Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2019shares | |
Entity Registrant Name | 3M CO |
Entity Central Index Key | 0000066740 |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Sep. 30, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 1-3285 |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 41-0417775 |
Entity Address, Address Line One | 3M Center |
Entity Address, City or Town | St. Paul |
Entity Address, State or Province | MN |
Entity Address, Postal Zip Code | 55144-1000 |
City Area Code | 651 |
Local Phone Number | 733-1110 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 575,050,655 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q3 |
Common Stock | New York Stock Exchange, Inc. | |
Title of 12(b) Security | Common Stock, Par Value $.01 Per Share |
Trading Symbol | MMM |
Security Exchange Name | NYSE |
Common Stock | Chicago Stock Exchange, Inc. | |
Title of 12(b) Security | Common Stock, Par Value $.01 Per Share |
Trading Symbol | MMM |
Security Exchange Name | CHX |
1.500% Notes due 2026 | New York Stock Exchange, Inc. | |
Title of 12(b) Security | 1.500% Notes due 2026 |
Trading Symbol | MMM26 |
Security Exchange Name | NYSE |
Floating Rate Notes due 2020 | New York Stock Exchange, Inc. | |
Title of 12(b) Security | Floating Rate Notes due 2020 |
No Trading Symbol Flag | true |
0.375% Notes due 2022 | New York Stock Exchange, Inc. | |
Title of 12(b) Security | 0.375% Notes due 2022 |
Trading Symbol | MMM22A |
Security Exchange Name | NYSE |
0.950% Notes due 2023 | New York Stock Exchange, Inc. | |
Title of 12(b) Security | 0.950% Notes due 2023 |
Trading Symbol | MMM23 |
Security Exchange Name | NYSE |
1.750% Notes due 2030 | New York Stock Exchange, Inc. | |
Title of 12(b) Security | 1.750% Notes due 2030 |
Trading Symbol | MMM30 |
Security Exchange Name | NYSE |
1.500% Notes due 2031 | New York Stock Exchange, Inc. | |
Title of 12(b) Security | 1.500% Notes due 2031 |
Trading Symbol | MMM31 |
Security Exchange Name | NYSE |
Consolidated Statement of Incom
Consolidated Statement of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Consolidated Statement of Income | ||||
Net sales | $ 7,991 | $ 8,152 | $ 24,025 | $ 24,820 |
Operating expenses | ||||
Cost of sales | 4,188 | 4,159 | 12,811 | 12,622 |
Selling, general and administrative expenses | 1,455 | 1,547 | 5,089 | 5,920 |
Research, development and related expenses | 443 | 430 | 1,390 | 1,384 |
Gain on sale of businesses | (106) | (114) | (530) | |
Total operating expenses | 5,980 | 6,136 | 19,176 | 19,396 |
Operating income | 2,011 | 2,016 | 4,849 | 5,424 |
Interest expense and income | ||||
Other expense (income), net | 45 | 51 | 349 | 144 |
Income before income taxes | 1,966 | 1,965 | 4,500 | 5,280 |
Provision for income taxes | 378 | 419 | 888 | 1,266 |
Net income including noncontrolling interest | 1,588 | 1,546 | 3,612 | 4,014 |
Less: Net income attributable to noncontrolling interest | 5 | 3 | 11 | 12 |
Net income attributable to 3M | $ 1,583 | $ 1,543 | $ 3,601 | $ 4,002 |
Weighted average 3M common shares outstanding - basic (in shares) | 576.5 | 585.6 | 577.2 | 591.1 |
Earnings per share attributable to 3M common shareholders - basic (in dollars per share) | $ 2.75 | $ 2.64 | $ 6.24 | $ 6.77 |
Weighted average 3M common shares outstanding - diluted (in shares) | 583 | 598.4 | 585.9 | 605.1 |
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share) | $ 2.72 | $ 2.58 | $ 6.15 | $ 6.61 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Consolidated Statement of Comprehensive Income | ||||
Net income including noncontrolling interest | $ 1,588 | $ 1,546 | $ 3,612 | $ 4,014 |
Other comprehensive income (loss), net of tax: | ||||
Cumulative translation adjustment | (202) | (112) | (2) | (441) |
Defined benefit pension and postretirement plans adjustment | 76 | 114 | 356 | 344 |
Cash flow hedging instruments | 8 | 46 | (24) | 147 |
Total other comprehensive income (loss), net of tax | (118) | 48 | 330 | 50 |
Comprehensive income (loss) including noncontrolling interest | 1,470 | 1,594 | 3,942 | 4,064 |
Comprehensive (income) loss attributable to noncontrolling interest | (3) | (10) | (4) | |
Comprehensive income (loss) attributable to 3M | $ 1,467 | $ 1,594 | $ 3,932 | $ 4,060 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 7,731 | $ 2,853 |
Marketable securities - current | 30 | 380 |
Accounts receivable - net | 5,020 | 5,020 |
Inventories | ||
Finished goods | 1,890 | 2,120 |
Work in process | 1,231 | 1,292 |
Raw materials and supplies | 886 | 954 |
Total inventories | 4,007 | 4,366 |
Prepaids | 717 | 741 |
Other current assets | 515 | 349 |
Total current assets | 18,020 | 13,709 |
Property, plant and equipment | 25,508 | 24,873 |
Less: Accumulated depreciation | (16,617) | (16,135) |
Property, plant and equipment - net | 8,891 | 8,738 |
Operating lease right of use assets | 834 | |
Goodwill | 10,410 | 10,051 |
Intangible assets - net | 2,847 | 2,657 |
Other assets | 1,548 | 1,345 |
Total assets | 42,550 | 36,500 |
Current liabilities | ||
Short-term borrowings and current portion of long-term debt | 1,960 | 1,211 |
Accounts payable | 2,079 | 2,266 |
Accrued payroll | 669 | 749 |
Accrued income taxes | 137 | 243 |
Operating lease liabilities - current | 241 | |
Other current liabilities | 2,735 | 2,775 |
Total current liabilities | 7,821 | 7,244 |
Long-term debt | 17,479 | 13,411 |
Pension and postretirement benefits | 2,667 | 2,987 |
Operating lease liabilities | 584 | |
Other liabilities | 3,235 | 3,010 |
Total liabilities | 31,786 | 26,652 |
Commitments and contingencies (Note 14) | ||
3M Company shareholders' equity: | ||
Common stock par value, $.01 par value; 944,033,056 shares issued | 9 | 9 |
Additional paid-in capital | 5,861 | 5,643 |
Retained earnings | 42,085 | 40,636 |
Treasury stock, at cost: 368,982,401 shares at September 30, 2019; 367,457,888 shares at December 31, 2018 | (29,865) | (29,626) |
Accumulated other comprehensive income (loss) | (7,388) | (6,866) |
Total 3M Company shareholders' equity | 10,702 | 9,796 |
Noncontrolling interest | 62 | 52 |
Total equity | 10,764 | 9,848 |
Total liabilities and equity | $ 42,550 | $ 36,500 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheet | ||
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) | 368,982,401 | 367,457,888 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows from Operating Activities | ||
Net income including noncontrolling interest | $ 3,612 | $ 4,014 |
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities | ||
Depreciation and amortization | 1,130 | 1,117 |
Company pension and postretirement contributions | (129) | (303) |
Company pension and postretirement expense | 242 | 306 |
Stock-based compensation expense | 230 | 258 |
Gain on sale of businesses | (111) | (530) |
Deferred income taxes | (88) | (73) |
Loss on deconsolidation of Venezuelan subsidiary | 162 | |
Changes in assets and liabilities | ||
Accounts receivable | (14) | (596) |
Inventories | 255 | (562) |
Accounts payable | (222) | 148 |
Accrued income taxes (current and long-term) | (53) | 122 |
Other - net | (282) | 280 |
Net cash provided by (used in) operating activities | 4,732 | 4,181 |
Cash Flows from Investing Activities | ||
Purchases of property, plant and equipment (PP&E) | (1,161) | (1,046) |
Proceeds from sale of PP&E and other assets | 91 | 143 |
Acquisitions, net of cash acquired | (704) | 13 |
Purchases of marketable securities and investments | (917) | (1,352) |
Proceeds from maturities and sale of marketable securities and investments | 1,265 | 2,066 |
Proceeds from sale of businesses, net of cash sold | 236 | 806 |
Other - net | 45 | 8 |
Net cash provided by (used in) investing activities | (1,145) | 638 |
Cash Flows from Financing Activities | ||
Change in short-term debt - net | (466) | (698) |
Repayment of debt (maturities greater than 90 days) | (871) | (456) |
Proceeds from debt (maturities greater than 90 days) | 6,116 | 2,247 |
Purchases of treasury stock | (1,243) | (3,601) |
Proceeds from issuance of treasury stock pursuant to stock option and benefit plans | 437 | 401 |
Dividends paid to shareholders | (2,488) | (2,406) |
Other - net | (158) | (36) |
Net cash provided by (used in) financing activities | 1,327 | (4,549) |
Effect of exchange rate changes on cash and cash equivalents | (36) | (138) |
Net increase (decrease) in cash and cash equivalents | 4,878 | 132 |
Cash and cash equivalents at beginning of year | 2,853 | 3,053 |
Cash and cash equivalents at end of period | $ 7,731 | $ 3,185 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Significant Accounting Policies | |
Significant Accounting Policies | 3M Company and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) NOTE 1. Significant Accounting Policies Basis of Presentation The interim consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of the Company’s consolidated financial position, results of operations and cash flows for the periods presented. These adjustments consist of normal, recurring items. The results of operations for any interim period are not necessarily indicative of results for the full year. The interim consolidated financial statements and notes are presented as permitted by the requirements for Quarterly Reports on Form 10-Q. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and notes included in its Annual Report on Form 10-K. As described in Note 17, effective in the second quarter of 2019, the Company realigned its former five business segments into four to enable the Company to better serve global customers and markets. In addition, certain product lines were moved to better align with their respective end customers. Earlier in the first quarter of 2019, the Company changed its business segment reporting in its continuing effort to improve the alignment of businesses around markets and customers. These changes included the realignment of certain customer account activity in various countries (affecting dual credit reporting), creation of the Closure and Masking Systems and Medical Solutions divisions, and certain other actions that impacted segment reporting. Segment information presented herein reflects the impact of these changes for all periods presented. Changes to Significant Accounting Policies The following significant accounting policies have been added or changed since the Company’s 2018 Annual Report on Form 10-K. Leases: Leases Income Taxes Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income 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. 3M has a subsidiary in Venezuela, the financial statements of which were remeasured as if its functional currency were that of its parent because Venezuela’s economic environment is considered highly inflationary. The operating income of this subsidiary was immaterial as a percent of 3M’s consolidated operating income for 2018. The Venezuelan government sets official rates of exchange and conditions precedent to purchase foreign currency at these rates with local currency. The government has also operated various expanded secondary currency exchange mechanisms that have been eliminated and replaced from time to time. Such rates and conditions have been and continue to be subject to change. During the third quarter of 2018, the Venezuelan government effected a conversion of its currency to the Sovereign Bolivar (VES), essentially equating to its previous Venezuelan Bolivar divided by 100,000. For the periods presented through May 2019, the financial statements of 3M’s Venezuelan subsidiary were remeasured utilizing the rate associated with the secondary auction mechanism, Tipo de Cambio Complementario (DICOM), or its predecessor. Note 1 in 3M’s 2018 Annual Report on Form 10-K provides additional information the Company considers in determining the exchange rate used relative to its Venezuelan subsidiary as well as factors which could lead to its deconsolidation. As described therein, a need to deconsolidate the Company’s Venezuelan subsidiary’s operations results from a lack of exchangeability of VES-denominated cash coupled with an acute degradation in the ability to make key operational decisions due to government regulations in Venezuela. 3M continued to review changes in these underlying factors such as the 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. In light of circumstances, including the country’s unstable environment and heightened unrest leading to sustained lack of demand, and expectation that these circumstances will continue for the foreseeable future, during May 2019, 3M concluded it no longer met the criteria of control in order to continue consolidating its Venezuelan operations. As a result, as of 3M has subsidiaries in Argentina, the operating income of which was less than one half of one percent of 3M’s consolidated operating income for 2018. Based on various indices, Argentina’s cumulative three-year inflation rate exceeded 100 percent in the second quarter of 2018, thus being considered highly inflationary. As a result, beginning in the third quarter of 2018, the financial statements of the Argentine subsidiaries were remeasured as if their functional currency were that of their parent. As of September 30, 2019, the Company had a balance of net monetary assets denominated in Argentine pesos (ARS) of approximately 430 million ARS and the exchange rate was approximately 57 ARS per U.S. dollar. 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 a result of the dilution associated with the Company’s stock-based compensation plans. Certain options outstanding under these stock-based compensation plans were not included in the computation of diluted earnings per share attributable to 3M common shareholders because they would have had an anti-dilutive effect (11.9 million average options for the three months ended September 30, 2019; 8.0 million average options for the nine months ended September 30, 2019; 3.2 million average options for the three months ended September 30, 2018; 2.8 million average options for the nine months ended September 30, 2018). The computations for basic and diluted earnings per share follow: Earnings Per Share Computations Three months ended Nine months ended September 30, September 30, (Amounts in millions, except per share amounts) 2019 2018 2019 2018 Numerator: Net income attributable to 3M $ 1,583 $ 1,543 $ 3,601 $ 4,002 Denominator: Denominator for weighted average 3M common shares outstanding – 576.5 585.6 577.2 591.1 Dilution associated with the Company’s stock-based compensation plans 6.5 12.8 8.7 14.0 Denominator for weighted average 3M common shares outstanding – 583.0 598.4 585.9 605.1 Earnings per share attributable to 3M common shareholders – $ 2.75 $ 2.64 $ 6.24 $ 6.77 Earnings per share attributable to 3M common shareholders – $ 2.72 $ 2.58 $ 6.15 $ 6.61 New Accounting Pronouncements See the Company’s 2018 Annual Report on Form 10-K for a more detailed discussion of the standards in the tables that follow, except for those pronouncements issued subsequent to the most recent Form 10-K filing date for which separate, more detailed discussion is provided below as applicable. Standards Adopted During the Current Fiscal Year Standard Relevant Description Effective Date for 3M Impact and Other Matters ASU No. 2016-02, Leases Provides a lessee model that requires entities to recognize assets and liabilities for most leases, but recognize expenses on their income statements in a manner similar to previous accounting. This ASU does not make fundamental changes to previous lessor accounting. January 1, 2019 See Note 15 for detailed discussion and disclosures. Adopted using the modified retrospective approach Impact on January 1, 2019 includes a $14 million increase in the balance of retained earnings and recording of additional lease assets and liabilities of $0.8 billion each ASU No. 2017-08 , Premium Amortization on Purchased Callable Debt Securities Shortens the amortization period to the earliest call date for the premium related to certain callable debt securities that have explicit, noncontingent call features and are callable at a fixed price and preset date. January 1, 2019 3M’s marketable security portfolio includes limited instances of callable debt securities held at a premium. The adoption of this ASU did not have a material impact. ASU No. 2017-11, (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception Amends (1) the classification of financial instruments with down-round features as liabilities or equity by revising certain guidance relative to evaluating if they must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of freestanding equity-classified instruments. January 1, 2019 No financial instruments with down-round features have been issued. The adoption of this ASU did not have a material impact. ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities Amends previous guidance to simplify application of hedge accounting in certain situations and allow companies to better align their hedge accounting with risk management activities. Simplifies related accounting by eliminating requirement to separately measure and report hedge ineffectiveness. Expands an entity’s ability to hedge nonfinancial and financial risk components. January 1, 2019 See Note 12 for additional details. The adoption of this ASU did not have a material impact ASU No. 2018-02 , Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Permits entities to reclassify, to retained earnings, the one-time income tax effects stranded in accumulated other comprehensive income arising from the change in the U.S. federal corporate tax rate as a result of the Tax Cuts and Jobs Act of 2017. January 1, 2019 See Note 8 for additional discussion. Impact on January 1, 2019 includes increases of $0.9 billion in each of retained earnings and accumulated other comprehensive loss. See also the preceding “Changes to Significant Accounting Policies” section. ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting Aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees. Clarifies that any share-based payment issued to a customer should be evaluated under ASC 606, Revenue from Contracts with Customers January 1, 2019 The adoption of this ASU did not have a material impact as 3M does not issue share-based payments to nonemployees or customers Standards Adopted During the Current Fiscal Year (continued) Standard Relevant Description Effective Date for 3M Impact and Other Matters ASU No. 2018-08, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made Clarifies that a contribution is conditional if the arrangement includes both a barrier for the recipient to be entitled to the assets transferred and a right of return for the assets transferred. Recognition of contribution expense is deferred for conditional arrangements and is immediate for unconditional arrangements. January 1, 2019 Adopted prospectively with no immediate impact. ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities Changes how entities evaluate decision-making fees under the variable interest guidance. Indirect interests held through related parties under common control will be considered on a proportionate basis rather than in their entirety. January 1, 2019 Adoption of this ASU did not have a material impact as 3M does not have significant involvement with entities subject to consolidation considerations impacted by variable interest entity model factors. ASU No. 2018-18, Clarifying the Interaction between Topic 808 and Topic 606 Clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606, Revenue from Contracts with Customers Precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. January 1, 2019 Adoption of this ASU did not have a material impact as 3M has limited collaborative arrangements. ASU No. 2017-09, Scope of Modification Accounting ● Provides that fewer changes to the terms of share-based payment awards will require accounting under the modification model (which generally would have required additional compensation cost). January 1, 2018 ● Adopted prospectively with no immediate impact. ● 3M does not typically make changes to the terms or conditions of its issued share-based payments. Standards Issued and Not Yet Adopted Standard Relevant Description Effective Date for 3M Impact and Other Matters ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments Introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. Amends the current other-than-temporary impairment model for available-for-sale debt securities. For such securities with unrealized losses, entities will still consider if a portion of any impairment is related only to credit losses and therefore recognized as a reduction in income. January 1, 2020 Required to make a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. 3M continues to evaluate this ASU’s impact on its consolidated results of operations and financial condition. Based on the analysis completed to date and due to the nature and extent of 3M’s financial instruments in scope for this ASU (primarily accounts receivable) and the historical, current and expected credit quality of its customers, 3M does not expect this ASU to have a material impact on its consolidated results of operations and financial condition. See the “Relevant New Standards Issued Subsequent to Most Recent Annual Report” below for further discussion on ASU No. 2019-04 and 2019-05 issued in April 2019 and May 2019, respectively. ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement Eliminates, amends, and adds disclosure requirements for fair value measurements, primarily related to Level 3 fair value measurements. January 1, 2020 As this ASU relates to disclosures only, there will be no impact to 3M’s consolidated results of operations and financial condition. ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service arrangement (i.e. hosting arrangement) with the guidance on capitalizing costs in ASC 350-40, Internal-Use Software January 1, 2020 ASU permits either prospective or retrospective transition. As 3M utilizes limited cloud-computing services where significant implementation costs are incurred, the Company does not expect this ASU to have a material impact. Relevant New Standards Issued Subsequent to Most Recent Annual Report In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 – Financial Instruments Targeted Transition Relief to Topic 326, Financial Instruments – Credit Losses. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue | |
Revenue | NOTE 2. Revenue Contract Balances: Deferred revenue (current portion) as of September 30, 2019 and December 31, 2018 was $605 million and $617 million, respectively, and primarily relates to revenue that is recognized over time for one-year software license contracts, the changes in balance of which are related to the satisfaction or partial satisfaction of these contracts. The balance also contains a deferral for goods that are in-transit at period end for which control transfers to the customer upon delivery. Approximately $80 million and $560 million of the December 31, 2018 balance was recognized as revenue during the three and nine months ended September 30, 2019, respectively, while approximately $70 million and $460 million of the December 31, 2017 balance was recognized as revenue during the the three and nine months ended September 30, 2018, respectively. The amount of noncurrent deferred revenue is not significant. Disaggregated revenue information: The Company views the following disaggregated disclosures as useful to understanding the composition of revenue recognized during the respective reporting periods: Three months ended Nine months ended September 30, September 30, Net Sales (Millions) 2019 2018 2019 2018 Abrasives $ 345 $ 362 $ 1,079 $ 1,171 Adhesives and Tapes 696 734 2,075 2,191 Automotive Aftermarket 310 334 929 1,038 Closure and Masking Systems 282 300 835 920 Communication Markets — 8 — 169 Electrical Markets 298 315 911 949 Personal Safety 813 864 2,656 2,745 Roofing Granules 101 83 293 283 Other Safety and Industrial 4 21 18 76 Total Safety and Industrial Business Segment $ 2,849 $ 3,021 $ 8,796 $ 9,542 Advanced Materials $ 319 $ 313 $ 961 $ 932 Automotive and Aerospace 485 509 1,486 1,610 Commercial Solutions 437 436 1,361 1,415 Electronics 1,001 1,101 2,759 2,951 Transportation Safety 261 260 745 758 Other Transportation and Electronics — — — (1) Total Transportation and Electronics Business Segment $ 2,503 $ 2,619 $ 7,312 $ 7,665 Drug Delivery $ 99 $ 102 $ 301 $ 340 Food Safety 86 82 254 246 Health Information Systems 296 208 853 618 Medical Solutions 737 732 2,294 2,273 Oral Care 312 317 991 1,013 Separation and Purification Sciences 191 203 602 631 Other Health Care — (1) (5) (3) Total Health Care Business Group $ 1,721 $ 1,643 $ 5,290 $ 5,118 Consumer Health Care $ 97 $ 97 $ 297 $ 300 Home Care 242 249 747 773 Home Improvement 612 579 1,739 1,694 Stationery and Office 361 367 1,006 1,022 Other Consumer 12 10 32 30 Total Consumer Business Group $ 1,324 $ 1,302 $ 3,821 $ 3,819 Corporate and Unallocated $ 28 $ 35 $ 98 $ 47 Elimination of Dual Credit (434) (468) (1,292) (1,371) Total Company $ 7,991 $ 8,152 $ 24,025 $ 24,820 Three months ended September 30, 2019 Net Sales (Millions) United States Asia Pacific Europe, Middle East and Africa Latin America and Canada Other Unallocated Worldwide Safety and Industrial $ 1,153 $ 713 $ 626 $ 356 $ 1 $ 2,849 Transportation and Electronics 594 1,390 363 157 (1) 2,503 Health Care 827 360 388 145 1 1,721 Consumer 843 233 136 112 — 1,324 Corporate and Unallocated 25 1 1 1 — 28 Elimination of Dual Credit (150) (207) (49) (27) (1) (434) Total Company $ 3,292 $ 2,490 $ 1,465 $ 744 $ — $ 7,991 Nine months ended September 30, 2019 Net Sales (Millions) United States Asia Pacific Europe, Middle East and Africa Latin America and Canada Other Unallocated Worldwide Safety and Industrial $ 3,498 $ 2,190 $ 2,035 $ 1,073 $ — $ 8,796 Transportation and Electronics 1,796 3,917 1,138 463 (2) 7,312 Health Care 2,477 1,121 1,253 438 1 5,290 Consumer 2,342 745 413 321 — 3,821 Corporate and Unallocated 91 1 1 6 (1) 98 Elimination of Dual Credit (462) (591) (158) (81) — (1,292) Total Company $ 9,742 $ 7,383 $ 4,682 $ 2,220 $ (2) $ 24,025 Three months ended September 30, 2018 Net Sales (Millions) United States Asia Pacific Europe, Middle East and Africa Latin America and Canada Other Unallocated Worldwide Safety and Industrial $ 1,208 $ 788 $ 665 $ 361 $ (1) $ 3,021 Transportation and Electronics 627 1,464 378 149 1 2,619 Health Care 740 357 399 146 1 1,643 Consumer 818 237 137 110 — 1,302 Corporate and Unallocated 36 — — — (1) 35 Elimination of Dual Credit (164) (225) (52) (25) (2) (468) Total Company $ 3,265 $ 2,621 $ 1,527 $ 741 $ (2) $ 8,152 Nine months ended September 30, 2018 Net Sales (Millions) United States Asia Pacific Europe, Middle East and Africa Latin America and Canada Other Unallocated Worldwide Safety and Industrial $ 3,726 $ 2,397 $ 2,296 $ 1,126 $ (3) $ 9,542 Transportation and Electronics 1,838 4,151 1,218 458 — 7,665 Health Care 2,248 1,114 1,303 453 — 5,118 Consumer 2,273 778 438 330 — 3,819 Corporate and Unallocated 43 — — 3 1 47 Elimination of Dual Credit (471) (639) (178) (81) (2) (1,371) Total Company $ 9,657 $ 7,801 $ 5,077 $ 2,289 $ (4) $ 24,820 |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Sep. 30, 2019 | |
Acquisitions and Divestitures | |
Acquisitions and Divestitures | NOTE 3. 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. 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. 2019 Acquisition Activity Finite-Lived Intangible-Asset (Millions) Weighted-Average Asset (Liability) M*Modal Lives (Years) Accounts receivable $ 77 Other current assets 2 Property, plant, and equipment 8 Purchased finite-lived intangible assets: Customer related intangible assets 275 14 Other technology-based intangible assets 160 6 Definite-lived tradenames 11 6 Purchased goodwill 508 Other assets 59 Accounts payable and other liabilities (124) Interest bearing debt (251) Deferred tax asset/(liability) (21) Net assets acquired $ 704 Supplemental information: Cash paid $ 708 Less: Cash acquired 4 Cash paid, net of cash acquired $ 704 Purchased identifiable finite-lived intangible assets related to acquisitions which closed in the nine months ended September 30, 2019 totaled $446 million. The associated finite-lived intangible assets acquired will be amortized on a systematic and rational basis (generally straight line) over a weighted-average life of 11 years (lives ranging from 6 to 14 years ). In February 2019, 3M completed the acquisition of the technology business of M*Modal for $0.7 billion of cash, net of cash acquired, and assumption of $0.3 billion of M*Modal’s debt. Based in Pittsburgh, Pennsylvania, M*Modal is a leading healthcare technology provider of cloud-based, conversational artificial intelligence-powered systems that help physicians efficiently capture and improve the patient narrative. The allocation of purchase consideration related to M*Modal is considered preliminary with provisional amounts primarily related to certain tax-related and contingent liability amounts. 3M expects to finalize the allocation of purchase price within the one-year measurement-period following the acquisition. Net sales and operating loss (inclusive of transaction and integration costs) of this business included in 3M’s consolidated results of operations for the third quarter of 2019 were approximately $75 million and $5 million, respectively. Net sales and operating loss (inclusive of transaction and integration costs) of this business included in 3M’s consolidated results of operations for the first nine months of 2019 were approximately $200 million and $40 million, respectively. Proforma information related to the acquisition has not been included as the impact on the Company’s consolidated results of operations was not considered material. In October 2019, 3M completed the acquisition of Acelity Inc. and its KCI subsidiaries for cash of approximately $4.5 billion, subject to closing and other adjustments, and assumption of $2.5 billion of debt and related items (see also Note 10). Acelity is a leading global medical technology company focused on advanced wound care and specialty surgical applications marketed under the KCI brand. This transaction will be reflected within the Company’s Health Care business. Due to the limited amount of time since the October acquisition date and the limitations on access to Acelity information prior to the acquisition date, the preliminary allocation of purchase consideration is incomplete at this time. As a result, the Company is unable to provide the amounts recognized as of the acquisition date for the major classes of assets acquired and liabilities assumed, including the information required for valuation of intangible assets and goodwill. There were no acquisitions that closed during the nine months ended September 30, 2018. 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. 2019 divestitures: During the first quarter of 2019, the Company sold certain oral care technology comprising a business and reflected an earnout on a previous divestiture resulting in an aggregate immaterial gain. In August 2019, 3M closed on the sale of its gas and flame detection business, a leader in fixed and portable gas and flame detection, to Teledyne Technologies Incorporated. This business has annual sales of approximately $120 million. The transaction resulted in a pre-tax gain of $112 million that was reported within the Company’s Safety and Industrial business. In August 2019, 3M entered into an agreement with Avon Rubber p.l.c. to purchase 3M’s advanced ballistic-protection business for $91 million, subject to closing and other adjustments, plus contingent considerations of up to $25 million depending on the outcome of pending tenders. The business, with annual sales of approximately $85 million, consists of ballistic helmets, body armor, flat armor and related helmet-attachment products serving government and law enforcement. The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to be completed in late 2019 or early 2020. The Company reflected an immaterial impact in the third quarter of 2019 within the Transportation and Electronics business as a result of measuring this disposal group at the lower of its carrying amount or fair value less cost to sell. 2018 divestitures: During 2018, as described in Note 3 in 3M’s 2018 Annual Report on Form 10-K, the Company divested a number of businesses including: certain personal safety product offerings primarily focused on noise, environmental and heat stress monitoring; a polymer additives compounding business; an abrasives glass products business; and substantially all of its Communication Markets Division. Operating income and held for sale amounts: The aggregate operating income of these businesses was approximately $30 million and immaterial in the first nine months of 2018 and 2019, respectively. The approximate amounts of major assets and liabilities associated with disposal groups classified as held-for-sale as of December 31, 2018 were not material and as of September 30, 2019 included the following: September 30, (Millions) 2019 Inventory $ 25 Property, plant and equipment 10 Intangible assets 35 In addition, approximately $10 million of goodwill was estimated to be attributable to disposal groups classified as held-for-sale as of September 30, 2019, based upon relative fair value. The amounts above have not been segregated and are classified within the existing corresponding line items on the Company’s consolidated balance sheet. Refer to Note 3 in 3M’s 2018 Annual Report on Form 10-K for more information on 3M’s acquisitions and divestitures. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | NOTE 4. Goodwill and Intangible Assets Goodwill from acquisitions totaled $508 million during the first nine months of 2019. The amounts in the “Translation and other” row in the following table primarily relate to changes in foreign currency exchange rates. The goodwill balance by business segment as of December 31, 2018 and September 30, 2019, follow: Goodwill (Millions) Safety and Industrial Transportation and Electronics Health Care Consumer Total Company Balance as of December 31, 2018 4,716 1,857 3,248 230 10,051 Acquisition activity — — 508 — 508 Divestiture activity (49) — — — (49) Translation and other (51) (27) (53) 31 (100) Balance as of September 30, 2019 $ 4,616 $ 1,830 $ 3,703 $ 261 $ 10,410 Accounting standards require that goodwill be tested for impairment annually and between annual tests in certain circumstances such as a change in reporting units or the testing of recoverability of a significant asset group within a reporting unit. At 3M, reporting units correspond to a division. As described in Note 17, effective in the second quarter of 2019, the Company realigned its former five business segments into four to enable the Company to better serve global customers and markets. In addition, effective in the first quarter of 2019, the Company changed its business segment reporting in its continuing effort to improve the alignment of its businesses around markets and customers. For any product changes 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 first and second quarters of 2019, the Company completed its assessment of any potential goodwill impairment for reporting units impacted by this new structure and determined that no impairment existed. Acquired Intangible Assets The carrying amount and accumulated amortization of acquired finite-lived intangible assets, in addition to the balance of non-amortizable intangible assets, as of September 30, 2019, and December 31, 2018, follow: September 30, December 31, (Millions) 2019 2018 Customer related intangible assets $ 2,525 $ 2,291 Patents 536 542 Other technology-based intangible assets 727 576 Definite-lived tradenames 673 664 Other amortizable intangible assets 122 125 Total gross carrying amount $ 4,583 $ 4,198 Accumulated amortization — customer related (1,107) (998) Accumulated amortization — patents (493) (487) Accumulated amortization — other technology-based (382) (333) Accumulated amortization — definite-lived tradenames (300) (276) Accumulated amortization — other (89) (88) Total accumulated amortization $ (2,371) $ (2,182) Total finite-lived intangible assets — net $ 2,212 $ 2,016 Non-amortizable intangible assets (primarily tradenames) 635 641 Total intangible assets — net $ 2,847 $ 2,657 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 three and nine months ended September 30, 2019 and 2018 follows: Three months ended Nine months ended September 30, September 30, (Millions) 2019 2018 2019 2018 Amortization expense $ 69 $ 61 $ 208 $ 188 Expected amortization expense for acquired amortizable intangible assets recorded as of September 30, 2019: Remainder of After (Millions) 2019 2020 2021 2022 2023 2024 2024 Amortization expense $ 69 $ 264 $ 256 $ 242 $ 213 $ 183 $ 950 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. The table above excludes the impact of the carrying value of finite-lived intangible assets associated with disposal groups classified as held-for-sale at September 30, 2019. See Note 3 for additional details. 3M expenses the costs incurred to renew or extend the term of intangible assets. |
Restructuring Actions and Exit
Restructuring Actions and Exit Activities | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring Actions and Exit Activities | |
Restructuring Actions and Exit Activities | NOTE 5. Restructuring Actions and Exit Activities 2019 Restructuring Actions: During the second quarter of 2019, in light of a slower than expected 2019 sales, management approved and committed to undertake certain restructuring actions. These actions impacted approximately 2,000 positions worldwide, including attrition. The Company recorded a second quarter 2019 pre-tax charge of $148 million. The restructuring charges were recorded in the income statement as follows: (Millions) Second Quarter 2019 Cost of sales $ 18 Selling, general and administrative expenses 89 Research, development and related expenses 5 Total operating income impact 112 Other expense (income), net 36 Total income before taxes impact $ 148 The operating income impact of these restructuring charges are summarized by business segment as follows: Second Quarter 2019 (Millions) Employee-Related Asset-Related Total Safety and Industrial $ 11 $ — $ 11 Transportation and Electronics 8 — 8 Health Care 6 — 6 Consumer 5 — 5 Corporate and Unallocated 42 40 82 Total Operating Expense $ 72 $ 40 $ 112 The 2019 actions included a voluntary early retirement incentive (further discussed in Note 11), the charge for which is included in other expense (income), net above. Restructuring actions, including cash and non-cash impacts, follow: (Millions) Employee-Related Asset-Related Total Expense incurred in the second quarter of 2019 $ 108 $ 40 $ 148 Non-cash changes (36) (40) (76) Cash payments (41) — (41) Adjustments (14) — (14) Accrued restructuring action balances as of September 30, 2019 $ 17 $ — $ 17 Remaining activities related to this restructuring are expected to be completed largely through the first quarter of 2020. 2018 Restructuring Actions: During the second quarter and fourth quarter of 2018, management approved and committed to undertake certain restructuring actions related to addressing corporate functional costs following the Communication Markets Division divestiture. These actions affected approximately 1,200 positions worldwide and resulted in a second quarter 2018 pre-tax charge of $105 million and a fourth quarter pre-tax charge of $22 million, net of adjustments for reductions in cost estimates of $10 million, essentially all within Corporate and Unallocated. The restructuring charges were recorded in the income statement as follows: (Millions) Second Quarter 2018 Fourth Quarter 2018 Cost of sales $ 12 $ 15 Selling, general and administrative expenses 89 16 Research, development and related expenses 4 1 Total $ 105 $ 32 Restructuring actions, including cash and non-cash impacts, follow: (Millions) Employee-Related Asset-Related Total Expense incurred in the second quarter and fourth quarter of 2018 $ 125 $ 12 $ 137 Non-cash changes — (12) (12) Cash payments (24) — (24) Adjustments (17) — (17) Accrued restructuring action balances as of December 31, 2018 $ 84 $ — $ 84 Cash payments (68) — (68) Adjustments (3) — (3) Accrued restructuring action balances as of September 30, 2019 $ 13 $ — $ 13 Remaining activities related to this restructuring are expected to be largely completed through 2019. |
Supplemental Income Statement I
Supplemental Income Statement Information | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Income Statement Information | |
Supplemental Income Statement Information | NOTE 6. Supplemental Income Statement Information Other expense (income), net consists of the following: Three months ended Nine months ended September 30, September 30, (Millions) 2019 2018 2019 2018 Interest expense $ 109 $ 85 $ 324 $ 255 Interest income (26) (15) (64) (52) Pension and postretirement net periodic benefit cost (benefit) (38) (19) (73) (59) Loss on deconsolidation of Venezuelan subsidiary — — 162 — Total $ 45 $ 51 $ 349 $ 144 Pension and postretirement net periodic benefit costs described in the table above include all components of defined benefit plan net periodic benefit costs except service cost, which is reported in various operating expense lines. Pension and postretirement net periodic benefit costs for the nine months ended September 30, 2019 include a second quarter charge related to the voluntary early retirement incentive program announced in May 2019. Refer to Note 11 for additional details on the voluntary early retirement incentive program in addition to the components of pension and postretirement net periodic benefit costs. In the second quarter of 2019, the Company incurred a charge of $162 million related to the deconsolidation of its Venezuelan subsidiary. Refer to Note 1 for additional details. |
Supplemental Equity and Compreh
Supplemental Equity and Comprehensive Income Information | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Equity and Comprehensive Income Information | |
Supplemental Equity and Comprehensive Income Information | NOTE 7. Supplemental Equity and Comprehensive Income Information Cash dividends declared and paid totaled $1.44 and $1.36 per share for the first, second and third quarters 2019 and 2018, respectively, or $4.32 and $4.08 per share for the first nine months of 2019 and 2018, respectively. Consolidated Changes in Equity Three months ended September 30, 2019 3M Company Shareholders Common Accumulated Stock and Other Additional Comprehensive Non- Paid-in Retained Treasury Income controlling (Millions) Total Capital Earnings Stock (Loss) Interest Balance at June 30, 2019 $ 10,142 $ 5,821 $ 41,362 $ (29,828) $ (7,272) $ 59 Net income 1,588 1,583 5 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (202) (200) (2) Defined benefit pension and post-retirement plans adjustment 76 76 — Cash flow hedging instruments 8 8 — Total other comprehensive income (loss), net of tax (118) Dividends declared (828) (828) Stock-based compensation 49 49 Reacquired stock (141) (141) Issuances pursuant to stock option and benefit plans 72 (32) 104 Balance at September 30, 2019 $ 10,764 $ 5,870 $ 42,085 $ (29,865) $ (7,388) $ 62 Nine Months Ended September 30, 2019 3M Company Shareholders Common Accumulated Stock and Other Additional Comprehensive Non- Paid-in Retained Treasury Income controlling (Millions) Total Capital Earnings Stock (Loss) Interest Balance at December 31, 2018 $ 9,848 $ 5,652 $ 40,636 $ (29,626) $ (6,866) $ 52 Impact of adoption of ASU No. 2018-02 (See Note 1) — 853 (853) Impact of adoption of ASU No. 2016-02 (See Note 1) 14 14 Net income 3,612 3,601 11 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (2) (1) (1) Defined benefit pension and post-retirement plans adjustment 356 356 — Cash flow hedging instruments (24) (24) — Total other comprehensive income (loss), net of tax 330 Dividends declared (2,488) (2,488) Stock-based compensation 218 218 Reacquired stock (1,211) (1,211) Issuances pursuant to stock option and benefit plans 441 (531) 972 Balance at September 30, 2019 $ 10,764 $ 5,870 $ 42,085 $ (29,865) $ (7,388) $ 62 Three months ended September 30, 2018 3M Company Shareholders Common Accumulated Stock and Other Additional Comprehensive Non- Paid-in Retained Treasury Income controlling (Millions) Total Capital Earnings Stock (Loss) Interest Balance at June 30, 2018 $ 10,428 $ 5,559 $ 39,442 $ (27,617) $ (7,019) $ 63 Net income 1,546 1,543 3 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (112) (109) (3) Defined benefit pension and post-retirement plans adjustment 114 114 — Cash flow hedging instruments 46 46 — Total other comprehensive income (loss), net of tax 48 Dividends declared (794) (794) Stock-based compensation 47 47 Reacquired stock (1,058) (1,058) Issuances pursuant to stock option and benefit plans 94 (71) 165 Balance at September 30, 2018 $ 10,311 $ 5,606 $ 40,120 $ (28,510) $ (6,968) $ 63 Nine months ended September 30, 2018 3M Company Shareholders Common Accumulated Stock and Other Additional Comprehensive Non- Paid-in Retained Treasury Income controlling (Millions) Total Capital Earnings Stock (Loss) Interest Balance at December 31, 2017 $ 11,622 $ 5,361 $ 39,115 $ (25,887) $ (7,026) $ 59 Net income 4,014 4,002 12 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (441) (433) (8) Defined benefit pension and post-retirement plans adjustment 344 344 — Cash flow hedging instruments 147 147 — Total other comprehensive income (loss), net of tax 50 Dividends declared (2,406) (2,406) Stock-based compensation 245 245 Reacquired stock (3,621) (3,621) Issuances pursuant to stock option and benefit plans 407 (591) 998 Balance at September 30, 2018 $ 10,311 $ 5,606 $ 40,120 $ (28,510) $ (6,968) $ 63 Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M by Component Three months ended September 30, 2019 Total Defined Benefit Cash Flow Accumulated Pension and Hedging Other Cumulative Postretirement Instruments, Comprehensive Translation Plans Unrealized Income (Millions) Adjustment Adjustment Gain (Loss) (Loss) Balance at June 30, 2019, net of tax: $ (1,912) $ (5,369) $ 9 $ (7,272) Other comprehensive income (loss), before tax: Amounts before reclassifications (149) — 31 (118) Amounts reclassified out — 101 (21) 80 Total other comprehensive income (loss), before tax (149) 101 10 (38) Tax effect (51) (25) (2) (78) Total other comprehensive income (loss), net of tax (200) 76 8 (116) Balance at September 30, 2019, net of tax: $ (2,112) $ (5,293) $ 17 $ (7,388) Nine months ended September 30, 2019 Total Defined Benefit Cash Flow Accumulated Pension and Hedging Other Cumulative Postretirement Instruments, Comprehensive Translation Plans Unrealized Income (Millions) Adjustment Adjustment Gain (Loss) (Loss) Balance at December 31, 2018, net of tax: $ (2,098) $ (4,832) $ 64 $ (6,866) Impact of adoption of ASU No. 2018-02 (See Note 1) (13) (817) (23) (853) Other comprehensive income (loss), before tax: Amounts before reclassifications (86) 153 14 81 Amounts reclassified out 142 310 (48) 404 Total other comprehensive income (loss), before tax 56 463 (34) 485 Tax effect (57) (107) 10 (154) Total other comprehensive income (loss), net of tax (1) 356 (24) 331 Balance at September 30, 2019, net of tax: $ (2,112) $ (5,293) $ 17 $ (7,388) Three months ended September 30, 2018 Total Defined Benefit Cash Flow Accumulated Pension and Hedging Other Cumulative Postretirement Instruments, Comprehensive Translation Plans Unrealized Income (Millions) Adjustment Adjustment Gain (Loss) (Loss) Balance at June 30, 2018, net of tax: $ (1,962) $ (5,046) $ (11) $ (7,019) Other comprehensive income (loss), before tax: Amounts before reclassifications (110) — 22 (88) Amounts reclassified out — 150 37 187 Total other comprehensive income (loss), before tax (110) 150 59 99 Tax effect 1 (36) (13) (48) Total other comprehensive income (loss), net of tax (109) 114 46 51 Balance at September 30, 2018, net of tax: $ (2,071) $ (4,932) $ 35 $ (6,968) Nine months ended September 30, 2018 Total Defined Benefit Cash Flow Accumulated Pension and Hedging Other Cumulative Postretirement Instruments, Comprehensive Translation Plans Unrealized Income (Millions) Adjustment Adjustment Gain (Loss) (Loss) Balance at December 31, 2017, net of tax: $ (1,638) $ (5,276) $ (112) $ (7,026) Other comprehensive income (loss), before tax: Amounts before reclassifications (392) — 122 (270) Amounts reclassified out — 452 99 551 Total other comprehensive income (loss), before tax (392) 452 221 281 Tax effect (41) (108) (74) (223) Total other comprehensive income (loss), net of tax (433) 344 147 58 Balance at September 30, 2018, net of tax $ (2,071) $ (4,932) $ 35 $ (6,968) 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 subsequently recorded as part of net income. Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M Amount Reclassified from Details about Accumulated Other Accumulated Other Comprehensive Income Comprehensive Income Components Three months ended September 30, Nine months ended September 30, Location on Income (Millions) 2019 2018 2019 2018 Statement Cumulative translation adjustment Deconsolidation of Venezuelan subsidiary $ — $ — $ (142) $ — Other income (expense), net Total before tax — — (142) — Tax effect — — — — Provision for income taxes Net of tax $ — $ — $ (142) $ — Defined benefit pension and postretirement plans adjustments Gains (losses) associated with defined benefit pension and postretirement plans amortization Prior service benefit $ 18 $ 20 $ 50 $ 58 See Note 11 Net actuarial loss (119) (170) (358) (510) See Note 11 Deconsolidation of Venezuelan subsidiary — — (2) — Other income (expense), net Total before tax (101) (150) (310) (452) Tax effect 25 36 70 108 Provision for income taxes Net of tax $ (76) $ (114) $ (240) $ (344) Cash flow hedging instruments gains (losses) Foreign currency forward/option contracts $ 22 $ (37) $ 50 $ (98) Cost of sales Interest rate swap contracts (1) — (2) (1) Interest expense Total before tax 21 (37) 48 (99) Tax effect (4) 8 (9) 22 Provision for income taxes Net of tax $ 17 $ (29) $ 39 $ (77) Total reclassifications for the period, net of tax $ (59) $ (143) $ (343) $ (421) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes. | |
Income Taxes | NOTE 8. Income Taxes The IRS has completed its field examination of the Company’s U.S. federal income tax returns for the years 2005 to 2014, and 2016. The Company is in the process of resolving open issues identified during those examinations. The Company remains under examination by the IRS for its U.S. federal income tax returns for the years 2015, 2017 and 2018. In addition to the U.S. federal examination, there is also audit activity in several U.S. state and foreign jurisdictions. As of September 30, 2019, no taxing authority has proposed significant adjustments to the Company’s tax positions for which the Company is not adequately reserved. It is reasonably possible that the amount of unrecognized tax benefits could significantly change within the next 12 months. At this time, the Company is not able to estimate the range by which these potential events could impact 3M’s unrecognized tax benefits in the next 12 months. The total amounts of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of September 30, 2019 and December 31, 2018 are $736 million and $655 million, respectively. As of September 30, 2019 and December 31, 2018, the Company had valuation allowances of $70 million and $67 million on its deferred tax assets, respectively. The effective tax rate for the third quarter of 2019 was 19.3 percent, compared to 21.3 percent in the third quarter of 2018, a decrease of 2.0 percentage points. Primary factors that decreased the Company’s effective tax rate included adjustments related to impacts of U.S. international tax provisions, geographical income mix, and increased benefits from the R&D tax credit. These decreases were partially offset by the tax related to the divestiture of the Company’s gas and flame detection business and decreased benefit from stock options. The effective tax rate for the first nine months of 2019 was 19.7 percent, compared to 24.0 percent in the first nine months of 2018, a decrease of 4.3 percentage points. Primary factors that decreased the Company’s effective tax rate included significant events such as prior year measurement period adjustments related to 2017 Tax Cuts and Jobs Act (TCJA), prior year resolution of the NRD lawsuit (as described in Note 14), geographical income mix, and increased benefits from the R&D tax credit. These decreases were partially offset by the deconsolidation of the Venezuelan subsidiary and adjustments to uncertain tax positions. In addition, the effective tax rate decreased due to the divestiture of the Company’s gas and flame detection business. The Tax Cuts and Jobs Act (TCJA) was enacted in December 2017, after which the SEC staff issued Staff Accounting Bulletin 118, which provided a measurement period of up to one year from the TCJA’s enactment date for companies to complete their accounting under ASC 740. During the first quarter of 2018, 3M recognized a measurement period adjustment resulting in an additional tax expense of $217 million to its provisional accounting. Refer to Note 10 in 3M’s 2018 Annual Report on Form 10-K for more information on the impact of TCJA. The Company adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2019 | |
Marketable Securities. | |
Marketable Securities | NOTE 9. Marketable Securities The Company invests in asset-backed securities, certificates of deposit/time deposits, commercial paper, and other securities. The following is a summary of amounts recorded on the Consolidated Balance Sheet for marketable securities (current and non-current). (Millions) September 30, 2019 December 31, 2018 Commercial paper $ — $ 366 Certificates of deposit/time deposits 27 10 U.S. municipal securities 3 3 Asset-backed securities — 1 Current marketable securities $ 30 $ 380 U.S. municipal securities $ 46 $ 37 Non-current marketable securities $ 46 $ 37 Total marketable securities $ 76 $ 417 At September 30, 2019 and December 31, 2018, gross unrealized, gross realized, and net realized gains and/or losses (pre-tax) were not material. The balances at September 30, 2019 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) September 30, 2019 Due in one year or less $ 30 Due after one year through five years 13 Due after five years through ten years 24 Due after ten years 9 Total marketable securities $ 76 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 | 9 Months Ended |
Sep. 30, 2019 | |
Long-Term Debt and Short-Term Borrowings | |
Long-Term Debt and Short-Term Borrowings | NOTE 10. Long-Term Debt and Short-Term Borrowings In February 2019, 3M issued $2.25 billion aggregate principal amount of fixed rate medium-term notes. These were comprised of $450 million of 3-year notes due 2022 with a coupon rate of 2.75%, $500 million of remaining 5-year notes due 2024 with a coupon rate of 3.25%, $800 million of 10-year notes due 2029 with a coupon rate of 3.375%, and $500 million of remaining 29.5-year notes due 2048 with a coupon rate of 4.00%. Issuances of the 5-year and 29.5-year notes were pursuant to a reopening of existing securities issued in September 2018. In August 2019, 3M issued $3.25 billion aggregate principal amount of fixed rate registered notes. These were comprised of $500 million of 3.5-year notes due 2023 with a coupon rate of 1.75%, $750 million of 5.5-year notes due 2025 with a coupon rate of 2.00%, $1.0 billion of 10-year notes due 2029 with a coupon rate of 2.375%, and $1.0 billion of 30-year notes due 2049 with a coupon rate of 3.25%. In September 2019, 3M entered into a credit facility expiring in July 2020 in the amount of 80 billion Japanese yen. At September 30, 2019, 69 billion Japanese yen, or approximately $640 million at September 30, 2019 exchange rates, was drawn and outstanding. In conjunction with the October 2019 acquisition of Acelity (see Note 3), 3M assumed outstanding debt of the business, of which $445 million in principal amount of third lien senior secured notes (Third Lien Notes) maturing in 2021 with a coupon rate of 12.5% was not immediately redeemed at closing. Instead, at closing, 3M satisfied and discharged the Third Lien Notes via an in-substance defeasance, whereby 3M transferred cash equivalents and marketable securities to a trust with irrevocable instructions to redeem the Third Lien Notes on May 1, 2020. The trust assets are restricted from use in 3M’s operations and may only be used for the redemption of the Third Lien Notes. These actions, however, do not represent a legal defeasance. Therefore, following the acquisition of Acelity, this debt will be included in current portion of long-term debt and the related trust assets will be included in current assets on the Company’s consolidated balance sheet. As of September 30, 2019, the Company had no commercial paper outstanding, compared to $435 million in commercial paper outstanding as of December 31, 2018. In June 2019, 3M repaid $625 million aggregate principal amount of fixed-rate medium-term notes that matured. Future Maturities of Long-term Debt Maturities of long-term debt in the table below reflect the impact of put provisions associated with certain debt instruments and are net of the unaccreted debt issue costs such that total maturities equal the carrying value of long-term debt as of September 30, 2019. The maturities of long-term debt for the periods subsequent to September 30, 2019 are as follows (in millions): Remainder of After 2019 2020 2021 2022 2023 2024 2024 Total $ 105 $ 1,305 $ 1,671 $ 1,591 $ 1,796 $ 1,101 $ 11,225 $ 18,794 |
Pension and Postretirement Bene
Pension and Postretirement Benefit Plans | 9 Months Ended |
Sep. 30, 2019 | |
Pension and Postretirement Benefit Plans | |
Pension and Postretirement Benefit Plans | NOTE 11. Pension and Postretirement Benefit Plans The service cost component of defined benefit net periodic benefit cost is recorded in cost of sales, selling, general and administrative expenses, and research, development and related expenses. The other components of net periodic benefit cost are reflected in other expense (income), net. Components of net periodic benefit cost and other supplemental information for the the three and nine months ended September 30, 2019 and 2018 follow: Benefit Plan Information Three months ended September 30, Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2019 2018 2019 2018 2019 2018 Net periodic benefit cost (benefit) Operating expense Service cost $ 63 $ 72 $ 32 $ 37 $ 10 $ 13 Non-operating expense Interest cost $ 155 $ 141 $ 40 $ 40 $ 20 $ 20 Expected return on plan assets (260) (272) (75) (78) (20) (21) Amortization of prior service benefit (6) (6) (3) (4) (9) (10) Amortization of net actuarial loss 91 126 20 29 8 15 Total non-operating expense (benefit) (20) (11) (18) (13) (1) 4 Total net periodic benefit cost (benefit) $ 43 $ 61 $ 14 $ 24 $ 9 $ 17 Nine months ended September 30, Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2019 2018 2019 2018 2019 2018 Net periodic benefit cost (benefit) Operating expense Service cost $ 188 $ 216 $ 98 $ 110 $ 32 $ 39 Non-operating expense Interest cost $ 466 $ 423 $ 118 $ 120 $ 62 $ 60 Expected return on plan assets (780) (816) (225) (235) (61) (63) Amortization of prior service benefit (18) (18) (9) (10) (23) (30) Amortization of net actuarial loss 274 378 59 87 25 45 Settlements, curtailments, special termination benefits and other 35 — 1 — — — Total non-operating expense (benefit) (23) (33) (56) (38) 3 12 Total net periodic benefit cost (benefit) $ 165 $ 183 $ 42 $ 72 $ 35 $ 51 For the nine months ended September 30, 2019 contributions totaling $126 million were made to the Company’s U.S. and international pension plans and $3 million to its postretirement plans. For total year 2019, the Company expects to contribute approximately $200 million of cash to its global defined benefit pension and postretirement plans. The Company does not have a required minimum cash pension contribution obligation for its U.S. plans in 2019. Future contributions will depend on market conditions, interest rates and other factors. 3M’s annual measurement date for pension and postretirement assets and liabilities is December 31 each year, which is also the date used for the related annual measurement assumptions. In May 2019 (as part of the 2019 restructuring actions discussed in Note 5), the Company began offering a voluntary early retirement incentive program to certain eligible participants of its U.S. pension plans who meet age and years of pension service requirements. The eligible participants who accepted the offer and retired by July 1, 2019 received an enhanced pension benefit. Pension benefits were enhanced by adding one additional year of pension service and one additional year of age for certain benefit calculations. Approximately 800 participants accepted the offer and retired before July 1, 2019. As a result, the Company incurred a $35 million charge related to these special termination benefits in the second quarter of 2019. In May 2019, 3M modified the 3M Retiree Life Insurance Plan postretirement benefit to close it to new participants effective August 1, 2019 (which results in employees who retire on or after August 1, 2019 not being eligible to participate in the plan) and reducing the maximum life insurance and death benefit to $8,000 for deaths on or after August 1, 2019. Due to these changes, the plan was re-measured in the second quarter of 2019, resulting in a decrease to the accumulated projected benefit obligation liability of approximately $150 million and a related increase to shareholders’ equity, specifically accumulated other comprehensive income in addition to an immaterial income statement benefit prospectively. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2019 | |
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. 3M adopted ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities Additional information with respect to derivatives is included elsewhere as follows: ● Impact on other comprehensive income of nonderivative hedging and derivative instruments is included in Note 7. ● Fair value of derivative instruments is included in Note 13. ● Derivatives and/or hedging instruments associated with the Company’s long-term debt are described in Note 12 in 3M’s 2018 Annual Report on Form 10-K. 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 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 hedge components excluded from the assessment of effectiveness are recognized in current earnings. Cash Flow Hedging - Foreign Currency Forward and Option Contracts: Cash Flow Hedging — Interest Rate Contracts: As of December 31, 2018, the Company had $700 million of notional amount in outstanding forward starting interest rate swaps as hedges against interest rate volatility with forecasted issuances of fixed rate debt. During the first nine months of 2019, the Company entered into additional forward starting interest rate swaps with a notional amount of $743 million. Concurrent with the issuance of the medium-term notes in February 2019 and the additional issuance of registered notes in August 2019, 3M terminated all outstanding interest rate swaps related to forecasted issuances of debt. These terminations resulted in a net loss of $143 million within accumulated other comprehensive income that will be amortized over the respective lives of the debt. The amortization of gains and losses on forward starting interest rate swaps is included in the tables below as part of the gain/(loss) reclassified from accumulated other comprehensive income into income. As of September 30, 2019, the Company had a balance of $17 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 $114 million (after-tax loss) related to the forward starting interest rate swaps, which will be amortized over the respective lives of the notes. Based on exchange rates as of September 30, 2019, 3M expects to reclassify approximately $69 million, $18 million, $63 million of the after-tax net unrealized foreign exchange cash flow hedging gains to earnings over the next 12 months, over the remainder of 2019, and in 2020, respectively, in addition to reclassifying approximately $64 million of the after-tax net unrealized foreign exchange cash flow hedging losses to earnings after 2020 (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 transactions. Pretax Gain (Loss) Recognized in Other Pretax Gain (Loss) Reclassified Comprehensive from Accumulated Other Income on Derivative Comprehensive Income into Income Three months ended September 30, 2019 (Millions) Amount Location Amount Foreign currency forward/option contracts $ 105 Cost of sales $ 22 Interest rate swap contracts (74) Interest expense (1) Total $ 31 $ 21 Nine months ended September 30, 2019 (Millions) Amount Location Amount Foreign currency forward/option contracts $ 137 Cost of sales $ 50 Interest rate swap contracts (123) Interest expense (2) Total $ 14 $ 48 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 Portion of Derivative Comprehensive Income Recognized in Income Three months ended September 30, 2018 (Millions) Amount Location Amount Location Amount Foreign currency forward/option contracts $ 12 Cost of sales $ (37) Cost of sales $ — Interest rate swap contracts 10 Interest expense — Interest expense — Total $ 22 $ (37) $ — Nine months ended September 30, 2018 (Millions) Amount Location Amount Location Amount Foreign currency forward/option contracts $ 112 Cost of sales $ (98) Cost of sales $ — Interest rate swap contracts 10 Interest expense (1) Interest expense — Total $ 122 $ (99) $ — 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: offset by the gain or loss of the underlying debt instrument, which also is recorded in interest expense. Additional information regarding designated interest rate swaps can be found in Note 14 in 3M’s 2018 Annual Report on Form 10-K. Refer to the section below titled Statement of Income Location and Impact of Cash Flow and Fair Value Derivative Instruments 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 for periods prior to 2019: Gain (Loss) on Derivative Gain (Loss) on Hedged Item Recognized in Income Recognized in Income Three months ended September 30, 2018 (Millions) Location Amount Location Amount Interest rate swap contracts Interest expense $ — Interest expense $ — Total $ — $ — Nine months ended September 30, 2018 (Millions) Location Amount Location Amount Interest rate swap contracts Interest expense $ (12) Interest expense $ 12 Total $ (12) $ 12 The following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges: Cumulative Amount of Fair Value Hedging Carrying Value of the Adjustment Included in the Carrying Value Hedged Liabilities (in millions) of the Hedged Liabilities (in millions) Location on the Consolidated Balance Sheet September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 Short-term borrowings and current portion of long-term debt $ 499 $ 596 $ (1) $ (4) Long-term debt 771 1,276 26 18 Total $ 1,270 $ 1,872 $ 25 $ 14 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. Amounts excluded from the assessment of hedge effectiveness, including the time value of the forward contract at the inception of the hedge, are recognized in earnings using an amortization approach over the life of the hedging instrument on a straight-line basis. Any difference between the change in the fair value of the excluded component and the amount amortized into earnings during the period is recorded in cumulative translation within other comprehensive income. 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 September 30, 2019, the total notional amount of foreign exchange forward contracts designated in net investment hedges was approximately 150 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 4.1 billion euros. The maturity dates of these derivative and nonderivative instruments designated in net investment hedges range from 2019 to 2031. 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. Pretax Gain (Loss) Recognized as Cumulative Translation Amount Excluded within Other from Effectiveness Testing Comprehensive Income Recognized in Income Three months ended September 30, 2019 (Millions) Amount Location Amount Foreign currency denominated debt $ 177 Cost of sales $ — Foreign currency forward contracts 38 Cost of sales 6 Total $ 215 $ 6 Nine months ended September 30, 2019 (Millions) Amount Location Amount Foreign currency denominated debt $ 205 Cost of sales $ — Foreign currency forward contracts 43 Cost of sales 18 Total $ 248 $ 18 Pretax Gain (Loss) Recognized as Cumulative Translation within Other Ineffective Portion of Gain (Loss) on Comprehensive Income Instrument and Amount Excluded on Effective Portion of from Effectiveness Testing Instrument Recognized in Income Three months ended September 30, 2018 (Millions) Amount Location Amount Foreign currency denominated debt $ (14) Cost of sales $ — Foreign currency forward contracts (3) Cost of sales 1 Total $ (17) $ 1 Nine months ended September 30, 2018 (Millions) Amount Location Amount Foreign currency denominated debt $ 157 Cost of sales $ (2) Foreign currency forward contracts 14 Cost of sales 1 Total $ 171 $ (1) 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 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 statement of income and amounts of gains and losses related to derivative instruments not designated as hedging instruments are as follows: Three months ended September 30, 2019 Nine months ended September 30, 2019 Gain (Loss) on Derivative Recognized in Gain (Loss) on Derivative Recognized in Income Income (Millions) Location Amount Location Amount Foreign currency forward/option contracts Cost of sales $ 6 Cost of sales $ 4 Foreign currency forward contracts Interest expense (8) Interest expense (26) Total $ (2) $ (22) Three months ended September 30, 2018 Nine months ended September 30, 2018 Gain (Loss) on Derivative Recognized in Gain (Loss) on Derivative Recognized in Income Income (Millions) Location Amount Location Amount Foreign currency forward/option contracts Cost of sales $ 11 Cost of sales $ 11 Foreign currency forward contracts Interest expense (7) Interest expense (98) Total $ 4 $ (87) Statement of Income Location and Impact of Cash Flow and Fair Value Derivative Instruments The location in the consolidated statement of income and pre-tax amounts recognized in income related to derivative instruments designated in a cash flow or fair value hedging relationship are as follows: Location and Amount of Gain (Loss) Recognized in Income Location and Amount of Gain (Loss) Recognized in Income Three months ended September 30, 2019 Nine months ended September 30, 2019 (Millions) Cost of sales Other expense Cost of Goods Sold Other expense (income), net) Total amounts of income and expense line items presented in the consolidated statement of income in which the effects of cash flow or fair value hedges are recorded $ 4,188 $ 45 $ 12,811 $ 349 The effects of fair value and cash flow hedging: Gain or (loss) on cash flow hedging relationships: Foreign currency forward/option contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income into income $ 22 $ — $ 50 $ — Interest rate swap contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income into income — (1) — (2) Gain or (loss) on fair value hedging relationships: Interest rate swap contracts: Hedged items $ — $ 1 $ — $ (11) Derivatives designated as hedging instruments — (1) — 11 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 September 30, 2019 Notional Fair Fair (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ 2,235 Other current assets $ 128 Other current liabilities $ 2 Foreign currency forward/option contracts 1,110 Other assets 70 Other liabilities 1 Interest rate swap contracts 500 Other current assets — Other current liabilities 1 Interest rate swap contracts 603 Other assets 20 Other liabilities — Total derivatives designated as hedging instruments $ 218 $ 4 Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ 1,931 Other current assets $ 9 Other current liabilities $ 10 Total derivatives not designated as hedging instruments $ 9 $ 10 Total derivative instruments $ 227 $ 14 Gross Assets Liabilities December 31, 2018 Notional Fair Fair (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ 2,277 Other current assets $ 74 Other current liabilities $ 12 Foreign currency forward/option contracts 1,099 Other assets 39 Other liabilities 4 Interest rate swap contracts 1,000 Other current assets — Other current liabilities 14 Interest rate swap contracts 1,403 Other assets 19 Other liabilities 17 Total derivatives designated as hedging instruments $ 132 $ 47 Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ 2,484 Other current assets $ 14 Other current liabilities $ 6 Total derivatives not designated as hedging instruments $ 14 $ 6 Total derivative instruments $ 146 $ 53 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 September 30, 2019, 3M has International Swaps and Derivatives Association (ISDA) agreements with 17 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 16 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 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 September 30, 2019 Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Liabilities Received Derivative Assets Derivatives subject to master netting agreements $ 227 $ 9 $ — $ 218 Derivatives not subject to master netting agreements — — Total $ 227 $ 218 December 31, 2018 (Millions) Derivatives subject to master netting agreements $ 146 $ 38 $ — $ 108 Derivatives not subject to master netting agreements — — Total $ 146 $ 108 Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties 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 September 30, 2019 Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Assets Pledged Derivative Liabilities Derivatives subject to master netting agreements $ 14 $ 9 $ — $ 5 Derivatives not subject to master netting agreements — — Total $ 14 $ 5 December 31, 2018 (Millions) Derivatives subject to master netting agreements $ 53 $ 38 $ — $ 15 Derivatives not subject to master netting agreements — — Total $ 53 $ 15 Currency Effects 3M estimates that year-on-year foreign currency transaction effects, including hedging impacts, increased pre-tax income by approximately $69 million and $190 million for the the three and nine months ended September 30, 2019. These estimates include transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 13. Fair Value Measurements 3M follows ASC 820, Fair Value Measurements and Disclosures 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: Investments Investments include equity securities that are traded in an active market. Closing stock prices are readily available from active markets and are representative of fair value. 3M classifies these securities as Level 1. Investments are included within other assets on the Company’s consolidated balance sheet. In addition to the information above, refer to Note 15 in 3M’s 2018 Annual Report on Form 10-K for a qualitative discussion of the assets and liabilities that are measured at fair value on a recurring and nonrecurring basis, a description of the valuation methodologies used by 3M, and categorization within the valuation framework of ASC 820. The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis. Fair Value Measurements Description Fair Value at Using Inputs Considered as (Millions) September 30, 2019 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: Commercial paper $ — $ — $ — $ — Certificates of deposit/time deposits 27 — 27 — U.S. municipal securities 49 — — 49 Investments 22 22 — — Derivative instruments — assets: Foreign currency forward/option contracts 207 — 207 — Interest rate swap contracts 20 — 20 — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts 13 — 13 — Interest rate swap contracts 1 — 1 — Fair Value Measurements Description Fair Value at Using Inputs Considered as (Millions) December 31, 2018 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: Commercial paper $ 366 $ — $ 366 $ — Certificates of deposit/time deposits 10 — 10 — Asset-backed securities 1 — 1 — U.S. municipal securities 40 — — 40 Derivative instruments — assets: Foreign currency forward/option contracts 127 — 127 — Interest rate swap contracts 19 — 19 — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts 22 — 22 — Interest rate swap contracts 31 — 31 — 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). Three months ended Nine months ended Marketable securities — certain U.S. municipal securities only September 30, September 30, (Millions) 2019 2018 2019 2018 Beginning balance $ 49 $ 30 $ 40 $ 30 Total gains or losses: Included in earnings — — — — Included in other comprehensive income — — — — Purchases and issuances — — 9 — Sales and settlements — — — — Transfers in and/or out of level 3 — — — — Ending balance $ 49 $ 30 $ 49 $ 30 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 13 in 3M’s 2018 Annual Report on Form 10-K. 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 and adjustment in carrying value of equity securities for which the measurement alternative of cost less impairment plus or minus observable price changes is used. There were no material long-lived asset impairments or adjustments to equity securities using the measurement alternative for the three and nine months ended September 30, 2019 and 2018. 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 equivalents, accounts receivable, accounts payable, and short-term borrowings and current portion of long-term debt 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. To estimate fair values (classified as level 2) for its long-term debt, the Company utilized third-party quotes, which are derived all or in part from model prices, external sources, market prices, or the third-party’s internal records. Information with respect to the carrying amounts and estimated fair values of these financial instruments follow: September 30, 2019 December 31, 2018 Carrying Fair Carrying Fair (Millions) Value Value Value Value Long-term debt, excluding current portion $ 17,479 $ 18,573 $ 13,411 $ 13,586 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 certain fixed rate Eurobond securities issued by the Company as hedging instruments of the Company’s net investment in its European subsidiaries. A number of 3M’s fixed-rate bonds were trading at a premium at September 30, 2019 and December 31, 2018 due to lower interest rates and tighter credit spreads compared to issuance levels. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | NOTE 14. Commitments and Contingencies 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, commercial claims and lawsuits, and environmental proceedings. Unless otherwise stated, the Company is vigorously defending all such litigation. The outcomes of legal proceedings and regulatory matters are often difficult to predict. Any determination that the Company’s operations or activities are not, or were not, in compliance with applicable laws or regulations could result in the imposition of fines, civil or criminal penalties, and equitable remedies, including disgorgement, debarment or injunctive relief. Additional information about the Company’s process for disclosure and recording of liabilities and insurance receivables related to legal proceedings can be found in Note 16 “Commitments and Contingencies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. 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 September 30, 2019, the Company is a named defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent approximately 1,770 individual claimants, compared to approximately 2,320 individual claimants with actions pending at December 31, 2018. 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, other malignancies, and black lung disease, will represent a greater percentage of total claims than in the past. Over the past twenty years, the Company has prevailed in fourteen of the fifteen cases tried to a jury (including the lawsuits in 2018 described below). In 2018, 3M received a jury verdict in its favor in two lawsuits – one in California state court in February and the other in Massachusetts state court in December – both involving allegations that 3M respirators were defective and failed to protect the plaintiffs against asbestos fibers. In April 2018, a jury in state court in Kentucky found 3M’s 8710 respirators failed to protect two coal miners from coal mine dust and awarded compensatory damages of approximately $2 million and punitive damages totaling $63 million. In August 2018, the trial court entered judgment and the Company has appealed. During March and April 2019, the Company agreed in principle to settle a substantial majority of the coal mine dust lawsuits in Kentucky and West Virginia for $340 million, including the $65 million jury verdict in April 2018 in the Kentucky case mentioned above currently on appeal. 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 alleging more serious injuries, including mesothelioma, other malignancies, and black lung disease, 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 medically unimpaired claimants. 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 was inactive from the fourth quarter of 2007 until late 2013, 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 court 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 regularly conducts a comprehensive legal review of its respirator mask/asbestos liabilities. The Company reviews recent and historical claims data, including without limitation, (i) the number of pending claims filed against the Company, (ii) the nature and mix of those claims (i.e., 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), (iii) the costs to defend and resolve pending claims, and (iv) trends in filing rates and in costs to defend and resolve claims, (collectively, the “Claims Data”). As part of its comprehensive legal review, the Company regularly provides the Claims Data to a third party with expertise in determining the impact of Claims Data on future filing trends and costs. The third party assists the Company in estimating the costs to defend and resolve pending and future claims. The Company uses these estimates to develop its best estimate of probable liability. 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 key assumptions underlying the Company’s accrual, including, the number of future claims, the nature and mix of those claims, the average cost of defending and resolving claims, and in maintaining trial readiness (ii) trial and appellate outcomes, (iii) the law and procedure applicable to these claims, and (iv) the financial viability of other co-defendants and insurers. As a result of the settlements-in-principle of the coal mine dust lawsuits mentioned above, the Company’s assessment of other current and expected coal mine dust lawsuits (including the costs to resolve all current and expected coal mine dust lawsuits in Kentucky and West Virginia), its review of its respirator mask/asbestos liabilities, and the cost of resolving claims of persons who claim more serious injuries, including mesothelioma, other malignancies, and black lung disease, the Company increased its accruals in the first nine months of 2019 for respirator mask/asbestos liabilities by $337 million, of which $313 million pre-tax (or $238 million after tax ($0.40 per diluted share)) was accrued in the first quarter of 2019. In the first nine months of 2019, the Company made payments for legal defense costs and settlements of $390 million related to the respirator mask/asbestos litigation. As of September 30, 2019, the Company had an accrual for respirator mask/asbestos liabilities (excluding Aearo accruals) of $620 million. This accrual represents the Company’s best estimate of probable loss and reflects an estimation period for future claims that may be filed against the Company approaching the year 2050. 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 September 30, 2019, the Company’s receivable for insurance recoveries related to the respirator mask/asbestos litigation was $4 million. The Company continues to seek coverage under the policies of certain insolvent and other 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 September 30, 2019, 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, coal mine dust, or other occupational dusts found in products manufactured by other defendants or generally in the workplace. As of September 30, 2019, the Company, through its Aearo subsidiary, had accruals of $24 million for product liabilities and defense costs related to current and future Aearo-related asbestos and silica-related claims. This accrual represents the Company’s best estimate of Aearo’s probable loss and reflects an estimation period for future claims that may be filed against Aearo approaching the year 2050. 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. 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 (CERCLA) 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” 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, including perfluorooctanoate (“PFOA”), perfluorooctane sulfonate (“PFOS”), perfluorohexane sulfonate (“PFHxS”), or other per- and polyfluoroalkyl substances (collectively “PFAS”). As a result of its phase-out decision in May 2000, the Company no longer manufactures certain PFAS compounds including PFOA, PFOS, PFHxS, and their pre-cursor 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. The Company continues to manufacture a variety of shorter chain length PFAS compounds, including, but not limited to, pre-cursor compounds to perfluorobutane sulfonate (PFBS). These compounds are used as input materials to a variety of products, including engineered fluorinated fluids, fluoropolymers and fluorelastomers, as well as surfactants, additives, and coatings. 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 continues to review, control or eliminate the presence of certain PFAS in purchased materials or as byproducts in some of 3M’s current fluorochemical manufacturing processes, products, and waste streams. 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 PFOA and PFOS has expanded, the EPA has developed 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. In May 2016, the EPA announced lifetime health advisory levels for PFOA and PFOS at 70 parts per trillion (ppt) (superseding the provisional levels established by the EPA in 2009 of 400 ppt for PFOA and 200 ppt for PFOS). Where PFOA and PFOS are found together, EPA recommends that the concentrations be added together, and the lifetime health advisory for PFOA and PFOS combined is also 70 ppt. Lifetime health advisories, which are non-enforceable and non-regulatory, provide information about concentrations of drinking water contaminants at which adverse health effects are not expected to occur over the specified exposure duration. To collect exposure information under the Safe Drinking Water Act, the EPA published on May 2, 2012 a list of unregulated substances, including six-PFAS chemicals, required to be monitored during the period 2013-2015 by public water system suppliers to determine the extent of their occurrence. Through January 2017, the EPA reported results for 4,920 public water supplies nationwide. Based on the 2016 lifetime health advisory, 13 public water supplies exceed the level for PFOA and 46 exceed the level for PFOS (unchanged from the July 2016 EPA summary). A technical advisory issued by EPA in September 2016 on laboratory analysis of drinking water samples stated that 65 public water supplies had exceeded the combined level for PFOA and PFOS. These results are based on one or more samples collected during the period 2012-2015 and do not necessarily reflect current conditions of these public water supplies. EPA reporting does not identify the sources of the PFOA and PFOS in the public water supplies. The Company is continuing to make progress in its work, under the supervision of state regulators, to address its historic disposal of PFAS-containing waste associated with manufacturing operations at its 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 PFAS in the soil at the Company’s manufacturing facility in Decatur, Alabama. Pursuant to a permit issued by ADEM, for approximately 20 years, the Company incorporated its wastewater treatment plant sludge containing PFAS in fields at its Decatur facility. After a review of the available options to address the presence of PFAS 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 plan continues, and construction of the cap was substantially 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 PFAS 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 PFAS 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 PFAS for which a HBV and/or HRL exists as a result of contamination from these sites; (iii) remediating identified sources of other PFAS 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 continues at the Cottage Grove site during 2019. 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. In May 2017, the MDH issued new HBVs for PFOS and PFOA. The new HBVs are 35 ppt for PFOA and 27 ppt for PFOS. In connection with its announcement the MDH stated that “Drinking water with PFOA and PFOS, even at the levels above the updated values, does not represent an immediate health risk. These values are designed to reduce long-term health risks across the population and are based on multiple safety factors to protect the most vulnerable citizens, which makes them overprotective for most of the residents in our state.” In December 2017, the MDH issued a new HBV for perfluorobutane sulfonate (PFBS) of 2 parts per billion (ppb). In February 2018, the MDH published reports finding no unusual rates of certain cancers or adverse birth outcomes (low birth rates or premature births) among residents of Washington and Dakota Counties in Minnesota. In April 2019, the MDH issued a new HBV for PFOS of 15 ppt and a new HBV for PFHxS of 47 ppt. In May 2018, the EPA announced a four-step PFAS action plan, which includes evaluating the need to set Safe Drinking Water Act maximum contaminant levels (MCLs) for PFOA and PFOS and beginning the steps necessary to designate PFOA and PFOS as “hazardous substances” under CERCLA. In November 2018, the EPA asked for public comment on draft toxicity assessments for two PFAS compounds, including PFBS. In February 2019, the EPA issued a PFAS Action Plan that outlines short- and long-term actions the EPA is taking to address PFAS – actions that include developing a national drinking water determination for PFOA and PFOS, strengthening enforcement authorities and evaluating cleanup approaches, nationwide drinking water monitoring for PFAS, expanding scientific knowledge for understanding and managing risk from PFAS, and developing consistent risk communication tools for communicating with other agencies and the public. With respect to groundwater contaminated with PFOA and PFOS, the EPA released draft interim recommendations in April 2019, aiming to provide guidance for screening levels and preliminary remediation goals to inform final clean-up levels of contaminated sites. The U.S. hazardous substance that is likely to be without appreciable risk of adverse non-cancer health effects over a specified duration of exposure. MRLs are not intended to define cleanup or action levels for ATSDR or other agencies. In August 2018, 3M submitted comments on the ATSDR proposal, noting that there are major shortcomings with the current draft, especially with the MRLs, and that the ATSDR’s profile must reflect the best science and full weight of evidence known about these chemicals. In several states, the state legislature or the state environmental agency have been evaluating or have taken actions related to cleanup standards, groundwater values or drinking water values for PFOS, PFOA, and other PFAS. The Company cannot predict what additional regulatory actions arising from the foregoing or other proceedings and activities, if any, may be taken regarding such compounds or the consequences of any such actions. Litigation Related to Historical PFAS Manufacturing Operations in Alabama As previously reported, a former employee filed a putative 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 plaintiffs’ counsel filed an amended complaint in November 2006, limiting the case to property damage claims on behalf of a putative 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 2005, the judge – in a second putative 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 putative 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 putative class action lawsuit in the Circuit Court of Franklin County (the “Stover case”) seeking compensatory damages and injunctive relief based on the application by the Decatur utility’s wastewater treatment plant of wastewater treatment sludge to farmland and grasslands in the state that allegedly contain PFOA, PFOS and other perfluorochemicals. The named plaintiff seeks to represent a class of all persons within the State of Alabama who have had PFOA, PFOS, and other perfluorochemicals released or deposited on their property. In March 2010, the Alabama Supreme Court ordered the case transferred from Franklin County to Morgan County. In May 2010, consistent with its handling of the other matters, the Morgan County Circuit Court abated this case, putting it on hold pending the resolution of the class certification issues in the St. John case. In October 2015, West Morgan-East Lawrence Water & Sewer Authority (Water Authority) filed an individual complaint against 3M Company, Dyneon, L.L.C, and Daikin America, Inc., in the U.S. District Court for the Northern District of Alabama. The complaint also includes representative plaintiffs who brought the complaint on behalf of themselves, and a class of all owners and possessors of property who use water provided by the Water Authority and five local water works to which the Water Authority supplies water (collectively, the “Water Utilities”). The complaint seeks compensatory and punitive damages and injunctive relief based on allegations that the defendants’ chemicals, including PFOA and PFOS from their manufacturing processes in Decatur, have contaminated the water in the Tennessee River at the water intake, and that the chemicals cannot be removed by the water treatment processes utilized by the Water Authority. In April 2019, 3M and the Water Authority settled the lawsuit described above for $35 million, which will fund a new water filtration system, with 3M indemnification of the Water Authority from liability resulting from the resolution of the currently pending and future lawsuits against the Water Authority alleging liability or damages related to 3M PFAS. In June 2016, the Tennessee Riverkeeper, Inc. (Riverkeeper), a non-profit corporation, filed a lawsuit in the U.S. District Court for the Northern District of Alabama against 3M; BFI Waste Systems of Alabama; the City of Decatur, Alabama; and the Municipal Utilities Board of Decatur, Morgan County, Alabama. The complaint alleges that the defendants violated the Resource Conservation and Recovery Act in connection with the disposal of certain PFAS through their ownership and operation of their respective sites. The complaint further alleges such practices may present an imminent and substantial endangerment to health and/or the environment and that Riverkeeper has suffered and will continue to suffer irreparable harm caused by defendants’ failure to abate the endangerment unless the court grants the requested relief, including declaratory and injunctive relief. The St. John and Tennessee Riverkeeper cases, which relate to the 3M plant in Decatur, are stayed through November 2019. In August 2016, a group of over 200 plaintiffs filed a putative class action against West Morgan-Eas |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Leases | NOTE 15. Leases The Company adopted ASU No. 2016-02 and related standards (collectively ASC 842, Leases 3M determines if an arrangement is a lease upon inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used. 3M determines certain service agreements that contain the right to use an underlying asset are not leases because 3M does not control how and for what purpose the identified asset is used. Examples of such agreements include master supply agreements, product processing agreements, warehouse and distribution services agreements, power purchase agreements, and transportation purchase agreements. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is 3M’s incremental borrowing rate or, if available, the rate implicit in the lease. 3M determines the incremental borrowing rate for each lease based primarily on its lease term and the economic environment of the applicable country or region. As a lessee, the Company leases distribution centers, office space, land, and equipment. Certain 3M lease agreements include rental payments adjusted annually based on changes in an inflation index. 3M’s leases do not contain material residual value guarantees or material restrictive covenants. Lease expense is recognized on a straight-line basis over the lease term. Certain leases include one or more options to renew, with terms that can extend the lease term up to five years. 3M includes options to renew the lease as part of the right of use lease asset and liability when it is reasonably certain the Company will exercise the option. In addition, certain leases contain fair value purchase and termination options with an associated penalty. In general, 3M is not reasonably certain to exercise such options. For the measurement and classification of its lease agreements, 3M groups lease and non-lease components into a single lease component for all underlying asset classes. Variable lease payments primarily include payments for non-lease components, such as maintenance costs, payments for leased assets used beyond their noncancelable lease term as adjusted for contractual options to terminate or renew, and payments for non-components such as sales tax. Certain 3M leases contain immaterial variable lease payments based on number of units produced. The components of lease expense are as follows: Three months ended Nine months ended (Millions) September 30, 2019 September 30, 2019 Operating lease cost $ 78 $ 229 Finance lease cost: Amortization of assets 5 15 Interest on lease liabilities — 1 Variable lease cost 26 68 Total net lease cost $ 109 $ 313 Income related to sub-lease activity is immaterial for the Company. Supplemental balance sheet information related to leases is as follows: Location on Face of As of: (Millions unless noted) Balance Sheet September 30, 2019 Operating leases: Operating lease right of use assets Operating lease right of use assets $ 834 Current operating lease liabilities Operating lease liabilities - current $ 241 Noncurrent operating lease liabilities Operating lease liabilities 584 Total operating lease liabilities $ 825 Finance leases: Property and equipment, at cost Property, plant and equipment $ 235 Accumulated amortization Property, plant and equipment (accumulated depreciation) (99) Property and equipment, net $ 136 Current obligations of finance leases Other current liabilities $ 18 Finance leases, net of current obligations Other liabilities 116 Total finance lease liabilities $ 134 Weighted average remaining lease term (in years): Operating leases 5.7 Finance leases 9.2 Weighted average discount rate: Operating leases 3.3 % Finance leases 3.8 % Supplemental cash flow and other information related to leases is as follows: Nine months ended (Millions) September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 231 Operating cash flows from finance leases 1 Financing cash flows from finance leases 12 Right of use assets obtained in exchange for lease liabilities: Operating leases 288 Finance leases 58 Gain on sale leaseback transactions, net 59 In the first quarter of 2019, 3M sold and leased-back certain recently constructed machinery and equipment in return for municipal securities, which in aggregate, were recorded as a finance lease asset and obligation of approximately $9 million. In the third quarter of 2019, the Company sold an office location involving a leaseback resulting in a $59 million gain. Refer to Note 9 in 3M’s 2018 Annual Report on Form 10-K for additional non-cash details associated with prior activity. Maturities of lease liabilities were as follows: September 30, 2019 (Millions) Finance Leases Operating Leases Remainder of 2019 $ 8 $ 73 2020 20 241 2021 16 168 2022 15 123 2023 15 85 After 2023 67 211 Total $ 141 $ 901 Less: Amounts representing interest (7) (76) Present value of future minimum lease payments 134 825 Less: Current obligations 18 241 Long-term obligations $ 116 $ 584 As of September 30, 2019, the Company has additional operating lease commitments that have not yet commenced of approximately $29 million. These commitments pertain to 3M’s right of use buildings. Disclosures related to periods prior to adoption of new lease standard: Capital and Operating Leases: ● In 2003, 3M recorded a capital lease asset and obligation of approximately 34 million British Pound (GBP), or approximately $43 million at December 31, 2018, exchange rates, for a building in the United Kingdom (with a lease term of 22 years ). ● 3M sold and leased-back certain recently constructed machinery and equipment in return for municipal securities, which in aggregate, were recorded as a capital lease asset and obligation of approximately $13 million in 2018, $13 million in 2017, and $12 million in 2016, with an average remaining lease term remaining of 15 years at December 31, 2018. Minimum lease payments under capital and operating leases with non-cancelable terms in excess of one year as of December 31, 2018, were as follows: Operating (Millions) Capital Leases Leases 2019 $ 18 $ 283 2020 16 208 2021 14 153 2022 12 122 2023 12 92 After 2023 32 253 Total $ 104 $ 1,111 Less: Amounts representing interest 12 Present value of future minimum lease payments 92 Less: Current obligations under capital leases 17 Long-term obligations under capital leases $ 75 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | NOTE 16. Stock-Based Compensation The 3M 2016 Long-Term Incentive Plan provides for the issuance or delivery of up to 123,965,000 shares of 3M common stock pursuant to awards granted under the plan. Awards 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. As of September 30, 2019, the remaining shares available for grant under the LTIP Program are 22.1 million. 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 ten years of service. This retiree-eligible population represents 37 percent of the annual grant stock-based compensation expense; therefore, higher stock-based compensation expense is recognized in the first quarter. 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 three and nine months ended September 30, 2019 and 2018. Stock-Based Compensation Expense Three months ended Nine months ended September 30, September 30, (Millions) 2019 2018 2019 2018 Cost of sales $ 8 $ 8 $ 39 $ 40 Selling, general and administrative expenses 33 35 151 177 Research, development and related expenses 7 7 40 41 Stock-based compensation expenses $ 48 $ 50 $ 230 $ 258 Income tax benefits $ (12) $ (20) $ (120) $ (137) Stock-based compensation expenses (benefits), net of tax $ 36 $ 30 $ 110 $ 121 Stock Option Program The following table summarizes stock option activity during the nine months ended September 30, 2019: Weighted Average Weighted Remaining Aggregate Number of Average Contractual Intrinsic Value (Options in thousands) Options Exercise Price Life (months) (millions) Under option — January 1 34,569 $ 138.98 Granted: Annual 3,457 200.80 Exercised (3,390) 90.13 Forfeited (96) 198.89 September 30 34,540 $ 149.80 66 $ 910 Options exercisable September 30 27,295 $ 135.36 56 $ 910 Stock options vest over a period from one year to three years with the expiration date at 10 years from date of grant. As of September 30, 2019, there was $79 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 22 months. The total intrinsic values of stock options exercised were $368 million and $411 million during the nine months ended September 30, 2019 and 2018, respectively. Cash received from options exercised was $304 million and $270 million for the nine months ended September 30, 2019 and 2018, respectively. The Company’s actual tax benefits realized for the tax deductions related to the exercise of employee stock options were $77 million and $87 million for the nine months ended September 30, 2019 and 2018, respectively. For the primary 2019 annual stock option grant, the weighted average fair value at the date of grant was calculated using the Black-Scholes option-pricing model and the assumptions that follow. Stock Option Assumptions Annual 2019 Exercise price $ 201.12 Risk-free interest rate 2.6 % Dividend yield 2.5 % Expected volatility 20.4 % Expected life (months) 79 Black-Scholes fair value $ 34.19 Expected volatility is a statistical measure of the amount by which a stock price is expected to fluctuate during a period. For the 2019 annual grant date, the Company estimated the expected volatility based upon the following three volatilities of 3M stock: the median of the term of the expected life rolling volatility; the median of the most recent term of the expected life volatility; 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 during the nine months ended September 30, 2019: Weighted Average Number of Grant Date (Shares in thousands) Shares Fair Value Nonvested balance — As of January 1 1,789 $ 180.02 Granted Annual 564 200.41 Other 13 181.09 Vested (686) 148.24 Forfeited (50) 190.88 As of September 30 1,630 $ 200.12 As of September 30, 2019, there was $90 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 23 months. The total fair value of restricted stock and restricted stock units that vested during the nine months ended September 30, 2019 and 2018 was $136 million and $154 million, respectively. The Company’s actual tax benefits realized for the tax deductions related to the vesting of restricted stock and restricted stock units was $26 million and $29 million for the nine months ended September 30, 2019 and 2018, respectively. Restricted stock units granted 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. 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 2019 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. When granted, these performance shares are awarded at 100% of the estimated number of shares at the end of the three-year performance period and are reflected under “Granted” in the table below. 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. The performance share grants accrue dividends; therefore, the grant date fair value is equal to the closing stock price on the date of grant. Since the rights to dividends are forfeitable, there is no impact on basic earnings per share calculations. Weighted average performance shares whose performance period is complete are included in computation of diluted earnings per share. The following table summarizes performance share activity during the nine months ended September 30, 2019: Weighted Average Number of Grant Date (Shares in thousands) Shares Fair Value Undistributed balance — As of January 1 562 $ 188.96 Granted 162 207.49 Distributed (210) 162.16 Performance change (72) 206.51 Forfeited (22) 209.93 As of September 30 420 $ 205.34 As of September 30, 2019, there was $20 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 19 months. The total fair value of performance shares that were distributed were $45 million and $48 million for the nine months ended September 30, 2019 and 2018, respectively. The Company’s actual tax benefits realized for the tax deductions related to the distribution of performance shares were $9 million and $11 million for the nine months ended September 30, 2019 and 2018, respectively. |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2019 | |
Business Segments | |
Business Segments | NOTE 17. 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 four business segments: Safety and Industrial; Transportation and Electronics; Health Care; and Consumer. 3M’s four 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 other expense (income), which is not allocated to business segments. Further information about which is included in Note 6. Effective in the second quarter of 2019, to enable the Company to better serve global customers and markets, the Company made the following changes to its business segments: Realignment of the Company’s business segments from five to four The Company realigned its former five business segments into four: Safety and Industrial; Transportation and Electronics; Health Care; and Consumer. Existing divisions were largely realigned to this new structure. In addition, certain retail auto care product lines formerly in the Automotive Aftermarket Division (now within the Safety and Industrial business segment) were moved to the Construction and Home Improvement Division (within the Consumer business segment). Also, product lines relating to the refrigeration filtration business, formerly included in the Separation and Purification Sciences Division (now within the Health Care business segment) were moved to Other Safety and Industrial (within the Safety and Industrial business segment). 3M business segment reporting measures include dual credit to business segments for certain sales and operating income. Dual credit, which is based on which business segment provides customer account activity with respect to a particular product sold in a specific country, was reduced as a result of the closer alignment between customer account activity and their respective markets. The four business segments are as follows: Safety and Industrial Transportation and Electronics: Health Care Consumer In addition, as part of 3M’s continuing effort to improve the alignment of its businesses around markets and customers, the Company made the following changes, effective in the first quarter of 2019, and other revisions impacting business segment reporting: Continued alignment of customer account activity ● As part of 3M’s regular customer-focus initiatives, the Company realigned certain customer account activity (“sales district”) to correlate with the primary divisional product offerings in various countries and reduce complexity for customers when interacting with multiple 3M businesses. This largely impacted the amount of dual credit certain business segments receive as a result of sales district attribution. 3M business segment reporting measures include dual credit to business segments for certain sales and operating income. This dual credit is based on which business segment provides customer account activity with respect to a particular product sold in a specific country. Creation of Closure and Masking Systems Division and Medical Solutions Division ● 3M created the Closure and Masking Systems Division, which combines the masking tape, packaging tape and personal care portfolios formerly within Industrial Adhesives and Tapes Division in the former Industrial business segment into a separate division also within the former Industrial business segment. 3M created the Medical Solutions Division in the Health Care business segment, which combines the former Critical and Chronic Care Division and Infection Prevention Division (which were also both within the Health Care business segment). Additional actions impacting business segment reporting ● The business associated with certain safety products sold through retail channels in the Asia Pacific region was realigned from the Personal Safety Division within the former Safety and Graphics business segment to the Construction and Home Improvement Division within the Consumer business segment. In addition, certain previously non-allocated costs related to manufacturing and technology of centrally managed material resource centers of expertise within Corporate and Unallocated are now reflected as being allocated to the business segments. The financial information presented herein reflects the impact of the preceding changes for all periods presented. Business Segment Information Three months ended Nine months ended September 30, September 30, (Millions) 2019 2018 2019 2018 Net Sales Safety and Industrial $ 2,849 $ 3,021 $ 8,796 $ 9,542 Transportation and Electronics 2,503 2,619 7,312 7,665 Health Care 1,721 1,643 5,290 5,118 Consumer 1,324 1,302 3,821 3,819 Corporate and Unallocated 28 35 98 47 Elimination of Dual Credit (434) (468) (1,292) (1,371) Total Company $ 7,991 $ 8,152 $ 24,025 $ 24,820 Operating Income Safety and Industrial $ 765 $ 697 $ 2,062 $ 2,753 Transportation and Electronics 631 726 1,746 2,051 Health Care 459 475 1,406 1,443 Consumer 308 300 809 811 Corporate and Unallocated (40) (57) (858) (1,293) Elimination of Dual Credit (112) (125) (316) (341) Total Company $ 2,011 $ 2,016 $ 4,849 $ 5,424 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. Corporate and Unallocated also includes sales, costs, and income from contract manufacturing, transition services and other arrangements with the acquirer of all of the Communication Markets Division following its divestiture in 2018. 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 sales and related operating income. Management evaluates each of its four business segments based on net sales and operating income performance, including dual credit reporting to further incentivize sales growth. As a result, 3M reflects additional (“dual”) credit to another business segment when the customer account activity (“sales district”) with respect to the particular product sold to the external customer is provided by a different business segment. This additional dual credit is largely reflected at the division level. For example, privacy screen protection products are primarily sold by the Display Materials and Systems Division within the Transportation and Electronics business segment; however, certain sales districts within the Consumer business segment provide the customer account activity for sales of the product to particular customers. In this example, the non-primary selling segment (Consumer) would also receive credit for the associated net sales initiated through its sales district 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 in total are unchanged. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The interim consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of the Company’s consolidated financial position, results of operations and cash flows for the periods presented. These adjustments consist of normal, recurring items. The results of operations for any interim period are not necessarily indicative of results for the full year. The interim consolidated financial statements and notes are presented as permitted by the requirements for Quarterly Reports on Form 10-Q. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and notes included in its Annual Report on Form 10-K. As described in Note 17, effective in the second quarter of 2019, the Company realigned its former five business segments into four to enable the Company to better serve global customers and markets. In addition, certain product lines were moved to better align with their respective end customers. Earlier in the first quarter of 2019, the Company changed its business segment reporting in its continuing effort to improve the alignment of businesses around markets and customers. These changes included the realignment of certain customer account activity in various countries (affecting dual credit reporting), creation of the Closure and Masking Systems and Medical Solutions divisions, and certain other actions that impacted segment reporting. Segment information presented herein reflects the impact of these changes for all periods presented. |
Changes to Significant Accounting Policies | Changes to Significant Accounting Policies The following significant accounting policies have been added or changed since the Company’s 2018 Annual Report on Form 10-K. Leases: Leases Income Taxes Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income |
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. 3M has a subsidiary in Venezuela, the financial statements of which were remeasured as if its functional currency were that of its parent because Venezuela’s economic environment is considered highly inflationary. The operating income of this subsidiary was immaterial as a percent of 3M’s consolidated operating income for 2018. The Venezuelan government sets official rates of exchange and conditions precedent to purchase foreign currency at these rates with local currency. The government has also operated various expanded secondary currency exchange mechanisms that have been eliminated and replaced from time to time. Such rates and conditions have been and continue to be subject to change. During the third quarter of 2018, the Venezuelan government effected a conversion of its currency to the Sovereign Bolivar (VES), essentially equating to its previous Venezuelan Bolivar divided by 100,000. For the periods presented through May 2019, the financial statements of 3M’s Venezuelan subsidiary were remeasured utilizing the rate associated with the secondary auction mechanism, Tipo de Cambio Complementario (DICOM), or its predecessor. Note 1 in 3M’s 2018 Annual Report on Form 10-K provides additional information the Company considers in determining the exchange rate used relative to its Venezuelan subsidiary as well as factors which could lead to its deconsolidation. As described therein, a need to deconsolidate the Company’s Venezuelan subsidiary’s operations results from a lack of exchangeability of VES-denominated cash coupled with an acute degradation in the ability to make key operational decisions due to government regulations in Venezuela. 3M continued to review changes in these underlying factors such as the 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. In light of circumstances, including the country’s unstable environment and heightened unrest leading to sustained lack of demand, and expectation that these circumstances will continue for the foreseeable future, during May 2019, 3M concluded it no longer met the criteria of control in order to continue consolidating its Venezuelan operations. As a result, as of 3M has subsidiaries in Argentina, the operating income of which was less than one half of one percent of 3M’s consolidated operating income for 2018. Based on various indices, Argentina’s cumulative three-year inflation rate exceeded 100 percent in the second quarter of 2018, thus being considered highly inflationary. As a result, beginning in the third quarter of 2018, the financial statements of the Argentine subsidiaries were remeasured as if their functional currency were that of their parent. As of September 30, 2019, the Company had a balance of net monetary assets denominated in Argentine pesos (ARS) of approximately 430 million ARS and the exchange rate was approximately 57 ARS per U.S. dollar. |
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 a result of the dilution associated with the Company’s stock-based compensation plans. Certain options outstanding under these stock-based compensation plans were not included in the computation of diluted earnings per share attributable to 3M common shareholders because they would have had an anti-dilutive effect (11.9 million average options for the three months ended September 30, 2019; 8.0 million average options for the nine months ended September 30, 2019; 3.2 million average options for the three months ended September 30, 2018; 2.8 million average options for the nine months ended September 30, 2018). The computations for basic and diluted earnings per share follow: Earnings Per Share Computations Three months ended Nine months ended September 30, September 30, (Amounts in millions, except per share amounts) 2019 2018 2019 2018 Numerator: Net income attributable to 3M $ 1,583 $ 1,543 $ 3,601 $ 4,002 Denominator: Denominator for weighted average 3M common shares outstanding – 576.5 585.6 577.2 591.1 Dilution associated with the Company’s stock-based compensation plans 6.5 12.8 8.7 14.0 Denominator for weighted average 3M common shares outstanding – 583.0 598.4 585.9 605.1 Earnings per share attributable to 3M common shareholders – $ 2.75 $ 2.64 $ 6.24 $ 6.77 Earnings per share attributable to 3M common shareholders – $ 2.72 $ 2.58 $ 6.15 $ 6.61 |
New Accounting Pronouncements | New Accounting Pronouncements See the Company’s 2018 Annual Report on Form 10-K for a more detailed discussion of the standards in the tables that follow, except for those pronouncements issued subsequent to the most recent Form 10-K filing date for which separate, more detailed discussion is provided below as applicable. Standards Adopted During the Current Fiscal Year Standard Relevant Description Effective Date for 3M Impact and Other Matters ASU No. 2016-02, Leases Provides a lessee model that requires entities to recognize assets and liabilities for most leases, but recognize expenses on their income statements in a manner similar to previous accounting. This ASU does not make fundamental changes to previous lessor accounting. January 1, 2019 See Note 15 for detailed discussion and disclosures. Adopted using the modified retrospective approach Impact on January 1, 2019 includes a $14 million increase in the balance of retained earnings and recording of additional lease assets and liabilities of $0.8 billion each ASU No. 2017-08 , Premium Amortization on Purchased Callable Debt Securities Shortens the amortization period to the earliest call date for the premium related to certain callable debt securities that have explicit, noncontingent call features and are callable at a fixed price and preset date. January 1, 2019 3M’s marketable security portfolio includes limited instances of callable debt securities held at a premium. The adoption of this ASU did not have a material impact. ASU No. 2017-11, (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception Amends (1) the classification of financial instruments with down-round features as liabilities or equity by revising certain guidance relative to evaluating if they must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of freestanding equity-classified instruments. January 1, 2019 No financial instruments with down-round features have been issued. The adoption of this ASU did not have a material impact. ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities Amends previous guidance to simplify application of hedge accounting in certain situations and allow companies to better align their hedge accounting with risk management activities. Simplifies related accounting by eliminating requirement to separately measure and report hedge ineffectiveness. Expands an entity’s ability to hedge nonfinancial and financial risk components. January 1, 2019 See Note 12 for additional details. The adoption of this ASU did not have a material impact ASU No. 2018-02 , Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Permits entities to reclassify, to retained earnings, the one-time income tax effects stranded in accumulated other comprehensive income arising from the change in the U.S. federal corporate tax rate as a result of the Tax Cuts and Jobs Act of 2017. January 1, 2019 See Note 8 for additional discussion. Impact on January 1, 2019 includes increases of $0.9 billion in each of retained earnings and accumulated other comprehensive loss. See also the preceding “Changes to Significant Accounting Policies” section. ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting Aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees. Clarifies that any share-based payment issued to a customer should be evaluated under ASC 606, Revenue from Contracts with Customers January 1, 2019 The adoption of this ASU did not have a material impact as 3M does not issue share-based payments to nonemployees or customers Standards Adopted During the Current Fiscal Year (continued) Standard Relevant Description Effective Date for 3M Impact and Other Matters ASU No. 2018-08, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made Clarifies that a contribution is conditional if the arrangement includes both a barrier for the recipient to be entitled to the assets transferred and a right of return for the assets transferred. Recognition of contribution expense is deferred for conditional arrangements and is immediate for unconditional arrangements. January 1, 2019 Adopted prospectively with no immediate impact. ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities Changes how entities evaluate decision-making fees under the variable interest guidance. Indirect interests held through related parties under common control will be considered on a proportionate basis rather than in their entirety. January 1, 2019 Adoption of this ASU did not have a material impact as 3M does not have significant involvement with entities subject to consolidation considerations impacted by variable interest entity model factors. ASU No. 2018-18, Clarifying the Interaction between Topic 808 and Topic 606 Clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606, Revenue from Contracts with Customers Precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. January 1, 2019 Adoption of this ASU did not have a material impact as 3M has limited collaborative arrangements. ASU No. 2017-09, Scope of Modification Accounting ● Provides that fewer changes to the terms of share-based payment awards will require accounting under the modification model (which generally would have required additional compensation cost). January 1, 2018 ● Adopted prospectively with no immediate impact. ● 3M does not typically make changes to the terms or conditions of its issued share-based payments. Standards Issued and Not Yet Adopted Standard Relevant Description Effective Date for 3M Impact and Other Matters ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments Introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. Amends the current other-than-temporary impairment model for available-for-sale debt securities. For such securities with unrealized losses, entities will still consider if a portion of any impairment is related only to credit losses and therefore recognized as a reduction in income. January 1, 2020 Required to make a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. 3M continues to evaluate this ASU’s impact on its consolidated results of operations and financial condition. Based on the analysis completed to date and due to the nature and extent of 3M’s financial instruments in scope for this ASU (primarily accounts receivable) and the historical, current and expected credit quality of its customers, 3M does not expect this ASU to have a material impact on its consolidated results of operations and financial condition. See the “Relevant New Standards Issued Subsequent to Most Recent Annual Report” below for further discussion on ASU No. 2019-04 and 2019-05 issued in April 2019 and May 2019, respectively. ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement Eliminates, amends, and adds disclosure requirements for fair value measurements, primarily related to Level 3 fair value measurements. January 1, 2020 As this ASU relates to disclosures only, there will be no impact to 3M’s consolidated results of operations and financial condition. ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service arrangement (i.e. hosting arrangement) with the guidance on capitalizing costs in ASC 350-40, Internal-Use Software January 1, 2020 ASU permits either prospective or retrospective transition. As 3M utilizes limited cloud-computing services where significant implementation costs are incurred, the Company does not expect this ASU to have a material impact. Relevant New Standards Issued Subsequent to Most Recent Annual Report In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 – Financial Instruments Targeted Transition Relief to Topic 326, Financial Instruments – Credit Losses. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Significant Accounting Policies | |
Earnings per share | Three months ended Nine months ended September 30, September 30, (Amounts in millions, except per share amounts) 2019 2018 2019 2018 Numerator: Net income attributable to 3M $ 1,583 $ 1,543 $ 3,601 $ 4,002 Denominator: Denominator for weighted average 3M common shares outstanding – 576.5 585.6 577.2 591.1 Dilution associated with the Company’s stock-based compensation plans 6.5 12.8 8.7 14.0 Denominator for weighted average 3M common shares outstanding – 583.0 598.4 585.9 605.1 Earnings per share attributable to 3M common shareholders – $ 2.75 $ 2.64 $ 6.24 $ 6.77 Earnings per share attributable to 3M common shareholders – $ 2.72 $ 2.58 $ 6.15 $ 6.61 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue | |
Schedule of disaggregated revenue recognized during the period | Three months ended Nine months ended September 30, September 30, Net Sales (Millions) 2019 2018 2019 2018 Abrasives $ 345 $ 362 $ 1,079 $ 1,171 Adhesives and Tapes 696 734 2,075 2,191 Automotive Aftermarket 310 334 929 1,038 Closure and Masking Systems 282 300 835 920 Communication Markets — 8 — 169 Electrical Markets 298 315 911 949 Personal Safety 813 864 2,656 2,745 Roofing Granules 101 83 293 283 Other Safety and Industrial 4 21 18 76 Total Safety and Industrial Business Segment $ 2,849 $ 3,021 $ 8,796 $ 9,542 Advanced Materials $ 319 $ 313 $ 961 $ 932 Automotive and Aerospace 485 509 1,486 1,610 Commercial Solutions 437 436 1,361 1,415 Electronics 1,001 1,101 2,759 2,951 Transportation Safety 261 260 745 758 Other Transportation and Electronics — — — (1) Total Transportation and Electronics Business Segment $ 2,503 $ 2,619 $ 7,312 $ 7,665 Drug Delivery $ 99 $ 102 $ 301 $ 340 Food Safety 86 82 254 246 Health Information Systems 296 208 853 618 Medical Solutions 737 732 2,294 2,273 Oral Care 312 317 991 1,013 Separation and Purification Sciences 191 203 602 631 Other Health Care — (1) (5) (3) Total Health Care Business Group $ 1,721 $ 1,643 $ 5,290 $ 5,118 Consumer Health Care $ 97 $ 97 $ 297 $ 300 Home Care 242 249 747 773 Home Improvement 612 579 1,739 1,694 Stationery and Office 361 367 1,006 1,022 Other Consumer 12 10 32 30 Total Consumer Business Group $ 1,324 $ 1,302 $ 3,821 $ 3,819 Corporate and Unallocated $ 28 $ 35 $ 98 $ 47 Elimination of Dual Credit (434) (468) (1,292) (1,371) Total Company $ 7,991 $ 8,152 $ 24,025 $ 24,820 Three months ended September 30, 2019 Net Sales (Millions) United States Asia Pacific Europe, Middle East and Africa Latin America and Canada Other Unallocated Worldwide Safety and Industrial $ 1,153 $ 713 $ 626 $ 356 $ 1 $ 2,849 Transportation and Electronics 594 1,390 363 157 (1) 2,503 Health Care 827 360 388 145 1 1,721 Consumer 843 233 136 112 — 1,324 Corporate and Unallocated 25 1 1 1 — 28 Elimination of Dual Credit (150) (207) (49) (27) (1) (434) Total Company $ 3,292 $ 2,490 $ 1,465 $ 744 $ — $ 7,991 Nine months ended September 30, 2019 Net Sales (Millions) United States Asia Pacific Europe, Middle East and Africa Latin America and Canada Other Unallocated Worldwide Safety and Industrial $ 3,498 $ 2,190 $ 2,035 $ 1,073 $ — $ 8,796 Transportation and Electronics 1,796 3,917 1,138 463 (2) 7,312 Health Care 2,477 1,121 1,253 438 1 5,290 Consumer 2,342 745 413 321 — 3,821 Corporate and Unallocated 91 1 1 6 (1) 98 Elimination of Dual Credit (462) (591) (158) (81) — (1,292) Total Company $ 9,742 $ 7,383 $ 4,682 $ 2,220 $ (2) $ 24,025 Three months ended September 30, 2018 Net Sales (Millions) United States Asia Pacific Europe, Middle East and Africa Latin America and Canada Other Unallocated Worldwide Safety and Industrial $ 1,208 $ 788 $ 665 $ 361 $ (1) $ 3,021 Transportation and Electronics 627 1,464 378 149 1 2,619 Health Care 740 357 399 146 1 1,643 Consumer 818 237 137 110 — 1,302 Corporate and Unallocated 36 — — — (1) 35 Elimination of Dual Credit (164) (225) (52) (25) (2) (468) Total Company $ 3,265 $ 2,621 $ 1,527 $ 741 $ (2) $ 8,152 Nine months ended September 30, 2018 Net Sales (Millions) United States Asia Pacific Europe, Middle East and Africa Latin America and Canada Other Unallocated Worldwide Safety and Industrial $ 3,726 $ 2,397 $ 2,296 $ 1,126 $ (3) $ 9,542 Transportation and Electronics 1,838 4,151 1,218 458 — 7,665 Health Care 2,248 1,114 1,303 453 — 5,118 Consumer 2,273 778 438 330 — 3,819 Corporate and Unallocated 43 — — 3 1 47 Elimination of Dual Credit (471) (639) (178) (81) (2) (1,371) Total Company $ 9,657 $ 7,801 $ 5,077 $ 2,289 $ (4) $ 24,820 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Acquisitions | |
Allocation of purchase price | 2019 Acquisition Activity Finite-Lived Intangible-Asset (Millions) Weighted-Average Asset (Liability) M*Modal Lives (Years) Accounts receivable $ 77 Other current assets 2 Property, plant, and equipment 8 Purchased finite-lived intangible assets: Customer related intangible assets 275 14 Other technology-based intangible assets 160 6 Definite-lived tradenames 11 6 Purchased goodwill 508 Other assets 59 Accounts payable and other liabilities (124) Interest bearing debt (251) Deferred tax asset/(liability) (21) Net assets acquired $ 704 Supplemental information: Cash paid $ 708 Less: Cash acquired 4 Cash paid, net of cash acquired $ 704 |
Approximate amounts of major assets and liabilities associated with disposal groups classified as held-for-sale | September 30, (Millions) 2019 Inventory $ 25 Property, plant and equipment 10 Intangible assets 35 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets | |
Goodwill | (Millions) Safety and Industrial Transportation and Electronics Health Care Consumer Total Company Balance as of December 31, 2018 4,716 1,857 3,248 230 10,051 Acquisition activity — — 508 — 508 Divestiture activity (49) — — — (49) Translation and other (51) (27) (53) 31 (100) Balance as of September 30, 2019 $ 4,616 $ 1,830 $ 3,703 $ 261 $ 10,410 |
Acquired Intangible Assets | September 30, December 31, (Millions) 2019 2018 Customer related intangible assets $ 2,525 $ 2,291 Patents 536 542 Other technology-based intangible assets 727 576 Definite-lived tradenames 673 664 Other amortizable intangible assets 122 125 Total gross carrying amount $ 4,583 $ 4,198 Accumulated amortization — customer related (1,107) (998) Accumulated amortization — patents (493) (487) Accumulated amortization — other technology-based (382) (333) Accumulated amortization — definite-lived tradenames (300) (276) Accumulated amortization — other (89) (88) Total accumulated amortization $ (2,371) $ (2,182) Total finite-lived intangible assets — net $ 2,212 $ 2,016 Non-amortizable intangible assets (primarily tradenames) 635 641 Total intangible assets — net $ 2,847 $ 2,657 |
Schedule of amortization expense for acquired intangible assets | Amortization expense for the three and nine months ended September 30, 2019 and 2018 follows: Three months ended Nine months ended September 30, September 30, (Millions) 2019 2018 2019 2018 Amortization expense $ 69 $ 61 $ 208 $ 188 |
Schedule of expected amortization expense for acquired amortizable intangible assets | Expected amortization expense for acquired amortizable intangible assets recorded as of September 30, 2019: Remainder of After (Millions) 2019 2020 2021 2022 2023 2024 2024 Amortization expense $ 69 $ 264 $ 256 $ 242 $ 213 $ 183 $ 950 |
Restructuring Actions and Exi_2
Restructuring Actions and Exit Activities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
2019 Restructuring Actions | |
Components of restructuring by business segment | Second Quarter 2019 (Millions) Employee-Related Asset-Related Total Safety and Industrial $ 11 $ — $ 11 Transportation and Electronics 8 — 8 Health Care 6 — 6 Consumer 5 — 5 Corporate and Unallocated 42 40 82 Total Operating Expense $ 72 $ 40 $ 112 |
Schedule of restructuring charges by income statement line | (Millions) Second Quarter 2019 Cost of sales $ 18 Selling, general and administrative expenses 89 Research, development and related expenses 5 Total operating income impact 112 Other expense (income), net 36 Total income before taxes impact $ 148 |
Accrued restructuring action balances | (Millions) Employee-Related Asset-Related Total Expense incurred in the second quarter of 2019 $ 108 $ 40 $ 148 Non-cash changes (36) (40) (76) Cash payments (41) — (41) Adjustments (14) — (14) Accrued restructuring action balances as of September 30, 2019 $ 17 $ — $ 17 |
2018 Restructuring Actions | |
Schedule of restructuring charges by income statement line | (Millions) Second Quarter 2018 Fourth Quarter 2018 Cost of sales $ 12 $ 15 Selling, general and administrative expenses 89 16 Research, development and related expenses 4 1 Total $ 105 $ 32 |
Accrued restructuring action balances | (Millions) Employee-Related Asset-Related Total Expense incurred in the second quarter and fourth quarter of 2018 $ 125 $ 12 $ 137 Non-cash changes — (12) (12) Cash payments (24) — (24) Adjustments (17) — (17) Accrued restructuring action balances as of December 31, 2018 $ 84 $ — $ 84 Cash payments (68) — (68) Adjustments (3) — (3) Accrued restructuring action balances as of September 30, 2019 $ 13 $ — $ 13 |
Supplemental Income Statement_2
Supplemental Income Statement Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Income Statement Information | |
Schedule of other expense (income) | Three months ended Nine months ended September 30, September 30, (Millions) 2019 2018 2019 2018 Interest expense $ 109 $ 85 $ 324 $ 255 Interest income (26) (15) (64) (52) Pension and postretirement net periodic benefit cost (benefit) (38) (19) (73) (59) Loss on deconsolidation of Venezuelan subsidiary — — 162 — Total $ 45 $ 51 $ 349 $ 144 |
Supplemental Equity and Compr_2
Supplemental Equity and Comprehensive Income Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Equity and Comprehensive Income Information | |
Consolidated Statement of Changes in Equity | Three months ended September 30, 2019 3M Company Shareholders Common Accumulated Stock and Other Additional Comprehensive Non- Paid-in Retained Treasury Income controlling (Millions) Total Capital Earnings Stock (Loss) Interest Balance at June 30, 2019 $ 10,142 $ 5,821 $ 41,362 $ (29,828) $ (7,272) $ 59 Net income 1,588 1,583 5 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (202) (200) (2) Defined benefit pension and post-retirement plans adjustment 76 76 — Cash flow hedging instruments 8 8 — Total other comprehensive income (loss), net of tax (118) Dividends declared (828) (828) Stock-based compensation 49 49 Reacquired stock (141) (141) Issuances pursuant to stock option and benefit plans 72 (32) 104 Balance at September 30, 2019 $ 10,764 $ 5,870 $ 42,085 $ (29,865) $ (7,388) $ 62 Nine Months Ended September 30, 2019 3M Company Shareholders Common Accumulated Stock and Other Additional Comprehensive Non- Paid-in Retained Treasury Income controlling (Millions) Total Capital Earnings Stock (Loss) Interest Balance at December 31, 2018 $ 9,848 $ 5,652 $ 40,636 $ (29,626) $ (6,866) $ 52 Impact of adoption of ASU No. 2018-02 (See Note 1) — 853 (853) Impact of adoption of ASU No. 2016-02 (See Note 1) 14 14 Net income 3,612 3,601 11 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (2) (1) (1) Defined benefit pension and post-retirement plans adjustment 356 356 — Cash flow hedging instruments (24) (24) — Total other comprehensive income (loss), net of tax 330 Dividends declared (2,488) (2,488) Stock-based compensation 218 218 Reacquired stock (1,211) (1,211) Issuances pursuant to stock option and benefit plans 441 (531) 972 Balance at September 30, 2019 $ 10,764 $ 5,870 $ 42,085 $ (29,865) $ (7,388) $ 62 Three months ended September 30, 2018 3M Company Shareholders Common Accumulated Stock and Other Additional Comprehensive Non- Paid-in Retained Treasury Income controlling (Millions) Total Capital Earnings Stock (Loss) Interest Balance at June 30, 2018 $ 10,428 $ 5,559 $ 39,442 $ (27,617) $ (7,019) $ 63 Net income 1,546 1,543 3 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (112) (109) (3) Defined benefit pension and post-retirement plans adjustment 114 114 — Cash flow hedging instruments 46 46 — Total other comprehensive income (loss), net of tax 48 Dividends declared (794) (794) Stock-based compensation 47 47 Reacquired stock (1,058) (1,058) Issuances pursuant to stock option and benefit plans 94 (71) 165 Balance at September 30, 2018 $ 10,311 $ 5,606 $ 40,120 $ (28,510) $ (6,968) $ 63 Nine months ended September 30, 2018 3M Company Shareholders Common Accumulated Stock and Other Additional Comprehensive Non- Paid-in Retained Treasury Income controlling (Millions) Total Capital Earnings Stock (Loss) Interest Balance at December 31, 2017 $ 11,622 $ 5,361 $ 39,115 $ (25,887) $ (7,026) $ 59 Net income 4,014 4,002 12 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (441) (433) (8) Defined benefit pension and post-retirement plans adjustment 344 344 — Cash flow hedging instruments 147 147 — Total other comprehensive income (loss), net of tax 50 Dividends declared (2,406) (2,406) Stock-based compensation 245 245 Reacquired stock (3,621) (3,621) Issuances pursuant to stock option and benefit plans 407 (591) 998 Balance at September 30, 2018 $ 10,311 $ 5,606 $ 40,120 $ (28,510) $ (6,968) $ 63 |
Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M | Three months ended September 30, 2019 Total Defined Benefit Cash Flow Accumulated Pension and Hedging Other Cumulative Postretirement Instruments, Comprehensive Translation Plans Unrealized Income (Millions) Adjustment Adjustment Gain (Loss) (Loss) Balance at June 30, 2019, net of tax: $ (1,912) $ (5,369) $ 9 $ (7,272) Other comprehensive income (loss), before tax: Amounts before reclassifications (149) — 31 (118) Amounts reclassified out — 101 (21) 80 Total other comprehensive income (loss), before tax (149) 101 10 (38) Tax effect (51) (25) (2) (78) Total other comprehensive income (loss), net of tax (200) 76 8 (116) Balance at September 30, 2019, net of tax: $ (2,112) $ (5,293) $ 17 $ (7,388) Nine months ended September 30, 2019 Total Defined Benefit Cash Flow Accumulated Pension and Hedging Other Cumulative Postretirement Instruments, Comprehensive Translation Plans Unrealized Income (Millions) Adjustment Adjustment Gain (Loss) (Loss) Balance at December 31, 2018, net of tax: $ (2,098) $ (4,832) $ 64 $ (6,866) Impact of adoption of ASU No. 2018-02 (See Note 1) (13) (817) (23) (853) Other comprehensive income (loss), before tax: Amounts before reclassifications (86) 153 14 81 Amounts reclassified out 142 310 (48) 404 Total other comprehensive income (loss), before tax 56 463 (34) 485 Tax effect (57) (107) 10 (154) Total other comprehensive income (loss), net of tax (1) 356 (24) 331 Balance at September 30, 2019, net of tax: $ (2,112) $ (5,293) $ 17 $ (7,388) Three months ended September 30, 2018 Total Defined Benefit Cash Flow Accumulated Pension and Hedging Other Cumulative Postretirement Instruments, Comprehensive Translation Plans Unrealized Income (Millions) Adjustment Adjustment Gain (Loss) (Loss) Balance at June 30, 2018, net of tax: $ (1,962) $ (5,046) $ (11) $ (7,019) Other comprehensive income (loss), before tax: Amounts before reclassifications (110) — 22 (88) Amounts reclassified out — 150 37 187 Total other comprehensive income (loss), before tax (110) 150 59 99 Tax effect 1 (36) (13) (48) Total other comprehensive income (loss), net of tax (109) 114 46 51 Balance at September 30, 2018, net of tax: $ (2,071) $ (4,932) $ 35 $ (6,968) Nine months ended September 30, 2018 Total Defined Benefit Cash Flow Accumulated Pension and Hedging Other Cumulative Postretirement Instruments, Comprehensive Translation Plans Unrealized Income (Millions) Adjustment Adjustment Gain (Loss) (Loss) Balance at December 31, 2017, net of tax: $ (1,638) $ (5,276) $ (112) $ (7,026) Other comprehensive income (loss), before tax: Amounts before reclassifications (392) — 122 (270) Amounts reclassified out — 452 99 551 Total other comprehensive income (loss), before tax (392) 452 221 281 Tax effect (41) (108) (74) (223) Total other comprehensive income (loss), net of tax (433) 344 147 58 Balance at September 30, 2018, net of tax $ (2,071) $ (4,932) $ 35 $ (6,968) |
Reclassifications Out of Accumulated Other Comprehensive Income | Amount Reclassified from Details about Accumulated Other Accumulated Other Comprehensive Income Comprehensive Income Components Three months ended September 30, Nine months ended September 30, Location on Income (Millions) 2019 2018 2019 2018 Statement Cumulative translation adjustment Deconsolidation of Venezuelan subsidiary $ — $ — $ (142) $ — Other income (expense), net Total before tax — — (142) — Tax effect — — — — Provision for income taxes Net of tax $ — $ — $ (142) $ — Defined benefit pension and postretirement plans adjustments Gains (losses) associated with defined benefit pension and postretirement plans amortization Prior service benefit $ 18 $ 20 $ 50 $ 58 See Note 11 Net actuarial loss (119) (170) (358) (510) See Note 11 Deconsolidation of Venezuelan subsidiary — — (2) — Other income (expense), net Total before tax (101) (150) (310) (452) Tax effect 25 36 70 108 Provision for income taxes Net of tax $ (76) $ (114) $ (240) $ (344) Cash flow hedging instruments gains (losses) Foreign currency forward/option contracts $ 22 $ (37) $ 50 $ (98) Cost of sales Interest rate swap contracts (1) — (2) (1) Interest expense Total before tax 21 (37) 48 (99) Tax effect (4) 8 (9) 22 Provision for income taxes Net of tax $ 17 $ (29) $ 39 $ (77) Total reclassifications for the period, net of tax $ (59) $ (143) $ (343) $ (421) |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Marketable Securities. | |
Schedule of marketable securities | (Millions) September 30, 2019 December 31, 2018 Commercial paper $ — $ 366 Certificates of deposit/time deposits 27 10 U.S. municipal securities 3 3 Asset-backed securities — 1 Current marketable securities $ 30 $ 380 U.S. municipal securities $ 46 $ 37 Non-current marketable securities $ 46 $ 37 Total marketable securities $ 76 $ 417 |
Marketable securities by contractual maturity | (Millions) September 30, 2019 Due in one year or less $ 30 Due after one year through five years 13 Due after five years through ten years 24 Due after ten years 9 Total marketable securities $ 76 |
Long-Term Debt and Short-Term_2
Long-Term Debt and Short-Term Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Long-Term Debt and Short-Term Borrowings | |
Schedule of Maturities of Long-Term Debt | Remainder of After 2019 2020 2021 2022 2023 2024 2024 Total $ 105 $ 1,305 $ 1,671 $ 1,591 $ 1,796 $ 1,101 $ 11,225 $ 18,794 |
Pension and Postretirement Be_2
Pension and Postretirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Pension and Postretirement Benefit Plans | |
Components of net periodic benefit cost (benefit) | Three months ended September 30, Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2019 2018 2019 2018 2019 2018 Net periodic benefit cost (benefit) Operating expense Service cost $ 63 $ 72 $ 32 $ 37 $ 10 $ 13 Non-operating expense Interest cost $ 155 $ 141 $ 40 $ 40 $ 20 $ 20 Expected return on plan assets (260) (272) (75) (78) (20) (21) Amortization of prior service benefit (6) (6) (3) (4) (9) (10) Amortization of net actuarial loss 91 126 20 29 8 15 Total non-operating expense (benefit) (20) (11) (18) (13) (1) 4 Total net periodic benefit cost (benefit) $ 43 $ 61 $ 14 $ 24 $ 9 $ 17 Nine months ended September 30, Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2019 2018 2019 2018 2019 2018 Net periodic benefit cost (benefit) Operating expense Service cost $ 188 $ 216 $ 98 $ 110 $ 32 $ 39 Non-operating expense Interest cost $ 466 $ 423 $ 118 $ 120 $ 62 $ 60 Expected return on plan assets (780) (816) (225) (235) (61) (63) Amortization of prior service benefit (18) (18) (9) (10) (23) (30) Amortization of net actuarial loss 274 378 59 87 25 45 Settlements, curtailments, special termination benefits and other 35 — 1 — — — Total non-operating expense (benefit) (23) (33) (56) (38) 3 12 Total net periodic benefit cost (benefit) $ 165 $ 183 $ 42 $ 72 $ 35 $ 51 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivatives | |
Gain (loss) on derivative instruments designated as cash flow hedges | Pretax Gain (Loss) Recognized in Other Pretax Gain (Loss) Reclassified Comprehensive from Accumulated Other Income on Derivative Comprehensive Income into Income Three months ended September 30, 2019 (Millions) Amount Location Amount Foreign currency forward/option contracts $ 105 Cost of sales $ 22 Interest rate swap contracts (74) Interest expense (1) Total $ 31 $ 21 Nine months ended September 30, 2019 (Millions) Amount Location Amount Foreign currency forward/option contracts $ 137 Cost of sales $ 50 Interest rate swap contracts (123) Interest expense (2) Total $ 14 $ 48 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 Portion of Derivative Comprehensive Income Recognized in Income Three months ended September 30, 2018 (Millions) Amount Location Amount Location Amount Foreign currency forward/option contracts $ 12 Cost of sales $ (37) Cost of sales $ — Interest rate swap contracts 10 Interest expense — Interest expense — Total $ 22 $ (37) $ — Nine months ended September 30, 2018 (Millions) Amount Location Amount Location Amount Foreign currency forward/option contracts $ 112 Cost of sales $ (98) Cost of sales $ — Interest rate swap contracts 10 Interest expense (1) Interest expense — Total $ 122 $ (99) $ — |
Gain (loss) on derivative instruments designated as fair value hedges | Gain (Loss) on Derivative Gain (Loss) on Hedged Item Recognized in Income Recognized in Income Three months ended September 30, 2018 (Millions) Location Amount Location Amount Interest rate swap contracts Interest expense $ — Interest expense $ — Total $ — $ — Nine months ended September 30, 2018 (Millions) Location Amount Location Amount Interest rate swap contracts Interest expense $ (12) Interest expense $ 12 Total $ (12) $ 12 The following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges: Cumulative Amount of Fair Value Hedging Carrying Value of the Adjustment Included in the Carrying Value Hedged Liabilities (in millions) of the Hedged Liabilities (in millions) Location on the Consolidated Balance Sheet September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 Short-term borrowings and current portion of long-term debt $ 499 $ 596 $ (1) $ (4) Long-term debt 771 1,276 26 18 Total $ 1,270 $ 1,872 $ 25 $ 14 |
Gain (loss) on derivative and non-derivative instruments designated as net investment hedges | Pretax Gain (Loss) Recognized as Cumulative Translation Amount Excluded within Other from Effectiveness Testing Comprehensive Income Recognized in Income Three months ended September 30, 2019 (Millions) Amount Location Amount Foreign currency denominated debt $ 177 Cost of sales $ — Foreign currency forward contracts 38 Cost of sales 6 Total $ 215 $ 6 Nine months ended September 30, 2019 (Millions) Amount Location Amount Foreign currency denominated debt $ 205 Cost of sales $ — Foreign currency forward contracts 43 Cost of sales 18 Total $ 248 $ 18 Pretax Gain (Loss) Recognized as Cumulative Translation within Other Ineffective Portion of Gain (Loss) on Comprehensive Income Instrument and Amount Excluded on Effective Portion of from Effectiveness Testing Instrument Recognized in Income Three months ended September 30, 2018 (Millions) Amount Location Amount Foreign currency denominated debt $ (14) Cost of sales $ — Foreign currency forward contracts (3) Cost of sales 1 Total $ (17) $ 1 Nine months ended September 30, 2018 (Millions) Amount Location Amount Foreign currency denominated debt $ 157 Cost of sales $ (2) Foreign currency forward contracts 14 Cost of sales 1 Total $ 171 $ (1) |
Gain (loss) on derivative instruments not designated as hedging instruments | Three months ended September 30, 2019 Nine months ended September 30, 2019 Gain (Loss) on Derivative Recognized in Gain (Loss) on Derivative Recognized in Income Income (Millions) Location Amount Location Amount Foreign currency forward/option contracts Cost of sales $ 6 Cost of sales $ 4 Foreign currency forward contracts Interest expense (8) Interest expense (26) Total $ (2) $ (22) Three months ended September 30, 2018 Nine months ended September 30, 2018 Gain (Loss) on Derivative Recognized in Gain (Loss) on Derivative Recognized in Income Income (Millions) Location Amount Location Amount Foreign currency forward/option contracts Cost of sales $ 11 Cost of sales $ 11 Foreign currency forward contracts Interest expense (7) Interest expense (98) Total $ 4 $ (87) |
Location in consolidated statement of income and pre-tax amounts recognized in income related to derivative instruments designated in cash flow or fair value hedging relationship | Location and Amount of Gain (Loss) Recognized in Income Location and Amount of Gain (Loss) Recognized in Income Three months ended September 30, 2019 Nine months ended September 30, 2019 (Millions) Cost of sales Other expense Cost of Goods Sold Other expense (income), net) Total amounts of income and expense line items presented in the consolidated statement of income in which the effects of cash flow or fair value hedges are recorded $ 4,188 $ 45 $ 12,811 $ 349 The effects of fair value and cash flow hedging: Gain or (loss) on cash flow hedging relationships: Foreign currency forward/option contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income into income $ 22 $ — $ 50 $ — Interest rate swap contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income into income — (1) — (2) Gain or (loss) on fair value hedging relationships: Interest rate swap contracts: Hedged items $ — $ 1 $ — $ (11) Derivatives designated as hedging instruments — (1) — 11 |
Location and Fair Value of Derivative Instruments | Gross Assets Liabilities September 30, 2019 Notional Fair Fair (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ 2,235 Other current assets $ 128 Other current liabilities $ 2 Foreign currency forward/option contracts 1,110 Other assets 70 Other liabilities 1 Interest rate swap contracts 500 Other current assets — Other current liabilities 1 Interest rate swap contracts 603 Other assets 20 Other liabilities — Total derivatives designated as hedging instruments $ 218 $ 4 Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ 1,931 Other current assets $ 9 Other current liabilities $ 10 Total derivatives not designated as hedging instruments $ 9 $ 10 Total derivative instruments $ 227 $ 14 Gross Assets Liabilities December 31, 2018 Notional Fair Fair (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ 2,277 Other current assets $ 74 Other current liabilities $ 12 Foreign currency forward/option contracts 1,099 Other assets 39 Other liabilities 4 Interest rate swap contracts 1,000 Other current assets — Other current liabilities 14 Interest rate swap contracts 1,403 Other assets 19 Other liabilities 17 Total derivatives designated as hedging instruments $ 132 $ 47 Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ 2,484 Other current assets $ 14 Other current liabilities $ 6 Total derivatives not designated as hedging instruments $ 14 $ 6 Total derivative instruments $ 146 $ 53 |
Offsetting Assets | Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties 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 September 30, 2019 Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Liabilities Received Derivative Assets Derivatives subject to master netting agreements $ 227 $ 9 $ — $ 218 Derivatives not subject to master netting agreements — — Total $ 227 $ 218 December 31, 2018 (Millions) Derivatives subject to master netting agreements $ 146 $ 38 $ — $ 108 Derivatives not subject to master netting agreements — — Total $ 146 $ 108 |
Offsetting Liabilities | Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties 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 September 30, 2019 Consolidated Recognized Cash Collateral Net Amount of (Millions) Balance Sheet Derivative Assets Pledged Derivative Liabilities Derivatives subject to master netting agreements $ 14 $ 9 $ — $ 5 Derivatives not subject to master netting agreements — — Total $ 14 $ 5 December 31, 2018 (Millions) Derivatives subject to master netting agreements $ 53 $ 38 $ — $ 15 Derivatives not subject to master netting agreements — — Total $ 53 $ 15 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Measurements | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | Fair Value Measurements Description Fair Value at Using Inputs Considered as (Millions) September 30, 2019 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: Commercial paper $ — $ — $ — $ — Certificates of deposit/time deposits 27 — 27 — U.S. municipal securities 49 — — 49 Investments 22 22 — — Derivative instruments — assets: Foreign currency forward/option contracts 207 — 207 — Interest rate swap contracts 20 — 20 — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts 13 — 13 — Interest rate swap contracts 1 — 1 — Fair Value Measurements Description Fair Value at Using Inputs Considered as (Millions) December 31, 2018 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: Commercial paper $ 366 $ — $ 366 $ — Certificates of deposit/time deposits 10 — 10 — Asset-backed securities 1 — 1 — U.S. municipal securities 40 — — 40 Derivative instruments — assets: Foreign currency forward/option contracts 127 — 127 — Interest rate swap contracts 19 — 19 — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts 22 — 22 — Interest rate swap contracts 31 — 31 — |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | Three months ended Nine months ended Marketable securities — certain U.S. municipal securities only September 30, September 30, (Millions) 2019 2018 2019 2018 Beginning balance $ 49 $ 30 $ 40 $ 30 Total gains or losses: Included in earnings — — — — Included in other comprehensive income — — — — Purchases and issuances — — 9 — Sales and settlements — — — — Transfers in and/or out of level 3 — — — — Ending balance $ 49 $ 30 $ 49 $ 30 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 | September 30, 2019 December 31, 2018 Carrying Fair Carrying Fair (Millions) Value Value Value Value Long-term debt, excluding current portion $ 17,479 $ 18,573 $ 13,411 $ 13,586 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Schedule of components of lease expense | Three months ended Nine months ended (Millions) September 30, 2019 September 30, 2019 Operating lease cost $ 78 $ 229 Finance lease cost: Amortization of assets 5 15 Interest on lease liabilities — 1 Variable lease cost 26 68 Total net lease cost $ 109 $ 313 |
Schedule of supplemental balance sheet information | Location on Face of As of: (Millions unless noted) Balance Sheet September 30, 2019 Operating leases: Operating lease right of use assets Operating lease right of use assets $ 834 Current operating lease liabilities Operating lease liabilities - current $ 241 Noncurrent operating lease liabilities Operating lease liabilities 584 Total operating lease liabilities $ 825 Finance leases: Property and equipment, at cost Property, plant and equipment $ 235 Accumulated amortization Property, plant and equipment (accumulated depreciation) (99) Property and equipment, net $ 136 Current obligations of finance leases Other current liabilities $ 18 Finance leases, net of current obligations Other liabilities 116 Total finance lease liabilities $ 134 Weighted average remaining lease term (in years): Operating leases 5.7 Finance leases 9.2 Weighted average discount rate: Operating leases 3.3 % Finance leases 3.8 % |
Schedule of supplemental cash flow and other information | Nine months ended (Millions) September 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 231 Operating cash flows from finance leases 1 Financing cash flows from finance leases 12 Right of use assets obtained in exchange for lease liabilities: Operating leases 288 Finance leases 58 Gain on sale leaseback transactions, net 59 |
Schedule of maturities of operating lease liabilities | September 30, 2019 (Millions) Finance Leases Operating Leases Remainder of 2019 $ 8 $ 73 2020 20 241 2021 16 168 2022 15 123 2023 15 85 After 2023 67 211 Total $ 141 $ 901 Less: Amounts representing interest (7) (76) Present value of future minimum lease payments 134 825 Less: Current obligations 18 241 Long-term obligations $ 116 $ 584 |
Schedule of maturities of finance lease liabilities | September 30, 2019 (Millions) Finance Leases Operating Leases Remainder of 2019 $ 8 $ 73 2020 20 241 2021 16 168 2022 15 123 2023 15 85 After 2023 67 211 Total $ 141 $ 901 Less: Amounts representing interest (7) (76) Present value of future minimum lease payments 134 825 Less: Current obligations 18 241 Long-term obligations $ 116 $ 584 |
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, 2018, were as follows: Operating (Millions) Capital Leases Leases 2019 $ 18 $ 283 2020 16 208 2021 14 153 2022 12 122 2023 12 92 After 2023 32 253 Total $ 104 $ 1,111 Less: Amounts representing interest 12 Present value of future minimum lease payments 92 Less: Current obligations under capital leases 17 Long-term obligations under capital leases $ 75 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation Expense | Stock-Based Compensation Expense Three months ended Nine months ended September 30, September 30, (Millions) 2019 2018 2019 2018 Cost of sales $ 8 $ 8 $ 39 $ 40 Selling, general and administrative expenses 33 35 151 177 Research, development and related expenses 7 7 40 41 Stock-based compensation expenses $ 48 $ 50 $ 230 $ 258 Income tax benefits $ (12) $ (20) $ (120) $ (137) Stock-based compensation expenses (benefits), net of tax $ 36 $ 30 $ 110 $ 121 |
Stock Option Activity | Stock Option Program The following table summarizes stock option activity during the nine months ended September 30, 2019: Weighted Average Weighted Remaining Aggregate Number of Average Contractual Intrinsic Value (Options in thousands) Options Exercise Price Life (months) (millions) Under option — January 1 34,569 $ 138.98 Granted: Annual 3,457 200.80 Exercised (3,390) 90.13 Forfeited (96) 198.89 September 30 34,540 $ 149.80 66 $ 910 Options exercisable September 30 27,295 $ 135.36 56 $ 910 |
Stock Option Assumptions | Stock Option Assumptions Annual 2019 Exercise price $ 201.12 Risk-free interest rate 2.6 % Dividend yield 2.5 % Expected volatility 20.4 % Expected life (months) 79 Black-Scholes fair value $ 34.19 |
Restricted Stock and Restricted Stock Units Activity | Restricted Stock and Restricted Stock Units The following table summarizes restricted stock and restricted stock unit activity during the nine months ended September 30, 2019: Weighted Average Number of Grant Date (Shares in thousands) Shares Fair Value Nonvested balance — As of January 1 1,789 $ 180.02 Granted Annual 564 200.41 Other 13 181.09 Vested (686) 148.24 Forfeited (50) 190.88 As of September 30 1,630 $ 200.12 |
Performance Shares Activity | The following table summarizes performance share activity during the nine months ended September 30, 2019: Weighted Average Number of Grant Date (Shares in thousands) Shares Fair Value Undistributed balance — As of January 1 562 $ 188.96 Granted 162 207.49 Distributed (210) 162.16 Performance change (72) 206.51 Forfeited (22) 209.93 As of September 30 420 $ 205.34 |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Segments | |
Business Segments | Business Segment Information Three months ended Nine months ended September 30, September 30, (Millions) 2019 2018 2019 2018 Net Sales Safety and Industrial $ 2,849 $ 3,021 $ 8,796 $ 9,542 Transportation and Electronics 2,503 2,619 7,312 7,665 Health Care 1,721 1,643 5,290 5,118 Consumer 1,324 1,302 3,821 3,819 Corporate and Unallocated 28 35 98 47 Elimination of Dual Credit (434) (468) (1,292) (1,371) Total Company $ 7,991 $ 8,152 $ 24,025 $ 24,820 Operating Income Safety and Industrial $ 765 $ 697 $ 2,062 $ 2,753 Transportation and Electronics 631 726 1,746 2,051 Health Care 459 475 1,406 1,443 Consumer 308 300 809 811 Corporate and Unallocated (40) (57) (858) (1,293) Elimination of Dual Credit (112) (125) (316) (341) Total Company $ 2,011 $ 2,016 $ 4,849 $ 5,424 |
Significant Accounting Polici_4
Significant Accounting Policies - Basis of Presentation (Details) - segment | 3 Months Ended | 6 Months Ended |
Mar. 31, 2019 | Sep. 30, 2019 | |
Significant Accounting Policies | ||
Number of business segments | 5 | 4 |
Significant Accounting Polici_5
Significant Accounting Policies - Foreign Currency Translation (Details) $ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2018USD ($)item | Jun. 30, 2018 | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018 | Sep. 30, 2019ARS ($) | |
Foreign Currency Translation | ||||||||
Pre-tax charge | $ 45 | $ 51 | $ 349 | $ 144 | ||||
Foreign currency transaction loss | $ 69 | $ 190 | ||||||
Venezuela | ||||||||
Foreign Currency Translation | ||||||||
Pre-tax charge | $ 162 | |||||||
Foreign currency transaction loss | $ (144) | |||||||
Subsidiary | Venezuela | ||||||||
Foreign Currency Translation | ||||||||
Denominator used to determine conversion from Venezuelan Bolivar to Sovereign Bolivar. | item | 100,000 | |||||||
Subsidiary | Argentina | ||||||||
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 | |||||||
Foreign currency exchange rate | 57 | |||||||
Maximum | Subsidiary | Argentina | ||||||||
Foreign Currency Translation | ||||||||
Operating income of subsidiaries as percent of consolidated amount high end of range | 0.50% | |||||||
Balance of the Company's overall net monetary assets valued functional currency | $ 430 |
Significant Accounting Polici_6
Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings per share | ||||
Options outstanding not included in computation of diluted earnings per share (in shares) | 11.9 | 3.2 | 8 | 2.8 |
Numerator: | ||||
Net income attributable to 3M | $ 1,583 | $ 1,543 | $ 3,601 | $ 4,002 |
Denominator: | ||||
Denominator for weighted average 3M common shares outstanding - basic (in shares) | 576.5 | 585.6 | 577.2 | 591.1 |
Dilution associated with the Company's stock-based compensation plans (in shares) | 6.5 | 12.8 | 8.7 | 14 |
Denominator for weighted average 3M common shares outstanding - diluted (in shares) | 583 | 598.4 | 585.9 | 605.1 |
Earnings per share attributable to 3M common shareholders - basic (in dollars per share) | $ 2.75 | $ 2.64 | $ 6.24 | $ 6.77 |
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share) | $ 2.72 | $ 2.58 | $ 6.15 | $ 6.61 |
Significant Accounting Polici_7
Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Stockholders' equity | $ 10,702 | $ 9,796 | |||||
Retained earnings | 42,085 | 40,636 | |||||
Lease assets | 834 | ||||||
Lease liabilities | 825 | ||||||
ASU 2016-02 Leases | |||||||
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Cumulative effect of new accounting principle in period of adoption | 14 | ||||||
ASU 2016-02 Leases | Adjustment | |||||||
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Lease assets | $ 800 | ||||||
Lease liabilities | 800 | ||||||
Retained Earnings | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | |||||||
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | 900 | ||||||
Cumulative effect of new accounting principle in period of adoption | 853 | ||||||
Retained Earnings | ASU 2016-02 Leases | |||||||
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Cumulative effect of new accounting principle in period of adoption | 14 | ||||||
Retained Earnings | ASU 2016-02 Leases | Adjustment | |||||||
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Stockholders' equity | 14 | ||||||
Total Accumulated Other Comprehensive Income (Loss) | |||||||
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Stockholders' equity | (7,388) | $ (7,272) | $ (6,866) | $ (6,968) | $ (7,019) | $ (7,026) | |
Total Accumulated Other Comprehensive Income (Loss) | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | |||||||
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | $ 900 | ||||||
Cumulative effect of new accounting principle in period of adoption | (853) | ||||||
Total Accumulated Other Comprehensive Income (Loss) | ASU 2016-02 Leases | |||||||
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Cumulative effect of new accounting principle in period of adoption | $ (853) |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition | |||||
Retained earnings | $ 42,085 | $ 42,085 | $ 40,636 | ||
Contract Balance | |||||
Current deferred income balances | 605 | $ 605 | $ 617 | ||
Software license contracts term | 1 year | ||||
Net Sales | 7,991 | $ 8,152 | $ 24,025 | $ 24,820 | |
ASU 2014-09 Revenue from Contracts with Customers | |||||
Contract Balance | |||||
Net Sales | $ 80 | $ 70 | $ 560 | $ 460 |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue | ||||
Net Sales | $ 7,991 | $ 8,152 | $ 24,025 | $ 24,820 |
Corporate and Unallocated | ||||
Disaggregation of Revenue | ||||
Net Sales | 28 | 35 | 98 | 47 |
Elimination of Dual Credit | ||||
Disaggregation of Revenue | ||||
Net Sales | (434) | (468) | (1,292) | (1,371) |
Safety and Industrial | ||||
Disaggregation of Revenue | ||||
Net Sales | 2,849 | 3,021 | 8,796 | 9,542 |
Safety and Industrial | Abrasives | ||||
Disaggregation of Revenue | ||||
Net Sales | 345 | 362 | 1,079 | 1,171 |
Safety and Industrial | Adhesives and Tapes | ||||
Disaggregation of Revenue | ||||
Net Sales | 696 | 734 | 2,075 | 2,191 |
Safety and Industrial | Automotive Aftermarket | ||||
Disaggregation of Revenue | ||||
Net Sales | 310 | 334 | 929 | 1,038 |
Safety and Industrial | Closure and Masking Systems | ||||
Disaggregation of Revenue | ||||
Net Sales | 282 | 300 | 835 | 920 |
Safety and Industrial | Communication Markets | ||||
Disaggregation of Revenue | ||||
Net Sales | 8 | 169 | ||
Safety and Industrial | Electrical Markets | ||||
Disaggregation of Revenue | ||||
Net Sales | 298 | 315 | 911 | 949 |
Safety and Industrial | Personal Safety | ||||
Disaggregation of Revenue | ||||
Net Sales | 813 | 864 | 2,656 | 2,745 |
Safety and Industrial | Roofing Granules | ||||
Disaggregation of Revenue | ||||
Net Sales | 101 | 83 | 293 | 283 |
Safety and Industrial | Other Safety and Industrial | ||||
Disaggregation of Revenue | ||||
Net Sales | 4 | 21 | 18 | 76 |
Transportation and Electronics | ||||
Disaggregation of Revenue | ||||
Net Sales | 2,503 | 2,619 | 7,312 | 7,665 |
Transportation and Electronics | Advanced Materials | ||||
Disaggregation of Revenue | ||||
Net Sales | 319 | 313 | 961 | 932 |
Transportation and Electronics | Automotive and Aerospace | ||||
Disaggregation of Revenue | ||||
Net Sales | 485 | 509 | 1,486 | 1,610 |
Transportation and Electronics | Commercial Solutions | ||||
Disaggregation of Revenue | ||||
Net Sales | 437 | 436 | 1,361 | 1,415 |
Transportation and Electronics | Electronics | ||||
Disaggregation of Revenue | ||||
Net Sales | 1,001 | 1,101 | 2,759 | 2,951 |
Transportation and Electronics | Transportation Safety | ||||
Disaggregation of Revenue | ||||
Net Sales | 261 | 260 | 745 | 758 |
Transportation and Electronics | Other Transportation and Electronics | ||||
Disaggregation of Revenue | ||||
Net Sales | (1) | |||
Health Care | ||||
Disaggregation of Revenue | ||||
Net Sales | 1,721 | 1,643 | 5,290 | 5,118 |
Health Care | Drug Delivery | ||||
Disaggregation of Revenue | ||||
Net Sales | 99 | 102 | 301 | 340 |
Health Care | Food Safety | ||||
Disaggregation of Revenue | ||||
Net Sales | 86 | 82 | 254 | 246 |
Health Care | Health Information Systems | ||||
Disaggregation of Revenue | ||||
Net Sales | 296 | 208 | 853 | 618 |
Health Care | Medical Solutions | ||||
Disaggregation of Revenue | ||||
Net Sales | 737 | 732 | 2,294 | 2,273 |
Health Care | Oral Care | ||||
Disaggregation of Revenue | ||||
Net Sales | 312 | 317 | 991 | 1,013 |
Health Care | Separation and Purification Sciences | ||||
Disaggregation of Revenue | ||||
Net Sales | 191 | 203 | 602 | 631 |
Health Care | Other Health Care | ||||
Disaggregation of Revenue | ||||
Net Sales | (1) | (5) | (3) | |
Consumer | ||||
Disaggregation of Revenue | ||||
Net Sales | 1,324 | 1,302 | 3,821 | 3,819 |
Consumer | Consumer Health Care | ||||
Disaggregation of Revenue | ||||
Net Sales | 97 | 97 | 297 | 300 |
Consumer | Home Care | ||||
Disaggregation of Revenue | ||||
Net Sales | 242 | 249 | 747 | 773 |
Consumer | Home Improvement | ||||
Disaggregation of Revenue | ||||
Net Sales | 612 | 579 | 1,739 | 1,694 |
Consumer | Stationery and Office | ||||
Disaggregation of Revenue | ||||
Net Sales | 361 | 367 | 1,006 | 1,022 |
Consumer | Other Consumer | ||||
Disaggregation of Revenue | ||||
Net Sales | 12 | 10 | 32 | 30 |
United States | ||||
Disaggregation of Revenue | ||||
Net Sales | 3,292 | 3,265 | 9,742 | 9,657 |
United States | Corporate and Unallocated | ||||
Disaggregation of Revenue | ||||
Net Sales | 25 | 36 | 91 | 43 |
United States | Elimination of Dual Credit | ||||
Disaggregation of Revenue | ||||
Net Sales | (150) | (164) | (462) | (471) |
United States | Safety and Industrial | ||||
Disaggregation of Revenue | ||||
Net Sales | 1,153 | 1,208 | 3,498 | 3,726 |
United States | Transportation and Electronics | ||||
Disaggregation of Revenue | ||||
Net Sales | 594 | 627 | 1,796 | 1,838 |
United States | Health Care | ||||
Disaggregation of Revenue | ||||
Net Sales | 827 | 740 | 2,477 | 2,248 |
United States | Consumer | ||||
Disaggregation of Revenue | ||||
Net Sales | 843 | 818 | 2,342 | 2,273 |
Asia Pacific | ||||
Disaggregation of Revenue | ||||
Net Sales | 2,490 | 2,621 | 7,383 | 7,801 |
Asia Pacific | Corporate and Unallocated | ||||
Disaggregation of Revenue | ||||
Net Sales | 1 | 1 | ||
Asia Pacific | Elimination of Dual Credit | ||||
Disaggregation of Revenue | ||||
Net Sales | (207) | (225) | (591) | (639) |
Asia Pacific | Safety and Industrial | ||||
Disaggregation of Revenue | ||||
Net Sales | 713 | 788 | 2,190 | 2,397 |
Asia Pacific | Transportation and Electronics | ||||
Disaggregation of Revenue | ||||
Net Sales | 1,390 | 1,464 | 3,917 | 4,151 |
Asia Pacific | Health Care | ||||
Disaggregation of Revenue | ||||
Net Sales | 360 | 357 | 1,121 | 1,114 |
Asia Pacific | Consumer | ||||
Disaggregation of Revenue | ||||
Net Sales | 233 | 237 | 745 | 778 |
Europe, Middle East and Africa | ||||
Disaggregation of Revenue | ||||
Net Sales | 1,465 | 1,527 | 4,682 | 5,077 |
Europe, Middle East and Africa | Corporate and Unallocated | ||||
Disaggregation of Revenue | ||||
Net Sales | 1 | 1 | ||
Europe, Middle East and Africa | Elimination of Dual Credit | ||||
Disaggregation of Revenue | ||||
Net Sales | (49) | (52) | (158) | (178) |
Europe, Middle East and Africa | Safety and Industrial | ||||
Disaggregation of Revenue | ||||
Net Sales | 626 | 665 | 2,035 | 2,296 |
Europe, Middle East and Africa | Transportation and Electronics | ||||
Disaggregation of Revenue | ||||
Net Sales | 363 | 378 | 1,138 | 1,218 |
Europe, Middle East and Africa | Health Care | ||||
Disaggregation of Revenue | ||||
Net Sales | 388 | 399 | 1,253 | 1,303 |
Europe, Middle East and Africa | Consumer | ||||
Disaggregation of Revenue | ||||
Net Sales | 136 | 137 | 413 | 438 |
Latin America and Canada | ||||
Disaggregation of Revenue | ||||
Net Sales | 744 | 741 | 2,220 | 2,289 |
Latin America and Canada | Corporate and Unallocated | ||||
Disaggregation of Revenue | ||||
Net Sales | 1 | 6 | 3 | |
Latin America and Canada | Elimination of Dual Credit | ||||
Disaggregation of Revenue | ||||
Net Sales | (27) | (25) | (81) | (81) |
Latin America and Canada | Safety and Industrial | ||||
Disaggregation of Revenue | ||||
Net Sales | 356 | 361 | 1,073 | 1,126 |
Latin America and Canada | Transportation and Electronics | ||||
Disaggregation of Revenue | ||||
Net Sales | 157 | 149 | 463 | 458 |
Latin America and Canada | Health Care | ||||
Disaggregation of Revenue | ||||
Net Sales | 145 | 146 | 438 | 453 |
Latin America and Canada | Consumer | ||||
Disaggregation of Revenue | ||||
Net Sales | 112 | 110 | 321 | 330 |
Other Unallocated | ||||
Disaggregation of Revenue | ||||
Net Sales | (2) | (2) | (4) | |
Other Unallocated | Corporate and Unallocated | ||||
Disaggregation of Revenue | ||||
Net Sales | (1) | (1) | 1 | |
Other Unallocated | Elimination of Dual Credit | ||||
Disaggregation of Revenue | ||||
Net Sales | (1) | (2) | (2) | |
Other Unallocated | Safety and Industrial | ||||
Disaggregation of Revenue | ||||
Net Sales | 1 | (1) | $ (3) | |
Other Unallocated | Transportation and Electronics | ||||
Disaggregation of Revenue | ||||
Net Sales | (1) | 1 | (2) | |
Other Unallocated | Health Care | ||||
Disaggregation of Revenue | ||||
Net Sales | $ 1 | $ 1 | $ 1 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Acquisitions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2019 | Feb. 28, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Acquisitions Information | ||||||
Purchased finite-lived intangible assets | $ 446,000,000 | $ 446,000,000 | ||||
Purchased goodwill | 508,000,000 | 508,000,000 | ||||
Supplemental information: | ||||||
Cash paid, net of cash acquired | 704,000,000 | $ (13,000,000) | ||||
Net sales | 7,991,000,000 | $ 8,152,000,000 | 24,025,000,000 | 24,820,000,000 | ||
Operating loss | (2,011,000,000) | $ (2,016,000,000) | $ (4,849,000,000) | $ (5,424,000,000) | ||
Number of business combinations completed | 0 | |||||
Maximum | ||||||
Business Acquisitions Information | ||||||
Intangible assets useful life (in years) | 14 years | |||||
Minimum | ||||||
Business Acquisitions Information | ||||||
Intangible assets useful life (in years) | 6 years | |||||
Weighted average | ||||||
Business Acquisitions Information | ||||||
Intangible assets useful life (in years) | 11 years | |||||
M*Modal | ||||||
Business Acquisitions Information | ||||||
Accounts receivable | 77,000,000 | $ 77,000,000 | ||||
Other current assets | 2,000,000 | 2,000,000 | ||||
Property, plant and equipment | 8,000,000 | 8,000,000 | ||||
Purchased goodwill | 508,000,000 | 508,000,000 | ||||
Other assets | 59,000,000 | 59,000,000 | ||||
Accounts payable and other liabilities | (124,000,000) | (124,000,000) | ||||
Interest bearing debt | (251,000,000) | (251,000,000) | ||||
Deferred tax asset/(liability) | (21,000,000) | (21,000,000) | ||||
Net assets acquired | 704,000,000 | 704,000,000 | ||||
Supplemental information: | ||||||
Cash paid | $ 700,000,000 | 708,000,000 | ||||
Less: Cash acquired | 4,000,000 | |||||
Cash paid, net of cash acquired | 704,000,000 | |||||
Assumed debt | $ 300,000,000 | |||||
Net sales | 75,000,000 | 200,000,000 | ||||
Operating loss | 5,000,000 | 40,000,000 | ||||
M*Modal | Customer related intangible assets | ||||||
Business Acquisitions Information | ||||||
Purchased finite-lived intangible assets | 275,000,000 | $ 275,000,000 | ||||
Intangible assets useful life (in years) | 14 years | |||||
M*Modal | Other technology-based intangible assets | ||||||
Business Acquisitions Information | ||||||
Purchased finite-lived intangible assets | 160,000,000 | $ 160,000,000 | ||||
Intangible assets useful life (in years) | 6 years | |||||
M*Modal | Definite-lived tradenames | ||||||
Business Acquisitions Information | ||||||
Purchased finite-lived intangible assets | $ 11,000,000 | $ 11,000,000 | ||||
Intangible assets useful life (in years) | 6 years | |||||
Acelity Inc. and its KCI subsidiaries | ||||||
Supplemental information: | ||||||
Cash paid | $ 4,500,000,000 | |||||
Assumed debt | $ 2,500,000,000 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Divestitures (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Aug. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Divestiture Information | |||
Proceeds from sale of businesses | $ 236 | $ 806 | |
Discontinued Operations, Held-for-sale | |||
Divestiture Information | |||
Disposal - Inventory | 25 | ||
Disposal - Property, plant and equipment | 10 | ||
Disposal - Intangible assets | 35 | ||
Disposal - Goodwill | $ 10 | ||
Aggregate operating income of divested businesses | $ 30 | ||
Gas and flame detection business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Divestiture Information | |||
Annual sales of divested business | $ 120 | ||
Advanced ballistic protection business | Disposal Group, Held-for-sale, Not Discontinued Operations | |||
Divestiture Information | |||
Annual sales of divested business | 85 | ||
Proceeds from sale of businesses | 91 | ||
Advanced ballistic protection business | Disposal Group, Held-for-sale, Not Discontinued Operations | Maximum | |||
Divestiture Information | |||
Maximum contingent considerations depending on outcome of pending tenders | 25 | ||
Safety and Industrial | Gas and flame detection business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Divestiture Information | |||
Estimated pre-tax gain on sale | $ 112 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Goodwill balance by business segment) (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Mar. 31, 2019USD ($)segment | Sep. 30, 2019USD ($)segment | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | |
Goodwill Information | |||||
Number of business combinations completed | 0 | ||||
Purchased goodwill from acquisitions | $ 508,000,000 | $ 508,000,000 | |||
Goodwill | |||||
Balance at the beginning of the period | $ 10,051,000,000 | $ 10,051,000,000 | 10,051,000,000 | ||
Acquisition activity | 508,000,000 | ||||
Divestiture activity | (49,000,000) | ||||
Translation and other | (100,000,000) | ||||
Balance at the end of the period | $ 10,410,000,000 | 10,410,000,000 | |||
Number of business segments | segment | 5 | 4 | |||
Previous Number Of Reportable Segments | segment | 4 | ||||
Amount of Goodwill impairment | 0 | ||||
Safety and Industrial | |||||
Goodwill | |||||
Balance at the beginning of the period | $ 4,716,000,000 | 4,716,000,000 | 4,716,000,000 | ||
Divestiture activity | (49,000,000) | ||||
Translation and other | (51,000,000) | ||||
Balance at the end of the period | $ 4,616,000,000 | 4,616,000,000 | |||
Transportation and Electronics | |||||
Goodwill | |||||
Balance at the beginning of the period | 1,857,000,000 | 1,857,000,000 | 1,857,000,000 | ||
Translation and other | (27,000,000) | ||||
Balance at the end of the period | 1,830,000,000 | 1,830,000,000 | |||
Health Care | |||||
Goodwill | |||||
Balance at the beginning of the period | 3,248,000,000 | 3,248,000,000 | 3,248,000,000 | ||
Acquisition activity | 508,000,000 | ||||
Translation and other | (53,000,000) | ||||
Balance at the end of the period | 3,703,000,000 | 3,703,000,000 | |||
Consumer | |||||
Goodwill | |||||
Balance at the beginning of the period | $ 230,000,000 | $ 230,000,000 | 230,000,000 | ||
Translation and other | 31,000,000 | ||||
Balance at the end of the period | $ 261,000,000 | $ 261,000,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Acquired Intangible Assets) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Acquired intangible assets disclosures | ||
Total gross carrying amount | $ 4,583 | $ 4,198 |
Total accumulated amortization | (2,371) | (2,182) |
Total finite-lived intangible assets - net | 2,212 | 2,016 |
Non-amortizable intangible assets (primarily tradenames) | 635 | 641 |
Total intangible assets - net | $ 2,847 | 2,657 |
Minimum | ||
Acquired intangible assets disclosures | ||
Indefinite lived tradenames years in existence | 55 years | |
Customer related intangible assets | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | $ 2,525 | 2,291 |
Total accumulated amortization | (1,107) | (998) |
Patents | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 536 | 542 |
Total accumulated amortization | (493) | (487) |
Other technology-based intangible assets | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 727 | 576 |
Total accumulated amortization | (382) | (333) |
Definite-lived tradenames | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 673 | 664 |
Total accumulated amortization | (300) | (276) |
Other amortizable intangible assets | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 122 | 125 |
Total accumulated amortization | $ (89) | $ (88) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Schedules for Amortization Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Finite Lived Intangible Asset | ||||
Amortization expense for acquired intangible assets | $ 69 | $ 61 | $ 208 | $ 188 |
Expected amortization expense for acquired intangible assets recorded as of balance sheet date | ||||
Remainder of 2019 | 69 | 69 | ||
2020 | 264 | 264 | ||
2021 | 256 | 256 | ||
2022 | 242 | 242 | ||
2023 | 213 | 213 | ||
2024 | 183 | 183 | ||
After 2024 | $ 950 | $ 950 |
Restructuring Actions and Exi_3
Restructuring Actions and Exit Activities (Details) $ in Millions | 3 Months Ended | ||
Jun. 30, 2019USD ($)person | Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($)individual | |
2019 Restructuring Actions | |||
Restructuring Cost and Reserve | |||
Restructuring and related cost, number of positions affected | person | 2,000 | ||
Restructuring charges | $ 148 | ||
Operating restructuring charges | 112 | ||
2019 Restructuring Actions | Employee-Related | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 72 | ||
2019 Restructuring Actions | Asset-Related | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 40 | ||
2019 Restructuring Actions | Cost of sales | |||
Restructuring Cost and Reserve | |||
Restructuring charges | 18 | ||
2019 Restructuring Actions | Selling, general and administrative expenses | |||
Restructuring Cost and Reserve | |||
Restructuring charges | 89 | ||
2019 Restructuring Actions | Research, development and related expenses | |||
Restructuring Cost and Reserve | |||
Restructuring charges | 5 | ||
2019 Restructuring Actions | Other expense (income), net | |||
Restructuring Cost and Reserve | |||
Restructuring charges | 36 | ||
2018 Restructuring Actions | |||
Restructuring Cost and Reserve | |||
Restructuring charges | $ 32 | $ 105 | |
2018 Restructuring Actions | Cost of sales | |||
Restructuring Cost and Reserve | |||
Restructuring charges | 15 | 12 | |
2018 Restructuring Actions | Selling, general and administrative expenses | |||
Restructuring Cost and Reserve | |||
Restructuring charges | 16 | 89 | |
2018 Restructuring Actions | Research, development and related expenses | |||
Restructuring Cost and Reserve | |||
Restructuring charges | 1 | $ 4 | |
Corporate and Unallocated | 2019 Restructuring Actions | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 82 | ||
Corporate and Unallocated | 2019 Restructuring Actions | Employee-Related | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 42 | ||
Corporate and Unallocated | 2019 Restructuring Actions | Asset-Related | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 40 | ||
Corporate and Unallocated | 2018 Restructuring Actions | |||
Restructuring Cost and Reserve | |||
Restructuring and related cost, number of positions affected | individual | 1,200 | ||
Restructuring charges | $ 105 | ||
Pre-tax charge related to exit activities | 22 | ||
Adjustments for reductions in cost estimates | $ 10 | ||
Safety and Industrial | 2019 Restructuring Actions | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 11 | ||
Safety and Industrial | 2019 Restructuring Actions | Employee-Related | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 11 | ||
Transportation and Electronics | 2019 Restructuring Actions | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 8 | ||
Transportation and Electronics | 2019 Restructuring Actions | Employee-Related | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 8 | ||
Health Care | 2019 Restructuring Actions | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 6 | ||
Health Care | 2019 Restructuring Actions | Employee-Related | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 6 | ||
Consumer | 2019 Restructuring Actions | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | 5 | ||
Consumer | 2019 Restructuring Actions | Employee-Related | |||
Restructuring Cost and Reserve | |||
Operating restructuring charges | $ 5 |
Restructuring Actions and Exi_4
Restructuring Actions and Exit Activities - Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
2019 Restructuring Actions | ||||
Restructuring Reserve Roll Forward | ||||
Expenses incurred | $ 148 | |||
Non-cash changes | $ (76) | |||
Cash payments | (41) | |||
Adjustments | (14) | |||
Restructuring actions balances, Ending Balance | 17 | $ 17 | ||
2018 Restructuring Actions | ||||
Restructuring Reserve Roll Forward | ||||
Restructuring actions balances, Beginning Balance | 84 | |||
Expenses incurred | $ 137 | |||
Non-cash changes | (12) | |||
Cash payments | (68) | (24) | ||
Adjustments | (3) | (17) | ||
Restructuring actions balances, Ending Balance | 13 | 13 | 84 | |
Employee-Related | 2019 Restructuring Actions | ||||
Restructuring Reserve Roll Forward | ||||
Expenses incurred | 108 | |||
Non-cash changes | (36) | |||
Cash payments | (41) | |||
Adjustments | (14) | |||
Restructuring actions balances, Ending Balance | 17 | 17 | ||
Employee-Related | 2018 Restructuring Actions | ||||
Restructuring Reserve Roll Forward | ||||
Restructuring actions balances, Beginning Balance | 84 | |||
Expenses incurred | 125 | |||
Cash payments | (68) | (24) | ||
Adjustments | (3) | (17) | ||
Restructuring actions balances, Ending Balance | 13 | $ 13 | 84 | |
Asset-Related | 2019 Restructuring Actions | ||||
Restructuring Reserve Roll Forward | ||||
Expenses incurred | $ 40 | |||
Non-cash changes | $ (40) | |||
Asset-Related | 2018 Restructuring Actions | ||||
Restructuring Reserve Roll Forward | ||||
Expenses incurred | 12 | |||
Non-cash changes | $ (12) |
Supplemental Income Statement_3
Supplemental Income Statement Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest expense | $ 109 | $ 85 | $ 324 | $ 255 | |
Interest income | (26) | (15) | (64) | (52) | |
Pension and postretirement net periodic benefit cost (benefit) | (38) | (19) | (73) | (59) | |
Loss on deconsolidation of Venezuelan subsidiary | $ 162 | 162 | |||
Total | $ 45 | $ 51 | $ 349 | $ 144 | |
Venezuela | |||||
Total | $ 162 |
Supplemental Equity and Compr_3
Supplemental Equity and Comprehensive Income Information - Dividends (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Supplemental Equity and Comprehensive Income Information | ||||||||
Dividends declared in current period (in dollars per share) | $ 1.44 | $ 1.44 | $ 1.44 | $ 1.36 | $ 1.36 | $ 1.36 | $ 4.32 | $ 4.08 |
Supplemental Equity and Compr_4
Supplemental Equity and Comprehensive Income Information - SE Rf (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Increase (decrease) in equity | ||||
Balance at the beginning of the period | $ 10,142 | $ 10,428 | $ 9,848 | $ 11,622 |
Net income | 1,588 | 1,546 | 3,612 | 4,014 |
Other comprehensive income (loss), net of tax: | ||||
Cumulative translation adjustment | (202) | (112) | (2) | (441) |
Defined benefit pension and postretirement plans adjustment | 76 | 114 | 356 | 344 |
Cash flow hedging instruments | 8 | 46 | (24) | 147 |
Total other comprehensive income (loss), net of tax | (118) | 48 | 330 | 50 |
Dividends declared | (828) | (794) | (2,488) | (2,406) |
Stock-based compensation | 49 | 47 | 218 | 245 |
Reacquired stock | (141) | (1,058) | (1,211) | (3,621) |
Issuances pursuant to stock option and benefit plans | 72 | 94 | 441 | 407 |
Balance at the end of the period | 10,764 | 10,311 | 10,764 | 10,311 |
ASU 2016-02 Leases | ||||
Increase (decrease) in equity | ||||
Impact of ASUs | 14 | 14 | ||
Common Stock and Additional Paid-in Capital | ||||
Increase (decrease) in equity | ||||
Balance at the beginning of the period | 5,821 | 5,559 | 5,652 | 5,361 |
Other comprehensive income (loss), net of tax: | ||||
Stock-based compensation | 49 | 47 | 218 | 245 |
Balance at the end of the period | 5,870 | 5,606 | 5,870 | 5,606 |
Retained Earnings | ||||
Increase (decrease) in equity | ||||
Balance at the beginning of the period | 41,362 | 39,442 | 40,636 | 39,115 |
Net income | 1,583 | 1,543 | 3,601 | 4,002 |
Other comprehensive income (loss), net of tax: | ||||
Dividends declared | (828) | (794) | (2,488) | (2,406) |
Issuances pursuant to stock option and benefit plans | (32) | (71) | (531) | (591) |
Balance at the end of the period | 42,085 | 40,120 | 42,085 | 40,120 |
Retained Earnings | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | ||||
Increase (decrease) in equity | ||||
Impact of ASUs | 853 | 853 | ||
Retained Earnings | ASU 2016-02 Leases | ||||
Increase (decrease) in equity | ||||
Impact of ASUs | 14 | 14 | ||
Treasury Stock | ||||
Increase (decrease) in equity | ||||
Balance at the beginning of the period | (29,828) | (27,617) | (29,626) | (25,887) |
Other comprehensive income (loss), net of tax: | ||||
Reacquired stock | (141) | (1,058) | (1,211) | (3,621) |
Issuances pursuant to stock option and benefit plans | 104 | 165 | 972 | 998 |
Balance at the end of the period | (29,865) | (28,510) | (29,865) | (28,510) |
Total Accumulated Other Comprehensive Income (Loss) | ||||
Increase (decrease) in equity | ||||
Balance at the beginning of the period | (7,272) | (7,019) | (6,866) | (7,026) |
Other comprehensive income (loss), net of tax: | ||||
Cumulative translation adjustment | (200) | (109) | (1) | (433) |
Defined benefit pension and postretirement plans adjustment | 76 | 114 | 356 | 344 |
Cash flow hedging instruments | 8 | 46 | (24) | 147 |
Balance at the end of the period | (7,388) | (6,968) | (7,388) | (6,968) |
Total Accumulated Other Comprehensive Income (Loss) | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | ||||
Increase (decrease) in equity | ||||
Impact of ASUs | (853) | (853) | ||
Total Accumulated Other Comprehensive Income (Loss) | ASU 2016-02 Leases | ||||
Increase (decrease) in equity | ||||
Impact of ASUs | (853) | (853) | ||
Noncontrolling Interest | ||||
Increase (decrease) in equity | ||||
Balance at the beginning of the period | 59 | 63 | 52 | 59 |
Net income | 5 | 3 | 11 | 12 |
Other comprehensive income (loss), net of tax: | ||||
Cumulative translation adjustment | (2) | (3) | (1) | (8) |
Balance at the end of the period | $ 62 | $ 63 | $ 62 | $ 63 |
Supplemental Equity and Compr_5
Supplemental Equity and Comprehensive Income Information - AOCI rf (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
AOCI Attributable to 3M, Net of Tax Roll Forward | ||||
Stockholders' Equity Attributable to 3M, Beginning Balance | $ 9,796 | |||
Other comprehensive income (loss), before tax: | ||||
Stockholders' Equity Attributable to 3M, Ending Balance | $ 10,702 | 10,702 | ||
ASU 2016-02 Leases | ||||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||||
Impact of ASUs | 14 | 14 | ||
Other comprehensive income (loss), before tax: | ||||
Impact of ASUs | 14 | 14 | ||
Cumulative Translation Adjustment | ||||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||||
Stockholders' Equity Attributable to 3M, Beginning Balance | (1,912) | $ (1,962) | (2,098) | $ (1,638) |
Other comprehensive income (loss), before tax: | ||||
Amounts before reclassifications | (149) | (110) | (86) | (392) |
Amounts reclassified out | 142 | |||
Total other comprehensive income (loss), before tax | (149) | (110) | 56 | (392) |
Tax effect | (51) | 1 | (57) | (41) |
Total other comprehensive income (loss), net of tax | (200) | (109) | (1) | (433) |
Stockholders' Equity Attributable to 3M, Ending Balance | (2,112) | (2,071) | (2,112) | (2,071) |
Cumulative Translation Adjustment | ASU 2016-02 Leases | ||||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||||
Impact of ASUs | (13) | (13) | ||
Other comprehensive income (loss), before tax: | ||||
Impact of ASUs | (13) | (13) | ||
Defined Pension and Postretirement Plans Adjustment | ||||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||||
Stockholders' Equity Attributable to 3M, Beginning Balance | (5,369) | (5,046) | (4,832) | (5,276) |
Other comprehensive income (loss), before tax: | ||||
Amounts before reclassifications | 153 | |||
Amounts reclassified out | 101 | 150 | 310 | 452 |
Total other comprehensive income (loss), before tax | 101 | 150 | 463 | 452 |
Tax effect | (25) | (36) | (107) | (108) |
Total other comprehensive income (loss), net of tax | 76 | 114 | 356 | 344 |
Stockholders' Equity Attributable to 3M, Ending Balance | (5,293) | (4,932) | (5,293) | (4,932) |
Defined Pension and Postretirement Plans Adjustment | ASU 2016-02 Leases | ||||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||||
Impact of ASUs | (817) | (817) | ||
Other comprehensive income (loss), before tax: | ||||
Impact of ASUs | (817) | (817) | ||
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | ||||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||||
Stockholders' Equity Attributable to 3M, Beginning Balance | 9 | (11) | 64 | (112) |
Other comprehensive income (loss), before tax: | ||||
Amounts before reclassifications | 31 | 22 | 14 | 122 |
Amounts reclassified out | (21) | 37 | (48) | 99 |
Total other comprehensive income (loss), before tax | 10 | 59 | (34) | 221 |
Tax effect | (2) | (13) | 10 | (74) |
Total other comprehensive income (loss), net of tax | 8 | 46 | (24) | 147 |
Stockholders' Equity Attributable to 3M, Ending Balance | 17 | 35 | 17 | 35 |
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | ASU 2016-02 Leases | ||||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||||
Impact of ASUs | (23) | (23) | ||
Other comprehensive income (loss), before tax: | ||||
Impact of ASUs | (23) | (23) | ||
Total Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||||
Stockholders' Equity Attributable to 3M, Beginning Balance | (7,272) | (7,019) | (6,866) | (7,026) |
Other comprehensive income (loss), before tax: | ||||
Amounts before reclassifications | (118) | (88) | 81 | (270) |
Amounts reclassified out | 80 | 187 | 404 | 551 |
Total other comprehensive income (loss), before tax | (38) | 99 | 485 | 281 |
Tax effect | (78) | (48) | (154) | (223) |
Total other comprehensive income (loss), net of tax | (116) | 51 | 331 | 58 |
Stockholders' Equity Attributable to 3M, Ending Balance | (7,388) | $ (6,968) | (7,388) | $ (6,968) |
Total Accumulated Other Comprehensive Income (Loss) | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | ||||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||||
Impact of ASUs | (853) | (853) | ||
Other comprehensive income (loss), before tax: | ||||
Impact of ASUs | (853) | (853) | ||
Total Accumulated Other Comprehensive Income (Loss) | ASU 2016-02 Leases | ||||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||||
Impact of ASUs | (853) | (853) | ||
Other comprehensive income (loss), before tax: | ||||
Impact of ASUs | $ (853) | $ (853) |
Supplemental Equity and Compr_6
Supplemental Equity and Comprehensive Income Information - Reclass AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Net of tax | $ (59) | $ (143) | $ (343) | $ (421) |
Cumulative Translation Adjustment | ||||
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Deconsolidation of Venezuelan subsidiary | (142) | |||
Total before tax | (142) | |||
Net of tax | (142) | |||
Defined Pension and Postretirement Plans Adjustment | ||||
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Deconsolidation of Venezuelan subsidiary | (2) | |||
Prior service benefit | 18 | 20 | 50 | 58 |
Net actuarial loss | (119) | (170) | (358) | (510) |
Total before tax | (101) | (150) | (310) | (452) |
Tax effect | 25 | 36 | 70 | 108 |
Net of tax | (76) | (114) | (240) | (344) |
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | ||||
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Total before tax | 21 | (37) | 48 | (99) |
Tax effect | (4) | 8 | (9) | 22 |
Net of tax | 17 | (29) | 39 | (77) |
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | Foreign currency forward/option contracts | ||||
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Cost of sales | 22 | $ (37) | 50 | (98) |
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | Interest rate swap contracts | ||||
Amount Reclassified from Accumulated Other Comprehensive Income | ||||
Interest expense | $ (1) | $ (2) | $ (1) |
Income Taxes - Tax Effected Ope
Income Taxes - Tax Effected Operating Loss, Capital Loss, and Tax Credit Carryovers (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Income tax | |||||||
Net UTB impacting the effective tax rate | $ 736 | $ 736 | $ 655 | ||||
Deferred tax assets valuation allowance | $ 70 | $ 70 | $ 67 | ||||
Effective tax rate (as a percent) | 19.30% | 21.30% | 19.70% | 24.00% | |||
Increase (decrease) in effective income tax rate from prior reporting period to current reporting period (as a percent) | (2.00%) | (4.30%) | |||||
Tax Cuts and Jobs Act of 2017 measurement period adjustment | $ 217 | ||||||
Retained Earnings | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | |||||||
Income tax | |||||||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | $ 900 | ||||||
Total Accumulated Other Comprehensive Income (Loss) | ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | |||||||
Income tax | |||||||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings, Tax Effect | $ 900 |
Marketable Securities (current
Marketable Securities (current and non-current) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Marketable securities | ||
Current marketable securities | $ 30 | $ 380 |
Non-current marketable securities | 46 | 37 |
Total marketable securities | 76 | 417 |
Commercial paper | ||
Marketable securities | ||
Current marketable securities | 366 | |
Certificates of deposit/time deposits | ||
Marketable securities | ||
Current marketable securities | 27 | 10 |
U.S. municipal securities | ||
Marketable securities | ||
Current marketable securities | 3 | 3 |
Non-current marketable securities | $ 46 | 37 |
Asset-backed securities | ||
Marketable securities | ||
Current marketable securities | $ 1 |
Marketable Securities (Contract
Marketable Securities (Contractual maturity) (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Marketable securities by contractual maturity | ||
Due in one year or less | $ 30 | |
Due after one year through five years | 13 | |
Due after five years through ten years | 24 | |
Due after ten years | 9 | |
Total marketable securities | $ 76 | $ 417 |
Long-Term Debt and Short-Term_3
Long-Term Debt and Short-Term Borrowings - Long-Term Debt Issuances (Details) $ in Millions, ¥ in Billions | 1 Months Ended | ||||
Aug. 31, 2019USD ($) | Feb. 28, 2019USD ($) | Oct. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2019JPY (¥) | |
Debt instrument | |||||
Long-term debt | $ 18,794 | ||||
Aggregate fixed rate medium-term notes | |||||
Debt instrument | |||||
Principal amount | $ 2,250 | ||||
Fixed rate registered notes which are due in 2023, 2025, 2029 and 2049 | |||||
Debt instrument | |||||
Principal amount | $ 3,250 | ||||
Fixed rate registered note due 2023 | |||||
Debt instrument | |||||
Principal amount | $ 500 | ||||
Term of debt instrument | 3 years 6 months | ||||
Interest rate - effective | 0.0175% | ||||
Fixed rate registered note due 2025 | |||||
Debt instrument | |||||
Principal amount | $ 750 | ||||
Term of debt instrument | 5 years 6 months | ||||
Interest rate - effective | 2.00% | ||||
Fixed rate registered note due 2029 | |||||
Debt instrument | |||||
Principal amount | $ 1,000 | ||||
Term of debt instrument | 10 years | ||||
Interest rate - effective | 2.375% | ||||
Fixed rate registered note due 2049 | |||||
Debt instrument | |||||
Principal amount | $ 1,000 | ||||
Term of debt instrument | 30 years | ||||
Interest rate - effective | 3.25% | ||||
Fixed rate medium term note due 2022 | |||||
Debt instrument | |||||
Principal amount | $ 450 | ||||
Term of debt instrument | 3 years | ||||
Interest rate - effective | 2.75% | ||||
Fixed rate medium term notes due 2024 | |||||
Debt instrument | |||||
Principal amount | $ 500 | ||||
Term of debt instrument | 5 years | ||||
Interest rate - effective | 3.25% | ||||
Fixed rate medium term notes due 2029 | |||||
Debt instrument | |||||
Principal amount | $ 800 | ||||
Term of debt instrument | 10 years | ||||
Interest rate - effective | 3.375% | ||||
Fixed rate medium term note due 2048 | |||||
Debt instrument | |||||
Principal amount | $ 500 | ||||
Term of debt instrument | 29 years 6 months | ||||
Interest rate - effective | 4.00% | ||||
Credit Facility expiring July 2020 | |||||
Debt instrument | |||||
Current borrowing capacity | ¥ | ¥ 80 | ||||
Short-term borrowings | $ 640 | ¥ 69 | |||
Acelity Inc. and its KCI subsidiaries | Third lien senior secured notes (Third Lien Notes) maturing 2021 | |||||
Debt instrument | |||||
Principal amount | $ 445 | ||||
Interest rate - effective | 12.50% |
Long-Term Debt and Short-Term_4
Long-Term Debt and Short-Term Borrowings - Short-Term Borrowings and Current Portion of Long-Term Debt (Details) - USD ($) | 1 Months Ended | ||
Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Long-Term Debt | |||
Total long-term debt | $ 18,794,000,000 | ||
Fixed rate medium term note due 2019 | |||
Short-Term Borrowings and Current Portion of Long-Term Debt | |||
Repayments of Debt | $ 625,000,000 | ||
Commercial paper | |||
Short-Term Borrowings and Current Portion of Long-Term Debt | |||
Commercial paper outstanding | $ 0 | $ 435,000,000 |
Long-Term Debt and Short-Term_5
Long-Term Debt and Short-Term Borrowings - Future Maturities of Long-term Debt (Details) $ in Millions | Sep. 30, 2019USD ($) |
Maturities of long-term debt | |
Remainder of 2019 | $ 105 |
2020 | 1,305 |
2021 | 1,671 |
2022 | 1,591 |
2023 | 1,796 |
2024 | 1,101 |
After 2024 | 11,225 |
Total long-term debt | $ 18,794 |
Pension and Postretirement Be_3
Pension and Postretirement Benefit Plans - Components of net periodic benefit cost and other information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net periodic benefit cost (benefit) | ||||
Net periodic benefit cost (benefit) | $ (38) | $ (19) | $ (73) | $ (59) |
Funded | Postretirement Benefits | ||||
Net periodic benefit cost (benefit) | ||||
Service cost | 10 | 13 | 32 | 39 |
Interest cost | 20 | 20 | 62 | 60 |
Expected return on plan assets | (20) | (21) | (61) | (63) |
Amortization of prior service benefit | (9) | (10) | (23) | (30) |
Amortization of net actuarial loss | 8 | 15 | 25 | 45 |
Total non-operating expense (benefit) | (1) | 4 | 3 | 12 |
Net periodic benefit cost (benefit) | 9 | 17 | 35 | 51 |
Funded | United States | Qualified and Non-qualified Pension Benefits | ||||
Net periodic benefit cost (benefit) | ||||
Service cost | 63 | 72 | 188 | 216 |
Interest cost | 155 | 141 | 466 | 423 |
Expected return on plan assets | (260) | (272) | (780) | (816) |
Amortization of prior service benefit | (6) | (6) | (18) | (18) |
Amortization of net actuarial loss | 91 | 126 | 274 | 378 |
Settlements, curtailments, special terminations and other | 35 | |||
Total non-operating expense (benefit) | (20) | (11) | (23) | (33) |
Net periodic benefit cost (benefit) | 43 | 61 | 165 | 183 |
Funded | International | Qualified and Non-qualified Pension Benefits | ||||
Net periodic benefit cost (benefit) | ||||
Service cost | 32 | 37 | 98 | 110 |
Interest cost | 40 | 40 | 118 | 120 |
Expected return on plan assets | (75) | (78) | (225) | (235) |
Amortization of prior service benefit | (3) | (4) | (9) | (10) |
Amortization of net actuarial loss | 20 | 29 | 59 | 87 |
Settlements, curtailments, special terminations and other | 1 | |||
Total non-operating expense (benefit) | (18) | (13) | (56) | (38) |
Net periodic benefit cost (benefit) | $ 14 | $ 24 | $ 42 | $ 72 |
Pension and Postretirement Be_4
Pension and Postretirement Benefit Plans - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
May 31, 2019USD ($)person | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2019USD ($) | |
Benefit Plan Information | |||||||
Defined benefit pension and postretirement plans adjustment | $ (76,000,000) | $ (114,000,000) | $ (356,000,000) | $ (344,000,000) | |||
Qualified and Non-qualified Pension Benefits | Funded | |||||||
Benefit Plan Information | |||||||
Company contributions year to date | 126,000,000 | ||||||
Qualified and Non-qualified Pension Benefits | United States | Funded | |||||||
Benefit Plan Information | |||||||
Special termination benefits - number of additional years of pension service | 1 | ||||||
Special termination benefits - number of additional years of age for certain benefit calculations | 1 | ||||||
Special termination benefits - number of participants | person | 800 | ||||||
Special termination benefits charge | $ 35,000,000 | ||||||
Postretirement Benefits | Funded | |||||||
Benefit Plan Information | |||||||
Company contributions year to date | 3,000,000 | ||||||
Maximum life insurance and death benefit to be paid under the modified 3M Retiree Life Insurance Plan postretirement benefit | $ 8,000 | ||||||
Defined benefit pension and postretirement plans adjustment | 150,000,000 | ||||||
Total Accumulated Other Comprehensive Income (Loss) | |||||||
Benefit Plan Information | |||||||
Defined benefit pension and postretirement plans adjustment | $ (76,000,000) | $ (114,000,000) | $ (356,000,000) | $ (344,000,000) | |||
Total Accumulated Other Comprehensive Income (Loss) | Postretirement Benefits | Funded | |||||||
Benefit Plan Information | |||||||
Defined benefit pension and postretirement plans adjustment | $ 150,000,000 | ||||||
Forecast | Qualified and Non-qualified Pension Benefits | Funded | Maximum | |||||||
Benefit Plan Information | |||||||
Estimated pension and postretirement employer contributions in current fiscal year | $ 200,000,000 |
Derivatives - Cash Flow Hedges
Derivatives - Cash Flow Hedges (Details) - Cash flow hedge - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Derivatives in Cash Flow Hedging Relationships | ||
Accumulated other comprehensive income (loss), unrealized gain (loss) on cash flow hedges | $ 17 | |
After-tax net unrealized gain (loss) anticipated to be reclassified from AOCI to the income statement within next twelve months | 69 | |
After-tax net unrealized gain (loss) anticipated to be reclassified from AOCI to the Income Statement over remaining fiscal year | 18 | |
After-tax net unrealized gain (loss) anticipated to be reclassifed from AOCI to the Income Statement over next fiscal year | 63 | |
After-tax unrealized gain (loss) anticipated to be reclassified from AOCI to the Income Statement after the next fiscal year | $ (64) | |
Foreign currency forward/option contracts | ||
Derivatives in Cash Flow Hedging Relationships | ||
Maximum length of time hedged in interest rate cash flow hedge | 36 months | |
Interest rate swap contracts | ||
Derivatives in Cash Flow Hedging Relationships | ||
Accumulated other comprehensive income (loss), unrealized gain (loss) on cash flow hedges | $ (114) | |
Derivative notional amount | $ 700 | |
Additional derivative notional | $ 743 |
Derivatives - Cash Flow Hedge_2
Derivatives - Cash Flow Hedges - Gain (Loss) in OCI or Reclassified from AOCI (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Aug. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | |
Foreign currency forward/option contracts | Cost of sales | |||
Derivatives in Cash Flow Hedging Relationships | |||
Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | $ 22 | $ 50 | |
Cash flow hedge | |||
Derivatives in Cash Flow Hedging Relationships | |||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Derivative | 31 | 14 | |
Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 21 | 48 | |
Cash flow hedge | Foreign currency forward/option contracts | |||
Derivatives in Cash Flow Hedging Relationships | |||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Derivative | 105 | 137 | |
Cash flow hedge | Foreign currency forward/option contracts | Cost of sales | |||
Derivatives in Cash Flow Hedging Relationships | |||
Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 22 | 50 | |
Cash flow hedge | Interest rate swap contracts | |||
Derivatives in Cash Flow Hedging Relationships | |||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Derivative | $ 143 | (74) | (123) |
Cash flow hedge | Interest rate swap contracts | Interest expense. | |||
Derivatives in Cash Flow Hedging Relationships | |||
Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | $ (1) | $ (2) |
Derivatives - Cash Flow Hedge_3
Derivatives - Cash Flow Hedges - Effective and Ineffective Portions (Details) - Cash flow hedge - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Derivatives in Cash Flow Hedging Relationships | ||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective Portion of Derivative | $ 22 | $ 122 |
Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income | (37) | (99) |
Foreign currency forward/option contracts | ||
Derivatives in Cash Flow Hedging Relationships | ||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective Portion of Derivative | 12 | 112 |
Foreign currency forward/option contracts | Cost of sales | ||
Derivatives in Cash Flow Hedging Relationships | ||
Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income | (37) | (98) |
Interest rate swap contracts | ||
Derivatives in Cash Flow Hedging Relationships | ||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective Portion of Derivative | $ 10 | 10 |
Interest rate swap contracts | Interest expense. | ||
Derivatives in Cash Flow Hedging Relationships | ||
Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income | $ (1) |
Derivatives - Fair Value Hedges
Derivatives - Fair Value Hedges (Details) - Fair value hedges $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Derivatives in Fair Value Hedging Relationships | |
Gain (Loss) on Derivative Recognized in Income | $ (12) |
Gain (Loss) on Hedged Item Recognized in Income | 12 |
Interest rate swap contracts | Interest expense. | |
Derivatives in Fair Value Hedging Relationships | |
Gain (Loss) on Derivative Recognized in Income | (12) |
Gain (Loss) on Hedged Item Recognized in Income | $ 12 |
Derivatives - Cumulative Basis
Derivatives - Cumulative Basis Adjustment for Fair Value Hedges (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Hedged Liability, Fair Value Hedge | $ 1,270 | $ 1,872 |
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease) | 25 | 14 |
Short-term borrowings and current portion of long-term debt | ||
Derivatives, Fair Value [Line Items] | ||
Hedged Liability, Fair Value Hedge | 499 | 596 |
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease) | (1) | (4) |
Long-term debt | ||
Derivatives, Fair Value [Line Items] | ||
Hedged Liability, Fair Value Hedge | 771 | 1,276 |
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease) | $ 26 | $ 18 |
Derivatives - Net Investment He
Derivatives - Net Investment Hedges (Details) - Net Investment Hedges € in Millions, $ in Millions, ₩ in Billions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019EUR (€) | Sep. 30, 2019KRW (₩) | |
Net investment hedges | ||||||
Effective portion of net investment hedge reclassified out of other comprehensive income into income | $ 0 | $ 0 | $ 0 | $ 0 | ||
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument | 215 | (17) | 248 | 171 | ||
Ineffective Portion of Gain (Loss) on Instrument and Amount Excluded from Effectiveness Testing Recognized in Income | 1 | (1) | ||||
Amount Excluded from Effectiveness Testing Recognized in Income | 6 | 18 | ||||
Foreign currency forward contracts | ||||||
Net investment hedges | ||||||
Derivative notional amount | € 150 | ₩ 248 | ||||
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument | 38 | (3) | 43 | 14 | ||
Foreign currency forward contracts | Cost of sales | ||||||
Net investment hedges | ||||||
Ineffective Portion of Gain (Loss) on Instrument and Amount Excluded from Effectiveness Testing Recognized in Income | 1 | 1 | ||||
Amount Excluded from Effectiveness Testing Recognized in Income | 6 | 18 | ||||
Foreign Currency Denominated Debt | ||||||
Net investment hedges | ||||||
Face amount of debt designated as a net investment hedge | € | € 4,100 | |||||
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument | $ 177 | $ (14) | $ 205 | 157 | ||
Foreign Currency Denominated Debt | Cost of sales | ||||||
Net investment hedges | ||||||
Ineffective Portion of Gain (Loss) on Instrument and Amount Excluded from Effectiveness Testing Recognized in Income | $ (2) |
Derivatives - Not Designated (D
Derivatives - Not Designated (Details) - Derivatives not designated as hedging instruments - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivatives not designated as hedging instruments | ||||
Gain (Loss) on Derivative Recognized in Income | $ (2) | $ 4 | $ (22) | $ (87) |
Foreign currency forward/option contracts | Cost of sales | ||||
Derivatives not designated as hedging instruments | ||||
Gain (Loss) on Derivative Recognized in Income | 6 | 11 | 4 | 11 |
Foreign currency forward contracts | Interest expense. | ||||
Derivatives not designated as hedging instruments | ||||
Gain (Loss) on Derivative Recognized in Income | $ (8) | $ (7) | $ (26) | $ (98) |
Derivatives - Statement of Inco
Derivatives - Statement of Income Location and Impact of Cash Flow (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Cost of sales | |||
Derivatives in Fair Value Hedging Relationships | |||
Total amounts of income and expense line items presented in the consolidated statement of income in which the effects of cash flow or fair value hedges are recorded | $ 4,188 | $ 12,811 | |
Other expense (income), net | |||
Derivatives in Fair Value Hedging Relationships | |||
Total amounts of income and expense line items presented in the consolidated statement of income in which the effects of cash flow or fair value hedges are recorded | 45 | 349 | |
Gain or (loss) on fair value hedging relationships: | |||
Hedged items | 1 | (11) | |
Derivatives designated as hedging instruments | (1) | 11 | |
Foreign currency forward/option contracts | Cost of sales | |||
Gain or (loss) on cash flow hedging relationships: | |||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | 22 | 50 | |
Interest rate swap contracts | Other expense (income), net | |||
Gain or (loss) on cash flow hedging relationships: | |||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | (1) | (2) | |
Cash flow hedge | |||
Gain or (loss) on cash flow hedging relationships: | |||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | 21 | 48 | |
Cash flow hedge | Foreign currency forward/option contracts | Cost of sales | |||
Gain or (loss) on cash flow hedging relationships: | |||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | $ 22 | $ 50 | |
Fair value hedges | |||
Gain or (loss) on fair value hedging relationships: | |||
Hedged items | $ (12) |
Derivatives - BS Location (Deta
Derivatives - BS Location (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | $ 227 | $ 146 |
Fair Value of Derivative Instruments, Liabilities | 14 | 53 |
Derivatives designated as hedging instruments | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 218 | 132 |
Fair Value of Derivative Instruments, Liabilities | 4 | 47 |
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 | 128 | 74 |
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 | 70 | 39 |
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 | 2 | 12 |
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 | 1 | 4 |
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 | 2,235 | 2,277 |
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 | 1,110 | 1,099 |
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 | 20 | 19 |
Derivatives designated as hedging instruments | Interest rate swap contracts | Other current liabilities | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Liabilities | 1 | 14 |
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 | 17 | |
Derivatives designated as hedging instruments | Interest rate swap contracts | Current balance sheet location | ||
Location and Fair Value Amount of Derivative Instruments | ||
Derivative Notional Amount | 500 | 1,000 |
Derivatives designated as hedging instruments | Interest rate swap contracts | Noncurrent balance sheet location | ||
Location and Fair Value Amount of Derivative Instruments | ||
Derivative Notional Amount | 603 | 1,403 |
Derivatives not designated as hedging instruments | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 9 | 14 |
Fair Value of Derivative Instruments, Liabilities | 10 | 6 |
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 | 9 | 14 |
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 | 10 | 6 |
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 | $ 1,931 | $ 2,484 |
Derivatives - Offsetting Assets
Derivatives - Offsetting Assets (Details) | 9 Months Ended | |
Sep. 30, 2019USD ($)Counterparty | Dec. 31, 2018USD ($) | |
Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties | ||
Number of master netting agreements supported by primary counterparty's parent guarantee | Counterparty | 17 | |
Number of credit support agreements by primary counterparty | Counterparty | 16 | |
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | $ 227,000,000 | $ 146,000,000 |
Cash Collateral Received | 0 | 0 |
Net Amount of Derivative Assets | 218,000,000 | 108,000,000 |
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 | 227,000,000 | 146,000,000 |
Gross Amount of Eligible Offsetting Recognized Derivative Liabilities | 9,000,000 | 38,000,000 |
Net Amount of Derivative Assets | $ 218,000,000 | $ 108,000,000 |
Derivatives - Offsetting Liabil
Derivatives - Offsetting Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties | ||
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | $ 14 | $ 53 |
Net Amount of Derivative Liabilities | 5 | 15 |
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 | 14 | 53 |
Gross Amount of Eligible Offsetting Recognized Derivative Assets | 9 | 38 |
Net Amount of Derivative Liabilities | $ 5 | $ 15 |
Derivatives - Currency Effects
Derivatives - Currency Effects (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Foreign Currency | ||
Year-on-year foreign currency transaction effects, including hedging impact, gain (loss) impact on pre-tax income | $ 69 | $ 190 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | $ 76 | $ 417 |
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 227 | 146 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 14 | 53 |
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 | 207 | 127 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 13 | 22 |
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 | 20 | 19 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 1 | 31 |
Fair value on a recurring basis | Commercial paper | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 366 | |
Fair value on a recurring basis | Certificates of deposit/time deposits | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 27 | 10 |
Fair value on a recurring basis | Asset-backed securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 1 | |
Fair value on a recurring basis | U.S. municipal securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 49 | 40 |
Fair value on a recurring basis | Investments | ||
Assets and Liabilities Measured on Recurring Basis | ||
Investments | 22 | |
Fair value on a recurring basis | Level 1 | Investments | ||
Assets and Liabilities Measured on Recurring Basis | ||
Investments | 22 | |
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 | 207 | 127 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 13 | 22 |
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 | 20 | 19 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 1 | 31 |
Fair value on a recurring basis | Level 2 | Commercial paper | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 366 | |
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 | 27 | 10 |
Fair value on a recurring basis | Level 2 | Asset-backed securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 1 | |
Fair value on a recurring basis | Level 3 | U.S. municipal securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | $ 49 | $ 40 |
Fair Value Measurements - Rec_2
Fair Value Measurements - Recurring Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
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 | $ 49 | $ 30 | $ 40 | $ 30 |
Total gains or losses included in earnings | 0 | 0 | 0 | 0 |
Total gains or losses included in other comprehensive income | 0 | 0 | 0 | 0 |
Purchases and issuances | 0 | 0 | 9 | 0 |
Sales and settlements | 0 | 0 | 0 | 0 |
Transfers in and/or out of Level 3 | 0 | 0 | 0 | 0 |
Balance at the end of the period | 49 | 30 | 49 | 30 |
Total gains or losses included in other comprehensive income | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value Measurements | ||||
Long-lived asset impairment charges | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Financial Instruments | ||
Long-term debt, excluding current portion - Fair Value | $ 17,479 | $ 13,411 |
Fair Value | ||
Financial Instruments | ||
Long-term debt, excluding current portion - Fair Value | $ 18,573 | $ 13,586 |
Commitments and Contingencies -
Commitments and Contingencies - Respirator and Environmental (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||
Apr. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jul. 31, 2018USD ($) | Apr. 30, 2018USD ($) | Feb. 28, 2018USD ($) | Sep. 30, 2019USD ($)lawsuit$ / shares | Mar. 31, 2019USD ($)$ / shares | Sep. 30, 2018$ / shares | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($)lawsuit | Sep. 30, 2019USD ($)lawsuit | Sep. 30, 2019USD ($)lawsuit$ / shares | Sep. 30, 2019USD ($)facilitylawsuit | Sep. 30, 2019USD ($)caselawsuit | Sep. 30, 2019USD ($)individuallawsuit | Sep. 30, 2019USD ($)lawsuit | Sep. 30, 2019USD ($)itemlawsuit | Sep. 30, 2019USD ($)lawsuitdefendant | Sep. 30, 2018$ / shares | Dec. 31, 2018item | Sep. 30, 2017USD ($) | |
Loss contingencies | |||||||||||||||||||||
Diluted earnings per share | $ / shares | $ 2.72 | $ 2.58 | $ 6.15 | $ 6.61 | |||||||||||||||||
Respirator Mask/Asbestos Litigation | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Total number of named claimants | 1,770 | 2,320 | |||||||||||||||||||
Number of years company has been the defendant in Respirator Mask/Asbestos Litigation | 20 years | ||||||||||||||||||||
Number of total claims the Company prevailed after being taken to trial | 2 | 14 | |||||||||||||||||||
Number of total claims taken to trial | case | 15 | ||||||||||||||||||||
Accrued loss contingency reserve | $ | $ 620,000,000 | $ 620,000,000 | $ 620,000,000 | $ 620,000,000 | $ 620,000,000 | $ 620,000,000 | $ 620,000,000 | $ 620,000,000 | $ 620,000,000 | $ 620,000,000 | |||||||||||
Increase (decrease) accrued loss contingency reserve | $ | 337,000,000 | ||||||||||||||||||||
Increase in liabilities, gross | $ | $ 313,000,000 | ||||||||||||||||||||
Increase in liabilities, net | $ | $ 238,000,000 | ||||||||||||||||||||
Diluted earnings per share | $ / shares | $ 0.40 | ||||||||||||||||||||
Payments for fees and settlements related to litigation | $ | 390,000,000 | ||||||||||||||||||||
Insurance receivables | $ | 4,000,000 | $ 4,000,000 | $ 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | $ 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | |||||||||||
Respirator Mask/Asbestos Litigation | State court of California | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of total claims the Company prevailed after being taken to trial | lawsuit | 1 | ||||||||||||||||||||
Respirator Mask/Asbestos Litigation | State court of Kentucky | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of unnamed defendant | individual | 2 | ||||||||||||||||||||
Litigation settlement awarded | $ | $ 2,000,000 | ||||||||||||||||||||
Amount of punitive damages awarded | $ | 63,000,000 | ||||||||||||||||||||
Settlement amount paid | $ | $ 65,000,000 | ||||||||||||||||||||
Respirator Mask/Asbestos Litigation | Kentucky and West Virginia | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Settlement amount paid | $ | $ 340,000,000 | $ 340,000,000 | |||||||||||||||||||
Respirator Mask/Asbestos Litigation - State of West Virginia | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of additional defendants | two | ||||||||||||||||||||
Accrued loss contingency reserve | $ | 0 | $ 0 | $ 0 | 0 | 0 | 0 | $ 0 | 0 | 0 | 0 | |||||||||||
Respirator Mask/Asbestos Litigation - Aearo Technologies | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Accrued loss contingency reserve | $ | 24,000,000 | 24,000,000 | 24,000,000 | 24,000,000 | 24,000,000 | 24,000,000 | 24,000,000 | 24,000,000 | 24,000,000 | 24,000,000 | |||||||||||
Quarterly fee paid to Cabot to retain responsibility and liability for products manufactured before July 11, 1995 | $ | 100,000 | ||||||||||||||||||||
Environmental Matters - Remediation | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Accrued loss contingency reserve | $ | 20,000,000 | $ 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||||
Number of years remediation payments expected to be paid for applicable sites | 20 years | ||||||||||||||||||||
Environmental Matters - Other | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Accrued loss contingency reserve | $ | 0 | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||
Insurance receivables | $ | 33,000,000 | $ 33,000,000 | $ 33,000,000 | 33,000,000 | $ 33,000,000 | 33,000,000 | 33,000,000 | 33,000,000 | $ 33,000,000 | $ 33,000,000 | |||||||||||
Increase (decrease) in insurance recovery receivable | $ | $ 25,000,000 | ||||||||||||||||||||
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 and PFOS found in drinking water, either individually or combined, that are allowed per the EPA's announced lifetime health advisory levels in parts per trillion | 70 | ||||||||||||||||||||
Amount of PFOA in drinking water allowed per provisional health advisories in parts per trillion (superseded) | 400 | ||||||||||||||||||||
Amount of PFOS in drinking water allowed per provisional health advisories in parts per trillion (superseded) | 200 | ||||||||||||||||||||
Number of PFCs the EPA has required to have public water system suppliers monitor | 6 | ||||||||||||||||||||
Number compounds EPA asked for public comment on draft toxicity assessments for PFAS compounds, including PFBS | 2 | ||||||||||||||||||||
Number of public water supplies the EPA reported results | 4,920 | ||||||||||||||||||||
Number of water supplies that reported above advisory level with PFOA | 13 | ||||||||||||||||||||
Number of water supplies that reported above advisory level with PFOS | 46 | ||||||||||||||||||||
Number of water supplies that reported above advisory level with both PFOA and PFOS under technical advisory issued by EPA in September 2016 | 65 | ||||||||||||||||||||
Environmental Matters - Regulatory Activities | Minimum | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of water supply samples used to test for PFOA and PFOS under the EPA lifetime health advisory program | 1 | ||||||||||||||||||||
Environmental Matters - Regulatory Activities | Alabama | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of years covered by permit for sludge containing PFAS | 20 years | ||||||||||||||||||||
Environmental Matters - Regulatory Activities | Minnesota Department of Health | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Amount of PFOA in drinking water allowed per Minnesota Department of Health in parts per trillion | 35 | ||||||||||||||||||||
Amount of PFOS in drinking water allowed per Minnesota Department of Health in parts per trillion | 27 | ||||||||||||||||||||
Additional amounts of PFOS in drinking water allowed per Minnesota Department of Health in parts per trillion | 15 | ||||||||||||||||||||
Amount of PFHxS in drinking water allowed per Minnesota Department of Health in parts per trillion | 47 | ||||||||||||||||||||
Amount of PFBS in drinking water allowed per Minnesota Department of Health in parts per billion | 2 | ||||||||||||||||||||
Environmental Matters - Litigation | State court in New York | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of lawsuits filed | lawsuit | 3 | ||||||||||||||||||||
Environmental Matters - Litigation | State Court of Lawrence County, Alabama | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Total number of named claimants | 200 | ||||||||||||||||||||
Environmental Matters - Litigation | U.S. District Court for the Northern District of Alabama | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of unnamed defendant | defendant | 3 | ||||||||||||||||||||
Environmental Matters - Litigation | Alabama | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Litigation settlement awarded | $ | 35,000,000 | ||||||||||||||||||||
Number of local water works for whom the water authority supplies water | 5 | ||||||||||||||||||||
Environmental Matters - Litigation | Morgan County, Alabama | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Total number of named claimants | 3 | ||||||||||||||||||||
Environmental Matters - Litigation | Decatur, Alabama | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of closed municipal landfills | 3 | ||||||||||||||||||||
Environmental Matters - Litigation | Minnesota | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Litigation settlement awarded | $ | $ 897,000,000 | ||||||||||||||||||||
Settlement amount paid | $ | $ 850,000,000 | ||||||||||||||||||||
Amount the State's damages expert contended that the State incurred in damages | $ | $ 5,000,000,000 | ||||||||||||||||||||
Environmental Matters - Litigation | Lake Elmo, Minnesota | Maximum | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Settlement amount paid | $ | $ 5,000,000 | ||||||||||||||||||||
Environmental Matters - Litigation | New Jersey | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of additional defendants | six | ||||||||||||||||||||
Number of lawsuits filed | lawsuit | 2 | ||||||||||||||||||||
Environmental Matters - Litigation | Salem County, New Jersey | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of facilities related to the manufacture and disposal of PFAS | facility | 2 | ||||||||||||||||||||
Environmental Matters - Litigation | New Hampshire | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of additional defendants | seven | ||||||||||||||||||||
Number of lawsuits filed | lawsuit | 2 | ||||||||||||||||||||
Environmental Matters - Litigation | Vermont | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of additional defendants | ten | ||||||||||||||||||||
Number of lawsuits filed | lawsuit | 2 | ||||||||||||||||||||
Environmental Matters - Other Environmental Litigation | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Accrued loss contingency reserve | $ | $ 241,000,000 | $ 241,000,000 | $ 241,000,000 | $ 241,000,000 | $ 241,000,000 | $ 241,000,000 | $ 241,000,000 | $ 241,000,000 | $ 241,000,000 | $ 241,000,000 | |||||||||||
Increase (decrease) accrued loss contingency reserve | $ | 235,000,000 | ||||||||||||||||||||
Increase in liabilities, net | $ | $ 186,000,000 | ||||||||||||||||||||
Diluted earnings per share | $ / shares | $ 0.32 | ||||||||||||||||||||
Number of landfills tested by the entity for environmental matters and litigation related to historical PFAS manufacturing operations | 4 | ||||||||||||||||||||
Number of former disposal sites with PFC present in soil and groundwater in Washington County, Minnesota | 2 | ||||||||||||||||||||
Environmental Matters - Other Environmental Litigation | New Jersey | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of unnamed defendant | defendant | 120 | ||||||||||||||||||||
Approximate number of miles of a river seeking to be cleaned | 8 | ||||||||||||||||||||
The value the award the plaintiff seeks | $ | $ 165,000,000 | ||||||||||||||||||||
Number of chemicals of concern in the sediment | 8 | ||||||||||||||||||||
Number of commercial drum conditioning facilities | 2 | ||||||||||||||||||||
Environmental Matters - Aqueous Film Forming Foam Litigation | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of lawsuits filed | lawsuit | 8 | ||||||||||||||||||||
Number of putative class action and other lawsuits | 130 | ||||||||||||||||||||
Environmental Matters - Aqueous Film Forming Foam Litigation | Various state courts | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of lawsuits pending | lawsuit | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | |||||||||||
Environmental Matters - Aqueous Film Forming Foam Litigation | Federal court | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of lawsuits pending | lawsuit | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | |||||||||||
Environmental Matters - Aqueous Film Forming Foam Litigation | U.S. Judicial Panel on Multidistrict Litigation (MDL) | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of lawsuits filed | lawsuit | 119 | ||||||||||||||||||||
Number of putative class action and other lawsuits | lawsuit | 125 | ||||||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of facilities related to the manufacture and disposal of PFAS | facility | 5 | ||||||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | U.S. District Court of New York State | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of lawsuits filed | lawsuit | 47 | ||||||||||||||||||||
Number of additional new claims filed | lawsuit | 4 | ||||||||||||||||||||
Number of putative class action and other lawsuits | lawsuit | 1 | ||||||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Alabama | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of perfluorinated materials (FBSA and FBSEE) the company cannot release into "the waters of the United States." | 2 | ||||||||||||||||||||
Number of putative class action and other lawsuits | lawsuit | 2 | ||||||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Delaware | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of putative class action and other lawsuits | lawsuit | 1 | ||||||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Maine | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of lawsuits filed | lawsuit | 1 | ||||||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Michigan | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of lawsuits filed | lawsuit | 254 | ||||||||||||||||||||
Number of federal bellwether cases with trial-ready dates set | lawsuit | 4 | ||||||||||||||||||||
Number of putative class action and other lawsuits | lawsuit | 1 | ||||||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | United States | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of facilities related to the manufacture and disposal of PFAS | facility | 3 | ||||||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Europe | |||||||||||||||||||||
Loss contingencies | |||||||||||||||||||||
Number of facilities related to the manufacture and disposal of PFAS | facility | 2 |
Commitments and Contingencies_2
Commitments and Contingencies - Product Liability (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)lawsuititemindividualcase | Dec. 31, 2018item | |
Product Liability - Bair Hugger | ||
Product Liability Litigation | ||
Number of lawsuits filed | 2 | |
Number of plaintiffs | item | 2 | 5,015 |
Accrued loss contingency reserve | $ | $ 0 | |
Number of total claims dismissed | case | 61 | |
Product Liability - Bair Hugger and medical malpractice claims | Hidalgo County Texas | ||
Product Liability Litigation | ||
Number of lawsuits filed | 1 | |
Product Liability - Bair Hugger and medical malpractice claims | Missouri | ||
Product Liability Litigation | ||
Number of lawsuits filed | 4 | |
Number of cases petitioned to transfer jurisdictions | 3 | |
Product Liability - Dual-Ended Combat Arms Earplugs | ||
Product Liability Litigation | ||
Number of lawsuits filed | 2,245 | |
Number of putative class action and other lawsuits | 13 | |
Number of plaintiffs | individual | 11,297 |
Leases (Details)
Leases (Details) $ in Millions | 9 Months Ended | ||
Sep. 30, 2019USD ($)approach | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Leases | |||
Stockholders' equity | $ 10,702 | $ 9,796 | |
Number of options to renew for operating leases | approach | 1 | ||
Number of options to renew for finance leases | approach | 1 | ||
Operating leases, existence of option to extend | true | ||
Finance leases, existence of option to extend | true | ||
Lease liabilities | $ 825 | ||
Operating lease right of use assets | $ 834 | ||
Lease, Practical Expedients, Package [true false] | true | ||
Lease, Practical Expedient, Use of Hindsight [true false] | false | ||
Maximum | |||
Leases | |||
Operating lease, term | 5 years | ||
Finance lease, term | 5 years | ||
Adjustment | ASU 2016-02 Leases | |||
Leases | |||
Lease liabilities | $ 800 | ||
Operating lease right of use assets | 800 | ||
Retained Earnings | Adjustment | ASU 2016-02 Leases | |||
Leases | |||
Stockholders' equity | $ 14 |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Lease expense | ||
Operating lease cost | $ 78 | $ 229 |
Amortization of assets | 5 | 15 |
Interest on lease liabilities | 1 | |
Variable Lease, Cost | 26 | 68 |
Total net lease cost | $ 109 | $ 313 |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Operating leases: | ||
Operating lease right of use assets | $ 834 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Operating lease right of use assets | |
Current operating lease liabilities | $ 241 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current operating lease liabilities | |
Noncurrent operating lease liabilities | $ 584 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Noncurrent operating lease liabilities | |
Present value of future minimum lease payments | $ 825 | |
Finance leases: | ||
Property and equipment, at cost | 25,508 | $ 24,873 |
Accumulated amortization | (16,617) | (16,135) |
Property, Plant and Equipment - net | 8,891 | $ 8,738 |
Current obligations of finance leases | $ 18 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current obligations of finance leases | |
Finance leases, net of current obligations | $ 116 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Finance leases, net of current obligations | |
Present value of future minimum lease payments | $ 134 | |
Weighted average remaining lease term (in years): | ||
Operating leases weighted average remaining lease term (in years) | 5 years 8 months 12 days | |
Finance leases weighted average remaining lease term (in years) | 9 years 2 months 12 days | |
Weighted average discount rate: | ||
Operating leases weighted average discount rate (as a percent) | 3.30% | |
Finance leases weighted average discount rate (as a percent) | 3.80% | |
Property and equipment finance leases | ||
Finance leases: | ||
Property and equipment, at cost | $ 235 | |
Accumulated amortization | (99) | |
Property, Plant and Equipment - net | $ 136 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow and other information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 231 | |
Operating cash flows from finance leases | 1 | |
Financing cash flows from finance leases | 12 | |
Right of use assets obtained in exchange for lease liabilities: | ||
Operating leases | 288 | |
Finance leases | 58 | |
Gain on sale leaseback transactions, net | $ 59 | $ 59 |
Leases - Sale and Leased-backed
Leases - Sale and Leased-backed asset and obligation (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Property, plant and equipment - at cost | |||
Finance lease asset | $ 8,891 | $ 8,738 | |
Finance lease liability | $ 134 | ||
Municipal securities | |||
Property, plant and equipment - at cost | |||
Finance lease liability | $ 9 | ||
Constructed machinery and equipment | |||
Property, plant and equipment - at cost | |||
Finance lease asset | $ 9 |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Millions | Sep. 30, 2019USD ($) |
Finance Leases | |
Remainder of 2019 | $ 8 |
2020 | 20 |
2021 | 16 |
2022 | 15 |
2023 | 15 |
After 2023 | 67 |
Total | 141 |
Less: Amounts representing interest | (7) |
Present value of future minimum lease payments | 134 |
Less: Current obligations | 18 |
Long-term obligations | 116 |
Operating Leases | |
Remainder of 2019 | 73 |
2020 | 241 |
2021 | 168 |
2022 | 123 |
2023 | 85 |
After 2023 | 211 |
Total | 901 |
Less: Amounts representing interest | (76) |
Present value of future minimum lease payments | 825 |
Current operating lease liabilities | 241 |
Noncurrent operating lease liabilities | $ 584 |
Leases - Operating leases not y
Leases - Operating leases not yet commenced (Details) $ in Millions | Sep. 30, 2019USD ($) |
Leases | |
Additional operating lease commitments that have not yet commenced | $ 29 |
Leases - Disclosures related to
Leases - Disclosures related to periods prior to adoption of new lease standard (Details) £ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2003GBP (£) | |
Capital and Operating Leases | ||||
Rental expense under operating leases | $ 393 | $ 343 | $ 318 | |
Capital lease asset and obligation | 92 | |||
Building in United Kingdom | ||||
Capital and Operating Leases | ||||
Capital lease asset and obligation | 43 | £ 34 | ||
Capital lease term (in years) | 22 years | |||
Capital lease obligations in aggregate | ||||
Capital and Operating Leases | ||||
Capital lease asset and obligation | $ 13 | $ 13 | $ 12 | |
Capital lease term (in years) | 15 years |
Leases - Disclosures related _2
Leases - Disclosures related to periods prior to adoption of new lease standard minimum lease payments (Details) $ in Millions | Dec. 31, 2018USD ($) |
Minimum lease payments under capital leases | |
2019 | $ 18 |
2020 | 16 |
2021 | 14 |
2022 | 12 |
2023 | 12 |
After 2023 | 32 |
Total | 104 |
Less: Amounts representing interest | 12 |
Present value of future minimum lease payments | 92 |
Less: Current obligations under capital leases | 17 |
Long-term obligations under capital leases | 75 |
Operating Leases | |
2019 | 283 |
2020 | 208 |
2021 | 153 |
2022 | 122 |
2023 | 92 |
After 2023 | 253 |
Total | $ 1,111 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 9 Months Ended |
Sep. 30, 2019ageshares | |
Share-based Compensation Arrangement by Share-based Payment Award Activity | |
Retirement age eligibility for employees | age | 55 |
Retirement eligibility for employees, minimum years of service required | 10 years |
Percent of stock-based compensation related to retiree-eligible population (as a percent) | 37.00% |
Long Term Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award Activity | |
Number of shares authorized | 123,965,000 |
Number of shares available for grant | 22,100,000 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Amounts recognized in the financial statements | ||||
Stock-based compensation programs expense | $ 48 | $ 50 | $ 230 | $ 258 |
Income tax benefits | (12) | (20) | (120) | (137) |
Stock-based compensation expenses (benefits), net of tax | 36 | 30 | 110 | 121 |
Cost of sales | ||||
Amounts recognized in the financial statements | ||||
Stock-based compensation programs expense | 8 | 8 | 39 | 40 |
Selling, general and administrative expenses | ||||
Amounts recognized in the financial statements | ||||
Stock-based compensation programs expense | 33 | 35 | 151 | 177 |
Research, development and related expenses | ||||
Amounts recognized in the financial statements | ||||
Stock-based compensation programs expense | $ 7 | $ 7 | $ 40 | $ 41 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Stock Option Program | ||
Balance at the beginning of the period | 34,569 | |
Granted - Annual | 3,457 | |
Exercised | (3,390) | |
Forfeited | (96) | |
Balance at the end of the period | 34,540 | |
Options exercisable | 27,295 | |
Options exercisable, exercise price | $ 135.36 | |
Weighted average exercise price - Beginning balance | 138.98 | |
Weighted average exercise price - Granted - Annual | 200.80 | |
Weighted average exercise price - Exercised | 90.13 | |
Weighted average exercise price - Forfeited | 198.89 | |
Weighted average exercise price - Ending balance | $ 149.80 | |
Weighted average remaining contractual life for options outstanding | 66 months | |
Weighted average remaining contractual life for options exercisable | 56 months | |
Aggregate intrinsic value for options outstanding | $ 910 | |
Aggregate intrinsic value for options exercisable | $ 910 | |
Expiration of annual grants | 10 years | |
Compensation expense yet to be recognized | $ 79 | |
Expense recognition period | 22 months | |
Total intrinsic value of stock options exercised | $ 368 | $ 411 |
Cash received from options exercised | 304 | 270 |
Tax benefit realized from exercise of stock options | $ 77 | $ 87 |
Share- based compensation assumptions | ||
Weighted average exercise price | $ 201.12 | |
Risk-free interest rate (as a percent) | 2.60% | |
Dividend yield (as a percent) | 2.50% | |
Expected volatility (as a percent) | 20.40% | |
Expected life | 79 months | |
Black-Scholes fair value | $ 34.19 | |
Maximum | ||
Stock Option Program | ||
Vesting period | 3 years | |
Minimum | ||
Stock Option Program | ||
Vesting period | 1 year |
Stock-Based Compensation - RSU,
Stock-Based Compensation - RSU, RS, Performance Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Restricted Stock and Restricted Stock Units | ||
Unit and Shares Activity: | ||
Number of Shares - Nonvested - Beginning balance | 1,789 | |
Number of Shares - Granted - Annual | 564 | |
Number of Shares - Granted - Other | 13 | |
Number of Shares - Vested | (686) | |
Number of Shares - Forfeited | (50) | |
Number of Shares - Nonvested - Ending balance | 1,630 | |
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 | $ 180.02 | |
Weighted Average Grant Date Fair Value - Granted - Annual | 200.41 | |
Weighted Average Grant Date Fair Value - Granted - Other | 181.09 | |
Weighted Average Grant Date Fair Value - Vested | 148.24 | |
Weighted Average Grant Date Fair Value - Forfeited | 190.88 | |
Weighted Average Grant Date Fair Value - Nonvested - Ending balance | $ 200.12 | |
Compensation expense yet to be recognized | $ 90 | |
Expense recognition period | 23 months | |
Fair value that vested | $ 136 | $ 154 |
Tax benefit realized from vesting | $ 26 | 29 |
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 Shares - Nonvested - Beginning balance | 562 | |
Number of Shares - Granted - Annual | 162 | |
Number of Shares - Vested | (210) | |
Number of Shares - Performance Change | (72) | |
Number of Shares - Forfeited | (22) | |
Number of Shares - Nonvested - Ending balance | 420 | |
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 | $ 188.96 | |
Weighted Average Grant Date Fair Value - Granted - Annual | 207.49 | |
Weighted Average Grant Date Fair Value - Vested | 162.16 | |
Weighted Average Grant Date Fair Value - Performance Change | 206.51 | |
Weighted Average Grant Date Fair Value - Forfeited | 209.93 | |
Weighted Average Grant Date Fair Value - Nonvested - Ending balance | $ 205.34 | |
Compensation expense yet to be recognized | $ 20 | |
Expense recognition period | 19 months | |
Fair value that vested | $ 45 | 48 |
Tax benefit realized from vesting | $ 9 | $ 11 |
Vesting or performance period | 3 years | |
Performance shares awarded at estimated number of shares at the end of the performance period | 100.00% | |
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) - segment | 3 Months Ended | 6 Months Ended |
Mar. 31, 2019 | Sep. 30, 2019 | |
Business Segments | ||
Number of business segments | 5 | 4 |
Business Segments - Segment inf
Business Segments - Segment information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Business Segment Information | |||||
Net sales | $ 7,991 | $ 8,152 | $ 24,025 | $ 24,820 | |
Operating Income | 2,011 | 2,016 | 4,849 | 5,424 | |
Assets | 42,550 | 42,550 | $ 36,500 | ||
Depreciation and amortization | 1,130 | 1,117 | |||
Capital expenditures | 1,161 | 1,046 | |||
Business Segments. | Safety and Industrial | |||||
Business Segment Information | |||||
Net sales | 2,849 | 3,021 | 8,796 | 9,542 | |
Operating Income | 765 | 697 | 2,062 | 2,753 | |
Business Segments. | Transportation and Electronics | |||||
Business Segment Information | |||||
Net sales | 2,503 | 2,619 | 7,312 | 7,665 | |
Operating Income | 631 | 726 | 1,746 | 2,051 | |
Business Segments. | Health Care | |||||
Business Segment Information | |||||
Net sales | 1,721 | 1,643 | 5,290 | 5,118 | |
Operating Income | 459 | 475 | 1,406 | 1,443 | |
Business Segments. | Consumer | |||||
Business Segment Information | |||||
Net sales | 1,324 | 1,302 | 3,821 | 3,819 | |
Operating Income | 308 | 300 | 809 | 811 | |
Corporate and Unallocated | |||||
Business Segment Information | |||||
Net sales | 28 | 35 | 98 | 47 | |
Operating Income | (40) | (57) | (858) | (1,293) | |
Elimination of Dual Credit | |||||
Business Segment Information | |||||
Net sales | (434) | (468) | (1,292) | (1,371) | |
Operating Income | $ (112) | $ (125) | $ (316) | $ (341) |