3M 2015 Annual Report Download - page 94
Download and view the complete annual report
Please find page 94 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
InNovember2013,3MissuedaEurobondduein2021forafaceamountof600millionEuros.Upondebtissuance,3Mcompleteda
fixed-to-floatinginterestrateswaponanotionalamountof300millionEurosasafairvaluehedgeofaportionofthefixedinterest
rateEurobondobligation.
InJune2014,3Missued$950millionaggregateprincipalamountofmedium-termnotes.Upondebtissuance,theCompanyentered
intoaninterestrateswaptoconvert$600millionofa$625millionnoteincludedinthisissuancetoaninterestratebasedona
floatingthree-monthLIBORindexasafairvaluehedgeofaportionofthefixedinterestratemedium-termnoteobligation.
InAugust2015,3Missued$1.500billionaggregateprincipalamountofmedium-termnotes.Upondebtissuance,theCompany
enteredintotwointerestrateswapsasfairvaluehedgesofaportionofthefixedinterestratemedium-termnoteobligation.Thefirst
converteda$450millionthree-yearfixedratenote,andthesecondconverted$300millionofafive-yearfixedratenoteincludedin
thisissuancetoaninterestratebasedonafloatingthree-monthLIBORindex.
Thelocationintheconsolidatedstatementsofincomeandamountsofgainsandlossesrelatedtoderivativeinstrumentsdesignatedas
fairvaluehedgesandsimilarinformationrelativetothehedgeditemsareasfollows:
YearendedDecember31,2015 Gain(Loss)onDerivative Gain(Loss)onHedgedItem
(Millions) RecognizedinIncome RecognizedinIncome
DerivativesinFairValueHedgingRelationships Location Amount Location Amount
Interestrateswapcontracts Interestexpense $(2) Interestexpense $ 2
Total $(2) $ 2
YearendedDecember31,2014 Gain(Loss)onDerivative Gain(Loss)onHedgedItem
(Millions) RecognizedinIncome RecognizedinIncome
DerivativesinFairValueHedgingRelationships Location Amount Location Amount
Interestrateswapcontracts Interestexpense $ 11 Interestexpense $(11)
Total $ 11 $(11)
YearendedDecember31,2013 Gain(Loss)onDerivative Gain(Loss)onHedgedItem
(Millions) RecognizedinIncome RecognizedinIncome
DerivativesinFairValueHedgingRelationships Location Amount Location Amount
Interestrateswapcontracts Interestexpense $(21) Interestexpense $ 21
Total $(21) $ 21
NetInvestmentHedges:
TheCompanymayusenon-derivative(foreigncurrencydenominateddebt)andderivative(foreignexchangeforwardcontracts)
instrumentstohedgeportionsoftheCompany’sinvestmentinforeignsubsidiariesandmanageforeignexchangerisk.For
instrumentsthataredesignatedandqualifyashedgesofnetinvestmentsinforeignoperationsandthatmeettheeffectiveness
requirements,thenetgainsorlossesattributabletochangesinspotexchangeratesarerecordedincumulativetranslationwithinother
comprehensiveincome.Theremainderofthechangeinvalueofsuchinstrumentsisrecordedinearnings.Recognitioninearningsof
amountspreviouslyrecordedincumulativetranslationislimitedtocircumstancessuchascompleteorsubstantiallycomplete
liquidationofthenetinvestmentinthehedgedforeignoperation.Totheextentforeigncurrencydenominateddebtisnotdesignated
inorisdedesignatedfromanetinvestmenthedgerelationship,changesinvalueofthatportionofforeigncurrencydenominateddebt
duetoexchangeratechangesarerecordedinearningsthroughtheirmaturitydate.
3M’suseofforeignexchangeforwardcontractsdesignatedinhedgesoftheCompany’snetinvestmentinforeignsubsidiariescan
varybytimeperioddependingonwhenforeigncurrencydenominateddebtbalancesdesignatedinsuchrelationshipsare
dedesignated,matured,orarenewlyissuedanddesignated.Additionally,variationcanoccurinconnectionwiththeextentofthe
Company’sdesiredforeignexchangeriskcoverage.
AtDecember31,2015,thetotalnotionalamountofforeignexchangeforwardcontractsdesignatedinnetinvestmenthedgeswas
approximately974millionEurosandapproximately248billionSouthKoreanWon,alongwithaprincipal
94