2018 Global Restructuring Program

6 Months Ended

Jun. 30, 2020

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 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 in 2021, with total costs anticipated to be toward the high end of the range of $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.

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


	Three Months Ended June 30						Six Months Ended June 30
	2020		2019		2020		2019
Cost of products sold:
Charges for workforce reductions	$	1	$	2	$	1	$	32

Asset write-offs	3		15		9		27
Incremental depreciation	33		65		68		132
Other exit costs	23		20		52		36
Total	60		102		130		227
Marketing, research and general expenses:
Charges (adjustments) for workforce reductions	1		(12)		(2)		(8)
Other exit costs	26		29		52		53
Total	27		17		50		45
Other (income) and expense, net	—		—		—		(1)
Total charges	87		119		180		271
Provision for income taxes	(15)		(27)		(33)		(58)
Net charges	72		92		147		213
Net impact related to equity companies and noncontrolling interests	—		—		(1)		1
Net charges attributable to Kimberly-Clark Corporation	$	72	$	92	$	146	$	214

The following summarizes the restructuring liabilities activity:


	2020		2019
Restructuring liabilities at January 1	$	132	$	210
Charges for workforce reductions and other cash exit costs	99		112
Cash payments	(122)		(142)
Currency and other	(3)		6
Restructuring liabilities at June 30	$	106	$	186

Restructuring liabilities of $75 and $125 are recorded in Accrued expenses and other current liabilities and $31 and $61 are recorded in Other Liabilities as of June 30, 2020 and 2019, respectively. The impact related to restructuring charges is recorded in Operating working capital and Other Operating Activities, as appropriate, in our consolidated cash flow statements.

Through June 30, 2020, cumulative pre-tax charges for the 2018 Global Restructuring Program were $1.6 billion ($1.2 billion after tax).