Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

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 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 $3.0 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. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets. Second quarter total transformation initiative charges were $190 pre-tax ($117 after tax). For the six months ended June 30, 2024, total transformation initiative charges were $235 pre-tax ($151 after tax).

On July 1, 2024, we completed the pending sale transaction that was announced on April 7, 2024, of the personal protective equipment business included in our K-C Professional business segment for $640, subject to certain post-closing adjustments. 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 assets included in the sale agreement have been reclassified to Other current assets as of June 30, 2024, and we will recognize a gain in Other (income) and expense, net 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).

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. Beginning in March 2022, we significantly adjusted our business in Russia, substantially curtailing media, advertising and promotional activity and suspending capital investments, other than certain maintenance investments, in our sole manufacturing facility in Russia. 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. We have experienced high 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 supply chain, professional services, monetary, currency, trade and payment/investment sanctions and related controls. 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.

This section presents a discussion and analysis of our second 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 excluding prior year's impact of divestitures on business exits 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 and six months ended June 30, 2024 results to the same periods 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 items for the relevant time periods as indicated in the reconciliations 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 2024 include charges related to this program. See Item 1, Note 2 to the unaudited interim consolidated financial statements for details.

• Sale of Brazil tissue and K-C Professional business - In the second quarter of 2023, we recognized a net benefit related to the sale of our Brazil tissue and K-C Professional business. See Item 1, Note 3 to the unaudited interim consolidated financial statements for details.

• Impairment of intangible assets - In the second quarter of 2023, we recognized charges related to the impairment of certain intangible assets related to Softex Indonesia and Thinx. See Item 1, Note 4 to the unaudited interim consolidated financial statements for details.

• Pension settlements - In the second quarter of 2023, pension settlement charges 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.

The income tax effect of these non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. The impact of these non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income Before Income Taxes and Equity Interests and Provision for income taxes.

Overview of Second Quarter 2024 Results

• Net sales of $5.0 billion decreased 2 percent compared to the year-ago period, while organic sales grew 4 percent.

• Operating profit was $655 in 2024 and $113 in 2023. Net Income Attributable to Kimberly-Clark Corporation was $544 in 2024 compared to $102 in 2023, and diluted earnings per share were $1.61 in 2024 compared to $0.30 in 2023. Results in 2024 include charges related to the 2024 Transformation Initiative, compared to 2023 results which include the net benefit related to the sale of the Brazil tissue and K-C Professional business, charges related to the impairment of intangible assets and pension settlement charges.

Results of Operations and Related Information

This section presents a discussion and analysis of our second 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 June 30																		Six Months Ended June 30
			2024						2023						Percent Change						2024						2023						Percent Change
Net Sales:
North America			$	2,823					$	2,782					+1		%				$	5,638					$	5,512					+2		%
Outside North America			2,275						2,424						-6		%				4,670						4,946						-6		%
Intergeographic sales			(69)						(72)						-4		%				(130)						(129)						+1		%
Total Net Sales			5,029						5,134						-2		%				10,178						10,329						-1		%
Operating Profit:
North America			663						615						+8		%				1,329						1,189						+12		%
Outside North America			308						244						+26		%				665						556						+20		%
Corporate & Other(a)			(227)						(801)						N.M.						(378)						(885)						N.M.
Other (income) and expense, net(a)			89						(55)						N.M.						108						(40)						N.M.
Total Operating Profit			655						113						+480		%				1,508						900						+68		%
(Provision for) benefit from income taxes			(87)						32						N.M.						(271)						(141)						+92		%
Share of net income of equity companies			63						50						+26		%				124						93						+33		%
Net Income Attributable to Kimberly-Clark Corporation			544						102						+433		%				1,191						668						+78		%
Diluted Earnings per Share			1.61						0.30						+437		%				3.52						1.97						+79		%

(a) Corporate & Other and Other (income) and expense, net include income and expense not associated with the ongoing operations of 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, 2024
						As Reported																								2024 Transformation Initiative						As Adjusted Non-GAAP
Cost of products sold						$	3,219																							$	45					$	3,174
Gross Profit						1,810																								(45)						1,855
Marketing, research and general expenses						1,066																								70						996
Other (income) and expense, net						89																								75						14
Operating Profit						655																								(190)						845
Provision for income taxes						(87)																								73						(160)
Effective tax rate						15.1		%																						—						20.9		%
Net Income Attributable to Kimberly-Clark Corporation						544																								(117)						661
Diluted Earnings per Share(a)						1.61																								(0.35)						1.96

						Three Months Ended June 30, 2023
						As Reported						Sale of Brazil Tissue and K-C Professional Business						Impairment of Intangible Assets												Pension Settlements						As Adjusted Non-GAAP
Cost of products sold						$	3,403					$	15					$	—											$	—					$	3,388
Gross Profit						1,731						(15)						—												—						1,746
Marketing, research and general expenses						1,015						15						—												—						1,000
Impairment of intangible assets						658						—						658												—						—
Other (income) and expense, net						(55)						(74)						—												—						19
Operating Profit						113						44						(658)												—						727
Nonoperating expense						(42)						—						—												(27)						(15)
(Provision for) benefit from income taxes						32						(18)						175												7						(132)
Effective tax rate						N.M.						—						—												—						20.5		%
Net (income) loss attributable to noncontrolling interests						16						—						20												—						(4)
Net Income Attributable to Kimberly-Clark Corporation						102						26						(463)												(20)						559
Diluted Earnings per Share(a)						0.30						0.08						(1.36)												(0.06)						1.65

						Six Months Ended June 30, 2024
						As Reported																								2024 Transformation Initiative						As Adjusted Non-GAAP
Cost of products sold						$	6,457																							$	45					$	6,412
Gross Profit						3,721																								(45)						3,766
Marketing, research and general expenses						2,105																								115						1,990
Other (income) and expense, net						108																								75						33
Operating Profit						1,508																								(235)						1,743
Provision for income taxes						(271)																								84						(355)
Effective tax rate						20.0		%																						—						22.3		%
Net Income Attributable to Kimberly-Clark Corporation						1,191																								(151)						1,342
Diluted Earnings per Share(a)						3.52																								(0.45)						3.97

						Six Months Ended June 30, 2023
						As Reported						Sale of Brazil Tissue and K-C Professional Business						Impairment of Intangible Assets												Pension Settlements						As Adjusted Non-GAAP
Cost of products sold						$	6,872					$	15					$	—											$	—					$	6,857
Gross Profit						3,457						(15)						—												—						3,472
Marketing, research and general expenses						1,939						15						—												—						1,924
Impairment of intangible assets						658						—						658												—						—
Other (income) and expense, net						(40)						(74)						—												—						34
Operating Profit						900						44						(658)												—						1,514
Nonoperating expense						(58)						—						—												(27)						(31)
Provision for income taxes						(141)						(18)						175												7						(305)
Effective tax rate						19.9		%				—						—												—						22.6		%
Net (income) loss attributable to noncontrolling interests						7						—						20												—						(13)
Net Income Attributable to Kimberly-Clark Corporation						668						26						(463)												(20)						1,125
Diluted Earnings per Share(a)						1.97						0.08						(1.36)												(0.06)						3.32

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

N.M. - Not Meaningful

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						—						2						(1)						(5)						(2)						4
North America						—						—						—						—						—						1						1
D&E Markets						2						—						9						(4)						(15)						(7)						12
Developed Markets						2						—						(5)						—						(1)						(4)						(3)

Percent Change in Net Sales Six Months Ended						Volume						Mix/Other						Net Price						Divestitures and Business Exits**(e)**						Currency						Total**(a)**						Organic**(b)**
Consolidated						1						1						3						(1)						(5)						(1)						5
North America						1						1						1						—						—						2						2
D&E Markets						1						1						12						(4)						(17)						(7)						14
Developed Markets						1						—						(4)						—						(1)						(3)						(2)

Percent Change in Adjusted Operating Profit						Volume						Net Price						Input Costs						Other Manufacturing Costs**(c)**						Currency Translation						Other**(d)**						Total
Three months ended						1						14						(2)						13						(7)						(3)						16
Six months ended						1						21						(2)						11						(9)						(7)						15

(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 excluding prior year's impact of divestitures and business exits.

(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.

Consolidated net sales for the three months ended June 30, 2024 of $5.0 billion decreased 2 percent compared to the year-ago period. Organic sales increased 4 percent as changes in net selling prices and volume increased sales by 2 percent and 1 percent, respectively, with the increase in net selling prices driven by hyperinflationary economies, mainly Argentina. 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 1 percent primarily from a 5 percent increase in Personal Care, partially offset by a decline of 4 percent and 2 percent in K-C Professional and Consumer Tissue, respectively. Outside North America, net sales decreased 7 percent in D&E markets and 4 percent in Developed Markets, primarily due to divestitures and business exits and unfavorable currency impacts. Organic sales increased 12 percent in D&E markets reflecting both pricing and volume gains, while Developed Markets decreased 3 percent due to temporary energy surcharge-related price increases in the prior period, partially offset by volume gains.

Consolidated net sales for the six months ended June 30, 2024 of $10.2 billion decreased 1 percent compared to the year-ago period. Organic sales increased 5 percent, as changes in net selling prices, product mix, and volume increased sales by 3 percent, 1 percent, and 1 percent, respectively. The increase in net selling prices was driven by hyperinflationary economies, mainly Argentina. Changes in foreign currency exchange rates decreased sales by approximately 5 percent, while the divestiture of our Brazil tissue and K-C Professional business decreased sales by 1 percent. Changes in net and organic sales for North America, D&E Markets, and Developed Markets were relatively consistent with those discussed for the quarter-to-date period above.

Operating profit for the three and six months ended June 30, 2024 was $655 and $1.5 billion, respectively, compared to $113 and $900 for the same year-ago periods. Results in 2024 include charges related to the 2024 Transformation Initiative, compared to 2023 results which include the net benefit related to the sale of the Brazil tissue and K-C Professional business and charges related to the impairment of intangible assets. Excluding these items, adjusted operating profit for the three and six months ended June 30, 2024 was $845 and $1.7 billion, respectively, representing a 16 percent and 15 percent increase compared to the same year-ago periods. Results benefited from improved gross profit as a result of higher organic sales, and gross supply chain productivity savings of approximately $135 and $255 for the three and six months ended June 30, 2024, respectively, partially offset by input cost inflation, primarily in D&E markets, supply chain related investments, unfavorable currency effects and higher marketing, research and general expenses.

Interest expense for the three and six months ended June 30, 2024 was $72 and $139, respectively, compared to $76 and $149 for the same year-ago periods.

The effective tax rate for the three and six months ended June 30, 2024 was 15.1 percent and 20.0 percent, respectively. The effective tax rate for the three months ended June 30, 2024 differed from the U.S. statutory federal tax rate of 21.0 percent primarily due to the discrete tax benefits associated with the 2024 Transformation Initiative charges. The effective tax rate for the three months ended June 30, 2023 differed from the U.S. statutory federal tax rate of 21.0 percent primarily due to the discrete tax benefit associated with charges for the impairment of intangible assets. The adjusted effective tax rate for the three and six months ended June 30, 2024 was 20.9 percent and 22.3 percent, respectively, compared to 20.5 percent and 22.6 percent for the same year-ago periods.

Our share of net income of equity companies for the three and six months ended June 30, 2024 was $63 and $124, respectively, compared to $50 and $93 for the same year-ago periods. The increases were driven by Kimberly-Clark de Mexico, S.A.B. de C.V. results which benefited from favorable foreign currency effects, volume and mix growth, and productivity savings, partially offset by higher general and administrative expenses.

Diluted earnings per share for the three and six months ended June 30, 2024 were $1.61 and $3.52, respectively, compared to $0.30 and $1.97 for the same year-ago periods. Adjusted diluted earnings per share for the three and six months ended June 30, 2024 were $1.96 and $3.97, respectively, representing a 19 percent and 20 percent increase compared to the same year-ago periods.

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
						2024						2023						2024						2023												2024						2023						2024						2023
Net Sales						$	2,692					$	2,685					$	5,405					$	5,389					Operating Profit						$	540					$	472					$	1,085					$	959

Percent Change in Net Sales Three Months Ended						Volume						Mix/Other						Net Price						Divestitures and Business Exits						Currency						Total**(a)**						Organic**(b)**
Total Personal Care						3						1						4						—						(8)						—						8
North America						4						1						—						—						—						5						5
D&E Markets						2						1						12						—						(20)						(5)						15
Developed Markets						(1)						—						(2)						—						(2)						(6)						(4)

Percent Change in Net Sales Six Months Ended						Volume						Mix/Other						Net Price						Divestitures and Business Exits						Currency						Total**(a)**						Organic**(b)**
Total Personal Care						2						1						6						—						(9)						—						9
North America						3						1						—						—						—						4						4
D&E Markets						3						1						16						—						(22)						(2)						19
Developed Markets						(2)						—						(1)						—						(2)						(5)						(3)

Percent Change in Operating Profit						Volume						Net Price						Input Costs						Other Manufacturing Costs**(c)**						Currency Translation						Other**(d)**						Total
Three months ended						6						25						(10)						5						(9)						(3)						14
Six months ended						5						33						(10)						5						(14)						(6)						13

(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 excluding prior year's impact of divestitures and business exits.

(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 for the three months ended June 30, 2024 of $2.7 billion were consistent with the prior year as organic growth of 8 percent was offset by foreign currency translation. The increase in organic sales was driven by changes in net selling prices, volume, and product mix of 4 percent, 3 percent and 1 percent, respectively. The increase in net selling prices was driven by hyperinflationary economies, mainly Argentina, while innovation, commercial execution and supply improvements contributed to volume growth, led by a 4 percent and 2 percent increase in our North America and D&E markets, respectively. Net sales for the six months ended June 30, 2024 were flat to the prior year, consistent with the impacts of organic growth and foreign currency translation discussed above.

Operating profit for the three and six months ended June 30, 2024 of $540 and $1.1 billion increased 14 percent and 13 percent, respectively, compared to the same year-ago periods. Results benefited primarily from favorable volume and mix, pricing net of inflation and gross supply chain productivity savings, partially offset by unfavorable currency effects and higher marketing, research and general expenses.

Consumer Tissue

						Three Months Ended June 30												Six Months Ended June 30																		Three Months Ended June 30												Six Months Ended June 30
						2024						2023						2024						2023												2024						2023						2024						2023
Net Sales						$	1,486					$	1,549					$	3,085					$	3,183					Operating Profit						$	245					$	200					$	535					$	440

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						—						—						(1)						(2)						—						(4)						(2)
North America						(3)						(1)						2						—						—						(2)						(2)
D&E Markets						—						(1)						(3)						(11)						(1)						(15)						(4)
Developed Markets						5						—						(6)						—						(1)						(2)						(1)

Percent Change in Net Sales Six Months Ended						Volume						Mix/Other						Net Price						Divestitures and Business Exits**(e)**						Currency						Total**(a)**						Organic**(b)**
Total Consumer Tissue						—						—						(1)						(2)						—						(3)						(1)
North America						—						—						2						—						—						2						2
D&E Markets						(4)						—						(3)						(12)						(1)						(20)						(8)
Developed Markets						4						—						(5)						—						—						(2)						(1)

Percent Change in Operating Profit						Volume						Net Price						Input Costs						Other Manufacturing Costs**(c)**						Currency Translation						Other**(d)**						Total
Three months ended						(10)						(7)						19						25						(1)						(3)						23
Six months ended						(5)						(4)						17						16						(1)						(1)						22

(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 excluding prior year's impact of divestitures and business exits.

(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 for the three months ended June 30, 2024 of $1.5 billion decreased 4 percent due to impacts from divestitures and business exits of 2 percent and a 2 percent decline in organic sales. Organic sales were negatively impacted by retailer inventory volume adjustments in North America and lower pricing in Developed Markets due to temporary energy surcharge-related price increases in the prior period. Net sales for the six months ended June 30, 2024 of $3.1 billion decreased 3 percent due to impacts from divestitures and business exits, coupled with a decline in organic sales from lower pricing in Developed Markets.

Operating profit for the three and six months ended June 30, 2024 of $245 and $535 increased 23 percent and 22 percent, respectively, compared to the same year-ago periods. Results benefited from productivity savings and more balanced pricing relative to input costs.

K-C Professional

						Three Months Ended June 30												Six Months Ended June 30																		Three Months Ended June 30												Six Months Ended June 30
						2024						2023						2024						2023												2024						2023						2024						2023
Net Sales						$	841					$	887					$	1,664					$	1,734					Operating Profit						$	186					$	187					$	374					$	346

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						—						1						(1)						(3)						(2)						(5)						—
North America						(3)						—						(1)						—						—						(4)						(4)
D&E Markets						7						1						10						(16)						(12)						(10)						20
Developed Markets						3						1						(9)						—						(1)						(5)						(4)

Percent Change in Net Sales Six Months Ended						Volume						Mix/Other						Net Price						Divestitures and Business Exits**(e)**						Currency						Total**(a)**						Organic**(b)**
Total K-C Professional						(1)						1						1						(3)						(2)						(4)						1
North America						(3)						1						—						—						—						(2)						(3)
D&E Markets						3						1						12						(14)						(11)						(11)						17
Developed Markets						3						1						(7)						—						(1)						(3)						(3)

Percent Change in Operating Profit						Volume						Net Price						Input Costs						Other Manufacturing Cost**(c)**						Currency Translation						Other**(d)**						Total
Three months ended						2						(3)						(1)						10						(3)						(6)						(1)
Six months ended						(3)						4						(1)						13						(1)						(4)						8

(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 excluding prior year's impact of divestitures and business exits.

(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 for the three months ended June 30, 2024 of $841 decreased 5 percent primarily due to divestitures and business exits and unfavorable currency impacts. Organic sales were flat to the prior period as favorable mix gains were offset by lower pricing in Developed Markets due to temporary energy surcharge-related price increases in the prior period and decreased volume in North America partially due to ongoing rightsizing of the portfolio to enhance focus on profitable growth. Net sales for the six months ended June 30, 2024 of $1.7 billion decreased 4 percent primarily due to divestitures and business exits and unfavorable currency impacts. This decline was partially offset by a 1 percent increase in organic sales driven by price realization and mix benefits.

Operating profit for the three months ended June 30, 2024 of $186 decreased 1 percent compared to the prior year as productivity gains were offset by manufacturing cost headwinds, higher marketing, research and general expenses, and unfavorable pricing net of cost inflation. Operating profit for the six months ended June 30, 2024 of $374 increased 8 percent compared to the same year-ago period. Results primarily 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 $1.5 billion during the six months ended June 30, 2024 compared to $1.4 billion in the prior year. The increase was driven by the increase in operating profit, excluding the effect of non-cash charges, partially offset by unfavorable changes in operating working capital.

Investing

During the six months ended June 30, 2024, our capital spending was $352 compared to $389 in the prior year. We anticipate that full year capital spending will be approximately $800, including incremental spending from the 2024 Transformation Initiative. Proceeds from asset and business dispositions of $218 in the first six months of 2023 primarily reflected the sale of our Brazil tissue and K-C Professional business.

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 $9 as of June 30, 2024 (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 2024 was $6. 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, 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 2025. 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 six months ended June 30, 2024, we repurchased 1.2 million shares of our common stock at a total cost of $159 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 Annual Report on Form 10-K for the year ended December 31, 2023, 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.