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Weusederivativeinstruments,suchasforwardswapcontracts,tohedgealimitedportionofourexposuretomarketriskarisingfromchangesinpricesofcertain
commodities.Thesederivativesaredesignatedascashflowhedgesofspecificquantitiesoftheunderlyingcommodityexpectedtobepurchasedinfuturemonths.
Translationadjustmentsresultfromtranslating foreignentities'financialstatementsintoU.S.dollarsfromtheirfunctionalcurrencies.Therisktoanyparticular
entity'snetassetsisreducedtotheextentthattheentityisfinancedwithlocalcurrencyborrowing.Translationexposure,whichresultsfromchangesintranslation
ratesbetweenfunctionalcurrenciesandtheU.S.dollar,generallyisnothedged.
Setforthbelowisasummaryofthedesignatedandundesignatedfairvaluesofourderivativeinstruments:
Assets
Liabilities
2015
2014
2015
2014
Foreigncurrencyexchangecontracts $ 56
$ 54
$ 27
$ 102
Commoditypricecontracts —
—
15
10
Total $ 56
$ 54
$ 42
$ 112
ThederivativeassetsareincludedintheConsolidatedBalanceSheetinothercurrentassetsandotherassets,asappropriate.Thederivativeliabilitiesareincluded
intheConsolidatedBalanceSheetinaccruedexpensesandotherliabilities,asappropriate.
Derivativeinstrumentsthataredesignatedandqualifyasfairvaluehedgesarepredominantlyusedtomanageinterestraterisk.Thefairvaluesofthesederivative
instrumentsarerecordedasanassetorliability,asappropriate,withtheoffsetrecordedincurrentearnings.Theoffsettothechangeinfairvaluesoftherelated
hedgeditemsalsoisrecordedincurrentearnings.Anyrealizedgainorlossonthederivativesthathedgeinterestrateriskisamortizedtointerestexpenseoverthe
lifeoftherelateddebt.AtDecember31,2015,theaggregatenotionalvaluesofoutstandinginterestratecontractsdesignatedasfairvaluehedgeswere$375.Fair
valuehedgesresultedinnosignificantineffectivenessineachofthethreeyearsendedDecember31,2015.ForeachofthethreeyearsendedDecember31,2015,
gainsorlossesrecognizedininterestexpenseandtherelatedassetsandliabilitiesforinterestratesswapswerenotsignificant.Foreachofthethreeyearsended
December31,2015,nogainorlosswasrecognizedinearningsasaresultofahedgedfirmcommitmentnolongerqualifyingasafairvaluehedge.
Forderivativeinstruments thataredesignated andqualifyascash flowhedges,theeffective portionofthegain orlossonthe derivativeinstrumentis initially
recordedinAOCI,netofrelatedincometaxes,andrecognizedinearningsinthesameperiodthatthehedgedexposureaffectsearnings.AsofDecember31,2015,
outstandingcommodityforwardcontractswereinplacetohedgealimitedportionofourestimatedrequirementsoftherelatedunderlyingcommoditiesin2016
andfutureperiods.AsofDecember31,2015,theaggregatenotionalvaluesofoutstandingforeignexchangederivativecontractsdesignatedascashflowhedges
was $815 and there were no outstanding interest rate derivative contracts designated as cash flow hedges. Cash flow hedges resulted in no significant
ineffectivenessineachofthethreeyearsendedDecember31,2015.ForeachofthethreeyearsendedDecember31,2015,nogainsorlosseswerereclassified
intoearningsasaresultofthediscontinuanceofcashflowhedgesduetotheoriginalforecasttransactionnolongerbeingprobableofoccurring.AtDecember31,
2015,amountstobereclassifiedfromAOCIduringthenexttwelvemonthsarenotexpectedtobematerial.Themaximummaturityofcashflowhedgesinplace
atDecember31,2015isDecember2018.
Gainsorlossesonundesignatedforeignexchangehedginginstrumentsareimmediatelyrecognizedinother(income)andexpense,net.Lossesof$188,$192and
$74wererecordedintheyearsendingDecember31,2015,2014and2013,respectively.Theeffectonearningsfromtheuseofthesenon-designatedderivatives
issubstantiallyneutralizedbythetransactionalgainsandlossesrecordedontheunderlyingassetsandliabilities.AtDecember31,2015,thenotionalamountof
theseundesignatedderivativeinstrumentswas$2.4billion.
53 KIMBERLY-CLARKCORPORATION - 2015 Annual Report