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What changed in Kimberly-Clark's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Kimberly-Clark's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+316 added−254 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-13)

Top changes in Kimberly-Clark's 2025 10-K

316 paragraphs added · 254 removed · 189 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe engage in continuous listening via global surveys, on an ongoing basis, that offer our employees the ability to provide feedback and valuable insights to help address potential issues and identify opportunities to improve and support employee engagement. • Inclusion, equity and diversity – We believe our business success is tied to creating workplaces, communities and experiences where inclusion, equity and diversity are evident and thriving.
Biggest changeWe conduct global surveys that offer our employees the ability to provide feedback and valuable insights to help address potential issues and identify opportunities to improve and support our employees’ experience. – Commitment to belonging and inclusion By embracing different perspectives and experiences, we strengthen our ability to unlock innovative solutions and understand consumers.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge on this website as soon as reasonably practicable after we file these reports and amendments with, or furnish them to, the Securities and Exchange Commission ("SEC").
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge on this website as soon as reasonably practicable after we electronically file these reports and amendments with, or furnish them to, the Securities and Exchange Commission ("SEC").
Distribution and Customers Products for household use are sold directly to supermarkets, mass merchandisers, drugstores, warehouse clubs, variety and department stores and other retail outlets, as well as through other distributors and e-commerce. Products for professional use are sold through distributors, directly to manufacturing, lodging, office building, food service, and high-volume public facilities, and through e-commerce.
Distribution and Customers Our essential products for household use are sold directly to supermarkets, mass merchandisers, drugstores, warehouse clubs, variety and department stores and other retail outlets, as well as through other distributors and e-commerce. Products for professional use are sold through distributors, directly to manufacturing, lodging, office building, food service, and high-volume public facilities, and through e-commerce.
Eligible employees are compensated for their contributions to our goals with both short-term cash incentives and long-term equity-based incentives. We also provide a variety of resources and services to help our employees plan for retirement. We believe the structure of our compensation packages provides the appropriate incentives to attract, retain and motivate our employees.
Eligible employees are compensated for their contributions to our success with both short-term cash incentives and long-term equity-based incentives. We also provide a variety of resources and services to help our employees plan for retirement. We believe the structure of our compensation packages provides the appropriate incentives to attract, retain and motivate our employees.
The Management Development and Compensation Committee (“MDC”) of the Board of Directors is responsible for reviewing our inclusion, equity and diversity strategy. • Compensation and benefits – We provide market-based competitive compensation through our salary, annual incentive and long-term incentive programs and robust benefits packages that promote employee well-being across all aspects of their lives.
The Management Development and Compensation Committee (“MDC”) of the Board of Directors is responsible for reviewing our belonging and inclusion strategy. • Compensation and benefits We provide market-based competitive compensation through our salary, annual incentive and long-term incentive programs and robust benefits packages that promote employee well-being across all aspects of their lives.
We are also subject to expanding laws and regulations related to sustainability-related matters, non-financial reporting and diligence, labor and employment, trade, taxation and data privacy and protection, including the European Union’s General Data Protection Regulation, Brazil's General Data Protection Law, China's Personal Information Protection Law, and the California Consumer Privacy Act of 2018.
We are also subject to expanding laws and regulations related to sustainability-related matters, non-financial reporting and diligence, labor and employment, trade, taxation and data privacy and protection, including, but not limited to, the European Union’s General Data Protection Regulation, Brazil's General Data Protection Law, China's Personal Information Protection Law, and the California Consumer Privacy Act of 2018.
The MDC is responsible for establishing and administering the policies governing annual compensation and long-term compensation to ensure that the policies are designed to align compensation with our overall business strategy and performance. 4 KIMBERLY-CLARK CORPORATION - 2024 Annual Report Available Information We make financial information, news releases and other information available on our corporate website at www.kimberly-clark.com .
MDC is responsible for establishing and administering the policies governing annual compensation and long-term compensation to ensure that the policies are designed to align compensation with our overall business strategy and performance. Available Information We make financial information, news releases and other information available on our corporate website at www.kimberly-clark.com .
Our sustainability strategy puts our brand, supply chain and innovation teams to work with the goal of creating shared value by addressing relevant global challenges and is focused on addressing key climate-related risks and opportunities throughout our value chain. 2 KIMBERLY-CLARK CORPORATION - 2024 Annual Report We strive to make lives better while also working to help safeguard the earth’s natural ecosystems.
Our sustainability strategy puts our brand, supply chain and innovation teams to work with the goal of creating shared value by addressing relevant global challenges and is focused on addressing key climate-related risks and opportunities throughout our value chain. We strive to make lives better while also working to help safeguard the earth’s natural ecosystems.
We host a series of conversations to drive employee and leadership engagement across a variety of topics on inclusion.
We host a series of conversations to drive employee and leadership engagement across a variety of topics, including belonging and inclusion.
We strive to use sustainable practices that support a healthy planet, build strong communities, and ensure our business will thrive for decades to come. Unless the context indicates otherwise, the terms "Corporation," "Kimberly-Clark," "K-C," "we," "our" and "us" refer to Kimberly-Clark Corporation and its consolidated subsidiaries.
We are committed to using sustainable practices that are designed to support a healthy planet, build strong communities, and enable our business to thrive for decades to come. Unless the context indicates otherwise, the terms "Corporation," "Company," "Kimberly-Clark," "K-C," "we," "our" and "us" refer to Kimberly-Clark Corporation and its consolidated subsidiaries.
Our portfolio of brands, including Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depend, Andrex, Pull-Ups, GoodNites, Intimus, Plenitud, Sweety, Softex, Viva and WypAll, encompass five global daily-need product categories: Baby & Child Care, Adult Care, Feminine Care, Family Care, and Professional.
Our portfolio of brands, including Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depend, Andrex, Pull-Ups, GoodNites, Intimus, Plenitud, Sweety, Softex, Viva and WypAll, hold No. 1 or No. 2 share positions in approximately 70 countries and encompass five global daily-need product categories: Baby & Child Care, Adult Care, Feminine Care, Family Care, and Professional.
Total operating expenses for environmental compliance, including pollution control equipment operation and maintenance costs, governmental fees, and research and engineering costs, are expected to be approximately $115 in 2025 and $140 in 2026. Total environmental capital expenditures and operating expenses are not expected to have a material effect on our total capital and operating expenditures, consolidated earnings or competitive position.
For 2026 and 2027, we expect total operating expenses for environmental compliance, including pollution control equipment operation and maintenance costs, governmental fees, and research and engineering costs, to be approximately $150 and $140, respectively. 3 KIMBERLY-CLARK CORPORATION - 2025 Annual Report Total environmental capital expenditures and operating expenses are not expected to have a material effect on our total capital and operating expenditures, consolidated earnings or competitive position.
This new operating structure leverages three synergistic forces: • Accelerating pioneering innovation to capture significant growth available in our product categories by investing in science and technology to satisfy unmet and evolving consumer needs; • Optimizing our margin structure to deliver superior consumer propositions and implement initiatives and deploy technology and data analytics designed to create a fast, adaptable, integrated supply chain with greater visibility that can deliver continuous improvement; and • Wiring our organization for growth to drive agility, speed, and focused execution that extends our competitive advantages further into the future.
This new operating model and strategy leverages three synergistic pillars: • Accelerating pioneering innovation to capture significant growth available in our product categories by investing in science-based and proprietary technology to solve unmet and evolving consumer needs, and delivering breakthrough storytelling to drive category participation and brand love; • Optimizing our margin structure to deliver superior consumer propositions at every rung of the good, better, best ladder, and implement initiatives and deploy technology and data analytics designed to create a fast, adaptable, integrated supply chain with greater visibility that can deliver continuous improvement; and • Wiring our organization for growth to drive agility, speed, and focused execution that extends our competitive advantages further into the future.
The information contained on or connected to our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this or any other report filed with the SEC. Stockholders may also contact Stockholder Services, P.O. Box 612606, Dallas, Texas 75261-2606 to obtain a hard copy of these reports without charge.
The information contained on or connected to our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this or any other report filed with the SEC. Stockholders may also contact Stockholder Services, P.O.
ITEM 1. BUSINESS Description of Kimberly-Clark Kimberly-Clark Corporation was founded in 1872 and incorporated in Delaware in 1928. We are a global company focused on delivering products and solutions that provide better care for a better world through product innovation and building o ur brands.
ITEM 1. BUSINESS Description of Kimberly-Clark Kimberly-Clark Corporation was founded in 1872 and incorporated in Delaware in 1928. We are a global company focused on delivering essential products and solutions that solve unmet consumer needs and provide Better Care for a Better World.
Net sales to Walmart Inc. were primarily in the NA segment. 1 KIMBERLY-CLARK CORPORATION - 2024 Annual Report Acquisitions and Divestitures During the periods included within this Annual Report on Form 10-K, we completed the following acquisition and divestiture activity: • 2024 - The sale of our personal protective equipment business which included Kimtech branded products such as gloves, apparel and masks, and KleenGuard branded products such as gloves, apparel, respirators and eyewear.
Acquisitions and Divestitures During the periods included within this Annual Report on Form 10-K, we completed the following acquisition and divestiture activity: • 2024 - The sale of our personal protective equipment business which included Kimtech branded products such as gloves, apparel and masks, and KleenGuard branded products such as gloves, apparel, respirators and eyewear. • 2023 - The acquisition of the remaining shares of Thinx Inc.
We believe we can make meaningful contributions through our business activities and operations to clean water and sanitation, climate action and responsible consumption and production.
We believe we can make meaningful contributions through our business activities, operations and global charitable partnerships to clean water and sanitation, the advancement of essential care for underserved communities, climate action and responsible consumption and production.
We have made, and plan to continue making, necessary expenditures for compliance with applicable laws and regulations; however, total capital expenditures and operating expenses related to compliance are not expected to have a material effect on our total capital and operating expenditures, consolidated earnings or competitive position. 3 KIMBERLY-CLARK CORPORATION - 2024 Annual Report Human Capital Management We had approximately 38,000 employees as of December 31, 2024 in our consolidated operations.
We have made, and plan to continue making, necessary expenditures for compliance with applicable laws and regulations; however, total capital expenditures and operating expenses related to compliance are not expected to have a material effect on our total capital and operating expenditures, consolidated earnings or competitive position.
This business and brands serve a variety of scientific and industrial industries globally. • 2023 - The acquisition of the remaining shares of Thinx Inc. (“Thinx”), an industry leader in the reusable period and incontinence underwear category. • 2023 - The sale of our Neve tissue brand and related consumer and professional tissue assets in Brazil.
(“Thinx”), an industry leader in the reusable period and incontinence underwear category. • 2023 - The sale of our Neve tissue brand and related consumer and professional tissue assets in Brazil.
These transactions are discussed in greater detail in Item 8, Note 3 to the consolidated financial statements. Patents and Trademarks We own various patents and trademarks registered domestically and in many foreign countries. We consider the patents and trademarks that we own and the trademarks under which we sell certain of our products to be material to our business.
These transactions are discussed in greater detail in Item 8, Note 4 to the Consolidated Financial Statements. 2 KIMBERLY-CLARK CORPORATION - 2025 Annual Report Patents and Trademarks We own various patents and trademarks registered domestically and in many foreign countries.
In order to recruit, retain, develop, protect and fairly compensate our employees, we focus on the following four key areas: • Health and safety – We strive to protect the health and safety of our employees. We create and administer company-wide policies and processes designed to protect our employees and to comply with applicable safety regulations.
Approximately 50% of our workforce was directly involved in manufacturing and distribution operations. In order to recruit, retain, develop, protect and fairly compensate our employees, we focus on the following three key areas: • Health and safety We strive to protect the health and safety of our employees.
For additional discussion of the competitive environment in which we conduct our business, see Item 1A, "Risk Factors." Corporate Responsibility and Sustainability Better care for a better world begins with focusing on the health and safety of our customers, consumers, and employees; promoting the value of inclusion, equity and diversity within our business; and making efforts to protect the rights of workers across our supply chain.
Delivering our purpose begins with focusing on the health and safety of our customers, consumers, and employees; promoting the value of inclusion and belonging within our business; and making efforts to protect the rights of workers across our supply chain.
We are principally engaged in the manufacturing and marketing of a wide range of products made from natural or synthetic fibers and materials using advanced technologies in fibers, nonwovens and absorbency. Fueled by ingenuity, creativity, and an understanding of people's most essential needs, we create products that help individuals experience more of what's important to them.
We are principally engaged in the manufacturing and marketing of a wide range of products made from natural or synthetic fibers and materials using advanced technologies in fibers, nonwovens and absorbency. Kimberly-Clark and our trusted brands are an indispensable part of life for people in more than 175 countries and territories.
Consequently, we seek patent and trademark protection by all available means, including registration.
We consider the patents and trademarks that we own and the trademarks under which we sell certain of our products to be material to our business. Consequently, we seek patent and trademark protection by all available means, including registration.
Amounts within this Annual Report on Form 10-K are reported in millions, except per share amounts, unless otherwise noted.
Amounts within this Annual Report on Form 10-K are reported in millions, except per share amounts, unless otherwise noted. Recent Business Developments Pending Acquisition of Kenvue, Inc. On November 2, 2025, we entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire the outstanding equity interests of Kenvue, Inc.
The principal methods and elements of competition include brand recognition and loyalty, product innovation, quality and performance, price, and marketing and distribution capabilities.
The principal methods and elements of competition include brand recognition and loyalty, product innovation, quality and performance, price, and marketing and distribution capabilities. For additional discussion of the competitive environment in which we conduct our business, see Item 1A, "Risk Factors." Corporate Responsibility and Sustainability We are a purpose-led company with purposeful brands.
Our largest customer, Walmart Inc., represented approximately 14% in 2024 and 13% in 2023 and 2022 of our consolidated net sales.
Our largest customer, Walmart Inc., represented approximatel y 16% i n 2025 and 2024 and 15% in 2023 of our net sales from continuing operations. Net sales to Walmart Inc. were primarily in the NA segment.
Business Strategy and Segment Reporting During fiscal 2024, we announced our 2024 Transformation Initiative in order to create a more agile and focused operating structure that will accelerate our proprietary pipeline of innovation in right-to-win spaces and improve our growth trajectory, profitability, and returns on investment.
As part of this, we launched our Powering Care business strategy to sharpen our focus on proprietary right-to-win spaces and improve our growth trajectory, profitability, and returns on investment.
Health and safety training is regularly provided to our employees. We review and monitor our performance closely to drive continuous improvement in our safety programs. • Development and employee engagement – Developing talent and leaders at all levels of the organization and engaging our employees is critical to our long-term success.
We review and monitor our performance closely to drive continuous improvement in our safety programs. 4 KIMBERLY-CLARK CORPORATION - 2025 Annual Report • Employee development and employee engagement Our long-term business success is tied to building a purpose-led, performance-driven employee culture where our people feel included, valued, heard, and supported.
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As part of this transformation, we realigned our internal operating and management structure to streamline our global supply chain and improve the efficiency of our corporate and regional overhead cost structures.
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("Kenvue"), a global consumer health leader, for stock and cash consideration (the "Kenvue Acquisition").
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As a result of this realignment, we manage and report our operations through three reportable segments defined by geographic regions and product groupings: North America ("NA"), International Personal Care ("IPC") and International Family Care and Professional ("IFP").
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Under the terms of the Merger Agreement, which was unanimously approved by the Boards of Directors of each of Kimberly-Clark and Kenvue, each share of Kenvue common stock, par value $0.01 per share, issued and outstanding at the close of the Kenvue Acquisition (subject to certain provisions within the Merger Agreement) will be converted into the right to receive (i) 0.14625 shares of Kimberly-Clark common stock, par value $1.25 per share (the "Stock Consideration"), plus (ii) $3.50 in cash (the "Cash Consideration" and, together with the Stock Consideration, the "Merger Consideration").
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Further, our measure of segment profitability was changed to include the effects of changes in exchange rates on monetary assets and liabilities for subsidiaries where we have adopted highly inflationary accounting. Segment results for the historical periods presented in these consolidated financial statements have been recast to reflect these changes.
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In total, we expect approximately 280 million shares of common stock to be issued and approximately $6.7 billion to be paid for the Merger Consideration. The Cash Consideration is expected to be funded through a combination of cash on hand, proceeds from new debt issuance, and proceeds from the IFP Transaction (as defined below).
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These changes had no impact on our previously reported consolidated net sales, operating profit, net income attributable to Kimberly-Clark or earnings per share. These segments are described in greater detail in Item 8, Note 15 to the consolidated financial statements.
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The actual value of the transaction will fluctuate based upon changes in the price of Kimberly-Clark common stock and the number of shares of Kenvue common stock outstanding at the time of closing. See Item 8, Note 4 to the Consolidated Financial Statements for further details.
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For 2025 and 2026, we expect total capital expenditures for voluntary environmental controls or controls necessary to comply with legal requirements relating to the protection of the environment at our facilities to average approximately $60 on an annual basis.
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International Family Care and Professional ("IFP") Transaction On June 5, 2025, we announced that the Company will form a joint venture with Suzano S.A. ("Suzano") and Suzano International Holding B.V., a wholly-owned subsidiary of Suzano ("Buyer"), comprised of substantially all the operations of the Company's former International Family Care and Professional ("IFP") segment (the "IFP Business").
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Approximately 35% of our employees were located in North America and the remainder were in approximately 60 countries outside of North America. Overall, approximately 55% of our workforce was directly involved in manufacturing and distribution operations.
Added
To facilitate this transaction, we entered into an Equity and Asset Purchase Agreement (the "Purchase Agreement") with Buyer, pursuant to which we will, among other things, effectuate a reorganization through the transfer of certain assets, liabilities and equity interests of the IFP Business to Kimberly-Clark IFP NewCo B.V., an indirect wholly-owned subsidiary of the Company (the "Joint Venture").
Removed
We maintain talent and succession planning processes and have leadership and management development programs as well as broad learning opportunities to support career growth and skill advancement. We also offer all employees the opportunity to join any of our Employee Resource Groups ("ERGs"). These groups foster professional development, social connectivity, and celebrate diversity throughout our company.
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At the time of closing, which is expected to take place in mid-2026 and will only take place following the satisfaction of consultation requirements and customary closing conditions, including obtaining required regulatory approvals, Buyer will acquire a 51% interest in the Joint Venture for a purchase price of approximately $1.7 billion, subject to certain closing adjustments set forth in the Purchase Agreement, and we will retain a 49% equity interest (the "IFP Transaction").
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Current ERGs provide community and insights into the perspectives and experiences of those with African, Hispanic, Latino, and Asian ancestry, women, and LGBTQ+, as well as parents, caregivers, people with disabilities, military veterans, and new employees.
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As a result, the results of the IFP Business are reported as discontinued operations and excluded from both continuing operations and segment results for all periods presented. Unless otherwise noted, all amounts, percentages and disclosures in this Annual Report on Form 10-K reflect only Kimberly-Clark's continuing operations.
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Our ERGs promote career development by allowing employees to connect with and learn from one another and help amplify our inclusion, equity and diversity efforts. In regard to employee engagement, we hold regular Town Hall meetings where employees can ask questions of executives and make their voice heard.
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See Item 8, Notes 1 and 3 to the Consolidated Financial Statements for further details. 1 KIMBERLY-CLARK CORPORATION - 2025 Annual Report Segment Reporting As a result of the IFP Transaction discussed above, the Company's continuing operations are now organized into two reportable segments defined by geographic region: North America ("NA") and International Personal Care ("IPC").
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We prioritize the need to cultivate a workforce where our employees are included and empowered to do their best work. Employing people from disparate backgrounds, cultures, and experiences amplifies our ability to gather insights, foster innovation and understand the culture, context, and mindset of consumers around the world.
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The results of the IFP Business, including certain costs that were previously allocated to the IPC segment that relate to assets or activities that are part of the IFP Transaction, are reported as discontinued operations and excluded from segment results for all periods presented.
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As a company who serves global consumers and communities, we work to cultivate a workforce comprised of people who look, think, and behave like the people who use our products – now and in the future. As such, we support workforce inclusion, equity and diversity and consider it a fundamental business strategy.
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Additionally, certain operations and commercial activities of the former IFP segment retained by the Company are now reported in the NA and IPC segments.
Added
Further, Corporate and Other was updated for all periods presented to include the following: • Operations of the former IFP segment that were divested prior to the IFP Transaction and therefore not reported as discontinued operations. • Costs previously allocated to the former IFP segment that are not directly attributable to the operations included in the IFP Transaction and therefore are not reported as discontinued operations.
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Segments are described in greater detail in Item 8, Note 16 to the Consolidated Financial Statements. 2024 Transformation Initiative During fiscal 2024, we announced our 2024 Transformation Initiative in order to create a more agile and focused operating model.
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Our longstanding focus on sustainability and our commitment to provide Better Care for a Better World comes to life through four interconnected pillars: Better Products, Better Planet, Better Workplace and Better Society.
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Human Capital Management As of December 31, 2025, we had approximately 36,000 employees in our consolidated operations, including employees of our IFP Business reported as discontinued operations. Approximately 35% of our employees were located in North America. The remaining employees were located in approximately 55 countries outside of North America.
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We create and administer company-wide policies and processes designed to protect our employees and to comply with applicable safety regulations. Health and safety training is regularly provided to our employees.
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It is demonstrated through our: – Talent and succession planning processes, leadership and management development programs, and broad learning opportunities We believe that developing and engaging employees at all levels of the organization is critical to their skill advancement and professional growth. – Continuous listening We hold regular Town Hall meetings where employees can ask executives questions and make their voices heard.
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Belonging and inclusion are not only fundamental business strategies, but they’re essential to who we are. We offer all employees the opportunity to join any of our voluntary inclusion networks. These networks foster professional development, build connections, amplify insights that inform our business strategy, and celebrate the wide range of perspectives and experiences throughout our company.
Added
By creating spaces for learning and connection for all employees, our inclusion networks drive belonging and inclusion efforts across our company and support career growth for all.
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Box 612606, Dallas, Texas 75261-2606 to obtain a hard copy of these reports without charge. 5 KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe changes introduced by data privacy and protection regulations increase the complexity of regulations enacted to protect business and personal data and they subject us to additional costs. These laws and regulations also may result in us incurring additional expenses and liabilities in the event of unauthorized access to or disclosure of personal data.
Biggest changeThese laws and regulations change frequently, and new legislation continues to be introduced and may be interpreted and applied differently from jurisdiction to jurisdiction and may create inconsistent or conflicting requirements. The changes introduced by data privacy and protection regulations increase the complexity of regulations enacted to protect business and personal data and they subject us to additional costs.
Risks related to political instabilities and hostilities (including the wars in Ukraine and Israel), expropriation, new or revised legal or regulatory constraints, difficulties in enforcing contractual and intellectual property rights, and potentially adverse tax consequences could adversely affect our financial results. • The imposition of increased or new tariffs, sanctions, export controls, quotas, trade barriers, price floors or similar restrictions on our sales or key commodities, potential changes in U.S. trade programs and trade relations with other countries, or regulations, taxes or policies that might negatively affect our sales or profitability. • Greater economic volatility and vulnerability to infrastructure and labor disruptions.
Risks related to political instabilities and hostilities (including the war in Ukraine), expropriation, new or revised legal or regulatory constraints, difficulties in enforcing contractual and intellectual property rights, and potentially adverse tax consequences could adversely affect our financial results. • The imposition of increased or new tariffs, sanctions, export controls, quotas, trade barriers, price floors or similar restrictions on our sales or key commodities, potential changes in U.S. trade programs and trade relations with other countries, or regulations, taxes or policies that might negatively affect our sales or profitability. • Greater economic volatility and vulnerability to infrastructure and labor disruptions.
These activities are subject to inherent risks such as natural disasters, power outages, fires or explosions, labor strikes or labor shortages, terrorism, epidemics, pandemics, import restrictions, regional economic, business, environmental or political events (including the wars in Ukraine and Israel), governmental regulatory requirements or nongovernmental voluntary actions in response to global climate change or other concerns regarding the sustainability of our business, which could disrupt our supply chain and impair our ability to manufacture or sell our products.
These activities are subject to inherent risks such as natural disasters, power outages, fires or explosions, labor strikes or labor shortages, terrorism, epidemics, pandemics, import restrictions, regional economic, business, environmental or political events (including the war in Ukraine), governmental regulatory requirements or nongovernmental voluntary actions in response to global climate change or other concerns regarding the sustainability of our business, which could disrupt our supply chain and impair our ability to manufacture or sell our products.
Our inability to address adverse publicity or other issues, including with respect to product safety, quality, efficacy, environmental impacts (including packaging, energy and water use and waste management), substances and ingredients of potential concern, inclusion, equity and diversity, human rights and other social responsibility or similar matters, or breaches of consumer, customer, supplier, employee or other confidential information, real or perceived, could negatively impact sentiment towards us and our products and brands, and our business and financial results could suffer.
Our inability to address adverse publicity or other issues, including with respect to product safety, quality, efficacy, environmental impacts (including packaging, energy and water use and waste management), substances and ingredients of potential concern, inclusion and belonging, human rights and other social responsibility or similar matters, or breaches of consumer, customer, supplier, employee or other confidential information, real or perceived, could negatively impact sentiment towards us and our products and brands, and our business and financial results could suffer.
Increases in the cost and availability of raw materials, including pulp and petroleum-based materials, the cost of energy, transportation and other necessary services, supplier constraints, supplier consolidation which could limit our sources of supply for these items, an inability to maintain favorable supplier arrangements and relations or an inability to avoid disruptions in production output could have an adverse effect on our financial results.
Increases in the cost and availability of raw materials, including pulp and petroleum-based materials, the cost of energy, transportation and other necessary services, supplier constraints, supplier consolidation which could limit our sources of supply for these items, an inability to maintain favorable supplier arrangements and relations, the impact of health pandemics or an inability to avoid disruptions in production output could have an adverse effect on our financial results.
This interruption, if not mitigated in advance or otherwise effectively managed, could adversely impact our business, financial condition and results of operations, as well as require additional resources to address. 8 KIMBERLY-CLARK CORPORATION - 2024 Annual Report We have a complex network of suppliers, including a number of sole-source and single-source suppliers for certain commodities and raw material inputs.
This interruption, if not mitigated in advance or otherwise effectively managed, could adversely impact our business, financial condition and results of operations, as well as require additional resources to address. 9 KIMBERLY-CLARK CORPORATION - 2025 Annual Report We have a complex network of suppliers, including a number of sole-source and single-source suppliers for certain commodities and raw material inputs.
Disruptions in the credit markets, limitations on our ability to borrow, a reduction in our liquidity or an increase in our borrowing costs could materially and adversely affect our financial condition and results of operations. 9 KIMBERLY-CLARK CORPORATION - 2024 Annual Report Climate change and other sustainability matters may adversely affect our business and operations.
Disruptions in the credit markets, limitations on our ability to borrow, a reduction in our liquidity or an increase in our borrowing costs could materially and adversely affect our financial condition and results of operations. 10 KIMBERLY-CLARK CORPORATION - 2025 Annual Report Climate change and other sustainability matters may adversely affect our business and operations.
These systems include, but are not limited to, programs and processes relating to internal communications and communicating with customers, consumers, vendors, investors and other parties; ordering and managing materials from suppliers; converting materials to finished products; receiving and processing purchase orders and shipping products to customers; processing transactions; storing, processing and transmitting data, including personal confidential information and payment card industry data; supporting employee data processing for our global workforce; hosting, processing and sharing confidential and proprietary research, business and financial information; and complying with financial reporting, regulatory, legal and tax requirements.
These systems include, but are not limited to, programs and processes relating to internal communications and communicating with customers, consumers, vendors, investors and other parties; ordering and managing materials from suppliers; converting materials to finished products; receiving and processing purchase orders and shipping products to customers; processing transactions; storing, processing and transmitting data, including personal confidential information and payment card industry data; supporting employee data processing for our global workforce; hosting, processing and 6 KIMBERLY-CLARK CORPORATION - 2025 Annual Report sharing confidential and proprietary research, business and financial information; and complying with financial reporting, regulatory, legal and tax requirements.
Our international operations are subject to foreign market risks, including changes in foreign currency exchange rates, currency restrictions and political, social and economic instability, which may adversely affect our financial results. Our strategy includes operations growth outside the U.S., especially in developing markets such as China, Eastern Europe, ASEAN and Latin America.
Our international operations are subject to foreign market risks, including changes in foreign currency exchange rates, currency restrictions, political, social and economic instability, and the imposition of increased or new tariffs, which may adversely affect our financial results. Our strategy includes operations growth outside the U.S., especially in developing markets such as China, Eastern Europe, ASEAN and Latin America.
Whether or not a claim is successful, without merit or not fully pursued, negative publicity arising from allegations regarding our products, processes or business practices could adversely affect our reputation and brand image. In addition, new or revised laws, regulations or their interpretation may alter the environment in which we do business which could adversely impact our financial results.
Whether or not a claim is successful, without merit or not fully pursued, negative publicity arising from allegations regarding our products, processes or business practices could adversely affect our reputation and brand image. 12 KIMBERLY-CLARK CORPORATION - 2025 Annual Report In addition, new or revised laws, regulations or their interpretation may alter the environment in which we do business which could adversely impact our financial results.
Demand for our products may change based on many factors, including shifting consumer purchasing patterns to lower cost options such as private-label products and mid to lower-tier value products, low birth rates in certain countries due to slow economic growth or other factors, negative customer or consumer response to pricing actions, consumer shifts in distribution from traditional retailers to e-tailers, subscription services and direct to consumer businesses, changing consumer preferences due to increased concerns in regard to post-consumer waste and packaging materials and their impact on environmental sustainability, or other changes in consumer trends or habits.
Demand for our products may change based on many factors, including shifting consumer purchasing patterns to lower cost options such as private-label products and mid to lower-tier value products, low birth rates in certain countries due to slow economic growth or other factors, negative customer or consumer response to pricing actions, consumer shifts in distribution from traditional retailers to e-tailers, subscription services and direct to consumer businesses, changing consumer preferences due to increased concerns in regard to post-consumer waste and packaging 11 KIMBERLY-CLARK CORPORATION - 2025 Annual Report materials and their impact on environmental sustainability, the impact of health pandemics or other changes in consumer trends or habits.
Increases in applicable tax rates, implementation of new taxes, changes in applicable tax laws and interpretations of these tax laws and actions by tax authorities in jurisdictions in which we operate could reduce our after-tax income and have an adverse effect on our results of operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Increases in applicable tax rates, implementation of new taxes, changes in applicable tax laws and interpretations of these tax laws and actions by tax authorities in jurisdictions in which we operate could reduce our after-tax income and have an adverse effect on our results of operations.
In March 2024, we announced our 2024 Transformation Initiative intended to improve our focus on growth and reduce our structural cost base by realigning our internal operating and management structure to streamline our global supply chain and improve the efficiency of our corporate and regional overhead cost structures.
In March 2024, we announced our 2024 Transformation Initiative intended to improve our focus on growth and reduce our structural cost base by realigning our internal operating and management structure to streamline our global supply chain and improve the efficiency of our corporate and regional overhead cost structures. In addition, we expect ongoing cost savings from our continuous improvement activities.
System upgrades take time, require oversight and may be costly, and pose several challenges, including training of personnel, communication of new rules and procedures, migration of data, increased risk of security breaches, and the potential instability of the new system.
System upgrades take time, require oversight and 7 KIMBERLY-CLARK CORPORATION - 2025 Annual Report may be costly, and pose several challenges, including training of personnel, communication of new rules and procedures, migration of data, increased risk of security breaches, and the potential instability of the new system.
In addition, 7 KIMBERLY-CLARK CORPORATION - 2024 Annual Report we expect ongoing cost savings from our continuous improvement activities. We anticipate these cost savings will result from reducing material costs and manufacturing waste and realizing productivity gains, distribution efficiencies and overhead reductions in each of our business segments and in our corporate functions.
We anticipate these cost savings will result from reducing material costs and manufacturing waste and realizing productivity gains, distribution efficiencies and overhead reductions in each of our business segments and in our corporate functions.
A sustained labor shortage or increased turnover rates within our employee base could lead to increased costs over time, such as increased overtime to meet demand, and increased wages to attract and retain employees.
We are experiencing an increasingly tight and competitive labor market and, should conditions worsen, we could experience greater turnover. A sustained labor shortage or increased turnover rates within our employee base could lead to increased costs over time, such as increased overtime to meet demand, and increased wages to attract and retain employees.
The war between Russia and Ukraine has negatively impacted, and may continue to negatively impact, our operations in Russia and the surrounding region. Consistent with the humanitarian nature of our products, we manufacture and sell only essential items in Russia, such as baby diapers and feminine pads, which are critical to the health and hygiene of women, girls and babies.
Consistent with the humanitarian nature of our products, we 8 KIMBERLY-CLARK CORPORATION - 2025 Annual Report manufacture and sell only essential items in Russia, such as baby diapers and feminine pads, which are critical to the health and hygiene of women, girls and babies.
These divestitures may adversely impact our results if we are unable to offset the dilutive impacts from the loss of revenue associated with the divested products or businesses, or mitigate overhead costs allocated to those businesses.
Divestitures may adversely impact our results if we are unable to offset the dilutive impacts from the loss of revenue associated with the divested products or businesses, or mitigate overhead costs allocated to those businesses. Furthermore, divestitures could adversely affect our ongoing business operations, including by enhancing our competitors' positions or reducing consumer confidence in our ongoing brands and products.
There can be no assurance that we will be fully protected against substantial changes in the price or availability of energy sources.
There can be no assurance that we will be fully protected against substantial changes in the price or availability of energy sources. There can be no assurance that our efforts to minimize the impact of increased costs, including increasing selling prices, in response to the increased costs will be successful.
To conduct our business, we rely extensively on information and operational technology systems, many of which are managed, hosted, provided and/or used by third parties and their vendors.
Failure of key technology systems, cyberattacks, privacy breaches or data breaches could have a material adverse effect on our business, financial condition, results of operations and reputation. To conduct our business, we rely extensively on information and operational technology systems, many of which are managed, hosted, provided and/or used by third parties and their vendors.
Furthermore, the divestitures could adversely affect our ongoing business operations, including by enhancing our competitors' positions or reducing consumer confidence in our ongoing brands and products. The inability to effectively and efficiently manage acquisitions and divestitures with the results we expect or in the timeframe we anticipate could adversely affect our business, consolidated financial condition, results of operations or liquidity.
The inability to effectively and efficiently manage business development activities, including acquisitions and divestitures, with the results we expect or in the timeframe we anticipate could adversely affect our business, consolidated financial condition, results of operations or liquidity. Disruptions in the credit markets or changes to our credit ratings may adversely affect our business.
We may pursue acquisitions of product lines or businesses from third parties. Acquisitions involve numerous risks, including difficulties in the assimilation of the operations, technologies, services and products of the acquired product lines or businesses, estimation and assumption of liabilities and contingencies, personnel turnover and the diversion of management's attention from other business concerns.
Such activities involve numerous risks, including risk of litigation or regulatory actions, unexpected costs or expenses, difficulties in the assimilation of the operations, technologies, services and products of acquired product lines or businesses, estimation and assumption of liabilities and contingencies, business disruption during the pendency of or following the proposed transaction, personnel turnover and the diversion of management's attention from other business concerns.
We are in the process of upgrading our enterprise resource planning system (known as SAP) to enhance operating efficiencies and provide more effective management of our business operations.
These laws and regulations also may result in us incurring additional expenses and liabilities in the event of unauthorized access to or disclosure of personal data. We are in the process of upgrading our enterprise resource planning system (known as SAP) to enhance operating efficiencies and provide more effective management of our business operations.
In order to stay competitive, it may be necessary for us to lower prices on our products and increase spending on advertising and promotions, which could adversely affect our financial results.
In order to stay competitive, it may be necessary for us to lower prices on our products and increase spending on advertising and promotions, which could adversely affect our financial results. In addition, foreign governments may decide to implement tax and other policies that favor their domestic manufacturers at the expense of international manufacturers, including our company.
Our business and results could also be negatively impacted by the effects of product-related litigation, allegations of product tampering or contamination, or the distribution and sale of counterfeit products. Disruption in our supply chain or our manufacturing or distribution operations could adversely affect our business . Our ability to manufacture, distribute and sell products is critical to our operations.
Disruption in our supply chain or our manufacturing or distribution operations could adversely affect our business . Our ability to manufacture, distribute and sell products is critical to our operations.
Our business is subject to the risk of litigation involving customers, consumers, suppliers, competitors, shareholders, government agencies or others through private actions, class 11 KIMBERLY-CLARK CORPORATION - 2024 Annual Report actions, whistleblower claims, administrative proceedings, regulatory actions or other litigation.
We could be subject to significant legal liability and litigation expense if we fail to comply with applicable laws, regulations, policies and related interpretations. Our business is subject to the risk of litigation involving customers, consumers, suppliers, competitors, shareholders, government agencies or others through private actions, class actions, whistleblower claims, administrative proceedings, regulatory actions or other litigation.
We may be unable to successfully integrate and manage product lines or businesses that we may acquire in the future, or be unable to achieve anticipated benefits or cost savings from acquisitions in the timeframe we anticipate, or at all. We may periodically divest product lines or businesses.
We may be unable to achieve anticipated benefits or cost savings from business development activities in the timeframe we anticipate, or at all.
Disruptions in the credit markets or changes to our credit ratings may adversely affect our business. We access the long-term and short-term capital markets to obtain financing.
We access the long-term and short-term capital markets to obtain financing.
We may be unable to anticipate or adequately respond to changes in consumer demand for our products.
These actions could have a significant negative effect on our pricing, market share and operating results in these markets. We may be unable to anticipate or adequately respond to changes in consumer demand for our products.
Our inability to attract and retain key personnel could adversely impact our business. We must attract, hire, retain and develop effective leaders and a highly skilled and diverse global workforce. We are experiencing an increasingly tight and competitive labor market and, should conditions worsen, we could experience greater turnover.
Our business and results could also be negatively impacted by the effects of product-related litigation, allegations of product tampering or contamination, or the distribution and sale of counterfeit products. Our inability to attract and retain key personnel could adversely impact our business. We must attract, hire, retain and develop effective leaders and a highly skilled and diverse global workforce.
In the case of our sole-source suppliers, failure to successfully negotiate satisfactory purchase terms could adversely impact our business. We face various risks related to health epidemics, pandemics and similar outbreaks, which may have material adverse effects on our business, financial position, results of operations and cash flows.
In the case of our sole-source suppliers, failure to successfully negotiate satisfactory purchase terms could adversely impact our business. Our engagement in business development activities, including acquisitions or divestitures of product lines or businesses, could impact our business, consolidated financial condition, results of operations or liquidity.
Removed
There can be no assurance that our efforts to minimize the impact of increased costs, including increasing selling prices, in response to the increased costs will be successful. 5 KIMBERLY-CLARK CORPORATION - 2024 Annual Report Failure of key technology systems, cyberattacks, privacy breaches or data breaches could have a material adverse effect on our business, financial condition, results of operations and reputation.
Added
The war between Russia and Ukraine has negatively impacted, and may continue to negatively impact, our operations in Russia and the surrounding region.
Removed
These laws and regulations change frequently, and new legislation continues to be introduced and may be interpreted and applied differently from 6 KIMBERLY-CLARK CORPORATION - 2024 Annual Report jurisdiction to jurisdiction and may create inconsistent or conflicting requirements.
Added
We have pursued, and expect to continue to pursue, various business development activities, including joint ventures, equity investments, licensing agreements and acquisitions or divestitures of product lines or businesses.
Removed
Our business and financial results may be negatively impacted by health epidemics, pandemics and similar outbreaks.
Added
Such activities may affect the ability of the Company to maintain relationships with customers, suppliers, employees, stockholders and others. We may be unable to successfully integrate and manage product lines or businesses that we acquire.
Removed
The COVID-19 pandemic has had and could continue to have negative impacts on our business, including causing significant volatility in demand for our products, changes in consumer behavior and preference, disruptions in our manufacturing and supply chain operations, disruptions to our cost saving programs, limitations on our employees’ ability to work and travel, significant changes in the economic or political conditions in markets in which we operate and related currency and commodity volatility.
Added
Risks Relating to the Pending Mergers with Kenvue K-C stockholders and Kenvue stockholders, in each case as of immediately prior to the mergers, will have reduced ownership in the combined company and less influence over management. We anticipate issuing approximately 280 million shares of common stock pursuant to the Merger Agreement.
Removed
Despite our efforts to manage these impacts, their ultimate impact also depends on factors beyond our knowledge or control, including the duration and severity of any such outbreak and actions taken to contain its spread and mitigate its public health effects. We may acquire or divest product lines or businesses, which could impact our results.
Added
The actual number of shares of common stock to be issued pursuant to the Merger Agreement will be determined at the closing of the mergers based on the number of shares of Kenvue common stock outstanding immediately prior to the first merger.
Removed
In addition, foreign governments may decide to 10 KIMBERLY-CLARK CORPORATION - 2024 Annual Report implement tax and other policies that favor their domestic manufacturers at the expense of international manufacturers, including our company. These actions could have a significant negative effect on our pricing, market share and operating results in these markets.
Added
The issuance of these new shares could have the effect of depressing the market price of our common stock, through dilution of earnings per share or otherwise. Any dilution of, or delay of any accretion to, our earnings per share could cause the price of our common stock to decline or increase at a reduced rate.
Removed
We could be subject to significant legal liability and litigation expense if we fail to comply with applicable laws, regulations, policies and related interpretations.
Added
Immediately after the closing of the mergers, it is expected that K-C stockholders as of immediately prior to the mergers will own approximately 54%, and Kenvue stockholders as of immediately prior to the mergers will own approximately 46%, of the issued and outstanding shares of K-C common stock, in each case calculated based on the fully diluted market capitalizations of K-C and Kenvue as of the date of signing of the Merger Agreement.
Added
As a result, current K-C stockholders and current Kenvue stockholders will have less influence on the management and policies of the combined company than they currently have on the management and policies of K-C and Kenvue, respectively. The mergers may not be completed and the Merger Agreement may be terminated in accordance with its terms.
Added
The mergers are subject to a number of conditions that must be satisfied or waived prior to the closing of the mergers, including, among other things, (i) the receipt of regulatory approvals, (ii) the absence of any legal restraint in effect that would prevent, make illegal, enjoin or prohibit the consummation of the mergers, (iii) the truth and accuracy of the representations and warranties made as of the date the Merger Agreement was entered into and as of the date the mergers are completed, subject to materiality standards, and (iv) the performance by all parties to the Merger Agreement in all material respects of all obligations required to be performed at or prior to closing.
Added
These conditions to the consummation of the mergers may not be satisfied or waived in a timely manner or at all, and, accordingly, the mergers may be delayed or may not be completed.
Added
In addition, if the first merger is not completed by November 2, 2026 (subject to automatic extension to the extent the only conditions not satisfied are those related to certain regulatory approvals or the absence of a legal restraint prohibiting the closing), either K-C or Kenvue may choose not to proceed with the mergers by terminating the Merger Agreement, and the parties can mutually decide to terminate the Merger Agreement at any time, before or after stockholder approval.
Added
In addition, K-C and Kenvue may elect to terminate the Merger Agreement in certain other circumstances, including, among other things, (i) failing to cure the breach of a representation, warranty or 13 KIMBERLY-CLARK CORPORATION - 2025 Annual Report covenant without which a closing condition would not be satisfied, or (ii) a final and non-appealable legal restraint enjoining or otherwise prohibiting the consummation of the mergers.
Added
Failure to complete the mergers, or a delay in the closing of the mergers, could negatively impact our business, results of operations, financial condition and stock price. The Merger Agreement is subject to a number of conditions that must be fulfilled to complete the mergers. Those conditions include, among others, certain regulatory approvals.
Added
A number of the conditions are not within our control and may prevent, delay or otherwise materially adversely affect the closing of the mergers.
Added
We cannot predict with certainty whether and when any of the required closing conditions will be satisfied or if another uncertainty may arise, and cannot assure you that we will be able to timely complete the mergers as currently contemplated under the Merger Agreement or at all.
Added
Our business, results of operations, financial condition or stock price could be adversely affected, potentially in a material way, by the failure to complete the mergers, or by a delay in the closing of the mergers, and we or Kenvue may suffer consequences that could adversely affect their business, results of operations, financial condition and stock price, including the following: • We may not realize any or all of the potential benefits of the mergers, including any synergies that could result from combining its financial and business resources with those of Kenvue; • Matters relating to the mergers will require substantial commitments of time and resources by our management, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to us as an independent company; • We have incurred and will incur further substantial expenses in connection with the mergers, including financial advisory, legal, accounting, consulting and other advisory fees, severance/retention employee benefit-related costs and other regulatory fees and other costs relating to the mergers regardless of whether the mergers are completed; • We may be subject to legal proceedings related to the potential delay of, or failure to complete, the mergers; • We may experience disruption to our business resulting from the pendency of the mergers, including adverse changes in relationships with, or loss of, customers, business partners and employees, which may not be reversible and may continue or even intensify in the event the mergers are delayed or not completed; • We may experience negative reactions to the mergers, including if the mergers are not completed, from the financial markets, including negative impacts on the market price of our common stock; and • Under the Merger Agreement, we are subject to certain restrictions on the conduct of our business prior to completing the mergers, which restrictions could adversely affect our ability to conduct our business as we otherwise would have done if not subject to these restrictions.
Added
In addition to the above risks, if the Merger Agreement is terminated under specified circumstances, either K-C or Kenvue may be required to pay the other a termination fee of $1.136 billion if (i) Kenvue or K-C, as applicable, terminates the Merger Agreement because the K-C board or Kenvue board of directors, as applicable, made an adverse recommendation change or (ii) the Merger Agreement is terminated after the outside date or because of a terminable breach including a K-C or Kenvue takeover proposal, as applicable (made or publicly announced prior to termination or entered into within twelve months of such termination).
Added
Litigation relating to the mergers could result in an injunction delaying or preventing the closing of the mergers and/or substantial costs or otherwise negatively affect our business and operations. Following the announcement of the mergers, certain complaints related to the mergers and the related joint proxy statement/prospectus were filed.
Added
Additional stockholder complaints, including stockholder class action complaints, and other complaints may be filed in the future against us, the K-C board, and others in connection with the mergers. The outcome of such litigation cannot be predicted, including the potential costs of defense or other liabilities that may arise.
Added
Future lawsuits that may be filed could delay or prevent the mergers, divert the attention of our management and employees from their day-to-day business or otherwise adversely affect our business, results of operations or financial condition and cause us not to realize, or delay in realizing, some or all of the benefits we expect to achieve upon completion of the mergers. 14 KIMBERLY-CLARK CORPORATION - 2025 Annual Report We will continue to incur substantial transaction-related costs in connection with the mergers.
Added
We have incurred significant financial advisory, legal, accounting, consulting and other advisory fees, severance/retention employee benefit-related costs and other regulatory fees and other costs relating to the mergers. We have incurred, and expect to continue to incur, additional costs in connection with the satisfaction of the various conditions to closing of the mergers.
Added
If there is any delay in the consummation of the mergers, these costs could increase significantly.
Added
If the mergers are completed, the combined company may not perform as we or the market expects and may fail to realize the projected benefits and cost savings of the mergers, which could adversely affect the value of the common stock held by our stockholders.
Added
The success of the combined company will depend, in part, on the ability of the combined company to realize the anticipated benefits and cost savings from combining K-C’s and Kenvue’s respective businesses, including operational and other synergies that we believe the combined company will be able to achieve.
Added
The anticipated benefits and cost savings of the mergers may not be realized fully or at all, may take longer to realize than expected or could have other adverse effects that we do not currently foresee.
Added
Risks that may be associated with the combined company include, among others, the risks related to market fluctuations, failure of integration, unforeseen liabilities, employee and customer retention and increased indebtedness. The market price of our common stock will continue to fluctuate after the mergers.
Added
The market price of our common stock may fluctuate significantly following the closing of the mergers and holders of our common stock could lose some or all of the value of their investment.
Added
In addition, the stock market has experienced significant price and volume fluctuations in recent times which, if they continue to occur, could have a material adverse effect on the market for, or liquidity of, our common stock, regardless of our actual operating performance.
Added
The market price of our common stock after the closing of the mergers may be affected by factors different from those that historically have affected or currently affect our common stock or Kenvue common stock.
Added
Our financial position after the closing of the mergers may differ from our financial position before the closing of the mergers, and our results of operations or cash flows after the closing of the mergers may be affected by factors different from those currently affecting our financial position or results of operations or cash flows, or those of Kenvue.
Added
Accordingly, the market price and performance of our common stock after the closing of the mergers likely will be different from the performance of our common stock or Kenvue common stock in the absence of the mergers.
Added
In addition, general fluctuations in stock markets could have a material adverse effect on the market for, or liquidity of, our common stock, regardless of our actual operating performance. The failure to integrate the businesses and operations of K-C and Kenvue successfully in the expected time frame may adversely affect the future results of the combined company.
Added
K-C and Kenvue have operated and, until the closing of the mergers, will continue to operate independently. Following the closing of the mergers, their respective businesses may not be integrated successfully.
Added
It is possible that the integration process could result in the loss of key K-C employees or key Kenvue employees, the loss of customers, service providers, vendors or other business counterparties, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with and following the closing of the mergers or higher-than-expected integration costs and an overall post-closing integration process that takes longer 15 KIMBERLY-CLARK CORPORATION - 2025 Annual Report than originally anticipated.
Added
Specifically, the following challenges, among others, must be addressed in integrating the operations of K-C and Kenvue in order to realize the anticipated benefits of the mergers: • Combining the companies’ operations and corporate functions and the resulting difficulties associated with managing a larger, more complex, diversified business and a larger portfolio of products; • Combining the businesses of K-C and Kenvue in a manner that permits the combined company to achieve the cost savings and operating synergies anticipated to result from the mergers; • Integrating and managing new product lines; • Avoiding delays in connection with the mergers or the integration process; • Integrating personnel from the two companies and minimizing the loss of key employees; • Identifying and eliminating redundant functions and assets; • Harmonizing the companies’ operating practices, employee development and compensation programs, internal controls, compliance and other policies, procedures and processes; • Maintaining existing agreements with customers, service providers, vendors and other business counterparties and avoiding delays in entering into new agreements with prospective customers, service providers, vendors and other business counterparties; • Addressing possible differences in business backgrounds, corporate cultures and management philosophies; and • Consolidating the companies’ operating, administrative and information technology infrastructure and financial systems.
Added
In addition, at times, the attention of certain members of either company’s or both companies’ management and other resources may be focused on the closing of the mergers and the integration of the two businesses and as such diverted from day-to-day business operations or other opportunities that may be beneficial to either company, which may disrupt either company’s ongoing operations and the operations of the combined company.
Added
The mergers may result in a loss of customers, distributors, service providers, suppliers, vendors, joint venture participants and other business counterparties and may result in the termination of existing contracts.
Added
Following the mergers, some of the customers, distributors, service providers, suppliers, vendors, joint venture participants and other business counterparties of K-C or Kenvue may terminate or scale back their current or prospective business relationships with the combined company.
Added
In addition, K-C and Kenvue have contracts with customers, distributors, service providers, suppliers, vendors, joint venture participants and other business counterparties that may require K-C or Kenvue to obtain consents from these other parties in connection with the mergers, which may not be obtained on favorable terms or at all.
Added
If relationships with customers, distributors, service providers, suppliers, vendors, joint venture participants or other business counterparties are adversely affected by the mergers, or if the combined company loses the benefits of the contracts of K-C or Kenvue, the business, financial condition, cash flows or results of operations of the combined company could be materially and adversely affected.
Added
The indebtedness of the combined company following consummation of the mergers will be substantially greater than K-C’s indebtedness on a standalone basis and greater than the combined indebtedness of K-C and Kenvue, in each case, existing prior to the announcement of the Merger Agreement. The indebtedness of the combined company could adversely affect its business flexibility.
Added
As of December 31, 2025, we had approximately $7.2 billion of outstanding indebtedness. We expect to incur acquisition-related debt financing to fund the Cash Consideration (as defined in Item 8, Note 4 to the Consolidated Financial Statements) in addition to any existing indebtedness of Kenvue we assume following consummation of the mergers.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur interim CISO also has several information technology-related certifications, including the Certified Information Systems Security Professional ("CISSP") certification. Our interim CISO reports to our CDTO, who in turn regularly reports to our Chairman of the Board and Chief Executive Officer.
Biggest changeOur CISO has over 20 years of experience in various roles, including technology strategy, cybersecurity and executive leadership at large global companies, most recently serving as CISO at Kellanova (formerly Kellogg Company). Our CISO also has several information technology-related certifications, including the Certified Information Systems Security Professional ("CISSP") certification.
Additional information on cybersecurity risks we face is discussed in Item 1A, "Risk Factors,” which should be read in conjunction with the information in this section. Internal Cybersecurity Team Our interim Chief Information Security Officer (“CISO”) oversees a team with extensive cybersecurity knowledge and experience.
The GROC receives regular briefings concerning cybersecurity risks and risk management processes. Additional information on cybersecurity risks we face is discussed in Item 1A, "Risk Factors,” which should be read in conjunction with the information in this section. Internal Cybersecurity Team Our Chief Information Security Officer (“CISO”) oversees a team with extensive cybersecurity knowledge and experience.
We have protocols by which certain cybersecurity incidents are reported promptly to the Chairman of the Board and Chief Executive Officer, or the Audit Committee, as appropriate.
Our CISO reports to our CDTO, who in turn regularly reports to our Chairman of the Board and Chief Executive Officer. We have protocols by which certain cybersecurity incidents are reported promptly to the Chairman of the Board and Chief Executive Officer, or the Audit Committee, as appropriate.
Our CDTO has served in various information technology roles for over 27 years, including as Chief Digital and Technology Officer of Kimberly-Clark and as Executive Vice President and Chief Digital Officer of Toyota Motors North America, Inc. Our interim CISO has served in various information technology roles for over 20 years.
At the management level, our cybersecurity program is led by our CDTO and our CISO. Our CDTO has served in various information technology roles for over 28 years, including as Chief Digital and Technology Officer of Kimberly-Clark and as Executive Vice President and Chief Digital Officer of Toyota Motors North America, Inc.
Internal reporting and escalation protocols are in place to ensure the involvement of the CISO, other senior leaders, and the Audit Committee, as appropriate.
Internal reporting and escalation protocols are in place to ensure the involvement of the CISO, other senior leaders, and the Audit Committee, as appropriate. Under the plan, we regularly conduct tabletop exercises to test our preparedness and our incident response process, and we provide ongoing training.
The Audit Committee receives quarterly reports from our CDTO and our CISO covering cybersecurity risks, strategic programs for managing cybersecurity risk, emerging trends and operational and policy compliance metrics. At the management level, our cybersecurity program is led by our CDTO and our CISO.
Governance Our Board of Directors has delegated to the Audit Committee oversight responsibility of our risk management program, including cybersecurity, business continuity, IT operational resilience, and data privacy. The Audit Committee receives quarterly reports from our CDTO and our CISO covering cybersecurity risks, strategic programs for managing cybersecurity risk, emerging trends and operational and policy compliance metrics.
The program is continually adapting to the evolving threat landscape and technology developments. 12 KIMBERLY-CLARK CORPORATION - 2024 Annual Report Cybersecurity risk management is included within our overall enterprise risk management program which is overseen by our Global Risk Oversight Committee (“GROC”).
The program is continually adapting to the evolving threat landscape and technology developments. Cybersecurity risk management is included within our overall enterprise risk management program which is overseen by our Global Risk Oversight Committee (“GROC”). The GROC is composed of executive officers and other senior leaders and coordinates with other risk assurance functions, including internal audit and compliance.
Security Policy and Requirements As part of our overall risk management program, we have adopted our Information Security Policy which details the overall risk-based framework and governance for the management and security of our information technology assets and information.
Our CISO reports to our Chief Digital and Technology Officer (“CDTO”), who provides management of cybersecurity risks, reviews operational metrics and performs other relevant activities related to the cybersecurity function. 18 KIMBERLY-CLARK CORPORATION - 2025 Annual Report Security Policy and Requirements As part of our overall risk management program, we have adopted our Information Security Policy which details the overall risk-based framework and governance for the management and security of our information technology assets and information.
Removed
The GROC is composed of executive officers and other senior leaders and coordinates with other risk assurance functions, including internal audit and compliance. The GROC receives regular briefings concerning cybersecurity risks and risk management processes.
Removed
Our interim CISO reports to our Chief Digital and Technology Officer (“CDTO”), an executive officer, who provides management of cybersecurity risks, reviews operational metrics and performs other relevant activities related to the cybersecurity function.
Removed
Under the plan, we regularly conduct tabletop exercises to test our preparedness and our incident response process, and we provide ongoing training. 13 KIMBERLY-CLARK CORPORATION - 2024 Annual Report Governance Our Board of Directors has delegated to the Audit Committee oversight responsibility of our risk management program, including cybersecurity, business continuity, IT operational resilience, and data privacy.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of December 31, 2024, we own or lease the following principal offices: • Our global headquarters and principal executive office located in the Dallas, Texas metropolitan area; • Five geographic headquarters at three U.S. and two international locations; and • Four global business service centers at one U.S. and three international locations.
Biggest changePROPERTIES As of December 31, 2025, we own or lease the following principal offices, including offices of the IFP Business reported as discontinued operations: • Our global headquarters and principal executive office located in the Dallas, Texas metropolitan area; • Five geographic headquarters at three U.S. and two international locations; and • Five global business service centers at one U.S. and four international locations. 19 KIMBERLY-CLARK CORPORATION - 2025 Annual Report The locations of our and our equity affiliates' principal production facilities by major geographic areas of the world, including facilities of the IFP Business reported as discontinued operations, are as follows: Geographic Area : Number of Facilities North America (in 14 states in the U.S.) 27 Outside North America (a) 47 Total (in 30 countries) 74 (a) IPC products are produced in 30 facilities.
LEGAL PROCEEDINGS See Item 8, Note 11 to the consolidated financial statements, which is incorporated in this Item 3 by reference, for information on legal proceedings.
LEGAL PROCEEDINGS See Item 8, Note 12 to the Consolidated Financial Statements, which is incorporated in this Item 3 by reference, for information on legal proceedings.
Many of these facilities produce multiple products, some across multiple business segments. We believe t hat our and our equity affiliates' facilities are suitable for their purpose, adequate to support their businesses and well maintained. ITEM 3.
Products related to the IFP Business reported as discontinued operations are produced in 24 facilities. Many of these facilities produce multiple products, some across multiple business segments. We believe t hat our and our equity affiliates' facilities are suitable for their purpose, adequate to support their businesses and well maintained. ITEM 3.
Removed
The locations of our and our equity affiliates' principal production facilities by major geographic areas of the world are as follows: Geographic Area : Number of Facilities North America (in 14 states in the U.S.) 28 Outside North America (a) 51 Total (in 30 countries) 79 (a) IPC products are produced in 31 facilities and IFP products are produced in 27 facilities.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeGrant B. McGee , 44, was elected Senior Vice President, General Counsel and Corporate Secretary in May 2024. He served as Senior Vice President and General Counsel from February 2024 to May 2024. Mr. McGee rejoined Kimberly-Clark from American Airlines, where he served as Vice President, Deputy General Counsel and Corporate Secretary from 2022 to February 2024.
Biggest changeMcGee rejoined Kimberly-Clark from American Airlines, where he served as Vice President, Deputy General Counsel and Corporate Secretary from 2022 to February 2024. From 2015 to 2022, Mr. McGee served in multiple roles of increasing responsibility at Kimberly-Clark, most recently as Vice President and Senior Deputy General Counsel.
Chen held multiple positions of increasing responsibility within our Asia Pacific operations since she joined Kimberly-Clark in 2009. Patricia Corsi , 52, was elected Chief Growth Officer in July 2024. Ms. Corsi joined Kimberly-Clark from Bayer AG, where she served as Chief Marketing, Digital and Information Officer since 2022, and as Chief Marketing and Digital Officer from 2019 to 2022.
Chen held multiple positions of increasing responsibility within our Asia Pacific operations since she joined Kimberly-Clark in 2009. Patricia Corsi , 53, was elected Chief Growth Officer in 2024. Ms. Corsi joined Kimberly-Clark from Bayer AG, where she served as Chief Marketing, Digital and Information Officer since 2022, and as Chief Marketing and Digital Officer from 2019 to 2022.
Prior to joining Bayer, Ms. Corsi served as Senior Vice President and Chief Marketing Officer, Mexico for Heineken N.V. from 2016 to 2018. Prior to joining Heineken, Ms. Corsi served in multiple roles of increasing responsibility at Unilever PLC, beginning in 2006. She also is the founder of Good Latinas for Good, a nonprofit organization.
Prior to joining Bayer, Ms. Corsi served as Senior Vice President and Chief Marketing Officer, Mexico for Heineken N.V. from 2016 to 2018. Prior to joining Heineken, Ms. Corsi served in multiple roles of increasing responsibility at Unilever PLC, beginning in 2006.
Prior to joining Mars, he spent ten years with The Procter & Gamble Company in packaging, product development and marketing roles. He also serves on the board of trustees of the American University in Cairo and on the board of directors of the Singapore American School. Katy Chen , 44, was elected President, International Personal Care in October 2024.
Prior to joining Mars, he spent ten years with The Procter & Gamble Company in packaging, product development and marketing roles. He also serves on the board of trustees of the American University in Cairo and on the board of directors of the Singapore American School.
Prior to that, he served as President and Chief Operating Officer since 2017, where he was responsible for the day-to-day operations of our business units, along with our global innovation, marketing and supply chain functions.
Michael D. Hsu , 61, has served as Chairman of the Board since January 2020 and as Chief Executive Officer since January 2019. Prior to that, he served as President and Chief Operating Officer since 2017, where he was responsible for the day-to-day operations of our business units, along with our global innovation, marketing and supply chain functions.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 14 KIMBERLY-CLARK CORPORATION - 2024 Annual Report INFORMATION ABOUT OUR EXECUTIVE OFFICERS The names and ages of our executive officers as of February 13, 2025, together with certain biographical information, are as follows: Ehab Abou-Oaf , 58, was elected President, International Family Care and Professional in October 2024.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS The names and ages of our executive officers as of February 12, 2026, together with certain biographical information, are as follows: Ehab Abou-Oaf , 59, was elected President, International Family Care and Professional in 2024.
Slavtcheff joined Kimberly-Clark from Campbell Soup Company where he served in multiple roles of increasing responsibility, most recently as Executive Vice President, Chief R&D and Innovation Officer from 2019 to 2024. Russell Torres , 53, was elected President, North America in October 2024. He is responsible for our personal care, family care and professional businesses in North America.
Slavtcheff joined Kimberly-Clark from Campbell Soup Company where he served in multiple roles of increasing responsibility, most recently as Executive Vice President, Chief R&D and Innovation Officer from 2019 to 2024. Russell Torres , 54, was elected President and Chief Operating Officer in May 2025.
Torres served as a senior executive at Mondelēz International in its North America Business Unit from 2011 to 2013. Nelson Urdaneta , 52, was elected Senior Vice President and Chief Financial Officer in 2022. Prior to joining Kimberly-Clark, he served as Senior Vice President, Treasurer at Mondelēz International since September 2021. Mr.
Torres served as a senior executive at Mondelēz International in its North America business unit from 2011 to 2013. Prior to Mondelēz, Mr. Torres had a previous term at Bain & Company, where he was a partner from 2003 to 2011. Nelson Urdaneta , 53, was elected Senior Vice President and Chief Financial Officer in 2022.
She served as Senior Vice President and Chief Human Resources Officer from 2020 to July 2024. She is responsible for the design and implementation of all human capital strategies for Kimberly-Clark, including global compensation and benefits, talent management, inclusion, equity and diversity, organizational effectiveness and labor/employee relations. Ms.
She is responsible for the design and implementation of all human capital strategies for Kimberly-Clark, including global compensation and benefits, talent management, inclusion and belonging, organizational effectiveness and labor/employee relations. Ms. Panayiotou joined Kimberly-Clark from Ball Corporation, an aluminum manufacturing company, where she served as Senior Vice President and Chief Human Resources Officer since November 2021.
Tamera Fenske , 46, was elected Senior Vice President and Chief Supply Chain Officer in 2022. She is responsible for the global, end-to-end supply chain, which includes procurement, manufacturing, distribution, logistics, transportation, quality, safety and sustainability. Ms.
She also is the founder of Good Latinas for Good, a nonprofit organization. 20 KIMBERLY-CLARK CORPORATION - 2025 Annual Report Tamera Fenske , 47, was elected Senior Vice President and Chief Supply Chain Officer in 2022. She is responsible for the global, end-to-end supply chain, which includes procurement, manufacturing, distribution, logistics, transportation, quality, safety and sustainability. Ms.
Urdaneta joined Mondelēz in 2005 and served in multiple roles of increasing responsibility, including Senior Vice President, Corporate Controller and Chief Accounting Officer and Vice President Finance, Asia Pacific. Prior to joining Mondelēz, he was the Director, Financial Planning and Analysis at Ryder System, Inc. 16 KIMBERLY-CLARK CORPORATION - 2024 Annual Report PART II
Prior to joining Kimberly-Clark, he served as Senior Vice President, Treasurer at Mondelēz International since September 2021. Mr. Urdaneta joined Mondelēz in 2005 and served in multiple roles of increasing responsibility, including Senior Vice President, Corporate Controller and Chief Accounting Officer and Vice President Finance, Asia Pacific.
From January 2024 to October 2024, he served as Chief Business and Transformation Officer, from November 2020 to January 2024, he served as Chief Business Development and Legal Officer, from April 2020 to November 2020, he served as Senior Vice President, Business Development and General Counsel and from September 2017 to April 2020, he served as Senior Vice President - General Counsel.
From October 2024 to May 2025, he served as Chief Business, Strategy and Transformation Officer, from January 2024 to October 2024, he served as Chief Business and Transformation Officer and from November 2020 to January 2024, he served as Chief Business Development and Legal Officer. He also served as Chief Transformation Officer from November 2020 to October 2021.
Hsu served as President and Chief Operating Officer, Foodservice at H. J. Heinz Company. He also serves on the board of directors of McDonald's Corporation. 15 KIMBERLY-CLARK CORPORATION - 2024 Annual Report Sandra R.A. Karrmann , 59, was elected Senior Vice President and Chief People Officer in July 2024.
Hsu served as President and Chief Operating Officer, Foodservice at H. J. Heinz Company. He also serves on the board of directors of McDonald's Corporation. Grant B. McGee , 45, was elected Senior Vice President and General Counsel in February 2024. He also served as Corporate Secretary from May 2024 to May 2025. Mr.
From 2015 to 2022, Mr. McGee served in multiple roles of increasing responsibility at Kimberly-Clark, most recently as Vice President and Senior Deputy General Counsel. Jeffrey Melucci , 54, was elected Chief Business, Strategy and Transformation Officer in October 2024.
From 2013 to November 2020, Mr. Melucci served in multiple roles of increasing responsibility, most recently as Senior Vice President, Business Development and General Counsel. Mr. Melucci joined Kimberly-Clark from General Electric, where he served in multiple roles of increasing responsibility. Stacey Valy Panayiotou , 53, was elected Senior Vice President and Chief Human Resources Officer in September 2025.
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Zackery Hicks , 61, was elected Chief Digital and Technology Officer in 2022. He is responsible for all aspects of our information technology and digital functions, including building brands and creating differentiated capability. Mr.
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John Carmichael , 58, was elected President, North America in September 2025 and is responsible for our personal care, family care and professional businesses in North America. Mr.
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Hicks joined Kimberly-Clark from Toyota Motor North America, Inc., a subsidiary of Toyota Motor Corporation, a multinational automotive manufacturer, where he served as Executive Vice President and Chief Digital Officer since April 2018, and held roles of increasing responsibility with Toyota since 1996, including CEO and President of Toyota Connected North America.
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Carmichael joined Kimberly-Clark from Nestlé S.A., a Swiss multinational food and beverage company, where he served in multiple roles of increasing responsibility since 1995, most recently as President and CEO, Nestlé Canada from 2021 to 2025, and as President Foods, Nestlé USA from 2018 to 2021. Katy Chen , 45, was elected President, International Personal Care in October 2024.
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He also serves on the board of directors of Signet Jewelers Ltd. Michael D. Hsu , 60, has served as Chairman of the Board since January 2020 and as Chief Executive Officer since January 2019.
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Jeffrey Melucci , 55, was elected Chief Strategy, Business Development and Administrative Officer in May 2025. He is responsible for strategy, business development and other core corporate affairs and functions of Kimberly-Clark.
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Karrmann joined Kimberly-Clark from Tenet Healthcare Corporation, a diversified healthcare services company, where she served as Executive Vice President and Chief Human Resources Officer since 2019 and Senior Vice President and Chief Human Resources Officer since 2017. Prior to joining Tenet, she served as Senior Vice President and Chief Human Resources Officer for United Surgical Partners International since 2013.
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Prior to joining Ball Corporation, she served as Executive Vice President of Human Resources at Graphic Packaging International from 2019 to 2021. Prior to that, she served in multiple roles of increasing responsibility at The Coca-Cola Company, most recently as Senior Vice President, Global Talent and Development. Craig Slavtcheff , 58, was elected Chief Research and Development Officer in 2024.
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From January 2017 to September 2017, he served as Vice President, Senior Deputy General Counsel and General Counsel of Kimberly-Clark’s Global Operations. From 2013 to 2017, he served as Vice President and Deputy General Counsel.
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He is responsible for the day-to-day operations of our business segments, along with our global growth, innovation, digital and technology, and 21 KIMBERLY-CLARK CORPORATION - 2025 Annual Report supply chain functions. He served as the Corporation’s President, North America since October 2024 and was responsible for our personal care, family care and professional businesses in North America.
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He also served as Chief Transformation Officer from November 2020 to October 2021, Corporate Secretary from 2014 to 2017 and General Counsel of Kimberly-Clark International from 2013 to 2016. Mr. Melucci joined Kimberly-Clark from General Electric, where he served in multiple roles of increasing responsibility. Craig Slavtcheff , 57, was elected Chief Research and Development Officer in July 2024.
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Prior to joining Mondelēz, he was the Director, Financial Planning and Analysis at Ryder System, Inc. 22 KIMBERLY-CLARK CORPORATION - 2025 Annual Report PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased (a) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (a) October 1 to October 31 289,214 $ 137.55 6,593,891 33,406,109 November 1 to November 30 873,078 135.36 7,466,969 32,533,031 December 1 to December 31 662,764 133.74 8,129,733 31,870,267 Total 1,825,056 (a) Share repurchases were made pursuant to a share repurchase program authorized by our Board of Directors on January 22, 2021 (the "2021 Program").
Biggest changePeriod Total Number of Shares Purchased (a) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (a) October 1 to October 31 — $ — 9,184,602 30,815,398 November 1 to November 30 — — 9,184,602 30,815,398 December 1 to December 31 — — 9,184,602 30,815,398 Total — (a) Share repurchases were made pursuant to a share repurchase program authorized by our Board of Directors on January 22, 2021 (the "2021 Program").
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Kimberly-Clark common stock is listed on the New York Stock Exchange. The ticker symbol is KMB. Quarterly dividends have been paid continually since 1935. Dividends have been paid on or about the second business day of January, April, July and October.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Kimberly-Clark common stock is listed on The Nasdaq Stock Market LLC under the ticker symbol "KMB". Quarterly dividends have been paid continually since 1935. Dividends have been paid on or about the second business day of January, April, July and October.
As of January 31, 2025, we had 15,029 holders of record of our common stock. For information relating to securities authorized for issuance under equity compensation plans, see Part III, Item 12 of this Form 10-K. We repurchase shares of Kimberly-Clark common stock from time to time pursuant to publicly announced share repurchase programs.
As of January 30, 2026, we had 14,350 holders of record of our common stock. For information relating to securities authorized for issuance under equity compensation plans, see Part III, Item 12 of this Form 10-K. We repurchase shares of Kimberly-Clark common stock from time to time pursuant to publicly announced share repurchase programs.
During 2024, we repurchased 7.2 million shares of our common stock at a cost of $1.0 billion through a broker in the open market. The following table contains information for shares repurchased during the fourth quarter of 2024. None of the shares in this table were repurchased directly from any of our officers or directors.
During 2025, we repurchased 1.1 million shares of our common stock at a cost of $141 through a broker in the open market. The following table contains information for shares repurchased during the fourth quarter of 2025. None of the shares in this table were repurchased directly from any of our officers or directors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following tables provide a reconciliation of Organic Sales Growth: Year Ended December 31, 2024 Percent change vs. the prior year period NA IPC IFP Consolidated Net Sales Growth 0.2 (3.1) (5.9) (1.8) Currency Translation 0.1 12.2 1.2 3.8 Divestitures and Business Exits 0.8 0.1 4.5 1.2 Organic Sales Growth 1.1 9.2 (0.2) 3.2 Year Ended December 31, 2023 Percent change vs. the prior year period NA IPC IFP Consolidated Net Sales Growth 4.9 (2.6) (2.9) 1.3 Currency Translation 0.3 7.9 1.8 2.8 Divestitures and Business Exits (0.2) — 3.9 0.6 Organic Sales Growth 5.0 5.3 2.8 4.7 The following table provides a reconciliation of Adjusted Gross Profit: Year Ended December 31 2024 2023 Gross Profit $ 7,180 $ 7,032 2024 Transformation Initiative 144 — Sale of Brazil Tissue and Professional Business — 15 Adjusted Gross Profit $ 7,324 $ 7,047 32 KIMBERLY-CLARK CORPORATION - 2024 Annual Report The following table provides a reconciliation of Adjusted Operating Profit: Year Ended December 31 2024 2023 Operating Profit $ 3,210 $ 2,344 2024 Transformation Initiative 456 — Sale of PPE Business (565) — Impairment of Intangible Assets 97 658 Legal Expense 39 — Sale of Brazil Tissue and Professional Business — (44) Adjusted Operating Profit $ 3,237 $ 2,958 The following table provides a reconciliation of Adjusted Earnings per Share: Year Ended December 31 2024 2023 Diluted Earnings per Share $ 7.55 $ 5.21 2024 Transformation Initiative 1.01 — Sale of PPE Business (1.34) — Impairment of Intangible Assets 0.17 1.36 Legal Expense 0.11 — Softex Tax Reserve Release (0.20) — Sale of Brazil Tissue and Professional Business — (0.08) Pension Settlements — 0.08 Adjusted Earnings per Share (a) $ 7.30 $ 6.57 (a) The non-GAAP adjustments included above are presented net of tax.
Biggest changeThe following table provides a reconciliation of Adjusted Gross Profit from continuing operations: Year Ended December 31 2025 2024 Gross Profit $ 5,923 $ 6,289 2024 Transformation Initiative 213 144 Adjusted Gross Profit $ 6,136 $ 6,433 The following table provides a reconciliation of Adjusted Operating Profit from continuing operations: Year Ended December 31 2025 2024 Operating Profit $ 2,351 $ 2,700 2024 Transformation Initiative 348 456 Kenvue Acquisition 32 — Sale of PPE Business — (565) Impairment of Intangible Assets — 97 Legal Expense — 39 Adjusted Operating Profit $ 2,731 $ 2,727 38 KIMBERLY-CLARK CORPORATION - 2025 Annual Report The following table provides a reconciliation of Adjusted Earnings per Share from continuing operations: Year Ended December 31 2025 2024 Diluted Earnings per Share $ 4.86 $ 6.41 2024 Transformation Initiative 0.86 1.01 Kenvue Acquisition 0.07 — OBBBA 0.29 — IFP Repatriated Earnings 0.04 — Sale of PPE Business — (1.34) Impairment of Intangible Assets — 0.17 Legal Expense — 0.11 Softex Tax Reserve Release — (0.20) Adjusted Earnings per Share (a) $ 6.12 $ 6.16 (a) The non-GAAP adjustments included above are presented net of tax.
(b) Represents the change in net sales excluding the impacts of currency translation and divestitures and business exits. Organic Sales Growth is a non-GAAP financial measure. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to non-GAAP measures.
(b) Represents the change in net sales excluding the impacts of currency translation and divestitures and business exits. Organic Sales Growth is a non-GAAP financial measure. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to non-GAAP measures.
Our third pillar is centered on making our enterprise stronger and faster while sharpening our portfolio focus and footprint on categories and markets with the greatest long-term potential. Our strong legacy of financial discipline supports our Powering Care growth strategy through consistent investment in our technologies and brands, sustained supply chain productivity and enhanced working capital efficiency.
Our third pillar is centered on making our enterprise stronger and faster while sharpening our portfolio focus and footprint on categories and markets with the greatest long-term potential. Our strong legacy of financial discipline supports our Powering Care strategy through consistent investment in our technologies and brands, sustained supply chain productivity and enhanced working capital efficiency.
Our capital allocation approach prioritizes capital investments to drive growth in our business, a strong and growing dividend, value accretive acquisitions that can enhance our portfolio, and allocation of excess cash flow to share repurchases. We are subject to risks and uncertainties, which can affect our business operations and financial results.
Our capital allocation approach prioritizes capital investments to drive durable growth in our business, a strong and growing dividend, value accretive acquisitions that can enhance our portfolio, and allocation of excess cash flow to share repurchases. We are subject to risks and uncertainties, which can affect our business operations and financial results.
Certain other subsidiaries have defined benefit pension plans or, in certain countries, termination pay plans covering substantially all regular employees. Our related accounting policies and account balances are discussed in Item 8, Note 8 to the consolidated financial statements.
Certain other subsidiaries have defined benefit pension plans or, in certain countries, termination pay plans covering substantially all regular employees. Our related accounting policies and account balances are discussed in Item 8, Note 9 to the Consolidated Financial Statements.
GAAP, excluding the impacts of currency translation and divestitures and business exits. • Adjusted Gross and Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate are defined as consolidated Gross Profit, Operating Profit, Diluted Earnings per Share, and Effective Tax Rate, respectively, as determined in accordance with U.S.
GAAP, excluding the impacts of currency translation and divestitures and business exits. • Adjusted Gross and Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate are defined as Gross Profit, Operating Profit, Diluted Earnings per Share, and Effective Tax Rate, respectively, as determined in accordance with U.S.
The following payments are not included in the table: • We will fund our defined benefit pension plans to meet or exceed statutory requirements and currently expect to contribute approximately $15 to these plans in 2025. • Other postretirement benefit payments are estimated using actuarial assumptions, including expected future service, to project the future obligations.
The following payments are not included in the table: • We will fund our defined benefit pension plans to meet or exceed statutory requirements and currently expect to contribute approximately $15 to these plans in 2026. • Other postretirement benefit payments are estimated using actuarial assumptions, including expected future service, to project the future obligations.
Pension expense beyond 2025 will depend on future investment p erformance, our contributions to the pension trusts, changes in discount rates and various other factors related to the covered participants in the plans. Substantially all U.S. retirees and employees have access to our unfunded health care and life insurance benefit plans.
Pension expense beyond 2026 will depend on future investment p erformance, our contributions to the pension trusts, changes in discount rates and various other factors related to the covered participants in the plans. Substantially all U.S. retirees and employees have access to our unfunded health care and life insurance benefit plans.
The discount (or settlement) rate used to determine the present value of our future U.S. pension obligation as of December 31, 2024 was based on a portfolio of high quality corporate debt securities with cash flows that largely match the expected benefit payments of the plan.
The discount (or settlement) rate used to determine the present value of our future U.S. pension obligation as of December 31, 2025 was based on a portfolio of high quality corporate debt securities with cash flows that largely match the expected benefit payments of the plan.
Our products are sold under well-known brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend.
Our products are sold under well-known, trusted brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend.
If the discount rate assumptions for these plans were reduced by 0.25%, the impact to 2025 other postretirement benefit expense and the increase in the December 31, 2024 benefit liability would not be material. • Health care cost trend rate .
If the discount rate assumptions for these plans were reduced by 0.25%, the impact to 2026 other postretirement benefit expense and the increase in the December 31, 2025 benefit liability would not be material. • Health care cost trend rate .
If the discount rate assumptions for these same plans were reduced by 0.25%, the increase in annual pension expense would not be material in 2025, and the December 31, 2024 pension liability would increase by about $50. • Other assumptions .
If the discount rate assumptions for these same plans were reduced by 0.25%, the increase in annual pension expense would not be material in 2026, and the December 31, 2025 pension liability would increase by about $50. • Other assumptions .
If the expected long-term rate of return on assets for the Principal Plans were lowered by 0.25%, the impact on annual pension expense would not be material in 2025 . • Discount rate .
If the expected long-term rate of return on assets for the Principal Plans were lowered by 0.25%, the impact on annual pension expense would not be material in 2026 . • Discount rate .
Our income tax related accounting policies, account balances and matters affecting income taxes are discussed in Item 8, Note 13 to the consolidated financial statements. • Deferred tax assets and related valuation allowances .
Our income tax related accounting policies, account balances and matters affecting income taxes are discussed in Item 8, Note 14 to the Consolidated Financial Statements. • Deferred tax assets and related valuation allowances .
Results in 2024 included a $565 million gain from the sale of our PPE business, offset by charges of $456 million related to the 2024 Transformation Initiative and $136 million from the impairment of intangible assets and litigation and regulatory matters associated with a previously exited business.
Results in the prior year included a $565 gain from the sale of our PPE business, offset by charges of $456 related to the 2024 Transformation Initiative and $136 from the impairment of intangible assets and litigation and regulatory matters associated with a previously exited business.
The assumptions used as a basis for the forward-looking statements include many estimates that, among other things, depend on the achievement of future cost savings and projected volume increases.
The assumptions used as a basis for the forward-looking statements include many estimates that, among other things, depend on the successful completion of the mergers and the achievement of future cost savings and projected volume increases.
The impact of these non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income Before Income Taxes and Equity Interests and Provision for income taxes.
The impact of these non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income from Continuing Operations Before Income Taxes and Equity Interests and Provision for income taxes.
See Item 8, Note 6 to the consolidated financial statements for details. Our short-term debt, which consists of U.S. commercial paper with original maturities up to 90 days and/or other similar short-term debt issued by non-U.S. subsidiaries, was $3 as of December 31, 2024 (included in debt payable within one year on the consolidated balance sheets).
See Item 8, Note 7 to the Consolidated Financial Statements for details. Our short-term debt, which consists of U.S. commercial paper with original maturities up to 90 days and/or other similar short-term debt issued by non-U.S. subsidiaries, was $282 as of December 31, 2025 (included in debt payable within one year on the Consolidated Balance Sheets).
The factors described under Item 1A, "Risk Factors" in this Annual Report on Form 10-K, or in our other SEC filings, among others, could cause our future results to differ from those expressed in any forward-looking statements made by us or on our behalf.
The factors described under Item 1A, "Risk Factors" in this Annual Report on Form 10-K, or in our other SEC filings, among others, could cause our future results to differ from those expressed in any forward-looking statements made 36 KIMBERLY-CLARK CORPORATION - 2025 Annual Report by us or on our behalf.
Cash costs are expected to be approximately half of that amount, primarily related to workforce reductions. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets.
Cash costs are expected to be approximately 60% of that amount, primarily related to workforce reductions and other program costs. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets.
There are a number of other assumptions involved in the calculation of pension expense and benefit obligations, primarily related to participant demographics and benefit elections. Pension expense for defined benefit pension plans is estimated to approximate $50 in 2025.
There are a number of other assumptions involved in the calculation of pension expense and benefit obligations, primarily related to participant demographics and benefit elections. Pension expense for defined benefit pension plans is estimated to approximate $45 in 2026.
We believe that our ability to generate cash from operations and our capacity to issue short-term and long-term debt are adequate to fund working capital, capital spending, pension contributions, share repurchases, dividends and other needs for the foreseeable future.
We believe that our ability to generate cash from operations and our capacity to issue short-term and long-term debt are adequate to fund working capital, obligations related to our 2024 Transformation Initiative, capital spending, pension contributions, share repurchases, dividends and other needs for the foreseeable future.
During 2024, we repurchased 7.2 million shares of our common stock at a cost of $1.0 billion through a broker in the open market, and paid $1.6 billion in dividends. We issue long-term debt in the public market periodically. Proceeds from the offerings are used for general corporate purposes, including repayment of maturing debt or outstanding commercial paper indebtedness.
During the current year, we repurchased 1.1 million shares of our common stock at a cost of $141 through a broker in the open market, and paid $1.7 billion in dividends. We issue long-term debt in the public market periodically. Proceeds from the offerings are used for general corporate purposes, including repayment of maturing debt or outstanding commercial paper indebtedness.
GAAP, see "Summary of Non-GAAP Financial Measures" below. Overview of Business and Recent Developments We are a global company focused on delivering products and solutions that provide better care for a better world, with manufacturing facilities in 30 countries, including our equity affiliates, and products sold in more than 175 countries and territories.
GAAP, see "Summary of Non-GAAP Financial Measures" below. Overview of Business and Recent Developments We are a global company focused on delivering essential products and solutions that solve unmet consumer needs and provide Better Care for a Better World. We have manufacturing facilities in 30 countries, including our equity affiliates, and products sold in more than 175 countries and territories.
Volatility in global consumer demand, commodity costs and foreign currency exchange rates increased significantly over the past few years and is expected to continue in the near term. Climate Change - We operate in many regions around the world where our businesses could be disrupted by climate change.
Volatility in global consumer demand, commodity costs and foreign currency exchange rates increased significantly over the past few years and is expected to continue in the near term. 27 KIMBERLY-CLARK CORPORATION - 2025 Annual Report Climate Change - We operate in many regions around the world where our businesses could be disrupted by climate change.
Changes in certain assumptions could affect pension expense and the benefit obligations, particularly the estimated long-term rate of return on plan assets and the discount rate used to calculate the obligations: 27 KIMBERLY-CLARK CORPORATION - 2024 Annual Report • Long-term rate of return on plan assets . The expected long-term rate of return is evaluated on an annual basis.
Changes in certain assumptions could affect pension expense and the benefit obligations, particularly the estimated long-term rate of return on plan assets and the discount rate used to calculate the obligations: • Long-term rate of return on plan assets . The expected long-term rate of return is evaluated on an annual basis.
Changing consumer preferences also include increased concerns in regard to post-consumer waste and packaging materials and their impact on environmental sustainability. If we experience 20 KIMBERLY-CLARK CORPORATION - 2024 Annual Report lower sales due to changes in consumer demand for our products, our earnings could decrease.
Changing consumer preferences also include increased concerns in regard to post-consumer waste and packaging materials and their impact on environmental sustainability. If we experience lower sales due to changes in consumer demand for our products, our earnings could decrease.
In determining the valuation allowances to establish against these deferred tax assets, 28 KIMBERLY-CLARK CORPORATION - 2024 Annual Report many factors are considered, including the specific taxing jurisdiction, the carryforward period, income tax strategies and forecasted earnings for the entities in each jurisdiction.
In determining the valuation allowances to establish against these deferred tax assets, many factors are considered, including the specific taxing jurisdiction, the carryforward period, income tax strategies and forecasted earnings for the entities in each jurisdiction.
The average month-end balance of short-term debt for the year ended December 31, 2024 was $5. These short-term borrowings provide supplemental funding to support our operations. The level of short-term debt generally fluctuates depending upon the amount of operating cash flows and the timing of customer receipts and payments for items such as pension contributions, dividends and income taxes.
The average month-end balance of short-term debt in the current year was $323. These short-term borrowings provide supplemental funding to support our operations, with the level of short-term debt generally fluctuating depending upon the amount of operating cash flows and the timing of customer receipts and payments for items such as pension contributions, dividends and income taxes.
Many countries have formally implemented Pillar 2, and several other countries have draft legislation to implement this framework. The insignificant impact of Pillar 2 has been included in our consolidated financial statements. We will continue to monitor and evaluate new legislation and guidance, which could change our current assessment.
Many countries have formally implemented Pillar 2, and several other countries have draft legislation to implement this framework. The implementation of Pillar 2 has not had a material impact on our Consolidated Financial Statements. We will continue to monitor and evaluate new legislation and guidance, which could change our current assessment.
(e) Includes impact of changes in product mix and marketing, research and general expenses.
(e) Includes impact of changes in product mix, marketing, research and general expenses and other (income) and expense, net.
(c) Impact of the sale of the Brazil tissue and professional business, sale of the PPE business and other exited businesses and markets in conjunction with the 2024 Transformation Initiative. (d) Includes net impact of productivity initiatives, product and supply chain investments and other changes in cost of products sold.
(c) Impact of the sale of the PPE business, the exit of the Company's private label diaper business in the United States, and other exited businesses and markets in conjunction with the 2024 Transformation Initiative. (d) Includes net impact of productivity initiatives, product and supply chain investments and other changes in cost of products sold.
Forward Looking Statements Certain matters contained in this report concerning the business outlook, including raw material, energy and other input costs, the anticipated charges and savings from the 2024 Transformation Initiative, cash flow and uses of cash, growth initiatives, innovations, marketing and other spending, net sales, anticipated currency rates and exchange risks, including the impact in Argentina and Türkiye, effective tax rate, contingencies and anticipated transactions of Kimberly-Clark, including dividends, share repurchases and pension contributions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based upon management's expectations and beliefs concerning future events impacting Kimberly-Clark.
Forward Looking Statements Certain matters contained in this report concerning our plans and expectations regarding the pending Kenvue Acquisition, as defined in Item 8, Note 4 to the Consolidated Financial Statements (referred to below and within Item 1A, "Risk Factors" as the "pending mergers" or the "mergers") and the pending IFP Transaction, as defined in Item 8, Note 1 to the Consolidated Financial Statements, the business outlook, including raw material, energy and other input costs, the anticipated charges and savings from the 2024 Transformation Initiative, cash flow and uses of cash, growth initiatives, innovations, marketing and other spending, net sales, anticipated currency rates and exchange risks, including the impact in Argentina and Türkiye, effective tax rate, contingencies and anticipated transactions of Kimberly-Clark, including dividends, share repurchases and pension contributions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based upon management's expectations and beliefs concerning future events impacting Kimberly-Clark.
As the business, geopolitical and regulatory environment concerning Russia evolves, we may not be able to sustain the limited manufacture and sale of our products, and our assets may be partially or fully impaired. 21 KIMBERLY-CLARK CORPORATION - 2024 Annual Report Consolidated Results of Operations The following discussion and analysis compares our consolidated net sales, operating profit and other information for 2024 with 2023.
As the business, geopolitical and regulatory environment concerning Russia evolves, we may not be able to sustain the limited manufacture and sale of our products, and our assets may be partially or fully impaired. Results of Operations Consolidated Results The following discussion and analysis compares our consolidated results of operations and other information for 2025 to 2024.
See Item 8, Note 4 to the consolidated financial statements for details. • Legal Expense - In 2024, we incurred certain costs related to litigation and regulatory matters for a previously exited business. • Softex Tax Reserve Release - In 2024, we released a reserve for an uncertain tax position related to the prior year impairment of certain Softex intangible assets. • Sale of Brazil Tissue and Professional Business - In 2023, we recognized a net benefit related to the sale of our Neve tissue brand and related consumer and professional tissue assets.
See Item 8, Note 5 to the Consolidated Financial Statements for details. • Legal Expense - In 2024, we incurred certain costs related to litigation and regulatory matters for a previously exited business. • Softex Tax Reserve Release - In 2024, we released a reserve for an uncertain tax position related to the prior year impairment of certain Softex intangible assets.
Pricing - Our net sales growth and profitability may be affected as we adjust prices to address market conditions. We adjust our product prices based on a number of variables including demand, the competitive environment, technological improvements, product innovations and changes in our raw material, distribution, energy and other input costs.
We adjust our product prices based on a number of variables including demand, the competitive environment, technological improvements, product innovations and changes in our raw material, distribution, energy and other input costs. Price changes may affect net sales, earnings and market share in the near term as the market adjusts to new pricing and other market conditions.
See Item 8, Note 3 to the consolidated financial statements for details. 31 KIMBERLY-CLARK CORPORATION - 2024 Annual Report • Impairment of Intangible Assets - In 2024 and 2023, we recognized charges related to the impairment of certain intangible assets related to Softex and Thinx.
See Item 8, Note 4 to the Consolidated Financial Statements for details. • Impairment of Intangible Assets - In 2024, we recognized charges related to the impairment of certain intangible assets related to Softex and Thinx.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction This MD&A is intended to provide investors with an understanding of our recent performance, financial condition, cash flows and future prospects.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction This MD&A is intended to provide investors with an understanding of our recent performance, financial condition, cash flows and future prospects. This discussion and analysis compares consolidated and segment results for the years ended December 31, 2025 and December 31, 2024 ("2025" and "2024", respectively).
In addition, many factors outside our control, including the risk that we are not able to realize the anticipated benefits of the 2024 Transformation Initiative (including risks related to disruptions to our business or operations or related to any delays in implementation), war in Ukraine (including the related responses of consumers, customers, and suppliers and sanctions issued by the U.S., the European Union, Russia or other countries), pandemics, epidemics, fluctuations in foreign currency exchange rates, the prices and availability of our raw materials, supply chain disruptions, disruptions in the capital and credit markets, counterparty defaults (including customers, suppliers and financial institutions with which we do business), failure to realize the expected benefits or synergies from our acquisition and disposition activity, impairment of goodwill and intangible assets and our projections of operating results and other factors that may affect our impairment testing, changes in customer preferences, severe weather conditions, regional instabilities and hostilities (including the war in Israel), government trade or similar regulatory actions, 30 KIMBERLY-CLARK CORPORATION - 2024 Annual Report potential competitive pressures on selling prices for our products, energy costs, general economic and political conditions globally and in the markets in which we do business, as well as our ability to maintain key customer relationships, could affect the realization of these estimates.
In addition, many factors outside our control, including risks and uncertainties around the pending mergers (including the risk that the anticipated benefits and synergies of the mergers may not be realized when expected or at all, the terms and scope of the expected financing in connection with the mergers may prove to be less favorable than currently expected, that the mergers may not be completed in a timely matter or at all and the risk of litigation related to the mergers), the pending IFP Transaction (including risks related to delays or failure to complete the proposed transaction, the incurrence of significant transaction and separation costs, adverse market reactions, regulatory or legal challenges, and operational disruptions), risks that we are not able to realize the anticipated benefits of the 2024 Transformation Initiative (including risks related to disruptions to our business or operations or related to any delays in implementation), war in Ukraine (including the related responses of consumers, customers, and suppliers and sanctions issued by the U.S., the European Union, Russia or other countries), government trade or similar regulatory actions (including current and potential trade and tariff actions affecting the countries where we operate and the resulting negative impacts on our supply chain, commodity costs, and consumer spending), pandemics, epidemics, fluctuations in foreign currency exchange rates, the prices and availability of our raw materials, supply chain disruptions, disruptions in the capital and credit markets, counterparty defaults (including customers, suppliers and financial institutions with which we do business), failure to realize the expected benefits or synergies from our acquisition and disposition activity, impairment of goodwill and intangible assets and our projections of operating results and other factors that may affect our impairment testing, changes in customer preferences, severe weather conditions, regional instabilities and hostilities, potential competitive pressures on selling prices for our products, energy costs, general economic and political conditions globally and in the markets in which we do business, as well as our ability to maintain key customer relationships, could affect the realization of these estimates.
The following will be discussed and analyzed: • Overview of Business • Overview of 2024 Results • Business Environment and Trends • Results of Operations and Related Information • Liquidity and Capital Resources • Summary of Non-GAAP Financial Measures 17 KIMBERLY-CLARK CORPORATION - 2024 Annual Report • Critical Accounting Estimates • Information Concerning Forward-Looking Statements Throughout this MD&A, we refer to financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP, and are therefore referred to as non-GAAP financial measures.
Amounts are reported in millions, except per share amounts, unless otherwise noted. 23 KIMBERLY-CLARK CORPORATION - 2025 Annual Report The following will be discussed and analyzed: • Overview of Business and Recent Developments • Business Environment and Trends • Results of Operations • Liquidity and Capital Resources Throughout this MD&A, we refer to financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP, and are therefore referred to as non-GAAP financial measures.
Net Sales: Drivers of the changes in net sales were: Percent Change in Net Sales Volume Mix/Other Net Price Divestitures and Business Exits (c) Currency Translation Total (a) Organic (b) 2024 versus 2023 0.8 0.4 1.9 (1.2) (3.8) (1.8) 3.2 (a) Total may not sum across due to rounding.
Drivers of the changes in segment net sales and operating profit were: Percent Change in Segment Net Sales Volume Mix/Other Net Price Divestitures and Business Exits (c) Currency Translation Total (a) Organic (b) NA 2.6 (0.5) (0.4) (3.9) (0.2) (2.4) 1.8 IPC 2.3 1.3 (2.0) (0.2) (2.3) (0.9) 1.7 Percent Change in Segment Operating Profit Volume Net Price Input Costs Other Manufacturing Costs (d) Currency Translation Other (e) Total NA 0.3 (1.7) (3.4) 0.4 (0.2) 5.0 0.4 IPC 4.7 (13.7) (13.1) 12.2 (1.4) 7.7 (3.6) (a) Total may not sum across due to rounding.
Business Environment and Trends Our results of operations have been, and we expect them to continue to be, affected by the following factors and key trends, which may cause our future results of operations to differ from our historical results discussed under “Consolidated Results of Operations.” Birth Rate Trends - Sales of our baby and child care products are highly correlated with birth rate trends.
See Item 8, Note 4 to the Consolidated Financial Statements for additional details. 26 KIMBERLY-CLARK CORPORATION - 2025 Annual Report Business Environment and Trends Our results of operations have been, and we expect them to continue to be, affected by the following factors and key trends, which may cause our future results of operations to differ from our historical results discussed under “Results of Operations.” Birth Rate Trends - Sales of our baby and child care products are highly correlated with birth rate trends.
The cash flows used in the discounted cash flow model are consistent with those we use in our internal planning, which gives consideration to actual business trends experienced and the long-term business strategy. We performed our 2024 impairment assessment of our intangible assets as of the first day of the third quarter using a qualitative assessment.
The cash flows used in the discounted cash flow model are consistent with those we use in our internal planning, which gives consideration to actual business trends experienced and the long-term business strategy.
The 2024 Transformation Initiative is intended to improve our focus on growth and reduce our structural cost base by realigning our internal operating and management structure to streamline our global supply chain and improve the efficiency of our corporate and regional overhead cost structures.
As we execute our strategy, we will reduce our structural cost base by realigning our internal operating and management structure to streamline our global supply chain and improve the efficiency of our corporate and regional overhead cost structures.
Other than discussed in Item 8, Note 4 to the consolidated financial statements, no additional impairment indicators were found to be present. New Accounting Standards See Item 8, Note 1 to the consolidated financial statements for a description of recent accounting standards and their anticipated effects on our consolidated financial statements.
New Accounting Standards See Item 8, Note 1 to the Consolidated Financial Statements for a description of recent accounting standards and their anticipated effects on our Consolidated Financial Statements.
These measures include: Organic Sales Growth, Adjusted Gross Profit, Adjusted Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate. • Organic Sales Growth is defined as the change in consolidated Net Sales, as determined in accordance with U.S.
These measures include: Organic Sales Growth, Adjusted Gross Profit, Adjusted Operating Profit, Adjusted Earnings per Share, and Adjusted Effective Tax Rate. All discussions regarding non-GAAP financial measures reflect results from our continuing operations for all periods presented. • Organic Sales Growth is defined as the change in Net Sales, as determined in accordance with U.S.
The income tax effect of these non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.
The income tax effect of these non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. Refer to the Adjusted Effective Tax Rate reconciliation below for the tax effect of these adjustments on the Company's reported Provision for income taxes.
We completed our required annual assessment of goodwill for impairment for all our reporting units using a qualitative assessment as of the first day of the third quarter of the year ended December 31, 2024, concluding that it was more likely than not that the fair value of each reporting unit significantly exceeded the respective carrying amounts. 29 KIMBERLY-CLARK CORPORATION - 2024 Annual Report During the fourth quarter of 2024, our internal reporting and management structure changed, resulting in the identification of three new reportable segments defined by geographic regions and product groupings.
We completed our required annual assessment of goodwill for impairment for all our reporting units using a qualitative assessment as of the first day of the third quarter of the year ended December 31, 2025, concluding that it was more likely than not that the fair value of each reporting unit significantly exceeded the respective carrying amounts.
Some of these markets have greater political, economic and currency volatility and greater vulnerability to infrastructure and labor disruptions. Volatility in these markets affects our production costs and the demand for our products and may impact our supply chain and distribution networks.
Volatility in these markets affects our production costs and the demand for our products and may impact our supply chain and distribution networks.
Proceeds from asset and business dispositions of $651 primarily reflected the sale of our PPE business while prior year proceeds of $245 primarily reflected the sale of our Brazil tissue and professional business. We expect capital spending to be approximately $1.0 to $1.2 billion in 2025, including incremental spending from the 2024 Transformation Initiative.
This change is largely due to proceeds from asset and business dispositions of $651 in the prior year, primarily from the sale of our PPE business, and increased capital spending ($1.1 billion compared to $721 in the prior year). We expect capital spending to be approximately $1.3 billion in 2026, including incremental spending from the 2024 Transformation Initiative.
Our first pillar focuses on 19 KIMBERLY-CLARK CORPORATION - 2024 Annual Report investing in our brands to enhance our competitive advantage by leveraging our best-in-class science and proprietary, category-shaping technologies for innovative product solutions that solve unmet consumer needs around the world.
Our first pillar focuses on investing in our brands to enhance our competitive advantage by leveraging our best-in-class science and proprietary, category-shaping technologies to deliver innovative product solutions that solve unmet consumer needs around the world. It also includes an emphasis on delivering breakthrough storytelling that grows category participation and brand love.
In setting these assumptions, we consider a number of factors including projected future returns by asset class relative to the target asset allocation. Actual asset allocations are regularly reviewed and they are periodically rebalanced to the targeted allocations when considered appropriate. As of December 31, 2024, the Principal Plans had cumulative unrecognized investment and actuarial losses of approximately $1.0 billion.
In setting these assumptions, we consider a number of factors including projected future returns by 33 KIMBERLY-CLARK CORPORATION - 2025 Annual Report asset class relative to the target asset allocation. Actual asset allocations are regularly reviewed and they are periodically rebalanced to the targeted allocations when considered appropriate.
Intangible assets that are deemed to have finite lives are amortized over their useful lives, generally ranging from 4 to 20 years. We typically obtain the assistance of third-party valuation specialists to measure the acquisition date fair values of goodwill and other intangible assets acquired.
We typically obtain the assistance of third-party valuation specialists to measure the acquisition date fair values of goodwill and other intangible assets acquired.
We do not intend to distribute any remaining foreign earnings and therefore have not recorded deferred taxes for foreign and U.S. income taxes on such earnings. We consider any excess of the amount for financial reporting over the tax basis in our foreign subsidiaries to be indefinitely reinvested.
We consider any excess of the amount for financial reporting over the tax basis in our foreign subsidiaries to be indefinitely reinvested. The determination of deferred tax liabilities on the amount of financial reporting over tax basis or the remaining foreign earnings is not practicable. • Uncertain tax positions .
A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. • Undistributed earnings . A s of December 31, 2024, we have accumulated undistributed earnings generated by our foreign subsidiaries of approximately $10.6 billion.
A valuation allowance is recognized 34 KIMBERLY-CLARK CORPORATION - 2025 Annual Report if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. • Undistributed earnings .
We incurred divestiture-related costs of $30 pre-tax which were recorded in Cost of products sold and Marketing, research and general expenses, resulting in a net benefit of $44 pre-tax ($26 after-tax). See Item 8, Note 3 to the consolidated financial statements for additional details.
Upon closure of the transaction, a gain of $74 pre-tax was recognized in Other (income) and expense, net. We incurred divestiture-related costs of $30 pre-tax which were recorded in Cost of products sold and Marketing, research and general expenses, resulting in a net benefit of $44 pre-tax ($26 after-tax).
While we saw stabilization in input costs in 2024 with tailwinds in fiber, resin and energy, the overall cost basket remains elevated versus pre-pandemic levels. In 2025, we expect net input costs to be inflationary, including the impact from currency on our non-U.S. operations.
To remain competitive on our operating structure, we continue to work on programs to expand our profitability, including our 2024 Transformation Initiative. While we saw stabilization in input costs in 2025 with tailwinds in fiber, resin and energy, the overall cost basket remains elevated versus pre-pandemic levels.
Excluding these items, adjusted operating profit was $3.2 billion in 2024 and $3.0 billion in 2023. 22 KIMBERLY-CLARK CORPORATION - 2024 Annual Report Drivers of the changes in adjusted operating profit were: Percent Change in Adjusted Operating Profit Volume Net Price Input Costs Other Manufacturing Costs Currency Translation Other (a) Total (b) 2024 versus 2023 1.6 13.5 (5.8) 9.0 (6.2) (2.7) 9.4 (a) Includes impact of changes in product mix and marketing, research and general expenses.
Drivers of the changes in adjusted operating profit were: Percent Change in Adjusted Operating Profit Volume Net Price Input Costs Other Manufacturing Costs (a) Currency Translation Other (b) Total (c) 2025 versus 2024 1.2 (5.8) (7.2) 3.6 (0.6) 8.9 0.1 (a) Includes net impact of productivity initiatives, product and supply chain investments and other changes in cost of products sold.
In operating our business, we seek to: • grow our portfolio of brands through innovation, category development and commercial execution; • leverage our cost and financial discipline to fund growth and improve margins; and • allocate capital in value-creating ways. 2024 Transformation Initiative On March 27, 2024, we announced the 2024 Transformation Initiative designed to sharpen our strategic focus through a new operating model that leverages three synergistic forces: • Accelerating pioneering innovation to capture significant growth available in our categories by investing in science and technology to satisfy unmet and evolving consumer needs; • Optimizing our margin structure to deliver superior consumer propositions and implement initiatives and deploy technology and data analytics designed to create a fast, adaptable, integrated supply chain with greater visibility that can deliver continuous improvement; and • Wiring our organization for growth to drive agility, speed, and focused execution that extends our competitive advantages further into the future.
Segments are described in greater detail in Item 8, Note 16 to the Consolidated Financial Statements. 25 KIMBERLY-CLARK CORPORATION - 2025 Annual Report 2024 Transformation Initiative The 2024 Transformation Initiative is designed to sharpen our strategic focus through a new operating model and strategy that leverages three synergistic pillars: • Accelerating pioneering innovation to capture significant growth available in our product categories by investing in science-based and proprietary technology to solve unmet and evolving consumer needs, and delivering breakthrough storytelling to drive category participation and brand love; • Optimizing our margin structure to deliver superior consumer propositions at every rung of the good, better, best ladder, and implement initiatives and deploy technology and data analytics designed to create a fast, adaptable, integrated supply chain with greater visibility that can deliver continuous improvement; and • Wiring our organization for growth to drive agility, speed, and focused execution that extends our competitive advantages further into the future.
On June 1, 2023, we completed the sale transaction of our Neve tissue brand and related consumer and professional tissue assets in Brazil for $212. Upon closure of the transaction, a gain of $74 pre-tax was recognized in Other (income) and expense, net.
As the purchase of additional ownership in an already controlled subsidiary represents an equity transaction, no gain or loss was recognized in consolidated net income or comprehensive income. On June 1, 2023, we completed the sale transaction of our Neve tissue brand and related consumer and professional tissue assets in Brazil for $212.
Financing Cash used for financing for the year ended December 31, 2024 was $3.2 billion compared to $2.4 billion in the prior year. This increase was primarily due to increased share repurchases, debt repayments and dividends paid.
Financing Cash used for financing for the year ended December 31, 2025 was $2.2 billion compared to $3.2 billion in the prior year. This decrease was primarily due to decreased share repurchases, coupled with an increase in our short term debt for U.S. commercial paper.
Based upon those projections, we anticipate making annual payments for these obligations of approximately $50 through 2034. • Accrued income tax liabilities for uncertain tax positions, deferred taxes and noncontrolling interests.
Based upon those projections, we anticipate making annual payments for these obligations of approximately $45 through 2035. • Accrued income tax liabilities for uncertain tax positions, deferred taxes and noncontrolling interests. 31 KIMBERLY-CLARK CORPORATION - 2025 Annual Report Investing Cash used for investing for the year ended December 31, 2025 was $951 compared to $100 in the prior year.
Where we believe that a tax position is supportable for income tax purposes, the item is included in our income tax returns. Where treatment of a position is uncertain, a liability is recorded based upon the expected most likely outcome taking into consideration the technical merits of the position based on specific tax regulations and facts of each matter.
Where treatment of a position is uncertain, a liability is recorded based upon the expected most likely outcome taking into consideration the technical merits of the position based on specific tax regulations and facts of each matter. These liabilities may be affected by changing interpretations of laws, rulings by tax authorities or the expiration of the statute of limitations.
Results of Operations by Segment The following presents the results of the Company’s reportable segments and compares our segment net sales, operating profit and other information for 2024 with 2023 and 2023 with 2022. Certain data from prior periods presented have been recast to reflect the changes in reportable segments noted above.
Segment Results The following presents the results of the Company’s reportable segments and compares our segment net sales, operating profit and other information for 2025 to 2024.
(c) Impact of the sale of the Brazil tissue and professional business, sale of the PPE business and other exited businesses and markets in conjunction with the 2024 Transformation Initiative. Net sales of $20.1 billion for the year ended December 31, 2024 declined 1.8% primarily due to unfavorable currency impacts and divestitures and business exits.
(c) Impact of the sale of the PPE business, the exit of the Company's private label diaper business in the United States, and other exited businesses and markets in conjunction with the 2024 Transformation Initiative. Net sales of $16.4 billion declined 2.1%, primarily from divestitures and business exits and unfavorable currency impacts, partially offset by organic sales growth.
Our estimate of the fair value of our brand assets is based on a discounted cash flow model and a market-based approach using inputs which include projected revenues from our long-range plan, assumed royalty rates that could be payable if we did not own the brands, and a discount rate.
Reaching a determination on useful life requires significant judgments and assumptions regarding the future effects of obsolescence, demand, competition, other economic factors (such as the stability of the industry, known technological advances and expected changes in distribution channels), the level of required maintenance expenditures, and the expected lives of other related groups of assets. 35 KIMBERLY-CLARK CORPORATION - 2025 Annual Report Our estimate of the fair value of our brand assets is based on a discounted cash flow model and a market-based approach using inputs which include projected revenues from our long-range plan, assumed royalty rates that could be payable if we did not own the brands, and a discount rate.
Refer to the Adjusted Effective Tax Rate reconciliation below for the tax effect of these adjustments on the Company's reported Provision for income taxes. 33 KIMBERLY-CLARK CORPORATION - 2024 Annual Report The following table provides a reconciliation of the Adjusted Effective Tax Rate: Year Ended December 31 2024 2023 Income Before Income Taxes and Equity Interests Provision for Income Taxes Income Before Income Taxes and Equity Interests Provision for Income Taxes As Reported $ 2,927 $ (565) $ 2,021 $ (453) 2024 Transformation Initiative 457 (118) — — Sale of PPE Business (565) 112 — — Impairment of Intangible Assets 97 (40) 658 (175) Legal Expense 39 (1) — — Softex Tax Reserve Release — (67) — — Sale of Brazil Tissue and Professional Business — — (44) 18 Pension Settlements — — 35 (9) As Adjusted $ 2,955 $ (679) $ 2,670 $ (619) Effective Tax Rate: As Reported 19.3 % 22.4 % As Adjusted 23.0 % 23.2 %
The following table provides a reconciliation of the continuing operations Adjusted Effective Tax Rate: Year Ended December 31 2025 2024 Income From Continuing Operations Before Income Taxes and Equity Interests Provision for Income Taxes Income From Continuing Operations Before Income Taxes and Equity Interests Provision for Income Taxes As Reported $ 2,052 $ (599) $ 2,418 $ (442) 2024 Transformation Initiative 351 (56) 457 (118) Kenvue Acquisition 32 (8) — — OBBBA — 96 — — IFP Repatriated Earnings — 13 — — Sale of PPE Business — — (565) 112 Impairment of Intangible Assets — — 97 (40) Legal Expense — — 39 (1) Softex Tax Reserve Release — — — (67) As Adjusted $ 2,435 $ (554) $ 2,446 $ (556) Effective Tax Rate: As Reported 29.2 % 18.3 % As Adjusted 22.8 % 22.7 % 39 KIMBERLY-CLARK CORPORATION - 2025 Annual Report
While the global marketplace in which we operate has always been highly competitive, we continue to experience increased concentration and the growing presence of large-format retailers, discounters and e-tailers. This market environment has resulted in increased pressure on pricing and other competitive factors, and we expect these pressures to continue in the coming year.
Increased purchases of private label products could reduce net sales of our higher-margin products which would negatively impact our profitability. While the global marketplace in which we operate has always been highly competitive, we continue to experience increased concentration and the growing presence of large-format retailers, discounters and e-tailers.
These liabilities may be affected by changing interpretations of laws, rulings by tax authorities or the expiration of the statute of limitations. Goodwill and Other Intangible Assets Goodwill and other indefinite-lived intangible assets are not subject to amortization and are tested for impairment annually and whenever events or changes in circumstances indicate that impairment may have occurred.
Goodwill and Other Intangible Assets Goodwill and other indefinite-lived intangible assets are not subject to amortization and are tested for impairment annually and whenever events or changes in circumstances indicate that impairment may have occurred. Intangible assets that are deemed to have finite lives are amortized over their useful lives, generally ranging from 4 to 20 years.
We raised our dividend in 2024 by 3.4%, the 52nd consecutive annual increase in our dividend, and altogether share repurchases and dividends in 2024 amounted to $2.6 billion. In 2025, we will continue executing on our Powering Care growth strategy and its three strategic pillars: accelerate pioneering innovation, optimize our margin structure, and wire our organization for growth.
To achieve these objectives, we will continue executing our Powering Care strategy and its three synergistic, strategic pillars: accelerate pioneering innovation, optimize our margin structure, and wire our organization for growth.
Drivers of the changes in segment net sales and operating profit were: Percent Change in Segment Net Sales Volume Mix/Other Net Price Divestitures and Business Exits (c) Currency Translation Total (a) Organic (b) 2024 versus 2023 NA 0.5 0.5 0.1 (0.8) (0.1) 0.2 1.1 IPC 0.9 0.5 7.8 (0.1) (12.2) (3.1) 9.2 IFP 1.5 0.3 (2.0) (4.4) (1.2) (5.9) (0.2) 2023 versus 2022 NA 0.3 0.4 4.3 0.2 (0.3) 4.9 5.0 IPC (4.2) 1.6 7.9 — (7.9) (2.6) 5.3 IFP (7.6) 1.1 9.3 (3.9) (1.8) (2.9) 2.8 23 KIMBERLY-CLARK CORPORATION - 2024 Annual Report Percent Change in Segment Operating Profit Volume Net Price Input Costs Other Manufacturing Costs (d) Currency Translation Other (e) Total 2024 versus 2023 NA 0.9 0.4 — 1.9 (0.1) (2.0) 1.1 IPC 3.6 73.0 (33.3) 8.3 (27.8) 0.7 24.5 IFP 0.9 (25.2) 13.8 54.9 (2.7) (10.3) 31.4 2023 versus 2022 NA (0.6) 21.5 5.5 5.5 (0.3) (12.8) 18.8 IPC (7.3) 71.2 (35.7) 2.4 (16.8) (19.5) (5.7) IFP (31.9) 130.5 (46.7) (30.5) (3.5) (5.8) 12.1 (a) Total may not sum across due to rounding.
See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to Non-GAAP measures. 28 KIMBERLY-CLARK CORPORATION - 2025 Annual Report Net Sales: Drivers of the changes in net sales were: Percent Change in Net Sales Volume Mix/Other Net Price Divestitures and Business Exits (c) Currency Translation Total (a) Organic (b) 2025 versus 2024 2.5 0.1 (0.9) (2.9) (0.9) (2.1) 1.7 (a) Total may not sum across due to rounding.
Year Ended December 31 2024 2023 Change 2024 vs. 2023 Net Sales $ 20,058 $ 20,431 (1.8) % Gross Profit 7,180 7,032 2.1 % Operating Profit 3,210 2,344 36.9 % Provision for income taxes (565) (453) 24.7 % Net Income Attributable to Kimberly-Clark Corporation 2,545 1,764 44.3 % Diluted Earnings per Share 7.55 5.21 44.9 % Adjusted Gross Profit (a) 7,324 7,047 3.9 % Adjusted Operating Profit (a) 3,237 2,958 9.4 % Adjusted Earnings per Share (a) 7.30 6.57 11.1 % Adjusted Effective Tax Rate (a) 23.0 % 23.2 % (0.2) % (a) Adjusted amounts are Non-GAAP financial measures.
Summary of Results Year Ended December 31 2025 2024 % Change Net Sales $ 16,447 $ 16,805 (2.1) % Gross Profit 5,923 6,289 (5.8) % Operating Profit 2,351 2,700 (12.9) % Provision for income taxes (599) (442) 35.5 % Income from Continuing Operations 1,649 2,192 (24.8) % Income from Discontinued Operations, Net of Income Taxes 400 386 3.6 % Net Income Attributable to Kimberly-Clark Corporation 2,021 2,545 (20.6) % Diluted Earnings per Share from Continuing Operations 4.86 6.41 (24.2) % Diluted Earnings per Share from Discontinued Operations 1.21 1.14 6.1 % Adjusted Results - Continuing Operations Year Ended December 31 2025 2024 % Change Adjusted Gross Profit (a) $ 6,136 $ 6,433 (4.6) % Adjusted Operating Profit (a) 2,731 2,727 0.1 % Adjusted Earnings per Share (a) 6.12 6.16 (0.6) % Adjusted Effective Tax Rate (a) 22.8 % 22.7 % 0.1 % (a) Adjusted amounts are Non-GAAP financial measures.
Acquisition and Divestiture Activity On July 1, 2024, we completed the sale transaction that was announced on April 7, 2024, of our personal protective equipment ("PPE") business for total consideration of $635, including the initial purchase price of $640 less working capital and other closing adjustments of $5.
Completed Acquisition and Divestiture Activity On July 1, 2024, we completed the sale transaction of our personal protective equipment ("PPE") business for total consideration of $635. Upon closure of the transaction, a pre-tax gain of $566 ($453 after-tax) was recognized in Other (income) and expense, net.
We believe our strategic growth focus, sustainability initiatives, innovation pipeline and continued investment in e-commerce capabilities has us well positioned relative to these changing dynamics. Volatility of Global Markets - Our growth strategy depends in part on our ability to expand our international operations, including in emerging markets.
We believe our Powering Care strategy, sharpened growth focus, sustainability initiatives, innovation pipeline and continued investment in e-commerce capabilities - underpinned by our commitment to delivering Better Care for a Better World - make us well positioned relative to these changing external dynamics.
Our competitors include global, regional and local manufacturers, including private label manufacturers which offer products that are typically sold at lower prices. In particular, private label market share has been increasing in the tissue category. Increased purchases of private label products could reduce net sales of our higher-margin products which would negatively impact our profitability.
Our competitors include global, regional and local manufacturers, including private label manufacturers which offer products that are typically sold at lower prices. In particular, we've experienced increased competitive pressures from private label manufacturers in the Baby and Child Care and Family Care categories.
(b) Adjusted Operating Profit is a non-GAAP financial measure. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to non-GAAP measures. Adjusted operating results benefited from higher adjusted gross profit discussed above, partially offset by unfavorable currency impacts, primarily due to hyperinflationary economies, and higher marketing, research and general expenses.
(b) Includes impact of changes in product mix, marketing, research and general expenses and other (income) and expense, net. (c) Adjusted Operating Profit is a non-GAAP financial measure. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to non-GAAP measures.
Earnings of $3.4 billion were previously subject to U.S. federal income tax. Any additional taxes due with respect to such previously-taxed foreign earnings, if repatriated, would generally be limited to foreign and U.S. state income taxes. Deferred taxes have been recorded on $932 of earnings of foreign consolidated subsidiaries expected to be repatriated.
Deferred taxes have been recorded on $1.2 billion of earnings of foreign consolidated subsidiaries expected to be repatriated. We do not intend to distribute any remaining foreign earnings and therefore have not recorded deferred taxes for foreign and U.S. income taxes on such earnings.
North America Year Ended December 31 % change % change 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Net Sales $ 11,008 $ 10,988 $ 10,470 0.2 % 4.9 % Operating Profit 2,534 2,507 2,110 1.1 % 18.8 % 2024 versus 2023 Net sales of $11.0 billion were flat as an increase in organic sales of 1.1% was largely offset by divestitures and business exits.
North America Year Ended December 31 2025 2024 % Change Net Sales $ 10,753 $ 11,017 (2.4) % Operating Profit 2,553 2,542 0.4 % Net sales of $10.8 billion decreased 2.4%, as the exit of the private label diaper business in the US was partially offset by organic sales growth.
Operating profit of $377 million increased 31.4% driven by gross productivity savings, partially offset by unfavorable pricing net of inflation and higher research, selling and general expenses. 2023 versus 2022 Net sales of $3.5 billion decreased 2.9% primarily due to divestitures and business exits and unfavorable currency impacts, partially offset by organic sales.
Operating profit of $796 decreased 3.6% primarily due to unfavorable pricing net of cost inflation, supply chain related investments and currency impacts, partially offset by gross productivity savings, lower marketing, research and general expenses and volume and mix gains.
Gross margin in the current year included approximately 70 basis points for charges related to the 2024 Transformation Initiative. Excluding these charges, adjusted gross margin increased 200 basis points to 36.5% primarily due to gross productivity savings from integrated margin management of approximately $500 million, favorable pricing net of inflation and volume gains, partially offset by higher manufacturing costs.
Excluding these charges, adjusted gross margin was 37.3%, a decrease of 100 basis points primarily due to unfavorable pricing net of cost inflation, including tariff impacts, and supply chain related investments, partially offset by gross productivity savings from integrated margin management of approximately $460.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe balance sheet effect is calculated by multiplying each affiliate's net monetary asset or liability position by a 10% change in the foreign currency exchange rate versus the U.S. dollar. 34 KIMBERLY-CLARK CORPORATION - 2024 Annual Report As of December 31, 2024, a 10% unfavorable change in the exchange rate of the U.S. dollar against the prevailing market rates of foreign currencies involving balance sheet transactional exposures would not be material to our consolidated financial position, results of operations or cash flows.
Biggest changeAs of December 31, 2025, a 10% unfavorable change in the exchange rate of the U.S. dollar against the prevailing market rates of foreign currencies involving balance sheet transactional exposures would not be material to our consolidated financial position, results of operations or cash flows.
As of December 31, 2024, K-C Türkiye had an immaterial net lira monetary position and a 10% unfavorable change in the exchange rate would not be material. The translation of the balance sheets of non-U.S. operations from local currencies into U.S. dollars is also sensitive to changes in foreign currency exchange rates.
As of December 31, 2025, K-C Türkiye had an immaterial net lira monetary position and a 10% unfavorable change in the exchange rate would not be material. The translation of the balance sheets of non-U.S. operations from local currencies into U.S. dollars is also sensitive to changes in foreign currency exchange rates.
As of April 1, 2022, we adopted highly inflationary accounting for our operations in Türkiye (“K-C Türkiye ”), and their functional currency is also the U.S. dollar. Changes in the value of a Turkish lira versus the U.S. dollar applied to our net lira monetary position are recorded in Other (income) and expense, net at the time of the change.
As of April 1, 2022, we adopted highly inflationary accounting for our operations in Türkiye (“K-C Türkiye”), and their functional currency is also the U.S. dollar. Changes in the value of a Turkish lira versus the U.S. dollar applied to our net lira monetary position are recorded in Other (income) and expense, net at the time of the change.
Changes in the value of an Argentine peso versus the U.S. dollar applied to our net peso monetary position are recorded in Other (income) and expense, net at the time of the change. As of December 31, 2024, K-C Argentina had an immaterial net peso monetary position and a 10% unfavorable change in the exchange rate would not be material.
Changes in the value of an Argentine peso versus the U.S. dollar applied to our net peso monetary position are recorded in Other (income) and expense, net at the time of the change. As of December 31, 2025, K-C Argentina had an immaterial net peso monetary position and a 10% unfavorable change in the exchange rate would not be material.
Interest Rate Risk Interest rate risk is managed through the maintenance of a portfolio of variable and fixed-rate debt composed of short and long-term instruments. The objective is to maintain a cost-effective mix that management deems appropriate. As of December 31, 2024, the long-term debt portfolio was comprised of primarily fixed-rate debt.
Interest Rate Risk Interest rate risk is managed through the maintenance of a portfolio of variable and fixed-rate debt composed of short and long-term instruments. The objective is to maintain a cost-effective mix that management deems appropriate. As of December 31, 2025, the long-term debt portfolio was comprised of primarily fixed-rate debt.
This hypothetical loss on transactional exposures is based on the difference between the December 31, 2024 rates and the assumed rates. Our operations in Argentina ("K-C Argentina") are reported using highly inflationary accounting and their functional currency is the U.S. dollar.
This hypothetical loss on transactional exposures is based on the difference between the December 31, 2025 rates and the assumed rates. Our operations in Argentina ("K-C Argentina") are reported using highly inflationary accounting and their functional currency is the U.S. dollar.
As of December 31, 2024, a 10% unfavorable change in the exchange rate of the U.S. dollar against the prevailing market rates of our foreign currency translation exposures would have reduced stockholders' equity by approximately $600.
As of December 31, 2025, a 10% unfavorable change in the exchange rate of the U.S. dollar against the prevailing market rates of our foreign currency translation exposures would have reduced stockholders' equity by approximately $600.
In addition, we are subject to price risk for utilities and manufacturing inputs, used in our manufacturing operations. Derivative instruments are used in accordance with our risk management policy to hedge a portion of the price risk. 35 KIMBERLY-CLARK CORPORATION - 2024 Annual Report
In addition, we are subject to price risk for utilities and manufacturing inputs, used in our manufacturing operations. Derivative instruments are used in accordance with our risk management policy to hedge a portion of the price risk. 41 KIMBERLY-CLARK CORPORATION - 2025 Annual Report
F rom time to time, we also hedge the anticipated issuance of fixed-rate debt and those contracts are designated as cash flow hedges. As of December 31, 2024, a 1 percentage point increase in the applicable interest rates of our variable-rate debt would not materially impact the amount of interest expense recognized for the year ended December 31, 2024.
From time to time, we also hedge the anticipated issuance of fixed-rate debt and those contracts are designated as ca sh flow hedges. As of December 31, 2025, a 1 percentage point increase in the applicable interest rates of our variable-rate debt would not materially impact the amount of interest expense recognized for the year ended December 31, 2025.
In the view of management, the above potential UTA adjustments resulting from these assumed changes in foreign currency exchange rates are not material to our consolidated financial position because they would not affect our cash flow.
In the view of 40 KIMBERLY-CLARK CORPORATION - 2025 Annual Report management, the above potential UTA adjustments resulting from these assumed changes in foreign currency exchange rates are not material to our consolidated financial position because they would not affect our cash flow.
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The balance sheet effect is calculated by multiplying each affiliate's net monetary asset or liability position by a 10% change in the foreign currency exchange rate versus the U.S. dollar.

Other KMB 10-K year-over-year comparisons