Kimberly-Clark 2010 Annual Report Download - page 81

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 19. Subsequent Events
On January 21, 2011, we initiated a pulp and tissue restructuring plan in order to exit our remaining
integrated pulp manufacturing operations and improve the underlying profitability and return on invested capital
of our consumer tissue and K-C Professional businesses. The restructuring is expected to be completed by the
end of 2012 and will involve the streamlining, sale or closure of 5 to 6 of our manufacturing facilities around the
world. In conjunction with these actions, we will be exiting certain non-strategic products, primarily non-branded
offerings, and transferring some production to lower-cost facilities in order to improve overall profitability and
returns. Facilities that will be impacted by the restructuring include our pulp and tissue facility in Everett,
Washington and the two facilities in Australia that manufacture pulp and tissue.
The restructuring plan will commence in the first quarter of 2011 and is expected to be completed by
December 31, 2012. The restructuring is expected to result in cumulative charges of approximately $400 million
to $600 million before tax ($280 million to $420 million after tax) over that period. We anticipate that the
charges will fall into the following categories and approximate dollar ranges: workforce reduction costs ($50
million to $100 million); incremental depreciation ($300 million to $400 million); and other associated costs
($50 million to $100 million). Cash costs related to the streamlining of operations, sale or closure, relocation of
equipment, severance and other expenses are expected to account for approximately 25 percent to 50 percent of
the charges. Noncash charges will consist primarily of incremental depreciation.
As a result of the restructuring, we expect that by 2013 annual net sales will be reduced by $250 million to
$300 million and operating profit will increase by at least $75 million. Most of the restructuring will impact the
consumer tissue business segment.
Note 20. Business Segment and Geographic Data Information
We are organized into operating segments based on product groupings. These operating segments have been
aggregated into four reportable global business segments: Personal Care, Consumer Tissue, K-C Professional &
Other, and Health Care. The reportable segments were determined in accordance with how our executive
managers develop and execute global strategies to drive growth and profitability. These strategies include global
plans for branding and product positioning, technology, research and development programs, cost reductions
including supply chain management, and capacity and capital investments for each of these businesses. Segment
management is evaluated on several factors, including operating profit. Segment operating profit excludes other
(income) and expense, net; income and expense not associated with the business segments; and the costs of
corporate decisions related to the strategic cost reductions described in Note 6. Corporate & Other Assets include
our investments in equity affiliates, finance operations and real estate entities, and deferred tax assets. The
accounting policies of the reportable segments are the same as those described in Note 1.
The principal sources of revenue in each global business segment are described below:
• The Personal Care segment manufactures and markets disposable diapers, training and youth pants,
swimpants, baby wipes, feminine and incontinence care products, and related products. Products in this
segment are primarily for household use and are sold under a variety of brand names, including
Huggies, Pull-Ups, Little Swimmers, GoodNites, Kotex, Lightdays, Depend, Poise and other brand
names.
• The Consumer Tissue segment manufactures and markets facial and bathroom tissue, paper towels,
napkins and related products for household use. Products in this segment are sold under the Kleenex,
Scott, Cottonelle, Viva, Andrex, Scottex, Hakle, Page and other brand names.
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