Kimberly-Clark 2007 Annual Report Download - page 90

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KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Purchase Commitments
The Corporation has entered into long-term contracts for the purchase of pulp and utilities, principally
electricity. Commitments under these contracts are approximately $721 million in 2008, $599 million in 2009,
$511 million in 2010, $123 million in 2011 and $109 million in 2012. Total commitments beyond the year 2012
are $288 million.
Although the Corporation is primarily liable for payments on the above-mentioned leases and purchase
commitments, its exposure to losses, if any, under these arrangements is not material.
Note 13. Contingencies and Legal Matters
Litigation
The following is a brief description of certain legal and administrative proceedings to which the Corporation
or its subsidiaries is a party or to which the Corporation’s or its subsidiaries’ properties are subject. In
management’s opinion, none of the legal and administrative proceedings described below, individually or in the
aggregate, is expected to have a material adverse effect on the Corporation’s business, financial condition, results
of operations or liquidity.
Contingency
One of the Corporation’s North American tissue mills has an agreement to provide its local utility company
a specified amount of electric power for each of the next nine years. In the event that the mill was shut down, the
Corporation would be required to continue to operate the power generation facility on behalf of its owner, the
local utility company. The net present value of the cost to fulfill this agreement as of December 31, 2007 is
estimated to be approximately $109 million. Management considers the probability of closure of this mill to be
remote.
Environmental Matters
The Corporation has been named as a potentially responsible party under the provisions of the federal
Comprehensive Environmental Response, Compensation and Liability Act, or analogous state statutes, at a
number of waste disposal sites, none of which, individually or in the aggregate, in management’s opinion, is
likely to have a material adverse effect on the Corporation’s business, financial condition, results of operations or
liquidity.
In May 2007, a wholly-owned subsidiary of the Corporation was served a summons in Pennsylvania state
court by the Delaware County Regional Water Quality Authority (“Delcora”). Also in May 2007, Delcora
initiated an administrative action against the Corporation. Delcora is a public agency that operates a sewerage
system and a wastewater treatment facility serving industrial and municipal customers, including
Kimberly-Clark’s Chester Mill. Delcora also regulates the discharge of wastewater from the Chester Mill.
Delcora has alleged in the summons and the administrative action that the Corporation underreported the quantity
of effluent discharged to Delcora from the Chester Mill for several years due to an inaccurate effluent metering
device and owes additional amounts. The Corporation’s action for declaratory judgment in the Federal District
Court for the Eastern District of Pennsylvania was dismissed in December 2007. The Corporation continues to
believe that Delcora’s allegations lack merit and intends to vigorously defend against Delcora’s actions. In
management’s opinion, this matter is not expected to have a material adverse effect on the Corporation’s
business, financial condition, results of operations or liquidity.
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