Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2021shares | |
Document Information | |
Entity Registrant Name | 3M COMPANY |
Entity Central Index Key | 0000066740 |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Mar. 31, 2021 |
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 | 579,675,002 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
Common Stock | New York Stock Exchange, Inc. | |
Document Information | |
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. | |
Document Information | |
Title of 12(b) Security | Common Stock, Par Value $.01 Per Share |
Trading Symbol | MMM |
Security Exchange Name | CHX |
1.500% Notes due 2026 | New York Stock Exchange, Inc. | |
Document Information | |
Title of 12(b) Security | 1.500% Notes due 2026 |
Trading Symbol | MMM26 |
Security Exchange Name | NYSE |
0.375% Notes due 2022 | New York Stock Exchange, Inc. | |
Document Information | |
Title of 12(b) Security | 0.375% Notes due 2022 |
Trading Symbol | MMM22A |
Security Exchange Name | NYSE |
0.950% Notes due 2023 | New York Stock Exchange, Inc. | |
Document Information | |
Title of 12(b) Security | 0.950% Notes due 2023 |
Trading Symbol | MMM23 |
Security Exchange Name | NYSE |
1.750% Notes due 2030 | New York Stock Exchange, Inc. | |
Document Information | |
Title of 12(b) Security | 1.750% Notes due 2030 |
Trading Symbol | MMM30 |
Security Exchange Name | NYSE |
1.500% Notes due 2031 | New York Stock Exchange, Inc. | |
Document Information | |
Title of 12(b) Security | 1.500% Notes due 2031 |
Trading Symbol | MMM31 |
Security Exchange Name | NYSE |
Consolidated Statement of Incom
Consolidated Statement of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Consolidated Statement of Income | ||
Net sales | $ 8,851 | $ 8,075 |
Operating expenses | ||
Cost of sales | 4,525 | 4,109 |
Selling, general and administrative expenses | 1,808 | 1,768 |
Research, development and related expenses | 524 | 537 |
Gain on sale of businesses | (2) | |
Total operating expenses | 6,857 | 6,412 |
Operating income | 1,994 | 1,663 |
Interest expense and income | ||
Other expense (income), net | 49 | 75 |
Income before income taxes | 1,945 | 1,588 |
Provision for income taxes | 319 | 278 |
Income of consolidated group | 1,626 | 1,310 |
Income (loss) from unconsolidated subsidiaries, net of taxes | 1 | |
Net income including noncontrolling interest | 1,627 | 1,310 |
Less: Net income (loss) attributable to noncontrolling interest | 3 | 2 |
Net income attributable to 3M | $ 1,624 | $ 1,308 |
Weighted average 3M common shares outstanding - basic (in shares) | 580.5 | 576.8 |
Earnings per share attributable to 3M common shareholders - basic (in dollars per share) | $ 2.80 | $ 2.27 |
Weighted average 3M common shares outstanding - diluted (in shares) | 586.3 | 581.5 |
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share) | $ 2.77 | $ 2.25 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Consolidated Statement of Comprehensive Income | ||
Net income including noncontrolling interest | $ 1,627 | $ 1,310 |
Other comprehensive income (loss), net of tax: | ||
Cumulative translation adjustment | (222) | (444) |
Defined benefit pension and postretirement plans adjustment | 119 | 108 |
Cash flow hedging instruments | 58 | 47 |
Total other comprehensive income (loss), net of tax | (45) | (289) |
Comprehensive income (loss) including noncontrolling interest | 1,582 | 1,021 |
Comprehensive (income) loss attributable to noncontrolling interest | (4) | 1 |
Comprehensive income (loss) attributable to 3M | $ 1,578 | $ 1,022 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 4,636 | $ 4,634 |
Marketable securities - current | 501 | 404 |
Accounts receivable - net of allowances of $231 and $233 | 4,817 | 4,705 |
Inventories | ||
Finished goods | 2,215 | 2,081 |
Work in process | 1,249 | 1,226 |
Raw materials and supplies | 994 | 932 |
Total inventories | 4,458 | 4,239 |
Prepaids | 535 | 675 |
Other current assets | 398 | 325 |
Total current assets | 15,345 | 14,982 |
Property, plant and equipment | 26,705 | 26,650 |
Less: Accumulated depreciation | (17,465) | (17,229) |
Property, plant and equipment - net | 9,240 | 9,421 |
Operating lease right of use assets | 871 | 864 |
Goodwill | 13,654 | 13,802 |
Intangible assets - net | 5,697 | 5,835 |
Other assets | 2,373 | 2,440 |
Total assets | 47,180 | 47,344 |
Current liabilities | ||
Short-term borrowings and current portion of long-term debt | 1,368 | 806 |
Accounts payable | 2,670 | 2,561 |
Accrued payroll | 655 | 747 |
Accrued income taxes | 277 | 300 |
Operating lease liabilities - current | 267 | 256 |
Other current liabilities | 3,126 | 3,278 |
Total current liabilities | 8,363 | 7,948 |
Long-term debt | 16,819 | 17,989 |
Pension and postretirement benefits | 4,231 | 4,405 |
Operating lease liabilities | 609 | 609 |
Other liabilities | 3,330 | 3,462 |
Total liabilities | 33,352 | 34,413 |
Commitments and contingencies (Note 14) | ||
3M Company shareholders' equity: | ||
Common stock par value, $.01 par value: 944,033,056 shares issued; Shares outstanding - March 31, 2021: 579,675,002; Shares outstanding - December 31, 2020: 577,749,638 | 9 | 9 |
Additional paid-in capital | 6,283 | 6,162 |
Retained earnings | 44,255 | 43,821 |
Treasury stock, at cost: Shares at March 31, 2021: 364,358,054; Shares at December 31, 2020: 366,283,418 | (29,020) | (29,404) |
Accumulated other comprehensive income (loss) | (7,767) | (7,721) |
Total 3M Company shareholders' equity | 13,760 | 12,867 |
Noncontrolling interest | 68 | 64 |
Total equity | 13,828 | 12,931 |
Total liabilities and equity | $ 47,180 | $ 47,344 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheet | ||
Allowances for doubtful accounts receivable | $ 231 | $ 233 |
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 |
Common stock, Shares outstanding (in shares) | 579,675,002 | 577,749,638 |
Treasury stock (in shares) | 364,358,054 | 366,283,418 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net income including noncontrolling interest | $ 1,627 | $ 1,310 |
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities | ||
Depreciation and amortization | 460 | 440 |
Company pension and postretirement contributions | (47) | (39) |
Company pension and postretirement expense | 47 | 77 |
Stock-based compensation expense | 131 | 120 |
Gain on sale of businesses | (2) | |
Deferred income taxes | 16 | 29 |
Changes in assets and liabilities | ||
Accounts receivable | (205) | (143) |
Inventories | (304) | (207) |
Accounts payable | 155 | 12 |
Accrued income taxes (current and long-term) | 42 | 68 |
Other - net | (234) | (452) |
Net cash provided by (used in) operating activities | 1,688 | 1,213 |
Cash Flows from Investing Activities | ||
Purchases of property, plant and equipment (PP&E) | (310) | (332) |
Proceeds from sale of PP&E and other assets | 32 | 7 |
Acquisitions, net of cash acquired | (25) | |
Purchases of marketable securities and investments | (428) | (318) |
Proceeds from maturities and sale of marketable securities and investments | 318 | 207 |
Proceeds from sale of businesses, net of cash sold | 86 | |
Other - net | 19 | |
Net cash provided by (used in) investing activities | (369) | (375) |
Cash Flows from Financing Activities | ||
Change in short-term debt - net | 6 | 462 |
Repayment of debt (maturities greater than 90 days) | (450) | |
Proceeds from debt (maturities greater than 90 days) | 1,745 | |
Purchases of treasury stock | (231) | (365) |
Proceeds from issuance of treasury stock pursuant to stock option and benefit plans | 293 | 149 |
Dividends paid to shareholders | (858) | (847) |
Other - net | (11) | (36) |
Net cash provided by (used in) financing activities | (1,251) | 1,108 |
Effect of exchange rate changes on cash and cash equivalents | (66) | (46) |
Net increase (decrease) in cash and cash equivalents | 2 | 1,900 |
Cash and cash equivalents at beginning of year | 4,634 | 4,634 |
Cash and cash equivalents at end of period | $ 4,636 | $ 4,253 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Significant Accounting Policies | |
Significant Accounting Policies | 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. Effective in the first quarter of 2021, 3M made the following changes. Information provided herein reflects the impact of these changes for all periods presented. ● Change in accounting principle for net periodic pension and postretirement plan cost. See below for additional information. ● Change in measure of segment operating performance used by 3M’s chief operating decision maker—impacting 3M’s disclosed measure of segment profit/loss (business segment operating income). See additional information in Note 16. ● Change in alignment of certain products within 3M’s Consumer business segment—creating the Consumer Health and Safety Division. See additional information in Note 16. Change in Accounting Principle for Determining Net Periodic Pension and Postretirement Plan Cost In the first quarter of 2021, 3M changed the method it uses to calculate the market-related value of fixed income securities included in its pension and other postretirement plan assets. The market-related value is used to determine the expected return on plan assets and the amortization of net unamortized actuarial gains or losses expense components of net periodic benefit cost. The Company previously used the calculated value approach for all plan assets, deferring over three years the impact on these amounts of asset gains or losses that differed from expected returns. 3M changed to the fair value approach for calculating market-related value for the fixed income class of plan assets, which does not involve deferring the impact of excess plan asset gains or losses in the determination of these two components of net periodic benefit cost. 3M considers the use of the fair value approach preferrable to the calculated value approach as it results in a more current reflection of impacts of changes in value of these plan assets in the determination of net periodic benefit cost. Additionally, given the plans’ liability-driven investment strategy whereby the changes in value of the fixed income plan assets should offset changes in the value of the plans’ liabilities, this approach more closely aligns the expected return on plan assets expense component with the value reflected in the plans’ funded status. This change was applied retrospectively to all periods presented within 3M’s financial statements. The change did not impact consolidated operating income or net cash provided by operating activities but did impact the previously reported portion of pension and postretirement net periodic benefit cost (benefit) that was included within non-operating other expense (income) along with related consolidated income items such as net income and earnings per share. Other impacts included related changes to previously reported consolidated other comprehensive income, retained earnings, accumulated other comprehensive income (loss), and associated line items within the determination of net cash provided by operating activities. For classes of plan assets other than fixed income investments, the Company continues to use the calculated value approach to determine their market-related value. The adoption of this change impacted previously reported amounts included herein as indicated in the tables below. Consolidated Statement of Income Three months ended March 31, 2020 Under Prior (Millions, except per share amounts) Method As Adjusted Other expense (income), net $ 96 $ 75 Income before income taxes $ 1,567 $ 1,588 Provision for income taxes 273 278 Income of consolidated group $ 1,294 $ 1,310 Net income including noncontrolling interest $ 1,294 $ 1,310 Net income attributable to 3M $ 1,292 $ 1,308 Earnings per share attributable to 3M common shareholders — basic $ 2.24 $ 2.27 Earnings per share attributable to 3M common shareholders — diluted $ 2.22 $ 2.25 Consolidated Statement of Comprehensive Income Three months ended March 31, 2020 Under Prior (Millions) Method As Adjusted Net income including noncontrolling interest $ 1,294 $ 1,310 Other comprehensive income (loss), net of tax: Defined benefit pension and postretirement plans adjustment $ 119 $ 108 Total other comprehensive income (loss), net of tax $ (278) $ (289) Comprehensive income (loss) including noncontrolling interest $ 1,016 $ 1,021 Comprehensive income (loss) attributable to 3M $ 1,017 $ 1,022 Consolidated Balance Sheet As of December 31, 2020 Under Prior (Millions) Method As Adjusted Retained Earnings $ 43,761 $ 43,821 Accumulated other comprehensive income (loss) $ (7,661) $ (7,721) Consolidated Statement of Cash Flows Three months ended March 31, 2020 Under Prior (Millions) Method As Adjusted Net income including noncontrolling interest $ 1,294 $ 1,310 Company pension and postretirement expense $ 98 $ 77 Other — net $ (457) $ (452) The cumulative adjustment as of January 1, 2020, the beginning of the earliest period presented in the consolidated financial statements included herein, was a $5 million reduction to each of retained earnings and accumulated Earnings Per Share The difference in the weighted average 3M shares outstanding for calculating basic and diluted earnings per share attributable to 3M common shareholders is the result of the dilution associated with the Company’s stock-based compensation plans. Certain options outstanding under these stock-based compensation plans 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 (8.7 million and 19.2 million average options for the three months ended March 31, 2021 and 2020, respectively). The computations for basic and diluted earnings per share follow: Earnings Per Share Computations Three months ended March 31, (Amounts in millions, except per share amounts) 2021 2020 Numerator: Net income attributable to 3M $ 1,624 $ 1,308 Denominator: Denominator for weighted average 3M common shares outstanding – 580.5 576.8 Dilution associated with the Company’s stock-based compensation plans 5.8 4.7 Denominator for weighted average 3M common shares outstanding – 586.3 581.5 Earnings per share attributable to 3M common shareholders – $ 2.80 $ 2.27 Earnings per share attributable to 3M common shareholders – $ 2.77 $ 2.25 New Accounting Pronouncements Refer to Note 1 in 3M’s 2020 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. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) Eliminates certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for transactions outside of business combination that result in a step-up in the tax basis of goodwill. January 1, 2021 Adoption of this ASU did not have a material impact on 3M’s consolidated results of operations and financial condition. ASU No. 2020-01, Clarifying the Interactions between Topic 321, Investments—Equity Securities, Topic 323, Investments—Equity Method and Joint Ventures, and Topic 815, Derivatives and Hedging Clarifies when accounting for certain equity securities, a Company should consider observable transactions before applying or upon discontinuing the equity method of accounting for the purposes of applying the measurement alternative. Indicates when determining the accounting for certain derivatives, a Company should not consider if the underlying securities would be accounted for under the equity method or fair value option. January 1, 2021 Adoption of this ASU did not have a material impact on 3M’s consolidated results of operations and financial condition. ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Reference Rate Reform (Topic 848): Scope Provides temporary optional expedients and exceptions to existing guidance on contract modifications and hedge accounting to facilitate the market transition from existing reference rates, such as LIBOR which is being phased out beginning at the end of 2021, to alternate reference rates, such as SOFR. Effective upon ASUs’ issuances in 2020 & 2021 With the beginning of the phase out of LIBOR at the end of 2021, 3M continues to evaluate commercial contracts that may utilize LIBOR and will continue to monitor developments during the LIBOR transition period. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Revenue | |
Revenue | NOTE 2. Revenue Contract Balances: Deferred revenue primarily relates to revenue that is recognized over time for one-year software license contracts. Deferred revenue (current portion) as of March 31, 2021 and December 31, 2020 was $482 million and $498 million, respectively. Approximately $180 million of the December 31, 2020 balance was recognized as revenue during the three months ended March 31, 2021, while approximately $160 million of the December 31, 2019 balance was recognized as revenue during the three months ended March 31, 2020. Operating Lease Revenue: Net sales includes rental revenue from durable medical devices as part of operating lease arrangements (reported within the Medical Solutions Division), which was $140 million and $142 million for the three months ended March 31, 2021 and 2020, respectively. 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 March 31, Net Sales (Millions) 2021 2020 Abrasives $ 352 $ 330 Automotive Aftermarket 312 284 Closure and Masking Systems 243 268 Electrical Markets 307 288 Industrial Adhesives and Tapes 768 671 Personal Safety 1,237 989 Roofing Granules 108 95 Other Safety and Industrial — 2 Total Safety and Industrial Business Segment $ 3,327 $ 2,927 Advanced Materials $ 316 $ 288 Automotive and Aerospace 516 448 Commercial Solutions 438 430 Electronics 1,042 863 Transportation Safety 218 211 Other Transportation and Electronics 1 (1) Total Transportation and Electronics Business Segment $ 2,531 $ 2,239 Drug Delivery $ — $ 105 Food Safety 88 91 Health Information Systems 289 277 Medical Solutions 1,267 1,153 Oral Care 363 277 Separation and Purification Sciences 241 202 Other Health Care — (1) Total Health Care Business Group $ 2,248 $ 2,104 Consumer Health and Safety $ 150 $ 172 Home Care 279 271 Home Improvement 623 503 Stationery and Office 285 268 Other Consumer 36 36 Total Consumer Business Group $ 1,373 $ 1,250 Corporate and Unallocated $ (2) $ — Elimination of Dual Credit (626) (445) Total Company $ 8,851 $ 8,075 Three months ended March 31, 2021 Net Sales (Millions) Americas Asia Pacific Europe, Middle East and Africa Other Unallocated Worldwide Safety and Industrial $ 1,697 $ 823 $ 807 $ — $ 3,327 Transportation and Electronics 650 1,490 391 — 2,531 Health Care 1,311 408 529 — 2,248 Consumer 949 278 146 — 1,373 Corporate and Unallocated (1) — — (1) (2) Elimination of Dual Credit (278) (230) (118) — (626) Total Company $ 4,328 $ 2,769 $ 1,755 $ (1) $ 8,851 Three months ended March 31, 2020 Net Sales (Millions) Americas Asia Pacific Europe, Middle East and Africa Other Unallocated Worldwide Safety and Industrial $ 1,517 $ 712 $ 698 $ — $ 2,927 Transportation and Electronics 675 1,202 362 — 2,239 Health Care 1,281 356 467 — 2,104 Consumer 874 250 127 (1) 1,250 Corporate and Unallocated 1 — — (1) — Elimination of Dual Credit (206) (175) (64) — (445) Total Company $ 4,142 $ 2,345 $ 1,590 $ (2) $ 8,075 Americas included United States net sales of $3.6 billion and $3.4 billion for the three months ended March 31, 2021 and 2020, respectively. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Mar. 31, 2021 | |
Acquisitions and Divestitures | |
Acquisitions and Divestitures | NOTE 3. Acquisitions and Divestitures Refer to Note 3 in 3M’s 2020 Annual Report on Form 10-K for more information on relevant pre-2021 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. 2021 acquisitions: There were no acquisitions that closed during the three months ended March 31, 2021. 2020 acquisitions: There were no acquisitions that closed during the year ended December 31, 2020. 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. 2021 divestitures: There were no divestitures that closed during the three months ended March 31, 2021. 2020 divestitures: During 2020, as described in Note 3 in 3M’s 2020 Annual Report on Form 10-K, the Company divested its advanced ballistic-protection business, substantially all of its drug delivery business, and a small dermatology products business. Operating income and held for sale amounts : The aggregate operating income of applicable businesses held for sale with respect to the first three months of 2020 was $25 million. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | NOTE 4. Goodwill and Intangible Assets There was no goodwill recorded from acquisitions during the first three months of 2021. 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, 2020 and March 31, 2021, follow: Goodwill (Millions) Safety and Industrial Transportation and Electronics Health Care Consumer Total Company Balance as of December 31, 2020 $ 4,687 $ 1,858 $ 6,992 $ 265 $ 13,802 Translation and other (29) (14) (98) (7) (148) Balance as of March 31, 2021 $ 4,658 $ 1,844 $ 6,894 $ 258 $ 13,654 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 16, effective in the first quarter of 2021, the Company changed its business segment reporting. 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, the results of which were immaterial. 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 March 31, 2021 and December 31, 2020, follow: March 31, December 31, (Millions) 2021 2020 Customer related intangible assets $ 4,266 $ 4,280 Patents 517 537 Other technology-based intangible assets 2,113 2,114 Definite-lived tradenames 1,172 1,178 Other amortizable intangible assets 104 104 Total gross carrying amount $ 8,172 $ 8,213 Accumulated amortization — customer related (1,473) (1,422) Accumulated amortization — patents (495) (512) Accumulated amortization — other technology-based (687) (638) Accumulated amortization — definite-lived tradenames (397) (385) Accumulated amortization — other (78) (79) Total accumulated amortization $ (3,130) $ (3,036) Total finite-lived intangible assets — net $ 5,042 $ 5,177 Non-amortizable intangible assets (primarily tradenames) 655 658 Total intangible assets — net $ 5,697 $ 5,835 Certain tradenames acquired by 3M are not amortized because they have been in existence for over 60 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. As discussed in Note 13, 3M reflected an immaterial charge related to impairment of certain indefinite-lived assets in the first quarter of 2020. Amortization expense for the three months ended March 31, 2021 and 2020 follows: Three months ended March 31, (Millions) 2021 2020 Amortization expense $ 133 $ 134 Expected amortization expense for acquired amortizable intangible assets recorded as of March 31, 2021: Remainder of After (Millions) 2021 2022 2023 2024 2025 2026 2026 Amortization expense $ 395 $ 514 $ 488 $ 458 $ 428 $ 421 $ 2,338 The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, accelerated amortization of intangible assets and other events. 3M expenses the costs incurred to renew or extend the term of intangible assets. |
Restructuring Actions and Exit
Restructuring Actions and Exit Activities | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring Actions and Exit Activities | |
Restructuring Actions and Exit Activities | NOTE 5. Restructuring Actions and Exit Activities 2020 and 2021 Restructuring Actions: Operational/Marketing Capability Restructuring: As described in Note 5 in 3M’s 2020 Annual Report on Form 10-K, in late 2020, 3M announced it would undertake certain actions to further enhance its operations and marketing capabilities to take advantage of certain global market trends while de-prioritizing investments in slower-growth end markets. During the fourth quarter of 2020, management approved and committed to undertake associated restructuring actions impacting approximately 2,100 positions resulting in a pre-tax charge of $137 million. In the first quarter of 2021, management approved and committed to undertake additional actions under this initiative resulting in a pre-tax charge of $14 million. Remaining activities related to the restructuring actions approved and committed under this initiative are expected to be largely completed through 2021. 3M is planning further actions under this initiative throughout 2021. This aggregate initiative, spanning 2020 and 2021, is expected to impact approximately 2,900 positions worldwide with an expected pre-tax charge of $250 to $300 million. The related first quarter 2021 restructuring charges were recorded in the income statement as follows: (Millions) First Quarter 2021 Cost of sales $ 1 Selling, general and administrative expenses 9 Research, development and related expenses 4 Total operating income impact $ 14 The business segment operating income impact of these restructuring charges is summarized as follows: First Quarter 2021 (Millions) Employee-Related Safety and Industrial $ 2 Transportation and Electronics 3 Health Care 1 Consumer 1 Corporate and Unallocated 7 Total Operating Expense $ 14 Restructuring actions, including cash and non-cash impacts, follow: (Millions) Employee-Related Accrued restructuring action balances as of December 31, 2020 $ 101 Incremental expense incurred in the first quarter of 2021 $ 14 Cash payments (14) Accrued restructuring action balances as of March 31, 2021 $ 101 Divestiture-Related Restructuring As described in Note 5 in 3M’s 2020 Annual Report on Form 10-K, during the second quarter of 2020, following the divestiture of substantially all of the drug delivery business, management approved and committed to undertake certain restructuring actions addressing corporate functional costs and manufacturing footprint across 3M in relation to the magnitude of amounts previously allocated/burdened to the divested business. These actions affected approximately 1,300 positions worldwide and resulted in a second quarter 2020 pre-tax charge of $55 million, within Corporate and Unallocated. Divestiture-related restructuring actions, including cash and non-cash impacts, follow: (Millions) Employee-Related Asset-Related and Other Total Accrued divestiture-related restructuring action balances as of December 31, 2020 $ 15 $ 9 $ 24 Cash payments (1) — (1) Adjustments (1) — (1) Accrued divestiture-related restructuring action balances as of March 31, 2021 $ 13 $ 9 $ 22 Remaining activities related to this divestiture-related restructuring are expected to be largely completed through the third quarter of 2021. Other Restructuring As described in Note 5 in 3M’s 2020 Annual Report on Form 10-K, in the second quarter of 2020, management approved and committed to undertake certain restructuring actions addressing structural enterprise costs and operations in certain end markets as a result of the COVID-19 pandemic and related economic impacts. These actions affected approximately 400 positions worldwide and resulted in a second quarter 2020 pre-tax charge of $58 million. Restructuring actions, including cash and non-cash impacts, follow: (Millions) Employee-Related Accrued restructuring action balances as of December 31, 2020 $ 24 Cash payments (4) Adjustments (9) Accrued restructuring action balances as of March 31, 2021 $ 11 Remaining activities related to this restructuring are expected to be largely completed through the second quarter of 2021. |
Supplemental Income Statement I
Supplemental Income Statement Information | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, (Millions) 2021 2020 Interest expense $ 132 $ 123 Interest income (4) (10) Pension and postretirement net periodic benefit cost (benefit) (79) (38) Total $ 49 $ 75 Interest expense includes an early debt extinguishment pre-tax charge of approximately $11 million in the first quarter of 2021. 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. Refer to Note 11 for additional details on the components of pension and postretirement net periodic benefit costs. |
Supplemental Equity and Compreh
Supplemental Equity and Comprehensive Income Information | 3 Months Ended |
Mar. 31, 2021 | |
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 $1.48 and $1.47 per share for the first quarter 2021 and 2020, respectively. Consolidated Changes in Equity Three months ended March 31, 2021 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, 2020 $ 12,931 $ 6,171 $ 43,821 $ (29,404) $ (7,721) $ 64 Net income 1,627 1,624 3 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (222) (223) 1 Defined benefit pension and post-retirement plans adjustment 119 119 — Cash flow hedging instruments 58 58 — Total other comprehensive income (loss), net of tax (45) Dividends declared (858) (858) Stock-based compensation 121 121 Reacquired stock (243) (243) Issuances pursuant to stock option and benefit plans 295 (332) 627 Balance at March 31, 2021 $ 13,828 $ 6,292 $ 44,255 $ (29,020) $ (7,767) $ 68 Three months ended March 31, 2020 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, 2019 $ 10,126 $ 5,916 $ 42,130 $ (29,849) $ (8,134) $ 63 Net income 1,310 1,308 2 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (444) (441) (3) Defined benefit pension and post-retirement plans adjustment 108 108 — Cash flow hedging instruments 47 47 — Total other comprehensive income (loss), net of tax (289) Dividends declared (847) (847) Stock-based compensation 117 117 Reacquired stock (356) (356) Issuances pursuant to stock option and benefit plans 153 (235) 388 Balance at March 31, 2020 $ 10,214 $ 6,033 $ 42,356 $ (29,817) $ (8,420) $ 62 Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M by Component Three months ended March 31, 2021 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, 2020, net of tax: $ (1,450) $ (6,098) $ (173) $ (7,721) Other comprehensive income (loss), before tax: Amounts before reclassifications (176) — 66 (110) Amounts reclassified out — 159 9 168 Total other comprehensive income (loss), before tax (176) 159 75 58 Tax effect (47) (40) (17) (104) Total other comprehensive income (loss), net of tax (223) 119 58 (46) Balance at March 31, 2021, net of tax: $ (1,673) $ (5,979) $ (115) $ (7,767) Three months ended March 31, 2020 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, 2019, net of tax: $ (1,899) $ (6,204) $ (31) $ (8,134) Other comprehensive income (loss), before tax: Amounts before reclassifications (439) — 77 (362) Amounts reclassified out — 150 (16) 134 Total other comprehensive income (loss), before tax (439) 150 61 (228) Tax effect (2) (42) (14) (58) Total other comprehensive income (loss), net of tax (441) 108 47 (286) Balance at March 31, 2020, net of tax: $ (2,340) $ (6,096) $ 16 $ (8,420) 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 March 31, Location on Income (Millions) 2021 2020 Statement Defined benefit pension and postretirement plans adjustments Gains (losses) associated with defined benefit pension and postretirement plans amortization Transition asset $ — $ (1) See Note 11 Prior service benefit 15 15 See Note 11 Net actuarial loss (173) (163) See Note 11 Curtailments/Settlements (1) (1) See Note 11 Total before tax (159) (150) Tax effect 40 42 Provision for income taxes Net of tax $ (119) $ (108) Cash flow hedging instruments gains (losses) Foreign currency forward/option contracts $ (7) $ 18 Cost of sales Interest rate contracts (2) (2) Interest expense Total before tax (9) 16 Tax effect 2 (4) Provision for income taxes Net of tax $ (7) $ 12 Total reclassifications for the period, net of tax $ (126) $ (96) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
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 through 2018, but the years 2005 through 2017 have not closed as the Company is in the process of resolving issues identified during those examinations. In addition to the U.S. federal examination, there is also audit activity in several U.S. state and foreign jurisdictions where the Company is subject to ongoing tax examinations and governmental assessments, which could be impacted by evolving political environments in those jurisdictions. As of March 31, 2021, no taxing authority 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 March 31, 2021 and December 31, 2020 are $1,094 million and $1,145 million, respectively. As of March 31, 2021 and December 31, 2020, the Company had valuation allowances of $143 million and $135 million on its deferred tax assets, respectively. The effective tax rate for the first quarter of 2021 was 16.4 percent, compared to 17.5 percent in the first quarter of 2020, a decrease of 1.1 percentage points. The primary factor that decreased the Company’s effective tax rate was nonrepeating favorable adjustments in 2021 related to impacts of U.S. international tax provisions. |
Marketable Securities
Marketable Securities | 3 Months Ended |
Mar. 31, 2021 | |
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) March 31, 2021 December 31, 2020 Corporate debt securities $ 7 $ 7 Commercial paper 384 237 Certificates of deposit/time deposits 7 31 U.S. treasury securities 100 125 U.S. municipal securities 3 4 Current marketable securities $ 501 $ 404 U.S. municipal securities $ 31 $ 30 Non-current marketable securities $ 31 $ 30 Total marketable securities $ 532 $ 434 At March 31, 2021 and December 31, 2020, gross unrealized, gross realized, and net realized gains and/or losses (pre-tax) were not material. The balances at March 31, 2021 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) March 31, 2021 Due in one year or less $ 501 Due after one year through five years 15 Due after five years through ten years 16 Total marketable securities $ 532 |
Long-Term Debt and Short-Term B
Long-Term Debt and Short-Term Borrowings | 3 Months Ended |
Mar. 31, 2021 | |
Long-Term Debt and Short-Term Borrowings | |
Long-Term Debt and Short-Term Borrowings | NOTE 10. Long-Term Debt and Short-Term Borrowings In March 2021, 3M, via a make-whole call offer, redeemed $450 million principal amount of 2.75% notes due 2022. The Company recorded an early debt extinguishment pre-tax charge of approximately $11 million within interest expense. This charge reflected the differential between the carrying value and the amount paid to reacquire the notes and related expenses. 2020 issuances, maturities, and extinguishments of short- and long-term debt are described in Note 5 in 3M’s 2020 Annual Report on Form 10-K. The Company had no commercial paper outstanding at March 31, 2021 and December 31, 2020. 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 March 31, 2021. The maturities of long-term debt for the periods subsequent to March 31, 2021 are as follows (in millions): Remainder of After 2021 2022 2023 2024 2025 2026 2026 Total $ 763 $ 1,256 $ 1,945 $ 1,100 $ 1,791 $ 1,516 $ 9,798 $ 18,169 |
Pension and Postretirement Bene
Pension and Postretirement Benefit Plans | 3 Months Ended |
Mar. 31, 2021 | |
Pension and Postretirement Benefit Plans | |
Pension and Postretirement Benefit Plans | NOTE 11. Pension and Postretirement Benefit Plans As discussed in Note 1, effective in the first quarter of 2021, 3M made a change in accounting principle for net periodic pension and postretirement plan cost. This impacted the expected return on plan assets and the amortization of net unamortized actuarial gains or losses expense components of net periodic benefit cost. This change was applied retrospectively to all periods presented within 3M’s financial statements. 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 three months ended March 31, 2021 and 2020 follow: Benefit Plan Information Three months ended March 31, Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2021 2020 2021 2020 2021 2020 Net periodic benefit cost (benefit) Operating expense Service cost $ 72 $ 66 $ 42 $ 38 $ 12 $ 11 Non-operating expense Interest cost $ 90 $ 124 $ 25 $ 31 $ 11 $ 16 Expected return on plan assets (264) (262) (81) (77) (19) (20) Amortization of transition asset — — — 1 — — Amortization of prior service benefit (6) (6) (1) (1) (8) (8) Amortization of net actuarial loss 132 123 27 29 14 11 Settlements, curtailments, special termination benefits and other — — — — 1 1 Total non-operating expense (benefit) (48) (21) (30) (17) (1) — Total net periodic benefit cost (benefit) $ 24 $ 45 $ 12 $ 21 $ 11 $ 11 For the three months ended March 31, 2021 contributions totaling $46 million were made to the Company’s U.S. and international pension plans and $1 million to its postretirement plans. For total year 2021, 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 2021. 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. |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2021 | |
Derivatives | |
Derivatives | NOTE 12. Derivatives The Company uses interest rate swaps, currency swaps, and forward and option contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows explains the various types of derivatives and financial instruments used by 3M, how and why 3M uses such instruments, how such instruments are accounted for, and how such instruments impact 3M’s financial position and performance. Additional information with respect to 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 2020 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 March 31, 2021, the Company had a balance of $115 million associated with the after-tax net unrealized loss associated with cash flow hedging instruments recorded in accumulated other comprehensive income. This includes a remaining balance of $106 million (after-tax loss) related to the forward starting interest rate swap and treasury rate lock contracts, which will be amortized over the respective lives of the notes. Based on exchange rates as of March 31, 2021, 3M expects to reclassify approximately $19 million over the next 12 months, $22 million over the remainder of 2021, $2 million in 2022 and $91 million after 2022 of the after-tax net unrealized foreign exchange cash flow hedging losses to earnings (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 from Accumulated Comprehensive Income on Derivative Other Comprehensive Income into Income Three months ended March 31, Three months ended March 31, 2021 2020 2021 2020 (Millions) Amount Amount Location Amount Amount Foreign currency forward/option contracts $ 66 $ 79 Cost of sales $ (7) $ 18 Interest rate contracts — (2) Interest expense (2) (2) Total $ 66 $ 77 $ (9) $ 16 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: Refer to the section below titled Statement of Income Location and Impact of Cash Flow and Fair Value Derivative Instruments 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 (Millions) Hedged Liabilities of the Hedged Liabilities Location on the Consolidated Balance Sheet March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Short-term borrowings and current portion of long-term debt $ 357 $ 373 $ 4 $ 5 Long-term debt 225 225 5 6 Total $ 582 $ 598 $ 9 $ 11 Net Investment Hedges: The Company may use non-derivative (foreign currency denominated debt) and derivative (foreign exchange forward contracts) instruments to hedge portions of the Company’s investment in foreign subsidiaries and manage foreign exchange risk. For instruments that are designated and qualify as hedges of net investments in foreign operations and that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in cumulative translation within other comprehensive income. The remainder of the change in value of such instruments is recorded in earnings. Recognition in earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operation. To the extent foreign currency denominated debt is not designated in or is dedesignated from a net investment hedge relationship, changes in value of that portion of foreign currency denominated debt due to exchange rate changes are recorded in earnings through their maturity date. 3M’s use of foreign exchange forward contracts designated in hedges of the Company’s net investment in foreign subsidiaries can vary by time period depending on when foreign currency denominated debt balances designated in such relationships are dedesignated, matured, or are newly issued and designated. Additionally, variation can occur in connection with the extent of the Company’s desired foreign exchange risk coverage. At March 31, 2021, the total notional amount of foreign exchange forward contracts designated in net investment hedges was approximately 50 million euros, along with a principal amount of long-term debt instruments designated in net investment hedges totaling 3.5 billion euros. The maturity dates of these derivative and nonderivative instruments designated in net investment hedges range from 2021 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 Amount of Gain (Loss) Excluded as Cumulative Translation within from Effectiveness Testing Other Comprehensive Income Recognized in Income Three months ended March 31, Three months ended March 31, 2021 2020 2021 2020 (Millions) Amount Amount Location Amount Amount Foreign currency denominated debt $ 167 $ 15 Cost of sales $ — $ — Foreign currency forward contracts 2 1 Cost of sales (1) 5 Total $ 169 $ 16 $ (1) $ 5 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 contracts that are not designated in hedging relationships to offset, in part, the impacts of changes in value of various non-functional currency denominated items including certain intercompany financing balances. 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: Gain (Loss) on Derivative Recognized in Income Three months ended March 31, 2021 2020 (Millions) Location Amount Amount Foreign currency forward/option contracts Cost of sales $ — $ 4 Foreign currency forward contracts Interest expense 22 (16) Total $ 22 $ (12) 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 March 31, 2021 Three months ended March 31, 2020 (Millions) Cost of sales Other expense Cost of sales Other expense 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 $ 4,525 $ 49 $ 4,109 $ 75 The effects of cash flow and fair value 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 $ (7) $ — $ 18 $ — Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income into income — (2) — (2) Gain or (loss) on fair value hedging relationships: Interest rate contracts: Hedged items $ — $ 2 $ — $ (2) Derivatives designated as hedging instruments — (2) — 2 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 Notional Fair Fair March 31, 2021 (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ 1,656 Other current assets $ 36 Other current liabilities $ 38 Foreign currency forward/option contracts 685 Other assets 21 Other liabilities 10 Interest rate contracts 403 Other current assets 5 Other current liabilities — Total derivatives designated as hedging instruments $ 62 $ 48 Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ 3,487 Other current assets $ 22 Other current liabilities $ 15 Total derivatives not designated as hedging instruments $ 22 $ 15 Total derivative instruments $ 84 $ 63 Gross Assets Liabilities Notional Fair Fair December 31, 2020 (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ 1,630 Other current assets $ 14 Other current liabilities $ 67 Foreign currency forward/option contracts 669 Other assets 10 Other liabilities 25 Interest rate contracts 403 Other current assets 7 Other current liabilities — Total derivatives designated as hedging instruments $ 31 $ 92 Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ 3,166 Other current assets $ 13 Other current liabilities $ 14 Total derivatives not designated as hedging instruments $ 13 $ 14 Total derivative instruments $ 44 $ 106 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, 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 March 31, 2021, 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 Cash Consolidated Recognized Collateral Net Amount of March 31, 2021 (Millions) Balance Sheet Derivative Liabilities Received Derivative Assets Derivatives subject to master netting agreements $ 84 $ 34 $ — $ 50 Derivatives not subject to master netting agreements — — Total $ 84 $ 50 December 31, 2020 (Millions) Derivatives subject to master netting agreements $ 44 $ 11 $ — $ 33 Derivatives not subject to master netting agreements — — Total $ 44 $ 33 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 Cash Net Amount of Consolidated Recognized Collateral Derivative March 31, 2021 (Millions) Balance Sheet Derivative Assets Pledged Liabilities Derivatives subject to master netting agreements $ 63 $ 34 $ — $ 29 Derivatives not subject to master netting agreements — — Total $ 63 $ 29 December 31, 2020 (Millions) Derivatives subject to master netting agreements $ 106 $ 11 $ — $ 95 Derivatives not subject to master netting agreements — — Total $ 106 $ 95 Currency Effects 3M estimates that year-on-year foreign currency transaction effects, including hedging impacts, decreased pre-tax income by approximately $10 million for the three months ended March 31, 2021. These estimates include transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 13. Fair Value Measurements 3M follows ASC 820, Fair Value Measurements and Disclosures, with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis. The Company adopted ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurements, as of January 1, 2020. This ASU primarily amended the disclosures around Level 3 investments, of which the Company had an immaterial amount for all periods presented. In addition to the information above, refer to Note 15 in 3M’s 2020 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) March 31, 2021 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: Corporate debt securities $ 7 $ — $ 7 $ — Commercial paper 384 — 384 — Certificates of deposit/time deposits 7 — 7 — U.S. treasury securities 100 100 — — U.S. municipal securities 34 — — 34 Derivative instruments — assets: Foreign currency forward/option contracts 79 — 79 — Interest rate contracts 5 — 5 — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts 63 — 63 — Fair Value Measurements Description Fair Value at Using Inputs Considered as (Millions) December 31, 2020 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: Corporate debt securities $ 7 $ — $ 7 $ — Commercial paper 237 — 237 — Certificates of deposit/time deposits 31 — 31 — U.S. treasury securities 125 125 — — U.S. municipal securities 34 — — 34 Derivative instruments — assets: Foreign currency forward/option contracts 37 — 37 — Interest rate contracts 7 — 7 — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts 106 — 106 — 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 Marketable securities — certain U.S. municipal securities only March 31, (Millions) 2021 2020 Beginning balance $ 34 $ 46 Total gains or losses: Included in earnings — — Included in other comprehensive income — — Purchases and issuances — 10 Sales and settlements — (19) Transfers in and/or out of level 3 — — Ending balance $ 34 $ 37 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 2020 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 indefinite-lived and long-lived asset impairments, goodwill 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 impairments of assets or adjustments to equity securities using the measurement alternative for the three months ended March 31, 2021. 3M reflected an immaterial charge related to impairment of certain indefinite-lived assets and a net charge of $22 million related to adjustment to the carrying value of equity securities using the measurement alternative during the three months ended March 31, 2020. 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, 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: March 31, 2021 December 31, 2020 Carrying Fair Carrying Fair (Millions) Value Value Value Value Long-term debt, excluding current portion $ 16,819 $ 18,277 $ 17,989 $ 20,496 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 March 31, 2021 and December 31, 2020 due to the lower interest rates and tighter credit spreads compared to issuance levels. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
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 claims, lawsuits and proceedings include, but are not limited to, products liability (involving products that the Company now or formerly manufactured and sold), intellectual property, commercial, antitrust, federal False Claims Act, securities, and state and federal environmental laws. Unless otherwise stated, the Company is vigorously defending all such litigation and proceedings. From time to time, the Company also receives subpoenas or requests for information from various government agencies. The Company generally responds to such subpoenas and requests in a cooperative, thorough and timely manner. These responses sometimes require time and effort and can result in considerable costs being incurred by the Company. Such subpoenas and requests can also lead to the assertion of claims or the commencement of administrative, civil or criminal legal proceedings against the Company and others, as well as to settlements. 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, suspension or 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, 2020. 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 March 31, 2021, the Company is a named defendant, with multiple co-defendants, in numerous lawsuits in various courts that purport to represent approximately 2,179 individual claimants, compared to approximately 2,075 individual claimants with actions pending December 31, 2020. 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 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. In addition, during the second half of 2020 and as of March 31, 2021, the Company has experienced an increase in the number of cases filed that allege injuries from exposures to coal mine dust. 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. In October 2019, the court granted the State’s motion to sever its unfair trade practices claim. In January 2020, the manufacturers filed a petition with the West Virginia Supreme Court, challenging the trial court’s rulings; that petition was denied in November 2020. 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 assertions of 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 may allocate to each defendant if the case were 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 its review of its respirator mask/asbestos liabilities, of pending and expected lawsuits and of 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 three months of 2021 for respirator mask/asbestos liabilities by $36 million. In the first quarter of 2021, the Company made payments for legal defense costs and settlements of $19 million related to the respirator mask/asbestos litigation. As previously disclosed, during the first quarter of 2019, the Company recorded a pre-tax charge of $313 million in conjunction with an increase in the accrual as a result of the March and April 2019 settlements-in-principle of the coal mine dust lawsuits mentioned above and the Company’s assessment of other then current and expected coal mine dust lawsuits (including the costs to resolve all then current and expected coal mine dust lawsuits in Kentucky and West Virginia at the time of the charge). As of March 31, 2021, the Company had an accrual for respirator mask/asbestos liabilities (excluding Aearo accruals) of $679 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 March 31, 2021, 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 acquired 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 March 31, 2021, 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 March 31, 2021, the Company, through its Aearo subsidiary, had accruals of $27 million for product liabilities and defense costs related to current and future Aearo-related asbestos, silica-related and coal mine dust 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. The accrual was reduced by $37 million during the second quarter of 2020 after paying Aearo’s share of certain settlements under the informal arrangement described below. The accrual reflects the Company’s assessment of pending and expected lawsuits, its review of its respirator mask/asbestos liabilities, and the cost of resolving claims of persons who claim more serious injuries. 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 capital investment in pollution control equipment, 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 PFAS 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. In the European Union, where 3M has manufacturing facilities in countries such as Germany and Belgium, recent regulatory activities have included preliminary work on various restrictions under the Regulation concerning the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), including the restriction of PFAS in certain usages and a broader restriction of PFAS as a class. As of December 2020, PFOA is subject to certain restrictions under EU’s Persistent Organic Pollutants (POPs) Recast Regulation. With respect to the applicability of the newly enacted POPs to certain manufacturing processes that create PFOA as an unintended and unavoidable byproduct designed to be removed through an emulsifier recycling process, Dyneon, a 3M subsidiary that operates a facility at Gendorf, Germany, proactively consulted with the relevant German regulatory authority. In response to the authority’s view that POPs may apply to those processes, Dyneon continues to communicate its position regarding POPs’ applicability, share technical process improvements that are in progress and discuss potential options if an agreement is not reached on the applicability of POPs. In the United States, 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 remediate 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 remediate the presence of PFAS in the soil and groundwater at the Company’s manufacturing facility in Decatur, Alabama associated with the historic (1978-1998) incorporation of wastewater treatment plant sludge. With ADEM’s agreement, 3M substantially completed installation of a multilayer cap on the former sludge incorporation areas. Further remediation activities, including certain on-site and off-site investigations and studies, will be conducted in accordance with the July 2020 Interim Consent Order described below in the “Other PFAS-related Matters” section. 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 work has been substantially completed at the Cottage Grove site, with operational and maintenance activities ongoing. 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 PFOA and PFOS. 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 April 2021, EPA released an updated toxicity assessment for 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 issued interim recommendations in December 2019, providing guidance for screening levels and preliminary remediation goals for groundwater that is a current or potential drinking water source, to inform final clean-up levels of contaminated sites. In February 2020, the EPA provided notice and requested public comment on certain preliminary determinations to regulate PFOA and PFOS under the Safe Drinking Water Act (SDWA). In June 2020, 3M submitted comments on EPA’s preliminary determinations to regulate PFOA and PFOS under the SDWA. EPA announced in its Spring 2020 Regulatory Agenda, released in June 2020, that it intended to publish a notice of proposed rulemaking to designate PFOA and PFOS as hazardous substances under CERCLA in August 2020. In November 2020, EPA announced it was developing of a new analytical method to test for PFAS in wastewater and other environmental media. In December 2020, EPA released two new guidance documents related to PFAS. First, it issued a Draft Compliance Guide for Imported Articles Containing Surface Coatings Subject to the Long-Chain Perfluoroalkyl Carboxylate and Perfluoroalkyl Sulfonate Chemical Substances Significant New Use Rule. Second, EPA released for public comment interim guidance on destroying and disposing of certain PFAS and PFAS-containing materials. 3M has submitted comments on both guidance documents. In March 2021, EPA published its intention to initiate a process to develop a national primary drinking water regulation for PFOA and PFOS; the process will include further analyses, scientific review and opportunities for public comment. EPA also announced in January 2021 that it will issue an advance notice of proposed rulemaking (ANPR) to solicit public comment on whether the agency should take additional regulatory steps to address PFAS contamination, including designating PFOA and PFOS and other PFAS as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and seeking comment on whether PFOA and PFOS and other PFAS should be subject to regulation as hazardous waste under the Resource Conservation and Recovery Act (RCRA). EPA indicated it will also issue an ANPR to collect information regarding manufacturers of PFAS and the presence and treatment of PFAS in discharges from these facilities. In January 2021, the new federal Administration withdrew this EPA ANPR announcement. EPA also separately issued an ANPR in March 2021 to collect information regarding manufacturers of PFAS and the presence and treatment of PFAS in discharges from these facilities. The U.S. Several state legislatures and state agencies have been evaluating or have taken actions related to cleanup standards, groundwater values or drinking water values for PFOS, PFOA, and other PFAS, and 3M has submitted various responsive comments. Those states include the following: Vermont finalized drinking water standards for a combination of PFOA, PFOS and three other PFAS in March 2020. New Jersey finalized drinking water standards and designated PFOA and PFOS as hazardous substances in June 2020. New York established drinking water standards for PFOA and PFOS in July 2020. New Hampshire established drinking water standards by legislation for certain PFAS, including PFOS and PFOA, in July 2020. Michigan implemented final drinking water standards for certain PFAS, including PFOS and PFOA, in August 2020. Massachusetts published final regulations establishing a drinking water standard relating to six combined PFAS in October 2020. Some other states have also been evaluating or have taken actions relating to PFOA, PFOS and other PFAS in products such as food packaging, carpets and other products. For example, in March 2021, California proposed listing PFOA and PFOS as carcinogens under its Proposition 65 law. In October 2020, 3M and several other parties filed notices of appeal in the appellate division of the Superior Court of New Jersey to challenge the validity of the New Jersey PFOS and PFOA regulations. In January 2021, the appellate division of the court denied the group’s motion to stay the regulations, and the parties are proceeding to litigation on the merits. In March 2021, 3M and several other parties filed a lawsuit against the New York State Department of Health, urging that drinking water levels set by the agency for PFOS and PFOA be vacated. The Company cannot predict what additional regulatory actions in the United States, Europe and elsewhere arising from the foregoing or other proceedings and activities, if any, may be taken regarding such compounds or the consequences of any such actions to the Company. Litigation Related to Historical PFAS Manufacturing Opera |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation | NOTE 15. 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, stock appreciation rights, restricted stock, restricted stock units, other stock awards, and performance units and performance shares. As of March 31, 2021, the remaining shares available for grant under the LTIP Program are 10.7 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 35 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 months ended March 31, 2021 and 2020. Stock-Based Compensation Expense Three months ended March 31, (Millions) 2021 2020 Cost of sales $ 22 $ 22 Selling, general and administrative expenses 84 73 Research, development and related expenses 25 25 Stock-based compensation expenses $ 131 $ 120 Income tax benefits (51) (39) Stock-based compensation expenses (benefits), net of tax $ 80 $ 81 Stock Option Program The following table summarizes stock option activity during the three months ended March 31, 2021: Weighted Average Weighted Remaining Aggregate Number of Average Contractual Intrinsic Value (Options in thousands) Options Exercise Price Life (months) (millions) Under option — January 1 35,401 $ 156.23 Granted 3,612 175.04 Exercised (2,323) 104.16 Forfeited (104) 174.71 March 31 36,586 $ 161.34 68 $ 1,299 Options exercisable March 31 28,819 $ 158.58 57 $ 1,126 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 March 31, 2021, there was $93 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 25 months. The total intrinsic values of stock options exercised were $180 million and $98 million during the three months ended March 31, 2021 and 2020, respectively. Cash received from options exercised was $240 million and $100 million for the three months ended March 31, 2021 and 2020, respectively. The Company’s actual tax benefits realized for the tax deductions related to the exercise of employee stock options were $38 million and $20 million for the three months ended March 31, 2021 and 2020, respectively. For the primary 2021 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 2021 Exercise price $ 175.04 Risk-free interest rate 0.8 % Dividend yield 2.8 % Expected volatility 22.6 % Expected life (months) 83 Black-Scholes fair value $ 25.33 Expected volatility is a statistical measure of the amount by which a stock price is expected to fluctuate during a period. For the 2021 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 three months ended March 31, 2021: Weighted Average Number of Grant Date (Shares in thousands) Shares Fair Value Nonvested balance — As of January 1 1,722 $ 189.78 Granted 721 175.09 Vested (433) 232.62 Forfeited (33) 173.54 As of March 31 1,977 $ 175.31 As of March 31, 2021, there was $141 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 27 months. The total fair value of restricted stock and restricted stock units that vested during the three months ended March 31, 2021 and 2020 was $78 million and $88 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 $14 million and $16 million for the three months ended March 31, 2021 and 2020, 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 2021 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 three-year one The following table summarizes performance share activity during the three months ended March 31, 2021: Weighted Average Number of Grant Date (Shares in thousands) Shares Fair Value Undistributed balance — As of January 1 423 $ 188.61 Granted 163 176.41 Distributed (115) 228.80 Performance change 17 178.43 Forfeited (4) 172.92 As of March 31 484 $ 174.75 As of March 31, 2021, there was $40 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 21 months. The total fair value of performance shares that were distributed were $22 million and $35 million for the three months ended March 31, 2021 and 2020, respectively. The Company’s actual tax benefits realized for the tax deductions related to the distribution of performance shares were $4 million and $7 million for the three months ended March 31, 2021 and 2020, respectively. |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2021 | |
Business Segments | |
Business Segments | NOTE 16. Business Segments 3M’s businesses are organized, managed and internally grouped into segments based on differences in markets, products, technologies and services. 3M manages its operations in 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. 3M discloses business segment operating income as its measure of segment profit/loss, reconciled to both total 3M operating income and income before taxes. Business segment operating income includes dual credit for certain related operating income (as described below in “Elimination of Dual Credit”). Business segment operating income excludes certain expenses and income that are not allocated to business segments (as described below in “Corporate and Unallocated”). Additionally, the following special items are excluded from business segment operating income and, instead, are included within Corporate and Unallocated: significant litigation-related charges/benefits, gain/loss on sale of businesses (see Note 3), and divestiture-related restructuring actions (see Note 5). Effective in the first quarter of 2021, the measure of segment operating performance used by 3M’s CODM changed and, as a result, 3M’s disclosed measure of segment profit/loss (business segment operating income) was updated. The change to business segment operating income aligns with the update to how the CODM assesses performance and allocates resources for the Company’s business segments. The change included the following: Changes in cost attribution The extent of allocation and method of attribution of certain net costs were updated to result in fewer items remaining in Corporate and Unallocated and, instead, including them in 3M’s business segments’ operating performance. See the updated description of Corporate and Unallocated below. Previously, a larger portion of ongoing corporate staff costs and costs associated with centrally managed material resource centers was retained in Corporate and Unallocated. In addition, portions of pension costs and costs associated with certain centrally managed but ongoing business-related legal matters, along with certain insurance-related costs, were retained in Corporate and Unallocated. 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 impacted the amount of dual credit certain business segments receive as a result of sales district attribution. Also effective in the first quarter of 2021, within 3M’s Consumer business segment, certain safety products formerly within the Construction and Home Improvement Division and the Stationery and Office Division were moved to the newly-named Consumer Health and Safety Division (formerly the Consumer Health Care Division). The financial information presented herein reflects the impact of the preceding changes for all periods presented. Business Segment Information Three months ended (Millions) March 31, Net Sales 2021 2020 Safety and Industrial $ 3,327 $ 2,927 Transportation and Electronics 2,531 2,239 Health Care 2,248 2,104 Consumer 1,373 1,250 Corporate and Unallocated (2) — Elimination of Dual Credit (626) (445) Total Company $ 8,851 $ 8,075 Operating Performance Safety and Industrial $ 811 $ 694 Transportation and Electronics 591 464 Health Care 509 452 Consumer 289 265 Elimination of Dual Credit (159) (113) Total business segment operating income $ 2,041 $ 1,762 Corporate and Unallocated Special items: Significant litigation-related (charges)/benefits — (17) Gain/(loss) on sale of businesses — 2 Other corporate expense - net (47) (84) Total Corporate and Unallocated (47) (99) Total Company operating income $ 1,994 $ 1,663 Other expense/(income), net $ 49 $ 75 Income before income taxes $ 1,945 $ 1,588 Corporate and Unallocated Corporate and Unallocated operating income includes “special items” and “other corporate expense-net”. Special items include significant litigation-related charges/benefits, gain/loss on sale of businesses, and divestiture-related restructuring costs. Other corporate expense-net includes items such as net costs related to limited unallocated corporate staff and centrally managed material resource centers of expertise costs, certain litigation and environmental expenses largely related to legacy products/businesses not allocated to business segments, corporate philanthropic activity, and other net costs that 3M may choose not to allocate directly to its business segments. Other corporate expense-net also includes costs and income from contract manufacturing, transition services and other arrangements with the acquirer of the Communication Markets Division following its 2018 divestiture through 2019 and the acquirer of the former Drug Delivery business following its 2020 divestiture. Items classified as revenue from this activity are included in Corporate and Unallocated net sales. Because Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis. Elimination of Dual Credit 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) | 3 Months Ended |
Mar. 31, 2021 | |
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. Effective in the first quarter of 2021, 3M made the following changes. Information provided herein reflects the impact of these changes for all periods presented. ● Change in accounting principle for net periodic pension and postretirement plan cost. See below for additional information. ● Change in measure of segment operating performance used by 3M’s chief operating decision maker—impacting 3M’s disclosed measure of segment profit/loss (business segment operating income). See additional information in Note 16. ● Change in alignment of certain products within 3M’s Consumer business segment—creating the Consumer Health and Safety Division. See additional information in Note 16. |
Change in Accounting Principle for Determining Net Periodic Pension and Postretirement Plan Cost | Change in Accounting Principle for Determining Net Periodic Pension and Postretirement Plan Cost In the first quarter of 2021, 3M changed the method it uses to calculate the market-related value of fixed income securities included in its pension and other postretirement plan assets. The market-related value is used to determine the expected return on plan assets and the amortization of net unamortized actuarial gains or losses expense components of net periodic benefit cost. The Company previously used the calculated value approach for all plan assets, deferring over three years the impact on these amounts of asset gains or losses that differed from expected returns. 3M changed to the fair value approach for calculating market-related value for the fixed income class of plan assets, which does not involve deferring the impact of excess plan asset gains or losses in the determination of these two components of net periodic benefit cost. 3M considers the use of the fair value approach preferrable to the calculated value approach as it results in a more current reflection of impacts of changes in value of these plan assets in the determination of net periodic benefit cost. Additionally, given the plans’ liability-driven investment strategy whereby the changes in value of the fixed income plan assets should offset changes in the value of the plans’ liabilities, this approach more closely aligns the expected return on plan assets expense component with the value reflected in the plans’ funded status. This change was applied retrospectively to all periods presented within 3M’s financial statements. The change did not impact consolidated operating income or net cash provided by operating activities but did impact the previously reported portion of pension and postretirement net periodic benefit cost (benefit) that was included within non-operating other expense (income) along with related consolidated income items such as net income and earnings per share. Other impacts included related changes to previously reported consolidated other comprehensive income, retained earnings, accumulated other comprehensive income (loss), and associated line items within the determination of net cash provided by operating activities. For classes of plan assets other than fixed income investments, the Company continues to use the calculated value approach to determine their market-related value. The adoption of this change impacted previously reported amounts included herein as indicated in the tables below. Consolidated Statement of Income Three months ended March 31, 2020 Under Prior (Millions, except per share amounts) Method As Adjusted Other expense (income), net $ 96 $ 75 Income before income taxes $ 1,567 $ 1,588 Provision for income taxes 273 278 Income of consolidated group $ 1,294 $ 1,310 Net income including noncontrolling interest $ 1,294 $ 1,310 Net income attributable to 3M $ 1,292 $ 1,308 Earnings per share attributable to 3M common shareholders — basic $ 2.24 $ 2.27 Earnings per share attributable to 3M common shareholders — diluted $ 2.22 $ 2.25 Consolidated Statement of Comprehensive Income Three months ended March 31, 2020 Under Prior (Millions) Method As Adjusted Net income including noncontrolling interest $ 1,294 $ 1,310 Other comprehensive income (loss), net of tax: Defined benefit pension and postretirement plans adjustment $ 119 $ 108 Total other comprehensive income (loss), net of tax $ (278) $ (289) Comprehensive income (loss) including noncontrolling interest $ 1,016 $ 1,021 Comprehensive income (loss) attributable to 3M $ 1,017 $ 1,022 Consolidated Balance Sheet As of December 31, 2020 Under Prior (Millions) Method As Adjusted Retained Earnings $ 43,761 $ 43,821 Accumulated other comprehensive income (loss) $ (7,661) $ (7,721) Consolidated Statement of Cash Flows Three months ended March 31, 2020 Under Prior (Millions) Method As Adjusted Net income including noncontrolling interest $ 1,294 $ 1,310 Company pension and postretirement expense $ 98 $ 77 Other — net $ (457) $ (452) The cumulative adjustment as of January 1, 2020, the beginning of the earliest period presented in the consolidated financial statements included herein, was a $5 million reduction to each of retained earnings and accumulated |
Earnings Per Share | Earnings Per Share The difference in the weighted average 3M shares outstanding for calculating basic and diluted earnings per share attributable to 3M common shareholders is the result of the dilution associated with the Company’s stock-based compensation plans. Certain options outstanding under these stock-based compensation plans 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 (8.7 million and 19.2 million average options for the three months ended March 31, 2021 and 2020, respectively). The computations for basic and diluted earnings per share follow: Earnings Per Share Computations Three months ended March 31, (Amounts in millions, except per share amounts) 2021 2020 Numerator: Net income attributable to 3M $ 1,624 $ 1,308 Denominator: Denominator for weighted average 3M common shares outstanding – 580.5 576.8 Dilution associated with the Company’s stock-based compensation plans 5.8 4.7 Denominator for weighted average 3M common shares outstanding – 586.3 581.5 Earnings per share attributable to 3M common shareholders – $ 2.80 $ 2.27 Earnings per share attributable to 3M common shareholders – $ 2.77 $ 2.25 |
New Accounting Pronouncements | New Accounting Pronouncements Refer to Note 1 in 3M’s 2020 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. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) Eliminates certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim-period accounting for year-to-date loss limitations and changes in tax laws, and clarifying the accounting for transactions outside of business combination that result in a step-up in the tax basis of goodwill. January 1, 2021 Adoption of this ASU did not have a material impact on 3M’s consolidated results of operations and financial condition. ASU No. 2020-01, Clarifying the Interactions between Topic 321, Investments—Equity Securities, Topic 323, Investments—Equity Method and Joint Ventures, and Topic 815, Derivatives and Hedging Clarifies when accounting for certain equity securities, a Company should consider observable transactions before applying or upon discontinuing the equity method of accounting for the purposes of applying the measurement alternative. Indicates when determining the accounting for certain derivatives, a Company should not consider if the underlying securities would be accounted for under the equity method or fair value option. January 1, 2021 Adoption of this ASU did not have a material impact on 3M’s consolidated results of operations and financial condition. ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Reference Rate Reform (Topic 848): Scope Provides temporary optional expedients and exceptions to existing guidance on contract modifications and hedge accounting to facilitate the market transition from existing reference rates, such as LIBOR which is being phased out beginning at the end of 2021, to alternate reference rates, such as SOFR. Effective upon ASUs’ issuances in 2020 & 2021 With the beginning of the phase out of LIBOR at the end of 2021, 3M continues to evaluate commercial contracts that may utilize LIBOR and will continue to monitor developments during the LIBOR transition period. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Significant Accounting Policies | |
Impact on previously reported values after correction | Consolidated Statement of Income Three months ended March 31, 2020 Under Prior (Millions, except per share amounts) Method As Adjusted Other expense (income), net $ 96 $ 75 Income before income taxes $ 1,567 $ 1,588 Provision for income taxes 273 278 Income of consolidated group $ 1,294 $ 1,310 Net income including noncontrolling interest $ 1,294 $ 1,310 Net income attributable to 3M $ 1,292 $ 1,308 Earnings per share attributable to 3M common shareholders — basic $ 2.24 $ 2.27 Earnings per share attributable to 3M common shareholders — diluted $ 2.22 $ 2.25 Consolidated Statement of Comprehensive Income Three months ended March 31, 2020 Under Prior (Millions) Method As Adjusted Net income including noncontrolling interest $ 1,294 $ 1,310 Other comprehensive income (loss), net of tax: Defined benefit pension and postretirement plans adjustment $ 119 $ 108 Total other comprehensive income (loss), net of tax $ (278) $ (289) Comprehensive income (loss) including noncontrolling interest $ 1,016 $ 1,021 Comprehensive income (loss) attributable to 3M $ 1,017 $ 1,022 Consolidated Balance Sheet As of December 31, 2020 Under Prior (Millions) Method As Adjusted Retained Earnings $ 43,761 $ 43,821 Accumulated other comprehensive income (loss) $ (7,661) $ (7,721) Consolidated Statement of Cash Flows Three months ended March 31, 2020 Under Prior (Millions) Method As Adjusted Net income including noncontrolling interest $ 1,294 $ 1,310 Company pension and postretirement expense $ 98 $ 77 Other — net $ (457) $ (452) |
Earnings Per Share Computations | Three months ended March 31, (Amounts in millions, except per share amounts) 2021 2020 Numerator: Net income attributable to 3M $ 1,624 $ 1,308 Denominator: Denominator for weighted average 3M common shares outstanding – 580.5 576.8 Dilution associated with the Company’s stock-based compensation plans 5.8 4.7 Denominator for weighted average 3M common shares outstanding – 586.3 581.5 Earnings per share attributable to 3M common shareholders – $ 2.80 $ 2.27 Earnings per share attributable to 3M common shareholders – $ 2.77 $ 2.25 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue | |
Schedule of disaggregated revenue recognized during the period | Three months ended March 31, Net Sales (Millions) 2021 2020 Abrasives $ 352 $ 330 Automotive Aftermarket 312 284 Closure and Masking Systems 243 268 Electrical Markets 307 288 Industrial Adhesives and Tapes 768 671 Personal Safety 1,237 989 Roofing Granules 108 95 Other Safety and Industrial — 2 Total Safety and Industrial Business Segment $ 3,327 $ 2,927 Advanced Materials $ 316 $ 288 Automotive and Aerospace 516 448 Commercial Solutions 438 430 Electronics 1,042 863 Transportation Safety 218 211 Other Transportation and Electronics 1 (1) Total Transportation and Electronics Business Segment $ 2,531 $ 2,239 Drug Delivery $ — $ 105 Food Safety 88 91 Health Information Systems 289 277 Medical Solutions 1,267 1,153 Oral Care 363 277 Separation and Purification Sciences 241 202 Other Health Care — (1) Total Health Care Business Group $ 2,248 $ 2,104 Consumer Health and Safety $ 150 $ 172 Home Care 279 271 Home Improvement 623 503 Stationery and Office 285 268 Other Consumer 36 36 Total Consumer Business Group $ 1,373 $ 1,250 Corporate and Unallocated $ (2) $ — Elimination of Dual Credit (626) (445) Total Company $ 8,851 $ 8,075 Three months ended March 31, 2021 Net Sales (Millions) Americas Asia Pacific Europe, Middle East and Africa Other Unallocated Worldwide Safety and Industrial $ 1,697 $ 823 $ 807 $ — $ 3,327 Transportation and Electronics 650 1,490 391 — 2,531 Health Care 1,311 408 529 — 2,248 Consumer 949 278 146 — 1,373 Corporate and Unallocated (1) — — (1) (2) Elimination of Dual Credit (278) (230) (118) — (626) Total Company $ 4,328 $ 2,769 $ 1,755 $ (1) $ 8,851 Three months ended March 31, 2020 Net Sales (Millions) Americas Asia Pacific Europe, Middle East and Africa Other Unallocated Worldwide Safety and Industrial $ 1,517 $ 712 $ 698 $ — $ 2,927 Transportation and Electronics 675 1,202 362 — 2,239 Health Care 1,281 356 467 — 2,104 Consumer 874 250 127 (1) 1,250 Corporate and Unallocated 1 — — (1) — Elimination of Dual Credit (206) (175) (64) — (445) Total Company $ 4,142 $ 2,345 $ 1,590 $ (2) $ 8,075 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets | |
Goodwill | (Millions) Safety and Industrial Transportation and Electronics Health Care Consumer Total Company Balance as of December 31, 2020 $ 4,687 $ 1,858 $ 6,992 $ 265 $ 13,802 Translation and other (29) (14) (98) (7) (148) Balance as of March 31, 2021 $ 4,658 $ 1,844 $ 6,894 $ 258 $ 13,654 |
Acquired Intangible Assets | March 31, December 31, (Millions) 2021 2020 Customer related intangible assets $ 4,266 $ 4,280 Patents 517 537 Other technology-based intangible assets 2,113 2,114 Definite-lived tradenames 1,172 1,178 Other amortizable intangible assets 104 104 Total gross carrying amount $ 8,172 $ 8,213 Accumulated amortization — customer related (1,473) (1,422) Accumulated amortization — patents (495) (512) Accumulated amortization — other technology-based (687) (638) Accumulated amortization — definite-lived tradenames (397) (385) Accumulated amortization — other (78) (79) Total accumulated amortization $ (3,130) $ (3,036) Total finite-lived intangible assets — net $ 5,042 $ 5,177 Non-amortizable intangible assets (primarily tradenames) 655 658 Total intangible assets — net $ 5,697 $ 5,835 |
Schedule of amortization expense for acquired intangible assets | Amortization expense for the three months ended March 31, 2021 and 2020 follows: Three months ended March 31, (Millions) 2021 2020 Amortization expense $ 133 $ 134 |
Schedule of expected amortization expense for acquired amortizable intangible assets | Expected amortization expense for acquired amortizable intangible assets recorded as of March 31, 2021: Remainder of After (Millions) 2021 2022 2023 2024 2025 2026 2026 Amortization expense $ 395 $ 514 $ 488 $ 458 $ 428 $ 421 $ 2,338 |
Restructuring Actions and Exi_2
Restructuring Actions and Exit Activities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
2021 Restructuring Actions | Operational/Marketing Capability Restructuring | |
Restructuring Cost and Reserve | |
Schedule of restructuring charges by income statement line | (Millions) First Quarter 2021 Cost of sales $ 1 Selling, general and administrative expenses 9 Research, development and related expenses 4 Total operating income impact $ 14 |
Components of restructuring by business segment | First Quarter 2021 (Millions) Employee-Related Safety and Industrial $ 2 Transportation and Electronics 3 Health Care 1 Consumer 1 Corporate and Unallocated 7 Total Operating Expense $ 14 |
Accrued restructuring action balances | (Millions) Employee-Related Accrued restructuring action balances as of December 31, 2020 $ 101 Incremental expense incurred in the first quarter of 2021 $ 14 Cash payments (14) Accrued restructuring action balances as of March 31, 2021 $ 101 |
2020 Restructuring Actions | Drug delivery business | |
Restructuring Cost and Reserve | |
Accrued restructuring action balances | (Millions) Employee-Related Asset-Related and Other Total Accrued divestiture-related restructuring action balances as of December 31, 2020 $ 15 $ 9 $ 24 Cash payments (1) — (1) Adjustments (1) — (1) Accrued divestiture-related restructuring action balances as of March 31, 2021 $ 13 $ 9 $ 22 |
2020 Restructuring Actions | Other Restructuring | |
Restructuring Cost and Reserve | |
Accrued restructuring action balances | (Millions) Employee-Related Accrued restructuring action balances as of December 31, 2020 $ 24 Cash payments (4) Adjustments (9) Accrued restructuring action balances as of March 31, 2021 $ 11 |
Supplemental Income Statement_2
Supplemental Income Statement Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Supplemental Income Statement Information | |
Schedule of other expense (income) | Three months ended March 31, (Millions) 2021 2020 Interest expense $ 132 $ 123 Interest income (4) (10) Pension and postretirement net periodic benefit cost (benefit) (79) (38) Total $ 49 $ 75 |
Supplemental Equity and Compr_2
Supplemental Equity and Comprehensive Income Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Supplemental Equity and Comprehensive Income Information | |
Consolidated Statement of Changes in Equity | Three months ended March 31, 2021 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, 2020 $ 12,931 $ 6,171 $ 43,821 $ (29,404) $ (7,721) $ 64 Net income 1,627 1,624 3 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (222) (223) 1 Defined benefit pension and post-retirement plans adjustment 119 119 — Cash flow hedging instruments 58 58 — Total other comprehensive income (loss), net of tax (45) Dividends declared (858) (858) Stock-based compensation 121 121 Reacquired stock (243) (243) Issuances pursuant to stock option and benefit plans 295 (332) 627 Balance at March 31, 2021 $ 13,828 $ 6,292 $ 44,255 $ (29,020) $ (7,767) $ 68 Three months ended March 31, 2020 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, 2019 $ 10,126 $ 5,916 $ 42,130 $ (29,849) $ (8,134) $ 63 Net income 1,310 1,308 2 Other comprehensive income (loss), net of tax: Cumulative translation adjustment (444) (441) (3) Defined benefit pension and post-retirement plans adjustment 108 108 — Cash flow hedging instruments 47 47 — Total other comprehensive income (loss), net of tax (289) Dividends declared (847) (847) Stock-based compensation 117 117 Reacquired stock (356) (356) Issuances pursuant to stock option and benefit plans 153 (235) 388 Balance at March 31, 2020 $ 10,214 $ 6,033 $ 42,356 $ (29,817) $ (8,420) $ 62 |
Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M | Three months ended March 31, 2021 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, 2020, net of tax: $ (1,450) $ (6,098) $ (173) $ (7,721) Other comprehensive income (loss), before tax: Amounts before reclassifications (176) — 66 (110) Amounts reclassified out — 159 9 168 Total other comprehensive income (loss), before tax (176) 159 75 58 Tax effect (47) (40) (17) (104) Total other comprehensive income (loss), net of tax (223) 119 58 (46) Balance at March 31, 2021, net of tax: $ (1,673) $ (5,979) $ (115) $ (7,767) Three months ended March 31, 2020 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, 2019, net of tax: $ (1,899) $ (6,204) $ (31) $ (8,134) Other comprehensive income (loss), before tax: Amounts before reclassifications (439) — 77 (362) Amounts reclassified out — 150 (16) 134 Total other comprehensive income (loss), before tax (439) 150 61 (228) Tax effect (2) (42) (14) (58) Total other comprehensive income (loss), net of tax (441) 108 47 (286) Balance at March 31, 2020, net of tax: $ (2,340) $ (6,096) $ 16 $ (8,420) |
Reclassifications out of Accumulated Other Comprehensive Income | Amount Reclassified from Details about Accumulated Other Accumulated Other Comprehensive Income Comprehensive Income Components Three months ended March 31, Location on Income (Millions) 2021 2020 Statement Defined benefit pension and postretirement plans adjustments Gains (losses) associated with defined benefit pension and postretirement plans amortization Transition asset $ — $ (1) See Note 11 Prior service benefit 15 15 See Note 11 Net actuarial loss (173) (163) See Note 11 Curtailments/Settlements (1) (1) See Note 11 Total before tax (159) (150) Tax effect 40 42 Provision for income taxes Net of tax $ (119) $ (108) Cash flow hedging instruments gains (losses) Foreign currency forward/option contracts $ (7) $ 18 Cost of sales Interest rate contracts (2) (2) Interest expense Total before tax (9) 16 Tax effect 2 (4) Provision for income taxes Net of tax $ (7) $ 12 Total reclassifications for the period, net of tax $ (126) $ (96) |
Marketable Securities (Tables)
Marketable Securities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Marketable Securities. | |
Schedule of marketable securities | (Millions) March 31, 2021 December 31, 2020 Corporate debt securities $ 7 $ 7 Commercial paper 384 237 Certificates of deposit/time deposits 7 31 U.S. treasury securities 100 125 U.S. municipal securities 3 4 Current marketable securities $ 501 $ 404 U.S. municipal securities $ 31 $ 30 Non-current marketable securities $ 31 $ 30 Total marketable securities $ 532 $ 434 |
Schedule of marketable securities by contractual maturity | (Millions) March 31, 2021 Due in one year or less $ 501 Due after one year through five years 15 Due after five years through ten years 16 Total marketable securities $ 532 |
Long-Term Debt and Short-Term_2
Long-Term Debt and Short-Term Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Long-Term Debt and Short-Term Borrowings | |
Schedule of Maturities of Long-Term Debt | Remainder of After 2021 2022 2023 2024 2025 2026 2026 Total $ 763 $ 1,256 $ 1,945 $ 1,100 $ 1,791 $ 1,516 $ 9,798 $ 18,169 |
Pension and Postretirement Be_2
Pension and Postretirement Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Pension and Postretirement Benefit Plans | |
Components of net periodic benefit cost (benefit) | Three months ended March 31, Qualified and Non-qualified Pension Benefits Postretirement United States International Benefits (Millions) 2021 2020 2021 2020 2021 2020 Net periodic benefit cost (benefit) Operating expense Service cost $ 72 $ 66 $ 42 $ 38 $ 12 $ 11 Non-operating expense Interest cost $ 90 $ 124 $ 25 $ 31 $ 11 $ 16 Expected return on plan assets (264) (262) (81) (77) (19) (20) Amortization of transition asset — — — 1 — — Amortization of prior service benefit (6) (6) (1) (1) (8) (8) Amortization of net actuarial loss 132 123 27 29 14 11 Settlements, curtailments, special termination benefits and other — — — — 1 1 Total non-operating expense (benefit) (48) (21) (30) (17) (1) — Total net periodic benefit cost (benefit) $ 24 $ 45 $ 12 $ 21 $ 11 $ 11 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivatives | |
Gains (losses) on derivative instruments dedesignated as hedges | Pretax Gain (Loss) Recognized in Other Pretax Gain (Loss) Reclassified from Accumulated Comprehensive Income on Derivative Other Comprehensive Income into Income Three months ended March 31, Three months ended March 31, 2021 2020 2021 2020 (Millions) Amount Amount Location Amount Amount Foreign currency forward/option contracts $ 66 $ 79 Cost of sales $ (7) $ 18 Interest rate contracts — (2) Interest expense (2) (2) Total $ 66 $ 77 $ (9) $ 16 |
Gain (loss) on derivative instruments designated as fair value hedges | Cumulative Amount of Fair Value Hedging Carrying Value of the Adjustment Included in the Carrying Value (Millions) Hedged Liabilities of the Hedged Liabilities Location on the Consolidated Balance Sheet March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Short-term borrowings and current portion of long-term debt $ 357 $ 373 $ 4 $ 5 Long-term debt 225 225 5 6 Total $ 582 $ 598 $ 9 $ 11 |
Gain (loss) on derivative and non-derivative instruments designated as net investment hedges | Pretax Gain (Loss) Recognized Amount of Gain (Loss) Excluded as Cumulative Translation within from Effectiveness Testing Other Comprehensive Income Recognized in Income Three months ended March 31, Three months ended March 31, 2021 2020 2021 2020 (Millions) Amount Amount Location Amount Amount Foreign currency denominated debt $ 167 $ 15 Cost of sales $ — $ — Foreign currency forward contracts 2 1 Cost of sales (1) 5 Total $ 169 $ 16 $ (1) $ 5 |
Gain (loss) on derivative instruments not designated as hedging instruments | Gain (Loss) on Derivative Recognized in Income Three months ended March 31, 2021 2020 (Millions) Location Amount Amount Foreign currency forward/option contracts Cost of sales $ — $ 4 Foreign currency forward contracts Interest expense 22 (16) Total $ 22 $ (12) |
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 March 31, 2021 Three months ended March 31, 2020 (Millions) Cost of sales Other expense Cost of sales Other expense 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 $ 4,525 $ 49 $ 4,109 $ 75 The effects of cash flow and fair value 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 $ (7) $ — $ 18 $ — Interest rate contracts: Amount of gain or (loss) reclassified from accumulated other comprehensive income into income — (2) — (2) Gain or (loss) on fair value hedging relationships: Interest rate contracts: Hedged items $ — $ 2 $ — $ (2) Derivatives designated as hedging instruments — (2) — 2 |
Location and Fair Value of Derivative Instruments | Gross Assets Liabilities Notional Fair Fair March 31, 2021 (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ 1,656 Other current assets $ 36 Other current liabilities $ 38 Foreign currency forward/option contracts 685 Other assets 21 Other liabilities 10 Interest rate contracts 403 Other current assets 5 Other current liabilities — Total derivatives designated as hedging instruments $ 62 $ 48 Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ 3,487 Other current assets $ 22 Other current liabilities $ 15 Total derivatives not designated as hedging instruments $ 22 $ 15 Total derivative instruments $ 84 $ 63 Gross Assets Liabilities Notional Fair Fair December 31, 2020 (Millions) Amount Location Value Amount Location Value Amount Derivatives designated as hedging instruments Foreign currency forward/option contracts $ 1,630 Other current assets $ 14 Other current liabilities $ 67 Foreign currency forward/option contracts 669 Other assets 10 Other liabilities 25 Interest rate contracts 403 Other current assets 7 Other current liabilities — Total derivatives designated as hedging instruments $ 31 $ 92 Derivatives not designated as hedging instruments Foreign currency forward/option contracts $ 3,166 Other current assets $ 13 Other current liabilities $ 14 Total derivatives not designated as hedging instruments $ 13 $ 14 Total derivative instruments $ 44 $ 106 |
Offsetting Assets | 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 Cash Consolidated Recognized Collateral Net Amount of March 31, 2021 (Millions) Balance Sheet Derivative Liabilities Received Derivative Assets Derivatives subject to master netting agreements $ 84 $ 34 $ — $ 50 Derivatives not subject to master netting agreements — — Total $ 84 $ 50 December 31, 2020 (Millions) Derivatives subject to master netting agreements $ 44 $ 11 $ — $ 33 Derivatives not subject to master netting agreements — — Total $ 44 $ 33 |
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 Cash Net Amount of Consolidated Recognized Collateral Derivative March 31, 2021 (Millions) Balance Sheet Derivative Assets Pledged Liabilities Derivatives subject to master netting agreements $ 63 $ 34 $ — $ 29 Derivatives not subject to master netting agreements — — Total $ 63 $ 29 December 31, 2020 (Millions) Derivatives subject to master netting agreements $ 106 $ 11 $ — $ 95 Derivatives not subject to master netting agreements — — Total $ 106 $ 95 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Measurements | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | Fair Value Measurements Description Fair Value at Using Inputs Considered as (Millions) March 31, 2021 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: Corporate debt securities $ 7 $ — $ 7 $ — Commercial paper 384 — 384 — Certificates of deposit/time deposits 7 — 7 — U.S. treasury securities 100 100 — — U.S. municipal securities 34 — — 34 Derivative instruments — assets: Foreign currency forward/option contracts 79 — 79 — Interest rate contracts 5 — 5 — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts 63 — 63 — Fair Value Measurements Description Fair Value at Using Inputs Considered as (Millions) December 31, 2020 Level 1 Level 2 Level 3 Assets: Available-for-sale: Marketable securities: Corporate debt securities $ 7 $ — $ 7 $ — Commercial paper 237 — 237 — Certificates of deposit/time deposits 31 — 31 — U.S. treasury securities 125 125 — — U.S. municipal securities 34 — — 34 Derivative instruments — assets: Foreign currency forward/option contracts 37 — 37 — Interest rate contracts 7 — 7 — Liabilities: Derivative instruments — liabilities: Foreign currency forward/option contracts 106 — 106 — |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | Three months ended Marketable securities — certain U.S. municipal securities only March 31, (Millions) 2021 2020 Beginning balance $ 34 $ 46 Total gains or losses: Included in earnings — — Included in other comprehensive income — — Purchases and issuances — 10 Sales and settlements — (19) Transfers in and/or out of level 3 — — Ending balance $ 34 $ 37 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 | March 31, 2021 December 31, 2020 Carrying Fair Carrying Fair (Millions) Value Value Value Value Long-term debt, excluding current portion $ 16,819 $ 18,277 $ 17,989 $ 20,496 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation Expense | Stock-Based Compensation Expense Three months ended March 31, (Millions) 2021 2020 Cost of sales $ 22 $ 22 Selling, general and administrative expenses 84 73 Research, development and related expenses 25 25 Stock-based compensation expenses $ 131 $ 120 Income tax benefits (51) (39) Stock-based compensation expenses (benefits), net of tax $ 80 $ 81 |
Stock Option Activity | Stock Option Program The following table summarizes stock option activity during the three months ended March 31, 2021: Weighted Average Weighted Remaining Aggregate Number of Average Contractual Intrinsic Value (Options in thousands) Options Exercise Price Life (months) (millions) Under option — January 1 35,401 $ 156.23 Granted 3,612 175.04 Exercised (2,323) 104.16 Forfeited (104) 174.71 March 31 36,586 $ 161.34 68 $ 1,299 Options exercisable March 31 28,819 $ 158.58 57 $ 1,126 |
Stock Option Assumptions | Stock Option Assumptions Annual 2021 Exercise price $ 175.04 Risk-free interest rate 0.8 % Dividend yield 2.8 % Expected volatility 22.6 % Expected life (months) 83 Black-Scholes fair value $ 25.33 |
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 three months ended March 31, 2021: Weighted Average Number of Grant Date (Shares in thousands) Shares Fair Value Nonvested balance — As of January 1 1,722 $ 189.78 Granted 721 175.09 Vested (433) 232.62 Forfeited (33) 173.54 As of March 31 1,977 $ 175.31 |
Performance Shares Activity | The following table summarizes performance share activity during the three months ended March 31, 2021: Weighted Average Number of Grant Date (Shares in thousands) Shares Fair Value Undistributed balance — As of January 1 423 $ 188.61 Granted 163 176.41 Distributed (115) 228.80 Performance change 17 178.43 Forfeited (4) 172.92 As of March 31 484 $ 174.75 |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Segments | |
Business Segment Information | Business Segment Information Three months ended (Millions) March 31, Net Sales 2021 2020 Safety and Industrial $ 3,327 $ 2,927 Transportation and Electronics 2,531 2,239 Health Care 2,248 2,104 Consumer 1,373 1,250 Corporate and Unallocated (2) — Elimination of Dual Credit (626) (445) Total Company $ 8,851 $ 8,075 Operating Performance Safety and Industrial $ 811 $ 694 Transportation and Electronics 591 464 Health Care 509 452 Consumer 289 265 Elimination of Dual Credit (159) (113) Total business segment operating income $ 2,041 $ 1,762 Corporate and Unallocated Special items: Significant litigation-related (charges)/benefits — (17) Gain/(loss) on sale of businesses — 2 Other corporate expense - net (47) (84) Total Corporate and Unallocated (47) (99) Total Company operating income $ 1,994 $ 1,663 Other expense/(income), net $ 49 $ 75 Income before income taxes $ 1,945 $ 1,588 |
Significant Accounting Polici_4
Significant Accounting Policies - Consolidated Statement of Income as Adjusted (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other expense (income), net | $ 49 | $ 75 |
Income before income taxes | 1,945 | 1,588 |
Provision for income taxes | 319 | 278 |
Income of consolidated group | 1,626 | 1,310 |
Net income including noncontrolling interest | 1,627 | 1,310 |
Net income attributable to 3M | $ 1,624 | $ 1,308 |
Earnings per share attributable to 3M common shareholders - basic (in dollars per share) | $ 2.80 | $ 2.27 |
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share) | $ 2.77 | $ 2.25 |
Under Prior Method | ||
Other expense (income), net | $ 96 | |
Income before income taxes | 1,567 | |
Provision for income taxes | 273 | |
Income of consolidated group | 1,294 | |
Net income including noncontrolling interest | 1,294 | |
Net income attributable to 3M | $ 1,292 | |
Earnings per share attributable to 3M common shareholders - basic (in dollars per share) | $ 2.24 | |
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share) | $ 2.22 |
Significant Accounting Polici_5
Significant Accounting Policies - Consolidated Statement of Comprehensive Income as Adjusted (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Net income including noncontrolling interest | $ 1,627 | $ 1,310 |
Other comprehensive income (loss), net of tax: | ||
Defined benefit pension and postretirement plans adjustment | 119 | 108 |
Total other comprehensive income (loss), net of tax | (45) | (289) |
Comprehensive income (loss) including noncontrolling interest | 1,582 | 1,021 |
Comprehensive income (loss) attributable to 3M | $ 1,578 | 1,022 |
Under Prior Method | ||
Net income including noncontrolling interest | 1,294 | |
Other comprehensive income (loss), net of tax: | ||
Defined benefit pension and postretirement plans adjustment | 119 | |
Total other comprehensive income (loss), net of tax | (278) | |
Comprehensive income (loss) including noncontrolling interest | 1,016 | |
Comprehensive income (loss) attributable to 3M | $ 1,017 |
Significant Accounting Polici_6
Significant Accounting Policies - Consolidated Balance Sheet as Adjusted (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
3M Company shareholders' equity: | |||
Retained earnings | $ 44,255 | $ 43,821 | |
Accumulated other comprehensive income (loss) | $ (7,767) | (7,721) | |
Under Prior Method | |||
3M Company shareholders' equity: | |||
Retained earnings | 43,761 | ||
Accumulated other comprehensive income (loss) | $ (7,661) | ||
Cumulative Effect, Period of Adoption, Adjustment | |||
3M Company shareholders' equity: | |||
Retained earnings | $ (5) | ||
Accumulated other comprehensive income (loss) | $ (5) |
Significant Accounting Polici_7
Significant Accounting Policies - Consolidated Statement of Cash Flow as Adjusted (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net income including noncontrolling interest | $ 1,627 | $ 1,310 |
Company pension and postretirement expense | 47 | 77 |
Other - net | $ (234) | (452) |
Under Prior Method | ||
Cash Flows from Operating Activities | ||
Net income including noncontrolling interest | 1,294 | |
Company pension and postretirement expense | 98 | |
Other - net | $ (457) |
Significant Accounting Polici_8
Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings per share | ||
Options outstanding not included in computation of diluted earnings per share (in shares) | 8.7 | 19.2 |
Numerator: | ||
Net income attributable to 3M | $ 1,624 | $ 1,308 |
Denominator: | ||
Denominator for weighted average 3M common shares outstanding - basic (in shares) | 580.5 | 576.8 |
Dilution associated with the Company's stock-based compensation plans (in shares) | 5.8 | 4.7 |
Denominator for weighted average 3M common shares outstanding - diluted (in shares) | 586.3 | 581.5 |
Earnings per share attributable to 3M common shareholders - basic (in dollars per share) | $ 2.80 | $ 2.27 |
Earnings per share attributable to 3M common shareholders - diluted (in dollars per share) | $ 2.77 | $ 2.25 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Contract Balance | |||
Software license contracts term | 1 year | ||
Deferred revenue | $ 482 | $ 498 | |
Deferred income recognized as revenue | 180 | $ 160 | |
Operating Lease Revenue | $ 140 | $ 142 |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue | ||
Net Sales | $ 8,851 | $ 8,075 |
Corporate and Unallocated | ||
Disaggregation of Revenue | ||
Net Sales | (2) | |
Elimination of Dual Credit | ||
Disaggregation of Revenue | ||
Net Sales | (626) | (445) |
Americas | ||
Disaggregation of Revenue | ||
Net Sales | 4,328 | 4,142 |
Americas | Corporate and Unallocated | ||
Disaggregation of Revenue | ||
Net Sales | (1) | 1 |
Americas | Elimination of Dual Credit | ||
Disaggregation of Revenue | ||
Net Sales | (278) | (206) |
Asia Pacific | ||
Disaggregation of Revenue | ||
Net Sales | 2,769 | 2,345 |
Asia Pacific | Elimination of Dual Credit | ||
Disaggregation of Revenue | ||
Net Sales | (230) | (175) |
Europe, Middle East and Africa | ||
Disaggregation of Revenue | ||
Net Sales | 1,755 | 1,590 |
Europe, Middle East and Africa | Elimination of Dual Credit | ||
Disaggregation of Revenue | ||
Net Sales | (118) | (64) |
Other Unallocated | ||
Disaggregation of Revenue | ||
Net Sales | (1) | (2) |
Other Unallocated | Corporate and Unallocated | ||
Disaggregation of Revenue | ||
Net Sales | (1) | (1) |
United States | ||
Disaggregation of Revenue | ||
Net Sales | 3,600 | 3,400 |
Safety and Industrial | ||
Disaggregation of Revenue | ||
Net Sales | 3,327 | 2,927 |
Safety and Industrial | Americas | ||
Disaggregation of Revenue | ||
Net Sales | 1,697 | 1,517 |
Safety and Industrial | Asia Pacific | ||
Disaggregation of Revenue | ||
Net Sales | 823 | 712 |
Safety and Industrial | Europe, Middle East and Africa | ||
Disaggregation of Revenue | ||
Net Sales | 807 | 698 |
Safety and Industrial | Abrasives | ||
Disaggregation of Revenue | ||
Net Sales | 352 | 330 |
Safety and Industrial | Automotive Aftermarket | ||
Disaggregation of Revenue | ||
Net Sales | 312 | 284 |
Safety and Industrial | Closure and Masking Systems | ||
Disaggregation of Revenue | ||
Net Sales | 243 | 268 |
Safety and Industrial | Electrical Markets | ||
Disaggregation of Revenue | ||
Net Sales | 307 | 288 |
Safety and Industrial | Industrial Adhesives and Tapes | ||
Disaggregation of Revenue | ||
Net Sales | 768 | 671 |
Safety and Industrial | Personal Safety | ||
Disaggregation of Revenue | ||
Net Sales | 1,237 | 989 |
Safety and Industrial | Roofing Granules | ||
Disaggregation of Revenue | ||
Net Sales | 108 | 95 |
Safety and Industrial | Other Safety and Industrial | ||
Disaggregation of Revenue | ||
Net Sales | 2 | |
Transportation and Electronics | ||
Disaggregation of Revenue | ||
Net Sales | 2,531 | 2,239 |
Transportation and Electronics | Americas | ||
Disaggregation of Revenue | ||
Net Sales | 650 | 675 |
Transportation and Electronics | Asia Pacific | ||
Disaggregation of Revenue | ||
Net Sales | 1,490 | 1,202 |
Transportation and Electronics | Europe, Middle East and Africa | ||
Disaggregation of Revenue | ||
Net Sales | 391 | 362 |
Transportation and Electronics | Advanced Materials | ||
Disaggregation of Revenue | ||
Net Sales | 316 | 288 |
Transportation and Electronics | Automotive and Aerospace | ||
Disaggregation of Revenue | ||
Net Sales | 516 | 448 |
Transportation and Electronics | Commercial Solutions | ||
Disaggregation of Revenue | ||
Net Sales | 438 | 430 |
Transportation and Electronics | Electronics | ||
Disaggregation of Revenue | ||
Net Sales | 1,042 | 863 |
Transportation and Electronics | Transportation Safety | ||
Disaggregation of Revenue | ||
Net Sales | 218 | 211 |
Transportation and Electronics | Other Transportation and Electronics | ||
Disaggregation of Revenue | ||
Net Sales | 1 | (1) |
Health Care | ||
Disaggregation of Revenue | ||
Net Sales | 2,248 | 2,104 |
Health Care | Americas | ||
Disaggregation of Revenue | ||
Net Sales | 1,311 | 1,281 |
Health Care | Asia Pacific | ||
Disaggregation of Revenue | ||
Net Sales | 408 | 356 |
Health Care | Europe, Middle East and Africa | ||
Disaggregation of Revenue | ||
Net Sales | 529 | 467 |
Health Care | Drug Delivery | ||
Disaggregation of Revenue | ||
Net Sales | 105 | |
Health Care | Food Safety | ||
Disaggregation of Revenue | ||
Net Sales | 88 | 91 |
Health Care | Health Information Systems | ||
Disaggregation of Revenue | ||
Net Sales | 289 | 277 |
Health Care | Medical Solutions | ||
Disaggregation of Revenue | ||
Net Sales | 1,267 | 1,153 |
Health Care | Oral Care | ||
Disaggregation of Revenue | ||
Net Sales | 363 | 277 |
Health Care | Separation and Purification Sciences | ||
Disaggregation of Revenue | ||
Net Sales | 241 | 202 |
Health Care | Other Health Care | ||
Disaggregation of Revenue | ||
Net Sales | (1) | |
Consumer | ||
Disaggregation of Revenue | ||
Net Sales | 1,373 | 1,250 |
Consumer | Americas | ||
Disaggregation of Revenue | ||
Net Sales | 949 | 874 |
Consumer | Asia Pacific | ||
Disaggregation of Revenue | ||
Net Sales | 278 | 250 |
Consumer | Europe, Middle East and Africa | ||
Disaggregation of Revenue | ||
Net Sales | 146 | 127 |
Consumer | Other Unallocated | ||
Disaggregation of Revenue | ||
Net Sales | (1) | |
Consumer | Consumer Health and Safety | ||
Disaggregation of Revenue | ||
Net Sales | 150 | 172 |
Consumer | Home Care | ||
Disaggregation of Revenue | ||
Net Sales | 279 | 271 |
Consumer | Home Improvement | ||
Disaggregation of Revenue | ||
Net Sales | 623 | 503 |
Consumer | Stationery and Office | ||
Disaggregation of Revenue | ||
Net Sales | 285 | 268 |
Consumer | Other Consumer | ||
Disaggregation of Revenue | ||
Net Sales | $ 36 | $ 36 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Acquisitions (Details) - item | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Supplemental information: | ||
Number of acquisitions | 0 | 0 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Divestitures (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2021item | Mar. 31, 2020USD ($) | |
Acquisitions and Divestitures | ||
Number of businesses sold | item | 0 | |
Annual sales of divested business | $ | $ 25 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill balance by business segment (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill Information | |
Goodwill acquired during period | $ 0 |
Goodwill | |
Balance at the beginning of the period | 13,802,000,000 |
Translation and other | (148,000,000) |
Balance at the end of the period | 13,654,000,000 |
Safety and Industrial | |
Goodwill | |
Balance at the beginning of the period | 4,687,000,000 |
Translation and other | (29,000,000) |
Balance at the end of the period | 4,658,000,000 |
Transportation and Electronics | |
Goodwill | |
Balance at the beginning of the period | 1,858,000,000 |
Translation and other | (14,000,000) |
Balance at the end of the period | 1,844,000,000 |
Health Care | |
Goodwill | |
Balance at the beginning of the period | 6,992,000,000 |
Translation and other | (98,000,000) |
Balance at the end of the period | 6,894,000,000 |
Consumer | |
Goodwill | |
Balance at the beginning of the period | 265,000,000 |
Translation and other | (7,000,000) |
Balance at the end of the period | $ 258,000,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Acquired Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Acquired intangible assets disclosures | ||
Total gross carrying amount | $ 8,172 | $ 8,213 |
Total accumulated amortization | (3,130) | (3,036) |
Total finite-lived intangible assets - net | 5,042 | 5,177 |
Non-amortizable intangible assets (primarily tradenames) | 655 | 658 |
Total intangible assets - net | $ 5,697 | 5,835 |
Minimum | ||
Acquired intangible assets disclosures | ||
Indefinite lived tradenames years in existence | 60 years | |
Customer related intangible assets | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | $ 4,266 | 4,280 |
Total accumulated amortization | (1,473) | (1,422) |
Patents | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 517 | 537 |
Total accumulated amortization | (495) | (512) |
Other technology-based intangible assets | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 2,113 | 2,114 |
Total accumulated amortization | (687) | (638) |
Definite-lived tradenames | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 1,172 | 1,178 |
Total accumulated amortization | (397) | (385) |
Other amortizable intangible assets | ||
Acquired intangible assets disclosures | ||
Total gross carrying amount | 104 | 104 |
Total accumulated amortization | $ (78) | $ (79) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedules for Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Goodwill and Intangible Assets | ||
Amortization expense for acquired intangible assets | $ 133 | $ 134 |
Expected amortization expense for acquired intangible assets recorded as of balance sheet date | ||
Remainder of 2021 | 395 | |
2022 | 514 | |
2023 | 488 | |
2024 | 458 | |
2025 | 428 | |
2026 | 421 | |
After 2026 | $ 2,338 |
Restructuring Actions (Details)
Restructuring Actions (Details) $ in Millions | 3 Months Ended | 15 Months Ended | ||
Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($)person | Jun. 30, 2020USD ($)person | Dec. 31, 2021USD ($)person | |
Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring and related cost, number of positions affected | person | 2,900 | |||
Operational/Marketing Capability Restructuring | Minimum | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 250 | |||
Operational/Marketing Capability Restructuring | Maximum | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 300 | |||
2021 Restructuring Actions | Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 14 | |||
2021 Restructuring Actions | Employee-Related | Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 14 | |||
2021 Restructuring Actions | Cost of sales | Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 1 | |||
2021 Restructuring Actions | Selling, general and administrative expenses | Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 9 | |||
2021 Restructuring Actions | Research, development and related expenses | Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 4 | |||
2020 Restructuring Actions | Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring and related cost, number of positions affected | person | 2,100 | |||
Restructuring charges | $ 137 | |||
2020 Restructuring Actions | Drug delivery business | ||||
Restructuring Cost and Reserve | ||||
Restructuring and related cost, number of positions affected | person | 1,300 | |||
Restructuring charges | $ 55 | |||
2020 Restructuring Actions | Other Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring and related cost, number of positions affected | person | 400 | |||
Restructuring charges | $ 58 | |||
Corporate and Unallocated | 2021 Restructuring Actions | Employee-Related | Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 7 | |||
Safety and Industrial | 2021 Restructuring Actions | Employee-Related | Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 2 | |||
Transportation and Electronics | 2021 Restructuring Actions | Employee-Related | Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 3 | |||
Health Care | 2021 Restructuring Actions | Employee-Related | Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | 1 | |||
Consumer | 2021 Restructuring Actions | Employee-Related | Operational/Marketing Capability Restructuring | ||||
Restructuring Cost and Reserve | ||||
Restructuring charges | $ 1 |
Restructuring Actions - Roll Fo
Restructuring Actions - Roll Forward (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Employee-Related | 2020 Restructuring Actions | Other Restructuring | |
Restructuring Reserve Roll Forward | |
Restructuring actions balances, Beginning Balance | $ 24 |
Cash Payments | (4) |
Restructuring Reserve, Accrual Adjustment | (9) |
Restructuring actions balances, Ending Balance | 11 |
Operational/Marketing Capability Restructuring | Employee-Related | 2021 Restructuring Actions | |
Restructuring Reserve Roll Forward | |
Restructuring actions balances, Beginning Balance | 101 |
Incremental expense incurred | 14 |
Cash Payments | (14) |
Restructuring actions balances, Ending Balance | 101 |
Drug delivery business | 2020 Restructuring Actions | |
Restructuring Reserve Roll Forward | |
Restructuring actions balances, Beginning Balance | 24 |
Cash Payments | (1) |
Restructuring Reserve, Accrual Adjustment | (1) |
Restructuring actions balances, Ending Balance | 22 |
Drug delivery business | Employee-Related | 2020 Restructuring Actions | |
Restructuring Reserve Roll Forward | |
Restructuring actions balances, Beginning Balance | 15 |
Cash Payments | (1) |
Restructuring Reserve, Accrual Adjustment | (1) |
Restructuring actions balances, Ending Balance | 13 |
Drug delivery business | Asset-Related and Other | 2020 Restructuring Actions | |
Restructuring Reserve Roll Forward | |
Restructuring actions balances, Beginning Balance | 9 |
Restructuring actions balances, Ending Balance | $ 9 |
Supplemental Income Statement_3
Supplemental Income Statement Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Interest expense | $ 132 | $ 123 |
Interest income | (4) | (10) |
Pension and postretirement net periodic benefit cost (benefit) | (79) | (38) |
Total | 49 | $ 75 |
Fixed rate medium term note due 2022 | ||
Loss on extinguishment of debt | $ 11 |
Supplemental Equity and Compr_3
Supplemental Equity and Comprehensive Income Information - Dividends (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Supplemental Equity and Comprehensive Income Information | ||
Dividends declared in current period (in dollars per share) | $ 1.48 | $ 1.47 |
Supplemental Equity and Compr_4
Supplemental Equity and Comprehensive Income Information - SE Rf (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Increase (decrease) in equity | ||
Balance at the beginning of the period | $ 12,931 | $ 10,126 |
Net income | 1,627 | 1,310 |
Other comprehensive income (loss), net of tax: | ||
Cumulative translation adjustment | (222) | (444) |
Defined benefit pension and postretirement plans adjustment | 119 | 108 |
Cash flow hedging instruments | 58 | 47 |
Total other comprehensive income (loss), net of tax | (45) | (289) |
Dividends declared | (858) | (847) |
Stock-based compensation | 121 | 117 |
Reacquired stock | (243) | (356) |
Issuances pursuant to stock option and benefit plans | 295 | 153 |
Balance at the end of the period | 13,828 | 10,214 |
Common Stock and Additional Paid-in Capital | ||
Increase (decrease) in equity | ||
Balance at the beginning of the period | 6,171 | 5,916 |
Other comprehensive income (loss), net of tax: | ||
Stock-based compensation | 121 | 117 |
Balance at the end of the period | 6,292 | 6,033 |
Retained Earnings | ||
Increase (decrease) in equity | ||
Balance at the beginning of the period | 43,821 | 42,130 |
Net income | 1,624 | 1,308 |
Other comprehensive income (loss), net of tax: | ||
Dividends declared | (858) | (847) |
Issuances pursuant to stock option and benefit plans | (332) | (235) |
Balance at the end of the period | 44,255 | 42,356 |
Treasury Stock | ||
Increase (decrease) in equity | ||
Balance at the beginning of the period | (29,404) | (29,849) |
Other comprehensive income (loss), net of tax: | ||
Reacquired stock | (243) | (356) |
Issuances pursuant to stock option and benefit plans | 627 | 388 |
Balance at the end of the period | (29,020) | (29,817) |
Total Accumulated Other Comprehensive Income (Loss) | ||
Increase (decrease) in equity | ||
Balance at the beginning of the period | (7,721) | (8,134) |
Other comprehensive income (loss), net of tax: | ||
Cumulative translation adjustment | (223) | (441) |
Defined benefit pension and postretirement plans adjustment | 119 | 108 |
Cash flow hedging instruments | 58 | 47 |
Balance at the end of the period | (7,767) | (8,420) |
Noncontrolling Interest | ||
Increase (decrease) in equity | ||
Balance at the beginning of the period | 64 | 63 |
Net income | 3 | 2 |
Other comprehensive income (loss), net of tax: | ||
Cumulative translation adjustment | 1 | (3) |
Balance at the end of the period | $ 68 | $ 62 |
Supplemental Equity and Compr_5
Supplemental Equity and Comprehensive Income Information - AOCI rf (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
AOCI Attributable to 3M, Net of Tax Roll Forward | ||
Balance at the beginning of the period | $ 12,931 | $ 10,126 |
Other comprehensive income (loss), before tax: | ||
Balance at the end of the period | 13,828 | 10,214 |
Cumulative Translation Adjustment | ||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||
Balance at the beginning of the period | (1,450) | (1,899) |
Other comprehensive income (loss), before tax: | ||
Amounts before reclassifications | (176) | (439) |
Total other comprehensive income (loss), before tax | (176) | (439) |
Tax effect | (47) | (2) |
Total other comprehensive income (loss), net of tax | (223) | (441) |
Balance at the end of the period | (1,673) | (2,340) |
Defined Pension and Postretirement Plans Adjustment | ||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||
Balance at the beginning of the period | (6,098) | (6,204) |
Other comprehensive income (loss), before tax: | ||
Amounts reclassified out | 159 | 150 |
Total other comprehensive income (loss), before tax | 159 | 150 |
Tax effect | (40) | (42) |
Total other comprehensive income (loss), net of tax | 119 | 108 |
Balance at the end of the period | (5,979) | (6,096) |
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | ||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||
Balance at the beginning of the period | (173) | (31) |
Other comprehensive income (loss), before tax: | ||
Amounts before reclassifications | 66 | 77 |
Amounts reclassified out | 9 | (16) |
Total other comprehensive income (loss), before tax | 75 | 61 |
Tax effect | (17) | (14) |
Total other comprehensive income (loss), net of tax | 58 | 47 |
Balance at the end of the period | (115) | 16 |
Retained Earnings | ||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||
Balance at the beginning of the period | 43,821 | 42,130 |
Other comprehensive income (loss), before tax: | ||
Balance at the end of the period | 44,255 | 42,356 |
Total Accumulated Other Comprehensive Income (Loss) | ||
AOCI Attributable to 3M, Net of Tax Roll Forward | ||
Balance at the beginning of the period | (7,721) | (8,134) |
Other comprehensive income (loss), before tax: | ||
Amounts before reclassifications | (110) | (362) |
Amounts reclassified out | 168 | 134 |
Total other comprehensive income (loss), before tax | 58 | (228) |
Tax effect | (104) | (58) |
Total other comprehensive income (loss), net of tax | (46) | (286) |
Balance at the end of the period | $ (7,767) | $ (8,420) |
Supplemental Equity and Compr_6
Supplemental Equity and Comprehensive Income Information - Reclass AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Net of tax | $ (126) | $ (96) |
Defined Pension and Postretirement Plans Adjustment | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Transition asset | (1) | |
Prior service benefit | 15 | 15 |
Net actuarial loss | (173) | (163) |
Curtailments/Settlements | (1) | (1) |
Total before tax | (159) | (150) |
Tax effect | 40 | 42 |
Net of tax | (119) | (108) |
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Total before tax | (9) | 16 |
Tax effect | 2 | (4) |
Net of tax | (7) | 12 |
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | Foreign currency exchange contracts | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Cost of sales | (7) | 18 |
Cash Flow Hedging Instruments, Unrealized Gain (Loss) | Interest rate contracts | ||
Amount Reclassified from Accumulated Other Comprehensive Income | ||
Interest expense | $ (2) | $ (2) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income Taxes. | |||
Unrecognized tax benefits that would affect the effective tax rate | $ 1,094,000 | $ 1,145,000 | |
Deferred tax assets valuation allowance | $ 143,000 | $ 135,000 | |
Effective tax rate (as a percent) | 16.40% | 17.50% | |
Decrease in effective income tax rate from prior reporting period to current reporting period (as a percent) | (1.10%) |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Marketable Securities | ||
Current marketable securities | $ 501 | $ 404 |
Non-current marketable securities | 31 | 30 |
Total marketable securities | 532 | 434 |
Corporate debt securities | ||
Marketable Securities | ||
Current marketable securities | 7 | 7 |
Commercial paper | ||
Marketable Securities | ||
Current marketable securities | 384 | 237 |
Certificates of deposit/time deposits | ||
Marketable Securities | ||
Current marketable securities | 7 | 31 |
U.S. treasury securities | ||
Marketable Securities | ||
Current marketable securities | 100 | 125 |
U.S. municipal securities | ||
Marketable Securities | ||
Current marketable securities | 3 | 4 |
Non-current marketable securities | $ 31 | $ 30 |
Marketable Securities - Contrac
Marketable Securities - Contractual maturity (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Marketable securities by contractual maturity | ||
Due in one year or less | $ 501 | |
Due after one year through five years | 15 | |
Due after five years through ten years | 16 | |
Total marketable securities | $ 532 | $ 434 |
Long-Term Debt and Short-Term_3
Long-Term Debt and Short-Term Borrowings - Long-Term Debt Maturities and Extinguishments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt instrument | ||
Commercial paper outstanding | $ 0 | $ 0 |
Fixed rate medium term note due 2022 | ||
Debt instrument | ||
Interest rate, stated percentage (as a percent) | 2.75% | |
Loss on early debt extinguishment | $ 11,000,000 | |
Debt redeemed | $ 450,000,000 |
Long-Term Debt and Short-Term_4
Long-Term Debt and Short-Term Borrowings - Future Maturities of Long-term Debt (Details) $ in Millions | Mar. 31, 2021USD ($) |
Maturities of long-term debt | |
Remainder of 2021 | $ 763 |
2022 | 1,256 |
2023 | 1,945 |
2024 | 1,100 |
2025 | 1,791 |
2026 | 1,516 |
After 2026 | 9,798 |
Total long-term debt | $ 18,169 |
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 | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Net periodic benefit cost (benefit) | ||
Net periodic benefit cost (benefit) | $ (79) | $ (38) |
Funded | Postretirement Benefits | ||
Net periodic benefit cost (benefit) | ||
Service cost | 12 | 11 |
Interest cost | 11 | 16 |
Expected return on plan assets | (19) | (20) |
Amortization of prior service benefit | (8) | (8) |
Amortization of net actuarial loss | 14 | 11 |
Settlements, curtailments, special terminations and other | 1 | 1 |
Total non-operating expense (benefit) | (1) | |
Net periodic benefit cost (benefit) | 11 | 11 |
Funded | United States | Qualified and Non-qualified Pension Benefits | ||
Net periodic benefit cost (benefit) | ||
Service cost | 72 | 66 |
Interest cost | 90 | 124 |
Expected return on plan assets | (264) | (262) |
Amortization of prior service benefit | (6) | (6) |
Amortization of net actuarial loss | 132 | 123 |
Total non-operating expense (benefit) | (48) | (21) |
Net periodic benefit cost (benefit) | 24 | 45 |
Funded | International | Qualified and Non-qualified Pension Benefits | ||
Net periodic benefit cost (benefit) | ||
Service cost | 42 | 38 |
Interest cost | 25 | 31 |
Expected return on plan assets | (81) | (77) |
Amortization of transition asset | 1 | |
Amortization of prior service benefit | (1) | (1) |
Amortization of net actuarial loss | 27 | 29 |
Total non-operating expense (benefit) | (30) | (17) |
Net periodic benefit cost (benefit) | $ 12 | $ 21 |
Pension and Postretirement Be_4
Pension and Postretirement Benefit Plans - Narrative (Details) - Funded - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2021 | |
Qualified and Non-qualified Pension Benefits | ||
Benefit Plan Information | ||
Company contributions year to date | $ 46 | |
Postretirement Benefits | ||
Benefit Plan Information | ||
Company contributions year to date | $ 1 | |
Forecast | Qualified and Non-qualified Pension Benefits | Maximum | ||
Benefit Plan Information | ||
Estimated pension and postretirement employer contributions in current fiscal year | $ 200 |
Derivatives - Cash Flow Hedges
Derivatives - Cash Flow Hedges (Details) - Cash flow hedge $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Derivatives in Cash Flow Hedging Relationships | |
Accumulated other comprehensive income (loss), unrealized gain (loss) on cash flow hedges | $ (115) |
Foreign currency forward/options contracts | |
Derivatives in Cash Flow Hedging Relationships | |
Maximum length of time hedged in interest rate cash flow hedge | 36 months |
Interest rate swap and treasury lock in aggregate | |
Derivatives in Cash Flow Hedging Relationships | |
Accumulated other comprehensive income (loss), unrealized gain (loss) on cash flow hedges | $ (106) |
Foreign currency exchange contracts | |
Derivatives in Cash Flow Hedging Relationships | |
After-tax net unrealized gain (loss) anticipated to be reclassified from AOCI to the income statement within next twelve months | 19 |
After-tax net unrealized gain (loss) anticipated to be reclassified from AOCI to the income statement over remaining fiscal year | 22 |
After-tax net unrealized gain (loss) anticipated to be reclassifed from AOCI to the income statement over next fiscal year | 2 |
After-tax net unrealized gain (loss) anticipated to be reclassified from AOCI to the income statement after the next fiscal year | $ 91 |
Derivatives - Cash Flow Hedge_2
Derivatives - Cash Flow Hedges - Gain (Loss) in OCI or Reclassified from AOCI (Details) - Cash flow hedge - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivatives in Cash Flow Hedging Relationships | ||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Derivative | $ 66 | $ 77 |
Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | (9) | 16 |
Foreign currency exchange contracts | ||
Derivatives in Cash Flow Hedging Relationships | ||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Derivative | 66 | 79 |
Foreign currency exchange contracts | Cost of sales | ||
Derivatives in Cash Flow Hedging Relationships | ||
Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | (7) | 18 |
Interest rate contracts | ||
Derivatives in Cash Flow Hedging Relationships | ||
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Derivative | (2) | |
Interest rate contracts | Interest expense | ||
Derivatives in Cash Flow Hedging Relationships | ||
Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | $ (2) | $ (2) |
Derivatives - Cumulative Basis
Derivatives - Cumulative Basis Adjustment for Fair Value Hedges (Details) - Fair value hedges - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Derivatives | ||
Hedged Liability, Fair Value Hedge | $ 582 | $ 598 |
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease) | 9 | 11 |
Short-term borrowings and current portion of long-term debt | ||
Derivatives | ||
Hedged Liability, Fair Value Hedge | 357 | 373 |
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease) | 4 | 5 |
Long-term debt | ||
Derivatives | ||
Hedged Liability, Fair Value Hedge | 225 | 225 |
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease) | $ 5 | $ 6 |
Derivatives - Net Investment He
Derivatives - Net Investment Hedges (Details) - Net Investment Hedges € in Millions | 3 Months Ended | ||
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2021EUR (€) | |
Net investment hedges | |||
Effective portion of net investment hedge reclassified out of other comprehensive income into income | $ 0 | $ 0 | |
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument | 169,000,000 | 16,000,000 | |
Cost of sales | |||
Net investment hedges | |||
Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Income | (1,000,000) | 5,000,000 | |
Foreign currency forward/options contracts | |||
Net investment hedges | |||
Derivative notional amount | € | € 50 | ||
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument | 2,000,000 | 1,000,000 | |
Foreign currency forward/options contracts | Cost of sales | |||
Net investment hedges | |||
Amount of Gain (Loss) Excluded from Effectiveness Testing Recognized in Income | (1,000,000) | 5,000,000 | |
Foreign currency denominated debt | |||
Net investment hedges | |||
Face amount of debt designated as a net investment hedge | € | € 3,500 | ||
Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income on Effective Portion of Instrument | $ 167,000,000 | $ 15,000,000 |
Derivatives - Not Designated (D
Derivatives - Not Designated (Details) - Derivatives not designated as hedging instruments - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivatives not designated as hedging instruments | ||
Gain (Loss) on Derivative Recognized in Income | $ 22 | $ (12) |
Foreign currency exchange contracts | Cost of sales | ||
Derivatives not designated as hedging instruments | ||
Gain (Loss) on Derivative Recognized in Income | 4 | |
Foreign currency forward/options contracts | Interest expense | ||
Derivatives not designated as hedging instruments | ||
Gain (Loss) on Derivative Recognized in Income | $ 22 | $ (16) |
Derivatives - Statement of Inco
Derivatives - Statement of Income Location and Impact of Cash Flow (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
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 | $ 4,525 | $ 4,109 |
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 | 49 | 75 |
Cash flow hedge | ||
Gain or (loss) on cash flow hedging relationships: | ||
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | (9) | 16 |
Cash flow hedge | Foreign currency exchange 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 | (7) | 18 |
Cash flow hedge | Interest rate 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 | (2) | (2) |
Fair value hedges | Interest rate contracts | Other expense (income), net | ||
Gain or (loss) on fair value hedging relationships: | ||
Hedged items | 2 | (2) |
Derivatives designated as hedging instruments | $ (2) | $ 2 |
Derivatives - BS Location (Deta
Derivatives - BS Location (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | $ 84 | $ 44 |
Fair Value of Derivative Instruments, Liabilities | 63 | 106 |
Derivatives designated as hedging instruments | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 62 | 31 |
Fair Value of Derivative Instruments, Liabilities | 48 | 92 |
Derivatives designated as hedging instruments | Foreign currency exchange contracts | Other current assets | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 36 | 14 |
Derivatives designated as hedging instruments | Foreign currency exchange contracts | Other assets | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 21 | 10 |
Derivatives designated as hedging instruments | Foreign currency exchange contracts | Other current liabilities | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Liabilities | 38 | 67 |
Derivatives designated as hedging instruments | Foreign currency exchange contracts | Other liabilities | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Liabilities | 10 | 25 |
Derivatives designated as hedging instruments | Foreign currency exchange contracts | Current balance sheet location | ||
Location and Fair Value Amount of Derivative Instruments | ||
Derivative Notional Amount | 1,656 | 1,630 |
Derivatives designated as hedging instruments | Foreign currency exchange contracts | Noncurrent balance sheet location | ||
Location and Fair Value Amount of Derivative Instruments | ||
Derivative Notional Amount | 685 | 669 |
Derivatives designated as hedging instruments | Interest rate contracts | Other current assets | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 5 | 7 |
Derivatives designated as hedging instruments | Interest rate contracts | Current balance sheet location | ||
Location and Fair Value Amount of Derivative Instruments | ||
Derivative Notional Amount | 403 | 403 |
Derivatives not designated as hedging instruments | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 22 | 13 |
Fair Value of Derivative Instruments, Liabilities | 15 | 14 |
Derivatives not designated as hedging instruments | Foreign currency exchange contracts | Other current assets | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Assets | 22 | 13 |
Derivatives not designated as hedging instruments | Foreign currency exchange contracts | Other current liabilities | ||
Location and Fair Value Amount of Derivative Instruments | ||
Fair Value of Derivative Instruments, Liabilities | 15 | 14 |
Derivatives not designated as hedging instruments | Foreign currency exchange contracts | Current balance sheet location | ||
Location and Fair Value Amount of Derivative Instruments | ||
Derivative Notional Amount | $ 3,487 | $ 3,166 |
Derivatives - Offsetting Assets
Derivatives - Offsetting Assets (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2021USD ($)Counterparty | Dec. 31, 2020USD ($) | |
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 | $ 84 | $ 44 |
Net Amount of Derivative Assets | 50 | 33 |
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 | 84 | 44 |
Gross Amount of Eligible Offsetting Recognized Derivative Liabilities | 34 | 11 |
Net Amount of Derivative Assets | $ 50 | $ 33 |
Derivatives - Offsetting Liabil
Derivatives - Offsetting Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties | ||
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | $ 63 | $ 106 |
Net Amount of Derivative Liabilities | 29 | 95 |
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 | 63 | 106 |
Gross Amount of Eligible Offsetting Recognized Derivative Assets | 34 | 11 |
Net Amount of Derivative Liabilities | $ 29 | $ 95 |
Derivatives - Currency Effects
Derivatives - Currency Effects (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Foreign Currency | |
Year-on-year foreign currency transaction effects, including hedging impact, gain (loss) impact on pre-tax income | $ (10) |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | $ 532 | $ 434 |
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 84 | 44 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 63 | 106 |
Fair value on a recurring basis | Foreign currency exchange contracts | ||
Assets and Liabilities Measured on Recurring Basis | ||
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 79 | 37 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 63 | 106 |
Fair value on a recurring basis | Interest rate contracts | ||
Assets and Liabilities Measured on Recurring Basis | ||
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 5 | 7 |
Fair value on a recurring basis | Corporate debt securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 7 | 7 |
Fair value on a recurring basis | Commercial paper | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 384 | 237 |
Fair value on a recurring basis | Certificates of deposit/time deposits | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 7 | 31 |
Fair value on a recurring basis | U.S. treasury securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 100 | 125 |
Fair value on a recurring basis | U.S. municipal securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 34 | 34 |
Fair value on a recurring basis | Level 1 | U.S. treasury securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 100 | 125 |
Fair value on a recurring basis | Level 2 | Foreign currency exchange contracts | ||
Assets and Liabilities Measured on Recurring Basis | ||
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 79 | 37 |
Gross Amounts of Derivative Liabilities Presented in the Consolidated Balance Sheet | 63 | 106 |
Fair value on a recurring basis | Level 2 | Interest rate contracts | ||
Assets and Liabilities Measured on Recurring Basis | ||
Gross Amounts of Derivative Assets Presented in the Consolidated Balance Sheet | 5 | 7 |
Fair value on a recurring basis | Level 2 | Corporate debt securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 7 | 7 |
Fair value on a recurring basis | Level 2 | Commercial paper | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | 384 | 237 |
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 | 7 | 31 |
Fair value on a recurring basis | Level 3 | U.S. municipal securities | ||
Assets and Liabilities Measured on Recurring Basis | ||
Available-for-sale marketable securities | $ 34 | $ 34 |
Fair Value Measurements - Rec_2
Fair Value Measurements - Recurring Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
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 | $ 34 | $ 46 |
Total gains or losses included in earnings | 0 | 0 |
Total gains or losses included in other comprehensive income | 0 | 0 |
Purchases and issuances | 0 | 10 |
Sales and settlements | 0 | (19) |
Transfers in and/or out of Level 3 | 0 | 0 |
Balance at the end of the period | 34 | 37 |
Total gains or losses included in other comprehensive income | $ 0 | $ 0 |
Fair Value Measurements - Nonre
Fair Value Measurements - Nonrecurring Basis (Details) - Fair value on a nonrecurring basis - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Assets and Liabilities Measured on Recurring or Nonrecurring Basis | ||
Impairment of long-lived asset | $ 0 | |
Adjustment to the carrying value of equity securities using the measurement alternative | $ 22,000,000 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Carrying Value | ||
Financial Instruments | ||
Long-term debt, excluding current portion - Fair Value | $ 16,819 | $ 17,989 |
Fair Value | ||
Financial Instruments | ||
Long-term debt, excluding current portion - Fair Value | $ 18,277 | $ 20,496 |
Commitments and Contingencies -
Commitments and Contingencies - Respirator (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Apr. 30, 2018USD ($)individual | Apr. 30, 2019USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2021USD ($)individual | Mar. 31, 2021USD ($)case | Mar. 31, 2021USD ($)lawsuit | Mar. 31, 2021USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020individual | |
Respirator Mask/Asbestos Litigation | ||||||||||
Loss contingencies | ||||||||||
Total number of named claimants | individual | 2,179 | 2,075 | ||||||||
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 | 15 | 2 | ||||||||
Number of total claims taken to trial | case | 16 | |||||||||
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 | ||||||||||
Litigation settlement awarded | $ 2,000,000 | |||||||||
Number of unnamed defendant | individual | 2 | |||||||||
Amount of punitive damages awarded | $ 63,000,000 | |||||||||
Respirator Mask/Asbestos Litigation | Kentucky and West Virginia | ||||||||||
Loss contingencies | ||||||||||
Settlement amount paid | $ 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 | |||||
Respirator Mask/Asbestos litigation - Excluding Aearo Technologies | ||||||||||
Loss contingencies | ||||||||||
Increase in liabilities, gross | 36,000,000 | $ 313,000,000 | ||||||||
Insurance receivables | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | |||||
Litigation settlement awarded | 19,000,000 | |||||||||
Accrued loss contingency reserve | 679,000,000 | 679,000,000 | 679,000,000 | 679,000,000 | 679,000,000 | |||||
Respirator Mask/Asbestos Litigation - Aearo Technologies | ||||||||||
Loss contingencies | ||||||||||
Accrued loss contingency reserve | $ 27,000,000 | $ 27,000,000 | $ 27,000,000 | $ 27,000,000 | 27,000,000 | |||||
Increase (decrease) accrued loss contingency reserve | $ 37,000,000 | |||||||||
Quarterly fee paid to Cabot to retain responsibility and liability for products manufactured before July 11, 1995 | $ 100,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Environmental (Details) | 1 Months Ended | 3 Months Ended | ||||||||||||||||
Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Apr. 30, 2019USD ($) | Jul. 31, 2018USD ($) | Feb. 28, 2018USD ($) | Mar. 31, 2021USD ($)lawsuit | Mar. 31, 2021USD ($)individuallawsuit | Mar. 31, 2021USD ($)lawsuit | Mar. 31, 2021USD ($)itemlawsuit | Mar. 31, 2021USD ($)lawsuit | Mar. 31, 2021USD ($)lawsuitfacility | Mar. 31, 2021USD ($)lawsuitdefendant | Mar. 31, 2021USD ($)lawsuitsubsidiary | Mar. 31, 2021USD ($)lawsuitperson | Mar. 31, 2021USD ($)companylawsuit | Dec. 31, 2019USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | |
Environmental Matters - Remediation | ||||||||||||||||||
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 | ||||||||
Environmental Matters - Remediation | Maximum | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
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 | $ | $ 8,000,000 | $ 8,000,000 | $ 8,000,000 | $ 8,000,000 | $ 8,000,000 | $ 8,000,000 | $ 8,000,000 | $ 8,000,000 | $ 8,000,000 | $ 8,000,000 | ||||||||
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 | item | 70 | |||||||||||||||||
Amount of PFOA in drinking water allowed per provisional health advisories in parts per trillion (superseded) | item | 400 | |||||||||||||||||
Amount of PFOS in drinking water allowed per provisional health advisories in parts per trillion (superseded) | item | 200 | |||||||||||||||||
Number of PFCs the EPA has required to have public water system suppliers monitor | item | 6 | |||||||||||||||||
Number compounds EPA asked for public comment on draft toxicity assessments for PFAS compounds, including PFBS | item | 2 | |||||||||||||||||
Number of guidance documents released by the EPA related to PFAS | item | 2 | |||||||||||||||||
Number of public water supplies the EPA reported results | item | 4,920 | |||||||||||||||||
Number of water supplies that reported above advisory level with PFOA | item | 13 | |||||||||||||||||
Number of water supplies that reported above advisory level with PFOS | item | 46 | |||||||||||||||||
Number of water supplies that reported above advisory level with both PFOA and PFOS under technical advisory issued by EPA in September 2016 | item | 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 | item | 1 | |||||||||||||||||
Environmental Matters - Regulatory Activities | Massachusetts | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of combined PFAS compounds detailed in published final regulations establishing a drinking water standard | item | 6 | |||||||||||||||||
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 | item | 35 | |||||||||||||||||
Amount of PFOS in drinking water allowed per Minnesota Department of Health in parts per trillion | item | 27 | |||||||||||||||||
Additional amounts of PFOS in drinking water allowed per Minnesota Department of Health in parts per trillion | item | 15 | |||||||||||||||||
Amount of PFHxS in drinking water allowed per Minnesota Department of Health in parts per trillion | item | 47 | |||||||||||||||||
Amount of PFBS in drinking water allowed per Minnesota Department of Health in parts per billion | item | 2 | |||||||||||||||||
Environmental Matters - Regulatory Activities | Vermont | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of other perfluorinated compounds in drinking water standards | item | 3 | |||||||||||||||||
Environmental Matters - Litigation | U.S. District Court for the Northern District of Alabama | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of plaintiffs | individual | 55 | |||||||||||||||||
Number of additional plaintiffs | individual | 37 | |||||||||||||||||
Number of plaintiffs dismissed | individual | 5 | |||||||||||||||||
Environmental Matters - Litigation | Alabama | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Litigation settlement awarded | $ | $ 35,000,000 | |||||||||||||||||
Number of local water works for whom the water authority supplies water | item | 5 | |||||||||||||||||
Environmental Matters - Litigation | Alabama | Minimum | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of plaintiffs | individual | 200 | |||||||||||||||||
Environmental Matters - Litigation | Decatur, Alabama | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of closed municipal landfills | item | 3 | |||||||||||||||||
Number of putative class action and other lawsuits | 2 | |||||||||||||||||
Environmental Matters - Litigation | Minnesota | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Litigation settlement awarded | $ | $ 897,000,000 | |||||||||||||||||
Number of recommended options for utilizing the Water Quality and Sustainability Fund seeking public comment | item | 3 | |||||||||||||||||
Settlement amount paid | $ | $ 850,000,000 | |||||||||||||||||
Environmental Matters - Litigation | Lake Elmo, Minnesota | Maximum | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Settlement amount paid | $ | $ 5,000,000 | |||||||||||||||||
Environmental Matters - Litigation | New Jersey | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits filed | 2 | |||||||||||||||||
Number of additional new claims filed | 2 | |||||||||||||||||
Number of additional defendants | six | |||||||||||||||||
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 | Michigan | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits filed | 2 | |||||||||||||||||
Environmental Matters - Litigation | Federal court of Michigan | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits filed | 1 | |||||||||||||||||
Environmental Matters - Litigation | State court in New York | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits filed | 4 | |||||||||||||||||
Environmental Matters - Litigation | State Court of Lawrence County, Alabama | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of plaintiffs | individual | 4,000 | |||||||||||||||||
Environmental Matters - Litigation | New Hampshire | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits filed | 2 | |||||||||||||||||
Number of additional defendants | seven | |||||||||||||||||
Environmental Matters - Litigation | Vermont | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits filed | 2 | |||||||||||||||||
Number of additional defendants | defendant | 10 | |||||||||||||||||
Environmental Matters - Aqueous Film Forming Foam Litigation | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits filed | 1,076 | |||||||||||||||||
Number of putative class action and other lawsuits | 26 | |||||||||||||||||
Environmental Matters - Aqueous Film Forming Foam Litigation | U.S. Judicial Panel on Multidistrict Litigation (MDL) | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of water supplier cases | 10 | |||||||||||||||||
Environmental Matters - Aqueous Film Forming Foam Litigation | Various state courts | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits filed | 8 | |||||||||||||||||
Number of lawsuits pending | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | ||||||||
Number of lawsuits served | 6 | |||||||||||||||||
Number of cases stayed | 5 | |||||||||||||||||
Environmental Matters - Aqueous Film Forming Foam Litigation | State court in Wisconsin | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of subsidiaries of plaintiff | subsidiary | 2 | |||||||||||||||||
Environmental Matters - Aqueous Film Forming Foam Litigation | Federal court | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits pending | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | ||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | U.S. District Court of New York State | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits filed | 40 | |||||||||||||||||
Number of additional new claims filed | 4 | |||||||||||||||||
Number of putative class action and other lawsuits | 1 | |||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | U.S. District Court of Eastern District of New York | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits pending | 12 | 12 | 12 | 12 | 12 | 12 | 12 | 12 | 12 | 12 | ||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | State court of California | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of local water providers | facility | 10 | |||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Decatur, Alabama | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of perfluorinated materials (FBSA and FBSEE) the company cannot release into "the waters of the United States." | item | 2 | |||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Alabama and Georgia | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of putative class action and other lawsuits | 3 | |||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Cities located downstream along the Coosa River | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of putative class action and other lawsuits | 3 | |||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | New Jersey | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits filed | 2 | |||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Near DuPont and Solvay Facilities | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of lawsuits filed | 3 | |||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Michigan | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of plaintiffs | 277 | 1 | ||||||||||||||||
Settlement amount paid | $ | $ 55,000,000 | $ 70,000,000 | ||||||||||||||||
Number of claims with summary judgment | 1 | |||||||||||||||||
Number of federal bellwether cases with trial-ready dates set | 3 | |||||||||||||||||
Number of federal bellwether cases the court issued the first round of dispositive motion rulings | 2 | |||||||||||||||||
Total number of federal bellwether cases | 5 | |||||||||||||||||
Number of putative class action and other lawsuits | 1 | |||||||||||||||||
Number of companies involved in agreement | company | 2 | |||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Federal court | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of putative class action and other lawsuits | 2 | |||||||||||||||||
Environmental Matters - Other PFAS-related Environmental Litigation | Delaware. | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of putative class action and other lawsuits | 1 | |||||||||||||||||
Environmental Matters - Other Environmental Litigation | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Accrued loss contingency reserve | $ | $ 463,000,000 | $ 463,000,000 | $ 463,000,000 | $ 463,000,000 | $ 463,000,000 | $ 463,000,000 | $ 463,000,000 | $ 463,000,000 | $ 463,000,000 | $ 463,000,000 | ||||||||
Increase (decrease) accrued loss contingency reserve | $ | 55,000,000 | |||||||||||||||||
Litigation payments | $ | $ 8,000,000 | |||||||||||||||||
Charge for environmental resolutions | $ | $ 214,000,000 | |||||||||||||||||
Environmental Matters - Other Environmental Litigation | Alabama | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Increase (decrease) accrued loss contingency reserve | $ | $ 235,000,000 | |||||||||||||||||
Environmental Matters - Other Environmental Litigation | New Jersey | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Approximate number of miles of a river seeking to be cleaned | item | 8 | |||||||||||||||||
The value the award the plaintiff seeks | $ | $ 165,000,000 | |||||||||||||||||
Number of chemicals of concern in the sediment | item | 8 | |||||||||||||||||
Number of commercial drum conditioning facilities | item | 2 | |||||||||||||||||
Number of landfills tested by the entity for environmental matters and litigation related to historical PFAS manufacturing operations | item | 4 | |||||||||||||||||
Environmental Matters - Other Environmental Litigation | New Jersey | Minimum | ||||||||||||||||||
Loss contingencies | ||||||||||||||||||
Number of unnamed defendant | defendant | 120 |
Commitments and Contingencies_3
Commitments and Contingencies - Product Liability (Details) | 3 Months Ended |
Mar. 31, 2021USD ($)lawsuitperson | |
Product Liability - Bair Hugger | |
Product Liability Litigation | |
Number of lawsuits filed | 26 |
Number of plaintiffs | person | 27 |
Accrued loss contingency reserve | $ | $ 0 |
Product Liability - Bair Hugger | United States | |
Product Liability Litigation | |
Number of lawsuits filed | 26 |
Product Liability - Bair Hugger | Canada. | |
Product Liability Litigation | |
Number of putative class action and other lawsuits | 1 |
Product Liability - Bair Hugger | Various federal courts | |
Product Liability Litigation | |
Number of plaintiffs | person | 5,000 |
Product Liability - Bair Hugger | Multi-district litigation (MDL) | |
Product Liability Litigation | |
Number of lawsuits filed | 23 |
Number of cases stayed | 23 |
Product Liability - Bair Hugger | State court | |
Product Liability Litigation | |
Number of lawsuits filed | 3 |
Product Liability - Bair Hugger | U.S. District Court for the District of Minnesota | |
Product Liability Litigation | |
Number of lawsuits filed | 61 |
Product Liability - Bair Hugger and medical malpractice claims | Hidalgo County Texas | |
Product Liability Litigation | |
Number of lawsuits pending | 1 |
Product Liability - Bair Hugger and medical malpractice claims | Jackson County Missouri | |
Product Liability Litigation | |
Number of lawsuits pending | 2 |
Product Liability - Dual-Ended Combat Arms Earplugs | |
Product Liability Litigation | |
Number of lawsuits filed | 3,349 |
Number of putative class action and other lawsuits | 14 |
Number of plaintiffs | person | 12,700 |
Accrued loss contingency reserve | $ | $ 0 |
Product Liability - Dual-Ended Combat Arms Earplugs | Multi-district litigation (MDL) | |
Product Liability Litigation | |
Number of additional new claims filed | 20 |
Number of plaintiffs | person | 3 |
Number of additional plaintiffs | person | 2 |
Product Liability - Dual-Ended Combat Arms Earplugs | U.S. Court of Appeals for the Eighth Circuit | |
Product Liability Litigation | |
Number of lawsuits filed | 40 |
Number of plaintiffs | person | 800 |
Commitments and Contingencies_4
Commitments and Contingencies - Stockholder Litigation (Details) | 3 Months Ended |
Mar. 31, 2021lawsuit | |
State court in Minnesota | Securities Litigation | |
Loss contingencies | |
Number of derivative lawsuits filed | 2 |
Commitments and Contingencies_5
Commitments and Contingencies - Federal False Claims Act / Qui Tam Litigation (Details) - Federal False Claims Act / Qui Tam Litigation | 3 Months Ended |
Mar. 31, 2021personlawsuit | |
Loss contingencies | |
Number of actions declined to intervene | 2 |
Number of lawsuits pending | 2 |
Number of former employees | person | 2 |
Godecke case | |
Loss contingencies | |
Number of lawsuits pending | 1 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 3 Months Ended |
Mar. 31, 2021ageshares | |
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) | 35.00% |
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 | 10,700,000 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Amounts recognized in the financial statements | ||
Stock-based compensation programs expense | $ 131 | $ 120 |
Income tax benefits | (51) | (39) |
Stock-based compensation expenses (benefits), net of tax | 80 | 81 |
Cost of sales | ||
Amounts recognized in the financial statements | ||
Stock-based compensation programs expense | 22 | 22 |
Selling, general and administrative expenses | ||
Amounts recognized in the financial statements | ||
Stock-based compensation programs expense | 84 | 73 |
Research, development and related expenses | ||
Amounts recognized in the financial statements | ||
Stock-based compensation programs expense | $ 25 | $ 25 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share- based compensation assumptions | ||
Weighted average exercise price | $ 175.04 | |
Risk-free interest rate (as a percent) | 0.80% | |
Dividend yield (as a percent) | 2.80% | |
Expected volatility (as a percent) | 22.60% | |
Expected life | 83 months | |
Black-Scholes fair value | $ 25.33 | |
Stock Options | ||
Stock Option Program | ||
Balance at the beginning of the period | 35,401 | |
Granted - Annual | 3,612 | |
Exercised | (2,323) | |
Forfeited | (104) | |
Balance at the end of the period | 36,586 | |
Options exercisable | 28,819 | |
Weighted average exercise price - Beginning balance | $ 156.23 | |
Weighted average exercise price - Granted - Annual | 175.04 | |
Weighted average exercise price - Exercised | 104.16 | |
Weighted average exercise price - Forfeited | 174.71 | |
Weighted average exercise price - Ending balance | 161.34 | |
Options exercisable, exercise price | $ 158.58 | |
Weighted average remaining contractual life for options outstanding | 68 months | |
Weighted average remaining contractual life for options exercisable | 57 months | |
Aggregate intrinsic value for options outstanding | $ 1,299 | |
Aggregate intrinsic value for options exercisable | $ 1,126 | |
Expiration of annual grants | 10 years | |
Compensation expense yet to be recognized | $ 93 | |
Expense recognition period | 25 months | |
Total intrinsic value of stock options exercised | $ 180 | $ 98 |
Cash received from options exercised | 240 | 100 |
Tax benefit realized from exercise of stock options | $ 38 | $ 20 |
Stock Options | Maximum | ||
Stock Option Program | ||
Vesting period | 3 years | |
Stock Options | Minimum | ||
Stock Option Program | ||
Vesting period | 1 year |
Stock-Based Compensation - RSU,
Stock-Based Compensation - RSU, RS, Performance Shares (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restricted Stock and Restricted Stock Units | ||
Unit and Shares Activity: | ||
Number of Shares - Nonvested - Beginning balance | 1,722,000 | |
Number of Shares - Granted - Annual | 721,000 | |
Number of Shares - Vested | (433,000) | |
Number of Shares - Forfeited | (33,000) | |
Number of Shares - Nonvested - Ending balance | 1,977,000 | |
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 | $ 189.78 | |
Weighted Average Grant Date Fair Value - Granted - Annual | 175.09 | |
Weighted Average Grant Date Fair Value - Vested | 232.62 | |
Weighted Average Grant Date Fair Value - Forfeited | 173.54 | |
Weighted Average Grant Date Fair Value - Nonvested - Ending balance | $ 175.31 | |
Compensation expense yet to be recognized | $ 141 | |
Expense recognition period | 27 months | |
Fair value that vested | $ 78 | $ 88 |
Tax benefit realized from vesting | $ 14 | 16 |
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 | 423,000 | |
Number of Shares - Granted - Annual | 163,000 | |
Number of Shares - Distributed | (115,000) | |
Number of Shares - Performance Change | 17,000 | |
Number of Shares - Forfeited | (4,000) | |
Number of Shares - Nonvested - Ending balance | 484,000 | |
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 | $ 188.61 | |
Weighted Average Grant Date Fair Value - Granted - Annual | $ 176.41 | |
Weighted Average Grant Date Fair Value - Distributed | 228.80 | |
Weighted Average Grant Date Fair Value - Performance Change | $ 178.43 | |
Weighted Average Grant Date Fair Value - Forfeited | 172.92 | |
Weighted Average Grant Date Fair Value - Nonvested - Ending balance | $ 174.75 | |
Compensation expense yet to be recognized | $ 40 | |
Expense recognition period | 21 months | |
Fair value that vested | $ 22 | 35 |
Tax benefit realized from vesting | $ 4 | $ 7 |
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) | 3 Months Ended |
Mar. 31, 2021segment | |
Business Segments | |
Number of business segments | 4 |
Business Segments - Business Se
Business Segments - Business Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Business Segment Information | ||
Net sales | $ 8,851 | $ 8,075 |
Operating Income | 1,994 | 1,663 |
Gain/(loss) on sale of businesses | 2 | |
Total operating expenses | 6,857 | 6,412 |
Other expense (income), net | 49 | 75 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 1,945 | 1,588 |
Safety and Industrial | ||
Business Segment Information | ||
Net sales | 3,327 | 2,927 |
Operating Income | 811 | 694 |
Transportation and Electronics | ||
Business Segment Information | ||
Net sales | 2,531 | 2,239 |
Operating Income | 591 | 464 |
Health Care | ||
Business Segment Information | ||
Net sales | 2,248 | 2,104 |
Operating Income | 509 | 452 |
Consumer | ||
Business Segment Information | ||
Net sales | 1,373 | 1,250 |
Operating Income | 289 | 265 |
Business Segments. | ||
Business Segment Information | ||
Operating Income | 2,041 | 1,762 |
Corporate and Unallocated | ||
Business Segment Information | ||
Net sales | (2) | |
Significant litigation-related (charges)/benefits | (17) | |
Gain/(loss) on sale of businesses | 2 | |
Other corporate expense - net | (47) | (84) |
Total operating expenses | (47) | (99) |
Elimination of Dual Credit | ||
Business Segment Information | ||
Net sales | (626) | (445) |
Operating Income | $ (159) | $ (113) |