Kimberly-Clark 2015 Annual Report Download - page 44

Download and view the complete annual report

Please find page 44 of the 2015 Kimberly-Clark 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 96

  • 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

Level2—Quotedpricesforsimilarassetsorliabilitiesinactivemarkets.Quotedpricesforidenticalorsimilarassetsandliabilitiesinmarketsthatarenot
consideredactiveorfinancialinstrumentsforwhichallsignificantinputsareobservable,eitherdirectlyorindirectly.
Level3—Pricesorvaluationsthatrequireinputsthataresignificanttothevaluationandareunobservable.
Afinancialinstrument'slevelwithinthefairvaluehierarchyisbasedonthelowestlevelofanyinputthatissignificanttothefairvaluemeasurement.
During2015and2014,therewerenosignificanttransfersamonglevel1,2or3fairvaluedeterminations.
Company-ownedlifeinsurance("COLI")assetsandderivativeassetsandliabilitiesaremeasuredonarecurringbasisatfairvalue.COLIassetswere$57and$58
atDecember31,2015and2014,respectively.TheCOLIpoliciesareasourceoffundingprimarilyforournonqualifiedemployeebenefitsandareincludedin
otherassets.ThefairvalueoftheCOLIpoliciesisconsideredalevel2measurementandisderivedfrominvestmentsinamixofmoneymarket,fixedincomeand
equityfundsmanagedbyunrelatedfundmanagers.AtDecember31,2015and2014,derivativeassetswere$56and$54,respectively,andderivativeliabilities
were$42and$112,respectively.ThefairvaluesofderivativesusedtomanageinterestrateriskandcommoditypriceriskarebasedonLIBORratesandinterest
rateswapcurvesandNYMEXpricequotations,respectively.Thefairvalueofhedginginstrumentsusedtomanageforeigncurrencyriskisbasedonpublished
quotationsofspotcurrencyratesandforwardpoints,whichareconvertedintoimpliedforwardcurrencyrates.Measurementofourderivativeassetsandliabilities
isconsideredalevel2measurement.AdditionalinformationonourclassificationanduseofderivativeinstrumentsiscontainedinNote13.
Thefollowingtableincludesthefairvalueofourfinancialinstrumentsforwhichdisclosureoffairvalueisrequired:
Fair Value
Hierarchy
Level
Carrying
Amount
Estimated
Fair
Value
Carrying
Amount
Estimated
Fair
Value
December 31, 2015
December 31, 2014
Assets
Cashandcashequivalents(a) 1
$ 619
$ 619
$ 789
$ 789
Timedepositsandother(b) 1
124
124
130
130
Liabilities and redeemable securities of subsidiaries
Short-termdebt(c) 2
1,071
1,071
777
777
Long-termdebt(d) 2
6,704
7,300
6,179
6,963
Redeemablepreferredsecuritiesofsubsidiaries(e) 3
64
64
72
72
(a) Cashequivalentsarecomposedofcertificatesofdeposit,timedepositsandotherinterest-bearinginvestmentswithoriginalmaturitydatesof90daysorless.Cashequivalentsarerecorded
atcost,whichapproximatesfairvalue.
(b) Timedepositsarecomposedofdepositswithoriginalmaturitiesofmorethan90daysbutlessthanoneyearandinstrumentswithoriginalmaturitiesofgreaterthanoneyear,includedin
othercurrentassetsorotherassetsintheConsolidatedBalanceSheet,asappropriate.Other,includedinothercurrentassets,iscomposedoffundsheldinescrow.Timedepositsandother
arerecordedatcost,whichapproximatesfairvalue.
(c) Short-termdebtis composedofU.S.commercial paperand/orothersimilarshort-termdebtissuedbynon-U.S. subsidiaries,allofwhicharerecordedatcost,whichapproximatesfair
value.
(d) Long-termdebtincludesthecurrentportionofthesedebtinstruments.Fairvalueswereestimatedbasedonquotedpricesforfinancialinstrumentsforwhichallsignificant inputswere
observable,eitherdirectlyorindirectly.
(e) Theredeemablepreferredsecuritiesofsubsidiariesarenottradedinactivemarkets.Forcertaininstruments,fairvalueswerecalculatedusingafloatingratepricingmodelthatcompared
thestatedspreadtothefairvaluespreadtodeterminethepriceatwhicheachofthefinancialinstrumentsshouldtrade.Themodelusedthefollowinginputstocalculatefairvalues:face
value, current LIBOR rate, unobservable fair value credit spread, stated spread, maturity date and interest or dividend payment dates. Additionally, the fair value of the remaining
redeemablesecuritieswasbasedonvariousinputs,includinganindependentthird-partyappraisal,adjustedforcurrentmarketconditions.
40 KIMBERLY-CLARKCORPORATION - 2015 Annual Report