2018 Global Restructuring Program

12 Months Ended

Dec. 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 restructuring is expected to impact all of our business segments and 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 ($1.3 billion to $1.4 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 2020 are expected to be $300 to $500 pre-tax ($235 to $390 after tax).

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



	Twelve Months Ended December 31, 2019			Twelve Months Ended December 31, 2018
Cost of products sold:
Charges for workforce reductions	$	31		$	149
Asset impairments	—			74
Asset write-offs	54			112
Incremental depreciation	235			172
Other exit costs	96			34
Total	416			541
Marketing, research and general expenses:
Charges for workforce reductions	(12		)	243
Other exit costs	111			137
Total	99			380
Other (income) and expense, net^(a)	(194		)	(12		)
Nonoperating expense^(b)	45			127
Total charges	366			1,036
Provision for income taxes	(118		)	(243		)
Net charges	248			793
Net impact related to equity companies and noncontrolling interests	—			(10		)
Net charges attributable to Kimberly-Clark Corporation	$	248		$	783


(a)	Other (income) and expense, net in 2019 was the result of pre-tax gains on the sales of manufacturing facilities and associated real estate which were disposed of as part of the restructuring.


(b)	Represents non-cash pension settlement and curtailment charges resulting from restructuring actions, primarily in the U.S., United Kingdom and Canada.

The asset impairments charge measurement was 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 restructuring liabilities activity:



	2019			2018
Restructuring liabilities at January 1	$	210		$	—
Charges for workforce reductions and other cash exit costs	221			559
Cash payments	(302		)	(325		)
Currency and other	3			(24		)
Restructuring liabilities at December 31	$	132		$	210

As of December 31, 2019 and 2018, restructuring liabilities of $93 and $118 are recorded in Accrued expenses and other current liabilities and $39 and $92 are recorded in Other Liabilities, 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 December 31, 2019, cumulative pre-tax charges for the 2018 Global Restructuring Program were $1.4 billion ($1.0 billion after tax).