NOTE 11. Pension and Postretirement Benefit Plans

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 and nine months ended September 30, 2018 and 2017 follow:

Benefit Plan Information


	Three months ended September 30,
	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2018		2017		2018		2017		2018		2017
Net periodic benefit cost (benefit)
Operating expense
Service cost	$	72	$	67	$	37	$	33	$	13	$	13
Non-operating expense
Interest cost	$	141	$	141	$	40	$	38	$	20	$	20
Expected return on plan assets		(272)		(259)		(78)		(71)		(21)		(21)
Amortization of prior service benefit		(6)		(5)		(4)		(3)		(10)		(13)
Amortization of net actuarial loss		126		97		29		29		15		14
Total non-operating expense (benefit)		(11)		(26)		(13)		(7)		4		—
Total net periodic benefit cost (benefit)	$	61	$	41	$	24	$	26	$	17	$	13


	Nine months ended September 30,
	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2018		2017		2018		2017		2018		2017
Net periodic benefit cost (benefit)
Operating expense
Service cost	$	216	$	201	$	110	$	100	$	39	$	38
Non-operating expense
Interest cost	$	423	$	425	$	120	$	112	$	60	$	59
Expected return on plan assets		(816)		(777)		(235)		(209)		(63)		(63)
Amortization of prior service benefit		(18)		(17)		(10)		(9)		(30)		(39)
Amortization of net actuarial loss		378		291		87		89		45		42
Total non-operating expense (benefit)		(33)		(78)		(38)		(17)		12		(1)
Total net periodic benefit cost (benefit)	$	183	$	123	$	72	$	83	$	51	$	37

For the nine months ended September 30, 2018, contributions totaling $300 million were made to the Company’s U.S. and international pension plans and $3 million to its postretirement plans. For total year 2018, the Company expects to contribute up to $400 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 2018. 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.

The Company adopted ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, effective January 1, 2018 on a retrospective basis. This ASU changed 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 is included in operating expenses and only the service cost component is 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) are reported outside of operating income. See Note 1 for additional details.