2018 Global Restructuring Program

9 Months Ended

Sep. 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 September 30						Nine Months Ended September 30
	2020		2019		2020		2019
Cost of products sold:
Charges for workforce reductions	$	15	$	1	$	16	$	33

Asset write-offs	50		18		59		45
Incremental depreciation	18		57		86		189
Other exit costs	24		28		76		64
Total	107		104		237		331
Marketing, research and general expenses:
Charges (adjustments) for workforce reductions	1		(4)		(1)		(12)
Other exit costs	24		25		76		78
Total	25		21		75		66
Other (income) and expense, net	(1)		(181)		(1)		(182)
Nonoperating expense	26		—		26		—
Total charges	157		(56)		337		215
Provision for income taxes	(50)		23		(83)		(35)
Net charges	107		(33)		254		180
Net impact related to equity companies and noncontrolling interests	—		—		(1)		1
Net charges attributable to Kimberly-Clark Corporation	$	107	$	(33)	$	253	$	181

Other (income) and expense, net in 2019 includes a pre-tax gain of approximately $182 on the sale of a manufacturing facility and associated real estate which were disposed of as part of the restructuring.

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	162		159
Cash payments	(177)		(230)
Currency and other	(3)		3
Restructuring liabilities at September 30	$	114	$	142

Restructuring liabilities of $80 and $84 are recorded in Accrued expenses and other current liabilities and $34 and $58 are recorded in Other Liabilities as of September 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 September 30, 2020, cumulative pre-tax charges for the 2018 Global Restructuring Program were $1.7 billion ($1.3 billion after tax)