Derivatives not subject to master netting agreements

[Table of](#i7860c65eab2647ffbae7e3867c1cf525_7) [Contents](#i7860c65eab2647ffbae7e3867c1cf525_7)Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties

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|  |  |  |  |  |  | Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements |  |  |  |  |
|  |  |  Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet |  |  Gross Amount of Eligible Offsetting Recognized Derivative Liabilities |  | Cash Collateral Received |  | Net Amount of Derivative Assets |
|  (Millions) |  | September 30, 2022 |  | December 31, 2021 |  | September 30, 2022 |  | December 31, 2021 |  | September 30, 2022 |  | December 31, 2021 |  | September 30, 2022 |  | December 31, 2021 |
| Derivatives subject to master netting agreements |  | $ | 341 |  | $ | 119 |  | $ | 43 |  | $ | 25 |  | $ | — |  | $ | —  |  |  | $ | 298 |  | $ | 94  |  |
| Derivatives not subject to master netting agreements |  | — |  | — |  |  |  |  |  |  |  |  |  | — |  | —  |  |
| Total |  | $ | 341 |  | $ | 119 |  |  |  |  |  |  |  |  |  | $ | 298 |  | $ | 94  |  |

Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties

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|  |  |  |  |  |  | Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements |  |  |  |  |
|  |  |  Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet |  |  Gross Amount of Eligible Offsetting Recognized Derivative Assets |  | Cash Collateral Received |  | Net Amount of Derivative Liabilities |
|  (Millions) |  | September 30, 2022 |  | December 31, 2021 |  | September 30, 2022 |  | December 31, 2021 |  | September 30, 2022 |  | December 31, 2021 |  | September 30, 2022 |  | December 31, 2021 |
| Derivatives subject to master netting agreements |  | $ | 194 |  | $ | 33 |  | $ | 43 |  | $ | 25 |  | $ | — |  | $ | —  |  |  | $ | 151 |  | $ | 8  |  |
| Derivatives not subject to master netting agreements |  | 2 |  | — |  |  |  |  |  |  |  |  |  | 2 |  | —  |  |
| Total |  | $ | 196 |  | $ | 33 |  |  |  |  |  |  |  |  |  | $ | 153 |  | $ | 8  |  |

Currency Effects3M estimates that year-on-year foreign currency transaction effects, including hedging impacts, increased pre-tax income by approximately $43 million and $70 million for the three and nine months ended September 30, 2022, respectively, and decreased pre-tax income by approximately $36 million and $94 million for the three and nine months ended September 30, 2021, respectively. These estimates include transaction gains and losses, including derivative instruments designed to reduce foreign currency exchange rate risks.NOTE 13. Fair Value Measurements3M follows ASC 820, Fair Value Measurements and Disclosures, with respect to assets and liabilities that are measured at fair value on a recurring basis and nonrecurring basis. In addition to the information above, refer to Note 15 to the Consolidated Financial Statements in 3M's Current Report on Form 8-K dated April 26, 2022 (which updated 3M’s 2021 Annual Report on Form 10-K) for a qualitative discussion of the assets and liabilities that are measured at fair value on a recurring and nonrecurring basis, a description of the valuation methodologies used by 3M, and categorization within the valuation framework of ASC 820.25
