KIMBERLY CLARK CORP
For the period ended Mar 31, 2025. Filed Apr 22, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 22, 2025
KMB$108.43-1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-22.
0000055785-24-000094
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-22.
0000055785-25-000039
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 87 current paragraphs.
15 unchanged; 15 reworded; 56 added; 46 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 20 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (56)
Current report
•Overview of Business and Recent Developments
Current report
•Consolidated Results
Current report
•Segment Results
Current report
Overview of Business and Recent Developments
Current report
We are a global company focused on delivering products and solutions that provide better care for a better world, with manufacturing facilities in 30 countries, including our equity affiliates, and products sold in more than 175 countries and territories. Our products are sold under well-known brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend.
Current report
The United States has recently announced changes to U.S. trade policy, including increasing tariffs on imports, in some cases significantly, and potentially negotiating or terminating existing trade agreements. For example, on April 2, 2025, the United States announced a new universal baseline tariff of 10%, plus an additional country-specific tariff for select trading partners, on all U.S. imports. These actions, and retaliatory tariffs imposed by other countries on U.S. exports, have led to significant volatility and uncertainty in global markets. Based on preliminary analysis of the potential effects of the new tariffs that are currently in effect in the U.S. as well as in other markets in which we operate, we estimate incremental costs of approximately $300 in 2025, most of which will be incurred by the North America segment. We are continuing to evaluate these developments and our ability to offset a portion of these costs to mitigate the impact on our business, consolidated results of operations, and financial condition.
Current report
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 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. These segments are described in greater detail in Item 1, Note 7 to the unaudited interim condensed consolidated financial statements.
Current report
2024 Transformation Initiative
Current report
War in Ukraine
Current report
Consolidated Results
Current report
(a) Adjusted amounts are Non-GAAP financial measures. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to Non-GAAP measures.
Current report
Net Sales
Current report
(a) Total may not sum across due to rounding.
Current report
(b) Represents the change in net sales excluding the impacts of currency translation and divestitures and business exits. Organic Sales Growth is a non-GAAP financial measure. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to non-GAAP measures.
Current report
(c) Impact of the sale of the PPE business, the exit of the Company's private label diaper business in the United States, and other exited businesses and markets in conjunction with the 2024 Transformation Initiative.
Current report
Net sales of $4.8 billion for the three months ended March 31, 2025 declined 6.0% primarily due to unfavorable currency impacts, divestitures and business exits and lower organic sales. Organic sales decreased 1.6% driven by lower pricing as a result of ongoing strategic investments in price-pack architecture and enhancing value propositions across our portfolio, while volume and mix were flat compared to the prior year.
Current report
Gross and Operating Profits
Current report
Gross profit of $1.7 billion for the three months ended March 31, 2025 decreased 9.3%, while gross margin of 35.8% decreased 130 basis points. Gross margin in the current year included approximately 110 basis points for charges related to the 2024 Transformation Initiative, primarily for incremental depreciation expense and workforce reductions. Excluding these charges, adjusted gross margin decreased 20 basis points to 36.9% primarily due to higher manufacturing costs and unfavorable pricing net of cost inflation, partially offset by gross productivity savings from integrated margin management of approximately $110.
Current report
Operating profit of $769 for the three months ended March 31, 2025 decreased 9.8%. Results in 2025 and 2024 included charges of $75 and $45 related to the 2024 Transformation Initiative, respectively. Excluding these items, adjusted operating profit for the three months ended March 31, 2025 and 2024, was $844 and $898, respectively.
Current report
Drivers of the changes in adjusted operating profit were:
Current report
(a) Includes net impact of productivity initiatives, product and supply chain investments and other changes in cost of products sold.
Current report
(b) Includes impact of changes in product mix, marketing, research and general expenses and other (income) and expense, net.
Current report
(c) Adjusted Operating Profit is a non-GAAP financial measure. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to non-GAAP measures.
Current report
The decrease in adjusted operating profit resulted from lower net sales and adjusted gross profit discussed above partially offset by lower marketing, research and general expenses.
Current report
Net Income and Diluted EPS
Current report
Net income of $567 for the three months ended March 31, 2025 decreased 12.4% primarily due to the decrease in operating profit discussed above. Net interest expense of $57 was in line with the prior year. Our share of net income of equity companies was $44, a decrease of 27.9% primarily driven by Kimberly-Clark de Mexico, S.A.B. de C.V., due to unfavorable foreign currency effects, partially offset by pricing, lower general and administrative expenses and productivity savings. The effective tax rate was 23.8% in 2025 compared to 23.6% in 2024. The adjusted effective tax rate for the three months ended March 31, 2025 was 21.4% compared to 23.6% in 2024. The first quarter of 2025 benefited from the resolution of certain tax matters.
Current report
Diluted earnings per share of $1.70 for the three months ended March 31, 2025 decreased 11.0% reflective of the decrease in net income discussed above. Adjusted earnings per share of $1.93 decreased 4.0% primarily driven by lower adjusted operating profit, which more than offset the benefits from a lower adjusted effective rate and lower dilutive shares outstanding.
Current report
Segment Results
Current report
Drivers of the changes in segment net sales and operating profit were:
Current report
(a) Total may not sum across due to rounding.
Current report
(b) Represents the change in net sales excluding the impacts of currency translation and divestitures and business exits. Organic Sales Growth is a non-GAAP financial measure. See "Summary of Non-GAAP Financial Measures" below for reconciliations of our GAAP to non-GAAP measures.
Current report
(c) Impact of the sale of the PPE business, the exit of the Company's private label diaper business in the United States, and other exited businesses and markets in conjunction with the 2024 Transformation Initiative.
Current report
(d) Includes net impact of productivity initiatives, product and supply chain investments and other changes in cost of products sold.
Current report
(e) Includes impact of changes in product mix, marketing, research and general expenses and other (income) and expense, net.
Current report
North America
Current report
Net sales of $2.7 billion decreased 3.9%, primarily due to the sale of the PPE business and the exit of the private label diaper business in the US. Organic sales decreased 0.6% due to lower pricing, reflecting strategic investments to optimize our product offerings and value propositions across consumer and professional channels.
Current report
Operating profit of $676 increased 1.3% primarily due to lower marketing, research and general expenses and gross productivity savings, partially offset by the impacts of divestitures and business exits, unfavorable pricing net of cost inflation and lower volumes.
Current report
International Personal Care
Current report
Net sales of $1.4 billion decreased 8.9% primarily due to unfavorable currency impacts of 6.0% and lower organic sales. Organic sales decreased 2.8% mainly driven by lower pricing reflecting planned investments to improve our price-value tiers across the portfolio. Volume and mix were slightly down compared to the prior year as volume growth in China was offset by declines in Latin America.
Current report
Operating profit of $194 decreased 19.8% primarily due to unfavorable pricing net of cost inflation and currency impacts, partially offset by gross productivity savings.
Showing the first 40 of 56 passages. Open the source sections for the rest.
Removed paragraphs (46)
Previous report
•Overview of Third Quarter 2024 Results
Previous report
•Results of Operations and Related Information
Previous report
We describe our business outside North America in two groups – Developing and Emerging Markets ("D&E") and Developed Markets. D&E markets comprise Eastern Europe, the Middle East and Africa, Latin America and Asia-Pacific, excluding Australia and South Korea. Developed Markets consist of Western and Central Europe, Australia and South Korea. We have three reportable business segments: Personal Care, Consumer Tissue and K-C Professional. These business segments are described in greater detail in Note 9 to the unaudited interim consolidated financial statements.
Previous report
On July 1, 2024, we completed the sale transaction that was announced on April 7, 2024, of the personal protective equipment ("PPE") business included in our K-C Professional business segment for total consideration of $635, including the initial purchase price of $640 less working capital and other closing adjustments of $5. The transaction included Kimtech branded products, such as gloves, apparel and masks, and KleenGuard branded products, such as gloves, apparel, respirators and eyewear, which serve a variety of scientific and industrial industries globally. 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.
Previous report
In February 24, 2022, we completed our acquisition of a majority and controlling share of Thinx Inc. (“Thinx”), an industry leader in the reusable period and incontinence underwear category, for total consideration of $181. In the first quarter of 2023, we delivered a redemption notice to the third-party minority owner with respect to a portion of the remaining common securities of Thinx. The redemption closed in the second quarter of 2023, and we acquired additional ownership of Thinx for $48, increasing our ownership to 70%. As part of the completion of a negotiated final redemption, we acquired the remaining 30% ownership of Thinx for $47 in the fourth quarter of 2023. As the purchase of additional ownership in an already controlled subsidiary represents an equity transaction, no gain or loss was recognized in consolidated net income or comprehensive income.
Previous report
On June 1, 2023, we completed the sale transaction, announced on October 24, 2022, of our Neve tissue brand and related consumer and K-C Professional tissue assets in Brazil for $212. Upon closure of the transaction, a gain of $74 pre-tax was recognized in Other (income) and expense, net. We incurred divestiture-related costs of $30 pre-tax during the three months ended June 30, 2023, which were recorded in Cost of products sold and Marketing, research and general expenses, resulting in a net benefit of $44 pre-tax ($26 after-tax).
Previous report
This section presents a discussion and analysis of our net sales, operating profit and other information relevant to an understanding of the results of operations for thethree and nine months ended September 30, 2024. In addition, we provide commentary regarding organic sales growth, which describes the impact of changes in volume, product mix and net selling prices excluding prior year's impact of divestitures and business exits on net sales. Changes in foreign currency exchange rates and divestitures and business exits also impact the year-over-year change in net sales. Revenue growth management is used to describe our capability that helps optimize our consumer value proposition and thereby maximize our brands' revenue potential with consumer-centric insights. It focuses on strategic pricing decisions, price pack architecture, managing our product mix, trade promotion activity and trading terms. Our analysis compares thethree and nine months ended September 30, 2024 results to the same periods in 2023.
Previous report
•2024 Transformation Initiative - In 2024, we initiated this transformation initiative to improve our focus on growth and reduce our structural cost base by reorganizing into three new business segments, making the corporate and regional overhead cost structures more efficient and optimizing our global supply chain. Results in 2024 include charges related to this program. See Item 1, Note 2 to the unaudited interim condensed consolidated financial statements for details.
Previous report
•Sale of PPE business - In 2024, we recognized a gain related to the sale of our PPE business discussed above. See Item 1, Note 3 to the unaudited interim condensed consolidated financial statements for details.
Previous report
•Impairment of intangible assets - In the third quarter of 2024 and the second quarter of 2023, we recognized charges related to the impairment of certain intangible assets related to Softex and Thinx. See Item 1, Note 4 to the unaudited interim condensed consolidated financial statements for details.
Previous report
•Sale of Brazil tissue and K-C Professional business - In the second quarter of 2023, we recognized a net benefit related to the sale of our Brazil tissue and K-C Professional business. See Item 1, Note 3 to the unaudited interim condensed consolidated financial statements for details.
Previous report
•Pension settlements - In the second quarter of 2023, pension settlement charges were recognized related to lump-sum distributions from pension plan assets exceeding the total of annual service and interest costs resulting in a recognition of deferred actuarial losses.
Previous report
Overview of Third Quarter 2024 Results
Previous report
•Net sales of $5.0 billion decreased 4% compared to the prior year, while organic sales grew 1%.
Previous report
•Operating profit was $1.2 billion compared to $774 in the prior year. Net Income Attributable to Kimberly-Clark Corporation was $907 compared to $587 in the prior year, and diluted earnings per share were $2.69 compared to $1.73 in the prior year. Results in the current and prior year were impacted by the activities discussed in the non-GAAP section above.
Previous report
Results of Operations and Related Information
Previous report
This section presents a discussion and analysis of our net sales, operating profit and other information relevant to an understanding of the results of operations for the three and nine months ended September 30, 2024.
Previous report
Consolidated
Previous report
(a) Corporate & Other and Other (income) and expense, net include income and expense not associated with the ongoing operations of the business segments, including adjustments as indicated in the Non-GAAP Reconciliations.
Previous report
N.M. - Not Meaningful
Previous report
GAAP to Non-GAAP Reconciliations of Selected Financial Results
Previous report
(a) "As Adjusted Non-GAAP" may not equal "As Reported" plus "Adjustments" as a result of rounding.
Previous report
Analysis of Consolidated Results
Previous report
(e) Impact of the sale of the Brazil tissue and K-C Professional business, sale of the PPE business and other exited businesses and markets in conjunction with the 2024 Transformation Initiative.
Previous report
Consolidated net sales for the three months ended September 30, 2024 of $5.0 billion decreased 4% primarily due to unfavorable currency translation and the impacts from divestitures and business exits. Organic sales increased 1% due to higher net selling prices in hyperinflationary economies, mainly Argentina.
Previous report
In North America, net sales decreased 3% primarily due to the divestiture of our PPE business and lower organic sales driven by reduced volume. Outside North America, net sales decreased 4% in D&E markets as unfavorable currency impacts were partially offset by higher organic sales, while net sales decreased 4% in Developed Markets due to lower organic sales, unfavorable currency translation, and the impact of divestitures and business exits. Organic sales increased 8% in D&E markets due to higher net selling prices in hyperinflationary economies, while Developed Markets decreased 2% primarily due to temporary energy surcharge-related price increases in the prior year, partially offset by volume and mix gains.
Previous report
Operating profit for the three and nine months ended September 30, 2024 was $1.2 billion and $2.7 billion, respectively, compared to $774 and $1.7 billion for the prior year. Results in 2024 include charges related to the 2024 Transformation Initiative, the gain recognized for the sale of the PPE business, and charges related to the impairment of intangible assets, compared to 2023 results which include the net benefit related to the sale of the Brazil tissue and K-C Professional business and charges related to the impairment of intangible assets. Excluding these items, adjusted operating profit for the three and nine months ended September 30, 2024 was $810 and $2.6 billion, respectively, representing a 5% and 12% increase compared to the prior year. Results benefited from gross supply chain productivity savings of approximately $130 and $385, respectively, partially offset by supply chain related investments, input cost inflation, primarily in D&E markets, unfavorable currency effects and the impact of divestitures.
Previous report
Interest expense for the three and nine months ended September 30, 2024 was $67 and $206, respectively, compared to $74 and $223 for the prior year.
Previous report
The effective tax rate for the three and nine months ended September 30, 2024 was 20.5% and 20.2%, respectively, compared to 22.5% and 21.2% for the prior year. The adjusted effective tax rate for the three and nine months ended September 30, 2024 was 22.7% and 22.4%, respectively, compared to 22.5% and 22.6% for the prior year.
Previous report
Our share of net income of equity companies for the three and nine months ended September 30, 2024 was $48 and $172, respectively, compared to $50 and $143 for the prior year. The changes for the nine months ended were driven by Kimberly-Clark de Mexico, S.A.B. de C.V. results which benefited from volume, mix and pricing growth, productivity savings, and favorable foreign currency effects, partially offset by higher general and administrative expenses.
Previous report
Diluted earnings per share for the three and nine months ended September 30, 2024 were $2.69 and $6.21, respectively, compared to $1.73 and $3.70 for the prior year. Adjusted diluted earnings per share for the three and nine months ended September 30, 2024 were $1.83 and $5.80, respectively, representing a 5% and 15% increase compared to the prior year.
Previous report
Results by Business Segments
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Personal Care
Previous report
(a) Total may not equal the sum of volume, mix/other, net price and currency due to rounding and excludes intergeographic sales.
Previous report
Net sales for the three months ended September 30, 2024 of $2.6 billion decreased 2% as unfavorable currency impacts of 6% were partially offset by a 3% increase in organic sales. The increase in organic sales was driven by changes in net selling prices and product mix gains of 3% and 1%, respectively. The increase in net selling prices was driven by hyperinflationary economies, mainly Argentina. Net sales for the nine months ended September 30, 2024 of $8.0 billion decreased 1% as unfavorable currency impacts were largely offset by growth in organic sales. Organic sales growth benefited from higher net selling prices in hyperinflationary economies coupled with increased volume within North America and D&E markets.
Previous report
Operating profit for the three months ended September 30, 2024 of $482 decreased 4% compared to the prior year as pricing net of inflation and gross supply chain productivity savings were more than offset by unfavorable currency effects and higher advertising investments. Both pricing and the impacts of currency were primarily driven by hyperinflationary economies. Operating profit for the nine months ended September 30, 2024 of $1.6 billion increased 7% compared to the prior year. Results benefited primarily from favorable volume and mix, pricing net of inflation and gross supply chain productivity savings, partially offset by unfavorable currency effects and higher marketing, research and general expenses.
Previous report
Consumer Tissue
Previous report
(e) Impact of the sale of the Brazil tissue and K-C Professional business and other exited businesses and markets in conjunction with the 2024 Transformation Initiative.
Previous report
Net sales for the three months ended September 30, 2024 of $1.5 billion decreased 2% primarily due to a 1% decline in organic sales. Organic sales were negatively impacted by retailer inventory volume adjustments in North America and lower pricing in Developed Markets due to temporary energy surcharge-related price increases in the prior year. Net sales for the nine months ended September 30, 2024 of $4.6 billion decreased 3% due to impacts from divestitures and business exits, coupled with a decline in organic sales from lower pricing in Developed Markets.
Previous report
Operating profit for the three months ended September 30, 2024 of $265 decreased 1% compared to the prior year as productivity savings were offset by unfavorable pricing net of inflation and higher manufacturing costs. Operating profit for the nine months ended September 30, 2024 of $800 increased 13% compared to the prior year. Results benefited from productivity savings and more balanced pricing relative to input costs.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Reworded paragraphs (15)
Previous wording
This management's discussion and analysis ("MD&A") of financial condition and results of operations is intended to provide investors with an understanding of our recent performance, financial condition and prospects. Dollar amounts are reported in millions, except per share amounts, unless otherwise noted. The following will be discussed and analyzed:
Current wording
This Management's Discussion and Analysis ("MD&A") of Financial Condition and Results of Operations is intended to provide investors with an understanding of our recent performance, financial condition, cash flows and future prospects. The following MD&A should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024 and the unaudited interim condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q. Our analysis compares results for thethree months ended March 31, 2025 to the same period in 2024. Amounts are reported in millions of dollars, except per share amounts, unless otherwise noted. The following will be discussed and analyzed:
Previous wording
Throughout this MD&A, we refer to financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP, and are therefore referred to as non-GAAP financial measures. These measures include adjusted gross and operating profit, adjusted other (income) and expense, net, adjusted net income, adjusted earnings per share, and adjusted effective tax rate. We believe these measures provide our investors with additional information about our underlying results and trends, as well as insight into some of the financial measures used to evaluate management.
Current wording
Throughout this MD&A, we refer to financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP, and are therefore referred to as non-GAAP financial measures. We believe these measures provide our investors with additional information about our underlying results and trends, as well as insight to some of the financial measures used to evaluate management. For additional information and reconciliations to the most closely comparable financial measures presented in our condensed consolidated financial statements, which are calculated in accordance with U.S. GAAP, see "Summary of Non-GAAP Financial Measures" below.
Previous wording
On March 27, 2024, we announced the 2024 Transformation Initiative designed to sharpen our strategic focus through a new operating model that leverages three synergistic forces:
Current wording
The 2024 Transformation Initiative is designed to sharpen our strategic focus through a new operating model that leverages three synergistic forces:
Previous wording
•Wiring our organization for growth to drive agility, speed, and focused execution that extends our competitive advantages further into the future.
Current wording
•Wiring our organization for growth to drive agility, speed, and focused execution that extends our competitive advantages further into the future and improves the efficiency of our corporate and regional overhead cost structures.
Previous wording
The 2024 Transformation Initiative is intended to improve our focus on growth and reduce our structural cost base by reorganizing into three new business segments, making the corporate and regional overhead cost structures more efficient and optimizing our global supply chain. The transformation is expected to impact our organization in all major geographies, and workforce reductions are expected to be in the range of 4% to 5%. Certain actions under the transformation initiative are being finalized for implementation, and accounting for such actions will commence when the actions are authorized for execution. We expect to complete the transition to the new organizational structure by the end of 2024, and the transformation initiative is expected to be completed by the end of 2026. Total pre-tax savings are expected to be $3.0 billion in gross productivity; inclusive of input cost and manufacturing cost savings, and $200 in selling, general and administrative expenses. Total costs are anticipated to be approximately $1.5 billion pre-tax. Cash costs are expected to be approximately half of that amount, primarily related to workforce reductions. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets. For the three months ended September 30, 2024, total transformation initiative charges were $124 pre-tax ($106 after-tax). For the nine months ended September 30, 2024, total transformation initiative charges were $359 pre-tax ($257 after-tax).
Current wording
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. Total pre-tax savings are expected to be $3.0 billion in gross productivity; inclusive of input cost and manufacturing cost savings, and $200 in selling, general and administrative expenses. Total costs are anticipated to be approximately $1.5 billion pre-tax. Cash costs are expected to be approximately half of that amount, primarily related to workforce reductions. Expected non-cash charges are primarily related to incremental depreciation and asset write-offs, including losses associated with the expected exit of certain markets. For the three months ended March 31, 2025 and 2024, total 2024 Transformation Initiative charges were $77 pre-tax ($77 after-tax) and $45 pre-tax ($34 after-tax), respectively. Through March 31, 2025, cumulative pre-tax charges for the 2024 Transformation Initiative were $534 ($416 after-tax).
Previous wording
Consolidated net sales for the nine months ended September 30, 2024 of $15.1 billion decreased 2% compared to the prior year. Organic sales increased 4%, as changes in net selling prices, product mix, and volume increased sales by 2%, 1%, and 1%, respectively. The increase in net selling prices was driven by hyperinflationary economies, mainly Argentina. Changes in foreign currency exchange rates decreased sales by approximately 4%, while divestitures and business exits decreased sales by 1%. In North America, net sales were flat as higher organic sales were offset by the divestiture of our PPE business. Changes in net and organic sales for D&E Markets and Developed Markets were relatively consistent with those discussed for the quarter-to-date period above.
Current wording
Drivers of the changes in net sales were:
Previous wording
Cash provided by operations was $2.4 billion during the nine months ended September 30, 2024 compared to $2.3 billion in the prior year. The increase was driven by the higher operating profit, excluding the effect of non-cash charges, and favorable changes in operating working capital, partially offset by cash payments related to our 2024 Transformation Initiative.
Current wording
Cash provided by operations was $327 during the three months ended March 31, 2025 compared to $438 in the prior year. The decrease was driven by lower operating profit and unfavorable changes in operating working capital, including higher cash payments related to our 2024 Transformation Initiative.
Previous wording
Cash used for financing was $2.5 billion during the nine months ended September 30, 2024 compared to $1.6 billion in the prior year. This increase was primarily due to increased share repurchases coupled with debt repayments during the current year. During the nine months ended September 30, 2024, we repurchased 5.4 million shares of our common stock pursuant to our publicly announced share repurchase programs at a total cost of $752 through a broker in the open market.
Current wording
Cash used for financing was $683 during the three months ended March 31, 2025 compared to $485 in the prior year. This increase was primarily due to debt repayments during the current year. During the three months ended March 31, 2025, we repurchased 458 thousand shares of our common stock pursuant to our publicly announced share repurchase programs at a total cost of $61 through a broker in the open market.
Previous wording
Our short-term debt, which consists of U.S. commercial paper with original maturities up to 90 days and/or other similar short-term debt issued by non-U.S. subsidiaries, was $4 as of September 30, 2024 (included in Debt payable within one year on the condensed consolidated balance sheet). The average month-end balance of short-term debt for the nine months ended September 30, 2024 was $5. These short-term borrowings provide supplemental funding to support our operations. The level of short-term debt generally fluctuates depending upon the amount of operating cash flows and the timing of customer receipts and payments for items such as dividends and income taxes.
Current wording
Our short-term debt, which consists of U.S. commercial paper with original maturities up to 90 days and/or other short-term debt issued by non-U.S. subsidiaries, was $51 as of March 31, 2025 (included in Debt payable within one year on the condensed consolidated balance sheets). The average month-end balance of short-term debt for the three months ended March 31, 2025 was $41. These short-term borrowings provide supplemental funding to support our operations. The level of short-term debt generally fluctuates depending upon the amount of operating cash flows and the timing of customer receipts and payments for items such as dividends and income taxes.
Previous wording
As of September 30, 2024 and December 31, 2023, total debt was $7.5 billion and $8.0 billion, respectively.
Current wording
As of March 31, 2025 and December 31, 2024, total debt was $7.2 billion and $7.4 billion, respectively.
Previous wording
We believe that our ability to generate cash from operations and our capacity to issue short-term and long-term debt are adequate to fund working capital, payments for our 2024 Transformation Initiative, capital spending, pension contributions, dividends and other needs for the foreseeable future. Further, we do not expect restrictions or taxes on repatriation of cash held outside of the U.S. to have a material effect on our overall business, liquidity, financial condition or results of operations for the foreseeable future.
Current wording
We believe that our ability to generate cash from operations and our capacity to issue short-term and long-term debt are adequate to fund working capital, obligations related to our 2024 Transformation Initiative, capital spending, pension contributions, share repurchases, dividends and other needs for the foreseeable future. Further, we do not expect restrictions or taxes on repatriation of cash held outside of the U.S. to have a material effect on our overall business, liquidity, financial condition or results of operations for the foreseeable future.
Previous wording
The assumptions used as a basis for the forward-looking statements include many estimates that, among other things, depend on the achievement of future cost savings and projected volume increases. In addition, many factors outside our control, including the risk that we are not able to realize the anticipated benefits of the 2024 Transformation Initiative (including risks related to disruptions to our business or operations or related to any delays in implementation), war in Ukraine (including the related responses of consumers, customers, and suppliers and sanctions issued by the U.S., the European Union, Russia or other countries), pandemics, epidemics, fluctuations in foreign currency exchange rates, the prices and availability of our raw materials, supply chain disruptions, disruptions in the capital and credit markets, counterparty defaults (including customers, suppliers and financial institutions with which we do business), failure to realize the expected benefits or synergies from our acquisition and disposition activity, impairment of goodwill and intangible assets and our projections of operating results and other factors that may affect our impairment testing, changes in customer preferences, severe weather conditions, regional instabilities and hostilities (including the war in Israel), government trade or similar regulatory actions, potential competitive pressures on selling prices for our products, energy costs, general economic and political conditions globally and in the markets in which we do business, as well as our ability to maintain key customer relationships, could affect the realization of these estimates.
Current wording
The assumptions used as a basis for the forward-looking statements include many estimates that, among other things, depend on the achievement of future cost savings and projected volume increases. In addition, many factors outside our control, including the risk that we are not able to realize the anticipated benefits of the 2024 Transformation Initiative (including risks related to disruptions to our business or operations or related to any delays in implementation), war in Ukraine (including the related responses of consumers, customers, and suppliers and sanctions issued by the U.S., the European Union, Russia or other countries), government trade or similar regulatory actions (including current and potential trade and tariff actions affecting the countries where we operate and the resulting negative impacts on our supply chain, commodity costs, and consumer spending), pandemics, epidemics, fluctuations in foreign currency exchange rates, the prices and availability of our raw materials, supply chain disruptions, disruptions in the capital and credit markets, counterparty defaults (including customers, suppliers and financial institutions with which we do business), failure to realize the expected benefits or synergies from our acquisition and disposition activity, impairment of goodwill and intangible assets and our projections of operating results and other factors that may affect our impairment testing, changes in customer preferences, severe weather conditions, regional instabilities and hostilities (including the war in Israel), potential competitive pressures on selling prices for our products, energy costs, general economic and political conditions globally and in the markets in which we do business, as well as our ability to maintain key customer relationships, could affect the realization of these estimates.
Previous wording
The income tax effect of these non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. The impact of these non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income Before Income Taxes and Equity Interests and Provision for income taxes.
Current wording
The income tax effect of these non-GAAP items on the Company's Adjusted Earnings per Share is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. The impact of these non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income Before Income Taxes and Equity Interests and Provision for income taxes.
Previous wording
Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measures, and they should be read only in conjunction with our unaudited interim consolidated financial statements prepared in accordance with GAAP. There are limitations to these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies due to potential differences in methods of calculation and items being excluded. We compensate for these limitations by using these non-GAAP financial measures as a supplement to the GAAP measures and by providing reconciliations of the non-GAAP and comparable GAAP financial measures.
Current wording
These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measures, and they should be read only in conjunction with our unaudited interim condensed consolidated financial statements prepared in accordance with GAAP. There are limitations to these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies due to potential differences in methods of calculation and items being excluded. We compensate for these limitations by using these non-GAAP financial measures as a supplement to the GAAP measures and by providing reconciliations of the non-GAAP and comparable GAAP financial measures.
Previous wording
These non-GAAP financial measures exclude the following items for the relevant time periods as indicated in the reconciliations included later in this MD&A:
Current wording
The non-GAAP financial measures exclude the following items for the relevant time periods:
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(a) The non-GAAP adjustments included above are presented net of tax. The income tax effect of these non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment. Refer to the Adjusted Effective Tax Rate reconciliation below for the tax effect of these adjustments on the Company's reported Provision for income taxes.