Item 1. Financial Statements

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

						Three Months Ended March 31
(In millions, except per share amounts)						2025						2024
Net Sales						$	4,840					$	5,149
Cost of products sold						3,107						3,238
Gross Profit						1,733						1,911
Marketing, research and general expenses						941						1,039
Other (income) and expense, net						23						19
Operating Profit						769						853
Nonoperating expense						(18)						(15)
Interest income						7						10
Interest expense						(64)						(67)
Income Before Income Taxes and Equity Interests						694						781
Provision for income taxes						(165)						(184)
Income Before Equity Interests						529						597
Share of net income of equity companies						44						61
Net Income						573						658
Net income attributable to noncontrolling interests						(6)						(11)
Net Income Attributable to Kimberly-Clark Corporation						$	567					$	647
Per Share Basis
Net Income Attributable to Kimberly-Clark Corporation
Basic						$	1.71					$	1.92
Diluted						$	1.70					$	1.91

See notes to the unaudited interim condensed consolidated financial statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

						Three Months Ended March 31
(In millions)						2025						2024
Net Income						$	573					$	658
Other Comprehensive Income (Loss), Net of Tax
Unrealized currency translation adjustments						148						(149)
Employee postretirement benefits						(4)						11
Cash flow hedges and other						(13)						63
Total Other Comprehensive Income (Loss), Net of Tax						131						(75)
Comprehensive Income						704						583
Comprehensive income attributable to noncontrolling interests						(6)						(8)
Comprehensive Income Attributable to Kimberly-Clark Corporation						$	698					$	575

See notes to the unaudited interim condensed consolidated financial statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions, except par value)						March 31, 2025						December 31, 2024
ASSETS
Current Assets
Cash and cash equivalents						$	563					$	1,021
Accounts receivable, net						2,176						2,009
Inventories						1,909						1,822
Other current assets						633						728
Total Current Assets						5,281						5,580
Property, Plant and Equipment, Net						7,507						7,513
Investments in Equity Companies						354						314
Goodwill						1,971						1,964
Other Intangible Assets, Net						85						87
Other Assets						1,107						1,088
TOTAL ASSETS						$	16,305					$	16,546
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Debt payable within one year						$	766					$	568
Trade accounts payable						3,601						3,715
Accrued expenses and other current liabilities						2,139						2,319
Dividends payable						415						402
Total Current Liabilities						6,921						7,004
Long-Term Debt						6,481						6,875
Noncurrent Employee Benefits						640						643
Deferred Income Taxes						319						326
Other Liabilities						683						686
Redeemable Preferred Securities of Subsidiaries						37						37
Stockholders' Equity
Kimberly-Clark Corporation
Preferred stock - no par value - authorized 20.0 million shares, none issued						—						—
Common stock - $1.25 par value - authorized 1,200.0 million shares; issued 378.6 million shares as of March 31, 2025 and December 31, 2024						473						473
Additional paid-in capital						842						862
Common stock held in treasury, at cost - 46.7 and 46.8 million shares as of March 31, 2025 and December 31, 2024, respectively						(5,985)						(5,986)
Retained earnings						9,406						9,257
Accumulated other comprehensive income (loss)						(3,635)						(3,766)
Total Kimberly-Clark Corporation Stockholders' Equity						1,101						840
Noncontrolling Interests						123						135
Total Stockholders' Equity						1,224						975
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY						$	16,305					$	16,546

See notes to the unaudited interim condensed consolidated financial statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

						Three Months Ended March 31, 2025
(In millions, except per share amounts. Shares in thousands)						Common Stock Issued												Additional Paid-in Capital						Treasury Stock												Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Non-controlling Interests						Total Stockholders' Equity
			Shares						Amount									Shares						Amount
Balance at December 31, 2024						378,597						$	473					$	862					46,798						$	(5,986)					$	9,257					$	(3,766)					$	135					$	975
Net income in stockholders' equity(a)						—						—						—						—						—						567						—						6						573
Other comprehensive income, net of tax(a)						—						—						—						—						—						—						131						—						131
Stock-based awards exercised or vested						—						—						(53)						(526)						63						—						—						—						10
Repurchases of common stock						—						—						—						458						(62)						—						—						—						(62)
Recognition of stock-based compensation						—						—						31						—						—						—						—						—						31
Dividends declared ($1.26 per share)						—						—						—						—						—						(418)						—						(18)						(436)
Other						—						—						2						—						—						—						—						—						2
Balance at March 31, 2025						378,597						$	473					$	842					46,730						$	(5,985)					$	9,406					$	(3,635)					$	123					$	1,224

(a) Excludes redeemable interests' share.

						Three Months Ended March 31, 2024
(In millions, except per share amounts. Shares in thousands)						Common Stock Issued												Additional Paid-in Capital						Treasury Stock												Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Non-controlling Interests						Total Stockholders' Equity
			Shares						Amount									Shares						Amount
Balance at December 31, 2023						378,597						$	473					$	878					41,599						$	(5,222)					$	8,368					$	(3,582)					$	153					$	1,068
Net income in stockholders' equity(a)						—						—						—						—						—						647						—						10						657
Other comprehensive income, net of tax(a)						—						—						—						—						—						—						(72)						(4)						(76)
Stock-based awards exercised or vested						—						—						(37)						(235)						26						—						—						—						(11)
Repurchases of common stock						—						—						—						459						(56)						—						—						—						(56)
Recognition of stock-based compensation						—						—						31						—						—						—						—						—						31
Dividends declared ($1.22 per share)						—						—						—						—						—						(411)						—						(19)						(430)
Other						—						—						5						—						—						(3)						(1)						—						1
Balance at March 31, 2024						378,597						$	473					$	877					41,823						$	(5,252)					$	8,601					$	(3,655)					$	140					$	1,184

(a) Excludes redeemable interests' share.

See notes to the unaudited interim condensed consolidated financial statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

						Three Months Ended March 31
(In millions)						2025						2024
Operating Activities
Net income						$	573					$	658
Depreciation and amortization						218						185
Stock-based compensation						32						32
Deferred income taxes						7						(11)
Net (gains) losses on asset and business dispositions						10						5
Equity companies' earnings (in excess of) less than dividends paid						(39)						(61)
Operating working capital						(476)						(367)
Postretirement benefits						3						2
Other						(1)						(5)
Cash Provided by Operations						327						438
Investing Activities
Capital spending						(204)						(194)
Investments in time deposits						(99)						(97)
Maturities of time deposits						186						119
Other						(2)						(9)
Cash Used for Investing						(119)						(181)
Financing Activities
Cash dividends paid						(405)						(398)
Change in short-term debt						45						4
Debt repayments						(250)						—
Proceeds from exercise of stock options						30						3
Repurchases of common stock						(61)						(54)
Cash dividends paid to noncontrolling interests						(18)						(19)
Other						(24)						(21)
Cash Used for Financing						(683)						(485)
Effect of Exchange Rate Changes on Cash and Cash Equivalents						17						(12)
Change in Cash and Cash Equivalents						(458)						(240)
Cash and Cash Equivalents - Beginning of Period						1,021						1,093
Cash and Cash Equivalents - End of Period						$	563					$	853

See notes to the unaudited interim condensed consolidated financial statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Accounting Policies

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all material adjustments which are of a normal and recurring nature necessary for a fair statement of the results for the periods presented have been reflected. Amounts are reported in millions of dollars, except per share amounts, unless otherwise noted.

For further information, refer to the consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2024. The terms "Corporation," "Kimberly-Clark," "K-C," "we," "our" and "us" refer to Kimberly-Clark Corporation and its consolidated subsidiaries.

Highly Inflationary Accounting

GAAP requires the use of highly inflationary accounting for countries whose cumulative three-year inflation exceeds 100%. Under highly inflationary accounting, the countries’ functional currency becomes the U.S. dollar, and its income statement and balance sheet are measured in U.S. dollars using both current and historical rates of exchange.

As of July 1, 2018, we adopted highly inflationary accounting for our subsidiaries in Argentina (“K-C Argentina”). The effect of changes in exchange rates on peso-denominated monetary assets and liabilities has been reflected in earnings in Other (income) and expense, net. As of March 31, 2025, K-C Argentina had an immaterial net peso monetary position. Net sales of K-C Argentina were approximately 1% of our consolidated net sales for the three months ended March 31, 2025 and 2024.

As of April 1, 2022, we adopted highly inflationary accounting for our subsidiary in Türkiye (“K-C Türkiye”). The effect of changes in exchange rates on lira-denominated monetary assets and liabilities has been reflected in earnings in Other (income) and expense, net. As of March 31, 2025, K-C Türkiye had an immaterial net lira monetary position. Net sales of K-C Türkiye were less than 1% of our consolidated net sales for the three months ended March 31, 2025 and 2024.

Recently Issued Accounting Standards

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

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

Note 2. 2024 Transformation Initiative

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

The 2024 Transformation Initiative is expected to be completed by the end of 2026, with total costs anticipated to be approximately $1.5 billion pre-tax. Cash costs are expected to be approximately 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. Through March 31, 2025, cumulative pre-tax charges for the 2024 Transformation Initiative were $534 ($416 after-tax).

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

						Three Months Ended March 31
						2025						2024
Cost of products sold:
Charges for workforce reductions						$	14					$	—
Incremental depreciation						32						—
Other exit costs						7						—
Total						53						—
Marketing, research and general expenses:
Charges for workforce reductions						2						23
Other exit costs						20						22
Total						22						45
Nonoperating expense						2						—
Total charges(a)						77						45
Provision for income taxes						—						(11)
Net charges						$	77					$	34

(a)We do not include 2024 Transformation Initiative charges within our segment operating results. Total impact of these charges to the NA, IPC and IFP segments were $27, $20 and $14, respectively, for the three months ended March 31, 2025, and $38, $3 and $4, respectively, for the three months ended March 31, 2024, with the residual relating to Corporate & Other. See further discussion around our segment operating results in Note 7.

The following summarizes the 2024 Transformation Initiative liabilities activity:

						2025
2024 Transformation Initiative liabilities as of January 1						$	130
Charges for workforce reductions and other cash exit costs						43
Cash payments						(60)
Currency and other						(5)
2024 Transformation Initiative liabilities as of March 31						$	108

2024 Transformation Initiative liabilities as of March 31, 2025 of $108 are recorded in Accrued expenses and other current liabilities. The charges related to the 2024 Transformation Initiative are reflected within Operating Activities of our condensed consolidated statements of cash flows.

Note 3. Fair Value Information

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

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

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

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

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

During the three months ended March 31, 2025 and for the full year 2024, there were no significant transfers to or from level 3 fair value determinations.

Derivative assets and liabilities are measured on a recurring basis at fair value. As of March 31, 2025 and December 31, 2024, derivative assets were $166 and $189, respectively, and derivative liabilities were $109 and $137, respectively. The fair values of derivatives used to manage interest rate risk and commodity price risk are based on the Secured Overnight Financing Rate ("SOFR") and interest rate swap curves and on commodity price quotations, respectively. The fair values of hedging instruments used to manage foreign currency risk are based on published quotations of spot currency rates and forward points, which are converted into implied forward currency rates. Measurement of our derivative assets and liabilities is considered a level 2 measurement. See Note 6 for additional information on our use of derivative instruments.

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

Company-owned life insurance ("COLI") assets are measured on a recurring basis at fair value. COLI assets were $71 as of March 31, 2025 and December 31, 2024. The COLI policies are a source of funding primarily for our nonqualified employee benefits and are included in Other Assets in the condensed consolidated balance sheets. The COLI policies are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

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

						Fair Value Hierarchy Level						Carrying Amount						Estimated Fair Value						Carrying Amount						Estimated Fair Value
									March 31, 2025												December 31, 2024
Assets
Cash and cash equivalents(a)						1						$	563					$	563					$	1,021					$	1,021
Time deposits(b)						1						110						110						196						196
Non-US government bonds(c)						2						7						7						15						15
Liabilities
Short-term debt(d)						2						51						51						3						3
Long-term debt(e)						2						7,196						6,707						7,440						6,853

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

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

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

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

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

Note 4. Earnings Per Share ("EPS")

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

						Three Months Ended March 31
(Millions of shares)						2025						2024
Basic						331.8						336.9
Dilutive effect of stock options and restricted share unit awards						1.5						1.4
Diluted						333.3						338.3

Options outstanding not included in the computation of diluted EPS because their exercise price was greater than the average market price of the common shares were not material. The number of common shares outstanding as of March 31, 2025 and 2024 was 331.9 million and 336.8 million, respectively.

Note 5. Stockholders' Equity

Net unrealized currency gains or losses resulting from the translation of assets and liabilities of foreign subsidiaries, except those in highly inflationary economies, are recorded in Accumulated Other Comprehensive Income ("AOCI"). For these operations, changes in exchange rates generally do not affect cash flows; therefore, unrealized translation adjustments are recorded in AOCI rather than net income. Upon sale or substantially complete liquidation of any of these subsidiaries, the applicable unrealized translation adjustment would be removed from AOCI and reported as part of the gain or loss on the sale or liquidation. The change in unrealized currency translation for the three months ended March 31, 2025 was primarily due to the strengthening of certain foreign currencies versus the U.S. dollar.

Also included in unrealized translation amounts are the effects of foreign exchange rate changes on intercompany balances of a long-term investment nature and transactions designated as hedges of net foreign investments.

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

						Unrealized Translation						Defined Benefit Pension Plans						Other Postretirement Benefit Plans						Cash Flow Hedges
Balance as of December 31, 2023						$	(2,678)					$	(791)					$	39					$	(152)
Other comprehensive income (loss) before reclassifications						(144)						3						1						60
(Income) loss reclassified from AOCI						—						8			(a)			(1)			(a)			—
Net current period other comprehensive income (loss)						(144)						11						—						60
Balance as of March 31, 2024						$	(2,822)					$	(780)					$	39					$	(92)
Balance as of December 31, 2024						$	(3,068)					$	(775)					$	47					$	30
Other comprehensive income (loss) before reclassifications						148						(10)						(1)						(19)
(Income) loss reclassified from AOCI						—						8			(a)			(1)			(a)			6			(b)
Net current period other comprehensive income (loss)						148						(2)						(2)						(13)
Balance as of March 31, 2025						$	(2,920)					$	(777)					$	45					$	17

(a) Included in Nonoperating expense as part of the computation of net periodic benefit costs.

(b) Included in Interest expense, Cost of products sold or Other (income) and expense, net, based on the income statement line that the hedged exposure affects earnings (see Note 6 for further details).

Note 6. Objectives and Strategies for Using Derivatives

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

As of March 31, 2025 and December 31, 2024, derivative assets were $166 and $189, respectively, and derivative liabilities were $109 and $137, respectively, primarily comprised of foreign currency exchange, interest rate and commodity price contracts. Derivative assets are recorded in Other current assets or Other Assets, as appropriate, and derivative liabilities are recorded in Accrued expenses and other current liabilities or Other Liabilities, as appropriate.

Foreign Currency Exchange Rate Risk

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

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

Interest Rate Risk

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

Commodity Price Risk

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

Fair Value Hedges

Derivative instruments that are designated and qualify as fair value hedges are predominantly used to manage interest rate risk. The fair values of these derivative instruments are recorded as an asset or liability, as appropriate, with the offset recorded in Interest expense. The offset to the change in fair values of the related debt is also recorded in Interest expense. Any realized gain or loss on the derivatives that hedge interest rate risk is amortized to Interest expense over the life of the related debt. As of March 31, 2025, the aggregate notional values and carrying values of debt subject to outstanding interest rate contracts designated as fair value hedges were $525 and $492, respectively. For the three months ended March 31, 2025 and 2024, gains or losses recognized in Interest expense for interest rate swaps were not material.

Cash Flow Hedges

For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative instrument is initially recorded in AOCI, net of related income taxes, and recognized in earnings in the same income statement line and period that the hedged exposure affects earnings. As of March 31, 2025, the aggregate notional value of outstanding foreign exchange derivative contracts designated as cash flow hedges was $3.2 billion. For the three months ended March 31, 2025 and 2024, no material gains or losses were reclassified into Interest expense, Cost of products sold or Other (income) and expense, net as a result of the discontinuance of cash flow hedges due to the original forecasted transaction no longer being probable of occurring. As of March 31, 2025, gains expected to be reclassified from AOCI into Interest expense, Cost of products sold or Other (income) and expense, net during the next twelve months are $24. The maximum maturity of cash flow hedges in place as of March 31, 2025 is February 2028.

Net Investment Hedges

For derivative instruments that are designated and qualify as net investment hedges, the aggregate notional value was $1.7 billion as of March 31, 2025. We exclude the interest accruals on cross-currency swap contracts and the

forward points on foreign exchange forward contracts from the assessment and measurement of hedge effectiveness. We recognize the interest accruals on cross-currency swap contracts in earnings within Interest expense. We amortize the forward points on foreign exchange contracts into earnings within Interest expense over the life of the hedging relationship. Changes in fair value of net investment hedges are recorded in AOCI and offset the change in the value of the net investment being hedged. For the three months ended March 31, 2025 and 2024, unrealized losses of $20 and unrealized gains of $27, respectively, related to net investment hedge fair value changes were recorded in AOCI and no material amounts were reclassified from AOCI to Interest expense.

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

Undesignated Hedging Instruments

Gains or losses on undesignated foreign exchange hedging instruments are immediately recognized in Other (income) and expense, net. Gains of $24 and losses of $23 were recorded for the three months ended March 31, 2025 and 2024, respectively. The effect on earnings from the use of these non-designated derivatives is substantially neutralized by the transactional gains and losses recorded on the underlying assets and liabilities. As of March 31, 2025, the notional value of these undesignated derivative instruments was approximately $3.4 billion.

Note 7. Segment Reporting

In the fourth quarter of 2024, we realigned our internal operating and management structure as part of the 2024 Transformation Initiative. As result, we manage and report our operations through operating segments that have been aggregated into three reportable segments defined by geographic regions and product groupings: North America ("NA"), International Personal Care ("IPC") and International Family Care and Professional ("IFP"). Further, our measure of segment profitability was changed to include the effects of changes in exchange rates on monetary assets and liabilities for subsidiaries where we have adopted highly inflationary accounting. Segment results for the historical period presented in these condensed consolidated financial statements have been recast to reflect these changes.

The reportable segments were determined in accordance with how our Chief Executive Officer, who is our chief operating decision maker ("CODM"), develops and executes global strategies to drive growth and profitability. These strategies include global plans for branding and product positioning, technology, research and development programs, cost reductions including supply chain management, and capacity and capital investments for each of these businesses. The primary measure of segment profitability utilized by our CODM is segment operating profit. Our CODM uses this measure to assess the operating results and performance of our segments, perform analytical comparisons to budget and allocate resources to each segment. Segment operating profit excludes Corporate & Other, which primarily encompasses certain unallocated general corporate expenses, impairment charges, one-time (gains) or losses associated with acquisitions and divestitures, and costs related to our reorganization activities that are not associated with the ongoing operations of the segments. Our CODM does not use assets by segment to evaluate performance or allocate resources. Therefore, we do not disclose assets by segment.

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

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

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

• International Family Care and Professional** consists of two core categories — Family Care and Professional, including facial and bathroom tissue, paper towels, napkins, wipers, tissue, towels, soaps and sanitizers and other related products. These products are sold under the Kleenex, Scott, Viva, Andrex, Scottex, Wypall and other brand names.

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

						Three Months Ended March 31, 2025
						NA						IPC						IFP						Total
Net Sales						$	2,666					$	1,383					$	791					$	4,840
Cost of Products Sold						1,563						908						574						3,045
Advertising and Promotion Expense						165						105						18						288
Research, Selling and General Expense						262						175						93						530
Other (Income) and Expense, net(a)						—						1						—						1
Segment Operating Profit						$	676					$	194					$	106					$	976
Corporate & Other																								(207)
Total Operating Profit																								$	769

						Three Months Ended March 31, 2024
						NA						IPC						IFP						Total
Net Sales						$	2,774					$	1,518					$	857					$	5,149
Cost of Products Sold						1,627						982						628						3,237
Advertising and Promotion Expense						190						110						16						316
Research, Selling and General Expense						290						175						102						567
Other (Income) and Expense, net(a)						—						9						1						10
Segment Operating Profit						$	667					$	242					$	110					$	1,019
Corporate & Other																								(166)
Total Operating Profit																								$	853

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

Depreciation and amortization expense by segment was:

						Three Months Ended March 31
						2025						2024
NA						$	104					$	104
IPC						65						47
IFP						40						32
Total Segment Depreciation and Amortization						209						183
Corporate & Other						9						2
Total						$	218					$	185

Capital spending by segment was:

						Three Months Ended March 31
						2025						2024
NA						$	143					$	118
IPC						36						42
IFP						25						32
Total Segment Capital Spending						204						192
Corporate & Other						—						2
Total						$	204					$	194

Sales of Principal Products:

						Three Months Ended March 31
						2025						2024
Baby and Child Care						$	1,637					$	1,773
Family Care						1,569						1,599
Professional						689						823
Adult Care						475						463
Feminine Care						443						467
All other						27						24
Consolidated						$	4,840					$	5,149

Note 8. Supplemental Balance Sheet Data

The following schedule presents a summary of inventories by major class:

						March 31, 2025																		December 31, 2024
						LIFO						Non-LIFO						Total						LIFO						Non-LIFO						Total
Raw materials						$	128					$	260					$	388					$	122					$	261					$	383
Work in process						110						83						193						116						74						190
Finished goods						566						652						1,218						510						631						1,141
Supplies and other						—						316						316						—						308						308
						804						1,311						2,115						748						1,274						2,022
Excess of FIFO or weighted-average cost over LIFO cost						(206)						—						(206)						(200)						—						(200)
Total						$	598					$	1,311					$	1,909					$	548					$	1,274					$	1,822

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

The following schedule presents a summary of property, plant and equipment, net:

			March 31, 2025						December 31, 2024
Land			$	157					$	157
Buildings			2,948						2,901
Machinery and equipment			15,246						15,020
Construction in progress			816						854
			19,167						18,932
Less accumulated depreciation			(11,660)						(11,419)
Total			$	7,507					$	7,513

Supplier Finance Program

We have a supplier finance program managed through two global financial institutions under which we agree to pay the financial institutions the stated amount of confirmed invoices from our participating suppliers on the invoice due date. We, or the global financial institutions, may terminate our agreements at any time upon 30 days written notice. The global financial institutions may terminate our agreements at any time upon three days written notice in the event there are insufficient funds available for disbursement. We do not provide any forms of guarantees under these agreements. Supplier participation in the program is solely up to the supplier, and the participating suppliers negotiate their arrangements directly with the global financial institutions. We have no economic interest in a supplier’s decision to participate in the program, and their participation has no bearing on our payment terms or amounts due. The payment terms that we have with our suppliers under this program generally range from 75 to 180 days and are considered commercially reasonable. The outstanding amount related to the suppliers participating in this program was $1.0 billion as of March 31, 2025 and December 31, 2024, and was recorded within Trade accounts payable.