NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Accounting Policies
Basis of Presentation
The consolidated financial statements present the accounts of Kimberly-Clark Corporation and all subsidiaries in which it has a controlling financial interest as if they were a single economic entity in conformity with accounting principles generally accepted in the United States of America ("GAAP"). All intercompany transactions and accounts are eliminated in consolidation. The terms "Corporation," "Kimberly-Clark," "we," "our," and "us" refer to Kimberly-Clark Corporation and all subsidiaries in which it has a controlling financial interest. Dollar amounts are reported in millions, except per share dollar amounts, unless otherwise noted.
Use of Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Actual results could differ from these estimates, and changes in these estimates are recorded when known. Estimates are used in accounting for, among other things, sales incentives and trade promotion allowances, employee postretirement benefits, and deferred income taxes and potential assessments.
Cash Equivalents
Cash equivalents are short-term investments with an original maturity date of three months or less.
Inventories and Distribution Costs
Most U.S. inventories are valued at the lower of cost, using the Last-In, First-Out ("LIFO") method, or market. The balance of the U.S. inventories and inventories of consolidated operations outside the U.S. are valued at the lower of cost or net realizable value using either the First-In, First-Out ("FIFO") or weighted-average cost methods. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Distribution costs are classified as cost of products sold.
Property and Depreciation
Property, plant and equipment are stated at cost and are depreciated on the straight-line method. Buildings are depreciated over their estimated useful lives, primarily 40 years. Machinery and equipment are depreciated over their estimated useful lives, primarily ranging from 16 to 20 years. Purchases of computer software, including external costs and certain internal costs (including payroll and payroll-related costs of employees) directly associated with developing significant computer software applications for internal use, are capitalized. Computer software costs are amortized on the straight-line method over the estimated useful life of the software, which generally does not exceed 5 years.
Estimated useful lives are periodically reviewed and, when warranted, changes are made to them. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss would be indicated when estimated undiscounted future cash flows from the use and eventual disposition of an asset group, which are identifiable and largely independent of the cash flows of other asset groups, are less than the carrying amount of the asset group. Measurement of an impairment loss would be based on the excess of the carrying amount of the asset group over its fair value. Fair value is measured using discounted cash flows or independent appraisals, as appropriate. When property is sold or retired, the cost of the property and the related accumulated depreciation are removed from the consolidated balance sheet and any gain or loss on the transaction is included in income.
Goodwill and Other Intangible Assets
Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Goodwill is not amortized, but rather is assessed for impairment annually and whenever events and circumstances indicate that impairment may have occurred. Impairment testing compares the reporting unit carrying amount, including goodwill, with its fair value. If the reporting unit carrying amount, including goodwill, exceeds its fair value, a goodwill impairment charge for the excess amount above fair value would be recorded. In our evaluation of goodwill impairment, we have the option to first assess qualitative factors such as macroeconomic, industry and competitive conditions, legal and regulatory environments, historical and
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projected financial performance, significant changes in the reporting unit and the magnitude of excess fair value over carrying amount from the previous quantitative impairment testing. If the qualitative assessment determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative impairment test using discounted cash flows to estimate fair value must be performed. On the other hand, if the qualitative assessment determines that it is more likely than not that the fair value of a reporting unit is more than its carrying value, then further quantitative testing is not required. For 2020, we completed the required annual assessment of goodwill for impairment for all of our reporting units using a qualitative assessment as of the first day of the third quarter, and we determined that it is more likely than not that the fair value is more than the carrying amount for each of our reporting units.
Indefinite-lived intangible assets, other than goodwill, consist of certain brand names related to our acquisition of Softex Indonesia and are tested for impairment annually at the same time as our goodwill impairment assessment and whenever events and circumstances indicate that impairment may have occurred. Our estimate of the fair value of our brand assets is based on a discounted cash flow model and a market-based approach using inputs which include projected revenues from our long-range plan, assumed royalty rates that could be payable if we did not own the brands, and a discount rate.
Intangible assets with finite lives are amortized over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss would be indicated when estimated undiscounted future cash flows from the use of the asset are less than its carrying amount. An impairment loss would be measured as the difference between the fair value (based on discounted future cash flows) and the carrying amount of the asset. Estimated useful lives range from 10 to 20 years for trademarks and 15 to 20 years for certain acquired distributor and customer relationships.
Investments in Equity Companies
Investments in companies which we do not control but over which we have the ability to exercise significant influence and that, in general, are at least 20 percent-owned by us, are stated at cost plus equity in undistributed net income. These investments are evaluated for impairment when warranted. An impairment loss would be recorded whenever a decline in value of an equity investment below its carrying amount is determined to be other than temporary. In judging "other than temporary," we would consider the length of time and extent to which the fair value of the equity company investment has been less than the carrying amount, the near-term and longer-term operating and financial prospects of the equity company, and our longer-term intent of retaining the investment in the equity company.
Revenue Recognition
Sales revenue is recognized at the time of product shipment or delivery, depending on when control passes, to unaffiliated customers, and when all of the following have occurred: a firm sales agreement is in place, pricing is fixed or determinable, and collection is reasonably assured. Sales are reported net of returns, consumer and trade promotions, rebates and freight allowed. Taxes imposed by governmental authorities on our revenue-producing activities with customers, such as sales taxes and value-added taxes, are excluded from net sales.
Sales Incentives and Trade Promotion Allowances
The cost of promotion activities provided to customers is classified as a reduction in sales revenue. In addition, the estimated redemption value of consumer coupons and related expense are recorded when the related revenue from customers is realized. Rebate and promotion accruals are based on estimates of the quantity of customer sales. Promotion accruals also consider estimates of the number of consumer coupons that will be redeemed and timing and costs of activities within the promotional programs.
Advertising Expense
Advertising costs are expensed in the year the related advertisement or campaign is first presented through traditional or digital media. For interim reporting purposes, advertising expenses are charged to operations as a percentage of sales based on estimated sales and related advertising expense for the full year.
Research Expense
Research and development costs are charged to expense as incurred.
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Other Income
Certain amounts not directly associated with the current operations of the business are recorded in Other (income) and expense, net. In the fourth quarter of 2020, we received a favorable legal ruling that resolved certain matters related to prior years’ business taxes in Brazil. These matters involved the revenue base, which included value added taxes, used to calculate and pay social security taxes for the period 2004 to 2014. In the legal ruling, the São Paulo State Court recognized our right to exclude the value added taxes from the revenue base used to calculate those social security taxes. This decision resulted in business tax credits being recognized of $77 that we expect to use by the end of 2024.
In the fourth quarter of 2019, gains of $194 on the sales of manufacturing facilities and associated real estate which were disposed of as part of the restructuring were recorded. See Note 2. Also, in the fourth quarter of 2019, we recognized a gain of $31 on the sale of property associated with a former manufacturing facility that was closed in 2012 as part of a past restructuring.
Foreign Currency Translation
The income statements of foreign operations, other than those in highly inflationary economies, are translated into U.S. dollars at rates of exchange in effect each month. The balance sheets of these operations are translated at period-end exchange rates, and the differences from historical exchange rates are reflected in stockholders' equity as unrealized translation adjustments.
As of July 1, 2018, we elected to adopt highly inflationary accounting for our subsidiaries in Argentina (“K-C Argentina”). The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in Other (income) and expense, net and was not material. As of December 31, 2020, K-C Argentina had a small net peso monetary position. Net sales of K-C Argentina were approximately 1 percent of our consolidated net sales in 2020, 2019 and 2018.
Derivative Instruments and Hedging
Our policies allow the use of derivatives for risk management purposes and prohibit their use for speculation. Our policies also prohibit the use of any leveraged derivative instrument. Consistent with our policies, foreign currency derivative instruments, interest rate swaps and locks, and the majority of commodity hedging contracts are entered into with major financial institutions. At inception, we formally designate certain derivatives as cash flow, fair value or net investment hedges and establish how the effectiveness of these hedges will be assessed and measured. This process links the derivatives to the transactions or financial balances they are hedging. Changes in the fair value of derivatives not designated as hedging instruments are recorded in earnings as they occur. All derivative instruments are recorded as assets or liabilities on the balance sheet at fair value. Changes in the fair value of derivatives are either recorded in the income statement or other comprehensive income, as appropriate. The gain or loss on derivatives designated as fair value hedges and the offsetting loss or gain on the hedged item attributable to the hedged risk are included in income in the period that changes in fair value occur. The gain or loss on derivatives designated as cash flow hedges is included in other comprehensive income in the period that changes in fair value occur, and is reclassified to income in the same period that the hedged item affects income. The gain or loss on derivatives designated as hedges of investments in foreign subsidiaries is recognized in other comprehensive income to offset the change in value of the net investments being hedged. Certain foreign-currency derivative instruments not designated as hedging instruments have been entered into to manage certain non-functional currency denominated monetary assets and liabilities. The gain or loss on these derivatives is included in income in the period that changes in their fair values occur. Cash flows from derivatives are classified within the consolidated statement of cash flows in the same category as the items being hedged. Cash flows from derivatives are classified within Operating Activities, except for derivatives designated as net investment hedges which are classified in Investing Activities. See Note 11 for disclosures about derivative instruments and hedging activities.
Leases
Lease assets and lease liabilities are recognized at the commencement of an arrangement where it is determined at inception that a lease exists. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate generally applicable to the location of the lease asset, unless the implicit rate is readily determinable. Lease assets also include any upfront lease payments made and exclude lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised.
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Variable lease payments are generally expensed as incurred and include certain index-based changes in rent, certain nonlease components, such as maintenance and other services provided by the lessor, and other charges included in the lease. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term.
Certain lease agreements with lease and nonlease components are combined as a single lease component. The depreciable life of lease assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.
Accounting Standards - Adopted During 2020
The Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40). The new guidance reduces complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). We adopted this standard as of January 1, 2020 on a prospective basis. The effects of this standard on our financial position, results of operations and cash flows were not material.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and generally can be applied through December 31, 2022. In January 2021, the FASB issued ASU No. 2021-01 to further clarify the scope of this guidance. The effects of these standards on our financial position, results of operations and cash flows are not expected to be material.
Accounting Standards Issued - Not Adopted as of December 31, 2020
In 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The new guidance simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the tax basis of goodwill after a business combination, and the recognition of deferred tax liabilities for outside basis differences. The new guidance also changes the calculation of the income tax impact of hybrid taxes and the methodology for calculating income taxes in an interim period. We adopted this standard as of January 1, 2021 on either a prospective basis, or through a modified retrospective approach, as required by the standard. There was no cumulative effect adjustment recorded to retained earnings as the amount was not material. The effects of this standard on our financial position, results of operations and cash flows were not material.
Note 2. 2018 Global Restructuring Program
In January 2018, we announced the 2018 Global Restructuring Program to reduce our structural cost base by streamlining and simplifying our manufacturing supply chain and overhead organization. We expect to close or sell approximately 10 manufacturing facilities and expand production capacity at several others. We expect to exit or divest some lower-margin businesses that generate approximately 1 percent of our net sales. The restructuring is expected to impact all of our business segments and our organizations in all major geographies. Workforce reductions are now expected to be in the range of 6,300 to 6,400.
The restructuring is expected to be completed in 2021, with total costs now anticipated to be in the range of $2.0 billion to $2.1 billion pre-tax ($1.5 billion to $1.6 billion after tax). Cash costs are expected to be $1.1 billion to $1.15 billion, primarily related to workforce reductions. Non-cash charges are expected to be $900 to $950 pre-tax and will primarily consist of incremental depreciation, asset write-offs and pension settlement and curtailment charges. Restructuring charges in 2021 are expected to be $180 to $280 pre-tax ($135 to $215 after tax).
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The following net charges were incurred in connection with the 2018 Global Restructuring Program:
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Year Ended December 31
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|
2020
|
|
2019
|
|
2018
|
|
Cost of products sold:
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|
|
|
|
|
|
Charges for workforce reductions
|
$
|
10
|
|
|
$
|
31
|
|
|
$
|
149
|
|
|
Asset impairments
|
17
|
|
|
—
|
|
|
74
|
|
|
Asset write-offs
|
63
|
|
|
54
|
|
|
112
|
|
|
Incremental depreciation
|
94
|
|
|
235
|
|
|
172
|
|
|
Other exit costs
|
99
|
|
|
96
|
|
|
34
|
|
|
Total
|
283
|
|
|
416
|
|
|
541
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|
Marketing, research and general expenses:
|
|
|
|
|
|
|
Charges for workforce reductions
|
13
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|
|
(12)
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|
|
243
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|
|
Other exit costs
|
96
|
|
|
111
|
|
|
137
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Total
|
109
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|
|
99
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|
|
380
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|
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Other (income) and expense, net(a)
|
(9)
|
|
|
(194)
|
|
|
(12)
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|
|
Nonoperating expense(b)
|
36
|
|
|
45
|
|
|
127
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|
|
Total charges
|
419
|
|
|
366
|
|
|
1,036
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Provision for income taxes
|
(94)
|
|
|
(118)
|
|
|
(243)
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|
|
Net charges
|
325
|
|
|
248
|
|
|
793
|
|
Net impact related to equity companies and
noncontrolling interests
|
(2)
|
|
|
—
|
|
|
(10)
|
|
Net charges attributable to Kimberly-Clark
Corporation
|
$
|
323
|
|
|
$
|
248
|
|
|
$
|
783
|
|
(a)Other (income) and expense, net in 2019 was the result of pre-tax gains on the sales of manufacturing facilities and associated real estate which were disposed of as part of the restructuring.
(b)Represents non-cash pension settlement and curtailment charges resulting from restructuring actions, primarily in the U.S., United Kingdom and Canada.
The measurement of the asset impairment charges was based on the excess of the carrying values of the impacted asset groups over their fair values. These fair values were measured by using discounted cash flows expected over the limited time the assets would remain in use or the expected sales value, and as a result, the assets were essentially written off or written down to fair value less costs to sell. The use of discounted cash flows represents a level 3 measure under the fair value hierarchy.
The following summarizes the restructuring liabilities activity:
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2020
|
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2019
|
|
Restructuring liabilities at January 1
|
|
$
|
132
|
|
|
$
|
210
|
|
|
Charges for workforce reductions and other cash exit costs
|
|
210
|
|
|
221
|
|
|
Cash payments
|
|
(249)
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|
|
(302)
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|
Currency and other
|
|
—
|
|
|
3
|
|
|
Restructuring liabilities at December 31
|
|
$
|
93
|
|
|
$
|
132
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|
As of December 31, 2020 and 2019, restructuring liabilities of $73 and $93 are recorded in Accrued expenses and other current liabilities and $20 and $39 are recorded in Other Liabilities, respectively. The impact related to restructuring charges is recorded in Operating working capital and Other Operating Activities, as appropriate, in our consolidated cash flow statement.
Through December 31, 2020, cumulative pre-tax charges for the 2018 Global Restructuring Program were $1.8 billion ($1.4 billion after tax).
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Note 3. Acquisition
On October 1, 2020 (“Acquisition Date”), we acquired Softex Indonesia, a leader in the fast-growing Indonesian personal care market, in an all-cash transaction for approximately $1.2 billion. The transaction price is subject to finalization of working capital and net debt adjustments which resulted in a preliminary purchase price of $1.1 billion as of December 31, 2020 in addition to the assumption of certain indebtedness of Softex Indonesia at closing. This transaction significantly expands our presence in an important developing and emerging market and is a strong strategic fit with our core business. Softex Indonesia generated net sales of approximately $420 in 2019. We financed the transaction through a combination of short-term commercial paper, cash on hand, and the issuance of a $600 bond. During the year ended December 31, 2020, we recorded transaction and integration costs of $32 in Marketing, research and general expenses.
We consolidated Softex Indonesia into our financial statements beginning in the fourth quarter of 2020. We have substantially completed an initial purchase price allocation in which we utilized several generally accepted valuation methodologies to determine the fair value of certain acquired assets. The primary valuation methods included the replacement cost approach, sales comparison approach, discounted cash flow, multi-period excess earnings, relief from royalty and distributor methods. These valuation methodologies are commonly used to value similar tangible and identifiable intangible assets in the Consumer Packaged Goods industry. All of the selected valuation methodologies incorporate unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy in ASC 820, Fair Value Measurements. In connection with these valuation methodologies, we are required to make estimates and assumptions regarding market comparables, revenue growth rates, operating margins, distributor and customer attrition rates, royalty rates, distributor margins and discount rates, which are primarily based on cash flow forecasts, business plans, economic projections, and other information available to market participants.
The total purchase price consideration was allocated to the net assets acquired based upon their respective estimated fair values as follows:
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|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
9
|
|
|
Accounts receivables, net
|
|
97
|
|
|
Inventories
|
|
42
|
|
|
Other current assets
|
|
12
|
|
|
Goodwill
|
|
390
|
|
|
Other Intangible Assets
|
|
757
|
|
|
Property, Plant and Equipment, Net
|
|
196
|
|
|
Other assets
|
|
2
|
|
|
Accrued expenses and other current liabilities
|
|
(109)
|
|
|
Deferred income taxes
|
|
(152)
|
|
|
Other liabilities
|
|
(139)
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|
|
Fair value of net assets acquired
|
|
$
|
1,105
|
|
Acquired intangible assets other than goodwill include certain brand names of $637, which are considered to have indefinite useful lives, and other brand names and distributor and customer relationships of $120, which have estimated useful lives of 15 to 20 years. Goodwill of $390 was allocated to the Personal Care business segment. The goodwill is primarily attributable to future growth opportunities and any intangible assets that did not qualify for separate recognition. While the goodwill is not deductible for local tax purposes, it is treated as an amortizable expense for the U.S. global intangible low-taxed income ("GILTI") computation.
Based on the carrying values of the finite-lived intangible assets as of December 31, 2020, amortization expense for each of the next five years is estimated to be approximately $7.
The preliminary estimates of the fair value of identifiable assets acquired and liabilities assumed are subject to revisions, which may result in adjustments to the preliminary values discussed above. We continue to evaluate potential contingencies that may have existed as of the acquisition date and expect to finalize the purchase price allocation no later than the fourth quarter of 2021.
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The consolidated results of operations for Softex Indonesia are reported primarily in our Personal Care business segment on a one-month lag. As such, Softex Indonesia’s results of operations from the Acquisition Date through November 30, 2020 are included in our consolidated results of operations for the year ended December 31, 2020. The impact of the acquisition on our consolidated results of operations for the year ended December 31, 2020 was not significant.
Pro forma results of operations have not been presented as the impact on our consolidated financial statements is not material.
Note 4. Fair Value Information
The following fair value information is based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels in the hierarchy used to measure fair value are:
Level 1—Unadjusted quoted prices in active markets accessible at the reporting date for identical assets and liabilities.
Level 2—Quoted prices for similar assets or liabilities in active markets. Quoted prices for identical or similar assets and liabilities in markets that are not considered active or financial instruments for which all significant inputs are observable, either directly or indirectly.
Level 3—Prices or valuations that require inputs that are significant to the valuation and are unobservable.
A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
During 2020 and 2019, there were no significant transfers to or from level 3 fair value determinations.
Derivative assets and liabilities are measured on a recurring basis at fair value. At December 31, 2020 and 2019, derivative assets were $44 and $34, respectively, and derivative liabilities were $92 and $44, respectively. The fair values of derivatives used to manage interest rate risk and commodity price risk are based on LIBOR rates and interest rate swap curves and NYMEX price quotations, respectively. The fair values of hedging instruments used to manage foreign currency risk are based on published quotations of spot currency rates and forward points, which are converted into implied forward currency rates. Measurement of our derivative assets and liabilities is considered a level 2 measurement. See Note 11 for additional information on our use of derivative instruments.
Redeemable preferred securities of subsidiaries are measured on a recurring basis at fair value and were $28 and $29 at December 31, 2020 and 2019, respectively. They are not traded in active markets. As of December 31, 2020, the fair values of the redeemable securities were based on a discounted cash flow valuation model. Measurement of the redeemable preferred securities is considered a level 3 measurement.
Company-owned life insurance ("COLI") assets are measured on a recurring basis at fair value. COLI assets were $73 and $76 at December 31, 2020 and 2019, respectively. The COLI policies are a source of funding primarily for our nonqualified employee benefits and are included in other assets. The COLI policies are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.
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The following table includes the fair value of our financial instruments for which disclosure of fair value is required:
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|
Fair Value
Hierarchy
Level
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents(a)
|
1
|
|
$
|
303
|
|
|
$
|
303
|
|
|
$
|
442
|
|
|
$
|
442
|
|
|
Time deposits(b)
|
1
|
|
364
|
|
|
364
|
|
|
275
|
|
|
275
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Short-term debt(c)
|
2
|
|
223
|
|
|
223
|
|
|
775
|
|
|
775
|
|
|
Long-term debt(d)
|
2
|
|
8,141
|
|
|
9,627
|
|
|
6,972
|
|
|
7,877
|
|
(a)Cash equivalents are composed of certificates of deposit, time deposits and other interest-bearing investments with original maturity dates of 90 days or less. Cash equivalents are recorded at cost, which approximates fair value.
(b)Time deposits are composed of deposits with original maturities of more than 90 days but less than one year and instruments with original maturities of greater than one year, included in Other current assets or Other Assets in the consolidated balance sheet, as appropriate. Time deposits are recorded at cost, which approximates fair value.
(c)Short-term debt is composed of U.S. commercial paper and/or other similar short-term debt issued by non-U.S. subsidiaries, all of which are recorded at cost, which approximates fair value.
(d)Long-term debt includes the current portion of these debt instruments. Fair values were estimated based on quoted prices for financial instruments for which all significant inputs were observable, either directly or indirectly.
Note 5. Debt and Redeemable Preferred Securities of Subsidiaries
Long-term debt is composed of the following:
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|
|
|
|
Weighted-
Average
Interest
Rate
|
|
Maturities
|
|
December 31
|
|
|
2020
|
|
2019
|
|
Notes and debentures
|
3.3%
|
|
2021 - 2050
|
|
$
|
7,897
|
|
|
$
|
6,749
|
|
|
Industrial development revenue bonds
|
0.6%
|
|
2023 - 2045
|
|
169
|
|
|
169
|
|
|
Bank loans and other financings in various currencies
|
6.3%
|
|
2021 - 2039
|
|
75
|
|
|
54
|
|
|
Total long-term debt
|
|
|
|
|
8,141
|
|
|
6,972
|
|
|
Less current portion
|
|
|
|
|
263
|
|
|
759
|
|
|
Long-term portion
|
|
|
|
|
$
|
7,878
|
|
|
$
|
6,213
|
|
Scheduled maturities of long-term debt for the next five years are $265 in 2021, $314 in 2022, $475 in 2023, $618 in 2024 and $557 in 2025.
In September 2020, we issued $600 aggregate principal amount of 1.05% notes due September 15, 2027. Proceeds from the offering together with cash on hand and borrowings under our commercial paper program were used to fund the acquisition of Softex Indonesia.
In March 2020, we issued $750 aggregate principal amount of 3.10% notes due March 26, 2030. Proceeds from the offering were used for general corporate purposes including the repayment of a portion of our commercial paper indebtedness.
In February 2020, we issued $500 aggregate principal amount of 2.875% notes due February 7, 2050. Proceeds from the offering were used for general corporate purposes including the repayment of a portion of our commercial paper indebtedness.
In April 2019, we issued $700 aggregate principal amount of 3.20% notes due April 25, 2029. Proceeds from the offering were used for general corporate purposes, including the repayment of a portion of our outstanding commercial paper indebtedness.
In October 2018, we issued $500 aggregate principal amount of 3.95% notes due November 1, 2028. Proceeds from the offering were used for general corporate purposes, including repayment of a portion of our outstanding commercial paper indebtedness.
|
|
|
|
|
|
|
|
|
|
|
|
39
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
We maintain a $2.0 billion revolving credit facility which expires in June 2023 and a $750 revolving credit facility which expires in June 2021. These facilities, currently unused, support our commercial paper program, and would provide liquidity in the event our access to the commercial paper markets is unavailable for any reason.
Our subsidiary in Central America has outstanding redeemable preferred securities that are held by a noncontrolling interest.
Note 6. Stock-Based Compensation
We have a stock-based Equity Participation Plan and an Outside Directors' Compensation Plan (the "Plans"), under which we can grant stock options, restricted shares and restricted share units to employees and outside directors. As of December 31, 2020, the number of shares of common stock available for grants under the Plans aggregated 11 million shares.
Stock options are granted at an exercise price equal to the fair market value of our common stock on the date of grant, and they have a term of 10 years. Stock options are subject to graded vesting whereby options vest 30 percent at the end of each of the first two 12-month periods following the grant and 40 percent at the end of the third 12-month period.
Restricted shares, time-vested restricted share units and performance-based restricted share units granted to employees are valued at the closing market price of our common stock on the grant date and vest generally at the end of three years. The number of performance-based share units that ultimately vest ranges from zero to 200 percent of the number granted, based on performance tied to return on invested capital ("ROIC") and net sales during the three-year performance period. ROIC and net sales targets are set at the beginning of the performance period. Restricted share units granted to outside directors are valued at the closing market price of our common stock on the grant date and vest when they are granted. The restricted period begins on the date of grant and expires on the date the outside director retires from or otherwise terminates service on our Board.
At the time stock options are exercised or restricted shares and restricted share units become payable, common stock is issued from our accumulated treasury shares. Dividend equivalents are credited on restricted share units on the same date and at the same rate as dividends are paid on Kimberly-Clark's common stock. These dividend equivalents, net of estimated forfeitures, are charged to retained earnings.
Stock-based compensation costs of $147, $96 and $41 and related deferred income tax benefits of $32, $11 and $13 were recognized for 2020, 2019 and 2018, respectively.
The fair value of stock option awards was determined using a Black-Scholes-Merton option-pricing model utilizing a range of assumptions related to dividend yield, volatility, risk-free interest rate, and employee exercise behavior. Dividend yield is based on historical experience and expected future dividend actions. Expected volatility is based on a blend of historical volatility and implied volatility from traded options on Kimberly-Clark's common stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. We estimate forfeitures based on historical data.
The weighted-average fair value of options granted was estimated at $15.92, $13.54 and $13.56, in 2020, 2019 and 2018, respectively, per option on the date of grant based on the following assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
|
|
2020
|
|
2019
|
|
2018
|
|
Dividend yield
|
3.3
|
%
|
|
3.3
|
%
|
|
3.9
|
%
|
|
Volatility
|
21.9
|
%
|
|
17.0
|
%
|
|
20.8
|
%
|
|
Risk-free interest rate
|
0.3
|
%
|
|
2.3
|
%
|
|
2.8
|
%
|
|
Expected life - years
|
4.5
|
|
4.6
|
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
|
40
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
Total remaining unrecognized compensation costs and amortization period are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
Weighted-Average
Service Years
|
|
Stock options
|
$
|
15
|
|
|
1.3
|
|
Restricted shares and time-vested restricted share units
|
12
|
|
|
1.5
|
|
Performance-based restricted share units
|
82
|
|
|
1.8
|
A summary of stock-based compensation is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
Shares
(in thousands)
|
|
Weighted-Average
Exercise Price
|
|
Weighted-Average
Remaining Contractual Term
|
|
Aggregate Intrinsic
Value
|
|
Outstanding at January 1, 2020
|
5,892
|
|
|
$
|
115.26
|
|
|
|
|
|
|
Granted
|
1,568
|
|
|
139.18
|
|
|
|
|
|
|
Exercised
|
(1,909)
|
|
|
113.58
|
|
|
|
|
|
|
Forfeited or expired
|
(160)
|
|
|
124.97
|
|
|
|
|
|
|
Outstanding at December 31, 2020
|
5,391
|
|
|
123.14
|
|
|
7.75
|
|
$
|
70
|
|
|
Exercisable at December 31, 2020
|
2,813
|
|
|
116.94
|
|
|
5.34
|
|
$
|
50
|
|
The total intrinsic value of options exercised during 2020, 2019 and 2018 was $62, $62 and $22, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Vested
Restricted Share Units
|
|
Performance-Based
Restricted Share Units
|
|
Other Stock-Based Awards
|
Shares
(in thousands)
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|
Shares
(in thousands)
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|
Nonvested at January 1, 2020
|
156
|
|
|
$
|
123.15
|
|
|
1,584
|
|
|
$
|
118.71
|
|
|
Granted
|
123
|
|
|
134.31
|
|
|
623
|
|
|
134.81
|
|
|
Vested
|
(83)
|
|
|
122.07
|
|
|
(370)
|
|
|
124.41
|
|
|
Forfeited
|
(14)
|
|
|
122.14
|
|
|
(300)
|
|
|
128.52
|
|
|
Nonvested at December 31, 2020
|
182
|
|
|
130.91
|
|
|
1,537
|
|
|
122.56
|
|
The total fair value of restricted share units that were distributed to participants during 2020, 2019 and 2018 was $62, $75 and $65, respectively.
Note 7. Employee Postretirement Benefits
Substantially all regular employees in the U.S. and the United Kingdom are covered by defined contribution retirement plans and certain U.S. and United Kingdom employees previously earned benefits covered by defined benefit pension plans that currently provide no future service benefit (the "Principal Plans"). Certain other subsidiaries have defined benefit pension plans or, in certain countries, termination pay plans covering substantially all regular employees. The funding policy for our qualified defined benefit pension plans is to contribute assets at least equal in amount to regulatory minimum requirements. Nonqualified U.S. plans providing pension benefits in excess of limitations imposed by the U.S. income tax code are not funded.
Substantially all U.S. retirees and employees have access to our unfunded health care and life insurance benefit plans. The annual increase in the consolidated weighted-average health care cost trend rate is expected to be 5.5 percent in 2021 and to decline to 4.5 percent in 2029 and thereafter. Assumed health care cost trend rates affect the amounts reported for postretirement health care benefit plans.
As a result of restructuring actions related to the 2018 Global Restructuring Program, aggregate pension settlement charges of $49 and $46 during 2020 and 2019 and a curtailment gain of $1 during 2019 were recognized in Nonoperating expense,
|
|
|
|
|
|
|
|
|
|
|
|
41
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
respectively, primarily related to the defined benefit pension plans in the U.S., United Kingdom and Canada (see Note 2 for further information about the 2018 Global Restructuring Program).
Summarized financial information about postretirement plans, excluding defined contribution retirement plans, is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
|
|
Year Ended December 31
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Change in Benefit Obligation
|
|
|
|
|
|
|
|
|
Benefit obligation at beginning of year
|
$
|
4,047
|
|
|
$
|
3,687
|
|
|
$
|
693
|
|
|
$
|
673
|
|
|
Service cost
|
22
|
|
|
21
|
|
|
8
|
|
|
8
|
|
|
Interest cost
|
95
|
|
|
121
|
|
|
23
|
|
|
28
|
|
|
Actuarial (gain) loss(a)
|
333
|
|
|
446
|
|
|
42
|
|
|
36
|
|
|
Currency and other
|
134
|
|
|
51
|
|
|
(10)
|
|
|
—
|
|
|
Benefit payments from plans
|
(169)
|
|
|
(142)
|
|
|
—
|
|
|
—
|
|
|
Direct benefit payments
|
(8)
|
|
|
(10)
|
|
|
(47)
|
|
|
(52)
|
|
|
Settlements and curtailments
|
(113)
|
|
|
(127)
|
|
|
—
|
|
|
—
|
|
|
Benefit obligation at end of year
|
4,341
|
|
|
4,047
|
|
|
709
|
|
|
693
|
|
|
Change in Plan Assets
|
|
|
|
|
|
|
|
|
Fair value of plan assets at beginning of year
|
3,803
|
|
|
3,398
|
|
|
—
|
|
|
—
|
|
|
Actual return on plan assets
|
489
|
|
|
572
|
|
|
—
|
|
|
—
|
|
|
Employer contributions
|
40
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
Currency and other
|
120
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
Benefit payments
|
(169)
|
|
|
(142)
|
|
|
—
|
|
|
—
|
|
|
Settlements
|
(90)
|
|
|
(126)
|
|
|
—
|
|
|
—
|
|
|
Fair value of plan assets at end of year
|
4,193
|
|
|
3,803
|
|
|
—
|
|
|
—
|
|
|
Funded Status
|
$
|
(148)
|
|
|
$
|
(244)
|
|
|
$
|
(709)
|
|
|
$
|
(693)
|
|
(a) The actuarial net losses in 2020 and 2019 were primarily due to discount rate decreases in 2020 and 2019.
Substantially all of the funded status of pension and other benefits is recognized in the consolidated balance sheet in Noncurrent Employee Benefits, with the remainder recognized in Accrued Expenses and other current liabilities and Other Assets.
Information for the Principal Plans and All Other Pension Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Plans
|
|
All Other
Pension Plans
|
|
Total
|
|
|
Year Ended December 31
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Projected benefit obligation (“PBO”)
|
$
|
3,629
|
|
|
$
|
3,406
|
|
|
$
|
712
|
|
|
$
|
641
|
|
|
$
|
4,341
|
|
|
$
|
4,047
|
|
|
Accumulated benefit obligation (“ABO”)
|
3,629
|
|
|
3,406
|
|
|
619
|
|
|
561
|
|
|
4,248
|
|
|
3,967
|
|
|
Fair value of plan assets
|
3,627
|
|
|
3,303
|
|
|
566
|
|
|
500
|
|
|
4,193
|
|
|
3,803
|
|
Approximately one-half of the PBO and fair value of plan assets for the Principal Plans relate to the U.S. qualified and nonqualified pension plans.
|
|
|
|
|
|
|
|
|
|
|
|
42
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
Information for Pension Plans with an ABO in Excess of Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
2020
|
|
2019
|
|
ABO
|
$
|
311
|
|
|
$
|
1,956
|
|
|
Fair value of plan assets
|
119
|
|
|
1,714
|
|
Information for Pension Plans with a PBO in Excess of Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
2020
|
|
2019
|
|
PBO
|
$
|
744
|
|
|
$
|
2,303
|
|
|
Fair value of plan assets
|
529
|
|
|
2,039
|
|
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
|
|
Year Ended December 31
|
|
|
2020
|
|
2019
|
|
2018
|
|
2020
|
|
2019
|
|
2018
|
|
Service cost
|
$
|
22
|
|
|
$
|
21
|
|
|
$
|
36
|
|
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
11
|
|
|
Interest cost
|
95
|
|
|
121
|
|
|
128
|
|
|
23
|
|
|
28
|
|
|
28
|
|
|
Expected return on plan assets(a)
|
(134)
|
|
|
(144)
|
|
|
(166)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Recognized net actuarial loss
|
42
|
|
|
44
|
|
|
47
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
Settlements and curtailments
|
49
|
|
|
45
|
|
|
136
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other
|
(4)
|
|
|
(4)
|
|
|
(7)
|
|
|
(2)
|
|
|
(1)
|
|
|
(3)
|
|
|
Net periodic benefit cost
|
$
|
70
|
|
|
$
|
83
|
|
|
$
|
174
|
|
|
$
|
30
|
|
|
$
|
35
|
|
|
$
|
37
|
|
(a)The expected return on plan assets is determined by multiplying the fair value of plan assets at the remeasurement date, typically the prior year-end adjusted for estimated current year cash benefit payments and contributions, by the expected long-term rate of return.
The components of net periodic benefit cost other than the service cost component are included in the line item Nonoperating expense in our consolidated income statement.
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
|
|
Projected 2021
|
|
2020
|
|
2019
|
|
2018
|
|
2020
|
|
2019
|
|
2018
|
|
Discount rate
|
1.93
|
%
|
|
2.44
|
%
|
|
3.40
|
%
|
|
3.23
|
%
|
|
3.51
|
%
|
|
4.50
|
%
|
|
3.91
|
%
|
|
Expected long-term return on plan assets
|
3.41
|
%
|
|
3.66
|
%
|
|
4.39
|
%
|
|
4.50
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Rate of compensation increase
|
3.07
|
%
|
|
3.08
|
%
|
|
3.08
|
%
|
|
2.27
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Discount rate
|
1.93
|
%
|
|
2.51
|
%
|
|
2.69
|
%
|
|
3.51
|
%
|
|
Rate of compensation increase
|
3.07
|
%
|
|
3.08
|
%
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
Investment Strategies for the Principal Plans
Strategic asset allocation decisions are made considering several risk factors, including plan participants' retirement benefit security, the estimated payments of the associated liabilities, the plan funded status, and Kimberly-Clark's financial condition. The resulting strategic asset allocation is a diversified blend of equity and fixed income investments. Equity investments are typically diversified across geographies and market capitalization. Fixed income investments are diversified across multiple sectors including government issues and corporate debt instruments with a portfolio duration that is consistent with the estimated payment of the associated liability. Actual asset allocation is regularly reviewed and periodically rebalanced to the strategic allocation when considered appropriate. Our 2021 target plan asset allocation for the Principal Plans is approximately 85 percent fixed income securities and 15 percent equity securities.
The expected long-term rate of return is generally evaluated on an annual basis. In setting this assumption, we consider a number of factors including projected future returns by asset class relative to the current asset allocation. The weighted-average expected long-term rate of return on pension fund assets used to calculate pension expense for the Principal Plans was 3.76 percent in 2020, 4.59 percent in 2019 and 4.75 percent in 2018, and will be 3.51 percent in 2021.
Set forth below are the pension plan assets of the Principal Plans measured at fair value, by level in the fair-value hierarchy. More than 70 percent of the assets are held in pooled funds and are measured using a net asset value (or its equivalent). Accordingly, such assets do not meet the Level 1, Level 2, or Level 3 criteria of the fair value hierarchy.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2020
|
|
|
Total
Plan Assets
|
|
Assets at Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Assets at Significant
Observable
Inputs
(Level 2)
|
|
Assets at Significant
Unobservable
Inputs
(Level 3)
|
|
Cash and Cash Equivalents
|
|
|
|
|
|
|
|
|
Held directly
|
$
|
56
|
|
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Held through mutual and pooled funds measured at net asset value
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Fixed Income
|
|
|
|
|
|
|
|
|
Held directly
|
|
|
|
|
|
|
|
|
U.S. government and municipals
|
191
|
|
|
171
|
|
|
20
|
|
|
—
|
|
|
U.S. corporate debt
|
310
|
|
|
—
|
|
|
310
|
|
|
—
|
|
|
International bonds
|
42
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
Held through mutual and pooled funds measured at net asset value
|
|
|
|
|
|
|
|
|
U.S. government and municipals
|
167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
U.S. corporate debt
|
730
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
International bonds
|
1,062
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Held directly
|
|
|
|
|
|
|
|
|
U.S. equity
|
18
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
International equity
|
31
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
Held through mutual and pooled funds measured at net asset value
|
|
|
|
|
|
|
|
|
Non-U.S. equity
|
107
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Global equity
|
517
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Insurance Contracts
|
380
|
|
|
—
|
|
|
—
|
|
|
380
|
|
|
Other
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
Total Plan Assets
|
$
|
3,627
|
|
|
$
|
277
|
|
|
$
|
372
|
|
|
$
|
380
|
|
Futures contracts are used when appropriate to manage duration targets. As of December 31, 2020 and 2019, the U.S. plan held directly Treasury futures contracts with a total notional value of approximately $396 and $345, respectively, and an
|
|
|
|
|
|
|
|
|
|
|
|
44
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
insignificant fair value. As of December 31, 2020 and 2019, the United Kingdom plan held through a pooled fund future contracts with a total notional value of approximately $454 and $346, and an insignificant fair value.
During 2020 and 2019, the plan assets did not include a significant amount of Kimberly-Clark common stock.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2019
|
|
|
Total
Plan Assets
|
|
Assets at Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Assets at Significant
Observable
Inputs
(Level 2)
|
|
Assets at Significant
Unobservable
Inputs
(Level 3)
|
|
Cash and Cash Equivalents
|
|
|
|
|
|
|
|
|
Held directly
|
$
|
44
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Held through mutual and pooled funds measured at net asset value
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Fixed Income
|
|
|
|
|
|
|
|
|
Held directly
|
|
|
|
|
|
|
|
|
U.S. government and municipals
|
161
|
|
|
147
|
|
|
14
|
|
|
—
|
|
|
U.S. corporate debt
|
221
|
|
|
—
|
|
|
221
|
|
|
—
|
|
|
International bonds
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
Held through mutual and pooled funds measured at net asset value
|
|
|
|
|
|
|
|
|
U.S. government and municipals
|
153
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
U.S. corporate debt
|
662
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
International bonds
|
937
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Held directly
|
|
|
|
|
|
|
|
|
U.S. equity
|
39
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
International equity
|
32
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
Held through mutual and pooled funds measured at net asset value
|
|
|
|
|
|
|
|
|
Non-U.S. equity
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Global equity
|
572
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Insurance Contracts
|
372
|
|
|
—
|
|
|
—
|
|
|
372
|
|
|
Other
|
(16)
|
|
|
(4)
|
|
|
—
|
|
|
—
|
|
|
Total Plan Assets
|
$
|
3,303
|
|
|
$
|
258
|
|
|
$
|
244
|
|
|
$
|
372
|
|
Inputs and valuation techniques used to measure the fair value of plan assets vary according to the type of security being valued. Substantially all of the equity securities held directly by the plans are actively traded and fair values are determined based on quoted market prices. Fair values of U.S. government securities are determined based on trading activity in the marketplace.
Fair values of U.S. corporate debt, U.S. municipals and international bonds are typically determined by reference to the values of similar securities traded in the marketplace and current interest rate levels. Multiple pricing services are typically employed to assist in determining these valuations.
Fair values of equity securities and fixed income securities held through units of pooled funds are based on net asset value of the units of the pooled fund determined by the fund manager. Pooled funds are similar in nature to retail mutual funds, but are typically more efficient for institutional investors. The fair value of pooled funds is determined by the value of the underlying assets held by the fund and the units outstanding.
Equity securities held directly by the pension trusts and those held through units in pooled funds are monitored as to issuer and industry. Except for U.S. Treasuries, concentrations of fixed income securities are similarly monitored for concentrations by issuer and industry. As of December 31, 2020, there were no significant concentrations of equity or debt securities in any single issuer or industry.
|
|
|
|
|
|
|
|
|
|
|
|
45
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
No level 3 transfers (in or out) were made in 2020 or 2019. Fair values of insurance contracts are based on an evaluation of various factors, including purchase price.
We expect to contribute approximately $50 to our defined benefit pension plans in 2021. Over the next ten years, we expect that the following gross benefit payments will occur:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
|
2021
|
$
|
207
|
|
|
$
|
56
|
|
|
2022
|
227
|
|
|
58
|
|
|
2023
|
220
|
|
|
58
|
|
|
2024
|
224
|
|
|
58
|
|
|
2025
|
220
|
|
|
55
|
|
|
2026-2030
|
1,085
|
|
|
247
|
|
Defined Contribution Pension Plans
Our 401(k) profit sharing plan and supplemental plan provide for a matching contribution of a U.S. employee's contributions and accruals, subject to predetermined limits, as well as a discretionary profit sharing contribution, in which contributions will be based on our profit performance. We also have defined contribution pension plans for certain employees outside the U.S. Costs charged to expense for our defined contribution pension plans were $141 in 2020, $131 in 2019, and $120 in 2018. Approximately 25 percent of these costs were for plans outside the U.S.
Note 8. Stockholders' Equity
The changes in the components of AOCI attributable to Kimberly-Clark, net of tax, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Translation
|
|
Defined Benefit Pension Plans
|
|
Other Postretirement Benefit Plans
|
|
Cash Flow Hedges and Other
|
|
Balance as of December 31, 2018
|
|
$
|
(2,297)
|
|
|
$
|
(1,017)
|
|
|
$
|
12
|
|
|
$
|
3
|
|
|
Other comprehensive income (loss) before reclassifications
|
|
26
|
|
|
(27)
|
|
|
(24)
|
|
|
(22)
|
|
|
(Income) loss reclassified from AOCI
|
|
—
|
|
|
65
|
|
(a)
|
(1)
|
|
(a)
|
(12)
|
|
|
Net current period other comprehensive income (loss)
|
|
26
|
|
|
38
|
|
|
(25)
|
|
|
(34)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2019
|
|
(2,271)
|
|
|
(979)
|
|
|
(13)
|
|
|
(31)
|
|
|
Other comprehensive income (loss) before reclassifications
|
|
114
|
|
|
4
|
|
|
(26)
|
|
|
(31)
|
|
|
(Income) loss reclassified from AOCI
|
|
—
|
|
|
63
|
|
(a)
|
(1)
|
|
(a)
|
(1)
|
|
|
Net current period other comprehensive income (loss)
|
|
114
|
|
|
67
|
|
|
(27)
|
|
|
(32)
|
|
|
Balance as of December 31, 2020
|
|
$
|
(2,157)
|
|
|
$
|
(912)
|
|
|
$
|
(40)
|
|
|
$
|
(63)
|
|
(a) Included in computation of net periodic pension and other postretirement benefits costs (see Note 7).
Included in the above defined benefit pension plans and other postretirement benefit plans balances as of December 31, 2020 is $958 and $6 of unrecognized net actuarial loss and unrecognized net prior service credit, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
46
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
The changes in the components of AOCI attributable to Kimberly-Clark, including the tax effect, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
|
|
2020
|
|
2019
|
|
2018
|
|
Unrealized translation
|
$
|
98
|
|
|
$
|
21
|
|
|
$
|
(408)
|
|
|
Tax effect(a)
|
16
|
|
|
5
|
|
|
(25)
|
|
|
|
114
|
|
|
26
|
|
|
(433)
|
|
|
|
|
|
|
|
|
|
Defined benefit pension plans
|
|
|
|
|
|
|
Unrecognized net actuarial loss and transition amount
|
|
|
|
|
|
|
Funded status recognition
|
24
|
|
|
(17)
|
|
|
(57)
|
|
|
Amortization
|
41
|
|
|
44
|
|
|
47
|
|
|
Settlements and curtailments
|
49
|
|
|
46
|
|
|
134
|
|
|
Currency and other
|
(26)
|
|
|
(13)
|
|
|
29
|
|
|
|
88
|
|
|
60
|
|
|
153
|
|
|
Unrecognized prior service cost/credit
|
|
|
|
|
|
|
Funded status recognition
|
2
|
|
|
(1)
|
|
|
(22)
|
|
|
Amortization
|
(4)
|
|
|
(5)
|
|
|
(8)
|
|
|
Curtailments
|
—
|
|
|
(1)
|
|
|
2
|
|
|
Currency and other
|
1
|
|
|
(2)
|
|
|
(1)
|
|
|
|
(1)
|
|
|
(9)
|
|
|
(29)
|
|
|
Tax effect(a)
|
(20)
|
|
|
(13)
|
|
|
(165)
|
|
|
|
67
|
|
|
38
|
|
|
(41)
|
|
|
Other postretirement benefit plans
|
|
|
|
|
|
|
Unrecognized net actuarial loss and transition amount and other
|
(35)
|
|
|
(35)
|
|
|
79
|
|
|
Tax effect(a)
|
8
|
|
|
10
|
|
|
(28)
|
|
|
|
(27)
|
|
|
(25)
|
|
|
51
|
|
|
Cash flow hedges and other
|
|
|
|
|
|
|
Recognition of effective portion of hedges
|
(32)
|
|
|
(23)
|
|
|
56
|
|
|
Amortization
|
(2)
|
|
|
(16)
|
|
|
12
|
|
|
Currency and other
|
(5)
|
|
|
(1)
|
|
|
(2)
|
|
|
Tax effect(a)
|
7
|
|
|
6
|
|
|
(23)
|
|
|
|
(32)
|
|
|
(34)
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in AOCI
|
$
|
122
|
|
|
$
|
5
|
|
|
$
|
(380)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The Tax effect for Unrealized translation, Defined benefit pension plans, Other postretirement benefit plans and Cash flow hedges and other includes reductions of $18, $125, $5 and $8, respectively, for stranded tax effects reclassified from AOCI to Retained earnings in 2018.
Amounts are reclassified from AOCI into Cost of products sold, Nonoperating expense, Interest expense, or Other (income) and expense, net, as applicable, in the consolidated income statement.
Net unrealized currency gains or losses resulting from the translation of assets and liabilities of foreign subsidiaries, except those in highly inflationary economies, are recorded in AOCI. For these operations, changes in exchange rates generally do not affect cash flows; therefore, unrealized translation adjustments are recorded in AOCI rather than net income. Upon sale or substantially complete liquidation of any of these subsidiaries, the applicable unrealized translation adjustment would be removed from AOCI and reported as part of the gain or loss on the sale or liquidation. The change in unrealized translation in 2020 is primarily due to the strengthening of various foreign currencies versus the U.S. dollar offset by certain currencies that weakened, most notably the Brazilian real. Also included in unrealized translation amounts are the effects of foreign exchange
|
|
|
|
|
|
|
|
|
|
|
|
47
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
rate changes on intercompany balances of a long-term investment nature and transactions designated as hedges of net foreign investments.
Note 9. Leases and Commitments
We have entered into leases for certain facilities, vehicles, material handling and other equipment. Our operating leases have remaining contractual terms up to 18 years, some of which include options to extend the leases for up to 20 years, and some of which include options to terminate the leases within 1 year. Our operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Our operating lease costs are primarily related to facility leases for inventory warehousing and administration offices. Our finance leases are immaterial.
Operating Lease Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
|
|
|
|
|
2020
|
|
|
|
2019
|
|
Income Statement Classification
|
|
Lease cost
|
|
$
|
168
|
|
|
|
|
$
|
162
|
|
|
Cost of products sold, Marketing, research and general expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable lease cost(a)
|
|
202
|
|
|
|
|
145
|
|
|
Cost of products sold, Marketing, research and general expenses
|
|
Total lease cost
|
|
$
|
370
|
|
|
|
|
$
|
307
|
|
|
|
(a) Includes short-term leases, which are immaterial.
Operating Lease Assets and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
|
|
|
2020
|
|
2019
|
|
Balance Sheet Classification
|
|
|
|
|
|
|
|
|
|
Lease assets
|
|
$
|
540
|
|
|
$
|
396
|
|
|
Other Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current lease liabilities
|
|
$
|
133
|
|
|
$
|
130
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent lease liabilities
|
|
423
|
|
|
274
|
|
|
Other Liabilities
|
|
|
|
|
|
|
|
|
|
Total lease liabilities
|
|
$
|
556
|
|
|
$
|
404
|
|
|
|
Maturity of Operating Lease Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
|
|
|
2021
|
|
$
|
148
|
|
|
|
|
|
|
2022
|
|
126
|
|
|
|
|
|
|
2023
|
|
100
|
|
|
|
|
|
|
2024
|
|
76
|
|
|
|
|
|
|
2025
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thereafter
|
|
90
|
|
|
|
|
|
|
Total lease payments
|
|
603
|
|
|
|
|
|
|
Less imputed interest
|
|
47
|
|
|
|
|
|
|
Present value of lease liabilities
|
|
$
|
556
|
|
|
|
|
|
As of December 31, 2020, our operating leases have a weighted-average remaining lease term of 5.1 years and a weighted-average discount rate of 3.55 percent.
|
|
|
|
|
|
|
|
|
|
|
|
48
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
Supplemental Information Related to Operating Leases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
|
2020
|
|
2019
|
|
Operating cash flows from leases included in the measurement of lease liabilities
|
|
$
|
164
|
|
|
$
|
163
|
|
|
Leased assets obtained in exchange for new lease obligations
|
|
$
|
198
|
|
|
$
|
504
|
|
|
Other non-cash modifications to lease assets
|
|
$
|
98
|
|
|
$
|
31
|
|
Consolidated rental expense under operating leases prior to the adoption of ASU Topic 842 was $280 in 2018.
We have entered into long-term contracts for the purchase of superabsorbent materials, pulp and certain utilities. Commitments under these contracts based on current prices are $1,422 in 2021, $1,010 in 2022, $622 in 2023, $103 in 2024, $108 in 2025, and $222 beyond the year 2025.
Although we are primarily liable for payments on the above-mentioned leases and purchase commitments, our exposure to losses, if any, under these arrangements is not material.
Note 10. Legal Matters
We are subject to various legal proceedings, claims and governmental inquiries, inspections, audits or investigations pertaining to issues such as contract disputes, product liability, tax matters, patents and trademarks, advertising, pricing, business practices, governmental regulations, employment and other matters.
We are party to certain legal proceedings relating to our former health care business, Avanos Medical, Inc. ("Avanos", previously Halyard Health, Inc.), which we spun-off on October 31, 2014, including a qui tam matter and certain subpoena and document requests from the federal government.
The health care matters included Bahamas Surgery Center v. Kimberly-Clark Corporation, et al., a California consumer class action relating to the sale of surgical gowns. In April 2017, the jury awarded the plaintiff class $3.9 in compensatory damages and $350 in punitive damages against us. During the first quarter of 2018, the Court reduced the punitive damages award to approximately $19. During the fourth quarter of 2020, the class action was terminated and the Court vacated the prior judgment and dismissed the case.
The subpoena and document requests include subpoenas from the United States Department of Justice (DOJ) concerning allegations of potential criminal and civil violations of federal laws, including the Food, Drug, and Cosmetic Act, in connection with the manufacturing, marketing and sale of surgical gowns by our former health care business. We continue to produce documents and cooperate in this ongoing investigation. At this stage, we are unable to predict an outcome or estimate the potential range of outcomes to resolve this matter.
Under the terms of the distribution agreement we entered into with Avanos in connection with the spin-off, Avanos is obligated to indemnify us for legal proceedings, claims and other liabilities primarily related to our former health care business. Avanos and Kimberly-Clark each filed suits against the other seeking declaratory judgment regarding the scope of these indemnification obligations. The litigation has been resolved, the cases have been dismissed, and the parties have agreed that Avanos has no further indemnification obligations relating to certain proceedings regarding the sale of surgical gowns by our former health care business.
We are subject to federal, state and local environmental protection laws and regulations with respect to our business operations and are operating in compliance with, or taking action aimed at ensuring compliance with, these laws and regulations. We have been named a potentially responsible party under the provisions of the U.S. federal Comprehensive Environmental Response, Compensation and Liability Act, or analogous state statutes, at a number of sites where hazardous substances are present. None of our compliance obligations with environmental protection laws and regulations, individually or in the aggregate, is expected to have a material adverse effect on our business, liquidity, financial condition or results of operations.
|
|
|
|
|
|
|
|
|
|
|
|
49
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
Note 11. Objectives and Strategies for Using Derivatives
As a multinational enterprise, we are exposed to financial risks, such as changes in foreign currency exchange rates, interest rates, and commodity prices. We employ a number of practices to manage these risks, including operating and financing activities and, where appropriate, the use of derivative instruments.
At December 31, 2020 and 2019, derivative assets were $44 and $34, respectively, and derivative liabilities were $92 and $44, respectively, primarily comprised of foreign currency exchange contracts. Derivative assets are recorded in Other current assets or Other Assets, as appropriate, and derivative liabilities are recorded in Accrued expenses and other current liabilities or Other Liabilities, as appropriate.
Foreign Currency Exchange Rate Risk
Translation adjustments result from translating foreign entities' financial statements into U.S. dollars from their functional currencies. The risk to any particular entity's net assets is reduced to the extent that the entity is financed with local currency borrowings. A portion of our balance sheet translation exposure for certain affiliates, which results from changes in translation rates between the affiliates’ functional currencies and the U.S. dollar, is hedged with cross-currency swap contracts and certain foreign denominated debt which are designated as net investment hedges. The foreign currency exposure on certain non-functional currency denominated monetary assets and liabilities, primarily intercompany loans and accounts payable, is hedged with primarily undesignated derivative instruments.
Derivative instruments are entered into to hedge a portion of forecasted cash flows denominated in foreign currencies for non-U.S. operations' purchases of raw materials, which are priced in U.S. dollars, and imports of intercompany finished goods and work-in-process priced predominantly in U.S. dollars and euros. The derivative instruments used to manage these exposures are designated as cash flow hedges.
Interest Rate Risk
Interest rate risk is managed using a portfolio of variable and fixed-rate debt composed of short and long-term instruments. Interest rate swap contracts may be used to facilitate the maintenance of the desired ratio of variable and fixed-rate debt and are designated as fair value hedges. From time to time, we also hedge the anticipated issuance of fixed-rate debt, and these contracts are designated as cash flow hedges.
Commodity Price Risk
We use derivative instruments, such as forward contracts, to hedge a limited portion of our exposure to market risk arising from changes in prices of certain commodities. These derivatives are designated as cash flow hedges of specific quantities of the underlying commodity expected to be purchased in future months. In addition, we utilize negotiated short-term contract structures, including fixed price contracts, to manage volatility for a portion of our commodity costs.
Fair Value Hedges
Derivative instruments that are designated and qualify as fair value hedges are predominantly used to manage interest rate risk. The fair values of these derivative instruments are recorded as an asset or liability, as appropriate, with the offset recorded in current Interest expense. The offset to the change in fair values of the related debt is also recorded in Interest expense. Any realized gain or loss on the derivatives that hedge interest rate risk is amortized to Interest expense over the life of the related debt. As of December 31, 2020, the aggregate notional values and carrying values of debt subject to outstanding interest rate contracts designated as fair value hedges were $300 and $322, respectively. For each of the three years ended December 31, 2020, gains or losses recognized in Interest expense for interest rate swaps were not significant.
Cash Flow Hedges
For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is initially recorded in AOCI, net of related income taxes, and recognized in earnings in the same income statement line and period that the hedged exposure affects earnings. As of December 31, 2020, outstanding commodity forward contracts were in place to hedge a limited portion of our estimated requirements of the related underlying commodities in 2021 and future periods. As of December 31, 2020, the aggregate notional value of outstanding foreign exchange derivative contracts designated as cash flow hedges was $721. For each of the three years ended December 31, 2020, no significant gains or losses were reclassified into Interest expense, Cost of products sold or Other (income) and expense, net as a result of the discontinuance of cash flow hedges due to the original forecasted transaction no longer being probable of occurring. At
|
|
|
|
|
|
|
|
|
|
|
|
50
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
December 31, 2020, amounts to be reclassified from AOCI into Interest expense, Cost of products sold or Other (income), net during the next twelve months are not expected to be material. The maximum maturity of cash flow hedges in place at December 31, 2020 is December 2022.
Net Investment Hedges
For derivative instruments that are designated and qualify as net investment hedges, the aggregate notional value was $1.5 billion at December 31, 2020. We exclude the interest accruals on cross-currency swap contracts and the forward points on foreign exchange forward contracts from the assessment and measurement of hedge effectiveness. We recognize the interest accruals on cross-currency swap contracts in earnings within Interest expense. We amortize the forward points on foreign exchange contracts into earnings within Interest expense over the life of the hedging relationship. Changes in fair value of net investment hedges are recorded in AOCI and offset the change in the value of the net investment being hedged. For the year ended December 31, 2020, unrealized losses of $75 related to net investment hedge fair value changes were recorded in AOCI and no significant amounts were reclassified from AOCI to Interest expense.
No significant amounts were excluded from the assessment of net investment, fair value or cash flow hedge effectiveness as of December 31, 2020.
Undesignated Hedging Instruments
Gains or losses on undesignated foreign exchange hedging instruments are immediately recognized in Other (income) and expense, net. A gain of $39 and losses of $17 and $52 were recorded in the years ending December 31, 2020, 2019 and 2018, respectively. The effect on earnings from the use of these non-designated derivatives is substantially neutralized by the transactional gains and losses recorded on the underlying assets and liabilities. At December 31, 2020, the notional amount of these undesignated derivative instruments was approximately $1.9 billion.
Note 12. Income Taxes
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made changes to the U.S. tax code, which included (1) a reduced U.S. corporate tax rate from 35 percent to 21 percent, (2) implementation of a base erosion and anti-abuse tax, (3) general elimination of U.S. federal income taxes on dividends from foreign subsidiaries, (4) a new provision designed to tax GILTI of foreign subsidiaries which allows for the possibility of utilizing foreign tax credits to offset the tax liability (subject to some limitations), (5) a lower effective U.S. tax rate on certain revenues from sources outside the U.S., and (6) a one-time transition tax on certain undistributed earnings of foreign subsidiaries. In the year ended December 31, 2017, we recorded a provisional discrete net tax benefit associated with the Tax Act and related matters. The provisional amounts recorded in 2017 related to the transition tax, remeasurement of deferred taxes, our reassessment of permanently reinvested earnings, uncertain tax positions and valuation allowances, and actions taken in anticipation of the Tax Act were finalized and a net expense of $36 was recorded during 2018.
During 2018, we also recorded discrete net tax expense of $81 primarily related to new guidance issued during 2018 affecting tax benefits we recorded in the year ended December 31, 2017 for the transition tax and certain tax planning actions taken in anticipation of the Tax Act.
At December 31, 2018, we finalized our policy and have elected to use the period cost method for GILTI provisions and therefore have not recorded deferred taxes for basis differences expected to reverse in future periods.
In December 2019, we generated a nonrecurring capital loss from a legal entity restructuring. We recorded a net benefit of $47 in the fourth quarter.
|
|
|
|
|
|
|
|
|
|
|
|
51
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
An analysis of the provision for income taxes follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
|
|
2020
|
|
2019
|
|
2018
|
|
Current income taxes
|
|
|
|
|
|
|
United States
|
$
|
252
|
|
|
$
|
215
|
|
|
$
|
177
|
|
|
State
|
81
|
|
|
94
|
|
|
63
|
|
|
Other countries
|
298
|
|
|
238
|
|
|
229
|
|
|
Total
|
631
|
|
|
547
|
|
|
469
|
|
|
Deferred income taxes
|
|
|
|
|
|
|
United States
|
62
|
|
|
50
|
|
|
16
|
|
|
State
|
5
|
|
|
(16)
|
|
|
22
|
|
|
Other countries
|
(22)
|
|
|
(5)
|
|
|
(36)
|
|
|
Total
|
45
|
|
|
29
|
|
|
2
|
|
|
Total provision for income taxes
|
$
|
676
|
|
|
$
|
576
|
|
|
$
|
471
|
|
Income before income taxes is earned in the following tax jurisdictions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
|
|
2020
|
|
2019
|
|
2018
|
|
United States
|
$
|
2,336
|
|
|
$
|
2,252
|
|
|
$
|
1,606
|
|
|
Other countries
|
594
|
|
|
398
|
|
|
207
|
|
|
Total income before income taxes
|
$
|
2,930
|
|
|
$
|
2,650
|
|
|
$
|
1,813
|
|
Deferred income tax assets and liabilities are composed of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
2020
|
|
2019
|
|
Deferred tax assets
|
|
|
|
|
Pension and other postretirement benefits
|
$
|
239
|
|
|
$
|
253
|
|
|
Tax credits and loss carryforwards
|
477
|
|
|
411
|
|
|
Lease liability
|
117
|
|
|
104
|
|
|
Other
|
465
|
|
|
388
|
|
|
|
1,298
|
|
|
1,156
|
|
|
Valuation allowances
|
(272)
|
|
|
(248)
|
|
|
Total deferred tax assets
|
1,026
|
|
|
908
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
|
Property, plant and equipment, net
|
900
|
|
|
795
|
|
|
Investments in subsidiaries
|
111
|
|
|
103
|
|
|
Goodwill
|
54
|
|
|
66
|
|
|
Intangible assets
|
159
|
|
|
4
|
|
|
Lease asset
|
117
|
|
|
105
|
|
|
Other
|
146
|
|
|
104
|
|
|
Total deferred tax liabilities
|
1,487
|
|
|
1,177
|
|
|
Net deferred tax assets (liabilities)
|
$
|
(461)
|
|
|
$
|
(269)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
Valuation allowances at the end of 2020 primarily relate to tax credits, capital loss carryforwards, and income tax loss carryforwards of $958. If these items are not utilized against taxable income, $441 of the income tax loss carryforwards will expire from 2021 through 2040. The remaining $517 has no expiration date.
Realization of income tax loss carryforwards is dependent on generating sufficient taxable income prior to expiration of these carryforwards. Although realization is not assured, we believe it is more likely than not that all of the deferred tax assets, net of applicable valuation allowances, will be realized. The amount of the deferred tax assets considered realizable could be reduced or increased due to changes in the tax environment or if estimates of future taxable income change during the carryforward period.
Presented below is a reconciliation of the income tax provision computed at the U.S. federal statutory tax rate to the actual effective tax rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
|
|
2020
|
|
2019
|
|
2018
|
|
U.S. statutory rate applied to income before income taxes
|
21.0
|
%
|
|
21.0
|
%
|
|
21.0
|
%
|
|
State income taxes, net of federal tax benefit
|
2.3
|
|
|
2.5
|
|
|
3.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Routine tax incentives
|
(4.3)
|
|
|
(3.5)
|
|
|
(5.4)
|
|
|
Net tax cost on foreign income
|
2.7
|
|
|
1.5
|
|
|
1.6
|
|
|
Net impact of the Tax Act
|
—
|
|
|
—
|
|
|
6.4
|
|
|
Valuation allowance
|
0.7
|
|
|
1.0
|
|
|
1.6
|
|
|
Nonrecurring capital loss
|
—
|
|
|
(1.8)
|
|
|
—
|
|
|
Other - net(a)
|
0.7
|
|
|
1.0
|
|
|
(2.9)
|
|
|
Effective income tax rate
|
23.1
|
%
|
|
21.7
|
%
|
|
26.0
|
%
|
(a) Other - net is composed of numerous items, none of which is greater than 1.05 percent of income before income taxes.
As of December 31, 2020, we have accumulated undistributed earnings generated by our foreign subsidiaries of approximately $7.9 billion. Earnings of $5.2 billion were previously subject to tax, primarily due to the one-time transition tax on foreign earnings required by the Tax Act. Any additional taxes due with respect to such previously-taxed earnings, if repatriated, would generally be limited to foreign and U.S. state income taxes. Deferred taxes have been recorded on $0.7 billion of earnings, most of which were previously taxed for U.S. federal income tax purposes, of foreign consolidated subsidiaries expected to be repatriated. We do not intend to distribute the remaining $4.5 billion of previously-taxed foreign earnings and therefore have not recorded deferred taxes for foreign and U.S. state income taxes on such earnings.
Prior to the transition tax, we had an excess of the amount for financial reporting over the tax basis in our foreign subsidiaries. While the transition tax resulted in a reduction of the excess amount for financial reporting over the tax basis in our foreign subsidiaries, any remaining amount of financial reporting over tax basis after such reduction could be subject to additional taxes, if repatriated. However, we consider any excess to be indefinitely reinvested. The determination of deferred tax liabilities on the amount of financial reporting over tax basis or the $4.5 billion of previously taxed foreign earnings is not practicable.
Presented below is a reconciliation of the beginning and ending amounts of unrecognized income tax benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
Balance at January 1
|
$
|
383
|
|
|
$
|
298
|
|
|
$
|
354
|
|
|
Gross increases for tax positions of prior years
|
144
|
|
|
36
|
|
|
75
|
|
|
Gross decreases for tax positions of prior years
|
(34)
|
|
|
(13)
|
|
|
(86)
|
|
|
Gross increases for tax positions of the current year
|
36
|
|
|
87
|
|
|
41
|
|
|
Settlements
|
(22)
|
|
|
(13)
|
|
|
(70)
|
|
|
Other
|
(10)
|
|
|
(12)
|
|
|
(16)
|
|
|
Balance at December 31
|
$
|
497
|
|
|
$
|
383
|
|
|
$
|
298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
Of the amounts recorded as unrecognized tax benefits at December 31, 2020, $427 would reduce our effective tax rate if recognized.
We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. During each of the three years ended December 31, 2020, the net impact of interest and penalties was not significant. Total accrued penalties and net accrued interest was $20 and $16 at December 31, 2020 and 2019, respectively.
It is reasonably possible that a number of uncertainties could be resolved within the next 12 months. The aggregate resolution of the uncertainties could be up to $180, while none of the uncertainties is individually significant. Resolution of these matters is not expected to have a material effect on our financial condition, results of operations or liquidity.
As of December 31, 2020, the following tax years remain subject to examination for the major jurisdictions where we conduct business:
|
|
|
|
|
|
|
|
Jurisdiction
|
Years
|
|
United States
|
2016 to 2020
|
|
United Kingdom
|
2017 to 2020
|
|
Brazil
|
2015 to 2020
|
|
Australia
|
2014 to 2020
|
|
China
|
2009 to 2020
|
Our U.S. federal income tax returns have been audited through 2015 and U.S. federal income tax amended returns are being audited for 2005, 2007 and 2013.
State income tax returns are generally subject to examination for a period of 3 to 5 years after filing of the respective return. The state effect of any changes to filed federal positions remains subject to examination by various states for a period of up to two years after formal notification to the states. We have various state income tax return positions in the process of examination, administrative appeals or litigation.
The Brazilian tax authority, Secretaria da Receita Federal do Brasil ("RFB"), concluded an audit for the taxable periods from 2008-2013. This audit included a review of our determinations of amortization of certain goodwill arising from prior acquisitions in Brazil, and the RFB has proposed adjustments that effectively eliminate the goodwill amortization benefits related to these transactions. Administrative appeals have been exhausted, and the dispute is moving into the judicial phase. The amount of the proposed tax adjustments and penalties is approximately $70 as of December 31, 2020 (translated at the December 31, 2020 currency exchange rate). The amount ultimately in dispute will be significantly greater because of interest. We believe we have meritorious defenses and intend to vigorously defend against these proposed adjustments; however, it is expected to take a number of years to reach resolution of this matter.
The U.S. Internal Revenue Service ("IRS") is currently auditing our federal tax return for the taxable year ended December 31, 2017. As part of this tax audit, the IRS is reviewing our one-time transition tax on certain undistributed earnings of foreign subsidiaries under the Tax Act. The IRS has proposed an adjustment that would increase the amount of the transition tax owed by us. We believe we have adequate reserves and meritorious defenses and intend to vigorously defend against the proposed adjustment; however, it is expected to take a number of years to reach resolution of this matter.
Note 13. Earnings Per Share ("EPS")
There are no adjustments required to be made to net income for purposes of computing basic and diluted EPS. The average number of common shares outstanding is reconciled to those used in the basic and diluted EPS computations as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of shares)
|
|
2020
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
340.7
|
|
|
343.6
|
|
|
348.0
|
|
|
Dilutive effect of stock options and restricted share unit awards
|
|
1.8
|
|
|
2.0
|
|
|
1.6
|
|
|
Diluted
|
|
342.5
|
|
|
345.6
|
|
|
349.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54
|
KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
Options outstanding that were not included in the computation of diluted EPS because their exercise price was greater than the average market price of the common shares were insignificant. The number of common shares outstanding as of December 31, 2020, 2019 and 2018 was 338.7, 341.4 and 345.0, respectively.
Note 14. Business Segment Information
We are organized into operating segments based on product groupings. These operating segments have been aggregated into three reportable global business segments: Personal Care, Consumer Tissue and K-C Professional. The reportable segments were determined in accordance with how our chief operating decision maker and our executive managers develop and execute global strategies to drive growth and profitability. 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 and income and expense not associated with ongoing operations of the business segments, including the costs of corporate decisions related to the 2018 Global Restructuring Program described in Note 2, acquisition-related costs associated with the acquisition of Softex Indonesia as described in Note 3, and business tax credits related to the resolution of certain Brazil tax matters as described in Note 1.
The principal sources of revenue in each global business segment are described below:
•Personal Care brands offer our consumers a trusted partner in caring for themselves and their families by delivering confidence, protection and discretion through a wide variety of innovative solutions and products such as disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, and other related products. Products in this segment are sold under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Sweety, Kotex, U by Kotex, Intimus, Depend, Plenitud, Softex, Poise and other brand names.
•Consumer Tissue offers a wide variety of innovative solutions and trusted brands that responsibly improve everyday living for families around the world. Products in this segment include facial and bathroom tissue, paper towels, napkins and related products, and are sold under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Neve and other brand names.
•K-C Professional partners with businesses to create Exceptional Workplaces, helping to make them healthier, safer and more productive through a range of solutions and supporting products such as wipers, tissue, towels, apparel, soaps and sanitizers. Our brands, including Kleenex, Scott, WypAll, Kimtech and KleenGuard are well known for quality and trusted to help people around the world work better.
Net sales to Walmart Inc. as a percent of our consolidated net sales were approximately 15 percent in 2020 and 14 percent 2019 and 2018, respectively. Net sales to Walmart Inc. were primarily in the Personal Care and Consumer Tissue segments.
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KIMBERLY-CLARK CORPORATION - 2020 Annual Report
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Information concerning consolidated operations by business segment is presented in the following tables:
Consolidated Operations by Business Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
|
|
2020
|
|
2019
|
|
2018
|
|
NET SALES(a)
|
|
|
|
|
|
|
Personal Care
|
$
|
9,339
|
|
|
$
|
9,108
|
|
|
$
|
9,037
|
|
|
Consumer Tissue
|
6,718
|
|
|
5,993
|
|
|
6,015
|
|
|
K-C Professional
|
3,019
|
|
|
3,292
|
|
|
3,382
|
|
|
Corporate & Other
|
64
|
|
|
57
|
|
|
52
|
|
|
TOTAL NET SALES
|
$
|
19,140
|
|
|
$
|
18,450
|
|
|
$
|
18,486
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT(b)
|
|
|
Personal Care
|
$
|
1,933
|
|
|
$
|
1,904
|
|
|
$
|
1,833
|
|
|
Consumer Tissue
|
1,448
|
|
|
1,007
|
|
|
875
|
|
|
K-C Professional
|
528
|
|
|
657
|
|
|
634
|
|
|
Corporate & Other(c)
|
(719)
|
|
|
(787)
|
|
|
(1,112)
|
|
|
Other (income) and expense, net(d)
|
(54)
|
|
|
(210)
|
|
|
1
|
|
|
TOTAL OPERATING PROFIT
|
$
|
3,244
|
|
|
$
|
2,991
|
|
|
$
|
2,229
|
|
(a)Net sales in the U.S. to third parties totaled $9,679, $9,027 and $8,803 in 2020, 2019 and 2018, respectively. No other individual country's net sales exceeds 10 percent of total net sales.
(b) Segment operating profit excludes Other (income) and expense, net and income and expenses not associated with the business segments.
(c) Corporate & Other includes charges of $392, $515 and $921 related to the 2018 Global Restructuring Program in 2020, 2019 and 2018, respectively. Restructuring charges for the 2018 Global Restructuring Program related to the Personal Care, Consumer Tissue and K-C Professional business segments were $156, $176 and $53 for 2020, $252, $176 and $75 for 2019 and $528, $229 and $125 for 2018, respectively. Corporate & Other also includes acquisition-related costs of $32 associated with the acquisition of Softex Indonesia in 2020.
(d) Other (income) and expense, net for 2020 includes business tax credits of $77 related to a favorable legal ruling that resolved certain matters related to prior years' business taxes in Brazil.. For 2019, it includes income of $31 from a gain on the sale of property associated with a former manufacturing facility that was closed in 2012 as part of a past restructuring, and for 2019 and 2018, it includes income of $194 and $12 related to the 2018 Global Restructuring Program.
|
|
|
|
|
|
|
|
|
|
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KIMBERLY-CLARK CORPORATION - 2020 Annual Report
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Care
|
|
Consumer
Tissue
|
|
K-C
Professional
|
|
Corporate
& Other
|
|
Total
|
|
Depreciation and Amortization
|
|
|
|
|
|
|
|
|
|
|
2020
|
$
|
347
|
|
|
$
|
334
|
|
|
$
|
111
|
|
|
$
|
4
|
|
|
$
|
796
|
|
|
2019
|
430
|
|
|
372
|
|
|
111
|
|
|
4
|
|
|
917
|
|
|
2018
|
426
|
|
|
331
|
|
|
121
|
|
|
4
|
|
|
882
|
|
|
Capital Spending
|
|
|
|
|
|
|
|
|
|
|
2020
|
616
|
|
|
391
|
|
|
204
|
|
|
6
|
|
|
1,217
|
|
|
2019
|
518
|
|
|
489
|
|
|
195
|
|
|
7
|
|
|
1,209
|
|
|
2018
|
415
|
|
|
299
|
|
|
157
|
|
|
6
|
|
|
877
|
|
|
Goodwill(a)
|
|
|
|
|
|
|
|
|
|
|
2020
|
984
|
|
|
519
|
|
|
392
|
|
|
—
|
|
|
1,895
|
|
|
2019
|
557
|
|
|
522
|
|
|
388
|
|
|
—
|
|
|
1,467
|
|
|
2018
|
564
|
|
|
522
|
|
|
388
|
|
|
—
|
|
|
1,474
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
2020
|
8,486
|
|
|
5,227
|
|
|
2,551
|
|
|
1,259
|
|
|
17,523
|
|
|
2019
|
6,630
|
|
|
4,954
|
|
|
2,442
|
|
|
1,257
|
|
|
15,283
|
|
|
2018
|
6,208
|
|
|
4,738
|
|
|
2,285
|
|
|
1,287
|
|
|
14,518
|
|
(a ) Changes in Goodwill are related to the acquisition of Softex Indonesia and currency.
Sales of Principal Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Billions of dollars)
|
|
2020
|
|
2019
|
|
2018
|
|
Baby and child care products
|
|
$
|
6.4
|
|
|
$
|
6.3
|
|
|
$
|
6.3
|
|
|
Consumer tissue products
|
|
6.7
|
|
|
6.0
|
|
|
6.0
|
|
|
Away-from-home professional products
|
|
3.0
|
|
|
3.3
|
|
|
3.4
|
|
|
All other
|
|
3.0
|
|
|
2.9
|
|
|
2.8
|
|
|
Consolidated
|
|
$
|
19.1
|
|
|
$
|
18.5
|
|
|
$
|
18.5
|
|
Note 15. Supplemental Data
Supplemental Income Statement Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
|
|
2020
|
|
2019
|
|
2018
|
|
Advertising expense
|
$
|
956
|
|
|
$
|
757
|
|
|
$
|
655
|
|
|
Research expense
|
276
|
|
|
284
|
|
|
317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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KIMBERLY-CLARK CORPORATION - 2020 Annual Report
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Equity Companies' Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
Gross
Profit
|
|
Operating
Profit
|
|
Net
Income
|
|
Corporation's
Share of Net
Income
|
|
2020
|
$
|
2,358
|
|
|
$
|
786
|
|
|
$
|
507
|
|
|
$
|
299
|
|
|
$
|
142
|
|
|
2019
|
2,379
|
|
|
727
|
|
|
454
|
|
|
255
|
|
|
123
|
|
|
2018
|
2,264
|
|
|
635
|
|
|
388
|
|
|
215
|
|
|
103
|
|
|
|
Current
Assets
|
|
Noncurrent
Assets
|
|
Current
Liabilities
|
|
Noncurrent
Liabilities
|
|
Stockholders'
Equity
|
|
2020
|
$
|
1,585
|
|
|
$
|
1,203
|
|
|
$
|
842
|
|
|
$
|
1,563
|
|
|
$
|
382
|
|
|
2019
|
1,020
|
|
|
1,275
|
|
|
749
|
|
|
1,196
|
|
|
350
|
|
|
2018
|
921
|
|
|
1,247
|
|
|
578
|
|
|
1,237
|
|
|
353
|
|
Equity companies are principally engaged in operations in the personal care and consumer tissue businesses. At December 31, 2020, our ownership interest in KCM and subsidiaries was 47.9 percent. KCM is partially owned by the public, and its stock is publicly traded in Mexico. At December 31, 2020, our investment in this equity company was $190, and the estimated fair value of the investment was $2.5 billion based on the market price of publicly traded shares. Our other equity ownership interests are not significant to our consolidated balance sheet or financial results.
At December 31, 2020, undistributed net income of equity companies included in consolidated retained earnings was $1.1 billion.
Supplemental Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
Summary of Accounts Receivable, Net
|
2020
|
|
2019
|
|
From customers
|
$
|
2,132
|
|
|
$
|
2,131
|
|
|
Other
|
153
|
|
|
181
|
|
|
Less allowance for doubtful accounts and sales discounts
|
(50)
|
|
|
(49)
|
|
|
Total
|
$
|
2,235
|
|
|
$
|
2,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
|
2020
|
|
2019
|
|
Summary of Inventories by Major Class
|
LIFO
|
|
Non-
LIFO
|
|
Total
|
|
LIFO
|
|
Non-
LIFO
|
|
Total
|
|
Raw materials
|
$
|
131
|
|
|
$
|
263
|
|
|
$
|
394
|
|
|
$
|
85
|
|
|
$
|
236
|
|
|
$
|
321
|
|
|
Work in process
|
103
|
|
|
86
|
|
|
189
|
|
|
113
|
|
|
93
|
|
|
206
|
|
|
Finished goods
|
453
|
|
|
749
|
|
|
1,202
|
|
|
451
|
|
|
696
|
|
|
1,147
|
|
|
Supplies and other
|
—
|
|
|
263
|
|
|
263
|
|
|
—
|
|
|
271
|
|
|
271
|
|
|
|
687
|
|
|
1,361
|
|
|
2,048
|
|
|
649
|
|
|
1,296
|
|
|
1,945
|
|
|
Excess of FIFO or weighted-average cost over LIFO cost
|
(145)
|
|
|
—
|
|
|
(145)
|
|
|
(155)
|
|
|
—
|
|
|
(155)
|
|
|
Total
|
$
|
542
|
|
|
$
|
1,361
|
|
|
$
|
1,903
|
|
|
$
|
494
|
|
|
$
|
1,296
|
|
|
$
|
1,790
|
|
Inventories are valued at the lower of cost or net realizable value, determined on the FIFO or weighted-average cost methods, and at the lower of cost or market, determined on the LIFO cost method.
|
|
|
|
|
|
|
|
|
|
|
|
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KIMBERLY-CLARK CORPORATION - 2020 Annual Report
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
Summary of Property, Plant and Equipment, Net
|
2020
|
|
2019
|
|
Land
|
$
|
174
|
|
|
$
|
165
|
|
|
Buildings
|
2,932
|
|
|
2,877
|
|
|
Machinery and equipment
|
14,382
|
|
|
13,946
|
|
|
Construction in progress
|
845
|
|
|
851
|
|
|
|
18,333
|
|
|
17,839
|
|
|
Less accumulated depreciation
|
(10,291)
|
|
|
(10,389)
|
|
|
Total
|
$
|
8,042
|
|
|
$
|
7,450
|
|
Property, plant and equipment, net in the U.S. as of December 31, 2020 and 2019 was $3,981 and $3,787, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
Summary of Accrued Expenses and Other Current Liabilities
|
2020
|
|
2019
|
|
Accrued advertising and promotion
|
$
|
443
|
|
|
$
|
415
|
|
|
Accrued salaries and wages
|
531
|
|
|
463
|
|
|
Accrued rebates
|
255
|
|
|
241
|
|
|
Accrued taxes - income and other
|
332
|
|
|
231
|
|
|
Operating leases
|
133
|
|
|
130
|
|
|
Accrued restructuring
|
73
|
|
|
93
|
|
|
Accrued interest
|
87
|
|
|
81
|
|
|
Other
|
408
|
|
|
324
|
|
|
Total
|
$
|
2,262
|
|
|
$
|
1,978
|
|
Supplemental Cash Flow Statement Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Cash Flow Effects of Operating Working Capital
|
Year Ended December 31
|
|
2020
|
|
2019
|
|
2018
|
|
Accounts receivable
|
$
|
95
|
|
|
$
|
(116)
|
|
|
$
|
33
|
|
|
Inventories
|
(96)
|
|
|
24
|
|
|
(127)
|
|
|
Trade accounts payable
|
239
|
|
|
(153)
|
|
|
392
|
|
|
Accrued expenses
|
132
|
|
|
11
|
|
|
115
|
|
|
Accrued income taxes
|
42
|
|
|
(6)
|
|
|
64
|
|
|
Derivatives
|
(9)
|
|
|
1
|
|
|
30
|
|
|
Currency and other
|
(40)
|
|
|
(49)
|
|
|
(118)
|
|
|
Total
|
$
|
363
|
|
|
$
|
(288)
|
|
|
$
|
389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
|
Other Cash Flow Data
|
2020
|
|
2019
|
|
2018
|
|
Interest paid
|
$
|
245
|
|
|
$
|
255
|
|
|
$
|
264
|
|
|
Income taxes paid
|
533
|
|
|
528
|
|
|
395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59
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KIMBERLY-CLARK CORPORATION - 2020 Annual Report
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