ST.
PAUL, Minn., June 13,
2024 /PRNewswire/ -- 3M
(NYSE: MMM) announced that it purchased a group annuity
contract and will transfer a portion of its U.S. pension payment
obligations under the 3M Employee
Retirement Income Plan (ERIP) to Metropolitan Tower Life Insurance
Company (Met Tower Life), an insurance company. Under the contract,
3M will transfer approximately
$2.5 billion of its defined benefit
pension obligations and related plan assets for approximately
23,000 U.S. retirees and beneficiaries to Met Tower Life. This
represents approximately 60% of ERIP retiree participants. The
contract was purchased using assets from 3M's ERIP trust and no
additional funding contribution was required as part of this
transaction.
On October 1, 2024, Met Tower Life
will begin paying and administering the retirement benefits of the
retirees and beneficiaries included in this annuity transfer. This
change will not affect the amount of individuals' monthly benefit
payments. This decision does not impact current employees. Retirees
and beneficiaries who are included in this annuity transfer will be
notified this month.
In connection with this transaction, the company expects to
recognize an estimated non-cash pre-tax non-operating pension
settlement charge of between $0.8 and
$0.9 billion in the quarter ending
June 30, 2024. The actual settlement
charge will depend on finalization of actuarial assumptions,
including discount rate, as well as the fair value of plan assets
as of the measurement date. 3M will
exclude this settlement charge in arriving at non-GAAP results.
Therefore, it will not impact the Company's second quarter or full
year 2024 adjusted net income or adjusted free cash flow.
About 3M
3M (NYSE: MMM) believes science
helps create a brighter world for everyone. By unlocking the power
of people, ideas and science to reimagine what's possible, our
global team uniquely addresses the opportunities and challenges of
our customers, communities, and planet. Learn how we're working to
improve lives and make what's next at 3M.com/news.
Forward-Looking Statements
This news release contains
forward-looking statements related to 3M's defined benefit pension
obligations. You can identify these statements by the use of words
such as "plan," "expect," "aim," "believe," "project," "target,"
"anticipate," "intend," "estimate," "will," "should," "could,"
"would," "forecast" and other words and terms of similar meaning.
Among the factors that could cause actual results to differ
materially are the following: (1) risks that may affect the
Company's funding obligations under defined benefit pension and
postretirement plans, including those related to financial markets
and interest rates, the value of plan assets, legislative or
regulatory changes, and other matters that may impact the timing or
amount of the Company's defined benefit pension and postretirement
plan obligations; (2) worldwide economic, political, regulatory,
international trade, geopolitical, capital markets and other
external conditions and other factors beyond the Company's control,
including inflation, recession, military conflicts, and natural and
other disasters or climate change affecting the operations of the
Company or its customers and suppliers; (3) foreign currency
exchange rates and fluctuations in those rates; (4) liabilities and
the outcome of contingencies related to certain fluorochemicals
known as "PFAS," including liabilities related to claims, lawsuits,
and government regulatory proceedings concerning various
PFAS-related products and chemistries, as well as risks related to
the Company's plans to exit PFAS manufacturing and discontinue use
of PFAS across its product portfolio; (5) risks related to the
class-action settlement to resolve claims by public water systems
in the United States regarding
PFAS; (6) legal proceedings, including significant developments
that could occur in the legal and regulatory proceedings described
in the Company's reports on Form 10-K, 10-Q, and 8-K (the
"Reports"); (7) competitive conditions and customer preferences;
(8) the timing and market acceptance of new product and service
offerings; (9) the availability and cost of purchased components,
compounds, raw materials and energy due to shortages, increased
demand and wages, supply chain interruptions, or natural or other
disasters; (10) unanticipated problems or delays with the phased
implementation of a global enterprise resource planning system, or
security breaches and other disruptions to the Company's
information technology infrastructure; (11) the impact of
acquisitions, strategic alliances, divestitures, and other
strategic events resulting from portfolio management actions and
other evolving business strategies; (12) operational execution,
including the extent to which the Company can realize the benefits
of planned productivity improvements, as well as the impact of
organizational restructuring activities; (13) the Company's credit
ratings and its cost of capital; (14) tax-related external
conditions, including changes in tax rates, laws, or regulations;
(15) matters relating to the spin-off of the Company's Health Care
business, including the risk that the expected benefits will not be
realized; the risk that the costs or dis-synergies will exceed the
anticipated amounts; potential business disruption; the diversion
of management time; the impact of the transaction on the Company's
ability to retain talent; potential impacts on the Company's
relationships with its customers, suppliers, employees, regulators
and other counterparties; the ability to realize the desired tax
treatment; the risk that any consents or approvals required will
not be obtained; risks under the agreements and obligations entered
into in connection with the spin-off, and (16) matters relating to
Combat Arms Earplugs ("CAE"), including those related to the
August 2023 settlement that is
intended to resolve, to the fullest extent possible, all litigation
and alleged claims involving the CAE sold or
manufactured by the Company's subsidiary Aearo Technologies and
certain of its affiliates and/or the Company. Changes in such
assumptions or factors could produce significantly different
results. A further description of these factors is located in the
Reports under "Cautionary Note Concerning Factors That May Affect
Future Results" and "Risk Factors" in Part I, Items 1 and 1A
(Annual Report) and in Part I, Item 2 and Part II, Item 1A
(Quarterly Reports). The Company assumes no obligation to update
any forward-looking statements discussed herein as a result of new
information or future events or developments.
Investor Contact:
Bruce Jermeland
(651) 733-1807
or
Diane Farrow
(612) 202-2449
or
Eric Herron
(651) 233-0043
Media Contact:
Sean
Lynch
Slynch2@mmm.com
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SOURCE 3M Company
