UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2014~~March 31, 2015

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 1-225

KIMBERLY-CLARK CORPORATION

(Exact name of registrant as specified in its charter)



Delaware		39-0394230
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)

P. O. Box 619100

Dallas, Texas

75261-9100

(Address of principal executive offices)

(Zip code)

(972) 281-1200

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of ~~October~~April 14, ~~2014~~2015, there were ~~372,455,181~~364,099,179 shares of the Corporation's common stock outstanding.

Table of Contents



PART I – FINANCIAL INFORMATION	3

Item 1. Financial Statements	3

UNAUDITED CONSOLIDATED INCOME STATEMENT FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2015 AND 2014 ~~AND 2013~~	3
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2015 AND 2014 ~~AND 201~~3	4
CONSOLIDATED BALANCE SHEET AS OF ~~SEPTEMBER 30, 2014~~MARCH 31, 2015 (UNAUDITED) AND DECEMBER 31, ~~201~~20143	5
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30,~~MARCH 31, 2015 AND 2014 ~~AND 2013~~	6
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	1715

Item 4. Controls and Procedures	2420

PART II – OTHER INFORMATION	2521

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2521

Item 6. Exhibits	2622

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT

(Unaudited)


	Three Months Ended September 30						Nine Months Ended September 30						Three Months Ended March 31
(Millions of dollars, except per share amounts)	2014			2013			2014			2013			2015			2014
Net Sales	$	5,442		$	5,262		$	16,063		$	15,847		$	4,691		$	4,887
Cost of products sold	3,541			3,457			10,528			10,420			3,032			3,222
Gross Profit	1,901			1,805			5,535			5,427			1,659			1,665
Marketing, research and general expenses	1,011			990			3,014			3,029			849			896
Other (income) and expense, net	(17		)	8			27			12			62			58
Operating Profit	907			807			2,494			2,386			748			711
Interest income	5			6			13			16			4			3
Interest expense	(71		)	(73		)	(214		)	(211		)	(72		)	(71		)
Income Before Income Taxes and Equity Interests	841			740			2,293			2,191
Income From Continuing Operations Before Income Taxes and Equity Interests													680			643
Provision for income taxes	(290		)	(224		)	(749		)	(685		)	(230		)	(196		)
Income Before Equity Interests	551			516			1,544			1,506
Income From Continuing Operations Before Equity Interests													450			447
Share of net income of equity companies	31			49			114			157			36			43
Income From Continuing Operations													486			490
Income from discontinued operations, net of income taxes													—			56
Net Income	582			565			1,658			1,663			486			546
Net income attributable to noncontrolling interests	(20		)	(19		)	(49		)	(60		)
Net income attributable to noncontrolling interests in continuing operations													(18		)	(8		)
Net Income Attributable to Kimberly-Clark Corporation	$	562		$	546		$	1,609		$	1,603		$	468		$	538

Per Share Basis
Net Income Attributable to Kimberly-Clark Corporation
Basic	$	1.51		$	1.43		$	4.28		$	4.16
Continuing operations													$	1.28		$	1.27
Discontinued operations													—			0.15
Net income													$	1.28		$	1.42

Diluted	$	1.50		$	1.42		$	4.25		$	4.13
Continuing operations													$	1.27		$	1.26
Discontinued operations													—			0.15
Net income													$	1.27		$	1.41

Cash Dividends Declared	$	0.84		$	0.81		$	2.52		$	2.43		$	0.88		$	0.84

See Notes to Consolidated Financial Statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended September 30						Nine Months Ended September 30						Three Months Ended March 31
(Millions of dollars)	2014			2013			2014			2013			2015			2014
Net Income	$	582		$	565		$	1,658		$	1,663		$	486		$	546
Other Comprehensive Income (Loss), Net of Tax
Unrealized currency translation adjustments	(529		)	204			(366		)	(387		)	(468		)	(7		)
Employee postretirement benefits	46			(5		)	72			84			8			14
Other	30			(19		)	19			9			20			(4		)
Total Other Comprehensive Income (Loss), Net of Tax	(453		)	180			(275		)	(294		)	(440		)	3
Comprehensive Income	129			745			1,383			1,369			46			549
Comprehensive income attributable to noncontrolling interests	(8		)	(32		)	(45		)	(59		)	(15		)	(3		)
Comprehensive Income Attributable to Kimberly-Clark Corporation	$	121		$	713		$	1,338		$	1,310		$	31		$	546

See Notes to Consolidated Financial Statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(~~2014~~2015 Data is Unaudited)


(Millions of dollars)	September 30, 2014		December 31, 2013		March 31, 2015		December 31, 2014

ASSETS
Current Assets
Cash and cash equivalents	$	1,431	$	1,054	$	587	$	789
Accounts receivable, net	2,542		2,545		2,244		2,223
Inventories	2,281		2,233		1,893		1,892
Other current assets	667		718		659		655
Total Current Assets	6,921		6,550		5,383		5,559
Property, Plant and Equipment, Net	7,692		7,948		7,160		7,359
Investments in Equity Companies	335		382		290		257
Goodwill	3,129		3,181		1,538		1,628
Other Intangible Assets	215		243
Other Assets	584		615		682		723
TOTAL ASSETS	$	18,876	$	18,919	$	15,053	$	15,526

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Debt payable within one year	$	773	$	375	$	1,612	$	1,326
Redeemable preferred securities of subsidiary	506		506
Trade accounts payable	2,597		2,598		2,502		2,616
Accrued expenses	2,071		2,060		1,751		1,974
Dividends payable	313		309		321		310
Total Current Liabilities	6,260		5,848		6,186		6,226
Long-Term Debt	5,633		5,386		6,119		5,630
Noncurrent Employee Benefits	1,090		1,312		1,286		1,693
Deferred Income Taxes	902		817		663		587
Other Liabilities	371		344		315		319
Redeemable Preferred and Common Securities of Subsidiaries	72		72
Redeemable Preferred Securities of Subsidiaries					72		72
Stockholders' Equity
Kimberly-Clark Corporation	4,265		4,856		193		729
Noncontrolling Interests	283		284		219		270
Total Stockholders' Equity	4,548		5,140		412		999
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,876	$	18,919	$	15,053	$	15,526

See Notes to Consolidated Financial Statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED CASH FLOW STATEMENT

(Unaudited)


	Nine Months Ended September 30						Three Months Ended March 31
(Millions of dollars)	2014			2013			2015			2014
Operating Activities
Net income	$	1,658		$	1,663		$	486		$	546
Depreciation and amortization	655			641			194			218
Asset impairments	42			42
Stock-based compensation	51			73			15			9
Deferred income taxes	57			128			171			51
Net (gains) losses on asset dispositions	(11		)	—
Equity companies' earnings in excess of dividends paid	(27		)	(75		)
Equity companies' earnings (in excess of) less than dividends paid							(35		)	(43		)
(Increase) decrease in operating working capital	(63		)	(259		)	(446		)	(210		)
Postretirement benefits	(119		)	(135		)	(414		)	(156		)
Charge for Venezuelan balance sheet remeasurement							45			—
Other	12			17			4			22
Cash Provided by Operations	2,255			2,095			20			437
Investing Activities
Capital spending	(730		)	(697		)	(284		)	(258		)
Acquisitions of businesses	—			(32		)
Proceeds from dispositions of property	36			113
Proceeds from sales of investments	96			16
Investments in time deposits	(123		)	(46		)	(46		)	(38		)
Maturities of time deposits	191			66			73			157
Other	5			(10		)	(24		)	5
Cash Used for Investing	(525		)	(590		)	(281		)	(134		)
Financing Activities
Cash dividends paid	(942		)	(913		)	(310		)	(309		)
Change in short-term borrowings	153			22
Change in short-term debt							291			654
Debt proceeds	621			889			497			1
Debt repayments	(109		)	(542		)	(4		)	(101		)
Cash paid on redeemable preferred securities of subsidiaries	(22		)	(21		)
Proceeds from exercise of stock options	98			164			41			37
Acquisitions of common stock for the treasury	(1,122		)	(959		)	(248		)	(441		)
Shares purchased from noncontrolling interest							(151		)	—
Other	—			7			(12		)	(21		)
Cash Used for Financing	(1,323		)	(1,353		)
Cash Provided by (Used for) Financing							104			(180		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(30		)	(79		)	(45		)	(12		)
Increase (Decrease) in Cash and Cash Equivalents	377			73			(202		)	111
Cash and Cash Equivalents - Beginning of Year	1,054			1,106			789			1,054
Cash and Cash Equivalents - End of Period	$	1,431		$	1,179		$	587		$	1,165

See Notes to Consolidated Financial Statements.

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Accounting Policies

Basis of Presentation

The accompanying unaudited 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 with the 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 presentation of the results for the periods presented have been reflected. Dollar amounts are reported in millions, except per share dollar amounts, unless otherwise noted.

We completed the spin-off of our health care business on October 31, 2014. As a result, the health care business is presented as discontinued operations on the Consolidated Income Statement for all periods presented, and prior period Consolidated Income Statements and related disclosures have been recast accordingly. Segment results present net sales and operating profit by segment on a continuing operations basis. Other comprehensive income and cash flows of the health care business are included within our Consolidated Statement of Comprehensive Income and Consolidated Cash Flow Statement, respectively, for the three months ended March 31, 2014.

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, ~~2013.~~2014. The terms "Corporation," "Kimberly-Clark," "K-C," "we," "our" and "us" refer to Kimberly-Clark Corporation and its consolidated subsidiaries.

~~Annual Goodwill Impairment Test~~

Goodwill is tested for impairment annually and whenever events and circumstances indicate that impairment may have occurred. For 2014, we have completed the required annual testing of goodwill for impairment for all reporting units using the beginning of the third quarter as the measurement date and have determined that goodwill is not impaired. The fair value for all reporting units was in excess of the book value.

Highly Inflationary Accounting for Venezuelan Operations

We account for our operations in Venezuela using highly inflationary accounting. OnSince February ~~13,~~ 2013, ~~the Venezuelan government announced a devaluation of~~ the Central Bank of ~~Venezuela ("Central Bank")~~Venezuela's regulated currency exchange system rate tohas been 6.3 bolivars per U.S. ~~dollar and the elimination of the SITME rate. As a result of the devaluation, we recorded a~~ ~~$26~~ after-tax charge ($36 pre-tax) related to the remeasurement of the local currency-denominated balance sheet to the new exchange rate in the quarter ended March 31, 2013. Prior to this devaluation, we used the Central Bank SITME rate of ~~5.4~~ bolivars per U.S. dollar to measure K-C Venezuela's bolivar-denominated transactions into U.S. dollars. The $36 pre-tax charge is reflected in the Consolidated Income Statement in other (income) and expense, net for the nine months ended September 30, 2013. In the Consolidated Cash Flow Statement, this non-cash charge is included in other in cash provided by operations.

dollar. During March 2013, the Venezuelan government announced a complementary currency exchange system, SICAD. Participation in SICAD is controlled by the Venezuelan government. SICAD is intended to function as an auction system, allowing entities in specific sectors to bid for U.S. dollars to be used for specified import transactions. In February 2014, the president of Venezuela announced that another floating rate exchange system (referred to as SICAD 2)II) would be initiated. ~~Initial exchanges under~~On February 10, 2015, the Venezuelan government announced the addition of a new foreign currency exchange system referred to as the Marginal Currency System, or SIMADI, along with the elimination of the SICAD ~~2 began on March 24, 2014.~~II system.

We ~~measure~~have historically measured results in Venezuela at the rate in which we transact our business. We have qualified for access to the official exchange rate because we manufacture and sell price-controlled products. Since March 2013, exchange transactions have taken place through letters of credit which resulted in an effective exchange rate of 6.3 bolivars per U.S. dollar and through approved transactions using the regulated currency exchange system, which were also at a 6.3 exchange rate. To date, we have not ~~gained access~~been invited to ~~U.S. dollars~~participate in ~~Venezuela through either~~ SICAD, and we did not seek exchange at SICAD II or ~~SICAD 2 auctions. Whether~~SIMADI because we ~~will be able~~qualify for the more favorable official 6.3 rate and have chosen to ~~access either SICAD system in the foreseeable future and what volume of currency~~pursue exchange ~~will transact through these alternative mechanisms is unclear. Accordingly, we continued to measure K-C Venezuela operations~~ at ~~the rate of~~ ~~6.3~~ ~~bolivars per U.S. dollar through~~ ~~September 30, 2014.~~that rate.

~~Through September 30, 2014 we continued~~We continue to manufacture and sell products in Venezuela as well as import raw materials and finished goods under approved ~~letters~~foreign exchange transactions. We continued to measure results at the 6.3 rate through December 31, 2014, however, given the level of ~~credit. However,~~uncertainty and lack of liquidity in Venezuela, in part due to recent ~~government approvals to import raw materials under letters~~declines in the price of ~~credit are not at a level sufficient to sustain all of our manufacturing capabilities in country. Unless~~oil, we ~~are able to obtain further approvals to import raw materials through approved letters of credit or through the official government exchange system, we may be forced to curtail some or all of~~remeasured our local ~~manufacturing until such approvals~~currency-denominated balance sheet as of December 31, 2014 at the year-end floating SICAD II exchange rate of 50 bolivars per U.S. dollar as we believed this was the most accessible rate available in the absence of exchange at 6.3 bolivars per U.S. dollar. This remeasurement resulted in a non-deductible charge of $462 in the Consolidated Income Statement for the year ended December 31, 2014.

With the elimination of SICAD II in February 2015, we remeasured our local currency-denominated balance sheet during the first quarter of 2015 at the applicable floating SIMADI exchange rate (193 bolivars per U.S. dollar at March 31, 2015) as we believe this is the most accessible rate available to ~~import additional raw materials are forthcoming. We continue to seek approval~~us in the absence of exchange at 6.3 bolivars per U.S. dollar. This remeasurement resulted in a non-deductible charge of $45 in the Consolidated Income Statement for ~~additional imports, as well as monitor~~ the ~~financial policies~~three months ended March 31, 2015, with $5 recorded in cost of products sold and ~~practices of the Venezuelan government to assess the impact on~~$40 recorded in other (income) and expense, net. At March 31, 2015, our ~~US GAAP accounting and reporting for our operations~~net investment in ~~that country.~~

~~At September 30, 2014~~, K-C Venezuela ~~had a~~was $107, and the bolivar-denominated net monetary asset position (primarily cash) of ~~$435, and our net investment in K-C Venezuela~~ was ~~$572, both valued at~~ ~~6.3~~ ~~bolivars per U.S. dollar.~~not significant. Net sales of K-C Venezuela represented less than 0.5 percent and 3 percent of consolidated net sales in ~~2014~~for the three months ended March 31, 2015 and ~~approximately 2 percent in~~ ~~2013~~.2014, respectively.

New Accounting Standards

In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The standard is effective for public entities for annual and interim periods beginning after December 15, 2016. ~~Early~~The FASB has proposed delaying this standard by one year. If the proposal is approved, early adoption ~~is not permitted.~~would be permitted as of the original effective date. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The effects of this standard on our financial position, results of operations and cash flows are not yet known.

Note 2. ~~Spin-Off of Health Care Business and Related Costs~~

In November 2013, we announced that our Board of Directors authorized management to pursue a potential tax-free spin-off of our health care business. The spin-off will create a stand-alone, publicly traded health care company with approximately $1.7 billion in annual net sales, focused on the sale of surgical and infection prevention products for the operating room and other medical supplies, and medical devices focused on pain management, respiratory and digestive health.

A Form 10 registration statement was filed in May 2014 with the Securities and Exchange Commission (the "SEC") to register our health care business as an independent stand-alone public company named Halyard Health, Inc. (“Halyard”). In September 2014, our Board of Directors authorized its executive committee (“Executive Committee”) to approve the final terms and conditions of the distribution. On October 6, 2014, the Executive Committee approved the distribution of all of the issued and outstanding shares of Halyard common stock on the basis of one share of Halyard common stock for every eight shares of Kimberly-Clark common stock held as of the close of business on October 23, 2014, the record date for the distribution. The Form 10 registration statement, as amended, was deemed effective by the SEC on October 17, 2014. We expect that the spin-off will be completed at the end of the day on October 31, 2014, subject to market, regulatory and other conditions.

Halyard will fund a cash distribution to us equal to the estimated amount of all of Halyard's available cash on the distribution date in excess of the minimum amount to be retained by Halyard. Such minimum amount will be equal to $40 plus the estimated net amount of certain intercompany assets and liabilities on the distribution date that are to be retained by us plus approximately $1 associated with certain retention bonus obligations to be transferred to Halyard. The amount of funds resulting from the intercompany settlements will be determined on or about the date of the distribution, although the exact amount will depend on the amount of the cash distribution and the intercompany transactions. We expect to use the proceeds of this cash distribution to make open-market repurchases of our shares of common stock.

After the spin-off, the divested health care business will be presented as discontinued operations, which will exclude overhead costs previously allocated to health care that will remain part of Kimberly-Clark after the spin-off, on our Consolidated Income Statement for all periods presented. The health care business' balance sheet, other comprehensive income and cash flows will be included within our Consolidated Balance Sheet, Consolidated Statement of Stockholders' Equity, Consolidated Statement of Comprehensive Income and Consolidated Cash Flow Statement through October 31, 2014.

In June 2014, we decided to exit one of our health care glove manufacturing facilities in Thailand and outsource the related production in order to improve our ongoing cost and competitive position. The plan is expected to result in charges of approximately $70 (~~$50~~ ~~after tax). Charges recognized in cost of products sold during the three and nine months ended September 30, 2014 were $5 and~~ ~~$54, consisting primarily of an asset impairment charge of~~ ~~$42. In addition, during the~~ ~~three~~ ~~and~~ ~~nine~~ months ended September 30, 2014, $30 and $56 were recorded, respectively, in marketing, research and general expenses, and $5 was recorded in cost of products sold, for transaction and related costs associated with the potential spin-off of our health care business. Total charges during the ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ ~~for these matters were~~ ~~$40~~ ~~and $115 ($41 and $94 after tax), respectively.~~

~~Note 3.~~ 2014 Organization Restructuring

In October 2014, we initiated a restructuring plan in order to improve organization efficiency and offset the impact of stranded overhead costs resulting from the spin-off of our health care business. The restructuring is intended to improve our underlying profitability and increase our flexibility to invest in targeted growth initiatives, brand building and other capabilities critical to delivering future growth.

The ~~restructuring~~plan is expected to be completed by the end of 2016, with total costs, primarily severance, anticipated to be $130 to $160 after tax ($190 to $230 pre-tax). Cash costs are projected to be approximately 80 percent of the total charges. Workforce reductions are expected to be in the range of 1,100 to 1,300 and primarily impact salaried employees. We expect that $85 to $105 of the after-tax charges ($125 to $150 pre-tax) will occur in the fourth quarter of 2014. The restructuring is expected to impact all of our business segments and our organizations in all major geographies.

Charges in the first quarter of 2015 were recorded in the following income statement line items:

~~Note 4. European Strategic Changes~~



	Three Months Ended March 31, 2015
Cost of products sold	$	8
Marketing, research and general expenses	5
Provision for income taxes	(8		)
Net charges	$	5

In 2012, we initiated strategic changes related to our Western and Central European consumer and professional businesses to focus our resources and investments on stronger market positions and growth opportunities. We have exited the diaper category in that region, with the exceptionApproximately two-thirds of the ~~Italian market,~~pre-tax charges were recorded outside North America and ~~divested or exited some lower-margin businesses, mostly~~one-third was recorded in ~~consumer tissue, in certain markets. The changes primarily affect our consumer businesses, with a modest impact on K~~-~~C Professional ("KCP"). The restructuring actions commenced in 2012 and are expected to be completed by December~~North America. Through March 31, ~~2014.~~

~~Restructuring actions related to the strategic changes involved the sale or closure of~~ ~~five~~ ~~of our European manufacturing facilities and the streamlining of our administrative organization.~~

Total charges related to the European strategic changes during the three months ended September 30, 2014 and 2013 were $1 and $14 ($3 and $10 after tax), respectively. Total charges related to these actions during the nine months ended September 30, 2014 and 2013 were $13 and $67 ($12 and $52 after tax), respectively.

~~Through~~ ~~September 30, 2014~~,2015, cumulative pre-tax charges for the ~~strategic changes~~restructuring were ~~$393~~$146 ($~~320~~100 after tax), including cumulative pre-tax cash charges of ~~$215.~~

~~The following summarizes~~$116. Cash payments during the ~~cash charges recorded and reconciles these charges~~first quarter of 2015 related to ~~accrued expenses:~~

2014 2013
Accrued expenses - January 1 $ 37
$ 133
Charges for workforce reductions and other exit costs 12
53
Cash payments (32 ) (132 )
Currency and other (2 ) (9 )
Accrued expenses - September 30 $ 15
$ 45
the restructuring were $31.

Note 5.3. Fair Value Information

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

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

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

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

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

During the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 and for the full year ~~2013~~2014, there were no significant transfers among level 1, 2, or 3 fair value determinations.

~~Set forth below are the~~Company-owned life insurance ("COLI") assets and derivative assets and liabilities ~~that~~ are measured on a recurring basis at fair ~~value~~value. COLI assets were $59 and ~~the inputs used to develop those fair value measurements.~~

September 30,
2014 Fair Value Measurements
Level 1 Level 2 Level 3
Assets
Company-owned life insurance (“COLI”) $ 57
$ —
$ 57
$ —
Available-for-sale securities 24
24
—
—
Derivatives 44
—
44
—
Total $ 125
$ 24
$ 101
$ —
Liabilities
Derivatives $ 105
$ —
$ 105
$ —

December 31,
2013 Fair Value Measurements
Level 1 Level 2 Level 3
Assets
COLI $ 55
$ —
$ 55
$ —
Available-for-sale securities 22
22
—
—
Derivatives 62
—
62
—
Total $ 139
$ 22
$ 117
$ —
Liabilities
Derivatives $ 49
$ —
$ 49
$ —

$58 at March 31, 2015 and December 31, 2014, respectively. The COLI policies are a source of funding primarily for our nonqualified employee benefits and are included in other assets. ~~Available-for-sale securities are included in other assets. See Note 9 for information on the classification of derivatives in the Consolidated Balance Sheet.~~

~~Level 1 Fair Values - The fair values of certain available-for-sale securities are based on quoted market prices in active markets for identical assets.~~

~~Level 2 Fair Values -~~ The fair value of the COLI policies is considered a level 2 measurement and is derived from investments in a mix of money market, fixed income and equity funds managed by unrelated fund managers. At March 31, 2015 and December 31, 2014, derivative assets were $89 and $54, respectively, and derivative liabilities were $132 and $116, respectively. The fair values of derivatives used to manage interest rate risk and commodity price risk are based on LIBOR rates and interest rate swap curves and NYMEX price quotations, respectively. The fair value of hedging instruments used to manage foreign currency risk is 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. Additional information on our classification and use of derivative instruments is contained in Note 9.7.

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		Fair Value Hierarchy Level	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
		September 30, 2014				December 31, 2013					March 31, 2015				December 31, 2014
Assets
Cash and cash equivalents^(a)	1	$	1,431	$	1,431	$	1,054	$	1,054	1	$	587	$	587	$	789	$	789
Time deposits^(b)	1	154		154		222		222		1	102		102		130		130
Liabilities and redeemable securities of subsidiaries
Short-term debt^(c)	2	213		213		63		63		2	1,064		1,064		777		777
Long-term debt^(d)	2	6,193		6,856		5,698		6,271		2	6,667		7,489		6,179		6,963
Redeemable preferred securities of subsidiaries^(e)	3	532		535		532		552
Redeemable common securities of subsidiary^(f)	3	46		46		46		46
Redeemable securities of subsidiaries^(e)										3	72		72		72		72


(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 Consolidated Balance Sheet, as appropriate. Time deposits are recorded at cost, which approximates fair value.


(c)	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.


(d)	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.

(e)

~~Redeemable preferred~~The redeemable securities of subsidiaries are not traded in active markets. ~~Accordingly, their~~For certain instruments, fair values were calculated using a floating rate pricing model that compared the stated spread to the fair value spread to determine the price at which each of the financial instruments should trade. The model used the following inputs to calculate fair values: face value, current LIBOR rate, unobservable fair value credit spread, stated spread, maturity date and interest or dividend payment dates.


~~(f)~~	~~The~~ Additionally, the fair value of the remaining redeemable ~~common~~ securities ~~of subsidiary~~ was based on various inputs, including an independent third-party appraisal, adjusted for current market conditions.

Note 6.4. Employee Postretirement Benefits

The table below presents net periodic benefit cost information for defined benefit plans and other postretirement benefit plans:

Pension Benefits Other Benefits
Three Months Ended September 30
2014 2013 2014 2013
Service cost $ 12
$ 13
$ 3
$ 4
Interest cost 70
63
9
9
Expected return on plan assets (83 ) (82 ) —
—
Recognized net actuarial loss 25
28
—
2
Curtailment —
(1 ) —
—
Other 1
2
—
—
Net periodic benefit cost $ 25
$ 23
$ 12
$ 15


	Pension Benefits						Other Benefits				Pension Benefits						Other Benefits
	Nine Months Ended September 30										Three Months Ended March 31
	2014			2013			2014		2013		2015			2014			2015		2014
Service cost	$	36		$	40		$	9	$	12	$	10		$	11		$	4	$	4
Interest cost	209			191			27		25		64			68			8		9
Expected return on plan assets	(249		)	(246		)	—		—		(75		)	(82		)	—		—
Recognized net actuarial loss	75			91			—		2		29			24			—		—
Curtailment	—			(30		)	—		—
Settlements											9			—			—		—
Other	6			(1		)	—		—		(5		)	5			—		—
Net periodic benefit cost	$	77		$	45		$	36	$	39	$	32		$	26		$	12	$	13

For the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, we made cash contributions of ~~$180~~$435 and ~~$175~~,$180, respectively, to our pension trusts. WeEffective January 2015, the U.S. pension plan was amended to include a lump-sum pension benefit payout option for certain plan participants. In addition, in February 2015, we entered into agreements to purchase group annuity contracts that will transfer to two insurance companies the pension benefit obligations for approximately 21,000 Kimberly-Clark retirees in the United States. Assuming all closing conditions are satisfied, we expect these transactions will be completed in the second quarter of 2015. In connection with these transactions, during the first quarter of 2015 we made a $410 contribution to our U.S. pension plan in order to maintain the plan’s funded status. As a result of these changes, we expect to recognize total pension settlement charges of $0.8 billion after tax ($1.3 billion pre-tax) in 2015, mostly in the second quarter. In total we expect to contribute ~~approximately $200~~$450 to $500 to our defined benefit pension plans for the full year ~~2014.~~2015.

Note 7.5. Earnings Per Share ("EPS")

There are no adjustments required to be made to net income for purposes of computing EPS. A reconciliation of the average number of common shares outstanding used in the basic and diluted EPS computations follows:


	Three Months Ended September 30		Nine Months Ended September 30		Three Months Ended March 31
(Millions of shares)	2014	2013	2014	2013	2015	2014
Basic	373.3	382.8	376.0	384.9	365.2	379.0
Dilutive effect of stock options	1.1	1.4	1.2	1.6	1.0	1.3
Dilutive effect of restricted share and restricted share unit awards	1.5	1.6	1.6	1.5	1.7	1.8
Diluted	375.9	385.8	378.8	388.0	367.9	382.1

There were no significant outstanding stock-based awards excluded from the computation of diluted EPS during the three ~~and nine~~ month periods ended ~~September 30, 2014~~March 31, 2015 and ~~2013.~~2014.

The number of common shares outstanding as of ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014 was ~~372.5~~364.3 million and ~~382.1~~377.2 million,, respectively.

Note 8.6. Stockholders' Equity

Set forth below is a reconciliation for the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 of the carrying amount of total stockholders' equity from the beginning of the period to the end of the period.


	Stockholders' Equity Attributable to						Stockholders' Equity Attributable to
	The Corporation			Noncontrolling Interests			The Corporation			Noncontrolling Interests
Balance at December 31, 2013	$	4,856		$	284
Balance at December 31, 2014							$	729		$	270
Net Income	1,609			25			468			16
Other comprehensive income, net of tax
Unrealized translation	(362		)	(3		)	(465		)	(3		)
Employee postretirement benefits	72			—			8			—
Other	19			—			20			—
Stock-based awards exercised or vested	99			—			41			—
Recognition of stock-based compensation	51			—			15			—
Income tax benefits on stock-based compensation	30			—			13			—
Shares repurchased	(1,162		)	—			(210		)	—
Dividends declared	(946		)	(26		)	(321		)	(19		)
Other	(1		)	3			(105		)	(45		)
Balance at September 30, 2014	$	4,265		$	283
Balance at March 31, 2015							$	193		$	219

During the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015, we repurchased ~~10.3~~1.8 million shares at a total cost of ~~$1.1 billion~~.$200.

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 is recorded in AOCI rather than net income. Upon sale or substantially complete liquidation of any of these subsidiaries, the applicable unrealized translation would be removed from AOCI and reported as part of the gain or loss on the sale or liquidation.

Also included in unrealized translation 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 change in net unrealized currency translation for the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 was primarily due to the strengthening of the U.S. dollar ~~against~~versus most foreign currencies, including the Brazilian real, Euro, ~~Russian ruble~~British pound sterling and Australian ~~dollar, as well as most other currencies.~~dollar.

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 and Other
Balance as of December 31, 2012	$	(26	)	$	(1,928	)		$	(53	)		$	(52	)
Other comprehensive income (loss) before reclassifications	(386		)	57				1				17
(Income) loss reclassified from AOCI	—			28			(a)	(2		)	(a)	(8		)
Net current period other comprehensive income (loss)	(386		)	85				(1		)		9
Balance as of September 30, 2013	$	(412	)	$	(1,843	)		$	(54	)		$	(43	)
															Unrealized Translation			Defined Benefit Pension Plans				Other Postretirement Benefit Plans			Cash Flow Hedges and Other
Balance as of December 31, 2013	$	(525	)	$	(1,668	)		$	(15	)		$	(34	)	$	(525	)	$	(1,668	)		$	(15	)	$	(34	)
Other comprehensive income (loss) before reclassifications	(362		)	(2		)		24				17			(2		)	(2		)		—			(4		)
(Income) loss reclassified from AOCI	—			49			(a)	1			(a)	2			—			16			(a)	—			—
Net current period other comprehensive income (loss)	(362		)	47				25				19			(2		)	14				—			(4		)
Balance as of September 30, 2014	$	(887	)	$	(1,621	)		$	10			$	(15	)
Balance as of March 31, 2014															$	(527	)	$	(1,654	)		$	(15	)	$	(38	)

Balance as of December 31, 2014															$	(1,335	)	$	(1,924	)		$	(37	)	$	(16	)
Other comprehensive income (loss) before reclassifications															(465		)	(8		)		2			37
(Income) loss reclassified from AOCI															—			14			(a)	—			(17		)
Net current period other comprehensive income (loss)															(465		)	6				2			20
Other															(12		)	—				—			—
Balance as of March 31, 2015															$	(1,812	)	$	(1,918	)		$	(35	)	$	4


(a)	Included in computation of net periodic pension and postretirement benefits costs (see Note 6)4).

During the first quarter of 2015, we acquired the remaining 49.9 percent interest in our subsidiary in Israel, Hogla-Kimberly, Ltd., for $151. As our subsidiary in Turkey was wholly-owned by our subsidiary in Israel, through this acquisition we also effectively acquired the remaining 49.9 percent interest in our subsidiary in Turkey, Kimberly-Clark Tuketim Mallari Sanayi ve Ticaret A.s. The acquisition was recorded as an equity transaction that reduced noncontrolling interests, AOCI and additional paid-in capital by $45, $12 and $94, respectively.

The purchase of additional ownership in an already controlled subsidiary is treated as an equity transaction with no gain or loss recognized in consolidated net income or comprehensive income. The effect of the change in ownership interest is as follows:



	Three Months Ended March 31, 2015
Net Income attributable to Kimberly-Clark Corporation	$	468
Decrease in Kimberly-Clark Corporation's additional paid-in capital for acquisition	(94		)
Change from net income attributable to Kimberly-Clark Corporation and transfers to noncontrolling interest	$	374

Note 9.7. 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. We enter into derivative instruments 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 and qualify as cash flow hedges. The foreign currency exposure on certain non-functional currency denominated monetary assets and liabilities, primarily intercompany loans and accounts payable, is hedged with primarily undesignated derivative instruments.

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 and qualify as fair value hedges. From time to time, we also hedge the anticipated issuance of fixed-rate debt, using forward-starting swaps, and these contracts are designated as cash flow hedges.

We use derivative instruments, such as forward swap contracts, to hedge a limited portion of our exposure to market risk arising from changes in prices of certain commodities. These derivatives are designated as cash flow hedges of specific quantities of the underlying commodity expected to be purchased in future months.

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

borrowing. Translation exposure, which results from changes in translation rates between functional currencies and the U.S. dollar, generally is not hedged. However, consistent with other years, a portion of our net investment in our Mexican affiliate has been hedged. At ~~September 30, 2014~~March 31, 2015, we had in place net investment hedges of ~~$74~~$138 for a portion of our investment in our Mexican affiliate.

Set forth below is a summary of the total designated and undesignated fair values of our derivative instruments:


	Assets				Liabilities				Assets				Liabilities
	September 30, 2014		December 31, 2013		September 30, 2014		December 31, 2013		March 31, 2015		December 31, 2014		March 31, 2015		December 31, 2014
Foreign currency exchange contracts	$	38	$	34	$	104	$	49	$	87	$	54	$	104	$	102
Interest rate contracts	4		22		1		—		2		—		11		4
Commodity price contracts	2		6		—		—		—		—		17		10
Total	$	44	$	62	$	105	$	49	$	89	$	54	$	132	$	116

The derivative assets are included in the Consolidated Balance Sheet in other current assets and other assets, as appropriate. The derivative liabilities are included in the Consolidated Balance Sheet in accrued expenses and other liabilities, as appropriate.

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 current earnings. The offset to the change in fair values of the related hedged items also is recorded in current earnings. 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. At ~~September 30, 2014~~March 31, 2015, the aggregate notional values of outstanding interest rate contracts designated as fair value hedges were ~~$250~~.$250. Fair value hedges resulted in no significant ineffectiveness in the ~~nine~~three months ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~. For the three ~~and nine~~ month periods ended ~~September 30,~~March 31, 2015 and 2014, ~~and 2013,~~ gains or losses recognized in interest expense for interest rate swaps were not significant. For the ~~nine~~three month periods ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, no gain or loss was recognized in earnings as a result of a hedged firm commitment no longer qualifying as a fair value hedge.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of 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 period that the hedged exposure affects earnings. As of ~~September 30, 2014~~March 31, 2015, outstanding commodity forward contracts were in place to hedge a limited portion of our estimated requirements of the related underlying commodities in the remainder of ~~2014~~2015 and future periods. As of ~~September 30, 2014~~March 31, 2015, the aggregate notional values of outstanding foreign exchange and interest rate derivative contracts designated as cash flow hedges were ~~$900~~$800 and ~~$200~~,$200, respectively. Cash flow hedges resulted in no significant ineffectiveness for the ~~nine~~three months ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~. For the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 and ~~2013~~2014, no gains or losses were reclassified into earnings as a result of the discontinuance of cash flow hedges due to the original forecasted transaction no longer being probable of occurring. At ~~September 30, 2014~~March 31, 2015, ~~amounts~~$30 of after-tax gains are expected to be reclassified from AOCI, primarily to cost of products sold, during the next twelve months, ~~are not expected to be material.~~consistent with the timing of the recognition of the underlying hedged transactions. The maximum maturity of cash flow hedges in place at ~~September 30, 2014~~March 31, 2015 is ~~July~~December 2017.

Gains or losses on undesignated foreign exchange hedging instruments are immediately recognized in other (income) and expense, net. Losses of ~~$130~~$155 and gains of ~~$77~~$13 were recorded in the three month periods ended ~~September 30, 2014~~March 31, 2015 and ~~2013, respectively. Losses of $77 and $65 were recorded in the nine month periods ended~~ ~~September 30,~~ 2014 ~~and~~ ~~2013~~, 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. At ~~September 30, 2014~~March 31, 2015, the notional amount of these undesignated derivative instruments was ~~$2.4 billion~~.$2.4 billion.

Note ~~10. Description of~~8. Business ~~Segments~~Segment Information

We are organized into operating segments based on product groupings. These operating segments have been aggregated into ~~four~~three reportable global business segments: Personal Care, Consumer Tissue ~~KCP~~ and ~~Health Care.~~K-C Professional. The reportable segments were determined in accordance with how our executive managers develop and execute 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. Segment management is evaluated on several factors, including operating profit. Segment operating profit excludes other (income) and expense, net and income and expense not associated with the business segments. ~~Costs associated with the spin-off of the health care business and related matters are included in Corporate & Other.~~

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

Personal Care brands offer parents a trusted partner in caring for their families and deliver confidence, protection and discretion to adults through a wide variety of innovative solutions and products such as disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, and other related products. Products in this segment are sold under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Kotex, U by Kotex, Intimus, Depend, Plenitud, Poise and other brand names.

Consumer Tissue offers a wide variety of innovative solutions and trusted brands that touch and improve people's lives every day. Products in this segment include facial and bathroom tissue, paper towels, napkins and related products, and are sold under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Neve and other brand names.

K-C Professional helps transform workplaces for employees and patrons, making them healthier, safer and more productive, through a range of solutions and supporting products such as apparel, wipers, soaps, sanitizers, tissue and towels. Key brands in this segment include Kleenex, Scott, WypAll, Kimtech and Jackson Safety.

~~Health Care~~ provides essentials that help restore patients to better health and improve the quality of patients' lives. This segment offers surgical and infection prevention products for the operating room, and a portfolio of innovative medical devices focused on pain management, respiratory and digestive health. This business is a global leader in education to prevent healthcare-associated infections. Products are sold primarily under the Kimberly-Clark and ON-Q brand names.

The following schedules present information concerning consolidated operations by business segment:


	Three Months Ended September 30								Nine Months Ended September 30								Three Months Ended March 31
	2014			2013			Change		2014			2013			Change		2015			2014			Change
NET SALES
Personal Care	$	2,475		$	2,383		+3.9	%	$	7,299		$	7,170		+1.8	%	$	2,308		$	2,382		-3.1	%
Consumer Tissue	1,697			1,626			+4.4	%	5,024			4,969			+1.1	%	1,574			1,689			-6.8	%
K-C Professional	873			843			+3.6	%	2,531			2,477			+2.2	%	795			800			-0.6	%
Health Care	392			403			-2.7	%	1,186			1,201			-1.2	%
Corporate & Other	5			7			N.M.		23			30			N.M.		14			16			N.M.
TOTAL NET SALES	$	5,442		$	5,262		+3.4	%	$	16,063		$	15,847		+1.4	%	$	4,691		$	4,887		-4.0	%

OPERATING PROFIT
Personal Care	$	483		$	427		+13.1	%	$	1,393		$	1,300		+7.2	%	$	455		$	457		-0.4	%
Consumer Tissue	285			233			+22.3	%	782			713			+9.7	%	291			257			+13.2	%
K-C Professional	165			155			+6.5	%	455			459			-0.9	%	134			135			-0.7	%
Health Care	52			70			-25.7	%	187			168			+11.3	%
Corporate & Other^(a)	(95		)	(70		)	N.M.		(296		)	(242		)	N.M.
Corporate & Other																	(70		)	(80		)	N.M.
Other (income) and expense, net	(17		)	8			N.M.		27			12			+125.0	%	62			58			+6.9	%
TOTAL OPERATING PROFIT	$	907		$	807		+12.4	%	$	2,494		$	2,386		+4.5	%	$	748		$	711		+5.2	%

N.M. - Not Meaningful


~~(a)~~	~~Corporate & Other includes charges related to the health care spin-off and European strategic changes. See Notes 2 and 4.~~

Note ~~11.~~9. Supplemental Balance Sheet Data

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


	September 30, 2014								December 31, 2013								March 31, 2015								December 31, 2014
	LIFO			Non-LIFO		Total			LIFO			Non-LIFO		Total			LIFO			Non-LIFO		Total			LIFO			Non-LIFO		Total
At the lower of cost, determined on the FIFO or weighted-average cost methods, or market
Raw materials	$	146		$	334	$	480		$	143		$	319	$	462		$	103		$	319	$	422		$	104		$	322	$	426
Work in process	176			110		286			189			97		286
Work-in-process																	127			90		217			120			95		215
Finished goods	692			737		1,429			648			753		1,401			531			652		1,183			511			672		1,183
Supplies and other	—			327		327			—			326		326			—			282		282			—			288		288
	1,014			1,508		2,522			980			1,495		2,475			761			1,343		2,104			735			1,377		2,112
Excess of FIFO or weighted-average cost over LIFO cost	(241		)	—		(241		)	(242		)	—		(242		)	(211		)	—		(211		)	(220		)	—		(220		)
Total	$	773		$	1,508	$	2,281		$	738		$	1,495	$	2,233		$	550		$	1,343	$	1,893		$	515		$	1,377	$	1,892

We use the LIFO method of valuing inventory for financial reporting purposes for most U.S. inventories. Interim LIFO calculations are based on management's estimates of expected year-end inventory levels and costs. An actual valuation of inventory under the LIFO method is made at the end of each year based on the inventory levels and costs at that time.

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


	September 30, 2014			December 31, 2013			March 31, 2015			December 31, 2014
Land	$	186		$	196		$	175		$	177
Buildings	2,706			2,776			2,554			2,574
Machinery and equipment	14,124			14,193			13,274			13,437
Construction in progress	540			515			510			591
	17,556			17,680			16,513			16,779
Less accumulated depreciation	(9,864		)	(9,732		)	(9,353		)	(9,420		)
Total	$	7,692		$	7,948		$	7,160		$	7,359

1614


Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations

Introduction

This management's discussion and analysis of financial condition and results of operations is intended to provide investors with an understanding of our recent performance, financial condition and prospects. The following will be discussed and analyzed:

Overview of ~~Third~~First Quarter ~~2014~~2015 Results

~~Status of the Health Care Business Spin-off~~

Results of Operations and Related Information

Liquidity and Capital Resources

Legal Matters

Business Outlook

Overview of ~~Third~~First Quarter ~~2014~~2015 Results

Net sales ~~increased more than 3~~decreased 4 percent compared to the year-ago period, ~~due to increases~~impacted by changes in foreign currency exchange rates that reduced net sales 9 percent. Sales volumes increased 3 percent and net selling ~~prices.~~prices were higher by 1 percent, including increases of 7 percent and 4 percent, respectively, in developing and emerging markets.

~~Charges associated with the spin-off of the health care business and related matters were $41 after tax. See Note 2 to the Consolidated Financial Statements for additional information.~~

Operating profit ~~and net income attributable to Kimberly-Clark Corporation~~ increased ~~12 percent~~ ~~and~~ ~~3 percent, respectively.~~

5 percent.

Diluted earnings per share were ~~$1.50~~$1.27 versus ~~$1.42~~diluted earnings per share from continuing operations of $1.26 in the prior year.

~~Status of the Health Care Business Spin-off~~

Results of Operations and Related Information

This section presents a discussion and analysis of our ~~third~~first quarter ~~2014~~2015 net sales, operating profit and other information relevant to an understanding of the results of operations.

Results By Business Segment


	Three Months Ended September 30								Nine Months Ended September 30								Three Months Ended March 31
	2014			2013			Change		2014			2013			Change		2015			2014			Change
NET SALES
Personal Care	$	2,475		$	2,383		+3.9	%	$	7,299		$	7,170		+1.8	%	$	2,308		$	2,382		-3.1	%
Consumer Tissue	1,697			1,626			+4.4	%	5,024			4,969			+1.1	%	1,574			1,689			-6.8	%
K-C Professional	873			843			+3.6	%	2,531			2,477			+2.2	%	795			800			-0.6	%
Health Care	392			403			-2.7	%	1,186			1,201			-1.2	%
Corporate & Other	5			7			N.M.		23			30			N.M.		14			16			N.M.
TOTAL NET SALES	$	5,442		$	5,262		+3.4	%	$	16,063		$	15,847		+1.4	%	$	4,691		$	4,887		-4.0	%

OPERATING PROFIT
Personal Care	$	483		$	427		+13.1	%	$	1,393		$	1,300		+7.2	%	$	455		$	457		-0.4	%
Consumer Tissue	285			233			+22.3	%	782			713			+9.7	%	291			257			+13.2	%
K-C Professional	165			155			+6.5	%	455			459			-0.9	%	134			135			-0.7	%
Health Care	52			70			-25.7	%	187			168			+11.3	%
Corporate & Other^(a)	(95		)	(70		)	N.M.		(296		)	(242		)	N.M.
Other (income) and expense, net^(b)	(17		)	8			N.M.		27			12			+125.0	%
Corporate & Other																	(70		)	(80		)	N.M.
Other (income) and expense, net																	62			58			+6.9	%
TOTAL OPERATING PROFIT	$	907		$	807		+12.4	%	$	2,494		$	2,386		+4.5	%	$	748		$	711		+5.2	%

N.M. - Not Meaningful

Results By Geography


	Three Months Ended September 30								Nine Months Ended September 30								Three Months Ended March 31
	2014			2013			Change		2014			2013			Change		2015			2014
NET SALES
North America	$	2,717		$	2,727		-0.4	%	$	8,105		$	8,104		—		$	2,360		$	2,339
Europe	713			693			+2.9	%	2,171			2,250			-3.5	%
Asia, Latin America and other	2,230			2,054			+8.6	%	6,438			6,146			+4.8	%
Outside North America																	2,418			2,633
Intergeographic sales	(218		)	(212		)	N.M.		(651		)	(653		)	N.M.		(87		)	(85		)
TOTAL NET SALES	$	5,442		$	5,262		+3.4	%	$	16,063		$	15,847		+1.4	%	$	4,691		$	4,887

OPERATING PROFIT
North America	$	592		$	530		+11.7	%	$	1,656		$	1,618		+2.3	%	$	528		$	490
Europe	62			63			-1.6	%	211			185			+14.1	%
Asia, Latin America and other	331			292			+13.4	%	950			837			+13.5	%
Corporate & Other^(a)	(95		)	(70		)	N.M.		(296		)	(242		)	N.M.
Other (income) and expense, net^(b)	(17		)	8			N.M.		27			12			+125.0	%
Outside North America																	352			359
Corporate & Other																	(70		)	(80		)
Other (income) and expense, net																	62			58
TOTAL OPERATING PROFIT	$	907		$	807		+12.4	%	$	2,494		$	2,386		+4.5	%	$	748		$	711

Percentage Change 2015 Versus 2014



NET SALES		Changes Due To
	Total	Volume	Net Price	Mix/Other^(a)	Currency
Consolidated	(4.0)	3	1	1	(9)
Personal Care	(3.1)	4	2	1	(10)
Consumer Tissue	(6.8)	2	(1)	—	(8)
K-C Professional	(0.6)	3	—	3	(7)

(a)

~~Corporate & Other includes charges related to the European strategic changes of $1 and~~ ~~$11~~ ~~for the~~ ~~three~~ ~~months ended~~ ~~September 30, 2014~~ ~~and 2013, respectively, and $13 and $64 for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ ~~and 2013, respectively. In addition, Corporate & Other includes $40 and $115 for charges related to the spin-off of our health care business for the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014, respectively.~~


~~(b)~~	For the nine months ended September 30, 2014, other (income) and expense, net includes a $39 charge related to a regulatory dispute in the Middle East and for the nine months ended September 30, 2013, includes a $36 charge related to the devaluation of the Venezuelan bolivar.

~~Percentage Change~~ ~~2014~~ ~~Versus~~ ~~2013~~

NET SALES Changes Due To
Third Quarter Total Organic Volume
Restructuring Impact^(a)
Net Price
Mix/Other^(b)
Currency
Consolidated 3.4 2 — 2 (1) —
Personal Care 3.9 2 — 3 — (1)
Consumer Tissue 4.4 3 — 1 (1) 1
K-C Professional 3.6 3 — — — 1
Health Care (2.7) — — (3) — —

Year-to-Date
Consolidated 1.4 3 (1) 2 (1) (2)
Personal Care 1.8 4 (1) 2 — (3)
Consumer Tissue 1.1 1 (2) 2 — —
K-C Professional 2.2 2 — 1 — (1)
Health Care (1.2) 1 — (2) — —


~~(a)~~	~~Lower sales related to the European strategic changes and the 2011 and 2012 pulp and tissue restructuring actions.~~


~~(b)~~	Mix/Other includes rounding.


OPERATING PROFIT		Changes Due To							Changes Due To
Third Quarter	Total	Volume	Net Price	Input Costs^(a)	Cost Savings	Currency Translation	Other^(b)
								Total	Volume	Net Price	Input Costs^(a)	Cost Savings	Currency Translation	Other^(b)
Consolidated	12.4	5	11	(7)	12	—	(9)	5.2	8	4	2	13	(11)	(11)
Personal Care	13.1	4	18	(8)	10	—	(11)	(0.4)	7	9	—	11	(9)	(18)
Consumer Tissue	22.3	8	9	(3)	18	2	(12)	13.2	6	(5)	2	14	(8)	4
K-C Professional	6.5	5	1	(10)	6	—	4	(0.7)	7	—	3	2	(12)	(1)
Health Care	(25.7)	(3)	(15)	(4)	6	—	(10)

Year-to-Date
Consolidated	4.5	5	11	(8)	10	(2)	(11)
Personal Care	7.2	7	13	(8)	11	(2)	(14)
Consumer Tissue	9.7	2	13	(5)	10	—	(10)
K-C Professional	(0.9)	4	4	(8)	5	(3)	(3)
Health Care	11.3	2	(12)	1	7	(1)	14


(a)	Includes inflation/deflation in raw materials, energy and distribution costs.

(b)

Other includes the impact of changes in marketing, research and general expenses and manufacturing costs not separately listed in the table. In addition, consolidated includes the impact of the charges in 2014 and 2013 related to the European strategic changes and in 2014 related to the spin-off of the health care business. Consolidated year-to-date alsoOther includes the impact of charges ~~related to a regulatory dispute~~recorded in ~~the Middle East in the first quarter of 2014~~Corporate & Other and ~~the devaluation of the Venezuelan bolivar in the first quarter of 2013.~~other (income) and expense, net.

Commentary - ~~Third~~First Quarter of ~~2014~~2015 Compared to ~~Third~~First Quarter of ~~2013~~2014

Consolidated

Net sales of ~~$5.4~~$4.7 billion in the ~~third~~first quarter of ~~2014~~2015 were ~~up more than 3~~down 4 percent compared to the year-ago period. ~~Organic sales volumes and net selling prices each increased 2 percent. Lower sales in conjunction with European strategic changes and changes~~Changes in foreign currency exchange rates ~~each~~ reduced net sales ~~slightly.~~9 percent as a result of the weakening of most currencies relative to the U.S. dollar. Sales volumes increased 3 percent and net selling prices and product mix/other were each favorable by 1 percent.

~~Operating~~First quarter operating profit was ~~$907~~$748 in ~~the third quarter~~2015 and $711 in 2014. Results in 2015 include a $45 charge for a balance sheet remeasurement in Venezuela, $13 of 2014 ~~versus $807 in 2013.~~Organization Restructuring costs and $9 of charges for pension settlements. Results in 2014 include ~~$40 of transaction~~a $39 charge related to a regulatory dispute in the Middle East and ~~related charges for the spin-off of the health care business. Results in 2013 include $14~~$10 of restructuring costs for European strategic ~~changes, versus $1 in 2014.~~changes.

The year-over-year operating profit comparison benefited from ~~organic~~ sales volume growth, higher net selling prices and ~~$100~~improved product mix, $90 in cost savings from the company's FORCE (Focused On Reducing Costs Everywhere) ~~program. Total marketing, research~~program and ~~general expenses were down slightly versus prior-year levels, despite a~~ $10 ~~increase in advertising spending.~~of

savings from the 2014 Organization Restructuring. Input costs ~~increased $55~~decreased $10 overall, ~~with $35 of increased~~as slightly lower costs for energy and raw materials other than fiber ~~$10 of~~were mostly offset by slightly higher fiber ~~costs and $10 of increased distribution~~ costs. ~~Foreign~~Translation effects due to changes in foreign currency ~~translation effects had minimal overall impact on~~exchange rates lowered operating profit ~~while currency~~by $75 and transaction effects also negatively impacted ~~the operating profit comparison, primarily~~comparisons. The currency impacts were most significant in Latin America and Eastern ~~Europe and Latin America.~~ Europe.

Other (income) and expense, net was ~~income~~expense of ~~$17~~$62 in 2015 and $58 in 2014. Results in 2015 include $40 for the balance sheet remeasurement charge in Venezuela, and in 2014 include a $39 charge related to a regulatory dispute in the ~~third quarter of 2014, including a gain on the sale of certain non-core assets, compared to $8 of expense~~Middle East. Results in ~~the year-ago period.~~both periods include foreign currency transaction losses.

The ~~third~~first quarter effective tax rate was ~~34.5~~33.8 percent in ~~2014 compared to 30.3~~2015 and 30.5 percent in ~~2013.~~2014. The increase was primarily due to the change in ~~the effective tax rate was driven by various tax matters, most notably costs~~currency rates used to measure results for our operations in ~~preparation for the spin-off of the health care business.~~

Kimberly-Clark's share of net income of equity companies in the third quarter was $31 in 2014 and $49 in 2013. At Kimberly-Clark de Mexico, S.A.B., results were negatively impacted by lower net sales and input cost increases, partially offset by cost savings.Venezuela.

Personal Care Segment

~~Third~~First quarter net sales of ~~$2.5~~$2.3 billion ~~increased 4 percent. Net selling prices rose~~decreased 3 ~~percent and organic sales volumes increased 2~~ percent. Currency rates were unfavorable by 110 percent, while volumes increased 4 percent and ~~lower sales as a result of European strategic changes reduced~~ net ~~sales slightly. Third~~selling prices improved 2 percent. First quarter operating profit of ~~$483 increased 13 percent.~~$455 was essentially even with the year-ago period. The comparison benefited from ~~organic~~ sales volume growth, higher net selling prices and cost savings, ~~partially~~ offset by ~~input cost inflation and~~ unfavorable effects from changes in currency ~~rates.~~rates and higher marketing, research and general expenses.

Net sales in North America decreased 12 percent. ~~Volumes~~Net selling prices and currency were ~~down more than~~each unfavorable by 1 percent, while ~~net selling prices~~volumes were ~~up about 1 percent.~~even with the prior year. Adult care volumes increased ~~double-digits,~~high-single digits, with growth on both the Poise and Depend brands. Huggies baby wipes volumes rose high-single digits, including benefits from innovation and ~~promotion shipments, and Huggies baby wipes volumes rose mid-single digits.~~market share gains. Child care volumes were ~~similar~~off mid-single digits due to ~~year-ago levels, as benefits from the launch of new GoodNites youth pants were offset by~~ lower Pull-Ups training pants volumes. Huggies diaper volumes ~~were off low-double~~fell mid-single digits ~~compared to mid-single digit growth in the year-ago period~~ and were impacted by lower market ~~share declines~~shares and competitive ~~promotional~~promotion activity.

Net sales in ~~K-C International increased 9~~developing and emerging markets decreased 4 percent, ~~despite~~including a 320 point negative impact from changes in currency rates. Volumes increased 10 percent and net selling prices ~~each~~ improved 6 ~~percent. The volume increase was driven by gains in Brazil, China, Russia/Eastern Europe, South Africa, South Korea and Vietnam. The higher net selling prices were~~percent, driven by increases in Latin America and Eastern Europe in response to weaker currency ~~rates~~rates. The volume growth included gains in Brazil, China, Colombia, Eastern Europe and ~~cost inflation.~~South Africa.

Net sales in ~~Europe~~developed markets outside North America (Australia, South Korea and Western/Central Europe) decreased 5 percent. Currency rates were unfavorable by 8 percent. Volumes improved 3 percent ~~including a 6 point negative impact from lower~~and product mix was up 2 percent, while net selling prices were off 2 percent. The volume growth was primarily due to increases in South Korea.

Consumer Tissue Segment

First quarter net sales ~~in conjunction with European strategic changes. Organic sales volumes~~of $1.6 billion decreased 7 percent. Currency rates were unfavorable by 8 percent and net selling prices were ~~each~~ down ~~2 percent, while currency rates were favorable by 5 percent.~~

~~Consumer Tissue Segment~~

~~Third quarter net sales of $1.7 billion increased 4 percent. Organic sales volumes increased 3 percent and net selling prices rose~~ 1 percent, while ~~product mix was off 1~~volumes were up 2 percent. ~~Currency rates were favorable by 1 percent. Third~~First quarter operating profit of ~~$285~~$291 increased 2213 percent. The comparison benefited from ~~organic sales volume growth, higher net selling prices~~cost savings, lower manufacturing-related costs and ~~cost savings,~~reduced marketing, research and general expenses, partially offset by ~~input cost inflation.~~unfavorable currencies.

Net sales in North America ~~were up 3~~increased 2 percent. Volumes increased approximately 7 percent, while changes in product mix reduced net sales 2 percent and net selling prices were off 1 percent. The volume growth included benefits from market share gains, promotion activity and the launch of Viva Vantage paper towels earlier this year.

Net sales in K-C International increased 6 percent, including a 1 point benefit from changes in currency rates. Net selling prices increased 7 percent, while volumes and product mix were each off 1 percent. The higher net selling prices were driven by increases in Latin America in response to unfavorable currency rates and cost inflation.

~~Net sales in Europe increased 5 percent. Currency rates were favorable by~~ 5 percent, ~~while lower sales in conjunction with European strategic changes reduced net sales 1 percent. Organic sales volumes rose 2 percent, driven by increases on bathroom tissue,~~ while net selling prices were off 2 percent and product mix was unfavorable by 1 percent. Volumes were up mid-single digits in bathroom tissue, including benefits from increased promotion shipments on Cottonelle, and up high-single digits in paper towels.

Net sales in developing and emerging markets decreased 19 percent, including a 21 point negative impact from currency rates. Volumes, net selling prices and product mix were each up approximately 1 percent.

20Net sales in developed markets outside North America decreased 12 percent, including a 9 point negative impact from currency rates. Volumes decreased 3 percent, while product mix improved 1 percent. The volume decline was mostly due to results in Western/Central Europe.

K-C Professional ("KCP") Segment

~~Third~~First quarter net sales of ~~$0.9~~$0.8 billion ~~increased 4~~decreased 1 percent. ~~Organic~~Changes in currency rates reduced sales ~~volumes~~7 percent. Volumes rose 3 percent and ~~changes~~product mix/other was favorable by 3 percent, mostly due to sales of nonwovens to Halyard Health, Inc. in ~~currency rates increased net sales 1 percent. Third~~conjunction with a near-term supply agreement. First quarter operating profit of ~~$165 increased 6~~$134 decreased 1 percent. The comparison ~~benefited~~was negatively impacted by unfavorable currency effects, mostly offset by benefits from ~~organic~~ sales volume growth, improved product mix and cost ~~savings and lower manufacturing-related costs, partially offset by input cost inflation.~~savings.

Net sales in North America ~~decreased~~increased 3 percent. Volumes increased 4 percent, ~~driven~~while currency was unfavorable by ~~lower net selling prices. Overall organic sales volumes~~1 percent. Volumes were ~~even with year-ago levels, as increases~~up high-single digits in wipers, mid-single digits in safety products and ~~wipers were offset by declines~~low-single digits in washroom ~~and other product categories.~~products compared to soft performance in the year-ago period.

Net sales in ~~K-C International increased 14 percent. Organic sales volumes~~developing and emerging markets decreased 9 percent, including a 17 point drag from currency rates. Volumes rose 76 percent and the combined impact of higher net selling prices and improved ~~6 percent and~~ product mix ~~advanced 1~~benefited net sales by 2 percent. The volume growth was driven by increases in Latin America ~~along with solid performance in~~and Asia.

Net sales in ~~Europe~~developed markets outside North America were ~~up 6 percent, including a 4 point benefit from currency rates. Volumes increased 3 percent, while net selling prices were off 1 percent.~~

~~Health Care Segment~~

~~Third quarter net sales of $0.4 billion decreased 3~~down 12 percent, primarily due to lower net selling prices. Surgical and infection prevention and medical device volumes were both similar to year-ago levels. Third quarter operating profit of $52 decreased 26 percent, driven by lower net sales, unfavorable effectsnegative impacts from ~~changes in~~ currency ~~rates and cost inflation.~~rates.

~~Commentary - First Nine Months of 2014 Compared to First Nine Months of 2013~~

For the first nine months of 2014, net sales of $16.1 billion increased 1 percent compared to the year-ago period. Organic sales volumes increased 3 percent, and net selling prices rose 2 percent, partially offset by slightly unfavorable product mix. Foreign currency exchange rates were unfavorable by 2 percent and lower sales in conjunction with European strategic changes and pulp and tissue restructuring actions reduced net sales by 1 percent.

Year-to-date operating profit was $2,494 in 2014 versus $2,386 in 2013. Operating profit comparisons benefited from organic sales volume growth, higher net selling prices, FORCE cost savings of $245 and $25 of savings from pulp and tissue restructuring actions. Total marketing, research and general expenses were down versus prior-year levels, driven primarily by lower administrative costs. Input costs were $180 higher overall versus 2013. Foreign currency translation effects reduced operating profit by $45 and currency transaction effects also negatively impacted the operating profit comparison. Results in 2014 include transaction and related costs for the spin-off of our health care business and restructuring costs for European strategic changes. Results in 2013 include restructuring costs for European strategic changes.

Other (income) and expense, net was $27 of expense in the first nine months of 2014 and $12 of expense in the prior year. 2014 results were driven by foreign currency transaction losses and a non-deductible charge of $39 related to an adverse court ruling regarding the treatment of capital contributions in prior years to a majority-owned affiliate in the Middle East, partially offset by gains on the sales of certain non-core assets. The year-ago results included the $36 charge related to the devaluation of the Venezuelan bolivar, partially offset by gains on the sales of certain non-core assets.

Through nine months, diluted net income per share was $4.25 in 2014 and $4.13 in 2013. The increase was primarily due to higher operating profit and a lower share count, partially offset by lower equity income. The year-to-date effective tax rate was 32.7 percent in 2014 compared to 31.3 percent in 2013.

~~European Strategic Changes~~

In October 2012, we initiated strategic changes to our Western and Central European businesses, including the exit of the diaper category, with the exception of the Italian market, divestiture or exit of some lower-margin businesses in certain markets, primarily in the consumer tissue segment, and streamlining of our manufacturing footprint and administrative organization. The impacted businesses previously generated annual net sales of approximately $0.5 billion and negligible operating profit. Total related restructuring costs will be incurred through 2014. As a result of the restructuring activities, net sales for the nine months ended September 30, 2014 were decreased by $150 compared to the nine months ended September 30, 2013.

We continue to expect that total after-tax charges will be between $300 and $350 and that pre-tax charges will be slightly higher than $400. Cash costs are projected to be 50 to 55 percent of total charges. Noncash charges consist primarily of asset impairment charges and incremental depreciation.

During the nine months ended September 30, 2014, $13 of pre-tax charges were recognized for the strategic changes, and we made cash payments of $32. During the nine months ended September 30, 2013, $67 of pre-tax charges were recognized for the strategic

changes, including $44 recorded in cost of products sold and $20 recorded in marketing, research and general expenses and $3 in other (income) expense, net. A related benefit of $15 was recorded in provision for income taxes.

~~For additional information on the European strategic changes, see Note 4 to the Consolidated Financial Statements.~~

2014 Organization Restructuring

In October 2014, we initiated a restructuring plan in order to improve organization efficiency and offset the impact of stranded overhead costs resulting from the spin-off of our health care business. The restructuring is intended to improve ~~our~~ underlying profitability and increase ~~our~~ flexibility to invest in targeted growth initiatives, brand building and other capabilities critical to delivering future growth.

The restructuring is expected to be completed by the end of 2016, with total costs, primarily severance, anticipated to be $130 to $160 after tax ($190 to $230 pre-tax). Cash costs are projected to be approximately 80 percent of the total charges. ~~Workforce reductions are expected to be in the range of 1,100 to 1,300 and primarily impact salaried employees.~~ Cumulative pre-tax savings from the restructuring are expected to be $120 to $140 by the end of 2017. We expect that $85 to $105 of the after-tax charges ($125 to $150 pre-tax) will occur in the fourth quarter of 2014, while savings from the restructuring are not anticipated to be significant until2017, and were $15 through March 31, 2015. The restructuring is expected to impact all of our business segments and our organizations in all major geographies.

Charges of $5 after tax ($13 pre-tax) were recognized in the first quarter of 2015 for the restructuring. Approximately two-thirds of the pre-tax charges were recorded outside North America and one-third was recorded in North America.

Defined Benefit Pension Plan Changes

Effective January 2015, the U.S. pension plan was amended to include a lump-sum pension benefit payout option for certain plan participants. In addition, in February 2015, we entered into agreements to purchase group annuity contracts that will transfer to two insurance companies the pension benefit obligations for approximately 21,000 Kimberly-Clark retirees in the United States. Assuming all closing conditions are satisfied, we expect these transactions will be completed in the second quarter of 2015. In connection with these transactions, during the first quarter of 2015 we made a $410 contribution to our U.S. pension plan in order to maintain the plan’s funded status. As a result of these changes, we expect to recognize total pension settlement charges of $0.8 billion after tax ($1.3 billion pre-tax) in 2015, mostly in the second quarter. In total we expect to contribute $450 to $500 to our defined benefit pension plans for the full year 2015.

Liquidity and Capital Resources

Cash Provided by Operations

Cash provided by operations was ~~$2.3 billion~~$20 for the first ~~nine~~three months of ~~2014,~~2015, compared to ~~$2.1 billion~~$437 in the prior year. The ~~increase~~decrease was ~~primarily~~ driven by ~~lower payments~~higher pension contributions, increased operating working capital and the impact of the spin-off of the health care business in ~~2014 for income taxes~~2014. First quarter pension contributions were $435 million in 2015 and ~~restructuring actions.~~$180 million in 2014.

Investing

During the first ~~nine~~three months of ~~2014,~~2015, our capital spending was ~~$730~~$284 compared to ~~$697~~$258 in the prior year. We anticipate that full year ~~2014~~2015 capital spending will be ~~toward the low end of our target range of $1.0~~$950 to ~~$1.2 billion.~~$1,050.

Financing

~~We repurchase shares of Kimberly-Clark common stock from time to time pursuant to publicly announced share repurchase programs. During the first nine months of 2014, we repurchased~~ ~~10.3 million~~ ~~shares of our common stock at a cost of~~ ~~$1.1 billion~~ through a broker in the open market. In 2014, we plan to repurchase approximately $2.0 billion of shares, subject to market conditions, including the repurchases expected to be made using the distribution associated with the spin-off of our health care business.

At ~~September 30, 2014, total debt and redeemable securities was~~ ~~$7.0 billion~~ ~~compared to~~ ~~$6.3 billion~~ ~~at December 31, 2013.~~

On ~~May 22, 2014,~~February 27, 2015, we issued ~~$300~~$250 aggregate principal amount of ~~floating rate~~1.85% notes due ~~May 19, 2016~~March 1, 2020 and ~~$300~~$250 aggregate principal amount of ~~1.9%~~2.65% notes due ~~May 22, 2019.~~March 1, 2025. Proceeds from the offering were used for general corporate purposes, ~~and repurchases of common stock.~~

~~In June 2014, we entered into a~~ ~~$2.0 billion~~ revolving credit facility which expires in 2019. This facility, currently unused, replaced a similar facility for $1.5 billion, supports our commercial paper program, and would provide liquidity in the event our access to the commercial paper markets is unavailable for any reason.including pension contribution payments.

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 ~~$213~~$1,064 as of ~~September 30, 2014~~March 31, 2015 (included in debt payable within one year on the Consolidated Balance Sheet). The average month-end balance of short-term debt for the ~~third~~first quarter of ~~2014~~2015 was ~~$358.~~$1,030. These short-term borrowings provide supplemental funding for supporting 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 pension contributions, dividends and income taxes.

At March 31, 2015, total debt was $7.7 billion compared to $7.0 billion at December 31, 2014.

We maintain a $2.0 billion revolving credit facility which expires in 2019. This facility, currently unused, supports our commercial paper program, and would provide liquidity in the event our access to the commercial paper markets is unavailable for any reason.

We repurchase shares of Kimberly-Clark common stock from time to time pursuant to publicly announced share repurchase programs. During the first three months of 2015, we repurchased 1.8 million shares of our common stock at a cost of $200 through a broker in the open market. In addition, we acquired the remaining interest in our subsidiary in Israel for approximately $150. As a result, we are now targeting full-year 2015 share repurchases of $700 to $900, compared to the previous target of $800 to $1,000, subject to market conditions.

We account for our operations in Venezuela using highly inflationary accounting. ~~On February 13, 2013, the Venezuelan government announced a devaluation of the Central Bank of Venezuela ("Central Bank") regulated currency exchange system rate to 6.3~~ ~~bolivars per U.S. dollar and the elimination of the SITME rate. As a result of the devaluation, we recorded a~~ ~~$26~~ after-tax charge ($36 pre-tax) related to the remeasurement of the local currency-denominated balance sheet to the new exchange rate in the quarter ended March 31, 2013. Prior to this devaluation, we used the Central Bank SITME rate of ~~5.4~~ ~~bolivars per U.S. dollar to measure K-C Venezuela's bolivar-denominated transactions into U.S. dollars. The $36 pre-tax charge is reflected in the Consolidated~~

Income Statement in other (income) and expense, net for the nine months ended September 30, 2013. In the Consolidated Cash Flow Statement, this non-cash charge is included in other in cash provided by operations.

During March 2013, the Venezuelan government announced a complementary currency exchange system, SICAD. Participation in SICAD is controlled by the Venezuelan government. SICAD is intended to function as an auction system, allowing entities in specific sectors to bid for U.S. dollars to be used for specified import transactions. In February 2014, the president of Venezuela announced that another exchange system (referred to as SICAD 2) would be initiated. Initial exchanges under SICAD 2 began on March 24, 2014.

We ~~measure~~have historically measured results in Venezuela at the rate in which we transact our ~~business. Since March 2013, exchange transactions have taken place through letters of credit~~business, which ~~resulted in an effective exchange rate of~~was 6.3 bolivars per U.S. dollar until December 31, 2014. Given the level of uncertainty and ~~through approved transactions using the regulated currency exchange system, which were also at a~~ ~~6.3~~ ~~exchange rate. To date, we have not gained access to U.S. dollars~~lack of liquidity in Venezuela, ~~through either SICAD or SICAD 2 auctions. Whether we will be able~~in part due to ~~access either SICAD system~~recent declines in the ~~foreseeable future and what volume~~price of ~~currency exchange will transact through these alternative mechanisms is unclear. Accordingly,~~oil, we ~~continued to measure K-C Venezuela operations~~remeasured our local currency-denominated balance sheet as of December 31, 2014 at the year-end floating SICAD II exchange rate of ~~6.3~~50 bolivars per U.S. dollar, ~~through~~ ~~September 30,~~as we believed this was the most accessible rate available in the absence of exchange at 6.3 bolivars per U.S. dollar. This remeasurement resulted in a non-deductible charge of $462 in the Consolidated Income Statement for the year ended December 31, 2014.

Through September 30, 2014 we continued to manufacture products in Venezuela as well as import finished goods under approved letters of credit. However, recent government approvals to import raw materials under letters of credit are not at a level sufficient to sustain all of our manufacturing capabilities in country. Unless we are able to obtain further approvals to import raw materials through approved letters of credit or through the official government exchange system, we may be forced to curtail some or all of our local manufacturing until such approvals to import additional raw materials are forthcoming. We continue to seek approval for additional imports, as well as monitor the financial policies and practices ofOn February 10, 2015, the Venezuelan government announced the addition of a new foreign currency exchange system referred to ~~assess~~as the ~~impact on~~Marginal Currency System, or SIMADI, along with the elimination of the SICAD II system. With the elimination of SICAD II in February 2015, we remeasured our ~~US GAAP accounting and reporting~~local currency-denominated balance sheet during the first quarter of 2015 at the applicable floating SIMADI exchange rate (193 bolivars per U.S. dollar at March 31, 2015) as we believe this is the most accessible rate available to us in the absence of exchange at 6.3 bolivars per U.S. dollar. This remeasurement resulted in a non-deductible charge of $45 in the Consolidated Income Statement for the three months ended March 31, 2015. At March 31, 2015, our ~~operations~~net investment in ~~that country.~~

~~At September 30, 2014~~, K-C Venezuela ~~had a~~was $107, and the bolivar-denominated net monetary asset position (primarily cash) of ~~$435, and our net investment in K-C Venezuela~~ was ~~$572, both valued at~~ ~~6.3~~ ~~bolivars per U.S. dollar.~~not material. Net sales of K-C Venezuela represented less than 0.5 percent and 3 percent of consolidated net sales in ~~2014~~ ~~and approximately 2 percent in~~ ~~2013~~.

Management believes 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, capital spending, payment of dividends, pension plan contributions and other needs for the foreseeable future. Further, we do not expect restrictions or taxes on repatriation of cash held outside of the United States to have a material effect on our overall liquidity, financial condition or results of operations for the foreseeable future.three months ended March 31, 2015 and 2014, respectively.

Legal Matters

We are subject to various legal proceedings, claims and governmental inquiries, inspections, audits or investigations pertaining to issues such as contract disputes, product liability, tax matters, patents and trademarks, advertising, pricing, business practices, governmental regulations, employment and other matters. Although the results of litigation and claims cannot be predicted with certainty, we believe that the ultimate disposition of ~~these matters, to the extent not previously provided for, will not have a material adverse effect, individually~~litigation or ~~in the aggregate, on our business, financial condition, results of operations or liquidity.~~

We are subject to federal, state and local environmental protection laws and regulations with respect to our business operations and are operating in compliance with, or taking action aimed at ensuring compliance with, these laws and regulations. We have been named a potentially responsible party under the provisions of the U.S. federal Comprehensive Environmental Response, Compensation and Liability Act, or analogous state statutes, at a number of sites where hazardous substances are present. None of our compliance obligations with environmental ~~protection~~protections laws and regulations, individually or in the aggregate, ~~is expected to~~will not have a material adverse effect on our business, financial condition, results of operations or liquidity.

Business Outlook

In ~~2014,~~2015, we plan to continue to execute our Global Business Plan strategies, which include a focus on targeted growth initiatives, innovation and brand building, cost savings programs and shareholder-friendly capital allocation.

Growth in ~~organic~~ volume, net selling prices and product mix is expected to be in the combined 3 to 5 percent target range, ~~led by K-C International.~~ with a focus on Personal Care and KCP in developing and emerging markets.

We expect net sales to be negatively impacted by unfavorable foreign currency exchange rates of 29 to 10 percent, including an approximate 3 percent ~~and lower sales~~impact from ~~the European strategic~~exchange rate changes ~~and pulp and tissue restructuring actions~~in Venezuela. We also expect unfavorable foreign currency translation effects to negatively impact operating profit growth by 10 to 11 percent, including an approximate 4 percent decrease from exchange rate changes in Venezuela. Currency transaction effects are also anticipated to negatively impact operating profit.

We anticipate commodity cost deflation of ~~1 percent.~~ $50 to $150.

We plan to achieve cost savings of at least $300 ~~expect unfavorable foreign currency exchange rate effects~~from our FORCE program, and ~~anticipate commodity cost inflation toward~~$60 to $80 from the ~~high end of the previously communicated range of $150 to $250.~~ 2014 Organization Restructuring.

We anticipate that advertising ~~and research and development~~ spending will increase ~~faster than~~somewhat as a percentage of net sales to support targeted growth initiatives, brand building and innovation activities. ~~We expect~~

Our share of net income from equity companies is expected to be down ~~year-on-year. Our fourth quarter results will be impacted~~somewhat due to lower earnings at Kimberly-Clark de Mexico, S.A.B. de C.V., driven by the spin-off of the health care business and the 2014 organization restructuring (see additional information elsewhere in this Management's Discussion and Analysis of Financial Condition and Results of Operations and the footnotes to the Consolidated Financial Statements).a weaker Mexican peso.

~~In 2014, we~~We anticipate capital spending ~~will~~to be ~~toward the low end of our target range of $1.0~~in a $950 to ~~$1.2 billion~~$1,050 range and share repurchases to total ~~$2.0 billion,~~$700 to $900, subject to market ~~conditions, including~~conditions.

We expect to recognize total pension settlement charges of $0.8 billion after tax ($1.3 billion before-tax) in 2015, mostly in the ~~repurchases expected to be made from the distribution associated with the spin-off of our health care business, and~~second quarter. In total we expect to contribute ~~approximately $200~~$450 to $500 to our defined benefit pension ~~plans.~~plans for the full year 2015.

We increased our quarterly dividend 4.8 percent effective April 2015.

Charges related to the 2014 Organization Restructuring are expected to be $30 to $50 after tax.

Information Concerning Forward-Looking Statements

Certain matters contained in this report concerning the business outlook, including the anticipated costs, scope, timing and financial and other effects of the ~~European strategic changes and~~ 2014 ~~organization restructuring, the spin-off of our health care business and related matters,~~Organization Restructuring, cash flow and uses of cash, growth initiatives, innovations, marketing and other spending, cost savings and reductions, net sales, anticipated currency rates and exchange risks, raw material, energy and other input costs, contingencies and anticipated transactions of Kimberly-Clark, including dividends, share repurchases and pension contributions and annuity purchases, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based upon management's expectations and beliefs concerning future events impacting Kimberly-Clark. There can be no assurance that these future events will occur as anticipated or that our results will be as estimated. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to publicly update them.

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 fluctuations in foreign currency exchange rates, the prices and availability of our raw materials, potential competitive pressures on selling prices for our products, energy costs and retail trade customer actions, as well as general economic and political conditions globally and in the markets in which we do business, could affect the realization of these estimates.

For a description of certain factors that could cause our future results to differ from those expressed in these forward-looking statements, see Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014 entitled "Risk Factors." Other factors not presently known to us or that we presently consider immaterial could also affect our business operations and financial results.


Item 4.	Controls and Procedures

As of ~~September 30, 2014~~March 31, 2015, an evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of ~~September 30, 2014~~March 31, 2015. There were no changes in our internal control over financial reporting during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

2420

PART II – OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We repurchase shares of Kimberly-Clark common stock from time to time pursuant to publicly announced share repurchase programs. All our share repurchases during the ~~third~~first quarter of ~~2014~~2015 were made through a broker in the open market.

The following table contains information for shares repurchased during the ~~third~~first quarter of ~~2014~~2015. None of the shares in this table were repurchased directly from any of our officers or directors.

Period (2014)
Total Number
of Shares
Purchased^(a)

Average
Price Paid
Per Share

Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs

Maximum Number
of Shares That May
Yet Be Purchased
Under the Plans or
Programs
July 1 to July 31 590,000 $110.90 37,882,811 12,117,189
August 1 to August 31 580,000 107.61 38,462,811 11,537,189
September 1 to September 30 587,000 107.20 39,049,811 10,950,189
Total 1,757,000



Period (2015)	Total Number of Shares Purchased^(a)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs^(b)
January 1 to January 31	198,000	$109.87	46,868,111	43,131,889
February 1 to February 28	751,000	110.00	47,619,111	42,380,889
March 1 to March 31	891,400	107.21	48,510,511	41,489,489
Total	1,840,400


(a)	Share repurchases were made pursuant to a share repurchase program authorized by our Board of Directors on January 21, 2011. This program allows for the repurchase of 50 million shares in an amount not to exceed $5 billion (the "2011 Program").


(b)	Includes shares available under the 2011 Program, as well as shares available under a share repurchase program authorized by our Board of Directors on November 13, 2014 that allows for the repurchase of 40 million shares in an amount not to exceed $5 billion.

2521

Item 6. Exhibits


(a)	Exhibits

Exhibit No. (2)b. Definitive Purchase Agreement by and among the Corporation, The Prudential Insurance Company of America, Prudential Financial, Inc., and State Street Bank and Trust Company, as Independent Fiduciary of the Kimberly-Clark Corporation Pension Plan, dated as of February 23, 2015, filed herewith.*

Exhibit No. (2)c. Definitive Purchase Agreement by and among the Corporation, Massachusetts Mutual Life Insurance Company, and State Street Bank and Trust Company, as Independent Fiduciary of the Kimberly-Clark Corporation Pension Plan, dated as of February 23, 2015, filed herewith.*

Exhibit No. (3)a. Amended and Restated Certificate of Incorporation, dated April 30, 2009, incorporated by reference to Exhibit No. (3)a of the Corporation's Current Report on Form 8-K dated May 1, 2009.

Exhibit No. (3)b. By-Laws, as amended April 30, 2009, incorporated by reference to Exhibit No. (3)b of the Corporation's Current Report on Form 8-K dated May 1, 2009.

Exhibit No. (4). Copies of instruments defining the rights of holders of long-term debt will be furnished to the Securities and Exchange Commission on request.

Exhibit No. (10)~~b. Executive Severance Plan, as amended~~e. Letter of Agreement between the Corporation and ~~restated as of December 31, 2014, incorporated by reference to~~ Sandra MacQuillan, filed herewith.

Exhibit No. (10)bk. Letter of Agreement between the ~~Corporation's Current Report on Form 8-K~~Corporation and Maria Henry, filed ~~September 23, 2014.~~herewith.

Exhibit No. (31)a. Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), filed herewith.

Exhibit No. (31)b. Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act, filed herewith.

Exhibit No. (32)a. Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, furnished herewith.

Exhibit No. (32)b. Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, furnished herewith.

Exhibit No. (101).INS XBRL Instance Document

Exhibit No. (101).SCH XBRL Taxonomy Extension Schema Document

Exhibit No. (101).CAL XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit No. (101).DEF XBRL Taxonomy Extension Definition Linkbase Document

Exhibit No. (101).LAB XBRL Taxonomy Extension Label Linkbase Document

Exhibit No. (101).PRE XBRL Taxonomy Extension Presentation Linkbase Document


*	Confidential treatment has been requested for portions of this agreement. Schedules and exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission on request.

2622

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




KIMBERLY-CLARK CORPORATION
(Registrant)

By:		/s/ Mark A. Buthman
		Mark A. Buthman
		Senior Vice President and
		Chief Financial Officer
		(principal financial officer)

By:		/s/ Michael T. Azbell
		Michael T. Azbell
		Vice President and Controller
		(principal accounting officer)

~~October~~April 21, ~~2014~~2015

2723

EXHIBIT INDEX




Exhibit No.		Description

(2)b.		Definitive Purchase Agreement by and among the Corporation, The Prudential Insurance Company of America, Prudential Financial, Inc., and State Street Bank and Trust Company, as Independent Fiduciary of the Kimberly-Clark Pension Plan, Dated as of February 23, 2015, filed herewith.*

(2)c.		Definitive Purchase Agreement by and among the Corporation, Massachusetts Mutual Life Insurance Company, and State Street Bank and Trust Company, as Independent Fiduciary of the Kimberly-Clark Corporation Pension Plan, dated as of February 23, 2015, filed herewith.*

(3)a.		Amended and Restated Certificate of Incorporation, dated April 30, 2009, incorporated by reference to Exhibit No. (3)a of the Corporation's Current Report on Form 8-K dated May 1, 2009.

(3)b.		By-Laws, as amended April 30, 2009, incorporated by reference to Exhibit No. (3)b of the Corporation's Current Report on Form 8-K dated May 1, 2009.

(4).		Copies of instruments defining the rights of holders of long-term debt will be furnished to the Securities and Exchange Commission on request.

(10)b.e.		~~Executive Severance Plan, as amended~~Letter of Agreement between the Corporation and ~~restated as~~Sandra MacQuillan, filed herewith.

(10)k.		Letter of ~~December 31, 2014, incorporated by reference to Exhibit No. (10)b of~~Agreement between the ~~Corporation's Current Report on Form 8-K~~Corporation and Maria Henry, filed ~~September 23, 2014.~~herewith.

(31)a.		Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), filed herewith.

(31)b.		Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act, filed herewith.

(32)a.		Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, furnished herewith.

(32)b.		Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code, furnished herewith.

(101).INS		XBRL Instance Document

(101).SCH		XBRL Taxonomy Extension Schema Document

(101).CAL		XBRL Taxonomy Extension Calculation Linkbase Document

(101).DEF		XBRL Taxonomy Extension Definition Linkbase Document

(101).LAB		XBRL Taxonomy Extension Label Linkbase Document

(101).PRE		XBRL Taxonomy Extension Presentation Linkbase Document


*	Confidential treatment has been requested for portions of this agreement. Schedules and exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission on request.

2824



	2014			2013
Accrued expenses - January 1	$	37		$	133
Charges for workforce reductions and other exit costs	12			53
Cash payments	(32		)	(132		)
Currency and other	(2		)	(9		)
Accrued expenses - September 30	$	15		$	45



	September 30, 2014		Fair Value Measurements
	September 30, 2014		Level 1		Level 2		Level 3
Assets
Company-owned life insurance (“COLI”)	$	57	$	—	$	57	$	—
Available-for-sale securities	24		24		—		—
Derivatives	44		—		44		—
Total	$	125	$	24	$	101	$	—
Liabilities
Derivatives	$	105	$	—	$	105	$	—



Period (2014)	Total Number of Shares Purchased^(a)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
July 1 to July 31	590,000	$110.90	37,882,811	12,117,189
August 1 to August 31	580,000	107.61	38,462,811	11,537,189
September 1 to September 30	587,000	107.20	39,049,811	10,950,189
Total	1,757,000