European Strategic Changes

9 Months Ended

Sep. 30, 2014

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.

European Strategic Changes [Member]

Restructuring Cost and Reserve

European Strategic Changes

In 2012, we initiated strategic changes related to our Western and Central European consumer and professional businesses to focus our resources and investments on stronger market positions and growth opportunities. We have exited the diaper category in that region, with the exception of the Italian market, and divested or exited some lower-margin businesses, mostly in consumer tissue, in certain markets. The changes primarily affect our consumer businesses, with a modest impact on K-C Professional ("KCP"). The restructuring actions commenced in 2012 and are expected to be completed by December 31, 2014.

Restructuring actions related to the strategic changes involved the sale or closure of five of our European manufacturing facilities and the streamlining of our administrative organization.

Total charges related to the European strategic changes during the three months ended September 30, 2014 and 2013 were $1 and $14 ($3 and $10 after tax), respectively. Total charges related to these actions during the nine months ended September 30, 2014 and 2013 were $13 and $67 ($12 and $52 after tax), respectively.

Through September 30, 2014, cumulative pre-tax charges for the strategic changes were $393 ($320 after tax), including cumulative pre-tax cash charges of $215.

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



	2014			2013
Accrued expenses - January 1	$	37		$	133
Charges for workforce reductions and other exit costs	12			53
Cash payments	(32		)	(132		)
Currency and other	(2		)	(9		)
Accrued expenses - September 30	$	15		$	45

- 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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