2018 Global Restructuring Program

3 Months Ended

Mar. 31, 2019

Restructuring and Related Activities Disclosure

2018 Global Restructuring Program

In January 2018, we announced the 2018 Global Restructuring Program to reduce our structural cost base by streamlining and simplifying our manufacturing supply chain and overhead organization. We expect to close or sell approximately 10 manufacturing facilities and expand production capacity at several others. We expect to exit or divest some lower-margin businesses that generate approximately 1 percent of our net sales. The sales are concentrated in our consumer tissue business segment. The restructuring is expected to impact our organizations in all major geographies. Workforce reductions are expected to be in the range of 5,000 to 5,500. Certain capital appropriations under the 2018 Global Restructuring Program are being finalized. Accounting for actions related to each appropriation will commence when the appropriation is authorized for execution.

The restructuring is expected to be completed by the end of 2020, with total costs anticipated to be $1.7 billion to $1.9 billion pre-tax ($1.35 billion to $1.5 billion after tax). Cash costs are expected to be $900 to $1.0 billion, primarily related to workforce reductions. Non-cash charges are expected to be $800 to $900 pre-tax and will primarily consist of incremental depreciation, asset write-offs and pension settlement and curtailment charges. Restructuring charges in 2019 are expected to be $600 to $750 pre-tax ($470 to $570 after tax).

The following charges were incurred in connection with the 2018 Global Restructuring Program:



	Three Months Ended March 31, 2019			Three Months Ended March 31, 2018
Cost of products sold:
Charges for workforce reductions	$	30		$	119
Asset impairments	—			74
Asset write-offs	12			55
Incremental depreciation	67			28
Other exit costs	16			1
Total	125			277
Marketing, research and general expenses:
Charges for workforce reductions	4			286
Other exit costs	24			14
Total	28			300
Other (income) and expense, net	(1		)	—
Total charges	152			577
Provision for income taxes	(31		)	(143		)
Net charges	121			434
Net impact related to equity companies and noncontrolling interests	1			(6		)
Net charges attributable to Kimberly-Clark Corporation	$	122		$	428

The asset impairment charges were measured based on the excess of the carrying value of the impacted asset groups over their fair values. These fair values were measured by using discounted cash flows expected over the limited time the assets would remain in use and as a result, the assets were essentially written off. The use of discounted cash flows represents a level 3 measure under the fair value hierarchy.

The following summarizes the 2019 restructuring liabilities activity:



	2019			2018
Restructuring liabilities at January 1	$	210		$	—
Charges for workforce reductions and other cash exit costs	74			418
Cash payments	(71		)	(14		)
Currency and other	6			3
Restructuring liabilities at March 31	$	219		$	407

Restructuring liabilities of $132 and $306 are recorded in Accrued expenses and other current liabilities and $87 and $101 are recorded in Other Liabilities as of March 31, 2019 and 2018, respectively. The impact related to restructuring charges is recorded in Operating working capital and Other Operating Activities, as appropriate, in our consolidated cash flow statement.

Through March 31, 2019, cumulative pre-tax charges for the 2018 Global Restructuring Program were $1.2 billion ($905 after tax).