Total debt and preferred securities were $4.2 billion at December 31, 2001, and the net debt and preferred securities ratio was 38.9 percent, which the filing says is within the company's targeted range of 30 to 40 percent. The company had $1.475 billion of syndicated revolving credit facilities, all unused at year-end, and its long-term debt carried a Double-A rating.
What is the company's outlook for 2002?
Management expects to drive sales growth with volume gains in the mid-single digits in 2002. It expects the impact of exchange rates on earnings to be far less onerous than in 2001, and it expects to benefit from improving conditions in North American business-to-business operations, while noting that economic conditions in Argentina and Brazil remain uncertain.
Will the new accounting rules change reported results?
The EITF 00-25 and 00-14 reclassifications will reduce reported net sales by approximately $1 billion for 2001, and the filing states that adoption will not change reported earnings. Under SFAS 142, eliminating goodwill amortization would have increased 2001 net income by approximately $.18 per share.
04—Continue