Related Party Transactions

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

A portion of our net sales results from sales to Kimberly-Clark subsidiaries and affiliates. Included in our combined financial statements are net sales from intercompany sales of $25 and $25 in the three months ended September 30, 2014 and 2013, respectively, and $70 and $69 in the nine months ended September 30, 2014 and 2013, respectively.

During the three and nine months ended September 30, 2014 and 2013, we utilized manufacturing facilities and resources managed by affiliates of Kimberly-Clark to conduct our business. The expenses associated with these transactions, which primarily relate to production of semi-finished goods for our S&IP business, are included in cost of products sold in our combined income statement.

Our combined financial statements include certain expenses of Kimberly-Clark which were allocated to us for certain functions, including general expenses related to supply chain, finance, legal, information technology, human resources, compliance, shared services, insurance, employee benefits and incentives and stock-based compensation. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on the relative percentage of net sales or headcount. The total amount of these allocations from Kimberly-Clark was approximately as follows:

	Three Months Ended September 30				Nine Months Ended September 30
	2014		2013		2014		2013
Cost of products sold	$	8	$	6	$	20	$	19
Selling and general expenses	7		15		38		45
Research expenses	5		3		10		8
Total	$	20	$	24	$	68	$	72

We consider the expense allocation methodology and results to be reasonable for all periods presented. However, these allocations may not be indicative of the actual expenses we would have incurred as a separate, stand-alone public company or of the costs we will incur in the future. See Note 2, “Separation from Kimberly-Clark and Long-Term Debt” under the heading “Stand-Alone Public Company Costs” for further discussion.

Historically, Kimberly-Clark has provided financing, cash management and other treasury services to us. In North America, our cash balances are swept by Kimberly-Clark, and historically, we have received funding from Kimberly-Clark for most of our operating and investing cash needs. Cash transferred to and from Kimberly-Clark has historically been recorded as intercompany cash. Intercompany cash, receivables and payables with Kimberly-Clark are reflected within Kimberly-Clark’s net investment in the accompanying combined financial statements.