Kimberly-Clark 10-Q 2024-03-31

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 March 31, 2024

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

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 April 16, 2024, there were 336,709,077 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 MONTHS ENDED MARCH 31, 2024 AND 2023			1
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023			2
CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2024 (UNAUDITED) AND DECEMBER 31, 2023			3
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023			4
UNAUDITED CONSOLIDATED CASH FLOW STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023			5
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS			6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			15
Item 4. Controls and Procedures			22
PART II – OTHER INFORMATION			23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			23
Item 5. Other Information			23
Item 6. Exhibits			24

PART I – FINANCIAL INFORMATION

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS

(Unaudited)

						Three Months Ended March 31
(Millions of dollars, except per share amounts)						2024						2023
Net Sales						$	5,149					$	5,195
Cost of products sold						3,238						3,469
Gross Profit						1,911						1,726
Marketing, research and general expenses						1,039						924
Other (income) and expense, net						19						15
Operating Profit						853						787
Nonoperating expense						(15)						(16)
Interest income						10						7
Interest expense						(67)						(73)
Income Before Income Taxes and Equity Interests						781						705
Provision for income taxes						(184)						(173)
Income Before Equity Interests						597						532
Share of net income of equity companies						61						43
Net Income						658						575
Net income attributable to noncontrolling interests						(11)						(9)
Net Income Attributable to Kimberly-Clark Corporation						$	647					$	566
Per Share Basis
Net Income Attributable to Kimberly-Clark Corporation
Basic						$	1.92					$	1.68
Diluted						$	1.91					$	1.67

See notes to the unaudited interim consolidated financial statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

						Three Months Ended March 31
(Millions of dollars)						2024						2023
Net Income						$	658					$	575
Other Comprehensive Income (Loss), Net of Tax
Unrealized currency translation adjustments						(149)						93
Employee postretirement benefits						11						(8)
Cash flow hedges and other						63						(78)
Total Other Comprehensive Income (Loss), Net of Tax						(75)						7
Comprehensive Income						583						582
Comprehensive (income) loss attributable to noncontrolling interests						(8)						(8)
Comprehensive Income Attributable to Kimberly-Clark Corporation						$	575					$	574

See notes to the unaudited interim consolidated financial statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(2024 Data is Unaudited)

(Millions of dollars)						March 31, 2024						December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents						$	853					$	1,093
Accounts receivable, net						2,383						2,135
Inventories						1,877						1,955
Other current assets						487						520
Total Current Assets						5,600						5,703
Property, Plant and Equipment, Net						7,772						7,913
Investments in Equity Companies						364						306
Goodwill						2,043						2,085
Other Intangible Assets, Net						190						197
Other Assets						1,123						1,140
TOTAL ASSETS						$	17,092					$	17,344
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Debt payable within one year						$	809					$	567
Trade accounts payable						3,531						3,653
Accrued expenses and other current liabilities						2,131						2,316
Dividends payable						407						394
Total Current Liabilities						6,878						6,930
Long-Term Debt						7,161						7,417
Noncurrent Employee Benefits						652						669
Deferred Income Taxes						395						374
Other Liabilities						796						860
Redeemable Preferred Securities of Subsidiaries						26						26

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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 First Quarter 2024 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 9 to the unaudited interim consolidated financial statements.

On March 27, 2024, we announced the 2024 Transformation Initiative designed to sharpen our strategic focus through a new operating model that leverages three synergistic forces:

• Accelerating pioneering innovation to capture significant growth available in our categories by investing in science and technology to satisfy unmet and evolving consumer needs,

• Optimizing our margin structure to deliver superior consumer propositions and implement initiatives and deploy technology and data analytics designed to create a fast, adaptable, integrated supply chain with greater visibility that can deliver continuous improvement, and

• Wiring our organization for growth to drive agility, speed, and focused execution that extends our competitive advantages further into the future.

The 2024 Transformation Initiative is intended to improve our focus on growth and reduce our structural cost base by reorganizing into three new business segments, making the corporate and regional overhead cost structures more efficient and optimizing our global supply chain. The transformation is expected to impact our organization in all major geographies, and workforce reductions are expected to be in the range of 4 percent to 5 percent. Certain actions under the transformation initiative are being finalized for implementation, and accounting for such actions will commence when the actions are authorized for execution. We expect to complete the transition to the new organizational structure by the end of 2024, and the transformation initiative is expected to be completed by the end of 2026. Total pre-tax savings are expected to be $3 billion in gross productivity; inclusive of input cost and manufacturing cost savings, and $200 in selling, general and administrative expenses. Total costs are anticipated to be approximately $1.5 billion pre-tax. Cash costs are expected to be approximately half of that amount, primarily related to workforce reductions. Non-cash charges are primarily related to incremental depreciation and asset write-offs. First quarter total transformation initiative charges were $45 pre-tax ($34 after tax).

On April 7, 2024, we entered into an agreement to sell the personal protective equipment business included in our K-C Professional business segment for $640, subject to a customary purchase price adjustment. The transaction includes 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. The transaction is pending customary conditions and regulatory approval and is expected to close in the third quarter of 2024.

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

of 2023. As the purchase of additional ownership in an already controlled subsidiary represents an equity transaction, no gain or loss was recognized in consolidated net income or comprehensive income.

On June 1, 2023, we completed the sale transaction, announced on October 24, 2022, of our Neve tissue brand and related consumer and K-C Professional tissue assets in Brazil for $212. Upon closure of the transaction, a gain of $74 pre-tax was recognized in Other (income) and expense, net. We incurred divestiture-related costs of $30 pre-tax during the three months ended June 30, 2023, 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).

Beginning in March 2022, we have implemented significant adjustments to our business in Russia. We have substantially curtailed media, advertising and promotional activity and suspended capital investments in our sole manufacturing facility in Russia. Consistent with the humanitarian nature of our products, we manufacture and sell only essential items in Russia, such as baby diapers and feminine pads, which are critical to the health and hygiene of women, girls and babies. Our Russia business has represented approximately 1 to 2 percent of our net global sales, operating profit and total assets. Our ability to continue our operations in Russia may change as the situation evolves. Our business in Russia is experiencing increased input costs, supply chain complexities, reduced consumer demand, restricted access to raw materials and production assets, and restricted access to financial institutions, as well as increased supply chain, professional services, monetary, currency, trade and payment/investment sanctions and related controls. We are actively monitoring the situation, and as the business, geopolitical and regulatory environment concerning Russia evolves, we may not be able to sustain the limited manufacture and sale of our products, and our assets may be partially or fully impaired. We are also monitoring the increased risk of cyber-based attacks as a result of the war in Ukraine and have implemented additional cybersecurity measures designed to address the evolving threat landscape.

This section presents a discussion and analysis of our first quarter 2024 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, product mix and net selling prices on net sales. Changes in foreign currency exchange rates and divestitures and business exits also impact the year-over-year change in net sales. Revenue growth management is used to describe our capability that helps optimize our consumer value proposition and thereby maximize our brands' revenue potential with consumer-centric insights. It focuses on strategic pricing decisions, price pack architecture, managing our product mix, trade promotion activity and trading terms. Our analysis compares the three months ended March 31, 2024 results to the same period in 2023.

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 other (income) and expense, net, 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 item for the relevant time period as indicated in the reconciliation included later in this MD&A:

• 2024 Transformation Initiative - In 2024, we initiated this transformation initiative to improve our focus on growth and reduce our structural cost base by reorganizing into three new business segments, making the corporate and regional overhead cost structures more efficient and optimizing our global supply chain. Results in the first quarter of 2024 include charges related to this program. See Item 1, Note 2 to the unaudited interim consolidated financial statements for details.

Overview of First Quarter 2024 Results

• Net sales of $5.1 billion decreased 1 percent compared to the year-ago period, while organic sales grew 6 percent.

• Operating profit was $853 in 2024 and $787 in 2023. Net Income Attributable to Kimberly-Clark Corporation was $647 in 2024 compared to $566 in 2023, and diluted earnings per share were $1.91 in 2024 compared to $1.67 in 2023. Results in 2024 included pre-tax $45 (after tax $34) charges related to the 2024 Transformation Initiative.

Results of Operations and Related Information

This section presents a discussion and analysis of our first quarter 2024 net sales, operating profit and other information relevant to an understanding of the results of operations.

Consolidated

Selected Financial Results			Three Months Ended March 31
			2024						2023						Percent Change
Net Sales:
North America			$	2,815					$	2,730					+3		%
Outside North America			2,395						2,522						-5		%
Intergeographic sales			(61)						(57)						+7		%
Total Net Sales			5,149						5,195						-1		%
Operating Profit:
North America			666						574						+16		%
Outside North America			357						312						+14		%
Corporate & Other(a)			(151)						(84)						N.M.
Other (income) and expense, net(a)			19						15						+27		%
Total Operating Profit			853						787						+8		%
Share of net income of equity companies			61						43						+42		%
Net Income Attributable to Kimberly-Clark Corporation			647						566						+14		%
Diluted Earnings per Share			1.91						1.67						+14		%

(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 March 31, 2024
						As Reported																								2024 Transformation Initiative						As Adjusted Non-GAAP
Marketing, research and general expenses						$	1,039																							$	45					$	994
Operating Profit						853																								(45)						898
Provision for income taxes						(184)																								11						(195)
Effective tax rate						23.6		%																						—						23.6		%
Net Income Attributable to Kimberly-Clark Corporation						647																								(34)						681
Diluted Earnings per Share(a)						1.91																								(0.10)						2.01

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

Analysis of Consolidated Results

Percent Change in Net Sales Three Months Ended						Volume						Mix/Other						Net Price						Divestitures and Business Exits**(e)**						Currency						Total**(a)**						Organic**(b)**
Consolidated						1						1						4						(1)						(5)						(1)						6
North America						1						1						1						—						—						3						3
Developed & Emerging						1						1						14						(4)						(18)						(7)						15
Developed Markets						1						—						(3)						—						—						(2)						(2)

Percent Change in Operating Profit**(f)**						Volume						Net Price						Input Costs						Other Manufacturing Costs**(c)**						Currency Translation						Other**(d)**						Total
Three months ended						—						27						(2)						10						(12)						(9)						14

(a) Total may not equal the sum of volume, mix/other, net price, divestitures and business exits and currency due to rounding and excludes intergeographic sales.

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

(c) Includes net impact of productivity initiatives, product and supply chain investments and other changes in cost of products sold.

(d) Includes impact of changes in product mix and marketing, research and general expenses.

(e) Impact of the sale of Brazil tissue and K-C Professional business.

(f) Percent change calculated using adjusted operating profit for the three months ended March 31, 2024.

Net sales in the first quarter of $5.1 billion decreased 1 percent. Organic sales increased 6 percent as changes in net selling prices and product mix increased sales by 4 percent and 1 percent, respectively, with the increase in prices driven by hyperinflationary economies, mainly Argentina. Volume increased approximately 1 percent. Changes in foreign currency exchange rates decreased sales by 5 percent, while the divestiture of our Brazil tissue and K-C Professional business decreased sales by 1 percent.

In North America, net sales increased 3 percent, including increases of 2 percent in Personal Care and 6 percent in Consumer Tissue, partially offset by a decrease of 1 percent in K-C Professional. Outside North America, net sales decreased 7 percent in D&E markets and 2 percent in Developed Markets. Organic sales increased 15 percent in D&E markets and decreased 2 percent in Developed Markets.

Operating profit in the first quarter was $853 in 2024 and $787 in 2023. Excluding the charges associated with the 2024 Transformation Initiative, adjusted operating profit was $898. Results benefited from higher net revenue realization and gross productivity savings of $120, partially offset by higher marketing, research and general expenses, unfavorable currency effects, and supply chain investments.

Interest expense in the first quarter was $67 in 2024 compared to $73 in 2023.

The first quarter effective tax rate was 23.6 percent in 2024 and 24.5 percent in 2023. The first quarter adjusted effective tax rate was 23.6 percent in 2024.

Our share of net income of equity companies in the first quarter was $61 in 2024 and $43 in 2023. The increase was driven by Kimberly-Clark de Mexico, S.A.B. de C.V. results which benefited from favorable foreign currency effects, higher net selling prices and productivity savings, partially offset by higher general and administrative expenses.

Diluted net income per share for the first quarter was $1.91 in 2024 and $1.67 in 2023. First quarter adjusted earnings per share were $2.01 in 2024, an increase of 20 percent compared to $1.67 in 2023.

Results by Business Segments

Personal Care

						Three Months Ended March 31																								Three Months Ended March 31
						2024						2023																								2024						2023
Net Sales						$	2,713					$	2,704																	Operating Profit						$	545					$	487

Percent Change in Net Sales Three Months Ended						Volume						Mix/Other						Net Price						Currency						Total**(a)**						Organic**(b)**
Total Personal Care						2						1						7						(9)						—						10
North America						1						1						—						—						2						2
D&E Markets						4						1						19						(24)						—						23
Developed Markets						(2)						—						—						(2)						(4)						(2)

Percent Change in Operating Profit						Volume						Net Price						Input Costs						Other Manufacturing Costs**(c)**						Currency Translation						Other**(d)**						Total
Three months ended						4						41						(10)						4						(19)						(8)						12

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

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

(c) Includes net impact of productivity initiatives, product and supply chain investments and other changes in cost of products sold.

(d) Includes impact of changes in product mix and marketing, research and general expenses.

Net sales in the first quarter of $2.7 billion were consistent with the prior year, while organic sales increased 10 percent, driven by changes in net selling prices and product mix of 7 percent and 1 percent, respectively, with the increase in prices driven by hyperinflationary economies, mainly Argentina. Volume increased approximately 2 percent. Innovation, solid commercial execution and supply improvements contributed to volume growth, led by a 4 percent increase in volume in D&E markets and a 1 percent increase in North America, partially offset by a 2 percent decrease in Developed Markets. Changes in foreign currency exchange rates decreased sales by 9 percent.

First quarter operating profit of $545 increased 12 percent. Results benefited primarily from higher net revenue realization and productivity savings, partially offset by unfavorable currency effects and higher marketing, research and general expenses.

Consumer Tissue

						Three Months Ended March 31																											Three Months Ended March 31
						2024						2023																											2024						2023
Net Sales						$	1,599					$	1,634																				Operating Profit						$	290					$	240

Percent Change in Net Sales Three Months Ended						Volume						Mix/Other						Net Price						Divestitures and Business Exits**(e)**						Currency						Total**(a)**						Organic**(b)**
Total Consumer Tissue						—						—						—						(3)						—						(2)						—
North America						2						1						3						—						—						6						6
D&E Markets						(8)						—						(2)						(13)						—						(25)						(11)
Developed Markets						3						—						(4)						—						—						(1)						(2)

Percent Change in Operating Profit						Volume						Net Price						Input Costs						Other Manufacturing Costs**(c)**						Currency Translation						Other**(d)**						Total
Three months ended						(2)						(1)						14						9						—						1						21

(a) Total may not equal the sum of volume, mix/other, net price, divestitures and business exits and currency due to rounding and excludes intergeographic sales.

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

(c) Includes net impact of productivity initiatives, product and supply chain investments and other changes in cost of products sold.

(d) Includes impact of changes in product mix and marketing, research and general expenses.

(e) Impact of the sale of Brazil tissue and K-C Professional business.

Net sales in the first quarter of $1.6 billion decreased 2 percent, while organic sales were consistent with the prior year. Organic sales growth of 6 percent in North America was offset by decreases of 11 percent in D&E markets and 2 percent in Developed Markets. Divestitures and business exits decreased sales by approximately 3 percent.

First quarter operating profit of $290 increased 21 percent. Results benefited from lower input costs and productivity savings.

K-C Professional

						Three Months Ended March 31																								Three Months Ended March 31
						2024						2023																								2024						2023
Net Sales						$	823					$	847																	Operating Profit						$	188					$	159

Percent Change in Net Sales Three Months Ended						Volume						Mix/Other						Net Price						Divestitures and Business Exits**(e)**						Currency						Total**(a)**						Organic**(b)**
Total K-C Professional						(2)						1						2						(2)						(2)						(3)						2
North America						(3)						1						1						—						—						(1)						(1)
D&E Markets						(1)						—						13						(13)						(11)						(12)						12
Developed Markets						2						1						(4)						—						—						(1)						(1)

Percent Change in Operating Profit						Volume						Net Price						Input Costs						Other Manufacturing Cost**(c)**						Currency Translation						Other**(d)**						Total
Three months ended						(8)						12						—						16						—						(2)						18

(a) Total may not equal the sum of volume, mix/other, net price, divestitures and business exits and currency due to rounding and excludes intergeographic sales.

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

(c) Includes net impact of productivity initiatives, product and supply chain investments and other changes in cost of products sold.

(d) Includes impact of changes in product mix and marketing, research and general expenses.

(e) Impact of the sale of Brazil tissue and K-C Professional business.

First quarter net sales of $823 decreased 3 percent, while organic sales increased 2 percent, driven by changes in net selling prices and product mix of 2 percent and 1 percent, respectively, partially offset by decreased volume of approximately 2 percent. Volume impacts include ongoing rightsizing of the portfolio in North America to enhance focus on profitable growth. Changes in foreign currency exchange rates decreased sales by approximately 2 percent,and divestitures and business exits decreased sales by 2 percent.

First quarter operating profit of $188 increased 18 percent. Results benefited from productivity savings and higher net selling prices, partially offset by lower volumes.

Liquidity and Capital Resources

Cash Provided by Operations

Cash provided by operations was $438 for the first three months of 2024 compared to $613 in the prior year. The decrease was driven by unfavorable changes in operating working capital partially offset by the increase in operating profit.

Investing

During the three months ended March 31, 2024, our capital spending was $194 compared to $201 in the prior year. We anticipate that full year capital spending will be approximately $900, including incremental spending from the 2024 Transformation Initiative.

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 $7 as of March 31, 2024 (included in Debt payable within one year on the consolidated balance sheet). The average month-end balance of short-term debt for the first quarter of 2024 was $4. 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 March 31, 2024 and December 31, 2023, total debt was $8.0 billion.

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

We repurchase shares of Kimberly-Clark common stock from time to time pursuant to publicly announced share repurchase programs. During the first three months of 2024, we repurchased 459 thousand shares of our common stock at a total cost of $56 through a broker in the open market.

We have evaluated the effects of the Global anti-Base Erosion rules set forth by the Organization for Economic Co-Operation and Development, referred to as “Pillar 2,” which establishes a global minimum corporate tax rate of 15 percent. We have (1) determined that Pillar 2 legislation has been enacted in one or more of the jurisdictions in which the Company operates and the Company is within the scope of such legislation, (2) assessed such enacted legislation and, as applicable, the Transitional Safe Harbor provisions for Pillar 2 that apply, and (3) determined the impact will be immaterial to our financial results. We intend to file a Qualified Country-by-Country Report for the current year for each jurisdiction in which we intend to rely on the Transitional Country-by-Country Reporting Safe Harbor provisions.

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, payments for our 2024 Transformation Initiative, 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 charges and savings from the 2024 Transformation Initiative, cash flow and uses of cash, growth initiatives, innovations, marketing and other spending, net sales, anticipated currency rates and exchange risks, including the impact in Argentina and Türkiye, effective tax rate, contingencies and anticipated transactions of Kimberly-Clark, including dividends, share repurchases and pension contributions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based upon management's expectations and beliefs concerning future events impacting Kimberly-Clark. 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 risk that we are not able to realize the anticipated benefits of the 2024

Transformation Initiative (including risks related to disruptions to our business or operations or related to any delays in implementation), war in Ukraine (including the related responses of consumers, customers, and suppliers and sanctions issued by the U.S., the European Union, Russia or other countries), pandemics, epidemics, fluctuations in foreign currency exchange rates, the prices and availability of our raw materials, supply chain disruptions, disruptions in the capital and credit markets, counterparty defaults (including customers, suppliers and financial institutions with which we do business), failure to realize the expected benefits or synergies from our acquisition and disposition activity, impairment of goodwill and intangible assets and our projections of operating results and other factors that may affect our impairment testing, changes in customer preferences, severe weather conditions, regional instabilities and hostilities (including the war in Israel), government trade or similar regulatory actions, 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 our 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.