Paul Alexander - Vice President, Investor Relations Tom Falk - Chairman of the Board, Chief Executive Officer Mark Buthman - Chief Financial Officer, Senior Vice President

Ali Dibadj - Sanford Bernstein Chris Ferrara - Bank of America Caroline Levy - CLSA Connie Maneaty - BMO Capital Markets Jason Gere - RBC Capital Lauren Lieberman - Barclays James Armstrong - Vertical Research Bill Schmitz - Deutsche Bank Javier Escalante - Consumer Edge Research John Faucher - JPMorgan Linda Bolton Weiser - Caris

Ladies and gentlemen, thank you for your patience in holding, we now have your speakers in conference. Please be aware, each of your lines is in a listen-only mode. At the conclusion of today's presentation, we will open the floor for your questions. At that time, instructions will be given as to the procedure to follow if you'd like to ask a question. It is now my pleasure to introduce today's first speaker, Mr. Paul Alexander.

Thank you, David, and good morning, everyone. Welcome to our Year End Earnings Conference Call. Here with us today are, Tom Falk, Chairman and CEO; Mark Buthman, Senior VP and CFO; and Mike Azbell, Vice President and Controller. Here is the agenda for our call. Mark will begin with the review of fourth quarter results. Tom will then provide his perspectives on our full year results and also our 2013 outlook. We will finish with Q&A. There is a presentation of today's materials including our key planning assumptions for 2013 in the Investor section of our website. As a reminder, we will be making forward-looking statements today. Please see the risk factors section of our latest annual report on Form 10-K for further discussion of forward-looking statements. We will also be referring to adjusted results and outlook today. Both exclude certain items described in this morning's news release. The news release has further information on these adjustments and also reconciliations to comparable GAAP financial measures. Now, I will turn it over to Mark.

Thanks, Paul, and good morning. Let's start with the headlines. First, we achieved organic sales growth of 5%, highlighted by 9% growth in K-C International. Second, we delivered adjusted earnings per share of the $1.37, that’s a 7% increase compared to the prior year. Third, we generated an all-time quarterly record of $1.1 billion in cash from operations. Now, let's cover the details of the quarter. Fourth quarter sales were $5.3 billion, up 3% versus last year, underlying organic sales rose 5%, driven by increased volumes of 3% and higher net selling prices of 2%, unfavorable currency rates and lost sales in conjunction with our pulp and tissue restructuring further reduced sales by 1% each. Fourth quarter adjusted gross margin was 34.3%, that’s up 170 basis points from last year. The increase was driven by organic sales growth and $80 million of FORCE cost savings. For the full-year, FORCE savings were $295 million. That’s well above our original target for savings of $150 million to $200 million for the year. We also surpassed our three-year savings target of $400 million to $500 million after just two years. We are making great progress leveraging our global procurement organization and deploying lean continuous improvement throughout our company and I expect that momentum to continue in 2013. So moving now to P&L. Adjusted operating profit rose 5% with an operating margin of 15%. That’s up 30 basis points compared to last year. We continued investment between the lines including higher administrative and research spending to build capabilities and support future growth, particularly in K-C International. In addition, strategic marketing rose $10 million in the quarter. The fourth quarter adjusted effective tax rate was 30.6%, in line with our full year target of 30% to 32%. All in all, fourth quarter adjusted earnings per share were at $1.37. That’s up 7% versus last year. As I said before, cash provided by operations in the fourth quarter was an all-time quarterly record of $1.1 billion. That is more than double our year-ago performance driven by improved working capital and lower pension contributions. Cash provided by operations for the full year was $3.3 billion. That is up $1 billion compared to the prior year. Our working capital cash conversion cycle improved two days in 2012 to a record low of 45 days for the year. We expect to make further progress in 2013. During the fourth quarter, we repurchased 3.8 million shares of KMB stock at a cost of $320 million. For the year, we repurchased 16.4 million shares at a cost of $1.3 billion. Altogether, we allocated $2.5 billion dollars of cash to share repurchases and dividends in 2012. Now, I will highlight a few areas from our segment results for the quarter. In personal care, organic sales rose 9% with volume growth of 6% and net selling prices up 3%. K-C International had another strong quarter with organic sales up 12%. Our key growth initiatives continue to perform very well. In fact, in the diaper, volumes in China grew 50%, volumes in Russia rose 15%, and volumes in Brazil were up 10%. Elsewhere, in personal care, volumes were up mid-single digits in Europe and low single digits in North America. Fourth quarter personal care operating margins of 17.6% rose 220 basis points driven by the organic sales growth and cost savings. Now moving to consumer tissue. Organic sales were up 1%, driven by higher net selling prices and volumes. Volume gains in North America were mostly offset by modest declines in Europe and in K-C International. Consumer tissue operating margins were down 30 basis points compared to a strong year ago, although they were up 50 basis points sequentially versus the third quarter. During the quarter, we also completed our pulp and tissue restructuring charges on schedule and in line with our expectations. Our consumer tissue team did a terrific job executing a multiyear plan. I am pleased to the operating profit margin benefits we have generated so far from these restructuring actions and I expect benefits will continue to build over the next two years. Turning to K-C Professional, organic sales were up 3%, driven by improved volumes and pricing. Organic volumes were up high single digits in K-C International, down slightly, elsewhere. Operating margins of 16.7% were up 120 basis points driven by organic sales growth, cost savings and input cost deflation. Lastly, health care organic sales were down 2%, driven by slightly lower volumes and pricing. Operating margins of 14.9% were up 60 basis points driven by lower input costs in between the line spending. So that wraps up my comments on the quarter. To recap, we achieved excellent organic sales growth led by K-C International. We delivered improved margins and earnings per share. We generated terrific cash flow. Now, I will turn it over to Tom.

Thanks, Mark, and good morning, everyone. Since Mark has reviewed our fourth quarter results, I'll focus my comments on the full year and then I'll talk about our Outlook for 2013. So, starting with 2012, overall results were very strong. We had a great year. On the top line, we delivered organic sales growth of 5%, so to put that in perspective, that's our best top line performance since 2008, and it was driven by targeted growth initiatives, innovation and improved net realized revenue. In terms of targeted growth initiatives, our K-C International team had an excellent year. They had organic sales growth of 10% and a double-digit increase in operating profit. KCI delivered strong Personal Care volume gains in key growth markets. For example, our diaper volumes increased 45% in China, 20% in Russia and 15% in Brazil. Results in all three countries benefited from product innovation. In addition, our Huggies business in China has now expanded into 80 cities. That's up from about 70 at the end of 2011 and we are targeting it to be in at least 90 cities by the end of this year. We also made good progress making our adult care and baby wipes businesses truly global. For the year, K-C International grew volumes in both of these categories at double-digit rate. Elsewhere in KCI, our K-C Professional business grew organic sales high single digits in 2012 as we've been making strategic investments for industrialization and economic development are recurring. In total across all our businesses K-C International now represents about 37% of our total company sales and we continue to be very optimistic about KCI's plans to deliver strong growth going forward. Product innovation around the world was also a key contributor to our organic growth in 2012. We produced several innovations in North America including Super Premium Depend Briefs, new U by Kotex tampons and pads and a number of new products in K-C Professional. We also launched a number of innovations in K-C International. That included introduction of diaper pants, premium feminine care products and adult care offerings in several markets. We supported our innovation and growth initiatives with $115 million increase in strategic marketing. Our spending there rose at a double-digit rate. We also increased research and development spending double digits as we continue to make investments for future growth. Our success with targeted growth initiatives and innovation helped mitigate the impact of soft category demand in infant childcare in the U.S. and in Europe overall. Nonetheless, our European team executed well and delivered a solid increase in operating profit and margin in 2012. We also initiated and are moving quickly to implement the strategic changes we announced last quarter. Our market positions remain solid overall. In the U.S., we improved or maintained market share in six of our eight consumer categories and in K-C International, we are growing faster than the category in a number of markets. In terms of profitability, we increased gross margin by 230 basis points and we increased our operating margin by 90 basis points. Our FORCE cost savings program was a big reason for these improvements. I am also pleased that all four of our business segments delivered operating profit growth and improve their margins in 2012. On the bottom line, earnings per share for the year were $5.25. That's up 9% year-on-year, the high end of our long-term objective. It was also nicely above our original 2012 guidance for the year of $5 to $5.15. Finally, as you heard from Mark, our balance sheet and cash generation remained strong. We continue to allocate capital in shareholder-friendly ways as we returned $2.5 billion to our shareholders through dividends and share repurchases. So, overall we had very good financial performance and I am encouraged by the progress we made in 2012 Now, let me turn to the outlook. In 2013, we'll continue to pursue targeted growth initiatives. We'll introduce new and improved products and will support our brands with increased levels of strategic marketing. We had several innovations launching in K-C International, particularly in the infant care, feminine care and adult care categories. We have also got a number of new innovations coming in North America, including new Depend products for men, the best ever Pull-Ups training pant and improved Scott extra soft bath tissue. As the year progresses, we will have more product news in many of our other brands. We also expect to deliver strong cost savings again this year of $250 million to $300 million. That will help us fund our brand investments and overcome moderate cost inflation, which we currently expect to be in the range of $150 million to $250 million. Overall, we are targeting to grow organic sales by 3% to 5% and to increase adjusted earnings per share by 5% to 8%. This latter earnings guidance assumes an approximate one point drag from Venezuela. Though we are not sure exactly what the operating margin will be in Venezuela in 2013, so we thought it made sense to build some of that potential impact into our plan. Finally we will continue to focus on generating strong cash flow and allocating capital in shareholder friendly ways. We expect to raise the dividend at a high single-digit rate and that will be our 41st consecutive annual increase in the dividend. We also plan to repurchase about $1 billion to $1.2 billion worth of Kimberly-Clark stock. Together dividends and share repurchases should total more than $2 billion for the third consecutive year. So to summarize, we are encouraged by our performance in 2012. We are optimistic about our plans for 2013 and beyond and we remain convinced that our global business plan will continue to deliver value for our shareholders. That wraps up our prepared remarks and we will now begin to take your questions.

(Operator Instructions) Our first question comes from Ali Dibadj with Sanford Bernstein. Ali Dibadj - Sanford Bernstein: Hi, guys, a couple of questions. One is really around the very strong KCI growth this year at 10% organic, as you mentioned. But doing some algebra, the rest of the business seemed a little more subdued. So if you think about the 3% to 5% organic sales growth target for this year, for 2013, can you help us with the composition of that by geography and by segment? And maybe in answering that, can you give us some sense about the distribution gain that you might continue to get? You mentioned one example of that in your prepared remarks but any distribution gain you might be able to get on a continuous fashion? How much of a runway there is for that? Do you need that to get your extra KCI current numbers? That’s the first question.

Yes, I would say, Ali, the growth is, again, going to be heavily focused on K-C International and then within that, more focused on personal care as it was this year, where you saw in KCI, personal care organic volume was up 9% for the year. A part of that was distribution gain in China, certainly that’s also increasing our participation in the category as we moved into the midtier segment of the category. But in markets like Brazil, we are moving more aggressively in to the Northeastern part of Brazil. So that’s a big opportunity for us. We are there but we were not really fully represented. So we have got additional capacity starting up there. In Russia and in Eastern Europe we have got good presence in Moscow. We are moving out into broader distribution reach across Russia and some of the other Eastern European countries. So that’s an opportunity for us. So is going to be combination of innovation and a little bit of distribution gain and good execution to make that happen. In North America, I would say, the diaper category flattened out. So the birth rates were low. We expect diapers to be down about a point year-on-year. Child care, which was down 5 % this year, may only be down 1% next year from a category standpoint. We have got a lot of innovation coming. So I think we will have less of a drag from North America in 2013 than we had in 2012. We still have good momentum in adult care and fem care in North America that should carryover in to 2013. Ali Dibadj - Sanford Bernstein: Okay, let me ask the KCI question slightly differently, specifically on the 10% organic sales growth. Can you help us figure out how much of that is comp store growth versus how much of it is distribution growth?

I would say the analytics are probably not as precise there as you would like to think. As you know, because some of the Nielsen data doesn’t get you that. I would say the bigger factor is broader participation in the category. So, in China, for example going into the midtier, the diaper segment across the geography that we are already in. But going from 70 to 80 cities, we can do the math. Now they don’t all start up and contribute at the full level of your existing base and you are in the big cities to start and you are going to go that the next year down so each incremental city is not as big of a pop as what you originally got. So I would say the more of it is from the expansion of our participation in the category and the innovation that we are driving and that the additional geography is a relatively smaller part of the boost. Ali Dibadj - Sanford Bernstein: Okay. So, second thing is just about the incremental strategic spending $10 million, which seems lower than it's been all year. Can you comment a little bit about that? Is it launch timing? Seasonality? How should we expect that to trend going forward for the rest of the year?

It's probably launch time. We would also say if you look back, we are ramping it up and so we have kind of hit more of a stable stage, so you will see it go up faster than sales in 2013, but it won't go up as much we were probably up more than double our rate organic sales growth this year. It won't be as big of a delta in 2013. Ali Dibadj - Sanford Bernstein: Okay, and my last question is just around competition broadly, so what are you seeing and maybe make more specific U.S. And in the U.S. have you for example the consumer tissue business try to in your guidance take into account a new entrants in the U.S. with TAD technology and private label. Then in China, we keep hearing from local competitors there that they are going to get more aggressive. They are not just going to give their turf since the folks like you are coming into their cities. Can you comment on that as well? Thank you.

Yes. Sure. We have lots of tough competition everywhere, and so in the personal care spaces, obviously we got P&G most places, but we are seeing UNICHARM increasingly show up in markets around the world. They are obviously stronger in Asian. They are now talking about expansion in Brazil and Mexico. So they make very good product and we ran into them in large markets around the world. Some of the local Chinese players, they hang out and those folks tend to be at the lower end of the product spectrum, but they are trying to move their mix up and so you got to execute well and have great innovation and great marketing to be successful in these markets and so that's what we are aiming at. In the U.S. the private label, if you look at private label shares in tissue in bath, it was up a point or two year-over-year and towels was up about point, but our shares were pretty stable and actually we've got a pretty good innovation agenda for Cottonelle and Kleenex, and so I think we feel are cautiously optimistic about our tissue business going into 2013, particularly in North America. Ali Dibadj - Sanford Bernstein: And the TAD technology entering in private label doesn't concerning you?

Not at this stage. I mean, I think there is good quality private label around, but we think that the branded products still are differentiated and offer consumers an attractive value and our Cottonelle business is showing that. I mean, we had pretty strong share results in the fourth quarter and we are feeling good about that business going in 2013.

Our next question comes from Chris Ferrara with Bank of America. Chris Ferrara - Bank of America: Good morning, guys. I wanted to try to better understand, now that I guess you probably have better look at it. The P&L impact of stranded overhead on the European exit, right? So, I understand you are committed to clearing that out, right, and still delivering obviously now 5% to 8% growth, but I guess can you talk about what you think the gross drag will be from that stranded overhead. I mean, you have to be finding offset, right, it's not that you are going to be able to clear all those expenses out at the same rate that the sales are going away, right? So, just kind of want to understand the gross impact if possible.

No. I mean, Chris, we are aiming to cut our overhead in Europe by at least as much of the sales, right? And, so it hit Kim Underhill and her team and Robert Abernathy, but we are working on this for a good part of last year. Mark Buthman's team is leading on it as well in the in terms of the back-office things and maybe Mark can chime in on that, but we are aggressively going after the European structure, and so we had probably overbuilt that a bit to expecting Europe to grow and to be a bigger business, and so we have gone and stripped a lot of the overhead out. They have gone through the consultation process with most of the countries and most of our team in Europe now knows whether they have a permanent role. They have a temporary role or there are going to be other roles been eliminated. And so, I don't know, Mark you have said on analyst calls lately, so I'll let you add some color to that.

Chris, if you think about it as an enterprise, it's a great opportunity for us to kind of paint a picture of what our overhead structure might look even more broadly across the world and they have got a real compelling business case to do it. So, it's on the top of our management agenda and we are watching it closely at high degree of difficulty, but high degree of confidence in the plans they put together.

So, we know we have to execute it, and we'll be transparent about how we are doing on that as the quarters progress in 2013. Chris Ferrara - Bank of America: Thanks. That's helpful. And I guess, moving over to KCI, obviously the growth has been there. Can you try to dimensionalize where you think sort of long-term margin improvement comes from? Like do you think the KCI margins will progression at a rate faster than the overall company margins?

Well, the KCI team is aiming at being the most attractive investment opportunity for Kimberly-Clark. So they know they have got to grow topline and they have got to grow bottomline. So one of the things that was really pleasing about their results in 2012, is that they had double digit topline, but they also had strong double-digit operating profit growth too. And as you see, cities and markets get to scale, the gross margin structure is pretty attractive and we still have got work to do and we can do better in lots of places. But they have got an aggressive program to continue to take out cost, to get more effective with our marketing investment and our trade spend investments and as we do that that should help our margins improve. And we have individual markets in KCI that have got the gross margins that are strongly accretive to the corporation. So we know it is possible. Chris Ferrara - Bank of America: Great, and just one last follow-up on margins. When you benchmark yourself versus peers, and I guess normalizing for product mix and you look at that 34% gross margin that you guys are at right now, what do you think the opportunity is there for that gross over the long-term? Because obviously you have accelerated your topline, KCI has accelerated but what's the opportunity on gross margin, when you think longer term?

We have been higher in our own history and so if you go back before some of the commodity run-up, we were in high 30s and we were talking about scaling a 40% gross margin. So that’s certainly kind of a near-term goal that we are aiming at. I think we made a strong move toward it in 2012. We will have commodity challenges from time to time that will afford our progress there but we are certainly aiming at improving gross margin, being able to invest more than strategic marketing and then delivering a part of that to the bottomline and operating margin improvement.

Our next question comes from Caroline Levy with CLSA. Caroline Levy - CLSA: Hi, good morning. I was wondering if you could help us put some numbers and maybe it’s a longer term question but around the adult diaper opportunity, because again it may not be a huge contributor to earnings right now but as you model out your company, five and ten years, how big do you think this can get and what do you see is your major opportunities, just given the number of older people in China and Japan, for example?

Well, it's exciting, even in North America, our adult care business grew volume 6% last year. So we got strong innovation behind the Poise and Depend and saw that even that’s an income consumer that’s maybe more sensitive to price change. They were still willing to invest in a better quality product. So we still got lots of growth in the U.S. and your developed markets. In the emerging markets, the businesses are small but they are growing fast and we are putting more resources against it in many markets. We have had with multiple launches in 2012. We have got more coming in 2013. So we think that Poise and Depend will someday be strong billion dollar businesses for us and each of those has the potential to be a billion-dollar brand. That’s what we are aiming at. Caroline Levy - CLSA: Is that margin diluted as you grow adult versus other parts of the business?

No, our adult care margins within personal care are competitive with the segment average and in some markets, even a little bit better. Obviously, as you launch in a market, you will be investing to build the brand. So in that particular market it will be a little dilutive but the gross margin structure is quite attractive. Caroline Levy - CLSA: Thank you, and just moving to the growth of your markets. Do you believe that you outgrew the market not just in China, for example, but overall? And what do you think the market growth rate will be in 2013, new markets?

Broadly in the emerging markets, we would say you are probably looking at mid single-digit growth and we grew high-single. So we would say we probably took share in a number of places. Obviously some of the Nielsen data is a little tougher to get at because they are so many of points of distribution that aren’t covered really well by Nielsen. It is getting better but we still got some room to grow there. So, if you look at our global business, we would say the categories are growing three to four, much faster than that, probably mid-singles in emerging markets, slower than that in the developed markets. And so our 3% to 5% topline if we just hold share, we should be in the 3% to 4% range, if we drive some innovation and a little bit more share growth, we can get to the high end of that range as we did in 2012. Caroline Levy - CLSA: Thank you, and just lastly, is January off to a good start, the year off to a good start?

Yes, so far. I have nothing to complain about. Yes, we haven’t closed of the month yet, so want to see the results but nothing unusual that we seeing in the data so far.

Cold and flu is, we are benefiting both family healthcare and facial tissue. It was pretty flat in December but it has picked up pace in January.

Yes, that’s a good point. Caroline Levy - CLSA: Well, I am sort of sorry, but happy to hear that.

Yes, good for us, bad for them.

We are here for you, if you need us. Caroline Levy - CLSA: Thank you.

Our next question comes from Connie Maneaty with BMO Capital Markets. Connie Maneaty - BMO Capital Markets: Morning, just two questions. What do you think the impact will be on retail prices in the U.S. from other new other tissue capacity that's coming on and do you think the branded companies would have to rollback prices to maintain an appropriate gap?

Connie, I am not as worried about the U.S. market from the additional capacities. There's a lot of capacity that's gone out of the U.S. market, and so as we shutdown Everett and Chester there has been some of the capacity that came out of Chester, the U.S. market operating rate is probably in the in high 80% range. And, actually, we're fully loaded and we are our capacity pretty full up in 2012 and heading into 2013. So, probably more of it is what's going to drive tissue pricing and whatever happens to pulp and we're calling pulp to be up slightly in 2013, so that should put a little bit of a positive spin on pricing. So, we had a little bit softer pricing in the third quarter, came back a little bit in the fourth quarter. That had more to do with timing of promotions year-over-year, so there is nothing big happening on that front, so we will have to wait and see. But overall, again, we feel better about our branded tissue business positioned going into 2013. I think the place in the world you commented on the tissue capacity expansion was more in China, and we don't have a big the Chinese tissue business. We have a facial tissue business, so we don't do much in roll products in China. Connie Maneaty - BMO Capital Markets: Great. Thanks. My second question is what's included in your Venezuela impact? You said you are starting to build in some of a potential impact, so is it the effect of 50% devaluation or the impact of continued price controls in face of inflation, so what's included in your, what have you already assumed?

Yes. This has been a tough one to call, because it's difficult to predict from day-to-day what's going to happen, so we have not included any of the balance sheet devaluation that would flow through the income statement, so none of the financial assets translation of the new rate is in our guidance, so that would be a one-time thing that we have to call out. We really looked at that and said that was very low single-digit percent of sales and operating profit in 2012, but something is probably going to happen. Either there will be a de-val, which will have a translation impact. We didn't model it probably as deep as 50%, but we assume there will be some reduction or you could have a scenario where there is de-val, but it's tough to get foreign exchange and so we wind up constraining our supply, because we can't get dollars to pay our bills, so you wind up with a drop in demand and shrinking the size of the business and so it is very difficult to predict which of those would happened, but we said probably something is going to happen, so let's be a little bit conservative on that number going into the year.

Our next question comes from Jason Gere with RBC Capital. Jason Gere - RBC Capital: I had just a couple of questions. One as you think about 2013 with all the changes going on with Europe and the tissue restructuring. Is it going to be pretty smooth across the quarters or should we see that maybe back half a little stronger than the front half? I was just wondering if you could provide a little bit of the cadence there.

Yes, and all the charges for the consumer tissue, the North American tissue restructuring has flown through the P&L amounts, so those are behind us and we took a good chunk of the European restructuring hit in the fourth quarter. If you look at the sequencing of the year, I would expect actually a pretty consistent growth rate over the quarters year-on-year which would say that the back half is probably going to be a little better than the first half, because that was the way it shaped up in 2012, and so you get something that will help the first quarter and like we might have a little bit lower effective tax rate, because of the way the tax bill that got passed, but I would say the growth rate is going to trend pretty close to a consistent year-on-year across the quarters. Jason Gere - RBC Capital: Okay. Great. Then just the next question, I think one of the earlier questions broke down the organic sales by geography and I hope you can provide some color in terms of about the segments tissue versus personal care versus kind of the B2B segment and how you are looking at those trends, where you may see any tip of acceleration versus deceleration versus 2012, with getting in within that 3 to 5 range?

Yes, if you go through personal care, we had hoped that North America will be a little better year-on-year, because the categories are not going to be down as much. So we should have, I think, for the year, and in infant care we were down 5% and flat on child care, wipes was down a little bit. So those should be better year-on-year. In fem and adult, we are up high-singles in total for those. I think fem was up 6% and adult was up 10%. So I would say you would expect to see those collectively be in the high-singles in 13. K-C International was 9%. Now that was a terrific result. We probably won't keep that 45% growth rate in China but we still expect to have a strong growth rate in China in 2013. So maybe a little slower in KCI. In consumer tissue, that’s one that is playing more of a grow margin role for us. So we had relatively light volume growth. In North America it was flat. Overall Europe was down a little. Even KCI with down 1%. So I don’t see huge growth coming in consumer tissue. In K-C professional, washroom business was up a 2%. We think we actually grew a little bit more than the category in washroom in 2012. We got a lot of innovation coming in 2013 and if we get a little bit of economic improvement, you could see a little bit better growth and in KCP. In KCP and in emerging markets, we were up 6% on the organic volume line and we have got actually lots of growth coming there. So I expect to see at least that in 2013. Health care, our supplies were up 2%. Devices were up 3%. We probably expect supplies to be a little flatter and devices to be a little better in 2013. We have got some more innovation coming to market and a little bit better push in some things in the device front in 2013. So I though that’s helpful for you.

Our next question comes from Lauren Lieberman with Barclays. Lauren Lieberman - Barclays: Thanks, good morning. So, actually, the comment that you just made about consumer tissue playing more of a grow margin role for you guys, is exactly what I want to ask about. Because in this quarter, margins were actually down in that business which is rare to see when there is deflation. Thinking that the majority of your incremental investments and strategic marketing would be more oriented towards personal care than tissue, I just was curious if you could talk a little about margin performance in that business this quarter?

We were up 50 basis points sequentially. For the year, we were up 220 basis points in that business. So there are some cost start up issues and a couple of things in the quarter that were a little bit more noise versus fourth quarter last year. I think Europe also had a much stronger fourth quarter in 2011 that didn’t repeat in 2012. So that was a part of it as well. But overall, I would say, the trends in consumer tissue we are happy with. It's back in 13.6% for the year, 14% for the quarter and that’s getting close to where we need it to be from it being an investable business standpoint. Lauren Lieberman - Barclays: Okay, can you just explain, Tom, some of the startup issues? Is that downtime? What is that?

Actually, downtime, overall was a little better for the company year-on-year. We had some, broader in the fourth quarter broadly across a number of the segments. We had a little a little bit more startup activity on new assets. When you have a startup, typically you are writing off the old assets. So you had some higher startups and write-offs. So probably more of it was in personal care but consumer tissue had a little bit of it as well. We also had some higher distribution expense, and particularly, in K-C International. As you are seeing carrier rates are up across the board around the world and consumer tissue probably feels that a little bit more than the other segment because freight's a bigger percent of cost of sales.

Our next question comes from James Armstrong with Vertical Research. James Armstrong - Vertical Research: Good morning. First question is on the pulp and tissue restructuring benefits. You said that you are currently on a $60 million run rate in operating profit in the fourth quarter and expect $75 million in 2013 and more than $100 in 2014. Just to make sure, those are not incremental numbers, right? So in 2013, from the Q4 run rate, it will be more like $15 million.

That’s correct. James Armstrong - Vertical Research: Okay.

Each of those numbers was cumulative. So I think we had $20 million in '11, we had $40 million in '12, which gets you to $60 million cumulative. It will be another $15 million in 2013, which gives you the $75 million and so forth. James Armstrong - Vertical Research: Okay. And, how is that weighted in 2012? Should we see a little bit more than that 15 number and in 2012, or maybe in 2013 just because of the timing?

No. I mean, we will obviously keep the cumulative 60 that we have already got and the big chunk of that was the shutdown of the Everett mill and that's done and behind us. And so, some of the additional things we decided to do at Chester, Pennsylvania started to benefit late 2012 and will carry forward into and to 2013 and 2014. James Armstrong - Vertical Research: Perfect. Then switching gears just a bit, with the recent innovation and child care, have you seen any things that have worked? Any products that worked in certain regions that you are really starting to expand into other regions and could you just give us a few examples?

Yes. We have been very happy with the Pull-Ups, NightTime launch and that's gone well. We have also got a terrific GoodNites business that's in our Child Care segment and they actually had introduced a line extension of bed mats last year that was a big success in North America. In terms of the ideas that are working well around the world, our whole diaper pants approach is going very well. We are going aggressive at both the value tier and premium tier in many markets around the world. That's gone well. Our U by Kotex list of feminine care positioning is one that were launching in multiple markets around the world. And then our upgraded Depend products, our adult care offerings, we are offering that in many markets around the world. So, these are things that we are we are focused on and have got great solutions. I think another example will be baby wipes. You know, we've done baby wipes in North America and Europe. We are really having them fully reflected and penetrated in other markets around the world and now we are trying to figure out what would it take if we could sell one wipe for every diaper we sell around the world. If we could do that, we have $1 billion baby wipe business, so there's a big opportunity there for us. James Armstrong - Vertical Research: That helps a lot. Thank you very much.

Our next question comes from Bill Schmitz with Deutsche Bank Bill Schmitz - Deutsche Bank: You guys want to call a bottom to the baby bust, because it seems you are a little bit more upbeat on.

That sounds like a quote, Bill, bottom to the baby bust. I like it. No, I think the birthrate has flattened out. We expect it to be basically flat in 2013. The category, albeit, will probably still be down 1% on diapers in North America. And I would say, for us as we have modeled it, the three drivers that are more predictive are male unemployment, or new home purchase or household formation and consumer confidence. And I think as you see those things stabilize, you would say yes all right. That kind of make sense, but the birth rate would be flattening out. It hasn't turned up yet, but I would say you have not seen any of those three indicators really make a major positive move lately either. Bill Schmitz - Deutsche Bank: Got you, and then was there an impact from the flu season, because I know when you talked about the North American consumer tissue business, there's really no mention of facial tissue?

Yes. There wasn't much in the fourth quarter. We're seeing that more in the start of the year. And we worked pretty good at looking at flu index data almost by zip code, and so are our retail partners and so they are very nimble about getting flu displays up as the flu move into a particular a part of the country, and so both our health care business has been selling a lot of face masks and exam gloves in January, and we've been selling a lot more facial tissue for cold and flu in January, so we will see how that progresses through the quarter. Bill Schmitz - Deutsche Bank: Got you. Then are you concerned at all about that if you look at the business segments three to four had declined at sequential margins. I mean, was it that third quarter was kind of anomaly and everything was so good?

So the point we made earlier on the other cost of sales, we probably had a little bit more start ups in fourth quarter and some asset write outs that affected us versus the third quarter then distribution expense started to pick up in a couple of markets and so we are digging into that, but I would say I am pretty happy with the progress for the year. We are up in all four segments year-on-year and that's really what we are aiming to do consistently over time. Bill Schmitz - Deutsche Bank: I mean, is it a way to say that it was like the third quarter the anomaly or was the fourth quarter the anomaly, or is it not that simple.

I don't think if I could be that precise with you. If I would say you look at personal care and are second end of the year that if we could be flat with 2011, we would be happy and we ended the year 60 basis points higher. So, we probably are a little ahead in third quarter of where we expected and it normalized a bit in the fourth quarter, but it broadly for the year, we're pleased with the progress we are making. Bill Schmitz - Deutsche Bank: Great. Thanks and then just one last one. Did you say what the sales impact of the distribution sell for the mid tier in China was? Was it material to the top line?

No. We didn't spill that out. So I mean the midtier in China is the biggest part of the category. So going into that was a plus. Now we started that in mid-2011. So it wasn’t a full year benefit but that was certainly part of the growth that we saw in China this year. We also picked up a couple of share points in China this year which, in a market that size, is substantial from a sales standpoint. Bill Schmitz - Deutsche Bank: Got you, and maybe I missed this, but can you talk about your country penetration in midtier? I am sorry, not retail penetration in China? Is it down or is there, I think you said, still some room there?

We were in 70 cities at the beginning of 2012. We were 80 by the end of 2012. We hope to be in 90 by the end of 2013. As you know, there are any more cities with at least a million people and that we are really not present in yet. So we have got ways to go to really be fully penetrated. Then there are other geographies as well. We are moving more aggressively in the Northeastern part of Brazil. We have been present but not really fully leveraging the opportunity there. So we are putting capacity up there and a little more dedicated sales effort. So that will help. In Russia, the same kind of thing, where we had a strong presence in the Moscow region but we are moving into some of the other former Soviet republics in the Central Asian countries and other Eastern European countries. Bill Schmitz - Deutsche Bank: Got you, and I promise, one last one. Do you think that advertising spend is going to track pulp cost because it seems like that’s the way it played out this year when it went 45 to 35 and then 25 and then 10?

No, I think it more track our innovation pipeline. We had more innovation that was frontend loaded this year and we are going spend behind good ideas and saw more of that than trying to drive pulp. A good chunk of the increased A&P is in personal care and in emerging markets where we are driving launch activity.

Our next question comes from Javier Escalante with Consumer Edge Research. Javier Escalante - Consumer Edge Research: Hi, good morning, everyone. I just would to go back to your forecast for the year and the commentary that the diaper category you expect to go down about 1% and that your expectation is that the birth rate may improve. We had done some analysis and we see basically the sales of newborn diapers being down 1% to 2% on top of minus 4% last year. So we thought that that would be a leading indicator of whether newborn were picking up and we don’t see that in the data. The counter part of that is that your business is more exposed to late stage diapering, training pants. So how that plans out in terms of your better outlook in the U.S., is number one? We don’t see that in the data yet. Number two, actually your business depends on later stage diapering.

I guess, I would say, Javier, we are looking at from predictive model for the birth rate. So we are looking at the male unemployment and consumer confidence also formation as more of a leading indicator of where it is going. As we backed up that has been the best fit model. So that model would say, has been predicting that the birth rate, we get less negative all year. That is pretty much what's happened. It's predicting for 2013, the birth rate flattens out where it is now. So when we talked about the diaper category being down about 1%, it is more that affect that as the babies haven’t been born in the last two years are not category now. So they won't be there in 2013 either. Certainly has affected our child care business more significantly this year as you had three or four years of birth rate decline at a total 8% or 9% that’s been showing up in our training pant business. We expect most of that is behind us and expect a little bit better or less negative category environment in 2013 than we had in 2012. Javier Escalante - Consumer Edge Research: That is good and my second question also has to do with what is your view what's happening in consumer tissue business and also in the U.S., I mean here bath issue and paper towels. You mentioned that private label picked up one to two points and a lot of it has come in from the competition, from your main competitor which has been innovating in the category, both paper towels and bath tissue and they are losing share. You guys don’t seem to be losing share. Could you help us understand how you see the consumer dynamics and why you are not been as pressured by private label as your competitors has been? Thank you.

Yes, we had more innovation. So if you look at the fourth quarter, our Kleenex volumes were 1%, Cottonelle was up 8%, Scott bath was up 1%, our Viva towel business was done a 2% and Scott towels is up 11%. So some of that was promotional timing, some of it we had good innovation on Cottonelle and it's a terrific product. And, so, I think we just continue to try to make sure we get quality promotion, we are doing great marketing, we keep bring innovation to the category and that makes it tougher for the private labels to fight against that, so it's a pretty simple formula.

Our next question comes from John Faucher with JPMorgan. John Faucher - JPMorgan: Hi, guys. Just want to follow-up a little bit on Chris's question, but sort of thinking about the margin structure in Europe longer-term, how should we think about where you guys can go as you get through some of the stranded overhead issues? What do you think is a sort of the long-term structural upside to margins there? Thanks.

Yes. I would say, medium-term, we would say double-digit operating margin is a reasonable goal, which would be a good improvement from where we have been, but then as Kim and the team look at that, they'd say long-term, they would like Europe to be at least equal to the corporate average and so they have got some work to do to get there. They, don't have all the answers to figure that out, but we've got good businesses in categories that are growing in Europe and the whole point of this restructuring effort is to the free up that team to focus on driving our baby wipes business where we've got good accretive margins and driving our child care and DryNites businesses, where we've got strong margin opportunities and making our Kleenex and Andrex and Scottex businesses successful in Europe and there are already great brands with great market positions, but we've got to put more up innovation and investment behind them to make them produce the kind of returns that we are looking for. So, I think, we got to execute the plan in front of us and get to a stable consistent place and then look how we can grow that from there. John Faucher - JPMorgan: Okay, so just a follow-up on that. It sound as though you feel like you guys, there is nothing structural to the categories themselves in Europe that would limit that. It's a question you are being able to go out and execute that?

Well, I think in Europe the big thing you worry about particularly in tissue is private label, so the private label structure in Europe is very different from anywhere else in the world where you are seeing bath tissue in some markets shares North of 70% for private label, so you've got be much probably a little bit more cost conscious and your innovations got to pop a little bit more to break through that. John Faucher - JPMorgan: Okay. Great. Thank you.

Next question comes from Linda Bolton Weiser with Caris. Linda Bolton Weiser - Caris: Hi. I was just wondering if on your projections for $150 million to $250 million of input cost inflation, is there any way to split it up roughly between like second half and first half? I would think quite a bit more in the second half.

Well, about two thirds of it is pulp and recycled fiber and you probably are right that in the first part of the year, at least the first quarter that doesn't look like there is going to be as much of that showing up so far, so that's probably a fair comment. Linda Bolton Weiser - Caris: Okay, that's actually all I had. Thanks.

At this time, we have no other questioners in the queue.

All right, thank you, David. We will wrap up with the closing comment from Tom.

Once again, we had a strong performance in 2012 and we are looking forward to keeping the momentum going in 2013, and thank you for your support of Kimberly-Clark.

Thank you.

Ladies and gentlemen, that concludes today's presentation. You may disconnect your phone lines and a wonderful weekend.