Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

						Year Ended December 31
(Millions of dollars, except per share amounts)						2023						2022						2021
Net Sales						$	20,431					$	20,175					$	19,440
Cost of products sold						13,399						13,956						13,452
Gross Profit						7,032						6,219						5,988
Marketing, research and general expenses						3,961						3,581						3,399
Impairment of intangible assets						658						—						—
Other (income) and expense, net						69						(43)						28
Operating Profit						2,344						2,681						2,561
Nonoperating expense						(96)						(73)						(86)
Interest income						66						14						6
Interest expense						(293)						(282)						(256)
Income Before Income Taxes and Equity Interests						2,021						2,340						2,225
Provision for income taxes						(453)						(495)						(479)
Income Before Equity Interests						1,568						1,845						1,746
Share of net income of equity companies						196						116						98
Net Income						1,764						1,961						1,844
Net income attributable to noncontrolling interests						—						(27)						(30)
Net Income Attributable to Kimberly-Clark Corporation						$	1,764					$	1,934					$	1,814
Per Share Basis
Net Income Attributable to Kimberly-Clark Corporation
Basic						$	5.22					$	5.73					$	5.38
Diluted						$	5.21					$	5.72					$	5.35

See notes to the consolidated financial statements.

			32			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

						Year Ended December 31
(Millions of dollars)						2023						2022						2021
Net Income						$	1,764					$	1,961					$	1,844
Other Comprehensive Income (Loss), Net of Tax
Unrealized currency translation adjustments						89						(355)						(288)
Employee postretirement benefits						(15)						103						122
Cash flow hedges and other						12						(185)						84
Total Other Comprehensive Income (Loss), Net of Tax						86						(437)						(82)
Comprehensive Income						1,850						1,524						1,762
Comprehensive income attributable to noncontrolling interests						1						(19)						(15)
Comprehensive Income Attributable to Kimberly-Clark Corporation						$	1,851					$	1,505					$	1,747

See notes to the consolidated financial statements.

			33			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

						December 31
(Millions of dollars)						2023						2022
ASSETS
Current Assets
Cash and cash equivalents						$	1,093					$	427
Accounts receivable, net						2,135						2,280
Inventories						1,955						2,269
Other current assets						520						753
Total Current Assets						5,703						5,729
Property, Plant and Equipment, Net						7,913						7,885
Investments in Equity Companies						306						238
Goodwill						2,085						2,074
Other Intangible Assets, Net						197						851
Other Assets						1,140						1,193
TOTAL ASSETS						$	17,344					$	17,970
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Debt payable within one year						$	567					$	844
Trade accounts payable						3,653						3,813
Accrued expenses and other current liabilities						2,316						2,289
Dividends payable						394						388
Total Current Liabilities						6,930						7,334
Long-Term Debt						7,417						7,578
Noncurrent Employee Benefits						669						654
Deferred Income Taxes						374						647
Other Liabilities						860						799
Redeemable Common and Preferred Securities of Subsidiaries						26						258
Stockholders' Equity
Kimberly-Clark Corporation
Preferred stock - no par value - authorized 20.0 million shares, none issued						—						—
Common stock - $1.25 par value - authorized 1.2 billion shares; issued 378.6 million shares at December 31, 2023 and 2022						473						473
Additional paid-in capital						878						679
Common stock held in treasury, at cost - 41.6 and 41.1 million shares at December 31, 2023 and 2022, respectively						(5,222)						(5,137)
Retained earnings						8,368						8,201
Accumulated other comprehensive income (loss)						(3,582)						(3,669)
Total Kimberly-Clark Corporation Stockholders' Equity						915						547
Noncontrolling Interests						153						153
Total Stockholders' Equity						1,068						700
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY						$	17,344					$	17,970

See notes to the consolidated financial statements.

			34			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Millions of dollars, shares in thousands, except per share amounts)						Common Stock Issued												Additional Paid-in Capital						Treasury Stock												Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Non- controlling Interests						Total Stockholders' Equity
			Shares						Amount						Shares						Amount
Balance at December 31, 2020						378,597						$	473					$	657					39,873						$	(4,899)					$	7,567					$	(3,172)					$	243					$	869
Net income in stockholders' equity, excludes redeemable interests' share						—						—						—						—						—						1,814						—						29						1,843
Other comprehensive income, net of tax, excludes redeemable interests' share						—						—						—						—						—						—						(67)						(14)						(81)
Stock-based awards exercised or vested						—						—						(80)						(1,339)						146						—						—						—						66
Shares repurchased						—						—						—						3,228						(430)						—						—						—						(430)
Recognition of stock-based compensation						—						—						26						—						—						—						—						—						26
Dividends declared ($4.56 per share)						—						—						—						—						—						(1,538)						—						(36)						(1,574)
Other						—						—						2						—						—						15						—						1						18
Balance at December 31, 2021						378,597						473						605						41,762						(5,183)						7,858						(3,239)						223						737
Net income in stockholders' equity, excludes redeemable interests' share						—						—						—						—						—						1,934						—						38						1,972
Other comprehensive income, net of tax, excludes redeemable interests' share						—						—						—						—						—						—						(429)						(9)						(438)
Stock-based awards exercised or vested						—						—						(86)						(1,406)						145						—						—						—						59
Shares repurchased						—						—						—						779						(100)						—						—						—						(100)
Recognition of stock-based compensation						—						—						147						—						—						—						—						—						147
Dividends declared ($4.64 per share)						—						—						—						—						—						(1,566)						—						(98)						(1,664)
Other						—						—						13						—						1						(25)						(1)						(1)						(13)
Balance at December 31, 2022						378,597						473						679						41,135						(5,137)						8,201						(3,669)						153						700
Net income in stockholders' equity, excludes redeemable interests' share						—						—						—						—						—						1,764						—						37						1,801
Other comprehensive income, net of tax, excludes redeemable interests' share						—						—						—						—						—						—						87						(3)						84
Stock-based awards exercised or vested						—						—						(70)						(1,327)						140						—						—						—						70
Shares repurchased						—						—						—						1,791						(225)						—						—						—						(225)
Recognition of stock-based compensation						—						—						165						—						—						—						—						—						165
Dividends declared ($4.72 per share)						—						—						—						—						—						(1,594)						—						(35)						(1,629)
Other						—						—						104						—						—						(3)						—						1						102
Balance at December 31, 2023						378,597						$	473					$	878					41,599						$	(5,222)					$	8,368					$	(3,582)					$	153					$	1,068

See notes to the consolidated financial statements.

			35			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED CASH FLOW STATEMENTS

						Year Ended December 31
(Millions of dollars)						2023						2022						2021
Operating Activities
Net income						$	1,764					$	1,961					$	1,844
Depreciation and amortization						753						754						766
Asset impairments						676						—						3
Gain on previously held equity investment in Thinx						—						(85)						—
Stock-based compensation						169						150						26
Deferred income taxes						(322)						(57)						(70)
Net (gains) losses on asset and business dispositions						(75)						15						39
Equity companies' earnings (in excess of) less than dividends paid						(59)						6						25
Operating working capital						582						(17)						46
Postretirement benefits						24						(4)						47
Other						30						10						4
Cash Provided by Operations						3,542						2,733						2,730
Investing Activities
Capital spending						(766)						(876)						(1,007)
Acquisition of business, net of cash acquired						—						(46)						—
Proceeds from asset and business dispositions						245						12						43
Investments in time deposits						(720)						(658)						(918)
Maturities of time deposits						815						797						836
Other						8						(14)						(10)
Cash Used for Investing						(418)						(785)						(1,056)
Financing Activities
Cash dividends paid						(1,588)						(1,558)						(1,516)
Change in short-term debt						(371)						261						(97)
Debt proceeds						363						—						605
Debt repayments						(475)						(312)						(269)
Proceeds from exercise of stock options						97						94						65
Acquisitions of common stock for the treasury						(225)						(100)						(400)
Cash paid for redemption of common securities of Thinx						(95)						—						—
Cash dividends paid to noncontrolling interests						(35)						(98)						(36)
Other						(45)						(47)						(48)
Cash Used for Financing						(2,374)						(1,760)						(1,696)
Effect of Exchange Rate Changes on Cash and Cash Equivalents						(84)						(31)						(11)
Change in Cash and Cash Equivalents						666						157						(33)
Cash and Cash Equivalents - Beginning of Year						427						270						303
Cash and Cash Equivalents - End of Year						$	1,093					$	427					$	270

See notes to the consolidated financial statements.

			36			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Accounting Policies

Basis of Presentation

The consolidated financial statements present the accounts of Kimberly-Clark Corporation and all subsidiaries in which it has a controlling financial interest as if they were a single economic entity in conformity with accounting principles generally accepted in the United States of America ("GAAP"). All intercompany transactions and accounts are eliminated in consolidation. The terms "Corporation," "Kimberly-Clark," "we," "our," and "us" refer to Kimberly-Clark Corporation and all subsidiaries in which it has a controlling financial interest. Dollar amounts are reported in millions, except per share dollar amounts, unless otherwise noted.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Actual results could differ from these estimates, and changes in these estimates are recorded when known. Estimates are used in accounting for, among other things, sales incentives and trade promotion allowances, employee postretirement benefits, and deferred income taxes and potential assessments.

Cash Equivalents

Cash equivalents are short-term investments with an original maturity date of three months or less.

Inventories and Distribution Costs

Most U.S. inventories are valued at the lower of cost, using the Last-In, First-Out ("LIFO") method, or market. The balance of the U.S. inventories and inventories of consolidated operations outside the U.S. are valued at the lower of cost or net realizable value using either the First-In, First-Out ("FIFO") or weighted-average cost methods. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Distribution costs are classified as cost of products sold.

Property and Depreciation

Property, plant and equipment are stated at cost and are depreciated on the straight-line method. Buildings are depreciated over their estimated useful lives, primarily 40 years. Machinery and equipment are depreciated over their estimated useful lives, primarily ranging from 16 to 20 years. Purchases of computer software, including external costs and certain internal costs (including payroll and payroll-related costs of employees) directly associated with developing significant computer software applications for internal use, are capitalized. Computer software costs are amortized on the straight-line method over the estimated useful life of the software, which generally does not exceed 5 years.

Estimated useful lives are periodically reviewed and, when warranted, changes are made to them. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss would be indicated when estimated undiscounted future cash flows from the use and eventual disposition of an asset group, which are identifiable and largely independent of the cash flows of other asset groups, are less than the carrying amount of the asset group. Measurement of an impairment loss would be based on the excess of the carrying amount of the asset group over its fair value. Fair value is measured using discounted cash flows or independent appraisals, as appropriate. When property is sold or retired, the cost of the property and the related accumulated depreciation are removed from the consolidated balance sheet and any gain or loss on the transaction is included in income.

Goodwill and Other Intangible Assets

Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Goodwill is not amortized, but rather is assessed for impairment annually and whenever events and circumstances indicate that impairment may have occurred. Impairment testing compares the reporting unit carrying amount, including goodwill, with its fair value. If the reporting unit carrying amount, including goodwill, exceeds its fair value, a goodwill impairment charge for the excess amount above fair value would be recorded. In our evaluation of goodwill impairment, we have the option to first assess qualitative factors such as macroeconomic, industry and competitive conditions, legal and regulatory environments, historical and

			37			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

projected financial performance, significant changes in the reporting unit and the magnitude of excess fair value over carrying amount from the previous quantitative impairment testing. If the qualitative assessment determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then a quantitative impairment test using discounted cash flows to estimate fair value must be performed. Alternatively, if the qualitative assessment determines that it is more likely than not that the fair value of a reporting unit is more than its carrying value, then further quantitative testing is not required. For 2023, we completed the required annual assessment of goodwill for impairment for all of our reporting units using a qualitative assessment as of the first day of the third quarter, and we determined that it is more likely than not that the fair value of goodwill significantly exceeds the carrying amount for each of our reporting units.

Indefinite-lived intangible assets, other than goodwill, consist of certain brand names related to our acquisition of Softex Indonesia and are tested for impairment annually at the same time as our goodwill impairment assessment and whenever events and circumstances indicate that impairment may have occurred. 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. For 2023, we completed the required annual assessment of indefinite-lived intangible assets, other than goodwill, for impairment using a qualitative assessment as of the first day of the third quarter, subsequent to the impairment recognized in the second quarter of 2023, and we determined that it is more likely than not that the fair value is more than the carrying amount for each of these intangible assets.

Intangible assets with finite lives are amortized over their estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss would be indicated when estimated undiscounted future cash flows from the use of the asset are less than its carrying amount. An impairment loss would be measured as the difference between the fair value (based on discounted future cash flows) and the carrying amount of the asset. Estimated useful lives range from 10 to 20 years for trademarks and 4 to 20 years for certain acquired distributor and customer relationships.

Investments in Equity Companies

Investments in companies which we do not control but over which we have the ability to exercise significant influence and that, in general, are at least 20 percent-owned by us, are stated at cost plus equity in undistributed net income. These investments are evaluated for impairment when warranted. An impairment loss would be recorded whenever a decline in value of an equity investment below its carrying amount is determined to be other than temporary. In judging "other than temporary," we would consider the length of time and extent to which the fair value of the equity company investment has been less than the carrying amount, the near-term and longer-term operating and financial prospects of the equity company, and our longer-term intent of retaining the investment in the equity company.

Revenue Recognition

Sales revenue is recognized at the time of product shipment or delivery, depending on when control passes, to unaffiliated customers, and when all of the following have occurred: a firm sales agreement is in place, pricing is fixed or determinable, and collection is reasonably assured. Sales are reported net of returns, consumer and trade promotions, rebates and freight allowed. Taxes imposed by governmental authorities on our revenue-producing activities with customers, such as sales taxes and value-added taxes, are excluded from net sales.

Sales Incentives and Trade Promotion Allowances

The cost of promotion activities provided to customers is classified as a reduction in sales revenue. In addition, the estimated redemption value of consumer coupons and related expense are recorded when the related revenue from customers is realized. Rebate and promotion accruals are based on estimates of the quantity of customer sales. Promotion accruals also consider estimates of the number of consumer coupons that will be redeemed and timing and costs of activities within the promotional programs.

Advertising Expense

Advertising costs are expensed in the year the related advertisement or campaign is first presented through traditional or digital media. For interim reporting purposes, advertising expenses are charged to operations as a percentage of sales based on estimated sales and related advertising expense for the full year.

			38			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Research Expense

Research and development costs are charged to expense as incurred.

Other Income

Certain amounts not directly associated with the current operations of the business are recorded in Other (income) and expense, net.

On June 1, 2023, we completed the sale transaction, announced on October 24, 2022, of our Neve tissue brand and related consumer and K-C Professional tissue assets in Brazil for $212, including the base purchase price of $175 and preliminary working capital and other closing adjustments of $37. This transaction also included a licensing agreement to allow the acquirer to manufacture and market in Brazil the Kleenex, Scott and Wypall brands to consumers and away-from-home customers for a period of time. Upon closure of the transaction, a gain of $74 pre-tax was recognized in Other (income) and expense, net. See Note 3 for details.

In the first quarter of 2022, an $85 non-recurring, non-cash gain was recognized in Other (income) and expense, net as a result of the remeasurement of the carrying value of our previously held equity investment to fair value upon the acquisition of a controlling interest in Thinx Inc. ("Thinx"). See Note 3 for details.

Foreign Currency Translation

The income statements of foreign operations, other than those in highly inflationary economies, are translated into U.S. dollars at rates of exchange in effect each month. The balance sheets of these operations are translated at period-end exchange rates, and the differences from historical exchange rates are reflected in stockholders' equity as unrealized translation adjustments. Under highly inflationary accounting, the countries' functional currency becomes the U.S. dollar, and its income statement and balance sheet are measured in U.S. dollar using both current and historical rates of exchange.

As of July 1, 2018, we elected to adopt highly inflationary accounting for our subsidiaries in Argentina (“K-C Argentina”). The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in Other (income) and expense, net. As of December 31, 2023, K-C Argentina had an immaterial net peso monetary position. Net sales of K-C Argentina were approximately 1 percent of our consolidated net sales in 2023, 2022 and 2021.

As of April 1, 2022, we elected to adopt highly inflationary accounting for our subsidiary in Türkiye (“K-C Türkiye”). The effect of changes in exchange rates on lira-denominated monetary assets and liabilities has been reflected in earnings in Other (income) and expense, net. As of December 31, 2023, K-C Türkiye had an immaterial net lira monetary position. Net sales of K-C Türkiye were less than 1 percent of our consolidated net sales in 2023 and 2022.

Derivative Instruments and Hedging

Our policies allow the use of derivatives for risk management purposes and prohibit their use for speculation. Our policies also prohibit the use of any leveraged derivative instrument. Consistent with our policies, foreign currency derivative instruments, interest rate swaps and locks, and the majority of commodity hedging contracts are entered into with major financial institutions. At inception, we formally designate certain derivatives as cash flow, fair value or net investment hedges and establish how the effectiveness of these hedges will be assessed and measured. This process links the derivatives to the transactions or financial balances they are hedging. Changes in the fair value of derivatives not designated as hedging instruments are recorded in earnings as they occur. All derivative instruments are recorded as assets or liabilities on the balance sheet at fair value. Changes in the fair value of derivatives are either recorded in the income statement or other comprehensive income, as appropriate. The gain or loss on derivatives designated as fair value hedges and the offsetting loss or gain on the hedged item attributable to the hedged risk are included in income in the period that changes in fair value occur. The gain or loss on derivatives designated as cash flow hedges is included in other comprehensive income in the period that changes in fair value occur, and is reclassified to income in the same period that the hedged item affects income. The gain or loss on derivatives designated as hedges of investments in foreign subsidiaries is recognized in other comprehensive income to offset the change in value of the net investments being hedged. Certain foreign-currency derivative instruments not designated as hedging instruments have been entered into to manage certain non-functional currency denominated monetary assets and liabilities. The gain or loss on these derivatives is included in income in the period that changes in their fair values occur. Cash flows from derivatives are classified within the consolidated statement of cash flows in the same category as the items being hedged. Cash flows from derivatives are classified within Operating Activities, except for derivatives designated as net

			39			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

investment hedges which are classified in Investing Activities. See Note 12 for disclosures about derivative instruments and hedging activities.

Leases

Lease assets and lease liabilities are recognized at the commencement of an arrangement where it is determined at inception that a lease exists. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate generally applicable to the location of the lease asset, unless the implicit rate is readily determinable. Lease assets also include any upfront lease payments made and exclude lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised.

Variable lease payments are generally expensed as incurred and include certain index-based changes in rent, certain nonlease components, such as maintenance and other services provided by the lessor, and other charges included in the lease. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term.

Certain lease agreements with lease and nonlease components are combined as a single lease component. The depreciable life of lease assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Accounting Standard -Adopted During 2023

In 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update (“ASU”) No. 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50). The new guidance requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of the financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. This ASU was effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the provision on roll forward information, which is effective for fiscal years beginning after December 15, 2023. We adopted this ASU as of January 1, 2023, except for the amendment on roll forward information which was adopted January 1, 2024, on a prospective basis. As the guidance requires only additional disclosure, there were no effects of this standard on our financial position, results of operations or cash flows.

Accounting Standards Issued - Not Adopted as of December 31, 2023

In 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280). The new guidance improves reportable segment disclosures primarily through enhanced disclosures about significant segment expenses and by requiring current annual disclosures to be provided in interim periods. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The new guidance is to be applied retrospectively to all prior periods presented unless impracticable to do so. As the guidance requires only additional disclosure, there will be no effects of this standard on our financial position, results of operations or cash flows.

In 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied on a prospective basis with retrospective application permitted. As the guidance requires only additional disclosure, there will be no effects of this standard on our financial position, results of operations or cash flows.

Note 2. 2018 Global Restructuring Program

In 2018, we initiated our 2018 Global Restructuring Program to reduce our structural cost base by streamlining and simplifying our manufacturing supply chain and overhead organization. The restructuring actions were completed in 2021. We closed or sold 11 manufacturing facilities and expanded production capacity at several others. We exited or divested some lower-margin businesses that generated approximately 1 percent of our net sales. Workforce reductions were approximately 6,000. The restructuring impacted all of our business segments and our organizations in all major geographies.

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The restructuring actions were completed with total costs of $2.2 billion pre-tax ($1.6 billion after tax). Pre-tax cash and non-cash costs of $1.2 billion and $1.0 billion, respectively, were incurred.

The following net charges were incurred in connection with the 2018 Global Restructuring Program:

			Year Ended December 31
			2021						2020						2019						2018						Total
Cost of products sold:
Charges for workforce reductions			$	4					$	10					$	31					$	149					$	194
Asset impairments			3						17						—						74						94
Asset write-offs			17						63						54						112						246
Incremental depreciation			18						94						235						172						519
Other exit costs			112						99						96						34						341
Total			154						283						416						541						1,394
Marketing, research and general expenses:
Charges for workforce reductions			39						13						(12)						243						283
Other exit costs			72						96						111						137						416
Total			111						109						99						380						699
Other (income) and expense, net(a)			10						(9)						(194)						(12)						(205)
Nonoperating expense(b)			79						36						45						127						287
Total charges			354						419						366						1,036						2,175
Provision for income taxes			(75)						(94)						(118)						(243)						(530)
Net charges			279						325						248						793						1,645
Net impact related to equity companies and noncontrolling interests			2						(2)						—						(10)						(10)
Net charges attributable to Kimberly-Clark Corporation			$	281					$	323					$	248					$	783					$	1,635

(a)Other (income) and expense, net in 2019 was the result of pre-tax gains on the sales of manufacturing facilities and associated real estate which were disposed of as part of the restructuring.

(b)Represents non-cash pension settlement and curtailment charges resulting from restructuring actions, primarily in the U.S., United Kingdom and Canada.

The measurement of the asset impairment charges was based on the excess of the carrying values of the impacted asset groups over their fair values. These fair values were measured by using discounted cash flows expected over the limited time the assets would remain in use or the expected sales value, and as a result, the assets were essentially written off or written down to fair value less costs to sell. The use of discounted cash flows represents a level 3 measure under the fair value hierarchy.

The impact related to restructuring charges was recorded in Operating working capital and Other Operating Activities, as appropriate, in our consolidated cash flow statement. Cash payments of $235, $249, $302 and $325 were made during 2021, 2020, 2019 and 2018, respectively.

Note 3. Acquisition and Divestiture

On February 24, 2022, we completed our acquisition of a majority and controlling share of Thinx, an industry leader in the reusable period and incontinence underwear category, for total consideration of $181 consisting of cash of $53, the fair value of our previously held equity investment of $127, and certain share-based award costs of $1.

We previously accounted for our ownership interest in Thinx as an equity method investment, but upon increasing our ownership to 58 percent, we began consolidating the operations of Thinx into our financial statements at the end of the first quarter of 2022. The consolidated results of operations for Thinx are reported in our Personal Care business segment on a one-month lag. Prior to the acquisition of the remaining outstanding shares in the fourth quarter of 2023, the share of Thinx net income and equity attributable to the third-party minority owner of Thinx was classified in our consolidated income statement within Net income attributable to noncontrolling interests and in our consolidated balance sheet within Redeemable Common

			41			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

and Preferred Securities of Subsidiaries. This noncontrolling equity interest was measured at the estimated redemption value, which approximated fair value.

During the first quarter of 2022, we substantially completed an initial purchase price allocation in which we utilized several generally accepted valuation methodologies to estimate the fair value of certain acquired assets. The primary valuation methods included two forms of the Income Approach (i.e., the multi-period excess earnings method [distributor method] and the relief-from-royalty method). These valuation methodologies are commonly used to value similar identifiable intangible assets in the Consumer Packaged Goods industry. All of the selected valuation methodologies incorporate unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy in Accounting Standard Codification 820, Fair Value Measurements. In connection with these valuation methodologies, we are required to make estimates and assumptions regarding market comparable companies, revenue growth rates, operating margins, distributor and customer attrition rates, royalty rates, distributor margins, discount rates, etc., which are primarily based on cash flow forecasts, business plans, economic projections and other information available to market participants. The purchase price allocation was finalized in the first quarter of 2023 with immaterial measurement period adjustments recorded.

The total purchase price consideration was allocated to the net assets acquired based upon their respective final estimated fair values as follows:

Current assets						$	28
Property, Plant and Equipment, Net						2
Goodwill						298
Other Intangible Assets, Net						123
Other assets						4
Current liabilities						(18)
Deferred income taxes						(18)
Other liabilities						(4)
Fair value of net assets acquired						415
Less fair value of noncontrolling interest						(234)
Total purchase price consideration						$	181

Other Intangible Assets, Net includes brands and customer relationships which have estimated useful lives of 4 to 15 years, primarily 15 years. Based on the carrying value of these finite-lived assets as of December 31, 2023, amortization expense per year for each of the next five years is estimated to be approximately $3.

Goodwill of $298 was allocated to the Personal Care business segment. The goodwill is primarily attributable to future growth opportunities and any intangible assets that did not qualify for separate recognition. For tax purposes, the acquisition of additional Thinx shares was treated as a stock acquisition, and the goodwill acquired is not tax deductible.

As a result of this transaction during the quarter ended March 31, 2022, an $85 non-recurring, non-cash gain was recognized in Other (income) expense, net as a result of the remeasurement of the carrying value of our previously held equity investment to fair value, and related transaction and integration costs of $21 were recorded in Marketing, research and general expenses. This recognition resulted in a net benefit of $64 pre-tax ($68 after tax) being included in our consolidated income statement for the quarter ended March 31, 2022. In addition, we removed the non-cash gain impact from Operating Activities in our consolidated cash flow statements for the year ended December 31, 2022.

			42			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

In the first quarter of 2023, we delivered a redemption notice to the third-party minority owner with respect to a portion of the remaining common securities of Thinx. The redemption closed in the second quarter of 2023, and we acquired additional ownership of Thinx for $48, increasing our controlling ownership to 70 percent. As part of the completion of a negotiated final redemption, we acquired the remaining 30 percent ownership of Thinx for $47 in the fourth quarter of 2023. 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. The following table discloses the effect of the change in the ownership interest between us and the previous noncontrolling interest:

						Year Ended December 31, 2023
Net income attributable to Kimberly-Clark Corporation						$	1,764
Increase in Kimberly-Clark Corporation's additional paid-in capital for purchase of the remaining shares of Thinx(a)						87
Change in net income attributable to Kimberly-Clark Corporation and transfer to noncontrolling interests						$	1,851

(a) The acquisition of the remaining ownership of Thinx was recorded as a reduction in Redeemable Common and Preferred Securities of Subsidiaries of $234, an increase to retained earnings of $52, an increase to additional paid-in capital of $87, and a reduction of cash of $95.

Pro forma results of operations have not been presented as the impact on our consolidated financial statements is not material.

Divestiture

On June 1, 2023, we completed the sale transaction, announced on October 24, 2022, of our Neve tissue brand and related consumer and K-C Professional tissue assets in Brazil for $212, including the base purchase price of $175 and working capital and other closing adjustments of $37. This transaction also included a licensing agreement to allow the acquirer to manufacture and market in Brazil the Kleenex, Scott and Wypall brands to consumers and away-from-home customers for a period of time. The assets included in the sale agreement were reclassified to Other current assets as of December 31, 2022, and 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).

Note 4. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by reportable segment for the years ended December 31, 2023 and 2022 were as follows:

			Personal Care						Consumer Tissue						K-C Professional						Total
Balance at December 31, 2021			$	961					$	494					$	385					$	1,840
Acquisition			304						—						—						304
Effect of foreign currency translation			(60)						(6)						(4)						(70)
Balance at December 31, 2022			1,205						488						381						2,074
Divestiture			—						(4)						(3)						(7)
Effect of foreign currency translation			9						7						2						18
Balance at December 31, 2023			$	1,214					$	491					$	380					$	2,085

The carrying amounts of Other Intangible Assets, Net for the years ended December 31, 2023 and 2022 were as follows:

			43			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

						December 31
						2023																		2022
						Gross Carrying Amount**(b)**						Accumulated Amortization**(b)**						Net Carrying Amount						Gross Carrying Amount**(b)**						Accumulated Amortization**(b)**						Net Carrying Amount
Intangible assets with indefinite lives:
Brand names						$	68					$	—					$	68					$	610					$	—					$	610
Intangibles assets with finite lives:
Trademarks and brand names						148						(83)						65						253						(91)						162
Other intangible assets(a)						76						(12)						64						98						(19)						79
Total intangible assets with finite lives						224						(95)						129						351						(110)						241
Total						$	292					$	(95)					$	197					$	961					$	(110)					$	851

(a) Other intangible assets primarily include customer and distributor relationships.

(b) Amounts subject to foreign currency adjustments.

Amortization expense relating to the intangible assets with finite lives was $13, $15 and $9 for the three years ended December 31, 2023, 2022 and 2021, respectively. Based on the carrying values of the intangible assets with finite lives as of December 31, 2023, amortization expense for each of the next five years is estimated to be approximately $9.

In the second quarter of 2023, we conducted forecasting and strategic reviews and integration assessments of our Softex Indonesia business, acquired in the fourth quarter of 2020, and with performance below expectations since acquisition, we revised internal financial projections of the business to reflect updated expectations of future financial performance. These reviews and the subsequent revisions in the projections highlighted challenges for the Softex business arising from modified consumer shopping behavior in the post-COVID-19 period, inflationary pressures and other macroeconomic factors and increased competitive activity in the region. As a result of separate management reviews, we also have revised internal financial projections associated with our acquisition of a controlling interest in Thinx as a result of performance below expectations due to the impact of modified consumer shopping behavior in the post-COVID-19 period.

These revisions were considered triggering events requiring interim impairment assessments to be performed relative to the intangible assets that had been recorded as part of these acquisitions. These intangible assets were recorded as part of the Personal Care business segment and included indefinite-lived and finite-lived brands and finite-lived distributor and customer relationships. As a result of the interim impairment assessments, we recognized impairment charges, principally arising from the impairment charge of $593 related to the Softex business, totaling $658 pre-tax ($483 after tax) to write-down these intangible assets to their respective fair values aggregating to $188 as of June 30, 2023. The valuation methods used in the assessments included the relief from royalty and distributor and customer relationships methods. This noncash charge was included in Impairment of intangible assets in our consolidated income statement and in Asset impairments within Operating Activities in our consolidated cash flow statement.

We believe our estimates and assumptions used in the valuations are reasonable and comparable to those that would be used by other market participants; however, actual events and results could differ substantially from those used in the valuation, and to the extent such factors result in a failure to achieve the projected cash flows used to estimate fair value, additional noncash impairment charges could be required in the future.

Note 5. Fair Value Information

The following fair value information is based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels in the hierarchy used to measure fair value are:

Level 1—Unadjusted quoted prices in active markets accessible at the reporting date for identical assets and liabilities.

Level 2—Quoted prices for similar assets or liabilities in active markets. Quoted prices for identical or similar assets and liabilities in markets that are not considered active or financial instruments for which all significant inputs are observable, either directly or indirectly.

Level 3—Prices or valuations that require inputs that are significant to the valuation and are unobservable.

			44			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

During 2023 and 2022, there were no significant transfers to or from level 3 fair value determinations.

Derivative assets and liabilities are measured on a recurring basis at fair value. At December 31, 2023 and 2022, derivative assets were $70 and $99, respectively, and derivative liabilities were $259 and $318, respectively. The fair values of derivatives used to manage interest rate risk are based on the Secured Overnight Financing Rate ("SOFR") as of December 31, 2023, and on LIBOR rates as of December 31, 2022, and interest rate swap curves. The fair values of derivatives used to manage commodity price risk are based on commodity price quotations. The fair values of hedging instruments used to manage foreign currency risk are based on published quotations of spot currency rates and forward points, which are converted into implied forward currency rates. Measurement of our derivative assets and liabilities is considered a level 2 measurement. See Note 12 for additional information on our use of derivative instruments.

Redeemable common and preferred securities of subsidiaries are measured on a recurring basis at their estimated redemption values, which approximates fair value. As of December 31, 2023 and 2022, the securities were valued at $26 and $258 respectively. The securities are not traded in active markets, and their measurement is considered a level 3 measurement. In 2023, all the redeemable common securities held by the third-party minority owner of Thinx were redeemed. Additional information is contained in Note 3.

Company-owned life insurance ("COLI") assets are measured on a recurring basis at fair value. COLI assets were $67 and $63 at December 31, 2023 and 2022, respectively. The COLI policies are a source of funding primarily for our nonqualified employee benefits and are included in other assets. The COLI policies are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

The following table includes the fair value of our financial instruments for which disclosure of fair value is required:

			Fair Value Hierarchy Level						Carrying Amount						Estimated Fair Value						Carrying Amount						Estimated Fair Value
						December 31, 2023												December 31, 2022
Assets
Cash and cash equivalents(a)			1						$	1,093					$	1,093					$	427					$	427
Time deposits(b)			1						169						169						268						268
Liabilities
Short-term debt(c)			2						2						2						373						373
Long-term debt(d)			2						7,982						7,569						8,049						7,403

(a)Cash equivalents are composed of certificates of deposit, time deposits and other interest-bearing investments with original maturity dates of 90 days or less. Cash equivalents are recorded at cost, which approximates fair value.

(b)Time deposits are composed of deposits with original maturities of more than 90 days but less than one year and instruments with original maturities of greater than one year, included in Other current assets or Other Assets in the consolidated balance sheet, as appropriate. Time deposits are recorded at cost, which approximates fair value.

(c)Short-term debt is composed of U.S. commercial paper and/or other similar short-term debt issued by non-U.S. subsidiaries, all of which are recorded at cost, which approximates fair value.

(d)Long-term debt includes the current portion of these debt instruments. Fair values were estimated based on quoted prices for financial instruments for which all significant inputs were observable, either directly or indirectly.

			45			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Note 6. Debt and Redeemable Common and Preferred Securities of Subsidiaries

Long-term debt is composed of the following:

			Weighted- Average Interest Rate						Maturities						December 31
			2023						2022
Notes and debentures			3.3%						2024 - 2050						$	7,851					$	7,825
Industrial development revenue bonds			4.8%						2024 - 2051						59						169
Bank loans and other financings in various currencies			3.3%						2024 - 2039						72						55
Total long-term debt															7,982						8,049
Less current portion															565						471
Long-term portion															$	7,417					$	7,578

Scheduled maturities of long-term debt for the next five years are $566 in 2024, $559 in 2025, $403 in 2026, $601 in 2027 and $698 in 2028.

In February 2023, we issued $350 aggregate principal amount of 4.50 percent notes due February 16, 2033. Proceeds from the offering were used for general corporate purposes including the repayment of a portion of our commercial paper indebtedness.

In October 2021, we issued $600 aggregate principal amount of 2.00 percent notes due November 2, 2031. Proceeds from the offering were used for general corporate purposes.

We maintain a $2.0 billion revolving credit facility which expires in June 2028 and a $750 revolving credit facility which expires in May 2024. These facilities, currently unused, support our commercial paper program, and would provide liquidity in the event our access to the commercial paper markets is unavailable for any reason.

Redeemable common securities represented the share of Thinx equity attributable to the third-party minority owner of Thinx, which were redeemed in 2023. Additional information is contained in Note 3. Our subsidiary in Central America has outstanding redeemable preferred securities that are held by a non-controlling interest.

Note 7. Stock-Based Compensation

We have a stock-based Equity Participation Plan and an Outside Directors' Compensation Plan (the "Plans"), under which we can grant stock options, restricted shares and restricted share units to employees and outside directors. As of December 31, 2023, the number of shares of common stock available for grants under the Plans aggregated to 8.8 million shares.

Stock options are granted at an exercise price equal to the fair market value of our common stock on the date of grant, and they have a term of 10 years. Stock options are subject to graded vesting whereby options vest 30 percent at the end of each of the first two 12-month periods following the grant and 40 percent at the end of the third 12-month period.

Time-vested restricted share unit grants starting in 2022 are valued at the closing market price of our common stock on the grant date and are generally subject to a graded vesting whereby shares vest 30 percent at the end of each of the first two 12-month periods following the grant and 40 percent at the end of the third 12-month period. Time-vested restricted share unit grants issued prior to 2022 or issued for special one-time awards, restricted shares units and performance-based restricted share units granted to employees are valued at the closing market price of our common stock on the grant date and vest generally at the end of three years. The number of performance-based share units that ultimately vest ranges from zero to 200 percent of the number granted based on performance. Beginning in 2021, performance metrics are tied to modified free cash flow and organic sales growth during the three-year performance period. Modified free cash flow and organic sales growth are set at the beginning of the performance period. Performance-based share units granted prior to 2021 are structured similarly but vest on performance tied to return on invested capital ("ROIC") and net sales. Restricted share units granted to outside directors are valued at the closing market price of our common stock on the grant date and vest when they are granted. The restricted period begins on the date of grant and expires on the date the outside director retires from or otherwise terminates service on our Board.

			46			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

At the time stock options are exercised or restricted shares and restricted share units become payable, common stock is issued from our accumulated treasury shares. Dividend equivalents are credited on restricted share units on the same date and at the same rate as dividends are paid on Kimberly-Clark's common stock. These dividend equivalents, net of estimated forfeitures, are charged to retained earnings.

Stock-based compensation costs of $169, $150 and $26 and related deferred income tax benefits of $36, $33 and $7 were recognized for 2023, 2022 and 2021, respectively.

The fair value of stock option awards was determined using a Black-Scholes-Merton option-pricing model utilizing a range of assumptions related to dividend yield, volatility, risk-free interest rate, and employee exercise behavior. Dividend yield is based on historical experience and expected future dividend actions. Expected volatility is based on a blend of historical volatility and implied volatility from traded options on Kimberly-Clark's common stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. We estimate forfeitures based on historical data.

The weighted-average fair value of stock options granted was estimated at $21.28 and $10.26, in 2022 and 2021, respectively, per option on the date of grant based on the following assumptions:

						Year Ended December 31
									2022						2021
Dividend yield									3.3		%				3.9		%
Volatility									22.1		%				17.4		%
Risk-free interest rate									2.8		%				0.8		%
Expected life - years									4.6						4.6

During 2023, no stock options were granted.

Total remaining unrecognized compensation costs and amortization period are as follows:

			December 31, 2023						Weighted-Average Service Years
Stock options			$	4					0.5
Restricted shares and time-vested restricted share units			64						1.4
Performance-based restricted share units			29						1.7

A summary of stock-based compensation is presented below:

Stock Options			Shares (in thousands)						Weighted-Average Exercise Price						Weighted-Average Remaining Contractual Term						Aggregate Intrinsic Value
Outstanding at January 1, 2023			5,117						$	126.81
Granted			—						—
Exercised			(847)						114.92
Forfeited or expired			(73)						126.47
Outstanding at December 31, 2023			4,197						128.80						5.04						$	14
Exercisable at December 31, 2023			3,578						128.40						4.55						$	11

			47			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

The total intrinsic value of options exercised during 2023, 2022 and 2021 was $23, $21 and $16, respectively.

			Time-Vested Restricted Share Units												Performance-Based Restricted Share Units
Other Stock-Based Awards			Shares (in thousands)						Weighted- Average Grant-Date Fair Value						Shares (in thousands)						Weighted- Average Grant-Date Fair Value
Nonvested at January 1, 2023			845						$	134.81					1,103						$	138.96
Granted			790						141.59						288						143.34
Vested			(333)						135.33						(298)						137.11
Forfeited			(97)						138.75						(190)						136.25
Nonvested at December 31, 2023			1,205						133.14						903						130.36

The total fair value of restricted share units that were distributed to participants during 2023, 2022 and 2021 was $99, $118 and $100, respectively.

Note 8. Employee Postretirement Benefits

Substantially all regular employees in the U.S. and the United Kingdom are covered by defined contribution retirement plans and certain U.S. and United Kingdom employees previously earned benefits covered by defined benefit pension plans that currently provide no future service benefit (the "Principal Plans"). Certain other subsidiaries have defined benefit pension plans or, in certain countries, termination pay plans covering substantially all regular employees. The funding policy for our qualified defined benefit pension plans is to contribute assets at least equal in amount to regulatory minimum requirements. Nonqualified U.S. plans providing pension benefits in excess of limitations imposed by the U.S. income tax code are not funded.

Substantially all U.S. retirees and employees have access to our unfunded health care and life insurance benefit plans. The annual increase in the consolidated weighted-average health care cost trend rate is expected to be 6.0 percent in 2024 and to decline to 4.5 percent in 2034 and thereafter. Assumed health care cost trend rates affect the amounts reported for postretirement health care benefit plans.

As a result of restructuring actions related to the 2018 Global Restructuring Program, aggregate pension settlement charges of $91 and curtailment gains of $2 were recognized during 2021 in Nonoperating expense, primarily related to the defined benefit pension plans in the U.S, Switzerland and the United Kingdom (see Note 2 for further information about the 2018 Global Restructuring Program).

			48			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Summarized financial information about postretirement plans, excluding defined contribution retirement plans, is presented below:

			Pension Benefits												Other Benefits
			Year Ended December 31
			2023						2022						2023						2022
Change in Benefit Obligation
Benefit obligation at beginning of year			$	2,441					$	3,811					$	533					$	669
Service cost			13						16						4						7
Interest cost			121						89						30						21
Actuarial (gain) loss(a)			59						(1,000)						13						(113)
Currency and other			51						(197)						5						2
Benefit payments from plans			(141)						(173)						—						—
Direct benefit payments			(9)						(8)						(54)						(53)
Settlements			(66)						(97)						—						—
Benefit obligation at end of year			2,469						2,441						531						533
Change in Plan Assets
Fair value of plan assets at beginning of year			2,321						3,744						—						—
Actual return on plan assets			137						(987)						—						—
Employer contributions			26						30						—						—
Currency and other			52						(199)						—						—
Benefit payments			(141)						(173)						—						—
Settlements			(66)						(94)						—						—
Fair value of plan assets at end of year			2,329						2,321						—						—
Funded Status			$	(140)					$	(120)					$	(531)					$	(533)

(a) The actuarial net losses in 2023 and actuarial net gains in 2022 were primarily due to discount rate decreases and increases, respectively.

Substantially all of the funded status of pension and other benefits is recognized in the consolidated balance sheet in Noncurrent Employee Benefits, with the remainder recognized in Accrued expenses and other current liabilities and Other Assets.

Information for the Principal Plans and All Other Pension Plans

			Principal Plans												All Other Pension Plans												Total
			Year Ended December 31
			2023						2022						2023						2022						2023						2022
Projected benefit obligation (“PBO”)			$	2,123					$	2,089					$	346					$	352					$	2,469					$	2,441
Accumulated benefit obligation (“ABO”)			2,123						2,089						298						305						2,421						2,394
Fair value of plan assets			2,019						2,018						310						303						2,329						2,321

Approximately one-half of the PBO and fair value of plan assets for the Principal Plans relate to the U.S. qualified and nonqualified pension plans.

			49			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Information for Pension Plans with an ABO in Excess of Plan Assets

			December 31
			2023						2022
ABO			$	2,273					$	1,251
Fair value of plan assets			2,095						1,089

Information for Pension Plans with a PBO in Excess of Plan Assets

			December 31
			2023						2022
PBO			$	2,288					$	1,261
Fair value of plan assets			2,102						1,091

Components of Net Periodic Benefit Cost

			Pension Benefits																		Other Benefits
			Year Ended December 31
			2023						2022						2021						2023						2022						2021
Service cost			$	13					$	16					$	21					$	4					$	7					$	8
Interest cost			121						89						80						30						21						19
Expected return on plan assets(a)			(128)						(123)						(132)						—						—						—
Recognized net actuarial (gain) loss			39						34						37						(3)						1						1
Settlements and curtailments			35						52						89						—						—						—
Other			—						1						(5)						1						(1)						(2)
Net periodic benefit cost			$	80					$	69					$	90					$	32					$	28					$	26

(a)The expected return on plan assets is determined by multiplying the fair value of plan assets at the remeasurement date, typically the prior year-end adjusted for estimated current year cash benefit payments and contributions, by the expected long-term rate of return.

The components of net periodic benefit cost other than the service cost component are included in the line item Nonoperating expense in our consolidated income statement.

Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31

			Pension Benefits																								Other Benefits
			Projected 2024						2023						2022						2021						2023						2022						2021
Discount rate			4.89		%				5.19		%				2.71		%				1.98		%				5.92		%				3.15		%				2.69		%
Expected long-term return on plan assets			5.57		%				5.75		%				3.80		%				3.41		%				—						—						—
Rate of compensation increase			3.53		%				3.49		%				3.23		%				3.07		%				—						—						—

Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31

			Pension Benefits												Other Benefits
			2023						2022						2023						2022
Discount rate			4.89		%				5.18		%				5.66		%				5.92		%
Rate of compensation increase			3.53		%				3.49		%				—						—

			50			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Investment Strategies for the Principal Plans

Strategic asset allocation decisions are made considering several risk factors, including plan participants' retirement benefit security, the estimated payments of the associated liabilities, the plan funded status, and Kimberly-Clark's financial condition. The resulting strategic asset allocation is a diversified blend of equity and fixed income investments. Equity investments are typically diversified across geographies and market capitalization. Fixed income investments are diversified across multiple sectors including government issues and corporate debt instruments with a portfolio duration that is consistent with the estimated payment of the associated liability. Actual asset allocation is regularly reviewed and periodically rebalanced to the strategic allocation when considered appropriate. Our 2024 target plan asset allocation for the Principal Plans is approximately 85 percent fixed income securities and 15 percent equity securities.

The expected long-term rate of return is generally evaluated on an annual basis. In setting this assumption, we consider a number of factors including projected future returns by asset class relative to the current asset allocation. The weighted-average expected long-term rate of return on pension fund assets used to calculate pension expense for the Principal Plans was 6.05 percent in 2023, 3.55 percent in 2022 and 3.51 percent in 2021, and will be 5.73 percent in 2024.

Set forth below are the pension plan assets of the Principal Plans measured at fair value, by level in the fair-value hierarchy. More than 65 percent of the assets are held in pooled funds and are measured using a net asset value (or its equivalent). Accordingly, such assets do not meet the Level 1, Level 2, or Level 3 criteria of the fair value hierarchy.

			Fair Value Measurements at December 31, 2023
			Total Plan Assets						Assets at Quoted Prices in Active Markets for Identical Assets (Level 1)						Assets at Significant Observable Inputs (Level 2)						Assets at Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents
Held directly			$	34					$	23					$	11					$	—
Fixed Income
Held directly
U.S. government and municipals			98						97						1						—
U.S. corporate debt			203						—						203						—
Non-U.S. securitized			67						—						—						—
International bonds			38						—						38						—
Held through mutual and pooled funds measured at net asset value
U.S. government and municipals			85						—						—						—
U.S. corporate debt			408						—						—						—
International bonds			591						—						—						—
Equity
Held directly
U.S. equity			21						21						—						—
International equity			15						15						—						—
Held through mutual and pooled funds measured at net asset value
Non-U.S. equity			3						—						—						—
Global equity			224						—						—						—
Insurance Contracts			230						—						—						230
Other			2						2						—						—
Total Plan Assets			$	2,019					$	158					$	253					$	230

Futures contracts are used when appropriate to manage duration targets. As of December 31, 2023 and 2022, the U.S. plan held directly Treasury futures contracts with a total notional value of approximately $288 and $362, respectively, and an

			51			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

insignificant fair value. As of December 31, 2023 and 2022, the United Kingdom plan held through a pooled fund future contracts with a total notional value of approximately $417 and $524, and an insignificant fair value.

During 2023 and 2022, the plan assets did not include a significant amount of Kimberly-Clark common stock.

			Fair Value Measurements at December 31, 2022
			Total Plan Assets						Assets at Quoted Prices in Active Markets for Identical Assets (Level 1)						Assets at Significant Observable Inputs (Level 2)						Assets at Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents
Held directly			$	69					$	69					$	—					$	—
Held through mutual and pooled funds measured at net asset value			76						—						—						—
Fixed Income
Held directly
U.S. government and municipals			115						115						—						—
U.S. corporate debt			193						—						193						—
International bonds			33						—						33						—
Held through mutual and pooled funds measured at net asset value
U.S. government and municipals			71						—						—						—
U.S. corporate debt			419						—						—						—
International bonds			549						—						—						—
Equity
Held directly
U.S. equity			21						21						—						—
International equity			15						15						—						—
Held through mutual and pooled funds measured at net asset value
Non-U.S. equity			15						—						—						—
Global equity			221						—						—						—
Insurance Contracts			222						—						—						222
Other			(1)						(1)						—						—
Total Plan Assets			$	2,018					$	219					$	226					$	222

Inputs and valuation techniques used to measure the fair value of plan assets vary according to the type of security being valued. Substantially all of the equity securities held directly by the plans are actively traded and fair values are determined based on quoted market prices. Fair values of U.S. government securities are determined based on trading activity in the marketplace.

Fair values of U.S. corporate debt, U.S. municipals and international bonds are typically determined by reference to the values of similar securities traded in the marketplace and current interest rate levels. Multiple pricing services are typically employed to assist in determining these valuations.

Fair values of equity securities and fixed income securities held through units of pooled funds are based on net asset value of the units of the pooled fund determined by the fund manager. Pooled funds are similar in nature to retail mutual funds, but are typically more efficient for institutional investors. The fair value of pooled funds is determined by the value of the underlying assets held by the fund and the units outstanding.

Equity securities held directly by the pension trusts and those held through units in pooled funds are monitored as to issuer and industry. Except for U.S. Treasuries, concentrations of fixed income securities are similarly monitored for concentrations by issuer and industry. As of December 31, 2023, there were no significant concentrations of equity or debt securities in any single issuer or industry.

			52			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

No level 3 transfers (in or out) were made in 2023 or 2022. Fair values of insurance contracts are based on an evaluation of various factors, including purchase price.

We expect to contribute approximately $20 to our defined benefit pension plans in 2024. Over the next ten years, we expect that the following gross benefit payments will occur:

			Pension Benefits						Other Benefits
2024			$	182					$	56
2025			193						56
2026			191						56
2027			192						54
2028			185						52
2029-2033			918						227

Defined Contribution Pension Plans

Our 401(k) profit sharing plan and supplemental plan provide for a matching contribution of a U.S. employee's contributions and accruals, subject to predetermined limits, as well as a discretionary profit sharing contribution, in which contributions will be based on our profit performance. We also have defined contribution pension plans for certain employees outside the U.S. Costs charged to expense for our defined contribution pension plans were $185 in 2023, $132 in 2022, and $116 in 2021. Approximately 25 percent of these costs were for plans outside the U.S.

Note 9. Stockholders' Equity

The changes in the components of Accumulated Other Comprehensive Income ("AOCI") attributable to Kimberly-Clark, net of tax, are as follows:

						Unrealized Translation						Defined Benefit Pension Plans						Other Postretirement Benefit Plans						Cash Flow Hedges and Other
Balance as of December 31, 2021						$	(2,422)					$	(803)					$	(34)					$	20
Other comprehensive income (loss) before reclassifications						(347)						(51)						86						(139)
(Income) loss reclassified from AOCI						—						65			(a)			—			(a)			(44)
Net current period other comprehensive income (loss)						(347)						14						86						(183)
Balance as of December 31, 2022						(2,769)						(789)						52						(163)
Other comprehensive income (loss) before reclassifications						84						(57)						(9)						(153)
(Income) loss reclassified from AOCI						7						55			(a)			(4)			(a)			164
Net current period other comprehensive income (loss)						91						(2)						(13)						11
Balance as of December 31, 2023						$	(2,678)					$	(791)					$	39					$	(152)

(a) Included in computation of net periodic pension and other postretirement benefits costs (see Note 8).

Included in the above defined benefit pension plans and other postretirement benefit plans balances as of December 31, 2023 is $750 and $2 of unrecognized net actuarial loss and unrecognized net prior service cost, respectively.

			53			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

The changes in the components of AOCI attributable to Kimberly-Clark, including the tax effect, are as follows:

			Year Ended December 31
			2023						2022						2021
Unrealized translation			$	84					$	(324)					$	(248)
Tax effect			7						(23)						(17)
			91						(347)						(265)
Defined benefit pension plans
Unrecognized net actuarial loss and transition amount
Funded status recognition			(49)						(109)						16
Amortization			39						34						37
Settlements and curtailments			35						52						91
Currency and other			(23)						36						10
			2						13						154
Unrecognized prior service cost/credit
Funded status recognition			3						2						(2)
Amortization			—						—						(4)
Curtailments			—						—						(3)
Currency and other			—						—						—
			3						2						(9)
Tax effect			(7)						(1)						(36)
			(2)						14						109
Other postretirement benefit plans
Unrecognized net actuarial loss and transition amount and other			(18)						113						12
Tax effect			5						(27)						(6)
			(13)						86						6
Cash flow hedges and other
Recognition of effective portion of hedges			(178)						(165)						70
Amortization			208						(58)						39
Currency and other			(14)						(22)						(4)
Tax effect			(5)						62						(22)
			11						(183)						83
Change in AOCI			$	87					$	(430)					$	(67)

Amounts are reclassified from AOCI into Cost of products sold, Nonoperating expense, Interest expense, or Other (income) and expense, net, as applicable, in the consolidated income statement.

Net unrealized currency gains or losses resulting from the translation of assets and liabilities of foreign subsidiaries, except those in highly inflationary economies, are recorded in AOCI. For these operations, changes in exchange rates generally do not affect cash flows; therefore, unrealized translation adjustments are recorded in AOCI rather than net income. Upon sale or substantially complete liquidation of any of these subsidiaries, the applicable unrealized translation adjustment would be removed from AOCI and reported as part of the gain or loss on the sale or liquidation. The change in unrealized translation in 2023 is primarily due to the strengthening of various foreign currencies versus the U.S. dollar. Also included in unrealized translation amounts are the effects of foreign exchange rate changes on intercompany balances of a long-term investment nature and transactions designated as hedges of net foreign investments.

			54			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Note 10. Leases and Commitments

We have entered into leases for certain facilities, vehicles, material handling and other equipment. Our leases have remaining contractual terms up to 95 years, some of which include options to extend the leases for up to 99 years, and some of which include options to terminate the leases within 1 year. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Our lease costs are primarily related to facility leases for inventory warehousing and administration offices.

Lease Expense

						Year Ended December 31
						2023												2022						2021						Income Statement Classification
Operating lease expense						$	147											$	145					$	157					Cost of products sold, Marketing, research and general expenses
Finance lease expense:
Amortization of lease assets						16												15						13						Cost of products sold
Interest on lease liabilities						2												1						2						Interest expense
Total finance lease expense						18												16						15
Variable lease expense(a)						253												242						219						Cost of products sold, Marketing, research and general expenses
Total lease expense						$	418											$	403					$	391

(a) Includes short-term leases, which are immaterial.

Lease Assets and Liabilities

						December 31
						2023						2022						Balance Sheet Classification
Assets
Operating lease						$	450					$	475					Other Assets
Finance lease						79						71						Property, Plant and Equipment, Net
Total lease assets						$	529					$	546
Liabilities
Current:
Operating lease						$	130					$	127					Accrued expenses and other current liabilities
Finance lease						14						11						Debt payable within one year
Noncurrent:
Operating lease						346						377						Other Liabilities
Finance lease						57						49						Long-Term Debt
Total lease liabilities						$	547					$	564

As of December 31, 2023 and 2022, accumulated amortization of finance lease assets was $37 and $32, respectively.

			55			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Maturity of Lease Liabilities

						December 31, 2023
						Operating Leases						Finance Leases						Total
2024						$	145					$	16					$	161
2025						128						14						142
2026						110						11						121
2027						64						9						73
2028						27						7						34
Thereafter						45						25						70
Total lease payments						519						82						601
Less imputed interest						43						10						53
Present value of lease liabilities						$	476					$	72					$	548

As of December 31, 2023, our operating leases have a weighted-average remaining lease term of 4 years and a weighted-average discount rate of 4 percent and our finance leases have a weighted-average remaining lease term of 7 years and a weighted-average discount rate of 4 percent.

Supplemental Information Related to Leases

						December 31
						2023						2022						2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating leases						$	147					$	148					$	155
Finance leases						17						11						13
Lease assets obtained in exchange for new lease obligations:
Operating leases						66						57						34
Finance leases						24						6						56
Other non-cash modifications to lease assets:
Operating leases						39						72						61

We have entered into long-term contracts for the purchase of superabsorbent materials, pulp and certain utilities. Commitments under these contracts based on current prices are $1,528 in 2024, $1,029 in 2025, $227 in 2026, $227 in 2027, $13 in 2028, and $18 beyond the year 2028.

Although we are primarily liable for payments on the above-mentioned leases and purchase commitments, our exposure to losses, if any, under these arrangements is not material.

Note 11. Legal Matters

We routinely are involved in legal proceedings, claims, disputes, tax matters, regulatory matters and governmental inspections or investigations arising in the ordinary course of or incidental to our business, including those noted below in this section. We record accruals in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. For the matters we disclose that do not include an estimate of the amount of loss or range of losses, such an estimate is not possible or is immaterial, and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies, unless disclosed below. At present we believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position, results of operations or cash flows. However, legal proceedings and government investigations are subject to inherent uncertainties, and unfavorable rulings or other events could occur. Unfavorable resolutions could involve substantial monetary damages. In addition, in matters for which conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in

			56			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

particular ways, precluding particular business practices or requiring other remedies. An unfavorable outcome might result in a material adverse impact on our business, results of operations or financial position.

We are party to certain legal proceedings relating to our former health care business, Avanos Medical, Inc. ("Avanos", previously Halyard Health, Inc.), which we spun-off on October 31, 2014, including a qui tam matter and certain subpoena and document requests from the federal government. The subpoena and document requests include subpoenas from the United States Department of Justice ("DOJ") concerning allegations of potential criminal and civil violations of federal laws, including the Food, Drug, and Cosmetic Act, in connection with the manufacturing, marketing and sale of surgical gowns by our former health care business. We continue to cooperate in this investigation and are making efforts to reach a potential resolution with the DOJ.

We are subject to federal, state and local environmental protection laws and regulations with respect to our business operations and are operating in compliance with, or taking action aimed at ensuring compliance with, these laws and regulations. We have been named a potentially responsible party under the provisions of the U.S. federal Comprehensive Environmental Response, Compensation and Liability Act, or analogous state statutes, at a number of sites where hazardous substances are present. None of our compliance obligations with environmental protection laws and regulations, individually or in the aggregate, is expected to have a material adverse effect on our business, liquidity, financial condition or results of operations.

Note 12. Objectives and Strategies for Using Derivatives

As a multinational enterprise, we are exposed to financial risks, such as changes in foreign currency exchange rates, interest rates, and commodity prices. We employ a number of practices to manage these risks, including operating and financing activities and, where appropriate, the use of derivative instruments.

At December 31, 2023 and 2022, derivative assets were $70 and $99, respectively, and derivative liabilities were $259 and $318, respectively, primarily comprised of foreign currency exchange and commodity price contracts. Derivative assets are recorded in Other current assets or Other Assets, as appropriate, and derivative liabilities are recorded in Accrued expenses and other current liabilities or Other Liabilities, as appropriate.

Foreign Currency Exchange Rate Risk

Translation adjustments result from translating foreign entities' financial statements into U.S. dollars from their functional currencies. The risk to any particular entity's net assets is reduced to the extent that the entity is financed with local currency borrowings. A portion of our balance sheet translation exposure for certain affiliates, which results from changes in translation rates between the affiliates’ functional currencies and the U.S. dollar, is hedged with cross-currency swap contracts and certain foreign denominated debt which are designated as net investment hedges. The foreign currency exposure on certain non-functional currency denominated monetary assets and liabilities, primarily intercompany loans and accounts payable, is hedged with primarily undesignated derivative instruments.

Derivative instruments are entered into to hedge a portion of forecasted cash flows denominated in foreign currencies for non-U.S. operations' purchases of raw materials, which are priced in U.S. dollars, and imports of intercompany finished goods and work-in-process priced predominantly in U.S. dollars and euros. The derivative instruments used to manage these exposures are designated as cash flow hedges.

Interest Rate Risk

Interest rate risk is managed using a portfolio of variable and fixed-rate debt composed of short and long-term instruments. Interest rate swap contracts may be used to facilitate the maintenance of the desired ratio of variable and fixed-rate debt and are designated as fair value hedges. From time to time, we also hedge the anticipated issuance of fixed-rate debt, and these contracts are designated as cash flow hedges.

Commodity Price Risk

We use derivative instruments, such as commodity forward and price swap contracts, to hedge a portion of our exposure to market risk arising from changes in prices of certain commodities. These derivatives are designated as cash flow hedges of specific quantities of the underlying commodity expected to be purchased in future months. In addition, we utilize negotiated contracts of varying durations along with strategic pricing mechanisms to manage volatility for a portion of our commodity costs.

			57			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Fair Value Hedges

Derivative instruments that are designated and qualify as fair value hedges are predominantly used to manage interest rate risk. The fair values of these derivative instruments are recorded as an asset or liability, as appropriate, with the offset recorded in current Interest expense. The offset to the change in fair values of the related debt is also recorded in Interest expense. Any realized gain or loss on the derivatives that hedge interest rate risk is amortized to Interest expense over the life of the related debt. As of December 31, 2023, the aggregate notional values and carrying values of debt subject to outstanding interest rate contracts designated as fair value hedges were $525 and $482, respectively. For years ended December 31, 2023, 2022 and 2021, gains or losses recognized in Interest expense for interest rate swaps were not significant.

Cash Flow Hedges

For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is initially recorded in AOCI, net of related income taxes, and recognized in earnings in the same income statement line and period that the hedged exposure affects earnings. As of December 31, 2023, outstanding commodity forward and price swap contracts were in place to hedge a portion of our estimated requirements of the related underlying commodities in 2024 and future periods. As of December 31, 2023, the aggregate notional value of outstanding foreign exchange derivative contracts designated as cash flow hedges was $3.0 billion. For years ended December 31, 2023, 2022 and 2021, no significant gains or losses were reclassified into Interest expense, Cost of products sold or Other (income) and expense, net as a result of the discontinuance of cash flow hedges due to the original forecasted transaction no longer being probable of occurring. At December 31, 2023, amounts to be reclassified from AOCI into Interest expense, Cost of products sold or Other (income), net during the next twelve months are not expected to be material. The maximum maturity of cash flow hedges in place at December 31, 2023 is December 2026.

Net Investment Hedges

For derivative instruments that are designated and qualify as net investment hedges, the aggregate notional value was $1.6 billion at December 31, 2023. We exclude the interest accruals on cross-currency swap contracts and the forward points on foreign exchange forward contracts from the assessment and measurement of hedge effectiveness. We recognize the interest accruals on cross-currency swap contracts in earnings within Interest expense. We amortize the forward points on foreign exchange contracts into earnings within Interest expense over the life of the hedging relationship. Changes in fair value of net investment hedges are recorded in AOCI and offset the change in the value of the net investment being hedged. For the year ended December 31, 2023, unrealized loss of $43 related to net investment hedge fair value changes were recorded in AOCI and no significant amounts were reclassified from AOCI to Interest expense.

No significant amounts were excluded from the assessment of net investment, fair value or cash flow hedge effectiveness as of December 31, 2023.

Undesignated Hedging Instruments

Gains or losses on undesignated foreign exchange hedging instruments are immediately recognized in Other (income) and expense, net. Gain of $2, a loss of $29 and a loss of $5 were recorded in the years ending December 31, 2023, 2022 and 2021, respectively. The effect on earnings from the use of these non-designated derivatives is substantially neutralized by the transactional gains and losses recorded on the underlying assets and liabilities. At December 31, 2023, the notional amount of these undesignated derivative instruments was approximately $2.8 billion.

			58			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Note 13. Income Taxes

An analysis of the Provision for income taxes follows:

			Year Ended December 31
			2023						2022						2021
Current income taxes
United States			$	370					$	248					$	179
State			54						16						35
Other countries			351						288						335
Total			775						552						549
Deferred income taxes
United States			(133)						(27)						(18)
State			(28)						(1)						(1)
Other countries			(161)						(29)						(51)
Total			(322)						(57)						(70)
Total provision for income taxes			$	453					$	495					$	479

The components of Income Before Income Taxes and Equity Interests follow:

			Year Ended December 31
			2023						2022						2021
United States			$	2,004					$	1,802					$	1,580
Other countries			17						538						645
Total income before income taxes and equity interests			$	2,021					$	2,340					$	2,225

			59			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Deferred income tax assets and liabilities are comprised of the following:

						December 31
						2023						2022
Deferred tax assets
Pension and other postretirement benefits						$	182					$	179
Tax credits and loss carryforwards						668						534
Capitalized research costs						224						118
Lease liability						137						116
Derivatives						80						74
Other						357						409
						1,648						1,430
Valuation allowances						(302)						(299)
Total deferred tax assets						1,346						1,131
Deferred tax liabilities
Property, plant and equipment, net						943						940
Investments in subsidiaries						110						101
Goodwill						80						76
Intangible assets						12						153
Lease asset						128						111
Other						177						153
Total deferred tax liabilities						1,450						1,534
Net deferred tax assets (liabilities)						$	(104)					$	(403)

Valuation allowances at the end of 2023 primarily relate to tax credits, capital loss carryforwards, and income tax loss carryforwards of $1.5 billion. If these items are not utilized against taxable income, $463 of the income tax loss carryforwards will expire from 2024 through 2043. The remaining $1.0 billion has no expiration date.

Realization of income tax loss carryforwards is dependent on generating sufficient taxable income prior to expiration of these carryforwards. Although realization is not assured, we believe it is more likely than not that all of the deferred tax assets, net of applicable valuation allowances, will be realized. The amount of the deferred tax assets considered realizable could be reduced or increased due to changes in the tax environment or if estimates of future taxable income change during the carryforward period.

			60			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Presented below is a reconciliation of the Provision for income taxes computed at the U.S. federal statutory tax rate to the actual effective tax rate:

			Year Ended December 31
			2023						2022						2021
U.S. statutory rate applied to income before income taxes and equity interests			21.0		%				21.0		%				21.0		%
State income taxes, net of federal tax benefit			1.0						0.5						1.2
Routine tax incentives			(3.9)						(3.5)						(5.8)
Net nondeductible expenses			2.4						1.4						1.5
Net tax (benefit) cost on foreign income			1.1						2.4						2.4
Valuation allowance			2.8						1.3						2.4
Tax effects of the impairment of intangible assets			(1.4)						—						—
Other - net(a)			(0.6)						(1.9)						(1.2)
Effective income tax rate			22.4		%				21.2		%				21.5		%

(a) Other - net is composed of numerous items, none of which is greater than 1.05 percent of income before income taxes and equity interests.

As of December 31, 2023, we have accumulated undistributed earnings generated by our foreign subsidiaries of approximately $7.2 billion. Earnings of $3.3 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 $0.8 billion of earnings of foreign consolidated subsidiaries expected to be repatriated. We do not intend to distribute the remaining $2.5 billion of previously-taxed foreign earnings and therefore have not recorded deferred taxes for foreign and U.S. state income taxes on such earnings.

We consider any excess of the amount for financial reporting over 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 $2.5 billion of previously-taxed foreign earnings is not practicable.

Presented below is a reconciliation of the beginning and ending amounts of unrecognized income tax benefits:

			2023						2022						2021
Balance at January 1			$	488					$	506					$	497
Gross increases for tax positions of prior years			38						22						62
Gross decreases for tax positions of prior years			(13)						(38)						(37)
Gross increases for tax positions of the current year			109						36						42
Settlements			(26)						(21)						(39)
Other			(8)						(17)						(19)
Balance at December 31			$	588					$	488					$	506

Of the amounts recorded as unrecognized income tax benefits at December 31, 2023, $520 would reduce our effective tax rate if recognized.

We recognize accrued interest and penalties related to unrecognized income tax benefits in Provision for income taxes. During each of the three years ended December 31, 2023, the net impact of interest and penalties was not significant. Total accrued penalties and net accrued interest was $45 and $35 at December 31, 2023 and 2022, respectively.

It is reasonably possible that a number of uncertainties could be resolved within the next 12 months. The aggregate resolution of the uncertainties could be up to $190, while none of the uncertainties is individually significant. Resolution of these matters is not expected to have a material effect on our financial condition, results of operations or liquidity.

			61			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

As of December 31, 2023, the following tax years remain subject to examination for the major jurisdictions where we conduct business:

Jurisdiction			Years
United States			2016			to			2023
United Kingdom			2021			to			2023
Brazil			2019			to			2023
China			2014			to			2023
South Korea			2020			to			2023

Our originally filed U.S. federal income tax returns have been audited through 2015; however, our amended U.S. federal income tax returns are subject to audit for 2013-2018.

State income tax returns are generally subject to examination for a period of 3 to 5 years after filing of the respective return. The state effect of any changes to filed federal positions remains subject to examination by various states for a period of up to two years after formal notification to the states. We have various state income tax return positions in the process of examination, administrative appeals or litigation.

The Brazilian tax authority, Secretaria da Receita Federal do Brasil ("RFB"), concluded an audit for the taxable periods from 2008-2013. This audit included a review of our determinations of amortization of certain goodwill arising from prior acquisitions in Brazil, and the RFB has proposed adjustments that effectively eliminate the goodwill amortization benefits related to these transactions. Administrative appeals have been exhausted with a partial favorable decision for our position, and the remaining dispute is in the judicial phase. Based upon the matters that remain in dispute, the amount of the proposed tax and penalty adjustments is approximately $50 as of December 31, 2023 (translated at the December 31, 2023 currency exchange rate). The amount ultimately in dispute will be significantly greater because of interest. The first instance judge has issued a decision in our favor, finding that our amortization of the goodwill at issue was valid; however, an appeal is pending and final resolution of this matter is expected to take a number of years.

As part of the tax audit of our U.S. federal income tax returns for the taxable years ended December 31, 2017 and 2018, the U.S. Internal Revenue Service proposed an adjustment that would increase the amount of the one-time transition tax on certain undistributed earnings of foreign subsidiaries owed by us. We believe we have adequate reserves and meritorious defenses and intend to vigorously defend against the proposed adjustment; however, it is expected to take a number of years to reach resolution of this matter.

Note 14. Earnings Per Share ("EPS")

There are no adjustments required to be made to net income for purposes of computing basic and diluted EPS. The dilutive effect of stock options and other stock-based awards is reflected in diluted EPS by application of the treasury stock method. The average number of common shares outstanding is reconciled to those used in the basic and diluted EPS computations as follows:

(Millions of shares)						2023						2022						2021
Basic						337.8						337.4						337.3
Dilutive effect of stock options and restricted share unit awards						1.0						0.9						1.5
Diluted						338.8						338.3						338.8

Options outstanding that were not included in the computation of diluted EPS because their exercise price was greater than the average market price of the common shares were insignificant. The number of common shares outstanding as of December 31, 2023, 2022 and 2021 was 337.0 million, 337.5 million and 336.8 million, respectively.

Note 15. Business Segment Information

We are organized into operating segments based on product groupings. These operating segments have been aggregated into three reportable global business segments: Personal Care, Consumer Tissue and K-C Professional. The reportable segments were determined in accordance with how our chief operating decision maker and our executive managers develop and execute

			62			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

global strategies to drive growth and profitability. These strategies include global plans for branding and product positioning, technology, research and development programs, cost reductions including supply chain management, and capacity and capital investments for each of these businesses. Segment management is evaluated on several factors, including operating profit. Segment operating profit excludes Other (income) and expense, net and income and expense not associated with ongoing operations of the business segments.

The principal sources of revenue in each global business segment are described below:

• Personal Care brands offer our consumers a trusted partner in caring for themselves and their families by delivering confidence, protection and discretion through a wide variety of innovative solutions and products such as disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, reusable underwear and other related products. Products in this segment are sold under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Sweety, Kotex, U by Kotex, Intimus, Thinx, Poise, Depend, Plenitud, Softex and other brand names.

• Consumer Tissue offers a wide variety of innovative solutions and trusted brands that responsibly improve everyday living for families around the world. Products in this segment include facial and bathroom tissue, paper towels, napkins and related products, and are sold under the Kleenex, Scott, Cottonelle, Andrex, Viva, Scottex and other brand names.

• K-C Professional partners with businesses to create Exceptional Workplaces, helping to make them healthier, safer and more productive through a range of solutions and supporting products such as wipers, tissue, towels, personal protective gear, soaps and sanitizers. Our brands, including Kleenex, Scott, WypAll, Kimtech and KleenGuard are well known for quality and trusted to help people around the world work better.

Net sales to Walmart Inc. as a percent of our consolidated net sales were approximately 13 percent in 2023, and 2022 and 14 percent in 2021. Net sales to Walmart Inc. were primarily in the Personal Care and Consumer Tissue segments.

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Information concerning consolidated operations by business segment is presented in the following tables:

Consolidated Operations by Business Segment

			Year Ended December 31
			2023						2022						2021
NET SALES**(a)**
Personal Care			$	10,691					$	10,622					$	10,267
Consumer Tissue			6,290						6,243						6,034
K-C Professional			3,404						3,256						3,072
Corporate & Other			46						54						67
TOTAL NET SALES			$	20,431					$	20,175					$	19,440
OPERATING PROFIT**(b)**
Personal Care			$	1,890					$	1,787					$	1,856
Consumer Tissue			976						806						888
K-C Professional			665						457						404
Corporate & Other(c)			(1,118)						(412)						(559)
Other (income) and expense, net(d)			69						(43)						28
TOTAL OPERATING PROFIT			$	2,344					$	2,681					$	2,561

(a)Net sales in the U.S. to third parties totaled $10,362, $9,848 and $9,285 in 2023, 2022 and 2021, respectively. No other individual country's net sales exceeds 10 percent of total net sales.

(b) Segment operating profit excludes Other (income) and expense, net and income and expenses not associated with the business segments.

(c) Corporate & Other in 2023 includes divestiture-related costs associated with the sale of our Brazil tissue and K-C Professional business of $30 and the charges related to the impairment of intangible assets of $658. In 2022, it includes transaction and integration costs of $21 related to the acquisition of a controlling interest in Thinx, and in 2021, it includes charges of $265 related to the 2018 Global Restructuring Program. Restructuring charges in 2021 related to the Personal Care, Consumer Tissue and K-C Professional business segments were $104, $118 and $40, respectively.

(d) Other (income) and expense, net in 2023 includes the gain of $74 related to the sale of our Brazil tissue and K-C Professional business, and in 2022 includes the non-cash, non-recurring gain of $85 related to the acquisition of a controlling interest in Thinx.

			Personal Care						Consumer Tissue						K-C Professional						Corporate & Other						Total
Depreciation and Amortization
2023			$	387					$	236					$	127					$	3					$	753
2022			375						251						125						3						754
2021			355						291						116						4						766
Capital Spending
2023			342						285						123						16						766
2022			442						280						142						12						876
2021			536						303						157						11						1,007
Assets
2023			7,999						4,935						2,507						1,903						17,344
2022			9,086						5,048						2,675						1,161						17,970
2021			8,890						5,083						2,650						1,214						17,837

			64			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Sales of Principal Products

(Billions of dollars)						2023						2022						2021
Baby and child care products						$	7.1					$	7.2					$	7.2
Consumer tissue products						6.3						6.2						6.0
Away-from-home professional products						3.4						3.3						3.1
All other						3.6						3.5						3.1
Consolidated						$	20.4					$	20.2					$	19.4

Note 16. Supplemental Data

Supplemental Income Statement Data

			Year Ended December 31
			2023						2022						2021
Advertising expense			$	1,075					$	901					$	893
Research expense			312						292						269

Equity Companies' Data

			Net Sales						Gross Profit						Operating Profit						Net Income						Corporation's Share of Net Income
2023			$	3,135					$	1,003					$	683					$	410					$	196
2022			2,690						707						438						240						116
2021			2,501						696						398						205						98
			Current Assets						Noncurrent Assets						Current Liabilities						Noncurrent Liabilities						Stockholders' Equity
2023			$	1,974					$	1,362					$	1,175					$	1,687					$	474
2022			1,585						1,303						814						1,751						323
2021			1,283						1,219						809						1,334						360

Equity companies are principally engaged in operations in the personal care and consumer tissue businesses. At December 31, 2023, our ownership interest in Kimberly-Clark de Mexico, S.A.B. de C.V. and subsidiaries ("KCM") was 47.9 percent. KCM is partially owned by the public, and its stock is publicly traded in Mexico. At December 31, 2023, our investment in this equity company was $244, and the estimated fair value of the investment was $3.0 billion based on the market price of publicly traded shares. Our other equity ownership interests are not significant to our consolidated balance sheet or financial results.

At December 31, 2023, undistributed net income of equity companies included in consolidated retained earnings was $1.1 billion.

			65			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

Supplemental Balance Sheet Data

			December 31
Summary of Accounts Receivable, Net			2023						2022
From customers			$	2,063					$	2,155
Other			150						189
Less allowance for doubtful accounts and sales discounts			(78)						(64)
Total			$	2,135					$	2,280

			December 31
			2023																		2022
Summary of Inventories by Major Class			LIFO						Non- LIFO						Total						LIFO						Non- LIFO						Total
Raw materials			$	121					$	292					$	413					$	147					$	425					$	572
Work in process			116						95						211						139						107						246
Finished goods			520						692						1,212						518						870						1,388
Supplies and other			—						311						311						—						302						302
			757						1,390						2,147						804						1,704						2,508
Excess of FIFO or weighted-average cost over LIFO cost			(192)						—						(192)						(239)						—						(239)
Total			$	565					$	1,390					$	1,955					$	565					$	1,704					$	2,269

Inventories are valued at the lower of cost or net realizable value, determined on the FIFO or weighted-average cost methods, and at the lower of cost or market, determined on the LIFO cost method.

			December 31
Summary of Property, Plant and Equipment, Net			2023						2022
Land			$	149					$	156
Buildings			3,067						3,062
Machinery and equipment			15,132						14,655
Construction in progress			803						676
			19,151						18,549
Less accumulated depreciation			(11,238)						(10,664)
Total			$	7,913					$	7,885

Property, plant and equipment, net in the U.S. as of December 31, 2023 and 2022 was $4,356 and $4,273, respectively.

			66			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

			December 31
Summary of Accrued Expenses and Other Current Liabilities			2023						2022
Accrued advertising and promotion			$	524					$	455
Accrued salaries and wages			518						421
Accrued rebates			268						285
Accrued taxes - income and other			294						318
Operating leases			130						127
Accrued interest			88						82
Derivative liabilities			139						200
Other			355						401
Total			$	2,316					$	2,289

Supplemental Cash Flow Statement Data

Summary of Cash Flow Effects of Operating Working Capital			Year Ended December 31
2023						2022						2021
Accounts receivable			$	127					$	(151)					$	(37)
Inventories			290						(76)						(417)
Trade accounts payable			(109)						109						627
Accrued expenses			125						92						(124)
Accrued income taxes			122						20						(4)
Derivatives			(15)						9						30
Currency and other			42						(20)						(29)
Total			$	582					$	(17)					$	46

			Year Ended December 31
Other Cash Flow Data			2023						2022						2021
Interest paid			$	277					$	270					$	243
Income taxes paid			648						468						492

Supplier Finance Program

We have a supplier finance program managed through two global financial institutions under which we agree to pay the financial institutions the stated amount of confirmed invoices from our participating suppliers on the invoice due date. We, or the global financial institutions, may terminate our agreements at any time upon 30 days written notice. The global financial institutions may terminate our agreements at any time upon three days written notice in the event there are insufficient funds available for disbursement. We do not provide any forms of guarantees under these agreements. Supplier participation in the program is solely up to the supplier, and the participating suppliers negotiate their arrangements directly with the global financial institutions. We have no economic interest in a supplier’s decision to participate in the program, and their participation has no bearing on our payment terms or amounts due. The payment terms that we have with our suppliers under this program generally range from 75 to 180 days and are considered commercially reasonable. The outstanding amount related to the suppliers participating in this program was $1.0 billion as of December 31, 2023 and 2022, and was recorded within Trade accounts payable.

			67			KIMBERLY-CLARK CORPORATION - 2023 Annual Report

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Kimberly-Clark Corporation:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Kimberly-Clark Corporation and subsidiaries (the "Corporation") as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the financial statement schedule listed in the Table of Contents at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Corporation as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Corporation's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 8, 2024, expressed an unqualified opinion on the Corporation's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on the Corporation's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sales Incentives and Trade Promotion Allowances —Refer to Note 1 to the financial statements

Critical Audit Matter Description

The Corporation utilizes various trade promotion programs globally. The cost of promotion activities is classified as a reduction in sales revenue and can result in a period of time between the date the customer earns a promotion and the date the customer claims the promotion. The Corporation records an accrual for estimated promotions using customer sales associated with valid promotion events, actual promotion claims, and forecasted information of amounts earned by the customer but not yet claimed.

We identified trade promotions and the related accrual as a critical audit matter because of the complexity and volume of the Corporation’s processes related to trade promotion programs and the subjectivity of estimating future customer claims. This required an extensive audit effort due to the complexity and volume of the trade promotion programs and information systems utilized globally as well as the subjectivity of estimating future customer claims related to the trade promotion accrual.

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How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the reduction in revenue associated with trade promotions and the related accrual included the following, among others:

• With the assistance of our IT specialists, we:

–Identified the significant systems used to process trade promotion transactions and tested the general IT controls over each of these systems, including testing of user access controls, change management controls, and IT operations controls

–Tested the effectiveness of automated controls over revenue streams, including those over the evaluation of the accuracy and completeness of trade promotions

• We tested the effectiveness of controls over the trade promotions and the related accrual, including those over the quantity of customer sales associated with valid promotion events and the estimated future promotion claims associated with the trade accrual.

• We evaluated trade promotion transactions using either analytical procedures or by evaluating individual transactions. When analytical procedures were performed, we developed an expectation for reduction in revenue associated with trade promotions based on the relationship with gross sales, among other factors, and compared to the recorded amount. When individual promotion transactions were evaluated, we obtained evidence of the promotion agreement with the customer and the amounts of the promotions earned.

• We evaluated management’s ability to estimate future promotion claims by comparing actual promotion claims to management’s historical estimates.

• We evaluated the reasonableness of management’s estimate of future promotion claims by testing the underlying data related to (1) customer sales associated with valid promotion events, (2) actual promotion claims, and (3) forecasted information.

/s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Dallas, Texas
February 8, 2024

We have served as the Corporation’s auditor since 1928.

			69			KIMBERLY-CLARK CORPORATION - 2023 Annual Report