Our Global Business Plan (GBP) contains a number of important measures to ensure we remain competitive, support our growth and build on our success. We are transforming K-C into a leaner, more focused company. Each business has set its own priorities for change to meet the growth and change objectives of the GBP.

In some areas, we are adjusting staffing levels through reductions, people leaving the company voluntarily and transferring employees to different jobs. Reductions are taking place through a combination of selling and closing facilities, outsourcing portions of some functions, and organizational changes. Our priority is to carry out these changes responsibly and in line with our values to achieve a smooth transition for our businesses and for affected employees.

We are reviewing the way we provide our Business Support functions to help us become a more effective organization. Business Support Delivery is about doing the right work in the best way and in the best place. This is more than outsourcing – other strategies include making use of the best talent from around the world and process improvements.

We made good progress in 2007. We transferred many of our major support service processes to partner organizations and established a new governance framework to manage service delivery.

The five Business Service Delivery partners we have outsourced functions to are:

• Accenture – human resources
• Cognizant – IT applications
• Genpact – finance and accounting
• TCS – IT infrastructure
• IGC Commerce - Sourcing and Supply Management

By the end of 2008, management anticipates that there will be a net workforce reduction of about 10 percent, or 6,000 workers, since 2005 and that approximately 24 facilities worldwide will be sold, closed or streamlined.