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Discontinued Operations and Disposal Groups | 9 Months Ended
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Sep. 30, 2025
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | 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.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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