Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

						Year Ended December 31
(In millions, except per share amounts)						2025						2024						2023
Net Sales						$	16,447					$	16,805					$	17,146
Cost of products sold						10,524						10,516						10,877
Gross Profit						5,923						6,289						6,269
Marketing, research and general expenses						3,528						3,930						3,615
Impairment of intangible assets						—						97						658
Other (income) and expense, net						44						(438)						68
Operating Profit						2,351						2,700						1,928
Nonoperating expense						(67)						(60)						(95)
Interest income						24						48						66
Interest expense						(256)						(270)						(293)
Income from Continuing Operations Before Income Taxes and Equity Interests						2,052						2,418						1,606
Provision for income taxes						(599)						(442)						(343)
Income from Continuing Operations Before Equity Interests						1,453						1,976						1,263
Share of net income of equity companies						196						216						196
Income from Continuing Operations						1,649						2,192						1,459
Income from Discontinued Operations, Net of Income Taxes						400						386						305
Net Income						2,049						2,578						1,764
Net income attributable to noncontrolling interests						(28)						(33)						—
Net Income Attributable to Kimberly-Clark Corporation						$	2,021					$	2,545					$	1,764
Per Share Basis
Net Income Attributable to Kimberly-Clark Corporation
Basic:
Continuing operations						$	4.88					$	6.43					$	4.32
Discontinued operations						1.21						1.15						0.90
Basic Earnings per Share						$	6.09					$	7.58					$	5.22
Diluted:
Continuing operations						$	4.86					$	6.41					$	4.31
Discontinued operations						1.21						1.14						0.90
Diluted Earnings per Share						$	6.07					$	7.55					$	5.21

See Notes to the Consolidated Financial Statements.

			42			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

						Year Ended December 31
(In millions)						2025						2024						2023
Net Income						$	2,049					$	2,578					$	1,764
Other Comprehensive Income (Loss), Net of Tax
Unrealized currency translation adjustments						398						(408)						89
Employee postretirement benefits						16						24						(15)
Cash flow hedges						(92)						188						12
Total Other Comprehensive Income (Loss), Net of Tax						322						(196)						86
Comprehensive Income						2,371						2,382						1,850
Comprehensive (income) loss attributable to noncontrolling interests						(28)						(21)						1
Comprehensive Income Attributable to Kimberly-Clark Corporation						$	2,343					$	2,361					$	1,851

See Notes to the Consolidated Financial Statements.

			43			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

						December 31
(In millions, except par value)						2025						2024
ASSETS
Current Assets
Cash and cash equivalents						$	688					$	1,010
Accounts receivable, net						1,892						1,728
Inventories						1,475						1,452
Other current assets						535						694
Current assets of discontinued operations						720						696
Total Current Assets						5,310						5,580
Property, Plant and Equipment, Net						6,775						6,284
Investments in Equity Companies						330						314
Goodwill						1,839						1,796
Other Intangible Assets, Net						77						80
Other Assets						1,062						984
Non-current Assets of Discontinued Operations						1,705						1,508
TOTAL ASSETS						$	17,098					$	16,546
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Debt payable within one year						$	694					$	564
Trade accounts payable						3,388						3,264
Accrued expenses and other current liabilities						1,888						2,091
Dividends payable						415						402
Current liabilities of discontinued operations						740						683
Total Current Liabilities						7,125						7,004
Long-Term Debt						6,474						6,854
Non-current Employee Benefits						605						628
Deferred Income Taxes						445						300
Other Liabilities						646						609
Non-current Liabilities of Discontinued Operations						151						139
Redeemable Preferred Securities of Subsidiaries						22						37
Stockholders' Equity
Kimberly-Clark Corporation
Preferred stock - no par value - authorized 20.0 million shares, none issued						—						—
Common stock - $1.25 par value - authorized 1,200.0 million shares;issued 378.6 million shares as of December 31, 2025 and 2024						473						473
Additional paid-in capital						849						862
Common stock held in treasury, at cost - 46.7 and 46.8 million shares as of December 31, 2025 and 2024, respectively						(5,987)						(5,986)
Retained earnings						9,611						9,257
Accumulated other comprehensive income (loss)						(3,444)						(3,766)
Total Kimberly-Clark Corporation Stockholders' Equity						1,502						840
Noncontrolling Interests						128						135
Total Stockholders' Equity						1,630						975
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY						$	17,098					$	16,546

See Notes to the Consolidated Financial Statements.

			44			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In millions, except per share amounts. Shares in thousands)						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 as of December 31, 2022						378,597						$	473					$	679					41,135						$	(5,137)					$	8,201					$	(3,669)					$	153					$	700
Net income in stockholders' equity(a)						—						—						—						—						—						1,764						—						37						1,801
Other comprehensive income, net of tax(a)						—						—						—						—						—						—						87						(3)						84
Stock-based awards exercised or vested						—						—						(70)						(1,327)						140						—						—						—						70
Repurchases of common stock						—						—						—						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 as of December 31, 2023						378,597						473						878						41,599						(5,222)						8,368						(3,582)						153						1,068
Net income in stockholders' equity(a)						—						—						—						—						—						2,545						—						31						2,576
Other comprehensive income, net of tax(a)						—						—						—						—						—						—						(184)						(12)						(196)
Stock-based awards exercised or vested						—						—						(155)						(2,027)						235						—						—						—						80
Repurchases of common stock						—						—						—						7,226						(1,000)						—						—						—						(1,000)
Recognition of stock-based compensation						—						—						128						—						—						—						—						—						128
Dividends declared ($4.88 per share)						—						—						—						—						—						(1,636)						—						(35)						(1,671)
Other						—						—						11						—						1						(20)						—						(2)						(10)
Balance as of December 31, 2024						378,597						473						862						46,798						(5,986)						9,257						(3,766)						135						975
Net income in stockholders' equity(a)						—						—						—						—						—						2,021						—						25						2,046
Other comprehensive income, net of tax(a)						—						—						—						—						—						—						322						—						322
Stock-based awards exercised or vested						—						—						(161)						(1,154)						147						—						—						—						(14)
Repurchases of common stock						—						—						—						1,055						(141)						—						—						—						(141)
Recognition of stock-based compensation						—						—						135						—						—						—						—						—						135
Dividends declared ($5.04 per share)						—						—						—						—						—						(1,673)						—						(32)						(1,705)
Other						—						—						13						—						(7)						6						—						—						12
Balance as of December 31, 2025						378,597						$	473					$	849					46,699						$	(5,987)					$	9,611					$	(3,444)					$	128					$	1,630

(a) Excludes redeemable interests' share.

See Notes to the Consolidated Financial Statements.

			45			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

						Year Ended December 31
(In millions)						2025						2024						2023
Operating Activities
Net income						$	2,049					$	2,578					$	1,764
Depreciation and amortization						805						781						753
Asset impairments						18						114						676
Stock-based compensation						140						131						169
Deferred income taxes						241						(38)						(322)
Net (gains) losses on asset and business dispositions						39						(448)						(75)
Equity companies' earnings (in excess of) less than dividends paid						(35)						(62)						(59)
Operating working capital						(503)						178						582
Postretirement benefits						15						3						24
Other						8						(3)						30
Cash Provided by Operations						2,777						3,234						3,542
Investing Activities
Capital spending						(1,138)						(721)						(766)
Proceeds from asset and business dispositions						33						651						245
Investments in time deposits						(447)						(605)						(720)
Maturities of time deposits						552						562						815
Other						49						13						8
Cash Used for Investing						(951)						(100)						(418)
Financing Activities
Cash dividends paid						(1,660)						(1,628)						(1,588)
Change in short-term debt						275						1						(371)
Debt proceeds						—						—						363
Debt repayments						(550)						(554)						(475)
Proceeds from exercise of stock options						40						136						97
Repurchases of common stock						(141)						(1,000)						(225)
Cash paid for redemption of common securities of Thinx						—						—						(95)
Cash dividends paid to noncontrolling interests						(32)						(35)						(35)
Other						(111)						(86)						(45)
Cash Used for Financing						(2,179)						(3,166)						(2,374)
Effect of Exchange Rate Changes on Cash and Cash Equivalents						33						(40)						(84)
Change in Cash and Cash Equivalents						(320)						(72)						666
Cash and cash equivalents from continuing operations - beginning of period						1,010						1,075						413
Cash and cash equivalents from discontinued operations - beginning of period(a)						11						18						14
Cash and Cash Equivalents - Beginning of Year						1,021						1,093						427
Cash and cash equivalents from continuing operations - end of period						688						1,010						1,075
Cash and cash equivalents from discontinued operations - end of period(a)						13						11						18
Cash and Cash Equivalents - End of Year						$	701					$	1,021					$	1,093

(a) Included in Current assets of discontinued operations.

See Notes to the Consolidated Financial Statements.

			46			KIMBERLY-CLARK CORPORATION - 2025 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," "Company," "Kimberly-Clark," "we," "our," and "us" refer to Kimberly-Clark Corporation and all subsidiaries in which it has a controlling financial interest. Amounts are reported in millions of dollars, except per share amounts, unless otherwise noted.

International Family Care and Professional ("IFP") Transaction

On June 5, 2025, we announced that the Company will form a joint venture with Suzano S.A. ("Suzano") and Suzano International Holding B.V., a wholly-owned subsidiary of Suzano ("Buyer"), comprised of substantially all the operations of the Company's former International Family Care and Professional ("IFP") segment (the "IFP Business"). To facilitate this transaction, we entered into an Equity and Asset Purchase Agreement (the "Purchase Agreement") with Buyer, pursuant to which we will, among other things, effectuate a reorganization through the transfer of certain assets, liabilities and equity interests of the IFP Business to Kimberly-Clark IFP NewCo B.V., an indirect wholly-owned subsidiary of the Company (the "Joint Venture"). At the time of closing, which is expected to take place in mid-2026 and will only take place following the satisfaction of consultation requirements and customary closing conditions, including obtaining required regulatory approvals, Buyer will acquire a 51% interest in the Joint Venture for a purchase price of approximately $1.7 billion, subject to certain closing adjustments set forth in the Purchase Agreement, and we will retain a 49% equity interest (the "IFP Transaction").

In accordance with ASC 205, Presentation of Financial Statements, we determined the IFP Transaction represents a strategic shift that will have a major effect on our operations and financial results. Accordingly, the results of the IFP Business are reported as discontinued operations in the accompanying Consolidated Statements of Income and have been excluded from both continuing operations and segment results for all periods presented. Further, the assets and liabilities of the IFP Business are classified as discontinued operations in the accompanying Consolidated Balance Sheets for all periods presented, and the Company has ceased depreciating and amortizing the long-lived assets of the IFP Business. The Consolidated Statements of Comprehensive Income, Stockholders' Equity and Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. Unless otherwise noted, amounts and disclosures in the Notes to the Consolidated Financial Statements reflect only Kimberly-Clark's continuing operations. See Note 3 for additional details.

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, deferred income taxes and potential assessments, and valuation of goodwill and intangible assets.

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.

			47			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

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 Sheets 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 on the first day of our third fiscal quarter 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 to determine whether it is more likely than not that the fair value of each reporting unit is more than its carrying value. Qualitative factors include macroeconomic, industry and competitive conditions, legal and regulatory environments, historical and 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 to estimate fair value must be performed. This quantitative estimate of fair value is based on a discounted cash flow model and a market-based approach. We use inputs from our long-range planning process to determine growth rates for sales and earnings. The other key estimates and factors used in the discounted cash flow model include, but are not limited to, discount rates, actual business trends experienced, commodity prices, foreign exchange rates, inflation and terminal growth rates.

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.

Intangible assets with finite lives are amortized over their estimated useful lives, generally ranging from 4 to 20 years, 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.

			48			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Investments in Equity Companies

Investments in companies which we do not control but over which we have the ability to exercise significant influence are accounted for under the equity method of accounting and are stated at cost plus equity in undistributed net income. These investments are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the investments might not be recoverable. 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.

Research Expense

Research and development costs are charged to expense as incurred.

Other Income and Expense, Net

Other (income) and expense, net primarily includes gains and losses associated with business divestitures and acquisitions, re-measurement adjustments for financial statements in highly inflationary economies and other transactional exchange gains and losses.

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. GAAP requires the use of highly inflationary accounting for countries whose cumulative three-year inflation exceeds 100%. 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. dollars using both current and historical rates of exchange.

As of July 1, 2018, we adopted 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, 2025, K-C Argentina had an immaterial net peso monetary position. Net sales of K-C Argentina were approximately 1% of our net sales in 2025, 2024 and 2023.

			49			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

As of April 1, 2022, we adopted 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, 2025, K-C Türkiye had an immaterial net lira monetary position. Net sales of K-C Türkiye were less than 1% of our net sales in 2025, 2024, and 2023.

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. Our derivative instruments are primarily entered into with a diversified group of major financial institutions, which limits our credit exposure under these arrangements. 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 and commodity derivative instruments, not designated as hedging instruments, have been entered into to manage certain non-functional currency denominated monetary assets and liabilities, as well as changes in prices of certain commodities, respectively. 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 Statements 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 investment hedges which are classified in Investing Activities. See Note 13 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 Standards - Adopted as of December 31, 2025

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740). The new guidance is intended to enhance the transparency and decision usefulness of annual income tax disclosures. The amendments in this ASU are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied on a prospective basis with retrospective application permitted. We adopted this

			50			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

ASU in the fourth quarter of 2025 and added certain disclosures in Note 14, Income Taxes. The disclosures were applied retrospectively and impacted all prior periods presented. As the guidance requires only additional disclosure, there were no effects of this standard on our financial position, results of operations or cash flows.

In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810) to clarify the guidance regarding the identification of the accounting acquirer in a business combination in which the legal acquiree is a variable interest entity. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted, and the amendments should be applied on a prospective basis. We adopted this ASU in the fourth quarter of 2025 and there was no impact to our Consolidated Financial Statements.

Accounting Standards Issued - Not Adopted as of December 31, 2025

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220). The new guidance requires disclosure in the notes to the financial statements of disaggregated information about specific expense categories underlying certain income statement expense line items. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments should be applied on a prospective basis with retrospective application permitted. We are currently evaluating the impact of this update on our Consolidated Financial Statements and related disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350) to modernize the accounting guidance for internal-use software costs. The new guidance eliminates software development stages and clarifies when to begin capitalizing eligible software costs. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. The amendments can be applied on a prospective basis, a modified basis for in-process projects or a retrospective basis. We are currently evaluating the impact of this update on our Consolidated Financial Statements and related disclosures.

In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832) to establish guidance on the recognition, measurement and presentation of government grants received by business entities*.* The amendments in this ASU are effective for fiscal years beginning after December 15, 2028, and interim periods within those fiscal years, with early adoption permitted. The amendments can be applied on a modified prospective basis, a modified retrospective basis or a retrospective basis. We are currently evaluating the impact of this update on our Consolidated Financial Statements and related disclosures.

Note 2. 2024 Transformation Initiative

On March 27, 2024, we announced the 2024 Transformation Initiative intended to improve our focus on growth and reduce our structural cost base by realigning our internal operating and management structure to streamline our global supply chain and improve the efficiency of our corporate and regional overhead cost structures. The transformation is expected to impact our organization in all major geographies, and workforce reductions are expected to be in the range of 4% to 5%. Certain actions under the 2024 Transformation Initiative are being finalized for implementation, and accounting for such actions will commence when the actions are authorized for execution.

The 2024 Transformation Initiative is expected to be completed by the end of 2026, with total costs anticipated to be approximately $1.5 billion pre-tax. Cash costs are expected to be approximately 60% of that amount, primarily related to workforce reductions and other program costs. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets. Through December 31, 2025, cumulative pre-tax charges for the 2024 Transformation Initiative were $808 ($634 after-tax).

			51			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

The following charges were incurred in connection with the 2024 Transformation Initiative:

						Year Ended December 31
						2025						2024
Cost of products sold:
Charges for workforce reductions						$	21					$	69
Asset write-offs						38						27
Incremental depreciation						125						38
Other exit costs						29						10
Total						213						144
Marketing, research and general expenses:
Charges for workforce reductions						28						116
Other exit costs						114						112
Total						142						228
Other (income) and expense, net(a)						(7)						84
Nonoperating expense						3						1
Total charges**(b)**						351						457
Provision for income taxes						(56)						(118)
Net charges						295						339
Net charges related to noncontrolling interests						(7)						—
Net charges attributable to Kimberly-Clark Corporation						$	288					$	339

(a)Other (income) and expense, net includes gains and losses from the sale of manufacturing facilities and associated real estate and the exit of certain businesses and markets as part of the 2024 Transformation Initiative.

(b)We do not include 2024 Transformation Initiative charges within our segment operating results. Total impact of these charges to the NA and IPC segments would have been $198 and $135, respectively, for the year ended December 31, 2025, and $147 and $187, respectively, for the year ended December 31, 2024, with the residual relating to Corporate & Other. See further discussion around our segment operating results in Note 16.

The following summarizes the 2024 Transformation Initiative liabilities activity:

						Year Ended December 31
						2025						2024
2024 Transformation Initiative liabilities as of January 1						$	130					$	—
Charges for workforce reductions and other cash exit costs						176						291
Cash payments						(229)						(156)
Currency and other						(15)						(5)
2024 Transformation Initiative liabilities as of December 31						$	62					$	130

2024 Transformation Initiative liabilities are recorded in Accrued expenses and other current liabilities. The charges related to the 2024 Transformation Initiative are reflected within Operating Activities of our Consolidated Statements of Cash Flows.

			52			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Note 3. Discontinued Operations

As disclosed in Note 1, on June 5, 2025, we announced the sale of a controlling equity interest in a newly formed Joint Venture comprised of our IFP Business. At the time of closing, Buyer will acquire a 51% interest in the Joint Venture for a purchase price of approximately $1.7 billion, subject to certain post-closing adjustments set forth in the Purchase Agreement. We will retain a 49% equity interest in the Joint Venture which we expect will initially be recorded at fair value and subsequently accounted for using the equity method of accounting. The transaction is expected to close in mid-2026, pending the satisfaction of consultation requirements and customary closing conditions, including obtaining required regulatory approvals, set forth in the Purchase Agreement.

Financial Information of Discontinued Operations

The following table presents the components of Income from Discontinued Operations, Net of Income Taxes:

						Year Ended December 31
						2025						2024						2023
Net Sales						$	3,254					$	3,253					$	3,285
Cost of products sold						2,319						2,362						2,522
Gross Profit						935						891						763
Marketing, research and general expenses						413						381						346
Other (income) and expense, net						2						—						1
Operating Profit						520						510						416
Nonoperating expense						1						(1)						(1)
Income from discontinued operations before income taxes						521						509						415
Provision for income taxes						(121)						(123)						(110)
Income from Discontinued Operations, Net of Income Taxes						$	400					$	386					$	305

As a result of the IFP Transaction, we incurred separation costs of $77 for the year ended December 31, 2025, which are included in the reported amounts above. These costs were primarily related to external advisory, legal, accounting, contractor and other incremental costs directly related to the IFP Transaction.

The following table presents significant non-cash items and capital expenditures of discontinued operations:

						Year Ended December 31
						2025						2024						2023
Depreciation and Amortization						$	68					$	133					$	115
Capital Spending						118						116						100

			53			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

The following table presents the components of assets and liabilities classified as discontinued operations:

						December 31
						2025						2024
Assets
Cash and cash equivalents						$	13					$	11
Accounts receivable, net						302						281
Inventories						383						370
Other current assets						22						34
Current Assets of Discontinued Operations						$	720					$	696
Property, Plant and Equipment, Net						$	1,425					$	1,229
Goodwill						179						168
Other Intangible Assets, Net						7						7
Other Assets						94						104
Non-current Assets of Discontinued Operations						$	1,705					$	1,508
Liabilities
Debt payable within one year						$	4					$	4
Trade accounts payable						500						451
Accrued expenses and other current liabilities						236						228
Current Liabilities of Discontinued Operations						$	740					$	683
Long-Term Debt						$	18					$	21
Non-current Employee Benefits						18						15
Deferred Income Taxes						32						26
Other Liabilities						83						77
Non-current Liabilities of Discontinued Operations						$	151					$	139

Joint Venture Agreement and Ancillary Agreements

Upon the closing, K-C, Buyer and the Joint Venture will enter into a joint venture agreement (the "JVA"), which will set forth provisions relating to, among other things, the governance of the Joint Venture following closing, transfer restrictions with respect to the parties’ interests in the Joint Venture, and the option of Buyer to purchase K-C's equity interests in the Joint Venture. We will also enter into certain ancillary agreements including intellectual property rights, transition services agreements (the "TSA") and transitional supply arrangements (the "Supply Agreements"). Pursuant to the TSA, K-C will provide certain services to the Joint Venture, on an interim, transitional basis from and after the closing for an initial duration of 18 months, with certain extension rights provided therein. Pursuant to the Supply Agreements, K-C will manufacture and supply certain products to the Joint Venture and, similarly, the Joint Venture will manufacture and supply certain products to K-C for a period of up to 36 months following the closing with certain extension rights provided therein.

			54			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Note 4. Acquisitions and Divestitures

Pending Acquisition of Kenvue, Inc.

On November 2, 2025, we entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire the outstanding equity interests of Kenvue, Inc. ("Kenvue"), a global consumer health leader, for stock and cash consideration (the "Kenvue Acquisition"). Under the terms of the Merger Agreement, which was unanimously approved by the Boards of Directors of each of Kimberly-Clark and Kenvue, each share of Kenvue common stock, par value $0.01 per share, issued and outstanding at the close of the Kenvue Acquisition (subject to certain provisions within the Merger Agreement) will be converted into the right to receive (i) 0.14625 shares of Kimberly-Clark common stock, par value $1.25 per share (the "Stock Consideration"), plus (ii) $3.50 in cash (the "Cash Consideration" and, together with the Stock Consideration, the "Merger Consideration"). In total, we expect approximately 280 million shares of common stock to be issued and approximately $6.7 billion to be paid for the Merger Consideration. The Cash Consideration is expected to be funded through a combination of cash on hand, proceeds from new debt issuance, and proceeds from the IFP Transaction. The actual value of the transaction will fluctuate based upon changes in the price of Kimberly-Clark common stock and the number of shares of Kenvue common stock outstanding at the time of closing.

On January 29, 2026, Kimberly-Clark and Kenvue each held a special meeting of their respective stockholders. During the respective meetings, Kimberly-Clark stockholders approved by requisite vote the issuance of Kimberly-Clark common stock as consideration to holders of Kenvue common stock, and Kenvue stockholders adopted by the requisite vote the Merger Agreement. Additionally, the waiting period applicable to the Kenvue Acquisition under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on February 4, 2026. Completion of the Kenvue Acquisition, which is expected to take place in the second half of 2026, remains subject to the satisfaction of other customary closing conditions, as described in the Merger Agreement, including the receipt of foreign regulatory approvals. The Merger Agreement also provides for certain termination rights, and under certain specified circumstances, both Kimberly-Clark and Kenvue may be required to pay the other a termination fee of $1.1 billion.

During the year ended December 31, 2025, we incurred $32 of acquisition-related costs in connection with the Kenvue Acquisition, which are included in Marketing, research and general expenses. As of December 31, 2025, Other current assets includes deferred share issuance costs of $6 that will be recognized in Additional paid-in capital upon issuance of the Stock Consideration discussed above.

Completed Acquisition

In the second quarter of 2023, we acquired additional ownership of Thinx, Inc. ("Thinx") for $48, increasing our controlling ownership to 70%. As part of the completion of a negotiated final redemption, we acquired the remaining 30% 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.

Completed Divestitures

On July 1, 2024, we completed the sale transaction that was announced on April 7, 2024, of the personal protective equipment ("PPE") business for total consideration of $635, including the initial purchase price of $640 less working capital and other closing adjustments of $5. The transaction included Kimtech branded products, such as gloves, apparel and masks, and KleenGuard branded products, such as gloves, apparel, respirators and eyewear, which serve a variety of scientific and industrial industries globally. Upon closure of the transaction, a pre-tax gain of $566 ($453 after-tax) was recognized in Other (income) and expense, net. This gain is net of transaction costs of $14 that were determined to be directly attributable to the sale transaction.

On June 1, 2023, we completed the sale of our Neve tissue brand and related consumer and 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 professional 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. We

			55			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

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 5. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by reportable segment were as follows:

						NA						IPC												Total
Balance as of December 31, 2023						$	1,128					$	766											$	1,894
Divestiture						(15)						—												(15)
Effect of foreign currency translation						—						(83)												(83)
Balance as of December 31, 2024						1,113						683												1,796
Effect of foreign currency translation						—						43												43
Balance as of December 31, 2025						$	1,113					$	726											$	1,839

We completed our required annual assessment of goodwill for impairment for all our reporting units using a qualitative assessment as of the first day of the third quarter of the year ended December 31, 2025, concluding that it was more likely than not that the fair value of each reporting unit significantly exceeded the respective carrying amounts.

The carrying amounts of Other Intangible Assets, Net, were as follows:

						December 31
						2025																		2024
						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						$	44					$	—					$	44					$	46					$	—					$	46
Intangibles with finite lives:
Trademarks and brand names						53						(41)						12						53						(40)						13
Other intangible assets(a)						34						(13)						21						33						(12)						21
Total intangible assets with finite lives						87						(54)						33						86						(52)						34
Total						$	131					$	(54)					$	77					$	132					$	(52)					$	80

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

(b) Amounts reflect impairments noted below and are subject to foreign currency adjustments.

Amortization expense relating to the intangible assets with finite lives was $2, $7 and $11 for the years ended December 31, 2025, 2024 and 2023, respectively. Based on the carrying values of the intangible assets with finite lives as of December 31, 2025, amortization expense for each of the next five years is estimated to be approximately $2.

For 2025, 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, 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.

			56			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

2024 Intangible Asset Impairment

During the third quarter of 2024, we revised internal financial projections for our Softex and Thinx businesses to reflect updated expectations of future financial performance in light of current performance and as part of our re-organization efforts discussed in Note 2. As part of these revisions, we performed impairment assessments for our indefinite-lived brand names and finite-lived intangible assets, primarily brand names and distributor relationships. As a result of these assessments, we recognized impairment charges of $97 pre-tax ($57 after-tax) to write-down these intangible assets to their respective fair values. The valuation methods used in the assessments included the relief from royalty and distributor relationships methods. These impairment charges were primarily caused by increased attrition in our distributor relationships valuation model and the continued challenges arising from modified consumer shopping behavior in the post-COVID-19 period coupled with revisions to our long-term strategy and outlook. These noncash charges were included in Impairment of intangible assets in our Consolidated Statements of Income and in Asset impairments within Operating Activities in our Consolidated Statements of Cash Flows.

2023 Intangible Asset Impairment

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 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 Statements of Income and in Asset impairments within Operating Activities in our Consolidated Statements of Cash Flows.

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 6. 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.

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.

			57			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

During 2025 and 2024, 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. As of December 31, 2025 and 2024, derivative assets were $81 and $189, respectively, and derivative liabilities were $191 and $137, respectively. The fair values of derivatives used to manage interest rate risk and commodity price risk are based on the Secured Overnight Financing Rate ("SOFR") and interest rate swap curves and on commodity price quotations, respectively. 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 13 for additional information on our use of derivative instruments.

Redeemable preferred securities of subsidiaries are measured on a recurring basis at their estimated redemption values, which approximate fair value. As of December 31, 2025 and 2024, the securities were valued at $22 and $37, respectively. The securities are not traded in active markets, and their measurement is considered a level 3 measurement.

Company-owned life insurance ("COLI") assets are measured on a recurring basis at fair value. COLI assets were $71 as of December 31, 2025 and 2024. The COLI policies are a source of funding primarily for our nonqualified employee benefits and are included in Other Assets in the Consolidated Balance Sheets. 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, 2025												December 31, 2024
Assets
Cash and cash equivalents(a)						1						$	688					$	688					$	1,010					$	1,010
Time deposits(b)						1						94						94						181						181
Non-US government bonds(c)						2						—						—						15						15
Liabilities
Short-term debt(d)						2						282						282						3						3
Long-term debt(e)						2						6,886						6,491						7,415						6,828

(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 Sheets, as appropriate. Time deposits are recorded at cost, which approximates fair value.

(c)Non-US government bonds are composed of foreign issued debt securities that are classified as held-to-maturity because we have the positive intent and ability to hold the securities to maturity. These securities are recorded at amortized cost and are included in Other current assets or Other Assets in the Consolidated Balance Sheets, as appropriate.

(d)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.

(e)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.

			58			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Note 7. Debt

Long-term debt is composed of the following:

						Weighted-Average Interest Rate						Maturities						December 31
						2025						2024
Notes and debentures						3.6%						2026 - 2050						$	6,784					$	7,310
Industrial development revenue bonds						3.7%						2029 - 2045						59						59
Bank loans and other financings in various currencies						5.9%						2026 - 2046						43						46
Total long-term debt																		6,886						7,415
Less current portion																		412						561
Long-term portion																		$	6,474					$	6,854

Scheduled maturities of long-term debt for the next five years are $413 in 2026, $608 in 2027, $704 in 2028, $706 in 2029 and $745 in 2030.

In February 2023, we issued $350 aggregate principal amount of 4.50% 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.

Committed Bridge Financing

In November 2025, in connection with the Merger Agreement discussed in Note 4, the Company and JPMorgan Chase Bank, N.A. (the "Bank") executed a certain bridge loan facility commitment letter, pursuant to which the Bank has committed to provide bridge financing (the "Bridge Facility") in an amount of $7.7 billion to the Company to fund the Cash Consideration, the fees, costs and expenses incurred in connection with the transactions contemplated by the Merger Agreement and to repay certain existing indebtedness of Kenvue and/or its subsidiaries. In December 2025, $3.8 billion of the commitments in the Bridge Facility were terminated in connection with entry into the New Revolving Credit Facility and DDTL Credit Facility (as defined below). We incurred debt issuance costs of $15 in connection with the Bridge Facility, of which $8 was charged to earnings in connection with the termination of a portion of the commitments. The remaining unamortized amount is capitalized in Other current assets.

Revolving Credit and Delayed Draw Term Loan Agreements

In December 2025, we entered into (i) the Five-Year Revolving Credit Agreement by and among Kimberly-Clark, JPMorgan Chase Bank, N.A. (the "Bank") and the other lenders party thereto (the “New Revolving Credit Facility”) and (ii) the Delayed Draw Term Loan Credit Agreement by and among Kimberly-Clark, the Bank, and the other lenders party thereto (the “DDTL Credit Facility”). The New Revolving Credit Facility matures in December 2030 and provides for a revolving credit facility of up to $4.0 billion (which may be increased by up to $1.0 billion upon obtaining additional commitments from the then-existing or new lenders and the satisfaction of certain other conditions). The DDTL Credit Facility provides for a delayed draw term loan facility of up to $1.8 billion, which, along with $2.0 billion of the commitments under the New Revolving Credit Facility, will be available with limited conditionality to ensure certainty of funds to pay the Cash Consideration, the fees, costs and expenses incurred in connection with the transactions contemplated by the Merger Agreement and to repay certain existing indebtedness of Kenvue and/or its subsidiaries. The commitments under the DDTL Credit Facility will terminate upon the earlier of (i) the termination of the Merger Agreement or (ii) the closing of the transactions contemplated by the Merger Agreement without the borrowing of funds under the DDTL Credit Facility. Amounts borrowed under the DDTL Credit Facility are payable within one year, subject to certain mandatory prepayment conditions described in the DDTL Credit Facility.

Borrowings under the New Revolving Credit Facility and the DDTL Credit Facility will bear interest, at our option, at a rate equal to (i) a base rate (subject to a floor of 1.00%) or (ii) a floating secured overnight financing rate (subject to a floor of 0.00%) plus an applicable margin. The applicable margin will range from 0.50% to 1.00% depending on our credit rating and is initially 0.75%.

			59			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

We capitalized debt issuance costs of $5 in connection with the facilities discussed above; the unamortized portion is presented in Other current assets. The New Revolving Credit Facility, currently unused, supports our commercial paper program, and would provide liquidity in the event our access to the commercial paper markets is unavailable for any reason.

Concurrently with the closing of the New Revolving Credit Facility and the DDTL Credit Facility, we terminated the commitments outstanding under our previous $750 revolving credit facility, originally set to mature in May 2026 and reduced the commitments outstanding under our existing $2.0 billion revolving credit facility, which matures in June 2028, to $1.0 billion.

Note 8. 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 share units ("RSUs") and other types of awards described further in the Plans to employees and outside directors. As of December 31, 2025, the number of shares of common stock available for grants under the Plans aggregated to 6.3 million shares. Unless specifically stated, the following reflects consolidated information for the Company inclusive of the IFP Business.

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% at the end of each of the first two 12-month periods following the grant and 40% at the end of the third 12-month period.

Time-vested RSUs are valued at the closing market price of our common stock on the grant date and are generally subject to graded vesting whereby shares vest 30% at the end of each of the first two 12-month periods following the grant and 40% at the end of the third 12-month period. Time-vested restricted share unit grants issued for special one-time awards and performance-based RSUs 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 RSUs that ultimately vest ranges from zero to 200% of the number granted based on the attainment of performance metrics. 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 targets are set at the beginning of the performance period. RSUs 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. These shares are subject to a restricted period that begins on the date of grant and expires within ninety days following the date the outside director retires from or otherwise terminates service on our Board.

At the time stock options are exercised or RSUs vest, common stock is issued from our accumulated treasury shares. Dividend equivalents are credited on RSUs 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 expense is recognized on a straight-line basis over the requisite service period of the award, net of estimated forfeitures, based on the fair value of the award at the date of grant. Stock-based compensation costs from continuing operations of $130, $122 and $160 and related deferred income tax benefits of $25, $27 and $34 were recognized for 2025, 2024 and 2023, respectively.

The fair value of stock option awards is determined on the date of grant using a Black-Scholes-Merton option-pricing model utilizing a range of assumptions related to dividend yield, volatility, risk-free interest rate, and historical 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.

During 2025, 2024 and 2023, no stock options were granted.

			60			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Total remaining unrecognized compensation costs and amortization periods for our outstanding stock-based awards are as follows:

						December 31, 2025						Weighted-Average Service Years
Time-vested RSUs						$	71					1.3
Performance-based RSUs						16						1.6

A summary of stock-based compensation activity and related information for outstanding stock options and RSUs is presented below:

Stock Options						Shares (in thousands)						Weighted-Average Exercise Price						Weighted-Average Remaining Contractual Term						Aggregate Intrinsic Value
Outstanding as of January 1, 2025						2,976						$	131.05
Granted						—						—
Exercised						(331)						124.47
Forfeited or expired						(69)						119.22
Outstanding as of December 31, 2025						2,576						131.75						3.7						$	—
Exercisable as of December 31, 2025						2,575						131.75						3.7						$	—

The total intrinsic value of options exercised during 2025, 2024 and 2023 was $6, $19 and $23, respectively.

						Time-Vested RSUs												Performance-Based RSUs
RSUs						Shares (in thousands)						Weighted-Average Grant-Date Fair Value						Shares (in thousands)						Weighted-Average Grant-Date Fair Value
Nonvested as of January 1, 2025						1,392						$	137.79					686						$	134.87
Granted						889						129.57						608						131.63
Vested						(698)						137.34						(557)						133.09
Forfeited						(134)						135.90						(41)						138.59
Nonvested as of December 31, 2025						1,449						133.15						696						135.76

The total fair value of RSUs that vested during 2025, 2024 and 2023 was $170, $185 and $99, respectively.

Note 9. 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 6.2% in 2026 and to decline to 4.5% in 2038 and thereafter. Assumed health care cost trend rates affect the amounts reported for postretirement health care benefit plans.

			61			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

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

						Pension Benefits												Other Benefits
						Year Ended December 31
						2025						2024						2025						2024
Change in Benefit Obligation
Benefit obligation at beginning of year						$	2,198					$	2,428					$	497					$	531
Service cost						10						11						4						4
Interest cost						116						114						29						28
Actuarial (gain) loss(a)						12						(129)						(8)						(3)
Currency and other						88						(39)						6						(12)
Benefit payments from plans						(177)						(174)						—						—
Direct benefit payments						(8)						(8)						(48)						(51)
Settlements and curtailments						(29)						(5)						—						—
Benefit obligation at end of year						2,210						2,198						480						497
Change in Plan Assets
Fair value of plan assets at beginning of year						2,060						2,295						—						—
Actual return on plan assets						140						(32)						—						—
Employer contributions						14						14						—						—
Currency and other						83						(39)						—						—
Benefit payments						(177)						(174)						—						—
Settlements						(25)						(4)						—						—
Fair value of plan assets at end of year						2,095						2,060						—						—
Funded Status						$	(115)					$	(138)					$	(480)					$	(497)

(a) Actuarial (gains) losses in each period shown are primarily due to changes in discount rates.

Substantially all of the funded status of pension and other benefits is recognized in the Consolidated Balance Sheets 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
			2025						2024						2025						2024						2025						2024
Projected benefit obligation (“PBO”)			$	1,897					$	1,900					$	313					$	298					$	2,210					$	2,198
Accumulated benefit obligation (“ABO”)			1,897						1,900						268						257						2,165						2,157
Fair value of plan assets			1,819						1,795						276						265						2,095						2,060

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.

			62			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

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

						December 31
						2025						2024
ABO						$	1,086					$	2,042
Fair value of plan assets						928						1,874

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

						December 31
						2025						2024
PBO						$	1,090					$	2,048
Fair value of plan assets						928						1,875

Components of Net Periodic Benefit Cost

			Pension Benefits																		Other Benefits
			Year Ended December 31
			2025						2024						2023						2025						2024						2023
Service cost			$	10					$	11					$	11					$	4					$	4					$	4
Interest cost			116						114						120						29						28						30
Expected return on plan assets(a)			(123)						(123)						(127)						—						—						—
Recognized net actuarial (gain) loss			44						40						39						(4)						—						(3)
Settlements and curtailments			4						2						35						—						—						—
Other			—						—						—						—						—						1
Net periodic benefit cost			$	51					$	44					$	78					$	29					$	32					$	32

(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 Statements of Income.

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

			Pension Benefits																								Other Benefits
			Projected 2026						2025						2024						2023						2025						2024						2023
Discount rate			5.24		%				5.38		%				4.93		%				5.22		%				5.89		%				5.66		%				5.92		%
Expected long-term return on plan assets			6.01		%				6.12		%				5.60		%				5.80		%				—						—						—
Rate of compensation increase			4.15		%				3.43		%				3.49		%				3.45		%				—						—						—

Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31

						Pension Benefits												Other Benefits
						2025						2024						2025						2024
Discount rate						5.24		%				5.38		%				5.89		%				6.04		%
Rate of compensation increase						4.15		%				3.43		%				—						—

			63			KIMBERLY-CLARK CORPORATION - 2025 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 2026 target plan asset allocation for the Principal Plans is approximately 85% fixed income securities and 15% 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 6.34% in 2025, 5.73% in 2024 and 6.05% in 2023, and will be 6.24% in 2026.

Set forth below are the pension plan assets of the Principal Plans measured at fair value, by level in the fair-value hierarchy. Approximately 60% 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 as of December 31, 2025
						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						$	28					$	19					$	9					$	—
Fixed Income
Held directly
U.S. government and municipals						119						100						19						—
U.S. corporate debt						288						—						288						—
U.S. securitized						—						—						—						—
International bonds						41						—						41						—
Held through mutual and pooled funds measured at net asset value
U.S. government and municipals						272						—						—						—
Non-U.S. securitized						74						—						—						—
International bonds						524						—						—						—
Equity
Held directly
U.S. equity						16						16						—						—
International equity						12						12						—						—
Held through mutual and pooled funds measured at net asset value
Non-U.S. equity						3						—						—						—
Global equity						246						—						—						—
Insurance Contracts						196						—						—						196
Other						—						—						—						—
Total Plan Assets						$	1,819					$	147					$	357					$	196

			64			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

						Fair Value Measurements as of December 31, 2024
						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						$	25					$	16					$	9					$	—
Fixed Income
Held directly
U.S. government and municipals						112						94						18						—
U.S. corporate debt						304						—						304						—
U.S. securitized						1						—						1						—
International bonds						50						—						50						—
Held through mutual and pooled funds measured at net asset value
U.S. government and municipals						289						—						—						—
Non-U.S. securitized						69						—						—						—
International bonds						509						—						—						—
Equity
Held directly
U.S. equity						14						14						—						—
International equity						11						11						—						—
Held through mutual and pooled funds measured at net asset value
Non-U.S. equity						2						—						—						—
Global equity						218						—						—						—
Insurance Contracts						194						—						—						194
Other						(3)						(3)						—						—
Total Plan Assets						$	1,795					$	132					$	382					$	194

Futures contracts are used when appropriate to manage duration targets. As of December 31, 2025 and 2024, the U.S. plan held directly Treasury futures contracts with a total notional value of approximately $269 and $278, respectively, and an insignificant fair value. As of December 31, 2025 and 2024, the United Kingdom plan held through a pooled fund future contracts with a total notional value of approximately $501 and $418, and an insignificant fair value.

During 2025 and 2024, the plan assets did not include a significant amount of Kimberly-Clark common stock.

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

			65			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

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, 2025, there were no significant concentrations of equity or debt securities in any single issuer or industry.

No level 3 transfers (in or out) were made in 2025 or 2024. Fair values of insurance contracts are based on an evaluation of various factors, including purchase price.

We expect to contribute approximately $15 to our defined benefit pension plans in 2026. Over the next ten years, we expect that the following gross benefit payments will occur:

						Pension Benefits						Other Benefits
2026						$	181					$	51
2027						189						52
2028						184						52
2029						180						51
2030						180						48
2031-2035						872						210

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 $143 in 2025, $158 in 2024, and $166 in 2023. Approximately 17% of these costs were for plans outside the U.S.

Note 10. Stockholders' Equity

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 Accumulated Other Comprehensive Income ("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 2025 was 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.

			66			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

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

						Unrealized Translation						Defined Benefit Pension Plans						Other Postretirement Benefit Plans						Cash Flow Hedges
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			(b)			55			(a)			(4)			(a)			164			(c)
Net current period other comprehensive income (loss)						91						(2)						(13)						11
Balance as of December 31, 2023						(2,678)						(791)						39						(152)
Other comprehensive income (loss) before reclassifications						(434)						(15)						10						131
(Income) loss reclassified from AOCI						44			(b)			31			(a)			(2)			(a)			51			(c)
Net current period other comprehensive income (loss)						(390)						16						8						182
Balance as of December 31, 2024						(3,068)						(775)						47						30
Other comprehensive income (loss) before reclassifications						395						(18)						4						(140)
(Income) loss reclassified from AOCI						—						35			(a)			(4)			(a)			50			(c)
Net current period other comprehensive income (loss)						395						17						—						(90)
Balance as of December 31, 2025						$	(2,673)					$	(758)					$	47					$	(60)

(a) Included in Nonoperating expense as part of the computation of net periodic benefits costs (see Note 9).

(b) Included in Other (income) and expense, net as part of the charges related to the 2024 Transformation Initiative (see Note 2).

(c) Included in Interest expense, Cost of products sold or Other (income) and expense, net, based on the income statement line that the hedged exposure affects earnings. For the year ended December 31, 2025, losses of $20 were reclassified into Income from Discontinued Operations, Net of Income Taxes due to the discontinuance of cash flow hedge accounting as a result of the IFP Transaction (see Note 13).

Included in the above defined benefit pension plans and other postretirement benefit plans balances as of December 31, 2025 is $710 and $1 of unrecognized net actuarial loss and unrecognized net prior service cost, respectively.

			67			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

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

						Year Ended December 31
						2025						2024						2023
Unrealized translation						$	377					$	(373)					$	84
Tax effect						18						(17)						7
						395						(390)						91
Defined benefit pension plans
Unrecognized net actuarial loss and transition amount
Funded status recognition						9						(26)						(49)
Amortization						44						40						39
Settlements and curtailments						4						2						35
Currency and other						(36)						6						(23)
						21						22						2
Unrecognized prior service cost/credit
Funded status recognition						—						—						3
						—						—						3
Tax effect						(4)						(6)						(7)
						17						16						(2)
Other postretirement benefit plans
Unrecognized net actuarial loss and transition amount						2						10						(18)
Tax effect						(2)						(2)						5
						—						8						(13)
Cash flow hedges
Recognition of effective portion of hedges						(181)						198						(178)
Amortization						59						69						208
Currency and other						(4)						(15)						(14)
Tax effect						36						(70)						(5)
						(90)						182						11
Change in AOCI						$	322					$	(184)					$	87

Note 11. 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 93 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.

			68			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Lease Expense

						Year Ended December 31
						2025												2024						2023						Income Statement Classification
Operating lease expense						$	141											$	136					$	131					Cost of products sold, Marketing, research and general expenses
Finance lease expense:
Amortization of lease assets						15												14						12						Cost of products sold
Interest on lease liabilities						3												3						2						Interest expense
Total finance lease expense						18												17						14
Variable lease expense(a)						136												132						214						Cost of products sold, Marketing, research and general expenses
Total lease expense						$	295											$	285					$	359

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

Lease Assets and Liabilities

						December 31
						2025						2024						Balance Sheet Classification
Assets
Operating lease						$	369					$	363					Other Assets
Finance lease						49						46						Property, Plant and Equipment, Net
Total lease assets						$	418					$	409
Liabilities
Current:
Operating lease						$	128					$	116					Accrued expenses and other current liabilities
Finance lease						13						12						Debt payable within one year
Noncurrent:
Operating lease						258						265						Other Liabilities
Finance lease						30						32						Long-Term Debt
Total lease liabilities						$	429					$	425

As of December 31, 2025 and 2024, accumulated amortization of finance lease assets was $36 and $28, respectively.

			69			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Maturity of Lease Liabilities

						December 31, 2025
						Operating Leases						Finance Leases						Total
2026						$	146					$	15					$	161
2027						116						13						129
2028						69						10						79
2029						42						5						47
2030						27						3						30
Thereafter						38						5						43
Total lease payments						438						51						489
Less imputed interest						52						8						60
Present value of lease liabilities						$	386					$	43					$	429

Supplemental Information Related to Leases

The Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. As a result, unless specifically stated, supplemental cash flow information shown below reflects Kimberly-Clark's consolidated results for all periods presented.

						Year Ended December 31
						2025						2024						2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating leases						$	160					$	156					$	147
Finance leases						25						19						17
Lease assets obtained in exchange for new lease obligations:
Operating leases						40						74						66
Finance leases						14						23						24
Other non-cash modifications to lease assets:
Operating leases						89						39						39

Lease terms and discount rates were as follows:

						December 31, 2025												December 31, 2024
						Operating Leases						Finance Leases						Operating Leases						Finance Leases
Weighted-average remaining lease term (years)						4.1						4.6						4.2						4.9
Weighted-average discount rate						5.8		%				6.3		%				4.3		%				6.3		%

As of December 31, 2025, we have additional operating leases that are expected to commence in 2026 and are therefore not included in the measurement of the right-of-use assets and liabilities disclosed in the table above. These leases have cumulative minimum lease commitments of approximately $186, with terms ranging from 7 to 10.5 years.

We have entered into long-term contracts for the purchase of raw materials, primarily superabsorbent materials, pulp and certain utilities. Commitments under these contracts based on current prices are $956 in 2026, $415 in 2027, $411 in 2028, $346 in 2029, $348 in 2030, and $1,387 beyond the year 2030.

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.

			70			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Note 12. 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 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.

As previously disclosed, we have been party to certain legal proceedings relating to our former health care business, Avanos Medical, Inc. (previously Halyard Health, Inc.), including a qui tam matter and certain subpoena and document requests from the federal government. The subpoena and document requests included 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. During the second quarter of 2025, we entered into a settlement agreement to resolve the qui tam matter which provided for a payment by us in an amount that did not materially affect our financial position, results of operations or cash flows. During the third quarter of 2025, we entered into a Deferred Prosecution Agreement (the “DPA”) with the DOJ that resolved the DOJ’s investigation. Pursuant to the DPA, the Company is responsible for making certain monetary payments that are not expected to materially affect our financial position, results of operations or cash flows.

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 13. 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.

As of December 31, 2025 and 2024, derivative assets were $81 and $189, respectively, and derivative liabilities were $191 and $137, respectively, primarily comprised of foreign currency exchange, interest rate 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

			71			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

liabilities, primarily intercompany loans and accounts payable, is hedged primarily with undesignated derivative instruments.

Derivative instruments are used 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 inventories 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 primarily 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.

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 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, 2025, the aggregate notional values and carrying values of debt subject to outstanding interest rate contracts designated as fair value hedges were $425 and $405, respectively. For the years ended December 31, 2025, 2024 and 2023, gains or losses recognized in Interest expense for interest rate swaps were not material.

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, 2025, the aggregate notional value of outstanding foreign exchange and commodity derivative contracts designated as cash flow hedges was $2.3 billion. For the year ended December 31, 2025, we discontinued cash flow hedge accounting for certain foreign exchange and commodity instruments with a notional value of $690 because the forecasted transactions were no longer probable of occurring due to the IFP Transaction. As a result, pre-tax losses of $20 were reclassified from AOCI into Income from Discontinued Operations, Net of Income Taxes. For the years ended December 31, 2024 and 2023, no material gains or losses were reclassified from AOCI into earnings as a result of the discontinuance of cash flow hedge accounting. As of December 31, 2025, losses expected to be reclassified from AOCI into Interest expense, Cost of products sold or Other (income) and expense, net during the next twelve months are $21. The maximum maturity of cash flow hedges in place as of December 31, 2025 is November 2028.

Net Investment Hedges

For derivative instruments that are designated and qualify as net investment hedges, unrealized gains and losses related to 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. As of December 31, 2025, the aggregate notional value of these instruments was $1.1 billion. 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. Interest accruals on cross-currency swap contracts are recognized 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. For the years ended December 31, 2025, 2024 and 2023, unrealized losses of $103, unrealized gains of $64, and

			72			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

unrealized losses of $43, respectively, related to net investment hedge fair value changes were recorded in AOCI and no material amounts were reclassified from AOCI to Interest expense.

For the years ended December 31, 2025, 2024 and 2023 no material amounts were excluded from the assessment of net investment, fair value or cash flow hedge effectiveness.

Undesignated Hedging Instruments

Gains or losses on undesignated foreign exchange and commodity hedging instruments are immediately recognized in Other (income) and expense, net. For the years ended December 31, 2025, 2024 and 2023, we recognized gains of $46, losses of $49, and gains of $2, respectively. The effect on earnings from the use of these undesignated derivatives is substantially neutralized by the transactional gains and losses recorded on the underlying assets and liabilities. As of December 31, 2025, the notional amount of these undesignated derivative instruments was approximately $4.6 billion.

Note 14. Income Taxes

The Provision for income taxes consists of the following:

						Year Ended December 31
						2025						2024						2023
Current income taxes
United States						$	117					$	236					$	364
State						42						56						53
Other countries						226						195						252
Total						385						487						669
Deferred income taxes
United States						241						(14)						(120)
State						1						(18)						(28)
Other countries						(28)						(13)						(178)
Total						214						(45)						(326)
Total Provision for income taxes						$	599					$	442					$	343

The components of Income from Continuing Operations Before Income Taxes and Equity Interests are as follows:

						Year Ended December 31
						2025						2024						2023
United States						$	1,743					$	2,194					$	1,954
Other countries						309						224						(348)
Total Income from Continuing Operations Before Income Taxes and Equity Interests						$	2,052					$	2,418					$	1,606

			73			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

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

									December 31
									2025						2024
Deferred tax assets
Pension and other postretirement benefits									$	162					$	169
Tax credits and loss carryforwards									712						623
Capitalized research costs									204						272
Lease liabilities									114						112
Other									423						364
									1,615						1,540
Valuation allowances									(451)						(295)
Total deferred tax assets									1,164						1,245
Deferred tax liabilities
Property, plant and equipment									851						854
Investments in subsidiaries									133						113
Goodwill									69						64
Lease assets									109						105
Other									186						203
Total deferred tax liabilities									1,348						1,339
Net deferred tax assets (liabilities)									$	(184)					$	(94)

Valuation allowances as of December 31, 2025 primarily relate to tax credits, capital loss carryforwards, and income tax loss carryforwards of $1.1 billion. If these items are not utilized against taxable income, $484 of the income tax loss carryforwards will expire from 2026 through 2045. The remaining $589 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.

			74			KIMBERLY-CLARK CORPORATION - 2025 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
						2025												2024												2023
						Amount						Percent						Amount						Percent						Amount						Percent
U.S. statutory rate applied to income from continuing operations before income taxes and equity interests						$	431					21.0		%				$	508					21.0		%				$	337					21.0		%
State income taxes, net of federal tax benefit**(a)**						34						1.7						31						1.3						25						1.6
Effect of changes in tax laws or rates enacted in the current period						119						5.8						—						—						(21)						(1.3)
Effect of Cross-Border Tax Laws
Foreign-derived intangible income						(10)						(0.5)						(19)						(0.8)						(20)						(1.2)
Other						(24)						(1.2)						15						0.6						(9)						(0.6)
Tax Credits
Research and development credits						(33)						(1.6)						(41)						(1.7)						(28)						(1.7)
Other						(8)						(0.4)						(6)						(0.2)						—						—
Changes in valuation allowances						52						2.5						(7)						(0.3)						38						2.4
Nontaxable or Nondeductible Items						12						0.6						18						0.7						5						0.3
Other Adjustments
Nigeria worthless stock deduction						—						—						(40)						(1.7)						—						—
Tax effects of the impairment of intangible assets						—						—						(9)						(0.4)						(43)						(2.7)
Other						(15)						(0.7)						(33)						(1.4)						(5)						(0.3)
Foreign tax effects						43						2.1						78						3.2						70						4.4
Changes in unrecognized tax benefits						(2)						(0.1)						(53)						(2.2)						(6)						(0.4)
Effective tax rate						$	599					29.2		%				$	442					18.3		%				$	343					21.4		%

Note - table may not foot due to rounding.

(a) State taxes in California and Illinois made up greater than 50% of the 2025 tax effect in this category. State taxes in Alabama, California, Illinois, and Wisconsin made up greater than 50% of the 2024 tax effect in this category. State taxes in California, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, South Carolina, Texas, and Wisconsin made up greater than 50% of the 2023 tax effect in this category.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. During the year ended December 31, 2025, we recorded incremental tax charges of approximately $145 primarily relating to a valuation allowance on current and prior year U.S. foreign tax credits. Of these total charges, approximately $96 was associated with the realizability of our prior year U.S. foreign tax credits.

As of December 31, 2025, deferred taxes have been recorded on $1.2 billion of earnings of foreign consolidated subsidiaries expected to be repatriated. We do not intend to distribute any remaining foreign earnings and therefore have not recorded deferred taxes for foreign and U.S. income taxes on such earnings. 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.

We consider any excess of the amount for financial reporting over the tax basis in our foreign subsidiaries to be indefinitely reinvested. The determination of deferred tax liabilities on the amount of financial reporting over tax basis or the remaining foreign earnings is not practicable.

			75			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

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

						2025						2024						2023
Balance as of January 1						$	528					$	579					$	479
Gross increases for tax positions of prior years						42						61						38
Gross decreases for tax positions of prior years						(20)						(113)						(13)
Gross increases for tax positions of the current year						35						50						109
Settlements						(38)						(32)						(26)
Other						(2)						(17)						(8)
Balance as of December 31						$	545					$	528					$	579

Of the amounts recorded as unrecognized income tax benefits as of December 31, 2025, $470 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. The net impact of interest and penalties for the years ended December 31, 2025, 2024, and 2023 was not significant. Total accrued penalties and net accrued interest was $59 and $54 as of December 31, 2025 and 2024, respectively.

As of December 31, 2025, the following tax years remain subject to examination for the major jurisdictions where we conduct business:

Jurisdiction			Years
United States			2021			to			2025
Brazil			2020			to			2025
China			2015			to			2025
South Korea			2021			to			2025

Our originally filed U.S. federal income tax returns have been audited through 2020; we filed an amended U.S. federal income tax return for 2016, which remains open to examination.

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 $45 as of December 31, 2025 (translated at the December 31, 2025 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 issued 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 assessment; however, it could take a number of years to reach resolution of this matter.

			76			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

As part of the tax audit of our U.S. federal income tax returns for the taxable years ended December 31, 2019 and 2020, the U.S. Internal Revenue Service proposed an adjustment that would increase the amount of U.S. income tax on distributions made by minority owned foreign affiliates. We believe we have meritorious defenses and intend to vigorously defend against the proposed adjustment and have therefore not recorded a reserve; however, it could take a number of years to reach resolution of this matter.

Income taxes paid, net of refunds, are as follows:

						Year Ended December 31
						2025						2024						2023
U.S. Federal						$	175					$	260					$	346
U.S. State						25						48						15
Foreign						297						279						287
Total						$	497					$	587					$	648

Income taxes paid, net of refunds exceeded 5 percent of total income taxes paid, net of refunds, in the following jurisdictions:

						Year Ended December 31
						2025						2024						2023
Foreign
Australia						$	39					$	31					$ *
China						52						42						51
Korea						44						41						46

*Jurisdiction below the threshold for the period presented.

			77			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Note 15. Earnings Per Share

Basic and diluted earnings per share ("EPS") were calculated as follows:

						Year Ended December 31
(In millions, except per share amounts)						2025						2024						2023
Income from Continuing Operations						$	1,649					$	2,192					$	1,459
Less: Net income attributable to noncontrolling interests						(28)						(33)						—
Income from Continuing Operations Attributable to Kimberly-Clark Corporation						1,621						2,159						1,459
Income from Discontinued Operations, Net of Income Taxes						400						386						305
Net Income Attributable to Kimberly-Clark Corporation						$	2,021					$	2,545					$	1,764
Weighted-Average Common Shares
Basic						331.9						335.6						337.8
Dilutive effect of stock options and RSU awards						1.3						1.4						1.0
Diluted						333.2						337.0						338.8
Basic:
Continuing operations						$	4.88					$	6.43					$	4.32
Discontinued operations						1.21						1.15						0.90
Basic Earnings per Share						$	6.09					$	7.58					$	5.22
Diluted:
Continuing operations						$	4.86					$	6.41					$	4.31
Discontinued operations						1.21						1.14						0.90
Diluted Earnings per Share						$	6.07					$	7.55					$	5.21

We use the treasury stock method to calculate the dilutive effect of our outstanding stock-based awards. Options outstanding not included in the computation of diluted EPS because their exercise price was greater than the average market price of the common shares were 1.9 million in 2025, 1.2 million in 2024 and 2.7 million in 2023. The number of common shares outstanding as of December 31, 2025, 2024 and 2023 was 331.9 million, 331.8 million and 337.0 million, respectively.

			78			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Note 16. Segment Reporting

The Company's continuing operations are organized by operating segments aggregated into two reportable segments defined by geographic region: North America ("NA") and International Personal Care ("IPC").

These segments differ from those used in prior periods due to the following changes:

IFP Transaction

As a result of the IFP Transaction discussed in Notes 1 and 3, the results of operations and applicable assets and liabilities of the IFP Business are reported as discontinued operations in the Company's financial statements and are excluded from segment results for all periods presented. This includes certain costs that were previously allocated to the IPC segment that relate to assets or activities that are part of the IFP Transaction. These costs have been removed from the results of the IPC segment and are reported as discontinued operations. Additionally, certain operations and commercial activities of the former IFP segment retained by K-C are now reported in the NA and IPC segments.

Corporate and Other

Corporate and Other was updated for all periods presented to include the following:

• Operations of the former IFP segment that were divested prior to the IFP Transaction and therefore not reported as discontinued operations.

• Costs previously allocated to the former IFP segment that are not directly attributable to the operations included in the IFP Transaction and therefore are not reported as discontinued operations.

The reportable segments were determined in accordance with how our Chief Executive Officer, who is our chief operating decision maker ("CODM"), develops and executes 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. The primary measure of segment profitability utilized by our CODM is segment operating profit. Our CODM uses this measure to assess the operating results and performance of our segments, perform analytical comparisons to budget and allocate resources to each segment. Segment operating profit excludes Corporate & Other, which primarily encompasses certain unallocated general corporate expenses, impairment charges, one-time (gains) or losses associated with acquisitions and divestitures, costs related to our reorganization activities that are not associated with the ongoing operations of the segments, certain operations of the former IFP segment that were divested prior to the IFP Transaction, and costs previously allocated to the former IFP segment that aren't reported as discontinued operations. Our CODM does not use assets by segment to evaluate performance or allocate resources. Therefore, we do not disclose assets by segment.

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

• North America** consists of products encompassing each of our five global daily-need categories across consumer and professional channels including disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, reusable underwear, facial and bathroom tissue, paper towels, napkins, wipers, tissue, towels, soaps and sanitizers and other related products. These products are sold under the Huggies, Pull-Ups, GoodNites, Kotex, Poise, Depend, Kleenex, Scott, Cottonelle, Viva, Wypall and other brand names.

• International Personal Care** consists of three core categories — Baby & Child Care, Adult Care and Feminine Care, including disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, reusable underwear and other related products. These products are sold under the Huggies, Kotex, Goodfeel, Intimus, Depend and other brand names.

			79			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

The tables below present net sales and the significant expense categories that are included in Segment Operating Profit and regularly provided to our CODM:

						Year Ended December 31, 2025
						NA						IPC						Total
Segment Net Sales						$	10,753					$	5,694					$	16,447
Corporate & Other																		—
Total Net Sales																		$	16,447
Cost of Products Sold						$	6,452					$	3,781					$	10,233
Advertising and Promotion Expense						719						391						1,110
Research, Selling and General Expense						1,029						718						1,747
Other (Income) and Expense, net(a)						—						8						8
Segment Operating Profit						$	2,553					$	796					$	3,349
Corporate & Other																		(998)
Total Operating Profit																		$	2,351

						Year Ended December 31, 2024
						NA						IPC						Total
Segment Net Sales						$	11,017					$	5,743					$	16,760
Corporate & Other																		45
Total Net Sales																		$	16,805
Cost of Products Sold						$	6,518					$	3,755					$	10,273
Advertising and Promotion Expense						806						416						1,222
Research, Selling and General Expense						1,151						733						1,884
Other (Income) and Expense, net(a)						—						13						13
Segment Operating Profit						$	2,542					$	826					$	3,368
Corporate & Other																		(668)
Total Operating Profit																		$	2,700

						Year Ended December 31, 2023
						NA						IPC						Total
Segment Net Sales						$	10,996					$	5,940					$	16,936
Corporate & Other																		210
Total Net Sales																		$	17,146
Cost of Products Sold						$	6,608					$	4,012					$	10,620
Advertising and Promotion Expense						739						400						1,139
Research, Selling and General Expense						1,135						759						1,894
Other (Income) and Expense, net(a)						—						96						96
Segment Operating Profit						$	2,514					$	673					$	3,187
Corporate & Other																		(1,259)
Total Operating Profit																		$	1,928

(a)Other (income) and expense, net primarily includes the effects of changes in exchange rates on monetary assets and liabilities for subsidiaries where we have adopted highly inflationary accounting.

			80			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Depreciation and amortization expense by segment:

						Year Ended December 31
						2025						2024						2023
NA						$	481					$	440					$	430
IPC						247						200						205
Total Segment Depreciation and Amortization						728						640						635
Corporate & Other						9						8						3
Total**(a)**						$	737					$	648					$	638

(a) Excludes discontinued operations. See Note 3 for depreciation and amortization of discontinued operations.

Capital spending by segment:

						Year Ended December 31
						2025						2024						2023
NA						$	714					$	443					$	455
IPC						157						157						196
Total Segment Capital Spending						871						600						651
Corporate & Other						149						5						15
Total**(a)**						$	1,020					$	605					$	666

(a) Excludes discontinued operations. See Note 3 for capital spending of discontinued operations.

Sales of Principal Products:

						Year Ended December 31
						2025						2024						2023
Baby and Child Care						$	6,773					$	7,056					$	7,054
Family Care						4,056						3,928						4,024
Professional						1,841						2,152						2,385
Adult Care						1,947						1,864						1,809
Feminine Care						1,706						1,721						1,787
All Other						124						84						87
Total						$	16,447					$	16,805					$	17,146

Net sales in the U.S. to third parties totaled $10.1 billion in 2025 and $10.4 billion in 2024 and 2023. No other individual country's net sales exceed 10% of net sales from continuing operations.

Net sales to Walmart Inc. as a percent of our net sales from continuing operations were approximately 16% in 2025 and 2024 and 15% in 2023. Net sales to Walmart Inc. were primarily in the NA segment.

Note 17. Supplemental Data

Supplemental Income Statement Data

						Year Ended December 31
						2025						2024						2023
Advertising expense						$	1,020					$	1,122					$	1,026
Research expense						326						328						303

			81			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Equity Companies' Data

						Net Sales						Gross Profit						Operating Profit						Net Income						Corporation’s Share of Net Income
2025						$	3,017					$	932					$	644					$	410					$	196
2024						3,180						1,063						727						451						216
2023						3,135						1,003						683						410						196
						Current Assets						Non-Current Assets						Current Liabilities						Non-Current Liabilities						Stockholders’ Equity
2025						$	1,390					$	1,315					$	923					$	1,287					$	495
2024						1,536						1,135						1,050						1,177						444
2023						1,974						1,362						1,175						1,687						474

Equity companies are accounted for under the equity method of accounting and are principally engaged in the manufacture and sale of products similar to those produced by the Company. As of December 31, 2025, our ownership interest in Kimberly-Clark de Mexico, S.A.B. de C.V. and subsidiaries ("KCM") was 47.9%. KCM is partially owned by the public, and its stock is publicly traded in Mexico. As of December 31, 2025, our investment in this equity company was $266, and the estimated fair value of the investment was $2.9 billion based on the market price of publicly traded shares. Our other equity ownership interests are not significant to our Consolidated Financial Statements.

As of December 31, 2025, undistributed net income of equity companies included in consolidated retained earnings was $1.2 billion.

Supplemental Balance Sheet Data

						December 31
Summary of Accounts Receivable, Net						2025						2024
From customers						$	1,783					$	1,650
Other						154						126
Less allowance for doubtful accounts and sales discounts						(45)						(48)
Total						$	1,892					$	1,728

						December 31
						2025																		2024
Summary of Inventories by Major Class						LIFO						Non-LIFO						Total						LIFO						Non-LIFO						Total
Raw materials						$	114					$	197					$	311					$	122					$	201					$	323
Work in process						111						38						149						116						32						148
Finished goods						484						468						952						510						428						938
Supplies and other						—						254						254						—						243						243
						709						957						1,666						748						904						1,652
Excess of FIFO or weighted-average cost over LIFO cost						(191)						—						(191)						(200)						—						(200)
Total						$	518					$	957					$	1,475					$	548					$	904					$	1,452

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.

			82			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

						December 31
Summary of Other Current Assets						2025						2024
Prepaid expenses						$	304					$	292
Time deposits						86						171
Derivative assets						52						114
Other						93						117
Total						$	535					$	694

						December 31
Summary of Property, Plant and Equipment, Net						2025						2024
Land						$	134					$	110
Buildings						2,354						2,314
Machinery and equipment						12,820						12,498
Construction in progress						1,201						780
						16,509						15,702
Less accumulated depreciation						(9,734)						(9,418)
Total						$	6,775					$	6,284

Property, plant and equipment, net in the U.S. as of December 31, 2025 and 2024 was $4.9 billion and $4.4 billion, respectively. Depreciation expense was $735, $641 and $627 for the years ended December 31, 2025, 2024 and 2023, respectively.

						December 31
Summary of Accrued Expenses and Other Current Liabilities						2025						2024
Accrued advertising and promotion						$	459					$	486
Accrued salaries and wages						284						394
Accrued rebates						195						204
Accrued taxes - income and other						249						253
Operating leases						128						116
2024 Transformation Initiative liabilities						62						130
Accrued interest						91						99
Derivative liabilities						96						82
Other						324						327
Total						$	1,888					$	2,091

			83			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Supplemental Cash Flow Statement Data

The Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. As a result, supplemental cash flow data shown below reflects Kimberly Clark's consolidated results for all periods presented.

Summary of Cash Flow Effects of Operating Working Capital						Year Ended December 31
			2025						2024						2023
Accounts receivable						$	(58)					$	48					$	127
Inventories						70						10						290
Trade accounts payable						(147)						179						(109)
Accrued expenses						(325)						106						125
Accrued income taxes						(143)						(110)						122
Derivatives						(41)						79						(15)
Currency and other						141						(134)						42
Total						$	(503)					$	178					$	582

						Year Ended December 31
Other Cash Flow Data						2025						2024						2023
Interest paid						$	248					$	268					$	277

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 $1.1 billion and $1.0 billion as of December 31, 2025 and 2024, of which $184 and $185, respectively, are reported as discontinued operations. Amounts are recorded within Trade accounts payable and Current liabilities of discontinued operations.

The rollforward of the Company's outstanding obligations confirmed as valid under its supplier finance program are as follows:

						Year Ended December 31
						2025						2024
Confirmed obligations outstanding at the beginning of the year						$	1,004					$	960
Invoices confirmed during the year						3,239						3,033
Confirmed invoices paid during the year						(3,184)						(2,989)
Currency and other						(2)						—
Confirmed obligations outstanding at the end of the year						$	1,057					$	1,004

			84			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

Note 18. Quarterly Financial Data (Unaudited)

As discussed in Note 1, as a result of the IFP Transaction, the results of the IFP Business are reported as discontinued operations. The following tables provide unaudited summarized financial information based on our Consolidated Financial Statements after giving effect to the reporting of the IFP Business as discontinued operations for each quarter of fiscal year 2025 and 2024.

						2025
(In millions, except per share amounts)						First Quarter						Second Quarter						Third Quarter						Fourth Quarter
Net Sales						$	4,054					$	4,163					$	4,150					$	4,080
Gross Profit						1,509						1,456						1,493						1,465
Income from Continuing Operations						470						444						344						391
Income from Discontinued Operations, Net of Income Taxes						103						68						110						119
Net Income Attributable to Kimberly-Clark Corporation						567						509						446						499
Earnings Per Share - Basic:
Continuing operations						$	1.40					$	1.33					$	1.01					$	1.14
Discontinued operations						0.31						0.20						0.33						0.36
Basic Earnings per Share						$	1.71					$	1.53					$	1.34					$	1.50
Earnings Per Share - Diluted:
Continuing operations						$	1.39					$	1.33					$	1.01					$	1.14
Discontinued operations						0.31						0.20						0.33						0.36
Diluted Earnings per Share						$	1.70					$	1.53					$	1.34					$	1.50

						2024
(In millions, except per share amounts)						First Quarter						Second Quarter						Third Quarter						Fourth Quarter
Net Sales						$	4,326					$	4,231					$	4,144					$	4,104
Gross Profit						1,686						1,594						1,564						1,445
Income from Continuing Operations						556						464						823						349
Income from Discontinued Operations, Net of Income Taxes						102						89						92						103
Net Income Attributable to Kimberly-Clark Corporation						647						544						907						447
Earnings Per Share - Basic:
Continuing operations						$	1.62					$	1.35					$	2.43					$	1.03
Discontinued operations						0.30						0.26						0.27						0.31
Basic Earnings per Share						$	1.92					$	1.61					$	2.70					$	1.34
Earnings Per Share - Diluted:
Continuing operations						$	1.61					$	1.35					$	2.42					$	1.03
Discontinued operations						0.30						0.26						0.27						0.31
Diluted Earnings per Share						$	1.91					$	1.61					$	2.69					$	1.34

			85			KIMBERLY-CLARK CORPORATION - 2025 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, 2025 and 2024, 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, 2025, and the related notes and the financial statement schedules 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, 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, 2025, 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 12, 2026, 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 estimate for trade promotions using customer sales associated with valid promotion events, actual promotion claims, and forecasted information about amounts earned by the customer but not yet claimed.

We identified the reductions to revenue associated with trade promotions and the related accrual as a critical audit matter because of the complexity of the Corporation’s processes related to trade promotions, volume of trade

			86			KIMBERLY-CLARK CORPORATION - 2025 Annual Report

promotion programs, and the subjectivity of estimating future customer claims. This required an extensive audit effort due to the complexity and subjectivity of estimating future customer claims.

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 Information Technology (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 internal 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 substantive 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 adjusted for changes in data, if warranted. These adjustments to our expectation may consist of changes in product mix, sales margin, or inflation, and are 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 12, 2026

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

			87			KIMBERLY-CLARK CORPORATION - 2025 Annual Report