2024 Transformation Initiative

6 Months Ended

Jun. 30, 2024

Restructuring and Related Activities [Abstract]

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 reorganizing into three new business segments, making the corporate and regional overhead cost structures more efficient and optimizing our global supply chain. The transformation is expected to impact our organization in all major geographies, and workforce reductions are expected to be in the range of 4 percent to 5 percent. Certain actions under the transformation initiative are being finalized for implementation, and accounting for such actions will commence when the actions are authorized for execution.

We expect to complete the transition to the new organizational structure by the end of 2024, and the transformation initiative is expected to be completed by the end of 2026, 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.

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


	Three Months Ended June 30, 2024		Six Months Ended June 30, 2024
Cost of products sold:
Charges for workforce reductions	$	34	$	34

Asset write-offs	5		5
Incremental depreciation	3		3
Other exit costs	3		3
Total	45		45
Marketing, research and general expenses:
Charges for workforce reductions	46		69
Other exit costs	24		46
Total	70		115
Other (income) and expense, net(a)	75		75

Total charges	190		235
Provision for income taxes	(73)		(84)


Net charges attributable to Kimberly-Clark Corporation	$	117	$	151

(a)Other (Income) and expense, net includes losses recognized for the exit of certain markets as part of the transformation initiatives.

See Note 9 for charges by segment.

The following summarizes the transformation initiative liabilities activity:


	2024
Transformation initiative liabilities at January 1	$	—
Charges for workforce reductions and other cash exit costs	149
Cash payments	(35)

Transformation initiative liabilities at June 30	$	114

Transformation initiative liabilities of $105 are recorded in Accrued expenses and other current liabilities and $9 are recorded in Other Liabilities as of June 30, 2024. The charges related to the transformation initiatives are reflected within Operating Activities of our consolidated statements of cash flows.