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 and asset impairments. Restructuring charges in 2018 are expected to be $1.2 billion to $1.35 billion pre-tax ($950 to $1.05 billion after tax).

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



	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018
Cost of products sold:
Charges for workforce reductions	$	31		$	156
Asset impairments	—			74
Asset write-offs	16			102
Incremental depreciation	47			115
Other exit costs	9			18
Total	103			465
Marketing, research and general expenses:
Charges (adjustments) for workforce reductions	(13		)	257
Other exit costs	39			84
Total	26			341
Nonoperating expense^(a)	20			50
Total charges	149			856
Provision for income taxes	(30		)	(197		)
Net charges	119			659
Net impact related to equity companies and noncontrolling interests	—			(10		)
Net charges attributable to Kimberly-Clark Corporation	$	119		$	649


(a)	Represents non-cash pension settlement charges resulting from restructuring actions.

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 restructuring liabilities activity:



	2018
Restructuring liabilities at January 1	$	—
Charges for workforce reductions and other cash exit costs	512
Cash payments	(229		)
Currency and other	(20		)
Restructuring liabilities at September 30	$	263

As of September 30, 2018, restructuring liabilities of $138 are recorded in Accrued expenses and $125 are recorded in Other Liabilities. The impact related to restructuring charges is recorded in Operating working capital and Other Operating Activities, as appropriate, in our consolidated cash flow statement.