Kimberly-Clark 2007 Annual Report Download - page 70

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KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the noncash charges:
Year Ended December 31
2007 2006 2005
(Millions of dollars)
Incremental depreciation and amortization ................................... $ 65.7 $207.7 $ 80.1
Asset impairments ...................................................... —3.4 67.2
Asset write-offs ........................................................ 9.5 51.8 32.4
Net (gain) loss on asset dispositions ........................................ (15.2) 1.9 —
Total noncash charges ................................................... $ 60.0 $264.8 $179.7
The following summarizes the cash charges recorded and reconciles such charges to accrued expenses at
December 31:
2007 2006 2005
(Millions of dollars)
Accrued expenses—beginning of year ..................................... $ 111.2 $ 28.2 $ —
Charges for workforce reductions ........................................ 8.8 161.9 35.6
Other cash charges .................................................... 29.9 44.6 11.0
Cash payments ....................................................... (103.7) (128.4) (17.7)
Currency ............................................................ 7.6 4.9 (.7)
Accrued expenses—end of year .......................................... $ 53.8 $ 111.2 $ 28.2
Termination benefits related to workforce reductions were accrued in accordance with the requirements of
SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities (“SFAS 146”), SFAS No. 112,
Employers’ Accounting for Postemployment Benefits, and SFAS No. 88, Employers’ Accounting for
Settlements & Curtailments of Defined Benefit Pension Plans and for Termination Benefits, as appropriate.
Retention bonuses related to workforce reductions were accrued in accordance with SFAS 146. The majority of
the termination benefits and retention bonuses will be paid within 12 months of accrual. The termination benefits
were provided under: a special-benefit arrangement for affected employees in the U.S.; standard benefit practices
in the United Kingdom (“U.K.”); applicable union agreements; or local statutory requirements, as appropriate.
Incremental depreciation and amortization expenses were based on changes in useful lives and estimated residual
values of assets that are continuing to be used, but will be removed from service before the end of their originally
assumed service period. Asset impairment charges have been recorded in accordance with SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets, to reduce the carrying amount of long-lived
assets that will be sold or disposed of to their estimated fair values. Charges for asset write-offs reduce the
carrying amount of long-lived assets to their estimated salvage value in connection with the decision to dispose
of such assets.
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