Pulp And Tissue Restructuring

12 Months Ended

Dec. 31, 2011

Restructuring and Related Activities [Abstract]

Pulp and Tissue Restructuring

On January 21, 2011, we initiated a pulp and tissue restructuring plan in order to exit our remaining integrated pulp manufacturing operations and improve the underlying profitability and return on invested capital of our consumer tissue and K‑C Professional ("KCP") businesses. The restructuring involves the streamlining, sale or closure of six of our manufacturing facilities around the world. In conjunction with these actions, we have begun to exit certain non-strategic products, primarily non-branded offerings, and transfer some production to lower-cost facilities in order to improve overall profitability and returns. Facilities impacted by the restructuring include a facility in Everett, Washington, two facilities in Australia and two facilities in Spain.

In addition, on January 24, 2012, we announced our decision to streamline an additional manufacturing facility in North America to further enhance the profitability of our consumer tissue business. Estimated charges related to this additional restructuring action are expected to range from $30 million to $50 million before tax.

Both restructuring actions are expected to be substantially completed by December 31, 2012. The restructuring actions are expected to result in cumulative charges in 2011 and 2012 of approximately $550 million to $600 million before tax ($385 million to $420 million after tax). Cash costs related to the streamlining of operations, sale or closure, relocation of equipment, severance and other expenses are expected to account for approximately 30 to 40 percent of the total charges.

The following charges were incurred in connection with the restructuring:



	Year Ended December 31, 2011
	(Millions of dollars)
Incremental depreciation	$	252
Charges for workforce reductions	71
Asset impairments	58
Asset write-offs	19
Other exit costs	7
Cost of products sold	407
Charges for workforce reductions included in Marketing, research and general expenses	6
Other exit costs included in Other (income) and expense, net	2
Provision for income taxes	(126		)
Net charges	$	289

See Note 18 for additional information on the pulp and tissue restructuring charges by segment.

Pretax charges for the pulp and tissue restructuring relate to activities in the following geographic areas:



	Year Ended December 31, 2011
	North America		Australia		Other		Total
	(Millions of dollars)
Incremental depreciation	$	165	$	73	$	14	$	252
Charges for workforce reductions	27		47		3		77
Asset impairments	—		—		58		58
Asset write-offs	10		9		—		19
Other exit costs	2		4		3		9
Total charges	$	204	$	133	$	78	$	415

The following summarizes the cash charges recorded and reconciles these charges to accrued expenses:



	Year Ended December 31, 2011
	(Millions of dollars)
Accrued expenses - January 1, 2011	$	—
Charges for workforce reductions and other exit costs	86
Cash payments	(51		)
Currency and other	2
Accrued expenses - December 31, 2011	$	37

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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