01—Abstract
Summary
Summary of the 10-K filed February 24, 2010. Cited figures are marked; the original filing is the authoritative source.
Kimberly-Clark Corporation's 2009 Form 10-K reports net sales of $19.115 billiona, down from $19.415 billion in 2008, while operating profit rose to $2.825 billion from $2.547 billion and net income attributable to Kimberly-Clark was $1.884 billion, versus $1.690 billion in 2008.
Diluted earnings per share were $4.52b, compared with $4.03 in 2008. Management attributes the sales decline to unfavorable currency effects and lower sales volumes, partly offset by higher net selling prices. Operating profit benefited from higher net selling prices, cost savings of about $240 million and deflation in key cost components of approximately $675 million, partially offset by negative currency effects of about $355 million, severance charges of $128 million and higher pension expense of about $155 million.
Cash provided by operations increased to $3.481 billionc from $2.516 billion, and the ratio of total debt and redeemable securities to capital improved to 53.1 percent from 62.2 percent. During 2009 the company acquired the remaining interest in its Andean subsidiary for $289 million, Jackson Products for approximately $155 million net of cash acquired, and I-Flow for $262 million net of cash acquired, while cutting about 1,600 salaried positions. The filing states that the company resumed share repurchases in 2010 and increased its regular quarterly dividend.
It also notes that a Venezuelan currency devaluation in January 2010 is expected to produce a one-time after-tax charge of $60 million to $90 milliond in the first quarter of 2010. The company's outlook calls for a slow and modest economic recovery in 2010, with expected benefits from sales growth, cost savings and stronger currency exchange rates expected to more than offset inflation in key cost inputs and planned increases in marketing spending.
02—Key points
Key Highlights
- Net sales were $19.115 billion in 2009, down from $19.415 billion in 2008, with currency effects and lower volumes partly offset by higher net selling prices.
- Operating profit rose to $2.825 billion from $2.547 billion, and operating profit as a percent of net sales increased to 14.8 percent from 13.1 percent.
- Net income attributable to Kimberly-Clark was $1.884 billion, versus $1.690 billion in 2008; diluted EPS was $4.52, versus $4.03.
- Cash provided by operations rose to $3.481 billion from $2.516 billion, driven by higher cash earnings and reduced working capital.
- Acquisitions in 2009 included the remaining interest in Colombiana Kimberly Colpapel for $289 million, Jackson Products for about $155 million, and I-Flow for $262 million, net of cash acquired.
- Venezuela: a January 2010 devaluation is expected to create a one-time after-tax charge of $60 million to $90 million in the first quarter of 2010.
- The company resumed share repurchases in 2010 and increased its regular quarterly dividend; dividends declared were $2.40 per share in 2009.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, Kimberly-Clark kept $0.10.
- Revenue$19.11B100.0%
- Cost of revenue−$12.70B66.4%
- Gross profit$6.42B33.6%
- Operating costs−$3.60B18.8%
- Operating income$2.83B14.8%
- Interest, other & tax−$941.0M4.9%
- Net income$1.88B9.9%
Where FY2009 revenue went
$19.11B- Cost of revenue: $12.70B, 66% of revenue
- Other operating costs: $3.29B, 17% of revenue
- Net income: $1.88B, 9.9% of revenue
- R&D: $301.0M, 1.6% of revenue
- Interest, other & tax: $941.0M, 4.9% of revenue
Kept 9.9% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 24, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $19.11B$19.41B | −1.5% |
| Cost of Revenue | $12.70B$13.56B | −6.4% |
| Gross Profit | $6.42B$5.86B | +9.6% |
| R&D Expenses | $301.00M$297.00M | +1.3% |
| Operating Income | $2.83B$2.55B | +10.9% |
| Interest Expense | $275.00M$304.00M | −9.5% |
| Net Income | $1.88B$1.69B | +11.5% |
| EPS (Basic) | $4.53$4.04 | +12.1% |
| EPS (Diluted) | $4.52$4.03 | +12.2% |
| Shares Outstanding (Basic) | 416.10M418.50M | −0.6% |
| Shares Outstanding (Diluted) | 416.80M419.60M | −0.7% |
05—Questions
Frequently Asked Questions
How did Kimberly-Clark's profitability change in 2009?
Operating profit increased 10.9 percent to $2.825 billion, and net income attributable to Kimberly-Clark rose to $1.884 billion from $1.690 billion. The filing attributes the improvement to higher net selling prices, cost savings and deflation in key cost components, partly offset by unfavorable currency effects, severance charges and higher pension expense.
What drove the decline in net sales?
Net sales decreased 1.5 percent to $19.115 billion. The filing attributes the decline to unfavorable currency effects and lower sales volumes, which were partially offset by higher net selling prices.
What is the company's exposure to Venezuela?
The filing states that Venezuela represented about 3 percent of 2009 consolidated net sales and 1 percent of consolidated operating profit. Following the January 2010 devaluation, the company expects a one-time after-tax charge of $60 million to $90 million in the first quarter of 2010, and it estimates the ongoing effect will not be material to 2010 net income.
What did the company say about its 2010 outlook and capital returns?
The company is planning for a slow and modest economic recovery in 2010 and expects sales growth, cost savings and stronger currency rates to more than offset input cost inflation and higher marketing spending. It has resumed share repurchases in 2010 and increased its regular quarterly dividend. At year-end 2009, 32 million shares remained under its existing repurchase authorization.
How much debt does the company carry and how is its balance sheet positioned?
Total debt and redeemable securities was $6.5 billion at December 31, 2009, compared with $7.0 billion a year earlier. The ratio of total debt and redeemable securities to capital improved to 53.1 percent from 62.2 percent. The company had a $1.33 billion revolving credit facility scheduled to expire in September 2012, with no borrowings under it in 2009.
06—Continue