Kimberly-Clark 2007 Annual Report Download - page 48

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PART II
(Continued)
Cash Flow Commentary:
Cash provided by operations decreased $150.6 million in 2007 compared with 2006. Included in 2006 was a
special dividend of $123 million from KCM, and the balance of the decrease was primarily due to a higher
investment in working capital.
Contractual Obligations:
The following table presents the Corporation’s total contractual obligations for which cash flows are fixed
or determinable.
Total 2008 2009 2010 2011 2012 2013+
(Millions of dollars)
Contractual obligations
Long-term debt ........................ $ 4,635 $ 241 $ 70 $ 488 $ 9 $405 $3,422
Interest payments on long-term debt ....... 3,099 263 251 236 220 220 1,909
Operating leases ....................... 577 126 102 79 65 52 153
Unconditional purchase obligations ........ 2,351 721 599 511 123 109 288
Open purchase orders ................... 1,420 1,420 — — — — —
Total contractual obligations ................. $12,082 $2,771 $1,022 $1,314 $417 $786 $5,772
Obligations Commentary:
• Projected interest payments for variable-rate debt were calculated based on the outstanding principal
amounts and prevailing market rates as of December 31, 2007.
• The unconditional purchase obligations are for the purchase of raw materials, primarily pulp and
utilities. Although the Corporation is primarily liable for payments on the above operating leases and
unconditional purchase obligations, based on historic operating performance and forecasted future cash
flows, management believes the Corporation’s exposure to losses, if any, under these arrangements is
not material.
• The open purchase orders displayed in the table represent amounts the Corporation anticipates will
become payable within the next year for goods and services it has negotiated for delivery.
The above table does not include future payments that the Corporation will make for other postretirement
benefit obligations. Those amounts are estimated using actuarial assumptions, including expected future service, to
project the future obligations. Based upon those projections, the Corporation anticipates making annual payments
for these obligations within a range from more than $85 million in 2008 to more than $100 million by 2017.
As of December 31, 2007, the Corporation has accrued income tax liabilities for uncertain tax positions.
These liabilities have not been presented in the table above due to uncertainty as to amounts and timing regarding
future payments.
Deferred taxes, minority owners’ interests and payments related to pension plans are also not included in the
table.
A consolidated financing subsidiary has issued two classes of redeemable preferred securities. The holder of
the securities can elect to have the subsidiary redeem the first class in December 2011 and the second class in
December 2014 and each 7-year anniversary thereafter. Management currently anticipates that these securities
28