Kimberly-Clark 10-Q 2022-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 1-225

KIMBERLY-CLARK CORPORATION

(Exact name of registrant as specified in its charter

Delaware						39-0394230
(State or other jurisdiction of incorporation)						(I.R.S. Employer Identification No.)

P.O. Box 619100

Dallas, TX

75261-9100

(Address of principal executive offices)

(Zip code)

(972) 281-1200

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock			KMB			New York Stock Exchange
0.625% Notes due 2024			KMB24			New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer			x						Accelerated filer			☐
Non-accelerated filer			☐						Smaller reporting company			☐
									Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of July 19, 2022, there were 337,622,288 shares of the Corporation's common stock outstanding.

Table of Contents

PART I – FINANCIAL INFORMATION			1
Item 1. Financial Statements			1
UNAUDITED CONSOLIDATED INCOME STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021			1
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021			2
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2022 (UNAUDITED) AND DECEMBER 31, 2021			3
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021			4
UNAUDITED CONSOLIDATED CASH FLOW STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021			6
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS			7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			14
Item 4. Controls and Procedures			21
PART II – OTHER INFORMATION			22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			22
Item 6. Exhibits			23

PART I – FINANCIAL INFORMATION

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

(Unaudited)

						Three Months Ended June 30												Six Months Ended June 30
(Millions of dollars, except per share amounts)						2022						2021						2022						2021
Net Sales						$	5,063					$	4,722					$	10,158					$	9,465
Cost of products sold						3,534						3,242						7,109						6,396
Gross Profit						1,529						1,480						3,049						3,069
Marketing, research and general expenses						906						854						1,792						1,669
Other (income) and expense, net						2						13						(57)						17
Operating Profit						621						613						1,314						1,383
Nonoperating expense						(27)						(55)						(31)						(61)
Interest income						1						2						3						3
Interest expense						(68)						(65)						(133)						(128)
Income Before Income Taxes and Equity Interests						527						495						1,153						1,197
Provision for income taxes						(115)						(113)						(229)						(260)
Income Before Equity Interests						412						382						924						937
Share of net income of equity companies						29						28						52						67
Net Income						441						410						976						1,004
Net income attributable to noncontrolling interests						(4)						(6)						(16)						(16)
Net Income Attributable to Kimberly-Clark Corporation						$	437					$	404					$	960					$	988
Per Share Basis
Net Income Attributable to Kimberly-Clark Corporation
Basic						$	1.30					$	1.20					$	2.85					$	2.92
Diluted						$	1.29					$	1.19					$	2.84					$	2.92

See notes to the unaudited interim consolidated financial statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

						Three Months Ended June 30												Six Months Ended June 30
(Millions of dollars)						2022						2021						2022						2021
Net Income						$	441					$	410					$	976					$	1,004
Other Comprehensive Income (Loss), Net of Tax
Unrealized currency translation adjustments						(267)						78						(214)						(137)
Employee postretirement benefits						5						11						16						29
Other						43						22						34						58
Total Other Comprehensive Income (Loss), Net of Tax						(219)						111						(164)						(50)
Comprehensive Income						222						521						812						954
Comprehensive (income) loss attributable to noncontrolling interests						6						(6)						(2)						(9)
Comprehensive Income Attributable to Kimberly-Clark Corporation						$	228					$	515					$	810					$	945

See notes to the unaudited interim consolidated financial statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(2022 Data is Unaudited)

(Millions of dollars)						June 30, 2022						December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents						$	311					$	270
Accounts receivable, net						2,469						2,207
Inventories						2,278						2,239
Other current assets						604						849
Total Current Assets						5,662						5,565
Property, Plant and Equipment, Net						7,931						8,097
Investments in Equity Companies						270						290
Goodwill						2,102						1,840
Other Intangible Assets, Net						893						810
Other Assets						1,256						1,235
TOTAL ASSETS						$	18,114					$	17,837
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Debt payable within one year						$	1,031					$	433
Trade accounts payable						3,701						3,840
Accrued expenses and other current liabilities						2,089						2,096
Dividends payable						388						380
Total Current Liabilities						7,209						6,749
Long-Term Debt						7,698						8,141
Noncurrent Employee Benefits						829

Showing the first 8K of 67K characters. Open the full section

Introduction

This management's discussion and analysis ("MD&A") of financial condition and results of operations is intended to provide investors with an understanding of our recent performance, financial condition and prospects. Dollar amounts are reported in millions, except per share dollar amounts, unless otherwise noted. The following will be discussed and analyzed:

• Overview of Second Quarter 2022 Results

• Results of Operations and Related Information

• Liquidity and Capital Resources

• Information Concerning Forward-Looking Statements

We describe our business outside North America in two groups – Developing and Emerging Markets ("D&E") and Developed Markets. D&E markets comprise Eastern Europe, the Middle East and Africa, Latin America and Asia-Pacific, excluding Australia and South Korea. Developed Markets consist of Western and Central Europe, Australia and South Korea. We have three reportable business segments: Personal Care, Consumer Tissue and K-C Professional. These business segments are described in greater detail in Note 7 to the unaudited interim consolidated financial statements.

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

This section presents a discussion and analysis of our second quarter 2022 net sales, operating profit and other information relevant to an understanding of the results of operations. In addition, we provide commentary regarding organic sales growth, which describes the impact of changes in volume, net selling prices and product mix on net sales. Change in foreign currency exchange rates, acquisitions and exited businesses also impact the year-over-year change in net sales. Our analysis compares the three and six months ended June 30, 2022 results to the same periods in 2021.

In March 2022, we implemented significant adjustments to our business in Russia and suspended substantially all media, advertising and promotional activity as well as capital investments in our sole manufacturing facility. Consistent with the humanitarian nature of our products, we are manufacturing and selling only essential items, such as baby diapers and feminine pads, which are critical to the health and hygiene of women, girls and babies, but our ability to manufacture these items may change as the situation evolves. Our Russia business has historically represented approximately 1 to 2 percent of our net sales, operating profit and total assets. We are actively monitoring the situation, and as the business, geopolitical and regulatory environment concerning Russia evolves, our assets may be partially or fully impaired. We are also monitoring the increased risk of cyber-based attacks as a result of the Russian invasion of Ukraine and have implemented heightened cyber-security monitoring of our systems designed to address the evolving threat landscape. We are experiencing increased input costs as a result of inflation and supply chain complexities related to the Russian invasion that are having a negative impact on our operations. For a more complete discussion of the risks we encounter in our business, please refer to Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021.

Throughout this MD&A, we refer to financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP, and are therefore referred to as non-GAAP financial measures. These measures include adjusted gross and operating profit, adjusted net income, adjusted earnings per share and adjusted effective tax rate. We believe these measures provide our investors with additional information about our underlying results and trends, as well as insight into some of the financial measures used to evaluate management.

Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measures, and they should be read only in conjunction with our unaudited interim consolidated financial statements prepared in accordance with GAAP. There are limitations to these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies due to potential differences in methods of calculation and items being excluded. We compensate for these limitations by using these non-GAAP financial measures as a supplement to the GAAP measures and by providing reconciliations of the non-GAAP and comparable GAAP financial measures.

The non-GAAP financial measures exclude the following items for the relevant time periods as indicated in the reconciliations included later in this MD&A:

• Pension settlements - In the second quarter of 2022, pension settlement charges of $24 pre-tax ($18 after tax) were recognized related to lump-sum distributions from pension plan assets exceeding the total of annual service and interest costs resulting in a recognition of deferred actuarial losses.

• Acquisition of controlling interest in Thinx – In the first quarter of 2022, we increased our investment in Thinx. As a result of this transaction, a net benefit was recognized of $64 pre-tax ($68 after tax), primarily due to the non-recurring, non-cash gain recognized related to the remeasurement of the carrying value of our previously held equity investment to fair value partially offset by transaction and integration costs. See Item 1, Note 2 to the unaudited interim consolidated financial statements for details.

The non-GAAP financial measures also exclude charges in 2021 for the 2018 Global Restructuring Program as indicated in the reconciliations included later in this MD&A. In 2018, we initiated this restructuring in order to reduce our structural cost base by streamlining and simplifying our manufacturing supply chain and overhead organization. As a result, we recognized restructuring charges in 2018, 2019, 2020 and 2021 for this program. Restructuring actions were completed in 2021.

Overview of Second Quarter 2022 Results

• Net sales of $5.1 billion increased 7 percent compared to the year-ago period, including organic sales growth of 9 percent.

• Operating profit was $621 in 2022 and $613 in 2021. Net Income Attributable to Kimberly-Clark Corporation was $437 in 2022 compared to $404 in 2021, and diluted earnings per share were $1.29 in 2022 compared to $1.19 in 2021. Results in 2022 include pension settlement charges, compared to 2021 results, which include charges related to the 2018 Global Restructuring Program.

Results of Operations and Related Information

This section presents a discussion and analysis of our second quarter 2022 net sales, operating profit and other information relevant to an understanding of the results of operations.

Consolidated

Selected Financial Results			Three Months Ended June 30																		Six Months Ended June 30
			2022						2021						Percent Change						2022						2021						Percent Change
Net Sales:
North America			$	2,657					$	2,393					+11		%				$	5,271					$	4,744					+11		%
Outside North America			2,479						2,405						+3		%				5,025						4,875						+3		%
Intergeographic sales			(73)						(76)						-4		%				(138)						(154)						-10		%
Total Net Sales			5,063						4,722						+7		%				10,158						9,465						+7		%
Operating Profit:
North America			497						488						+2		%				956						997						-4		%
Outside North America			232						272						-15		%				509						639						-20		%
Corporate & Other(a)			(106)						(134)						N.M.						(208)						(236)						N.M.
Other (income) and expense, net(a)			2						13						-85		%				(57)						17						N.M.
Total Operating Profit			621						613						+1		%				1,314						1,383						-5		%
Share of net income of equity companies			29						28						+4		%				52						67						-22		%
Net Income Attributable to Kimberly-Clark Corporation			437						404						+8		%				960						988						-3		%
Diluted Earnings per Share			1.29						1.19						+8		%				2.84						2.92						-3		%

(a) Corporate & Other and Other (income) and expense, net include income and expense not associated with the business segments, including adjustments as indicated in the Non-GAAP Reconciliations.

N.M. - Not Meaningful

GAAP to Non-GAAP Reconciliations of Selected Financial Results

						Three Months Ended June 30, 2022
						As Reported						Pension Settlements												As Adjusted Non-GAAP
Nonoperating expense						$	(27)					$	(24)											$	(3)
Provision for income taxes						(115)						6												(121)
Effective tax rate						21.8		%				—												22.0		%
Net Income Attributable to Kimberly-Clark Corporation						437						(18)												455
Diluted Earnings per Share(a)						1.29						(0.05)												1.34

						Three Months Ended June 30, 2021
						As Reported						2018 Global Restructuring Program												As Adjusted Non-GAAP
Cost of products sold						$	3,242					$	25											$	3,217
Gross Profit						1,480						(25)												1,505
Marketing, research and general expenses						854						30												824
Other (income) and expense, net						13						8												5
Operating Profit						613						(63)												676
Nonoperating expense						(55)						(56)												1
Provision for income taxes						(113)						25												(138)
Effective tax rate						22.8		%				—												22.5		%
Net Income Attributable to Kimberly-Clark Corporation						404						(94)												498
Diluted Earnings per Share(a)						1.19						(0.28)												1.47

						Six Months Ended June 30, 2022
						As Reported						Acquisition of Controlling Interest in Thinx												Pension Settlements						As Adjusted Non-GAAP
Marketing, research and general expenses						$	1,792					$	21											$	—					$	1,771
Other (income) and expense, net						(57)						(85)												—						28
Operating Profit						1,314						64												—						1,250
Nonoperating expense						(31)						—												(24)						(7)
Provision for income taxes						(229)						4												6						(239)
Effective tax rate						19.9		%				—												—						21.5		%
Net Income Attributable to Kimberly-Clark Corporation						960						68												(18)						910
Diluted Earnings per Share(a)						2.84						0.20												(0.05)						2.69

						Six Months Ended June 30, 2021
						As Reported						2018 Global Restructuring Program												As Adjusted Non-GAAP
Cost of products sold						$	6,396					$	50											$	6,346
Gross Profit						3,069						(50)												3,119
Marketing, research and general expenses						1,669						39												1,630
Other (income) and expense, net						17						8												9
Operating Profit						1,383						(97)												1,480
Nonoperating expense						(61)						(56)												(5)
Provision for income taxes						(260)						32												(292)
Effective tax rate						21.7		%				—												21.6		%
Net income attributable to noncontrolling interests						(16)						1												(17)
Net Income Attributable to Kimberly-Clark Corporation						988						(120)												1,108
Diluted Earnings per Share(a)						2.92						(0.35)												3.27

(a) "As Adjusted Non-GAAP" may not equal "As Reported" plus "Adjustments" as a result of rounding.

Analysis of Consolidated Results

Net Sales						Percent Change												Adjusted Operating Profit						Percent Change
						Three Months Ended June 30						Six Months Ended June 30												Three Months Ended June 30						Six Months Ended June 30
Volume						(1)						1						Volume						(5)						(3)
Net Price						9						7						Net Price						60						47
Mix/Other						1						1						Input Costs						(60)						(59)
Currency						(2)						(2)						Cost Savings(c)						7						7
Total(a)						7						7						Currency Translation						(3)						(2)
																		Other(d)						(7)						(6)
Organic(b)						9						10						Total						(8)						(16)

(a) Total may not equal the sum of volume, net price, mix/other and currency due to rounding.

(b) Combined impact of changes in volume, net price and mix/other.

(c) Benefits of the FORCE (Focused On Reducing Costs Everywhere) program.

(d) Includes impact of changes in product mix, marketing, research and general expenses, foreign currency transaction effects and other manufacturing costs.

Net sales in the second quarter of $5.1 billion increased 7 percent compared to the year ago period. Changes in foreign currency exchange rates reduced sales by 2 percent. Organic sales increased 9 percent as changes in net selling prices and product mix increased sales by 9 percent and 1 percent, respectively, and volumes declined 1 percent.

In North America, organic sales increased 11 percent in consumer products and increased 8 percent in K-C Professional. Outside North America, organic sales rose 8 percent in D&E markets and 9 percent in developed markets.

Operating profit in the second quarter was $621 in 2022 and $613 in 2021. Excluding the charges related to the 2018 Global Restructuring Program, 2021 adjusted operating profit was $676. Results were impacted by $405 of higher input costs. Higher marketing, research and general expense as well as unfavorable foreign currency transaction effects reduced operating profit in the quarter. Results benefited from organic sales growth and $45 of cost savings from our FORCE program.

The second quarter effective tax rate was 21.8 percent in 2022 and 22.8 percent in 2021. The second quarter adjusted effective tax was 22.0 percent in 2022 and 22.5 percent in 2021.

Our share of net income of equity companies in the second quarter was $29 in 2022 and $28 in 2021.

Diluted net income per share for the second quarter was $1.29 in 2022 and $1.19 in 2021. Second quarter adjusted earnings per share were $1.34 in 2022, a decrease of 9 percent compared to $1.47 in 2021.

Year-to-date net sales of $10.2 billion increased 7 percent compared to the year ago period. Organic sales increased 10 percent, as changes in net selling prices increased sales by 7 percent, volumes increased 1 percent and changes in product mix increased sales by approximately 1 percent. Changes in foreign currency exchange rates decreased sales by approximately 2 percent. Year-to-date operating profit was $1,314 in 2022 and $1,383 in 2021. Results in 2022 include the net benefit of the acquisition of a controlling interest in Thinx. Results in 2021 include charges related to the 2018 Global Restructuring Program. Year-to-date adjusted operating profit was $1,250 in 2022 and $1,480 in 2021. Results were impacted by higher input costs, higher marketing, research and general spending and unfavorable foreign currency effects. Results benefited from organic sales growth, $95 of FORCE savings and lower other manufacturing costs. Through six months, diluted net income per share was $2.84 in 2022 and $2.92 in 2021. Year-to-date adjusted earnings per share were $2.69 in 2022 and $3.27 in 2021.

Results by Business Segments

Personal Care

						Three Months Ended June 30												Six Months Ended June 30																		Three Months Ended June 30												Six Months Ended June 30
						2022						2021						2022						2021												2022						2021						2022						2021
Net Sales						$	2,710					$	2,517					$	5,439					$	4,979					Operating Profit						$	466					$	454					$	941					$	935
Net Sales						Percent Change												Percent Change												Operating Profit						Percent Change												Percent Change
Volume												(1)												1						Volume												(3)												(1)
Net Price												9												9						Net Price												52												46
Mix/Other												1												2						Input Costs												(39)												(42)
Acquisition/Exited Businesses(e)												1												—						Cost Savings(c)												7												6
Currency												(2)												(2)						Currency Translation												(3)												(3)
Total(a)												8												9						Other(d)												(11)												(5)
Organic(b)												9												11						Total												3												1

(a) Total may not equal the sum of volume, net price, mix/other, acquisition/exited businesses and currency due to rounding.

(b) Combined impact of changes in volume, net price and mix/other.

(c) Benefits of the FORCE program.

(d) Includes impact of changes in product mix, marketing, research and general expenses, foreign currency transaction effects and other manufacturing costs.

(e) Combined impact of the acquisition of Thinx Inc. and exited businesses in conjunction with the 2018 Global Restructuring Program.

Second quarter net sales in North America increased 10 percent. Changes in net selling prices increased sales by 9 percent, and the Thinx acquisition increased sales by 1 percent. Organic sales increased in all personal care segments.

Net sales in D&E markets increased 7 percent. Changes in net selling prices and product mix increased sales by 12 percent and 3 percent, respectively, while volumes declined 6 percent. Changes in foreign currency exchange rates decreased sales by 2 percent. Organic sales growth was driven by Latin America and China.

Net sales in developed markets outside North America increased 1 percent. Volumes increased 5 percent, and changes in net selling prices and product mix increased sales by 4 percent and 1 percent, respectively. Changes in foreign currency exchange rates reduced sales by 9 percent.

Operating profit of $466 increased 3 percent. Results benefited from organic sales growth and cost savings. The comparison was impacted by input cost inflation, higher marketing, research and general spending as well as unfavorable foreign currency effects.

Consumer Tissue

						Three Months Ended June 30												Six Months Ended June 30																		Three Months Ended June 30												Six Months Ended June 30
						2022						2021						2022						2021												2022						2021						2022						2021
Net Sales						$	1,537					$	1,424					$	3,105					$	2,934					Operating Profit						$	178					$	196					$	349					$	465
Net Sales						Percent Change												Percent Change												Operating Profit						Percent Change												Percent Change
Volume												3												3						Volume												—												—
Net Price												7												6						Net Price												52												37
Mix/Other												1												1						Input Costs												(80)												(72)
Acquisition/Exited Businesses(e)												—												(1)						Cost Savings(c)												4												6
Currency												(3)												(2)						Currency Translation												(1)												(1)
Total(a)												8												6						Other(d)												16												5
Organic(b)												11												9						Total												(9)												(25)

(a) Total may not equal the sum of volume, net price, mix/other, acquisition/exited businesses and currency due to rounding.

(b) Combined impact of changes in volume, net price and mix/other.

(c) Benefits of the FORCE program.

(d) Includes impact of changes in marketing, research and general expenses, foreign currency transaction effects and other manufacturing costs.

(e) Impact of exited businesses in conjunction with the 2018 Global Restructuring Program.

Second quarter net sales in North America increased 14 percent. Volumes grew 7 percent, and changes in net selling prices and product mix increased sales by 6 percent and 1 percent, respectively. The volume growth reflects comparison to the COVID-related consumer and retailer inventory destocking in the year-ago period.

Net sales in D&E markets increased 4 percent. Changes in net selling prices and product mix increased sales by 9 percent and 3 percent, respectively, while volumes were down 7 percent. Changes in foreign currency exchange rates decreased sales by 1 percent.

Net sales in developed markets outside North America were even with year-ago. Changes in net selling prices increased sales by approximately 9 percent, and volumes grew 2 percent. Changes in foreign currency exchange rates decreased sales by 9 percent, and exited businesses related to the 2018 Global Restructuring program reduced sales by 1 percent.

Operating profit of $178 decreased 9 percent. The comparison was impacted by input cost inflation and higher marketing, research and general spending. Results benefited from organic sales growth, lower other manufacturing costs and cost savings.

K-C Professional

						Three Months Ended June 30												Six Months Ended June 30																		Three Months Ended June 30												Six Months Ended June 30
						2022						2021						2022						2021												2022						2021						2022						2021
Net Sales						$	802					$	765					$	1,582					$	1,517					Operating Profit						$	85					$	110					$	175					$	236
Net Sales						Percent Change												Percent Change												Operating Profit						Percent Change												Percent Change
Volume												(3)												(2)						Volume												(20)												(16)
Net Price												9												7						Net Price												62												43
Mix/Other												2												2						Input Costs												(64)												(64)
Currency												(3)												(2)						Cost Savings(c)												7												7
Total(a)												5												4						Currency Translation												(1)												(1)
																														Other(d)												(7)												5
Organic(b)												7												7						Total												(23)												(26)

(a) Total may not equal the sum of volume, net price, mix/other and currency due to rounding.

(b) Combined impact of changes in volume, net price and mix/other.

(c) Benefits of the FORCE program.

(d) Includes impact of changes in product mix, marketing, research and general expenses, foreign currency transaction effects and other manufacturing costs.

Second quarter net sales in North America increased 8 percent. Changes in net selling prices and product mix increased sales by approximately 8 percent and 2 percent, respectively, while volumes declined by 1 percent. Washroom products sales were up strong double-digits, while sales of safety products decreased versus a strong year-ago.

Net sales in D&E markets increased 4 percent. Changes in net selling prices and product mix increased sales by 7 percent and 1 percent, respectively, while volumes declined 2 percent. Changes in foreign currency exchange rates decreased sales by 2 percent.

Net sales in developed markets outside North America decreased 3 percent. Changes in foreign currency exchange rates reduced sales by 9 percent. Changes in net selling prices and product mix increased sales by 14 percent and 2 percent, respectively, while volumes declined 10 percent.

Operating profit of $85 decreased 23 percent. The comparison was impacted by input cost inflation, lower volumes and higher marketing, research and general spending. Results benefited from higher net selling prices and cost savings.

Liquidity and Capital Resources

Cash Provided by Operations

Cash provided by operations was $944 for the first six months of 2022 compared to $886 in the prior year. The increase was driven by favorable working capital, partially offset by lower operating profit.

Investing

During the six months ended June 30, 2022, our capital spending was $470 compared to $499 in the prior year. We anticipate that full year capital spending will be $1.0 billion to $1.1 billion. Acquisition of business, net of cash acquired of $46 in the first six months of 2022 reflected the acquisition of a controlling interest of Thinx.

Financing

Our short-term debt, which consists of U.S. commercial paper with original maturities up to 90 days and/or other similar short-term debt issued by non-U.S. subsidiaries, was $0.7 billion as of June 30, 2022 (included in Debt payable within one year on the consolidated balance sheet). The average month-end balance of short-term debt for the second quarter of 2022 was $0.8 billion. These short-term borrowings provide supplemental funding to support our operations. The level of short-term debt generally fluctuates depending upon the amount of operating cash flows and the timing of customer receipts and payments for items such as dividends and income taxes.

At June 30, 2022 and December 31, 2021, total debt was $8.7 billion and $8.6 billion, respectively.

We maintain a $2.0 billion revolving credit facility which expires in June 2026 and a $775 revolving credit facility which expires in June 2023. These facilities, currently unused, support our commercial paper program, and would provide liquidity in the event our access to the commercial paper markets is unavailable for any reason.

The United Kingdom’s Financial Conduct Authority, which regulates the London Interbank Offered Rate (“LIBOR”), is in the process of phasing out LIBOR with completion of the phase out expected by June 30, 2023. We have evaluated the potential effect of the elimination of LIBOR and do not expect the effect to be material. Accounting guidance has been issued to ease the transition to alternative reference rates from a financial reporting perspective.

We repurchase shares of Kimberly-Clark common stock from time to time pursuant to publicly announced share repurchase programs. During the first six months of 2022, we repurchased 388 thousand shares of our common stock at a cost of $50 through a broker in the open market. We are targeting full-year 2022 share repurchases of approximately $100, subject to market conditions.

We believe that our ability to generate cash from operations and our capacity to issue short-term and long-term debt are adequate to fund working capital, capital spending, pension contributions, dividends and other needs for the foreseeable future. Further, we do not expect restrictions or taxes on repatriation of cash held outside of the U.S. to have a material effect on our overall business, liquidity, financial condition or results of operations for the foreseeable future.

Information Concerning Forward-Looking Statements

Certain matters contained in this report concerning the business outlook, including raw material, energy and other input costs, the anticipated cost savings from our FORCE program, cash flow and uses of cash, growth initiatives, innovations, marketing and other spending, net sales, anticipated currency rates and exchange risks, including the impact in Argentina and Turkey, effective tax rate, contingencies and anticipated transactions of Kimberly-Clark, including dividends, share repurchases and pension contributions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform

Act of 1995 and are based upon management's expectations and beliefs concerning future events impacting Kimberly-Clark. There can be no assurance that these future events will occur as anticipated or that our results will be as estimated. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to publicly update them.

The assumptions used as a basis for the forward-looking statements include many estimates that, among other things, depend on the achievement of future cost savings and projected volume increases. In addition, many factors outside our control, including the war in Ukraine (including the related responses of consumers, customers, and suppliers and sanctions issued by the U.S., the European Union, Russia or other countries), pandemics (including the ongoing COVID-19 outbreak and the related responses of governments, consumers, customers, suppliers and employees), epidemics, fluctuations in foreign currency exchange rates, the prices and availability of our raw materials, supply chain disruptions, changes in customer preferences, severe weather conditions, government trade or similar regulatory actions, potential competitive pressures on selling prices for our products, energy costs, general economic and political conditions globally and in the markets in which we do business, as well as our ability to maintain key customer relationships, could affect the realization of these estimates.

The factors described under Item 1A, "Risk Factors" in this Form 10-K, or in our other SEC filings, among others, could cause our future results to differ from those expressed in any forward-looking statements made by us or on our behalf. Other factors not presently known to us or that we presently consider immaterial could also affect our business operations and financial results.

As of June 30, 2022, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of June 30, 2022. There were no changes in our internal control over financial reporting during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We repurchase shares of Kimberly-Clark common stock from time to time pursuant to publicly announced share repurchase programs. All our share repurchases during the second quarter of 2022 were made through a broker in the open market.

The following table contains information for shares repurchased during the second quarter of 2022. None of the shares in this table were repurchased directly from any of our officers or directors.

Period (2022)						Total Number of Shares Purchased**(a)**						Average Price Paid Per Share						Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs						Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs**(b)**
April 1 to April 30						78,100						$	128.55					38,602,483						41,397,517
May 1 to May 31						46,000						135.58						38,648,483						41,351,517
June 1 to June 30						48,698						128.58						38,697,181						41,302,819
Total						172,798

(a)Share repurchases were made pursuant to a share repurchase program authorized by our Board of Directors on November 13, 2014. This program allows for the repurchase of 40 million shares in an amount not to exceed $5 billion (the "2014 Program").

(b)Includes shares under the 2014 Program, as well as available shares under a share repurchase program authorized by our Board of Directors on January 22, 2021 that allows for the repurchase of 40 million shares in an amount not to exceed $5 billion.

(a)Exhibits

Exhibit No. (10)n. Form of Award Agreements under 2021 Equity Participation Plan for Nonqualified Stock Options, filed herewith.

Exhibit No. (31)a. Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), filed herewith.

Exhibit No. (31)b. Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), filed herewith.

Exhibit No. (32)a. Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, furnished herewith.

Exhibit No. (32)b. Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, furnished herewith.

Exhibit No. (101).INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

Exhibit No. (101).SCH XBRL Taxonomy Extension Schema Document

Exhibit No. (101).CAL XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit No. (101).DEF XBRL Taxonomy Extension Definition Linkbase Document

Exhibit No. (101).LAB XBRL Taxonomy Extension Label Linkbase Document

Exhibit No. (101).PRE XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit No. 104 The cover page from this Current Report on Form 10-Q formatted as Inline XBRL

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

						KIMBERLY-CLARK CORPORATION
						(Registrant)
By:						/s/ Andrew S. Drexler
						Andrew S. Drexler
						Vice President and Controller
						(principal accounting officer)

July 26, 2022