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Filed pursuant to Rule 424(b)(5)
SEC File No. 333-105990
Prospectus Supplement
(To Prospectus Dated August 8, 2005)
$300,000,000
4.875% Notes due 2015
Interest payable February 15 and August 15
Issue Price: 99.616%
The notes will mature on August 15, 2015. The notes will bear interest at a rate of 4.875%. Interest on the notes will accrue from August 11, 2005. We may redeem some or all of the notes at any time at the redemption prices described beginning on page S-3. There is no sinking fund for the notes.
The notes will be unsecured obligations and will rank equally with all our other unsecured and unsubordinated indebtedness.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities or passed upon the accuracy or adequacy of this prospectus supplement or the prospectus. Any representation to the contrary is a criminal offense.
| Price to Public1 | Underwriting Discounts |
Proceeds, Before Expenses, to Kimberly-Clark | |||||||
| Per Note |
99.616% | .650% | 98.966% | ||||||
| Total |
$ | 298,848,000 | $ | 1,950,000 | $ | 296,898,000 | |||
| 1 | Plus accrued interest from August 11, 2005, if settlement occurs after that date. |
The notes will not be listed on any securities exchange or quoted on the Nasdaq National Market.
We expect to deliver the notes to investors in registered book-entry form only through The Depository Trust Company on or about August 11, 2005.
Joint Book Running Managers
| Citigroup |
JPMorgan |
Banc of America Securities LLC
Barclays Capital
HSBC
UBS Investment Bank
Goldman Sachs & Co.
Merrill Lynch & Co.
August 8, 2005
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About this prospectus supplement
You should read this prospectus supplement and the accompanying prospectus carefully before you invest. You should rely only on the information contained in or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not, and the underwriters have not, authorized anyone to give you different information. If anyone gives you different or inconsistent information, you should not rely on it. This prospectus supplement may add to, update or change information in the prospectus. The information contained in this prospectus supplement is current only as of the date appearing at the bottom of the cover. Since that date, our business, financial condition, results of operations and prospects may have changed.
In this prospectus supplement and the accompanying prospectus, unless we otherwise specify or the context otherwise requires, references to “Kimberly-Clark,” “we,” “us,” and “our” refer to Kimberly-Clark Corporation and its subsidiaries.
We are not, and the underwriters are not, offering to sell or seeking offers to buy securities in any jurisdiction where the offer or sale is not permitted.
This prospectus supplement and the accompanying prospectus do not contain all of the information contained in the registration statement and its exhibits which we filed with the Securities and Exchange Commission. You should read the registration statement and its exhibits for information that may be of interest to you. For information on obtaining a copy of the registration statement, see “Where to find more information” in the prospectus.
The net proceeds to be received by us from the sale of the notes, before deducting our offering expenses, is estimated to be $296,898,000. We intend to use the net proceeds from the sale of the notes for general corporate purposes and for reduction of our existing indebtedness, including a portion of our currently outstanding commercial paper.
Until we actually apply such proceeds, we will invest them in short-term securities. At June 30, 2005, our consolidated short-term debt and current portion of long-term debt approximated $1.1 billion, which includes outstanding commercial paper of approximately $515.0 million. Our outstanding commercial paper matures no later than 90 days after its date of issue and bears interest at rates ranging from approximately 3.05% to 3.26% per annum.
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Kimberly-Clark Corporation and Subsidiaries
We derived the selected consolidated financial data below from our consolidated financial statements and accompanying notes, some of which are incorporated by reference in this prospectus supplement. This information is only a summary. This information should be read together with our historical financial statements and related notes and our “Management Discussion and Analysis of Financial Condition and Results of Operations,” which are incorporated by reference in this prospectus supplement.
| Six Months Ended June 30 |
Year Ended December 31(a) | |||||||||||||||||||||
| (in millions, except per share amounts) | 2005 | 2004(a) | 2004 | 2003 | 2002(b) | 2001(b)(c) | 2000(b)(c) | |||||||||||||||
| Net Sales |
$ | 7,892.9 | $ | 7,398.8 | $ | 15,083.2 | $ | 14,026.3 | $ | 13,231.5 | $ | 12,923.6 | $ | 12,468.5 | ||||||||
| Gross Profit |
2,629.2 | 2,510.5 | 5,068.5 | 4,794.4 | 4,693.8 | 4,573.8 | 4,523.9 | |||||||||||||||
| Operating Profit |
1,273.8 | 1,248.1 | 2,506.4 | 2,331.6 | 2,368.3 | 2,272.9 | 2,507.9 | |||||||||||||||
| Share of Net Income of Equity Companies |
66.4 | 60.8 | 124.8 | 107.0 | 113.3 | 154.4 | 186.4 | |||||||||||||||
| Income from: |
||||||||||||||||||||||
| Continuing Operations |
871.9 | 886.7 | 1,770.4 | 1,643.6 | 1,627.4 | 1,571.1 | 1,723.5 | |||||||||||||||
| Discontinued Operations, net of income taxes |
— | 26.9 | 29.8 | 50.6 | 58.6 | 38.8 | 77.1 | |||||||||||||||
| Cumulative effect of accounting change, net of income taxes |
— | — | — | — | (11.4 | ) | — | — | ||||||||||||||
| Net Income |
871.9 | 913.6 | 1,800.2 | 1,694.2 | 1,674.6 | 1,609.9 | 1,800.6 | |||||||||||||||
| Per Share Basis: |
||||||||||||||||||||||
| Basic |
||||||||||||||||||||||
| Continuing Operations |
1.82 | 1.77 | 3.58 | 3.24 | 3.15 | 2.97 | 3.19 | |||||||||||||||
| Discontinued Operations |
— | .05 | .06 | .10 | .11 | .07 | .15 | |||||||||||||||
| Cumulative effect of accounting change, net of income taxes |
— | — | — | — | (.02 | ) | — | — | ||||||||||||||
| Net Income |
1.82 | 1.82 | 3.64 | 3.34 | 3.24 | 3.04 | 3.34 | |||||||||||||||
| Diluted |
||||||||||||||||||||||
| Continuing Operations |
1.81 | 1.76 | 3.55 | 3.23 | 3.13 | 2.95 | 3.17 | |||||||||||||||
| Discontinued Operations |
— | .05 | .06 | .10 | .11 | .07 | .14 | |||||||||||||||
| Cumulative effect of accounting change, net of income taxes |
— | — | — | — | (.02 | ) | — | — | ||||||||||||||
| Net Income |
1.81 | 1.81 | 3.61 | 3.33 | 3.22 | 3.02 | 3.31 | |||||||||||||||
| Cash Dividends Per Share |
||||||||||||||||||||||
| Declared |
.90 | .80 | 1.60 | 1.36 | 1.20 | 1.12 | 1.08 | |||||||||||||||
| Paid |
.85 | .74 | 1.54 | 1.32 | 1.18 | 1.11 | 1.07 | |||||||||||||||
| Total Assets |
$ | 16,605.2 | $ | 16,724.1 | $ | 17,018.0 | $ | 16,779.9 | $ | 15,639.6 | $ | 15,059.1 | $ | 14,520.7 | ||||||||
| Long-Term Debt |
2,306.1 | 2,772.9 | 2,298.0 | 2,733.7 | 2,844.0 | 2,424.0 | 2,000.6 | |||||||||||||||
| Stockholders’ Equity |
6,386.2 | 6,762.8 | 6,629.5 | 6,766.3 | 5,650.3 | 5,646.9 | 5,767.3 | |||||||||||||||
| (a) | Income statement data present the results of Neenah Paper’s fine and technical papers businesses as discontinued operations. |
| (b) | During 2001, the Emerging Issues Task Force (“EITF”) of the Financial Accounting Standards Board (“FASB”) issued EITF 01-9, Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor’s Products. Under EITF 01-9, the cost of promotion activities offered to customers is classified as a reduction in sales revenue. In addition, the estimated redemption value of consumer coupons is required to be recorded at the time the coupons are issued and classified as a reduction in sales revenue. The Corporation adopted EITF 01-9 effective January 1, 2002, and reclassified the expected redemption value of coupons and other applicable promotional activities from expense to a reduction in revenue, which reduced net sales by $1.1 billion for 2000 and $1.2 billion for 2001. The adoption of EITF 01-9 did not change reported earnings for prior years but did require the recording of a cumulative effect of a change in accounting principle in 2002, equal to an after-tax charge of approximately $.02 per share, which resulted from a change in the period for recognizing the costs of coupons. |
| (c) | On January 1, 2002, the Corporation adopted Statement of Financial Accounting Standards (“SFAS”) 142, Goodwill and Other Intangible Assets. Under this standard, goodwill and intangible assets having indefinite lives are no longer amortized but are subject to annual impairment tests with any impairment loss recognized in the period of impairment. The Corporation recorded goodwill amortization of $87.7 million in 2000 and $94.4 million in 2001. The effect of this amortization, net of applicable income taxes, on basic and diluted earnings per share was $.16 in 2000 and $.18 in 2001. |
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The following summary of the terms of the notes supplements the general description of debt securities contained in the prospectus. To the extent the following terms are inconsistent with the general description contained in the prospectus, the following terms replace such inconsistent terms. You should read both the prospectus and this prospectus supplement.
General
The notes will be limited to $300,000,000 aggregate principal amount and will mature on August 15, 2015. The notes will bear interest at the rate per annum of 4.875% from August 11, 2005 or from the most recent interest payment date to which interest has been paid or provided. We will pay accrued interest semi-annually on February 15 and August 15 of each year to the person in whose name the note is registered at the close of business on February 1 and August 1, as the case may be, that precedes such interest payment date. The first such payment will be made on February 15, 2006. The notes will not be entitled to the benefit of any sinking fund.
The notes will be issued under the first amended and restated indenture dated as of March 1, 1988, as amended by the first and second supplemental indenture dated November 6, 1992 and May 25, 1994, respectively. J.P. Morgan Trust Company, National Association is the successor trustee under such indenture.
The notes issued under the indenture will be our unsecured obligations and will rank equally with all of our other unsecured and unsubordinated indebtedness. The indenture does not limit the aggregate principal amount of debt securities that may be issued thereunder and provides that debt securities may be issued thereunder from time to time in one or more additional series. We may from time to time, without notice to or the consent of the registered holders of the notes, create and issue additional debt securities having the same terms as and ranking equally and ratably with the notes issued in this offering in all respects (or in all respects except for the payment of interest accruing prior to the issue date of such additional debt securities or except for the first payment of interest following the issue date of such additional debt securities), so that such additional debt securities shall be consolidated and form a single series with, and shall have the same terms as to status, redemption or otherwise as, the notes of this offering.
Optional redemption
Meaning of terms
We may redeem the notes at our option as described below. See “Optional redemption—Our redemption rights.” The following terms are relevant to the determination of the redemption price:
When we use the term “Treasury Rate”, we mean with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue. In determining this rate, we assume a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
When we use the term “Comparable Treasury Issue,” we mean the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection and
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in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes.
“Independent Investment Banker” means J.P. Morgan Securities Inc. and its respective successors as may be appointed from time to time by the trustee after consultation with Kimberly-Clark; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), we shall substitute therefor another Primary Treasury Dealer.
When we use the term “Comparable Treasury Price”, we mean with respect to any redemption date, the arithmetic average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third business day preceding such redemption date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated “Composite 3:30 p.m. Quotations for U.S. Government Securities.” If such release (or any successor release) is not published or does not contain such prices on such business day, then Comparable Treasury Price would mean the arithmetic average of the Reference Treasury Dealer Quotations for such redemption date.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the arithmetic average, as determined by the trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by such Reference Treasury Dealer by 5:00 p.m. on the third business day preceding such redemption date.
“Reference Treasury Dealer” means J.P. Morgan Securities Inc. and its successors; provided, however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor another Primary Treasury Dealer.
When we use the term “Remaining Scheduled Payments,” we mean with respect to any note, the remaining scheduled payments of the principal thereof to be redeemed and interest thereon that would be due after the related redemption date but for such redemption; provided, however, that, if such redemption date is not an interest payment date with respect to such note, the amount of the next scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to such redemption date.
Our redemption rights
We may redeem the notes at our option and at any time, either as a whole or in part. If we elect to redeem the notes, we will pay a redemption price equal to the greater of
| • | 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, and |
| • | the sum of the present values of the Remaining Scheduled Payments, plus accrued and unpaid interest. |
In determining the present value of the Remaining Scheduled Payments, we will discount such payments to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using a discount rate equal to the Treasury Rate plus ten (10) basis points. A partial redemption of the notes may be effected by such method as the trustee shall deem fair
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and appropriate and may provide for the selection for redemption of portions (equal to the minimum authorized denomination for the notes or any integral multiple thereof) of the principal amount of notes of a denomination larger than the minimum authorized denomination for the notes.
Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of notes to be redeemed.
Unless we default in payment of the redemption price, on and after the redemption date interest will cease to accrue on the notes or portions thereof called for redemption.
Defeasance and Covenant Defeasance
The provisions of Sections 402 and 1006 of the indenture relating to defeasance as described under “Description of debt securities—Defeasance and Covenant Defeasance” in the accompanying prospectus will apply to the notes.
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Subject to the terms and conditions set forth in the underwriting agreement among us and each of the underwriters named below, dated as of August 8, 2005, we have agreed to sell to the underwriters, and each of the underwriters severally and not jointly has agreed to purchase from us, the aggregate principal amount of the notes set forth opposite its name below:
| Underwriters | Principal Amount | ||
| Citigroup Global Markets Inc. |
$ | 90,000,000 | |
| J.P. Morgan Securities Inc. |
90,000,000 | ||
| Banc of America Securities LLC |
23,100,000 | ||
| Barclays Capital Inc. |
23,100,000 | ||
| HSBC Securities (USA) Inc. |
23,100,000 | ||
| UBS Securities LLC |
23,100,000 | ||
| Goldman, Sachs & Co. |
13,800,000 | ||
| Merrill Lynch, Pierce, Fenner & Smith Incorporated. |
13,800,000 | ||
| Total |
$ | 300,000,000 | |
Under the terms and conditions of the underwriting agreement, if the underwriters take any of the notes, then they are obligated to take and pay for all the notes.
The notes are a new issue of securities with no established trading market and will not be listed on any national securities exchange. The underwriters have advised us that they intend to make a market for the notes, but they have no obligation to do so and may discontinue market-making at any time without providing any notice. No assurance can be given as to the liquidity of any trading market for the notes.
The underwriters initially propose to offer part of the notes directly to the public at the offering price described on the cover page of this prospectus supplement and part of the notes to certain dealers at a price that represents a concession not in excess of .40% of the principal amount of the notes. The underwriters may allow, and any such dealer may reallow, a concession not in excess of .25% of the principal amount of the notes to certain other dealers. After the initial offering of the notes, the underwriters may from time to time vary the offering price and other selling terms. This offering is being conducted pursuant to Conduct Rule 2710(h) of the National Association of Securities Dealers, Inc., or NASD.
We have also agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments which the underwriters may be required to make in respect of any such liabilities.
In connection with the offering of the notes, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the notes. Specifically, the underwriters may overallot in connection with the offering of the notes, creating a short position. In addition, the underwriters may bid for, and purchase, notes in the open market to cover short positions or to stabilize the price of the notes. Any of these activities may stabilize or maintain the market price of the notes above independent market levels. The underwriters are not required to engage in any of these activities, and may end any of them at any time.
Our expenses associated with this offering, to be paid by us, are estimated to be $150,000.
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J.P. Morgan Securities Inc. will make the notes available for distribution on the internet through a proprietary web site and/or a third-party system operated by MarketAxess Corporation, an internet-based communications technology provider. MarketAxess Corporation is providing the system as a conduit for communications between J.P. Morgan Securities Inc. and its respective customers and is not a party to any transactions. MarketAxess Corporation, a registered broker-dealer, will receive compensation from J.P. Morgan Securities Inc. based on transactions they conduct through the system. J.P. Morgan Securities Inc. will make the notes available to its respective customers through the Internet distributions, whether made through a proprietary or third-party system, on the same terms as distributions made through other channels.
In the ordinary course of their respective businesses, certain of the underwriters or their affiliates have engaged, and may in the future engage, in commercial banking and/or investment banking transactions with us and our affiliates. In particular, certain of the underwriters or their affiliates, are lenders under our existing syndicated revolving credit facility.
J.P. Morgan Trust Company, National Association, has been appointed as trustee under the indenture for the notes. J.P. Morgan Chase Bank, National Association, an affiliate of the trustee, is a lender under our syndicated credit facility. J.P. Morgan Trust Company, National Association and J.P. Morgan Chase Bank, National Association are affiliates of J.P. Morgan Securities Inc., an underwriter in this offering.
The validity of the notes offered hereby is being passed upon for Kimberly-Clark by Ronald D. Mc Cray, Esq., Senior Vice President—Law and Government Affairs and Chief Compliance Officer of Kimberly-Clark, and for the underwriters by Simpson Thacher & Bartlett LLP, New York, New York. As of August 1, 2005, Mr. Mc Cray owned 39,003.331 shares of our common stock, and held options to acquire 227,290 shares of such common stock (of which options to acquire 138,851 shares are presently exercisable or will become exercisable within 60 days of such date), and as of August 1, 2005, 6,145.779 shares of our common stock were attributable to his account under our Employees Incentive Investment Plan. In addition, Mr. Mc Cray owns 47,418 shares of our restricted stock. Mr. Mc Cray also participates in other employee benefit plans of Kimberly-Clark.
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Prospectus
Debt securities
We may offer and sell our debt securities from time to time for an aggregate initial public offering price of up to $1,000,000,000 or an equal amount in any other currency.
This prospectus describes the general terms of the debt securities. We will describe the specific terms of the debt securities in a prospectus supplement. You should read this prospectus and the prospectus supplement carefully before you invest.
We may offer the debt securities directly or through underwriters, agents or dealers. The prospectus supplement will give the names of these underwriters, agents or dealers and describe the specific terms of the plan of distribution for the offering.
This prospectus may not be used to sell securities unless it is accompanied by a prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the debt securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
August 8, 2005.
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Where to find more information
We have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 with respect to the debt securities that we may offer and sell. This prospectus is part of that registration statement. As permitted by the rules of the SEC, this prospectus does not contain all the information provided in the registration statement or the exhibits to the registration statement.
We file annual, quarterly and current reports, proxy and information statements, and other information with the SEC. You may read and copy any document we file at the SEC’s public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 for more information concerning its public reference rooms and regional offices. Our SEC filings also are available to the public from the SEC’s web site at http://www.sec.gov and on our website at http://www.kimberly-clark.com. The information on our website is not part of this prospectus. You also may inspect our SEC reports and other information at the New York Stock Exchange, 20 Broad Street, New York, New York 10005; the Chicago Stock Exchange, 440 South LaSalle, Chicago, Illinois 60605; and the Pacific Exchange, 301 Pine Street, San Francisco, California 94104.
The SEC allows us to “incorporate by reference” the information we file with it, which means we can disclose information to you by referring you to those documents. Information incorporated by reference is part of this prospectus. Later information filed with the SEC automatically updates and supersedes information in this prospectus.
We incorporate by reference the documents listed below and any future filings made with the SEC under sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this offering is completed:
| • | Our annual report on Form 10-K for the year ended December 31, 2004, including portions of our 2004 annual stockholders’ report and 2005 proxy statement incorporated by reference into the Form 10-K. |
| • | Our quarterly reports on Form 10-Q for the quarters ended March 31, 2005 and June 30, 2005. |
| • | Our current reports on Form 8-K filed on February 4, 2005 and June 17, 2005. |
We will provide to you at no charge, upon your written or oral request, a copy of these filings or any other information incorporated by reference in this prospectus, other than exhibits to the filings which are not specifically incorporated by reference. You may request this information by contacting us at Kimberly-Clark Corporation, P.O. Box 619100, Dallas, Texas 75261-9100 (telephone 972-281-1200); attention: Timothy C. Everett, Secretary.
Kimberly-Clark and its subsidiaries are principally engaged in the manufacturing and marketing of a wide range of health and hygiene products around the world. Most of these products are made from natural or synthetic fibers using advanced technologies in fibers, nonwovens and absorbency.
Kimberly-Clark is 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 Business-to-Business. The reportable segments are headed
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by executive officers who report to our Chief Executive Officer. These officers are responsible for the development and execution of global strategies to drive growth and profitability of our worldwide Personal Care, Consumer Tissue and Business-to-Business operations. These strategies include global plans for branding and product positioning, technology, research and development programs, cost reductions including supply chain management, and capacity and capital investments for each of these businesses.
The Personal Care segment manufactures and markets disposable diapers, training and youth pants and swimpants; baby wipes; feminine and incontinence care products; and related products. Products in this segment are primarily for household use and are sold under a variety of brand names, including Huggies, Pull-Ups, Little Swimmers, GoodNites, Kotex, Lightdays, Depend, Poise and other brand names.
The Consumer Tissue segment manufactures and markets facial and bathroom tissue, paper towels, napkins and related products for household use. Products in this segment are sold under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Hakle, Page, and other brand names.
The Business-to-Business segment manufactures and markets disposable, single use, health and hygiene products to the away-from-home marketplace. These products include facial and bathroom tissue, paper towels, napkins, wipers, surgical gowns, drapes, infection control products, sterilization wraps, disposable face masks and exam gloves, respiratory products, and other disposable medical products and other products. Products in this segment are sold under the Kimberly-Clark, Kleenex, Scott, Kimwipes, WypAll, Surpass, Safeskin, Tecnol, Ballard and other brand names.
Kimberly-Clark was incorporated in Delaware in 1928 as the successor to a business established in 1872. Our principal executive offices are located at 351 Phelps Drive, Irving, Texas 75038 and our telephone number is (972) 281-1200.
Ratio of earnings to fixed charges
Our ratio of earnings to fixed charges for the applicable six month periods and the last five years has been as follows:
| Six Months Ended June 30, |
Ratio of Earnings to Fixed Charges | |
| 2005 |
10.09 | |
| 2004 |
10.37 | |
| Year Ended December 31, |
Ratio of Earnings to Fixed Charges | |
| 2004 |
10.85 | |
| 2003 |
9.86 | |
| 2002 |
10.18 | |
| 2001 |
9.11 | |
| 2000 |
9.15 | |
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We intend to use the net proceeds from the sale of the debt securities for general corporate purposes. These purposes may include one or more of the following:
| • | reduction of our existing indebtedness; |
| • | working capital; |
| • | capital expenditures; |
| • | investments in subsidiaries and equity companies; |
| • | share repurchases; and/or |
| • | future acquisitions. |
Until we actually apply the proceeds, we will invest them in short-term securities.
Description of debt securities
The general provisions of the debt securities are described below. The specific terms of the debt securities and the extent, if any, to which the general provisions may not apply will be described in a prospectus supplement.
The debt securities will be issued under the first amended and restated indenture dated as of March 1, 1988, as amended by the first and second supplemental indentures dated as of November 6, 1992 and May 25, 1994, respectively, with J.P. Morgan Trust Company, National Association as successor trustee.
We have summarized the material provisions of the indenture below. The indenture has been filed as an exhibit to the registration statement and you should read the indenture for a complete statement of the provisions summarized in this prospectus and for provisions that may be important to you. For information on obtaining a copy of the indenture, see “Where to find more information” in this prospectus.
General
The debt securities will be limited to $1,000,000 of proceeds. They will be unsecured obligations and will rank equally and ratably with all of our other currently outstanding unsecured and unsubordinated debt. In addition to the debt securities that we may offer in this prospectus, we may issue additional debt in an unlimited amount in one or more series under the indenture or other agreements. This additional debt may contain provisions different from those included in the indenture or applicable to one or more series of debt securities.
Prospectus supplement
You should refer to the prospectus supplement for the following specific terms of the debt securities:
| • | their title; |
| • | any limits on their aggregate principal amount; |
| • | the initial offering price(s) at which they will be sold; |
| • | the dates on which the principal will be payable; |
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| • | the rate(s) (which may be fixed or variable) at which they will bear interest, if any, and the date(s) from which the interest, if any, will accrue; |
| • | the date(s) on which the interest, if any, will be payable and any record dates for the interest payments; |
| • | any sinking fund or similar provisions, whether mandatory or at your option, along with the periods, prices and terms of redemption, purchase or repayment; |
| • | any provisions for redemption or purchase, at our option or otherwise, including the periods, prices and terms of redemption or purchase; |
| • | the amount or percentage payable if their maturity is accelerated, if other than the entire principal amount; |
| • | the currency of our payments of principal, premium, if any, and interest, and any index used to determine the amounts of such payments; |
| • | any defeasance provisions with respect to the amount we owe, restrictive covenants and/or events of default; and |
| • | any other terms in addition to those described in this prospectus. |
We may issue debt securities as original issue discount securities to be offered and sold at a substantial discount from their principal amount. Special federal income tax, accounting and other considerations relating to original issue discount securities will be described in the prospectus supplement.
Unless otherwise indicated in the prospectus supplement, the covenants contained in the indenture and the debt securities would not necessarily protect you in the event of a highly leveraged or other transaction to which we are or may become a party.
Restrictive covenants
Meanings of terms
| • | When we use the term “attributable debt” in the context of a sale and lease-back transaction, we mean the present value of our obligation to pay rent. We exclude from this calculation any amounts we pay for maintenance and repairs, insurance, taxes, assessments, water rates or similar charges, or amounts contingent upon sales amounts. |
| • | When we use the term “consolidated net tangible assets,” we mean the total amount of our assets minus (a) applicable reserves, (b) current liabilities which are not extendible or renewable into, and do not reflect current maturities of, long-term debt, and (c) intangible assets. Our consolidated net tangible assets include any attributable debt with respect to a sale and lease-back transaction which is not capitalized on our balance sheet. |
| • | When we use the term “principal property,” we mean any of our United States manufacturing facilities which has an individual gross book value in excess of 1% of our consolidated net tangible assets and which is owned by us or any restricted subsidiary. If our board of directors decides that any facility is not of material importance, it will not be considered a principal property. |
| • | When we use the term “restricted subsidiary,” we mean any of our subsidiaries (a) which has substantially all of its property or conducts substantially all of its business in the |
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| United States, and (b) which owns a principal property. The term does not include subsidiaries whose business consists principally of financing or leasing activities. |
| • | When we use the term “sale and lease-back transaction,” we mean any arrangement where we or any restricted subsidiary lease a principal property from a third party and the principal property has been or is to be sold or transferred by us or the restricted subsidiary to the third party with the intention of taking back the lease. The term does not include temporary leases of three years or less or certain intercompany leases. |
Liens. Section 1004 of the indenture provides that we will not, and will not permit any restricted subsidiary to, issue, assume or guarantee any debt secured by a mortgage, security interest, pledge or lien (hereafter called “mortgage”) of or on any principal property, or any shares of capital stock or debt of any restricted subsidiary, without also providing that the debt securities (together with, if we determine, any other debt issued, assumed or guaranteed by us or any restricted subsidiary and then existing or thereafter created) shall be secured by the mortgage equally and ratably with or prior to such debt. This restriction does not apply to:
| • | mortgages on any property acquired, constructed or improved by, or on any shares of capital stock or debt acquired by, us or any restricted subsidiary to secure debt which finances all or any part of (a) the purchase price of the property, shares or debt, or (b) the cost of constructing or improving the property, and which debt is incurred prior to or within 360 days after the acquisition, completion of construction or commencement of commercial operation of the property; |
| • | mortgages on any property, shares of capital stock or debt existing at the time we or any restricted subsidiary acquires the property, shares or debt; |
| • | mortgages on property of a corporation existing at the time that corporation merges or consolidates with us or any restricted subsidiary or at the time that corporation sells or transfers all or substantially all of its properties to us or any restricted subsidiary; |
| • | mortgages on any property, shares of capital stock or debt of any corporation existing at the time that corporation becomes a restricted subsidiary; |
| • | mortgages to secure intercompany debt among us and/or any of our restricted subsidiaries; |
| • | mortgages in favor of governmental bodies to secure advance or progress payments or to secure the purchase price of the mortgaged property; and |
| • | extensions, renewals or replacements of any existing mortgage or any mortgage referred to above. |
In addition, we or any restricted subsidiary may, without equally and ratably securing the debt securities, issue, assume or guarantee debt secured by a mortgage not excepted above, if the aggregate amount of the debt, together with (a) all other debt secured by mortgages not so excepted, and (b) the attributable debt with respect to sale and lease-back transactions, does not at the time exceed 5% of our consolidated net tangible assets. For purposes of clause (b) of this calculation, certain sale and lease-back transactions in which the attributable debt has been applied to the optional prepayment or retirement of long-term debt are excluded.
Arrangements under which we or any restricted subsidiary transfer an interest in timber but retain an obligation to cut the timber in order to provide the transferee with a specified amount of money will not create a mortgage or a sale and lease-back transaction prohibited by the indenture.
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Sale and Lease-Back Transactions. Section 1005 of the indenture provides that neither we nor any restricted subsidiary may engage in sale and lease-back transactions with respect to any principal property unless:
| • | we or the restricted subsidiary are able, without equally and ratably securing the debt securities, to incur debt secured by a mortgage on the property pursuant to the exceptions described in “Liens” above; |
| • | we or the restricted subsidiary are able, without equally and ratably securing the debt securities, to incur debt secured by a mortgage on the property in an amount at least equal to the attributable debt with respect to the transaction; or |
| • | within 360 days after the effective date of the transaction, we or the restricted subsidiary apply an amount equal to the attributable debt with respect to the transaction to the optional prepayment or retirement of our long-term debt or that of any restricted subsidiary. |
Consolidations, mergers and sales of assets
Section 801 of the indenture provides that we may consolidate with or merge into, and sell or transfer all or substantially all of our property and assets to, any other corporation. The corporation formed by the consolidation or into which we merge, or the corporation which acquires all or substantially all of our property and assets, must assume our obligations to:
| • | pay the principal of, premium, if any, and interest on the debt securities when due; and |
| • | perform and observe all the terms, covenants and conditions of the indenture. |
If, upon the consolidation, merger, sale or transfer, any principal property or any shares of capital stock or debt of any restricted subsidiary would become subject to a mortgage securing any debt of, or guaranteed by, the other corporation, we must secure, prior to the consolidation, merger, sale or transfer, the payment of the principal of, premium, if any, and interest on the debt securities equally and ratably with or prior to the debt secured by the mortgage. This provision would not apply to any mortgage which would be permitted under “Liens” above.
Events of default
Section 501 of the indenture provides that the following are events of default with respect to debt securities of any series:
| • | our failure to pay principal or premium, if any, on any debt security of that series when due; |
| • | our failure to pay interest on any debt security of that series when due, continued for 30 days; |
| • | our failure to make any sinking fund payment, when due, in respect of any debt security of that series; |
| • | our failure to perform any other covenant in the indenture that is applicable to debt securities of that series, continued for 90 days after written notice; |
| • | certain events involving bankruptcy, insolvency or reorganization; and |
| • | any other event of default applicable to debt securities of that series. |
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An event of default with respect to a particular series of debt securities (except as to matters involving bankruptcy, insolvency or reorganization) does not necessarily mean that there is an event of default with respect to any other series of debt securities.
If an event of default occurs and continues, the trustee or the holders of at least 25% of the outstanding debt securities of that series may declare those debt securities to be due and payable. However, at any time after such a declaration of acceleration has been made, but before the stated maturity of the debt securities, the holders of a majority of the outstanding debt securities of that series may, subject to certain conditions, rescind and annul the acceleration if all events of default with respect to the debt securities, other than the non-payment of accelerated principal, have been cured or waived. You should refer to the prospectus supplement relating to any series of debt securities which are original issue discount securities for particular provisions relating to acceleration of a portion of the principal amount of the original issue discount securities upon the occurrence and continuance of an event of default.
Subject to the trustee’s duties in the case of an event of default, the trustee is not required to exercise any of its rights or powers under the indenture at the request or direction of any holder unless one or more of them shall have offered reasonable indemnity to the trustee. Subject to this indemnification provision and certain other rights of the trustee, the holders of a majority of the outstanding debt securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the debt securities of that series.
No holder of any debt security of any series will have the right to institute any proceeding with respect to the indenture, unless:
| • | the holder shall have previously notified the trustee of a continuing event of default with respect to debt securities of that series and the holders of at least 25% of the outstanding debt securities of that series shall have requested, and offered reasonable indemnity to, the trustee to institute the proceeding; |
| • | the trustee shall not have received from the holders of a majority of the outstanding debt securities of that series a direction inconsistent with the request; and |
| • | the trustee shall have failed to institute the proceeding within 60 days. |
However, the holder of any debt security will have an absolute and unconditional right to receive payment of the principal of, premium, if any, and interest on the debt security on or after the applicable due dates and to sue for the enforcement of any such payment.
The indenture requires us to furnish to the trustee annually a statement as to the absence of certain defaults under the indenture. The indenture provides that the trustee may withhold notice to the holders of debt securities of any series of any non-monetary default with respect to debt securities of the series if it considers it in the interest of the holders to do so.
Defeasance and Covenant Defeasance
Section 402 of the indenture provides that we may be discharged from most of our obligations in respect of the outstanding debt securities of any series if we irrevocably deposit with the trustee money and/or United States government securities which, together with the income from those securities, are sufficient to pay the principal of, premium, if any, and each installment of interest on the outstanding debt securities of the series on the stated maturity or redemption date, as the case may be. This arrangement requires that we (a) deliver to the trustee an opinion of counsel
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that we have received an Internal Revenue Service ruling, or a ruling of the Internal Revenue Service has been published that in the opinion of counsel establishes, that holders of the outstanding debt securities of the series will have no federal income tax consequences as a result of the deposit and defeasance, and (b) deliver to the trustee an opinion of counsel that the outstanding debt securities of the series, if then listed on any securities exchange, will not be delisted as a result of the deposit, defeasance and discharge.
Section 1006 of the indenture provides that we need not comply with certain restrictive covenants, including those described under “Liens” and “Sale and Lease-back Transactions” above, and that our failure to comply would not be an event of default under the indenture and the outstanding debt securities of any series, if we deposit with the trustee money and/or United States government securities which, together with the income from those securities, are sufficient to pay the principal of, premium, if any, and each installment of interest on the outstanding debt securities of the series on the stated maturity or redemption date, as the case may be. Our other obligations under the indenture and the outstanding debt securities of the series would remain in full force and effect. This arrangement requires that we deliver to the trustee an opinion of counsel that (a) the holders of the outstanding debt securities of the series will have no federal income tax consequences as a result of the deposit and defeasance, and (b) the outstanding debt securities of the series, if then listed on any securities exchange, will not be delisted as a result of the deposit and defeasance.
In the event the outstanding debt securities of the applicable series are declared due and payable because of the occurrence of an event of default other than that described in the preceding paragraph, the amount of money and government securities on deposit with the trustee may not be sufficient to pay amounts due on the outstanding debt securities of the series at the time of the acceleration resulting from the event of default. However, we will remain liable to pay these amounts.
Amendments to the indenture and waiver of covenants
Section 902 of the indenture provides that we may amend the indenture with the consent of the holders of 66 2/3% of the outstanding debt securities of each series affected by the amendments. However, unless we have the consent of each holder of the affected debt securities, we may not:
| • | change the maturity date of the principal amount of, or any installment of principal of or interest on, any debt security; |
| • | reduce the principal amount of, premium, if any, or any interest on, any debt security or reduce the amount of principal of an original issue discount security that would be due and payable upon acceleration; |
| • | change the place or currency of payment of the principal of, premium, if any, or interest on, any debt security; |
| • | impair your right to sue for payment with respect to any debt security after its maturity date; or |
| • | reduce the percentage of outstanding debt securities of any series which is required to consent to an amendment of the indenture or to waive our compliance with certain provisions of the indenture or certain defaults. |
The holders of 66 2/3% of the outstanding debt securities of any series may, on behalf of the holders of all debt securities of that series, waive our compliance with certain restrictive
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covenants of the indenture. The holders of a majority of the outstanding debt securities of any series may, on behalf of the holders of all debt securities of that series, waive any past default under the indenture with respect to that series, except (a) a default in the payment of the principal of, premium, if any, or interest on any debt security of that series, or (b) in respect of a provision which under the indenture cannot be amended without the consent of each holder of the affected debt securities.
Payments, transfer and exchange
Unless otherwise indicated in the prospectus supplement, we will make payments of principal, premium, if any, and interest on the debt securities, and you may exchange and transfer the debt securities, at the office of the trustee at J.P. Morgan Trust Company, National Association, 600 Travis Street, Suite 1150, Houston, Texas 77002. We may elect to pay any interest by check mailed by first class mail to the address of the person entitled to receive the payment as it appears in the trustee’s security register.
We will not charge you for any transfer or exchange of debt securities, but we may require you to pay any related tax or other governmental charge.
Form of debt securities
The debt securities will be issued in registered form. We will issue debt securities only in denominations of $1,000 or integral multiples of that amount, unless the prospectus supplement states otherwise.
Unless the prospectus supplement otherwise provides, debt securities will be issued in the form of one or more global securities. This means that we will not issue certificates to each holder. Rather, we would issue global securities in the total principal amount of the debt securities distributed in that series.
Global securities
In General. Debt securities in global form will be deposited with or on behalf of a depositary. Global securities are represented by one or more certificates for the series registered in the name of the depositary or its nominee. Debt securities in global form may not be transferred except as a whole among the depositary, a nominee of or a successor to the depositary, or any nominee of that successor. Unless otherwise identified in the prospectus supplement, the depositary will be The Depository Trust Company.
No Depositary or Global Securities. If a depositary for a series of debt securities is unwilling or unable to continue as depositary, and a successor is not appointed by us within 90 days, we will issue that series of debt securities in registered form in exchange for the global security or securities of that series. We also may determine at any time in our discretion not to use global securities for any series. In that event, we will issue debt securities in registered form.
Ownership of the Global Securities; Beneficial Ownership. So long as the depositary or its nominee is the registered owner of a global security, that entity will be the sole holder of the debt securities represented by that instrument. We and the trustee are only required to treat the depositary or its nominee as the legal owner of the debt securities for all purposes under the indenture.
A purchaser of debt securities represented by a global security will not be entitled to receive physical delivery of certificated securities, will not be considered the holder of those securities for
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any purpose under the indenture, and will not be able to transfer or exchange the global security, unless the prospectus supplement provides to the contrary. As a result, each beneficial owner must rely on the procedures of the depositary to exercise any rights of a holder under the indenture. In addition, if the beneficial owner is not a direct or indirect participant in the depositary, the beneficial owner must rely on the procedures of the participant through which it owns its beneficial interest in the global security. We understand that under existing industry practice, in the event we request any action of holders of debt securities or an owner of a beneficial interest in the global securities desires to take any action that the depositary, as the holder of the global securities, is entitled to take, the depositary would authorize the participants to take such action, and that the participants would authorize beneficial owners owning through such participants to take such action or would otherwise act upon the instructions of beneficial owners owning through them.
The laws of some jurisdictions require that certain purchasers of securities take physical delivery of the securities in certificated form. Those laws and the above conditions may impair the ability to transfer beneficial interests in the global securities.
Book-entry system
The debt securities may be issued in the form of one or more fully registered global securities which will be deposited with, or on behalf of, The Depository Trust Company, New York, New York (the “depositary”) and registered in the name of the depositary’s nominee. Except as set forth below, the global securities may be transferred, in whole and not in part, only to the depositary or another nominee of the depositary.
Upon the issuance of the global securities, the depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of the debt securities represented by such global securities to the accounts of participants. The accounts to be credited shall be designated by the underwriters. Ownership of beneficial interests in the global securities will be limited to participants or persons that may hold interests through participants. Ownership of interests in the global securities will be shown on, and the transfer of those ownership interests will be effected only through, records maintained by the depositary (with respect to participants’ interests) and such participants (with respect to the owners of beneficial interests in the global securities through such participants).
We expect that the depositary, upon receipt of any payment of principal or interest in respect of the global securities, will credit immediately participants’ accounts with payment in amounts proportionate to their respective beneficial interests in the principal amount of the global securities as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests in the global securities held through such participants will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such participants. None of Kimberly-Clark, the trustee or any agent of Kimberly-Clark or the trustee will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the global securities for any debt securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or for any other aspect of the relationship between the depositary and its participants or the relationship between such participants and the owners of beneficial interests in the global securities owned through such participants.
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Unless and until they are exchanged in whole or in part for certificated debt securities in definitive form, the global securities may not be transferred except as a whole by the depositary to a nominee of such depositary or by a nominee of such depositary to such depositary or another nominee of such depositary.
The debt securities represented by the global securities are exchangeable for certificated debt securities in definitive registered form of like tenor as such securities in denominations of $1,000 and in any greater amount that is an integral multiple thereof if (i) the depositary notifies us that it is unwilling or unable to continue as depositary for the global securities or if at any time the depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, or (ii) we in our discretion at any time determine not to have all of the debt securities represented by the global securities and we notify the trustee thereof. Any global securities that are exchangeable pursuant to the preceding sentence are exchangeable for certificated debt securities issuable in authorized denominations and registered in such names as the depositary shall direct. Subject to the foregoing, the global securities are not exchangeable, except for a global security or global securities of the same aggregate denominations to be registered in the name of the depositary or its nominee.
Same-day settlement and payment
Settlement by the purchasers of the debt securities will be made in immediately available funds. All payments by us to the depositary of principal and interest will be made in immediately available funds.
The debt securities will trade in the depositary’s settlement system until maturity, and therefore the depositary will require secondary trading activity in the debt securities to be settled in immediately available funds.
The Depository Trust Company
The following is based on information furnished by The Depository Trust Company (“DTC”) and applies to the extent it is the depositary, unless otherwise stated in the prospectus supplement:
Registered Owner. The debt securities will be issued as fully registered securities in the name of Cede & Co., which is DTC’s partnership nominee. No single global security will be issued in a principal amount of more than $500 million. The trustee will deposit the global securities with DTC. The deposit of the global securities with DTC and their registration in the name of Cede & Co. will not change the beneficial ownership of the securities.
DTC Organization. DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of that law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered under the provisions of Section 17A of the Securities Exchange Act of 1934.
DTC is owned by a number of its direct participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Direct participants include securities brokers and dealers, banks, trust companies, mutual funds firms and certain other organizations who directly participate in DTC. Other entities indirectly participate in DTC and may access DTC’s system by clearing transactions through or maintaining a custodial relationship with direct participants, either directly or indirectly. The rules applicable to DTC and its participants are on file with the SEC.
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DTC Activities. DTC holds securities that its participants deposit with it. DTC also facilitates the settlement among participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in participants’ accounts. This eliminates the need for physical movement of securities certificates.
Participants’ Records. Except as otherwise provided in the prospectus supplement, the debt securities must be purchased by or through direct participants, which will receive a credit for the debt securities on DTC’s records. The beneficial owner’s ownership interest in the debt securities is in turn recorded on the direct or indirect participants’ records. Beneficial owners will not receive written confirmations from DTC of their purchase, but they are expected to receive them, along with periodic statements of their holdings, from the direct or indirect participants through whom they purchased the debt securities.
Transfers of ownership interests in the global securities will be made on the books of the participants on behalf of the beneficial owners. Certificates representing the interests of the beneficial owners in the debt securities will not be issued unless the use of global securities is suspended, as discussed above.
DTC has no knowledge of the actual beneficial owners of the global securities. Its records only reflect the identity of the direct participants as owners of the debt securities. Those participants may or may not be the beneficial owners. Participants are responsible for keeping account of their holdings on behalf of their customers.
Notices Among DTC, Participants and Beneficial Owners. Notices and other communications by DTC, its participants and the beneficial owners will be governed by standing arrangements among them, subject to any legal requirements in effect.
Voting Procedures. Neither DTC nor Cede & Co. will give consents for or vote the global securities. DTC generally mails an omnibus proxy to us just after any applicable record date. That proxy assigns Cede & Co.’s consenting or voting rights to the direct participants to whose accounts the securities are credited at that time.
Payments. Principal and interest payments made by us will be delivered to DTC. DTC’s practice is to credit direct participants’ accounts on the applicable payment date unless it has reason to believe it will not receive payment on that date. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for customers in bearer form or registered in “street name.” Those payments will be the responsibility of that participant, and not DTC, the trustee or us, subject to any legal requirements in effect at that time.
We are responsible for paying principal, interest and premium, if any, to the trustee, which is responsible for making those payments to DTC. DTC is responsible for disbursing those payments to direct participants. The participants are responsible for disbursing payments to the beneficial owners.
Regarding the trustee
We maintain banking relationships in the ordinary course of business with J.P. Morgan Chase Bank, National Association, an affiliate of the trustee under the indenture. J.P. Morgan Chase Bank, National Association, participates as a lender in our syndicated revolving credit agreements in the aggregate amount of $1.5 billion. We also have debt securities currently outstanding under the indenture.
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We may sell the debt securities to or through underwriters or dealers, and also may sell them directly or indirectly to one or more other purchasers or through agents. The debt securities may be distributed from time to time in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to these prevailing market prices or at negotiated prices.
In connection with the offering of the debt securities, certain underwriters and their affiliates may engage in transactions that stabilize, maintain or otherwise affect the market price of the debt securities. These transactions may include stabilization transactions in accordance with Rule 104 of Regulation M, pursuant to which these persons may bid for or purchase the debt securities for the purpose of stabilizing their market price. The underwriters also may create a short position for the account of the underwriters by selling more debt securities in connection with the offering than they are committed to purchase from us, and in this case may purchase debt securities in the open market following completion of the offering to cover the short position. Any of the transactions described in this paragraph may result in the maintenance of the price of the debt securities at a level above that which might otherwise prevail in the open market. None of the transactions described in this paragraph is required, but if any are undertaken, they may be discontinued at any time.
In connection with the sale of the debt securities, underwriters may receive compensation from us or from purchasers of the debt securities for whom they may act as agents in the form of discounts, concessions or commissions. Underwriters may sell the debt securities to or through dealers, and the dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of the debt securities may be deemed to be underwriters, and any discounts or commissions received by them from us and any profit on the resale of the debt securities by them may be deemed to be underwriting discounts and commissions under the Securities Act of 1933. Any of these underwriters or agents will be identified, and their compensation will be described, in the prospectus supplement.
Underwriters and agents who participate in the distribution of the debt securities may be contractually entitled to indemnification by us against certain liabilities, including liabilities under the Securities Act of 1933, or to contribution with respect to payments which the underwriters or agents may be required to make with respect to these liabilities. These underwriters and agents may be customers of, engage in transactions with, or perform services for us in the ordinary course of business.
If so indicated in the prospectus supplement, we may authorize underwriters or other persons acting as our agents to solicit offers by certain institutions to purchase the debt securities from us pursuant to contracts providing for payment and delivery on a future date. Institutions with which these contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases these institutions must be approved by us. The obligations of any purchaser under these contracts will be subject to the condition that the purchase of the debt securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the purchaser is subject. The underwriters and other agents will not have any responsibility in respect of the validity or performance of these contracts.
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Unless otherwise indicated in the prospectus supplement, the validity of the debt securities will be passed upon for Kimberly-Clark by Ronald D. Mc Cray, our Senior Vice President—Law and Government Affairs and Chief Compliance Officer, and for the underwriters or agents by Simpson Thacher & Bartlett LLP, New York, New York.
The consolidated financial statements and the related consolidated financial statement schedule as of December 31, 2004 and 2003, and for each of the three years in the period ended December 31, 2004, and management’s report on the effectiveness of internal control over financial reporting as of December 31, 2004, incorporated by reference in this prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports (which report on the consolidated financial statements and related consolidated financial statement schedule expresses an unqualified opinion and includes an explanatory paragraph regarding a change in the Corporation’s method of accounting for customer coupons), which are incorporated by reference herein, and have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
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