Derivatives (Tables)
|
6 Months Ended |
Jun. 30, 2022 |
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 June 30, | | Six months ended June 30, | (Millions) | | 2022 | | 2021 | | 2022 | | 2021 | Foreign currency forward/option contracts | | $ | 128 | | | $ | (26) | | | $ | 134 | | | $ | 40 | | Interest rate contracts | | — | | — | | — | | — | Total | | $ | 128 | | | $ | (26) | | | $ | 134 | | | $ | 40 | |
|
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 | | June 30, 2022 | | December 31, 2021 | | June 30, 2022 | | December 31, 2021 | Short-term borrowings and current portion of long-term debt | | $ | — | | $ | — | | $ | — | | $ | — | Long-term debt | | 926 | | 997 | | (75) | | (4) | Total | | $ | 926 | | $ | 997 | | $ | (75) | | $ | (4) |
|
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 June 30, | | Six months ended June 30, | | | (Millions) | | 2022 | | 2021 | | 2022 | | 2021 | | | | | Foreign currency denominated debt | | $ | 133 | | | $ | (55) | | | $ | 192 | | | $ | 112 | | | | | | Foreign currency forward contracts | | 9 | | | (1) | | | 11 | | | 1 | | | | | | Total | | $ | 142 | | | $ | (56) | | | $ | 203 | | | $ | 113 | | | | | |
|
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 June 30, | | Six months ended June 30, | | | Cost of sales | | Other expense (income), net | | Cost of sales | | Other expense (income), net | (Millions) | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 | 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 | | $ | 5,093 | | $ | 4,719 | | $ | 50 | | $ | 33 | | $ | 9,919 | | $ | 9,244 | | $ | 88 | | $ | 82 | 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 | | 17 | | | (10) | | — | | — | | 26 | | | (17) | | — | | — | Interest rate contracts: | | | | | | | | | | | | | | | | | Amount of gain or (loss) reclassified from accumulated other comprehensive income into income | | — | | — | | (2) | | | (2) | | | — | | — | | (4) | | | (4) | | Gain or (loss) on fair value hedging relationships: | | | | | | | | | | | | | | | | | Interest rate contracts: | | | | | | | | | | | | | | | | | Hedged items | | — | | — | | 23 | | | (2) | | | — | | — | | 71 | | | — | | Derivatives designated as hedging instruments | | — | | — | | (23) | | 2 | | | — | | — | | (71) | | — | | | | | | | | | | | | | | | | | | | Information regarding derivatives not designated as hedging instruments: | | | | | | | | | | | | | | | | | Gain or (loss) on derivatives not designated as instruments: | | | | | | | | | | | | | | | | | Foreign currency forward/option contracts | | (46) | | — | | | (1) | | 6 | | | (66) | | — | | | 24 | | 28 | |
|
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 | (Millions) | | | Location | | Fair Value Amount | | Location | | Fair Value Amount | | June 30, 2022 | | December 31, 2021 | | | June 30, 2022 | | December 31, 2021 | | | June 30, 2022 | | December 31, 2021 | Derivatives designated as hedging instruments | | | | | | | | | | | | | | | | | Foreign currency forward/option contracts | | 2,041 | | | 1,768 | | | Other current assets | | $ | 110 | | | $ | 54 | | | Other current liabilities | | $ | 3 | | | $ | 19 | | Foreign currency forward/option contracts | | 809 | | | 800 | | | Other assets | | 70 | | | 41 | | | Other liabilities | | 1 | | | 1 | | Interest rate contracts | | 800 | | | 800 | | | Other assets | | — | | | — | | | Other liabilities | | 80 | | | 9 | | Total derivatives designated as hedging instruments | | | | | | | | 180 | | | 95 | | | | | 84 | | | 29 | | | | | | | | | | | | | | | | | | | Derivatives not designated as hedging instruments | | | | | | | | | | | | | | | | | Foreign currency forward/option contracts | | 4,749 | | | 3,731 | | | Other current assets | | 5 | | | 24 | | | Other current liabilities | | 41 | | | 4 | | Total derivatives not designated as hedging instruments | | | | | | | | 5 | | | 24 | | | | | 41 | | | 4 | | | | | | | | | | | | | | | | | | | Total derivative instruments | | | | | | | | $ | 185 | | | $ | 119 | | | | | $ | 125 | | | $ | 33 | |
|
Offsetting assets |
Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements | | | | | | | Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet | | Gross Amount of Eligible Offsetting Recognized Derivative Liabilities | | Cash Collateral Received | | Net Amount of Derivative Assets | (Millions) | | June 30, 2022 | | December 31, 2021 | | June 30, 2022 | | December 31, 2021 | | June 30, 2022 | | December 31, 2021 | | June 30, 2022 | | December 31, 2021 | Derivatives subject to master netting agreements | | $ | 185 | | $ | 119 | | $ | 39 | | $ | 25 | | $ | — | | $ | — | | | $ | 146 | | $ | 94 | | Derivatives not subject to master netting agreements | | — | | — | | | | | | | | | | — | | — | | Total | | $ | 185 | | $ | 119 | | | | | | | | | | $ | 146 | | $ | 94 | |
|
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 to Master Netting Agreements | | | | | | | Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet | | Gross Amount of Eligible Offsetting Recognized Derivative Assets | | Cash Collateral Received | | Net Amount of Derivative Liabilities | (Millions) | | June 30, 2022 | | December 31, 2021 | | June 30, 2022 | | December 31, 2021 | | June 30, 2022 | | December 31, 2021 | | June 30, 2022 | | December 31, 2021 | Derivatives subject to master netting agreements | | $ | 124 | | $ | 33 | | $ | 39 | | $ | 25 | | $ | — | | $ | — | | | $ | 85 | | $ | 8 | | Derivatives not subject to master netting agreements | | 1 | | — | | | | | | | | | | 1 | | — | | Total | | $ | 125 | | $ | 33 | | | | | | | | | | $ | 86 | | $ | 8 | |
|