Kimberly-Clark(KMB)2024-02-08 19:51Operational Challenges - The company has significantly curtailed media, advertising, and promotional activities in Russia due to the ongoing war in Ukraine, impacting operations and potentially leading to asset impairment [49]. - The COVID-19 pandemic has caused significant volatility in demand for the company's products, affecting manufacturing and supply chain operations [50]. - The company faces risks related to supply chain disruptions, including natural disasters, labor strikes, and geopolitical instabilities, which could adversely affect financial results [52]. - The company is experiencing a tight labor market, which could lead to increased turnover and costs associated with attracting and retaining key personnel [64]. - Intense competition and changing consumer preferences may adversely affect the company's financial results, necessitating increased marketing efforts [65][66]. - The company is dependent on key retailers, and changes in their policies or loss of significant customers could negatively impact financial performance [69]. - The company faces risks from changes in energy prices and availability, which could impact manufacturing and transportation costs [210]. Financial Management - The company is implementing plans to achieve cost reductions and expects ongoing savings from continuous improvement activities, although success is not guaranteed [55]. - The company may pursue acquisitions or divestitures of product lines, which could impact financial results and operational focus [56][57]. - Disruptions in credit markets or changes in credit ratings could adversely affect the company's access to financing and increase borrowing costs [59][60]. - New or revised laws and regulations may increase compliance costs, potentially impacting financial results negatively [72]. - Interest rate risk is managed through a mix of variable and fixed-rate debt, with a 10% decrease in interest rates potentially increasing the fair value of unhedged fixed-rate debt by approximately 600, but this is not considered material [206]. - Commodity price risk is significant, particularly related to pulp and petroleum-based materials, which could adversely affect earnings if selling prices do not adjust accordingly [209]. - The company employs strategic pricing mechanisms to manage volatility in commodity costs, although derivative instruments have not been used for this purpose [209]. - The company utilizes derivative instruments for risk management purposes, primarily for foreign currency and interest rate risks, but not for speculation [199]. Inflation and Accounting - The company has adopted highly inflationary accounting for operations in Argentina and Türkiye, with immaterial net monetary positions as of December 31, 2023 [204][205].