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OffsettingofFinancialLiabilitiesunderMasterNettingAgreementswithDerivativeCounterparties
December31,2015 GrossAmountsnotOffsetinthe
ConsolidatedBalanceSheetthatareSubject
GrossAmountof toMasterNettingAgreements
DerivativeLiabilities GrossAmountof
Presentedinthe EligibleOffsetting
Consolidated Recognized CashCollateral NetAmountof
(Millions) BalanceSheet DerivativeAssets Pledged DerivativeLiabilities
Derivativessubjecttomasternetting
agreements $ 64 $ 37 $ — $ 27
Derivativesnotsubjecttomaster
nettingagreements 5 5
Total $ 69 $ 32
December31,2014 GrossAmountsnotOffsetinthe
ConsolidatedBalanceSheetthatareSubject
GrossAmountof toMasterNettingAgreements
DerivativeLiabilities GrossAmountof
Presentedinthe EligibleOffsetting
Consolidated Recognized CashCollateral NetAmountof
(Millions) BalanceSheet DerivativeAssets Pledged DerivativeLiabilities
Derivativessubjecttomasternetting
agreements $ 36 $ 20 $ — $ 16
Derivativesnotsubjecttomaster
nettingagreements 7 7
Total $ 43 $ 23
ForeignCurrencyEffects
3Mestimatesthatyear-on-yearforeigncurrencytransactioneffects,includinghedgingimpacts,increasedpre-taxincomeby
approximately$180millionand$10millionin2015and2014,respectively.Theseestimatesincludetransactiongainsandlosses,
includingderivativeinstrumentsdesignedtoreduceforeigncurrencyexchangeraterisksandthenegativeimpactofswapping
VenezuelanbolivarsintoU.S.dollars.
NOTE13.FairValueMeasurements
3MfollowsASC820,FairValueMeasurementsandDisclosures,withrespecttoassetsandliabilitiesthataremeasuredatfairvalue
onarecurringbasisandnonrecurringbasis.Underthestandard,fairvalueisdefinedastheexitprice,ortheamountthatwouldbe
receivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsasofthemeasurement
date.Thestandardalsoestablishesahierarchyforinputsusedinmeasuringfairvaluethatmaximizestheuseofobservableinputs
andminimizestheuseofunobservableinputsbyrequiringthatthemostobservableinputsbeusedwhenavailable.Observableinputs
areinputsmarketparticipantswoulduseinvaluingtheassetorliabilitydevelopedbasedonmarketdataobtainedfromsources
independentoftheCompany.UnobservableinputsareinputsthatreflecttheCompany’sassumptionsaboutthefactorsmarket
participantswoulduseinvaluingtheassetorliabilitydevelopedbaseduponthebestinformationavailableinthecircumstances.The
hierarchyisbrokendownintothreelevels.Level1inputsarequotedprices(unadjusted)inactivemarketsforidenticalassetsor
liabilities.Level2inputsincludequotedpricesforsimilarassetsorliabilitiesinactivemarkets,quotedpricesforidenticalorsimilar
assetsorliabilitiesinmarketsthatarenotactive,andinputs(otherthanquotedprices)thatareobservablefortheassetorliability,
eitherdirectlyorindirectly.Level3inputsareunobservableinputsfortheassetorliability.Categorizationwithinthevaluation
hierarchyisbaseduponthelowestlevelofinputthatissignificanttothefairvaluemeasurement.
AssetsandLiabilitiesthatareMeasuredatFairValueonaRecurringBasis:
For3M,assetsandliabilitiesthataremeasuredatfairvalueonarecurringbasisprimarilyrelatetoavailable-for-salemarketable
securities,available-for-saleinvestments(includedaspartofinvestmentsintheConsolidatedBalanceSheet)andcertainderivative
instruments.Derivativesincludecashflowhedges,interestrateswapsandmostnetinvestmenthedges.Theinformationinthe
followingparagraphsandtablesprimarilyaddressesmattersrelativetothesefinancialassetsandliabilities.Separately,therewereno
materialfairvaluemeasurementswithrespecttononfinancialassetsor
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