Pension and Postretirement Benefit Plans

6 Months Ended

Jun. 30, 2021

Pension and Postretirement Benefit Plans

Pension and Postretirement Benefit Plans

NOTE 11. Pension and Postretirement Benefit Plans

As discussed in Note 1, effective in the first quarter of 2021, 3M made a change in accounting principle for net periodic pension and postretirement plan cost. This impacted the expected return on plan assets and the amortization of net unamortized actuarial gains or losses expense components of net periodic benefit cost. This change was applied retrospectively to all periods presented within 3M’s financial statements.

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 six months ended June 30, 2021 and 2020 follow:

Benefit Plan Information

	Three months ended June 30,
	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2021		2020		2021		2020		2021		2020
Net periodic benefit cost (benefit)
Operating expense
Service cost	$	72	$	65	$	42	$	38	$	11	$	11
Non-operating expense
Interest cost	$	90	$	125	$	25	$	33	$	11	$	16
Expected return on plan assets		(264)		(261)		(82)		(78)		(20)		(20)
Amortization of transition asset		—		—		1		—		—		—
Amortization of prior service benefit		(6)		(6)		(1)		(2)		(8)		(8)
Amortization of net actuarial loss		132		122		27		29		14		11
Settlements, curtailments, special termination benefits and other		—		—		—		—		1		1
Total non-operating expense (benefit)		(48)		(20)		(30)		(18)		(2)		—
Total net periodic benefit cost (benefit)	$	24	$	45	$	12	$	20	$	9	$	11

	Six months ended June 30,
	Qualified and Non-qualified
	Pension Benefits								Postretirement
	United States				International				Benefits
(Millions)	2021		2020		2021		2020		2021		2020
Net periodic benefit cost (benefit)
Operating expense
Service cost	$	144	$	131	$	84	$	76	$	23	$	22
Non-operating expense
Interest cost	$	180	$	249	$	50	$	64	$	22	$	32
Expected return on plan assets		(528)		(523)		(163)		(155)		(39)		(40)
Amortization of transition asset		—		—		1		1		—		—
Amortization of prior service benefit		(12)		(12)		(2)		(3)		(16)		(16)
Amortization of net actuarial loss		264		245		54		57		28		23
Settlements, curtailments, special termination benefits and other		—		—		—		—		2		2
Total non-operating expense (benefit)		(96)		(41)		(60)		(36)		(3)		1
Total net periodic benefit cost (benefit)	$	48	$	90	$	24	$	40	$	20	$	23

For the six months ended June 30, 2021 contributions totaling $83 million were made to the Company’s U.S. and international pension plans and $2 million to its postretirement plans. For total year 2021, the Company expects to contribute approximately $200 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 2021. 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.