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K-C Second Quarter Sales Improve

August 14, 2006

Net sales in the second quarter of 2006 at consumer products giant Kimberly-Clark Corporation, Dallas, TX, rose 4.4% to $4.2 billion. Meanwhile, net income decreased approximately 7%.

For the first six months of 2006, sales of $8.2 billion were up about 4% from $7.9 billion in the prior year, as a result of a more than 2% increase in sales volumes, improvements of more than 1% in both net selling prices and product mix, partially offset by negative currency effects of less than 1%. Year-to-date operating profit totalled $965 million.

According to the company, top-line growth, ongoing cost reductions, strong performance at K-C de Mexico and a lower share count all benefited these results and helped to offset significant cost inflation, a higher effective tax rate and incremental compensation expense for stock options.

Chairman and CEO Thomas Falk said, "We delivered on our commitments again this quarter in a challenging, inflationary business environment. K-C teams continued to execute our Global Business Plan well, boosting sales to a new quarterly high while simultaneously lowering costs by about $50 million through our FORCE (Focused On Reducing Costs Everywhere) and strategic cost reduction programs."

In the personal care products sector, sales climbed 7.1% in the second quarter, driven primarily by sales volume growth of approximately 6%, along with currency benefits of 1%. Net selling prices were essentially even with the prior year.

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