Kimberly-Clark 2007 Annual Report Download - page 81

KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Expected Long-Term Rate of Return and Investment Strategies for the Principal Plans
The expected long-term rate of return on pension fund assets was determined based on projected long-term
returns of broad equity and bond indices. The Corporation also considered the U.S. plan’s historical 15-year and
20-year compounded annual returns of 10.1 percent and 10.3 percent, respectively, which have been in excess of
these broad equity and bond benchmark indices. The Corporation anticipates that on average the investment
managers for each of the plans comprising the Principal Plans will generate annual long-term rates of return of at
least 8.4 percent. The Corporation’s expected long-term rate of return on the assets in the Principal Plans is based
on an asset allocation assumption of about 70 percent with equity managers, with expected long-term rates of
return of approximately 10 percent, and about 30 percent with fixed income managers, with an expected long-
term rate of return of about 6 percent. The Corporation regularly reviews its actual asset allocation and
periodically rebalances its investments to the targeted allocation when considered appropriate. The Corporation
will continue to evaluate its long-term rate of return assumptions at least annually and will adjust them as
necessary.
Plan Assets
The Corporation’s pension plan asset allocations for its Principal Plans are as follows:
Target
Allocation
2008
Percentage of Plan
Assets
at December 31
Asset Category 2007 2006
Equity securities ..................................................... 71% 69% 74%
Debt securities ....................................................... 29 31 26
Total ........................................................... 100% 100% 100%
The plan assets did not include a significant amount of the Corporation’s common stock.
Cash Flows
While the Corporation is not required to make a contribution in 2008 to the U.S. plan, the benefit of a
contribution will be evaluated. The Corporation currently anticipates contributing about $82 million to its
pension plans outside the U.S. in 2008.
Estimated Future Benefit Payments
Over the next ten years, the Corporation expects to make the following gross benefit payments and receive
related Medicare Part D reimbursements:
Pension Benefits Other Benefits
Medicare Part D
Reimbursements
(Millions of dollars)
2008 ................................................ $ 352 $ 88 $ (4)
2009 ................................................ 343 89 (4)
2010 ................................................ 345 90 (4)
2011 ................................................ 349 92 (4)
2012 ................................................ 347 92 (4)
2013 – 2017 .......................................... 1,966 519 (24)
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