3M 2015 Annual Report Download - page 98

Download and view the complete annual report

Please find page 98 of the 2015 3M annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 158

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158

TableofContents
OffsettingofFinancialLiabilitiesunderMasterNettingAgreementswithDerivativeCounterparties
December31,2015   GrossAmountsnotOffsetinthe  
  ConsolidatedBalanceSheetthatareSubject  
GrossAmountof toMasterNettingAgreements  
 DerivativeLiabilities  GrossAmountof  
Presentedinthe EligibleOffsetting  
Consolidated Recognized CashCollateral NetAmountof
(Millions) BalanceSheet DerivativeAssets Pledged DerivativeLiabilities 
Derivativessubjecttomasternetting
agreements $ 64 $ 37 $ — $ 27
Derivativesnotsubjecttomaster
nettingagreements 5    5
Total $ 69   $ 32
December31,2014   GrossAmountsnotOffsetinthe  
  ConsolidatedBalanceSheetthatareSubject  
GrossAmountof toMasterNettingAgreements  
 DerivativeLiabilities  GrossAmountof  
Presentedinthe EligibleOffsetting  
Consolidated Recognized CashCollateral NetAmountof
(Millions) BalanceSheet DerivativeAssets Pledged DerivativeLiabilities 
Derivativessubjecttomasternetting
agreements $ 36 $ 20 $ — $ 16
Derivativesnotsubjecttomaster
nettingagreements 7    7
Total $ 43   $ 23
ForeignCurrencyEffects
3Mestimatesthatyear-on-yearforeigncurrencytransactioneffects,includinghedgingimpacts,increasedpre-taxincomeby
approximately$180millionand$10millionin2015and2014,respectively.Theseestimatesincludetransactiongainsandlosses,
includingderivativeinstrumentsdesignedtoreduceforeigncurrencyexchangeraterisksandthenegativeimpactofswapping
VenezuelanbolivarsintoU.S.dollars.
NOTE13.FairValueMeasurements
3MfollowsASC820,FairValueMeasurementsandDisclosures,withrespecttoassetsandliabilitiesthataremeasuredatfairvalue
onarecurringbasisandnonrecurringbasis.Underthestandard,fairvalueisdefinedastheexitprice,ortheamountthatwouldbe
receivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsasofthemeasurement
date.Thestandardalsoestablishesahierarchyforinputsusedinmeasuringfairvaluethatmaximizestheuseofobservableinputs
andminimizestheuseofunobservableinputsbyrequiringthatthemostobservableinputsbeusedwhenavailable.Observableinputs
areinputsmarketparticipantswoulduseinvaluingtheassetorliabilitydevelopedbasedonmarketdataobtainedfromsources
independentoftheCompany.UnobservableinputsareinputsthatreflecttheCompany’sassumptionsaboutthefactorsmarket
participantswoulduseinvaluingtheassetorliabilitydevelopedbaseduponthebestinformationavailableinthecircumstances.The
hierarchyisbrokendownintothreelevels.Level1inputsarequotedprices(unadjusted)inactivemarketsforidenticalassetsor
liabilities.Level2inputsincludequotedpricesforsimilarassetsorliabilitiesinactivemarkets,quotedpricesforidenticalorsimilar
assetsorliabilitiesinmarketsthatarenotactive,andinputs(otherthanquotedprices)thatareobservablefortheassetorliability,
eitherdirectlyorindirectly.Level3inputsareunobservableinputsfortheassetorliability.Categorizationwithinthevaluation
hierarchyisbaseduponthelowestlevelofinputthatissignificanttothefairvaluemeasurement.
AssetsandLiabilitiesthatareMeasuredatFairValueonaRecurringBasis:
For3M,assetsandliabilitiesthataremeasuredatfairvalueonarecurringbasisprimarilyrelatetoavailable-for-salemarketable
securities,available-for-saleinvestments(includedaspartofinvestmentsintheConsolidatedBalanceSheet)andcertainderivative
instruments.Derivativesincludecashflowhedges,interestrateswapsandmostnetinvestmenthedges.Theinformationinthe
followingparagraphsandtablesprimarilyaddressesmattersrelativetothesefinancialassetsandliabilities.Separately,therewereno
materialfairvaluemeasurementswithrespecttononfinancialassetsor
98