Item 1. Financial Statements

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Item 1. Financial Statements

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended September 30				Nine Months Ended September 30
(In millions, except per share amounts)	2025		2024		2025		2024
Net Sales	$	4,150	$	4,144	$	12,367	$	12,701
Cost of products sold	2,657		2,580		7,909		7,857
Gross Profit	1,493		1,564		4,458		4,844
Marketing, research and general expenses	855		1,006		2,573		2,924
Impairment of intangible assets	—		97		—		97
Other (income) and expense, net	17		(565)		41		(457)
Operating Profit	621		1,026		1,844		2,280
Nonoperating expense	(16)		(15)		(50)		(45)
Interest income	6		18		18		37
Interest expense	(65)		(67)		(196)		(206)
Income from Continuing Operations Before Income Taxes and Equity Interests	546		962		1,616		2,066
Provision for income taxes	(248)		(187)		(495)		(395)
Income from Continuing Operations Before Equity Interests	298		775		1,121		1,671
Share of net income of equity companies	46		48		137		172
Income from Continuing Operations	344		823		1,258		1,843
Income from Discontinued Operations, Net of Income Taxes	110		92		281		283
Net Income	454		915		1,539		2,126
Net income attributable to noncontrolling interests	(8)		(8)		(17)		(28)
Net Income Attributable to Kimberly-Clark Corporation	$	446	$	907	$	1,522	$	2,098

Per Share Basis
Net Income Attributable to Kimberly-Clark Corporation
Basic:
Continuing operations	$	1.01	$	2.43	$	3.74	$	5.39
Discontinued operations	0.33		0.27		0.85		0.84
Basic Earnings per Share	$	1.34	$	2.70	$	4.59	$	6.23

Diluted:
Continuing operations	$	1.01	$	2.42	$	3.73	$	5.37
Discontinued operations	0.33		0.27		0.84		0.84
Diluted Earnings per Share	$	1.34	$	2.69	$	4.57	$	6.21

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 September 30				Nine Months Ended September 30
(In millions)	2025		2024		2025		2024
Net Income	$	454	$	915	$	1,539	$	2,126
Other Comprehensive Income (Loss), Net of Tax
Unrealized currency translation adjustments	(11)		149		361		(48)
Employee postretirement benefits	13		(9)		4		12
Cash flow hedges	5		(62)		(94)		58
Total Other Comprehensive Income (Loss), Net of Tax	7		78		271		22
Comprehensive Income	461		993		1,810		2,148
Comprehensive income attributable to noncontrolling interests	(5)		(14)		(20)		(28)
Comprehensive Income Attributable to Kimberly-Clark Corporation	$	456	$	979	$	1,790	$	2,120

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)	September 30, 2025		December 31, 2024
ASSETS
Current Assets
Cash and cash equivalents	$	617	$	1,010
Accounts receivable, net	1,972		1,728
Inventories	1,541		1,452
Other current assets	570		694
Current assets of discontinued operations	774		696
Total Current Assets	5,474		5,580
Property, Plant and Equipment, Net	6,530		6,284
Investments in Equity Companies	355		314
Goodwill	1,833		1,796
Other Intangible Assets, Net	78		80
Other Assets	996		984
Non-current Assets of Discontinued Operations	1,622		1,508
TOTAL ASSETS	$	16,888	$	16,546

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Debt payable within one year	$	834	$	564
Trade accounts payable	3,227		3,264
Accrued expenses and other current liabilities	1,873		2,091
Dividends payable	415		402
Current liabilities of discontinued operations	728		683
Total Current Liabilities	7,077		7,004
Long-Term Debt	6,470		6,854
Non-current Employee Benefits	616		628
Deferred Income Taxes	413		300
Other Liabilities	653		609
Non-current Liabilities of Discontinued Operations	154		139
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 September 30, 2025 and December 31, 2024	473		473
Additional paid-in capital	829		862
Common stock held in treasury, at cost - 46.7 and 46.8 million shares as of September 30, 2025 and December 31, 2024, respectively	(5,992)		(5,986)
Retained earnings	9,520		9,257
Accumulated other comprehensive income (loss)	(3,498)		(3,766)
Total Kimberly-Clark Corporation Stockholders' Equity	1,332		840
Noncontrolling Interests	136		135
Total Stockholders' Equity	1,468		975
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	16,888	$	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 September 30, 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 June 30, 2025		378,597		$	473	$	798	46,682	$	(5,986)	$	9,494	$	(3,508)	$	132	$	1,403
Net income in stockholders' equity(a)		—		—		—		—	—		446		—		7		453
Other comprehensive income, net of tax(a)		—		—		—		—	—		—		10		(3)		7
Stock-based awards exercised or vested		—		—		(12)		(83)	11		—		—		—		(1)
Repurchases of common stock		—		—		—		140	(17)		—		—		—		(17)
Recognition of stock-based compensation		—		—		41		—	—		—		—		—		41
Dividends declared ($1.26 per share)		—		—		—		—	—		(418)		—		—		(418)
Other		—		—		2		—	—		(2)		—		—		—
Balance at September 30, 2025		378,597		$	473	$	829	46,739	$	(5,992)	$	9,520	$	(3,498)	$	136	$	1,468


		Nine Months Ended September 30, 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)		—		—		—		—	—		1,522		—		16		1,538
Other comprehensive income, net of tax(a)		—		—		—		—	—		—		268		3		271
Stock-based awards exercised or vested		—		—		(153)		(1,114)	141		—		—		—		(12)
Repurchases of common stock		—		—		—		1,055	(140)		—		—		—		(140)
Recognition of stock-based compensation		—		—		111		—	—		—		—		—		111
Dividends declared ($3.78 per share)		—		—		—		—	—		(1,255)		—		(17)		(1,272)
Other		—		—		9		—	(7)		(4)		—		(1)		(3)
Balance at September 30, 2025		378,597		$	473	$	829	46,739	$	(5,992)	$	9,520	$	(3,498)	$	136	$	1,468

(a) Excludes redeemable interests' share.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)


		Three Months Ended September 30, 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 June 30, 2024		378,597		$	473	$	802	41,588	$	(5,241)	$	8,734	$	(3,632)	$	145	$	1,281
Net income in stockholders' equity(a)		—		—		—		—	—		907		—		7		914
Other comprehensive income, net of tax(a)		—		—		—		—	—		—		72		6		78
Stock-based awards exercised or vested		—		—		2		(695)	83		—		—		—		85
Repurchases of common stock		—		—		—		4,180	(594)		—		—		—		(594)
Recognition of stock-based compensation		—		—		38		—	—		—		—		—		38
Dividends declared ($1.22 per share)		—		—		—		—	—		(409)		—		1		(408)
Other		—		—		2		—	1		47		—		—		50
Balance at September 30, 2024		378,597		$	473	$	844	45,073	$	(5,751)	$	9,279	$	(3,560)	$	159	$	1,444


		Nine Months Ended September 30, 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)		—		—		—		—	—		2,098		—		25		2,123
Other comprehensive income, net of tax(a)		—		—		—		—	—		—		22		—		22
Stock-based awards exercised or vested		—		—		(148)		(1,927)	223		—		—		—		75
Repurchases of common stock		—		—		—		5,401	(753)		—		—		—		(753)
Recognition of stock-based compensation		—		—		107		—	—		—		—		—		107
Dividends declared ($3.66 per share)		—		—		—		—	—		(1,231)		—		(19)		(1,250)
Other		—		—		7		—	1		44		—		—		52
Balance at September 30, 2024		378,597		$	473	$	844	45,073	$	(5,751)	$	9,279	$	(3,560)	$	159	$	1,444

(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)


	Nine Months Ended September 30
(In millions)	2025		2024
Operating Activities
Net income	$	1,539	$	2,126
Depreciation and amortization	616		564
Asset impairments	—		114

Stock-based compensation	115		110
Deferred income taxes	204		(86)
Net (gains) losses on asset and business dispositions	42		(474)
Equity companies' earnings (in excess of) less than dividends paid	(56)		(93)
Operating working capital	(679)		154
Postretirement benefits	17		10
Other	7		(8)
Cash Provided by Operations	1,805		2,417
Investing Activities
Capital spending	(741)		(512)

Proceeds from asset and business dispositions	12		649
Investments in time deposits	(375)		(456)
Maturities of time deposits	416		428
Other	38		(15)
Cash (Used for) Provided by Investing	(650)		94
Financing Activities
Cash dividends paid	(1,242)		(1,220)
Change in short-term debt	414		2

Debt repayments	(550)		(554)
Proceeds from exercise of stock options	40		128
Repurchases of common stock	(140)		(752)

Cash dividends paid to noncontrolling interests	(18)		(19)
Other	(75)		(65)
Cash Used for Financing	(1,571)		(2,480)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	29		(13)
Change in Cash and Cash Equivalents	(387)		18

Cash and cash equivalents from continuing operations - beginning of period	1,010		1,075
Cash and cash equivalents from discontinued operations - beginning of period (a)	11		18
Cash and Cash Equivalents - Beginning of Period	1,021		1,093

Cash and cash equivalents from continuing operations - end of period	617		1,098
Cash and cash equivalents from discontinued operations - end of period(a)	17		13
Cash and Cash Equivalents - End of Period	$	634	$	1,111

(a) Included in Current assets of discontinued operations.

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," "Company," "Kimberly-Clark," "K-C," "we," "our" and "us" refer to Kimberly-Clark Corporation and its consolidated subsidiaries.

International Family Care and Professional ("IFP") Transaction

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

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

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 September 30, 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 and nine months ended September 30, 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 September 30, 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 and nine months ended September 30, 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.

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

Note 2. 2024 Transformation Initiative

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

The 2024 Transformation Initiative is expected to be completed by the end of 2026, with total costs anticipated to be approximately $1.5 billion pre-tax. Cash costs are expected to be approximately 60% of that amount, primarily related to workforce reductions and other program costs. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets. Through September 30, 2025, cumulative pre-tax charges for the 2024 Transformation Initiative were $718 ($561 after-tax).

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


	Three Months Ended September 30				Nine Months Ended September 30
	2025		2024		2025		2024
Cost of products sold:
Charges for workforce reductions	$	3	$	12	$	17	$	46

Asset write-offs	7		8		27		13
Incremental depreciation	15		10		104		13
Other exit costs	9		1		21		4
Total	34		31		169		76
Marketing, research and general expenses:
Charges for workforce reductions	1		48		16		117
Other exit costs	27		45		73		91
Total	28		93		89		208
Other (income) and expense, net(a)	—		—		—		75
Nonoperating expense	—		—		3		—
Total charges(b)	62		124		261		359
Provision for income taxes	(12)		(18)		(39)		(102)
Net charges	50		106		222		257
Net charges related to noncontrolling interests	(3)		—		(7)		—
Net charges attributable to Kimberly-Clark Corporation	$	47	$	106	$	215	$	257

(a)Other (Income) and expense, net includes losses recognized for the exit of certain businesses and markets as part of the 2024 Transformation Initiative.

(b)We do not include 2024 Transformation Initiative charges within our segment operating results. Total impact of these charges to the NA and IPC segments were $32 and $36, respectively, for the three months ended September 30, 2025, $60 and $31, respectively, for the three months ended September 30, 2024, $117 and $127, respectively, for the nine months ended September 30, 2025, and $125 and $160, respectively, for the nine months ended September 30, 2024, with the residual relating to Corporate & Other. See further discussion around our segment operating results in Note 11.

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	126
Cash payments	(183)
Currency and other	(10)
2024 Transformation Initiative liabilities as of September 30	$	63

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

Note 3. Discontinued Operations

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

Financial Information of Discontinued Operations

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


	Three Months Ended September 30				Nine Months Ended September 30
	2025		2024		2025		2024
Net Sales	$	828	$	808	$	2,416	$	2,429
Cost of products sold	579		588		1,733		1,768
Gross Profit	249		220		683		661
Marketing, research and general expenses	103		91		297		278
Other (income) and expense, net	—		1		2		1
Operating Profit	146		128		384		382
Nonoperating expense	—		—		—		—
Income from discontinued operations before income taxes	146		128		384		382
Provision for income taxes	(36)		(36)		(103)		(99)
Income from Discontinued Operations, Net of Income Taxes	$	110	$	92	$	281	$	283

As a result of the IFP Transaction, we incurred separation costs of $17 and $50 for the three and nine months ended September 30, 2025, respectively, which are included in the reported amounts above. These costs were primarily related to external advisory, legal, accounting, contractor and other incremental costs directly related to the IFP Transaction.

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


	Three Months Ended September 30				Nine Months Ended September 30
	2025		2024		2025		2024
Depreciation and Amortization	$	—	$	32	$	68	$	96
Capital Spending	27		25		73		79

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


	September 30, 2025		December 31, 2024
Assets
Cash and cash equivalents	$	17	$	11
Accounts receivable, net	337		281
Inventories	405		370
Other current assets	15		34
Current Assets of Discontinued Operations	$	774	$	696

Property, Plant and Equipment, Net	$	1,317	$	1,229

Goodwill	180		168
Other Intangible Assets, Net	7		7
Other Assets	118		104
Non-current Assets of Discontinued Operations	$	1,622	$	1,508

Liabilities
Debt payable within one year	$	4	$	4
Trade accounts payable	471		451
Accrued expenses and other current liabilities	253		228

Current Liabilities of Discontinued Operations	$	728	$	683

Long-Term Debt	$	19	$	21
Non-current Employee Benefits	15		15
Deferred Income Taxes	32		26
Other Liabilities	88		77
Non-current Liabilities of Discontinued Operations	$	154	$	139

Joint Venture Agreement and Ancillary Agreements

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

Note 4**. Divestitures**

On July 1, 2024, we completed the sale transaction of our former personal protective equipment ("PPE") business for total consideration of $635. Upon closure of the transaction, a pre-tax gain of $566 ($453 after-tax) was recognized in Other (income) and expense, net. This gain is net of transaction costs of $14 that were determined to be directly attributable to the sale transaction.

See Note 3, Acquisitions and Divestitures, to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024 for further information.

Note 5. Impairment of Intangible Assets

During the third quarter of 2024, we revised internal financial projections for our Softex and Thinx businesses to reflect updated expectations of future financial performance in light of current performance and as part of our re-organization efforts discussed in Note 2. As part of these revisions, we performed impairment assessments for our indefinite-lived brand names and finite-lived intangible assets, primarily brand names and distributor relationships. As a result of these assessments, we recognized impairment charges of $97 pre-tax ($57 after-tax) to write-down these intangible assets to their respective fair values.

See Note 4, Goodwill and Other Intangible Assets, to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024 for further information.

Note 6. Fair Value Information

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

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

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

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

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

During the nine months ended September 30, 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 September 30, 2025 and December 31, 2024, derivative assets were $73 and $189, respectively, and derivative liabilities were $208 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 10 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 September 30, 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 September 30, 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
		September 30, 2025					December 31, 2024
Assets
Cash and cash equivalents(a)	1		$	617	$	617		$	1,010	$	1,010
Time deposits(b)	1		160		160			181		181
Non-US government bonds(c)	2		—		—			15		15
Liabilities
Short-term debt(d)	2		421		421			3		3

Long-term debt(e)	2		6,883		6,508			7,415		6,828

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

(b)Time deposits are composed of deposits with original maturities of more than 90 days but less than one year and instruments with original maturities of greater than one year, included in Other current assets or Other Assets in the 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 7. Income Taxes

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. During the three months ended September 30, 2025, we recorded incremental tax charges of approximately $130 primarily relating to a valuation allowance on current and prior year U.S. foreign tax credits. Of these total charges, approximately $96 was associated with the realizability of our prior year U.S. foreign tax credits.

The effective tax rate for the three months ended September 30, 2025 and 2024 was 45.4% and 19.4%, respectively, and 30.6% and 19.1% for the nine months ended September 30, 2025 and 2024, respectively. The increases relative to the prior periods were primarily driven by the valuation allowance charges relating to the enactment of OBBBA discussed above and the resolution of certain tax matters in the prior year.

Note 8. Earnings Per Share

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


	Three Months Ended September 30				Nine Months Ended September 30
(In millions, except per share amounts)	2025		2024		2025		2024
Income From Continuing Operations	$	344	$	823	$	1,258	$	1,843
Less: Net income attributable to noncontrolling interests	(8)		(8)		(17)		(28)
Income From Continuing Operations Attributable to Kimberly-Clark Corporation	336		815		1,241		1,815
Income From Discontinued Operations, Net of Income Taxes	110		92		281		283
Net Income Attributable to Kimberly-Clark Corporation	$	446	$	907	$	1,522	$	2,098

Weighted-Average Common Shares
Basic	331.8		335.7		331.9		336.6
Dilutive effect of stock options and restricted share unit awards	1.3		1.5		1.3		1.3
Diluted	333.1		337.2		333.2		337.9

Basic:
Continuing Operations	$	1.01	$	2.43	$	3.74	$	5.39
Discontinued Operations	0.33		0.27		0.85		0.84
Basic Earnings per Share	$	1.34	$	2.70	$	4.59	$	6.23

Diluted:
Continuing Operations	$	1.01	$	2.42	$	3.73	$	5.37
Discontinued Operations	0.33		0.27		0.84		0.84
Diluted Earnings per Share	$	1.34	$	2.69	$	4.57	$	6.21

We use the treasury stock method to calculate the dilutive effect of stock options and other stock-based awards. Options outstanding not included in the computation of diluted EPS because their exercise price was greater than the average market price of the common shares were not material. The number of common shares outstanding as of September 30, 2025 and 2024 was 331.9 million and 333.5 million, respectively.

Note 9. 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 nine months ended September 30, 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	(90)			(10)			1			19
(Income) loss reclassified from AOCI	43		(b)	23		(a)	(2)		(a)	38		(c)
Net current period other comprehensive income (loss)	(47)			13			(1)			57

Balance as of September 30, 2024	$	(2,725)		$	(778)		$	38		$	(95)

Balance as of December 31, 2024	$	(3,068)		$	(775)		$	47		$	30
Other comprehensive income (loss) before reclassifications	355			(22)			4			(117)
(Income) loss reclassified from AOCI	—			25		(a)	(3)		(a)	26		(c)
Net current period other comprehensive income (loss)	355			3			1			(91)

Balance as of September 30, 2025	$	(2,713)		$	(772)		$	48		$	(61)

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

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

(c) Included in Interest expense, Cost of products sold or Other (income) and expense, net, based on the income statement line that the hedged exposure affects earnings. For the nine months ended September 30, 2025, pre-tax losses of $20 were reclassified into Income from Discontinued Operations, Net of Income Taxes due to the discontinuance of cash flow hedge accounting as a result of the IFP Transaction (see Note 10 for further details).

Note 10. 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 September 30, 2025 and December 31, 2024, derivative assets were $73 and $189, respectively, and derivative liabilities were $208 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 primarily designated as cash flow hedges of specific quantities of the underlying commodity expected to be purchased in future months. In addition, we utilize negotiated contracts of varying durations along with strategic pricing mechanisms to manage volatility for a portion of our commodity costs.

Fair Value Hedges

Derivative instruments that are designated and qualify as fair value hedges are predominantly used to manage interest rate risk. The fair values of these derivative instruments are recorded as an asset or liability, as appropriate, with the offset recorded in Interest expense. The offset to the change in fair values of the related debt is also recorded in Interest expense. Any realized gain or loss on the derivatives that hedge interest rate risk is amortized to Interest expense over the life of the related debt. As of September 30, 2025, the aggregate notional values and carrying values of debt subject to outstanding interest rate contracts designated as fair value hedges were $425 and $401, respectively. For the nine months ended September 30, 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 September 30, 2025, the aggregate notional value of outstanding foreign exchange and commodity derivative contracts designated as cash flow hedges was $2.6 billion. During the nine months ended September 30, 2025, we discontinued cash flow hedge accounting for certain foreign exchange and commodity instruments with a notional value of $694 because the forecasted transactions, primarily relating to the IFP Business, were no longer probable of occurring. As a result, pre-tax losses of $20 were reclassified from AOCI into Income from Discontinued Operations, Net of Income Taxes. For the nine months ended September 30, 2024, no material gains or losses were reclassified from AOCI into earnings as a result of the discontinuance of cash flow hedge accounting. As of September 30, 2025, losses expected to be reclassified from AOCI into Interest expense, Cost of products sold or Other (income) and expense, net during the next twelve months are $25. The maximum maturity of cash flow hedges in place as of September 30, 2025 is August 2028.

Net Investment Hedges

For derivative instruments that are designated and qualify as net investment hedges, the aggregate notional value was $1.2 billion as of September 30, 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. Unrealized gains and losses related to changes in fair value of net investment hedges are recorded in AOCI and offset the change in the value of the net investment being hedged. Unrealized gains of $29 and unrealized losses of $40 were recorded in AOCI for the three months ended September 30, 2025 and 2024, respectively. Unrealized losses of $119 and unrealized gains of $5 were recorded in AOCI for the nine months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, no material amounts were reclassified from AOCI to Interest expense.

For the nine months ended September 30, 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 and commodity hedging instruments are immediately recognized in Other (income) and expense, net. Losses of $10 and gains of $54 were recorded for the three months ended September 30, 2025 and 2024, respectively. Gains of $52 and $22 were recorded in the nine months ended September 30, 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 September 30, 2025, the notional value of these undesignated derivative instruments was approximately $5.3 billion.

Note 11. Segment Reporting

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

These segments differ from those used in prior periods due to changes to our reportable segments effective in the fourth quarter of 2024 (refer to our Annual Report on Form 10-K for further details) and the following changes effective in the second quarter of 2025:

IFP Transaction

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

Corporate and Other

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

Operations of the former IFP segment that were divested prior to the IFP Transaction and therefore not reported as discontinued operations.
Costs previously allocated to the former IFP segment that are not directly attributable to the operations included in the IFP Transaction and therefore are not reported as discontinued operations.

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

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

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

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 September 30, 2025
	NA		IPC		Total
Segment Net Sales	$	2,714	$	1,436	$	4,150
Corporate & Other					—
Total Net Sales					$	4,150

Cost of Products Sold	1,655		957		2,612
Advertising and Promotion Expense	184		90		274
Research, Selling and General Expense	235		173		408
Other (Income) and Expense, net(a)	—		2		2
Segment Operating Profit	$	640	$	214	$	854
Corporate & Other					(233)
Total Operating Profit					$	621


	Nine Months Ended September 30, 2025
	NA		IPC		Total
Segment Net Sales	$	8,112	$	4,255	$	12,367
Corporate & Other					—
Total Net Sales					$	12,367

Cost of Products Sold	4,860		2,830		7,690
Advertising and Promotion Expense	519		293		812
Research, Selling and General Expense	760		529		1,289
Other (Income) and Expense, net(a)	—		6		6
Segment Operating Profit	$	1,973	$	597	$	2,570
Corporate & Other					(726)
Total Operating Profit					$	1,844


	Three Months Ended September 30, 2024
	NA		IPC		Total
Segment Net Sales	$	2,735	$	1,409	$	4,144
Corporate & Other					—
Total Net Sales					$	4,144

Cost of Products Sold	1,615		924		2,539
Advertising and Promotion Expense	205		101		306
Research, Selling and General Expense	274		182		456
Other (Income) and Expense, net(a)	—		1		1
Segment Operating Profit	$	641	$	201	$	842
Corporate & Other					184
Total Operating Profit					$	1,026

(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.


	Nine Months Ended September 30, 2024
	NA		IPC		Total
Segment Net Sales	$	8,294	$	4,362	$	12,656
Corporate & Other					45
Total Net Sales					$	12,701

Cost of Products Sold	4,869		2,837		7,706
Advertising and Promotion Expense	581		311		892
Research, Selling and General Expense	852		541		1,393
Other (Income) and Expense, net(a)	—		12		12
Segment Operating Profit	$	1,992	$	661	$	2,653
Corporate & Other					(373)
Total Operating Profit					$	2,280

Depreciation and amortization expense by segment was:


	Three Months Ended September 30				Nine Months Ended September 30
	2025		2024		2025		2024
NA	$	115	$	108	$	343	$	318
IPC	61		49		196		144
Total Segment Depreciation and Amortization	176		157		539		462
Corporate & Other	—		2		9		6
Total(a)	$	176	$	159	$	548	$	468

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

Capital spending by segment was:


	Three Months Ended September 30				Nine Months Ended September 30
	2025		2024		2025		2024
NA	$	181	$	100	$	465	$	317
IPC	36		34		107		111
Total Segment Capital Spending	217		134		572		428
Corporate & Other	96		1		96		5
Total(a)	$	313	$	135	$	668	$	433

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

Sales of Principal Products:


	Three Months Ended September 30				Nine Months Ended September 30
	2025		2024		2025		2024
Baby and Child Care	$	1,685	$	1,721	$	5,090	$	5,308
Family Care	1,036		989		3,060		2,960
Professional	474		509		1,385		1,668
Adult Care	490		466		1,458		1,384
Feminine Care	431		437		1,286		1,317
All other	34		22		88		64
Total	$	4,150	$	4,144	$	12,367	$	12,701

Note 12. Supplemental Balance Sheet Data

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


	September 30, 2025						December 31, 2024
	LIFO		Non-LIFO		Total		LIFO		Non-LIFO		Total
Raw materials	$	123	$	215	$	338	$	122	$	201	$	323
Work in process	120		44		164		116		32		148
Finished goods	518		470		988		510		428		938
Supplies and other	—		257		257		—		243		243
	761		986		1,747		748		904		1,652
Excess of FIFO or weighted-average cost over LIFO cost	(206)		—		(206)		(200)		—		(200)
Total	$	555	$	986	$	1,541	$	548	$	904	$	1,452

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

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


	September 30, 2025		December 31, 2024
Land	$	132	$	110
Buildings	2,394		2,314
Machinery and equipment	12,877		12,498
Construction in progress	960		780
	16,363		15,702
Less accumulated depreciation	(9,833)		(9,418)
Total	$	6,530	$	6,284

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. As of September 30, 2025 and December 31, 2024, the outstanding amounts related to the suppliers participating in this program were $1.0 billion, of which $192 and $185, respectively, are reported as discontinued operations. Amounts are recorded within Trade accounts payable and Current liabilities of discontinued operations.

Note 13. Legal Matters

As described in our Annual Report on Form 10-K for the year ended December 31, 2024, we received certain requests from the United States Department of Justice (“DOJ”) concerning allegations of violations of the Food, Drug, and Cosmetic Act in connection with the manufacturing, marketing and sale of surgical gowns by our former health care business, Avanos Medical, Inc. (previously Halyard Health, Inc.). During the third quarter of 2025, we entered into a Deferred Prosecution Agreement (the “DPA”) with the DOJ that resolved the DOJ’s investigation. Pursuant to the DPA, the Company is responsible for making certain monetary payments that are not expected to materially affect our financial position, results of operations or cash flows.

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