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Pension and Postretirement Benefit Plans | 6 Months Ended
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Jun. 30, 2024
Retirement Benefits [Abstract] |
Pension and Postretirement Benefit Plans | NOTE 13. 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. Effective April 1, 2024, approximately $2.7 billion of benefit obligations and $2.4 billion of plan assets for certain pension and postretirement benefit plans, were transferred to Solventum, which is treated as a discontinued operation. Components of net periodic benefit cost and other supplemental information for the three and six months ended June 30, 2024 and 2023 follow:
|  | Three months ended June 30,
|  | Qualified and Non-qualified Pension Benefits |  | Postretirement Benefits
|  | United States | International |
(Millions) |  | 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023
Net periodic benefit cost (benefit) |  |  |  |  |  |  |  |  |  |  |  |
Operating expense |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 29 |  |  | $ | 43 |  |  | $ | 14 |  |  | $ | 20 |  |  | $ | 5 |  |  | $ | 6 |
Non-operating expense |  |  |  |  |  |  |  |  |  |  |  |
Interest cost |  | 141 |  |  | 165 |  |  | 49 |  |  | 54 |  |  | 21 |  |  | 23 |
Expected return on plan assets |  | (196) |  |  | (244) |  |  | (80) |  |  | (75) |  |  | (15) |  |  | (19) |
Amortization of transition asset |  | — |  |  | — |  |  | 1 |  |  | 1 |  |  | — |  |  | — |
Amortization of prior service benefit |  | (4) |  |  | (6) |  |  | — |  |  | — |  |  | (6) |  |  | (8) |
Amortization of net actuarial loss |  | 83 |  |  | 74 |  |  | 3 |  |  | 2 |  |  | 4 |  |  | 2 |
Settlements, curtailments, special termination benefits and other |  | 795 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total non-operating expense (benefit) |  | 819 |  |  | (11) |  |  | (27) |  |  | (18) |  |  | 4 |  |  | (2) |
Total net periodic benefit cost (benefit) |  | 848 |  |  | 32 |  |  | (13) |  |  | 2 |  |  | 9 |  |  | 4 |
Service cost - continuing operations |  | $ | 29 |  |  | $ | 35 |  |  | $ | 14 |  |  | $ | 16 |  |  | $ | 5 |  |  | $ | 5 |
Service cost - discontinued operations |  | — |  |  | 8 |  |  | — |  |  | 4 |  |  | — |  |  | 1 |
Total service cost |  | 29 |  |  | 43 |  |  | 14 |  |  | 20 |  |  | 5 |  |  | 6 |
Non-operating expense (benefit) - continuing operations |  | 819 |  |  | (7) |  |  | (27) |  |  | (16) |  |  | 4 |  |  | (2) |
Non-operating expense (benefit) - discontinued operations |  | — |  |  | (4) |  |  | — |  |  | (2) |  |  | — |  |  | — |
Total non-operating expense (benefit) |  | 819 |  |  | (11) |  |  | (27) |  |  | (18) |  |  | 4 |  |  | (2) |
Total net periodic benefit cost (benefit) - continuing operations |  | 848 |  |  | 28 |  |  | (13) |  |  | — |  |  | 9 |  |  | 3 |
Total net periodic benefit cost (benefit) - discontinued operations |  | — |  |  | 4 |  |  | — |  |  | 2 |  |  | — |  |  | 1 |
Total net periodic benefit cost (benefit) |  | $ | 848 |  |  | $ | 32 |  |  | $ | (13) |  |  | $ | 2 |  |  | $ | 9 |  |  | $ | 4 |
|  | Six months ended June 30,
|  | Qualified and Non-qualified Pension Benefits |  | Postretirement Benefits
|  | United States | International |
(Millions) |  | 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023
Net periodic benefit cost (benefit) |  |  |  |  |  |  |  |  |  |  |  |
Operating expense |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 66 |  |  | $ | 86 |  |  | $ | 35 |  |  | $ | 39 |  |  | $ | 12 |  |  | $ | 12 |
Non-operating expense |  |  |  |  |  |  |  |  |  |  |  |
Interest cost |  | 301 |  |  | 331 |  |  | 103 |  |  | 109 |  |  | 43 |  |  | 45 |
Expected return on plan assets |  | (433) |  |  | (488) |  |  | (167) |  |  | (150) |  |  | (34) |  |  | (38) |
Amortization of transition asset |  | — |  |  | — |  |  | 2 |  |  | 1 |  |  | — |  |  | — |
Amortization of prior service benefit |  | (8) |  |  | (12) |  |  | 1 |  |  | 1 |  |  | (12) |  |  | (16) |
Amortization of net actuarial loss |  | 178 |  |  | 147 |  |  | 6 |  |  | 4 |  |  | 10 |  |  | 4 |
Settlements, curtailments, special termination benefits and other |  | 795 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total non-operating expense (benefit) |  | 833 |  |  | (22) |  |  | (55) |  |  | (35) |  |  | 7 |  |  | (5) |
Total net periodic benefit cost (benefit) |  | 899 |  |  | 64 |  |  | (20) |  |  | 4 |  |  | 19 |  |  | 7 |
Service cost - continuing operations |  | $ | 59 |  |  | $ | 70 |  |  | $ | 30 |  |  | $ | 31 |  |  | $ | 11 |  |  | $ | 10 |
Service cost - discontinued operations |  | 7 |  |  | 16 |  |  | 5 |  |  | 8 |  |  | 1 |  |  | 2 |
Total service cost |  | 66 |  |  | 86 |  |  | 35 |  |  | 39 |  |  | 12 |  |  | 12 |
Non-operating expense (benefit) - continuing operations |  | 833 |  |  | (14) |  |  | (55) |  |  | (33) |  |  | 7 |  |  | (4) |
Non-operating expense (benefit) - discontinued operations |  | — |  |  | (8) |  |  | — |  |  | (2) |  |  | — |  |  | (1) |
Total non-operating expense (benefit) |  | 833 |  |  | (22) |  |  | (55) |  |  | (35) |  |  | 7 |  |  | (5) |
Total net periodic benefit cost (benefit) - continuing operations |  | 892 |  |  | 56 |  |  | (25) |  |  | (2) |  |  | 18 |  |  | 6 |
Total net periodic benefit cost (benefit) - discontinued operations |  | 7 |  |  | 8 |  |  | 5 |  |  | 6 |  |  | 1 |  |  | 1 |
Total net periodic benefit cost (benefit) |  | $ | 899 |  |  | $ | 64 |  |  | $ | (20) |  |  | $ | 4 |  |  | $ | 19 |  |  | $ | 7 |
For the six months ended June 30, 2024 contributions totaling $81 million were made to the Company’s U.S. and international pension plans and $5 million to its postretirement plans, including discontinued operations. Future contributions will depend on market conditions, interest rates and other factors. 3M does not expect the previously disclosed range of $100 million to $200 million of expected 2024 cash contributions to its U.S. and international retirement plans to be materially impacted by the April 1, 2024 separation of Solventum (see Note 2). 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. In the second quarter of 2024, 3M recorded a non-cash pension settlement charge of approximately $795 million reflected in other expense (income), net as a result of transferring approximately $2.5 billion of its U.S. pension payment obligations and related plan assets to an insurance company. The pension risk transfer required remeasurement of the plan prior to the calculation of the settlement charge. The net impact of the pension risk transfer and the remeasurement was a decrease of approximately $220 million in the non-current liability for pensions (and corresponding decrease in accumulated comprehensive loss, before deferred taxes). Assumptions used for this remeasurement included discount rates determined using June 30, 2024 market conditions and calculated using the same methodology as disclosed in Note 14 to the Consolidated Financial Statements in 3M's 2023 Annual Report on Form 10-K. Using this methodology, the Company determined a discount rate of 5.43% for the U.S. pension plan as of June 30, 2024. The Company also reduced the expected return on assets assumption determined using June 30, 2024 market conditions and calculated using the same methodology as used at the annual measurement as of December 31, 2023. All other assumptions were consistent with the December 31, 2023 disclosures. This remeasurement will impact net periodic benefit cost for the remainder of 2024. As of March 31, 2024, 3M transferred eligible U.S. Solventum employees and retirees to new U.S. defined benefit pension and postretirement plans with the same benefits of their current plans. The transfer required remeasurement of the plans prior to the calculation of this split. The net impact of the remeasurement was a decrease of approximately $70 million in the non-current liability for pension and postretirement benefits (and corresponding decrease in accumulated comprehensive loss, before deferred taxes). Assumptions used for this remeasurement included discount rates determined using March 31, 2024 market conditions and calculated using the same methodology as disclosed in Note 14 to the Consolidated Financial Statements in 3M's 2023 Annual Report on Form 10-K. All other assumptions were consistent with the December 31, 2023 disclosures. Using this methodology, the Company determined a discount rate of 5.22% for the U.S. pension plans and 5.19% for the U.S. postretirement benefit plans as of March 31, 2024, which are increases of 0.24 percentage points and 0.25 percentage points, respectively, from the rates used as of December 31, 2023. This remeasurement did not impact consolidated income for the three months ended March 31, 2024, but will impact net periodic benefit cost for the remainder of 2024. As of March 31, 2024, there were several small international pension plans remeasured for purposes of transferring Solventum employees to new pension plans, the impact of which was not material.

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