Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2015 | Jan. 31, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | 3M Company | ||
Trading Symbol | mmm | ||
Entity Central Index Key | 66,740 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 91.4 | $ 96.4 | |
Entity Common Stock, Shares Outstanding | 605,038,186 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Statement of Incom
Consolidated Statement of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statement of Income | |||
Net sales | $ 30,274 | $ 31,821 | $ 30,871 |
Operating expenses | |||
Cost of sales | 15,383 | 16,447 | 16,106 |
Selling, general and administrative expenses | 6,182 | 6,469 | 6,384 |
Research, development and related expenses | 1,763 | 1,770 | 1,715 |
Total operating expenses | 23,328 | 24,686 | 24,205 |
Operating income | 6,946 | 7,135 | 6,666 |
Interest expense and income | |||
Interest expense | 149 | 142 | 145 |
Interest income | (26) | (33) | (41) |
Total interest expense - net | 123 | 109 | 104 |
Income before income taxes | 6,823 | 7,026 | 6,562 |
Provision for income taxes | 1,982 | 2,028 | 1,841 |
Net income including noncontrolling interest | 4,841 | 4,998 | 4,721 |
Less: Net income attributable to noncontrolling interest | 8 | 42 | 62 |
Net income attributable to 3M | $ 4,833 | $ 4,956 | $ 4,659 |
Weighted average 3M common shares outstanding - basic (in shares) | 625.6 | 649.2 | 681.9 |
Earnings per share attributable to 3M common shareholders - basic (in dollars per share) | $ 7.72 | $ 7.63 | $ 6.83 |
Weighted average 3M common shares outstanding - diluted (in shares) | 637.2 | 662 | 693.6 |
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share) | $ 7.58 | $ 7.49 | $ 6.72 |
Cash dividends paid per 3M common share (in dollars per share) | $ 4.10 | $ 3.42 | $ 2.54 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statement of Comprehensive Income | |||
Net income including noncontrolling interest | $ 4,841 | $ 4,998 | $ 4,721 |
Other comprehensive income (loss), net of tax: | |||
Cumulative translation adjustment | (586) | (942) | (505) |
Defined benefit pension and postretirement plans adjustment | 489 | (1,562) | 1,245 |
Debt and equity securities - unrealized gain (loss) | 2 | ||
Cash flow hedging instruments - unrealized gain (loss) | 25 | 107 | 15 |
Total other comprehensive income (loss), net of tax | (72) | (2,395) | 755 |
Comprehensive income (loss) including noncontrolling interest | 4,769 | 2,603 | 5,476 |
Comprehensive (income) loss attributable to noncontrolling interest | (6) | (48) | 20 |
Comprehensive income (loss) attributable to 3M | $ 4,763 | $ 2,555 | $ 5,496 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 1,798 | $ 1,897 |
Marketable securities - current | 118 | 1,439 |
Accounts receivable - net of allowances of $91 and $94 | 4,154 | 4,238 |
Inventories | ||
Finished goods | 1,655 | 1,723 |
Work in process | 1,008 | 1,081 |
Raw materials and supplies | 855 | 902 |
Total inventories | 3,518 | 3,706 |
Other current assets | 1,398 | 1,023 |
Total current assets | 10,986 | 12,303 |
Marketable securities - non-current | 9 | 15 |
Investments | 117 | 102 |
Property, plant and equipment | 23,098 | 22,841 |
Less: Accumulated depreciation | (14,583) | (14,352) |
Property, plant and equipment - net | 8,515 | 8,489 |
Goodwill | 9,249 | 7,050 |
Intangible assets - net | 2,601 | 1,435 |
Prepaid pension benefits | 188 | 46 |
Other assets | 1,053 | 1,769 |
Total assets | 32,718 | 31,209 |
Current liabilities | ||
Short-term borrowings and current portion of long-term debt | 2,044 | 106 |
Accounts payable | 1,694 | 1,807 |
Accrued payroll | 644 | 732 |
Accrued income taxes | 332 | 435 |
Other current liabilities | 2,404 | 2,884 |
Total current liabilities | 7,118 | 5,964 |
Long-term debt | 8,753 | 6,705 |
Pension and postretirement benefits | 3,520 | 3,843 |
Other liabilities | 1,580 | 1,555 |
Total liabilities | $ 20,971 | $ 18,067 |
Commitments and contingencies (Note 14) | ||
3M Company shareholders' equity: | ||
Common stock, par value $.01 per share, Shares outstanding - 2015: 609,330,124; Shares outstanding - 2014: 635,134,594 | $ 9 | $ 9 |
Additional paid-in capital | 4,791 | 4,379 |
Retained earnings | 36,575 | 34,317 |
Treasury stock | (23,308) | (19,307) |
Accumulated other comprehensive income (loss) | (6,359) | (6,289) |
Total 3M Company shareholders' equity | 11,708 | 13,109 |
Noncontrolling interest | 39 | 33 |
Total equity | 11,747 | 13,142 |
Total liabilities and equity | $ 32,718 | $ 31,209 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheet | ||
Allowances for doubtful accounts receivable | $ 91 | $ 94 |
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 944,033,056 | 944,033,056 |
Treasury stock (in shares) | 334,702,932 | 308,898,462 |
Common stock, Shares outstanding (in shares) | 609,330,124 | 635,134,594 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Common Stock and Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total |
Balance at the beginning of the period at Dec. 31, 2012 | $ 4,053 | $ 30,679 | $ (12,407) | $ (4,750) | $ 465 | $ 18,040 |
Increase (decrease) in equity | ||||||
Net income | 4,659 | 62 | 4,721 | |||
Other comprehensive income (loss), net of tax: | ||||||
Cumulative translation adjustment | (418) | (87) | (505) | |||
Defined benefit pension and postretirement plans adjustment | 1,240 | 5 | 1,245 | |||
Cash flow hedging instruments - unrealized gain (loss) | 15 | 15 | ||||
Total other comprehensive income (loss), net of tax | 755 | |||||
Dividends declared ($3.395 (See Note 6), $3.59 (See Note 6), and $3.075 (See Note 6) per share for 2013, 2014 and 2015) | (2,297) | (2,297) | ||||
Sale of subsidiary shares | 7 | 1 | 8 | |||
Stock-based compensation, net of tax impacts | 324 | 324 | ||||
Reacquired stock | (5,216) | (5,216) | ||||
Issuances pursuant to stock option and benefit plans | (625) | 2,238 | 1,613 | |||
Balance at the end of the period at Dec. 31, 2013 | 4,384 | 32,416 | (15,385) | (3,913) | 446 | 17,948 |
Increase (decrease) in equity | ||||||
Net income | 4,956 | 42 | 4,998 | |||
Other comprehensive income (loss), net of tax: | ||||||
Cumulative translation adjustment | (948) | 6 | (942) | |||
Defined benefit pension and postretirement plans adjustment | (1,562) | (1,562) | ||||
Debt and equity securities - unrealized gain (loss) | 2 | 2 | ||||
Cash flow hedging instruments - unrealized gain (loss) | 107 | 107 | ||||
Total other comprehensive income (loss), net of tax | (2,395) | |||||
Dividends declared ($3.395 (See Note 6), $3.59 (See Note 6), and $3.075 (See Note 6) per share for 2013, 2014 and 2015) | (2,297) | (2,297) | ||||
Purchase of subsidiary shares | (434) | 25 | (461) | (870) | ||
Stock-based compensation, net of tax impacts | 438 | 438 | ||||
Reacquired stock | (5,643) | (5,643) | ||||
Issuances pursuant to stock option and benefit plans | (758) | 1,721 | 963 | |||
Balance at the end of the period at Dec. 31, 2014 | 4,388 | 34,317 | (19,307) | (6,289) | 33 | 13,142 |
Increase (decrease) in equity | ||||||
Net income | 4,833 | 8 | 4,841 | |||
Other comprehensive income (loss), net of tax: | ||||||
Cumulative translation adjustment | (584) | (2) | (586) | |||
Defined benefit pension and postretirement plans adjustment | 489 | 489 | ||||
Cash flow hedging instruments - unrealized gain (loss) | 25 | 25 | ||||
Total other comprehensive income (loss), net of tax | (72) | |||||
Dividends declared ($3.395 (See Note 6), $3.59 (See Note 6), and $3.075 (See Note 6) per share for 2013, 2014 and 2015) | (1,913) | (1,913) | ||||
Stock-based compensation, net of tax impacts | 412 | 412 | ||||
Reacquired stock | (5,304) | (5,304) | ||||
Issuances pursuant to stock option and benefit plans | (662) | 1,303 | 641 | |||
Balance at the end of the period at Dec. 31, 2015 | $ 4,800 | $ 36,575 | $ (23,308) | $ (6,359) | $ 39 | $ 11,747 |
Consolidated Statement of Chan7
Consolidated Statement of Changes in Equity (Parenthetical) - $ / shares | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statement of Changes in Equity | |||||||||||
Dividends that have been declared but paid in subsequent period (in dollars per share) | $ 1.025 | $ 0.855 | |||||||||
Dividends declared in current period (in dollars per share) | $ 1.025 | $ 1.025 | $ 1.025 | $ 0.855 | $ 0.855 | $ 0.855 | $ 3.075 | $ 3.59 | $ 3.395 |
Supplemental Share Information
Supplemental Share Information - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplemental Share Information Treasury Stock RollForward | |||
Treasury Stock, Shares, Beginning Balance | 308,898,462 | 280,736,817 | 256,941,406 |
Reacquired stock | 34,072,584 | 40,664,061 | 45,445,610 |
Issuances pursuant to stock options and benefit plans | (8,268,114) | (12,502,416) | (21,650,199) |
Treasury Stock, Shares, Ending Balance | 334,702,932 | 308,898,462 | 280,736,817 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities | |||
Net income including noncontrolling interest | $ 4,841 | $ 4,998 | $ 4,721 |
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities | |||
Depreciation and amortization | 1,435 | 1,408 | 1,371 |
Company pension and postretirement contributions | (267) | (215) | (482) |
Company pension and postretirement expense | 556 | 391 | 553 |
Stock-based compensation expense | 276 | 280 | 240 |
Deferred income taxes | 395 | (146) | (167) |
Excess tax benefits from stock-based compensation | (154) | (167) | (92) |
Changes in assets and liabilities | |||
Accounts receivable | (58) | (268) | (337) |
Inventories | 3 | (113) | (86) |
Accounts payable | 9 | 75 | 16 |
Accrued income taxes (current and long-term) | (744) | 206 | 206 |
Other - net | 128 | 177 | (126) |
Net cash provided by operating activities | 6,420 | 6,626 | 5,817 |
Cash Flows from Investing Activities | |||
Purchases of property, plant and equipment (PP&E) | (1,461) | (1,493) | (1,665) |
Proceeds from sale of PP&E and other assets | 33 | 135 | 128 |
Acquisitions, net of cash acquired | (2,914) | (94) | |
Purchases of marketable securities and investments | (652) | (1,280) | (4,040) |
Proceeds from maturities and sale of marketable securities and investments | 1,952 | 2,034 | 4,667 |
Proceeds from sale of businesses | 123 | 8 | |
Other investing | 102 | 102 | 46 |
Net cash used in investing activities | (2,817) | (596) | (856) |
Cash Flows from Financing Activities | |||
Change in short-term debt - net | 860 | 27 | (2) |
Repayment of debt (maturities greater than 90 days) | (800) | (1,625) | (859) |
Proceeds from debt (maturities greater than 90 days) | 3,422 | 2,608 | 824 |
Purchases of treasury stock | (5,238) | (5,652) | (5,212) |
Proceeds from issuance of treasury stock pursuant to stock option and benefit plans | 635 | 968 | 1,609 |
Dividends paid to shareholders | (2,561) | (2,216) | (1,730) |
Excess tax benefits from stock-based compensation | 154 | 167 | 92 |
Purchase of noncontrolling interest | (861) | ||
Other - net | (120) | (19) | 32 |
Net cash used in financing activities | (3,648) | (6,603) | (5,246) |
Effect of exchange rate changes on cash and cash equivalents | (54) | (111) | (17) |
Net increase (decrease) in cash and cash equivalents | (99) | (684) | (302) |
Cash and cash equivalents at beginning of year | 1,897 | 2,581 | 2,883 |
Cash and cash equivalents at end of period | $ 1,798 | $ 1,897 | $ 2,581 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies | |
Significant Accounting Policies | NOTE 1. Significant Accounting Policies Consolidation: 3M is a diversified global manufacturer, technology innovator and marketer of a wide variety of products. All subsidiaries are consolidated. All intercompany transactions are eliminated. As used herein, the term “3M” or “Company” refers to 3M Company and subsidiaries unless the context indicates otherwise. Basis of presentation: Certain balances relative to prior periods have been reclassified to conform to December 31, 2015 presentation in connection with the following, each of which is further discussed in the indicated section of Note 1: · Change in method of classification of certain marketable securities previously classified as non-current to current as further discussed in the Marketable securities section; and · Adoption of Accounting Standards Update (ASU) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs , and ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , in the fourth quarter of 2015 on a retrospective basis as further discussed in the New Accounting Pronouncements section. Foreign currency translation: Local currencies generally are considered the functional currencies outside the United States. Assets and liabilities for operations in local-currency environments are translated at month-end exchange rates of the period reported. Income and expense items are translated at month-end exchange rates of each applicable month. Cumulative translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity. Although local currencies are typically considered as the functional currencies outside the United States, under Accounting Standards Codification (ASC) 830, Foreign Currency Matters , the reporting currency of a foreign entity’s parent is assumed to be that entity’s functional currency when the economic environment of a foreign entity is highly inflationary—generally when its cumulative inflation is approximately 100 percent or more for the three years that precede the beginning of a reporting period. 3M has a subsidiary in Venezuela with operating income representing less than 1.0 percent of 3M’s consolidated operating income for 2015. Since January 1, 2010, the financial statements of the Venezuelan subsidiary have been remeasured as if its functional currency were that of its parent. The Venezuelan government sets official rates of exchange and conditions precedent to purchase foreign currency at these rates with local currency. Such rates and conditions have been and continue to be subject to change. In January 2014, the Venezuelan government announced that the National Center for Foreign Commerce (CENCOEX), had assumed the role with respect to the continuation of the existing official exchange rate, significantly expanded the use of a second currency auction exchange mechanism called the Complementary System for Foreign Currency Acquirement (or SICAD1), and issued exchange regulations indicating the SICAD1 rate of exchange would be used for payments related to international investments. In late March 2014, the Venezuelan government launched a third foreign exchange mechanism, SICAD2, which it later replaced with another foreign currency exchange platform in February 2015 called the Marginal System of Foreign Currency (SIMADI). The SIMADI rate was described as being derived from daily private bidders and buyers exchanging offers through authorized agents. This rate is approved and published by the Venezuelan Central Bank. The financial statements of 3M’s Venezuelan subsidiary were remeasured utilizing the official CENCOEX (or its predecessor) rate into March 2014, the SICAD1 rate beginning in late March 2014, the SICAD2 rate beginning in June 2014, and the SIMADI rate beginning in February 2015. 3M’s uses of these rates were based upon evaluation of a number of factors including, but not limited to, the exchange rate the Company’s Venezuelan subsidiary may legally use to convert currency, settle transactions or pay dividends; the probability of accessing and obtaining currency by use of a particular rate or mechanism; and the Company’s intent and ability to use a particular exchange mechanism. Other factors notwithstanding, remeasurement impacts of the changes in use of these exchange rates did not have material impacts on 3M’s consolidated results of operations or financial condition. The Company continues to monitor circumstances relative to its Venezuelan subsidiary. Changes in applicable exchange rates or exchange mechanisms may continue in the future. These changes could impact the rate of exchange applicable to remeasure the Company’s net monetary assets (liabilities) denominated in Venezuelan Bolivars (VEF). As of December 31, 2015 , the Company had a balance of net monetary liabilities denominated in VEF of less than 500 million VEF and the CENCOEX, SICAD (formerly SICAD1), and SIMADI exchange rates were approximately 6 VEF, 13 VEF, and 200 VEF per U.S. dollar, respectively. A need to deconsolidate the Company’s Venezuelan subsidiary’s operations may result from a lack of exchangeability of VEF-denominated cash coupled with an acute degradation in the ability to make key operational decisions due to government regulations in Venezuela. 3M monitors factors such as its ability to access various exchange mechanisms; the impact of government regulations on the Company’s ability to manage its Venezuelan subsidiary’s capital structure, purchasing, product pricing, and labor relations; and the current political and economic situation within Venezuela. Based upon such factors as of December 31, 2015 , the Company continues to consolidate its Venezuelan subsidiary. As of December 31, 2015 , the balance of intercompany receivables due from this subsidiary and its equity balance are not significant. Reclassifications: Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform to the current year presentation. Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Cash and cash equivalents: Cash and cash equivalents consist of cash and temporary investments with maturities of three months or less when acquired. Marketable securities: Effective December 31, 2015, the Company changed the method of classification of certain securities previously classified as non-current to current. This new method classifies these securities as current or non-current based on the nature of the securities and availability for use in current operations while the prior classification was based on management’s intended holding period, the security’s maturity date and liquidity considerations based on market conditions. The Company believes this method is preferable because it is consistent with how the Company manages its capital structure and liquidity. The prior period balance has been reclassified to conform to the current year presentation: December 31, 2014 (Millions) Previously Reported Impact As Adjusted Marketable securities - current $ $ $ Marketable securities - non-current Total marketable securities $ $ — $ 3M reviews impairments associated with its marketable securities in accordance with the measurement guidance provided by ASC 320 , Investments-Debt and Equity Securities , when determining the classification of the impairment as “temporary” or “other-than-temporary”. A temporary impairment charge results in an unrealized loss being recorded in the other comprehensive income component of shareholders’ equity. Such an unrealized loss does not reduce net income for the applicable accounting period because the loss is not viewed as other-than-temporary. The factors evaluated to differentiate between temporary and other-than-temporary include the projected future cash flows, credit ratings actions, and assessment of the credit quality of the underlying collateral, as well as other factors. Investments: Investments primarily include equity method, cost method, and available-for-sale equity investments. Available-for-sale investments are recorded at fair value. Unrealized gains and losses relating to investments classified as available-for-sale are recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity. Other assets: Other assets include deferred income taxes, product and other insurance receivables, the cash surrender value of life insurance policies, and other long-term assets. Investments in life insurance are reported at the amount that could be realized under contract at the balance sheet date, with any changes in cash surrender value or contract value during the period accounted for as an adjustment of premiums paid. Cash outflows and inflows associated with life insurance activity are included in “Purchases of marketable securities and investments” and “Proceeds from maturities and sale of marketable securities and investments,” respectively. Inventories: Inventories are stated at the lower of cost or market, with cost generally determined on a first-in, first-out basis. Property, plant and equipment: Property, plant and equipment, including capitalized interest and internal engineering costs, are recorded at cost. Depreciation of property, plant and equipment generally is computed using the straight-line method based on the estimated useful lives of the assets. The estimated useful lives of buildings and improvements primarily range from ten to forty years, with the majority in the range of twenty to forty years. The estimated useful lives of machinery and equipment primarily range from three to fifteen years, with the majority in the range of five to ten years. Fully depreciated assets are retained in property and accumulated depreciation accounts until disposal. Upon disposal, assets and related accumulated depreciation are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to operations. Property, plant and equipment amounts are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. Conditional asset retirement obligations: A liability is initially recorded at fair value for an asset retirement obligation associated with the retirement of tangible long-lived assets in the period in which it is incurred if a reasonable estimate of fair value can be made. Conditional asset retirement obligations exist for certain long-term assets of the Company. The obligation is initially measured at fair value using expected present value techniques. Over time the liabilities are accreted for the change in their present value and the initial capitalized costs are depreciated over the remaining useful lives of the related assets. The asset retirement obligation liability was $102 million and $96 million at December 31, 2015 and 2014 , respectively. Goodwill: Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is not amortized. Goodwill is tested for impairment annually in the fourth quarter of each year, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level, with all goodwill assigned to a reporting unit. Reporting units are one level below the business segment level, but can be combined when reporting units within the same segment have similar economic characteristics. 3M did not combine any of its reporting units for impairment testing. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The estimated fair value of a reporting unit is determined using earnings for the reporting unit multiplied by a price/earnings ratio for comparable industry groups, or by using a discounted cash flow analysis. Companies have the option to first assess qualitative factors to determine whether the fair value of a reporting unit is not “more likely than not” less than its carrying amount, which is commonly referred to as “Step 0”. 3M has chosen not to apply Step 0 for 2015 or prior period annual goodwill assessments. Intangible assets: Intangible asset types include customer related, patents, other technology-based, tradenames and other intangible assets acquired from an independent party. Intangible assets with a definite life are amortized over a period ranging from one to twenty years on a systematic and rational basis (generally straight line) that is representative of the asset’s use. The estimated useful lives vary by category, with customer related largely between seven to seventeen years, patents largely between five to thirteen years, other technology-based largely between two to fifte en years, definite lived tradenames largely between thr ee and twenty years, and other intangibles largely between two to ten years. Costs related to internally developed intangible assets, such as patents, are expensed as incurred, primarily in “Research, development and related expenses.” Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. Intangible assets with an indefinite life, namely certain tradenames, are not amortized. Indefinite-lived intangible assets are tested for impairment annually, and are tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired. An impairment loss generally would be recognized when the fair value is less than the carrying value of the indefinite-lived intangible asset. Restructuring actions: Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs, and impairment or accelerated depreciation/amortization of assets associated with such actions. Employee-related severance charges are largely based upon distributed employment policies and substantive severance plans. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the associated actions. Severance amounts for which affected employees were required to render service in order to receive benefits at their termination dates were measured at the date such benefits were communicated to the applicable employees and recognized as expense over the employees’ remaining service periods. Contract termination and other charges primarily reflect costs to terminate a contract before the end of its term (measured at fair value at the time the Company provided notice to the counterparty) or costs that will continue to be incurred under the contract for its remaining term without economic benefit to the Company. Asset impairment charges related to intangible assets and property, plant and equipment reflect the excess of the assets’ carrying values over their fair values. Revenue (sales) recognition: The Company sells a wide range of products to a diversified base of customers around the world and has no material concentration of credit risk. Revenue is recognized when the risks and rewards of ownership have substantively transferred to customers. This condition normally is met when the product has been delivered or upon performance of services. The Company records estimated reductions to revenue or records expense for customer and distributor incentives, primarily comprised of rebates and free goods, at the time of the initial sale. These sales incentives are accounted for in accordance with ASC 605, Revenue Recognition . The estimated reductions of revenue for rebates are based on the sales terms, historical experience, trend analysis and projected market conditions in the various markets served. Since the Company serves numerous markets, the rebate programs offered vary across businesses, but the most common incentive relates to amounts paid or credited to customers for achieving defined volume levels or growth objectives. Free goods are accounted for as an expense and recorded in cost of sales. Sales, use, value-added and other excise taxes are not recognized in revenue. The vast majority of 3M’s sales agreements are for standard products and services with customer acceptance occurring upon delivery of the product or performance of the service. However, to a limited extent 3M also enters into agreements that involve multiple elements (such as equipment, installation and service), software, or non-standard terms and conditions. For non-software multiple-element arrangements, the Company recognizes revenue for delivered elements when they have stand-alone value to the customer, they have been accepted by the customer, and for which there are only customary refund or return rights. Arrangement consideration is allocated to the deliverables by use of the relative selling price method. The selling price used for each deliverable is based on vendor-specific objective evidence (VSOE) if available, third-party evidence (TPE) if VSOE is not available, or estimated selling price if neither VSOE nor TPE is available. Estimated selling price is determined in a manner consistent with that used to establish the price to sell the deliverable on a standalone basis. In addition to the preceding conditions, equipment revenue is not recorded until the installation has been completed if equipment acceptance is dependent upon installation or if installation is essential to the functionality of the equipment. Installation revenues are not recorded until installation has been completed. For arrangements (or portions of arrangements) falling within software revenue recognition standards and that do not involve significant production, modification, or customization, revenue for each software or software-related element is recognized when the Company has VSOE of the fair value of all of the undelivered elements and applicable criteria have been met for the delivered elements. When the arrangements involve significant production, modification or customization, long-term construction-type accounting involving proportional performance is generally employed. For prepaid service contracts, sales revenue is recognized on a straight-line basis over the term of the contract, unless historical evidence indicates the costs are incurred on other than a straight-line basis. License fee revenue is recognized as earned, and no revenue is recognized until the inception of the license term. On occasion, agreements will contain milestones, or 3M will recognize revenue based on proportional performance. For these agreements, and depending on the specifics, 3M may recognize revenue upon completion of a substantive milestone, or in proportion to costs incurred to date compared with the estimate of total costs to be incurred. Accounts receivable and allowances: Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains allowances for bad debts, cash discounts, product returns and various other items. The allowance for doubtful accounts and product returns is based on the best estimate of the amount of probable credit losses in existing accounts receivable and anticipated sales returns. The Company determines the allowances based on historical write-off experience by industry and regional economic data and historical sales returns. The Company reviews the allowance for doubtful accounts monthly. The Company does not have any significant off-balance-sheet credit exposure related to its customers. Advertising and merchandising: These costs are charged to operations in the period incurred, and totaled $368 million in 2015 , $407 million in 2014 and $423 million in 2013 . Research, development and related expenses: These costs are charged to operations in the period incurred and are shown on a separate line of the Consolidated Statement of Income. Research, development and related expenses totaled $1.763 billion in 2015 , $1.770 billion in 2014 and $1.715 billion in 2013 . Research and development expenses, covering basic scientific research and the application of scientific advances in the development of new and improved products and their uses, totaled $1.223 billion in 2015 , $1.193 billion in 2014 and $1.150 billion in 2013 . Related expenses primarily include technical support; internally developed patent costs, which include costs and fees incurred to prepare, file, secure and maintain patents; amortization of externally acquired patents and externally acquired in-process research and development; and gains/losses associated with certain corporate approved investments in R&D-related ventures, such as equity method effects and impairments. Internal-use software: The Company capitalizes direct costs of services used in the development of internal-use software. Amounts capitalized are amortized over a period of three to seven years, generally on a straight-line basis, unless another systematic and rational basis is more representative of the software’s use. Amounts are reported as a component of either machinery and equipment or capital leases within property, plant and equipment. Environmental: Environmental expenditures relating to existing conditions caused by past operations that do not contribute to current or future revenues are expensed. Reserves for liabilities related to anticipated remediation costs are recorded on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies, the Company’s commitment to a plan of action, or approval by regulatory agencies. Environmental expenditures for capital projects that contribute to current or future operations generally are capitalized and depreciated over their estimated useful lives. Income taxes: The provision for income taxes is determined using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists. As of December 31, 2015 and 2014 , the Company had valuation allowances of $31 million and $22 million on its deferred tax assets, respectively. The increase in valuation allowance at December 31, 2015 relates to current acquisitions in certain international jurisdictions. The Company recognizes and measures its uncertain tax positions based on the rules under ASC 740, Income Taxes . Earnings per share: The difference in the weighted average 3M shares outstanding for calculating basic and diluted earnings per share attributable to 3M common shareholders is the result of the dilution associated with the Company’s stock-based compensation plans. Certain options outstanding under these stock-based compensation plans during the years 2015 , 2014 and 2013 were not included in the computation of diluted earnings per share attributable to 3M common shareholders because they would not have had a dilutive effect ( 5.0 million average options for 2015 , 1.4 million average options for 2014 , and 2.0 million average options for 2013) . The computations for basic and diluted earnings per share for the years ended December 31 follow: Earnings Per Share Computations (Amounts in millions, except per share amounts) 2015 2014 2013 Numerator: Net income attributable to 3M $ $ $ Denominator: Denominator for weighted average 3M common shares outstanding — basic Dilution associated with the Company’s stock-based compensation plans Denominator for weighted average 3M common shares outstanding — diluted Earnings per share attributable to 3M common shareholders — basic $ $ $ Earnings per share attributable to 3M common shareholders — diluted $ $ $ Stock-based compensation: The Company recognizes compensation expense for its stock-based compensation programs, which include stock options, restricted stock, restricted stock units, performance shares, and the General Employees’ Stock Purchase Plan (GESPP). Under applicable accounting standards, the fair value of share-based compensation is determined at the grant date and the recognition of the related expense is recorded over the period in which the share-based compensation vests. Refer to Note 15 for additional information. Comprehensive income: Total comprehensive income and the components of accumulated other comprehensive income (loss) are presented in the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Changes in Equity. Accumulated other comprehensive income (loss) is composed of foreign currency translation effects (including hedges of net investments in international companies), defined benefit pension and postretirement plan adjustments, unrealized gains and losses on available-for-sale debt and equity securities, and unrealized gains and losses on cash flow hedging instruments. Derivatives and hedging activities: All derivative instruments within the scope of ASC 815, Derivatives and Hedging , are recorded on the balance sheet at fair value. The Company uses interest rate swaps, currency and commodity price swaps, and foreign currency forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity market volatility. All hedging instruments that qualify for hedge accounting are designated and effective as hedges, in accordance with U.S. generally accepted accounting principles. If the underlying hedged transaction ceases to exist, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. Instruments that do not qualify for hedge accounting are marked to market with changes recognized in current earnings. Cash flows from derivative instruments are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company does not hold or issue derivative financial instruments for trading purposes and is not a party to leveraged derivatives. Credit risk: The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts. However, the Company’s risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. 3M enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple, separate derivative transactions. The Company does not anticipate nonperformance by any of these counterparties. 3M has elected to present the fair value of derivative assets and liabilities within the Company’s consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. Fair value measurements: 3M follows ASC 820, Fair Value Measurements and Disclosures , with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis. Under the standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Acquisitions: The Company accounts for business acquisitions in accordance with ASC 805, Business Combinations . This standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard prescribe, among other things, the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration) and the exclusion of transaction and acquisition-related restructuring costs from acquisition accounting. New Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity , which changed the criteria for determining which disposals can be presented as discontinued operations and modified related disclosure requirements. This standard has the impact of reducing the frequency of disposals reported as discontinued operations, by requiring such a disposal to represent a strategic shift that has or will have a major effect on an entity’s operations and financial results. However, existing provisions that prohibited an entity from reporting a discontinued operation if it had certain continuing cash flows or involvement with the component after disposal were eliminated by this standard. The ASU also expands the disclosures for discontinued operations and requires new disclosures related to individually significant disposals that do not qualify as discontinued operations. For 3M, this ASU was effective prospectively beginning January 1, 2015. This ASU was applied to the 2015 divestiture information discussed in Note 2 and had no material impact on consolidated results of operations and financial condition. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , and in August 2015 issued ASU No. 2015-14, which amended ASU No. 2014-09 as to effective date. The ASU, as amended, provides a single comprehensive model to |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2015 | |
Acquisitions and Divestitures | |
Acquisitions and Divestitures | NOTE 2. Acquisitions and Divestitures Acquisitions: 3M makes acquisitions of certain businesses from time to time that are aligned with its strategic intent with respect to, among other factors, growth markets and adjacent product lines or technologies. The impact on the consolidated balance sheet of the purchase price allocations related to 2015 acquisitions and assigned weighted-average intangible asset lives, including adjustments relative to other acquisitions within the measurement period, follows. The allocation of purchase consideration related to the August 2015 Capital Safety and Polypore Separations Media acquisitions is considered preliminary, primarily with respect to certain tax-related assets and liabilities. 3M expects to finalize the allocation of purchase price within the one year measurement-period following these acquisitions. Adjustments to preliminary allocations primarily related to the identification and valuation of certain indefinite-lived intangible assets (further discussed below). The change to provisional amounts resulted in an immaterial impact to results of operations in the fourth quarter of 2015, a portion of which relates to earlier quarters in the measurement period. 2015 Acquisition Activity Finite-Lived Intangible-Asset (Millions) Capital Polypore Weighted-Average Asset (Liability) Safety Separations Media Other Total Lives (Years) Accounts receivable $ $ $ $ Inventory Other current assets Property, plant, and equipment Purchased finite-lived intangible assets: Customer related intangible assets Patents Other technology-based intangible assets Definite-lived tradenames Other amortizable intangible assets — — Purchased indefinite-lived intangible assets — — Purchased goodwill Accounts payable and other liabilities, net of other assets Interest bearing debt — — Deferred tax asset/(liability) — Net assets acquired $ $ $ $ Supplemental information: Cash paid $ $ $ $ Less: Cash acquired — Cash paid, net of cash acquired $ $ $ $ 3M completed one acquisition (Treo Solutions, LLC) during 2014, the impact of which on the consolidated balance sheet was not considered material. Separately, as discussed in Note 6, during 2014, 3M (via Sumitomo 3M Limited) purchased Sumitomo Electric Industries, Ltd.’s 25 percent interest in 3M’s consolidated Sumitomo 3M Limited subsidiary for 90 billion Japanese Yen. Because 3M already had a controlling interest in this consolidated subsidiary, this transaction was separately recorded as a financing activity in the statement of cash flows. There were no acquisitions that closed during 2013. Goodwill resulting from business combinations is largely attributable to the existing workforce of the acquired businesses and synergies expected to arise after 3M’s acquisition of these businesses. Pro forma information related to acquisitions was not included because the impact on the Company’s consolidated results of operations was not considered to be material. In addition to business combinations, 3M periodically acquires certain tangible and/or intangible assets and purchases interests in certain enterprises that do not otherwise qualify for accounting as business combinations. These transactions are largely reflected as additional asset purchase and investment activity. 2015 acquisitions: In March 2015, 3M (Health Care Business) purchased all of the outstanding shares of Ivera Medical Corp., headquartered in San Diego, California. Ivera Medical Corp. is a manufacturer of health care products that disinfect and protect devices used for access into a patient’s bloodstream. In addition, in the first quarter of 2015, 3M (Industrial Business) purchased the remaining interest in a former equity method investment for an immaterial amount. In August 2015, 3M (Safety and Graphics Business) acquired all of the outstanding shares of Capital Safety Group S.A.R.L., with operating headquarters in Bloomington, Minnesota, from KKR & Co. L.P. for $1.7 billion, net of cash acquired. The net assets acquired included the assumption of $0.8 billion of debt. Capital Safety is a leading global provider of fall protection equipment. In August 2015, 3M (Industrial Business) acquired the assets and liabilities associated with Polypore International, Inc.’s Separations Media business, headquartered in Wuppertal, Germany, for $1.0 billion. Polypore’s Separations Media business is a leading provider of microporous membranes and modules for filtration in the life sciences, industrial and specialty segments. Purchased identifiable finite-lived intangible assets related to acquisition activity in 2015 totaled $1.0 billion. The associated finite-lived intangible assets acquired in 2015 will be amortized on a systematic and rational basis (generally straight line) over a weighted-average life of 14 years (lives ranging from two to 20 years). Indefinite-lived intangible assets of $520 million relate to certain tradenames associated with the Capital Safety acquisition which have been in existence for over 55 years, have a history of leading market-share positions, have been and are intended to be continuously renewed, and the associated products of which are expected to generate cash flows for 3M for an indefinite period of time. Acquired in-process research and development and identifiable intangible assets for which significant assumed renewals or extensions of underlying arrangements impacted the determination of their useful lives were not material. 2014 acquisitions: During 2014, 3M completed one business combination. The purchase price paid for this business combination (net of cash acquired) and the impact of other matters (net) during 2014 aggregated to $94 million. In April 2014, 3M (Health Care Business) purchased all of the outstanding equity interests of Treo Solutions LLC, headquartered in Troy, New York. Treo Solutions LLC is a provider of data analytics and business intelligence to healthcare payers and providers. Purchased identifiable finite-lived intangible assets related to acquisition activity in 2014 totaled $34 million. The associated finite-lived intangible assets acquired in 2014 will be amortized on a systematic and rational basis (generally straight line) over a weighted-average life of six years (lives ranging from three to 10 years). Acquired in-process research and development and identifiable intangible assets for which significant assumed renewals or extensions of underlying arrangements impacted the determination of their useful lives were not material. Divestitures: 3M may divest certain businesses from time to time based upon review of the Company’s portfolio considering, among other items, factors relative to the extent of strategic and technological alignment and optimization of capital deployment, in addition to considering if selling the businesses results in the greatest value creation for the Company and for shareholders. In January 2015, 3M (Electronics and Energy Business) completed the sale of its global Static Control business to Desco Industries Inc., based in Chino, California. 2014 sales of this business were $46 million. This transaction was not considered material. In the fourth quarter of 2015, 3M (Safety and Graphics Business) entered into agreements with One Equity Partners Capital Advisors L.P. (OEP) to sell the assets of 3M’s library systems business. The sales of the North American business and the majority of the business outside of North America closed in October and November 2015, respectively. The sale of the remainder of the library systems business is expected to close in the first quarter of 2016. In December 2015, 3M (Safety and Graphics Business) also completed the sale of Faab Fabricauto, a wholly-owned subsidiary of 3M, to Hills Numberplates Limited. The library systems business, part of the Traffic Safety and Security Division, delivers circulation management solutions to library customers with on-premise hardware and software, maintenance and service, and an emerging cloud-based digital lending platform. Faab Fabricauto, also part of the Traffic Safety and Security Division, is a leading French manufacturer of license plates and signage solutions. The aggregate cash proceeds relative to the 2015 global library systems and Faab Fabricauto divestiture transactions was $104 million. The Company recorded a net pre-tax gain of $40 million (approximately $10 million after tax) in 2015 as a result of the sale and any adjustment of carrying value. In January 2016, 3M (Industrial Business Group) entered into an agreement to sell to Innovative Chemical Products Group, a portfolio company of Audax Private Equity, the assets of 3M’s pressurized polyurethane foam adhesives business (formerly known as Polyfoam). This business is a provider of pressurized polyurethane foam adhesive formulations and systems into the residential roofing, commercial roofing and insulation and industrial foam segments in the United States with annual sales of approximately $20 million. The transaction is expected to close in the first quarter of 2016, subject to customary close conditions. In June 2013, 3M (Consumer Business) completed the sale of its Scientific Anglers and Ross Reels businesses to The Orvis Company, Inc. based in Manchester, Vermont. This transaction was not considered material The aggregate operating income of these businesses included in the Company’s operating results for the periods presented and the amounts of major assets and liabilities of any associated disposal groups classified as held-for-sale as of December 31, 2015 were not material . |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | NOTE 3. Goodwill and Intangible Asset s Purchased goodwill from acquisitions totaled $2.5 billion in 2015, $636 million of which is deductible for tax purposes. Purchased goodwill from acquisitions totaled $65 million in 2014, none of which is deductible for tax purposes. The amounts in the “Translation and other” column in the following table primarily relate to changes in foreign currency exchange rates. The goodwill balance by business segment follows: Goodwill Dec. 31, 2014 2014 Dec. 31, 2015 2015 Dec. 31, 2013 acquisition translation 2014 acquisition translation 2015 (Millions) Balance activity and other Balance activity and other Balance Industrial $ $ — $ $ $ $ $ Safety and Graphics — Health Care Electronics and Energy — — Consumer — — Total Company $ $ $ $ $ $ $ As described in Note 16, effective in the third quarter of 2015, within the Health Care business segment, the Company formed the Oral Care Solutions Division, which combined the former 3M ESPE and 3M Unitek divisions. For any product moves that resulted in reporting unit changes, the Company applied the relative fair value method to determine the impact on goodwill of the associated reporting units. During the third quarter of 2015 , the Company completed its assessment of any potential goodwill impairment for reporting units impacted by this new structure and determined that no impairment existed. The Company also completed its annual goodwill impairment test in the fourth quarter of 2015 for all reporting units and determined that no impairment existed. In addition, the Company had no impairments of goodwill in prior years. Acquired Intangible Assets For 2015 , the intangible assets (excluding goodwill) acquired through business combinations increased the gross carrying amount. Balances are also impacted by changes in foreign currency exchange rates. The gross carrying amount and accumulated amortization of acquired intangible assets as of December 31, follow: (Millions) 2015 2014 Customer related intangible assets $ $ Patents Other technology-based intangible assets Definite-lived tradenames Other amortizable intangible assets Total gross carrying amount $ $ Accumulated amortization — customer related Accumulated amortization — patents Accumulated amortization — other technology based Accumulated amortization — definite-lived tradenames Accumulated amortization — other Total accumulated amortization $ $ Total finite-lived intangible assets — net $ $ Non-amortizable intangible assets (primarily tradenames) Total intangible assets — net $ $ Certain tradenames acquired by 3M are not amortized because they have been in existence for over 55 years, have a history of leading-market share positions, have been and are intended to be continuously renewed, and the associated products of which are expected to generate cash flows for 3M for an indefinite period of time. Amortization expense for the years ended December 31 follows: (Millions) 2015 2014 2013 Amortization expense $ $ $ Expected amortization expense for acquired amortizable intangible assets recorded as of December 31, 2015 follows: After (Millions) 2016 2017 2018 2019 2020 2020 Amortization expense $ $ $ $ $ $ The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, accelerated amortization of intangible assets and other events. 3M expenses the costs incurred to renew or extend the term of intangible assets. |
Restructuring Actions
Restructuring Actions | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Actions | NOTE 4. Restructuring Actions 2015 Restructuring Actions: During the fourth quarter of 2015, management approved and committed to undertake certain restructuring actions primarily focused on structural overhead, largely in the U.S. and slower-growing markets, with particular emphasis on Europe, Middle East, and Africa (EMEA) and Latin America. This impacted approximately 1,700 positions worldwide and resulted in a fourth-quarter 2015 pre-tax charge of $114 million. Components of these restructuring charges are summarized by business segment as follows: Year ended December 31, 2015 (Millions) Employee-Related Asset-Related Total Industrial $ $ $ Safety and Graphics — Health Care — Electronics and Energy Consumer — Corporate and Unallocated — Total Expense $ $ $ The preceding restructuring charges were recorded in the income statement as follows: (Millions) 2015 Cost of sales Selling, general and administrative expenses Research, development and related expenses Total $ Components of these restructuring actions, including cash and non-cash impacts, follow: Year ended December 31, 2015 (Millions) Employee-Related Asset-Related Total Expense incurred $ $ $ Non-cash changes Cash payments — Accrued 2015 restructuring action balances as of December 31, 2015 $ $ — $ Non-cash changes include certain pension settlements and special termination benefits recorded in accrued pension and postretirement benefits and accelerated deprecation resulting from the cessation of use of certain long-lived assets. Remaining activities related to the restructuring are expected to be completed in 2016. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Balance Sheet Information | |
Supplemental Balance Sheet Information | NOTE 5. Supplemental Balance Sheet Information Accounts payable (included as a separate line item in the Consolidated Balance Sheet) includes drafts payable on demand of $79 million at December 31, 2015 , and $1 million at December 31, 2014 . Accumulated depreciation for capital leases totaled $98 million and $87 million as of December 31, 2015 , and 2014 , respectively. Additional supplemental balance sheet information is provided in the table that follows. (Millions) 2015 2014 Other current assets Prepaid expenses and other $ $ Derivative assets-current Insurance related receivables, prepaid expenses and other Total other current assets $ $ Investments Equity method $ $ Cost method Other investments Total investments $ $ Property, plant and equipment - at cost Land $ $ Buildings and leasehold improvements Machinery and equipment Construction in progress Capital leases Gross property, plant and equipment Accumulated depreciation Property, plant and equipment - net $ $ Other assets Deferred income taxes $ $ Insurance related receivables and other Cash surrender value of life insurance policies Other Total other assets $ $ Other current liabilities Accrued trade payables $ $ Deferred income Derivative liabilities Dividends payable — Employee benefits and withholdings Contingent liability claims and other Property and other taxes Pension and postretirement benefits Other Total other current liabilities $ $ Other liabilities Long term income taxes payable $ $ Employee benefits Contingent liability claims and other Capital lease obligations Deferred income Deferred income taxes Other Total other liabilities $ $ |
Supplemental Equity and Compreh
Supplemental Equity and Comprehensive Income Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Equity and Comprehensive Income Information | |
Supplemental Equity and Comprehensive Income Information | NOTE 6. Supplemental Equity and Comprehensive Income Informatio n Common stock ($ .01 par value per share) of 3.0 billion shares is authorized, with 944,033,056 shares issued. Treasury stock is reported at cost, with 334,702,932 shares at December 31, 2015 , 308,898,462 shares at December 31, 2014 , and 280,736,817 shares at December 31, 2013 . Preferred stock, without par value, of 10 million shares is authorized but unissued. In 2015, 3M’s Board of Directors declared a second, third, and fourth quarter dividend of $1.025 per share, which resulted in total year 2015 declared dividends of $3.075 per share. In December 2014, 3M’s Board of Directors declared a first-quarter 2015 dividend of $1.025 per share (pa id in March 2015), which when added to second, third and fourth quarter 2014 declared dividends of $0.855 per share, resulted in total year 2014 declared dividends of $ 3.59 per share. In December 2013, 3M’s Board of Directors declared a first-quarter 2014 dividend of $0.855 per share (paid in March 2014). This resulted in total year 2013 declared dividends of $3.395 per share . Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M by Component Defined Benefit Debt and Cash Flow Accumulated Pension and Equity Hedging Other Cumulative Postretirement Securities, Instruments, Comprehensive Translation Plans Unrealized Unrealized Income (Millions) Adjustment Adjustment Gain (Loss) Gain (Loss) (Loss) Balance at December 31, 2012, net of tax: $ $ $ $ $ Other comprehensive income (loss), before tax: Amounts before reclassifications — Amounts reclassified out — — Total other comprehensive income (loss), before tax — Tax effect — Total other comprehensive income (loss), net of tax — Balance at December 31, 2013, net of tax: $ $ $ $ $ Other comprehensive income (loss), before tax: Amounts before reclassifications Amounts reclassified out — Total other comprehensive income (loss), before tax Tax effect Total other comprehensive income (loss), net of tax Impact from purchase of subsidiary shares — — Balance at December 31, 2014, net of tax $ $ $ — $ $ Other comprehensive income (loss), before tax: Amounts before reclassifications — Amounts reclassified out — — Total other comprehensive income (loss), before tax — Tax effect — Total other comprehensive income (loss), net of tax — Balance at December 31, 2015, net of tax: $ $ $ — $ $ Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but tax effects within cumulative translation does include impacts from items such as net investment hedge transactions. Reclassification adjustments are made to avoid double counting in comprehensive income items that are also recorded as part of net income. Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M Amounts Reclassified from Accumulated Other Comprehensive Income (Millions) Year ended Year ended Year ended Details about Accumulated Other December 31, December 31, December 31, Location on Income Comprehensive Income Components 2015 2014 2013 Statement Gains (losses) associated with, defined benefit pension and postretirement plans amortization Transition asset $ $ $ See Note 11 Prior service benefit See Note 11 Net actuarial loss See Note 11 Curtailments/Settlements — — See Note 11 Total before tax Tax effect Provision for income taxes Net of tax $ $ $ Debt and equity security gains (losses) Sales or impairments of securities $ — $ $ — Selling, general and administrative expenses Total before tax — — Tax effect — — — Provision for income taxes Net of tax $ — $ $ — Cash flow hedging instruments gains (losses) Foreign currency forward/option contracts $ $ $ Cost of sales Foreign currency forward contracts — — Interest expense Commodity price swap contracts Cost of sales Interest rate swap contracts Interest expense Total before tax Tax effect Provision for income taxes Net of tax $ $ $ Total reclassifications for the period, net of tax $ $ $ Purchase and Sale of Subsidiary Shares On September 1, 2014, 3M (via Sumitomo 3M Limited) purchased Sumitomo Electric Industries, Ltd.’s 25 percent interest in 3M’s consolidated Sumitomo 3M Limited subsidiary for 90 billion Japanese Yen. Upon completion of the transaction, 3M owned 100 percent of Sumitomo 3M Limited. This transaction was recorded as a financing activity (Purchase of noncontrolling interest) in the statement of cash flows. In April 2014, 3M purchased the remaining noncontrolling interest in a consolidated 3M subsidiary for an immaterial amount, which was classified as a financing activity (Purchase of noncontrolling interest) in the consolidated statement of cash flows. The following table summarizes the effects of these 2014 transactions on equity attributable to 3M Company shareholders: Year ended (Millions) December 31, 2014 Net income attributable to 3M $ Impact of purchase of subsidiary shares Change in 3M Company shareholders’ equity from net income attributable to 3M and impact of purchase of subsidiary shares $ In March 2013, 3M sold shares in 3M India Limited, a subsidiary of the Company, in return for $8 million. The noncontrolling interest shares of this subsidiary trade on a public exchange in India. This sale of shares complied with an amendment to Indian securities regulations that required 3M India Limited, as a listed company, to achieve a minimum public shareholding of at least 25 percent. As a result of this transaction, 3M’s ownership in 3M India Limited was reduced from 76 percent to 75 percent. The $8 million received in the first quarter of 2013 was classified as other financing activity in the consolidated statement of cash flows. Because the Company retained its controlling interest, the sale resulted in an increase in 3M Company shareholder’s equity of $7 million and an increase in noncontrolling interest of $1 million. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Elements | |
Supplemental Cash Flow Information | NOTE 7. Supplemental Cash Flow Information (Millions) 2015 2014 2013 Cash income tax payments, net of refunds $ $ $ Cash interest payments Capitalized interest Cash interest payments include interest paid on debt and capital lease balances, including net interest payments/receipts related to accreted debt discounts/premiums, payment of debt issue costs, as well as net interest payments/receipts associated with interest rate swap contracts. Individual amounts in the Consolidated Statement of Cash Flows exclude the impacts of acquisitions, divestitures and exchange rate impacts, which are presented separately. Transactions related to investing and financing activities with significant non-cash components are as follows: · During the fourth quarter of 2014, 3M sold and leased-back, under a capital lease, certain recently constructed machinery and equipment in return for a municipal bond with the City of Nevada, Missouri valued at approximately $15 million as of the transaction date. · During the third quarter of 2013, 3M sold its equity interest in a non-strategic investment in exchange for a note receivable of approximately $24 million, which is considered non-cash investing activity. As a result of this transaction, in the third quarter of 2013, 3M recorded a pre-tax gain of $18 million in its Health Care business segment. In October 2013, cash was received for the note receivable and is reflected in other investing activity in the consolidated statement of cash flows for the year ended December 31, 2013. · During the second quarter of 2013, the Company’s Sumitomo 3M Limited subsidiary moved its administrative headquarters to a new leased location and sold the former site under an installment sale arrangement. As a result, at the time of the closing of the sale transaction, the Company received certain cash proceeds (included in proceeds from sale of property, plant and equipment in the consolidated statement of cash flows) and recorded a note receivable (due in quarterly installments through the first quarter of 2016) of $78 million and deferred profit of $49 million (both based on the foreign currency exchange rate at the time of closing). Remaining quarterly installments are due through the first quarter of 2016 and will be included in other investing activities in the consolidated statement of cash flows. Deferred profit is reduced and recognized into income in connection with such quarterly installments. In addition, as discussed in Note 6, in the fourth quarter of 2014, 3M’s Board of Directors declared a first-quarter 2015 dividend of $1.025 per share (pa id in March 2015), which reduced 3M’s stockholders equity and increased other current liabilities as of December 2014 by $648 million. In the fourth quarter of 2013, 3M’s Board of Directors declared a first-quarter 2014 dividend of $0.855 per share (paid in March 2014). This reduced 3M’s stockholders equity and increased other current liabilities as of December 31, 2013 by $567 million. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | NOTE 8. Income Taxes Income Before Income Taxes (Millions) 2015 2014 2013 United States $ $ $ International Total $ $ $ Provision for Income Taxes (Millions) 2015 2014 2013 Currently payable Federal $ $ $ State International Deferred Federal State International Total $ $ $ Components of Deferred Tax Assets and Liabilities (Millions) 2015 2014 Deferred tax assets: Accruals not currently deductible Employee benefit costs $ $ Product and other claims Miscellaneous accruals Pension costs Stock-based compensation Net operating/capital loss carryforwards Foreign tax credits Inventory Other — Gross deferred tax assets Valuation allowance Total deferred tax assets $ $ Deferred tax liabilities: Product and other insurance receivables $ $ Accelerated depreciation Intangible amortization Currency translation Other — Total deferred tax liabilities $ $ Net deferred tax assets (liabilities) $ $ The net deferred tax assets are included as components of Other Assets and Other Liabilities within the Consolidated Balance Sheet. See Note 5 “Supplemental Balance Sheet Information” for further details. As of December 31, 2015 , the Company had tax effected operating losses, capital losses, and tax credit carryovers for federal (approximately $31 million), state (approximately $2 million), and international (approximately $76 million), with all amounts before valuation allowances. The federal tax attribute carryovers will expire after 15 to 20 years, the state after five to 10 years, and the majority of international after four years with the remaining international expiring in one year or with an indefinite carryover period. The tax attributes being carried over arise as certain jurisdictions may have tax losses or may have inabilities to utilize certain losses without the same type of taxable income. As of December 31, 2015 , the Company has provided $31 million of valuation allowance against certain of these deferred tax assets based on management’s determination that it is more-likely-than-not that the tax benefits related to these assets will not be realized. Reconciliation of Effective Income Tax Rate 2015 2014 2013 Statutory U.S. tax rate % % % State income taxes - net of federal benefit International income taxes - net U.S. research and development credit Reserves for tax contingencies Domestic Manufacturer’s deduction All other - net Effective worldwide tax rate % % % The effective tax rate for 2015 was 29.1 percent, compared to 28.9 percent in 2014 , an increase of 0.2 percentage points, impacted by several factors. Factors which increased the Company’s effective tax rate included international taxes, which were impacted by changes in foreign currency rates and changes to the geographic mix of income before taxes, and other items. Combined, these factors increased the Company’s effective tax rate by 2.4 percentage points. This increase was partially offset by a 2.2 percentage point decrease, which related to the remeasurements of 3M’s uncertain tax positions, including the restoration of tax basis on certain assets for which depreciation deductions were previously limited, and increases in the domestic manufacturer’s deduction and U.S. research and development credit benefits. T he effective tax rate for 2014 was 28.9 percent, compared to 28.1 percent in 2013 , an increase of 0.8 percentage points, impacted by many factors. Factors which increased the Company’s effective tax rate included a one-time international tax impact related to the establishment of the supply chain center of expertise in Europe, decreased U.S. research and development credit in 2014 compared to 2013 due to two years inclusion as a result of the reinstatement in 2013, decreased domestic manufacturer’s deduction, and other items. Combined, these factors increased the Company’s effective tax rate by 1.6 percentage points. This increase was partially offset by a 0.8 percentage point decrease, which related to both lower 3M income tax reserves for 2014 when compared to 2013 and international taxes as a result of changes to the geographic mix of income before taxes. The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2005. The IRS has completed its field examination of the Company’s U.S. federal income tax returns for the years 2005 through 2013. The Company protested certain IRS positions within these tax years and entered into the administrative appeals process with the IRS. In December 2012, the Company received a statutory notice of deficiency for the 2006 year. The Company filed a petition in Tax Court in the first quarter of 2013 relating to the 2006 tax year. Currently, the Company is under examination by the IRS for its U.S. federal income tax returns for the years 2014 and 2015. It is anticipated that the IRS will complete its examination of the Company for 2014 by the end of the first quarter of 2016 and for 2015 by the end of the first quarter of 2017. As of December 31, 2015, the IRS has not proposed any significant adjustments to the Company’s tax positions for which the Company is not adequately reserved. Payments relating to other proposed assessments arising from the 2005 through 2015 examinations may not be made until a final agreement is reached between the Company and the IRS on such assessments or upon a final resolution resulting from the administrative appeals process or judicial action. In addition to the U.S. federal examination, there is also audit activity in several U.S. state and foreign jurisdictions. 3M anticipates changes to the Company’s uncertain tax positions due to the closing and resolution of audit issues for various audit years mentioned above and closure of statutes. The Company is not currently able to reasonably estimate the amount by which the liability for unrecognized tax benefits will increase or decrease during the next 12 months as a result of the ongoing income tax authority examinations. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (UTB) is as follows: Federal, State and Foreign Tax (Millions) 2015 2014 2013 Gross UTB Balance at January 1 $ $ $ Additions based on tax positions related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years Settlements Reductions due to lapse of applicable statute of limitations Gross UTB Balance at December 31 $ $ $ Net UTB impacting the effective tax rate at December 31 $ $ $ The total amount of UTB, if recognized, would affect the effective tax rate by $369 million as of December 31, 2015 , $265 million as of December 31, 2014 , and $262 million as of December 31, 2013 . The ending net UTB results from adjusting the gross balance for items such as Federal, State, and non-U.S. deferred items, interest and penalties, and deductible taxes. The net UTB is included as components of Other Assets, Accrued Income Taxes, and Other Liabilities within the Consolidated Balance Sheet. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in tax expense. The Company recognized in the consolidated statement of income on a gross basis approximately $2 million of expense, $14 million of benefit, and $22 million of expense in 2015 , 2014 , and 2013 , respectively. The amount of interest and penalties recognized may be an expense or benefit due to new or remeasured unrecognized tax benefit accruals. At December 31, 2015 , and December 31, 2014 , accrued interest and penalties in the consolidated balance sheet on a gross basis were $45 million and $44 million, respectively. Included in these interest and penalty amounts are interest and penalties related to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. As a result of certain employment commitments and capital investments made by 3M, income from certain manufacturing activities in the following countries is subject to reduced tax rates or, in some cases, is exempt from tax for years through the following: Taiwan (2015), China (2016), Korea (2018), Brazil (2023), Switzerland (2024), and Singapore (2025). The income tax benefits attributable to the tax status of these subsidiaries are estimated to be $114 million ( 18 cents per diluted share) in 2015 , $99 million ( 15 cents per diluted share) in 2014 , and $87 million ( 13 cents per diluted share) in 2013 . The Company has not provided deferred taxes on unremitted earnings attributable to international companies that have been considered to be reinvested indefinitely, with the exception of an acquired entity. These earnings relate to ongoing operations and were approximately $1 2 billion as of December 31, 2015 . Because of the availability of U.S. foreign tax credits, the multiple avenues in which to repatriate the earnings to minimize tax cost, and because a large portion of these earnings are not liquid, it is not practical to determine the income tax liability that would be payable if such earnings were not reinvested indefinitely . |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2015 | |
Marketable Securities | |
Marketable Securities | NOTE 9. Marketable Securities The Company invests in agency securities, corporate securities, asset-backed securities and other securities. The following is a summary of amounts recorded on the Consolidated Balance Sheet for marketable securities (current and non-current). December 31, December 31, (Millions) 2015 2014 U.S. government agency securities $ — $ Foreign government agency securities Corporate debt securities Commercial paper — Certificates of deposit/time deposits U.S. treasury securities — U.S. municipal securities — Asset-backed securities: Automobile loan related Credit card related Equipment lease related Other Asset-backed securities total Current marketable securities $ $ U.S. municipal securities $ $ Non-current marketable securities $ $ Total marketable securities $ $ Classification of marketable securities as current or non-current is based on the nature of the securities and availability for use in current operations. At December 31, 2015 a nd 2014 , gross unrealized gains and/or losses (pre-tax) were not material. Refer to Note 6 for a table that provides the net realized gains (losses) related to sales or impairments of debt and equity securities, which includes marketable securities. The gross amounts of the realized gains or losses were not material. Cost of securities sold use the first in, first out (FIFO) method. Since these marketable securities are classified as available-for-sale securities, changes in fair value will flow through other comprehensive income, with amounts reclassified out of other comprehensive income into earnings upon sale or “other-than-temporary” impairment. 3M reviews impairments associated with its marketable securities in accordance with the measurement guidance provided by ASC 320 , Investments-Debt and Equity Securities , when determining the classification of the impairment as “temporary” or “other-than-temporary”. A temporary impairment charge results in an unrealized loss being recorded in the other comprehensive income component of shareholders’ equity. Such an unrealized loss does not reduce net income attributable to 3M for the applicable accounting period because the loss is not viewed as other-than-temporary. The factors evaluated to differentiate between temporary and other-than-temporary include the projected future cash flows, credit ratings actions, and assessment of the credit quality of the underlying collateral, as well as other factors. The balance at December 31, 2015 , for marketable securities by contractual maturity are shown below. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties. (Millions) December 31, 2015 Due in one year or less $ Due after one year through five years Due after five years through ten years Due after ten years — Total marketable securities $ 3M has a diversified marketable securities portfolio of $127 million as of December 31, 2015 . Within this portfolio, current asset-backed securities (estimated fair value of $57 million) primarily include interests in automobile loans, credit cards and equipment leases. 3M’s investment policy allows investments in asset-backed securities with minimum credit ratings of Aa2 by Moody’s Investors Service or AA by Standard & Poor’s or Fitch Ratings or DBRS. Asset-backed securities must be rated by at least two of the aforementioned rating agencies, one of which must be Moody’s Investors Service or Standard & Poor’s. At December 31, 2015 , all asset-backed security investments were in compliance with this policy. Approximately 75.8 percent of all asset-backed security investments were rated AAA or A-1+ by Standard & Poor’s and/or Aaa or P-1 by Moody’s Investors Service and/or AAA or F1+ by Fitch Ratings. Interest rate risk and credit risk related to the underlying collateral may impact the value of investments in asset-backed securities, while factors such as general conditions in the overall credit market and the nature of the underlying collateral may affect the liquidity of investments in asset-backed securities. 3M does not currently expect risk related to its holding in asset-backed securities to materially impact its financial condition or liquidity. |
Long-Term Debt and Short-Term B
Long-Term Debt and Short-Term Borrowings | 12 Months Ended |
Dec. 31, 2015 | |
Long-Term Debt and Short-Term Borrowings | |
Long-Term Debt and Short-Term Borrowings | NOTE 10. Long-Term Debt and Short-Term Borrowings The following debt tables reflect effective interest rates, which include the impact of interest rate swaps, as of December 31, 2015 . If the debt was issued on a combined basis, the debt has been separated to show the impact of the fixed versus floating effective interest rates. Carrying value includes the impact of debt issuance costs and fair value hedging activity. Long-term debt and short-term borrowings as of December 31 consisted of the following: Long-Term Debt Currency/ Effective Final (Millions) Fixed vs. Interest Maturity Carrying Value Description / 2015 Principal Amount Floating Rate Date 2015 2014 Medium-term note ($1 billion) USD Fixed % $ $ Medium-term note ($650 million) USD Fixed % Medium-term note ( 500 million Euros) Euro Floating % Medium-term note ($450 million) USD Floating % — Medium-term note ($600 million) USD Floating % Medium-term note ($25 million) USD Fixed % Medium-term note (650 million Euros) Euro Floating % — Medium-term note ($300 million) USD Floating % — Medium-term note ($200 million) USD Fixed % — Eurobond (300 million Euros) Euro Floating % Eurobond (300 million Euros) Euro Fixed % Medium-term note ($600 million) USD Fixed % Medium-term note (600 million Euros) Euro Fixed % — Medium-term note ($550 million) USD Fixed % — Medium-term note (750 million Euros) Euro Fixed % 30-year debenture ($330 million) USD Fixed % Medium-term note (500 million Euros) Euro Fixed % — 30-year bond ($750 million) USD Fixed % Floating rate note ($96 million) USD Floating % Medium-term note ($325 million) USD Fixed % Floating rate note ($55 million) USD Floating % Other borrowings Various % 2016-2040 Total long-term debt $ $ Less: current portion of long-term debt Long-term debt (excluding current portion) $ $ Post-Swap Borrowing (Long-Term Debt, Including Current Portion) 2015 2014 Carrying Effective Carrying Effective (Millions) Value Interest Rate Value Interest Rate Fixed-rate debt $ % $ % Floating-rate debt % % Total long-term debt, including current portion $ $ Short-Term Borrowings and Current Portion of Long-Term Debt Effective Carrying Value (Millions) Interest Rate 2015 2014 Current portion of long-term debt % $ $ U.S. dollar commercial paper — % — — Other borrowings % Total short-term borrowings and current portion of long-term debt $ $ In 2015, other short-term borrowings primarily consisted of bank borrowings by international subsidiaries, primarily Japan and Korea. Maturities of Long-term Debt Maturities of long-term debt for the five years subsequent of December 31, 2015 are as follows (in millions): After 2016 2017 2018 2019 2020 2020 Total $ $ $ $ $ $ $ Long-term debt payments due in 2016 and 2017 include floating rate notes totaling $126 million (classified as current portion of long-term debt), and $96 million (included as a separate floating rate note in the long-term debt table), respectively, as a result of put provisions associated with these debt instruments. Credit Facilities In August 2014, 3M amended and extended its existing $1.5 billion five -year revolving credit facility to a $2.25 billion five-year agreement expiring in August 2019. This credit agreement includes a provision under which 3M may request an increase of up to $2.25 billion, bringing the total facility up to $4.5 billion (at the lender’s discretion). This facility was undrawn at December 31, 2015 . Under the $2.25 billion credit agreement, the Company is required to maintain its EBITDA to Interest Ratio as of the end of each fiscal quarter at not less than 3.0 to 1. This is calculated (as defined in the agreement) as the ratio of consolidated total EBITDA for the four consecutive quarters then ended to total interest expense on all funded debt for the same period. At December 31, 2015 , this ratio was approximately 56 to 1. Debt covenants do not restrict the payment of dividends. Other Credit Facilities Apart from the committed revolving facility, a n additional $241 million in stand-alone letters of credit and $18 million in bank guarantees were also issued and outstanding at December 31, 2015 . These lines of credit are utilized in connection with normal business activities. Long-Term Debt Issuances The principal amounts, interest rates and maturity dates of individual long-term debt issuances can be found in the long-term debt table found at the beginning of this note. In May 2015, 3M issued 1.750 billion Euros aggregate principal amount of medium term notes. In August 2015, 3M issued $1.500 billion aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered into two interest rate swaps as fair value hedges of a portion of the fixed interest rate medium-term note obligation. The first converted a $450 million three -year fixed rate note, and the second converted $300 million of a five -year fixed rate note included in this issuance to an interest rate based on a floating three-month LIBOR index. In June 2014, 3M issued $ 950 million aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered into an interest rate swap to convert $600 million of a $625 million note included in this issuance to an interest rate based on a floating three-month LIBOR index as a fair value hedge of a portion of the fixed interest rate medium-term note obligation. In November 2014, the Company issued 1.250 billion Euros aggregate principal amount of medium-term notes. In November 2013, 3M issued a Eurobond for an amount of 600 million Euros. Upon debt issuance, 3M completed a fixed-to-floating interest rate swap on a notional amount of 300 million Euros. Long-Term Debt Maturities In July 2014, 3M retired at maturity 1.025 billion Euros of seven -year 5.0% fixed rate Eurobonds. In December 2012, 3M entered into a three -year 66 million British Pound (approximately $106 million based on agreement date exchange rates) committed credit facility agreement with JP Morgan Chase Bank, which was fully drawn as of December 31, 2012. 3M repaid the balance in 2014. In August 2013, 3M repaid $850 million (principal amount) of medium-term notes. Floating Rate Notes At various times, 3M has issued floating rate notes containing put provisions. 3M would be required to repurchase these securities at various prices ranging from 99 percent to 100 percent of par value according to the reduction schedules for each security. In December 2004, 3M issued a forty -year $60 million floating rate note, with a rate based on a floating LIBOR index. Under the terms of this floating rate note due in 2044, holders have an annual put feature at 100 percent of par value from 2014 and every anniversary thereafter until final maturity. Under the terms of the floating rate notes due in 2027, 2040 and 2041, holders have put options that commence ten years from the date of issuance and each third anniversary thereafter until final maturity at prices ranging from 99 percent to 100 percent of par value. In 2008 through 2015, 3M was required to repurchase an immaterial amount of principal on the aforementioned floating rate notes. |
Pension and Postretirement Bene
Pension and Postretirement Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Pension and Postretirement Benefit Plans | |
Pension and Postretirement Benefit Plans | NOTE 11. Pension and Postretirement Benefit Plans 3M has company-sponsored retirement plans covering substantially all U.S. employees and many employees outside the United States. In total, 3M has over 80 defined benefit plans in 28 countries. Pension benefits associated with these plans generally are based on each participant’s years of service, compensation, and age at retirement or termination. The primary U.S. defined-benefit pension plan was closed to new participants effective January 1, 2009. The Company also provides certain postretirement health care and life insurance benefits for substantially all of its U.S. employees who reach retirement age while employed by the Company. Most international employees and retirees are covered by government health care programs. The cost of company-provided postretirement health care plans for international employees is not material and is combined with U.S. amounts in the tables that follow. The Company also sponsors employee savings plans under Section 401(k) of the Internal Revenue Code. These plans are offered to substantially all regular U.S. employees. For eligible employees hired prior to January 1, 2009, employee 401(k) contributions of up to 6% of eligible compensation were matched in cash at rates of 60% or 75% , depending on the plan in which the employee participates. Employees hired on or after January 1, 2009, received a cash match of 100% for employee 401(k) contributions of up to 6% of eligible compensation and also received an employer retirement income account cash contribution of 3% of the participant’s total eligible compensation. Beginning on January 1, 2016, for U.S. employees, the Company reduced its match on employee 401(k) contributions. For eligible employees hired prior to January 1, 2009, employee 401(k) contributions of up to 5% of eligible compensation will be matched in cash at rates of 45% or 60% , depending on the plan in which the employee participates. Employees hired on or after January 1, 2009, will receive a cash match of 100% for employee 401(k) contributions of up to 5% of eligible compensation and will also continue to receive an employer retirement income account cash contribution of 3% of the participant’s total eligible compensation. All contributions are invested in a number of investment funds pursuant to the employees’ elections. Employer contributions to the U.S. defined contribution plans were $165 million, $153 million and $136 million for 2015 , 2014 and 2013 , respectively. 3M subsidiaries in various international countries also participate in defined contribution plans. Employer contributions to the international defined contribution plans were $77 million, $75 million and $71 million for 2015 , 2014 and 2013 , respectively. The Company has made deposits for its defined benefit plans with independent trustees. Trust funds and deposits with insurance companies are maintained to provide pension benefits to plan participants and their beneficiaries. There are no plan assets in the non-qualified plan due to its nature. For its U.S. postretirement health care and life insurance benefit plans, the Company has set aside amounts at least equal to annual benefit payments with an independent trustee. 3M’s primary U.S. qualified defined benefit plan does not have a mandatory cash contribution because the Company has a significant credit balance from previous discretionary contributions that can be applied to any Pension Protection Act funding requirements. As a result of changes made to its U.S. postretirement health care benefit plans in 2010, the Company has transitioned all current and future retirees to a savings account benefits-based plan. These changes became effective beginning January 1, 2013, for all Medicare eligible retirees and their Medicare eligible dependents and became effective beginning January 1, 2016, for all non-Medicare eligible retirees and their eligible dependents. In August 2015, 3M modified the 3M Retiree Welfare Benefit Plan postretirement medical benefit reducing the future benefit for participants not retired as of January 1, 2016. For participants retiring after January 1, 2016, t he Retiree Medical Savings Account (RMSA) is no longer credited with interest and the indexation on both the RMSA and the Medicare Health Reimbursement Arrangement is reduced from 3 percent to 1.5 percent per year (for those employees who are eligible for these accounts). Also effective January 1, 2016, 3M no longer offer s 3M Retiree Health Care Accounts to new hires. Due to these changes the plan was re-measured in the third quarter of 2015, resulting in a decrease to the projected benefit obligation liability of approximately $233 million, and a related increase to shareholders’ equity, specifically accumulated other comprehensive income. In the third quarter of 2014, former U.S. employees who have a pension benefit for which they have not begun receiving payment (term vested) were offered a lump sum payout of their pension benefit. As a result of this action, the projected benefit obligation (PBO) liability was reduced in the fourth quarter of 2014 by approximately $270 million, with the actual cash payout of approximately the same amount paid from the plan’s assets in the fourth quarter of 2014. The PBO liability reduction was 34% of the term vested eligible PBO and a 2% reduction in the overall U.S. pension PBO liability based on the December 31, 2013, valuation. There was no pension expense impact as a result of this action on 3M’s consolidated statement of income in 2014. In the fourth quarter of 2014, 3M’s Board of Directors approved an amendment of the U.S. defined benefit pension plan to include a lump sum payment option for employees that have vested retirement benefits who commence their pension January 1, 2015, or later. This option is also available to vested employees who leave 3M before becoming eligible to retire at the time of termination. This change reduced 3M’s year-end 2014 U.S . pension PBO liability by approximately $266 million. As of December 31, 2014, the Company converted to the “RP 2014 Mortality Tables” and updated the mortality improvement scale it used for calculating the year-end 2014 U.S. defined benefit pension annuitant and postretirement obligations and 2015 expense. The impact of this change increased the year-end 2014 U.S. pension PBO by approximately $820 million and the U.S. accumulated postretirement benefit obligation by approximately $100 million. In March 2015, 3M Japan modified the Japan Limited Defined Benefit Corporate Pension Plan (DBCPP). Beginning July 1, 2015, eligible employees receive a company provided contribution match of 6.12% of their eligible salary to their defined contribution plan. Employees no longer earn additional service towards their defined benefit pension plans after July 1, 2015, except for eligible salaries above the statutory defined contribution limits. As a result of this plan modification, the Company re-measured the DBCPP, which resulted in a $17 million pre-tax curtailment gain for the year ending December 31, 2015. I n March 2015, 3M also received a favorable Internal Revenue Service tax determination letter to terminate a frozen defined benefit pension plan of one of 3M’s acquired subsidiaries. By the end of 2015, th is p lan made final distribut ions of $16 million to participants. The Company also had other settlements, curtailments, special termination benefits and other items in 2015 aggregating to the amounts indicated in these components in the applicable tables that follow. 3M was informed during the first quarter of 2009, that the general partners of WG Trading Company, in which 3M’s benefit plans hold limited partnership interests, are the subject of a criminal investigation as well as civil proceedings by the SEC and CFTC (Commodity Futures Trading Commission). In March 2011, over the objections of 3M and six other limited partners of WG Trading Company, the district court judge ruled in favor of the court appointed receiver’s proposed distribution plan (and in April 2013, the United States Court of Appeals for the Second Circuit affirmed the district court’s ruling). The benefit plan trustee holdings of WG Trading Company interests were adjusted to reflect the decreased estimated fair market value, inclusive of estimated insurance proceeds, as of the annual measurement dates. The Company has insurance that it believes, based on what is currently known, will result in the probable recovery of a portion of the decrease in original asset value. In the first quarter of 2014, 3M and certain 3M benefit plans filed a lawsuit in the U.S. District Court for the District of Minnesota against five insurers seeking insurance coverage for the WG Trading Company claim. In September 2015, the court ruled in favor of the defendant insurance companies on a motion for summary judgment and dismissed the lawsuit. In October 2015, 3M and the 3M benefit plans filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit. As of the 2015 measurement date, these holdings represented less than one half of one percent of 3M’s fair value of total plan assets. 3M currently believes that the resolution of these events will not have a material adverse effect on the consolidated financial position of the Company. The following tables include a reconciliation of the beginning and ending balances of the benefit obligation and the fair value of plan assets as well as a summary of the related amounts recognized in the Company’s consolidated balance sheet as of December 31 of the respective years. 3M also has certain non-qualified unfunded pension and postretirement benefit plans, inclusive of plans related to supplement/excess benefits for employees impacted by particular relocations and other matters, that individually and in the aggregate are not significant and which are not included in the tables that follow. The obligations for these plans are included within other liabilities in the Company’s consolidated balance sheet and aggregated less than $35 million as of December 31, 2015 and 2014 . Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2015 2014 2015 2014 2015 2014 Change in benefit obligation Benefit obligation at beginning of year $ $ $ $ $ $ Acquisitions/Transfers in — — — — — Service cost Interest cost Participant contributions — — Foreign exchange rate changes — — Plan amendments — — Actuarial (gain) loss Medicare Part D Reimbursement — — — — Benefit payments Settlements, curtailments, special termination benefits and other — Benefit obligation at end of year $ $ $ $ $ $ Change in plan assets Fair value of plan assets at beginning of year $ $ $ $ $ $ Acquisitions/Transfers in — — — — — Actual return on plan assets Company contributions Participant contributions — — Foreign exchange rate changes — — — — Benefit payments Settlements, curtailments, special termination benefits and other — — — Fair value of plan assets at end of year $ $ $ $ $ $ Funded status at end of year $ $ $ $ $ $ Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2015 2014 2015 2014 2015 2014 Amounts recognized in the Consolidated Balance Sheet as of Dec. 31, Non-current assets $ $ $ $ $ — $ — Accrued benefit cost Current liabilities Non-current liabilities Ending balance $ $ $ $ $ $ Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2015 2014 2015 2014 2015 2014 Amounts recognized in accumulated other comprehensive income as of Dec. 31, Net transition obligation (asset) $ — $ — $ $ $ — $ — Net actuarial loss (gain) Prior service cost (credit) Ending balance $ $ $ $ $ $ The balance of amounts recognized for international plans in accumulated other comprehensive income as of December 31 in the preceding table are presented based on the foreign currency exchange rate on that date. The pension accumulated benefit obligation represents the actuarial present value of benefits based on employee service and compensation as of the measurement date and does not include an assumption about future compensation levels. The accumulated benefit obligation of the U.S. pension plans was $14.834 billion and $15.335 billion at December 31, 2015 and 2014 , respectively. The accumulated benefit obligation of the international pension plans was $5.773 billion and $6.401 billion at December 31, 2015 and 2014 , respectively. The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of December 31: Qualified and Non-qualified Pension Plans United States International (Millions) 2015 2014 2015 2014 Projected benefit obligation $ $ $ $ Accumulated benefit obligation Fair value of plan assets Components of net periodic cost and other amounts recognized in other comprehensive income Net periodic benefit cost is recorded in cost of sales, selling, general and administrative expenses, and research, development and related expenses. Components of net periodic benefit cost and other changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31 follow: Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2015 2014 2013 2015 2014 2013 2015 2014 2013 Net periodic benefit cost (benefit) Service cost $ $ $ $ $ $ $ $ $ Interest cost Expected return on plan assets Amortization of transition (asset) obligation — — — — — — Amortization of prior service cost (benefit) Amortization of net actuarial (gain) loss Net periodic benefit cost (benefit) $ $ $ $ $ $ $ $ $ Settlements, curtailments, special termination benefits and other — — — — Net periodic benefit cost (benefit) after settlements, curtailments, special termination benefits and other $ $ $ $ $ $ $ $ $ Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss Amortization of transition (asset) obligation — — — — — — Prior service cost (benefit) — — — Amortization of prior service cost (benefit) Net actuarial (gain) loss Amortization of net actuarial (gain) loss Foreign currency — — — Total recognized in other comprehensive (income) loss $ $ $ $ $ $ $ $ $ Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss $ $ $ $ $ $ $ $ $ Amounts expected to be amortized from accumulated other comprehensive income into net periodic benefit costs over the next fiscal year Qualified and Non-qualified Pension Benefits Postretirement (Millions) United States International Benefits Amortization of transition (asset) obligation $ — $ $ — Amortization of prior service cost (benefit) Amortization of net actuarial (gain) loss Total amortization expected over the next fiscal year $ $ $ The Company primarily amortizes amounts recognized as prior service cost (benefit) over the average future service period of active employees at the date of the amendment. Weighted-average assumptions used to determine benefit obligations as of December 31 Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits 2015 2014 2013 2015 2014 2013 2015 2014 2013 Discount rate % % % % % % % % % Compensation rate increase % % % % % % N/A N/A N/A Weighted-average assumptions used to determine net cost for years ended December 31 Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits 2015 2014 2013 2015 2014 2013 2015 2014 2013 Discount rate % % % % % % % % % Expected return on assets % % % % % % % % % Compensation rate increase % % % % % % N/A N/A N/A The Company is in the process of transitioning all current and future retirees in the U.S. postretirement health care benefit plans to a savings account benefits-based plan. The contributions provided by the Company to the health savings accounts increase 3 percent per year for employees who retired prior to January 1, 2016 and increase 1.5 percent for employees who retire on or after January 1, 2016. Therefore, the Company no longer has material exposure to health care cost inflation. The Company determines the discount rate used to measure plan liabilities as of the December 31 measurement date for the pension and postretirement benefit plans, which is also the date used for the related annual measurement assumptions. The discount rate reflects the current rate at which the associated liabilities could be effectively settled at the end of the year. The Company sets its rate to reflect the yield of a portfolio of high quality, fixed-income debt instruments that would produce cash flows sufficient in timing and amount to settle projected future benefits. Using this methodology, the Company determined a discount rate of 4.47% for pension and 4.48% for postretirement benefits to be appropriate for its U.S. plans as of December 31, 2015 , which is an increase of 0.37 percentage points and 0.41 percentage points, respectively, from the rates used as of December 31, 2014 . For the international pension and postretirement plans the discount rates also reflect the current rate at which the associated liabilities could be effectively settled at the end of the year. If the country has a deep market in corporate bonds the Company matches the expected cash flows from the plan either to a portfolio of bonds that generate sufficient cash flow or a notional yield curve generated from available bond information. In countries that do not have a deep market in corporate bonds, government bonds are considered with a risk premium to approximate corporate bond yields. Beginning in 2016, 3M changed the method used to estimate the service and interest cost components of the net periodic pension and other postretirement benefit costs. The new method measures service and interest costs separately using the spot yield curve approach applied to each corresponding obligation. Service costs are determined based on duration-specific spot rates applied to the service cost cash flows. The interest cost calculation is determined by applying duration-specific spot rates to the year-by-year projected benefit payments. The spot yield curve approach does not affect the measurement of the total benefit obligations as the change in service and interest costs offset in the actuarial gains and losses recorded in other comprehensive income. The Company changed to the new method to provide a more precise measure of service and interest costs by improving the correlation between the projected benefit cash flows and the discrete spot yield curve rates. The Company accounted for this change as a change in estimate prospectively beginning in the first quarter of 2016. For the primary U.S. qualified pension plan, the Company’s assumption for the expected return on plan assets was 7.75% in 2015 . Projected returns are based primarily on broad, publicly traded equity and fixed-income indices and forward-looking estimates of active portfolio and investment management. As of December 31, 2015 , the Company’s 2016 expected long-term rate of return on U.S. plan assets is 7.50% , a decrease of 0.25 percentage points from 2015 . The expected return assumption is based on the strategic asset allocation of the plan, long term capital market return expectations and expected performance from active investment management. The 2015 expected long-term rate of return is based on an asset allocation assumption of 25% global equities, 18% private equities, 41% fixed-income securities, and 16% absolute return investments independent of traditional performance benchmarks, along with positive returns from active investment management. The actual net rate of return on plan assets in 2015 was 0.7% . In 2014 the plan earned a rate of return of 13.0% and in 2013 earned a return of 6.0% . The average annual actual return on the plan assets over the past 10 and 25 years has been 7.8% and 10.0% , respectively. Return on assets assumptions for international pension and other post-retirement benefit plans are calculated on a plan-by-plan basis using plan asset allocations and expected long-term rate of return assumptions. During 2015 , the Company contributed $264 million to its U.S. and international pension plans and $3 million to its postretirement plans. During 2014 , the Company contributed $210 million to its U.S. and international pension plans and $5 million to its postretirement plans. In 2016 , the Company expects to contribute an amount in the range of $100 million to $200 million of cash to its U.S. and international retirement plans. The Company does not have a required minimum cash pension contribution obligation for its U.S. plans in 2016 . Future contributions will depend on market conditions, interest rates and other factors. Future Pension and Postretirement Benefit Payments The following table provides the estimated pension and postretirement benefit payments that are payable from the plans to participants. Qualified and Non-qualified Pension Benefits Postretirement (Millions) United States International Benefits 2016 Benefit Payments $ $ $ 2017 Benefit Payments 2018 Benefit Payments 2019 Benefit Payments 2020 Benefit Payments Next five years Plan Asset Management 3M’s investment strategy for its pension and postretirement plans is to manage the funds on a going-concern basis. The primary goal of the trust funds is to meet the obligations as required. The secondary goal is to earn the highest rate of return possible, without jeopardizing its primary goal, and without subjecting the Company to an undue amount of contribution risk. Fund returns are used to help finance present and future obligations to the extent possible within actuarially determined funding limits and tax-determined asset limits, thus reducing the potential need for additional contributions from 3M. The investment strategy has used long duration cash bonds and derivative instruments to offset a significant portion of the interest rate sensitivity of U.S. pension liabilities. Normally, 3M does not buy or sell any of its own securities as a direct investment for its pension and other postretirement benefit funds. However, due to external investment management of the funds, the plans may indirectly buy, sell or hold 3M securities. The aggregate amount of 3M securities are not considered to be material relative to the aggregate fund percentages. The discussion that follows references the fair value measurements of certain assets in terms of levels 1, 2 and 3. See Note 13 for descriptions of these levels. While the company believes the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. U.S. Pension Plans and Postretirement Benefit Plan Assets In order to achieve the investment objectives in the U.S. pension plans and U.S. postretirement benefit plans, the investment policies include a target strategic asset allocation. The investment policies allow some tolerance around the target in recognition that market fluctuations and illiquidity of some investments may cause the allocation to a specific asset class to vary from the target allocation, potentially for long periods of time. Acceptable ranges have been designed to allow for deviation from strategic targets and to allow for the opportunity for tactical over- and under-weights. The portfolios will normally be rebalanced when the quarter-end asset allocation deviates from acceptable ranges. The allocation is reviewed regularly by the named fiduciary of the plans. Approximately 39% of the postretirement benefit plan assets are in a 401(h) account. The 401(h) account assets are in the same trust as the primary U.S. pension plan and invested with the same investment objectives as the primary U.S. pension plan. The fair values of the assets held by the U.S. pension plans by asset class are as follows: Fair Value Measurements Using Inputs Considered as Fair Value at (Millions) Level 1 Level 2 Level 3 Dec. 31, Asset Class 2015 2014 2015 2014 2015 2014 2015 2014 Equities U.S. equities $ $ $ — $ — $ — $ — $ $ Non-U.S. equities — — — — Index and long/short equity funds* Total Equities $ $ $ — $ — $ — $ — $ $ Fixed Income U.S. government securities $ $ $ $ $ — $ — $ $ Non-U.S. government securities — — — Preferred and convertible securities — — U.S. corporate bonds — — Non-U.S. corporate bonds — — — — Derivative instruments — — Other* Total Fixed Income $ $ $ $ $ — $ — $ $ Private Equity Derivative instruments $ — $ — $ — $ — $ $ $ $ Growth equity — — — — Partnership investments* Total Private Equity $ $ $ — $ — $ $ $ $ Absolute Return Derivative instruments $ — $ — $ $ — $ — $ — $ $ — Fixed income and other — — Hedge fund/fund of funds* Partnership investments* Total Absolute Return $ $ $ $ $ — $ — $ $ Cash and Cash Equivalents Cash and cash equivalents $ $ $ $ $ — $ — $ $ Cash and cash equivalents, valued at net asset value* Total Cash and Cash Equivalents $ $ $ $ $ — $ — $ $ Total $ $ $ $ $ $ $ $ Other items to reconcile to fair value of plan assets $ $ Fair value of plan assets $ $ * In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets. The fair values of the assets held by the postretirement benefit plans by asset class are as follows: Fair Value Measurements Using Inputs Considered as Fair Value at (Millions) Level 1 Level 2 Level 3 Dec. 31, Asset Class 2015 2014 2015 2014 2015 2014 2015 2014 Equities U.S. equities $ $ $ — $ — $ — $ — $ $ Non-U.S. equities — — — — Index and long/short equity funds* Total Equities $ $ $ — $ — $ — $ — $ $ Fixed Income U.S. government securities $ $ $ $ $ — $ — $ $ Non-U.S. government securities — — — — U.S. corporate bonds — — — — Non-U.S. corporate bonds — — — — Derivative instruments — — — — Other* — Total Fixed Income $ $ $ $ $ — $ — $ $ Private Equity Derivative instruments $ — $ — $ — $ — $ $ $ $ Growth equity — — — — Partnership investments* Total Private Equity $ $ $ — $ — $ $ $ $ Absolute Return Fixed income and other $ $ $ $ $ — $ — $ $ Hedge fund/fund of funds* Partnership investments* Total Absolute Return $ $ $ $ $ — $ — $ $ Cash and Cash Equivalents Cash and cash equivalents $ $ $ — $ $ — $ — $ $ Cash and cash equivalents, valued at net asset value* Total Cash and Cash Equivalents $ $ $ — $ $ — $ — $ $ Total $ $ $ $ $ $ $ $ Other items to reconcile to fair value of plan assets $ $ Fair value of plan assets $ $ *In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets. Publicly traded equities are valued at the closing price reported in the active market in which the individual securities are traded. Fixed income includes derivative instruments such as credit default swaps, interest rate swaps and futures contracts. Corporate debt includes bonds and notes, asset backed securities, collateralized mortgage obligations and private placements. Swaps and derivative instruments are valued by the custodian using closing market swap curves and market derived inputs. U.S. government and government agency bonds and notes are valued at the closing price reported in the active market in which the individual security is traded. Corporate bonds and notes, asset backed securities and collateralized mortgage obligations are valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks. Private placements are valued by the custodian using recognized pricing services and sources. The private equity portfolio is a diversified mix of derivative instruments, growth equity and partnership interests. Derivative investments are written options that are valued by independent parties using market inputs and valuation models. Growth equity investments are valued at the closing price reported in the active market in which the individual securities are traded. Absolute return consists primarily of partnership interests in hedge funds, hedge fund of funds or other private fund vehicles. Corporate debt instruments are valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risk ratings. Other items to reconcile to fair value of plan assets include the net of insurance receivables for WG Trading Company, interest receivables, amounts due for securities sold, amounts payable for securities purchased and interest payable. The balances of and changes in the fair values of the U.S. pension plans’ and postretirement plans’ level 3 assets for the period s ended December 31, 2015 and 2014 were not material. International Pension Plans Assets Outside the U.S., pension plan assets are typically managed by decentralized fiduciary committees. The disclosure below of asset categories is presented in aggregate for over 70 defined benefit plans in 27 countries; however, there is significant variation in asset allocation policy from country to country. Local regulations, local funding rules, and local financial and tax considerations are part of the funding and investment allocation process in each country. The Company provides standard funding and investment guidance to all international plans with more focused guidance to the larger plans. Each plan has its own strategic asset allocation. The asset allocations are reviewed periodically and rebalanced when necessary. The fair values of the assets held by the international pension plans by asset class are as follows: Fair Value Measurements Using Inputs Considered as Fair Value at (Millions) Level 1 Level 2 Level 3 Dec. 31, Asset Class 2015 2014 2015 2014 2015 2014 2015 2014 Equities Growth equities $ $ $ $ $ — $ — $ $ Value equities — — Core equities Equities, valued at net asset value* Total Equities $ $ $ $ $ $ $ $ Fixed Income Domestic government $ $ $ $ $ $ $ $ Foreign government — — — Corporate debt securities Fixed income securities, valued at net asset value* Total Fixed Income $ $ $ $ $ $ $ $ Private Equity Real estate $ $ $ $ $ $ $ $ Real estate, valued at net asset value* Partnership investments* Total Private Equity $ $ $ $ $ $ $ $ Absolute Return Derivatives $ $ — $ $ $ — $ — $ $ Insurance — — — — Other — — Other, valued at net asset value* Hedge funds* Total Absolute Return $ $ — $ $ $ $ $ $ Cash and Cash Equivalents Cash and cash equivalents $ $ $ $ $ — $ — $ $ Cash and cash equivalents, valued at net asset value* Total Cash and Cash Equivalents $ $ $ $ $ — $ — $ $ Total $ $ $ $ $ $ $ $ Other items to reconcile to fair value of plan assets $ $ Fair value of plan assets $ $ *In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2015 | |
Derivatives | |
Derivatives | NOTE 12. Derivatives The Company uses interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows explains the various types of derivatives and financial instruments used by 3M, how and why 3M uses such instruments, how such instruments are accounted for, and how such instruments impact 3M’s financial position and performance. Additional information with respect to the impacts on other comprehensive income of nonderivative hedging and derivative instruments is included in Note 6. Additional information with respect to the fair value of derivative instruments is included in Note 13. References to information regarding derivatives and/or hedging instruments associated with the Company’s long-term debt are also made in Note 10. Types of Derivatives/Hedging Instruments and Inclusion in Income/Other Comprehensive Income : Cash Flow Hedges: For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. Cash Flow Hedging - Foreign Currency Forward and Option Contracts: The Company enters into foreign exchange forward and option contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies. These transactions are designated as cash flow hedges. The settlement or extension of these derivatives will result in reclassifications (from accumulated other comprehensive income) to earnings in the period during which the hedged transactions affect earnings. 3M may dedesignate these cash flow hedge relationships in advance of the occurrence of the forecasted transaction. The portion of gains or losses on the derivative instrument previously accumulated in other comprehensive income for dedesignated hedges remains in accumulated other comprehensive income until the forecasted transaction occurs. Changes in the value of derivative instruments after dedesignation are recorded in earnings and are included in the Derivatives Not Designated as Hedging Instruments section below. Beginning in the second quarter of 2014 , 3M began extending the maximum length of time over which it hedges its exposure to the variability in future cash flows of the forecasted transactions from a previous term of 12 months to a longer term of 24 months, with certain currencies being extended further to 36 months starting in the first quarter of 2015. Cash Flow Hedging - Commodity Price Management: The Company manages commodity price risks through negotiated supply contracts, price protection agreements and forward contracts. 3M discontinued the use of commodity price swaps as cash flow hedges of forecasted commodity transactions in the first quarter of 2015. The Company used commodity price swaps as cash flow hedges of forecasted commodity transactions to manage price volatility. The related mark-to-market gain or loss on qualifying hedges was included in other comprehensive income to the extent effective, and reclassified into cost of sales in the period during which the hedged transaction affected earnings . Cash Flow Hedging — Interest Rate Contracts: In the third and fourth quarters of 2014, the Company entered into forward starting interest rate swaps with notional amounts totaling 500 million Euros as a hedge against interest rate volatility associated with the forecasted issuance of fixed rate debt. 3M terminated these interest rate swaps upon issuance of 750 million Euros aggregate principal amount of twelve -year fixed rate notes in connection with 3M’s 1.250 billion Eurobond offering in November 2014. The termination resulted in a $8 million pre-tax ( $5 million after-tax) loss within accumulated other comprehensive income that will be amortized over the twelve -year life of the notes. The amortization of gains and losses on forward starting interest rate swaps is included in the tables below as part of the gain/(loss) recognized in income on the effective portion of derivatives as a result of reclassification from accumulated other comprehensive income. As of December 31, 2015 , the Company had a balance of $124 million associated with the after tax net unrealized gain associated with cash flow hedging instruments recorded in accumulated other comprehensive income. This includes a remaining balance of $5 million (after tax loss) related to forward starting interest rate swaps, which will be amortized over the respective lives of the notes. Based on exchange rates as of December 31, 2015 , 3M expects to reclassify approximately $98 million of the after-tax net unrealized foreign exchange cash flow hedging gains to earnings in 2016, approximately $23 million of the after-tax net unrealized foreign exchange cash flow hedging gains to earnings in 2017, and approximately $3 million of the after-tax net unrealized foreign exchange cash flow hedging gains to earnings after 2017 (with the impact offset by earnings/losses from underlying hedged items). The location in the consolidated statements of income and comprehensive income and amounts of gains and losses related to derivative instruments designated as cash flow hedges are provided in the following table. Reclassifications of amounts from accumulated other comprehensive income into income include accumulated gains (losses) on dedesignated hedges at the time earnings are impacted by the forecasted transaction. Year Ended December 31, 2015 Pretax Gain (Loss) Recognized in Pretax Gain (Loss) Income on Effective Portion of Ineffective Portion of Gain Recognized in Other Derivative as a Result of (Loss) on Derivative and Comprehensive Reclassification from Amount Excluded from Income on Effective Accumulated Other Effectiveness Testing (Millions) Portion of Derivative Comprehensive Income Recognized in Income Derivatives in Cash Flow Hedging Relationships Amount Location Amount Location Amount Foreign currency forward/option contracts $ Cost of sales $ Cost of sales $ — Commodity price swap contracts — Cost of sales Cost of sales — Interest rate swap contracts — Interest expense Interest expense — Total $ $ $ — Year Ended December 31, 2014 Pretax Gain (Loss) Recognized in Pretax Gain (Loss) Income on Effective Portion of Ineffective Portion of Gain Recognized in Other Derivative as a Result of (Loss) on Derivative and Comprehensive Reclassification from Amount Excluded from Income on Effective Accumulated Other Effectiveness Testing (Millions) Portion of Derivative Comprehensive Income Recognized in Income Derivatives in Cash Flow Hedging Relationships Amount Location Amount Location Amount Foreign currency forward/option contracts $ Cost of sales $ Cost of sales $ — Commodity price swap contracts Cost of sales Cost of sales — Interest rate swap contracts Interest expense Interest expense — Total $ $ $ — Year Ended December 31, 2013 Pretax Gain (Loss) Recognized in Pretax Gain (Loss) Income on Effective Portion of Ineffective Portion of Gain Recognized in Other Derivative as a Result of (Loss) on Derivative and Comprehensive Reclassification from Amount Excluded from Income on Effective Accumulated Other Effectiveness Testing (Millions) Portion of Derivative Comprehensive Income Recognized in Income Derivatives in Cash Flow Hedging Relationships Amount Location Amount Location Amount Foreign currency forward/option contracts $ Cost of sales $ Cost of sales $ — Foreign currency forward contracts Interest expense Interest expense — Commodity price swap contracts Cost of sales Cost of sales — Interest rate swap contracts — Interest expense Interest expense — Total $ $ $ — Fair Value Hedges: For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivatives as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings. Fair Value Hedging - Interest Rate Swaps: The Company manages interest expense using a mix of fixed and floating rate debt. To help manage borrowing costs, the Company may enter into interest rate swaps. Under these arrangements, the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. The mark-to-market of these fair value hedges is recorded as gains or losses in interest expense and is offset by the gain or loss of the underlying debt instrument, which also is recorded in interest expense. These fair value hedges are highly effective and, thus, there is no impact on earnings due to hedge ineffectiveness. In July 2007, in connection with the issuance of a seven -year Eurobond for an amount of 750 million Euros, the Company completed a fixed-to-floating interest rate swap on a notional amount of 400 million Euros as a fair value hedge of a portion of the fixed interest rate Eurobond obligation. In August 2010, the Company terminated 150 million Euros of the notional amount of this swap. As a result, a gain of 18 million Euros, recorded as part of the balance of the underlying debt, was amortized as an offset to interest expense over this debt’s remaining life. Prior to termination of the applicable portion of the interest rate swap, the mark-to-market of the hedge instrument was recorded as gains or losses in interest expense and was offset by the gain or loss on carrying value of the underlying debt instrument. Consequently, the subsequent amortization of the 18 million Euros recorded as part of the underlying debt balance was not part of gains on hedged items recognized in income in the tables below. The remaining interest rate swap of 250 million Euros (notional amount) matured in July 2014. In November 2013, 3M issued a Eurobond due in 2021 for a face amount of 600 million Euros. Upon debt issuance, 3M completed a fixed-to-floating interest rate swap on a notional amount of 300 million Euros as a fair value hedge of a portion of the fixed interest rate Eurobond obligation. In June 2014, 3M issued $950 million aggreg ate principal amount of medium-term notes. Upon debt issuance, the Company entered into an interest rate swap to convert $600 million of a $625 million note included in this issuance to an interest rate based on a floating three-month LIBOR index as a fair value hedge of a portion of the fixed interest rate medium-term note obligation. In August 2015, 3M issued $1.500 billion aggregate principal amount of medium-term notes. Upon debt issuance, the Company entered into two interest rate swaps as fair value hedges of a portion of the fixed interest rate medium-term note obligation. The first converted a $450 million three-year fixed rate note, and the second converted $300 million of a five-year fixed rate note included in this issuance to an interest rate based on a floating three-month LIBOR index. The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments designated as fair value hedges and similar information relative to the hedged items are as follows: Year ended December 31, 2015 Gain (Loss) on Derivative Gain (Loss) on Hedged Item (Millions) Recognized in Income Recognized in Income Derivatives in Fair Value Hedging Relationships Location Amount Location Amount Interest rate swap contracts Interest expense $ Interest expense $ Total $ $ Year ended December 31, 2014 Gain (Loss) on Derivative Gain (Loss) on Hedged Item (Millions) Recognized in Income Recognized in Income Derivatives in Fair Value Hedging Relationships Location Amount Location Amount Interest rate swap contracts Interest expense $ Interest expense $ Total $ $ Year ended December 31, 2013 Gain (Loss) on Derivative Gain (Loss) on Hedged Item (Millions) Recognized in Income Recognized in Income Derivatives in Fair Value Hedging Relationships Location Amount Location Amount Interest rate swap contracts Interest expense $ Interest expense $ Total $ $ Net Investment Hedges: The Company may use non-derivative (foreign currency denominated debt) and derivative (foreign exchange forward contracts) instruments to hedge portions of the Company’s investment in foreign subsidiaries and manage foreign exchange risk. For instruments that are designated and qualify as hedges of net investments in foreign operations and that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in cumulative translation within other comprehensive income. The remainder of the change in value of such instruments is recorded in earnings. Recognition in earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. To the extent foreign currency denominated debt is not designated in or is dedesignated from a net investment hedge relationship, changes in value of that portion of foreign currency denominated debt due to exchange rate changes are recorded in earnings through their maturity date. 3M’s use of foreign exchange forward contracts designated in hedges of the Company’s net investment in foreign subsidiaries can vary by time period depending on when foreign currency denominated debt balances designated in such relationships are dedesignated, matured, or are newly issued and designated. Additionally, variation can occur in connection with the extent of the Company’s desired foreign exchange risk coverage. At December 31, 2015 , the total notional amount of foreign exchange forward contracts designated in net investment hedges was approximately 974 million Euros and approximately 248 billion South Korean Won, along with a principal amount of long-term debt instruments designated in net investment hedges totaling 3.6 billion Euros. The maturity dates of these derivative and nonderivative instruments designated in net investment hedges range from 2016 to 2030. The location in the consolidated statements of income and comprehensive income and amounts of gains and losses related to derivative and nonderivative instruments designated as net investment hedges are as follows. There were no reclassifications of the effective portion of net investment hedges out of accumulated other comprehensive income into income for the periods presented in the table below. Year ended December 31, 2015 Pretax Gain (Loss) Recognized as Cumulative Translation within Other Ineffective Portion of Gain (Loss) on Comprehensive Income Instrument and Amount Excluded Derivative and Nonderivative Instruments in Net Investment Hedging on Effective Portion of from Effectiveness Testing Relationships Instrument Recognized in Income (Millions) Amount Location Amount Foreign currency denominated debt $ N/A $ — Foreign currency forward contracts Cost of sales Total $ $ Year ended December 31, 2014 Pretax Gain (Loss) Recognized as Cumulative Translation within Other Ineffective Portion of Gain (Loss) on Comprehensive Income Instrument and Amount Excluded Derivative and Nonderivative Instruments in Net Investment Hedging on Effective Portion of from Effectiveness Testing Relationships Instrument Recognized in Income (Millions) Amount Location Amount Foreign currency denominated debt $ N/A $ — Foreign currency forward contracts Cost of sales Total $ $ Year ended December 31, 2013 Pretax Gain (Loss) Recognized as Cumulative Translation within Other Ineffective Portion of Gain (Loss) on Comprehensive Income Instrument and Amount Excluded Derivative and Nonderivative Instruments in Net Investment Hedging on Effective Portion of from Effectiveness Testing Relationships Instrument Recognized in Income (Millions) Amount Location Amount Foreign currency denominated debt $ N/A $ — Foreign currency forward contracts Cost of sales — Total $ $ — Derivatives Not Designated as Hedging Instruments: Derivatives not designated as hedging instruments include dedesignated foreign currency forward and option contracts that formerly were designated in cash flow hedging relationships (as referenced in the Cash Flow Hedges section above). In addition, 3M enters into foreign currency forward contracts to offset, in part, the impacts of certain intercompany activities (primarily associated with intercompany licensing arrangements) and enters into commodity price swaps to offset, in part, fluctuations in costs associated with the use of certain commodities and precious metals. These derivative instruments are not designated in hedging relationships; therefore, fair value gains and losses on these contracts are recorded in earnings. The Company does not hold or issue derivative financial instruments for trading purposes. The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments not designated as hedging instruments are as follows: Gain (Loss) on Derivative Recognized in Income Year ended Year ended Year ended December 31, December 31, December 31, Derivatives Not Designated as Hedging Instruments 2015 2014 2013 (Millions) Location Amount Amount Amount Foreign currency forward/option contracts Cost of sales $ $ $ Foreign currency forward contracts Interest expense Commodity price swap contracts Cost of sales — Total $ $ $ Location and Fair Value Amount of Derivative Instruments : The following tables summarize the fair value of 3M’s derivative instruments, excluding nonderivative instruments used as hedging instruments, and their location in the consolidated balance sheet. Notional amounts below are presented at period end foreign exchange rates, except for certain interest rate swaps, which are presented using the inception date’s foreign exchange rate. Additional information with respect to the fair value of derivative instruments is included in Note 13. Gross Assets Liabilities December 31, 2015 Notional Fair Fair (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ Other current assets $ Other current liabilities $ Foreign currency forward/option contracts Other assets Other liabilities Interest rate swap contracts Other assets Other liabilities Total derivatives designated as hedging instruments $ $ Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ Other current assets $ Other current liabilities $ Total derivatives not designated as hedging instruments $ $ Total derivative instruments $ $ Gross Assets Liabilities December 31, 2014 Notional Fair Fair (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ Other current assets $ Other current liabilities $ Foreign currency forward/option contracts Other assets Other liabilities Commodity price swap contracts Other current assets — Other current liabilities Interest rate swap contracts Other assets Other liabilities Total derivatives designated as hedging instruments $ $ Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ Other current assets $ Other current liabilities $ Total derivatives not designated as hedging instruments $ $ Total derivative instruments $ $ Credit Risk and Offsetting of Assets and Liabilities of Derivative Instruments : The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts. However, the Company’s risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. 3M enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple, separate derivative transactions. As of December 31, 2015 , 3M has International Swaps and Derivatives Association (ISDA) agreements with 16 applicable banks and financial institutions which contain netting provisions. In addition to a master agreement with 3M supported by a primary counterparty’s parent guarantee, 3M also has associated credit support agreements in place with 15 of its primary derivative counterparties which, among other things, provide the circumstances under which either party is required to post eligible collateral (when the market value of transactions covered by these agreements exceeds specified thresholds or if a counterparty’s credit rating has been downgraded to a predetermined rating). The Company does not anticipate nonperformance by any of these counterparties. 3M has elected to present the fair value of derivative assets and liabilities within the Company’s consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. However, the following tables provide information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of netting arrangements with each of the counterparties. For each counterparty, if netted, the Company would offset the asset and liability balances of all derivatives at the end of the reporting period based on the 3M entity that is a party to the transactions. Derivatives not subject to master netting agreements are not eligible for net presentation. As of the applicable dates presented below, no cash collateral had been received or pledged related to these derivative instruments. Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties December 31, 2015 Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject Gross Amount of to Master Netting Agreements Derivative Assets Gross Amount of Presented in the Eligible Offsetting Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Liabilities Received Derivative Assets Derivatives subject to master netting agreements $ $ $ — $ Derivatives not subject to master netting agreements — — Total $ $ December 31, 2014 Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject Gross Amount of to Master Netting Agreements Derivative Assets Gross Amount of Presented in the Eligible Offsetting Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Liabilities Received Derivative Assets Derivatives subject to master netting agreements $ $ $ — $ Derivatives not subject to master netting agreements — — Total $ $ Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties December 31, 2015 Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject Gross Amount of to Master Netting Agreements Derivative Liabilities Gross Amount of Presented in the Eligible Offsetting Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Assets Pledged Derivative Liabilities Derivatives subject to master netting agreements $ $ $ — $ Derivatives not subject to master netting agreements Total $ $ December 31, 2014 Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject Gross Amount of to Master Netting Agreements Derivative Liabilities Gross Amount of Presented in the Eligible Offsetting Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Assets Pledged Derivative Liabilities Derivatives subject to master netting agreements $ $ $ — $ Derivatives not subject to master netting agreements Total $ $ Foreign Currency Effects 3M estimates that year-on-year foreign currency transaction effects, including hedging impacts, increased pre-tax income by approximately $180 million and $10 million in 2015 and 2014 , respectively. These estimates include transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks and the negative impact of swapping Venezuelan bolivars into U.S. dollars. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 13. Fair Value Measurements 3M follows ASC 820, Fair Value Measurements and Disclosures , with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis. Under the standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis : For 3M, assets and liabilities that are measured at fair value on a recurring basis primarily relate to available-for-sale marketable securities, available-for-sale investments (included as part of investments in the Consolidated Balance Sheet) and certain derivative instruments. Derivatives include cash flow hedges, interest rate swaps and most net investment hedges. The information in the following paragraphs and tables primarily addresses matters relative to these financial assets and liabilities. Separately, there were no material fair value measurements with respect to nonfinancial assets or liabilities that are recognized or disclosed at fair value in the Company’s financial statements on a recurring basis for 2015 and 2014 . 3M uses various valuation techniques, which are primarily based upon the market and income approaches, with respect to financial assets and liabilities. Following is a description of the valuation methodologies used for the respective financial assets and liabilities measured at fair value. Available-for-sale marketable securities — except certain U.S. municipal securities: Marketable securities, except certain U.S. municipal securities, are valued utilizing multiple sources. A weighted average price is used for these securities. Market prices are obtained for these securities from a variety of industry standard data providers, security master files from large financial institutions, and other third-party sources. These multiple prices are used as inputs into a distribution-curve-based algorithm to determine the daily fair value to be used. 3M classifies U.S. treasury securities as level 1, while all other marketable securities (excluding certain U.S. municipal securities) are classified as level 2. Marketable securities are discussed further in Note 9. Available-for-sale marketable securities —certain U.S. municipal securities only: In the fourth quarter 2014, 3M obtained a municipal bond with the City of Nevada, Missouri, which represent 3M’s only U.S. municipal securities holding as of December 31, 2015 . Due to the nature of this security, the valuation method utilized will include the financial health of the City of Nevada, any recent municipal bond issuances by Nevada, and macroeconomic considerations related to the direction of interest rates and the health of the overall municipal bond market, and as such will be classified as a level 3 security. Available-for-sale investments: Investments include equity securities that are traded in an active market. Closing stock prices are readily available from active markets and are used as being representative of fair value. 3M classifies these securities as level 1. Derivative instruments: The Company’s derivative assets and liabilities within the scope of ASC 815, Derivatives and Hedging , are required to be recorded at fair value. The Company’s derivatives that are recorded at fair value include foreign currency forward and option contracts, commodity price swaps, interest rate swaps, and net investment hedges where the hedging instrument is recorded at fair value. Net investment hedges that use foreign currency denominated debt to hedge 3M’s net investment are not impacted by the fair value measurement standard under ASC 820, as the debt used as the hedging instrument is marked to a value with respect to changes in spot foreign currency exchange rates and not with respect to other factors that may impact fair value. 3M has determined that foreign currency forwards, commodity price swaps, currency swaps, foreign currency options, interest rate swaps and cross-currency swaps will be considered level 2 measurements. 3M uses inputs other than quoted prices that are observable for the asset. These inputs include foreign currency exchange rates, volatilities, and interest rates. Derivative positions are primarily valued using standard calculations/models that use as their basis readily observable market parameters. Industry standard data providers are 3M’s primary source for forward and spot rate information for both interest rates and currency rates, with resulting valuations periodically validated through third-party or counterparty quotes and a net present value stream of cash flows model. The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis. Fair Value Measurements (Millions) Fair Value at Using Inputs Considered as Description December 31, 2015 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: Foreign government agency securities $ $ — $ $ — Corporate debt securities — — Commercial paper — — Certificates of deposit/time deposits — — Asset-backed securities: Automobile loan related — — Credit card related — — Equipment lease related — — Other — — U.S. municipal securities — — Derivative instruments — assets: Foreign currency forward/option contracts — — Interest rate swap contracts — — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts — — Interest rate swap contracts — — Fair Value Measurements (Millions) Fair Value at Using Inputs Considered as Description December 31, 2014 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: U.S. government agency securities $ $ — $ $ — Foreign government agency securities — — Corporate debt securities — — Certificates of deposit/time deposits — — Asset-backed securities: Automobile loan related — — Credit card related — — Equipment lease related — — Other — — U.S. treasury securities — — U.S. municipal securities — — Investments — — Derivative instruments — assets: Foreign currency forward/option contracts — — Interest rate swap contracts — — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts — — Commodity price swap contracts — — Interest rate swap contracts — — The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis in the table above that used significant unobservable inputs (level 3). (Millions) Marketable securities — certain U.S. municipal securities and auction rate securities only 2015 2014 2013 Beginning balance $ $ $ Total gains or losses: Included in earnings — — Included in other comprehensive income — Purchases and issuances — — Sales and settlements — Transfers in and/or out of level 3 — — — Ending balance Change in unrealized gains or losses for the period included in earnings for securities held at the end of the reporting period — — — In addition, the plan assets of 3M’s pension and postretirement benefit plans are measured at fair value on a recurring basis (at least annually). Refer to Note 11. Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis: Disclosures are required for certain assets and liabilities that are measured at fair value, but are recognized and disclosed at fair value on a nonrecurring basis in periods subsequent to initial recognition. For 3M, such measurements of fair value relate primarily to long-lived asset impairments. There were no material long-lived asset impairments for 2015 , 2014 and 2013 . Fair Value of Financial Instruments: The Company’s financial instruments include cash and cash equivalents, marketable securities, accounts receivable, certain investments, accounts payable, borrowings, and derivative contracts. The fair values of cash and cash equivalents, accounts receivable, accounts payable, and short-term borrowings and current portion of long-term debt (except the m edium-term fixed rate notes totaling $1 billion, which will mature in September 2016 and are shown separately in the table below) approximated carrying values because of the short-term nature of these instruments. Available-for-sale marketable securities and investments, in addition to certain derivative instruments, are recorded at fair values as indicated in the preceding disclosures. For its long-term debt, the Company utilized third-party quotes to estimate fair values (classified as level 2). Information with respect to the carrying amounts and estimated fair values of these financial instruments follow: December 31, 2015 December 31, 2014 Carrying Fair Carrying Fair (Millions) Value Value Value Value Medium-term fixed rate note due September 2016 (long-term in 2014 and short-term in 2015) $ $ $ $ Long-term debt, excluding current portion and medium-term fixed rate note due September 2016 The fair values reflected above consider the terms of the related debt absent the impacts of derivative/hedging activity. The carrying amount of long-term debt referenced above is impacted by certain fixed-to-floating interest rate swaps that are designated as fair value hedges and by the designation of fixed rate Eurobond securities issued by the Company as hedging instruments of the Company’s net investment in its European subsidiaries. Many of 3M’s fixed-rate bonds were trading at a premium at December 31, 2015 and 2014 due to the low interest rates and tightening of 3M’s credit spreads. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | NOTE 14. Commitments and Contingencies Capital and Operating Leases: Rental expense under operating leases was $316 million in 2015 , $332 million in 2014 and $330 million in 2013 . It is 3M’s practice to secure renewal rights for leases, thereby giving 3M the right, but not the obligation, to maintain a presence in a leased facility. 3M has three primary capital leases. First, 3M has a capital lease, which became effective in April 2003, that involves a building in the United Kingdom (with a lease term of 22 years). During the second quarter of 2003, 3M recorded a capital lease asset and obligation of approximately 33.5 million British Pound (GBP), or approximately $50 million at December 31, 2015 , exchange rates. Second, during the fourth quarter of 2009, 3M recorded a capital lease asset and obligation of approximately $50 million related to an IT investment with an amortization period of seven years. Third, in the fourth quarter of 2014, 3M recorded a capital lease asset and obligation of approximately $15 million, which is discussed in more detail in Note 7. Minimum lease payments under capital and operating leases with non-cancelable terms in excess of one year as of December 31, 2015 , were as follows: Operating (Millions) Capital Leases Leases 2016 $ $ 2017 2018 2019 2020 After 2020 Total $ $ Less: Amounts representing interest Present value of future minimum lease payments Less: Current obligations under capital leases Long-term obligations under capital leases $ Unconditional Purchase Obligations: Unconditional purchase obligations are defined as an agreement to purchase goods or services that is enforceable and legally binding (non-cancelable, or cancelable only in certain circumstances). The Company estimates its total unconditional purchase obligation commitment (for those contracts with terms in excess of one year) as of December 31, 2015 , at $596 million. Payments by year are estimated as follows: 2016 ( $193 million), 2017 ( $160 million), 2018 ( $102 million), 2019 ( $54 million), 2020 ( $56 million) and after 2020 ( $31 million). Many of these commitments relate to take or pay contracts, in which 3M guarantees payment to ensure availability of products or services that are sold to customers. The Company expects to receive consideration (products or services) for these unconditional purchase obligations. The purchase obligation amounts do not represent the entire anticipated purchases in the future, but represent only those items for which the Company is contractually obligated. The majority of 3M’s products and services are purchased as needed, with no unconditional commitment. For this reason, these amounts will not provide an indication of the Company’s expected future cash outflows related to purchase obligations. Warranties/Guarantees: 3M’s accrued product warranty liabilities, recorded on the Consolidated Balance Sheet as part of current and long-term liabilities, are estimated at approximately $28 million at December 31, 2015 , and $30 million at December 31, 2014 . 3M does not consider this amount to be material. The fair value of 3M guarantees of loans with third parties and other guarantee arrangements are not material. Related Party Activity: 3M does not have any material related party activity. Legal Proceedings: The Company and some of its subsidiaries are involved in numerous claims and lawsuits, principally in the United States, and regulatory proceedings worldwide. These include various products liability (involving products that the Company now or formerly manufactured and sold), intellectual property, and commercial claims and lawsuits, including those brought under the antitrust laws, and environmental proceedings. Unless otherwise stated, the Company is vigorously defending all such litigation. Process for Disclosure and Recording of Liabilities and Insurance Receivables Related to Legal Proceedings Many lawsuits and claims involve highly complex issues relating to causation, scientific evidence, and whether there are actual damages and are otherwise subject to substantial uncertainties. Assessments of lawsuits and claims can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. The Company complies with the requirements of ASC 450, Contingencies , and related guidance, and records liabilities for legal proceedings in those instances where it can reasonably estimate the amount of the loss and where liability is probable. Where the reasonable estimate of the probable loss is a range, the Company records the most likely estimate of the loss, or the low end of the range if there is no one best estimate. The Company either discloses the amount of a possible loss or range of loss in excess of established accruals if estimable, or states that such an estimate cannot be made. The Company discloses significant legal proceedings even where liability is not probable or the amount of the liability is not estimable, or both, if the Company believes there is at least a reasonable possibility that a loss may be incurred. The Company estimates insurance receivables based on an analysis of its numerous policies, including their exclusions, pertinent case law interpreting comparable policies, its experience with similar claims, and assessment of the nature of the claim and remaining coverage, and records an amount it has concluded is likely to be recovered. For those insured matters where the Company has taken an accrual, the Company also records receivables for the amount of insurance that it expects to recover under the Company’s insurance program. For those insured matters where the Company has not taken an accrual because the liability is not probable or the amount of the liability is not estimable, or both, but where the Company has incurred an expense in defending itself, the Company records receivables for the amount of insurance that it expects to recover for the expense incurred. Because litigation is subject to inherent uncertainties, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of presently recorded liabilities. A future adverse ruling, settlement, or unfavorable development could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows in the period in which they are recorded. Although the Company cannot estimate its exposure to all legal proceedings, it currently believes that such future charges, if any, would not have a material adverse effect on the consolidated financial position of the Company. Based on experience and developments, the Company reexamines its estimates of probable liabilities and associated expenses and receivables each period, and whether it is able to estimate a liability previously determined to be not estimable and/or not probable. Where appropriate, the Company makes additions to or adjustments of its estimated liabilities. As a result, the current estimates of the potential impact on the Company’s consolidated financial position, results of operations and cash flows for the legal proceedings and claims pending against the Company could change in the future. The following sections first describe the significant legal proceedings in which the Company is involved, and then describe the liabilities and associated insurance receivables the Company has accrued relating to its significant legal proceedings. Respirator Mask/Asbestos Litigation As of December 31, 2015, the Company is a named defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent approximately 2,130 individual claimants, compared to approximately 2,220 individual claimants with actions pending at December 31, 2014. The vast majority of the lawsuits and claims resolved by and currently pending against the Company allege use of some of the Company’s mask and respirator products and seek damages from the Company and other defendants for alleged personal injury from workplace exposures to asbestos, silica, coal mine dust or other occupational dusts found in products manufactured by other defendants or generally in the workplace. A minority of the lawsuits and claims resolved by and currently pending against the Company generally allege personal injury from occupational exposure to asbestos from products previously manufactured by the Company, which are often unspecified, as well as products manufactured by other defendants, or occasionally at Company premises. The Company’s current volume of new and pending matters is substantially lower than it experienced at the peak of filings in 2003. The Company expects that filing of claims by unimpaired claimants in the future will continue to be at much lower levels than in the past. Accordingly, the number of claims alleging more serious injuries, including mesothelioma and other malignancies, will represent a greater percentage of total claims than in the past. The Company has prevailed in all ten cases taken to trial, including eight of the nine cases tried to verdict (such trials occurred in 1999, 2000, 2001, 2003, 2004, 2007, and 2015), and an appellate reversal in 2005 of the 2001 jury verdict adverse to the Company. The remaining case, tried in 2009, was dismissed by the court at the close of plaintiff’s evidence, based on the court’s legal finding that the plaintiff had not presented sufficient evidence to support a jury verdict. The Company has demonstrated in these past trial proceedings that its respiratory protection products are effective as claimed when used in the intended manner and in the intended circumstances. Consequently the Company believes that claimants are unable to establish that their medical conditions, even if significant, are attributable to the Company’s respiratory protection products. Nonetheless the Company’s litigation experience indicates that claims of persons with malignant conditions are costlier to resolve than the claims of unimpaired persons, and it therefore believes the average cost of resolving pending and future claims on a per-claim basis will continue to be higher than it experienced in prior periods when the vast majority of claims were asserted by the unimpaired. As previously reported, the State of West Virginia, through its Attorney General, filed a complaint in 2003 against the Company and two other manufacturers of respiratory protection products in the Circuit Court of Lincoln County, West Virginia, and amended its complaint in 2005. The amended complaint seeks substantial, but unspecified, compensatory damages primarily for reimbursement of the costs allegedly incurred by the State for worker’s compensation and healthcare benefits provided to all workers with occupational pneumoconiosis and unspecified punitive damages. The case has been inactive since the fourth quarter of 2007, other than a case management conference in March 2011. In November 2013, the State filed a motion to bifurcate the lawsuit into separate liability and damages proceedings. At the hearing on the motion, the c ourt declined to bifurcate the lawsuit. No liability has been recorded for this matter because the Company believes that liability is not probable and estimable at this time. In addition, the Company is not able to estimate a possible loss or range of loss given the lack of any meaningful discovery responses by the State of West Virginia, the otherwise minimal activity in this case and the fact that the complaint asserts claims against two other manufacturers where a defendant’s share of liability may turn on the law of joint and several liability and by the amount of fault, if any, a jury might allocate to each defendant if the case is ultimately tried. Respirator Mask/Asbestos Liabilities and Insurance Receivables: The Company estimates its respirator mask/asbestos liabilities, including the cost to resolve the claims and defense costs, by examining: (i) the Company’s experience in resolving claims, (ii) apparent trends, (iii) the apparent quality of claims (e.g., whether the claim has been asserted on behalf of asymptomatic claimants), (iv) changes in the nature and mix of claims (e.g., the proportion of claims asserting usage of the Company’s mask or respirator products and alleging exposure to each of asbestos, silica, coal or other occupational dusts, and claims pleading use of asbestos-containing products allegedly manufactured by the Company), (v) the number of current claims and a projection of the number of future asbestos and other claims that may be filed against the Company, (vi) the cost to resolve recently settled claims, and (vii) an estimate of the cost to resolve and defend against current and future claims. Developments may occur that could affect the Company’s estimate of its liabilities. These developments include, but are not limited to, significant changes in (i) the number of future claims, (ii) the average cost of resolving claims, (iii) the legal costs of defending these claims and in maintaining trial readiness, (iv) changes in the mix and nature of claims received, (v) trial and appellate outcomes, (vi) changes in the law and procedure applicable to these claims, and (vii) the financial viability of other co-defendants and insurers. As a result of the Company’s cost of resolving claims of persons who claim more serious injuries, including mesothelioma and other malignancies, the Company increased its accruals in 2015 for respirator mask/asbestos liabilities by $50 million. In 2015, the Company made payments for legal fees and settlements of $46 million related to the respirator mask/asbestos litigation. As of December 31, 2015, the Company had accruals for respirator mask/asbestos liabilities of $144 million (excluding Aearo accruals). This accrual represents the low end in a range of loss. The Company cannot estimate the amount or upper end of the range of amounts by which the liability may exceed the accrual the Company has established because of the (i) inherent difficulty in projecting the number of claims that have not yet been asserted or the time period in which future claims may be asserted, (ii) the complaints nearly always assert claims against multiple defendants where the damages alleged are typically not attributed to individual defendants so that a defendant’s share of liability may turn on the law of joint and several liability, which can vary by state, (iii) the multiple factors described above that the Company considers in estimating its liabilities, and (iv) the several possible developments described above that may occur that could affect the Company’s estimate of liabilities. As of December 31, 2015, the Company’s receivable for insurance recoveries related to the respirator mask/asbestos litigation was $39 million. The Company estimates insurance receivables based on an analysis of its policies, including their exclusions, pertinent case law interpreting comparable policies, its experience with similar claims, and an assessment of the nature of each claim and remaining coverage. The Company then records an amount it has concluded is likely to be recovered. Various factors could affect the timing and amount of recovery of this receivable, including (i) delays in or avoidance of payment by insurers; (ii) the extent to which insurers may become insolvent in the future, and (iii) the outcome of negotiations with insurers and legal proceedings with respect to respirator mask/asbestos liability insurance coverage. The Company has unresolved coverage with claims-made carriers for respirator mask claims. The Company is also seeking coverage under the policies of certain insolvent insurers. Once those claims for coverage are resolved, the Company will have collected substantially all of its remaining insurance coverage for respirator mask/asbestos claims. Respirator Mask/Asbestos Litigation — Aearo Technologies On April 1, 2008, a subsidiary of the Company purchased the stock of Aearo Holding Corp., the parent of Aearo Technologies (“Aearo”). Aearo manufactured and sold various products, including personal protection equipment, such as eye, ear, head, face, fall and certain respiratory protection products. As of December 31, 2015, Aearo and/or other companies that previously owned and operated Aearo’s respirator business (American Optical Corporation, Warner-Lambert LLC, AO Corp. and Cabot Corporation (“Cabot”)) are named defendants, with multiple co-defendants, including the Company, in numerous lawsuits in various courts in which plaintiffs allege use of mask and respirator products and seek damages from Aearo and other defendants for alleged personal injury from workplace exposures to asbestos, silica-related, or other occupational dusts found in products manufactured by other defendants or generally in the workplace. As of December 31, 2015, the Company, through its Aearo subsidiary, had accruals of $21 million for product liabilities and defense costs related to current and future Aearo-related asbestos and silica-related claims. Responsibility for legal costs, as well as for settlements and judgments, is currently shared in an informal arrangement among Aearo, Cabot, American Optical Corporation and a subsidiary of Warner Lambert and their respective insurers (the “Payor Group”). Liability is allocated among the parties based on the number of years each company sold respiratory products under the “AO Safety” brand and/or owned the AO Safety Division of American Optical Corporation and the alleged years of exposure of the individual plaintiff. Aearo’s share of the contingent liability is further limited by an agreement entered into between Aearo and Cabot on July 11, 1995. This agreement provides that, so long as Aearo pays to Cabot a quarterly fee of $100,000 , Cabot will retain responsibility and liability for, and indemnify Aearo against, any product liability claims involving exposure to asbestos, silica, or silica products for respirators sold prior to July 11, 1995. Because of the difficulty in determining how long a particular respirator remains in the stream of commerce after being sold, Aearo and Cabot have applied the agreement to claims arising out of the alleged use of respirators involving exposure to asbestos, silica or silica products prior to January 1, 1997. With these arrangements in place, Aearo’s potential liability is limited to exposures alleged to have arisen from the use of respirators involving exposure to asbestos, silica, or silica products on or after January 1, 1997. To date, Aearo has elected to pay the quarterly fee. Aearo could potentially be exposed to additional claims for some part of the pre-July 11, 1995 period covered by its agreement with Cabot if Aearo elects to discontinue its participation in this arrangement, or if Cabot is no longer able to meet its obligations in these matters. In March 2012, Cabot CSC Corporation and Cabot Corporation filed a lawsuit against Aearo in the Superior Court of Suffolk County, Massachusetts seeking declaratory relief as to the scope of Cabot’s indemnity obligations under the July 11, 1995 agreement, including whether Cabot has retained liability for coal workers’ pneumoconiosis claims, and seeking damages for breach of contract. In June 2014, the court granted Aearo’s motion for summary judgment on all claims. Cabot has filed a motion for reconsideration, and Aearo filed a motion for clarification of the court’s order granting Aearo summary judgment. In October 2014, the court denied Aearo’s motion for clarification. The court also denied, in part, Cabot’s motion for reconsideration and reaffirmed its ruling that Cabot retained liability for claims involving exposure to silica in coal mine dust. The court granted Cabot’s motion, in part, ruling that Aearo was not entitled to summary judgment on Cabot’s claim for equitable allocation, and on whether the 258 underlying claims were Cabot’s responsibility. These two issues remain in the case for further proceedings. New motions for summary judgment were filed and the court heard oral arguments in October 2015. Developments may occur that could affect the estimate of Aearo’s liabilities. These developments include, but are not limited to: (i) significant changes in the number of future claims, (ii) significant changes in the average cost of resolving claims, (iii) significant changes in the legal costs of defending these claims, (iv) significant changes in the mix and nature of claims received, (v) trial and appellate outcomes, (vi) significant changes in the law and procedure applicable to these claims, (vii) significant changes in the liability allocation among the co-defendants, (viii) the financial viability of members of the Payor Group including exhaustion of available insurance coverage limits, and/or (ix) a determination that the interpretation of the contractual obligations on which Aearo has estimated its share of liability is inaccurate. The Company cannot determine the impact of these potential developments on its current estimate of Aearo’s share of liability for these existing and future claims. If any of the developments described above were to occur, the actual amount of these liabilities for existing and future claims could be significantly larger than the amount accrued. Because of the inherent difficulty in projecting the number of claims that have not yet been asserted, the complexity of allocating responsibility for future claims among the Payor Group, and the several possible developments that may occur that could affect the estimate of Aearo’s liabilities, the Company cannot estimate the amount or range of amounts by which Aearo’s liability may exceed the accrual the Company has established. Environmental Matters and Litigation The Company’s operations are subject to environmental laws and regulations including those pertaining to air emissions, wastewater discharges, toxic substances, and the handling and disposal of solid and hazardous wastes enforceable by national, state, and local authorities around the world, and private parties in the United States and abroad. These laws and regulations provide, under certain circumstances, a basis for the remediation of contamination, for restoration of or compensation for damages to natural resources, and for personal injury and property damage claims. The Company has incurred, and will continue to incur, costs and capital expenditures in complying with these laws and regulations, defending personal injury and property damage claims, and modifying its business operations in light of its environmental responsibilities. In its effort to satisfy its environmental responsibilities and comply with environmental laws and regulations, the Company has established, and periodically updates, policies relating to environmental standards of performance for its operations worldwide. Under certain environmental laws, including the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state laws, the Company may be jointly and severally liable, typically with other companies, for the costs of remediation of environmental contamination at current or former facilities and at off-site locations. The Company has identified numerous locations, most of which are in the United States, at which it may have some liability. Please refer to the section entitled “ Environmental Liabilities and Insurance Receivables” that follows for information on the amount of the accrual. Environmental Matters As previously reported, the Company has been voluntarily cooperating with ongoing reviews by local, state, federal (primarily the U.S. Environmental Protection Agency (EPA)), and international agencies of possible environmental and health effects of various perfluorinated compounds (“PFCs”), including perfluorooctanyl compounds such as perfluorooctanoate (“PFOA”) and perfluorooctane sulfonate (“PFOS”). As a result of its phase-out decision in May 2000, the Company no longer manufactures perfluorooctanyl compounds. The company ceased manufacturing and using the vast majority of these compounds within approximately two years of the phase-out announcement, and ceased all manufacturing and the last significant use of this chemistry by the end of 2008. Through its ongoing life cycle management and its raw material composition identification processes associated with the Company’s policies covering the use of all persistent and bio-accumulative materials, the Company has on occasion identified the presence of precursor chemicals in materials received from suppliers that may ultimately degrade to PFOA, PFOS, or similar compounds. Upon such identification, the Company works to find alternatives for such materials. Regulatory activities concerning PFOA and/or PFOS continue in the United States, Europe and elsewhere, and before certain international bodies. These activities include gathering of exposure and use information, risk assessment, and consideration of regulatory approaches. As the database of studies of both chemicals has expanded, the EPA has developed draft human health effects documents summarizing the available data from these studies. In February 2014, the EPA initiated external peer review of its draft human health effects documents for PFOA and PFOS. The peer review panel met in August 2014. The EPA has stated that following the peer review process it will revise its health effects documents and use them to establish lifetime health advisories for PFOS and PFOA in drinking water. Lifetime health advisories, while not enforceable, serve as guidance and are benchmarks for determining if concentrations of chemicals in tap water from public utilities are safe for public consumption. Once finalized, the EPA stated that the lifetime health advisories are expected to supersede the provisional health advisories for PFOA and PFOS in drinking water issued by the EPA in 2009 — currently at 0.4 micrograms per liter for PFOA and 0.2 micrograms per liter for PFOS. In an effort to collect exposure information under the Safe Drinking Water Act, the EPA published on May 2, 2012 a list of unregulated substances, including six PFCs, required to be monitored during the period 2013-2015 by public water system supplies to determine the extent of their occurrence. The EPA is reporting results from this exercise on a rolling basis that will continue in 2016. Through year-end 2015, the EPA has reported results for 4,764 public water supplies nationwide. None of these have reported PFOA above the provisional health advisory level issued by the EPA in 2009, and seventeen have reported PFOS levels above the 2009 provisional health advisory. The Company is continuing to make progress in its work, under the supervision of state regulators, to address its historic disposal of PFC-containing waste associated with manufacturing operations at the Decatur, Alabama, Cottage Grove, Minnesota, and Cordova, Illinois plants. As previously reported, the Company entered into a voluntary remedial action agreement with the Alabama Department of Environmental Management (ADEM) to address the presence of PFCs in the soil at the Company’s manufacturing facility in Decatur, Alabama. Pursuant to a permit issued by ADEM, for approximately twenty years, the Company incorporated its wastewater treatment plant sludge containing PFCs in fields at its Decatur facility. After a review of the available options to address the presence of PFCs in the soil, ADEM agreed that the preferred remediation option is to use a multilayer cap over the former sludge incorporation areas on the manufacturing site with subsequent groundwater migration controls and treatment. Implementation of that option will continue and is expected to be completed in 2018. The Company continues to work with the Minnesota Pollution Control Agency (MPCA) pursuant to the terms of the previously disclosed May 2007 Settlement Agreement and Consent Order to address the presence of certain PFCs in the soil and groundwater at former disposal sites in Washington County, Minnesota (Oakdale and Woodbury) and at the Company’s manufacturing facility at Cottage Grove, Minnesota. Under this agreement, the Company’s principal obligations include (i) evaluating releases of certain PFCs from these sites and proposing response actions; (ii) providing treatment or alternative drinking water upon identifying any level exceeding a Health Based Value (“HBV”) or Health Risk Limit (“HRL”) (i.e., the amount of a chemical in drinking water determined by the Minnesota Department of Health (MDH) to be safe for human consumption over a lifetime) for certain PFCs for which a HBV and/or HRL exists as a result of contamination from these sites; (iii) remediating identified sources of other PFCs at these sites that are not controlled by actions to remediate PFOA and PFOS; and (iv) sharing information with the MPCA about certain perfluorinated compounds. During 2008, the MPCA issued formal decisions adopting remedial options for the former disposal sites in Washington County, Minnesota (Oakdale and Woodbury). In August 2009, the MPCA issued a formal decision adopting remedial options for the Company’s Cottage Grove manufacturing facility. During the spring and summer of 2010, 3M began implementing the agreed upon remedial options at the Cottage Grove and Woodbury sites. 3M commenced the remedial option at the Oakdale site in late 2010. At each location the remedial options were recommended by the Company and approved by the MPCA. Remediation work has been completed at the Oakdale and Woodbury sites, and they are in an operational maintenance mode. Remediation will continue at the Cottage Grove site during 2016. In August 2014, the Illinois EPA approved a request by the Company to establish a groundwater management zone at its manufacturing facility in Cordova, Illinois, which includes ongoing pumping of impacted site groundwater, groundwater monitoring and routine reporting of results. The Company cannot predict what additional regulatory actions arising from the foregoing proceedings and activities, if any, may be taken regarding such compounds or the consequences of any such actions. Environmental Litigation As previously reported, a former employee filed a purported class action lawsuit in 2002 in the Circuit Court of Morgan County, Alabama (the “St. John” case), seeking unstated damages and alleging that the plaintiffs suffered fear, increased risk, subclinical injuries, and property damage from exposure to certain perfluorochemicals at or near the Company’s Decatur, Alabama, manufacturing facility. The court in 2005 granted the Company’s motion to dismiss the named plaintiff’s personal injury-related claims on the basis that such claims are barred by the exclusivity provisions of the state’s Workers Compensation Act. The plaintiffs’ counsel filed an amended complaint in November 2006, limiting the case to property damage claims on behalf of a purported class of residents and property owners in the vicinity of the Decatur plant. In June 2015, the plaintiffs filed an amended complaint adding additional defendants, including BFI Waste Management Systems of Alabama, LLC; BFI Waste Management of North America, LLC; the City of Decatur, Alabama; Morgan County, Alabama; Municipal Utilities Board of Decatur; and Morgan County, Alabama, d/b/a Decatur Utilities. In September 2015, the court issued a scheduling order staying discovery pending mediation which occurred in January 2016, but did not resolve the case. Discovery relating to the class certification will begin, and the class certification hearing is scheduled for November 2016. In 2005, the judge in a second purported class action lawsuit filed by three residents of Morgan County, Alabama, seeking unstated compensatory and punitive damages involving alleged damage to their property from emissions of certain perfluorochemical compounds from the Company’s Decatur, Alabama, manufacturing facility that formerly manufactured those compounds (the “Chandler” case) granted the Company’s motion to abate the case, effectively putting the case on hold pending the resolution of class certification issues in the St. John case. Despite the stay, plaintiffs filed an amended complaint seeking damages for alleged personal injuries and property damage on behalf of the named plaintiffs and the members of a purported class. No further action in the case is expected unless and until the stay is lifted. In February 2009, a resident of Franklin County, Alabama, filed a purported class action lawsuit in the Circuit Court of Frank |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | NOTE 15. Stock-Based Compensation The 3M 2008 Long-Term Incentive Plan provides for the issuance or delivery of up to 100 million shares of 3M common stock (including additional shareholder approvals subsequent to 2008) pursuant to awards granted under the plan. Awards under this plan may be issued in the form of incentive stock options, nonqualified stock options, progressive stock options, stock appreciation rights, restricted stock, restricted stock units, other stock awards, and performance units and performance shares. Awards denominated in shares of common stock other than options and stock appreciation rights, per the 2008 Plan, count against the 100 million share limit as 3.38 shares for every one share covered by such award (for full value awards with grant dates prior to May 11, 2010), as 2.87 shares for every one share covered by such award (for full value awards with grant dates on or after May 11, 2010, and prior to May 8, 2012), or as 3.50 shares for every one share covered by such award (for full value awards with grant dates of May 8, 2012 or later). The remaining total shares available for grant under the 2008 Long Term Incentive Plan Program are 20,328,681 as of December 31, 2015 . There were approximately 9,200 participants with outstanding options, restricted stock, or restricted stock units at December 31, 2015 . The Company’s annual stock option and restricted stock unit grant is made in February to provide a strong and immediate link between the performance of individuals during the preceding year and the size of their annual stock compensation grants. The grant to eligible employees uses the closing stock price on the grant date. Accounting rules require recognition of expense under a non-substantive vesting period approach, requiring compensation expense recognition when an employee is eligible to retire. Employees are considered eligible to retire at age 55 and after having completed five years of service. This retiree-eligible population represents 35 percent of the 2015 annual stock-based compensation award expense dollars; therefore, higher stock-based compensation expense is recognized in the first quarter. 3M also has granted progressive (reload) options. These options are nonqualified stock options that were granted to certain participants under the 1997 or 2002 Management Stock Ownership Program, but for which the reload feature was eliminated in 2005 (on a prospective basis only). In addition to the annual grants, the Company makes other minor grants of stock options, restricted stock units and other stock-based grants. The Company issues cash settled restricted stock units and stock appreciation rights in certain countries. These grants do not result in the issuance of common stock and are considered immaterial by the Company. Amounts recognized in the financial statements with respect to stock-based compensation programs, which include stock options, restricted stock, restricted stock units, performance shares, and the General Employees’ Stock Purchase Plan (GESPP), are provided in the following table. Capitalized stock-based compensation amounts were not material for the years ended 2015 , 2014 and 2013 . Stock-Based Compensation Expense Years ended December 31 (Millions) 2015 2014 2013 Cost of sales $ $ $ Selling, general and administrative expenses Research, development and related expenses Stock-based compensation expenses $ $ $ Income tax benefits $ $ $ Stock-based compensation expenses, net of tax $ $ $ Stock Option Program The following table summarizes stock option activity for the years ended December 31: 2015 2014 2013 Weighted Weighted Weighted Number of Average Number of Average Number of Average Options Exercise Price Options Exercise Price Options Exercise Price Under option — January 1 $ $ $ Granted: Annual Progressive (Reload) — — — — Other — — — — Exercised Canceled December 31 $ $ $ Options exercisable December 31 $ $ $ Stock options vest over a period from one to three years with the expiration date at 10 years from date of grant. Outstanding options under grant include grants from previous plans. As of December 31, 2015 , there was $69 million of compensation expense that has yet to be recognized related to non-vested stock option based awards. This expense is expected to be recognized over the remaining weighted-average vesting period of 21 months. For options outstanding at December 31, 2015 , the weighted-average remaining contractual life was 66 months and the aggregate intrinsic value was $1.958 billion. For options exercisable at December 31, 2015 , the weighted-average remaining contractual life was 52 months and the aggregate intrinsic value was $ 1.763 billion. The total intrinsic values of stock options exercised during 2015 , 2014 and 2013 was $465 million, $615 million and $562 million, respectively. Cash received from options exercised during 2015 , 2014 and 2013 was $501 million, $842 million and $1.492 billion, respectively. The Company’s actual tax benefits realized for the tax deductions related to the exercise of employee stock options for 2015 , 2014 and 2013 was $172 million, $226 million and $208 million, respectively. The Company does not have a specific policy to repurchase common shares to mitigate the dilutive impact of options; however, the Company has historically made adequate discretionary purchases, based on cash availability, market trends, and other factors, to satisfy stock option exercise activity. For annual and progressive (reload) options, the weighted average fair value at the date of grant was calculated using the Black-Scholes option-pricing model and the assumptions that follow. As discussed earlier, the progressive (reload) feature was eliminated in 2005, resulting in no activity in the below table for 201 4 and thereafter. Stock Option Assumptions Annual Progressive (Reload) 2015 2014 2013 2015 2014 2013 Exercise price $ $ $ $ — $ — $ Risk-free interest rate % % % — % — % % Dividend yield % % % — % — % % Volatility % % % — % — % % Expected life (months) — — Black-Scholes fair value $ $ $ $ — $ — $ Expected volatility is a statistical measure of the amount by which a stock price is expected to fluctuate during a period. For the 2015 annual grant date, the Company estimated the expected volatility based upon the average of the most recent one year volatility, the median of the term of the expected life rolling volatility, the median of the most recent term of the expected life volatility of 3M stock, and the implied volatility on the grant date. The expected term assumption is based on the weighted average of historical grants. Restricted Stock and Restricted Stock Units The following table summarizes restricted stock and restricted stock unit activity for the years ended December 31: 2015 2014 2013 Weighted Weighted Weighted Average Average Average Number of Grant Date Number of Grant Date Number of Grant Date Awards Fair Value Awards Fair Value Awards Fair Value Nonvested balance — As of January 1 $ $ $ Granted Annual Other Vested Forfeited As of December 31 $ $ $ As of December 31, 2015 , there was $84 million of compensation expense that has yet to be recognized related to non-vested restricted stock and restricted stock units. This expense is expected to be recognized over the remaining weighted-average vesting period of 24 months. The total fair value of restricted stock and restricted stock units that vested during the years ended December 31, 2015 , 2014 and 2013 was $166 million, $145 million and $114 million, respectively. The Company’s actual tax benefits realized for the tax deductions related to the vesting of restricted stock and restricted stock units for the years ended December 31, 2015 , 2014 and 2013 was $62 million, $54 million and $43 million, respectively. Restricted stock units granted under the 3M 2008 Long-Term Incentive Plan generally vest three years following the grant date assuming continued employment. Dividend equivalents equal to the dividends payable on the same number of shares of 3M common stock accrue on these restricted stock units during the vesting period, although no dividend equivalents are paid on any of these restricted stock units that are forfeited prior to the vesting date. Dividends are paid out in cash at the vest date on restricted stock units, except for performance shares which do not earn dividends. Since the rights to dividends are forfeitable, there is no impact on basic earnings per share calculations. Weighted average restricted stock unit shares outstanding are included in the computation of diluted earnings per share. Performance Shares Instead of restricted stock units, the Company makes annual grants of performance shares to members of its executive management. The 2015 performance criteria for these performance shares (organic volume growth, return on invested capital, free cash flow conversion, and earnings per share growth) were selected because the Company believes that they are important drivers of long-term stockholder value. The number of shares of 3M common stock that could actually be delivered at the end of the three -year performance period may be anywhere from 0% to 200% of each performance share granted, depending on the performance of the Company during such performance period. Non-substantive vesting requires that expense for the performance shares be recognized over one or three years depending on when each individual became a 3M executive. Performance shares do not accrue dividends during the performance period. Therefore, the grant date fair value is determined by reducing the closing stock price on the date of grant by the net present value of dividends during the performance period. The following table summarizes performance share activity for the years ended December 31: 2015 2014 2013 Weighted Weighted Weighted Average Average Average Number of Grant Date Number of Grant Date Number of Grant Date Awards Fair Value Awards Fair Value Awards Fair Value Undistributed balance — As of January 1 $ $ $ Granted Distributed Performance change Forfeited As of December 31 $ $ $ As of December 31, 2015 , there was $17 million of compensation expense that has yet to be recognized related to performance shares. This expense is expected to be recognized over the remaining weighted-average earnings period of 10 months. During the years ended December 31, 2015 , 2014 and 2013 , the total fair value of performance shares that were distributed were $54 million, $35 million and $52 million, respectively. The Company’s actual tax benefits realized for the tax deductions related to the distribution of performance shares for the years ended December 31, 2015 , 2014 and 2013 was $15 million, $11 million and $16 million, respectively. General Employees’ Stock Purchase Plan (GESPP): As of December 31, 2015 , shareholders have approved 60 million shares for issuance under the Company’s GESPP. Substantially all employees are eligible to participate in the plan. Participants are granted options at 85% of market value at the date of grant. There are no GESPP shares under option at the beginning or end of each year because options are granted on the first business day and exercised on the last business day of the same month. General Employees’ Stock Purchase Plan 2015 2014 2013 Weighted Weighted Weighted Average Average Average Shares Exercise Price Shares Exercise Price Shares Exercise Price Options granted $ $ $ Options exercised Shares available for grant - December 31 The weighted-average fair value per option granted during 2015 , 2014 and 2013 was $23.56 , $20.95 and $16.49 , respectively. The fair value of GESPP options was based on the 15% purchase price discount. The Company recognized compensation expense for GESSP options of $24 million in 2015 , $22 million in 2014 and $21 million in 2013 . |
Business Segments
Business Segments | 12 Months Ended |
Dec. 31, 2015 | |
Business Segments | |
Business Segments | NOTE 16. Business Segments 3M’s businesses are organized, managed and internally grouped into segments based on differences in markets, products, technologies and services. 3M manages its operations in five business segments: Industrial; Safety and Graphics; Health Care; Electronics and Energy; and Consumer. 3M’s five business segments bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. Transactions among reportable segments are recorded at cost. 3M is an integrated enterprise characterized by substantial intersegment cooperation, cost allocations and inventory transfers. Therefore, management does not represent that these segments, if operated independently, would report the operating income information shown. The difference between operating income and pre-tax income relates to interest income and interest expense, which are not allocated to business segments. Effective in the third quarter of 2015, within the Health Care business segment, the Company formed the Oral Care Solutions Division, which combined the former 3M ESPE and 3M Unitek divisions. Business Segment Products Business Segment Major Products Industrial Tapes, coated, nonwoven and bonded abrasives, adhesives, advanced ceramics, sealants, specialty materials, filtration products, closure systems for personal hygiene products, acoustic systems products, automotive components, abrasion-resistant films, structural adhesives and paint finishing and detailing products Safety and Graphics Personal protection products, traffic safety and security products, commercial graphics systems, commercial cleaning and protection products, floor matting, roofing granules for asphalt shingles, and fall protection products Health Care Medical and surgical supplies, skin health and infection prevention products, drug delivery systems, dental and orthodontic products, health information systems and food safety products Electronics and Energy Optical films solutions for electronic displays, packaging and interconnection devices, insulating and splicing solutions for the electronics, telecommunications and electrical industries, touch screens and touch monitors, renewable energy component solutions, and infrastructure protection products Consumer Sponges, scouring pads, high-performance cloths, consumer and office tapes, repositionable notes, indexing systems, construction and home improvement products, home care products, protective material products, and consumer and office tapes and adhesives Business Segment Information Net Sales Operating Income (Millions) 2015 2014 2013 2015 2014 2013 Industrial $ $ $ $ $ $ Safety and Graphics Health Care Electronics and Energy Consumer Corporate and Unallocated Elimination of Dual Credit Total Company $ $ $ $ $ $ Assets Depreciation & Amortization Capital Expenditures (Millions) 2015 2014 2013 2015 2014 2013 2015 2014 2013 Industrial $ $ $ $ $ $ $ $ $ Safety and Graphics Health Care Electronics and Energy Consumer Corporate and Unallocated Total Company $ $ $ $ $ $ $ $ $ Corporate and unallocated operating income includes a variety of miscellaneous items, such as corporate investment gains and losses, certain derivative gains and losses, certain insurance-related gains and losses, certain litigation and environmental expenses, corporate restructuring charges and certain under- or over-absorbed costs (e.g. pension, stock-based compensation) that the Company may choose not to allocate directly to its business segments. Because this category includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis. 3M business segment reporting measures include dual credit to business segments for certain U.S. sales and related operating income. Management evaluates each of its five business segments based on net sales and operating income performance, including dual credit U.S. reporting to further incentivize U.S. sales growth. As a result, 3M provides additional (“dual”) credit to those business segments selling products in the U.S. to an external customer when that segment is not the primary seller of the product. For example, certain respirators are primarily sold by the Personal Safety Division within the Safety and Graphics business segment; however, the Industrial business segment also sells this product to certain customers in its U.S. markets. In this example, the non-primary selling segment (Industrial) would also receive credit for the associated net sales it initiated and the related approximate operating income. The assigned operating income related to dual credit activity may differ from operating income that would result from actual costs associated with such sales. The offset to the dual credit business segment reporting is reflected as a reconciling item entitled “Elimination of Dual Credit,” such that sales and operating income for the U.S. in total are unchanged . |
Geographic Areas
Geographic Areas | 12 Months Ended |
Dec. 31, 2015 | |
Geographic Areas Disclosure | |
Geographic Areas | NOTE 17. Geographic Areas Geographic area information is used by the Company as a secondary performance measure to manage its businesses. Export sales and certain income and expense items are generally reported within the geographic area where the final sales to 3M customers are made. Property, Plant and Net Sales Operating Income Equipment - net (Millions) 2015 2014 2013 2015 2014 2013 2015 2014 United States $ $ $ $ $ $ $ $ Asia Pacific Europe, Middle East and Africa Latin America and Canada Other Unallocated — — Total Company $ $ $ $ $ $ $ $ Asia Pacific included China/Hong Kong net sales to customers of $2.945 billion in 2015, which approached 10 percent of consolidated worldwide sales. China/Hong Kong net property, plant and equipment (PP&E) was $584 million at December 31, 2015. |
Quarterly Data (Unaudited)
Quarterly Data (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Data (Unaudited) | |
Quarterly Data (Unaudited) | NOTE 18. Quarterly Data (Unaudited) (Millions, except per-share amounts) First Second Third Fourth Year 2015 Quarter Quarter Quarter Quarter 2015 Net sales $ $ $ $ $ Cost of sales Net income including noncontrolling interest Net income attributable to 3M Earnings per share attributable to 3M common shareholders - basic Earnings per share attributable to 3M common shareholders - diluted (Millions, except per-share amounts) First Second Third Fourth Year 2014 Quarter Quarter Quarter Quarter 2014 Net sales $ $ $ $ $ Cost of sales Net income including noncontrolling interest Net income attributable to 3M Earnings per share attributable to 3M common shareholders - basic Earnings per share attributable to 3M common shareholders - diluted Gross profit is calculated as net sales minus cost of sales. Refer to Note 4 for discussion of “Restructuring Actions”, which reduced diluted earnings per share by $0.14 in the fourth quarter of 2015 . |
Significant Accounting Polici28
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Significant Accounting Policies | |
Consolidation | Consolidation: 3M is a diversified global manufacturer, technology innovator and marketer of a wide variety of products. All subsidiaries are consolidated. All intercompany transactions are eliminated. As used herein, the term “3M” or “Company” refers to 3M Company and subsidiaries unless the context indicates otherwise. |
Basis of Presentation | Basis of presentation: Certain balances relative to prior periods have been reclassified to conform to December 31, 2015 presentation in connection with the following, each of which is further discussed in the indicated section of Note 1: · Change in method of classification of certain marketable securities previously classified as non-current to current as further discussed in the Marketable securities section; and · Adoption of Accounting Standards Update (ASU) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs , and ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , in the fourth quarter of 2015 on a retrospective basis as further discussed in the New Accounting Pronouncements section. |
Foreign Currency Translation | Foreign currency translation: Local currencies generally are considered the functional currencies outside the United States. Assets and liabilities for operations in local-currency environments are translated at month-end exchange rates of the period reported. Income and expense items are translated at month-end exchange rates of each applicable month. Cumulative translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity. Although local currencies are typically considered as the functional currencies outside the United States, under Accounting Standards Codification (ASC) 830, Foreign Currency Matters , the reporting currency of a foreign entity’s parent is assumed to be that entity’s functional currency when the economic environment of a foreign entity is highly inflationary—generally when its cumulative inflation is approximately 100 percent or more for the three years that precede the beginning of a reporting period. 3M has a subsidiary in Venezuela with operating income representing less than 1.0 percent of 3M’s consolidated operating income for 2015. Since January 1, 2010, the financial statements of the Venezuelan subsidiary have been remeasured as if its functional currency were that of its parent. The Venezuelan government sets official rates of exchange and conditions precedent to purchase foreign currency at these rates with local currency. Such rates and conditions have been and continue to be subject to change. In January 2014, the Venezuelan government announced that the National Center for Foreign Commerce (CENCOEX), had assumed the role with respect to the continuation of the existing official exchange rate, significantly expanded the use of a second currency auction exchange mechanism called the Complementary System for Foreign Currency Acquirement (or SICAD1), and issued exchange regulations indicating the SICAD1 rate of exchange would be used for payments related to international investments. In late March 2014, the Venezuelan government launched a third foreign exchange mechanism, SICAD2, which it later replaced with another foreign currency exchange platform in February 2015 called the Marginal System of Foreign Currency (SIMADI). The SIMADI rate was described as being derived from daily private bidders and buyers exchanging offers through authorized agents. This rate is approved and published by the Venezuelan Central Bank. The financial statements of 3M’s Venezuelan subsidiary were remeasured utilizing the official CENCOEX (or its predecessor) rate into March 2014, the SICAD1 rate beginning in late March 2014, the SICAD2 rate beginning in June 2014, and the SIMADI rate beginning in February 2015. 3M’s uses of these rates were based upon evaluation of a number of factors including, but not limited to, the exchange rate the Company’s Venezuelan subsidiary may legally use to convert currency, settle transactions or pay dividends; the probability of accessing and obtaining currency by use of a particular rate or mechanism; and the Company’s intent and ability to use a particular exchange mechanism. Other factors notwithstanding, remeasurement impacts of the changes in use of these exchange rates did not have material impacts on 3M’s consolidated results of operations or financial condition. The Company continues to monitor circumstances relative to its Venezuelan subsidiary. Changes in applicable exchange rates or exchange mechanisms may continue in the future. These changes could impact the rate of exchange applicable to remeasure the Company’s net monetary assets (liabilities) denominated in Venezuelan Bolivars (VEF). As of December 31, 2015 , the Company had a balance of net monetary liabilities denominated in VEF of less than 500 million VEF and the CENCOEX, SICAD (formerly SICAD1), and SIMADI exchange rates were approximately 6 VEF, 13 VEF, and 200 VEF per U.S. dollar, respectively. A need to deconsolidate the Company’s Venezuelan subsidiary’s operations may result from a lack of exchangeability of VEF-denominated cash coupled with an acute degradation in the ability to make key operational decisions due to government regulations in Venezuela. 3M monitors factors such as its ability to access various exchange mechanisms; the impact of government regulations on the Company’s ability to manage its Venezuelan subsidiary’s capital structure, purchasing, product pricing, and labor relations; and the current political and economic situation within Venezuela. Based upon such factors as of December 31, 2015 , the Company continues to consolidate its Venezuelan subsidiary. As of December 31, 2015 , the balance of intercompany receivables due from this subsidiary and its equity balance are not significant. |
Reclassifications | Reclassifications: Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform to the current year presentation. |
Use of estimates | Use of estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Cash and cash equivalents | Cash and cash equivalents: Cash and cash equivalents consist of cash and temporary investments with maturities of three months or less when acquired. |
Marketable securities | Marketable securities: Effective December 31, 2015, the Company changed the method of classification of certain securities previously classified as non-current to current. This new method classifies these securities as current or non-current based on the nature of the securities and availability for use in current operations while the prior classification was based on management’s intended holding period, the security’s maturity date and liquidity considerations based on market conditions. The Company believes this method is preferable because it is consistent with how the Company manages its capital structure and liquidity. The prior period balance has been reclassified to conform to the current year presentation: December 31, 2014 (Millions) Previously Reported Impact As Adjusted Marketable securities - current $ $ $ Marketable securities - non-current Total marketable securities $ $ — $ 3M reviews impairments associated with its marketable securities in accordance with the measurement guidance provided by ASC 320 , Investments-Debt and Equity Securities , when determining the classification of the impairment as “temporary” or “other-than-temporary”. A temporary impairment charge results in an unrealized loss being recorded in the other comprehensive income component of shareholders’ equity. Such an unrealized loss does not reduce net income for the applicable accounting period because the loss is not viewed as other-than-temporary. The factors evaluated to differentiate between temporary and other-than-temporary include the projected future cash flows, credit ratings actions, and assessment of the credit quality of the underlying collateral, as well as other factors. |
Investments | Investments: Investments primarily include equity method, cost method, and available-for-sale equity investments. Available-for-sale investments are recorded at fair value. Unrealized gains and losses relating to investments classified as available-for-sale are recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity. |
Other assets | Other assets: Other assets include deferred income taxes, product and other insurance receivables, the cash surrender value of life insurance policies, and other long-term assets. Investments in life insurance are reported at the amount that could be realized under contract at the balance sheet date, with any changes in cash surrender value or contract value during the period accounted for as an adjustment of premiums paid. Cash outflows and inflows associated with life insurance activity are included in “Purchases of marketable securities and investments” and “Proceeds from maturities and sale of marketable securities and investments,” respectively. |
Inventories | Inventories: Inventories are stated at the lower of cost or market, with cost generally determined on a first-in, first-out basis. |
Property, plant and equipment | Property, plant and equipment: Property, plant and equipment, including capitalized interest and internal engineering costs, are recorded at cost. Depreciation of property, plant and equipment generally is computed using the straight-line method based on the estimated useful lives of the assets. The estimated useful lives of buildings and improvements primarily range from ten to forty years, with the majority in the range of twenty to forty years. The estimated useful lives of machinery and equipment primarily range from three to fifteen years, with the majority in the range of five to ten years. Fully depreciated assets are retained in property and accumulated depreciation accounts until disposal. Upon disposal, assets and related accumulated depreciation are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to operations. Property, plant and equipment amounts are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. |
Conditional asset retirement obligations | Conditional asset retirement obligations: A liability is initially recorded at fair value for an asset retirement obligation associated with the retirement of tangible long-lived assets in the period in which it is incurred if a reasonable estimate of fair value can be made. Conditional asset retirement obligations exist for certain long-term assets of the Company. The obligation is initially measured at fair value using expected present value techniques. Over time the liabilities are accreted for the change in their present value and the initial capitalized costs are depreciated over the remaining useful lives of the related assets. The asset retirement obligation liability was $102 million and $96 million at December 31, 2015 and 2014 , respectively. |
Goodwill | Goodwill: Goodwill is the excess of cost of an acquired entity over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is not amortized. Goodwill is tested for impairment annually in the fourth quarter of each year, and is tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level, with all goodwill assigned to a reporting unit. Reporting units are one level below the business segment level, but can be combined when reporting units within the same segment have similar economic characteristics. 3M did not combine any of its reporting units for impairment testing. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The estimated fair value of a reporting unit is determined using earnings for the reporting unit multiplied by a price/earnings ratio for comparable industry groups, or by using a discounted cash flow analysis. Companies have the option to first assess qualitative factors to determine whether the fair value of a reporting unit is not “more likely than not” less than its carrying amount, which is commonly referred to as “Step 0”. 3M has chosen not to apply Step 0 for 2015 or prior period annual goodwill assessments. |
Intangible assets | Intangible assets: Intangible asset types include customer related, patents, other technology-based, tradenames and other intangible assets acquired from an independent party. Intangible assets with a definite life are amortized over a period ranging from one to twenty years on a systematic and rational basis (generally straight line) that is representative of the asset’s use. The estimated useful lives vary by category, with customer related largely between seven to seventeen years, patents largely between five to thirteen years, other technology-based largely between two to fifte en years, definite lived tradenames largely between thr ee and twenty years, and other intangibles largely between two to ten years. Costs related to internally developed intangible assets, such as patents, are expensed as incurred, primarily in “Research, development and related expenses.” Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. Intangible assets with an indefinite life, namely certain tradenames, are not amortized. Indefinite-lived intangible assets are tested for impairment annually, and are tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired. An impairment loss generally would be recognized when the fair value is less than the carrying value of the indefinite-lived intangible asset. |
Restructuring actions | Restructuring actions: Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs, and impairment or accelerated depreciation/amortization of assets associated with such actions. Employee-related severance charges are largely based upon distributed employment policies and substantive severance plans. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the associated actions. Severance amounts for which affected employees were required to render service in order to receive benefits at their termination dates were measured at the date such benefits were communicated to the applicable employees and recognized as expense over the employees’ remaining service periods. Contract termination and other charges primarily reflect costs to terminate a contract before the end of its term (measured at fair value at the time the Company provided notice to the counterparty) or costs that will continue to be incurred under the contract for its remaining term without economic benefit to the Company. Asset impairment charges related to intangible assets and property, plant and equipment reflect the excess of the assets’ carrying values over their fair values. |
Revenue (sales) recognition | Revenue (sales) recognition: The Company sells a wide range of products to a diversified base of customers around the world and has no material concentration of credit risk. Revenue is recognized when the risks and rewards of ownership have substantively transferred to customers. This condition normally is met when the product has been delivered or upon performance of services. The Company records estimated reductions to revenue or records expense for customer and distributor incentives, primarily comprised of rebates and free goods, at the time of the initial sale. These sales incentives are accounted for in accordance with ASC 605, Revenue Recognition . The estimated reductions of revenue for rebates are based on the sales terms, historical experience, trend analysis and projected market conditions in the various markets served. Since the Company serves numerous markets, the rebate programs offered vary across businesses, but the most common incentive relates to amounts paid or credited to customers for achieving defined volume levels or growth objectives. Free goods are accounted for as an expense and recorded in cost of sales. Sales, use, value-added and other excise taxes are not recognized in revenue. The vast majority of 3M’s sales agreements are for standard products and services with customer acceptance occurring upon delivery of the product or performance of the service. However, to a limited extent 3M also enters into agreements that involve multiple elements (such as equipment, installation and service), software, or non-standard terms and conditions. For non-software multiple-element arrangements, the Company recognizes revenue for delivered elements when they have stand-alone value to the customer, they have been accepted by the customer, and for which there are only customary refund or return rights. Arrangement consideration is allocated to the deliverables by use of the relative selling price method. The selling price used for each deliverable is based on vendor-specific objective evidence (VSOE) if available, third-party evidence (TPE) if VSOE is not available, or estimated selling price if neither VSOE nor TPE is available. Estimated selling price is determined in a manner consistent with that used to establish the price to sell the deliverable on a standalone basis. In addition to the preceding conditions, equipment revenue is not recorded until the installation has been completed if equipment acceptance is dependent upon installation or if installation is essential to the functionality of the equipment. Installation revenues are not recorded until installation has been completed. For arrangements (or portions of arrangements) falling within software revenue recognition standards and that do not involve significant production, modification, or customization, revenue for each software or software-related element is recognized when the Company has VSOE of the fair value of all of the undelivered elements and applicable criteria have been met for the delivered elements. When the arrangements involve significant production, modification or customization, long-term construction-type accounting involving proportional performance is generally employed. For prepaid service contracts, sales revenue is recognized on a straight-line basis over the term of the contract, unless historical evidence indicates the costs are incurred on other than a straight-line basis. License fee revenue is recognized as earned, and no revenue is recognized until the inception of the license term. On occasion, agreements will contain milestones, or 3M will recognize revenue based on proportional performance. For these agreements, and depending on the specifics, 3M may recognize revenue upon completion of a substantive milestone, or in proportion to costs incurred to date compared with the estimate of total costs to be incurred. |
Accounts receivable and allowances | Accounts receivable and allowances: Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains allowances for bad debts, cash discounts, product returns and various other items. The allowance for doubtful accounts and product returns is based on the best estimate of the amount of probable credit losses in existing accounts receivable and anticipated sales returns. The Company determines the allowances based on historical write-off experience by industry and regional economic data and historical sales returns. The Company reviews the allowance for doubtful accounts monthly. The Company does not have any significant off-balance-sheet credit exposure related to its customers. |
Advertising and merchandising | Advertising and merchandising: These costs are charged to operations in the period incurred, and totaled $368 million in 2015 , $407 million in 2014 and $423 million in 2013 . |
Research, development, and related expenses | Research, development and related expenses: These costs are charged to operations in the period incurred and are shown on a separate line of the Consolidated Statement of Income. Research, development and related expenses totaled $1.763 billion in 2015 , $1.770 billion in 2014 and $1.715 billion in 2013 . Research and development expenses, covering basic scientific research and the application of scientific advances in the development of new and improved products and their uses, totaled $1.223 billion in 2015 , $1.193 billion in 2014 and $1.150 billion in 2013 . Related expenses primarily include technical support; internally developed patent costs, which include costs and fees incurred to prepare, file, secure and maintain patents; amortization of externally acquired patents and externally acquired in-process research and development; and gains/losses associated with certain corporate approved investments in R&D-related ventures, such as equity method effects and impairments. |
Internal-use software | Internal-use software: The Company capitalizes direct costs of services used in the development of internal-use software. Amounts capitalized are amortized over a period of three to seven years, generally on a straight-line basis, unless another systematic and rational basis is more representative of the software’s use. Amounts are reported as a component of either machinery and equipment or capital leases within property, plant and equipment. |
Environmental | Environmental: Environmental expenditures relating to existing conditions caused by past operations that do not contribute to current or future revenues are expensed. Reserves for liabilities related to anticipated remediation costs are recorded on an undiscounted basis when they are probable and reasonably estimable, generally no later than the completion of feasibility studies, the Company’s commitment to a plan of action, or approval by regulatory agencies. Environmental expenditures for capital projects that contribute to current or future operations generally are capitalized and depreciated over their estimated useful lives. |
Income taxes | Income taxes: The provision for income taxes is determined using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists. As of December 31, 2015 and 2014 , the Company had valuation allowances of $31 million and $22 million on its deferred tax assets, respectively. |
Earnings Per Share | Earnings per share: The difference in the weighted average 3M shares outstanding for calculating basic and diluted earnings per share attributable to 3M common shareholders is the result of the dilution associated with the Company’s stock-based compensation plans. Certain options outstanding under these stock-based compensation plans during the years 2015 , 2014 and 2013 were not included in the computation of diluted earnings per share attributable to 3M common shareholders because they would not have had a dilutive effect ( 5.0 million average options for 2015 , 1.4 million average options for 2014 , and 2.0 million average options for 2013) . The computations for basic and diluted earnings per share for the years ended December 31 follow: Earnings Per Share Computations (Amounts in millions, except per share amounts) 2015 2014 2013 Numerator: Net income attributable to 3M $ $ $ Denominator: Denominator for weighted average 3M common shares outstanding — basic Dilution associated with the Company’s stock-based compensation plans Denominator for weighted average 3M common shares outstanding — diluted Earnings per share attributable to 3M common shareholders — basic $ $ $ Earnings per share attributable to 3M common shareholders — diluted $ $ $ |
Stock-based compensation | Stock-based compensation: The Company recognizes compensation expense for its stock-based compensation programs, which include stock options, restricted stock, restricted stock units, performance shares, and the General Employees’ Stock Purchase Plan (GESPP). Under applicable accounting standards, the fair value of share-based compensation is determined at the grant date and the recognition of the related expense is recorded over the period in which the share-based compensation vests. Refer to Note 15 for additional information. |
Comprehensive income | Comprehensive income: Total comprehensive income and the components of accumulated other comprehensive income (loss) are presented in the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Changes in Equity. Accumulated other comprehensive income (loss) is composed of foreign currency translation effects (including hedges of net investments in international companies), defined benefit pension and postretirement plan adjustments, unrealized gains and losses on available-for-sale debt and equity securities, and unrealized gains and losses on cash flow hedging instruments. |
Derivatives and hedging activities | Derivatives and hedging activities: All derivative instruments within the scope of ASC 815, Derivatives and Hedging , are recorded on the balance sheet at fair value. The Company uses interest rate swaps, currency and commodity price swaps, and foreign currency forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity market volatility. All hedging instruments that qualify for hedge accounting are designated and effective as hedges, in accordance with U.S. generally accepted accounting principles. If the underlying hedged transaction ceases to exist, all changes in fair value of the related derivatives that have not been settled are recognized in current earnings. Instruments that do not qualify for hedge accounting are marked to market with changes recognized in current earnings. Cash flows from derivative instruments are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company does not hold or issue derivative financial instruments for trading purposes and is not a party to leveraged derivatives. |
Credit risk | Credit risk: The Company is exposed to credit loss in the event of nonperformance by counterparties in interest rate swaps, currency swaps, commodity price swaps, and forward and option contracts. However, the Company’s risk is limited to the fair value of the instruments. The Company actively monitors its exposure to credit risk through the use of credit approvals and credit limits, and by selecting major international banks and financial institutions as counterparties. 3M enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between a 3M entity and the counterparty as a result of multiple, separate derivative transactions. The Company does not anticipate nonperformance by any of these counterparties. 3M has elected to present the fair value of derivative assets and liabilities within the Company’s consolidated balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise qualify for net presentation. |
Fair value measurements | Fair value measurements: 3M follows ASC 820, Fair Value Measurements and Disclosures , with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis. Under the standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The standard also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Acquisitions | Acquisitions: The Company accounts for business acquisitions in accordance with ASC 805, Business Combinations . This standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard prescribe, among other things, the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration) and the exclusion of transaction and acquisition-related restructuring costs from acquisition accounting. |
New Accounting Pronouncements | New Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity , which changed the criteria for determining which disposals can be presented as discontinued operations and modified related disclosure requirements. This standard has the impact of reducing the frequency of disposals reported as discontinued operations, by requiring such a disposal to represent a strategic shift that has or will have a major effect on an entity’s operations and financial results. However, existing provisions that prohibited an entity from reporting a discontinued operation if it had certain continuing cash flows or involvement with the component after disposal were eliminated by this standard. The ASU also expands the disclosures for discontinued operations and requires new disclosures related to individually significant disposals that do not qualify as discontinued operations. For 3M, this ASU was effective prospectively beginning January 1, 2015. This ASU was applied to the 2015 divestiture information discussed in Note 2 and had no material impact on consolidated results of operations and financial condition. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , and in August 2015 issued ASU No. 2015-14, which amended ASU No. 2014-09 as to effective date. The ASU, as amended, provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle the ASU includes provisions within a five step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when (or as) an entity satisfies a performance obligation. The standard also specifies the accounting for some costs to obtain or fulfill a contract with a customer and requires expanded disclosures about revenue recognition. The standard provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. For 3M, the ASU, as amended, is effective January 1, 2018. The Company is currently assessing this standard’s impact on 3M’s consolidated results of operations and financial condition. In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis , which changes guidance related to both the variable interest entity (VIE) and voting interest entity (VOE) consolidation models. With respect to the VIE model, the standard changes, among other things, the identification of variable interests associated with fees paid to a decision maker or service provider, the VIE characteristics for a limited partner or similar entity, and the primary beneficiary determination. With respect to the VOE model, the ASU eliminates the presumption that a general partner controls a limited partnership or similar entity unless the presumption can otherwise be overcome. Under the new guidance, a general partner would largely not consolidate a partnership or similar entity under the VOE model. For 3M, this ASU is effective January 1, 2016, with early adoption permitted. 3M does not have significant involvement with entities subject to consolidation considerations impacted by the VIE model changes or with limited partnerships potentially impacted by the VOE model changes. As a result, 3M does not expect this ASU to have a material impact on the Company’s consolidated results of operations and financial condition. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs , and in August 2015 issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . Under ASU 2015-03, debt issuance costs reported on the consolidated balance sheet would be reflected as a direct deduction from the related debt liability rather than as an asset. While ASU 2015-03 addresses costs related to term debt, ASU No. 2015-15 provides clarification regarding costs to secure revolving lines of credit, which are, at the outset, not associated with an outstanding borrowing. ASU No. 2015-15 provides commentary that the SEC staff would not object to an entity deferring and presenting costs associated with line-of-credit arrangements as an asset and subsequently amortizing them ratably over the term of the revolving debt arrangement. For 3M, ASU No. 2015-03 is effective January 1, 2016, with early adoption permitted. The Company adopted this ASU in the fourth quarter of 2015 with retrospective application to prior periods. As a result, debt issue costs aggregating $26 million previously included within Other Assets have been reflected as reductions in the balances of Long-Term Debt as of December 31, 2014. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Arrangement , which requires a customer to determine whether a cloud computing arrangement contains a software license. If the arrangement contains a software license, the customer would account for fees related to the software license element in a manner consistent with accounting for the acquisition of other acquired software licenses. If the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. An arrangement would contain a software license element if both (1) the customer has the contractual right to take possession of the software at any time during the hosting period without significant penalty and (2) it is feasible for the customer to either run the software on its own hardware or contract with another party unrelated to the vendor to host the software. For 3M, this ASU is effective January 1, 2016, with early adoption permitted. The standard provides for adoption either fully retrospectively or prospectively to arrangements entered into, or materially modified, after the effective date. The Company does not expect this ASU to have a material impact on 3M’s consolidated results of operations and financial condition. In May 2015, the FASB issued ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) . This standard modifies existing disclosure requirements such that investments for which the practical expedient is used to measure their fair value at net asset value (NAV) would be removed from the fair value hierarchy disclosures. Instead, an entity would be required to include those investments as a reconciling item such that the total fair value amount of investments in the fair value hierarchy disclosure is consistent with the amount on the balance sheet. Changes were also made to the requirements in a sponsor’s employee benefit plan asset disclosures. For 3M, this standard is effective January 1, 2016, with early adoption permitted. The Company adopted this ASU in the fourth quarter of 2015 with retrospective application to prior periods. As a result, Note 11, Pension and Postretirement Benefit Plans, reflects the modified disclosures with respect to applicable plan assets. As this ASU only relates to certain disclosures, it did not impact the Company’s consolidated results of operations and financial condition. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory , which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. For 3M, this standard is effective prospectively beginning January 1, 2017, with early adoption permitted. The Company is currently assessing this ASU’s impacts on 3M’s consolidated results of operations and financial condition. In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments , that eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Under existing standards, an acquirer in a business combination reports provisional amounts with respect to acquired assets and liabilities when their measurements are incomplete as of the end of the reporting period. Prior to the impact of this ASU, an acquirer is required to adjust provisional amounts (and the related impact on earnings) by restating prior period financial statements during the measurement period which cannot exceed one year from the date of acquisition. The new guidance requires that the cumulative impact of a measurement-period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified—eliminating the requirement to restate prior period financial statements. The new standard requires disclosure of the nature and amount of measurement-period adjustments as well as information with respect to the portion of the adjustments recorded in current-period earnings that would have been recorded in previous reporting periods if the adjustments to provisional amounts had been recognized as of the acquisition date. The ASU is applied prospectively to measurement-period adjustments that occur after the effective date. For 3M, this standard is required prospectively beginning January 1, 2016, with early adoption permitted. The Company adopted this standard with respect to measurement-period adjustments beginning in the fourth quarter of 2015. Additional disclosure, as applicable, is included in Note 2, Acquisitions and Divestitures. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes , which requires entities to present deferred tax assets (DTAs) and deferred tax liabilities (DTLs), along with any related valuation allowance, as noncurrent in a balance sheet. This ASU eliminates current guidance requiring deferred taxes for each jurisdiction to be presented as a net current asset or liability and a net noncurrent asset or liability. As a result, each jurisdiction would have one net noncurrent DTA or DTL balance. The ASU does not change the existing requirement that only permits offsetting DTAs and DTLs within a particular jurisdiction. For 3M, this standard is effective January 1, 2017, with early adoption permitted. In light of the process simplification provided by this ASU, the Company adopted this standard in the fourth quarter of 2015 with retrospective application to prior periods. As a result, the December 31, 2014 balances of DTAs and DTLs previously reported were impacted as follows: December 31, 2014 (Millions) Previously Reported Impact As Adopted Prepaid expenses and other (within other current assets) $ $ $ Other current tax assets (within other current assets) — Deferred tax assets (within other assets) Deferred tax liabilities (within other current liabilities) — In conjunction with the adoption of this ASU, 3M reclassified $169 million of remaining other current tax assets to prepaid expenses and other to conform to the 2015 presentation. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , which revises the accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new guidance requires the fair value measurement of investments in equity securities and other ownership interests in an entity, including investments in partnerships, unincorporated joint ventures and limited liability companies (collectively, equity securities) that do not result in consolidation and are not accounted for under the equity method. Entities will need to measure these investments and recognize changes in fair value in net income. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities they classify under current guidance as available for sale in other comprehensive income (OCI). They also will no longer be able to use the cost method of accounting for equity securities that do not have readily determinable fair values. Instead, for these types of equity investments that do not otherwise qualify for the net asset value practical expedient, entities will be permitted to elect a practicability exception and measure the investment at cost less impairment plus or minus observable price changes (in orderly transactions). The ASU also establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option (FVO) has been elected. Under this guidance, an entity would be required to separately present in OCI the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. For derivative liabilities for which the FVO has been elected, however, any changes in fair value attributable to instrument-specific credit risk would continue to be presented in net income, which is consistent with current guidance. For 3M, this standard is effective beginning January 1, 2018 via a cumulative-effect adjustment to beginning retained earnings, except for guidance relative to equity securities without readily determinable fair values which is applied prospectively. The Company is currently assessing this ASU’s impacts on 3M’s consolidated results of operations and financial condition. |
Significant Accounting Polici29
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings per share | Earnings Per Share Computations (Amounts in millions, except per share amounts) 2015 2014 2013 Numerator: Net income attributable to 3M $ $ $ Denominator: Denominator for weighted average 3M common shares outstanding — basic Dilution associated with the Company’s stock-based compensation plans Denominator for weighted average 3M common shares outstanding — diluted Earnings per share attributable to 3M common shareholders — basic $ $ $ Earnings per share attributable to 3M common shareholders — diluted $ $ $ |
Change in accounting principle marketable securities | |
Impact on previously reported values after accounting change | December 31, 2014 (Millions) Previously Reported Impact As Adjusted Marketable securities - current $ $ $ Marketable securities - non-current Total marketable securities $ $ — $ |
ASU 2015-17 Balance sheet classification of deferred taxes | |
Impact on previously reported values after accounting change | December 31, 2014 (Millions) Previously Reported Impact As Adopted Prepaid expenses and other (within other current assets) $ $ $ Other current tax assets (within other current assets) — Deferred tax assets (within other assets) Deferred tax liabilities (within other current liabilities) — |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Acquisitions | |
Allocation of purchase price | 2015 Acquisition Activity Finite-Lived Intangible-Asset (Millions) Capital Polypore Weighted-Average Asset (Liability) Safety Separations Media Other Total Lives (Years) Accounts receivable $ $ $ $ Inventory Other current assets Property, plant, and equipment Purchased finite-lived intangible assets: Customer related intangible assets Patents Other technology-based intangible assets Definite-lived tradenames Other amortizable intangible assets — — Purchased indefinite-lived intangible assets — — Purchased goodwill Accounts payable and other liabilities, net of other assets Interest bearing debt — — Deferred tax asset/(liability) — Net assets acquired $ $ $ $ Supplemental information: Cash paid $ $ $ $ Less: Cash acquired — Cash paid, net of cash acquired $ $ $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets | |
Goodwill | Dec. 31, 2014 2014 Dec. 31, 2015 2015 Dec. 31, 2013 acquisition translation 2014 acquisition translation 2015 (Millions) Balance activity and other Balance activity and other Balance Industrial $ $ — $ $ $ $ $ Safety and Graphics — Health Care Electronics and Energy — — Consumer — — Total Company $ $ $ $ $ $ $ |
Acquired Intangible Assets | (Millions) 2015 2014 Customer related intangible assets $ $ Patents Other technology-based intangible assets Definite-lived tradenames Other amortizable intangible assets Total gross carrying amount $ $ Accumulated amortization — customer related Accumulated amortization — patents Accumulated amortization — other technology based Accumulated amortization — definite-lived tradenames Accumulated amortization — other Total accumulated amortization $ $ Total finite-lived intangible assets — net $ $ Non-amortizable intangible assets (primarily tradenames) Total intangible assets — net $ $ |
Schedule of amortization expense for acquired intangible assets | Amortization expense for the years ended December 31 follows: (Millions) 2015 2014 2013 Amortization expense $ $ $ |
Schedule of expected amortization expense for acquired amortizable intangible assets | Expected amortization expense for acquired amortizable intangible assets recorded as of December 31, 2015 follows: After (Millions) 2016 2017 2018 2019 2020 2020 Amortization expense $ $ $ $ $ $ |
Restructuring Actions (Tables)
Restructuring Actions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Components of restructuring by business segment | Components of these restructuring charges are summarized by business segment as follows: Year ended December 31, 2015 (Millions) Employee-Related Asset-Related Total Industrial $ $ $ Safety and Graphics — Health Care — Electronics and Energy Consumer — Corporate and Unallocated — Total Expense $ $ $ |
Schedule of restructuring charges by income statement line | The preceding restructuring charges were recorded in the income statement as follows: (Millions) 2015 Cost of sales Selling, general and administrative expenses Research, development and related expenses Total $ |
Accrued restructuring action balances | Components of these restructuring actions, including cash and non-cash impacts, follow: Year ended December 31, 2015 (Millions) Employee-Related Asset-Related Total Expense incurred $ $ $ Non-cash changes Cash payments — Accrued 2015 restructuring action balances as of December 31, 2015 $ $ — $ |
Supplemental Balance Sheet In33
Supplemental Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Balance Sheet Information | |
Supplemental Balance Sheet Information | (Millions) 2015 2014 Other current assets Prepaid expenses and other $ $ Derivative assets-current Insurance related receivables, prepaid expenses and other Total other current assets $ $ Investments Equity method $ $ Cost method Other investments Total investments $ $ Property, plant and equipment - at cost Land $ $ Buildings and leasehold improvements Machinery and equipment Construction in progress Capital leases Gross property, plant and equipment Accumulated depreciation Property, plant and equipment - net $ $ Other assets Deferred income taxes $ $ Insurance related receivables and other Cash surrender value of life insurance policies Other Total other assets $ $ Other current liabilities Accrued trade payables $ $ Deferred income Derivative liabilities Dividends payable — Employee benefits and withholdings Contingent liability claims and other Property and other taxes Pension and postretirement benefits Other Total other current liabilities $ $ Other liabilities Long term income taxes payable $ $ Employee benefits Contingent liability claims and other Capital lease obligations Deferred income Deferred income taxes Other Total other liabilities $ $ |
Supplemental Equity and Compr34
Supplemental Equity and Comprehensive Income Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Equity and Comprehensive Income Information | |
Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M | Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M by Component Defined Benefit Debt and Cash Flow Accumulated Pension and Equity Hedging Other Cumulative Postretirement Securities, Instruments, Comprehensive Translation Plans Unrealized Unrealized Income (Millions) Adjustment Adjustment Gain (Loss) Gain (Loss) (Loss) Balance at December 31, 2012, net of tax: $ $ $ $ $ Other comprehensive income (loss), before tax: Amounts before reclassifications — Amounts reclassified out — — Total other comprehensive income (loss), before tax — Tax effect — Total other comprehensive income (loss), net of tax — Balance at December 31, 2013, net of tax: $ $ $ $ $ Other comprehensive income (loss), before tax: Amounts before reclassifications Amounts reclassified out — Total other comprehensive income (loss), before tax Tax effect Total other comprehensive income (loss), net of tax Impact from purchase of subsidiary shares — — Balance at December 31, 2014, net of tax $ $ $ — $ $ Other comprehensive income (loss), before tax: Amounts before reclassifications — Amounts reclassified out — — Total other comprehensive income (loss), before tax — Tax effect — Total other comprehensive income (loss), net of tax — Balance at December 31, 2015, net of tax: $ $ $ — $ $ |
Reclassifications Out of Accumulated Other Comprehensive Income | Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M Amounts Reclassified from Accumulated Other Comprehensive Income (Millions) Year ended Year ended Year ended Details about Accumulated Other December 31, December 31, December 31, Location on Income Comprehensive Income Components 2015 2014 2013 Statement Gains (losses) associated with, defined benefit pension and postretirement plans amortization Transition asset $ $ $ See Note 11 Prior service benefit See Note 11 Net actuarial loss See Note 11 Curtailments/Settlements — — See Note 11 Total before tax Tax effect Provision for income taxes Net of tax $ $ $ Debt and equity security gains (losses) Sales or impairments of securities $ — $ $ — Selling, general and administrative expenses Total before tax — — Tax effect — — — Provision for income taxes Net of tax $ — $ $ — Cash flow hedging instruments gains (losses) Foreign currency forward/option contracts $ $ $ Cost of sales Foreign currency forward contracts — — Interest expense Commodity price swap contracts Cost of sales Interest rate swap contracts Interest expense Total before tax Tax effect Provision for income taxes Net of tax $ $ $ Total reclassifications for the period, net of tax $ $ $ |
Effect of purchase of subsidiary shares on equity attributable to 3M Company shareholders | The following table summarizes the effects of these 2014 transactions on equity attributable to 3M Company shareholders: Year ended (Millions) December 31, 2014 Net income attributable to 3M $ Impact of purchase of subsidiary shares Change in 3M Company shareholders’ equity from net income attributable to 3M and impact of purchase of subsidiary shares $ |
Supplemental Cash Flow Inform35
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Elements | |
Supplemental Cash Flow Information | (Millions) 2015 2014 2013 Cash income tax payments, net of refunds $ $ $ Cash interest payments Capitalized interest |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Before Income Taxes | Income Before Income Taxes (Millions) 2015 2014 2013 United States $ $ $ International Total $ $ $ |
Provision for Income Taxes | Provision for Income Taxes (Millions) 2015 2014 2013 Currently payable Federal $ $ $ State International Deferred Federal State International Total $ $ $ |
Components of Deferred Tax Assets and Liabilities | Components of Deferred Tax Assets and Liabilities (Millions) 2015 2014 Deferred tax assets: Accruals not currently deductible Employee benefit costs $ $ Product and other claims Miscellaneous accruals Pension costs Stock-based compensation Net operating/capital loss carryforwards Foreign tax credits Inventory Other — Gross deferred tax assets Valuation allowance Total deferred tax assets $ $ Deferred tax liabilities: Product and other insurance receivables $ $ Accelerated depreciation Intangible amortization Currency translation Other — Total deferred tax liabilities $ $ Net deferred tax assets (liabilities) $ $ |
Reconciliation of Effective Income Tax Rate | Reconciliation of Effective Income Tax Rate 2015 2014 2013 Statutory U.S. tax rate % % % State income taxes - net of federal benefit International income taxes - net U.S. research and development credit Reserves for tax contingencies Domestic Manufacturer’s deduction All other - net Effective worldwide tax rate % % % |
Reconciliation of Federal, State and Foreign Tax Gross Unrecognized Tax Benefits | Federal, State and Foreign Tax (Millions) 2015 2014 2013 Gross UTB Balance at January 1 $ $ $ Additions based on tax positions related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years Settlements Reductions due to lapse of applicable statute of limitations Gross UTB Balance at December 31 $ $ $ Net UTB impacting the effective tax rate at December 31 $ $ $ |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Marketable Securities | |
Schedule of Marketable Securities | December 31, December 31, (Millions) 2015 2014 U.S. government agency securities $ — $ Foreign government agency securities Corporate debt securities Commercial paper — Certificates of deposit/time deposits U.S. treasury securities — U.S. municipal securities — Asset-backed securities: Automobile loan related Credit card related Equipment lease related Other Asset-backed securities total Current marketable securities $ $ U.S. municipal securities $ $ Non-current marketable securities $ $ Total marketable securities $ $ |
Marketable securities by contractual maturity | (Millions) December 31, 2015 Due in one year or less $ Due after one year through five years Due after five years through ten years Due after ten years — Total marketable securities $ |
Long-Term Debt and Short-Term38
Long-Term Debt and Short-Term Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Long-Term Debt and Short-Term Borrowings | |
Schedule of Long-Term Debt | Long-Term Debt Currency/ Effective Final (Millions) Fixed vs. Interest Maturity Carrying Value Description / 2015 Principal Amount Floating Rate Date 2015 2014 Medium-term note ($1 billion) USD Fixed % $ $ Medium-term note ($650 million) USD Fixed % Medium-term note ( 500 million Euros) Euro Floating % Medium-term note ($450 million) USD Floating % — Medium-term note ($600 million) USD Floating % Medium-term note ($25 million) USD Fixed % Medium-term note (650 million Euros) Euro Floating % — Medium-term note ($300 million) USD Floating % — Medium-term note ($200 million) USD Fixed % — Eurobond (300 million Euros) Euro Floating % Eurobond (300 million Euros) Euro Fixed % Medium-term note ($600 million) USD Fixed % Medium-term note (600 million Euros) Euro Fixed % — Medium-term note ($550 million) USD Fixed % — Medium-term note (750 million Euros) Euro Fixed % 30-year debenture ($330 million) USD Fixed % Medium-term note (500 million Euros) Euro Fixed % — 30-year bond ($750 million) USD Fixed % Floating rate note ($96 million) USD Floating % Medium-term note ($325 million) USD Fixed % Floating rate note ($55 million) USD Floating % Other borrowings Various % 2016-2040 Total long-term debt $ $ Less: current portion of long-term debt Long-term debt (excluding current portion) $ $ |
Schedule of Post-Swap Borrowing (Long-Term Debt, Including Current Portion) | Post-Swap Borrowing (Long-Term Debt, Including Current Portion) 2015 2014 Carrying Effective Carrying Effective (Millions) Value Interest Rate Value Interest Rate Fixed-rate debt $ % $ % Floating-rate debt % % Total long-term debt, including current portion $ $ |
Schedule of Short-Term Borrowings and Current Portion of Long-Term Debt | Short-Term Borrowings and Current Portion of Long-Term Debt Effective Carrying Value (Millions) Interest Rate 2015 2014 Current portion of long-term debt % $ $ U.S. dollar commercial paper — % — — Other borrowings % Total short-term borrowings and current portion of long-term debt $ $ |
Schedule of Maturities of Long-Term Debt | Maturities of Long-term Debt Maturities of long-term debt for the five years subsequent of December 31, 2015 are as follows (in millions): After 2016 2017 2018 2019 2020 2020 Total $ $ $ $ $ $ $ |
Pension and Postretirement Be39
Pension and Postretirement Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Reconciliation of the beginning and ending balances of the benefit obligation and the fair value of plan assets | Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2015 2014 2015 2014 2015 2014 Change in benefit obligation Benefit obligation at beginning of year $ $ $ $ $ $ Acquisitions/Transfers in — — — — — Service cost Interest cost Participant contributions — — Foreign exchange rate changes — — Plan amendments — — Actuarial (gain) loss Medicare Part D Reimbursement — — — — Benefit payments Settlements, curtailments, special termination benefits and other — Benefit obligation at end of year $ $ $ $ $ $ Change in plan assets Fair value of plan assets at beginning of year $ $ $ $ $ $ Acquisitions/Transfers in — — — — — Actual return on plan assets Company contributions Participant contributions — — Foreign exchange rate changes — — — — Benefit payments Settlements, curtailments, special termination benefits and other — — — Fair value of plan assets at end of year $ $ $ $ $ $ Funded status at end of year $ $ $ $ $ $ |
Amounts recognized in the Consolidated Balance Sheet | Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2015 2014 2015 2014 2015 2014 Amounts recognized in the Consolidated Balance Sheet as of Dec. 31, Non-current assets $ $ $ $ $ — $ — Accrued benefit cost Current liabilities Non-current liabilities Ending balance $ $ $ $ $ $ |
Amounts recognized in accumulated other comprehensive income | Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2015 2014 2015 2014 2015 2014 Amounts recognized in accumulated other comprehensive income as of Dec. 31, Net transition obligation (asset) $ — $ — $ $ $ — $ — Net actuarial loss (gain) Prior service cost (credit) Ending balance $ $ $ $ $ $ |
Amounts relating to pension plans with accumulated benefit obligations in excess of plan assets | The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of December 31: Qualified and Non-qualified Pension Plans United States International (Millions) 2015 2014 2015 2014 Projected benefit obligation $ $ $ $ Accumulated benefit obligation Fair value of plan assets |
Components of net periodic benefit cost (benefit) | Components of net periodic cost and other amounts recognized in other comprehensive income Net periodic benefit cost is recorded in cost of sales, selling, general and administrative expenses, and research, development and related expenses. Components of net periodic benefit cost and other changes in plan assets and benefit obligations recognized in other comprehensive income for the years ended December 31 follow: Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2015 2014 2013 2015 2014 2013 2015 2014 2013 Net periodic benefit cost (benefit) Service cost $ $ $ $ $ $ $ $ $ Interest cost Expected return on plan assets Amortization of transition (asset) obligation — — — — — — Amortization of prior service cost (benefit) Amortization of net actuarial (gain) loss Net periodic benefit cost (benefit) $ $ $ $ $ $ $ $ $ Settlements, curtailments, special termination benefits and other — — — — Net periodic benefit cost (benefit) after settlements, curtailments, special termination benefits and other $ $ $ $ $ $ $ $ $ Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss Amortization of transition (asset) obligation — — — — — — Prior service cost (benefit) — — — Amortization of prior service cost (benefit) Net actuarial (gain) loss Amortization of net actuarial (gain) loss Foreign currency — — — Total recognized in other comprehensive (income) loss $ $ $ $ $ $ $ $ $ Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss $ $ $ $ $ $ $ $ $ |
Amounts expected to be amortized from accumulated other comprehensive income into net periodic benefit costs over next fiscal year | Amounts expected to be amortized from accumulated other comprehensive income into net periodic benefit costs over the next fiscal year Qualified and Non-qualified Pension Benefits Postretirement (Millions) United States International Benefits Amortization of transition (asset) obligation $ — $ $ — Amortization of prior service cost (benefit) Amortization of net actuarial (gain) loss Total amortization expected over the next fiscal year $ $ $ |
Weighted-average assumptions used to determine benefit obligations and net cost | Weighted-average assumptions used to determine benefit obligations as of December 31 Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits 2015 2014 2013 2015 2014 2013 2015 2014 2013 Discount rate % % % % % % % % % Compensation rate increase % % % % % % N/A N/A N/A Weighted-average assumptions used to determine net cost for years ended December 31 Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits 2015 2014 2013 2015 2014 2013 2015 2014 2013 Discount rate % % % % % % % % % Expected return on assets % % % % % % % % % Compensation rate increase % % % % % % N/A N/A N/A |
Estimated future pension and postretirement benefit payments | Future Pension and Postretirement Benefit Payments The following table provides the estimated pension and postretirement benefit payments that are payable from the plans to participants. Qualified and Non-qualified Pension Benefits Postretirement (Millions) United States International Benefits 2016 Benefit Payments $ $ $ 2017 Benefit Payments 2018 Benefit Payments 2019 Benefit Payments 2020 Benefit Payments Next five years |
United States Qualified and Non-qualified Pension Benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Fair values of the assets held by the plans by asset category | The fair values of the assets held by the U.S. pension plans by asset class are as follows: Fair Value Measurements Using Inputs Considered as Fair Value at (Millions) Level 1 Level 2 Level 3 Dec. 31, Asset Class 2015 2014 2015 2014 2015 2014 2015 2014 Equities U.S. equities $ $ $ — $ — $ — $ — $ $ Non-U.S. equities — — — — Index and long/short equity funds* Total Equities $ $ $ — $ — $ — $ — $ $ Fixed Income U.S. government securities $ $ $ $ $ — $ — $ $ Non-U.S. government securities — — — Preferred and convertible securities — — U.S. corporate bonds — — Non-U.S. corporate bonds — — — — Derivative instruments — — Other* Total Fixed Income $ $ $ $ $ — $ — $ $ Private Equity Derivative instruments $ — $ — $ — $ — $ $ $ $ Growth equity — — — — Partnership investments* Total Private Equity $ $ $ — $ — $ $ $ $ Absolute Return Derivative instruments $ — $ — $ $ — $ — $ — $ $ — Fixed income and other — — Hedge fund/fund of funds* Partnership investments* Total Absolute Return $ $ $ $ $ — $ — $ $ Cash and Cash Equivalents Cash and cash equivalents $ $ $ $ $ — $ — $ $ Cash and cash equivalents, valued at net asset value* Total Cash and Cash Equivalents $ $ $ $ $ — $ — $ $ Total $ $ $ $ $ $ $ $ Other items to reconcile to fair value of plan assets $ $ Fair value of plan assets $ $ |
International Qualified and Non-qualified Pension Benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Fair values of the assets held by the plans by asset category | The fair values of the assets held by the international pension plans by asset class are as follows: Fair Value Measurements Using Inputs Considered as Fair Value at (Millions) Level 1 Level 2 Level 3 Dec. 31, Asset Class 2015 2014 2015 2014 2015 2014 2015 2014 Equities Growth equities $ $ $ $ $ — $ — $ $ Value equities — — Core equities Equities, valued at net asset value* Total Equities $ $ $ $ $ $ $ $ Fixed Income Domestic government $ $ $ $ $ $ $ $ Foreign government — — — Corporate debt securities Fixed income securities, valued at net asset value* Total Fixed Income $ $ $ $ $ $ $ $ Private Equity Real estate $ $ $ $ $ $ $ $ Real estate, valued at net asset value* Partnership investments* Total Private Equity $ $ $ $ $ $ $ $ Absolute Return Derivatives $ $ — $ $ $ — $ — $ $ Insurance — — — — Other — — Other, valued at net asset value* Hedge funds* Total Absolute Return $ $ — $ $ $ $ $ $ Cash and Cash Equivalents Cash and cash equivalents $ $ $ $ $ — $ — $ $ Cash and cash equivalents, valued at net asset value* Total Cash and Cash Equivalents $ $ $ $ $ — $ — $ $ Total $ $ $ $ $ $ $ $ Other items to reconcile to fair value of plan assets $ $ Fair value of plan assets $ $ |
Postretirement Benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Fair values of the assets held by the plans by asset category | The fair values of the assets held by the postretirement benefit plans by asset class are as follows: Fair Value Measurements Using Inputs Considered as Fair Value at (Millions) Level 1 Level 2 Level 3 Dec. 31, Asset Class 2015 2014 2015 2014 2015 2014 2015 2014 Equities U.S. equities $ $ $ — $ — $ — $ — $ $ Non-U.S. equities — — — — Index and long/short equity funds* Total Equities $ $ $ — $ — $ — $ — $ $ Fixed Income U.S. government securities $ $ $ $ $ — $ — $ $ Non-U.S. government securities — — — — U.S. corporate bonds — — — — Non-U.S. corporate bonds — — — — Derivative instruments — — — — Other* — Total Fixed Income $ $ $ $ $ — $ — $ $ Private Equity Derivative instruments $ — $ — $ — $ — $ $ $ $ Growth equity — — — — Partnership investments* Total Private Equity $ $ $ — $ — $ $ $ $ Absolute Return Fixed income and other $ $ $ $ $ — $ — $ $ Hedge fund/fund of funds* Partnership investments* Total Absolute Return $ $ $ $ $ — $ — $ $ Cash and Cash Equivalents Cash and cash equivalents $ $ $ — $ $ — $ — $ $ Cash and cash equivalents, valued at net asset value* Total Cash and Cash Equivalents $ $ $ — $ $ — $ — $ $ Total $ $ $ $ $ $ $ $ Other items to reconcile to fair value of plan assets $ $ Fair value of plan assets $ $ |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivatives | |
Gain (loss) on derivative instruments designated as cash flow hedges | Year Ended December 31, 2015 Pretax Gain (Loss) Recognized in Pretax Gain (Loss) Income on Effective Portion of Ineffective Portion of Gain Recognized in Other Derivative as a Result of (Loss) on Derivative and Comprehensive Reclassification from Amount Excluded from Income on Effective Accumulated Other Effectiveness Testing (Millions) Portion of Derivative Comprehensive Income Recognized in Income Derivatives in Cash Flow Hedging Relationships Amount Location Amount Location Amount Foreign currency forward/option contracts $ Cost of sales $ Cost of sales $ — Commodity price swap contracts — Cost of sales Cost of sales — Interest rate swap contracts — Interest expense Interest expense — Total $ $ $ — Year Ended December 31, 2014 Pretax Gain (Loss) Recognized in Pretax Gain (Loss) Income on Effective Portion of Ineffective Portion of Gain Recognized in Other Derivative as a Result of (Loss) on Derivative and Comprehensive Reclassification from Amount Excluded from Income on Effective Accumulated Other Effectiveness Testing (Millions) Portion of Derivative Comprehensive Income Recognized in Income Derivatives in Cash Flow Hedging Relationships Amount Location Amount Location Amount Foreign currency forward/option contracts $ Cost of sales $ Cost of sales $ — Commodity price swap contracts Cost of sales Cost of sales — Interest rate swap contracts Interest expense Interest expense — Total $ $ $ — Year Ended December 31, 2013 Pretax Gain (Loss) Recognized in Pretax Gain (Loss) Income on Effective Portion of Ineffective Portion of Gain Recognized in Other Derivative as a Result of (Loss) on Derivative and Comprehensive Reclassification from Amount Excluded from Income on Effective Accumulated Other Effectiveness Testing (Millions) Portion of Derivative Comprehensive Income Recognized in Income Derivatives in Cash Flow Hedging Relationships Amount Location Amount Location Amount Foreign currency forward/option contracts $ Cost of sales $ Cost of sales $ — Foreign currency forward contracts Interest expense Interest expense — Commodity price swap contracts Cost of sales Cost of sales — Interest rate swap contracts — Interest expense Interest expense — Total $ $ $ — |
Gain (loss) on derivative instruments designated as fair value hedges | Year ended December 31, 2015 Gain (Loss) on Derivative Gain (Loss) on Hedged Item (Millions) Recognized in Income Recognized in Income Derivatives in Fair Value Hedging Relationships Location Amount Location Amount Interest rate swap contracts Interest expense $ Interest expense $ Total $ $ Year ended December 31, 2014 Gain (Loss) on Derivative Gain (Loss) on Hedged Item (Millions) Recognized in Income Recognized in Income Derivatives in Fair Value Hedging Relationships Location Amount Location Amount Interest rate swap contracts Interest expense $ Interest expense $ Total $ $ Year ended December 31, 2013 Gain (Loss) on Derivative Gain (Loss) on Hedged Item (Millions) Recognized in Income Recognized in Income Derivatives in Fair Value Hedging Relationships Location Amount Location Amount Interest rate swap contracts Interest expense $ Interest expense $ Total $ $ |
Gain (loss) on derivative and non-derivative instruments designated as net investment hedges | Year ended December 31, 2015 Pretax Gain (Loss) Recognized as Cumulative Translation within Other Ineffective Portion of Gain (Loss) on Comprehensive Income Instrument and Amount Excluded Derivative and Nonderivative Instruments in Net Investment Hedging on Effective Portion of from Effectiveness Testing Relationships Instrument Recognized in Income (Millions) Amount Location Amount Foreign currency denominated debt $ N/A $ — Foreign currency forward contracts Cost of sales Total $ $ Year ended December 31, 2014 Pretax Gain (Loss) Recognized as Cumulative Translation within Other Ineffective Portion of Gain (Loss) on Comprehensive Income Instrument and Amount Excluded Derivative and Nonderivative Instruments in Net Investment Hedging on Effective Portion of from Effectiveness Testing Relationships Instrument Recognized in Income (Millions) Amount Location Amount Foreign currency denominated debt $ N/A $ — Foreign currency forward contracts Cost of sales Total $ $ Year ended December 31, 2013 Pretax Gain (Loss) Recognized as Cumulative Translation within Other Ineffective Portion of Gain (Loss) on Comprehensive Income Instrument and Amount Excluded Derivative and Nonderivative Instruments in Net Investment Hedging on Effective Portion of from Effectiveness Testing Relationships Instrument Recognized in Income (Millions) Amount Location Amount Foreign currency denominated debt $ N/A $ — Foreign currency forward contracts Cost of sales — Total $ $ — |
Gain (loss) on derivative instruments not designated as hedging instruments | The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments not designated as hedging instruments are as follows: Gain (Loss) on Derivative Recognized in Income Year ended Year ended Year ended December 31, December 31, December 31, Derivatives Not Designated as Hedging Instruments 2015 2014 2013 (Millions) Location Amount Amount Amount Foreign currency forward/option contracts Cost of sales $ $ $ Foreign currency forward contracts Interest expense Commodity price swap contracts Cost of sales — Total $ $ $ |
Location and Fair Value of Derivative Instruments | Gross Assets Liabilities December 31, 2015 Notional Fair Fair (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ Other current assets $ Other current liabilities $ Foreign currency forward/option contracts Other assets Other liabilities Interest rate swap contracts Other assets Other liabilities Total derivatives designated as hedging instruments $ $ Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ Other current assets $ Other current liabilities $ Total derivatives not designated as hedging instruments $ $ Total derivative instruments $ $ Gross Assets Liabilities December 31, 2014 Notional Fair Fair (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ Other current assets $ Other current liabilities $ Foreign currency forward/option contracts Other assets Other liabilities Commodity price swap contracts Other current assets — Other current liabilities Interest rate swap contracts Other assets Other liabilities Total derivatives designated as hedging instruments $ $ Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ Other current assets $ Other current liabilities $ Total derivatives not designated as hedging instruments $ $ Total derivative instruments $ $ |
Offsetting Assets | Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties December 31, 2015 Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject Gross Amount of to Master Netting Agreements Derivative Assets Gross Amount of Presented in the Eligible Offsetting Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Liabilities Received Derivative Assets Derivatives subject to master netting agreements $ $ $ — $ Derivatives not subject to master netting agreements — — Total $ $ December 31, 2014 Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject Gross Amount of to Master Netting Agreements Derivative Assets Gross Amount of Presented in the Eligible Offsetting Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Liabilities Received Derivative Assets Derivatives subject to master netting agreements $ $ $ — $ Derivatives not subject to master netting agreements — — Total $ $ |
Offsetting Liabilities | Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties December 31, 2015 Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject Gross Amount of to Master Netting Agreements Derivative Liabilities Gross Amount of Presented in the Eligible Offsetting Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Assets Pledged Derivative Liabilities Derivatives subject to master netting agreements $ $ $ — $ Derivatives not subject to master netting agreements Total $ $ December 31, 2014 Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject Gross Amount of to Master Netting Agreements Derivative Liabilities Gross Amount of Presented in the Eligible Offsetting Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Assets Pledged Derivative Liabilities Derivatives subject to master netting agreements $ $ $ — $ Derivatives not subject to master netting agreements Total $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | Fair Value Measurements (Millions) Fair Value at Using Inputs Considered as Description December 31, 2015 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: Foreign government agency securities $ $ — $ $ — Corporate debt securities — — Commercial paper — — Certificates of deposit/time deposits — — Asset-backed securities: Automobile loan related — — Credit card related — — Equipment lease related — — Other — — U.S. municipal securities — — Derivative instruments — assets: Foreign currency forward/option contracts — — Interest rate swap contracts — — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts — — Interest rate swap contracts — — Fair Value Measurements (Millions) Fair Value at Using Inputs Considered as Description December 31, 2014 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: U.S. government agency securities $ $ — $ $ — Foreign government agency securities — — Corporate debt securities — — Certificates of deposit/time deposits — — Asset-backed securities: Automobile loan related — — Credit card related — — Equipment lease related — — Other — — U.S. treasury securities — — U.S. municipal securities — — Investments — — Derivative instruments — assets: Foreign currency forward/option contracts — — Interest rate swap contracts — — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts — — Commodity price swap contracts — — Interest rate swap contracts — — |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | (Millions) Marketable securities — certain U.S. municipal securities and auction rate securities only 2015 2014 2013 Beginning balance $ $ $ Total gains or losses: Included in earnings — — Included in other comprehensive income — Purchases and issuances — — Sales and settlements — Transfers in and/or out of level 3 — — — Ending balance Change in unrealized gains or losses for the period included in earnings for securities held at the end of the reporting period — — — |
Fair Value of Financial Instruments by Balance Sheet Grouping | December 31, 2015 December 31, 2014 Carrying Fair Carrying Fair (Millions) Value Value Value Value Medium-term fixed rate note due September 2016 (long-term in 2014 and short-term in 2015) $ $ $ $ Long-term debt, excluding current portion and medium-term fixed rate note due September 2016 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Minimum lease payments under capital and operating leases with non-cancelable terms in excess of one year | Minimum lease payments under capital and operating leases with non-cancelable terms in excess of one year as of December 31, 2015 , were as follows: Operating (Millions) Capital Leases Leases 2016 $ $ 2017 2018 2019 2020 After 2020 Total $ $ Less: Amounts representing interest Present value of future minimum lease payments Less: Current obligations under capital leases Long-term obligations under capital leases $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation Expense | Stock-Based Compensation Expense Years ended December 31 (Millions) 2015 2014 2013 Cost of sales $ $ $ Selling, general and administrative expenses Research, development and related expenses Stock-based compensation expenses $ $ $ Income tax benefits $ $ $ Stock-based compensation expenses, net of tax $ $ $ |
Stock Option Activity | Stock Option Program The following table summarizes stock option activity for the years ended December 31: 2015 2014 2013 Weighted Weighted Weighted Number of Average Number of Average Number of Average Options Exercise Price Options Exercise Price Options Exercise Price Under option — January 1 $ $ $ Granted: Annual Progressive (Reload) — — — — Other — — — — Exercised Canceled December 31 $ $ $ Options exercisable December 31 $ $ $ |
Stock Option Assumptions | Stock Option Assumptions Annual Progressive (Reload) 2015 2014 2013 2015 2014 2013 Exercise price $ $ $ $ — $ — $ Risk-free interest rate % % % — % — % % Dividend yield % % % — % — % % Volatility % % % — % — % % Expected life (months) — — Black-Scholes fair value $ $ $ $ — $ — $ |
Restricted Stock Units and Restricted Stock Activity | Restricted Stock and Restricted Stock Units The following table summarizes restricted stock and restricted stock unit activity for the years ended December 31: 2015 2014 2013 Weighted Weighted Weighted Average Average Average Number of Grant Date Number of Grant Date Number of Grant Date Awards Fair Value Awards Fair Value Awards Fair Value Nonvested balance — As of January 1 $ $ $ Granted Annual Other Vested Forfeited As of December 31 $ $ $ |
Performance Shares Activity | The following table summarizes performance share activity for the years ended December 31: 2015 2014 2013 Weighted Weighted Weighted Average Average Average Number of Grant Date Number of Grant Date Number of Grant Date Awards Fair Value Awards Fair Value Awards Fair Value Undistributed balance — As of January 1 $ $ $ Granted Distributed Performance change Forfeited As of December 31 $ $ $ |
General Employees' Stock Purchase Plan (GESPP) | General Employees’ Stock Purchase Plan 2015 2014 2013 Weighted Weighted Weighted Average Average Average Shares Exercise Price Shares Exercise Price Shares Exercise Price Options granted $ $ $ Options exercised Shares available for grant - December 31 |
Business Segments (Tables)
Business Segments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Segments | |
Business Segment Information | Business Segment Products Business Segment Major Products Industrial Tapes, coated, nonwoven and bonded abrasives, adhesives, advanced ceramics, sealants, specialty materials, filtration products, closure systems for personal hygiene products, acoustic systems products, automotive components, abrasion-resistant films, structural adhesives and paint finishing and detailing products Safety and Graphics Personal protection products, traffic safety and security products, commercial graphics systems, commercial cleaning and protection products, floor matting, roofing granules for asphalt shingles, and fall protection products Health Care Medical and surgical supplies, skin health and infection prevention products, drug delivery systems, dental and orthodontic products, health information systems and food safety products Electronics and Energy Optical films solutions for electronic displays, packaging and interconnection devices, insulating and splicing solutions for the electronics, telecommunications and electrical industries, touch screens and touch monitors, renewable energy component solutions, and infrastructure protection products Consumer Sponges, scouring pads, high-performance cloths, consumer and office tapes, repositionable notes, indexing systems, construction and home improvement products, home care products, protective material products, and consumer and office tapes and adhesives Business Segment Information Net Sales Operating Income (Millions) 2015 2014 2013 2015 2014 2013 Industrial $ $ $ $ $ $ Safety and Graphics Health Care Electronics and Energy Consumer Corporate and Unallocated Elimination of Dual Credit Total Company $ $ $ $ $ $ Assets Depreciation & Amortization Capital Expenditures (Millions) 2015 2014 2013 2015 2014 2013 2015 2014 2013 Industrial $ $ $ $ $ $ $ $ $ Safety and Graphics Health Care Electronics and Energy Consumer Corporate and Unallocated Total Company $ $ $ $ $ $ $ $ $ |
Geographic Areas (Tables)
Geographic Areas (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Geographic Areas Disclosure | |
Geographic Areas | Property, Plant and Net Sales Operating Income Equipment - net (Millions) 2015 2014 2013 2015 2014 2013 2015 2014 United States $ $ $ $ $ $ $ $ Asia Pacific Europe, Middle East and Africa Latin America and Canada Other Unallocated — — Total Company $ $ $ $ $ $ $ $ |
Quarterly Data (Unaudited) (Tab
Quarterly Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Data (Unaudited) | |
Schedule of Quarterly Financial Information | (Millions, except per-share amounts) First Second Third Fourth Year 2015 Quarter Quarter Quarter Quarter 2015 Net sales $ $ $ $ $ Cost of sales Net income including noncontrolling interest Net income attributable to 3M Earnings per share attributable to 3M common shareholders - basic Earnings per share attributable to 3M common shareholders - diluted (Millions, except per-share amounts) First Second Third Fourth Year 2014 Quarter Quarter Quarter Quarter 2014 Net sales $ $ $ $ $ Cost of sales Net income including noncontrolling interest Net income attributable to 3M Earnings per share attributable to 3M common shareholders - basic Earnings per share attributable to 3M common shareholders - diluted |
Significant Accounting Polici47
Significant Accounting Policies (Details) $ / shares in Units, shares in Millions, VEF in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015USD ($)$ / shares | Sep. 30, 2015USD ($)$ / shares | Jun. 30, 2015USD ($)$ / shares | Mar. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | Sep. 30, 2014USD ($)$ / shares | Jun. 30, 2014USD ($)$ / shares | Mar. 31, 2014USD ($)$ / shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | Dec. 31, 2015VEF | |
Foreign Currency Translation | ||||||||||||
Threshold percentage used to determine if economic environment is highly inflationary | 100.00% | |||||||||||
Number of years used to determine if economic environment is highly inflationary | 3 years | |||||||||||
Operating income of Venezuelan subsidiary as percent of consolidated amount high end of range | 1.00% | |||||||||||
Maximum balance of company's net monetary liabilities in Venezuelan bolivars | VEF | VEF 500 | |||||||||||
Exchange rate established by Venezuelan government from bolivars to dollars - CENCOEX | 6 | |||||||||||
Exchange rate established by Venezuelan government from bolivars to dollars - SICAD | 13 | |||||||||||
Exchange rate established by Venezuelan government from bolivars to dollars - SIMADI | 200 | |||||||||||
Earnings per share | ||||||||||||
Options outstanding not included in computation of diluted earnings per share (in shares) | 5 | 1.4 | 2 | |||||||||
Numerator: | ||||||||||||
Net income attributable to 3M | $ | $ 1,038 | $ 1,296 | $ 1,300 | $ 1,199 | $ 1,179 | $ 1,303 | $ 1,267 | $ 1,207 | $ 4,833 | $ 4,956 | $ 4,659 | |
Denominator: | ||||||||||||
Denominator for weighted average 3M common shares outstanding - basic (in shares) | 625.6 | 649.2 | 681.9 | |||||||||
Dilution associated with the Company's stock-based compensation plans (in shares) | 11.6 | 12.8 | 11.7 | |||||||||
Denominator for weighted average 3M common shares outstanding - diluted (in shares) | 637.2 | 662 | 693.6 | |||||||||
Earnings per share attributable to 3M common shareholders - basic (in dollars per share) | $ / shares | $ 1.69 | $ 2.09 | $ 2.06 | $ 1.88 | $ 1.85 | $ 2.02 | $ 1.94 | $ 1.83 | $ 7.72 | $ 7.63 | $ 6.83 | |
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share) | $ / shares | $ 1.66 | $ 2.05 | $ 2.02 | $ 1.85 | $ 1.81 | $ 1.98 | $ 1.91 | $ 1.79 | $ 7.58 | $ 7.49 | $ 6.72 |
Significant Accounting Polici48
Significant Accounting Policies - PP&E (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum | Buildings and improvements | |
Property, plant and equipment - at cost | |
Property Plant And Equipment Useful Life | 10 years |
Property Plant And Equipment Useful Life Majority | 20 years |
Minimum | Machinery and equipment | |
Property, plant and equipment - at cost | |
Property Plant And Equipment Useful Life | 3 years |
Property Plant And Equipment Useful Life Majority | 5 years |
Minimum | Internal use software | |
Property, plant and equipment - at cost | |
Property Plant And Equipment Useful Life | 3 years |
Maximum | Buildings and improvements | |
Property, plant and equipment - at cost | |
Property Plant And Equipment Useful Life | 40 years |
Property Plant And Equipment Useful Life Majority | 40 years |
Maximum | Machinery and equipment | |
Property, plant and equipment - at cost | |
Property Plant And Equipment Useful Life | 15 years |
Property Plant And Equipment Useful Life Majority | 10 years |
Maximum | Internal use software | |
Property, plant and equipment - at cost | |
Property Plant And Equipment Useful Life | 7 years |
Significant Accounting Polici49
Significant Accounting Policies - Acquired intangibles (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite Lived Intangible Assets | |||
Asset retirement obligation liability | $ 102 | $ 96 | |
Advertising and merchandising expense | 368 | 407 | $ 423 |
Research, development and related expenses | 1,763 | 1,770 | 1,715 |
Research and development expense | 1,223 | 1,193 | $ 1,150 |
Deferred tax assets valuation allowance | $ 31 | $ 22 | |
Minimum | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 1 year | ||
Minimum | Customer related intangible assets | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 7 years | ||
Minimum | Patents | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 5 years | ||
Minimum | Other technology-based intangible assets | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 2 years | ||
Minimum | Definite-lived tradenames | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 3 years | ||
Minimum | Other amortizable intangible assets | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 2 years | ||
Maximum | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 20 years | ||
Maximum | Customer related intangible assets | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 17 years | ||
Maximum | Patents | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 13 years | ||
Maximum | Other technology-based intangible assets | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 15 years | ||
Maximum | Definite-lived tradenames | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 20 years | ||
Maximum | Other amortizable intangible assets | |||
Finite Lived Intangible Assets | |||
Intangible assets useful life | 10 years |
Significant Accounting Polici50
Significant Accounting Policies - Accounting Changes (Details) $ in Millions | Dec. 31, 2014USD ($) |
Marketable securities - current | Change in accounting principle marketable securities | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | $ 1,439 |
Marketable securities - noncurrent | Change in accounting principle marketable securities | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 15 |
Total marketable securities | Change in accounting principle marketable securities | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 1,454 |
Previously Reported | Marketable securities - current | Change in accounting principle marketable securities | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 626 |
Previously Reported | Marketable securities - noncurrent | Change in accounting principle marketable securities | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 828 |
Previously Reported | Total marketable securities | Change in accounting principle marketable securities | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 1,454 |
Impact | Marketable securities - current | Change in accounting principle marketable securities | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 813 |
Impact | Marketable securities - noncurrent | Change in accounting principle marketable securities | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | (813) |
ASU 2015-03 Simplifying the presentation of debt issuance costs | Impact | Debt issuance costs | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 26 |
ASU 2015-17 Balance sheet classification of deferred taxes | Prepaid expenses and other (within other current assets) | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 764 |
ASU 2015-17 Balance sheet classification of deferred taxes | Deferred tax assets (within other assets) | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 1,130 |
ASU 2015-17 Balance sheet classification of deferred taxes | Previously Reported | Prepaid expenses and other (within other current assets) | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 595 |
ASU 2015-17 Balance sheet classification of deferred taxes | Previously Reported | Other current tax assets (within other current assets) | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 444 |
ASU 2015-17 Balance sheet classification of deferred taxes | Previously Reported | Deferred tax assets (within other assets) | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 889 |
ASU 2015-17 Balance sheet classification of deferred taxes | Previously Reported | Deferred tax liabilities (within other current liabilities) | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 34 |
ASU 2015-17 Balance sheet classification of deferred taxes | Impact | Prepaid expenses and other (within other current assets) | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 169 |
ASU 2015-17 Balance sheet classification of deferred taxes | Impact | Other current tax assets (within other current assets) | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | (444) |
ASU 2015-17 Balance sheet classification of deferred taxes | Impact | Deferred tax assets (within other assets) | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | 241 |
ASU 2015-17 Balance sheet classification of deferred taxes | Impact | Deferred tax liabilities (within other current liabilities) | |
New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract] | |
New accounting pronouncement or change in accounting principle details | $ (34) |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Acquisitions (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)item | Dec. 31, 2013item | |
Business Acquisitions Information | |||
Purchase price paid for business combinations (net of cash acquired) | $ 2,914 | $ 94 | |
Accounts receivable | 103 | ||
Inventory | 102 | ||
Other current assets | 12 | ||
Property, plant and equipment | 171 | ||
Purchased finite-lived intangible assets | 34 | ||
Purchased indefinite-lived intangible assets | 520 | ||
Purchased goodwill | 2,495 | ||
Accounts payable and other liabilities, net of other assets | (232) | ||
Interest bearing debt | (766) | ||
Deferred tax asset/(liability) | (471) | ||
Net assets acquired | 2,914 | ||
Supplemental information: | |||
Cash paid | 2,949 | ||
Cash Acquired from Acquisition | 35 | ||
Cash paid, net of cash acquired | 2,914 | $ 94 | |
Number of business combinations completed | item | 1 | 0 | |
Customer related intangible assets | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 755 | ||
Patents | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 62 | ||
Other technology-based intangible assets | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 128 | ||
Definite-lived tradenames | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 33 | ||
Other amortizable intangible assets | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | $ 2 | ||
Maximum | |||
Business Acquisitions Information | |||
Intangible assets useful life | 20 years | 10 years | |
Minimum | |||
Business Acquisitions Information | |||
Intangible assets useful life | 2 years | 3 years | |
Weighted Average [Member] | |||
Business Acquisitions Information | |||
Intangible assets useful life | 14 years | 6 years | |
Weighted Average [Member] | Customer related intangible assets | |||
Business Acquisitions Information | |||
Intangible assets useful life | 16 years | ||
Weighted Average [Member] | Patents | |||
Business Acquisitions Information | |||
Intangible assets useful life | 7 years | ||
Weighted Average [Member] | Other technology-based intangible assets | |||
Business Acquisitions Information | |||
Intangible assets useful life | 7 years | ||
Weighted Average [Member] | Definite-lived tradenames | |||
Business Acquisitions Information | |||
Intangible assets useful life | 16 years | ||
Weighted Average [Member] | Other amortizable intangible assets | |||
Business Acquisitions Information | |||
Intangible assets useful life | 4 years | ||
Capital Safety | |||
Business Acquisitions Information | |||
Purchase price paid for business combinations (net of cash acquired) | $ 1,724 | ||
Accounts receivable | 66 | ||
Inventory | 63 | ||
Other current assets | 10 | ||
Property, plant and equipment | 36 | ||
Purchased indefinite-lived intangible assets | 520 | ||
Purchased goodwill | 1,764 | ||
Accounts payable and other liabilities, net of other assets | (105) | ||
Interest bearing debt | (766) | ||
Deferred tax asset/(liability) | (464) | ||
Net assets acquired | 1,724 | ||
Supplemental information: | |||
Cash paid | 1,758 | ||
Cash Acquired from Acquisition | 34 | ||
Cash paid, net of cash acquired | 1,724 | ||
Capital Safety | Customer related intangible assets | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 445 | ||
Capital Safety | Patents | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 44 | ||
Capital Safety | Other technology-based intangible assets | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 85 | ||
Capital Safety | Definite-lived tradenames | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 26 | ||
Polypore Separations Media | |||
Business Acquisitions Information | |||
Purchase price paid for business combinations (net of cash acquired) | 1,037 | ||
Accounts receivable | 30 | ||
Inventory | 35 | ||
Other current assets | 1 | ||
Property, plant and equipment | 128 | ||
Purchased goodwill | 636 | ||
Accounts payable and other liabilities, net of other assets | (122) | ||
Net assets acquired | 1,037 | ||
Supplemental information: | |||
Cash paid | 1,037 | ||
Cash paid, net of cash acquired | 1,037 | ||
Polypore Separations Media | Customer related intangible assets | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 270 | ||
Polypore Separations Media | Patents | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 11 | ||
Polypore Separations Media | Other technology-based intangible assets | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 42 | ||
Polypore Separations Media | Definite-lived tradenames | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 6 | ||
Other Acquisitions | |||
Business Acquisitions Information | |||
Purchase price paid for business combinations (net of cash acquired) | 153 | ||
Accounts receivable | 7 | ||
Inventory | 4 | ||
Other current assets | 1 | ||
Property, plant and equipment | 7 | ||
Purchased goodwill | 95 | ||
Accounts payable and other liabilities, net of other assets | (5) | ||
Deferred tax asset/(liability) | (7) | ||
Net assets acquired | 153 | ||
Supplemental information: | |||
Cash paid | 154 | ||
Cash Acquired from Acquisition | 1 | ||
Cash paid, net of cash acquired | 153 | ||
Other Acquisitions | Customer related intangible assets | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 40 | ||
Other Acquisitions | Patents | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 7 | ||
Other Acquisitions | Other technology-based intangible assets | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 1 | ||
Other Acquisitions | Definite-lived tradenames | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | 1 | ||
Other Acquisitions | Other amortizable intangible assets | |||
Business Acquisitions Information | |||
Purchased finite-lived intangible assets | $ 2 |
Acquisitions and Divestitures52
Acquisitions and Divestitures - Divestitures (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2016 | Jan. 31, 2015 | Dec. 31, 2015 | |
Pressurized Polyurethane Foam Adhesives Business Member | |||
Divestiture Information | |||
Annual sales of divested business | $ 20 | ||
Library Systems And Faab Fabricauto In Aggregate Member | |||
Divestiture Information | |||
Aggregate selling price relative to the divestiture transaction | $ 104 | ||
Aggregate net pre-tax gain on sale | 40 | ||
Aggregate net after tax gain on sale | $ 10 | ||
Static Control Business Member | |||
Divestiture Information | |||
Annual sales of divested business | $ 46 |
Acquisitions and Divestitures53
Acquisitions and Divestitures - NCI (Details) - Sumitomo 3M Limited ¥ in Billions | 1 Months Ended |
Sep. 30, 2014JPY (¥) | |
Transactions with 3M subsidiaries that have non controlling interests | |
Percent of interest acquired of Sumitomo 3M Limited | 25.00% |
Amount of acquisition for remaining non-controlling interest | ¥ 90 |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets (Goodwill balance by business segment) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill Information | ||
Goodwill acquired during the period which is deductible for tax purposes | $ 636,000,000 | $ 0 |
Goodwill | ||
Balance at the beginning of the period | 7,050,000,000 | 7,345,000,000 |
Acquisition activity | 2,495,000,000 | 65,000,000 |
Translation and other | (296,000,000) | (360,000,000) |
Balance at the end of the period | 9,249,000,000 | 7,050,000,000 |
Amount of Goodwill impairment | 0 | 0 |
Industrial | ||
Goodwill | ||
Balance at the beginning of the period | 2,037,000,000 | 2,166,000,000 |
Acquisition activity | 637,000,000 | |
Translation and other | (106,000,000) | (129,000,000) |
Balance at the end of the period | 2,568,000,000 | 2,037,000,000 |
Safety and Graphics | ||
Goodwill | ||
Balance at the beginning of the period | 1,650,000,000 | 1,740,000,000 |
Acquisition activity | 1,764,000,000 | |
Translation and other | (72,000,000) | (90,000,000) |
Balance at the end of the period | 3,342,000,000 | 1,650,000,000 |
Health Care | ||
Goodwill | ||
Balance at the beginning of the period | 1,589,000,000 | 1,596,000,000 |
Acquisition activity | 94,000,000 | 65,000,000 |
Translation and other | (59,000,000) | (72,000,000) |
Balance at the end of the period | 1,624,000,000 | 1,589,000,000 |
Electronics and Energy | ||
Goodwill | ||
Balance at the beginning of the period | 1,559,000,000 | 1,612,000,000 |
Translation and other | (44,000,000) | (53,000,000) |
Balance at the end of the period | 1,515,000,000 | 1,559,000,000 |
Consumer | ||
Goodwill | ||
Balance at the beginning of the period | 215,000,000 | 231,000,000 |
Translation and other | (15,000,000) | (16,000,000) |
Balance at the end of the period | $ 200,000,000 | $ 215,000,000 |
Goodwill and Intangible Asset55
Goodwill and Intangible Assets (Acquired Intangible Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Acquired intangible assets disclosures | ||
Total gross carrying amount | $ 3,751 | $ 2,958 |
Total accumulated amortization | (1,785) | (1,646) |
Total finite-lived intangible assets - net | 1,966 | 1,312 |
Non-amortizable intangible assets (primarily tradenames) | 635 | 123 |
Total intangible assets - net | 2,601 | 1,435 |
Customer related intangible assets | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 1,973 | 1,348 |
Total accumulated amortization | (668) | (597) |
Patents | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 616 | 581 |
Total accumulated amortization | (481) | (472) |
Other technology-based intangible assets | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 525 | 407 |
Total accumulated amortization | (252) | (215) |
Definite-lived tradenames | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 421 | 401 |
Total accumulated amortization | (215) | (195) |
Other amortizable intangible assets | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 216 | 221 |
Total accumulated amortization | $ (169) | $ (167) |
Goodwill and Intangible Asset56
Goodwill and Intangible Assets (Schedules for Amortization Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite Lived Intangible Asset | |||
Amortization expense for acquired intangible assets | $ 229 | $ 228 | $ 236 |
Expected amortization expense for acquired intangible assets recorded as of balance sheet date | |||
2,016 | 252 | ||
2,017 | 226 | ||
2,018 | 205 | ||
2,019 | 192 | ||
2,020 | 183 | ||
After 2,020 | $ 908 |
Restructuring Actions (Details)
Restructuring Actions (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2015item | Dec. 31, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Number of Positions Eliminated | item | 1,700 | |
Restructuring charges | $ 114 | |
Employee-Related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 98 | |
Asset-Related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 16 | |
Corporate and Unallocated | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 37 | |
Corporate and Unallocated | Employee-Related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 37 | |
Cost of sales | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 40 | |
Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 62 | |
Research, development and related expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 12 | |
Industrial | Business Segments. | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 42 | |
Industrial | Business Segments. | Employee-Related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 30 | |
Industrial | Business Segments. | Asset-Related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 12 | |
Safety and Graphics | Business Segments. | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 11 | |
Safety and Graphics | Business Segments. | Employee-Related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 11 | |
Health Care | Business Segments. | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 9 | |
Health Care | Business Segments. | Employee-Related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 9 | |
Electronics and Energy | Business Segments. | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 12 | |
Electronics and Energy | Business Segments. | Employee-Related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 8 | |
Electronics and Energy | Business Segments. | Asset-Related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 4 | |
Consumer | Business Segments. | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 3 | |
Consumer | Business Segments. | Employee-Related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 3 |
Restructuring Actions - Roll Fo
Restructuring Actions - Roll Forward (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Restructuring Reserve [Roll Forward] | |
Expenses incurred | $ 114 |
Non-cash changes | (24) |
Cash payments | (27) |
Restructuring action balances, Ending Balance | 63 |
Employee-Related | |
Restructuring Reserve [Roll Forward] | |
Expenses incurred | 98 |
Non-cash changes | (8) |
Cash payments | (27) |
Restructuring action balances, Ending Balance | 63 |
Asset-Related | |
Restructuring Reserve [Roll Forward] | |
Expenses incurred | 16 |
Non-cash changes | $ (16) |
Supplemental Balance Sheet In59
Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Other current assets | |||
Prepaid expenses and other | $ 1,081 | $ 764 | |
Derivative assets-current | 211 | 182 | |
Insurance related receivables prepaid expenses and other | 106 | 77 | |
Total other current assets | 1,398 | 1,023 | |
Investments | |||
Equity method | 56 | 58 | |
Cost method | 59 | 41 | |
Other investments | 2 | 3 | |
Total investments | 117 | 102 | |
Other assets | |||
Deferred income taxes | 510 | 1,130 | |
Insurance related receivables and other | 49 | 89 | |
Cash surrender value of life insurance policies | 241 | 245 | |
Other | 253 | 305 | |
Total other assets | 1,053 | 1,769 | |
Other current liabilities | |||
Accrued trade payables | 566 | 533 | |
Deferred income | 518 | 541 | |
Derivative liabilities | 65 | 39 | |
Dividends payable | 648 | $ 567 | |
Employee benefits and withholdings | 148 | 172 | |
Contingent liability claims and other | 147 | 157 | |
Property and other taxes | 89 | 90 | |
Pension and postretirement benefits | 60 | 60 | |
Other | 811 | 644 | |
Total other current liabilities | 2,404 | 2,884 | |
Other liabilities | |||
Long term income taxes payable | 154 | 519 | |
Employee benefits | 254 | 262 | |
Contingent liability claims and other | 295 | 300 | |
Capital lease obligations | 46 | 59 | |
Deferred income | 19 | 21 | |
Deferred income taxes | 551 | 141 | |
Other | 261 | 253 | |
Total other liabilities | 1,580 | 1,555 | |
Drafts payable | |||
Drafts payable on demand included in Accounts payable | $ 79 | $ 1 |
Supplemental Balance Sheet In60
Supplemental Balance Sheet Information (Details 2) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Property, plant and equipment - at cost | ||
Gross property, plant and equipment | $ 23,098 | $ 22,841 |
Less: Accumulated depreciation | (14,583) | (14,352) |
Property, Plant and Equipment - net | 8,515 | 8,489 |
Accumulated depreciation for capital leases included in Accumulated depreciation | 98 | 87 |
Land | ||
Property, plant and equipment - at cost | ||
Gross property, plant and equipment | 354 | 368 |
Buildings and leasehold improvements | ||
Property, plant and equipment - at cost | ||
Gross property, plant and equipment | 7,120 | 6,943 |
Machinery and equipment | ||
Property, plant and equipment - at cost | ||
Gross property, plant and equipment | 14,743 | 14,684 |
Construction in progress | ||
Property, plant and equipment - at cost | ||
Gross property, plant and equipment | 723 | 679 |
Capital leases | ||
Property, plant and equipment - at cost | ||
Gross property, plant and equipment | $ 158 | $ 167 |
Supplemental Equity and Compr61
Supplemental Equity and Comprehensive Income Information (Details) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Equity and Comprehensive Income Information | ||||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 3,000,000,000 | 3,000,000,000 | 3,000,000,000 | |
Common stock, shares issued (in shares) | 944,033,056 | 944,033,056 | 944,033,056 | |
Treasury stock (in shares) | 334,702,932 | 308,898,462 | 280,736,817 | 256,941,406 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Supplemental Equity and Compr62
Supplemental Equity and Comprehensive Income Information - Dividends (Details) - $ / shares | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplemental Equity and Comprehensive Income Information | |||||||||||
Dividends that have been declared but paid in subsequent period (in dollars per share) | $ 1.025 | $ 0.855 | |||||||||
Dividends declared in current period (in dollars per share) | $ 1.025 | $ 1.025 | $ 1.025 | $ 0.855 | $ 0.855 | $ 0.855 | $ 3.075 | $ 3.59 | $ 3.395 | ||
Cash dividends paid per 3M common share (in dollars per share) | $ 4.10 | $ 3.42 | $ 2.54 |
Supplemental Equity and Compr63
Supplemental Equity and Comprehensive Income Information - AOCI rf (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' Equity Attributable to Parent, Beginning Balance | $ 13,109 | ||
Other comprehensive income (loss), before tax: | |||
Stockholders' Equity Attributable to Parent, Ending Balance | 11,708 | $ 13,109 | |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' Equity Attributable to Parent, Beginning Balance | (6,289) | (3,913) | $ (4,750) |
Other comprehensive income (loss), before tax: | |||
Amounts before reclassifications | 132 | (3,321) | 801 |
Amounts reclassified out | 363 | 357 | 691 |
Total other comprehensive income (loss), before tax | 495 | (2,964) | 1,492 |
Tax effect | (565) | 563 | (655) |
Total other comprehensive income (loss), net of tax | (70) | (2,401) | 837 |
Impact From Purchase Of Subsidiary Shares | 25 | ||
Stockholders' Equity Attributable to Parent, Ending Balance | (6,359) | (6,289) | (3,913) |
Cumulative Translation Adjustment | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' Equity Attributable to Parent, Beginning Balance | (1,095) | (188) | 230 |
Other comprehensive income (loss), before tax: | |||
Amounts before reclassifications | (447) | (856) | (462) |
Total other comprehensive income (loss), before tax | (447) | (856) | (462) |
Tax effect | (137) | (92) | 44 |
Total other comprehensive income (loss), net of tax | (584) | (948) | (418) |
Impact From Purchase Of Subsidiary Shares | 41 | ||
Stockholders' Equity Attributable to Parent, Ending Balance | (1,679) | (1,095) | (188) |
Gains (losses) associated with defined benefit pension and postretirement plans amortization | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' Equity Attributable to Parent, Beginning Balance | (5,293) | (3,715) | (4,955) |
Other comprehensive income (loss), before tax: | |||
Amounts before reclassifications | 367 | (2,638) | 1,361 |
Amounts reclassified out | 537 | 360 | 569 |
Total other comprehensive income (loss), before tax | 904 | (2,278) | 1,930 |
Tax effect | (415) | 716 | (690) |
Total other comprehensive income (loss), net of tax | 489 | (1,562) | 1,240 |
Impact From Purchase Of Subsidiary Shares | (16) | ||
Stockholders' Equity Attributable to Parent, Ending Balance | (4,804) | (5,293) | (3,715) |
Debt and equity security gains (losses) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' Equity Attributable to Parent, Beginning Balance | (2) | (2) | |
Other comprehensive income (loss), before tax: | |||
Amounts before reclassifications | 2 | ||
Amounts reclassified out | 1 | ||
Total other comprehensive income (loss), before tax | 3 | ||
Tax effect | (1) | ||
Total other comprehensive income (loss), net of tax | 2 | ||
Stockholders' Equity Attributable to Parent, Ending Balance | (2) | ||
Cash flow hedging instruments gains (losses) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Stockholders' Equity Attributable to Parent, Beginning Balance | 99 | (8) | (23) |
Other comprehensive income (loss), before tax: | |||
Amounts before reclassifications | 212 | 171 | (98) |
Amounts reclassified out | (174) | (4) | 122 |
Total other comprehensive income (loss), before tax | 38 | 167 | 24 |
Tax effect | (13) | (60) | (9) |
Total other comprehensive income (loss), net of tax | 25 | 107 | 15 |
Stockholders' Equity Attributable to Parent, Ending Balance | $ 124 | $ 99 | $ (8) |
Supplemental Equity and Compr64
Supplemental Equity and Comprehensive Income Information - Reclass AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Selling, general and administrative expenses | $ (6,182) | $ (6,469) | $ (6,384) |
Tax effect | (1,982) | (2,028) | (1,841) |
Net of tax | 4,763 | 2,555 | 5,496 |
Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Net of tax | (250) | (236) | (449) |
Gains (losses) associated with defined benefit pension and postretirement plans amortization | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 904 | (2,278) | 1,930 |
Gains (losses) associated with defined benefit pension and postretirement plans amortization | Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Transition asset | 1 | 1 | 1 |
Prior service benefit | 79 | 59 | 77 |
Net actuarial loss | (626) | (420) | (647) |
Curtailments/Settlements | 9 | ||
Total before tax | (537) | (360) | (569) |
Tax effect | 176 | 122 | 197 |
Net of tax | (361) | (238) | (372) |
Debt and equity security gains (losses) | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 3 | ||
Debt and equity security gains (losses) | Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Selling, general and administrative expenses | (1) | ||
Total before tax | (1) | ||
Net of tax | (1) | ||
Cash flow hedging instruments gains (losses) | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 38 | 167 | 24 |
Cash flow hedging instruments gains (losses) | Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 174 | 4 | (122) |
Tax effect | (63) | (1) | 45 |
Net of tax | 111 | 3 | (77) |
Cash flow hedging instruments gains (losses) | Foreign currency forward/option contracts | Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of sales | 178 | 3 | (11) |
Cash flow hedging instruments gains (losses) | Foreign currency forward contracts | Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense | (108) | ||
Cash flow hedging instruments gains (losses) | Commodity price swap contracts | Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of sales | (2) | 2 | (2) |
Cash flow hedging instruments gains (losses) | Interest rate swap contracts | Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M | |||
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense | $ (2) | $ (1) | $ (1) |
Supplemental Equity and Compr65
Supplemental Equity and Comprehensive Income Information - NCI (Details) $ in Millions, ¥ in Billions | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2014JPY (¥) | Mar. 31, 2013USD ($) | Dec. 31, 2013USD ($) | |
Transactions with 3M subsidiaries that have non controlling interests | |||
Sale of subsidiary shares | $ 8 | ||
Common Stock and Additional Paid-in Capital | |||
Transactions with 3M subsidiaries that have non controlling interests | |||
Sale of subsidiary shares | 7 | ||
Noncontrolling Interest | |||
Transactions with 3M subsidiaries that have non controlling interests | |||
Sale of subsidiary shares | $ 1 | ||
3M India Limited | |||
Transactions with 3M subsidiaries that have non controlling interests | |||
3M's effective ownership after transaction | 75.00% | ||
Minority Interest Ownership Percentage By Parent Before Transaction | 76.00% | ||
Minimum percentage of public shareholding required by an amendment to Indian Securities regulations to comply with the sale of shares for 3M India Limited | 25.00% | ||
Sale of subsidiary shares | $ 8 | ||
Sumitomo 3M Limited | |||
Transactions with 3M subsidiaries that have non controlling interests | |||
3M's effective ownership after transaction (as a percent) | 100.00% | ||
Percent of interest acquired of Sumitomo 3M Limited | 25.00% | ||
Amount of acquisition for remaining non-controlling interest | ¥ | ¥ 90 |
Supplemental Equity and Compr66
Supplemental Equity and Comprehensive Income Information - Impact of NCI (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplemental Equity and Comprehensive Income Information | |||||||||||
Net income attributable to 3M | $ 1,038 | $ 1,296 | $ 1,300 | $ 1,199 | $ 1,179 | $ 1,303 | $ 1,267 | $ 1,207 | $ 4,833 | $ 4,956 | $ 4,659 |
Impact of purchase of subsidiary shares | (409) | ||||||||||
Change in 3M Company shareholder's equity from net income attributable to 3M and impact of purchase of subsidiary shares | $ 4,547 |
Supplemental Cash Flow Inform67
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplemental Cash Flow Elements | |||
Cash income tax payments, net of refunds | $ 2,331 | $ 1,968 | $ 1,803 |
Cash interest payments | 134 | 178 | 169 |
Capitalized interest | $ 13 | $ 15 | $ 21 |
Supplemental Cash Flow Inform68
Supplemental Cash Flow Information (Details 2) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | |
Transactions related to investing activities with significant non-cash components | ||||
Dividends that have been declared but paid in subsequent period (in dollars per share) | $ 1.025 | $ 0.855 | ||
Increase of Current Liabilities due to dividend declared but not paid | $ 648 | $ 567 | ||
Sumitomo 3M Limited administrative headquarters sale | ||||
Transactions related to investing activities with significant non-cash components | ||||
Note receivable due | $ 78 | |||
Deferred profit from sale of Sumitomo 3M Limited | $ 49 | |||
Non-strategic equity interest sale within Health Care | ||||
Transactions related to investing activities with significant non-cash components | ||||
Note receivable due | $ 24 | |||
Gain on sale of non-strategic equity investment within Health Care Business Group | $ 18 | |||
City of Nevada, MO | ||||
Transactions related to investing activities with significant non-cash components | ||||
City of Nevada, MO Municipal Bond Value | $ 15 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Before Income Taxes | |||
United States | $ 4,399 | $ 3,815 | $ 3,194 |
International | 2,424 | 3,211 | 3,368 |
Income before income taxes | $ 6,823 | $ 7,026 | $ 6,562 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Currently payable | |||
Federal | $ 1,338 | $ 1,103 | $ 948 |
State | 101 | 108 | 91 |
International | 566 | 1,008 | 901 |
Deferred | |||
Federal | (55) | (171) | (123) |
State | 6 | (9) | (2) |
International | 26 | (11) | 26 |
Total provision for income taxes | $ 1,982 | $ 2,028 | $ 1,841 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Accruals not currently deductible | ||
Employee benefit costs | $ 175 | $ 148 |
Product and other claims | 146 | 152 |
Miscellaneous accruals | 114 | 137 |
Pension costs | 1,120 | 1,312 |
Stock-based compensation | 305 | 290 |
Net operating/capital loss carryforwards | 109 | 175 |
Foreign tax credits | 25 | 360 |
Inventory | 46 | 52 |
Other | 30 | |
Gross deferred tax assets | 2,040 | 2,656 |
Valuation allowance | (31) | (22) |
Total deferred tax assets | 2,009 | 2,634 |
Deferred tax liabilities: | ||
Product and other insurance receivables | (28) | (31) |
Accelerated depreciation | (736) | (804) |
Intangible amortization | (1,017) | (719) |
Currency translation | (199) | (91) |
Other | (70) | |
Total deferred tax liabilities | (2,050) | (1,645) |
Net deferred tax assets | $ 989 | |
Net deferred tax liabilities | $ (41) |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income tax | |||
Net UTB impacting the effective tax rate | $ 369 | $ 265 | $ 262 |
Interest and penalties related to unrecognized tax benefits, expense (benefit) recognized on a gross basis | 2 | (14) | $ 22 |
Interest and penalties related to unrecognized tax benefits, accrued on a gross basis | $ 45 | $ 44 | |
Increase (decrease) in effective income tax rate from prior reporting period to current reporting period (as a percent) | 0.20% | 0.80% | |
Impact of factors that decreased the effective tax rate from prior reporting period to current reporting period (as a percent) | (2.20%) | (0.80%) | |
Impact of factors that increased the effective tax rate from prior reporting period to current reporting period (as a percent) | 2.40% | 1.60% | |
Amount of years inclusion of US R&D credit due to reinstatement in 2013 | 2 years | ||
Deferred Tax Assets, Valuation Allowance | $ 31 | $ 22 | |
Reconciliation of Effective Income Tax Rate | |||
Statutory U.S. tax rate | 35.00% | 35.00% | 35.00% |
State income taxes--net of federal benefit | 1.10% | 0.90% | 0.90% |
International income taxes - net | (3.80%) | (5.80%) | (6.30%) |
U.S. research and development credit | (0.50%) | (0.40%) | (0.70%) |
Reserves for tax contingencies | (1.00%) | 0.60% | 1.20% |
Domestic manufacturer's deduction | (1.80%) | (1.30%) | (1.60%) |
All other--net | 0.10% | (0.10%) | (0.40%) |
Effective tax rate (as a percent) | 29.10% | 28.90% | 28.10% |
Federal, State and Foreign Tax | |||
Gross UTB Balance at January 1 | $ 583 | $ 659 | $ 528 |
Additions based on tax positions related to the current year | 77 | 201 | 97 |
Additions for tax positions of prior years | 140 | 30 | 158 |
Reductions for tax positions of prior years | (399) | (74) | (29) |
Settlements (UTB decreases) | (4) | (154) | (17) |
Reductions due to lapse of applicable statute of limitations | (16) | (79) | (78) |
Gross UTB Balance at December 31 | 381 | $ 583 | $ 659 |
Federal | |||
Tax effected operating loss, capital loss, and tax credit carryovers | |||
Tax effected operating loss, capital loss, and tax credit carryovers | $ 31 | ||
Federal | Maximum | |||
Tax effected operating loss, capital loss, and tax credit carryovers | |||
Tax effected operating loss, capital loss, and tax credit carryovers, expiration date | 20 years | ||
Federal | Minimum | |||
Tax effected operating loss, capital loss, and tax credit carryovers | |||
Tax effected operating loss, capital loss, and tax credit carryovers, expiration date | 15 years | ||
State | |||
Tax effected operating loss, capital loss, and tax credit carryovers | |||
Tax effected operating loss, capital loss, and tax credit carryovers | $ 2 | ||
State | Maximum | |||
Tax effected operating loss, capital loss, and tax credit carryovers | |||
Tax effected operating loss, capital loss, and tax credit carryovers, expiration date | 10 years | ||
State | Minimum | |||
Tax effected operating loss, capital loss, and tax credit carryovers | |||
Tax effected operating loss, capital loss, and tax credit carryovers, expiration date | 5 years | ||
International | |||
Tax effected operating loss, capital loss, and tax credit carryovers | |||
Tax effected operating loss, capital loss, and tax credit carryovers | $ 76 | ||
Tax effected operating loss, capital loss, and tax credit carryovers, expiration dates majority of high end of range | 4 years | ||
International | Minimum | |||
Tax effected operating loss, capital loss, and tax credit carryovers | |||
Tax effected operating loss, capital loss, and tax credit carryovers, expiration date | 1 year |
Income Taxes (Details 6)
Income Taxes (Details 6) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes | |||
Income tax benefits attributable to reduced tax rates or exemptions in foreign locations | $ 114 | $ 99 | $ 87 |
EPS impact of reduced tax rates or exemptions in foreign locations (in dollars per diluted share) | $ 0.18 | $ 0.15 | $ 0.13 |
Undistributed earnings of non-U.S. subsidiaries | $ 12,000 |
Marketable Securities (current
Marketable Securities (current and non-current) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Marketable securities classification | ||
Current marketable securities | $ 118 | $ 1,439 |
Non-current marketable securities | 9 | 15 |
Total marketable securities | 127 | 1,454 |
U.S. government agency securities | ||
Marketable securities classification | ||
Current marketable securities | 108 | |
Foreign government agency securities | ||
Marketable securities classification | ||
Current marketable securities | 10 | 95 |
Corporate debt securities | ||
Marketable securities classification | ||
Current marketable securities | 10 | 619 |
Commercial paper | ||
Marketable securities classification | ||
Current marketable securities | 12 | |
Certificates of deposit/time deposits | ||
Marketable securities classification | ||
Current marketable securities | 26 | 41 |
U.S. treasury securities | ||
Marketable securities classification | ||
Current marketable securities | 38 | |
U.S. municipal securities | ||
Marketable securities classification | ||
Current marketable securities | 3 | |
Non-current marketable securities | 9 | 15 |
Asset-backed securities | ||
Marketable securities classification | ||
Current marketable securities | 57 | 538 |
Asset-backed securities Automobile loan related | ||
Marketable securities classification | ||
Current marketable securities | 26 | 282 |
Asset-backed securities Credit card related | ||
Marketable securities classification | ||
Current marketable securities | 10 | 162 |
Asset-backed securities Equipment lease related | ||
Marketable securities classification | ||
Current marketable securities | 2 | 48 |
Asset-backed securities Other asset-backed securities | ||
Marketable securities classification | ||
Current marketable securities | $ 19 | $ 46 |
Marketable Securities - Narrati
Marketable Securities - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($)item | |
Marketable Securities | |
Percentage of asset-backed securities rated AAA/A-1+, Aaa/P-1, or AAA/F1+ | 75.80% |
Estimated fair value of current plus long term asset backed securities | $ | $ 57 |
Number of rating agencies for which asset backed securities must be rated | 2 |
Number of rating agencies for asset backed securities that must be either Moody's or Standard and Poor's | 1 |
Marketable Securities (Contract
Marketable Securities (Contractual maturity) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Marketable securities by contractual maturity | ||
Due in one year or less | $ 52 | |
Due after one year through five years | 74 | |
Due after five years through ten years | 1 | |
Total marketable securities | $ 127 | $ 1,454 |
Long-Term Debt and Short-Term77
Long-Term Debt and Short-Term Borrowings (Details) € in Millions, £ in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |||||||
Aug. 31, 2015USD ($)DerivativeInstrument | Aug. 31, 2014USD ($) | Jul. 31, 2014EUR (€) | Aug. 31, 2013USD ($) | Dec. 31, 2012GBP (£) | Dec. 31, 2004USD ($) | Dec. 31, 2015USD ($) | Nov. 30, 2013EUR (€) | Dec. 31, 2012USD ($) | |
Long-Term Debt | |||||||||
Number Of Interest Rate Swap Contracts Entered In Period | DerivativeInstrument | 2 | ||||||||
Bank guarantees | |||||||||
Line of Credit Facility | |||||||||
Bank guarantees issued and outstanding | $ 18 | ||||||||
Eurobond 600 Million Euros Issued November 2013 | |||||||||
Long-Term Debt | |||||||||
Principal amount | € | € 600 | ||||||||
Derivative notional amount | € | € 300 | ||||||||
Five-year credit facility agreement | |||||||||
Line of Credit Facility | |||||||||
Term of credit facility | 5 years | ||||||||
Credit facility amount prior to new agreement | $ 1,500 | ||||||||
Current borrowing capacity | 2,250 | ||||||||
Maximum increase available subject to lender approval | 2,250 | ||||||||
Maximum borrowing capacity including portion subject to lender approval | $ 4,500 | ||||||||
Required minimum EBITDA to Interest Ratio | 3 | ||||||||
Actual EBITDA to Interest Ratio | 56 | ||||||||
Number of consecutive quarters over which the ratio of required EBITDA to Interest Ratio is calculated | 4 | ||||||||
Fixed rate Eurobond which matured in July 2014 | |||||||||
Long-Term Debt | |||||||||
Repayment of debt | € | € 1,025 | ||||||||
Term of debt instrument | 7 years | ||||||||
Interest rate, stated percentage (as a percent) | 5.00% | ||||||||
Fixed rate Medium-term note which matured in 2013 | |||||||||
Long-Term Debt | |||||||||
Repayment of debt | $ 850 | ||||||||
Fixed rate medium term note due 2020 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 200 | ||||||||
Floating rate note due 2044 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 60 | $ 55 | |||||||
Term of debt instrument | 40 years | ||||||||
Repurchase price of floating rate notes (as a percent) | 100.00% | ||||||||
Floating rate notes due 2027 and 2040 and 2041 | |||||||||
Long-Term Debt | |||||||||
Number of years after date of issuance that put options commence | 10 years | ||||||||
Number of years after put options commence when additional put options occur on each anniversary thereafter until final maturity | 3 years | ||||||||
Floating Rate UK Borrowing repaid December 2014 | |||||||||
Line of Credit Facility | |||||||||
Term of credit facility | 3 years | ||||||||
Current borrowing capacity | £ 66 | $ 106 | |||||||
Stand alone letters of credit | |||||||||
Line of Credit Facility | |||||||||
Amount of letters of credit outstanding utilized in connection with normal business activities | $ 241 | ||||||||
Interest rate swap contracts | Fixed rate medium term note due 2018 | |||||||||
Long-Term Debt | |||||||||
Term of debt instrument | 3 years | ||||||||
Derivative notional amount | $ 450 | ||||||||
Interest rate swap contracts | Fixed rate medium term note due 2020 | |||||||||
Long-Term Debt | |||||||||
Term of debt instrument | 5 years | ||||||||
Derivative notional amount | $ 300 | ||||||||
Maximum | Floating rate notes due 2027 and 2040 and 2041 | |||||||||
Long-Term Debt | |||||||||
Repurchase price of floating rate notes (as a percent) | 100.00% | ||||||||
Minimum | Floating rate notes due 2027 and 2040 and 2041 | |||||||||
Long-Term Debt | |||||||||
Repurchase price of floating rate notes (as a percent) | 99.00% |
Long-Term Debt and Short-Term78
Long-Term Debt and Short-Term Borrowings (Details) € in Millions, $ in Millions | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) | Aug. 31, 2015USD ($) | May. 31, 2015EUR (€) | Dec. 31, 2014USD ($) | Nov. 30, 2014EUR (€) | Jun. 30, 2014USD ($) | Nov. 30, 2013EUR (€) | Dec. 31, 2004USD ($) |
Long-Term Debt | |||||||||
Total long-term debt | $ 9,878 | $ 6,760 | |||||||
Long-term debt - excluding current portion - carrying value | 8,753 | 6,705 | |||||||
Short-Term Borrowings and Current Portion of Long-Term Debt | |||||||||
Short-term borrowings and current portion of long-term debt | 2,044 | 106 | |||||||
Maturities of long-term debt | |||||||||
2,016 | 1,125 | ||||||||
2,017 | 744 | ||||||||
2,018 | 993 | ||||||||
2,019 | 622 | ||||||||
2,020 | 1,203 | ||||||||
After 2,020 | 5,191 | ||||||||
Total long-term debt | 9,878 | 6,760 | |||||||
Floating rate note payments due in 2016 | 126 | ||||||||
Floating rate note payments due in 2017 | $ 96 | ||||||||
Current portion of long-term debt | |||||||||
Long-Term Debt | |||||||||
Interest rate - effective | 1.45% | 1.45% | |||||||
Total long-term debt | $ 1,125 | 55 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | $ 1,125 | 55 | |||||||
Other borrowings | |||||||||
Long-Term Debt | |||||||||
Interest rate - effective | 1.01% | 1.01% | |||||||
Short-Term Borrowings and Current Portion of Long-Term Debt | |||||||||
Short-term borrowings and current portion of long-term debt | $ 919 | $ 51 | |||||||
Fixed-rate debt | |||||||||
Long-Term Debt | |||||||||
Interest rate - effective | 2.54% | 2.54% | 2.74% | ||||||
Total long-term debt | $ 6,712 | $ 4,911 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | $ 6,712 | $ 4,911 | |||||||
Floating-rate debt | |||||||||
Long-Term Debt | |||||||||
Interest rate - effective | 0.32% | 0.32% | 0.53% | ||||||
Total long-term debt | $ 3,166 | $ 1,849 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 3,166 | 1,849 | |||||||
Fixed rate medium term note due 2016 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 1,000 | ||||||||
Interest rate - effective | 1.62% | 1.62% | |||||||
Total long-term debt | $ 999 | 996 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 999 | 996 | |||||||
Fixed rate medium term note due 2017 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 650 | ||||||||
Interest rate - effective | 1.10% | 1.10% | |||||||
Total long-term debt | $ 648 | 647 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | $ 648 | 647 | |||||||
Floating rate Euro medium term note due 2018 | |||||||||
Long-Term Debt | |||||||||
Principal amount | € | € 500 | ||||||||
Interest rate - effective | 0.16% | 0.16% | |||||||
Total long-term debt | $ 545 | 606 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 545 | 606 | |||||||
Floating rate medium term note due 2018 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 450 | ||||||||
Interest rate - effective | 0.44% | 0.44% | |||||||
Total long-term debt | $ 448 | ||||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 448 | ||||||||
Floating rate medium term note due 2019 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 600 | ||||||||
Interest rate - effective | 0.55% | 0.55% | |||||||
Total long-term debt | $ 597 | 592 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 597 | 592 | |||||||
Fixed rate medium term note due 2019 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 25 | $ 625 | |||||||
Interest rate - effective | 1.74% | 1.74% | |||||||
Total long-term debt | $ 25 | 25 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | $ 25 | 25 | |||||||
Floating rate Euro medium term note due 2020 | |||||||||
Long-Term Debt | |||||||||
Principal amount | € | € 650 | ||||||||
Interest rate - effective | 0.15% | 0.15% | |||||||
Total long-term debt | $ 708 | ||||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 708 | ||||||||
Floating rate medium term note due 2020 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 300 | ||||||||
Interest rate - effective | 0.61% | 0.61% | |||||||
Total long-term debt | $ 297 | ||||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 297 | ||||||||
Fixed rate medium term note due 2020 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 200 | ||||||||
Interest rate - effective | 2.12% | 2.12% | |||||||
Total long-term debt | $ 198 | ||||||||
Maturities of long-term debt | |||||||||
Total long-term debt | $ 198 | ||||||||
Floating rate Eurobond Due 2021 | |||||||||
Long-Term Debt | |||||||||
Principal amount | € | € 300 | ||||||||
Interest rate - effective | 0.21% | 0.21% | |||||||
Total long-term debt | $ 348 | 389 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | $ 348 | 389 | |||||||
Fixed rate Eurobond Due 2021 | |||||||||
Long-Term Debt | |||||||||
Principal amount | € | € 300 | ||||||||
Interest rate - effective | 1.97% | 1.97% | |||||||
Total long-term debt | $ 326 | 361 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 326 | 361 | |||||||
Fixed rate medium term note due 2022 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 600 | ||||||||
Interest rate - effective | 2.17% | 2.17% | |||||||
Total long-term debt | $ 592 | 591 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | $ 592 | 591 | |||||||
Fixed rate Euro medium term note due 2023 | |||||||||
Long-Term Debt | |||||||||
Principal amount | € | € 600 | ||||||||
Interest rate - effective | 1.14% | 1.14% | |||||||
Total long-term debt | $ 644 | ||||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 644 | ||||||||
Fixed rate medium term note due 2025 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 550 | ||||||||
Interest rate - effective | 3.04% | 3.04% | |||||||
Total long-term debt | $ 545 | ||||||||
Maturities of long-term debt | |||||||||
Total long-term debt | $ 545 | ||||||||
Fixed rate Euro Medium term note due 2026 | |||||||||
Long-Term Debt | |||||||||
Principal amount | € | € 750 | ||||||||
Interest rate - effective | 1.71% | 1.71% | |||||||
Total long-term debt | $ 801 | 892 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 801 | 892 | |||||||
Fixed rate 30-year debenture due 2028 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 330 | ||||||||
Interest rate - effective | 6.01% | 6.01% | |||||||
Total long-term debt | $ 343 | 344 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | $ 343 | 344 | |||||||
Fixed rate Euro medium term note due 2030 | |||||||||
Long-Term Debt | |||||||||
Principal amount | € | € 500 | ||||||||
Interest rate - effective | 1.90% | 1.90% | |||||||
Total long-term debt | $ 533 | ||||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 533 | ||||||||
Fixed rate 30-year bond due 2037 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 750 | ||||||||
Interest rate - effective | 5.73% | 5.73% | |||||||
Total long-term debt | $ 743 | 742 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 743 | 742 | |||||||
Floating rate note due 2041 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 96 | ||||||||
Interest rate - effective | 0.22% | 0.22% | |||||||
Total long-term debt | $ 96 | 96 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 96 | 96 | |||||||
Fixed rate medium term note due 2044 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 325 | ||||||||
Interest rate - effective | 4.05% | 4.05% | |||||||
Total long-term debt | $ 313 | 312 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | 313 | 312 | |||||||
Floating rate note due 2044 | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 55 | $ 60 | |||||||
Interest rate - effective | 0.16% | 0.16% | |||||||
Total long-term debt | $ 55 | 55 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | $ 55 | 55 | |||||||
Various fixed and floating rate Other borrowings due 2016-2040 | |||||||||
Long-Term Debt | |||||||||
Interest rate - effective | 0.22% | 0.22% | |||||||
Total long-term debt | $ 74 | 112 | |||||||
Maturities of long-term debt | |||||||||
Total long-term debt | $ 74 | $ 112 | |||||||
May 2015 Euro medium term notes issued | |||||||||
Long-Term Debt | |||||||||
Principal amount | € | € 1,750 | ||||||||
August 2015 medium term notes issued | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 1,500 | ||||||||
June 2014 medium term notes issued | |||||||||
Long-Term Debt | |||||||||
Principal amount | $ 950 | ||||||||
November 2014 Euro medium term notes issued | |||||||||
Long-Term Debt | |||||||||
Principal amount | € | € 1,250 | ||||||||
Eurobond 600 Million Euros Issued November 2013 | |||||||||
Long-Term Debt | |||||||||
Principal amount | € | € 600 |
Pension and Postretirement Be79
Pension and Postretirement Benefit Plans - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Aug. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Mar. 31, 2014item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Mar. 31, 2011item | |
Benefit Plan Information | |||||||||
Number of insurers 3M and certain benefit plans filed lawsuits on seeking insurance coverage for the WG Trading Company claim | item | 5 | ||||||||
3M Japan company provided contribution match to their defined contribution plan | 6.12% | ||||||||
Curtailment gain related to 3M Japan defined pension plan modification | $ 17 | ||||||||
Projected benefit obligation (PBO) term vested 2014 liability reduction estimate | $ 270 | $ 266 | |||||||
Pension benefit obligation (PBO) term vested liability reduction as percent of term vested eligible | 34.00% | ||||||||
Pension benefit obligation (PBO) term vested liability reduction as percent of overall U.S. pension PBO liability | 2.00% | ||||||||
Pension expense impact to income statement in 2014 from Lump Sum Payout | $ 0 | ||||||||
Number of additional limited partners of WG Trading Company, in addition to 3M, who objected and appealed the court's order to the United States Court of Appeals for the Second Circuit | item | 6 | ||||||||
Percentage of WG Trading Company holdings in relation to total fair value of the company's total plan assets, high end of range (as a percent) | 0.50% | 0.50% | |||||||
Original Percentage Medical Inflation Indexation By Company In Year | 3.00% | ||||||||
Revised Percentage Medical Inflation Indexation By Company In Year | 1.50% | ||||||||
Decrease In Projected Pension Obligation Liability Due To Retiree Welfare Benefit Plan Remeasurement | $ 233 | ||||||||
Distribution of benefical interest to participants due to plan termination | $ 16 | ||||||||
Qualified and Non-qualified Pension Benefits | |||||||||
Benefit Plan Information | |||||||||
Company contributions year to date | $ 264 | 210 | |||||||
United States Qualified and Non-qualified Pension Benefits | |||||||||
Benefit Plan Information | |||||||||
Company contributions year to date | 113 | 45 | |||||||
Projected benefit obligation (PBO) increase due to mortality table update | 820 | ||||||||
International Qualified and Non-qualified Pension Benefits | |||||||||
Benefit Plan Information | |||||||||
Company contributions year to date | 151 | 165 | |||||||
Postretirement Benefits | |||||||||
Benefit Plan Information | |||||||||
Company contributions year to date | $ 3 | 5 | |||||||
Projected benefit obligation (PBO) increase due to mortality table update | $ 100 |
Pension and Postretirement Be80
Pension and Postretirement Benefit Plans - Components of net periodic benefit cost and other information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
United States Qualified and Non-qualified Pension Benefits | |||
Net periodic benefit cost (benefit) | |||
Service cost | $ 293 | $ 241 | $ 258 |
Interest cost | 655 | 676 | 598 |
Expected return on plan assets | (1,069) | (1,043) | (1,046) |
Amortization of prior service cost (benefit) | (24) | 4 | 5 |
Amortization of net actuarial (gain) loss | 409 | 243 | 399 |
Net periodic benefit cost (benefit) | 264 | 121 | 214 |
Defined Benefit Plan Recognized Net Gain Loss Due To Settlements And Curtailments 1 | 2 | ||
Net periodic benefit cost (benefit) after settlements, curtailments, special termination benefits and other | 266 | 121 | 214 |
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss | |||
Prior service cost (benefit) | (266) | ||
Amortization of prior service cost (benefit) | 24 | (4) | (5) |
Net actuarial (gain) loss | 312 | 2,167 | (743) |
Amortization of net actuarial (gain) loss | (409) | (243) | (399) |
Total recognized in other comprehensive income (loss) | (73) | 1,654 | (1,147) |
Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss | 193 | 1,775 | (933) |
International Qualified and Non-qualified Pension Benefits | |||
Net periodic benefit cost (benefit) | |||
Service cost | 154 | 141 | 147 |
Interest cost | 206 | 252 | 238 |
Expected return on plan assets | (308) | (312) | (291) |
Amortization of transition (asset) obligation | (1) | (1) | (1) |
Amortization of prior service cost (benefit) | (13) | (16) | (16) |
Amortization of net actuarial (gain) loss | 144 | 121 | 153 |
Net periodic benefit cost (benefit) | 182 | 185 | 230 |
Defined Benefit Plan Recognized Net Gain Loss Due To Settlements And Curtailments 1 | (6) | 4 | 2 |
Net periodic benefit cost (benefit) after settlements, curtailments, special termination benefits and other | 176 | 189 | 232 |
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss | |||
Amortization of transition (asset) obligation | 1 | 1 | 1 |
Prior service cost (benefit) | 10 | 3 | 3 |
Amortization of prior service cost (benefit) | 13 | 16 | 16 |
Net actuarial (gain) loss | (270) | 592 | (294) |
Amortization of net actuarial (gain) loss | (144) | (121) | (153) |
Foreign currency | (174) | (215) | (47) |
Total recognized in other comprehensive income (loss) | (564) | 276 | (474) |
Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss | (388) | 465 | (242) |
Postretirement Benefits | |||
Net periodic benefit cost (benefit) | |||
Service cost | 75 | 65 | 80 |
Interest cost | 98 | 97 | 88 |
Expected return on plan assets | (91) | (90) | (90) |
Amortization of prior service cost (benefit) | (42) | (47) | (66) |
Amortization of net actuarial (gain) loss | 73 | 56 | 95 |
Net periodic benefit cost (benefit) | 113 | 81 | 107 |
Defined Benefit Plan Recognized Net Gain Loss Due To Settlements And Curtailments 1 | 1 | ||
Net periodic benefit cost (benefit) after settlements, curtailments, special termination benefits and other | 114 | 81 | 107 |
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss | |||
Prior service cost (benefit) | (212) | (20) | |
Amortization of prior service cost (benefit) | 42 | 47 | 66 |
Net actuarial (gain) loss | (23) | 358 | (313) |
Amortization of net actuarial (gain) loss | (73) | (56) | (95) |
Foreign currency | (1) | (1) | (2) |
Total recognized in other comprehensive income (loss) | (267) | 348 | (364) |
Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss | $ (153) | $ 429 | $ (257) |
Pension and Postretirement Be81
Pension and Postretirement Benefit Plans (Narratives) (Details 2) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)countryplan | Dec. 31, 2014USD ($) | |
Benefit Plan Information | ||
Maximum amount of certain nonqualified unfunded pension and postretirement benefit plans obligations not included in benefit obligation reconciliation | $ | $ 35 | $ 35 |
Qualified and Non-qualified Pension Benefits | ||
Benefit Plan Information | ||
Company-sponsored retirement plans, minimum number of worldwide plans | plan | 80 | |
Company-sponsored retirement plans, number of countries | country | 28 | |
International Qualified and Non-qualified Pension Benefits | ||
Benefit Plan Information | ||
Company-sponsored retirement plans, minimum number of international plans | plan | 70 | |
Company-sponsored retirement plans, number of countries | country | 27 |
Pension and Postretirement Be82
Pension and Postretirement Benefit Plans (Narratives) (Details 3) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
U.S. Defined Contribution Plan | ||||
Schedule Of Defined Contribution Plans Disclosures | ||||
Company match of eligible compensation, high end of range | 6.00% | |||
Company match of eligible compensation, percent for employees hired on or after January 1, 2009 | 5.00% | 100.00% | ||
Company contribution to employer retirement income account for employees hired on or after January 1, 2009 | 3.00% | |||
Expenses related to defined contribution plans | $ 165 | $ 153 | $ 136 | |
U.S. Defined Contribution Plan | Maximum | ||||
Schedule Of Defined Contribution Plans Disclosures | ||||
Employer match of employee contributions, pre January 1, 2009 | 60.00% | 75.00% | ||
U.S. Defined Contribution Plan | Minimum | ||||
Schedule Of Defined Contribution Plans Disclosures | ||||
Employer match of employee contributions, pre January 1, 2009 | 45.00% | 60.00% | ||
Foreign Defined Contribution Plan | ||||
Schedule Of Defined Contribution Plans Disclosures | ||||
Expenses related to defined contribution plans | $ 77 | $ 75 | $ 71 |
Pension and Postretirement Be83
Pension and Postretirement Benefit Plans (Components of net periodic benefit cost and other information) (Details 1) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Amounts recognized in the Consolidated Balance Sheet | |||
Non-current assets | $ 188 | $ 46 | |
Accrued benefit cost | |||
Current liabilities | (60) | (60) | |
Non-current liabilities | (3,520) | (3,843) | |
Qualified and Non-qualified Pension Benefits | |||
Change in plan assets | |||
Company contributions | 264 | 210 | |
United States Qualified and Non-qualified Pension Benefits | |||
Change in benefit obligation | |||
Benefit obligation at beginning of year | 16,452 | 13,967 | |
Service cost | 293 | 241 | $ 258 |
Interest cost | 655 | 676 | 598 |
Plan amendments | (266) | ||
Actuarial (gain) loss | (657) | 2,874 | |
Benefit payments | (874) | (1,039) | |
Settlements, curtailments, special termination benefits and other | (13) | (1) | |
Benefit obligation at end of year | 15,856 | 16,452 | 13,967 |
Change in plan assets | |||
Fair value, beginning balance | 14,643 | 13,889 | |
Actual return on plan assets | 100 | 1,749 | |
Company contributions | 113 | 45 | |
Benefit payments | (874) | (1,039) | |
Settlements, curtailments, special termination benefits and other | (16) | (1) | |
Fair value, ending balance | 13,966 | 14,643 | 13,889 |
Funded status at end of year | (1,890) | (1,809) | |
Amounts recognized in the Consolidated Balance Sheet | |||
Non-current assets | 3 | 3 | |
Accrued benefit cost | |||
Current liabilities | (47) | (46) | |
Non-current liabilities | (1,846) | (1,766) | |
Ending balance | (1,890) | (1,809) | |
Amounts recognized in accumulated other comprehensive income | |||
Net actuarial loss (gain) | 5,366 | 5,462 | |
Prior service cost (credit) | (227) | (251) | |
Ending balance | 5,139 | 5,211 | |
Accumulated benefit obligations in excess of plan assets | |||
Projected benefit obligation | 15,856 | 16,435 | |
Accumulated benefit obligation | 14,834 | 15,319 | |
Fair value of plan assets | 13,966 | 14,623 | |
Total Accumulated Benefit Obligation | 14,834 | 15,335 | |
International Qualified and Non-qualified Pension Benefits | |||
Change in benefit obligation | |||
Benefit obligation at beginning of year | 6,979 | 6,346 | |
Acquisitions | 94 | ||
Service cost | 154 | 141 | 147 |
Interest cost | 206 | 252 | 238 |
Participant contributions | 9 | 10 | |
Foreign exchange rate changes | (589) | (663) | |
Plan amendments | (6) | 3 | |
Actuarial (gain) loss | (274) | 1,128 | |
Benefit payments | (232) | (235) | |
Settlements, curtailments, special termination benefits and other | (19) | (3) | |
Benefit obligation at end of year | 6,322 | 6,979 | 6,346 |
Change in plan assets | |||
Fair value, beginning balance | 5,957 | 5,758 | |
Acquisitions | 8 | ||
Actual return on plan assets | 287 | 813 | |
Company contributions | 151 | 165 | |
Participant contributions | 9 | 10 | |
Foreign exchange rate changes | (498) | (554) | |
Benefit payments | (232) | (235) | |
Settlements, curtailments, special termination benefits and other | (13) | ||
Fair value, ending balance | 5,669 | 5,957 | 5,758 |
Funded status at end of year | (653) | (1,022) | |
Amounts recognized in the Consolidated Balance Sheet | |||
Non-current assets | 185 | 43 | |
Accrued benefit cost | |||
Current liabilities | (10) | (10) | |
Non-current liabilities | (828) | (1,055) | |
Ending balance | (653) | (1,022) | |
Amounts recognized in accumulated other comprehensive income | |||
Net transition obligation (asset) | (2) | (3) | |
Net actuarial loss (gain) | 1,610 | 2,200 | |
Prior service cost (credit) | (68) | (93) | |
Ending balance | 1,540 | 2,104 | |
Accumulated benefit obligations in excess of plan assets | |||
Projected benefit obligation | 2,382 | 2,588 | |
Accumulated benefit obligation | 2,149 | 2,335 | |
Fair value of plan assets | 1,566 | 1,636 | |
Total Accumulated Benefit Obligation | 5,773 | 6,401 | |
Postretirement Benefits | |||
Change in benefit obligation | |||
Benefit obligation at beginning of year | 2,462 | 2,017 | |
Service cost | 75 | 65 | 80 |
Interest cost | 98 | 97 | 88 |
Participant contributions | 14 | 18 | |
Foreign exchange rate changes | (22) | (11) | |
Plan amendments | (211) | ||
Actuarial (gain) loss | (80) | 415 | |
Medicare Part D Reimbursement | 1 | 1 | |
Benefit payments | (122) | (140) | |
Settlements, curtailments, special termination benefits and other | 1 | ||
Benefit obligation at end of year | 2,216 | 2,462 | 2,017 |
Change in plan assets | |||
Fair value, beginning balance | 1,436 | 1,405 | |
Actual return on plan assets | 36 | 148 | |
Company contributions | 3 | 5 | |
Participant contributions | 14 | 18 | |
Benefit payments | (122) | (140) | |
Fair value, ending balance | 1,367 | 1,436 | $ 1,405 |
Funded status at end of year | (849) | (1,026) | |
Accrued benefit cost | |||
Current liabilities | (3) | (4) | |
Non-current liabilities | (846) | (1,022) | |
Ending balance | (849) | (1,026) | |
Amounts recognized in accumulated other comprehensive income | |||
Net actuarial loss (gain) | 815 | 914 | |
Prior service cost (credit) | (270) | (102) | |
Ending balance | $ 545 | $ 812 |
Pension and Postretirement Be84
Pension and Postretirement Benefit Plans (Components of net periodic benefit cost and other information) (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Qualified and Non-qualified Pension Benefits | |||
Benefit Plan Information | |||
Company contributions | $ 264 | $ 210 | |
Qualified and Non-qualified Pension Benefits | Maximum | |||
Company's assumption for the expected return on plan assets | |||
Estimated pension contributions for next fiscal year | 200 | ||
Qualified and Non-qualified Pension Benefits | Minimum | |||
Company's assumption for the expected return on plan assets | |||
Estimated pension contributions for next fiscal year | 100 | ||
United States Qualified and Non-qualified Pension Benefits | |||
Benefit Plan Information | |||
Company contributions | 113 | $ 45 | |
Amounts expected to be amortized from accumulated other comprehensive income into net periodic benefit costs over next fiscal year | |||
Amortization of prior service cost (benefit) | (24) | ||
Amortization of net actuarial (gain) loss | 354 | ||
Total amortization expected over the next fiscal year | $ 330 | ||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate | 4.47% | 4.10% | 4.98% |
Compensation rate increase | 4.10% | 4.10% | 4.00% |
Percentage increase (decrease) in discount rate obligation from the prior year | 0.37% | ||
Weighted-average assumptions used to determine net cost for years ended | |||
Discount rate | 4.10% | 4.98% | 4.14% |
Expected return on assets | 7.75% | 7.75% | 8.00% |
Compensation rate increase | 4.10% | 4.00% | 4.00% |
United States Qualified and Non-qualified Pension Benefits | Global equity | |||
Asset Allocation assumption | |||
Asset allocation assumption for next fiscal year | 25.00% | ||
United States Qualified Pension Benefits | |||
Weighted-average assumptions used to determine net cost for years ended | |||
Percentage increase (decrease) in expected return on assets in next fiscal year from the prior year | (0.25%) | ||
Company's assumption for the expected return on plan assets | |||
Expected return on assets for next fiscal year | 7.50% | ||
Rate of return on plan assets | 0.70% | 13.00% | 6.00% |
Average annual actual return on plan assets over the past 10 years | 7.80% | ||
Average annual actual return on plan assets over the past 25 years | 10.00% | ||
United States Qualified Pension Benefits | Private equity | |||
Asset Allocation assumption | |||
Asset allocation assumption for next fiscal year | 18.00% | ||
United States Qualified Pension Benefits | Fixed income | |||
Asset Allocation assumption | |||
Asset allocation assumption for next fiscal year | 41.00% | ||
United States Qualified Pension Benefits | Absolute return | |||
Asset Allocation assumption | |||
Asset allocation assumption for next fiscal year | 16.00% | ||
International Qualified and Non-qualified Pension Benefits | |||
Benefit Plan Information | |||
Company contributions | $ 151 | $ 165 | |
Amounts expected to be amortized from accumulated other comprehensive income into net periodic benefit costs over next fiscal year | |||
Amortization of transition (asset) obligation | (1) | ||
Amortization of prior service cost (benefit) | (13) | ||
Amortization of net actuarial (gain) loss | 90 | ||
Total amortization expected over the next fiscal year | $ 76 | ||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate | 3.12% | 3.11% | 4.02% |
Compensation rate increase | 2.90% | 3.33% | 3.35% |
Weighted-average assumptions used to determine net cost for years ended | |||
Discount rate | 3.11% | 4.02% | 3.78% |
Expected return on assets | 5.90% | 5.83% | 5.87% |
Compensation rate increase | 3.33% | 3.35% | 3.31% |
Postretirement Benefits | |||
Benefit Plan Information | |||
Company contributions | $ 3 | $ 5 | |
Amounts expected to be amortized from accumulated other comprehensive income into net periodic benefit costs over next fiscal year | |||
Amortization of prior service cost (benefit) | (55) | ||
Amortization of net actuarial (gain) loss | 62 | ||
Total amortization expected over the next fiscal year | $ 7 | ||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate | 4.48% | 4.07% | 4.83% |
Percentage increase (decrease) in discount rate obligation from the prior year | 0.41% | ||
Weighted-average assumptions used to determine net cost for years ended | |||
Discount rate | 4.07% | 4.83% | 4.00% |
Expected return on assets | 6.91% | 7.11% | 7.19% |
Pension and Postretirement Be85
Pension and Postretirement Benefit Plans (Components of net periodic benefit cost and other information) (Details 4) $ in Millions | Dec. 31, 2015USD ($) |
United States Qualified and Non-qualified Pension Benefits | |
Future Pension and Postretirement Benefit Payments | |
2016 Benefit Payments | $ 987 |
2017 Benefit Payments | 997 |
2018 Benefit Payments | 1,008 |
2019 Benefit Payments | 1,017 |
2020 Benefit Payments | 1,029 |
Following five years | 5,187 |
International Qualified and Non-qualified Pension Benefits | |
Future Pension and Postretirement Benefit Payments | |
2016 Benefit Payments | 205 |
2017 Benefit Payments | 215 |
2018 Benefit Payments | 228 |
2019 Benefit Payments | 241 |
2020 Benefit Payments | 250 |
Following five years | 1,480 |
Postretirement Benefits | |
Future Pension and Postretirement Benefit Payments | |
2016 Benefit Payments | 141 |
2017 Benefit Payments | 156 |
2018 Benefit Payments | 172 |
2019 Benefit Payments | 153 |
2020 Benefit Payments | 155 |
Following five years | $ 797 |
Pension and Postretirement Be86
Pension and Postretirement Benefit Plans (Components of net periodic benefit cost and other information) (Details 5) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
United States Qualified and Non-qualified Pension Benefits | |||
Benefit Plan Information | |||
Total, before other items to reconcile | $ 14,125 | $ 14,818 | |
Other items to reconcile to fair value of plan assets | (159) | (175) | |
Fair value of plan assets | 13,966 | 14,643 | $ 13,889 |
United States Qualified and Non-qualified Pension Benefits | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 4,532 | 4,367 | |
United States Qualified and Non-qualified Pension Benefits | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 4,113 | 4,699 | |
United States Qualified and Non-qualified Pension Benefits | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (106) | (74) | |
United States Qualified and Non-qualified Pension Benefits | Global equity | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 3,624 | 3,587 | |
United States Qualified and Non-qualified Pension Benefits | Global equity | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 3,046 | 2,980 | |
United States Qualified and Non-qualified Pension Benefits | U.S. equities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,897 | 1,766 | |
United States Qualified and Non-qualified Pension Benefits | U.S. equities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,897 | 1,766 | |
United States Qualified and Non-qualified Pension Benefits | Non-U.S. equities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,149 | 1,214 | |
United States Qualified and Non-qualified Pension Benefits | Non-U.S. equities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,149 | 1,214 | |
United States Qualified and Non-qualified Pension Benefits | Index and long/short equity | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 578 | 607 | |
United States Qualified and Non-qualified Pension Benefits | Fixed income | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 5,184 | 5,652 | |
United States Qualified and Non-qualified Pension Benefits | Fixed income | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,107 | 1,059 | |
United States Qualified and Non-qualified Pension Benefits | Fixed income | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 4,066 | 4,561 | |
United States Qualified and Non-qualified Pension Benefits | U.S. government securities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,551 | 1,622 | |
United States Qualified and Non-qualified Pension Benefits | U.S. government securities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,095 | 1,032 | |
United States Qualified and Non-qualified Pension Benefits | U.S. government securities | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 456 | 590 | |
United States Qualified and Non-qualified Pension Benefits | Foreign government agency securities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 126 | 388 | |
United States Qualified and Non-qualified Pension Benefits | Foreign government agency securities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 7 | ||
United States Qualified and Non-qualified Pension Benefits | Foreign government agency securities | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 126 | 381 | |
United States Qualified and Non-qualified Pension Benefits | Preferred and convertible securities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 12 | 15 | |
United States Qualified and Non-qualified Pension Benefits | Preferred and convertible securities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 4 | 6 | |
United States Qualified and Non-qualified Pension Benefits | Preferred and convertible securities | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 8 | 9 | |
United States Qualified and Non-qualified Pension Benefits | U.S. corporate bonds | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2,829 | 2,897 | |
United States Qualified and Non-qualified Pension Benefits | U.S. corporate bonds | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 9 | 8 | |
United States Qualified and Non-qualified Pension Benefits | U.S. corporate bonds | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2,820 | 2,889 | |
United States Qualified and Non-qualified Pension Benefits | Non-U.S. corporate bonds | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 616 | 566 | |
United States Qualified and Non-qualified Pension Benefits | Non-U.S. corporate bonds | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 616 | 566 | |
United States Qualified and Non-qualified Pension Benefits | Other | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 11 | 32 | |
United States Qualified and Non-qualified Pension Benefits | Derivative instruments | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 39 | 132 | |
United States Qualified and Non-qualified Pension Benefits | Derivative instruments | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (1) | 6 | |
United States Qualified and Non-qualified Pension Benefits | Derivative instruments | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 40 | 126 | |
United States Qualified and Non-qualified Pension Benefits | Private equity | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2,368 | 2,502 | |
United States Qualified and Non-qualified Pension Benefits | Private equity | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 24 | 15 | |
United States Qualified and Non-qualified Pension Benefits | Private equity | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (106) | (74) | |
United States Qualified and Non-qualified Pension Benefits | Derivative instruments | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (106) | (74) | |
United States Qualified and Non-qualified Pension Benefits | Derivative instruments | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (106) | (74) | |
United States Qualified and Non-qualified Pension Benefits | Growth equity | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 24 | 15 | |
United States Qualified and Non-qualified Pension Benefits | Growth equity | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 24 | 15 | |
United States Qualified and Non-qualified Pension Benefits | Partnership investments | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2,450 | 2,561 | |
United States Qualified and Non-qualified Pension Benefits | Absolute return | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2,058 | 2,173 | |
United States Qualified and Non-qualified Pension Benefits | Absolute return | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 253 | 26 | |
United States Qualified and Non-qualified Pension Benefits | Absolute return | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 41 | 52 | |
United States Qualified and Non-qualified Pension Benefits | Hedge fund/fund of funds | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,409 | 1,807 | |
United States Qualified and Non-qualified Pension Benefits | Fixed income and other | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 299 | 78 | |
United States Qualified and Non-qualified Pension Benefits | Fixed income and other | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 253 | 26 | |
United States Qualified and Non-qualified Pension Benefits | Fixed income and other | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 46 | 52 | |
United States Qualified and Non-qualified Pension Benefits | Partnership investments - absolute return | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 355 | 288 | |
United States Qualified and Non-qualified Pension Benefits | Derivatives - absolute return | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (5) | ||
United States Qualified and Non-qualified Pension Benefits | Derivatives - absolute return | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (5) | ||
United States Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 891 | 904 | |
United States Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 102 | 287 | |
United States Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 6 | 86 | |
United States Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 108 | 373 | |
United States Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 102 | 287 | |
United States Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 6 | 86 | |
United States Qualified and Non-qualified Pension Benefits | Cash and cash equivalents valued at net asset value [Member] | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 783 | 531 | |
International Qualified and Non-qualified Pension Benefits | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 5,697 | 5,998 | |
Other items to reconcile to fair value of plan assets | (28) | (41) | |
Fair value of plan assets | 5,669 | 5,957 | 5,758 |
International Qualified and Non-qualified Pension Benefits | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,681 | 1,583 | |
International Qualified and Non-qualified Pension Benefits | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2,477 | 2,767 | |
International Qualified and Non-qualified Pension Benefits | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 481 | 502 | |
International Qualified and Non-qualified Pension Benefits | Global equity | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2,157 | 2,131 | |
International Qualified and Non-qualified Pension Benefits | Global equity | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,243 | 1,286 | |
International Qualified and Non-qualified Pension Benefits | Global equity | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 893 | 823 | |
International Qualified and Non-qualified Pension Benefits | Global equity | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 4 | 4 | |
International Qualified and Non-qualified Pension Benefits | Growth equities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 913 | 848 | |
International Qualified and Non-qualified Pension Benefits | Growth equities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 718 | 672 | |
International Qualified and Non-qualified Pension Benefits | Growth equities | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 195 | 176 | |
International Qualified and Non-qualified Pension Benefits | Value equities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 521 | 618 | |
International Qualified and Non-qualified Pension Benefits | Value equities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 494 | 595 | |
International Qualified and Non-qualified Pension Benefits | Value equities | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 27 | 23 | |
International Qualified and Non-qualified Pension Benefits | Core equities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 706 | 647 | |
International Qualified and Non-qualified Pension Benefits | Core equities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 31 | 19 | |
International Qualified and Non-qualified Pension Benefits | Core equities | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 671 | 624 | |
International Qualified and Non-qualified Pension Benefits | Core equities | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 4 | 4 | |
International Qualified and Non-qualified Pension Benefits | Equities valued at net asset value | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 17 | 18 | |
International Qualified and Non-qualified Pension Benefits | Fixed income | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2,310 | 2,915 | |
International Qualified and Non-qualified Pension Benefits | Fixed income | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 313 | 133 | |
International Qualified and Non-qualified Pension Benefits | Fixed income | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,213 | 1,904 | |
International Qualified and Non-qualified Pension Benefits | Fixed income | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 14 | 15 | |
International Qualified and Non-qualified Pension Benefits | Domestic government debt | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 633 | 623 | |
International Qualified and Non-qualified Pension Benefits | Domestic government debt | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 283 | 87 | |
International Qualified and Non-qualified Pension Benefits | Domestic government debt | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 346 | 533 | |
International Qualified and Non-qualified Pension Benefits | Domestic government debt | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 4 | 3 | |
International Qualified and Non-qualified Pension Benefits | Foreign government agency securities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 206 | 715 | |
International Qualified and Non-qualified Pension Benefits | Foreign government agency securities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 45 | ||
International Qualified and Non-qualified Pension Benefits | Foreign government agency securities | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 206 | 670 | |
International Qualified and Non-qualified Pension Benefits | Corporate debt securities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 701 | 714 | |
International Qualified and Non-qualified Pension Benefits | Corporate debt securities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 30 | 1 | |
International Qualified and Non-qualified Pension Benefits | Corporate debt securities | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 661 | 701 | |
International Qualified and Non-qualified Pension Benefits | Corporate debt securities | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 10 | 12 | |
International Qualified and Non-qualified Pension Benefits | Fixed income securities valued at net asset value [Member] | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 770 | 863 | |
International Qualified and Non-qualified Pension Benefits | Private equity | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 160 | 154 | |
International Qualified and Non-qualified Pension Benefits | Private equity | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1 | 3 | |
International Qualified and Non-qualified Pension Benefits | Private equity | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 5 | 5 | |
International Qualified and Non-qualified Pension Benefits | Private equity | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 4 | 4 | |
International Qualified and Non-qualified Pension Benefits | Real estate | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 10 | 12 | |
International Qualified and Non-qualified Pension Benefits | Real estate | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1 | 3 | |
International Qualified and Non-qualified Pension Benefits | Real estate | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 5 | 5 | |
International Qualified and Non-qualified Pension Benefits | Real estate | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 4 | 4 | |
International Qualified and Non-qualified Pension Benefits | Real estate valued at net asset value | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 126 | 119 | |
International Qualified and Non-qualified Pension Benefits | Partnership investments | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 24 | 23 | |
International Qualified and Non-qualified Pension Benefits | Absolute return | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 596 | 605 | |
International Qualified and Non-qualified Pension Benefits | Absolute return | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (2) | ||
International Qualified and Non-qualified Pension Benefits | Absolute return | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 19 | 6 | |
International Qualified and Non-qualified Pension Benefits | Absolute return | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 459 | 479 | |
International Qualified and Non-qualified Pension Benefits | Insurance | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 456 | 476 | |
International Qualified and Non-qualified Pension Benefits | Insurance | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 456 | 476 | |
International Qualified and Non-qualified Pension Benefits | Derivatives - absolute return | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 13 | (4) | |
International Qualified and Non-qualified Pension Benefits | Derivatives - absolute return | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (2) | ||
International Qualified and Non-qualified Pension Benefits | Derivatives - absolute return | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 15 | (4) | |
International Qualified and Non-qualified Pension Benefits | Other | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 7 | 13 | |
International Qualified and Non-qualified Pension Benefits | Other | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 4 | 10 | |
International Qualified and Non-qualified Pension Benefits | Other | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 3 | 3 | |
International Qualified and Non-qualified Pension Benefits | Other valued at net asset value | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1 | 3 | |
International Qualified and Non-qualified Pension Benefits | Hedge funds | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 119 | 117 | |
International Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 474 | 193 | |
International Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 126 | 161 | |
International Qualified and Non-qualified Pension Benefits | Cash and Cash Equivalent | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 347 | 29 | |
International Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 473 | 190 | |
International Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 126 | 161 | |
International Qualified and Non-qualified Pension Benefits | Cash and cash equivalents | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 347 | 29 | |
International Qualified and Non-qualified Pension Benefits | Cash and cash equivalents valued at net asset value [Member] | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1 | 3 | |
Postretirement Benefits | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1,358 | 1,428 | |
Other items to reconcile to fair value of plan assets | 9 | 8 | |
Fair value of plan assets | $ 1,367 | 1,436 | $ 1,405 |
Percentage of plan assets within 401h account | 39.00% | ||
Postretirement Benefits | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | $ 687 | 724 | |
Postretirement Benefits | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 392 | 393 | |
Postretirement Benefits | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (4) | (3) | |
Postretirement Benefits | Global equity | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 616 | 676 | |
Postretirement Benefits | Global equity | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 567 | 621 | |
Postretirement Benefits | U.S. equities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 508 | 565 | |
Postretirement Benefits | U.S. equities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 508 | 565 | |
Postretirement Benefits | Non-U.S. equities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 59 | 56 | |
Postretirement Benefits | Non-U.S. equities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 59 | 56 | |
Postretirement Benefits | Index and long/short equity | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 49 | 55 | |
Postretirement Benefits | Fixed income | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 461 | 457 | |
Postretirement Benefits | Fixed income | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 71 | 68 | |
Postretirement Benefits | Fixed income | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 390 | 388 | |
Postretirement Benefits | U.S. government securities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 263 | 254 | |
Postretirement Benefits | U.S. government securities | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 71 | 68 | |
Postretirement Benefits | U.S. government securities | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 192 | 186 | |
Postretirement Benefits | Foreign government agency securities | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 8 | 17 | |
Postretirement Benefits | Foreign government agency securities | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 8 | 17 | |
Postretirement Benefits | U.S. corporate bonds | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 153 | 146 | |
Postretirement Benefits | U.S. corporate bonds | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 153 | 146 | |
Postretirement Benefits | Non-U.S. corporate bonds | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 35 | 34 | |
Postretirement Benefits | Non-U.S. corporate bonds | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 35 | 34 | |
Postretirement Benefits | Other | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1 | ||
Postretirement Benefits | Derivative instruments | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2 | 5 | |
Postretirement Benefits | Derivative instruments | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2 | 5 | |
Postretirement Benefits | Private equity | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 133 | 160 | |
Postretirement Benefits | Private equity | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1 | 1 | |
Postretirement Benefits | Private equity | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (4) | (3) | |
Postretirement Benefits | Derivative instruments | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (4) | (3) | |
Postretirement Benefits | Derivative instruments | Level 3 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | (4) | (3) | |
Postretirement Benefits | Growth equity | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1 | 1 | |
Postretirement Benefits | Growth equity | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 1 | 1 | |
Postretirement Benefits | Partnership investments | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 136 | 162 | |
Postretirement Benefits | Absolute return | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 80 | 79 | |
Postretirement Benefits | Absolute return | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 10 | 1 | |
Postretirement Benefits | Absolute return | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2 | 2 | |
Postretirement Benefits | Hedge fund/fund of funds | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 54 | 66 | |
Postretirement Benefits | Fixed income and other | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 12 | 3 | |
Postretirement Benefits | Fixed income and other | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 10 | 1 | |
Postretirement Benefits | Fixed income and other | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 2 | 2 | |
Postretirement Benefits | Partnership investments - absolute return | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 14 | 10 | |
Postretirement Benefits | Cash and Cash Equivalent | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 68 | 56 | |
Postretirement Benefits | Cash and Cash Equivalent | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 38 | 33 | |
Postretirement Benefits | Cash and Cash Equivalent | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 3 | ||
Postretirement Benefits | Cash and cash equivalents | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 38 | 36 | |
Postretirement Benefits | Cash and cash equivalents | Level 1 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 38 | 33 | |
Postretirement Benefits | Cash and cash equivalents | Level 2 | |||
Benefit Plan Information | |||
Total, before other items to reconcile | 3 | ||
Postretirement Benefits | Cash and cash equivalents valued at net asset value [Member] | |||
Benefit Plan Information | |||
Total, before other items to reconcile | $ 30 | $ 20 |
Pension and Postretirement Be87
Pension and Postretirement Benefit Plans (Components of net periodic benefit cost and other information) (Details 6) - International Qualified and Non-qualified Pension Benefits - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Benefit Plan Information | ||
Foreign currency exchange | $ (498) | $ (554) |
Level 3 | ||
Benefit Plan Information | ||
Foreign currency exchange | (36) | (62) |
Defined benefit plan increases related to net purchases and unrealized gains losses | $ 16 | $ 46 |
Derivatives - Cash Flow Hedges
Derivatives - Cash Flow Hedges (Details) € in Millions, $ in Millions, ₩ in Billions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Nov. 30, 2014USD ($) | Jun. 30, 2014 | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015KRW (₩) | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) | Dec. 31, 2014EUR (€) | Nov. 30, 2014EUR (€) | Nov. 30, 2014USD ($) | |
November 2014 Euro medium term notes issued | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Principal amount | € | € 1,250 | ||||||||||
Fixed rate Euro Medium term note due 2026 | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Principal amount | € | € 750 | ||||||||||
Foreign currency forward contracts | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Derivative notional amount | ₩ | ₩ 248 | ||||||||||
Cash flow hedge | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective portion of Derivative | $ 212 | $ 171 | $ (98) | ||||||||
Accumulated other comprehensive income (loss), unrealized gain (loss) on cash flow hedges | $ 124 | ||||||||||
After-tax net unrealized gain (loss) anticipated to be reclassifed from AOCI to the income statement within next twelve months | 98 | ||||||||||
After-tax net unrealized gain (loss) anticipated to be reclassifed from AOCI to the Income Statement in 2017 | 23 | ||||||||||
After-tax unrealized gain (loss) anticipated to be reclassifed from AOCI to the Income Statement after 2017 | 3 | ||||||||||
Gain (Loss) on Hedged Item Recognized in Income | $ 174 | 4 | (122) | ||||||||
Cash flow hedge | Foreign currency forward/option contracts | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Maximum length of time hedged in cash flow hedge | 24 months | 36 months | |||||||||
Maximum length of time hedged in cash flow hedge prior to current period | 12 months | ||||||||||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective portion of Derivative | $ 212 | 183 | 9 | ||||||||
Cash flow hedge | Foreign currency forward/option contracts | Cost of sales | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Gain (Loss) on Hedged Item Recognized in Income | 178 | 3 | (11) | ||||||||
Cash flow hedge | Interest rate swap contracts | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Derivative notional amount | € | € 500 | ||||||||||
Term of derivative contract | 12 years | ||||||||||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective portion of Derivative | (8) | ||||||||||
Accumulated other comprehensive income (loss), unrealized gain (loss) on cash flow hedges | $ (5) | $ (5) | |||||||||
Gain (Loss) on Hedged Item Recognized in Income | $ (8) | ||||||||||
Cash flow hedge | Interest rate swap contracts | Fixed rate Euro Medium term note due 2026 | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Principal amount | € | € 750 | ||||||||||
Term of debt instrument | 12 years | ||||||||||
Cash flow hedge | Interest rate swap contracts | Interest expense | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Gain (Loss) on Hedged Item Recognized in Income | (2) | (1) | (1) | ||||||||
Cash flow hedge | Commodity price swap contracts | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective portion of Derivative | (4) | 1 | |||||||||
Cash flow hedge | Commodity price swap contracts | Cost of sales | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Gain (Loss) on Hedged Item Recognized in Income | $ (2) | $ 2 | (2) | ||||||||
Cash flow hedge | Foreign currency forward contracts | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective portion of Derivative | (108) | ||||||||||
Cash flow hedge | Foreign currency forward contracts | Interest expense | |||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||
Gain (Loss) on Hedged Item Recognized in Income | $ (108) |
Derivatives - Fair Value Hedges
Derivatives - Fair Value Hedges (Details) € in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |||||||
Aug. 31, 2015USD ($)DerivativeInstrument | Jul. 31, 2007EUR (€) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Jul. 31, 2014EUR (€) | Jun. 30, 2014USD ($) | Nov. 30, 2013EUR (€) | Aug. 31, 2010EUR (€) | |
Derivatives in Fair Value Hedging Relationships | |||||||||
Number Of Interest Rate Swap Contracts Entered In Period | DerivativeInstrument | 2 | ||||||||
Fixed rate medium term note due 2019 | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Face amount | $ 25 | $ 625 | |||||||
Fixed rate medium term note due 2020 | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Face amount | 200 | ||||||||
Fixed rate medium term note due 2025 | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Face amount | 550 | ||||||||
August 2015 medium term notes issued | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Face amount | $ 1,500 | ||||||||
June 2014 medium term notes issued | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Face amount | 950 | ||||||||
Interest rate swap contracts | Fixed rate medium term note due 2018 | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Derivative notional amount | $ 450 | ||||||||
Term of debt instrument | 3 years | ||||||||
Interest rate swap contracts | Fixed rate medium term note due 2020 | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Derivative notional amount | $ 300 | ||||||||
Term of debt instrument | 5 years | ||||||||
Fair value hedges | Interest rate swap contracts | Eurobond repaid July 2014 | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Derivative notional amount | € | € 400 | ||||||||
Term of debt instrument | 7 years | ||||||||
Face amount | € | € 750 | ||||||||
Termination of notional amount of fixed-to-floating interest rate swap | € | € 150 | ||||||||
Gain (loss) on termination of fixed-to-floating interest rate swap will be amortized over this debt's remaining life | € | € 18 | ||||||||
Remaining amount matured from Interest Rate Swap | € | € 250 | ||||||||
Fair value hedges | Interest rate swap contracts | Eurobond Due 2021 | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Derivative notional amount | € | € 300 | ||||||||
Face amount | € | € 600 | ||||||||
Fair value hedges | Interest rate swap contracts | Fixed rate medium term note due 2019 | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Derivative notional amount | $ 600 | ||||||||
Derivatives designated as hedging instruments | Fair value hedges | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Gain (Loss) on Derivative Recognized in income | (2) | $ 11 | $ (21) | ||||||
Gain (Loss) on Hedged Item Recognized in Income | 2 | (11) | 21 | ||||||
Derivatives designated as hedging instruments | Fair value hedges | Interest rate swap contracts | Interest expense | |||||||||
Derivatives in Fair Value Hedging Relationships | |||||||||
Gain (Loss) on Derivative Recognized in income | (2) | 11 | (21) | ||||||
Gain (Loss) on Hedged Item Recognized in Income | $ 2 | $ (11) | $ 21 |
Derivatives - Net Investment He
Derivatives - Net Investment Hedges (Details) € in Millions, ₩ in Billions | 12 Months Ended | ||||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015KRW (₩) | Dec. 31, 2015EUR (€) | |
Foreign currency forward contracts | |||||
Net investment hedges | |||||
Derivative notional amount | ₩ | ₩ 248 | ||||
Foreign Currency Denominated Debt | |||||
Net investment hedges | |||||
Face amount of debt designated as a net investment hedge | € | € 3,600 | ||||
Net Investment Hedges | |||||
Net investment hedges | |||||
Effective portion of net investment hedge reclassified out of other comprehensive income into income | $ 0 | ||||
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument | 206,000,000 | $ 246,000,000 | $ (70,000,000) | ||
Ineffective portion of gain (loss) on derivative and amount excluded from effectiveness testing recognized in income | 11,000,000 | 1,000,000 | |||
Net Investment Hedges | Foreign currency forward contracts | |||||
Net investment hedges | |||||
Derivative notional amount | € | € 974 | ||||
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument | 143,000,000 | 94,000,000 | 12,000,000 | ||
Net Investment Hedges | Foreign currency forward contracts | Cost of sales | |||||
Net investment hedges | |||||
Ineffective portion of gain (loss) on derivative and amount excluded from effectiveness testing recognized in income | 11,000,000 | 1,000,000 | |||
Net Investment Hedges | Foreign Currency Denominated Debt | |||||
Net investment hedges | |||||
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument | $ 63,000,000 | $ 152,000,000 | $ (82,000,000) |
Derivatives - Not Designated (D
Derivatives - Not Designated (Details) - Derivatives not designated as hedging instruments - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivatives not designated as hedging instruments | |||
Gain (Loss) on Derivative Recognized in income | $ (28) | $ (30) | $ (24) |
Foreign currency forward/option contracts | Cost of sales | |||
Derivatives not designated as hedging instruments | |||
Gain (Loss) on Derivative Recognized in income | 5 | 10 | 20 |
Foreign currency forward contracts | Interest expense | |||
Derivatives not designated as hedging instruments | |||
Gain (Loss) on Derivative Recognized in income | (30) | $ (40) | (43) |
Commodity price swap contracts | Cost of sales | |||
Derivatives not designated as hedging instruments | |||
Gain (Loss) on Derivative Recognized in income | $ (3) | $ (1) |
Derivatives - BS Location (Deta
Derivatives - BS Location (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | $ 296 | $ 256 |
Fair Value of Derivative Instruments, Liabilities | 69 | 43 |
Derivatives designated as hedging instruments | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 233 | 190 |
Fair Value of Derivative Instruments, Liabilities | 18 | 10 |
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Other current assets | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 148 | 116 |
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Other assets | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 61 | 47 |
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Other current liabilities | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Liabilities | 14 | 2 |
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Other liabilities | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Liabilities | 3 | 1 |
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Current balance sheet location | ||
Location and Fair Value Amount of Derivative Instruments | ||
Derivative Notional Amount | 2,815 | 1,865 |
Derivatives designated as hedging instruments | Foreign currency forward/option contracts | Noncurrent balance sheet location | ||
Location and Fair Value Amount of Derivative Instruments | ||
Derivative Notional Amount | 1,240 | 656 |
Derivatives designated as hedging instruments | Commodity price swap contracts | Other current liabilities | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Liabilities | 4 | |
Derivatives designated as hedging instruments | Commodity price swap contracts | Current balance sheet location | ||
Location and Fair Value Amount of Derivative Instruments | ||
Derivative Notional Amount | 20 | |
Derivatives designated as hedging instruments | Interest rate swap contracts | Other assets | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 24 | 27 |
Derivatives designated as hedging instruments | Interest rate swap contracts | Other liabilities | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Liabilities | 1 | 3 |
Derivatives designated as hedging instruments | Interest rate swap contracts | Noncurrent balance sheet location | ||
Location and Fair Value Amount of Derivative Instruments | ||
Derivative Notional Amount | 1,753 | 1,003 |
Derivatives not designated as hedging instruments | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 63 | 66 |
Fair Value of Derivative Instruments, Liabilities | 51 | 33 |
Derivatives not designated as hedging instruments | Foreign currency forward/option contracts | Other current assets | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 63 | 66 |
Derivatives not designated as hedging instruments | Foreign currency forward/option contracts | Other current liabilities | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Liabilities | 51 | 33 |
Derivatives not designated as hedging instruments | Foreign currency forward/option contracts | Current balance sheet location | ||
Location and Fair Value Amount of Derivative Instruments | ||
Derivative Notional Amount | $ 5,359 | $ 6,582 |
Derivatives - Offsetting Assets
Derivatives - Offsetting Assets (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)Counterparty | Dec. 31, 2014USD ($) | |
Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties | ||
Number of master netting agreements supported by primary counterparty's parent guarantee | Counterparty | 1 | |
Number of primary derivative counterparties | Counterparty | 16 | |
Number of credit support agreements by primary counterparty | Counterparty | 15 | |
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | $ 296 | $ 256 |
Net Amounts of Derivative Assets | 259 | 236 |
Derivatives Subject to Master Netting Agreements | ||
Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties | ||
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 296 | 256 |
Gross Amount of Eligible Offsetting Recognized Derivative Liabilities | 37 | 20 |
Net Amounts of Derivative Assets | $ 259 | $ 236 |
Derivatives - Offsetting Liabil
Derivatives - Offsetting Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties | ||
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | $ 69 | $ 43 |
Net Amount of Derivative Liabilities | 32 | 23 |
Derivatives Subject to Master Netting Agreements | ||
Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties | ||
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 64 | 36 |
Gross Amount of Eligible Offsetting Recognized Derivative Assets | 37 | 20 |
Net Amount of Derivative Liabilities | 27 | 16 |
Derivatives Not Subject to Master Netting Agreements | ||
Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties | ||
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 5 | 7 |
Net Amount of Derivative Liabilities | $ 5 | $ 7 |
Derivatives - Currency Effects
Derivatives - Currency Effects (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Foreign Currency [Abstract] | ||
Year-on-year foreign currency transaction effects, including hedging impact, gain (loss) impact on pre-tax income | $ 180 | $ 10 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | $ 127 | $ 1,454 |
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 296 | 256 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 69 | 43 |
Fair value on a recurring basis | Foreign currency forward/option contracts | ||
Assets and Liabilities Measured on Recurring Basis | ||
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 272 | 229 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 68 | 36 |
Fair value on a recurring basis | Commodity price swap contracts | ||
Assets and Liabilities Measured on Recurring Basis | ||
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 4 | |
Fair value on a recurring basis | Interest rate swap contracts | ||
Assets and Liabilities Measured on Recurring Basis | ||
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 24 | 27 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 1 | 3 |
Fair value on a recurring basis | U.S. government agency securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 108 | |
Fair value on a recurring basis | Foreign government agency securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 10 | 95 |
Fair value on a recurring basis | Corporate debt securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 10 | 619 |
Fair value on a recurring basis | Commercial paper | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 12 | |
Fair value on a recurring basis | Certificates of deposit/time deposits | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 26 | 41 |
Fair value on a recurring basis | Asset-backed securities Automobile loan related | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 26 | 282 |
Fair value on a recurring basis | Asset-backed securities Credit card related | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 10 | 162 |
Fair value on a recurring basis | Asset-backed securities Equipment lease related | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 2 | 48 |
Fair value on a recurring basis | Asset-backed securities Other asset-backed securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 19 | 46 |
Fair value on a recurring basis | U.S. treasury securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 38 | |
Fair value on a recurring basis | U.S. municipal securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 12 | 15 |
Fair value on a recurring basis | Investments | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 1 | |
Fair value on a recurring basis | Level 1 | U.S. treasury securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 38 | |
Fair value on a recurring basis | Level 1 | Investments | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 1 | |
Fair value on a recurring basis | Level 2 | Foreign currency forward/option contracts | ||
Assets and Liabilities Measured on Recurring Basis | ||
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 272 | 229 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 68 | 36 |
Fair value on a recurring basis | Level 2 | Commodity price swap contracts | ||
Assets and Liabilities Measured on Recurring Basis | ||
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 4 | |
Fair value on a recurring basis | Level 2 | Interest rate swap contracts | ||
Assets and Liabilities Measured on Recurring Basis | ||
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 24 | 27 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 1 | 3 |
Fair value on a recurring basis | Level 2 | U.S. government agency securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 108 | |
Fair value on a recurring basis | Level 2 | Foreign government agency securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 10 | 95 |
Fair value on a recurring basis | Level 2 | Corporate debt securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 10 | 619 |
Fair value on a recurring basis | Level 2 | Commercial paper | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 12 | |
Fair value on a recurring basis | Level 2 | Certificates of deposit/time deposits | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 26 | 41 |
Fair value on a recurring basis | Level 2 | Asset-backed securities Automobile loan related | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 26 | 282 |
Fair value on a recurring basis | Level 2 | Asset-backed securities Credit card related | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 10 | 162 |
Fair value on a recurring basis | Level 2 | Asset-backed securities Equipment lease related | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 2 | 48 |
Fair value on a recurring basis | Level 2 | Asset-backed securities Other asset-backed securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 19 | 46 |
Fair value on a recurring basis | Level 3 | U.S. municipal securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | $ 12 | $ 15 |
Fair Value Measurements - Rec97
Fair Value Measurements - Recurring Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) | |||
Balance at the beginning of the period | $ 15 | $ 11 | $ 7 |
Total gains or losses included in earnings | 0 | (1) | 0 |
Total gains or losses included in other comprehensive income | 0 | 2 | 4 |
Purchases and issuances | 0 | 15 | 0 |
Sales and settlements | (3) | (12) | 0 |
Transfers in and/or out of Level 3 | 0 | 0 | 0 |
Balance at the end of the period | $ 12 | $ 15 | $ 11 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fixed rate medium term note due 2016 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument, Face Amount | $ 1,000 | |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Medium-term fixed rate note due September 2016 (long-term in 2014 and short-term in 2015) | 999 | $ 996 |
Long-term debt, excluding current portion and medium-term fixed rate note due September 2016 | 8,753 | 5,709 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Medium-term fixed rate note due September 2016 (long-term in 2014 and short-term in 2015) | 1,003 | 1,014 |
Long-term debt, excluding current portion and medium-term fixed rate note due September 2016 | $ 9,101 | $ 6,189 |
Commitments and Contingencies -
Commitments and Contingencies - Respirator and Environmental (Details) | 12 Months Ended | |
Dec. 31, 2015USD ($)g / lindividualcaseitemclaim | Dec. 31, 2014item | |
Respirator Mask/Asbestos Litigation | ||
Loss contingencies | ||
Total number of named claimants | item | 2,130 | 2,220 |
Number of total claims settled and taken to trial | claim | 10 | |
Number of total claims settled and tried to verdict | claim | 8 | |
Number of total claims tried to verdict | claim | 9 | |
Number of total claims dismissed | claim | 1 | |
Increase in insurance liabilities | $ 50,000,000 | |
Payments for fees and settlements related to litigation | 46,000,000 | |
Insurance receivables | $ 39,000,000 | |
Respirator Mask/Asbestos Litigation - State of West Virginia | ||
Loss contingencies | ||
Number of additional defendants | 2 | |
Accrued loss contingency reserve | $ 0 | |
Respirator Mask/Asbestos litigation - Excluding Aearo Technologies | ||
Loss contingencies | ||
Accrued loss contingency reserve | 144,000,000 | |
Respirator Mask/Asbestos Litigation - Aearo Technologies | ||
Loss contingencies | ||
Accrued loss contingency reserve | 21,000,000 | |
Quarterly fee paid to Cabot to retain responsibility and liability for products manufactured before July 11, 1995 | $ 100,000 | |
Number of underlying claims concerning whether they were Cabot's responsibility | claim | 258 | |
Outstanding issues remaining | case | 2 | |
Environmental Matters - Remediation | ||
Loss contingencies | ||
Accrued loss contingency reserve | $ 43,000,000 | |
Insurance receivables | $ 11,000,000 | |
Number of years remediation payments expected to be paid for applicable sites | 20 years | |
Environmental Matters - Regulatory Activities | ||
Loss contingencies | ||
Number of years after phase-out decision in May 2000 that the Company stopped manufacturing and using vast majority of perfluorooctanyl compounds | 2 years | |
Amount of PFOA in drinking water allowed per provisional health advisories in grams per liter | g / l | 0.00 | |
Amount of PFOS in drinking water allowed per provisional health advisories in grams per liter | g / l | 0.00 | |
Number of PFCs the EPA has required to have public water system suppliers monitor | item | 6 | |
Number of public water supplies the EPA reported results | item | 4,764 | |
Number of water supplies that reported above advisory level with PFOA | item | 0 | |
Number of water supplies that reported above advisory level with PFOS | item | 17 | |
Environmental Matters - Regulatory Activities | Alabama | ||
Loss contingencies | ||
Number of years covered by permit for sludge containing PFCs | 20 years | |
Environmental Matters - Litigation | ||
Loss contingencies | ||
Number of local water works for whom the water authority supplies water | item | 5 | |
Environmental Matters - Litigation | Morgan County, Alabama | ||
Loss contingencies | ||
Total number of named claimants | individual | 3 | |
Environmental Matters - Litigation | Metropolitan Council, Minnesota | ||
Loss contingencies | ||
Number of wastewater treatment plants from which PFC-containing sludge and biosolids may allegedly be discharged by Metropolitan Council, low end of range | item | 1 | |
Environmental Matters - Other Environmental Litigation | ||
Loss contingencies | ||
Accrued loss contingency reserve | $ 35,000,000 | |
Insurance receivables | $ 15,000,000 | |
Number of former disposal sites with PFC present in soil and groundwater in Washington County, Minnesota | item | 2 | |
Environmental Matters - Other Environmental Litigation | Maximum | ||
Loss contingencies | ||
Number of years remediation payments expected to be paid for applicable sites | 4 years |
Commitments and Contingencie100
Commitments and Contingencies (Details) £ in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2009USD ($) | Jun. 30, 2003GBP (£) | Dec. 31, 2015USD ($)lease | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Primary Capital Leases | |||||
Capital lease obligation | $ 54 | ||||
Minimum lease payments under capital leases | |||||
2,016 | 11 | ||||
2,017 | 6 | ||||
2,018 | 4 | ||||
2,019 | 3 | ||||
2,020 | 3 | ||||
After 2,020 | 32 | ||||
Total | 59 | ||||
Less: Amounts representing interest | 5 | ||||
Less: Current obligations under capital leases | 8 | ||||
Long-term obligations under capital leases | 46 | $ 59 | |||
Minimum lease payments under operating leases | |||||
2,016 | 234 | ||||
2,017 | 191 | ||||
2,018 | 134 | ||||
2,019 | 86 | ||||
2,020 | 72 | ||||
After 2,020 | 226 | ||||
Total | 943 | ||||
Warranties/Guarantees: | |||||
Accrued product warranty liabilities | 28 | 30 | |||
Unconditional Purchase Obligations | |||||
Due in 2016 | 193 | ||||
Due in 2017 | 160 | ||||
Due in 2018 | 102 | ||||
Due in 2019 | 54 | ||||
Due in 2020 | 56 | ||||
Due after 2020 | 31 | ||||
Total unconditional purchase obligation commitment | 596 | ||||
Capital and Operating Leases: | |||||
Rental expense under operating leases | $ 316 | 332 | $ 330 | ||
Number of primary capital leases | lease | 3 | ||||
Capital and operating leases with non-cancelable terms, low end of range | 1 year | ||||
Building in United Kingdom | |||||
Primary Capital Leases | |||||
Capital lease term (in years) | 22 years | ||||
Capital lease obligation | £ 33.5 | $ 50 | |||
IT Investment | |||||
Primary Capital Leases | |||||
Capital lease term (in years) | 7 years | ||||
Capital lease obligation | $ 50 | ||||
City of Nevada, MO leaseback capital lease obligation | |||||
Primary Capital Leases | |||||
Capital lease obligation | $ 15 |
Commitments and Contingencie101
Commitments and Contingencies - Commercial Litigation (Details) - Commercial Litigation - TransWeb Corporation $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($)patentclaim | |
Loss contingencies | |
Number of counts jury did not rule in favor of Transweb | claim | 1 |
Number of 3M patents unenforceable due to inequitable conduct | patent | 2 |
Potential loss due to judgment against 3M | $ | $ 26 |
Commitments and Contingencie102
Commitments and Contingencies - Product Liability (Details) - 12 months ended Dec. 31, 2015 € in Millions | EUR (€)caselawsuititem | USD ($) |
Product Liability - Filters | ||
Product Liability Litigation | ||
Number of lawsuits filed | case | 2 | |
Number of customers who obtained an order in the French Courts against 3M Purification SAS | item | 1 | |
Number of other customers the Company has resolved claims with | item | 2 | |
Product Liability Litigation - EDF | ||
Product Liability Litigation | ||
Number of lawsuits filed | lawsuit | 1 | |
Amount of potential damages (minimum) EDF incurred as stated by court appointed expert witness | € | € 100 | |
Product Liability Litigation - EDF | Maximum | ||
Product Liability Litigation | ||
Estimated time commercial court may take to render decision | 1 year | |
Product Liability Litigation - EDF | Minimum | ||
Product Liability Litigation | ||
Estimated time commercial court may take to render decision | 6 years | |
Product liability - Bair Hugger | ||
Product Liability Litigation | ||
Number of lawsuits filed | lawsuit | 122 | |
Accrued loss contingency reserve | $ | $ 0 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 12 Months Ended | |||
Dec. 31, 2015individualshares | Dec. 31, 2014shares | Dec. 31, 2013shares | May. 31, 2012shares | |
Share-based Compensation Arrangement by Share-based Payment Award Activity | ||||
Number of participants with outstanding options, restricted stock, or restricted stock units | individual | 9,200 | |||
Retirement age eligibility for employees | 55 years | |||
Retirement eligibility for employees, minimum years of service required | 5 years | |||
Percent of stock-based compensation related to retiree-eligible population (as a percent) | 35.00% | |||
General Employees' Stock Purchase Plan (GESPP) | ||||
Share-based Compensation Arrangement by Share-based Payment Award Activity | ||||
Number of shares authorized | 60,000,000 | |||
Number of shares available for grant under the 2008 Long Term Incentive Plan Program (including additional subsequent shareholder approvals) | 28,104,335 | 29,112,004 | 30,185,960 | |
Long Term Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award Activity | ||||
Number of shares authorized | 100,000,000 | |||
Awards other than options and Stock Appreciation Rights, number of shares counted for every one share awarded under plan limit with grant dates prior to May 11, 2010 | 3.38 | |||
Awards other than options and Stock Appreciation Rights, number of shares counted for every one share awarded under plan limit with grant dates on or after May 11, 2010 and prior to May 8, 2012 | 2.87 | |||
Awards other than options and Stock Appreciation Rights, number of shares counted for every one share awarded under plan limit with grant dates of May 8, 2012, or later | 3.50 | |||
Number of shares available for grant under the 2008 Long Term Incentive Plan Program (including additional subsequent shareholder approvals) | 20,328,681 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Amounts recognized in the financial statements | |||
Stock-based compensation programs expense | $ 276 | $ 280 | $ 240 |
Income tax benefits | (87) | (79) | (71) |
Stock-based compensation expenses, net of tax | 189 | 201 | 169 |
Cost of sales | |||
Amounts recognized in the financial statements | |||
Stock-based compensation programs expense | 46 | 47 | 27 |
Selling, general and administrative expenses | |||
Amounts recognized in the financial statements | |||
Stock-based compensation programs expense | 185 | 192 | 183 |
Research, development and related expenses | |||
Amounts recognized in the financial statements | |||
Stock-based compensation programs expense | $ 45 | $ 41 | $ 30 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Option Program | |||
Allocated Share Based Compensation Expense | $ 276 | $ 280 | $ 240 |
Stock Options | |||
Stock Option Program | |||
Balance at the beginning of the period | 39,235,557 | 43,938,778 | 56,565,030 |
Granted - Annual | 5,529,544 | 5,736,183 | 6,220,810 |
Granted - Progressive (Reload) | 140,447 | ||
Granted - Other | 191 | ||
Exercised | (5,978,382) | (10,219,261) | (18,825,218) |
Canceled | (234,274) | (220,143) | (162,482) |
Balance at the end of the period | 38,552,445 | 39,235,557 | 43,938,778 |
Options exercisable | 27,262,062 | 27,502,208 | 32,038,228 |
Options exercisable, exercise price | $ 85.97 | $ 81.42 | $ 79.58 |
Weighted average exercise price - Beginning balance | 90.38 | 83.84 | 80.33 |
Weighted average exercise price - Granted - Annual | 165.91 | 126.77 | 101.55 |
Weighted average exercise price - Granted - Progressive (Reload) | 109.83 | ||
Weighted average exercise price - Granted - Other | 119.62 | ||
Weighted average exercise price - Exercised | 83.74 | 82.37 | 79.25 |
Weighted average exercise price - Canceled | 128.99 | 105.11 | 89.92 |
Weighted average exercise price - Ending balance | $ 102.01 | $ 90.38 | $ 83.84 |
Weighted average remaining contractual life for options outstanding | 66 months | ||
Weighted average remaining contractual life for options exercisable | 52 months | ||
Aggregate intrinsic value for options outstanding | $ 1,958 | ||
Aggregate intrinsic value for options exercisable | $ 1,763 | ||
Expiration of annual grants | 10 years | ||
Compensation expense yet to be recognized | $ 69 | ||
Expense recognition period | 21 months | ||
Total intrinsic value of stock options exercised | $ 465 | $ 615 | $ 562 |
Cash received from options exercised | 501 | 842 | 1,492 |
Tax benefit realized from exercise of stock options | $ 172 | $ 226 | $ 208 |
Stock Options | Maximum | |||
Stock Option Program | |||
Vesting period | 3 years | ||
Stock Options | Minimum | |||
Stock Option Program | |||
Vesting period | 1 year | ||
Stock Options | Annual Stock Option Program | |||
Share- based compensation assumptions | |||
Weighted average exercise price | $ 165.94 | $ 126.72 | $ 101.49 |
Risk-free interest rate (as a percent) | 1.50% | 1.90% | 1.20% |
Dividend yield (as a percent) | 2.50% | 2.60% | 2.70% |
Expected volatility (as a percent) | 20.10% | 20.80% | 20.00% |
Expected life | 76 months | 75 months | 75 months |
Black-Scholes fair value | $ 23.98 | $ 19.63 | $ 13.46 |
Stock Options | Progressive (Reload) | |||
Share- based compensation assumptions | |||
Weighted average exercise price | $ 109.84 | ||
Risk-free interest rate (as a percent) | 0.20% | ||
Dividend yield (as a percent) | 2.70% | ||
Expected volatility (as a percent) | 16.30% | ||
Expected life | 12 months | ||
Black-Scholes fair value | $ 6.42 | ||
General Employees' Stock Purchase Plan (GESPP) | |||
Stock Option Program | |||
Granted - Annual | 1,007,669 | 1,073,956 | 1,259,247 |
Exercised | (1,007,669) | (1,073,956) | (1,259,247) |
Weighted average exercise price - Granted - Annual | $ 133.52 | $ 118.73 | $ 93.46 |
Weighted average exercise price - Exercised | $ 133.52 | $ 118.73 | $ 93.46 |
Allocated Share Based Compensation Expense | $ 24 | $ 22 | $ 21 |
Share- based compensation assumptions | |||
Black-Scholes fair value | $ 23.56 | $ 20.95 | $ 16.49 |
Option price, percentage of market value at date of grant | 85.00% | ||
Option price, discount from market value at date of grant | 15.00% |
Stock-Based Compensation - RSU,
Stock-Based Compensation - RSU, RS, Performance Shares (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restricted Stock Units and Restricted Stock | |||
Unit and Shares Activity: | |||
Number of Awards - Nonvested - Beginning balance | 2,817,786 | 3,105,361 | 3,261,562 |
Number of Awards - Granted - Annual | 671,204 | 798,615 | 946,774 |
Number of Awards - Granted - Other | 26,886 | 78,252 | 44,401 |
Number of Awards - Vested | (1,010,612) | (1,100,675) | (1,100,095) |
Number of Awards - Forfeited | (64,176) | (63,767) | (47,281) |
Number of Awards - Nonvested - Ending balance | 2,441,088 | 2,817,786 | 3,105,361 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures | |||
Weighted Average Grant Date Fair Value - Nonvested - Beginning balance | $ 104.41 | $ 92.31 | $ 85.17 |
Weighted Average Grant Date Fair Value - Granted - Annual | 165.86 | 126.79 | 101.57 |
Weighted Average Grant Date Fair Value - Granted - Other | 156.94 | 152.74 | 111.19 |
Weighted Average Grant Date Fair Value - Vested | 89.99 | 90.37 | 79.93 |
Weighted Average Grant Date Fair Value - Forfeited | 118.99 | 97.23 | 90.82 |
Weighted Average Grant Date Fair Value - Nonvested - Ending balance | $ 127.47 | $ 104.41 | $ 92.31 |
Compensation expense yet to be recognized | $ 84,000,000 | ||
Expense recognition period | 24 months | ||
Fair value that vested | $ 166,000,000 | $ 145,000,000 | $ 114,000,000 |
Tax benefit realized from vesting | $ 62,000,000 | $ 54,000,000 | $ 43,000,000 |
Vesting or performance period | 3 years | ||
Value of dividend equivalents for restricted stock units that are forfeited | $ 0 | ||
Impact on basic earnings per share due to restricted stock units dividends | $ 0 | ||
Performance Shares | |||
Unit and Shares Activity: | |||
Number of Awards - Nonvested - Beginning balance | 1,099,752 | 895,635 | 1,089,084 |
Number of Awards - Granted - Annual | 227,798 | 305,225 | 353,734 |
Number of Awards - Vested | (323,938) | (277,358) | (507,083) |
Number of Awards - Performance Change | (106,760) | 212,461 | (6,949) |
Number of Awards - Forfeited | (25,660) | (36,212) | (33,151) |
Number of Awards - Nonvested - Ending balance | 871,192 | 1,099,752 | 895,635 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures | |||
Weighted Average Grant Date Fair Value - Nonvested - Beginning balance | $ 102.65 | $ 88.12 | $ 79.27 |
Weighted Average Grant Date Fair Value - Granted - Annual | 158.88 | 124.89 | 96.87 |
Weighted Average Grant Date Fair Value - Vested | 83.08 | 84.74 | 75.16 |
Weighted Average Grant Date Fair Value - Performance Change | 127.70 | 109.74 | 77.01 |
Weighted Average Grant Date Fair Value - Forfeited | 125.33 | 109.44 | 91.34 |
Weighted Average Grant Date Fair Value - Nonvested - Ending balance | $ 120.89 | $ 102.65 | $ 88.12 |
Compensation expense yet to be recognized | $ 17,000,000 | ||
Expense recognition period | 10 months | ||
Fair value that vested | $ 54,000,000 | $ 35,000,000 | $ 52,000,000 |
Tax benefit realized from vesting | $ 15,000,000 | $ 11,000,000 | $ 16,000,000 |
Vesting or performance period | 3 years | ||
Performance Shares | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures | |||
Expense recognition period | 3 years | ||
Number of shares to be delivered based on percent of each performance share granted upon satisfaction of performance conditions | 200.00% | ||
Performance Shares | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures | |||
Expense recognition period | 1 year | ||
Number of shares to be delivered based on percent of each performance share granted upon satisfaction of performance conditions | 0.00% |
Business Segments (Details)
Business Segments (Details) | 12 Months Ended |
Dec. 31, 2015segment | |
Business Segments | |
Number of business segments | 5 |
Business Segments - Segment inf
Business Segments - Segment information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Segment Information | |||||||||||
Net sales | $ 7,298 | $ 7,712 | $ 7,686 | $ 7,578 | $ 7,719 | $ 8,137 | $ 8,134 | $ 7,831 | $ 30,274 | $ 31,821 | $ 30,871 |
Operating Income | 6,946 | 7,135 | 6,666 | ||||||||
Assets | 32,718 | 31,209 | 32,718 | 31,209 | 33,304 | ||||||
Depreciation and amortization | 1,435 | 1,408 | 1,371 | ||||||||
Capital expenditures | 1,461 | 1,493 | 1,665 | ||||||||
Business Segments. | Industrial | |||||||||||
Business Segment Information | |||||||||||
Net sales | 10,328 | 10,990 | 10,657 | ||||||||
Operating Income | 2,263 | 2,389 | 2,307 | ||||||||
Assets | 9,203 | 8,508 | 9,203 | 8,508 | 8,833 | ||||||
Depreciation and amortization | 374 | 383 | 373 | ||||||||
Capital expenditures | 317 | 395 | 511 | ||||||||
Business Segments. | Safety and Graphics | |||||||||||
Business Segment Information | |||||||||||
Net sales | 5,515 | 5,732 | 5,584 | ||||||||
Operating Income | 1,305 | 1,296 | 1,227 | ||||||||
Assets | 7,564 | 4,939 | 7,564 | 4,939 | 5,122 | ||||||
Depreciation and amortization | 245 | 234 | 255 | ||||||||
Capital expenditures | 199 | 221 | 207 | ||||||||
Business Segments. | Health Care | |||||||||||
Business Segment Information | |||||||||||
Net sales | 5,420 | 5,572 | 5,334 | ||||||||
Operating Income | 1,724 | 1,724 | 1,672 | ||||||||
Assets | 4,403 | 4,344 | 4,403 | 4,344 | 4,329 | ||||||
Depreciation and amortization | 179 | 181 | 171 | ||||||||
Capital expenditures | 168 | 169 | 120 | ||||||||
Business Segments. | Electronics and Energy | |||||||||||
Business Segment Information | |||||||||||
Net sales | 5,220 | 5,604 | 5,393 | ||||||||
Operating Income | 1,102 | 1,115 | 954 | ||||||||
Assets | 4,815 | 5,116 | 4,815 | 5,116 | 5,336 | ||||||
Depreciation and amortization | 291 | 271 | 260 | ||||||||
Capital expenditures | 211 | 232 | 261 | ||||||||
Business Segments. | Consumer | |||||||||||
Business Segment Information | |||||||||||
Net sales | 4,422 | 4,523 | 4,435 | ||||||||
Operating Income | 1,046 | 995 | 945 | ||||||||
Assets | 2,393 | 2,434 | 2,393 | 2,434 | 2,516 | ||||||
Depreciation and amortization | 108 | 108 | 106 | ||||||||
Capital expenditures | 124 | 111 | 128 | ||||||||
Corporate and Unallocated | |||||||||||
Business Segment Information | |||||||||||
Net sales | 1 | 4 | 8 | ||||||||
Operating Income | (355) | (251) | (321) | ||||||||
Assets | $ 4,340 | $ 5,868 | 4,340 | 5,868 | 7,168 | ||||||
Depreciation and amortization | 238 | 231 | 206 | ||||||||
Capital expenditures | 442 | 365 | 438 | ||||||||
Elimination of Dual Credit | |||||||||||
Business Segment Information | |||||||||||
Net sales | (632) | (604) | (540) | ||||||||
Operating Income | $ (139) | $ (133) | $ (118) |
Geographic Areas (Details)
Geographic Areas (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net Sales, Operating Income and Property, Plant and Equipment - Net | |||||||||||
Net sales | $ 7,298 | $ 7,712 | $ 7,686 | $ 7,578 | $ 7,719 | $ 8,137 | $ 8,134 | $ 7,831 | $ 30,274 | $ 31,821 | $ 30,871 |
Operating Income (Loss) | 6,946 | 7,135 | 6,666 | ||||||||
Property, Plant and Equipment - net | 8,515 | 8,489 | 8,515 | 8,489 | |||||||
China/Hong Kong | |||||||||||
Net Sales, Operating Income and Property, Plant and Equipment - Net | |||||||||||
Net sales | 2,945 | ||||||||||
Property, Plant and Equipment - net | 584 | $ 584 | |||||||||
Percent of consolidated worldwide sales | 10.00% | ||||||||||
Geographic Area | United States | |||||||||||
Net Sales, Operating Income and Property, Plant and Equipment - Net | |||||||||||
Net sales | $ 12,049 | 11,714 | 11,151 | ||||||||
Operating Income (Loss) | 2,647 | 2,540 | 2,210 | ||||||||
Property, Plant and Equipment - net | 4,838 | 4,619 | 4,838 | 4,619 | |||||||
Geographic Area | Asia Pacific | |||||||||||
Net Sales, Operating Income and Property, Plant and Equipment - Net | |||||||||||
Net sales | 9,041 | 9,418 | 9,047 | ||||||||
Operating Income (Loss) | 2,580 | 2,487 | 2,386 | ||||||||
Property, Plant and Equipment - net | 1,647 | 1,798 | 1,647 | 1,798 | |||||||
Geographic Area | Europe, Middle East and Africa | |||||||||||
Net Sales, Operating Income and Property, Plant and Equipment - Net | |||||||||||
Net sales | 6,228 | 7,198 | 7,085 | ||||||||
Operating Income (Loss) | 1,017 | 1,234 | 1,168 | ||||||||
Property, Plant and Equipment - net | 1,531 | 1,502 | 1,531 | 1,502 | |||||||
Geographic Area | Latin America and Canada | |||||||||||
Net Sales, Operating Income and Property, Plant and Equipment - Net | |||||||||||
Net sales | 2,982 | 3,504 | 3,611 | ||||||||
Operating Income (Loss) | 706 | 867 | 908 | ||||||||
Property, Plant and Equipment - net | $ 499 | $ 570 | 499 | 570 | |||||||
Other Unallocated | |||||||||||
Net Sales, Operating Income and Property, Plant and Equipment - Net | |||||||||||
Net sales | (26) | (13) | (23) | ||||||||
Operating Income (Loss) | $ (4) | $ 7 | $ (6) |
Quarterly Data (Unaudited) (Det
Quarterly Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Data (Unaudited) | |||||||||||
Net sales | $ 7,298 | $ 7,712 | $ 7,686 | $ 7,578 | $ 7,719 | $ 8,137 | $ 8,134 | $ 7,831 | $ 30,274 | $ 31,821 | $ 30,871 |
Cost of sales | 3,827 | 3,877 | 3,858 | 3,821 | 4,027 | 4,205 | 4,184 | 4,031 | 15,383 | 16,447 | 16,106 |
Net income including noncontrolling interest | 1,039 | 1,298 | 1,303 | 1,201 | 1,179 | 1,311 | 1,283 | 1,225 | 4,841 | 4,998 | 4,721 |
Net income attributable to 3M | $ 1,038 | $ 1,296 | $ 1,300 | $ 1,199 | $ 1,179 | $ 1,303 | $ 1,267 | $ 1,207 | $ 4,833 | $ 4,956 | $ 4,659 |
Earnings per share attributable to 3M common shareholders - basic (in dollars per share) | $ 1.69 | $ 2.09 | $ 2.06 | $ 1.88 | $ 1.85 | $ 2.02 | $ 1.94 | $ 1.83 | $ 7.72 | $ 7.63 | $ 6.83 |
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share) | 1.66 | $ 2.05 | $ 2.02 | $ 1.85 | $ 1.81 | $ 1.98 | $ 1.91 | $ 1.79 | $ 7.58 | $ 7.49 | $ 6.72 |
Impact on diluted earnings per share related to restructuring actions | $ 0.14 |