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Supplemental Equity and Comprehensive Income Information
 9 Months Ended
Sep. 30, 2014
Supplemental Equity and Comprehensive Income Information  
Supplemental Equity and Comprehensive Income Information

NOTE 4. Supplemental Equity and Comprehensive Income Information

Consolidated Statement of Changes in Equity

Three months ended September 30, 2014   3M Company Shareholders  
(Millions) Total Common Stock and Additional Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehen-sive Income (Loss) Non-controlling Interest
Balance at June 30, 2014 $ 17,846 $ 4,650 $ 33,836 $ (17,466) $ (3,666) $ 492
                    
Net income    1,311      1,303         8
Other comprehensive income (loss), net of tax:                  
Cumulative translation adjustment   (603)            (593)   (10)
Defined benefit pension and post-retirement                  
 plans adjustment   59            59   ―
Debt and equity securities - unrealized gain (loss)    (1)            (1)   ―
Cash flow hedging instruments - unrealized                  
 gain (loss)    68            68   ―
Total other comprehensive income (loss), net                  
 of tax    (477)               
Dividends declared   (550)      (550)         
Purchase of subsidiary shares   (865)   (433)         25   (457)
Stock-based compensation, net of tax impacts    69   69            
Reacquired stock    (1,283)         (1,283)      
Issuances pursuant to stock option and                  
 benefit plans    155      (105)   260      
Balance at September 30, 2014 $ 16,206 $ 4,286 $ 34,484 $ (18,489) $ (4,108) $ 33
                    
Nine months ended September 30, 2014    3M Company Shareholders  
(Millions) Total Common Stock and Additional Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehen-sive Income (Loss) Non-controlling Interest
Balance at December 31, 2013 $ 17,948 $ 4,384 $ 32,416 $ (15,385) $ (3,913) $ 446
                    
Net income    3,819      3,777         42
Other comprehensive income (loss), net of tax:                  
Cumulative translation adjustment   (456)            (462)   6
Defined benefit pension and post-retirement                  
 plans adjustment   180            180   ―
Debt and equity securities - unrealized gain (loss)    1            1   ―
Cash flow hedging instruments - unrealized                  
 gain (loss)    61            61   ―
Total other comprehensive income (loss),                  
 net of tax    (214)               
Dividends declared   (1,105)      (1,105)         
Purchase of subsidiary shares   (870)   (434)         25   (461)
Stock-based compensation, net of tax impacts    336   336            
Reacquired stock    (4,438)         (4,438)      
Issuances pursuant to stock option and                  
 benefit plans    730      (604)   1,334      
Balance at September 30, 2014 $ 16,206 $ 4,286 $ 34,484 $ (18,489) $ (4,108) $ 33

Three months ended September 30, 2013   3M Company Shareholders  
(Millions) Total Common Stock and Additional Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehen-sive Income (Loss) Non-controlling Interest
Balance at June 30, 2013 $ 18,319 $ 4,252 $ 31,716 $ (12,926) $ (5,166) $ 443
                    
Net income    1,245      1,230         15
Other comprehensive income (loss), net of tax:                  
Cumulative translation adjustment   284            286   (2)
Defined benefit pension and post-retirement                  
 plans adjustment   92            92   ―
Debt and equity securities - unrealized gain (loss)    2            2   ―
Cash flow hedging instruments - unrealized                  
 gain (loss)    (24)            (24)   ―
Total other comprehensive income (loss), net                  
 of tax    354               
Dividends declared   (431)      (431)         
Stock-based compensation, net of tax impacts    66   66            
Reacquired stock    (1,570)         (1,570)      
Issuances pursuant to stock option and                  
 benefit plans    269      (103)   372      
Balance at September 30, 2013 $ 18,252 $ 4,318 $ 32,412 $ (14,124) $ (4,810) $ 456
                    
Nine months ended September 30, 2013   3M Company Shareholders  
(Millions) Total Common Stock and Additional Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehen-sive Income (Loss) Non-controlling Interest
Balance at December 31, 2012 $ 18,040 $ 4,053 $ 30,679 $ (12,407) $ (4,750) $ 465
                    
Net income    3,605      3,556         49
Other comprehensive income (loss), net of tax:                  
Cumulative translation adjustment   (393)            (334)   (59)
Defined benefit pension and post-retirement                  
 plans adjustment   268            268   ―
Debt and equity securities - unrealized gain (loss)    (2)            (2)   ―
Cash flow hedging instruments - unrealized                  
 gain (loss)    8            8   ―
Total other comprehensive income (loss),                  
 net of tax    (119)               
Dividends declared   (1,307)      (1,307)         
Sale of subsidiary shares    8   7            1
Stock-based compensation, net of tax impacts    258   258            
Reacquired stock    (3,609)         (3,609)      
Issuances pursuant to stock option and                  
 benefit plans    1,376      (516)   1,892      
Balance at September 30, 2013 $ 18,252 $ 4,318 $ 32,412 $ (14,124) $ (4,810) $ 456

3M has historically declared and paid dividends in the same quarter. In December 2013, 3M's Board of Directors declared a first-quarter 2014 dividend of $0.855 per share (paid in March 2014). This reduced 3M's stockholders equity and increased other current liabilities as of December 31, 2013 by $567 million. This resulted in total year 2013 declared dividends of $3.395 per share, with $2.54 per share paid in 2013 and the additional $0.855 per share paid in March 2014.

Changes in Accumulated Other Comprehensive Income (Loss) Attributable to 3M by Component   
                   
Three months ended September 30, 2014               
(Millions) Cumulative Translation Adjustment Defined Benefit Pension and Postretirement Plans Adjustment Debt and Equity Securities, Unrealized Gain (Loss) Cash Flow Hedging Instruments, Unrealized Gain (Loss) Total Accumulated Other Comprehen-sive Income (Loss)
Balance at June 30, 2014, net of tax $ (57) $ (3,594) $ ― $ (15) $ (3,666)
Other comprehensive income (loss),                
 before tax:               
 Amounts before reclassifications   (537)   ―   (1)   98   (440)
 Amounts reclassified out   ―   89   ―   9   98
Total other comprehensive income (loss),                
 before tax   (537)   89   (1)   107   (342)
Tax effect   (56)   (30)   ―   (39)   (125)
Total other comprehensive income (loss),                
 net of tax   (593)   59   (1)   68   (467)
Impact from purchase of subsidiary shares   41   (16)   ―   ―   25
Balance at September 30, 2014, net of tax $ (609) $ (3,551) $ (1) $ 53 $ (4,108)
                 
Nine months ended September 30, 2014               
(Millions) Cumulative Translation Adjustment Defined Benefit Pension and Postretirement Plans Adjustment Debt and Equity Securities, Unrealized Gain (Loss) Cash Flow Hedging Instruments, Unrealized Gain (Loss) Total Accumulated Other Comprehen-sive Income (Loss)
Balance at December 31, 2013, net of tax $ (188) $ (3,715) $ (2) $ (8) $ (3,913)
Other comprehensive income (loss),                
 before tax:               
 Amounts before reclassifications   (403)   ―   2   86   (315)
 Amounts reclassified out   ―   272   ―   8   280
Total other comprehensive income (loss),                
 before tax   (403)   272   2   94   (35)
Tax effect   (59)   (92)   (1)   (33)   (185)
Total other comprehensive income (loss),                
 net of tax   (462)   180   1   61   (220)
Impact from purchase of subsidiary shares   41   (16)   ―   ―   25
Balance at September 30, 2014, net of tax $ (609) $ (3,551) $ (1) $ 53 $ (4,108)

Three months ended September 30, 2013               
(Millions) Cumulative Translation Adjustment Defined Benefit Pension and Postretirement Plans Adjustment Debt and Equity Securities, Unrealized Gain (Loss) Cash Flow Hedging Instruments, Unrealized Gain (Loss) Total Accumulated Other Comprehen-sive Income (Loss)
Balance at June 30, 2013, net of tax $ (390) $ (4,779) $ (6) $ 9 $ (5,166)
Other comprehensive income (loss),                
 before tax:               
 Amounts before reclassifications   240   ―   3   5   248
 Amounts reclassified out   ―   144   ―   (43)   101
Total other comprehensive income (loss),                
 before tax   240   144   3   (38)   349
Tax effect   46   (52)   (1)   14   7
Total other comprehensive income (loss),                
 net of tax   286   92   2   (24)   356
Balance at September 30, 2013, net of tax $ (104) $ (4,687) $ (4) $ (15) $ (4,810)
                   
Nine months ended September 30, 2013               
(Millions) Cumulative Translation Adjustment Defined Benefit Pension and Postretirement Plans Adjustment Debt and Equity Securities, Unrealized Gain (Loss) Cash Flow Hedging Instruments, Unrealized Gain (Loss) Total Accumulated Other Comprehen-sive Income (Loss)
Balance at December 31, 2012, net of tax $ 230 $ (4,955) $ (2) $ (23) $ (4,750)
Other comprehensive income (loss),                
 before tax:               
 Amounts before reclassifications   (344)   ―   (3)   (109)   (456)
 Amounts reclassified out   ―   431   ―   121   552
Total other comprehensive income (loss),                
 before tax   (344)   431   (3)   12   96
Tax effect   10   (163)   1   (4)   (156)
Total other comprehensive income (loss),                
 net of tax   (334)   268   (2)   8   (60)
Balance at September 30, 2013, net of tax $ (104) $ (4,687) $ (4) $ (15) $ (4,810)

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.

 

The previously reported before-tax amounts of other comprehensive income before reclassifications and amounts reclassified out of other comprehensive income for the three and nine months ended September 30, 2013 relative to foreign currency forward contracts in the table above and below were impacted by the immaterial revisions discussed in Note 9.

Reclassifications out of Accumulated Other Comprehensive Income Attributable to 3M
                
    Amount Reclassified from  
   Accumulated Other Comprehensive Income  
(Millions) Three months ended September 30, Nine months ended September 30, Location on Income Statement
Details about Accumulated Other Comprehensive Income Components 2014 2013 2014 2013 
Gains (losses) associated with, defined benefit pension and postretirement plans amortization              
 Transition asset $ 1 $ ― $ 1 $ 1 See Note 8
 Prior service benefit   15   19   45   59 See Note 8
 Net actuarial loss   (105)   (163)   (318)   (491) See Note 8
Total before tax   (89)   (144)   (272)   (431)  
Tax effect   30   52   92   163 Provision for income taxes
Net of tax $ (59) $ (92) $ (180) $ (268)  
                
Debt and equity security gains (losses)              
 Sales or impairments of securities $ ― $ ― $ ― $ ― Selling, general and administrative expenses
Total before tax   ―   ―   ―   ―  
Tax effect   ―   ―   ―   ― Provision for income taxes
Net of tax $ ― $ ― $ ― $ ―  
                
Cash flow hedging instruments gains (losses)              
 Foreign currency forward/option contracts $ (7) $ 1 $ (9) $ (8) Cost of sales
 Foreign currency forward contracts   ―   44   ―   (111) Interest expense
 Commodity price swap contracts   (1)   (1)   2   (1) Cost of sales
 Interest rate swap contracts   (1)   (1)   (1)   (1) Interest expense
Total before tax   (9)   43   (8)   (121)  
Tax effect   3   (15)   3   44 Provision for income taxes
Net of tax $ (6) $ 28 $ (5) $ (77)  
Total reclassifications for the period, net of tax $ (65) $ (64) $ (185) $ (345)  

Purchase and Sale of Subsidiary Shares

 

On September 1, 2014, 3M (via Sumitomo 3M Limited) acquired Sumitomo Electric Industries, Ltd.'s 25 percent interest in 3M's consolidated Sumitomo 3M Limited subsidiary for 90 billion Japanese Yen (approximately $865 million at closing date exchange rates). Upon completion of the transaction, 3M owned 100 percent of Sumitomo 3M Limited. Approximately $694 million was recorded as a financing activity in the statement of cash flows while the remainder was recorded as a current liability (paid in October 2014). This purchase of the remaining noncontrolling interest resulted in a decrease in 3M Company shareholder's equity of $408 million and a decrease in noncontrolling interest equity of $457 million.

 

In April 2014, 3M purchased the remaining noncontrolling interest in a consolidated 3M subsidiary for an immaterial amount, which was classified as a financing activity in the consolidated statement of cash flows.

 

The following table summarizes the effects of these 2014 transactions on equity attributable to 3M Company shareholders for the respective periods.

(Millions) Three months ended September 30, 2014 Nine months ended September 30, 2014
Net income attributable to 3M $ 1,303 $ 3,777
Impact of purchase of subsidiary shares   (408)   (409)
Change in 3M Company shareholders' equity from net income      
 attributable to 3M and impact of purchase of subsidiary shares $ 895 $ 3,368

In March 2013, 3M sold shares in 3M India Limited, a subsidiary of the Company, in return for $8 million. The noncontrolling interest shares of this subsidiary trade on a public exchange in India. This sale of shares complied with an amendment to Indian securities regulations that required 3M India Limited, as a listed company, to achieve a minimum public shareholding of at least 25 percent. As a result of this transaction, 3M's ownership in 3M India Limited was reduced from 76 percent to 75 percent. The $8 million received in the first quarter of 2013 was classified as other financing activity in the consolidated statement of cash flows. Because the Company retained its controlling interest, the sales resulted in an increase in 3M Company shareholder's equity of $7 million and an increase in noncontrolling interest of $1 million.