Consumer products giant Kimberly-Clark (NYSE:KMB) has been generating some fairly impressive -- in fact, record high -- cash flows recently, a trend that was noted at the year's midway point and later trumpeted after the company's third-quarter results were released. Over the past 12 months, free cash flows have topped the $2 billion mark, about double the $1.1 billion that was churned out last year. This morning, the company unveiled what it plans to do with all that cash.

Kimberly-Clark will not boost its dividend payment, or repurchase shares, or plough more money into research and development -- it plans to do all those things. First, quarterly dividends will be raised by a nickel, or 12.5%, to $0.45 -- which will lift the yield to about 2.8%. The company's annual dividend has grown by two-thirds since 2000, with an increase in each of the past five years.

Furthermore, management intends to buy back at least $1 billion of its stock in the coming year. This new program follows $1.6 billion that is expected to be spent on repurchases this year, and $537 million from the year before. Going forward, the company intends to buyback 2%-3% of its outstanding shares annually.

But today's good news didn't stop there for shareholders. Kimberly-Clark also outlined plans to slash costs by $400-$500 million within the next three years and grow returns on invested capital (ROIC) by 40 to 50 basis points annually. The company also announced the launch of new products (such as antiviral Kleenex and Huggies Bath & Body products) as well as plans to expand operations in a number of fast-growing, emerging markets, such as Russia, China, and India.

After spinning off its Neenah paper and Canadian pulp division recently, Kimberly-Clark is now focused on its core health & hygiene business, which is battling rising raw materials costs and fierce competition from Procter & Gamble (NYSE:PG). The company is expecting to spend up to an additional $100 million for pulp next year and has had limited success at passing along these price increases to consumers. In fact, the bulk of next year's anticipated 3%-5% sales growth will come from an increase in volume rather than prices.

Despite a strong upward move in the past few weeks, Kimberly-Clark still trades at only around 17 times next year's projected earnings of $3.70-$3.85 (a range that management recently reaffirmed). While that's not exactly cheap given the company's single-digit growth rates, it still represents a discount to rivals like Procter & Gamble and Playtex (NYSE:PYX). This morning's plans are a sure sign that Kimberly-Clark is brimming with self-confidence, which along with a growing pile of cash can only reassure investors.

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Fool contributor Nathan Slaughter owns none of the companies mentioned.