Spin-off of Health Care Business

9 Months Ended

Sep. 30, 2014

Restructuring Cost and Reserve

Restructuring and Related Activities Disclosure

2014 Organization Restructuring

In October 2014, we initiated a restructuring plan in order to improve organization efficiency and offset the impact of stranded overhead costs resulting from the spin-off of our health care business. The restructuring is intended to improve our underlying profitability and increase our flexibility to invest in targeted growth initiatives, brand building and other capabilities critical to delivering future growth.

The restructuring is expected to be completed by the end of 2016, with total costs anticipated to be $130 to $160 after tax ($190 to $230 pre-tax). Cash costs are projected to be approximately 80 percent of the total charges. Workforce reductions are expected to be in the range of 1,100 to 1,300 and primarily impact salaried employees. We expect that $85 to $105 of the after-tax charges ($125 to $150 pre-tax) will occur in the fourth quarter of 2014. The restructuring is expected to impact all of our business segments and our organizations in all major geographies.

Spinoff [Member]

Restructuring Cost and Reserve

Restructuring and Related Activities Disclosure

pin-Off of Health Care Business and Related Costs

In November 2013, we announced that our Board of Directors authorized management to pursue a potential tax-free spin-off of our health care business. The spin-off will create a stand-alone, publicly traded health care company with approximately $1.7 billion in annual net sales, focused on the sale of surgical and infection prevention products for the operating room and other medical supplies, and medical devices focused on pain management, respiratory and digestive health.

A Form 10 registration statement was filed in May 2014 with the Securities and Exchange Commission (the "SEC") to register our health care business as an independent stand-alone public company named Halyard Health, Inc. (“Halyard”). In September 2014, our Board of Directors authorized its executive committee (“Executive Committee”) to approve the final terms and conditions of the distribution.  On October 6, 2014, the Executive Committee approved the distribution of all of the issued and outstanding shares of Halyard common stock on the basis of one share of Halyard common stock for every eight shares of Kimberly-Clark common stock held as of the close of business on October 23, 2014, the record date for the distribution. The Form 10 registration statement, as amended, was deemed effective by the SEC on October 17, 2014. We expect that the spin-off will be completed at the end of the day on October 31, 2014, subject to market, regulatory and other conditions.

Halyard will fund a cash distribution to us equal to the estimated amount of all of Halyard's available cash on the distribution date in excess of the minimum amount to be retained by Halyard. Such minimum amount will be equal to $40 plus the estimated net amount of certain intercompany assets and liabilities on the distribution date that are to be retained by us plus approximately $1 associated with certain retention bonus obligations to be transferred to Halyard. The amount of funds resulting from the intercompany settlements will be determined on or about the date of the distribution, although the exact amount will depend on the amount of the cash distribution and the intercompany transactions.  We expect to use the proceeds of this cash distribution to make open-market repurchases of our shares of common stock.

After the spin-off, the divested health care business will be presented as discontinued operations, which will exclude overhead costs previously allocated to health care that will remain part of Kimberly-Clark after the spin-off, on our Consolidated Income Statement for all periods presented. The health care business' balance sheet, other comprehensive income and cash flows will be included within our Consolidated Balance Sheet, Consolidated Statement of Stockholders' Equity, Consolidated Statement of Comprehensive Income and Consolidated Cash Flow Statement through October 31, 2014.

In June 2014, we decided to exit one of our health care glove manufacturing facilities in Thailand and outsource the related production in order to improve our ongoing cost and competitive position.  The plan is expected to result in charges of approximately $70 ($50 after tax).  Charges recognized in cost of products sold during the three and nine months ended September 30, 2014 were $5 and $54, consisting primarily of an asset impairment charge of $42. In addition, during the three and nine months ended September 30, 2014, $30 and $56 were recorded, respectively, in marketing, research and general expenses, and $5 was recorded in cost of products sold, for transaction and related costs associated with the potential spin-off of our health care business.  Total charges during the three and nine months ended September 30, 2014 for these matters were $40 and $115 ($41 and $94 after tax), respectively.