3M 2015 Annual Report Download - page 56
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Please find page 56 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.TableofContents
December31,2015,theCompanyhadabalanceofnetmonetaryliabilitiesdenominatedinVEFoflessthan500millionVEFand
theCENCOEX,SICAD(formerlySICAD1),andSIMADIexchangerateswereapproximately6VEF,13VEF,and200VEFper
U.S.dollar,respectively.
AneedtodeconsolidatetheCompany’sVenezuelansubsidiary’soperationsmayresultfromalackofexchangeabilityofVEF-
denominatedcashcoupledwithanacutedegradationintheabilitytomakekeyoperationaldecisionsduetogovernmentregulations
inVenezuela.3Mmonitorsfactorssuchasitsabilitytoaccessvariousexchangemechanisms;theimpactofgovernmentregulations
ontheCompany’sabilitytomanageitsVenezuelansubsidiary’scapitalstructure,purchasing,productpricing,andlaborrelations;
andthecurrentpoliticalandeconomicsituationwithinVenezuela.BaseduponsuchfactorsasofDecember31,2015,theCompany
continuestoconsolidateitsVenezuelansubsidiary.AsofDecember31,2015,thebalanceofintercompanyreceivablesduefromthis
subsidiaryanditsequitybalancearenotsignificant.
Reclassifications:Certainamountsintheprioryears’consolidatedfinancialstatementshavebeenreclassifiedtoconformtothe
currentyearpresentation.
Useofestimates:ThepreparationoffinancialstatementsinconformitywithU.S.generallyacceptedaccountingprinciplesrequires
managementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesandthedisclosureof
contingentassetsandliabilitiesatthedateofthefinancialstatements,andthereportedamountsofrevenuesandexpensesduringthe
reportingperiod.Actualresultscoulddifferfromtheseestimates.
Cashandcashequivalents:Cashandcashequivalentsconsistofcashandtemporaryinvestmentswithmaturitiesofthreemonthsor
lesswhenacquired.
Marketablesecurities:EffectiveDecember31,2015,theCompanychangedthemethodofclassificationofcertainsecurities
previouslyclassifiedasnon-currenttocurrent.Thisnewmethodclassifiesthesesecuritiesascurrentornon-currentbasedonthe
natureofthesecuritiesandavailabilityforuseincurrentoperationswhilethepriorclassificationwasbasedonmanagement’s
intendedholdingperiod,thesecurity’smaturitydateandliquidityconsiderationsbasedonmarketconditions.TheCompanybelieves
thismethodispreferablebecauseitisconsistentwithhowtheCompanymanagesitscapitalstructureandliquidity.Thepriorperiod
balancehasbeenreclassifiedtoconformtothecurrentyearpresentation:
December31,2014
(Millions) PreviouslyReported Impact AsAdjusted
Marketablesecurities-current $ 626 $ 813 $ 1,439
Marketablesecurities-non-current 828 (813) 15
Totalmarketablesecurities $ 1,454 $ — $ 1,454
3MreviewsimpairmentsassociatedwithitsmarketablesecuritiesinaccordancewiththemeasurementguidanceprovidedbyASC
320,Investments-DebtandEquitySecurities,whendeterminingtheclassificationoftheimpairmentas“temporary”or“other-than-
temporary”.Atemporaryimpairmentchargeresultsinanunrealizedlossbeingrecordedintheothercomprehensiveincome
componentofshareholders’equity.Suchanunrealizedlossdoesnotreducenetincomefortheapplicableaccountingperiodbecause
thelossisnotviewedasother-than-temporary.Thefactorsevaluatedtodifferentiatebetweentemporaryandother-than-temporary
includetheprojectedfuturecashflows,creditratingsactions,andassessmentofthecreditqualityoftheunderlyingcollateral,as
wellasotherfactors.
Investments:Investmentsprimarilyincludeequitymethod,costmethod,andavailable-for-saleequityinvestments.Available-for-sale
investmentsarerecordedatfairvalue.Unrealizedgainsandlossesrelatingtoinvestmentsclassifiedasavailable-for-saleare
recordedasacomponentofaccumulatedothercomprehensiveincome(loss)inshareholders’equity.
Otherassets:Otherassetsincludedeferredincometaxes,productandotherinsurancereceivables,thecashsurrendervalueoflife
insurancepolicies,andotherlong-termassets.Investmentsinlifeinsurancearereportedattheamountthatcouldberealizedunder
contractatthebalancesheetdate,withanychangesincashsurrendervalueorcontractvalueduringtheperiodaccountedforasan
adjustmentofpremiumspaid.Cashoutflowsandinflowsassociatedwithlife
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