Kimberly-Clark 2015 Annual Report Download - page 56

Note 11 . Leases and Commitments
Wehaveenteredintooperatingleasesforcertainwarehousefacilities,automobilesandequipment.Thefutureminimumobligationsunderoperatingleaseshaving
anoncancelableterminexcessofoneyearareasfollows:

Year Ending December 31
2016 $ 142
2017 115
2018 86
2019 67
2020 53
Thereafter 82
Futureminimumobligations $ 545
Consolidatedrentalexpenseunderoperatingleaseswas$279,$303and$316in2015,2014and2013,respectively.
Wehaveentered intolong-term contractsforthe purchaseofsuperabsorbent materials,pulp andcertainutilities. Commitmentsunderthese contractsbasedon
currentpricesare$698in2016,$170in2017,$139in2018,$144in2019,$156in2020,andbeyondtheyear2020arenotsignificant.
Althoughweareprimarilyliableforpaymentsontheabove-mentionedleasesandpurchasecommitments,ourexposuretolosses,ifany,underthesearrangements
isnotmaterial.
Note 12 . Legal Matters
Wearesubjecttovariouslegalproceedings,claimsandgovernmentalinquiries,inspections,auditsorinvestigationspertainingtoissuessuchascontractdisputes,
productliability,taxmatters,patentsandtrademarks,advertising,pricing,businesspractices,governmentalregulations,employmentandothermatters.Although
theresultsoflitigationandclaimscannotbepredictedwithcertainty,webelievethattheultimatedispositionofthesematters,totheextentnotpreviouslyprovided
for,willnothaveamaterialadverseeffect,individuallyorintheaggregate,onourbusiness,financialcondition,resultsofoperationsorliquidity.
Wearesubjecttofederal,stateandlocalenvironmentalprotectionlawsandregulationswithrespecttoourbusinessoperationsandareoperatingincompliance
with,ortakingactionaimedatensuringcompliancewith,theselawsandregulations.Wehavebeennamedapotentiallyresponsiblepartyundertheprovisionsof
the U.S. federal Comprehensive Environmental Response, Compensation and Liability Act, or analogous state statutes, at a number of sites where hazardous
substancesarepresent.Noneofourcomplianceobligations withenvironmentalprotectionlawsandregulations,individuallyorintheaggregate,isexpectedto
haveamaterialadverseeffectonourbusiness,liquidity,financialconditionorresultsofoperations.
Note 13 . Objectives and Strategies for Using Derivatives
As a multinational enterprise, we are exposedto financial risks, such as changes inforeign currency exchange rates, interest rates, and commodity prices.We
employanumberofpractices tomanagetheserisks,includingoperating andfinancingactivitiesand,where appropriate,theuseofderivativeinstruments. We
enterintoderivativeinstrumentstohedgeaportionofforecastedcashflowsdenominatedinforeigncurrenciesfornon-U.S.operations'purchasesofrawmaterials,
whicharepricedinU.S.dollars,andimportsofintercompanyfinishedgoodsandwork-in-processpricedpredominantlyinU.S.dollarsandeuros.Thederivative
instrumentsusedtomanage theseexposuresaredesignatedandqualify ascashflowhedges.Theforeign currencyexposureoncertainnon-functional currency
denominatedmonetaryassetsandliabilities,primarilyintercompanyloansandaccountspayable,ishedgedwithprimarilyundesignatedderivativeinstruments.
Interestrateriskismanagedusingaportfolioofvariableandfixed-ratedebtcomposedofshortandlong-terminstruments.Interestrateswapcontractsmaybe
usedtofacilitatethemaintenanceofthedesiredratioofvariableandfixed-ratedebtandaredesignatedandqualifyasfairvaluehedges.Fromtimetotime,wealso
hedgetheanticipatedissuanceoffixed-ratedebt,usingforward-startingswaps,andthesecontractsaredesignatedascashflowhedges.
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52 KIMBERLY-CLARKCORPORATION - 2015 Annual Report