Kimberly-Clark 2015 Annual Report Download - page 43

Chargeswererecordedinthefollowingincomestatementlineitems:

Year Ended December 31

2015

2014
Costofproductssold $ 23

$ 40
Marketing,researchandgeneralexpenses 40

93
Provisionforincometaxes (21)

(38)
Netcharges $ 42

$ 95
Cashpaymentsof$86weremadeduring2015relatedtotherestructuring.Cashpaymentsin2014werenotmaterial.
Note 3 . Spin-Off of Health Care Business and Related Costs
OnOctober31,2014,wecompletedthespin-offofourhealthcarebusiness,andeachofourshareholdersofrecordasofthecloseofbusinessonOctober23,2014
(the "Record Date") received one share of Halyard common stock for every 8shares of our common stock held as of the Record Date. The distribution was
structuredtobetaxfreetoourU.S.shareholdersforU.S.federalincometaxpurposes.Afterthedistribution,wedonotbeneficiallyownanysharesofHalyard
commonstock.
Theresultsofthehealthcarediscontinuedoperationsexcludecertaincorporatecostswhichwereallocatedtothehealthcaresegmenthistoricallyandweexpectto
continuetoincurthesecostsafterthespin-off.Theseincludecostsrelatedtosupplychain,finance,legal,informationtechnology,humanresources,compliance,
sharedservices,insurance,employeebenefitsandincentives,andstock-basedcompensation.Onapre-taxbasis,thesecostswere$70forthetenmonthsended
October31,2014and$85in2013.
To evaluate, plan and execute the spin-off, weincurred $157of pre-tax charges ( $138after tax) in transaction and related costs, including the exit of one of
Halyard'shealthcareglovemanufacturingfacilitiesinThailandandoutsourcingoftherelatedproduction.Thesechargesandtherelatedtaximpactarerecordedin
Incomefromdiscontinuedoperations,netofincometaxes.
Inordertoimplementthespin-off,weenteredintocertainagreementswithHalyardtoeffectourlegalandstructuralseparation;governtherelationshipbetween
us;andallocatevariousassets,liabilitiesandobligationsbetweenus,including,amongotherthings,employeebenefits,intellectualpropertyandtax-relatedassets
andliabilities.WealsoenteredintoatransitionservicesagreementwithHalyard,wherebyweprovidedcertainadministrativeandotherservicesforalimitedtime,
a tax matters agreement, an employee matters agreement, intellectual property agreements, manufacturing and supply agreements, distribution agreements and
non-competitionagreements.
Note 4 . European Strategic Changes
In2012,weapproved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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affectedourconsumerbusinesses,withamodestimpactonK
- CProfessional("KCP").Therestructuringactionscommencedin2012andwere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 streamlining of our
administrativeorganization.Aftertax chargesof$30and$66wereincurredinconnectionwiththeEuropeanstrategicchangesin2014and2013,respectively.
Cumulativepre-taxchargesbetween2012and2014forthesestrategicchangeswere$413($338aftertax).Cashpaymentsof$41and$156weremadeduring
2014and2013,respectively,relatedtotherestructuring.
Note 5 . Fair Value Information
Thefollowing fairvalueinformation isbased onafair valuehierarchy thatprioritizes theinputsto valuationtechniques usedtomeasure fairvalue. Thethree
levelsinthehierarchyusedtomeasurefairvalueare:
Level1—Unadjustedquotedpricesinactivemarketsaccessibleatthereportingdateforidenticalassetsandliabilities.
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39 KIMBERLY-CLARKCORPORATION - 2015 Annual Report