Derivatives (Tables)

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Gains (losses) on derivative instruments designated as hedges

The amount of pretax gain (loss) recognized in other comprehensive income related to derivative instruments designated as cash flow hedges is provided in the following table.

	Pretax Gain (Loss) Recognized in Other Comprehensive Income on Derivative
	Three months ended September 30,				Nine months ended September 30,
(Millions)	2021		2020		2021		2020
Foreign currency forward/option contracts	$	44	$	(72)	$	84	$	(8)
Interest rate contracts	—		—		—		(2)
Total	$	44	$	(72)	$	84	$	(10)

Gain (loss) on derivative instruments designated as fair value hedges

The following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges:

(Millions)	Carrying Value of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities
Location on the Consolidated Balance Sheet	September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020
Short-term borrowings and current portion of long-term debt	$	353	$	373	$	1	$	5
Long-term debt	1,008		225		8		6
Total	$	1,361	$	598	$	9	$	11

Gain (loss) on derivative and non-derivative instruments designated as net investment hedges

The amount of pretax gain (loss) recognized in other comprehensive income related to derivative and nonderivative instruments designated as net investment hedges are as follows.

	Pretax Gain (Loss) Recognized as Cumulative Translation within Other Comprehensive Income
	Three months ended September 30,				Nine months ended September 30,
(Millions)	2021		2020		2021		2020
Foreign currency denominated debt	$	83	$	(154)	$	195	$	(150)
Foreign currency forward contracts	3		(3)		4		2
Total	$	86	$	(157)	$	199	$	(148)

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

The location in the consolidated statement of income and pre-tax amounts recognized in income related to derivative instruments designated in cash flow or fair value hedging relationships and for derivatives not designated as hedging instruments are as follows:

	Location and Amount of Gain (Loss) Recognized in Income
	Three months ended September 30,								Nine months ended September 30,
	Cost of sales				Other expense (income), net				Cost of sales				Other expense (income), net
(Millions)	2021		2020		2021		2020		2021		2020		2021		2020
Information regarding cash flow and fair value hedging relationships:
Total amounts of income and expense line items presented in the consolidated statement of income in which the effects of derivatives are recorded	$	4,853	$	4,303	$	31	$	83	$	14,097	$	12,217	$	113	$	248
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	(15)		23		—		—		(32)		74		—		—
Interest rate contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	—		—		(3)		(2)		—		—		(7)		(6)
Gain or (loss) on fair value hedging relationships:
Interest rate contracts:
Hedged items	—		—		1		3		—		—		3		3
Derivatives designated as hedging instruments	—		—		(1)		(3)		—		—		(3)		(3)
Information regarding derivatives not designated as hedging instruments:
Gain or (loss) on derivatives not designated as instruments:
Foreign currency forward/option contracts	—		1		(35)		29		—		3		(7)		2

Location and fair value 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.

	Gross Notional Amount	Assets			Liabilities
September 30, 2021 (Millions)		Location	Fair Value Amount		Location	Fair Value Amount
Derivatives designated as hedging instruments
Foreign currency forward/option contracts	1,796	Other current assets	$	41	Other current liabilities	$	17
Foreign currency forward/option contracts	792	Other assets	31		Other liabilities	3
Interest rate contracts	403	Other current assets	1		Other current liabilities	—
Interest rate contracts	800	Other assets	3		Other liabilities	—
Total derivatives designated as hedging instruments			76			20
Derivatives not designated as hedging instruments
Foreign currency forward/option contracts	5,269	Other current assets	8		Other current liabilities	20
Total derivatives not designated as hedging instruments			8			20
Total derivative instruments			$	84		$	40

	Gross Notional Amount	Assets			Liabilities
December 31, 2020 (Millions)		Location	Fair Value Amount		Location	Fair 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

Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties

	Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
September 30, 2021 (Millions)			Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Received		Net Amount of Derivative Assets
Derivatives subject to master netting agreements	$	84	$	20	$	—	$	64
Derivatives not subject to master netting agreements	—						—
Total	$	84					$	64

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 Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
September 30, 2021 (Millions)			Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Pledged		Net Amount of Derivative Liabilities
Derivatives subject to master netting agreements	$	40	$	20	$	—	$	20
Derivatives not subject to master netting agreements	—						—
Total	$	40					$	20

December 31, 2020 (Millions)
Derivatives subject to master netting agreements	$	106	$	11	$	—	$	95
Derivatives not subject to master netting agreements	—						—
Total	$	106					$	95