Kimberly-Clark 2010 Annual Report Download - page 53

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
On a geographic area basis, $84 million of the charges were recorded in North America, $35 million in
Europe, and $9 million in our international operations in Asia, Latin America, the Middle East, Eastern Europe
and Africa.
The charges were included in the following income statement captions:
Year Ended
December 31, 2009
(Millions of dollars)
Cost of products sold .......................................................... $ 44
Marketing, research and general expenses .......................................... 84
Total charges ............................................................ 128
Provision for income taxes ...................................................... (37)
Net charges .............................................................. $ 91
Note 6. Strategic Cost Reduction Plan
In July 2005, we authorized a multi-year plan to further improve our competitive position by accelerating
investments in targeted growth opportunities and strategic cost reductions aimed at streamlining manufacturing
and administrative operations, primarily in North America and Europe. The strategic cost reductions commenced
in the third quarter of 2005 and were completed by December 31, 2008 at a cumulative charge of $880 million
before tax or $610 million after tax. Total pretax charges for the strategic cost reduction plan were $60 million
for the year ended December 31, 2008.
Note 7. Acquisitions and Intangible Assets
Acquisitions
During 2009, we acquired the remaining 31 percent interest in our Andean region subsidiary, Colombiana
Kimberly Colpapel S.A. (“CKC”), for $289 million. The acquisition was recorded as an equity transaction that
reduced noncontrolling interests, accumulated other comprehensive income (“AOCI”) and additional paid-in
capital classified in stockholders’ equity by $278 million and increased investments in equity companies by $11
million.
During 2009, we acquired Jackson Products, Inc. (“Jackson”), a privately-held safety products company, for
$155 million, net of cash acquired. The acquisition is consistent with our global business plan strategy to
accelerate growth of high-margin workplace products sold by our K-C Professional business. The excess of the
purchase price over the fair values of assets and liabilities acquired resulted in recognition of goodwill of
$95 million, none of which is deductible for income tax purposes. Jackson’s net sales were 3 percent of the K-C
Professional & Other business segment net sales in 2009.
During 2009, we acquired Baylis Medical Company’s pain management business (“Baylis”). Our Health
Care business has been the exclusive distributor of these pain management products in the U.S. since 2001. The
excess of the purchase price over the fair values of assets and liabilities acquired resulted in recognition of
goodwill of $19 million, the majority of which is deductible for income tax purposes.
During 2009, we acquired I-Flow Corporation (“I-Flow”), a healthcare company that develops and markets
drug delivery systems and products for post-surgical pain relief and surgical site care, for $262 million, net of
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