REG - 3M Company - 3rd Quarter Results <Origin Href="QuoteRef">MMM.N</Origin> - Part 2
01/11/2017 07:06
- Part 2: For the preceding part double click ID:nRSA1805Va
the ASU, a decision maker would need to consider only
its proportionate indirect interest in the VIE held through a common control party. Previous guidance had required the
decision maker to treat the common control party's interest in the VIE as if the decision maker held the interest itself.
As a result of the ASU, in certain cases, previous consolidation conclusions may change. For 3M, the standard was effective
January 1, 2017 with retrospective application to January 1, 2016. 3M does not have significant involvement with entities
subject to consolidation considerations impacted by VIE model factors. As a result, the adoption of this ASU did not have a
material impact on the Company's consolidated results of operations and financial condition.
In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which clarified guidance on the classification and
presentation of restricted cash in the statement of cash flows. Under the ASU, changes in restricted cash and restricted
cash equivalents would be included along with those of cash and cash equivalents in the statement of cash flows. As a
result, entities would no longer present transfers between cash/equivalents and restricted cash/equivalents in the
statement of cash flows. In addition, a reconciliation between the balance sheet and the statement of cash flows would be
disclosed when the balance sheet includes more than one line item for cash/equivalents and restricted cash/equivalents. The
Company early adopted ASU No. 2016-18 as of January 1, 2017. Due to the immaterial use of restricted cash and restricted
cash equivalents, no impact was reflected in the Company's pre-2017 consolidated results of operations and financial
condition presented.
In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, which narrows the existing
definition of a business and provides a framework for evaluating whether a transaction should be accounted for as an
acquisition (or disposal) of assets or a business. The ASU requires an entity to evaluate if substantially all of the fair
value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable
assets; if so, the set of transferred assets and activities (collectively, the set) is not a business. To be considered a
business, the set would need to include an input and a substantive process that together significantly contribute to the
ability to create outputs. The standard also narrows the definition of outputs. The definition of a business affects areas
of accounting such as acquisitions, disposals and goodwill. Under the new guidance, fewer acquired sets are expected to be
considered businesses. For 3M, this ASU is effective January 1, 2018 on a prospective basis with early adoption permitted.
3M would apply this guidance to applicable transactions after the adoption date.
In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. Under the new standard,
goodwill impairment would be measured as the amount by which a reporting unit's carrying value exceeds its fair value, not
to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine
goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a
reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination.
For 3M, this ASU is effective prospectively to impairment tests beginning January 1, 2020, with early adoption permitted at
the time of any interim impairment test that may be performed prior to that date. 3M currently plans to apply this ASU in
the fourth quarter of 2017 in conjunction with its annual goodwill impairment testing.
In February 2017, the FASB issued ASU No. 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for
Partial Sales of Nonfinancial Assets. This ASU addresses scope-related questions that arose after the FASB issued its
revenue guidance in ASU No. 2014-09, Revenue from Contracts with Customers. The new standard clarifies the accounting for
derecognition of nonfinancial assets and defines what is considered an in substance nonfinancial asset. Nonfinancial assets
largely relate to items such as real estate, ships and intellectual property that do not constitute a business. The new ASU
impacts entities derecognizing (e.g. selling) nonfinancial assets (or in substance nonfinancial assets), including partial
interests therein, when the purchaser is not a customer. Under the new guidance, the seller would apply certain recognition
and measurement principles of ASU No. 2014-09, Revenue from Contracts with Customers, even though the purchaser is not a
customer. For 3M, this new standard is effective coincident with the Company's January 1, 2018 adoption of ASU No. 2014-09.
The Company is currently assessing this ASU's impact on 3M's consolidated results of operations and financial condition.
In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost. This ASU changes how employers that sponsor defined benefit pension and/or other
postretirement benefit plans present the net periodic benefit cost in the income statement. Under the new standard, only
the service cost component of net periodic benefit cost would be included in operating expenses and only the service cost
component would be eligible for capitalization into assets such as inventory. All other net periodic benefit costs
components (such as interest, expected return on plan assets, prior service cost amortization and actuarial gain/loss
amortization) would be reported outside of operating income. For 3M, this ASU is effective January 1, 2018 on a
retrospective basis; however, guidance limiting the capitalization to only the service cost component is applied on
prospective basis. The components of 3M's net periodic defined benefit pension and postretirement benefit costs are
presented in Note 9. These include components totaling a benefit of $31 million and $50 million for the three months ended
September 30, 2017 and 2016, respectively, and $95 million and $156 million for the nine months ended September 30, 2017
and 2016, respectively, that would no longer be included within operating expenses and instead would be reported outside of
income from operations under the new standard.
In March 2017, the FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities, which amends
the amortization period for certain purchased callable debt securities held at a premium. Under existing standards,
entities generally amortize the premium as an adjustment of yield over the contractual life of the instrument. The new
guidance shortens the amortization period to the earliest call date for certain callable debt securities that have
explicit, noncontingent call features and are callable at a fixed price and preset date. The amendments do not require an
accounting change for securities held at a discount. For 3M, this ASU is effective January 1, 2019 with a modified
retrospective transition resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first
reporting period in which the guidance is adopted. Early adoption is permitted. 3M's marketable security portfolio includes
very limited instances of callable debt securities held at a premium. As a result, the Company does not expect this ASU to
have a material impact on 3M's consolidated results of operations and financial condition.
In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting, that clarifies when changes to the terms or
conditions of a share-based payment award must be accounted for as a modification. The general model for accounting for
modifications of share-based payment awards is to record the incremental value arising from the changes as additional
compensation cost. Under the new standard, fewer changes to the terms of an award would require accounting under this
modification model. For 3M, this ASU is effective January 1, 2018, with early adoption permitted. Because the Company does
not typically make changes to the terms or conditions of its issued share-based payment awards, 3M does not expect this ASU
to have a material impact on its consolidated results of operations and financial condition.
In May 2017, the FASB issued ASU No. 2017-10, Determining the Customer of the Operation Services, that clarifies how an
operating entity determines the customer of the operation services for transactions within the scope of a service
concession arrangement. Service concession arrangements are typically agreements between a grantor and an operating entity
whereby the operating entity will operate the grantor's infrastructure (i.e. airports, roadways, bridges, and prisons) for
a specified period of time. The operating entity also may be required to maintain the infrastructure and provide
capital-intensive maintenance to enhance or extend its life. In such arrangements, typically the operation services (i.e.
operation and maintenance of a roadway) would be used by third parties (i.e. drivers). The ASU clarifies that the grantor,
not the third party, is the customer of the operation services in such arrangements. For 3M, this new standard is effective
coincident with the Company's January 1, 2018 adoption of ASU No. 2014-09. Because the Company is not typically a party to
agreements within the scope of accounting for service concession arrangements, 3M does not expect this ASU to have a
material impact on its consolidated results of operations and financial condition.
In July 2017, the FASB issued ASU No. 2017-11, (Part I) Accounting for Certain Financial Instruments with Down Round
Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain
Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. The new standard
applies to issuers of financial instruments with down-round features. A down-round provision is a term in an equity-linked
financial instrument (i.e. a freestanding warrant contract or an equity conversion feature embedded within a host debt or
equity contract) that triggers a downward adjustment to the instrument's strike price (or conversion price) if equity
shares are issued at a lower price (or equity-linked financial instruments are issued at a lower strike price) than the
instrument's then-current strike price. The purpose of the feature is typically to protect the instrument's counterparty
from future issuances of equity shares at a more favorable price. The ASU amends (1) the classification of such instruments
as liabilities or equity by revising the certain guidance relative to evaluating if they must be accounted for as
derivative instruments and (2) the guidance on recognition and measurement of freestanding equity-classified instruments.
For 3M, this ASU is effective January 1, 2019, with early adoption permitted. Because the Company has not issued financial
instruments with down-round features, 3M does not expect this ASU to have a material impact on its consolidated results of
operations and financial condition.
In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities. The ASU amends
existing guidance to simplify the application of hedge accounting in certain situations and allow companies to better align
their hedge accounting with their risk management activities. Existing standards contain certain requirements for an
instrument to qualify for hedge accounting relative to initial and ongoing assessments of hedge effectiveness. While an
initial quantitative test to establish the hedge relationship is highly effective would still be required, the new ASU
permits subsequent qualitative assessments for certain hedges instead of a quantitative test and expands the timeline for
performing the initial quantitative assessment. The ASU also simplifies related accounting by eliminating the requirement
to separately measure and report hedge ineffectiveness. Instead, for qualifying cash flow and net investment hedges, the
entire change in fair value (including the amount attributable to ineffectiveness) will be recorded within other
comprehensive income and reclassified to earnings in the same income statement line that is used to present the earnings
effect of the hedged item when the hedged item affects earnings. For fair value hedges, generally, the entire change in
fair value of the hedging instrument would also be presented in the same income statement line as the hedged item. The new
standard also simplifies the accounting for fair value hedges of interest rate risks and expands an entity's ability to
hedge nonfinancial and financial risk components. In addition, the guidance also eases certain documentation requirements,
modifies the accounting for components excluded from the assessment of hedge effectiveness, and requires additional tabular
disclosures of derivative and hedge-related information. For 3M, this ASU is effective January 1, 2019, with a modified
retrospective transition resulting in a cumulative-effect adjustment recorded to the opening balance of retained earnings
as of the adoption date. Early adoption is permitted. The Company is currently assessing this ASU's impact on 3M's
consolidated results of operations and financial condition.
NOTE 2. Acquisitions and Divestitures
Acquisitions:
3M makes acquisitions of certain businesses from time to time that are aligned with its strategic intent with respect to,
among other factors, growth markets and adjacent product lines or technologies. 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.
In September 2017, 3M purchased all of the ownership interests of Elution Technologies, LLC, a Vermont-based manufacturer
of test kits that help enable food and beverage companies ensure their products are free from certain potentially harmful
allergens such as peanuts, soy or milk. Elution is reported within the Company's Health Care business.
In October 2017, 3M completed the acquisition of the underlying legal entities and associated assets of Scott Safety, which
is headquartered in Monroe, North Carolina, from Johnson Controls for $2.0 billion of cash, net of closing and other
adjustments. Scott Safety is a premier manufacturer of innovative products, including self-contained breathing apparatus
systems, gas and flame detection instruments, and other safety devices that complement 3M's personal safety portfolio. The
business had revenues of approximately $570 million in 2016. Scott Safety will be reported within 3M's Safety and Graphics
business. The Company is in the process of completing its initial accounting for this acquisition and, accordingly, has not
included disclosures relative to the allocation of purchase consideration to the respective assets and liabilities
acquired. 3M expects to finalize the allocation of purchase price within the one year measurement-period following the
acquisition.
Pro forma information related to acquisitions has not been included because the impact on the Company's consolidated
results of operations was not considered material.
Divestitures:
3M may divest certain businesses from time to time based upon reviews of the Company's portfolio considering, among other
items, factors relative to the extent of strategic and technological alignment and optimization of capital deployment, in
addition to considering if selling the businesses results in the greatest value creation for the Company and for
shareholders.
In January 2017, 3M sold the assets of its safety prescription eyewear business, with annual sales of approximately $45
million, to HOYA Vision Care. The Company recorded a pre-tax gain of $29 million in the first quarter of 2017 as a result
of this sale, which was reported within the Company's Safety and Graphics business.
In May 2017, 3M completed the related sale or transfer of control, as applicable, of its identity management business to
Gemalto N.V. This business, with 2016 sales of approximately $205 million, is a leading provider in identity management
solutions, including biometric hardware and software that enable identity verification and authentication, as well as
secure materials and document readers. In June 2017, 3M also completed the sale of its tolling and automated license/number
plate recognition business, with annual sales of approximately $40 million, to Neology, Inc. 3M's tolling and automated
license/number plate recognition business includes RFID readers and tags, automatic vehicle classification systems, lane
controller and host software, and back office software and services. It also provides mobile and fixed cameras, software,
and services in automated license/number plate recognition. 3M received proceeds of $833 million, or $809 million net of
cash sold, and reflected a pre-tax gain of $461 million in the second quarter of 2017 as a result of these two
divestitures, which was reported within the Company's Safety and Graphics business.
In October 2017, 3M sold its electronic monitoring business to an affiliate of Apax Partners for $200 million, net of cash
sold and closing and other adjustments. This business, with annual sales of approximately $95 million, is a provider of
electronic monitoring technologies, serving hundreds of correctional and law enforcement agencies around the world. 3M
expects to reflect a pre-tax gain of approximately $100 million in the fourth quarter of 2017 as a result of this
divestiture, which will be reported within the Company's Safety and Graphics business.
The aggregate operating income of these divested businesses was less than $20 million in 2016. The approximate amounts of
major assets and liabilities associated with disposal groups classified as held-for-sale as of September 30, 2017 were not
significant and, as of December 31, 2016, included the following:
December 31,
(Millions) 2016
Accounts receivable $ 25
Property, plant and equipment (net) 25
Intangible assets 35
Deferred revenue (other current liabilities) 35
In addition, approximately $50 million and $270 million of goodwill was estimated to be attributable to disposal groups
classified as held-for-sale as of September 30, 2017 and December 31, 2016, respectively, based upon relative fair value.
The amounts above have not been segregated and are classified within the existing corresponding line items on the Company's
consolidated balance sheet.
Refer to Note 2 in 3M's Current Report on Form 8-K dated May 4, 2017 (which updated 3M's 2016 Annual Report on Form 10-K)
for more information on 3M's acquisitions and divestitures.
NOTE 3. Goodwill and Intangible Assets
Purchased goodwill from acquisitions totaled $6 million during the first nine months of 2017, all of which is deductible
for tax purposes. The amounts in the "Translation and other" column in the following table primarily relate to changes in
foreign currency exchange rates. The goodwill balances by business segment as of December 31, 2016 and September 30, 2017,
follow:
Goodwill
December 31, 2016 Acquisition Divestiture Translation September 30, 2017
(Millions) Balance activity activity and other Balance
Industrial $ 2,536 $ - $ - $ 128 $ 2,664
Safety and Graphics 3,324 - (276) 98 3,146
Health Care 1,609 6 - 59 1,674
Electronics and Energy 1,489 - - 37 1,526
Consumer 208 - - 3 211
Total Company $ 9,166 $ 6 $ (276) $ 325 $ 9,221
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 generally correspond to a division.
As described in Note 14, effective in the first quarter of 2017, the Company changed its business segment reporting in its
continuing effort to improve the alignment of its businesses around markets and customers. For any product changes that
resulted in reporting unit changes, the Company applied the relative fair value method to determine the impact on goodwill
of the associated reporting units. During the first quarter of 2017, the Company completed its assessment of any potential
goodwill impairment for reporting units impacted by this new structure and determined that no impairment existed.
Acquired Intangible Assets
The carrying amount and accumulated amortization of acquired finite-lived intangible assets, in addition to the balance of
non-amortizable intangible assets, as of September 30, 2017, and December 31, 2016, follow:
September 30, December 31,
(Millions) 2017 2016
Customer related intangible assets $ 1,924 $ 1,939
Patents 586 602
Other technology-based intangible assets 478 524
Definite-lived tradenames 393 420
Other amortizable intangible assets 211 211
Total gross carrying amount $ 3,592 $ 3,696
Accumulated amortization - customer related (865) (797)
Accumulated amortization - patents (500) (497)
Accumulated amortization - other technology based (293) (302)
Accumulated amortization - definite-lived tradenames (238) (236)
Accumulated amortization - other (167) (173)
Total accumulated amortization $ (2,063) $ (2,005)
Total finite-lived intangible assets - net $ 1,529 $ 1,691
Non-amortizable intangible assets (primarily tradenames) 646 629
Total intangible assets - net $ 2,175 $ 2,320
3M does not amortize certain acquired tradenames because they have been in existence for over 55 years, have a history of
leading-market share positions, are intended to be continuously renewed, and the associated products are expected to
generate cash flows for 3M for an indefinite period of time.
Amortization expense for acquired intangible assets for the three and nine months ended September 30, 2017 and 2016
follows:
Three months ended Nine months ended
September 30, September 30,
(Millions) 2017 2016 2017 2016
Amortization expense $ 51 $ 63 $ 162 $ 195
Expected amortization expense for acquired amortizable intangible assets recorded as of September 30, 2017:
Remainder
of After
(Millions) 2017 2018 2019 2020 2021 2022 2022
Amortization expense $ 49 $ 192 $ 183 $ 174 $ 162 $ 148 $ 602
The preceding expected amortization expense is an estimate. Actual amounts of amortization expense may differ from
estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment
of intangible assets, accelerated amortization of intangible assets and other events. The table above excludes the impact
of the carrying value of finite-lived intangible assets associated with disposal groups classified as held-for-sale at
September 30, 2017. See Note 2 for additional details. 3M expenses the costs incurred to renew or extend the term of
intangible assets.
NOTE 4. Restructuring Actions and Exit Activities
2017 Restructuring Actions:
During the second quarter of 2017, management approved and committed to undertake certain restructuring actions primarily
focused on portfolio and footprint optimization. These actions affected approximately 1,300 positions worldwide and
resulted in a second quarter 2017 pre-tax charges of $99 million. Remaining activities related to restructuring are
expected to be completed by the end of 2018.
Components of these restructuring charges are summarized by business segment as follows:
Second Quarter 2017
(Millions) Employee-Related
Industrial $ 39
Safety and Graphics 9
Health Care 2
Electronics and Energy 7
Consumer 36
Corporate and Unallocated 6
Total Expense $ 99
The preceding restructuring charges were recorded in the income statement as follows:
(Millions) Second Quarter 2017
Cost of sales $ 86
Selling, general and administrative expenses 5
Research, development and related expenses 8
Total $ 99
Components of these restructuring actions, follow:
(Millions) Employee-Related
Expense incurred in the second quarter of 2017 $ 99
Accrued restructuring action balances as of June 30, 2017 $ 99
Cash payments (3)
Accrued restructuring action balances as of September 30, 2017 $ 96
2017 Exit Activities:
In the first quarter of 2017, the Company recorded net pre-tax charges of $24 million related to exit activities. These
charges related to employee reductions, primarily in Western Europe.
NOTE 5. Supplemental Equity and Comprehensive Income Information
Consolidated Statement of Changes in Equity
Three months ended September 30, 2017
3M Company Shareholders
Common Accumulated
Stock and Other
Additional Comprehensive Non-
Paid-in Retained Treasury Income controlling
(Millions) Total Capital Earnings Stock (Loss) Interest
Balance at June 30, 2017 $ 11,644 $ 5,253 $ 38,793 $ (25,466) $ (6,989) $ 53
Net income 1,433 1,429 4
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment 44 45 (1)
Defined benefit pension and post-retirement plans adjustment 80 80 -
Cash flow hedging instruments - unrealized gain (loss) (49) (49) -
Total other comprehensive income (loss), net of tax 75
Dividends declared (701) (701)
Stock-based compensation 58 58
Reacquired stock (394) (394)
Issuances pursuant to stock option and benefit plans 87 (67) 154
Balance at September 30, 2017 $ 12,202 $ 5,311 $ 39,454 $ (25,706) $ (6,913) $ 56
Nine months ended September 30, 2017
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, 2016 $ 10,343 $ 5,070 $ 37,907 $ (25,434) $ (7,245) $ 45
Net income 4,344 4,335 9
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment 269 267 2
Defined benefit pension and post-retirement plans adjustment 241 241 -
Cash flow hedging instruments - unrealized gain (loss) (176) (176) -
Total other comprehensive income (loss), net of tax 334
Dividends declared (2,104) (2,104)
Stock-based compensation 241 241
Reacquired stock (1,547) (1,547)
Issuances pursuant to stock option and benefit plans 591 (684) 1,275
Balance at September 30, 2017 $ 12,202 $ 5,311 $ 39,454 $ (25,706) $ (6,913) $ 56
Three months ended September 30, 2016
3M Company Shareholders
Common Accumulated
Stock and Other
Additional Comprehensive Non-
Paid-in Retained Treasury Income controlling
(Millions) Total Capital Earnings Stock (Loss) Interest
Balance at June 30, 2016 $ 11,658 $ 4,972 $ 36,915 $ (24,088) $ (6,184) $ 43
Net income 1,331 1,329 2
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment 17 16 1
Defined benefit pension and post-retirement plans adjustment 67 67 -
Cash flow hedging instruments - unrealized gain (loss) (45) (45) -
Total other comprehensive income (loss), net of tax 39
Dividends declared (670) (670)
Stock-based compensation 49 49
Reacquired stock (771) (771)
Issuances pursuant to stock option and benefit plans 133 (108) 241
Balance at September 30, 2016 $ 11,769 $ 5,021 $ 37,466 $ (24,618) $ (6,146) $ 46
Nine months ended September 30, 2016
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, 2015 $ 11,468 $ 4,800 $ 36,296 $ (23,308) $ (6,359) $ 39
Net income 3,902 3,895 7
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment 192 192 -
Defined benefit pension and post-retirement plans adjustment 203 203 -
Cash flow hedging instruments - unrealized gain (loss) (182) (182) -
Total other comprehensive income (loss), net of tax 213
Dividends declared (2,014) (2,014)
Stock-based compensation 221 221
Reacquired stock (2,771) (2,771)
Issuances pursuant to stock option and benefit plans 750 (711) 1,461
Balance at September 30, 2016 $ 11,769 $ 5,021 $ 37,466 $ (24,618) $ (6,146) $ 46
Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M by Component
Three months ended September 30, 2017
Total
Defined Benefit Cash Flow Accumulated
Pension and Hedging Other
Cumulative Postretirement Instruments, Comprehensive
Translation Plans Unrealized Income
(Millions) Adjustment Adjustment Gain (Loss) (Loss)
Balance at June 30, 2017, net of tax: $ (1,786) $ (5,167) $ (36) $ (6,989)
Other comprehensive income (loss), before tax:
Amounts before reclassifications (29) - (80) (109)
Amounts reclassified out - 119 2 121
Total other comprehensive income (loss), before tax (29) 119 (78) 12
Tax effect 74 (39) 29 64
Total other comprehensive income (loss), net of tax 45 80 (49) 76
Balance at September 30, 2017, net of tax: $ (1,741) $ (5,087) $ (85) $ (6,913)
Nine months ended September 30, 2017
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, 2016, net of tax: $ (2,008) $ (5,328) $ 91 $ (7,245)
Other comprehensive income (loss), before tax:
Amounts before reclassifications 30 - (255) (225)
Amounts reclassified out - 357 (21) 336
Total other comprehensive income (loss), before tax 30 357 (276) 111
Tax effect 237 (116) 100 221
Total other comprehensive income (loss), net of tax 267 241 (176) 332
Balance at September 30, 2017, net of tax: $ (1,741) $ (5,087) $ (85) $ (6,913)
Three months ended September 30, 2016
Total
Defined Benefit Cash Flow Accumulated
Pension and Hedging Other
Cumulative Postretirement Instruments, Comprehensive
Translation Plans Unrealized Income
(Millions) Adjustment Adjustment Gain (Loss) (Loss)
Balance at June 30, 2016, net of tax: $ (1,503) $ (4,668) $ (13) $ (6,184)
Other comprehensive income (loss), before tax:
Amounts before reclassifications (8) - (44) (52)
Amounts reclassified out - 103 (24) 79
Total other comprehensive income (loss), before tax (8) 103 (68) 27
Tax effect 24 (36) 23 11
Total other comprehensive income (loss), net of tax 16 67 (45) 38
Balance at September 30, 2016, net of tax: $ (1,487) $ (4,601) $ (58) $ (6,146)
Nine months ended September 30, 2016
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, 2015, net of tax: $ (1,679) $ (4,804) $ 124 $ (6,359)
Other comprehensive income (loss), before tax:
Amounts before reclassifications 111 - (180) (69)
Amounts reclassified out - 307 (104) 203
Total other comprehensive income (loss), before tax 111 307 (284) 134
Tax effect 81 (104) 102 79
Total other comprehensive income (loss), net of tax 192 203 (182) 213
Balance at September 30, 2016, net of tax $ (1,487) $ (4,601) $ (58) $ (6,146)
Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but
tax effects within cumulative translation does include impacts from items such as net investment hedge transactions.
Reclassification adjustments are made to avoid double counting in comprehensive income items that are also recorded as part
of net income.
Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M
Amount Reclassified from
Details about Accumulated Other Accumulated Other Comprehensive Income
Comprehensive Income Components Three months ended September 30, Nine months ended September 30, Location on Income
(Millions) 2017 2016 2017 2016 Statement
Gains (losses) associated with, defined benefit pension and postretirement plans amortization
Transition asset $ -
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