2018 Global Restructuring Program

12 Months Ended

Dec. 31, 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 all of our business segments and our organizations in all major geographies. Workforce reductions are now expected to be in the range of 6,300 to 6,400.

The restructuring is expected to be completed in 2021, with total costs now anticipated to be in the range of $2.0 billion to $2.1 billion pre-tax ($1.5 billion to $1.6 billion after tax). Cash costs are expected to be $1.1 billion to $1.15 billion, primarily related to workforce reductions. Non-cash charges are expected to be $900 to $950 pre-tax and will primarily consist of incremental depreciation, asset write-offs and pension settlement and curtailment charges. Restructuring charges in 2021 are expected to be $180 to $280 pre-tax ($135 to $215 after tax).

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


	Year Ended December 31
	2020		2019		2018
Cost of products sold:
Charges for workforce reductions	$	10	$	31	$	149
Asset impairments	17		—		74
Asset write-offs	63		54		112
Incremental depreciation	94		235		172
Other exit costs	99		96		34
Total	283		416		541
Marketing, research and general expenses:
Charges for workforce reductions	13		(12)		243
Other exit costs	96		111		137
Total	109		99		380
Other (income) and expense, net(a)	(9)		(194)		(12)
Nonoperating expense(b)	36		45		127
Total charges	419		366		1,036
Provision for income taxes	(94)		(118)		(243)
Net charges	325		248		793
Net impact related to equity companies and noncontrolling interests	(2)		—		(10)
Net charges attributable to Kimberly-Clark Corporation	$	323	$	248	$	783

(a)Other (income) and expense, net in 2019 was the result of pre-tax gains on the sales of manufacturing facilities and associated real estate which were disposed of as part of the restructuring.

(b)Represents non-cash pension settlement and curtailment charges resulting from restructuring actions, primarily in the U.S., United Kingdom and Canada.

The measurement of the asset impairment charges was based on the excess of the carrying values 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 or the expected sales value, and as a result, the assets were essentially written off or written down to fair value less costs to sell. The use of discounted cash flows represents a level 3 measure under the fair value hierarchy.

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	210		221
Cash payments	(249)		(302)
Currency and other	—		3
Restructuring liabilities at December 31	$	93	$	132

As of December 31, 2020 and 2019, restructuring liabilities of $73 and $93 are recorded in Accrued expenses and other current liabilities and $20 and $39 are recorded in Other Liabilities, respectively. The impact related to restructuring charges is recorded in Operating working capital and Other Operating Activities, as appropriate, in our consolidated cash flow statement.

Through December 31, 2020, cumulative pre-tax charges for the 2018 Global Restructuring Program were $1.8 billion ($1.4 billion after tax).