Kimberly-Clark 2010 Annual Report Download - page 52

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KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
This charge was recorded in the following Consolidated Income Statement line items:
Millions of dollars
Cost of products sold ........................................................... $19
Other (income) and expense, net .................................................. 79
Provision for income taxes ....................................................... (2)
Net charge ................................................................ $96
Consistent with the first quarter of 2010, for the period April 1, 2010 through May 17, 2010, we used the
parallel exchange rate to measure our bolivar-denominated transactions into U.S. dollars. On May 18, 2010, the
Venezuelan government enacted reforms to its currency exchange regulations to close the parallel market. On
June 9, 2010, the Central Bank of Venezuela began a regulated currency exchange system (the “central bank
system”) that replaced the previous unregulated parallel market. Under the central bank system, entities
domiciled in Venezuela (e.g., K-C Venezuela) are currently limited to convert bolivars into U.S. dollars at a
volume of $50 thousand per day, up to a maximum of $350 thousand per month and receive a rate of
approximately 5.4 bolivars per U.S. dollar.
As a result of the currency exchange regulations imposed on May 18, 2010, we determined that the central
bank system rate was the appropriate exchange rate to measure K-C Venezuela’s bolivar-denominated
transactions into U.S. dollars during the period May 18, 2010 through December 31, 2010.
In this environment, we are limiting our imports of products and raw materials. Net sales of K-C Venezuela
represented only 1 percent of Consolidated Net Sales in 2010, as compared to 3 percent in 2009. In 2009 K-C
Venezuela represented 1 percent of Consolidated Operating Profit and Net Income Attributable to Kimberly-
Clark. In 2010, Operating Profit and Net Income Attributable to Kimberly-Clark at our Venezuelan subsidiary
were both negative due to the charge recorded as a result of adopting highly inflationary accounting in the first
quarter of 2010.
At December 31, 2010, our net investment in K-C Venezuela was $175 million, valued at 5.4 bolivars per
U.S. dollar.
Note 5. Organization Optimization Initiative
In June 2009, we announced actions to reduce our worldwide salaried workforce by approximately 1,600
positions by the end of 2009. These actions resulted in cumulative pretax charges of $128 million in 2009.
Costs of these actions were recorded at the business segment and corporate levels as follows:
Year Ended
December 31, 2009
(Millions of dollars)
Personal Care ................................................................ $ 47
Consumer Tissue ............................................................. 50
K-C Professional & Other ...................................................... 16
Health Care .................................................................. 6
Corporate & Other ............................................................ 9
Total ................................................................... $128
48